1.1 	A bill for an act
1.2 	relating to the financing and operation of state and local government; modifying 
1.3 	property tax provisions, credits, and levies; providing a homestead credit state 
1.4 	refund; increasing property tax refunds; providing a school bond agricultural 
1.5 	credit; adding an income tax bracket and rate;amending Minnesota Statutes 
1.6 	2006, sections 123B.53, subdivisions 4, 5; 123B.54; 126C.01, by adding a 
1.7 	subdivision; 126C.10, subdivision 13a; 126C.17, subdivision 6; 127A.48, by 
1.8 	adding a subdivision; 273.11, subdivision 1a; 273.1384, subdivision 1; 273.1393; 
1.9 	275.065, subdivision 3; 275.07, subdivision 2; 275.08, subdivision 1b; 276.04, 
1.10 	subdivision 2; 290.06, subdivisions 2c, 2d; 290A.03, subdivision 13; 290A.04, 
1.11 	subdivisions 2a, 2h, 3, 4, by adding a subdivision; proposing coding for new 
1.12 	law in Minnesota Statutes, chapter 123B; repealing Minnesota Statutes 2006, 
1.13 	section 290A.04, subdivisions 2, 2b.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	ARTICLE 1
1.16 	HOMESTEAD CREDIT STATE REFUND
1.17 	HOMEOWNERS AND RENTERS

1.18 	Section 1. Minnesota Statutes 2006, section 273.1384, subdivision 1, is amended to 
1.19 	read:
1.20 		Subdivision 1.Residential homestead market value credit. (a) Each county 
1.21 	auditor shall determine a homestead credit for each class 1a, 1b, and 2a homestead 
1.22 	property within the county equal to 0.4 percent of the first $76,000 of market value 
1.23 	of the property minus .09 percent of the market value in excess of $76,000. The credit 
1.24 	amount may not be less than zero. In the case of an agricultural or resort homestead, only 
1.25 	the market value of the house, garage, and immediately surrounding one acre of land is 
1.26 	eligible in determining the property's homestead credit. In the case of a property that 
1.27 	is classified as part homestead and part nonhomestead, (i) the credit shall apply only 
2.1 	to the homestead portion of the property, but (ii) if a portion of a property is classified 
2.2 	as nonhomestead solely because not all the owners occupy the property, not all the 
2.3 	owners have qualifying relatives occupying the property, or solely because not all the 
2.4 	spouses of owners occupy the property, the credit amount shall be initially computed as 
2.5 	if that nonhomestead portion were also in the homestead class and then prorated to the 
2.6 	owner-occupant's percentage of ownership. For the purpose of this section, when an 
2.7 	owner-occupant's spouse does not occupy the property, the percentage of ownership for 
2.8 	the owner-occupant spouse is one-half of the couple's ownership percentage.
2.9 	(b) For property taxes payable in 2008 and thereafter, the county auditor shall 
2.10 	determine the amount of the homestead credit under paragraph (a) and this paragraph. 
2.11 	The county auditor shall report the amount of the credit to the taxpayer on the property 
2.12 	tax statement or in another manner, as authorized by the commissioner of revenue. The 
2.13 	amount of the credit allowed for the property taxes payable year is to be computed as the 
2.14 	following percentage of the credit amount under paragraph (a):
2.15 	(1) for property taxes payable in 2008, 100 percent;
2.16 	(2) for property taxes payable in 2009, 60 percent;
2.17 	(3) for property taxes payable in 2010, 30 percent; and
2.18 	(4) for property taxes payable in 2011 or thereafter, no credit is allowed.

2.19 	EFFECTIVE DATE. This section is effective beginning for property taxes payable 
2.20 	in 2008.

2.21 	Sec. 2. Minnesota Statutes 2006, section 276.04, subdivision 2, is amended to read:
2.22 		Subd. 2.Contents of tax statements. (a) The treasurer shall provide for the 
2.23 	printing of the tax statements. The commissioner of revenue shall prescribe the form 
2.24 	of the property tax statement and its contents. The statement must contain a tabulated 
2.25 	statement of the dollar amount due to each taxing authority and the amount of the state 
2.26 	tax from the parcel of real property for which a particular tax statement is prepared. The 
2.27 	dollar amounts attributable to the county, the state tax, the voter approved school tax, the 
2.28 	other local school tax, the township or municipality, and the total of the metropolitan 
2.29 	special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must 
2.30 	be separately stated. The amounts due all other special taxing districts, if any, may be 
2.31 	aggregated except that any levies made by the regional rail authorities in the county of 
2.32 	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A 
2.33 	shall be listed on a separate line directly under the appropriate county's levy. If the county 
2.34 	levy under this paragraph includes an amount for a lake improvement district as defined 
2.35 	under sections 103B.501 to 103B.581, the amount attributable for that purpose must be 
3.1 	separately stated from the remaining county levy amount. In the case of Ramsey County, 
3.2 	if the county levy under this paragraph includes an amount for public library service 
3.3 	under section 134.07, the amount attributable for that purpose may be separated from the 
3.4 	remaining county levy amount. The amount of the tax on homesteads qualifying under the 
3.5 	senior citizens' property tax deferral program under chapter 290B is the total amount of 
3.6 	property tax before subtraction of the deferred property tax amount. The amount of the 
3.7 	tax on contamination value imposed under sections 270.91 to 270.98, if any, must also 
3.8 	be separately stated. The dollar amounts, including the dollar amount of any special 
3.9 	assessments, may be rounded to the nearest even whole dollar. For purposes of this section 
3.10 	whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar. 
3.11 	The amount of market value excluded under section 273.11, subdivision 16, if any, must 
3.12 	also be listed on the tax statement.
3.13 	(b) The property tax statements for manufactured homes and sectional structures 
3.14 	taxed as personal property shall contain the same information that is required on the 
3.15 	tax statements for real property.
3.16 	(c) Real and personal property tax statements must contain the following information 
3.17 	in the order given in this paragraph. The information must contain the current year tax 
3.18 	information in the right column with the corresponding information for the previous year 
3.19 	in a column on the left:
3.20 	(1) the property's estimated market value under section 273.11, subdivision 1;
3.21 	(2) the property's taxable market value after reductions under section 273.11, 
3.22 	subdivisions 1a and 16;
3.23 	(3) the property's gross tax, calculated by adding the property's total property tax to 
3.24 	the sum of the aids enumerated in clause (4); any items required by the commissioner of 
3.25 	revenue under section 273.1384, subdivision 1, paragraph (b); and
3.26 	(4) a total of the following aids:
3.27 	(i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C, 
3.28 	and 127A;
3.29 	(ii) local government aids for cities, towns, and counties under sections 477A.011 to 
3.30 	477A.04; and
3.31 	(iii) disparity reduction aid under section 273.1398;
3.32 	(5) for homestead residential and agricultural properties, the credits under section 
3.33 	273.1384;
3.34 	(6) any credits received under sections 273.119; 273.123; 273.135; 273.1391; 
3.35 	273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received 
3.36 	under section 273.135 must be separately stated and identified as "taconite tax relief"; and
4.1 	(7) (4) the net tax payable in the manner required in paragraph (a).
4.2 	(d) If the county uses envelopes for mailing property tax statements and if the county 
4.3 	agrees, a taxing district may include a notice with the property tax statement notifying 
4.4 	taxpayers when the taxing district will begin its budget deliberations for the current 
4.5 	year, and encouraging taxpayers to attend the hearings. If the county allows notices to 
4.6 	be included in the envelope containing the property tax statement, and if more than 
4.7 	one taxing district relative to a given property decides to include a notice with the tax 
4.8 	statement, the county treasurer or auditor must coordinate the process and may combine 
4.9 	the information on a single announcement.
4.10 	The commissioner of revenue shall certify to the county auditor the actual or 
4.11 	estimated aids enumerated in paragraph (c), clause (4), that local governments will receive 
4.12 	in the following year. The commissioner must certify this amount by January 1 of each 
4.13 	year.

