E Relating to financing and operation of state and local government ARTICLE 1 � INCOME TAXUpdating the definition of internal revenue code under tax +administration and compliance provisions and certain income tax provisions to the IRC; +exempting certain armed forces personnel on active duty outside the state from +filing state income tax returns and extending the time limit for filing +returns and appealing tax court orders affecting state income or property taxes +for armed service members; eliminating military personnel in active service +outside the state from the definition of nonresident; conforming certain income +and estate tax provisions to the federal military family tax relief act of 2003;+ requiring certain add backs to income relating to excess mortgage interest and +the payment of fines, penalties, damages and expenses paid to government +entities; providing income tax subtractions for certain military compensation +and organ donation expenses; disallowing trade or business expense income tax +deductions for fines, penalties, damages or expenses paid to government +entities; exempting from the franchise tax corporate income derived from +personal rapid transit systems; increasing the income tax rate for the highest +income bracket; converting the transit pass income tax credit to a refund and +defining employer for refund eligibility purposes; providing income tax credits for +investments in qualifying regional angel investment network funds and for certain carsharing expenses; modifying the education tax credit; increasing +the charitable deduction from the alternative minimum tax and the amount +of income exempt from AMT for certain married and single filers; providing a +single sales income apportionment formula under the franchise tax for corporations+ and financial institutions; clarifying the sales factor for sales +originating in the state and shipped for delivery to purchasers outside the state; +exempting publicly traded partnerships from certain income tax withholding +requirements for nonresident partners; reducing the percentage of rent +constituting property taxes for property tax refund purposes, defining total scheduled rent+ for refund calculation purposes and requiring certificates of rent paid +to show the calculation of rent constituting property taxes under certain excess conditions; appropriating the tax revenues collected between certain +years attributable to the change in the amount of mortgage interest allowed+ to be deducted for income tax purposes to the department of human services +and to the housing finance agency (HFA) to be used for certain programs; +requiring the commissioners of finance and revenue to conduct a study to identify +the reasons for the decline in corporate tax receipts and report to the +legislature by a certain dateARTICLE 2 � SALES TAXProviding sales tax exemptions for geothermal heating and cooling +system equipment, biomass fuel stoves, commuter rail systems fuel and +construction materials and equipment, inputs to movie and television production, +personal rapid transit system, waste recovery facility and St. Mary's Duluth +clinic health system hospital construction materials and equipment and +certain donated meals and occasional sales; clarifying the exclusion of +telecommunications equipment from the capital equipment sales tax exemption; expanding +the sales tax exemption for regional public safety radio communication systems +to statewide systems; exempting certain fuel efficient vehicles sold to +the state or local government units from the motor vehicle sales tax; +authorizing the city of St. Cloud to increase local sales and lodging taxes upon +voter approval, the city of Mankato to issue bonds for Riverfront 2000 and +the city of Hermantown to impose a use tax and issue bonds for certain capital improvements; authorizing the city of Rochester to use local sales +tax proceeds and increasing the city bonding authority to construct a regional +highway and higher education facilities; authorizing the city of Proctor to +impose an additional sales tax to fund certain capital improvements; extending +the effective date for the sales tax exemption for construction of +poultry litter and other biomass electric generation facilities; making permanent +the additional sales tax rate on alcoholic beverages and rental cars; +clarifying the exemption of the Thief River Falls nonprofit corporation from the+ sales tax on construction of the community or regional center; authorizing the +imposition of local sales taxes and the issuance of bonds by the cities of +Beaver Bay, Bemidji, Cloquet, Clearwater, Medford, Park Rapids, St. Cloud, +Sartell, Sauk Rapids, St. Augusta, St. Joseph, Waite Park, Waseca and Winona for +certain projects; authorizing the city of Proctor to use certain lodging tax +receipts for preservation of the caboose, the Baldwin locomotive and the +F-101F aircraft; requiring the commissioner of revenue to reduce the +compliance gap in the payment of sales and use taxes and to establish an effective +method for payment of the tax after purchase; providing for the distribution of +certain alcoholic beverage sales tax receipts to counties for property tax +reduction ARTICLE 3 � PROPERTY TAXES Simplifying and clarifying school district referendum ballot +questions, specifying certain notice requirements; providing for property tax +valuation and classification of wind energy conversion system land; extending +the construction date requirement for poultry litter biomass electric +generation facilities for personal property tax exemption purposes; modifying +certain requirements for the exemption of personal property of certain +combined cycle combustion turbine electric generation facilities from the personal +property tax and providing exemptions for certain simple cycle combustion +turbine and biomass facilities and for facilities exceeding a certain installed +capacity; exempting personal rapid transit systems from property taxes under +certain