HF 2268

2nd Unofficial Engrossment - 85th Legislature (2007 - 2008)

Posted on 12/15/2009 12:00 a.m.

1.1A bill for an act 1.2relating to the financing and operation of state and local government; making 1.3policy, technical, administrative, enforcement, collection, refund, and other 1.4changes to income, franchise, property, sales and use, motor vehicle sales, 1.5cigarette and tobacco products, insurance premiums, aggregate removal, 1.6mortgage, deed, and production taxes, and other taxes and tax-related provisions; 1.7providing for aids to local governments; increasing maximum property tax 1.8refunds; requiring withholding; providing and modifying income tax credits; 1.9modifying taxation of certain compensation paid to nonresidents; modifying 1.10taxation of foreign operating corporations; modifying sales tax exemptions; 1.11modifying and authorizing local government taxes; prohibiting new local 1.12sales taxes; authorizing and modifying levies, property valuation procedures, 1.13homestead provisions, property tax classes, class rates, and tax bases; changing 1.14and providing property tax exemptions; changing JOBZ, border city allocation, 1.15tax increment financing, and economic development powers and incentives; 1.16changing provisions relating to fiscal disparities, budget forecasts, local impact 1.17notes, securities filing fees, state debt collection procedures, revenue recapture, 1.18sustainable forest incentives programs, and tax-forfeited lands; extending a 1.19petrofund fee exemption; imposing a surcharge on certain hockey admissions; 1.20expanding the aggregate tax and distribution of the proceeds; changing 1.21distributions of production tax proceeds; providing for purchase of forest lands; 1.22providing for higher education grants in the taconite assistance area; providing 1.23terms and conditions related to the issuance of obligations and the financing of 1.24public improvements and services; extending the time for certain publications of 1.25notices; authorizing and validating trusts to pay certain public postemployment 1.26benefits; changing and imposing powers, duties, and requirements on certain 1.27local governments and authorities and state departments or agencies; authorizing 1.28local governments to provide certain development incentives; providing rules 1.29for operation of certain tax increment financing districts; establishing a task 1.30force on metrodome site redevelopment; requiring studies; authorizing release 1.31of certain data; transferring money to the budget reserve account; appropriating 1.32money; amending Minnesota Statutes 2006, sections 3.987, subdivision 1; 1.333.988, subdivision 3; 3.989, subdivisions 2, 3; 16A.103, subdivisions 1a, 1b, 2; 1.3416A.152, subdivisions 1b, 2; 16D.04, subdivisions 1, 2; 16D.11, subdivisions 1.352, 7; 62I.06, subdivision 6; 71A.04, subdivision 1; 80A.28, subdivision 1, as 1.36amended; 80A.65, subdivision 1, as amended; 97A.061, subdivision 2; 118A.03, 1.37subdivision 3; 123B.61; 126C.41, subdivision 2; 127A.48, subdivision 2; 268.19, 1.38subdivision 1; 270.071, subdivision 7; 270.072, subdivisions 2, 3, 6; 270.074, 1.39subdivision 3; 270.076, subdivision 1; 270.41, subdivisions 1, 2, 3, 5, by adding 2.1a subdivision; 270.44; 270.45; 270.46; 270.47; 270.48; 270.50; 270A.03, 2.2subdivisions 2, 5; 270A.10; 270B.15; 270C.03, subdivision 1; 270C.306; 2.3270C.34, subdivision 1; 270C.446, subdivision 2; 270C.56, subdivision 1; 2.4270C.63, subdivision 9; 272.02, subdivision 64, by adding subdivisions; 272.115, 2.5subdivision 1; 273.05, by adding a subdivision; 273.111, subdivisions 3, 6, by 2.6adding subdivisions; 273.117; 273.121; 273.123, subdivisions 2, 3, 7; 273.124, 2.7subdivisions 13, 14, by adding a subdivision; 273.125, subdivision 8; 273.128, 2.8subdivision 1; 273.13, subdivisions 22, 23, 24, 25, 33, by adding a subdivision; 2.9273.1398, subdivision 4; 273.33, subdivision 2; 273.37, subdivision 2; 273.371, 2.10subdivision 1; 274.01, subdivision 1; 274.13, subdivision 1; 275.025, subdivision 2.113; 275.065, subdivisions 3, 5a, by adding a subdivision; 275.066; 275.067; 2.12275.61, subdivision 1; 276.04, by adding a subdivision; 276A.01, subdivision 3; 2.13276A.04; 277.01, subdivision 2; 278.05, subdivision 6; 279.01, subdivision 1; 2.14279.37, subdivision 1a; 280.39; 287.22; 287.2205; 289A.08, subdivisions 11, 13; 2.15289A.09, subdivision 2; 289A.12, subdivisions 4, 14, by adding a subdivision; 2.16289A.18, subdivision 1; 289A.40, subdivision 2; 289A.56, by adding a 2.17subdivision; 289A.60, subdivisions 8, 12, 25, 27, by adding subdivisions; 2.18290.01, subdivisions 6b, 19a, 19b, as amended, 19c, 19d; 290.06, subdivision 2.1933, by adding a subdivision; 290.067, subdivision 2b; 290.0671, subdivision 2.207; 290.0677, subdivision 1; 290.091, subdivision 3; 290.0921, subdivision 3; 2.21290.10; 290.17, subdivision 2; 290.191, subdivision 8; 290.34, by adding a 2.22subdivision; 290.92, by adding a subdivision; 290A.03, subdivision 7; 290A.04, 2.23subdivision 2; 290B.03, subdivision 2; 290C.02, subdivision 3; 290C.04; 2.24290C.05; 290C.07; 290C.11; 291.215, subdivision 1; 295.52, subdivisions 4, 2.254a; 295.54, subdivision 2; 297A.61, subdivisions 3, 4, 7, 10, 24, by adding 2.26subdivisions; 297A.63, subdivision 1; 297A.665; 297A.668, by adding a 2.27subdivision; 297A.669, subdivisions 3, 13, 14, by adding subdivisions; 297A.67, 2.28subdivisions 7, 8, 9; 297A.68, subdivisions 11, 16, 35; 297A.69, subdivision 2.292; 297A.70, subdivisions 7, 8, by adding a subdivision; 297A.71, subdivision 2.3023; 297A.72; 297A.90, subdivision 2; 297A.99, subdivision 1; 297B.03; 2.31297B.035, subdivision 1; 297F.06, subdivision 4; 297F.21, subdivision 3; 2.32297F.25, by adding a subdivision; 297I.06, subdivisions 1, 2; 297I.15, by adding 2.33a subdivision; 297I.20, subdivision 2; 297I.40, subdivision 5; 298.22, by adding 2.34a subdivision; 298.2214, subdivision 2; 298.227; 298.24, subdivision 1; 298.25; 2.35298.28, subdivisions 3, 4, 5, 6, 9a, by adding a subdivision; 298.292, subdivision 2.362; 298.296, subdivision 2; 298.2961, subdivisions 4, 5; 298.75, subdivisions 1, 3, 2.377, by adding a subdivision; 331A.05, subdivision 2; 360.031; 365A.02; 365A.04; 2.38365A.08; 365A.095; 373.01, subdivision 3; 373.40, subdivision 4; 375B.09; 2.39383A.80, subdivision 4; 383A.81, subdivisions 1, 2; 383B.117, subdivision 2.402; 383B.77, subdivisions 1, 2; 383B.80, subdivision 4; 410.32; 412.301; 2.41424A.10, subdivision 3; 435.193; 453A.02, subdivision 3; 469.169, by adding a 2.42subdivision; 469.1734, subdivision 6; 469.174, subdivisions 10, 10a; 469.175, 2.43subdivisions 1, 3; 469.176, subdivisions 1, 2, 4l, 7; 469.1761, subdivision 2.441; 469.1763, subdivision 2; 469.177, subdivision 1; 469.178, subdivision 7; 2.45469.1791, subdivision 3; 469.312, by adding a subdivision; 469.3201; 473.39, 2.46by adding subdivisions; 475.51, subdivision 4; 475.52, subdivision 6; 475.53, 2.47subdivision 1; 475.58, subdivisions 1, 3b; 477A.011, subdivision 36; 477A.0124, 2.48subdivision 5; 477A.013, subdivisions 1, 8, 9; 477A.03; 477A.12, subdivision 1; 2.49477A.14, subdivision 1; Laws 1973, chapter 393, section 1, as amended; Laws 2.501980, chapter 511, section 1, subdivision 2, as amended; Laws 1987, chapter 2.51168, section 2; Laws 1988, chapter 645, section 3, as amended; Laws 1989, 2.52chapter 211, section 8, subdivision 4, as amended; Laws 1993, chapter 375, 2.53article 9, section 45, subdivisions 2, as amended, 3, as amended, 4, as amended; 2.54Laws 1994, chapter 587, article 9, section 14, subdivisions 1, 2, 3; Laws 1995, 2.55chapter 264, article 5, sections 44, subdivision 4, as amended; 45, subdivision 1, 2.56as amended; Laws 1999, chapter 243, article 4, section 18, subdivisions 1, 3, 4; 2.57Laws 2003, chapter 128, article 1, section 172, as amended; Laws 2005, First 2.58Special Session chapter 3, article 5, section 39; article 10, section 23; Laws 2006, 3.1chapter 236, article 1, section 21; Laws 2006, chapter 259, article 11, section 3; 3.2proposing coding for new law in Minnesota Statutes, chapters 270; 270C; 273; 3.3274; 290C; 295; 297A; 360; 383C; 383D; 383E; 471; 475; repealing Minnesota 3.4Statutes 2006, sections 16A.1522; 126C.21, subdivision 4; 270.073; 270.41, 3.5subdivision 4; 270.43; 270.51; 270.52; 270.53; 295.60; 297A.61, subdivision 3.620; 297A.668, subdivision 6; 297A.67, subdivision 22; 469.174, subdivision 29; 3.7Laws 1973, chapter 393, section 2; Laws 1994, chapter 587, article 9, section 8, 3.8subdivision 1, as amended; Laws 1998, chapter 389, article 11, section 18. 3.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.10ARTICLE 1 3.11AIDS TO LOCAL GOVERNMENTS AND PROPERTY TAX REFUNDS 3.12    Section 1. Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to 3.13read: 3.14    Subd. 2. Homeowners. A claimant whose property taxes payable are in excess 3.15of the percentage of the household income stated below shall pay an amount equal to 3.16the percent of income shown for the appropriate household income level along with the 3.17percent to be paid by the claimant of the remaining amount of property taxes payable. 3.18The state refund equals the amount of property taxes payable that remain, up to the state 3.19refund amount shown below. 3.20 3.21 Household Income Percent of Income Percent Paid by Claimant Maximum State Refund 3.22 3.23 $0 to 1,189 1.0 percent 15 percent $1,450 new text begin $1,810 new text end 3.24 3.25 1,190 to 2,379 1.1 percent 15 percent $1,450 new text begin $1,810 new text end 3.26 3.27 2,380 to 3,589 1.2 percent 15 percent $1,410 new text begin $1,760 new text end 3.28 3.29 3,590 to 4,789 1.3 percent 20 percent $1,410 new text begin $1,760 new text end 3.30 3.31 4,790 to 5,979 1.4 percent 20 percent $1,360 new text begin $1,700 new text end 3.32 3.33 5,980 to 8,369 1.5 percent 20 percent $1,360 new text begin $1,700 new text end 3.34 3.35 8,370 to 9,559 1.6 percent 25 percent $1,310 new text begin $1,570 new text end 3.36 3.37 9,560 to 10,759 1.7 percent 25 percent $1,310 new text begin $1,570 new text end 3.38 3.39 10,760 to 11,949 1.8 percent 25 percent $1,260 new text begin $1,530 new text end 3.40 3.41 11,950 to 13,139 1.9 percent 30 percent $1,260 new text begin $1,530 new text end 3.42 3.43 13,140 to 14,349 2.0 percent 30 percent $1,210 new text begin $1,450 new text end 4.1 4.2 14,350 to 16,739 2.1 percent 30 percent $1,210 new text begin $1,450 new text end 4.3 4.4 16,740 to 17,929 2.2 percent 35 percent $1,160 new text begin $1,390 new text end 4.5 4.6 17,930 to 19,119 2.3 percent 35 percent $1,160 new text begin $1,390 new text end 4.7 4.8 19,120 to 20,319 2.4 percent 35 percent $1,110 new text begin $1,330 new text end 4.9 4.10 20,320 to 25,099 2.5 percent 40 percent $1,110 new text begin $1,330 new text end 4.11 4.12 25,100 to 28,679 2.6 percent 40 percent $1,070 new text begin $1,280 new text end 4.13 4.14 28,680 to 35,849 2.7 percent 40 percent $1,070 new text begin $1,280 new text end 4.15 4.16 35,850 to 41,819 2.8 percent 45 percent $ 970 new text begin $1,160 new text end 4.17 4.18 41,820 to 47,799 3.0 percent 45 percent $ 970 new text begin $1,160 new text end 4.19 4.20 47,800 to 53,779 3.2 percent 45 percent $ 870 new text begin $1,040 new text end 4.21 4.22 53,780 to 59,749 3.5 percent 50 percent $ 780 new text begin $940 new text end 4.23 4.24 59,750 to 65,729 4.0 percent 50 percent $ 680 new text begin $820 new text end 4.25 4.26 65,730 to 69,319 4.0 percent 50 percent $ 580 new text begin $700 new text end 4.27 4.28 69,320 to 71,719 4.0 percent 50 percent $ 480 new text begin $580 new text end 4.29 4.30 71,720 to 74,619 4.0 percent 50 percent $ 390 new text begin $470 new text end 4.31 4.32 74,620 to 77,519 4.0 percent 50 percent $ 290 new text begin $350 new text end 4.33    The payment made to a claimant shall be the amount of the state refund calculated 4.34under this subdivision. No payment is allowed if the claimant's household income is 4.35$77,520 or more. 4.36 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with refunds based on new text end 4.37 new text begin property taxes payable in 2008. new text end 4.38    Sec. 2. Minnesota Statutes 2006, section 477A.011, subdivision 36, is amended to read: 4.39    Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision, 4.40"city aid base" is zero. 4.41    (b) The city aid base for any city with a population less than 500 is increased by 4.42$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount 5.1of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 5.2increased by $40,000 for aids payable in calendar year 1995 only, provided that: 5.3    (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent; 5.4    (ii) the city portion of the tax capacity rate exceeds 100 percent; and 5.5    (iii) its city aid base is less than $60 per capita. 5.6    (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and 5.7the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 5.8paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that: 5.9    (i) the city has a population in 1994 of 2,500 or more; 5.10    (ii) the city is located in a county, outside of the metropolitan area, which contains a 5.11city of the first class; 5.12    (iii) the city's net tax capacity used in calculating its 1996 aid under section 5.13477A.013 is less than $400 per capita; and 5.14    (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of 5.15property located in the city is classified as railroad property. 5.16    (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and 5.17the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 5.18paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that: 5.19    (i) the city was incorporated as a statutory city after December 1, 1993; 5.20    (ii) its city aid base does not exceed $5,600; and 5.21    (iii) the city had a population in 1996 of 5,000 or more. 5.22    (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the 5.23maximum amount of total aid it may receive under section 477A.013, subdivision 9, 5.24paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that: 5.25    (i) the city had a population in 1996 of at least 50,000; 5.26    (ii) its population had increased by at least 40 percent in the ten-year period ending 5.27in 1996; and 5.28    (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita. 5.29    (f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and 5.30thereafter, and the maximum amount of total aid it may receive under section 477A.013, 5.31subdivision 9 , paragraph (c), is also increased by $150,000 in calendar year 2000 only, 5.32provided that: 5.33    (1) the city has a population that is greater than 1,000 and less than 2,500; 5.34    (2) its commercial and industrial percentage for aids payable in 1999 is greater 5.35than 45 percent; and 6.1    (3) the total market value of all commercial and industrial property in the city 6.2for assessment year 1999 is at least 15 percent less than the total market value of all 6.3commercial and industrial property in the city for assessment year 1998. 6.4    (g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and 6.5the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 6.6paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that: 6.7    (1) the city had a population in 1997 of 2,500 or more; 6.8    (2) the net tax capacity of the city used in calculating its 1999 aid under section 6.9477A.013 is less than $650 per capita; 6.10    (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under 6.11section 477A.013 is greater than 12 percent; 6.12    (4) the 1999 local government aid of the city under section 477A.013 is less than 6.1320 percent of the amount that the formula aid of the city would have been if the need 6.14increase percentage was 100 percent; and 6.15    (5) the city aid base of the city used in calculating aid under section 477A.013 6.16is less than $7 per capita. 6.17    (h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and 6.18the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 6.19paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that: 6.20    (1) the city has a population in 1997 of 2,000 or more; 6.21    (2) the net tax capacity of the city used in calculating its 1999 aid under section 6.22477A.013 is less than $455 per capita; 6.23    (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is 6.24greater than $195 per capita; and 6.25    (4) the 1999 local government aid of the city under section 477A.013 is less than 6.2638 percent of the amount that the formula aid of the city would have been if the need 6.27increase percentage was 100 percent. 6.28    (i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and 6.29the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 6.30paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that: 6.31    (1) the city has a population in 1998 that is greater than 200 but less than 500; 6.32    (2) the city's revenue need used in calculating aids payable in 2000 was greater 6.33than $200 per capita; 6.34    (3) the city net tax capacity for the city used in calculating aids available in 2000 6.35was equal to or less than $200 per capita; 7.1    (4) the city aid base of the city used in calculating aid under section 477A.013 7.2is less than $65 per capita; and 7.3    (5) the city's formula aid for aids payable in 2000 was greater than zero. 7.4    (j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and 7.5the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 7.6paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that: 7.7    (1) the city had a population in 1998 that is greater than 200 but less than 500; 7.8    (2) the city's commercial industrial percentage used in calculating aids payable in 7.92000 was less than ten percent; 7.10    (3) more than 25 percent of the city's population was 60 years old or older according 7.11to the 1990 census; 7.12    (4) the city aid base of the city used in calculating aid under section 477A.013 7.13is less than $15 per capita; and 7.14    (5) the city's formula aid for aids payable in 2000 was greater than zero. 7.15    (k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and 7.16by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of 7.17total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 7.18increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002 7.19only, provided that: 7.20    (1) the net tax capacity of the city used in calculating its 2000 aid under section 7.21477A.013 is less than $810 per capita; 7.22    (2) the population of the city declined more than two percent between 1988 and 1998; 7.23    (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is 7.24greater than $240 per capita; and 7.25    (4) the city received less than $36 per capita in aid under section 477A.013, 7.26subdivision 9 , for aids payable in 2000. 7.27    (l) The city aid base for a city with a population of 10,000 or more which is located 7.28outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the 7.29maximum amount of total aid it may receive under section 477A.013, subdivision 9, 7.30paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to 7.31the lesser of: 7.32    (1)(i) the total population of the city, as determined by the United States Bureau of 7.33the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or 7.34    (2) $2,500,000. 8.1    (m) The city aid base is increased by $50,000 in 2002 and thereafter, and the 8.2maximum amount of total aid it may receive under section 477A.013, subdivision 9, 8.3paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that: 8.4    (1) the city is located in the seven-county metropolitan area; 8.5    (2) its population in 2000 is between 10,000 and 20,000; and 8.6    (3) its commercial industrial percentage, as calculated for city aid payable in 2001, 8.7was greater than 25 percent. 8.8    (n) The city aid base for a city is increased by $150,000 in calendar years 2002 to 8.92011 new text begin and by an additional $75,000 in calendar years 2008 to 2013 new text end and the maximum 8.10amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is 8.11also increased by $150,000 in calendar year 2002 only new text begin and by $75,000 in calendar year new text end 8.12 new text begin 2008 only new text end , provided that: 8.13    (1) the city had a population of at least 3,000 but no more than 4,000 in 1999; 8.14    (2) its home county is located within the seven-county metropolitan area; 8.15    (3) its pre-1940 housing percentage is less than 15 percent; and 8.16    (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 8.17per capita. 8.18    (o) The city aid base for a city is increased by $200,000 beginning in calendar 8.19year 2003 and the maximum amount of total aid it may receive under section 477A.013, 8.20subdivision 9 , paragraph (c), is also increased by $200,000 in calendar year 2003 only, 8.21provided that the city qualified for an increase in homestead and agricultural credit aid 8.22under Laws 1995, chapter 264, article 8, section 18. 8.23    (p) The city aid base for a city is increased by $200,000 in 2004 only and the 8.24maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 8.25also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear 8.26dry cask storage facility. 8.27    (q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the 8.28maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 8.29by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster 8.30designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by 8.31more than 40 percent between 1990 and 2000. 8.32    (r) The city aid base for a city is increased by $25,000 new text begin $30,000 new text end in 2006 only 8.33 new text begin 2008 and thereafter new text end and the maximum total aid it may receive under section 477A.013, 8.34subdivision 9 , is also increased by $25,000 new text begin $30,000 new text end in calendar year 2006 only if the city 8.35had a population in 2003 of at least 1,000 and has a state park for which the city provides 9.1rescue services and which comprised at least 14 percent of the total geographic area 9.2included within the city boundaries in 2000. 9.3    (s) The city aid base for a city with a population less than 5,000 is increased in 9.42006 and thereafter and the minimum and maximum amount of total aid it may receive 9.5under this section is also increased in calendar year 2006 only by an amount equal to 9.6$6 multiplied by its population. 9.7    (t) The city aid base for a city is increased by $80,000 in 2007 only new text begin and thereafter new text end and 9.8the minimum and maximum amount of total aid it may receive under section 477A.013, 9.9subdivision 9, is also increased by $80,000 in calendar year 2007 only, if: 9.10    (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed 9.11to be placed in trust status as tax-exempt Indian land; 9.12    (2) the placement of the land is being challenged administratively or in court; and 9.13    (3) due to the challenge, the land proposed to be placed in trust is still on the tax 9.14rolls as of May 1, 2006. 9.15    (u) The city aid base for a city is increased by $100,000 in 2007 and thereafter and 9.16the minimum and maximum total amount of aid it may receive under this section is also 9.17increased in calendar year 2007 only, provided that: 9.18    (1) the city has a 2004 estimated population greater than 200 but less than 2,000; 9.19    (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita; 9.20    (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids 9.21payable in 2006 was greater than 110 percent; and 9.22    (4) it is located in a county where at least 15,000 acres of land are classified as 9.23tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property. 9.24     new text begin (v) The city aid base for a city is increased by $30,000 in 2008 only, and the new text end 9.25 new text begin maximum total aid it may receive under section 477A.013, subdivision 9, is also increased new text end 9.26 new text begin by $30,000 in calendar year 2008 only if the city had a population in 2005 of less than new text end 9.27 new text begin 3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities new text end 9.28 new text begin and one township in 2002. new text end 9.29     new text begin (w) The city aid base for a city is increased by $100,000 in 2008 and thereafter, and new text end 9.30 new text begin the maximum total aid it may receive under section 477A.013, subdivision 9, is also new text end 9.31 new text begin increased by $100,000 in calendar year 2008 only if the city had a city net tax capacity for new text end 9.32 new text begin aids payable in 2007 of less than $150 per capita and the city experienced flooding on new text end 9.33 new text begin March 14, 2007, that resulted in evacuation of at least 40 homes. new text end 9.34     new text begin (x) The city aid base for a city is increased by $200,000 in 2008 through 2012, and new text end 9.35 new text begin the maximum total aid it may receive under section 477A.013, subdivision 9, is also new text end 9.36 new text begin increased by $200,000 in calendar year 2008 only if the city: new text end 10.1     new text begin (i) is located outside of the Minneapolis-St. Paul standard metropolitan statistical new text end 10.2 new text begin area; new text end 10.3     new text begin (ii) has a 2005 population greater than 7,000 but less than 8,000; and new text end 10.4     new text begin (iii) has a 2005 net tax capacity per capita of less than $500. new text end 10.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 10.6 new text begin June 30, 2007. new text end 10.7    Sec. 3. Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read: 10.8    Subd. 5. County transition aid. (a) For 2005, a county is eligible for transition 10.9aid equal to the amount, if any, by which: 10.10    (1) the difference between: 10.11    (i) the aid the county received under subdivision 1 in 2004, divided by the total aid 10.12paid to all counties under subdivision 1, multiplied by $205,000,000; and 10.13    (ii) the amount of aid the county is certified to receive in 2005 under subdivisions 10.143 and 4; 10.15exceeds: 10.16    (2) three percent of the county's adjusted net tax capacity. 10.17A county's aid under this paragraph may not be less than zero. 10.18    (b) In 2006, a county is eligible to receive two-thirds of the transition aid it received 10.19in 2005. 10.20    (c) In 2007 new text begin and subsequent years new text end , a county is eligible to receive one-third of the 10.21transition aid it received in 2005. 10.22    (d) No county shall receive aid under this subdivision after 2007. new text begin In 2008 only, a new text end 10.23 new text begin county with (1) a 2005 population greater than 10,000 and less than 29,000, and (2) an new text end 10.24 new text begin average Part I crimes per capita greater than 3.6 percent for aids payable in 2007 shall new text end 10.25 new text begin receive $250,000. new text end 10.26    Sec. 4. Minnesota Statutes 2006, section 477A.013, subdivision 1, is amended to read: 10.27    Subdivision 1. Towns. In 2002, no new text begin In 2008 and subsequent years, each new text end town is 10.28eligible for a distribution under this subdivision new text begin equal to 20 percent of the amount of new text end 10.29 new text begin homestead and agricultural credit aid reimbursement it received under Minnesota Statutes new text end 10.30 new text begin 2000, section 273.1398, in calendar year 2001 new text end . 10.31    Sec. 5. Minnesota Statutes 2006, section 477A.013, subdivision 8, is amended to read: 11.1    Subd. 8. City formula aid. In calendar year 2004 and subsequent years, the 11.2formula aid for a city is equal to the need increase percentage multiplied by the difference 11.3between (1) the city's revenue need multiplied by its population, and (2) the sum of the 11.4city's net tax capacity multiplied by the tax effort rate; the taconite aids under sections 11.5 and to any city except a city directly impacted by a taconite mine or plant, 11.6multiplied by the following percentages: 11.7    (i) zero percent for aids payable in 2004; 11.8    (ii) 25 percent for aids payable in 2005; 11.9    (iii) 50 percent for aids payable in 2006; 11.10    (iv) 75 percent for aids payable in 2007; and 11.11    (v) 100 percent for aids payable in 2008 and thereafter. 11.12    For purposes of this subdivision, "a city directly impacted by a taconite mine or 11.13plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6) 11.14Silver Bay, or (7) Virginia. 11.15No city may have a formula aid amount less than zero. The need increase percentage 11.16must be the same for all cities. 11.17    The applicable need increase percentage must be calculated by the Department of 11.18Revenue so that the total of the aid under subdivision 9 equals the total amount available 11.19for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions 11.204 and 5 . 11.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with aids payable in 2008. new text end 11.22    Sec. 6. Minnesota Statutes 2006, section 477A.013, subdivision 9, is amended to read: 11.23    Subd. 9. City aid distribution. (a) In calendar year 2002 and thereafter new text begin 2008 new text end , each 11.24city shall receive an aid distribution equal to the sum of (1) the city formula aid under 11.25subdivision 8, and (2) its city aid base new text begin , and (3) one-half of the difference between its total new text end 11.26 new text begin aid in the previous year under this section and its city aid base in the previous year. For aids new text end 11.27 new text begin payable in 2009 and thereafter, each city shall receive an aid distribution equal to the sum new text end 11.28 new text begin of (1) the city formula aid under subdivision 8, (2) its city aid base, and (3) its formula aid new text end 11.29 new text begin under subdivision 8 in the previous year, prior to any adjustments under this subdivision new text end . 11.30    (b) new text begin For aids payable in 2008, the total aid for any city shall not exceed the sum of (1) new text end 11.31 new text begin 30 percent of its net levy for the year prior to the aid distribution plus (2) its total aid in the new text end 11.32 new text begin previous year. new text end For aids payable in 2005 new text begin 2009 new text end and thereafter, the total aid for any city shall 11.33not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid 11.34distribution plus (2) its total aid in the previous year. For aids payable in 2005 new text begin 2008 new text end and 12.1thereafter, the total aid for any city with a population of 2,500 or more may not decrease 12.2from new text begin be less than new text end its total aid under this section in the previous year by an amount greater 12.3than new text begin minus the lesser of (1) $15 multiplied by its population, or (2) new text end ten percent of its net 12.4levy in the year prior to the aid distribution. 12.5    (c) For aids payable in 2004 only, the total aid for a city with a population less than 12.62,500 may not be less than the amount it was certified to receive in 2003 minus the greater 12.7of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special Session 12.8chapter 21, article 5, or (2) five percent of its 2003 aid amount. For aids payable in 2005 12.9 new text begin 2008 new text end and thereafter, the total aid for a city with a population less than 2,500 must not be 12.10less than the amount it was certified to receive in the previous year minus new text begin the lesser of (1) new text end 12.11 new text begin $15 multiplied by its population, or (2) new text end five percent of its 2003 certified aid amount. 12.12    (d) If a city's net tax capacity used in calculating aid under this section has decreased 12.13in any year by more than 25 percent from its net tax capacity in the previous year due to 12.14property becoming tax-exempt Indian land, the city's maximum allowed aid increase 12.15under paragraph (b) shall be increased by an amount equal to (1) the city's tax rate in the 12.16year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 12.17resulting from the property becoming tax exempt. 12.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in 2008 and new text end 12.19 new text begin thereafter. new text end 12.20    Sec. 7. Minnesota Statutes 2006, section 477A.03, is amended to read: 12.21477A.03 APPROPRIATION. 12.22    Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed 12.23by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the 12.24commissioner of revenue. 12.25    Subd. 2a. Cities. For aids payable in 2004, the total aids paid under section 12.26477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the 12.27total aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For 12.28aids payable in 2006 new text begin 2008 new text end and thereafter, the total aids paid under section 477A.013, 12.29subdivision 9 , is limited to $485,052,000 new text begin $565,052,000 new text end . 12.30    Subd. 2b. Counties. (a) For aids payable in calendar year 2005 new text begin 2008 new text end and thereafter, 12.31the total aids paid to counties under section 477A.0124, subdivision 3, are limited to 12.32$100,500,000 new text begin $118,000,000 new text end . Each calendar year, $500,000 shall be retained by the 12.33commissioner of revenue to make reimbursements to the commissioner of finance 12.34for payments made under section 611.27. For calendar year 2004, the amount shall be 13.1in addition to the payments authorized under section 477A.0124, subdivision 1. For 13.2calendar year 2005 and subsequent years, The amount shall be deducted from the 13.3appropriation under this paragraph. The reimbursements shall be to defray the additional 13.4costs associated with court-ordered counsel under section 611.27. Any retained amounts 13.5not used for reimbursement in a year shall be included in the next distribution of county 13.6need aid that is certified to the county auditors for the purpose of property tax reduction 13.7for the next taxes payable year. 13.8    (b) For aids payable in 2005, the total aids under section 477A.0124, subdivision 4, 13.9are limited to $105,000,000. For aids payable in 2006 new text begin 2008 new text end and thereafter, the total aid 13.10under section 477A.0124, subdivision 4, is limited to $105,132,923 new text begin $122,632,923 new text end . The 13.11commissioner of finance shall bill the commissioner of revenue for the cost of preparation 13.12of local impact notes as required by section 3.987, not to exceed $207,000 in fiscal year 13.132004 and thereafter. The commissioner of education shall bill the commissioner of 13.14revenue for the cost of preparation of local impact notes for school districts as required by 13.15section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner 13.16of revenue shall deduct the amounts billed under this paragraph from the appropriation 13.17under this paragraph. The amounts deducted are appropriated to the commissioner of 13.18finance and the commissioner of education for the preparation of local impact notes. 13.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 13.20 new text begin 2008 and thereafter. new text end 13.21    Sec. 8. Minnesota Statutes 2006, section 477A.12, subdivision 1, is amended to read: 13.22    Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred 13.23by counties and towns in support of natural resources lands, the following amounts are 13.24annually appropriated to the commissioner of natural resources from the general fund for 13.25transfer to the commissioner of revenue. The commissioner of revenue shall pay the 13.26transferred funds to counties as required by sections 477A.11 to 477A.145. The amounts 13.27are: 13.28    (1) for acquired natural resources land, $3, as adjusted for inflation under section 13.29477A.145 , multiplied by the total number of acres of acquired natural resources land or, 13.30at the county's option three-fourths of one percent of the appraised value of all acquired 13.31natural resources land in the county, whichever is greater; 13.32    (2) 75 cents, as adjusted for inflation under section 477A.145, multiplied by the 13.33number of acres of county-administered other natural resources land; 13.34    (3) 75 cents new text begin $3 new text end , as adjusted for inflation under section 477A.145, multiplied by 13.35the total number of acres of land utilization project land new text begin that is located entirely within a new text end 14.1 new text begin wildlife management area as described in section 86A.05, subdivision 8; and 75 cents, as new text end 14.2 new text begin adjusted for inflation under section 477A.145, multiplied by the total number of acres of new text end 14.3 new text begin land utilization project land not located within a wildlife management area new text end ; and 14.4    (4) 37.5 cents, as adjusted for inflation under section 477A.145, multiplied by the 14.5number of acres of commissioner-administered other natural resources land located in 14.6each county as of July 1 of each year prior to the payment year. 14.7    (b) The amount determined under paragraph (a), clause (1), is payable for land 14.8that is acquired from a private owner and owned by the Department of Transportation 14.9for the purpose of replacing wetland losses caused by transportation projects, but only 14.10if the county contains more than 500 acres of such land at the time the certification is 14.11made under subdivision 2. 14.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for payments in 2008 and thereafter. new text end 14.13    Sec. 9. Minnesota Statutes 2006, section 477A.14, subdivision 1, is amended to read: 14.14    Subdivision 1. General distribution. Except as provided in subdivision 2 or in 14.15section 97A.061, subdivision 5, 40 percent of the total payment to the county shall be 14.16deposited in the county general revenue fund to be used to provide property tax levy 14.17reduction. The remainder shall be distributed by the county in the following priority: 14.18    (a) 37.5 cents, as adjusted for inflation under section 477A.145, for each acre 14.19of county-administered other natural resources land shall be deposited in a resource 14.20development fund to be created within the county treasury for use in resource 14.21development, forest management, game and fish habitat improvement, and recreational 14.22development and maintenance of county-administered other natural resources land. Any 14.23county receiving less than $5,000 annually for the resource development fund may elect to 14.24deposit that amount in the county general revenue fund; 14.25    (b) From the funds remaining, within 30 days of receipt of the payment to the county, 14.26the county treasurer shall pay each organized township 30 cents, as adjusted for inflation 14.27under section 477A.145, for each acre of acquired natural resources land new text begin , each acre of new text end 14.28 new text begin land utilization project land located entirely within a wildlife management area, new text end and each 14.29acre of land described in section 477A.12, subdivision 1, paragraph (b), and 7.5 cents, as 14.30adjusted for inflation under section 477A.145, for each acre of other natural resources land 14.31and each acre of land utilization project land new text begin not located within a wildlife management new text end 14.32 new text begin area, new text end located within its boundaries. Payments for natural resources lands not located in 14.33an organized township shall be deposited in the county general revenue fund. Payments 14.34to counties and townships pursuant to this paragraph shall be used to provide property 14.35tax levy reduction, except that of the payments for natural resources lands not located in 15.1an organized township, the county may allocate the amount determined to be necessary 15.2for maintenance of roads in unorganized townships. Provided that, if the total payment 15.3to the county pursuant to section 477A.12 is not sufficient to fully fund the distribution 15.4provided for in this clause, the amount available shall be distributed to each township and 15.5the county general revenue fund on a pro rata basis; and 15.6    (c) Any remaining funds shall be deposited in the county general revenue fund. 15.7Provided that, if the distribution to the county general revenue fund exceeds $35,000, the 15.8excess shall be used to provide property tax levy reduction. 15.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for payments in 2008 and thereafter. new text end 15.10    Sec. 10. Laws 2006, chapter 259, article 11, section 3, is amended to read: 15.11    Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT, 15.12PROPERTY TAX REIMBURSEMENT; 2006 ONLY. 15.13    Subdivision 1. Aid appropriation. $600,000 is appropriated new text begin annually new text end from the 15.14general fund to the commissioner of revenue to be used to make payments to compensate 15.15for the loss of property tax revenue due to the placement of land located in the city of 15.16Mahnomen that was put in trust status by the United Stated Department of the Interior, 15.17Bureau of Indian Affairs, during calendar year 2006. The commissioner shall pay the 15.18county of Mahnomen, $450,000; the city of Mahnomen, $80,000; and Independent School 15.19District No. 432, Mahnomen, $70,000 new text begin , provided that these payments shall be reduced new text end 15.20 new text begin in 2007 and any subsequent year by the amount, if any, of payments to that political new text end 15.21 new text begin subdivision made during the previous calendar year by the owner of the land that was new text end 15.22 new text begin placed in trust new text end . The payments shall be made on July 20, new text begin of new text end 2006 new text begin , and each subsequent year new text end . 15.23    Subd. 2. School district tax base adjustments. The Department of Revenue 15.24must reduce the referendum market value and the adjusted net tax capacity certified for 15.25assessment year 2005 used to calculate school levies for taxes payable in 2007 new text begin and new text end 15.26 new text begin subsequent years new text end for Independent School District No. 432, Mahnomen, by the amounts of 15.27any values attributable to property that is no longer subject to property taxation because 15.28the land has been placed in trust in calendar year 2006 through action of the United States 15.29Department of Interior, Bureau of Indian Affairs. The Mahnomen County auditor must 15.30certify the reductions in value to the Department of Revenue in the form and manner 15.31specified by the Department of Revenue. 15.32    Sec. 11. new text begin MAHNOMEN COUNTY; CITY, COUNTY, AND SCHOOL DISTRICT new text end 15.33 new text begin TAX BASE ADJUSTMENTS. new text end 16.1     new text begin (a) The commissioner of revenue must reduce the referendum market value and new text end 16.2 new text begin adjusted net tax capacity used to calculate school levies beginning with taxes payable in new text end 16.3 new text begin 2008 and subsequent years for Independent School District No. 432, Mahnomen, by the new text end 16.4 new text begin amounts attributable to the property that is pending placement into trust status by the new text end 16.5 new text begin United States Department of the Interior, Bureau of Indian Affairs. This adjustment shall new text end 16.6 new text begin be made for each assessment year that the property remains on the tax rolls. new text end 16.7     new text begin (b) The commissioner of revenue must reduce the county and city net tax capacities new text end 16.8 new text begin used to calculate aids under sections 477A.011 to 477A.03, beginning with aids payable in new text end 16.9 new text begin 2008 for the county of Mahnomen and the city of Mahnomen, by the amounts attributable new text end 16.10 new text begin to property that is pending placement into trust status by the United States Department of new text end 16.11 new text begin the Interior, Bureau of Indian Affairs. This adjustment shall be made for each assessment new text end 16.12 new text begin year that the property remains on the tax rolls. new text end 16.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids and levies payable in 2008 new text end 16.14 new text begin and thereafter. new text end 16.15    Sec. 12. new text begin GRAND MARAIS FIRE AID. new text end 16.16     new text begin $250,000 is appropriated in fiscal years 2008 and 2009 from the general fund to the new text end 16.17 new text begin commissioner of revenue to be paid to the city of Grand Marais for costs related to the new text end 16.18 new text begin Ham Lake fire of 2007. new text end 16.19    Sec. 13. new text begin STATE AID TRANSITION RESERVE. new text end 16.20     new text begin Subdivision 1. new text end new text begin Reserve account. new text end new text begin A state aid transition reserve account is established new text end 16.21 new text begin in the general fund to provide two additional years of transition funding for county new text end 16.22 new text begin program aid and local government aid. new text end 16.23     new text begin Subd. 2. new text end new text begin Transfer to account. new text end new text begin On June 29, 2009, the commissioner of finance shall new text end 16.24 new text begin transfer $80,629,000 from the general fund to the state aid transition reserve account. new text end 16.25     new text begin Subd. 3. new text end new text begin Transfer to general fund. new text end new text begin On July 1, 2009, the commissioner of finance new text end 16.26 new text begin shall transfer the balance in the state aid transition reserve account to the general fund. new text end 16.27     new text begin Subd. 4. new text end new text begin Expiration date. new text end new text begin This section expires July 2, 2009. new text end 16.28ARTICLE 2 16.29PROPERTY TAXES 16.30    Section 1. Minnesota Statutes 2006, section 97A.061, subdivision 2, is amended to 16.31read: 17.1    Subd. 2. Allocation. (a) Except as provided in subdivision 3, the county treasurer 17.2shall allocate the payment among the county, towns, and school districts on the same basis 17.3as if the payments were taxes on the land received in the year. Payment of a town's or a 17.4school district's allocation must be made by the county treasurer to the town or school 17.5district within 30 days of receipt of the payment to the county. The county's share of the 17.6payment shall be deposited in the county general revenue fund. 17.7    (b) The county treasurer of a county with a population over 39,000 but less than 17.842,000 in the 1950 federal census shall allocate the payment only among the towns and 17.9school districts on the same basis as if the payments were taxes on the lands received 17.10in the current year. 17.11     new text begin (c) If a town received a payment in calendar year 2006 or thereafter under this new text end 17.12 new text begin subdivision, and subsequently incorporated as a city, the city will continue to receive any new text end 17.13 new text begin future year's allocations that would have been made to the town had it not incorporated, new text end 17.14 new text begin provided that the payments will terminate if the governing body of the city passes an new text end 17.15 new text begin ordinance that prohibits hunting within the boundaries of the city. new text end 17.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aid payments made in 2007 new text end 17.17 new text begin and thereafter. new text end 17.18    Sec. 2. Minnesota Statutes 2006, section 126C.41, subdivision 2, is amended to read: 17.19    Subd. 2. Retired employee health benefits. A district may levy an amount up to the 17.20amount the district is required by the collective bargaining agreement in effect on March 17.2130, 1992, to pay for health insurance or unreimbursed medical expenses for licensed 17.22and nonlicensed employees who have terminated services in the employing district and 17.23withdrawn from active teaching service or other active service, as applicable, before July 1, 17.241992 new text begin , or in the case of a school district located within the taconite tax relief area defined in new text end 17.25 new text begin section 273.134, before July 1, 1998, if a sunset clause is in effect for the current collective new text end 17.26 new text begin bargaining agreement new text end . The total amount of the levy each year may not exceed $600,000. 17.27    Sec. 3. Minnesota Statutes 2006, section 127A.48, subdivision 2, is amended to read: 17.28    Subd. 2. Methodology. In making its annual assessment/sales ratio studies, the 17.29Department of Revenue must use a methodology consistent with the most recent Standard 17.30on Assessment Ratio Studies published by the assessment standards committee of the 17.31International Association of Assessing Officers. The commissioner of revenue shall 17.32supplement this general methodology with specific procedures necessary for execution of 17.33the study in accordance with other Minnesota laws impacting the assessment/sales ratio 17.34study. The commissioner shall document these specific procedures in writing and shall 18.1publish the procedures in the State Register, but these procedures will not be considered 18.2"rules" pursuant to the Minnesota Administrative Procedure Act. new text begin When property is new text end 18.3 new text begin sold and the purchaser changes its use in a manner that would result in a change of new text end 18.4 new text begin classification of the property, the assessment sales ratio study under this subdivision must new text end 18.5 new text begin take into account that changed classification as soon as practicable. A change in status new text end 18.6 new text begin from homestead to nonhomestead or from nonhomestead to homestead is not a change new text end 18.7 new text begin under this subdivision. new text end For purposes of this section, sections 270.12, subdivision 2, 18.8clause (8), and 278.05, subdivision 4, the commissioner of revenue shall exclude from 18.9the assessment/sales ratio study the sale of any nonagricultural property which does not 18.10contain an improvement, if (1) the statutory basis on which the property's taxable value 18.11as most recently assessed is less than market value as defined in section 273.11, or (2) 18.12the property has undergone significant physical change or a change of use since the most 18.13recent assessment. 18.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 18.15    Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 18.16to read: 18.17     new text begin Subd. 85. new text end new text begin Modular homes used as models by dealers. new text end new text begin (a) A modular home new text end 18.18 new text begin is exempt if it: new text end 18.19     new text begin (1) is owned by a modular home dealer and is located on land owned or leased new text end 18.20 new text begin by that dealer; new text end 18.21     new text begin (2) is a single-family model home; new text end 18.22     new text begin (3) is not available for sale and is used exclusively as a model; new text end 18.23     new text begin (4) is not permanently connected to any utilities except electricity; and new text end 18.24     new text begin (5) is situated on a temporary foundation. new text end 18.25     new text begin (b) The exemption under this subdivision is allowable for up to five assessment new text end 18.26 new text begin years after the date it becomes located on the property, provided that the modular home new text end 18.27 new text begin continues to meet all of the criteria under this subdivision each year. The owner of a new text end 18.28 new text begin modular model home must notify the county assessor within 60 days that it has been new text end 18.29 new text begin constructed or located on the property and must again notify the assessor if the modular new text end 18.30 new text begin home ceases to meet any of the criteria. If more than one modular home is constructed or new text end 18.31 new text begin situated on a property, the owner must notify the assessor within 60 days for each of the new text end 18.32 new text begin models placed on the property. new text end 18.33     new text begin (c) For purposes of this subdivision, a "modular home" means a building or new text end 18.34 new text begin structural unit that has been in whole or substantial part manufactured or constructed at an new text end 18.35 new text begin off-site location to be wholly or partially assembled on-site as a single family dwelling. new text end 19.1 new text begin Construction of the modular home must comply with applicable standards adopted in new text end 19.2 new text begin Minnesota Rules authorized under Minnesota Statutes, chapter 16B. A modular home does new text end 19.3 new text begin not include a structure subject to the requirements of the National Manufactured Home new text end 19.4 new text begin Construction and Safety Standards Act of 1974 or prefabricated buildings, as defined in new text end 19.5 new text begin Minnesota Statutes, section 327.31, subdivision 6. new text end 19.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2007 and new text end 19.7 new text begin thereafter, for taxes payable in 2008 and thereafter. The five-year assessment time period new text end 19.8 new text begin begins with the 2007 assessment for a modular model home currently situated provided new text end 19.9 new text begin it meets all of the criteria and the county assessor is notified within 90 days of the day new text end 19.10 new text begin following final enactment. new text end 19.11    Sec. 5. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 19.12to read: 19.13     new text begin Subd. 86. new text end new text begin Electric generation facility; personal property. new text end new text begin (a) Notwithstanding new text end 19.14 new text begin subdivision 9, clause (a), attached machinery and other personal property which is part of new text end 19.15 new text begin a simple-cycle combustion-turbine electric generation facility that exceeds 150 megawatts new text end 19.16 new text begin of installed capacity and that meets the requirements of this subdivision is exempt. At new text end 19.17 new text begin the time of construction, the facility must: new text end 19.18     new text begin (1) utilize natural gas as a primary fuel; new text end 19.19     new text begin (2) be owned by an electric generation and transmission cooperative; new text end 19.20     new text begin (3) be located within one mile of an existing 16-inch natural gas pipeline and a new text end 19.21 new text begin 69-kilovolt and a 230-kilovolt high-voltage electric transmission line; new text end 19.22     new text begin (4) be designed to provide peaking, emergency backup, or contingency services; new text end 19.23     new text begin (5) have received a certificate of need under section 216B.243 demonstrating new text end 19.24 new text begin demand for its capacity; and new text end 19.25     new text begin (6) have received by resolution the approval from the governing bodies of the county new text end 19.26 new text begin and the city in which the proposed facility is to be located for the exemption of personal new text end 19.27 new text begin property under this subdivision. new text end 19.28     new text begin (b) Construction of the facility must be commenced after January 1, 2008, and new text end 19.29 new text begin before January 1, 2012. Property eligible for this exemption does not include electric new text end 19.30 new text begin transmission lines and interconnections or gas pipelines and interconnections appurtenant new text end 19.31 new text begin to the property or the facility. new text end 19.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for the 2007 assessment payable in new text end 19.33 new text begin 2008 and thereafter. new text end 20.1    Sec. 6. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 20.2to read: 20.3     new text begin Subd. 87. new text end new text begin Apprenticeship training facilities. new text end new text begin All or a portion of a property is new text end 20.4 new text begin exempt if: (1) the property is used exclusively for a state-approved apprenticeship program new text end 20.5 new text begin through the Department of Labor and Industry, (2) the property is owned and operated by new text end 20.6 new text begin a nonprofit corporation, and (3) the program participants receive no compensation. new text end 20.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2007 and new text end 20.8 new text begin thereafter, for taxes payable in 2008 and thereafter. new text end 20.9    Sec. 7. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 20.10to read: 20.11     new text begin Subd. 88. new text end new text begin Monosloped roofs for feedlots and manure storage areas. new text end new text begin A new text end 20.12 new text begin monosloped, single-pitched roof installed over a feedlot or manure storage area to prevent new text end 20.13 new text begin runoff is exempt. new text end 20.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for property taxes levied in 2007, new text end 20.15 new text begin payable in 2008, and thereafter. new text end 20.16    Sec. 8. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read: 20.17    Subdivision 1. Requirement. Except as otherwise provided in subdivision 5, 20.18whenever any real estate is sold for a consideration in excess of $1,000, whether by 20.19warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 20.20grantee or the legal agent of either shall file a certificate of value with the county 20.21auditor in the county in which the property is located when the deed or other document 20.22is presented for recording. Contract for deeds are subject to recording under section 20.23507.235, subdivision 1 . Value shall, in the case of any deed not a gift, be the amount of 20.24the full actual consideration thereof, paid or to be paid, including the amount of any lien 20.25or liens assumed. The items and value of personal property transferred with the real 20.26property must be listed and deducted from the sale price. The certificate of value shall 20.27include the classification to which the property belongs for the purpose of determining 20.28the fair market value of the property new text begin , and shall include any proposed change in use of the new text end 20.29 new text begin property known to the person filing the certificate that could change the classification new text end 20.30 new text begin of the property new text end . The certificate shall include financing terms and conditions of the sale 20.31which are necessary to determine the actual, present value of the sale price for purposes 20.32of the sales ratio study. new text begin If the property is being acquired as part of a like-kind exchange new text end 20.33 new text begin under section 1031 of the Internal Revenue Code of 1986, as amended through December new text end 21.1 new text begin 31, 2006, that must be indicated on the certificate. new text end The commissioner of revenue shall 21.2promulgate administrative rules specifying the financing terms and conditions which must 21.3be included on the certificate. Pursuant to the authority of the commissioner of revenue in 21.4section 270C.306, the certificate of value must include the Social Security number or the 21.5federal employer identification number of the grantors and grantees. The identification 21.6numbers of the grantors and grantees are private data on individuals or nonpublic data 21.7as defined in section 13.02, subdivisions 9 and 12, but, notwithstanding that section, the 21.8private or nonpublic data may be disclosed to the commissioner of revenue for purposes of 21.9tax administration. The information required to be shown on the certificate of value is 21.10limited to the information required as of the date of the acknowledgment on the deed or 21.11other document to be recorded. 21.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for certificates filed after June 30, new text end 21.13 new text begin 2007. new text end 21.14    Sec. 9. Minnesota Statutes 2006, section 273.111, subdivision 6, is amended to read: 21.15    Subd. 6. Agricultural use. Real property qualifying under subdivision 3 shall be 21.16considered to be in agricultural use provided that annually: 21.17    (1) new text begin in at least one of the three calendar years preceding the assessment year; new text end 21.18    at least 33-1/3 percent of the total family income of the owner is derived therefrom, 21.19or new text begin (i) new text end the total production income including rental from the property is $300 plus $10 21.20per tillable acre new text begin no less than an amount equal to five percent of the per acre agricultural new text end 21.21 new text begin value determined under subdivision 16 for the county where the property is located for new text end 21.22 new text begin the previous assessment year, multiplied by the number of acres in the parcel subject to new text end 21.23 new text begin this section; or new text end 21.24     new text begin (ii) the amount of total farm expenses shown on Schedule F of the property owner's new text end 21.25 new text begin federal income tax return exceeds 25 percent of the federal adjusted gross income of the new text end 21.26 new text begin owner for federal tax purposes new text end ; and 21.27    (2) it is devoted to the production for sale of agricultural products as defined in 21.28section 273.13, subdivision 23, paragraph (e). 21.29     new text begin In this subdivision, "total production income" means gross income as reported new text end 21.30 new text begin for federal income tax purposes on Schedule F for the calendar year ending in the year new text end 21.31 new text begin preceding the assessment year, plus rental income from the property. new text end 21.32    Slough, wasteland, and woodland contiguous to or surrounded by land that is entitled 21.33to valuation and tax deferment under this section is considered to be in agricultural use if 21.34under the same ownership and management. 22.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2008, payable in new text end 22.2 new text begin 2009 and thereafter, provided that property that qualified under Minnesota Statutes 2006, new text end 22.3 new text begin section 273.111, for the 2007 assessment shall not be disqualified in any of the assessment new text end 22.4 new text begin years 2008 to 2012 because of a failure to meet the requirements of this section. new text end 22.5    Sec. 10. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision 22.6to read: 22.7     new text begin Subd. 16. new text end new text begin Agricultural value determination. new text end new text begin (a) In order to account for the new text end 22.8 new text begin presence of nonagricultural influences that may affect the sales of agricultural land, the new text end 22.9 new text begin commissioner of revenue shall develop a fair and uniform method of determining, for new text end 22.10 new text begin each county in the state, an agricultural value that is consistent with subdivision 4. The new text end 22.11 new text begin commissioner shall annually assign the resulting agricultural value to each county, and new text end 22.12 new text begin this value shall be used as the agricultural value for the county under this section. new text end 22.13     new text begin (b) When property classified as agricultural is sold and the purchaser changes its use new text end 22.14 new text begin in a manner that would result in a change of classification of the property, and the sale new text end 22.15 new text begin price exceeds the agricultural value determined under paragraph (a), the assessor and new text end 22.16 new text begin the commissioner must review the sale along with other appropriate sales information new text end 22.17 new text begin to determine if there are nonagricultural influences on the value. If upon review it is new text end 22.18 new text begin determined that nonagricultural factors have affected the value, the resulting sales ratio new text end 22.19 new text begin shall be excluded from use in any study measuring agricultural value and applied to a new text end 22.20 new text begin study measuring market value. new text end 22.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2009, payable in new text end 22.22 new text begin 2010 and thereafter. new text end 22.23    Sec. 11. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision 22.24to read: 22.25     new text begin Subd. 17. new text end new text begin Implementation of program. new text end new text begin This section must be applied to eligible new text end 22.26 new text begin properties by all county assessors, beginning no later than assessments for taxes levied new text end 22.27 new text begin in 2008, payable in 2009, and thereafter, unless the commissioner of revenue determines new text end 22.28 new text begin that a county is unable to comply with this requirement, in which case the county must new text end 22.29 new text begin implement it for the earliest assessment year determined by the commissioner to be new text end 22.30 new text begin feasible. new text end 22.31    Sec. 12. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision 22.32to read: 23.1     new text begin Subd. 18. new text end new text begin Applications; denied by county. new text end new text begin For applications filed for the 2007 and new text end 23.2 new text begin 2008 assessment years, all applications for deferment of taxes and assessment under this new text end 23.3 new text begin section that have been denied by the county shall be forwarded to the commissioner of new text end 23.4 new text begin revenue by the county assessor within 30 days of denial. The assessor shall also provide new text end 23.5 new text begin the commissioner with a list of any property owners that requested an application and new text end 23.6 new text begin were denied, including names and addresses, and the reason for the denial. For the new text end 23.7 new text begin purpose of monitoring compliance with this section, the commissioner shall compile a new text end 23.8 new text begin report identifying all denied applications and requests for applications that were denied, new text end 23.9 new text begin the reason for the denial, and any commissioner action or recommendation. A report must new text end 23.10 new text begin be submitted to the chairs of the house and senate tax committees on or before February new text end 23.11 new text begin 1, 2008, and February 1, 2009, in compliance with Minnesota Statutes, sections 3.195 new text end 23.12 new text begin and 3.197. new text end 23.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 23.14    Sec. 13. Minnesota Statutes 2006, section 273.123, subdivision 7, is amended to read: 23.15    Subd. 7. Local option; other property. The owner of homestead property 23.16not qualifying for an adjustment in valuation pursuant to subdivisions 1 to 5 or of 23.17nonhomestead property may receive a reduction in the amount of taxes payable on the 23.18property for the year in which the destruction occurs and in the following year if: 23.19    (a) 50 percent or more of the homestead dwelling or other structure, as established 23.20by the county assessor, is new text begin : new text end 23.21     new text begin (1) new text end unintentionally or accidentally destroyed new text begin , or new text end 23.22     new text begin (2) destroyed by arson or vandalism, by someone other than the owner, new text end 23.23and the homestead is uninhabitable or the other structure is not usable; 23.24    (b) the owner of the property makes written application to the county assessor as 23.25soon as practical after the damage has occurred; and 23.26    (c) the owner of the property makes written application to the county board. 23.27    The county board may grant a reduction in the amount of property tax which the 23.28owner must pay on the qualifying property in the year of destruction and in the following 23.29year. Any reduction in the amount of tax payable which is authorized by county board 23.30action shall be calculated based upon the number of months that the home is uninhabitable 23.31or the other structure is unusable. The amount of net tax due from the taxpayer shall be 23.32multiplied by a fraction, the numerator of which is the number of months the dwelling 23.33was occupied by that taxpayer, or the number of months the other structure was used by 23.34the taxpayer, and the denominator of which is 12. For purposes of this subdivision, if a 24.1structure is occupied or used for a fraction of a month, it is considered a month. "Net tax" 24.2is defined as the amount of tax after the subtraction of all of the state paid property tax 24.3credits. If application is made following payment of all property taxes due for the year of 24.4destruction, the amount of the reduction granted by the county board shall be refunded to 24.5the taxpayer by the county treasurer as soon as practical. 24.6    Any reductions or refunds approved by the county board shall not be subject to 24.7approval by the commissioner of revenue. 24.8    The county board may levy in the following year the amount of tax dollars lost to the 24.9county government as a result of the reductions granted pursuant to this subdivision. 24.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for destruction that occurs in calendar new text end 24.11 new text begin year 2006 and thereafter. new text end 24.12    Sec. 14. Minnesota Statutes 2006, section 273.124, subdivision 14, is amended to read: 24.13    Subd. 14. Agricultural homesteads; special provisions. (a) Real estate of less than 24.14ten acres that is the homestead of its owner must be classified as class 2a under section 24.15273.13, subdivision 23 , paragraph (a), if: 24.16    (1) the parcel on which the house is located is contiguous on at least two sides to (i) 24.17agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 24.18Service, or (iii) land administered by the Department of Natural Resources on which in 24.19lieu taxes are paid under sections 477A.11 to 477A.14; 24.20    (2) its owner also owns a noncontiguous parcel of agricultural land that is at least 24.2120 acres; 24.22    (3) the noncontiguous land is located not farther than four townships or cities, or a 24.23combination of townships or cities from the homestead; and 24.24    (4) the agricultural use value of the noncontiguous land and farm buildings is equal 24.25to at least 50 percent of the market value of the house, garage, and one acre of land. 24.26    Homesteads initially classified as class 2a under the provisions of this paragraph shall 24.27remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 24.28properties, as long as the homestead remains under the same ownership, the owner owns a 24.29noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 24.30value qualifies under clause (4). Homestead classification under this paragraph is limited 24.31to property that qualified under this paragraph for the 1998 assessment. 24.32    (b)(i) Agricultural property consisting of at least 40 acres shall be classified as the 24.33owner's homestead, to the same extent as other agricultural homestead property, if all 24.34of the following criteria are met: 25.1     new text begin (1) the property consists of at least 40 acres including undivided government lots new text end 25.2 new text begin and correctional 40's, or at least 20 acres if used exclusively and intensively for raising new text end 25.3 new text begin or cultivating agricultural products as defined under section 273.13, subdivision 23, new text end 25.4 new text begin paragraph (e); new text end 25.5    (1) new text begin (2) new text end the owner, the owner's spouse, the son or daughter of the owner or owner's 25.6spouse, or the grandson or granddaughter of the owner or the owner's spouse, is actively 25.7farming the agricultural property, either on the person's own behalf as an individual or 25.8on behalf of a partnership operating a family farm, family farm corporation, joint family 25.9farm venture, or limited liability company of which the person is a partner, shareholder, or 25.10member; 25.11    (2) new text begin (3) new text end both the owner of the agricultural property and the person who is actively 25.12farming the agricultural property under clause (1) new text begin (2) new text end , are Minnesota residents; 25.13    (3) new text begin (4) new text end neither the owner nor the spouse of the owner claims another agricultural 25.14homestead in Minnesota; and 25.15    (4) new text begin (5) new text end neither the owner nor the person actively farming the property lives farther 25.16than four townships or cities, or a combination of four townships or cities, from the 25.17agricultural property, except that if the owner or the owner's spouse is required to live in 25.18employer-provided housing, the owner or owner's spouse, whichever is actively farming 25.19the agricultural property, may live more than four townships or cities, or combination of 25.20four townships or cities from the agricultural property. 25.21    The relationship under this paragraph may be either by blood or marriage. 25.22    (ii) Real property held by a trustee under a trust is eligible for agricultural homestead 25.23classification under this paragraph if the qualifications in clause (i) are met, except that 25.24"owner" means the grantor of the trust. 25.25    (iii) Property containing the residence of an owner who owns qualified property 25.26under clause (i) shall be classified as part of the owner's agricultural homestead, if that 25.27property is also used for noncommercial storage or drying of agricultural crops. 25.28    (c) Noncontiguous land shall be included as part of a homestead under section 25.29273.13, subdivision 23 , paragraph (a), only if the homestead is classified as class 2a 25.30and the detached land is located in the same township or city, or not farther than four 25.31townships or cities or combination thereof from the homestead. Any taxpayer of these 25.32noncontiguous lands must notify the county assessor that the noncontiguous land is part of 25.33the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer 25.34must also notify the assessor of the other county. 25.35    (d) Agricultural land used for purposes of a homestead and actively farmed by a 25.36person holding a vested remainder interest in it must be classified as a homestead under 26.1section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, 26.2any other dwellings on the land used for purposes of a homestead by persons holding 26.3vested remainder interests who are actively engaged in farming the property, and up to 26.4one acre of the land surrounding each homestead and reasonably necessary for the use of 26.5the dwelling as a home, must also be assessed class 2a. 26.6    (e) Agricultural land and buildings that were class 2a homestead property under 26.7section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain 26.8classified as agricultural homesteads for subsequent assessments if: 26.9    (1) the property owner abandoned the homestead dwelling located on the agricultural 26.10homestead as a result of the April 1997 floods; 26.11    (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, 26.12or Wilkin; 26.13    (3) the agricultural land and buildings remain under the same ownership for the 26.14current assessment year as existed for the 1997 assessment year and continue to be used 26.15for agricultural purposes; 26.16    (4) the dwelling occupied by the owner is located in Minnesota and is within 30 26.17miles of one of the parcels of agricultural land that is owned by the taxpayer; and 26.18    (5) the owner notifies the county assessor that the relocation was due to the 1997 26.19floods, and the owner furnishes the assessor any information deemed necessary by the 26.20assessor in verifying the change in dwelling. Further notifications to the assessor are not 26.21required if the property continues to meet all the requirements in this paragraph and any 26.22dwellings on the agricultural land remain uninhabited. 26.23    (f) Agricultural land and buildings that were class 2a homestead property under 26.24section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain 26.25classified agricultural homesteads for subsequent assessments if: 26.26    (1) the property owner abandoned the homestead dwelling located on the agricultural 26.27homestead as a result of damage caused by a March 29, 1998, tornado; 26.28    (2) the property is located in the county of Blue Earth, Brown, Cottonwood, 26.29LeSueur, Nicollet, Nobles, or Rice; 26.30    (3) the agricultural land and buildings remain under the same ownership for the 26.31current assessment year as existed for the 1998 assessment year; 26.32    (4) the dwelling occupied by the owner is located in this state and is within 50 miles 26.33of one of the parcels of agricultural land that is owned by the taxpayer; and 26.34    (5) the owner notifies the county assessor that the relocation was due to a March 29, 26.351998, tornado, and the owner furnishes the assessor any information deemed necessary by 26.36the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 27.1owner must notify the assessor by December 1, 1998. Further notifications to the assessor 27.2are not required if the property continues to meet all the requirements in this paragraph 27.3and any dwellings on the agricultural land remain uninhabited. 27.4    (g) Agricultural property consisting of at least 40 acres of a family farm corporation, 27.5joint family farm venture, family farm limited liability company, or partnership operating 27.6a family farm as described under subdivision 8 shall be classified homestead, to the same 27.7extent as other agricultural homestead property, if all of the following criteria are met: 27.8     new text begin (1) the property consists of at least 40 acres including undivided government lots new text end 27.9 new text begin and correctional 40's, or at least 20 acres if used exclusively and intensively for raising new text end 27.10 new text begin or cultivating agricultural products as defined under section 273.13, subdivision 23, new text end 27.11 new text begin paragraph (e); new text end 27.12    (1) new text begin (2) new text end a shareholder, member, or partner of that entity is actively farming the 27.13agricultural property; 27.14    (2) new text begin (3) new text end that shareholder, member, or partner who is actively farming the agricultural 27.15property is a Minnesota resident; 27.16    (3) new text begin (4) new text end neither that shareholder, member, or partner, nor the spouse of that 27.17shareholder, member, or partner claims another agricultural homestead in Minnesota; and 27.18    (4) new text begin (5) new text end that shareholder, member, or partner does not live farther than four townships 27.19or cities, or a combination of four townships or cities, from the agricultural property. 27.20    Homestead treatment applies under this paragraph for property leased to a family 27.21farm corporation, joint farm venture, limited liability company, or partnership operating a 27.22family farm if legal title to the property is in the name of an individual who is a member, 27.23shareholder, or partner in the entity. 27.24    (h) To be eligible for the special agricultural homestead under this subdivision, an 27.25initial full application must be submitted to the county assessor where the property is 27.26located. Owners and the persons who are actively farming the property shall be required 27.27to complete only a one-page abbreviated version of the application in each subsequent 27.28year provided that none of the following items have changed since the initial application: 27.29    (1) the day-to-day operation, administration, and financial risks remain the same; 27.30    (2) the owners and the persons actively farming the property continue to live within 27.31the four townships or city criteria and are Minnesota residents; 27.32    (3) the same operator of the agricultural property is listed with the Farm Service 27.33Agency; 27.34    (4) a Schedule F or equivalent income tax form was filed for the most recent year; 27.35    (5) the property's acreage is unchanged; and 28.1    (6) none of the property's acres have been enrolled in a federal or state farm program 28.2since the initial application. 28.3    The owners and any persons who are actively farming the property must include 28.4the appropriate Social Security numbers, and sign and date the application. If any of the 28.5specified information has changed since the full application was filed, the owner must 28.6notify the assessor, and must complete a new application to determine if the property 28.7continues to qualify for the special agricultural homestead. The commissioner of revenue 28.8shall prepare a standard reapplication form for use by the assessors. 28.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2007, taxes new text end 28.10 new text begin payable in 2008 and thereafter. new text end 28.11    Sec. 15. Minnesota Statutes 2006, section 273.124, is amended by adding a subdivision 28.12to read: 28.13     new text begin Subd. 22. new text end new text begin Annual registration of certain relative homesteads. new text end new text begin If the owner of new text end 28.14 new text begin property or the owner's relative who occupies property that is classified as a homestead new text end 28.15 new text begin under subdivision 1, paragraph (c), receives compensation for allowing occupancy of any new text end 28.16 new text begin part of that property for a period that exceeds 31 consecutive days during the calendar new text end 28.17 new text begin year, the recipient of the compensation must register the property with the city in which new text end 28.18 new text begin it is located no later than 60 days after the initial rental period began. This requirement new text end 28.19 new text begin applies to property located in a city that has a population over 25,000. Each city must new text end 28.20 new text begin maintain a file of these property registrations that is open to the public, and retain the new text end 28.21 new text begin registrations for one year after the date of filing. new text end 28.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2007. new text end 28.23    Sec. 16. Minnesota Statutes 2006, section 273.125, subdivision 8, is amended to read: 28.24    Subd. 8. Manufactured homes; sectional structures. (a) In this section, 28.25"manufactured home" means a structure transportable in one or more sections, which is 28.26built on a permanent chassis, and designed to be used as a dwelling with or without a 28.27permanent foundation when connected to the required utilities, and contains the plumbing, 28.28heating, air conditioning, and electrical systems in it. Manufactured home includes any 28.29accessory structure that is an addition or supplement to the manufactured home and, when 28.30installed, becomes a part of the manufactured home. 28.31    (b) Except as provided in paragraph (c), a manufactured home that meets each of the 28.32following criteria must be valued and assessed as an improvement to real property, the 29.1appropriate real property classification applies, and the valuation is subject to review and 29.2the taxes payable in the manner provided for real property: 29.3    (1) the owner of the unit holds title to the land on which it is situated; 29.4    (2) the unit is affixed to the land by a permanent foundation or is installed at its 29.5location in accordance with the Manufactured Home Building Code in sections 327.31 29.6to 327.34, and rules adopted under those sections, or is affixed to the land like other real 29.7property in the taxing district; and 29.8    (3) the unit is connected to public utilities, has a well and septic tank system, or is 29.9serviced by water and sewer facilities comparable to other real property in the taxing 29.10district. 29.11    (c) A manufactured home that meets each of the following criteria must be assessed 29.12at the rate provided by the appropriate real property classification but must be treated as 29.13personal property, and the valuation is subject to review and the taxes payable in the 29.14manner provided in this section: 29.15    (1) the owner of the unit is a lessee of the land under the terms of a lease, or the unit 29.16is located in a manufactured home park but is not the homestead of the park owner; 29.17    (2) the unit is affixed to the land by a permanent foundation or is installed at its 29.18location in accordance with the Manufactured Home Building Code contained in sections 29.19327.31 to 327.34, and the rules adopted under those sections, or is affixed to the land like 29.20other real property in the taxing district; and 29.21    (3) the unit is connected to public utilities, has a well and septic tank system, or is 29.22serviced by water and sewer facilities comparable to other real property in the taxing 29.23district. 29.24    (d) Sectional structures must be valued and assessed as an improvement to real 29.25property if the owner of the structure holds title to the land on which it is located or is a 29.26qualifying lessee of the land under section 273.19. In this paragraph "sectional structure" 29.27means a building or structural unit that has been in whole or substantial part manufactured 29.28or constructed at an off-site location to be wholly or partially assembled on-site alone or 29.29with other units and attached to a permanent foundation. 29.30    (e) The commissioner of revenue may adopt rules under the Administrative 29.31Procedure Act to establish additional criteria for the classification of manufactured homes 29.32and sectional structures under this subdivision. 29.33    (f) A storage shed, deck, or similar improvement constructed on property that is 29.34leased or rented as a site for a manufactured home, sectional structure, park trailer, or 29.35travel trailer is taxable as provided in this section. In the case of property that is leased or 29.36rented as a site for a travel trailer, a storage shed, deck, or similar improvement on the 30.1site that is considered personal property under this paragraph is taxable only if its total 30.2estimated market value is over $500 new text begin $1,000 new text end . The property is taxable as personal property 30.3to the lessee of the site if it is not owned by the owner of the site. The property is taxable 30.4as real estate if it is owned by the owner of the site. As a condition of permitting the owner 30.5of the manufactured home, sectional structure, park trailer, or travel trailer to construct 30.6improvements on the leased or rented site, the owner of the site must obtain the permanent 30.7home address of the lessee or user of the site. The site owner must provide the name 30.8and address to the assessor upon request. 30.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2007 and new text end 30.10 new text begin thereafter, for taxes payable in 2008 and thereafter. new text end 30.11    Sec. 17. Minnesota Statutes 2006, section 273.128, subdivision 1, is amended to read: 30.12    Subdivision 1. Requirement. Low-income rental property classified as class 4d 30.13under section 273.13, subdivision 25, is entitled to valuation under this section if at 30.14least 75 new text begin 20 new text end percent of the units in the rental housing property meet any of the following 30.15qualifications: 30.16    (1) the units are subject to a housing assistance payments contract under Section 8 30.17of the United States Housing Act of 1937, as amended; 30.18    (2) the units are rent-restricted and income-restricted units of a qualified low-income 30.19housing project receiving tax credits under section 42(g) of the Internal Revenue Code of 30.201986, as amended; 30.21    (3) the units are financed by the Rural Housing Service of the United States 30.22Department of Agriculture and receive payments under the rental assistance program 30.23pursuant to section 521(a) of the Housing Act of 1949, as amended; or 30.24    (4) the units are subject to rent and income restrictions under the terms of financial 30.25assistance provided to the rental housing property by the federal government or the 30.26state of Minnesota new text begin , or a local unit of government, new text end as evidenced by a document recorded 30.27against the property. 30.28    The restrictions must require assisted units to be occupied by residents whose 30.29household income at the time of initial occupancy does not exceed 60 percent of the 30.30greater of area or state median income, adjusted for family size, as determined by the 30.31United States Department of Housing and Urban Development. The restriction must also 30.32require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of 30.33area or state median income, adjusted for family size, as determined by the United States 30.34Department of Housing and Urban Development. 31.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for property taxes levied in 2007, new text end 31.2 new text begin payable in 2008, and thereafter. new text end 31.3    Sec. 18. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read: 31.4    Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) 31.5and (c), real estate which is residential and used for homestead purposes is class 1a. In the 31.6case of a duplex or triplex in which one of the units is used for homestead purposes, the 31.7entire property is deemed to be used for homestead purposes. The market value of class 1a 31.8property must be determined based upon the value of the house, garage, and land. 31.9    The first $500,000 of market value of class 1a property has a net class rate of 31.10one percent of its market value; and the market value of class 1a property that exceeds 31.11$500,000 has a class rate of 1.25 percent of its market value. 31.12    (b) Class 1b property includes homestead real estate or homestead manufactured 31.13homes used for the purposes of a homestead by 31.14    (1) any person who is blind as defined in section 256D.35, or the blind person and 31.15the blind person's spouse; or 31.16    (2) any person, hereinafter referred to as "veteran," who: 31.17    (i) served in the active military or naval service of the United States; and 31.18    (ii) is entitled to compensation under the laws and regulations of the United States 31.19for permanent and total service-connected disability due to the loss, or loss of use, by 31.20reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both 31.21lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or 31.22a wheelchair; and 31.23    (iii) has acquired a special housing unit with special fixtures or movable facilities 31.24made necessary by the nature of the veteran's disability, or the surviving spouse of the 31.25deceased veteran for as long as the surviving spouse retains the special housing unit 31.26as a homestead; or 31.27    (3) any person who is permanently and totally disabled. 31.28    Property is classified and assessed under clause (3) only if the government agency or 31.29income-providing source certifies, upon the request of the homestead occupant, that the 31.30homestead occupant satisfies the disability requirements of this paragraph. 31.31    Property is classified and assessed pursuant to clause (1) only if the commissioner of 31.32revenue certifies to the assessor that the homestead occupant satisfies the requirements of 31.33this paragraph. 31.34    Permanently and totally disabled for the purpose of this subdivision means a 31.35condition which is permanent in nature and totally incapacitates the person from working 32.1at an occupation which brings the person an income. The first $32,000 new text begin $50,000 new text end market 32.2value of class 1b property has a net class rate of .45 percent of its market value. The 32.3remaining market value of class 1b property has a class rate using the rates for class 1a or 32.4class 2a property, whichever is appropriate, of similar market value. 32.5    (c) Class 1c property is commercial use real new text begin and personal new text end property that abuts 32.6a lakeshore line new text begin public water as defined in section 103G.005, subdivision 15, new text end and is 32.7devoted to temporary and seasonal residential occupancy for recreational purposes but 32.8not devoted to commercial purposes for more than 250 days in the year preceding the 32.9year of assessment, and that includes a portion used as a homestead by the owner, which 32.10includes a dwelling occupied as a homestead by a shareholder of a corporation that owns 32.11the resort, a partner in a partnership that owns the resort, or a member of a limited liability 32.12company that owns the resort even if the title to the homestead is held by the corporation, 32.13partnership, or limited liability company. For purposes of this clause, property is devoted 32.14to a commercial purpose on a specific day if any portion of the property, excluding the 32.15portion used exclusively as a homestead, is used for residential occupancy and a fee is 32.16charged for residential occupancy. new text begin Class 1c property must contain three or more rental new text end 32.17 new text begin units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, new text end 32.18 new text begin or individual camping site equipped with water and electrical hookups for recreational new text end 32.19 new text begin vehicles. Class 1c property must provide recreational activities such as the rental of ice new text end 32.20 new text begin fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; new text end 32.21 new text begin provide marina services, launch services, or guide services; or sell bait and fishing tackle. new text end 32.22 new text begin Any unit in which the right to use the property is transferred to an individual or entity new text end 32.23 new text begin by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c even new text end 32.24 new text begin though it may remain available for rent. A camping pad offered for rent by a property new text end 32.25 new text begin that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental new text end 32.26 new text begin agreement, as long as the use of the camping pad does not exceed 250 days. new text end The portion of 32.27the property used as a homestead is class 1a property under paragraph (a). The remainder 32.28of the property is classified as follows: the first $500,000 new text begin $600,000 new text end of market value is tier 32.29I, the next $1,700,000 of market value is tier II, and any remaining market value is tier 32.30III. The class rates for class 1c are: tier I, 0.55 new text begin 0.50 new text end percent; tier II, 1.0 percent; and tier 32.31III, 1.25 percent. If a class 1c resort property has any market value in tier III, the entire 32.32property must meet the requirements of subdivision 25, paragraph (d), clause (1), to 32.33qualify for class 1c treatment under this paragraph. new text begin Owners of real and personal property new text end 32.34 new text begin devoted to temporary and seasonal residential occupancy for recreation purposes in which new text end 32.35 new text begin all or a portion of the property was devoted to commercial purposes for not more than 250 new text end 32.36 new text begin days in the year preceding the year of assessment desiring classification as class 1c, must new text end 33.1 new text begin submit a declaration to the assessor designating the cabins or units occupied for 250 days new text end 33.2 new text begin or less in the year preceding the year of assessment by January 15 of the assessment year. new text end 33.3 new text begin Those cabins or units and a proportionate share of the land on which they are located must new text end 33.4 new text begin be designated as class 1c as otherwise provided. The remainder of the cabins or units and new text end 33.5 new text begin a proportionate share of the land on which they are located must be designated as class new text end 33.6 new text begin 3a commercial. The owner of property desiring designation as class 1c property must new text end 33.7 new text begin provide guest registers or other records demonstrating that the units for which class 1c new text end 33.8 new text begin designation is sought were not occupied for more than 250 days in the year preceding the new text end 33.9 new text begin assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, new text end 33.10 new text begin (3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility new text end 33.11 new text begin operated on a commercial basis not directly related to temporary and seasonal residential new text end 33.12 new text begin occupancy for recreation purposes does not qualify for class 1c. new text end 33.13    (d) Class 1d property includes structures that meet all of the following criteria: 33.14    (1) the structure is located on property that is classified as agricultural property under 33.15section 273.13, subdivision 23; 33.16    (2) the structure is occupied exclusively by seasonal farm workers during the time 33.17when they work on that farm, and the occupants are not charged rent for the privilege of 33.18occupying the property, provided that use of the structure for storage of farm equipment 33.19and produce does not disqualify the property from classification under this paragraph; 33.20    (3) the structure meets all applicable health and safety requirements for the 33.21appropriate season; and 33.22    (4) the structure is not salable as residential property because it does not comply 33.23with local ordinances relating to location in relation to streets or roads. 33.24    The market value of class 1d property has the same class rates as class 1a property 33.25under paragraph (a). 33.26 new text begin EFFECTIVE DATE. new text end new text begin The portion of this section modifying the market value and new text end 33.27 new text begin class rate of the first tier of class 1c resorts and striking the language relating to class 1b new text end 33.28 new text begin veterans' homesteads is effective for taxes payable in 2008 and thereafter. The remaining new text end 33.29 new text begin portion of this section relating to class 1c resorts is effective for taxes payable in 2009 new text end 33.30 new text begin and thereafter. new text end 33.31    Sec. 19. Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read: 33.32    Subd. 23. Class 2. (a) Class 2a property is agricultural land including any 33.33improvements that is homesteaded. The market value of the house and garage and 33.34immediately surrounding one acre of land has the same class rates as class 1a property 33.35under subdivision 22. The value of the remaining land including improvements up to the 34.1first tier valuation limit of agricultural homestead property has a net class rate of 0.55 new text begin 0.5 new text end 34.2percent of market value. The remaining property over the first tier has a class rate of one 34.3percent of market value. For purposes of this subdivision, the "first tier valuation limit of 34.4agricultural homestead property" and "first tier" means the limit certified under section 34.5273.11 , subdivision 23. 34.6    (b) Class 2b property is (1) new text begin unplatted new text end real estate, rural in character and used 34.7exclusively for growing trees for timber, lumber, and wood and wood products; (2) 34.8real estate new text begin , new text end that is not improved with a structure and is used exclusively for growing 34.9trees for timber, lumber, and wood and wood products, if the owner has participated 34.10or is participating in a cost-sharing program for afforestation, reforestation, or timber 34.11stand improvement on that particular property, administered or coordinated by the 34.12commissioner of natural resources; (3) new text begin and that consists of at least ten acres, including new text end 34.13 new text begin land used for growing trees for timber, lumber, and wood and wood products, but not new text end 34.14 new text begin including land used for agricultural purposes, provided that the presence of a minor, new text end 34.15 new text begin ancillary nonresidential structure does not disqualify property from classification under new text end 34.16 new text begin this clause, new text end new text begin (2) new text end real estate that is nonhomestead agricultural land; or (4) new text begin (3) new text end a landing area 34.17or public access area of a privately owned public use airport. Class 2b property has a net 34.18class rate of one percent of market value new text begin , except that property described in clause (1) new text end 34.19 new text begin has a net class rate of .65 percent if it consists of no more than 1,920 acres and is being new text end 34.20 new text begin managed under a forest management plan that meets the requirements of chapter 290C, new text end 34.21 new text begin but is not enrolled in the sustainable forest resource management incentive program, new text end 34.22 new text begin provided that the owner of the property must apply to the assessor annually to receive the new text end 34.23 new text begin reduced class rate and provide the information required by the assessor to verify that new text end 34.24 new text begin the property qualifies for the reduced rate new text end . 34.25    (c) Agricultural land as used in this section means contiguous acreage of ten acres or 34.26more, used during the preceding year for agricultural purposes. "Agricultural purposes" as 34.27used in this section means the raising or cultivation of agricultural products. "Agricultural 34.28purposes" also includes enrollment in the Reinvest in Minnesota program under sections 34.29103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public 34.30Law 99-198 if the property was classified as agricultural (i) under this subdivision for 34.31the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage 34.32on the same parcel, or contiguous acreage on an immediately adjacent parcel under the 34.33same ownership, may also qualify as agricultural land, but only if it is pasture, timber, 34.34waste, unusable wild land, or land included in state or federal farm programs. Agricultural 34.35classification for property shall be determined excluding the house, garage, and 35.1immediately surrounding one acre of land, and shall not be based upon the market value of 35.2any residential structures on the parcel or contiguous parcels under the same ownership. 35.3    (d) Real estate, excluding the house, garage, and immediately surrounding one acre 35.4of land, of less than ten acres which is exclusively and intensively used for raising or 35.5cultivating agricultural products, shall be considered as agricultural land. 35.6    Land shall be classified as agricultural even if all or a portion of the agricultural use 35.7of that property is the leasing to, or use by another person for agricultural purposes. 35.8    Classification under this subdivision is not determinative for qualifying under 35.9section 273.111. 35.10    The property classification under this section supersedes, for property tax purposes 35.11only, any locally administered agricultural policies or land use restrictions that define 35.12minimum or maximum farm acreage. 35.13    (e) The term "agricultural products" as used in this subdivision includes production 35.14for sale of: 35.15    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 35.16animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 35.17bees, and apiary products by the owner; 35.18    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned 35.19for agricultural use; 35.20    (3) the commercial boarding of horses if the boarding is done in conjunction with 35.21raising or cultivating agricultural products as defined in clause (1); 35.22    (4) property which is owned and operated by nonprofit organizations used for 35.23equestrian activities, excluding racing; 35.24    (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed 35.25under section 97A.115; 35.26    (6) insects primarily bred to be used as food for animals; 35.27    (7) trees, grown for sale as a crop, new text begin including short rotation woody crops, new text end and not 35.28sold for timber, lumber, wood, or wood products; and 35.29    (8) maple syrup taken from trees grown by a person licensed by the Minnesota 35.30Department of Agriculture under chapter 28A as a food processor. 35.31    (f) If a parcel used for agricultural purposes is also used for commercial or industrial 35.32purposes, including but not limited to: 35.33    (1) wholesale and retail sales; 35.34    (2) processing of raw agricultural products or other goods; 35.35    (3) warehousing or storage of processed goods; and 36.1    (4) office facilities for the support of the activities enumerated in clauses (1), (2), 36.2and (3), 36.3the assessor shall classify the part of the parcel used for agricultural purposes as class 36.41b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 36.5use. The grading, sorting, and packaging of raw agricultural products for first sale is 36.6considered an agricultural purpose. A greenhouse or other building where horticultural 36.7or nursery products are grown that is also used for the conduct of retail sales must be 36.8classified as agricultural if it is primarily used for the growing of horticultural or nursery 36.9products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 36.10those products. Use of a greenhouse or building only for the display of already grown 36.11horticultural or nursery products does not qualify as an agricultural purpose. 36.12    The assessor shall determine and list separately on the records the market value of 36.13the homestead dwelling and the one acre of land on which that dwelling is located. If any 36.14farm buildings or structures are located on this homesteaded acre of land, their market 36.15value shall not be included in this separate determination. 36.16    (g) To qualify for classification under paragraph (b), clause (4), a privately owned 36.17public use airport must be licensed as a public airport under section 360.018. For purposes 36.18of paragraph (b), clause (4), "landing area" means that part of a privately owned public use 36.19airport properly cleared, regularly maintained, and made available to the public for use by 36.20aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing 36.21or navigational aids. A landing area also includes land underlying both the primary surface 36.22and the approach surfaces that comply with all of the following: 36.23    (i) the land is properly cleared and regularly maintained for the primary purposes of 36.24the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 36.25facilities for servicing, repair, or maintenance of aircraft is not included as a landing area; 36.26    (ii) the land is part of the airport property; and 36.27    (iii) the land is not used for commercial or residential purposes. 36.28The land contained in a landing area under paragraph (b), clause (4), must be described 36.29and certified by the commissioner of transportation. The certification is effective until 36.30it is modified, or until the airport or landing area no longer meets the requirements of 36.31paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area" 36.32means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival 36.33and departure building in connection with the airport. 36.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2007, payable new text end 36.35 new text begin in 2008, and thereafter. new text end 37.1    Sec. 20. Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read: 37.2    Subd. 24. Class 3. (a) Commercial and industrial property and utility real and 37.3personal property is class 3a. 37.4    (1) Except as otherwise provided, each parcel of commercial, industrial, or utility 37.5real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent 37.6of the remaining market value. In the case of contiguous parcels of property owned by the 37.7same person or entity, only the value equal to the first-tier value of the contiguous parcels 37.8qualifies for the reduced class rate, except that contiguous parcels owned by the same 37.9person or entity shall be eligible for the first-tier value class rate on each separate business 37.10operated by the owner of the property, provided the business is housed in a separate 37.11structure. For the purposes of this subdivision, the first tier means the first $150,000 of 37.12market value. Real property owned in fee by a utility for transmission line right-of-way 37.13shall be classified at the class rate for the higher tier. 37.14    For purposes of this subdivision, parcels are considered to be contiguous even if 37.15they are separated from each other by a road, street, waterway, or other similar intervening 37.16type of property. Connections between parcels that consist of power lines or pipelines do 37.17not cause the parcels to be contiguous. Property owners who have contiguous parcels of 37.18property that constitute separate businesses that may qualify for the first-tier class rate shall 37.19notify the assessor by July 1, for treatment beginning in the following taxes payable year. 37.20    (2) All Personal property that is: (i) part of an electric generation, transmission, or 37.21distribution system; or (ii) new text begin , including tools, implements, and machinery, has a class rate new text end 37.22 new text begin of 2.5 percent for taxes levied in 2007, payable in 2008, and 3.0 percent for taxes levied new text end 37.23 new text begin in 2008, payable in 2009, and thereafter. new text end 37.24     new text begin (3) Personal property that is either: (i) new text end part of a pipeline system transporting 37.25or distributing water, gas, crude oil, or petroleum products; and (iii) not described in 37.26clause (3), and all new text begin , including tools, implements, and machinery, or (ii) part of an electric new text end 37.27 new text begin transmission or distribution system, including tools, implements, and machinery, has a new text end 37.28 new text begin class rate of 2.15 percent for taxes levied in 2007, payable in 2008, and 2.25 percent for new text end 37.29 new text begin taxes levied in 2008, payable in 2009, and thereafter. new text end 37.30     new text begin (4) new text end railroad operating property has a class rate as provided under clause (1) for 37.31the first tier of market value and the remaining market value. In the case of multiple 37.32parcels in one county that are owned by one person or entity, only one first tier amount 37.33is eligible for the reduced rate. 37.34    (3) The entire market value of personal property that is: (i) tools, implements, and 37.35machinery of an electric generation, transmission, or distribution system; (ii) tools, 37.36implements, and machinery of a pipeline system transporting or distributing water, gas, 38.1crude oil, or petroleum products; or (iii) the new text begin (5) Personal property consisting of new text end mains 38.2and pipes used in the distribution of steam or hot or chilled water for heating or cooling 38.3buildings, has a class rate as provided under clause (1) for the remaining market value 38.4in excess of the first tier. 38.5    (b) Employment property defined in section 469.166, during the period provided 38.6in section 469.170, shall constitute class 3b. The class rates for class 3b property are 38.7determined under paragraph (a). 38.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2007, payable new text end 38.9 new text begin in 2008, and thereafter. new text end 38.10    Sec. 21. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read: 38.11    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 38.12units and used or held for use by the owner or by the tenants or lessees of the owner 38.13as a residence for rental periods of 30 days or more, excluding property qualifying for 38.14class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 38.15than hospitals exempt under section 272.02, and contiguous property used for hospital 38.16purposes, without regard to whether the property has been platted or subdivided. The 38.17market value of class 4a property has a class rate of 1.25 percent. 38.18    (b) Class 4b includes: 38.19    (1) residential real estate containing less than four units that does not qualify as class 38.204bb, other than seasonal residential recreational property; 38.21    (2) manufactured homes not classified under any other provision; 38.22    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 38.23farm classified under subdivision 23, paragraph (b) containing two or three units; and 38.24    (4) unimproved property that is classified residential as determined under subdivision 38.2533. 38.26    The market value of class 4b property has a class rate of 1.25 percent. 38.27    (c) Class 4bb includes: 38.28    (1) nonhomestead residential real estate containing one unit, other than seasonal 38.29residential recreational property; and 38.30    (2) a single family dwelling, garage, and surrounding one acre of property on a 38.31nonhomestead farm classified under subdivision 23, paragraph (b). 38.32    Class 4bb property has the same class rates as class 1a property under subdivision 22. 38.33    Property that has been classified as seasonal residential recreational property at 38.34any time during which it has been owned by the current owner or spouse of the current 38.35owner does not qualify for class 4bb. 39.1    (d) Class 4c property includes: 39.2    (1) except as provided in subdivision 22, paragraph (c), new text begin or subdivision 23, paragraph new text end 39.3 new text begin (b), clause (1), new text end real new text begin and personal new text end property devoted to temporary and seasonal residential 39.4occupancy for recreation purposes, including real new text begin and personal new text end property devoted to 39.5temporary and seasonal residential occupancy for recreation purposes and not devoted to 39.6commercial purposes for more than 250 days in the year preceding the year of assessment. 39.7For purposes of this clause, property is devoted to a commercial purpose on a specific 39.8day if any portion of the property is used for residential occupancy, and a fee is charged 39.9for residential occupancy. new text begin Class 4c property must contain three or more rental units. A new text end 39.10 new text begin "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual new text end 39.11 new text begin camping site equipped with water and electrical hookups for recreational vehicles. Class new text end 39.12 new text begin 4c property must provide recreational activities such as renting ice fishing houses, boats new text end 39.13 new text begin and motors, snowmobiles, downhill or cross-country ski equipment; provide marina new text end 39.14 new text begin services, launch services, or guide services; or sell bait and fishing tackle. A camping new text end 39.15 new text begin pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c new text end 39.16 new text begin regardless of the term of the rental agreement, as long as the use of the camping pad new text end 39.17 new text begin does not exceed 250 days. new text end In order for a property to be classified as class 4c, seasonal 39.18residential recreational for commercial purposes, at least 40 percent of the annual gross 39.19lodging receipts related to the property must be from business conducted during 90 39.20consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests 39.21during the year must be for periods of at least two consecutive nights; or (ii) at least 20 39.22percent of the annual gross receipts must be from charges for rental of fish houses, boats 39.23and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina 39.24services, launch services, and guide services, or the sale of bait and fishing tackle. For 39.25purposes of this determination, a paid booking of five or more nights shall be counted as 39.26two bookings. Class 4c also includes commercial use real property used exclusively 39.27for recreational purposes in conjunction with class 4c property devoted to temporary 39.28and seasonal residential occupancy for recreational purposes, up to a total of two acres, 39.29provided the property is not devoted to commercial recreational use for more than 250 39.30days in the year preceding the year of assessment and is located within two miles of the 39.31class 4c property with which it is used. Owners of real new text begin and personal new text end property devoted to 39.32temporary and seasonal residential occupancy for recreation purposes and all or a portion 39.33of which was devoted to commercial purposes for not more than 250 days in the year 39.34preceding the year of assessment desiring classification as class 1c or 4c, must submit a 39.35declaration to the assessor designating the cabins or units occupied for 250 days or less in 39.36the year preceding the year of assessment by January 15 of the assessment year. Those 40.1cabins or units and a proportionate share of the land on which they are located will new text begin must new text end be 40.2designated class 1c or 4c as otherwise provided. The remainder of the cabins or units and 40.3a proportionate share of the land on which they are located will be designated as class 3a. 40.4The owner of property desiring designation as class 1c or 4c property must provide guest 40.5registers or other records demonstrating that the units for which class 1c or 4c designation 40.6is sought were not occupied for more than 250 days in the year preceding the assessment if 40.7so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, 40.8 new text begin (4) conference center or meeting room, new text end and (4) new text begin (5) new text end other nonresidential facility operated 40.9on a commercial basis not directly related to temporary and seasonal residential occupancy 40.10for recreation purposes shall new text begin does new text end not qualify for class 1c or 4c; 40.11    (2) qualified property used as a golf course if: 40.12    (i) it is open to the public on a daily fee basis. It may charge membership fees or 40.13dues, but a membership fee may not be required in order to use the property for golfing, 40.14and its green fees for golfing must be comparable to green fees typically charged by 40.15municipal courses; and 40.16    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 40.17    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 40.18with the golf course is classified as class 3a property; 40.19    (3) real property up to a maximum of one acre new text begin three acres new text end of land owned new text begin and used new text end 40.20by a nonprofit community service oriented organization; provided that new text begin and that is not used new text end 40.21 new text begin for residential purposes on either a temporary or permanent basis, qualifies for class 4c new text end 40.22 new text begin provided that it meets either of the following: new text end 40.23     new text begin (i) new text end the property is not used for a revenue-producing activity for more than six days 40.24in the calendar year preceding the year of assessment and the property is not used for 40.25residential purposes on either a temporary or permanent basis new text begin ; or new text end 40.26     new text begin (ii) the organization makes annual charitable contributions and donations at least new text end 40.27 new text begin equal to the property's previous year's property taxes and the property is allowed to be new text end 40.28 new text begin used for public and community meetings or events for no charge, as appropriate to the new text end 40.29 new text begin size of the facility new text end . 40.30    For purposes of this clause, 40.31     new text begin (A) "charitable contributions and donations" has the same meaning as lawful new text end 40.32 new text begin gambling purposes under section 349.12, subdivision 25, excluding those purposes new text end 40.33 new text begin relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; new text end 40.34     new text begin (B) "property taxes" excludes the state general tax; new text end 40.35     new text begin (C) new text end a "nonprofit community service oriented organization" means any corporation, 40.36society, association, foundation, or institution organized and operated exclusively for 41.1charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 41.2federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue 41.3Code of 1986, as amended through December 31, 1990. For purposes of this clause, new text begin ; and new text end 41.4     new text begin (D) new text end "revenue-producing activities" shall include but not be limited to property or that 41.5portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 41.6liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 41.7alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 41.8insurance business, or office or other space leased or rented to a lessee who conducts a 41.9for-profit enterprise on the premises. 41.10Any portion of the property new text begin qualifying under item (i) new text end which is used for revenue-producing 41.11activities for more than six days in the calendar year preceding the year of assessment 41.12shall be assessed as class 3a. The use of the property for social events open exclusively 41.13to members and their guests for periods of less than 24 hours, when an admission is 41.14not charged nor any revenues are received by the organization shall not be considered a 41.15revenue-producing activity; new text begin . new text end 41.16     new text begin The organization shall maintain records of its charitable contributions and donations new text end 41.17 new text begin and of public meetings and events held on the property and make them available upon new text end 41.18 new text begin request any time to the assessor to ensure eligibility. An organization meeting the new text end 41.19 new text begin requirement under item (ii) must file an application by May 1 with the assessor for new text end 41.20 new text begin eligibility for the current year's assessment. The commissioner shall prescribe a uniform new text end 41.21 new text begin application form and instructions; new text end 41.22    (4) postsecondary student housing of not more than one acre of land that is owned by 41.23a nonprofit corporation organized under chapter 317A and is used exclusively by a student 41.24cooperative, sorority, or fraternity for on-campus housing or housing located within two 41.25miles of the border of a college campus; 41.26    (5) manufactured home parks as defined in section 327.14, subdivision 3; 41.27    (6) real property that is actively and exclusively devoted to indoor fitness, health, 41.28social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 41.29and is located within the metropolitan area as defined in section 473.121, subdivision 2; 41.30    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt 41.31under section 272.01, subdivision 2, and the land on which it is located, provided that: 41.32    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan 41.33Airports Commission, or group thereof; and 41.34    (ii) the land lease, or any ordinance or signed agreement restricting the use of the 41.35leased premise, prohibits commercial activity performed at the hangar. 42.1    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 42.2be filed by the new owner with the assessor of the county where the property is located 42.3within 60 days of the sale; 42.4    (8) a privately owned noncommercial aircraft storage hangar not exempt under 42.5section 272.01, subdivision 2, and the land on which it is located, provided that: 42.6    (i) the land abuts a public airport; and 42.7    (ii) the owner of the aircraft storage hangar provides the assessor with a signed 42.8agreement restricting the use of the premises, prohibiting commercial use or activity 42.9performed at the hangar; and 42.10    (9) residential real estate, a portion of which is used by the owner for homestead 42.11purposes, and that is also a place of lodging, if all of the following criteria are met: 42.12    (i) rooms are provided for rent to transient guests that generally stay for periods 42.13of 14 or fewer days; 42.14    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated 42.15in the basic room rate; 42.16    (iii) meals are not provided to the general public except for special events on fewer 42.17than seven days in the calendar year preceding the year of the assessment; and 42.18    (iv) the owner is the operator of the property. 42.19The market value subject to the 4c classification under this clause is limited to five rental 42.20units. Any rental units on the property in excess of five, must be valued and assessed as 42.21class 3a. The portion of the property used for purposes of a homestead by the owner must 42.22be classified as class 1a property under subdivision 22. 42.23    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 42.24parcel of seasonal residential recreational property not used for commercial purposes has 42.25the same class rates as class 4bb property, (ii) manufactured home parks assessed under 42.26clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 42.27residential recreational property has a class rate of one percent for the first $500,000 of 42.28market value, and 1.25 percent for the remaining market value, (iv) the market value of 42.29property described in clause (4) has a class rate of one percent, (v) the market value of 42.30property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that 42.31portion of the market value of property in clause (9) qualifying for class 4c property 42.32has a class rate of 1.25 percent. 42.33    (e) Class 4d property is qualifying low-income rental housing certified to the assessor 42.34by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 42.35of the units in the building qualify as low-income rental housing units as certified under 42.36section 273.128, subdivision 3, only the proportion of qualifying units to the total number 43.1of units in the building qualify for class 4d. The remaining portion of the building shall be 43.2classified by the assessor based upon its use. Class 4d also includes the same proportion of 43.3land as the qualifying low-income rental housing units are to the total units in the building. 43.4For all properties qualifying as class 4d, the market value determined by the assessor must 43.5be based on the normal approach to value using normal unrestricted rents. 43.6    Class 4d property has a class rate of 0.75 percent. 43.7 new text begin EFFECTIVE DATE. new text end new text begin The portion of this section relating to class 4c resorts in new text end 43.8 new text begin paragraph (d), clause (1), is effective for assessment year 2008 and thereafter, for taxes new text end 43.9 new text begin payable in 2009 and thereafter. The portion of this section relating to nonprofit community new text end 43.10 new text begin service oriented organizations is effective for assessment year 2007 and thereafter, for new text end 43.11 new text begin taxes payable in 2008 and thereafter, except that the application date in paragraph (d), new text end 43.12 new text begin clause (3), item (ii), for the 2007 assessment is extended to September 1, 2007. new text end 43.13    Sec. 22. Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read: 43.14    Subd. 33. Classification of unimproved property. (a) All real property that is not 43.15improved with a structure must be classified according to its current use. 43.16    (b) new text begin Except as provided in subdivision 23, paragraph (b), clause (1), new text end real property that 43.17is not improved with a structure and for which there is no identifiable current use must be 43.18classified according to its highest and best use permitted under the local zoning ordinance. 43.19If the ordinance permits more than one use, the land must be classified according to the 43.20highest and best use permitted under the ordinance. If no such ordinance exists, the 43.21assessor shall consider the most likely potential use of the unimproved land based upon 43.22the use made of surrounding land or land in proximity to the unimproved land. 43.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2007 and new text end 43.24 new text begin thereafter, for taxes payable in 2008 and thereafter. new text end 43.25    Sec. 23. Minnesota Statutes 2006, section 273.13, is amended by adding a subdivision 43.26to read: 43.27     new text begin Subd. 34. new text end new text begin Homestead of disabled veteran. new text end new text begin (a) All or a portion of the market value new text end 43.28 new text begin of property qualifying for homestead classification under subdivision 22 or 23 is excluded new text end 43.29 new text begin in determining the property's taxable market value if it serves as the homestead of a new text end 43.30 new text begin military veteran, as defined in section 197.447, who has a service-connected disability of new text end 43.31 new text begin 70 percent or more. To qualify for exclusion under this subdivision, the veteran must have new text end 43.32 new text begin been honorably discharged from the United States armed forces, as indicated by United new text end 43.33 new text begin States Government Form DD214 or other official military discharge papers, and must be new text end 44.1 new text begin certified by the United States Veterans Administration as having a service-connected new text end 44.2 new text begin disability. new text end 44.3     new text begin (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is new text end 44.4 new text begin excluded, except as provided in clause (2); and new text end 44.5     new text begin (2) for a total (100 percent) and permanent disability, $300,000 of market value is new text end 44.6 new text begin excluded. new text end 44.7     new text begin (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), new text end 44.8 new text begin clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the new text end 44.9 new text begin spouse holds the legal or beneficial title to the homestead and permanently resides there, new text end 44.10 new text begin the exclusion shall carry over to the benefit of the veteran's spouse until such time as the new text end 44.11 new text begin spouse sells, transfers, or otherwise disposes of the property. new text end 44.12     new text begin (d) In the case of an agricultural homestead, only the portion of the property new text end 44.13 new text begin consisting of the house and garage and immediately surrounding one acre of land qualifies new text end 44.14 new text begin for the valuation exclusion under this subdivision. new text end 44.15     new text begin (e) A property qualifying for a valuation exclusion under this subdivision is not new text end 44.16 new text begin eligible for the credit under section 273.1384, subdivision 1. new text end 44.17     new text begin (f) To qualify for a valuation exclusion under this subdivision a property owner must new text end 44.18 new text begin apply to the assessor by July 1 of each assessment year, except that an annual reapplication new text end 44.19 new text begin is not required once a property has been accepted for a valuation exclusion under paragraph new text end 44.20 new text begin (b), clause (2), and the property continues to qualify until there is a change in ownership. new text end 44.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2007 and new text end 44.22 new text begin thereafter, for taxes payable in 2008 and thereafter. new text end 44.23    Sec. 24. Minnesota Statutes 2006, section 275.025, subdivision 3, is amended to read: 44.24    Subd. 3. Seasonal residential recreational tax capacity. For the purposes of this 44.25section, "seasonal residential recreational tax capacity" means the tax capacity of tier III of 44.26class 1c under section 273.13, subdivision 22, and all class 4c(1) new text begin and 4c(3)(ii) new text end property 44.27under section 273.13, subdivision 25, except that the first $76,000 of market value of each 44.28noncommercial class 4c(1) property has a tax capacity for this purpose equal to 40 percent 44.29of its tax capacity under section 273.13. 44.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2008 and new text end 44.31 new text begin thereafter. new text end 44.32    Sec. 25. Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision 44.33to read: 45.1     new text begin Subd. 6c. new text end new text begin Joint public hearing; nonmetropolitan county, cities, and school new text end 45.2 new text begin districts. new text end new text begin (a) Notwithstanding any other provision of law, the county board may hold a new text end 45.3 new text begin joint hearing with the governing bodies of all taxing authorities located wholly or partially new text end 45.4 new text begin within the county that are required to hold a public hearing under this section, excluding new text end 45.5 new text begin special taxing districts. The primary purpose of the joint hearing is for taxpayer efficiency new text end 45.6 new text begin by allowing taxpayers to come to a single public hearing to discuss the budgets and new text end 45.7 new text begin proposed property tax levies of most taxing authorities that impact the taxes on their new text end 45.8 new text begin property. new text end 45.9     new text begin (b) This subdivision applies only to counties located outside the metropolitan area new text end 45.10 new text begin as defined under section new text end new text begin , subdivision 2. If a city or school district is located new text end 45.11 new text begin partially within the metropolitan area, that taxing jurisdiction may participate in its new text end 45.12 new text begin nonmetropolitan county's joint hearing, if it so chooses. new text end 45.13     new text begin (c) Upon the adoption of a resolution by the county board to hold a joint public new text end 45.14 new text begin hearing, the county shall notify each city with a population over 500 and each school new text end 45.15 new text begin district located wholly or partially within the county of its intention to hold the joint new text end 45.16 new text begin hearing and ask each of the taxing authorities if it would like to participate. Participation new text end 45.17 new text begin is voluntary, and participation in the joint hearing is in lieu of the requirement for the new text end 45.18 new text begin governing body to hold a separate public hearing under subdivision 6. If a participating new text end 45.19 new text begin city or school district is located in more than one county, the hearing under this subdivision new text end 45.20 new text begin is in lieu of the requirement to hold a separate public hearing if 75 percent or more new text end 45.21 new text begin of that city or school district's previous year's net tax capacity is in the county where new text end 45.22 new text begin the hearing is held. new text end 45.23     new text begin (d) The initial joint hearing must be held on the first Thursday in December. The new text end 45.24 new text begin county may hold an additional joint hearing on another date before December 20 if the new text end 45.25 new text begin majority of the participating taxing authorities want an additional hearing. new text end 45.26     new text begin The county board shall obtain a meeting space to hold the joint hearing, preferably new text end 45.27 new text begin at a public building such as the courthouse, school, or community center. The location new text end 45.28 new text begin shall be as centrally located within the county as possible. The meeting shall generally be new text end 45.29 new text begin structured in the following general manner: new text end 45.30     new text begin (1) 30 to 60 minutes must be devoted to discussion of the county's budget and levy; new text end 45.31     new text begin (2) 30 to 60 minutes must be devoted to discussion of the city's budget and levy, new text end 45.32 new text begin with each city's discussion held in a separate room, preferably in the same building; new text end 45.33     new text begin (3) 30 to 60 minutes must be devoted to discussion of the school district's levy, new text end 45.34 new text begin with each school district's discussion held in a separate room, preferably in the same new text end 45.35 new text begin building; and new text end 46.1     new text begin (4) during the last 30 minutes the governing bodies must reassemble in a joint new text end 46.2 new text begin meeting to entertain any follow-up questions that have arisen from the separate discussions. new text end 46.3     new text begin The county shall attempt to keep the total public hearing to within three hours. new text end 46.4     new text begin (e) In lieu of the public advertisement requirement in subdivision 5a, the county shall new text end 46.5 new text begin have a single advertisement listing the county, each city with a population of over 500, and new text end 46.6 new text begin each school district participating in the joint public hearing listing. Any taxing authority new text end 46.7 new text begin participating under this subdivision is exempt from the separate public advertisement new text end 46.8 new text begin requirement under subdivision 5a. The cost of the joint hearing advertisement shall be new text end 46.9 new text begin apportioned in the same manner provided in subdivision 4. The notice must be published new text end 46.10 new text begin not less than two business days nor more than six business days before the hearing. The new text end 46.11 new text begin newspaper selected must be one of general interest and readership in the county, and not new text end 46.12 new text begin one of limited subject matter. The advertisement must appear in a newspaper that is new text end 46.13 new text begin published at least once per week. The advertisement must be in the following form: new text end 46.14 new text begin "NOTICE OF JOINT PUBLIC HEARING new text end 46.15 new text begin PROPOSED TOTAL PROPERTY TAXES new text end 46.16 new text begin FOR PARTICIPATING TAXING AUTHORITIES new text end 46.17 new text begin The property tax amounts below compare that portion of the current budget levied in new text end 46.18 new text begin property taxes in the county, cities, and school districts for (year) with the property new text end 46.19 new text begin taxes the county, cities, and school districts propose to collect in (year) for those taxing new text end 46.20 new text begin authorities participating in the joint public hearing. new text end 46.21 46.22 new text begin Taxing Authority new text end new text begin (Year) Property new text end new text begin Taxes new text end new text begin Proposed (Year) new text end new text begin Property Taxes new text end new text begin Change (Year) - new text end new text begin (Year) new text end 46.23 new text begin $....... new text end new text begin $....... new text end new text begin $....... new text end new text begin ...% new text end 46.24 new text begin $....... new text end new text begin $....... new text end new text begin $....... new text end new text begin ...% new text end 46.25 new text begin $....... new text end new text begin $....... new text end new text begin $....... new text end new text begin ...% new text end 46.26 new text begin ATTEND THE JOINT PUBLIC HEARING new text end 46.27 new text begin All residents are invited to attend the joint public hearing of the county/cities/school new text end 46.28 new text begin districts to express your opinions on the proposed amount of (year) property taxes. The new text end 46.29 new text begin hearing will be held on: new text end 46.30 new text begin (Month/Day/Year/Time) new text end 46.31 new text begin (Location/Address) new text end 46.32 new text begin If the discussion cannot be completed, and another hearing is scheduled, a time and place new text end 46.33 new text begin for that hearing will be announced at this hearing. You are also invited to send your new text end 46.34 new text begin written comments to the county auditor. If the comments relate to the city or school new text end 46.35 new text begin district's levy, please identify that on the envelope so the county auditor can direct the new text end 46.36 new text begin correspondence to the right jurisdiction." new text end 47.1     new text begin The formal adoption of the taxing authority's levy must not be made at the joint new text end 47.2 new text begin public hearing held under this subdivision. The formal adoption must be made at one of new text end 47.3 new text begin the regularly scheduled meetings of the taxing authority's governing body. However, the new text end 47.4 new text begin property tax levy amount that is subsequently adopted cannot exceed the amount shown to new text end 47.5 new text begin taxpayers at the joint public hearing. new text end 47.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for hearings held in 2007 and new text end 47.7 new text begin thereafter. new text end 47.8    Sec. 26. Minnesota Statutes 2006, section 275.066, is amended to read: 47.9275.066 SPECIAL TAXING DISTRICTS; DEFINITION. 47.10    For the purposes of property taxation and property tax state aids, the term "special 47.11taxing districts" includes the following entities: 47.12    (1) watershed districts under chapter 103D; 47.13    (2) sanitary districts under sections 115.18 to 115.37; 47.14    (3) regional sanitary sewer districts under sections 115.61 to 115.67; 47.15    (4) regional public library districts under section 134.201; 47.16    (5) park districts under chapter 398; 47.17    (6) regional railroad authorities under chapter 398A; 47.18    (7) hospital districts under sections 447.31 to 447.38; 47.19    (8) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 458A.15; 47.20    (9) Duluth Transit Authority under sections 458A.21 to 458A.37; 47.21    (10) regional development commissions under sections 462.381 to 462.398; 47.22    (11) housing and redevelopment authorities under sections 469.001 to 469.047; 47.23    (12) port authorities under sections 469.048 to 469.068; 47.24    (13) economic development authorities under sections 469.090 to 469.1081; 47.25    (14) Metropolitan Council under sections 473.123 to 473.549; 47.26    (15) Metropolitan Airports Commission under sections 473.601 to 473.680; 47.27    (16) Metropolitan Mosquito Control Commission under sections 473.701 to 473.716; 47.28    (17) Morrison County Rural Development Financing Authority under Laws 1982, 47.29chapter 437, section 1; 47.30    (18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section 47.316; 47.32    (19) East Lake County Medical Clinic District under Laws 1989, chapter 211, 47.33sections 1 to 6; 48.1    (20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article 48.25, section 39; 48.3    (21) Middle Mississippi River Watershed Management Organization under sections 48.4103B.211 and 103B.241; 48.5    (22) emergency medical services special taxing districts under section 144F.01; 48.6    (23) a county levying under the authority of section 103B.241, 103B.245, or 48.7103B.251 ; 48.8    (24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home 48.9under Laws 2003, First Special Session chapter 21, article 4, section 12; and 48.10    (25) new text begin an airport authority created under section 360.0426; and new text end 48.11     new text begin (26) new text end any other political subdivision of the state of Minnesota, excluding counties, 48.12school districts, cities, and towns, that has the power to adopt and certify a property tax 48.13levy to the county auditor, as determined by the commissioner of revenue. 48.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2007, payable new text end 48.15 new text begin in 2008, and thereafter. new text end 48.16    Sec. 27. Minnesota Statutes 2006, section 278.05, subdivision 6, is amended to read: 48.17    Subd. 6. Dismissal of petition; exclusion of certain evidence. (a) new text begin In cases where new text end 48.18 new text begin the petitioner contests the valuation of income-producing property, new text end information, including 48.19income and expense figures new text begin in the form of (1) year-end financial statements for the new text end 48.20 new text begin year prior to the assessment date, (2) year-end financial statements for the year of the new text end 48.21 new text begin assessment date, and (3) rent rolls on the assessment date including tenant name, lease start new text end 48.22 new text begin and end dates, option terms, base rent, square footage leased and vacant space new text end , verified net 48.23rentable areas new text begin in the form of net rentable square footage of the building or buildings new text end , and 48.24anticipated income and expenses new text begin in the form of proposed budgets for the year subsequent new text end 48.25 new text begin to the year of the assessment date new text end , for income-producing property must be provided to 48.26the county assessor no later than 60 days after the applicable filing deadline contained 48.27in section 278.01, subdivision 1 or 4. Failure to provide the information required in this 48.28paragraph shall result in the dismissal of the petition, unless (1) the failure to provide it was 48.29due to the unavailability of the evidence at the time that the information was due, or (2) 48.30the petitioner was not aware of or informed of the requirement to provide the information. 48.31If the petitioner proves that the requirements under clause (2) are met, the petitioner has 48.32an additional 30 days to provide the information from the time the petitioner became 48.33aware of or was informed of the requirement to provide the information, otherwise the 48.34petition shall be dismissed. 49.1    (b) Provided that the information as contained in paragraph (a) is timely submitted to 49.2the county assessor, the county assessor shall furnish the petitioner at least five days before 49.3the hearing under this chapter with the property's appraisal, if any, which will be presented 49.4to the court at the hearing. The petitioner shall furnish to the county assessor at least five 49.5days before the hearing under this chapter with the property's appraisal, if any, which 49.6will be presented to the court at the hearing. An appraisal of the petitioner's property 49.7done by or for the county shall not be admissible as evidence if the county assessor does 49.8not comply with the provisions in this paragraph. The petition shall be dismissed if the 49.9petitioner does not comply with the provisions in this paragraph. 49.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for petitions filed on or after July new text end 49.11 new text begin 1, 2007. new text end 49.12    Sec. 28. Minnesota Statutes 2006, section 279.37, subdivision 1a, is amended to read: 49.13    Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property 49.14which was classified class 3a, for the previous year's assessment and had a total market 49.15value of $200,000 new text begin $500,000 new text end or less for that same assessment shall be eligible to be 49.16composed into a confession of judgment. Property qualifying under this subdivision 49.17shall be subject to the same provisions as provided in this section except as provided 49.18in paragraphs (b) to (d). 49.19    (b) Current year taxes and penalty due at the time the confession of judgment 49.20is entered must be paid. 49.21    (c) The down payment must include all special assessments due in the current tax 49.22year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties, 49.23and interest accrued against the parcel. The balance remaining is payable in four equal 49.24annual installments. 49.25    (d) The amounts entered in judgment bear interest at the rate provided in section 49.26279.03, subdivision 1a , commencing with the date the judgment is entered. The interest 49.27rate is subject to change each year on the unpaid balance in the manner provided in section 49.28279.03, subdivision 1a . 49.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for confessions of judgment entered new text end 49.30 new text begin into July 1, 2007, and thereafter. new text end 49.31    Sec. 29. Minnesota Statutes 2006, section 280.39, is amended to read: 49.32280.39 DELINQUENT TAXES MAY BE PAID IN INVERSE ORDER. 50.1    In any case where taxes for two or more years are delinquent against a parcel of land, 50.2such taxes for one or more entire years, if held by the state, may be paid in the inverse 50.3order to that in which the taxes were levied, with accrued penalties, interest, and costs 50.4upon the taxes so paid, without payment of the taxes for the first of such years; provided, 50.5that such payment shall not affect the lien of any unpaid taxes or tax judgment. 50.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 50.7    Sec. 30. Minnesota Statutes 2006, section 289A.08, subdivision 13, is amended to read: 50.8    Subd. 13. Long and short forms; local use tax instructions new text begin ; property tax refund new text end 50.9 new text begin information new text end . new text begin (a) new text end The commissioner shall provide a long form individual income tax 50.10return and may provide a short form individual income tax return. The returns shall be in 50.11a form that is consistent with the provisions of chapter 290, notwithstanding any other 50.12law to the contrary. The nongame wildlife checkoff provided in section 290.431 and the 50.13dependent care credit provided in section 290.067 must be included on the short form. 50.14     new text begin (b) new text end The commissioner must provide information on local use taxes in the individual 50.15income tax instruction booklet. The commissioner must provide this information in the 50.16same section of the booklet that provides information on the state use tax. 50.17     new text begin (c) The commissioner must refer to the property tax refunds allowed under chapter new text end 50.18 new text begin 290A on the front cover of the individual income tax instruction booklet, as well as new text end 50.19 new text begin information within the booklet on income eligibility for the homestead and renter refunds, new text end 50.20 new text begin and maximum refund amounts allowed in the current year. new text end 50.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 50.22    Sec. 31. Minnesota Statutes 2006, section 290C.07, is amended to read: 50.23290C.07 CALCULATION OF INCENTIVE PAYMENT. 50.24    An approved claimant under the sustainable forest incentive program is eligible to 50.25receive an annual payment. The payment shall equal the greater of: 50.26    (1) the difference between the property tax that would be paid on the land using the 50.27previous year's statewide average total township tax rate and the class rate for class 2b 50.28timberland under section 273.13, subdivision 23, paragraph (b), if the land were valued 50.29at (i) the average statewide timberland market value per acre calculated under section 50.30290C.06 , and (ii) the average statewide timberland current use value per acre calculated 50.31under section 290C.02, subdivision 5; new text begin or new text end 50.32    (2) two-thirds of the property tax amount determined by using the previous year's 50.33statewide average total township tax rate, the estimated market value per acre as calculated 51.1in section 290C.06, and the class rate for 2b timberland under section 273.13, subdivision 51.223 , paragraph (b); or 51.3    (3) $1.50 new text begin , provided that the payment shall be no less than $5 new text end per acre for each acre 51.4enrolled in the sustainable forest incentive program. 51.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for payments made after June 30, new text end 51.6 new text begin 2007. new text end 51.7    Sec. 32. Minnesota Statutes 2006, section 360.031, is amended to read: 51.8360.031 DEFINITION OF MUNICIPALITY. 51.9    For the purposes of sections 360.031 to 360.045, inclusive (except section 360.042), 51.10only, "municipality" means any county, city, or town new text begin , or airport authority new text end of this state. 51.11    Sec. 33. new text begin [360.0425] GENERAL POWERS OF AUTHORITY. new text end 51.12     new text begin An airport authority created under section 360.0426 has all the powers granted a new text end 51.13 new text begin municipality under sections 360.032 to 360.046. new text end 51.14    Sec. 34. new text begin [360.0426] CREATION OF AN AIRPORT AUTHORITY, new text end 51.15 new text begin DISSOLUTION. new text end 51.16     new text begin Subdivision 1. new text end new text begin Members; definition. new text end new text begin A city together with another city, county, new text end 51.17 new text begin town, or an Indian tribe may create an airport authority. For purposes of this chapter, new text end 51.18 new text begin "airport authority" means a governmental entity created pursuant to this section for the new text end 51.19 new text begin purpose of acquiring, establishing, constructing, maintaining, improving, and operating new text end 51.20 new text begin airports and other air navigation facilities. new text end 51.21     new text begin Subd. 2. new text end new text begin Process to establish authority. new text end new text begin A city that owns an airport by joint new text end 51.22 new text begin resolution together with other willing governmental units may create an airport authority new text end 51.23 new text begin that is authorized to exercise its functions upon passage of a joint resolution by each of new text end 51.24 new text begin their governing bodies, including a proposed date for the first meeting of the authority. new text end 51.25     new text begin Subd. 3. new text end new text begin Airport authority commission. new text end new text begin The powers of the airport authority shall new text end 51.26 new text begin be vested in the airport authority commissioners. The commission shall consist of at new text end 51.27 new text begin least five commissioners. Each governmental unit that is a member of the authority shall new text end 51.28 new text begin be represented by at least one commissioner. If fewer than five governmental units are new text end 51.29 new text begin members of the authority, there must be two commissioners appointed from each member new text end 51.30 new text begin unit of government. The terms of each commissioner are three years, provided that the new text end 51.31 new text begin length of the initial appointments must be staggered so that the terms of approximately new text end 51.32 new text begin one-third of the commissioners expire each calendar year. new text end 52.1     new text begin Subd. 4. new text end new text begin Appointment of commissioners. new text end new text begin The governmental body of each member new text end 52.2 new text begin governmental unit shall appoint a resident of that governmental unit to be a commissioner new text end 52.3 new text begin of the airport authority. Upon vacancy of a commissioner prior to the end of a normal term, new text end 52.4 new text begin the appropriate governmental body shall appoint a commissioner to fill the unexpired term. new text end 52.5     new text begin Subd. 5. new text end new text begin Compensation; meetings; officers. new text end new text begin Commissioners shall receive no new text end 52.6 new text begin compensation for services, but are entitled to payment for necessary expenses, including new text end 52.7 new text begin travel expenses, incurred in the discharge of the commissioners' duties. new text end 52.8     new text begin The commission shall establish a regular meeting schedule. A majority of the new text end 52.9 new text begin commissioners of the authority constitutes a quorum for purposes of conducting business new text end 52.10 new text begin of the authority. Action may be taken by the majority vote of not less than a majority of new text end 52.11 new text begin the commissioners present, providing there is a quorum. new text end 52.12     new text begin The commission shall elect a chair, a vice-chair, a secretary, and a treasurer at its new text end 52.13 new text begin organizational meeting. The authority may hire an executive director, a legal advisor, new text end 52.14 new text begin technical experts, and other employees, permanent and temporary, as it may require. new text end 52.15     new text begin Subd. 6. new text end new text begin Process to increase size of authority. new text end new text begin An airport authority may be new text end 52.16 new text begin increased in size by adding additional governmental entities if each of the additional new text end 52.17 new text begin entities and each of the governmental entities currently included in the existing authority new text end 52.18 new text begin adopt a resolution agreeing to the size increase. new text end 52.19     new text begin Subd. 7. new text end new text begin Process to decrease size of authority. new text end new text begin An airport authority may be new text end 52.20 new text begin decreased in size if each of the governmental entities that are members of the authority new text end 52.21 new text begin and the current commissioners consent to change and make provisions for the retention new text end 52.22 new text begin or disposition of its assets and liabilities. new text end 52.23     new text begin Subd. 8. new text end new text begin Process to dissolve authority. new text end new text begin An airport authority may be dissolved after new text end 52.24 new text begin payment of all debts and adoption of a joint resolution of the governing bodies of all of new text end 52.25 new text begin the participating units of government. Before dissolution, the property of the airport new text end 52.26 new text begin authority must be sold, transferred, or distributed as agreed to by the participating units new text end 52.27 new text begin of government. Any remaining funds must be distributed to the general funds of the new text end 52.28 new text begin participating units of government in proportion to their relative shares of the most recent new text end 52.29 new text begin levy under section 360.0427. new text end 52.30    Sec. 35. new text begin [360.0427] TAX LEVY MAY BE CERTIFIED BY AN AIRPORT new text end 52.31 new text begin AUTHORITY. new text end 52.32     new text begin In any year in which it imposes a property tax levy, an airport authority must certify new text end 52.33 new text begin to the auditor of any county that contains property within the boundaries of the airport new text end 52.34 new text begin authority a uniform tax rate to be levied on all taxable property within the boundaries new text end 52.35 new text begin of the airport authority. new text end 53.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2007, payable new text end 53.2 new text begin in 2008, and thereafter. new text end 53.3    Sec. 36. Minnesota Statutes 2006, section 435.193, is amended to read: 53.4435.193 HARDSHIP ASSESSMENT DEFERRAL FOR SENIORS OR new text begin , new text end 53.5DISABLED new text begin , OR MILITARY PERSONS new text end . 53.6     new text begin (a) new text end Notwithstanding the provisions of any law to the contrary, any county, statutory 53.7or home rule charter city, or town, making a special assessment may, at its discretion, defer 53.8the payment of that assessment for any homestead property new text begin : new text end 53.9     new text begin (1) new text end owned by a person 65 years of age or older or retired by virtue of a permanent 53.10and total disability for whom it would be a hardship to make the payments new text begin ; or new text end 53.11     new text begin (2) owned by a person who is a member of the Minnesota National Guard or other new text end 53.12 new text begin military reserves who is ordered into active military service, as defined in section 190.05, new text end 53.13 new text begin subdivision 5b or 5c, as stated in the person's military orders, for whom it would be a new text end 53.14 new text begin hardship to make the payments new text end . 53.15     new text begin (b) new text end Any county, statutory or home rule charter city, or town electing to defer 53.16special assessments shall adopt an ordinance or resolution establishing standards and 53.17guidelines for determining the existence of a hardship and for determining the existence of 53.18a disability, but nothing herein shall be construed to prohibit the determination of hardship 53.19on the basis of exceptional and unusual circumstances not covered by the standards and 53.20guidelines where the determination is made in a nondiscriminatory manner and does not 53.21give the applicant an unreasonable preference or advantage over other applicants. 53.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 53.23 new text begin and applies to any special assessment for which payment is due on or after that date. new text end 53.24    Sec. 37. Laws 1973, chapter 393, section 1, as amended by Laws 1974, chapter 153, 53.25section 1, is amended to read: 53.26    Section 1. MINNEAPOLIS, CITY OF; STREET MAINTENANCE AND 53.27LIGHTING. 53.28    Notwithstanding the provisions of any statute or the charter of the city of 53.29Minneapolis to the contrary, the city council of said city may provide that all new text begin or part of the new text end 53.30costs of new text begin construction, operation, and new text end maintenance of streets and street lighting within the 53.31city may hereafter be paid from the general revenues of the city of Minneapolis; provided 53.32that the portion of the costs assessable against nongovernmental real property exempt from 53.33ad valorem taxation may be levied as a special assessment against the property. 54.1    Sec. 38. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243, 54.2article 6, section 9, and Laws 2000, chapter 490, article 6, section 15, is amended to read: 54.3    Sec. 3. TAX; PAYMENT OF EXPENSES. 54.4    (a) The tax levied by the hospital district under Minnesota Statutes, section 447.34, 54.5must not be levied at a rate that exceeds 0.063 percent of taxable market value new text begin the amount new text end 54.6 new text begin authorized to be levied under that section. The proceeds of the tax may be used for all new text end 54.7 new text begin purposes of the hospital district, except as provided in paragraph (b) new text end . 54.8    (b) 0.048 percent of taxable market value of tax in paragraph (a) may be used only 54.9for acquisition, betterment, and maintenance of the district's hospital and nursing home 54.10facilities and equipment, and not for administrative or salary expenses. 54.11    (c) 0.015 percent of taxable market value of the tax in paragraph (a) may be used 54.12solely for the purpose of capital expenditures as it relates to ambulance acquisitions for 54.13the Cook ambulance service and the Orr ambulance service and not for administrative 54.14or salary expenses. 54.15    The part of the levy referred to in paragraph (c) new text begin (b) new text end must be administered by the 54.16Cook Hospital and passed on directly to the Cook area ambulance service board and the 54.17city of Orr to be held in trust until funding for a new ambulance is needed by either the 54.18Cook ambulance service or the Orr ambulance service. 54.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance with Minnesota new text end 54.20 new text begin Statutes, section 645.021, subdivision 3, by the governing body of the Cook-Orr Hospital new text end 54.21 new text begin District. new text end 54.22    Sec. 39. Laws 1989, chapter 211, section 8, subdivision 4, as amended by Laws 2002, 54.23chapter 390, section 24, and Laws 2003, chapter 127, article 2, section 22, subdivision 4, 54.24is amended to read: 54.25    Subd. 4. Tax levy. The tax levied under Minnesota Statutes, section 447.34, shall 54.26not exceed $300,000 for taxes levied in 2002. For taxes levied in 2003 and subsequent 54.27years, the tax must not exceed the lesser of: 54.28    (1) the product of the hospital district's property tax levy limitation for the previous 54.29year determined under this subdivision, multiplied by 103 percent; or 54.30    (2) the product of the hospital district's property tax levy limitation for the previous 54.31year determined under this subdivision multiplied by the ratio of the most recent available 54.32annual medical care expenditure category of the revised Consumer Price Index, U.S. 54.33citywide average, for all urban consumers prepared by the United States Department of 54.34Labor to the same annual index for the previous year new text begin the amount authorized to be levied new text end 54.35 new text begin under that section new text end . 55.1    The proceeds of the tax may be used for all purposes of the hospital district. 55.2 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance with Minnesota new text end 55.3 new text begin Statutes, section 645.021, subdivision 3, by the governing body of the Cook County new text end 55.4 new text begin Hospital District. new text end 55.5    Sec. 40. Laws 2006, chapter 236, article 1, section 21, is amended to read: 55.6    Sec. 21. EXCHANGE OF TAX-FORFEITED LAND; PRIVATE SALE; 55.7ITASCA COUNTY. 55.8    (a) For the purpose of a land exchange for use in connection with a proposed 55.9steel mill in Itasca County referenced in Laws 1999, chapter 240, article 1, section 8, 55.10subdivision 3, title examination and approval of the land described in paragraph (b) 55.11shall be undertaken as a condition of exchange of the land for class B land, and shall be 55.12governed by Minnesota Statutes, section 94.344, subdivisions 9 and 10, and the provisions 55.13of this section. Notwithstanding the evidence of title requirements in Minnesota Statutes, 55.14section 94.344, subdivisions 9 and 10, the county attorney shall examine one or more title 55.15reports or title insurance commitments prepared or underwritten by a title insurer licensed 55.16to conduct title insurance business in this state, regardless of whether abstracts were 55.17created or updated in the preparation of the title reports or commitments. The opinion of 55.18the county attorney, and approval by the attorney general, shall be based on those title 55.19reports or commitments. 55.20    (b) The land subject to this section is located in Itasca County and is described as: 55.21    (1) Sections 3, 4, 7, 10, 14, 15, 16, 17, 18, 20, 21, 22, 23, 26, 28, and 29, Township 55.2256 North, Range 22 West; 55.23    (2) Sections 3, 4, 9, 10, 13, and 14, Township 56 North, Range 23 West; 55.24    (3) Section 30, Township 57 North, Range 22 West; and 55.25    (4) Sections 25, 26, 34, 35, and 36, Township 57 North, Range 23 West. 55.26    (c) Riparian land given in exchange by Itasca County for the purpose of the steel 55.27mill referenced in paragraph (a), is exempt from the restrictions imposed by Minnesota 55.28Statutes, section 94.342, subdivision 3. 55.29    (d) Notwithstanding Minnesota Statutes, sections 92.45 and 282.018, subdivision 1, 55.30and the public sale provisions of Minnesota Statutes, chapter 282, Itasca County may sell, 55.31by private sale, any land received in exchange for the purpose of the steel mill referenced 55.32in paragraph (a), under the remaining provisions of Minnesota Statutes, chapter 282. The 55.33sale must be in a form approved by the attorney general. 55.34     new text begin (e) Notwithstanding Minnesota Statutes, section 284.28, subdivision 8, or any other new text end 55.35 new text begin law to the contrary, land acquired through an exchange under this section is exempt from new text end 56.1 new text begin payment of three percent of the sales price required to be collected by the county auditor new text end 56.2 new text begin at the time of sale for deposit in the state treasury. new text end 56.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 56.4    Sec. 41. new text begin FISCAL DISPARITIES STUDY. new text end 56.5     new text begin The commissioner of revenue shall conduct a study of the metropolitan revenue new text end 56.6 new text begin distribution program contained in Minnesota Statutes, chapter 473F, commonly known new text end 56.7 new text begin as the fiscal disparities program. On or before February 1, 2009, the commissioner shall new text end 56.8 new text begin make a report to the chairs of the house of representatives and senate tax committees new text end 56.9 new text begin consisting of the findings of the study and any recommendations resulting from the study. new text end 56.10     new text begin The study must consider to what extent the program is meeting the following goals, new text end 56.11 new text begin and what changes could be made to the program in the furtherance of meeting those goals: new text end 56.12     new text begin (1) reducing the extent to which the property tax encourages development patterns new text end 56.13 new text begin that do not make cost-effective use of public infrastructure or impose other high public new text end 56.14 new text begin costs; new text end 56.15     new text begin (2) ensuring that the benefits of economic growth of the region are shared throughout new text end 56.16 new text begin the region, especially for growth that results from state and/or regional decisions; new text end 56.17     new text begin (3) improving the ability of each jurisdiction within the region to deliver services at new text end 56.18 new text begin a level commensurate with its tax effort; new text end 56.19     new text begin (4) compensating jurisdictions containing properties that provide regional benefits new text end 56.20 new text begin for the costs those properties impose on their host jurisdictions in excess of their tax new text end 56.21 new text begin payments; new text end 56.22     new text begin (5) promoting a fair distribution of property tax burdens across jurisdictions of new text end 56.23 new text begin the region; and new text end 56.24     new text begin (6) reducing the economic losses that result from competition among communities new text end 56.25 new text begin for commercial-industrial tax base. new text end 56.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2007. new text end 56.27    Sec. 42. new text begin CITY OF BROOKLYN CENTER; PARTICIPATION IN CRIME-FREE new text end 56.28 new text begin MULTIHOUSING PROGRAM. new text end 56.29     new text begin (a) In addition to the requirements of Minnesota Statutes, section 273.128, if new text end 56.30 new text begin property located in the city of Brooklyn Center qualifies under paragraph (b), the owners new text end 56.31 new text begin or managers must complete the three phases of the city's crime-free multihousing program new text end 56.32 new text begin and the qualifying property must be annually certified by the police as participating new text end 56.33 new text begin in the program. If a qualifying property is not certified within one year after it is first new text end 57.1 new text begin determined to be a qualifying property under paragraph (b), or does not annually maintain new text end 57.2 new text begin its certification in the program, the city shall notify the property owner that the qualifying new text end 57.3 new text begin property must comply with the requirements of this section to maintain its classification new text end 57.4 new text begin as class 4d property. If a qualifying property is not in compliance within one year after new text end 57.5 new text begin receiving the notice from the city, the city shall issue a second notice and require the new text end 57.6 new text begin owners to enter into a plan to achieve compliance within one year. If, upon expiration new text end 57.7 new text begin of the one-year time period, the qualifying property has not been certified by the police new text end 57.8 new text begin as completing the program, the city shall notify the commissioner of the Housing new text end 57.9 new text begin Finance Agency and the commissioner shall remove the property from the list of class 4d new text end 57.10 new text begin properties certified to the assessor under Minnesota Statutes, section 273.128, subdivision new text end 57.11 new text begin 3. Once removed from the list, the property is not eligible for class 4d classification until new text end 57.12 new text begin it complies with this section and its compliance has been certified to the Housing Finance new text end 57.13 new text begin Agency by the city. Certification to the Housing Finance Agency must be made by May new text end 57.14 new text begin 15 to be effective for taxes payable in the following year. new text end 57.15     new text begin (b) A property is a qualifying property for purposes of this section's requirements if new text end 57.16 new text begin it satisfies each of the following requirements: new text end 57.17     new text begin (1) the city offers a crime-free multihousing program through its city police; new text end 57.18     new text begin (2) over the preceding three-year period, the number of police calls to the property new text end 57.19 new text begin exceeded the city's average number of calls for multiunit rental properties for the period new text end 57.20 new text begin by at least 25 percent, adjusted for the number of rental units; new text end 57.21     new text begin (3) the police department has requested, in writing, the owners or managers of the new text end 57.22 new text begin property to enroll in the crime-free multihousing program and the owners or managers new text end 57.23 new text begin refused or failed to enroll within 60 days after the request, or failed to complete phases new text end 57.24 new text begin one and three within 90 days and all three phases of the program within a one-year time new text end 57.25 new text begin period; and new text end 57.26     new text begin (4) the governing body of the city, by resolution, determines the property is a new text end 57.27 new text begin qualifying property under clauses (1) to (3). new text end 57.28     new text begin (c) Calls for police or emergency assistance in response to domestic abuse or new text end 57.29 new text begin medical assistance shall not be counted toward the number of calls in paragraph (b), clause new text end 57.30 new text begin (2). For purposes of this section, "domestic abuse" has the meaning given in Minnesota new text end 57.31 new text begin Statutes, section 518B.01, subdivision 2. new text end 57.32     new text begin (d) Low-income qualifying rental housing property classified as class 4d property new text end 57.33 new text begin for taxes payable in 2007 must meet the requirements of this section by May 15, 2010. new text end 57.34 new text begin EFFECTIVE DATE; LOCAL APPROVAL. new text end new text begin This section is effective the day after new text end 57.35 new text begin compliance by the governing body of the city of Brooklyn Center and its chief clerical new text end 58.1 new text begin officer with Minnesota Statutes, section 645.021, subdivisions 2 and 3, and applies to new text end 58.2 new text begin property taxes levied in 2007, payable in 2008, and thereafter. new text end 58.3    Sec. 43. new text begin CLAIR A. NELSON MEMORIAL FOREST, LAKE COUNTY; new text end 58.4 new text begin TEMPORARY SUSPENSION OF APPORTIONMENT OF PROCEEDS FROM new text end 58.5 new text begin TAX-FORFEITED LANDS. new text end 58.6     new text begin (a) Upon approval of an affected political subdivision within Lake County, the new text end 58.7 new text begin Lake County Board may suspend the apportionment of the balance of net proceeds from new text end 58.8 new text begin tax-forfeited lands within the affected political subdivision under Minnesota Statutes, new text end 58.9 new text begin section 282.08, clause (4), item (iii), and retain the net proceeds. The authority under this new text end 58.10 new text begin paragraph is available until Lake County suspends the apportionment of net proceeds new text end 58.11 new text begin subject to item (iii) in the amount of $2,200,000 plus any interest costs incurred by the new text end 58.12 new text begin county to purchase land described in this section. The money received by Lake County is new text end 58.13 new text begin to reimburse the county for the purchase in 2006 of 6,085 acres of forest land named the new text end 58.14 new text begin Clair A. Nelson Memorial Forest. new text end 58.15     new text begin (b) Any revenue derived from acquired land that was reimbursed under paragraph new text end 58.16 new text begin (a) is subject to apportionment as provided in Minnesota Statutes, section 282.08. new text end 58.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2006. new text end 58.18    Sec. 44. new text begin LAKEVIEW CEMETERY ASSOCIATION. new text end 58.19     new text begin Subdivision 1. new text end new text begin Authorized. new text end new text begin Any two or more of the following cities and towns in new text end 58.20 new text begin Itasca County may enter into a joint powers agreement under Minnesota Statutes, section new text end 58.21 new text begin 471.59, to establish the Lakeview Cemetery Association with the powers and duties of a new text end 58.22 new text begin cemetery association under Minnesota Statutes, chapter 306: the cities of Bovey, Calumet, new text end 58.23 new text begin Coleraine, Marble, and Taconite, and the towns of Greenway, Iron Range, Lawrence, new text end 58.24 new text begin and Trout Lake. new text end 58.25     new text begin Subd. 2. new text end new text begin Additions; withdrawals. new text end new text begin (a) A city or town listed in subdivision 1 that new text end 58.26 new text begin does not join the association at the time of the initial agreement may join as provided in new text end 58.27 new text begin the joint powers agreement, or if the joint powers agreement does not provide for later new text end 58.28 new text begin additions, by providing the association a copy of the adopted resolution to join. If the new text end 58.29 new text begin joint powers agreement does not provide for adding members, a city or town that joins new text end 58.30 new text begin after the initial agreement is effective, may join prior to July 1 of the levy year, for taxes new text end 58.31 new text begin payable in the following year. new text end 58.32     new text begin (b) A city or town may withdraw from the association as otherwise provided in the new text end 58.33 new text begin joint powers agreement, or providing to the association a copy of the adopted resolution of new text end 58.34 new text begin the city or town, prior to July 1 of the levy year for taxes payable in the following year. new text end 59.1     new text begin Subd. 3. new text end new text begin Operation; tax levy. new text end new text begin The joint powers agreement for the association may new text end 59.2 new text begin provide for each participating city and town to levy a tax against all taxable properties new text end 59.3 new text begin located within the city or town. The maximum amount that may be levied by all new text end 59.4 new text begin participating cities and towns combined shall not exceed a total of $200,000 per year. If new text end 59.5 new text begin levied, the tax is in addition to all other taxes permitted to be levied on the property, new text end 59.6 new text begin including taxes permitted to be levied for cemetery purposes by a participating city or new text end 59.7 new text begin town. The levy under this section must be disregarded in the calculation of all other new text end 59.8 new text begin rate or per capita levy limitations imposed by law. One of the cities or towns within the new text end 59.9 new text begin association, chosen by the members of the association, shall certify a tax levy to the new text end 59.10 new text begin Itasca County auditor. When collected, the Itasca County auditor shall pay the Lakeview new text end 59.11 new text begin Cemetery Association directly. new text end 59.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2007, payable new text end 59.13 new text begin in 2008, and thereafter. new text end 59.14    Sec. 45. new text begin TAX-FORFEITED LANDS LEASE; ITASCA COUNTY. new text end 59.15     new text begin Notwithstanding Minnesota Statutes, section 282.04, or other law to the contrary, new text end 59.16 new text begin the Itasca County auditor may lease tax-forfeited land to Minnesota Steel for a period of new text end 59.17 new text begin 20 years, for use as a tailings basin and buffer area. A lease entered under this section new text end 59.18 new text begin is renewable. new text end 59.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 59.20    Sec. 46. new text begin HAM LAKE FIRE; PROPERTY TAX REDUCTION; STATE new text end 59.21 new text begin REIMBURSEMENT. new text end 59.22     new text begin Subdivision 1. new text end new text begin Property tax reduction. new text end new text begin The owner of property that was destroyed new text end 59.23 new text begin in the Ham Lake fire in 2007 may apply to the Cook County assessor to receive a reduction new text end 59.24 new text begin in the amount of taxes payable on the property for 2007 and 2008. The reduction provided new text end 59.25 new text begin under this section must be granted if 50 percent or more of the homestead dwelling or new text end 59.26 new text begin nonhomestead structure, as established by the county assessor, has been destroyed by the new text end 59.27 new text begin fire and related effects and the homestead is uninhabitable or the other structure is not new text end 59.28 new text begin useable. For property that meets the requirements of this section, the tax liabilities for the new text end 59.29 new text begin second half of property taxes due in October 2007 and for all property taxes due in 2008 new text end 59.30 new text begin are reduced to zero. If application is made following payment of all property taxes due for new text end 59.31 new text begin 2007, the amount of the reduction shall be refunded to the taxpayer by the county treasurer new text end 59.32 new text begin as soon as practical. A reduction granted under this section is in lieu of a reduction under new text end 59.33 new text begin Minnesota Statutes, section 273.123. new text end 60.1     new text begin Subd. 2. new text end new text begin State reimbursement. new text end new text begin The Cook County auditor shall calculate the tax new text end 60.2 new text begin on the property described in subdivision 1 based on the assessment made on January 2, new text end 60.3 new text begin 2007, paid in 2007 and 2008 after the reduction granted in subdivision 1. The difference new text end 60.4 new text begin between the tax determined on the January 2 tax capacity and the tax actually paid new text end 60.5 new text begin pursuant to this section shall be reimbursed to each taxing jurisdiction in which the new text end 60.6 new text begin damaged property is located. The amount shall be certified by the county auditor and new text end 60.7 new text begin reported to the commissioner of revenue. The commissioner shall make the payments to new text end 60.8 new text begin the taxing jurisdictions containing the property on the settlement dates in Minnesota new text end 60.9 new text begin Statutes, sections 276.11 and 276.111, for the second half of 2007 payments and for both new text end 60.10 new text begin 2008 payments in the same proportion that the ad valorem tax is distributed. new text end 60.11     new text begin Subd. 3. new text end new text begin Computation of credits. new text end new text begin The amounts of the market value homestead new text end 60.12 new text begin credit provided in Minnesota Statutes, section 273.1384, shall be computed on the new text end 60.13 new text begin tax determined before the reduction under subdivision 1. For purposes of the property new text end 60.14 new text begin tax refund, property taxes payable, as defined in Minnesota Statutes, section 290A.03, new text end 60.15 new text begin subdivision 13, must be computed upon the tax determined under subdivision 1. new text end 60.16     new text begin Subd. 4. new text end new text begin Appropriation. new text end new text begin $500,000 is appropriated from the general fund to the new text end 60.17 new text begin commissioner of revenue to make the payments required by this section. This amount new text end 60.18 new text begin does not cancel, but remains available until June 30, 2009. new text end 60.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 60.20    Sec. 47. new text begin REPEALER. new text end 60.21 new text begin (a) new text end new text begin Laws 1973, chapter 393, section 2, new text end new text begin is repealed. new text end 60.22 new text begin (b) new text end new text begin Laws 1994, chapter 587, article 9, section 8, subdivision 1, as amended by Laws new text end 60.23 new text begin 2005, First Special Session chapter 3, article 1, section 36, new text end new text begin is repealed, effective for the new text end 60.24 new text begin same levy year in which the association initially levies under section 44. new text end 60.25ARTICLE 3 60.26CORPORATE FRANCHISE TAX 60.27    Section 1. Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read: 60.28    Subd. 6b. Foreign operating corporation. The term "foreign operating 60.29corporation," when applied to a corporation, means a domestic corporation with the 60.30following characteristics: 60.31    (1) it is part of a unitary business at least one member of which is taxable in this state; 60.32    (2) it is not a foreign sales corporation under section 922 of the Internal Revenue 60.33Code, as amended through December 31, 1999, for the taxable year; 61.1    (3) new text begin either new text end (i) the average of the percentages of its property and payrolls, including 61.2the pro rata share of its unitary partnerships' property and payrolls, assigned to locations 61.3outside the United States, where the United States includes the District of Columbia and 61.4excludes the commonwealth of Puerto Rico and possessions of the United States, as 61.5determined under section or , is 80 percent or more; or (ii) it has in effect a 61.6valid election under section 936 of the Internal Revenue Code; new text begin or (ii) at least 80 percent of new text end 61.7 new text begin the gross income from all sources of the corporation in the tax year is new text end and 61.8    (4) it has $1,000,000 of payroll and $2,000,000 of property, as determined under 61.9section or , that are located outside the United States. If the domestic 61.10corporation does not have payroll as determined under section or , but it 61.11or its partnerships have paid $1,000,000 for work, performed directly for the domestic 61.12corporation or the partnerships, outside the United States, then paragraph (3)(i) shall not 61.13require payrolls to be included in the average calculation new text begin derived from sources without new text end 61.14 new text begin the United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal new text end 61.15 new text begin Revenue Code new text end . 61.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 61.17 new text begin December 31, 2006. new text end 61.18    Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read: 61.19    Subd. 19c. Corporations; additions to federal taxable income. For corporations, 61.20there shall be added to federal taxable income: 61.21    (1) the amount of any deduction taken for federal income tax purposes for income, 61.22excise, or franchise taxes based on net income or related minimum taxes, including but not 61.23limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 61.24another state, a political subdivision of another state, the District of Columbia, or any 61.25foreign country or possession of the United States; 61.26    (2) interest not subject to federal tax upon obligations of: the United States, its 61.27possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 61.28state, any of its political or governmental subdivisions, any of its municipalities, or any 61.29of its governmental agencies or instrumentalities; the District of Columbia; or Indian 61.30tribal governments; 61.31    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 61.32Revenue Code; 61.33    (4) the amount of any net operating loss deduction taken for federal income tax 61.34purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 61.35deduction under section 810 of the Internal Revenue Code; 62.1    (5) the amount of any special deductions taken for federal income tax purposes 62.2under sections 241 to 247 and 965 of the Internal Revenue Code; 62.3    (6) losses from the business of mining, as defined in section 290.05, subdivision 1, 62.4clause (a), that are not subject to Minnesota income tax; 62.5    (7) the amount of any capital losses deducted for federal income tax purposes under 62.6sections 1211 and 1212 of the Internal Revenue Code; 62.7    (8) the exempt foreign trade income of a foreign sales corporation under sections 62.8921(a) and 291 of the Internal Revenue Code; 62.9    (9) the amount of percentage depletion deducted under sections 611 through 614 and 62.10291 of the Internal Revenue Code; 62.11    (10) for certified pollution control facilities placed in service in a taxable year 62.12beginning before December 31, 1986, and for which amortization deductions were elected 62.13under section 169 of the Internal Revenue Code of 1954, as amended through December 62.1431, 1985, the amount of the amortization deduction allowed in computing federal taxable 62.15income for those facilities; 62.16    (11) the amount of any deemed dividend from a foreign operating corporation 62.17determined pursuant to section 290.17, subdivision 4, paragraph (g) new text begin . The deemed dividend new text end 62.18 new text begin shall be reduced by the amount of the addition to income required by clauses (19), (20), new text end 62.19 new text begin (21), and (22) new text end ; 62.20    (12) the amount of a partner's pro rata share of net income which does not flow 62.21through to the partner because the partnership elected to pay the tax on the income under 62.22section 6242(a)(2) of the Internal Revenue Code; 62.23    (13) the amount of net income excluded under section 114 of the Internal Revenue 62.24Code; 62.25    (14) any increase in subpart F income, as defined in section 952(a) of the Internal 62.26Revenue Code, for the taxable year when subpart F income is calculated without regard 62.27to the provisions of section 103 of Public Law 109-222; 62.28    (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 62.29and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 62.30has an activity that in the taxable year generates a deduction for depreciation under 62.31section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 62.32that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 62.33under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 62.34depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 62.35amount of the loss from the activity that is not allowed in the taxable year. In succeeding 63.1taxable years when the losses not allowed in the taxable year are allowed, the depreciation 63.2under section 168(k)(1)(A) and (k)(4)(A) is allowed; 63.3    (16) 80 percent of the amount by which the deduction allowed by section 179 of the 63.4Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 63.5Revenue Code of 1986, as amended through December 31, 2003; 63.6    (17) to the extent deducted in computing federal taxable income, the amount of the 63.7deduction allowable under section 199 of the Internal Revenue Code; and 63.8    (18) the exclusion allowed under section 139A of the Internal Revenue Code for 63.9federal subsidies for prescription drug plans new text begin ; new text end 63.10     new text begin (19) an amount equal to the interest and intangible expenses, losses, and costs paid, new text end 63.11 new text begin accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit new text end 63.12 new text begin of a corporation that is a member of the taxpayer's unitary business group that qualifies new text end 63.13 new text begin as a foreign operating corporation. For purposes of this clause, intangible expenses and new text end 63.14 new text begin costs include: new text end 63.15     new text begin (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, new text end 63.16 new text begin use, maintenance or management, ownership, sale, exchange, or any other disposition of new text end 63.17 new text begin intangible property; new text end 63.18     new text begin (ii) losses incurred, directly or indirectly, from factoring transactions or discounting new text end 63.19 new text begin transactions; new text end 63.20     new text begin (iii) royalty, patent, technical, and copyright fees; new text end 63.21     new text begin (iv) licensing fees; and new text end 63.22     new text begin (v) other similar expenses and costs new text end . 63.23 new text begin For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent new text end 63.24 new text begin applications, trade names, trademarks, service marks, copyrights, mask works, trade new text end 63.25 new text begin secrets, and similar types of intangible assets. new text end 63.26 new text begin This clause does not apply to any item of interest or intangible expenses or costs paid, new text end 63.27 new text begin accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect new text end 63.28 new text begin to such item of income to the extent that the income to the foreign operating corporation new text end 63.29 new text begin is income from sources without the United States as defined in subtitle A, chapter 1, new text end 63.30 new text begin subchapter N, part 1, of the Internal Revenue Code; new text end 63.31     new text begin (20) except as already included in the taxpayer's taxable income pursuant to clause new text end 63.32 new text begin (19), any interest income and income generated from intangible property received or new text end 63.33 new text begin accrued by a foreign operating corporation that is a member of the taxpayer's unitary new text end 63.34 new text begin group. For purposes of this clause, income generated from intangible property includes: new text end 63.35     new text begin (i) income related to the direct or indirect acquisition, use, maintenance or new text end 63.36 new text begin management, ownership, sale, exchange, or any other disposition of intangible property; new text end 64.1     new text begin (ii) income from factoring transactions or discounting transactions; new text end 64.2     new text begin (iii) royalty, patent, technical, and copyright fees; new text end 64.3     new text begin (iv) licensing fees; and new text end 64.4     new text begin (v) other similar income. new text end 64.5 new text begin For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent new text end 64.6 new text begin applications, trade names, trademarks, service marks, copyrights, mask works, trade new text end 64.7 new text begin secrets, and similar types of intangible assets. new text end 64.8 new text begin This clause does not apply to any item of interest or intangible income received or accrued new text end 64.9 new text begin by a foreign operating corporation with respect to such item of income to the extent that new text end 64.10 new text begin the income is income from sources without the United States as defined in subtitle A, new text end 64.11 new text begin chapter 1, subchapter N, part 1, of the Internal Revenue Code; new text end 64.12     new text begin (21) the dividends attributable to the income of a foreign operating corporation that new text end 64.13 new text begin is a member of the taxpayer's unitary group in an amount that is equal to the dividends new text end 64.14 new text begin paid deduction of a real estate investment trust under section 561(a) of the Internal new text end 64.15 new text begin Revenue Code for amounts paid or accrued by the real estate investment trust to the new text end 64.16 new text begin foreign operating corporation; and new text end 64.17     new text begin (22) the income of a foreign operating corporation that is a member of the taxpayer's new text end 64.18 new text begin unitary group in an amount that is equal to gains derived from the sale of real or personal new text end 64.19 new text begin property located in the United States. new text end 64.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 64.21 new text begin December 31, 2006. new text end 64.22    Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read: 64.23    Subd. 19d. Corporations; modifications decreasing federal taxable income. For 64.24corporations, there shall be subtracted from federal taxable income after the increases 64.25provided in subdivision 19c: 64.26    (1) the amount of foreign dividend gross-up added to gross income for federal 64.27income tax purposes under section 78 of the Internal Revenue Code; 64.28    (2) the amount of salary expense not allowed for federal income tax purposes due to 64.29claiming the federal jobs credit under section 51 of the Internal Revenue Code; 64.30    (3) any dividend (not including any distribution in liquidation) paid within the 64.31taxable year by a national or state bank to the United States, or to any instrumentality of 64.32the United States exempt from federal income taxes, on the preferred stock of the bank 64.33owned by the United States or the instrumentality; 65.1    (4) amounts disallowed for intangible drilling costs due to differences between 65.2this chapter and the Internal Revenue Code in taxable years beginning before January 65.31, 1987, as follows: 65.4    (i) to the extent the disallowed costs are represented by physical property, an amount 65.5equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 65.6subdivision 7 , subject to the modifications contained in subdivision 19e; and 65.7    (ii) to the extent the disallowed costs are not represented by physical property, an 65.8amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 65.9290.09, subdivision 8 ; 65.10    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 65.11Internal Revenue Code, except that: 65.12    (i) for capital losses incurred in taxable years beginning after December 31, 1986, 65.13capital loss carrybacks shall not be allowed; 65.14    (ii) for capital losses incurred in taxable years beginning after December 31, 1986, 65.15a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 65.16allowed; 65.17    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 65.18capital loss carryback to each of the three taxable years preceding the loss year, subject to 65.19the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and 65.20    (iv) for capital losses incurred in taxable years beginning before January 1, 1987, 65.21a capital loss carryover to each of the five taxable years succeeding the loss year to the 65.22extent such loss was not used in a prior taxable year and subject to the provisions of 65.23Minnesota Statutes 1986, section 290.16, shall be allowed; 65.24    (6) an amount for interest and expenses relating to income not taxable for federal 65.25income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 65.26expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 65.27291 of the Internal Revenue Code in computing federal taxable income; 65.28    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for 65.29which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a 65.30reasonable allowance for depletion based on actual cost. In the case of leases the deduction 65.31must be apportioned between the lessor and lessee in accordance with rules prescribed 65.32by the commissioner. In the case of property held in trust, the allowable deduction must 65.33be apportioned between the income beneficiaries and the trustee in accordance with the 65.34pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 65.35of the trust's income allocable to each; 66.1    (8) for certified pollution control facilities placed in service in a taxable year 66.2beginning before December 31, 1986, and for which amortization deductions were elected 66.3under section 169 of the Internal Revenue Code of 1954, as amended through December 66.431, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 66.51986, section 290.09, subdivision 7; 66.6    (9) amounts included in federal taxable income that are due to refunds of income, 66.7excise, or franchise taxes based on net income or related minimum taxes paid by the 66.8corporation to Minnesota, another state, a political subdivision of another state, the 66.9District of Columbia, or a foreign country or possession of the United States to the extent 66.10that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 66.11clause (1), in a prior taxable year; 66.12    (10) 80 percent of royalties, fees, or other like income accrued or received from a 66.13foreign operating corporation or a foreign corporation which is part of the same unitary 66.14business as the receiving corporation new text begin , unless the income resulting from such payments or new text end 66.15 new text begin accruals is income from sources within the United States as defined in subtitle A, chapter new text end 66.16 new text begin 1, subchapter N, part 1, of the Internal Revenue Code new text end ; 66.17    (11) income or gains from the business of mining as defined in section 290.05, 66.18subdivision 1 , clause (a), that are not subject to Minnesota franchise tax; 66.19    (12) the amount of disability access expenditures in the taxable year which are not 66.20allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code; 66.21    (13) the amount of qualified research expenses not allowed for federal income tax 66.22purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 66.23the amount exceeds the amount of the credit allowed under section 290.068; 66.24    (14) the amount of salary expenses not allowed for federal income tax purposes due 66.25to claiming the Indian employment credit under section 45A(a) of the Internal Revenue 66.26Code; 66.27    (15) the amount of any refund of environmental taxes paid under section 59A of the 66.28Internal Revenue Code; 66.29    (16) for taxable years beginning before January 1, 2008, the amount of the federal 66.30small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 66.31which is included in gross income under section 87 of the Internal Revenue Code; 66.32    (17) for a corporation whose foreign sales corporation, as defined in section 922 66.33of the Internal Revenue Code, constituted a foreign operating corporation during any 66.34taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 66.35claiming the deduction under section 290.21, subdivision 4, for income received from 66.36the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 67.1income excluded under section 114 of the Internal Revenue Code, provided the income is 67.2not income of a foreign operating company; 67.3    (18) any decrease in subpart F income, as defined in section 952(a) of the Internal 67.4Revenue Code, for the taxable year when subpart F income is calculated without regard 67.5to the provisions of section 614 of Public Law 107-147; 67.6    (19) in each of the five tax years immediately following the tax year in which an 67.7addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of 67.8the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 67.9amount of the addition made by the taxpayer under subdivision 19c, clause (15). The 67.10resulting delayed depreciation cannot be less than zero; and 67.11    (20) in each of the five tax years immediately following the tax year in which an 67.12addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the 67.13amount of the addition. 67.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 67.15 new text begin December 31, 2006. new text end 67.16    Sec. 4. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read: 67.17    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable 67.18income" is Minnesota net income as defined in section 290.01, subdivision 19, and 67.19includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 67.20(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 67.21Minnesota tax return, the minimum tax must be computed on a separate company basis. 67.22If a corporation is part of a tax group filing a unitary return, the minimum tax must be 67.23computed on a unitary basis. The following adjustments must be made. 67.24    (1) For purposes of the depreciation adjustments under section 56(a)(1) and 67.2556(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 67.26service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 67.27income tax purposes, including any modification made in a taxable year under section 67.28290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7, 67.29paragraph (c). 67.30    For taxable years beginning after December 31, 2000, the amount of any remaining 67.31modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 67.32section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 67.33allowance in the first taxable year after December 31, 2000. 67.34    (2) The portion of the depreciation deduction allowed for federal income tax 67.35purposes under section 168(k) of the Internal Revenue Code that is required as an addition 68.1under section 290.01, subdivision 19c, clause (16) new text begin (15) new text end , is disallowed in determining 68.2alternative minimum taxable income. 68.3    (3) The subtraction for depreciation allowed under section 290.01, subdivision 19d, 68.4clause (19), is allowed as a depreciation deduction in determining alternative minimum 68.5taxable income. 68.6    (4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 68.7of the Internal Revenue Code does not apply. 68.8    (5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 68.9Revenue Code does not apply. 68.10    (6) The special rule for dividends from section 936 companies under section 68.1156(g)(4)(C)(iii) does not apply. 68.12    (7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue 68.13Code does not apply. 68.14    (8) The tax preference for intangible drilling costs under section 57(a)(2) of the 68.15Internal Revenue Code must be calculated without regard to subparagraph (E) and the 68.16subtraction under section 290.01, subdivision 19d, clause (4). 68.17    (9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 68.18Revenue Code does not apply. 68.19    (10) The tax preference for charitable contributions of appreciated property under 68.20section 57(a)(6) of the Internal Revenue Code does not apply. 68.21    (11) For purposes of calculating the tax preference for accelerated depreciation or 68.22amortization on certain property placed in service before January 1, 1987, under section 68.2357(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 68.24deduction allowed under section 290.01, subdivision 19e. 68.25    For taxable years beginning after December 31, 2000, the amount of any remaining 68.26modification made under section 290.01, subdivision 19e, not previously deducted is a 68.27depreciation or amortization allowance in the first taxable year after December 31, 2004. 68.28    (12) For purposes of calculating the adjustment for adjusted current earnings in 68.29section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 68.30income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 68.31minimum taxable income as defined in this subdivision, determined without regard to the 68.32adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code. 68.33    (13) For purposes of determining the amount of adjusted current earnings under 68.34section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 68.3556(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend 68.36gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), new text begin or new text end (ii) the 69.1amount of refunds of income, excise, or franchise taxes subtracted as provided in section 69.2290.01, subdivision 19d , clause (10) new text begin (9) new text end , or (iii) the amount of royalties, fees or other like 69.3income subtracted as provided in section 290.01, subdivision 19d, clause (11) new text begin (10) new text end . 69.4    (14) Alternative minimum taxable income excludes the income from operating in a 69.5job opportunity building zone as provided under section 469.317. 69.6    (15) Alternative minimum taxable income excludes the income from operating in a 69.7biotechnology and health sciences industry zone as provided under section 469.337. 69.8    (16) Alternative minimum taxable income excludes the income from operating in an 69.9international economic development zone as provided under section 469.326. 69.10    Items of tax preference must not be reduced below zero as a result of the 69.11modifications in this subdivision. 69.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 69.13 new text begin December 31, 2006. new text end 69.14    Sec. 5. Minnesota Statutes 2006, section 290.34, is amended by adding a subdivision 69.15to read: 69.16     new text begin Subd. 3a. new text end new text begin Transactions without economic substance. new text end new text begin (a) When any person, new text end 69.17 new text begin directly or indirectly, engages in a transaction or series of transactions without economic new text end 69.18 new text begin substance to create a loss or to reduce taxable income or to increase credits allowed in new text end 69.19 new text begin determining Minnesota tax, the commissioner must determine the amount of a taxpayer's new text end 69.20 new text begin taxable income or tax so as to reflect what would have been the taxpayer's taxable income new text end 69.21 new text begin or tax but for the transaction or transactions without economic substance causing the new text end 69.22 new text begin reduction in taxable income or tax. new text end 69.23     new text begin (b) A transaction has economic substance only if a taxpayer shows by clear and new text end 69.24 new text begin convincing evidence: new text end 69.25     new text begin (1) the transaction changes in a meaningful way (apart from federal, state, local, and new text end 69.26 new text begin foreign tax effects) the taxpayer's economic position; and new text end 69.27     new text begin (2) the taxpayer has a substantial nontax purpose for entering into a transaction and new text end 69.28 new text begin the transaction is a reasonable means of accomplishing the substantial nontax purpose. new text end 69.29 new text begin A transaction does not have a substantial nontax purpose if it does not have a potential new text end 69.30 new text begin for profit. A transaction has a substantial nontax purpose when the taxpayer reasonably new text end 69.31 new text begin expects that the pretax profit for the transaction is substantial in relation to the present new text end 69.32 new text begin value of the expected net tax benefits that would be allowed if the transaction were new text end 69.33 new text begin respected for tax purposes, and the reasonably expected pretax profit from the transaction new text end 69.34 new text begin exceeds the risk-free rate of return. new text end 70.1     new text begin (c) It is the intent of the legislature that the provisions of this subdivision must not new text end 70.2 new text begin be construed as supplanting any existing Minnesota law. new text end 70.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 70.4 new text begin December 31, 2006. new text end 70.5ARTICLE 4 70.6INDIVIDUAL INCOME TAXES 70.7    Section 1. Minnesota Statutes 2006, section 289A.12, subdivision 4, is amended to 70.8read: 70.9    Subd. 4. Returns by persons, corporations, cooperatives, governmental entities, 70.10or school districts. new text begin (a) new text end The commissioner may by notice and demand require to the 70.11extent required by section 6041 of the Internal Revenue Code, a person, corporation, 70.12or cooperative, the state of Minnesota and its political subdivisions, and a city, county, 70.13and school district in Minnesota, making payments in the regular course of a trade or 70.14business during the taxable year to any person or corporation of $600 or more on account 70.15of rents or royalties, or of $10 or more on account of interest, or $10 or more on account 70.16of dividends or patronage dividends, or $600 or more on account of either wages, salaries, 70.17commissions, fees, prizes, awards, pensions, annuities, or any other fixed or determinable 70.18gains, profits or income, not otherwise reportable under section 289A.09, subdivision 2, or 70.19on account of earnings of $10 or more distributed to its members by savings associations 70.20or credit unions chartered under the laws of this state or the United States, (1) to file with 70.21the commissioner a return (except in cases where a valid agreement to participate in the 70.22combined federal and state information reporting system has been entered into, and the 70.23return is filed only with the commissioner of internal revenue under the applicable filing 70.24and informational reporting requirements of the Internal Revenue Code) with respect to 70.25the payments in excess of the amounts named, giving the names and addresses of the 70.26persons to whom the payments were made, the amounts paid to each, and (2) to make 70.27a return with respect to the total number of payments and total amount of payments, 70.28for each category of income named, which were in excess of the amounts named. This 70.29subdivision does not apply to the payment of interest or dividends to a person who was a 70.30nonresident of Minnesota for the entire year. 70.31     new text begin (b) For payments for which a return is covered by paragraph (a), regardless of new text end 70.32 new text begin whether the commissioner has required filing under paragraph (a), the payor must file a new text end 70.33 new text begin copy of the return with the commissioner if: new text end 71.1     new text begin (i) the return is for a payment made to a Minnesota resident, to a recipient with a new text end 71.2 new text begin Minnesota address, or for activity occurring in the state of Minnesota; and new text end 71.3     new text begin (ii) the payment is for wages, salaries, or other compensation for services provided. new text end 71.4 new text begin The commissioner may require this information to be filed in electronic or another form new text end 71.5 new text begin that the commissioner determines is appropriate, notwithstanding the provisions of new text end 71.6 new text begin paragraph (c). new text end 71.7     new text begin (c) new text end A person, corporation, or cooperative required to file returns under this 71.8subdivision must file the returns on magnetic media if magnetic media was used to satisfy 71.9the federal reporting requirement under section 6011(e) of the Internal Revenue Code, 71.10unless the person establishes to the satisfaction of the commissioner that compliance with 71.11this requirement would be an undue hardship. 71.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for forms required to be filed by new text end 71.13 new text begin federal law after December 31, 2007. new text end 71.14    Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19a, is amended to read: 71.15    Subd. 19a. Additions to federal taxable income. For individuals, estates, and 71.16trusts, there shall be added to federal taxable income: 71.17    (1)(i) interest income on obligations of any state other than Minnesota or a political 71.18or governmental subdivision, municipality, or governmental agency or instrumentality 71.19of any state other than Minnesota exempt from federal income taxes under the Internal 71.20Revenue Code or any other federal statute; and 71.21    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 71.22Code, except the portion of the exempt-interest dividends derived from interest income 71.23on obligations of the state of Minnesota or its political or governmental subdivisions, 71.24municipalities, governmental agencies or instrumentalities, but only if the portion of the 71.25exempt-interest dividends from such Minnesota sources paid to all shareholders represents 71.2695 percent or more of the exempt-interest dividends that are paid by the regulated 71.27investment company as defined in section 851(a) of the Internal Revenue Code, or the 71.28fund of the regulated investment company as defined in section 851(g) of the Internal 71.29Revenue Code, making the payment; and 71.30    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 71.31government described in section 7871(c) of the Internal Revenue Code shall be treated as 71.32interest income on obligations of the state in which the tribe is located; 71.33    (2) the amount of income or sales and use taxes paid or accrued within the taxable 71.34year under this chapter and the amount of taxes based on net income paid or sales and use 71.35taxes paid to any other state or to any province or territory of Canada, to the extent allowed 72.1as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not 72.2be more than the amount by which the itemized deductions as allowed under section 63(d) 72.3of the Internal Revenue Code exceeds the amount of the standard deduction as defined 72.4in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the 72.5disallowance of itemized deductions under section 68 of the Internal Revenue Code of 72.61986, income or sales and use tax is the last itemized deduction disallowed; 72.7    (3) the capital gain amount of a lump sum distribution to which the special tax under 72.8section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies; 72.9    (4) the amount of income taxes paid or accrued within the taxable year under this 72.10chapter and taxes based on net income paid to any other state or any province or territory 72.11of Canada, to the extent allowed as a deduction in determining federal adjusted gross 72.12income. For the purpose of this paragraph, income taxes do not include the taxes imposed 72.13by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 72.14    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 72.15other than expenses or interest used in computing net interest income for the subtraction 72.16allowed under subdivision 19b, clause (1); 72.17    (6) the amount of a partner's pro rata share of net income which does not flow 72.18through to the partner because the partnership elected to pay the tax on the income under 72.19section 6242(a)(2) of the Internal Revenue Code; 72.20    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the 72.21Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 72.22in the taxable year generates a deduction for depreciation under section 168(k) and the 72.23activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 72.24the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 72.25limited to excess of the depreciation claimed by the activity under section 168(k) over the 72.26amount of the loss from the activity that is not allowed in the taxable year. In succeeding 72.27taxable years when the losses not allowed in the taxable year are allowed, the depreciation 72.28under section 168(k) is allowed; 72.29    (8) 80 percent of the amount by which the deduction allowed by section 179 of the 72.30Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 72.31Revenue Code of 1986, as amended through December 31, 2003; 72.32    (9) to the extent deducted in computing federal taxable income, the amount of the 72.33deduction allowable under section 199 of the Internal Revenue Code; and 72.34    (10) the exclusion allowed under section 139A of the Internal Revenue Code for 72.35federal subsidies for prescription drug plans new text begin ; and new text end 72.36     new text begin (11) the amount of expenses disallowed under section 290.10, subdivision 2 new text end . 