Relating to the financing and operation of state and local government

ARTICLE 1 - PROPERTY TAXES

Exempting manufactured homes intended to be destroyed upon transfer to the park owner from the requirement for a statement of property taxes paid for title issuance purposes; requiring commissioner of transportation (DOT) notice to county auditors of property acquisitions; providing for the determination of the qualification of rental housing property for the property tax exemption for institutions of public charity and for the valuation of land containing wind energy conversion systems; modifying the exemption for property subject to the taconite production or net proceeds tax; exempting personal property of certain biomass electric generation facilities from the property tax; specifying certain
seminar attendance and participation requirements of licensed assessors;
extending the phase out of the limited market value provision; providing market value reductions for homestead property damaged by mold and for certain property with lead hazard contamination; expanding private outdoor recreational open space property tax treatment to property devoted to polo; extending homestead treatment to portions of residential or agricultural homesteads used to provide licensed child care; modifying a certain criterion for the valuation of manufactured homes at the appropriate property classification rate in lieu of
valuation as a property improvement; providing for the certification of low
income rental property for classification purposes and providing a separate classification for the property; modifying the classification of seasonal residential recreational property (homestead resorts), providing for tiers; authorizing and providing for cities to establish programs to encourage redevelopment of vacant commercial industrial properties; clarifying a certain restriction on market value adjustments or classification changes by appeal and equalization boards; modifying the state general tax levy relating to seasonal residential recreational tax capacity; delaying the annual deadline for county auditor certification of proposed levies and tax rates in overlapping jurisdictions; authorizing separate statement of library levies on Ramsey county proposed property tax notices and property tax statements; authorizing counties,
cities or school districts to include supplemental information with proposed property tax statements relating to the impact of state aid increases or decreases on property tax increases or decreases and on the level of services provided; authorizing Aitkin county, the city of Aitkin and independent school district #1, Aitkin and Nobles county, the city of Worthington and independent school district #518, Worthington to hold joint initial truth in taxation hearings; authorizing special levies to pay for the maintenance and support of city or county societies for the prevention of cruelty to animals (animal humane societies); requiring separate listing of regional rail authority levies in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott or Washington counties; delaying the change in the production tax rate on iron ore concentrates; clarifying the limit on housing and redevelopment authority (HRA) special taxes; excluding
major or intermediate airport lands from metropolitan revenue distribution
(fiscal disparities) requirements and delaying the adjustment in the
contribution by the city of Bloomington; providing for separate payments to counties in lieu of taxes on natural resources lands for land utilization
project land; increasing the limit on special levies by certain cities and towns in Itasca county for the Lakeview cemetery association; requiring commissioner of revenue reports to the legislature by certain dates analyzing existing property tax assessment and classification practices and providing recommendations for achieving higher quality and uniform practices; requiring the commissioner to develop a code of conduct and ethics for assessors to ensure public confidence in property assessment; authorizing the Dakota county regional railroad authority to develop, construct and operate a bus rapid transit (BRT) system in the Cedar avenue transitway corridor; requiring the department of revenue to inform assessors of the tax exemption changes relating to institutions of public charity for assisted living facilities assessment change purposes

ARTICLE 2 - PROPERTY TAX AIDS AND CREDITS

Increasing the city aid base for certain smaller cities for local government aid purposes; exempting the cities of Babbitt, Eveleth, Hibbing, Keewatin, Mountain Iron, Silver Bay and Virginia from the taconite aid LGA offset; increasing the appropriation limit for aids to cities; correcting the effective date for a certain county tax base equalization aid limit increase; extending certain city market value credit reimbursement reductions

ARTICLE 3 - INCOME AND FRANCHISE TAXES

Exempting certain members of the armed forces from filing a state income tax return; expanding the authority of nonresident partners to file composite returns to certain trusts or estates, authorizing a certain bonus depreciation subtraction; requiring the commissioner of revenue to provide information relating to local use taxes in the income tax instruction booklet; modifying the time for payment of withholding taxes by partnerships, S corporations and trusts on nonresident income; modifying the definition of foreign operating corporation and eliminating military personnel stationed outside the state from the definition of nonresident for income and franchise tax purposes; providing income tax subtractions for compensation paid to active duty members of the
national guard or reserves and for certain expenses relating to organ donation by living donors; providing for the consideration of the military pay subtractions as earned income assignable to the state for dependent care and working family credit apportionment purposes; removing certain limits on the education credit and modifying the phase out based on income; eliminating the adjusted gross income threshold for the charitable contributions subtraction under the alternative minimum tax (AMT); phasing in single sales factor net income apportionment for corporations and financial institutions; modifying the withholding requirement for payments to out of state contractors; requiring and
providing for apportionment of net income of persons subject to the occupation tax