conditions; accelerating the due date for annual wind energy +production system production reports and for notice by the commissioner of revenue to +system owners of the tax due and requiring the distribution of tax revenues +to be based on the net tax capacity based tax rate of the previous rather +than the current year; making the limited market value provision permanent and subjecting certain resort and commercial industrial property to +limited market value, modifying the calculation of limited market value of the +property in the first assessment year; providing property tax valuation exclusions +for sewage treatment system improvements and for lead hazard reduction; +establishing an aggregate resource preservation property tax program imposing the +property tax on certain qualifying properties containing aggregate resources based+ on current use in lieu of potential alternative or future use and a +valuation and tax deferment program for certain temporary and seasonal homestead +resorts; qualifying real estate devoted to polo for the open space valuation +and deferment program; providing for homestead treatment of licensed +child care property located in family homes, duplexes or triplexes assessed as +homesteads; reducing the property tax classification rate for certain qualifying +low income rental housing; providing a reduced market value homestead credit +reimbursement for homestead property located in cities; specifying the effective +date for rules establishing the method of valuing electric and transmission +pipeline utility property; fixing the rate of the state property tax levy on +commercial industrial property, providing for inflationary increases in the levy+ on seasonal residential recreational property for deposit in the +education reserve account; authorizing separate statement of library levies on Ramsey +county proposed property tax (truth in taxation) notices and property tax +statements; modifying the basis for petitions involving qualified low income +rental housing property; temporarily delaying the due and penalty accrual dates for +payment of property taxes on certain resort property; imposing a school +referendum tax on the income tax liability of school district residents subject to +voter approval, providing for determination by the commissioner, for +referendum equalization and for distribution of the revenue; providing for +partial reimbursement of the cost of uncompensated care provided by +qualifying hospitals in the metropolitan area; providing for reimbursement of +Hennepin county public defender costs; modifying certain conditions for +deferment of property taxes and special assessments on the Caponi art park +property in the city of Eagan; authorizing the lakes area economic development +authority to levy a property tax as a special taxing district in lieu of +individual member levies; extending the date for St. Louis county certification of +local approval of the law creating the southern St. Louis county special taxing +district for the Chris Jensen nursing home; establishing an education reserve +account to supplement general education aid or higher education funding; +requiring the commissioner to study the application of the personal property tax +exemption for electric general system pollution control equipment for +limitation purposes and report to the legislature by a certain date; repealing a certain +provision potentially authorizing supplementary levy authority for school +districts for deferred maintenance and capital projects and providing education aid+ in certain fiscal years for certain specified uses; authorizing common +school district #815, Prinsburg to continue to operate as a common school +district under certain resolution adoption, statutory operating debt avoidance+ and levy referendum conditions; authorizing the Sauk River watershed district +to levy for the administrative fund; authorizing a local commercial +industrial land value tax by certain larger municipalities or by municipalities in +the taconite tax relief area; requiring and providing for legislative fiscal staff+ to conduct a study of the metropolitan revenue distribution (fiscal +disparities) program and report to the legislature by a certain date; authorizing +towns in Lincoln and Pipestone counties to adjust payable 2004 levies for +estimated wind energy production tax amounts; requiring studies and reports by state+ agency commissioners on the type, amount and use of fees imposed on +individuals or businesses and by the commissioner of education on the total annual +fees collected under the public school fee law ARTICLE 4 � AIDS TO LOCAL GOVERNMENTSModifying the city local government aid (LGA) calculation and +distribution formulas, eliminating taconite aids from computation of the formula, +increasing the appropriation for payment of the aid and clarifying the aid +reduction; separately defining federal land utilization project (LUP) land for +counties payment in lieu of taxes on natural resources land purposes and +providing for payments to counties by the commissioner of natural resources (DNR) +on the project landsARTICLE 5 � LOCAL DEVELOPMENTModifying certain provisions regulating business subsidies, +requiring the goals for the number of jobs to be created or retained to result in +job creation or retention by the subsidy recipient within the overall +granting jurisdiction, providing for certain enforcement actions; requiring +the commissioner of transportation (DOT) to transfer ownership of the +parking facilities for I-394 to the city of Minneapolis upon receipt of +payment from the city, specifying certain responsibilities of the city upon +assumption of ownership; authorizing and providing for housing and redevelopment +authorities to pledge the full faith and credit for bonds issued to finance +housing development projects owned by limited partnerships or other entities +of the HRA; modifying the definition of structurally substandard building +relating to buildings originally constructed for use as a