1.1                                        A bill for an act&#10;1.2     relating to financing and operation of state and local government; making &#10;1.3     policy, technical, administrative, enforcement, collection, refund, and other &#10;1.4     changes to income, franchise, property, sales and use, mortgage and deed, health &#10;1.5     care provider, cigarette and tobacco products, liquor, insurance premiums, &#10;1.6     aggregate removal, occupation, net proceeds, and production taxes, the property &#10;1.7     tax refund, and other taxes and tax-related provisions; providing income tax &#10;1.8     credits and subtraction; providing for taxation of foreign operating corporations; &#10;1.9     providing a refund for transit passes; modifying and authorizing sales tax &#10;1.10    exemptions; modifying and authorizing local government sales taxes; modifying &#10;1.11    the homestead market value credit; modifying certain levies; changing and &#10;1.12    providing property tax exemptions and value exclusions; providing for aids and &#10;1.13    payments to local governments; modifying international economic development &#10;1.14    zone authority; authorizing distributions of tax proceeds; changing provisions &#10;1.15    relating to fiscal disparities and education financing; changing and imposing &#10;1.16    powers, duties, and requirements on certain local governments and authorities &#10;1.17    and state departments or agencies; providing for issuance of obligations by local &#10;1.18    governments and other public authorities, and use of the proceeds of the debt; &#10;1.19    changing tax increment financing and abatement provisions, and providing &#10;1.20    authorities to certain districts; imposing a tax on sports memorabilia; changing &#10;1.21    a Council on Disability provision; providing for studies and reports; providing &#10;1.22    penalties; establishing accounts and providing funding; providing for allocation &#10;1.23    and transfers of funds; appropriating money; amending Minnesota Statutes 2004, &#10;1.24    sections 103E.635, subdivision 7; 116A.20, subdivision 3; 116J.993, subdivision &#10;1.25    3; 123B.53, subdivision 5; 144F.01, subdivision 4; 162.18, subdivision 1; &#10;1.26    162.181, subdivision 1; 216B.2424, subdivision 5; 256.482, subdivision 8; &#10;1.27    270A.03, subdivision 2; 272.02, subdivisions 12, 45, 54, 55, by adding a &#10;1.28    subdivision; 272.029, subdivision 2; 273.032; 273.11, by adding a subdivision; &#10;1.29    273.124, subdivision 12, by adding a subdivision; 273.13, subdivision 23; &#10;1.30    273.1384, subdivision 2; 273.1398, subdivision 3; 281.23, subdivision 9; &#10;1.31    289A.09, subdivision 2; 290.06, subdivision 28, by adding subdivisions; &#10;1.32    290.091, subdivision 3; 290.10; 290.17, subdivisions 1, 2; 290.34, subdivision &#10;1.33    1; 295.50, subdivision 4; 295.53, subdivisions 3, 4a; 297A.61, subdivisions &#10;1.34    12, 17, by adding subdivisions; 297A.63; 297A.668, subdivision 6; 297A.669, &#10;1.35    subdivision 11; 297A.67, subdivisions 4, 5, 14, 18, 27, by adding a subdivision; &#10;1.36    297A.68, subdivision 19, by adding a subdivision; 297A.70, subdivisions 2, 3, &#10;1.37    4, 7, 13, 14, 15; 297A.71, subdivision 23, by adding a subdivision; 297A.99, &#10;1.38    subdivision 7; 297F.01, by adding a subdivision; 297G.01, subdivision 7, by &#10;2.1     adding a subdivision; 298.001, by adding a subdivision; 298.01, subdivisions &#10;2.2     3a, 3b, 4a, 4b, by adding a subdivision; 298.17; 298.227; 298.28, subdivisions &#10;2.3     6, 8, by adding subdivisions; 298.2961, by adding a subdivision; 298.75, by &#10;2.4     adding a subdivision; 365A.08; 365A.095; 373.45, subdivision 1; 383A.80, &#10;2.5     subdivision 4; 383B.80, subdivision 4; 469.035; 469.103, subdivision 2; 469.175, &#10;2.6     subdivision 4; 469.176, subdivisions 1, 3; 469.1763, subdivisions 3, 4; 469.1771, &#10;2.7     subdivision 2a; 469.1813, subdivisions 1, 6b, 8, 9, by adding a subdivision; &#10;2.8     469.312, subdivision 5; 473.39, by adding a subdivision; 473F.08, by adding &#10;2.9     a subdivision; 474A.062; 475.58, subdivision 1; 477A.013, subdivision 9; &#10;2.10    477A.014, subdivision 1; 477A.03, subdivision 2; Minnesota Statutes 2005 &#10;2.11    Supplement, sections 115B.49, subdivision 4; 123B.54; 126C.10, subdivision &#10;2.12    13a; 270C.01, subdivision 4; 270C.304; 270C.33, subdivision 4; 270C.57, &#10;2.13    subdivision 3; 270C.67, subdivision 1, by adding a subdivision; 270C.722, &#10;2.14    subdivision 2; 271.12; 272.02, subdivision 83; 273.128, subdivision 1; 273.13, &#10;2.15    subdivisions 22, 25; 273.1384, subdivision 1; 276.04, subdivision 2; 284.07; &#10;2.16    289A.02, subdivision 7; 289A.121, subdivision 5; 290.01, subdivisions 6b, 19, &#10;2.17    19a, 19b, 19c, 19d, 31; 290.0675, subdivision 1; 290.0922, subdivisions 2, 3; &#10;2.18    290A.03, subdivision 15; 297A.61, subdivision 3; 297A.64, subdivision 4; &#10;2.19    297A.67, subdivision 6; 297A.68, subdivisions 37, 38, 41; 297A.70, subdivision &#10;2.20    8; 297A.72, subdivision 2; 297A.75, subdivisions 1, 2, 3; 297A.815, subdivision &#10;2.21    1; 298.01, subdivisions 3, 4; 298.223, subdivision 1; 298.2961, subdivision 4; &#10;2.22    469.175, subdivisions 2, 5; 469.1763, subdivisions 2, 6; 469.177, subdivision 1; &#10;2.23    469.178, subdivision 7; 469.1813, subdivision 6; 469.322; 469.323, subdivision &#10;2.24    2; 469.327; 475.521, subdivision 4; 477A.011, subdivision 36; 477A.013, &#10;2.25    subdivision 8; 477A.03, subdivision 2a;  Laws 1980, chapter 511, section 1, &#10;2.26    subdivision 2, as amended; Laws 1994, chapter 587, article 9, section 20, &#10;2.27    subdivisions 1, 2; Laws 1996, chapter 471, article 2, section 29; Laws 1999, &#10;2.28    chapter 243, article 4, section 18, subdivisions 1, 3, 4; Laws 2001, First Special &#10;2.29    Session chapter 5, article 3, section 8, as amended; Laws 2005, chapter 152, &#10;2.30    article 1, section 39, subdivision 1; Laws 2005, First Special Session chapter &#10;2.31    3, article 2, section 5; article 5, sections 3; 43, subdivision 3; 44, subdivision &#10;2.32    1; article 10, section 23; proposing coding for new law in Minnesota Statutes, &#10;2.33    chapters 41B; 270C; 273; 287; 290; 295; 383C; 383D; 469; repealing Minnesota &#10;2.34    Statutes 2004, sections 297A.68, subdivisions 15, 18; 298.01, subdivisions 3c, &#10;2.35    3d, 4d, 4e; Laws 1994, chapter 587, article 9, section 20, subdivision 4; Laws &#10;2.36    1996, chapter 464, article 1, section 8, subdivision 5; Laws 1998, chapter 389, &#10;2.37    article 11, section 18; Minnesota Rules, parts 8130.0400, subpart 3; 8130.4800, &#10;2.38    subparts 1, 3, 4, 5, 6, 7, 8; 8130.5100; 8130.5400; 8130.5800, subpart 6.&#10;2.39    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:&#10;&#10;<a id="go.1.0.0"></a>2.40                                           <b>ARTICLE 1</b>&#10;2.41                                           <b>INCOME TAX</b>&#10;&#10;<a id="go.1.1.0"></a>2.42        Section 1. <ins><b>[41B.0391] BEGINNING FARMER PROGRAM; TAX CREDITS.</b></ins>&#10;2.43        <ins>Subdivision 1.</ins> <ins><b>Definitions.</b></ins> <ins>(a) For purposes of this section, the following terms </ins>&#10;2.44    <ins>have the meanings given.</ins>&#10;2.45    <ins>(b) "Farm" means any tract of land over ten acres in area used for or devoted to the </ins>&#10;2.46    <ins>commercial production of farm products.</ins>&#10;2.47    <ins>(c) "Farm product" means those plants and animals useful to humans and includes, </ins>&#10;2.48    <ins>but is not limited to, forage and sod crops, grain and feed crops, dairy and dairy products, </ins>&#10;2.49    <ins>poultry and poultry products, livestock, fruits, and vegetables.</ins>&#10;3.1     <ins>(d) "Farming or livestock production" means the active use, management, and </ins>&#10;3.2     <ins>operation of real and personal property for the production of a farm product.</ins>&#10;3.3     <ins>(e) "Beginning farmer or livestock producer" means a resident of Minnesota who:</ins>&#10;3.4     <ins>(1) is seeking entry or has entered within the last two years into farming or livestock </ins>&#10;3.5     <ins>production; </ins>&#10;3.6     <ins>(2) intends to farm or raise crops or livestock on land located within the state borders </ins>&#10;3.7     <ins>of Minnesota; and</ins>&#10;3.8     <ins>(3) meets the following eligibility requirements as determined by the authority:</ins>&#10;3.9     <ins>(i) has a net worth of not more than $200,000, including any holdings by a spouse </ins>&#10;3.10    <ins>or dependent, based on fair market value;</ins>&#10;3.11    <ins>(ii) provides the majority of the day-to-day physical labor and management of the </ins>&#10;3.12    <ins>farm;</ins>&#10;3.13    <ins>(iii) has, by the judgment of the Rural Finance Authority ("authority"), adequate </ins>&#10;3.14    <ins>farming or livestock production experience or demonstrates knowledge in the type of </ins>&#10;3.15    <ins>farming or livestock production for which the beginning farmer seeks assistance from </ins>&#10;3.16    <ins>the authority;</ins>&#10;3.17    <ins>(iv) demonstrates to the authority a profit potential by submitting projected earnings </ins>&#10;3.18    <ins>statements;</ins>&#10;3.19    <ins>(v) asserts to the satisfaction of the authority that farming or livestock production </ins>&#10;3.20    <ins>will be a significant source of income for the beginning farmer or livestock producer; </ins>&#10;3.21    <ins>(vi) participates in a financial management program approved by the authority </ins>&#10;3.22    <ins>or the commissioner of agriculture; and</ins>&#10;3.23    <ins>(vii) has other such qualifications as specified by the authority.</ins>&#10;3.24        <ins>Subd. 2.</ins> <ins><b>Beginning farmer management tax credit.</b></ins> <ins>(a) A beginning farmer or </ins>&#10;3.25    <ins>livestock producer may take a credit against the tax due under chapter 290 for participating </ins>&#10;3.26    <ins>in a financial management program approved by the authority. The credit is equal to 100 </ins>&#10;3.27    <ins>percent of the cost of participating in the program or $500, whichever is less. The credit </ins>&#10;3.28    <ins>is available for up to three years while the farmer is in the program. The authority shall </ins>&#10;3.29    <ins>maintain a list of approved financial management programs and establish a procedure for </ins>&#10;3.30    <ins>approving equivalent programs that are not on the list.</ins>&#10;3.31    <ins>(b) The credit is limited to the liability for tax, as computed under chapter 290 for </ins>&#10;3.32    <ins>the taxable year. If the amount of the credit determined under this section for any taxable </ins>&#10;3.33    <ins>year exceeds this limitation, the excess is a beginning farmer management credit carryover </ins>&#10;3.34    <ins>according to section 290.06, subdivision 35.</ins>&#10;3.35        <ins>Subd. 3.</ins> <ins><b>Authority's duties.</b></ins> <ins>The authority shall:</ins>&#10;4.1     <ins>(1) approve and certify beginning farmers and livestock producers as eligible for </ins>&#10;4.2     <ins>the program under this section;</ins>&#10;4.3     <ins>(2) provide necessary and reasonable assistance and support to beginning farmers </ins>&#10;4.4     <ins>and livestock producers for qualification and participation in financial management </ins>&#10;4.5     <ins>programs approved by the authority; and</ins>&#10;4.6     <ins>(3) refer beginning farmers and livestock producers to agencies and organizations </ins>&#10;4.7     <ins>that may provide additional pertinent information and assistance.</ins>&#10;4.8     <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;4.9     <ins>December 31, 2006.</ins>&#10;&#10;<a id="go.1.2.0"></a>4.10        Sec. 2. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19b, is &#10;4.11    amended to read:&#10;4.12        Subd. 19b. <b>Subtractions from federal taxable income.</b> For individuals, estates, &#10;4.13    and trusts, there shall be subtracted from federal taxable income:&#10;4.14    (1) net interest income on obligations of any authority, commission, or &#10;4.15    instrumentality of the United States to the extent includable in taxable income for federal &#10;4.16    income tax purposes but exempt from state income tax under the laws of the United States;&#10;4.17    (2) if included in federal taxable income, the amount of any overpayment of income &#10;4.18    tax to Minnesota or to any other state, for any previous taxable year, whether the amount &#10;4.19    is received as a refund or as a credit to another taxable year's income tax liability;&#10;4.20    (3) the amount paid to others, less the amount used to claim the credit allowed under &#10;4.21    section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten &#10;4.22    to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and &#10;4.23    transportation of each qualifying child in attending an elementary or secondary school &#10;4.24    situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a &#10;4.25    resident of this state may legally fulfill the state's compulsory attendance laws, which &#10;4.26    is not operated for profit, and which adheres to the provisions of the Civil Rights Act &#10;4.27    of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or &#10;4.28    tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, &#10;4.29    "textbooks" includes books and other instructional materials and equipment purchased &#10;4.30    or leased for use in elementary and secondary schools in teaching only those subjects &#10;4.31    legally and commonly taught in public elementary and secondary schools in this state. &#10;4.32    Equipment expenses qualifying for deduction includes expenses as defined and limited in &#10;4.33    section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional &#10;4.34    books and materials used in the teaching of religious tenets, doctrines, or worship, the &#10;4.35    purpose of which is to instill such tenets, doctrines, or worship, nor does it include books &#10;5.1     or materials for, or transportation to, extracurricular activities including sporting events, &#10;5.2     musical or dramatic events, speech activities, driver's education, or similar programs. For &#10;5.3     purposes of the subtraction provided by this clause, "qualifying child" has the meaning &#10;5.4     given in section 32(c)(3) of the Internal Revenue Code;&#10;5.5     (4) income as provided under section 290.0802;&#10;5.6     (5) to the extent included in federal adjusted gross income, income realized on &#10;5.7     disposition of property exempt from tax under section 290.491;&#10;5.8     (6) to the extent not deducted in determining federal taxable income by an individual &#10;5.9     who does not itemize deductions for federal income tax purposes for the taxable year, an &#10;5.10    amount equal to 50 percent of the excess of charitable contributions over $500 allowable &#10;5.11    as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and &#10;5.12    under the provisions of Public Law 109-1;&#10;5.13    (7) for taxable years beginning before January 1, 2008, the amount of the federal &#10;5.14    small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code &#10;5.15    which is included in gross income under section 87 of the Internal Revenue Code;&#10;5.16    (8) for individuals who are allowed a federal foreign tax credit for taxes that do not &#10;5.17    qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover &#10;5.18    of subnational foreign taxes for the taxable year, but not to exceed the total subnational &#10;5.19    foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, &#10;5.20    "federal foreign tax credit" means the credit allowed under section 27 of the Internal &#10;5.21    Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed &#10;5.22    under section 904(c) of the Internal Revenue Code minus national level foreign taxes to &#10;5.23    the extent they exceed the federal foreign tax credit;&#10;5.24    (9) in each of the five tax years immediately following the tax year in which an &#10;5.25    addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case &#10;5.26    of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth &#10;5.27    of the delayed depreciation. For purposes of this clause, "delayed depreciation" means &#10;5.28    the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or &#10;5.29    subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the &#10;5.30    positive value of any net operating loss under section 172 of the Internal Revenue Code &#10;5.31    generated for the tax year of the addition. The resulting delayed depreciation cannot be &#10;5.32    less than zero;&#10;5.33    (10) job opportunity building zone income as provided under section 469.316;&#10;5.34    (11) the amount of compensation paid to members of the Minnesota National Guard &#10;5.35    or other reserve components of the United States military for active service performed &#10;5.36    in Minnesota, excluding compensation for services performed under the Active Guard &#10;6.1     Reserve (AGR) program. For purposes of this clause, "active service" means (i) state &#10;6.2     active service as defined in section 190.05, subdivision 5a, clause (1); (ii) federally &#10;6.3     funded state active service as defined in section 190.05, subdivision 5b; or (iii) federal &#10;6.4     active service as defined in section 190.05, subdivision 5c, but "active service" excludes &#10;6.5     services performed exclusively for purposes of basic combat training, advanced individual &#10;6.6     training, annual training, and periodic inactive duty training; special training periodically &#10;6.7     made available to reserve members; and service performed in accordance with section &#10;6.8     190.08, subdivision 3;&#10;6.9     (12) the amount of compensation paid to Minnesota residents who are members &#10;6.10    of the armed forces of the United States or United Nations for active duty performed &#10;6.11    outside Minnesota;&#10;6.12    (13) an amount, not to exceed $10,000, equal to qualified expenses related to a &#10;6.13    qualified donor's donation, while living, of one or more of the qualified donor's organs &#10;6.14    to another person for human organ transplantation. For purposes of this clause, "organ" &#10;6.15    means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; &#10;6.16    "human organ transplantation" means the medical procedure by which transfer of a human &#10;6.17    organ is made from the body of one person to the body of another person; "qualified &#10;6.18    expenses" means unreimbursed expenses for both the individual and the qualified donor &#10;6.19    for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses &#10;6.20    may be subtracted under this clause only once; and "qualified donor" means the individual &#10;6.21    or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An &#10;6.22    individual may claim the subtraction in this clause for each instance of organ donation for &#10;6.23    transplantation during the taxable year in which the qualified expenses occur;&#10;6.24    (14) in each of the five tax years immediately following the tax year in which an &#10;6.25    addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a &#10;6.26    shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the &#10;6.27    addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the &#10;6.28    case of a shareholder of a corporation that is an S corporation, minus the positive value of &#10;6.29    any net operating loss under section 172 of the Internal Revenue Code generated for the &#10;6.30    tax year of the addition. If the net operating loss exceeds the addition for the tax year, a &#10;6.31    subtraction is not allowed under this clause;&#10;6.32    (15) to the extent included in federal taxable income, compensation paid to a &#10;6.33    nonresident who is a service member as defined in United States Code, title 10, section &#10;6.34    101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public &#10;6.35    Law 108-189, section 101(2); <del>and</del>&#10;7.1     (16) international economic development zone income as provided under section &#10;7.2     469.325<ins>; and</ins>&#10;7.3     <ins>(17) to the extent included in federal taxable income, a percentage of compensation </ins>&#10;7.4     <ins>received from a pension or other retirement pay from the government for service in the </ins>&#10;7.5     <ins>armed forces of the United States, up to a maximum amount</ins>.&#10;7.6     <ins>For taxable years beginning after December 31, 2005, and before January 1, 2007, the </ins>&#10;7.7     <ins>percentage is 25 percent and the maximum amount is $7,500; for taxable years beginning </ins>&#10;7.8     <ins>after December 31, 2006, and before January 1, 2008, the percentage is 50 percent and </ins>&#10;7.9     <ins>the maximum amount is $15,000; for taxable years beginning after December 31, 2007, </ins>&#10;7.10    <ins>and before January 1, 2009, the percentage is 75 percent and the maximum amount is </ins>&#10;7.11    <ins>$22,500; and for taxable years beginning after December 31, 2008, the percentage is 100 </ins>&#10;7.12    <ins>percent and there is no maximum amount.</ins>&#10;7.13    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;7.14    <ins>December 31, 2006.</ins>&#10;&#10;<a id="go.1.3.0"></a>7.15        Sec. 3. Minnesota Statutes 2004, section 290.06, subdivision 28, is amended to read:&#10;7.16        Subd. 28. <del><b>Credit</b></del><ins><b> Credits and refunds</b></ins><b> for transit passes.</b> <ins>(a) </ins>A taxpayer may &#10;7.17    take a credit against the tax due under this chapter equal to 30 percent of the expense &#10;7.18    incurred by the taxpayer to provide transit passes, for use in Minnesota, to employees of &#10;7.19    the taxpayer. As used in this subdivision, "transit pass" has the meaning given in section &#10;7.20    132(f)(5)(A) of the Internal Revenue Code. If the taxpayer purchases the transit passes &#10;7.21    from the transit system operator, and resells them to the employees, the credit is based on &#10;7.22    the amount of the difference between the price paid for the passes by the employer and &#10;7.23    the amount charged to employees.&#10;7.24    <ins>(b) An employer that is exempt from taxation under section 290.05, but excluding </ins>&#10;7.25    <ins>entities enumerated in section 290.05, subdivision 1, clause (b), may claim a refund equal </ins>&#10;7.26    <ins>to 30 percent of an expense incurred by the employer to provide transit passes to the </ins>&#10;7.27    <ins>employer's employees for use in Minnesota.</ins>&#10;7.28    <ins>(c) The commissioner shall prescribe the forms for and the manner in which the </ins>&#10;7.29    <ins>refund may be claimed. The commissioner must provide for paying refunds at least </ins>&#10;7.30    <ins>quarterly. The commissioner may set a minimum amount of qualifying expenses that must </ins>&#10;7.31    <ins>be incurred before a refund may be claimed.</ins>&#10;7.32    <ins>(d) An amount sufficient to pay the refunds required by this subdivision is </ins>&#10;7.33    <ins>appropriated to the commissioner of revenue.</ins>&#10;8.1     <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for transit passes purchased after </ins>&#10;8.2     <ins>June 30, 2006.</ins>&#10;&#10;<a id="go.1.4.0"></a>8.3         Sec. 4. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision &#10;8.4     to read:&#10;8.5         <ins>Subd. 33.</ins> <ins><b>Film production credit.</b></ins> <ins>(a) A taxpayer is allowed a credit against the </ins>&#10;8.6     <ins>taxes due under this chapter equal to 15 percent of film production expenditures made in </ins>&#10;8.7     <ins>Minnesota that are directly attributable to film production in Minnesota. For purposes of </ins>&#10;8.8     <ins>this subdivision, "film" means a movie, documentary, or music video, whether on film </ins>&#10;8.9     <ins>or video; and "film production" means all the activities related to (i) the preparation for </ins>&#10;8.10    <ins>shooting, (ii) the shooting, including processing, and (iii) the editing and finishing of a </ins>&#10;8.11    <ins>film. For purposes of this subdivision, the following is not a "film:"</ins>&#10;8.12    <ins>(1) news, current events, or public programming or a program that includes weather </ins>&#10;8.13    <ins>or market reports;</ins>&#10;8.14    <ins>(2) a talk show;</ins>&#10;8.15    <ins>(3) a production with respect to a questionnaire or contest;</ins>&#10;8.16    <ins>(4) a sports event or sports activity;</ins>&#10;8.17    <ins>(5) a gala representation or awards show;</ins>&#10;8.18    <ins>(6) a finished production that solicits funds; or</ins>&#10;8.19    <ins>(7) a production for which the production company is required under United States </ins>&#10;8.20    <ins>Code, title 18, section 2257, to maintain records with respect to a performer portrayed </ins>&#10;8.21    <ins>in a single media or multimedia program.</ins>&#10;8.22    <ins>(b) Expenditures that qualify for the credit under this subdivision must be subject to </ins>&#10;8.23    <ins>taxation in Minnesota and include:</ins>&#10;8.24    <ins>(1) payment of wages, fringe benefits, or fees for talent, management, or labor to a </ins>&#10;8.25    <ins>person who is a Minnesota resident for purposes of this chapter;</ins>&#10;8.26    <ins>(2) payment to personal services corporations for the services of a performing artist, </ins>&#10;8.27    <ins>if the performing artist receiving payments from the personal services corporation pays </ins>&#10;8.28    <ins>Minnesota income tax; and </ins>&#10;8.29    <ins>(3) any of the following provided by a vendor:</ins>&#10;8.30    <ins>(i) the story and scenario to be used for a film;</ins>&#10;8.31    <ins>(ii) set construction and operations, wardrobe, accessories, and related services;</ins>&#10;8.32    <ins>(iii) photography, sound synchronization, lighting, and related services;</ins>&#10;8.33    <ins>(iv) editing and related services;</ins>&#10;8.34    <ins>(v) rental of facilities and equipment;</ins>&#10;8.35    <ins>(vi) leasing of vehicles; and </ins>&#10;9.1     <ins>(vii) food and lodging.</ins>&#10;9.2     <ins>(c) If the amount of the credit under this subdivision exceeds the taxpayer's tax </ins>&#10;9.3     <ins>liability under this chapter for the taxable year, the amount of the excess must be refunded </ins>&#10;9.4     <ins>to the taxpayer.  The amount necessary to pay the refunds is appropriated annually from </ins>&#10;9.5     <ins>the general fund to the commissioner of revenue.</ins>&#10;9.6     <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;9.7     <ins>December 31, 2005.</ins> &#10;&#10;<a id="go.1.5.0"></a>9.8         Sec. 5. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision &#10;9.9     to read:&#10;9.10        <ins>Subd. 34.</ins> <ins><b>Credit for military service.</b></ins> <ins>(a) An individual may take a credit </ins>&#10;9.11    <ins>against the tax due under this chapter equal to $59 for each month or portion thereof the </ins>&#10;9.12    <ins>individual was in active military service in a designated area after September 11, 2001. </ins>&#10;9.13    <ins>An individual may take this credit in the taxable year the individual returns to Minnesota </ins>&#10;9.14    <ins>residency following active military service in a designated area. If a Minnesota resident </ins>&#10;9.15    <ins>served in a designated area between September 11, 2001, and December 31, 2005, the </ins>&#10;9.16    <ins>individual may take this credit in the taxable year beginning after December 31, 2005, and </ins>&#10;9.17    <ins>before January 1, 2007.</ins>&#10;9.18    <ins>(b) If a Minnesota resident is killed while serving in active military service in a </ins>&#10;9.19    <ins>designated area, the individual's surviving spouse or dependent child may take this credit </ins>&#10;9.20    <ins>in the taxable year of the death. If a Minnesota resident was killed while serving in a </ins>&#10;9.21    <ins>designated area between September 11, 2002, and December 31, 2005, the individual's </ins>&#10;9.22    <ins>surviving spouse or dependent child may take this credit in the taxable year beginning </ins>&#10;9.23    <ins>after December 31, 2005, and before January 1, 2007.</ins>&#10;9.24    <ins>(c) For purposes of this section, a "designated area" means a:</ins>&#10;9.25    <ins>(1) combat zone designated by Executive Order from the President of the United </ins>&#10;9.26    <ins>States; </ins>&#10;9.27    <ins>(2) qualified hazardous duty area, designated in Public Law; or </ins>&#10;9.28    <ins>(3) location certified by the U.S. Department of Defense as eligible for combat zone </ins>&#10;9.29    <ins>tax benefits due to the location's direct support of military operations.</ins>&#10;9.30    <ins>(d) For purposes of this section, active military service includes active duty service </ins>&#10;9.31    <ins>in any of the United States Armed Forces, the National Guard, or reserves.</ins>&#10;9.32    <ins>(e) If the amount of the credit which the taxpayer is eligible to receive under this </ins>&#10;9.33    <ins>section exceeds the taxpayer's tax liability under this chapter, the commissioner of revenue </ins>&#10;9.34    <ins>shall refund the excess to the taxpayer.</ins>&#10;10.1    <ins>(f) The amount necessary to pay claims for the refund provided in this section is </ins>&#10;10.2    <ins>appropriated from the general fund to the commissioner of revenue.</ins>&#10;10.3    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;10.4    <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.1.6.0"></a>10.5        Sec. 6. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision &#10;10.6    to read:&#10;10.7        <ins>Subd. 35.</ins> <ins><b>Beginning farmer management credit.</b></ins> <ins>(a) A taxpayer who is a </ins>&#10;10.8    <ins>beginning farmer or livestock producer may take a credit against the tax due under </ins>&#10;10.9    <ins>this chapter for participation in a financial management program according to section </ins>&#10;10.10   <ins>41B.0391, subdivision 3.</ins>&#10;10.11   <ins>(b) The credit may be claimed only after approval and certification by the Rural </ins>&#10;10.12   <ins>Finance Authority according to section 41B.0391.</ins>&#10;10.13   <ins>(c) The credit is limited to the liability for tax, as computed under this chapter, for </ins>&#10;10.14   <ins>the taxable year.  If the amount of the credit determined under this subdivision for any </ins>&#10;10.15   <ins>taxable year exceeds this limitation, the excess is a beginning farmer management credit </ins>&#10;10.16   <ins>carryover to each of the three succeeding taxable years.  The entire amount of the excess </ins>&#10;10.17   <ins>unused credit for the taxable year is carried first to the earliest of the taxable years to </ins>&#10;10.18   <ins>which the credit may be carried and then to each successive year to which the credit may </ins>&#10;10.19   <ins>be carried.  The amount of the unused credit which may be added under this paragraph </ins>&#10;10.20   <ins>must not exceed the taxpayer's liability for tax less the beginning farmer management </ins>&#10;10.21   <ins>credit for the taxable year.</ins>&#10;10.22   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;10.23   <ins>December 31, 2006.</ins>&#10;&#10;<a id="go.1.7.0"></a>10.24       Sec. 7. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision &#10;10.25   to read:&#10;10.26       <ins>Subd. 36.</ins> <ins><b>Bovine testing credit.</b></ins> <ins>(a) An owner of cattle in Minnesota may take a </ins>&#10;10.27   <ins>credit against the tax due under this chapter for an amount equal to one-half the expenses </ins>&#10;10.28   <ins>incurred during the taxable year to conduct tuberculosis testing on those cattle. </ins>&#10;10.29   <ins>(b) If the amount of credit which the taxpayer is eligible to receive under this </ins>&#10;10.30   <ins>subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of </ins>&#10;10.31   <ins>revenue shall refund the excess to the taxpayer.</ins>&#10;10.32   <ins>(c) The amount necessary to pay claims for the refund provided in this subdivision is </ins>&#10;10.33   <ins>appropriated from the general fund to the commissioner of revenue.</ins>&#10;11.1    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;11.2    <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.1.8.0"></a>11.3        Sec. 8. Minnesota Statutes 2004, section 290.06, is amended by adding a subdivision &#10;11.4    to read:&#10;11.5        <ins>Subd. 37.</ins> <ins><b>Dairy investment credit.</b></ins> <ins> (a) A dairy investment credit is allowed against </ins>&#10;11.6    <ins>the tax due under this chapter equal to ten percent of the amount paid or incurred by the </ins>&#10;11.7    <ins>taxpayer, on the first $500,000 of qualifying expenditures made in the qualifying period. </ins>&#10;11.8    <ins>(b) "Qualifying expenditures" means for purposes of this subdivision the amount </ins>&#10;11.9    <ins>spent by a person who raises dairy animals for the acquisition, construction, or </ins>&#10;11.10   <ins>improvement of buildings or facilities; or the development of pasture; or the acquisition of </ins>&#10;11.11   <ins>equipment; for dairy animal housing, confinement, animal feeding, production of milk </ins>&#10;11.12   <ins>and other dairy products, and waste management, including the following, if related to </ins>&#10;11.13   <ins>dairy animals in this state: </ins>&#10;11.14   <ins>(1) freestall barns; </ins>&#10;11.15   <ins>(2) fences; </ins>&#10;11.16   <ins>(3) watering facilities; </ins>&#10;11.17   <ins>(4) feed storage and handling equipment; </ins>&#10;11.18   <ins>(5) milking parlors; </ins>&#10;11.19   <ins>(6) robotic equipment; </ins>&#10;11.20   <ins>(7) scales; </ins>&#10;11.21   <ins>(8) milk storage and cooling facilities; </ins>&#10;11.22   <ins>(9) bulk tanks; </ins>&#10;11.23   <ins>(10) manure pumping and storage facilities; </ins>&#10;11.24   <ins>(11) digesters; </ins>&#10;11.25   <ins>(12) equipment used to produce energy; </ins>&#10;11.26   <ins>(13) on-farm processing of milk and other dairy products; and</ins>&#10;11.27   <ins>(14) development of pasture owned or rented by the taxpayer for the use of dairy </ins>&#10;11.28   <ins>animals.</ins>&#10;11.29   <ins>Qualified expenditures only include amounts that are capitalized and deducted under either </ins>&#10;11.30   <ins>section 167 or 179 of the Internal Revenue Code in computing federal taxable income. </ins>&#10;11.31   <ins>(c) The credit is limited to the liability for tax, as computed under this chapter, </ins>&#10;11.32   <ins>for qualifying expenditures, other than expenditures for development of pasture, only </ins>&#10;11.33   <ins>include amounts that are capitalized and deducted under either section 167 or 179 of the </ins>&#10;11.34   <ins>Internal Revenue Code in computing federal taxable income. Qualifying expenditures </ins>&#10;11.35   <ins>for development of pasture must not include land acquisition and are limited to soil </ins>&#10;12.1    <ins>preparation expenses, seed costs, planting costs, and weed control, which are allowed once </ins>&#10;12.2    <ins>for each acre owned or rented by the taxpayer for the use of dairy animals and developed </ins>&#10;12.3    <ins>into pasture during the qualifying period.  The amount of the unused credit which may </ins>&#10;12.4    <ins>be added under this paragraph must not exceed the taxpayer's liability for tax less the </ins>&#10;12.5    <ins>dairy investment credit for the taxable year. </ins>&#10;12.6    <ins>(d) The qualifying period is that time after December 31, 2005, and before January </ins>&#10;12.7    <ins>1, 2012. </ins>&#10;12.8    <ins>(e) The $50,000 maximum credit applies at the entity level for partnerships, S </ins>&#10;12.9    <ins>corporations, trusts, and estates as well as at the individual level.  In the case of married </ins>&#10;12.10   <ins>individuals, the credit is limited to $50,000 for a married couple. </ins>&#10;12.11   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;12.12   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.1.9.0"></a>12.13       Sec. 9. <ins><b>[290.0677] CREDIT FOR HISTORIC STRUCTURE REHABILITATION.</b></ins>&#10;12.14       <ins>Subdivision 1.</ins> <ins><b>Definitions.</b></ins> <ins>(a) As used in this section, the terms defined in this </ins>&#10;12.15   <ins>subdivision have the meanings given. </ins>&#10;12.16   <ins>(b) "Certified historic structure" means a property located  in Minnesota and listed </ins>&#10;12.17   <ins>individually on the National Register of  Historic Places or a historic property designated </ins>&#10;12.18   <ins>by either a certified local government or a heritage preservation commission created </ins>&#10;12.19   <ins>under the National Historic Preservation Act of 1966 and whose designation is approved </ins>&#10;12.20   <ins>by the state historic preservation officer. </ins>&#10;12.21   <ins>(c) "Eligible property" means a certified historic  structure or a structure in a certified </ins>&#10;12.22   <ins>historic district that is offered or used for residential or business purposes.</ins>&#10;12.23   <ins>(d) "Structure in a certified historic district" means a structure located in Minnesota </ins>&#10;12.24   <ins>that is certified by the State Historic Preservation Office as contributing to the historic </ins>&#10;12.25   <ins>significance of a certified historic district listed on the National Register of Historic Places </ins>&#10;12.26   <ins>or a local district that  has been certified by the United States Department of the  Interior.</ins>&#10;12.27       <ins>Subd. 2.</ins> <ins><b>Credit allowed.</b></ins> <ins>A taxpayer who incurs costs for the rehabilitation of </ins>&#10;12.28   <ins>eligible property may take a credit against the tax imposed under this chapter in an amount </ins>&#10;12.29   <ins>equal to ten percent of the total costs of rehabilitation. Costs of rehabilitation include, </ins>&#10;12.30   <ins>but are not limited to, qualified rehabilitation expenditures as defined under section </ins>&#10;12.31   <ins>47(c)(2)(A) of the Internal Revenue Code, provided that the costs of   rehabilitation must </ins>&#10;12.32   <ins>exceed 50 percent of the total basis in the property at the time the rehabilitation activity </ins>&#10;12.33   <ins>begins and the rehabilitation must meet standards consistent with the standards of the </ins>&#10;12.34   <ins>Secretary of the Interior for rehabilitation as   determined by the State Historic Preservation </ins>&#10;12.35   <ins>Office of the Minnesota Historical Society. </ins>&#10;13.1        <ins>Subd. 3.</ins> <ins><b>Carryback and carryforward.</b></ins> <ins>If the amount of the credit under </ins>&#10;13.2    <ins>subdivision 2 exceeds the tax liability under  this chapter for the year in which the cost is </ins>&#10;13.3    <ins>incurred, the   amount that exceeds the tax liability may be carried back to any of the three </ins>&#10;13.4    <ins>preceding taxable years or carried forward to each of the ten taxable years succeeding the </ins>&#10;13.5    <ins>taxable year in which the expense was incurred. The entire amount of the credit must </ins>&#10;13.6    <ins>be carried to the earliest taxable year to which the amount may be carried.  The unused </ins>&#10;13.7    <ins>portion of the credit must be carried to the following taxable year. </ins>&#10;13.8        <ins>Subd. 4.</ins> <ins><b>Partnerships; multiple owners; transfers.</b></ins> <ins>(a) Credits granted to a </ins>&#10;13.9    <ins>partnership, a limited liability company taxed as a partnership, or multiple owners of </ins>&#10;13.10   <ins>property shall be   passed through to the partners, members, or owners, respectively, pro </ins>&#10;13.11   <ins>rata or pursuant to an executed agreement among the partners, members, or owners </ins>&#10;13.12   <ins>documenting an alternate distribution method. </ins>&#10;13.13   <ins>     (b) Taxpayers eligible for credits may transfer, sell, or assign the credits in whole </ins>&#10;13.14   <ins>or part.  Any assignee may use acquired credits to offset up to 100 percent of the taxes </ins>&#10;13.15   <ins>otherwise imposed by this chapter. The assignee shall perfect such transfer by notifying </ins>&#10;13.16   <ins>the Department of Revenue in writing within 30 calendar days following the effective </ins>&#10;13.17   <ins>date of the transfer in such form and manner as shall be prescribed by the Department </ins>&#10;13.18   <ins>of Revenue. The proceeds of any sale or assignment of a credit shall be exempt from </ins>&#10;13.19   <ins>taxation under this chapter.</ins>&#10;13.20       <ins>Subd. 5.</ins> <ins><b>Process.</b></ins> <ins>To claim the credit, the taxpayer must apply to the State Historic </ins>&#10;13.21   <ins>Preservation Office of the Minnesota Historical Society before a historic rehabilitation </ins>&#10;13.22   <ins>project  begins.  The State Historic Preservation Office shall determine the amount of </ins>&#10;13.23   <ins>eligible rehabilitation costs and whether the rehabilitation meets the standards of the </ins>&#10;13.24   <ins>United States Department of the Interior. The State Historic Preservation   Office shall issue </ins>&#10;13.25   <ins>certificates verifying eligibility for and the amount of credit. The taxpayer shall attach </ins>&#10;13.26   <ins>the certificate   to any income tax return on which the credit is claimed. The State Historic </ins>&#10;13.27   <ins>Preservation Office of the Minnesota Historical Society may collect fees for applications </ins>&#10;13.28   <ins>for the historic preservation tax credit. Fees shall be set at an amount that does not exceed </ins>&#10;13.29   <ins>the costs of administering the tax credit program. </ins>&#10;13.30       <ins>Subd. 6.</ins> <ins><b>Mortgage certificates; credit for lending institutions.</b></ins> <ins>(a) The taxpayer </ins>&#10;13.31   <ins>may elect, in lieu of the credit otherwise allowed under this section, to receive a historic </ins>&#10;13.32   <ins>rehabilitation mortgage credit certificate.</ins>&#10;13.33   <ins>(b) For purposes of this subdivision, a historic rehabilitation mortgage credit is a </ins>&#10;13.34   <ins>certificate that is issued   to the taxpayer according to procedures prescribed by the State </ins>&#10;13.35   <ins>Historic Preservation Office with respect to the certified rehabilitation and which meets </ins>&#10;13.36   <ins>the requirements of this paragraph.  The face amount of the certificate must be equal to </ins>&#10;14.1    <ins>the credit that would be allowable under subdivision 2 to the taxpayer with respect to </ins>&#10;14.2    <ins>the rehabilitation. The certificate may only be transferred by the taxpayer to a lending </ins>&#10;14.3    <ins>institution, including a nondepository home mortgage lending institution, in connection </ins>&#10;14.4    <ins>with a loan: </ins>&#10;14.5    <ins>(1) that is secured by the building with respect to which the credit is issued; and </ins>&#10;14.6    <ins>(2) the proceeds of which may not be used for any purpose other than the acquisition </ins>&#10;14.7    <ins>or rehabilitation of the building.</ins>&#10;14.8    <ins>(c) In exchange for the certificate, the lending institution must provide to the </ins>&#10;14.9    <ins>taxpayer an amount equal to the face amount of the certificate discounted by the amount </ins>&#10;14.10   <ins>by which the federal income tax liability of the lending institution is increased due to its </ins>&#10;14.11   <ins>use of the certificate in the manner provided in this section. That amount must be applied, </ins>&#10;14.12   <ins>as directed by the taxpayer, in whole or in part, to reduce:</ins>&#10;14.13   <ins>(1) the principal amount of the loan; </ins>&#10;14.14   <ins>(2) the rate of interest on the loan; or</ins>&#10;14.15   <ins>(3) the taxpayer's cost of purchasing the building, but only in the case of a qualified </ins>&#10;14.16   <ins>historic home that is located in a poverty-impacted area as designated by the State Historic </ins>&#10;14.17   <ins>Preservation Office. The lending institution may take as a credit against the tax due under </ins>&#10;14.18   <ins>this chapter an amount equal to the amount specified in the certificate. If the amount of </ins>&#10;14.19   <ins>the discount retained by the lender exceeds the amount by which the lending institution's </ins>&#10;14.20   <ins>federal income tax liability is increased due to the use of a mortgage credit certificate, the </ins>&#10;14.21   <ins>excess shall be refunded to the borrower with interest at the rate prescribed by the State </ins>&#10;14.22   <ins>Historic Preservation Office. The lending institution may carry forward all unused credits </ins>&#10;14.23   <ins>under this subdivision until exhausted. Nothing in this subdivision requires a lending </ins>&#10;14.24   <ins>institution to accept a historic rehabilitation certificate from any person. </ins>&#10;14.25   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;14.26   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.1.10.0"></a>14.27       Sec. 10. Minnesota Statutes 2004, section 290.10, is amended to read:&#10;14.28   <b>290.10 NONDEDUCTIBLE ITEMS.</b>&#10;14.29       <ins>Subdivision 1.</ins> <ins><b>Expenses, interest, and taxes.</b></ins> Except as provided in section  290.17, &#10;14.30   subdivision 4, paragraph (i), in computing the net income of a taxpayer no deduction shall &#10;14.31   in any case be allowed for expenses, interest and taxes connected with or allocable against &#10;14.32   the production or receipt of all income not included in the measure of the tax imposed by &#10;14.33   this chapter, except that for corporations engaged in the business of mining or producing &#10;14.34   iron ore, the mining of which is subject to the occupation tax imposed by section  298.01, &#10;15.1    subdivision 4, this shall not prevent the deduction of expenses and other items to the extent &#10;15.2    that the expenses and other items are allowable under this chapter and are not deductible, &#10;15.3    capitalizable, retainable in basis, or taken into account by allowance or otherwise in &#10;15.4    computing the occupation tax and do not exceed the amounts taken for federal income &#10;15.5    tax purposes for that year. Occupation taxes imposed under chapter 298, royalty taxes &#10;15.6    imposed under chapter 299, or depletion expenses may not be deducted under this clause. &#10;15.7        <ins>Subd. 2.</ins> <ins><b>Fines, penalties, damages, and expenses.</b></ins> <ins>(a) No deduction from taxable </ins>&#10;15.8    <ins>income for a trade or business expense under section 162(a) of the Internal Revenue Code </ins>&#10;15.9    <ins>shall be allowed for any fine, penalty, damages, or expenses paid to:</ins>&#10;15.10   <ins>(1) the government of the United States, a state, a territory or possession of the </ins>&#10;15.11   <ins>United States, the District of Columbia, or the Commonwealth of Puerto Rico;</ins>&#10;15.12   <ins>(2) the government of a foreign country; or</ins>&#10;15.13   <ins>(3) a political subdivision of, or corporation or other entity serving as an agency or </ins>&#10;15.14   <ins>instrumentality of, any government described in clause (1) or (2).</ins>&#10;15.15   <ins>(b) For purposes of this subdivision, "fine, penalty, damages, or expenses" include, </ins>&#10;15.16   <ins>but are not limited to, any amount:</ins>&#10;15.17   <ins>(1) paid pursuant to a conviction or a plea of guilty or nolo contendere for any </ins>&#10;15.18   <ins>crime in a criminal proceeding; </ins>&#10;15.19   <ins>(2) paid as a civil penalty imposed by federal, state, or local law, including tax </ins>&#10;15.20   <ins>penalties and interest; </ins>&#10;15.21   <ins>(3) paid in settlement of the taxpayer's actual or potential liability for a civil or </ins>&#10;15.22   <ins>criminal fine or penalty;</ins>&#10;15.23   <ins>(4) forfeited as collateral posted in connection with a proceeding that could result in </ins>&#10;15.24   <ins>imposition of a fine or penalty; or</ins>&#10;15.25   <ins>(5) legal fees and related expenses paid or incurred in the prosecution or civil action </ins>&#10;15.26   <ins>arising from a violation of the law imposing the fine or civil penalty, court costs assessed </ins>&#10;15.27   <ins>against the taxpayer, or stenographic and printing charges, compensatory damages, </ins>&#10;15.28   <ins>punitive damages, or restitution.</ins>&#10;15.29   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;15.30   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.2.0.0"></a>15.31                                          <b>ARTICLE 2</b>&#10;15.32                                      <b>INCOME TAX REFORM</b>&#10;&#10;<a id="go.2.1.0"></a>15.33       Section 1. Minnesota Statutes 2005 Supplement, section 289A.02, subdivision 7, &#10;15.34   is amended to read:&#10;16.1        Subd. 7. <b>Internal Revenue Code.</b> Unless specifically defined otherwise, "Internal &#10;16.2    Revenue Code" means the Internal Revenue Code of 1986, as amended through <del>April </del>&#10;16.3    <del>15</del><ins> December 31</ins>, 2005.&#10;16.4    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.2.2.0"></a>16.5        Sec. 2. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19, is &#10;16.6    amended to read:&#10;16.7        Subd. 19. <b>Net income.</b> The term "net income" means the federal taxable income, &#10;16.8    as defined in section 63 of the Internal Revenue Code of 1986, as amended through the &#10;16.9    date named in this subdivision, incorporating the federal effective dates of changes to the &#10;16.10   Internal Revenue Code and any elections made by the taxpayer in accordance with the &#10;16.11   Internal Revenue Code in determining federal taxable income for federal income tax &#10;16.12   purposes, and with the modifications provided in subdivisions 19a to 19f.&#10;16.13   In the case of a regulated investment company or a fund thereof, as defined in section &#10;16.14   851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment &#10;16.15   company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, &#10;16.16   except that:&#10;16.17   (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal &#10;16.18   Revenue Code does not apply;&#10;16.19   (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal &#10;16.20   Revenue Code must be applied by allowing a deduction for capital gain dividends and &#10;16.21   exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal &#10;16.22   Revenue Code; and&#10;16.23   (3) the deduction for dividends paid must also be applied in the amount of any &#10;16.24   undistributed capital gains which the regulated investment company elects to have treated &#10;16.25   as provided in section 852(b)(3)(D) of the Internal Revenue Code.&#10;16.26   The net income of a real estate investment trust as defined and limited by section &#10;16.27   856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust &#10;16.28   taxable income as defined in section 857(b)(2) of the Internal Revenue Code.&#10;16.29   The net income of a designated settlement fund as defined in section 468B(d) of &#10;16.30   the Internal Revenue Code means the gross income as defined in section 468B(b) of the &#10;16.31   Internal Revenue Code.&#10;16.32   The Internal Revenue Code of 1986, as amended through <del>April 15</del><ins> December 31</ins>, &#10;16.33   2005, shall be in effect for taxable years beginning after December 31, 1996.&#10;17.1    Except as otherwise provided, references to the Internal Revenue Code in &#10;17.2    subdivisions 19 to 19f mean the code in effect for purposes of determining net income for &#10;17.3    the applicable year.&#10;17.4    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment. </ins>&#10;&#10;<a id="go.2.3.0"></a>17.5        Sec. 3. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19a, is &#10;17.6    amended to read:&#10;17.7        Subd. 19a. <b>Additions to federal taxable income.</b> For individuals, estates, and &#10;17.8    trusts, there shall be added to federal taxable income:&#10;17.9    (1)(i) interest income on obligations of any state other than Minnesota or a political &#10;17.10   or governmental subdivision, municipality, or governmental agency or instrumentality &#10;17.11   of any state other than Minnesota exempt from federal income taxes under the Internal &#10;17.12   Revenue Code or any other federal statute; and&#10;17.13   (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue &#10;17.14   Code, except the portion of the exempt-interest dividends derived from interest income &#10;17.15   on obligations of the state of Minnesota or its political or governmental subdivisions, &#10;17.16   municipalities, governmental agencies or instrumentalities, but only if the portion of the &#10;17.17   exempt-interest dividends from such Minnesota sources paid to all shareholders represents &#10;17.18   95 percent or more of the exempt-interest dividends that are paid by the regulated &#10;17.19   investment company as defined in section 851(a) of the Internal Revenue Code, or the &#10;17.20   fund of the regulated investment company as defined in section 851(g) of the Internal &#10;17.21   Revenue Code, making the payment; and&#10;17.22   (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal &#10;17.23   government described in section 7871(c) of the Internal Revenue Code shall be treated as &#10;17.24   interest income on obligations of the state in which the tribe is located;&#10;17.25   (2) the amount of income or sales and use taxes paid or accrued within the taxable &#10;17.26   year under this chapter and the amount of taxes based on net income paid or sales and &#10;17.27   use taxes paid to any other state or to any province or territory of Canada, to the extent &#10;17.28   allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition &#10;17.29   may not be more than the amount by which the itemized deductions as allowed under &#10;17.30   section 63(d) of the Internal Revenue Code<del> exceeds the amount of the standard deduction </del>&#10;17.31   <del>as defined in section 63(c) of the Internal Revenue Code minus the addition which would </del>&#10;17.32   <del>have been required under clause (10) if the taxpayer had claimed the standard deduction</del>. &#10;17.33   For the purpose of this paragraph, the disallowance of itemized deductions under section &#10;17.34   68 of the Internal Revenue Code of 1986, income or sales and use tax is the last itemized &#10;17.35   deduction disallowed;&#10;18.1    (3) the capital gain amount of a lump sum distribution to which the special tax under &#10;18.2    section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;&#10;18.3    (4) the amount of income taxes paid or accrued within the taxable year under this &#10;18.4    chapter and taxes based on net income paid to any other state or any province or territory &#10;18.5    of Canada, to the extent allowed as a deduction in determining federal adjusted gross &#10;18.6    income. For the purpose of this paragraph, income taxes do not include the taxes imposed &#10;18.7    by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;&#10;18.8    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 &#10;18.9    other than expenses or interest used in computing net interest income for the subtraction &#10;18.10   allowed under subdivision 19b, clause (1);&#10;18.11   (6) the amount of a partner's pro rata share of net income which does not flow &#10;18.12   through to the partner because the partnership elected to pay the tax on the income under &#10;18.13   section 6242(a)(2) of the Internal Revenue Code;&#10;18.14   (7) 80 percent of the depreciation deduction allowed under section 168(k) of the &#10;18.15   Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that &#10;18.16   in the taxable year generates a deduction for depreciation under section 168(k) and the &#10;18.17   activity generates a loss for the taxable year that the taxpayer is not allowed to claim for &#10;18.18   the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is &#10;18.19   limited to excess of the depreciation claimed by the activity under section 168(k) over the &#10;18.20   amount of the loss from the activity that is not allowed in the taxable year. In succeeding &#10;18.21   taxable years when the losses not allowed in the taxable year are allowed, the depreciation &#10;18.22   under section 168(k) is allowed;&#10;18.23   (8) 80 percent of the amount by which the deduction allowed by section 179 of the &#10;18.24   Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal &#10;18.25   Revenue Code of 1986, as amended through December 31, 2003;&#10;18.26   (9) to the extent deducted in computing federal taxable income, the amount of the &#10;18.27   deduction allowable under section 199 of the Internal Revenue Code; <ins>and</ins>&#10;18.28   <del>(10) for tax years beginning after December 31, 2004, to the extent deducted in </del>&#10;18.29   <del>computing federal taxable income, the amount by which the standard deduction allowed </del>&#10;18.30   <del>under section 63(c) of the Internal Revenue Code exceeds the standard deduction </del>&#10;18.31   <del>allowable under section 63(c) of the Internal Revenue Code of 1986, as amended through </del>&#10;18.32   <del>December 31, 2003; and</del>&#10;18.33   <del>(11)</del> <ins>(10)</ins> the exclusion allowed under section 139A of the Internal Revenue Code &#10;18.34   for federal subsidies for prescription drug plans.&#10;18.35   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;18.36   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.2.4.0"></a>19.1        Sec. 4. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 31, is &#10;19.2    amended to read:&#10;19.3        Subd. 31. <b>Internal Revenue Code.</b> Unless specifically defined otherwise, "Internal &#10;19.4    Revenue Code" means the Internal Revenue Code of 1986, as amended through <del>April </del>&#10;19.5    <del>15</del><ins> December 31</ins>, 2005.&#10;19.6    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment, </ins>&#10;19.7    <ins>except the changes incorporated by federal changes are effective at the same times as the </ins>&#10;19.8    <ins>changes were effective for federal purposes.</ins>&#10;&#10;<a id="go.2.5.0"></a>19.9        Sec. 5. Minnesota Statutes 2005 Supplement, section 290.0675, subdivision 1, is &#10;19.10   amended to read:&#10;19.11       Subdivision 1. <b>Definitions.</b> (a) For purposes of this section the following terms &#10;19.12   have the meanings given.&#10;19.13   (b) "Earned income" means the sum of the following, to the extent included in &#10;19.14   Minnesota taxable income:&#10;19.15   (1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;&#10;19.16   (2) income received from a retirement pension, profit-sharing, stock bonus, or &#10;19.17   annuity plan; and&#10;19.18   (3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue &#10;19.19   Code.&#10;19.20   (c) "Taxable income" means net income as defined in section 290.01, subdivision 19.&#10;19.21   (d) "Earned income of lesser-earning spouse" means the earned income of the &#10;19.22   spouse with the lesser amount of earned income as defined in paragraph (b) for the taxable &#10;19.23   year minus the sum of (i) the amount for one exemption under section 151(d) of the &#10;19.24   Internal Revenue Code and (ii) one-half the amount of the standard deduction under &#10;19.25   section 63(c)(2)(A) and (4) of the Internal Revenue Code<del> minus one-half of any addition </del>&#10;19.26   <del>required under section </del><del>290.01, subdivision 19a</del><del>, clause (10), and one-half of the addition </del>&#10;19.27   <del>which would have been required under section </del><del>290.01, subdivision 19a</del><del>, clause (10), if the </del>&#10;19.28   <del>taxpayer had claimed the standard deduction</del>.&#10;19.29   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;19.30   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.2.6.0"></a>19.31       Sec. 6. Minnesota Statutes 2004, section 290.091, subdivision 3, is amended to read:&#10;19.32       Subd. 3. <b>Exemption amount.</b> <ins>(a) </ins>For purposes of computing the alternative &#10;19.33   minimum tax, the exemption amount is<ins>:</ins>&#10;20.1    <ins>(1) for taxable years beginning before January 1, 2006,</ins> the exemption determined &#10;20.2    under section 55(d) of the Internal Revenue Code, as amended through December 31, &#10;20.3    1992<ins>; and</ins>&#10;20.4    <ins>(2) for taxable years beginning after December 31, 2005, $60,000 for married </ins>&#10;20.5    <ins>couples filing joint returns, $30,000 for married individuals filing separate returns, estates, </ins>&#10;20.6    <ins>and trusts, and $45,000 for unmarried individuals.</ins>&#10;20.7    <ins>(b) The exemption amount determined under this subdivision is subject to the phase </ins>&#10;20.8    <ins>out under section 55(d)(3) of the Internal Revenue Code</ins>, except that alternative minimum &#10;20.9    taxable income as determined under this section must be substituted in the computation &#10;20.10   of the phase out <del>under section 55(d)(3)</del>.&#10;20.11   <ins>(c) For taxable years beginning after December 31, 2006, the exemption amount </ins>&#10;20.12   <ins>under paragraph (a), clause (2), must be adjusted for inflation. The commissioner shall </ins>&#10;20.13   <ins>make the inflation adjustments in accordance with section 1(f) of the Internal Revenue </ins>&#10;20.14   <ins>Code except that for the purposes of this subdivision the percentage increase must be </ins>&#10;20.15   <ins>determined from the year starting September 1, 2005, and ending August 31, 2006, as the </ins>&#10;20.16   <ins>base year for adjusting for inflation for the tax year beginning after December 31, 2006. </ins>&#10;20.17   <ins>The determination of the commissioner under this subdivision is not a rule under the </ins>&#10;20.18   <ins>Administrative Procedure Act.</ins>&#10;20.19   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;20.20   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.2.7.0"></a>20.21       Sec. 7. Minnesota Statutes 2004, section 290.17, subdivision 2, is amended to read:&#10;20.22       Subd. 2. <b>Income not derived from conduct of a trade or business.</b> The income of &#10;20.23   a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or &#10;20.24   business must be assigned in accordance with paragraphs (a) to (f):&#10;20.25   (a)(1) Subject to paragraphs (a)(2)<del>,</del><ins> and</ins> (a)(3), <del>and (a)(4),</del> income from wages as &#10;20.26   defined in section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, &#10;20.27   and to the extent that, the work of the employee is performed within it; all other income &#10;20.28   from such sources is treated as income from sources without this state.&#10;20.29   Severance pay shall be considered income from labor or personal or professional &#10;20.30   services.&#10;20.31   (2) In the case of an individual who is a nonresident of Minnesota and who is an &#10;20.32   athlete or entertainer, income from compensation for labor or personal services performed &#10;20.33   within this state shall be determined in the following manner:&#10;20.34   (i) The amount of income to be assigned to Minnesota for an individual who is a &#10;20.35   nonresident salaried athletic team employee shall be determined by using a fraction in &#10;21.1    which the denominator contains the total number of days in which the individual is under &#10;21.2    a duty to perform for the employer, and the numerator is the total number of those days &#10;21.3    spent in Minnesota. For purposes of this paragraph, off-season training activities, unless &#10;21.4    conducted at the team's facilities as part of a team imposed program, are not included in &#10;21.5    the total number of duty days. Bonuses earned as a result of play during the regular season &#10;21.6    or for participation in championship, play-off, or all-star games must be allocated under &#10;21.7    the formula. Signing bonuses are not subject to allocation under the formula if they are &#10;21.8    not conditional on playing any games for the team, are payable separately from any other &#10;21.9    compensation, and are nonrefundable; and&#10;21.10   (ii) The amount of income to be assigned to Minnesota for an individual who is a &#10;21.11   nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's &#10;21.12   athletic or entertainment performance in Minnesota shall be determined by assigning to &#10;21.13   this state all income from performances or athletic contests in this state.&#10;21.14   (3) For purposes of this section, amounts received by a nonresident as "retirement &#10;21.15   income" as defined in section (b)(1) of the State Income Taxation of Pension Income &#10;21.16   Act, Public Law 104-95, are not considered income derived from carrying on a trade &#10;21.17   or business or from wages or other compensation for work an employee performed in &#10;21.18   Minnesota, and are not taxable under this chapter.&#10;21.19   <del>(4) Wages, otherwise assigned to this state under clause (1) and not qualifying under </del>&#10;21.20   <del>clause (3), are not taxable under this chapter if the following conditions are met:</del>&#10;21.21   <del>(i) the recipient was not a resident of this state for any part of the taxable year in </del>&#10;21.22   <del>which the wages were received; and</del>&#10;21.23   <del>(ii) the wages are for work performed while the recipient was a resident of this state.</del>&#10;21.24   (b) Income or gains from tangible property located in this state that is not employed &#10;21.25   in the business of the recipient of the income or gains must be assigned to this state.&#10;21.26   (c) Income or gains from intangible personal property not employed in the business &#10;21.27   of the recipient of the income or gains must be assigned to this state if the recipient of the &#10;21.28   income or gains is a resident of this state or is a resident trust or estate.&#10;21.29   Gain on the sale of a partnership interest is allocable to this state in the ratio of the &#10;21.30   original cost of partnership tangible property in this state to the original cost of partnership &#10;21.31   tangible property everywhere, determined at the time of the sale. If more than 50 percent &#10;21.32   of the value of the partnership's assets consists of intangibles, gain or loss from the sale &#10;21.33   of the partnership interest is allocated to this state in accordance with the sales factor of &#10;21.34   the partnership for its first full tax period immediately preceding the tax period of the &#10;21.35   partnership during which the partnership interest was sold.&#10;22.1    Gain on the sale of goodwill or income from a covenant not to compete that is &#10;22.2    connected with a business operating all or partially in Minnesota is allocated to this state &#10;22.3    to the extent that the income from the business in the year preceding the year of sale was &#10;22.4    assignable to Minnesota under subdivision 3.&#10;22.5    When an employer pays an employee for a covenant not to compete, the income &#10;22.6    allocated to this state is in the ratio of the employee's service in Minnesota in the calendar &#10;22.7    year preceding leaving the employment of the employer over the total services performed &#10;22.8    by the employee for the employer in that year.&#10;22.9    (d) Income from winnings on a bet made by an individual while in Minnesota is &#10;22.10   assigned to this state. In this paragraph, "bet" has the meaning given in section  609.75, &#10;22.11   subdivision 2, as limited by section  609.75, subdivision 3, clauses (1), (2), and (3). &#10;22.12   (e) All items of gross income not covered in paragraphs (a) to (d) and not part of the &#10;22.13   taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.&#10;22.14   (f) For the purposes of this section, working as an employee shall not be considered &#10;22.15   to be conducting a trade or business.&#10;22.16   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;22.17   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.2.8.0"></a>22.18       Sec. 8. Minnesota Statutes 2005 Supplement, section 290A.03, subdivision 15, is &#10;22.19   amended to read:&#10;22.20       Subd. 15. <b>Internal Revenue Code.</b> "Internal Revenue Code" means the Internal &#10;22.21   Revenue Code of 1986, as amended through <del>April 15</del><ins> December 31</ins>, 2005.&#10;22.22   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for property taxes payable on or after </ins>&#10;22.23   <ins>December 31, 2005, and rent paid on or after December 31, 2004.</ins>&#10;&#10;<a id="go.2.9.0"></a>22.24       Sec. 9. <ins><b>NET INCOME; FEDERAL CONFORMITY.</b></ins>&#10;22.25   <ins>For taxable years beginning after December 31, 2004, and before December 31, </ins>&#10;22.26   <ins>2006, the definition of "net income" in Minnesota Statutes, section 290.01, subdivision 19, </ins>&#10;22.27   <ins>must be interpreted by the Department of Revenue to conform to the position taken by </ins>&#10;22.28   <ins>the Internal Revenue Service in Revenue Notice 2005-68.</ins>&#10;&#10;<a id="go.2.10.0"></a>22.29       Sec. 10. <ins><b>MARRIED JOINT FILERS; TAXABLE YEAR 2005.</b></ins>&#10;22.30   <ins>For taxable years beginning after December 31, 2004, and before January 1, 2006, </ins>&#10;22.31   <ins>the liability for tax under Minnesota Statutes, chapter 290, must be determined as if the </ins>&#10;23.1    <ins>addition to federal taxable income under Minnesota Statutes 2005 Supplement, section </ins>&#10;23.2    <ins>290.01, subdivision 19a, clause (10), did not apply.</ins>&#10;23.3    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.2.11.0"></a>23.4        Sec. 11. <ins><b>REFUNDS.</b></ins>&#10;23.5    <ins>The commissioner of revenue must review individual income tax returns that may be </ins>&#10;23.6    <ins>subject to section 10 and adjust the tax liability accordingly. If the tax paid for the taxable </ins>&#10;23.7    <ins>year beginning after December 31, 2004, and before January 1, 2006, by any taxpayer </ins>&#10;23.8    <ins>under Minnesota Statutes, chapter 290, as amended through December 31, 2005, to the </ins>&#10;23.9    <ins>commissioner of revenue is greater than the tax liability determined under section 10, </ins>&#10;23.10   <ins>the commissioner must pay the taxpayer a refund of the difference. If the tax paid for </ins>&#10;23.11   <ins>that taxable year by any taxpayer under Minnesota Statutes, chapter 290, as amended </ins>&#10;23.12   <ins>through December 31, 2005, is less than the tax liability determined under section 10, no </ins>&#10;23.13   <ins>additional payment is required of the taxpayer. The refunds issued under this section are </ins>&#10;23.14   <ins>not subject to accrual of interest.</ins>&#10;23.15   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.2.12.0"></a>23.16       Sec. 12. <ins><b>APPROPRIATION.</b></ins>&#10;23.17   <ins>The amount necessary to issue refunds under section 11 and the administrative costs </ins>&#10;23.18   <ins>associated with the issuance of refunds is appropriated from the Tax Relief Account under </ins>&#10;23.19   <ins>Minnesota Statutes, section 16A.1522, subdivision 4, to the commissioner of revenue. </ins>&#10;23.20   <ins>Notwithstanding Minnesota Statutes, section 16A.285, the commissioner of revenue may </ins>&#10;23.21   <ins>not use this appropriation for any purpose other than administering the refunds under </ins>&#10;23.22   <ins>section 11. This is a onetime appropriation and may not be added to the agency's budget </ins>&#10;23.23   <ins>base.</ins>&#10;23.24   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.3.0.0"></a>23.25                                          <b>ARTICLE 3</b>&#10;23.26                                      <b>SALES AND USE TAX</b>&#10;&#10;<a id="go.3.1.0"></a>23.27       Section 1. Minnesota Statutes 2005 Supplement, section 270C.722, subdivision 2, &#10;23.28   is amended to read:&#10;23.29       Subd. 2. <b>New permits after revocation.</b> (a) The commissioner shall not issue a &#10;23.30   new permit after revocation or reinstate a revoked permit unless the taxpayer applies for a &#10;23.31   permit and provides reasonable evidence of intention to comply with the sales and use &#10;24.1    tax laws and rules. The commissioner may require the applicant to provide security, in &#10;24.2    addition to that authorized by section 297A.92, in an amount reasonably necessary to &#10;24.3    ensure compliance with the sales and use tax laws and rules. If the commissioner issues &#10;24.4    or reinstates a permit not in conformance with the requirements of this subdivision or &#10;24.5    applicable rules, the commissioner may cancel the permit upon notice to the permit holder. &#10;24.6    The notice must be served by first class and certified mail at the permit holder's last known &#10;24.7    address. The cancellation shall be effective immediately, subject to the right of the permit &#10;24.8    holder to show that the permit was issued in conformance with the requirements of this &#10;24.9    subdivision and applicable rules. Upon such showing, the permit must be reissued.&#10;24.10   (b) If a taxpayer has had a permit or permits revoked three times in a five-year &#10;24.11   period, the commissioner <del>shall not</del><ins> may refuse to</ins> issue a new permit or reinstate the &#10;24.12   revoked permit until 24 months have elapsed after revocation and the taxpayer has &#10;24.13   satisfied the conditions for reinstatement of a revoked permit or issuance of a new permit &#10;24.14   imposed by this section and rules adopted under this section.&#10;24.15   (c) For purposes of this subdivision, "taxpayer" means:&#10;24.16   (1) an individual, if a revoked permit was issued to or in the name of an individual, &#10;24.17   or a corporation or partnership, if a revoked permit was issued to or in the name of a &#10;24.18   corporation or partnership; and&#10;24.19   (2) an officer of a corporation, a member of a partnership, or an individual who is &#10;24.20   liable for delinquent sales taxes, either for the entity for which the new or reinstated &#10;24.21   permit is at issue, or for another entity for which a permit was previously revoked, or &#10;24.22   personally as a permit holder.&#10;&#10;<a id="go.3.2.0"></a>24.23       Sec. 2. Minnesota Statutes 2005 Supplement, section 297A.61, subdivision 3, is &#10;24.24   amended to read:&#10;24.25       Subd. 3. <b>Sale and purchase.</b> (a) "Sale" and "purchase" include, but are not limited &#10;24.26   to, each of the transactions listed in this subdivision.&#10;24.27   (b) Sale and purchase include:&#10;24.28   (1) any transfer of title or possession, or both, of tangible personal property, whether &#10;24.29   absolutely or conditionally, for a consideration in money or by exchange or barter; and&#10;24.30   (2) the leasing of or the granting of a license to use or consume, for a consideration &#10;24.31   in money or by exchange or barter, tangible personal property, other than a manufactured &#10;24.32   home used for residential purposes for a continuous period of 30 days or more.&#10;24.33   (c) Sale and purchase include the production, fabrication, printing, or processing of &#10;24.34   tangible personal property for a consideration for consumers who furnish either directly or &#10;24.35   indirectly the materials used in the production, fabrication, printing, or processing.&#10;25.1    (d) Sale and purchase include the preparing for a consideration of food. &#10;25.2    Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited &#10;25.3    to, the following:&#10;25.4    (1) prepared food sold by the retailer;&#10;25.5    (2) soft drinks;&#10;25.6    (3) candy;&#10;25.7    (4) dietary supplements; and&#10;25.8    (5) all food sold through vending machines<ins>, except milk</ins>.