73.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 73.2 new text begin December 31, 2006. new text end 73.3    Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19b, is amended to read: 73.4    Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 73.5and trusts, there shall be subtracted from federal taxable income: 73.6    (1) net interest income on obligations of any authority, commission, or 73.7instrumentality of the United States to the extent includable in taxable income for federal 73.8income tax purposes but exempt from state income tax under the laws of the United States; 73.9    (2) if included in federal taxable income, the amount of any overpayment of income 73.10tax to Minnesota or to any other state, for any previous taxable year, whether the amount 73.11is received as a refund or as a credit to another taxable year's income tax liability; 73.12    (3) the amount paid to others, less the amount used to claim the credit allowed under 73.13section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 73.14to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 73.15transportation of each qualifying child in attending an elementary or secondary school 73.16situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 73.17resident of this state may legally fulfill the state's compulsory attendance laws, which 73.18is not operated for profit, and which adheres to the provisions of the Civil Rights Act 73.19of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 73.20tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 73.21"textbooks" includes books and other instructional materials and equipment purchased 73.22or leased for use in elementary and secondary schools in teaching only those subjects 73.23legally and commonly taught in public elementary and secondary schools in this state. 73.24Equipment expenses qualifying for deduction includes expenses as defined and limited in 73.25section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 73.26books and materials used in the teaching of religious tenets, doctrines, or worship, the 73.27purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 73.28or materials for, or transportation to, extracurricular activities including sporting events, 73.29musical or dramatic events, speech activities, driver's education, or similar programs. For 73.30purposes of the subtraction provided by this clause, "qualifying child" has the meaning 73.31given in section 32(c)(3) of the Internal Revenue Code; 73.32    (4) income as provided under section 290.0802; 73.33    (5) to the extent included in federal adjusted gross income, income realized on 73.34disposition of property exempt from tax under section 290.491; 74.1    (6) to the extent not deducted in determining federal taxable income by an individual 74.2who does not itemize deductions for federal income tax purposes for the taxable year, an 74.3amount equal to 50 percent of the excess of charitable contributions over $500 allowable 74.4as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 74.5under the provisions of Public Law 109-1; 74.6    (7) for taxable years beginning before January 1, 2008, the amount of the federal 74.7small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 74.8which is included in gross income under section 87 of the Internal Revenue Code; 74.9    (8) for individuals who are allowed a federal foreign tax credit for taxes that do not 74.10qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 74.11of subnational foreign taxes for the taxable year, but not to exceed the total subnational 74.12foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 74.13"federal foreign tax credit" means the credit allowed under section 27 of the Internal 74.14Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 74.15under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 74.16the extent they exceed the federal foreign tax credit; 74.17    (9) in each of the five tax years immediately following the tax year in which an 74.18addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 74.19of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 74.20of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 74.21the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 74.22subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 74.23positive value of any net operating loss under section 172 of the Internal Revenue Code 74.24generated for the tax year of the addition. The resulting delayed depreciation cannot be 74.25less than zero; 74.26    (10) job opportunity building zone income as provided under section 469.316; 74.27    (11) new text begin to the extent included in federal taxable income, new text end the amount of compensation 74.28paid to members of the Minnesota National Guard or other reserve components of the 74.29United States military for active service performed in Minnesota, excluding compensation 74.30for services performed under the Active Guard Reserve (AGR) program. For purposes of 74.31this clause, "active service" means (i) state active service as defined in section 190.05, 74.32subdivision 5a , clause (1); (ii) federally funded state active service as defined in section 74.33190.05, subdivision 5b ; or (iii) federal active service as defined in section 190.05, 74.34subdivision 5c , but "active service" excludes services performed exclusively for purposes 74.35of basic combat training, advanced individual training, annual training, and periodic 75.1inactive duty training; special training periodically made available to reserve members; 75.2and service performed in accordance with section 190.08, subdivision 3; 75.3    (12) new text begin to the extent included in federal taxable income, new text end the amount of compensation 75.4paid to Minnesota residents who are members of the armed forces of the United States or 75.5United Nations for active duty performed outside Minnesota new text begin under United States Code, new text end 75.6 new text begin title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of new text end 75.7 new text begin the United Nations new text end ; 75.8    (13) an amount, not to exceed $10,000, equal to qualified expenses related to a 75.9qualified donor's donation, while living, of one or more of the qualified donor's organs 75.10to another person for human organ transplantation. For purposes of this clause, "organ" 75.11means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 75.12"human organ transplantation" means the medical procedure by which transfer of a human 75.13organ is made from the body of one person to the body of another person; "qualified 75.14expenses" means unreimbursed expenses for both the individual and the qualified donor 75.15for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 75.16may be subtracted under this clause only once; and "qualified donor" means the individual 75.17or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 75.18individual may claim the subtraction in this clause for each instance of organ donation for 75.19transplantation during the taxable year in which the qualified expenses occur; 75.20    (14) in each of the five tax years immediately following the tax year in which an 75.21addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 75.22shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 75.23addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 75.24case of a shareholder of a corporation that is an S corporation, minus the positive value of 75.25any net operating loss under section 172 of the Internal Revenue Code generated for the 75.26tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 75.27subtraction is not allowed under this clause; 75.28    (15) to the extent included in federal taxable income, compensation paid to a 75.29nonresident who is a service member as defined in United States Code, title 10, section 75.30101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 75.31Law 108-189, section 101(2); and 75.32    (16) international economic development zone income as provided under section 75.33469.325 . new text begin ; and new text end 75.34     new text begin (17) to the extent included in federal taxable income, the amount of national service new text end 75.35 new text begin educational awards received from the National Service Trust under United States Code, new text end 76.1 new text begin title 42, sections 12601 to 12604, for service in an approved AmeriCorps national service new text end 76.2 new text begin program. new text end 76.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for tax years beginning new text end 76.4 new text begin after December 31, 2004, except that clause (17) is effective for tax years beginning new text end 76.5 new text begin after December 31, 2006. new text end 76.6    Sec. 4. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read: 76.7    Subd. 19c. Corporations; additions to federal taxable income. For corporations, 76.8there shall be added to federal taxable income: 76.9    (1) the amount of any deduction taken for federal income tax purposes for income, 76.10excise, or franchise taxes based on net income or related minimum taxes, including but not 76.11limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 76.12another state, a political subdivision of another state, the District of Columbia, or any 76.13foreign country or possession of the United States; 76.14    (2) interest not subject to federal tax upon obligations of: the United States, its 76.15possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 76.16state, any of its political or governmental subdivisions, any of its municipalities, or any 76.17of its governmental agencies or instrumentalities; the District of Columbia; or Indian 76.18tribal governments; 76.19    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 76.20Revenue Code; 76.21    (4) the amount of any net operating loss deduction taken for federal income tax 76.22purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 76.23deduction under section 810 of the Internal Revenue Code; 76.24    (5) the amount of any special deductions taken for federal income tax purposes 76.25under sections 241 to 247 and 965 of the Internal Revenue Code; 76.26    (6) losses from the business of mining, as defined in section 290.05, subdivision 1, 76.27clause (a), that are not subject to Minnesota income tax; 76.28    (7) the amount of any capital losses deducted for federal income tax purposes under 76.29sections 1211 and 1212 of the Internal Revenue Code; 76.30    (8) the exempt foreign trade income of a foreign sales corporation under sections 76.31921(a) and 291 of the Internal Revenue Code; 76.32    (9) the amount of percentage depletion deducted under sections 611 through 614 and 76.33291 of the Internal Revenue Code; 76.34    (10) for certified pollution control facilities placed in service in a taxable year 76.35beginning before December 31, 1986, and for which amortization deductions were elected 77.1under section 169 of the Internal Revenue Code of 1954, as amended through December 77.231, 1985, the amount of the amortization deduction allowed in computing federal taxable 77.3income for those facilities; 77.4    (11) the amount of any deemed dividend from a foreign operating corporation 77.5determined pursuant to section 290.17, subdivision 4, paragraph (g); 77.6    (12) the amount of a partner's pro rata share of net income which does not flow 77.7through to the partner because the partnership elected to pay the tax on the income under 77.8section 6242(a)(2) of the Internal Revenue Code; 77.9    (13) the amount of net income excluded under section 114 of the Internal Revenue 77.10Code; 77.11    (14) any increase in subpart F income, as defined in section 952(a) of the Internal 77.12Revenue Code, for the taxable year when subpart F income is calculated without regard 77.13to the provisions of section 103 of Public Law 109-222; 77.14    (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 77.15and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 77.16has an activity that in the taxable year generates a deduction for depreciation under 77.17section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 77.18that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 77.19under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 77.20depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 77.21amount of the loss from the activity that is not allowed in the taxable year. In succeeding 77.22taxable years when the losses not allowed in the taxable year are allowed, the depreciation 77.23under section 168(k)(1)(A) and (k)(4)(A) is allowed; 77.24    (16) 80 percent of the amount by which the deduction allowed by section 179 of the 77.25Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 77.26Revenue Code of 1986, as amended through December 31, 2003; 77.27    (17) to the extent deducted in computing federal taxable income, the amount of the 77.28deduction allowable under section 199 of the Internal Revenue Code; and 77.29    (18) the exclusion allowed under section 139A of the Internal Revenue Code for 77.30federal subsidies for prescription drug plans new text begin ; and new text end 77.31     new text begin (19) the amount of expenses disallowed under section 290.10, subdivision 2 new text end . 77.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 77.33 new text begin December 31, 2006. new text end 77.34    Sec. 5. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision 77.35to read: 78.1     new text begin Subd. 34. new text end new text begin Investment tax credit. new text end new text begin (a) A credit is allowed against the tax imposed by new text end 78.2 new text begin this chapter for a qualified taxpayer's investment in a qualified new business venture. The new text end 78.3 new text begin credit shall equal 25 percent of the taxpayer's investment made in the business, but shall new text end 78.4 new text begin not exceed the lesser of: new text end 78.5     new text begin (1) the liability for tax under this chapter, including the applicable alternative new text end 78.6 new text begin minimum tax; new text end 78.7     new text begin (2) $25,000 for an individual not part of a partnership; or new text end 78.8     new text begin (3) $300,000 for a pass-through entity. new text end 78.9     new text begin (b) For purposes of this subdivision, a qualified taxpayer means: new text end 78.10     new text begin (1) an accredited investor within the meaning of Regulation D of the Securities and new text end 78.11 new text begin Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether new text end 78.12 new text begin part of a pass-through entity or not; and new text end 78.13     new text begin (2) an accredited investor who does not own, control, or hold power to vote 20 new text end 78.14 new text begin percent or more of the outstanding securities of the qualified business venture in which the new text end 78.15 new text begin eligible investment is proposed. new text end 78.16     new text begin (c) Pass-through entities and individuals may apply to the commissioner of new text end 78.17 new text begin employment and economic development for certification as a qualifying pass-through new text end 78.18 new text begin entity or individual. The application must be in the form and made under the procedures new text end 78.19 new text begin specified by the commissioner of employment and economic development. The new text end 78.20 new text begin commissioner of employment and economic development may provide certificates new text end 78.21 new text begin entitling investors to tax credit under this subdivision, but must not issue a total amount of new text end 78.22 new text begin certificates of more than $2,000,000. In awarding certificates under this paragraph, the new text end 78.23 new text begin commissioner of employment and economic development shall award them to qualified new text end 78.24 new text begin applicants in the order in which the applications are received. new text end 78.25     new text begin (d) Each pass-through entity must provide each investor a statement indicating the new text end 78.26 new text begin investor's share of the credit amount certified to the pass-through entity under paragraph new text end 78.27 new text begin (c) based on its share of the pass-through entity's assets. The credit shall not exceed new text end 78.28 new text begin $25,000 for each individual part of a pass-through entity. new text end 78.29     new text begin (e) If the amount of the credit under this subdivision or any taxable year exceeds the new text end 78.30 new text begin limitation under paragraph (a), clause (1), the excess shall be a credit carryover to each new text end 78.31 new text begin of the ten succeeding years but shall not exceed $25,000 for an individual not part of a new text end 78.32 new text begin partnership and $300,000 for a pass-through entity. The entire amount of the excess new text end 78.33 new text begin unused credit must be carried first to the earliest of the taxable years to which the credit new text end 78.34 new text begin may be carried, and then to each successive year to which the credit may be carried. The new text end 78.35 new text begin amount of the unused credit that may be added under this paragraph may not exceed the new text end 78.36 new text begin taxpayer's liability for tax less the credit for the taxable year. new text end 79.1     new text begin (f) Unless otherwise provided under the rules of the Department of Employment and new text end 79.2 new text begin Economic Development, a business is a qualified business venture for purposes of this new text end 79.3 new text begin subdivision only if the business satisfies all of the following conditions: new text end 79.4     new text begin (1) the business has its headquarters in Minnesota; new text end 79.5     new text begin (2) at least 51 percent of the business's employees are employed in Minnesota; new text end 79.6     new text begin (3) the business is engaged in, or is committed to engage in: new text end 79.7     new text begin (i) manufacturing, processing, or assembling biotechnology or medical device new text end 79.8 new text begin products, including biotechnology and device products for use in agriculture; new text end 79.9     new text begin (ii) conducting research in and development of biotechnology or medical device new text end 79.10 new text begin products or services; or new text end 79.11     new text begin (iii) developing a new biotechnology or medical device product or business process; new text end 79.12     new text begin (4) the business is not engaged in real estate development, insurance, banking, new text end 79.13 new text begin lending, lobbying, political consulting, wholesale or retail trade, leisure, hospitality, new text end 79.14 new text begin transportation, construction, or professional services provided by attorneys, accountants, new text end 79.15 new text begin business consultants, physicians, or health care consultants; new text end 79.16     new text begin (5) the business has less than 25 employees; new text end 79.17     new text begin (6) the business has not been in operation for more than ten consecutive years; new text end 79.18     new text begin (7) the business has not received more than $1,000,000 in investments that have new text end 79.19 new text begin qualified for and received tax credits under this section; new text end 79.20     new text begin (8) the business has less than $1,000,000 in annual gross sales receipts; new text end 79.21     new text begin (9) the business is not a subsidiary or an affiliate of a business that employs more new text end 79.22 new text begin than 100 employees or has gross sales receipts for the previous year of more than new text end 79.23 new text begin $1,000,000, computed by aggregating all of the employees and gross sales receipts of the new text end 79.24 new text begin business entities affiliated with the business; and new text end 79.25     new text begin (10) the business has not received private equity investments of more than new text end 79.26 new text begin $2,000,000. new text end 79.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 79.28 new text begin December 31, 2009. new text end 79.29    Sec. 6. Minnesota Statutes 2006, section 290.0677, subdivision 1, is amended to read: 79.30    Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax 79.31due under this chapter equal to $59 for each month or portion thereof that the individual 79.32was in active military service in a designated area after September 11, 2001, new text begin and before new text end 79.33 new text begin January 1, 2007, new text end while a Minnesota domiciliary. 80.1    (b) new text begin An individual is allowed a credit against the tax due under this chapter equal to new text end 80.2 new text begin $120 for each month or portion thereof that the individual was in active military service in new text end 80.3 new text begin a designated area after December 31, 2006, while a Minnesota domiciliary. new text end 80.4     new text begin (c) new text end For active service performed after September 11, 2001, and before December 31, 80.52006, the individual may claim the credit in the taxable year beginning after December 31, 80.62005, and before January 1, 2007. 80.7    (c) new text begin (d) new text end For active service performed after December 31, 2006, the individual may 80.8claim the credit for the taxable year in which the active service was performed. 80.9    (d) new text begin (e) new text end If a Minnesota domiciliary is killed while performing active military service 80.10in a designated area, the individual's surviving spouse or dependent child may take the 80.11credit in the taxable year of the death. If a Minnesota domiciliary was killed while 80.12performing active military service in a designated area between September 11, 2001, and 80.13December 31, 2006, the individual's surviving spouse or dependent child may claim this 80.14credit in the taxable year beginning after December 31, 2005, and before January 1, 2007 new text begin new text end 80.15 new text begin an individual entitled to the credit died prior to January 1, 2006, the individual's estate or new text end 80.16 new text begin heirs at law, if the individual's probate estate has closed or the estate was not probated, new text end 80.17 new text begin may claim the credit new text end . 80.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 80.19 new text begin December 31, 2006, except that paragraph (e) is effective retroactively for tax years new text end 80.20 new text begin beginning after December 31, 2005. new text end 80.21    Sec. 7. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read: 80.22    Subd. 3. Exemption amount. (a) For purposes of computing the alternative 80.23minimum tax, the exemption amount is: 80.24    (1) for taxable years beginning before January 1, 2006, the exemption determined 80.25under section 55(d) of the Internal Revenue Code, as amended through December 31, 80.261992; and 80.27    (2) new text begin , new text end for taxable years beginning after December 31, 2005, $60,000 for married 80.28couples filing joint returns, $30,000 for married individuals filing separate returns, estates, 80.29and trusts, and $45,000 for unmarried individuals. 80.30    (b) The exemption amount determined under this subdivision is subject to the phase 80.31out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 80.32taxable income as determined under this section must be substituted in the computation 80.33of the phase out new text begin , and the income threshold used in the phaseout must be adjusted for new text end 80.34 new text begin inflation as provided in paragraph (c) new text end . 81.1    (c) For taxable years beginning after December 31, 2006, the exemption amount 81.2under paragraph (a), clause (2), new text begin and the income threshold for the phaseout under paragraph new text end 81.3 new text begin (b) new text end must be adjusted for inflation. The commissioner shall make the inflation adjustments 81.4in accordance with section 1(f) of the Internal Revenue Code except that for the purposes 81.5of this subdivision the percentage increase must be determined from the year starting 81.6September 1, 2005, and ending August 31, 2006, as the base year for adjusting for inflation 81.7for the tax year beginning after December 31, 2006. new text begin The commissioner shall adjust the new text end 81.8 new text begin exemption amount and phaseout threshold by the percentage determined pursuant to the new text end 81.9 new text begin provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) new text end 81.10 new text begin the word "2005" shall be substituted for the word "1992." For 2007, the commissioner new text end 81.11 new text begin shall then determine the percentage change from the 12 months ending on August 31, new text end 81.12 new text begin 2005, to the 12 months ending on August 31, 2006, and in each subsequent year, from the new text end 81.13 new text begin 12 months ending on August 31, 2005, to the 12 months ending on August 31 of the year new text end 81.14 new text begin preceding the taxable year. The exemption amount and phaseout threshold as adjusted new text end 81.15 new text begin must be rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the new text end 81.16 new text begin nearest $10 amount. new text end The determination of the commissioner under this subdivision is not 81.17a rule under the Administrative Procedure Act. 81.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 81.19 new text begin December 31, 2006. new text end 81.20    Sec. 8. Minnesota Statutes 2006, section 290.10, is amended to read: 81.21290.10 NONDEDUCTIBLE ITEMS. 81.22     new text begin Subdivision 1. new text end new text begin Expenses, interest, and taxes. new text end Except as provided in section 290.17, 81.23subdivision 4 , paragraph (i), in computing the net income of a taxpayer no deduction 81.24shall in any case be allowed for expenses, interest and taxes connected with or allocable 81.25against the production or receipt of all income not included in the measure of the tax 81.26imposed by this chapter, except that for corporations engaged in the business of mining 81.27or producing iron ore, the mining of which is subject to the occupation tax imposed by 81.28section 298.01, subdivision 4, this shall not prevent the deduction of expenses and other 81.29items to the extent that the expenses and other items are allowable under this chapter and 81.30are not deductible, capitalizable, retainable in basis, or taken into account by allowance 81.31or otherwise in computing the occupation tax and do not exceed the amounts taken for 81.32federal income tax purposes for that year. Occupation taxes imposed under chapter 298, 81.33royalty taxes imposed under chapter 299, or depletion expenses may not be deducted 81.34under this clause new text begin subdivision new text end . 82.1     new text begin Subd. 2. new text end new text begin Fines, fees, and penalties. new text end new text begin (a) Except as provided in this subdivision, no new text end 82.2 new text begin deduction from taxable income for a trade or business expense under section 162(a) of new text end 82.3 new text begin the Internal Revenue Code shall be allowed for any amount paid or incurred, whether by new text end 82.4 new text begin suit, agreement, or otherwise, to, or at the direction of, a government or entity described in new text end 82.5 new text begin paragraph (d) in relation to the violation of any law or the investigation or inquiry by such new text end 82.6 new text begin government or entity into the potential violation of any law. new text end 82.7     new text begin (b) Exception for amounts constituting restitution or paid to come into compliance new text end 82.8 new text begin with the law. Paragraph (a) does not apply to any amount which: new text end 82.9     new text begin (1) the taxpayer establishes: new text end 82.10     new text begin (i) constitutes restitution, including remediation of property for damage or harm new text end 82.11 new text begin caused by or which may be caused by the violation of any law or the potential violation new text end 82.12 new text begin of any law; or new text end 82.13     new text begin (ii) is paid to come into compliance with any law which was violated or involved in new text end 82.14 new text begin the investigation or inquiry; and new text end 82.15     new text begin (2) is identified as restitution or as an amount paid to come into compliance with the new text end 82.16 new text begin law, as the case may be, in the court order or settlement agreement. new text end 82.17     new text begin This paragraph does not apply to any amount paid or incurred as reimbursement to new text end 82.18 new text begin the government or entity for the costs of any investigation or litigation. new text end 82.19     new text begin (c) Paragraph (a) does not apply to any amount paid or incurred by order of a court new text end 82.20 new text begin in a suit in which no government or entity described in paragraph (d) is a party. new text end 82.21     new text begin (d) An entity is described in this paragraph if it is: new text end 82.22     new text begin (1) a nongovernmental entity which exercises self-regulatory powers, including new text end 82.23 new text begin imposing sanctions, in connection with a qualified board or exchange, as defined in section new text end 82.24 new text begin 1256(g)(7) of the Internal Revenue Code, or; new text end 82.25     new text begin (2) to the extent provided in regulations, a nongovernmental entity which exercises new text end 82.26 new text begin self-regulatory powers, including imposing sanctions, as part of performing an essential new text end 82.27 new text begin governmental function. new text end 82.28     new text begin (e) Paragraph (a) does not apply to any amount paid or incurred as taxes due. new text end 82.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 82.30 new text begin December 31, 2006, and for fines, fees, and penalties assessed after the date of enactment. new text end 82.31    Sec. 9. Minnesota Statutes 2006, section 290.17, subdivision 2, is amended to read: 82.32    Subd. 2. Income not derived from conduct of a trade or business. The income of 82.33a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 82.34business must be assigned in accordance with paragraphs (a) to (f): 83.1    (a)(1) Subject to paragraphs (a)(2), new text begin and new text end (a)(3), and (a)(4), income from wages as 83.2defined in section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, 83.3and to the extent that, the work of the employee is performed within it; all other income 83.4from such sources is treated as income from sources without this state. 83.5    Severance pay shall be considered income from labor or personal or professional 83.6services. 83.7    (2) In the case of an individual who is a nonresident of Minnesota and who is an 83.8athlete or entertainer, income from compensation for labor or personal services performed 83.9within this state shall be determined in the following manner: 83.10    (i) The amount of income to be assigned to Minnesota for an individual who is a 83.11nonresident salaried athletic team employee shall be determined by using a fraction in 83.12which the denominator contains the total number of days in which the individual is under 83.13a duty to perform for the employer, and the numerator is the total number of those days 83.14spent in Minnesota. For purposes of this paragraph, off-season training activities, unless 83.15conducted at the team's facilities as part of a team imposed program, are not included in 83.16the total number of duty days. Bonuses earned as a result of play during the regular season 83.17or for participation in championship, play-off, or all-star games must be allocated under 83.18the formula. Signing bonuses are not subject to allocation under the formula if they are 83.19not conditional on playing any games for the team, are payable separately from any other 83.20compensation, and are nonrefundable; and 83.21    (ii) The amount of income to be assigned to Minnesota for an individual who is a 83.22nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's 83.23athletic or entertainment performance in Minnesota shall be determined by assigning to 83.24this state all income from performances or athletic contests in this state. 83.25    (3) For purposes of this section, amounts received by a nonresident as "retirement 83.26income" as defined in section (b)(1) of the State Income Taxation of Pension Income 83.27Act, Public Law 104-95, are not considered income derived from carrying on a trade 83.28or business or from wages or other compensation for work an employee performed in 83.29Minnesota, and are not taxable under this chapter. 83.30    (4) Wages, otherwise assigned to this state under clause (1) and not qualifying under 83.31clause (3), are not taxable under this chapter if the following conditions are met: 83.32    (i) the recipient was not a resident of this state for any part of the taxable year in 83.33which the wages were received; and 83.34    (ii) the wages are for work performed while the recipient was a resident of this state. 83.35    (b) Income or gains from tangible property located in this state that is not employed 83.36in the business of the recipient of the income or gains must be assigned to this state. 84.1    (c) Income or gains from intangible personal property not employed in the business 84.2of the recipient of the income or gains must be assigned to this state if the recipient of the 84.3income or gains is a resident of this state or is a resident trust or estate. 84.4    Gain on the sale of a partnership interest is allocable to this state in the ratio of the 84.5original cost of partnership tangible property in this state to the original cost of partnership 84.6tangible property everywhere, determined at the time of the sale. If more than 50 percent 84.7of the value of the partnership's assets consists of intangibles, gain or loss from the sale 84.8of the partnership interest is allocated to this state in accordance with the sales factor of 84.9the partnership for its first full tax period immediately preceding the tax period of the 84.10partnership during which the partnership interest was sold. 84.11    Gain on the sale of goodwill or income from a covenant not to compete that is 84.12connected with a business operating all or partially in Minnesota is allocated to this state 84.13to the extent that the income from the business in the year preceding the year of sale was 84.14assignable to Minnesota under subdivision 3. 84.15    When an employer pays an employee for a covenant not to compete, the income 84.16allocated to this state is in the ratio of the employee's service in Minnesota in the calendar 84.17year preceding leaving the employment of the employer over the total services performed 84.18by the employee for the employer in that year. 84.19    (d) Income from winnings on a bet made by an individual while in Minnesota is 84.20assigned to this state. In this paragraph, "bet" has the meaning given in section 609.75, 84.21subdivision 2 , as limited by section 609.75, subdivision 3, clauses (1), (2), and (3). 84.22    (e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 84.23taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile. 84.24    (f) For the purposes of this section, working as an employee shall not be considered 84.25to be conducting a trade or business. 84.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 84.27 new text begin December 31, 2006. new text end 84.28    Sec. 10. Minnesota Statutes 2006, section 290.92, is amended by adding a subdivision 84.29to read: 84.30     new text begin Subd. 31. new text end new text begin Payments to persons who are not employees. new text end new text begin (a) For purposes of this new text end 84.31 new text begin subdivision, "contractor" means a person carrying on a trade or business described in new text end 84.32 new text begin industry code numbers 23 through 238990 of the North American Industry Classification new text end 84.33 new text begin System. new text end 84.34     new text begin (b) A contractor or a third-party bulk filer acting on behalf of a contractor, who new text end 84.35 new text begin makes payments to an individual, carrying on a trade or business described in paragraph new text end 85.1 new text begin (a) as a sole proprietorship, must deduct and withhold two percent of the payment as new text end 85.2 new text begin Minnesota withholding tax when the amount the contractor paid to that individual during new text end 85.3 new text begin the calendar year exceeds $600. new text end 85.4     new text begin (c) A payment subject to withholding under this subdivision must be treated as if new text end 85.5 new text begin the payment were a wage paid by an employer to an employee. The requirements in the new text end 85.6 new text begin definitions of "employee" and "employer" in subdivision 1 relating to geographic location new text end 85.7 new text begin apply in determining whether withholding tax applies under this subdivision, but without new text end 85.8 new text begin regard to whether the contractor or the individual otherwise satisfy the definition of an new text end 85.9 new text begin employer or an employee. Each recipient of a payment subject to withholding under this new text end 85.10 new text begin subdivision must furnish the contractor with a statement of the recipient's name, address, new text end 85.11 new text begin and Social Security account number. new text end 85.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for payments made after December new text end 85.13 new text begin 31, 2007. new text end 85.14    Sec. 11. new text begin AUDIT AND REPORT TO LEGISLATURE. new text end 85.15     new text begin The commissioner must conduct a random sample audit of withholdings under new text end 85.16 new text begin Minnesota Statutes, section 290.92, subdivision 31, and returns associated with those new text end 85.17 new text begin withholdings. The commissioner must report on the findings of the audit to the committees new text end 85.18 new text begin of the senate and house of representatives with jurisdiction over taxes, in compliance with new text end 85.19 new text begin Minnesota Statutes, sections 3.195 and 3.197, no later than February 1, 2010. The report new text end 85.20 new text begin must also include information on the number and amount of payments received, and on new text end 85.21 new text begin the types of contractors making payments, grouped by specialty skills definitions provided new text end 85.22 new text begin in the North American Industry Classification System. new text end 85.23ARTICLE 5 85.24SALES AND USE TAX 85.25    Section 1. Minnesota Statutes 2006, section 297A.668, is amended by adding a 85.26subdivision to read: 85.27     new text begin Subd. 8. new text end new text begin Manufactured and modular housing. new text end new text begin (a) Notwithstanding other new text end 85.28 new text begin subdivisions of this section, a sale of a manufactured or modular home shall be sourced to new text end 85.29 new text begin the site where the housing is first set up or installed. new text end 85.30     new text begin (b) For purposes of this section, "manufactured home" has the meaning given new text end 85.31 new text begin in section 327.31, subdivision 6. For purposes of this section, "modular home" means new text end 85.32 new text begin a building or structural unit that has been substantially manufactured or constructed, new text end 85.33 new text begin in whole or in part, at an off-site location, with the final assembly occurring on-site new text end 86.1 new text begin alone or with other units and attached to a permanent foundation site and occupied new text end 86.2 new text begin as a single-family dwelling. Modular home construction must comply with applicable new text end 86.3 new text begin standards adopted in Minnesota Rules authorized under chapter 16B. A modular home new text end 86.4 new text begin does not include a structure subject to the requirements of the National Manufactured new text end 86.5 new text begin Home Construction and Safety Standards Act of 1974 or a manufactured home. new text end 86.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 86.7 new text begin June 30, 2007. new text end 86.8    Sec. 2. Minnesota Statutes 2006, section 297A.70, subdivision 8, is amended to read: 86.9    Subd. 8. Regionwide public safety radio communication system; products and 86.10services. Products and services including, but not limited to, end user equipment used 86.11for construction, ownership, operation, maintenance, and enhancement of the backbone 86.12system of the regionwide public safety radio communication system established under 86.13sections 403.21 to , are exempt. For purposes of this subdivision, backbone 86.14system is defined in section 403.21, subdivision 9. This subdivision is effective for 86.15purchases, sales, storage, use, or consumption for use in the first and second phases of the 86.16system, as defined in section 403.21, subdivisions 3, 10, and 11, and that portion of the 86.17third phase of the system that is located in the southeast district of the State Patrol and 86.18the counties of Benton, Sherburne, Stearns, and Wright new text begin , and that portion of the system new text end 86.19 new text begin that is located in Itasca County new text end . 86.20    Sec. 3. Minnesota Statutes 2006, section 297A.71, subdivision 23, is amended to read: 86.21    Subd. 23. Construction materials for qualified low-income housing projects. (a) 86.22Purchases of materials and supplies used or consumed in and equipment incorporated into 86.23the construction, improvement, or expansion of qualified low-income housing projects are 86.24exempt from the tax imposed under this chapter if the owner of the qualified low-income 86.25housing project is: 86.26    (1) the public housing agency or housing and redevelopment authority of a political 86.27subdivision; 86.28    (2) an entity exercising the powers of a housing and redevelopment authority within 86.29a political subdivision; 86.30    (3) a limited partnership in which the sole new text begin or managing new text end general partner is an 86.31authority under clause (1) or an entity under clause (2) new text begin or (4) new text end ; 86.32    (4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying 86.33under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or 87.1    (5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604, 87.2for a qualified low-income housing project described in paragraph (b), clause (5). 87.3    This exemption applies regardless of whether the purchases are made by the owner 87.4of the facility or a contractor. 87.5    (b) For purposes of this exemption, "qualified low-income housing project" means: 87.6    (1) a housing or mixed use project in which at least 20 percent of the residential units 87.7are qualifying low-income rental housing units as defined in section 273.126; 87.8    (2) a federally assisted low-income housing project financed by a mortgage insured 87.9or held by the United States Department of Housing and Urban Development under 87.10United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United 87.11States Code, title 42, section 1437f; the Native American Housing Assistance and 87.12Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar 87.13successor federal low-income housing program; 87.14    (3) a qualified low-income housing project as defined in United States Code, title 87.1526, section 42(g), meeting all of the requirements for a low-income housing credit under 87.16section 42 of the Internal Revenue Code regardless of whether the project actually applies 87.17for or receives a low-income housing credit; 87.18    (4) a project that will be operated in compliance with Internal Revenue Service 87.19revenue procedure 96-32; or 87.20    (5) a housing or mixed use project in which all or a portion of the residential units 87.21are subject to the requirements of section 5 of the United States Housing Act of 1937. 87.22    (c) For a project, a portion of which is not used for low-income housing units, 87.23the amount of purchases that are exempt under this subdivision must be determined by 87.24multiplying the total purchases, as specified in paragraph (a), by the ratio of: 87.25    (1) the total gross square footage of units subject to the income limits under section 87.26273.126 , the financing for the project, the federal low-income housing tax credit, revenue 87.27procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable 87.28to the project; and 87.29    (2) the total gross square footage of all units in the project. 87.30    (d) The tax must be imposed and collected as if the rate under section 297A.62, 87.31subdivision 1 , applied, and then refunded in the manner provided in section 297A.75. 87.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 87.33 new text begin June 30, 2009. new text end 87.34    Sec. 4. Minnesota Statutes 2006, section 297A.99, subdivision 1, is amended to read: 88.1    Subdivision 1. Authorization; scope. (a) A political subdivision of this state may 88.2impose a general sales tax if permitted by special law new text begin enacted prior to January 1, 2008, new text end or 88.3if the political subdivision enacted and imposed the tax before the effective date of section 88.4477A.016 and its predecessor provision. 88.5    (b) This section governs the imposition of a general sales tax by the political 88.6subdivision. The provisions of this section preempt the provisions of any special law: 88.7    (1) enacted before June 2, 1997, or 88.8    (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 88.9provision from this section's rules by reference. 88.10    (c) This section does not apply to or preempt a sales tax on motor vehicles or a 88.11special excise tax on motor vehicles. 88.12     new text begin (d) From June 1, 2007, through December 31, 2010, a political subdivision must not new text end 88.13 new text begin advertise, promote, expend funds, or hold a referendum to support imposing a local option new text end 88.14 new text begin sales tax unless authorized by a special law enacted prior to June 1, 2007. new text end 88.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 88.16    Sec. 5. Minnesota Statutes 2006, section 297B.03, is amended to read: 88.17297B.03 EXEMPTIONS. 88.18    There is specifically exempted from the provisions of this chapter and from 88.19computation of the amount of tax imposed by it the following: 88.20    (1) purchase or use, including use under a lease purchase agreement or installment 88.21sales contract made pursuant to section 465.71, of any motor vehicle by the United States 88.22and its agencies and instrumentalities and by any person described in and subject to the 88.23conditions provided in section 297A.67, subdivision 11; 88.24    (2) purchase or use of any motor vehicle by any person who was a resident of 88.25another state or country at the time of the purchase and who subsequently becomes a 88.26resident of Minnesota, provided the purchase occurred more than 60 days prior to the date 88.27such person began residing in the state of Minnesota and the motor vehicle was registered 88.28in the person's name in the other state or country; 88.29    (3) purchase or use of any motor vehicle by any person making a valid election to be 88.30taxed under the provisions of section 297A.90; 88.31    (4) purchase or use of any motor vehicle previously registered in the state of 88.32Minnesota when such transfer constitutes a transfer within the meaning of section 118, 88.33331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal 88.34Revenue Code of 1986, as amended through December 31, 1999; 89.1    (5) purchase or use of any vehicle owned by a resident of another state and leased 89.2to a Minnesota-based private or for-hire carrier for regular use in the transportation of 89.3persons or property in interstate commerce provided the vehicle is titled in the state of 89.4the owner or secured party, and that state does not impose a sales tax or sales tax on 89.5motor vehicles used in interstate commerce; 89.6    (6) purchase or use of a motor vehicle by a private nonprofit or public educational 89.7institution for use as an instructional aid in automotive training programs operated by the 89.8institution. "Automotive training programs" includes motor vehicle body and mechanical 89.9repair courses but does not include driver education programs; 89.10    (7) purchase of a motor vehicle for use as an ambulance by an ambulance service 89.11licensed under section 144E.10; 89.12    (8) purchase of a motor vehicle by or for a public library, as defined in section 89.13134.001, subdivision 2 , as a bookmobile or library delivery vehicle; 89.14    (9) purchase of a ready-mixed concrete truck; 89.15    (10) purchase or use of a motor vehicle by a town for use exclusively for road 89.16maintenance, including snowplows and dump trucks, but not including automobiles, 89.17vans, or pickup trucks; 89.18    (11) purchase or use of a motor vehicle by a corporation, society, association, 89.19foundation, or institution organized and operated exclusively for charitable, religious, 89.20or educational purposes, except a public school, university, or library, but only if the 89.21vehicle is: 89.22    (i) a truck, as defined in section 168.011, a bus, as defined in section 168.011, or a 89.23passenger automobile, as defined in section 168.011, if the automobile is designed and 89.24used for carrying more than nine persons including the driver; and 89.25    (ii) intended to be used primarily to transport tangible personal property or 89.26individuals, other than employees, to whom the organization provides service in 89.27performing its charitable, religious, or educational purpose; 89.28    (12) purchase of a motor vehicle for use by a transit provider exclusively to provide 89.29transit service is exempt if the transit provider is either (i) receiving financial assistance or 89.30reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 89.31473.388 , or 473.405; 89.32    (13) purchase or use of a motor vehicle by a qualified business, as defined in section 89.33469.310 , located in a job opportunity building zone, if the motor vehicle is principally 89.34garaged in the job opportunity building zone and is primarily used as part of or in direct 89.35support of the person's operations carried on in the job opportunity building zone. The 89.36exemption under this clause applies to sales, if the purchase was made and delivery 90.1received during the duration of the job opportunity building zone. The exemption under 90.2this clause also applies to any local sales and use tax new text begin ; new text end 90.3     new text begin (14) purchase of a leased vehicle by the lessee who was a participant in a new text end 90.4 new text begin lease-to-own program from a charitable organization that is: new text end 90.5     new text begin (i) described in section 501(c)(3) of the Internal Revenue Code; and new text end 90.6     new text begin (ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4 new text end . 90.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 90.8 new text begin June 30, 2007. new text end 90.9    Sec. 6. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991, 90.10chapter 291, article 8, section 22, and Laws 1998, chapter 389, article 8, section 25, and 90.11Laws 2003, First Special Session chapter 21, article 8, section 11, is amended to read: 90.12    Subd. 2. Notwithstanding Minnesota Statutes, Section 477A.016, or any other law, 90.13ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance, 90.14impose an additional sales tax of up to one and one-half new text begin two and one-quarter new text end percent on 90.15sales transactions which are described in Minnesota Statutes 2000, Section 297A.01, 90.16Subdivision 3, Clause (c). When the city council determines that the taxes imposed 90.17under this subdivision and under new text begin Laws 1998, chapter 389, article 8, new text end section 26 new text begin , new text end at a rate 90.18of one-half of one percent have produced revenue sufficient to pay (1) the debt service 90.19on bonds in a principal amount of $8,000,000 issued for capital improvements to the 90.20Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds 90.21originally issued in the principal amount of $4,970,000 to finance capital improvements 90.22to the Great Lakes Aquarium since the imposition of the taxes at the rate of one and 90.23one-half percent, the rate of the tax under this subdivision is reduced to new text begin by one-half of new text end 90.24one percent. The imposition of this tax shall not be subject to voter referendum under 90.25either state law or city charter provisions. new text begin When the city council determines that the taxes new text end 90.26 new text begin imposed under this subdivision at a rate of three-quarters of one percent and other sources new text end 90.27 new text begin of revenue produce revenue sufficient to pay debt service on bonds in the principal amount new text end 90.28 new text begin of $37,931,000 plus issuance and discount costs, issued for capital improvements at the new text end 90.29 new text begin Duluth Entertainment and Convention Center, which include a new arena, the rate of tax new text end 90.30 new text begin under this subdivision must be reduced by three-quarters of one percent. new text end 90.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after the governing body of new text end 90.32 new text begin the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section new text end 90.33 new text begin , subdivisions 2 and 3. new text end 91.1    Sec. 7. Laws 1987, chapter 168, section 2, is amended to read: 91.2    Sec. 2. LODGING TAX IN TOWNS. 91.3    Notwithstanding Minnesota Statutes, section 477A.016, or other law, the Cook 91.4county board may impose a tax of up to two percent on the gross receipts from the 91.5furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court or 91.6resort, other than the renting or leasing of it for a continuous period of 30 days or more, 91.7located in the towns of Lutsen, Tofte, and Schroeder. The tax may be imposed in one or 91.8more of the towns. The tax may be imposed in a town only with the agreement of the 91.9town expressed by its voters at an annual or special meeting. The tax shall be collected 91.10by and its proceeds paid to the county. The proceeds of the tax shall be dedicated for the 91.11construction, debt service, and maintenance of a public recreational facility within the 91.12towns. new text begin The proceeds of the tax must be used to fund a new Cook County Event and new text end 91.13 new text begin Visitors Bureau. new text end 91.14    Sec. 8. Laws 1993, chapter 375, article 9, section 45, subdivision 2, as amended by 91.15Laws 1997, chapter 231, article 7, section 36, is amended to read: 91.16    Subd. 2. Use of revenues. (a) Revenues received from taxes authorized by 91.17subdivision 1 shall be used by Cook county to pay the cost of collecting the tax and to pay 91.18all or a portion of the costs of expanding and improving the health care facility located 91.19in the county and known as North Shore hospital. Authorized costs include, but are not 91.20limited to, securing or paying debt service on bonds or other obligations issued to finance 91.21the expansion and improvement of North Shore hospital. The total capital expenditures 91.22payable from bond proceeds, excluding investment earnings on bond proceeds and tax 91.23revenues, shall not exceed $4,000,000. 91.24    (b) Additional revenues received from taxes authorized by subdivision 1 may be 91.25used by Cook county to pay all or a portion of the costs of betterment of North Shore 91.26care center and providing additional improvements to North Shore hospital. Authorized 91.27costs include, but are not limited to, securing or paying debt service on bonds or other 91.28obligations issued to finance the remodeling of North Shore care center and additional 91.29improvements to North Shore hospital. The total capital expenditures payable from bond 91.30proceeds, excluding investment earnings on bond proceeds and tax revenues, shall not 91.31exceed $2,200,000. 91.32     new text begin (c) If approved by the voters at a special election held before December 31, 2007, new text end 91.33 new text begin additional revenues received from taxes authorized by subdivision 1 may be used by Cook new text end 91.34 new text begin County to pay for the following projects: new text end 92.1     new text begin (1) construction and improvements to community centers, museums, interpretive new text end 92.2 new text begin centers, associated trails, and recreation areas, including, but not limited to, improvements new text end 92.3 new text begin and additions to the skateboard park, hockey rink, ball fields, community center addition, new text end 92.4 new text begin county parking area, tennis courts, and all associated improvements; new text end 92.5     new text begin (2) construction and improvement to the Grand Marais pool; new text end 92.6     new text begin (3) construction and improvement to the Grand Marais Public Library; and new text end 92.7     new text begin (4) debt service to retire bonds for improvements to the Superior National Golf new text end 92.8 new text begin Course. new text end 92.9     new text begin Authorized expenses include, but are not limited to, paying construction expenses new text end 92.10 new text begin related to these improvements, and paying debt service on bonds or other obligations new text end 92.11 new text begin issued to finance acquisition and construction of these improvements. new text end 92.12    Sec. 9. Laws 1993, chapter 375, article 9, section 45, subdivision 3, as amended by 92.13Laws 1997, chapter 231, article 7, section 37, is amended to read: 92.14    Subd. 3. Expiration of taxing authority and expenditure limitation. The 92.15authority granted by subdivision 1 to Cook county to impose a sales tax shall expire 92.16when the principal and interest on any bonds or obligations issued under subdivision 4, 92.17paragraph (a),to finance the expansion and improvement of North Shore hospital described 92.18in subdivision 2, paragraph (a),have been paid, or at an earlier time as the county shall, by 92.19resolution, determine new text begin when the county determines that the amount of revenues received is new text end 92.20 new text begin sufficient to pay for the principal and interest on any bonds or obligations issued to finance new text end 92.21 new text begin the projects in subdivision 2 new text end . Any funds remaining after completion of the improvements 92.22and retirement or redemption of the bonds may be placed in the general fund of the county. 92.23    Sec. 10. Laws 1993, chapter 375, article 9, section 45, subdivision 4, as amended by 92.24Laws 1997, chapter 231, article 7, section 38, is amended to read: 92.25    Subd. 4. Bonds. (a) Cook county may issue general obligation bonds in an amount 92.26not to exceed $4,000,000 for the expansion and improvement of North Shore hospital. 92.27    (b) Additionally, Cook county may issue general obligation bonds in an amount 92.28not to exceed $2,200,000 for the betterment of North Shore care center and additional 92.29improvements to North Shore hospital. 92.30    (c) The bonds may be issued without election under Minnesota Statutes, chapter 92.31475, on the question of issuance of the bonds or a property tax to pay them. The debt 92.32represented by the bonds shall not be included in computing any debt limitations applicable 92.33to Cook county, and the levy of taxes required by Minnesota Statutes, section 475.61, to 93.1pay principal of and interest on the bonds shall not be subject to any levy limitation or be 93.2included in computing or applying any levy limitation applicable to the county. 93.3     new text begin (d) Cook County may issue bonds under Minnesota Statutes, chapter 475, to pay new text end 93.4 new text begin capital and administrative expenses for the improvements authorized in subdivision 2, new text end 93.5 new text begin paragraph (c), in an amount that does not exceed $14,000,000. An election to approve the new text end 93.6 new text begin bonds under Minnesota Statutes, section 475.58, is not required. The issuance of bonds new text end 93.7 new text begin under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. new text end 93.8 new text begin The debt represented by the bonds is not included in computing any debt limitation new text end 93.9 new text begin applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61, new text end 93.10 new text begin to pay principal and interest on the bonds is not subject to any levy limitation. new text end 93.11    Sec. 11. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to 93.12read: 93.13    Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section 93.14297A.48, subdivision 1a , 477A.016, or any other provision of law, ordinance, or city 93.15charter, if approved by the city voters at the first municipal general election held after the 93.16date of final enactment of this act or at a special election held November 2, 1999, the city 93.17of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent 93.18for the purposes specified in subdivision 3. The provisions of Minnesota Statutes, section 93.19297A.48 new text begin 297A.99 new text end , govern the imposition, administration, collection, and enforcement of 93.20the tax authorized under this subdivision. 93.21    Sec. 12. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to 93.22read: 93.23    Subd. 3. Use of revenues. new text begin (a) new text end Revenues received from taxes authorized by 93.24subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to 93.25pay for construction and improvement of the following city facilities: 93.26    (1) streets; and 93.27    (2) constructing and equipping the Proctor community activity center. 93.28    Authorized expenses include, but are not limited to, acquiring property, paying 93.29construction and operating expenses related to the development of an authorized facility, 93.30and paying debt service on bonds or other obligations, including lease obligations, issued 93.31to finance the construction, expansion, or improvement of an authorized facility. The 93.32capital expenses for all projects authorized under this paragraph that may be paid with 93.33these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance 93.34of the bonds. 94.1     new text begin (b) Additional revenues received from taxes authorized by subdivision 1, may be new text end 94.2 new text begin used by the city to pay for the following capital improvement projects: public utilities, new text end 94.3 new text begin including water, sanitary sewer, storm sewer, and electric; bikeways and trails; and parks new text end 94.4 new text begin and recreation. new text end 94.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 94.6 new text begin upon compliance by the city of Proctor with Minnesota Statutes, section 645.021, new text end 94.7 new text begin subdivision 3. new text end 94.8    Sec. 13. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to 94.9read: 94.10    Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota 94.11Statutes, chapter 475, to finance the capital expenditure and improvement projects 94.12described in subdivision 3. An election to approve the bonds under Minnesota Statutes, 94.13section 475.58, is not required. 94.14    (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, 94.15sections 275.60 and . 94.16    (c) The bonds are not included in computing any debt limitation applicable to the 94.17city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 94.18and interest on the bonds is not subject to any levy limitation. 94.19    (d) new text begin For projects described in subdivision 3, paragraph (a), new text end the aggregate principal 94.20amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital 94.21expenditures and improvements, may not exceed $3,600,000, plus an amount equal to 94.22the costs related to issuance of the bonds, including interest on the bonds. new text begin For projects new text end 94.23 new text begin described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may new text end 94.24 new text begin not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds, new text end 94.25 new text begin including interest on the bonds. new text end 94.26    (e) The sales and use and excise taxes authorized in this section may be pledged to 94.27and used for the payment of the bonds and any bonds issued to refund them only if the 94.28bonds and any refunding bonds are general obligations of the city. 94.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 94.30 new text begin upon compliance by the city of Proctor with Minnesota Statutes, section 645.021, new text end 94.31 new text begin subdivision 3. new text end 94.32    Sec. 14. Laws 2005, First Special Session chapter 3, article 5, section 39, is amended 94.33to read: 95.1    Sec. 39. CITY OF BEMIDJI. 95.2    Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes, 95.3section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to the 95.4approval of the city voters at the general election held on November 5, 2002, new text begin and at the new text end 95.5 new text begin general election held November 7, 2006, new text end the city of Bemidji may impose by ordinance 95.6a sales and use tax of one-half of one percent for the purposes specified in subdivision 95.72. The provisions of Minnesota Statutes, section 297A.99, govern the imposition, 95.8administration, collection, and enforcement of the tax authorized under this subdivision. 95.9    Subd. 2. Use of revenues. Revenues received from the tax authorized by 95.10subdivision 1 must be used for the cost of collecting and administering the tax and to pay 95.11 new text begin for the projects listed in this subdivision: new text end 95.12     new text begin (1) To pay new text end all or part of the capital or administrative costs of the acquisition, 95.13construction, and improvement of parks and trails within the city, as provided for in the 95.14city of Bemidji's parks, open space, and trail system plan, adopted by the Bemidji City 95.15Council on November 21, 2001. Authorized expenses include, but are not limited to, 95.16acquiring property, paying construction expenses related to the development of these 95.17facilities and improvements, and securing and paying debt service on bonds or other 95.18obligations issued to finance acquisition, construction, improvement, or development of 95.19parks and trails within the city of Bemidji. 95.20     new text begin (2) To pay all or part of the city's share of costs for acquisition, design, and new text end 95.21 new text begin construction of a regional event center, not to exceed $40,000,000 plus any associated new text end 95.22 new text begin bond costs. Authorized expenses include, but are not limited to, acquiring property, new text end 95.23 new text begin paying demolition and construction expenses, improving associated infrastructure, and new text end 95.24 new text begin purchasing furniture, fixtures, and equipment for the regional event center, and securing new text end 95.25 new text begin and paying debt service on bonds or other obligations issued to finance the regional event new text end 95.26 new text begin center project. new text end 95.27    Subd. 3. Bonds. new text begin (a) new text end Pursuant to the approval of the city voters at the general 95.28election held on November 5, 2002, the city of Bemidji may issue, without an additional 95.29election, general obligation bonds of the city in an amount not to exceed $9,826,000 to 95.30pay capital and administrative expenses for the acquisition, construction, improvement, 95.31and development of parks and trails as specified in subdivision 2. The debt represented by 95.32the bonds must not be included in computing any debt limitations applicable to the city, 95.33and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal 95.34of any interest on the bonds must not be subject to any levy limitations or be included in 95.35computing or applying any levy limitation applicable to the city. 96.1     new text begin (b) Pursuant to the approval of the city voters at the general election held on new text end 96.2 new text begin November 7, 2006, the city of Bemidji may issue, without an additional election, general new text end 96.3 new text begin obligation bonds of the city in an amount not to exceed $40,000,000 to pay capital and new text end 96.4 new text begin administrative expenses for the acquisition, construction, improvement, and development new text end 96.5 new text begin of the regional event center specified in subdivision 2. The debt represented by the bonds new text end 96.6 new text begin must not be included in computing any debt limitations applicable to the city, and the levy new text end 96.7 new text begin of taxes required by Minnesota Statutes, section new text end new text begin , to pay the principal of any interest new text end 96.8 new text begin on the bonds must not be subject to any levy limitations or be included in computing or new text end 96.9 new text begin applying any levy limitation applicable to the city. new text end 96.10    Subd. 4. Termination of tax. The tax imposed under subdivision 1 expires 96.11when the Bemidji City Council determines that the amount described in subdivision 3 new text begin , new text end 96.12 new text begin paragraph (a), new text end has been received from the tax to finance the capital and administrative 96.13costs for acquisition, construction, improvement, and development of parks and trails and 96.14to repay or retire at maturity the principal, interest, and premium due on any bonds issued 96.15for the park and trail improvements under subdivision 3 new text begin , paragraph (a), plus the earlier new text end 96.16 new text begin of (1) 30 years, or (2) when the city council first determines that the additional revenues new text end 96.17 new text begin received from the extension of the tax equals or exceeds the amount authorized to be spent new text end 96.18 new text begin for the regional event center under subdivision 2, clause (2) new text end . Any funds remaining after 96.19completion of the park and trail improvements new text begin authorized projects new text end and retirement or 96.20redemption of the bonds may be placed in the general fund of the city. The tax imposed 96.21under subdivision 1 may expire at an earlier time if the city so determines by ordinance. 96.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 96.23 new text begin governing body of the city of Bemidji and its chief clerical officer with Minnesota new text end 96.24 new text begin Statutes, section 645.021, subdivisions 2 and 3. new text end 96.25    Sec. 15. new text begin CITY OF CLEARWATER; TAXES AUTHORIZED. new text end 96.26     new text begin Subdivision 1. new text end new text begin Sales and use tax. new text end new text begin Notwithstanding Minnesota Statutes, section new text end 96.27 new text begin 477A.016, or any other provision of law, ordinance, or city charter, pursuant to the new text end 96.28 new text begin approval of the voters on November 7, 2006, the city of Clearwater may impose by new text end 96.29 new text begin ordinance a sales and use tax of up to one-half of one percent for the purposes specified in new text end 96.30 new text begin subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota new text end 96.31 new text begin Statutes, section 297A.99, govern the imposition, administration, collection, and new text end 96.32 new text begin enforcement of the tax authorized under this subdivision. new text end 96.33     new text begin Subd. 2. new text end new text begin Excise tax authorized. new text end new text begin Notwithstanding Minnesota Statutes, section new text end 96.34 new text begin 477A.016, or any other provision of law, ordinance, or city charter, the city of Clearwater new text end 96.35 new text begin may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up new text end 97.1 new text begin to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person new text end 97.2 new text begin engaged within the city in the business of selling motor vehicles at retail. new text end 97.3     new text begin Subd. 3. new text end new text begin Use of revenues. new text end new text begin The proceeds of the tax imposed under this section shall new text end 97.4 new text begin be used to pay for the costs of acquisition, construction, improvement, and development new text end 97.5 new text begin of a pedestrian bridge, and land and buildings for a community and recreation center. new text end 97.6     new text begin Subd. 4. new text end new text begin Bonding authority. new text end new text begin The city of Clearwater may issue bonds in an amount new text end 97.7 new text begin not to exceed $12,000,000 under Minnesota Statutes, chapter 475, to finance the capital new text end 97.8 new text begin expenditures and improvements authorized by the referendum under subdivision 3. An new text end 97.9 new text begin election to approve the bonds under Minnesota Statutes, section 475.59, is not required. new text end 97.10 new text begin The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section new text end 97.11 new text begin 275.60 or 275.61. The debt represented by the bonds must not be included in computing new text end 97.12 new text begin any debt limitations applicable to the city, and the levy of taxes required by Minnesota new text end 97.13 new text begin Statutes, section 475.61, to pay the principal or any interest on the bonds must not be new text end 97.14 new text begin subject to any levy limitation. new text end 97.15     new text begin Subd. 5. new text end new text begin Termination of tax. new text end new text begin The tax authorized under subdivision 1 terminates at new text end 97.16 new text begin the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the new text end 97.17 new text begin city council determines that sufficient funds have been raised from the tax to finance the new text end 97.18 new text begin capital and administrative costs of the improvements described in subdivision 3, plus the new text end 97.19 new text begin additional amount needed to pay the costs related to issuance of bonds under subdivision new text end 97.20 new text begin 4, including interest on the bonds. Any funds remaining after completion of the projects new text end 97.21 new text begin specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may new text end 97.22 new text begin be placed in the general fund of the city. The tax imposed under subdivision 1 may expire new text end 97.23 new text begin at an earlier time if the city so determines by ordinance. new text end 97.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 97.25 new text begin governing body of the city of Clearwater with Minnesota Statutes, section 645.021, new text end 97.26 new text begin subdivisions 2 and 3. new text end 97.27    Sec. 16. new text begin COOK COUNTY; LODGING AND ADMISSIONS TAXES. new text end 97.28     new text begin Subdivision 1. new text end new text begin Lodging tax. new text end new text begin Notwithstanding Minnesota Statutes, section new text end 97.29 new text begin 477A.016, or any other provision of law, ordinance, or city charter, the Board of new text end 97.30 new text begin Commissioners of Cook County may impose, by ordinance, a tax of up to one percent on new text end 97.31 new text begin the gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190. new text end 97.32 new text begin This tax is in addition to any tax imposed under Minnesota Statutes, section 469.190, and new text end 97.33 new text begin the total tax imposed under that section and this provision must not exceed four percent. new text end 97.34     new text begin Subd. 2. new text end new text begin Admissions and recreation tax. new text end new text begin Notwithstanding Minnesota Statutes, new text end 97.35 new text begin section 477A.016, or any other provision of law, ordinance, or city charter, the Board of new text end 98.1 new text begin Commissioners of Cook County may impose, by ordinance, a tax of up to three percent on new text end 98.2 new text begin admissions to entertainment and recreational facilities and rental of recreation equipment. new text end 98.3     new text begin In its ordinance, the Board of Commissioners of Cook County may provide that new text end 98.4 new text begin entities exempt from the tax imposed under Minnesota Statutes, section 297A.70, are new text end 98.5 new text begin not required to collect the taxes in subdivisions 1 and 2. The Board of Commissioners new text end 98.6 new text begin of Cook County may also create lodging districts smaller than the county in which to new text end 98.7 new text begin impose the tax. new text end 98.8     new text begin Subd. 3. new text end new text begin Use of taxes. new text end new text begin The taxes imposed in subdivisions 1 and 2 must be used new text end 98.9 new text begin to fund a new Cook County Event and Visitors Bureau as established by the Board of new text end 98.10 new text begin Commissioners of Cook County. The Board of Commissioners of Cook County must new text end 98.11 new text begin annually review the budget of the Cook County Event and Visitors Bureau. new text end 98.12     new text begin Subd. 4. new text end new text begin Termination of taxes. new text end new text begin The taxes authorized under subdivisions 1 and 2 new text end 98.13 new text begin terminate ten years after the date of initial imposition of the taxes. new text end 98.14     new text begin Subd. 5. new text end new text begin Cook County Event and Visitors Bureau. new text end new text begin (a) The Cook County Event new text end 98.15 new text begin and Visitors Bureau shall be governed by a 14-member board of directors composed of: new text end 98.16     new text begin (1) four directors to be appointed by the Grand Marais Area Tourism Association; new text end 98.17     new text begin (2) two directors to be appointed by the Gunflint Trail Association; new text end 98.18     new text begin (3) seven directors to be appointed by the Lutsen-Tofte Tourism Association; and new text end 98.19     new text begin (4) one nonvoting member appointed by Grand Portage. new text end 98.20     new text begin (b) The Cook County Event and Visitors Bureau may adjust its membership upon a new text end 98.21 new text begin vote of approval by at least nine members. new text end 98.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases after June new text end 98.23 new text begin 30, 2007. new text end 98.24    Sec. 17. new text begin CITY OF NORTH MANKATO; TAXES AUTHORIZED. new text end 98.25     new text begin Subdivision 1. new text end new text begin Sales and use tax authorized. new text end new text begin Notwithstanding Minnesota Statutes, new text end 98.26 new text begin section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to new text end 98.27 new text begin the approval of the voters on November 7, 2006, the city of North Mankato may impose new text end 98.28 new text begin by ordinance a sales and use tax of one-half of one percent for the purposes specified new text end 98.29 new text begin in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the new text end 98.30 new text begin imposition, administration, collection, and enforcement of the taxes authorized under new text end 98.31 new text begin this subdivision. new text end 98.32     new text begin Subd. 2. new text end new text begin Use of revenues. new text end new text begin Revenues received from the tax authorized by new text end 98.33 new text begin subdivision 1 must be used to pay all or part of the capital costs of the following projects: new text end 98.34     new text begin (1) the local share of the Trunk Highway 14/County State Aid Highway 41 new text end 98.35 new text begin interchange project; new text end 99.1     new text begin (2) development of regional parks and hiking and biking trails; and new text end 99.2     new text begin (3) lake improvement projects. new text end 99.3     new text begin The total amount of revenues from the tax in subdivision 1 that may be used to fund new text end 99.4 new text begin these projects is $4,500,000 plus any associated bond costs. new text end 99.5     new text begin Subd. 3. new text end new text begin Bonds. new text end new text begin (a) The city of North Mankato, pursuant to the approval of the new text end 99.6 new text begin voters at the November 7, 2006, referendum authorizing the imposition of the taxes in new text end 99.7 new text begin this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and new text end 99.8 new text begin administrative expenses for the projects described in subdivision 2, in an amount that new text end 99.9 new text begin does not exceed $4,500,000. A separate election to approve the bonds under Minnesota new text end 99.10 new text begin Statutes, section 475.58, is not required. new text end 99.11     new text begin (b) The debt represented by the bonds is not included in computing any debt new text end 99.12 new text begin limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section new text end 99.13 new text begin 475.61, to pay principal and interest on the bonds is not subject to any levy limitation. new text end 99.14     new text begin Subd. 4. new text end new text begin Termination of taxes. new text end new text begin The tax imposed under subdivision 1 expires new text end 99.15 new text begin when the city council determines that the amount of revenues received from the taxes new text end 99.16 new text begin to pay for the projects under subdivision 2, first equals or exceeds $4,000,000 plus the new text end 99.17 new text begin additional amount needed to pay the costs related to issuance of bonds under subdivision new text end 99.18 new text begin 3, including interest on the bonds. Any funds remaining after completion of the projects new text end 99.19 new text begin and retirement or redemption of the bonds shall be placed in a capital facilities and new text end 99.20 new text begin equipment replacement fund of the city. The tax imposed under subdivision 1 may expire new text end 99.21 new text begin at an earlier time if the city so determines by ordinance. new text end 99.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 99.23 new text begin governing body of the city of North Mankato with Minnesota Statutes, section 645.021, new text end 99.24 new text begin subdivision 3. new text end 99.25    Sec. 18. new text begin MINNETONKA WATER TREATMENT FACILITY. new text end 99.26     new text begin Capital equipment used in or incorporated into the construction of a water treatment new text end 99.27 new text begin facility owned by the city of Minnetonka is exempt from sales tax regardless of whether new text end 99.28 new text begin purchased by the owner, contractor, subcontractor, or builder. The tax must be imposed new text end 99.29 new text begin and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, new text end 99.30 new text begin applied and then refunded to the city of Minnetonka in the manner provided in Minnesota new text end 99.31 new text begin Statutes, section 297A.75. new text end 99.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made before new text end 99.33 new text begin December 31, 2006. new text end 100.1ARTICLE 6 100.2ECONOMIC DEVELOPMENT 100.3    Section 1. Minnesota Statutes 2006, section 268.19, subdivision 1, is amended to read: 100.4    Subdivision 1. Use of data. (a) Except as otherwise provided by this section, data 100.5gathered from any person pursuant to the administration of the Minnesota Unemployment 100.6Insurance Law are private data on individuals or nonpublic data not on individuals as 100.7defined in section 13.02, subdivisions 9 and 12, and may not be disclosed except pursuant 100.8to a district court order or section 13.05. A subpoena shall not be considered a district 100.9court order. These data may be disseminated to and used by the following agencies 100.10without the consent of the subject of the data: 100.11    (1) state and federal agencies specifically authorized access to the data by state 100.12or federal law; 100.13    (2) any agency of any other state or any federal agency charged with the 100.14administration of an unemployment insurance program; 100.15    (3) any agency responsible for the maintenance of a system of public employment 100.16offices for the purpose of assisting individuals in obtaining employment; 100.17    (4) human rights agencies within Minnesota that have enforcement powers; 100.18    (5) the Department of Revenue only to the extent necessary for its duties under 100.19Minnesota laws; 100.20    (6) public and private agencies responsible for administering publicly financed 100.21assistance programs for the purpose of monitoring the eligibility of the program's 100.22recipients; 100.23    (7) the Department of Labor and Industry and the Division of Insurance Fraud 100.24Prevention in the Department of Commerce on an interchangeable basis with the 100.25department for uses consistent with the administration of their duties under Minnesota law; 100.26    (8) local and state welfare agencies for monitoring the eligibility of the data subject 100.27for assistance programs, or for any employment or training program administered by those 100.28agencies, whether alone, in combination with another welfare agency, or in conjunction 100.29with the department or to monitor and evaluate the statewide Minnesota family investment 100.30program by providing data on recipients and former recipients of food stamps or food 100.31support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance 100.32under chapter 119B, or medical programs under chapter 256B, 256D, or 256L; 100.33    (9) local and state welfare agencies for the purpose of identifying employment, 100.34wages, and other information to assist in the collection of an overpayment debt in an 100.35assistance program; 101.1    (10) local, state, and federal law enforcement agencies for the sole purpose of 101.2ascertaining the last known address and employment location of a person who is the 101.3subject of a criminal investigation; 101.4    (11) the federal Immigration and Naturalization Service shall have access to data on 101.5specific individuals and specific employers provided the specific individual or specific 101.6employer is the subject of an investigation by that agency; and 101.7    (12) the Department of Health solely for the purposes of epidemiologic 101.8investigations. new text begin ; and new text end 101.9     new text begin (13) the state auditor to the extent necessary to conduct audits of job opportunity new text end 101.10 new text begin building zones as required under section 469.3201. new text end 101.11    (b) Data on individuals and employers that are collected, maintained, or used by the 101.12department in an investigation pursuant to section 268.182 are confidential as to data on 101.13individuals and protected nonpublic data not on individuals as defined in section 13.02, 101.14subdivisions 3 and 13 , and must not be disclosed except pursuant to statute or district 101.15court order or to a party named in a criminal proceeding, administrative or judicial, for 101.16preparation of a defense. 101.17    (c) Data gathered by the department pursuant to the administration of the Minnesota 101.18unemployment insurance program must not be made the subject or the basis for any 101.19suit in any civil proceedings, administrative or judicial, unless the action is initiated by 101.20the department. 101.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 101.22    Sec. 2. Minnesota Statutes 2006, section 270B.15, is amended to read: 101.23270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR new text begin AND STATE new text end 101.24 new text begin AUDITOR new text end . 101.25     new text begin (a) new text end Returns and return information must be disclosed to the legislative auditor to the 101.26extent necessary for the legislative auditor to carry out sections 3.97 to 3.979. 101.27     new text begin (b) The commissioner must disclose return information, including the report new text end 101.28 new text begin required under section 289A.12, subdivision 15, to the state auditor to the extent necessary new text end 101.29 new text begin to conduct audits of job opportunity building zones as required under section 469.3201. new text end 101.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 101.31    Sec. 3. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read: 101.32    Subd. 64. Job opportunity building zone property. (a) Improvements to real 101.33property, and personal property, classified under section 273.13, subdivision 24, and 102.1located within a job opportunity building zone, designated under section 469.314, are 102.2exempt from ad valorem taxes levied under chapter 275. 102.3    (b) Improvements to real property, and tangible personal property, of an agricultural 102.4production facility located within an agricultural processing facility zone, designated 102.5under section 469.314, is exempt from ad valorem taxes levied under chapter 275. 102.6    (c) For property to qualify for exemption under paragraph (a), the occupant must be 102.7a qualified business, as defined in section 469.310. 102.8    (d) The exemption applies beginning for the first assessment year after designation 102.9of the job opportunity building zone by the commissioner of employment and economic 102.10development. The exemption applies to each assessment year that begins during the 102.11duration of the job opportunity building zone. To be exempt, the property must be 102.12occupied by July 1 of the assessment year by a qualified business that has signed the 102.13business subsidy agreement and relocation agreement, if required, by July 1 of the 102.14assessment year. This exemption does not apply to: 102.15    (1) the levy under section 475.61 or similar levy provisions under any other law to 102.16pay general obligation bonds; or 102.17    (2) a levy under section 126C.17, if the levy was approved by the voters before the 102.18designation of the job opportunity building zone. 102.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning for taxes payable in 2008. new text end 102.20    Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 102.21to read: 102.22     new text begin Subd. 85. new text end new text begin Fergus Falls historical zone. new text end new text begin (a) Property located in the area of the new text end 102.23 new text begin campus of the former state regional treatment center in the city of Fergus Falls, including new text end 102.24 new text begin the five buildings and associated land that were acquired by the city prior to January 1, new text end 102.25 new text begin 2007, is exempt from ad valorem taxes levied under chapter 275. new text end 102.26     new text begin (b) The exemption applies for 15 calendar years on the date specified by resolution, new text end 102.27 new text begin by the governing body of the city of Fergus Falls. For the final three assessment years new text end 102.28 new text begin of the duration limit, the exemption applies to the following percentages of estimated new text end 102.29 new text begin market value of the property: new text end 102.30     new text begin (1) for the third to the last assessment year of the duration, 75 percent; new text end 102.31     new text begin (2) for the second to the last assessment year of the duration, 50 percent; and new text end 102.32     new text begin (3) for the last assessment year of the duration, 25 percent. new text end 102.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for property taxes levied in 2007, new text end 102.34 new text begin payable in 2008, and thereafter. new text end 103.1    Sec. 5. Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision 103.2to read: 103.3     new text begin Subd. 15. new text end new text begin Report of job opportunity zone benefits; penalty for failure to file new text end 103.4 new text begin report. new text end new text begin (a) By October 15 of each year, every qualified business, as defined under section new text end 103.5 new text begin 469.310, subdivision 11, must file with the commissioner, on a form prescribed by the new text end 103.6 new text begin commissioner, a report listing the tax benefits under section 469.315 received by the new text end 103.7 new text begin business for the previous year. new text end 103.8     new text begin (b) The commissioner shall send notice to each business that fails to timely submit new text end 103.9 new text begin the report required under paragraph (a). The notice shall demand that the business submit new text end 103.10 new text begin the report within 60 days. Where good cause exists, the commissioner may extend new text end 103.11 new text begin the period for submitting the report as long as a request for extension is filed by the new text end 103.12 new text begin business before the expiration of the 60-day period. The commissioner shall notify the new text end 103.13 new text begin commissioner of the Department of Employment and Economic Development and the new text end 103.14 new text begin appropriate job opportunity subzone administrator whenever notice is sent to a business new text end 103.15 new text begin under this paragraph. new text end 103.16     new text begin (c) A business that fails to submit the report as required under paragraph (b) is no new text end 103.17 new text begin longer a qualified business under section 469.310, subdivision 11, and is subject to the new text end 103.18 new text begin repayment provisions of section 469.319. new text end 103.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with reports required to be new text end 103.20 new text begin filed October 15, 2008. new text end 103.21    Sec. 6. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision 103.22to read: 103.23     new text begin Subd. 34. new text end new text begin Tax-free renaissance zone; historic rehabilitation credit. new text end new text begin (a) A new text end 103.24 new text begin taxpayer who incurs costs that are eligible for a credit under section 47 of the Internal new text end 103.25 new text begin Revenue Code for the rehabilitation of a property in the Fergus Falls historical zone, as new text end 103.26 new text begin defined under section 272.02, subdivision 85, is allowed a credit against the tax imposed new text end 103.27 new text begin under this chapter, including the taxes under sections 290.091 and 290.0922, equal to 100 new text end 103.28 new text begin percent of the credit allowed for rehabilitation of a certified historic structure under section new text end 103.29 new text begin 47(a)(2) of the Internal Revenue Code, but is limited to credits generated by rehabilitation new text end 103.30 new text begin of certified historic structures that are placed in service during the taxable year. new text end 103.31     new text begin (b) If the amount of the credit under this subdivision exceeds the tax liability under new text end 103.32 new text begin this chapter for the year in which the cost is incurred, the amount that exceeds the tax new text end 103.33 new text begin liability may be carried back to any of the three preceding taxable years or carried forward new text end 103.34 new text begin to each of the ten taxable years succeeding the taxable year in which the expense was new text end 103.35 new text begin incurred. The entire amount of the credit must be carried to the earliest taxable year to new text end 104.1 new text begin which the amount may be carried. The unused portion of the credit must be carried to new text end 104.2 new text begin the following taxable year. new text end 104.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 104.4 new text begin December 31, 2007. new text end 104.5    Sec. 7. Minnesota Statutes 2006, section 469.169, is amended by adding a subdivision 104.6to read: 104.7     new text begin Subd. 18. new text end new text begin Additional border city allocations; 2007. new text end new text begin (a) In addition to tax new text end 104.8 new text begin reductions authorized in subdivisions 7 to 17, the commissioner shall allocate $750,000 new text end 104.9 new text begin for tax reductions to border city enterprise zones in cities located on the western border new text end 104.10 new text begin of the state. The commissioner shall make allocations to zones in cities on the western new text end 104.11 new text begin border on a per capita basis. Allocations made under this subdivision may be used for new text end 104.12 new text begin tax reductions as provided in section 469.171, or for other offsets of taxes imposed on new text end 104.13 new text begin or remitted by businesses located in the enterprise zone, but only if the municipality new text end 104.14 new text begin determines that the granting of the tax reduction or offset is necessary in order to retain a new text end 104.15 new text begin business within or attract a business to the zone. The city alternatively may elect to use new text end 104.16 new text begin any portion of the allocation provided in this paragraph for tax reductions under section new text end 104.17 new text begin 469.1732 or 469.1734. new text end 104.18     new text begin (b) The commissioner shall allocate $750,000 for tax reductions under section new text end 104.19 new text begin 469.1732 or 469.1734 to cities with border city enterprise zones located on the western new text end 104.20 new text begin border of the state. The commissioner shall allocate this amount among the cities on a per new text end 104.21 new text begin capita basis. The city alternatively may elect to use any portion of the allocation provided new text end 104.22 new text begin in this paragraph for tax reductions as provided in section 469.171. new text end 104.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 104.24    Sec. 8. Minnesota Statutes 2006, section 469.174, subdivision 10, is amended to read: 104.25    Subd. 10. Redevelopment district. (a) "Redevelopment district" means a type of 104.26tax increment financing district consisting of a project, or portions of a project, within 104.27which the authority finds by resolution that one or more of the following conditions, 104.28reasonably distributed throughout the district, exists: 104.29    (1) parcels consisting of 70 percent of the area of the district are occupied by 104.30buildings, streets, utilities, paved or gravel parking lots, or other similar structures 104.31and more than 50 percent of the buildings, not including outbuildings, are structurally 104.32substandard to a degree requiring substantial renovation or clearance; 105.1    (2) the property consists of vacant, unused, underused, inappropriately used, 105.2or infrequently used railyards, rail storage facilities, or excessive or vacated railroad 105.3rights-of-way; 105.4    (3) tank facilities, or property whose immediately previous use was for tank 105.5facilities, as defined in section 115C.02, subdivision 15, if the tank facilities: 105.6    (i) have or had a capacity of more than 1,000,000 gallons; 105.7    (ii) are located adjacent to rail facilities; and 105.8    (iii) have been removed or are unused, underused, inappropriately used, or 105.9infrequently used; or 105.10    (4) a qualifying disaster area, as defined in subdivision 10b. 105.11    (b) For purposes of this subdivision, "structurally substandard" shall mean 105.12containing defects in structural elements or a combination of deficiencies in essential 105.13utilities and facilities, light and ventilation, fire protection including adequate egress, 105.14layout and condition of interior partitions, or similar factors, which defects or deficiencies 105.15are of sufficient total significance to justify substantial renovation or clearance. 105.16    (c) A building is not structurally substandard if it is in compliance with the building 105.17code applicable to new buildings or could be modified to satisfy the building code at 105.18a cost of less than 15 percent of the cost of constructing a new structure of the same 105.19square footage and type on the site. The municipality may find that a building is not 105.20disqualified as structurally substandard under the preceding sentence on the basis of 105.21reasonably available evidence, such as the size, type, and age of the building, the average 105.22cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. The 105.23municipality may not make such a determination without an interior inspection of the 105.24property, but need not have an independent, expert appraisal prepared of the cost of repair 105.25and rehabilitation of the building. An interior inspection of the property is not required, 105.26if the municipality finds that (1) the municipality or authority is unable to gain access to 105.27the property after using its best efforts to obtain permission from the party that owns or 105.28controls the property; and (2) the evidence otherwise supports a reasonable conclusion that 105.29the building is structurally substandard. Items of evidence that support such a conclusion 105.30include recent fire or police inspections, on-site property tax appraisals or housing 105.31inspections, exterior evidence of deterioration, or other similar reliable evidence. Written 105.32documentation of the findings and reasons why an interior inspection was not conducted 105.33must be made and retained under section 469.175, subdivision 3, clause (1). Failure of a 105.34building to be disqualified under the provisions of this paragraph is a necessary, but not a 105.35sufficient, condition to determining that the building is substandard. 106.1    (d) A parcel is deemed to be occupied by a structurally substandard building 106.2for purposes of the finding under paragraph (a) new text begin or by the improvements described in new text end 106.3 new text begin paragraph (e) new text end if all of the following conditions are met: 106.4    (1) the parcel was occupied by a substandard building new text begin or met the requirements new text end 106.5 new text begin of paragraph (e), as the case may be, new text end within three years of the filing of the request for 106.6certification of the parcel as part of the district with the county auditor; 106.7    (2) the substandard building was new text begin or the improvements described in paragraph (e) new text end 106.8 new text begin were new text end demolished or removed by the authority or the demolition or removal was financed 106.9by the authority or was done by a developer under a development agreement with the 106.10authority; 106.11    (3) the authority found by resolution before the demolition or removal that the 106.12parcel was occupied by a structurally substandard building new text begin or met the requirements of new text end 106.13 new text begin paragraph (e) new text end and that after demolition and clearance the authority intended to include 106.14the parcel within a district; and 106.15    (4) upon filing the request for certification of the tax capacity of the parcel as part 106.16of a district, the authority notifies the county auditor that the original tax capacity of the 106.17parcel must be adjusted as provided by section 469.177, subdivision 1, paragraph (f). 106.18    (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, 106.19utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the 106.20area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or 106.21other similar structures. 106.22    (f) For districts consisting of two or more noncontiguous areas, each area must 106.23qualify as a redevelopment district under paragraph (a) to be included in the district, and 106.24the entire area of the district must satisfy paragraph (a). 106.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for requests for certification made new text end 106.26 new text begin after June 30, 2007. new text end 106.27    Sec. 9. Minnesota Statutes 2006, section 469.174, subdivision 10a, is amended to read: 106.28    Subd. 10a. Renewal and renovation district. (a) "Renewal and renovation district" 106.29means a type of tax increment financing district consisting of a project, or portions of a 106.30project, within which the authority finds by resolution that: 106.31    (1)(i) parcels consisting of 70 percent of the area of the district are occupied by 106.32buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii) 106.3320 percent of the buildings are structurally substandard; and (iii) 30 percent of the other 106.34buildings require substantial renovation or clearance to remove existing conditions such 106.35as: inadequate street layout, incompatible uses or land use relationships, overcrowding of 107.1buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for 107.2improvement or conversion, or other identified hazards to the health, safety, and general 107.3well-being of the community; and 107.4    (2) the conditions described in clause (1) are reasonably distributed throughout the 107.5geographic area of the district. 107.6    (b) For purposes of determining whether a building is structurally substandard, 107.7whether parcels are occupied by buildings, streets, utilities, paved or gravel parking lots, 107.8or other similar structures, or whether noncontiguous areas qualify, the provisions of 107.9subdivision 10, paragraphs (c), (e), and new text begin (b) through new text end (f) apply. 107.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for requests for certification made new text end 107.11 new text begin after June 30, 2007. new text end 107.12    Sec. 10. Minnesota Statutes 2006, section 469.175, subdivision 1, is amended to read: 107.13    Subdivision 1. Tax increment financing plan. new text begin (a) new text end A tax increment financing plan 107.14shall contain: 107.15    (1) a statement of objectives of an authority for the improvement of a project; 107.16    (2) a statement as to the development program for the project, including the property 107.17within the project, if any, that the authority intends to acquire, identified by parcel number, 107.18identifiable property name, block, or other appropriate means indicating the area in which 107.19the authority intends to acquire properties; 107.20    (3) a list of any development activities that the plan proposes to take place within 107.21the project, for which contracts have been entered into at the time of the preparation of 107.22the plan, including the names of the parties to the contract, the activity governed by the 107.23contract, the cost stated in the contract, and the expected date of completion of that activity; 107.24    (4) identification or description of the type of any other specific development 107.25reasonably expected to take place within the project, and the date when the development is 107.26likely to occur; 107.27    (5) estimates of the following: 107.28    (i) cost of the project, including administrative expenses, except that if part of the 107.29cost of the project is paid or financed with increment from the tax increment financing 107.30district, the tax increment financing plan for the district must contain an estimate of the 107.31amount of the cost of the project, including administrative expenses, that will be paid or 107.32financed with tax increments from the district; 107.33    (ii) amount of bonded indebtedness to be incurred; 107.34    (iii) sources of revenue to finance or otherwise pay public costs; 108.1    (iv) the most recent net tax capacity of taxable real property within the tax increment 108.2financing district and within any subdistrict; 108.3    (v) the estimated captured net tax capacity of the tax increment financing district 108.4at completion; and 108.5    (vi) the duration of the tax increment financing district's and any subdistrict's 108.6existence; 108.7    (6) statements of the authority's alternate estimates of the impact of tax increment 108.8financing on the net tax capacities of all taxing jurisdictions in which the tax increment 108.9financing district is located in whole or in part. For purposes of one statement, the 108.10authority shall assume that the estimated captured net tax capacity would be available to 108.11the taxing jurisdictions without creation of the district, and for purposes of the second 108.12statement, the authority shall assume that none of the estimated captured net tax capacity 108.13would be available to the taxing jurisdictions without creation of the district or subdistrict; 108.14    (7) identification and description of studies and analyses used to make the 108.15determination set forth in subdivision 3, clause (2); and 108.16    (8) identification of all parcels to be included in the district or any subdistrict. 