4.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2008 and 
4.15 	thereafter.

4.16 	Sec. 3. Minnesota Statutes 2006, section 290A.03, subdivision 13, is amended to read:
4.17 		Subd. 13.Property taxes payable. "Property taxes payable" means the property 
4.18 	tax exclusive of special assessments, penalties, and interest payable on a claimant's 
4.19 	homestead after deductions made under sections 273.135, 273.1384,273.1391, 273.42, 
4.20 	subdivision 2, and any other state paid property tax credits in any calendar year, and 
4.21 	after any refund claimed and allowable under section 290A.04, subdivision 2h, that is 
4.22 	first payable in the year that the property tax is payable. Beginning for property taxes 
4.23 	payable in 2008, the amount of the credit under section 273.1384, subdivision 1, must 
4.24 	not be deducted in computing property taxes payable. In the case of a claimant who 
4.25 	makes ground lease payments, "property taxes payable" includes the amount of the 
4.26 	payments directly attributable to the property taxes assessed against the parcel on which 
4.27 	the house is located. No apportionment or reduction of the "property taxes payable" shall 
4.28 	be required for the use of a portion of the claimant's homestead for a business purpose if 
4.29 	the claimant does not deduct any business depreciation expenses for the use of a portion 
4.30 	of the homestead in the determination of federal adjusted gross income. For homesteads 
4.31 	which are manufactured homes as defined in section 273.125, subdivision 8, and for 
4.32 	homesteads which are park trailers taxed as manufactured homes under section 168.012, 
4.33 	subdivision 9, "property taxes payable" shall also include 19 percent of the gross rent paid 
4.34 	in the preceding year for the site on which the homestead is located. When a homestead 
4.35 	is owned by two or more persons as joint tenants or tenants in common, such tenants 
5.1 	shall determine between them which tenant may claim the property taxes payable on the 
5.2 	homestead. If they are unable to agree, the matter shall be referred to the commissioner of 
5.3 	revenue whose decision shall be final. Property taxes are considered payable in the year 
5.4 	prescribed by law for payment of the taxes. 
5.5 	In the case of a claim relating to "property taxes payable," the claimant must have 
5.6 	owned and occupied the homestead on January 2 of the year in which the tax is payable 
5.7 	and (i) the property must have been classified as homestead property pursuant to section 
5.8 	273.124, on or before December 15 of the assessment year to which the "property taxes 
5.9 	payable" relate; or (ii) the claimant must provide documentation from the local assessor 
5.10 	that application for homestead classification has been made on or before December 15 
5.11 	of the year in which the "property taxes payable" were payable and that the assessor has 
5.12 	approved the application. 

5.13 	EFFECTIVE DATE. This section is effective beginning for refund claims based on 
5.14 	property taxes payable in 2008.

5.15 	Sec. 4. Minnesota Statutes 2006, section 290A.04, subdivision 2a, is amended to read:
5.16 		Subd. 2a.Renters. (a) A claimant whose rent constituting property taxes exceeds 
5.17 	the percentage of the household income stated below must pay an amount equal to the 
5.18 	percent of income shown for the appropriate household income level along with the 
5.19 	percent to be paid by the claimant of the remaining amount of rent constituting property 
5.20 	taxes. The state refund equals the amount of rent constituting property taxes that remain, 
5.21 	up to the maximum state refund amount shown below.