&#10;25.9    (e) A sale and a purchase includes the furnishing for a consideration of electricity, &#10;25.10   gas, water, or steam for use or consumption within this state.&#10;25.11   (f) A sale and a purchase includes the transfer for a consideration of prewritten &#10;25.12   computer software whether delivered electronically, by load and leave, or otherwise.&#10;25.13   (g) A sale and a purchase includes the furnishing for a consideration of the following &#10;25.14   services:&#10;25.15   (1) the privilege of admission to places of amusement, recreational areas, or athletic &#10;25.16   events, and the making available of amusement devices, tanning facilities, reducing &#10;25.17   salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;&#10;25.18   (2) lodging and related services by a hotel, rooming house, resort, campground, &#10;25.19   motel, or trailer camp and the granting of any similar license to use real property in a &#10;25.20   specific facility, other than the renting or leasing of it for a continuous period of 30 days &#10;25.21   or more under an enforceable written agreement that may not be terminated without &#10;25.22   prior notice;&#10;25.23   (3) nonresidential parking services, whether on a contractual, hourly, or other &#10;25.24   periodic basis, except for parking at a meter;&#10;25.25   (4) the granting of membership in a club, association, or other organization if:&#10;25.26   (i) the club, association, or other organization makes available for the use of its &#10;25.27   members sports and athletic facilities, without regard to whether a separate charge is &#10;25.28   assessed for use of the facilities; and&#10;25.29   (ii) use of the sports and athletic facility is not made available to the general public &#10;25.30   on the same basis as it is made available to members.&#10;25.31   Granting of membership means both onetime initiation fees and periodic membership &#10;25.32   dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and &#10;25.33   squash courts; basketball and volleyball facilities; running tracks; exercise equipment; &#10;25.34   swimming pools; and other similar athletic or sports facilities;&#10;26.1    (5) delivery of aggregate materials and concrete block by a third party if the delivery &#10;26.2    would be subject to the sales tax if provided by the seller of the aggregate material or &#10;26.3    concrete block; and&#10;26.4    (6) services as provided in this clause:&#10;26.5    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, &#10;26.6    and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, &#10;26.7    drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not &#10;26.8    include services provided by coin operated facilities operated by the customer;&#10;26.9    (ii) motor vehicle washing, waxing, and cleaning services, including services &#10;26.10   provided by coin operated facilities operated by the customer, and rustproofing, &#10;26.11   undercoating, and towing of motor vehicles;&#10;26.12   (iii) building and residential cleaning, maintenance, and disinfecting and &#10;26.13   exterminating services;&#10;26.14   (iv) detective, security, burglar, fire alarm, and armored car services; but not &#10;26.15   including services performed within the jurisdiction they serve by off-duty licensed peace &#10;26.16   officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit &#10;26.17   organization for monitoring and electronic surveillance of persons placed on in-home &#10;26.18   detention pursuant to court order or under the direction of the Minnesota Department &#10;26.19   of Corrections;&#10;26.20   (v) pet grooming services;&#10;26.21   (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting &#10;26.22   and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor &#10;26.23   plant care; tree, bush, shrub, and stump removal, except when performed as part of a land &#10;26.24   clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for &#10;26.25   public utility lines. Services performed under a construction contract for the installation of &#10;26.26   shrubbery, plants, sod, trees, bushes, and similar items are not taxable;&#10;26.27   (vii) massages, except when provided by a licensed health care facility or &#10;26.28   professional or upon written referral from a licensed health care facility or professional for &#10;26.29   treatment of illness, injury, or disease; and&#10;26.30   (viii) the furnishing of lodging, board, and care services for animals in kennels and &#10;26.31   other similar arrangements, but excluding veterinary and horse boarding services.&#10;26.32   In applying the provisions of this chapter, the terms "tangible personal property" &#10;26.33   and "sales at retail" include taxable services listed in clause (6), items (i) to (vi) and &#10;26.34   (viii), and the provision of these taxable services, unless specifically provided otherwise. &#10;26.35   Services performed by an employee for an employer are not taxable. Services performed &#10;26.36   by a partnership or association for another partnership or association are not taxable if &#10;27.1    one of the entities owns or controls more than 80 percent of the voting power of the &#10;27.2    equity interest in the other entity. Services performed between members of an affiliated &#10;27.3    group of corporations are not taxable. For purposes of the preceding sentence, "affiliated &#10;27.4    group of corporations" includes those entities that would be classified as members of an &#10;27.5    affiliated group under United States Code, title 26, section 1504, and that are eligible to &#10;27.6    file a consolidated tax return for federal income tax purposes.&#10;27.7    (h) A sale and a purchase includes the furnishing for a consideration of tangible &#10;27.8    personal property or taxable services by the United States or any of its agencies or &#10;27.9    instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political &#10;27.10   subdivisions.&#10;27.11   (i) A sale and a purchase includes the furnishing for a consideration of &#10;27.12   telecommunications services, including cable television services and direct satellite &#10;27.13   services. Telecommunications services are taxed to the extent allowed under federal law.&#10;27.14   (j) A sale and a purchase includes the furnishing for a consideration of installation if &#10;27.15   the installation charges would be subject to the sales tax if the installation were provided &#10;27.16   by the seller of the item being installed.&#10;27.17   (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer &#10;27.18   to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) &#10;27.19   the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section &#10;27.20   65B.29, subdivision 1, clause (1).&#10;27.21   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for purchases and sales made after </ins>&#10;27.22   <ins>June 30, 2006.</ins>&#10;&#10;<a id="go.3.3.0"></a>27.23       Sec. 3. Minnesota Statutes 2005 Supplement, section 297A.64, subdivision 4, is &#10;27.24   amended to read:&#10;27.25       Subd. 4. <b>Exemptions.</b> (a) The tax and the fee imposed by this section do not apply &#10;27.26   to a lease or rental of (1) a vehicle to be used by the lessee to provide a licensed taxi &#10;27.27   service; (2) a hearse or limousine used in connection with a burial or funeral service; <del>or</del> &#10;27.28   (3) a van designed or adapted primarily for transporting property rather than passengers<ins>; </ins>&#10;27.29   <ins>or (4) a vehicle under a car sharing agreement where the lessee is a dues-paying member </ins>&#10;27.30   <ins>of a nonprofit car sharing organization that leases vehicles only on an hourly or mileage </ins>&#10;27.31   <ins>basis</ins>. The tax and the fee imposed under this section do not apply when the lease or rental &#10;27.32   of a vehicle is exempt from the tax imposed under section 297A.62, subdivision 1.&#10;27.33   (b) The lessor may elect not to charge the fee imposed in subdivision 2 if in the &#10;27.34   previous calendar year the lessor had no more than 20 vehicles available for lease that &#10;28.1    would have been subject to tax under this section, or no more than $50,000 in gross &#10;28.2    receipts that would have been subject to tax under this section.&#10;28.3    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for leases made after June 30, 2006.</ins>&#10;&#10;<a id="go.3.4.0"></a>28.4        Sec. 4. Minnesota Statutes 2004, section 297A.67, subdivision 18, is amended to read:&#10;28.5        Subd. 18. <b>Used </b><ins><b>and re-refined </b></ins><b>motor oils.</b> Used motor oils are exempt.<ins> Re-refined </ins>&#10;28.6    <ins>motor oils that meet American Petroleum Institute specifications for gasoline or diesel </ins>&#10;28.7    <ins>engines are exempt.</ins>&#10;28.8    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for sales and purchases made after </ins>&#10;28.9    <ins>June 30, 2006.</ins>&#10;&#10;<a id="go.3.5.0"></a>28.10       Sec. 5. Minnesota Statutes 2004, section 297A.67, is amended by adding a subdivision &#10;28.11   to read:&#10;28.12       <ins>Subd. 33.</ins> <ins><b>Recycled copier and printing papers.</b></ins> <ins>Copier paper with a minimum </ins>&#10;28.13   <ins>postconsumer recycled content of 30 percent by weight is exempt. Uncoated printing </ins>&#10;28.14   <ins>paper with a minimum of 30 percent postconsumer recycled content by weight is exempt. </ins>&#10;28.15   <ins>Coated printing paper with a minimum of ten percent of postconsumer recycled content by </ins>&#10;28.16   <ins>weight is exempt.</ins>&#10;28.17   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for sales and purchases made after </ins>&#10;28.18   <ins>June 30, 2006.</ins>&#10;&#10;<a id="go.3.6.0"></a>28.19       Sec. 6. Minnesota Statutes 2004, section 297A.68, subdivision 19, is amended to read:&#10;28.20       Subd. 19. <b>Petroleum products.</b> The following petroleum products are exempt:&#10;28.21   (1) products upon which a tax has been imposed and paid under chapter 296A, &#10;28.22   and for which no refund has been or will be allowed because the buyer used the fuel &#10;28.23   for nonhighway use;&#10;28.24   (2) products that are used in the improvement of agricultural land by constructing, &#10;28.25   maintaining, and repairing drainage ditches, tile drainage systems, grass waterways, water &#10;28.26   impoundment, and other erosion control structures;&#10;28.27   (3) products purchased by a transit system receiving financial assistance under &#10;28.28   section  174.24,  256B.0625, subdivision 17, or  473.384; &#10;28.29   (4) products purchased by an ambulance service licensed under chapter 144E;&#10;28.30   (5) products used in a passenger snowmobile, as defined in section  296A.01, &#10;28.31   subdivision 39, for off-highway business use as part of the operations of a resort as &#10;28.32   provided under section  296A.16, subdivision 2, clause (2); <del>or</del> &#10;29.1    (6) products purchased by a state or a political subdivision of a state for use in motor &#10;29.2    vehicles exempt from registration under section  168.012, subdivision 1, paragraph (b)<ins>; or</ins>&#10;29.3    <ins>(7) products purchased for use as fuel for a commuter rail system operating under </ins>&#10;29.4    <ins>sections 174.80 to 174.90. The tax must be imposed and collected as if the rate under </ins>&#10;29.5    <ins>section 297A.62, subdivision 1, applied, and then refunded in the manner provided </ins>&#10;29.6    <ins>in section 297A.75</ins>. &#10;29.7    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for purchases made after June 30, </ins>&#10;29.8    <ins>2006.</ins>&#10;&#10;<a id="go.3.7.0"></a>29.9        Sec. 7. Minnesota Statutes 2004, section 297A.68, is amended by adding a subdivision &#10;29.10   to read:&#10;29.11       <ins>Subd. 42.</ins> <ins><b>Commuter rail materials, supplies, and equipment.</b></ins> <ins>(a) Materials, </ins>&#10;29.12   <ins>supplies, and equipment used or consumed in the construction, equipment, or improvement </ins>&#10;29.13   <ins>of a commuter rail transportation system operated under sections 174.80 to 174.90 are </ins>&#10;29.14   <ins>exempt. This exemption includes railroad cars, engines, and related equipment. The tax </ins>&#10;29.15   <ins>must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied, </ins>&#10;29.16   <ins>and then refunded in the manner provided in section 297A.75.</ins>&#10;29.17   <ins>(b) $7,500,000 is appropriated from the general fund to the commissioner of revenue </ins>&#10;29.18   <ins>to be used to pay refunds of the tax paid for items that are exempt from taxation under this </ins>&#10;29.19   <ins>subdivision. This appropriation does not cancel, but remains available until expended. </ins>&#10;29.20   <ins>This exemption terminates when the commissioner of revenue determines that no amount </ins>&#10;29.21   <ins>of this appropriation remains.</ins>&#10;29.22   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for purchases made after June 30, </ins>&#10;29.23   <ins>2006.</ins>&#10;&#10;<a id="go.3.8.0"></a>29.24       Sec. 8. Minnesota Statutes 2004, section 297A.70, subdivision 3, is amended to read:&#10;29.25       Subd. 3. <b>Sales of certain goods and services to government.</b> (a) The following &#10;29.26   sales to or use by the specified governments and political subdivisions of the state are &#10;29.27   exempt:&#10;29.28   (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and &#10;29.29   fire apparatus to a political subdivision;&#10;29.30   (2) machinery and equipment, except for motor vehicles, used directly for mixed &#10;29.31   municipal solid waste management services at a solid waste disposal facility as defined in &#10;29.32   section  115A.03, subdivision 10; &#10;30.1    (3) chore and homemaking services to a political subdivision of the state to be &#10;30.2    provided to elderly or disabled individuals;&#10;30.3    (4) telephone services to the Department of Administration that are used to provide &#10;30.4    telecommunications services through the intertechnologies revolving fund;&#10;30.5    (5) firefighter personal protective equipment as defined in paragraph (b), if purchased &#10;30.6    or authorized by and for the use of an organized fire department, fire protection district, or &#10;30.7    fire company regularly charged with the responsibility of providing fire protection to the &#10;30.8    state or a political subdivision;&#10;30.9    (6) bullet-resistant body armor that provides the wearer with ballistic and trauma &#10;30.10   protection, if purchased by a law enforcement agency of the state or a political subdivision &#10;30.11   of the state, or a licensed peace officer, as defined in section  626.84, subdivision 1; &#10;30.12   (7) motor vehicles purchased or leased by political subdivisions of the state if the &#10;30.13   vehicles are exempt from registration under section  168.012, subdivision 1, paragraph (b), &#10;30.14   exempt from taxation under section  473.448, or exempt from the motor vehicle sales tax &#10;30.15   under section  297B.03, clause (12); &#10;30.16   (8) equipment designed to process, dewater, and recycle biosolids for wastewater &#10;30.17   treatment facilities of political subdivisions, and materials incidental to installation of &#10;30.18   that equipment; <del>and</del>&#10;30.19   (9) sales to a town of gravel and of machinery, equipment, and accessories, except &#10;30.20   motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of &#10;30.21   motor vehicles exempt from tax under section  297B.03, clause (10)<ins>; and </ins>&#10;30.22   <ins>(10) voting equipment purchased between January 1, 2006, and January 1, 2008, </ins>&#10;30.23   <ins>by a county to comply with United States Code, title 42, section 15481, ("Help America </ins>&#10;30.24   <ins>Vote Act of 2002")</ins>. &#10;30.25   (b) For purposes of this subdivision, "firefighters personal protective equipment" &#10;30.26   means helmets, including face shields, chin straps, and neck liners; bunker coats and &#10;30.27   pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; &#10;30.28   protective coveralls; goggles; self-contained breathing apparatus; canister filter masks; &#10;30.29   personal alert safety systems; spanner belts; optical or thermal imaging search devices; &#10;30.30   and all safety equipment required by the Occupational Safety and Health Administration.&#10;30.31   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective retroactively from January 1, 2006. </ins>&#10;&#10;<a id="go.3.9.0"></a>30.32       Sec. 9. Minnesota Statutes 2005 Supplement, section 297A.70, subdivision 8, is &#10;30.33   amended to read:&#10;30.34       Subd. 8. <b>Regionwide public safety radio communication system; products and </b>&#10;30.35   <b>services.</b> Products and services including, but not limited to, end user equipment used &#10;31.1    for construction, ownership, operation, maintenance, and enhancement of the backbone &#10;31.2    system of the regionwide public safety radio communication system established under &#10;31.3    sections 403.21 to <del>403.34</del><ins> 403.40</ins>, are exempt. For purposes of this subdivision, backbone &#10;31.4    system is defined in section 403.21, subdivision 9. This subdivision is effective for &#10;31.5    purchases, sales, storage, use, or consumption for use in the first and second phases of the &#10;31.6    system, as defined in section 403.21, subdivisions 3, 10, and 11, <del>and</del> that portion of the &#10;31.7    third phase of the system that is located in the southeast district of the State Patrol and &#10;31.8    the counties of Benton, Sherburne, Stearns, and Wright<ins>, and that portion of the system </ins>&#10;31.9    <ins>that is located in Itasca County</ins>.&#10;&#10;<a id="go.3.10.0"></a>31.10       Sec. 10. Minnesota Statutes 2004, section 297A.71, subdivision 23, is amended to read:&#10;31.11       Subd. 23. <b>Construction materials for qualified low-income housing projects.</b> (a) &#10;31.12   Purchases of materials and supplies used or consumed in and equipment incorporated into &#10;31.13   the construction, improvement, or expansion of qualified low-income housing projects are &#10;31.14   exempt from the tax imposed under this chapter if the owner of the qualified low-income &#10;31.15   housing project is:&#10;31.16   (1) the public housing agency or housing and redevelopment authority of a political &#10;31.17   subdivision;&#10;31.18   (2) an entity exercising the powers of a housing and redevelopment authority within &#10;31.19   a political subdivision;&#10;31.20   (3) a limited partnership in which the sole general partner is an authority under &#10;31.21   clause (1) or an entity under clause (2);&#10;31.22   (4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying &#10;31.23   under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; <del>or</del>&#10;31.24   (5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604, &#10;31.25   for a qualified low-income housing project described in paragraph (b), clause (5)<del>.</del><ins>; or</ins>&#10;31.26   <ins>(6) a limited partnership in which either:</ins>&#10;31.27   <ins>(i) the sole general partner is an entity under clause (4); or</ins>&#10;31.28   <ins>(ii) the managing partner is an entity under clause (4) and makes the following </ins>&#10;31.29   <ins>disclosures in writing to an entity under clause (1) or (2):</ins>&#10;31.30   <ins>(A) the names of all members of the partnership;</ins>&#10;31.31   <ins>(B) the address for service of process of each member of the partnership; and</ins>&#10;31.32   <ins>(C) the financing plan for the low-income housing project.</ins>&#10;31.33   This exemption applies regardless of whether the purchases are made by the owner &#10;31.34   of the facility or a contractor.&#10;31.35   (b) For purposes of this exemption, "qualified low-income housing project" means:&#10;32.1    (1) a housing or mixed use project in which at least 20 percent of the residential units &#10;32.2    are qualifying low-income rental housing units as defined in section  273.126; &#10;32.3    (2) a federally assisted low-income housing project financed by a mortgage insured &#10;32.4    or held by the United States Department of Housing and Urban Development under &#10;32.5    United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United &#10;32.6    States Code, title 42, section 1437f; the Native American Housing Assistance and &#10;32.7    Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar &#10;32.8    successor federal low-income housing program;&#10;32.9    (3) a qualified low-income housing project as defined in United States Code, title &#10;32.10   26, section 42(g), meeting all of the requirements for a low-income housing credit under &#10;32.11   section 42 of the Internal Revenue Code regardless of whether the project actually applies &#10;32.12   for or receives a low-income housing credit;&#10;32.13   (4) a project that will be operated in compliance with Internal Revenue Service &#10;32.14   revenue procedure 96-32; or&#10;32.15   (5) a housing or mixed use project in which all or a portion of the residential units &#10;32.16   are subject to the requirements of section 5 of the United States Housing Act of 1937.&#10;32.17   (c) For a project, a portion of which is not used for low-income housing units, &#10;32.18   the amount of purchases that are exempt under this subdivision must be determined by &#10;32.19   multiplying the total purchases, as specified in paragraph (a), by the ratio of:&#10;32.20   (1) the total gross square footage of units subject to the income limits under section  &#10;32.21   273.126, the financing for the project, the federal low-income housing tax credit, revenue &#10;32.22   procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable &#10;32.23   to the project; and &#10;32.24   (2) the total gross square footage of all units in the project.&#10;32.25   (d) The tax must be imposed and collected as if the rate under section  297A.62, &#10;32.26   subdivision 1, applied, and then refunded in the manner provided in section  297A.75. &#10;32.27   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for sales and purchases made after </ins>&#10;32.28   <ins>June 30, 2006.</ins>&#10;&#10;<a id="go.3.11.0"></a>32.29       Sec. 11. Minnesota Statutes 2004, section 297A.71, is amended by adding a &#10;32.30   subdivision to read:&#10;32.31       <ins>Subd. 37.</ins> <ins><b>Hydroelectric generating facility.</b></ins> <ins>Materials and supplies used or </ins>&#10;32.32   <ins>consumed in the construction of a 10.3 megawatt run-of-the-river hydroelectric generating </ins>&#10;32.33   <ins>facility that meets the requirements of this subdivision are exempt. To qualify for the </ins>&#10;32.34   <ins>exemption under this subdivision, a hydroelectric generating facility must:</ins>&#10;33.1    <ins>(1) utilize between 12 and 16 turbine generators at a dam site existing on March </ins>&#10;33.2    <ins>31, 1994;</ins>&#10;33.3    <ins>(2) be located on land within 3,000 feet of a 13.8 kilovolt distribution circuit; and</ins>&#10;33.4    <ins>(3) be eligible to receive a renewable energy production incentive payment under </ins>&#10;33.5    <ins>section 216C.41.</ins>&#10;33.6    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for sales and purchases made after </ins>&#10;33.7    <ins>April 30, 2006, and on or before December 31, 2009.</ins>&#10;&#10;<a id="go.3.12.0"></a>33.8        Sec. 12. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 1, is &#10;33.9    amended to read:&#10;33.10       Subdivision 1. <b>Tax collected.</b> The tax on the gross receipts from the sale of the &#10;33.11   following exempt items must be imposed and collected as if the sale were taxable and the &#10;33.12   rate under section 297A.62, subdivision 1, applied. The exempt items include:&#10;33.13   (1) capital equipment exempt under section 297A.68, subdivision 5;&#10;33.14   (2) building materials for an agricultural processing facility exempt under section &#10;33.15   297A.71, subdivision 13;&#10;33.16   (3) building materials for mineral production facilities exempt under section &#10;33.17   297A.71, subdivision 14;&#10;33.18   (4) building materials for correctional facilities under section 297A.71, subdivision &#10;33.19   3;&#10;33.20   (5) building materials used in a residence for disabled veterans exempt under section &#10;33.21   297A.71, subdivision 11;&#10;33.22   (6) elevators and building materials exempt under section 297A.71, subdivision 12;&#10;33.23   (7) building materials for the Long Lake Conservation Center exempt under section &#10;33.24   297A.71, subdivision 17;&#10;33.25   (8) materials, supplies, fixtures, furnishings, and equipment for a county law &#10;33.26   enforcement and family service center under section 297A.71, subdivision 26;&#10;33.27   (9) materials and supplies for qualified low-income housing under section 297A.71, &#10;33.28   subdivision 23; <del>and</del>&#10;33.29   (10) materials, supplies, and equipment for municipal electric utility facilities under &#10;33.30   section 297A.71, subdivision 35<ins>; </ins>&#10;33.31   <ins>(11) products purchased for use as fuel for a commuter rail system exempt under </ins>&#10;33.32   <ins>section 297A.68, subdivision 19, clause (7); and</ins>&#10;33.33   <ins>(12) commuter rail construction materials, supplies, and equipment exempt under </ins>&#10;33.34   <ins>section 297A.68, subdivision 42</ins>.&#10;&#10;<a id="go.3.13.0"></a>34.1        Sec. 13. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 2, is &#10;34.2    amended to read:&#10;34.3        Subd. 2. <b>Refund; eligible persons.</b> Upon application on forms prescribed by the &#10;34.4    commissioner, a refund equal to the tax paid on the gross receipts of the exempt items &#10;34.5    must be paid to the applicant. Only the following persons may apply for the refund:&#10;34.6    (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;&#10;34.7    (2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental &#10;34.8    subdivision;&#10;34.9    (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits &#10;34.10   provided in United States Code, title 38, chapter 21;&#10;34.11   (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead &#10;34.12   property;&#10;34.13   (5) for subdivision 1, clause (9), the owner of the qualified low-income housing &#10;34.14   project; <del>and</del>&#10;34.15   (6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or &#10;34.16   a joint venture of municipal electric utilities<ins>; and</ins>&#10;34.17   <ins>(7) for subdivision 1, clauses (11) and (12), the applicant must be the purchaser of </ins>&#10;34.18   <ins>the fuel or construction materials, as applicable</ins>.&#10;&#10;<a id="go.3.14.0"></a>34.19       Sec. 14. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991, &#10;34.20   chapter 291, article 8, section 22; Laws 1998, chapter 389, article 8, section 25; and Laws &#10;34.21   2003, First Special Session chapter 21, article 8, section 11, is amended to read:&#10;34.22   Subd. 2.  Notwithstanding Minnesota Statutes, Section  477A.016, or any other law, &#10;34.23   ordinance, or city charter provision  to the contrary, the city of Duluth may, by ordinance, &#10;34.24   impose an  additional sales tax of up to <del>one and one-half </del><ins>two and one-quarter </ins>percent on &#10;34.25   sales  transactions which are described in Minnesota Statutes 2000,  Section 297A.01, &#10;34.26   Subdivision 3, Clause (c).  When the city  council determines that the taxes imposed &#10;34.27   under this subdivision  and under <ins>Laws 1998, chapter 389, article 8, </ins>section 26<ins>,</ins> at a rate &#10;34.28   of one-half of one percent have  produced revenue sufficient to pay (1) the debt service &#10;34.29   on bonds  in a principal amount of $8,000,000 issued for capital  improvements to the &#10;34.30   Duluth Entertainment and Convention Center,  and (2) debt service on outstanding bonds &#10;34.31   originally issued in  the principal amount of $4,970,000 to finance capital  improvements to &#10;34.32   the Great Lakes Aquarium since the imposition of  the taxes at the rate of one and one-half &#10;34.33   percent, the rate of  the tax under this subdivision is reduced <del>to </del><ins>by one-half of </ins>one percent.  &#10;34.34   <ins>When the city council determines that the taxes imposed under this subdivision at a rate </ins>&#10;34.35   <ins>of three-quarters of one percent have produced revenue sufficient to pay debt service on </ins>&#10;35.1    <ins>bonds in the principal amount of $33,700,000, plus issuance and discount costs, issued </ins>&#10;35.2    <ins>for capital improvements for a new arena at the Duluth Entertainment and Convention </ins>&#10;35.3    <ins>Center, the rate of tax under this subdivision shall be reduced by three-quarters of one </ins>&#10;35.4    <ins>percent. </ins>The  imposition of this tax shall not be subject to voter referendum  under either &#10;35.5    state law or city charter provisions.  &#10;35.6    EFFECTIVE DATE. <ins>This section is effective the day after  the governing body of </ins>&#10;35.7    <ins>the city of Duluth and its chief clerical  officer comply with Minnesota Statutes, section </ins>&#10;35.8    <ins>645.021,  subdivisions 2 and 3. </ins> &#10;&#10;<a id="go.3.15.0"></a>35.9        Sec. 15. Laws 1996, chapter 471, article 2, section 29, is amended to read:&#10;35.10   Sec. 29.  CITY OF HERMANTOWN; SALES <ins>AND USE </ins>TAX.  &#10;35.11        Subdivision 1. <b>Sales </b><ins><b>and use </b></ins><b>tax authorized.</b> <ins>(a) </ins> Notwithstanding Minnesota &#10;35.12   Statutes, section 477A.016, or any other contrary provision of law, ordinance, or city &#10;35.13   charter, the city of Hermantown may, by ordinance, impose an additional sales<ins> and use </ins>tax &#10;35.14   of up to one percent on sales <del>transactions</del><ins>, storage, and use </ins>taxable pursuant to Minnesota &#10;35.15   Statutes, chapter 297A, that occur within the city.&#10;35.16   <ins>(b) </ins>The proceeds of the <ins>first one-half of the one percent </ins> tax imposed under this &#10;35.17   section must be used <del>to meet the costs of </del><ins> by the city for the following projects</ins>:&#10;35.18    (1) extending a sewer interceptor line;&#10;35.19    (2) construction of a booster pump station, reservoirs, and related improvements &#10;35.20   to the water system; and&#10;35.21    (3) construction of a <ins>building containing a </ins> police and fire station<ins> and an </ins>&#10;35.22   <ins>administrative services facility</ins>.&#10;35.23   <ins>(c) Revenues received from the remaining one-half of the one percent tax </ins>&#10;35.24   <ins>authorized under this section must be used by the city to pay all or part of the capital and </ins>&#10;35.25   <ins>administrative costs of developing, acquiring, constructing, and initially furnishing and </ins>&#10;35.26   <ins>equipping the following projects:</ins>&#10;35.27   <ins>(1) construction of a new facility or purchase of an existing facility to be used as </ins>&#10;35.28   <ins>a public works facility;</ins>&#10;35.29   <ins>(2) construction, signalization, and rehabilitation of primary collector roads and </ins>&#10;35.30   <ins>commercial frontage roads, within the city; and </ins>&#10;35.31   <ins>(3) extension of a regional trunk sewer.</ins>&#10;35.32   <ins>(d) Authorized expenses include, but are not limited to, acquiring property; paying </ins>&#10;35.33   <ins>construction, administrative, and operating expenses related to the development of the </ins>&#10;35.34   <ins>projects listed in paragraph (c); paying debt service on bonds or other obligations, </ins>&#10;35.35   <ins>including lease obligations, issued to finance construction, expansion, or improvement of </ins>&#10;36.1    <ins>the projects listed in paragraph (c); and other compatible uses, including but not limited to, </ins>&#10;36.2    <ins>parking, lighting, and landscaping.</ins>&#10;36.3         Subd. 2. <b>Referendum.</b> <ins>(a) </ins>If the Hermantown city council proposes to impose the &#10;36.4    sales tax authorized by this section, it shall conduct a referendum on the issue.&#10;36.5    <ins>(b) If the Hermantown city council initially imposes the tax at a rate that is less than </ins>&#10;36.6    <ins>one percent and proposes increasing the tax rate at a later date up to the full one percent, it </ins>&#10;36.7    <ins>shall conduct a referendum on the increase of the tax rate.</ins>&#10;36.8    <ins>(c) </ins>The question of imposing <ins>or increasing </ins>the tax must be submitted to the voters at &#10;36.9    a special or general election.  The tax may not be imposed unless a majority of votes cast &#10;36.10   on the question of imposing the tax are in the affirmative.  The commissioner of revenue &#10;36.11   shall prepare a suggested form of question to be presented at the election.  This subdivision &#10;36.12   applies notwithstanding any city charter provision to the contrary.&#10;36.13        Subd. 3. <b>Enforcement; collection; and administration of taxes.</b> A sales tax &#10;36.14   imposed under this section must be reported and paid to the commissioner of revenue &#10;36.15   with the state sales taxes, and be subject to the same penalties, interest, and enforcement &#10;36.16   provisions.  The proceeds of the tax, less refunds and a proportionate share of the cost of &#10;36.17   collection, shall be remitted at least quarterly to the city.  The commissioner shall deduct &#10;36.18   from the proceeds remitted an amount that equals the indirect statewide cost as well as the &#10;36.19   direct and indirect department costs necessary to administer, audit, and collect the tax.  &#10;36.20   The amount deducted shall be deposited in the state general fund.&#10;36.21       <ins>Subd. 3a.</ins> <ins><b>Bonding authority.</b></ins> <ins>(a) The city may issue general obligation bonds </ins>&#10;36.22   <ins>under Minnesota Statutes, chapter 475, to finance the costs in subdivision 1, paragraph (c). </ins>&#10;36.23   <ins>The total amount of bonds issued for the projects under subdivision 1, paragraph (c), may </ins>&#10;36.24   <ins>not exceed $13,000,000 in the aggregate.  An election to approve the bonds is not required.</ins>&#10;36.25   <ins>(b) The bonds are not included in computing any debt limitation applicable to the </ins>&#10;36.26   <ins>city, and the levy of taxes under Minnesota Statutes, section </ins><ins>475.61</ins><ins>, to pay principal of </ins>&#10;36.27   <ins>and interest on the bonds is not subject to any levy limitation.</ins>&#10;36.28   <ins>(c) The taxes authorized under this section may be pledged to and used for the </ins>&#10;36.29   <ins>payment of the bonds and any bonds issued to refund them.</ins>&#10;36.30        Subd. 4. <b>Termination.</b> The <ins>portion of the </ins>tax authorized<del> under this section </del><ins>to </ins>&#10;36.31   <ins>finance the improvements described in subdivision 1, paragraph (b),</ins> terminates <del>at the later </del>&#10;36.32   <del>of (1) ten years after the date of initial imposition of the tax, or (2) on the first day of the </del>&#10;36.33   <del>second month next succeeding a determination by the city council that sufficient funds </del>&#10;36.34   <del>have been received from</del> <del>the tax</del> <del>to finance</del><del> the </del><del>improvements </del><del>described in subdivision 1, </del>&#10;36.35   <del>clauses (1) to (3),</del><del>and to prepay or retire at maturity the principal, interest, and premium </del>&#10;36.36   <del>due on any bonds issued for the improvements</del><ins> on March 31, 2026.</ins> <ins>The portion of the </ins>&#10;37.1    <ins>tax authorized to finance the improvements described in subdivision 1, paragraph (c), </ins>&#10;37.2    <ins>terminates when the revenues raised are sufficient to finance those improvements, up to an </ins>&#10;37.3    <ins>amount equal to $13,000,000 plus any interest, premium, and other costs associated with </ins>&#10;37.4    <ins>the bonds issued under subdivision 3a.  The city council may terminate this portion of the </ins>&#10;37.5    <ins>tax earlier</ins>. Any funds remaining after completion of the improvements and retirement or &#10;37.6    redemption of the bonds may be placed in the general fund of the city.&#10;37.7        <del> Subd. 5.</del> <del><b>Local approval; effective date.</b></del> <del>This section is effective the day after final </del>&#10;37.8    <del>enactment, upon compliance with Minnesota Statutes, section </del><del>645.021, subdivision 3</del><del>, by </del>&#10;37.9    <del>the city of Hermantown.</del>&#10;37.10   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after the governing body of </ins>&#10;37.11   <ins>the city of Hermantown and its chief clerical officer comply with Minnesota Statutes, </ins>&#10;37.12   <ins>section 645.021, subdivisions 2 and 3.</ins> &#10;&#10;<a id="go.3.16.0"></a>37.13       Sec. 16. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to &#10;37.14   read:&#10;37.15        Subdivision 1. <b>Sales and use tax.</b> <ins>(a) </ins>Notwithstanding Minnesota Statutes, section &#10;37.16   <del>297A.48, subdivision 1a,</del> 477A.016, or any other provision of law, ordinance, or city &#10;37.17   charter, if approved by the city voters at the first municipal general election held after the &#10;37.18   date of final enactment of this act or at a special election held November 2, 1999, the city &#10;37.19   of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent &#10;37.20   for the purposes specified in subdivision 3<ins>, paragraph (a)</ins>.  The provisions of Minnesota &#10;37.21   Statutes, section <del>297A.48 </del><ins>297A.99</ins>, govern the imposition, administration, collection, and &#10;37.22   enforcement of the tax authorized under this subdivision.&#10;37.23   <ins>(b) The city of Proctor may impose by ordinance an additional sales and use tax of </ins>&#10;37.24   <ins>up to one-half of one percent if approved by the city voters at a general election or at a </ins>&#10;37.25   <ins>special election held for this purpose.  The revenues received from this additional tax must </ins>&#10;37.26   <ins>be used for the purposes specified in subdivision 3, paragraph (b).</ins>&#10;37.27   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment, </ins>&#10;37.28   <ins>upon compliance by the city of Proctor with Minnesota Statutes, section </ins><ins>645.021, </ins>&#10;37.29   <ins>subdivision 3</ins><ins>.</ins>&#10;&#10;<a id="go.3.17.0"></a>37.30       Sec. 17. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to &#10;37.31   read:&#10;38.1         Subd. 3. <b>Use of revenues.</b> <ins>(a) </ins>Revenues received from taxes authorized by &#10;38.2    subdivisions 1<ins>, paragraph (a),</ins> and 2 must be used by the city to pay the cost of collecting &#10;38.3    the taxes and to pay for construction and improvement of the following city facilities:&#10;38.4     (1) streets; and&#10;38.5     (2) constructing and equipping the Proctor community activity center.&#10;38.6     Authorized expenses include, but are not limited to, acquiring property, paying &#10;38.7    construction and operating expenses related to the development of an authorized facility, &#10;38.8    and paying debt service on bonds or other obligations, including lease obligations, issued &#10;38.9    to finance the construction, expansion, or improvement of an authorized facility.  The &#10;38.10   capital expenses for all projects authorized under this paragraph that may be paid with &#10;38.11   these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance &#10;38.12   of the bonds.&#10;38.13   <ins>(b) Revenues received from taxes authorized by subdivision 1, paragraph (b), </ins>&#10;38.14   <ins>must be used by the city to pay the cost of collecting the taxes and for construction and </ins>&#10;38.15   <ins>improvements of city streets, public utilities, sidewalks, bikeways, and trails.</ins>&#10;38.16   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment, </ins>&#10;38.17   <ins>upon compliance by the city of Proctor with Minnesota Statutes, section </ins><ins>645.021, </ins>&#10;38.18   <ins>subdivision 3</ins><ins>.</ins>&#10;&#10;<a id="go.3.18.0"></a>38.19       Sec. 18. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to &#10;38.20   read:&#10;38.21        Subd. 4. <b>Bonding authority.</b> (a) The city may issue bonds under Minnesota &#10;38.22   Statutes, chapter 475, to finance the capital expenditure and improvement projects &#10;38.23   described in subdivision 3.  An election to approve the bonds under Minnesota Statutes, &#10;38.24   section 475.58, is not required.&#10;38.25    (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, &#10;38.26   sections 275.60 and <del>279.61 </del><ins>275.61</ins>.&#10;38.27    (c) The bonds are not included in computing any debt limitation applicable to the &#10;38.28   city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of &#10;38.29   and interest on the bonds is not subject to any levy limitation.&#10;38.30    (d) <ins>For projects described in subdivision 3, paragraph (a),</ins> the aggregate principal &#10;38.31   amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital &#10;38.32   expenditures and improvements, may not exceed $3,600,000, plus an amount equal to &#10;38.33   the costs related to issuance of the bonds, including interest on the bonds. <ins>For projects </ins>&#10;38.34   <ins>described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may </ins>&#10;39.1    <ins>not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds, </ins>&#10;39.2    <ins>including interest on the bonds.</ins>&#10;39.3     (e) The sales and use and excise taxes authorized in this section may be pledged to &#10;39.4    and used for the payment of the bonds and any bonds issued to refund them only if the &#10;39.5    bonds and any refunding bonds are general obligations of the city.&#10;39.6    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment, </ins>&#10;39.7    <ins>upon compliance by the city of Proctor with Minnesota Statutes, section </ins><ins>645.021, </ins>&#10;39.8    <ins>subdivision 3</ins><ins>.</ins>&#10;&#10;<a id="go.3.19.0"></a>39.9        Sec. 19. Laws 2005, First Special Session chapter 3, article 5, section 43, subdivision &#10;39.10   3, is amended to read:&#10;39.11   Subd. 3.  Use of revenues. Revenues received from the  taxes authorized by &#10;39.12   subdivisions 1 and 2 must be used to pay all  or part of the capital costs of transportation &#10;39.13   contained in the  Minnesota Department of Transportation's Winona Intermodal study  &#10;39.14   dated June 2002 and in the resolution approved by the city  council on January 3, 2005, <ins>and </ins>&#10;39.15   <ins>all or a part of the capital costs of flood control projects approved by resolution of the city </ins>&#10;39.16   <ins>council on February 6, 2006, </ins>including securing or paying debt  service on bonds issued &#10;39.17   under subdivision 4, for the  transportation <ins>and flood control </ins>projects and to pay the cost &#10;39.18   of collecting and  administering the tax.  Authorized costs include, but are not  limited to, &#10;39.19   acquiring property and paying construction and  engineering costs related to the projects.  &#10;39.20   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by </ins>&#10;39.21   <ins>the governing body of the city of Winona with Minnesota Statutes, section 645.021, </ins>&#10;39.22   <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.20.0"></a>39.23       Sec. 20. Laws 2005, First Special Session chapter 3, article 5, section 44, subdivision &#10;39.24   1, is amended to read:&#10;39.25    &#10;39.26   Subdivision 1. Sales and use tax. Notwithstanding  Minnesota Statutes, section &#10;39.27   477A.016, or any other provision of  law, ordinance, or city charter, if approved by the &#10;39.28   voters  pursuant to Minnesota Statutes, section 297A.99, at <del>the next</del><ins> a </ins>  general election<ins> </ins>&#10;39.29   <ins>held before January 1, 2008</ins>, the city of Worthington may impose by  ordinance a sales &#10;39.30   and use tax of up to one-half of one percent  for the purpose specified in subdivision 3.  &#10;39.31   Except as otherwise  provided in this section, the provisions of Minnesota Statutes,  section &#10;39.32   297A.99, govern the imposition, administration,  collection, and enforcement of the tax &#10;39.33   authorized under this  subdivision.  &#10;40.1     &#10;40.2    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.3.21.0"></a>40.3        Sec. 21. <ins><b>CITY OF AUSTIN; TAXES AUTHORIZED.</b></ins>&#10;40.4        <ins>Subdivision 1.</ins> <ins><b>Sales and use tax.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;40.5    <ins>477A.016, or any other provision of law, ordinance, or city charter, if approved by the </ins>&#10;40.6    <ins>voters pursuant to Minnesota Statutes, section 297A.99, at the next general election or </ins>&#10;40.7    <ins>special election held for that purpose before January 1, 2007, the city of Austin may </ins>&#10;40.8    <ins>impose by ordinance a sales and use tax of up to one-half of one percent for the purpose </ins>&#10;40.9    <ins>specified in subdivision 2. Except as otherwise provided in this section, the provisions of </ins>&#10;40.10   <ins>Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, </ins>&#10;40.11   <ins>and enforcement of the tax authorized under this subdivision.</ins>&#10;40.12       <ins>Subd. 2.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from taxes authorized by subdivision </ins>&#10;40.13   <ins>1 must be used by the city of Austin to pay all or part of the capital or administrative costs </ins>&#10;40.14   <ins>of flood mitigation projects in the city of Austin. Authorized expenses include, but are not </ins>&#10;40.15   <ins>limited to, acquiring property and paying construction and engineering expenses related </ins>&#10;40.16   <ins>to the flood mitigation projects.</ins>&#10;40.17       <ins>Subd. 3.</ins> <ins><b>Bonding authority.</b></ins> <ins>Pursuant to the approval of the city voters to impose </ins>&#10;40.18   <ins>the tax authorized in subdivision 1, the city of Austin may issue without an additional </ins>&#10;40.19   <ins>election general obligation bonds of the city in an amount not to exceed $14,000,000 to </ins>&#10;40.20   <ins>finance the costs for the projects specified in subdivision 2. The debt represented by the </ins>&#10;40.21   <ins>bonds must not be included in computing any debt limitations applicable to the city, and </ins>&#10;40.22   <ins>the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or </ins>&#10;40.23   <ins>any interest on the bonds must not be subject to any levy limitation.</ins>&#10;40.24       <ins>Subd. 4.</ins> <ins><b>Termination of tax.</b></ins> <ins>The tax authorized under subdivision 1 terminates at </ins>&#10;40.25   <ins>the earlier of:</ins>&#10;40.26   <ins>(1) 20 years after the date of initial imposition of the tax; or</ins>&#10;40.27   <ins>(2) when the Austin City Council determines that the amount described in </ins>&#10;40.28   <ins>subdivision 2 has been received from the tax to finance the capital and administrative costs </ins>&#10;40.29   <ins>for the projects specified in subdivision 2, and to repay or retire at maturity, the principal, </ins>&#10;40.30   <ins>interest, and premium due on any bonds issued for the projects under subdivision 3. </ins>&#10;40.31   <ins>Any funds remaining after completion of the projects specified in subdivision 2, and </ins>&#10;40.32   <ins>retirement or redemption of the bonds in subdivision 3, may be placed in the general fund </ins>&#10;40.33   <ins>of the city. The tax imposed under subdivision 1 may expire at an earlier time if the </ins>&#10;40.34   <ins>city so determines by ordinance.</ins>&#10;41.1    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by </ins>&#10;41.2    <ins>the governing body of the city of Austin with Minnesota Statutes, section 645.021, </ins>&#10;41.3    <ins>subdivisions 2 and 3.</ins>&#10;&#10;<a id="go.3.22.0"></a>41.4        Sec. 22. <ins><b>CITY OF BAXTER; TAXES AUTHORIZED.</b></ins>&#10;41.5        <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, </ins>&#10;41.6    <ins>section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to </ins>&#10;41.7    <ins>the approval of the voters on November 2, 2004, and pursuant to Minnesota Statutes, </ins>&#10;41.8    <ins>section 297A.99, the city of Baxter may impose by ordinance a sales and use tax of </ins>&#10;41.9    <ins>one-half of one percent for the purposes specified in subdivision 3. The provisions of </ins>&#10;41.10   <ins>Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, </ins>&#10;41.11   <ins>and enforcement of the tax authorized under this subdivision.</ins>&#10;41.12       <ins>Subd. 2.</ins> <ins><b>Excise tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;41.13   <ins>477A.016, or any other contrary provision of law, ordinance, or city charter, the city of </ins>&#10;41.14   <ins>Baxter may impose by ordinance, for the purposes specified in subdivision 3, an excise tax </ins>&#10;41.15   <ins>of up to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any </ins>&#10;41.16   <ins>person engaged within the city of Baxter in the business of selling motor vehicles at retail.</ins>&#10;41.17       <ins>Subd. 3.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from the taxes authorized by </ins>&#10;41.18   <ins>subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax </ins>&#10;41.19   <ins>and to finance all or part of the costs of constructing an upgraded regional wastewater </ins>&#10;41.20   <ins>treatment facility to serve the cities of Brainerd and Baxter, building and equipping a </ins>&#10;41.21   <ins>fire substation, and constructing the Paul Bunyan bridge over Excelsior Road and other </ins>&#10;41.22   <ins>improvements. Authorized costs include, but are not limited to, acquiring property and </ins>&#10;41.23   <ins>paying construction and engineering costs related to the projects.</ins>&#10;41.24       <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>The city of Baxter, pursuant to the approval of the voters at the </ins>&#10;41.25   <ins>November 2, 2004, referendum authorizing the imposition of the taxes in this section, may </ins>&#10;41.26   <ins>issue general obligation bonds of the city, in one or more series, in the aggregate principal </ins>&#10;41.27   <ins>amount not to exceed $15,000,000 to finance the projects listed in subdivision 3. The debt </ins>&#10;41.28   <ins>represented by the bonds is not included in computing any debt limitations applicable to </ins>&#10;41.29   <ins>the city, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the </ins>&#10;41.30   <ins>principal of and interest on the bonds is not subject to any levy limitation or included in </ins>&#10;41.31   <ins>computing or applying any levy limitation applicable to the city of Baxter.</ins>&#10;41.32       <ins>Subd. 5.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The taxes imposed under subdivisions 1 and 2 </ins>&#10;41.33   <ins>expire at the earlier of a date 12 years after the imposition of the tax or when the Baxter </ins>&#10;41.34   <ins>City Council first determines that the amount of revenues raised from the taxes to pay for </ins>&#10;41.35   <ins>the projects equals or exceeds $15,000,000 plus any interest on bonds issued for the </ins>&#10;42.1    <ins>projects under subdivision 3. Any funds remaining after the expiration of the taxes and </ins>&#10;42.2    <ins>retirement of the bonds shall be placed in a capital project fund of the city of Baxter. The </ins>&#10;42.3    <ins>taxes imposed under subdivisions 1 and 2 may expire at an earlier time if the city of </ins>&#10;42.4    <ins>Baxter so determines by ordinance.</ins>&#10;42.5    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by </ins>&#10;42.6    <ins>the governing body of the city of Baxter with Minnesota Statutes, section 645.021, </ins>&#10;42.7    <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.23.0"></a>42.8        Sec. 23. <ins><b>CITY OF BRAINERD; TAXES AUTHORIZED.</b></ins>&#10;42.9        <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, </ins>&#10;42.10   <ins>section 477A.016, or any other provision of law, ordinance, or city charter, contingent </ins>&#10;42.11   <ins>on the approval of the voters on the November 7, 2006, referendum, and pursuant to </ins>&#10;42.12   <ins>Minnesota Statutes, section 297A.99, the city of Brainerd may impose by ordinance a sales </ins>&#10;42.13   <ins>and use tax of one-half of one percent for the purposes specified in subdivision 3. The </ins>&#10;42.14   <ins>provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, </ins>&#10;42.15   <ins>collection, and enforcement of the tax authorized under this section.</ins>&#10;42.16       <ins>Subd. 2.</ins> <ins><b>Excise tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;42.17   <ins>477A.016, or any other provision of law, ordinance, or city charter, the city of Brainerd </ins>&#10;42.18   <ins>may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up </ins>&#10;42.19   <ins>to $20 per motor vehicle, as defined by ordinance, purchased, or acquired from any person </ins>&#10;42.20   <ins>engaged within the city of Brainerd in the business of selling motor vehicles at retail.</ins>&#10;42.21       <ins>Subd. 3.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from the taxes authorized by </ins>&#10;42.22   <ins>subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax </ins>&#10;42.23   <ins>and to finance all or part of the costs of constructing an upgraded regional wastewater </ins>&#10;42.24   <ins>treatment facility to serve the cities of Brainerd and Baxter, water infrastructure </ins>&#10;42.25   <ins>improvements, and trail development, contingent on approval by Brainerd voters at the </ins>&#10;42.26   <ins>November 7, 2006, referendum. Authorized costs include, but are not limited to, acquiring </ins>&#10;42.27   <ins>property and paying construction and engineering costs related to the projects.</ins>&#10;42.28       <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>The city of Brainerd, contingent on approval of the voters at the </ins>&#10;42.29   <ins>November 7, 2006, referendum authorizing the imposition of taxes in this section, may </ins>&#10;42.30   <ins>issue general obligation bonds of the city, in one or more series, in the aggregate principal </ins>&#10;42.31   <ins>amount not to exceed $22,030,000 to finance the projects listed in subdivision 3. The debt </ins>&#10;42.32   <ins>represented by the bonds is not included in computing any debt limitations applicable to </ins>&#10;42.33   <ins>Brainerd, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the </ins>&#10;42.34   <ins>principal and interest on the bonds is not subject to any levy limitation or included in </ins>&#10;42.35   <ins>computing any levy limitation applicable to the city of Brainerd.</ins>&#10;43.1        <ins>Subd. 5.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The taxes imposed under subdivisions 1 and 2 </ins>&#10;43.2    <ins>expire at the earlier of a date 12 years after the imposition of the tax or when the city </ins>&#10;43.3    <ins>council first determines that the amount of revenues raised from the taxes to pay for </ins>&#10;43.4    <ins>projects equals or exceeds $22,030,000 plus any interest on bonds issued for the projects </ins>&#10;43.5    <ins>under subdivision 3. Any funds remaining after the expiration of the taxes and retirement </ins>&#10;43.6    <ins>of the bonds shall be placed in a capital project fund of the city of Brainerd. The taxes </ins>&#10;43.7    <ins>imposed under subdivisions 1 and 2 may expire at an earlier time if the city of Brainerd so </ins>&#10;43.8    <ins>determines by ordinance.</ins>&#10;43.9    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;43.10   <ins>governing body of the city of Brainerd with Minnesota Statutes, section 645.021, </ins>&#10;43.11   <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.24.0"></a>43.12       Sec. 24. <ins><b>CITY OF BREEZY POINT; TAXES AUTHORIZED.</b></ins>&#10;43.13       <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, </ins>&#10;43.14   <ins>section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to </ins>&#10;43.15   <ins>the approval of the voters at the general election on November 7, 2006, and pursuant to </ins>&#10;43.16   <ins>Minnesota Statutes, section 297A.99, the city of Breezy Point may impose by ordinance </ins>&#10;43.17   <ins>a sales and use tax of one-half of one percent for the purposes specified in subdivision </ins>&#10;43.18   <ins>3. The provisions of Minnesota Statutes, section 297A.99, govern the imposition, </ins>&#10;43.19   <ins>administration, collection, and enforcement of the tax authorized under this subdivision.</ins>&#10;43.20       <ins>Subd. 2.</ins> <ins><b>Excise tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;43.21   <ins>477A.016, or any other contrary provision of law, ordinance, or city charter, the city of </ins>&#10;43.22   <ins>Breezy Point may impose by ordinance, for the purposes specified in subdivision 3, an </ins>&#10;43.23   <ins>excise tax of up to $20 per motor vehicle, as defined by ordinance, purchased or acquired </ins>&#10;43.24   <ins>from any person engaged within the city of Breezy Point in the business of selling motor </ins>&#10;43.25   <ins>vehicles at retail.</ins>&#10;43.26       <ins>Subd. 3.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from the taxes authorized by </ins>&#10;43.27   <ins>subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax </ins>&#10;43.28   <ins>and to finance sanitary sewer and storm sewer improvements as approved by the voters </ins>&#10;43.29   <ins>at the referendum authorizing the tax. Authorized costs include, but are not limited to, </ins>&#10;43.30   <ins>acquiring property and paying construction and engineering costs related to the projects.</ins>&#10;43.31       <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>The city of Breezy Point, pursuant to the approval of the voters at </ins>&#10;43.32   <ins>the referendum authorizing the imposition of the taxes in this section, may issue general </ins>&#10;43.33   <ins>obligation bonds of the city, in one or more series, in the aggregate principal amount not to </ins>&#10;43.34   <ins>exceed $11,000,000 to finance the projects listed in subdivision 3. The debt represented </ins>&#10;43.35   <ins>by the bonds is not included in computing any debt limitations applicable to the city, and </ins>&#10;44.1    <ins>the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal of </ins>&#10;44.2    <ins>and interest on the bonds is not subject to any levy limitation or included in computing or </ins>&#10;44.3    <ins>applying any levy limitation applicable to the city.</ins>&#10;44.4        <ins>Subd. 5.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The taxes imposed under subdivisions 1 and 2 </ins>&#10;44.5    <ins>expire 15 years after the imposition of the tax or when the Breezy Point City Council </ins>&#10;44.6    <ins>first determines that the amount of revenues raised from the taxes to pay for the projects </ins>&#10;44.7    <ins>equals or exceeds $11,000,000 plus any interest on bonds issued for the projects under </ins>&#10;44.8    <ins>subdivision 3, whichever is earlier. Any funds remaining after the expiration of the taxes </ins>&#10;44.9    <ins>and retirement of the bonds may be placed in the general fund or in a capital project fund </ins>&#10;44.10   <ins>of the city of Breezy Point. The taxes imposed under subdivisions 1 and 2 may expire </ins>&#10;44.11   <ins>at an earlier time if the city so determines by ordinance.</ins>&#10;44.12   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;44.13   <ins>governing body of the city of Breezy Point with Minnesota Statutes, section 645.021, </ins>&#10;44.14   <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.25.0"></a>44.15       Sec. 25. <ins><b>CITY OF CLOQUET; TAXES AUTHORIZED.</b></ins>&#10;44.16       <ins>Subdivision 1.</ins> <ins><b>Sales and use tax.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;44.17   <ins>477A.016, or any other provision of law, ordinance, or city charter, if approved by the </ins>&#10;44.18   <ins>voters pursuant to Minnesota Statutes, section 297A.99, or at a special election held for </ins>&#10;44.19   <ins>this purpose, the city of Cloquet may impose by ordinance a sales and use tax of up to </ins>&#10;44.20   <ins>one-half of one percent for the purpose specified in subdivision 3.  Except as provided in </ins>&#10;44.21   <ins>this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, </ins>&#10;44.22   <ins>administration, collection, and enforcement of the tax authorized under this subdivision.</ins>&#10;44.23       <ins>Subd. 2.</ins> <ins><b>Excise tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;44.24   <ins>477A.016, or any other provision of law, ordinance, or city charter, the city of Cloquet </ins>&#10;44.25   <ins>may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up </ins>&#10;44.26   <ins>to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person </ins>&#10;44.27   <ins>engaged within the city in the business of selling motor vehicles at retail.</ins>&#10;44.28       <ins>Subd. 3.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from taxes authorized by subdivisions </ins>&#10;44.29   <ins>1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for the </ins>&#10;44.30   <ins>following projects:</ins>&#10;44.31   <ins>(1) construction and completion of park improvement projects, including </ins>&#10;44.32   <ins>reconstruction of the Pinehurst Park swimming pool complex, St. Louis River Riverfront </ins>&#10;44.33   <ins>improvements, Veteran's Park construction, and enhancements to the Hilltop Park soccer </ins>&#10;44.34   <ins>complex and Braun Park baseball complex; and</ins>&#10;45.1    <ins>(2) extension of utilities and the construction of all improvements associated with </ins>&#10;45.2    <ins>the new Cloquet Industrial Park.</ins>&#10;45.3    <ins>Authorized expenses include, but are not limited to, acquiring property and paying </ins>&#10;45.4    <ins>construction expenses related to these improvements, and paying debt service on bonds or </ins>&#10;45.5    <ins>other obligations issued to finance acquisition and construction of these improvements.</ins>&#10;45.6        <ins>Subd. 4.</ins> <ins><b>Bonding authority.</b></ins> <ins>(a) The city may issue bonds under Minnesota </ins>&#10;45.7    <ins>Statutes, chapter 475, to pay capital and administrative expenses for the improvements </ins>&#10;45.8    <ins>described in subdivision 3 in an amount that does not exceed $9,000,000.  An election to </ins>&#10;45.9    <ins>approve the bonds under Minnesota Statutes, section 475.58, is not required.</ins>&#10;45.10   <ins>(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, </ins>&#10;45.11   <ins>sections 275.60 and 275.61.</ins>&#10;45.12   <ins>(c) The debt represented by the bonds is not included in computing any debt </ins>&#10;45.13   <ins>limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section </ins>&#10;45.14   <ins>475.61, to pay principal of and interest on the bonds is not subject to any levy limitation.</ins>&#10;45.15       <ins>Subd. 5.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The taxes imposed under subdivisions 1 and 2 </ins>&#10;45.16   <ins>expire at the earlier of (1) 18 years, or (2) when the city council determines that sufficient </ins>&#10;45.17   <ins>funds have been received from the taxes to finance the capital and administrative costs of </ins>&#10;45.18   <ins>the improvements described in subdivision 3, plus the additional amount needed to pay </ins>&#10;45.19   <ins>the costs related to issuance of bonds under subdivision 4, including interest on the bonds. </ins>&#10;45.20   <ins>Any funds remaining after completion of the project and retirement or redemption of the </ins>&#10;45.21   <ins>bonds may be placed in the general fund of the city.  The taxes imposed under subdivisions </ins>&#10;45.22   <ins>1 and 2 may expire at an earlier time if the city so determines by ordinance.</ins>&#10;45.23   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after the governing body of </ins>&#10;45.24   <ins>the city of Cloquet and its chief clerical officer timely comply with Minnesota Statutes, </ins>&#10;45.25   <ins>section 645.021, subdivisions 2 and 3.</ins> &#10;&#10;<a id="go.3.26.0"></a>45.26       Sec. 26. <ins><b>CITY OF ELY; TAXES AUTHORIZED.</b></ins>&#10;45.27       <ins>Subdivision 1.</ins> <ins><b>Sales and use tax.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;45.28   <ins>477A.016, or any other provision of law, ordinance, or city charter, if approved by the </ins>&#10;45.29   <ins>voters pursuant to Minnesota Statutes, section 297A.99, the city of Ely may impose by </ins>&#10;45.30   <ins>ordinance a sales and use tax of up to one percent for the purposes specified in subdivision </ins>&#10;45.31   <ins>2. Except as otherwise provided in this section, the provisions of Minnesota Statutes, </ins>&#10;45.32   <ins>section 297A.99, govern the imposition, administration, collection, and enforcement of </ins>&#10;45.33   <ins>the tax authorized under this subdivision.</ins>&#10;45.34       <ins>Subd. 2.</ins> <ins><b>Use of revenues.</b></ins> <ins>The proceeds of the tax imposed under this section </ins>&#10;45.35   <ins>shall be used for the following:</ins>&#10;46.1    <ins>(1) land acquisition and site development;</ins>&#10;46.2    <ins>(2) installations of improvements authorized by Minnesota Statutes, chapter 429;</ins>&#10;46.3    <ins>(3) development or redevelopment activities in the central business district of Ely;</ins>&#10;46.4    <ins>(4) business park development;</ins>&#10;46.5    <ins>(5) development of a small business incubator;</ins>&#10;46.6    <ins>(6) development of a technology center; and </ins>&#10;46.7    <ins>(7) improvements to the Ely Community Center and City Hall needed to bring them </ins>&#10;46.8    <ins>into compliance with the Americans with Disabilities Act.</ins>&#10;46.9        <ins>Subd. 3.</ins> <ins><b>Bonding authority.</b></ins> <ins>The city of Ely may issue bonds in an amount not </ins>&#10;46.10   <ins>to exceed $6,000,000 under Minnesota Statutes, chapter 475, to finance the capital </ins>&#10;46.11   <ins>expenditures and improvements authorized by the referendum under subdivision 4. An </ins>&#10;46.12   <ins>election to approve the bonds under Minnesota Statutes, section 475.58, is not required. </ins>&#10;46.13   <ins>The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section </ins>&#10;46.14   <ins>275.60 or 275.61. The debt represented by the bonds must not be included in computing </ins>&#10;46.15   <ins>any debt limitations applicable to the city, and the levy of taxes required by Minnesota </ins>&#10;46.16   <ins>Statutes, section 475.61, to pay the principal or any interest on the bonds and must not </ins>&#10;46.17   <ins>be subject to any levy limitation.</ins>&#10;46.18       <ins>Subd. 4.</ins> <ins><b>Termination of tax.</b></ins> <ins>The tax authorized under subdivision 1 terminates at </ins>&#10;46.19   <ins>the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the Ely </ins>&#10;46.20   <ins>City Council determines that the amount of revenues raised to pay for the projects under </ins>&#10;46.21   <ins>subdivision 2 shall meet or exceed the sum of $6,000,000, plus the amount needed to </ins>&#10;46.22   <ins>finance the capital and administrative costs of the projects specified in subdivision 2, and </ins>&#10;46.23   <ins>to repay or retire at maturity the principal, interest, and premium due on any bonds issued </ins>&#10;46.24   <ins>for the projects under subdivision 3. Any funds remaining after completion of the projects </ins>&#10;46.25   <ins>specified in subdivision 2, and retirement or redemption of the bonds in subdivision 3, </ins>&#10;46.26   <ins>may be placed in the general fund of the city. The tax imposed under subdivision 1 may </ins>&#10;46.27   <ins>expire at an earlier time if the city so determines by ordinance.</ins>&#10;46.28   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;46.29   <ins>governing body of the city of Ely with Minnesota Statutes, section 645.021, subdivisions </ins>&#10;46.30   <ins>2 and 3.</ins>&#10;&#10;<a id="go.3.27.0"></a>46.31       Sec. 27. <ins><b>CITY OF LUVERNE; TAXES AUTHORIZED.</b></ins>&#10;46.32       <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, </ins>&#10;46.33   <ins>section 477A.016, or any other provision of law, ordinance, or city charter, if approved </ins>&#10;46.34   <ins>by the voters pursuant to Minnesota Statutes, section 297A.99, the city of Luverne may </ins>&#10;46.35   <ins>impose by ordinance a sales and use tax of one-half of one percent for the purposes </ins>&#10;47.1    <ins>specified in subdivision 3. The provisions of Minnesota Statutes, section 297A.99, govern </ins>&#10;47.2    <ins>the imposition, administration, collection, and enforcement of the tax authorized under </ins>&#10;47.3    <ins>this subdivision.</ins>&#10;47.4        <ins>Subd. 2.</ins> <ins><b>Excise tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;47.5    <ins>477A.016, or any other contrary provision of law, ordinance, or city charter, the city of </ins>&#10;47.6    <ins>Luverne may impose by ordinance, for the purposes specified in subdivision 3, an excise </ins>&#10;47.7    <ins>tax of up to $20 per motor vehicle, as defined by ordinance, purchased or acquired from </ins>&#10;47.8    <ins>any person engaged within the city in the business of selling motor vehicles at retail.</ins>&#10;47.9        <ins>Subd. 3.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from the taxes authorized by </ins>&#10;47.10   <ins>subdivisions 1 and 2 must be used to pay the cost of collecting and administering the </ins>&#10;47.11   <ins>taxes and to pay all or part of the expenses for capital improvements and renovation of </ins>&#10;47.12   <ins>the Historic Palace Theatre in an amount not to exceed $3,000,000. Authorized expenses </ins>&#10;47.13   <ins>include, but are not limited to, acquiring property and paying construction expenses </ins>&#10;47.14   <ins>related to the project, and paying debt service on bonds or other obligations issued to </ins>&#10;47.15   <ins>finance the acquisition and improvements.</ins>&#10;47.16       <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>If the taxes under subdivisions 1 and 2 are approved by voters </ins>&#10;47.17   <ins>pursuant to Minnesota Statutes, section 297A.99, the city of Luverne may issue, without </ins>&#10;47.18   <ins>an additional election, bonds, in one or more series, in the aggregate principal amount </ins>&#10;47.19   <ins>not to exceed $3,000,000 to pay capital and administrative costs of the projects listed in </ins>&#10;47.20   <ins>subdivision 3. The debt represented by the bonds is not included in computing any debt </ins>&#10;47.21   <ins>limitations applicable to the city, and the levy of taxes required by Minnesota Statutes, </ins>&#10;47.22   <ins>section 475.61, to pay the principal of and interest on the bonds is not subject to any levy </ins>&#10;47.23   <ins>limitation or included in computing or applying any levy limitation applicable to the city.</ins>&#10;47.24       <ins>Subd. 5.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The taxes imposed under subdivisions 1 and 2 </ins>&#10;47.25   <ins>expire at the later of 30 years after the imposition of the tax or when the Luverne city </ins>&#10;47.26   <ins>council determines that sufficient funds have been received from the taxes to prepay </ins>&#10;47.27   <ins>or retire at maturity the principal, interest, and premium due on any bonds issued for </ins>&#10;47.28   <ins>the project under subdivision 4. Any funds remaining after expiration of the taxes and </ins>&#10;47.29   <ins>retirement of the bonds may be placed in a capital project fund of the city. The taxes </ins>&#10;47.30   <ins>imposed under subdivisions 1 and 2 may expire at an earlier time if the city so determines </ins>&#10;47.31   <ins>by ordinance.</ins>&#10;47.32   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;47.33   <ins>governing body of the city of Luverne with Minnesota Statutes, section 645.021, </ins>&#10;47.34   <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.28.0"></a>47.35       Sec. 28. <ins><b>CITY OF MEDFORD; SALES AND USE TAX.</b></ins>&#10;48.1        <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, </ins>&#10;48.2    <ins>section 477A.016, or any other provision of law, ordinance, or city charter, if approved by </ins>&#10;48.3    <ins>the voters pursuant to Minnesota Statutes, section 297A.99, at the next general election, </ins>&#10;48.4    <ins>the city of Medford may impose by ordinance a sales and use tax of one-half of one </ins>&#10;48.5    <ins>percent for the purposes specified in subdivision 2. Except as otherwise provided in this </ins>&#10;48.6    <ins>section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, </ins>&#10;48.7    <ins>administration, collection, and enforcement of the tax authorized under this subdivision.</ins>&#10;48.8        <ins>Subd. 2.</ins> <ins><b>Use of revenues.</b></ins> <ins>The proceeds of the tax imposed under this section must </ins>&#10;48.9    <ins>be used by the city of Medford to pay the costs of collecting and administering the tax and </ins>&#10;48.10   <ins>to pay up to $5,000,000 in costs to improve the city's wastewater system and wastewater </ins>&#10;48.11   <ins>treatment plant. Authorized expenses include, but are not limited to, acquiring property </ins>&#10;48.12   <ins>and paying construction expenses and debt service on bonds or other obligations issued to </ins>&#10;48.13   <ins>finance acquisition and construction of the improvements.</ins>&#10;48.14       <ins>Subd. 3.</ins> <ins><b>Bonding authority.</b></ins> <ins>(a) If the tax authorized under subdivision 1 is </ins>&#10;48.15   <ins>approved by the voters, the city may issue bonds under Minnesota Statutes, chapter 475, </ins>&#10;48.16   <ins>to pay the capital and administrative expenses for the improvement projects authorized </ins>&#10;48.17   <ins>under subdivision 2. The total amount of bonds issued for the projects listed in subdivision </ins>&#10;48.18   <ins>2 may not exceed $5,000,000 in aggregate. An election to approve the bonds under </ins>&#10;48.19   <ins>Minnesota Statutes, section 475.58, is not required.</ins>&#10;48.20   <ins>(b) The debt represented by the bonds is not included in computing any debt </ins>&#10;48.21   <ins>limitation applicable to the city of Medford, and the levy of taxes under Minnesota </ins>&#10;48.22   <ins>Statutes, section 475.61, to pay the principal of and interest on the bonds is not subject to </ins>&#10;48.23   <ins>any levy limitation. </ins>&#10;48.24       <ins>Subd. 4.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The tax imposed under this section expires at the </ins>&#10;48.25   <ins>earlier of (1) 20 years after the date the taxes are first imposed, or (2) when the Medford </ins>&#10;48.26   <ins>City Council determines that the amount of revenues received from the tax equals or </ins>&#10;48.27   <ins>exceeds the sum of $5,000,000, plus an amount equal to the costs related to the issuance of </ins>&#10;48.28   <ins>bonds under subdivision 3, including interest on the bonds. Any funds remaining after </ins>&#10;48.29   <ins>completion of the projects and retirement or redemption of the bonds may be placed in the </ins>&#10;48.30   <ins>general fund of the city. The tax imposed under subdivision 1 may expire at an earlier </ins>&#10;48.31   <ins>time if the city so determines by ordinance.