Relating to taxationARTICLE 1 INDIVIDUAL INCOME TAX REFORM AND RELIEFModifying the income tax subtraction for education expenses, eliminating transportation as a qualifying expense and limiting expenditures for textbooks to instructional books; eliminating the subtractions for contributions to certain pension plans and for the amount of unrecovered accelerated cost recovery system deductions; reducing individual income tax rates and providing for future reductions; modifying the formula for computation of income taxes paid by nonresidents; increasing the working family credit; modifying the education and marriage penalty credits; reducing the alternative minimum tax rate and providing for a credit; reducing the withholding rates for certain supplemental wages, for certain payments to horse racing license holders and for lottery winnings; repealing the credit for property taxes paid on seasonal residential recreational property, the dependent care credit and certain alternative minimum tax provisions ARTICLE 2 FEDERAL UPDATEUpdating certain state income tax provisions to changes in the internal revenue code (IRC) under the consolidated appropriation act of 2001, the installment tax correction act of 2000 and the FSC repeal and extraterritorial income exclusion act of 2000; updating the definition of internal revenue code for property tax refund and estate tax purposes ARTICLE 3 CORPORATE FRANCHISE TAX REFORM Defining insurance company for franchise tax purposes; eliminating certain additions to and eliminating or modifying certain subtractions from federal taxable income; exempting insurance companies with a gross premium tax liability from the tax; reducing the franchise tax rate; modifying the definition of base amount and defining initial research expense for research credit purposes; sunsetting the alternative minimum tax; eliminating certain provisions relating to foreign corporations under the unitary business principle; modifying the net income apportionment formula; repealing the definition of foreign operating corporation, the job training program credit, certain AMT provisions, deductions allowed to corporations, certain insurance company provisions, certain requirements relating to substantially residential development districts representation on city development district advisory boards and the business income tax incentive for projects outside border city development zones ARTICLE 4 PROPERTY TAX REFORMDefining certain terms for school district funding purposes and requiring certain levy adjustments by the commissioner of children, families and learning in consultation with the commissioner of revenue; reducing the general education tax rate and levy amount to zero and modifying the formulas for general education aid and referendum equalization revenue, levy and aid; modifying the determination of the unequalized referendum levy and changing referendum tax rate percentage to referendum tax mill rate; changing market value to residential assessed value for referendum levy purposes and net tax capacity to assessed value for certain assessment or adjustment purposes; modifying the property tax exemption for institutions of public charity and expanding the exemption for personal property used for pollution control; authorizing the commissioner of revenue to approve county assessor appointments on a probationary basis; extending the time limit for county commissioners to fill county assessor vacancies and clarifying the authority of the commissioners to terminate county assessor terms; authorizing county assessors to require the attendance of licensed assessors working in the county at department of revenue instructional meetings; specifying certain training and education requirements for property tax personnel; modifying certain limited market value determination procedures and valuation notice requirements; defining assessed value for property tax classification purposes; increasing the market value limits for the first tier of residential and agricultural homestead, commercial and industrial and certain nonhomestead residential property and reducing the classification rates for homestead, seasonal residential recreational, commercial and industrial, rental (apartment) and mining property; requiring and providing for commissioner of revenue annual inflation adjustment of certain valuation limits; providing for residential and agricultural homestead market value credits, specifying certain duties of county auditors and the commissioner; modifying the determination of household adjustment factor for homestead and agricultural credit aid (HACA) purposes, permanently reducing the aid to counties and eliminating the aid to cities, towns and school and special taxing districts; modifying the payment of manufactured home homestead and agricultural credit aid, eliminating payment to cities, towns and school and special taxing districts; imposing a state tax on transmission and distribution lines; changing local boards of review or equalization to boards of appeal and equalization and eliminating certain county informational meeting requirements relating to the valuation of noncommercial seasonal residential recreational property; requiring the commissioner to prescribe the factors and methodology for use by county auditors for conversion of net tax capacity rate levy limit; modifying the application of the state tax levy, providing for computation of the tax rate by the commissioner and requiring commissioner certification of the rate in lieu of the state auditor; modifying certain proposed property tax notice and hearing (truth in taxation) requirements; modifying certain rate computation and tax list preparation duties of county auditors; authorizing and providing for city imposition of local option public safety and transportation utility fees; modifying certain property tax statement content requirements; excluding the general education tax rate from the local tax rate for tax levy apportionment purposes; modifying certain tax-forfeited land conveyance authority of the commissioner and the apportionment of proceeds from sales or rentals of tax-forfeited land; modifying the property tax refund schedules for homeowners and renters and the inflation adjustment requirement; modifying certain tax increment pooling and computation provisions; modifying the metropolitan council transit tax levy limit; modifying the definitions of population and city revenue need and defining population sprawl factor, density factor, tax capacity and city aid base for local government aid purposes; modifying the LGA distribution formulas for towns and cities and the payment dates and providing or modifying certain appropriations; requiring and providing for commissioner grants for deficits in TIF districts caused by changes in property tax classification rates and the elimination of the state