1.1 	A bill for an act
1.2 	relating to taxation; making policy, technical, administrative, and clarifying 
1.3 	changes to various taxes and tax-related provisions; changing provisions 
1.4 	relating to revenue recapture,  sustainable forest management incentive program, 
1.5 	publication of certain tax preparers, and certain firefighters' supplemental benefits 
1.6 	reimbursement applications; providing for training, licensing, and oversight of 
1.7 	assessors; changing airflight property tax penalties;amending Minnesota Statutes 
1.8 	2006, sections 62I.06, subdivision 6; 71A.04, subdivision 1; 270.071, subdivision 
1.9 	7; 270.072, subdivisions 2, 3, 6; 270.074, subdivision 3; 270.076, subdivision 
1.10 	1; 270.41, subdivisions 1, 2, 3, 5, by adding a subdivision; 270.44; 270.45; 
1.11 	270.46; 270.47; 270.48; 270.50; 270A.03, subdivision 5; 270C.306; 270C.34, 
1.12 	subdivision 1; 270C.446, subdivision 2; 272.02, subdivision 64; 272.115, 
1.13 	subdivision 1; 273.05, by adding a subdivision; 273.111, subdivision 3; 273.117; 
1.14 	273.121; 273.123, subdivisions 2, 3; 273.124, subdivisions 13, 21; 273.13, 
1.15 	subdivisions 22, 25; 273.1398, subdivision 4; 273.33, subdivision 2; 273.37, 
1.16 	subdivision 2; 273.371, subdivision 1; 274.01, subdivision 1; 274.13, subdivision 
1.17 	1; 275.065, subdivisions 3, 5a; 275.067; 276.04, by adding a subdivision; 277.01, 
1.18 	subdivision 2; 279.01, subdivision 1; 287.22; 287.2205; 289A.09, subdivision 
1.19 	2; 289A.12, subdivision 14; 289A.18, subdivision 1; 289A.40, subdivision 2; 
1.20 	289A.56, by adding a subdivision; 289A.60, subdivision 27; 290.01, subdivision 
1.21 	19d; 290.06, subdivision 33; 290.067, subdivision 2b; 290.0671, subdivision 
1.22 	7; 290.0677, subdivision 1; 290.091, subdivision 3; 290.191, subdivision 8; 
1.23 	290A.03, subdivision 7; 290C.02, subdivision 3; 290C.04; 290C.05; 290C.11; 
1.24 	291.215, subdivision 1; 295.52, subdivisions 4, 4a; 295.54, subdivision 2; 
1.25 	297A.61, subdivisions 3, 7, 10, 24, by adding subdivisions; 297A.665; 297A.669, 
1.26 	subdivisions 3, 13, 14, by adding subdivisions; 297A.67, subdivision 9; 297A.68, 
1.27 	subdivisions 11, 16, 35; 297A.70, subdivision 7, by adding a subdivision; 
1.28 	297A.72; 297A.90, subdivision 2; 297B.035, subdivision 1; 297F.25, by adding 
1.29 	a subdivision; 297I.06, subdivisions 1, 2; 297I.20, subdivision 2; 297I.40, 
1.30 	subdivision 5; 424A.10, subdivision 3; 469.1734, subdivision 6; proposing 
1.31 	coding for new law in Minnesota Statutes, chapters 270; 270C; 273; 274; 290C; 
1.32 	repealing Minnesota Statutes 2006, sections 270.073; 270.41, subdivision 4; 
1.33 	270.43; 270.51; 270.52; 270.53; 279.01, subdivision 2; 297A.61, subdivision 20; 
1.34 	297A.668, subdivision 6; 297A.67, subdivision 22.
1.35 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.1 	ARTICLE 1
2.2 	INCOME AND FRANCHISE TAXES

2.3 	Section 1. Minnesota Statutes 2006, section 270A.03, subdivision 5, is amended to 
2.4 	read:
2.5 		Subd. 5.Debt. (a) "Debt" means a legal obligation of a natural person to pay a fixed 
2.6 	and certain amount of money, which equals or exceeds $25 and which is due and payable 
2.7 	to a claimant agency. The term includes criminal fines imposed under section 609.10 or 
2.8 	609.125, fines imposed for petty misdemeanors as defined in section 609.02, subdivision 
2.9 	4a, and restitution. The term also includes the co-payment for the appointment of a district 
2.10 	public defender imposed under section 611.17, paragraph (c). A debt may arise under a 
2.11 	contractual or statutory obligation, a court order, or other legal obligation, but need not 
2.12 	have been reduced to judgment.
2.13 	A debt includes any legal obligation of a current recipient of assistance which is 
2.14 	based on overpayment of an assistance grant where that payment is based on a client 
2.15 	waiver or an administrative or judicial finding of an intentional program violation; 
2.16 	or where the debt is owed to a program wherein the debtor is not a client at the time 
2.17 	notification is provided to initiate recovery under this chapter and the debtor is not a 
2.18 	current recipient of food support, transitional child care, or transitional medical assistance.
2.19 	(b) A debt does not include any legal obligation to pay a claimant agency for medical 
2.20 	care, including hospitalization if the income of the debtor at the time when the medical 
2.21 	care was rendered does not exceed the following amount:
2.22 	(1) for an unmarried debtor, an income of $8,800 or less;
2.23 	(2) for a debtor with one dependent, an income of $11,270 or less;
2.24 	(3) for a debtor with two dependents, an income of $13,330 or less;
2.25 	(4) for a debtor with three dependents, an income of $15,120 or less;
2.26 	(5) for a debtor with four dependents, an income of $15,950 or less; and
2.27 	(6) for a debtor with five or more dependents, an income of $16,630 or less.
2.28 	The income amounts in this subdivision shall be adjusted for inflation for debts 
2.29 	incurred in calendar years 2001 and thereafter. The dollar amount of each income level 
2.30 	that applied to debts incurred in the prior year shall be increased in the same manner 
2.31 	as provided in section 1(f) of the Internal Revenue Code of 1986, as amended through 
2.32 	December 31, 2000, except that for the purposes of this subdivision the percentage 
2.33 	increase shall be determined from the year starting September 1, 1999, and ending August 
2.34 	31, 2000, as the base year for adjusting for inflation for debts incurred after December 
2.35 	31, 2000. (c) The commissioner shall adjust the income amounts in paragraph (b) by the 
3.1 	percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue 
3.2 	Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word 
3.3 	"1992." For 2001, the commissioner shall then determine the percent change from the 12 
3.4 	months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in 
3.5 	each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months 
3.6 	ending on August 31 of the year preceding the taxable year. The determination of the 
3.7 	commissioner pursuant to this subdivision shall not be considered a "rule" and shall not 
3.8 	be subject to the Administrative Procedure Act contained in chapter 14. The income 
3.9 	amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in 
3.10 	$5, the amount is rounded up to the nearest $10 amount.
3.11 	(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of 
3.12 	the dollar amount of the premium authorized under section 256L.15, subdivision 1a.

3.13 	EFFECTIVE DATE. This section is effective for debts incurred after December 
3.14 	31, 2006.

3.15 	Sec. 2. Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:
3.16 		Subd. 2.Withholding statement to employee or payee and to commissioner. (a) 
3.17 	A person required to deduct and withhold from an employee a tax under section 290.92, 
3.18 	subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to 
3.19 	deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required 
3.20 	to withhold tax under section 290.923, subdivision 2, determined without regard to 
3.21 	section 290.92, subdivision 19, if the employee or payee had claimed no more than one 
3.22 	withholding exemption, or who paid wages or made payments not subject to withholding 
3.23 	under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or 
3.24 	person receiving royalty payments in excess of $600, or who has entered into a voluntary 
3.25 	withholding agreement with a payee under section 290.92, subdivision 20, must give 
3.26 	every employee or person receiving royalty payments in respect to the remuneration paid 
3.27 	by the person to the employee or person receiving royalty payments during the calendar 
3.28 	year, on or before January 31 of the succeeding year, or, if employment is terminated 
3.29 	before the close of the calendar year, within 30 days after the date of receipt of a written 
3.30 	request from the employee if the 30-day period ends before January 31, a written statement 
3.31 	showing the following: 
3.32 	(1) name of the person;
3.33 	(2) the name of the employee or payee and the employee's or payee's Social Security 
3.34 	account number;
4.1 	(3) the total amount of wages as that term is defined in section 290.92, subdivision 
4.2 	1, paragraph (1); the total amount of remuneration subject to withholding under section 
4.3 	290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the 
4.4 	Internal Revenue Code; and the amount of royalties subject to withholding under section 
4.5 	290.923, subdivision 2; and 
4.6 	(4) the total amount deducted and withheld as tax under section 290.92, subdivision 
4.7 	2a or 3, or 290.923, subdivision 2. 
4.8 	(b) The statement required to be furnished by this paragraph (a) with respect to any 
4.9 	remuneration must be furnished at those times, must contain the information required, and 
4.10 	must be in the form the commissioner prescribes.
4.11 	(c) The commissioner may prescribe rules providing for reasonable extensions of 
4.12 	time, not in excess of 30 days, to employers or payers required to give the statements to 
4.13 	their employees or payees under this subdivision.
4.14 	(d) A duplicate of any statement made under this subdivision and in accordance 
4.15 	with rules prescribed by the commissioner, along with a reconciliation in the form the 
4.16 	commissioner prescribes of the statements for the calendar year, including a reconciliation 
4.17 	of the quarterly returns required to be filed under subdivision 1, must be filed with the 
4.18 	commissioner on or before February 28 of the year after the payments were made.
4.19 	(e) If an employer cancels the employer's Minnesota withholding account number 
4.20 	required by section 290.92, subdivision 24, the information required by paragraph (d), 
4.21 	must be filed with the commissioner within 30 days of the end of the quarter in which 
4.22 	the employer cancels its account number. 
4.23 	(f) The employer must submit the statements required to be sent to the commissioner 
4.24 	on magnetic media, if the magnetic media wasin the same manner required to satisfy the 
4.25 	federal reporting requirements of section 6011(e) of the Internal Revenue Code and the 
4.26 	regulations issued under it. For wages paid in calendar year 2007, an employer must 
4.27 	submit statements to the commissioner required by this section by electronic means if the 
4.28 	employer is required to send more than 100 statements to the commissioner, even though 
4.29 	the employer is not required to submit the returns federally by electronic means. For 
4.30 	calendar year 2008, the 100 statements threshold is reduced to 25, and for calendar year 
4.31 	2009 and thereafter, the threshold is reduced to ten.
4.32 	(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph 
4.33 	(a), clause (2), must submit the returns required by this subdivision and subdivision 1, 
4.34 	paragraph (a), with the commissioner by electronic means. 

4.35 	EFFECTIVE DATE. This section is effective for wages paid after December 31, 
4.36 	2006.

5.1 	Sec. 3. Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read:
5.2 		Subd. 14.Regulated investment companies; reporting exempt-interest 
5.3 	dividends. (a) A regulated investment company paying $10 or more in exempt-interest 
5.4 	dividends to an individual who is a resident of Minnesota must make a return indicating 
5.5 	the amount of the exempt-interest dividends, the name, address, and Social Security 
5.6 	number of the recipient, and any other information that the commissioner specifies. The 
5.7 	return must be provided to the shareholder no later than 30 days after the close of the 
5.8 	taxable year. The return provided to the shareholder must include a clear statement, in the 
5.9 	form prescribed by the commissioner, that the exempt-interest dividends must be included 
5.10 	in the computation of Minnesota taxable income. The commissioner may by notice and 
5.11 	demand require the regulated investment company is required in a manner prescribed by 
5.12 	the commissioner to file a copy of the return with the commissioner.
5.13 	(b) This subdivision applies to regulated investment companies required to register 
5.14 	under chapter 80A.
5.15 	(c) For purposes of this subdivision, the following definitions apply.
5.16 	(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in 
5.17 	section 852(b)(5) of the Internal Revenue Code, but does not include the portion of 
5.18 	exempt-interest dividends that are not required to be added to federal taxable income 
5.19 	under section 290.01, subdivision 19a, clause (1)(ii). 
5.20 	(2) "Regulated investment company" means regulated investment company as 
5.21 	defined in section 851(a) of the Internal Revenue Code or a fund of the regulated 
5.22 	investment company as defined in section 851(g) of the Internal Revenue Code.

5.23 	EFFECTIVE DATE. This section is effective for tax years beginning after 
5.24 	December 31, 2006.

5.25 	Sec. 4. Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read:
5.26 		Subdivision 1.Individual income, fiduciary income, corporate franchise, and 
5.27 	entertainment taxes; partnership and S corporation returns; information returns; 
5.28 	mining company returns. The returns required to be made under sections 289A.08 and 
5.29 	289A.12 must be filed at the following times:
5.30 	(1) returns made on the basis of the calendar year must be filed on April 15 following 
5.31 	the close of the calendar year, except that returns of corporations must be filed on March 
5.32 	15 following the close of the calendar year;
5.33 	(2) returns made on the basis of the fiscal year must be filed on the 15th day of the 
5.34 	fourth month following the close of the fiscal year, except that returns of corporations 
5.35 	must be filed on the 15th day of the third month following the close of the fiscal year;
6.1 	(3) returns for a fractional part of a year must be filed on the 15th day of the fourth 
6.2 	month following the end of the month in which falls the last day of the period for which 
6.3 	the return is made, except that the returns of corporations must be filed on the 15th day of 
6.4 	the third month following the end of the tax year of the unitary group in which falls the 
6.5 	last day of the period for which the return is made;
6.6 	(4) in the case of a final return of a decedent for a fractional part of a year, the return 
6.7 	must be filed on the 15th day of the fourth month following the close of the 12-month 
6.8 	period that began with the first day of that fractional part of a year;
6.9 	(5) in the case of the return of a cooperative association, returns must be filed on or 
6.10 	before the 15th day of the ninth month following the close of the taxable year;
6.11 	(6) if a corporation has been divested from a unitary group and files a return for 
6.12 	a fractional part of a year in which it was a member of a unitary business that files a 
6.13 	combined report under section 290.34, subdivision 2, the divested corporation's return 
6.14 	must be filed on the 15th day of the third month following the close of the common 
6.15 	accounting period that includes the fractional year;
6.16 	(7) returns of entertainment entities must be filed on April 15 following the close of 
6.17 	the calendar year;
6.18 	(8) returns required to be filed under section 289A.08, subdivision 4, must be filed 
6.19 	on the 15th day of the fifth month following the close of the taxable year;
6.20 	(9) returns of mining companies must be filed on May 1 following the close of the 
6.21 	calendar year; and
6.22 	(10) returns required to be filed with the commissioner under section 289A.12, 
6.23 	subdivision 2,or 4 to 10, or 14, must be filed within 30 days after being demanded by 
6.24 	the commissioner.

6.25 	EFFECTIVE DATE. This section is effective for tax years beginning after 
6.26 	December 31, 2006.

6.27 	Sec. 5. Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read:
6.28 		Subd. 27.Reportable transaction understatement. (a) If a taxpayer has a 
6.29 	reportable transaction understatement for any taxable year, an amount equal to 20 percent 
6.30 	of the amount of the reportable transaction understatement must be added to the tax.
6.31 	(b)(1) For purposes of this subdivision, "reportable transaction understatement" 
6.32 	means the product of:
6.33 	(i) the amount of the increase, if any, in taxable income that results from a difference 
6.34 	between the proper tax treatment of an item to which this section applies and the taxpayer's 
6.35 	treatment of that item as shown on the taxpayer's tax return; and
7.1 	(ii) the highest rate of tax imposed on the taxpayer under section 290.06 determined 
7.2 	without regard to the understatement.
7.3 	(2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed 
7.4 	for the taxable year over gross income for that year, and any reduction in the amount of 
7.5 	capital losses which would, without regard to section 1211 of the Internal Revenue Code, 
7.6 	be allowed for that year, must be treated as an increase in taxable income.
7.7 	(c) This subdivision applies to any item that is attributable to:
7.8 	(1) any listed transaction under section 289A.121; and
7.9 	(2) any reportable transaction, other than a listed transaction, if a significant purpose 
7.10 	of that transaction is the avoidance or evasion of federal income tax liability.
7.11 	(d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect 
7.12 	to the portion of any reportable transaction understatement with respect to which the 
7.13 	disclosure requirements of section 289A.121, subdivision 5, and section 6664(d)(2)(A) 
7.14 	of the Internal Revenue Code are not met.
7.15 	(e)(1) No penalty applies under this subdivision with respect to any portion of a 
7.16 	reportable transaction understatement if the taxpayer shows that there was reasonable 
7.17 	cause for the portion and that the taxpayer acted in good faith with respect to the portion. 
7.18 	This paragraph applies only if:
7.19 	(i) the relevant facts affecting the tax treatment of the item are adequately disclosed 
7.20 	as required under section 289A.121;
7.21 	(ii) there is or was substantial authority for the treatment; and
7.22 	(iii) the taxpayer reasonably believed that the treatment was more likely than not 
7.23 	the proper treatment.
7.24 	(2) A taxpayer who did not adequately disclose under section 289A.121 meets 
7.25 	the requirements of clause (1)(i), if the commissioner abates the penalty imposed by 
7.26 	subdivision 26, paragraph (d), under section 270C.34 subdivision 26, paragraph (g).
7.27 	(3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief 
7.28 	with respect to the tax treatment of an item only if the belief:
7.29 	(i) is based on the facts and law that exist when the return of tax which includes the 
7.30 	tax treatment is filed; and
7.31 	(ii) relates solely to the taxpayer's chances of success on the merits of the treatment 
7.32 	and does not take into account the possibility that a return will not be audited, the 
7.33 	treatment will not be raised on audit, or the treatment will be resolved through settlement 
7.34 	if it is raised.
7.35 	(4) An opinion of a tax advisor may not be relied upon to establish the reasonable 
7.36 	belief of a taxpayer if:
8.1 	(i) the tax advisor:
8.2 	(A) is a material advisor, as defined in section 289A.121, and participates in the 
8.3 	organization, management, promotion, or sale of the transaction or is related (within the 
8.4 	meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person 
8.5 	who so participates;
8.6 	(B) is compensated directly or indirectly by a material advisor with respect to the 
8.7 	transaction;
8.8 	(C) has a fee arrangement with respect to the transaction which is contingent on all 
8.9 	or part of the intended tax benefits from the transaction being sustained; or
8.10 	(D) has a disqualifying financial interest with respect to the transaction, as 
8.11 	determined under United States Treasury regulations prescribed to implement the 
8.12 	provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or
8.13 	(ii) the opinion:
8.14 	(A) is based on unreasonable factual or legal assumptions, including assumptions 
8.15 	as to future events;
8.16 	(B) unreasonably relies on representations, statements, findings, or agreements of 
8.17 	the taxpayer or any other person;
8.18 	(C) does not identify and consider all relevant facts; or
8.19 	(D) fails to meet any other requirement as the Secretary of the Treasury may 
8.20 	prescribe under federal law.
8.21 	(f) The penalty imposed by this subdivision applies in lieu of the penalty imposed 
8.22 	under subdivision 4.