5.22
5.23	Household Income
	Percent of Income
	Percent Paid by 
Claimant
	Maximum State 
Refund
	
5.24	$0 to 3,589
	1.0 percent
	5 percent
	$1,190
	
5.25	 $0 to 4,579
			$1,500
	
5.26	3,590 to 4,779
	1.0 percent
	10 percent
	$1,190
	
5.27	4,580 to 6,099
			$1,500
	
5.28	4,780 to 5,969
	1.1 percent
	10 percent
	$1,190
	
5.29	6,100 to 7,619
			$1,500
	
5.30	5,970 to 8,369
	1.2 percent
	10 percent
	$1,190
	
5.31	7,620 to 10,669
			$1,500
	
5.32	8,370 to 10,759
	1.3 percent
	15 percent
	$1,190
	
5.33	10,670 to 13,729
			$1,500
	
5.34	10,760 to 11,949
	1.4 percent
	15 percent
	$1,190
	
5.35	13,730 to 15,239
			$1,500
	
5.36	11,950 to 13,139
	1.4 percent
	20 percent
	$1,190
	
5.37	15,240 to 16,769
			$1,500
	
6.1	13,140 to 15,539
	1.5 percent
	20 percent
	$1,190
	
6.2	16,770 to 19,829
			$1,500
	
6.3	15,540 to 16,729
	1.6 percent
	20 percent
	$1,190
	
6.4	19,830 to 21,349
			$1,500
	
6.5	16,730 to 17,919
	1.7 percent
	25 percent
	$1,190
	
6.6	21,350 to 22,859
			$1,500
	
6.7	17,920 to 20,319
	1.8 percent
	25 percent
	$1,190
	
6.8	22,860 to 25,929
			$1,500
	
6.9	20,320 to 21,509
	1.9 percent
	30 percent
	$1,190
	
6.10	25,930 to 27,439
			$1,500
	
6.11	21,510 to 22,699
	2.0 percent
	30 percent
	$1,190
	
6.12	27,440 to 28,959
			$1,500
	
6.13	22,700 to 23,899
	2.2 percent
	30 percent
	$1,190
	
6.14	28,960 to 30,499
			$1,500
	
6.15	23,900 to 25,089
	2.4 percent
	30 percent
	$1,190
	
6.16	30,500 to 32,009
			$1,500
	
6.17	25,090 to 26,289
	2.6 percent
	35 percent
	$1,190
	
6.18	32,010 to 33,539
			$1,500
	
6.19	26,290 to 27,489
	2.7 percent
	35 percent
	$1,190
	
6.20	33,540 to 35,079
			$1,500
	
6.21	27,490 to 28,679
	2.8 percent
	35 percent
	$1,190
	
6.22	35,080 to 36,589
			$1,500
	
6.23	28,680 to 29,869
	2.9 percent
	40 percent
	$1,190
	
6.24	36,590 to 38,109
			$1,500
	
6.25	29,870 to 31,079
	3.0 percent
	40 percent
	$1,190
	
6.26	38,110 to 39,649
			$1,500
	
6.27	31,080 to 32,269
	3.1 percent
	40 percent
	$1,190
	
6.28	39,650 to 41,169
			$1,500
	
6.29	32,270 to 33,459
	3.2 percent
	40 percent
	$1,190
	
6.30	41,170 to 42,689
			$1,500
	
6.31	33,460 to 34,649
	3.3 percent
	45 percent
	$1,080
	
6.32	42,690 to 49,729
			$1,370
	
6.33	34,650 to 35,849
	3.4 percent
	45 percent
	$ 960
	
6.34	49,730 to 51,459
			$1,220
	
6.35	35,850 to 37,049
	3.5 percent
	45 percent
	$ 830
	
6.36	51,460 to 53,189
			$1,050
	
6.37	37,050 to 38,239
	3.5 percent
	50 percent
	$ 720
	
6.38	53,190 to 54,899
			$910
	
6.39	38,240 to 39,439
	3.5 percent
	50 percent
	$ 600
	
6.40	54,900 to 56,609
			$760
	
6.41	38,440 to 40,629
	3.5 percent
	50 percent
	$ 360
	
6.42	56,610 to 58,319
			$450
	
7.1	40,630 to 41,819
	3.5 percent
	50 percent
	$ 120
	
7.2	58,320 to 60,000
			$150
	
7.3 	(b) The payment made to a claimant is the amount of the state refund calculated 
7.4 	under this subdivision. No payment is allowed if the claimant's household income is 
7.5 	$41,820$60,000 or more.

7.6 	EFFECTIVE DATE. This section is effective beginning for claims filed for rent 
7.7 	paid after December 31, 2006.

7.8 	Sec. 5. Minnesota Statutes 2006, section 290A.04, subdivision 2h, is amended to read:
7.9 		Subd. 2h.Additional refund. (a) If the gross property taxes payable on a 
7.10 	homestead increase more than 12 percent over the property taxes payable in the prior year 
7.11 	on the same property that is owned and occupied by the same owner on January 2 of both 
7.12 	years, and the amount of that increase is $100 or more, a claimant who is a homeowner 
7.13 	shall be allowed an additional refund equal to 60 percent of the amount of the increase 
7.14 	over the greater of 12 percent of the prior year's property taxes payable or $100. This 
7.15 	subdivision shall not apply to any increase in the gross property taxes payable attributable 
7.16 	to improvements made to the homestead after the assessment date for the prior year's 
7.17 	taxes. This subdivision shall not apply to any increase in the gross property taxes payable 
7.18 	attributable to the termination of valuation exclusions under section  273.11, subdivision 
7.19 	16, or to the reduction in and elimination of the homestead market value credit under 
7.20 	section 273.1384, subdivision 1, paragraph (b). 
7.21 	The maximum refund allowed under this subdivision is $1,000.
7.22 	(b) For purposes of this subdivision "gross property taxes payable" means property 
7.23 	taxes payable determined without regard to the refund allowed under this subdivision.
7.24 	(c) In addition to the other proofs required by this chapter, each claimant under 
7.25 	this subdivision shall file with the property tax refund return a copy of the property tax 
7.26 	statement for taxes payable in the preceding year or other documents required by the 
7.27 	commissioner.
7.28 	(d) Upon request, the appropriate county official shall make available the names and 
7.29 	addresses of the property taxpayers who may be eligible for the additional property tax 
7.30 	refund under this section. The information shall be provided on a magnetic computer 
7.31 	disk. The county may recover its costs by charging the person requesting the information 
7.32 	the reasonable cost for preparing the data. The information may not be used for any 
7.33 	purpose other than for notifying the homeowner of potential eligibility and assisting the 
7.34 	homeowner, without charge, in preparing a refund claim.