determined general education property tax levy; specifying certain phrase replacement instructions to the revisor of statutes; repealing the general education tax rate establishment requirement of the commissioner, the expiration of school district referendum levy authority, the definitions of gross and net tax capacity, the education homestead and agricultural credits, a certain tax rate increase provision, attached machinery aid, the reduction in state TIF aid, certain LGA definitions, a certain provision providing for additional money for city LGA, the definition of constant spending levy amount for proposed property tax notice purposes and certain tax forfeited land conveyance and reversion provisions ARTICLE 5 - SALES AND USE TAX REFORMEliminating the accelerated June sales tax payment liability of retailers; modifying or expanding certain definitions for sales and use tax imposition purposes, expanding the sales tax on services; reducing the general sales tax rate; providing certain sourcing rules for tax payment or collection obligation determination purposes; modifying or clarifying certain exemptions, providing a direct exemption for capital equipment and exempting interstate for-hire transportation vehicles, railroad rolling stock and sales to local government units from the tax; modifying the exemptions for sales by or to nonprofit groups and for flight equipment; providing an expiration date for the exemption for building materials, supplies and equipment; expanding the offset for taxes paid in other states; authorizing and providing for the commissioner of transportation (DOT) to act as an agent of the commissioner of revenue for collection of the sales tax on aircraft; exempting additions or modifications to make motor vehicles into ready mixed concrete vehicles from the sales tax on motor vehicles; providing a transitional provision for expansion of the sales tax on services; appropriating money to the commissioner of revenue for tax administration purposes; repealing certain exemptions from the sales tax ARTICLE 6 SPECIAL TAXES REFORM Modifying the mortgage registry and deed tax rates; changing the lawful gambling tax to a tax on bingo and modifying the combined receipts tax schedule; modifying certain insurance estimated tax payment requirements; repealing the alcoholic beverage bottle tax and certain provisions providing for insurance premium tax equivalent payments by automobile risk self insurers ARTICLE 7 PETROLEUM TAX REFORMModifying the imposition of the petroleum inspection fee; reducing the shrinkage allowance for gasoline tax reporting purposes; eliminating the credit for gasoline sold for storage in on farm bulk storage tanks; appropriating money to the commissioner of revenue for systems modifications associated with petroleum tax reform ARTICLE 8 MINERALS TAX REFORMSpecifying the occupation rate as a percentage of taxable income; modifying the gross income apportionment factor; eliminating certain depreciation deduction provisions; specifying the taconite tax rate for concentrates produced in 2001; providing for the distribution of taconite tax proceeds to school districts by the commissioner of children, families and learning; increasing the allocation to counties, reducing a certain allocation to St. Louis county for property tax relief purposes; modifying a certain provision providing for distribution of the remainder of taconite tax proceeds, defining distributions and payments for clarification purposes ARTICLE 9 - MINNESOTACARE TAX REFORMEstablishing a reserve within the health care access fund to preserve access to publicly funded basic health care services; reducing the gross earnings tax on hospitals, surgical centers and health care providers and exempting wholesale drug distributors and pharmacies from the tax; requiring a certain percentage of taxes on cigarettes to be credited to the health care access fund; permanently exempting health maintenance organizations (HMO), nonprofit health service plan corporations and community integrated service networks (CISN) from the insurance gross premium tax; repealing the health care access fund federal contingency reserve ARTICLE 10 - MOTOR VEHICLE REGISTRATION TAX REFORMReducing the initial motor vehicle registration tax on passenger automobiles to a flat rate after a certain date; gradually increasing the percentage of motor vehicle sales tax proceeds required to be deposited in the highway user tax distribution fund and eliminating a certain future appropriation from the general fund to the highway user tax distribution fund ARTICLE 11 TAX POLICY PROVISIONSRequiring a proof of sales tax payment certificate for initial registration of all-terrain vehicles (ATV), exception; authorizing and providing for the commissioner of revenue to enter into agreements with governing bodies of federally recognized Indian reservations relating to refund or sharing of fees imposed on reservation activities and to publish names of certain delinquent taxpayers; modifying the time limit for levy and sale of property for failure to pay taxes; expanding a certain provision providing for the posting of lists of delinquent taxpayers; modifying certain provisions providing for refund of mortgage registry and deed tax overpayments; modifying the administration of the political contribution refund relating to Internet claims; extending the effectiveness of notices by the commissioner to employers for the withholding of delinquent taxes from employee compensation; defining gross rent for residents of nursing homes, intermediate care facilities for persons with mental retardation (ICF MR) or adult foster care homes for property tax refund purposes, requiring and providing for annual inflation adjustments; expanding the authority of the commissioner to apply property tax refunds to delinquent tax liability; excluding adult day care centers from the definition of health care provider for MinnesotaCare health care provider gross earnings tax payment purposes; expanding the definition of storage for sales and use tax imposition purposes; authorizing the commissioner to cancel sales tax permits issued in error after revocation, specifying certain notice requirements; authorizing the revocation of sales and use tax permits for nonconformance with cigarette and tobacco products tax requirements; clarifying the exemption from the motor vehicle sales tax for nonresidents and excepting public schools, universities or libraries from the exemption for charitable, religious or educational organizations; imposing a use tax on mixed municipal solid waste management services received by residential and commercial generators and self haulers and on the volume of certain nonmixed municipal solid waste; requiring notice to the commissioner by municipal tobacco licensing authorities of certain license issuance information (ra, mk, je)