</ins>&#10;48.32   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;48.33   <ins>governing body of the city of Medford with Minnesota Statutes, section 645.021, </ins>&#10;48.34   <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.29.0"></a>48.35       Sec. 29. <ins><b>CITY OF NORTH MANKATO; TAXES AUTHORIZED.</b></ins>&#10;49.1        <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, </ins>&#10;49.2    <ins>section 477A.016, or any other provision of law, ordinance, or city charter, if approved by </ins>&#10;49.3    <ins>the voters pursuant to Minnesota Statutes, section 297A.99, the city of North Mankato </ins>&#10;49.4    <ins>may impose by ordinance a sales and use tax of one-half of one percent for the purposes </ins>&#10;49.5    <ins>specified in subdivision 3. The provisions of Minnesota Statutes, section 297A.99, govern </ins>&#10;49.6    <ins>the imposition, administration, collection, and enforcement of the taxes authorized under </ins>&#10;49.7    <ins>this subdivision.</ins>&#10;49.8        <ins>Subd. 2.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from the tax authorized by </ins>&#10;49.9    <ins>subdivision 1 must be used to pay all or part of the capital costs of the following projects:</ins>&#10;49.10   <ins>(1) the local share of the marked Trunk Highway 14/County State-Aid Highway </ins>&#10;49.11   <ins>41 interchange project, including a connection to the North Port Industrial Park and trail </ins>&#10;49.12   <ins>connections to the scenic byway along the Minnesota River, the Nicollet County Park, </ins>&#10;49.13   <ins>existing trails in the cities of North Mankato, and Mankato and the Sakatah State Trail;</ins>&#10;49.14   <ins>(2) development of regional parks and hiking and biking trails in Caswell Park, </ins>&#10;49.15   <ins>Benson Park, and Spring Lake Park;</ins>&#10;49.16   <ins>(3) riverfront redevelopment projects; and</ins>&#10;49.17   <ins>(4) lake improvement projects.</ins>&#10;49.18   <ins>The total amount of revenues from the tax in subdivision 1 that may be used to fund </ins>&#10;49.19   <ins>these projects is $5,250,000 plus any associated bond costs.</ins>&#10;49.20       <ins>Subd. 3.</ins> <ins><b>Bonds.</b></ins> <ins>(a) The city of North Mankato, if approved by voters pursuant to </ins>&#10;49.21   <ins>Minnesota Statutes, section 297A.99, may issue bonds under Minnesota Statutes, chapter </ins>&#10;49.22   <ins>475, to pay capital and administrative expenses for the projects described in subdivision 2, </ins>&#10;49.23   <ins>in an amount that does not exceed $5,250,000. A separate election to approve the bonds </ins>&#10;49.24   <ins>under Minnesota Statutes, section 475.58, is not required.</ins>&#10;49.25   <ins>(b) The debt represented by the bonds is not included in computing any debt </ins>&#10;49.26   <ins>limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section </ins>&#10;49.27   <ins>475.61, to pay principal and interest on the bonds is not subject to any levy limitation.</ins>&#10;49.28       <ins>Subd. 4.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The tax imposed under subdivision 1 expires at the </ins>&#10;49.29   <ins>later of (1) 15 years, or (2) when the city council determines that the amount of revenues </ins>&#10;49.30   <ins>received from the taxes to pay for the projects under subdivision 2 first equals or exceeds </ins>&#10;49.31   <ins>the amount authorized to be spent for each project plus the additional amount needed to </ins>&#10;49.32   <ins>pay the costs related to issuance of the bonds under subdivision 3, including interest </ins>&#10;49.33   <ins>on the bonds. Any funds remaining after completion of the projects and retirement or </ins>&#10;49.34   <ins>redemption of the bonds shall be placed in a capital facilities and equipment replacement </ins>&#10;49.35   <ins>fund of the city. The tax imposed under section 1 may expire at an earlier time if the </ins>&#10;49.36   <ins>city so determines by ordinance.</ins>&#10;50.1    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;50.2    <ins>governing body of the city of North Mankato with Minnesota Statutes, section 645.021, </ins>&#10;50.3    <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.30.0"></a>50.4        Sec. 30. <ins><b>CITY OF OWATONNA; TAXES AUTHORIZED.</b></ins>&#10;50.5        <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, </ins>&#10;50.6    <ins>section 477A.016, or any other provision of law, ordinance, or city charter, if approved </ins>&#10;50.7    <ins>by the voters pursuant to Minnesota Statutes, section 297A.99, the city of Owatonna </ins>&#10;50.8    <ins>may impose by ordinance a sales and use tax of one-half of one percent for the purposes </ins>&#10;50.9    <ins>specified in subdivision 3. The provisions of Minnesota Statutes, section 297A.99, govern </ins>&#10;50.10   <ins>the imposition, administration, collection, and enforcement of the taxes authorized under </ins>&#10;50.11   <ins>this subdivision.</ins>&#10;50.12       <ins>Subd. 2.</ins> <ins><b>Excise tax authorized.</b></ins> <ins>Notwithstanding Minnesota Statutes, section </ins>&#10;50.13   <ins>477A.016, or any other provision of law, ordinance, or city charter, the city of Owatonna </ins>&#10;50.14   <ins>may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of </ins>&#10;50.15   <ins>$20 per motor vehicle, as defined by ordinance, purchased or acquired from any person </ins>&#10;50.16   <ins>engaged within the city in the business of selling motor vehicles at retail.</ins>&#10;50.17       <ins>Subd. 3.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from the taxes authorized by </ins>&#10;50.18   <ins>subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation </ins>&#10;50.19   <ins>projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota </ins>&#10;50.20   <ins>Department of Transportation, Steele County, and the city of Owatonna; regional parks </ins>&#10;50.21   <ins>and trail developments, West Hills complex, firehall, and library improvement projects; </ins>&#10;50.22   <ins>and a public safety radio system; as described in the city resolution No. 4-06, Exhibit </ins>&#10;50.23   <ins>A, as adopted by the city on January 17, 2006. The amount paid from these revenues </ins>&#10;50.24   <ins>for transportation projects may not exceed $4,450,000 plus associated bond costs. The </ins>&#10;50.25   <ins>amount paid from these revenues for park and trail projects may not exceed $5,400,000 </ins>&#10;50.26   <ins>plus associated bond costs. The amount paid from these revenues for West Hills complex, </ins>&#10;50.27   <ins>fire hall, and library improvement projects may not exceed $2,823,000 plus associated </ins>&#10;50.28   <ins>bond costs. The amount paid from these revenues for a public safety radio system may not </ins>&#10;50.29   <ins>exceed $500,000 plus associated bond costs. </ins>&#10;50.30       <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>(a) The city of Owatonna, if approved by voters pursuant to </ins>&#10;50.31   <ins>Minnesota Statutes, section 297A.99, may issue bonds under Minnesota Statutes, chapter </ins>&#10;50.32   <ins>475, to pay capital and administrative expenses for the projects described in subdivision 3, </ins>&#10;50.33   <ins>in an amount that does not exceed $13,200,000. A separate election to approve the bonds </ins>&#10;50.34   <ins>under Minnesota Statutes, section 475.58, is not required.</ins>&#10;51.1    <ins>(b) The debt represented by the bonds is not included in computing any debt </ins>&#10;51.2    <ins>limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section </ins>&#10;51.3    <ins>475.61, to pay principal and interest on the bonds, is not subject to any levy limitation.</ins>&#10;51.4        <ins>Subd. 5.</ins> <ins><b>Termination of taxes.</b></ins> <ins>The taxes imposed under subdivisions 1 and 2 </ins>&#10;51.5    <ins>expire at the earlier of (1) ten years, or (2) when the city council determines that the </ins>&#10;51.6    <ins>amount of revenues received from the taxes to pay for the projects under subdivision 3 first </ins>&#10;51.7    <ins>equals or exceeds the amount authorized to be spent for each project plus the additional </ins>&#10;51.8    <ins>amount needed to pay the costs related to issuance of the bonds under subdivision 4, </ins>&#10;51.9    <ins>including interest on the bonds. Any funds remaining after completion of the projects </ins>&#10;51.10   <ins>and retirement or redemption of the bonds shall be placed in a capital project fund of </ins>&#10;51.11   <ins>the city. The taxes imposed under sections 1 and 2 may expire at an earlier time if the </ins>&#10;51.12   <ins>city so determines by ordinance.</ins>&#10;51.13   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;51.14   <ins>governing body of the city of Owatonna with Minnesota Statutes, section 645.021, </ins>&#10;51.15   <ins>subdivision 3.</ins>&#10;&#10;<a id="go.3.31.0"></a>51.16       Sec. 31. <ins><b>CITY OF PARK RAPIDS.</b></ins>&#10;51.17       <ins>Subdivision 1.</ins> <ins><b>Sales and use tax authorized.</b></ins> <ins> Notwithstanding Minnesota Statutes, </ins>&#10;51.18   <ins>section </ins><ins>477A.016</ins><ins>, or any other provision of law, ordinance, or city charter, pursuant to </ins>&#10;51.19   <ins>the approval of the city voters at the next general election or at a special election held for </ins>&#10;51.20   <ins>this purpose, the city of Park Rapids may impose by ordinance a sales and use tax of one </ins>&#10;51.21   <ins>percent for the purposes specified in subdivision 2.  The provisions of Minnesota Statutes, </ins>&#10;51.22   <ins>section </ins><ins>297A.99</ins><ins>, govern the imposition, administration, collection, and enforcement of </ins>&#10;51.23   <ins>the tax authorized under this subdivision.</ins>&#10;51.24       <ins>Subd. 2.</ins> <ins><b>Use of revenues.</b></ins> <ins>Revenues received from the tax authorized by </ins>&#10;51.25   <ins>subdivision 1 must be used for the cost of collecting and administering the tax and to </ins>&#10;51.26   <ins>pay all or part of the capital or administrative costs of the development, acquisition, </ins>&#10;51.27   <ins>construction, and improvement of the following projects:</ins>&#10;51.28   <ins>(1) two-thirds of the cost of construction and operation of a community center that </ins>&#10;51.29   <ins>may include a senior citizen center, fitness center, swimming pool, meeting rooms, indoor </ins>&#10;51.30   <ins>track, and racquetball, basketball, and tennis courts, provided that an amount equal to </ins>&#10;51.31   <ins>one-third of the cost of construction is received from private sources;</ins>&#10;51.32   <ins>(2) capital improvement projects including, but not limited to, installation of water, </ins>&#10;51.33   <ins>sewer, storm sewer, street improvements, new city water tower and well, costs related to </ins>&#10;51.34   <ins>improvements to marked trunk highway 34; and </ins>&#10;51.35   <ins>(3) park improvements.</ins>&#10;52.1    <ins>Authorized expenses include, but are not limited to, acquiring property, paying </ins>&#10;52.2    <ins>construction expenses related to the development of these facilities and improvements, </ins>&#10;52.3    <ins>and securing and paying debt service on bonds or other obligations issued to finance </ins>&#10;52.4    <ins>acquisition, construction, improvement, or development.</ins>&#10;52.5        <ins>Subd. 3.</ins> <ins><b>Bonds.</b></ins> <ins>Pursuant to the approval of the city voters to impose the tax </ins>&#10;52.6    <ins>authorized in subdivision 1, the city of Park Rapids may issue without an additional </ins>&#10;52.7    <ins>election general obligation bonds of the city to pay capital and administrative expenses </ins>&#10;52.8    <ins>for the acquisition, construction, improvement, and development of the projects specified </ins>&#10;52.9    <ins>in subdivision 2.  The debt represented by the bonds must not be included in computing </ins>&#10;52.10   <ins>any debt limitations applicable to the city, and the levy of taxes required by Minnesota </ins>&#10;52.11   <ins>Statutes, section </ins><ins>475.61</ins><ins>, to pay the principal or any interest on the bonds must not be </ins>&#10;52.12   <ins>subject to any levy limitations or be included in computing or applying any levy limitation </ins>&#10;52.13   <ins>applicable to the city.</ins>&#10;52.14       <ins>Subd. 4.</ins> <ins><b>Termination of tax.</b></ins> <ins>The tax imposed under subdivision 1 expires July </ins>&#10;52.15   <ins>1, 2025.  Any funds remaining after completion of the projects specified in subdivision </ins>&#10;52.16   <ins>2 and retirement or redemption of the bonds may be placed in the general fund of the </ins>&#10;52.17   <ins>city.  The tax imposed under subdivision 1 may expire at an earlier time if the city so </ins>&#10;52.18   <ins>determines by ordinance.</ins>&#10;52.19   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after compliance by the </ins>&#10;52.20   <ins>governing body of the city of Park Rapids with Minnesota Statutes, section </ins><ins>645.021, </ins>&#10;52.21   <ins>subdivision 3</ins><ins>.</ins>&#10;&#10;<a id="go.3.32.0"></a>52.22       Sec. 32. <ins><b>THIEF RIVER FALLS COMMUNITY CENTER.</b></ins>&#10;52.23   <ins>The city of Thief River Falls may incorporate or authorize the incorporation of a </ins>&#10;52.24   <ins>nonprofit corporation to operate a community or regional center in the city. A nonprofit </ins>&#10;52.25   <ins>corporation incorporated under this section is exempt from payment of sales and use tax </ins>&#10;52.26   <ins>on materials, equipment, and supplies consumed or incorporated into the construction of </ins>&#10;52.27   <ins>the community or regional center. The exemption under this section applies to purchases </ins>&#10;52.28   <ins>by the nonprofit corporation, a contractor, subcontractor, or builder. A contractor, </ins>&#10;52.29   <ins>subcontractor, or builder that does not pay sales tax on purchases for construction of the </ins>&#10;52.30   <ins>community or regional center shall not charge sales or use tax to the nonprofit corporation. </ins>&#10;52.31   <ins>The nonprofit corporation may file a claim for refund for any sales taxes paid on the </ins>&#10;52.32   <ins>construction costs of the community or regional center, and the commissioner of revenue </ins>&#10;52.33   <ins>shall pay the refunded amount directly to the nonprofit corporation.</ins>&#10;53.1    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective retroactively for purchases made </ins>&#10;53.2    <ins>on and after July 1, 2002.</ins>&#10;&#10;<a id="go.4.0.0"></a>53.3                                           <b>ARTICLE 4</b>&#10;53.4                                 <b>FOREIGN OPERATING CORPORATIONS</b>&#10;&#10;<a id="go.4.1.0"></a>53.5        Section 1. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 6b, &#10;53.6    is amended to read:&#10;53.7        Subd. 6b. <b>Foreign operating corporation.</b> The term "foreign operating &#10;53.8    corporation," when applied to a corporation, means a domestic corporation with the &#10;53.9    following characteristics:&#10;53.10   (1) it is part of a unitary business at least one member of which is taxable in this state;&#10;53.11   (2) it is not a foreign sales corporation under section 922 of the Internal Revenue &#10;53.12   Code, as amended through December 31, 1999, for the taxable year;&#10;53.13   (3)<ins> either </ins>(i)<del> the average of the percentages of its property and payrolls, including </del>&#10;53.14   <del>the pro rata share of its unitary partnerships' property and payrolls, assigned to locations </del>&#10;53.15   <del>outside the United States, where the United States includes the District of Columbia and </del>&#10;53.16   <del>excludes the commonwealth of Puerto Rico and possessions of the United States, as </del>&#10;53.17   <del>determined under section </del><del>290.191</del><del> or </del><del>290.20</del><del>, is 80 percent or more; or (ii)</del> it has in effect a &#10;53.18   valid election under section 936 of the Internal Revenue Code; <ins>or (ii) at least 80 percent </ins>&#10;53.19   <ins>of the gross income from all sources of the corporation in the tax year is active foreign </ins>&#10;53.20   <ins>business income; </ins>and&#10;53.21   (4) <del>it has $1,000,000 of payroll and $2,000,000 of property, as determined under </del>&#10;53.22   <del>section </del><del>290.191</del><del> or </del><del>290.20</del><del>, that are located outside the United States. If the domestic </del>&#10;53.23   <del>corporation does not have payroll as determined under section </del><del>290.191</del><del> or </del><del>290.20</del><del>, but it </del>&#10;53.24   <del>or its partnerships have paid $1,000,000 for work, performed directly for the domestic </del>&#10;53.25   <del>corporation or the partnerships, outside the United States, then paragraph (3)(i) shall not </del>&#10;53.26   <del>require payrolls to be included in the average calculation</del><ins> for purposes of this subdivision, </ins>&#10;53.27   <ins>active foreign business income means gross income that is (i) derived from sources </ins>&#10;53.28   <ins>without the United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of the </ins>&#10;53.29   <ins>Internal Revenue Code; and (ii) attributable to the active conduct of a trade or business in </ins>&#10;53.30   <ins>a foreign country</ins>.&#10;53.31   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;53.32   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.4.2.0"></a>54.1        Sec. 2. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19c, is &#10;54.2    amended to read:&#10;54.3        Subd. 19c. <b>Corporations; additions to federal taxable income.</b> For corporations, &#10;54.4    there shall be added to federal taxable income:&#10;54.5    (1) the amount of any deduction taken for federal income tax purposes for income, &#10;54.6    excise, or franchise taxes based on net income or related minimum taxes, including but not &#10;54.7    limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, &#10;54.8    another state, a political subdivision of another state, the District of Columbia, or any &#10;54.9    foreign country or possession of the United States;&#10;54.10   (2) interest not subject to federal tax upon obligations of: the United States, its &#10;54.11   possessions, its agencies, or its instrumentalities; the state of Minnesota or any other &#10;54.12   state, any of its political or governmental subdivisions, any of its municipalities, or any &#10;54.13   of its governmental agencies or instrumentalities; the District of Columbia; or Indian &#10;54.14   tribal governments;&#10;54.15   (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal &#10;54.16   Revenue Code;&#10;54.17   (4) the amount of any net operating loss deduction taken for federal income tax &#10;54.18   purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss &#10;54.19   deduction under section 810 of the Internal Revenue Code;&#10;54.20   (5) the amount of any special deductions taken for federal income tax purposes &#10;54.21   under sections 241 to 247 of the Internal Revenue Code;&#10;54.22   (6) losses from the business of mining, as defined in section 290.05, subdivision 1, &#10;54.23   clause (a), that are not subject to Minnesota income tax;&#10;54.24   (7) the amount of any capital losses deducted for federal income tax purposes under &#10;54.25   sections 1211 and 1212 of the Internal Revenue Code;&#10;54.26   (8) the exempt foreign trade income of a foreign sales corporation under sections &#10;54.27   921(a) and 291 of the Internal Revenue Code;&#10;54.28   (9) the amount of percentage depletion deducted under sections 611 through 614 and &#10;54.29   291 of the Internal Revenue Code;&#10;54.30   (10) for certified pollution control facilities placed in service in a taxable year &#10;54.31   beginning before December 31, 1986, and for which amortization deductions were elected &#10;54.32   under section 169 of the Internal Revenue Code of 1954, as amended through December &#10;54.33   31, 1985, the amount of the amortization deduction allowed in computing federal taxable &#10;54.34   income for those facilities;&#10;54.35   (11) the amount of any deemed dividend from a foreign operating corporation &#10;54.36   determined pursuant to section 290.17, subdivision 4, paragraph (g)<ins>. The deemed dividend </ins>&#10;55.1    <ins>shall be reduced by the amount of the addition to income required by clauses (19), (20), </ins>&#10;55.2    <ins>(21), and (22)</ins>;&#10;55.3    (12) the amount of a partner's pro rata share of net income which does not flow &#10;55.4    through to the partner because the partnership elected to pay the tax on the income under &#10;55.5    section 6242(a)(2) of the Internal Revenue Code;&#10;55.6    (13) the amount of net income excluded under section 114 of the Internal Revenue &#10;55.7    Code;&#10;55.8    (14) any increase in subpart F income, as defined in section 952(a) of the Internal &#10;55.9    Revenue Code, for the taxable year when subpart F income is calculated without regard &#10;55.10   to the provisions of section 614 of Public Law 107-147;&#10;55.11   (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) &#10;55.12   and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer &#10;55.13   has an activity that in the taxable year generates a deduction for depreciation under &#10;55.14   section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year &#10;55.15   that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed &#10;55.16   under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the &#10;55.17   depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the &#10;55.18   amount of the loss from the activity that is not allowed in the taxable year. In succeeding &#10;55.19   taxable years when the losses not allowed in the taxable year are allowed, the depreciation &#10;55.20   under section 168(k)(1)(A) and (k)(4)(A) is allowed;&#10;55.21   (16) 80 percent of the amount by which the deduction allowed by section 179 of the &#10;55.22   Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal &#10;55.23   Revenue Code of 1986, as amended through December 31, 2003;&#10;55.24   (17) to the extent deducted in computing federal taxable income, the amount of the &#10;55.25   deduction allowable under section 199 of the Internal Revenue Code; <del>and</del>&#10;55.26   (18) the exclusion allowed under section 139A of the Internal Revenue Code for &#10;55.27   federal subsidies for prescription drug plans<del>.</del><ins>;</ins>&#10;55.28   <ins>(19) an amount equal to the interest and intangible expenses, losses, and costs paid, </ins>&#10;55.29   <ins>accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit </ins>&#10;55.30   <ins>of a corporation that is a member of the taxpayer's unitary business group that qualifies </ins>&#10;55.31   <ins>as a foreign operating corporation. For purposes of this clause, intangible expenses and </ins>&#10;55.32   <ins>costs include:</ins>&#10;55.33   <ins>(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, </ins>&#10;55.34   <ins>use, maintenance or management, ownership, sale, exchange, or any other disposition of </ins>&#10;55.35   <ins>intangible property;</ins>&#10;56.1    <ins>(ii) losses incurred, directly or indirectly, from factoring transactions or discounting </ins>&#10;56.2    <ins>transactions;</ins>&#10;56.3    <ins>(iii) royalty, patent, technical, and copyright fees;</ins>&#10;56.4    <ins>(iv) licensing fees; and</ins>&#10;56.5    <ins>(v) other similar expenses and costs.</ins>&#10;56.6    <ins>For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent </ins>&#10;56.7    <ins>applications, trade names, trademarks, service marks, copyrights, mask works, trade </ins>&#10;56.8    <ins>secrets, and similar types of intangible assets.</ins>&#10;56.9    <ins>This clause does not apply to any item of interest or intangible expenses or costs paid, </ins>&#10;56.10   <ins>accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect </ins>&#10;56.11   <ins>to such item of income to the extent that the income to the foreign operating corporation </ins>&#10;56.12   <ins>is income from sources without the United States as defined in subtitle A, chapter 1, </ins>&#10;56.13   <ins>subchapter N, part 1, of the Internal Revenue Code;</ins>&#10;56.14   <ins>(20) except as already included in the taxpayer's taxable income pursuant to clause </ins>&#10;56.15   <ins>(19), any interest income and income generated from intangible property received or </ins>&#10;56.16   <ins>accrued by a foreign operating corporation that is a member of the taxpayer's unitary </ins>&#10;56.17   <ins>group. For purposes of this clause, income generated from intangible property includes:</ins>&#10;56.18   <ins>(i) income related to the direct or indirect acquisition, use, maintenance or </ins>&#10;56.19   <ins>management, ownership, sale, exchange, or any other disposition of intangible property;</ins>&#10;56.20   <ins>(ii) income from factoring transactions or discounting transactions;</ins>&#10;56.21   <ins>(iii) royalty, patent, technical, and copyright fees;</ins>&#10;56.22   <ins>(iv) licensing fees; and</ins>&#10;56.23   <ins>(v) other similar income.</ins>&#10;56.24   <ins>For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent </ins>&#10;56.25   <ins>applications, trade names, trademarks, service marks, copyrights, mask works, trade </ins>&#10;56.26   <ins>secrets, and similar types of intangible assets. </ins>&#10;56.27   <ins>This clause does not apply to any item of interest or intangible income received or accrued </ins>&#10;56.28   <ins>by a foreign operating corporation with respect to such item of income to the extent that </ins>&#10;56.29   <ins>the income is income from sources without the United States as defined in subtitle A, </ins>&#10;56.30   <ins>chapter 1, subchapter N, part 1, of the Internal Revenue Code;</ins>&#10;56.31   <ins>(21) the dividends attributable to the income of a foreign operating corporation that </ins>&#10;56.32   <ins>is a member of the taxpayer's unitary group in an amount that is equal to the dividends </ins>&#10;56.33   <ins>paid deduction of a real estate investment trust under section 561(a) of the Internal </ins>&#10;56.34   <ins>Revenue Code for amounts paid or accrued by the real estate investment trust to the </ins>&#10;56.35   <ins>foreign operating corporation; and</ins>&#10;57.1    <ins>(22) the income of a foreign operating corporation that is a member of the taxpayer's </ins>&#10;57.2    <ins>unitary group in an amount that is equal to gains derived from the sale of real or personal </ins>&#10;57.3    <ins>property located in the United States.</ins>&#10;57.4    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;57.5    <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.4.3.0"></a>57.6        Sec. 3. Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19d, is &#10;57.7    amended to read:&#10;57.8        Subd. 19d. <b>Corporations; modifications decreasing federal taxable income.</b> For &#10;57.9    corporations, there shall be subtracted from federal taxable income after the increases &#10;57.10   provided in subdivision 19c:&#10;57.11   (1) the amount of foreign dividend gross-up added to gross income for federal &#10;57.12   income tax purposes under section 78 of the Internal Revenue Code;&#10;57.13   (2) the amount of salary expense not allowed for federal income tax purposes due to &#10;57.14   claiming the federal jobs credit under section 51 of the Internal Revenue Code;&#10;57.15   (3) any dividend (not including any distribution in liquidation) paid within the &#10;57.16   taxable year by a national or state bank to the United States, or to any instrumentality of &#10;57.17   the United States exempt from federal income taxes, on the preferred stock of the bank &#10;57.18   owned by the United States or the instrumentality;&#10;57.19   (4) amounts disallowed for intangible drilling costs due to differences between &#10;57.20   this chapter and the Internal Revenue Code in taxable years beginning before January &#10;57.21   1, 1987, as follows:&#10;57.22   (i) to the extent the disallowed costs are represented by physical property, an amount &#10;57.23   equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, &#10;57.24   subdivision 7, subject to the modifications contained in subdivision 19e; and&#10;57.25   (ii) to the extent the disallowed costs are not represented by physical property, an &#10;57.26   amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section &#10;57.27   290.09, subdivision 8;&#10;57.28   (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the &#10;57.29   Internal Revenue Code, except that:&#10;57.30   (i) for capital losses incurred in taxable years beginning after December 31, 1986, &#10;57.31   capital loss carrybacks shall not be allowed;&#10;57.32   (ii) for capital losses incurred in taxable years beginning after December 31, 1986, &#10;57.33   a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be &#10;57.34   allowed;&#10;58.1    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a &#10;58.2    capital loss carryback to each of the three taxable years preceding the loss year, subject to &#10;58.3    the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and&#10;58.4    (iv) for capital losses incurred in taxable years beginning before January 1, 1987, &#10;58.5    a capital loss carryover to each of the five taxable years succeeding the loss year to the &#10;58.6    extent such loss was not used in a prior taxable year and subject to the provisions of &#10;58.7    Minnesota Statutes 1986, section 290.16, shall be allowed;&#10;58.8    (6) an amount for interest and expenses relating to income not taxable for federal &#10;58.9    income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and &#10;58.10   expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or &#10;58.11   291 of the Internal Revenue Code in computing federal taxable income;&#10;58.12   (7) in the case of mines, oil and gas wells, other natural deposits, and timber for &#10;58.13   which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a &#10;58.14   reasonable allowance for depletion based on actual cost. In the case of leases the deduction &#10;58.15   must be apportioned between the lessor and lessee in accordance with rules prescribed &#10;58.16   by the commissioner. In the case of property held in trust, the allowable deduction must &#10;58.17   be apportioned between the income beneficiaries and the trustee in accordance with the &#10;58.18   pertinent provisions of the trust, or if there is no provision in the instrument, on the basis &#10;58.19   of the trust's income allocable to each;&#10;58.20   (8) for certified pollution control facilities placed in service in a taxable year &#10;58.21   beginning before December 31, 1986, and for which amortization deductions were elected &#10;58.22   under section 169 of the Internal Revenue Code of 1954, as amended through December &#10;58.23   31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes &#10;58.24   1986, section 290.09, subdivision 7;&#10;58.25   (9) amounts included in federal taxable income that are due to refunds of income, &#10;58.26   excise, or franchise taxes based on net income or related minimum taxes paid by the &#10;58.27   corporation to Minnesota, another state, a political subdivision of another state, the &#10;58.28   District of Columbia, or a foreign country or possession of the United States to the extent &#10;58.29   that the taxes were added to federal taxable income under section 290.01, subdivision 19c, &#10;58.30   clause (1), in a prior taxable year;&#10;58.31   (10) 80 percent of royalties, fees, or other like income accrued or received from a &#10;58.32   foreign operating corporation or a foreign corporation which is part of the same unitary &#10;58.33   business as the receiving corporation<ins>, unless the income resulting from such payments or </ins>&#10;58.34   <ins>accruals is income from sources within the United States as defined in subtitle A, chapter </ins>&#10;58.35   <ins>1, subchapter N, part 1, of the Internal Revenue Code</ins>;&#10;59.1    (11) income or gains from the business of mining as defined in section 290.05, &#10;59.2    subdivision 1, clause (a), that are not subject to Minnesota franchise tax;&#10;59.3    (12) the amount of handicap access expenditures in the taxable year which are not &#10;59.4    allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;&#10;59.5    (13) the amount of qualified research expenses not allowed for federal income tax &#10;59.6    purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that &#10;59.7    the amount exceeds the amount of the credit allowed under section 290.068;&#10;59.8    (14) the amount of salary expenses not allowed for federal income tax purposes due &#10;59.9    to claiming the Indian employment credit under section 45A(a) of the Internal Revenue &#10;59.10   Code;&#10;59.11   (15) the amount of any refund of environmental taxes paid under section 59A of the &#10;59.12   Internal Revenue Code;&#10;59.13   (16) for taxable years beginning before January 1, 2008, the amount of the federal &#10;59.14   small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code &#10;59.15   which is included in gross income under section 87 of the Internal Revenue Code;&#10;59.16   (17) for a corporation whose foreign sales corporation, as defined in section 922 &#10;59.17   of the Internal Revenue Code, constituted a foreign operating corporation during any &#10;59.18   taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, &#10;59.19   claiming the deduction under section 290.21, subdivision 4, for income received from &#10;59.20   the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of &#10;59.21   income excluded under section 114 of the Internal Revenue Code, provided the income is &#10;59.22   not income of a foreign operating company;&#10;59.23   (18) any decrease in subpart F income, as defined in section 952(a) of the Internal &#10;59.24   Revenue Code, for the taxable year when subpart F income is calculated without regard &#10;59.25   to the provisions of section 614 of Public Law 107-147;&#10;59.26   (19) in each of the five tax years immediately following the tax year in which an &#10;59.27   addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of &#10;59.28   the delayed depreciation. For purposes of this clause, "delayed depreciation" means the &#10;59.29   amount of the addition made by the taxpayer under subdivision 19c, clause (15). The &#10;59.30   resulting delayed depreciation cannot be less than zero; and&#10;59.31   (20) in each of the five tax years immediately following the tax year in which an &#10;59.32   addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the &#10;59.33   amount of the addition.&#10;59.34   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;59.35   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.4.4.0"></a>60.1        Sec. 4. Minnesota Statutes 2004, section 290.34, subdivision 1, is amended to read:&#10;60.2        Subdivision 1. <b>Business conducted in such a way as to create losses or improper </b>&#10;60.3    <b>taxable net income.</b> <ins>(a) </ins>When any corporation liable to taxation under this chapter &#10;60.4    conducts its business in such a manner as, directly or indirectly, to benefit its members &#10;60.5    or stockholders or any person or corporation interested in such business or to reduce the &#10;60.6    income attributable to this state by selling the commodities or services in which it deals &#10;60.7    at less than the fair price which might be obtained therefor, or buying such commodities &#10;60.8    or services at more than the fair price for which they might have been obtained, or when &#10;60.9    any corporation, a substantial portion of whose shares is owned directly or indirectly by &#10;60.10   another corporation, deals in the commodities or services of the latter corporation in such &#10;60.11   a manner as to create a loss or improper net income or to reduce the taxable net income &#10;60.12   attributable to this state, the commissioner of revenue may determine the amount of its &#10;60.13   income so as to reflect what would have been its reasonable taxable net income but for the &#10;60.14   arrangements causing the understatement of its taxable net income or the overstatement of &#10;60.15   its losses, having regard to the fair profits which, but for any agreement, arrangement, or &#10;60.16   understanding, might have been or could have been obtained from such business.&#10;60.17   <ins>(b) When any corporation engages in a transaction or series of transactions whose </ins>&#10;60.18   <ins>primary business purpose is the avoidance of tax, or engages in a transaction or series of </ins>&#10;60.19   <ins>transactions without economic substance, that transaction or series of transactions shall be </ins>&#10;60.20   <ins>disregarded and the commissioner shall determine taxable net income without regard for </ins>&#10;60.21   <ins>any such transaction or series of transactions.</ins>&#10;&#10;<a id="go.4.5.0"></a>60.22       Sec. 5. <ins><b>INTENT OF LEGISLATURE.</b></ins>&#10;60.23   <ins>Section 4 does not change Minnesota law, but merely clarifies the legislature's </ins>&#10;60.24   <ins>intention with respect to transactions without economic substance or business purpose.</ins>&#10;&#10;<a id="go.5.0.0"></a>60.25                                          <b>ARTICLE 5</b>&#10;60.26                                        <b>PROPERTY TAXES</b>&#10;&#10;<a id="go.5.1.0"></a>60.27       Section 1. Minnesota Statutes 2004, section 116J.993, subdivision 3, is amended to &#10;60.28   read:&#10;60.29       Subd. 3. <b>Business subsidy.</b> "Business subsidy" or "subsidy" means a state or local &#10;60.30   government agency grant, contribution of personal property, real property, infrastructure, &#10;60.31   the principal amount of a loan at rates below those commercially available to the recipient, &#10;60.32   any reduction or deferral of any tax or any fee, any guarantee of any payment under any &#10;60.33   loan, lease, or other obligation, or any preferential use of government facilities given &#10;60.34   to a business.&#10;61.1    The following forms of financial assistance are not a business subsidy:&#10;61.2    (1) a business subsidy of less than $25,000;&#10;61.3    (2) assistance that is generally available to all businesses or to a general class of &#10;61.4    similar businesses, such as a line of business, size, location, or similar general criteria;&#10;61.5    (3) public improvements to buildings or lands owned by the state or local &#10;61.6    government that serve a public purpose and do not principally benefit a single business or &#10;61.7    defined group of businesses at the time the improvements are made;&#10;61.8    (4) redevelopment property polluted by contaminants as defined in section  116J.552, &#10;61.9    subdivision 3; &#10;61.10   (5) assistance provided for the sole purpose of renovating old or decaying building &#10;61.11   stock or bringing it up to code and assistance provided for designated historic preservation &#10;61.12   districts, provided that the assistance is equal to or less than 50 percent of the total cost;&#10;61.13   (6) assistance to provide job readiness and training services if the sole purpose of &#10;61.14   the assistance is to provide those services;&#10;61.15   (7) assistance for housing;&#10;61.16   (8) assistance for pollution control or abatement, including assistance for a tax &#10;61.17   increment financing hazardous substance subdistrict as defined under section  469.174, &#10;61.18   subdivision 23; &#10;61.19   (9) assistance for energy conservation;&#10;61.20   (10) tax reductions resulting from conformity with federal tax law;&#10;61.21   (11) workers' compensation and unemployment insurance;&#10;61.22   (12) benefits derived from regulation;&#10;61.23   (13) indirect benefits derived from assistance to educational institutions;&#10;61.24   (14) funds from bonds allocated under chapter 474A, bonds issued to refund &#10;61.25   outstanding bonds, and bonds issued for the benefit of an organization described in section &#10;61.26   501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999;&#10;61.27   (15) assistance for a collaboration between a Minnesota higher education institution &#10;61.28   and a business;&#10;61.29   (16) assistance for a tax increment financing soils condition district as defined under &#10;61.30   section  469.174, subdivision 19; &#10;61.31   (17) redevelopment when the recipient's investment in the purchase of the site &#10;61.32   and in site preparation is 70 percent or more of the assessor's current year's estimated &#10;61.33   market value;&#10;61.34   (18) general changes in tax increment financing law and other general tax law &#10;61.35   changes of a principally technical nature;&#10;62.1    (19) federal assistance until the assistance has been repaid to, and reinvested by, the &#10;62.2    state or local government agency;&#10;62.3    (20) funds from dock and wharf bonds issued by a seaway port authority;&#10;62.4    (21) business loans and loan guarantees of $75,000 or less; <del>and</del>&#10;62.5    (22) federal loan funds provided through the United States Department of &#10;62.6    Commerce, Economic Development Administration<ins>; and</ins>&#10;62.7    <ins>(23) property tax abatements granted under section 469.1813 to property that is </ins>&#10;62.8    <ins>subject to valuation under Minnesota Rules, chapter 8100</ins>.&#10;&#10;<a id="go.5.2.0"></a>62.9        Sec. 2. Minnesota Statutes 2004, section 123B.53, subdivision 5, is amended to read:&#10;62.10       Subd. 5. <b>Equalized debt service levy.</b> (a) The equalized debt service levy of a &#10;62.11   district equals the sum of the first tier equalized debt service levy and the second tier &#10;62.12   equalized debt service levy.&#10;62.13   (b) A district's first tier equalized debt service levy equals the district's first tier debt &#10;62.14   service equalization revenue times the lesser of one or the ratio of:&#10;62.15   (1) the quotient derived by dividing the adjusted net tax capacity of the district for &#10;62.16   the year before the year the levy is certified by the adjusted pupil units in the district for &#10;62.17   the school year ending in the year prior to the year the levy is certified; to&#10;62.18   (2) <del>$3,200</del><ins> $5,000</ins>.&#10;62.19   (c) A district's second tier equalized debt service levy equals the district's second &#10;62.20   tier debt service equalization revenue times the lesser of one or the ratio of:&#10;62.21   (1) the quotient derived by dividing the adjusted net tax capacity of the district for &#10;62.22   the year before the year the levy is certified by the adjusted pupil units in the district for &#10;62.23   the school year ending in the year prior to the year the levy is certified; to&#10;62.24   (2) $8,000.&#10;62.25   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for revenue for fiscal year 2008 </ins>&#10;62.26   <ins>and later. </ins>&#10;&#10;<a id="go.5.3.0"></a>62.27       Sec. 3. Minnesota Statutes 2005 Supplement, section 123B.54, is amended to read:&#10;62.28   <b>123B.54 DEBT SERVICE APPROPRIATION.</b>&#10;62.29   (a) <del>$21,624,000</del> <ins>$22,701,000</ins> in fiscal year 2008 and <del>$20,403,000</del> <ins>$22,269,000</ins> in &#10;62.30   fiscal year 2009 and later are appropriated from the general fund to the commissioner of &#10;62.31   education for payment of debt service equalization aid under section 123B.53.&#10;62.32   (b) The appropriations in paragraph (a) must be reduced by the amount of any &#10;62.33   money specifically appropriated for the same purpose in any year from any state fund.&#10;&#10;<a id="go.5.4.0"></a>63.1        Sec. 4. Minnesota Statutes 2005 Supplement, section 126C.10, subdivision 13a, &#10;63.2    is amended to read:&#10;63.3        Subd. 13a. <b>Operating capital levy.</b> To obtain operating capital revenue for fiscal &#10;63.4    year 2007 and later, a district may levy an amount not more than the product of its &#10;63.5    operating capital revenue for the fiscal year times the lesser of one or the ratio of its &#10;63.6    adjusted net tax capacity per adjusted marginal cost pupil unit to the operating capital &#10;63.7    equalizing factor. The operating capital equalizing factor equals $22,222 for fiscal year &#10;63.8    2006, <del>and</del> $10,700 for fiscal year 2007<ins>, and $22,222 for fiscal year 2008 </ins> and later.&#10;63.9    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for revenue for fiscal year 2008 </ins>&#10;63.10   <ins>and later.</ins>&#10;&#10;<a id="go.5.5.0"></a>63.11       Sec. 5. Minnesota Statutes 2004, section 144F.01, subdivision 4, is amended to read:&#10;63.12       Subd. 4. <b>Property tax levy authority.</b> The district's board may levy a tax on &#10;63.13   the taxable real and personal property in the district. The ad valorem tax levy may not &#10;63.14   exceed 0.048 percent of the taxable market value of the district or <del>$250,000</del><ins> $400,000</ins>, &#10;63.15   whichever is less. The proceeds of the levy must be used as provided in subdivision 5. &#10;63.16   The board shall certify the levy at the times as provided under section  275.07. The board &#10;63.17   shall provide the county with whatever information is necessary to identify the property &#10;63.18   that is located within the district. If the boundaries include a part of a parcel, the entire &#10;63.19   parcel shall be included in the district. The county auditors must spread, collect, and &#10;63.20   distribute the proceeds of the tax at the same time and in the same manner as provided by &#10;63.21   law for all other property taxes.&#10;&#10;<a id="go.5.6.0"></a>63.22       Sec. 6. Minnesota Statutes 2004, section 216B.2424, subdivision 5, is amended to read:&#10;63.23       Subd. 5. <b>Mandate.</b> (a) A public utility, as defined in section  216B.02, subdivision 4, &#10;63.24   that operates a nuclear-powered electric generating plant within this state must construct &#10;63.25   and operate, purchase, or contract to construct and operate (1) by December 31, 1998, &#10;63.26   50 megawatts of electric energy installed capacity generated by farm-grown closed-loop &#10;63.27   biomass scheduled to be operational by December 31, 2001; and (2) by December 31, &#10;63.28   1998, an additional 75 megawatts of installed capacity so generated scheduled to be &#10;63.29   operational by December 31, 2002. &#10;63.30   (b) Of the 125 megawatts of biomass electricity installed capacity required under &#10;63.31   this subdivision, no more than 55 megawatts of this capacity may be provided by a facility &#10;63.32   that uses poultry litter as its primary fuel source and any such facility:&#10;63.33   (1) need not use biomass that complies with the definition in subdivision 1;&#10;64.1    (2) must enter into a contract with the public utility for such capacity, that has an &#10;64.2    average purchase price per megawatt hour over the life of the contract that is equal to or &#10;64.3    less than the average purchase price per megawatt hour over the life of the contract in &#10;64.4    contracts approved by the Public Utilities Commission before April 1, 2000, to satisfy &#10;64.5    the mandate of this section, and file that contract with the Public Utilities Commission &#10;64.6    prior to September 1, 2000; and&#10;64.7    (3) must schedule such capacity to be operational by December 31, 2002.&#10;64.8    (c) Of the total 125 megawatts of biomass electric energy installed capacity required &#10;64.9    under this section, no more than 75 megawatts may be provided by a single project.&#10;64.10   (d) Of the 75 megawatts of biomass electric energy installed capacity required under &#10;64.11   paragraph (a), clause (2), no more than 33 megawatts of this capacity may be provided by &#10;64.12   a St. Paul district heating and cooling system cogeneration facility utilizing waste wood &#10;64.13   as a primary fuel source. The St. Paul district heating and cooling system cogeneration &#10;64.14   facility need not use biomass that complies with the definition in subdivision 1.&#10;64.15   (e) The public utility must accept and consider on an equal basis with other biomass &#10;64.16   proposals:&#10;64.17   (1) a proposal to satisfy the requirements of this section that includes a project that &#10;64.18   exceeds the megawatt capacity requirements of either paragraph (a), clause (1) or (2), and &#10;64.19   that proposes to sell the excess capacity to the public utility or to other purchasers; and&#10;64.20   (2) a proposal for a new facility to satisfy more than ten but not more than 20 &#10;64.21   megawatts of the electrical generation requirements by a small business-sponsored &#10;64.22   independent power producer facility to be located within the northern quarter of the state, &#10;64.23   which means the area located north of Constitutional Route No. 8 as described in section  &#10;64.24   161.114, subdivision 2, and that utilizes biomass residue wood, sawdust, bark, chipped &#10;64.25   wood, or brush to generate electricity. A facility described in this clause is not required &#10;64.26   to utilize biomass complying with the definition in subdivision 1, but must be under &#10;64.27   construction by December 31, 2005. &#10;64.28   (f) If a public utility files a contract with the commission for electric energy installed &#10;64.29   capacity that uses poultry litter as its primary fuel source, the commission must do a &#10;64.30   preliminary review of the contract to determine if it meets the purchase price criteria &#10;64.31   provided in paragraph (b), clause (2), of this subdivision. The commission shall perform &#10;64.32   its review and advise the parties of its determination within 30 days of filing of such a &#10;64.33   contract by a public utility. A public utility may submit by September 1, 2000, a revised &#10;64.34   contract to address the commission's preliminary determination.&#10;65.1    (g) The commission shall finally approve, modify, or disapprove no later than July &#10;65.2    1, 2001, all contracts submitted by a public utility as of September 1, 2000, to meet the &#10;65.3    mandate set forth in this subdivision.&#10;65.4    (h) If a public utility subject to this section exercises an option to increase the &#10;65.5    generating capacity of a project in a contract approved by the commission prior to April &#10;65.6    25, 2000, to satisfy the mandate in this subdivision, the public utility must notify the &#10;65.7    commission by September 1, 2000, that it has exercised the option and include in the &#10;65.8    notice the amount of additional megawatts to be generated under the option exercised. &#10;65.9    Any review by the commission of the project after exercise of such an option shall be &#10;65.10   based on the same criteria used to review the existing contract.&#10;65.11   (i) A facility specified in this subdivision qualifies for exemption from property &#10;65.12   taxation under section  272.02, subdivision <del>43</del><ins> 45</ins>. &#10;65.13   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for property taxes levied in 2006, </ins>&#10;65.14   <ins>payable in 2007, and thereafter.</ins>&#10;&#10;<a id="go.5.7.0"></a>65.15       Sec. 7. Minnesota Statutes 2004, section 272.02, subdivision 12, is amended to read:&#10;65.16       Subd. 12. <b>Native prairie.</b> Native prairie lands are exempt. The commissioner of <del>the </del>&#10;65.17   <del>Department of</del> natural resources shall determine lands in the state which are native prairie &#10;65.18   and shall notify the county assessor of each county in which the lands are located. Pasture &#10;65.19   land used for livestock grazing purposes shall not be considered native prairie for the &#10;65.20   purposes of this subdivision<ins> unless the pasture is covered by a grazing plan approved by </ins>&#10;65.21   <ins>the commissioner of natural resources</ins>. Upon receipt of an application for the exemption &#10;65.22   provided in this subdivision for lands for which the assessor has no determination from &#10;65.23   the commissioner of natural resources, the assessor shall refer the application to the &#10;65.24   commissioner of natural resources who shall determine within <del>30</del><ins> 180 </ins> days whether the &#10;65.25   land is native prairie and notify the county assessor of the decision. Exemption of native &#10;65.26   prairie pursuant to this subdivision shall not grant the public any additional or greater right &#10;65.27   of access to the native prairie or diminish any right of ownership to it.&#10;65.28   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes levied in 2006, payable </ins>&#10;65.29   <ins>in 2007, and thereafter.</ins>&#10;&#10;<a id="go.5.8.0"></a>65.30       Sec. 8. Minnesota Statutes 2004, section 272.02, subdivision 45, is amended to read:&#10;65.31       Subd. 45. <b>Biomass electrical generation facility; personal property.</b>&#10; 65.32   Notwithstanding subdivision 9, clause (a), attached machinery and other personal property &#10;66.1    which is part of an electrical generating facility that meets the requirements of this &#10;66.2    subdivision is exempt. At the time of construction, the facility must:&#10;66.3    (1) be designed to utilize biomass as established in section  216B.2424 as a primary &#10;66.4    fuel source; and &#10;66.5    (2) be constructed for the purpose of generating power at the facility that will be sold &#10;66.6    pursuant to a contract approved by the Public Utilities Commission in accordance with &#10;66.7    the biomass mandate imposed under section  216B.2424. &#10;66.8    Construction of the facility must be commenced after January 1, 2000, and before &#10;66.9    December 31, <del>2002</del><ins> 2005</ins>. Property eligible for this exemption does not include electric &#10;66.10   transmission lines and interconnections or gas pipelines and interconnections appurtenant &#10;66.11   to the property or facility.&#10;66.12   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes levied in 2006, payable </ins>&#10;66.13   <ins>in 2007, and thereafter.</ins>&#10;&#10;<a id="go.5.9.0"></a>66.14       Sec. 9. Minnesota Statutes 2004, section 272.02, subdivision 54, is amended to read:&#10;66.15       Subd. 54. <b>Small biomass electric generation facility; personal property.</b> <ins>(a) </ins>&#10;66.16   <ins>Subject to paragraph (b),</ins> notwithstanding subdivision 9, clause (a), attached machinery &#10;66.17   and other personal property which is part of an electrical generating facility that meets the &#10;66.18   requirements of this subdivision is exempt. At the time of construction the facility must:&#10;66.19   (1) have a generation capacity of less than 25 megawatts;&#10;66.20   (2) provide process heating needs in addition to electrical generation; and&#10;66.21   (3) utilize agricultural by-products from the malting process and other biomass &#10;66.22   fuels as its primary fuel source.&#10;66.23   Construction of the facility must be commenced after January 1, 2002, and before &#10;66.24   <del>January 1, 2006</del><ins> June 30, 2007</ins>. Property eligible for this exemption does not include &#10;66.25   electric transmission lines and interconnections or gas pipelines and interconnections &#10;66.26   appurtenant to the property or facility.&#10;66.27   <ins>(b) The exemption under this subdivision is contingent on approval by the governing </ins>&#10;66.28   <ins>bodies of the municipality and county in which the electric generation facility is located.</ins>&#10;66.29   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes levied in 2008, payable </ins>&#10;66.30   <ins>in 2009, and thereafter.</ins>&#10;&#10;<a id="go.5.10.0"></a>66.31       Sec. 10. Minnesota Statutes 2004, section 272.02, subdivision 55, is amended to read:&#10;66.32       Subd. 55. <b>Electric generation facility; personal property.</b> Notwithstanding &#10;66.33   subdivision 9, clause (a), attached machinery and other personal property which is part of &#10;67.1    an electric generating facility that meets the requirements of this subdivision is exempt. At &#10;67.2    the time of construction, the facility must <del>be sited on an energy park that</del> (i) <del>is located on </del>&#10;67.3    <del>an active mining site, or on a former mining or industrial site where mining or industrial </del>&#10;67.4    <del>operations have terminated</del><ins> be designated as an innovative energy project as defined in </ins>&#10;67.5    <ins>section 216B.1694</ins>, (ii) <del>is</del> <ins>be </ins>within a tax relief area as defined in section  273.134, (iii) &#10;67.6    <del>has </del><del>on-site </del><ins>have </ins>access to existing railroad infrastructure<ins> within less than three miles</ins>, (iv) &#10;67.7    <del>has direct rail access to a Great Lakes port, (v) has sufficient private water resources </del>&#10;67.8    <del>on </del><del>site, and (vi) is</del> <ins>have received by resolution approval from the governing body of </ins>&#10;67.9    <ins>the county and township or city in which the proposed facility is to be located for the </ins>&#10;67.10   <ins>exemption of personal property under this subdivision, and (v) be</ins> designed to host at &#10;67.11   least 500 megawatts of electrical generation.&#10;67.12   Construction of the first <del>250</del><ins> 500</ins> megawatts of the facility must be commenced &#10;67.13   after January 1, <del>2002</del><ins> 2006</ins>, and before January 1, <del>2005</del><ins> 2010</ins>. Construction of up to an &#10;67.14   additional 750 megawatts of generation must be commenced before January 1, <del>2010</del><ins> </ins>&#10;67.15   <ins>2015</ins>. Property eligible for this exemption does not include electric transmission lines and &#10;67.16   interconnections or gas pipelines and interconnections appurtenant to the property or the &#10;67.17   facility. <ins>To qualify for an exemption under this subdivision, the owner of the electric </ins>&#10;67.18   <ins>generation facility must have an agreement with the host county, township or city, and </ins>&#10;67.19   <ins>school district, for payment in lieu of personal property taxes to the host county, township </ins>&#10;67.20   <ins>or city, and school district.</ins>&#10;67.21   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.5.11.0"></a>67.22       Sec. 11. Minnesota Statutes 2004, section 272.02, is amended by adding a subdivision &#10;67.23   to read:&#10;67.24       <ins>Subd. 84.</ins> <ins><b>Electric generation facility; personal property.</b></ins> <ins>Notwithstanding </ins>&#10;67.25   <ins>subdivision 9, clause (a), attached machinery and other personal property which is part </ins>&#10;67.26   <ins>of a 10.3 megawatt run-of-the-river hydroelectric generation facility and that meets the </ins>&#10;67.27   <ins>requirements of this subdivision is exempt. At the time of construction, the facility must:</ins>&#10;67.28   <ins>(1) utilize between 12 and 16 turbine generators at a dam site existing on March </ins>&#10;67.29   <ins>31, 1994;</ins>&#10;67.30   <ins>(2) be located on land within 3,000 feet of a 13.8 kilovolt distribution substation; and</ins>&#10;67.31   <ins>(3) be eligible to receive a renewable energy production incentive payment under </ins>&#10;67.32   <ins>section 216C.41.</ins>&#10;67.33   <ins>Construction of the facility must be commenced after April 30, 2006, and </ins>&#10;67.34   <ins>before January 1, 2009. Property eligible for this exemption does not include electric </ins>&#10;68.1    <ins>transmission lines and interconnections or gas pipelines and interconnections appurtenant </ins>&#10;68.2    <ins>to the property or the facility.</ins>&#10;68.3    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for property taxes levied in 2006, </ins>&#10;68.4    <ins>payable in 2007, and thereafter.</ins>&#10;&#10;<a id="go.5.12.0"></a>68.5        Sec. 12. Minnesota Statutes 2004, section 272.029, subdivision 2, is amended to read:&#10;68.6        Subd. 2. <b>Definitions.</b> (a) For the purposes of this section, the term:&#10;68.7    (1) "wind energy conversion system" has the meaning given <del>it</del> in section  216C.06, &#10;68.8    subdivision 19<ins>, and also includes a substation that is used and owned by one or more </ins>&#10;68.9    <ins>wind energy conversion facilities</ins>; &#10;68.10   (2) "large scale wind energy conversion system" means a wind energy conversion &#10;68.11   system of more than 12 megawatts, as measured by the nameplate capacity of the system &#10;68.12   or as combined with other systems as provided in paragraph (b);&#10;68.13   (3) "medium scale wind energy conversion system" means a wind energy conversion &#10;68.14   system of over two and not more than 12 megawatts, as measured by the nameplate &#10;68.15   capacity of the system or as combined with other systems as provided in paragraph (b); and&#10;68.16   (4) "small scale wind energy conversion system" means a wind energy conversion &#10;68.17   system of two megawatts and under, as measured by the nameplate capacity of the system &#10;68.18   or as combined with other systems as provided in paragraph (b).&#10;68.19   (b) For systems installed and contracted for after January 1, 2002, the total size of a &#10;68.20   wind energy conversion system under this subdivision shall be determined according to &#10;68.21   this paragraph. Unless the systems are interconnected with different distribution systems, &#10;68.22   the nameplate capacity of one wind energy conversion system shall be combined with the &#10;68.23   nameplate capacity of any other wind energy conversion system that is:&#10;68.24   (1) located within five miles of the wind energy conversion system;&#10;68.25   (2) constructed within the same calendar year as the wind energy conversion system; &#10;68.26   and&#10;68.27   (3) under common ownership.&#10;68.28   In the case of a dispute, the commissioner of commerce shall determine the total size &#10;68.29   of the system, and shall draw all reasonable inferences in favor of combining the systems.&#10;68.30   (c) In making a determination under paragraph (b), the commissioner of commerce &#10;68.31   may determine that two wind energy conversion systems are under common ownership &#10;68.32   when the underlying ownership structure contains similar persons or entities, even if the &#10;68.33   ownership shares differ between the two systems. Wind energy conversion systems are &#10;68.34   not under common ownership solely because the same person or entity provided equity &#10;68.35   financing for the systems.&#10;69.1    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes levied in 2006, payable </ins>&#10;69.2    <ins>in 2007, and thereafter.</ins>&#10;&#10;<a id="go.5.13.0"></a>69.3        Sec. 13. Minnesota Statutes 2004, section 273.11, is amended by adding a subdivision &#10;69.4    to read:&#10;69.5        <ins>Subd. 23.</ins> <ins><b>First tier valuation limit; agricultural homestead property.</b></ins> <ins>(a) </ins>&#10;69.6    <ins>Beginning with assessment year 2006, the commissioner of revenue shall annually certify </ins>&#10;69.7    <ins>the first tier limit for agricultural homestead property as the product of (i) $600,000, and </ins>&#10;69.8    <ins>(ii) the ratio of the statewide average taxable market value of agricultural property per acre </ins>&#10;69.9    <ins>of deeded farm land in the preceding assessment year to the statewide average taxable </ins>&#10;69.10   <ins>market value of agricultural property per acre of deeded farm land for assessment year </ins>&#10;69.11   <ins>1999. The limit shall be rounded to the nearest $10,000.</ins>&#10;69.12   <ins>(b) For the purposes of this subdivision, "agricultural property" means all class 2 </ins>&#10;69.13   <ins>property under section 273.13, subdivision 23, except for (1) timberland, (2) a landing </ins>&#10;69.14   <ins>area or public access area of a privately owned public use airport, and (3) property </ins>&#10;69.15   <ins>consisting of the house, garage and immediately surrounding one acre of land of an </ins>&#10;69.16   <ins>agricultural homestead.</ins>&#10;69.17   <ins>(c) The commissioner shall certify the limit by January 2 of each assessment year, </ins>&#10;69.18   <ins>except that for assessment year 2006 the commissioner shall certify the limit by June </ins>&#10;69.19   <ins>1, 2006.</ins>&#10;69.20   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for assessment year 2006 and </ins>&#10;69.21   <ins>thereafter.</ins>&#10;&#10;<a id="go.5.14.0"></a>69.22       Sec. 14. <ins><b>[273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY </b></ins>&#10;69.23   <ins><b>TAX LAW.</b></ins>&#10;69.24       <ins>Subdivision 1.</ins> <ins><b>Requirements.</b></ins> <ins>Real estate is entitled to valuation under this section </ins>&#10;69.25   <ins>only if all of the following requirements are met:</ins>&#10;69.26   <ins>(1) the property is classified 1a, 1b, 2a, or 2b property under section </ins><ins>273.13</ins><ins>, </ins>&#10;69.27   <ins>subdivisions 22 and 23;</ins>&#10;69.28   <ins>(2) the property is at least ten contiguous acres, when the application is filed under </ins>&#10;69.29   <ins>subdivision 2;</ins>&#10;69.30   <ins>(3) the owner has filed a completed application for deferment as specified in </ins>&#10;69.31   <ins>subdivision 2 with the county assessor in the county in which the property is located;</ins>&#10;69.32   <ins>(4) there are no delinquent taxes on the property; and </ins>&#10;69.33   <ins>(5) a covenant on the land restricts its use as provided in subdivision 2, clause (4).</ins>&#10;70.1        <ins>Subd. 2.</ins> <ins><b>Application.</b></ins> <ins>Application for valuation deferment under this section </ins>&#10;70.2    <ins>must be filed by May 1 of the assessment year.  Any application filed and granted </ins>&#10;70.3    <ins>continues in effect for subsequent years until the property no longer qualifies, provided </ins>&#10;70.4    <ins>that supplemental affidavits under subdivision 6 are timely filed.  The application must </ins>&#10;70.5    <ins>be filed with the assessor of the county in which the real property is located on such </ins>&#10;70.6    <ins>form as may be prescribed by the commissioner of revenue.  The application must be </ins>&#10;70.7    <ins>executed and acknowledged in the manner required by law to execute and acknowledge a </ins>&#10;70.8    <ins>deed and must contain at least the following information and any other information the </ins>&#10;70.9    <ins>commissioner deems necessary:</ins>&#10;70.10   <ins>(1) the legal description of the area;</ins>&#10;70.11   <ins>(2) the name and address of owner;</ins>&#10;70.12   <ins>(3) a copy of the affidavit filed under section </ins><ins>273.13</ins><ins>, subdivision 23, paragraph (h), </ins>&#10;70.13   <ins>in the case of property classified class 2b, clause (5); or in the case of property classified </ins>&#10;70.14   <ins>1a, 1b, 2a, and 2b, clauses (1) to (3), the application must include a similar document with </ins>&#10;70.15   <ins>the same information as contained in the affidavit under section </ins><ins>273.13</ins><ins>, subdivision 23, </ins>&#10;70.16   <ins>paragraph (h); and </ins>&#10;70.17   <ins>(4) a statement of proof from the owner that the land contains a restrictive covenant </ins>&#10;70.18   <ins>limiting its use for the property's surface to that which exists on the date of the application </ins>&#10;70.19   <ins>and limiting its future use to the preparation and removal of the aggregate commercial </ins>&#10;70.20   <ins>deposit under its surface.</ins>&#10;70.21   <ins>To qualify under this clause, the covenant must be binding on the owner or the </ins>&#10;70.22   <ins>owner's successor or assignee, and run with the land, except as provided in subdivision 4 </ins>&#10;70.23   <ins>allowing for the cancellation of the covenant under certain conditions.</ins>&#10;70.24       <ins>Subd. 3.</ins> <ins><b>Determination of value.</b></ins> <ins>Upon timely application by the owner as </ins>&#10;70.25   <ins>provided in subdivision 2, notwithstanding sections </ins><ins>272.03, subdivision 8</ins><ins>, and </ins><ins>273.11</ins><ins>, </ins>&#10;70.26   <ins>the value of any qualifying land described in subdivision 2 must be valued as if it were </ins>&#10;70.27   <ins>agricultural property, using a per acre valuation equal to the current year's per acre </ins>&#10;70.28   <ins>valuation of agricultural land in the county.  The assessor shall not consider any additional </ins>&#10;70.29   <ins>value resulting from potential alternative and future uses of the property.  The buildings </ins>&#10;70.30   <ins>located on the land shall be valued by the assessor in the normal manner.</ins>&#10;70.31       <ins>Subd. 4.</ins> <ins><b>Cancellation of covenant.</b></ins> <ins>The covenant required under subdivision </ins>&#10;70.32   <ins>2 may be canceled in two ways:</ins>&#10;70.33   <ins>(1) by the owner beginning with the next subsequent assessment year provided </ins>&#10;70.34   <ins>that the additional taxes as determined under subdivision 5 are paid by the owner at the </ins>&#10;70.35   <ins>time of cancellation; and </ins>&#10;71.1    <ins>(2) by the city or town in which the property is located beginning with the next </ins>&#10;71.2    <ins>subsequent assessment year, if the city council or town board:</ins>&#10;71.3    <ins>(i) changes the conditional use of the property;</ins>&#10;71.4    <ins>(ii) revokes the mining permit; or </ins>&#10;71.5    <ins>(iii) changes the zoning to disallow mining.</ins>&#10;71.6    <ins>No additional taxes are imposed on the property under this clause.</ins>&#10;71.7        <ins> Subd. 4a.</ins> <ins><b>County termination.</b></ins> <ins>Within two years of the effective date of this </ins>&#10;71.8    <ins>section, a county may, following notice and public hearing, terminate application of this </ins>&#10;71.9    <ins>section in the county.  The termination is effective upon adoption of a resolution of the </ins>&#10;71.10   <ins>county board.  A county has 60 days from receipt of the first application for enrollment </ins>&#10;71.11   <ins>under this section to notify the applicant and any subsequent applicants of the county's </ins>&#10;71.12   <ins>intent to begin the process of terminating application of this section in the county. The </ins>&#10;71.13   <ins>county must act on the termination within six months. Upon termination by a vote of the </ins>&#10;71.14   <ins>county board, all applications received during notification of intent to terminate shall be </ins>&#10;71.15   <ins>deemed void. If the county board does not act on the termination within six months of </ins>&#10;71.16   <ins>notification, all applications for valuation for deferment received shall be deemed eligible </ins>&#10;71.17   <ins>to be enrolled under this section. Following this initial 60-day grace period, a termination </ins>&#10;71.18   <ins>applies prospectively and does not affect property enrolled under this section prior to the </ins>&#10;71.19   <ins>termination date.  A county may reauthorize application of this section by a resolution of </ins>&#10;71.20   <ins>the county board revoking the termination.</ins>&#10;71.21       <ins>Subd. 5.</ins> <ins><b>Additional taxes.</b></ins> <ins>When real property which has been valued and assessed </ins>&#10;71.22   <ins>under this section no longer qualifies, the portion of the land classified under subdivision </ins>&#10;71.23   <ins>1, clause (1), is subject to additional taxes.  The additional tax amount is determined by:</ins>&#10;71.24   <ins>(1) computing the difference between (i) the current year's taxes determined in </ins>&#10;71.25   <ins>accordance with subdivision 3, and (ii) an amount as determined by the assessor based </ins>&#10;71.26   <ins>upon the property's current year's estimated market value of like real estate at its highest </ins>&#10;71.27   <ins>and best use and the appropriate local tax rate; and </ins>&#10;71.28   <ins>(2) multiplying the amount determined in clause (1) by the number of years the </ins>&#10;71.29   <ins>land was in the program under this section.</ins>&#10;71.30   <ins>The current year's estimated market value as determined by the assessor must not </ins>&#10;71.31   <ins>exceed the market value that would result if the property was sold in an arms-length </ins>&#10;71.32   <ins>transaction and must not be greater than it would have been had the actual bona fide sale </ins>&#10;71.33   <ins>price of the property been used in lieu of that market value.  The additional taxes must be </ins>&#10;71.34   <ins>extended against the property on the tax list for the current year, except that interest or </ins>&#10;71.35   <ins>penalties must not be levied on such additional taxes if timely paid.</ins>&#10;72.1    <ins>The additional tax under this subdivision must not be imposed on that portion of the </ins>&#10;72.2    <ins>property which has actively been mined and has been removed from the program based </ins>&#10;72.3    <ins>upon the supplemental affidavits filed under subdivision 6.</ins>&#10;72.4        <ins>Subd. 6.</ins> <ins><b>Supplemental affidavits; mining activity on land.</b></ins> <ins>When any portion </ins>&#10;72.5    <ins>of the property begins to be actively mined, the owner must file a supplemental affidavit </ins>&#10;72.6    <ins>within 60 days from the day any aggregate is removed stating the number of acres of the </ins>&#10;72.7    <ins>property that is actively being mined.  The acres actively being mined shall be (1) valued </ins>&#10;72.8    <ins>and classified under section </ins><ins>273.13, subdivision 24</ins><ins>, in the next subsequent assessment </ins>&#10;72.9    <ins>year, and (2) removed from the aggregate resource preservation property tax program </ins>&#10;72.10   <ins>under this section.  The additional taxes under subdivision 5 must not be imposed on </ins>&#10;72.11   <ins>the acres that are actively being mined and have been removed from the program under </ins>&#10;72.12   <ins>this section.</ins>&#10;72.13   <ins>Copies of the original affidavit and all supplemental affidavits must be filed with the </ins>&#10;72.14   <ins>county assessor, the local zoning administrator, and the Department of Natural Resources, </ins>&#10;72.15   <ins>Division of Land and Minerals.  A supplemental affidavit must be filed each time a </ins>&#10;72.16   <ins>subsequent portion of the property is actively mined, provided that the minimum acreage </ins>&#10;72.17   <ins>change is five acres, even if the actual mining activity constitutes less than five acres. </ins>&#10;72.18   <ins>Failure to file the affidavits timely shall result in the property losing its valuation deferment </ins>&#10;72.19   <ins>under this section, and additional taxes must be imposed as calculated under subdivision 5.</ins>&#10;72.20       <ins>Subd. 7.</ins> <ins><b>Lien.</b></ins> <ins>The additional tax imposed by this section is a lien upon the property </ins>&#10;72.21   <ins>assessed to the same extent and for the same duration as other taxes imposed upon </ins>&#10;72.22   <ins>property within this state and, when collected, must be distributed in the manner provided </ins>&#10;72.23   <ins>by law for the collection and distribution of other property taxes.</ins>&#10;72.24       <ins>Subd. 8.</ins> <ins><b>Continuation of tax treatment upon sale.</b></ins> <ins>When real property qualifying </ins>&#10;72.25   <ins>under subdivision 1 is sold, additional taxes must not be extended against the property </ins>&#10;72.26   <ins>if the property continues to qualify under subdivision 1, and the new owner files an </ins>&#10;72.27   <ins>application with the assessor for continued deferment within 30 days after the sale.</ins>&#10;72.28       <ins>Subd. 9.</ins> <ins><b>Definitions.