8.1 	EFFECTIVE DATE. This section is effective for claims based on property taxes 
8.2 	payable in 2008 and thereafter.

8.3 	Sec. 6. Minnesota Statutes 2006, section 290A.04, is amended by adding a subdivision 
8.4 	to read:
8.5 		Subd. 2k.Homestead credit state refund. (a) A claimant who is a homeowner 
8.6 	is entitled to a state refund of the amount of the property taxes payable in excess of two 
8.7 	percent of the claimant's household income, based on the percentage and maximum for the 
8.8 	appropriate household income level shown below. The refund amount determined from the 
8.9 	table must be reduced further by the amount of the homestead market value credit under 
8.10 	section 273.1384, subdivision 1, paragraph (b), but not to an amount that is less than zero.

8.11	Household Income
	Refund Percentage
	Maximum State Refund
	
8.12	0 to $5,399
	90 percent
	$2,500
	
8.13	5,400 to 18,899
	85 percent
	2,500
	
8.14	18,900 to 26,999
	80 percent
	2,500
	
8.15	27,000 to 32,399
	75 percent
	2,500
	
8.16	32,400 to 37,799
	70 percent
	2,500
	
8.17	37,800 to 45,899
	65 percent
	2,500
	
8.18	45,900 to 64,699
	60 percent
	2,500
	
8.19	64,700 to 80,899
	55 percent
	2,300
	
8.20	80,900 to 94,399
	50 percent
	2,100
	
8.21	94,400 to 99,299
	45 percent
	1,900
	
8.22	99,300 to 104,099
	40 percent
	1,700
	
8.23	104,100 to 115,599
	30 percent
	1,500
	
8.24	115,600 to 127,199
	30 percent
	1,250
	
8.25	127,200 to 134,099
	25 percent
	1,000
	
8.26	134,100 to 138,799
	25 percent
	750
	
8.27	138,800 to 144,399
	25 percent
	500
	
8.28	144,400 to 150,000
	25 percent
	250

8.29 	(b) No payment is allowed under paragraph (a) if the claimant's household income 
8.30 	is more than $150,000.

8.31 	EFFECTIVE DATE. This section is effective beginning for claims based on 
8.32 	property taxes payable in 2008.

8.33 	Sec. 7. Minnesota Statutes 2006, section 290A.04, subdivision 3, is amended to read:
8.34 		Subd. 3.Table. The commissioner of revenue shall construct and make available 
8.35 	to taxpayers a comprehensive table showing the property taxes to be paid and refund 
8.36 	allowed at various levels of income and assessment. The table shall follow the schedule 
9.1 	of income percentages, maximums and other provisions specified in subdivision 2 this 
9.2 	section, except that the commissioner may graduate the transition between income 
9.3 	brackets. All refunds shall be computed in accordance with tables prepared and issued 
9.4 	by the commissioner of revenue.
9.5 	The commissioner shall include on the form an appropriate space or method for the 
9.6 	claimant to identify if the property taxes paid are for a manufactured home, as defined in 
9.7 	section  273.125, subdivision 8, paragraph (c), or a park trailer taxed as a manufactured 
9.8 	home under section  168.012, subdivision 9.

9.9 	Sec. 8. Minnesota Statutes 2006, section 290A.04, subdivision 4, is amended to read:
9.10 		Subd. 4.Inflation adjustment. Beginning for property tax refunds payable in 
9.11 	calendar year 2002 2009, the commissioner shall annually adjust the dollar amounts of 
9.12 	the income thresholds and the maximum refunds under subdivisions 2 and 2a and 2k for 
9.13 	inflation. The commissioner shall make the inflation adjustments in accordance with 
9.14 	section 1(f) of the Internal Revenue Code, except that for purposes of this subdivision 
9.15 	the percentage increase shall be determined from the year ending on June 30, 2000 2007, 
9.16 	to the year ending on June 30 of the year preceding that in which the refund is payable. 
9.17 	The commissioner shall use the appropriate percentage increase to annually adjust the 
9.18 	income thresholds and maximum refunds under subdivisions 2 and 2a and 2k for inflation 
9.19 	without regard to whether or not the income tax brackets are adjusted for inflation in that 
9.20 	year. The commissioner shall round the thresholds and the maximum amounts, as adjusted 
9.21 	to the nearest $10 amount. If the amount ends in $5, the commissioner shall round it up 
9.22 	to the next $10 amount.
9.23 	The commissioner shall annually announce the adjusted refund schedule at the same 
9.24 	time provided under section  290.06. The determination of the commissioner under this 
9.25 	subdivision is not a rule under the Administrative Procedure Act. 

9.26 	EFFECTIVE DATE. This section is effective beginning for claims based on 
9.27 	property taxes payable in 2009.

9.28 	Sec. 9. HOMESTEAD CREDIT STATE REFUND TRANSITION RESERVE.
 9.29 		Subdivision 1.Reserve account. A homestead credit state refund transition reserve 
9.30 	account is established in the general fund to provide two additional years of transition 
9.31 	funding for the homestead credit state refund.
9.32 		Subd. 2.Transfer to account. On June 29, 2009, the commissioner of finance 
9.33 	shall transfer $129,000,000 from the general fund to the homestead credit state refund 
9.34 	transition reserve account.
10.1 		Subd. 3.Transfer to general fund. On July 1, 2009, the commissioner of finance 
10.2 	shall transfer the balance in the homestead credit state refund transition reserve account 
10.3 	to the general fund.
10.4 		Subd. 4.Expiration date. This section expires July 2, 2009.