school for tax +increment financing redevelopment district purposes; modifying certain +restrictions on TIF districts for urban renewal areas, defining urban renewal area; authorizing and providing for expenditure of tax increments for job +training for employees of businesses located in TIF districts; extending the +duration of pre-1979 TIF districts in certain larger cities under certain +conditions; authorizing and providing for TIF districts qualifying as housing +districts to contain mixed income occupancy projects, specifying certain +qualification requirements; authorizing development authorities to amend TIF plans +to establish affordable housing or hazardous substance, pollutant or +contaminant remediation accounts for increments pledging purposes; excluding +certain businesses engaged in retail sales from the definition of qualified +business for job opportunity building zone tax incentives eligibility +purposes; removing a certain duration limit on the Minneapolis Lake street project +redevelopment tax increment financing district; extending the duration of and +modifying certain requirements for the establishment of TIF districts in the +city of New Brighton; authorizing the Anoka county regional railroad authority to+ exercise economic development authority powers, projects local approval +requirement; authorizing and providing for the city of Detroit Lakes to create +redevelopment TIF districts, sunset; designating the cities of Elgin, Eyota, Byron +and Oronoco as small cities for TIF purposes; extending the duration of a+ certain TIF district in the city of Brooklyn Center; authorizing the city of +Fairmont to reduce the original tax capacity of a previously tax exempt parcel+ in a certain TIF district to the value of the land; increasing the holding period for economic development property tax +exemption purposes in the city of Fergus Falls; authorizing the city of +Minneapolis to elect in the establishment of a special service district to provide +for management of district activities by a nonprofit corporation; +authorizing and providing for the cities of Richfield and St. Michael to create +redevelopment TIF districts; authorizing the city of Wabasha to extend the duration+ of a certain redevelopment TIF district and to use the proceeds of tax +increment bonds issued before a certain date to pay the costs of acquiring and constructing a national eagle center; requiring the commissioners of +revenue and employment and economic development (DEED) to estimate the total +amount of tax expenditures obligated for all JOBZ projects approved before a +certain date, requiring annual audits by the office of the state auditor ARTICLE 6 � PUBLIC FINANCEModifying the authority of cities and counties to finance purchases +of computers and related items through the issuance of capital notes; +clarifying county financing of conservation easements; expanding the definition +of subsystems; authorizing the use of public safety radio communication system revenue bonds to provide +money for assistance to local government units for a certain percentage of the +cost of building subsystems in the southeast or central districts of the +state patrol, providing for issuance by the metropolitan council and appropriating +the proceeds to the commissioner of public safety for assistance to local government units, prohibiting use to finance portable or subscriber +audio sets and providing for payment of certain operating costs; extending the +authority of cities to establish special service districts and housing +improvement areas and the maximum maturity of bonds issued by housing and redevelopment authorities (HRA) for qualified housing development projects; +expanding the authority of municipal utilities to enter into joint ventures to +provide utility services to joint ventures with private investors; +authorizing cities to establish water submetering programs to detect water leaks and +monitor water usage, defining water submetering; authorizing loans and grants to +property owners to assist in the cost of water conservation and leak detection+ and the issuance of revenue obligations payable from fees and charges imposed+ for program costs and loan repayments to finance the programs; +authorizing the metropolitan council to issue certificates of indebtedness, bonds or +other obligations for metropolitan area transit and paratransit capital +expenditures under the regional transit master plan and transit capital +improvement program, limit; modifying the time for notice of the issue to the department +of finance for obligations issued as part of a series, the limit on city capital improvement bonds and the authority of cities, counties, towns and +school districts to finance street reconstruction; authorizing and providing+ for the city of St. Paul to participate in the creation of and contract with +a nonprofit organization for the management and operation of the +RiverCentre complex; authorizing and providing for the transfer of housing +finance agency (HFA) student loan bonding authority to the higher education services+ office (HESO) ARTICLE 7 � INTERNATIONAL ECONOMIC DEVELOPMENT ZONERequiring revisions of the state transportation plan to include a +chapter setting out a state aviation plan, specifying certain plan content requirements, requiring the commissioner of transportation (DOT) to +create temporary advisory councils on aviation planning to advise the +commissioner on the aviation chapter and revisions; providing for designation of +foreign trade zones as international economic development zones by federal foreign +trade zone authorities under certain conditions, providing certain property, +income, franchise and sales and use tax exemptions for businesses located and individuals operating a trade or business in the zones, creating a +jobs credit for qualified businesses and appropriating money to the commissioner +of revenue for the credit; requiring the commissioner of employment and economic development (DEED) to study and