</b></ins> <ins>For purposes of this section, "commercial aggregate deposit" </ins>&#10;72.29   <ins>and "actively mined" have the meanings given them in section </ins><ins>273.13, subdivision 23</ins><ins>, </ins>&#10;72.30   <ins>paragraph (h).</ins>&#10;72.31       <ins>Subd. 10.</ins> <ins><b>County administrative fee.</b></ins> <ins>A county may charge the owner of property </ins>&#10;72.32   <ins>that is valued under this section a fee to compensate for its costs of administering this </ins>&#10;72.33   <ins>program.</ins>&#10;72.34   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes levied in 2007, payable </ins>&#10;72.35   <ins>in 2008, and thereafter, except that for the 2007 assessment year, the application date </ins>&#10;73.1    <ins>under subdivision 4 shall be September 1, 2007, and subdivision 4a is effective the day </ins>&#10;73.2    <ins>following final enactment.</ins>&#10;&#10;<a id="go.5.15.0"></a>73.3        Sec. 15. Minnesota Statutes 2004, section 273.124, subdivision 12, is amended to read:&#10;73.4        Subd. 12. <b>Homestead of member of United States armed forces; Peace Corps; </b>&#10;73.5    <b>VISTA.</b> <ins> (a) </ins>Real estate actually occupied and used for the purpose of a homestead by &#10;73.6    a person, or by a member of that person's immediate family shall be classified as a &#10;73.7    homestead even though the person or family is absent if (1) the person or the person's &#10;73.8    family is absent solely because the person is on active duty with the armed forces of the &#10;73.9    United States, or is serving as a volunteer under the VISTA or Peace Corps program; (2) &#10;73.10   the owner intends to return as soon as discharged or relieved from service; and (3) the &#10;73.11   owner claims it as a homestead. A person who knowingly makes or submits to an assessor &#10;73.12   an affidavit or other statement that is false in any material matter to obtain or aid another &#10;73.13   in obtaining a benefit under this subdivision is guilty of a felony.&#10;73.14   <ins>(b) In the case of a person who is absent solely because the person is on active duty </ins>&#10;73.15   <ins>with the United States armed forces, homestead classification must be granted as provided </ins>&#10;73.16   <ins>in this paragraph if the requirements of paragraph (a), clauses (1) to (3), are met, even </ins>&#10;73.17   <ins>if the property has not been occupied as a homestead by the person or a member of the </ins>&#10;73.18   <ins>person's family. To qualify for this classification, the person who acquires the property </ins>&#10;73.19   <ins>must notify the assessor of the acquisition and of the person's absence due to military </ins>&#10;73.20   <ins>service. When the person returns from military service and occupies the property as </ins>&#10;73.21   <ins>a homestead, the person shall notify the assessor, who will provide for abatement of </ins>&#10;73.22   <ins>the difference between the nonhomestead and homestead taxes for the current and two </ins>&#10;73.23   <ins>preceding years, not to exceed the time during which the person owned the property.</ins>&#10;73.24   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for assessments in 2006, taxes </ins>&#10;73.25   <ins>payable in 2007, and thereafter.</ins>&#10;&#10;<a id="go.5.16.0"></a>73.26       Sec. 16. Minnesota Statutes 2004, section 273.124, is amended by adding a subdivision &#10;73.27   to read:&#10;73.28       <ins>Subd. 22.</ins> <ins><b>Annual registration of certain relative homesteads.</b></ins> <ins>If the owner of </ins>&#10;73.29   <ins>property or the owner's relative who occupies property that is classified as a homestead </ins>&#10;73.30   <ins>under subdivision 1, paragraph (c), receives compensation for allowing occupancy of any </ins>&#10;73.31   <ins>part of that property for a period that exceeds 31 consecutive days during the calendar </ins>&#10;73.32   <ins>year, the recipient of the compensation must register the property with the city in which </ins>&#10;73.33   <ins>it is located no later than 60 days after the initial rental period began. This requirement </ins>&#10;73.34   <ins>applies to property located in a city that has a population over 25,000. Each such city must </ins>&#10;74.1    <ins>maintain a file of these property registrations that is open to the public, and retain the </ins>&#10;74.2    <ins>registrations for one year after the date of filing.</ins>&#10;74.3    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective July 1, 2006.</ins>&#10;&#10;<a id="go.5.17.0"></a>74.4        Sec. 17. Minnesota Statutes 2005 Supplement, section 273.128, subdivision 1, is &#10;74.5    amended to read:&#10;74.6        Subdivision 1. <b>Requirement.</b> Low-income rental property classified as class 4d &#10;74.7    under section 273.13, subdivision 25, is entitled to valuation under this section <del>if at least </del>&#10;74.8    <del>75 percent of</del><ins> for </ins> the units in the rental housing property <ins>that </ins>meet any of the following &#10;74.9    qualifications:&#10;74.10   (1) the units are subject to a housing assistance payments contract under section 8 &#10;74.11   of the United States Housing Act of 1937, as amended;&#10;74.12   (2) the units are rent-restricted and income-restricted units of a qualified low-income &#10;74.13   housing project receiving tax credits under section 42(g) of the Internal Revenue Code of &#10;74.14   1986, as amended;&#10;74.15   (3) the units are financed by the Rural Housing Service of the United States &#10;74.16   Department of Agriculture and receive payments under the rental assistance program &#10;74.17   pursuant to section 521(a) of the Housing Act of 1949, as amended; or&#10;74.18   (4) the units are subject to rent and income restrictions under the terms of financial &#10;74.19   assistance provided to the rental housing property by the federal government <del>or</del><ins>,</ins> the &#10;74.20   state of Minnesota<ins>, or a local unit of government </ins> as evidenced by a document recorded &#10;74.21   against the property.&#10;74.22   The restrictions must require assisted units to be occupied by residents whose &#10;74.23   household income at the time of initial occupancy does not exceed 60 percent of the &#10;74.24   greater of area or state median income, adjusted for family size, as determined by the &#10;74.25   United States Department of Housing and Urban Development. The restriction must also &#10;74.26   require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of &#10;74.27   area or state median income, adjusted for family size, as determined by the United States &#10;74.28   Department of Housing and Urban Development.&#10;74.29   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes levied in 2006, payable </ins>&#10;74.30   <ins>in 2007, and thereafter.</ins>&#10;&#10;<a id="go.5.18.0"></a>74.31       Sec. 18. Minnesota Statutes 2004, section 273.13, subdivision 23, is amended to read:&#10;74.32       Subd. 23. <b>Class 2.</b> (a) Class 2a property is agricultural land including any &#10;74.33   improvements that is homesteaded. The market value of the house and garage and &#10;75.1    immediately surrounding one acre of land has the same class rates as class 1a property &#10;75.2    under subdivision 22. The value of the remaining land including improvements up to <del>and </del>&#10;75.3    <del>including $600,000 market value</del><ins> the first tier valuation limit of agricultural homestead </ins>&#10;75.4    <ins>property </ins> has a net class rate of 0.55 percent of market value. The remaining property &#10;75.5    over <del>$600,000 market value</del><ins> the first tier </ins> has a class rate of one percent of market value.<ins> </ins>&#10;75.6    <ins>For purposes of this subdivision, the "first tier valuation limit of agricultural homestead </ins>&#10;75.7    <ins>property" and "first tier" means the limit certified under section 273.11, subdivision 23.</ins>&#10;75.8    (b) Class 2b property is (1) real estate, rural in character and used exclusively for &#10;75.9    growing trees for timber, lumber, and wood and wood products; (2) real estate that is not &#10;75.10   improved with a structure and is used exclusively for growing trees for timber, lumber, and &#10;75.11   wood and wood products, if the owner has participated or is participating in a cost-sharing &#10;75.12   program for afforestation, reforestation, or timber stand improvement on that particular &#10;75.13   property, administered or coordinated by the commissioner of natural resources; (3) real &#10;75.14   estate that is nonhomestead agricultural land; <del>or</del> (4) a landing area or public access area of &#10;75.15   a privately owned public use airport<ins>; or (5) land with a commercial aggregate deposit that </ins>&#10;75.16   <ins>is not actively being mined and is not otherwise classified as class 2a or 2b, clauses (1) to </ins>&#10;75.17   <ins>(3)</ins>. Class 2b property has a net class rate of one percent of market value.&#10;75.18   (c) Agricultural land as used in this section means contiguous acreage of ten &#10;75.19   acres or more, used during the preceding year for agricultural purposes. "Agricultural &#10;75.20   purposes" as used in this section means the raising or cultivation of agricultural products. &#10;75.21   "Agricultural purposes" also includes enrollment in the Reinvest in Minnesota program &#10;75.22   under sections  103F.501 to  103F.535<ins>, the native prairie bank under section 84.96, </ins> or the &#10;75.23   federal Conservation Reserve Program as contained in Public Law 99-198 if the property &#10;75.24   was classified as agricultural (i) under this subdivision for the assessment year 2002 or (ii) &#10;75.25   in the year prior to its enrollment. Contiguous acreage on the same parcel, or contiguous &#10;75.26   acreage on an immediately adjacent parcel under the same ownership, may also qualify &#10;75.27   as agricultural land, but only if it is pasture, timber, waste, unusable wild land, or land &#10;75.28   included in state or federal farm programs. Agricultural classification for property shall be &#10;75.29   determined excluding the house, garage, and immediately surrounding one acre of land, &#10;75.30   and shall not be based upon the market value of any residential structures on the parcel or &#10;75.31   contiguous parcels under the same ownership. &#10;75.32   (d) Real estate, excluding the house, garage, and immediately surrounding one acre &#10;75.33   of land, of less than ten acres which is exclusively and intensively used for raising or &#10;75.34   cultivating agricultural products, shall be considered as agricultural land.&#10;75.35   Land shall be classified as agricultural even if all or a portion of the agricultural use &#10;75.36   of that property is the leasing to, or use by another person for agricultural purposes.&#10;76.1    Classification under this subdivision is not determinative for qualifying under &#10;76.2    section  273.111. &#10;76.3    The property classification under this section supersedes, for property tax purposes &#10;76.4    only, any locally administered agricultural policies or land use restrictions that define &#10;76.5    minimum or maximum farm acreage.&#10;76.6    (e) The term "agricultural products" as used in this subdivision includes production &#10;76.7    for sale of:&#10;76.8    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing &#10;76.9    animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, &#10;76.10   bees, and apiary products by the owner;&#10;76.11   (2) fish bred for sale and consumption if the fish breeding occurs on land zoned &#10;76.12   for agricultural use;&#10;76.13   (3) the commercial boarding of horses if the boarding is done in conjunction with &#10;76.14   raising or cultivating agricultural products as defined in clause (1);&#10;76.15   (4) property which is owned and operated by nonprofit organizations used for &#10;76.16   equestrian activities, excluding racing;&#10;76.17   (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed &#10;76.18   under section  97A.115; &#10;76.19   (6) insects primarily bred to be used as food for animals;&#10;76.20   (7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood &#10;76.21   products<ins>, except that short rotation woody crops that are cultivated using agricultural </ins>&#10;76.22   <ins>practices to produce timber or forest products are agricultural products</ins>; and&#10;76.23   (8) maple syrup taken from trees grown by a person licensed by the Minnesota &#10;76.24   Department of Agriculture under chapter 28A as a food processor.&#10;76.25   (f) If a parcel used for agricultural purposes is also used for commercial or industrial &#10;76.26   purposes, including but not limited to:&#10;76.27   (1) wholesale and retail sales;&#10;76.28   (2) processing of raw agricultural products or other goods;&#10;76.29   (3) warehousing or storage of processed goods; and&#10;76.30   (4) office facilities for the support of the activities enumerated in clauses (1), (2), &#10;76.31   and (3),&#10;76.32   the assessor shall classify the part of the parcel used for agricultural purposes as class &#10;76.33   1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its &#10;76.34   use. The grading, sorting, and packaging of raw agricultural products for first sale is &#10;76.35   considered an agricultural purpose. A greenhouse or other building where horticultural &#10;76.36   or nursery products are grown that is also used for the conduct of retail sales must be &#10;77.1    classified as agricultural if it is primarily used for the growing of horticultural or nursery &#10;77.2    products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of &#10;77.3    those products. Use of a greenhouse or building only for the display of already grown &#10;77.4    horticultural or nursery products does not qualify as an agricultural purpose.&#10;77.5    The assessor shall determine and list separately on the records the market value of &#10;77.6    the homestead dwelling and the one acre of land on which that dwelling is located. If any &#10;77.7    farm buildings or structures are located on this homesteaded acre of land, their market &#10;77.8    value shall not be included in this separate determination.&#10;77.9    (g) To qualify for classification under paragraph (b), clause (4), a privately owned &#10;77.10   public use airport must be licensed as a public airport under section  360.018. For purposes &#10;77.11   of paragraph (b), clause (4), "landing area" means that part of a privately owned public use &#10;77.12   airport properly cleared, regularly maintained, and made available to the public for use by &#10;77.13   aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing &#10;77.14   or navigational aids. A landing area also includes land underlying both the primary surface &#10;77.15   and the approach surfaces that comply with all of the following: &#10;77.16   (i) the land is properly cleared and regularly maintained for the primary purposes of &#10;77.17   the landing, taking off, and taxiing of aircraft; but that portion of the land that contains &#10;77.18   facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;&#10;77.19   (ii) the land is part of the airport property; and&#10;77.20   (iii) the land is not used for commercial or residential purposes.&#10;77.21   The land contained in a landing area under paragraph (b), clause (4), must be described &#10;77.22   and certified by the commissioner of transportation. The certification is effective until &#10;77.23   it is modified, or until the airport or landing area no longer meets the requirements of &#10;77.24   paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area" &#10;77.25   means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival &#10;77.26   and departure building in connection with the airport.&#10;77.27   <ins>(h) To qualify for classification under paragraph (b), clause (5), the property must be </ins>&#10;77.28   <ins>at least ten contiguous acres in size and the owner of the property must record with the </ins>&#10;77.29   <ins>county recorder of the county in which the property is located an affidavit containing:</ins>&#10;77.30   <ins>(1) a legal description of the property;</ins>&#10;77.31   <ins>(2) a disclosure that the property contains a commercial aggregate deposit that is not </ins>&#10;77.32   <ins>actively being mined but is present on the entire parcel enrolled;</ins>&#10;77.33   <ins>(3) documentation that the conditional use under the county or local zoning </ins>&#10;77.34   <ins>ordinance of this property is for mining; and </ins>&#10;77.35   <ins>(4) documentation that a permit has been issued by the local unit of government </ins>&#10;77.36   <ins>or the mining activity is allowed under local ordinance.  The disclosure must include a </ins>&#10;78.1    <ins>statement from a registered professional geologist, engineer, or soil scientist delineating </ins>&#10;78.2    <ins>the deposit and certifying that it is a commercial aggregate deposit.</ins>&#10;78.3    <ins>For purposes of this section and section </ins><ins>273.1115</ins><ins>, "commercial aggregate deposit" </ins>&#10;78.4    <ins>means a deposit that will yield crushed stone or sand and gravel that is suitable for use </ins>&#10;78.5    <ins>as a construction aggregate; and "actively mined" means the removal of top soil and </ins>&#10;78.6    <ins>overburden in preparation for excavation or excavation of a commercial deposit.</ins>&#10;78.7    <ins>(i) When any portion of the property under this subdivision or section </ins><ins>273.13, </ins>&#10;78.8    <ins>subdivision 22</ins><ins>, begins to be actively mined, the owner must file a supplemental affidavit </ins>&#10;78.9    <ins>within 60 days from the day any aggregate is removed stating the number of acres of the </ins>&#10;78.10   <ins>property that is actively being mined.  The acres actively being mined must be (1) valued </ins>&#10;78.11   <ins>and classified under section 273.13, subdivision 24, in the next subsequent assessment </ins>&#10;78.12   <ins>year, and (2) removed from the aggregate resource preservation property tax program </ins>&#10;78.13   <ins>under section </ins><ins>273.1115</ins><ins>, if the land was enrolled in that program.  Copies of the original </ins>&#10;78.14   <ins>affidavit and all supplemental affidavits must be filed with the county assessor, the local </ins>&#10;78.15   <ins>zoning administrator, and the Department of Natural Resources, Division of Land and </ins>&#10;78.16   <ins>Minerals.  A supplemental affidavit must be filed each time a subsequent portion of the </ins>&#10;78.17   <ins>property is actively mined, provided that the minimum acreage change is five acres, even </ins>&#10;78.18   <ins>if the actual mining activity constitutes less than five acres.</ins>&#10;78.19   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes levied in 2006, payable in </ins>&#10;78.20   <ins>2007, and thereafter, except that the provisions relating to land with aggregate deposits is </ins>&#10;78.21   <ins>effective for taxes levied in 2007, payable in 2008, and thereafter.</ins>&#10;&#10;<a id="go.5.19.0"></a>78.22       Sec. 19. <ins><b>[273.323] EFFECTIVE DATE FOR RULES FOR VALUATION OF </b></ins>&#10;78.23   <ins><b>ELECTRIC AND TRANSMISSION PIPELINE UTILITY PROPERTY.</b></ins>&#10;78.24   <ins>Rules adopted by the commissioner of revenue that prescribe the method of valuing </ins>&#10;78.25   <ins>property of electric and transmission pipeline utilities may not take effect before the end </ins>&#10;78.26   <ins>of the regular legislative session in the calendar year following adoption of the rules.</ins>&#10;78.27   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.5.20.0"></a>78.28       Sec. 20. Minnesota Statutes 2005 Supplement, section 276.04, subdivision 2, is &#10;78.29   amended to read:&#10;78.30       Subd. 2. <b>Contents of tax statements.</b> (a) The treasurer shall provide for the &#10;78.31   printing of the tax statements. The commissioner of revenue shall prescribe the form &#10;78.32   of the property tax statement and its contents. The statement must contain a tabulated &#10;78.33   statement of the dollar amount due to each taxing authority and the amount of the state &#10;79.1    tax from the parcel of real property for which a particular tax statement is prepared. The &#10;79.2    dollar amounts attributable to the county, the state tax, the voter approved school tax, the &#10;79.3    other local school tax, the township or municipality, and the total of the metropolitan &#10;79.4    special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must &#10;79.5    be separately stated. The amounts due all other special taxing districts, if any, may be &#10;79.6    aggregated except that any levies made by the regional rail authorities in the county of &#10;79.7    Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A &#10;79.8    shall be listed on a separate line directly under the appropriate county's levy. If the county &#10;79.9    levy under this paragraph includes an amount for a lake improvement district as defined &#10;79.10   under sections 103B.501 to 103B.581, the amount attributable for that purpose must be &#10;79.11   separately stated from the remaining county levy amount. In the case of Ramsey County, &#10;79.12   if the county levy under this paragraph includes an amount for public library service &#10;79.13   under section 134.07, the amount attributable for that purpose may be separated from the &#10;79.14   remaining county levy amount. The amount of the tax on homesteads qualifying under the &#10;79.15   senior citizens' property tax deferral program under chapter 290B is the total amount of &#10;79.16   property tax before subtraction of the deferred property tax amount. The amount of the &#10;79.17   tax on contamination value imposed under sections 270.91 to 270.98, if any, must also &#10;79.18   be separately stated. The dollar amounts, including the dollar amount of any special &#10;79.19   assessments, may be rounded to the nearest even whole dollar. For purposes of this section &#10;79.20   whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar. &#10;79.21   The amount of market value excluded under section 273.11, subdivision 16, if any, must &#10;79.22   also be listed on the tax statement.&#10;79.23   (b) The property tax statements for manufactured homes and sectional structures &#10;79.24   taxed as personal property shall contain the same information that is required on the &#10;79.25   tax statements for real property.&#10;79.26   (c) Real and personal property tax statements must contain the following information &#10;79.27   in the order given in this paragraph. The information must contain the current year tax &#10;79.28   information in the right column with the corresponding information for the previous year &#10;79.29   in a column on the left:&#10;79.30   (1) the property's estimated market value under section 273.11, subdivision 1;&#10;79.31   (2) the property's taxable market value after reductions under section 273.11, &#10;79.32   subdivisions 1a and 16;&#10;79.33   (3) the property's gross tax, calculated by adding the property's total property tax to &#10;79.34   the sum of the aids enumerated in clause (4);&#10;79.35   (4) a total of the following aids:&#10;80.1    (i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C, &#10;80.2    and 127A;&#10;80.3    (ii) local government aids for cities, towns, and counties under sections 477A.011 to &#10;80.4    477A.04; and&#10;80.5    (iii) disparity reduction aid under section 273.1398;&#10;80.6    (5) for homestead residential and agricultural properties, the credits under section &#10;80.7    273.1384;&#10;80.8    (6) any credits received under sections 273.119; 273.123; 273.135; 273.1391; &#10;80.9    273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received &#10;80.10   under section 273.135 must be separately stated and identified as "taconite tax relief"; and&#10;80.11   (7) the net tax payable in the manner required in paragraph (a).&#10;80.12   (d) If the county uses envelopes for mailing property tax statements and if the county &#10;80.13   agrees, a taxing district may include a notice with the property tax statement notifying &#10;80.14   taxpayers when the taxing district will begin its budget deliberations for the current &#10;80.15   year, and encouraging taxpayers to attend the hearings. If the county allows notices to &#10;80.16   be included in the envelope containing the property tax statement, and if more than &#10;80.17   one taxing district relative to a given property decides to include a notice with the tax &#10;80.18   statement, the county treasurer or auditor must coordinate the process and may combine &#10;80.19   the information on a single announcement.&#10;80.20   The commissioner of revenue shall certify to the county auditor the actual or &#10;80.21   estimated aids enumerated in paragraph (c), clause (4), that local governments will receive &#10;80.22   in the following year. The commissioner must certify this amount by January 1 of each &#10;80.23   year.&#10;80.24   <ins>(e) A notice must be printed on the front side of the property tax statement for </ins>&#10;80.25   <ins>homestead property stating that if the total property tax has increased over the previous </ins>&#10;80.26   <ins>year's tax by more than the threshold percentage in section 290A.04, subdivision 2h, </ins>&#10;80.27   <ins>the taxpayer may be eligible, regardless of income, for a special property tax refund </ins>&#10;80.28   <ins>from the state.</ins>&#10;80.29   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for property tax statements prepared </ins>&#10;80.30   <ins>in 2006, for property taxes payable in 2007 and thereafter.</ins>&#10;&#10;<a id="go.5.21.0"></a>80.31       Sec. 21. Minnesota Statutes 2004, section 469.1813, subdivision 1, is amended to read:&#10;80.32       Subdivision 1. <b>Authority.</b> The governing body of a political subdivision may grant &#10;80.33   <del>an</del><ins> a current or prospective</ins> abatement<ins>, by contract or otherwise,</ins> of the taxes imposed by &#10;80.34   the political subdivision on a parcel of property, <ins>which may include personal property </ins>&#10;81.1    <ins>and machinery, </ins>or defer the payments of the taxes and abate the interest and penalty &#10;81.2    that otherwise would apply, if:&#10;81.3    <del>(a)</del> <ins>(1) </ins>it expects the benefits to the political subdivision of the proposed abatement &#10;81.4    agreement to at least equal the costs to the political subdivision of the proposed agreement &#10;81.5    or intends the abatement to phase in a property tax increase, as provided in clause (b)(7); &#10;81.6    and&#10;81.7    <del>(b)</del> <ins>(2) </ins>it finds that doing so is in the public interest because it will:&#10;81.8    <del>(1)</del> <ins>(i) </ins>increase or preserve tax base;&#10;81.9    <del>(2)</del> <ins>(ii) </ins>provide employment opportunities in the political subdivision;&#10;81.10   <del>(3)</del> <ins>(iii) </ins>provide or help acquire or construct public facilities;&#10;81.11   <del>(4)</del> <ins>(iv) </ins>help redevelop or renew blighted areas;&#10;81.12   <del>(5)</del> <ins>(v) </ins>help provide access to services for residents of the political subdivision;&#10;81.13   <del>(6)</del> <ins>(vi) </ins>finance or provide public infrastructure; <del>or</del>&#10;81.14   <del>(7)</del> <ins>(vii) </ins>phase in a property tax increase on the parcel resulting from an increase of &#10;81.15   50 percent or more in one year on the estimated market value of the parcel, other than &#10;81.16   increase attributable to improvement of the parcel<ins>; or</ins>&#10;81.17   <ins>(viii) stabilize the tax base through equalization of property tax revenues for a </ins>&#10;81.18   <ins>specified period of time with respect to a taxpayer whose real and personal property is </ins>&#10;81.19   <ins>subject to valuation under Minnesota Rules, chapter 8100</ins>.&#10;&#10;<a id="go.5.22.0"></a>81.20       Sec. 22. Minnesota Statutes 2005 Supplement, section 469.1813, subdivision 6, &#10;81.21   is amended to read:&#10;81.22       Subd. 6. <b>Duration limit.</b> (a) A political subdivision may grant an abatement for a &#10;81.23   period no longer than 15 years, except as provided under paragraph (b). <ins>The abatement </ins>&#10;81.24   <ins>period will commence in the first year in which the abatement granted is either paid or </ins>&#10;81.25   <ins>retained in accordance with section 469.1815, subdivision 2. </ins>The subdivision may specify &#10;81.26   in the abatement resolution a shorter duration. If the resolution does not specify a period &#10;81.27   of time, the abatement is for eight years. If an abatement has been granted to a parcel of &#10;81.28   property and the period of the abatement has expired, the political subdivision that granted &#10;81.29   the abatement may not grant another abatement for eight years after the expiration of the &#10;81.30   first abatement. This prohibition does not apply to improvements added after and not &#10;81.31   subject to the first abatement.<ins> Economic abatement agreements for real and personal </ins>&#10;81.32   <ins>property subject to valuation under Minnesota Rules, chapter 8100, are not subject to this </ins>&#10;81.33   <ins>prohibition and may be granted successively.</ins>&#10;81.34   (b) A political subdivision proposing to abate taxes for a parcel may request, in &#10;81.35   writing, that the other political subdivisions in which the parcel is located grant an &#10;82.1    abatement for the property. If one of the other political subdivisions declines, in writing, &#10;82.2    to grant an abatement or if 90 days pass after receipt of the request to grant an abatement &#10;82.3    without a written response from one of the political subdivisions, the duration limit &#10;82.4    for an abatement for the parcel by the requesting political subdivision and any other &#10;82.5    participating political subdivision is increased to 20 years. If the political subdivision &#10;82.6    which declined to grant an abatement later grants an abatement for the parcel, the 20-year &#10;82.7    duration limit is reduced by one year for each year that the declining political subdivision &#10;82.8    grants an abatement for the parcel during the period of the abatement granted by the &#10;82.9    requesting political subdivision. The duration limit may not be reduced below the limit &#10;82.10   under paragraph (a).&#10;&#10;<a id="go.5.23.0"></a>82.11       Sec. 23. Minnesota Statutes 2004, section 469.1813, subdivision 6b, is amended to &#10;82.12   read:&#10;82.13       Subd. 6b. <b>Extended duration limit.</b> (a) Notwithstanding the provisions of &#10;82.14   subdivision 6, a political subdivision may grant an abatement for a period of up to 20 &#10;82.15   years, if the abatement is for a qualified business.&#10;82.16   (b) To be a qualified business for purposes of this subdivision, at least 50 percent of &#10;82.17   the payroll of the operations of the business that qualify for the abatement must be for &#10;82.18   employees engaged in one of the following lines of business or any combination of them:&#10;82.19   (1) manufacturing;&#10;82.20   (2) agricultural processing;&#10;82.21   (3) mining;&#10;82.22   (4) research and development;&#10;82.23   (5) warehousing; or&#10;82.24   (6) qualified high technology.&#10;82.25   <ins>Alternatively, a qualified business also includes a taxpayer whose real and personal </ins>&#10;82.26   <ins>property is subject to valuation under Minnesota Rules, chapter 8100.</ins>&#10;82.27   (c)(1) "Manufacturing" means the material staging and production of tangible &#10;82.28   personal property by procedures commonly regarded as manufacturing, processing, &#10;82.29   fabrication, or assembling which changes some existing material into new shapes, new &#10;82.30   qualities, or new combinations.&#10;82.31   (2) "Mining" has the meaning given in section 613(c) of the Internal Revenue Code &#10;82.32   of 1986.&#10;82.33   (3) "Agricultural processing" means transforming, packaging, sorting, or grading &#10;82.34   livestock or livestock products, agricultural commodities, or plants or plant products into &#10;82.35   goods that are used for intermediate or final consumption including goods for nonfood use.&#10;83.1    (4) "Research and development" means qualified research as defined in section &#10;83.2    41(d) of the Internal Revenue Code of 1986.&#10;83.3    (5) "Qualified high technology" means one or more of the following activities:&#10;83.4    (i) advanced computing, which is any technology used in the design and &#10;83.5    development of any of the following:&#10;83.6    (A) computer hardware and software;&#10;83.7    (B) data communications; and&#10;83.8    (C) information technologies;&#10;83.9    (ii) advanced materials, which are materials with engineered properties created &#10;83.10   through the development of specialized process and synthesis technology;&#10;83.11   (iii) biotechnology, which is any technology that uses living organisms, cells, &#10;83.12   macromolecules, microorganisms, or substances from living organisms to make or modify &#10;83.13   a product, improve plants or animals, or develop microorganisms for useful purposes;&#10;83.14   (iv) electronic device technology, which is any technology that involves &#10;83.15   microelectronics, semiconductors, electronic equipment, and instrumentation, radio &#10;83.16   frequency, microwave, and millimeter electronics, and optical and optic-electrical devices, &#10;83.17   or data and digital communications and imaging devices;&#10;83.18   (v) engineering or laboratory testing related to the development of a product;&#10;83.19   (vi) technology that assists in the assessment or prevention of threats or damage to &#10;83.20   human health or the environment, including, but not limited to, environmental cleanup &#10;83.21   technology, pollution prevention technology, or development of alternative energy sources;&#10;83.22   (vii) medical device technology, which is any technology that involves medical &#10;83.23   equipment or products other than a pharmaceutical product that has therapeutic or &#10;83.24   diagnostic value and is regulated; or&#10;83.25   (viii) advanced vehicles technology which is any technology that involves electric &#10;83.26   vehicles, hybrid vehicles, or alternative fuel vehicles, or components used in the &#10;83.27   construction of electric vehicles, hybrid vehicles, or alternative fuel vehicles. An electric &#10;83.28   vehicle is a road vehicle that draws propulsion energy only from an on-board source of &#10;83.29   electrical energy. A hybrid vehicle is a road vehicle that can draw propulsion energy from &#10;83.30   both a consumable fuel and a rechargeable energy storage system.&#10;83.31   (d) The authority to grant new abatements under this subdivision expires on July 1, &#10;83.32   2004<ins>, except that the authority to grant new abatements for real and personal property </ins>&#10;83.33   <ins>subject to valuation under Minnesota Rules, chapter 8100, does not expire</ins>.&#10;&#10;<a id="go.5.24.0"></a>83.34       Sec. 24. Minnesota Statutes 2004, section 469.1813, subdivision 8, is amended to read:&#10;84.1        Subd. 8. <b>Limitation on abatements.</b> In any year, the total amount of property taxes &#10;84.2    abated by a political subdivision under this section may not exceed (1) ten percent of &#10;84.3    the current levy, or (2) $200,000, whichever is greater. The limit under this subdivision &#10;84.4    does not apply to<ins>:</ins>&#10;84.5    <ins>(1)</ins> an uncollected abatement from a prior year that is added to the abatement levy<ins>; or</ins>&#10;84.6    <ins>(2) a taxpayer whose real and personal property is subject to valuation under </ins>&#10;84.7    <ins>Minnesota Rules, chapter 8100</ins>.&#10;&#10;<a id="go.5.25.0"></a>84.8        Sec. 25. Minnesota Statutes 2004, section 469.1813, subdivision 9, is amended to read:&#10;84.9        Subd. 9. <b>Consent of property owner not required.</b> A political subdivision may &#10;84.10   abate the taxes on a parcel under sections  469.1812 to  469.1815 without obtaining the &#10;84.11   consent of the property owner.<ins> This subdivision does not apply to abatements granted to a </ins>&#10;84.12   <ins>taxpayer whose real and personal property is valued under Minnesota Rules, chapter 8100.</ins> &#10;&#10;<a id="go.5.26.0"></a>84.13       Sec. 26. Minnesota Statutes 2004, section 469.1813, is amended by adding a &#10;84.14   subdivision to read:&#10;84.15       <ins>Subd. 10.</ins> <ins><b>Applicability to utility properties.</b></ins> <ins>When this statute is applied or </ins>&#10;84.16   <ins>utilized with respect to a taxpayer whose real and personal property is subject to valuation </ins>&#10;84.17   <ins>under Minnesota Rules, chapter 8100, the provisions of this section and sections 469.1814 </ins>&#10;84.18   <ins>and 469.1815 shall apply only to property specified or described in the abatement contract </ins>&#10;84.19   <ins>or agreement.</ins>&#10;&#10;<a id="go.5.27.0"></a>84.20       Sec. 27. Minnesota Statutes 2004, section 473F.08, is amended by adding a subdivision &#10;84.21   to read:&#10;84.22       <ins>Subd. 3c.</ins> <ins><b>Uncompensated care reimbursement.</b></ins> <ins>(a) As used in this subdivision, </ins>&#10;84.23   <ins>the following terms have the meanings given in this paragraph.</ins>&#10;84.24   <ins>(1) "Uncompensated care" means the sum of (i) the amount that would have been </ins>&#10;84.25   <ins>charged by a facility for rendering free or discounted care to persons who cannot afford to </ins>&#10;84.26   <ins>pay and for which the facility did not expect payment and (ii) the amount that had been </ins>&#10;84.27   <ins>charged by a facility for rendering care to persons and billed to that person or a third-party </ins>&#10;84.28   <ins>payer for which the facility expected but did not receive payment. Uncompensated care </ins>&#10;84.29   <ins>does not include contractual write-offs.</ins>&#10;84.30   <ins>(2) A "qualifying hospital" means a hospital in the area that is:</ins>&#10;84.31   <ins>(i) owned or operated by a local unit of government, or formerly owned by a </ins>&#10;84.32   <ins>university or is a private nonprofit hospital that leases its building from the county in </ins>&#10;84.33   <ins>which it is located; and</ins>&#10;85.1    <ins>(ii) has a licensed bed capacity greater than 400.</ins>&#10;85.2    <ins>(b) A county that contains a qualifying hospital is eligible for reimbursement of </ins>&#10;85.3    <ins>that portion of gross charges for uncompensated care determined by multiplying the </ins>&#10;85.4    <ins>hospital's gross charges during the base year by the percentage of uncompensated care </ins>&#10;85.5    <ins>provided by the hospital during the base year minus one-half of one percent of those gross </ins>&#10;85.6    <ins>charges, dividing the result by two, and adjusting the cost by multiplying that result by the </ins>&#10;85.7    <ins>hospital's cost-to-charge ratio during the base year. By July 15, 2007, and each subsequent </ins>&#10;85.8    <ins>year, the county shall notify its county auditor, as well as the administrative auditor, of the </ins>&#10;85.9    <ins>amount of qualifying uncompensated care provided, adjusted to cost using the hospital's </ins>&#10;85.10   <ins>cost-to-charge ratio, during the 12-month period ending on June 30 of the current year.</ins>&#10;85.11   <ins>(c) The amount certified under paragraph (b) shall be certified annually by the </ins>&#10;85.12   <ins>county auditor to the administrative auditor as an addition to the county's areawide levy </ins>&#10;85.13   <ins>under subdivision 5.</ins>&#10;85.14   <ins>(d) The administrative auditor shall pay one-half of the reimbursement to the county </ins>&#10;85.15   <ins>auditor of the county that contains the qualifying hospital on or before June 15 and the </ins>&#10;85.16   <ins>remaining one-half of the reimbursement on or before November 15. The county auditor </ins>&#10;85.17   <ins>receiving the payment shall disburse the reimbursement to the qualifying hospital within </ins>&#10;85.18   <ins>15 days of receipt of the reimbursement.</ins>&#10;85.19   <ins>(e) Prior to the reporting specified in paragraph (b) above, all qualifying hospitals </ins>&#10;85.20   <ins>that participate in this program shall agree upon and implement a common standard for </ins>&#10;85.21   <ins>reporting uncompensated care, and a common standard for determining eligibility for </ins>&#10;85.22   <ins>uncompensated care for all participating hospitals.</ins>&#10;85.23   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for fiscal disparities contribution and </ins>&#10;85.24   <ins>distribution tax capacities for taxes payable in 2008 and 2009 only.</ins>&#10;&#10;<a id="go.5.28.0"></a>85.25       Sec. 28. Laws 2001, First Special Session chapter 5,  article 3, section 8, the effective &#10;85.26   date, as amended by Laws 2005, chapter 151, article 3, section 19, is amended to read:&#10;85.27   [EFFECTIVE DATE.] This section is effective for taxes  levied in 2002, payable in &#10;85.28   2003, <del>through taxes levied in   2009, payable in  2010</del><ins> and thereafter</ins>.  &#10;&#10;<a id="go.5.29.0"></a>85.29       Sec. 29. <ins><b>PROPERTY TAX CERTIFICATION; ROCHESTER SCHOOL </b></ins>&#10;85.30   <ins><b>DISTRICT.</b></ins>&#10;85.31   <ins>Notwithstanding Minnesota Statutes, sections 126C.48 and 275.065, with the </ins>&#10;85.32   <ins>agreement of the school district's home county, Independent School District No. 535, </ins>&#10;85.33   <ins>Rochester, on or before October 8, shall certify to the county auditor the district's proposed </ins>&#10;85.34   <ins>property tax levy for taxes payable in the following year.</ins>&#10;86.1    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes payable in 2007 only.</ins>&#10;&#10;<a id="go.5.30.0"></a>86.2        Sec. 30. <ins><b>LEASE LEVY; ADMINISTRATIVE SPACE, ROCORI AND </b></ins>&#10;86.3    <ins><b>FARIBAULT.</b></ins>&#10;86.4    <ins>Independent School Districts Nos. 656, Faribault, and 750, Rocori, may lease </ins>&#10;86.5    <ins>administrative space under Minnesota Statutes, section 126C.40, subdivision 1, if the </ins>&#10;86.6    <ins>district can demonstrate to the satisfaction of the commissioner of education that the </ins>&#10;86.7    <ins>administrative space is less expensive than instructional space that the district would </ins>&#10;86.8    <ins>otherwise lease. The commissioner must deny this levy authority unless the district </ins>&#10;86.9    <ins>passes a resolution stating its intent to lease instructional space under Minnesota Statutes, </ins>&#10;86.10   <ins>section 126C.40, subdivision 1, if the commissioner does not grant authority under this </ins>&#10;86.11   <ins>section.  The resolution must also certify that a lease of administrative space under this </ins>&#10;86.12   <ins>section is less expensive than the district's proposed instructional lease. Levy authority </ins>&#10;86.13   <ins>under this section shall not exceed the total levy authority under Minnesota Statutes, </ins>&#10;86.14   <ins>section 126C.40, subdivision 1, paragraph (e). </ins>&#10;86.15   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for revenue for taxes payable in 2007.</ins>&#10;&#10;<a id="go.5.31.0"></a>86.16       Sec. 31. <ins><b>MISCELLANEOUS EDUCATION PROPERTY TAX REDUCTION.</b></ins>&#10;86.17   <ins>Notwithstanding Minnesota Statutes, section 126C.10, subdivision 13a, the </ins>&#10;86.18   <ins>commissioner of education shall increase the operating capital equalizing factor under </ins>&#10;86.19   <ins>Minnesota Statutes, section 126C.10, subdivision 13a, to reduce the operating capital levy </ins>&#10;86.20   <ins>by $2,593,000 in fiscal year 2008 and $2,259,000 in fiscal year 2009.</ins>&#10;&#10;<a id="go.6.0.0"></a>86.21                                          <b>ARTICLE 6</b>&#10;86.22                        <b>DEPARTMENT OF REVENUE PROPERTY TAXES AND AIDS</b>&#10;&#10;<a id="go.6.1.0"></a>86.23       Section 1. Minnesota Statutes 2005 Supplement, section 273.13, subdivision 22, &#10;86.24   is amended to read:&#10;86.25       Subd. 22. <b>Class 1.</b> (a) Except as provided in subdivision 23 and in paragraphs (b) &#10;86.26   and (c), real estate which is residential and used for homestead purposes is class 1a. In the &#10;86.27   case of a duplex or triplex in which one of the units is used for homestead purposes, the &#10;86.28   entire property is deemed to be used for homestead purposes. The market value of class 1a &#10;86.29   property must be determined based upon the value of the house, garage, and land.&#10;86.30   The first $500,000 of market value of class 1a property has a net class rate of &#10;86.31   one percent of its market value; and the market value of class 1a property that exceeds &#10;86.32   $500,000 has a class rate of 1.25 percent of its market value.&#10;87.1    (b) Class 1b property includes homestead real estate or homestead manufactured &#10;87.2    homes used for the purposes of a homestead by&#10;87.3    (1) any person who is blind as defined in section 256D.35, or the blind person and &#10;87.4    the blind person's spouse; or&#10;87.5    (2) any person, hereinafter referred to as "veteran," who:&#10;87.6    (i) served in the active military or naval service of the United States; and&#10;87.7    (ii) is entitled to compensation under the laws and regulations of the United States &#10;87.8    for permanent and total service-connected disability due to the loss, or loss of use, by &#10;87.9    reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both &#10;87.10   lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or &#10;87.11   a wheelchair; and&#10;87.12   (iii) has acquired a special housing unit with special fixtures or movable facilities &#10;87.13   made necessary by the nature of the veteran's disability, or the surviving spouse of the &#10;87.14   deceased veteran for as long as the surviving spouse retains the special housing unit &#10;87.15   as a homestead; or&#10;87.16   (3) any person who is permanently and totally disabled.&#10;87.17   Property is classified and assessed under clause (3) only if the government agency or &#10;87.18   income-providing source certifies, upon the request of the homestead occupant, that the &#10;87.19   homestead occupant satisfies the disability requirements of this paragraph.&#10;87.20   Property is classified and assessed pursuant to clause (1) only if the commissioner of &#10;87.21   revenue certifies to the assessor that the homestead occupant satisfies the requirements of &#10;87.22   this paragraph.&#10;87.23   Permanently and totally disabled for the purpose of this subdivision means a &#10;87.24   condition which is permanent in nature and totally incapacitates the person from working &#10;87.25   at an occupation which brings the person an income. The first $32,000 market value of &#10;87.26   class 1b property has a net class rate of .45 percent of its market value. The remaining &#10;87.27   market value of class 1b property has a class rate using the rates for class 1a or class 2a &#10;87.28   property, whichever is appropriate, of similar market value.&#10;87.29   (c) Class 1c property is commercial use real property that abuts a lakeshore line and &#10;87.30   is devoted to temporary and seasonal residential occupancy for recreational purposes but &#10;87.31   not devoted to commercial purposes for more than 250 days in the year preceding the &#10;87.32   year of assessment, and that includes a portion used as a homestead by the owner, which &#10;87.33   includes a dwelling occupied as a homestead by a shareholder of a corporation that owns &#10;87.34   the resort, a partner in a partnership that owns the resort, or a member of a limited liability &#10;87.35   company that owns the resort even if the title to the homestead is held by the corporation, &#10;87.36   partnership, or limited liability company. For purposes of this clause, property is devoted &#10;88.1    to a commercial purpose on a specific day if any portion of the property, excluding the &#10;88.2    portion used exclusively as a homestead, is used for residential occupancy and a fee &#10;88.3    is charged for residential occupancy. The portion of the property used as a homestead &#10;88.4    <del>by the owner has the same class rates as</del> <ins>is </ins>class 1a property under paragraph (a). The &#10;88.5    remainder of the property is classified as follows: the first $500,000 of market value is tier &#10;88.6    I, the next $1,700,000 of market value is tier II, and any remaining market value is tier III. &#10;88.7    The class rates for class 1c are: tier I, 0.55 percent; tier II, 1.0 percent; and tier III, 1.25 &#10;88.8    percent. If a class 1c resort property has any market value in tier III, the entire property &#10;88.9    must meet the requirements of subdivision 25, paragraph (d), clause (1), to qualify for &#10;88.10   class 1c treatment under this paragraph.&#10;88.11   (d) Class 1d property includes structures that meet all of the following criteria:&#10;88.12   (1) the structure is located on property that is classified as agricultural property under &#10;88.13   section 273.13, subdivision 23;&#10;88.14   (2) the structure is occupied exclusively by seasonal farm workers during the time &#10;88.15   when they work on that farm, and the occupants are not charged rent for the privilege of &#10;88.16   occupying the property, provided that use of the structure for storage of farm equipment &#10;88.17   and produce does not disqualify the property from classification under this paragraph;&#10;88.18   (3) the structure meets all applicable health and safety requirements for the &#10;88.19   appropriate season; and&#10;88.20   (4) the structure is not salable as residential property because it does not comply &#10;88.21   with local ordinances relating to location in relation to streets or roads.&#10;88.22   The market value of class 1d property has the same class rates as class 1a property &#10;88.23   under paragraph (a).&#10;88.24   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes payable in 2006 and </ins>&#10;88.25   <ins>thereafter.</ins>&#10;&#10;<a id="go.6.2.0"></a>88.26       Sec. 2. Minnesota Statutes 2005 Supplement, section 273.13, subdivision 25, is &#10;88.27   amended to read:&#10;88.28       Subd. 25. <b>Class 4.</b> (a) Class 4a is residential real estate containing four or more &#10;88.29   units and used or held for use by the owner or by the tenants or lessees of the owner &#10;88.30   as a residence for rental periods of 30 days or more, excluding property qualifying for &#10;88.31   class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other &#10;88.32   than hospitals exempt under section 272.02, and contiguous property used for hospital &#10;88.33   purposes, without regard to whether the property has been platted or subdivided. The &#10;88.34   market value of class 4a property has a class rate of 1.25 percent.&#10;88.35   (b) Class 4b includes:&#10;89.1    (1) residential real estate containing less than four units that does not qualify as class &#10;89.2    4bb, other than seasonal residential recreational property;&#10;89.3    (2) manufactured homes not classified under any other provision;&#10;89.4    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead &#10;89.5    farm classified under subdivision 23, paragraph (b) containing two or three units; and&#10;89.6    (4) unimproved property that is classified residential as determined under subdivision &#10;89.7    33.&#10;89.8    The market value of class 4b property has a class rate of 1.25 percent.&#10;89.9    (c) Class 4bb includes:&#10;89.10   (1) nonhomestead residential real estate containing one unit, other than seasonal &#10;89.11   residential recreational property; and&#10;89.12   (2) a single family dwelling, garage, and surrounding one acre of property on a &#10;89.13   nonhomestead farm classified under subdivision 23, paragraph (b).&#10;89.14   Class 4bb property has the same class rates as class 1a property under subdivision 22.&#10;89.15   Property that has been classified as seasonal residential recreational property at &#10;89.16   any time during which it has been owned by the current owner or spouse of the current &#10;89.17   owner does not qualify for class 4bb.&#10;89.18   (d) Class 4c property includes:&#10;89.19   (1) except as provided in subdivision 22, paragraph (c), real property devoted to &#10;89.20   temporary and seasonal residential occupancy for recreation purposes, including real &#10;89.21   property devoted to temporary and seasonal residential occupancy for recreation purposes &#10;89.22   and not devoted to commercial purposes for more than 250 days in the year preceding &#10;89.23   the year of assessment. For purposes of this clause, property is devoted to a commercial &#10;89.24   purpose on a specific day if any portion of the property is used for residential occupancy, &#10;89.25   and a fee is charged for residential occupancy. In order for a property to be classified as &#10;89.26   class 4c, seasonal residential recreational for commercial purposes, at least 40 percent of &#10;89.27   the annual gross lodging receipts related to the property must be from business conducted &#10;89.28   during 90 consecutive days and either (i) at least 60 percent of all paid bookings by lodging &#10;89.29   guests during the year must be for periods of at least two consecutive nights; or (ii) at least &#10;89.30   20 percent of the annual gross receipts must be from charges for rental of fish houses, &#10;89.31   boats and motors, snowmobiles, downhill or cross-country ski equipment, or charges for &#10;89.32   marina services, launch services, and guide services, or the sale of bait and fishing tackle. &#10;89.33   For purposes of this determination, a paid booking of five or more nights shall be counted &#10;89.34   as two bookings. Class 4c also includes commercial use real property used exclusively &#10;89.35   for recreational purposes in conjunction with class 4c property devoted to temporary &#10;89.36   and seasonal residential occupancy for recreational purposes, up to a total of two acres, &#10;90.1    provided the property is not devoted to commercial recreational use for more than 250 &#10;90.2    days in the year preceding the year of assessment and is located within two miles of the &#10;90.3    class 4c property with which it is used. Owners of real property devoted to temporary and &#10;90.4    seasonal residential occupancy for recreation purposes and all or a portion of which was &#10;90.5    devoted to commercial purposes for not more than 250 days in the year preceding the year &#10;90.6    of assessment desiring classification as class 1c or 4c, must submit a declaration to the &#10;90.7    assessor designating the cabins or units occupied for 250 days or less in the year preceding &#10;90.8    the year of assessment by January 15 of the assessment year. Those cabins or units and a &#10;90.9    proportionate share of the land on which they are located will be designated class 1c or 4c &#10;90.10   as otherwise provided. The remainder of the cabins or units and a proportionate share of &#10;90.11   the land on which they are located will be designated as class 3a. The owner of property &#10;90.12   desiring designation as class 1c or 4c property must provide guest registers or other &#10;90.13   records demonstrating that the units for which class 1c or 4c designation is sought were &#10;90.14   not occupied for more than 250 days in the year preceding the assessment if so requested. &#10;90.15   The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, and (4) other &#10;90.16   nonresidential facility operated on a commercial basis not directly related to temporary and &#10;90.17   seasonal residential occupancy for recreation purposes shall not qualify for class 1c or 4c;&#10;90.18   (2) qualified property used as a golf course if:&#10;90.19   (i) it is open to the public on a daily fee basis. It may charge membership fees or &#10;90.20   dues, but a membership fee may not be required in order to use the property for golfing, &#10;90.21   and its green fees for golfing must be comparable to green fees typically charged by &#10;90.22   municipal courses; and&#10;90.23   (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).&#10;90.24   A structure used as a clubhouse, restaurant, or place of refreshment in conjunction &#10;90.25   with the golf course is classified as class 3a property;&#10;90.26   (3) real property up to a maximum of one acre of land owned by a nonprofit &#10;90.27   community service oriented organization; provided that the property is not used for a &#10;90.28   revenue-producing activity for more than six days in the calendar year preceding the year &#10;90.29   of assessment and the property is not used for residential purposes on either a temporary &#10;90.30   or permanent basis. For purposes of this clause, a "nonprofit community service oriented &#10;90.31   organization" means any corporation, society, association, foundation, or institution &#10;90.32   organized and operated exclusively for charitable, religious, fraternal, civic, or educational &#10;90.33   purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3), &#10;90.34   (10), or (19) of the Internal Revenue Code of 1986, as amended through December 31, &#10;90.35   1990. For purposes of this clause, "revenue-producing activities" shall include but not be &#10;90.36   limited to property or that portion of the property that is used as an on-sale intoxicating &#10;91.1    liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant &#10;91.2    open to the public, bowling alley, a retail store, gambling conducted by organizations &#10;91.3    licensed under chapter 349, an insurance business, or office or other space leased or &#10;91.4    rented to a lessee who conducts a for-profit enterprise on the premises. Any portion of &#10;91.5    the property which is used for revenue-producing activities for more than six days in the &#10;91.6    calendar year preceding the year of assessment shall be assessed as class 3a. The use of &#10;91.7    the property for social events open exclusively to members and their guests for periods of &#10;91.8    less than 24 hours, when an admission is not charged nor any revenues are received by the &#10;91.9    organization shall not be considered a revenue-producing activity;&#10;91.10   (4) postsecondary student housing of not more than one acre of land that is owned by &#10;91.11   a nonprofit corporation organized under chapter 317A and is used exclusively by a student &#10;91.12   cooperative, sorority, or fraternity for on-campus housing or housing located within two &#10;91.13   miles of the border of a college campus;&#10;91.14   (5) manufactured home parks as defined in section 327.14, subdivision 3;&#10;91.15   (6) real property that is actively and exclusively devoted to indoor fitness, health, &#10;91.16   social, recreational, and related uses, is owned and operated by a not-for-profit corporation, &#10;91.17   and is located within the metropolitan area as defined in section 473.121, subdivision 2;&#10;91.18   (7) a leased or privately owned noncommercial aircraft storage hangar not exempt &#10;91.19   under section 272.01, subdivision 2, and the land on which it is located, provided that:&#10;91.20   (i) the land is on an airport owned or operated by a city, town, county, Metropolitan &#10;91.21   Airports Commission, or group thereof; and&#10;91.22   (ii) the land lease, or any ordinance or signed agreement restricting the use of the &#10;91.23   leased premise, prohibits commercial activity performed at the hangar.&#10;91.24   If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must &#10;91.25   be filed by the new owner with the assessor of the county where the property is located &#10;91.26   within 60 days of the sale;&#10;91.27   (8) a privately owned noncommercial aircraft storage hangar not exempt under &#10;91.28   section 272.01, subdivision 2, and the land on which it is located, provided that:&#10;91.29   (i) the land abuts a public airport; and&#10;91.30   (ii) the owner of the aircraft storage hangar provides the assessor with a signed &#10;91.31   agreement restricting the use of the premises, prohibiting commercial use or activity &#10;91.32   performed at the hangar; and&#10;91.33   (9) residential real estate, a portion of which is used by the owner for homestead &#10;91.34   purposes, and that is also a place of lodging, if all of the following criteria are met:&#10;91.35   (i) rooms are provided for rent to transient guests that generally stay for periods &#10;91.36   of 14 or fewer days;&#10;92.1    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated &#10;92.2    in the basic room rate;&#10;92.3    (iii) meals are not provided to the general public except for special events on fewer &#10;92.4    than seven days in the calendar year preceding the year of the assessment; and&#10;92.5    (iv) the owner is the operator of the property.&#10;92.6    The market value subject to the 4c classification under this clause is limited to five rental &#10;92.7    units. Any rental units on the property in excess of five, must be valued and assessed as &#10;92.8    class 3a. The portion of the property used for purposes of a homestead by the owner must &#10;92.9    be classified as class 1a property under subdivision 22.&#10;92.10   Class 4c property has a class rate of 1.5 percent of market value, except that (i) each &#10;92.11   parcel of seasonal residential recreational property not used for commercial purposes has &#10;92.12   the same class rates as class 4bb property, (ii) manufactured home parks assessed under &#10;92.13   clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal &#10;92.14   residential recreational property has a class rate of one percent for the first $500,000 &#10;92.15   of market value, <del>which includes any market value receiving the one percent rate under </del>&#10;92.16   <del>subdivision 22,</del> and 1.25 percent for the remaining market value, (iv) the market value &#10;92.17   of property described in clause (4) has a class rate of one percent, (v) the market value &#10;92.18   of property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that &#10;92.19   portion of the market value of property in clause (9) qualifying for class 4c property &#10;92.20   has a class rate of 1.25 percent.&#10;92.21   (e) Class 4d property is qualifying low-income rental housing certified to the assessor &#10;92.22   by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion &#10;92.23   of the units in the building qualify as low-income rental housing units as certified under &#10;92.24   section 273.128, subdivision 3, only the proportion of qualifying units to the total number &#10;92.25   of units in the building qualify for class 4d. The remaining portion of the building shall be &#10;92.26   classified by the assessor based upon its use. Class 4d also includes the same proportion of &#10;92.27   land as the qualifying low-income rental housing units are to the total units in the building. &#10;92.28   For all properties qualifying as class 4d, the market value determined by the assessor must &#10;92.29   be based on the normal approach to value using normal unrestricted rents.&#10;92.30   Class 4d property has a class rate of 0.75 percent.&#10;92.31   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes payable in 2006 and </ins>&#10;92.32   <ins>subsequent years.</ins>&#10;&#10;<a id="go.6.3.0"></a>92.33       Sec. 3. Minnesota Statutes 2005 Supplement, section 273.1384, subdivision 1, is &#10;92.34   amended to read:&#10;93.1        Subdivision 1. <b>Residential homestead market value credit.</b> Each county auditor &#10;93.2    shall determine a homestead credit for each class 1a, 1b, <del>1c,</del> and 2a homestead property &#10;93.3    within the county equal to 0.4 percent of the first $76,000 of market value of the property &#10;93.4    minus .09 percent of the market value in excess of $76,000. The credit amount may not &#10;93.5    be less than zero. In the case of an agricultural or resort homestead, only the market &#10;93.6    value of the house, garage, and immediately surrounding one acre of land is eligible &#10;93.7    in determining the property's homestead credit. In the case of a property <del>which</del><ins> that</ins> is &#10;93.8    classified as part homestead and part nonhomestead, (i) the credit shall apply only to &#10;93.9    the homestead portion of the property, but (ii) if a portion of a property is classified as &#10;93.10   nonhomestead solely because not all the owners occupy the property,<ins> not all the owners </ins>&#10;93.11   <ins>have qualifying relatives occupying the property,</ins> or solely because <del>both</del><ins> not all the</ins> spouses &#10;93.12   <del>do not</del><ins> of owners</ins> occupy the property, the credit amount shall be initially computed as &#10;93.13   if that nonhomestead portion were also in the homestead class and then prorated to the &#10;93.14   owner-occupant's percentage of ownership <del>or prorated to one-half if both spouses do not </del>&#10;93.15   <del>occupy the property</del>.<ins> For the purpose of this section, when an owner-occupant's spouse </ins>&#10;93.16   <ins>does not occupy the property, the percentage of ownership for the owner-occupant spouse </ins>&#10;93.17   <ins>is one-half of the couple's ownership percentage.</ins>&#10;93.18   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes payable in 2007 and </ins>&#10;93.19   <ins>thereafter.</ins>&#10;&#10;<a id="go.6.4.0"></a>93.20       Sec. 4. Minnesota Statutes 2004, section 273.1384, subdivision 2, is amended to read:&#10;93.21       Subd. 2. <b>Agricultural homestead market value credit.</b> Property classified &#10;93.22   as class 2a agricultural homestead is eligible for an agricultural credit. <ins>The credit is </ins>&#10;93.23   <ins>computed using the property's agricultural credit market value, defined for this purpose </ins>&#10;93.24   <ins>as the property's class 2a market value excluding the market value of the house, garage, </ins>&#10;93.25   <ins>and immediately surrounding one acre of land. </ins>The credit is equal to 0.3 percent of the &#10;93.26   first $115,000 of the property's <ins>agricultural credit </ins>market value<del>. The credit under this </del>&#10;93.27   <del>subdivision is limited to $345 for each homestead. The credit is reduced by</del> <ins> minus </ins>.05 &#10;93.28   percent of the <ins>property's agricultural credit </ins>market value in excess of $115,000, subject to &#10;93.29   a maximum reduction of $115.<ins> In the case of property that is classified in part as class 2a </ins>&#10;93.30   <ins>agricultural homestead and in part as class 2b nonhomestead farm land solely because not </ins>&#10;93.31   <ins>all the owners occupy or farm the property, not all the owners have qualifying relatives </ins>&#10;93.32   <ins>occupying or farming the property, or solely because not all the spouses of owners occupy </ins>&#10;93.33   <ins>the property, the credit must be initially computed as if that nonhomestead agricultural </ins>&#10;93.34   <ins>land was also classified as class 2a agricultural homestead and then prorated to the </ins>&#10;93.35   <ins>owner-occupant's percentage of ownership.</ins>&#10;94.1    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes payable in 2007 and </ins>&#10;94.2    <ins>thereafter.</ins>&#10;&#10;<a id="go.6.5.0"></a>94.3        Sec. 5. Minnesota Statutes 2004, section 273.1398, subdivision 3, is amended to read:&#10;94.4        Subd. 3. <b>Disparity reduction aid.</b> <del>For taxes payable in 2003 and subsequent years,</del> &#10;94.5    The amount of disparity aid certified for each taxing district within each unique taxing &#10;94.6    jurisdiction for taxes payable in the prior year shall be multiplied by the ratio of (1) the &#10;94.7    jurisdiction's tax capacity using the class rates for taxes payable in the year for which aid &#10;94.8    is being computed, to (2) its tax capacity using the class rates for taxes payable in the year &#10;94.9    prior to that for which aid is being computed, both based upon market values for taxes &#10;94.10   payable in the year prior to that for which aid is being computed. <del>For the purposes of this </del>&#10;94.11   <del>aid determination, disparity reduction aid certified for taxes payable in the prior year for </del>&#10;94.12   <del>a taxing entity other than a town or school district is deemed to be county government </del>&#10;94.13   <del>disparity reduction aid. The amount of disparity aid certified to each taxing jurisdiction </del>&#10;94.14   <del>shall be reduced by any reductions required in the current year or permanent reductions </del>&#10;94.15   <del>required in previous years under section  </del><del>477A.0132</del><del>. </del><ins> If the commissioner determines that </ins>&#10;94.16   <ins>insufficient information is available to reasonably and timely calculate the numerator </ins>&#10;94.17   <ins>in this ratio for the first taxes payable year that a class rate change or new class rate is </ins>&#10;94.18   <ins>effective, the commissioner shall omit the effects of that class rate change or new class </ins>&#10;94.19   <ins>rate when calculating this ratio for aid payable in that taxes payable year. For aid payable </ins>&#10;94.20   <ins>in the year following a year for which such omission was made, the commissioner shall </ins>&#10;94.21   <ins>use in the denominator for the class that was changed or created, the tax capacity for taxes </ins>&#10;94.22   <ins>payable two years prior to that in which the aid is payable, based on market values for </ins>&#10;94.23   <ins>taxes payable in the year prior to that for which aid is being computed.</ins>&#10;94.24   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes payable in 2006 and </ins>&#10;94.25   <ins>thereafter.</ins>&#10;&#10;<a id="go.6.6.0"></a>94.26       Sec. 6. Minnesota Statutes 2004, section 281.23, subdivision 9, is amended to read:&#10;94.27       Subd. 9. <b>Certificate.</b> After the time for redemption of any lands shall have expired &#10;94.28   after notice given, as provided in subdivisions 2, 3, 5, and 6, the county auditor shall &#10;94.29   execute a certificate describing the lands, specifying the tax judgment sale at which the &#10;94.30   same were bid in for the state, and stating that the time for redemption thereof has expired &#10;94.31   after notice given as provided by law and that absolute title thereto has vested in the &#10;94.32   state of Minnesota. Such certificate shall be recorded in the office of the county recorder &#10;94.33   <del>and thereafter filed in the office of the county auditor</del>, except that in case of registered &#10;94.34   land such certificate shall be <del>filed</del> <ins>recorded </ins>in the office of the registrar of titles <del>and a </del>&#10;95.1    <del>duplicate filed in the office of the county auditor</del>. Such certificate and the record thereof &#10;95.2    shall be prima facie evidence of the facts therein stated, but failure to execute or record or &#10;95.3    file such certificate shall not affect the validity of any proceedings hereunder respecting &#10;95.4    such lands or the title of the state thereto.&#10;95.5    <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.6.7.0"></a>95.6        Sec. 7. Minnesota Statutes 2005 Supplement, section 284.07, is amended to read:&#10;95.7    <b>284.07 COUNTY AUDITOR'S CERTIFICATE TO BE PRIMA FACIE </b>&#10;95.8    <b>EVIDENCE.</b>&#10;95.9    The county auditor's certificate of forfeiture <del>filed</del> <ins> recorded by the county auditor </ins>&#10;95.10   as provided by section 281.23, subdivision 9, and acts supplemental thereto, or by any &#10;95.11   other law hereafter enacted providing for the recording of such a certificate or a certified &#10;95.12   copy of such certificate or of the record thereof, shall, for all purposes, be prima facie &#10;95.13   evidence that all requirements of the law respecting the taxation and forfeiture of the &#10;95.14   lands therein described were complied with, and that at the date of the certificate absolute &#10;95.15   title to such lands had vested in the state by reason of forfeiture for delinquent taxes, as &#10;95.16   set forth in the certificate.&#10;95.17   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.6.8.0"></a>95.18       Sec. 8. Minnesota Statutes 2004, section 477A.014, subdivision 1, is amended to read:&#10;95.19       Subdivision 1. <b>Calculations and payments.</b> <ins>(a) </ins>The commissioner of revenue &#10;95.20   shall make all necessary calculations and make payments pursuant to sections  477A.013,  &#10;95.21   477A.0132, and  477A.03 directly to the affected taxing authorities annually. In addition, &#10;95.22   the commissioner shall notify the authorities of their aid amounts, as well as the &#10;95.23   computational factors used in making the calculations for their authority, and those &#10;95.24   statewide total figures that are pertinent, before August 1 of the year preceding the aid &#10;95.25   distribution year.&#10;95.26   <ins>(b)</ins> For the purposes of this subdivision, aid is determined for a city or town based &#10;95.27   on its city or town status as of June 30 of the year preceding the aid distribution year. If &#10;95.28   the effective date for a municipal incorporation, consolidation, annexation, detachment, &#10;95.29   dissolution, or township organization is on or before June 30 of the year preceding &#10;95.30   the aid distribution year, such change in boundaries or form of government shall be &#10;95.31   recognized for aid determinations for the aid distribution year. If the effective date for a &#10;95.32   municipal incorporation, consolidation, annexation, detachment, dissolution, or township &#10;95.33   organization is after June 30 of the year preceding the aid distribution year, such change in &#10;96.1    boundaries or form of government shall not be recognized for aid determinations until &#10;96.2    the following year. &#10;96.3    <ins>(c) Changes in boundaries or form of government will only be recognized for the </ins>&#10;96.4    <ins>purposes of this subdivision, to the extent that: (1) changes in market values are included </ins>&#10;96.5    <ins>in market values reported by assessors to the commissioner, and changes in population, </ins>&#10;96.6    <ins>household size, and the road accidents factor are included in their respective certifications </ins>&#10;96.7    <ins>to the commissioner as referenced in section 477A.011, or (2) an annexation information </ins>&#10;96.8    <ins>report as provided in paragraph (d) is received by the commissioner on or before July 15 </ins>&#10;96.9    <ins>of the aid calculation year. Revisions to estimates or data for use in recognizing changes </ins>&#10;96.10   <ins>in boundaries or form of government are not effective for purposes of this subdivision </ins>&#10;96.11   <ins>unless received by the commissioner on or before July 15 of the aid calculation year. </ins>&#10;96.12   <ins>Clerical errors in the certification or use of estimates and data established as of July 15 in </ins>&#10;96.13   <ins>the aid calculation year are subject to correction within the time periods allowed under </ins>&#10;96.14   <ins>subdivision 3.