8.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

8.24 	Sec. 6. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
8.25 		Subd. 19d.Corporations; modifications decreasing federal taxable income. For 
8.26 	corporations, there shall be subtracted from federal taxable income after the increases 
8.27 	provided in subdivision 19c:
8.28 	(1) the amount of foreign dividend gross-up added to gross income for federal 
8.29 	income tax purposes under section 78 of the Internal Revenue Code;
8.30 	(2) the amount of salary expense not allowed for federal income tax purposes due 
8.31 	to claiming the federal jobs work opportunity credit under section 51 of the Internal 
8.32 	Revenue Code;
8.33 	(3) any dividend (not including any distribution in liquidation) paid within the 
8.34 	taxable year by a national or state bank to the United States, or to any instrumentality of 
9.1 	the United States exempt from federal income taxes, on the preferred stock of the bank 
9.2 	owned by the United States or the instrumentality;
9.3 	(4) amounts disallowed for intangible drilling costs due to differences between 
9.4 	this chapter and the Internal Revenue Code in taxable years beginning before January 
9.5 	1, 1987, as follows:
9.6 	(i) to the extent the disallowed costs are represented by physical property, an amount 
9.7 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
9.8 	subdivision 7, subject to the modifications contained in subdivision 19e; and
9.9 	(ii) to the extent the disallowed costs are not represented by physical property, an 
9.10 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
9.11 	290.09, subdivision 8;
9.12 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
9.13 	Internal Revenue Code, except that:
9.14 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
9.15 	capital loss carrybacks shall not be allowed;
9.16 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
9.17 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
9.18 	allowed;
9.19 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
9.20 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
9.21 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
9.22 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
9.23 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
9.24 	extent such loss was not used in a prior taxable year and subject to the provisions of 
9.25 	Minnesota Statutes 1986, section 290.16, shall be allowed;
9.26 	(6) an amount for interest and expenses relating to income not taxable for federal 
9.27 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
9.28 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
9.29 	291 of the Internal Revenue Code in computing federal taxable income;
9.30 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
9.31 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (11) (9), a 
9.32 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
9.33 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
9.34 	by the commissioner. In the case of property held in trust, the allowable deduction must 
9.35 	be apportioned between the income beneficiaries and the trustee in accordance with the 
10.1 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
10.2 	of the trust's income allocable to each;
10.3 	(8) for certified pollution control facilities placed in service in a taxable year 
10.4 	beginning before December 31, 1986, and for which amortization deductions were elected 
10.5 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
10.6 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
10.7 	1986, section 290.09, subdivision 7;
10.8 	(9) amounts included in federal taxable income that are due to refunds of income, 
10.9 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
10.10 	corporation to Minnesota, another state, a political subdivision of another state, the 
10.11 	District of Columbia, or a foreign country or possession of the United States to the extent 
10.12 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
10.13 	clause (1), in a prior taxable year;
10.14 	(10) 80 percent of royalties, fees, or other like income accrued or received from a 
10.15 	foreign operating corporation or a foreign corporation which is part of the same unitary 
10.16 	business as the receiving corporation;
10.17 	(11) income or gains from the business of mining as defined in section 290.05, 
10.18 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
10.19 	(12) the amount of disability access expenditures in the taxable year which are not 
10.20 	allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
10.21 	(13) the amount of qualified research expenses not allowed for federal income tax 
10.22 	purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 
10.23 	the amount exceeds the amount of the credit allowed under section 290.068;
10.24 	(14) the amount of salary expenses not allowed for federal income tax purposes due 
10.25 	to claiming the Indian employment credit under section 45A(a) of the Internal Revenue 
10.26 	Code;
10.27 	(15) the amount of any refund of environmental taxes paid under section 59A of the 
10.28 	Internal Revenue Code;
10.29 	(16) (15) for taxable years beginning before January 1, 2008, the amount of the 
10.30 	federal small ethanol producer credit allowed under section 40(a)(3) of the Internal 
10.31 	Revenue Code which is included in gross income under section 87 of the Internal Revenue 
10.32 	Code;
10.33 	(17) (16) for a corporation whose foreign sales corporation, as defined in section 
10.34 	922 of the Internal Revenue Code, constituted a foreign operating corporation during any 
10.35 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
10.36 	claiming the deduction under section 290.21, subdivision 4, for income received from 
11.1 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
11.2 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
11.3 	not income of a foreign operating company;
11.4 	(18) (17) any decrease in subpart F income, as defined in section 952(a) of the 
11.5 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
11.6 	regard to the provisions of section 614 103 of Public Law 107-147 109-222;
11.7 	(19) (18) in each of the five tax years immediately following the tax year in which 
11.8 	an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth 
11.9 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
11.10 	the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The 
11.11 	resulting delayed depreciation cannot be less than zero; and
11.12 	(20) (19) in each of the five tax years immediately following the tax year in which an 
11.13 	addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the 
11.14 	amount of the addition.

11.15 	EFFECTIVE DATE. The amendment to clause (2) is effective the day following 
11.16 	final enactment. The rest of this section is effective for taxable years beginning after 
11.17 	December 31, 2006.

11.18 	Sec. 7. Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read:
11.19 		Subd. 33.Bovine testing credit. (a) An owner of cattle in Minnesota may take a 
11.20 	credit against the tax due under this chapter for an amount equal to one-half the expenses 
11.21 	incurred during the taxable year to conduct tuberculosis testing on those cattle. 
11.22 	(b) If the amount of credit which the taxpayer is eligible to receive under this 
11.23 	subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of 
11.24 	revenue shall refund the excess to the taxpayer.
11.25 	(c) The amount necessary to pay claims for the refund provided in this subdivision is 
11.26 	appropriated from the general fund to the commissioner of revenue.
11.27 	(d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in 
11.28 	Minnesota is not federally required are not allowed in claiming the credit under paragraph 
11.29 	(a).

11.30 	EFFECTIVE DATE. This section is effective for tax years beginning after 
11.31 	December 31, 2007.

11.32 	Sec. 8. Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read:
12.1 		Subd. 2b.Inflation adjustment. The commissioner shall adjust the dollar amount 
12.2 	of the income threshold at which the maximum credit begins to be reduced under 
12.3 	subdivision 2 must be adjusted for inflation. The commissioner shall make the inflation 
12.4 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
12.5 	the purposes of this subdivision the percentage increase must be determined from the year 
12.6 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting 
12.7 	for inflation for the tax year beginning after December 31, 2000. The determination of 
12.8 	the commissioner under this subdivision is not a rule under the Administrative Procedure 
12.9 	Act. by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
12.10 	Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for 
12.11 	the word "1992." For 2001, the commissioner shall then determine the percent change 
12.12 	from the 12 months ending on August 31, 1999, to the 12 months ending on August 31, 
12.13 	2000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the 
12.14 	12 months ending on August 31 of the year preceding the taxable year. The determination 
12.15 	of the commissioner pursuant to this subdivision must not be considered a "rule" and is 
12.16 	not subject to the Administrative Procedure Act contained in chapter 14. The threshold 
12.17 	amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in 
12.18 	$5, the amount is rounded up to the nearest $10 amount.

12.19 	EFFECTIVE DATE. This section is effective for tax years beginning after 
12.20 	December 31, 2006.

12.21 	Sec. 9. Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read:
12.22 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the 
12.23 	credit and the income thresholds at which the maximum credit begins to be reduced in 
12.24 	subdivision 1 must be adjusted for inflation. The commissioner shall make the inflation 
12.25 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
12.26 	the purposes of this subdivision the percentage increase shall be determined from the year 
12.27 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting for 
12.28 	inflation for the tax year beginning after December 31, 2000.adjust by the percentage 
12.29 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
12.30 	that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For 
12.31 	2001, the commissioner shall then determine the percent change from the 12 months 
12.32 	ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each 
12.33 	subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending 
12.34 	on August 31 of the year preceding the taxable year. The earned income thresholds as 
12.35 	adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends 
13.1 	in $5, the amount is rounded up to the nearest $10 amount. The determination of the 
13.2 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.

13.3 	EFFECTIVE DATE. This section is effective for tax years beginning after 
13.4 	December 31, 2006.

13.5 	Sec. 10. Minnesota Statutes 2006, section 290.0677, subdivision 1, is amended to read:
13.6 		Subdivision 1.Credit allowed.  (a) An individual is allowed a credit against the tax 
13.7 	due under this chapter equal to $59 for each month or portion thereof that the individual 
13.8 	was in active military service in a designated area after September 11, 2001, while a 
13.9 	Minnesota domiciliary. 
13.10 	(b) For active service performed after September 11, 2001, and before December 31, 
13.11 	2006, the individual may claim the credit in the taxable year beginning after December 31, 
13.12 	2005, and before January 1, 2007. 
13.13 	(c) For active service performed after December 31, 2006, the individual may claim 
13.14 	the credit for the taxable year in which the active service was performed. 
13.15 	(d) If a Minnesota domiciliary is killed while performing active military service in a 
13.16 	designated area, the individual's surviving spouse or dependent child may take the credit 
13.17 	in the taxable year of the death. If a Minnesota domiciliary was killed while performing 
13.18 	active military service in a designated area between September 11, 2001, and December 
13.19 	31, 2006, the individual's surviving spouse or dependent child may claim this credit in 
13.20 	the taxable year beginning after December 31, 2005, and before January 1, 2007.an 
13.21 	individual entitled to the credit died prior to January 1, 2006, the individual's estate or 
13.22 	heirs at law, if the individual's probate estate has closed or the estate was not probated, 
13.23 	may claim the credit.

13.24 	EFFECTIVE DATE. This section is effective retroactively for tax years beginning 
13.25 	after December 31, 2005.

13.26 	Sec. 11. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
13.27 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative 
13.28 	minimum tax, the exemption amount is:
13.29 	(1) for taxable years beginning before January 1, 2006, the exemption determined 
13.30 	under section 55(d) of the Internal Revenue Code, as amended through December 31, 
13.31 	1992; and
14.1 	(2), for taxable years beginning after December 31, 2005, $60,000 for married 
14.2 	couples filing joint returns, $30,000 for married individuals filing separate returns, estates, 
14.3 	and trusts, and $45,000 for unmarried individuals.
14.4 	(b) The exemption amount determined under this subdivision is subject to the phase 
14.5 	out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 
14.6 	taxable income as determined under this section must be substituted in the computation of 
14.7 	the phase out.
14.8 	(c) For taxable years beginning after December 31, 2006, the exemption amount 
14.9 	under paragraph (a), clause (2), must be adjusted for inflation. The commissioner shall 
14.10 	make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 
14.11 	Code except that for the purposes of this subdivision the percentage increase must be 
14.12 	determined from the year starting September 1, 2005, and ending August 31, 2006, as the 
14.13 	base year for adjusting for inflation for the tax year beginning after December 31, 2006.
14.14 	The commissioner shall adjust the exemption amount by the percentage determined 
14.15 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
14.16 	section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007, 
14.17 	the commissioner shall then determine the percent change from the 12 months ending on 
14.18 	August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent 
14.19 	year, from the 12 months ending on August 31, 2005, to the 12 months ending on August 
14.20 	31 of the year preceding the taxable year. The exemption amount as adjusted must be 
14.21 	rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest 
14.22 	$10 amount. The determination of the commissioner under this subdivision is not a rule 
14.23 	under the Administrative Procedure Act.

14.24 	EFFECTIVE DATE. This section is effective for tax years beginning after 
14.25 	December 31, 2006.

14.26 	Sec. 12. Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read:
14.27 		Subd. 8.Deposit; definition. (a) "Deposit," as used in subdivision 7 6, paragraph 
14.28 	(n), has the meanings in this subdivision.
14.29 	(b) "Deposit" means the unpaid balance of money or its equivalent received or 
14.30 	held by a financial institution in the usual course of business and for which it has given 
14.31 	or is obligated to give credit, either conditionally or unconditionally, to a commercial, 
14.32 	checking, savings, time, or thrift account whether or not advance notice is required to 
14.33 	withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift 
14.34 	certificate, investment certificate, or certificate of indebtedness, or other similar name, or a 
14.35 	check or draft drawn against a deposit account and certified by the financial institution, 
15.1 	or a letter of credit or a traveler's check on which the financial institution is primarily 
15.2 	liable. However, without limiting the generality of the term "money or its equivalent," any 
15.3 	such account or instrument must be regarded as evidencing the receipt of the equivalent 
15.4 	of money when credited or issued in exchange for checks or drafts or for a promissory 
15.5 	note upon which the person obtaining the credit or instrument is primarily or secondarily 
15.6 	liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other 
15.7 	instruments forwarded to the bank for collection.
15.8 	(c) "Deposit" means trust funds received or held by the financial institution, whether 
15.9 	held in the trust department or held or deposited in any other department of the financial 
15.10 	institution.
15.11 	(d) "Deposit" means money received or held by a financial institution, or the credit 
15.12 	given for money or its equivalent received or held by a financial institution, in the usual 
15.13 	course of business for a special or specific purpose, regardless of the legal relationship so 
15.14 	established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds, 
15.15 	funds held as security for an obligation due to the financial institution or others, including 
15.16 	funds held as dealers reserves, or for securities loaned by the financial institution, funds 
15.17 	deposited by a debtor to meet maturing obligations, funds deposited as advance payment 
15.18 	on subscriptions to United States government securities, funds held for distribution or 
15.19 	purchase of securities, funds held to meet its acceptances or letters of credit, and withheld 
15.20 	taxes. It does not include funds received by the financial institution for immediate 
15.21 	application to the reduction of an indebtedness to the receiving financial institution, or 
15.22 	under condition that the receipt of the funds immediately reduces or extinguishes the 
15.23 	indebtedness.
15.24 	(e) "Deposit" means outstanding drafts, including advice or another such institution, 
15.25 	cashier's checks, money orders, or other officer's checks issued in the usual course 
15.26 	of business for any purpose, but not including those issued in payment for services, 
15.27 	dividends, or purchases or other costs or expenses of the financial institution itself.
15.28 	(f) "Deposit" means money or its equivalent held as a credit balance by a financial 
15.29 	institution on behalf of its customer if the entity is engaged in soliciting and holding such 
15.30 	balances in the regular course of its business.
15.31 	(g) Interinstitution fund transfers are not deposits.

15.32 	EFFECTIVE DATE. This section is effective the day following final enactment.

15.33 	Sec. 13. Minnesota Statutes 2006, section 290A.03, subdivision 7, is amended to read:
15.34 		Subd. 7.Dependent. "Dependent" means any person who is considered a 
15.35 	dependent under sections 151 and 152 of the Internal Revenue Code. In the case of a son, 
16.1 	stepson, daughter, or stepdaughter of the claimant, amounts received as a Minnesota 
16.2 	family investment program grant, allowance to or on behalf of the child, surplus food, or 
16.3 	other relief in kind supplied by a governmental agency must not be taken into account 
16.4 	in determining whether the child received more than half of the child's support from 
16.5 	the claimant.

16.6 	EFFECTIVE DATE. This section is effective for property tax refunds based on 
16.7 	rents paid after December 31, 2006, and property taxes payable after December 31, 2007.

16.8 	Sec. 14. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:
16.9 		Subdivision 1.Determination. All property includable in the Minnesota gross 
16.10 	estate of a decedent shall be valued in accordance with the provisions of sections 2031 or 
16.11 	2032 and, if applicable, 2032A, of the Internal Revenue Code and any elections made in 
16.12 	valuing the federal gross estate shall be applicable in valuing the Minnesota gross estate. 
16.13 	Values for purposes of the estate tax on both probate and nonprobate assets shall be the 
16.14 	same as those finally determined for purposes of the federal estate tax on a decedent's 
16.15 	estate. Except as otherwise provided in section 291.075, the value of all property 
16.16 	includable in the Minnesota gross estate of a decedent may be independently determined 
16.17 	under said sections for Minnesota estate tax purposes.

16.18 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
16.19 	dying after December 31, 2005.

16.20 	ARTICLE 2
16.21 	SALES AND USE TAXES

16.22 	Section 1. Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to 
16.23 	read:
16.24 		Subd. 2.Bad debt loss. If a claim relates to an overpayment because of a failure to 
16.25 	deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered 
16.26 	timely if filed within seven years from the date prescribed for the filing of the return. A 
16.27 	claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2 
16.28 	years from the date prescribed for filing the return, plus any extensions granted for filing 
16.29 	the return, but only if filed within the extended time when the bad debt was (1) written off 
16.30 	as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted 
16.31 	for federal income tax purposes or would have been eligible for a bad debt deduction for 
16.32 	federal income tax purposes if the taxpayer were required to file a federal income tax 
16.33 	return, or within one year from the date the taxpayer's federal income tax return is timely 
17.1 	filed claiming the bad debt deduction, whichever period is later. The refund or credit is 
17.2 	limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes 
17.3 	of this subdivision, has the same meaning as that term is used in United States Code, 
17.4 	title 26, section 166, except that for a claim relating to an overpayment of taxes under 
17.5 	chapter 297A the following are excluded from the calculation of bad debt: financing 
17.6 	charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts 
17.7 	on property that remain in the possession of the seller until the full purchase price is 
17.8 	paid; expenses incurred in attempting to collect any debt; and repossessed property. For 
17.9 	purposes of reporting a payment received on previously claimed bad debt under chapter 
17.10 	297A, any payments made on a debt or account are applied first proportionally to the 
17.11 	taxable price of the property or service and the sales tax on it, and secondly to interest, 
17.12 	service charges, and any other charges.

17.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

17.14 	Sec. 2. Minnesota Statutes 2006, section 289A.56, is amended by adding a subdivision 
17.15 	to read:
17.16 		Subd. 8.Border city zone refunds. Notwithstanding subdivision 3, for refunds 
17.17 	payable under section 469.1734, subdivision 6, interest is computed from 90 days after the 
17.18 	refund claim is filed with the commissioner.

17.19 	EFFECTIVE DATE. This section is effective for refund claims filed on or after 
17.20 	July 1, 2007.

17.21 	Sec. 3. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:
17.22 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
17.23 	to, each of the transactions listed in this subdivision.
17.24 	(b) Sale and purchase include:
17.25 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
17.26 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
17.27 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
17.28 	in money or by exchange or barter, tangible personal property, other than a manufactured 
17.29 	home used for residential purposes for a continuous period of 30 days or more.
17.30 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
17.31 	tangible personal property for a consideration for consumers who furnish either directly or 
17.32 	indirectly the materials used in the production, fabrication, printing, or processing.
18.1 	(d) Sale and purchase include the preparing for a consideration of food. 
18.2 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
18.3 	to, the following:
18.4 	(1) prepared food sold by the retailer;
18.5 	(2) soft drinks;
18.6 	(3) candy;
18.7 	(4) dietary supplements; and
18.8 	(5) all food sold through vending machines.
18.9 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
18.10 	gas, water, or steam for use or consumption within this state.
18.11 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
18.12 	computer software whether delivered electronically, by load and leave, or otherwise.
18.13 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
18.14 	services:
18.15 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
18.16 	events, and the making available of amusement devices, tanning facilities, reducing 
18.17 	salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
18.18 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
18.19 	motel, or trailer camp, including furnishing the guest of the facility with access to 
18.20 	telecommunication services, and the granting of any similar license to use real property 
18.21 	in a specific facility, other than the renting or leasing of it for a continuous period of 
18.22 	30 days or more under an enforceable written agreement that may not be terminated 
18.23 	without prior notice;
18.24 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
18.25 	periodic basis, except for parking at a meter;
18.26 	(4) the granting of membership in a club, association, or other organization if:
18.27 	(i) the club, association, or other organization makes available for the use of its 
18.28 	members sports and athletic facilities, without regard to whether a separate charge is 
18.29 	assessed for use of the facilities; and
18.30 	(ii) use of the sports and athletic facility is not made available to the general public 
18.31 	on the same basis as it is made available to members.
18.32 	Granting of membership means both onetime initiation fees and periodic membership 
18.33 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
18.34 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
18.35 	swimming pools; and other similar athletic or sports facilities;
19.1 	(5) delivery of aggregate materials and concrete block by a third party if the delivery 
19.2 	would be subject to the sales tax if provided by the seller of the aggregate material or 
19.3 	concrete block; and
19.4 	(6) services as provided in this clause:
19.5 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
19.6 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
19.7 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
19.8 	include services provided by coin operated facilities operated by the customer;
19.9 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
19.10 	provided by coin operated facilities operated by the customer, and rustproofing, 
19.11 	undercoating, and towing of motor vehicles;
19.12 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
19.13 	pest control and exterminating services;
19.14 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
19.15 	including services performed within the jurisdiction they serve by off-duty licensed peace 
19.16 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
19.17 	organization for monitoring and electronic surveillance of persons placed on in-home 
19.18 	detention pursuant to court order or under the direction of the Minnesota Department 
19.19 	of Corrections;
19.20 	(v) pet grooming services;
19.21 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
19.22 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
19.23 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
19.24 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
19.25 	public utility lines. Services performed under a construction contract for the installation of 
19.26 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
19.27 	(vii) massages, except when provided by a licensed health care facility or 
19.28 	professional or upon written referral from a licensed health care facility or professional for 
19.29 	treatment of illness, injury, or disease; and
19.30 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
19.31 	other similar arrangements, but excluding veterinary and horse boarding services.
19.32 	In applying the provisions of this chapter, the terms "tangible personal property" 
19.33 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
19.34 	and the provision of these taxable services, unless specifically provided otherwise. 
19.35 	Services performed by an employee for an employer are not taxable. Services performed 
19.36 	by a partnership or association for another partnership or association are not taxable if 
20.1 	one of the entities owns or controls more than 80 percent of the voting power of the 
20.2 	equity interest in the other entity. Services performed between members of an affiliated 
20.3 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
20.4 	group of corporations" means those entities that would be classified as members of an 
20.5 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
20.6 	the exclusions in section 1504(b).
20.7 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
20.8 	personal property or taxable services by the United States or any of its agencies or 
20.9 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
20.10 	subdivisions.
20.11 	(i) A sale and a purchase includes the furnishing for a consideration 
20.12 	of telecommunications services, including ancillary services associated with 
20.13 	telecommunication services, cable television services and, direct satellite services, and 
20.14 	ring tones. Telecommunications Telecommunication services include, but are not limited 
20.15 	to, the following services, as defined in section 297A.669: air-to-ground radiotelephone 
20.16 	service, mobile telecommunication service, postpaid calling service, prepaid calling 
20.17 	service, prepaid wireless calling service, and private communication services. The
20.18 	services in this paragraph are taxed to the extent allowed under federal law.
20.19 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
20.20 	the installation charges would be subject to the sales tax if the installation were provided 
20.21 	by the seller of the item being installed.
20.22 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
20.23 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
20.24 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
20.25 	65B.29, subdivision 1, clause (1).

20.26 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
20.27 	or after January 1, 2008.