10.5 	Sec. 10. REPEALER.
 10.6 	Minnesota Statutes 2006, section 290A.04, subdivisions 2 and 2b, are repealed.

10.7 	EFFECTIVE DATE. This section is effective for claims based on property taxes 
10.8 	payable in 2008 and later.

10.9 	ARTICLE 2
10.10 	EDUCATION PROPERTY TAX RELIEF

10.11 	Section 1. Minnesota Statutes 2006, section 123B.53, subdivision 4, is amended to read:
10.12 		Subd. 4.Debt service equalization revenue. (a) The debt service equalization 
10.13 	revenue of a district equals the sum of the first tier debt service equalization revenue and 
10.14 	the second tier debt service equalization revenue.
10.15 	(b) The first tier debt service equalization revenue of a district equals the greater of 
10.16 	zero or the eligible debt service revenue minus the amount raised by a levy of 15 percent 
10.17 	times the adjusted debt service net tax capacity of the district minus the second tier debt 
10.18 	service equalization revenue of the district.
10.19 	(c) The second tier debt service equalization revenue of a district equals the greater 
10.20 	of zero or the eligible debt service revenue, excluding alternative facilities levies under 
10.21 	section 123B.59, subdivision 5, minus the amount raised by a levy of 25 percent times the 
10.22 	adjusted net tax capacity of the district. 

10.23 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2009.

10.24 	Sec. 2. Minnesota Statutes 2006, section 123B.53, subdivision 5, is amended to read:
10.25 		Subd. 5.Equalized debt service levy. (a) The equalized debt service levy of a 
10.26 	district equals the sum of the first tier equalized debt service levy and the second tier 
10.27 	equalized debt service levy.
10.28 	(b) A district's first tier equalized debt service levy equals the district's first tier debt 
10.29 	service equalization revenue times the lesser of one or the ratio of:
10.30 	(1) the quotient derived by dividing the adjusted debt service net tax capacity of the 
10.31 	district for the year before the year the levy is certified by the adjusted pupil units in the 
10.32 	district for the school year ending in the year prior to the year the levy is certified; to
11.1 	(2) $3,200 100 percent of the statewide adjusted net tax capacity equalizing factor.
11.2 	(c) A district's second tier equalized debt service levy equals the district's second tier 
11.3 	debt service equalization revenue times the lesser of one or the ratio of:
11.4 	(1) the quotient derived by dividing the adjusted net tax capacity of the district for 
11.5 	the year before the year the levy is certified by the adjusted pupil units in the district for 
11.6 	the school year ending in the year prior to the year the levy is certified; to
11.7 	(2) $8,000.

11.8 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2009.

11.9 	Sec. 3. Minnesota Statutes 2006, section 123B.54, is amended to read:
11.10 	123B.54 DEBT SERVICE AND SCHOOL BOND AGRICULTURAL CREDIT 
11.11 	APPROPRIATION.
11.12 	(a) $21,624,000 $14,813,000 in fiscal year 2008 and $20,403,000, $26,100,000 in 
11.13 	fiscal year 2009, $29,816,000 in fiscal year 2010, and $30,538,000 in fiscal year 2011 and 
11.14 	later are appropriated from the general fund to the commissioner of education for payment 
11.15 	of debt service equalization aid under section 123B.53.
11.16 	(b) $16,200,000 in fiscal year 2009, $18,531,000 in fiscal year 2010, and 
11.17 	$19,242,000 in fiscal year 2011 and each year thereafter are appropriated from the general 
11.18 	fund to the commissioner of education for payment of school bond agricultural credit aid 
11.19 	under section 123B.555.
11.20 	(b) (c) The appropriations in paragraph paragraphs (a) and (b) must be reduced by 
11.21 	the amount of any money specifically appropriated for the same purpose in any year 
11.22 	from any state fund.

11.23 	EFFECTIVE DATE. This section is effective for revenue for fiscal year 2009.

11.24 	Sec. 4. [123B.555] SCHOOL BOND AGRICULTURAL CREDIT.
11.25 		Subdivision 1.Eligibility. All class 2 property under section 273.13, subdivision 23, 
11.26 	except for (1) property consisting of the house, garage, and immediately surrounding one 
11.27 	acre of land of an agricultural homestead, and (2) property classified under section 273.13, 
11.28 	subdivision 23, paragraph (b), clause (4), is eligible to receive the credit under this section.
11.29 		Subd. 2.Credit amount. For each qualifying property, the school bond agricultural 
11.30 	credit is equal to 36 percent of the property's eligible net tax capacity multiplied by the 
11.31 	school debt tax rate determined under section 275.08, subdivision 1b.
11.32 		Subd. 3.Credit reimbursements. The county auditor shall determine the tax 
11.33 	reductions allowed under this section within the county for each taxes payable year and 
12.1 	shall certify that amount to the commissioner of revenue as a part of the abstracts of tax 
12.2 	lists submitted under section 275.29. Any prior year adjustments shall also be certified on 
12.3 	the abstracts of tax lists. The commissioner shall review the certifications for accuracy, 
12.4 	and may make such changes as are deemed necessary, or return the certification to the 
12.5 	county auditor for correction. The credit under this section must be used to reduce the 
12.6 	school district net tax capacity-based property tax as provided in section 273.1393.
12.7 		Subd. 4.Payment. The commissioner of revenue shall certify the total of the tax 
12.8 	reductions granted under this section for each taxes payable year within each school 
12.9 	district to the commissioner of education, who shall pay the reimbursement amounts to 
12.10 	each school district as provided in section 273.1392.

12.11 	EFFECTIVE DATE. This section is effective for taxes payable in 2008.

12.12 	Sec. 5. Minnesota Statutes 2006, section 126C.01, is amended by adding a subdivision 
12.13 	to read:
12.14 		Subd. 2a.Statewide adjusted net tax capacity equalizing factor. The statewide 
12.15 	adjusted net tax capacity equalizing factor equals the quotient derived by dividing the total 
12.16 	adjusted  net tax capacity of all school districts in the state for the year before the year 
12.17 	the levy is certified by the total number of adjusted pupil units in the state for the fiscal 
12.18 	year preceding the year the levy is certified.

12.19 	EFFECTIVE DATE. This section is effective for taxes payable in 2008.

12.20 	Sec. 6. Minnesota Statutes 2006, section 126C.10, subdivision 13a, is amended to read:
12.21 		Subd. 13a.Operating capital levy. To obtain operating capital revenue for fiscal 
12.22 	year 2007 and later, a district may levy an amount not more than the product of its 
12.23 	operating capital revenue for the fiscal year times the lesser of one or the ratio of its 
12.24 	adjusted net tax capacity per adjusted marginal cost pupil unit to the operating capital 
12.25 	equalizing factor. The operating capital equalizing factor equals $22,222 for fiscal year 
12.26 	2006, and $10,700 for fiscal year years 2007 and later 2008, and $21,250 for fiscal year 
12.27 	2009 and later.