ARTICLE 4 - FEDERAL UPDATE

Updating certain state income tax and property tax refund provisions to changes in the internal revenue code and in certain federal acts relating to military deductions, health savings accounts, the dependent care and marriage penalty credits, working families, business deductions, charitable contributions and disaster payments and updating the IRC definition for tax administration and compliance purposes

ARTICLE 5 - SALES AND USE TAXES

Prohibiting commissioner of administration, state agency or legislative goods or services contracts with foreign vendors failing to register to collect sales and use taxes on sales in the state, exemptions, requiring vendor submission of verification of registration to the agency or legislature; expanding the authority to file annual use tax returns; exempting from the sales tax tree, bush, shrub and stump removal under land clearing contracts, certain meals or drinks served to certain children attending child care or early childhood education programs, solor energy systems and cigarettes; providing for the sales tax treatment of certain motor vehicle leases; excluding from the definitions of industrial production and capital equipment the transportation, transmission or
distribution of petroleum, liquefied or natural gas, water or steam through
pipes, lines, tanks, mains or similar means for sales tax exemption purposes and clarifying the exemption for telecommunications equipment; expanding the exemptions for regionwide public safety radio communication systems to statewide systems and for university of Minnesota arts event tickets or admissions to events at state or private nonprofit colleges or universities; exempting from the tax materials and supplies used in the construction of certain hydroelectric generating and waste recovery facilities and of certain municipal electric utilities under joint powers agreements to satisfy the biomass energy mandate and materials and supplies used in the construction of the Chatfield wastewater treatment facility, requiring payment and later refund of sales taxes on municipal utility materials and supplies; imposing certain local government unit legal debt liability for certain refunds of sales taxes by the commissioner of revenue after tax termination; imposing a certain notice requirement on local government units imposing local sales and use taxes relating to liability for payment of the tax on purchases outside the local geographic limits; extending the authority of the city of Mankato to impose a local sales tax; authorizing the city of St. Paul in certain years to use a certain amount of local sales tax revenues to pay the principal of bonds issued for capital projects and increasing the frequency of the reporting requirement, authorizing the issuance
of bonds under certain conditions; expanding the authority of the city of
Rochester to impose and use the revenues from the local sales tax and increasing the bonding authority of the city, authorizing a city agreement with Olmsted county to finance certain roadway infrastructure improvements; extending the sales tax exemption for materials and supplies used in the construction of certain poultry litter or biomass facilities; eliminating the repeal of the rental motor vehicle tax; permanently exempting prepared meat and seafood from
the sales tax; authorizing certain St. Cloud area cities to impose local sales taxes based on a previous referendum, providing for use of the revenues and granting the city of St. Cloud certain bonding authority; authorizing the imposition of local sales taxes by the cities of Albert Lea, Bemidji, Willmar, Winona and Worthington and lodging taxes by Hubbard county and the city of Proctor, bonding authority

ARTICLE 6 - SPECIAL TAXES

Clarifying the determination of the deed tax relating to payment for conveyances with other than money, consideration for the conveyance to be a rebuttable presumption of equality to the fair market value; defining designated transfer and updating the definition of reorganization for deed tax purposes and modifying determination of the tax in certain conversion or transfer cases; defining blood components for MinnesotaCare (hospitals and health facilities) gross earnings tax purposes, excluding blood and blood components from the definition of legend drugs; and exempting purchases of prescription drugs for personal use from the tax; exempting certain health benefit payments from the tax and imposing the tax on enrollee deductibles, coinsurance and copayments; imposing a gross receipts tax on liquor to replace the sales tax; exempting
aviation gasoline or jet fuel purchased by ambulances services from the gasoline and special fuels taxes; regulating out of state tobacco delivery sales; modifying the crediting of cigarettes tax revenues to the academic health center special revenue fund and the medical education and research costs account; imposing a wholesale and floor stocks taxes on cigarettes to replace the sales tax; specifically defining direct business for insurance premium tax purposes as stop loss insurance purchased in connection with self insurance plans, exclusions, and clarifying the definition of reinsurance; reducing the premium tax on life insurance