20.28 	Sec. 4. Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read:
20.29 		Subd. 7.Sales price. (a) "Sales price" means the measure subject to sales tax, and 
20.30 	means the total amount of consideration, including cash, credit, personal property, and 
20.31 	services, for which personal property or services are sold, leased, or rented, valued in 
20.32 	money, whether received in money or otherwise, without any deduction for the following:
20.33 	(1) the seller's cost of the property sold;
21.1 	(2) the cost of materials used, labor or service cost, interest, losses, all costs of 
21.2 	transportation to the seller, all taxes imposed on the seller, and any other expenses of 
21.3 	the seller;
21.4 	(3) charges by the seller for any services necessary to complete the sale, other than 
21.5 	delivery and installation charges;
21.6 	(4) delivery charges, except the percentage of the delivery charge allocated to 
21.7 	delivery of tax exempt property, when the delivery charge is allocated by using either (i) a 
21.8 	percentage based on the total sales price of the taxable property compared to the total sales 
21.9 	price of all property in the shipment, or (ii) a percentage based on the total weight of the 
21.10 	taxable property compared to the total weight of all property in the shipment; and
21.11 	(5) installation charges; and
21.12 	(6) the value of exempt property given to the purchaser when taxable and exempt 
21.13 	personal property have been bundled together and sold by the seller as a single product 
21.14 	or piece of merchandise.
21.15 	(b) Sales price does not include:
21.16 	(1) discounts, including cash, terms, or coupons, that are not reimbursed by a third 
21.17 	party and that are allowed by the seller and taken by a purchaser on a sale;
21.18 	(2) interest, financing, and carrying charges from credit extended on the sale of 
21.19 	personal property or services, if the amount is separately stated on the invoice, bill of sale, 
21.20 	or similar document given to the purchaser; and
21.21 	(3) any taxes legally imposed directly on the consumer that are separately stated on 
21.22 	the invoice, bill of sale, or similar document given to the purchaser.
21.23 	(c) Sales price includes consideration received by the seller from third parties if:
21.24 	(1) the seller actually receives consideration from a party other than the purchaser 
21.25 	and the consideration is directly related to a price reduction or discount on the sale;
21.26 	(2) the seller has an obligation to pass the price reduction or discount through to 
21.27 	the purchaser; 
21.28 	(3) the amount of the consideration attributable to the sale is fixed and determinable 
21.29 	by the seller at the time of the sale of the item to the purchaser; and
21.30 	(4) one of the following criteria is met: 
21.31 	(i) the purchaser presents a coupon, certificate, or other documentation to the seller 
21.32 	to claim a price reduction or discount when the coupon, certificate, or documentation is 
21.33 	authorized, distributed, or granted by a third party with the understanding that the third 
21.34 	party will reimburse any seller to whom the coupon, certificate, or documentation is 
21.35 	presented; 
22.1 	(ii) the purchaser identifies himself or herself to the seller as a member of a group or 
22.2 	organization entitled to a price reduction or discount. A "preferred customer" card that is 
22.3 	available to any customer does not constitute membership in such a group; or 
22.4 	(iii) the price reduction or discount is identified as a third-party price reduction or 
22.5 	discount on the invoice received by the purchaser or on a coupon, certificate, or other 
22.6 	documentation presented by the purchaser.

22.7 	EFFECTIVE DATE. This section is effective for sales and purchases made on or 
22.8 	after January 1, 2008, except that the amendment to paragraph (a), clause (4), is effective 
22.9 	the day following final enactment.

22.10 	Sec. 5. Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read:
22.11 		Subd. 10.Tangible personal property. (a) "Tangible personal property" means 
22.12 	personal property that can be seen, weighed, measured, felt, or touched, or that is in any 
22.13 	other manner perceptible to the senses. "Tangible personal property" includes, but is not 
22.14 	limited to, electricity, water, gas, steam, and prewritten computer software, and prepaid 
22.15 	calling cards.
22.16 	(b) Tangible personal property does not include:
22.17 	(1) large ponderous machinery and equipment used in a business or production 
22.18 	activity which at common law would be considered to be real property;
22.19 	(2) property which is subject to an ad valorem property tax;
22.20 	(3) property described in section 272.02, subdivision 9, clauses (a) to (d); and 
22.21 	(4) property described in section 272.03, subdivision 2, clauses (3) and (5). 

22.22 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
22.23 	or after January 1, 2008.

22.24 	Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read:
22.25 		Subd. 24.Telecommunications services. (a) "Telecommunications services" means 
22.26 	the electronic transmission, conveyance, or routing of voice, data, audio, video, or any 
22.27 	other information or signals to a point, or between or among points, by or through any 
22.28 	electronic, satellite, optical, microwave, or other medium or method now in existence or 
22.29 	hereafter devised, regardless of the protocol used for such transmission, conveyance, 
22.30 	or routing.
22.31 	(b) Telecommunications services includes the furnishing for consideration of access 
22.32 	to telephone services by a hotel to its guests. include transmission, conveyance, or routing 
22.33 	in which computer processing applications are used to act on the form, code, or protocol 
23.1 	of the content for purposes of transmission, conveyance, or routing, without regard to 
23.2 	whether the service is referred to as voice over Internet protocol services or is classified by 
23.3 	the Federal Communications Commission as enhanced or value added.
23.4 	(c) Telecommunications services do not include:
23.5 	(1) services purchased with a prepaid telephone calling card;
23.6 	(2) private communication service purchased by an agent acting on behalf of the 
23.7 	State Lottery;
23.8 	(3) information services; and
23.9 	(4) purchases of telecommunications when the purchaser uses the purchased services 
23.10 	as a component part of or integrates such service into another telecommunications service 
23.11 	that is sold by the purchaser in the normal course of business.
23.12 	(d) For purposes of this subdivision, "information services" means the offering of 
23.13 	the capability for generating, acquiring, storing, transforming, processing, retrieving, 
23.14 	utilizing, or making available information.
23.15 	(1) data processing and information services that allow data to be generated, 
23.16 	acquired, stored, processed, or retrieved and delivered by an electronic transmission to 
23.17 	a purchaser when the purchaser's primary purpose for the underlying transaction is the 
23.18 	processed data or information;
23.19 	(2) installation or maintenance of wiring or equipment on a customer's premises;
23.20 	(3) tangible personal property;
23.21 	(4) advertising, including, but not limited to, directory advertising;
23.22 	(5) billing and collection services provided to third parties;
23.23 	(6) Internet access service;
23.24 	(7) radio and television audio and video programming services, regardless of the 
23.25 	medium, including the furnishing of transmission, conveyance, and routing of such 
23.26 	services by the programming service provider. Radio and television audio and video 
23.27 	programming services includes, but is not limited to, cable service as defined in United 
23.28 	States Code, title 47, section 522(6), and audio and video programming services delivered 
23.29 	by commercial mobile radio service providers, as defined in Code of Federal Regulations, 
23.30 	title 47, section 20.3;
23.31 	(8) ancillary services; or
23.32 	(9) digital products delivered electronically, including, but not limited to, software, 
23.33 	music, video, reading materials, or ring tones.

23.34 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
23.35 	or after January 1, 2008.

24.1 	Sec. 7. Minnesota Statutes 2006, section 297A.61, is amended by adding a subdivision 
24.2 	to read:
24.3 		Subd. 39.Ancillary services. "Ancillary services" means services that are 
24.4 	associated with or incidental to the provision of telecommunications services, including, 
24.5 	but not limited to, conference bridging service, detailed telecommunications billing, 
24.6 	directory assistance, vertical service, and voice mail services.

24.7 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
24.8 	or after January 1, 2008.

24.9 	Sec. 8. Minnesota Statutes 2006, section 297A.61, is amended by adding a subdivision 
24.10 	to read:
24.11 		Subd. 40.Conference bridging service. "Conference bridging service" means an 
24.12 	ancillary service that links two or more participants of an audio or video conference call 
24.13 	and may include the provision of a telephone number. Conference bridging service does 
24.14 	not include the telecommunications services used to reach the conference bridge.

24.15 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
24.16 	or after January 1, 2008.

24.17 	Sec. 9. Minnesota Statutes 2006, section 297A.61, is amended by adding a subdivision 
24.18 	to read:
24.19 		Subd. 41.Detailed telecommunications billing service. "Detailed 
24.20 	telecommunications billing service" means an ancillary service of separately stating 
24.21 	information pertaining to individual calls on a customer's billing statement.

24.22 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
24.23 	or after January 1, 2008.

24.24 	Sec. 10. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
24.25 	subdivision to read:
24.26 		Subd. 42.Directory assistance. "Directory assistance" means an ancillary service 
24.27 	of providing telephone number information or address information, or both.

24.28 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
24.29 	or after January 1, 2008.

25.1 	Sec. 11. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
25.2 	subdivision to read:
25.3 		Subd. 43.Vertical service. "Vertical service" means an ancillary service that is 
25.4 	offered in connection with one or more telecommunications services and which offers 
25.5 	advanced calling features that allow customers to identify callers and to manage multiple 
25.6 	calls and call connections, including conference bridging services.

25.7 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
25.8 	or after January 1, 2008.

25.9 	Sec. 12. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
25.10 	subdivision to read:
25.11 		Subd. 44.Voice mail service. "Voice mail service" means an ancillary service that 
25.12 	enables the customer to store, send, or receive recorded messages. Voice mail service 
25.13 	does not include any vertical services that the customer may be required to have in order 
25.14 	to utilize the voice mail service.

25.15 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
25.16 	or after January 1, 2008.

25.17 	Sec. 13. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
25.18 	subdivision to read:
25.19 		Subd. 45.Ring tone. "Ring tone" means a digitized sound file that is downloaded 
25.20 	onto a device and that may be used to alert the customer of a telecommunication service 
25.21 	with respect to a communication.

25.22 	EFFECTIVE DATE. This section is effective the day following final enactment.

25.23 	Sec. 14. Minnesota Statutes 2006, section 297A.665, is amended to read:
25.24 	297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
25.25 	(a) For the purpose of the proper administration of this chapter and to prevent 
25.26 	evasion of the tax, until the contrary is established, it is presumed that:
25.27 	(1) all gross receipts are subject to the tax; and
25.28 	(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 
25.29 	in Minnesota.
25.30 	(b) The burden of proving that a sale is not a taxable retail sale is on the seller. 
25.31 	However, the seller may take from the purchaser at the time of the sale a fully completed 
26.1 	exemption certificate which conclusively relieves the seller from collecting and remitting 
26.2 	the tax. This However, a seller is relieved of liability if:
26.3 	(1) the seller obtains a fully completed exemption certificate or all the relevant 
26.4 	information required by section 297A.72, subdivision 2, at the time of the sale or within 
26.5 	90 days after the date of the sale; or
26.6 	(2) if the seller has not obtained a fully completed exemption certificate or all the 
26.7 	relevant information required by section 297A.72, subdivision 2, within the time provided 
26.8 	in clause (1), within 120 days after a request for substantiation by the commissioner, 
26.9 	the seller either:
26.10 	(i) obtains in good faith a fully completed exemption certificate or all the relevant 
26.11 	information required by section 297A.72, subdivision 2, from the purchaser; or
26.12 	(ii) proves by other means that the transaction was not subject to tax.
26.13 	(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
26.14 	(1) fraudulently fails to collect the tax; or 
26.15 	(2) solicits purchasers to participate in the unlawful claim of an exemption. If a 
26.16 	seller claiming that certain sales are exempt is not in possession of the required exemption 
26.17 	certificates within 60 days after receiving written notice from the commissioner that the 
26.18 	certificates are required, deductions claimed by the seller that required delivery of the 
26.19 	certificates must be disallowed. If the certificates are delivered to the commissioner within 
26.20 	the 60-day period, the commissioner may verify the reason or basis for the exemption 
26.21 	claimed in the certificates before allowing any deductions. A deduction must not be 
26.22 	granted on the basis of certificates delivered to the commissioner after the 60-day period.
26.23 	(c) (d) A purchaser of tangible personal property or any items listed in section 
26.24 	297A.63 that are shipped or brought to Minnesota by the purchaser has the burden 
26.25 	of proving that the property was not purchased from a retailer for storage, use, or 
26.26 	consumption in Minnesota. 

26.27 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
26.28 	or after January 1, 2008.

26.29 	Sec. 15. Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read:
26.30 		Subd. 3.Defined telecommunications services sourcing. The sale of the following 
26.31 	telecommunication services shall be sourced to each level of taxing jurisdiction in 
26.32 	paragraphs (a) to (d).
26.33 	(a) A sale of mobile telecommunications services, other than air-to-ground 
26.34 	radiotelephone service and prepaid calling service, is sourced to the customer's place of 
26.35 	primary use as required by the Mobile Telecommunications Sourcing Act.
27.1 	(b) A sale of postpaid calling service is sourced to the origination point of the 
27.2 	telecommunications signal as first identified by either:
27.3 	(1) the seller's telecommunications system; or
27.4 	(2) information received by the seller from its service provider, where the system 
27.5 	used to transport such signals is not that of the seller.
27.6 	(c) A sale of prepaid calling service or prepaid wireless calling service is sourced in 
27.7 	accordance with section 297A.668, subdivision 2. However, in the case of a sale of mobile 
27.8 	telecommunications service that is a prepaid telecommunicationswireless calling service, 
27.9 	the rule provided in section 297A.668, subdivision 2, paragraph (f), shall include as an 
27.10 	option the location associated with the mobile telephone number. 
27.11 	(d) A sale of a private communication service is sourced as follows:
27.12 	(1) service for a separate charge related to a customer channel termination point is 
27.13 	sourced to each level of jurisdiction in which the customer channel termination point 
27.14 	is located;
27.15 	(2) service where all customer termination points are located entirely within one 
27.16 	jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer 
27.17 	channel termination points are located;
27.18 	(3) service for segments of a channel between two customer channel termination 
27.19 	points located in different jurisdictions and which segment of channel are separately 
27.20 	charged is sourced 50 percent in each level of jurisdiction in which the customer channel 
27.21 	termination points are located; and
27.22 	(4) service for segments of a channel located in more than one jurisdiction or 
27.23 	levels of jurisdiction and which segments are not separately billed is sourced in each 
27.24 	jurisdiction based on the percentage determined by dividing the number of customer 
27.25 	channel termination points in the jurisdiction by the total number of customer channel 
27.26 	termination points.

27.27 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
27.28 	or after January 1, 2008.

27.29 	Sec. 16. Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to 
27.30 	read:
27.31 		Subd. 13.Postpaid calling service. "Postpaid calling service," for purposes of 
27.32 	this section, means the telecommunications service obtained by making a payment 
27.33 	on a call-by-call basis either through the use of a credit card or payment mechanism 
27.34 	such as a bank card, travel card, credit card, or debit card, or by a charge made to 
27.35 	a telephone number that is not associated with the origination or termination of the 
28.1 	telecommunications service. A postpaid calling service includes a telecommunications 
28.2 	service, except a prepaid wireless calling service, that would be a prepaid calling service 
28.3 	except it is not exclusively a telecommunication service.

28.4 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
28.5 	or after January 1, 2008.

28.6 	Sec. 17. Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to 
28.7 	read:
28.8 		Subd. 14.Prepaid calling service. "Prepaid calling service," for purposes of this 
28.9 	section, means a telecommunications service that:
28.10 	(1) provides the right to access exclusively telecommunications services, which;
28.11 	(2) must be paid for in advance and which;
28.12 	(3) enables the origination of calls using an access number or authorization code, 
28.13 	whether manually or electronically dialed,; and that
28.14 	(4) is sold in predetermined units or dollars of which the number declines with 
28.15 	use in a known amount.

28.16 	EFFECTIVE DATE. This section is effective the day following final enactment.

28.17 	Sec. 18. Minnesota Statutes 2006, section 297A.669, is amended by adding a 
28.18 	subdivision to read:
28.19 		Subd. 14a.Prepaid wireless calling service. "Prepaid wireless calling service," for 
28.20 	purposes of this section, means a telecommunications service that: 
28.21 	(1) provides the right to utilize mobile wireless service as well as other 
28.22 	nontelecommunications services, including the download of digital products delivered 
28.23 	electronically, content, and ancillary services; 
28.24 	(2) must be paid for in advance; and 
28.25 	(3) is sold in predetermined units or dollars of which the number declines with 
28.26 	use in a known amount.

28.27 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
28.28 	or after January 1, 2008.

28.29 	Sec. 19. Minnesota Statutes 2006, section 297A.669, is amended by adding a 
28.30 	subdivision to read:
28.31 		Subd. 17.Ancillary service. The sale of an ancillary service is sourced to the 
28.32 	customer's place of primary use.

29.1 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
29.2 	or after January 1, 2008.

29.3 	Sec. 20. Minnesota Statutes 2006, section 297A.67, subdivision 9, is amended to read:
29.4 		Subd. 9.Baby products. Breast pumps, baby bottles and nipples, pacifiers, teething 
29.5 	rings, and infant syringes are exempt.

29.6 	EFFECTIVE DATE. This section is effective for sales and purchases made on or 
29.7 	after the day following final enactment.

29.8 	Sec. 21. Minnesota Statutes 2006, section 297A.68, subdivision 11, is amended to read:
29.9 		Subd. 11.Advertising materials. Materials designed to advertise and promote the 
29.10 	sale of merchandise or services are exempt if these materials are mailed or transferred to a 
29.11 	person outside the state for use solely outside the state. Mailing and reply envelopes and 
29.12 	cards and other shipping materials including, but not limited to, boxes, labels, containers, 
29.13 	and banding, used exclusively in connection with these advertising and promotional 
29.14 	materials are included in this exemption. The exemption applies regardless of where the 
29.15 	mailing occurs. The storage of these materials in the state for the purpose of subsequently 
29.16 	shipping or otherwise transferring the material out of state is also exempt if the other 
29.17 	conditions in this subdivision are met. For purposes of this subdivision, materials that have 
29.18 	a primary purpose other than advertising, such as fulfilling a legal obligation or furnishing 
29.19 	nonadvertising information, are not materials designed to advertise and promote the sale 
29.20 	of merchandise or services even if they do include advertising content.

29.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

29.22 	Sec. 22. Minnesota Statutes 2006, section 297A.68, subdivision 16, is amended to read:
29.23 		Subd. 16.Packing materials. Packing materials used to pack and ship household 
29.24 	goods and that are provided to and remain with the customer of a for-hire carrier are 
29.25 	exempt if the ultimate destination of the goods is outside Minnesota and if the goods
29.26 	packing materials are not later returned to a point within Minnesota, except in the course 
29.27 	of interstate commerce. This exemption does not apply to tools, equipment, pads, or 
29.28 	accessories owned or leased by the for-hire carrier.

29.29 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
29.30 	June 30, 2007.

29.31 	Sec. 23. Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read:
30.1 		Subd. 35.Telecommunications, cable television, and direct satellite  equipment.
 30.2 	(a) Telecommunications, cable television, or direct satellite  machinery and equipment 
30.3 	purchased or leased for use directly by a telecommunications, cable television, or 
30.4 	direct satellite  service provider primarily in the provision of telecommunications, cable 
30.5 	television, or direct satellite  services that are ultimately to be sold at retail are exempt, 
30.6 	regardless of whether purchased by the owner, a contractor, or a subcontractor.
30.7 	(b) For purposes of this subdivision, "telecommunications, cable television, or direct 
30.8 	satellite machinery and equipment" includes, but is not limited to:
30.9 	(1) machinery, equipment, and fixtures utilized in receiving, initiating, 
30.10 	amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring 
30.11 	telecommunications, cable television, or direct satellite services, such as computers, 
30.12 	transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items 
30.13 	performing comparable functions;
30.14 	(2) machinery, equipment, and fixtures used in the transportation of 
30.15 	telecommunications, cable television, or direct satellite services, radio transmitters and 
30.16 	receivers, satellite equipment, microwave equipment, and other transporting media, but 
30.17 	not wire, cable, fiber, poles, or conduit;
30.18 	(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or 
30.19 	enable the machinery in clauses (1) and (2) to accomplish its intended function, such as 
30.20 	auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning 
30.21 	equipment necessary to the operation of the telecommunications, cable television, or direct 
30.22 	satellite  equipment; and software necessary to the operation of the telecommunications, 
30.23 	cable television, or direct satellite equipment; and
30.24 	(4) repair and replacement parts, including accessories, whether purchased as spare 
30.25 	parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
30.26 	(c) For purposes of this subdivision, "telecommunications services" means 
30.27 	telecommunications services as defined in section 297A.61, subdivision 24, paragraphs 
30.28 	(a), (c), and (d).

30.29 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
30.30 	or after January 1, 2008.

30.31 	Sec. 24. Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read:
30.32 		Subd. 7.Hospitals and outpatient surgical centers. (a) Sales, except for those 
30.33 	listed in paragraph (c), to a hospital are exempt, if the items purchased are used in 
30.34 	providing hospital services. For purposes of this subdivision, "hospital" means a hospital 
30.35 	organized and operated for charitable purposes within the meaning of section 501(c)(3) of 
31.1 	the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction, 
31.2 	and "hospital services" are services authorized or required to be performed by a "hospital" 
31.3 	under chapter 144.
31.4 	(b) Sales, except for those listed in paragraph (c), to an outpatient surgical center 
31.5 	are exempt, if the items purchased are used in providing outpatient surgical services. For 
31.6 	purposes of this subdivision, "outpatient surgical center" means an outpatient surgical 
31.7 	center organized and operated for charitable purposes within the meaning of section 
31.8 	501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other 
31.9 	jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means: 
31.10 	(1) services authorized or required to be performed by an outpatient surgical center under 
31.11 	chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means 
31.12 	health services furnished to a person whose medical condition is sufficiently acute to 
31.13 	require treatment unavailable through, or inappropriate to be provided by, a clinic or 
31.14 	physician's office, but not so acute as to require treatment in a hospital emergency room.
31.15 	(c) This exemption does not apply to the following products and services:
31.16 	(1) purchases made by a clinic, physician's office, or any other medical facility not 
31.17 	operating as a hospital or outpatient surgical center, even though the clinic, office, or 
31.18 	facility may be owned and operated by a hospital or outpatient surgical center;
31.19 	(2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and 
31.20 	prepared food, candy, and soft drinks; 
31.21 	(3) building and construction materials used in constructing buildings or facilities 
31.22 	that will not be used principally by the hospital or outpatient surgical center;
31.23 	(4) building, construction, or reconstruction materials purchased by a contractor 
31.24 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
31.25 	guaranteed maximum price covering both labor and materials for use in the construction, 
31.26 	alteration, or repair of a hospital or outpatient surgical center; or
31.27 	(5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5. 
31.28 	(d) A limited liability company also qualifies for exemption under this subdivision if 
31.29 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
31.30 	purchased qualify for the exemption.
31.31 	(e) An entity that contains both a hospital and a nonprofit unit may claim this 
31.32 	exemption on purchases made for both the hospital and nonprofit unit provided that:
31.33 	(1) the nonprofit unit would have qualified for exemption under subdivision 4; and
31.34 	(2) the items purchased would have qualified for the exemption.

