Relating to the financing and operation of state and local government

ARTICLE 1 - INCOME AND FRANCHISE TAXES

Providing for income tax credits for bovine tuberculosis testing expenses and military service under certain conditions; increasing the alternative minimum tax (AMT) exemption; modifying the scope of allocation rules

ARTICLE 2 - FEDERAL UPDATE

Updating and conforming certain provisions to federal law

ARTICLE 3 - SALES AND USE TAXES

Making permissive commissioner of revenue authority to revoke sales tax permits to certain taxpayers; exempting materials and supplies used in the construction of certain hydroelectric generating facilities from the sales tax; expanding the authority of the city of Hermantown to impose a local sales tax to a local use tax and expanding required uses of the proceeds; modifying the expiration date for the Crown Hydro electric generating facility; clarifying the authority of the city of Albert Lea to transfer local sales tax revenue to the Shell Rock river watershed board; allowing the city of Winona to use sales and use taxes for flood control projects; modifying the date for the local sales tax referendum in Worthington; authorizing the cities of Austin, Baxter, Brainerd and Owatonna to by ordnance and with voter approval to impose a sales and use tax and to issue bonds for certain purposes, providing for termination of the taxes

ARTICLE 4 - PROPERTY TAXES

Modifying the property tax abatement process for certain electric generating facilities; authorizing school boards by referendum to annually increase the operating revenue by the rate of inflation; increasing emergency medical services special taxing districts levy authority; extending the exemption from the property tax personal property of certain biomass generation facilities; extending the eligibility period for biomass electrical generation facility construction commencement and for electric generation facility construction commencement for property tax exemption purposes; extending the exemption from the property tax personal property of certain small biomass generation facilities; modifying the exemption from the property tax personal property of a certain innovative energy project electric generation facility, modifying certain facility qualification requirements, requiring local government approval and owner payment; authorizing a personal property tax exemption for certain attached machinery part of run of river hydroelectric generation facility; expanding the definition of wind energy conversion system to include substations owned by wind energy conversion facilities for taxation purposes; indexing the property tax brackets for agricultural homestead property based on first tier valuation limits; modifying the homestead property tax treatment for members of the armed forces to members absent due to active duty; removing the sunset provision for emergency medical services special taxing districts; prohibiting the commissioner of revenue from disallowing a property tax refund claim for failure to include the cash value of a postsecondary education institution tuition discount, requiring refunds; authorizing an increase in the property tax levy by the Buffalo-Red River watershed district; authorizing the Cook-Orr hospital district to enter agreements with the Bois Forte Band tribal council to permit Bois Forte Band reservation lands at Nett Lake and Lake Vermillion to be included in the hospital district territory; extending the date for independent school district (ISD) 535, Rochester, to certify the proposed property tax levy to the county auditor; authorizing independent school districts #750, Rocori and #656, Faribault to lease administrative space under certain conditions

ARTICLE 5 - DEPARTMENT OF REVENUE PROPERTY TAXES AND AIDS

Making certain technical, policy and clarifying changes; clarifying certain provisions relating to the residential homestead market value credit and the agricultural homestead market value credit; modifying disparity reduction aid; clarifying commissioner of revenue responsibilities for local government aid calculations and payments, specifying conditions for changes in boundaries, form of government and annexation

ARTICLE 6 - DEPARTMENT OF REVENUE SALES AND USE TAXES

Making certain technical corrections relating to sales and purchase, farm machinery, computer, electronic and computer software definitions; defining logging equipment; clarifying tangible personal property sales tax provisions; eliminating the sales tax on prepared food, candy and soft drinks under certain conditions; limiting the total amount of aerial camera package exemption refunded to all taxpayers for all fiscal years; extending the sales tax exemption for sales of certain goods and services to the removal of trees, bushes or shrubs for the construction and maintenance of roads, trails, and firebreaks; modifying the content and form of the sales tax exemption certificate; including equipment and materials used for the generation, transmission and distribution of electrical energy and aerial camera packages and tangible personal property and taxable services and construction materials, supplies and equipment under sales tax exemption refund provisions; prohibiting the transfer of motor vehicle lease credits to others; modifying a certain effective date relating to land clearing contracts; repealing provisions relating to business exemptions and certain rules

ARTICLE 7 - DEPARTMENT OF REVENUE SPECIAL TAXES AND FEES

Authorizing and providing for dry cleaner registration fees to be paid in installments; establishing the deed tax for real property transfers to builders or contractors to obtain financing under certain conditions; modifying the definition of health care provider, eliminating residential care homes and adding housing with services; adding wholesale drug distributor to the list prohibited from separately listing state tax liabilities; defining weighted average retail price for cigarette and tobacco tax purposes; modifying the definition of distilled spirits and defining flavored malt beverage for liquor tax purposes