</ins>&#10;96.15   <ins>(d) In the case of an annexation, an annexation information report may be completed </ins>&#10;96.16   <ins>by the annexing jurisdiction and submitted to the commissioner for purposes of this </ins>&#10;96.17   <ins>subdivision if the net tax capacity of annexed area for the assessment year preceding the </ins>&#10;96.18   <ins>effective date of the annexation exceeds five percent of the city's net tax capacity for the </ins>&#10;96.19   <ins>same year. The form and contents of the annexation information report shall be prescribed </ins>&#10;96.20   <ins>by the commissioner. The commissioner shall change the net tax capacity, the population, </ins>&#10;96.21   <ins>the population decline, the commercial industrial percentage, and the transformed </ins>&#10;96.22   <ins>population for the annexing jurisdiction only if the annexation information report provides </ins>&#10;96.23   <ins>data the commissioner determines to be reliable for all of these factors used to compute city </ins>&#10;96.24   <ins>revenue need for the annexing jurisdiction. The commissioner shall adjust the pre-1940 </ins>&#10;96.25   <ins>housing percentage, the road accidents factor, and household size only if the entire area of </ins>&#10;96.26   <ins>an existing city or town is annexed or consolidated and only if reliable data is available for </ins>&#10;96.27   <ins>all of these factors used to compute city revenue need for the annexing jurisdiction.</ins>&#10;96.28   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for aid payable in 2007 and thereafter.</ins>&#10;&#10;<a id="go.7.0.0"></a>96.29                                          <b>ARTICLE 7</b>&#10;96.30                          <b>DEPARTMENT OF REVENUE SALES AND USE TAXES</b>&#10;&#10;<a id="go.7.1.0"></a>96.31       Section 1. Minnesota Statutes 2005 Supplement, section 297A.61, subdivision 3, &#10;96.32   is amended to read:&#10;96.33       Subd. 3. <b>Sale and purchase.</b> (a) "Sale" and "purchase" include, but are not limited &#10;96.34   to, each of the transactions listed in this subdivision.&#10;97.1    (b) Sale and purchase include:&#10;97.2    (1) any transfer of title or possession, or both, of tangible personal property, whether &#10;97.3    absolutely or conditionally, for a consideration in money or by exchange or barter; and&#10;97.4    (2) the leasing of or the granting of a license to use or consume, for a consideration &#10;97.5    in money or by exchange or barter, tangible personal property, other than a manufactured &#10;97.6    home used for residential purposes for a continuous period of 30 days or more.&#10;97.7    (c) Sale and purchase include the production, fabrication, printing, or processing of &#10;97.8    tangible personal property for a consideration for consumers who furnish either directly or &#10;97.9    indirectly the materials used in the production, fabrication, printing, or processing.&#10;97.10   (d) Sale and purchase include the preparing for a consideration of food. &#10;97.11   Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited &#10;97.12   to, the following:&#10;97.13   (1) prepared food sold by the retailer;&#10;97.14   (2) soft drinks;&#10;97.15   (3) candy;&#10;97.16   (4) dietary supplements; and&#10;97.17   (5) all food sold through vending machines.&#10;97.18   (e) A sale and a purchase includes the furnishing for a consideration of electricity, &#10;97.19   gas, water, or steam for use or consumption within this state.&#10;97.20   (f) A sale and a purchase includes the transfer for a consideration of prewritten &#10;97.21   computer software whether delivered electronically, by load and leave, or otherwise.&#10;97.22   (g) A sale and a purchase includes the furnishing for a consideration of the following &#10;97.23   services:&#10;97.24   (1) the privilege of admission to places of amusement, recreational areas, or athletic &#10;97.25   events, and the making available of amusement devices, tanning facilities, reducing &#10;97.26   salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;&#10;97.27   (2) lodging and related services by a hotel, rooming house, resort, campground, &#10;97.28   motel, or trailer camp and the granting of any similar license to use real property in a &#10;97.29   specific facility, other than the renting or leasing of it for a continuous period of 30 days &#10;97.30   or more under an enforceable written agreement that may not be terminated without &#10;97.31   prior notice;&#10;97.32   (3) nonresidential parking services, whether on a contractual, hourly, or other &#10;97.33   periodic basis, except for parking at a meter;&#10;97.34   (4) the granting of membership in a club, association, or other organization if:&#10;98.1    (i) the club, association, or other organization makes available for the use of its &#10;98.2    members sports and athletic facilities, without regard to whether a separate charge is &#10;98.3    assessed for use of the facilities; and&#10;98.4    (ii) use of the sports and athletic facility is not made available to the general public &#10;98.5    on the same basis as it is made available to members.&#10;98.6    Granting of membership means both onetime initiation fees and periodic membership &#10;98.7    dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and &#10;98.8    squash courts; basketball and volleyball facilities; running tracks; exercise equipment; &#10;98.9    swimming pools; and other similar athletic or sports facilities;&#10;98.10   (5) delivery of aggregate materials and concrete block by a third party if the delivery &#10;98.11   would be subject to the sales tax if provided by the seller of the aggregate material or &#10;98.12   concrete block; and&#10;98.13   (6) services as provided in this clause:&#10;98.14   (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, &#10;98.15   and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, &#10;98.16   drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not &#10;98.17   include services provided by coin operated facilities operated by the customer;&#10;98.18   (ii) motor vehicle washing, waxing, and cleaning services, including services &#10;98.19   provided by coin operated facilities operated by the customer, and rustproofing, &#10;98.20   undercoating, and towing of motor vehicles;&#10;98.21   (iii) building and residential cleaning, maintenance, and disinfecting and &#10;98.22   exterminating services;&#10;98.23   (iv) detective, security, burglar, fire alarm, and armored car services; but not &#10;98.24   including services performed within the jurisdiction they serve by off-duty licensed peace &#10;98.25   officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit &#10;98.26   organization for monitoring and electronic surveillance of persons placed on in-home &#10;98.27   detention pursuant to court order or under the direction of the Minnesota Department &#10;98.28   of Corrections;&#10;98.29   (v) pet grooming services;&#10;98.30   (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting &#10;98.31   and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor &#10;98.32   plant care; tree, bush, shrub, and stump removal, except when performed as part of a land &#10;98.33   clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for &#10;98.34   public utility lines. Services performed under a construction contract for the installation of &#10;98.35   shrubbery, plants, sod, trees, bushes, and similar items are not taxable;&#10;99.1    (vii) massages, except when provided by a licensed health care facility or &#10;99.2    professional or upon written referral from a licensed health care facility or professional for &#10;99.3    treatment of illness, injury, or disease; and&#10;99.4    (viii) the furnishing of lodging, board, and care services for animals in kennels and &#10;99.5    other similar arrangements, but excluding veterinary and horse boarding services.&#10;99.6    In applying the provisions of this chapter, the terms "tangible personal property" &#10;99.7    and "<del>sales at</del> retail<ins> sale</ins>" include taxable services listed in clause (6), items (i) to (vi) and &#10;99.8    (viii), and the provision of these taxable services, unless specifically provided otherwise. &#10;99.9    Services performed by an employee for an employer are not taxable. Services performed &#10;99.10   by a partnership or association for another partnership or association are not taxable if one &#10;99.11   of the entities owns or controls more than 80 percent of the voting power of the equity &#10;99.12   interest in the other entity. Services performed between members of an affiliated group of &#10;99.13   corporations are not taxable. For purposes of the preceding sentence, "affiliated group &#10;99.14   of corporations" <del>includes</del> <ins>means </ins>those entities that would be classified as members of an &#10;99.15   affiliated group <ins>as defined </ins>under United States Code, title 26, section 1504, <del>and that are </del>&#10;99.16   <del>eligible to file a consolidated tax return for federal income tax purposes</del><ins> disregarding </ins>&#10;99.17   <ins>the exclusions in section 1504(b)</ins>.&#10;99.18   (h) A sale and a purchase includes the furnishing for a consideration of tangible &#10;99.19   personal property or taxable services by the United States or any of its agencies or &#10;99.20   instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political &#10;99.21   subdivisions.&#10;99.22   (i) A sale and a purchase includes the furnishing for a consideration of &#10;99.23   telecommunications services, including cable television services and direct satellite &#10;99.24   services. Telecommunications services are taxed to the extent allowed under federal law.&#10;99.25   (j) A sale and a purchase includes the furnishing for a consideration of installation if &#10;99.26   the installation charges would be subject to the sales tax if the installation were provided &#10;99.27   by the seller of the item being installed.&#10;99.28   (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer &#10;99.29   to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) &#10;99.30   the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section &#10;99.31   65B.29, subdivision 1, clause (1).&#10;99.32   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.2.0"></a>99.33       Sec. 2. Minnesota Statutes 2004, section 297A.61, subdivision 12, is amended to read:&#10;99.34       Subd. 12. <b>Farm machinery.</b> (a) "Farm machinery" means new or used machinery, &#10;99.35   equipment, implements, accessories, and contrivances used directly and principally in &#10;100.1   agricultural production <ins>of tangible personal property intended to be sold ultimately at </ins>&#10;100.2   <ins>retail </ins>including, but not limited to:&#10;100.3   (1) machinery for the preparation, seeding, or cultivation of soil for growing &#10;100.4   agricultural crops;&#10;100.5   (2) barn cleaners, milking systems, grain dryers, feeding systems including &#10;100.6   stationary feed bunks, and similar installations, whether or not the equipment is installed &#10;100.7   by the seller and becomes part of the real property; and&#10;100.8   (3) irrigation equipment sold for exclusively agricultural use, including pumps, pipe &#10;100.9   fittings, valves, sprinklers, and other equipment necessary to the operation of an irrigation &#10;100.10  system when sold as part of an irrigation system, whether or not the equipment is installed &#10;100.11  by the seller and becomes part of the real property.&#10;100.12  (b) Farm machinery does not include:&#10;100.13  (1) repair or replacement parts;&#10;100.14  (2) tools, shop equipment, grain bins, fencing material, communication equipment, &#10;100.15  and other farm supplies;&#10;100.16  (3) motor vehicles taxed under chapter 297B;&#10;100.17  (4) snowmobiles or snow blowers;&#10;100.18  (5) lawn mowers except those used in the production of sod for sale, or garden-type &#10;100.19  tractors or garden tillers; or&#10;100.20  (6) machinery, equipment, implements, accessories, and contrivances used directly in &#10;100.21  the production of horses not raised for slaughter, fur-bearing animals, or research animals.&#10;100.22  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.3.0"></a>100.23      Sec. 3. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision &#10;100.24  to read:&#10;100.25      <ins>Subd. 16a.</ins> <ins><b>Computer.</b></ins> <ins>"Computer" means an electronic device that accepts </ins>&#10;100.26  <ins>information in digital or similar form and manipulates it for a result based on a sequence </ins>&#10;100.27  <ins>of instructions.</ins>&#10;100.28  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.4.0"></a>100.29      Sec. 4. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision &#10;100.30  to read:&#10;100.31      <ins>Subd. 16b.</ins> <ins><b>Electronic.</b></ins> <ins>"Electronic" means relating to technology having electrical, </ins>&#10;100.32  <ins>digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.</ins>&#10;100.33  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.5.0"></a>101.1       Sec. 5. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision &#10;101.2   to read:&#10;101.3       <ins>Subd. 16c.</ins> <ins><b>Computer software.</b></ins> <ins>"Computer software" means a set of coded </ins>&#10;101.4   <ins>instructions designed to cause a computer or automatic data processing equipment to </ins>&#10;101.5   <ins>perform a task.</ins>&#10;101.6   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.6.0"></a>101.7       Sec. 6. Minnesota Statutes 2004, section 297A.61, subdivision 17, is amended to read:&#10;101.8       Subd. 17. <b>Prewritten computer software.</b> "Prewritten computer software" means &#10;101.9   computer software, including prewritten upgrades, that is not designed and developed by &#10;101.10  the author or other creator to the specifications of a specific purchaser. The combining &#10;101.11  of two or more "prewritten computer software" programs or prewritten portions of the &#10;101.12  programs does not cause the combination to be other than "prewritten computer software." &#10;101.13  "Prewritten computer software" includes software designed and developed by the author &#10;101.14  or other creator to the specifications of a specific purchaser when it is sold to a person &#10;101.15  other than the<ins> specific </ins> purchaser. If a person modifies or enhances computer software &#10;101.16  of which the person is not the author or creator, the person is deemed to be the author &#10;101.17  or creator only of such person's modifications or enhancements. "Prewritten computer &#10;101.18  software" or a prewritten portion of it that is modified or enhanced to any degree, if the &#10;101.19  modification or enhancement is designed and developed to the specifications of a specific &#10;101.20  purchaser, remains "prewritten computer software"; provided, however, that if there is a &#10;101.21  reasonable, separately stated charge or an invoice or other statement of the price given to &#10;101.22  the purchaser for such modification or enhancement, the modification or enhancement &#10;101.23  does not constitute "prewritten computer software." <del>For purposes of this subdivision:</del>&#10;101.24  <del>(1) "computer" means an electronic device that accepts information in digital or </del>&#10;101.25  <del>similar form and manipulates it for a result based on a sequence of instructions;</del>&#10;101.26  <del>(2) "electronic" means relating to technology having electrical, digital, magnetic, </del>&#10;101.27  <del>wireless, optical, electromagnetic, or similar capabilities; and</del>&#10;101.28  <del>(3) "computer software" means a set of coded instructions designed to cause a </del>&#10;101.29  <del>"computer" or automatic data processing equipment to perform a task.</del>&#10;101.30  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.7.0"></a>101.31      Sec. 7. Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision &#10;101.32  to read:&#10;102.1       <ins>Subd. 37.</ins> <ins><b>Logging equipment.</b></ins> <ins>(a) "Logging equipment" means new or used </ins>&#10;102.2   <ins>machinery, equipment, implements, accessories, and contrivances used directly and </ins>&#10;102.3   <ins>principally in the commercial cutting or removal or both of timber or other solid wood </ins>&#10;102.4   <ins>forest products, including, but not limited to:</ins>&#10;102.5   <ins>(1) machinery used for bucking, bunching, debarking, delimbing, felling, forwarding, </ins>&#10;102.6   <ins>loading, piling, skidding, topping, and yarding operations performed on timber; and</ins>&#10;102.7   <ins>(2) chain saws.</ins>&#10;102.8   <ins>(b) Logging equipment does not include:</ins>&#10;102.9   <ins>(1) repair or replacement parts;</ins>&#10;102.10  <ins>(2) tools, shop equipment, communication equipment, and other logging supplies;</ins>&#10;102.11  <ins>(3) motor vehicles taxed under chapter 297B;</ins>&#10;102.12  <ins>(4) snowmobiles, snow blowers, or recreational all-terrain vehicles; or</ins>&#10;102.13  <ins>(5) machinery, equipment, implements, accessories, and contrivances used in the </ins>&#10;102.14  <ins>creation of other commercial wood products for sale to others, including, but not limited </ins>&#10;102.15  <ins>to, milling, planing, carving, wood chipping, or paper manufacturing.</ins>&#10;102.16  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.8.0"></a>102.17      Sec. 8. Minnesota Statutes 2004, section 297A.63, is amended to read:&#10;102.18  <b>297A.63 USE TAXES IMPOSED; RATES.</b>&#10;102.19      Subdivision 1. <b>Use of tangible personal property or taxable services.</b> (a) For the &#10;102.20  privilege of using, storing, distributing, or consuming in Minnesota tangible personal &#10;102.21  property or taxable services purchased for use, storage, distribution, or consumption in &#10;102.22  this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the <del>sales</del> &#10;102.23  <ins>purchase </ins>price of retail sales of the tangible personal property or taxable services at the &#10;102.24  rate of tax imposed under section  297A.62.<ins> A person that purchases property from a </ins>&#10;102.25  <ins>Minnesota retailer and returns the tangible personal property to a point within Minnesota, </ins>&#10;102.26  <ins>except in the course of interstate commerce, after it was delivered outside of Minnesota, </ins>&#10;102.27  <ins>is subject to the use tax.</ins> &#10;102.28  (b) No tax is imposed under paragraph (a) if the tax imposed by section  297A.62 &#10;102.29  was paid on the sales price of the tangible personal property or taxable services. &#10;102.30  (c) No tax is imposed under paragraph (a) if the purchase meets the requirements for &#10;102.31  exemption under section  297A.67, subdivision 21. &#10;102.32      Subd. 2. <b>Use of tangible personal property made from materials.</b> (a) A use tax &#10;102.33  is imposed on a person who manufactures, fabricates, or assembles tangible personal &#10;102.34  property from materials, either within or outside this state and who uses, stores, distributes, &#10;103.1   or consumes the tangible personal property in Minnesota. The tax is imposed on the <del>sales</del> &#10;103.2   <ins>purchase </ins>price of retail sales of the materials contained in the tangible personal property at &#10;103.3   the rate of tax imposed under section  297A.62. &#10;103.4   (b) No tax is imposed under paragraph (a) if the tax imposed by section  297A.62 &#10;103.5   was paid on the sales price of materials contained in the tangible personal property. &#10;103.6   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.9.0"></a>103.7       Sec. 9. Minnesota Statutes 2004, section 297A.668, subdivision 6, is amended to read:&#10;103.8       Subd. 6. <b>Multiple points of use.</b> (a) Notwithstanding the provisions of subdivisions &#10;103.9   2 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the &#10;103.10  time of its purchase of a digital good, computer software delivered electronically, or a &#10;103.11  service that the digital good, computer software delivered electronically, or service will &#10;103.12  be concurrently available for use in more than one <del>taxing</del> jurisdiction shall deliver to &#10;103.13  the seller in conjunction with its purchase a multiple points of use exemption certificate &#10;103.14  disclosing this fact.&#10;103.15  (b) Upon receipt of the multiple points of use exemption certificate, the seller is &#10;103.16  relieved of the obligation to collect, pay, or remit the applicable tax and the purchaser is &#10;103.17  obligated to collect, pay, or remit the applicable tax on a direct pay basis.&#10;103.18  (c) A purchaser delivering the multiple points of use exemption certificate may use &#10;103.19  any reasonable, but consistent and uniform, method of apportionment that is supported by &#10;103.20  the purchaser's business records as they exist at the time of the consummation of the sale.&#10;103.21  (d) The multiple points of use exemption certificate remains in effect for all future &#10;103.22  sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent &#10;103.23  sale's specific apportionment that is governed by the principle of paragraph (c) and the &#10;103.24  facts existing at the time of the sale.&#10;103.25  (e) A holder of a direct pay permit is not required to deliver a multiple points or use &#10;103.26  exemption certificate to the seller. A direct pay permit holder shall follow the provisions &#10;103.27  of paragraph (c) in apportioning the tax due on a digital good, computer software delivered &#10;103.28  electronically, or a service that will be concurrently available for use in more than one &#10;103.29  <del>taxing</del> jurisdiction.&#10;103.30  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.10.0"></a>103.31      Sec. 10. Minnesota Statutes 2004, section 297A.669, subdivision 11, is amended to &#10;103.32  read:&#10;104.1       Subd. 11. <b>Mobile telecommunications service.</b> "Mobile telecommunications &#10;104.2   service," for purposes of this section, means the same as that term is defined in Section &#10;104.3   <del>124(1)</del> <ins> 124(7) </ins>of Public Law 106-252 (Mobile Telecommunications Sourcing Act).&#10;104.4   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.11.0"></a>104.5       Sec. 11. Minnesota Statutes 2004, section 297A.67, subdivision 4, is amended to read:&#10;104.6       Subd. 4. <b>Exempt meals at residential facilities.</b> <del>Meals or</del> <ins>Prepared food, candy, </ins>&#10;104.7   <ins>and soft </ins>drinks served to patients, inmates, or persons residing at hospitals, sanitariums, &#10;104.8   nursing homes, senior citizen homes, and correctional, detention, and detoxification &#10;104.9   facilities are exempt.<ins> Food sold through vending machines is not exempt.</ins>&#10;104.10  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.12.0"></a>104.11      Sec. 12. Minnesota Statutes 2004, section 297A.67, subdivision 5, is amended to read:&#10;104.12      Subd. 5. <b>Exempt meals at schools.</b> <del>Meals and lunches </del><ins>Prepared food, candy, </ins>&#10;104.13  <ins>and soft drinks </ins>served at public and private elementary, middle, or secondary schools as &#10;104.14  defined in section  120A.05 are exempt. <del>Meals and lunches </del><ins> Prepared food, candy, and soft </ins>&#10;104.15  <ins>drinks </ins>served to students at a college, university, or private career school under a board &#10;104.16  contract are exempt. <del>For purposes of this subdivision, "meals and lunches" does not </del>&#10;104.17  <del>include sales from vending machines. </del><ins> Food sold through vending machines is not exempt.</ins>&#10;104.18  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.13.0"></a>104.19      Sec. 13. Minnesota Statutes 2005 Supplement, section 297A.67, subdivision 6, is &#10;104.20  amended to read:&#10;104.21      Subd. 6. <b>Other exempt meals.</b> (a) <del>Meals or</del> <ins>Prepared food, candy, and soft </ins>drinks &#10;104.22  purchased for and served exclusively to individuals who are 60 years of age or over and &#10;104.23  their spouses or to handicapped persons and their spouses by governmental agencies, &#10;104.24  nonprofit organizations, or churches, or pursuant to any program funded in whole or in &#10;104.25  part through United States Code, title 42, sections 3001 through 3045, wherever delivered, &#10;104.26  prepared, or served, are exempt.<ins> Food sold through vending machines is not exempt.</ins>&#10;104.27  (b) <del>Meals or </del><ins>Prepared food, candy, and soft </ins>drinks purchased for and served &#10;104.28  exclusively to children who are less than 14 years of age or disabled children who are less &#10;104.29  than 16 years of age and who are attending a child care or early childhood education &#10;104.30  program, are exempt if they are:&#10;105.1   (1) purchased by a nonprofit child care facility that is exempt under section 297A.70, &#10;105.2   subdivision 4, and that primarily serves families with income of 250 percent or less of &#10;105.3   federal poverty guidelines; and&#10;105.4   (2) prepared at the site of the child care facility.&#10;105.5   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.14.0"></a>105.6       Sec. 14. Minnesota Statutes 2004, section 297A.67, subdivision 14, is amended to read:&#10;105.7       Subd. 14. <del><b>Personal</b></del><b> Computers prescribed for use by school.</b> <del>Personal</del> Computers &#10;105.8   and related computer software sold by a school, college, university, or private career &#10;105.9   school to students who are enrolled at the institutions are exempt if:&#10;105.10  (1) the use of the <del>personal</del> computer, or of a substantially similar model of computer, &#10;105.11  and the related computer software is prescribed by the institution in conjunction with a &#10;105.12  course of study; and&#10;105.13  (2) each student of the institution, or of a unit of the institution in which the student &#10;105.14  is enrolled, is required by the institution to have such a <del>personal</del> computer and related &#10;105.15  software as a condition of enrollment.&#10;105.16  For the purposes of this subdivision, "school" and "private career school" have the &#10;105.17  meanings given in subdivision 13.&#10;105.18  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.15.0"></a>105.19      Sec. 15. Minnesota Statutes 2004, section 297A.67, subdivision 27, is amended to read:&#10;105.20      Subd. 27. <b>Sewing materials.</b> Sewing materials are exempt. For purposes of this &#10;105.21  subdivision "sewing materials" mean fabric, thread, zippers, interfacing, buttons, trim, &#10;105.22  and other items that are usually directly incorporated into the construction of clothing,<ins> as </ins>&#10;105.23  <ins>defined in subdivision 8,</ins> regardless of whether it is actually used for making clothing. &#10;105.24  It does not include batting, foam, or fabric specifically manufactured for arts and craft &#10;105.25  projects, or other materials for craft projects.&#10;105.26  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.16.0"></a>105.27      Sec. 16. Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 37, &#10;105.28  is amended to read:&#10;105.29      Subd. 37. <b>Job opportunity building zones.</b> (a) Purchases of tangible personal &#10;105.30  property or taxable services by a qualified business, as defined in section 469.310, are &#10;105.31  exempt if the property or services are primarily used or consumed in a job opportunity &#10;105.32  building zone designated under section 469.314. For purposes of this subdivision, an aerial &#10;106.1   camera package, including any camera, computer, and navigation device contained in the &#10;106.2   package, that is used in an aircraft that is operated under a Federal Aviation Administration &#10;106.3   Restricted Airworthiness Certificate according to Code of Federal Regulations, title 14, &#10;106.4   part 21, section 21.25(b)(3), relating to aerial surveying, and that is based, maintained, and &#10;106.5   dispatched from a job opportunity building zone, qualifies as primarily used or consumed &#10;106.6   in a job opportunity building zone if the imagery acquired from the aerial camera package &#10;106.7   is returned to the job opportunity building zone for processing. The exemption for an &#10;106.8   aerial camera package is limited <del>to</del> <del>$50,000 in taxes </del><ins> as provided in this subdivision </ins>and &#10;106.9   the tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, &#10;106.10  applied and then refunded in the manner provided in section 297A.75.<ins> The total amount </ins>&#10;106.11  <ins>of the aerial camera package exemption refunded for all taxpayers for all fiscal years is </ins>&#10;106.12  <ins>limited to $50,000 in taxes.</ins>&#10;106.13  (b) Purchase and use of construction materials<del>,</del> <ins>and </ins>supplies<del>, or equipment</del> used or &#10;106.14  consumed in<ins>, and equipment incorporated into, </ins> the construction of improvements to &#10;106.15  real property in a job opportunity building zone are exempt if the improvements after &#10;106.16  completion of construction are to be used in the conduct of a qualified business, as defined &#10;106.17  in section 469.310. This exemption applies regardless of whether the purchases are made &#10;106.18  by the business or a contractor.&#10;106.19  (c) The exemptions under this subdivision apply to a local sales and use tax &#10;106.20  regardless of whether the local sales tax is imposed on the sales taxable as defined under &#10;106.21  this chapter.&#10;106.22  (d) This subdivision applies to sales, if the purchase was made and delivery received &#10;106.23  during the duration of the zone.&#10;106.24  (e) Notwithstanding the restriction in paragraph (a), which requires items purchased &#10;106.25  to be primarily used or consumed in the zone, purchases by a qualified business that is &#10;106.26  an electrical cooperative located in Meeker County of equipment and materials used for &#10;106.27  the generation, transmission, and distribution of electrical energy are exempt under this &#10;106.28  subdivision, except that:&#10;106.29  (1) the exemption for materials and equipment used or consumed outside the zone &#10;106.30  must not exceed $200,000 in taxes<ins> for all taxpayers for all fiscal years</ins>; and&#10;106.31  (2) no sales and use tax exemption is allowed for equipment purchased for resale.&#10;106.32  For purposes of this paragraph, the tax must be imposed and collected as if the rate &#10;106.33  under section 297A.62, subdivision 1, applied and then refunded in the manner provided &#10;106.34  in section 297A.75.&#10;107.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>Paragraphs (a) and (e) are effective for sales and purchases </ins>&#10;107.2   <ins>made on or after August 1, 2005. Paragraph (b) is effective for sales and purchases made </ins>&#10;107.3   <ins>on or after January 1, 2004.</ins>&#10;&#10;<a id="go.7.17.0"></a>107.4       Sec. 17. Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 38, &#10;107.5   is amended to read:&#10;107.6       Subd. 38. <b>Biotechnology and health sciences industry zone.</b> (a) Purchases of &#10;107.7   tangible personal property or taxable services by a qualified business, as defined in section &#10;107.8   469.330, are exempt if the property or services are primarily used or consumed in a &#10;107.9   biotechnology and health sciences industry zone designated under section 469.334.&#10;107.10  (b) Purchase and use of construction materials<del>,</del> <ins>and </ins>supplies<del>, or equipment</del> used &#10;107.11  or consumed in<ins>, and equipment incorporated into, </ins> the construction of improvements &#10;107.12  to real property in a biotechnology and health sciences industry zone are exempt if the &#10;107.13  improvements after completion of construction are to be used in the conduct of a qualified &#10;107.14  business, as defined in section 469.330. This exemption applies regardless of whether the &#10;107.15  purchases are made by the business or a contractor.&#10;107.16  (c) The exemptions under this subdivision apply to a local sales and use tax &#10;107.17  regardless of whether the local sales tax is imposed on the sales taxable as defined under &#10;107.18  this chapter.&#10;107.19  (d)(1) The tax on sales of goods or services exempted under this subdivision are &#10;107.20  imposed and collected as if the applicable rate under section 297A.62 applied. Upon &#10;107.21  application by the purchaser, on forms prescribed by the commissioner, a refund equal &#10;107.22  to the tax paid must be paid to the purchaser. The application must include sufficient &#10;107.23  information to permit the commissioner to verify the sales tax paid and the eligibility of &#10;107.24  the claimant to receive the credit. No more than two applications for refunds may be filed &#10;107.25  under this subdivision in a calendar year. The provisions of section 289A.40 apply to &#10;107.26  the refunds payable under this subdivision.&#10;107.27  (2) The amount required to make the refunds is annually appropriated to the &#10;107.28  commissioner of revenue.&#10;107.29  (3) The aggregate amount refunded to a qualified business must not exceed the &#10;107.30  amount allocated to the qualified business under section 469.335.&#10;107.31  (e) This subdivision applies only to sales made during the duration of the designation &#10;107.32  of the zone.&#10;107.33  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for sales and purchases made on </ins>&#10;107.34  <ins>or after January 1, 2004.</ins>&#10;&#10;<a id="go.7.18.0"></a>108.1       Sec. 18. Minnesota Statutes 2004, section 297A.70, subdivision 2, is amended to read:&#10;108.2       Subd. 2. <b>Sales to government.</b> (a) All sales, except those listed in paragraph (b), &#10;108.3   to the following governments and political subdivisions, or to the listed agencies or &#10;108.4   instrumentalities of governments and political subdivisions, are exempt:&#10;108.5   (1) the United States and its agencies and instrumentalities;&#10;108.6   (2) school districts, the University of Minnesota, state universities, community &#10;108.7   colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts &#10;108.8   Education, and an instrumentality of a political subdivision that is accredited as an &#10;108.9   optional/special function school by the North Central Association of Colleges and Schools;&#10;108.10  (3) hospitals and nursing homes owned and operated by political subdivisions of &#10;108.11  the state of tangible personal property and taxable services used at or by hospitals and &#10;108.12  nursing homes;&#10;108.13  (4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip &#10;108.14  operations provided for in section  473.4051; &#10;108.15  (5) other states or political subdivisions of other states, if the sale would be exempt &#10;108.16  from taxation if it occurred in that state; and&#10;108.17  (6) sales to public libraries, public library systems, multicounty, multitype library &#10;108.18  systems as defined in section  134.001, county law libraries under chapter 134A, state &#10;108.19  agency libraries, the state library under section  480.09, and the Legislative Reference &#10;108.20  Library. &#10;108.21  (b) This exemption does not apply to the sales of the following products and services:&#10;108.22  (1) building, construction, or reconstruction materials purchased by a contractor &#10;108.23  or a subcontractor as a part of a lump-sum contract or similar type of contract with a &#10;108.24  guaranteed maximum price covering both labor and materials for use in the construction, &#10;108.25  alteration, or repair of a building or facility;&#10;108.26  (2) construction materials purchased by tax exempt entities or their contractors to &#10;108.27  be used in constructing buildings or facilities which will not be used principally by the &#10;108.28  tax exempt entities;&#10;108.29  (3) the leasing of a motor vehicle as defined in section  297B.01, subdivision 5, &#10;108.30  except for leases entered into by the United States or its agencies or instrumentalities; or &#10;108.31  (4) <del>meals and</del> lodging as defined under section  297A.61, subdivision 3, <del>paragraphs </del>&#10;108.32  <del>(d) and (g)</del><ins> paragraph (g)</ins>, clause (2), <ins>and prepared food, candy, and soft drinks, </ins>except for &#10;108.33  <del>meals and</del> lodging<ins>, prepared food, candy, and soft drinks </ins> purchased directly by the United &#10;108.34  States or its agencies or instrumentalities. &#10;109.1   (c) As used in this subdivision, "school districts" means public school entities and &#10;109.2   districts of every kind and nature organized under the laws of the state of Minnesota, and &#10;109.3   any instrumentality of a school district, as defined in section  471.59. &#10;109.4   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.19.0"></a>109.5       Sec. 19. Minnesota Statutes 2004, section 297A.70, subdivision 3, is amended to read:&#10;109.6       Subd. 3. <b>Sales of certain goods and services to government.</b> (a) The following &#10;109.7   sales to or use by the specified governments and political subdivisions of the state are &#10;109.8   exempt:&#10;109.9   (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and &#10;109.10  fire apparatus to a political subdivision;&#10;109.11  (2) machinery and equipment, except for motor vehicles, used directly for mixed &#10;109.12  municipal solid waste management services at a solid waste disposal facility as defined in &#10;109.13  section  115A.03, subdivision 10; &#10;109.14  (3) chore and homemaking services to a political subdivision of the state to be &#10;109.15  provided to elderly or disabled individuals;&#10;109.16  (4) telephone services to the Department of Administration that are used to provide &#10;109.17  telecommunications services through the intertechnologies revolving fund;&#10;109.18  (5) firefighter personal protective equipment as defined in paragraph (b), if purchased &#10;109.19  or authorized by and for the use of an organized fire department, fire protection district, or &#10;109.20  fire company regularly charged with the responsibility of providing fire protection to the &#10;109.21  state or a political subdivision;&#10;109.22  (6) bullet-resistant body armor that provides the wearer with ballistic and trauma &#10;109.23  protection, if purchased by a law enforcement agency of the state or a political subdivision &#10;109.24  of the state, or a licensed peace officer, as defined in section  626.84, subdivision 1; &#10;109.25  (7) motor vehicles purchased or leased by political subdivisions of the state if the &#10;109.26  vehicles are exempt from registration under section  168.012, subdivision 1, paragraph (b), &#10;109.27  exempt from taxation under section  473.448, or exempt from the motor vehicle sales tax &#10;109.28  under section  297B.03, clause (12); &#10;109.29  (8) equipment designed to process, dewater, and recycle biosolids for wastewater &#10;109.30  treatment facilities of political subdivisions, and materials incidental to installation of &#10;109.31  that equipment; <del>and</del>&#10;109.32  (9) sales to a town of gravel and of machinery, equipment, and accessories, except &#10;109.33  motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of &#10;109.34  motor vehicles exempt from tax under section  297B.03, clause (10)<del>.</del><ins>; and</ins> &#10;110.1   <ins>(10) the removal of trees, bushes, or shrubs for the construction and maintenance </ins>&#10;110.2   <ins>of roads, trails, or firebreaks when purchased by an agency of the state or a political </ins>&#10;110.3   <ins>subdivision of the state.</ins>&#10;110.4   (b) For purposes of this subdivision, "firefighters personal protective equipment" &#10;110.5   means helmets, including face shields, chin straps, and neck liners; bunker coats and &#10;110.6   pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; &#10;110.7   protective coveralls; goggles; self-contained breathing apparatus; canister filter masks; &#10;110.8   personal alert safety systems; spanner belts; optical or thermal imaging search devices; &#10;110.9   and all safety equipment required by the Occupational Safety and Health Administration.&#10;110.10  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for sales and purchases made after </ins>&#10;110.11  <ins>October 28, 2002, but for sales and purchases made after October 28, 2002, and before </ins>&#10;110.12  <ins>July 15, 2005, no refunds may be claimed under Minnesota Statutes, section 289A.50, for </ins>&#10;110.13  <ins>sales taxes collected and remitted to the state.</ins>&#10;&#10;<a id="go.7.20.0"></a>110.14      Sec. 20. Minnesota Statutes 2004, section 297A.70, subdivision 4, is amended to read:&#10;110.15      Subd. 4. <b>Sales to nonprofit groups.</b> (a) All sales, except those listed in paragraph &#10;110.16  (b), to the following "nonprofit organizations" are exempt:&#10;110.17  (1) a corporation, society, association, foundation, or institution organized and &#10;110.18  operated exclusively for charitable, religious, or educational purposes if the item &#10;110.19  purchased is used in the performance of charitable, religious, or educational functions; and&#10;110.20  (2) any senior citizen group or association of groups that:&#10;110.21  (i) in general limits membership to persons who are either age 55 or older, or &#10;110.22  physically disabled; and&#10;110.23  (ii) is organized and operated exclusively for pleasure, recreation, and other &#10;110.24  nonprofit purposes, no part of the net earnings of which inures to the benefit of any private &#10;110.25  shareholders.&#10;110.26  For purposes of this subdivision, charitable purpose includes the maintenance of a &#10;110.27  cemetery owned by a religious organization.&#10;110.28  (b) This exemption does not apply to the following sales:&#10;110.29  (1) building, construction, or reconstruction materials purchased by a contractor &#10;110.30  or a subcontractor as a part of a lump-sum contract or similar type of contract with a &#10;110.31  guaranteed maximum price covering both labor and materials for use in the construction, &#10;110.32  alteration, or repair of a building or facility;&#10;111.1   (2) construction materials purchased by tax-exempt entities or their contractors to &#10;111.2   be used in constructing buildings or facilities that will not be used principally by the &#10;111.3   tax-exempt entities; and&#10;111.4   (3) <del>meals and</del> lodging as defined under section  297A.61, subdivision 3, <del>paragraphs </del>&#10;111.5   <del>(d) and (g)</del><ins> paragraph (g)</ins>, clause (2)<ins>, and prepared food, candy, and soft drinks</ins>; and &#10;111.6   (4) leasing of a motor vehicle as defined in section  297B.01, subdivision 5, except as &#10;111.7   provided in paragraph (c). &#10;111.8   (c) This exemption applies to the leasing of a motor vehicle as defined in section  &#10;111.9   297B.01, subdivision 5, only if the vehicle is: &#10;111.10  (1) a truck, as defined in section  168.011, a bus, as defined in section  168.011, or a &#10;111.11  passenger automobile, as defined in section  168.011, if the automobile is designed and &#10;111.12  used for carrying more than nine persons including the driver; and &#10;111.13  (2) intended to be used primarily to transport tangible personal property or &#10;111.14  individuals, other than employees, to whom the organization provides service in &#10;111.15  performing its charitable, religious, or educational purpose.&#10;111.16  (d) A limited liability company also qualifies for exemption under this subdivision if &#10;111.17  (1) it consists of a sole member that would qualify for the exemption, and (2) the items &#10;111.18  purchased qualify for the exemption.&#10;111.19  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.21.0"></a>111.20      Sec. 21. Minnesota Statutes 2004, section 297A.70, subdivision 7, is amended to read:&#10;111.21      Subd. 7. <b>Hospitals and outpatient surgical centers.</b> (a) Sales, except for those &#10;111.22  listed in paragraph (c), to a hospital are exempt, if the items purchased are used in &#10;111.23  providing hospital services. For purposes of this subdivision, "hospital" means a hospital &#10;111.24  organized and operated for charitable purposes within the meaning of section 501(c)(3) of &#10;111.25  the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction, &#10;111.26  and "hospital services" are services authorized or required to be performed by a "hospital" &#10;111.27  under chapter 144.&#10;111.28  (b) Sales, except for those listed in paragraph (c), to an outpatient surgical center &#10;111.29  are exempt, if the items purchased are used in providing outpatient surgical services. For &#10;111.30  purposes of this subdivision, "outpatient surgical center" means an outpatient surgical &#10;111.31  center organized and operated for charitable purposes within the meaning of section &#10;111.32  501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other &#10;111.33  jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means: &#10;111.34  (1) services authorized or required to be performed by an outpatient surgical center under &#10;111.35  chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means &#10;112.1   health services furnished to a person whose medical condition is sufficiently acute to &#10;112.2   require treatment unavailable through, or inappropriate to be provided by, a clinic or &#10;112.3   physician's office, but not so acute as to require treatment in a hospital emergency room.&#10;112.4   (c) This exemption does not apply to the following products and services:&#10;112.5   (1) purchases made by a clinic, physician's office, or any other medical facility not &#10;112.6   operating as a hospital or outpatient surgical center, even though the clinic, office, or &#10;112.7   facility may be owned and operated by a hospital or outpatient surgical center;&#10;112.8   (2) sales under section  297A.61, subdivision 3, <del>paragraphs (d) and (g)</del><ins> paragraph </ins>&#10;112.9   <ins>(g)</ins>, clause (2)<ins>, and prepared food, candy, and soft drinks</ins>; &#10;112.10  (3) building and construction materials used in constructing buildings or facilities &#10;112.11  that will not be used principally by the hospital or outpatient surgical center;&#10;112.12  (4) building, construction, or reconstruction materials purchased by a contractor &#10;112.13  or a subcontractor as a part of a lump-sum contract or similar type of contract with a &#10;112.14  guaranteed maximum price covering both labor and materials for use in the construction, &#10;112.15  alteration, or repair of a hospital or outpatient surgical center; or&#10;112.16  (5) the leasing of a motor vehicle as defined in section  297B.01, subdivision 5. &#10;112.17  (d) A limited liability company also qualifies for exemption under this subdivision if &#10;112.18  (1) it consists of a sole member that would qualify for the exemption, and (2) the items &#10;112.19  purchased qualify for the exemption.&#10;112.20  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.22.0"></a>112.21      Sec. 22. Minnesota Statutes 2004, section 297A.70, subdivision 13, is amended to read:&#10;112.22      Subd. 13. <b>Fund-raising sales by or for nonprofit groups.</b> (a) The following &#10;112.23  sales by the specified organizations for fund-raising purposes are exempt, subject to the &#10;112.24  limitations listed in paragraph (b):&#10;112.25  (1) all sales made by an organization that exists solely for the purpose of providing &#10;112.26  educational or social activities for young people primarily age 18 and under;&#10;112.27  (2) all sales made by an organization that is a senior citizen group or association of &#10;112.28  groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized &#10;112.29  and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii) &#10;112.30  no part of its net earnings inures to the benefit of any private shareholders;&#10;112.31  (3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if &#10;112.32  the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization &#10;112.33  under section 501(c)(3) of the Internal Revenue Code; and&#10;113.1   (4) sales of <del>gum,</del> candy<del>, and candy products</del> sold for fund-raising purposes by a &#10;113.2   nonprofit organization that provides educational and social activities primarily for young &#10;113.3   people age 18 and under.&#10;113.4   (b) The exemptions listed in paragraph (a) are limited in the following manner:&#10;113.5   (1) the exemption under paragraph (a), clauses (1) and (2), applies only if the gross &#10;113.6   annual receipts of the organization from fund-raising do not exceed $10,000; and&#10;113.7   (2) the exemption under paragraph (a), clause (1), does not apply if the sales are &#10;113.8   derived from admission charges or from activities for which the money must be deposited &#10;113.9   with the school district treasurer under section  123B.49, subdivision 2, or be recorded in &#10;113.10  the same manner as other revenues or expenditures of the school district under section  &#10;113.11  123B.49, subdivision 4. &#10;113.12  (c) Sales of tangible personal property are exempt if the entire proceeds, less the &#10;113.13  necessary expenses for obtaining the property, will be contributed to a registered combined &#10;113.14  charitable organization described in section  309.501, to be used exclusively for charitable, &#10;113.15  religious, or educational purposes, and the registered combined charitable organization &#10;113.16  has given its written permission for the sale. Sales that occur over a period of more than &#10;113.17  24 days per year are not exempt under this paragraph. &#10;113.18  (d) For purposes of this subdivision, a club, association, or other organization of &#10;113.19  elementary or secondary school students organized for the purpose of carrying on sports, &#10;113.20  educational, or other extracurricular activities is a separate organization from the school &#10;113.21  district or school for purposes of applying the $10,000 limit.&#10;113.22  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.23.0"></a>113.23      Sec. 23. Minnesota Statutes 2004, section 297A.70, subdivision 14, is amended to read:&#10;113.24      Subd. 14. <b>Fund-raising events sponsored by nonprofit groups.</b> (a) Sales of &#10;113.25  tangible personal property at, and admission charges for fund-raising events sponsored &#10;113.26  by, a nonprofit organization are exempt if:&#10;113.27  (1) all gross receipts are recorded as such, in accordance with generally accepted &#10;113.28  accounting practices, on the books of the nonprofit organization; and&#10;113.29  (2) the entire proceeds, less the necessary expenses for the event, will be used &#10;113.30  solely and exclusively for charitable, religious, or educational purposes. Exempt sales &#10;113.31  include the sale of <del>food, meals, and drinks</del> <ins>prepared food, candy, and soft drinks </ins>at the &#10;113.32  fund-raising event.&#10;113.33  (b) This exemption is limited in the following manner:&#10;114.1   (1) it does not apply to admission charges for events involving bingo or other &#10;114.2   gambling activities or to charges for use of amusement devices involving bingo or other &#10;114.3   gambling activities;&#10;114.4   (2) all gross receipts are taxable if the profits are not used solely and exclusively for &#10;114.5   charitable, religious, or educational purposes;&#10;114.6   (3) it does not apply unless the organization keeps a separate accounting record, &#10;114.7   including receipts and disbursements from each fund-raising event that documents all &#10;114.8   deductions from gross receipts with receipts and other records;&#10;114.9   (4) it does not apply to any sale made by or in the name of a nonprofit corporation as &#10;114.10  the active or passive agent of a person that is not a nonprofit corporation;&#10;114.11  (5) all gross receipts are taxable if fund-raising events exceed 24 days per year;&#10;114.12  (6) it does not apply to fund-raising events conducted on premises leased for more &#10;114.13  than five days but less than 30 days; and&#10;114.14  (7) it does not apply if the risk of the event is not borne by the nonprofit organization &#10;114.15  and the benefit to the nonprofit organization is less than the total amount of the state and &#10;114.16  local tax revenues foregone by this exemption.&#10;114.17  (c) For purposes of this subdivision, a "nonprofit organization" means any unit of &#10;114.18  government, corporation, society, association, foundation, or institution organized and &#10;114.19  operated for charitable, religious, educational, civic, fraternal, and senior citizens' or &#10;114.20  veterans' purposes, no part of the net earnings of which inures to the benefit of a private &#10;114.21  individual.&#10;114.22  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.24.0"></a>114.23      Sec. 24. Minnesota Statutes 2004, section 297A.70, subdivision 15, is amended to read:&#10;114.24      Subd. 15. <b>Statewide amateur athletic games.</b> Notwithstanding section  297A.61, &#10;114.25  subdivision 3, or any other provision of this chapter, the gross receipts from the following &#10;114.26  sales made to or by a nonprofit corporation designated by the Minnesota Amateur Sports &#10;114.27  Commission to conduct a series of statewide amateur athletic games and related events, &#10;114.28  workshops, and clinics are exempt: &#10;114.29  (1) sales of tangible personal property to or the storage, use, or other consumption of &#10;114.30  tangible personal property by the nonprofit corporation; and&#10;114.31  (2) sales of tangible personal property, admission charges, and sales of <del>food, </del>&#10;114.32  <del>meals, and drinks</del> <ins>prepared food, candy, and soft drinks </ins>by the nonprofit corporation at &#10;114.33  fund-raising events, athletic events, or athletic facilities.&#10;114.34  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.25.0"></a>115.1       Sec. 25. Minnesota Statutes 2005 Supplement, section 297A.72, subdivision 2, is &#10;115.2   amended to read:&#10;115.3       Subd. 2. <b>Content and form of exemption certificate.</b> An exemption certificate &#10;115.4   must be substantially in the form prescribed by the commissioner and:&#10;115.5   (1) be signed by the purchaser or meet the requirements of section 270C.304;&#10;115.6   (2) bear the name and address of the purchaser;<ins> and</ins>&#10;115.7   (3) indicate the sales tax account number, if any, issued to the purchaser<del>;</del><ins>.</ins>&#10;115.8   <del>(4) indicate the general character of the property sold by the purchaser in the regular </del>&#10;115.9   <del>course of business or the activities carried on by the organization; and</del>&#10;115.10  <del>(5) identify the property purchased.</del>&#10;115.11  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.26.0"></a>115.12      Sec. 26. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 1, is &#10;115.13  amended to read:&#10;115.14      Subdivision 1. <b>Tax collected.</b> The tax on the gross receipts from the sale of the &#10;115.15  following exempt items must be imposed and collected as if the sale were taxable and the &#10;115.16  rate under section 297A.62, subdivision 1, applied. The exempt items include:&#10;115.17  (1) capital equipment exempt under section 297A.68, subdivision 5;&#10;115.18  (2) building materials for an agricultural processing facility exempt under section &#10;115.19  297A.71, subdivision 13;&#10;115.20  (3) building materials for mineral production facilities exempt under section &#10;115.21  297A.71, subdivision 14;&#10;115.22  (4) building materials for correctional facilities under section 297A.71, subdivision &#10;115.23  3;&#10;115.24  (5) building materials used in a residence for disabled veterans exempt under section &#10;115.25  297A.71, subdivision 11;&#10;115.26  (6) elevators and building materials exempt under section 297A.71, subdivision 12;&#10;115.27  (7) building materials for the Long Lake Conservation Center exempt under section &#10;115.28  297A.71, subdivision 17;&#10;115.29  (8) materials, supplies, fixtures, furnishings, and equipment for a county law &#10;115.30  enforcement and family service center under section 297A.71, subdivision 26;&#10;115.31  (9) materials and supplies for qualified low-income housing under section 297A.71, &#10;115.32  subdivision 23; <del>and</del>&#10;115.33  (10) materials, supplies, and equipment for municipal electric utility facilities under &#10;115.34  section 297A.71, subdivision 35<del>.</del><ins>;</ins>&#10;116.1   <ins>(11) equipment and materials used for the generation, transmission, and distribution </ins>&#10;116.2   <ins>of electrical energy and an aerial camera package exempt under section 297A.68, </ins>&#10;116.3   <ins>subdivision 37; and</ins>&#10;116.4   <ins>(12) tangible personal property and taxable services and construction materials, </ins>&#10;116.5   <ins>supplies, and equipment exempt under section 297A.68, subdivision 41.</ins>&#10;116.6   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.27.0"></a>116.7       Sec. 27. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 2, is &#10;116.8   amended to read:&#10;116.9       Subd. 2. <b>Refund; eligible persons.</b> Upon application on forms prescribed by the &#10;116.10  commissioner, a refund equal to the tax paid on the gross receipts of the exempt items &#10;116.11  must be paid to the applicant. Only the following persons may apply for the refund:&#10;116.12  (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;&#10;116.13  (2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental &#10;116.14  subdivision;&#10;116.15  (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits &#10;116.16  provided in United States Code, title 38, chapter 21;&#10;116.17  (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead &#10;116.18  property;&#10;116.19  (5) for subdivision 1, clause (9), the owner of the qualified low-income housing &#10;116.20  project; <del>and</del>&#10;116.21  (6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or &#10;116.22  a joint venture of municipal electric utilities<del>.</del><ins>; and </ins>&#10;116.23  <ins>(7) for subdivision 1, clauses (11) and (12), the owner of the qualifying business.</ins>&#10;116.24  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.28.0"></a>116.25      Sec. 28. Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 3, is &#10;116.26  amended to read:&#10;116.27      Subd. 3. <b>Application.</b> (a) The application must include sufficient information &#10;116.28  to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, &#10;116.29  subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), <del>or</del> (10), &#10;116.30  <ins> (11), or (12), </ins>the contractor, subcontractor, or builder must furnish to the refund applicant &#10;116.31  a statement including the cost of the exempt items and the taxes paid on the items unless &#10;116.32  otherwise specifically provided by this subdivision. The provisions of sections 289A.40 &#10;116.33  and 289A.50 apply to refunds under this section.&#10;117.1   (b) An applicant may not file more than two applications per calendar year for &#10;117.2   refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.&#10;117.3   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.29.0"></a>117.4       Sec. 29. Minnesota Statutes 2005 Supplement, section 297A.815, subdivision 1, &#10;117.5   is amended to read:&#10;117.6       Subdivision 1. <b>Motor vehicle lease price; payment.</b> (a) In the case of a lease of a &#10;117.7   motor vehicle as provided in section 297A.61, subdivision 4, paragraph (k), clause (2), the &#10;117.8   tax is imposed on the total amount to be paid by the lessee under the lease agreement. The &#10;117.9   lessor shall collect the tax in full at the time the lease is executed or, if the tax is included &#10;117.10  in the lease and the lease is assigned, the tax is due from the original lessor at the time the &#10;117.11  lease is assigned. The total amount to be paid by the lessee under the lease agreement &#10;117.12  equals the agreed-upon value of the vehicle less manufacturer's rebates, the stated residual &#10;117.13  value of the leased vehicle, and the total value allowed for a vehicle owned by the lessee &#10;117.14  taken in trade by the lessor, plus the price of any taxable goods and services included in &#10;117.15  the lease and the rent charge as provided by Code of Federal Regulations, title 12, section &#10;117.16  213.4, excluding any rent charge related to the capitalization of the tax.&#10;117.17  (b) If the total amount paid by the lessee for use of the leased vehicle includes &#10;117.18  amounts that are not calculated at the time the lease is executed, the tax is imposed and &#10;117.19  must be collected by the lessor at the time the amounts are paid by the lessee. In the case &#10;117.20  of a lease which by its terms may be renewed, the sales tax is due and payable on the &#10;117.21  total amount to be paid during the initial term of the lease, and then for each subsequent &#10;117.22  renewal period on the total amount to be paid during the renewal period.&#10;117.23  (c) If a lease is canceled or rescinded on or before 90 days of its execution or if a &#10;117.24  vehicle is returned to the manufacturer under section 325F.665, the lessor may file a claim &#10;117.25  for a refund of the total tax paid minus the amount of tax due for the period the vehicle is &#10;117.26  used by the lessee.&#10;117.27  (d) If a lessee's obligation to make payments on a lease is canceled more than 90 &#10;117.28  days after its execution, a credit is allowed against sales tax or motor vehicles sales tax &#10;117.29  due on a subsequent lease or purchase of a motor vehicle if that lease or purchase is &#10;117.30  consummated within 30 days of the date the prior lease was canceled. The amount of the &#10;117.31  credit is equal to (1) the sales tax paid at the inception of the lease, multiplied by (2) &#10;117.32  the ratio of the number of full months remaining in the lease at the time of termination &#10;117.33  compared to the term of the lease used in calculating sales tax paid at the inception of the &#10;117.34  lease.<ins> The credit or any part of it cannot be assigned or transferred to another person.</ins>&#10;118.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for leases entered into after </ins>&#10;118.2   <ins>September 30, 2005.</ins>&#10;&#10;<a id="go.7.30.0"></a>118.3       Sec. 30. Minnesota Statutes 2004, section 297A.99, subdivision 7, is amended to read:&#10;118.4       Subd. 7. <b>Exemptions.</b> (a) All goods or services that are otherwise exempt from &#10;118.5   taxation under this chapter are exempt from a political subdivision's tax.&#10;118.6   (b) <del>The gross receipts from the sale of tangible personal property that meets the </del>&#10;118.7   <del>requirement of section  </del><del>297A.68, subdivision 15</del><del>, are exempt, except the qualification </del>&#10;118.8   <del>test applies based on the boundaries of the political subdivision instead of the state </del>&#10;118.9   <del>of Minnesota.</del> &#10;118.10  <del>(c)</del> All mobile transportation equipment, and parts and accessories attached to or &#10;118.11  to be attached to the equipment are exempt, if purchased by a holder of a motor carrier &#10;118.12  direct pay permit under section  297A.90. &#10;118.13  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.31.0"></a>118.14      Sec. 31. Laws 2005, First Special Session chapter 3, article 5, section 3, the effective &#10;118.15  date, is amended to read:&#10;118.16   &#10;118.17   &#10;118.18  EFFECTIVE DATE. This section is effective for sales and  purchases made after &#10;118.19  October 28, 2002, but for land clearing contracts entered into after October 28, 2002, &#10;118.20  <ins>but before July 15, 2005, </ins>no refunds may be claimed under Minnesota Statutes, section &#10;118.21  289A.50, for sales taxes collected and remitted to the state on the land clearing contracts.  &#10;118.22  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.7.32.0"></a>118.23      Sec. 32. <ins><b> REPEALER.</b></ins>&#10;118.24  <ins>(a)</ins><ins> Minnesota Statutes 2004, section 297A.68, subdivisions 15 and 18,</ins><ins> are repealed.</ins>&#10;118.25  <ins>(b)</ins><ins> Minnesota Rules, parts 8130.0400, subpart 3; 8130.4800, subparts 1, 3, 4, 5, 6, 7, </ins>&#10;118.26  <ins>and 8; 8130.5100; 8130.5400; and 8130.5800, subpart 6,</ins><ins> are repealed.</ins>&#10;118.27  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.8.0.0"></a>119.1                                          <b>ARTICLE 8</b>&#10;119.2                         <b>DEPARTMENT OF REVENUE SPECIAL TAXES AND FEES</b>&#10;&#10;<a id="go.8.1.0"></a>119.3       Section 1. Minnesota Statutes 2005 Supplement, section 115B.49, subdivision 4, is &#10;119.4   amended to read:&#10;119.5       Subd. 4. <b>Registration; fees.</b> (a) The owner or operator of a dry cleaning facility &#10;119.6   shall register on or before October 1 of each year with the commissioner of revenue in &#10;119.7   a manner prescribed by the commissioner of revenue and pay a registration fee for the &#10;119.8   facility. The amount of the fee is:&#10;119.9   (1) $500, for facilities with a full-time equivalence of fewer than five;&#10;119.10  (2) $1,000, for facilities with a full-time equivalence of five to ten; and&#10;119.11  (3) $1,500, for facilities with a full-time equivalence of more than ten.&#10;119.12  <ins>The registration fee must be paid on or before October 18 or the owner or operator </ins>&#10;119.13  <ins>of a dry cleaning facility may elect to pay the fee in equal installments. Installment </ins>&#10;119.14  <ins>payments must be paid on or before October 18, on or before January 18, on or before </ins>&#10;119.15  <ins>April 18, and on or before June 18. All payments made after October 18 bear interest </ins>&#10;119.16  <ins>at the rate specified in section 270C.40.</ins>&#10;119.17  (b) A person who sells dry cleaning solvents for use by dry cleaning facilities in the &#10;119.18  state shall collect and remit to the commissioner of revenue in a manner prescribed by the &#10;119.19  commissioner of revenue, on or before the 20th day of the month following the month in &#10;119.20  which the sales of dry cleaning solvents are made, a fee of:&#10;119.21  (1) $3.50 for each gallon of perchloroethylene sold for use by dry cleaning facilities &#10;119.22  in the state;&#10;119.23  (2) 70 cents for each gallon of hydrocarbon-based dry cleaning solvent sold for use &#10;119.24  by dry cleaning facilities in the state; and&#10;119.25  (3) 35 cents for each gallon of other nonaqueous solvents sold for use by dry &#10;119.26  cleaning facilities in the state.&#10;119.27  (c) The audit, assessment, appeal, collection, enforcement, and administrative &#10;119.28  provisions of chapters 270C and 289A apply to the fee imposed by this subdivision. &#10;119.29  To enforce this subdivision, the commissioner of revenue may grant extensions to file &#10;119.30  returns and pay fees, impose penalties and interest on the annual registration fee under &#10;119.31  paragraph (a) and the monthly fee under paragraph (b), and abate penalties and interest in &#10;119.32  the manner provided in chapters 270C and 289A. The penalties and interest imposed on &#10;119.33  taxes under chapter 297A apply to the fees imposed under this subdivision. Disclosure &#10;119.34  of data collected by the commissioner of revenue under this subdivision is governed by &#10;119.35  chapter 270B.&#10;120.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for returns and payments due on </ins>&#10;120.2   <ins>or after October 1, 2006.</ins>&#10;&#10;<a id="go.8.2.0"></a>120.3       Sec. 2. <ins><b>[287.222] TRANSFER TO OBTAIN FINANCING.</b></ins>&#10;120.4   <ins>The deed tax is $1.65 on a deed or other instrument that transfers real property if </ins>&#10;120.5   <ins>the transfer is (1) to a person who is a builder or contractor, (2) intended to be temporary, </ins>&#10;120.6   <ins>and (3) done solely to enable the builder or contractor to obtain financing to build an </ins>&#10;120.7   <ins>improvement on the conveyed property under a contract for improvement with the grantor </ins>&#10;120.8   <ins>that calls for the conveyed property to be reconveyed to the grantor upon completion of </ins>&#10;120.9   <ins>and payment for the improvement. The deed tax is $1.65 on a deed or other instrument </ins>&#10;120.10  <ins>that transfers the real property back from the builder or contractor to the grantor.</ins>&#10;120.11  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for deeds both executed and recorded </ins>&#10;120.12  <ins>on or after July 1, 2006.</ins>&#10;&#10;<a id="go.8.3.0"></a>120.13      Sec. 3. Minnesota Statutes 2004, section 295.50, subdivision 4, is amended to read:&#10;120.14      Subd. 4. <b>Health care provider.</b> (a) "Health care provider" means:&#10;120.15  (1) a person whose health care occupation is regulated or required to be regulated by &#10;120.16  the state of Minnesota furnishing any or all of the following goods or services directly to a &#10;120.17  patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services, &#10;120.18  drugs, laboratory, diagnostic or therapeutic services;&#10;120.19  (2) a person who provides goods and services not listed in clause (1) that qualify for &#10;120.20  reimbursement under the medical assistance program provided under chapter 256B;&#10;120.21  (3) a staff model health plan company;&#10;120.22  (4) an ambulance service required to be licensed; or&#10;120.23  (5) a person who sells or repairs hearing aids and related equipment or prescription &#10;120.24  eyewear.&#10;120.25  (b) Health care provider does not include:&#10;120.26  (1) hospitals; medical supplies distributors, except as specified under paragraph &#10;120.27  (a), clause (5); nursing homes licensed under chapter 144A or licensed in any other &#10;120.28  jurisdiction; pharmacies; surgical centers; bus and taxicab transportation, or any other &#10;120.29  providers of transportation services other than ambulance services required to be licensed; &#10;120.30  supervised living facilities for persons with mental retardation or related conditions, &#10;120.31  licensed under Minnesota Rules, parts 4665.0100 to 4665.9900; <del>residential care homes </del>&#10;120.32  <del>licensed under chapter 144B;</del><ins> housing with services establishments required to be </ins>&#10;120.33  <ins>registered under chapter 144D;</ins> board and lodging establishments providing only custodial &#10;120.34  services that are licensed under chapter 157 and registered under section  157.17 to &#10;121.1   provide supportive services or health supervision services; adult foster homes as defined &#10;121.2   in Minnesota Rules, part 9555.5105; day training and habilitation services for adults &#10;121.3   with mental retardation and related conditions as defined in section  252.41, subdivision &#10;121.4   3; boarding care homes, as defined in Minnesota Rules, part 4655.0100; and adult day &#10;121.5   care centers as defined in Minnesota Rules, part 9555.9600; &#10;121.6   (2) home health agencies as defined in Minnesota Rules, part 9505.0175, subpart &#10;121.7   15; a person providing personal care services and supervision of personal care services &#10;121.8   as defined in Minnesota Rules, part 9505.0335; a person providing private duty nursing &#10;121.9   services as defined in Minnesota Rules, part 9505.0360; and home care providers required &#10;121.10  to be licensed under chapter 144A;&#10;121.11  (3) a person who employs health care providers solely for the purpose of providing &#10;121.12  patient services to its employees; and&#10;121.13  (4) an educational institution that employs health care providers solely for the &#10;121.14  purpose of providing patient services to its students if the institution does not receive fee &#10;121.15  for service payments or payments for extended coverage.&#10;121.16  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.8.4.0"></a>121.17      Sec. 4. Minnesota Statutes 2004, section 295.53, subdivision 3, is amended to read:&#10;121.18      Subd. 3. <b>Separate statement of tax.</b> A hospital, surgical center, <del>or</del> health care &#10;121.19  provider<ins>, or wholesale drug distributor </ins> must not state the tax obligation under section  &#10;121.20  295.52 in a deceptive or misleading manner. It must not separately state tax obligations &#10;121.21  on bills provided to patients, consumers, or other payers when the amount received for &#10;121.22  the services or goods is not subject to tax. &#10;121.23  Pharmacies that separately state the tax obligations on bills provided to consumers &#10;121.24  or to other payers who purchase legend drugs may state the tax obligation as the wholesale &#10;121.25  price of the legend drugs multiplied by the tax percentage specified in section  295.52. &#10;121.26  Pharmacies must not state the tax obligation based on the retail price. &#10;121.27  Whenever the commissioner determines that a person has engaged in any act or &#10;121.28  practice constituting a violation of this subdivision, the commissioner may bring an action &#10;121.29  in the name of the state in the district court of the appropriate county to enjoin the act &#10;121.30  or practice and to enforce compliance with this subdivision, or the commissioner may &#10;121.31  refer the matter to the attorney general or the county attorney of the appropriate county. &#10;121.32  Upon a proper showing, a permanent or temporary injunction, restraining order, or other &#10;121.33  appropriate relief must be granted.&#10;121.34  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.8.5.0"></a>122.1       Sec. 5. Minnesota Statutes 2004, section 297F.01, is amended by adding a subdivision &#10;122.2   to read:&#10;122.3       <ins>Subd. 22a.</ins> <ins><b>Weighted average retail price.</b></ins> <ins>"Weighted average retail price" means </ins>&#10;122.4   <ins>(1) the average retail price per pack of 20 cigarettes, with the average price weighted by </ins>&#10;122.5   <ins>the number of packs sold at each price, (2) reduced by the sales tax included in the retail </ins>&#10;122.6   <ins>price, and (3) adjusted for the expected inflation from the time of the survey to the average </ins>&#10;122.7   <ins>of the 12 months that the sales tax will be imposed. The commissioner shall make the </ins>&#10;122.8   <ins>inflation adjustment in accordance with the Consumer Price Index for all urban consumers </ins>&#10;122.9   <ins>inflation indicator as published in the most recent state budget forecast. The inflation </ins>&#10;122.10  <ins>factor for the calendar year in which the new tax rate takes effect must be used.</ins>&#10;122.11  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective April 30, 2006.</ins>&#10;&#10;<a id="go.8.6.0"></a>122.12      Sec. 6. Minnesota Statutes 2004, section 297G.01, subdivision 7, is amended to read:&#10;122.13      Subd. 7. <b>Distilled spirits.</b> "Distilled spirits" <del>is</del><ins> means:</ins> &#10;122.14  <ins>(1) </ins>intoxicating liquors, including ethyl alcohol, hydrated oxide of ethyl, spirits of &#10;122.15  wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and &#10;122.16  mixtures, for nonindustrial use<del>.</del><ins>;</ins>&#10;122.17  <ins>(2) any beverage that would be classified as a flavored malt beverage except that the </ins>&#10;122.18  <ins>alcohol contribution from flavors and other nonbeverage materials exceeds 49 percent </ins>&#10;122.19  <ins>of the alcohol content of the product; or </ins>&#10;122.20  <ins>(3) any beverage that would be classified as a flavored malt beverage except that the </ins>&#10;122.21  <ins>beverage contains more than six percent alcohol by volume, and more than 1.5 percent </ins>&#10;122.22  <ins>of the volume of the finished product consists of alcohol derived from flavors and other </ins>&#10;122.23  <ins>nonbeverage ingredients that contain alcohol.</ins>&#10;122.24  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective July 1, 2006.