31.35 	EFFECTIVE DATE. This section is effective the day following final enactment.

32.1 	Sec. 25. Minnesota Statutes 2006, section 297A.70, is amended by adding a 
32.2 	subdivision to read:
32.3 		Subd. 17.Private communication service for State Lottery. Private 
32.4 	communication service, as defined in section 297A.61, subdivision 26, is exempt if the 
32.5 	service is purchased by an agent acting on behalf of the State Lottery.

32.6 	EFFECTIVE DATE. This section is effective for sales and purchases made on 
32.7 	or after January 1, 2008.

32.8 	Sec. 26. Minnesota Statutes 2006, section 297A.72, is amended to read:
32.9 	297A.72 EXEMPTION CERTIFICATES.
32.10 		Subd. 2.Content and form of exemption certificate. An exemption certificate 
32.11 	must be substantially in the form prescribed by the commissioner and. To be fully 
32.12 	completed, the exemption certificate must:
32.13 	(1) either be signed by the purchaser if it is a paper form, or meet the requirements 
32.14 	of section 270C.304 if in electronic form;
32.15 	(2) bear the name and address of the purchaser; and
32.16 	(3) indicate the sales tax account identification number, if any, issued to the 
32.17 	purchaser. as follows:
32.18 	(i) the purchaser's Minnesota tax identification number;
32.19 	(ii) if the purchaser does not have a Minnesota tax identification number, then the 
32.20 	purchaser's state tax identification number that is issued by a state other than Minnesota, 
32.21 	and the name of that state;
32.22 	(iii) if the purchaser does not have an identification number described in either item 
32.23 	(i) or (ii), then the purchaser's federal Employer Identification Number; or
32.24 	(iv) if the purchaser does not have an identification number described in item (i), (ii), 
32.25 	or (iii), then either the number of the purchaser's state-issued driver's license, if valid in 
32.26 	the state of issue, or if the purchaser does not have a driver's license, a valid state-issued 
32.27 	identification number, and the name of the state of issue;
32.28 	(4) indicate the purchaser's type of business, using a business-type coding system 
32.29 	prescribed by the commissioner; and
32.30 	(5) indicate the reason for the exemption, using an exemption reason coding system 
32.31 	prescribed by the commissioner.
32.32 		Subd. 3.Purchaser requirement. A blanket exemption certificate is an exemption 
32.33 	certificate used for continuing future purchases. A purchaser using a blanket exemption 
33.1 	certificate must update it as needed to accurately reflect the information that is required 
33.2 	under subdivision 2.

33.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.4 	Sec. 27. Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read:
33.5 		Subd. 2.Payment of tax. (a) Persons who are registered as retailers may make 
33.6 	purchases in this state or import property into this state without payment of the sales or use 
33.7 	taxes imposed by this chapter at the time of purchase or importation, if the purchases or 
33.8 	importations come within the provisions of this section and are made in strict compliance 
33.9 	with the rules of the commissioner.
33.10 	(b) A person described in subdivision 1 may elect to pay directly to the commissioner 
33.11 	any sales or use tax that may be due under this chapter for the acquisition of mobile 
33.12 	transportation equipment and parts and accessories attached or to be attached to such 
33.13 	equipment registered under section 168.187. 
33.14 	(c) The total cost of such equipment and parts and accessories attached or to be 
33.15 	attached to such equipment must be multiplied by a fraction. The numerator of the fraction 
33.16 	is the Minnesota mileage as reported on the current pro rata application provided for in 
33.17 	section 168.187 and the denominator of the fraction is the total mileage reported on the 
33.18 	current pro rata registration application. The amount so determined must be multiplied by 
33.19 	the tax rate to obtain the tax due. 
33.20 	In computing the tax under this section "sales price" does not include the amount of any 
33.21 	tax, except any manufacturer's or importer's excise tax, imposed by the United States 
33.22 	upon or with respect to retail sales, whethertaxes imposed directly on the retailer or the
33.23 	consumer that are separately stated on the invoice, bill of sale, or similar document given 
33.24 	to the purchaser.
33.25 	(d) A retailer covered by this section shall make a return and remit to the 
33.26 	commissioner the tax due for the preceding calendar month in accordance with sections 
33.27 	289A.11 and 289A.20, subdivision 4. 

33.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.29 	Sec. 28. Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read:
33.30 		Subdivision 1.Ordinary course of business. Except as provided in this section, 
33.31 	motor vehicles purchased solely for resale in the ordinary course of business by any motor 
33.32 	vehicle dealer, as defined in section 168.011, subdivision 21, who is licensed under section 
34.1 	168.27, subdivision 2 or 3, including vehicles which bear dealer plates as authorized by 
34.2 	section 168.27, subdivision 16, shall be exempt from the provisions of this chapter. 

34.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

34.4 	Sec. 29. Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read:
34.5 		Subd. 6.Sales tax exemption; equipment; construction materials. (a) The gross 
34.6 	receipts from the sale of machinery and equipment and repair parts are exempt from 
34.7 	taxation under chapter 297A, if the machinery and equipment:
34.8 	(1) are used in connection with a trade or business;
34.9 	(2) are placed in service in a city that is authorized to designate a zone under section 
34.10 	469.1731, regardless of whether the machinery and equipment are used in a zone; and
34.11 	(3) have a useful life of 12 months or more.
34.12 	(b) The gross receipts from the sale of construction materials are exempt, if they are 
34.13 	used to construct:
34.14 	(1) a facility for use in a trade or business located in a city that is authorized to 
34.15 	designate a zone under section 469.1731, regardless of whether the facility is located in a 
34.16 	zone; or
34.17 	(2) housing that is located in a zone.
34.18 	The exemptions under this paragraph apply regardless of whether the purchase is made by 
34.19 	the owner, the user, or a contractor.
34.20 	(c) A purchaser may claim an exemption under this subdivision for tax on the 
34.21 	purchases up to, but not exceeding:
34.22 	(1) the amount of the tax credit certificates received from the city, less
34.23 	(2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and 
34.24 	section 469.1732, subdivision 2.
34.25 	(d) The tax on sales of items exempted under this subdivision shall be imposed and 
34.26 	collected as if the applicable rate under section 297A.62 applied. Upon application by the 
34.27 	purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall 
34.28 	be paid to the purchaser. The application must include sufficient information to permit 
34.29 	the commissioner to verify the sales tax paid and the eligibility of the claimant to receive 
34.30 	the credit. No more than two applications for refunds may be filed under this subdivision 
34.31 	in a calendar year. The provisions of section 289A.40 apply to the refunds payable 
34.32 	under this subdivision. There is annually appropriated to the commissioner of revenue 
34.33 	the amount required to make the refunds, which must be deducted from the amount of 
35.1 	the city's allocation under section 469.169, subdivision 12, that remains available and its 
35.2 	limitation under section 469.1735. 
35.3 	(e) The amount to be refunded shall bear interest at the rate in section 270C.405
35.4 	from the date90 days after the refund claim is filed with the commissioner.

35.5 	EFFECTIVE DATE. This section is effective for refund claims filed on or after 
35.6 	July 1, 2007.

35.7 	Sec. 30.  REPEALER.
 35.8 	(a) Minnesota Statutes 2006, section 297A.61, subdivision 20, is repealed.
35.9 	(b) Minnesota Statutes 2006, section 297A.668, subdivision 6, is repealed.
35.10 	(c) Minnesota Statutes 2006, section 297A.67, subdivision 22, is repealed.

35.11 	EFFECTIVE DATE. Paragraph (a) is effective for sales and purchases made on 
35.12 	or after January 1, 2008; and paragraphs (b) and (c) are effective the day following final 
35.13 	enactment.

35.14 	ARTICLE 3
35.15 	SPECIAL TAXES

35.16 	Section 1. Minnesota Statutes 2006, section 62I.06, subdivision 6, is amended to read:
35.17 		Subd. 6.Deficits Deficit assessments. The association shall certify to the 
35.18 	commissioner the estimated amount of any deficit remaining after the stabilization reserve 
35.19 	fund has been exhausted and payment of the maximum final premium for all policyholders 
35.20 	of the association. Within 60 days after the certification, the commissioner shall authorize 
35.21 	the association to recover the members' respective shares of the deficit by assessing 
35.22 	all members an amount sufficient to fully fund the obligations of the association. The 
35.23 	assessment of each member shall be determined in the manner provided in section 62I.07. 
35.24 	An assessment made pursuant to this section shall be deductible by the member from past 
35.25 	or future premium taxes due the state as provided in section 297I.20, subdivision 2. 

35.26 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
35.27 	1, 2008.

35.28 	Sec. 2. Minnesota Statutes 2006, section 71A.04, subdivision 1, is amended to read:
35.29 		Subdivision 1.Premium tax. The attorney-in-fact, in lieu of all taxes, state, county, 
35.30 	and municipal, shall file with the commissioner of revenue all returns and pay to the 
35.31 	commissioner of revenue all amounts required under chapter 297I.

36.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

36.2 	Sec. 3. Minnesota Statutes 2006, section 287.22, is amended to read:
36.3 	287.22 EXEMPTIONS.
36.4 	The tax imposed by section 287.21 does not apply to: 
36.5 	(1) An executory contract for the sale of real property under which the purchaser is 
36.6 	entitled to or does take possession of the real property, or any assignment or cancellation 
36.7 	of the contract;
36.8 	(2) A mortgage or an amendment, assignment, extension, partial release, or 
36.9 	satisfaction of a mortgage;
36.10 	(3) A will;
36.11 	(4) A plat;
36.12 	(5) A lease, amendment of lease, assignment of lease, or memorandum of lease;
36.13 	(6) A deed, instrument, or writing in which the United States or any agency or 
36.14 	instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;
36.15 	(7) A deed for a cemetery lot or lots;
36.16 	(8) A deed of distribution by a personal representative;
36.17 	(9) A deed to or from a co-owner partitioning their undivided interest in the same 
36.18 	piece of real property;
36.19 	(10) A deed or other instrument of conveyance issued pursuant to a permanent 
36.20 	school fund land exchange under section 92.121 and related laws; 
36.21 	(11) A referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;
36.22 	(12) A referee's, sheriff's, or certificate holder's certificate of redemption from a 
36.23 	mortgage or lien foreclosure sale issued to the redeeming mortgagor or lienee to the 
36.24 	redeeming mortgagor's assignee, heir, personal representative, or successor;
36.25 	(13) A deed, instrument, or writing which grants, creates, modifies, or terminates an 
36.26 	easement; and
36.27 	(14) A decree of marriage dissolution, as defined in section 287.01, subdivision 4, 
36.28 	or a deed or other instrument between the parties to the dissolution made pursuant to 
36.29 	the terms of the decree. 

36.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

36.31 	Sec. 4. Minnesota Statutes 2006, section 287.2205, is amended to read:
36.32 	287.2205 TAX-FORFEITED LAND.
37.1 	Before a state deed for tax-forfeited land may be issued, the deed tax must be paid 
37.2 	by the purchaser of tax-forfeited land whether the purchase is the result of a public 
37.3 	auction or private sale or a repurchase of tax-forfeited land. State agencies and local 
37.4 	units of government that acquire tax-forfeited land by purchase or any other means are 
37.5 	subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a 
37.6 	governmental subdivision for an authorized public use under section 282.01, subdivision 
37.7 	1a, or for redevelopment purposes under section 282.01, subdivision 1b.

37.8 	EFFECTIVE DATE. This section is effective the day following final enactment.

37.9 	Sec. 5. Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:
37.10 		Subd. 4.Use tax; prescription drugs. (a) A person that receives prescription drugs 
37.11 	for resale or use in Minnesota, other than from a wholesale drug distributor that is subject 
37.12 	to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug 
37.13 	distributor multiplied by the tax percentage specified in this section. Liability for the tax is 
37.14 	incurred when prescription drugs are received or delivered in Minnesota by the person.
37.15 	(b) A person that receives prescription drugs for use in Minnesota from a nonresident 
37.16 	pharmacy required to be registered under section 151.19 is subject to a tax equal to 
37.17 	the price paid by the nonresident pharmacy to the wholesale drug distributor or the 
37.18 	price received by the nonresident pharmacy, whichever is lower, multiplied by the tax 
37.19 	percentage specified in this section. Liability for the tax is incurred when prescription 
37.20 	drugs are received in Minnesota by the person.
37.21 	(c) (b) A tax imposed under this subdivision does not apply to purchases by an 
37.22 	individual for personal consumption.

37.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

37.24 	Sec. 6. Minnesota Statutes 2006, section 295.52, subdivision 4a, is amended to read:
37.25 		Subd. 4a.Tax collection. A wholesale drug distributor with nexus in Minnesota, 
37.26 	who is not subject to tax under subdivision 3, on all or a particular transaction or a 
37.27 	nonresident pharmacy with nexus in Minnesota, is required to collect the tax imposed 
37.28 	under subdivision 4, from the purchaser of the drugs and give the purchaser a receipt 
37.29 	for the tax paid. The tax collected shall be remitted to the commissioner in the manner 
37.30 	prescribed by section 295.55, subdivision 3. 

37.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

37.32 	Sec. 7. Minnesota Statutes 2006, section 295.54, subdivision 2, is amended to read:
38.1 		Subd. 2.Pharmacy refund. A pharmacy may claim an annual refund against the 
38.2 	total amount of tax, if any, the pharmacy owes during that calendar year under section 
38.3 	295.52, subdivision 2. The refund shall equal the amount paid by the pharmacy to a 
38.4 	wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend 
38.5 	drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage 
38.6 	specified in section 295.52. If the amount of the refund exceeds the tax liability of the 
38.7 	pharmacy under section 295.52, subdivision 1b 2, the commissioner shall provide the 
38.8 	pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply 
38.9 	for the refund on the annual return as provided under section 295.55, subdivision 5. The 
38.10 	refund must be claimed within one year of the due date of the return. Interest on refunds 
38.11 	paid under this subdivision will begin to accrue 60 days after the date a claim for refund is 
38.12 	filed. For purposes of this subdivision, the date a claim is filed is the due date of the return 
38.13 	or the date of the actual claim for refund, whichever is later. 

38.14 	EFFECTIVE DATE. This section is effective the day following final enactment.

38.15 	Sec. 8. Minnesota Statutes 2006, section 297F.25, is amended by adding a subdivision 
38.16 	to read:
38.17 		Subd. 3a.Consumer use tax; use tax return; cigarette consumer. (a) On or before 
38.18 	the 18th day of each calendar month, a consumer who, during the preceding calendar 
38.19 	month, has acquired title to or possession of cigarettes for use or storage in this state, upon 
38.20 	which the sales tax imposed by this section has not been paid, shall file a return with the 
38.21 	commissioner showing the quantity of cigarettes so acquired or possessed. The return 
38.22 	must be made in the form and manner prescribed by the commissioner, and must contain 
38.23 	any other information required by the commissioner. The return must be accompanied by 
38.24 	a remittance for the full unpaid sales tax liability shown by it.
38.25 	(b) The tax imposed under paragraph (a) does not apply if (1) the consumer has 
38.26 	acquired title to or possession of cigarettes for use or storage in this state in quantities 
38.27 	of 200 or fewer in the month, and (2) the cigarettes were carried into this state by that 
38.28 	consumer.

38.29 	EFFECTIVE DATE. This section is effective for cigarettes which a consumer has 
38.30 	acquired title to or possession of on or after July 1, 2007.

38.31 	Sec. 9. Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read:
38.32 		Subdivision 1.Insurance policies surcharge. (a) Except as otherwise provided 
38.33 	in subdivision 2, each insurer engaged in writing policies of homeowner's insurance 
39.1 	authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or 
39.2 	commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the 
39.3 	gross premiums and assessments, less return premiums, on direct business received by 
39.4 	the company, or by its agents for it, for homeowner's insurance policies, commercial fire 
39.5 	policies, and commercial nonliability insurance policies in this state.
39.6 	(b) The surcharge amount collected under paragraph (a) or subdivision 2, paragraph 
39.7 	(b), may not be considered premium for any other purpose. The surcharge amount must be 
39.8 	separately stated on either a billing or policy declaration sent to an insured.
39.9 	(c) Amounts collected by the commissioner under this section must be deposited in 
39.10 	the fire safety account established pursuant to subdivision 3.

39.11 	EFFECTIVE DATE. This section is effective July 1, 2007, and applies to policies 
39.12 	written or renewed on or after July 1, 2007.

39.13 	Sec. 10. Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read:
39.14 		Subd. 2.Exemptions. (a) This section does not apply to a farmers' mutual fire 
39.15 	insurance company or township mutual fire insurance company in Minnesota organized 
39.16 	under chapter 67A.
39.17 	(b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to 
39.18 	transact business in Minnesota shall elect to remit to the Department of Revenue for 
39.19 	deposit in the fire safety account either (1) the surcharge amount collected imposed under 
39.20 	this section subdivision 1 on all premiums subject to that surcharge, or (2) a surcharge of 
39.21 	one-half of one percent on the gross fire premiums and assessments, less return premiums, 
39.22 	on all direct business received by the insurer or agents of the insurer in Minnesota, in 
39.23 	cash or otherwise, during the year. 
39.24 	(c) The election must be made prior to July 1, 2007, for policies written or renewed 
39.25 	between July 1, 2007, and December 31, 2007, and by December 31 of each year for 
39.26 	insurance for policies written or renewed in the succeeding calendar year. An insurer 
39.27 	who elects to remit the one-half of one percent surcharge on gross fire premiums and 
39.28 	assessments must not charge the insured the surcharge imposed under subdivision 1.
39.29 	(c)(d) For purposes of this subdivision, "gross fire premiums and assessments" 
39.30 	includes premiums on policies covering fire risks only on automobiles, whether written or 
39.31 	under floater form or otherwise.

39.32 	EFFECTIVE DATE. The requirement for certain insurers to make an election 
39.33 	before July 1, 2007, is effective the day following final enactment. The rest of this section 
40.1 	is effective July 1, 2007, and applies to insurance policies written or renewed on or after 
40.2 	that date.

40.3 	Sec. 11. Minnesota Statutes 2006, section 297I.20, subdivision 2, is amended to read:
40.4 		Subd. 2.Joint Underwriting Association offset. An insurance company may offset 
40.5 	against its premium tax liability to this state any amount paid for an assessment made 
40.6 	pursuant to section 62I.06, subdivision 6, shall be deductible by the member from past 
40.7 	or future premium taxes due the state. The offset against premium tax liability must be 
40.8 	claimed beginning with the taxable year that the assessment is paid. To the extent that the 
40.9 	allowable offset exceeds the tax liability, the remaining offset must be carried forward to 
40.10 	succeeding taxable years until the entire offset has been credited against the insurance 
40.11 	company's liability for premium tax under this chapter.

40.12 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
40.13 	1, 2008.

40.14 	Sec. 12. Minnesota Statutes 2006, section 297I.40, subdivision 5, is amended to read:
40.15 		Subd. 5.Definition of tax. The term "tax" as used in this section means the tax 
40.16 	imposed by section 297I.05, subdivisions 1 to 6, 11, and 12, paragraphs (a), clauses (1) 
40.17 	to (5), (b), and (e) (d), without regard to the retaliatory provisions of section 297I.05, 
40.18 	subdivision 11, and the less any offset in section 297I.20. 

40.19 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
40.20 	1, 2008.

40.21 	ARTICLE 4
40.22 	PROPERTY TAXES AND AIDS

40.23 	Section 1. Minnesota Statutes 2006, section 270.071, subdivision 7, is amended to read:
40.24 		Subd. 7.Flight property. "Flight property" means all aircraft and flight equipment 
40.25 	used in connection therewith, including spare flight equipment. Flight property also 
40.26 	includes computers and computer software used in operating, controlling, or regulating 
40.27 	aircraft and flight equipment.

40.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

40.29 	Sec. 2. Minnesota Statutes 2006, section 270.072, subdivision 2, is amended to read:
41.1 		Subd. 2.Assessment of flight property. The Flight property ofthat is owned by, 
41.2 	or is leased, loaned, or otherwise made available to all airline companies operating in 
41.3 	Minnesota shall be assessed and appraised annually by the commissioner with reference 
41.4 	to its value on January 2 of the assessment year in the manner prescribed by sections 
41.5 	270.071 to 270.079. Aircraft with a gross weight of less than 30,000 pounds and used on 
41.6 	intermittent or irregularly timed flights shall be excluded from the provisions of sections 
41.7 	270.071 to 270.079. 