analyze the benefits to the state +from more than one international economic development zone and report to the +legislature by a certain date ARTICLE 8 � MISCELLANEOUSProviding for the delegation of authority by state agency +commissioners and for the effectiveness and continuation of authority delegations; +modifying, clarifying and recodifying certain provisions governing tax +preparers; specifying a minimum or uniform dollar requirement for electronic +payment of taxes and fees, exempting individual income, estate and airflight +property taxes from the requirement; requiring electronic filing of certain +partnership returns; requiring out of state cigarette retailers to register with +the department of revenue and specifying certain reporting requirements; +defining direct business for insurance gross premium tax purposes, clarifying +the taxation of property and casualty insurance companies and reducing +the gross premium tax rate for life insurance companies; providing for the +apportionment of occupation taxes; prohibiting employers from misrepresenting the +nature of the employment relationship with employees; regulating tobacco +product delivery sales; limiting biotechnology and health sciences industry zone tax +credits; requiring and providing for commissioner of employment and economic +development (DEED) temporary issuance of grants to eligible businesses in the +biotechnology and health sciences industry to support the startup and growth of +biotechnology and health sciences businesses and for metropolitan council +preparation of annual population estimates for reporting to governing bodies of +cities or towns in the metropolitan area; providing for the filling of judicial+ vacancies on the tax court; authorizing the commissioner of revenue to enter +into compact agreements with other states to eliminate retaliatory insurance +premium tax provisions; appropriating money to the commissioner for operation of +the department; repealing certain provisions providing for electronic +payment of certain taxes and the scope of tax preparation services ARTICLE 9 � DEPARTMENT OF REVENUE POLICY PROVISIONSAuthorizing case reviewers under the state debt collection procedure +to issue debtor assistance orders under certain unjust or inequitable results determination conditions and transferring duties and authority of +case reviewers to the taxpayer rights advocate; delegations of authority +granted by the commissioner of revenue to remain in effect until revoked by the commissioner or a successor; providing for notices of determinations +or actions by the commissioner not provided for by law; providing for +transcriptions of tax lien notices from counties to the secretary of state; including certification of 1b property (homesteads of the blind or disabled) in+ the definition of Minnesota tax laws for tax data classification and +disclosure purposes; specifying a time limit for request for calculation of +separate income tax liability after filing a joint return, exempting the +commissioner from the requirement to calculate separate liability under certain +conditions; providing for the calculation of interest on sales tax refund claims +for qualifying purchases by businesses in biotechnology and border city +zones; expanding the research and development franchise tax subtraction; +modifying the withholding requirement for payments to out of state contractors; +authorizing the commissioner to allow early withdrawal from the sustainable +forest incentive act without penalty upon land acquisition by the state, +local government units or other entities with the right of eminent domain; +clarifying the definition of qualified business for job opportunity building +(JOBZ) and biotechnology and health sciences industry zones purposes; exempting biotechnology and health sciences industry zone qualified businesses +from the corporate franchise tax minimum fee requirement under certain +conditions; repealing the alternative levy power of the Alexandria Lakes area and+ Central lakes region sanitary sewer districts ARTICLE 10 � MINERALS; AGGREGATESubjecting property used in mining or refining nonferrous ores to the+ net proceeds tax and exempting associated property from property and +sales taxes and mining corporations from the franchise tax, excluding the mining +activities from the trade or business income apportionment formula; defining the+ precious minerals tax relief area; expanding the occupation tax to persons +engaged in the business of refining ores and of mining or producing metals or +minerals; distinguishing between sales inside and outside the state for income apportionment purposes; exempting taconite and iron mining companies +from the alternative minimum tax; increasing the net proceeds tax rate and +providing for deductions; modifying the definition of metal or mineral products +under the gross proceeds tax; providing for the distribution of proceeds of the+ tax on nonferrous minerals within the precious minerals assistance area; +imposing a royalty tax on royalties paid for nonferrous minerals; modifying the +purpose of the taconite environmental protection fund; suspending the averaging +provision for computation of the taconite production tax and temporarily +exempting commercial production of direct reduced ore from the tax; modifying +the payment schedule for the taconite production tax; changing the taconite +economic development fund to the mineral processing and energy development +assistance fund for continuation purposes; providing for certain additional +distributions to the taconite environmental protection fund; establishing a grant +and loan fund, providing for distribution and specifying certain approval +requirements; establishing the mineral processing and energy development assistance+ fund for use by the commissioner of iron range resources and rehabilitation +(IRRRB) for grants, loans or equity investments in mineral processing and energy +generating facilities; excluding certain persons from the definition