12.28 	Sec. 7. Minnesota Statutes 2006, section 126C.17, subdivision 6, is amended to read:
12.29 		Subd. 6.Referendum equalization levy. (a) For fiscal year 2003 and later,
12.30 	A district's referendum equalization levy equals the sum of the first tier referendum 
12.31 	equalization levy and the second tier referendum equalization levy.
13.1 	(b) A district's first tier referendum equalization levy equals the district's first tier 
13.2 	referendum equalization revenue times the lesser of one or the ratio of the district's 
13.3 	referendum market value per resident marginal cost pupil unit to $476,000 111 percent of 
13.4 	the referendum market value equalizing factor.
13.5 	(c) A district's second tier referendum equalization levy equals the district's second 
13.6 	tier referendum equalization revenue times the lesser of one or the ratio of the district's 
13.7 	referendum market value per resident marginal cost pupil unit to $270,000 60 percent of 
13.8 	the referendum market value equalizing factor.

13.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2008.

13.10 	Sec. 8. Minnesota Statutes 2006, section 127A.48, is amended by adding a subdivision 
13.11 	to read:
13.12 		Subd. 17.Adjusted debt service net tax capacity. To calculate each district's 
13.13 	adjusted debt service net tax capacity, the commissioner of revenue must recompute 
13.14 	the amounts in this section using an alternative sales ratio comparing the sales price to 
13.15 	the estimated market value of the property.

13.16 	EFFECTIVE DATE. This section is effective the day following final enactment for 
13.17 	computing taxes payable in 2008.

13.18 	Sec. 9. Minnesota Statutes 2006, section 273.11, subdivision 1a, is amended to read:
13.19 		Subd. 1a.Limited market value. In the case of all property classified as 
13.20 	agricultural homestead or nonhomestead, residential homestead or nonhomestead, timber, 
13.21 	or noncommercial seasonal residential recreational, the assessor shall compare the value 
13.22 	with the taxable portion of the value determined in the preceding assessment.
13.23 	For assessment years 2004, 2005, and 2006, the amount of the increase shall not 
13.24 	exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 25 
13.25 	percent of the difference between the current assessment and the preceding assessment.
13.26 	For assessment year 2007, the amount of the increase shall not exceed the greater of 
13.27 	(1) 15 percent of the value in the preceding assessment, or (2) 33 percent of the difference 
13.28 	between the current assessment and the preceding assessment.
13.29 	For assessment year 2008, the amount of the increase shall not exceed the greater of 
13.30 	(1) 15 percent of the value in the preceding assessment, or (2) 50 percent of the difference 
13.31 	between the current assessment and the preceding assessment.
14.1 	This limitation shall not apply to increases in value due to improvements. For 
14.2 	purposes of this subdivision, the term "assessment" means the value prior to any exclusion 
14.3 	under subdivision 16.
14.4 	The provisions of this subdivision shall be in effect through assessment year 2008 
14.5 	as provided in this subdivision.
14.6 	For purposes of the assessment/sales ratio study conducted under section 127A.48, 
14.7 	and the computation of state aids paid under chapters 122A, 123A, 123B, excluding 
14.8 	section 123B.53, 124D, 125A, 126C, 127A, and 477A, market values and net tax 
14.9 	capacities determined under this subdivision and subdivision 16, shall be used.

14.10 	EFFECTIVE DATE. This section is effective the day following final enactment for 
14.11 	computing taxes payable in 2008.

14.12 	Sec. 10. Minnesota Statutes 2006, section 273.1393, is amended to read:
14.13 	273.1393 COMPUTATION OF NET PROPERTY TAXES.
14.14 	Notwithstanding any other provisions to the contrary, "net" property taxes are 
14.15 	determined by subtracting the credits in the order listed from the gross tax:
14.16 	(1) disaster credit as provided in section 273.123; 
14.17 	(2) powerline credit as provided in section 273.42; 
14.18 	(3) agricultural preserves credit as provided in section 473H.10; 
14.19 	(4) enterprise zone credit as provided in section 469.171; 
14.20 	(5) disparity reduction credit;
14.21 	(6) conservation tax credit as provided in section 273.119; 
14.22 	(7) homestead and agricultural credits as provided in section 273.1384; 
14.23 	(8) school bond agricultural credit as provided in section 123B.555;
14.24 	(8)(9) taconite homestead credit as provided in section 273.135; and 
14.25 	(9)(10) supplemental homestead credit as provided in section 273.1391. 
14.26 	The combination of all property tax credits must not exceed the gross tax amount.