41.8 	EFFECTIVE DATE. This section is effective the day following final enactment.

41.9 	Sec. 3. Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read:
41.10 		Subd. 3.Report by airline company. Each year, on or before July 1, every airline 
41.11 	company engaged in air commerce in this state shall file with the commissioner on or 
41.12 	before the time fixed by the commissioner a report under oath setting forth specifically 
41.13 	the information prescribed by the commissioner to enable the commissioner to make the 
41.14 	assessment required in sections 270.071 to 270.079, unless the commissioner determines 
41.15 	that the airline company or person should be excluded from filing because its activities do 
41.16 	not constitute air commerce as defined herein. A penalty of five percent of the tax being 
41.17 	assessed is imposed on a late filing of the annual report. If the report is not filed within 
41.18 	30 days, an additional penalty of five percent of the assessed tax is imposed for each 
41.19 	additional 30 days or fraction of 30 days until the return is filed. The penalty imposed 
41.20 	under this section must not exceed the lesser of $25,000 or 25 percent of the assessed tax.

41.21 	EFFECTIVE DATE. This section is effective beginning January 2, 2007, for taxes 
41.22 	payable in 2008 and thereafter.

41.23 	Sec. 4. Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read:
41.24 		Subd. 6.Airflight property tax lien. The tax imposed under sections 270.071 to 
41.25 	270.079 is a lien on all real and personal property within this state of the airline company 
41.26 	in whose name the property is assessed. For purposes of sections 270C.62 and 270C.63, 
41.27 	the date of assessment for the tax imposed under sections 270.071 to 270.079 isThe lien 
41.28 	attaches on January 2 of each year for the taxes payable in the following year.

41.29 	EFFECTIVE DATE. This section is effective beginning January 2, 2007, for taxes 
41.30 	payable in 2008 and thereafter.

41.31 	Sec. 5. [270.0725] PENALTIES.
42.1 		Subdivision 1.Penalty for late filing. If an airline company does not file its annual 
42.2 	report by the date designated in section 270.072, subdivision 3, a penalty of five percent 
42.3 	of the tax being assessed is imposed on that company. On August 1, and on the first day 
42.4 	of each succeeding calendar month, an additional five percent penalty is imposed if the 
42.5 	report has not yet been filed. For each airline company, the penalties imposed under 
42.6 	this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of 
42.7 	the assessed tax. 
42.8 		Subd. 2.Penalty for repeated instances of late filing. If there is a pattern of 
42.9 	repeated failures by an airline company to timely file the report required by this section, a 
42.10 	penalty of ten percent of the tax being assessed is imposed on that company.
42.11 		Subd. 3.Penalty for frivolous report. If an airline company files a frivolous annual 
42.12 	report, a penalty of 25 percent of the tax being assessed is imposed on that company. A 
42.13 	frivolous report under this section is a report that would fulfill the criteria for a frivolous 
42.14 	return under section 289A.60, subdivision 7, notwithstanding the restriction in section 
42.15 	289A.01. In a proceeding involving the issue of whether or not an airline company is 
42.16 	liable for this penalty, the burden of proof is on the commissioner.
42.17 		Subd. 4.Penalty for fraudulent report. If an airline company files a false or 
42.18 	fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50 
42.19 	percent of the tax being assessed is imposed on that company.
42.20 		Subd. 5.Penalties added to tax. Penalties imposed under this section are added to 
42.21 	the tax and collected as a part of it.

42.22 	EFFECTIVE DATE. This section is effective for annual reports due on or after 
42.23 	July 1, 2007.

42.24 	Sec. 6. [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS.
42.25 	In addition to the powers granted to the commissioner in this chapter, and in order to 
42.26 	determine net tax capacities and issue notices of net tax capacity and tax under sections 
42.27 	270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and 
42.28 	270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes 
42.29 	an airline company.

42.30 	EFFECTIVE DATE. This section is effective beginning January 2, 2007, for taxes 
42.31 	payable in 2008 and thereafter.

42.32 	Sec. 7. Minnesota Statutes 2006, section 270.074, subdivision 3, is amended to read:
43.1 		Subd. 3.Tax capacity. (a) The net tax capacity of the flight property of every airline 
43.2 	company shall have a tax capacity ofis 70 percent of the value thereof apportioned to this 
43.3 	state under subdivision 1, except that the net tax capacity of quiet aircraft shall have a 
43.4 	tax capacity ofis 40 percent of the value determined under subdivision 1. Quiet aircraft 
43.5 	shall include "Quiet aircraft" means turboprops and aircraft defined as stage III or IV by 
43.6 	the Federal Aeronautics Administration. If, in the opinion of the commissioner, other 
43.7 	aircraft may be qualified as quiet aircraft, the commissioner may adopt rules providing 
43.8 	additional qualifications.
43.9 	(b) The flight property of an airline company that owns or leases aircraft the majority 
43.10 	of which are turboprops, and which provides, during six months or more of the year that 
43.11 	taxes are levied, scheduled passenger service to three or more airports inside or outside of 
43.12 	this state that serve small or medium sized communities, shall be assessed at 50 percent of 
43.13 	the assessment percentage otherwise set by paragraph (a).

43.14 	EFFECTIVE DATE. This section is effective beginning January 2, 2007, for taxes 
43.15 	payable in 2008 and thereafter.

43.16 	Sec. 8. Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read:
43.17 		Subdivision 1.Appeal. Any airline company against which a tax has been imposed 
43.18 	under sections 270.071 to 270.079 shall have the right to appeal within 60 days from the 
43.19 	date of notice of the levy of the taxThe notices of net tax capacity and of tax required 
43.20 	under section 270.075, subdivision 2, are orders of the commissioner. These orders must 
43.21 	be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject 
43.22 	to administrative review under section 270C.35. These orders may be appealed to the Tax 
43.23 	Court in the manner provided by law in section 271.06 for appealing official orders of 
43.24 	the commissioner that do not deal with valuation, assessment, or taxation for property 
43.25 	tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter 
43.26 	278 do not apply. 

43.27 	EFFECTIVE DATE. This section is effective beginning January 2, 2007, for taxes 
43.28 	payable in 2008 and thereafter.

43.29 	Sec. 9. Minnesota Statutes 2006, section 270.41, subdivision 1, is amended to read:
43.30 		Subdivision 1.Creation; purpose; powers. A Board of Assessors is created. 
43.31 	The board shall establish, conduct, review, supervise, coordinate, and approve courses 
43.32 	in assessment practices, and establish criteria for determining assessor's qualifications. 
43.33 	The board shall also consider other matters relating to assessment administration brought 
44.1 	before it by the commissioner of revenue. The board may grant, renew, suspend, or revoke 
44.2 	an assessor's license.

44.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

44.4 	Sec. 10. Minnesota Statutes 2006, section 270.41, is amended by adding a subdivision 
44.5 	to read:
44.6 		Subd. 1a.Definition. For purposes of sections 270.41 to 270.50, "board" means 
44.7 	the Board of Assessors.

44.8 	EFFECTIVE DATE. This section is effective the day following final enactment.

44.9 	Sec. 11. Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read:
44.10 		Subd. 2.Members. The board shall consist of nine members, who shall be 
44.11 	appointed by the commissioner of revenue, in the manner provided herein. The members 
44.12 	shall include:
44.13 	(1) two from the Department of Revenue;
44.14 	(2) two county assessors;
44.15 	(3) two assessors who are not county assessors, one of whom shall be a township 
44.16 	assessor;
44.17 	(4) one from the private appraisal field holding a professional appraisal designation; 
44.18 	and
44.19 	(5) two public members as defined by section 214.02. 
44.20 	The appointment provided in clauses (2) and (3) may be made from two listsa list 
44.21 	of not less than three names each, one submitted to the commissioner of revenue by the 
44.22 	Minnesota Association of Assessing Officers or its successor organization containing 
44.23 	recommendations for the appointment of appointees described in clause clauses (2), 
44.24 	and one by the Minnesota Association of Assessors, Inc. or its successor organization 
44.25 	containing recommendations for the appointees described in clause (3) and (3). The lists
44.26 	list must be submitted 30 days before the commencement of the term. In the case of a 
44.27 	vacancy, a new list shall be furnished to the commissioner by the respective organization
44.28 	immediately. A member of the board who is no longer engaged in the capacity listed 
44.29 	abovethat was the basis of appointment is disqualified from membership in the board.
44.30 	The board shall annually elect a chair and a secretaryvice-chair of the board.

44.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

44.32 	Sec. 12. Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read:
45.1 		Subd. 3.Licenses; refusal or revocation. The board may refuse to grant or renew, 
45.2 	or may suspend or revoke, a license of an applicant or licensee for any of the following 
45.3 	causes or acts:
45.4 	(1) failure to complete required training;
45.5 	(2) inefficiency or neglect of duty;
45.6 	(3) "unprofessional conduct" which means knowingly neglecting to perform a duty 
45.7 	required by law, or violation of the laws of this state relating to the assessment of property 
45.8 	or unlawfully exempting property or knowingly and intentionally listing property on the 
45.9 	tax list at substantially less than its market value or the level required by law in order to 
45.10 	gain favor or benefit, or knowingly and intentionally misclassifying property in order to 
45.11 	gain favor or benefit failure to comply with the Code of Conduct and Ethics for Licensed 
45.12 	Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session 
45.13 	chapter 3, article 1, section 38;
45.14 	(4) conviction of a crime involving moral turpitude; or
45.15 	(5) any other cause or act that in the board's opinion warrants a refusal to issue 
45.16 	or suspension or revocation of a license.

45.17 	EFFECTIVE DATE. This section is effective the day following final enactment.

45.18 	Sec. 13. Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read:
45.19 		Subd. 5.Prohibited activity. An assessor, deputy assessor, assistant assessor, 
45.20 	appraiser,A licensed assessor or other person employed by an assessment jurisdiction 
45.21 	or contracting with an assessment jurisdiction for the purpose of valuing or classifying 
45.22 	property for property tax purposes is prohibited from making appraisals or analyses, 
45.23 	accepting an appraisal assignment, or preparing an appraisal report as defined in section 
45.24 	82B.02, subdivisions 2 to 5, on any property within the assessment jurisdiction where the 
45.25 	individual is employed or performing the duties of the assessor under contract. Violation 
45.26 	of this prohibition shall result in immediate revocation of the individual's license to assess 
45.27 	property for property tax purposes. This prohibition must not be construed to prohibit an 
45.28 	individual from carrying out any duties required for the proper assessment of property 
45.29 	for property tax purposes. If a formal resolution has been adopted by the governing body 
45.30 	of a governmental unit, which specifies the purposes for which such work will be done, 
45.31 	this prohibition does not apply to appraisal activities undertaken on behalf of and at the 
45.32 	request of the governmental unit that has employed or contracted with the individual. 
45.33 	The resolution may only allow appraisal activities which are related to condemnations, 
45.34 	right-of-way acquisitions, or special assessments. 

46.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

46.2 	Sec. 14. Minnesota Statutes 2006, section 270.44, is amended to read:
46.3 	270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.
46.4 	The board shall charge the following fees:
46.5 	(1) $105 for a senior accredited Minnesota assessor license;
46.6 	(2) $80 for an accredited Minnesota assessor license;
46.7 	(3) $65 for a certified Minnesota assessor specialist license;
46.8 	(4) $55 for a certified Minnesota assessor license;
46.9 	(5) $50 for a course challenge examination;
46.10 	(6)(5) $35 for grading a form appraisal;
46.11 	(7)(6) $60 for grading a narrative appraisal;
46.12 	(8)(7) $30 for a reinstatement fee;
46.13 	(9)(8) $25 for a record retention fee; and
46.14 	(10)(9) $20 for an educational transcript; and.
46.15 	(11) $30 for all retests of board-sponsored educational courses.

46.16 	EFFECTIVE DATE. This section is effective the day following final enactment.

46.17 	Sec. 15. Minnesota Statutes 2006, section 270.45, is amended to read:
46.18 	270.45 DISPOSITION OF FEES.
46.19 	All fees so established and collected shall be paid to the commissioner of finance for 
46.20 	deposit in the general fund. The expenses of carrying out the provisions of sections 270.41
46.21 	to 270.53 shall be paid from appropriations made to the board of Assessors. 

46.22 	EFFECTIVE DATE. This section is effective the day following final enactment.

46.23 	Sec. 16. Minnesota Statutes 2006, section 270.46, is amended to read:
46.24 	270.46 TRAINING COURSES, ESTABLISHMENT; OTHER COURSES,
46.25 	REGULATION.
46.26 	The board shall establishreview and approve training courses on assessment 
46.27 	practices and shall review and approve courses on assessment practices, techniques of 
46.28 	assessment, and ethics  offered by schools, colleges and,  universities as well as courses that 
46.29 	are offered by any units of government on techniques of assessment. Courses shall be 
46.30 	established in various places throughout the state and be offered on regular intervals, units 
46.31 	of government, and other entities.

47.1 	EFFECTIVE DATE. This section is effective the day following final enactment.

47.2 	Sec. 17. Minnesota Statutes 2006, section 270.47, is amended to read:
47.3 	270.47 RULES.
47.4 	The board shall establish theadopt rules necessary to accomplish the purpose of 
47.5 	sectionsections 270.41 to 270.51, and shall establish criteria required of assessing officials 
47.6 	in the state. Separate criteria may be established depending upon the responsibilities of the 
47.7 	assessor. The board shall prepare and give examinations from time to time to determine 
47.8 	whether assessing officials possess the necessary qualifications for performing the 
47.9 	functions of the office. Such tests shall be given immediately upon completion of courses 
47.10 	required by the board, or to persons who already possess the requisite qualifications under 
47.11 	the rules of the board. An action of the board in refusing to grant or renew a license or in 
47.12 	suspending or revoking a license is subject to review in accordance with chapter 14.

47.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

47.14 	Sec. 18. Minnesota Statutes 2006, section 270.48, is amended to read:
47.15 	270.48 LICENSURE OF QUALIFIED PERSONS.
47.16 	The board shall may license persons as possessing the necessary qualifications of an 
47.17 	assessing official. Different levels of licensure may be established as to classes of property 
47.18 	which assessors may be certified to assess at the discretion of the board. Every person, 
47.19 	except a local or county assessor, regularly employed by the assessor to assist in making 
47.20 	decisions regarding valuing and classifying property for assessment purposes shall be 
47.21 	required tomust become licensed within three years of the date of employment. Licensure 
47.22 	shall be required for local and county assessors as otherwise provided in sections 270.41
47.23 	to 270.53 section 273.061 and rules adopted by the board. 

47.24 	EFFECTIVE DATE. This section is effective the day following final enactment.

47.25 	Sec. 19. Minnesota Statutes 2006, section 270.50, is amended to read:
47.26 	270.50 EMPLOYMENT OF LICENSED ASSESSORS.
47.27 	No assessor shall be employed who has not been licensed as qualified by the board, 
47.28 	provided the time to comply may be extended after application to the board upon a 
47.29 	showing that licensed assessors are not available for employment. The board may license 
47.30 	that a county or local assessor who has not received the training, but possesses the 
47.31 	necessary qualifications for performing the functions of the office by the passage of an 
48.1 	approved examination or may waive the examination if such person has demonstrated 
48.2 	competence in performing the functions of the office for a period of time the board deems 
48.3 	reasonable. The county or local assessing district shall assume the cost of training of its 
48.4 	assessors in courses approved by the board for the purpose of obtaining the assessor's 
48.5 	license to the extent of course fees, mileage, meals and lodging, and recognized travel 
48.6 	expenses not paid by the state. If the governing body of any township or city fails to 
48.7 	employ an assessor as required by sections 270.41 to 270.53, the assessment shall be 
48.8 	made by the county assessor. 
48.9 	In the case of cities incorporated or townships organized after April 11, 1974, except 
48.10 	cities or towns located in Ramsey county or which have elected a county assessor system 
48.11 	in accordance with section 273.055, the board shall allow the city or town 90 days from 
48.12 	the date of incorporation or organization to employ a licensed assessor.

48.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

48.14 	Sec. 20. Minnesota Statutes 2006, section 270C.306, is amended to read:
48.15 	270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR 
48.16 	IDENTIFYING NUMBERS ON FORMS.
48.17 	Notwithstanding the provisions of any other law except section 272.115, the 
48.18 	commissioner may require that a form required to be filed with the commissioner include 
48.19 	the Social Security number, federal employer identification number, or Minnesota 
48.20 	taxpayer identification number of the taxpayer or applicant.

48.21 	EFFECTIVE DATE. This section is effective July 1, 2007.

48.22 	Sec. 21. Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read:
48.23 		Subdivision 1.Authority. (a) The commissioner may abate, reduce, or refund any 
48.24 	penalty or interest that is imposed by a law administered by the commissioner as a result 
48.25 	of the late payment of tax or late filing of a return, if the failure to timely pay the tax or 
48.26 	failure to timely file the return is due to reasonable cause, or if the taxpayer is located 
48.27 	in a presidentially declared disaster area.
48.28 	(b) The commissioner shall abate any part of a penalty or additional tax charge 
48.29 	under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 
48.30 	advice given to the taxpayer in writing by an employee of the department acting in 
48.31 	an official capacity, if the advice:
48.32 	(1) was reasonably relied on and was in response to a specific written request of the 
48.33 	taxpayer; and
49.1 	(2) was not the result of failure by the taxpayer to provide adequate or accurate 
49.2 	information.
49.3 	(c) The commissioner may abate a penalty imposed under section 270.0725, 
49.4 	subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline 
49.5 	company is located in a presidentially declared disaster area.

49.6 	EFFECTIVE DATE. This section is effective July 1, 2007.

49.7 	Sec. 22. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:
49.8 		Subd. 64.Job opportunity building zone property. (a) Improvements to real 
49.9 	property, and personal property, classified under section 273.13, subdivision 24, and 
49.10 	located within a job opportunity building zone, designated under section 469.314, are 
49.11 	exempt from ad valorem taxes levied under chapter 275.
49.12 	(b) Improvements to real property, and tangible personal property, of an agricultural 
49.13 	production facility located within an agricultural processing facility zone, designated 
49.14 	under section 469.314, is exempt from ad valorem taxes levied under chapter 275.
49.15 	(c) For property to qualify for exemption under paragraph (a), the occupant must be 
49.16 	a qualified business, as defined in section 469.310.
49.17 	(d) The exemption applies beginning for the first assessment year after designation 
49.18 	of the job opportunity building zone by the commissioner of employment and economic 
49.19 	development. The exemption applies to each assessment year that begins during the 
49.20 	duration of the job opportunity building zone. To be exempt, the property must be 
49.21 	occupied by July 1 of the assessment year by a qualified business that has signed the 
49.22 	business subsidy agreement and relocation agreement, if required, by July 1 of the 
49.23 	assessment year. This exemption does not apply to:
49.24 	(1) the levy under section 475.61 or similar levy provisions under any other law to 
49.25 	pay general obligation bonds; or
49.26 	(2) a levy under section 126C.17, if the levy was approved by the voters before the 
49.27 	designation of the job opportunity building zone.
49.28 	(e) Except for property of a business that was exempt under this subdivision for 
49.29 	taxes payable in 2007, a business must notify the county assessor in writing of eligibility 
49.30 	under this subdivision by July 1 in order to begin receiving the exemption under this 
49.31 	subdivision for taxes payable in the following year. The business need not annually notify 
49.32 	the county assessor of its continued exemption under this subdivision, but must notify the 
49.33 	county assessor immediately if the exemption no longer applies.

49.34 	EFFECTIVE DATE. This section is effective the day following final enactment.

50.1 	Sec. 23. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
50.2 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 
50.3 	whenever any real estate is sold for a consideration in excess of $1,000, whether by 
50.4 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
50.5 	grantee or the legal agent of either shall file a certificate of value with the county 
50.6 	auditor in the county in which the property is located when the deed or other document 
50.7 	is presented for recording. Contract for deeds are subject to recording under section 
50.8 	507.235, subdivision 1. Value shall, in the case of any deed not a gift, be the amount of 
50.9 	the full actual consideration thereof, paid or to be paid, including the amount of any lien 
50.10 	or liens assumed. The items and value of personal property transferred with the real 
50.11 	property must be listed and deducted from the sale price. The certificate of value shall 
50.12 	include the classification to which the property belongs for the purpose of determining 
50.13 	the fair market value of the property. The certificate shall include financing terms and 
50.14 	conditions of the sale which are necessary to determine the actual, present value of 
50.15 	the sale price for purposes of the sales ratio study. The commissioner of revenue shall 
50.16 	promulgate administrative rules specifying the financing terms and conditions which must 
50.17 	be included on the certificate. Pursuant to the authority of the commissioner of revenue in 
50.18 	section 270C.306, The certificate of value must include the Social Security number or 
50.19 	the federal employer identification number of the grantors and grantees. However, a 
50.20 	married person who is not an owner of record and who is signing a conveyance instrument 
50.21 	along with the person's spouse solely because of the requirement in section 507.02 that 
50.22 	spouses of owners must sign certain conveyances is not a grantor for the purpose of the 
50.23 	preceding sentence. The identification numbers of the grantors and grantees are private 
50.24 	data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12, 
50.25 	but, notwithstanding that section, the private or nonpublic data may be disclosed to the 
50.26 	commissioner of revenue for purposes of tax administration. The information required to 
50.27 	be shown on the certificate of value is limited to the information required as of the date of 
50.28 	the acknowledgment on the deed or other document to be recorded.