108.17     new text begin (b) The authority may specify in the tax increment financing plan the first year in new text end 108.18 new text begin which it elects to receive increment, up to four years following the year of approval of the new text end 108.19 new text begin district. This paragraph does not apply to an economic development district. new text end 108.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 108.21 new text begin certification is made after June 30, 2007. new text end 108.22    Sec. 11. Minnesota Statutes 2006, section 469.175, subdivision 3, is amended to read: 108.23    Subd. 3. Municipality approval. (a) A county auditor shall not certify the original 108.24net tax capacity of a tax increment financing district until the tax increment financing plan 108.25proposed for that district has been approved by the municipality in which the district 108.26is located. If an authority that proposes to establish a tax increment financing district 108.27and the municipality are not the same, the authority shall apply to the municipality in 108.28which the district is proposed to be located and shall obtain the approval of its tax 108.29increment financing plan by the municipality before the authority may use tax increment 108.30financing. The municipality shall approve the tax increment financing plan only after a 108.31public hearing thereon after published notice in a newspaper of general circulation in the 108.32municipality at least once not less than ten days nor more than 30 days prior to the date 108.33of the hearing. The published notice must include a map of the area of the district from 108.34which increments may be collected and, if the project area includes additional area, a map 108.35of the project area in which the increments may be expended. The hearing may be held 109.1before or after the approval or creation of the project or it may be held in conjunction with 109.2a hearing to approve the project. 109.3    (b) Before or at the time of approval of the tax increment financing plan, the 109.4municipality shall make the following findings, and shall set forth in writing the reasons 109.5and supporting facts for each determination: 109.6    (1) that the proposed tax increment financing district is a redevelopment district, a 109.7renewal or renovation district, a housing district, a soils condition district, or an economic 109.8development district; if the proposed district is a redevelopment district or a renewal or 109.9renovation district, the reasons and supporting facts for the determination that the district 109.10meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2), or 109.11subdivision 10a, must be documented in writing and retained and made available to the 109.12public by the authority until the district has been terminated; 109.13    (2) that, in the opinion of the municipality: 109.14    (i) the proposed development or redevelopment would not reasonably be expected to 109.15occur solely through private investment within the reasonably foreseeable future; and 109.16    (ii) the increased market value of the site that could reasonably be expected to 109.17occur without the use of tax increment financing would be less than the increase in the 109.18market value estimated to result from the proposed development after subtracting the 109.19present value of the projected tax increments for the maximum duration of the district 109.20permitted by the plan. The requirements of this item do not apply if the district is a 109.21qualified housing district; 109.22    (3) that the tax increment financing plan conforms to the general plan for the 109.23development or redevelopment of the municipality as a whole; 109.24    (4) that the tax increment financing plan will afford maximum opportunity, 109.25consistent with the sound needs of the municipality as a whole, for the development or 109.26redevelopment of the project by private enterprise; 109.27    (5) that the municipality elects the method of tax increment computation set forth in 109.28section 469.177, subdivision 3, paragraph (b), if applicable. 109.29    (c) When the municipality and the authority are not the same, the municipality shall 109.30approve or disapprove the tax increment financing plan within 60 days of submission by 109.31the authority. When the municipality and the authority are not the same, the municipality 109.32may not amend or modify a tax increment financing plan except as proposed by the 109.33authority pursuant to subdivision 4. Once approved, the determination of the authority 109.34to undertake the project through the use of tax increment financing and the resolution of 109.35the governing body shall be conclusive of the findings therein and of the public need for 109.36the financing. 110.1    (d) For a district that is subject to the requirements of paragraph (b), clause (2), 110.2item (ii), the municipality's statement of reasons and supporting facts must include all of 110.3the following: 110.4    (1) an estimate of the amount by which the market value of the site will increase 110.5without the use of tax increment financing; 110.6    (2) an estimate of the increase in the market value that will result from the 110.7development or redevelopment to be assisted with tax increment financing; and 110.8    (3) the present value of the projected tax increments for the maximum duration of 110.9the district permitted by the tax increment financing plan. 110.10    (e) For purposes of this subdivision, "site" means the parcels on which the 110.11development or redevelopment to be assisted with tax increment financing will be located. 110.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 110.13 new text begin and applies to all districts, regardless of when the request for certification was made. new text end 110.14    Sec. 12. Minnesota Statutes 2006, section 469.176, subdivision 1, is amended to read: 110.15    Subdivision 1. Duration of tax increment financing districts. (a) Subject to the 110.16limitations contained in subdivisions 1a to 1f, any tax increment financing district as to 110.17which bonds are outstanding, payment for which the tax increment and other revenues 110.18have been pledged, shall remain in existence at least as long as the bonds continue to be 110.19outstanding. The municipality may, at the time of approval of the initial tax increment 110.20financing plan, provide for new text begin one or both of the following: new text end 110.21     new text begin (1) new text end a shorter maximum duration limit than specified in subdivisions 1a to 1f. new text begin ; new text end 110.22     new text begin (2) an election as provided under section 469.175, subdivision 1, paragraph (b). new text end 110.23The specified limit applies in place of the otherwise applicable limit, unless the authority 110.24modifies the plan following the procedures under section 469.175, subdivision 4, 110.25paragraph (b). 110.26    (b) The tax increment pledged to the payment of the bonds and interest thereon may 110.27be discharged and the tax increment financing district may be terminated if sufficient funds 110.28have been irrevocably deposited in the debt service fund or other escrow account held in 110.29trust for all outstanding bonds to provide for the payment of the bonds at maturity or date 110.30of redemption and interest thereon to the maturity or redemption date. 110.31    (c) For bonds issued pursuant to section 469.178, subdivisions 2 and 3, the full 110.32faith and credit and any taxing powers of the municipality or authority are pledged to the 110.33payment of the bonds until the principal of and interest on the bonds has been paid in full. 111.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 111.2 new text begin certification is made after June 30, 2007. new text end 111.3    Sec. 13. Minnesota Statutes 2006, section 469.176, subdivision 2, is amended to read: 111.4    Subd. 2. Excess increments. (a) The authority shall annually determine the amount 111.5of excess increments for a district, if any. This determination must be based on the tax 111.6increment financing plan in effect on December 31 of the year and the increments and 111.7other revenues received as of December 31 of the year. The authority must spend or return 111.8the excess increments under paragraph (c) within nine months after the end of the year. 111.9    (b) For purposes of this subdivision, "excess increments" equals the excess of: 111.10    (1) total increments collected from the district since its certification, reduced by any 111.11excess increments paid under paragraph (c), clause (4), for a prior year, over 111.12    (2) the total costs authorized by the tax increment financing plan to be paid with 111.13increments from the district, reduced, but not below zero, by the sum of: 111.14    (i) the amounts of those authorized costs that have been paid from sources other than 111.15tax increments from the district; 111.16    (ii) revenues, other than tax increments from the district, that are dedicated for or 111.17otherwise required to be used to pay those authorized costs and that the authority has 111.18received and that are not included in item (i); 111.19    (iii) the amount of principal and interest obligations due on outstanding bonds after 111.20December 31 of the year and not prepaid under paragraph (c) in a prior year; and 111.21    (iv) increased by the sum of the transfers of increments made under section 469.1763, 111.22subdivision 6 , to reduce deficits in other districts made by December 31 of the year. 111.23    (c) The authority shall use excess increment only to do one or more of the following: 111.24    (1) prepay any outstanding bonds; 111.25    (2) discharge the pledge of tax increment for any outstanding bonds; 111.26    (3) pay into an escrow account dedicated to the payment of any outstanding bonds; or 111.27    (4) return the excess amount to the county auditor who shall distribute the excess 111.28amount to the city or town, county, and school district in which the tax increment financing 111.29district is located in direct proportion to their respective local tax rates. 111.30    (d) For purposes of a district for which the request for certification was made prior to 111.31August 1, 1979, excess increments equal the amount of increments on hand on December 111.3231, less the principal and interest obligations due on outstanding bonds or advances, 111.33qualifying under subdivision 1c, clauses (1), (2), new text begin (4), new text end and (5), after December 31 of the 111.34year and not prepaid under paragraph (c). 112.1    (e) The county auditor must report to the commissioner of education the amount of 112.2any excess tax increment distributed to a school district within 30 days of the distribution. 112.3    (f) For purposes of this subdivision, "outstanding bonds" means bonds which are 112.4secured by increments from the district. 112.5     new text begin (g) The state auditor may exempt an authority from reporting the amounts calculated new text end 112.6 new text begin under this subdivision for a calendar year, if the authority certifies to the auditor in new text end 112.7 new text begin its report that the total amount authorized by the tax increment plan to be paid with new text end 112.8 new text begin increments from the district exceeds the sum of the total increments collected for the new text end 112.9 new text begin district for all years by 20 percent. new text end 112.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment and new text end 112.11 new text begin applies to all districts regardless of when the request for certification was made, including new text end 112.12 new text begin districts for which the request for certification was made on or before August 1, 1979. new text end 112.13    Sec. 14. Minnesota Statutes 2006, section 469.176, subdivision 7, is amended to read: 112.14    Subd. 7. Parcels not includable in districts. (a) The authority may request 112.15inclusion in a tax increment financing district and the county auditor may certify the 112.16original tax capacity of a parcel or a part of a parcel that qualified under the provisions of 112.17section 273.111 or 273.112 or chapter 473H for taxes payable in any of the five calendar 112.18years before the filing of the request for certification only for: 112.19    (1) a district in which 85 percent or more of the planned buildings and facilities 112.20(determined on the basis of square footage) are a qualified manufacturing facility or a 112.21qualified distribution facility or a combination of both; or 112.22    (2) a qualified housing district. 112.23    (b)(1) A distribution facility means buildings and other improvements to real 112.24property that are used to conduct activities in at least each of the following categories: 112.25    (i) to store or warehouse tangible personal property; 112.26    (ii) to take orders for shipment, mailing, or delivery; 112.27    (iii) to prepare personal property for shipment, mailing, or delivery; and 112.28    (iv) to ship, mail, or deliver property. 112.29    (2) A manufacturing facility includes space used for manufacturing or producing 112.30tangible personal property, including processing resulting in the change in condition of the 112.31property, and space necessary for and related to the manufacturing activities. 112.32    (3) To be a qualified facility, the owner or operator of a manufacturing or distribution 112.33facility must agree to pay and pay 90 percent or more of the employees of the facility at 112.34a rate equal to or greater than 160 percent of the federal minimum wage for individuals 112.35over the age of 20. 113.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 113.2 new text begin and applies to all districts regardless of when the request for certification was made. new text end 113.3    Sec. 15. Minnesota Statutes 2006, section 469.176, subdivision 4l, is amended to read: 113.4    Subd. 4l. Prohibited facilities. (a) No tax increment from any district may be 113.5used for: 113.6    (1) a commons area used as a public park; or 113.7    (2) a facility used for social, recreational, or conference purposes. 113.8    (b) This subdivision does not apply to a privately owned facility for conference 113.9purposes or a parking structure new text begin , whether it is public or privately owned or whether it is new text end 113.10 new text begin ancillary to a use listed in paragraph (a) new text end . 113.11 new text begin EFFECTIVE DATE. new text end new text begin This section confirms the original intent of the legislature new text end 113.12 new text begin in enacting Minnesota Statutes, section 469.176, subdivision 4l, and is effective the day new text end 113.13 new text begin following final enactment and applies to any expenditure subject to Minnesota Statutes, new text end 113.14 new text begin section 469.176, subdivision 4l. new text end 113.15    Sec. 16. Minnesota Statutes 2006, section 469.1761, subdivision 1, is amended to read: 113.16    Subdivision 1. Requirement imposed. (a) In order for a tax increment financing 113.17district to qualify as a housing district: 113.18    (1) the income limitations provided in this section must be satisfied; and 113.19    (2) no more than 20 percent of the square footage of buildings that receive assistance 113.20from tax increments may consist of commercial, retail, or other nonresidential uses. 113.21    (b) The requirements imposed by this section apply to property receiving assistance 113.22financed with tax increments, including interest reduction, land transfers at less than the 113.23authority's cost of acquisition, utility service or connections, roads, parking facilities, or 113.24other subsidies. The provisions of this section do not apply to districts located in a targeted 113.25area as defined in section 462C.02, subdivision 9, clause (e). 113.26     new text begin (c) For purposes of the requirements of paragraph (a), the authority may elect to treat new text end 113.27 new text begin an addition to an existing structure as a separate building if: new text end 113.28     new text begin (1) construction of the addition begins more than three years after construction of new text end 113.29 new text begin the existing structure was completed; and new text end 113.30     new text begin (2) for an addition that does not meet the requirements of paragraph (a), clause (2), if new text end 113.31 new text begin it is treated as a separate building, the addition was not contemplated by the tax increment new text end 113.32 new text begin financing plan which includes the existing structure. new text end 114.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for expenditures of tax increment new text end 114.2 new text begin authorized and made after the day following final enactment, regardless of when the new text end 114.3 new text begin request for certification of the district was made. new text end 114.4    Sec. 17. Minnesota Statutes 2006, section 469.1763, subdivision 2, is amended to read: 114.5    Subd. 2. Expenditures outside district. (a) For each tax increment financing 114.6district, an amount equal to at least 75 percent of the total revenue derived from tax 114.7increments paid by properties in the district must be expended on activities in the district 114.8or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities 114.9in the district or to pay, or secure payment of, debt service on credit enhanced bonds. 114.10For districts, other than redevelopment districts for which the request for certification 114.11was made after June 30, 1995, the in-district percentage for purposes of the preceding 114.12sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax 114.13increments paid by properties in the district may be expended, through a development fund 114.14or otherwise, on activities outside of the district but within the defined geographic area of 114.15the project except to pay, or secure payment of, debt service on credit enhanced bonds. 114.16For districts, other than redevelopment districts for which the request for certification was 114.17made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is 114.1820 percent. The revenue derived from tax increments for the district that are expended on 114.19costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before 114.20calculating the percentages that must be expended within and without the district. 114.21    (b) In the case of a housing district, a housing project, as defined in section 469.174, 114.22subdivision 11 , is an activity in the district. 114.23    (c) All administrative expenses are for activities outside of the district, except that 114.24if the only expenses for activities outside of the district under this subdivision are for 114.25the purposes described in paragraph (d), administrative expenses will be considered as 114.26expenditures for activities in the district. 114.27    (d) The authority may elect, in the tax increment financing plan for the district, 114.28to increase by up to ten percentage points the permitted amount of expenditures for 114.29activities located outside the geographic area of the district under paragraph (a). As 114.30permitted by section 469.176, subdivision 4k, the expenditures, including the permitted 114.31expenditures under paragraph (a), need not be made within the geographic area of the 114.32project. Expenditures that meet the requirements of this paragraph are legally permitted 114.33expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. 114.34To qualify for the increase under this paragraph, the expenditures must: 115.1    (1) be used exclusively to assist housing that meets the requirement for a qualified 115.2low-income building, as that term is used in section 42 of the Internal Revenue Code; 115.3    (2) not exceed the qualified basis of the housing, as defined under section 42(c) of 115.4the Internal Revenue Code, less the amount of any credit allowed under section 42 of 115.5the Internal Revenue Code; and 115.6    (3) be used to: 115.7    (i) acquire and prepare the site of the housing; 115.8    (ii) acquire, construct, or rehabilitate the housing; or 115.9    (iii) make public improvements directly related to the housing. 115.10    (e) For a district created within a biotechnology and health sciences industry zone 115.11as defined in section 469.330, subdivision 6, or for an existing district located within 115.12such a zone, tax increment derived from such a district may be expended outside of the 115.13district but within the zone only for expenditures required for the construction of public 115.14infrastructure necessary to support the activities of the zone new text begin , land acquisition, and other new text end 115.15 new text begin redevelopment costs as defined in section 469.176, subdivision 4j new text end . Public infrastructure new text begin new text end 115.16 new text begin These new text end expenditures are considered as expenditures for activities within the district. 115.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for all districts located in bioscience new text end 115.18 new text begin zones, regardless of when the request for certification was made. new text end 115.19    Sec. 18. Minnesota Statutes 2006, section 469.177, subdivision 1, is amended to read: 115.20    Subdivision 1. Original net tax capacity. (a) Upon or after adoption of a tax 115.21increment financing plan, the auditor of any county in which the district is situated shall, 115.22upon request of the authority, certify the original net tax capacity of the tax increment 115.23financing district and that portion of the district overlying any subdistrict as described in 115.24the tax increment financing plan and shall certify in each year thereafter the amount by 115.25which the original net tax capacity has increased or decreased as a result of a change in tax 115.26exempt status of property within the district and any subdistrict, reduction or enlargement 115.27of the district or changes pursuant to subdivision 4. new text begin The auditor shall certify the amount new text end 115.28 new text begin within 30 days after receipt of the request and sufficient information to identify the parcels new text end 115.29 new text begin included in the district. The certification relates to the taxes payable year as provided in new text end 115.30 new text begin subdivision 6. new text end 115.31    (b) If the classification under section 273.13 of property located in a district changes 115.32to a classification that has a different assessment ratio, the original net tax capacity of that 115.33property must be redetermined at the time when its use is changed as if the property had 115.34originally been classified in the same class in which it is classified after its use is changed. 116.1    (c) The amount to be added to the original net tax capacity of the district as a result 116.2of previously tax exempt real property within the district becoming taxable equals the net 116.3tax capacity of the real property as most recently assessed pursuant to section 273.18 or, if 116.4that assessment was made more than one year prior to the date of title transfer rendering 116.5the property taxable, the net tax capacity assessed by the assessor at the time of the 116.6transfer. If improvements are made to tax exempt property after the municipality approves 116.7the district and before the parcel becomes taxable, the assessor shall, at the request of 116.8the authority, separately assess the estimated market value of the improvements. If the 116.9property becomes taxable, the county auditor shall add to original net tax capacity, the net 116.10tax capacity of the parcel, excluding the separately assessed improvements. If substantial 116.11taxable improvements were made to a parcel after certification of the district and if the 116.12property later becomes tax exempt, in whole or part, as a result of the authority acquiring 116.13the property through foreclosure or exercise of remedies under a lease or other revenue 116.14agreement or as a result of tax forfeiture, the amount to be added to the original net tax 116.15capacity of the district as a result of the property again becoming taxable is the amount 116.16of the parcel's value that was included in original net tax capacity when the parcel was 116.17first certified. The amount to be added to the original net tax capacity of the district as a 116.18result of enlargements equals the net tax capacity of the added real property as most 116.19recently certified by the commissioner of revenue as of the date of modification of the tax 116.20increment financing plan pursuant to section 469.175, subdivision 4. 116.21    (d) If the net tax capacity of a property increases because the property no longer 116.22qualifies under the Minnesota Agricultural Property Tax Law, section 273.111; the 116.23Minnesota Open Space Property Tax Law, section 273.112; or the Metropolitan 116.24Agricultural Preserves Act, chapter 473H, or because platted, unimproved property is 116.25improved or market value is increased after approval of the plat under section 273.11, 116.26subdivision 14 , 14a, or 14b, the increase in net tax capacity must be added to the original 116.27net tax capacity. 116.28    (e) The amount to be subtracted from the original net tax capacity of the district 116.29as a result of previously taxable real property within the district becoming tax exempt, 116.30or a reduction in the geographic area of the district, shall be the amount of original net 116.31tax capacity initially attributed to the property becoming tax exempt or being removed 116.32from the district. If the net tax capacity of property located within the tax increment 116.33financing district is reduced by reason of a court-ordered abatement, stipulation agreement, 116.34voluntary abatement made by the assessor or auditor or by order of the commissioner of 116.35revenue, the reduction shall be applied to the original net tax capacity of the district when 116.36the property upon which the abatement is made has not been improved since the date of 117.1certification of the district and to the captured net tax capacity of the district in each year 117.2thereafter when the abatement relates to improvements made after the date of certification. 117.3The county auditor may specify reasonable form and content of the request for certification 117.4of the authority and any modification thereof pursuant to section 469.175, subdivision 4. 117.5    (f) If a parcel of property contained a substandard building new text begin or improvements new text end 117.6 new text begin described in section 469.174, subdivision 10, paragraph (e), new text end that was new text begin were new text end demolished 117.7or removed and if the authority elects to treat the parcel as occupied by a substandard 117.8building under section 469.174, subdivision 10, paragraph (b), new text begin or by improvements under new text end 117.9 new text begin section 469.174, subdivision 10, paragraph (e), new text end the auditor shall certify the original net 117.10tax capacity of the parcel using the greater of (1) the current net tax capacity of the 117.11parcel, or (2) the estimated market value of the parcel for the year in which the building 117.12was new text begin or other improvements were new text end demolished or removed, but applying the class rates 117.13for the current year. 117.14    (g) For a redevelopment district qualifying under section 469.174, subdivision 10, 117.15paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of 117.16the land as the original tax capacity for any parcel in the district that contains a building 117.17that suffered substantial damage as a result of the disaster or emergency. 117.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for requests for certification made new text end 117.19 new text begin after June 30, 2007. new text end 117.20    Sec. 19. Minnesota Statutes 2006, section 469.178, subdivision 7, is amended to read: 117.21    Subd. 7. Interfund loans. The authority or municipality may advance or loan 117.22money to finance expenditures under section 469.176, subdivision 4, from its general 117.23fund or any other fund under which it has legal authority to do so. The loan or advance 117.24must be authorized, by resolution of the governing body or of the authority, whichever 117.25has jurisdiction over the fund from which the advance or loan is made, before money 117.26is transferred, advanced, or spent, whichever is earliest. The resolution may generally 117.27grant to the authority the power to make interfund loans under one or more tax increment 117.28financing plans or for one or more districts. The terms and conditions for repayment of the 117.29loan must be provided in writing and include, at a minimum, the principal amount, the 117.30interest rate, and maximum term. The maximum rate of interest permitted to be charged 117.31is limited to the greater of the rates specified under section 270C.40 or 549.09 as of the 117.32date new text begin the loan new text end or advance is made, unless the written agreement states that the maximum 117.33interest rate will fluctuate as the interest rates specified under section 270C.40 or 549.09 117.34are from time to time adjusted. 118.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 118.2 new text begin and applies to all districts subject to Minnesota Statutes, section 469.178, subdivision 7, new text end 118.3 new text begin regardless of when the request for certification was made. new text end 118.4    Sec. 20. Minnesota Statutes 2006, section 469.1791, subdivision 3, is amended to read: 118.5    Subd. 3. Preconditions to establish district. (a) A city may establish a special 118.6taxing district within a tax increment financing district under this section only if the 118.7conditions under paragraphs (b) and (c) are met or if the city elects to exercise the 118.8authority under paragraph (d). 118.9    (b) The city has determined that: 118.10    (1) total tax increments from the district, including unspent increments from 118.11previous years and increments transferred under paragraph (c), will be insufficient to pay 118.12the amounts due in a year on preexisting obligations; and 118.13    (2) this insufficiency of increments resulted from the reduction in property tax class 118.14rates enacted in the 1997 and 1998 legislative sessions. 118.15    (c) The city has agreed to transfer any available increments from other tax increment 118.16financing districts in the city to pay the preexisting obligations of the district under section 118.17469.1763, subdivision 6 . This requirement does not apply to any available increments of a 118.18qualified housing district. 118.19    (d) If a tax increment financing district does not qualify under paragraphs (b) and 118.20(c), the governing body may elect to establish a special taxing district under this section. 118.21If the city elects to exercise this authority, increments from the tax increment financing 118.22district and the proceeds of the tax imposed under this section may only be used to pay 118.23preexisting obligations and reasonable administrative expenses of the authority for the tax 118.24increment financing district. The tax increment financing district must be decertified when 118.25all preexisting obligations have been paid. 118.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 118.27 new text begin and applies to districts regardless of when the request for certification was made. new text end 118.28    Sec. 21. Minnesota Statutes 2006, section 469.312, is amended by adding a subdivision 118.29to read: 118.30     new text begin Subd. 6. new text end new text begin Restrictions on relocations. new text end new text begin (a) If a business relocates or intends to new text end 118.31 new text begin relocate under a proposed project more than 25 full-time equivalent jobs from a location new text end 118.32 new text begin in Minnesota into a job opportunity building zone, the business must notify the local new text end 118.33 new text begin government unit, the commissioner of employment and economic development, and the new text end 118.34 new text begin city and the county governments from which the jobs are being or would be relocated. new text end 119.1 new text begin A city or county that objects to the relocation of jobs must file a copy of the resolution new text end 119.2 new text begin with the commissioner of employment and economic development and the local unit new text end 119.3 new text begin of government. new text end 119.4     new text begin (b) If the governing body of the city or county from which the jobs are being new text end 119.5 new text begin relocated adopts a qualified resolution objecting to the relocation within 60 days after its new text end 119.6 new text begin receipt of the notice, the following rules apply until the requirements of paragraph (c) are new text end 119.7 new text begin satisfied: new text end 119.8     new text begin (1) if the business has not entered into a business subsidy agreement, the local unit new text end 119.9 new text begin of government may not enter into a business subsidy agreement with the business; or new text end 119.10     new text begin (2) if the local unit of government has entered into a business subsidy agreement new text end 119.11 new text begin with the business, the business ceases to be a qualified business, effective for the current new text end 119.12 new text begin taxable year, the current assessment year, and for taxable purchases made after the first new text end 119.13 new text begin day of the month beginning after the filing of the objecting resolution. new text end 119.14     new text begin (c) To be a qualified resolution for purposes of this subdivision, the resolution must new text end 119.15 new text begin identify one or more sites in the city or county that could serve as an appropriate site for new text end 119.16 new text begin the facility proposed by the business. To satisfy this requirement a site must: new text end 119.17     new text begin (1) be of adequate size; new text end 119.18     new text begin (2) have appropriate transportation access, given the nature of the business; new text end 119.19     new text begin (3) be served by adequate public infrastructure and public utilities or the new text end 119.20 new text begin governmental unit will provide reasonably necessary public infrastructure and public new text end 119.21 new text begin utilities for the project in a timely manner; and new text end 119.22     new text begin (4) be under the ownership or control of either the governmental unit or the business new text end 119.23 new text begin or be available for sale. new text end 119.24     new text begin (d) When each city and county that objected to the relocation rescinds its objection new text end 119.25 new text begin by resolution, the provisions of paragraph (b) no longer apply to the business. new text end 119.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 119.27 new text begin and applies to business subsidy agreements entered into after that date. new text end 119.28    Sec. 22. Minnesota Statutes 2006, section 469.3201, is amended to read: 119.29469.3201 JOBZ EXPENDITURE LIMITATIONS; AUDITS new text begin STATE new text end 119.30 new text begin AUDITOR; AUDITS OF JOB OPPORTUNITY BUILDING ZONES AND new text end 119.31 new text begin BUSINESS SUBSIDY AGREEMENTS new text end . 119.32    The Tax Increment Financing, Investment and Finance Division of the Office of the 119.33State Auditor must annually audit the creation and operation of all job opportunity building 119.34zones and business subsidy agreements entered into under Minnesota Statutes, sections 120.1469.310 to 469.320. new text begin To the extent necessary to perform this audit, the state auditor may new text end 120.2 new text begin request from the commissioner of revenue tax return information of taxpayers who are new text end 120.3 new text begin eligible to receive tax benefits authorized under section 469.315. To the extent necessary new text end 120.4 new text begin to perform this audit, the state auditor may request from the commissioner of employment new text end 120.5 new text begin and economic development wage detail report information required under section 268.044 new text end 120.6 new text begin of taxpayers eligible to receive tax benefits authorized under section 469.315. new text end 120.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 120.8    Sec. 23. Laws 1994, chapter 587, article 9, section 14, subdivision 1, is amended to 120.9read: 120.10    Subdivision 1. Establishment. The city of Brooklyn Center may establish an 120.11 new text begin a new text end redevelopment tax increment financing district in which 15 percent of the revenues 120.12generated from tax increment in any year is deposited in the housing new text begin and environmental new text end 120.13 new text begin remediation new text end development account of the authority and expended according to the tax 120.14increment financing plan. 120.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 120.16    Sec. 24. Laws 1994, chapter 587, article 9, section 14, subdivision 2, is amended to 120.17read: 120.18    Subd. 2. Eligible activities. The authority must identify in the plan the housing 120.19activities that will be assisted by the housing new text begin and environmental remediation new text end development 120.20account. Housing activities may include rehabilitation, acquisition, new text begin construction, new text end 120.21demolition, and financing of new or existing single family or multifamily housing. 120.22Housing new text begin and environmental remediation new text end activities listed in the plan need not be located 120.23within the district or project area but must be activities that meet the new text begin income new text end requirements 120.24of a qualified housing district under Minnesota Statutes, section or 469.1761, 120.25subdivision 2 . 120.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 120.27    Sec. 25. Laws 1994, chapter 587, article 9, section 14, subdivision 3, is amended to 120.28read: 120.29    Subd. 3. Housing account. Tax increment to be expended for housing new text begin and new text end 120.30 new text begin environmental remediation new text end activities under this section must be segregated by the 120.31authority into a special account on its official books and records. The account may also 120.32receive funds from other public and private sources. 121.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 121.2    Sec. 26. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by 121.3Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10, 121.4section 12, is amended to read: 121.5    Subd. 4. Authority. For housing replacement projects in the city of Crystal, 121.6"authority" means the Crystal economic development authority. For housing replacement 121.7projects in the city of Fridley, "authority" means the housing and redevelopment authority 121.8in and for the city of Fridley or a successor in interest. For housing replacement 121.9projects in the city of Minneapolis, "authority" means the Minneapolis community 121.10development agency new text begin or its successors and assigns new text end . For housing replacement projects 121.11in the city of St. Paul, "authority" means the St. Paul housing and redevelopment 121.12authority. For housing replacement projects in the city of Duluth, "authority" means the 121.13Duluth economic development authority. For housing replacement projects in the city of 121.14Richfield, "authority" is the authority as defined in Minnesota Statutes, section 469.174, 121.15subdivision 2 , that is designated by the governing body of the city of Richfield. For 121.16housing replacement projects in the city of Columbia Heights, "authority" is the authority 121.17as defined in Minnesota Statutes, section 469.174, subdivision 2, that is designated by the 121.18governing body of the city of Columbia Heights. 121.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 121.20 new text begin and upon compliance by the governing body of the city of Minneapolis with Minnesota new text end 121.21 new text begin Statutes, section 645.021, subdivision 3. new text end 121.22    Sec. 27. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by 121.23Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10, 121.24section 13, and Laws 2002, chapter 377, article 7, section 6, is amended to read: 121.25    Subdivision 1. Creation of projects. (a) An authority may create a housing 121.26replacement project under sections 44 to 47, as provided in this section. 121.27    (b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, the authority 121.28may designate up to 50 parcels in the city to be included in a housing replacement 121.29district. No more than ten parcels may be included in year one of the district, with up 121.30to ten additional parcels added to the district in each of the following nine years. For 121.31the cities of Minneapolis, St. Paul, and Duluth, each authority may designate not more 121.32than 200 parcels in the city to be included in a housing replacement district over the life 121.33of the district. new text begin For the city of Minneapolis, the authority may designate not more than new text end 121.34 new text begin 400 parcels in the city to be included in a housing replacement district over the life of new text end 122.1 new text begin the district. new text end The only parcels that may be included in a district are (1) vacant sites, (2) 122.2parcels containing vacant houses, or (3) parcels containing houses that are structurally 122.3substandard, as defined in Minnesota Statutes, section 469.174, subdivision 10. 122.4    (c) The city in which the authority is located must pay at least 25 percent of the 122.5housing replacement project costs from its general fund, a property tax levy, or other 122.6unrestricted money, not including tax increments. 122.7    (d) The housing replacement district plan must have as its sole object the acquisition 122.8of parcels for the purpose of preparing the site to be sold for market rate housing. As 122.9used in this section, "market rate housing" means housing that has a market value that 122.10does not exceed 150 percent of the average market value of single-family housing in that 122.11municipality. 122.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 122.13 new text begin and upon compliance by the governing body of the city of Minneapolis with Minnesota new text end 122.14 new text begin Statutes, section 645.021, subdivision 3. new text end 122.15    Sec. 28. Laws 2005, First Special Session chapter 3, article 10, section 23, is amended 122.16to read: 122.17    Sec. 23. GRANTS TO QUALIFYING BUSINESSES. 122.18    $750,000 is appropriated in fiscal year 2006 from the general fund to the 122.19commissioner of employment and economic development to be distributed to the 122.20foreign trade zone authority to provide grants to qualified businesses as determined 122.21by the authority, subject to Minnesota Statutes, sections 116J.993 to 116J.995, to 122.22provide incentives for the businesses to locate their operations in an international 122.23economic development zone. new text begin Of this appropriation, up to $250,000 may be used by the new text end 122.24 new text begin commissioner for a study to determine the economic viability of business plans for new text end 122.25 new text begin international economic development zones. new text end If the money is not distributed during fiscal 122.26year 2006, it remains available for distribution under this section during fiscal year 2007. 122.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 122.28    Sec. 29. new text begin BURNSVILLE; NORTHWEST QUADRANT TAX INCREMENT new text end 122.29 new text begin FINANCING. new text end 122.30     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For the purposes of this section, the words and new text end 122.31 new text begin phrases defined have the meanings given them in this subdivision. new text end 122.32     new text begin (b) "City" means the city of Burnsville. new text end 123.1     new text begin (c) "Project area" means the area in the city bounded on the south, southeast, and new text end 123.2 new text begin southwest by the southerly right-of-way line of Minnesota Trunk Highway 13; on the east new text end 123.3 new text begin by the easterly right-of-way line of Interstate Highway I-35W; on the north and northwest new text end 123.4 new text begin by the Minnesota River; and on the west by the westerly corporate limits of the city, new text end 123.5 new text begin together with a single parcel to the east of said Interstate Highway I-35W described as new text end 123.6 new text begin the North 1370 feet of the West 1075 feet of the NW Quarter of Section 34 Township 27 new text end 123.7 new text begin Range 24 in the city of Burnsville, Dakota County, except the North 50 feet thereof; new text end 123.8 new text begin provided that the project area includes the rights-of-way for all present and future highway new text end 123.9 new text begin interchanges abutting the area described in this paragraph. new text end 123.10     new text begin (d) "Soil deficiency district" means a type of tax increment financing district new text end 123.11 new text begin consisting of a portion of the project area in which the city finds by resolution that the new text end 123.12 new text begin following conditions exist: new text end 123.13     new text begin (1) unusual terrain or soil deficiencies for 80 percent of the acreage in the district new text end 123.14 new text begin require substantial filling, grading, or other physical preparation for use; and new text end 123.15     new text begin (2) the estimated cost of the physical preparation under clause (1), but excluding new text end 123.16 new text begin costs directly related to roads as defined in Minnesota Statutes, section 160.01, and new text end 123.17 new text begin local improvements as described in Minnesota Statutes, sections 429.021, subdivision 1, new text end 123.18 new text begin clauses (1) to (7), (11), and (12), and 430.01, exceeds the fair market value of the land new text end 123.19 new text begin before completion of the preparation. new text end 123.20     new text begin Subd. 2. new text end new text begin Special rules. new text end new text begin (a) If the city elects, upon the adoption of the tax increment new text end 123.21 new text begin financing plan for a district, the rules under this section apply to a redevelopment district, new text end 123.22 new text begin renewal and renovation district, soil condition district, or a soil deficiency district new text end 123.23 new text begin established by the city or a development authority of the city in the project area. new text end 123.24     new text begin (b) Prior to or upon the adoption of the first tax increment plan subject to the special new text end 123.25 new text begin rules under this subdivision, the city must find by resolution that parcels consisting of at new text end 123.26 new text begin least 80 percent of the acreage of the project area (excluding street and railroad right of new text end 123.27 new text begin way) are characterized by one or more of the following conditions: new text end 123.28     new text begin (1) peat or other soils with geotechnical deficiencies that impair development of new text end 123.29 new text begin residential or commercial buildings or infrastructure; new text end 123.30     new text begin (2) soils or terrain that requires substantial filling in order to permit the development new text end 123.31 new text begin of commercial or residential buildings or infrastructure; new text end 123.32     new text begin (3) landfills, dumps, or similar deposits of municipal or private waste; new text end 123.33     new text begin (4) quarries or similar resource extraction sites; new text end 123.34     new text begin (5) floodway; and new text end 123.35     new text begin (6) substandard buildings within the meaning of Minnesota Statutes, section new text end 123.36 new text begin 469.174, subdivision 10. new text end 124.1     new text begin (c) For the purposes of paragraph (b), clauses (1) through (5), a parcel is deemed to new text end 124.2 new text begin be characterized by the relevant condition if at least 70 percent of the area of the parcel new text end 124.3 new text begin contains the relevant condition. For the purposes of paragraph (b), clause (6), a parcel is new text end 124.4 new text begin deemed to be characterized by substandard buildings if the buildings occupy at least 30 new text end 124.5 new text begin percent of the area of the parcel. new text end 124.6     new text begin (d) The five-year rule under Minnesota Statutes, section 469.1763, subdivision new text end 124.7 new text begin 3, is extended to ten years for any district, and section 469.1763, subdivision 4, does new text end 124.8 new text begin not apply to any district. new text end 124.9     new text begin (e) Notwithstanding anything to the contrary in section 469.1763, subdivision 2, new text end 124.10 new text begin paragraph (a), not more than 80 percent of the total revenue derived from tax increments new text end 124.11 new text begin paid by properties in any district (measured over the life of the district) may be expended new text end 124.12 new text begin on activities outside the district but within the project area. new text end 124.13     new text begin (f) For a soil deficiency district: new text end 124.14     new text begin (1) increments may be collected through 20 years after the receipt by the authority of new text end 124.15 new text begin the first increment from the district; and new text end 124.16     new text begin (2) except as otherwise provided in this subdivision, increments may be used only to: new text end 124.17     new text begin (i) acquire parcels on which the improvements described in item (ii) will occur; new text end 124.18     new text begin (ii) pay for the cost of correcting the unusual terrain or soil deficiencies and the new text end 124.19 new text begin additional cost of installing public improvements directly caused by the deficiencies; and new text end 124.20     new text begin (iii) pay for the administrative expenses of the authority allocable to the district. new text end 124.21     new text begin (g) Increments spent for any infrastructure costs, whether inside a district or outside new text end 124.22 new text begin a district but within the project area, are deemed to satisfy the requirements of paragraph new text end 124.23 new text begin (f) and Minnesota Statutes, section 469.176, subdivisions 4b and 4j. new text end 124.24     new text begin (h) Increments from any district may not be used to pay the costs of landfill closure or new text end 124.25 new text begin public infrastructure located on the following parcels within the plat known as Burnsville new text end 124.26 new text begin Amphitheater: Lot 1, Block 1; Lots 1 and 2, Block 2; and Outlots A, B, C and D. new text end 124.27     new text begin (i) The authority to approve tax increment financing plans to establish tax increment new text end 124.28 new text begin financing districts under this section expires on December 31, 2017. new text end 124.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance with Minnesota new text end 124.30 new text begin Statutes, section 645.021, subdivision 3. new text end 124.31    Sec. 30. new text begin CITY OF EAGAN; TAX INCREMENT FINANCING DISTRICT. new text end 124.32     new text begin Subdivision 1. new text end new text begin Authorization; location. new text end new text begin The city of Eagan may establish within new text end 124.33 new text begin the corporate boundaries of the city one or more economic development tax increment new text end 124.34 new text begin financing districts subject to the special rules under subdivision 2. The districts must be new text end 125.1 new text begin located within the "area" defined for purposes of this section as Section 13, Township new text end 125.2 new text begin 27, Range 23, Dakota County, Minnesota. new text end 125.3     new text begin Subd. 2. new text end new text begin Special rules. new text end new text begin (a) If the city elects upon adoption of the tax increment new text end 125.4 new text begin financing plan for the district, the rules under this subdivision apply to the district. new text end 125.5     new text begin (b) The limitations in Minnesota Statutes, section 469.176, subdivision 4c, on new text end 125.6 new text begin spending increment for developments more than 15 percent of the square footage of which new text end 125.7 new text begin is used for purposes other than those listed in that subdivision, do not apply. new text end 125.8     new text begin (c) Increments may be expended on surface parking, sanitary sewer, storm sewer, new text end 125.9 new text begin water, and street improvements inside and outside the area whether or not included in a tax new text end 125.10 new text begin increment financing district, and without regard to any limitations in Minnesota Statutes, new text end 125.11 new text begin section 469.1763, subdivision 2, if the improvements are related to development within new text end 125.12 new text begin the area and on administrative expenses. new text end 125.13     new text begin Subd. 3. new text end new text begin Business subsidy agreement required. new text end new text begin Prior to approval of a tax new text end 125.14 new text begin increment financing plan for a district authorized by this section, the city must enter new text end 125.15 new text begin a business subsidy agreement with the recipient or beneficiary of expenditures of the new text end 125.16 new text begin increments. The agreement must set minimum full-time employment goals, minimum new text end 125.17 new text begin compensation amounts of the employment positions, and minimum investment amounts new text end 125.18 new text begin for the project and must provide for repayment of all or part of the assistance, if the new text end 125.19 new text begin established goals are not met by the recipient or beneficiaries. new text end 125.20     new text begin Subd. 4. new text end new text begin Expiration of authority. new text end new text begin The authority to approve tax increment financing new text end 125.21 new text begin plans to establish tax increment financing districts under this section expires on December new text end 125.22 new text begin 31, 2008. new text end 125.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the city of new text end 125.24 new text begin Eagan with Minnesota Statutes, section 645.021. new text end 125.25    Sec. 31. new text begin CITY OF EYOTA; TAX INCREMENT FINANCING DISTRICT. new text end 125.26     new text begin Subdivision 1. new text end new text begin Authorization. new text end new text begin Notwithstanding the mileage limitation in Minnesota new text end 125.27 new text begin Statutes, section 469.174, subdivision 27, the city of Eyota is deemed to be a small city for new text end 125.28 new text begin the purposes of Minnesota Statutes, section 469.174 to 469.1799, as long as its population new text end 125.29 new text begin does not exceed the population limit in that section. new text end 125.30     new text begin Subd. 2. new text end new text begin Local approval. new text end new text begin This section is effective for the city of Eyota upon new text end 125.31 new text begin approval of Eyota's governing body and compliance with Minnesota Statutes, section new text end 125.32 new text begin 645.021, subdivisions 2 and 3. new text end 125.33    Sec. 32. new text begin CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT; new text end 125.34 new text begin SPECIAL RULES. new text end 126.1     new text begin (a) If the city elects upon the adoption of a tax increment financing plan for a district, new text end 126.2 new text begin the rules under this section apply to a redevelopment tax increment financing district new text end 126.3 new text begin established by the city of Fridley or the housing and redevelopment authority of the city. new text end 126.4 new text begin The redevelopment tax increment district includes the following parcels and adjacent new text end 126.5 new text begin railroad property and shall be referred to as the Northstar Transit Station District: parcel new text end 126.6 new text begin numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018, new text end 126.7 new text begin 223024120012, 223024120011, 223024120005, 223024120004, 223024120003, new text end 126.8 new text begin 223024120013, 223024120008, 223024120007, 223024120006, 223024130005, new text end 126.9 new text begin 223024130010, 223024130011, 223024130003, 153024440039, 153024440037, new text end 126.10 new text begin 153024440041, 153024440042, 223024110013, 223024110016, 223024110017, new text end 126.11 new text begin 223024140008, 223024130002, 223024420004, 223024410002, 223024410003, new text end 126.12 new text begin 223024110008, 223024110007, 223024110019, 223024110018, 223024110003, new text end 126.13 new text begin 223024140003, 223024140009, 223024140002, 223024140010, and 223024410007. new text end 126.14     new text begin (b) The requirements for qualifying a redevelopment tax increment district under new text end 126.15 new text begin Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located new text end 126.16 new text begin within the Northstar Transit Station District, which are deemed eligible for inclusion new text end 126.17 new text begin in a redevelopment tax increment district. new text end 126.18     new text begin (c) In addition to the costs permitted by Minnesota Statutes, section 469.176, new text end 126.19 new text begin subdivision 4j, eligible expenditures within the Northstar Transit Station District include new text end 126.20 new text begin those costs necessary to provide for the construction and land acquisition for a tunnel new text end 126.21 new text begin under the Burlington Northern Santa Fe railroad tracks. new text end 126.22     new text begin (d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763, new text end 126.23 new text begin subdivision 2, the city of Fridley may expend increments generated from its tax increment new text end 126.24 new text begin financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota new text end 126.25 new text begin Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing new text end 126.26 new text begin districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District. new text end 126.27     new text begin (e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, new text end 126.28 new text begin does not apply to the Northstar Transit Station District or to tax increment financing new text end 126.29 new text begin districts Nos. 11, 12, and 13. new text end 126.30     new text begin (f) The use of revenues for decertification under Minnesota Statutes, section new text end 126.31 new text begin 469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11, new text end 126.32 new text begin 12, and 13. new text end 126.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon approval by the governing body new text end 126.34 new text begin of the city of Fridley and upon compliance by the city with Minnesota Statutes, section new text end 126.35 new text begin 645.021, subdivision 3. new text end 127.1    Sec. 33. new text begin CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING; new text end 127.2 new text begin EXPENDITURES OUTSIDE DISTRICT. new text end 127.3     new text begin Notwithstanding the provisions of Minnesota Statutes, section 469.1763, subdivision new text end 127.4 new text begin 2, the city of New Brighton may expend increments generated from its tax increment new text end 127.5 new text begin financing district No. 26 to facilitate eligible activities as permitted by Minnesota Statutes, new text end 127.6 new text begin section 469.176, subdivision 4e, outside the boundaries of tax increment financing district new text end 127.7 new text begin No. 26, but only within the area described in Laws 1998, chapter 389, article 11, section new text end 127.8 new text begin 24, subdivision 1, and commonly referred to as the Northwest Quadrant. Minnesota new text end 127.9 new text begin Statutes, section 469.1763, subdivisions 3 and 4, do not apply to expenditures permitted new text end 127.10 new text begin by this section. new text end 127.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon approval by the governing new text end 127.12 new text begin body of the city of New Brighton and compliance by the city with Minnesota Statutes, new text end 127.13 new text begin section 645.021, subdivision 3. new text end 127.14    Sec. 34. new text begin APPROPRIATION. new text end 127.15     new text begin $200,000 in fiscal year 2008 and $200,000 in fiscal year 2009 are appropriated new text end 127.16 new text begin from the general fund to the commissioner of employment and economic development to new text end 127.17 new text begin provide a grant to the city of Fergus Falls to market and promote economic development new text end 127.18 new text begin of the site formerly used as a regional treatment facility. new text end 127.19    Sec. 35. new text begin REPEALER. new text end 127.20 new text begin (a) new text end new text begin Minnesota Statutes 2006, section 469.174, subdivision 29, new text end new text begin is repealed. new text end 127.21 new text begin (b) new text end new text begin Laws 1998, chapter 389, article 11, section 18, new text end new text begin is repealed. new text end 127.22 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) is effective the day following final enactment. new text end 127.23 new text begin For purposes of any special law authorizing or limiting the use of increments to projects new text end 127.24 new text begin meeting the requirements of a qualified housing district, expenditures for housing districts new text end 127.25 new text begin satisfying the requirements of Minnesota Statutes, sections 469.174, subdivision 11; new text end 127.26 new text begin 469.176, subdivision 4d; and 469.1761, as amended, also satisfy the requirements of new text end 127.27 new text begin the special law. new text end 127.28     new text begin Paragraph (b) is effective upon compliance with Minnesota Statutes, section new text end 127.29 new text begin 645.021, subdivision 3, by the governing body of the city of Burnsville. The balance of new text end 127.30 new text begin tax increments derived from tax increment financing district No. 2-1 as of the effective new text end 127.31 new text begin date of this section must be returned to the county for distribution in accordance with new text end 127.32 new text begin Minnesota Statutes, section 469.176, subdivision 2. new text end 128.1ARTICLE 7 128.2PUBLIC FINANCE 128.3    Section 1. Minnesota Statutes 2006, section 118A.03, subdivision 3, is amended to read: 128.4    Subd. 3. Amount. The total amount of the collateral computed at its market value 128.5shall be at least ten percent more than the amount on deposit plus accrued interest at 128.6the close of the financial institution's banking day, except that where the collateral is 128.7irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of 128.8collateral shall be at least equal to the amount on deposit plus accrued interest at the close 128.9of the financial institution's banking day. The financial institution may furnish both a 128.10surety bond and collateral aggregating the required amount. 128.11    Sec. 2. Minnesota Statutes 2006, section 123B.61, is amended to read: 128.12123B.61 PURCHASE OF CERTAIN EQUIPMENT. 128.13    The board of a district may issue general obligation certificates of indebtedness 128.14or capital notes subject to the district debt limits to: (a) purchase vehicles, computers, 128.15telephone systems, cable equipment, photocopy and office equipment, technological 128.16equipment for instruction, and other capital equipment having an expected useful life at 128.17least as long as the terms of the certificates or notes; (b) purchase computer hardware and 128.18software, without regard to its expected useful life, whether bundled with machinery or 128.19equipment or unbundled, together with application development services and training 128.20related to the use of the computer; and (c) prepay special assessments. The certificates or 128.21notes must be payable in not more than five new text begin ten new text end years and must be issued on the terms 128.22and in the manner determined by the board, except that certificates or notes issued to 128.23prepay special assessments must be payable in not more than 20 years. The certificates 128.24or notes may be issued by resolution and without the requirement for an election. The 128.25certificates or notes are general obligation bonds for purposes of section 126C.55. A tax 128.26levy must be made for the payment of the principal and interest on the certificates or 128.27notes, in accordance with section 475.61, as in the case of bonds. The sum of the tax 128.28levies under this section and section 123B.62 for each year must not exceed the lesser 128.29of the amount of the district's total operating capital revenue or the sum of the district's 128.30levy in the general and community service funds excluding the adjustments under this 128.31section for the year preceding the year the initial debt service levies are certified. The 128.32district's general fund levy for each year must be reduced by the sum of (1) the amount 128.33of the tax levies for debt service certified for each year for payment of the principal and 128.34interest on the certificates or notes issued under this section as required by section 475.61, 129.1(2) the amount of the tax levies for debt service certified for each year for payment of the 129.2principal and interest on bonds issued under section 123B.62, and (3) any excess amount 129.3in the debt redemption fund used to retire bonds, certificates, or notes issued under this 129.4section or section 123B.62 after April 1, 1997, other than amounts used to pay capitalized 129.5interest. If the district's general fund levy is less than the amount of the reduction, the 129.6balance shall be deducted first from the district's community service fund levy, and next 129.7from the district's general fund or community service fund levies for the following year. A 129.8district using an excess amount in the debt redemption fund to retire the certificates or 129.9notes shall report the amount used for this purpose to the commissioner by July 15 of the 129.10following fiscal year. A district having an outstanding capital loan under section 126C.69 129.11or an outstanding debt service loan under section 126C.68 must not use an excess amount 129.12in the debt redemption fund to retire the certificates or notes. 129.13    Sec. 3. Minnesota Statutes 2006, section 275.61, subdivision 1, is amended to read: 129.14    Subdivision 1. Market value. new text begin (a) new text end For local governmental subdivisions other than 129.15school districts, any levy, including the issuance of debt obligations payable in whole or in 129.16part from property taxes, required to be approved and approved by the voters at a general 129.17or special election for taxes payable in 1993 and thereafter, shall be levied against the 129.18referendum market value of all taxable property within the governmental subdivision, as 129.19defined in section 126C.01, subdivision 3. Any levy amount subject to the requirements of 129.20this section shall be certified separately to the county auditor under section 275.07. 129.21     new text begin (b) new text end The ballot shall state the maximum amount of the increased levy as a percentage 129.22of market value and the amount that will be raised by the new referendum tax rate in the 129.23first year it is to be levied. 129.24     new text begin (c) This subdivision does not apply to tax levies for the payment of debt obligations new text end 129.25 new text begin that are approved by the voters after June 30, 2007. new text end 129.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 129.27    Sec. 4. Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read: 129.28    Subd. 2. Time of notice. Unless otherwise specified by a particular statute new text begin law new text end , or 129.29by order of a court, publication of a public notice shall be as follows: 129.30    (a) the notice shall be published once; 129.31    (b) if the notice is intended to inform the public about a future event, the last 129.32publication shall occur not more than 14 new text begin 30 new text end days and not less than seven days before 129.33the event; 130.1    (c) if the notice is intended to inform the public about a past action or event, the last 130.2publication shall occur not more than 45 days after occurrence of the action or event. 130.3    Sec. 5. Minnesota Statutes 2006, section 365A.02, is amended to read: 130.4365A.02 DEFINITION new text begin DEFINITIONS new text end . 130.5     new text begin Subdivision 1. new text end new text begin Subordinate service district. new text end "Subordinate service district" means a 130.6defined area within the town in which one or more governmental services or additions to 130.7townwide new text begin special new text end services are provided by the town specially for the area and financed 130.8from revenues from the area. The boundaries of a single subordinate service district 130.9may not embrace an entire town. 130.10     new text begin Subd. 2. new text end new text begin Special services. new text end new text begin "Special services" means one or more governmental new text end 130.11 new text begin services or additions to townwide services provided by the town specially for the area new text end 130.12 new text begin and financed from revenues from the area. new text end 130.13    Sec. 6. Minnesota Statutes 2006, section 365A.04, is amended to read: 130.14365A.04 CREATION BY PETITION. 130.15    Subdivision 1. Petition. A petition signed by at least 50 percent of the property 130.16owners in the part of the town proposed for the subordinate service district may be 130.17submitted to the town board requesting the establishment of a subordinate service district 130.18to provide a service that the town is otherwise authorized by law to provide. The petition 130.19must include the territorial boundaries of the proposed district and specify the kinds of 130.20services to be provided within the district. 130.21     new text begin Subd. 1a. new text end new text begin Creation by town board. new text end new text begin The town board may establish a subordinate new text end 130.22 new text begin service district in a portion of the town by adoption of a resolution, subject to the new text end 130.23 new text begin requirements of subdivision 2. new text end 130.24    Subd. 2. Public hearing. Upon receipt of the petition, and the verification of the 130.25signatures by the town clerk new text begin or prior to adoption of the resolution specified in subdivision new text end 130.26 new text begin 1a new text end , the town board shall, within 30 days following verification new text begin or prior to adoption of the new text end 130.27 new text begin resolution specified in subdivision 1a new text end , hold a public hearing on the question of whether or 130.28not the requested district shall be established. new text begin The notice of public hearing must specify new text end 130.29 new text begin the special services to be provided within the subordinate service district and must specify new text end 130.30 new text begin the territorial boundaries of the requested district. The notice of public hearing must be new text end 130.31 new text begin published once in a newspaper of general circulation in the town at least 14 days prior new text end 130.32 new text begin to the date of the public hearing. new text end 130.33    Subd. 3. Approval; disapproval. Within 30 days after the public hearing, the 130.34town board by resolution shall approve or disapprove the establishment of the requested 131.1district. new text begin An approving resolution must specify the special services to be provided within new text end 131.2 new text begin the subordinate service district and must specify the territorial boundaries of the district. new text end 131.3A resolution approving the establishment of the district may contain amendments or 131.4modifications of the district's boundaries or functions as set forth in the petition new text begin or the new text end 131.5 new text begin resolution specified in subdivision 1a new text end . 131.6    Sec. 7. Minnesota Statutes 2006, section 365A.08, is amended to read: 131.7365A.08 FINANCING. 131.8     new text begin Subdivision 1. new text end new text begin Budget. new text end new text begin (a) new text end Upon adoption of the next annual budget following 131.9the creation of a subordinate service district the town board shall include in the budget 131.10appropriate provisions for the operation of the district including either a property tax 131.11levied only on property of the users of the service within the boundaries of the district 131.12or a levy of a service charge against the users of the service within the district, or a 131.13combination of a property tax and a service charge on the users of the service. 131.14     new text begin (b) new text end A tax or service charge or a combination of them may be imposed to finance a 131.15function or service in the district that the town ordinarily provides throughout the town 131.16only to the extent that there is an increase in the level of the function or service provided 131.17in the service district over that provided throughout the town. In that case, in addition 131.18to the townwide tax levy, an amount necessary to pay for the increase in the level of the 131.19function or service may be imposed in the district. 131.20     new text begin Subd. 2. new text end new text begin Bonds. new text end new text begin At any time after the requirements of section 356A.06 have been new text end 131.21 new text begin met and the subordinate service district created, the town board may issue obligations new text end 131.22 new text begin in an amount it deems necessary to defray in whole or in part the expense incurred new text end 131.23 new text begin and estimated to be incurred in making capital improvements necessary to operate the new text end 131.24 new text begin subordinate service district and provide the special services in the district, including every new text end 131.25 new text begin item of cost from inception to completion and all fees and expenses incurred in connection new text end 131.26 new text begin with the capital improvements or the financing. The obligations are payable primarily new text end 131.27 new text begin out of the proceeds of the taxes and service charges imposed under subdivision 1, net new text end 131.28 new text begin revenues as described in section 444.075, and special assessments under chapter 429. The new text end 131.29 new text begin town board may by resolution pledge the full faith credit and taxing power of the town new text end 131.30 new text begin to ensure payment of the principal and interest on the obligations if the proceeds of the new text end 131.31 new text begin taxes and service charges are insufficient to pay the principal and interest. Obligations new text end 131.32 new text begin must be issued in accordance with chapter 475, except that an election is not required, and new text end 131.33 new text begin the amount of the obligations is not included in determining the net indebtedness of the new text end 131.34 new text begin town under the provisions of any law limiting indebtedness. new text end 132.1     new text begin Subd. 3. new text end new text begin Covenants to secure obligations. new text end new text begin In resolutions authorizing the issuance new text end 132.2 new text begin of general or special obligations and pledging taxes and service charges imposed under new text end 132.3 new text begin subdivision 1, net revenues, or special assessments to their payment, the town board new text end 132.4 new text begin may make covenants for the protection of holders of the obligations and taxpayers of the new text end 132.5 new text begin town as it deems necessary, including a covenant that the town will impose and collect new text end 132.6 new text begin charges of the nature authorized by this chapter at the time and in the amounts required to new text end 132.7 new text begin produce, together with any taxes or special assessments designated as a primary source new text end 132.8 new text begin of payment of the obligations, funds adequate to pay all principal and interest when due new text end 132.9 new text begin on the obligations, and to create and maintain reserves securing the payments as may be new text end 132.10 new text begin provided in the resolutions. new text end 132.11    Sec. 8. Minnesota Statutes 2006, section 365A.095, is amended to read: 132.12365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE. 132.13     new text begin Subdivision 1. new text end new text begin Petition. new text end A petition signed by at least 75 percent of the property 132.14owners in the territory of the subordinate service district requesting the removal of the 132.15district may be presented to the town board. Within 30 days after the town board receives 132.16the petition, the town clerk shall determine the validity of the signatures on the petition. If 132.17the requisite number of signatures are certified as valid, the town board must hold a public 132.18hearing on the petitioned matter. Within 30 days after the end of the hearing, the town 132.19board must decide whether to discontinue the subordinate service district, continue as it is, 132.20or take some other action with respect to it. 132.21     new text begin Subd. 2. new text end new text begin Bonds. new text end new text begin If obligations have been issued for the benefit of the subordinate new text end 132.22 new text begin service district, the rates, charges, and tax levies, if any, continue until the obligations and new text end 132.23 new text begin any obligations issued to refund them have been paid in full. new text end 132.24    Sec. 9. Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read: 132.25    Subd. 3. Capital notes. (a) A county board may, by resolution and without 132.26referendum, issue capital notes subject to the county debt limit to purchase capital 132.27equipment useful for county purposes that has an expected useful life at least equal to the 132.28term of the notes. The notes shall be payable in not more than ten years and shall be 132.29issued on terms and in a manner the board determines. A tax levy shall be made for 132.30payment of the principal and interest on the notes, in accordance with section 475.61, 132.31as in the case of bonds. 132.32    (b) For purposes of this subdivision, "capital equipment" means: 132.33    (1) public safety, ambulance, road construction or maintenance, and medical 132.34equipment; and 133.1    (2) computer hardware and software, whether bundled with machinery or equipment 133.2or unbundled. The authority to issue capital notes for software expires on July 1, 2007. 133.3    Sec. 10. Minnesota Statutes 2006, section 373.40, subdivision 4, is amended to read: 133.4    Subd. 4. Limitations on amount. A county, other than Ramsey, may not issue 133.5bonds under this section if the maximum amount of principal and interest to become due in 133.6any year on all the outstanding bonds issued pursuant to this section (including the bonds 133.7to be issued) will equal or exceed 0.05367 new text begin 0.12 new text end percent of taxable market value of property 133.8in the county. Ramsey county may not issue bonds under this section if the maximum 133.9amount of principal and interest to become due in any year on all the outstanding bonds 133.10issued pursuant to this section (including the bonds to be issued) will equal or exceed 133.110.06455 percent of taxable market value of property in the county. Calculation of the 133.12limit must be made using the taxable market value for the taxes payable year in which 133.13the obligations are issued and sold. This section does not limit the authority to issue 133.14bonds under any other special or general law. 133.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for bonds issued after June 30, 2007. new text end 133.16    Sec. 11. Minnesota Statutes 2006, section 375B.09, is amended to read: 133.17375B.09 FINANCING. 133.18     new text begin Subdivision 1. new text end new text begin Budget. new text end new text begin (a) new text end Upon adoption of the next annual budget following the 133.19creation of a subordinate service district the county board shall include in the budget 133.20appropriate provisions for the operation of the district including, as appropriate, either a 133.21property tax levied only on property within the boundaries of the district or a levy of a 133.22service charge against the users of the service within the district, or any combination of a 133.23property tax and a service charge. 133.24     new text begin (b) new text end A tax or service charge or a combination thereof shall not be imposed to finance a 133.25function or service in the new text begin subordinate new text end service district which the county generally provides 133.26throughout the county unless an increase in the level of the service is to be supplied in the 133.27 new text begin subordinate new text end service district in which case, in addition to the countywide tax levy, only an 133.28amount necessary to pay for the increased level of service may be imposed. 133.29     new text begin Subd. 2. new text end new text begin Bonds. new text end new text begin At any time after the requirements of section 375B.07 have been new text end 133.30 new text begin met and the subordinate service district created, the county board may issue obligations new text end 133.31 new text begin in an amount it deems necessary to defray in whole or in part the expense incurred new text end 133.32 new text begin and estimated to be incurred in making capital improvements necessary to operate the new text end 133.33 new text begin subordinate service district and provide the special services in the district, including every new text end 134.1 new text begin item of cost from inception to completion and all fees and expenses incurred in connection new text end 134.2 new text begin with the capital improvements or the financing. The obligations shall be payable primarily new text end 134.3 new text begin out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net new text end 134.4 new text begin revenues as described in section 444.075, and special assessments under chapter 429. The new text end 134.5 new text begin county board may by resolution pledge the full faith credit and taxing power of the county new text end 134.6 new text begin to ensure payment of the principal and interest on the obligations if the proceeds of the new text end 134.7 new text begin taxes and service charges are insufficient to pay the principal and interest. Obligations new text end 134.8 new text begin must be issued in accordance with chapter 475, except that an election is not required, and new text end 134.9 new text begin the amount of the obligations is not included in determining the net indebtedness of the new text end 134.10 new text begin county under the provisions of any law limiting indebtedness. new text end 134.11     new text begin Subd. 3. new text end new text begin Covenants to secure obligations. new text end new text begin In resolutions authorizing the issuance new text end 134.12 new text begin of general or special obligations and pledging taxes and service charges imposed under new text end 134.13 new text begin subdivision 1, net revenues, or special assessments to their payment, the county board new text end 134.14 new text begin may make covenants for the protection of holders of the obligations and taxpayers of the new text end 134.15 new text begin county as it deems necessary, including a covenant that the county will impose and collect new text end 134.16 new text begin charges of the nature authorized by this chapter at the time and in the amounts required to new text end 134.17 new text begin produce, together with any taxes or special assessments designated as a primary source new text end 134.18 new text begin of payment of the obligations, funds adequate to pay all principal and interest when due new text end 134.19 new text begin on the obligations and to create and maintain reserves securing the payments as may be new text end 134.20 new text begin provided in the resolutions. new text end 134.21     new text begin Subd. 4. new text end new text begin Continuance in the event of withdrawal. new text end new text begin If obligations have been issued new text end 134.22 new text begin for the benefit of the subordinate service district, and the district is withdrawn or removed new text end 134.23 new text begin pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in new text end 134.24 new text begin the withdrawn or removed district must continue until the obligations and any obligations new text end 134.25 new text begin issued to refund them have been paid in full. new text end 134.26    Sec. 12. Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read: 134.27    Subd. 2. Equipment acquisition; capital notes. The board may, by resolution and 134.28without public referendum, issue capital notes within existing debt limits for the purpose 134.29of purchasing ambulance and other medical equipment, road construction or maintenance 134.30equipment, public safety equipment and other capital equipment having an expected 134.31useful life at least equal to the term of the notes issued. The notes shall be payable in 134.32not more than five new text begin ten new text end years and shall be issued on terms and in a manner as the board 134.33determines. The total principal amount of the notes issued for any fiscal year shall not 134.34exceed one percent of the total annual budget for that year and shall be issued solely for 134.35the purchases authorized in this subdivision. A tax levy shall be made for the payment 135.1of the principal and interest on such notes as in the case of bonds. new text begin For purposes of this new text end 135.2 new text begin subdivision, "equipment" includes computer hardware and software, whether bundled with new text end 135.3 new text begin machinery or equipment or unbundled. new text end For purposes of this subdivision, the term "medical 135.4equipment" includes computer hardware and software and other intellectual property for 135.5use in medical diagnosis, medical procedures, research, record keeping, billing, and other 135.6hospital applications, together with application development services and training related 135.7to the use of the computer hardware and software and other intellectual property, all 135.8without regard to their useful life. For purposes of determining the amount of capital notes 135.9which the county may issue in any year, the budget of the county and Hennepin Healthcare 135.10System, Inc. shall be combined and the notes issuable under this subdivision shall be in 135.11addition to obligations issuable under section 373.01, subdivision 3. 135.12    Sec. 13. Minnesota Statutes 2006, section 383B.77, subdivision 1, is amended to read: 135.13    Subdivision 1. Creation. The Hennepin County Housing and Redevelopment 135.14Authority is created in the county of Hennepin. It shall have all of the powers and duties 135.15of a housing and redevelopment authority under sections 469.001 to 469.047. For the 135.16purposes of applying the municipal housing and redevelopment act to Hennepin County, 135.17the county has all of the powers and duties of a city, the county board has all the powers 135.18and duties of a governing body, the chair of the county board has all of the powers and 135.19duties of a mayor, and new text begin , notwithstanding section 469.008, new text end the area of operation includes the 135.20area within the territorial boundaries of the county. 135.21 new text begin EFFECTIVE DATE. new text end new text begin Because the population of Hennepin County is more than new text end 135.22 new text begin 1,000,000, under Minnesota Statutes, section 645.023, this section is effective without new text end 135.23 new text begin local approval. new text end 135.24    Sec. 14. Minnesota Statutes 2006, section 383B.77, subdivision 2, is amended to read: 135.25    Subd. 2. Limitation. This section does not limit or restrict any existing housing 135.26and redevelopment authority or prevent a municipality from creating an authority. For 135.27purposes of this subdivision, "housing and redevelopment authority" includes any 135.28municipal department, agency, or authority of the city of Minneapolis which exercises the 135.29powers of a housing and redevelopment authority pursuant to section 469.003 or other 135.30law. The county authority shall notify a municipal authority by January 31 of each year 135.31as to the activities the county authority plans to participate in within the municipality. 135.32The municipal authority shall notify the county authority within 45 days of the date of 135.33the notice from the county authority, if the municipal authority does not consent to the 135.34activities of the county authority. The county authority shall not exercise its powers in a 136.1municipality where a housing and redevelopment authority was created under Minnesota 136.2Statutes 1969, chapter 462, before June 8, 1971, except as provided in this subdivision. If a 136.3city housing and redevelopment authority requests the county housing and redevelopment 136.4authority to exercise any power or perform any function of the municipal authority, the 136.5county authority may do so. 136.6 new text begin EFFECTIVE DATE. new text end new text begin Because the population of Hennepin County is more than new text end 136.7 new text begin 1,000,000, under Minnesota Statutes, section 645.023, this section is effective without new text end 136.8 new text begin local approval. new text end 136.9    Sec. 15. Minnesota Statutes 2006, section 410.32, is amended to read: 136.10410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT. 136.11    (a) Notwithstanding any contrary provision of other law or charter, a home rule 136.12charter city may, by resolution and without public referendum, issue capital notes subject 136.13to the city debt limit to purchase capital equipment. 136.14    (b) For purposes of this section, "capital equipment" means: 136.15    (1) public safety equipment, ambulance and other medical equipment, road 136.16construction and maintenance equipment, and other capital equipment; and 136.17    (2) computer hardware and software, whether bundled with machinery or equipment 136.18or unbundled. 136.19    (c) The equipment or software must have an expected useful life at least as long as the 136.20term of the notes. The authority to issue capital notes for software expires on July 1, 2007. 136.21    (d) The notes shall be payable in not more than ten years and be issued on terms and 136.22in the manner the city determines. The total principal amount of the capital notes issued 136.23in a fiscal year shall not exceed 0.03 percent of the market value of taxable property 136.24in the city for that year. 136.25    (e) A tax levy shall be made for the payment of the principal and interest on the 136.26notes, in accordance with section 475.61, as in the case of bonds. 136.27    (f) Notes issued under this section shall require an affirmative vote of two-thirds of 136.28the governing body of the city. 136.29    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter 136.30city may also issue capital notes subject to its debt limit in the manner and subject to the 136.31limitations applicable to statutory cities pursuant to section 412.301. 136.32    Sec. 16. Minnesota Statutes 2006, section 412.301, is amended to read: 136.33412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT. 137.1    (a) The council may issue certificates of indebtedness or capital notes subject to the 137.2city debt limits to purchase capital equipment. 137.3    (b) For purposes of this section, "capital equipment" means: 137.4    (1) public safety equipment, ambulance and other medical equipment, road 137.5construction and maintenance equipment, and other capital equipment; and 137.6    (2) computer hardware and software, whether bundled with machinery or equipment 137.7or unbundled. 137.8    (c) The equipment or software must have an expected useful life at least as long as 137.9the terms of the certificates or notes. The authority to issue capital notes for software 137.10expires on July 1, 2007. 137.11    (d) Such certificates or notes shall be payable in not more than ten years and shall be 137.12issued on such terms and in such manner as the council may determine. 137.13    (e) If the amount of the certificates or notes to be issued to finance any such purchase 137.14exceeds 0.25 percent of the market value of taxable property in the city, they shall not 137.15be issued for at least ten days after publication in the official newspaper of a council 137.16resolution determining to issue them; and if before the end of that time, a petition asking 137.17for an election on the proposition signed by voters equal to ten percent of the number of 137.18voters at the last regular municipal election is filed with the clerk, such certificates or notes 137.19shall not be issued until the proposition of their issuance has been approved by a majority 137.20of the votes cast on the question at a regular or special election. 137.21    (f) A tax levy shall be made for the payment of the principal and interest on such 137.22certificates or notes, in accordance with section 475.61, as in the case of bonds. 137.23    Sec. 17. Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read: 137.24    Subd. 3. City. "City" means a city organized and existing under the laws of 137.25Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or 137.26charter to engage in the local distribution and sale of gas, provided that any city so 137.27engaged on January 1, 1979 is authorized to continue such distribution and sale, and every 137.28city now or hereafter so authorized may exercise, either individually or as a member of a 137.29municipal gas agency, all of the powers granted in sections 453A.01 to 453A.12. 137.30     new text begin City also includes a city organized and existing under the laws of another state or new text end 137.31 new text begin a city charter adopted pursuant thereto which participates in a municipal gas agency new text end 137.32 new text begin with Minnesota cities. new text end 137.33    Sec. 18. new text begin [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS. new text end 138.1     new text begin Subdivision 1. new text end new text begin Authorization; establishment. new text end new text begin A political subdivision or other new text end 138.2 new text begin public entity that creates or has created an actuarial liability to pay postemployment new text end 138.3 new text begin benefits to employees or officers after their termination of service may establish a trust to new text end 138.4 new text begin pay those benefits. For purposes of this section, the term "postemployment benefits" means new text end 138.5 new text begin benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting new text end 138.6 new text begin Standards Board and the term "trust" means a trust, a trust account, or a custodial account new text end 138.7 new text begin or contract authorized under section 401(f) of the Internal Revenue Code. new text end 138.8     new text begin Subd. 2. new text end new text begin Purpose of trust. new text end new text begin The trust established under this section may only be new text end 138.9 new text begin used to pay postemployment benefits and may be either revocable or irrevocable. new text end 138.10     new text begin Subd. 3. new text end new text begin Trust administrator. new text end new text begin The trust administrator of a trust established under new text end 138.11 new text begin this section shall be either: new text end 138.12     new text begin (1) the Public Employees Retirement Association; new text end 138.13     new text begin (2) a bank or banking association incorporated under the laws of the United States or new text end 138.14 new text begin of any state and authorized by the laws under which it is organized to exercise corporate new text end 138.15 new text begin trust powers; or new text end 138.16     new text begin (3) an insurance company or agency qualified to do business in Minnesota which has new text end 138.17 new text begin at least five years' experience in investment products and services for group retirement new text end 138.18 new text begin benefits and which has a specialized department dedicated to services for retirement new text end 138.19 new text begin investment products. new text end 138.20     new text begin A political subdivision or public entity may, in its discretion and in compliance new text end 138.21 new text begin with any applicable trust document, change trust administrators and transfer trust assets new text end 138.22 new text begin accordingly. new text end 138.23     new text begin Subd. 4. new text end new text begin Account maintenance. new text end new text begin (a) A political subdivision or other public entity new text end 138.24 new text begin may establish a trust account to be held under the supervision of the trust administrator for new text end 138.25 new text begin the purposes of this section. A trust administrator shall establish a separate account for new text end 138.26 new text begin each participating political subdivision or public entity. The trust administrator may charge new text end 138.27 new text begin participating political subdivisions and public entities fees for reasonable administrative new text end 138.28 new text begin costs. The amount of any fees charged by the Public Employees Retirement Association is new text end 138.29 new text begin appropriated to the association from the account. A trust administrator may establish other new text end 138.30 new text begin reasonable terms and conditions for creation and maintenance of these accounts. new text end 138.31     new text begin (b) The trust administrator must report to the political subdivision or other public new text end 138.32 new text begin entity on the investment returns of invested trust assets and on all investment fees or costs new text end 138.33 new text begin incurred by the trust. The annual rates of return, along with investment and administrative new text end 138.34 new text begin fees and costs for the trust, must be disclosed in the political subdivision's or public entity's new text end 138.35 new text begin annual financial audit in a manner prescribed by the state auditor. new text end 139.1     new text begin (c) Effective for fiscal years beginning after December 31, 2009, the trust new text end 139.2 new text begin administrator must report electronically to the state auditor the portfolio and performance new text end 139.3 new text begin information specified in section 356.219, subdivision 3, in the manner prescribed by new text end 139.4 new text begin the state auditor. new text end 139.5     new text begin Subd. 5. new text end new text begin Investment. new text end new text begin (a) The assets of a trust or trust account shall be invested and new text end 139.6 new text begin held as stipulated in paragraphs (b) to (e). new text end 139.7     new text begin (b) The Public Employees Retirement Association must certify all money in the trust new text end 139.8 new text begin accounts for which it is trust administrator to the State Board of Investment for investment new text end 139.9 new text begin under section 11A.14, subject to the policies and procedures established by the State new text end 139.10 new text begin Board of Investment. Investment earnings must be credited to the trust account of the new text end 139.11 new text begin individual political subdivision or public entity. new text end 139.12     new text begin (c) A trust administrator, other than the Public Employees Retirement Association, new text end 139.13 new text begin must ensure that all money in the trust accounts for which it is trust administrator is new text end 139.14 new text begin invested by a registered investment adviser, a bank investment trust department, or an new text end 139.15 new text begin insurance company or agency retirement investment department. Investment earnings new text end 139.16 new text begin must be credited to the trust account of the individual political subdivision or public entity. new text end 139.17     new text begin (d) For trust assets invested by the State Board of Investment, the investment new text end 139.18 new text begin restrictions shall be the same as those generally applicable to the State Board of new text end 139.19 new text begin Investment. For trust assets invested by a trust administrator other than the Public new text end 139.20 new text begin Employees Retirement Association, the assets may only be invested in investments new text end 139.21 new text begin authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified new text end 139.22 new text begin in the applicable trust document. new text end 139.23     new text begin (e) A political subdivision or public entity may provide investment direction to a new text end 139.24 new text begin trust administrator in compliance with any applicable trust document. new text end 139.25     new text begin Subd. 6. new text end new text begin Limit on deposit. new text end new text begin A political subdivision or public entity may not new text end 139.26 new text begin deposit money in a trust or trust account created pursuant to this section if the total new text end 139.27 new text begin amount invested by that political subdivision or public entity would exceed the political new text end 139.28 new text begin subdivision's or public entity's actuarially determined liabilities for postemployment new text end 139.29 new text begin benefits due to officers and employees, as determined under the applicable standards of the new text end 139.30 new text begin Governmental Accounting Standards Board. new text end 139.31     new text begin Subd. 7. new text end new text begin Withdrawal of funds and termination of account. new text end new text begin (a) For a revocable new text end 139.32 new text begin account, a political subdivision or public entity may withdraw some or all of its money new text end 139.33 new text begin or terminate the trust account. Money and accrued investment earnings withdrawn new text end 139.34 new text begin from a revocable account must be deposited in a fund separate and distinct from any new text end 139.35 new text begin other funds of the political subdivision or public entity. This money, with accrued new text end 139.36 new text begin investment earnings, must be used to pay legally enforceable postemployment benefits new text end 140.1 new text begin to former officers and employees, unless (i) there has been a change in state or federal new text end 140.2 new text begin law affecting that political subdivision's or public entity's liabilities for postemployment new text end 140.3 new text begin benefits, or (ii) there has been a change in the demographic composition of that political new text end 140.4 new text begin subdivision's or public entity's employees eligible for postemployment benefits, or (iii) new text end 140.5 new text begin there has been a change in the provisions or terms of the postemployment benefits in that new text end 140.6 new text begin political subdivision or public entity including, but not limited to, the portion of the costs new text end 140.7 new text begin eligible employees must pay to receive the benefits, or (iv) other factors exist that have new text end 140.8 new text begin a material effect on that political subdivision's or public entity's actuarially determined new text end 140.9 new text begin liabilities for postemployment benefits, in which event any amount in excess of 100 new text end 140.10 new text begin percent of that political subdivision's or public entity's actuarially determined liabilities for new text end 140.11 new text begin postemployment benefits, as determined under standards of the Government Accounting new text end 140.12 new text begin Standards Board, may be withdrawn and used for any purpose. new text end 140.13     new text begin (b) For an irrevocable account, a political subdivision or public entity may withdraw new text end 140.14 new text begin money only: new text end 140.15     new text begin (1) as needed to pay postemployment benefits owed to former officers and employees new text end 140.16 new text begin of the political subdivision or public entity; or new text end 140.17     new text begin (2) when all postemployment benefit liability owed to former officers or employees new text end 140.18 new text begin of the political subdivision or public entity has been satisfied or otherwise defeased. new text end 140.19     new text begin (c) A political subdivision or public entity requesting withdrawal of money from new text end 140.20 new text begin an account created under this section must do so at a time and in the manner required by new text end 140.21 new text begin the executive director of the Public Employees Retirement Association or specified in an new text end 140.22 new text begin applicable trust document. The political subdivision or public entity that created the trust new text end 140.23 new text begin must ensure that withdrawals comply with the requirements of this section. new text end 140.24     new text begin (d) The legislature may not divert funds in these trusts or trust accounts for use new text end 140.25 new text begin for another purpose. new text end 140.26     new text begin Subd. 8. new text end new text begin Status of irrevocable trust. new text end new text begin (a) All money in an irrevocable trust or trust new text end 140.27 new text begin account created in this section is held in trust for the exclusive benefit of former officers new text end 140.28 new text begin and employees of the participating political subdivision or public entity, and is not subject new text end 140.29 new text begin to claims by creditors of the state, the participating political subdivision or public entity, new text end 140.30 new text begin the current or former officers and employees of the political subdivision or public entity, new text end 140.31 new text begin or the trust administrator. new text end 140.32     new text begin (b) An irrevocable trust fund or trust account created in this section shall be deemed new text end 140.33 new text begin an arrangement equivalent to a trust for all legal purposes. new text end 140.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 140.35 new text begin and is applicable immediately to all political subdivisions or public entities subject to new text end 140.36 new text begin Statement No. 45 of the Governmental Accounting Standards Board in 2007, to those new text end 141.1 new text begin political subdivisions or public entities whose trusts or trust accounts are validated new text end 141.2 new text begin by section 27, and to those political subdivisions or public entities that have begun new text end 141.3 new text begin consideration of measures to implement Statement No. 45 in 2007. This section is new text end 141.4 new text begin applicable on July 1, 2008, for all other political subdivisions or public entities. new text end 141.5    Sec. 19. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision 141.6to read: 141.7     new text begin Subd. 1m. new text end new text begin Obligations. new text end new text begin After July 1, 2007, in addition to other authority in this new text end 141.8 new text begin section, the council may issue certificates of indebtedness, bonds, or other obligations new text end 141.9 new text begin under this section in an amount not exceeding $33,600,000 for capital expenditures as new text end 141.10 new text begin prescribed in the council's regional transit master plan and transit capital improvement new text end 141.11 new text begin program and for related costs, including the costs of issuance and sale of the obligations. new text end 141.12 new text begin APPLICATION AND EFFECTIVE DATE. new text end new text begin This section applies in the counties of new text end 141.13 new text begin Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the new text end 141.14 new text begin day following final enactment. new text end 141.15    Sec. 20. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision 141.16to read: 141.17     new text begin Subd. 5. new text end new text begin Anticipation of grants. new text end new text begin In addition to other authority granted in this new text end 141.18 new text begin section, the council may exercise the authority granted to an issuing political subdivision new text end 141.19 new text begin by section 475.522. new text end 141.20 new text begin APPLICATION AND EFFECTIVE DATE. new text end new text begin This section applies in the counties of new text end 141.21 new text begin Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the new text end 141.22 new text begin day following final enactment. new text end 141.23    Sec. 21. Minnesota Statutes 2006, section 475.51, subdivision 4, is amended to read: 141.24    Subd. 4. Net debt. "Net debt" means the amount remaining after deducting from its 141.25gross debt the amount of current revenues which are applicable within the current fiscal 141.26year to the payment of any debt and the aggregate of the principal of the following: 141.27    (1) Obligations issued for improvements which are payable wholly or partly from the 141.28proceeds of special assessments levied upon property specially benefited thereby, including 141.29those which are general obligations of the municipality issuing them, if the municipality is 141.30entitled to reimbursement in whole or in part from the proceeds of the special assessments. 141.31    (2) Warrants or orders having no definite or fixed maturity. 142.1    (3) Obligations payable wholly from the income from revenue producing 142.2conveniences. 142.3    (4) Obligations issued to create or maintain a permanent improvement revolving 142.4fund. 142.5    (5) Obligations issued for the acquisition, and betterment of public waterworks 142.6systems, and public lighting, heating or power systems, and of any combination thereof or 142.7for any other public convenience from which a revenue is or may be derived. 142.8    (6) Debt service loans and capital loans made to a school district under the provisions 142.9of sections 126C.68 and 126C.69. 142.10    (7) Amount of all money and the face value of all securities held as a debt service 142.11fund for the extinguishment of obligations other than those deductible under this 142.12subdivision. 142.13    (8) Obligations to repay loans made under section 216C.37. 142.14    (9) Obligations to repay loans made from money received from litigation or 142.15settlement of alleged violations of federal petroleum pricing regulations. 142.16    (10) Obligations issued to pay pension fund new text begin or other postemployment benefit new text end 142.17liabilities under section 475.52, subdivision 6, or any charter authority. 142.18    (11) Obligations issued to pay judgments against the municipality under section 142.19475.52, subdivision 6 , or any charter authority. 142.20    (12) All other obligations which under the provisions of law authorizing their 142.21issuance are not to be included in computing the net debt of the municipality. 142.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for obligations issued after June new text end 142.23 new text begin 30, 2007. new text end 142.24    Sec. 22. Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read: 142.25    Subd. 6. Certain purposes. Any municipality may issue bonds for paying 142.26judgments against it; for refunding outstanding bonds; for funding floating indebtedness; new text begin new text end 142.27 new text begin for funding actuarial liabilities to pay postemployment benefits to employees or officers new text end 142.28 new text begin after their termination of service; new text end or for funding all or part of the municipality's current 142.29and future unfunded liability for a pension or retirement fund or plan referred to in 142.30section 356.20, subdivision 2, as those liabilities are most recently computed pursuant 142.31to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or 142.32relief association referred to in section 69.77 or chapter 422A must consent and must 142.33be a party to any contract made under this section with respect to the fund held by it 142.34for the benefit of and in trust for its members. new text begin For purposes of this section, the term new text end 143.1 new text begin "postemployment benefits" means benefits giving rise to a liability under Statement No. new text end 143.2 new text begin 45 of the Governmental Accounting Standards Board. new text end 143.3    Sec. 23. new text begin [475.522] GRANT ANTICIPATION FINANCING OF new text end 143.4 new text begin TRANSPORTATION OR TRANSIT PROJECTS. new text end 143.5     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin For purposes of this section, the term "political new text end 143.6 new text begin subdivision" means a county or a statutory or home rule charter city, and the term new text end 143.7 new text begin "issuing political subdivision" means a political subdivision that issues obligations under new text end 143.8 new text begin subdivision 2. new text end 143.9     new text begin Subd. 2. new text end new text begin Authorization. new text end new text begin An issuing political subdivision may enter into agreements new text end 143.10 new text begin with any other political subdivision of the state, within or without its jurisdiction, and any new text end 143.11 new text begin state agency, with respect to federal grants for transportation or transit projects to be new text end 143.12 new text begin received directly or indirectly by or on behalf of the political subdivision or agency, new text end 143.13 new text begin under an executed grant agreement with the relevant federal agency. The agreements new text end 143.14 new text begin may provide that the political subdivision or agency will pledge to the issuing political new text end 143.15 new text begin subdivision all or a specified portion of the federal grants received by or on behalf of the new text end 143.16 new text begin political subdivision or agency for a specified period of years, or until all obligations issued new text end 143.17 new text begin by the issuing political subdivision under subdivision 3 with respect to those federal grants new text end 143.18 new text begin have been paid or legally defeased. If the issuing political subdivision issues obligations new text end 143.19 new text begin under subdivision 3, the agreements must provide the method by which the proceeds of new text end 143.20 new text begin the obligations will be used to pay or reimburse the costs of the transportation or transit new text end 143.21 new text begin projects relating to the federal grants described in the executed federal grant agreement. new text end 143.22     new text begin Subd. 3. new text end new text begin Issuance of obligations. new text end new text begin In anticipation of any federal grants for new text end 143.23 new text begin transportation or transit projects to be received directly or indirectly by any political new text end 143.24 new text begin subdivision or agency as specified in subdivision 1, or by an issuing political subdivision new text end 143.25 new text begin with respect to any transportation or transit projects within its jurisdiction, an issuing new text end 143.26 new text begin political subdivision may issue its obligations payable from the collections of those new text end 143.27 new text begin federal grants. The obligations may be issued in the principal amount the issuing political new text end 143.28 new text begin subdivision determines provided that the estimated collections of the federal grants under new text end 143.29 new text begin the relevant executed federal grant agreement in each year in which the obligations will new text end 143.30 new text begin be outstanding must be at least equal to: new text end 143.31     new text begin (1) if the obligations are to be issued as revenue obligations, 150 percent of the new text end 143.32 new text begin maximum annual debt service on the obligations; or new text end 143.33     new text begin (2) if the obligations are to be issued as general obligations, 110 percent of the new text end 143.34 new text begin maximum annual debt service on the obligations. new text end 144.1     new text begin Except as otherwise provided in this section, the issuing political subdivision shall new text end 144.2 new text begin provide for the issuance, sale, and security of the obligations as provided in chapter 475, new text end 144.3 new text begin and has the same powers and duties as a municipality issuing bonds under that law, except new text end 144.4 new text begin that no election is required and the net debt limitations in chapter 475 do not apply to the new text end 144.5 new text begin obligations. The issuing political subdivision may determine to issue the obligations as new text end 144.6 new text begin revenue obligations, payable solely from the collections of the federal grants anticipated, new text end 144.7 new text begin or may pledge its full faith and credit to the payment of the obligations. new text end 144.8     new text begin Subd. 4. new text end new text begin Use of proceeds. new text end new text begin The proceeds of the obligations must be used: new text end 144.9     new text begin (1) to pay or reimburse the costs of the transportation or transit projects relating to new text end 144.10 new text begin the federal grants being anticipated; new text end 144.11     new text begin (2) to pay the costs of issuance of the obligations, including credit enhancement; new text end 144.12     new text begin (3) to pay interest on the obligations for a period not exceeding three years from new text end 144.13 new text begin their date of issue; and new text end 144.14     new text begin (4) if the full faith and credit of the issuing political subdivision is not pledged to the new text end 144.15 new text begin payment of the obligations, to fund a debt service reserve fund for the obligations. new text end 144.16    Sec. 24. Minnesota Statutes 2006, section 475.53, subdivision 1, is amended to read: 144.17    Subdivision 1. Generally. Except as otherwise provided in sections 475.51 to 144.18475.74 , no municipality, except a school district or a city of the first class, shall incur or 144.19be subject to a net debt in excess of two new text begin three new text end percent of the market value of taxable 144.20property in the municipality. 144.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for obligations issued after June new text end 144.22 new text begin 30, 2007. new text end 144.23    Sec. 25. Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read: 144.24    Subdivision 1. Approval by electors; exceptions. Obligations authorized by law or 144.25charter may be issued by any municipality upon obtaining the approval of a majority of 144.26the electors voting on the question of issuing the obligations, but an election shall not be 144.27required to authorize obligations issued: 144.28    (1) to pay any unpaid judgment against the municipality; 144.29    (2) for refunding obligations; 144.30    (3) for an improvement or improvement program, which obligation is payable wholly 144.31or partly from the proceeds of special assessments levied upon property specially benefited 144.32by the improvement or by an improvement within the improvement program, or from tax 144.33increments, as defined in section 469.174, subdivision 25, including obligations which are 144.34the general obligations of the municipality, if the municipality is entitled to reimbursement 145.1in whole or in part from the proceeds of such special assessments or tax increments and 145.2not less than 20 percent of the cost of the improvement or the improvement program is to 145.3be assessed against benefited property or is to be paid from the proceeds of federal grant 145.4funds or a combination thereof, or is estimated to be received from tax increments; 145.5    (4) payable wholly from the income of revenue producing conveniences; 145.6    (5) under the provisions of a home rule charter which permits the issuance of 145.7obligations of the municipality without election; 145.8    (6) under the provisions of a law which permits the issuance of obligations of a 145.9municipality without an election; 145.10    (7) to fund pension or retirement fund new text begin or postemployment benefit new text end liabilities pursuant 145.11to section 475.52, subdivision 6; 145.12    (8) under a capital improvement plan under section 373.40; and 145.13    (9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if 145.14the proceeds of the bonds are not used for a purpose prohibited under section 469.176, 145.15subdivision 4g , paragraph (b). 145.16    Sec. 26. Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read: 145.17    Subd. 3b. Street reconstruction. (a) A municipality may, without regard to 145.18the election requirement under subdivision 1, issue and sell obligations for street 145.19reconstruction, if the following conditions are met: 145.20    (1) the streets are reconstructed under a street reconstruction plan that describes the 145.21streets to be reconstructed new text begin street reconstruction to be financed new text end , the estimated costs, and 145.22any planned reconstruction of other streets in the municipality over the next five years, 145.23and the plan and issuance of the obligations has been approved by a vote of all of the 145.24members of the governing body new text begin present at the meeting new text end following a public hearing for 145.25which notice has been published in the official newspaper at least ten days but not more 145.26than 28 days prior to the hearing; and 145.27    (2) if a petition requesting a vote on the issuance is signed by voters equal to 145.28five percent of the votes cast in the last municipal general election and is filed with the 145.29municipal clerk within 30 days of the public hearing, the municipality may issue the bonds 145.30only after obtaining the approval of a majority of the voters voting on the question of 145.31the issuance of the obligations. 145.32    (b) Obligations issued under this subdivision are subject to the debt limit of the 145.33municipality and are not excluded from net debt under section 475.51, subdivision 4. 145.34    (c) For purposes of this subdivision, street reconstruction includes utility 145.35replacement and relocation and other activities incidental to the street reconstruction, turn 146.1lanes and other improvements having a substantial public safety function, realignments, 146.2other modifications to intersect with state and county roads, and the local share of state 146.3and county road projects. 146.4    (d) Except in the case of turn lanes, safety improvements, realignments, intersection 146.5modifications, and the local share of state and county road projects, street reconstruction 146.6does not include the portion of project cost allocable to widening a street or adding curbs 146.7and gutters where none previously existed. 146.8    Sec. 27. new text begin VALIDATION. new text end 146.9     new text begin Any trust or trust account or other custodial account or contract authorized under new text end 146.10 new text begin section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay new text end 146.11 new text begin postemployment benefits to employees or officers after termination of service, is hereby new text end 146.12 new text begin validated, may continue in full force and effect, and shall have continuing authority new text end 146.13 new text begin to accept new funds; however, this section does not validate or correct defects in any new text end 146.14 new text begin previously created trust document. Any funds held by a validated trust or account new text end 146.15 new text begin under this section may be invested as provided in Minnesota Statutes, section 471.6175, new text end 146.16 new text begin subdivision 5. A validated trust or account shall have until January 1, 2008, to bring new text end 146.17 new text begin its trust documents and procedures into compliance with Minnesota Statutes, section new text end 146.18 new text begin 471.6175. new text end 146.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 146.20    Sec. 28. new text begin TOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS. new text end 146.21     new text begin Notwithstanding Minnesota Statutes, section 366.095, or any other law to the new text end 146.22 new text begin contrary, the town board of the town of Crane Lake in St. Louis County may issue one new text end 146.23 new text begin or more certificates of indebtedness in a total amount not to exceed $225,000, which new text end 146.24 new text begin are not subject to the debt limits of the town. The proceeds of the certificates must be new text end 146.25 new text begin used to acquire property and pay other costs related to a land exchange with the United new text end 146.26 new text begin States Forest Service. The certificates shall be payable in not more than 30 years and be new text end 146.27 new text begin issued on the terms and in the manner as the board may determine. Minnesota Statutes, new text end 146.28 new text begin sections 475.54, subdivision 1, and 475.56, paragraph (c), do not apply to the certificates new text end 146.29 new text begin issued under this section. A tax levy shall be made to pay the principal and interest on the new text end 146.30 new text begin certificates as in the case of bonds. new text end 146.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after the governing body of new text end 146.32 new text begin the town of Crane Lake and its chief clerical officer timely complete their compliance with new text end 146.33 new text begin Minnesota Statutes, section 645.021, subdivisions 2 and 3. new text end 147.1    Sec. 29. new text begin CITY OF WINSTED; BONDING AUTHORITY. new text end 147.2     new text begin (a) The city of Winsted may issue general obligation bonds under Minnesota new text end 147.3 new text begin Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of new text end 147.4 new text begin a city hall, community center, and police station; park improvements, including trails new text end 147.5 new text begin and an amphitheater; related public improvements; and substantial landscaping for the new text end 147.6 new text begin improvements. new text end 147.7     new text begin (b) The bonds may be issued as general obligations of the city without an election to new text end 147.8 new text begin approve the bonds under Minnesota Statutes, section 475.58. new text end 147.9     new text begin (c) The bonds are not included in computing any debt limitation applicable to the new text end 147.10 new text begin city, including, but not limited to, the net debt limits under Minnesota Statutes, section new text end 147.11 new text begin 475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of new text end 147.12 new text begin and interest on the bonds is not subject to any levy limitation. new text end 147.13     new text begin (d) The aggregate principal amount of bonds used to pay costs of the acquisition and new text end 147.14 new text begin betterment of the facility consisting of a city hall, community center, and police station; new text end 147.15 new text begin park improvements, including trails and an amphitheater; related public improvements; new text end 147.16 new text begin and substantial landscaping for the improvements may not exceed $4,900,000, plus an new text end 147.17 new text begin amount equal to the costs related to issuance of the bonds and capitalized interest. new text end 147.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the governing new text end 147.19 new text begin body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3. new text end 147.20ARTICLE 8 147.21MINERALS 147.22    Section 1. Minnesota Statutes 2006, section 276A.01, subdivision 3, is amended to 147.23read: 147.24    Subd. 3. Commercial-industrial property. "Commercial-industrial property" 147.25means the following categories of property, as defined in section 273.13, excluding that 147.26portion of the property (i) that may, by law, constitute the tax base for a tax increment 147.27pledged pursuant to section 469.042 or 469.162 or sections 469.174 to 469.178, 147.28certification of which was requested prior to May 1, 1996, to the extent and while the tax 147.29increment is so pledged; or (ii) that is exempt from taxation under section 272.02: 147.30    (1) that portion of class 5 property consisting of unmined iron ore and low-grade 147.31iron-bearing formations as defined in section 273.14, tools, implements, and machinery, 147.32except the portion of high voltage transmission lines, the value of which is deducted from 147.33net tax capacity under section 273.425; and 148.1    (2) that portion of class 3 and class 5 property which is either used or zoned for use 148.2for any commercial or industrial purpose, new text begin including property that becomes taxable under new text end 148.3 new text begin section 7, new text end except for such property which is, or, in the case of property under construction, 148.4will when completed be used exclusively for residential occupancy and the provision of 148.5services to residential occupants thereof. Property must be considered as used exclusively 148.6for residential occupancy only if each of not less than 80 percent of its occupied residential 148.7units is, or, in the case of property under construction, will when completed be occupied 148.8under an oral or written agreement for occupancy over a continuous period of not less 148.9than 30 days. 148.10    If the classification of property prescribed by section 273.13 is modified by 148.11legislative amendment, the references in this subdivision are to the successor class or 148.12classes of property, or portions thereof, that include the kinds of property designated 148.13in this subdivision. 148.14    Sec. 2. Minnesota Statutes 2006, section 276A.04, is amended to read: 148.15276A.04 INCREASE IN NET TAX CAPACITY. 148.16    By July 15 of 1997 and each subsequent year, the auditor of each county in the 148.17area shall determine the amount, if any, by which the net tax capacity determined in the 148.18preceding year pursuant to section 276A.03, of commercial-industrial property subject to 148.19taxation within each municipality in the county exceeds the net tax capacity in 1995 of 148.20commercial-industrial property subject to taxation within that municipality new text begin , including the new text end 148.21 new text begin total net tax capacity of property that becomes taxable under section 7 new text end . If a municipality is 148.22located in two or more counties within the area, the auditors of those counties shall certify 148.23the data required by section 276A.03 to the county auditor responsible for allocating 148.24the levies of that municipality between or among the affected counties. That county 148.25auditor shall determine the amount of the net excess, if any, for the municipality under 148.26this section, and certify that amount under section 276A.05. The increase in total net tax 148.27capacity determined by this section must be reduced by the amount of any decreases in 148.28the net tax capacity of commercial-industrial property resulting from any court decisions, 148.29court-related stipulation agreements, or abatements for a prior year, and only in the 148.30amount of such decreases made during the 12-month period ending on May 1 of the 148.31current assessment year, where the decreases, if originally reflected in the determination of 148.32a prior year's net tax capacity under section 276A.03, would have resulted in a smaller 148.33contribution from the municipality in that year. An adjustment for the decreases shall be 148.34made only if the municipality made a contribution in a prior year based on the higher net 148.35tax capacity of the commercial-industrial property. 149.1    Sec. 3. Minnesota Statutes 2006, section 298.22, is amended by adding a subdivision 149.2to read: 149.3     new text begin Subd. 5a. new text end new text begin Forest trust. new text end new text begin The commissioner, upon the affirmative vote of a majority new text end 149.4 new text begin of the members of the board, may purchase forest lands in the taconite assistance area new text end 149.5 new text begin defined in under section 273.1341 with funds specifically authorized for the purchase. The new text end 149.6 new text begin acquired forest lands must be held in trust for the benefit of the citizens of the taconite new text end 149.7 new text begin assistance area as the Iron Range Miners' Memorial Forest. The forest trust lands shall be new text end 149.8 new text begin managed and developed for recreation and economic development purposes. Proceeds new text end 149.9 new text begin derived from the management of the lands and from the sale of timber or removal of new text end 149.10 new text begin gravel or other minerals from these forest lands shall be deposited into an Iron Range new text end 149.11 new text begin Miners' Memorial Forest account that is established within the state financial accounts. new text end 149.12 new text begin Funds may be expended from the account upon approval of a majority of the members of new text end 149.13 new text begin the board to purchase, manage, administer, convey interests in, and improve the forest new text end 149.14 new text begin lands. By majority vote of the members of the board, money in the Iron Range Miners' new text end 149.15 new text begin Memorial Forest account may be transferred into the corpus of the Douglas J. Johnson new text end 149.16 new text begin economic protection trust fund established under sections 298.291 to 298.294. The new text end 149.17 new text begin property acquired under the authority granted by this subdivision and income derived from new text end 149.18 new text begin the property or the operation or management of the property are exempt from taxation new text end 149.19 new text begin by the state or its political subdivisions. new text end 149.20    Sec. 4. Minnesota Statutes 2006, section 298.2214, subdivision 2, is amended to read: 149.21    Subd. 2. new text begin Iron Range Higher Education Committee; new text end membership. The members 149.22of the committee shall consist of: 149.23    (1) one member appointed by the governor; 149.24    (2) one member appointed by the president of the University of Minnesota; 149.25    (3) two members appointed by the commissioner of new text begin the new text end Iron Range resources and 149.26rehabilitation new text begin appointed by the chair new text end ; and 149.27    (4) the commissioner of Iron Range resources and rehabilitation new text begin ; and new text end 149.28     new text begin (5) the President of the Northeast Higher Education District new text end . 149.29    Sec. 5. Minnesota Statutes 2006, section 298.227, is amended to read: 149.30298.227 TACONITE ECONOMIC DEVELOPMENT FUND. 149.31     new text begin Subdivision 1. new text end new text begin Fund for producers. new text end An amount equal to that distributed pursuant 149.32to each taconite producer's taxable production and qualifying sales under section 298.28, 149.33subdivision 9a , shall be held by the Iron Range Resources and Rehabilitation Board in 150.1a separate taconite economic development fund for each taconite and direct reduced 150.2ore producer. 150.3     new text begin Subd. 2. new text end new text begin Committee review. new text end Money from the fund for each producer shall be 150.4released by the commissioner after review by a joint committee consisting of an equal 150.5number of representatives of the salaried employees and the nonsalaried production and 150.6maintenance employees of that producer. The District 11 director of the United States 150.7Steelworkers of America, on advice of each local employee president, shall select 150.8the employee members. In nonorganized operations, the employee committee shall be 150.9elected by the nonsalaried production and maintenance employees. The review must be 150.10completed no later than six months after the producer presents a proposal for expenditure 150.11of the funds to the committee. 150.12     new text begin Subd. 3. new text end new text begin Release of funds. new text end The funds held pursuant to this section may be 150.13released only for acquisition of equipment and facilities for the producer or for research 150.14and development in Minnesota on new mining, or taconite, iron, or steel production 150.15technology, but only if the producer provides a matching expenditure to be used for 150.16the same purpose of at least 50 percent of the distribution based on 14.7 cents per ton 150.17beginning with distributions in 2002 new text begin for distributions in 2007, 11.7 cents per ton for new text end 150.18 new text begin distributions in 2008, 8.7 cents per ton for distributions in 2009, 5.7 cents per ton for new text end 150.19 new text begin distributions in 2010, 2.7 cents per ton for distributions in 2011, and 1 cent per ton for new text end 150.20 new text begin distributions in 2012 new text end . 150.21     new text begin Subd. 4. new text end new text begin Repayment required. new text end If a producer uses money from the fund to procure 150.22haulage trucks, mobile equipment, or mining shovels, and the producer removes the piece 150.23of equipment from the taconite tax relief area defined in section 273.134 within ten years 150.24from the date of receipt of the money from the fund, a portion of the money granted 150.25from the fund must be repaid to the taconite economic development fund. The portion 150.26of the money to be repaid is 100 percent of the grant if the equipment is removed from 150.27the taconite tax relief area within 12 months after receipt of the money from the fund, 150.28declining by ten percent for each of the subsequent nine years during which the equipment 150.29remains within the taconite tax relief area. 150.30     new text begin Subd. 5. new text end new text begin Sale of facility. new text end If a taconite production facility is sold after operations at 150.31the facility had ceased, any money remaining in the fund for the former producer may be 150.32released to the purchaser of the facility on the terms otherwise applicable to the former 150.33producer under this section. 150.34     new text begin Subd. 6. new text end new text begin Other distributions. new text end If a producer fails to provide matching funds for 150.35a proposed expenditure within six months after the commissioner approves release of 150.36the funds, the funds are available for release to another producer in proportion to the 151.1distribution provided and under the conditions of this section. Any portion of the fund 151.2which is not released by the commissioner within two years of its deposit in the fund shall 151.3be divided between the taconite environmental protection fund created in section 298.223 151.4and the Douglas J. Johnson economic protection trust fund created in section 298.292 for 151.5placement in their respective special accounts. Two-thirds of the unreleased funds shall be 151.6distributed to the taconite environmental protection fund and one-third to the Douglas J. 151.7Johnson economic protection trust fund. 151.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for distributions in 2008 and new text end 151.9 new text begin thereafter. new text end 151.10    Sec. 6. Minnesota Statutes 2006, section 298.24, subdivision 1, is amended to read: 151.11    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002, 151.12and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and 151.13quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon 151.14the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore 151.15concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the 151.16same rate imposed for concentrates produced in 2004. 151.17    (b) For concentrates produced in 2006 and subsequent years, the tax rate shall be 151.18equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate 151.19multiplied by the percentage increase in the implicit price deflator from the fourth quarter 151.20of the second preceding year to the fourth quarter of the preceding year. "Implicit price 151.21deflator" means the implicit price deflator for the gross domestic product prepared by the 151.22Bureau of Economic Analysis of the United States Department of Commerce. 151.23    (c) On concentrates produced in 1997 and thereafter, an additional tax is imposed 151.24equal to three cents per gross ton of merchantable iron ore concentrate for each one 151.25percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees 151.26Fahrenheit. 151.27    (d) The tax shall be imposed on the average of the production for the current year 151.28and the previous two years. The rate of the tax imposed will be the current year's tax rate. 151.29This clause shall not apply in the case of the closing of a taconite facility if the property 151.30taxes on the facility would be higher if this clause and section 298.25 were not applicable. 151.31    (e) If the tax or any part of the tax imposed by this subdivision is held to be 151.32unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate 151.33produced shall be imposed. 151.34    (f) Consistent with the intent of this subdivision to impose a tax based upon the 151.35weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 152.1determine the weight of merchantable iron ore concentrate included in fluxed pellets by 152.2subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 152.3flux additives included in the pellets from the weight of the pellets. For purposes of this 152.4paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 152.5olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 152.6No subtraction from the weight of the pellets shall be allowed for binders, mineral and 152.7chemical additives other than basic flux additives, or moisture. 152.8    (g)(1) Notwithstanding any other provision of this subdivision, for the first two years 152.9of a plant's commercial production of direct reduced ore, no tax is imposed under this 152.10section. As used in this paragraph, "commercial production" is production of more than 152.1150,000 tons of direct reduced ore in the current year or in any prior year, "noncommercial 152.12production" is production of 50,000 tons or less of direct reduced ore in any year, and 152.13"direct reduced ore" is ore that results in a product that has an iron content of at least 75 152.14percent. For the third year of a plant's commercial production of direct reduced ore, the 152.15rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined 152.16under this subdivision. For the fourth commercial production year, the rate is 50 percent of 152.17the rate otherwise determined under this subdivision; for the fifth commercial production 152.18year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for 152.19all subsequent commercial production years, the full rate is imposed. 152.20    (2) Subject to clause (1), production of direct reduced ore in this state is subject to 152.21the tax imposed by this section, but if that production is not produced by a producer 152.22of taconite or iron sulfides, the production of taconite or iron sulfides consumed in the 152.23production of direct reduced iron in this state is not subject to the tax imposed by this 152.24section on taconite or iron sulfides. 152.25    (3) Notwithstanding any other provision of this subdivision, no tax is imposed 152.26on direct reduced ore under this section during the facility's noncommercial production 152.27of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 152.28production of direct reduced ore is subject to the tax imposed by this section on taconite 152.29and iron sulphides. Three-year average production of direct reduced ore does not 152.30include production of direct reduced ore in any noncommercial year. Three-year average 152.31production for a direct reduced ore facility that has noncommercial production is the 152.32average of the commercial production of direct reduced ore for the current year and the 152.33previous two commercial years. 152.34     new text begin (4) This paragraph applies only to plants for which all environmental permits have new text end 152.35 new text begin been obtained and construction has begun before July 1, 2008. new text end 153.1    Sec. 7. Minnesota Statutes 2006, section 298.25, is amended to read: 153.2298.25 TAXES ADDITIONAL TO OCCUPATION TAX; IN LIEU OF OTHER 153.3TAXES. 153.4    The taxes imposed under section 298.24 shall be in addition to the occupation tax 153.5imposed upon the business of mining and producing iron ore. Except as herein otherwise 153.6provided, such taxes shall be in lieu of all other taxes upon such taconite, iron sulphides, 153.7and direct reduced ore or the lands in which they are contained, or upon the mining or 153.8quarrying thereof, or the production of concentrate or direct reduced ore therefrom, or 153.9upon the concentrate or direct reduced ore produced, or upon the machinery, equipment, 153.10tools, supplies and buildings used in such mining, quarrying or production, or upon the 153.11lands occupied by, or used in connection with, such mining, quarrying or production 153.12facilities. If electric or steam power for the mining, transportation or concentration of 153.13such taconite, concentrates or direct reduced ore produced therefrom is generated in 153.14plants principally devoted to the generation of power for such purposes, the plants in 153.15which such power is generated and all machinery, equipment, tools, supplies, transmission 153.16and distribution lines used in the generation and distribution of such power, shall new text begin not new text end be 153.17considered to be machinery, equipment, tools, supplies and buildings used in the mining, 153.18quarrying, or production of taconite, taconite concentrates or direct reduced ore within 153.19the meaning of this section new text begin , and shall be subject to general property taxation new text end . If part 153.20of the power generated in such a plant is used for purposes other than the mining or 153.21concentration of taconite or direct reduced ore or the transportation or loading of taconite, 153.22the concentrates thereof or direct reduced ore, a proportionate share of the value of such 153.23generating facilities, equal to the proportion that the power used for such other purpose 153.24bears to the generating capacity of the plant, shall be subject to the general property tax 153.25in the same manner as other property; provided, power generated in such a plant and 153.26exchanged for an equivalent amount of power which is used for the mining, transportation, 153.27or concentration of such taconite, concentrates or direct reduced ore produced therefrom, 153.28shall be considered as used for such purposes within the meaning of this section. Nothing 153.29herein shall prevent the assessment and taxation of the surface of reserve land containing 153.30taconite and not occupied by such facilities or used in connection therewith at the value 153.31thereof without regard to the taconite or iron sulphides therein, nor the assessment and 153.32taxation of merchantable iron ore or other minerals, or iron-bearing materials other than 153.33taconite or iron sulphides in such lands in the manner provided by law, nor the assessment 153.34and taxation of facilities used in producing sulphur or sulphur products from iron sulphide 153.35concentrates, or in refining such sulphur products, under the general property tax laws. 153.36Nothing herein shall except from general taxation or from taxation as provided by other 154.1laws any property used for residential or townsite purposes, including utility services 154.2thereto. new text begin This section does not provide an exemption from general property taxation for ore new text end 154.3 new text begin docks even if located at the site of a taconite production facility. new text end 154.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2007, payable new text end 154.5 new text begin in 2008, and thereafter. new text end 154.6    Sec. 8. Minnesota Statutes 2006, section 298.28, subdivision 3, is amended to read: 154.7    Subd. 3. Cities; towns. (a) 12.5 cents per taxable ton, less any amount distributed 154.8under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid 154.9account to be distributed as provided in section 298.282. 154.10    (b) An amount must be allocated to towns or cities that is annually certified by 154.11the county auditor of a county containing a taconite tax relief area as defined in section 154.12273.134, paragraph (b) , within which there is (1) an organized township if, as of January 154.132, 1982, more than 75 percent of the assessed valuation of the township consists of iron 154.14ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation 154.15of the city consists of iron ore. 154.16    (c) The amount allocated under paragraph (b) will be the portion of a township's or 154.17city's certified levy equal to the proportion of (1) the difference between 50 percent of 154.18January 2, 1982, assessed value in the case of a township and 50 percent of the January 2, 154.191980, assessed value in the case of a city and its current assessed value to (2) the sum of 154.20its current assessed value plus the difference determined in (1), provided that the amount 154.21distributed shall not exceed $55 per capita in the case of a township or $75 per capita in 154.22the case of a city. For purposes of this limitation, population will be determined according 154.23to the 1980 decennial census conducted by the United States Bureau of the Census. If the 154.24current assessed value of the township exceeds 50 percent of the township's January 2, 154.251982, assessed value, or if the current assessed value of the city exceeds 50 percent of the 154.26city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this 154.27paragraph, "assessed value," when used in reference to years other than 1980 or 1982, 154.28means the appropriate net tax capacities multiplied by 10.2. 154.29     new text begin (d) In addition to other distributions under this subdivision, 3 cents per taxable ton new text end 154.30 new text begin must be allocated for distribution to towns that are entirely located within the taconite tax new text end 154.31 new text begin relief area defined in section 273.134, paragraph (b). The amount available under this new text end 154.32 new text begin paragraph will be distributed to eligible towns on a per capita basis. new text end 154.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for distributions in 2008 and new text end 154.34 new text begin thereafter. new text end 155.1    Sec. 9. Minnesota Statutes 2006, section 298.28, subdivision 4, is amended to read: 155.2    Subd. 4. School districts. (a) cents per taxable ton new text begin , new text end plus the increase 155.3provided in paragraph (d) must be allocated to qualifying school districts to be distributed, 155.4based upon the certification of the commissioner of revenue, under paragraphs (b) and (c), 155.5except as otherwise provided in paragraph (f). 155.6    (b) new text begin (i) new text end 3.43 cents per taxable ton must be distributed to the school districts in which 155.7the lands from which taconite was mined or quarried were located or within which the 155.8concentrate was produced. The distribution must be based on the apportionment formula 155.9prescribed in subdivision 2. 155.10     new text begin (ii) Three cents per taxable ton from each taconite facility must be distributed to new text end 155.11 new text begin each affected school district for deposit in a fund dedicated to building maintenance new text end 155.12 new text begin and repairs, as follows: new text end 155.13     new text begin (1) proceeds from Keewatin Taconite or its successor are distributed to Independent new text end 155.14 new text begin School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor new text end 155.15 new text begin districts; new text end 155.16     new text begin (2) proceeds from the Hibbing Taconite Company or its successor are distributed to new text end 155.17 new text begin Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor new text end 155.18 new text begin districts; new text end 155.19     new text begin (3) proceeds from the Mittal Steel Company and Minntac or their successors are new text end 155.20 new text begin distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia, new text end 155.21 new text begin 2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts; new text end 155.22     new text begin (4) proceeds from the Northshore Mining Company or its successor are distributed new text end 155.23 new text begin to Independent School Districts Nos. 2142, St. Louis County, and 318, Lake Superior, new text end 155.24 new text begin or their successor districts; and new text end 155.25     new text begin (5) proceeds from United Taconite or its successor are distributed to Independent new text end 155.26 new text begin School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their new text end 155.27 new text begin successor districts. new text end 155.28    (c)(i) new text begin 16.22 new text end cents per taxable ton, less any amount distributed under paragraph 155.29(e), shall be distributed to a group of school districts comprised of those school districts 155.30which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is 155.31a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion 155.32to school district indexes as follows: for each school district, its pupil units determined 155.33under section 126C.05 for the prior school year shall be multiplied by the ratio of the 155.34average adjusted net tax capacity per pupil unit for school districts receiving aid under 155.35this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 155.36ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 156.1Each district shall receive that portion of the distribution which its index bears to the sum 156.2of the indices for all school districts that receive the distributions. 156.3    (ii) Notwithstanding clause (i), each school district that receives a distribution 156.4under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this 156.5clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on 156.6severed mineral values after reduction for any portion distributed to cities and towns under 156.7section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy 156.8reduction under section 126C.48, subdivision 8, for the second year prior to the year of the 156.9distribution shall receive a distribution equal to the difference; the amount necessary to 156.10make this payment shall be derived from proportionate reductions in the initial distribution 156.11to other school districts under clause (i). 156.12    (d) Any school district described in paragraph (c) where a levy increase pursuant to 156.13section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001, 156.14shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the 156.15pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous 156.16year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent 156.17times the district's taxable net tax capacity in the second previous year. 156.18    If the total amount provided by paragraph (d) is insufficient to make the payments 156.19herein required then the entitlement of $175 per pupil unit shall be reduced uniformly 156.20so as not to exceed the funds available. Any amounts received by a qualifying school 156.21district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general 156.22education aid which the district receives pursuant to section 126C.13 or the permissible 156.23levies of the district. Any amount remaining after the payments provided in this paragraph 156.24shall be paid to the commissioner of Iron Range resources and rehabilitation who shall 156.25deposit the same in the taconite environmental protection fund and the Douglas J. Johnson 156.26economic protection trust fund as provided in subdivision 11. 156.27    Each district receiving money according to this paragraph shall reserve the lesser of 156.28the amount received under this paragraph or $25 times the number of pupil units served 156.29in the district. It may use the money for early childhood programs or for outcome-based 156.30learning programs that enhance the academic quality of the district's curriculum. The 156.31outcome-based learning programs must be approved by the commissioner of education. 156.32    (e) There shall be distributed to any school district the amount which the school 156.33district was entitled to receive under section 298.32 in 1975. 156.34    (f) Effective for the distribution in 2003 only, five percent of the distributions to 156.35school districts under paragraphs (b), (c), and (e); subdivision 6, paragraph (c); subdivision 156.3611; and section 298.225, shall be distributed to the general fund. The remainder less any 157.1portion distributed to cities and towns under section 126C.48, subdivision 8, paragraph 157.2(5), shall be distributed to the Douglas J. Johnson economic protection trust fund created 157.3in section 298.292. Fifty percent of the amount distributed to the Douglas J. Johnson 157.4economic protection trust fund shall be made available for expenditure under section 157.5298.293 as governed by section 298.296. Effective in 2003 only, 100 percent of the 157.6distributions to school districts under section 477A.15 less any portion distributed to 157.7cities and towns under section 126C.48, subdivision 8, paragraph (5), shall be distributed 157.8to the general fund. 157.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for distributions in 2008 and new text end 157.10 new text begin thereafter. new text end 157.11    Sec. 10. Minnesota Statutes 2006, section 298.28, subdivision 5, is amended to read: 157.12    Subd. 5. Counties. (a) 26.05 cents per taxable ton is allocated to counties to be 157.13distributed, based upon certification by the commissioner of revenue, under paragraphs 157.14(b) to (d) new text begin (c) new text end . 157.15    (b) new text begin 15.525 new text end cents per taxable ton shall be distributed to the county in which 157.16the taconite is mined or quarried or in which the concentrate is produced, less any 157.17amount which is to be distributed pursuant to paragraph (c). The apportionment formula 157.18prescribed in subdivision 2 is the basis for the distribution. 157.19    (c) If an electric power plant owned by and providing the primary source of power 157.20for a taxpayer mining and concentrating taconite is located in a county other than the 157.21county in which the mining and the concentrating processes are conducted, one cent per 157.22taxable ton of the tax distributed to the counties pursuant to paragraph (b) and imposed 157.23on and collected from such taxpayer shall be paid to the county in which the power plant 157.24is located. 157.25    (d) 5.525 new text begin 10.525 new text end cents per taxable ton shall be paid to the county from which the 157.26taconite was mined, quarried or concentrated to be deposited in the county road and 157.27bridge fund. If the mining, quarrying and concentrating, or separate steps in any of those 157.28processes are carried on in more than one county, the commissioner shall follow the 157.29apportionment formula prescribed in subdivision 2. 157.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for distributions in 2008 and new text end 157.31 new text begin thereafter. new text end 157.32    Sec. 11. Minnesota Statutes 2006, section 298.28, subdivision 6, is amended to read: 158.1    Subd. 6. Property tax relief. (a) In 2002 new text begin 2008 new text end and thereafter, cents per 158.2taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or 158.3section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the 158.4counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136. 158.5    (b) If an electric power plant owned by and providing the primary source of power 158.6for a taxpayer mining and concentrating taconite is located in a county other than the 158.7county in which the mining and the concentrating processes are conducted, .1875 cent per 158.8taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county. 158.9    (c) If an electric power plant owned by and providing the primary source of power 158.10for a taxpayer mining and concentrating taconite is located in a school district other than 158.11a school district in which the mining and concentrating processes are conducted, .4541 158.12cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to 158.13the school district. 158.14    Sec. 12. Minnesota Statutes 2006, section 298.28, subdivision 9a, is amended to read: 158.15    Subd. 9a. Taconite economic development fund. (a) 30.1 cents per ton for 158.16distributions in 2002 and thereafter new text begin For distributions in 2007 to 2012, the amount provided new text end 158.17 new text begin in this subdivision new text end must be paid to the taconite economic development fund. new text begin The amount new text end 158.18 new text begin of the distributions is at the following amounts per ton: new text end 158.19     new text begin (1) for distribution in 2007, 30.1 cents; new text end 158.20     new text begin (2) for distribution in 2008, 25.1 cents; new text end 158.21     new text begin (3) for distribution in 2009, 20.1 cents; new text end 158.22     new text begin (4) for distribution in 2010, 15.1 cents; new text end 158.23     new text begin (5) for distribution in 2011, 10.1 cents; and new text end 158.24     new text begin (6) for distribution in 2012, 5.1 cents. new text end 158.25    No distribution shall be made under this paragraph in 2004 or any subsequent year 158.26in which total industry production falls below 30 million tons. Distribution shall only be 158.27made to a taconite producer's fund under section 298.227 if the producer timely pays its 158.28tax under section 298.24 by the dates provided under section 298.27, or pursuant to the 158.29due dates provided by an administrative agreement with the commissioner. 158.30    (b) An amount equal to 50 percent of the tax under section 298.24 for concentrate 158.31sold in the form of pellet chips and fines not exceeding 5/16 inch in size and not including 158.32crushed pellets shall be paid to the taconite economic development fund. The amount 158.33paid shall not exceed $700,000 annually for all companies. If the initial amount to be 158.34paid to the fund exceeds this amount, each company's payment shall be prorated so the 158.35total does not exceed $700,000. 159.1     new text begin (c) No distributions will be made under this subdivision after 2012. Any amount new text end 159.2 new text begin remaining in this fund on January 1, 2013, shall be distributed, two-thirds to the new text end 159.3 new text begin environmental protection fund and one-third to the Douglas J. Johnson economic new text end 159.4 new text begin protection trust fund. new text end 159.5    Sec. 13. Minnesota Statutes 2006, section 298.28, is amended by adding a subdivision 159.6to read: 159.7     new text begin Subd. 9d. new text end new text begin Iron Range higher education account. new text end new text begin Two cents per taxable ton must new text end 159.8 new text begin be allocated to the Iron Range Resources and Rehabilitation Board to be deposited in new text end 159.9 new text begin an Iron Range higher education account that is hereby created, to be used for higher new text end 159.10 new text begin education programs, including apprenticeship and training programs certified by the new text end 159.11 new text begin Minnesota Department of Labor and Industry, conducted at educational institutions and new text end 159.12 new text begin apprenticeship and training facilities located in the taconite assistance area defined in new text end 159.13 new text begin section 273.1341. The Iron Range Higher Education committee under section 298.2214 new text end 159.14 new text begin and the Iron Range Resources and Rehabilitation Board must approve all expenditures new text end 159.15 new text begin from the account. new text end 159.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for production in 2008, distributions new text end 159.17 new text begin in 2009, and thereafter. new text end 159.18    Sec. 14. Minnesota Statutes 2006, section 298.292, subdivision 2, is amended to read: 159.19    Subd. 2. Use of money. Money in the Douglas J. Johnson economic protection trust 159.20fund may be used for the following purposes: 159.21    (1) to provide loans, loan guarantees, interest buy-downs and other forms of 159.22participation with private sources of financing, but a loan to a private enterprise shall be 159.23for a principal amount not to exceed one-half of the cost of the project for which financing 159.24is sought, and the rate of interest on a loan to a private enterprise shall be no less than the 159.25lesser of eight percent or an interest rate three percentage points less than a full faith 159.26and credit obligation of the United States government of comparable maturity, at the 159.27time that the loan is approved; 159.28    (2) to fund reserve accounts established to secure the payment when due of the 159.29principal of and interest on bonds issued pursuant to section 298.2211; 159.30    (3) to pay in periodic payments or in a lump sum payment any or all of the interest 159.31on bonds issued pursuant to chapter 474 for the purpose of constructing, converting, 159.32or retrofitting heating facilities in connection with district heating systems or systems 159.33utilizing alternative energy sources; and 160.1    (4) to invest in a venture capital fund or enterprise that will provide capital to other 160.2entities that are engaging in, or that will engage in, projects or programs that have the 160.3purposes set forth in subdivision 1. No investments may be made in a venture capital fund 160.4or enterprise unless at least two other unrelated investors make investments of at least 160.5$500,000 in the venture capital fund or enterprise, and the investment by the Douglas 160.6J. Johnson economic protection trust fund may not exceed the amount of the largest 160.7investment by an unrelated investor in the venture capital fund or enterprise. For purposes 160.8of this subdivision, an "unrelated investor" is a person or entity that is not related to 160.9the entity in which the investment is made or to any individual who owns more than 40 160.10percent of the value of the entity, in any of the following relationships: spouse, parent, 160.11child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of 160.12the value of all interests in it. For purposes of determining the limitations under this 160.13clause, the amount of investments made by an investor other than the Douglas J. Johnson 160.14economic protection trust fund is the sum of all investments made in the venture capital 160.15fund or enterprise during the period beginning one year before the date of the investment 160.16by the Douglas J. Johnson economic protection trust fund new text begin ; and new text end 160.17     new text begin (5) to purchase forest land in the taconite assistance area defined in section 273.1341 new text end 160.18 new text begin to be held and managed as a public trust for the benefit of the area for the purposes new text end 160.19 new text begin authorized in section 298.22, subdivision 5a new text end . 160.20    Money from the trust fund shall be expended only in or for the benefit of the taconite 160.21assistance area defined in section 273.1341. 160.22    Sec. 15. Minnesota Statutes 2006, section 298.296, subdivision 2, is amended to read: 160.23    Subd. 2. Expenditure of funds. (a) Before January 1, 2028, funds may be expended 160.24on projects and for administration of the trust fund only from the net interest, earnings, 160.25and dividends arising from the investment of the trust at any time, including net interest, 160.26earnings, and dividends that have arisen prior to July 13, 1982, plus $10,000,000 made 160.27available for use in fiscal year 1983, except that any amount required to be paid out of the 160.28trust fund to provide the property tax relief specified in Laws 1977, chapter 423, article 160.29X, section 4, and to make school bond payments and payments to recipients of taconite 160.30production tax proceeds pursuant to section 298.225, may be taken from the corpus of 160.31the trust. 160.32    (b) Additionally, upon recommendation by the board, up to $13,000,000 from the 160.33corpus of the trust may be made available for use as provided in subdivision 4, and up to 160.34$10,000,000 from the corpus of the trust may be made available for use as provided in 160.35section 298.2961. 161.1    (c) Additionally, an amount equal to 20 percent of the value of the corpus of the trust 161.2on May 18, 2002, not including the funds authorized in paragraph (b), plus the amounts 161.3made available under section 298.28, subdivision 4, and Laws 2002, chapter 377, article 161.48, section 17, may be expended on projects. Funds may be expended for projects under 161.5this paragraph only if the project: 161.6    (1) is for the purposes established under section 298.292, subdivision 1, clause 161.7(1) or (2); and 161.8    (2) is approved by the board upon an affirmative vote of at least ten of its members. 161.9No money made available under this paragraph or paragraph (d) can be used for 161.10administrative or operating expenses of the Iron Range Resources and Rehabilitation 161.11Board or expenses relating to any facilities owned or operated by the board on May 18, 161.122002. 161.13    (d) Upon recommendation by a unanimous vote of all members of the board, 161.14amounts in addition to those authorized under paragraphs (a), (b), and (c) may be 161.15expended on projects described in section 298.292, subdivision 1. 161.16    (e) Annual administrative costs, not including detailed engineering expenses for the 161.17projects, shall not exceed five percent of the net interest, dividends, and earnings arising 161.18from the trust in the preceding fiscal year. 161.19    (f) Principal and interest received in repayment of loans made pursuant to this 161.20section, and earnings on other investments made under section 298.292, subdivision 2, 161.21clause (4), shall be deposited in the state treasury and credited to the trust. These receipts 161.22are appropriated to the board for the purposes of sections 298.291 to 298.298. 161.23     new text begin (g) Additionally, notwithstanding section 298.293, upon affirmative vote of a new text end 161.24 new text begin majority of the members of the board, money from the corpus of the trust may be expanded new text end 161.25 new text begin to purchase forest lands within the taconite assistance area as provided in sections 298.22, new text end 161.26 new text begin subdivision 5a, and 298.292, subdivision 2, clause (5). new text end 161.27    Sec. 16. Minnesota Statutes 2006, section 298.2961, subdivision 4, is amended to read: 161.28    Subd. 4. Grant and loan fund. (a) A fund is established to receive distributions 161.29under section 298.28, subdivision 9b, and to make grants or loans as provided in this 161.30subdivision. Any grant or loan made under this subdivision must be approved by 161.31a majority of the members of the Iron Range Resources and Rehabilitation Board, 161.32established under section 298.22. 161.33    (b) Distributions received in calendar year 2005 are allocated to the city of Virginia 161.34for improvements and repairs to the city's steam heating system. 162.1    (c) Distributions received in calendar year 2006 are allocated to a project of the 162.2public utilities commissions of the cities of Hibbing and Virginia to convert their electrical 162.3generating plants to the use of biomass products, such as wood. 162.4    (d) Distributions received in calendar year 2007 must be paid to the city of Tower to 162.5be used for the East Two Rivers project in or near the city of Tower. 162.6    (e) For distributions received in 2008, the first $2,000,000 of the 2008 distribution 162.7must be paid to St. Louis County for deposit in its county road and bridge fund to be used 162.8for relocation of St. Louis County Road 715, commonly referred to as Pike River Road. 162.9The remainder of the 2008 distribution and the full new text begin must be paid to St. Louis County for a new text end 162.10 new text begin grant to the City of Virginia for connecting sewer and water lines to the St. Louis County new text end 162.11 new text begin maintenance garage on Highway 135, further extending the lines to interconnect with the new text end 162.12 new text begin city of Gilbert's sewer and water lines. The total new text end amount of the distributions in 2009 and 162.13subsequent years is allocated for projects under section 298.223, subdivision 1. 162.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 162.15    Sec. 17. Minnesota Statutes 2006, section 298.2961, subdivision 5, is amended to read: 162.16    Subd. 5. Public works and local economic development fund. For distributions in 162.172007 only, a special fund is established to receive 38.4 cents per ton that otherwise would 162.18be allocated under section 298.28, subdivision 6. The following amounts are allocated to 162.19St. Louis County acting as the fiscal agent for the recipients for the specific purposes: 162.20    (1) 13.4 cents per ton for the Central Iron Range Sanitary Sewer District for 162.21construction of a combined wastewater facility new text begin and notwithstanding section 298.28, new text end 162.22 new text begin subdivision 11, paragraph (a), or any other law, interest accrued on this money while held new text end 162.23 new text begin by St. Louis County shall also be distributed to the recipient new text end ; 162.24    (2) six cents per ton to the city of Eveleth to redesign and design and construct 162.25improvements to renovate its water treatment facility; 162.26    (3) one cent per ton for the East Range Joint Powers Board to acquire land for and to 162.27design a central wastewater collection and treatment system; 162.28    (4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road; 162.29    (5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South; 162.30    (6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road; 162.31    (7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and 162.32Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment 162.33and Economic Development; 162.34    (8) 0.4 cents per ton to the city of Keewatin for a new city well; 163.1    (9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous 163.2materials center; 163.3    (10) 0.9 cents per ton to Aitkin County Growth for an economic development 163.4project for peat harvesting; 163.5    (11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan; 163.6    (12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive 163.7plan; 163.8    (13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure; 163.9    (14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake 163.10Environmental Learning Center; 163.11    (15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center; 163.12    (16) 0.5 cents per ton to the Economic Development Authority of the city of Grand 163.13Rapids for planning for the North Central Research and Technology Laboratory; 163.14    (17) 0.6 cents per ton to the city of Bovey for sewer and water extension; 163.15    (18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and 163.16    (19) ten cents per ton to an economic development authority in a city through which 163.17State Highway 1 passes, or a city in Independent School District No. 2142 that has an 163.18active mine, new text begin the commissioner of Iron Range Resources and Rehabilitation for deposit new text end 163.19 new text begin in a Highway 1 Corridor Account established by the commissioner, to be distributed by new text end 163.20 new text begin the commissioner to any of the cities of Babbitt, Cook, Ely, or Tower, new text end for an economic 163.21development project new text begin projects new text end approved by the Iron Range Resources and Rehabilitation 163.22Board new text begin ; notwithstanding section 298.28, subdivision 11, paragraph (a), or any other law, new text end 163.23 new text begin interest accrued on this money while held by St. Louis County or the commissioner new text end 163.24 new text begin shall also be distributed to the recipient new text end . 163.25    Sec. 18. Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read: 163.26    Subdivision 1. Definitions. Except as may otherwise be provided, the following 163.27words, when used in this section, shall have the meanings herein ascribed to them. 163.28    (1) new text begin (a) new text end "Aggregate material" shall mean new text begin means: new text end 163.29     new text begin (1) new text end nonmetallic natural mineral aggregate including, but not limited to sand, silica 163.30sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is 163.31transported on a public road, street, or highway. new text begin , provided that nonmetallic new text end aggregate 163.32material shall new text begin does new text end not include dimension stone and dimension granite new text begin ; and new text end 163.33     new text begin (2) taconite tailings, crushed rock, and architectural or dimension stone and new text end 163.34 new text begin dimension granite removed from a taconite mine or the site of a previously operated new text end 163.35 new text begin taconite mine new text end . 164.1    Aggregate material must be measured or weighed after it has been extracted from 164.2the pit, quarry, or deposit. 164.3    (2) new text begin (b) new text end "Person" shall mean new text begin means new text end any individual, firm, partnership, corporation, 164.4organization, trustee, association, or other entity. 164.5    (3) new text begin (c) new text end "Operator" shall mean new text begin means new text end any person engaged in the business of removing 164.6aggregate material from the surface or subsurface of the soil, for the purpose of sale, 164.7either directly or indirectly, through the use of the aggregate material in a marketable 164.8product or service. 164.9    (4) new text begin (d) new text end "Extraction site" shall mean new text begin means new text end a pit, quarry, or deposit containing 164.10aggregate material and any contiguous property to the pit, quarry, or deposit which is used 164.11by the operator for stockpiling the aggregate material. 164.12    (5) new text begin (e) new text end "Importer" shall mean new text begin means new text end any person who buys aggregate material 164.13produced from a county not listed in paragraph (6) new text begin (f) new text end or another state and causes the 164.14aggregate material to be imported into a county in this state which imposes a tax on 164.15aggregate material. 164.16    (6) new text begin (f) new text end "County" shall mean new text begin means new text end the counties of Pope, Stearns, Benton, Sherburne, 164.17Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman, 164.18Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley, 164.19Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose 164.20board has voted after a public hearing to impose the tax under this section and has notified 164.21the commissioner of revenue of the imposition of the tax. 164.22    (7) new text begin (g) new text end "Borrow" shall mean new text begin means new text end granular borrow, consisting of durable particles 164.23of gravel and sand, crushed quarry or mine rock, crushed gravel or stone, or any 164.24combination thereof, the ratio of the portion passing the (#200) sieve divided by the 164.25portion passing the (1 inch) sieve may not exceed 20 percent by mass. 164.26    Sec. 19. Minnesota Statutes 2006, section 298.75, subdivision 3, is amended to read: 164.27    Subd. 3. Report and remittance. new text begin (a) new text end By the 14th day following the last day of each 164.28calendar quarter, every operator or importer shall make and file with the county auditor of 164.29the county in which the aggregate material is removed or imported, a correct report under 164.30oath, in such form and containing such information as the auditor shall require relative to 164.31the quantity of aggregate material removed or imported during the preceding calendar 164.32quarter. The report shall be accompanied by a remittance of the amount of tax due. 164.33     new text begin (b) new text end If any of the proceeds of the tax is to be apportioned as provided in subdivision 164.342, the operator or importer shall also include on the report any relevant information 164.35concerning the amount of aggregate material transported, the tax and the county of 165.1destination. The county auditor shall notify the county treasurer of the amount of such 165.2tax and the county to which it is due. The county treasurer shall remit the tax to the 165.3appropriate county within 30 days new text begin , except as provided in paragraph (c) new text end . 165.4     new text begin (c) The proceeds of the tax on aggregate material as defined in subdivision 1, new text end 165.5 new text begin paragraph (a), clause (2), must be remitted to the commissioner of iron range resources new text end 165.6 new text begin and rehabilitation to be deposited in the taconite area environmental protection fund under new text end 165.7 new text begin section 298.223, and used for the purposes of that fund. new text end 165.8    Sec. 20. Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read: 165.9    Subd. 7. Proceeds of taxes. All money collected as taxes under this section new text begin on new text end 165.10 new text begin aggregate material as defined in subdivision 1, paragraph (a), clause (1), new text end shall be deposited 165.11in the county treasury and credited as follows, for expenditure by the county board: 165.12    (a) Sixty percent to the county road and bridge fund for expenditure for the 165.13maintenance, construction and reconstruction of roads, highways and bridges; 165.14    (b) Thirty percent to the road and bridge fund of those towns as determined by the 165.15county board and to the general fund or other designated fund of those cities as determined 165.16by the county board, to be expended for maintenance, construction and reconstruction of 165.17roads, highways and bridges; and 165.18    (c) Ten percent to a special reserve fund which is hereby established, for expenditure 165.19for the restoration of abandoned pits, quarries, or deposits located upon public and tax 165.20forfeited lands within the county. 165.21    If there are no abandoned pits, quarries or deposits located upon public or tax 165.22forfeited lands within the county, this portion of the tax shall be deposited in the county 165.23road and bridge fund for expenditure for the maintenance, construction and reconstruction 165.24of roads, highways and bridges. 165.25    Sec. 21. Minnesota Statutes 2006, section 298.75, is amended by adding a subdivision 165.26to read: 165.27     new text begin Subd. 11. new text end new text begin Tax may be imposed; Otter Tail County. new text end new text begin (a) If Otter Tail County new text end 165.28 new text begin does not impose a tax under this section and approves imposition of the tax under this new text end 165.29 new text begin subdivision, the town of Scambler in Otter Tail County may impose the aggregate new text end 165.30 new text begin materials tax under this section. new text end 165.31     new text begin (b) For purposes of exercising the powers contained in this section, the "town" is new text end 165.32 new text begin deemed to be the "county." new text end 166.1     new text begin (c) All provisions in this section apply to the town of Scambler, except that all new text end 166.2 new text begin proceeds of the tax must be retained by the town and used for the purposes described in new text end 166.3 new text begin subdivision 7. new text end 166.4     new text begin (d) If Otter Tail County imposes an aggregate materials tax under this section, the new text end 166.5 new text begin tax imposed by the town of Scambler under this subdivision is repealed on the effective new text end 166.6 new text begin date of the Otter Tail County tax. new text end 166.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after the governing body new text end 166.8 new text begin of the town of Scambler and its chief clerical officer comply with section 645.021, new text end 166.9 new text begin subdivisions 2 and 3. new text end 166.10    Sec. 22. new text begin IRON RANGE RESOURCES AND REHABILITATION BOARD; new text end 166.11 new text begin APPROPRIATION; RETIRE BONDS. new text end 166.12     new text begin Commencing with taxes payable in 2008 there is annually appropriated from new text end 166.13 new text begin the distribution of the taconite production tax revenues to the taconite environmental new text end 166.14 new text begin protection fund under Minnesota Statutes, section 298.28, subdivision 11, and to the new text end 166.15 new text begin Douglas J. Johnson economic protection trust fund under Minnesota Statutes, section new text end 166.16 new text begin 298.28, subdivisions 9 and 11, in equal shares, an amount of $500,000 per year. new text end 166.17     new text begin The revenue received under this section shall be used only to retire Mesabi East new text end 166.18 new text begin School District No. 2711 bonds in the amount of $9,000,000 issued September 1, 2006, new text end 166.19 new text begin and in the amount of $6,250,000 issued March 1, 2007. The payments shall continue for a new text end 166.20 new text begin period of ten years ending with taxes payable in 2017. Payments to the school district new text end 166.21 new text begin shall be made on March 1. new text end 166.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 166.23    Sec. 23. new text begin APPROPRIATIONS; DEPARTMENT OF EDUCATION. new text end 166.24     new text begin Subdivision 1. new text end new text begin Department of Education new text end new text begin The sums indicated in this section are new text end 166.25 new text begin appropriated from the general fund to the Department of Education. These appropriations new text end 166.26 new text begin are added to any appropriations for the same purpose in 2007 H.F. No. 6, if enacted, new text end new text begin for new text end 166.27 new text begin the fiscal years indicated. new text end 166.28     new text begin Subd. 2. new text end new text begin General education aid. new text end new text begin For general education aid under Minnesota new text end 166.29 new text begin Statutes, section 126C.13, subdivision 4: new text end 166.30 new text begin $ new text end new text begin 1,041,000 new text end new text begin ..... new text end new text begin 2009 new text end 166.31     new text begin The 2009 appropriation includes $1,041,000 for fiscal year 2008 and $0 for fiscal new text end 166.32 new text begin year 2009. new text end 167.1    Sec. 24. new text begin REPEALER. new text end 167.2 new text begin Minnesota Statutes 2006, section 126C.21, subdivision 4, new text end new text begin is repealed. new text end 167.3ARTICLE 9 167.4SPECIAL TAXES 167.5    Section 1. new text begin [295.90] HOCKEY HERITAGE SURCHARGE. new text end 167.6     new text begin Subdivision 1. new text end new text begin Imposition. new text end new text begin A surcharge of ten cents is imposed on each ticket or new text end 167.7 new text begin admission to a professional men's hockey game held in the state. new text end 167.8     new text begin Subd. 2. new text end new text begin Collection, remittance. new text end new text begin The surcharge imposed under this subdivision new text end 167.9 new text begin shall be collected by the professional men's hockey team or association sponsoring or new text end 167.10 new text begin holding the hockey game. The team or association shall annually report the surcharge on a new text end 167.11 new text begin form prescribed by the commissioner of revenue and remit the surcharge with the return to new text end 167.12 new text begin the commissioner of revenue by March 15 of the following calendar year. new text end 167.13     new text begin Subd. 3. new text end new text begin Administration. new text end new text begin The commissioner of revenue shall have authority to new text end 167.14 new text begin administer, collect, enforce, refund, and audit the surcharge under this section. Interest new text end 167.15 new text begin on late payments or refunds of the surcharge shall be at the rates specified under section new text end 167.16 new text begin 289A.55, and penalties for failure to file, pay, or underpay the surcharge shall be at the new text end 167.17 new text begin rates provided under section 289A.60, subdivision 1, paragraph (e), and subdivision 2. new text end 167.18     new text begin Subd. 4. new text end new text begin Deposit of revenues. new text end new text begin The commissioner of revenue shall deposit all new text end 167.19 new text begin revenues, including penalty and interest, derived from the surcharge imposed in this new text end 167.20 new text begin section in the hockey surcharge account in the special revenue fund. The amount deposited new text end 167.21 new text begin under this section is appropriated to the Iron Range Resources and Rehabilitation Board new text end 167.22 new text begin for payment to the city of Eveleth to be used for the support of the Hockey Hall of Fame new text end 167.23 new text begin Museum provided that it continues to operate in the city. Payments under this section for new text end 167.24 new text begin the Hockey Hall of Fame Museum are in addition to and must not be used to supplant new text end 167.25 new text begin funding under section 298.28, subdivision 9c. new text end 167.26    Sec. 2. Minnesota Statutes 2006, section 297F.21, subdivision 3, is amended to read: 167.27    Subd. 3. Inventory; judicial determination; appeal; disposition of seized 167.28property. (a) Within ten days after the seizure of any alleged contraband, the person 167.29making the seizure shall serve by certified mail an inventory of the property seized on the 167.30person from whom the seizure was made, if known, and on any person known or believed 167.31to have any right, title, interest, or lien in the property, at the last known address, and file 167.32a copy with the commissioner. The notice must include an explanation of the right to 167.33demand a judicial forfeiture determination. 168.1    (b) Within 60 days after the date of service of the inventory, which is the date of 168.2mailing, the person from whom the property was seized or any person claiming an interest 168.3in the property may file a demand for a judicial determination of the question as to whether 168.4the property was lawfully subject to seizure and forfeiture. The demand must be in the 168.5form of a civil complaint and must be filed with the court administrator in the county in 168.6which the seizure occurred, together with proof of service of a copy of the complaint 168.7on the commissioner of revenue, and the standard filing fee for civil actions unless the 168.8petitioner has the right to sue in forma pauperis under section 563.01. If the value of the 168.9seized property is $7,500 or less, the claimant may file an action in conciliation court for 168.10recovery of the property. If the value of the seized property is less than $500, the claimant 168.11does not have to pay the conciliation court filing fee. 168.12    (c) The complaint must be captioned in the name of the claimant as plaintiff and 168.13the seized property as defendant, and must state with specificity the grounds on which 168.14the claimant alleges the property was improperly seized and the plaintiff's interest in the 168.15property seized. No responsive pleading is required of the commissioner, and no court 168.16fees may be charged for the commissioner's appearance in the matter. The proceedings 168.17are governed by the Rules of Civil Procedure. Notwithstanding any law to the contrary, 168.18an action for the return of property seized under this section may not be maintained by 168.19or on behalf of any person who has been served with an inventory unless the person has 168.20complied with this subdivision. The court shall decide whether the alleged contraband is 168.21contraband, as defined in subdivision 1. The court shall hear the action without a jury and 168.22shall try and determine the issues of fact and law involved. 168.23    (d) When a judgment of forfeiture is entered, the commissioner may, unless the 168.24judgment is stayed pending an appeal, either new text begin the commissioner new text end : 168.25    (1) deliver the forfeited cigarette packages or tobacco products to the commissioner 168.26of human services for use by patients in state institutions new text begin may authorize the forfeited new text end 168.27 new text begin property to be used for the purpose of enforcing a criminal provision of state or federal law new text end ; 168.28    (2) new text begin shall new text end cause the property in clause (1) new text begin forfeited cigarette packages or tobacco new text end 168.29 new text begin products not used under clause (1) new text end to be destroyed; or new text begin and products used under clause (1) new text end 168.30 new text begin to be destroyed upon the completion of use; and new text end 168.31    (3) new text begin may new text end cause the forfeited property new text begin , other than forfeited cigarette packages or new text end 168.32 new text begin tobacco products, new text end to be sold at public auction as provided by law. 168.33The person making a sale, after deducting the expense of keeping the property, the fee 168.34for seizure, and the costs of the sale, shall pay all liens according to their priority, which 168.35are established as being bona fide and as existing without the lienor having any notice 168.36or knowledge that the property was being used or was intended to be used for or in 169.1connection with the violation. The balance of the proceeds must be paid 75 percent to the 169.2Department of Revenue for deposit as a supplement to its operating fund or similar fund 169.3for official use, and 25 percent to the county attorney or other prosecuting agency that 169.4handled the court proceeding, if there is one, for deposit as a supplement to its operating 169.5fund or similar fund for prosecutorial purposes. If there is no prosecuting authority 169.6involved in the forfeiture, the 25 percent of the proceeds otherwise designated for the 169.7prosecuting authority must be deposited into the general fund. 169.8    (e) If no demand for judicial determination is made, the property seized is considered 169.9forfeited to the state by operation of law and may be disposed of by the commissioner as 169.10provided in the case of a judgment of forfeiture. 169.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for forfeitures after June 30, 2007. new text end 169.12    Sec. 3. Minnesota Statutes 2006, section 297I.15, is amended by adding a subdivision 169.13to read: 169.14     new text begin Subd. 11. new text end new text begin Premiums paid to certain foreign insurance companies. new text end new text begin With respect new text end 169.15 new text begin to the state employees group insurance program established under sections 43A.23 to new text end 169.16 new text begin 43A.31, premiums paid for life insurance and accidental death and dismemberment new text end 169.17 new text begin insurance for eligible employees and dependents, including premiums paid by employees new text end 169.18 new text begin or dependents for optional coverage, are exempt from the taxes imposed under this chapter new text end 169.19 new text begin to the extent the premiums are paid to a foreign insurance company domiciled in a state new text end 169.20 new text begin that exempts its state employee group life insurance program from premium taxes. new text end 169.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for premiums paid after December new text end 169.22 new text begin 31, 2006. new text end 169.23    Sec. 4. Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read: 169.24    Subd. 4. Expiration. The authority to impose the tax under this section expires 169.25January 1, 2008 new text begin 2013 new text end . 169.26    Sec. 5. Minnesota Statutes 2006, section 383A.81, subdivision 1, is amended to read: 169.27    Subdivision 1. Creation. An environmental response fund is created for the 169.28purposes specified in this section. The taxes imposed by section 383A.80 must be 169.29deposited in the fund. The board of county commissioners shall administer the fund either 169.30as a county board, new text begin or new text end a housing and redevelopment authority, or a regional rail authority. 169.31    Sec. 6. Minnesota Statutes 2006, section 383A.81, subdivision 2, is amended to read: 170.1    Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the 170.2following purposes: 170.3    (1) acquisition through purchase or condemnation of lands or property which are 170.4polluted or contaminated with hazardous substances; 170.5    (2) paying the costs associated with indemnifying or holding harmless the 170.6entity taking title to lands or property from any liability arising out of the ownership, 170.7remediation, or use of the land or property; 170.8    (3) paying for the costs of remediating the acquired land or property; new text begin or new text end 170.9    (4) paying the costs associated with remediating lands or property which are polluted 170.10or contaminated with hazardous substances; or 170.11    (5) paying for the costs associated with improving the property for economic 170.12development, recreational, housing, transportation or rail traffic. 170.13    Sec. 7. Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read: 170.14    Subd. 4. Expiration. The authority to impose the tax under this section expires 170.15January 1, 2008 new text begin 2013 new text end . 170.16    Sec. 8. new text begin [383C.798] COUNTY DEED AND MORTGAGE TAX. new text end 170.17     new text begin Subdivision 1. new text end new text begin Authority to impose; rate. new text end new text begin (a) The governing body of St. Louis new text end 170.18 new text begin County may impose a mortgage registry and deed tax. new text end 170.19     new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal. new text end 170.20     new text begin (c) The rate of the deed tax equals .0001 of the amount. new text end 170.21     new text begin Subd. 2. new text end new text begin General law provisions apply. new text end new text begin The taxes under this section apply to new text end 170.22 new text begin the same base and must be imposed, collected, administered, and enforced in the same new text end 170.23 new text begin manner as provided under chapter 287 for the state mortgage registry and deed taxes. new text end 170.24 new text begin All the provisions of chapter 287 apply to these taxes, except the rate is as specified in new text end 170.25 new text begin subdivision 1, the term "St. Louis County" must be substituted for "the state," and the new text end 170.26 new text begin revenue must be deposited as provided in subdivision 3. new text end 170.27     new text begin Subd. 3. new text end new text begin Deposit of revenues. new text end new text begin All revenues from the tax are for the use of the new text end 170.28 new text begin St. Louis County Board of Commissioners and must be deposited in the county's new text end 170.29 new text begin environmental response fund under section 383C.799. new text end 170.30     new text begin Subd. 4. new text end new text begin Expiration. new text end new text begin The authority to impose the tax under this section expires new text end 170.31 new text begin January 1, 2013. new text end 170.32    Sec. 9. new text begin [383C.799] ENVIRONMENTAL RESPONSE FUND. new text end 171.1     new text begin Subdivision 1. new text end new text begin Creation. new text end new text begin An environmental response fund is created for the new text end 171.2 new text begin purposes specified in this section. The taxes imposed under section 383C.798 must be new text end 171.3 new text begin deposited in the fund. The Board of County Commissioners shall administer the fund new text end 171.4 new text begin either as a county board or a housing and redevelopment authority. new text end 171.5     new text begin Subd. 2. new text end new text begin Uses of fund. new text end new text begin The fund created in subdivision 1 must be used for the new text end 171.6 new text begin following purposes: new text end 171.7     new text begin (1) acquisition through purchase or condemnation of lands or property which are new text end 171.8 new text begin polluted or contaminated with hazardous substances; new text end 171.9     new text begin (2) paying the costs associated with indemnifying or holding harmless the new text end 171.10 new text begin entity taking title to lands or property from any liability arising out of the ownership, new text end 171.11 new text begin remediation, or use of the land or property; new text end 171.12     new text begin (3) paying for the costs of remediating the acquired land or property; or new text end 171.13     new text begin (4) paying the costs associated with remediating lands or property which are polluted new text end 171.14 new text begin or contaminated with hazardous substances. new text end 171.15     new text begin Subd. 3. new text end new text begin Matching funds. new text end new text begin In expending funds under this section, the county shall new text end 171.16 new text begin seek matching funds from contamination cleanup funds administered by the commissioner new text end 171.17 new text begin of the Department of Employment and Economic Development, the federal government, new text end 171.18 new text begin the private sector, and any other source. new text end 171.19     new text begin Subd. 4. new text end new text begin Bonds. new text end new text begin The county may pledge the proceeds from the taxes imposed by new text end 171.20 new text begin section 383C.798 to bonds issued under this section and chapters 462, 469, and 475. new text end 171.21     new text begin Subd. 5. new text end new text begin Land sales. new text end new text begin Land or property acquired under this section may be resold new text end 171.22 new text begin at fair market value. Proceeds from the sale of the land must be deposited in the new text end 171.23 new text begin environmental response fund. new text end 171.24    Sec. 10. new text begin [383D.75] COUNTY DEED AND MORTGAGE TAX. new text end 171.25     new text begin Subdivision 1. new text end new text begin Authority to impose; rate. new text end new text begin (a) The governing body of Dakota new text end 171.26 new text begin County may impose a mortgage registry and deed tax. new text end 171.27     new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal. new text end 171.28     new text begin (c) The rate of the deed tax equals .0001 of the amount. new text end 171.29     new text begin Subd. 2. new text end new text begin General law provisions apply. new text end new text begin The taxes under this section apply to new text end 171.30 new text begin the same base and must be imposed, collected, administered, and enforced in the same new text end 171.31 new text begin manner as provided under chapter 287 for the state mortgage registry and deed taxes. new text end 171.32 new text begin All the provisions of chapter 287 apply to these taxes, except the rate is as specified in new text end 171.33 new text begin subdivision 1, the term "Dakota County" must be substituted for "the state," and the new text end 171.34 new text begin revenue must be deposited as provided in subdivision 3. new text end 172.1     new text begin Subd. 3. new text end new text begin Deposit of revenues. new text end new text begin All revenues from the tax are for the use of new text end 172.2 new text begin the Dakota County Board of Commissioners and must be deposited in the county's new text end 172.3 new text begin environmental response fund under section new text end new text begin 383D.76. new text end 172.4     new text begin Subd. 4. new text end new text begin Expiration. new text end new text begin The authority to impose the tax under this section expires new text end 172.5 new text begin January 1, 2013. new text end 172.6    Sec. 11. new text begin [383D.76] ENVIRONMENTAL RESPONSE FUND. new text end 172.7     new text begin Subdivision 1. new text end new text begin Creation. new text end new text begin An environmental response fund is created for the new text end 172.8 new text begin purposes specified in this section. The taxes imposed under section 383D.75 must be new text end 172.9 new text begin deposited in the fund. The Board of County Commissioners shall administer the fund new text end 172.10 new text begin either as a county board or a housing and redevelopment authority. new text end 172.11     new text begin Subd. 2. new text end new text begin Uses of fund. new text end new text begin The fund created in subdivision 1 must be used for the new text end 172.12 new text begin following purposes: new text end 172.13     new text begin (1) acquisition through purchase or condemnation of lands or property which are new text end 172.14 new text begin polluted or contaminated with hazardous substances; new text end 172.15     new text begin (2) paying the costs associated with indemnifying or holding harmless the new text end 172.16 new text begin entity taking title to lands or property from any liability arising out of the ownership, new text end 172.17 new text begin remediation, or use of the land or property; new text end 172.18     new text begin (3) paying for the costs of remediating the acquired land or property; or new text end 172.19     new text begin (4) paying the costs associated with remediating lands or property which are polluted new text end 172.20 new text begin or contaminated with hazardous substances. new text end 172.21     new text begin Subd. 3. new text end new text begin Matching funds. new text end new text begin In expending funds under this section, the county shall new text end 172.22 new text begin seek matching funds from contamination cleanup funds administered by the commissioner new text end 172.23 new text begin of the Department of Employment and Economic Development, the Metropolitan Council, new text end 172.24 new text begin the federal government, the private sector, and any other source. new text end 172.25     new text begin Subd. 4. new text end new text begin Bonds. new text end new text begin The county may pledge the proceeds from the taxes imposed by new text end 172.26 new text begin section new text end new text begin to bonds issued under this chapter and chapters 462, 469, and 475. new text end 172.27     new text begin Subd. 5. new text end new text begin Land sales. new text end new text begin Land or property acquired under this section may be resold new text end 172.28 new text begin at fair market value. Proceeds from the sale of the land must be deposited in the new text end 172.29 new text begin environmental response fund. new text end 172.30    Sec. 12. new text begin [383E.235] COUNTY DEED AND MORTGAGE TAX. new text end 172.31     new text begin Subdivision 1. new text end new text begin Authority to impose; rate. new text end new text begin (a) The governing body of Anoka new text end 172.32 new text begin County may impose a mortgage registry and deed tax. new text end 172.33     new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal. new text end 172.34     new text begin (c) The rate of the deed tax equals .0001 of the amount. new text end 173.1     new text begin Subd. 2. new text end new text begin General law provisions apply. new text end new text begin The taxes under this section apply to new text end 173.2 new text begin the same base and must be imposed, collected, administered, and enforced in the same new text end 173.3 new text begin manner as provided under chapter 287 for the state mortgage registry and deed taxes. new text end 173.4 new text begin All the provisions of chapter 287 apply to these taxes, except the rate is as specified new text end 173.5 new text begin in subdivision 1, the term "Anoka County" must be substituted for "the state," and the new text end 173.6 new text begin revenue must be deposited as provided in subdivision 3. new text end 173.7     new text begin Subd. 3. new text end new text begin Deposit of revenues. new text end new text begin All revenues from the tax are for the use of the Anoka new text end 173.8 new text begin County Board of Commissioners and must be deposited in the county's environmental new text end 173.9 new text begin response fund under section 383E.236. new text end 173.10     new text begin Subd. 4. new text end new text begin Expiration. new text end new text begin The authority to impose the tax under this section expires new text end 173.11 new text begin January 1, 2013. new text end 173.12    Sec. 13. new text begin [383E.236] ENVIRONMENTAL RESPONSE FUND. new text end 173.13     new text begin Subdivision 1. new text end new text begin Creation. new text end new text begin An environmental response fund is created for the new text end 173.14 new text begin purposes specified in this section. The taxes imposed under section 383E.235 must be new text end 173.15 new text begin deposited in the fund. The Board of County Commissioners shall administer the fund new text end 173.16 new text begin either as a county board or a housing and redevelopment authority. new text end 173.17     new text begin Subd. 2. new text end new text begin Uses of fund. new text end new text begin The fund created in subdivision 1 must be used for the new text end 173.18 new text begin following purposes: new text end 173.19     new text begin (1) acquisition through purchase or condemnation of lands or property which are new text end 173.20 new text begin polluted or contaminated with hazardous substances; new text end 173.21     new text begin (2) paying the costs associated with indemnifying or holding harmless the new text end 173.22 new text begin entity taking title to lands or property from any liability arising out of the ownership, new text end 173.23 new text begin remediation, or use of the land or property; new text end 173.24     new text begin (3) paying for the costs of remediating the acquired land or property; or new text end 173.25     new text begin (4) paying the costs associated with remediating lands or property which are polluted new text end 173.26 new text begin or contaminated with hazardous substances. new text end 173.27     new text begin Subd. 3. new text end new text begin Matching funds. new text end new text begin In expending funds under this section, the county shall new text end 173.28 new text begin seek matching funds from contamination cleanup funds administered by the commissioner new text end 173.29 new text begin of the Department of Employment and Economic Development, the Metropolitan Council, new text end 173.30 new text begin the federal government, the private sector, and any other source. new text end 173.31     new text begin Subd. 4. new text end new text begin Bonds. new text end new text begin The county may pledge the proceeds from the taxes imposed by new text end 173.32 new text begin section 383E.235 to bonds issued under this section and chapters 462, 469, and 475. new text end 173.33     new text begin Subd. 5. new text end new text begin Land sales. new text end new text begin Land or property acquired under this section may be resold new text end 173.34 new text begin at fair market value. Proceeds from the sale of the land must be deposited in the new text end 173.35 new text begin environmental response fund. new text end 174.1     new text begin Subd. 6. new text end new text begin DOT assistance. new text end new text begin The commissioner of transportation shall collaborate with new text end 174.2 new text begin the county and any affected municipality by providing technical assistance and support in new text end 174.3 new text begin cleaning up a contaminated site related to a trunk highway or railroad improvement. new text end 174.4    Sec. 14. Laws 2003, chapter 128, article 1, section 172, as amended by Laws 2005, 174.5First Special Session chapter 1, article 4, section 118, is amended to read: 174.6    Sec. 172. TEMPORARY PETROFUND FEE EXEMPTION FOR 174.7MINNESOTA COMMERCIAL AIRLINES. 174.8    (a) A commercial airline providing regularly scheduled jet service and with its 174.9corporate headquarters in Minnesota is exempt from the fee established in Minnesota 174.10Statutes, section 115C.08, subdivision 3, until July 1, 2007 new text begin 2009 new text end , provided the airline 174.11develops a plan approved by the commissioner of commerce demonstrating that the 174.12savings from this exemption will go towards minimizing job losses in Minnesota, and to 174.13support the airline's efforts to avoid filing for new text begin resolve new text end federal bankruptcy protections new text begin new text end 174.14 new text begin proceedings new text end . 174.15    (b) A commercial airline exempted from the fee is ineligible to receive 174.16reimbursement under Minnesota Statutes, chapter 115C, until July 1, 2007 new text begin 2009 new text end . A 174.17commercial airline that has a release during the fee exemption period is ineligible to 174.18receive reimbursement under Minnesota Statutes, chapter 115C, for the costs incurred in 174.19response to that release. 174.20ARTICLE 10 174.21DEPARTMENT INCOME AND FRANCHISE TAXES 174.22    Section 1. Minnesota Statutes 2006, section 270A.03, subdivision 5, is amended to 174.23read: 174.24    Subd. 5. Debt. new text begin (a) new text end "Debt" means a legal obligation of a natural person to pay a fixed 174.25and certain amount of money, which equals or exceeds $25 and which is due and payable 174.26to a claimant agency. The term includes criminal fines imposed under section 609.10 or 174.27609.125 , fines imposed for petty misdemeanors as defined in section 609.02, subdivision 174.284a , and restitution. The term also includes the co-payment for the appointment of a district 174.29public defender imposed under section 611.17, paragraph (c). A debt may arise under a 174.30contractual or statutory obligation, a court order, or other legal obligation, but need not 174.31have been reduced to judgment. 174.32    A debt includes any legal obligation of a current recipient of assistance which is 174.33based on overpayment of an assistance grant where that payment is based on a client 174.34waiver or an administrative or judicial finding of an intentional program violation; 175.1or where the debt is owed to a program wherein the debtor is not a client at the time 175.2notification is provided to initiate recovery under this chapter and the debtor is not a 175.3current recipient of food support, transitional child care, or transitional medical assistance. 