14.27 	EFFECTIVE DATE. This section is effective for taxes payable in 2008. 

14.28 	Sec. 11. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:
14.29 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare 
14.30 	and the county treasurer shall deliver after November 10 and on or before November 24 
14.31 	each year, by first class mail to each taxpayer at the address listed on the county's current 
14.32 	year's assessment roll, a notice of proposed property taxes.
14.33 	(b) The commissioner of revenue shall prescribe the form of the notice.
15.1 	(c) The notice must inform taxpayers that it contains the amount of property taxes 
15.2 	each taxing authority proposes to collect for taxes payable the following year. In the case 
15.3 	of a town, or in the case of the state general tax, the final tax amount will be its proposed 
15.4 	tax. In the case of taxing authorities required to hold a public meeting under subdivision 6, 
15.5 	the notice must clearly state that each taxing authority, including regional library districts 
15.6 	established under section 134.201, and including the metropolitan taxing districts as 
15.7 	defined in paragraph (i), but excluding all other special taxing districts and towns, will 
15.8 	hold a public meeting to receive public testimony on the proposed budget and proposed or 
15.9 	final property tax levy, or, in case of a school district, on the current budget and proposed 
15.10 	property tax levy. It must clearly state the time and place of each taxing authority's 
15.11 	meeting, a telephone number for the taxing authority that taxpayers may call if they have 
15.12 	questions related to the notice, and an address where comments will be received by mail.
15.13 	(d) The notice must state for each parcel:
15.14 	(1) the market value of the property as determined under section 273.11, and used 
15.15 	for computing property taxes payable in the following year and for taxes payable in the 
15.16 	current year as each appears in the records of the county assessor on November 1 of the 
15.17 	current year; and, in the case of residential property, whether the property is classified as 
15.18 	homestead or nonhomestead. The notice must clearly inform taxpayers of the years to 
15.19 	which the market values apply and that the values are final values;
15.20 	(2) the items listed below, shown separately by county, city or town, and state 
15.21 	general tax, net of the residential and agricultural homestead credit under section 273.1384
15.22 	and the school bond agricultural credit under section 123B.555, voter approved school 
15.23 	levy, other local school levy, and the sum of the special taxing districts, and as a total 
15.24 	of all taxing authorities:
15.25 	(i) the actual tax for taxes payable in the current year; and
15.26 	(ii) the proposed tax amount.
15.27 	If the county levy under clause (2) includes an amount for a lake improvement 
15.28 	district as defined under sections 103B.501 to 103B.581, the amount attributable for that 
15.29 	purpose must be separately stated from the remaining county levy amount.
15.30 	In the case of a town or the state general tax, the final tax shall also be its proposed 
15.31 	tax unless the town changes its levy at a special town meeting under section 365.52. If a 
15.32 	school district has certified under section 126C.17, subdivision 9, that a referendum will 
15.33 	be held in the school district at the November general election, the county auditor must 
15.34 	note next to the school district's proposed amount that a referendum is pending and that, 
15.35 	if approved by the voters, the tax amount may be higher than shown on the notice. In 
15.36 	the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the 
16.1 	levy for Minneapolis Park and Recreation shall be listed separately from the remaining 
16.2 	amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul 
16.3 	Library Agency must be listed separately from the remaining amount of the city's levy. 
16.4 	In the case of Ramsey County, any amount levied under section 134.07 may be listed 
16.5 	separately from the remaining amount of the county's levy. In the case of a parcel where 
16.6 	tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies, 
16.7 	the proposed tax levy on the captured value or the proposed tax levy on the tax capacity 
16.8 	subject to the areawide tax must each be stated separately and not included in the sum of 
16.9 	the special taxing districts; and
16.10 	(3) the increase or decrease between the total taxes payable in the current year and 
16.11 	the total proposed taxes, expressed as a percentage.
16.12 	For purposes of this section, the amount of the tax on homesteads qualifying under 
16.13 	the senior citizens' property tax deferral program under chapter 290B is the total amount 
16.14 	of property tax before subtraction of the deferred property tax amount.
16.15 	(e) The notice must clearly state that the proposed or final taxes do not include 
16.16 	the following:
16.17 	(1) special assessments;
16.18 	(2) levies approved by the voters after the date the proposed taxes are certified, 
16.19 	including bond referenda and school district levy referenda;
16.20 	(3) a levy limit increase approved by the voters by the first Tuesday after the first 
16.21 	Monday in November of the levy year as provided under section 275.73;
16.22 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster 
16.23 	occurring after the date the proposed taxes are certified;
16.24 	(5) amounts necessary to pay tort judgments against the taxing authority that become 
16.25 	final after the date the proposed taxes are certified; and
16.26 	(6) the contamination tax imposed on properties which received market value 
16.27 	reductions for contamination.
16.28 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or 
16.29 	the county treasurer to deliver the notice as required in this section does not invalidate the 
16.30 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
16.31 	(g) If the notice the taxpayer receives under this section lists the property as 
16.32 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
16.33 	applicable deadline, and the property qualifies for the homestead classification in that 
16.34 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
16.35 	in the following year.
17.1 	(h) In the case of class 4 residential property used as a residence for lease or rental 
17.2 	periods of 30 days or more, the taxpayer must either:
17.3 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 
17.4 	renter, or lessee; or
17.5 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
17.6 	The notice must be mailed or posted by the taxpayer by November 27 or within 
17.7 	three days of receipt of the notice, whichever is later. A taxpayer may notify the county 
17.8 	treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to 
17.9 	which the notice must be mailed in order to fulfill the requirements of this paragraph.
17.10 	(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special 
17.11 	taxing districts" means the following taxing districts in the seven-county metropolitan area 
17.12 	that levy a property tax for any of the specified purposes listed below:
17.13 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 
17.14 	473.446, 473.521, 473.547, or 473.834;
17.15 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 
17.16 	and
17.17 	(3) Metropolitan Mosquito Control Commission under section 473.711.
17.18 	For purposes of this section, any levies made by the regional rail authorities in the 
17.19 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
17.20 	398A shall be included with the appropriate county's levy and shall be discussed at that 
17.21 	county's public hearing.
17.22 	(j) The governing body of a county, city, or school district may, with the consent 
17.23 	of the county board, include supplemental information with the statement of proposed 
17.24 	property taxes about the impact of state aid increases or decreases on property tax 
17.25 	increases or decreases and on the level of services provided in the affected jurisdiction. 
17.26 	This supplemental information may include information for the following year, the current 
17.27 	year, and for as many consecutive preceding years as deemed appropriate by the governing 
17.28 	body of the county, city, or school district. It may include only information regarding:
17.29 	(1) the impact of inflation as measured by the implicit price deflator for state and 
17.30 	local government purchases;
17.31 	(2) population growth and decline;
17.32 	(3) state or federal government action; and
17.33 	(4) other financial factors that affect the level of property taxation and local services 
17.34 	that the governing body of the county, city, or school district may deem appropriate to 
17.35 	include.
18.1 	The information may be presented using tables, written narrative, and graphic 
18.2 	representations and may contain instruction toward further sources of information or 
18.3 	opportunity for comment.