50.29 	EFFECTIVE DATE. This section is effective for certificates of value filed on or 
50.30 	after July 1, 2007.

50.31 	Sec. 24. Minnesota Statutes 2006, section 273.05, is amended by adding a subdivision 
50.32 	to read:
50.33 		Subd. 3.Cities and townships; employment of licensed assessor. In the case 
50.34 	of cities or townships, except cities or towns located in Ramsey County or which have 
50.35 	elected a county assessor system in accordance with section 273.055, the commissioner 
51.1 	shall allow the city or town 90 days from the date of incorporation or organization to 
51.2 	employ a licensed assessor.

51.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

51.4 	Sec. 25. [273.0535] COUNTY OR LOCAL ASSESSING DISTRICT TO ASSUME 
51.5 	COST OF TRAINING.
51.6 	The county or local assessing district must assume the cost of training its assessors 
51.7 	in courses approved by the board for the purpose of obtaining the assessor's license to 
51.8 	the extent of course fees, mileage, meals, and lodging, and recognized travel expenses 
51.9 	not paid by the state.

51.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

51.11 	Sec. 26. Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read:
51.12 		Subd. 3.Requirements. (a) Real estate consisting of ten acres or more or a nursery 
51.13 	or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13, 
51.14 	shall be entitled to valuation and tax deferment under this section only if it is primarily 
51.15 	devoted to agricultural use, and meets the qualifications in subdivision 6, and either: 
51.16 	(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the 
51.17 	owner or is real estate which is farmed with the real estate which contains the homestead 
51.18 	property; or
51.19 	(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling, 
51.20 	or any combination thereof, for a period of at least seven years prior to application for 
51.21 	benefits under the provisions of this section, or is real estate which is farmed with the 
51.22 	real estate which qualifies under this clause and is within four townships or cities or 
51.23 	combination thereof from the qualifying real estate; or
51.24 	(3) is the homestead of a shareholder in a family farm corporation as defined in 
51.25 	section 500.24, notwithstanding the fact that legal title to the real estate may be held in the 
51.26 	name of the family farm corporation; or 
51.27 	(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor, 
51.28 	partnership, or corporation which also owns the nursery or greenhouse operations on 
51.29 	the parcel or parcels.
51.30 	(b) Valuation of real estate under this section is limited to parcels the ownership of 
51.31 	which is in noncorporate entities except for:
51.32 	(1) family farm corporations organized pursuant to section 500.24; and 
52.1 	(2) corporations that derive 80 percent or more of their gross receipts from the 
52.2 	wholesale or retail sale of horticultural or nursery stock.
52.3 	Corporate entities who previously qualified for tax deferment pursuant to this section 
52.4 	and who continue to otherwise qualify under subdivisions 3 and 6 for a period of at least 
52.5 	three years following the effective date of Laws 1983, chapter 222, section 8, will not be 
52.6 	required to make payment of the previously deferred taxes, notwithstanding the provisions 
52.7 	of subdivision 9. Special assessments are payable at the end of the three-year period 
52.8 	or at time of sale, whichever comes first.
52.9 	(c) Land that previously qualified for tax deferment under this section and no longer 
52.10 	qualifies because it is not primarily used for agricultural purposes but would otherwise 
52.11 	qualify under subdivisions 3 and 6 for a period of at least three years will not be required 
52.12 	to make payment of the previously deferred taxes, notwithstanding the provisions of 
52.13 	subdivision 9. Sale of the land prior to the expiration of the three-year period requires 
52.14 	payment of deferred taxes as follows: sale in the year the land no longer qualifies requires 
52.15 	payment of the current year's deferred taxes plus payment of deferred taxes for the two 
52.16 	prior years; sale during the second year the land no longer qualifies requires payment of 
52.17 	the current year's deferred taxes plus payment of the deferred taxes for the prior year; and 
52.18 	sale during the third year the land no longer qualifies requires payment of the current 
52.19 	year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to 
52.20 	subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or 
52.21 	at the end of the three-year period, whichever comes first, all deferred special assessments 
52.22 	plus interest are payable in equal installments spread over the time remaining until the last 
52.23 	maturity date of the bonds issued to finance the improvement for which the assessments 
52.24 	were levied. If the bonds have matured, the deferred special assessments plus interest 
52.25 	are payable within 90 days. The provisions of section 429.061, subdivision 2, apply 
52.26 	to the collection of these installments. Penalties are not imposed on any such special 
52.27 	assessments if timely paid. 

52.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

52.29 	Sec. 27. Minnesota Statutes 2006, section 273.117, is amended to read:
52.30 	273.117 CONSERVATION PROPERTY TAX VALUATION.
52.31 	Real property which is subject to a conservation restriction or easement shallmay be 
52.32 	entitled to reduced valuation under this section if:
52.33 	(a) The restriction or easement is for a conservation purpose as defined in section 
52.34 	84.64, subdivision 2, and is recorded on the property; 
53.1 	(b) The property is being used in accordance with the terms of the conservation 
53.2 	restriction or easement.

53.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

53.4 	Sec. 28. Minnesota Statutes 2006, section 273.121, is amended to read:
53.5 	273.121 VALUATION OF REAL PROPERTY, NOTICE.
53.6 	Any county assessor or city assessor having the powers of a county assessor, valuing 
53.7 	or classifying taxable real property shall in each year notify those persons whose property 
53.8 	is to be included on the assessment roll that year if the person's address is known to the 
53.9 	assessor, otherwise the occupant of the property. The notice shall be in writing and shall be 
53.10 	sent by ordinary mail at least ten days before the meeting of the local board of appeal and 
53.11 	equalization under section 274.01 or the review process established under section 274.13, 
53.12 	subdivision 1c. Upon written request by the owner of the property, the assessor may send 
53.13 	the notice in electronic form or by electronic mail instead of on paper or by ordinary mail. 
53.14 	It shall contain: (1) the market value for the current and prior assessment, (2) the limited 
53.15 	market value under section 273.11, subdivision 1a, for the current and prior assessment, 
53.16 	(3) the qualifying amount of any improvements under section 273.11, subdivision 16, 
53.17 	for the current assessment, (4) the market value subject to taxation after subtracting the 
53.18 	amount of any qualifying improvements for the current assessment, (5) the classification 
53.19 	of the property for the current and prior assessment, (6) a note that if the property is 
53.20 	homestead and at least 45 years old, improvements made to the property may be eligible 
53.21 	for a valuation exclusion under section 273.11, subdivision 16, (7) the assessor's office 
53.22 	address, and (8) the dates, places, and times set for the meetings of the local board of 
53.23 	appeal and equalization, the review process established under section 274.13, subdivision 
53.24 	1c, and the county board of appeal and equalization. The commissioner of revenue shall 
53.25 	specify the form of the notice. The assessor shall attach to the assessment roll a statement 
53.26 	that the notices required by this section have been mailed. Any assessor who is not 
53.27 	provided sufficient funds from the assessor's governing body to provide such notices, 
53.28 	may make application to the commissioner of revenue to finance such notices. The 
53.29 	commissioner of revenue shall conduct an investigation and, if satisfied that the assessor 
53.30 	does not have the necessary funds, issue a certification to the commissioner of finance 
53.31 	of the amount necessary to provide such notices. The commissioner of finance shall 
53.32 	issue a warrant for such amount and shall deduct such amount from any state payment 
53.33 	to such county or municipality. The necessary funds to make such payments are hereby 
53.34 	appropriated. Failure to receive the notice shall in no way affect the validity of the 
54.1 	assessment, the resulting tax, the procedures of any board of review or equalization, or 
54.2 	the enforcement of delinquent taxes by statutory means. 

54.3 	EFFECTIVE DATE. This section is effective for notices required in 2007 and 
54.4 	thereafter.

54.5 	Sec. 29. Minnesota Statutes 2006, section 273.123, subdivision 2, is amended to read:
54.6 		Subd. 2.Reassessment of homestead property. The county assessor shall reassess 
54.7 	all homestead property located within a disaster or emergency area which is physically 
54.8 	damaged by the disaster or emergency and shall adjust the valuation for taxes payable the 
54.9 	following year to reflect the loss in market value caused by the damage as follows: Subtract 
54.10 	the market value of the property as reassessed from the market value of the property as 
54.11 	assessed under section 273.01 for January 1 of the year in which the disaster or emergency 
54.12 	occurred; multiply the remainder by a fraction, the numerator of which is the number of 
54.13 	full months remaining in the year on the date the disaster or emergency occurred, and the 
54.14 	denominator of which is 12; subtract the product of the calculation from the market value 
54.15 	of the property as assessed for January 1 of the year in which the disaster or emergency 
54.16 	occurred; the remainder is the estimated market value to be used for taxes payable the 
54.17 	following year. The assessor shall report to the county auditor the net tax capacity based 
54.18 	on the assessment of January 1 offor the year in which the disaster or emergency occurred 
54.19 	and the net tax capacity based on the reassessment made pursuant to this subdivision.

54.20 	EFFECTIVE DATE. This section is effective the day following final enactment.

54.21 	Sec. 30. Minnesota Statutes 2006, section 273.123, subdivision 3, is amended to read:
54.22 		Subd. 3.Computation of local tax rates. When computing Local tax rates,must 
54.23 	be computed by the county auditor shall usebased upon the valuation as of January 2 as 
54.24 	reported by the assessor for the assessment made on January 1 of the year in which the 
54.25 	disaster or emergency occurred, and as returned by the local, county, and state boards of 
54.26 	review and equalization and the commissioner of revenue.

54.27 	EFFECTIVE DATE. This section is effective the day following final enactment.

54.28 	Sec. 31. Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:
54.29 		Subd. 13.Homestead application. (a) A person who meets the homestead 
54.30 	requirements under subdivision 1 must file a homestead application with the county 
54.31 	assessor to initially obtain homestead classification.
55.1 	(b) On or before January 2, 1993, each county assessor shall mail a homestead 
55.2 	application to the owner of each parcel of property within the county which was 
55.3 	classified as homestead for the 1992 assessment year. The format and contents of a 
55.4 	uniform homestead application shall be prescribed by the commissioner of revenue. The 
55.5 	commissioner shall consult with the chairs of the house and senate tax committees on the 
55.6 	contents of the homestead application form. The application must clearly inform the 
55.7 	taxpayer that this application must be signed by all owners who occupy the property or 
55.8 	by the qualifying relative and returned to the county assessor in order for the property 
55.9 	to continue receiving homestead treatment. The envelope containing the homestead 
55.10 	application shall clearly identify its contents and alert the taxpayer of its necessary 
55.11 	immediate response.
55.12 	(c) Every property owner applying for homestead classification must furnish to the 
55.13 	county assessor the Social Security number of each occupant who is listed as an owner 
55.14 	of the property on the deed of record, the name and address of each owner who does not 
55.15 	occupy the property, and the name and Social Security number of each owner's spouse who 
55.16 	occupies the property. The application must be signed by each owner who occupies the 
55.17 	property and by each owner's spouse who occupies the property, or, in the case of property 
55.18 	that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
55.19 	If a property owner occupies a homestead, the property owner's spouse may not 
55.20 	claim another property as a homestead unless the property owner and the property owner's 
55.21 	spouse file with the assessor an affidavit or other proof required by the assessor stating that 
55.22 	the property qualifies as a homestead under subdivision 1, paragraph (e).
55.23 	Owners or spouses occupying residences owned by their spouses and previously 
55.24 	occupied with the other spouse, either of whom fail to include the other spouse's name 
55.25 	and Social Security number on the homestead application or provide the affidavits or 
55.26 	other proof requested, will be deemed to have elected to receive only partial homestead 
55.27 	treatment of their residence. The remainder of the residence will be classified as 
55.28 	nonhomestead residential. When an owner or spouse's name and Social Security number 
55.29 	appear on homestead applications for two separate residences and only one application is 
55.30 	signed, the owner or spouse will be deemed to have elected to homestead the residence for 
55.31 	which the application was signed.
55.32 	The Social Security numbers or affidavits or other proofs of the property owners 
55.33 	and spouses are private data on individuals as defined by section 13.02, subdivision 12, 
55.34 	but, notwithstanding that section, the private data may be disclosed to the commissioner 
55.35 	of revenue, or, for purposes of proceeding under the Revenue Recapture Act to recover 
55.36 	personal property taxes owing, to the county treasurer.
56.1 	(d)(c) If residential real estate is occupied and used for purposes of a homestead by 
56.2 	a relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 
56.3 	order for the property to receive homestead status, a homestead application must be filed 
56.4 	with the assessor. The Social Security number of each relative and spouse of a relative
56.5 	occupying the property and the Social Security number of each owner who is related to an 
56.6 	occupant of the property shall be required on the homestead application filed under this 
56.7 	subdivision. If a different relative of the owner subsequently occupies the property, the 
56.8 	owner of the property must notify the assessor within 30 days of the change in occupancy. 
56.9 	The Social Security number of a relative or relative's spouse occupying the property 
56.10 	is private data on individuals as defined by section 13.02, subdivision 12, but may be 
56.11 	disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 
56.12 	Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
56.13 	(e)(d) The homestead application shall also notify the property owners that the 
56.14 	application filed under this section will not be mailed annually and that if the property 
56.15 	is granted homestead status for the 1993 assessment, or any assessment year thereafter, 
56.16 	that same property shall remain classified as homestead until the property is sold or 
56.17 	transferred to another person, or the owners, the spouse of the owner, or the relatives no 
56.18 	longer use the property as their homestead. Upon the sale or transfer of the homestead 
56.19 	property, a certificate of value must be timely filed with the county auditor as provided 
56.20 	under section 272.115. Failure to notify the assessor within 30 days that the property has 
56.21 	been sold, transferred, or that the owner, the spouse of the owner, or the relative is no 
56.22 	longer occupying the property as a homestead, shall result in the penalty provided under 
56.23 	this subdivision and the property will lose its current homestead status.
56.24 	(f)(e) If the homestead application is not returned within 30 days, the county 
56.25 	will send a second application to the present owners of record. The notice of proposed 
56.26 	property taxes prepared under section 275.065, subdivision 3, shall reflect the property's 
56.27 	classification. Beginning with assessment year 1993 for all properties, If a homestead 
56.28 	application has not been filed with the county by December 15, the assessor shall classify 
56.29 	the property as nonhomestead for the current assessment year for taxes payable in 
56.30 	the following year, provided that the owner may be entitled to receive the homestead 
56.31 	classification by proper application under section 375.192.
56.32 	(g)(f) At the request of the commissioner, each county must give the commissioner 
56.33 	a list that includes the name and Social Security number of each occupant of homestead 
56.34 	property who is the property owner and the, property owner's spouse occupying the 
56.35 	property, or, qualifying relative of a property owner, applying for homestead classification 
56.36 	under this subdivision or a spouse of a qualifying relative. The commissioner shall use the 
57.1 	information provided on the lists as appropriate under the law, including for the detection 
57.2 	of improper claims by owners, or relatives of owners, under chapter 290A.
57.3 	(h)(g) If the commissioner finds that a property owner may be claiming a 
57.4 	fraudulent homestead, the commissioner shall notify the appropriate counties. Within 
57.5 	90 days of the notification, the county assessor shall investigate to determine if the 
57.6 	homestead classification was properly claimed. If the property owner does not qualify, 
57.7 	the county assessor shall notify the county auditor who will determine the amount of 
57.8 	homestead benefits that had been improperly allowed. For the purpose of this section, 
57.9 	"homestead benefits" means the tax reduction resulting from the classification as a 
57.10 	homestead under section 273.13, the taconite homestead credit under section 273.135, the 
57.11 	residential homestead and agricultural homestead credits under section 273.1384, and the 
57.12 	supplemental homestead credit under section 273.1391.
57.13 	The county auditor shall send a notice to the person who owned the affected property 
57.14 	at the time the homestead application related to the improper homestead was filed, 
57.15 	demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 
57.16 	of the homestead benefits. The person notified may appeal the county's determination 
57.17 	by serving copies of a petition for review with county officials as provided in section 
57.18 	278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 
57.19 	Court within 60 days of the date of the notice from the county. Procedurally, the appeal 
57.20 	is governed by the provisions in chapter 271 which apply to the appeal of a property tax 
57.21 	assessment or levy, but without requiring any prepayment of the amount in controversy. If 
57.22 	the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 
57.23 	has been filed, the county auditor shall certify the amount of taxes and penalty to the county 
57.24 	treasurer. The county treasurer will add interest to the unpaid homestead benefits and 
57.25 	penalty amounts at the rate provided in section 279.03 for real property taxes becoming 
57.26 	delinquent in the calendar year during which the amount remains unpaid. Interest may be 
57.27 	assessed for the period beginning 60 days after demand for payment was made.
57.28 	If the person notified is the current owner of the property, the treasurer may add the 
57.29 	total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 
57.30 	otherwise payable on the property by including the amounts on the property tax statements 
57.31 	under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 
57.32 	valorem taxes shall include interest accrued through December 31 of the year preceding 
57.33 	the taxes payable year for which the amounts are first added. These amounts, when added 
57.34 	to the property tax statement, become subject to all the laws for the enforcement of real or 
57.35 	personal property taxes for that year, and for any subsequent year.
58.1 	If the person notified is not the current owner of the property, the treasurer may 
58.2 	collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 
58.3 	the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 
58.4 	of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 
58.5 	tax obligations of the person who owned the property at the time the application related 
58.6 	to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 
58.7 	of personal liability for the homestead benefits, penalty, interest, and costs, and instead 
58.8 	extend those amounts on the tax lists against the property as provided in this paragraph 
58.9 	to the extent that the current owner agrees in writing. On all demands, billings, property 
58.10 	tax statements, and related correspondence, the county must list and state separately the 
58.11 	amounts of homestead benefits, penalty, interest and costs being demanded, billed or 
58.12 	assessed.
58.13 	(i)(h) Any amount of homestead benefits recovered by the county from the property 
58.14 	owner shall be distributed to the county, city or town, and school district where the 
58.15 	property is located in the same proportion that each taxing district's levy was to the total 
58.16 	of the three taxing districts' levy for the current year. Any amount recovered attributable 
58.17 	to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 
58.18 	deposited in the taconite property tax relief account. Any amount recovered that is 
58.19 	attributable to supplemental homestead credit is to be transmitted to the commissioner of 
58.20 	revenue for deposit in the general fund of the state treasury. The total amount of penalty 
58.21 	collected must be deposited in the county general fund.
58.22 	(j)(i) If a property owner has applied for more than one homestead and the county 
58.23 	assessors cannot determine which property should be classified as homestead, the county 
58.24 	assessors will refer the information to the commissioner. The commissioner shall make 
58.25 	the determination and notify the counties within 60 days.
58.26 	(k)(j) In addition to lists of homestead properties, the commissioner may ask the 
58.27 	counties to furnish lists of all properties and the record owners. The Social Security 
58.28 	numbers and federal identification numbers that are maintained by a county or city 
58.29 	assessor for property tax administration purposes, and that may appear on the lists retain 
58.30 	their classification as private or nonpublic data; but may be viewed, accessed, and used by 
58.31 	the county auditor or treasurer of the same county for the limited purpose of assisting the 
58.32 	commissioner in the preparation of microdata samples under section 270C.12.
58.33 	(l)(k) On or before April 30 each year beginning in 2007, each county must provide 
58.34 	the commissioner with the following data for each parcel of homestead property by 
58.35 	electronic means as defined in section 289A.02, subdivision 8:
59.1 	(i) the property identification number assigned to the parcel for purposes of taxes 
59.2 	payable in the current year;
59.3 	(ii) the name and Social Security number of each occupant of homestead property 
59.4 	who is the property owner and, property owner's spouse, as shown on the tax rolls for the 
59.5 	current and the prior assessment year qualifying relative of a property owner, or spouse 
59.6 	of a qualifying relative;
59.7 	(iii) the classification of the property under section 273.13 for taxes payable in the 
59.8 	current year and in the prior year;
59.9 	(iv) an indication of whether the property was classified as a homestead for taxes 
59.10 	payable in the current year or for taxes payable in the prior year because of occupancy by 
59.11 	a relative of the owner or by a spouse of a relative;
59.12 	(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
59.13 	current year and the prior year;
59.14 	(vi) the market value of improvements to the property first assessed for tax purposes 
59.15 	for taxes payable in the current year;
59.16 	(vii) the assessor's estimated market value assigned to the property for taxes payable 
59.17 	in the current year and the prior year;
59.18 	(viii) the taxable market value assigned to the property for taxes payable in the 
59.19 	current year and the prior year;
59.20 	(ix) whether there are delinquent property taxes owing on the homestead;
59.21 	(x) the unique taxing district in which the property is located; and
59.22 	(xi) such other information as the commissioner decides is necessary.
59.23 	The commissioner shall use the information provided on the lists as appropriate 
59.24 	under the law, including for the detection of improper claims by owners, or relatives 
59.25 	of owners, under chapter 290A.