</ins>&#10;&#10;<a id="go.8.7.0"></a>122.25      Sec. 7. Minnesota Statutes 2004, section 297G.01, is amended by adding a subdivision &#10;122.26  to read:&#10;122.27      <ins>Subd. 8a.</ins> <ins><b>Flavored malt beverage.</b></ins> <ins>(a) "Flavored malt beverage" means a </ins>&#10;122.28  <ins>fermented malt beverage that:</ins>&#10;122.29  <ins>(1) contains six percent or less alcohol by volume and derives at least 51 percent of </ins>&#10;122.30  <ins>its alcohol content by volume from the fermentation of grain, as long as not more than 49 </ins>&#10;122.31  <ins>percent of the beverage's overall alcohol content is obtained from flavors and other added </ins>&#10;122.32  <ins>nonbeverage ingredients containing alcohol; or</ins>&#10;123.1   <ins>(2) contains more than six percent alcohol by volume that derives not more than 1.5 </ins>&#10;123.2   <ins>percent of its overall alcohol content by volume from flavors and other added nonbeverage </ins>&#10;123.3   <ins>ingredients containing alcohol.</ins>&#10;123.4   <ins>(b) Flavored malt beverage does not include cider or an alcoholic beverage obtained </ins>&#10;123.5   <ins>primarily by fermentation of rice, such as sake.</ins>&#10;123.6   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective July 1, 2006.</ins>&#10;&#10;<a id="go.9.0.0"></a>123.7                                          <b>ARTICLE 9</b>&#10;123.8                             <b>DEPARTMENT OF REVENUE MISCELLANEOUS</b>&#10;&#10;<a id="go.9.1.0"></a>123.9       Section 1. Minnesota Statutes 2005 Supplement, section 270C.01, subdivision 4, is &#10;123.10  amended to read:&#10;123.11      Subd. 4. <b>Electronic means; electronically.</b> "Electronic means" and "electronically" &#10;123.12  mean a method that is electronic, as defined in section 325L.02, paragraph (e), and that &#10;123.13  is prescribed by the commissioner.<ins> Electronic means includes the use of a touch-tone </ins>&#10;123.14  <ins>telephone to transmit return information in a manner prescribed by the commissioner.</ins>&#10;123.15  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.9.2.0"></a>123.16      Sec. 2. Minnesota Statutes 2005 Supplement, section 270C.304, is amended to read:&#10;123.17  <b>270C.304 ELECTRONICALLY FILED RETURNS; SIGNATURES.</b>&#10;123.18  For purposes of a law administered by the commissioner, the name of the taxpayer, &#10;123.19  the name of the taxpayer's authorized agent, or the taxpayer's identification number, &#10;123.20  will constitute a signature when transmitted as part of the return information on returns &#10;123.21  filed by electronic means by the taxpayer or at the taxpayer's direction. <del>"Electronic </del>&#10;123.22  <del>means" includes, but is not limited to, the use of a touch-tone telephone to transmit return </del>&#10;123.23  <del>information in a manner prescribed by the commissioner.</del>&#10;123.24  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.9.3.0"></a>123.25      Sec. 3. Minnesota Statutes 2005 Supplement, section 270C.33, subdivision 4, is &#10;123.26  amended to read:&#10;123.27      Subd. 4. <b>Orders of assessment.</b> (a) The commissioner may issue an order of &#10;123.28  assessment in any of the following circumstances:&#10;123.29  (1) the commissioner determines that the correct amount of tax is different than that &#10;123.30  assessed on a return filed with the commissioner;&#10;124.1   (2) no return has been filed and the commissioner determines the amount of tax &#10;124.2   that should have been assessed;&#10;124.3   (3) the commissioner determines that the correct amount of a refundable credit &#10;124.4   is different than the amount claimed by a taxpayer. For purposes of this subdivision, &#10;124.5   "refundable credit" means a refund benefit or credit due a person that is unrelated to the &#10;124.6   person's liability for a tax. "Refundable credit" does not include estimated tax payments &#10;124.7   or withholding taxes. An assessment for an overpayment of a refundable credit may be &#10;124.8   collected in the same manner as a tax collected by the commissioner; <del>and</del>&#10;124.9   (4) the commissioner determines the correct amount of a tax that the taxpayer is not &#10;124.10  required to assess by a return filed with the commissioner<del>.</del><ins>; and</ins>&#10;124.11  <ins>(5) the commissioner determines that a penalty other than a penalty for late payment </ins>&#10;124.12  <ins>of tax, late filing of a return, or failure to pay tax by electronic means should be imposed, </ins>&#10;124.13  <ins>and the penalty is not included on an order of assessment made under clauses (1) to (4).</ins>&#10;124.14  (b) An order of assessment must be in writing.&#10;124.15  (c) An order of assessment must be signed by the commissioner or a delegate, or &#10;124.16  have their facsimile signature, if the change in tax, excluding penalties and interest, &#10;124.17  exceeds $1,000.&#10;124.18  (d) An order of assessment is final when made but, as applicable, is reviewable &#10;124.19  administratively under section 270C.35, or appealable to Tax Court under chapter 271.&#10;124.20  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.9.4.0"></a>124.21      Sec. 4. Minnesota Statutes 2005 Supplement, section 270C.57, subdivision 3, is &#10;124.22  amended to read:&#10;124.23      Subd. 3. <b>Assessment</b><ins><b>;</b></ins><b> abatement; review.</b> The commissioner may assess liability &#10;124.24  <ins>against a successor business </ins>under this section within the time prescribed for collecting &#10;124.25  the underlying sales and withholding taxes, interest, and penalties. The assessment is &#10;124.26  presumed to be valid, and the burden is upon the successor to show it is incorrect or &#10;124.27  invalid. An order assessing successor liability is reviewable administratively under section &#10;124.28  270C.35 and is appealable to Tax Court under chapter 271. The commissioner may abate &#10;124.29  an assessment if the successor's failure to give the notice required under this section is due &#10;124.30  to reasonable cause. The procedural and appeal provisions under section 270C.34 apply &#10;124.31  to abatement requests under this subdivision. Collection remedies available against the &#10;124.32  transferring business are available against the successor from the date of assessment of &#10;124.33  successor liability.&#10;124.34  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.9.5.0"></a>125.1       Sec. 5. Minnesota Statutes 2005 Supplement, section 270C.67, subdivision 1, is &#10;125.2   amended to read:&#10;125.3       Subdivision 1. <b>Authority.</b> If any tax payable to the commissioner or to the &#10;125.4   department is not paid when due, such tax may be collected by the commissioner within &#10;125.5   five years after the date of assessment of the tax, or if a lien has been filed, during the &#10;125.6   period the lien is enforceable, or if the tax judgment has been filed, within the statutory &#10;125.7   period of enforcement of a valid tax judgment, by a levy upon all property and rights &#10;125.8   to property, including any property in the possession of law enforcement officials, of &#10;125.9   the person liable for the payment or collection of such tax <del>(except that which is exempt </del>&#10;125.10  <del>from execution pursuant to section </del><del>550.37</del><del>)</del> or property on which there is a lien provided &#10;125.11  in section 270C.63. For this purpose, "tax" includes any penalty, interest, and costs, &#10;125.12  properly payable.&#10;125.13  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.9.6.0"></a>125.14      Sec. 6. Minnesota Statutes 2005 Supplement, section 270C.67, is amended by adding a &#10;125.15  subdivision to read:&#10;125.16      <ins>Subd. 1a.</ins> <ins><b>Exempt property.</b></ins> <ins> A levy under this section is not enforceable against:</ins>&#10;125.17  <ins>(1) a purchaser with respect to tangible personal property purchased at retail in </ins>&#10;125.18  <ins>the ordinary course of the seller's trade or business, unless at the time of purchase the </ins>&#10;125.19  <ins>purchaser intends the purchase to or knows the purchase will hinder, evade, or defeat </ins>&#10;125.20  <ins>the collection of a tax; or</ins>&#10;125.21  <ins>(2) the personal property listed as exempt in sections 550.37, 550.38, and 550.39.</ins>&#10;125.22  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.9.7.0"></a>125.23      Sec. 7. Minnesota Statutes 2005 Supplement, section 271.12, is amended to read:&#10;125.24  <b>271.12 WHEN ORDER EFFECTIVE.</b>&#10;125.25  No order for refundment by the commissioner of revenue, the appropriate unit of &#10;125.26  government, or the Tax Court shall take effect until the time for appeal therefrom or &#10;125.27  review thereof by all parties entitled thereto has expired. Otherwise every order of the &#10;125.28  commissioner, the appropriate unit of government, or the Tax Court shall take effect &#10;125.29  immediately upon the filing thereof, and no appeal therefrom or review thereof shall &#10;125.30  stay the execution thereof or extend the time for payment of any tax or other obligation &#10;125.31  unless otherwise expressly provided by law; provided, that in case an order which has &#10;125.32  been acted upon, in whole or in part, shall thereafter be set aside or modified upon appeal, &#10;125.33  the determination upon appeal or review shall supersede the order appealed from and be &#10;126.1   binding upon all parties affected thereby, and such adjustments as may be necessary &#10;126.2   to give effect thereto shall be made accordingly; and provided further, the Tax Court &#10;126.3   may enjoin enforcement of the order of the commissioner being appealed. If it be finally &#10;126.4   determined upon such appeal or review that any person is entitled to refundment of any &#10;126.5   amount which has been paid for a tax or other obligation, such amount, unless otherwise &#10;126.6   provided by law, shall be paid to the person by the commissioner of finance, or other &#10;126.7   proper officer, out of funds derived from taxes of the same kind, if available for the &#10;126.8   purpose, or out of other available funds, if any, with interest at the rate specified in section &#10;126.9   270C.405 from the date of payment of the tax, unless a different rate <ins>or date of accrual </ins>&#10;126.10  of interest is otherwise provided by law, in which case such other rate <ins>or date of accrual </ins>&#10;126.11  shall apply, upon certification by the commissioner of revenue, the appropriate unit of &#10;126.12  government, the Tax Court or the Supreme Court.&#10;126.13  If, within 120 days after a decision of the Tax Court becomes final, the commissioner &#10;126.14  does not refund the overpayment determined by the court, together with interest, on &#10;126.15  motion by the taxpayer, the Tax Court shall have jurisdiction to order the refund of &#10;126.16  the overpayment and interest, and to award reasonable litigation costs for bringing the &#10;126.17  motion. If any tax, assessment, or other obligation be increased upon such appeal or &#10;126.18  review, the increase shall be added to the original amount, and may be enforced and &#10;126.19  collected therewith.&#10;126.20  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.9.8.0"></a>126.21      Sec. 8. Minnesota Statutes 2005 Supplement, section 289A.121, subdivision 5, is &#10;126.22  amended to read:&#10;126.23      Subd. 5. <b>Reportable transactions.</b> (a) For each taxable year in which a taxpayer &#10;126.24  must make a return or a statement under Code of Federal Regulations, title 26, section &#10;126.25  1.6011-4, for a reportable transaction, including a listed transaction, in which the taxpayer &#10;126.26  participated in a taxable year for which a return is required under chapter 290, the taxpayer &#10;126.27  must file a copy of the disclosure with the commissioner.&#10;126.28  (b) Any taxpayer that is a member of a unitary business group that includes any &#10;126.29  person that must make a disclosure statement under Code of Federal Regulations, title 26, &#10;126.30  section 1.6011-4, must file a disclosure under this subdivision.&#10;126.31  (c) Disclosure under this subdivision is required for any transaction entered into after &#10;126.32  December 31, 2001, that the Internal Revenue Service determines is a listed transaction &#10;126.33  at any time, and must be made in the manner prescribed by the commissioner. For &#10;126.34  transactions in which the taxpayer participated for taxable years ending before December &#10;126.35  31, 2005, disclosure must be made by the <ins>extended </ins>due date of the first return required &#10;127.1   under chapter 290 that occurs 60 days or more after July 14, 2005. With respect to &#10;127.2   transactions in which the taxpayer participated for taxable years ending on and after &#10;127.3   December 31, 2005, disclosure must be made in the time and manner prescribed in Code &#10;127.4   of Federal Regulations, title 26, section 1.6011-4(e).&#10;127.5   (d) Notwithstanding paragraphs (a) to (c), no disclosure is required for transactions &#10;127.6   entered into after December 31, 2001, and before January 1, 2006, if (1) the taxpayer &#10;127.7   has filed an amended income tax return which reverses the tax benefits of the tax &#10;127.8   shelter transaction, or (2) as a result of a federal audit the Internal Revenue Service has &#10;127.9   determined the tax treatment of the transaction and an amended return has been filed &#10;127.10  to reflect the federal treatment.&#10;127.11  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for disclosures of reportable </ins>&#10;127.12  <ins>transactions in which the taxpayer participated for taxable years ending before December </ins>&#10;127.13  <ins>31, 2005.</ins>&#10;&#10;<a id="go.9.9.0"></a>127.14      Sec. 9. Minnesota Statutes 2004, section 290.17, subdivision 1, is amended to read:&#10;127.15      Subdivision 1. <b>Scope of allocation rules.</b> (a) The income of resident individuals &#10;127.16  is not subject to allocation outside this state. The allocation rules apply to nonresident &#10;127.17  individuals, estates, trusts, nonresident partners of partnerships, nonresident shareholders &#10;127.18  of corporations treated as "S" corporations under section  290.9725, and all corporations &#10;127.19  not having such an election in effect. If a partnership or corporation would not otherwise &#10;127.20  be subject to the allocation rules, but conducts a trade or business that is part of a &#10;127.21  unitary business involving another legal entity that is subject to the allocation rules, the &#10;127.22  partnership or corporation is subject to the allocation rules. &#10;127.23  (b) Expenses, losses, and other deductions (referred to collectively in this paragraph &#10;127.24  as "deductions") must be allocated along with the item or class of gross income to which &#10;127.25  they are definitely related for purposes of assignment under this section or apportionment &#10;127.26  under section  290.191,  290.20, or  290.36. Deductions <del>not</del> definitely related to any item &#10;127.27  <del>or class</del> of gross income <del>are</del> assigned <ins>under subdivision 2, paragraph (e), are assigned </ins>to &#10;127.28  the taxpayer's domicile. &#10;127.29  (c) In the case of an individual who is a resident for only part of a taxable year, &#10;127.30  the individual's income, gains, losses, and deductions from the distributive share of a &#10;127.31  partnership, S corporation, trust, or estate are not subject to allocation outside this state &#10;127.32  to the extent of the distributive share multiplied by a ratio, the numerator of which is &#10;127.33  the number of days the individual was a resident of this state during the tax year of the &#10;127.34  partnership, S corporation, trust, or estate, and the denominator of which is the number of &#10;127.35  days in the taxable year of the partnership, S corporation, trust, or estate.&#10;128.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.10.0.0"></a>128.2                                          <b>ARTICLE 10</b>&#10;128.3                                        <b>PUBLIC FINANCE</b>&#10;&#10;<a id="go.10.1.0"></a>128.4       Section 1. Minnesota Statutes 2004, section 103E.635, subdivision 7, is amended to &#10;128.5   read:&#10;128.6       Subd. 7. <b>Sale of definitive drainage bonds.</b> The board must sell and negotiate the &#10;128.7   definitive drainage bonds <del>for at least their par value. The definitive bonds must be sold</del> &#10;128.8   <del>in accordance with </del><del>section</del><ins> according to sections 475.56 and </ins>  475.60. &#10;&#10;<a id="go.10.2.0"></a>128.9       Sec. 2. Minnesota Statutes 2004, section 116A.20, subdivision 3, is amended to read:&#10;128.10      Subd. 3. <b>How payable.</b> The bonds shall be payable at such time or times, not to &#10;128.11  exceed <ins>(1) </ins>30 years from their date<ins> or (2) 40 years or the useful life of the asset, whichever </ins>&#10;128.12  <ins>is less, if financed or guaranteed by the United States Department of Agriculture</ins>, and bear &#10;128.13  such rate or rates of interest not exceeding eight percent per annum, payable annually or &#10;128.14  semiannually as the county board shall by resolution determine. The years and amounts &#10;128.15  of principal maturities shall be such as in the opinion of the county board are warranted &#10;128.16  by the anticipated collections of the water and sewer improvement assessments without &#10;128.17  regard to any limitations on such maturities imposed by section  475.54. &#10;&#10;<a id="go.10.3.0"></a>128.18      Sec. 3. Minnesota Statutes 2004, section 162.18, subdivision 1, is amended to read:&#10;128.19      Subdivision 1. <b>Limitation on amount.</b> Any city having a population of 5,000 or &#10;128.20  more may in accordance with chapter 475, except as otherwise provided herein, issue and &#10;128.21  sell its obligations for the purpose of establishing, locating, relocating, constructing, &#10;128.22  reconstructing, and improving municipal state-aid streets therein. In the resolution &#10;128.23  providing for the issuance of the obligations, the governing body of the municipality &#10;128.24  shall irrevocably pledge and appropriate to the sinking fund from which the obligations &#10;128.25  are payable, an amount of the moneys allotted or to be allotted to the municipality from &#10;128.26  its account in the municipal state-aid street fund sufficient to pay the principal of and the &#10;128.27  interest on the obligations as they respectively come due. The obligations shall be issued &#10;128.28  in amounts and on terms such that the average annual amount of principal and interest due &#10;128.29  in all subsequent calendar years on the obligations, including any similar obligations of &#10;128.30  the municipality which are outstanding, shall not exceed <del>50</del><ins> 90 </ins> percent of the amount of &#10;128.31  <del>the last annual allotment preceding the bond issue received by the municipality from the </del>&#10;128.32  <del>construction account in the municipal state-aid street fund; except that the municipality </del>&#10;128.33  <del>may issue general obligation bonds for said purpose, to be purchased by it for the account </del>&#10;129.1   <del>of any one or more of its own funds, including debt redemption funds, in which case such </del>&#10;129.2   <del>bonds shall mature in not exceeding five years from their respective dates of issue, in </del>&#10;129.3   <del>principal amounts not exceeding in any calendar year, with the principal amount of all </del>&#10;129.4   <del>other municipal state-aid street obligations maturing in such year, the total amount of</del> the &#10;129.5   last annual allotment preceding the bond issue received by the municipality from the &#10;129.6   construction account in the municipal state-aid street fund. All interest on the obligations &#10;129.7   shall be paid out of the municipality's normal maintenance account in the municipal &#10;129.8   state-aid street fund. Any such obligations may be made general obligations, but if &#10;129.9   moneys of the municipality other than moneys received from the municipal state-aid street &#10;129.10  fund, are used for payment of the obligations, the moneys so used shall be restored to the &#10;129.11  appropriate fund from the moneys next received by the municipality from the construction &#10;129.12  or maintenance account in the municipal state-aid street fund which are not required to be &#10;129.13  paid into a sinking fund for obligations.&#10;&#10;<a id="go.10.4.0"></a>129.14      Sec. 4. Minnesota Statutes 2004, section 162.181, subdivision 1, is amended to read:&#10;129.15      Subdivision 1. <b>Limitation on amount.</b> Except as otherwise provided herein, any &#10;129.16  county may, in accordance with chapter 475, issue and sell its obligations, the total &#10;129.17  amount thereof not to exceed the total of the preceding two years state-aid allotments, &#10;129.18  for the purpose of establishing, locating, relocating, constructing, reconstructing, and &#10;129.19  improving county state-aid highways and constructing buildings and other facilities for &#10;129.20  maintaining county state-aid highways. In the resolution providing for the issuance of the &#10;129.21  obligations, the county board of the county shall irrevocably pledge and appropriate to the &#10;129.22  sinking fund from which the obligations are payable, an amount of the money allotted &#10;129.23  or to be allotted to the county from its account in the county state-aid highway fund &#10;129.24  sufficient to pay the principal of and the interest on the obligations as they respectively &#10;129.25  come due. The obligations shall be issued in the amounts and on terms such that the &#10;129.26  amount of principal and interest due in any calendar year on the obligations, including &#10;129.27  any similar obligations of the county which are outstanding, shall not exceed <del>50</del><ins> 90 </ins>&#10;129.28   percent of the amount of the last annual allotment preceding the bond issue received &#10;129.29  by the county from the construction account in the county state-aid highway fund. All &#10;129.30  interest on the obligations shall be paid out of the county's normal maintenance account &#10;129.31  in the county state-aid highway fund. The obligations may be made general obligations, &#10;129.32  but if money of the county other than money received from the county state-aid highway &#10;129.33  fund, is used for payment of the obligations, the money so used shall be restored to the &#10;129.34  appropriate fund from the money next received by the county from the construction or &#10;130.1   maintenance account in the county state-aid highway fund which is not required to be &#10;130.2   paid into a sinking fund for obligations.&#10;&#10;<a id="go.10.5.0"></a>130.3       Sec. 5. Minnesota Statutes 2004, section 273.032, is amended to read:&#10;130.4   <b>273.032 MARKET VALUE DEFINITION.</b>&#10;130.5   For the purpose of determining any property tax levy limitation based on market &#10;130.6   value,<del> any net debt limit based on market value, any limit on the issuance of bonds, </del>&#10;130.7   <del>certificates of indebtedness, or capital notes based on market value, </del>any qualification &#10;130.8   to receive state aid based on market value, or any state aid amount based on market &#10;130.9   value, the terms "market value," "taxable market value," and "market valuation," whether &#10;130.10  equalized or unequalized, mean the total taxable market value of property within the local &#10;130.11  unit of government before any adjustments for tax increment, fiscal disparity, powerline &#10;130.12  credit, or wind energy values, but after the limited market adjustments under section  &#10;130.13  273.11, subdivision 1a, and after the market value exclusions of certain improvements to &#10;130.14  homestead property under section  273.11, subdivision 16. Unless otherwise provided, &#10;130.15  "market value," "taxable market value," and "market valuation" <ins>for purposes of this </ins>&#10;130.16  <ins>paragraph, </ins> refer to the taxable market value for the previous assessment year. &#10;130.17  <ins>For the purpose of determining any net debt limit based on market value, or any limit </ins>&#10;130.18  <ins>on the issuance of bonds, certificates of indebtedness, or capital notes based on market </ins>&#10;130.19  <ins>value, the terms "market value," "taxable market value," and "market valuation," whether </ins>&#10;130.20  <ins>equalized or unequalized, mean the total taxable market value of property within the local </ins>&#10;130.21  <ins>unit of government before any adjustments for tax increment, fiscal disparity, powerline </ins>&#10;130.22  <ins>credit, or wind energy values, but after the limited market adjustments under section </ins>&#10;130.23  <ins>273.11, subdivision 1a, and after the market value exclusions of certain improvements to </ins>&#10;130.24  <ins>homestead property under section 273.11, subdivision 16. Unless otherwise provided, </ins>&#10;130.25  <ins>"market value," "taxable market value," and "market valuation" for purposes of this </ins>&#10;130.26  <ins>paragraph, mean the taxable market value as last finally equalized.</ins>&#10;&#10;<a id="go.10.6.0"></a>130.27      Sec. 6. Minnesota Statutes 2004, section 365A.08, is amended to read:&#10;130.28  <b>365A.08 FINANCING.</b>&#10;130.29  Upon adoption of the next annual budget following the creation of a subordinate &#10;130.30  service district the town board shall include in the budget appropriate provisions for the &#10;130.31  operation of the district including either a property tax levied only on property of the users &#10;130.32  of the service within the boundaries of the district or a levy of a service charge against the &#10;130.33  users of the service within the district, or a combination of a property tax and a service &#10;130.34  charge on the users of the service.&#10;131.1   A tax or service charge or a combination of them may be imposed to finance a &#10;131.2   function or service in the district that the town ordinarily provides throughout the town &#10;131.3   only to the extent that there is an increase in the level of the function or service provided &#10;131.4   in the service district over that provided throughout the town. In that case, in addition &#10;131.5   to the townwide tax levy, an amount necessary to pay for the increase in the level of the &#10;131.6   function or service may be imposed in the district.&#10;131.7   <ins>In the proceedings for establishment of a subordinate service district, the town may </ins>&#10;131.8   <ins>prepare a street reconstruction plan that describes the streets within the district to be </ins>&#10;131.9   <ins>reconstructed, the estimated costs, and any planned reconstruction of streets within the </ins>&#10;131.10  <ins>district over the next five years and may include the approval of the street reconstruction </ins>&#10;131.11  <ins>plan and the issuance of obligations for street reconstruction in the notice of public hearing </ins>&#10;131.12  <ins>for the public hearing required by section 365A.04, subdivision 2. The town board shall </ins>&#10;131.13  <ins>approve or disapprove the plan and the issuance of obligations in the resolution adopted </ins>&#10;131.14  <ins>pursuant to section 365A.04, subdivision 3, and the issuance of street reconstruction </ins>&#10;131.15  <ins>obligations shall be subject to the provisions for reverse referendum contained in section </ins>&#10;131.16  <ins>365A.06. Following the creation of the subordinate service district and approval of the </ins>&#10;131.17  <ins>plan and the street reconstruction obligations and compliance with section 365A.06, the </ins>&#10;131.18  <ins>town may, without regard to the election requirement under section 475.58, subdivision 1, </ins>&#10;131.19  <ins>issue and sell general obligations for street reconstruction as defined in section 475.58, </ins>&#10;131.20  <ins>subdivision 3b. Obligations issued under this section are subject to the debt limit of the </ins>&#10;131.21  <ins>town and are not excluded from net debt under section 475.51, subdivision 4.</ins>&#10;&#10;<a id="go.10.7.0"></a>131.22      Sec. 7. Minnesota Statutes 2004, section 365A.095, is amended to read:&#10;131.23  <b>365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.</b>&#10;131.24  <ins>Except when obligations are outstanding under section 365A.08, </ins>a petition signed by &#10;131.25  at least 75 percent of the property owners in the territory of the subordinate service district &#10;131.26  requesting the removal of the district may be presented to the town board. Within 30 days &#10;131.27  after the town board receives the petition, the town clerk shall determine the validity of the &#10;131.28  signatures on the petition. If the requisite number of signatures are certified as valid, the &#10;131.29  town board must hold a public hearing on the petitioned matter. Within 30 days after the &#10;131.30  end of the hearing, the town board must decide whether to discontinue the subordinate &#10;131.31  service district, continue as it is, or take some other action with respect to it.&#10;&#10;<a id="go.10.8.0"></a>131.32      Sec. 8. Minnesota Statutes 2004, section 373.45, subdivision 1, is amended to read:&#10;131.33      Subdivision 1. <b>Definitions.</b> (a) As used in this section, the following terms have &#10;131.34  the meanings given.&#10;132.1   (b) "Authority" means the Minnesota Public Facilities Authority.&#10;132.2   (c) "Commissioner" means the commissioner of finance.&#10;132.3   (d) "Debt obligation" means a general obligation bond issued by a county, <ins>a bond to </ins>&#10;132.4   <ins>which the general obligation of a county is pledged under section 469.034, subdivision 2, </ins>&#10;132.5   or a bond payable from a county lease obligation under section  641.24, to provide funds &#10;132.6   for the construction of: &#10;132.7   (1) jails;&#10;132.8   (2) correctional facilities;&#10;132.9   (3) law enforcement facilities;&#10;132.10  (4) social services and human services facilities; <del>or</del>&#10;132.11  (5) solid waste facilities<ins>; or</ins>&#10;132.12  <ins>(6) qualified housing development projects as defined in section 469.034, subdivision </ins>&#10;132.13  <ins>2</ins>.&#10;&#10;<a id="go.10.9.0"></a>132.14      Sec. 9. Minnesota Statutes 2004, section 469.035, is amended to read:&#10;132.15  <b>469.035 MANNER OF BOND ISSUANCE; SALE.</b>&#10;132.16  Bonds of an authority shall be authorized by its resolution. They may be issued in &#10;132.17  one or more series and shall bear the date or dates, mature at the time or times, bear interest &#10;132.18  at the rate or rates, be in the denomination or denominations, be in the form either coupon &#10;132.19  or registered, carry the conversion or registration privileges, have the rank or priority, be &#10;132.20  executed in the manner, be payable in the medium of payment at the place or places, and &#10;132.21  be subject to the terms of redemption with or without premium, as the resolution, its trust &#10;132.22  indenture or mortgage provides. The bonds may be sold <del>at public or private sale at not </del>&#10;132.23  <del>less than par</del><ins> in the manner and for the price that the authority determines to be in the best </ins>&#10;132.24  <ins>interest of the authority</ins>. Notwithstanding any other law, bonds issued pursuant to sections  &#10;132.25  469.001 to  469.047 shall be fully negotiable. In any suit, action, or proceedings involving &#10;132.26  the validity or enforceability of any bonds of an authority or the security for the bonds, &#10;132.27  any bond reciting in substance that it has been issued by the authority to aid in financing a &#10;132.28  project shall be conclusively deemed to have been issued for that purpose, and the project &#10;132.29  shall be conclusively deemed to have been planned, located, and carried out in accordance &#10;132.30  with the purposes and provisions of sections  469.001 to  469.047. &#10;132.31  In cities of the first class, the governing body of the city must approve all notes &#10;132.32  executed with the Minnesota Housing Finance Agency pursuant to this section if the &#10;132.33  interest rate on the note exceeds seven percent.&#10;&#10;<a id="go.10.10.0"></a>132.34      Sec. 10. Minnesota Statutes 2004, section 469.103, subdivision 2, is amended to read:&#10;133.1       Subd. 2. <b>Form.</b> The bonds of each series issued by the authority under this section &#10;133.2   shall bear interest at a rate or rates, shall mature at the time or times within <del>20</del><ins> 30 </ins> years &#10;133.3   from the date of issuance, and shall be in the form, whether payable to bearer, registrable &#10;133.4   as to principal, or fully registrable, as determined by the authority. Section  469.102, &#10;133.5   subdivision 6, applies to all bonds issued under this section, and the bonds and their &#10;133.6   coupons, if any, when payable to bearer, shall be negotiable instruments. &#10;&#10;<a id="go.10.11.0"></a>133.7       Sec. 11. Minnesota Statutes 2005 Supplement, section 469.178, subdivision 7, is &#10;133.8   amended to read:&#10;133.9       Subd. 7. <b>Interfund loans.</b> The authority or municipality may advance or loan &#10;133.10  money to finance expenditures under section 469.176, subdivision 4, from its general &#10;133.11  fund or any other fund under which it has legal authority to do so. The loan or advance &#10;133.12  must be authorized, by resolution of the governing body<ins> or of the authority, whichever </ins>&#10;133.13  <ins>has jurisdiction over the fund from which the advance or loan is made</ins>, before money &#10;133.14  is transferred, advanced, or spent, whichever is earliest. The resolution may generally &#10;133.15  grant to the authority the power to make interfund loans under one or more tax increment &#10;133.16  financing plans or for one or more districts. The terms and conditions for repayment of &#10;133.17  the loan must be provided in writing and include, at a minimum, the principal amount, &#10;133.18  the interest rate, and maximum term. The maximum rate of interest permitted to be &#10;133.19  charged is limited to the greater of the rates specified under section 270C.40 or 549.09 &#10;133.20  as of the date or advance is made, unless the written agreement states that the maximum &#10;133.21  interest rate will fluctuate as the interest rates specified under section 270C.40 or 549.09 &#10;133.22  are from time to time adjusted.&#10;&#10;<a id="go.10.12.0"></a>133.23      Sec. 12. Minnesota Statutes 2004, section 473.39, is amended by adding a subdivision &#10;133.24  to read:&#10;133.25      <ins>Subd. 11.</ins> <ins><b>Obligations.</b></ins> <ins>After July 1, 2006, in addition to the authority in </ins>&#10;133.26  <ins>subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, 1i, 1j, and 1k, the council may issue certificates of </ins>&#10;133.27  <ins>indebtedness, bonds, or other obligations under this section in an amount not exceeding </ins>&#10;133.28  <ins>$32,800,000 for capital expenditures as prescribed in the council's regional transit master </ins>&#10;133.29  <ins>plan and transit capital improvement program and for related costs, including the costs of </ins>&#10;133.30  <ins>issuance and sale of the obligations.</ins>&#10;133.31  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.10.13.0"></a>134.1       Sec. 13. Minnesota Statutes 2004, section 474A.062, is amended to read:&#10;134.2   <b>474A.062 HESO 120-DAY ISSUANCE EXEMPTION.</b>&#10;134.3   The Minnesota Higher Education Services Office is exempt from the 120-day &#10;134.4   issuance requirements in this chapter and may carry forward allocations for student loan &#10;134.5   bonds into <del>three</del><ins> one </ins> successive calendar <del>years</del><ins> year</ins>, subject to carryforward notice &#10;134.6   requirements of section  474A.131, subdivision 2. <del>The maximum cumulative carryforward </del>&#10;134.7   <del>is limited to $25,000,000.</del> &#10;134.8   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for bond allocations made in 2006 </ins>&#10;134.9   <ins>and thereafter.</ins>&#10;&#10;<a id="go.10.14.0"></a>134.10      Sec. 14. Minnesota Statutes 2005 Supplement, section 475.521, subdivision 4, is &#10;134.11  amended to read:&#10;134.12      Subd. 4. <b>Limitations on amount.</b> A municipality may not issue bonds under this &#10;134.13  section if the maximum amount of principal and interest to become due in any year on &#10;134.14  all the outstanding bonds issued under this section, including the bonds to be issued, &#10;134.15  will equal or exceed <ins>(1) </ins>0.16 percent of the taxable market value of property in the &#10;134.16  municipality<ins>, or (2) $100,000, whichever is greater</ins>. Calculation of the limit must be &#10;134.17  made using the taxable market value for the taxes payable year in which the obligations &#10;134.18  are issued and sold. In the case of a municipality with a population of 2,500 or more, the &#10;134.19  bonds are subject to the net debt limits under section 475.53. In the case of a shared facility &#10;134.20  in which more than one municipality participates, upon compliance by each participating &#10;134.21  municipality with the requirements of subdivision 2, the limitations in this subdivision and &#10;134.22  the net debt represented by the bonds shall be allocated to each participating municipality &#10;134.23  in proportion to its required financial contribution to the financing of the shared facility, as &#10;134.24  set forth in the joint powers agreement relating to the shared facility. This section does not &#10;134.25  limit the authority to issue bonds under any other special or general law.&#10;&#10;<a id="go.10.15.0"></a>134.26      Sec. 15. Laws 2005, chapter 152, article 1, section 39, subdivision 1, is amended to &#10;134.27  read:&#10;134.28   &#10;134.29  Subdivision 1.  [ISSUANCE; PURPOSE.] Notwithstanding any  provision of &#10;134.30  Minnesota Statutes, chapter 298, to the contrary,  the commissioner of Iron Range &#10;134.31  resources and rehabilitation <del>may</del><ins> shall</ins> issue revenue bonds in a principal amount of &#10;134.32  $15,000,000<ins> plus an amount sufficient to pay costs of issuance, </ins> in one  or more series, &#10;134.33  and<ins> thereafter may issue</ins> bonds to refund those bonds.  The proceeds  of the bonds must be &#10;135.1   used<ins> to pay costs of issuance and</ins> to make grants to school districts  located in the taconite &#10;135.2   tax relief area defined in Minnesota  Statutes, section 273.134, or the taconite assistance &#10;135.3   area  defined in Minnesota Statutes, section 273.1341, to be used by  the school districts &#10;135.4   to pay for health, safety, and maintenance  improvements <del>but only if the school district </del>&#10;135.5   <del>has levied the maximum amount allowable under law for those purposes</del>.<ins> The amounts of </ins>&#10;135.6   <ins>proceeds to be distributed to each district are as follows:</ins>&#10;135.7   <ins>(1) Independent School District No. 511, Aitkin, $600,000;</ins>&#10;135.8   <ins>(2) Independent School District No. 695, Chisholm, $700,000;</ins>&#10;135.9   <ins>(3) Independent School District No. 166, Cook County, $600,000;</ins>&#10;135.10  <ins>(4) Independent School District No. 182, Crosby-Ironton, $600,000;</ins>&#10;135.11  <ins>(5) Independent School District No. 696, Ely, $600,000;</ins>&#10;135.12  <ins>(6) Independent School District No. 2154, Eveleth-Gilbert, $1,000,000;</ins>&#10;135.13  <ins>(7) Independent School District No. 318, Grand Rapids, $600,000;</ins>&#10;135.14  <ins>(8) Independent School District No. 316, Greenway, $1,100,000;</ins>&#10;135.15  <ins>(9) Independent School District No. 701, Hibbing, $2,100,000;</ins>&#10;135.16  <ins>(10) Independent School District No. 381, Lake Superior, $600,000;</ins>&#10;135.17  <ins>(11) Independent School District No. 2711, Mesabi East, $3,600,000;</ins>&#10;135.18  <ins>(12) Independent School District No. 712, Mt. Iron-Buhl, $700,000;</ins>&#10;135.19  <ins>(13) Independent School District No. 319, Nashwauk/Keewatin, $700,000;</ins>&#10;135.20  <ins>(14) Independent School District No. 2142, St. Louis County, $600,000; and</ins>&#10;135.21  <ins>(15) Independent School District No. 706, Virginia, $900,000.</ins>  &#10;135.22   &#10;&#10;<a id="go.10.16.0"></a>135.23      Sec. 16. <ins><b>CARVER COUNTY AUTHORITY NAME CHANGE.</b></ins>&#10;135.24  <ins>The Carver County Housing and Redevelopment Authority created under Laws </ins>&#10;135.25  <ins>1980, chapter 482, is renamed the Carver County Community Development Agency.</ins>&#10;&#10;<a id="go.10.17.0"></a>135.26      Sec. 17. <ins><b>CITY OF WINSTED; BONDING AUTHORITY.</b></ins>&#10;135.27  <ins>(a) The city of Winsted may issue general obligation bonds under Minnesota </ins>&#10;135.28  <ins>Statutes, chapter 475, to finance the acquisition and betterment of a public works facility </ins>&#10;135.29  <ins>and a facility consisting of a city hall, community center and police station, including </ins>&#10;135.30  <ins>landscaping.</ins>&#10;135.31  <ins>(b) The bonds may be issued as general obligations of the city without an election to </ins>&#10;135.32  <ins>approve the bonds under Minnesota Statutes, section 475.58.</ins>&#10;135.33  <ins>(c) The bonds are not included in computing any debt limitation applicable to the </ins>&#10;135.34  <ins>city, including the net debt limits under Minnesota Statutes, section 475.53, and the levy </ins>&#10;136.1   <ins>of taxes under Minnesota Statutes, section 475.61, to pay principal of and interest on the </ins>&#10;136.2   <ins>bonds is not subject to any levy limitation.</ins>&#10;136.3   <ins>(d) The aggregate principal amount of bonds used to pay costs of the acquisition and </ins>&#10;136.4   <ins>betterment of the public works facility and the facility consisting of a city hall, community </ins>&#10;136.5   <ins>center and police station, including landscaping, may not exceed $5,000,000, plus an </ins>&#10;136.6   <ins>amount equal to the costs related to issuance of the bonds and capitalized interest.</ins>&#10;136.7   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon compliance by the governing </ins>&#10;136.8   <ins>body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.</ins>&#10;&#10;<a id="go.10.18.0"></a>136.9       Sec. 18. <ins><b>UNIFIED POOL; OFFICE OF HIGHER EDUCATION; TEMPORARY </b></ins>&#10;136.10  <ins><b>PRIORITY.</b></ins>&#10;136.11  <ins>Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph </ins>&#10;136.12  <ins>(b), prior to October 1, 2006, only the following applications shall be awarded allocations </ins>&#10;136.13  <ins>from the unified pool. Allocations shall be awarded in the following order of priority:</ins>&#10;136.14  <ins>(1) applications for student loan bonds issued by or on behalf of the Office of </ins>&#10;136.15  <ins>Higher Education;</ins>&#10;136.16  <ins>(2) applications for residential rental project bonds;</ins>&#10;136.17  <ins>(3) applications for small issue bonds for manufacturing projects; and</ins>&#10;136.18  <ins>(4) applications for small issue bonds for agricultural development bond loan </ins>&#10;136.19  <ins>projects.</ins>&#10;136.20  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective July 1, 2006.</ins>&#10;&#10;<a id="go.10.19.0"></a>136.21      Sec. 19. <ins><b>UNIFIED POOL; TEMPORARY PRIORITY CHANGE.</b></ins>&#10;136.22  <ins>Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph </ins>&#10;136.23  <ins>(c), on the first Monday in October 2006, through the last Monday in November 2006, </ins>&#10;136.24  <ins>allocations shall be awarded from the unified pool in the following order of priority:</ins>&#10;136.25  <ins>(1) applications for mortgage bonds;</ins>&#10;136.26  <ins>(2) applications for public facility projects funded by public facility bonds;</ins>&#10;136.27  <ins>(3) applications for small issue bonds for manufacturing projects;</ins>&#10;136.28  <ins>(4) applications for small issue bonds for agricultural development bond loan </ins>&#10;136.29  <ins>projects;</ins>&#10;136.30  <ins>(5) applications for residential rental project bonds;</ins>&#10;136.31  <ins>(6) applications for enterprise zone facility bonds;</ins>&#10;136.32  <ins>(7) applications for governmental bonds; and</ins>&#10;136.33  <ins>(8) applications for redevelopment bonds.</ins>&#10;137.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective July 1, 2006.</ins>&#10;&#10;<a id="go.10.20.0"></a>137.2       Sec. 20. <ins><b>UNIFIED POOL; OFFICE OF HIGHER EDUCATION TOTAL </b></ins>&#10;137.3   <ins><b>ALLOCATION.</b></ins>&#10;137.4   <ins>Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph (i), </ins>&#10;137.5   <ins>the total amount of allocations for student loan bonds from the unified pool in calendar </ins>&#10;137.6   <ins>year 2006 may not exceed 50 percent of the total in the unified pool on the day after the </ins>&#10;137.7   <ins>last Monday in July, 2006.</ins>&#10;137.8   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective July 1, 2006.</ins>&#10;&#10;<a id="go.10.21.0"></a>137.9       Sec. 21. <ins><b>CITY OF PENNOCK; ACQUIRE REAL ESTATE, EXPEND CITY </b></ins>&#10;137.10  <ins><b>FUNDS, AND CONVEY TO PRIVATE ENTITY.</b></ins>&#10;137.11      <ins>Subdivision 1.</ins> <ins><b>Authorization.</b></ins> <ins>The city of Pennock may purchase a parcel of real </ins>&#10;137.12  <ins>estate in the city consisting of four city lots and an appurtenant building formerly operated </ins>&#10;137.13  <ins>as a convenience store known as Phil's Corner on the terms and conditions that may be </ins>&#10;137.14  <ins>agreed upon between the city and the current owner of the parcel, and the city may expend </ins>&#10;137.15  <ins>city funds to make necessary improvements to the building. Once acquired and improved </ins>&#10;137.16  <ins>and in order to ensure the continued economic vitality of the city, the city may convey </ins>&#10;137.17  <ins>the parcel and building by sale or lease to a private person, firm, partnership, corporation </ins>&#10;137.18  <ins>or other entity for a nominal consideration or on whatever terms and conditions the </ins>&#10;137.19  <ins>city and the private entity may agree upon in order for the building to be operated as a </ins>&#10;137.20  <ins>commercial establishment.</ins>&#10;137.21      <ins>Subd. 2.</ins> <ins><b>Bonds.</b></ins> <ins>The city of Pennock may issue general obligation bonds of the </ins>&#10;137.22  <ins>city in the aggregate principal amount not to exceed $250,000 to finance the project </ins>&#10;137.23  <ins>authorized by subdivision 1. The bonds must be issued in compliance with Minnesota </ins>&#10;137.24  <ins>Statutes, chapter 475, except that a referendum under Minnesota Statutes, section 475.58, </ins>&#10;137.25  <ins>is not required. The debt represented by the bonds is not included in computing any debt </ins>&#10;137.26  <ins>limitations applicable to the city, and the levy of taxes required by Minnesota Statutes, </ins>&#10;137.27  <ins>section 475.61, to pay the principal of and interest on the bonds is not subject to any levy </ins>&#10;137.28  <ins>limitation otherwise applicable to the city.</ins>&#10;137.29  <ins><b>EFFECTIVE DATE.</b></ins><ins>Under Minnesota Statutes 2004, section 645.023, subdivision </ins>&#10;137.30  <ins>1, paragraph (a), this section is effective without local approval on the day following </ins>&#10;137.31  <ins>final enactment.</ins>&#10;&#10;<a id="go.10.22.0"></a>137.32      Sec. 22. <ins><b>APPLICATION.</b></ins>&#10;138.1   <ins>Section 12 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, </ins>&#10;138.2   <ins>Scott, and Washington.</ins>&#10;&#10;<a id="go.11.0.0"></a>138.3                                          <b>ARTICLE 11</b>&#10;138.4                                      <b>LOCAL DEVELOPMENT</b>&#10;&#10;<a id="go.11.1.0"></a>138.5       Section 1. Minnesota Statutes 2004, section 383A.80, subdivision 4, is amended to &#10;138.6   read:&#10;138.7       Subd. 4. <b>Expiration.</b> The authority to impose the tax under this section expires &#10;138.8   January 1, <del>2008</del><ins> 2013</ins>.&#10;&#10;<a id="go.11.2.0"></a>138.9       Sec. 2. Minnesota Statutes 2004, section 383B.80, subdivision 4, is amended to read:&#10;138.10      Subd. 4. <b>Expiration.</b> The authority to impose the tax under this section expires &#10;138.11  January 1, <del>2008</del><ins> 2013</ins>.&#10;&#10;<a id="go.11.3.0"></a>138.12      Sec. 3. <ins><b>[383C.558] ST. LOUIS COUNTY DEED AND MORTGAGE TAX.</b></ins>&#10;138.13      <ins>Subdivision 1.</ins> <ins><b>Authority to impose; rate.</b></ins> <ins>(a) The governing body of St. Louis </ins>&#10;138.14  <ins>County may impose a mortgage registry and deed tax.</ins>&#10;138.15  <ins>(b) The rate of the mortgage registry tax equals .0001 of the principal.</ins>&#10;138.16  <ins>(c) The rate of the deed tax equals .0001 of the amount.</ins>&#10;138.17      <ins>Subd. 2.</ins> <ins><b>General law provisions apply.</b></ins> <ins>The taxes under this section apply to </ins>&#10;138.18  <ins>the same base and must be imposed, collected, administered, and enforced in the same </ins>&#10;138.19  <ins>manner as provided under chapter 287 for the state mortgage registry and deed taxes. </ins>&#10;138.20  <ins>All the provisions of chapter 287 apply to these taxes, except the rate is as specified in </ins>&#10;138.21  <ins>subdivision 1, the term "St. Louis County" must be substituted for "the state," and the </ins>&#10;138.22  <ins>revenue must be deposited as provided in subdivision 3.</ins>&#10;138.23      <ins>Subd. 3.</ins> <ins><b>Deposit of revenues.</b></ins> <ins>All revenues from the tax are for the use of the </ins>&#10;138.24  <ins>St. Louis County Board of Commissioners and must be deposited in the county's </ins>&#10;138.25  <ins>environmental response fund under section 383C.559.</ins>&#10;138.26      <ins>Subd. 4.</ins> <ins><b>Expiration.</b></ins> <ins>The authority to impose the tax under this section expires </ins>&#10;138.27  <ins>January 1, 2013.</ins>&#10;&#10;<a id="go.11.4.0"></a>138.28      Sec. 4. <ins><b>[383C.559] ST. LOUIS COUNTY ENVIRONMENTAL RESPONSE </b></ins>&#10;138.29  <ins><b>FUND.</b></ins>&#10;138.30      <ins>Subdivision 1.</ins> <ins><b>Creation.</b></ins> <ins>An environmental response fund is created for the </ins>&#10;138.31  <ins>purposes specified in this section. The taxes imposed by section 383C.558 must be </ins>&#10;139.1   <ins>deposited in the fund. The board of county commissioners shall administer the fund either </ins>&#10;139.2   <ins>as a county board, a housing and redevelopment authority, or a regional rail authority.</ins>&#10;139.3       <ins>Subd. 2.</ins> <ins><b>Uses of fund.</b></ins> <ins>The fund created in subdivision 1 must be used for the </ins>&#10;139.4   <ins>following purposes:</ins>&#10;139.5   <ins>(1) acquisition through purchase or condemnation of lands or property which are </ins>&#10;139.6   <ins>polluted or contaminated with hazardous substances;</ins>&#10;139.7   <ins>(2) paying the costs associated with indemnifying or holding harmless the </ins>&#10;139.8   <ins>entity taking title to lands or property from any liability arising out of the ownership, </ins>&#10;139.9   <ins>remediation, or use of the land or property;</ins>&#10;139.10  <ins>(3) paying for the costs of remediating the acquired land or property;</ins>&#10;139.11  <ins>(4) paying the costs associated with remediating lands or property which are polluted </ins>&#10;139.12  <ins>or contaminated with hazardous substances; or</ins>&#10;139.13  <ins>(5) paying for the costs associated with improving the property for economic </ins>&#10;139.14  <ins>development, recreational, housing, transportation or rail traffic.</ins>&#10;139.15      <ins>Subd. 3.</ins> <ins><b>Matching funds.</b></ins> <ins>In expending funds under this section, the county shall </ins>&#10;139.16  <ins>seek matching funds from contamination cleanup funds administered by the commissioner </ins>&#10;139.17  <ins>of the Department of Employment and Economic Development, the federal government, </ins>&#10;139.18  <ins>the private sector, and any other source.</ins>&#10;139.19      <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>The county may pledge the proceeds from the taxes imposed by </ins>&#10;139.20  <ins>section  </ins><ins>383C.558 </ins><ins> to bonds issued under this chapter and chapters 398A, 462, 469, and 475. </ins>&#10;139.21      <ins>Subd. 5.</ins> <ins><b>Land sales.</b></ins> <ins>Land or property acquired under this section may be resold </ins>&#10;139.22  <ins>at fair market value. Proceeds from the sale of the land must be deposited in the </ins>&#10;139.23  <ins>environmental response fund.</ins>&#10;139.24      <ins>Subd. 6.</ins> <ins><b>DOT assistance.</b></ins> <ins>The commissioner of transportation shall collaborate with </ins>&#10;139.25  <ins>the county and any affected municipality by providing technical assistance and support in </ins>&#10;139.26  <ins>cleaning up a contaminated site related to a trunk highway or railroad improvement.</ins>&#10;&#10;<a id="go.11.5.0"></a>139.27      Sec. 5. <ins><b>[383D.75] COUNTY DEED AND MORTGAGE TAX.</b></ins>&#10;139.28      <ins>Subdivision 1.</ins> <ins><b>Authority to impose; rate.</b></ins> <ins>(a) The governing body of Dakota </ins>&#10;139.29  <ins>County may impose a mortgage registry and deed tax.</ins>&#10;139.30  <ins>(b) The rate of the mortgage registry tax equals .0001 of the principal.</ins>&#10;139.31  <ins>(c) The rate of the deed tax equals .0001 of the amount.</ins>&#10;139.32      <ins>Subd. 2.</ins> <ins><b>General law provisions apply.</b></ins> <ins>The taxes under this section apply to </ins>&#10;139.33  <ins>the same base and must be imposed, collected, administered, and enforced in the same </ins>&#10;139.34  <ins>manner as provided under chapter 287 for the state mortgage registry and deed taxes. </ins>&#10;139.35  <ins>All the provisions of chapter 287 apply to these taxes, except the rate is as specified in </ins>&#10;140.1   <ins>subdivision 1, the term "Dakota County" must be substituted for "the state," and the </ins>&#10;140.2   <ins>revenue must be deposited as provided in subdivision 3.</ins>&#10;140.3       <ins>Subd. 3.</ins> <ins><b>Deposit of revenues.</b></ins> <ins>All revenues from the tax are for the use of </ins>&#10;140.4   <ins>the Dakota County Board of Commissioners and must be deposited in the county's </ins>&#10;140.5   <ins>environmental response fund under section  </ins><ins>383D.76.</ins>&#10;140.6       <ins>Subd. 4.</ins> <ins><b>Expiration.</b></ins> <ins>The authority to impose the tax under this section expires </ins>&#10;140.7   <ins>January 1, 2013.</ins>&#10;&#10;<a id="go.11.6.0"></a>140.8       Sec. 6. <ins><b>[383D.76] ENVIRONMENTAL RESPONSE FUND.</b></ins>&#10;140.9       <ins>Subdivision 1.</ins> <ins><b>Creation.</b></ins> <ins>An environmental response fund is created for the purposes </ins>&#10;140.10  <ins>specified in this section. The taxes imposed by section 383D.75 must be deposited in the </ins>&#10;140.11  <ins>fund. The Board of County Commissioners shall administer the fund either as a county </ins>&#10;140.12  <ins>board, a housing and redevelopment authority, or a regional rail authority.</ins>&#10;140.13      <ins>Subd. 2.</ins> <ins><b>Uses of fund.</b></ins> <ins>The fund created in subdivision 1 must be used for the </ins>&#10;140.14  <ins>following purposes:</ins>&#10;140.15  <ins>(1) acquisition through purchase or condemnation of lands or property which are </ins>&#10;140.16  <ins>polluted or contaminated with hazardous substances;</ins>&#10;140.17  <ins>(2) paying the costs associated with indemnifying or holding harmless the </ins>&#10;140.18  <ins>entity taking title to lands or property from any liability arising out of the ownership, </ins>&#10;140.19  <ins>remediation, or use of the land or property;</ins>&#10;140.20  <ins>(3) paying for the costs of remediating the acquired land or property;</ins>&#10;140.21  <ins>(4) paying the costs associated with remediating lands or property which are polluted </ins>&#10;140.22  <ins>or contaminated with hazardous substances; or</ins>&#10;140.23  <ins>(5) paying for the costs associated with improving the property for economic </ins>&#10;140.24  <ins>development, recreational, housing, transportation or rail traffic.</ins>&#10;140.25      <ins>Subd. 3.</ins> <ins><b>Matching funds.</b></ins> <ins>In expending funds under this section, the county shall </ins>&#10;140.26  <ins>seek matching funds from contamination cleanup funds administered by the commissioner </ins>&#10;140.27  <ins>of the Department of Employment and Economic Development, the Metropolitan Council, </ins>&#10;140.28  <ins>the federal government, the private sector, and any other source.</ins>&#10;140.29      <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>The county may pledge the proceeds from the taxes imposed by </ins>&#10;140.30  <ins>section  </ins><ins>383D.75</ins><ins> to bonds issued under this chapter and chapters 398A, 462, 469, and 475. </ins>&#10;140.31      <ins>Subd. 5.</ins> <ins><b>Land sales.</b></ins> <ins>Land or property acquired under this section may be resold </ins>&#10;140.32  <ins>at fair market value. Proceeds from the sale of the land must be deposited in the </ins>&#10;140.33  <ins>environmental response fund.</ins>&#10;141.1       <ins>Subd. 6.</ins> <ins><b>DOT assistance.</b></ins> <ins>The commissioner of transportation shall collaborate with </ins>&#10;141.2   <ins>the county and any affected municipality by providing technical assistance and support in </ins>&#10;141.3   <ins>cleaning up a contaminated site related to a trunk highway or railroad improvement.</ins>&#10;&#10;<a id="go.11.7.0"></a>141.4       Sec. 7. Minnesota Statutes 2005 Supplement, section 469.175, subdivision 2, is &#10;141.5   amended to read:&#10;141.6       Subd. 2. <b>Consultations; comment and filing.</b> (a) Before formation of a tax &#10;141.7   increment financing district, the authority shall provide the county auditor and clerk of &#10;141.8   the school board with the proposed tax increment financing plan for the district and the &#10;141.9   authority's estimate of the fiscal and economic implications of the proposed tax increment &#10;141.10  financing district. The authority must provide the proposed tax increment financing plan &#10;141.11  and the information on the fiscal and economic implications of the plan to the county &#10;141.12  auditor and the clerk of the school district board at least 30 days before the public hearing &#10;141.13  required by subdivision 3. The information on the fiscal and economic implications may &#10;141.14  be included in or as part of the tax increment financing plan. The county auditor and &#10;141.15  clerk of the school board shall provide copies to the members of the boards, as directed &#10;141.16  by their respective boards. The 30-day requirement is waived if the boards of the county &#10;141.17  and school district submit written comments on the proposal and any modification of the &#10;141.18  proposal to the authority after receipt of the information.&#10;141.19  (b) For purposes of this subdivision, "fiscal and economic implications of the &#10;141.20  proposed tax increment financing district" includes:&#10;141.21  (1) an estimate of the total amount of tax increment that will be generated over the &#10;141.22  life of the district;&#10;141.23  (2) a description of the probable impact of the district on city-provided services such &#10;141.24  as police and fire protection, public infrastructure, and <del>borrowing costs</del><ins> the impact of </ins>&#10;141.25  <ins>any general obligation tax increment bonds</ins> attributable to the district<ins> upon the ability to </ins>&#10;141.26  <ins>issue other debt for general fund purposes</ins>;&#10;141.27  (3) the estimated amount of tax increments over the life of the district that would &#10;141.28  be attributable to school district levies, assuming the school district's share of the total &#10;141.29  local tax rate for all taxing jurisdictions remained the same;&#10;141.30  (4) the estimated amount of tax increments over the life of the district that would be &#10;141.31  attributable to county levies, assuming the county's share of the total local tax rate for all &#10;141.32  taxing jurisdictions remained the same; and&#10;141.33  (5) <del>any</del> additional information<ins> regarding the size, timing, or type of development in </ins>&#10;141.34  <ins>the district</ins> requested by the county or the school district that would enable it to determine &#10;141.35  additional costs that will accrue to it due to the development proposed for the district.<ins> </ins>&#10;142.1   <ins>If a county or school district has not adopted standard questions in a written policy on </ins>&#10;142.2   <ins>information requested for fiscal and economic implications, a county or school district </ins>&#10;142.3   <ins>must request additional information no later than 15 days after receipt of the tax increment </ins>&#10;142.4   <ins>financing plan and the request does not require an additional 30 days of notice before </ins>&#10;142.5   <ins>the public hearing.</ins>&#10;142.6   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for proposed tax increment financing </ins>&#10;142.7   <ins>plans provided after June 30, 2006.</ins>&#10;&#10;<a id="go.11.8.0"></a>142.8       Sec. 8. Minnesota Statutes 2004, section 469.175, subdivision 4, is amended to read:&#10;142.9       Subd. 4. <b>Modification of plan.</b> (a) A tax increment financing plan may be modified &#10;142.10  by an authority.&#10;142.11  (b) The authority may make the following modifications only upon the notice and &#10;142.12  after the discussion, public hearing, and findings required for approval of the original plan:&#10;142.13  (1) any reduction or enlargement of geographic area of the project or tax increment &#10;142.14  financing district that does not meet the requirements of paragraph (e);&#10;142.15  (2) increase in amount of bonded indebtedness to be incurred;&#10;142.16  (3) a determination to capitalize interest on the debt if that determination was not a &#10;142.17  part of the original plan<del>, or to increase or decrease the amount of interest on the debt to </del>&#10;142.18  <del>be capitalized</del>;&#10;142.19  (4) increase in the portion of the captured net tax capacity to be retained by the &#10;142.20  authority;&#10;142.21  (5) increase in the estimate of the cost of the project, including administrative &#10;142.22  expenses, that will be paid or financed with tax increment from the district; or&#10;142.23  (6) designation of additional property to be acquired by the authority.&#10;142.24  (c) If an authority changes the type of district to another type of district, this change &#10;142.25  is not a modification but requires the authority to follow the procedure set forth in sections  &#10;142.26  469.174 to  469.179 for adoption of a new plan, including certification of the net tax &#10;142.27  capacity of the district by the county auditor. &#10;142.28  (d) If a redevelopment district or a renewal and renovation district is enlarged, &#10;142.29  the reasons and supporting facts for the determination that the addition to the district &#10;142.30  meets the criteria of section  469.174, subdivision 10, paragraph (a), clauses (1) and (2), &#10;142.31  or subdivision 10a, must be documented. &#10;142.32  (e) The requirements of paragraph (b) do not apply if (1) the only modification is &#10;142.33  elimination of parcels from the project or district and (2)(A) the current net tax capacity &#10;142.34  of the parcels eliminated from the district equals or exceeds the net tax capacity of &#10;142.35  those parcels in the district's original net tax capacity or (B) the authority agrees that, &#10;143.1   notwithstanding section  469.177, subdivision 1, the original net tax capacity will be &#10;143.2   reduced by no more than the current net tax capacity of the parcels eliminated from the &#10;143.3   district. The authority must notify the county auditor of any modification that reduces or &#10;143.4   enlarges the geographic area of a district or a project area. &#10;143.5   (f) The geographic area of a tax increment financing district may be reduced, but &#10;143.6   shall not be enlarged after five years following the date of certification of the original net &#10;143.7   tax capacity by the county auditor or after August 1, 1984, for tax increment financing &#10;143.8   districts authorized prior to August 1, 1979.&#10;143.9   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for all districts, regardless of when </ins>&#10;143.10  <ins>the request for certification was made, and applies to plan amendments adopted after the </ins>&#10;143.11  <ins>day following final enactment.</ins>&#10;&#10;<a id="go.11.9.0"></a>143.12      Sec. 9. Minnesota Statutes 2005 Supplement, section 469.175, subdivision 5, is &#10;143.13  amended to read:&#10;143.14      Subd. 5. <b>Annual disclosure.</b> An annual statement showing for each district the &#10;143.15  information required to be reported under subdivision 6, paragraph (c), clauses (1), (2), &#10;143.16  (3), (11), (12), (18), and (19); the amounts of tax increment received and expended in the &#10;143.17  reporting period; and any additional information the authority deems necessary must be &#10;143.18  published in a newspaper of general circulation in the municipality that approved the &#10;143.19  tax increment financing plan. The annual statement must inform readers that additional &#10;143.20  information regarding each district may be obtained from the authority, and must explain &#10;143.21  how the additional information may be requested. The authority must publish the annual &#10;143.22  statement for a year no later than August 15 of the next year. The authority must identify &#10;143.23  the newspaper of general circulation in the municipality to which the annual statement has &#10;143.24  been or will be submitted for publication and provide a copy of the annual statement to the &#10;143.25  county board, the county auditor, <del>the school board,</del> the state auditor, and, if the authority is &#10;143.26  other than the municipality, the governing body of the municipality on or before August &#10;143.27  1 of the year in which the statement must be published.&#10;143.28  The disclosure requirements imposed by this subdivision apply to districts certified &#10;143.29  before, on, or after August 1, 1979.&#10;143.30  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for disclosures required to be </ins>&#10;143.31  <ins>provided after June 30, 2006.</ins>&#10;&#10;<a id="go.11.10.0"></a>143.32      Sec. 10. Minnesota Statutes 2004, section 469.176, subdivision 1, is amended to read:&#10;144.1       Subdivision 1. <b>Duration of tax increment financing districts.</b> (a) Subject to the &#10;144.2   limitations contained in subdivisions 1a to 1f, any tax increment financing district as to &#10;144.3   which bonds are outstanding, payment for which the tax increment and other revenues &#10;144.4   have been pledged, shall remain in existence at least as long as the bonds continue to be &#10;144.5   outstanding. The municipality may, at the time of approval of the initial tax increment &#10;144.6   financing plan, provide for a shorter maximum duration limit than specified in subdivisions &#10;144.7   1a to 1f. The specified limit applies in place of the otherwise applicable limit<ins>, unless the </ins>&#10;144.8   <ins>authority modifies the plan following the procedures under section 469.175, subdivision 4, </ins>&#10;144.9   <ins>paragraph (b)</ins>.&#10;144.10  (b) The tax increment pledged to the payment of the bonds and interest thereon may &#10;144.11  be discharged and the tax increment financing district may be terminated if sufficient funds &#10;144.12  have been irrevocably deposited in the debt service fund or other escrow account held in &#10;144.13  trust for all outstanding bonds to provide for the payment of the bonds at maturity or date &#10;144.14  of redemption and interest thereon to the maturity or redemption date.&#10;144.15  (c) For bonds issued pursuant to section  469.178, subdivisions 2 and 3, the full &#10;144.16  faith and credit and any taxing powers of the municipality or authority are pledged to the &#10;144.17  payment of the bonds until the principal of and interest on the bonds has been paid in full. &#10;144.18  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for all districts, regardless of when </ins>&#10;144.19  <ins>the request for certification was made, and applies to plan amendments adopted after the </ins>&#10;144.20  <ins>day following final enactment.</ins>&#10;&#10;<a id="go.11.11.0"></a>144.21      Sec. 11. Minnesota Statutes 2004, section 469.176, subdivision 3, is amended to read:&#10;144.22      Subd. 3. <b>Limitation on administrative expenses.</b> (a) For districts for which &#10;144.23  certification was requested before August 1, 1979, or after June 30, 1982 and before &#10;144.24  August 1, 2001, no tax increment shall be used to pay any administrative expenses for &#10;144.25  a project which exceed ten percent of the total estimated tax increment expenditures &#10;144.26  authorized by the tax increment financing plan or the total tax increment expenditures &#10;144.27  for the project, whichever is less.&#10;144.28  (b) For districts for which certification was requested after July 31, 1979, and before &#10;144.29  July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in &#10;144.30  Minnesota Statutes 1980, section  273.73, for a district which exceeds five percent of the &#10;144.31  total tax increment expenditures authorized by the tax increment financing plan or the total &#10;144.32  estimated tax increment expenditures for the district, whichever is less. &#10;144.33  (c) For districts for which certification was requested after July 31, 2001, no tax &#10;144.34  increment may be used to pay any administrative expenses for a project which exceed &#10;144.35  ten percent of total estimated tax increment expenditures authorized by the tax increment &#10;145.1   financing plan or the total tax increments, as defined in section  469.174, subdivision 25, &#10;145.2   clause (1), from the district, whichever is less. &#10;145.3   <ins>(d) No administrative expenses or consulting costs incurred before certification of a </ins>&#10;145.4   <ins>district may be paid from tax increments.</ins>&#10;&#10;<a id="go.11.12.0"></a>145.5       Sec. 12. Minnesota Statutes 2005 Supplement, section 469.1763, subdivision 2, &#10;145.6   is amended to read:&#10;145.7       Subd. 2. <b>Expenditures outside district.</b> (a) For each tax increment financing &#10;145.8   district, an amount equal to at least 75 percent of the total revenue derived from tax &#10;145.9   increments paid by properties in the district must be expended on activities in the district &#10;145.10  or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities &#10;145.11  in the district or to pay, or secure payment of, debt service on credit enhanced bonds. &#10;145.12  For districts, other than redevelopment districts for which the request for certification &#10;145.13  was made after June 30, 1995, the in-district percentage for purposes of the preceding &#10;145.14  sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax &#10;145.15  increments paid by properties in the district may be expended, through a development fund &#10;145.16  or otherwise, on activities outside of the district but within the defined geographic area of &#10;145.17  the project except to pay, or secure payment of, debt service on credit enhanced bonds. &#10;145.18  For districts, other than redevelopment districts for which the request for certification was &#10;145.19  made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is &#10;145.20  20 percent. The revenue derived from tax increments for the district that are expended on &#10;145.21  costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before &#10;145.22  calculating the percentages that must be expended within and without the district.&#10;145.23  (b) In the case of a housing district, a housing project, as defined in section 469.174, &#10;145.24  subdivision 11, is an activity in the district.&#10;145.25  (c) All administrative expenses are for activities outside of the district, except that &#10;145.26  if the only expenses for activities outside of the district under this subdivision are for &#10;145.27  the purposes described in paragraph (d), administrative expenses will be considered as &#10;145.28  expenditures for activities in the district.&#10;145.29  (d) The authority may elect, in the tax increment financing plan for the district, &#10;145.30  to increase by up to ten percentage points the permitted amount of expenditures for &#10;145.31  activities located outside the geographic area of the district under paragraph (a). As &#10;145.32  permitted by section 469.176, subdivision 4k, the expenditures, including the permitted &#10;145.33  expenditures under paragraph (a), need not be made within the geographic area of the &#10;145.34  project. Expenditures that meet the requirements of this paragraph are legally permitted &#10;146.1   expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. &#10;146.2   To qualify for the increase under this paragraph, the expenditures must:&#10;146.3   (1) be used exclusively to assist housing that meets the requirement for a qualified &#10;146.4   low-income building, as that term is used in section 42 of the Internal Revenue Code;&#10;146.5   (2) not exceed the qualified basis of the housing, as defined under section 42(c) of &#10;146.6   the Internal Revenue Code, less the amount of any credit allowed under section 42 of &#10;146.7   the Internal Revenue Code; and&#10;146.8   (3) be used to:&#10;146.9   (i) acquire and prepare the site of the housing;&#10;146.10  (ii) acquire, construct, or rehabilitate the housing; or&#10;146.11  (iii) make public improvements directly related to the housing.&#10;146.12  (e) For a district created within a biotechnology and health sciences industry zone &#10;146.13  as defined in section 469.330, subdivision 6, <ins>or for an existing district located within </ins>&#10;146.14  <ins>such a zone, </ins> tax increment derived from such a district may be expended outside of &#10;146.15  the district but within the zone only for expenditures required for the construction of &#10;146.16  public infrastructure necessary to support the activities of the zone.<ins> Public infrastructure </ins>&#10;146.17  <ins>expenditures are considered as expenditures for activities within the district.</ins>&#10;&#10;<a id="go.11.13.0"></a>146.18      Sec. 13. Minnesota Statutes 2004, section 469.1763, subdivision 3, is amended to read:&#10;146.19      Subd. 3. <b>Five-year rule.