ARTICLE 8 - DEPARTMENT OF REVENUE MISCELLANEOUS

Modifying the definition of electronic means to include the use of a touch tone telephone to transmit return information in a manner prescribed by the
commissioner of revenue; modifying commissioner assessment procedures; clarifying the authority of the commissioner to assess liability against successor businesses; exempting certain property from commissioner authority to collect assessments; clarifying provisions relating to tax court orders, providing for interest from date of accrual; clarifying extended due date provisions relating to reportable transactions for tax shelters

ARTICLE 9 - PUBLIC FINANCE

Modifying terms and conditions related to the sale of definitive drainage bonds; conforming the maturity date for bonds issued for rural public water or sewer systems to the maturity date for bonds issued for municipal water and wastewater treatment systems; modifying municipal bonds limitations on amounts; modifying the definition of market value for net debt limit determinations; modifying the definition of debt obligation; providing for the authorization of interfund loans; modifying the higher education services office (HESO) exemption from the 120-day issuance and carryforward requirements for student loan bonds; renaming the Carver county housing and redevelopment authority the Carver county community development agency; authorizing the city of Ramsey to issue bonds for a town center addition; modifying office of higher education bond allocations temporary priority from the unified pool; specifying certain unified pool allocation award temporary priority requirements and unified pool total allocations

ARTICLE 10 - TAX INCREMENT FINANCING

Relating to taxation; modifying certain tax increment financing (TIF) provisions; modifying provisions relating to fiscal and economic implications of the proposed tax increment financing district; removing the authority option to increase or decrease the amount of interest on the debt to be capitalized; removing the requirement for TIF districts to supply annual statement copies to school boards; clarifying TIF district duration provisions; clarifying expenditures outside the TIF district; defining public infrastructure expenditures treatment for existing districts within biotechnology and health sciences industry zones; clarifying use of revenues for TIF decertification; allowing municipalities to transfer increments without regard to district plan authorization; changing the due date for authority disclosures or reports to the state auditor; clarifying the election exception for tax increment obligations; extending the duration of a certain tax increment financing district; repealing the distribution of certain Burnsville tax increments; authorizing and providing for the city of Detroit Lakes to create a redevelopment tax increment financing (TIF) district subject to certain special rules, sunset provision; authorizing the city of Minneapolis to establish a homeless assistance tax increment finance district, specifying qualifications; authorizing the city of Faribault to extend the tax increment financing district (TIF); extending the duration of an economic development tax increment financing (TIF) district in the city of Brooklyn Park, allowing the city to establish housing districts, limit; repealing the distribution of certain Burnsville tax increments

ARTICLE 11 - AIDS AND CREDITS

Increasing the local government aid (LGA) city aid base for 2007 and the city aid distribution minimum and maximum amount under certain conditions; appropriating money to the commissioner of revenue to make payments to Mahnomen county and the city of Mahnomen to compensate for the loss of property tax revenue due to the placement of land in trust status; requiring the department of revenue to reduce the referendum market value and the adjusted net tax capacity for taxable year 2005 for taxes payable in 2007 for independent school district #432, Mahnomen, requiring county auditor certification

ARTICLE 12 - MINERALS

Defining producer; modifying the occupation tax; requiring the gross income for each mineral, metal or energy resource to be determined separately; requiring the allowable deductions for each mineral, metal or energy resource to be determined separately; requiring producer repayment to the taconite development fund under certain conditions; increasing the mineral taxes amount distributed to the range association of municipalities and schools; modifying distribution of grant and loan fund, requiring a certain amount to be paid to St. Louis county for deposit in the county road and bridge fund for the relocation of St. Louis county road #715 (Pike River road); establishing a public works and local economic development fund for certain specified purposes; authorizing the town of Sylvan in Cass county to impose an aggregate material (gravel) removal tax under certain conditions; requiring the iron range resources and rehabilitation (IRRRB) commissioner to issue revenue bonds; authorizing each person with an alternative minimum tax credit to take the credit against the occupation tax; repealing the alternative minimum tax

ARTICLE 13 - MISCELLANEOUS

Delaying the final designation of the international economic development zone; delaying the beginning of the zone duration; changing sales and use, cigarettes and tobacco, and liquor tax remittance and estimated tax remittance requirements for certain vendors; authorizing cities, counties, towns and other political subdivisions to apply for foreign trade zone powers; extending the duration limit for job opportunity building zones for ethanol plants under certain conditions; requiring foreign trade zone authorities prior to zone designation to conduct a transportation impact study, requiring report submission to the legislature; requiring international economic development zone business plan findings to be submitted to the legislature; modifying the jobs credit; increasing the bonding authority of the metropolitan council to issue certificates of indebtedness, bonds or other obligations for metropolitan area transit and paratransit capital expenditures, limit; defining tax and fee for statutory interpretation purposes; transferring any money in the tax relief account to the general fund
(Ch. 259, 2006)