175.4     new text begin (b) new text end A debt does not include any legal obligation to pay a claimant agency for medical 175.5care, including hospitalization if the income of the debtor at the time when the medical 175.6care was rendered does not exceed the following amount: 175.7    (1) for an unmarried debtor, an income of $8,800 or less; 175.8    (2) for a debtor with one dependent, an income of $11,270 or less; 175.9    (3) for a debtor with two dependents, an income of $13,330 or less; 175.10    (4) for a debtor with three dependents, an income of $15,120 or less; 175.11    (5) for a debtor with four dependents, an income of $15,950 or less; and 175.12    (6) for a debtor with five or more dependents, an income of $16,630 or less. 175.13    The income amounts in this subdivision shall be adjusted for inflation for debts 175.14incurred in calendar years 2001 and thereafter. The dollar amount of each income level 175.15that applied to debts incurred in the prior year shall be increased in the same manner 175.16as provided in section 1(f) of the Internal Revenue Code of 1986, as amended through 175.17December 31, 2000, except that for the purposes of this subdivision the percentage 175.18increase shall be determined from the year starting September 1, 1999, and ending August 175.1931, 2000, as the base year for adjusting for inflation for debts incurred after December 175.2031, 2000. new text begin (c) The commissioner shall adjust the income amounts in paragraph (b) by the new text end 175.21 new text begin percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue new text end 175.22 new text begin Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word new text end 175.23 new text begin "1992." For 2001, the commissioner shall then determine the percent change from the 12 new text end 175.24 new text begin months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in new text end 175.25 new text begin each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months new text end 175.26 new text begin ending on August 31 of the year preceding the taxable year. The determination of the new text end 175.27 new text begin commissioner pursuant to this subdivision shall not be considered a "rule" and shall not new text end 175.28 new text begin be subject to the Administrative Procedure Act contained in chapter 14. The income new text end 175.29 new text begin amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in new text end 175.30 new text begin $5, the amount is rounded up to the nearest $10 amount. new text end 175.31     new text begin (d) new text end Debt also includes an agreement to pay a MinnesotaCare premium, regardless of 175.32the dollar amount of the premium authorized under section 256L.15, subdivision 1a. 175.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for debts incurred after December new text end 175.34 new text begin 31, 2006. new text end 175.35    Sec. 2. Minnesota Statutes 2006, section 289A.08, subdivision 11, is amended to read: 176.1    Subd. 11. Information included in income tax return. new text begin (a) new text end The return must state new text begin : new text end 176.2     new text begin (1) new text end the name of the taxpayer, or taxpayers, if the return is a joint return, and the 176.3address of the taxpayer in the same name or names and same address as the taxpayer has 176.4used in making the taxpayer's income tax return to the United States, and must state new text begin ; new text end 176.5     new text begin (2) the date or dates of birth of the taxpayer or taxpayers; new text end 176.6     new text begin (3) new text end the Social Security number of the taxpayer, or taxpayers, if a Social Security 176.7number has been issued by the United States with respect to the taxpayers, and must 176.8state new text begin ; and new text end 176.9     new text begin (4) new text end the amount of the taxable income of the taxpayer as it appears on the federal 176.10return for the taxable year to which the Minnesota state return applies. 176.11     new text begin (b) new text end The taxpayer must attach to the taxpayer's Minnesota state income tax return 176.12a copy of the federal income tax return that the taxpayer has filed or is about to file for 176.13the period, unless the taxpayer is eligible to telefile the federal return and does file the 176.14Minnesota return by telefiling. 176.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 176.16 new text begin December 31, 2006. new text end 176.17    Sec. 3. Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read: 176.18    Subd. 2. Withholding statement to employee or payee and to commissioner. (a) 176.19A person required to deduct and withhold from an employee a tax under section 290.92, 176.20subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to 176.21deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required 176.22to withhold tax under section 290.923, subdivision 2, determined without regard to 176.23section 290.92, subdivision 19, if the employee or payee had claimed no more than one 176.24withholding exemption, or who paid wages or made payments not subject to withholding 176.25under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or 176.26person receiving royalty payments in excess of $600, or who has entered into a voluntary 176.27withholding agreement with a payee under section 290.92, subdivision 20, must give 176.28every employee or person receiving royalty payments in respect to the remuneration paid 176.29by the person to the employee or person receiving royalty payments during the calendar 176.30year, on or before January 31 of the succeeding year, or, if employment is terminated 176.31before the close of the calendar year, within 30 days after the date of receipt of a written 176.32request from the employee if the 30-day period ends before January 31, a written statement 176.33showing the following: 176.34    (1) name of the person; 177.1    (2) the name of the employee or payee and the employee's or payee's Social Security 177.2account number; 177.3    (3) the total amount of wages as that term is defined in section 290.92, subdivision 177.41 , paragraph (1); the total amount of remuneration subject to withholding under section 177.5290.92, subdivision 20 ; the amount of sick pay as required under section 6051(f) of the 177.6Internal Revenue Code; and the amount of royalties subject to withholding under section 177.7290.923, subdivision 2 ; and 177.8    (4) the total amount deducted and withheld as tax under section 290.92, subdivision 177.92a or 3, or 290.923, subdivision 2. 177.10    (b) The statement required to be furnished by this paragraph new text begin (a) new text end with respect to any 177.11remuneration must be furnished at those times, must contain the information required, and 177.12must be in the form the commissioner prescribes. 177.13    (c) The commissioner may prescribe rules providing for reasonable extensions of 177.14time, not in excess of 30 days, to employers or payers required to give the statements to 177.15their employees or payees under this subdivision. 177.16    (d) A duplicate of any statement made under this subdivision and in accordance 177.17with rules prescribed by the commissioner, along with a reconciliation in the form the 177.18commissioner prescribes of the statements for the calendar year, including a reconciliation 177.19of the quarterly returns required to be filed under subdivision 1, must be filed with the 177.20commissioner on or before February 28 of the year after the payments were made. 177.21    (e) If an employer cancels the employer's Minnesota withholding account number 177.22required by section 290.92, subdivision 24, the information required by paragraph (d), 177.23must be filed with the commissioner within 30 days of the end of the quarter in which 177.24the employer cancels its account number. 177.25    (f) The employer must submit the statements required to be sent to the commissioner 177.26on magnetic media, if the magnetic media was new text begin in the same manner new text end required to satisfy the 177.27federal reporting requirements of section 6011(e) of the Internal Revenue Code and the 177.28regulations issued under it. new text begin For wages paid in calendar year 2007, an employer must new text end 177.29 new text begin submit statements to the commissioner required by this section by electronic means if the new text end 177.30 new text begin employer is required to send more than 100 statements to the commissioner, even though new text end 177.31 new text begin the employer is not required to submit the returns federally by electronic means. For new text end 177.32 new text begin calendar year 2008, the 100 statements threshold is reduced to 50, and for calendar year new text end 177.33 new text begin 2009, the threshold is reduced to 25, and for 2010 and after, the threshold is reduced to ten. new text end 177.34    (g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph 177.35(a), clause (2), must submit the returns required by this subdivision and subdivision 1, 177.36paragraph (a), with the commissioner by electronic means. 178.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for wages paid after December 31, new text end 178.2 new text begin 2006. new text end 178.3    Sec. 4. Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read: 178.4    Subd. 14. Regulated investment companies; reporting exempt-interest 178.5dividends. (a) A regulated investment company paying $10 or more in exempt-interest 178.6dividends to an individual who is a resident of Minnesota must make a return indicating 178.7the amount of the exempt-interest dividends, the name, address, and Social Security 178.8number of the recipient, and any other information that the commissioner specifies. The 178.9return must be provided to the shareholder no later than 30 days after the close of the 178.10taxable year. The return provided to the shareholder must include a clear statement, in the 178.11form prescribed by the commissioner, that the exempt-interest dividends must be included 178.12in the computation of Minnesota taxable income. The commissioner may by notice and 178.13demand require the regulated investment company new text begin is required in a manner prescribed by new text end 178.14 new text begin the commissioner new text end to file a copy of the return with the commissioner. 178.15    (b) This subdivision applies to regulated investment companies required to register 178.16under chapter 80A. 178.17    (c) For purposes of this subdivision, the following definitions apply. 178.18    (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in 178.19section 852(b)(5) of the Internal Revenue Code, but does not include the portion of 178.20exempt-interest dividends that are not required to be added to federal taxable income 178.21under section 290.01, subdivision 19a, clause (1)(ii). 178.22    (2) "Regulated investment company" means regulated investment company as 178.23defined in section 851(a) of the Internal Revenue Code or a fund of the regulated 178.24investment company as defined in section 851(g) of the Internal Revenue Code. 178.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 178.26 new text begin December 31, 2006. new text end 178.27    Sec. 5. Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read: 178.28    Subdivision 1. Individual income, fiduciary income, corporate franchise, and 178.29entertainment taxes; partnership and S corporation returns; information returns; 178.30mining company returns. The returns required to be made under sections 289A.08 and 178.31289A.12 must be filed at the following times: 178.32    (1) returns made on the basis of the calendar year must be filed on April 15 following 178.33the close of the calendar year, except that returns of corporations must be filed on March 178.3415 following the close of the calendar year; 179.1    (2) returns made on the basis of the fiscal year must be filed on the 15th day of the 179.2fourth month following the close of the fiscal year, except that returns of corporations 179.3must be filed on the 15th day of the third month following the close of the fiscal year; 179.4    (3) returns for a fractional part of a year must be filed on the 15th day of the fourth 179.5month following the end of the month in which falls the last day of the period for which 179.6the return is made, except that the returns of corporations must be filed on the 15th day of 179.7the third month following the end of the tax year of the unitary group in which falls the 179.8last day of the period for which the return is made; 179.9    (4) in the case of a final return of a decedent for a fractional part of a year, the return 179.10must be filed on the 15th day of the fourth month following the close of the 12-month 179.11period that began with the first day of that fractional part of a year; 179.12    (5) in the case of the return of a cooperative association, returns must be filed on or 179.13before the 15th day of the ninth month following the close of the taxable year; 179.14    (6) if a corporation has been divested from a unitary group and files a return for 179.15a fractional part of a year in which it was a member of a unitary business that files a 179.16combined report under section 290.34, subdivision 2, the divested corporation's return 179.17must be filed on the 15th day of the third month following the close of the common 179.18accounting period that includes the fractional year; 179.19    (7) returns of entertainment entities must be filed on April 15 following the close of 179.20the calendar year; 179.21    (8) returns required to be filed under section 289A.08, subdivision 4, must be filed 179.22on the 15th day of the fifth month following the close of the taxable year; 179.23    (9) returns of mining companies must be filed on May 1 following the close of the 179.24calendar year; and 179.25    (10) returns required to be filed with the commissioner under section 289A.12, 179.26subdivision 2 , new text begin or new text end 4 to 10, or 14, must be filed within 30 days after being demanded by 179.27the commissioner. 179.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 179.29 new text begin December 31, 2006. new text end 179.30    Sec. 6. Minnesota Statutes 2006, section 289A.60, subdivision 8, is amended to read: 179.31    Subd. 8. Penalty for new text begin Penalties; new text end failure to file informational return new text begin ; incorrect new text end 179.32 new text begin taxpayer identification number new text end . new text begin (a) new text end In the case of a failure to file an informational return 179.33required by section 289A.12 with the commissioner on the date prescribed (determined 179.34with regard to any extension of time for filing), the person failing to file the return shall pay 179.35a penalty of $50 for each failure or in the case of a partnership, S corporation, or fiduciary 180.1return, $50 for each partner, shareholder, or beneficiary; but the total amount imposed on 180.2the delinquent person for all failures during any calendar year must not exceed $25,000. If 180.3a failure to file a return is due to intentional disregard of the filing requirement, then the 180.4penalty imposed under the preceding sentence must not be less than an amount equal to: 180.5    (1) in the case of a return not described in clause (2) or (3), ten percent of the 180.6aggregate amount of the items required to be reported; 180.7    (2) in the case of a return required to be filed under section 289A.12, subdivision 5, 180.8five percent of the gross proceeds required to be reported; and 180.9    (3) in the case of a return required to be filed under section 289A.12, subdivision 9, 180.10relating to direct sales, $100 for each failure; however, the total amount imposed on the 180.11delinquent person for intentional failures during a calendar year must not exceed $50,000. 180.12The penalty must be collected in the same manner as a delinquent income tax. 180.13     new text begin (b) If a partnership or S corporation files a partnership or S corporation return with new text end 180.14 new text begin an incorrect tax identification number used for a partner or shareholder after being notified new text end 180.15 new text begin by the commissioner that the identification number is incorrect, the partnership or S new text end 180.16 new text begin corporation must pay a penalty of $50 for each such incorrect number. new text end 180.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for returns filed after December new text end 180.18 new text begin 31, 2007. new text end 180.19    Sec. 7. Minnesota Statutes 2006, section 289A.60, subdivision 12, is amended to read: 180.20    Subd. 12. Penalties relating to property tax refunds. (a) If it is determined that a 180.21property tax refund claim is excessive and was negligently prepared, new text begin a claimant is liable new text end 180.22 new text begin for a penalty of new text end ten percent of the corrected claim must be disallowed new text begin claim new text end . If the claim 180.23has been paid, the amount disallowed must be recovered by assessment and collection. 180.24    (b) An owner who without reasonable cause fails to give a certificate of rent 180.25constituting property tax to a renter, as required by section 290A.19, paragraph (a), is 180.26liable to the commissioner for a penalty of $100 for each failure. 180.27    (c) If the owner or managing agent knowingly gives rent certificates that report total 180.28rent constituting property taxes in excess of the amount of actual rent constituting property 180.29taxes paid on the rented part of a property, the owner or managing agent is liable for a 180.30penalty equal to the greater of (1) $100 or (2) 50 percent of the excess that is reported. An 180.31overstatement of rent constituting property taxes is presumed to be knowingly made if it 180.32exceeds by ten percent or more the actual rent constituting property taxes. 180.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for property tax refund claims filed new text end 180.34 new text begin on or after July 1, 2007. new text end 181.1    Sec. 8. Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read: 181.2    Subd. 27. Reportable transaction understatement. (a) If a taxpayer has a 181.3reportable transaction understatement for any taxable year, an amount equal to 20 percent 181.4of the amount of the reportable transaction understatement must be added to the tax. 181.5    (b)(1) For purposes of this subdivision, "reportable transaction understatement" 181.6means the product of: 181.7    (i) the amount of the increase, if any, in taxable income that results from a difference 181.8between the proper tax treatment of an item to which this section applies and the taxpayer's 181.9treatment of that item as shown on the taxpayer's tax return; and 181.10    (ii) the highest rate of tax imposed on the taxpayer under section 290.06 determined 181.11without regard to the understatement. 181.12    (2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed 181.13for the taxable year over gross income for that year, and any reduction in the amount of 181.14capital losses which would, without regard to section 1211 of the Internal Revenue Code, 181.15be allowed for that year, must be treated as an increase in taxable income. 181.16    (c) This subdivision applies to any item that is attributable to: 181.17    (1) any listed transaction under section 289A.121; and 181.18    (2) any reportable transaction, other than a listed transaction, if a significant purpose 181.19of that transaction is the avoidance or evasion of federal income tax liability. 181.20    (d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect 181.21to the portion of any reportable transaction understatement with respect to which the 181.22disclosure requirements of section 289A.121, subdivision 5, and section 6664(d)(2)(A) 181.23of the Internal Revenue Code are not met. 181.24    (e)(1) No penalty applies under this subdivision with respect to any portion of a 181.25reportable transaction understatement if the taxpayer shows that there was reasonable 181.26cause for the portion and that the taxpayer acted in good faith with respect to the portion. 181.27This paragraph applies only if: 181.28    (i) the relevant facts affecting the tax treatment of the item are adequately disclosed 181.29as required under section 289A.121; 181.30    (ii) there is or was substantial authority for the treatment; and 181.31    (iii) the taxpayer reasonably believed that the treatment was more likely than not 181.32the proper treatment. 181.33    (2) A taxpayer who did not adequately disclose under section 289A.121 meets 181.34the requirements of clause (1)(i), if the commissioner abates the penalty new text begin imposed by new text end 181.35 new text begin subdivision 26, paragraph (d), new text end under section new text begin subdivision 26, paragraph (g) new text end . 182.1    (3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief 182.2with respect to the tax treatment of an item only if the belief: 182.3    (i) is based on the facts and law that exist when the return of tax which includes the 182.4tax treatment is filed; and 182.5    (ii) relates solely to the taxpayer's chances of success on the merits of the treatment 182.6and does not take into account the possibility that a return will not be audited, the 182.7treatment will not be raised on audit, or the treatment will be resolved through settlement 182.8if it is raised. 182.9    (4) An opinion of a tax advisor may not be relied upon to establish the reasonable 182.10belief of a taxpayer if: 182.11    (i) the tax advisor: 182.12    (A) is a material advisor, as defined in section 289A.121, and participates in the 182.13organization, management, promotion, or sale of the transaction or is related (within the 182.14meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person 182.15who so participates; 182.16    (B) is compensated directly or indirectly by a material advisor with respect to the 182.17transaction; 182.18    (C) has a fee arrangement with respect to the transaction which is contingent on all 182.19or part of the intended tax benefits from the transaction being sustained; or 182.20    (D) has a disqualifying financial interest with respect to the transaction, as 182.21determined under United States Treasury regulations prescribed to implement the 182.22provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or 182.23    (ii) the opinion: 182.24    (A) is based on unreasonable factual or legal assumptions, including assumptions 182.25as to future events; 182.26    (B) unreasonably relies on representations, statements, findings, or agreements of 182.27the taxpayer or any other person; 182.28    (C) does not identify and consider all relevant facts; or 182.29    (D) fails to meet any other requirement as the Secretary of the Treasury may 182.30prescribe under federal law. 182.31    (f) The penalty imposed by this subdivision applies in lieu of the penalty imposed 182.32under subdivision 4. 182.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 182.34    Sec. 9. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision 182.35to read: 183.1     new text begin Subd. 28. new text end new text begin Preparer identification number. new text end new text begin Any Minnesota individual income tax new text end 183.2 new text begin return or claim for refund prepared by a "tax refund or return preparer" as defined in new text end 183.3 new text begin subdivision 13, paragraph (f), shall bear the identification number the preparer is required new text end 183.4 new text begin to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund new text end 183.5 new text begin or return preparer who prepares a Minnesota individual income tax return or claim for new text end 183.6 new text begin refund and fails to include the required number on the return or claim is subject to a new text end 183.7 new text begin penalty of $50 for each failure. new text end 183.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for returns prepared for tax years new text end 183.9 new text begin beginning after December 31, 2006. new text end 183.10    Sec. 10. Minnesota Statutes 2006, section 290.01, subdivision 19b, as amended by 183.11Laws 2007, chapter 1, section 2, is amended to read: 183.12    Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 183.13and trusts, there shall be subtracted from federal taxable income: 183.14    (1) net interest income on obligations of any authority, commission, or 183.15instrumentality of the United States to the extent includable in taxable income for federal 183.16income tax purposes but exempt from state income tax under the laws of the United States; 183.17    (2) if included in federal taxable income, the amount of any overpayment of income 183.18tax to Minnesota or to any other state, for any previous taxable year, whether the amount 183.19is received as a refund or as a credit to another taxable year's income tax liability; 183.20    (3) the amount paid to others, less the amount used to claim the credit allowed under 183.21section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 183.22to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 183.23transportation of each qualifying child in attending an elementary or secondary school 183.24situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 183.25resident of this state may legally fulfill the state's compulsory attendance laws, which 183.26is not operated for profit, and which adheres to the provisions of the Civil Rights Act 183.27of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 183.28tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 183.29"textbooks" includes books and other instructional materials and equipment purchased 183.30or leased for use in elementary and secondary schools in teaching only those subjects 183.31legally and commonly taught in public elementary and secondary schools in this state. 183.32Equipment expenses qualifying for deduction includes expenses as defined and limited in 183.33section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 183.34books and materials used in the teaching of religious tenets, doctrines, or worship, the 183.35purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 184.1or materials for, or transportation to, extracurricular activities including sporting events, 184.2musical or dramatic events, speech activities, driver's education, or similar programs. For 184.3purposes of the subtraction provided by this clause, "qualifying child" has the meaning 184.4given in section 32(c)(3) of the Internal Revenue Code; 184.5    (4) income as provided under section 290.0802; 184.6    (5) to the extent included in federal adjusted gross income, income realized on 184.7disposition of property exempt from tax under section 290.491; 184.8    (6) to the extent not deducted in determining federal taxable income by an individual 184.9who does not itemize deductions for federal income tax purposes for the taxable year, an 184.10amount equal to 50 percent of the excess of charitable contributions over $500 allowable 184.11as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 184.12under the provisions of Public Law 109-1; 184.13    (7) for taxable years beginning before January 1, 2008, the amount of the federal 184.14small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 184.15which is included in gross income under section 87 of the Internal Revenue Code; 184.16    (8) for individuals who are allowed a federal foreign tax credit for taxes that do not 184.17qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 184.18of subnational foreign taxes for the taxable year, but not to exceed the total subnational 184.19foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 184.20"federal foreign tax credit" means the credit allowed under section 27 of the Internal 184.21Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 184.22under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 184.23the extent they exceed the federal foreign tax credit; 184.24    (9) in each of the five tax years immediately following the tax year in which an 184.25addition is required under subdivision 19a, clause (7), or 19c, clause (15) new text begin (14) new text end , in the case 184.26of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 184.27of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 184.28the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 184.29subdivision 19c, clause (15) new text begin (14) new text end , in the case of a shareholder of an S corporation, minus 184.30the positive value of any net operating loss under section 172 of the Internal Revenue 184.31Code generated for the tax year of the addition. The resulting delayed depreciation 184.32cannot be less than zero; 184.33    (10) job opportunity building zone income as provided under section 469.316; 184.34    (11) new text begin to the extent included in federal taxable income, new text end the amount of compensation 184.35paid to members of the Minnesota National Guard or other reserve components of the 184.36United States military for active service performed in Minnesota, excluding compensation 185.1for services performed under the Active Guard Reserve (AGR) program. For purposes of 185.2this clause, "active service" means (i) state active service as defined in section 190.05, 185.3subdivision 5a , clause (1); (ii) federally funded state active service as defined in section 185.4190.05, subdivision 5b ; or (iii) federal active service as defined in section 190.05, 185.5subdivision 5c , but "active service" excludes services performed exclusively for purposes 185.6of basic combat training, advanced individual training, annual training, and periodic 185.7inactive duty training; special training periodically made available to reserve members; 185.8and service performed in accordance with section 190.08, subdivision 3; 185.9    (12) new text begin to the extent included in federal taxable income, new text end the amount of compensation 185.10paid to Minnesota residents who are members of the armed forces of the United States or 185.11United Nations for active duty performed outside Minnesota; 185.12    (13) an amount, not to exceed $10,000, equal to qualified expenses related to a 185.13qualified donor's donation, while living, of one or more of the qualified donor's organs 185.14to another person for human organ transplantation. For purposes of this clause, "organ" 185.15means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 185.16"human organ transplantation" means the medical procedure by which transfer of a human 185.17organ is made from the body of one person to the body of another person; "qualified 185.18expenses" means unreimbursed expenses for both the individual and the qualified donor 185.19for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 185.20may be subtracted under this clause only once; and "qualified donor" means the individual 185.21or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 185.22individual may claim the subtraction in this clause for each instance of organ donation for 185.23transplantation during the taxable year in which the qualified expenses occur; 185.24    (14) in each of the five tax years immediately following the tax year in which an 185.25addition is required under subdivision 19a, clause (8), or 19c, clause (16) new text begin (15) new text end , in the case 185.26of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 185.27of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause 185.28(16) new text begin (15) new text end , in the case of a shareholder of a corporation that is an S corporation, minus the 185.29positive value of any net operating loss under section 172 of the Internal Revenue Code 185.30generated for the tax year of the addition. If the net operating loss exceeds the addition for 185.31the tax year, a subtraction is not allowed under this clause; 185.32    (15) to the extent included in federal taxable income, compensation paid to a 185.33nonresident who is a service member as defined in United States Code, title 10, section 185.34101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 185.35Law 108-189, section 101(2); and 186.1    (16) international economic development zone income as provided under section 186.2469.325 . 186.3 new text begin EFFECTIVE DATE. new text end new text begin Clauses (11) and (12) are effective retroactively for taxable new text end 186.4 new text begin years beginning after December 31, 2004. new text end 186.5    Sec. 11. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read: 186.6    Subd. 19c. Corporations; additions to federal taxable income. For corporations, 186.7there shall be added to federal taxable income: 186.8    (1) the amount of any deduction taken for federal income tax purposes for income, 186.9excise, or franchise taxes based on net income or related minimum taxes, including but not 186.10limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 186.11another state, a political subdivision of another state, the District of Columbia, or any 186.12foreign country or possession of the United States; 186.13    (2) interest not subject to federal tax upon obligations of: the United States, its 186.14possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 186.15state, any of its political or governmental subdivisions, any of its municipalities, or any 186.16of its governmental agencies or instrumentalities; the District of Columbia; or Indian 186.17tribal governments; 186.18    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 186.19Revenue Code; 186.20    (4) the amount of any net operating loss deduction taken for federal income tax 186.21purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 186.22deduction under section 810 of the Internal Revenue Code; 186.23    (5) the amount of any special deductions taken for federal income tax purposes 186.24under sections 241 to 247 and 965 of the Internal Revenue Code; 186.25    (6) losses from the business of mining, as defined in section 290.05, subdivision 1, 186.26clause (a), that are not subject to Minnesota income tax; 186.27    (7) the amount of any capital losses deducted for federal income tax purposes under 186.28sections 1211 and 1212 of the Internal Revenue Code; 186.29    (8) the exempt foreign trade income of a foreign sales corporation under sections 186.30921(a) and 291 of the Internal Revenue Code; 186.31    (9) the amount of percentage depletion deducted under sections 611 through 614 and 186.32291 of the Internal Revenue Code; 186.33    (10) for certified pollution control facilities placed in service in a taxable year 186.34beginning before December 31, 1986, and for which amortization deductions were elected 186.35under section 169 of the Internal Revenue Code of 1954, as amended through December 187.131, 1985, the amount of the amortization deduction allowed in computing federal taxable 187.2income for those facilities; 187.3    (11) the amount of any deemed dividend from a foreign operating corporation 187.4determined pursuant to section 290.17, subdivision 4, paragraph (g); 187.5    (12) new text begin (11) new text end the amount of a partner's pro rata share of net income which does not flow 187.6through to the partner because the partnership elected to pay the tax on the income under 187.7section 6242(a)(2) of the Internal Revenue Code; 187.8    (13) new text begin (12) new text end the amount of net income excluded under section 114 of the Internal 187.9Revenue Code; 187.10    (14) new text begin (13) new text end any increase in subpart F income, as defined in section 952(a) of the 187.11Internal Revenue Code, for the taxable year when subpart F income is calculated without 187.12regard to the provisions of section 103 of Public Law 109-222; 187.13    (15) new text begin (14) new text end 80 percent of the depreciation deduction allowed under section 187.14168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if 187.15the taxpayer has an activity that in the taxable year generates a deduction for depreciation 187.16under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable 187.17year that the taxpayer is not allowed to claim for the taxable year, "the depreciation 187.18allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess 187.19of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) 187.20over the amount of the loss from the activity that is not allowed in the taxable year. In 187.21succeeding taxable years when the losses not allowed in the taxable year are allowed, the 187.22depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed; 187.23    (16) new text begin (15) new text end 80 percent of the amount by which the deduction allowed by section 179 of 187.24the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 187.25Revenue Code of 1986, as amended through December 31, 2003; 187.26    (17) new text begin (16) new text end to the extent deducted in computing federal taxable income, the amount of 187.27the deduction allowable under section 199 of the Internal Revenue Code; and 187.28    (18) new text begin (17) new text end the exclusion allowed under section 139A of the Internal Revenue Code 187.29for federal subsidies for prescription drug plans. 187.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 187.31 new text begin December 31, 2006. new text end 187.32    Sec. 12. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read: 187.33    Subd. 19d. Corporations; modifications decreasing federal taxable income. For 187.34corporations, there shall be subtracted from federal taxable income after the increases 187.35provided in subdivision 19c: 188.1    (1) the amount of foreign dividend gross-up added to gross income for federal 188.2income tax purposes under section 78 of the Internal Revenue Code; 188.3    (2) the amount of salary expense not allowed for federal income tax purposes due 188.4to claiming the federal jobs new text begin work opportunity new text end credit under section 51 of the Internal 188.5Revenue Code; 188.6    (3) any dividend (not including any distribution in liquidation) paid within the 188.7taxable year by a national or state bank to the United States, or to any instrumentality of 188.8the United States exempt from federal income taxes, on the preferred stock of the bank 188.9owned by the United States or the instrumentality; 188.10    (4) amounts disallowed for intangible drilling costs due to differences between 188.11this chapter and the Internal Revenue Code in taxable years beginning before January 188.121, 1987, as follows: 188.13    (i) to the extent the disallowed costs are represented by physical property, an amount 188.14equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 188.15subdivision 7 , subject to the modifications contained in subdivision 19e; and 188.16    (ii) to the extent the disallowed costs are not represented by physical property, an 188.17amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 188.18290.09, subdivision 8 ; 188.19    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 188.20Internal Revenue Code, except that: 188.21    (i) for capital losses incurred in taxable years beginning after December 31, 1986, 188.22capital loss carrybacks shall not be allowed; 188.23    (ii) for capital losses incurred in taxable years beginning after December 31, 1986, 188.24a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 188.25allowed; 188.26    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 188.27capital loss carryback to each of the three taxable years preceding the loss year, subject to 188.28the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and 188.29    (iv) for capital losses incurred in taxable years beginning before January 1, 1987, 188.30a capital loss carryover to each of the five taxable years succeeding the loss year to the 188.31extent such loss was not used in a prior taxable year and subject to the provisions of 188.32Minnesota Statutes 1986, section 290.16, shall be allowed; 188.33    (6) an amount for interest and expenses relating to income not taxable for federal 188.34income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 188.35expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 188.36291 of the Internal Revenue Code in computing federal taxable income; 189.1    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for 189.2which percentage depletion was disallowed pursuant to subdivision 19c, clause (11) new text begin (9) new text end , a 189.3reasonable allowance for depletion based on actual cost. In the case of leases the deduction 189.4must be apportioned between the lessor and lessee in accordance with rules prescribed 189.5by the commissioner. In the case of property held in trust, the allowable deduction must 189.6be apportioned between the income beneficiaries and the trustee in accordance with the 189.7pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 189.8of the trust's income allocable to each; 189.9    (8) for certified pollution control facilities placed in service in a taxable year 189.10beginning before December 31, 1986, and for which amortization deductions were elected 189.11under section 169 of the Internal Revenue Code of 1954, as amended through December 189.1231, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 189.131986, section 290.09, subdivision 7; 189.14    (9) amounts included in federal taxable income that are due to refunds of income, 189.15excise, or franchise taxes based on net income or related minimum taxes paid by the 189.16corporation to Minnesota, another state, a political subdivision of another state, the 189.17District of Columbia, or a foreign country or possession of the United States to the extent 189.18that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 189.19clause (1), in a prior taxable year; 189.20    (10) new text begin (9) new text end 80 percent of royalties, fees, or other like income accrued or received from a 189.21foreign operating corporation or a foreign corporation which is part of the same unitary 189.22business as the receiving corporation; 189.23    (11) new text begin (10) new text end income or gains from the business of mining as defined in section 290.05, 189.24subdivision 1 , clause (a), that are not subject to Minnesota franchise tax; 189.25    (12) new text begin (11) new text end the amount of disability access expenditures in the taxable year which are 189.26not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue 189.27Code; 189.28    (13) new text begin (12) new text end the amount of qualified research expenses not allowed for federal income 189.29tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent 189.30that the amount exceeds the amount of the credit allowed under section 290.068; 189.31    (14) new text begin (13) new text end the amount of salary expenses not allowed for federal income tax purposes 189.32due to claiming the Indian employment credit under section 45A(a) of the Internal 189.33Revenue Code; 189.34    (15) the amount of any refund of environmental taxes paid under section 59A of the 189.35Internal Revenue Code; 190.1    (16) new text begin (14) new text end for taxable years beginning before January 1, 2008, the amount of the 190.2federal small ethanol producer credit allowed under section 40(a)(3) of the Internal 190.3Revenue Code which is included in gross income under section 87 of the Internal Revenue 190.4Code; 190.5    (17) new text begin (15) new text end for a corporation whose foreign sales corporation, as defined in section 190.6922 of the Internal Revenue Code, constituted a foreign operating corporation during any 190.7taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 190.8claiming the deduction under section 290.21, subdivision 4, for income received from 190.9the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 190.10income excluded under section 114 of the Internal Revenue Code, provided the income is 190.11not income of a foreign operating company; 190.12    (18) new text begin (16) new text end any decrease in subpart F income, as defined in section 952(a) of the 190.13Internal Revenue Code, for the taxable year when subpart F income is calculated without 190.14regard to the provisions of section 614 new text begin 103 new text end of Public Law 107-147 new text begin 109-222 new text end ; 190.15    (19) new text begin (17) new text end in each of the five tax years immediately following the tax year in which an 190.16addition is required under subdivision 19c, clause (15) new text begin (14) new text end , an amount equal to one-fifth 190.17of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 190.18amount of the addition made by the taxpayer under subdivision 19c, clause (15) new text begin (14) new text end . The 190.19resulting delayed depreciation cannot be less than zero; and 190.20    (20) new text begin (18) new text end in each of the five tax years immediately following the tax year in which an 190.21addition is required under subdivision 19c, clause (16) new text begin (15) new text end , an amount equal to one-fifth 190.22of the amount of the addition. 190.23 new text begin EFFECTIVE DATE. new text end new text begin The amendment to clause (2) is effective the day following new text end 190.24 new text begin final enactment. The rest of this section is effective for taxable years beginning after new text end 190.25 new text begin December 31, 2006. new text end 190.26    Sec. 13. Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read: 190.27    Subd. 33. Bovine testing credit. (a) An owner of cattle in Minnesota may take a 190.28credit against the tax due under this chapter for an amount equal to one-half the expenses 190.29incurred during the taxable year to conduct tuberculosis testing on those cattle. 190.30    (b) If the amount of credit which the taxpayer is eligible to receive under this 190.31subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of 190.32revenue shall refund the excess to the taxpayer. 190.33    (c) The amount necessary to pay claims for the refund provided in this subdivision is 190.34appropriated from the general fund to the commissioner of revenue. 191.1     new text begin (d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in new text end 191.2 new text begin Minnesota is not federally required are not allowed in claiming the credit under paragraph new text end 191.3 new text begin (a). new text end 191.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 191.5 new text begin December 31, 2007. new text end 191.6    Sec. 14. Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read: 191.7    Subd. 2b. Inflation adjustment. new text begin The commissioner shall adjust new text end the dollar amount 191.8of the income threshold at which the maximum credit begins to be reduced under 191.9subdivision 2 must be adjusted for inflation. The commissioner shall make the inflation 191.10adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 191.11the purposes of this subdivision the percentage increase must be determined from the year 191.12starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting 191.13for inflation for the tax year beginning after December 31, 2000. The determination of 191.14the commissioner under this subdivision is not a rule under the Administrative Procedure 191.15Act. new text begin by the percentage determined pursuant to the provisions of section 1(f) of the Internal new text end 191.16 new text begin Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for new text end 191.17 new text begin the word "1992." For 2001, the commissioner shall then determine the percent change new text end 191.18 new text begin from the 12 months ending on August 31, 1999, to the 12 months ending on August 31, new text end 191.19 new text begin 2000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the new text end 191.20 new text begin 12 months ending on August 31 of the year preceding the taxable year. The determination new text end 191.21 new text begin of the commissioner pursuant to this subdivision must not be considered a "rule" and is new text end 191.22 new text begin not subject to the Administrative Procedure Act contained in chapter 14. The threshold new text end 191.23 new text begin amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in new text end 191.24 new text begin $5, the amount is rounded up to the nearest $10 amount. new text end 191.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 191.26 new text begin December 31, 2006. new text end 191.27    Sec. 15. Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read: 191.28    Subd. 7. Inflation adjustment. The earned income amounts used to calculate the 191.29credit and the income thresholds at which the maximum credit begins to be reduced in 191.30subdivision 1 must be adjusted for inflation. The commissioner shall make the inflation 191.31adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 191.32the purposes of this subdivision the percentage increase shall be determined from the year 191.33starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting for 192.1inflation for the tax year beginning after December 31, 2000. new text begin adjust by the percentage new text end 192.2 new text begin determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except new text end 192.3 new text begin that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For new text end 192.4 new text begin 2001, the commissioner shall then determine the percent change from the 12 months new text end 192.5 new text begin ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each new text end 192.6 new text begin subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending new text end 192.7 new text begin on August 31 of the year preceding the taxable year. The earned income thresholds as new text end 192.8 new text begin adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends new text end 192.9 new text begin in $5, the amount is rounded up to the nearest $10 amount. new text end The determination of the 192.10commissioner under this subdivision is not a rule under the Administrative Procedure Act. 192.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 192.12 new text begin December 31, 2006. new text end 192.13    Sec. 16. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read: 192.14    Subd. 3. Exemption amount. (a) For purposes of computing the alternative 192.15minimum tax, the exemption amount is: 192.16    (1) for taxable years beginning before January 1, 2006, the exemption determined 192.17under section 55(d) of the Internal Revenue Code, as amended through December 31, 192.181992; and 192.19    (2) new text begin , new text end for taxable years beginning after December 31, 2005, $60,000 for married 192.20couples filing joint returns, $30,000 for married individuals filing separate returns, estates, 192.21and trusts, and $45,000 for unmarried individuals. 192.22    (b) The exemption amount determined under this subdivision is subject to the phase 192.23out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 192.24taxable income as determined under this section must be substituted in the computation of 192.25the phase out. 192.26    (c) For taxable years beginning after December 31, 2006, the exemption amount 192.27under paragraph (a), clause (2), must be adjusted for inflation. The commissioner shall 192.28make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 192.29Code except that for the purposes of this subdivision the percentage increase must be 192.30determined from the year starting September 1, 2005, and ending August 31, 2006, as the 192.31base year for adjusting for inflation for the tax year beginning after December 31, 2006. 192.32 new text begin The commissioner shall adjust the exemption amount by the percentage determined new text end 192.33 new text begin pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in new text end 192.34 new text begin section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007, new text end 192.35 new text begin the commissioner shall then determine the percent change from the 12 months ending on new text end 193.1 new text begin August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent new text end 193.2 new text begin year, from the 12 months ending on August 31, 2005, to the 12 months ending on August new text end 193.3 new text begin 31 of the year preceding the taxable year. The exemption amount as adjusted must be new text end 193.4 new text begin rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest new text end 193.5 new text begin $10 amount. new text end The determination of the commissioner under this subdivision is not a rule 193.6under the Administrative Procedure Act. 193.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax years beginning after new text end 193.8 new text begin December 31, 2006. new text end 193.9    Sec. 17. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read: 193.10    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable 193.11income" is Minnesota net income as defined in section 290.01, subdivision 19, and 193.12includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 193.13(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 193.14Minnesota tax return, the minimum tax must be computed on a separate company basis. 193.15If a corporation is part of a tax group filing a unitary return, the minimum tax must be 193.16computed on a unitary basis. The following adjustments must be made. 193.17    (1) For purposes of the depreciation adjustments under section 56(a)(1) and 193.1856(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 193.19service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 193.20income tax purposes, including any modification made in a taxable year under section 193.21290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7, 193.22paragraph (c). 193.23    For taxable years beginning after December 31, 2000, the amount of any remaining 193.24modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 193.25section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 193.26allowance in the first taxable year after December 31, 2000. 193.27    (2) The portion of the depreciation deduction allowed for federal income tax 193.28purposes under section 168(k) of the Internal Revenue Code that is required as an addition 193.29under section 290.01, subdivision 19c, clause (16) new text begin (14) new text end , is disallowed in determining 193.30alternative minimum taxable income. 193.31    (3) The subtraction for depreciation allowed under section 290.01, subdivision 193.3219d , clause (19) new text begin (17) new text end , is allowed as a depreciation deduction in determining alternative 193.33minimum taxable income. 193.34    (4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 193.35of the Internal Revenue Code does not apply. 194.1    (5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 194.2Revenue Code does not apply. 194.3    (6) The special rule for dividends from section 936 companies under section 194.456(g)(4)(C)(iii) does not apply. 194.5    (7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue 194.6Code does not apply. 194.7    (8) The tax preference for intangible drilling costs under section 57(a)(2) of the 194.8Internal Revenue Code must be calculated without regard to subparagraph (E) and the 194.9subtraction under section 290.01, subdivision 19d, clause (4). 194.10    (9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 194.11Revenue Code does not apply. 194.12    (10) The tax preference for charitable contributions of appreciated property under 194.13section 57(a)(6) of the Internal Revenue Code does not apply. 194.14    (11) For purposes of calculating the tax preference for accelerated depreciation or 194.15amortization on certain property placed in service before January 1, 1987, under section 194.1657(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 194.17deduction allowed under section 290.01, subdivision 19e. 194.18    For taxable years beginning after December 31, 2000, the amount of any remaining 194.19modification made under section 290.01, subdivision 19e, not previously deducted is a 194.20depreciation or amortization allowance in the first taxable year after December 31, 2004. 194.21    (12) For purposes of calculating the adjustment for adjusted current earnings in 194.22section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 194.23income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 194.24minimum taxable income as defined in this subdivision, determined without regard to the 194.25adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code. 194.26    (13) For purposes of determining the amount of adjusted current earnings under 194.27section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 194.2856(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend 194.29gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the 194.30amount of refunds of income, excise, or franchise taxes subtracted as provided in section 194.31290.01, subdivision 19d , clause (10) new text begin (8) new text end , or (iii) the amount of royalties, fees or other like 194.32income subtracted as provided in section 290.01, subdivision 19d, clause (11) new text begin (9) new text end . 194.33    (14) Alternative minimum taxable income excludes the income from operating in a 194.34job opportunity building zone as provided under section 469.317. 194.35    (15) Alternative minimum taxable income excludes the income from operating in a 194.36biotechnology and health sciences industry zone as provided under section 469.337. 195.1    (16) Alternative minimum taxable income excludes the income from operating in an 195.2international economic development zone as provided under section 469.326. 195.3    Items of tax preference must not be reduced below zero as a result of the 195.4modifications in this subdivision. 195.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 195.6 new text begin December 31, 2006. new text end 195.7    Sec. 18. Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read: 195.8    Subd. 8. Deposit; definition. (a) "Deposit," as used in subdivision 7 new text begin 6, paragraph new text end 195.9 new text begin (n) new text end , has the meanings in this subdivision. 195.10    (b) "Deposit" means the unpaid balance of money or its equivalent received or 195.11held by a financial institution in the usual course of business and for which it has given 195.12or is obligated to give credit, either conditionally or unconditionally, to a commercial, 195.13checking, savings, time, or thrift account whether or not advance notice is required to 195.14withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift 195.15certificate, investment certificate, or certificate of indebtedness, or other similar name, or a 195.16check or draft drawn against a deposit account and certified by the financial institution, 195.17or a letter of credit or a traveler's check on which the financial institution is primarily 195.18liable. However, without limiting the generality of the term "money or its equivalent," any 195.19such account or instrument must be regarded as evidencing the receipt of the equivalent 195.20of money when credited or issued in exchange for checks or drafts or for a promissory 195.21note upon which the person obtaining the credit or instrument is primarily or secondarily 195.22liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other 195.23instruments forwarded to the bank for collection. 195.24    (c) "Deposit" means trust funds received or held by the financial institution, whether 195.25held in the trust department or held or deposited in any other department of the financial 195.26institution. 195.27    (d) "Deposit" means money received or held by a financial institution, or the credit 195.28given for money or its equivalent received or held by a financial institution, in the usual 195.29course of business for a special or specific purpose, regardless of the legal relationship so 195.30established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds, 195.31funds held as security for an obligation due to the financial institution or others, including 195.32funds held as dealers reserves, or for securities loaned by the financial institution, funds 195.33deposited by a debtor to meet maturing obligations, funds deposited as advance payment 195.34on subscriptions to United States government securities, funds held for distribution or 195.35purchase of securities, funds held to meet its acceptances or letters of credit, and withheld 196.1taxes. It does not include funds received by the financial institution for immediate 196.2application to the reduction of an indebtedness to the receiving financial institution, or 196.3under condition that the receipt of the funds immediately reduces or extinguishes the 196.4indebtedness. 196.5    (e) "Deposit" means outstanding drafts, including advice or another such institution, 196.6cashier's checks, money orders, or other officer's checks issued in the usual course 196.7of business for any purpose, but not including those issued in payment for services, 196.8dividends, or purchases or other costs or expenses of the financial institution itself. 196.9    (f) "Deposit" means money or its equivalent held as a credit balance by a financial 196.10institution on behalf of its customer if the entity is engaged in soliciting and holding such 196.11balances in the regular course of its business. 196.12    (g) Interinstitution fund transfers are not deposits. 196.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 196.14    Sec. 19. Minnesota Statutes 2006, section 290A.03, subdivision 7, is amended to read: 196.15    Subd. 7. Dependent. "Dependent" means any person who is considered a 196.16dependent under sections 151 and 152 of the Internal Revenue Code. In the case of a son, 196.17stepson, daughter, or stepdaughter of the claimant, amounts received as a Minnesota 196.18family investment program grant, allowance to or on behalf of the child, surplus food, or 196.19other relief in kind supplied by a governmental agency must not be taken into account 196.20in determining whether the child received more than half of the child's support from 196.21the claimant. 196.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for property tax refunds based on new text end 196.23 new text begin rents paid after December 31, 2006, and property taxes payable after December 31, 2007. new text end 196.24    Sec. 20. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read: 196.25    Subdivision 1. Determination. All property includable in the Minnesota gross 196.26estate of a decedent shall be valued in accordance with the provisions of sections 2031 or 196.272032 and, if applicable, 2032A, of the Internal Revenue Code and any elections made in 196.28valuing the federal gross estate shall be applicable in valuing the Minnesota gross estate. 196.29Values for purposes of the estate tax on both probate and nonprobate assets shall be the 196.30same as those finally determined for purposes of the federal estate tax on a decedent's 196.31estate. new text begin Except as otherwise provided in section 291.075, the value of all property new text end 196.32 new text begin includable in the Minnesota gross estate of a decedent may be independently determined new text end 196.33 new text begin under those sections for Minnesota estate tax purposes. new text end 197.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for estates of decedents new text end 197.2 new text begin dying after December 31, 2005. new text end 197.3    Sec. 21. new text begin TRANSITION; POLLUTION CONTROL FACILITIES new text end 197.4 new text begin AMORTIZATION. new text end 197.5     new text begin The amount of additions to federal taxable income pursuant to Minnesota Statutes, new text end 197.6 new text begin section 290.01, subdivision 19c, clause (10), that are properly subtractable pursuant new text end 197.7 new text begin to Minnesota Statutes, section 290.01, subdivision 19d, clause (8), for taxable years new text end 197.8 new text begin beginning after December 31, 2006, and have not been subtracted pursuant to Minnesota new text end 197.9 new text begin Statutes, section 290.01, subdivision 19d, clause (8), are subtractable in the taxpayer's first new text end 197.10 new text begin taxable year beginning after December 31, 2006. new text end 197.11ARTICLE 11 197.12DEPARTMENT SALES AND USE TAXES 197.13    Section 1. Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to 197.14read: 197.15    Subd. 2. Bad debt loss. If a claim relates to an overpayment because of a failure to 197.16deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered 197.17timely if filed within seven years from the date prescribed for the filing of the return. A 197.18claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2 197.19years from the date prescribed for filing the return, plus any extensions granted for filing 197.20the return, but only if filed within the extended time new text begin when the bad debt was (1) written off new text end 197.21 new text begin as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted new text end 197.22 new text begin for federal income tax purposes or would have been eligible for a bad debt deduction for new text end 197.23 new text begin federal income tax purposes if the taxpayer were required to file a federal income tax new text end 197.24 new text begin return, or within one year from the date the taxpayer's federal income tax return is timely new text end 197.25 new text begin filed claiming the bad debt deduction, whichever period is later new text end . The refund or credit is 197.26limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes 197.27of this subdivision, has the same meaning as that term is used in United States Code, 197.28title 26, section 166, except that for a claim relating to an overpayment of taxes under 197.29chapter 297A the following are excluded from the calculation of bad debt: financing 197.30charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts 197.31on property that remain in the possession of the seller until the full purchase price is 197.32paid; expenses incurred in attempting to collect any debt; and repossessed property. new text begin For new text end 197.33 new text begin purposes of reporting a payment received on previously claimed bad debt under chapter new text end 197.34 new text begin 297A, any payments made on a debt or account are applied first proportionally to the new text end 198.1 new text begin taxable price of the property or service and the sales tax on it, and secondly to interest, new text end 198.2 new text begin service charges, and any other charges. new text end 198.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 198.4    Sec. 2. Minnesota Statutes 2006, section 289A.56, is amended by adding a subdivision 198.5to read: 198.6     new text begin Subd. 8. new text end new text begin Border city zone refunds. new text end new text begin Notwithstanding subdivision 3, for refunds new text end 198.7 new text begin payable under section 469.1734, subdivision 6, interest is computed from 90 days after the new text end 198.8 new text begin refund claim is filed with the commissioner. new text end 198.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for refund claims filed on or after new text end 198.10 new text begin July 1, 2007. new text end 198.11    Sec. 3. Minnesota Statutes 2006, section 289A.60, subdivision 25, is amended to read: 198.12    Subd. 25. Penalty for failure to properly complete sales new text begin and use new text end tax return. A 198.13person who fails to report local sales tax new text begin taxes required to be reported new text end on a sales new text begin and use new text end 198.14tax return or who fails to report local sales tax new text begin taxes new text end on separate tax lines on the sales 198.15 new text begin and use new text end tax return is subject to a penalty of five percent of the amount of tax not properly 198.16reported on the return. A person who files a consolidated tax return but fails to report 198.17location information is subject to a $500 penalty for each return not containing location 198.18information. In addition, the commissioner may revoke the privilege for a taxpayer to 198.19file consolidated returns and may require the taxpayer to separately register each location 198.20and to file a tax return for each location. 198.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for returns filed after June 30, 2007. new text end 198.22    Sec. 4. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision 198.23to read: 198.24     new text begin Subd. 29. new text end new text begin Penalty for failure to report liquor sales. new text end new text begin In the case of a failure to file new text end 198.25 new text begin an informational return required by section 297A.8155 with the commissioner on or before new text end 198.26 new text begin the date prescribed, the person failing to file the report shall pay a penalty of $500 each new text end 198.27 new text begin failure. If a failure to file a report is intentional, the penalty shall be $1,000 each failure. new text end 198.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 198.29    Sec. 5. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read: 199.1    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 199.2to, each of the transactions listed in this subdivision. 199.3    (b) Sale and purchase include: 199.4    (1) any transfer of title or possession, or both, of tangible personal property, whether 199.5absolutely or conditionally, for a consideration in money or by exchange or barter; and 199.6    (2) the leasing of or the granting of a license to use or consume, for a consideration 199.7in money or by exchange or barter, tangible personal property, other than a manufactured 199.8home used for residential purposes for a continuous period of 30 days or more. 199.9    (c) Sale and purchase include the production, fabrication, printing, or processing of 199.10tangible personal property for a consideration for consumers who furnish either directly or 199.11indirectly the materials used in the production, fabrication, printing, or processing. 199.12    (d) Sale and purchase include the preparing for a consideration of food. 199.13Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 199.14to, the following: 199.15    (1) prepared food sold by the retailer; 199.16    (2) soft drinks; 199.17    (3) candy; 199.18    (4) dietary supplements; and 199.19    (5) all food sold through vending machines. 199.20    (e) A sale and a purchase includes the furnishing for a consideration of electricity, 199.21gas, water, or steam for use or consumption within this state. 199.22    (f) A sale and a purchase includes the transfer for a consideration of prewritten 199.23computer software whether delivered electronically, by load and leave, or otherwise. 199.24    (g) A sale and a purchase includes the furnishing for a consideration of the following 199.25services: 199.26    (1) the privilege of admission to places of amusement, recreational areas, or athletic 199.27events, and the making available of amusement devices, tanning facilities, reducing 199.28salons, steam baths, turkish baths, health clubs, and spas or athletic facilities; 199.29    (2) lodging and related services by a hotel, rooming house, resort, campground, 199.30motel, or trailer camp new text begin , including furnishing the guest of the facility with access to new text end 199.31 new text begin telecommunication services, new text end and the granting of any similar license to use real property 199.32in a specific facility, other than the renting or leasing of it for a continuous period of 199.3330 days or more under an enforceable written agreement that may not be terminated 199.34without prior notice; 199.35    (3) nonresidential parking services, whether on a contractual, hourly, or other 199.36periodic basis, except for parking at a meter; 200.1    (4) the granting of membership in a club, association, or other organization if: 200.2    (i) the club, association, or other organization makes available for the use of its 200.3members sports and athletic facilities, without regard to whether a separate charge is 200.4assessed for use of the facilities; and 200.5    (ii) use of the sports and athletic facility is not made available to the general public 200.6on the same basis as it is made available to members. 200.7Granting of membership means both onetime initiation fees and periodic membership 200.8dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 200.9squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 200.10swimming pools; and other similar athletic or sports facilities; 200.11    (5) delivery of aggregate materials and concrete block by a third party new text begin , excluding new text end 200.12 new text begin delivery of aggregate material used in road construction, and delivery of concrete block by new text end 200.13 new text begin a third party new text end if the delivery would be subject to the sales tax if provided by the seller of the 200.14aggregate material or concrete block; and 200.15    (6) services as provided in this clause: 200.16    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 200.17and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 200.18drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 200.19include services provided by coin operated facilities operated by the customer; 200.20    (ii) motor vehicle washing, waxing, and cleaning services, including services 200.21provided by coin operated facilities operated by the customer, and rustproofing, 200.22undercoating, and towing of motor vehicles; 200.23    (iii) building and residential cleaning, maintenance, and disinfecting new text begin services and new text end 200.24 new text begin pest control new text end and exterminating services; 200.25    (iv) detective, security, burglar, fire alarm, and armored car services; but not 200.26including services performed within the jurisdiction they serve by off-duty licensed peace 200.27officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 200.28organization for monitoring and electronic surveillance of persons placed on in-home 200.29detention pursuant to court order or under the direction of the Minnesota Department 200.30of Corrections; 200.31    (v) pet grooming services; 200.32    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 200.33and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 200.34plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 200.35clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 201.1public utility lines. Services performed under a construction contract for the installation of 201.2shrubbery, plants, sod, trees, bushes, and similar items are not taxable; 201.3    (vii) massages, except when provided by a licensed health care facility or 201.4professional or upon written referral from a licensed health care facility or professional for 201.5treatment of illness, injury, or disease; and 201.6    (viii) the furnishing of lodging, board, and care services for animals in kennels and 201.7other similar arrangements, but excluding veterinary and horse boarding services. 201.8    In applying the provisions of this chapter, the terms "tangible personal property" 201.9and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 201.10and the provision of these taxable services, unless specifically provided otherwise. 201.11Services performed by an employee for an employer are not taxable. Services performed 201.12by a partnership or association for another partnership or association are not taxable if 201.13one of the entities owns or controls more than 80 percent of the voting power of the 201.14equity interest in the other entity. Services performed between members of an affiliated 201.15group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 201.16group of corporations" means those entities that would be classified as members of an 201.17affiliated group as defined under United States Code, title 26, section 1504, disregarding 201.18the exclusions in section 1504(b). 201.19     new text begin For purposes of clause (5), "road construction" means construction of (1) public new text end 201.20 new text begin roads, (2) cartways, and (3) private roads in townships located outside of the seven-county new text end 201.21 new text begin metropolitan area up to the point of the emergency response location sign. new text end 201.22    (h) A sale and a purchase includes the furnishing for a consideration of tangible 201.23personal property or taxable services by the United States or any of its agencies or 201.24instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 201.25subdivisions. 201.26    (i) A sale and a purchase includes the furnishing for a consideration 201.27of telecommunications services, including new text begin ancillary services associated with new text end 201.28 new text begin telecommunication services, new text end cable television services and new text begin , new text end direct satellite services new text begin , and new text end 201.29 new text begin ring tones new text end . Telecommunications new text begin Telecommunication services include, but are not limited new text end 201.30 new text begin to, the following services, as defined in section 297A.669: air-to-ground radiotelephone new text end 201.31 new text begin service, mobile telecommunication service, postpaid calling service, prepaid calling new text end 201.32 new text begin service, prepaid wireless calling service, and private communication services. The new text end 201.33services new text begin in this paragraph new text end are taxed to the extent allowed under federal law. 201.34    (j) A sale and a purchase includes the furnishing for a consideration of installation if 201.35the installation charges would be subject to the sales tax if the installation were provided 201.36by the seller of the item being installed. 202.1    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 202.2to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 202.3the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 202.465B.29, subdivision 1 , clause (1). 202.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 202.6 new text begin June 30, 2007, except that the amendments to paragraphs (g), clause (2), and (i), are new text end 202.7 new text begin effective for sales and purchases made on or after January 1, 2008. new text end 202.8    Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 4, is amended to read: 202.9    Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any 202.10purpose, other than resale, sublease, or subrent of items by the purchaser in the normal 202.11course of business as defined in subdivision 21. 202.12    (b) A sale of property used by the owner only by leasing it to others or by holding it 202.13in an effort to lease it, and put to no use by the owner other than resale after the lease or 202.14effort to lease, is a sale of property for resale. 202.15    (c) A sale of master computer software that is purchased and used to make copies for 202.16sale or lease is a sale of property for resale. 202.17    (d) A sale of building materials, supplies, and equipment to owners, contractors, 202.18subcontractors, or builders for the erection of buildings or the alteration, repair, or 202.19improvement of real property is a retail sale in whatever quantity sold, whether the sale is 202.20for purposes of resale in the form of real property or otherwise. 202.21    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides 202.22for installation of the floor covering is a retail sale and not a sale for resale since a sale 202.23of floor covering which includes installation is a contract for the improvement of real 202.24property. 202.25    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides 202.26for installation of the items is a retail sale and not a sale for resale since a sale of 202.27shrubbery, plants, sod, trees, and similar items that includes installation is a contract for 202.28the improvement of real property. 202.29    (g) A sale of tangible personal property that is awarded as prizes is a retail sale and 202.30is not considered a sale of property for resale. 202.31    (h) A sale of tangible personal property utilized or employed in the furnishing or 202.32providing of services under subdivision 3, paragraph (g), clause (1), including, but not 202.33limited to, property given as promotional items, is a retail sale and is not considered a 202.34sale of property for resale. 203.1    (i) A sale of tangible personal property used in conducting lawful gambling under 203.2chapter 349 or the State Lottery under chapter 349A, including, but not limited to, 203.3property given as promotional items, is a retail sale and is not considered a sale of 203.4property for resale. 203.5    (j) A sale of machines, equipment, or devices that are used to furnish, provide, or 203.6dispense goods or services, including, but not limited to, coin-operated devices, is a retail 203.7sale and is not considered a sale of property for resale. 203.8    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease 203.9payment becomes due under the terms of the agreement or the trade practices of the 203.10lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, 203.11subdivision 5 , but excluding vehicles with a manufacturer's gross vehicle weight rating 203.12greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time 203.13the lease is executed. 203.14    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of 203.15title or possession of the tangible personal property. 203.16     new text begin (m) A sale of a bundled transaction in which one or more of the products included new text end 203.17 new text begin in the bundle is a taxable product is a retail sale, except that if one of the products new text end 203.18 new text begin is a telecommunication service, ancillary service, Internet access, or audio or video new text end 203.19 new text begin programming service, and the seller has maintained books and records identifying through new text end 203.20 new text begin reasonable and verifiable standards the portions of the price that are attributable to the new text end 203.21 new text begin distinct and separately identifiable products, then the products are not considered part of a new text end 203.22 new text begin bundled transaction. For purposes of this paragraph: new text end 203.23     new text begin (1) the books and records maintained by the seller must be maintained in the regular new text end 203.24 new text begin course of business, and do not include books and records created and maintained by the new text end 203.25 new text begin seller primarily for tax purposes; new text end 203.26     new text begin (2) books and records maintained in the regular course of business include, but are new text end 203.27 new text begin not limited to, financial statements, general ledgers, invoicing and billing systems and new text end 203.28 new text begin reports, and reports for regulatory tariffs and other regulatory matters; and new text end 203.29     new text begin (3) books and records are maintained primarily for tax purposes when the books new text end 203.30 new text begin and records identify taxable and nontaxable portions of the price, but the seller maintains new text end 203.31 new text begin other books and records that identify different prices attributable to the distinct products new text end 203.32 new text begin included in the same bundled transaction. new text end 203.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 203.34 new text begin or after January 1, 2008. new text end 203.35    Sec. 7. Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read: 204.1    Subd. 7. Sales price. (a) "Sales price" means the measure subject to sales tax, and 204.2means the total amount of consideration, including cash, credit, personal property, and 204.3services, for which personal property or services are sold, leased, or rented, valued in 204.4money, whether received in money or otherwise, without any deduction for the following: 204.5    (1) the seller's cost of the property sold; 204.6    (2) the cost of materials used, labor or service cost, interest, losses, all costs of 204.7transportation to the seller, all taxes imposed on the seller, and any other expenses of 204.8the seller; 204.9    (3) charges by the seller for any services necessary to complete the sale, other than 204.10delivery and installation charges; 204.11    (4) delivery charges new text begin , except the percentage of the delivery charge allocated to new text end 204.12 new text begin delivery of tax exempt property, when the delivery charge is allocated by using either (i) a new text end 204.13 new text begin percentage based on the total sales price of the taxable property compared to the total sales new text end 204.14 new text begin price of all property in the shipment, or (ii) a percentage based on the total weight of the new text end 204.15 new text begin taxable property compared to the total weight of all property in the shipment new text end ; new text begin and new text end 204.16    (5) installation charges; and new text begin . new text end 204.17    (6) the value of exempt property given to the purchaser when taxable and exempt 204.18personal property have been bundled together and sold by the seller as a single product 204.19or piece of merchandise. 204.20    (b) Sales price does not include: 204.21    (1) discounts, including cash, terms, or coupons, that are not reimbursed by a third 204.22party and that are allowed by the seller and taken by a purchaser on a sale; 204.23    (2) interest, financing, and carrying charges from credit extended on the sale of 204.24personal property or services, if the amount is separately stated on the invoice, bill of sale, 204.25or similar document given to the purchaser; and 204.26    (3) any taxes legally imposed directly on the consumer that are separately stated on 204.27the invoice, bill of sale, or similar document given to the purchaser. 204.28     new text begin (c) Sales price includes consideration received by the seller from third parties if: new text end 204.29     new text begin (1) the seller actually receives consideration from a party other than the purchaser new text end 204.30 new text begin and the consideration is directly related to a price reduction or discount on the sale; new text end 204.31     new text begin (2) the seller has an obligation to pass the price reduction or discount through to new text end 204.32 new text begin the purchaser; new text end 204.33     new text begin (3) the amount of the consideration attributable to the sale is fixed and determinable new text end 204.34 new text begin by the seller at the time of the sale of the item to the purchaser; and new text end 204.35     new text begin (4) one of the following criteria is met: new text end 205.1     new text begin (i) the purchaser presents a coupon, certificate, or other documentation to the seller new text end 205.2 new text begin to claim a price reduction or discount when the coupon, certificate, or documentation is new text end 205.3 new text begin authorized, distributed, or granted by a third party with the understanding that the third new text end 205.4 new text begin party will reimburse any seller to whom the coupon, certificate, or documentation is new text end 205.5 new text begin presented; new text end 205.6     new text begin (ii) the purchaser identifies himself or herself to the seller as a member of a group or new text end 205.7 new text begin organization entitled to a price reduction or discount. A "preferred customer" card that is new text end 205.8 new text begin available to any customer does not constitute membership in such a group; or new text end 205.9     new text begin (iii) the price reduction or discount is identified as a third-party price reduction or new text end 205.10 new text begin discount on the invoice received by the purchaser or on a coupon, certificate, or other new text end 205.11 new text begin documentation presented by the purchaser. new text end 205.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on or new text end 205.13 new text begin after January 1, 2008, except that the amendment to paragraph (a), clause (4), is effective new text end 205.14 new text begin the day following final enactment. new text end 205.15    Sec. 8. Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read: 205.16    Subd. 10. Tangible personal property. (a) "Tangible personal property" means 205.17personal property that can be seen, weighed, measured, felt, or touched, or that is in any 205.18other manner perceptible to the senses. "Tangible personal property" includes, but is not 205.19limited to, electricity, water, gas, steam, new text begin and new text end prewritten computer software, and prepaid 205.20calling cards. 205.21    (b) Tangible personal property does not include: 205.22    (1) large ponderous machinery and equipment used in a business or production 205.23activity which at common law would be considered to be real property; 205.24    (2) property which is subject to an ad valorem property tax; 205.25    (3) property described in section 272.02, subdivision 9, clauses (a) to (d); and 205.26    (4) property described in section 272.03, subdivision 2, clauses (3) and (5). 205.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 205.28 new text begin or after January 1, 2008. new text end 205.29    Sec. 9. Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read: 205.30    Subd. 24. Telecommunications services. (a) "Telecommunications services" means 205.31the new text begin electronic new text end transmission, conveyance, or routing of voice, data, audio, video, or any 205.32other information or signals to a point, or between or among points, by or through any 205.33electronic, satellite, optical, microwave, or other medium or method now in existence or 206.1hereafter devised, regardless of the protocol used for such transmission, conveyance, 206.2or routing. 206.3    (b) Telecommunications services includes the furnishing for consideration of access 206.4to telephone services by a hotel to its guests. new text begin include transmission, conveyance, or routing new text end 206.5 new text begin in which computer processing applications are used to act on the form, code, or protocol new text end 206.6 new text begin of the content for purposes of transmission, conveyance, or routing, without regard to new text end 206.7 new text begin whether the service is referred to as voice over Internet protocol services or is classified by new text end 206.8 new text begin the Federal Communications Commission as enhanced or value added. new text end 206.9    (c) Telecommunications services do not include: 206.10    (1) services purchased with a prepaid telephone calling card; 206.11    (2) private communication service purchased by an agent acting on behalf of the 206.12State Lottery; 206.13    (3) information services; and 206.14    (4) purchases of telecommunications when the purchaser uses the purchased services 206.15as a component part of or integrates such service into another telecommunications service 206.16that is sold by the purchaser in the normal course of business. 206.17    (d) For purposes of this subdivision, "information services" means the offering of 206.18the capability for generating, acquiring, storing, transforming, processing, retrieving, 206.19utilizing, or making available information. 206.20     new text begin (1) data processing and information services that allow data to be generated, new text end 206.21 new text begin acquired, stored, processed, or retrieved and delivered by an electronic transmission to new text end 206.22 new text begin a purchaser when the purchaser's primary purpose for the underlying transaction is the new text end 206.23 new text begin processed data or information; new text end 206.24     new text begin (2) installation or maintenance of wiring or equipment on a customer's premises; new text end 206.25     new text begin (3) tangible personal property; new text end 206.26     new text begin (4) advertising, including, but not limited to, directory advertising; new text end 206.27     new text begin (5) billing and collection services provided to third parties; new text end 206.28     new text begin (6) Internet access service; new text end 206.29     new text begin (7) radio and television audio and video programming services, regardless of the new text end 206.30 new text begin medium, including the furnishing of transmission, conveyance, and routing of such new text end 206.31 new text begin services by the programming service provider. Radio and television audio and video new text end 206.32 new text begin programming services includes, but is not limited to, cable service as defined in United new text end 206.33 new text begin States Code, title 47, section 522(6), and audio and video programming services delivered new text end 206.34 new text begin by commercial mobile radio service providers, as defined in Code of Federal Regulations, new text end 206.35 new text begin title 47, section 20.3; new text end 206.36     new text begin (8) ancillary services; or new text end 207.1     new text begin (9) digital products delivered electronically, including, but not limited to, software, new text end 207.2 new text begin music, video, reading materials, or ring tones. new text end 207.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 207.4 new text begin or after January 1, 2008. new text end 207.5    Sec. 10. Minnesota Statutes 2006, section 297A.61, is amended by adding a 207.6subdivision to read: 207.7     new text begin Subd. 38. new text end new text begin Bundled transaction. new text end new text begin (a) "Bundled transaction" means the retail sale new text end 207.8 new text begin of two or more products when the products are otherwise distinct and identifiable, and new text end 207.9 new text begin the products are sold for one nonitemized price. As used in this subdivision, "product" new text end 207.10 new text begin includes tangible personal property, services, intangibles, and digital goods, but does not new text end 207.11 new text begin include real property or services to real property. A bundled transaction does not include new text end 207.12 new text begin the sale of any products in which the sales price varies, or is negotiable, based on the new text end 207.13 new text begin selection by the purchaser of the products included in the transaction. new text end 207.14     new text begin (b) For purposes of this subdivision, "distinct and identifiable" products does not new text end 207.15 new text begin include: new text end 207.16     new text begin (1) packaging and other materials, such as containers, boxes, sacks, bags, and new text end 207.17 new text begin bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the new text end 207.18 new text begin products and are incidental or immaterial to the retail sale. Examples of packaging that are new text end 207.19 new text begin incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags, new text end 207.20 new text begin and express delivery envelopes and boxes; new text end 207.21     new text begin (2) a promotional product provided free of charge with the required purchase of new text end 207.22 new text begin another product. A promotional product is provided free of charge if the sales price of new text end 207.23 new text begin another product, which is required to be purchased in order to receive the promotional new text end 207.24 new text begin product, does not vary depending on the inclusion of the promotional product; and new text end 207.25     new text begin (3) items included in the definition of sales price. new text end 207.26     new text begin (c) For purposes of this subdivision, the term "one nonitemized price" does not new text end 207.27 new text begin include a price that is separately identified by product on binding sales or other supporting new text end 207.28 new text begin sales-related documentation made available to the customer in paper or electronic form new text end 207.29 new text begin including, but not limited to an invoice, bill of sale, receipt, contract, service agreement, new text end 207.30 new text begin lease agreement, periodic notice of rates and services, rate card, or price list. new text end 207.31     new text begin (d) A transaction that otherwise meets the definition of a bundled transaction is new text end 207.32 new text begin not a bundled transaction if it is: new text end 207.33     new text begin (1) the retail sale of tangible personal property and a service and the tangible new text end 207.34 new text begin personal property is essential to the use of the service, and is provided exclusively in new text end 207.35 new text begin connection with the service, and the true object of the transaction is the service; new text end 208.1     new text begin (2) the retail sale of services if one service is provided that is essential to the use or new text end 208.2 new text begin receipt of a second service and the first service is provided exclusively in connection with new text end 208.3 new text begin the second service and the true object of the transaction is the second service; new text end 208.4     new text begin (3) a transaction that includes taxable products and nontaxable products and the new text end 208.5 new text begin purchase price or sales price of the taxable products is de minimis; or new text end 208.6     new text begin (4) the retail sale of exempt tangible personal property and taxable tangible personal new text end 208.7 new text begin property if: new text end 208.8     new text begin (i) the transaction includes food and food ingredients, drugs, durable medical new text end 208.9 new text begin equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices, new text end 208.10 new text begin or medical supplies; and new text end 208.11     new text begin (ii) the seller's purchase price or sales price of the taxable tangible personal property new text end 208.12 new text begin is 50 percent or less of the total purchase price or sales price of the bundled tangible new text end 208.13 new text begin personal property. Sellers must not use a combination of the purchase price and sales new text end 208.14 new text begin price of the tangible personal property when making the 50 percent determination for new text end 208.15 new text begin a transaction. new text end 208.16     new text begin (e) For purposes of this subdivision, "purchase price" means the measure subject to new text end 208.17 new text begin use tax on purchases made by the seller, and "de minimis" means that the seller's purchase new text end 208.18 new text begin price or sales price of the taxable products is ten percent or less of the total purchase new text end 208.19 new text begin price or sales price of the bundled products. Sellers shall use either the purchase price new text end 208.20 new text begin or the sales price of the products to determine if the taxable products are de minimis. new text end 208.21 new text begin Sellers must not use a combination of the purchase price and sales price of the products new text end 208.22 new text begin to determine if the taxable products are de minimis. Sellers shall use the full term of a new text end 208.23 new text begin service contract to determine if the taxable products are de minimis. new text end 208.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 208.25 new text begin or after January 1, 2008. new text end 208.26    Sec. 11. Minnesota Statutes 2006, section 297A.61, is amended by adding a 208.27subdivision to read: 208.28     new text begin Subd. 39. new text end new text begin Ancillary services. new text end new text begin "Ancillary services" means services that are new text end 208.29 new text begin associated with or incidental to the provision of telecommunications services, including, new text end 208.30 new text begin but not limited to, conference bridging service, detailed telecommunications billing, new text end 208.31 new text begin directory assistance, vertical service, and voice mail services. new text end 208.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 208.33 new text begin or after January 1, 2008. new text end 209.1    Sec. 12. Minnesota Statutes 2006, section 297A.61, is amended by adding a 209.2subdivision to read: 209.3     new text begin Subd. 40. new text end new text begin Conference bridging service. new text end new text begin "Conference bridging service" means an new text end 209.4 new text begin ancillary service that links two or more participants of an audio or video conference call new text end 209.5 new text begin and may include the provision of a telephone number. Conference bridging service does new text end 209.6 new text begin not include the telecommunications services used to reach the conference bridge. new text end 209.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 209.8 new text begin or after January 1, 2008. new text end 209.9    Sec. 13. Minnesota Statutes 2006, section 297A.61, is amended by adding a 209.10subdivision to read: 209.11     new text begin Subd. 41. new text end new text begin Detailed telecommunications billing service. new text end new text begin "Detailed new text end 209.12 new text begin telecommunications billing service" means an ancillary service of separately stating new text end 209.13 new text begin information pertaining to individual calls on a customer's billing statement. new text end 209.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 209.15 new text begin or after January 1, 2008. new text end 209.16    Sec. 14. Minnesota Statutes 2006, section 297A.61, is amended by adding a 209.17subdivision to read: 209.18     new text begin Subd. 42. new text end new text begin Directory assistance. new text end new text begin "Directory assistance" means an ancillary service new text end 209.19 new text begin of providing telephone number information or address information, or both. new text end 209.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 209.21 new text begin or after January 1, 2008. new text end 209.22    Sec. 15. Minnesota Statutes 2006, section 297A.61, is amended by adding a 209.23subdivision to read: 209.24     new text begin Subd. 43. new text end new text begin Vertical service. new text end new text begin "Vertical service" means an ancillary service that is new text end 209.25 new text begin offered in connection with one or more telecommunications services and which offers new text end 209.26 new text begin advanced calling features that allow customers to identify callers and to manage multiple new text end 209.27 new text begin calls and call connections, including conference bridging services. new text end 209.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 209.29 new text begin or after January 1, 2008. new text end 210.1    Sec. 16. Minnesota Statutes 2006, section 297A.61, is amended by adding a 210.2subdivision to read: 210.3     new text begin Subd. 44. new text end new text begin Voice mail service. new text end new text begin "Voice mail service" means an ancillary service that new text end 210.4 new text begin enables the customer to store, send, or receive recorded messages. Voice mail service new text end 210.5 new text begin does not include any vertical services that the customer may be required to have in order new text end 210.6 new text begin to utilize the voice mail service. new text end 210.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 210.8 new text begin or after January 1, 2008. new text end 210.9    Sec. 17. Minnesota Statutes 2006, section 297A.61, is amended by adding a 210.10subdivision to read: 210.11     new text begin Subd. 45. new text end new text begin Ring tone. new text end new text begin "Ring tone" means a digitized sound file that is downloaded new text end 210.12 new text begin onto a device and that may be used to alert the customer of a telecommunication service new text end 210.13 new text begin with respect to a communication. new text end 210.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 210.15    Sec. 18. Minnesota Statutes 2006, section 297A.61, is amended by adding a 210.16subdivision to read: 210.17     new text begin Subd. 46. new text end new text begin Fur clothing. new text end new text begin "Fur clothing" means human wearing apparel that is new text end 210.18 new text begin required by the Federal Fur Products Labeling Act, United States Code, title 15, section new text end 210.19 new text begin 69, to be labeled as a fur product, and the value of the fur components in the product new text end 210.20 new text begin is more than three times the value of the next most valuable tangible component. For new text end 210.21 new text begin purposes of this subdivision, "fur" means any animal skin or part of an animal skin with new text end 210.22 new text begin hair, fleece, or fur fibers attached to it, either in its raw or processed state, but does not new text end 210.23 new text begin include animal skins that have been converted into leather or suede, or from which the new text end 210.24 new text begin hair, fleece, or fur fiber has been completely removed in processing the skins. new text end 210.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on or new text end 210.26 new text begin after July 1, 2007. new text end 210.27    Sec. 19. Minnesota Statutes 2006, section 297A.63, subdivision 1, is amended to read: 210.28    Subdivision 1. Use of tangible personal property or taxable services. (a) For the 210.29privilege of using, storing, distributing, or consuming in Minnesota tangible personal 210.30property or taxable services purchased for use, storage, distribution, or consumption in 210.31this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the 210.32purchase price of retail sales of the tangible personal property or taxable services at the 211.1rate of tax imposed under section 297A.62. A person that purchases property from a 211.2Minnesota retailer and returns the tangible personal property to a point within Minnesota, 211.3except in the course of interstate commerce, after it was delivered outside of Minnesota, 211.4is subject to the use tax. 211.5    (b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62 211.6was paid on the sales price of the tangible personal property or taxable services. 211.7    (c) No tax is imposed under paragraph (a) if the purchase meets the requirements for 211.8exemption under section 297A.67, subdivision 21. 211.9     new text begin (d) When a transaction otherwise meets the definition of a bundled transaction, but new text end 211.10 new text begin is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and new text end 211.11 new text begin the seller's purchase price of the taxable product or taxable tangible personal property is new text end 211.12 new text begin equal to or greater than $100, then use tax is imposed on the purchase price of the taxable new text end 211.13 new text begin product or taxable personal property. For purposes of this paragraph, "purchase price" new text end 211.14 new text begin means the measure subject to use tax on purchases made by the seller. new text end 211.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 211.16 new text begin or after January 1, 2008. new text end 211.17    Sec. 20. Minnesota Statutes 2006, section 297A.665, is amended to read: 211.18297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF. 211.19    (a) For the purpose of the proper administration of this chapter and to prevent 211.20evasion of the tax, until the contrary is established, it is presumed that: 211.21    (1) all gross receipts are subject to the tax; and 211.22    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 211.23in Minnesota. 211.24    (b) The burden of proving that a sale is not a taxable retail sale is on the seller. 211.25However, the seller may take from the purchaser at the time of the sale a fully completed 211.26exemption certificate which conclusively relieves the seller from collecting and remitting 211.27the tax. This new text begin However, a seller is relieved of liability if: new text end 211.28     new text begin (1) the seller obtains a fully completed exemption certificate or all the relevant new text end 211.29 new text begin information required by section 297A.72, subdivision 2, at the time of the sale or within new text end 211.30 new text begin 90 days after the date of the sale; or new text end 211.31     new text begin (2) if the seller has not obtained a fully completed exemption certificate or all the new text end 211.32 new text begin relevant information required by section 297A.72, subdivision 2, within the time provided new text end 211.33 new text begin in clause (1), within 120 days after a request for substantiation by the commissioner, new text end 211.34 new text begin the seller either: new text end 212.1     new text begin (i) obtains in good faith a fully completed exemption certificate or all the relevant new text end 212.2 new text begin information required by section 297A.72, subdivision 2, from the purchaser; or new text end 212.3     new text begin (ii) proves by other means that the transaction was not subject to tax. new text end 212.4     new text begin (c) Notwithstanding paragraph (b), new text end relief from liability does not apply to a seller who new text begin : new text end 212.5     new text begin (1) new text end fraudulently fails to collect the tax new text begin ; new text end or 212.6     new text begin (2) new text end solicits purchasers to participate in the unlawful claim of an exemption. If a 212.7seller claiming that certain sales are exempt is not in possession of the required exemption 212.8certificates within 60 days after receiving written notice from the commissioner that the 212.9certificates are required, deductions claimed by the seller that required delivery of the 212.10certificates must be disallowed. If the certificates are delivered to the commissioner within 212.11the 60-day period, the commissioner may verify the reason or basis for the exemption 212.12claimed in the certificates before allowing any deductions. A deduction must not be 212.13granted on the basis of certificates delivered to the commissioner after the 60-day period. 212.14    (c) new text begin (d) new text end A purchaser of tangible personal property or any items listed in section 212.15297A.63 that are shipped or brought to Minnesota by the purchaser has the burden 212.16of proving that the property was not purchased from a retailer for storage, use, or 212.17consumption in Minnesota. 