</b> (a) Revenues derived from tax increments are considered &#10;146.20  to have been expended on an activity within the district under subdivision 2 only if one &#10;146.21  of the following occurs:&#10;146.22  (1) before or within five years after certification of the district, the revenues are &#10;146.23  actually paid to a third party with respect to the activity;&#10;146.24  (2) bonds, the proceeds of which must be used to finance the activity, are issued and &#10;146.25  sold to a third party before or within five years after certification, the revenues are spent &#10;146.26  to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, &#10;146.27  reasonably expected to be spent before the end of the later of (i) the five-year period, or &#10;146.28  (ii) a reasonable temporary period within the meaning of the use of that term under section &#10;146.29  148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve &#10;146.30  or replacement fund;&#10;146.31  (3) binding contracts with a third party are entered into for performance of the &#10;146.32  activity before or within five years after certification of the district and the revenues are &#10;146.33  spent under the contractual obligation;&#10;147.1   (4) costs with respect to the activity are paid before or within five years after &#10;147.2   certification of the district and the revenues are spent to reimburse a party for payment &#10;147.3   of the costs, including interest on unreimbursed costs; or&#10;147.4   (5) expenditures are made for housing purposes as permitted by subdivision 2, &#10;147.5   <del>paragraph</del> <ins>paragraphs </ins>(b)<ins> and (d), or for public infrastructure purposes within a zone as </ins>&#10;147.6   <ins>permitted by subdivision 2, paragraph (e)</ins>.&#10;147.7   (b) For purposes of this subdivision, bonds include subsequent refunding bonds if &#10;147.8   the original refunded bonds meet the requirements of paragraph (a), clause (2).&#10;&#10;<a id="go.11.14.0"></a>147.9       Sec. 14. Minnesota Statutes 2004, section 469.1763, subdivision 4, is amended to read:&#10;147.10      Subd. 4. <b>Use of revenues for decertification.</b> (a) In each year beginning with the &#10;147.11  sixth year following certification of the district, if the applicable in-district percent of the &#10;147.12  revenues derived from tax increments paid by properties in the district exceeds the amount &#10;147.13  of expenditures that have been made for costs permitted under subdivision 3, an amount &#10;147.14  equal to the difference between the in-district percent of the revenues derived from tax &#10;147.15  increments paid by properties in the district and the amount of expenditures that have &#10;147.16  been made for costs permitted under subdivision 3 must be used and only used to pay or &#10;147.17  defease the following or be set aside to pay the following:&#10;147.18  (1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b);&#10;147.19  (2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4); <del>or</del>&#10;147.20  (3) credit enhanced bonds to which the revenues derived from tax increments are &#10;147.21  pledged, but only to the extent that revenues of the district for which the credit enhanced &#10;147.22  bonds were issued are insufficient to pay the bonds and to the extent that the increments &#10;147.23  from the applicable pooling percent share for the district are insufficient<ins>; or</ins>&#10;147.24  <ins>(4) the amount provided by the tax increment financing plan to be paid under </ins>&#10;147.25  <ins>subdivision 2, paragraphs (b), (d), and (e)</ins>.&#10;147.26  (b) <ins>The district must be decertified and the pledge of tax increment discharged </ins>&#10;147.27  when the outstanding bonds have been defeased and when sufficient money has been set &#10;147.28  aside to pay<ins>, based on the increment to be collected through the end of the calendar year, </ins>&#10;147.29  <ins>the following amounts:</ins> &#10;147.30  <ins>(1)</ins> contractual obligations as defined in subdivision 3, paragraph (a), clauses (3) and &#10;147.31  (4)<del>, the district must be decertified and the pledge of tax increment discharged.</del><ins>;</ins>&#10;147.32  <ins>(2) the amount specified in the tax increment financing plan for activities qualifying </ins>&#10;147.33  <ins>under subdivision 2, paragraph (b), that have not been funded with the proceeds of </ins>&#10;147.34  <ins>bonds; and</ins>&#10;148.1   <ins>(3) the additional expenditures permitted by the tax increment financing plan for </ins>&#10;148.2   <ins>housing activities under an election under subdivision 2, paragraph (d), that have not </ins>&#10;148.3   <ins>been funded with the proceeds of bonds.</ins>&#10;148.4   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for districts for which the request for </ins>&#10;148.5   <ins>certification was made after April 30, 1990.</ins>&#10;&#10;<a id="go.11.15.0"></a>148.6       Sec. 15. Minnesota Statutes 2005 Supplement, section 469.1763, subdivision 6, &#10;148.7   is amended to read:&#10;148.8       Subd. 6. <b>Pooling permitted for deficits.</b> (a) This subdivision applies only to &#10;148.9   districts for which the request for certification was made before August 1, 2001, and &#10;148.10  without regard to whether the request for certification was made prior to August 1, 1979.&#10;148.11  (b) The municipality for the district may transfer available increments from another &#10;148.12  tax increment financing district located in the municipality, if the transfer is necessary to &#10;148.13  eliminate a deficit in the district to which the increments are transferred. <ins>The municipality </ins>&#10;148.14  <ins>may transfer increments as provided by this subdivision without regard to whether the </ins>&#10;148.15  <ins>transfer or expenditure is authorized by the tax increment financing plan for the district </ins>&#10;148.16  <ins>from which the transfer is made. </ins>A deficit in the district for purposes of this subdivision &#10;148.17  means the lesser of the following two amounts:&#10;148.18  (1)(i) the amount due during the calendar year to pay preexisting obligations of &#10;148.19  the district; minus&#10;148.20  (ii) the total increments collected or to be collected from properties located within &#10;148.21  the district that are available for the calendar year including amounts collected in prior &#10;148.22  years that are currently available; plus&#10;148.23  (iii) total increments from properties located in other districts in the municipality &#10;148.24  including amounts collected in prior years that are available to be used to meet the &#10;148.25  district's obligations under this section, excluding this subdivision, or other provisions of &#10;148.26  law (but excluding a special tax under section 469.1791 and the grant program under Laws &#10;148.27  1997, chapter 231, article 1, section 19, or Laws 2001, First Special Session chapter 5); or&#10;148.28  (2) the reduction in increments collected from properties located in the district for &#10;148.29  the calendar year as a result of the changes in class rates in Laws 1997, chapter 231, article &#10;148.30  1; Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, and Laws 2001, First &#10;148.31  Special Session chapter 5, or the elimination of the general education tax levy under &#10;148.32  Laws 2001, First Special Session chapter 5.&#10;148.33  The authority may compute the deficit amount under clause (1) only (without regard &#10;148.34  to the limit under clause (2)) if the authority makes an irrevocable commitment, by &#10;148.35  resolution, to use increments from the district to which increments are to be transferred and &#10;149.1   any transferred increments are only used to pay preexisting obligations and administrative &#10;149.2   expenses for the district that are required to be paid under section 469.176, subdivision &#10;149.3   4h, paragraph (a).&#10;149.4   (c) A preexisting obligation means:&#10;149.5   (1) bonds issued and sold before August 1, 2001, or bonds issued pursuant to a &#10;149.6   binding contract requiring the issuance of bonds entered into before July 1, 2001, and &#10;149.7   bonds issued to refund such bonds or to reimburse expenditures made in conjunction with &#10;149.8   a signed contractual agreement entered into before August 1, 2001, to the extent that the &#10;149.9   bonds are secured by a pledge of increments from the tax increment financing district; and&#10;149.10  (2) binding contracts entered into before August 1, 2001, to the extent that the &#10;149.11  contracts require payments secured by a pledge of increments from the tax increment &#10;149.12  financing district.&#10;149.13  (d) The municipality may require a development authority, other than a seaway port &#10;149.14  authority, to transfer available increments including amounts collected in prior years that &#10;149.15  are currently available for any of its tax increment financing districts in the municipality to &#10;149.16  make up an insufficiency in another district in the municipality, regardless of whether the &#10;149.17  district was established by the development authority or another development authority. &#10;149.18  This authority applies notwithstanding any law to the contrary, but applies only to a &#10;149.19  development authority that:&#10;149.20  (1) was established by the municipality; or&#10;149.21  (2) the governing body of which is appointed, in whole or part, by the municipality &#10;149.22  or an officer of the municipality or which consists, in whole or part, of members of &#10;149.23  the governing body of the municipality. The municipality may use this authority only &#10;149.24  after it has first used all available increments of the receiving development authority to &#10;149.25  eliminate the insufficiency and exercised any permitted action under section 469.1792, &#10;149.26  subdivision 3, for preexisting districts of the receiving development authority to eliminate &#10;149.27  the insufficiency.&#10;149.28  (e) The authority under this subdivision to spend tax increments outside of the area &#10;149.29  of the district from which the tax increments were collected:&#10;149.30  (1) is an exception to the restrictions under section 469.176, subdivisions 4b, 4c, &#10;149.31  4d, 4e, 4i, and 4j; the expenditure limits under section 469.176, subdivision 1c; and the &#10;149.32  other provisions of this section; and the percentage restrictions under subdivision 2 must &#10;149.33  be calculated after deducting increments spent under this subdivision from the total &#10;149.34  increments for the district; and&#10;150.1   (2) applies notwithstanding the provisions of the Tax Increment Financing Act in &#10;150.2   effect for districts for which the request for certification was made before June 30, 1982, &#10;150.3   or any other law to the contrary.&#10;150.4   (f) If a preexisting obligation requires the development authority to pay an amount &#10;150.5   that is limited to the increment from the district or a specific development within the &#10;150.6   district and if the obligation requires paying a higher amount to the extent that increments &#10;150.7   are available, the municipality may determine that the amount due under the preexisting &#10;150.8   obligation equals the higher amount and may authorize the transfer of increments &#10;150.9   under this subdivision to pay up to the higher amount. The existence of a guarantee of &#10;150.10  obligations by the individual or entity that would receive the payment under this paragraph &#10;150.11  is disregarded in the determination of eligibility to pool under this subdivision. The &#10;150.12  authority to transfer increments under this paragraph may only be used to the extent &#10;150.13  that the payment of all other preexisting obligations in the municipality due during the &#10;150.14  calendar year have been satisfied.&#10;150.15  (g) For transfers of increments made in calendar year 2005 and later, the reduction in &#10;150.16  increments as a result of the elimination of the general education tax levy for purposes of &#10;150.17  paragraph (b), clause (2), for a taxes payable year equals the general education tax rate &#10;150.18  for the school district under Minnesota Statutes 2000, section 273.1382, subdivision 1, &#10;150.19  for taxes payable in 2001, multiplied by the captured tax capacity of the district for the &#10;150.20  current taxes payable year.&#10;150.21  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for all districts, regardless of when </ins>&#10;150.22  <ins>the request for certification was made, and applies retroactively to any transfer made </ins>&#10;150.23  <ins>under subdivision 6.</ins>&#10;&#10;<a id="go.11.16.0"></a>150.24      Sec. 16. Minnesota Statutes 2005 Supplement, section 469.177, subdivision 1, is &#10;150.25  amended to read:&#10;150.26      Subdivision 1. <b>Original net tax capacity.</b> (a) Upon or after adoption of a tax &#10;150.27  increment financing plan, the auditor of any county in which the district is situated shall, &#10;150.28  upon request of the authority, certify the original net tax capacity of the tax increment &#10;150.29  financing district and that portion of the district overlying any subdistrict as described in &#10;150.30  the tax increment financing plan and shall certify in each year thereafter the amount by &#10;150.31  which the original net tax capacity has increased or decreased as a result of a change in tax &#10;150.32  exempt status of property within the district and any subdistrict, reduction or enlargement &#10;150.33  of the district or changes pursuant to subdivision 4.&#10;150.34  (b) If the classification under section 273.13 of property located in a district changes &#10;150.35  to a classification that has a different assessment ratio, the original net tax capacity of that &#10;151.1   property must be redetermined at the time when its use is changed as if the property had &#10;151.2   originally been classified in the same class in which it is classified after its use is changed.&#10;151.3   (c) The amount to be added to the original net tax capacity of the district as a result of &#10;151.4   previously tax exempt real property within the district becoming taxable equals the net tax &#10;151.5   capacity of the real property as most recently assessed pursuant to section 273.18 or, if that &#10;151.6   assessment was made more than one year prior to the date of title transfer rendering the &#10;151.7   property taxable, the net tax capacity assessed by the assessor at the time of the transfer. &#10;151.8   If improvements are made to tax exempt property after <del>certification of</del><ins> the municipality </ins>&#10;151.9   <ins>approves</ins> the district and before the parcel becomes taxable, the assessor shall, at the &#10;151.10  request of the authority, separately assess the estimated market value of the improvements. &#10;151.11  If the property becomes taxable, the county auditor shall add to original net tax capacity, &#10;151.12  the net tax capacity of the parcel, excluding the separately assessed improvements. If &#10;151.13  substantial taxable improvements were made to a parcel after certification of the district &#10;151.14  and if the property later becomes tax exempt, in whole or part, as a result of the authority &#10;151.15  acquiring the property through foreclosure or exercise of remedies under a lease or other &#10;151.16  revenue agreement or as a result of tax forfeiture, the amount to be added to the original &#10;151.17  net tax capacity of the district as a result of the property again becoming taxable is the &#10;151.18  amount of the parcel's value that was included in original net tax capacity when the parcel &#10;151.19  was first certified. The amount to be added to the original net tax capacity of the district &#10;151.20  as a result of enlargements equals the net tax capacity of the added real property as most &#10;151.21  recently certified by the commissioner of revenue as of the date of modification of the tax &#10;151.22  increment financing plan pursuant to section 469.175, subdivision 4.&#10;151.23  (d) If the net tax capacity of a property increases because the property no longer &#10;151.24  qualifies under the Minnesota Agricultural Property Tax Law, section 273.111; the &#10;151.25  Minnesota Open Space Property Tax Law, section 273.112; or the Metropolitan &#10;151.26  Agricultural Preserves Act, chapter 473H, or because platted, unimproved property is &#10;151.27  improved or market value is increased after approval of the plat under section 273.11, &#10;151.28  subdivision 14, 14a, or 14b, the increase in net tax capacity must be added to the original &#10;151.29  net tax capacity.&#10;151.30  (e) The amount to be subtracted from the original net tax capacity of the district &#10;151.31  as a result of previously taxable real property within the district becoming tax exempt, &#10;151.32  or a reduction in the geographic area of the district, shall be the amount of original net &#10;151.33  tax capacity initially attributed to the property becoming tax exempt or being removed &#10;151.34  from the district. If the net tax capacity of property located within the tax increment &#10;151.35  financing district is reduced by reason of a court-ordered abatement, stipulation agreement, &#10;151.36  voluntary abatement made by the assessor or auditor or by order of the commissioner of &#10;152.1   revenue, the reduction shall be applied to the original net tax capacity of the district when &#10;152.2   the property upon which the abatement is made has not been improved since the date of &#10;152.3   certification of the district and to the captured net tax capacity of the district in each year &#10;152.4   thereafter when the abatement relates to improvements made after the date of certification. &#10;152.5   The county auditor may specify reasonable form and content of the request for certification &#10;152.6   of the authority and any modification thereof pursuant to section 469.175, subdivision 4.&#10;152.7   (f) If a parcel of property contained a substandard building that was demolished &#10;152.8   or removed and if the authority elects to treat the parcel as occupied by a substandard &#10;152.9   building under section 469.174, subdivision 10, paragraph (b), the auditor shall certify the &#10;152.10  original net tax capacity of the parcel using the greater of (1) the current net tax capacity &#10;152.11  of the parcel, or (2) the estimated market value of the parcel for the year in which the &#10;152.12  building was demolished or removed, but applying the class rates for the current year.&#10;152.13  (g) For a redevelopment district qualifying under section 469.174, subdivision 10, &#10;152.14  paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of &#10;152.15  the land as the original tax capacity for any parcel in the district that contains a building &#10;152.16  that suffered substantial damage as a result of the disaster or emergency.&#10;152.17  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for improvements made to tax </ins>&#10;152.18  <ins>exempt property made after June 30, 2006.</ins>&#10;&#10;<a id="go.11.17.0"></a>152.19      Sec. 17. Minnesota Statutes 2004, section 469.1771, subdivision 2a, is amended to &#10;152.20  read:&#10;152.21      Subd. 2a. <b>Suspension of distribution of tax increment.</b> (a) If an authority fails to &#10;152.22  make a disclosure or to submit a report containing the information required by section  &#10;152.23  469.175, subdivisions 5 and 6, regarding a tax increment financing district within the &#10;152.24  time provided in section  469.175, subdivisions 5 and 6, the state auditor shall mail to &#10;152.25  the authority a written notice that it or the municipality has failed to make the required &#10;152.26  disclosure or to submit a required report with respect to a particular district. The state &#10;152.27  auditor shall mail the notice on or before the third Tuesday of August of the year in which &#10;152.28  the disclosure or report was required to be made or submitted. The notice must describe &#10;152.29  the consequences of failing to disclose or submit a report as provided in paragraph (b). &#10;152.30  If the state auditor has not received a copy of a disclosure or a report described in this &#10;152.31  paragraph on or before the <del>third Tuesday of November</del><ins> first day of October</ins> of the year &#10;152.32  in which the disclosure or report was required to be made or submitted, the state auditor &#10;152.33  shall mail a written notice to the county auditor to hold the distribution of tax increment &#10;152.34  from a particular district. &#10;153.1   (b) Upon receiving written notice from the state auditor to hold the distribution of &#10;153.2   tax increment, the county auditor shall hold:&#10;153.3   (1) <del>25</del><ins> 100</ins> percent of the amount of tax increment that otherwise would be &#10;153.4   distributed, if the distribution is made after the <del>third Friday in November</del><ins> first day of </ins>&#10;153.5   <ins>October</ins> but during the year in which the disclosure or report was required to be made or &#10;153.6   submitted; or&#10;153.7   (2) 100 percent of the amount of tax increment that otherwise would be distributed, &#10;153.8   if the distribution is made after December 31 of the year in which the disclosure or report &#10;153.9   was required to be made or submitted.&#10;153.10  (c) Upon receiving the copy of the disclosure and all of the reports described in &#10;153.11  paragraph (a) with respect to a district regarding which the state auditor has mailed to the &#10;153.12  county auditor a written notice to hold distribution of tax increment, the state auditor shall &#10;153.13  mail to the county auditor a written notice lifting the hold and authorizing the county &#10;153.14  auditor to distribute to the authority or municipality any tax increment that the county &#10;153.15  auditor had held pursuant to paragraph (b). The state auditor shall mail the written notice &#10;153.16  required by this paragraph within five working days after receiving the last outstanding &#10;153.17  item. The county auditor shall distribute the tax increment to the authority or municipality &#10;153.18  within 15 working days after receiving the written notice required by this paragraph.&#10;153.19  (d) Notwithstanding any law to the contrary, any interest that accrues on tax &#10;153.20  increment while it is being held by the county auditor pursuant to paragraph (b) is not tax &#10;153.21  increment and may be retained by the county.&#10;153.22  (e) For purposes of sections  469.176, subdivisions 1a to 1g, and  469.177, subdivision &#10;153.23  11, tax increment being held by the county auditor pursuant to paragraph (b) is considered &#10;153.24  distributed to or received by the authority or municipality as of the time that it would have &#10;153.25  been distributed or received but for paragraph (b). &#10;153.26  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for disclosures and reports required </ins>&#10;153.27  <ins>to be filed after December 30, 2006.</ins>&#10;&#10;<a id="go.11.18.0"></a>153.28      Sec. 18. Minnesota Statutes 2004, section 469.312, subdivision 5, is amended to read:&#10;153.29      Subd. 5. <b>Duration limit.</b> <ins>(a) </ins>The maximum duration of a zone is 12 years. The &#10;153.30  applicant may request a shorter duration. The commissioner may specify a shorter &#10;153.31  duration, regardless of the requested duration.&#10;153.32  <ins>(b) The duration limit under this subdivision and the duration of the zone for </ins>&#10;153.33  <ins>purposes of allowance of tax incentives described in section 469.315 is extended by three </ins>&#10;153.34  <ins>calendar years for each parcel of property that meets the following requirements:</ins>&#10;154.1   <ins>(1) the qualified business operates an ethanol plant, as defined in section 41A.09, on </ins>&#10;154.2   <ins>the site that includes the parcel; and </ins>&#10;154.3   <ins>(2) the business subsidy agreement was executed after April 30, 2006.</ins>&#10;154.4   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.11.19.0"></a>154.5       Sec. 19. Minnesota Statutes 2004, section 475.58, subdivision 1, is amended to read:&#10;154.6       Subdivision 1. <b>Approval by electors; exceptions.</b> Obligations authorized by law or &#10;154.7   charter may be issued by any municipality upon obtaining the approval of a majority of &#10;154.8   the electors voting on the question of issuing the obligations, but an election shall not be &#10;154.9   required to authorize obligations issued:&#10;154.10  (1) to pay any unpaid judgment against the municipality;&#10;154.11  (2) for refunding obligations;&#10;154.12  (3) for an improvement or improvement program, which obligation is payable &#10;154.13  wholly or partly from the proceeds of special assessments levied upon property specially &#10;154.14  benefited by the improvement or by an improvement within the improvement program, or &#10;154.15  <del>of taxes levied upon the increased value of property within a district for the development of </del>&#10;154.16  <del>which the improvement is undertaken</del><ins> from tax increments, as defined in section 469.174, </ins>&#10;154.17  <ins>subdivision 25</ins>, including obligations which are the general obligations of the municipality, &#10;154.18  if the municipality is entitled to reimbursement in whole or in part from the proceeds of &#10;154.19  such special assessments or <del>taxes</del><ins> tax increments</ins> and not less than 20 percent of the cost of &#10;154.20  the improvement or the improvement program is to be assessed against benefited property &#10;154.21  or is to be paid from the proceeds of federal grant funds or a combination thereof, or is &#10;154.22  estimated to be received from <del>such taxes within the district</del><ins> tax increments</ins>;&#10;154.23  (4) payable wholly from the income of revenue producing conveniences;&#10;154.24  (5) under the provisions of a home rule charter which permits the issuance of &#10;154.25  obligations of the municipality without election;&#10;154.26  (6) under the provisions of a law which permits the issuance of obligations of a &#10;154.27  municipality without an election;&#10;154.28  (7) to fund pension or retirement fund liabilities pursuant to section  475.52, &#10;154.29  subdivision 6; &#10;154.30  (8) under a capital improvement plan under section  373.40; and &#10;154.31  (9) under sections  469.1813 to  469.1815 (property tax abatement authority bonds), if &#10;154.32  the proceeds of the bonds are not used for a purpose prohibited under section  469.176, &#10;154.33  subdivision 4g, paragraph (b). &#10;154.34  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.11.20.0"></a>155.1       Sec. 20. Laws 1994, chapter 587, article 9, section 20, subdivision 1, is amended to &#10;155.2   read:&#10;155.3    &#10;155.4       Subdivision 1. <b>Establishment.</b> The city of Brooklyn Park may establish an &#10;155.5   economic development tax increment financing district in which <del>15 percent </del><ins>all </ins>of the &#10;155.6   revenue generated from tax increment in any year <ins>that is not expended pursuant to a </ins>&#10;155.7   <ins>pledge given or encumbrance created before January 1, 2006, </ins>is deposited in the housing &#10;155.8   development account of the authority and expended according to the tax increment &#10;155.9   financing plan.&#10;&#10;<a id="go.11.21.0"></a>155.10      Sec. 21. Laws 1994, chapter 587, article 9, section 20, subdivision 2, is amended to &#10;155.11  read:&#10;155.12   &#10;155.13      Subd. 2. <b>Eligible activities.</b> The authority must identify in the plan the housing &#10;155.14  activities that will be assisted by the housing development account.  Housing activities &#10;155.15  may include rehabilitation, acquisition, demolition, and financing of new or existing &#10;155.16  single family or multifamily housing.  Housing activities listed in the plan need not be &#10;155.17  located within the district or project area but must be activities that meet the requirements &#10;155.18  of a qualified housing district under Minnesota Statutes, section <del>273.1399 or </del>469.1761, &#10;155.19  subdivision 2<ins>, for owner-occupied housing or 469.174, subdivision 29, clause (1), for </ins>&#10;155.20  <ins>rental housing</ins>.&#10;&#10;<a id="go.11.22.0"></a>155.21      Sec. 22. <ins><b>ANOKA COUNTY DEED AND MORTGAGE TAX.</b></ins>&#10;155.22      <ins>Subdivision 1.</ins> <ins><b>Authority to impose; rate.</b></ins> <ins>(a) The governing body of Anoka </ins>&#10;155.23  <ins>County may impose a mortgage registry and deed tax.</ins>&#10;155.24  <ins>(b) The rate of the mortgage registry tax equals .0001 of the principal.</ins>&#10;155.25  <ins>(c) The rate of the deed tax equals .0001 of the amount.</ins>&#10;155.26      <ins>Subd. 2.</ins> <ins><b>General law provisions apply.</b></ins> <ins>The taxes under this section apply to </ins>&#10;155.27  <ins>the same base and must be imposed, collected, administered, and enforced in the same </ins>&#10;155.28  <ins>manner as provided under chapter 287 for the state mortgage registry and deed taxes. </ins>&#10;155.29  <ins>All the provisions of chapter 287 apply to these taxes, except the rate is as specified </ins>&#10;155.30  <ins>in subdivision 1, the term "Anoka County" must be substituted for "the state," and the </ins>&#10;155.31  <ins>revenue must be deposited as provided in subdivision 3.</ins>&#10;155.32      <ins>Subd. 3.</ins> <ins><b>Deposit of revenues.</b></ins> <ins>All revenues from the tax are for the use of the Anoka </ins>&#10;155.33  <ins>County Board of Commissioners and must be deposited in the county's environmental </ins>&#10;155.34  <ins>response fund under section 15.</ins>&#10;156.1       <ins>Subd. 4.</ins> <ins><b>Expiration.</b></ins> <ins>The authority to impose the tax under this section expires </ins>&#10;156.2   <ins>January 1, 2013.</ins>&#10;&#10;<a id="go.11.23.0"></a>156.3       Sec. 23. <ins><b>ANOKA COUNTY ENVIRONMENTAL RESPONSE FUND.</b></ins>&#10;156.4       <ins>Subdivision 1.</ins> <ins><b>Creation.</b></ins> <ins>An environmental response fund is created for the </ins>&#10;156.5   <ins>purposes specified in this section. The taxes imposed by section 14 must be deposited </ins>&#10;156.6   <ins>in the fund. The Board of County Commissioners shall administer the fund either as a </ins>&#10;156.7   <ins>county board, a housing and redevelopment authority, or a regional rail authority.</ins>&#10;156.8       <ins>Subd. 2.</ins> <ins><b>Uses of fund.</b></ins> <ins>The fund created in subdivision 1 must be used for the </ins>&#10;156.9   <ins>following purposes:</ins>&#10;156.10  <ins>(1) acquisition through purchase or condemnation of lands or property which are </ins>&#10;156.11  <ins>polluted or contaminated with hazardous substances;</ins>&#10;156.12  <ins>(2) paying the costs associated with indemnifying or holding harmless the </ins>&#10;156.13  <ins>entity taking title to lands or property from any liability arising out of the ownership, </ins>&#10;156.14  <ins>remediation, or use of the land or property;</ins>&#10;156.15  <ins>(3) paying for the costs of remediating the acquired land or property;</ins>&#10;156.16  <ins>(4) paying the costs associated with remediating lands or property which are polluted </ins>&#10;156.17  <ins>or contaminated with hazardous substances; or</ins>&#10;156.18  <ins>(5) paying for the costs associated with improving the property for economic </ins>&#10;156.19  <ins>development, recreation, housing, transportation, or rail traffic.</ins>&#10;156.20      <ins>Subd. 3.</ins> <ins><b>Matching funds.</b></ins> <ins>In expending funds under this section, the county shall </ins>&#10;156.21  <ins>seek matching funds from contamination cleanup funds administered by the commissioner </ins>&#10;156.22  <ins>of the Department of Employment and Economic Development, the Metropolitan Council, </ins>&#10;156.23  <ins>the federal government, the private sector, and any other source.</ins>&#10;156.24      <ins>Subd. 4.</ins> <ins><b>Bonds.</b></ins> <ins>The county may pledge the proceeds from the taxes imposed by </ins>&#10;156.25  <ins>section</ins><ins> 14</ins><ins> to bonds issued under this section and Minnesota Statutes, chapters 398A, </ins>&#10;156.26  <ins>462, 469, and 475. </ins>&#10;156.27      <ins>Subd. 5.</ins> <ins><b>Land sales.</b></ins> <ins>Land or property acquired under this section may be resold </ins>&#10;156.28  <ins>at fair market value. Proceeds from the sale of the land must be deposited in the </ins>&#10;156.29  <ins>environmental response fund.</ins>&#10;156.30      <ins>Subd. 6.</ins> <ins><b>DOT assistance.</b></ins> <ins>The commissioner of transportation shall collaborate with </ins>&#10;156.31  <ins>the county and any affected municipality by providing technical assistance and support in </ins>&#10;156.32  <ins>cleaning up a contaminated site related to a trunk highway or railroad improvement.</ins>&#10;&#10;<a id="go.11.24.0"></a>156.33      Sec. 24. <ins><b>CITY OF BROOKLYN PARK TAX INCREMENT FINANCING </b></ins>&#10;156.34  <ins><b>DISTRICT EXTENSION.</b></ins>&#10;157.1   <ins>Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, or any other </ins>&#10;157.2   <ins>law to the contrary, the duration limit that applies to the economic development tax </ins>&#10;157.3   <ins>increment financing district established under Laws 1994, chapter 587, article 9, section </ins>&#10;157.4   <ins>20, is extended to December 31, 2020.</ins>&#10;&#10;<a id="go.11.25.0"></a>157.5       Sec. 25. <ins><b>BURNSVILLE; NORTHWEST QUADRANT TAX INCREMENT </b></ins>&#10;157.6   <ins><b>FINANCING.</b></ins>&#10;157.7       <ins>Subdivision 1.</ins> <ins><b>Definitions.</b></ins> <ins>(a) For the purposes of this section, the words and </ins>&#10;157.8   <ins>phrases defined have the meanings given them in this subdivision.</ins>&#10;157.9   <ins>(b) "Project area" means the area in the city bounded on the south, southeast, and </ins>&#10;157.10  <ins>southwest by the southerly right-of-way line of Minnesota Trunk Highway 13; on the east </ins>&#10;157.11  <ins>by the easterly right-of-way line of Interstate Highway I-35W; on the north and northwest </ins>&#10;157.12  <ins>by the Minnesota River; and on the west by the westerly corporate limits of the city; </ins>&#10;157.13  <ins>together with a single parcel to the east of said Interstate Highway I-35W described as the </ins>&#10;157.14  <ins>North 1370 feet of the West 1075 feet of the NW 1/4 of Section 34 Township 27 Range 24 </ins>&#10;157.15  <ins>in the city of Burnsville, Dakota County, except the North 50 feet thereof; provided that </ins>&#10;157.16  <ins>the project area includes the rights-of-way for all present and future highway interchanges </ins>&#10;157.17  <ins>abutting the area described in this paragraph.</ins>&#10;157.18  <ins>(c) "Soils deficiency district" means a type of tax increment financing district </ins>&#10;157.19  <ins>consisting of a portion of the project area in which the city finds by resolution that the </ins>&#10;157.20  <ins>following conditions exist:</ins>&#10;157.21  <ins>(1) unusual terrain or soil deficiencies for 80 percent of the acreage in the district </ins>&#10;157.22  <ins>require substantial filling, grading, or other physical preparation for use;</ins>&#10;157.23  <ins>(2) the estimated cost of the physical preparation under clause (1), but excluding </ins>&#10;157.24  <ins>costs directly related to roads as defined in Minnesota Statutes, section 160.01, and local </ins>&#10;157.25  <ins>improvement as described in Minnesota Statutes, sections 429.021, subdivision 1, clauses </ins>&#10;157.26  <ins>(1) to (7), (11) and (12), and 430.01, exceeds the fair market value of the land before </ins>&#10;157.27  <ins>completion of the preparation.</ins>&#10;157.28      <ins>Subd. 2.</ins> <ins><b>Special rules.</b></ins> <ins>(a) If the city elects, upon the adoption of the tax increment </ins>&#10;157.29  <ins>financing plan for a district, the rules under this section apply to a redevelopment district, </ins>&#10;157.30  <ins>renewal and renovation district, soils condition district, or soils deficiency district </ins>&#10;157.31  <ins>established by the city of Burnsville or a development authority of the city in the project </ins>&#10;157.32  <ins>area.</ins>&#10;157.33  <ins>(b) The five-year rule under Minnesota Statutes, section 469.1763, subdivisions 3 </ins>&#10;157.34  <ins>and 4, is extended to ten years for any district.</ins>&#10;158.1   <ins>(c) The limitations on spending tax increment outside of the district under Minnesota </ins>&#10;158.2   <ins>Statutes, section 469.1763, subdivision 2, do not apply, but increments may only be </ins>&#10;158.3   <ins>expended on improvements or activities within the project area.</ins>&#10;158.4   <ins>(d) In the case of a soil deficiency district:</ins>&#10;158.5   <ins>(1) increments may be collected through 20 years after the receipt by the authority of </ins>&#10;158.6   <ins>the first increment from the district; and</ins>&#10;158.7   <ins>(2) except as otherwise provided in this subdivision, increments may be used only </ins>&#10;158.8   <ins>to: (i) acquire parcels on which the improvements described in clause (ii) will occur; (ii) </ins>&#10;158.9   <ins>pay for the cost of correcting the unusual terrain or soil deficiencies and the additional cost </ins>&#10;158.10  <ins>of installing public improvements directly caused by the deficiencies; and (iii) pay for the </ins>&#10;158.11  <ins>administrative expenses of the authority allocable to the district.</ins>&#10;158.12  <ins>(e) Increments spent for any infrastructure costs (whether inside a district or outside </ins>&#10;158.13  <ins>a district but within the project area) are deemed to satisfy the requirements of paragraph </ins>&#10;158.14  <ins>(d) and Minnesota Statutes, section 469.176, subdivisions 4b and 4j.</ins>&#10;158.15  <ins>(f) The authority to approve tax increment financing plans to establish tax increment </ins>&#10;158.16  <ins>financing districts under this section expires December 31, 2026.</ins>&#10;158.17  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon compliance with Minnesota </ins>&#10;158.18  <ins>Statutes, section 645.021, subdivision 3.</ins>&#10;&#10;<a id="go.11.26.0"></a>158.19      Sec. 26. <ins><b>BURNSVILLE; HEART OF THE CITY TAX INCREMENT </b></ins>&#10;158.20  <ins><b>FINANCING DISTRICT.</b></ins>&#10;158.21  <ins>Notwithstanding any contrary provision of law, the five-year rule under Minnesota </ins>&#10;158.22  <ins>Statutes, section 469.1763, subdivisions 3 and 4, is extended to ten years for tax increment </ins>&#10;158.23  <ins>derived from the parcel described as Lot 2, Block 1, Nicollet Commons Park within tax </ins>&#10;158.24  <ins>increment financing District No. 6 established by the city and its economic development </ins>&#10;158.25  <ins>authority on April 15, 2002.</ins>&#10;158.26  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon compliance with Minnesota </ins>&#10;158.27  <ins>Statutes, section 645.021, subdivision 3.</ins>&#10;&#10;<a id="go.11.27.0"></a>158.28      Sec. 27. <ins><b>CITY OF DETROIT LAKES; REDEVELOPMENT TAX INCREMENT </b></ins>&#10;158.29  <ins><b>FINANCING DISTRICT.</b></ins>&#10;158.30      <ins>Subdivision 1.</ins> <ins><b>Authorization.</b></ins> <ins>At the election of the governing body of the city of </ins>&#10;158.31  <ins>Detroit Lakes, upon adoption of the tax increment financing plan for the district described </ins>&#10;158.32  <ins>in this section, the rules provided under this section apply to each such district.</ins>&#10;159.1       <ins>Subd. 2.</ins> <ins><b>Definition.</b></ins> <ins>In this section, "district" means a redevelopment district </ins>&#10;159.2   <ins>established by the city of Detroit Lakes or the Detroit Lakes Development Authority </ins>&#10;159.3   <ins>within the following area:</ins>&#10;159.4   <ins>Beginning at the intersection of Washington Avenue and the Burlington Northern </ins>&#10;159.5   <ins>Santa Fe railroad then east to the intersection of Roosevelt Avenue then south to the </ins>&#10;159.6   <ins>intersection of Highway 10/Frazee Street then west to the intersection of Frazee Street and </ins>&#10;159.7   <ins>the alley that parallels Washington Avenue then north to the point of beginning.</ins>&#10;159.8   <ins>More than one district may be created under this section.</ins>&#10;159.9       <ins>Subd. 3.</ins> <ins><b>Qualification as redevelopment district; special rules.</b></ins> <ins>The district shall </ins>&#10;159.10  <ins>be a redevelopment district under Minnesota Statutes, section 469.174, subdivision 10. All </ins>&#10;159.11  <ins>buildings that are removed to facilitate the Highway 10 Realignment Project are deemed </ins>&#10;159.12  <ins>to be "structurally substandard." The three-year limit after demolition of the buildings to </ins>&#10;159.13  <ins>request tax increment financing certification provided in Minnesota Statutes, section </ins>&#10;159.14  <ins>469.174, subdivision 10, paragraph (d), clause (1), does not apply.</ins>&#10;159.15      <ins>Subd. 4.</ins> <ins><b>Expiration.</b></ins> <ins>The authority to approve tax increment financing plans to </ins>&#10;159.16  <ins>establish a tax increment financing redevelopment district subject to this section expires </ins>&#10;159.17  <ins>on December 31, 2014.</ins>&#10;159.18      <ins>Subd. 5.</ins> <ins><b>Effective date.</b></ins> <ins>This section is effective upon approval of the governing </ins>&#10;159.19  <ins>body of the city of Detroit Lakes and compliance with Minnesota Statutes, section </ins>&#10;159.20  <ins>645.021, subdivision 3.</ins>&#10;&#10;<a id="go.11.28.0"></a>159.21      Sec. 28. <ins><b>CITIES OF ELGIN, EYOTA, BYRON, AND ORONOCO; TAX </b></ins>&#10;159.22  <ins><b>INCREMENT FINANCING DISTRICTS.</b></ins>&#10;159.23      <ins>Subdivision 1.</ins> <ins><b>Authorization.</b></ins> <ins>Notwithstanding the mileage limitation in Minnesota </ins>&#10;159.24  <ins>Statutes, section 469.174, subdivision 27, the cities of Elgin, Eyota, Byron, and Oronoco </ins>&#10;159.25  <ins>are deemed to be small cities for purposes of Minnesota Statutes, sections 469.174 to </ins>&#10;159.26  <ins>469.1799, as long as they do not exceed the population limit in that section.</ins>&#10;159.27      <ins>Subd. 2.</ins> <ins><b>Local approval.</b></ins> <ins>This section is effective for each of the cities of Elgin, </ins>&#10;159.28  <ins>Eyota, Byron, and Oronoco upon approval of that city's governing body and compliance </ins>&#10;159.29  <ins>with Minnesota Statutes, section 645.021, subdivisions 2 and 3.</ins>&#10;&#10;<a id="go.11.29.0"></a>159.30      Sec. 29. <ins><b>CITY OF MINNEAPOLIS; HOMELESS ASSISTANCE TAX </b></ins>&#10;159.31  <ins><b>INCREMENT DISTRICT.</b></ins>&#10;159.32      <ins>Subdivision 1.</ins> <ins><b>Definitions.</b></ins> <ins>(a) "City" means the city of Minneapolis.</ins>&#10;159.33  <ins>(b) "Homeless assistance tax increment district" means a contiguous area of the </ins>&#10;159.34  <ins>city that:</ins>&#10;160.1   <ins>(1) is no larger than six acres;</ins>&#10;160.2   <ins>(2) is located within the boundaries of a city municipal development district; and</ins>&#10;160.3   <ins>(3) contains at least two shelters for homeless persons that have been owned or </ins>&#10;160.4   <ins>operated by nonprofit corporations that (i) are qualified charitable organizations under </ins>&#10;160.5   <ins>section 501(c)(3) of the United States Internal Revenue Code, (ii) have operated such </ins>&#10;160.6   <ins>homeless facilities within the district for at least five years, and (iii) have been recipients </ins>&#10;160.7   <ins>of emergency services grants under Minnesota Statutes, section 256E.36.</ins>&#10;160.8       <ins>Subd. 2.</ins> <ins><b>Establishment of tax increment district.</b></ins> <ins>The city may create one </ins>&#10;160.9   <ins>homeless assistance tax increment district. To establish the homeless assistance tax </ins>&#10;160.10  <ins>increment district, the city shall adopt a homeless assistance tax increment plan and </ins>&#10;160.11  <ins>otherwise comply with the requirements of Minnesota Statutes, section 469.175, except </ins>&#10;160.12  <ins>that the determinations required in Minnesota Statutes, section 469.175, subdivision 3, </ins>&#10;160.13  <ins>paragraph (b), clauses (1) and (2), items (i) and (ii), are not required.</ins>&#10;160.14      <ins>Subd. 3.</ins> <ins><b>Application of tax increment law.</b></ins> <ins>Minnesota Statutes, sections 469.174 </ins>&#10;160.15  <ins>to 469.179, shall apply to the administration of the district, except:</ins>&#10;160.16  <ins>(1) as this section provides otherwise; and</ins>&#10;160.17  <ins>(2) with respect to the portion of the increment to be expended for homeless shelter </ins>&#10;160.18  <ins>and services pursuant to subdivision 5, paragraph (b):</ins>&#10;160.19  <ins>(i) the use for which tax increment that may be expended is as provided by </ins>&#10;160.20  <ins>subdivision 5; and</ins>&#10;160.21  <ins>(ii) Minnesota Statutes, sections 469.1761 and 469.1763, do not apply.</ins>&#10;160.22      <ins>Subd. 4.</ins> <ins><b>Duration limitation.</b></ins> <ins>No tax increment generated by the district shall </ins>&#10;160.23  <ins>be paid to the city after the expiration of 25 years from the receipt by the city of the </ins>&#10;160.24  <ins>first increment from that district.</ins>&#10;160.25      <ins>Subd. 5.</ins> <ins><b>Limitations on use of increment.</b></ins> <ins>(a) All increment received by the city </ins>&#10;160.26  <ins>from the district shall be used in accordance with the homeless assistance tax increment </ins>&#10;160.27  <ins>district plan.</ins>&#10;160.28  <ins>(b) No less than 40 percent of the increment, after deduction of allowable </ins>&#10;160.29  <ins>administrative expenses under Minnesota Statutes, section 469.176, subdivision 3, shall </ins>&#10;160.30  <ins>be used to provide emergency shelter and services for homeless persons within and </ins>&#10;160.31  <ins>outside the district.</ins>&#10;160.32  <ins>(c) The remainder of the tax increment derived from the district shall be used for </ins>&#10;160.33  <ins>purposes allowed under Minnesota Statutes, section 469.176, subdivision 4.</ins>&#10;160.34      <ins>Subd. 6.</ins> <ins><b>Applicability of other laws.</b></ins> <ins>References in Minnesota Statutes to tax </ins>&#10;160.35  <ins>increment financing districts created and tax increment generated under Minnesota </ins>&#10;161.1   <ins>Statutes, sections 469.174 to 469.179, include the homeless assistance district and tax </ins>&#10;161.2   <ins>increment subject to this section.</ins>&#10;161.3   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon compliance by the city of </ins>&#10;161.4   <ins>Minneapolis with Minnesota Statutes, section 645.021.</ins>&#10;&#10;<a id="go.11.30.0"></a>161.5       Sec. 30. <ins><b>CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING; </b></ins>&#10;161.6   <ins><b>EXPENDITURES OUTSIDE DISTRICT.</b></ins>&#10;161.7   <ins>Notwithstanding the provisions of Minnesota Statutes, section 469.1763, subdivision </ins>&#10;161.8   <ins>2, the city of New Brighton may expend tax increments from District No. 26 for eligible </ins>&#10;161.9   <ins>activities described in Minnesota Statutes, section 469.176, subdivision 4e, outside of Tax </ins>&#10;161.10  <ins>Increment District No. 26, but only within the area described in Laws 1998, chapter 389, </ins>&#10;161.11  <ins>article 11, section 24, subdivision 1. Minnesota Statutes, section 469.1763, subdivision 3, </ins>&#10;161.12  <ins>and Minnesota Statutes, section 469.1763, subdivision 4, shall not apply to expenditures </ins>&#10;161.13  <ins>permitted in this section.</ins>&#10;161.14  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon approval by the governing body </ins>&#10;161.15  <ins>of the city of New Brighton and compliance with Minnesota Statutes, section 645.021, </ins>&#10;161.16  <ins>subdivision 3.</ins>&#10;&#10;<a id="go.11.31.0"></a>161.17      Sec. 31. <ins><b>CITY OF RAMSEY; TAX INCREMENT FINANCING.</b></ins>&#10;161.18      <ins>Subdivision 1.</ins> <ins><b>Authority.</b></ins> <ins>The governing body of the city of Ramsey or a </ins>&#10;161.19  <ins>development authority established by the city may create a tax increment financing </ins>&#10;161.20  <ins>district, consisting of the property defined as outlot L, Ramsey Town Center Addition and </ins>&#10;161.21  <ins>lot 2, block 1, Ramsey Town Center Addition.</ins>&#10;161.22      <ins>Subd. 2.</ins> <ins><b>Special rules.</b></ins> <ins>Establishment of the district is subject to the requirements </ins>&#10;161.23  <ins>of Minnesota Statutes, sections 469.174 to 469.1799, with the following exceptions:</ins>&#10;161.24  <ins>(1) the district is deemed to be a redevelopment district without regard to the </ins>&#10;161.25  <ins>requirements of Minnesota Statutes, section 469.174, subdivision 10;</ins>&#10;161.26  <ins>(2) the provisions of Minnesota Statutes, section 469.176, subdivision 7, do not </ins>&#10;161.27  <ins>apply to the district;</ins>&#10;161.28  <ins>(3) housing receiving assistance, directly or indirectly, from the expenditures of </ins>&#10;161.29  <ins>the district's increments must meet the requirements of Minnesota Statutes, sections </ins>&#10;161.30  <ins>469.174, subdivision 11, and 469.1761; </ins>&#10;161.31  <ins>(4) the district's increments must be used only to pay for costs related to the Sunwood </ins>&#10;161.32  <ins>on Grand project, including land acquisition, public infrastructure, parking ramps, and </ins>&#10;162.1   <ins>administrative expenses, whether paid directly to reimburse for payment of those costs or </ins>&#10;162.2   <ins>to repay bonds or other obligations issued and sold to pay those costs initially; and</ins>&#10;162.3   <ins>(5) general obligations bonds issued to pay for costs related to the project subject </ins>&#10;162.4   <ins>to this section are not subject to the net debt limit of the city under Minnesota Statutes, </ins>&#10;162.5   <ins>section 475.53, or any other law or charter provision.</ins>&#10;162.6   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon local approval by the governing </ins>&#10;162.7   <ins>body of the city of Ramsey in compliance with the requirement of Minnesota Statutes, </ins>&#10;162.8   <ins>section 645.021.</ins>&#10;&#10;<a id="go.11.32.0"></a>162.9       Sec. 32. <ins><b>CITY OF ST. MICHAEL; TAX INCREMENT FINANCING DISTRICT.</b></ins>&#10;162.10      <ins> Subdivision 1.</ins> <ins><b>Establishment of district.</b></ins> <ins>The city of St. Michael may establish </ins>&#10;162.11  <ins>a redevelopment tax increment financing district subject to Minnesota Statutes, sections </ins>&#10;162.12  <ins>469.174</ins><ins> to 469.179, except as provided in this section.  The district must be established </ins>&#10;162.13  <ins>within an area that includes the downtown and town center areas as designated by the city </ins>&#10;162.14  <ins>as well as all parcels adjacent to marked Trunk Highway 241 within the city.</ins>&#10;162.15      <ins> Subd. 2.</ins> <ins><b>Special rules.</b></ins> <ins>(a) Notwithstanding the requirements of Minnesota </ins>&#10;162.16  <ins>Statutes, section </ins><ins>469.174</ins><ins>, subdivision 10, the district may be established and operated as </ins>&#10;162.17  <ins>a redevelopment district.</ins>&#10;162.18  <ins>(b) Notwithstanding the restrictions of Minnesota Statutes, sections </ins><ins>469.176</ins><ins>, </ins>&#10;162.19  <ins>subdivisions 4 and 4j, and </ins><ins>469.1763</ins><ins>, subdivision 2, revenues derived from tax increments </ins>&#10;162.20  <ins>from the district created under this section may be used to meet the cost of land </ins>&#10;162.21  <ins>acquisition, removal of buildings in the right-of-way acquisition area, and other costs </ins>&#10;162.22  <ins>incurred by the city of St. Michael in the expansion and improvement of marked Trunk </ins>&#10;162.23  <ins>Highway 241 within the city.</ins>&#10;162.24  <ins>(c) Minnesota Statutes, section </ins><ins>469.176, subdivision 5</ins><ins>, does not apply to the district.</ins>&#10;162.25  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after the governing body of </ins>&#10;162.26  <ins>the city of St. Michael complies with Minnesota Statutes, section 645.021, subdivision 3</ins><ins>.</ins>&#10;&#10;<a id="go.11.33.0"></a>162.27      Sec. 33. <ins><b>QUALIFIED BUSINESS; SMALL DECLINING POPULATION </b></ins>&#10;162.28  <ins><b>COUNTY.</b></ins>&#10;162.29  <ins>Notwithstanding Minnesota Statutes, section 469.310, subdivision 11, paragraph </ins>&#10;162.30  <ins>(f), a qualified business for purposes of Minnesota Statutes, section 469.310, subdivision </ins>&#10;162.31  <ins>11, includes a food service business if the business is located solely in a qualified county, </ins>&#10;162.32  <ins>and if the business began operations in January 2004, with employment of between 15 </ins>&#10;162.33  <ins>and 20 part-time and full-time employees. For the purpose of this section, a "qualified </ins>&#10;163.1   <ins>county" is a county having an estimated population of less than 5,000 in 2004 and that </ins>&#10;163.2   <ins>experienced a reduction in population of at least 7.5 percent between 2000 and 2004, </ins>&#10;163.3   <ins>according to the state demographer.</ins>&#10;163.4   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.11.34.0"></a>163.5       Sec. 34. <ins><b> REPEALER.</b></ins>&#10;163.6   <ins>(a)</ins><ins> Laws 1994, chapter 587, article 9, section 20, subdivision 4, </ins><ins>is repealed.</ins>&#10;163.7   <ins>(b)</ins><ins> Laws 1996, chapter 464, article 1, section 8, subdivision 5, </ins><ins>is repealed.</ins>&#10;&#10;<a id="go.11.35.0"></a>163.8       Sec. 35. <ins><b> REPEALER; DISTRIBUTION OF CERTAIN BURNSVILLE TAX </b></ins>&#10;163.9   <ins><b>INCREMENTS.</b></ins>&#10;163.10  <ins>Laws 1998, chapter 389, article 11, section 18,</ins><ins> is repealed. The balance of tax </ins>&#10;163.11  <ins>increments derived from tax increment financing district no. 2-1 as of the effective date </ins>&#10;163.12  <ins>of this act must be returned to the county for distribution in accordance with Minnesota </ins>&#10;163.13  <ins>Statutes, section 469.176, subdivision 2.</ins>&#10;163.14  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon compliance with Minnesota </ins>&#10;163.15  <ins>Statutes, section 645.021, subdivision 3.</ins>&#10;&#10;<a id="go.12.0.0"></a>163.16                                         <b>ARTICLE 12</b>&#10;163.17                                      <b>AIDS AND CREDITS</b>&#10;&#10;<a id="go.12.1.0"></a>163.18      Section 1. Minnesota Statutes 2005 Supplement, section 477A.011, subdivision 36, &#10;163.19  is amended to read:&#10;163.20      Subd. 36. <b>City aid base.</b> (a) Except as otherwise provided in this subdivision, &#10;163.21  "city aid base" is zero.&#10;163.22  (b) The city aid base for any city with a population less than 500 is increased by &#10;163.23  $40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount &#10;163.24  of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also &#10;163.25  increased by $40,000 for aids payable in calendar year 1995 only, provided that:&#10;163.26  (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;&#10;163.27  (ii) the city portion of the tax capacity rate exceeds 100 percent; and&#10;163.28  (iii) its city aid base is less than $60 per capita.&#10;163.29  (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and &#10;163.30  the maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;163.31  paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:&#10;163.32  (i) the city has a population in 1994 of 2,500 or more;&#10;164.1   (ii) the city is located in a county, outside of the metropolitan area, which contains a &#10;164.2   city of the first class;&#10;164.3   (iii) the city's net tax capacity used in calculating its 1996 aid under section &#10;164.4   477A.013 is less than $400 per capita; and&#10;164.5   (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of &#10;164.6   property located in the city is classified as railroad property.&#10;164.7   (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and &#10;164.8   the maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;164.9   paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:&#10;164.10  (i) the city was incorporated as a statutory city after December 1, 1993;&#10;164.11  (ii) its city aid base does not exceed $5,600; and&#10;164.12  (iii) the city had a population in 1996 of 5,000 or more.&#10;164.13  (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the &#10;164.14  maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;164.15  paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:&#10;164.16  (i) the city had a population in 1996 of at least 50,000;&#10;164.17  (ii) its population had increased by at least 40 percent in the ten-year period ending &#10;164.18  in 1996; and&#10;164.19  (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.&#10;164.20  (f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and &#10;164.21  thereafter, and the maximum amount of total aid it may receive under section 477A.013, &#10;164.22  subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only, &#10;164.23  provided that:&#10;164.24  (1) the city has a population that is greater than 1,000 and less than 2,500;&#10;164.25  (2) its commercial and industrial percentage for aids payable in 1999 is greater &#10;164.26  than 45 percent; and&#10;164.27  (3) the total market value of all commercial and industrial property in the city &#10;164.28  for assessment year 1999 is at least 15 percent less than the total market value of all &#10;164.29  commercial and industrial property in the city for assessment year 1998.&#10;164.30  (g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and &#10;164.31  the maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;164.32  paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:&#10;164.33  (1) the city had a population in 1997 of 2,500 or more;&#10;164.34  (2) the net tax capacity of the city used in calculating its 1999 aid under section &#10;164.35  477A.013 is less than $650 per capita;&#10;165.1   (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under &#10;165.2   section 477A.013 is greater than 12 percent;&#10;165.3   (4) the 1999 local government aid of the city under section 477A.013 is less than &#10;165.4   20 percent of the amount that the formula aid of the city would have been if the need &#10;165.5   increase percentage was 100 percent; and&#10;165.6   (5) the city aid base of the city used in calculating aid under section 477A.013 &#10;165.7   is less than $7 per capita.&#10;165.8   (h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and &#10;165.9   the maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;165.10  paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:&#10;165.11  (1) the city has a population in 1997 of 2,000 or more;&#10;165.12  (2) the net tax capacity of the city used in calculating its 1999 aid under section &#10;165.13  477A.013 is less than $455 per capita;&#10;165.14  (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is &#10;165.15  greater than $195 per capita; and&#10;165.16  (4) the 1999 local government aid of the city under section 477A.013 is less than &#10;165.17  38 percent of the amount that the formula aid of the city would have been if the need &#10;165.18  increase percentage was 100 percent.&#10;165.19  (i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and &#10;165.20  the maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;165.21  paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:&#10;165.22  (1) the city has a population in 1998 that is greater than 200 but less than 500;&#10;165.23  (2) the city's revenue need used in calculating aids payable in 2000 was greater &#10;165.24  than $200 per capita;&#10;165.25  (3) the city net tax capacity for the city used in calculating aids available in 2000 &#10;165.26  was equal to or less than $200 per capita;&#10;165.27  (4) the city aid base of the city used in calculating aid under section 477A.013 &#10;165.28  is less than $65 per capita; and&#10;165.29  (5) the city's formula aid for aids payable in 2000 was greater than zero.&#10;165.30  (j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and &#10;165.31  the maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;165.32  paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:&#10;165.33  (1) the city had a population in 1998 that is greater than 200 but less than 500;&#10;165.34  (2) the city's commercial industrial percentage used in calculating aids payable in &#10;165.35  2000 was less than ten percent;&#10;166.1   (3) more than 25 percent of the city's population was 60 years old or older according &#10;166.2   to the 1990 census;&#10;166.3   (4) the city aid base of the city used in calculating aid under section 477A.013 &#10;166.4   is less than $15 per capita; and&#10;166.5   (5) the city's formula aid for aids payable in 2000 was greater than zero.&#10;166.6   (k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and by &#10;166.7   an additional $50,000 in calendar years 2002 to 2011, <ins>and by an additional $89,000 in </ins>&#10;166.8   <ins>calendar years 2007 to 2011, </ins>and the maximum amount of total aid it may receive under &#10;166.9   section 477A.013, subdivision 9, paragraph (c), is also increased by $45,000 in calendar &#10;166.10  year 2001 only, and by $50,000 in calendar year 2002 only, <ins>and by an additional $89,000 </ins>&#10;166.11  <ins>in calendar year 2007 only, </ins> provided that:&#10;166.12  (1) the net tax capacity of the city used in calculating its 2000 aid under section &#10;166.13  477A.013 is less than $810 per capita;&#10;166.14  (2) the population of the city declined more than two percent between 1988 and 1998;&#10;166.15  (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is &#10;166.16  greater than $240 per capita; and&#10;166.17  (4) the city received less than $36 per capita in aid under section 477A.013, &#10;166.18  subdivision 9, for aids payable in 2000.&#10;166.19  (l) The city aid base for a city with a population of 10,000 or more which is located &#10;166.20  outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the &#10;166.21  maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;166.22  paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to &#10;166.23  the lesser of:&#10;166.24  (1)(i) the total population of the city, as determined by the United States Bureau of &#10;166.25  the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or&#10;166.26  (2) $2,500,000.&#10;166.27  (m) The city aid base is increased by $50,000 in 2002 and thereafter, and the &#10;166.28  maximum amount of total aid it may receive under section 477A.013, subdivision 9, &#10;166.29  paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:&#10;166.30  (1) the city is located in the seven-county metropolitan area;&#10;166.31  (2) its population in 2000 is between 10,000 and 20,000; and&#10;166.32  (3) its commercial industrial percentage, as calculated for city aid payable in 2001, &#10;166.33  was greater than 25 percent.&#10;166.34  (n) The city aid base for a city is increased by $150,000 in calendar years 2002 to &#10;166.35  2011<ins>, and by an additional $50,000 in calendar years 2007 to 2016, </ins> and the maximum &#10;166.36  amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), &#10;167.1   is also increased by $150,000 in calendar year 2002 only, <ins>and by an additional $50,000 </ins>&#10;167.2   <ins>in calendar year 2007 only, </ins> provided that:&#10;167.3   (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;&#10;167.4   (2) its home county is located within the seven-county metropolitan area;&#10;167.5   (3) its pre-1940 housing percentage is less than 15 percent; and&#10;167.6   (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 &#10;167.7   per capita.&#10;167.8   (o) The city aid base for a city is increased by $200,000 beginning in calendar &#10;167.9   year 2003 and the maximum amount of total aid it may receive under section 477A.013, &#10;167.10  subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only, &#10;167.11  provided that the city qualified for an increase in homestead and agricultural credit aid &#10;167.12  under Laws 1995, chapter 264, article 8, section 18.&#10;167.13  (p) The city aid base for a city is increased by $200,000 in 2004 only and the &#10;167.14  maximum amount of total aid it may receive under section 477A.013, subdivision 9, is &#10;167.15  also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear &#10;167.16  dry cask storage facility.&#10;167.17  (q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the &#10;167.18  maximum total aid it may receive under section 477A.013, subdivision 9, is also increased &#10;167.19  by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster &#10;167.20  designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by &#10;167.21  more than 40 percent between 1990 and 2000.&#10;167.22  (r) The city aid base for a city is increased by $25,000 in 2006 only and the &#10;167.23  maximum total aid it may receive under section 477A.013, subdivision 9, is also increased &#10;167.24  by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000 &#10;167.25  and has a state park for which the city provides rescue services and which comprised at &#10;167.26  least 14 percent of the total geographic area included within the city boundaries in 2000.&#10;167.27  (s) The city aid base for a city with a population less than 5,000 is increased in &#10;167.28  2006 and thereafter and the minimum and maximum amount of total aid it may receive &#10;167.29  under this section is also increased in calendar year 2006 only by an amount equal to &#10;167.30  $6 multiplied by its population.&#10;167.31  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective beginning with aids payable in 2007.</ins>&#10;&#10;<a id="go.12.2.0"></a>167.32      Sec. 2. Minnesota Statutes 2005 Supplement, section 477A.013, subdivision 8, is &#10;167.33  amended to read:&#10;167.34      Subd. 8. <b>City formula aid.</b> In calendar year 2004 and subsequent years, the &#10;167.35  formula aid for a city is equal to the need increase percentage multiplied by the difference &#10;168.1   between (1) the city's revenue need multiplied by its population, and (2) the sum of the &#10;168.2   city's net tax capacity multiplied by the tax effort rate; the taconite aids under sections &#10;168.3   298.28 and 298.282 to any city except a city directly impacted by a taconite mine or plant, &#10;168.4   multiplied by the following percentages:&#10;168.5   (i) zero percent for aids payable in 2004;&#10;168.6   (ii) 25 percent for aids payable in 2005;&#10;168.7   (iii) 50 percent for aids payable in 2006;&#10;168.8   (iv) 75 percent for aids payable in 2007; and&#10;168.9   (v) 100 percent for aids payable in 2008 and thereafter.&#10;168.10  For purposes of this subdivision, "a city directly impacted by a taconite mine or &#10;168.11  plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6) &#10;168.12  Silver Bay, or (7) Virginia.&#10;168.13  No city may have a formula aid amount less than zero. The need increase percentage &#10;168.14  must be the same for all cities.&#10;168.15  The applicable need increase percentage <del>must be calculated by the Department of </del>&#10;168.16  <del>Revenue so that the total of the aid under subdivision 9 equals the total amount available </del>&#10;168.17  <del>for aid under section </del><del>477A.03</del><del> after the subtraction under section </del><del>477A.014, subdivisions 4 </del>&#10;168.18  <del>and 5</del><ins> is 100 percent for aids payable in 2007 and thereafter</ins>.&#10;&#10;<a id="go.12.3.0"></a>168.19      Sec. 3. Minnesota Statutes 2004, section 477A.013, subdivision 9, is amended to read:&#10;168.20      Subd. 9. <b>City aid distribution.</b> (a) In calendar year 2002 and thereafter, each &#10;168.21  city shall receive an aid distribution equal to the sum of (1) the city formula aid under &#10;168.22  subdivision 8, and (2) its city aid base.&#10;168.23  (b) <del>The aid for a city in calendar year 2004 shall not exceed the amount of its aid in </del>&#10;168.24  <del>calendar year 2003 after the reductions under Laws 2003, First Special Session chapter 21, </del>&#10;168.25  <del>article 5.</del>&#10;168.26  <del>(c)</del> For aids payable in 2005 <del>and thereafter,</del> <ins>and 2006,</ins> the total aid for any city &#10;168.27  shall not exceed the sum of (1) ten percent of the city's net levy for the year prior to the &#10;168.28  aid distribution plus (2) its total aid in the previous year. For aids payable in 2005 and &#10;168.29  thereafter, the total aid for any city with a population of 2,500 or more may not decrease &#10;168.30  from its total aid under this section in the previous year by an amount greater than ten &#10;168.31  percent of its net levy in the year prior to the aid distribution.&#10;168.32  <del>(d)</del> <del>For aids payable in 2004 only, the total aid for a city with a population less than </del>&#10;168.33  <del>2,500 may not be less than the amount it was certified to receive in 2003 minus the greater </del>&#10;168.34  <del>of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special Session </del>&#10;168.35  <del>chapter 21, article 5, or (2) five percent of its 2003 aid amount.</del> <ins>(c) </ins> For aids payable in &#10;169.1   2005 and thereafter, the total aid for a city with a population less than 2,500 must not be &#10;169.2   less than the amount it was certified to receive in the previous year minus five percent &#10;169.3   of its 2003 certified aid amount.&#10;169.4   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective beginning with aids payable in 2007.</ins>&#10;&#10;<a id="go.12.4.0"></a>169.5       Sec. 4. Minnesota Statutes 2004, section 477A.03, subdivision 2, is amended to read:&#10;169.6       Subd. 2. <b>Annual appropriation.</b> <ins>(a)</ins> A sum sufficient to discharge the duties &#10;169.7   imposed by sections  477A.011 to  477A.014 is annually appropriated from the general &#10;169.8   fund to the commissioner of revenue. &#10;169.9   <ins>(b) In fiscal year 2007, $41,000,000 is appropriated from the general fund to the </ins>&#10;169.10  <ins>commissioner of revenue to be used for the purposes of paragraph (a) for distributions </ins>&#10;169.11  <ins>in calendar years 2007 and 2008. These amounts do not cancel, and remain available </ins>&#10;169.12  <ins>until expended.</ins>&#10;&#10;<a id="go.12.5.0"></a>169.13      Sec. 5. Minnesota Statutes 2005 Supplement, section 477A.03, subdivision 2a, is &#10;169.14  amended to read:&#10;169.15      Subd. 2a. <b>Cities.</b> For aids payable in 2004, the total aids paid under section &#10;169.16  477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the total &#10;169.17  aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For aids &#10;169.18  payable in 2006 <del>and thereafter</del>, the total aids paid under section 477A.013, subdivision 9, &#10;169.19  is limited to $485,052,000<ins>, plus the amount of the payments provided in section 5</ins>.&#10;169.20  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective beginning with aids payable in 2006.</ins>&#10;&#10;<a id="go.12.6.0"></a>169.21      Sec. 6. Laws 2005, First Special Session chapter 3, article 2, section 5, is amended to &#10;169.22  read:&#10;169.23  Sec. 5.  2005 <del>AND 2006</del> CITY AID PAYMENTS.&#10;169.24    &#10;169.25  In 2005 <del>and 2006</del>, market value credit reimbursements for  each city payable under &#10;169.26  Minnesota Statutes, section 273.1384,  are reduced by the dollar amount of the 2003 &#10;169.27  reduction in market  value credit reimbursements for that city due to Laws 2003,  First &#10;169.28  Special Session chapter 21, article 5, section 12.  No  city's 2005 <del>or 2006</del> market value &#10;169.29  credit reimbursements are  reduced to less than zero under this section.  To the extent  &#10;169.30  sufficient information is available on each payment date, the  commissioner shall pay the &#10;169.31  annual 2005 <del>and 2006</del> market value  credit reimbursement amounts, after reduction under &#10;170.1   this  section, to cities in equal installments on the dates specified  in Minnesota Statutes, &#10;170.2   section 273.1384.  &#10;170.3    &#10;&#10;<a id="go.12.7.0"></a>170.4       Sec. 7. <ins><b>ONETIME 2006 ADDITIONAL CITY AID.</b></ins>&#10;170.5       <ins>Subdivision 1.</ins> <ins><b>Computation.</b></ins> <ins>For aid payable in 2006 only, the aid payable to </ins>&#10;170.6   <ins>each city under Minnesota Statutes, section 477A.013, subdivision 9, is increased by the </ins>&#10;170.7   <ins>difference between the amount that would have been paid to the city under that provision </ins>&#10;170.8   <ins>and the amount that would be payable to the city if the aid were determined as follows:</ins>&#10;170.9   <ins>(1) the city revenue need under Minnesota Statutes, section 477A.011, subdivision </ins>&#10;170.10  <ins>34, must be multiplied by the ratio of the annual implicit price deflator for government </ins>&#10;170.11  <ins>consumption expenditures and gross investment for state and local governments as </ins>&#10;170.12  <ins>prepared by the United States Department of Commerce for 2004 to the 2002 implicit </ins>&#10;170.13  <ins>price deflator for state and local government purchases;</ins>&#10;170.14  <ins>(2) taconite aids under Minnesota Statutes, sections 298.28 and 298.282, must </ins>&#10;170.15  <ins>not be added to the city net tax capacity under Minnesota Statutes, section 477A.013, </ins>&#10;170.16  <ins>subdivision 8;</ins>&#10;170.17  <ins>(3) the need increase percentage under Minnesota Statutes, section 477A.013, </ins>&#10;170.18  <ins>subdivision 8, shall be equal to 100 percent;</ins>&#10;170.19  <ins>(4) the restriction under Minnesota Statutes, section 477A.013, subdivision 9, that </ins>&#10;170.20  <ins>the total aid for any city shall not exceed the sum of ten percent of the city's net levy in the </ins>&#10;170.21  <ins>previous year plus its total aid in the previous year shall not apply; and </ins>&#10;170.22  <ins>(5) no city shall receive less aid than it was originally certified to receive for aids </ins>&#10;170.23  <ins>payable in 2006.</ins>&#10;170.24  <ins>The aid payable under this section must be used by cities for debt reduction, pension </ins>&#10;170.25  <ins>funding, capital improvements, deferred maintenance, fee reduction, or to pay costs </ins>&#10;170.26  <ins>related to public safety.</ins>&#10;170.27      <ins>Subd. 2.</ins> <ins><b>Appropriation; payment.</b></ins> <ins>The commissioner of revenue shall make the </ins>&#10;170.28  <ins>payments of the additional 2006 city aid in three installments on May 1, July 20, and </ins>&#10;170.29  <ins>December 26, 2006. An amount sufficient to pay the aid under this section is appropriated </ins>&#10;170.30  <ins>to the commissioner of revenue from the general fund.</ins>&#10;170.31  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for aids payable in 2006.</ins>&#10;&#10;<a id="go.12.8.0"></a>170.32      Sec. 8. <ins><b>COUNTY TARGETED CASE MANAGEMENT AID.</b></ins>&#10;170.33      <ins>Subdivision 1.</ins> <ins><b>Distribution.</b></ins> <ins>For 2006 and 2007 only, county targeted case </ins>&#10;170.34  <ins>management aid shall be allocated to counties based on each county's share of the state </ins>&#10;171.1   <ins>total of children's social services and mental health services administered by the counties </ins>&#10;171.2   <ins>under the jurisdiction of the Minnesota Department of Human Services. The aid payable </ins>&#10;171.3   <ins>under this section must be used by counties to offset reductions in federal funding under </ins>&#10;171.4   <ins>the Deficit Reduction Act of 2005 for targeted case management.</ins>&#10;171.5       <ins>Subd. 2.</ins> <ins><b>Appropriation; payment.</b></ins> <ins>For aids payable in 2006, the total aid under </ins>&#10;171.6   <ins>this section is limited to $40,000,000. For aids payable in 2007, the total aid under this </ins>&#10;171.7   <ins>section is limited to $20,000,000. The commissioner of revenue shall make the payments </ins>&#10;171.8   <ins>of the county targeted case management aid in two installments on July 20 and December </ins>&#10;171.9   <ins>26 in 2006, and on March 31 and May 31 in 2007. An amount sufficient to pay the aid </ins>&#10;171.10  <ins>under this section is appropriated to the commissioner of revenue from the general fund.