18.4 	EFFECTIVE DATE. This section is effective for taxes payable in 2008. 

18.5 	Sec. 12. Minnesota Statutes 2006, section 275.07, subdivision 2, is amended to read:
18.6 		Subd. 2.School district in more than one county levies; special requirements. (a) 
18.7 	In school districts lying in more than one county, the clerk shall certify the tax levied to the 
18.8 	auditor of the county in which the administrative offices of the school district are located.
18.9 	(b) The clerk shall identify the portion of the school district levy that is levied for the 
18.10 	purposes specified in section 123B.53, subdivision 5, as the school debt levy at the time 
18.11 	that the levy is certified under this section.

18.12 	EFFECTIVE DATE. This section is effective for taxes payable in 2008. 

18.13 	Sec. 13. Minnesota Statutes 2006, section 275.08, subdivision 1b, is amended to read:
18.14 		Subd. 1b.Computation of tax rates. (a) The amounts certified to be levied against 
18.15 	net tax capacity under section 275.07 by an individual local government unit shall be 
18.16 	divided by the total net tax capacity of all taxable properties within the local government 
18.17 	unit's taxing jurisdiction. The resulting ratio, the local government's local tax rate, 
18.18 	multiplied by each property's net tax capacity shall be each property's net tax capacity tax 
18.19 	for that local government unit before reduction by any credits. 
18.20 	(b) The auditor shall also determine the school debt tax rate for each school district 
18.21 	equal to the school debt levy certified under section 275.07 divided by the total net tax 
18.22 	capacity of all taxable property within the district.
18.23 	(c) Any amount certified to the county auditor to be levied against market value shall 
18.24 	be divided by the total referendum market value of all taxable properties within the taxing 
18.25 	district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by 
18.26 	each property's referendum market value shall be each property's new referendum tax 
18.27 	before reduction by any credits. For the purposes of this subdivision, "referendum market 
18.28 	value" means the market value as defined in section 126C.01, subdivision 3. 

18.29 	EFFECTIVE DATE. This section is effective for taxes payable in 2008.

19.1 	ARTICLE 3
19.2 	INCOME TAX

19.3 	Section 1. Minnesota Statutes 2006, section 290.06, subdivision 2c, is amended to read:
19.4 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income 
19.5 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
19.6 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
19.7 	applying to their taxable net income the following schedule of rates:
19.8 	(1) On the first $25,680 $31,150, 5.35 percent;
19.9 	(2) On all over $25,680 $31,150, but not over $102,030 $123,750, 7.05 percent;
19.10 	(3) On all over $102,030 $123,750, but not over $400,000, 7.85 percent;
19.11 	(4) On all over $400,000, 9 percent.
19.12 	Married individuals filing separate returns, estates, and trusts must compute their 
19.13 	income tax by applying the above rates to their taxable income, except that the income 
19.14 	brackets will be one-half of the above amounts.
19.15 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
19.16 	computed by applying to taxable net income the following schedule of rates:
19.17 	(1) On the first $17,570 $21,310, 5.35 percent;
19.18 	(2) On all over $17,570 $21,310, but not over $57,710 $69,990, 7.05 percent;
19.19 	(3) On all over $57,710 $69,990, but not over $226,230, 7.85 percent;
19.20 	(4) On all over $226,230, 9 percent.
19.21 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
19.22 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
19.23 	computed by applying to taxable net income the following schedule of rates:
19.24 	(1) On the first $21,630 $26,230, 5.35 percent;
19.25 	(2) On all over $21,630 $26,230, but not over $86,910 $105,410, 7.05 percent;
19.26 	(3) On all over $86,910 $105,410, but not over $340,720, 7.85 percent;
19.27 	(4) On all over $340,720, 9 percent.
19.28 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
19.29 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
19.30 	an amount determined by the commissioner must be computed in accordance with tables 
19.31 	prepared and issued by the commissioner of revenue based on income brackets of not 
19.32 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
19.33 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
19.34 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
20.1 	(e) An individual who is not a Minnesota resident for the entire year must compute 
20.2 	the individual's Minnesota income tax as provided in this subdivision. After the 
20.3 	application of the nonrefundable credits provided in this chapter, the tax liability must 
20.4 	then be multiplied by a fraction in which:
20.5 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
20.6 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
20.7 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9), 
20.8 	and reduced by the Minnesota assignable portion of the subtraction for United States 
20.9 	government interest under section 290.01, subdivision 19b, clause (1), and the subtractions 
20.10 	under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), and (16), after applying 
20.11 	the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
20.12 	(2) the denominator is the individual's federal adjusted gross income as defined in 
20.13 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
20.14 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9), and reduced by the 
20.15 	amounts specified in section 290.01, subdivision 19b, clauses (1), (9), (10), (14), (15), 
20.16 	and (16).

20.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
20.18 	December 31, 2006.

20.19 	Sec. 2. Minnesota Statutes 2006, section 290.06, subdivision 2d, is amended to read:
20.20 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
20.21 	December 31, 2000 2007, the minimum and maximum dollar amounts for each rate 
20.22 	bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the 
20.23 	percentage determined under paragraph (b). For the purpose of making the adjustment as 
20.24 	provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the 
20.25 	rate brackets as they existed for taxable years beginning after December 31, 1999 2006, 
20.26 	and before January 1, 2001 2008. The rate applicable to any rate bracket must not be 
20.27 	changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes 
20.28 	in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10 
20.29 	amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
20.30 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
20.31 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
20.32 	section 1(f)(3)(B) the word "1999""2006" shall be substituted for the word "1992." For 
20.33 	2001 2008, the commissioner shall then determine the percent change from the 12 months 
20.34 	ending on August 31, 1999 2006, to the 12 months ending on August 31, 2000 2007, and 
20.35 	in each subsequent year, from the 12 months ending on August 31, 1999 2006, to the 12 
21.1 	months ending on August 31 of the year preceding the taxable year. The determination of 
21.2 	the commissioner pursuant to this subdivision shall not be considered a "rule" and shall 
21.3 	not be subject to the Administrative Procedure Act contained in chapter 14.
21.4 	No later than December 15 of each year, the commissioner shall announce the 
21.5 	specific percentage that will be used to adjust the tax rate brackets.

21.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
21.7 	December 31, 2006.