of operator+ for aggregate material removal tax purposes and authorizing counties or +towns to exempt operators from the tax under certain conditions; providing a transitional provision for certain persons with an alternative +minimum tax credit; repealing the AMT on ores, certain deductions from the +occupation tax and the taconite economic development fund, requiring the +commissioner of iron range resources and rehabilitation to transfer unobligated balances +to the mineral processing and energy development assistance fund ARTICLE 11 � SALES AND USE TAXES DEPARTMENT OF REVENUE TECHNICAL +CHANGESApplying the period for assessing additional taxes for underpayment +of sales and withholding taxes to use taxes; clarifying the definition of bad+ debt; eliminating the exclusion of watercraft, aircraft, modular homes, +manufactured or mobile homes from the sourcing rules and modifying the definition +of transportation equipment for sourcing purposes; clarifying the +definition of industrial production relating to qualifying for the materials sales +tax exemption and excluding machinery and equipment used by restaurants +in furnishing, preparing or serving prepared foods or used to furnish +certain services from qualification for the capital equipment exemption; +applying the transition period for preexisting construction contracts and bids to +tax rate increases in addition to sales tax base changes; repealing certain +obsolete or duplicative sales and use tax rules ARTICLE 12 � SPECIAL TAXES DEPARTMENT OF REVENUE TECHNICAL CHANGESExempting mortgages on armories from the mortgage registry tax; +excluding housing with services establishments from the definition of health +care provider for MinnesotaCare gross earnings tax imposition purposes; +granting the commissioner of revenue certain petroleum tax penalty abatement +authority; clarifying the reporting requirement for cigarette manufacturers +involved in interstate commerce and the due dates of returns for cigarette and +tobacco products distributors subject to accelerated tax liability; defining reinsurance for insurance gross premium tax administration purposes +and clarifying the taxation of health maintenance organizations (HMO), +nonprofit health service plan corporations and community integrated service +networks (CISN); repealing a certain duplicative lawful gambling tax payments +crediting requirement ARTICLE 13 � PROPERTY TAXES AND AIDS DEPARTMENT OF REVENUE TECHNICAL +PROVISIONSClarifying the requirement for the payment of personal property taxes+ on manufactured homes for title transfer purposes; expanding the +authority of the commissioner of revenue to disclose certain information for property +tax residential homestead classification purposes; clarifying the +property tax exemptions for property used under cooperative farming agreements, +for certain housing and redevelopment authority (HRA) property, for property +subject to taconite production or net proceeds taxes and for property of +religious corporations and children's homes; clarifying the exclusion of +government rent assistance and contract payments from donations or gifts for public +charity institutions property tax exemption purposes; clarifying the +provision requiring limited liability companies to operate family farms to +receive an agricultural homestead classification; modifying certain proof of +compliance requirements to the county assessor and eliminating certain obsolete +language relating to meetings of county boards of equalization; modifying the +date for county auditors to certify levy and tax rate information to other +county auditors relating to taxing jurisdictions crossing county boundaries +for proposed property tax (truth in taxation) notice purposes; +eliminating the requirement for reduction of levies by disparity reduction aid; +granting the commissioner the option of excluding detailed special levy +information from levy information required to be annually reported by county auditors;+ modifying the date for county treasurers to transmit the state share of +property tax receipts to the department; clarifying certain tax-forfeited land provisions relating to +prohibited purchasers and duties of the commissioners of finance, natural +resources (DNR) and revenue; clarifying certain appropriations for local impact note +and public defender costs; excluding attached machinery aid from the levy plus +aid revenue base for 2004 county aid reductions computation purposes; repealing +certain provisions relating to a limited property tax exemption for certain hydroelectric facilities on government owned sites and certain +obsolete provisionsARTICLE 14 � MISCELLANEOUS DEPARTMENT OF REVENUE TECHNICAL CHANGESSpecifying the date of property assessment in taxpayer signed consent+ agreement cases; requiring the commissioner of revenue to provide estate tax +filing extensions upon request; providing for sufficiency of order of +assessment notices sent by electronic mail; applying the penalty for false or +fraudulent tax returns to persons failing to file with intent to evade or defeat+ a tax or tax payments; clarifying the addition to federal taxable income and +the credit for income taxes paid to other states or provinces; clarifying the +curriculum areas for income tax education credit purposes; providing for +consistency of the personal liability standard for withholding taxes with the +general standard of personal liability for trust taxes; clarifying the requirement for+ removal from the sustainable forest program for failure to return the annual certification and providing for the effectiveness of covenants under +the program; eliminating certain obsolete language relating to revocation+ of distributor licenses under the unfair cigarette sales act; applying +the penalties for corporate franchise tax violations to metropolitan +solid waste landfill fee payment requirements; repealing certain rules relating +to the estimated tax either replaced with or repealed by statutory language (ra, je, mk, ja)