212.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 212.19 new text begin or after January 1, 2008. new text end 212.20    Sec. 21. Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read: 212.21    Subd. 3. Defined telecommunications services sourcing. The sale of the following 212.22telecommunication services shall be sourced to each level of taxing jurisdiction in 212.23paragraphs (a) to (d). 212.24    (a) A sale of mobile telecommunications services, other than air-to-ground 212.25radiotelephone service and prepaid calling service, is sourced to the customer's place of 212.26primary use as required by the Mobile Telecommunications Sourcing Act. 212.27    (b) A sale of postpaid calling service is sourced to the origination point of the 212.28telecommunications signal as first identified by either: 212.29    (1) the seller's telecommunications system; or 212.30    (2) information received by the seller from its service provider, where the system 212.31used to transport such signals is not that of the seller. 212.32    (c) A sale of prepaid calling service new text begin or prepaid wireless calling service new text end is sourced in 212.33accordance with section 297A.668, subdivision 2. However, in the case of a sale of mobile 212.34telecommunications service that is a prepaid telecommunications new text begin wireless calling new text end service, 213.1the rule provided in section 297A.668, subdivision 2, paragraph (f), shall include as an 213.2option the location associated with the mobile telephone number. 213.3    (d) A sale of a private communication service is sourced as follows: 213.4    (1) service for a separate charge related to a customer channel termination point is 213.5sourced to each level of jurisdiction in which the customer channel termination point 213.6is located; 213.7    (2) service where all customer termination points are located entirely within one 213.8jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer 213.9channel termination points are located; 213.10    (3) service for segments of a channel between two customer channel termination 213.11points located in different jurisdictions and which segment of channel are separately 213.12charged is sourced 50 percent in each level of jurisdiction in which the customer channel 213.13termination points are located; and 213.14    (4) service for segments of a channel located in more than one jurisdiction or 213.15levels of jurisdiction and which segments are not separately billed is sourced in each 213.16jurisdiction based on the percentage determined by dividing the number of customer 213.17channel termination points in the jurisdiction by the total number of customer channel 213.18termination points. 213.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 213.20 new text begin or after January 1, 2008. new text end 213.21    Sec. 22. Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to 213.22read: 213.23    Subd. 13. Postpaid calling service. "Postpaid calling service," for purposes of 213.24this section, means the telecommunications service obtained by making a payment 213.25on a call-by-call basis either through the use of a credit card or payment mechanism 213.26such as a bank card, travel card, credit card, or debit card, or by a charge made to 213.27a telephone number that is not associated with the origination or termination of the 213.28telecommunications service. A postpaid calling service includes a telecommunications 213.29service new text begin , except a prepaid wireless calling service, new text end that would be a prepaid calling service 213.30except it is not exclusively a telecommunication service. 213.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 213.32 new text begin or after January 1, 2008. new text end 214.1    Sec. 23. Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to 214.2read: 214.3    Subd. 14. Prepaid calling service. "Prepaid calling service," for purposes of this 214.4section, means new text begin a telecommunications service that: new text end 214.5     new text begin (1) provides new text end the right to access exclusively telecommunications services, which new text begin ; new text end 214.6     new text begin (2) new text end must be paid for in advance and which new text begin ; new text end 214.7     new text begin (3) new text end enables the origination of calls using an access number or authorization code, 214.8whether manually or electronically dialed, new text begin ; new text end and that 214.9     new text begin (4) new text end is sold in predetermined units or dollars of which the number declines with 214.10use in a known amount. 214.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 214.12    Sec. 24. Minnesota Statutes 2006, section 297A.669, is amended by adding a 214.13subdivision to read: 214.14     new text begin Subd. 14a. new text end new text begin Prepaid wireless calling service. new text end new text begin "Prepaid wireless calling service," for new text end 214.15 new text begin purposes of this section, means a telecommunications service that: new text end 214.16     new text begin (1) provides the right to utilize mobile wireless service as well as other new text end 214.17 new text begin nontelecommunications services, including the download of digital products delivered new text end 214.18 new text begin electronically, content, and ancillary services; new text end 214.19     new text begin (2) must be paid for in advance; and new text end 214.20     new text begin (3) is sold in predetermined units or dollars of which the number declines with new text end 214.21 new text begin use in a known amount. new text end 214.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 214.23 new text begin or after January 1, 2008. new text end 214.24    Sec. 25. Minnesota Statutes 2006, section 297A.669, is amended by adding a 214.25subdivision to read: 214.26     new text begin Subd. 17. new text end new text begin Ancillary service. new text end new text begin The sale of an ancillary service is sourced to the new text end 214.27 new text begin customer's place of primary use. new text end 214.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 214.29 new text begin or after January 1, 2008. new text end 214.30    Sec. 26. Minnesota Statutes 2006, section 297A.67, subdivision 7, is amended to read: 214.31    Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical 214.32devices are exempt: 215.1    (1) drugs for human use, including over-the-counter drugs; 215.2    (2) single-use finger-pricking devices for the extraction of blood and other single-use 215.3devices and single-use diagnostic agents used in diagnosing, monitoring, or treating 215.4diabetes; 215.5    (3) insulin and medical oxygen for human use, regardless of whether prescribed 215.6or sold over the counter; 215.7    (4) prosthetic devices; 215.8    (5) durable medical equipment for home use only; 215.9    (6) mobility enhancing equipment; and 215.10    (7) prescription corrective eyeglasses. new text begin ; and new text end 215.11     new text begin (8) kidney dialysis equipment, including repair and replacement parts. new text end 215.12    (b) For purposes of this subdivision: 215.13    (1) "Drug" means a compound, substance, or preparation, and any component of 215.14a compound, substance, or preparation, other than food and food ingredients, dietary 215.15supplements, or alcoholic beverages that is: 215.16    (i) recognized in the official United States Pharmacopoeia, official Homeopathic 215.17Pharmacopoeia of the United States, or official National Formulary, and supplement 215.18to any of them; 215.19    (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention 215.20of disease; or 215.21    (iii) intended to affect the structure or any function of the body. 215.22    (2) "Durable medical equipment" means equipment, including repair and 215.23replacement parts, but not including mobility enhancing equipment, that: 215.24    (i) can withstand repeated use; 215.25    (ii) is primarily and customarily used to serve a medical purpose; 215.26    (iii) generally is not useful to a person in the absence of illness or injury; and 215.27    (iv) is not worn in or on the body. 215.28    (3) "Mobility enhancing equipment" means equipment, including repair and 215.29replacement parts, but not including durable medical equipment, that: 215.30    (i) is primarily and customarily used to provide or increase the ability to move from 215.31one place to another and that is appropriate for use either in a home or a motor vehicle; 215.32    (ii) is not generally used by persons with normal mobility; and 215.33    (iii) does not include any motor vehicle or equipment on a motor vehicle normally 215.34provided by a motor vehicle manufacturer. 215.35    (4) "Over-the-counter drug" means a drug that contains a label that identifies the 215.36product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The 216.1label must include a "drug facts" panel or a statement of the active ingredients with a list of 216.2those ingredients contained in the compound, substance, or preparation. Over-the-counter 216.3drugs do not include grooming and hygiene products, regardless of whether they otherwise 216.4meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions, 216.5shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens. 216.6    (5) "Prescribed" and "prescription" means a direction in the form of an order, 216.7formula, or recipe issued in any form of oral, written, electronic, or other means of 216.8transmission by a duly licensed health care professional. 216.9    (6) "Prosthetic device" means a replacement, corrective, or supportive device, 216.10including repair and replacement parts, worn on or in the body to: 216.11    (i) artificially replace a missing portion of the body; 216.12    (ii) prevent or correct physical deformity or malfunction; or 216.13    (iii) support a weak or deformed portion of the body. 216.14Prosthetic device does not include corrective eyeglasses. 216.15     new text begin (7) "Kidney dialysis equipment" means equipment that: new text end 216.16     new text begin (i) is used to remove waste products that build up in the blood when the kidneys are new text end 216.17 new text begin not able to do so on their own; and new text end 216.18     new text begin (ii) can withstand repeated use, including multiple use by a single patient. new text end 216.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 216.20    Sec. 27. Minnesota Statutes 2006, section 297A.67, subdivision 8, is amended to read: 216.21    Subd. 8. Clothing. (a) Clothing is exempt. For purposes of this subdivision, 216.22"clothing" means all human wearing apparel suitable for general use. 216.23    (b) Clothing includes, but is not limited to, aprons, household and shop; athletic 216.24supporters; baby receiving blankets; bathing suits and caps; beach capes and coats; belts 216.25and suspenders; boots; coats and jackets; costumes; children and adult diapers, including 216.26disposable; ear muffs; footlets; formal wear; garters and garter belts; girdles; gloves and 216.27mittens for general use; hats and caps; hosiery; insoles for shoes; lab coats; neckties; 216.28overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes and shoe laces; 216.29slippers; sneakers; socks and stockings; steel-toed boots; underwear; uniforms, athletic 216.30and nonathletic; and wedding apparel. 216.31    (c) Clothing does not include the following: 216.32    (1) belt buckles sold separately; 216.33    (2) costume masks sold separately; 216.34    (3) patches and emblems sold separately; 217.1    (4) sewing equipment and supplies, including but not limited to, knitting needles, 217.2patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles; 217.3    (5) sewing materials that become part of clothing, including but not limited to, 217.4buttons, fabric, lace, thread, yarn, and zippers; 217.5    (6) clothing accessories or equipment; 217.6    (7) sports or recreational equipment; and 217.7    (8) protective equipment. 217.8Clothing also does not include apparel made from fur if a uniform definition of "apparel 217.9made from fur" is developed by the member states of the Streamlined Sales and Use Tax 217.10Agreement new text begin "fur clothing" as defined in section 297A.61, subdivision 46 new text end . 217.11    For purposes of this subdivision, "clothing accessories or equipment" means 217.12incidental items worn on the person or in conjunction with clothing. Clothing accessories 217.13and equipment include, but are not limited to, briefcases; cosmetics; hair notions, including 217.14barrettes, hair bows, and hairnets; handbags; handkerchiefs; jewelry; nonprescription 217.15sunglasses; umbrellas; wallets; watches; and wigs and hairpieces. "Sports or recreational 217.16equipment" means items designed for human use and worn in conjunction with an athletic 217.17or recreational activity that are not suitable for general use. Sports and recreational 217.18equipment includes, but is not limited to, ballet and tap shoes; cleated or spiked athletic 217.19shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf 217.20gloves; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller 217.21and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins. 217.22"Protective equipment" means items for human wear and designed as protection of the 217.23wearer against injury or disease or as protection against damage or injury of other persons 217.24or property but not suitable for general use. Protective equipment includes, but is not 217.25limited to, breathing masks; clean room apparel and equipment; ear and hearing protectors; 217.26face shields; finger guards; hard hats; helmets; paint or dust respirators; protective gloves; 217.27safety glasses and goggles; safety belts; tool belts; and welders gloves and masks. 217.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on or new text end 217.29 new text begin after July 1, 2007. new text end 217.30    Sec. 28. Minnesota Statutes 2006, section 297A.67, subdivision 9, is amended to read: 217.31    Subd. 9. Baby products. new text begin Breast pumps, new text end baby bottles and nipples, pacifiers, teething 217.32rings, and infant syringes are exempt. 217.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on or new text end 217.34 new text begin after the day following final enactment. new text end 218.1    Sec. 29. Minnesota Statutes 2006, section 297A.68, subdivision 11, is amended to read: 218.2    Subd. 11. Advertising materials. Materials designed to advertise and promote the 218.3sale of merchandise or services are exempt if these materials are mailed or transferred to a 218.4person outside the state for use solely outside the state. Mailing and reply envelopes and 218.5cards new text begin and other shipping materials including, but not limited to, boxes, labels, containers, new text end 218.6 new text begin and banding, new text end used exclusively in connection with these advertising and promotional 218.7materials are included in this exemption. The exemption applies regardless of where the 218.8mailing occurs. The storage of these materials in the state for the purpose of subsequently 218.9shipping or otherwise transferring the material out of state is also exempt if the other 218.10conditions in this subdivision are met. new text begin For purposes of this subdivision, materials that have new text end 218.11 new text begin a primary purpose other than advertising, such as fulfilling a legal obligation or furnishing new text end 218.12 new text begin nonadvertising information, are not materials designed to advertise and promote the sale new text end 218.13 new text begin of merchandise or services even if they do include advertising content. new text end 218.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 218.15    Sec. 30. Minnesota Statutes 2006, section 297A.68, subdivision 16, is amended to read: 218.16    Subd. 16. Packing materials. Packing materials used to pack and ship household 218.17goods new text begin and that are provided to and remain with the customer of a for-hire carrier new text end are 218.18exempt if the ultimate destination of the goods is outside Minnesota and if the goods 218.19 new text begin packing materials new text end are not later returned to a point within Minnesota, except in the course 218.20of interstate commerce. new text begin This exemption does not apply to tools, equipment, pads, or new text end 218.21 new text begin accessories owned or leased by the for-hire carrier. new text end 218.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 218.23 new text begin June 30, 2007. new text end 218.24    Sec. 31. Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read: 218.25    Subd. 35. Telecommunications new text begin , cable television, and direct satellite new text end equipment. 218.26    (a) Telecommunications new text begin , cable television, or direct satellite new text end machinery and equipment 218.27purchased or leased for use directly by a telecommunications new text begin , cable television, or new text end 218.28 new text begin direct satellite new text end service provider primarily in the provision of telecommunications new text begin , cable new text end 218.29 new text begin television, or direct satellite new text end services that are ultimately to be sold at retail are exempt, 218.30regardless of whether purchased by the owner, a contractor, or a subcontractor. 218.31    (b) For purposes of this subdivision, "telecommunications new text begin , cable television, or direct new text end 218.32 new text begin satellite new text end machinery and equipment" includes, but is not limited to: 219.1    (1) machinery, equipment, and fixtures utilized in receiving, initiating, 219.2amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring 219.3telecommunications new text begin , cable television, or direct satellite new text end services, such as computers, 219.4transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items 219.5performing comparable functions; 219.6    (2) machinery, equipment, and fixtures used in the transportation of 219.7telecommunications new text begin , cable television, or direct satellite new text end services, radio transmitters and 219.8receivers, satellite equipment, microwave equipment, and other transporting media, but 219.9not wire, cable, fiber, poles, or conduit; 219.10    (3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or 219.11enable the machinery in clauses (1) and (2) to accomplish its intended function, such as 219.12auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning 219.13equipment necessary to the operation of the telecommunications new text begin , cable television, or direct new text end 219.14 new text begin satellite new text end equipment; and software necessary to the operation of the telecommunications new text begin , new text end 219.15 new text begin cable television, or direct satellite new text end equipment; and 219.16    (4) repair and replacement parts, including accessories, whether purchased as spare 219.17parts, repair parts, or as upgrades or modifications to qualified machinery or equipment. 219.18    (c) For purposes of this subdivision, "telecommunications services" means 219.19telecommunications services as defined in section 297A.61, subdivision 24, paragraphs 219.20(a), (c), and (d). 219.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 219.22 new text begin or after January 1, 2008. new text end 219.23    Sec. 32. Minnesota Statutes 2006, section 297A.69, subdivision 2, is amended to read: 219.24    Subd. 2. Materials consumed in agricultural production. Materials stored, used, 219.25or consumed in agricultural production of personal property intended to be sold ultimately 219.26at retail are exempt, whether or not the item becomes an ingredient or constituent part 219.27of the property produced. Materials that qualify for this exemption include, but are not 219.28limited to, the following: 219.29    (1) feeds, seeds, trees, fertilizers, and herbicides, including when purchased for use 219.30by farmers in a federal or state farm or conservation program; 219.31    (2) materials sold to a veterinarian to be used or consumed in the care, medication, 219.32and treatment of agricultural production animals and horses; 219.33    (3) chemicals, including chemicals used for cleaning food processing machinery 219.34and equipment; 220.1    (4) materials, including chemicals, fuels, and electricity purchased by persons 220.2engaged in agricultural production to treat waste generated as a result of the production 220.3process; 220.4    (5) fuels, electricity, gas, and steam used or consumed in the production process, 220.5except that new text begin including new text end electricity, gas, or steam used for space heating, cooling, or lighting 220.6is exempt if (i) it is in excess of the average climate control or lighting for the production 220.7area, and (ii) it is necessary to produce that particular product new text begin of facilities housing new text end 220.8 new text begin agricultural animals new text end ; 220.9    (6) petroleum products and lubricants; 220.10    (7) packaging materials, including returnable containers used in packaging food and 220.11beverage products; and 220.12    (8) accessory tools and equipment that are separate detachable units with an ordinary 220.13useful life of less than 12 months used in producing a direct effect upon the product. 220.14Machinery, equipment, implements, tools, accessories, appliances, contrivances, and 220.15furniture and fixtures, except those listed in this clause are not included within this 220.16exemption. 220.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 220.18    Sec. 33. Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read: 220.19    Subd. 7. Hospitals and outpatient surgical centers. (a) Sales, except for those 220.20listed in paragraph (c), to a hospital are exempt, if the items purchased are used in 220.21providing hospital services. For purposes of this subdivision, "hospital" means a hospital 220.22organized and operated for charitable purposes within the meaning of section 501(c)(3) of 220.23the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction, 220.24and "hospital services" are services authorized or required to be performed by a "hospital" 220.25under chapter 144. 220.26    (b) Sales, except for those listed in paragraph (c), to an outpatient surgical center 220.27are exempt, if the items purchased are used in providing outpatient surgical services. For 220.28purposes of this subdivision, "outpatient surgical center" means an outpatient surgical 220.29center organized and operated for charitable purposes within the meaning of section 220.30501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other 220.31jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means: 220.32(1) services authorized or required to be performed by an outpatient surgical center under 220.33chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means 220.34health services furnished to a person whose medical condition is sufficiently acute to 221.1require treatment unavailable through, or inappropriate to be provided by, a clinic or 221.2physician's office, but not so acute as to require treatment in a hospital emergency room. 221.3    (c) This exemption does not apply to the following products and services: 221.4    (1) purchases made by a clinic, physician's office, or any other medical facility not 221.5operating as a hospital or outpatient surgical center, even though the clinic, office, or 221.6facility may be owned and operated by a hospital or outpatient surgical center; 221.7    (2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and 221.8prepared food, candy, and soft drinks; 221.9    (3) building and construction materials used in constructing buildings or facilities 221.10that will not be used principally by the hospital or outpatient surgical center; 221.11    (4) building, construction, or reconstruction materials purchased by a contractor 221.12or a subcontractor as a part of a lump-sum contract or similar type of contract with a 221.13guaranteed maximum price covering both labor and materials for use in the construction, 221.14alteration, or repair of a hospital or outpatient surgical center; or 221.15    (5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5. 221.16    (d) A limited liability company also qualifies for exemption under this subdivision if 221.17(1) it consists of a sole member that would qualify for the exemption, and (2) the items 221.18purchased qualify for the exemption. 221.19     new text begin (e) An entity that contains both a hospital and a nonprofit unit may claim this new text end 221.20 new text begin exemption on purchases made for both the hospital and nonprofit unit provided that: new text end 221.21     new text begin (1) the nonprofit unit would have qualified for exemption under subdivision 4; and new text end 221.22     new text begin (2) the items purchased would have qualified for the exemption. new text end 221.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 221.24    Sec. 34. Minnesota Statutes 2006, section 297A.70, is amended by adding a 221.25subdivision to read: 221.26     new text begin Subd. 18. new text end new text begin Private communication service for State Lottery. new text end new text begin Private new text end 221.27 new text begin communication service, as defined in section 297A.61, subdivision 26, is exempt if the new text end 221.28 new text begin service is purchased by an agent acting on behalf of the State Lottery. new text end 221.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made on new text end 221.30 new text begin or after January 1, 2008. new text end 221.31    Sec. 35. Minnesota Statutes 2006, section 297A.72, is amended to read: 221.32297A.72 EXEMPTION CERTIFICATES. 222.1    Subd. 2. Content and form of exemption certificate. An exemption certificate 222.2must be substantially in the form prescribed by the commissioner and new text begin . To be fully new text end 222.3 new text begin completed, the exemption certificate must new text end : 222.4    (1) new text begin either new text end be signed by the purchaser new text begin if it is a paper form, new text end or meet the requirements 222.5of section 270C.304 new text begin if in electronic form new text end ; 222.6    (2) bear the name and address of the purchaser; and 222.7    (3) indicate the sales tax account new text begin identification new text end number, if any, issued to the 222.8purchaser. new text begin as follows: new text end 222.9     new text begin (i) the purchaser's Minnesota tax identification number; new text end 222.10     new text begin (ii) if the purchaser does not have a Minnesota tax identification number, then the new text end 222.11 new text begin purchaser's state tax identification number that is issued by a state other than Minnesota, new text end 222.12 new text begin and the name of that state; new text end 222.13     new text begin (iii) if the purchaser does not have an identification number described in either item new text end 222.14 new text begin (i) or (ii), then the purchaser's federal Employer Identification Number; or new text end 222.15     new text begin (iv) if the purchaser does not have an identification number described in item (i), (ii), new text end 222.16 new text begin or (iii), then either the number of the purchaser's state-issued driver's license, if valid in new text end 222.17 new text begin the state of issue, or if the purchaser does not have a driver's license, a valid state-issued new text end 222.18 new text begin identification number, and the name of the state of issue; new text end 222.19     new text begin (4) indicate the purchaser's type of business, using a business-type coding system new text end 222.20 new text begin prescribed by the commissioner; and new text end 222.21     new text begin (5) indicate the reason for the exemption, using an exemption reason coding system new text end 222.22 new text begin prescribed by the commissioner. new text end 222.23     new text begin Subd. 3. new text end new text begin Purchaser requirement. new text end new text begin A blanket exemption certificate is an exemption new text end 222.24 new text begin certificate used for continuing future purchases. A purchaser using a blanket exemption new text end 222.25 new text begin certificate must update it as needed to accurately reflect the information that is required new text end 222.26 new text begin under subdivision 2. new text end 222.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 222.28    Sec. 36. new text begin [297A.8155] LIQUOR REPORTING REQUIREMENTS; PENALTY. new text end 222.29     new text begin A person who sells liquor, as defined in section 295.75, subdivision 1, in Minnesota new text end 222.30 new text begin to a retailer that sells liquor, shall file with the commissioner an annual informational new text end 222.31 new text begin report, in the form and manner prescribed by the commissioner, indicating the volume of new text end 222.32 new text begin liquor sold to each retailer in the previous calendar year. The report must be filed on or new text end 222.33 new text begin before February 28 of each calendar year beginning in 2008. A person failing to file this new text end 222.34 new text begin report is subject to the penalty imposed under Minnesota Statutes, section 289A.60. new text end 223.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 223.2    Sec. 37. Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read: 223.3    Subd. 2. Payment of tax. (a) Persons who are registered as retailers may make 223.4purchases in this state or import property into this state without payment of the sales or use 223.5taxes imposed by this chapter at the time of purchase or importation, if the purchases or 223.6importations come within the provisions of this section and are made in strict compliance 223.7with the rules of the commissioner. 223.8    (b) A person described in subdivision 1 may elect to pay directly to the commissioner 223.9any sales or use tax that may be due under this chapter for the acquisition of mobile 223.10transportation equipment and parts and accessories attached or to be attached to such 223.11equipment registered under section 168.187. 223.12    (c) The total cost of such equipment and parts and accessories attached or to be 223.13attached to such equipment must be multiplied by a fraction. The numerator of the fraction 223.14is the Minnesota mileage as reported on the current pro rata application provided for in 223.15section 168.187 and the denominator of the fraction is the total mileage reported on the 223.16current pro rata registration application. The amount so determined must be multiplied by 223.17the tax rate to obtain the tax due. 223.18In computing the tax under this section "sales price" does not include the amount of any 223.19tax, except any manufacturer's or importer's excise tax, imposed by the United States 223.20upon or with respect to retail sales, whether new text begin taxes new text end imposed new text begin directly new text end on the retailer or the 223.21consumer new text begin that are separately stated on the invoice, bill of sale, or similar document given new text end 223.22 new text begin to the purchaser new text end . 223.23    (d) A retailer covered by this section shall make a return and remit to the 223.24commissioner the tax due for the preceding calendar month in accordance with sections 223.25289A.11 and 289A.20, subdivision 4. 223.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 223.27    Sec. 38. Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read: 223.28    Subdivision 1. Ordinary course of business. Except as provided in this section, 223.29motor vehicles purchased new text begin solely new text end for resale in the ordinary course of business by any motor 223.30vehicle dealer, as defined in section 168.011, subdivision 21, who is licensed under section 223.31168.27, subdivision 2 or 3, new text begin including vehicles new text end which bear dealer plates as authorized by 223.32section 168.27, subdivision 16, shall be exempt from the provisions of this chapter. 223.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 224.1    Sec. 39. Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read: 224.2    Subd. 6. Sales tax exemption; equipment; construction materials. (a) The gross 224.3receipts from the sale of machinery and equipment and repair parts are exempt from 224.4taxation under chapter 297A, if the machinery and equipment: 224.5    (1) are used in connection with a trade or business; 224.6    (2) are placed in service in a city that is authorized to designate a zone under section 224.7469.1731 , regardless of whether the machinery and equipment are used in a zone; and 224.8    (3) have a useful life of 12 months or more. 224.9    (b) The gross receipts from the sale of construction materials are exempt, if they are 224.10used to construct: 224.11    (1) a facility for use in a trade or business located in a city that is authorized to 224.12designate a zone under section 469.1731, regardless of whether the facility is located in a 224.13zone; or 224.14    (2) housing that is located in a zone. 224.15The exemptions under this paragraph apply regardless of whether the purchase is made by 224.16the owner, the user, or a contractor. 224.17    (c) A purchaser may claim an exemption under this subdivision for tax on the 224.18purchases up to, but not exceeding: 224.19    (1) the amount of the tax credit certificates received from the city, less 224.20    (2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and 224.21section 469.1732, subdivision 2. 224.22    (d) The tax on sales of items exempted under this subdivision shall be imposed and 224.23collected as if the applicable rate under section 297A.62 applied. Upon application by the 224.24purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall 224.25be paid to the purchaser. The application must include sufficient information to permit 224.26the commissioner to verify the sales tax paid and the eligibility of the claimant to receive 224.27the credit. No more than two applications for refunds may be filed under this subdivision 224.28in a calendar year. The provisions of section 289A.40 apply to the refunds payable 224.29under this subdivision. There is annually appropriated to the commissioner of revenue 224.30the amount required to make the refunds, which must be deducted from the amount of 224.31the city's allocation under section 469.169, subdivision 12, that remains available and its 224.32limitation under section 469.1735. 224.33     new text begin (e) new text end The amount to be refunded shall bear interest at the rate in section 270C.405 224.34from the date new text begin 90 days after new text end the refund claim is filed with the commissioner. 225.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for refund claims filed on or after new text end 225.2 new text begin July 1, 2007. new text end 225.3    Sec. 40. new text begin FUR TAX PAYMENTS. new text end 225.4     new text begin (a) Furriers must file the annual return, required by Minnesota Statutes, section new text end 225.5 new text begin 295.60, subdivision 5, which otherwise would be due March 15, 2008, by September new text end 225.6 new text begin 15, 2007. new text end 225.7     new text begin (b) If a furrier is required by Minnesota Statutes, section 295.60, subdivision 3, to new text end 225.8 new text begin make installments of quarterly estimates, then the furrier shall make the last installment by new text end 225.9 new text begin July 15, 2007. new text end 225.10 new text begin EFFECTIVE DATE. new text end new text begin Effective July 1, 2007, for sales and purchases made prior to new text end 225.11 new text begin July 1, 2007. new text end 225.12    Sec. 41. new text begin REPEALER. new text end 225.13 new text begin (a) new text end new text begin Minnesota Statutes 2006, section 295.60, new text end new text begin is repealed. new text end 225.14 new text begin (b) new text end new text begin Minnesota Statutes 2006, section 297A.61, subdivision 20, new text end new text begin is repealed. new text end 225.15 new text begin (c) new text end new text begin Minnesota Statutes 2006, section 297A.668, subdivision 6, new text end new text begin is repealed. new text end 225.16 new text begin (d) new text end new text begin Minnesota Statutes 2006, section 297A.67, subdivision 22, new text end new text begin is repealed. new text end 225.17 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) is effective for sales and purchases made on new text end 225.18 new text begin or after July 1, 2007; paragraph (b) is effective for sales and purchases made on or after new text end 225.19 new text begin January 1, 2008; and paragraphs (c) and (d) are effective the day following final enactment. new text end 225.20ARTICLE 12 225.21DEPARTMENT PROPERTY TAXES 225.22    Section 1. Minnesota Statutes 2006, section 270.071, subdivision 7, is amended to read: 225.23    Subd. 7. Flight property. "Flight property" means all aircraft and flight equipment 225.24used in connection therewith, including spare flight equipment. new text begin Flight property also new text end 225.25 new text begin includes computers and computer software used in operating, controlling, or regulating new text end 225.26 new text begin aircraft and flight equipment. new text end 225.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 225.28    Sec. 2. Minnesota Statutes 2006, section 270.072, subdivision 2, is amended to read: 225.29    Subd. 2. Assessment of flight property. The Flight property of all new text begin that is owned new text end 225.30 new text begin by, or is leased, loaned, or otherwise made available to an new text end airline companies new text begin company new text end 226.1operating in Minnesota shall be assessed and appraised annually by the commissioner 226.2with reference to its value on January 2 of the assessment year in the manner prescribed 226.3by sections 270.071 to 270.079. Aircraft with a gross weight of less than 30,000 pounds 226.4and used on intermittent or irregularly timed flights shall be excluded from the provisions 226.5of sections 270.071 to 270.079. 226.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 226.7    Sec. 3. Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read: 226.8    Subd. 3. Report by airline company. new text begin Each year, on or before July 1, new text end every airline 226.9company engaged in air commerce in this state shall file with the commissioner on or 226.10before the time fixed by the commissioner a report under oath setting forth specifically 226.11the information prescribed by the commissioner to enable the commissioner to make the 226.12assessment required in sections 270.071 to 270.079, unless the commissioner determines 226.13that the airline company or person should be excluded from filing because its activities do 226.14not constitute air commerce as defined herein. A penalty of five percent of the tax being 226.15assessed is imposed on a late filing of the annual report. If the report is not filed within 226.1630 days, an additional penalty of five percent of the assessed tax is imposed for each 226.17additional 30 days or fraction of 30 days until the return is filed. The penalty imposed 226.18under this section must not exceed the lesser of $25,000 or 25 percent of the assessed tax. 226.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning January 2, 2007, for taxes new text end 226.20 new text begin payable in 2008 and thereafter. new text end 226.21    Sec. 4. Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read: 226.22    Subd. 6. Airflight property tax lien. The tax imposed under sections 270.071 to 226.23270.079 is a lien on all real and personal property within this state of the airline company 226.24in whose name the property is assessed. For purposes of sections and , 226.25the date of assessment for the tax imposed under sections to is new text begin The lien new text end 226.26 new text begin attaches on new text end January 2 of each year for the taxes payable in the following year. 226.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning January 2, 2007, for taxes new text end 226.28 new text begin payable in 2008 and thereafter. new text end 226.29    Sec. 5. new text begin [270.0725] PENALTIES. new text end 226.30     new text begin Subdivision 1. new text end new text begin Penalty for late filing. new text end new text begin If an airline company does not file its annual new text end 226.31 new text begin report by the date designated in section 270.072, subdivision 3, a penalty of five percent new text end 226.32 new text begin of the tax being assessed is imposed on that company. On August 1, and on the first day new text end 227.1 new text begin of each succeeding calendar month, an additional five percent penalty is imposed if the new text end 227.2 new text begin report has not yet been filed. For each airline company, the penalties imposed under new text end 227.3 new text begin this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of new text end 227.4 new text begin the assessed tax. new text end 227.5     new text begin Subd. 2. new text end new text begin Penalty for repeated instances of late filing. new text end new text begin If there is a pattern of new text end 227.6 new text begin repeated failures by an airline company to timely file the report required by this section, a new text end 227.7 new text begin penalty of ten percent of the tax being assessed is imposed on that company. new text end 227.8     new text begin Subd. 3. new text end new text begin Penalty for frivolous report. new text end new text begin If an airline company files a frivolous annual new text end 227.9 new text begin report, a penalty of 25 percent of the tax being assessed is imposed on that company. A new text end 227.10 new text begin frivolous report under this section is a report that would fulfill the criteria for a frivolous new text end 227.11 new text begin return under section 289A.60, subdivision 7, notwithstanding the restriction in section new text end 227.12 new text begin 289A.01. In a proceeding involving the issue of whether or not an airline company is new text end 227.13 new text begin liable for this penalty, the burden of proof is on the commissioner. new text end 227.14     new text begin Subd. 4. new text end new text begin Penalty for fraudulent report. new text end new text begin If an airline company files a false or new text end 227.15 new text begin fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50 new text end 227.16 new text begin percent of the tax being assessed is imposed on that company. new text end 227.17     new text begin Subd. 5. new text end new text begin Penalties added to tax. new text end new text begin Penalties imposed under this section are added to new text end 227.18 new text begin the tax and collected as a part of it. new text end 227.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for annual reports due on or after new text end 227.20 new text begin July 1, 2007. new text end 227.21    Sec. 6. new text begin [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS. new text end 227.22     new text begin In addition to the powers granted to the commissioner in this chapter, and in order to new text end 227.23 new text begin determine net tax capacities and issue notices of net tax capacity and tax under sections new text end 227.24 new text begin 270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and new text end 227.25 new text begin 270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes new text end 227.26 new text begin an airline company. new text end 227.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning January 2, 2007, for taxes new text end 227.28 new text begin payable in 2008 and thereafter. new text end 227.29    Sec. 7. Minnesota Statutes 2006, section 270.074, subdivision 3, is amended to read: 227.30    Subd. 3. Tax capacity. (a) new text begin The net tax capacity of new text end the flight property of every airline 227.31company shall have a tax capacity of new text begin is new text end 70 percent of the value thereof apportioned to this 227.32state under subdivision 1, except that new text begin the net tax capacity of new text end quiet aircraft shall have a 227.33tax capacity of new text begin is new text end 40 percent of the value determined under subdivision 1. Quiet aircraft 228.1shall include new text begin "Quiet aircraft" means new text end turboprops and aircraft defined as stage III new text begin or IV new text end by 228.2the Federal Aeronautics Administration. If, in the opinion of the commissioner, other 228.3aircraft may be qualified as quiet aircraft, the commissioner may adopt rules providing 228.4additional qualifications. 228.5    (b) The flight property of an airline company that owns or leases aircraft the majority 228.6of which are turboprops, and which provides, during six months or more of the year that 228.7taxes are levied, scheduled passenger service to three or more airports inside or outside of 228.8this state that serve small or medium sized communities, shall be assessed at 50 percent of 228.9the assessment percentage otherwise set by paragraph (a). 228.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning January 2, 2007, for taxes new text end 228.11 new text begin payable in 2008 and thereafter. new text end 228.12    Sec. 8. Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read: 228.13    Subdivision 1. Appeal. Any airline company against which a tax has been imposed 228.14under sections to shall have the right to appeal within 60 days from the 228.15date of notice of the levy of the tax new text begin The notices of net tax capacity and of tax required new text end 228.16 new text begin under section 270.075, subdivision 2, are orders of the commissioner. These orders must new text end 228.17 new text begin be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject new text end 228.18 new text begin to administrative review under section 270C.35. These orders may be appealed new text end to the Tax 228.19Court in the manner provided by law new text begin in section 271.06 for appealing official orders of new text end 228.20 new text begin the commissioner that do not deal with valuation, assessment, or taxation for property new text end 228.21 new text begin tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter new text end 228.22 new text begin 278 do not apply new text end . 228.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning January 2, 2007, for taxes new text end 228.24 new text begin payable in 2008 and thereafter. new text end 228.25    Sec. 9. Minnesota Statutes 2006, section 270.41, subdivision 1, is amended to read: 228.26    Subdivision 1. Creation; purpose; powers. A Board of Assessors is created. 228.27The board shall establish, conduct, review, supervise, coordinate, and approve courses 228.28in assessment practices, and establish criteria for determining assessor's qualifications. 228.29The board shall also consider other matters relating to assessment administration brought 228.30before it by the commissioner of revenue. The board may grant, renew, suspend, or revoke 228.31an assessor's license. 228.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 229.1    Sec. 10. Minnesota Statutes 2006, section 270.41, is amended by adding a subdivision 229.2to read: 229.3     new text begin Subd. 1a. new text end new text begin Definition. new text end new text begin For purposes of sections 270.41 to 270.50, "board" means new text end 229.4 new text begin the Board of Assessors. new text end 229.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 229.6    Sec. 11. Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read: 229.7    Subd. 2. Members. The board shall consist of nine members, who shall be 229.8appointed by the commissioner of revenue, in the manner provided herein. The members 229.9shall include: 229.10    (1) two from the Department of Revenue; 229.11    (2) two county assessors; 229.12    (3) two assessors who are not county assessors, one of whom shall be a township 229.13assessor; 229.14    (4) one from the private appraisal field holding a professional appraisal designation; 229.15and 229.16    (5) two public members as defined by section 214.02. 229.17    The appointment provided in clauses (2) and (3) may be made from two lists new text begin a list new text end 229.18of not less than three names each, one submitted to the commissioner of revenue by the 229.19Minnesota Association of Assessing Officers or its successor organization containing 229.20recommendations for the appointment of appointees described in clause new text begin clauses new text end (2), 229.21and one by the Minnesota Association of Assessors, Inc. or its successor organization 229.22containing recommendations for the appointees described in clause (3) new text begin and (3) new text end . The lists 229.23 new text begin list new text end must be submitted 30 days before the commencement of the term. In the case of a 229.24vacancy, a new list shall be furnished to the commissioner by the respective organization 229.25immediately. A member of the board who is no longer engaged in the capacity listed 229.26above new text begin that was the basis of appointment new text end is disqualified from membership in the board. 229.27    The board shall annually elect a chair and a secretary new text begin vice-chair new text end of the board. 229.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 229.29    Sec. 12. Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read: 229.30    Subd. 3. Licenses; refusal or revocation. The board may refuse to grant or renew, 229.31or may suspend or revoke, a license of an applicant or licensee for any of the following 229.32causes or acts: 229.33    (1) failure to complete required training; 230.1    (2) inefficiency or neglect of duty; 230.2    (3) "unprofessional conduct" which means knowingly neglecting to perform a duty 230.3required by law, or violation of the laws of this state relating to the assessment of property 230.4or unlawfully exempting property or knowingly and intentionally listing property on the 230.5tax list at substantially less than its market value or the level required by law in order to 230.6gain favor or benefit, or knowingly and intentionally misclassifying property in order to 230.7gain favor or benefit new text begin failure to comply with the Code of Conduct and Ethics for Licensed new text end 230.8 new text begin Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session new text end 230.9 new text begin chapter 3, article 1, section 38 new text end ; 230.10    (4) conviction of a crime involving moral turpitude; or 230.11    (5) any other cause or act that in the board's opinion warrants a refusal to issue 230.12or suspension or revocation of a license. 230.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 230.14    Sec. 13. Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read: 230.15    Subd. 5. Prohibited activity. An assessor, deputy assessor, assistant assessor, 230.16appraiser, new text begin A licensed assessor new text end or other person employed by an assessment jurisdiction 230.17or contracting with an assessment jurisdiction for the purpose of valuing or classifying 230.18property for property tax purposes is prohibited from making appraisals or analyses, 230.19accepting an appraisal assignment, or preparing an appraisal report as defined in section 230.2082B.02, subdivisions 2 to 5 , on any property within the assessment jurisdiction where the 230.21individual is employed or performing the duties of the assessor under contract. Violation 230.22of this prohibition shall result in immediate revocation of the individual's license to assess 230.23property for property tax purposes. This prohibition must not be construed to prohibit an 230.24individual from carrying out any duties required for the proper assessment of property 230.25for property tax purposes. If a formal resolution has been adopted by the governing body 230.26of a governmental unit, which specifies the purposes for which such work will be done, 230.27this prohibition does not apply to appraisal activities undertaken on behalf of and at the 230.28request of the governmental unit that has employed or contracted with the individual. 230.29The resolution may only allow appraisal activities which are related to condemnations, 230.30right-of-way acquisitions, or special assessments. 230.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 230.32    Sec. 14. Minnesota Statutes 2006, section 270.44, is amended to read: 230.33270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS. 231.1    The board shall charge the following fees: 231.2    (1) $105 for a senior accredited Minnesota assessor license; 231.3    (2) $80 for an accredited Minnesota assessor license; 231.4    (3) $65 for a certified Minnesota assessor specialist license; 231.5    (4) $55 for a certified Minnesota assessor license; 231.6    (5) $50 for a course challenge examination; 231.7    (6) new text begin (5) new text end $35 for grading a form appraisal; 231.8    (7) new text begin (6) new text end $60 for grading a narrative appraisal; 231.9    (8) new text begin (7) new text end $30 for a reinstatement fee; 231.10    (9) new text begin (8) new text end $25 for a record retention fee; new text begin and new text end 231.11    (10) new text begin (9) new text end $20 for an educational transcript; and new text begin . new text end 231.12    (11) $30 for all retests of board-sponsored educational courses. 231.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 231.14    Sec. 15. Minnesota Statutes 2006, section 270.45, is amended to read: 231.15270.45 DISPOSITION OF FEES. 231.16    All fees so established and collected shall be paid to the commissioner of finance for 231.17deposit in the general fund. The expenses of carrying out the provisions of sections 270.41 231.18to 270.53 shall be paid from appropriations made to the board of Assessors. 231.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 231.20    Sec. 16. Minnesota Statutes 2006, section 270.46, is amended to read: 231.21270.46 TRAINING COURSES, ESTABLISHMENT; OTHER COURSES, 231.22REGULATION. 231.23    The board shall establish new text begin review and approve new text end training courses on assessment 231.24practices and shall review and approve courses on assessment practices new text begin , techniques of new text end 231.25 new text begin assessment, and ethics new text end offered by schools, colleges and new text begin , new text end universities as well as courses that 231.26are offered by any units of government on techniques of assessment. Courses shall be 231.27established in various places throughout the state and be offered on regular intervals new text begin , units new text end 231.28 new text begin of government, and other entities new text end . 231.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 231.30    Sec. 17. Minnesota Statutes 2006, section 270.47, is amended to read: 231.31270.47 RULES. 232.1    The board shall establish the new text begin adopt new text end rules necessary to accomplish the purpose of 232.2section new text begin sections new text end 270.41 new text begin to 270.51 new text end , and shall establish criteria required of assessing officials 232.3in the state. Separate criteria may be established depending upon the responsibilities of the 232.4assessor. The board shall prepare and give examinations from time to time to determine 232.5whether assessing officials possess the necessary qualifications for performing the 232.6functions of the office. Such tests shall be given immediately upon completion of courses 232.7required by the board, or to persons who already possess the requisite qualifications under 232.8the rules of the board. new text begin An action of the board in refusing to grant or renew a license or in new text end 232.9 new text begin suspending or revoking a license is subject to review in accordance with chapter 14. new text end 232.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 232.11    Sec. 18. Minnesota Statutes 2006, section 270.48, is amended to read: 232.12270.48 LICENSURE OF QUALIFIED PERSONS. 232.13    The board shall new text begin may new text end license persons as possessing the necessary qualifications of an 232.14assessing official. Different levels of licensure may be established as to classes of property 232.15which assessors may be certified to assess at the discretion of the board. Every person, 232.16except a local or county assessor, regularly employed by the assessor to assist in making 232.17decisions regarding valuing and classifying property for assessment purposes shall be 232.18required to new text begin must new text end become licensed within three years of the date of employment. Licensure 232.19shall be required for local and county assessors as otherwise provided in sections 232.20to new text begin section 273.061 and rules adopted by the board new text end . 232.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 232.22    Sec. 19. Minnesota Statutes 2006, section 270.50, is amended to read: 232.23270.50 EMPLOYMENT OF LICENSED ASSESSORS. 232.24    No assessor shall be employed who has not been licensed as qualified by the board, 232.25provided the time to comply may be extended after application to the board upon a 232.26showing that licensed assessors are not available for employment. The board may license 232.27that a county or local assessor who has not received the training, but possesses the 232.28necessary qualifications for performing the functions of the office by the passage of an 232.29approved examination or may waive the examination if such person has demonstrated 232.30competence in performing the functions of the office for a period of time the board deems 232.31reasonable. The county or local assessing district shall assume the cost of training of its 232.32assessors in courses approved by the board for the purpose of obtaining the assessor's 232.33license to the extent of course fees, mileage, meals and lodging, and recognized travel 233.1expenses not paid by the state. If the governing body of any township or city fails to 233.2employ an assessor as required by sections to , the assessment shall be 233.3made by the county assessor. 233.4    In the case of cities incorporated or townships organized after April 11, 1974, except 233.5cities or towns located in Ramsey county or which have elected a county assessor system 233.6in accordance with section , the board shall allow the city or town 90 days from 233.7the date of incorporation or organization to employ a licensed assessor. 233.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 233.9    Sec. 20. Minnesota Statutes 2006, section 270C.306, is amended to read: 233.10270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR 233.11IDENTIFYING NUMBERS ON FORMS. 233.12    Notwithstanding the provisions of any other law new text begin except section 272.115 new text end , the 233.13commissioner may require that a form required to be filed with the commissioner include 233.14the Social Security number, federal employer identification number, or Minnesota 233.15taxpayer identification number of the taxpayer or applicant. 233.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2007. new text end 233.17    Sec. 21. Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read: 233.18    Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any 233.19penalty or interest that is imposed by a law administered by the commissioner as a result 233.20of the late payment of tax or late filing of a return, if the failure to timely pay the tax or 233.21failure to timely file the return is due to reasonable cause, or if the taxpayer is located 233.22in a presidentially declared disaster area. 233.23    (b) The commissioner shall abate any part of a penalty or additional tax charge 233.24under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 233.25advice given to the taxpayer in writing by an employee of the department acting in 233.26an official capacity, if the advice: 233.27    (1) was reasonably relied on and was in response to a specific written request of the 233.28taxpayer; and 233.29    (2) was not the result of failure by the taxpayer to provide adequate or accurate 233.30information. 233.31     new text begin (c) The commissioner may abate a penalty imposed under section 270.0725, new text end 233.32 new text begin subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline new text end 233.33 new text begin company is located in a presidentially declared disaster area. new text end 234.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2007. new text end 234.2    Sec. 22. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read: 234.3    Subd. 64. Job opportunity building zone property. (a) Improvements to real 234.4property, and personal property, classified under section 273.13, subdivision 24, and 234.5located within a job opportunity building zone, designated under section 469.314, are 234.6exempt from ad valorem taxes levied under chapter 275. 234.7    (b) Improvements to real property, and tangible personal property, of an agricultural 234.8production facility located within an agricultural processing facility zone, designated 234.9under section 469.314, is exempt from ad valorem taxes levied under chapter 275. 234.10    (c) For property to qualify for exemption under paragraph (a), the occupant must be 234.11a qualified business, as defined in section 469.310. 234.12    (d) The exemption applies beginning for the first assessment year after designation 234.13of the job opportunity building zone by the commissioner of employment and economic 234.14development. The exemption applies to each assessment year that begins during the 234.15duration of the job opportunity building zone. To be exempt, the property must be 234.16occupied by July 1 of the assessment year by a qualified business that has signed the 234.17business subsidy agreement and relocation agreement, if required, by July 1 of the 234.18assessment year. This exemption does not apply to: 234.19    (1) the levy under section 475.61 or similar levy provisions under any other law to 234.20pay general obligation bonds; or 234.21    (2) a levy under section 126C.17, if the levy was approved by the voters before the 234.22designation of the job opportunity building zone. 234.23     new text begin (e) Except for property of a business that was exempt under this subdivision for new text end 234.24 new text begin taxes payable in 2007, a business must notify the county assessor in writing of eligibility new text end 234.25 new text begin under this subdivision by July 1 in order to begin receiving the exemption under this new text end 234.26 new text begin subdivision for taxes payable in the following year. The business need not annually notify new text end 234.27 new text begin the county assessor of its continued exemption under this subdivision, but must notify the new text end 234.28 new text begin county assessor immediately if the exemption no longer applies. new text end 234.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 234.30    Sec. 23. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read: 234.31    Subdivision 1. Requirement. Except as otherwise provided in subdivision 5, 234.32whenever any real estate is sold for a consideration in excess of $1,000, whether by 234.33warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 234.34grantee or the legal agent of either shall file a certificate of value with the county auditor 235.1in the county in which the property is located when the deed or other document is 235.2presented for recording. Contract for deeds are subject to recording under section 507.235, 235.3subdivision 1 . Value shall, in the case of any deed not a gift, be the amount of the full 235.4actual consideration thereof, paid or to be paid, including the amount of any lien or liens 235.5assumed. The items and value of personal property transferred with the real property 235.6must be listed and deducted from the sale price. The certificate of value shall include 235.7the classification to which the property belongs for the purpose of determining the fair 235.8market value of the property. The certificate shall include financing terms and conditions 235.9of the sale which are necessary to determine the actual, present value of the sale price 235.10for purposes of the sales ratio study. The commissioner of revenue shall promulgate 235.11administrative rules specifying the financing terms and conditions which must be included 235.12on the certificate. Pursuant to the authority of the commissioner of revenue in section 235.13, The certificate of value must include the Social Security number or the federal 235.14employer identification number of the grantors and grantees. new text begin However, a married person new text end 235.15 new text begin who is not an owner of record and who is signing a conveyance instrument along with new text end 235.16 new text begin the person's spouse solely to release and convey their marital interest, if any, in the real new text end 235.17 new text begin property being conveyed is not a grantor for the purpose of the preceding sentence. A new text end 235.18 new text begin statement in the deed that is substantially in the following form is sufficient to allow the new text end 235.19 new text begin county auditor to accept a certificate for filing without the Social Security number of the new text end 235.20 new text begin named spouse: " (Name) claims no ownership interest in the real property being conveyed new text end 235.21 new text begin and is executing this instrument solely to release and convey a marital interest, if any, in new text end 235.22 new text begin that real property." new text end The identification numbers of the grantors and grantees are private 235.23data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12, 235.24but, notwithstanding that section, the private or nonpublic data may be disclosed to the 235.25commissioner of revenue for purposes of tax administration. The information required to 235.26be shown on the certificate of value is limited to the information required as of the date of 235.27the acknowledgment on the deed or other document to be recorded. 235.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for certificates of value filed on or new text end 235.29 new text begin after July 1, 2007. new text end 235.30    Sec. 24. Minnesota Statutes 2006, section 273.05, is amended by adding a subdivision 235.31to read: 235.32     new text begin Subd. 3. new text end new text begin Cities and townships; employment of licensed assessor. new text end new text begin In the case new text end 235.33 new text begin of cities or townships, except cities or towns located in Ramsey County or which have new text end 235.34 new text begin elected a county assessor system in accordance with section 273.055, the commissioner new text end 236.1 new text begin shall allow the city or town 90 days from the date of incorporation or organization to new text end 236.2 new text begin employ a licensed assessor. new text end 236.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 236.4    Sec. 25. new text begin [273.0535] COUNTY OR LOCAL ASSESSING DISTRICT TO ASSUME new text end 236.5 new text begin COST OF TRAINING. new text end 236.6     new text begin The county or local assessing district must assume the cost of training its assessors new text end 236.7 new text begin in courses approved by the board for the purpose of obtaining the assessor's license to new text end 236.8 new text begin the extent of course fees, mileage, meals, and lodging, and recognized travel expenses new text end 236.9 new text begin not paid by the state. new text end 236.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 236.11    Sec. 26. Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read: 236.12    Subd. 3. Requirements. (a) Real estate consisting of ten acres or more or a nursery 236.13or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13, 236.14shall be entitled to valuation and tax deferment under this section only if it is primarily 236.15devoted to agricultural use, and meets the qualifications in subdivision 6, and either: 236.16    (1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the 236.17owner or is real estate which is farmed with the real estate which contains the homestead 236.18property; or 236.19    (2) has been in possession of the applicant, the applicant's spouse, parent, or sibling, 236.20or any combination thereof, for a period of at least seven years prior to application for 236.21benefits under the provisions of this section, or is real estate which is farmed with the 236.22real estate which qualifies under this clause and is within four townships or cities or 236.23combination thereof from the qualifying real estate; or 236.24    (3) is the homestead of a shareholder in a family farm corporation as defined in 236.25section 500.24, notwithstanding the fact that legal title to the real estate may be held in the 236.26name of the family farm corporation; or 236.27    (4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor, 236.28partnership, or corporation which also owns the nursery or greenhouse operations on 236.29the parcel or parcels. 236.30    (b) Valuation of real estate under this section is limited to parcels the ownership of 236.31which is in noncorporate entities except for: 236.32    (1) family farm corporations organized pursuant to section 500.24; and 237.1    (2) corporations that derive 80 percent or more of their gross receipts from the 237.2wholesale or retail sale of horticultural or nursery stock. 237.3    Corporate entities who previously qualified for tax deferment pursuant to this section 237.4and who continue to otherwise qualify under subdivisions 3 and 6 for a period of at least 237.5three years following the effective date of Laws 1983, chapter 222, section 8, will not be 237.6required to make payment of the previously deferred taxes, notwithstanding the provisions 237.7of subdivision 9. Special assessments are payable at the end of the three-year period 237.8or at time of sale, whichever comes first. 237.9    (c) Land that previously qualified for tax deferment under this section and no longer 237.10qualifies because it is not primarily used for agricultural purposes but would otherwise 237.11qualify under subdivisions 3 and 6 for a period of at least three years will not be required 237.12to make payment of the previously deferred taxes, notwithstanding the provisions of 237.13subdivision 9. Sale of the land prior to the expiration of the three-year period requires 237.14payment of deferred taxes as follows: sale in the year the land no longer qualifies requires 237.15payment of the current year's deferred taxes plus payment of deferred taxes for the two 237.16prior years; sale during the second year the land no longer qualifies requires payment of 237.17the current year's deferred taxes plus payment of the deferred taxes for the prior year; and 237.18sale during the third year the land no longer qualifies requires payment of the current 237.19year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to 237.20subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or 237.21at the end of the three-year period, whichever comes first, all deferred special assessments 237.22plus interest are payable in equal installments spread over the time remaining until the last 237.23maturity date of the bonds issued to finance the improvement for which the assessments 237.24were levied. If the bonds have matured, the deferred special assessments plus interest 237.25are payable within 90 days. The provisions of section 429.061, subdivision 2, apply 237.26to the collection of these installments. Penalties are not imposed on any such special 237.27assessments if timely paid. 237.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 237.29    Sec. 27. Minnesota Statutes 2006, section 273.117, is amended to read: 237.30273.117 CONSERVATION PROPERTY TAX VALUATION. 237.31     new text begin The value of new text end real property which is subject to a conservation restriction or easement 237.32shall be entitled to reduced valuation under this section new text begin may be adjusted by the assessor new text end if: 237.33    (a) The restriction or easement is for a conservation purpose as defined in section 237.3484.64, subdivision 2 , and is recorded on the property; 238.1    (b) The property is being used in accordance with the terms of the conservation 238.2restriction or easement. 238.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2007, payable new text end 238.4 new text begin in 2008, and thereafter. new text end 238.5    Sec. 28. Minnesota Statutes 2006, section 273.121, is amended to read: 238.6273.121 VALUATION OF REAL PROPERTY, NOTICE. 238.7    Any county assessor or city assessor having the powers of a county assessor, valuing 238.8or classifying taxable real property shall in each year notify those persons whose property 238.9is to be included on the assessment roll that year if the person's address is known to the 238.10assessor, otherwise the occupant of the property. The notice shall be in writing and shall be 238.11sent by ordinary mail at least ten days before the meeting of the local board of appeal and 238.12equalization under section 274.01 or the review process established under section 274.13, 238.13subdivision 1c . new text begin Upon written request by the owner of the property, the assessor may send new text end 238.14 new text begin the notice in electronic form or by electronic mail instead of on paper or by ordinary mail. new text end 238.15It shall contain: (1) the market value for the current and prior assessment, (2) the limited 238.16market value under section 273.11, subdivision 1a, for the current and prior assessment, 238.17(3) the qualifying amount of any improvements under section 273.11, subdivision 16, 238.18for the current assessment, (4) the market value subject to taxation after subtracting the 238.19amount of any qualifying improvements for the current assessment, (5) the classification 238.20of the property for the current and prior assessment, (6) a note that if the property is 238.21homestead and at least 45 years old, improvements made to the property may be eligible 238.22for a valuation exclusion under section 273.11, subdivision 16, (7) the assessor's office 238.23address, and (8) the dates, places, and times set for the meetings of the local board of 238.24appeal and equalization, the review process established under section 274.13, subdivision 238.251c , and the county board of appeal and equalization. The commissioner of revenue shall 238.26specify the form of the notice. The assessor shall attach to the assessment roll a statement 238.27that the notices required by this section have been mailed. Any assessor who is not 238.28provided sufficient funds from the assessor's governing body to provide such notices, 238.29may make application to the commissioner of revenue to finance such notices. The 238.30commissioner of revenue shall conduct an investigation and, if satisfied that the assessor 238.31does not have the necessary funds, issue a certification to the commissioner of finance 238.32of the amount necessary to provide such notices. The commissioner of finance shall 238.33issue a warrant for such amount and shall deduct such amount from any state payment 238.34to such county or municipality. The necessary funds to make such payments are hereby 239.1appropriated. Failure to receive the notice shall in no way affect the validity of the 239.2assessment, the resulting tax, the procedures of any board of review or equalization, or 239.3the enforcement of delinquent taxes by statutory means. 239.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for notices required in 2008 and new text end 239.5 new text begin thereafter. new text end 239.6    Sec. 29. Minnesota Statutes 2006, section 273.123, subdivision 2, is amended to read: 239.7    Subd. 2. Reassessment of homestead property. The county assessor shall reassess 239.8all homestead property located within a disaster or emergency area which is physically 239.9damaged by the disaster or emergency and shall adjust the valuation for taxes payable the 239.10following year to reflect the loss in market value caused by the damage as follows: Subtract 239.11the market value of the property as reassessed from the market value of the property as 239.12assessed new text begin under section 273.01 new text end for January 1 of the year in which the disaster or emergency 239.13occurred; multiply the remainder by a fraction, the numerator of which is the number of 239.14full months remaining in the year on the date the disaster or emergency occurred, and the 239.15denominator of which is 12; subtract the product of the calculation from the market value 239.16of the property as assessed for January 1 of the year in which the disaster or emergency 239.17occurred; the remainder is the estimated market value to be used for taxes payable the 239.18following year. The assessor shall report to the county auditor the net tax capacity based 239.19on the assessment of January 1 of new text begin for new text end the year in which the disaster or emergency occurred 239.20and the net tax capacity based on the reassessment made pursuant to this subdivision. 239.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 239.22    Sec. 30. Minnesota Statutes 2006, section 273.123, subdivision 3, is amended to read: 239.23    Subd. 3. Computation of local tax rates. When computing Local tax rates, new text begin must new text end 239.24 new text begin be computed by new text end the county auditor shall use new text begin based upon new text end the valuation new text begin as of January 2 as new text end 239.25reported by the assessor for the assessment made on January 1 of the year in which the 239.26disaster or emergency occurred new text begin , and as returned by the local, county, and state boards of new text end 239.27 new text begin review and equalization and the commissioner of revenue new text end . 239.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 239.29    Sec. 31. Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read: 239.30    Subd. 13. Homestead application. (a) A person who meets the homestead 239.31requirements under subdivision 1 must file a homestead application with the county 239.32assessor to initially obtain homestead classification. 240.1    (b) On or before January 2, 1993, each county assessor shall mail a homestead 240.2application to the owner of each parcel of property within the county which was 240.3classified as homestead for the 1992 assessment year. The format and contents of a 240.4uniform homestead application shall be prescribed by the commissioner of revenue. The 240.5commissioner shall consult with the chairs of the house and senate tax committees on the 240.6contents of the homestead application form. The application must clearly inform the 240.7taxpayer that this application must be signed by all owners who occupy the property or 240.8by the qualifying relative and returned to the county assessor in order for the property to 240.9continue receiving new text begin receive new text end homestead treatment. The envelope containing the homestead 240.10application shall clearly identify its contents and alert the taxpayer of its necessary 240.11immediate response. 240.12    (c) Every property owner applying for homestead classification must furnish to the 240.13county assessor the Social Security number of each occupant who is listed as an owner 240.14of the property on the deed of record, the name and address of each owner who does not 240.15occupy the property, and the name and Social Security number of each owner's spouse who 240.16occupies the property. The application must be signed by each owner who occupies the 240.17property and by each owner's spouse who occupies the property, or, in the case of property 240.18that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative. 240.19    If a property owner occupies a homestead, the property owner's spouse may not 240.20claim another property as a homestead unless the property owner and the property owner's 240.21spouse file with the assessor an affidavit or other proof required by the assessor stating that 240.22the property qualifies as a homestead under subdivision 1, paragraph (e). 240.23    Owners or spouses occupying residences owned by their spouses and previously 240.24occupied with the other spouse, either of whom fail to include the other spouse's name 240.25and Social Security number on the homestead application or provide the affidavits or 240.26other proof requested, will be deemed to have elected to receive only partial homestead 240.27treatment of their residence. The remainder of the residence will be classified as 240.28nonhomestead residential. When an owner or spouse's name and Social Security number 240.29appear on homestead applications for two separate residences and only one application is 240.30signed, the owner or spouse will be deemed to have elected to homestead the residence for 240.31which the application was signed. 240.32    The Social Security numbers or affidavits or other proofs of the property owners 240.33and spouses are private data on individuals as defined by section 13.02, subdivision 12, 240.34but, notwithstanding that section, the private data may be disclosed to the commissioner 240.35of revenue, or, for purposes of proceeding under the Revenue Recapture Act to recover 240.36personal property taxes owing, to the county treasurer. 241.1    (d) If residential real estate is occupied and used for purposes of a homestead by a 241.2relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 241.3order for the property to receive homestead status, a homestead application must be filed 241.4with the assessor. The Social Security number of each relative new text begin and spouse of a relative new text end 241.5occupying the property and the Social Security number of each owner who is related to an 241.6occupant of the property shall be required on the homestead application filed under this 241.7subdivision. If a different relative of the owner subsequently occupies the property, the 241.8owner of the property must notify the assessor within 30 days of the change in occupancy. 241.9The Social Security number of a relative new text begin or relative's spouse new text end occupying the property 241.10is private data on individuals as defined by section 13.02, subdivision 12, but may be 241.11disclosed to the commissioner of revenue new text begin , or, for the purposes of proceeding under the new text end 241.12 new text begin Revenue Recapture Act to recover personal property taxes owing, to the county treasurer new text end . 241.13    (e) The homestead application shall also notify the property owners that the 241.14application filed under this section will not be mailed annually and that if the property 241.15is granted homestead status for the 1993 assessment, or any assessment year thereafter, 241.16that same property shall remain classified as homestead until the property is sold or 241.17transferred to another person, or the owners, the spouse of the owner, or the relatives no 241.18longer use the property as their homestead. Upon the sale or transfer of the homestead 241.19property, a certificate of value must be timely filed with the county auditor as provided 241.20under section 272.115. Failure to notify the assessor within 30 days that the property has 241.21been sold, transferred, or that the owner, the spouse of the owner, or the relative is no 241.22longer occupying the property as a homestead, shall result in the penalty provided under 241.23this subdivision and the property will lose its current homestead status. 241.24    (f) If the homestead application is not returned within 30 days, the county will send a 241.25second application to the present owners of record. The notice of proposed property taxes 241.26prepared under section 275.065, subdivision 3, shall reflect the property's classification. 241.27Beginning with assessment year 1993 for all properties, If a homestead application has 241.28not been filed with the county by December 15, the assessor shall classify the property 241.29as nonhomestead for the current assessment year for taxes payable in the following year, 241.30provided that the owner may be entitled to receive the homestead classification by proper 241.31application under section 375.192. 241.32    (g) At the request of the commissioner, each county must give the commissioner a 241.33list that includes the name and Social Security number of each new text begin occupant of homestead new text end 241.34 new text begin property who is the new text end property owner and the new text begin , new text end property owner's spouse occupying the 241.35property, or new text begin , qualifying new text end relative of a property owner, applying for homestead classification 241.36under this subdivision new text begin or a spouse of a qualifying relative new text end . The commissioner shall use the 242.1information provided on the lists as appropriate under the law, including for the detection 242.2of improper claims by owners, or relatives of owners, under chapter 290A. 242.3    (h) If the commissioner finds that a property owner may be claiming a fraudulent 242.4homestead, the commissioner shall notify the appropriate counties. Within 90 days of 242.5the notification, the county assessor shall investigate to determine if the homestead 242.6classification was properly claimed. If the property owner does not qualify, the county 242.7assessor shall notify the county auditor who will determine the amount of homestead 242.8benefits that had been improperly allowed. For the purpose of this section, "homestead 242.9benefits" means the tax reduction resulting from the classification as a homestead under 242.10section 273.13, the taconite homestead credit under section 273.135, the residential 242.11homestead and agricultural homestead credits under section 273.1384, and the 242.12supplemental homestead credit under section 273.1391. 242.13    The county auditor shall send a notice to the person who owned the affected property 242.14at the time the homestead application related to the improper homestead was filed, 242.15demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 242.16of the homestead benefits. The person notified may appeal the county's determination 242.17by serving copies of a petition for review with county officials as provided in section 242.18278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 242.19Court within 60 days of the date of the notice from the county. Procedurally, the appeal 242.20is governed by the provisions in chapter 271 which apply to the appeal of a property tax 242.21assessment or levy, but without requiring any prepayment of the amount in controversy. If 242.22the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 242.23has been filed, the county auditor shall certify the amount of taxes and penalty to the county 242.24treasurer. The county treasurer will add interest to the unpaid homestead benefits and 242.25penalty amounts at the rate provided in section 279.03 for real property taxes becoming 242.26delinquent in the calendar year during which the amount remains unpaid. Interest may be 242.27assessed for the period beginning 60 days after demand for payment was made. 242.28    If the person notified is the current owner of the property, the treasurer may add the 242.29total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 242.30otherwise payable on the property by including the amounts on the property tax statements 242.31under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 242.32valorem taxes shall include interest accrued through December 31 of the year preceding 242.33the taxes payable year for which the amounts are first added. These amounts, when added 242.34to the property tax statement, become subject to all the laws for the enforcement of real or 242.35personal property taxes for that year, and for any subsequent year. 243.1    If the person notified is not the current owner of the property, the treasurer may 243.2collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 243.3the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 243.4of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 243.5tax obligations of the person who owned the property at the time the application related 243.6to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 243.7of personal liability for the homestead benefits, penalty, interest, and costs, and instead 243.8extend those amounts on the tax lists against the property as provided in this paragraph 243.9to the extent that the current owner agrees in writing. On all demands, billings, property 243.10tax statements, and related correspondence, the county must list and state separately the 243.11amounts of homestead benefits, penalty, interest and costs being demanded, billed or 243.12assessed. 243.13    (i) Any amount of homestead benefits recovered by the county from the property 243.14owner shall be distributed to the county, city or town, and school district where the 243.15property is located in the same proportion that each taxing district's levy was to the total 243.16of the three taxing districts' levy for the current year. Any amount recovered attributable 243.17to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 243.18deposited in the taconite property tax relief account. Any amount recovered that is 243.19attributable to supplemental homestead credit is to be transmitted to the commissioner of 243.20revenue for deposit in the general fund of the state treasury. The total amount of penalty 243.21collected must be deposited in the county general fund. 243.22    (j) If a property owner has applied for more than one homestead and the county 243.23assessors cannot determine which property should be classified as homestead, the county 243.24assessors will refer the information to the commissioner. The commissioner shall make 243.25the determination and notify the counties within 60 days. 243.26    (k) In addition to lists of homestead properties, the commissioner may ask the 243.27counties to furnish lists of all properties and the record owners. The Social Security 243.28numbers and federal identification numbers that are maintained by a county or city 243.29assessor for property tax administration purposes, and that may appear on the lists retain 243.30their classification as private or nonpublic data; but may be viewed, accessed, and used by 243.31the county auditor or treasurer of the same county for the limited purpose of assisting the 243.32commissioner in the preparation of microdata samples under section 270C.12. 243.33    (l) On or before April 30 each year beginning in 2007, each county must provide the 243.34commissioner with the following data for each parcel of homestead property by electronic 243.35means as defined in section 289A.02, subdivision 8: 244.1    (i) the property identification number assigned to the parcel for purposes of taxes 244.2payable in the current year; 244.3    (ii) the name and Social Security number of each new text begin occupant of homestead property new text end 244.4 new text begin who is the new text end property owner and new text begin , new text end property owner's spouse, as shown on the tax rolls for the 244.5current and the prior assessment year new text begin qualifying relative of a property owner, or spouse new text end 244.6 new text begin of a qualifying relative new text end ; 244.7    (iii) the classification of the property under section 273.13 for taxes payable in the 244.8current year and in the prior year; 244.9    (iv) an indication of whether the property was classified as a homestead for taxes 244.10payable in the current year or for taxes payable in the prior year because of occupancy by 244.11a relative of the owner or by a spouse of a relative; 244.12    (v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 244.13current year and the prior year; 244.14    (vi) the market value of improvements to the property first assessed for tax purposes 244.15for taxes payable in the current year; 244.16    (vii) the assessor's estimated market value assigned to the property for taxes payable 244.17in the current year and the prior year; 244.18    (viii) the taxable market value assigned to the property for taxes payable in the 244.19current year and the prior year; 244.20    (ix) whether there are delinquent property taxes owing on the homestead; 244.21    (x) the unique taxing district in which the property is located; and 244.22    (xi) such other information as the commissioner decides is necessary. 244.23    The commissioner shall use the information provided on the lists as appropriate 244.24under the law, including for the detection of improper claims by owners, or relatives 244.25of owners, under chapter 290A. 244.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 244.27    Sec. 32. Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read: 244.28    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989, 244.29class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1) 244.30the property is located in a border city that has an enterprise zone designated pursuant 244.31to section 469.168, subdivision 4; (2) the property is located in a city with a population 244.32greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the 244.33city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city 244.34in another state; and (4) the adjacent city in the other state has a population of greater than 244.355,000 and less than 75,000 new text begin according to the 1980 decennial census new text end . 245.1    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 245.2property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class 245.33b property to 2.3 percent of market value. 245.4    (c) The county auditor shall annually certify the costs of the credits to the 245.5Department of Revenue. The department shall reimburse local governments for the 245.6property taxes foregone as the result of the credits in proportion to their total levies. 245.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for taxes payable in new text end 245.8 new text begin 2001 and thereafter. new text end 245.9    Sec. 33. Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read: 245.10    Subd. 2. Listing and assessment by commissioner. The personal property, 245.11consisting of the pipeline system of mains, pipes, and equipment attached thereto, of 245.12pipeline companies and others engaged in the operations or business of transporting 245.13natural gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed 245.14with and assessed by the commissioner of revenue new text begin and the values provided to the city new text end 245.15 new text begin or county assessor by order new text end . This subdivision shall not apply to the assessment of 245.16the products transported through the pipelines nor to the lines of local commercial gas 245.17companies engaged primarily in the business of distributing gas to consumers at retail nor 245.18to pipelines used by the owner thereof to supply natural gas or other petroleum products 245.19exclusively for such owner's own consumption and not for resale to others. If more than 245.2085 percent of the natural gas or other petroleum products actually transported over the 245.21pipeline is used for the owner's own consumption and not for resale to others, then this 245.22subdivision shall not apply; provided, however, that in that event, the pipeline shall be 245.23assessed in proportion to the percentage of gas actually transported over such pipeline that 245.24is not used for the owner's own consumption. On or before June 30, the commissioner 245.25shall certify to the auditor of each county, the amount of such personal property assessment 245.26against each company in each district in which such property is located. 245.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 245.28    Sec. 34. Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read: 245.29    Subd. 2. Listing and assessment by commissioner. Transmission lines of less 245.30than 69 kv, transmission lines of 69 kv and above located in an unorganized township, 245.31and distribution lines, and equipment attached thereto, having a fixed situs outside the 245.32corporate limits of cities except distribution lines taxed as provided in sections 273.40 245.33and 273.41, shall be listed with and assessed by the commissioner of revenue in the 246.1county where situated new text begin and the values provided to the city or county assessor by order new text end . 246.2The commissioner shall assess such property at the percentage of market value fixed by 246.3law; and, on or before June 30, shall certify to the auditor of each county in which such 246.4property is located the amount of the assessment made against each company and person 246.5owning such property. 246.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 246.7    Sec. 35. Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read: 246.8    Subdivision 1. Report required. Every electric light, power, gas, water, express, 246.9stage, and transportation company and pipeline doing business in Minnesota shall 246.10annually file with the commissioner on or before March 31 a report under oath setting 246.11forth the information prescribed by the commissioner to enable the commissioner to make 246.12valuations, recommended valuations, and equalization required under sections 273.33, 246.13273.35 , 273.36, and 273.37 new text begin , and 273.3711 new text end . If all the required information is not available 246.14on March 31, the company or pipeline shall file the information that is available on or 246.15before March 31, and the balance of the information as soon as it becomes available. 246.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 246.17    Sec. 36. new text begin [273.3711] RECOMMENDED AND ORDERED VALUES. new text end 246.18     new text begin For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372, new text end 246.19 new text begin all values not required to be listed and assessed by the commissioner of revenue are new text end 246.20 new text begin recommended values. new text end 246.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 246.22    Sec. 37. Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read: 246.23    Subdivision 1. Ordinary board; meetings, deadlines, grievances. (a) The town 246.24board of a town, or the council or other governing body of a city, is the board of appeal 246.25and equalization except (1) in cities whose charters provide for a board of equalization or 246.26(2) in any city or town that has transferred its local board of review power and duties to 246.27the county board as provided in subdivision 3. The county assessor shall fix a day and 246.28time when the board or the board of equalization shall meet in the assessment districts 246.29of the county. Notwithstanding any law or city charter to the contrary, a city board of 246.30equalization shall be referred to as a board of appeal and equalization. On or before 246.31February 15 of each year the assessor shall give written notice of the time to the city or 246.32town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings 247.1must be held between April 1 and May 31 each year. The clerk shall give published and 247.2posted notice of the meeting at least ten days before the date of the meeting. 247.3    The board shall meet at the office of the clerk to review the assessment and 247.4classification of property in the town or city. No changes in valuation or classification 247.5which are intended to correct errors in judgment by the county assessor may be made by 247.6the county assessor after the board has adjourned in those cities or towns that hold a 247.7local board of review; however, corrections of errors that are merely clerical in nature or 247.8changes that extend homestead treatment to property are permitted after adjournment until 247.9the tax extension date for that assessment year. The changes must be fully documented and 247.10maintained in the assessor's office and must be available for review by any person. A copy 247.11of the changes made during this period in those cities or towns that hold a local board of 247.12review must be sent to the county board no later than December 31 of the assessment year. 247.13    (b) The board shall determine whether the taxable property in the town or city has 247.14been properly placed on the list and properly valued by the assessor. If real or personal 247.15property has been omitted, the board shall place it on the list with its market value, and 247.16correct the assessment so that each tract or lot of real property, and each article, parcel, 247.17or class of personal property, is entered on the assessment list at its market value. No 247.18assessment of the property of any person may be raised unless the person has been 247.19duly notified of the intent of the board to do so. On application of any person feeling 247.20aggrieved, the board shall review the assessment or classification, or both, and correct 247.21it as appears just. The board may not make an individual market value adjustment or 247.22classification change that would benefit the property if the owner or other person having 247.23control over the property has refused the assessor access to inspect the property and the 247.24interior of any buildings or structures as provided in section 273.20. new text begin A board member new text end 247.25 new text begin shall not participate in any actions of the board which result in market value adjustments new text end 247.26 new text begin or classification changes to property owned by the board member, the spouse, parent, new text end 247.27 new text begin stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, new text end 247.28 new text begin or niece of a board member, or property in which a board member has a financial interest. new text end 247.29 new text begin The relationship may be by blood or marriage. new text end 247.30    (c) A local board may reduce assessments upon petition of the taxpayer but the total 247.31reductions must not reduce the aggregate assessment made by the county assessor by more 247.32than one percent. If the total reductions would lower the aggregate assessments made by 247.33the county assessor by more than one percent, none of the adjustments may be made. The 247.34assessor shall correct any clerical errors or double assessments discovered by the board 247.35without regard to the one percent limitation. 248.1    (d) A local board does not have authority to grant an exemption or to order property 248.2removed from the tax rolls. 248.3    (e) A majority of the members may act at the meeting, and adjourn from day to day 248.4until they finish hearing the cases presented. The assessor shall attend, with the assessment 248.5books and papers, and take part in the proceedings, but must not vote. The county assessor, 248.6or an assistant delegated by the county assessor shall attend the meetings. The board shall 248.7list separately, on a form appended to the assessment book, all omitted property added 248.8to the list by the board and all items of property increased or decreased, with the market 248.9value of each item of property, added or changed by the board, placed opposite the item. 248.10The county assessor shall enter all changes made by the board in the assessment book. 248.11    (f) Except as provided in subdivision 3, if a person fails to appear in person, by 248.12counsel, or by written communication before the board after being duly notified of the 248.13board's intent to raise the assessment of the property, or if a person feeling aggrieved by an 248.14assessment or classification fails to apply for a review of the assessment or classification, 248.15the person may not appear before the county board of appeal and equalization for a review 248.16of the assessment or classification. This paragraph does not apply if an assessment was 248.17made after the local board meeting, as provided in section 273.01, or if the person can 248.18establish not having received notice of market value at least five days before the local 248.19board meeting. 248.20    (g) The local board must complete its work and adjourn within 20 days from the 248.21time of convening stated in the notice of the clerk, unless a longer period is approved by 248.22the commissioner of revenue. No action taken after that date is valid. All complaints 248.23about an assessment or classification made after the meeting of the board must be heard 248.24and determined by the county board of equalization. A nonresident may, at any time, 248.25before the meeting of the board file written objections to an assessment or classification 248.26with the county assessor. The objections must be presented to the board at its meeting by 248.27the county assessor for its consideration. 248.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 248.29    Sec. 38. Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read: 248.30    Subdivision 1. Members; meetings; rules for equalizing assessments. The county 248.31commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be 248.32present, the deputy county auditor, or, if there is no deputy, the court administrator of the 248.33district court, shall form a board for the equalization of the assessment of the property 248.34of the county, including the property of all cities whose charters provide for a board of 248.35equalization. This board shall be referred to as the county board of appeal and equalization. 249.1The board shall meet annually, on the date specified in section 274.14, at the office of the 249.2auditor. Each member shall take an oath to fairly and impartially perform duties as a 249.3member. new text begin Members shall not participate in any actions of the board which result in market new text end 249.4 new text begin value adjustments or classification changes to property owned by the board member, the new text end 249.5 new text begin spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, new text end 249.6 new text begin aunt, nephew, or niece of a board member, or property in which a board member has a new text end 249.7 new text begin financial interest. The relationship may be by blood or marriage. new text end The board shall examine 249.8and compare the returns of the assessment of property of the towns or districts, and 249.9equalize them so that each tract or lot of real property and each article or class of personal 249.10property is entered on the assessment list at its market value, subject to the following rules: 249.11    (1) The board shall raise the valuation of each tract or lot of real property which 249.12in its opinion is returned below its market value to the sum believed to be its market 249.13value. The board must first give notice of intention to raise the valuation to the person in 249.14whose name it is assessed, if the person is a resident of the county. The notice must fix 249.15a time and place for a hearing. 249.16    (2) The board shall reduce the valuation of each tract or lot which in its opinion is 249.17returned above its market value to the sum believed to be its market value. 249.18    (3) The board shall raise the valuation of each class of personal property which 249.19in its opinion is returned below its market value to the sum believed to be its market 249.20value. It shall raise the aggregate value of the personal property of individuals, firms, or 249.21corporations, when it believes that the aggregate valuation, as returned, is less than the 249.22market value of the taxable personal property possessed by the individuals, firms, or 249.23corporations, to the sum it believes to be the market value. The board must first give notice 249.24to the persons of intention to do so. The notice must set a time and place for a hearing. 249.25    (4) The board shall reduce the valuation of each class of personal property that 249.26is returned above its market value to the sum it believes to be its market value. Upon 249.27complaint of a party aggrieved, the board shall reduce the aggregate valuation of the 249.28individual's personal property, or of any class of personal property for which the individual 249.29is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes 249.30was the market value of the individual's personal property of that class. 249.31    (5) The board must not reduce the aggregate value of all the property of its county, as 249.32submitted to the county board of equalization, with the additions made by the auditor under 249.33this chapter, by more than one percent of its whole valuation. The board may raise the 249.34aggregate valuation of real property, and of each class of personal property, of the county, 249.35or of any town or district of the county, when it believes it is below the market value of the 249.36property, or class of property, to the aggregate amount it believes to be its market value. 250.1    (6) The board shall change the classification of any property which in its opinion 250.2is not properly classified. 250.3    (7) The board does not have the authority to grant an exemption or to order property 250.4removed from the tax rolls. 