59.26 	EFFECTIVE DATE. This section is effective the day following final enactment.

59.27 	Sec. 32. Minnesota Statutes 2006, section 273.124, subdivision 21, is amended to read:
59.28 		Subd. 21.Trust property; homestead. Real property held by a trustee under a trust 
59.29 	is eligible for classification as homestead property if:
59.30 	(1) the grantor or surviving spouse of the grantor of the trust occupies and uses the 
59.31 	property as a homestead;
59.32 	(2) a relative or surviving relative of the grantor who meets the requirements of 
59.33 	subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1, 
59.34 	paragraph (d), in the case of agricultural property, occupies and uses the property as 
59.35 	a homestead;
60.1 	(3) a family farm corporation, joint farm venture, limited liability company, or 
60.2 	partnership operating a family farm rents the property held by a trustee under a trust, and 
60.3 	the grantor, the spouse or surviving spouse of the grantor, or the sonchild or daughter
60.4 	grandchild of the grantor, who is also a shareholder, member, or partner of the corporation, 
60.5 	joint farm venture, limited liability company, or partnership occupies and uses the property 
60.6 	as a homestead, or is actively farming the property on behalf of the corporation, joint farm 
60.7 	venture, limited liability company, or partnership; or
60.8 	(4) a person who has received homestead classification for property taxes payable in 
60.9 	2000 on the basis of an unqualified legal right under the terms of the trust agreement to 
60.10 	occupy the property as that person's homestead and who continues to use the property as 
60.11 	a homestead or a person who received the homestead classification for taxes payable in 
60.12 	2005 under clause (3) who does not qualify under clause (3) for taxes payable in 2006 
60.13 	or thereafter but who continues to qualify under clause (3) as it existed for taxes payable 
60.14 	in 2005.
60.15 	For purposes of this subdivision, "grantor" is defined as the person creating or 
60.16 	establishing a testamentary, inter Vivos, revocable or irrevocable trust by written 
60.17 	instrument or through the exercise of a power of appointment.

60.18 	EFFECTIVE DATE. This section is effective the day following final enactment. 

60.19 	Sec. 33. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:
60.20 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) 
60.21 	and (c), real estate which is residential and used for homestead purposes is class 1a. In the 
60.22 	case of a duplex or triplex in which one of the units is used for homestead purposes, the 
60.23 	entire property is deemed to be used for homestead purposes. The market value of class 1a 
60.24 	property must be determined based upon the value of the house, garage, and land.
60.25 	The first $500,000 of market value of class 1a property has a net class rate of 
60.26 	one percent of its market value; and the market value of class 1a property that exceeds 
60.27 	$500,000 has a class rate of 1.25 percent of its market value.
60.28 	(b) Class 1b property includes homestead real estate or homestead manufactured 
60.29 	homes used for the purposes of a homestead by
60.30 	(1) any person who is blind as defined in section 256D.35, or the blind person and 
60.31 	the blind person's spouse; or
60.32 	(2) any person, hereinafter referred to as "veteran," who:
60.33 	(i) served in the active military or naval service of the United States; and
60.34 	(ii) is entitled to compensation under the laws and regulations of the United States 
60.35 	for permanent and total service-connected disability due to the loss, or loss of use, by 
61.1 	reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both 
61.2 	lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or 
61.3 	a wheelchair; and
61.4 	(iii) has acquired a special housing unit with special fixtures or movable facilities 
61.5 	made necessary by the nature of the veteran's disability, or the surviving spouse of the 
61.6 	deceased veteran for as long as the surviving spouse retains the special housing unit 
61.7 	as a homestead; or
61.8 	(3) any person who is permanently and totally disabled.
61.9 	Property is classified and assessed under clause (3) only if the government agency or 
61.10 	income-providing source certifies, upon the request of the homestead occupant, that the 
61.11 	homestead occupant satisfies the disability requirements of this paragraph.
61.12 	Property is classified and assessed pursuant to clause (1) only if the commissioner of 
61.13 	revenue certifies to the assessor that the homestead occupant satisfies the requirements 
61.14 	of this paragraph or the county assessor has approved the occupant's declaration under 
61.15 	section 273.1315.
61.16 	Permanently and totally disabled for the purpose of this subdivision means a 
61.17 	condition which is permanent in nature and totally incapacitates the person from working 
61.18 	at an occupation which brings the person an income. The first $32,000 market value of 
61.19 	class 1b property has a net class rate of .45 percent of its market value. The remaining 
61.20 	market value of class 1b property has a class rate using the rates for class 1a or class 2a 
61.21 	property, whichever is appropriate, of similar market value.
61.22 	(c) Class 1c property is commercial use real property that abuts a lakeshore line and 
61.23 	is devoted to temporary and seasonal residential occupancy for recreational purposes but 
61.24 	not devoted to commercial purposes for more than 250 days in the year preceding the 
61.25 	year of assessment, and that includes a portion used as a homestead by the owner, which 
61.26 	includes a dwelling occupied as a homestead by a shareholder of a corporation that owns 
61.27 	the resort, a partner in a partnership that owns the resort, or a member of a limited liability 
61.28 	company that owns the resort even if the title to the homestead is held by the corporation, 
61.29 	partnership, or limited liability company. For purposes of this clause, property is devoted 
61.30 	to a commercial purpose on a specific day if any portion of the property, excluding the 
61.31 	portion used exclusively as a homestead, is used for residential occupancy and a fee is 
61.32 	charged for residential occupancy. The portion of the property used as a homestead is class 
61.33 	1a property under paragraph (a). The remainder of the property is classified as follows: 
61.34 	the first $500,000 of market value is tier I, the next $1,700,000 of market value is tier II, 
61.35 	and any remaining market value is tier III. The class rates for class 1c are: tier I, 0.55 
61.36 	percent; tier II, 1.0 percent; and tier III, 1.25 percent. If a class 1c resort property has any 
62.1 	market value in tier III, the entire property must meet the requirements of subdivision 25, 
62.2 	paragraph (d), clause (1), to qualify for class 1c treatment under this paragraph.
62.3 	(d) Class 1d property includes structures that meet all of the following criteria:
62.4 	(1) the structure is located on property that is classified as agricultural property under 
62.5 	section 273.13, subdivision 23;
62.6 	(2) the structure is occupied exclusively by seasonal farm workers during the time 
62.7 	when they work on that farm, and the occupants are not charged rent for the privilege of 
62.8 	occupying the property, provided that use of the structure for storage of farm equipment 
62.9 	and produce does not disqualify the property from classification under this paragraph;
62.10 	(3) the structure meets all applicable health and safety requirements for the 
62.11 	appropriate season; and
62.12 	(4) the structure is not salable as residential property because it does not comply 
62.13 	with local ordinances relating to location in relation to streets or roads.
62.14 	The market value of class 1d property has the same class rates as class 1a property 
62.15 	under paragraph (a).

62.16 	EFFECTIVE DATE. This section is effective for taxes payable in 2009 and 
62.17 	thereafter.

62.18 	Sec. 34. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:
62.19 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more 
62.20 	units and used or held for use by the owner or by the tenants or lessees of the owner 
62.21 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
62.22 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
62.23 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
62.24 	purposes, without regard to whether the property has been platted or subdivided. The 
62.25 	market value of class 4a property has a class rate of 1.25 percent.
62.26 	(b) Class 4b includes:
62.27 	(1) residential real estate containing less than four units that does not qualify as class 
62.28 	4bb, other than seasonal residential recreational property;
62.29 	(2) manufactured homes not classified under any other provision;
62.30 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
62.31 	farm classified under subdivision 23, paragraph (b) containing two or three units; and
62.32 	(4) unimproved property that is classified residential as determined under subdivision 
62.33 	33.
62.34 	The market value of class 4b property has a class rate of 1.25 percent.
62.35 	(c) Class 4bb includes:
63.1 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
63.2 	residential recreational property; and
63.3 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
63.4 	nonhomestead farm classified under subdivision 23, paragraph (b).
63.5 	Class 4bb property has the same class rates as class 1a property under subdivision 22.
63.6 	Property that has been classified as seasonal residential recreational property at 
63.7 	any time during which it has been owned by the current owner or spouse of the current 
63.8 	owner does not qualify for class 4bb.
63.9 	(d) Class 4c property includes:
63.10 	(1) except as provided in subdivision 22, paragraph (c), real property devoted to 
63.11 	temporary and seasonal residential occupancy for recreation purposes, including real 
63.12 	property devoted to temporary and seasonal residential occupancy for recreation purposes 
63.13 	and not devoted to commercial purposes for more than 250 days in the year preceding 
63.14 	the year of assessment. For purposes of this clause, property is devoted to a commercial 
63.15 	purpose on a specific day if any portion of the property is used for residential occupancy, 
63.16 	and a fee is charged for residential occupancy. In order for a property to be classified as 
63.17 	class 4c, seasonal residential recreational for commercial purposes, at least 40 percent of 
63.18 	the annual gross lodging receipts related to the property must be from business conducted 
63.19 	during 90 consecutive days and either (i) at least 60 percent of all paid bookings by lodging 
63.20 	guests during the year must be for periods of at least two consecutive nights; or (ii) at least 
63.21 	20 percent of the annual gross receipts must be from charges for rental of fish houses, 
63.22 	boats and motors, snowmobiles, downhill or cross-country ski equipment, or charges for 
63.23 	marina services, launch services, and guide services, or the sale of bait and fishing tackle. 
63.24 	For purposes of this determination, a paid booking of five or more nights shall be counted 
63.25 	as two bookings. Class 4c also includes commercial use real property used exclusively 
63.26 	for recreational purposes in conjunction with class 4c property devoted to temporary 
63.27 	and seasonal residential occupancy for recreational purposes, up to a total of two acres, 
63.28 	provided the property is not devoted to commercial recreational use for more than 250 
63.29 	days in the year preceding the year of assessment and is located within two miles of the 
63.30 	class 4c property with which it is used. Owners of real property devoted to temporary and 
63.31 	seasonal residential occupancy for recreation purposes and all or a portion of which was 
63.32 	devoted to commercial purposes for not more than 250 days in the year preceding the year 
63.33 	of assessment desiring classification as class 1c or 4c, must submit a declaration to the 
63.34 	assessor designating the cabins or units occupied for 250 days or less in the year preceding 
63.35 	the year of assessment by January 15 of the assessment year. Those cabins or units and a 
63.36 	proportionate share of the land on which they are located will be designated class 1c or 4c 
64.1 	as otherwise provided. The remainder of the cabins or units and a proportionate share of 
64.2 	the land on which they are located will be designated as class 3a. The owner of property 
64.3 	desiring designation as class 1c or 4c property must provide guest registers or other 
64.4 	records demonstrating that the units for which class 1c or 4c designation is sought were 
64.5 	not occupied for more than 250 days in the year preceding the assessment if so requested. 
64.6 	The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
64.7 	nonresidential facility operated on a commercial basis not directly related to temporary and 
64.8 	seasonal residential occupancy for recreation purposes shall not qualify for class 1c or 4c;
64.9 	(2) qualified property used as a golf course if:
64.10 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
64.11 	dues, but a membership fee may not be required in order to use the property for golfing, 
64.12 	and its green fees for golfing must be comparable to green fees typically charged by 
64.13 	municipal courses; and
64.14 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
64.15 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
64.16 	with the golf course is classified as class 3a property;
64.17 	(3) real property up to a maximum of one acre of land owned by a nonprofit 
64.18 	community service oriented organization; provided that the property is not used for a 
64.19 	revenue-producing activity for more than six days in the calendar year preceding the year 
64.20 	of assessment and the property is not used for residential purposes on either a temporary 
64.21 	or permanent basis. For purposes of this clause, a "nonprofit community service oriented 
64.22 	organization" means any corporation, society, association, foundation, or institution 
64.23 	organized and operated exclusively for charitable, religious, fraternal, civic, or educational 
64.24 	purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3), 
64.25 	(10), or (19) of the Internal Revenue Code of 1986, as amended through December 31, 
64.26 	1990. For purposes of this clause, "revenue-producing activities" shall include but not be 
64.27 	limited to property or that portion of the property that is used as an on-sale intoxicating 
64.28 	liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant 
64.29 	open to the public, bowling alley, a retail store, gambling conducted by organizations 
64.30 	licensed under chapter 349, an insurance business, or office or other space leased or 
64.31 	rented to a lessee who conducts a for-profit enterprise on the premises. Any portion of 
64.32 	the property which is used for revenue-producing activities for more than six days in the 
64.33 	calendar year preceding the year of assessment shall be assessed as class 3a. The use of 
64.34 	the property for social events open exclusively to members and their guests for periods of 
64.35 	less than 24 hours, when an admission is not charged nor any revenues are received by the 
64.36 	organization shall not be considered a revenue-producing activity;
65.1 	(4) postsecondary student housing of not more than one acre of land that is owned by 
65.2 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
65.3 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
65.4 	miles of the border of a college campus;
65.5 	(5) manufactured home parks as defined in section 327.14, subdivision 3;
65.6 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
65.7 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
65.8 	and is located within the metropolitan area as defined in section 473.121, subdivision 2;
65.9 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
65.10 	under section 272.01, subdivision 2, and the land on which it is located, provided that:
65.11 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
65.12 	Airports Commission, or group thereof; and
65.13 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
65.14 	leased premise, prohibits commercial activity performed at the hangar.
65.15 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
65.16 	be filed by the new owner with the assessor of the county where the property is located 
65.17 	within 60 days of the sale;
65.18 	(8)(7) a privately owned noncommercial aircraft storage hangar not exempt under 
65.19 	section 272.01, subdivision 2, and the land on which it is located, provided that:
65.20 	(i) the land abuts a public airport; and
65.21 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
65.22 	agreement restricting the use of the premises, prohibiting commercial use or activity 
65.23 	performed at the hangar; and
65.24 	(9)(8) residential real estate, a portion of which is used by the owner for homestead 
65.25 	purposes, and that is also a place of lodging, if all of the following criteria are met:
65.26 	(i) rooms are provided for rent to transient guests that generally stay for periods 
65.27 	of 14 or fewer days;
65.28 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
65.29 	in the basic room rate;
65.30 	(iii) meals are not provided to the general public except for special events on fewer 
65.31 	than seven days in the calendar year preceding the year of the assessment; and
65.32 	(iv) the owner is the operator of the property.
65.33 	The market value subject to the 4c classification under this clause is limited to five rental 
65.34 	units. Any rental units on the property in excess of five, must be valued and assessed as 
65.35 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
65.36 	be classified as class 1a property under subdivision 22.
66.1 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
66.2 	parcel of seasonal residential recreational property not used for commercial purposes has 
66.3 	the same class rates as class 4bb property, (ii) manufactured home parks assessed under 
66.4 	clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 
66.5 	residential recreational property has a class rate of one percent for the first $500,000 of 
66.6 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
66.7 	property described in clause (4) has a class rate of one percent, (v) the market value 
66.8 	of property described in clausesclause (2) and (6) has a class rate of 1.25 percent, and 
66.9 	(vi) that portion of the market value of property in clause (9)(8) qualifying for class 4c 
66.10 	property has a class rate of 1.25 percent.
66.11 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
66.12 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
66.13 	of the units in the building qualify as low-income rental housing units as certified under 
66.14 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
66.15 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
66.16 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
66.17 	land as the qualifying low-income rental housing units are to the total units in the building. 
66.18 	For all properties qualifying as class 4d, the market value determined by the assessor must 
66.19 	be based on the normal approach to value using normal unrestricted rents.
66.20 	Class 4d property has a class rate of 0.75 percent.

66.21 	EFFECTIVE DATE. This section is effective for taxes payable in 2008 and 
66.22 	thereafter.

66.23 	Sec. 35. Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read:
66.24 		Subd. 4.Disparity reduction credit. (a) Beginning with taxes payable in 1989, 
66.25 	class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1) 
66.26 	the property is located in a border city that has an enterprise zone designated pursuant 
66.27 	to section 469.168, subdivision 4; (2) the property is located in a city with a population 
66.28 	greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the 
66.29 	city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city 
66.30 	in another state; and (4) the adjacent city in the other state has a population of greater than 
66.31 	5,000 and less than 75,000 according to the 1980 decennial census. 
66.32 	(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 
66.33 	property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class 
66.34 	3b property to 2.3 percent of market value.
67.1 	(c) The county auditor shall annually certify the costs of the credits to the 
67.2 	Department of Revenue. The department shall reimburse local governments for the 
67.3 	property taxes foregone as the result of the credits in proportion to their total levies.

67.4 	EFFECTIVE DATE. This section is effective retroactively for taxes payable in 
67.5 	2001 and thereafter.

67.6 	Sec. 36. Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read:
67.7 		Subd. 2.Listing and assessment by commissioner. The personal property, 
67.8 	consisting of the pipeline system of mains, pipes, and equipment attached thereto, of 
67.9 	pipeline companies and others engaged in the operations or business of transporting 
67.10 	natural gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed 
67.11 	with and assessed by the commissioner of revenue and the values provided to the city 
67.12 	or county assessor by order. This subdivision shall not apply to the assessment of 
67.13 	the products transported through the pipelines nor to the lines of local commercial gas 
67.14 	companies engaged primarily in the business of distributing gas to consumers at retail nor 
67.15 	to pipelines used by the owner thereof to supply natural gas or other petroleum products 
67.16 	exclusively for such owner's own consumption and not for resale to others. If more than 
67.17 	85 percent of the natural gas or other petroleum products actually transported over the 
67.18 	pipeline is used for the owner's own consumption and not for resale to others, then this 
67.19 	subdivision shall not apply; provided, however, that in that event, the pipeline shall be 
67.20 	assessed in proportion to the percentage of gas actually transported over such pipeline that 
67.21 	is not used for the owner's own consumption. On or before June 30, the commissioner 
67.22 	shall certify to the auditor of each county, the amount of such personal property assessment 
67.23 	against each company in each district in which such property is located.

67.24 	EFFECTIVE DATE. This section is effective the day following final enactment.

67.25 	Sec. 37. Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read:
67.26 		Subd. 2.Listing and assessment by commissioner. Transmission lines of less 
67.27 	than 69 kv, transmission lines of 69 kv and above located in an unorganized township, 
67.28 	and distribution lines, and equipment attached thereto, having a fixed situs outside the 
67.29 	corporate limits of cities except distribution lines taxed as provided in sections 273.40
67.30 	and 273.41, shall be listed with and assessed by the commissioner of revenue in the 
67.31 	county where situated and the values provided to the city or county assessor by order. 
67.32 	The commissioner shall assess such property at the percentage of market value fixed by 
67.33 	law; and, on or before June 30, shall certify to the auditor of each county in which such 
68.1 	property is located the amount of the assessment made against each company and person 
68.2 	owning such property. 

68.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

68.4 	Sec. 38. Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read:
68.5 		Subdivision 1.Report required. Every electric light, power, gas, water, express, 
68.6 	stage, and transportation company and pipeline doing business in Minnesota shall 
68.7 	annually file with the commissioner on or before March 31 a report under oath setting 
68.8 	forth the information prescribed by the commissioner to enable the commissioner to make 
68.9 	valuations, recommended valuations, and equalization required under sections 273.33, 
68.10 	273.35, 273.36, and273.37, and 273.3711. If all the required information is not available 
68.11 	on March 31, the company or pipeline shall file the information that is available on or 
68.12 	before March 31, and the balance of the information as soon as it becomes available. 

68.13 	EFFECTIVE DATE. This section is effective the day following final enactment.

68.14 	Sec. 39. [273.3711] RECOMMENDED AND ORDERED VALUES.
68.15 	For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372, 
68.16 	all values not required to be listed and assessed by the commissioner of revenue are 
68.17 	recommended values.