</ins>&#10;171.11  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for aids payable in 2006 and 2007.</ins>&#10;&#10;<a id="go.12.9.0"></a>171.12      Sec. 9. <ins><b>MAHNOMEN COUNTY; TEMPORARY COUNTY AND CITY AIDS.</b></ins>&#10;171.13  <ins>$600,000 is appropriated from the general fund to the commissioner of revenue to be </ins>&#10;171.14  <ins>used to make payments to Mahnomen County and the city of Mahnomen to compensate </ins>&#10;171.15  <ins>them for the loss of property tax revenue due to the placement of land located in the </ins>&#10;171.16  <ins>city of Mahnomen in trust status during calendar year 2006. The appropriation shall be </ins>&#10;171.17  <ins>reduced by the amount of any payment in lieu of tax received by Mahnomen County </ins>&#10;171.18  <ins>or the city of Mahnomen for the property placed in trust status. The payment shall be </ins>&#10;171.19  <ins>made on July 20, 2006.</ins>&#10;&#10;<a id="go.12.10.0"></a>171.20      Sec. 10. <ins><b>COUNTY REFERENDUM COST REIMBURSEMENT; </b></ins>&#10;171.21  <ins><b>APPROPRIATION.</b></ins>&#10;171.22  <ins>If one or more bills are enacted during the 2006 session of the legislature that </ins>&#10;171.23  <ins>provides for a referendum in 2006 on a proposed constitutional amendment, $122,000 is </ins>&#10;171.24  <ins>appropriated from the general fund to the commissioner of revenue to be distributed to </ins>&#10;171.25  <ins>the counties in proportion to each county's share of the state's registered voters. This is a </ins>&#10;171.26  <ins>onetime payment, to be paid on July 20, 2006, to compensate the counties for the cost of </ins>&#10;171.27  <ins>preparing ballots for the constitutional amendment or amendments.</ins>&#10;&#10;<a id="go.12.11.0"></a>171.28      Sec. 11. <ins><b>LOCAL TRUNK HIGHWAY IMPROVEMENTS; APPROPRIATION.</b></ins>&#10;171.29  <ins>$5,000,000 is appropriated from the general fund to the commissioner of </ins>&#10;171.30  <ins>transportation to be distributed, $2,500,000 to the City of Nisswa and $2,500,000 to the </ins>&#10;171.31  <ins>City of Pequot Lakes, to be used to pay the local share of trunk highway improvement </ins>&#10;171.32  <ins>projects. The advisory committee established under Minnesota Statutes, section 174.52, </ins>&#10;171.33  <ins>shall provide recommendations to the cities on the most efficient use of the funds provided.</ins>&#10;&#10;<a id="go.13.0.0"></a>172.1                                          <b>ARTICLE 13</b>&#10;172.2                                           <b>MINERALS</b>&#10;&#10;<a id="go.13.1.0"></a>172.3       Section 1. Minnesota Statutes 2004, section 298.001, is amended by adding a &#10;172.4   subdivision to read:&#10;172.5       <ins>Subd. 3a.</ins> <ins><b>Producer.</b></ins> <ins>"Producer" means a person engaged in the business of mining </ins>&#10;172.6   <ins>or producing iron ore, taconite concentrate, or direct reduced ore in this state.</ins>&#10;172.7   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;172.8   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.2.0"></a>172.9       Sec. 2. Minnesota Statutes 2005 Supplement, section 298.01, subdivision 3, is &#10;172.10  amended to read:&#10;172.11      Subd. 3. <b>Occupation tax; other ores.</b> Every person engaged in the business of &#10;172.12  mining or producing ores in this state, except iron ore or taconite concentrates, shall pay &#10;172.13  an occupation tax to the state of Minnesota as provided in this subdivision. The tax is &#10;172.14  determined in the same manner as the tax imposed by section 290.02, except that sections &#10;172.15  290.05, subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do &#10;172.16  not apply<ins>, and the occupation tax must be computed by applying to taxable income the </ins>&#10;172.17  <ins>rate of 2.45 percent</ins>. A person subject to occupation tax under this section shall apportion &#10;172.18  its net income on the basis of the percentage obtained by taking the sum of:&#10;172.19  (1) 75 percent of the percentage which the sales made within this state in connection &#10;172.20  with the trade or business during the tax period are of the total sales wherever made in &#10;172.21  connection with the trade or business during the tax period;&#10;172.22  (2) 12.5 percent of the percentage which the total tangible property used by the &#10;172.23  taxpayer in this state in connection with the trade or business during the tax period is of &#10;172.24  the total tangible property, wherever located, used by the taxpayer in connection with the &#10;172.25  trade or business during the tax period; and&#10;172.26  (3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or &#10;172.27  incurred in this state or paid in respect to labor performed in this state in connection with &#10;172.28  the trade or business during the tax period are of the taxpayer's total payrolls paid or &#10;172.29  incurred in connection with the trade or business during the tax period.&#10;172.30  The tax is in addition to all other taxes.&#10;172.31  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;172.32  <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.3.0"></a>173.1       Sec. 3. Minnesota Statutes 2004, section 298.01, subdivision 3a, is amended to read:&#10;173.2       Subd. 3a. <b>Gross income.</b> (a) For purposes of determining a person's taxable income &#10;173.3   under subdivision 3, gross income is determined by the amount of gross proceeds from &#10;173.4   mining in this state under section  298.016 and includes any gain or loss recognized from &#10;173.5   the sale or disposition of assets used in the business in this state.<ins> If more than one mineral, </ins>&#10;173.6   <ins>metal, or energy resource referred to in section 298.016 is mined and processed at the </ins>&#10;173.7   <ins>same mine and plant, a gross income for each mineral, metal, or energy resource must be </ins>&#10;173.8   <ins>determined separately. The gross incomes may be combined on one occupation tax return </ins>&#10;173.9   <ins>to arrive at the gross income of all production.</ins> &#10;173.10  (b) In applying section  290.191, subdivision 5, transfers of ores are deemed to be &#10;173.11  sales <del>outside</del><ins> in</ins> this state <del>if the ores are transported out of this state after the ores have </del>&#10;173.12  <del>been converted to a marketable quality</del>. &#10;173.13  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;173.14  <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.4.0"></a>173.15      Sec. 4. Minnesota Statutes 2004, section 298.01, subdivision 3b, is amended to read:&#10;173.16      Subd. 3b. <b>Deductions.</b> (a) For purposes of determining taxable income under &#10;173.17  subdivision 3, the deductions from gross income include only those expenses necessary &#10;173.18  to convert raw ores to marketable quality. Such expenses include costs associated with &#10;173.19  refinement but do not include expenses such as transportation, stockpiling, marketing, or &#10;173.20  marine insurance that are incurred after marketable ores are produced, unless the expenses &#10;173.21  are included in gross income.<ins> The allowable deductions from a mine or plant that mines </ins>&#10;173.22  <ins>and produces more than one mineral, metal, or energy resource must be determined </ins>&#10;173.23  <ins>separately for the purposes of computing the deduction in section 290.01, subdivision 19c, </ins>&#10;173.24  <ins>clause (9). These deductions may be combined on one occupation tax return to arrive at </ins>&#10;173.25  <ins>the deduction from gross income for all production.</ins>&#10;173.26  (b) The provisions of section  290.01, subdivisions 19c, clauses (6) and (9), and 19d, &#10;173.27  clauses (7) and (11), are not used to determine taxable income. &#10;173.28  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;173.29  <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.5.0"></a>173.30      Sec. 5. Minnesota Statutes 2005 Supplement, section 298.01, subdivision 4, is &#10;173.31  amended to read:&#10;173.32      Subd. 4. <b>Occupation tax; iron ore; taconite concentrates.</b> A person engaged in &#10;173.33  the business of mining or producing of iron ore, taconite concentrates or direct reduced ore &#10;174.1   in this state shall pay an occupation tax to the state of Minnesota. The tax is determined &#10;174.2   in the same manner as the tax imposed by section 290.02, except that sections 290.05, &#10;174.3   subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply<ins>, </ins>&#10;174.4   <ins>and the occupation tax shall be computed by applying to taxable income the rate of 2.45 </ins>&#10;174.5   <ins>percent</ins>. A person subject to occupation tax under this section shall apportion its net &#10;174.6   income on the basis of the percentage obtained by taking the sum of:&#10;174.7   (1) 75 percent of the percentage which the sales made within this state in connection &#10;174.8   with the trade or business during the tax period are of the total sales wherever made in &#10;174.9   connection with the trade or business during the tax period;&#10;174.10  (2) 12.5 percent of the percentage which the total tangible property used by the &#10;174.11  taxpayer in this state in connection with the trade or business during the tax period is of &#10;174.12  the total tangible property, wherever located, used by the taxpayer in connection with the &#10;174.13  trade or business during the tax period; and&#10;174.14  (3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or &#10;174.15  incurred in this state or paid in respect to labor performed in this state in connection with &#10;174.16  the trade or business during the tax period are of the taxpayer's total payrolls paid or &#10;174.17  incurred in connection with the trade or business during the tax period.&#10;174.18  The tax is in addition to all other taxes.&#10;174.19  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;174.20  <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.6.0"></a>174.21      Sec. 6. Minnesota Statutes 2004, section 298.01, subdivision 4a, is amended to read:&#10;174.22      Subd. 4a. <b>Gross income.</b> (a) For purposes of determining a person's taxable income &#10;174.23  under subdivision 4, gross income is determined by the mine value of the ore mined in &#10;174.24  Minnesota and includes any gain or loss recognized from the sale or disposition of assets &#10;174.25  used in the business in this state.&#10;174.26  (b) Mine value is the value, or selling price, of iron ore or taconite concentrates, f.o.b. &#10;174.27  mine. The mine value is calculated by multiplying the iron unit price for the period, as &#10;174.28  determined by the commissioner, by the tons produced and the weighted average analysis.&#10;174.29  (c) In applying section  290.191, subdivision 5, transfers of iron ore and taconite &#10;174.30  concentrates are deemed to be sales <del>outside</del><ins> in</ins> this state <del>if the iron ore or taconite </del>&#10;174.31  <del>concentrates are transported out of this state after the raw iron ore and taconite </del>&#10;174.32  <del>concentrates have been converted to a marketable quality</del>. &#10;174.33  <ins>(d) If iron ore or taconite and a mineral, metal, or energy resource referred to in </ins>&#10;174.34  <ins>section 298.016 is mined and processed at the same mine and plant, a gross income for </ins>&#10;174.35  <ins>each mineral, metal, or energy resource must be determined separately from the mine </ins>&#10;175.1   <ins>value for the iron ore or taconite. The gross income may be combined on one occupation </ins>&#10;175.2   <ins>tax return to arrive at the gross income from all production.</ins>&#10;175.3   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;175.4   <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.7.0"></a>175.5       Sec. 7. Minnesota Statutes 2004, section 298.01, subdivision 4b, is amended to read:&#10;175.6       Subd. 4b. <b>Deductions.</b> For purposes of determining taxable income under &#10;175.7   subdivision 4, the deductions from gross income include only those expenses necessary &#10;175.8   to convert raw iron ore or taconite concentrates to marketable quality. Such expenses &#10;175.9   include costs associated with beneficiation and refinement but do not include expenses &#10;175.10  such as transportation, stockpiling, marketing, or marine insurance that are incurred after &#10;175.11  marketable iron ore or taconite pellets are produced.<ins> The allowable deductions from a </ins>&#10;175.12  <ins>mine or plant that mines and produces iron ore or taconite and one or more mineral or </ins>&#10;175.13  <ins>metal referred to in section 298.016 must be determined separately for the purposes of </ins>&#10;175.14  <ins>computing the deduction in section 290.01, subdivision 19c, clause (9). These deductions </ins>&#10;175.15  <ins>may be combined on one occupation tax return to arrive at the deduction from gross </ins>&#10;175.16  <ins>income for all production.</ins>&#10;175.17  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;175.18  <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.8.0"></a>175.19      Sec. 8. Minnesota Statutes 2004, section 298.01, is amended by adding a subdivision &#10;175.20  to read:&#10;175.21      <ins>Subd. 6.</ins> <ins><b>Deductions applicable to mining both taconite and other ores; ratio </b></ins>&#10;175.22  <ins><b>applied.</b></ins> <ins>If a person is engaged in the business of mining or producing both iron ores, </ins>&#10;175.23  <ins>taconite concentrates, or direct reduced ore, and other ores from the same mine or </ins>&#10;175.24  <ins>facility, that person must separately determine the mine value of (1) the iron ore, taconite </ins>&#10;175.25  <ins>concentrates, and direct reduced ore, and (2) the amount of gross proceeds from mining </ins>&#10;175.26  <ins>other ores in Minnesota. The ratio of mine value from iron ore, taconite concentrates, </ins>&#10;175.27  <ins>and direct reduced ore to gross proceeds from mining other ores must be applied to </ins>&#10;175.28  <ins>deductions common to both processes to determine taxable income for tax paid pursuant </ins>&#10;175.29  <ins>to subdivisions 3 and 4.</ins>&#10;175.30  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for tax years beginning after </ins>&#10;175.31  <ins>December 31, 2005.</ins>&#10;&#10;<a id="go.13.9.0"></a>176.1       Sec. 9. Minnesota Statutes 2004, section 298.17, is amended to read:&#10;176.2   <b>298.17 OCCUPATION TAXES TO BE APPORTIONED.</b>&#10;176.3       <ins>Subdivision 1.</ins> <ins><b>Apportionment under Constitution.</b></ins> All occupation taxes paid by &#10;176.4   persons, copartnerships, companies, joint stock companies, corporations, and associations, &#10;176.5   however or for whatever purpose organized, engaged in the business of mining or &#10;176.6   producing iron ore or other ores, when collected shall be apportioned and distributed in &#10;176.7   accordance with the Constitution of the state of Minnesota, article X, section 3, in the &#10;176.8   manner following: 90 percent shall be deposited in the state treasury and credited to &#10;176.9   the general fund of which four-ninths shall be used for the support of elementary and &#10;176.10  secondary schools; and ten percent of the proceeds of the tax imposed by this section &#10;176.11  shall be deposited in the state treasury and credited to the general fund for the general &#10;176.12  support of the university. &#10;176.13      <ins>Subd. 2.</ins> <ins><b>Apportionment to IRRRB.</b></ins> Of the moneys apportioned to the general &#10;176.14  fund by this section<ins>, and not used for the support of elementary and secondary schools or </ins>&#10;176.15  <ins>the university,</ins> there is annually appropriated and credited to the Iron Range Resources and &#10;176.16  Rehabilitation Board account in the special revenue fund an amount equal to that which &#10;176.17  would have been generated by a 1.5 cent tax imposed by section  298.24 on each taxable &#10;176.18  ton produced in the preceding calendar year, to be expended for the purposes of section  &#10;176.19  298.22. The money appropriated pursuant to this section shall be used (1) to provide &#10;176.20  environmental development grants to local governments located within any county in &#10;176.21  region 3 as defined in governor's executive order number 60, issued on June 12, 1970, &#10;176.22  which does not contain a municipality qualifying pursuant to section  273.134, paragraph &#10;176.23  (b), or (2) to provide economic development loans or grants to businesses located within &#10;176.24  any such county, provided that the county board or an advisory group appointed by &#10;176.25  the county board to provide recommendations on economic development shall make &#10;176.26  recommendations to the Iron Range Resources and Rehabilitation Board regarding the &#10;176.27  loans. Payment to the Iron Range Resources and Rehabilitation Board account shall be &#10;176.28  made by May 15 annually. &#10;176.29  Of the money allocated to Koochiching County, one-third must be paid to the &#10;176.30  Koochiching County Economic Development Commission.&#10;176.31      <ins>Subd. 3.</ins> <ins><b>Apportionment to Minnesota minerals 21st century fund.</b></ins> <ins>The </ins>&#10;176.32  <ins>money apportioned to the general fund by this section that is not used for the support of </ins>&#10;176.33  <ins>elementary and secondary schools or the university, and that is not apportioned under </ins>&#10;176.34  <ins>subdivision 2, is annually appropriated to the Minnesota minerals 21st century fund </ins>&#10;176.35  <ins>created in section 116J.423.</ins>&#10;177.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes paid in 2007 and subsequent </ins>&#10;177.2   <ins>years.</ins>&#10;&#10;<a id="go.13.10.0"></a>177.3       Sec. 10. Minnesota Statutes 2005 Supplement, section 298.223, subdivision 1, is &#10;177.4   amended to read:&#10;177.5       Subdivision 1. <b>Creation; purposes.</b> A fund called the taconite environmental &#10;177.6   protection fund is created for the purpose of reclaiming, restoring and enhancing those &#10;177.7   areas of northeast Minnesota located within the taconite assistance area defined in section &#10;177.8   273.1341, that are adversely affected by the environmentally damaging operations &#10;177.9   involved in mining taconite and iron ore and producing iron ore concentrate and for the &#10;177.10  purpose of promoting the economic development of northeast Minnesota. The taconite &#10;177.11  environmental protection fund shall be used for the following purposes:&#10;177.12  (a) to initiate investigations into matters the Iron Range Resources and Rehabilitation &#10;177.13  Board determines are in need of study and which will determine the environmental &#10;177.14  problems requiring remedial action;&#10;177.15  (b) reclamation, restoration, or reforestation of minelands not otherwise provided &#10;177.16  for by state law;&#10;177.17  (c) local economic development projects but only if those projects are approved by &#10;177.18  the board, and public works, including construction of sewer and water systems located &#10;177.19  within the taconite assistance area defined in section 273.1341;&#10;177.20  (d) monitoring of mineral industry related health problems among mining &#10;177.21  employees<ins>; and</ins>&#10;177.22  <ins>(e) local renewable energy investments undertaken in cooperation with local units of </ins>&#10;177.23  <ins>government and mineland areas reforestation, reclamation, or development projects. The </ins>&#10;177.24  <ins>projects must be approved by the Iron Range Resources and Rehabilitation Board and </ins>&#10;177.25  <ins>located within the taconite assistance area as defined in section 273.1341. The board may </ins>&#10;177.26  <ins>enter into joint ventures with private or public entities to advance these projects</ins>.&#10;177.27  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.13.11.0"></a>177.28      Sec. 11. Minnesota Statutes 2004, section 298.227, is amended to read:&#10;177.29  <b>298.227 TACONITE ECONOMIC DEVELOPMENT FUND.</b>&#10;177.30  An amount equal to that distributed pursuant to each taconite producer's taxable &#10;177.31  production and qualifying sales under section  298.28, subdivision 9a, shall be held by &#10;177.32  the Iron Range Resources and Rehabilitation Board in a separate taconite economic &#10;177.33  development fund for each taconite and direct reduced ore producer. Money from the &#10;178.1   fund for each producer shall be released by the commissioner after review by a joint &#10;178.2   committee consisting of an equal number of representatives of the salaried employees and &#10;178.3   the nonsalaried production and maintenance employees of that producer. The District 11 &#10;178.4   director of the United States Steelworkers of America, on advice of each local employee &#10;178.5   president, shall select the employee members. In nonorganized operations, the employee &#10;178.6   committee shall be elected by the nonsalaried production and maintenance employees. &#10;178.7   The review must be completed no later than six months after the producer presents a &#10;178.8   proposal for expenditure of the funds to the committee. The funds held pursuant to this &#10;178.9   section may be released only for acquisition of equipment and facilities for the producer &#10;178.10  or for research and development in Minnesota on new mining, or taconite, iron, or steel &#10;178.11  production technology, but only if the producer provides a matching expenditure to be &#10;178.12  used for the same purpose of at least 50 percent of the distribution based on 14.7 cents &#10;178.13  per ton beginning with distributions in 2002. <ins>If a producer uses money from the fund for </ins>&#10;178.14  <ins>procuring haulage trucks, mobile equipment, and mining shovels more than once in a </ins>&#10;178.15  <ins>three-year period, the second and subsequent purchases of such pieces of equipment must </ins>&#10;178.16  <ins>be assembled by employees of the producer on the producer's property in this state. </ins>If a &#10;178.17  taconite production facility is sold after operations at the facility had ceased, any money &#10;178.18  remaining in the fund for the former producer may be released to the purchaser of the &#10;178.19  facility on the terms otherwise applicable to the former producer under this section. If a &#10;178.20  producer fails to provide matching funds for a proposed expenditure within six months &#10;178.21  after the commissioner approves release of the funds, the funds are available for release to &#10;178.22  another producer in proportion to the distribution provided and under the conditions of &#10;178.23  this section. Any portion of the fund which is not released by the commissioner within &#10;178.24  two years of its deposit in the fund shall be divided between the taconite environmental &#10;178.25  protection fund created in section  298.223 and the Douglas J. Johnson economic protection &#10;178.26  trust fund created in section  298.292 for placement in their respective special accounts. &#10;178.27  Two-thirds of the unreleased funds shall be distributed to the taconite environmental &#10;178.28  protection fund and one-third to the Douglas J. Johnson economic protection trust fund. &#10;&#10;<a id="go.13.12.0"></a>178.29      Sec. 12. Minnesota Statutes 2004, section 298.28, is amended by adding a subdivision &#10;178.30  to read:&#10;178.31      <ins>Subd. 2a.</ins> <ins><b>Cities and towns.</b></ins> <ins>Two cents per taxable ton is allocated to the city or </ins>&#10;178.32  <ins>town in the county in which the land from which the taconite was mined or quarried or </ins>&#10;178.33  <ins>within which the concentrate was produced. If the mining, quarrying, and concentration, </ins>&#10;178.34  <ins>or different steps in either thereof are carried on in more than one taxing district, the </ins>&#10;178.35  <ins>commissioner shall apportion equitably the proceeds of the part of the tax going to cities </ins>&#10;179.1   <ins>and towns among the subdivisions by attributing 50 percent of the proceeds of the tax to </ins>&#10;179.2   <ins>the operation of mining or quarrying the taconite, and the remainder to the concentrating </ins>&#10;179.3   <ins>plant and to the processes of concentration, and with respect to each thereof giving due </ins>&#10;179.4   <ins>consideration to the relative extent of such operations performed in each taxing district. </ins>&#10;179.5   <ins>The commissioner's apportionment order is subject to review by the Tax Court upon </ins>&#10;179.6   <ins>petition by any of the interested taxing districts, in the same manner as other orders of </ins>&#10;179.7   <ins>the commissioner.</ins>&#10;179.8   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes paid in 2007 and subsequent </ins>&#10;179.9   <ins>years.</ins>&#10;&#10;<a id="go.13.13.0"></a>179.10      Sec. 13. Minnesota Statutes 2004, section 298.28, subdivision 6, is amended to read:&#10;179.11      Subd. 6. <b>Property tax relief.</b> (a) In 2002 and thereafter, 33.9 cents per taxable &#10;179.12  ton, less any amount required to be distributed under paragraphs (b) and (c), <ins>or section </ins>&#10;179.13  <ins>298.2961, subdivision 5, </ins> must be allocated to St. Louis County acting as the counties' &#10;179.14  fiscal agent, to be distributed as provided in sections  273.134 to  273.136. &#10;179.15  (b) If an electric power plant owned by and providing the primary source of power &#10;179.16  for a taxpayer mining and concentrating taconite is located in a county other than the &#10;179.17  county in which the mining and the concentrating processes are conducted, .1875 cent per &#10;179.18  taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.&#10;179.19  (c) If an electric power plant owned by and providing the primary source of power &#10;179.20  for a taxpayer mining and concentrating taconite is located in a school district other than &#10;179.21  a school district in which the mining and concentrating processes are conducted, .4541 &#10;179.22  cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to &#10;179.23  the school district.&#10;&#10;<a id="go.13.14.0"></a>179.24      Sec. 14. Minnesota Statutes 2004, section 298.28, subdivision 8, is amended to read:&#10;179.25      Subd. 8. <b>Range Association of Municipalities and Schools.</b> <del>.20</del><ins> .30</ins> cent per &#10;179.26  taxable ton shall be paid to the Range Association of Municipalities and Schools, for &#10;179.27  the purpose of providing an areawide approach to problems which demand coordinated &#10;179.28  and cooperative actions and which are common to those areas of northeast Minnesota &#10;179.29  affected by operations involved in mining iron ore and taconite and producing concentrate &#10;179.30  therefrom, and for the purpose of promoting the general welfare and economic &#10;179.31  development of the cities, towns and school districts within the iron range area of &#10;179.32  northeast Minnesota.&#10;180.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes paid in 2007 and subsequent </ins>&#10;180.2   <ins>years.</ins>&#10;&#10;<a id="go.13.15.0"></a>180.3       Sec. 15. Minnesota Statutes 2004, section 298.28, is amended by adding a subdivision &#10;180.4   to read:&#10;180.5       <ins>Subd. 9c.</ins> <ins><b>Taconite environmental fund-renewable energy.</b></ins> <ins>4.4 cents per taxable </ins>&#10;180.6   <ins>ton is allocated to the taconite environmental protection fund for projects under section </ins>&#10;180.7   <ins>298.223, subdivision 1, paragraph (e).</ins>&#10;180.8   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxes paid in 2007 and subsequent </ins>&#10;180.9   <ins>years.</ins>&#10;&#10;<a id="go.13.16.0"></a>180.10      Sec. 16. Minnesota Statutes 2005 Supplement, section 298.2961, subdivision 4, &#10;180.11  is amended to read:&#10;180.12      Subd. 4. <b>Grant and loan fund.</b> (a) A fund is established to receive distributions &#10;180.13  under section 298.28, subdivision 9b, and to make grants or loans as provided in this &#10;180.14  subdivision. Any grant or loan made under this subdivision must be approved by &#10;180.15  a majority of the members of the Iron Range Resources and Rehabilitation Board, &#10;180.16  established under section 298.22.&#10;180.17  (b) Distributions received in calendar year 2005 are allocated to the city of Virginia &#10;180.18  for improvements and repairs to the city's steam heating system.&#10;180.19  (c) Distributions received in calendar year 2006 are allocated to a project of the &#10;180.20  public utilities commissions of the cities of Hibbing and Virginia to convert their electrical &#10;180.21  generating plants to the use of biomass products, such as wood.&#10;180.22  (d) Distributions received in calendar year 2007 must be paid to the city of Tower to &#10;180.23  be used for the East Two Rivers project in or near the city of Tower.&#10;180.24  (e) For distributions received in 2008 and later, <del>amounts may be allocated to joint </del>&#10;180.25  <del>ventures with mining companies for reclamation of lands containing abandoned or worked </del>&#10;180.26  <del>out mines to convert these lands to marketable properties for residential, recreational, </del>&#10;180.27  <del>commercial, or other valuable uses</del><ins> the first $2,000,000 of the 2008 distribution must be </ins>&#10;180.28  <ins>paid to St. Louis County for deposit in its county road and bridge fund to be used for </ins>&#10;180.29  <ins>relocation of St. Louis County Road 715, commonly referred to as Pike River Road, </ins>&#10;180.30  <ins>$250,000 must be paid to the Hibbing Public Utilities Commission for a new well, and the </ins>&#10;180.31  <ins>remainder of the 2008 distribution and the full amount of the distributions in 2009 and </ins>&#10;180.32  <ins>subsequent years is allocated for projects under section 298.223, subdivision 1, clause (e)</ins>.&#10;&#10;<a id="go.13.17.0"></a>181.1       Sec. 17. Minnesota Statutes 2004, section 298.2961, is amended by adding a &#10;181.2   subdivision to read:&#10;181.3       <ins>Subd. 5.</ins> <ins><b>Public works and local economic development fund.</b></ins> <ins>For distributions in </ins>&#10;181.4   <ins>2007 only, a special fund is established to receive 38.4 cents per ton that otherwise would </ins>&#10;181.5   <ins>be allocated under section 298.28, subdivision 6. The following amounts are allocated to </ins>&#10;181.6   <ins>St. Louis County acting as the fiscal agent for the recipients for the specific purposes:</ins>&#10;181.7   <ins>(1) 13.4 cents per ton for the Central Iron Range Sanitary Sewer District for </ins>&#10;181.8   <ins>construction of a combined wastewater facility;</ins>&#10;181.9   <ins>(2) six cents per ton to the city of Eveleth to redesign and design and construct </ins>&#10;181.10  <ins>improvements to renovate its water treatment facility;</ins>&#10;181.11  <ins>(3) one cent per ton for the East Range Joint Powers Board to acquire land for and to </ins>&#10;181.12  <ins>design a central wastewater collection and treatment system;</ins>&#10;181.13  <ins>(4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;</ins>&#10;181.14  <ins>(5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;</ins>&#10;181.15  <ins>(6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;</ins>&#10;181.16  <ins>(7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and </ins>&#10;181.17  <ins>Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment </ins>&#10;181.18  <ins>and Economic Development;</ins>&#10;181.19  <ins>(8) 0.4 cents per ton to the city of Keewatin for a new city well;</ins>&#10;181.20  <ins>(9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous </ins>&#10;181.21  <ins>materials center;</ins>&#10;181.22  <ins>(10) 0.9 cents per ton to Aitkin County Growth for an economic development </ins>&#10;181.23  <ins>project for peat harvesting;</ins>&#10;181.24  <ins>(11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;</ins>&#10;181.25  <ins>(12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive </ins>&#10;181.26  <ins>plan;</ins>&#10;181.27  <ins>(13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;</ins>&#10;181.28  <ins>(14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake </ins>&#10;181.29  <ins>Environmental Learning Center; </ins>&#10;181.30  <ins>(15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;</ins>&#10;181.31  <ins>(16) 0.5 cents per ton to the Economic Development Authority of the city of Grand </ins>&#10;181.32  <ins>Rapids for planning for the North Central Research and Technology Laboratory;</ins>&#10;181.33  <ins>(17) 0.6 cents per ton to the city of Bovey for sewer and water extension;</ins>&#10;181.34  <ins>(18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and </ins>&#10;181.35  <ins>(19) ten cents per ton to an economic development authority in a city through which </ins>&#10;181.36  <ins>State Highway 1 passes, or a city in Independent School District No. 2142 that has an </ins>&#10;182.1   <ins>active mine, for an economic development project approved by the Iron Range Resources </ins>&#10;182.2   <ins>and Rehabilitation Board.</ins>&#10;182.3   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.13.18.0"></a>182.4       Sec. 18. Minnesota Statutes 2004, section 298.75, is amended by adding a subdivision &#10;182.5   to read:&#10;182.6        <ins>Subd. 10.</ins> <ins><b>Tax may be imposed; Sylvan Township.</b></ins>  <ins>(a) If Cass County does not </ins>&#10;182.7   <ins>impose a tax under this section and approves imposition of the tax under this subdivision, </ins>&#10;182.8   <ins>the town of Sylvan in Cass County may impose the aggregate materials tax under this </ins>&#10;182.9   <ins>section. </ins>&#10;182.10   <ins>(b) For purposes of exercising the powers contained in this section, the "town" is </ins>&#10;182.11  <ins>deemed to be the "county." </ins>&#10;182.12   <ins>(c) All provisions in this section apply to the town of Sylvan, except that, in lieu </ins>&#10;182.13  <ins>of the distribution of the tax proceeds under subdivision 7, all proceeds of the tax must </ins>&#10;182.14  <ins>be retained by the town. </ins>&#10;182.15   <ins>(d) If Cass County imposes an aggregate materials tax under this section, the tax </ins>&#10;182.16  <ins>imposed by the town of Sylvan under this subdivision is repealed on the effective date </ins>&#10;182.17  <ins>of the Cass County tax. </ins>&#10;182.18  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day after the governing body of </ins>&#10;182.19  <ins>the town of Sylvan and its chief clerical officer comply with section 645.021, subdivisions </ins>&#10;182.20  <ins>2 and 3. </ins>&#10;&#10;<a id="go.13.19.0"></a>182.21      Sec. 19. <ins><b>TRANSITION PROVISIONS.</b></ins>&#10;182.22  <ins>Each person with an alternative minimum tax credit on December 31, 2005, pursuant </ins>&#10;182.23  <ins>to Minnesota Statutes 2004, section 298.01, may take that credit against occupation tax </ins>&#10;182.24  <ins>under Minnesota Statutes 2004, section 298.01, subdivisions 3d and 4e.</ins>&#10;182.25  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.13.20.0"></a>182.26      Sec. 20. <ins><b> REPEALER.</b></ins>&#10;182.27  <ins>Minnesota Statutes 2004, section 298.01, subdivisions 3c, 3d, 4d, and 4e,</ins><ins> are </ins>&#10;182.28  <ins>repealed effective for tax years beginning after December 31, 2005.</ins>&#10;&#10;<a id="go.14.0.0"></a>183.1                                          <b>ARTICLE 14</b>&#10;183.2                                        <b>MISCELLANEOUS</b>&#10;&#10;<a id="go.14.1.0"></a>183.3       Section 1. Minnesota Statutes 2004, section 256.482, subdivision 8, is amended to read:&#10;183.4       Subd. 8. <b>Sunset.</b> Notwithstanding section  15.059, subdivision 5, the Council on &#10;183.5   Disability shall not sunset until June 30, <del>2007</del><ins> 2011</ins>. &#10;183.6   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective upon final enactment.</ins>&#10;&#10;<a id="go.14.2.0"></a>183.7       Sec. 2. Minnesota Statutes 2004, section 270A.03, subdivision 2, is amended to read:&#10;183.8       Subd. 2. <b>Claimant agency.</b> "Claimant agency" means any state agency, as &#10;183.9   defined by section  14.02, subdivision 2, the regents of the University of Minnesota, any &#10;183.10  district court of the state, any county, any statutory or home rule charter city <del>presenting </del>&#10;183.11  <del>a claim for a municipal hospital or a public library or a municipal ambulance service</del>, a &#10;183.12  hospital district, a private nonprofit hospital that leases its building from the county in &#10;183.13  which it is located, any public agency responsible for child support enforcement, any &#10;183.14  public agency responsible for the collection of court-ordered restitution, and any public &#10;183.15  agency established by general or special law that is responsible for the administration of &#10;183.16  a low-income housing program, and the Minnesota collection enterprise as defined in &#10;183.17  section  16D.02, subdivision 8, for the purpose of collecting the costs imposed under &#10;183.18  section  16D.11. A county may act as a claimant agency on behalf of an ambulance service &#10;183.19  licensed under chapter 144E if the ambulance service's primary service area is located at &#10;183.20  least in part within the county, but more than one county may not act as a claimant agency &#10;183.21  for a licensed ambulance service with respect to the same debt.&#10;&#10;<a id="go.14.3.0"></a>183.22      Sec. 3. <ins><b>[270C.415] INCOME TAX RETURN PROCESSING; AGREEMENT </b></ins>&#10;183.23  <ins><b>WITH INTERNAL REVENUE SERVICE.</b></ins>&#10;183.24  <ins>The commissioner of revenue shall enter into an agreement with the United States </ins>&#10;183.25  <ins>Internal Revenue Service to participate in a tax processing program whereby the Internal </ins>&#10;183.26  <ins>Revenue Service processes electronically filed state returns together with the federal </ins>&#10;183.27  <ins>returns. If possible, the ability of taxpayers to file property tax refund claims under chapter </ins>&#10;183.28  <ins>290A with state income tax returns must be preserved.</ins>&#10;&#10;<a id="go.14.4.0"></a>183.29      Sec. 4. Minnesota Statutes 2005 Supplement, section 272.02, subdivision 83, is &#10;183.30  amended to read:&#10;184.1       Subd. 83. <b>International economic development zone property.</b> (a) Improvements &#10;184.2   to real property, and personal property, classified under section 273.13, subdivision &#10;184.3   24, and located within the international economic development zone designated under &#10;184.4   section 469.322, are exempt from ad valorem taxes levied under chapter 275, if the &#10;184.5   improvements are:&#10;184.6   (1) part of a regional distribution center as defined in section 469.321; or&#10;184.7   (2) occupied by a qualified business as defined in section 469.321, that uses the &#10;184.8   improvements primarily in freight forwarding operations.&#10;184.9   (b) <del>The exemption applies beginning for the first assessment year after designation of </del>&#10;184.10  <del>the international economic development zone.</del> The exemption applies to each assessment &#10;184.11  year that begins during the duration of the international economic development zone. To &#10;184.12  be exempt under paragraph (a), clause (2), the property must be occupied by July 1 of the &#10;184.13  assessment year by a qualified business that has signed the business subsidy agreement &#10;184.14  by July 1 of the assessment year.&#10;184.15  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.5.0"></a>184.16      Sec. 5. Minnesota Statutes 2004, section 289A.09, subdivision 2, is amended to read:&#10;184.17      Subd. 2. <b>Withholding statement to employee or payee and to commissioner.</b> (a) &#10;184.18  A person required to deduct and withhold from an employee a tax under section  290.92, &#10;184.19  subdivision 2a or 3, or  290.923, subdivision 2, or who would have been required to &#10;184.20  deduct and withhold a tax under section  290.92, subdivision 2a or 3, or persons required &#10;184.21  to withhold tax under section  290.923, subdivision 2, determined without regard to &#10;184.22  section  290.92, subdivision 19, if the employee or payee had claimed no more than one &#10;184.23  withholding exemption, or who paid wages or made payments not subject to withholding &#10;184.24  under section  290.92, subdivision 2a or 3, or  290.923, subdivision 2, to an employee or &#10;184.25  person receiving royalty payments in excess of $600, or who has entered into a voluntary &#10;184.26  withholding agreement with a payee under section  290.92, subdivision 20, must give &#10;184.27  every employee or person receiving royalty payments in respect to the remuneration paid &#10;184.28  by the person to the employee or person receiving royalty payments during the calendar &#10;184.29  year, on or before January 31 of the succeeding year, or, if employment is terminated &#10;184.30  before the close of the calendar year, within 30 days after the date of receipt of a written &#10;184.31  request from the employee if the 30-day period ends before January 31, a written statement &#10;184.32  showing the following: &#10;184.33  (1) name of the person;&#10;184.34  (2) the name of the employee or payee and the employee's or payee's Social &#10;184.35  Security account number;&#10;185.1   (3) the total amount of wages as that term is defined in section  290.92, subdivision &#10;185.2   1, paragraph (1); the total amount of remuneration subject to withholding under section  &#10;185.3   290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the &#10;185.4   Internal Revenue Code; and the amount of royalties subject to withholding under section  &#10;185.5   290.923, subdivision 2; and &#10;185.6   (4) the total amount deducted and withheld as tax under section  290.92, subdivision &#10;185.7   2a or 3, or  290.923, subdivision 2. &#10;185.8   (b) The statement required to be furnished by this paragraph with respect to any &#10;185.9   remuneration must be furnished at those times, must contain the information required, and &#10;185.10  must be in the form the commissioner prescribes.&#10;185.11  (c) The commissioner may prescribe rules providing for reasonable extensions of &#10;185.12  time, not in excess of 30 days, to employers or payers required to give the statements to &#10;185.13  their employees or payees under this subdivision.&#10;185.14  (d) A duplicate of any statement made under this subdivision and in accordance &#10;185.15  with rules prescribed by the commissioner, along with a reconciliation in the form the &#10;185.16  commissioner prescribes of the statements for the calendar year, including a reconciliation &#10;185.17  of the quarterly returns required to be filed under subdivision 1, must be filed with the &#10;185.18  commissioner on or before February 28 of the year after the payments were made.&#10;185.19  (e) If an employer cancels the employer's Minnesota withholding account number &#10;185.20  required by section  290.92, subdivision 24, the information required by paragraph (d), &#10;185.21  must be filed with the commissioner within 30 days of the end of the quarter in which &#10;185.22  the employer cancels its account number. &#10;185.23  (f) The employer must submit the statements required to be sent to the commissioner &#10;185.24  <del>on magnetic media, if the magnetic media was required to satisfy the federal reporting </del>&#10;185.25  <del>requirements of section 6011(e) of the Internal Revenue Code and the regulations issued </del>&#10;185.26  <del>under it</del><ins> by electronic means</ins>.&#10;185.27  (g) A "third-party bulk filer" as defined in section  290.92, subdivision 30, paragraph &#10;185.28  (a), clause (2), must submit the returns required by this subdivision and subdivision 1, &#10;185.29  paragraph (a), with the commissioner by electronic means. &#10;185.30  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for returns due after June 30, 2006.</ins>&#10;&#10;<a id="go.14.6.0"></a>185.31      Sec. 6. Minnesota Statutes 2005 Supplement, section 290.0922, subdivision 2, is &#10;185.32  amended to read:&#10;185.33      Subd. 2. <b>Exemptions.</b> The following entities are exempt from the tax imposed &#10;185.34  by this section:&#10;185.35  (1) corporations exempt from tax under section 290.05;&#10;186.1   (2) real estate investment trusts;&#10;186.2   (3) regulated investment companies or a fund thereof; and&#10;186.3   (4) entities having a valid election in effect under section 860D(b) of the Internal &#10;186.4   Revenue Code;&#10;186.5   (5) town and farmers' mutual insurance companies;&#10;186.6   (6) cooperatives organized under chapter 308A or 308B that provide housing &#10;186.7   exclusively to persons age 55 and over and are classified as homesteads under section &#10;186.8   273.124, subdivision 3;&#10;186.9   (7) an entity, if for the taxable year all of its property is located in a job opportunity &#10;186.10  building zone designated under section 469.314 and all of its payroll is a job opportunity &#10;186.11  building zone payroll under section 469.310; and&#10;186.12  (8) an entity, if for the taxable year all of its property is located in an international &#10;186.13  economic development zone designated under section 469.322, and all of its payroll is &#10;186.14  international economic development zone payroll under section 469.321.<ins> The exemption </ins>&#10;186.15  <ins>under this clause applies to taxable years beginning during the duration of the international </ins>&#10;186.16  <ins>economic development zone.</ins>&#10;186.17  Entities not specifically exempted by this subdivision are subject to tax under this &#10;186.18  section, notwithstanding section 290.05.&#10;186.19  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment. </ins>&#10;&#10;<a id="go.14.7.0"></a>186.20      Sec. 7. Minnesota Statutes 2005 Supplement, section 290.0922, subdivision 3, is &#10;186.21  amended to read:&#10;186.22      Subd. 3. <b>Definitions.</b> (a) "Minnesota sales or receipts" means the total sales &#10;186.23  apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts &#10;186.24  attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the &#10;186.25  total sales or receipts apportioned or attributed to Minnesota pursuant to any other &#10;186.26  apportionment formula applicable to the taxpayer.&#10;186.27  (b) "Minnesota property" means total Minnesota tangible property as provided in &#10;186.28  section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota, &#10;186.29  but does not include<ins>: (1)</ins> property located in a job opportunity building zone designated &#10;186.30  under section 469.314, <del>or</del><ins> (2)</ins> property of a qualified business located in a biotechnology &#10;186.31  and health sciences industry zone designated under section 469.334, or<ins> (3) for taxable </ins>&#10;186.32  <ins>years beginning during the duration of the zone,</ins> property of a qualified business located &#10;186.33  in the international economic development zone designated under section 469.322. &#10;186.34  Intangible property shall not be included in Minnesota property for purposes of this &#10;186.35  section. Taxpayers who do not utilize tangible property to apportion income shall &#10;187.1   nevertheless include Minnesota property for purposes of this section. On a return for &#10;187.2   a short taxable year, the amount of Minnesota property owned, as determined under &#10;187.3   section 290.191, shall be included in Minnesota property based on a fraction in which the &#10;187.4   numerator is the number of days in the short taxable year and the denominator is 365.&#10;187.5   (c) "Minnesota payrolls" means total Minnesota payrolls as provided in section &#10;187.6   290.191, subdivision 12, but does not include<ins>: (1)</ins> job opportunity building zone payrolls &#10;187.7   under section 469.310, subdivision 8, <del>or</del><ins> (2)</ins> biotechnology and health sciences industry &#10;187.8   zone payrolls under section 469.330, subdivision 8, or<ins> (3) for taxable years beginning </ins>&#10;187.9   <ins>during the duration of the zone,</ins> international economic development zone payrolls under &#10;187.10  section 469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income &#10;187.11  shall nevertheless include Minnesota payrolls for purposes of this section.&#10;187.12  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.8.0"></a>187.13      Sec. 8. Minnesota Statutes 2004, section 295.53, subdivision 4a, is amended to read:&#10;187.14      Subd. 4a. <b>Credit for research.</b> (a) In addition to the exemptions allowed under &#10;187.15  subdivision 1, a hospital or health care provider may claim an annual credit against the &#10;187.16  total amount of tax, if any, the hospital or health care provider owes for that calendar &#10;187.17  year under sections  295.50 to  295.57. The credit shall equal <del>2.5</del><ins> five </ins> percent of revenues &#10;187.18  for patient services used to fund expenditures for qualifying research conducted by an &#10;187.19  allowable research program. The amount of the credit shall not exceed the tax liability of &#10;187.20  the hospital or health care provider under sections  295.50 to  295.57. &#10;187.21  (b) For purposes of this subdivision, the following requirements apply:&#10;187.22  (1) expenditures must be for program costs of qualifying research conducted by &#10;187.23  an allowable research program;&#10;187.24  (2) an allowable research program must be a formal program of medical and &#10;187.25  health care research conducted by an entity which is exempt under section 501(c)(3) &#10;187.26  of the Internal Revenue Code of 1986 or is owned and operated under authority of a &#10;187.27  governmental unit;&#10;187.28  (3) qualifying research must:&#10;187.29  (A) be approved in writing by the governing body of the hospital or health care &#10;187.30  provider which is taking the deduction under this subdivision;&#10;187.31  (B) have as its purpose the development of new knowledge in basic or applied &#10;187.32  science relating to the diagnosis and treatment of conditions affecting the human body;&#10;187.33  (C) be subject to review by individuals with expertise in the subject matter of the &#10;187.34  proposed study but who have no financial interest in the proposed study and are not &#10;187.35  involved in the conduct of the proposed study; and&#10;188.1   (D) be subject to review and supervision by an institutional review board operating &#10;188.2   in conformity with federal regulations if the research involves human subjects or &#10;188.3   an institutional animal care and use committee operating in conformity with federal &#10;188.4   regulations if the research involves animal subjects. Research expenses are not exempt if &#10;188.5   the study is a routine evaluation of health care methods or products used in a particular &#10;188.6   setting conducted for the purpose of making a management decision. Costs of clinical &#10;188.7   research activities paid directly for the benefit of an individual patient are excluded from &#10;188.8   this exemption. Basic research in fields including biochemistry, molecular biology, and &#10;188.9   physiology are also included if such programs are subject to a peer review process.&#10;188.10  (c) No credit shall be allowed under this subdivision for any revenue received by the &#10;188.11  hospital or health care provider in the form of a grant, gift, or otherwise, whether from a &#10;188.12  government or nongovernment source, on which the tax liability under section  295.52 is &#10;188.13  not imposed. &#10;188.14  (d) The taxpayer shall apply for the credit under this section on the annual return &#10;188.15  under section  295.55, subdivision 5. &#10;188.16  (e) Beginning September 1, 2001, if the actual or estimated amount paid under this &#10;188.17  section for the calendar year exceeds <del>$2,500,000</del><ins> $7,000,000</ins>, the commissioner of finance &#10;188.18  shall determine the rate of the research credit for the following calendar year to the nearest &#10;188.19  one-half percent so that refunds paid under this section will most closely equal <del>$2,500,000</del><ins> </ins>&#10;188.20  <ins>$7,000,000</ins>. The commissioner of finance shall publish in the State Register by October 1 &#10;188.21  of each year the rate of the credit for the following calendar year. A determination under &#10;188.22  this section is not subject to the rulemaking provisions of chapter 14.&#10;188.23  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for taxable years beginning after </ins>&#10;188.24  <ins>December 31, 2006.</ins>&#10;&#10;<a id="go.14.9.0"></a>188.25      Sec. 9. <ins><b>[295.61] SPORTS MEMORABILIA TAX.</b></ins>&#10;188.26      <ins>Subdivision 1.</ins> <ins><b>Tax.</b></ins> <ins>A tax is imposed on each sale at wholesale of sports memorabilia </ins>&#10;188.27  <ins>in the state. The rate of the tax is 13 percent of the gross revenues from the sale.</ins>&#10;188.28      <ins>Subd. 2.</ins> <ins><b>Definitions.</b></ins> <ins>(a) For purposes of this section, the following terms have </ins>&#10;188.29  <ins>the meanings given them.</ins>&#10;188.30  <ins>(b) "Buyer" means any person who purchases sports memorabilia at wholesale.</ins>&#10;188.31  <ins>(c) "Commissioner" means the commissioner of revenue.</ins>&#10;188.32  <ins>(d) "Sale" means a transfer of title or possession of tangible personal property, </ins>&#10;188.33  <ins>whether absolutely or conditionally.</ins>&#10;188.34  <ins>(e) "Sports memorabilia" means items available for sale to the public that are sold </ins>&#10;188.35  <ins>under a license granted by either:</ins>&#10;189.1   <ins>(1) a professional baseball, football, basketball, or hockey league, association, or </ins>&#10;189.2   <ins>team;</ins>&#10;189.3   <ins>(2) the National Collegiate Athletic Association (NCAA);</ins>&#10;189.4   <ins>(3) an NCAA Division I college or university, excluding any multidivision </ins>&#10;189.5   <ins>classification NCAA member schools that have only one Division I sport; or</ins>&#10;189.6   <ins>(4) an individual athlete.</ins>&#10;189.7   <ins>Sports memorabilia includes:</ins>&#10;189.8   <ins>(1) one-of-a-kind items related to sports figures, teams, or events;</ins>&#10;189.9   <ins>(2) trading cards;</ins>&#10;189.10  <ins>(3) photographs;</ins>&#10;189.11  <ins>(4) clothing;</ins>&#10;189.12  <ins>(5) sports event licensed items;</ins>&#10;189.13  <ins>(6) sports equipment; and</ins>&#10;189.14  <ins>(7) similar items.</ins>&#10;189.15  <ins>(f) "Wholesale" or "sale at wholesale" means a sale to a retailer, as defined in section </ins>&#10;189.16  <ins>297A.61, subdivision 9, for the purpose of reselling the property to a third party.</ins>&#10;189.17  <ins>(g) "Wholesaler" means any person making wholesale sales of sports memorabilia </ins>&#10;189.18  <ins>to purchasers in the state.</ins>&#10;189.19      <ins>Subd. 3.</ins> <ins><b>Quarterly estimated payments.</b></ins> <ins>(a) Each wholesaler must make estimated </ins>&#10;189.20  <ins>payments of the tax for the calendar year to the commissioner in quarterly installments by </ins>&#10;189.21  <ins>April 15, July 15, October 15, and January 15 of the following calendar year.</ins>&#10;189.22  <ins>(b) Estimated tax payments are not required if the tax for the calendar year is less </ins>&#10;189.23  <ins>than $500.</ins>&#10;189.24  <ins>(c) An underpayment of estimated installments bears interest at the rate specified in </ins>&#10;189.25  <ins>section 270C.40, from the due date of the payment until paid or until the due date of the </ins>&#10;189.26  <ins>annual return at the rate specified in section 270C.40. An underpayment of an estimated </ins>&#10;189.27  <ins>installment is the difference between the amount paid and the lesser of (1) 90 percent of </ins>&#10;189.28  <ins>one-quarter of the tax for the calendar year, or (2) the tax for the actual gross revenues </ins>&#10;189.29  <ins>received during the quarter.</ins>&#10;189.30      <ins>Subd. 4.</ins> <ins><b>Electronic funds-transfer payments.</b></ins> <ins>A taxpayer with an aggregate tax </ins>&#10;189.31  <ins>liability of $120,000 or more during a fiscal year ending June 30, must remit all liabilities </ins>&#10;189.32  <ins>by funds-transfer as defined in section 336.4A-104, paragraph (a), in the next calendar </ins>&#10;189.33  <ins>year. The funds-transfer payment date, as defined in section 336.4A-401, is on or before </ins>&#10;189.34  <ins>the first funds-transfer business day after the date the tax is due.</ins>&#10;189.35      <ins>Subd. 5.</ins> <ins><b>Annual return.</b></ins> <ins>The taxpayer must file an annual return reconciling the </ins>&#10;189.36  <ins>estimated payments by March 15 of the following calendar year.</ins>&#10;190.1       <ins>Subd. 6.</ins> <ins><b>Form of returns.</b></ins> <ins>The estimated payments and annual return must contain </ins>&#10;190.2   <ins>the information and be in the form prescribed by the commissioner.</ins>&#10;190.3       <ins>Subd. 7.</ins> <ins><b>Use tax.</b></ins> <ins>If the tax is not paid under this section, a tax is imposed on </ins>&#10;190.4   <ins>possession for sale or use of sports memorabilia in the state. The rate of tax equals the rate </ins>&#10;190.5   <ins>under this section, and must be paid by the possessor of the items.</ins>&#10;190.6       <ins>Subd. 8.</ins> <ins><b>Application of other chapters.</b></ins> <ins>Unless specifically provided otherwise by </ins>&#10;190.7   <ins>this section, the enforcement, interest, and penalty provisions under chapter 270C, appeal </ins>&#10;190.8   <ins>provisions in sections 289A.43 and 289A.65, criminal penalties under section 289A.63, </ins>&#10;190.9   <ins>refund provisions in section 289A.50, and collection and rulemaking provisions under </ins>&#10;190.10  <ins>chapter 270C, apply to the tax under this section. </ins>&#10;190.11      <ins>Subd. 9.</ins> <ins><b>Disposition of revenues.</b></ins> <ins>The commissioner shall deposit all revenues, </ins>&#10;190.12  <ins>including interest and penalties, derived from the tax imposed under this section in the </ins>&#10;190.13  <ins>state treasury. A portion of the proceeds from the tax imposed in subdivision 1 are </ins>&#10;190.14  <ins>intended to fund the continuation of the Council on Disability.</ins>&#10;190.15  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective for sales after December 31, 2006.</ins>&#10;&#10;<a id="go.14.10.0"></a>190.16      Sec. 10. Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 41, &#10;190.17  is amended to read:&#10;190.18      Subd. 41. <b>International economic development zones.</b> (a) Purchases of tangible &#10;190.19  personal property or taxable services by a qualified business, as defined in section 469.321, &#10;190.20  are exempt if the property or services are primarily used or consumed in the international &#10;190.21  economic development zone designated under section 469.322. <ins>This exemption applies </ins>&#10;190.22  <ins>only if the purchase is made and delivery received after the business signed the business </ins>&#10;190.23  <ins>subsidy agreement required under chapter 469.</ins>&#10;190.24  (b) Purchase and use of construction materials, supplies, and equipment incorporated &#10;190.25  into the construction of improvements to real property in the international economic &#10;190.26  development zone are exempt if the improvements after completion of construction are &#10;190.27  to be used as a regional distribution center as defined in section 469.321 or otherwise &#10;190.28  used in the conduct of freight forwarding activities of a qualified business as defined in &#10;190.29  section 469.321. This exemption applies regardless of whether the purchases are made &#10;190.30  by the business or a contractor.&#10;190.31  (c) The exemptions under this subdivision apply to a local sales and use tax, &#10;190.32  regardless of whether the local tax is imposed on sales taxable under this chapter or in &#10;190.33  another law, ordinance, or charter provision.&#10;190.34  (d) The <del>exemption in paragraph (a) applies</del><ins> exemptions in this section apply</ins> to sales &#10;190.35  <del>during the duration of the zone and after June 30, 2007, if the purchase was made and </del>&#10;191.1   <del>delivery received after the business signs the business subsidy agreement required under </del>&#10;191.2   <del>chapter 469</del><ins> and purchases made after the date of final zone designation under section </ins>&#10;191.3   <ins>469.322, paragraph (c), and before the expiration of the zone under section 469.322, </ins>&#10;191.4   <ins>paragraph (d)</ins>.&#10;191.5   (e) For purchases made for improvements to real property to be occupied by a &#10;191.6   business that has not signed a business subsidy agreement at the time of the purchase, the &#10;191.7   tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, &#10;191.8   applied, and then refunded in the manner provided in section 297A.75 <del>beginning in fiscal </del>&#10;191.9   <del>year</del><del> 2008</del>. The taxpayer must attach to the claim for refund information sufficient for &#10;191.10  the commissioner to be able to determine that the improvements are being occupied by &#10;191.11  a business that has signed a business subsidy agreement.&#10;191.12  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.11.0"></a>191.13      Sec. 11. <ins><b>[469.193] FOREIGN TRADE ZONES.</b></ins>&#10;191.14  <ins>A city, county, town, or other political subdivision may apply to the board defined in </ins>&#10;191.15  <ins>United States Code, title 19, section 81a, for the right to use the powers provided in United </ins>&#10;191.16  <ins>States Code, title 19, sections 81a to 81u. If the right is granted, the city, county, town, or </ins>&#10;191.17  <ins>other political subdivision may use the powers within or outside of a port district. Any </ins>&#10;191.18  <ins>city, county, town, or other political subdivision may apply jointly with any other city, </ins>&#10;191.19  <ins>county, town, or other political subdivision.</ins>&#10;191.20  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.12.0"></a>191.21      Sec. 12. Minnesota Statutes 2005 Supplement, section 469.322, is amended to read:&#10;191.22  <b>469.322 DESIGNATION OF INTERNATIONAL ECONOMIC </b>&#10;191.23  <b>DEVELOPMENT ZONE.</b>&#10;191.24  (a) An area designated as a foreign trade zone may be designated by the foreign &#10;191.25  trade zone authority as an international economic development zone if within the zone &#10;191.26  a regional distribution center is being developed pursuant to section 469.323. The zone &#10;191.27  must consist of contiguous area of not less than 500 acres and not more than 1,000 acres. &#10;191.28  The designation authority under this section is limited to one zone.&#10;191.29  (b) In making the designation, the foreign trade zone authority, in consultation with &#10;191.30  the Minnesota Department of Transportation and the Metropolitan Council, shall consider &#10;191.31  access to major transportation routes, consistency with current state transportation and &#10;191.32  air cargo planning, adequacy of the size of the site, access to airport facilities, present &#10;191.33  and future capacity at the designated airport, the capability to meet integrated present &#10;192.1   and future air cargo, security, and inspection services, and access to other infrastructure &#10;192.2   and financial incentives. The border of the international economic development zone &#10;192.3   must be no more than 60 miles distant or 90 minutes drive time from the border of the &#10;192.4   Minneapolis-St. Paul International Airport.&#10;192.5   <ins>(c) Before final designation of the zone, the foreign trade zone authority, in </ins>&#10;192.6   <ins>consultation with the applicant, must conduct a transportation impact study based on the </ins>&#10;192.7   <ins>regional model and utilizing traffic forecasting and assignments. The results must be used </ins>&#10;192.8   <ins>to evaluate the effects of the proposed use on the transportation system and identify any </ins>&#10;192.9   <ins>needed improvements. If the site is in the metropolitan area the study must also evaluate </ins>&#10;192.10  <ins>the effect of the transportation impacts on the Metropolitan Transportation System plan </ins>&#10;192.11  <ins>as well as the comprehensive plans of the municipalities that would be affected. The </ins>&#10;192.12  <ins>authority shall provide copies of the study to the legislature under section 3.195 and to the </ins>&#10;192.13  <ins>chairs of the committees with jurisdiction over transportation and economic development. </ins>&#10;192.14  <ins>The applicant must pay the cost of the study.</ins>&#10;192.15  <del>(c)</del> <ins>(d)</ins> Final zone designation must be made by June 30, <del>2006</del><ins> 2008</ins>.&#10;192.16  <del>(d)</del> <ins>(e)</ins> Duration of the zone is a 12-year period beginning on January 1, <del>2007</del><ins> 2010</ins>.&#10;192.17  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.13.0"></a>192.18      Sec. 13. Minnesota Statutes 2005 Supplement, section 469.323, subdivision 2, is &#10;192.19  amended to read:&#10;192.20      Subd. 2. <b>Business plan.</b> Before designation of an international economic &#10;192.21  development zone under section 469.322, the governing body of the foreign trade zone &#10;192.22  authority shall prepare a business plan. <ins>The findings of the business plan shall be </ins>&#10;192.23  <ins>presented to the legislature pursuant to section 3.195. Copies of the business plan shall be </ins>&#10;192.24  <ins>provided to the chairs of committees with jurisdiction over transportation and economic </ins>&#10;192.25  <ins>development. </ins>The plan must include an analysis of the economic feasibility of the regional &#10;192.26  distribution center once it becomes operational and of the operations of freight forwarders &#10;192.27  and other businesses that choose to locate within the boundaries of the zone. The analysis &#10;192.28  must provide profitability models that:&#10;192.29  (1) include the benefits of the incentives;&#10;192.30  (2) estimate the amount of time needed to achieve profitability; and&#10;192.31  (3) analyze the length of time incentives will be necessary to the economic viability &#10;192.32  of the regional distribution center.&#10;192.33  If the governing body of the foreign trade authority determines that the models do &#10;192.34  not establish the economic feasibility of the project, the regional distribution center does &#10;192.35  not meet the development requirements of this section and section 469.322.&#10;&#10;<a id="go.14.14.0"></a>193.1       Sec. 14. Minnesota Statutes 2005 Supplement, section 469.327, is amended to read:&#10;193.2   <b>469.327 JOBS CREDIT.</b>&#10;193.3       Subdivision 1. <b>Credit allowed.</b> <ins>(a) </ins>A qualified business is allowed a credit against &#10;193.4   the taxes imposed under chapter 290. The credit equals seven percent of the:&#10;193.5   (1) lesser of:&#10;193.6   (i) zone payroll for the taxable year, less the zone payroll for the base year; or&#10;193.7   (ii) total Minnesota payroll for the taxable year, less total Minnesota payroll for &#10;193.8   the base year; minus&#10;193.9   (2) $30,000 multiplied by the number of full-time equivalent employees that the &#10;193.10  qualified business employs in the international economic development zone for the taxable &#10;193.11  year, minus the number of full-time equivalent employees the business employed in the &#10;193.12  zone in the base year, but not less than zero.&#10;193.13  <ins>(b) This section applies only to tax years beginning during the duration of the </ins>&#10;193.14  <ins>international economic development zone.</ins>&#10;193.15      Subd. 2. <b>Definitions.</b> (a) For purposes of this section, the following terms have &#10;193.16  the meanings given.&#10;193.17  (b) "Base year" means the taxable year beginning during<ins> the calendar year </ins>&#10;193.18  <ins>immediately preceding</ins> the calendar year in which the<del> zone designation was made</del><ins> duration </ins>&#10;193.19  <ins>of the zone begins</ins> under section 469.322, paragraph (d).&#10;193.20  (c) "Full-time equivalent employees" means the equivalent of annualized expected &#10;193.21  hours of work equal to 2,080 hours.&#10;193.22  (d) "Minnesota payroll" means the wages or salaries attributed to Minnesota under &#10;193.23  section 290.191, subdivision 12, for the qualified business or the unitary business of which &#10;193.24  the qualified business is a part, whichever is greater.&#10;193.25  (e) "Zone payroll" means wages or salaries used to determine the zone payroll &#10;193.26  factor for the qualified business, less the amount of compensation attributable to any &#10;193.27  employee that exceeds $70,000.&#10;193.28      Subd. 3. <b>Inflation adjustment.</b> For taxable years beginning after December 31, &#10;193.29  <del>2006</del><ins> 2010</ins>, the dollar amounts in subdivisions 1, clause (2); and 2, paragraph (e), are &#10;193.30  annually adjusted for inflation. The commissioner of revenue shall adjust the amounts by &#10;193.31  the percentage determined under section 290.06, subdivision 2d, for the taxable year.&#10;193.32      Subd. 4. <b>Refundable.</b> If the amount of the credit exceeds the liability for tax under &#10;193.33  chapter 290, the commissioner of revenue shall refund the excess to the qualified business.&#10;193.34      Subd. 5. <b>Appropriation.</b> An amount sufficient to pay the refunds authorized by this &#10;193.35  section is appropriated to the commissioner of revenue from the general fund.&#10;194.1   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.15.0"></a>194.2       Sec. 15. Laws 2005, First Special Session chapter 3, article 10, section 23, is amended &#10;194.3   to read:&#10;194.4   Sec. 23. GRANTS TO QUALIFYING BUSINESSES.  &#10;194.5    &#10;194.6   $750,000 is appropriated in fiscal year 2006 from the  general fund to the &#10;194.7   commissioner of employment and economic  development to be distributed to the foreign &#10;194.8   trade zone  authority to provide grants to qualified businesses as  determined by the &#10;194.9   authority, subject to Minnesota Statutes,  sections 116J.993 to 116J.995, to provide &#10;194.10  incentives for the  businesses to locate their operations in an international  economic &#10;194.11  development zone.  If the money is not distributed  during fiscal year 2006, it remains &#10;194.12  available for distribution  under this section <del>during fiscal year 2007</del><ins> until December 31, </ins>&#10;194.13  <ins>2010</ins>.  &#10;&#10;<a id="go.14.16.0"></a>194.14      Sec. 16. <ins><b>PROPERTY TAX REFUND COLLECTION ACTION PROHIBITED; </b></ins>&#10;194.15  <ins><b>REFUNDS REQUIRED.</b></ins>&#10;194.16  <ins>Notwithstanding Minnesota Statutes, section 289A.60, subdivision 12, or any other </ins>&#10;194.17  <ins>law to the contrary, the commissioner of revenue shall not disallow any part of a claim </ins>&#10;194.18  <ins>for a property tax refund filed in 2005 or an earlier year to the extent that the claim </ins>&#10;194.19  <ins>was excessive because it did not include in the claimant's income as determined under </ins>&#10;194.20  <ins>Minnesota Statutes, section 290A.03, subdivision 3, the cash value of a tuition discount </ins>&#10;194.21  <ins>provided by a postsecondary education institution. If a claimant was required to repay </ins>&#10;194.22  <ins>any part of a property tax refund based on inclusion of this discount in the claimant's </ins>&#10;194.23  <ins>income on a claim filed in 2005 or an earlier year, the commissioner must refund that </ins>&#10;194.24  <ins>amount to the claimant.</ins>&#10;194.25  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.17.0"></a>194.26      Sec. 17. <ins><b>JOINT STUDY BY COMMISSIONERS OF REVENUE AND </b></ins>&#10;194.27  <ins><b>DEPARTMENT OF EMPLOYEE RELATIONS.</b></ins>&#10;194.28  <ins>In order to increase compliance with income and franchise taxes and tax laws, the </ins>&#10;194.29  <ins>commissioners of the Departments of Revenue and Employee Relations, in consultation </ins>&#10;194.30  <ins>with the affected bargaining units, shall study the competitiveness of compensation of </ins>&#10;194.31  <ins>tax compliance auditors within the Department of Revenue. The study shall consider </ins>&#10;194.32  <ins>the performance of compliance auditors, including training, experience, employment </ins>&#10;195.1   <ins>classification, and duties. The study shall be completed by October 15, 2006, and the </ins>&#10;195.2   <ins>commissioner of employee relations shall implement its recommendations.</ins>&#10;195.3   <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.18.0"></a>195.4       Sec. 18. <ins><b>SALES AND USE TAX; SERVICES TO TAXPAYERS WITH LIMITED </b></ins>&#10;195.5   <ins><b>ENGLISH PROFICIENCY.</b></ins>&#10;195.6   <ins>The commissioner of revenue shall study and implement procedures and services </ins>&#10;195.7   <ins>that will assist sales and use taxpayers of limited English proficiency in complying with </ins>&#10;195.8   <ins>sales and use tax laws. The benefits of translating sales and use tax fact sheets, forms, </ins>&#10;195.9   <ins>and instructions into Spanish and other languages must be considered. In addition, the </ins>&#10;195.10  <ins>commissioner shall study how to direct taxpayers of limited English proficiency who </ins>&#10;195.11  <ins>contact the Department of Revenue by telephone to assistance in Spanish and other </ins>&#10;195.12  <ins>languages as determined by the commissioner. The commissioner shall report on the </ins>&#10;195.13  <ins>results of the study and a plan to implement them to the senate and house of representatives </ins>&#10;195.14  <ins>committees with jurisdiction over tax laws by February 1, 2007.</ins>&#10;195.15  <ins><b>EFFECTIVE DATE.</b></ins><ins>This section is effective the day following final enactment.</ins>&#10;&#10;<a id="go.14.19.0"></a>195.16      Sec. 19. <ins><b>TRANSFER OF MONEY.</b></ins>&#10;195.17  <ins>Any money in the tax relief account under Minnesota Statutes, section 16A.1522, </ins>&#10;195.18  <ins>subdivision 4, on the day following final enactment of this act is transferred to the general </ins>&#10;195.19  <ins>fund.</ins>&#10;&#10;<a id="go.14.20.0"></a>195.20      Sec. 20. <ins><b>COOK-ORR HOSPITAL DISTRICT; ADDITION OF TERRITORY.</b></ins>&#10;195.21  <ins>The board of the hospital district created under Laws 1988, chapter 645, may </ins>&#10;195.22  <ins>enter into an agreement with the Tribal Council of the Bois Forte Band of Minnesota </ins>&#10;195.23  <ins>Chippewa that would permit the reservation lands of the Bois Forte Band at Nett Lake </ins>&#10;195.24  <ins>and Lake Vermilion to be included in the territory of the hospital district. The agreement </ins>&#10;195.25  <ins>must establish the terms and conditions under which the territory would be so expanded, </ins>&#10;195.26  <ins>including the amount of or means for determining the amount of the contribution by the </ins>&#10;195.27  <ins>Bois Forte Band to the district.</ins>&#10;&#10;<a id="go.14.21.0"></a>195.28      Sec. 21. <ins><b>APPROPRIATION.</b></ins>&#10;195.29  <ins>$2,000,000 is appropriated from the general fund to the commissioner of public </ins>&#10;195.30  <ins>safety to be used to reimburse state and local law enforcement agencies for additional law </ins>&#10;195.31  <ins>enforcement efforts, focused on downtown Minneapolis.</ins>&#10;