250.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 250.6    Sec. 39. new text begin [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION new text end 250.7 new text begin COURSE AND MEETING REQUIREMENTS. new text end 250.8     new text begin Subdivision 1. new text end new text begin Handbook for county boards. new text end new text begin By no later than January 1, 2009, the new text end 250.9 new text begin commissioner of revenue must develop a handbook detailing procedures, responsibilities, new text end 250.10 new text begin and requirements for county boards of appeal and equalization. The handbook must new text end 250.11 new text begin include, but need not be limited to, the role of the county board in the assessment process, new text end 250.12 new text begin the legal and policy reasons for fair and impartial appeal and equalization hearings, county new text end 250.13 new text begin board meeting procedures that foster fair and impartial assessment reviews and other best new text end 250.14 new text begin practices recommendations, quorum requirements for county boards, and explanations new text end 250.15 new text begin of alternate methods of appeal. new text end 250.16     new text begin Subd. 2. new text end new text begin Appeals and equalization course. new text end new text begin Beginning in 2009, and each year new text end 250.17 new text begin thereafter, there must be at least one member at each meeting of a county board of appeal new text end 250.18 new text begin and equalization who has attended an appeals and equalization course developed or new text end 250.19 new text begin approved by the commissioner within the last four years, as certified by the commissioner. new text end 250.20 new text begin The course may be offered in conjunction with a meeting of the Minnesota Association new text end 250.21 new text begin of Assessment Officers. The course content must include, but need not be limited to, a new text end 250.22 new text begin review of the handbook developed by the commissioner under subdivision 1. new text end 250.23     new text begin Subd. 3. new text end new text begin Proof of compliance; transfer of duties. new text end new text begin (a) Any county that new text end 250.24 new text begin conducts county boards of appeal and equalization meetings must provide proof to the new text end 250.25 new text begin commissioner by December 1, 2009, and each year thereafter, that it is in compliance new text end 250.26 new text begin with the requirements of subdivision 2. Beginning in 2009, this notice must also verify new text end 250.27 new text begin that there was a quorum of voting members at each meeting of the board of appeal and new text end 250.28 new text begin equalization in the current year. A county that does not comply with these requirements new text end 250.29 new text begin is deemed to have transferred its board of appeal and equalization powers to the special new text end 250.30 new text begin board of equalization appointed pursuant to section 274.13, subdivision 2, beginning new text end 250.31 new text begin with the following year's assessment and continuing unless the powers are reinstated new text end 250.32 new text begin under paragraph (c). A county that does not comply with the requirements of subdivision new text end 250.33 new text begin 2 and has not appointed a special board of equalization shall appoint a special board of new text end 250.34 new text begin equalization before the following year's assessment. new text end 251.1     new text begin (b) The county shall notify the taxpayers when the board of appeal and equalization new text end 251.2 new text begin for a county has been transferred to the special board of equalization under this subdivision new text end 251.3 new text begin and, prior to the meeting time of the special board of equalization, the county shall make new text end 251.4 new text begin available to those taxpayers a procedure for a review of the assessments, including, but new text end 251.5 new text begin not limited to, open book meetings. This alternate review process must take place in new text end 251.6 new text begin April and May. new text end 251.7     new text begin (c) A county board whose powers are transferred to the special board of equalization new text end 251.8 new text begin under this subdivision may be reinstated by resolution of the county board and upon proof new text end 251.9 new text begin of compliance with the requirements of subdivision 2. The resolution and proofs must be new text end 251.10 new text begin provided to the commissioner by December 1 in order to be effective for the following new text end 251.11 new text begin year's assessment. new text end 251.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 251.13    Sec. 40. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read: 251.14    Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare 251.15and the county treasurer shall deliver after November 10 and on or before November 24 251.16each year, by first class mail to each taxpayer at the address listed on the county's current 251.17year's assessment roll, a notice of proposed property taxes. new text begin Upon written request by new text end 251.18 new text begin the taxpayer, the treasurer may send the notice in electronic form or by electronic mail new text end 251.19 new text begin instead of on paper or by ordinary mail. new text end 251.20    (b) The commissioner of revenue shall prescribe the form of the notice. 251.21    (c) The notice must inform taxpayers that it contains the amount of property taxes 251.22each taxing authority proposes to collect for taxes payable the following year. In the case 251.23of a town, or in the case of the state general tax, the final tax amount will be its proposed 251.24tax. In the case of taxing authorities required to hold a public meeting under subdivision 6, 251.25the notice must clearly state that each taxing authority, including regional library districts 251.26established under section 134.201, and including the metropolitan taxing districts as 251.27defined in paragraph (i), but excluding all other special taxing districts and towns, will 251.28hold a public meeting to receive public testimony on the proposed budget and proposed or 251.29final property tax levy, or, in case of a school district, on the current budget and proposed 251.30property tax levy. It must clearly state the time and place of each taxing authority's 251.31meeting, a telephone number for the taxing authority that taxpayers may call if they have 251.32questions related to the notice, and an address where comments will be received by mail. 251.33    (d) The notice must state for each parcel: 251.34    (1) the market value of the property as determined under section 273.11, and used 251.35for computing property taxes payable in the following year and for taxes payable in the 252.1current year as each appears in the records of the county assessor on November 1 of the 252.2current year; and, in the case of residential property, whether the property is classified as 252.3homestead or nonhomestead. The notice must clearly inform taxpayers of the years to 252.4which the market values apply and that the values are final values; 252.5    (2) the items listed below, shown separately by county, city or town, and state general 252.6tax, net of the residential and agricultural homestead credit under section 273.1384, voter 252.7approved school levy, other local school levy, and the sum of the special taxing districts, 252.8and as a total of all taxing authorities: 252.9    (i) the actual tax for taxes payable in the current year; and 252.10    (ii) the proposed tax amount. 252.11    If the county levy under clause (2) includes an amount for a lake improvement 252.12district as defined under sections 103B.501 to 103B.581, the amount attributable for that 252.13purpose must be separately stated from the remaining county levy amount. 252.14    In the case of a town or the state general tax, the final tax shall also be its proposed 252.15tax unless the town changes its levy at a special town meeting under section 365.52. If a 252.16school district has certified under section 126C.17, subdivision 9, that a referendum will 252.17be held in the school district at the November general election, the county auditor must 252.18note next to the school district's proposed amount that a referendum is pending and that, 252.19if approved by the voters, the tax amount may be higher than shown on the notice. In 252.20the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the 252.21levy for Minneapolis Park and Recreation shall be listed separately from the remaining 252.22amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul 252.23Library Agency must be listed separately from the remaining amount of the city's levy. 252.24In the case of Ramsey County, any amount levied under section 134.07 may be listed 252.25separately from the remaining amount of the county's levy. In the case of a parcel where 252.26tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies, 252.27the proposed tax levy on the captured value or the proposed tax levy on the tax capacity 252.28subject to the areawide tax must each be stated separately and not included in the sum of 252.29the special taxing districts; and 252.30    (3) the increase or decrease between the total taxes payable in the current year and 252.31the total proposed taxes, expressed as a percentage. 252.32    For purposes of this section, the amount of the tax on homesteads qualifying under 252.33the senior citizens' property tax deferral program under chapter 290B is the total amount 252.34of property tax before subtraction of the deferred property tax amount. 252.35    (e) The notice must clearly state that the proposed or final taxes do not include 252.36the following: 253.1    (1) special assessments; 253.2    (2) levies approved by the voters after the date the proposed taxes are certified, 253.3including bond referenda and school district levy referenda; 253.4    (3) a levy limit increase approved by the voters by the first Tuesday after the first 253.5Monday in November of the levy year as provided under section 275.73; 253.6    (4) amounts necessary to pay cleanup or other costs due to a natural disaster 253.7occurring after the date the proposed taxes are certified; 253.8    (5) amounts necessary to pay tort judgments against the taxing authority that become 253.9final after the date the proposed taxes are certified; and 253.10    (6) the contamination tax imposed on properties which received market value 253.11reductions for contamination. 253.12    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or 253.13the county treasurer to deliver the notice as required in this section does not invalidate the 253.14proposed or final tax levy or the taxes payable pursuant to the tax levy. 253.15    (g) If the notice the taxpayer receives under this section lists the property as 253.16nonhomestead, and satisfactory documentation is provided to the county assessor by the 253.17applicable deadline, and the property qualifies for the homestead classification in that 253.18assessment year, the assessor shall reclassify the property to homestead for taxes payable 253.19in the following year. 253.20    (h) In the case of class 4 residential property used as a residence for lease or rental 253.21periods of 30 days or more, the taxpayer must either: 253.22    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 253.23renter, or lessee; or 253.24    (2) post a copy of the notice in a conspicuous place on the premises of the property. 253.25    The notice must be mailed or posted by the taxpayer by November 27 or within 253.26three days of receipt of the notice, whichever is later. A taxpayer may notify the county 253.27treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to 253.28which the notice must be mailed in order to fulfill the requirements of this paragraph. 253.29    (i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special 253.30taxing districts" means the following taxing districts in the seven-county metropolitan area 253.31that levy a property tax for any of the specified purposes listed below: 253.32    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 253.33473.446 , 473.521, 473.547, or 473.834; 253.34    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 253.35and 253.36    (3) Metropolitan Mosquito Control Commission under section 473.711. 254.1    For purposes of this section, any levies made by the regional rail authorities in the 254.2county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 254.3398A shall be included with the appropriate county's levy and shall be discussed at that 254.4county's public hearing. 254.5    (j) The governing body of a county, city, or school district may, with the consent 254.6of the county board, include supplemental information with the statement of proposed 254.7property taxes about the impact of state aid increases or decreases on property tax 254.8increases or decreases and on the level of services provided in the affected jurisdiction. 254.9This supplemental information may include information for the following year, the current 254.10year, and for as many consecutive preceding years as deemed appropriate by the governing 254.11body of the county, city, or school district. It may include only information regarding: 254.12    (1) the impact of inflation as measured by the implicit price deflator for state and 254.13local government purchases; 254.14    (2) population growth and decline; 254.15    (3) state or federal government action; and 254.16    (4) other financial factors that affect the level of property taxation and local services 254.17that the governing body of the county, city, or school district may deem appropriate to 254.18include. 254.19    The information may be presented using tables, written narrative, and graphic 254.20representations and may contain instruction toward further sources of information or 254.21opportunity for comment. 254.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for notices required in 2007 and new text end 254.23 new text begin thereafter, for taxes payable in 2008 and thereafter. new text end 254.24    Sec. 41. Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read: 254.25    Subd. 5a. Public advertisement. (a) A city that has a population of more than 254.262,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph 254.27(i), a regional library district established under section 134.201, or school district shall 254.28advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or, 254.29in the case of a school district, to review its current budget and proposed property taxes 254.30payable in the following year, at a public hearing, if a public hearing is required under 254.31subdivision 6. The notice must be published not less than two business days nor more 254.32than six business days before the hearing. 254.33    The advertisement must be at least one-eighth page in size of a standard-size or a 254.34tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper 254.35where legal notices and classified advertisements appear. The advertisement must be 255.1published in an official newspaper of general circulation in the taxing authority. The 255.2newspaper selected must be one of general interest and readership in the community, and 255.3not one of limited subject matter. The advertisement must appear in a newspaper that is 255.4published at least once per week. 255.5    For purposes of this section, the metropolitan special taxing district's advertisement 255.6must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer 255.7Press. 255.8    In addition to other requirements, a county and a city having a population of 255.9more than 2,500 must show in the public advertisement required under this subdivision 255.10the current local tax rate, the proposed local tax rate if no property tax levy increase 255.11is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this 255.12subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by 255.13the city's or county's taxable net tax capacity. 255.14    (b) new text begin Subject to the provisions of paragraph (g), new text end the advertisement for school districts, 255.15metropolitan special taxing districts, and regional library districts must be in the following 255.16form, except that the notice for a school district may include references to the current 255.17budget in regard to proposed property taxes. 255.18"NOTICE OF 255.19PROPOSED PROPERTY TAXES 255.20(School District/Metropolitan 255.21Special Taxing District/Regional 255.22Library District) of ......... 255.23The governing body of ........ will soon hold budget hearings and vote on the property 255.24taxes for (metropolitan special taxing district/regional library district services that will be 255.25provided in (year)/school district services that will be provided in (year) and (year)). 255.26NOTICE OF PUBLIC HEARING: 255.27All concerned citizens are invited to attend a public hearing and express their opinions 255.28on the proposed (school district/metropolitan special taxing district/regional library 255.29district) budget and property taxes, or in the case of a school district, its current budget 255.30and proposed property taxes, payable in the following year. The hearing will be held on 255.31(Month/Day/Year) at (Time) at (Location, Address)." 255.32    (c) new text begin Subject to the provisions of paragraph (g), new text end the advertisement for cities and 255.33counties must be in the following form. 255.34"NOTICE OF PROPOSED 255.35TOTAL BUDGET AND PROPERTY TAXES 256.1The (city/county) governing body or board of commissioners will hold a public hearing to 256.2discuss the budget and to vote on the amount of property taxes to collect for services the 256.3(city/county) will provide in (year). 256.4SPENDING: The total budget amounts below compare (city's/county's) (year) total actual 256.5budget with the amount the (city/county) proposes to spend in (year). 256.6 256.7 (Year) Total Actual Budget Proposed (Year) Budget Change from (Year)-(Year) 256.8 $........... $........... .....% 256.9TAXES: The property tax amounts below compare that portion of the current budget 256.10levied in property taxes in (city/county) for (year) with the property taxes the (city/county) 256.11proposes to collect in (year). 256.12 256.13 (Year) Property Taxes Proposed (Year) Property Taxes Change from (Year)-(Year) 256.14 $........... $........... .....% 256.15LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax 256.16levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted. 256.17 256.18 (Year) Tax Rate (Year) Tax Rate if NO Levy Increase (Year) Proposed Tax Rate 256.19 ........... ........... ..... 256.20ATTEND THE PUBLIC HEARING 256.21All (city/county) residents are invited to attend the public hearing of the (city/county) to 256.22express your opinions on the budget and the proposed amount of (year) property taxes. 256.23The hearing will be held on: 256.24(Month/Day/Year/Time) 256.25(Location/Address) 256.26If the discussion of the budget cannot be completed, a time and place for continuing the 256.27discussion will be announced at the hearing. You are also invited to send your written 256.28comments to: 256.29(City/County) 256.30(Location/Address)" 256.31    (d) For purposes of this subdivision, the budget amounts listed on the advertisement 256.32mean: 256.33    (1) for cities, the total government fund expenditures, as defined by the state auditor 256.34under section 471.6965, less any expenditures for improvements or services that are 257.1specially assessed or charged under chapter 429, 430, 435, or the provisions of any other 257.2law or charter; and 257.3    (2) for counties, the total government fund expenditures, as defined by the state 257.4auditor under section 375.169, less any expenditures for direct payments to recipients or 257.5providers for the human service aids listed below: 257.6    (i) Minnesota family investment program under chapters 256J and 256K; 257.7    (ii) medical assistance under sections 256B.041, subdivision 5, and 256B.19, 257.8subdivision 1 ; 257.9    (iii) general assistance medical care under section 256D.03, subdivision 6; 257.10    (iv) general assistance under section 256D.03, subdivision 2; 257.11    (v) emergency assistance under section 256J.48; 257.12    (vi) Minnesota supplemental aid under section 256D.36, subdivision 1; 257.13    (vii) preadmission screening under section 256B.0911, and alternative care grants 257.14under section 256B.0913; 257.15    (viii) general assistance medical care claims processing, medical transportation and 257.16related costs under section 256D.03, subdivision 4; 257.17    (ix) medical transportation and related costs under section 256B.0625, subdivisions 257.1817 to 18a ; 257.19    (x) group residential housing under section 256I.05, subdivision 8, transferred from 257.20programs in clauses (iv) and (vi); or 257.21    (xi) any successor programs to those listed in clauses (i) to (x). 257.22    (e) A city with a population of over 500 but not more than 2,500 that is required to 257.23hold a public hearing under subdivision 6 must advertise by posted notice as defined in 257.24section 645.12, subdivision 1. The advertisement must be posted at the time provided in 257.25paragraph (a). It must be in the form required in paragraph (b). 257.26    (f) For purposes of this subdivision, the population of a city is the most recent 257.27population as determined by the state demographer under section 4A.02. 257.28    (g) The commissioner of revenue, subject to the approval of the chairs of the house 257.29and senate tax committees, shall new text begin annually new text end prescribe the new text begin specific new text end form and format of the 257.30advertisements required under this subdivision new text begin , including such details as font size and new text end 257.31 new text begin style, and spacing for the required items. The commissioner may prescribe alternate and new text end 257.32 new text begin additional language for the advertisement for a taxing authority or for groups of taxing new text end 257.33 new text begin authorities. At least two weeks before November 29 each year, the commissioner shall new text end 257.34 new text begin provide a copy of the prescribed advertisements to the chairs of the committees of the new text end 257.35 new text begin house of representatives and the senate with jurisdiction over taxes new text end . 258.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for advertisements in 2007 and new text end 258.2 new text begin thereafter, for proposed taxes payable in 2008 and thereafter. new text end 258.3    Sec. 42. Minnesota Statutes 2006, section 275.067, is amended to read: 258.4275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE; 258.5CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS. 258.6    Special taxing districts as defined in section 275.066 organized on or before July 1 in 258.7a new text begin the current new text end calendar year may new text begin , and special taxing districts organized in a prior year that new text end 258.8 new text begin have not previously certified a levy to the county auditor, are allowed to new text end certify a levy to 258.9the county auditor in that same new text begin the current new text end year for property taxes or special assessments 258.10to be payable in the following calendar year to the extent that the special taxing district is 258.11authorized by statute or special act to levy taxes or special assessments new text begin , but only if the new text end 258.12 new text begin county auditor receives written notice from the district on or before July 1 of the current new text end 258.13 new text begin year that the district may be certifying a levy in the current year, and the notice includes a new text end 258.14 new text begin complete list or other description of the tax parcels in the district and a map showing the new text end 258.15 new text begin boundaries of the district new text end . Special taxing districts organized after July 1 in a calendar year 258.16may not certify a levy of property taxes or special assessments to the county auditor under 258.17the powers granted to them by statute or special act new text begin and subject to the requirements of new text end 258.18 new text begin this section new text end until the following calendar year. new text begin All special taxing districts must notify the new text end 258.19 new text begin county auditor by July 1 in order for its boundaries for the levy to be certified that year new text end 258.20 new text begin to be different than its boundaries for levies certified in prior years, and the notice must new text end 258.21 new text begin include a complete list or other description of the tax parcels within the new boundaries new text end 258.22 new text begin and a map showing the new boundaries of the district. new text end 258.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2008 and new text end 258.24 new text begin thereafter. new text end 258.25    Sec. 43. Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision 258.26to read: 258.27     new text begin Subd. 5. new text end new text begin Electronic tax statements. new text end new text begin Upon written request by the owner of real new text end 258.28 new text begin property located in the county, or by the owner's agent, a county may send tax statements new text end 258.29 new text begin by electronic means instead of by mailing. For the purposes of the payment deadlines new text end 258.30 new text begin specified in section 279.01, the postmark date on the envelope containing these property new text end 258.31 new text begin tax statements is the date the statements were sent by electronic means. new text end 258.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax statements for taxes payable new text end 258.33 new text begin in 2008 and thereafter. new text end 259.1    Sec. 44. Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read: 259.2    Subd. 2. Partial payments. The county treasurer may accept payments of more or 259.3less than the exact amount of a tax installment due. new text begin Payments must be applied first to the new text end 259.4 new text begin oldest installment that is due but which has not been fully paid. new text end If the accepted payment is 259.5less than the amount due, payments must be new text begin the payment is new text end applied first to the penalty 259.6accrued for the year the payment is made new text begin or the installment being paid new text end . Acceptance of 259.7partial payment of tax does not constitute a waiver of the minimum payment required as a 259.8condition for filing an appeal under section 278.03 or any other law, nor does it affect the 259.9order of payment of delinquent taxes under section 280.39. 259.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for payments made on or after the new text end 259.11 new text begin day following final enactment. new text end 259.12    Sec. 45. Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read: 259.13    Subdivision 1. Due dates; penalties. Except as provided in subdivision 3 or 4, on 259.14May 16 or 21 days after the postmark date on the envelope containing the property tax 259.15statement, whichever is later, a penalty shall accrue new text begin accrues new text end and thereafter be new text begin is new text end charged 259.16upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer. 259.17The penalty shall be new text begin is new text end at a rate of two percent on homestead property until May 31 and 259.18four percent on June 1. The penalty on nonhomestead property shall be new text begin is new text end at a rate of four 259.19percent until May 31 and eight percent on June 1. This penalty shall new text begin does new text end not accrue until 259.20June 1 of each year, or 21 days after the postmark date on the envelope containing the 259.21property tax statements, whichever is later, on commercial use real property used for 259.22seasonal residential recreational purposes and classified as class 1c or 4c, and on other 259.23commercial use real property classified as class 3a, provided that over 60 percent of the 259.24gross income earned by the enterprise on the class 3a property is earned during the months 259.25of May, June, July, and August. Any property owner of such class 3a property who pays 259.26 new text begin In order for new text end the first half of the tax due on the new text begin class 3a new text end property new text begin to be paid new text end after May 15 259.27and before June 1, or 21 days after the postmark date on the envelope containing the 259.28property tax statement, whichever is later, shall new text begin without penalty, the owner of the property new text end 259.29 new text begin must new text end attach an affidavit to the payment attesting to compliance with the income provision 259.30of this subdivision. Thereafter, for both homestead and nonhomestead property, on the 259.31first day of each month beginning July 1, up to and including October 1 following, an 259.32additional penalty of one percent for each month shall accrue new text begin accrues new text end and be new text begin is new text end charged on 259.33all such unpaid taxes provided that if the due date was extended beyond May 15 as the 259.34result of any delay in mailing property tax statements no additional penalty shall accrue 259.35if the tax is paid by the extended due date. If the tax is not paid by the extended due 260.1date, then all penalties that would have accrued if the due date had been May 15 shall be 260.2charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid 260.3prior to May 16 or 21 days after the postmark date on the envelope containing the property 260.4tax statement, whichever is later; and, if so paid, no penalty shall attach new text begin attaches new text end ; the 260.5remaining one-half shall new text begin may new text end be paid at any time prior to October 16 following, without 260.6penalty; but, if not so paid, then a penalty of two percent shall accrue new text begin accrues new text end thereon for 260.7homestead property and a penalty of four percent on nonhomestead property. Thereafter, 260.8for homestead property, on the first day of November an additional penalty of four percent 260.9shall accrue new text begin accrues new text end and on the first day of December following, an additional penalty of 260.10two percent shall accrue new text begin accrues new text end and be new text begin is new text end charged on all such unpaid taxes. Thereafter, 260.11for nonhomestead property, on the first day of November and December following, an 260.12additional penalty of four percent for each month shall accrue new text begin accrues new text end and be new text begin is new text end charged 260.13on all such unpaid taxes. If one-half of such taxes shall new text begin are new text end not be paid prior to May 16 or 260.1421 days after the postmark date on the envelope containing the property tax statement, 260.15whichever is later, the same may be paid at any time prior to October 16, with accrued 260.16penalties to the date of payment added, and thereupon no penalty shall attach new text begin attaches new text end to 260.17the remaining one-half until October 16 following. 260.18    This section applies to payment of personal property taxes assessed against 260.19improvements to leased property, except as provided by section 277.01, subdivision 3. 260.20    A county may provide by resolution that in the case of a property owner that has 260.21multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in 260.22installments as provided in this subdivision. 260.23    The county treasurer may accept payments of more or less than the exact amount of 260.24a tax installment due. new text begin Payments must be applied first to the oldest installment that is due new text end 260.25 new text begin but which has not been fully paid. new text end If the accepted payment is less than the amount due, 260.26payments must be applied first to the penalty accrued for the year the payment is made new text begin new text end 260.27 new text begin or the installment being paid new text end . Acceptance of partial payment of tax does not constitute 260.28a waiver of the minimum payment required as a condition for filing an appeal under 260.29section 278.03 or any other law, nor does it affect the order of payment of delinquent 260.30taxes under section 280.39. 260.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for payments made on or after the new text end 260.32 new text begin day following final enactment. new text end 260.33    Sec. 46. Minnesota Statutes 2006, section 290B.03, subdivision 2, is amended to read: 260.34    Subd. 2. Qualifying homestead; defined. Qualifying homestead property is defined 260.35as the dwelling occupied as the homeowner's principal residence and so much of the land 261.1surrounding it as is reasonably necessary for use of the dwelling as a home and any other 261.2property used for purposes of a homestead as defined in section 273.13, subdivisions 261.322 and 23 , but not to exceed one acre. The homestead may be part of a multidwelling 261.4building and the land on which it is built. new text begin Property is not qualifying homestead property if new text end 261.5 new text begin a person or entity other than the applicant or the applicant's spouse holds an interest in the new text end 261.6 new text begin property as the vendor under a contract for deed or as a remainderperson. new text end 261.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for applications submitted on or new text end 261.8 new text begin after January 1, 2007. new text end 261.9    Sec. 47. Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read: 261.10    Subd. 3. Claimant. (a) "Claimant" means new text begin : new text end 261.11     new text begin (1) new text end a person, as that term is defined in section 290.01, subdivision 2, who owns 261.12forest land in Minnesota and files an application authorized by the Sustainable Forest 261.13Incentive Act. Claimant includes new text begin ; new text end 261.14     new text begin (2) new text end a purchaser or grantee if property enrolled in the program was sold or transferred 261.15after the original application was filed and prior to the annual incentive payment being 261.16made. new text begin ; or new text end 261.17     new text begin (3) an owner of land previously covered by an auxiliary forest contract that new text end 261.18 new text begin automatically qualifies for inclusion in the Sustainable Forest Incentive Act program new text end 261.19 new text begin pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2. new text end 261.20     The purchaser or grantee must notify the commissioner in writing of the sale or 261.21transfer of the property. new text begin Owners of land that qualifies for inclusion pursuant to section new text end 261.22 new text begin 88.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing new text end 261.23 new text begin of the expiration of the auxiliary forest contract or land trade with a governmental unit and new text end 261.24 new text begin submit an application to the commissioner by August 15 in order to be eligible to receive a new text end 261.25 new text begin payment by October 1 of that same year. new text end For purposes of section 290C.11, claimant also 261.26includes any person bound by the covenant required in section 290C.04. 261.27    (b) No more than one claimant is entitled to a payment under this chapter with 261.28respect to any tract, parcel, or piece of land enrolled under this chapter that has been 261.29assigned the same parcel identification number. When enrolled forest land is owned by 261.30two or more persons, the owners must determine between them which person is eligible to 261.31claim the payments provided under sections 290C.01 to 290C.11. In the case of property 261.32sold or transferred, the former owner and the purchaser or grantee must determine between 261.33them which person is eligible to claim the payments provided under sections 290C.01 to 261.34290C.11 . The owners, transferees, or grantees must notify the commissioner in writing 261.35which person is eligible to claim the payments. 262.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 262.2    Sec. 48. Minnesota Statutes 2006, section 290C.04, is amended to read: 262.3290C.04 APPLICATIONS. 262.4    (a) A landowner may apply to enroll forest land for the sustainable forest incentive 262.5program under this chapter. The claimant must complete, sign, and submit an application 262.6to the commissioner by September 30 in order for the land to become eligible beginning 262.7in the next year. The application shall be on a form prescribed by the commissioner and 262.8must include the information the commissioner deems necessary. At a minimum, the 262.9application must show the following information for the land and the claimant: (i) the 262.10claimant's Social Security number or state or federal business tax registration number and 262.11date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's 262.12parcel identification numbers for the tax parcels that completely contain the claimant's 262.13forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment 262.14in the program, (vi) the approved plan writer's signature and identification number, and 262.15(vii) proof, in a form specified by the commissioner, that the claimant has executed and 262.16acknowledged in the manner required by law for a deed, and recorded, a covenant that the 262.17land is not and shall not be developed in a manner inconsistent with the requirements and 262.18conditions of this chapter. The covenant shall state in writing that the covenant is binding 262.19on the claimant and the claimant's successor or assignee, and that it runs with the land 262.20for a period of not less than eight years. The commissioner shall specify the form of the 262.21covenant and provide copies upon request. The covenant must include a legal description 262.22that encompasses all the forest land that the claimant wishes to enroll under this section or 262.23the certificate of title number for that land if it is registered land. 262.24    (b) In all cases, the commissioner shall notify the claimant within 90 days after 262.25receipt of a completed application that either the land has or has not been approved for 262.26enrollment. A claimant whose application is denied may appeal the denial as provided in 262.27section 290C.11, paragraph (a) new text begin 290C.13 new text end . 262.28    (c) Within 90 days after the denial of an application, or within 90 days after the 262.29final resolution of any appeal related to the denial, the commissioner shall execute and 262.30acknowledge a document releasing the land from the covenant required under this chapter. 262.31The document must be mailed to the claimant and is entitled to be recorded. 262.32    (d) The Social Security numbers collected from individuals under this section are 262.33private data as provided in section 13.355. The federal business tax registration number 262.34and date of birth data collected under this section are also private data on individuals or 262.35nonpublic data, as defined in section 13.02, subdivisions 9 and 12, but may be shared 263.1with county assessors for purposes of tax administration and with county treasurers for 263.2purposes of the revenue recapture under chapter 270A. 263.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 263.4    Sec. 49. Minnesota Statutes 2006, section 290C.05, is amended to read: 263.5290C.05 ANNUAL CERTIFICATION. 263.6    On or before July 1 of each year, beginning with the year after the new text begin original new text end claimant 263.7has received an approved application, the commissioner shall send each claimant enrolled 263.8under the sustainable forest incentive program a certification form. new text begin For purposes of this new text end 263.9 new text begin section, the original claimant is the person that filed the first application under section new text end 263.10 new text begin 290C.04 to enroll the land in the program. new text end The claimant must sign the certification, 263.11attesting that the requirements and conditions for continued enrollment in the program are 263.12currently being met, and must return the signed certification form to the commissioner by 263.13August 15 of that same year. If the claimant does not return an annual certification form 263.14by the due date, the provisions in section 290C.11 apply. 263.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 263.16    Sec. 50. Minnesota Statutes 2006, section 290C.11, is amended to read: 263.17290C.11 PENALTIES FOR REMOVAL. 263.18    (a) If the commissioner determines that land enrolled in the sustainable forest 263.19incentive program is in violation of the conditions for enrollment as specified in section 263.20290C.03 , the commissioner shall notify the claimant of the intent to remove all enrolled 263.21land from the sustainable forest incentive program. The claimant has 60 days to appeal 263.22this determination new text begin under the provisions of section 290C.13 new text end . The appeal must be made 263.23in writing to the commissioner, who shall, within 60 days, notify the claimant as to the 263.24outcome of the appeal. Within 60 days after the commissioner denies an appeal, or within 263.25120 days after the commissioner received a written appeal if the commissioner has not 263.26made a determination in that time, the owner may appeal to Tax Court under chapter 271 263.27as if the appeal is from an order of the commissioner. 263.28    (b) If the commissioner determines the land is to be removed from the sustainable 263.29forest incentive program, the claimant is liable for payment to the commissioner in the 263.30amount equal to the payments received under this chapter for the previous four-year 263.31period, plus interest. The claimant has 90 days to satisfy the payment for removal of land 263.32from the sustainable forest incentive program under this section. If the penalty is not paid 263.33within the 90-day period under this paragraph, the commissioner shall certify the amount 264.1to the county auditor for collection as a part of the general ad valorem real property taxes 264.2on the land in the following taxes payable year. 264.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 264.4    Sec. 51. new text begin [290C.13] APPEALS. new text end 264.5     new text begin Subdivision 1. new text end new text begin Claimant right to reconsideration. new text end new text begin A claimant may obtain new text end 264.6 new text begin reconsideration by the commissioner of a determination removing enrolled land from the new text end 264.7 new text begin sustainable forest incentive program, a determination denying an application to enroll land new text end 264.8 new text begin in the program, or a denial of part or all of an incentive payment by filing an administrative new text end 264.9 new text begin appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if new text end 264.10 new text begin the action taken by the commissioner is the outcome of an administrative appeal. new text end 264.11     new text begin Subd. 2. new text end new text begin Appeal by claimant. new text end new text begin A claimant who wishes to seek administrative review new text end 264.12 new text begin must follow the procedures in subdivision 4. new text end 264.13     new text begin Subd. 3. new text end new text begin Notice date. new text end new text begin For purposes of this section, the term "notice date" means new text end 264.14 new text begin the date of the determination removing enrolled land or the date of the notice denying an new text end 264.15 new text begin application to enroll land or denying part or all of an incentive payment. new text end 264.16     new text begin Subd. 4. new text end new text begin Time and content for administrative appeal. new text end new text begin Within 60 days after the new text end 264.17 new text begin notice date, the claimant must file a written appeal with the commissioner. The appeal new text end 264.18 new text begin need not be in any particular form but must contain the following information: new text end 264.19     new text begin (1) name and address of the claimant; new text end 264.20     new text begin (2) if a corporation, the state of incorporation of the claimant, and the principal new text end 264.21 new text begin place of business of the corporation; new text end 264.22     new text begin (3) the Minnesota or federal business identification number or Social Security new text end 264.23 new text begin number of the claimant; new text end 264.24     new text begin (4) the date; new text end 264.25     new text begin (5) the periods involved and the amount of payment involved for each year or period; new text end 264.26     new text begin (6) the findings in the notice that the claimant disputes; new text end 264.27     new text begin (7) a summary statement that the claimant relies on for each exception; and new text end 264.28     new text begin (8) the claimant's signature or signature of the claimant's duly authorized agent. new text end 264.29     new text begin Subd. 5. new text end new text begin Extensions. new text end new text begin When requested in writing and within the time allowed for new text end 264.30 new text begin filing an administrative appeal, the commissioner may extend the time for filing an appeal new text end 264.31 new text begin for a period not more than 30 days from the expiration of the 60 days from the notice date. new text end 264.32     new text begin Subd. 6. new text end new text begin Determination of appeal. new text end new text begin On the basis of applicable law and available new text end 264.33 new text begin information, the commissioner shall determine the validity, if any, in whole or in part, new text end 264.34 new text begin of the appeal and notify the claimant of the decision. This notice must be in writing new text end 264.35 new text begin and contain the basis for the determination. new text end 265.1     new text begin Subd. 7. new text end new text begin Agreement determining issues under appeal. new text end new text begin When it appears to be in new text end 265.2 new text begin the best interests of the state, the commissioner may settle the amount of any incentive new text end 265.3 new text begin payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties, new text end 265.4 new text begin or interest that the commissioner has under consideration by virtue of an appeal filed new text end 265.5 new text begin under this section. An agreement must be in writing and signed by the commissioner and new text end 265.6 new text begin the claimant, or the claimant's representative authorized by the claimant to enter into an new text end 265.7 new text begin agreement. The agreement is final and conclusive and, except upon a showing of fraud or new text end 265.8 new text begin malfeasance, or misrepresentation of a material fact, the case must not be reopened as to new text end 265.9 new text begin the matters agreed upon. new text end 265.10     new text begin Subd. 8. new text end new text begin Appeal to Tax Court. new text end new text begin Within 60 days after the commissioner denies new text end 265.11 new text begin an appeal, or within 120 days after the commissioner received a written appeal if the new text end 265.12 new text begin commissioner has not made a determination in that time, the claimant may appeal to Tax new text end 265.13 new text begin Court under chapter 271 as if the appeal is from an order of the commissioner. new text end 265.14     new text begin Subd. 9. new text end new text begin Exemption from Administrative Procedure Act. new text end new text begin This section is not new text end 265.15 new text begin subject to chapter 14. new text end 265.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 265.17    Sec. 52. new text begin REPEALER. new text end 265.18 new text begin (a) new text end new text begin Minnesota Statutes 2006, section 270.073, new text end new text begin is repealed. new text end 265.19 new text begin (b) new text end new text begin Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52; new text end 265.20 new text begin and 270.53, new text end new text begin are repealed. new text end 265.21 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) of this section is effective beginning January 2, new text end 265.22 new text begin 2007, for taxes payable in 2008 and thereafter. Paragraph (b) of this section is effective new text end 265.23 new text begin the day following final enactment. new text end 265.24ARTICLE 13 265.25DEPARTMENT SPECIAL TAXES 265.26    Section 1. Minnesota Statutes 2006, section 62I.06, subdivision 6, is amended to read: 265.27    Subd. 6. Deficits new text begin Deficit assessments new text end . The association shall certify to the 265.28commissioner the estimated amount of any deficit remaining after the stabilization reserve 265.29fund has been exhausted and payment of the maximum final premium for all policyholders 265.30of the association. Within 60 days after the certification, the commissioner shall authorize 265.31the association to recover the members' respective shares of the deficit by assessing 265.32all members an amount sufficient to fully fund the obligations of the association. The 265.33assessment of each member shall be determined in the manner provided in section 62I.07. 266.1An assessment made pursuant to this section shall be deductible by the member from past 266.2or future premium taxes due the state new text begin as provided in section 297I.20, subdivision 2 new text end . 266.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax returns due on or after January new text end 266.4 new text begin 1, 2008. new text end 266.5    Sec. 2. Minnesota Statutes 2006, section 71A.04, subdivision 1, is amended to read: 266.6    Subdivision 1. Premium tax. The attorney-in-fact, in lieu of all taxes, state, county, 266.7and municipal, shall file with the commissioner of revenue all returns and pay to the 266.8commissioner of revenue all amounts required under chapter 297I. 266.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 266.10    Sec. 3. Minnesota Statutes 2006, section 287.22, is amended to read: 266.11287.22 EXEMPTIONS. 266.12    The tax imposed by section 287.21 does not apply to: 266.13    (1) An executory contract for the sale of real property under which the purchaser is 266.14entitled to or does take possession of the real property, or any assignment or cancellation 266.15of the contract; 266.16    (2) A mortgage or an amendment, assignment, extension, partial release, or 266.17satisfaction of a mortgage; 266.18    (3) A will; 266.19    (4) A plat; 266.20    (5) A lease, amendment of lease, assignment of lease, or memorandum of lease; 266.21    (6) A deed, instrument, or writing in which the United States or any agency or 266.22instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee; 266.23    (7) A deed for a cemetery lot or lots; 266.24    (8) A deed of distribution by a personal representative; 266.25    (9) A deed to or from a co-owner partitioning their undivided interest in the same 266.26piece of real property; 266.27    (10) A deed or other instrument of conveyance issued pursuant to a permanent 266.28school fund land exchange under section 92.121 and related laws; 266.29    (11) A referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale; 266.30    (12) A referee's, sheriff's, or certificate holder's certificate of redemption from a 266.31mortgage or lien foreclosure sale issued to the redeeming mortgagor or lienee new text begin pursuant to new text end 266.32 new text begin section 580.23 or other statute applicable to redemption by an owner of real property new text end ; 267.1    (13) A deed, instrument, or writing which grants, creates, modifies, or terminates an 267.2easement; and 267.3    (14) A decree of marriage dissolution, as defined in section 287.01, subdivision 4, 267.4or a deed or other instrument between the parties to the dissolution made pursuant to 267.5the terms of the decree. 267.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 267.7    Sec. 4. Minnesota Statutes 2006, section 287.2205, is amended to read: 267.8287.2205 TAX-FORFEITED LAND. 267.9    Before a state deed for tax-forfeited land may be issued, the deed tax must be paid 267.10by the purchaser of tax-forfeited land whether the purchase is the result of a public 267.11auction or private sale or a repurchase of tax-forfeited land. State agencies and local 267.12units of government that acquire tax-forfeited land by purchase or any other means are 267.13subject to this section. new text begin The deed tax is $1.65 for a conveyance of tax-forfeited lands to a new text end 267.14 new text begin governmental subdivision for an authorized public use under section 282.01, subdivision new text end 267.15 new text begin 1a, or for redevelopment purposes under section 282.01, subdivision 1b. new text end 267.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 267.17    Sec. 5. Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read: 267.18    Subd. 4. Use tax; prescription drugs. (a) A person that receives prescription drugs 267.19for resale or use in Minnesota, other than from a wholesale drug distributor that is subject 267.20to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug 267.21distributor multiplied by the tax percentage specified in this section. Liability for the tax is 267.22incurred when prescription drugs are received or delivered in Minnesota by the person. 267.23    (b) A person that receives prescription drugs for use in Minnesota from a nonresident 267.24pharmacy required to be registered under section is subject to a tax equal to 267.25the price paid by the nonresident pharmacy to the wholesale drug distributor or the 267.26price received by the nonresident pharmacy, whichever is lower, multiplied by the tax 267.27percentage specified in this section. Liability for the tax is incurred when prescription 267.28drugs are received in Minnesota by the person. 267.29    (c) new text begin (b) new text end A tax imposed under this subdivision does not apply to purchases by an 267.30individual for personal consumption. 267.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 268.1    Sec. 6. Minnesota Statutes 2006, section 295.52, subdivision 4a, is amended to read: 268.2    Subd. 4a. Tax collection. A wholesale drug distributor with nexus in Minnesota, 268.3who is not subject to tax under subdivision 3, on all or a particular transaction or a 268.4nonresident pharmacy with nexus in Minnesota, is required to collect the tax imposed 268.5under subdivision 4, from the purchaser of the drugs and give the purchaser a receipt 268.6for the tax paid. The tax collected shall be remitted to the commissioner in the manner 268.7prescribed by section 295.55, subdivision 3. 268.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 268.9    Sec. 7. Minnesota Statutes 2006, section 295.54, subdivision 2, is amended to read: 268.10    Subd. 2. Pharmacy refund. A pharmacy may claim an annual refund against the 268.11total amount of tax, if any, the pharmacy owes during that calendar year under section 268.12295.52, subdivision 2 . The refund shall equal the amount paid by the pharmacy to a 268.13wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend 268.14drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage 268.15specified in section 295.52. If the amount of the refund exceeds the tax liability of the 268.16pharmacy under section 295.52, subdivision 1b new text begin 2 new text end , the commissioner shall provide the 268.17pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply 268.18for the refund on the annual return as provided under section 295.55, subdivision 5. The 268.19refund must be claimed within one year of the due date of the return. Interest on refunds 268.20paid under this subdivision will begin to accrue 60 days after the date a claim for refund is 268.21filed. For purposes of this subdivision, the date a claim is filed is the due date of the return 268.22or the date of the actual claim for refund, whichever is later. 268.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 268.24    Sec. 8. Minnesota Statutes 2006, section 297F.06, subdivision 4, is amended to read: 268.25    Subd. 4. Tobacco products use tax. The tobacco products use tax does not apply to 268.26the possession, use, or storage of tobacco products that new text begin if (1) the tobacco products new text end have an 268.27aggregate cost in any calendar month to the consumer of $100 new text begin $50 new text end or less new text begin , and (2) the new text end 268.28 new text begin tobacco products were carried into this state by that consumer new text end . 268.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for the possession, use, or storage of new text end 268.30 new text begin tobacco products on or after July 1, 2007. new text end 268.31    Sec. 9. Minnesota Statutes 2006, section 297F.25, is amended by adding a subdivision 268.32to read: 269.1     new text begin Subd. 3a. new text end new text begin Consumer use tax; use tax return; cigarette consumer. new text end new text begin (a) On or before new text end 269.2 new text begin the 18th day of each calendar month, a consumer who, during the preceding calendar new text end 269.3 new text begin month, has acquired title to or possession of cigarettes for use or storage in this state, upon new text end 269.4 new text begin which the sales tax imposed by this section has not been paid, shall file a return with the new text end 269.5 new text begin commissioner showing the quantity of cigarettes so acquired or possessed. The return new text end 269.6 new text begin must be made in the form and manner prescribed by the commissioner, and must contain new text end 269.7 new text begin any other information required by the commissioner. The return must be accompanied by new text end 269.8 new text begin a remittance for the full unpaid sales tax liability shown by it. new text end 269.9     new text begin (b) The tax imposed under paragraph (a) does not apply if (1) the consumer has new text end 269.10 new text begin acquired title to or possession of cigarettes for use or storage in this state in quantities new text end 269.11 new text begin of 200 or fewer in the month, and (2) the cigarettes were carried into this state by that new text end 269.12 new text begin consumer. new text end 269.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for cigarettes which a consumer has new text end 269.14 new text begin acquired title to or possession of on or after July 1, 2007. new text end 269.15    Sec. 10. Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read: 269.16    Subdivision 1. Insurance policies surcharge. (a) Except as otherwise provided in 269.17subdivision 2, each new text begin licensed new text end insurer engaged in writing policies of homeowner's insurance 269.18authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or 269.19commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the 269.20gross premiums and assessments, less return premiums, on direct business received by 269.21the company, or by its agents for it, for homeowner's insurance policies, commercial fire 269.22policies, and commercial nonliability insurance policies in this state. 269.23    (b) The surcharge amount collected under paragraph (a) new text begin or subdivision 2, paragraph new text end 269.24 new text begin (b), new text end may not be considered premium for any other purpose. The surcharge amount 269.25 new text begin under paragraph (a) new text end must be separately stated on either a billing or policy declaration new text begin or new text end 269.26 new text begin document containing similar information new text end sent to an insured. 269.27    (c) Amounts collected by the commissioner under this section must be deposited in 269.28the fire safety account established pursuant to subdivision 3. 269.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2007, and applies to policies new text end 269.30 new text begin written or renewed on or after July 1, 2007. new text end 269.31    Sec. 11. Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read: 270.1    Subd. 2. Exemptions. (a) This section does not apply to a farmers' mutual fire 270.2insurance company or township mutual fire insurance company in Minnesota organized 270.3under chapter 67A. 270.4    (b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to 270.5transact business in Minnesota shall elect to remit to the Department of Revenue for 270.6deposit in the fire safety account either (1) the surcharge amount collected new text begin imposed new text end under 270.7this section new text begin subdivision 1 on all premiums subject to that surcharge new text end , or (2) a surcharge of 270.8one-half of one percent on the gross fire premiums and assessments, less return premiums, 270.9on all direct business received by the insurer or agents of the insurer in Minnesota, in 270.10cash or otherwise, during the year. 270.11     new text begin (c) The election must be made prior to July 1, 2007, for policies written or renewed new text end 270.12 new text begin between July 1, 2007, and December 31, 2007, and by December 31 of each year for new text end 270.13 new text begin insurance for policies written or renewed in the succeeding calendar year. An insurer new text end 270.14 new text begin who elects to remit the one-half of one percent surcharge on gross fire premiums and new text end 270.15 new text begin assessments must not charge the insured the surcharge imposed under subdivision 1. new text end 270.16    (c) new text begin (d) new text end For purposes of this subdivision, "gross fire premiums and assessments" 270.17includes premiums on policies covering fire risks only on automobiles, whether written or 270.18under floater form or otherwise. 270.19 new text begin EFFECTIVE DATE. new text end new text begin The requirement for certain insurers to make an election new text end 270.20 new text begin before July 1, 2007, is effective the day following final enactment. The rest of this section new text end 270.21 new text begin is effective July 1, 2007, and applies to insurance policies written or renewed on or after new text end 270.22 new text begin that date. new text end 270.23    Sec. 12. Minnesota Statutes 2006, section 297I.20, subdivision 2, is amended to read: 270.24    Subd. 2. Joint Underwriting Association offset. An new text begin insurance company may offset new text end 270.25 new text begin against its premium tax liability to this state any amount paid for an new text end assessment made 270.26pursuant to section 62I.06, subdivision 6, shall be deductible by the member from past 270.27or future premium taxes due the state. new text begin The offset against premium tax liability must be new text end 270.28 new text begin claimed beginning with the taxable year that the assessment is paid. To the extent that the new text end 270.29 new text begin allowable offset exceeds the tax liability, the remaining offset must be carried forward to new text end 270.30 new text begin succeeding taxable years until the entire offset has been credited against the insurance new text end 270.31 new text begin company's liability for premium tax under this chapter. new text end 270.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax returns due on or after January new text end 270.33 new text begin 1, 2008. new text end 271.1    Sec. 13. Minnesota Statutes 2006, section 297I.40, subdivision 5, is amended to read: 271.2    Subd. 5. Definition of tax. The term "tax" as used in this section means the tax 271.3imposed by section 297I.05, subdivisions 1 to 6, new text begin 11, new text end and 12, paragraphs (a), clauses (1) 271.4to (5), (b), and (e) new text begin (d) new text end , without regard to the retaliatory provisions of section 297I.05, 271.5subdivision 11 , and the new text begin less any new text end offset in section 297I.20. 271.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for tax returns due on or after January new text end 271.7 new text begin 1, 2008. new text end 271.8ARTICLE 14 271.9DEPARTMENT MISCELLANEOUS 271.10    Section 1. Minnesota Statutes 2006, section 16D.04, subdivision 1, is amended to read: 271.11    Subdivision 1. Duties. The commissioner shall provide services to the state and its 271.12 new text begin referring new text end agencies to collect debts owed the state new text begin referred for collection under this chapter new text end . 271.13The commissioner is not a collection agency as defined by section 332.31, subdivision 3, 271.14and is not licensed, bonded, or regulated by the commissioner of commerce under sections 271.15332.31 to 332.35 or 332.38 to 332.45. The commissioner is subject to section 332.37, 271.16except clause (9), (10), (12), or (19). Debts referred to the commissioner for collection 271.17under section 256.9792 may in turn be referred by the commissioner to the enterprise. 271.18An audited financial statement may not be required as a condition of debt placement with 271.19a private agency if the private agency: (1) has errors and omissions coverage under a 271.20professional liability policy in an amount of at least $1,000,000; or (2) has a fidelity bond 271.21to cover actions of its employees, in an amount of at least $100,000. In cases of debts 271.22referred under section 256.9792, the provisions of this chapter and section 256.9792 apply 271.23to the extent they are not in conflict. If they are in conflict, the provisions of section 271.24256.9792 control. For purposes of this chapter, the referring agency for such debts remains 271.25the Department of Human Services. 271.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 271.27    Sec. 2. Minnesota Statutes 2006, section 16D.04, subdivision 2, is amended to read: 271.28    Subd. 2. Agency participation. (a) A referring agency may, at its option, new text begin must new text end 271.29refer new text begin , by electronic means, new text end debts to the commissioner for collection. The ultimate 271.30Responsibility for the debt, including the reporting of the debt to the commissioner of 271.31finance and the decision with regard to the continuing collection and uncollectibility of the 271.32debt, remains with the referring agency. 272.1    (b) new text begin Before a debt becomes 121 days past due, a referring agency may refer the new text end 272.2 new text begin debt to the commissioner for collection at any time after a debt becomes delinquent and new text end 272.3 new text begin uncontested and the debtor has no further administrative appeal of the amount of the new text end 272.4 new text begin debt. new text end When a debt owed to a state new text begin referring new text end agency becomes 121 days past due, the state 272.5 new text begin referring new text end agency must refer the debt to the commissioner for collection. This requirement 272.6does not apply if there is a dispute over the amount or validity of the debt, if the debt is the 272.7subject of legal action or administrative proceedings, or the agency determines that the 272.8debtor is adhering to acceptable payment arrangements. The commissioner, in consultation 272.9with the commissioner of finance, may provide that certain types of debt need not be 272.10referred to the commissioner for collection under this paragraph. Methods and procedures 272.11for referral must follow internal guidelines prepared by the commissioner of finance. 272.12    (c) If the referring agency is a court, the court must furnish a debtor's Social Security 272.13number to the commissioner when the court refers the debt. 272.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for debts referred on or after January new text end 272.15 new text begin 1, 2008. new text end 272.16    Sec. 3. Minnesota Statutes 2006, section 16D.11, subdivision 2, is amended to read: 272.17    Subd. 2. Computation. At the time a debt is referred, the amount of collection 272.18costs is equal to 15 new text begin 17 new text end percent of the debt, or 25 percent of the debt remaining unpaid if 272.19the commissioner or private collection agency has to take enforced collection action 272.20by serving a summons and complaint on or entering judgment against the debtor, or by 272.21utilizing any of the remedies authorized under section 16D.08, subdivision 2, except for 272.22the remedies in sections and or when referred by the commissioner for 272.23additional collection activity by a private collection agency. If, after referral of a debt to 272.24a private collection agency, the debtor requests cancellation of collection costs under 272.25subdivision 3, the debt must be returned to the commissioner for resolution of the request. 272.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for debts referred on or after January new text end 272.27 new text begin 1, 2008. new text end 272.28    Sec. 4. Minnesota Statutes 2006, section 16D.11, subdivision 7, is amended to read: 272.29    Subd. 7. Adjustment of rate. By June 1 of each year, the commissioner of finance 272.30shall determine the rate of collection costs for debts referred to the enterprise during 272.31the next fiscal year. The rate is a percentage of the debts in an amount that most nearly 272.32equals the costs of the enterprise necessary to process and collect referred debts under this 272.33chapter. In no event shall the rate of collection costs when a debt is first referred exceed 273.1three-fifths of the maximum collection costs, and in no event shall the rate of the maximum 273.2collection costs exceed 25 percent of the debt. Determination of the rate of collection costs 273.3under this section is not subject to the fee setting requirements of section 16A.1285. 273.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2008. new text end 273.5    Sec. 5. new text begin [270C.435] REFUNDS NOT SUBJECT TO ATTACHMENT OR new text end 273.6 new text begin GARNISHMENT. new text end 273.7     new text begin No amount of a tax refund or other payment payable by the commissioner to new text end 273.8 new text begin a taxpayer is assignable or subject to execution, levy, attachment, garnishment, lien new text end 273.9 new text begin foreclosure, or other legal process, except as specifically provided by law. new text end 273.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 273.11    Sec. 6. Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read: 273.12    Subd. 2. Required and excluded tax preparers. (a) Subject to the limitations 273.13of paragraph (b), the commissioner must publish lists of tax preparers new text begin as defined in new text end 273.14 new text begin section 289A.60, subdivision 13, paragraph (f), new text end who have been convicted under section 273.15289A.63 new text begin or assessed penalties in excess of $1,000 under section 289A.60, subdivision new text end 273.16 new text begin 13, paragraph (a) new text end . 273.17    (b) For the purposes of this section, tax preparers are not subject to publication if: 273.18    (1) an administrative or court action contesting the penalty has been filed or served 273.19and is unresolved at the time when notice would be given under subdivision 3; 273.20    (2) an appeal period to contest the penalty has not expired; or 273.21    (3) the commissioner has been notified that the tax preparer is deceased. 273.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for penalties on returns filed after new text end 273.23 new text begin December 31, 2007. new text end 273.24    Sec. 7. Minnesota Statutes 2006, section 270C.56, subdivision 1, is amended to read: 273.25    Subdivision 1. Liability imposed. A person who, either singly or jointly with 273.26others, has the control of, supervision of, or responsibility for filing returns or reports, 273.27paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or 273.28a person who is liable under any other law, is liable for the payment of taxes, penalties, 273.29and interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 290.92 273.30and 297E.02 new text begin , and, for the taxes listed in this subdivision, the applicable penalties for new text end 273.31 new text begin nonpayment under section 289A.60 new text end . 274.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for personal liability assessments new text end 274.2 new text begin made on or after the day following final enactment. new text end 274.3    Sec. 8. Minnesota Statutes 2006, section 270C.63, subdivision 9, is amended to read: 274.4    Subd. 9. Period of limitations. The lien imposed by this section shall, 274.5notwithstanding any other provision of law to the contrary, be enforceable from the time 274.6the lien arises and for ten years from the date of filing the notice of lien, which must be 274.7filed by the commissioner within five years after the date of assessment of the tax or final 274.8administrative or judicial determination of the assessment. new text begin A notice of lien filed at the new text end 274.9 new text begin Office of the Secretary of State may be transcribed to any county within ten years after the new text end 274.10 new text begin date of its filing, but the transcription does not extend the period during which the lien is new text end 274.11 new text begin enforceable. new text end A notice of lien filed in one county may be transcribed to the secretary of 274.12state or to any other county within ten years after the date of its filing, but the transcription 274.13shall not extend the period during which the lien is enforceable. A notice of lien may be 274.14renewed by the commissioner before the expiration of the ten-year period for an additional 274.15ten years. The taxpayer must receive written notice of the renewal. 274.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for liens transcribed on or after the new text end 274.17 new text begin day following final enactment. new text end 274.18    Sec. 9. Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read: 274.19    Subd. 3. State reimbursement. (a) By February 15 of each year, the treasurer of 274.20the relief association shall apply to the commissioner of revenue new text begin Each year, to be eligible new text end 274.21for state reimbursement of the amount of supplemental benefits paid under subdivision 2 274.22during the preceding calendar year new text begin , the relief association must apply to the commissioner new text end 274.23 new text begin of revenue by February 15 new text end . By March 15 the commissioner shall reimburse the relief 274.24association for the amount of the supplemental benefits paid to qualified recipients. 274.25    (b) The commissioner of revenue shall prescribe the form of and supporting 274.26information that must be supplied as part of the application for state reimbursement. new text begin new text end 274.27 new text begin The commissioner of revenue shall reimburse the relief association by paying the new text end 274.28 new text begin reimbursement amount to the treasurer of the municipality where the association is located. new text end 274.29 new text begin Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement new text end 274.30 new text begin to the treasurer of the association if the association has filed a financial report with the new text end 274.31 new text begin municipality. If the relief association has not filed a financial report with the municipality, new text end 274.32 new text begin the municipal treasurer shall delay transmission of the reimbursement payment to the new text end 274.33 new text begin association until the complete financial report is filed. If the association has dissolved or new text end 274.34 new text begin has been removed as a trustee of state aid, the treasurer shall deposit the money in a new text end 275.1 new text begin special account in the municipal treasury, and the money may be disbursed only for the new text end 275.2 new text begin purposes and in the manner provided in section 424A.08. When paid to the association, new text end 275.3    (c) the reimbursement payment must be deposited in the special fund of the relief 275.4association. 275.5    (d) new text begin (c) new text end A sum sufficient to make the payments is appropriated from the general fund 275.6to the commissioner of revenue. 275.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2007, and thereafter. new text end 275.8ARTICLE 15 275.9MISCELLANEOUS 275.10    Section 1. Minnesota Statutes 2006, section 3.987, subdivision 1, is amended to read: 275.11    Subdivision 1. Local impact notes. The commissioner of finance shall coordinate 275.12the development of a local impact note for any proposed legislation introduced after June 275.1330, 1997, or any rule proposed after December 31, 1999, upon request of the chair or the 275.14ranking minority member of either legislative Tax Committee. Upon receipt of a request 275.15to prepare a local impact note, the commissioner must notify the authors of the proposed 275.16legislation or, for an administrative rule, the head of the relevant executive agency or 275.17department, that the request has been made. The local impact note must be made available 275.18to the public upon request. If the action is among the exceptions listed in section 3.988, 275.19a local impact note need not be requested nor prepared. The commissioner shall make 275.20a reasonable and timely estimate of the local fiscal impact on each type of political 275.21subdivision that would result from the proposed legislation. The commissioner of finance 275.22may require any political subdivision or the commissioner of an administrative agency 275.23of the state to supply in a timely manner any information determined to be necessary to 275.24determine local fiscal impact. The political subdivision, its representative association, or 275.25commissioner shall convey the requested information to the commissioner of finance with 275.26a signed statement to the effect that the information is accurate and complete to the best 275.27of its ability. The political subdivision, its representative association, or commissioner, 275.28when requested, shall update its determination of local fiscal impact based on actual 275.29cost or revenue figures, improved estimates, or both. Upon completion of the note, the 275.30commissioner must provide a copy to the authors of the proposed legislation or, for an 275.31administrative rule, to the head of the relevant executive agency or department. 275.32    Sec. 2. Minnesota Statutes 2006, section 3.988, subdivision 3, is amended to read: 276.1    Subd. 3. Miscellaneous exceptions. A local impact note or an attachment as 276.2provided in section 3.987, subdivision 2, need not be prepared for the cost of a mandated 276.3action if the law, including a rulemaking, containing the mandate: 276.4    (1) accommodates a specific local request; 276.5    (2) results in no new local government duties; 276.6    (3) leads to revenue losses from exemptions to taxes; 276.7    (4) provided only clarifying or conforming, nonsubstantive charges on local 276.8government; 276.9    (5) imposes additional net local costs that are minor (an amount less than or equal 276.10to one-half of one percent of the local revenue base as defined in section 477A.011, 276.11subdivision 27 , or $50,000, whichever is less for any single local government if the 276.12mandate does not apply statewide or less than $1,000,000 if the mandate is statewide); 276.13    (6) is a law or executive order enacted before July 1, 1997, or a rule initially 276.14implementing a law enacted before July 1, 1997; 276.15    (7) implements something other than a law or executive order, such as a federal, 276.16court, or voter-approved mandate; 276.17    (8) results in savings that equal or exceed costs; 276.18    (9) requires the holding of elections; 276.19    (10) ensures due process or equal protection; 276.20    (11) provides for the notification and conduct of public meetings; 276.21    (12) establishes the procedures for administrative and judicial review of actions 276.22taken by political subdivisions; 276.23    (13) protects the public from malfeasance, misfeasance, or nonfeasance by officials 276.24of political subdivisions; 276.25    (14) relates directly to financial administration, including the levy, assessment, 276.26and collection of taxes; 276.27    (15) relates directly to the preparation and submission of financial audits necessary 276.28to the administration of state laws; or 276.29    (16) requires uniform standards to apply to public and private institutions without 276.30differentiation. 276.31    Sec. 3. Minnesota Statutes 2006, section 3.989, subdivision 2, is amended to read: 276.32    Subd. 2. Report new text begin Compilation of local impact notes new text end . The commissioner of finance 276.33shall prepare by September 1, 2000, and by September 1 of each even-numbered year 276.34thereafter, a report new text begin compilation new text end of the costs of local mandates established after June 30, 276.351997 new text begin key impact notes requested by the legislature during the previous biennial session new text end 277.1 new text begin as provided in section 3.987. The commissioner may consult with local government new text end 277.2 new text begin representatives and legislative fiscal staff to determine which local impact notes were key new text end . 277.3    The commissioner shall include the statewide total of the statement of costs of local 277.4mandates after June 30, 1997, as a notation in the state biennial budget. 277.5    Sec. 4. Minnesota Statutes 2006, section 3.989, subdivision 3, is amended to read: 277.6    Subd. 3. Certain political subdivisions; report. The political subdivisions that 277.7have opted to administer class B state mandates shall report to the commissioner of 277.8finance by September 1, 1998, and by September 1 of each year thereafter, identifying 277.9each instance when revenue for a class B state mandate has fallen below 85 percent of 277.10the total cost of the program and the political subdivision intends to cease administration 277.11of the program. 277.12    The commissioner shall forward a copy of the report to the chairs of the appropriate 277.13funding committees of the senate and the house for proposed inclusion of the shortfall as a 277.14line item appropriation in the state budget for the next fiscal year. 277.15    The political subdivision may exercise its option to cease administration only if the 277.16legislature has failed to include the shortfall as an appropriation in the state budget for 277.17the next fiscal year. 277.18    Sec. 5. Minnesota Statutes 2006, section 16A.103, subdivision 1a, is amended to read: 277.19    Subd. 1a. Forecast parameters. The forecast must assume the continuation of 277.20current laws and reasonable estimates of projected growth in the national and state 277.21economies and affected populations. Revenue must be estimated for all sources provided 277.22for in current law. Expenditures must be estimated for all obligations imposed by law and 277.23those projected to occur as a result of new text begin inflation and new text end variables outside the control of the 277.24legislature. Expenditure estimates must not include an allowance for inflation. new text begin A general new text end 277.25 new text begin inflation estimate must not include inflation on debt service or on programs for which a new text end 277.26 new text begin statutory growth factor is already included in the forecast. new text end 277.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 277.28    Sec. 6. Minnesota Statutes 2006, section 16A.103, subdivision 1b, is amended to read: 277.29    Subd. 1b. Forecast variable. In determining new text begin the rate of inflation, the application new text end 277.30 new text begin of inflation, new text end the amount of state bonding as it affects debt service, the calculation of 277.31investment income, and the other variables to be included in the expenditure part of the 277.32forecast, the commissioner must consult with the chairs and lead minority members of the 277.33senate State Government Finance Committee and the house Ways and Means Committee, 278.1and legislative fiscal staff. This consultation must occur at least three weeks before the 278.2forecast is to be released. No later than two weeks prior to the release of the forecast, 278.3the commissioner must inform the chairs and lead minority members of the senate 278.4State Government Finance Committee and the house Ways and Means Committee, and 278.5legislative fiscal staff of any changes in these variables from the previous forecast. 278.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 278.7    Sec. 7. Minnesota Statutes 2006, section 16A.103, subdivision 2, is amended to read: 278.8    Subd. 2. Local revenue. In February and November of each year, the commissioner 278.9of revenue shall prepare and deliver to the governor and the legislature forecasts of 278.10revenue to be received by school districts as a group, counties as a group, and the group of 278.11cities and towns that have a population of more than 2,500. The forecasts must assume 278.12the continuation of current laws, projections of valuation changes in real property, and 278.13reasonable estimates of projected growth in the national and state economies and affected 278.14populations. Revenue must be estimated for property taxes, state and federal aids, local 278.15sales taxes, if any, and a single projection for all other revenue for each group of affected 278.16local governmental units. As part of the February forecast, the commissioner of revenue 278.17shall report to the governor and legislature on which groups of local government units 278.18exceeded the revenue targets of the governor and legislature in the most recent biennium. 278.19    Sec. 8. Minnesota Statutes 2006, section 16A.152, subdivision 1b, is amended to read: 278.20    Subd. 1b. Budget reserve increase. On July 1, 2003 new text begin 2007 new text end , the commissioner of 278.21finance shall transfer $300,000,000 new text begin $150,000,000 new text end to the budget reserve account in the 278.22general fund. On July 1, 2004, the commissioner of finance shall transfer $296,000,000 to 278.23the budget reserve account in the general fund. The amounts new text begin amount new text end necessary for this 278.24purpose are new text begin is new text end appropriated from the general fund. 278.25    Sec. 9. Minnesota Statutes 2006, section 16A.152, subdivision 2, is amended to read: 278.26    Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general 278.27fund revenues and expenditures, the commissioner of finance determines that there will be 278.28a positive unrestricted budgetary general fund balance at the close of the biennium, the 278.29commissioner of finance must allocate money to the following accounts and purposes in 278.30priority order: 278.31    (1) the cash flow account established in subdivision 1 until that account reaches 278.32$350,000,000; 279.1    (2) the budget reserve account established in subdivision 1a until that account 279.2reaches $653,000,000 new text begin $803,000,000 new text end ; 279.3    (3) the amount necessary to increase the aid payment schedule for school district 279.4aids and credits payments in section 127A.45 to not more than 90 percent rounded to the 279.5nearest tenth of a percent without exceeding the amount available and with any remaining 279.6funds deposited in the budget reserve; and 279.7    (4) the amount necessary to restore all or a portion of the net aid reductions under 279.8section 127A.441 and to reduce the property tax revenue recognition shift under section 279.9123B.75, subdivision 5 , paragraph (c), and Laws 2003, First Special Session chapter 9, 279.10article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section 279.1120, by the same amount. 279.12    (b) The amounts necessary to meet the requirements of this section are appropriated 279.13from the general fund within two weeks after the forecast is released or, in the case of 279.14transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations 279.15schedules otherwise established in statute. 279.16    (c) To the extent that a positive unrestricted budgetary general fund balance is 279.17projected, appropriations under this section must be made before section takes 279.18effect. 279.19    (d) The commissioner of finance shall certify the total dollar amount of the 279.20reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The 279.21commissioner of education shall increase the aid payment percentage and reduce the 279.22property tax shift percentage by these amounts and apply those reductions to the current 279.23fiscal year and thereafter. 279.24    Sec. 10. Minnesota Statutes 2006, section 80A.28, subdivision 1, as amended by Laws 279.252007, chapter 57, article 3, section 34, is amended to read: 279.26    Subdivision 1. Registration or notice filing fee. (a) There shall be a filing fee of 279.27$100 for every application for registration or notice filing. There shall be an additional fee 279.28of one-tenth of one percent of the maximum aggregate offering price at which the securities 279.29are to be offered in this state, and the maximum combined fees shall not exceed $300. 279.30    (b) When an application for registration is withdrawn before the effective date or a 279.31preeffective stop order is entered under section 80A.13, subdivision 1, all but the $100 279.32filing fee shall be returned. If an application to register securities is denied, the total of all 279.33fees received shall be retained. 279.34    (c) Where a filing is made in connection with a federal covered security under 279.35section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing. 280.1If the filing is made in connection with redeemable securities issued by an open end 280.2management company or unit investment trust, as defined in the Investment Company Act 280.3of 1940, there is an additional annual fee of 1/20 of one percent of the maximum aggregate 280.4offering price at which the securities are to be offered in this state during the notice filing 280.5period. The fee must be paid at the time of the initial filing and thereafter in connection 280.6with each renewal no later than July 1 of each year and must be sufficient to cover the 280.7shares the issuer expects to sell in this state over the next 12 months. If during a current 280.8notice filing the issuer determines it is likely to sell shares in excess of the shares for 280.9which fees have been paid to the commissioner, the issuer shall submit an amended notice 280.10filing to the commissioner under section 80A.122, subdivision 1, clause (3), together with 280.11a fee of 1/20 of one percent of the maximum aggregate offering price of the additional 280.12shares. Shares for which a fee has been paid, but which have not been sold at the time 280.13of expiration of the notice filing, may not be sold unless an additional fee to cover the 280.14shares has been paid to the commissioner as provided in this section and section 80A.122, 280.15subdivision 4a . If the filing is made in connection with redeemable securities issued by 280.16such a company or trust, there is no maximum fee for securities filings made according to 280.17this paragraph. If the filing is made in connection with any other federal covered security 280.18under Section 18(b)(2) of the Securities Act of 1933, there is an additional fee of one-tenth 280.19of one percent of the maximum aggregate offering price at which the securities are to be 280.20offered in this state, and the combined fees shall not exceed $300. Beginning with fiscal 280.21year 2001 and continuing each fiscal year thereafter, as of the last day of each fiscal year, 280.22the commissioner shall determine the total amount of all fees that were collected under 280.23this paragraph in connection with any filings made for that fiscal year for securities of an 280.24open-end investment company on behalf of a security that is a federal covered security 280.25pursuant to section 18(b)(2) of the Securities Act of 1933. To the extent the total fees 280.26collected by the commissioner in connection with these filings exceed $25,600,000 in a 280.27fiscal year, the commissioner shall refund, on a pro rata basis, to all persons who paid any 280.28fees for that fiscal year, the amount of fees collected by the commissioner in excess of 280.29$25,600,000. No individual refund is required of amounts of $100 or less for a fiscal year. 280.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 280.31    Sec. 11. Minnesota Statutes 2006, section 80A.65, subdivision 1, as amended by Laws 280.322007, chapter 57, article 3, section 35, is amended to read: 280.33    Subdivision 1. Registration or notice filing fee. (a) There shall be a filing fee of 280.34$100 for every application for registration or notice filing. There shall be an additional fee 281.1of one-tenth of one percent of the maximum aggregate offering price at which the securities 281.2are to be offered in this state, and the maximum combined fees shall not exceed $300. 281.3    (b) When an application for registration is withdrawn before the effective date 281.4or a preeffective stop order is entered under section 80A.54, all but the $100 filing fee 281.5shall be returned. If an application to register securities is denied, the total of all fees 281.6received shall be retained. 281.7    (c) Where a filing is made in connection with a federal covered security under 281.8section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing. 281.9If the filing is made in connection with redeemable securities issued by an open end 281.10management company or unit investment trust, as defined in the Investment Company Act 281.11of 1940, there is an additional annual fee of 1/20 of one percent of the maximum aggregate 281.12offering price at which the securities are to be offered in this state during the notice filing 281.13period. The fee must be paid at the time of the initial filing and thereafter in connection 281.14with each renewal no later than July 1 of each year and must be sufficient to cover the 281.15shares the issuer expects to sell in this state over the next 12 months. If during a current 281.16notice filing the issuer determines it is likely to sell shares in excess of the shares for which 281.17fees have been paid to the administrator, the issuer shall submit an amended notice filing 281.18to the administrator under section 80A.50, together with a fee of 1/20 of one percent of the 281.19maximum aggregate offering price of the additional shares. Shares for which a fee has 281.20been paid, but which have not been sold at the time of expiration of the notice filing, may 281.21not be sold unless an additional fee to cover the shares has been paid to the administrator 281.22as provided in this section and section 80A.50. If the filing is made in connection with 281.23redeemable securities issued by such a company or trust, there is no maximum fee for 281.24securities filings made according to this paragraph. If the filing is made in connection 281.25with any other federal covered security under Section 18(b)(2) of the Securities Act of 281.261933, there is an additional fee of one-tenth of one percent of the maximum aggregate 281.27offering price at which the securities are to be offered in this state, and the combined fees 281.28shall not exceed $300. Beginning with fiscal year 2001 and continuing each fiscal year 281.29thereafter, as of the last day of each fiscal year, the administrator shall determine the total 281.30amount of all fees that were collected under this paragraph in connection with any filings 281.31made for that fiscal year for securities of an open-end investment company on behalf of a 281.32security that is a federal covered security pursuant to section 18(b)(2) of the Securities 281.33Act of 1933. To the extent the total fees collected by the administrator in connection 281.34with these filings exceed $25,600,000 in a fiscal year, the administrator shall refund, on 281.35a pro rata basis, to all persons who paid any fees for that fiscal year, the amount of fees 282.1collected by the administrator in excess of $25,600,000. No individual refund is required 282.2of amounts of $100 or less for a fiscal year. 282.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 282.4    Sec. 12. Minnesota Statutes 2006, section 270A.03, subdivision 2, is amended to read: 282.5    Subd. 2. Claimant agency. "Claimant agency" means any state agency, as defined 282.6by section 14.02, subdivision 2, the regents of the University of Minnesota, any district 282.7court of the state, any county, any statutory or home rule charter city new text begin , including a city that new text end 282.8 new text begin is new text end presenting a claim for a municipal hospital or a public library or a municipal ambulance 282.9service, a hospital district, a private nonprofit hospital that leases its building from the 282.10county new text begin or city new text end in which it is located, any public agency responsible for child support 282.11enforcement, any public agency responsible for the collection of court-ordered restitution, 282.12and any public agency established by general or special law that is responsible for the 282.13administration of a low-income housing program, and the Minnesota collection enterprise 282.14as defined in section 16D.02, subdivision 8, for the purpose of collecting the costs imposed 282.15under section 16D.11. A county may act as a claimant agency on behalf of an ambulance 282.16service licensed under chapter 144E if the ambulance service's primary service area is 282.17located at least in part within the county, but more than one county may not act as a 282.18claimant agency for a licensed ambulance service with respect to the same debt. 282.19    Sec. 13. Minnesota Statutes 2006, section 270A.10, is amended to read: 282.20270A.10 PRIORITY OF CLAIMS. 282.21    If two or more debts, in a total amount exceeding the debtor's refund, are submitted 282.22for setoff, the priority of payment shall be as follows: First, any 282.23     new text begin (1) new text end delinquent tax obligations of the debtor which are owed to the department shall 282.24be satisfied. Secondly, the refund shall be applied to new text begin ; new text end 282.25     new text begin (2) new text end debts for child support based on the order in time in which the commissioner 282.26received the debts. Thirdly, the refund shall be applied to new text begin ; new text end 282.27     new text begin (3) new text end payment of restitution obligations. Fourthly, the refund shall be applied to new text begin ; new text end 282.28     new text begin (4) claims brought for a hospital or an ambulance service; new text end 282.29     new text begin (5) new text end the remaining debts based on the order in time in which the commissioner 282.30received the debts. 282.31    Sec. 14. Minnesota Statutes 2006, section 270C.03, subdivision 1, is amended to read: 283.1    Subdivision 1. Powers and duties. The commissioner shall have and exercise 283.2the following powers and duties: 283.3    (1) administer and enforce the assessment and collection of taxes; 283.4    (2) make determinations, corrections, and assessments with respect to taxes, 283.5including interest, additions to taxes, and assessable penalties; 283.6    (3) use statistical or other sampling techniques consistent with generally accepted 283.7auditing standards in examining returns or records and making assessments; 283.8    (4) investigate the tax laws of other states and countries, and formulate and submit 283.9to the legislature such legislation as the commissioner may deem expedient to prevent 283.10evasions of state revenue laws and to secure just and equal taxation and improvement in 283.11the system of state revenue laws; 283.12    (5) consult and confer with the governor upon the subject of taxation, the 283.13administration of the laws in regard thereto, and the progress of the work of the 283.14department, and furnish the governor, from time to time, such assistance and information 283.15as the governor may require relating to tax matters; 283.16    (6) execute and administer any agreement with the secretary of the treasury or the 283.17Bureau of Alcohol, Tobacco, Firearms, and Explosives in the Department of Justice of the 283.18United States or a representative of another state regarding the exchange of information 283.19and administration of the state revenue laws; 283.20    (7) require town, city, county, and other public officers to report information as to the 283.21collection of taxes received from licenses and other sources, and such other information 283.22as may be needful in the work of the commissioner, in such form as the commissioner 283.23may prescribe; 283.24    (8) authorize the use of unmarked motor vehicles to conduct seizures or criminal 283.25investigations pursuant to the commissioner's authority; and 283.26    (9) new text begin maintain toll-free telephone access for taxpayer assistance for calls from new text end 283.27 new text begin locations within the state; and new text end 283.28     new text begin (10) new text end exercise other powers and authority and perform other duties required of or 283.29imposed upon the commissioner by law. 283.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2008. new text end 283.31    Sec. 15. new text begin [270C.21] TAXPAYER ASSISTANCE GRANTS. new text end 283.32     new text begin When the commissioner awards grants to nonprofit organizations to coordinate, new text end 283.33 new text begin facilitate, encourage, and aid in the provision of taxpayer assistance services, the new text end 283.34 new text begin commissioner must provide public notice of the grants in a timely manner so that the new text end 283.35 new text begin grant process is completed and grants are awarded by October 1, in order for recipient new text end 284.1 new text begin organizations to adequately plan expenditures for the filing season. At the time the new text end 284.2 new text begin commissioner provides public notice, the commissioner must also notify nonprofit new text end 284.3 new text begin organizations that received grants in the previous biennium. new text end 284.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 284.5    Sec. 16. new text begin MINNESOTA FOOTBALL STADIUM TASK FORCE. new text end 284.6     new text begin Subdivision 1. new text end new text begin Creation; purpose. new text end new text begin A Minnesota Football Stadium Task Force new text end 284.7 new text begin is created. The task force must evaluate the plan to redevelop the Metrodome site new text end 284.8 new text begin that includes a new multiuse stadium. The task force must analyze issues related to new text end 284.9 new text begin infrastructure, light rail transit, stadium development, and financing of the project. The new text end 284.10 new text begin task force must develop and present stadium financing options, and make a specific new text end 284.11 new text begin recommendation on a preferred finance plan. new text end 284.12     new text begin Subd. 2. new text end new text begin Membership. new text end new text begin The subcommittee must consist of 15 members as follows: new text end 284.13     new text begin (1) five members of the senate, including at least one member of the minority party, new text end 284.14 new text begin to be appointed by the Subcommittee on Committees of the senate Rules Committee; new text end 284.15     new text begin (2) five members of the house of representatives, including at least one member of new text end 284.16 new text begin the minority party, to be appointed by the speaker of the house of representatives; and new text end 284.17     new text begin (3) five members appointed by the governor, including the chair of the Metropolitan new text end 284.18 new text begin Sports Facilities Commission, who will be the chair of the task force. new text end 284.19     new text begin Appointments must be made by June 15, 2007. new text end 284.20     new text begin Subd. 3. new text end new text begin Staff assistance. new text end new text begin The Metropolitan Sports Facilities Commission will new text end 284.21 new text begin provide staff assistance and other resources to support the work of the task force. new text end 284.22     new text begin Subd. 4. new text end new text begin Initial meeting. new text end new text begin The chair of the task force must convene the first meeting new text end 284.23 new text begin of the task force no later than June 15, 2007. new text end 284.24     new text begin Subd. 5. new text end new text begin Report. new text end new text begin The task force shall provide a report to the governor and to the new text end 284.25 new text begin chairs of the committees on taxes of the senate and the house of representatives on its new text end 284.26 new text begin findings and recommendations by February 15, 2008. new text end 284.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 284.28    Sec. 17. new text begin DATA UPDATE. new text end 284.29     new text begin The commissioner of revenue must continue to maintain, update, and make available new text end 284.30 new text begin the information required under Laws 1987, chapter 268, article 7, section 1, subdivision new text end 284.31 new text begin 6, paragraph (b). The commissioner must provide the most complete and current data new text end 284.32 new text begin available, when requested, to the chairs of the senate and house of representatives new text end 284.33 new text begin committees on taxes. new text end 285.1    Sec. 18. new text begin FINANCIAL MANAGEMENT. new text end 285.2     new text begin Notwithstanding the provisions of Minnesota Statutes, section 16A.1522, new text end 285.3 new text begin subdivision 4, the commissioner of finance shall designate any positive general fund new text end 285.4 new text begin budgetary balance on June 30, 2007, as an unrestricted balance. Money so designated shall new text end 285.5 new text begin remain available for general fund appropriations authorized in fiscal years 2008 and 2009. new text end 285.6    Sec. 19. new text begin APPROPRIATIONS. new text end 285.7     new text begin (a) $223,000 is appropriated for fiscal year 2008 from the general fund to the new text end 285.8 new text begin commissioner of revenue to administer this act. new text end 285.9     new text begin (b) Of this amount: new text end 285.10     new text begin (i) $150,000 in fiscal year 2008 is for the fiscal disparities study required under new text end 285.11 new text begin article 2; and new text end 285.12     new text begin (ii) $73,000 in fiscal year 2008 is for administering 1099 reporting requirements new text end 285.13 new text begin under article 4. new text end 285.14     new text begin (c) All of these appropriations are onetime and are not added to the agency's base new text end 285.15 new text begin budget. new text end 285.16    Sec. 20. new text begin TAXPAYER ASSISTANCE SERVICES; APPROPRIATION. new text end 285.17     new text begin (a) $75,000 in fiscal year 2008 and $75,000 in fiscal year 2009 are appropriated from new text end 285.18 new text begin the general fund to the commissioner of revenue to make grants to one or more nonprofit new text end 285.19 new text begin organizations, qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, to new text end 285.20 new text begin coordinate, facilitate, encourage, and aid in the provision of taxpayer assistance services. new text end 285.21     new text begin (b) "Taxpayer assistance services" means accounting and tax preparation services new text end 285.22 new text begin provided by volunteers to low-income and disadvantaged Minnesota residents to help new text end 285.23 new text begin them file federal and state income tax returns and Minnesota property tax refund claims new text end 285.24 new text begin and may include provision of personal representation before the Department of Revenue new text end 285.25 new text begin and Internal Revenue Service. new text end 285.26    Sec. 21. new text begin APPROPRIATION; ST. PAUL RIVER CENTRE DEBT SERVICE new text end 285.27 new text begin COSTS. new text end 285.28     new text begin $2,000,000 is appropriated from the general fund to the commissioner of employment new text end 285.29 new text begin and economic development in fiscal year 2010 for a grant to the city of St. Paul to be used new text end 285.30 new text begin to pay, redeem, or refund debt service costs incurred for the River Centre Campus. new text end 285.31    Sec. 22. new text begin REPEALER. new text end 285.32 new text begin (a) new text end new text begin Minnesota Statutes 2006, section 16A.1522, new text end new text begin is repealed. new text end 286.1 new text begin (b) If a bill styled as 2007 H.F. No. 548 is enacted and contains an appropriation new text end 286.2 new text begin that is the same as that set forth in section 20, section 20 is repealed the day following new text end 286.3 new text begin final enactment. new text end