ARTICLE 7 - ECONOMIC DEVELOPMENT

Modifying certain provisions regulating business subsidies, expanding the job goal to job creation or retention by the subsidy recipient within the granting jurisdiction, expanding the content requirement for notices of public meetings on business subsidy agreements relating to the filing of complaints, requiring web site availability of business subsidy reports and authorizing actions for equitable relief relating to failure to comply with business subsidy requirements; tightening the requirements for the property tax exemption for businesses located in job opportunity building zones; qualifying certain aerial surveying aircraft and camera packages and certain equipment used in the zones and certain materials and equipment used outside the zone by qualified electrical cooperatives in Meeker county for the sales tax exemption and providing for the computation of interest on sales tax refunds; authorizing larger county economic development authority boards; providing additional border
city enterprise or development zone tax reduction allocations; disqualifying public utilities for JOBZ tax benefits; qualifying estates and trusts for JOBZ individual income tax exemptions and limiting the rental income exemption to property rented by qualified businesses; requiring apportionment of the business income franchise or alternative minimum tax (AMT) exemption to be based on the relocation payroll percentage, defining relocation payroll percentage; exempting qualified businesses with all property and payroll located in the zone from the minimum fee; authorizing and providing for the city of Ramsey to create a housing tax increment financing (TIF) district; appropriating money to the rural
finance authority (RFA) and authorizing the issuance of state bonds for certain loans to farmers; requiring the commissioner of revenue with the assistance of the commissioner of employment and economic development (DEED) to estimate the total amount of tax expenditures obligated for JOBZ projects approved before a certain date, requiring a report to the legislature under certain expenditure excess conditions and specifying certain JOBZ and business subsidy agreement state auditor audit requirements; repealing the property tax exemption for biotechnology and health sciences industry zone property and local government JOBZ aid

ARTICLE 8 - TAX SHELTERS

Imposing special rules and certain registration requirements on tax shelters; extending the statute of limitations relating to and imposing additional civil penalties for failure to comply with reportable transactions requirements; expanding the provision providing civil penalties for corporate substantial understatement of liability relating to tax shelters; imposing civil penalties for false or fraudulent statements and for aiding and abetting understating of tax liability and granting the commissioner of revenue certain equitable relief actions authority; requiring and providing for the commissioner to establish and administer a voluntary compliance initiative for certain eligible taxpayers

ARTICLE 9 - DEPARTMENT OF REVENUE ELECTRONIC PAYMENTS

Modifying the threshold for electronic payment of withholding, sales and use, corporate estimated and gross earnings taxes

ARTICLE 10 - INTERNATIONAL ECONOMIC DEVELOPMENT ZONE

Providing for designation of foreign trade zones as international economic
development zones by certain foreign trade zone authorities under certain
conditions, specifying certain size restrictions, certain consideration
requirements for designation and certain powers of the authorities including establishment of port authorities, requiring and providing for creation of regional distribution center development plans and preparation of a business plan; specifying a deadline for final zone designation and a duration limit; providing certain property, income, franchise, and sales and use tax exemptions for businesses located and individuals operating or investing in 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 and providing for repayment of certain tax incentives upon ceasing operation in the zones, authorizing commissioner waiver of the repayment requirements under
certain conditions; specifying certain reporting requirements; appropriating money to the commissioner of employment and economic development (DEED) for grants to qualified businesses as an incentive to locate in the zones

ARTICLE 11 - MISCELLANEOUS

Requiring commissioner of revenue delegations of authority to remain in effect until revocation by the commissioner or a successor commissioner; failure to receive property tax statements not to affect, modify or alter statutory time limits for determination or collection of taxes; specifying certain nongame wildlife checkoff information responsibilities of tax preparers; imposing a civil penalty for failure to file returns with intent to evade or defeat a tax or payment; clarifying the requirement for the treatment of certain trusts as revocable in determining qualification for public health care programs; requiring state agency commissioners and cities imposing fees on individuals or
businesses to report to the commissioner of revenue by certain dates on the fees; requiring a commissioner of finance transfer of a certain amount of money from the tax relief account to the general fund upon account closing; appropriating money to the commissioner of revenue for administration purposes and for grants to certain qualifying nonprofit organizations to coordinate, facilitate, encourage and aid in the provision of taxpayer assistance services, to the commissioner of veterans affairs for a grant to the Vinland Center and to the commissioner of employment and economic development (DEED) for grants to local government units for programs for businesses and property owners in Otter Tail county affected by certain high winds; specifying certain instructions to the revisor of statutes relating to the amendment or repeal of certain
previously enacted provisions; providing a retroactive effective date for
included appropriations, appropriations to supersede and replace funding
authorized by a certain order of the Ramsey county district court and certain temporary funding

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