68.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

68.19 	Sec. 40. Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read:
68.20 		Subdivision 1.Ordinary board; meetings, deadlines, grievances. (a) The town 
68.21 	board of a town, or the council or other governing body of a city, is the board of appeal 
68.22 	and equalization except (1) in cities whose charters provide for a board of equalization or 
68.23 	(2) in any city or town that has transferred its local board of review power and duties to 
68.24 	the county board as provided in subdivision 3. The county assessor shall fix a day and 
68.25 	time when the board or the board of equalization shall meet in the assessment districts 
68.26 	of the county. Notwithstanding any law or city charter to the contrary, a city board of 
68.27 	equalization shall be referred to as a board of appeal and equalization. On or before 
68.28 	February 15 of each year the assessor shall give written notice of the time to the city or 
68.29 	town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings 
68.30 	must be held between April 1 and May 31 each year. The clerk shall give published and 
68.31 	posted notice of the meeting at least ten days before the date of the meeting.
69.1 	The board shall meet at the office of the clerk to review the assessment and 
69.2 	classification of property in the town or city. No changes in valuation or classification 
69.3 	which are intended to correct errors in judgment by the county assessor may be made by 
69.4 	the county assessor after the board has adjourned in those cities or towns that hold a 
69.5 	local board of review; however, corrections of errors that are merely clerical in nature or 
69.6 	changes that extend homestead treatment to property are permitted after adjournment until 
69.7 	the tax extension date for that assessment year. The changes must be fully documented and 
69.8 	maintained in the assessor's office and must be available for review by any person. A copy 
69.9 	of the changes made during this period in those cities or towns that hold a local board of 
69.10 	review must be sent to the county board no later than December 31 of the assessment year.
69.11 	(b) The board shall determine whether the taxable property in the town or city has 
69.12 	been properly placed on the list and properly valued by the assessor. If real or personal 
69.13 	property has been omitted, the board shall place it on the list with its market value, and 
69.14 	correct the assessment so that each tract or lot of real property, and each article, parcel, 
69.15 	or class of personal property, is entered on the assessment list at its market value. No 
69.16 	assessment of the property of any person may be raised unless the person has been 
69.17 	duly notified of the intent of the board to do so. On application of any person feeling 
69.18 	aggrieved, the board shall review the assessment or classification, or both, and correct 
69.19 	it as appears just. The board may not make an individual market value adjustment or 
69.20 	classification change that would benefit the property if the owner or other person having 
69.21 	control over the property has refused the assessor access to inspect the property and the 
69.22 	interior of any buildings or structures as provided in section 273.20. A board member 
69.23 	shall not participate in any actions of the board which result in market value adjustments 
69.24 	or classification changes to property owned by the board member, the spouse, parent, 
69.25 	stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, 
69.26 	or niece of a board member, or property in which a board member has a financial interest. 
69.27 	The relationship may be by blood or marriage.
69.28 	(c) A local board may reduce assessments upon petition of the taxpayer but the total 
69.29 	reductions must not reduce the aggregate assessment made by the county assessor by more 
69.30 	than one percent. If the total reductions would lower the aggregate assessments made by 
69.31 	the county assessor by more than one percent, none of the adjustments may be made. The 
69.32 	assessor shall correct any clerical errors or double assessments discovered by the board 
69.33 	without regard to the one percent limitation.
69.34 	(d) A local board does not have authority to grant an exemption or to order property 
69.35 	removed from the tax rolls.
70.1 	(e) A majority of the members may act at the meeting, and adjourn from day to day 
70.2 	until they finish hearing the cases presented. The assessor shall attend, with the assessment 
70.3 	books and papers, and take part in the proceedings, but must not vote. The county assessor, 
70.4 	or an assistant delegated by the county assessor shall attend the meetings. The board shall 
70.5 	list separately, on a form appended to the assessment book, all omitted property added 
70.6 	to the list by the board and all items of property increased or decreased, with the market 
70.7 	value of each item of property, added or changed by the board, placed opposite the item. 
70.8 	The county assessor shall enter all changes made by the board in the assessment book.
70.9 	(f) Except as provided in subdivision 3, if a person fails to appear in person, by 
70.10 	counsel, or by written communication before the board after being duly notified of the 
70.11 	board's intent to raise the assessment of the property, or if a person feeling aggrieved by an 
70.12 	assessment or classification fails to apply for a review of the assessment or classification, 
70.13 	the person may not appear before the county board of appeal and equalization for a review 
70.14 	of the assessment or classification. This paragraph does not apply if an assessment was 
70.15 	made after the local board meeting, as provided in section 273.01, or if the person can 
70.16 	establish not having received notice of market value at least five days before the local 
70.17 	board meeting.
70.18 	(g) The local board must complete its work and adjourn within 20 days from the 
70.19 	time of convening stated in the notice of the clerk, unless a longer period is approved by 
70.20 	the commissioner of revenue. No action taken after that date is valid. All complaints 
70.21 	about an assessment or classification made after the meeting of the board must be heard 
70.22 	and determined by the county board of equalization. A nonresident may, at any time, 
70.23 	before the meeting of the board file written objections to an assessment or classification 
70.24 	with the county assessor. The objections must be presented to the board at its meeting by 
70.25 	the county assessor for its consideration.

70.26 	EFFECTIVE DATE. This section is effective the day following final enactment.

70.27 	Sec. 41. Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read:
70.28 		Subdivision 1.Members; meetings; rules for equalizing assessments. The county 
70.29 	commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be 
70.30 	present, the deputy county auditor, or, if there is no deputy, the court administrator of the 
70.31 	district court, shall form a board for the equalization of the assessment of the property 
70.32 	of the county, including the property of all cities whose charters provide for a board of 
70.33 	equalization. This board shall be referred to as the county board of appeal and equalization. 
70.34 	The board shall meet annually, on the date specified in section 274.14, at the office of the 
70.35 	auditor. Each member shall take an oath to fairly and impartially perform duties as a 
71.1 	member. Members shall not participate in any actions of the board which result in market 
71.2 	value adjustments or classification changes to property owned by the board member, the 
71.3 	spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, 
71.4 	aunt, nephew, or niece of a board member, or property in which a board member has a 
71.5 	financial interest. The relationship may be by blood or marriage. The board shall examine 
71.6 	and compare the returns of the assessment of property of the towns or districts, and 
71.7 	equalize them so that each tract or lot of real property and each article or class of personal 
71.8 	property is entered on the assessment list at its market value, subject to the following rules: 
71.9 	(1) The board shall raise the valuation of each tract or lot of real property which 
71.10 	in its opinion is returned below its market value to the sum believed to be its market 
71.11 	value. The board must first give notice of intention to raise the valuation to the person in 
71.12 	whose name it is assessed, if the person is a resident of the county. The notice must fix 
71.13 	a time and place for a hearing.
71.14 	(2) The board shall reduce the valuation of each tract or lot which in its opinion is 
71.15 	returned above its market value to the sum believed to be its market value.
71.16 	(3) The board shall raise the valuation of each class of personal property which 
71.17 	in its opinion is returned below its market value to the sum believed to be its market 
71.18 	value. It shall raise the aggregate value of the personal property of individuals, firms, or 
71.19 	corporations, when it believes that the aggregate valuation, as returned, is less than the 
71.20 	market value of the taxable personal property possessed by the individuals, firms, or 
71.21 	corporations, to the sum it believes to be the market value. The board must first give notice 
71.22 	to the persons of intention to do so. The notice must set a time and place for a hearing.
71.23 	(4) The board shall reduce the valuation of each class of personal property that 
71.24 	is returned above its market value to the sum it believes to be its market value. Upon 
71.25 	complaint of a party aggrieved, the board shall reduce the aggregate valuation of the 
71.26 	individual's personal property, or of any class of personal property for which the individual 
71.27 	is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes 
71.28 	was the market value of the individual's personal property of that class.
71.29 	(5) The board must not reduce the aggregate value of all the property of its county, as 
71.30 	submitted to the county board of equalization, with the additions made by the auditor under 
71.31 	this chapter, by more than one percent of its whole valuation. The board may raise the 
71.32 	aggregate valuation of real property, and of each class of personal property, of the county, 
71.33 	or of any town or district of the county, when it believes it is below the market value of the 
71.34 	property, or class of property, to the aggregate amount it believes to be its market value.
71.35 	(6) The board shall change the classification of any property which in its opinion 
71.36 	is not properly classified.
72.1 	(7) The board does not have the authority to grant an exemption or to order property 
72.2 	removed from the tax rolls.

72.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

72.4 	Sec. 42. [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION 
72.5 	COURSE AND MEETING REQUIREMENTS.
72.6 		Subdivision 1.Handbook for county boards. By no later than January 1, 2009, the 
72.7 	commissioner of revenue must develop a handbook detailing procedures, responsibilities, 
72.8 	and requirements for county boards of appeal and equalization. The handbook must 
72.9 	include, but need not be limited to, the role of the county board in the assessment process, 
72.10 	the legal and policy reasons for fair and impartial appeal and equalization hearings, county 
72.11 	board meeting procedures that foster fair and impartial assessment reviews and other best 
72.12 	practices recommendations, quorum requirements for county boards, and explanations 
72.13 	of alternate methods of appeal.
72.14 		Subd. 2.Appeals and equalization course. Beginning in 2009, and each year 
72.15 	thereafter, there must be at least one member at each meeting of a county board of appeal 
72.16 	and equalization who has attended an appeals and equalization course developed or 
72.17 	approved by the commissioner within the last four years, as certified by the commissioner. 
72.18 	The course may be offered in conjunction with a meeting of the Minnesota Association 
72.19 	of Assessment Officers. The course content must include, but need not be limited to, a 
72.20 	review of the handbook developed by the commissioner under subdivision 1.
72.21 		Subd. 3.Proof of compliance; transfer of duties. (a) Any county that 
72.22 	conducts county boards of appeal and equalization meetings must provide proof to the 
72.23 	commissioner by December 1, 2009, and each year thereafter, that it is in compliance 
72.24 	with the requirements of subdivision 2. Beginning in 2009, this notice must also verify 
72.25 	that there was a quorum of voting members at each meeting of the board of appeal and 
72.26 	equalization in the current year. A county that does not comply with these requirements 
72.27 	is deemed to have transferred its board of appeal and equalization powers to the special 
72.28 	board of equalization appointed pursuant to section 274.13, subdivision 2, beginning 
72.29 	with the following year's assessment and continuing unless the powers are reinstated 
72.30 	under paragraph (c). A county that does not comply with the requirements of subdivision 
72.31 	2 and has not appointed a special board of equalization shall appoint a special board of 
72.32 	equalization before the following year's assessment.
72.33 	(b) The county shall notify the taxpayers when the board of appeal and equalization 
72.34 	for a county has been transferred to the special board of equalization under this subdivision 
72.35 	and, prior to the meeting time of the special board of equalization, the county shall make 
73.1 	available to those taxpayers a procedure for a review of the assessments, including, but 
73.2 	not limited to, open book meetings. This alternate review process must take place in 
73.3 	April and May.
73.4 	(c) A county board whose powers are transferred to the special board of equalization 
73.5 	under this subdivision may be reinstated by resolution of the county board and upon proof 
73.6 	of compliance with the requirements of subdivision 2. The resolution and proofs must be 
73.7 	provided to the commissioner by December 1 in order to be effective for the following 
73.8 	year's assessment.

73.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

73.10 	Sec. 43. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:
73.11 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare 
73.12 	and the county treasurer shall deliver after November 10 and on or before November 24 
73.13 	each year, by first class mail to each taxpayer at the address listed on the county's current 
73.14 	year's assessment roll, a notice of proposed property taxes. Upon written request by 
73.15 	the taxpayer, the treasurer may send the notice in electronic form or by electronic mail 
73.16 	instead of on paper or by ordinary mail.
73.17 	(b) The commissioner of revenue shall prescribe the form of the notice.
73.18 	(c) The notice must inform taxpayers that it contains the amount of property taxes 
73.19 	each taxing authority proposes to collect for taxes payable the following year. In the case 
73.20 	of a town, or in the case of the state general tax, the final tax amount will be its proposed 
73.21 	tax. In the case of taxing authorities required to hold a public meeting under subdivision 6, 
73.22 	the notice must clearly state that each taxing authority, including regional library districts 
73.23 	established under section 134.201, and including the metropolitan taxing districts as 
73.24 	defined in paragraph (i), but excluding all other special taxing districts and towns, will 
73.25 	hold a public meeting to receive public testimony on the proposed budget and proposed or 
73.26 	final property tax levy, or, in case of a school district, on the current budget and proposed 
73.27 	property tax levy. It must clearly state the time and place of each taxing authority's 
73.28 	meeting, a telephone number for the taxing authority that taxpayers may call if they have 
73.29 	questions related to the notice, and an address where comments will be received by mail.
73.30 	(d) The notice must state for each parcel:
73.31 	(1) the market value of the property as determined under section 273.11, and used 
73.32 	for computing property taxes payable in the following year and for taxes payable in the 
73.33 	current year as each appears in the records of the county assessor on November 1 of the 
73.34 	current year; and, in the case of residential property, whether the property is classified as 
74.1 	homestead or nonhomestead. The notice must clearly inform taxpayers of the years to 
74.2 	which the market values apply and that the values are final values;
74.3 	(2) the items listed below, shown separately by county, city or town, and state general 
74.4 	tax, net of the residential and agricultural homestead credit under section 273.1384, voter 
74.5 	approved school levy, other local school levy, and the sum of the special taxing districts, 
74.6 	and as a total of all taxing authorities:
74.7 	(i) the actual tax for taxes payable in the current year; and
74.8 	(ii) the proposed tax amount.
74.9 	If the county levy under clause (2) includes an amount for a lake improvement 
74.10 	district as defined under sections 103B.501 to 103B.581, the amount attributable for that 
74.11 	purpose must be separately stated from the remaining county levy amount.
74.12 	In the case of a town or the state general tax, the final tax shall also be its proposed 
74.13 	tax unless the town changes its levy at a special town meeting under section 365.52. If a 
74.14 	school district has certified under section 126C.17, subdivision 9, that a referendum will 
74.15 	be held in the school district at the November general election, the county auditor must 
74.16 	note next to the school district's proposed amount that a referendum is pending and that, 
74.17 	if approved by the voters, the tax amount may be higher than shown on the notice. In 
74.18 	the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the 
74.19 	levy for Minneapolis Park and Recreation shall be listed separately from the remaining 
74.20 	amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul 
74.21 	Library Agency must be listed separately from the remaining amount of the city's levy. 
74.22 	In the case of Ramsey County, any amount levied under section 134.07 may be listed 
74.23 	separately from the remaining amount of the county's levy. In the case of a parcel where 
74.24 	tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies, 
74.25 	the proposed tax levy on the captured value or the proposed tax levy on the tax capacity 
74.26 	subject to the areawide tax must each be stated separately and not included in the sum of 
74.27 	the special taxing districts; and
74.28 	(3) the increase or decrease between the total taxes payable in the current year and 
74.29 	the total proposed taxes, expressed as a percentage.
74.30 	For purposes of this section, the amount of the tax on homesteads qualifying under 
74.31 	the senior citizens' property tax deferral program under chapter 290B is the total amount 
74.32 	of property tax before subtraction of the deferred property tax amount.
74.33 	(e) The notice must clearly state that the proposed or final taxes do not include 
74.34 	the following:
74.35 	(1) special assessments;
75.1 	(2) levies approved by the voters after the date the proposed taxes are certified, 
75.2 	including bond referenda and school district levy referenda;
75.3 	(3) a levy limit increase approved by the voters by the first Tuesday after the first 
75.4 	Monday in November of the levy year as provided under section 275.73;
75.5 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster 
75.6 	occurring after the date the proposed taxes are certified;
75.7 	(5) amounts necessary to pay tort judgments against the taxing authority that become 
75.8 	final after the date the proposed taxes are certified; and
75.9 	(6) the contamination tax imposed on properties which received market value 
75.10 	reductions for contamination.
75.11 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or 
75.12 	the county treasurer to deliver the notice as required in this section does not invalidate the 
75.13 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
75.14 	(g) If the notice the taxpayer receives under this section lists the property as 
75.15 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
75.16 	applicable deadline, and the property qualifies for the homestead classification in that 
75.17 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
75.18 	in the following year.
75.19 	(h) In the case of class 4 residential property used as a residence for lease or rental 
75.20 	periods of 30 days or more, the taxpayer must either:
75.21 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 
75.22 	renter, or lessee; or
75.23 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
75.24 	The notice must be mailed or posted by the taxpayer by November 27 or within 
75.25 	three days of receipt of the notice, whichever is later. A taxpayer may notify the county 
75.26 	treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to 
75.27 	which the notice must be mailed in order to fulfill the requirements of this paragraph.
75.28 	(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special 
75.29 	taxing districts" means the following taxing districts in the seven-county metropolitan area 
75.30 	that levy a property tax for any of the specified purposes listed below:
75.31 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 
75.32 	473.446, 473.521, 473.547, or 473.834;
75.33 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 
75.34 	and
75.35 	(3) Metropolitan Mosquito Control Commission under section 473.711.
76.1 	For purposes of this section, any levies made by the regional rail authorities in the 
76.2 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
76.3 	398A shall be included with the appropriate county's levy and shall be discussed at that 
76.4 	county's public hearing.
76.5 	(j) The governing body of a county, city, or school district may, with the consent 
76.6 	of the county board, include supplemental information with the statement of proposed 
76.7 	property taxes about the impact of state aid increases or decreases on property tax 
76.8 	increases or decreases and on the level of services provided in the affected jurisdiction. 
76.9 	This supplemental information may include information for the following year, the current 
76.10 	year, and for as many consecutive preceding years as deemed appropriate by the governing 
76.11 	body of the county, city, or school district. It may include only information regarding:
76.12 	(1) the impact of inflation as measured by the implicit price deflator for state and 
76.13 	local government purchases;
76.14 	(2) population growth and decline;
76.15 	(3) state or federal government action; and
76.16 	(4) other financial factors that affect the level of property taxation and local services 
76.17 	that the governing body of the county, city, or school district may deem appropriate to 
76.18 	include.
76.19 	The information may be presented using tables, written narrative, and graphic 
76.20 	representations and may contain instruction toward further sources of information or 
76.21 	opportunity for comment.

76.22 	EFFECTIVE DATE. This section is effective for notices required in 2007 and 
76.23 	thereafter, for taxes payable in 2008 and thereafter.

76.24 	Sec. 44. Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read:
76.25 		Subd. 5a.Public advertisement. (a) A city that has a population of more than 
76.26 	2,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph 
76.27 	(i), a regional library district established under section   134.201, or school district shall 
76.28 	advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or, 
76.29 	in the case of a school district, to review its current budget and proposed property taxes 
76.30 	payable in the following year, at a public hearing, if a public hearing is required under 
76.31 	subdivision 6. The notice must be published not less than two business days nor more 
76.32 	than six business days before the hearing. 
76.33 	The advertisement must be at least one-eighth page in size of a standard-size or a 
76.34 	tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper 
76.35 	where legal notices and classified advertisements appear. The advertisement must be 
77.1 	published in an official newspaper of general circulation in the taxing authority. The 
77.2 	newspaper selected must be one of general interest and readership in the community, and 
77.3 	not one of limited subject matter. The advertisement must appear in a newspaper that is 
77.4 	published at least once per week.
77.5 	For purposes of this section, the metropolitan special taxing district's advertisement 
77.6 	must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer 
77.7 	Press.
77.8 	In addition to other requirements, a county and a city having a population of 
77.9 	more than 2,500 must show in the public advertisement required under this subdivision 
77.10 	the current local tax rate, the proposed local tax rate if no property tax levy increase 
77.11 	is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this 
77.12 	subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by 
77.13 	the city's or county's taxable net tax capacity.
77.14 	(b) Subject to the provisions of paragraph (g), the advertisement for school districts, 
77.15 	metropolitan special taxing districts, and regional library districts must be in the following 
77.16 	form, except that the notice for a school district may include references to the current 
77.17 	budget in regard to proposed property taxes.
77.18 	"NOTICE OF
77.19 	PROPOSED PROPERTY TAXES
77.20 	(School District/Metropolitan
77.21 	Special Taxing District/Regional
77.22 	Library District) of .........
77.23 	The governing body of ........ will soon hold budget hearings and vote on the property 
77.24 	taxes for (metropolitan special taxing district/regional library district services that will be 
77.25 	provided in (year)/school district services that will be provided in (year) and (year)).
77.26 	NOTICE OF PUBLIC HEARING:
77.27 	All concerned citizens are invited to attend a public hearing and express their opinions 
77.28 	on the proposed (school district/metropolitan special taxing district/regional library 
77.29 	district) budget and property taxes, or in the case of a school district, its current budget 
77.30 	and proposed property taxes, payable in the following year. The hearing will be held on 
77.31 	(Month/Day/Year) at (Time) at (Location, Address)."
77.32 	(c) Subject to the provisions of paragraph (g), the advertisement for cities and 
77.33 	counties must be in the following form.
77.34 	"NOTICE OF PROPOSED
77.35 	TOTAL BUDGET AND PROPERTY TAXES
78.1 	The (city/county) governing body or board of commissioners will hold a public hearing to 
78.2 	discuss the budget and to vote on the amount of property taxes to collect for services the 
78.3 	(city/county) will provide in (year).
78.4 	SPENDING: The total budget amounts below compare (city's/county's) (year) total actual 
78.5 	budget with the amount the (city/county) proposes to spend in (year).

78.6
78.7	(Year) Total Actual 
Budget
		Proposed (Year) 
Budget
		Change from 
(Year)-(Year)

78.8	$...........
		$...........
		.....%
	
78.9 	TAXES: The property tax amounts below compare that portion of the current budget 
78.10 	levied in property taxes in (city/county) for (year) with the property taxes the (city/county) 
78.11 	proposes to collect in (year).

78.12
78.13	(Year) Property 
Taxes
		Proposed (Year) 
Property Taxes
		Change from 
(Year)-(Year)

78.14	$...........
		$...........
		.....%
	
78.15 	LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax 
78.16 	levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.

78.17
78.18	(Year) Tax Rate
		(Year) Tax Rate if NO 
Levy Increase
		(Year) Proposed 
Tax Rate
	
78.19	...........
		...........
		.....
	
78.20 	ATTEND THE PUBLIC HEARING
78.21 	All (city/county) residents are invited to attend the public hearing of the (city/county) to 
78.22 	express your opinions on the budget and the proposed amount of (year) property taxes. 
78.23 	The hearing will be held on:
78.24 	(Month/Day/Year/Time)
78.25 	(Location/Address)
78.26 	If the discussion of the budget cannot be completed, a time and place for continuing the 
78.27 	discussion will be announced at the hearing. You are also invited to send your written 
78.28 	comments to:
78.29 	(City/County)
78.30 	(Location/Address)"
78.31 	(d) For purposes of this subdivision, the budget amounts listed on the advertisement 
78.32 	mean:
78.33 	(1) for cities, the total government fund expenditures, as defined by the state auditor 
78.34 	under section   471.6965, less any expenditures for improvements or services that are 
79.1 	specially assessed or charged under chapter 429, 430, 435, or the provisions of any other 
79.2 	law or charter; and 
79.3 	(2) for counties, the total government fund expenditures, as defined by the state 
79.4 	auditor under section   375.169, less any expenditures for direct payments to recipients or 
79.5 	providers for the human service aids listed below: 
79.6 	(i) Minnesota family investment program under chapters 256J and 256K;
79.7 	(ii) medical assistance under sections   256B.041, subdivision 5, and   256B.19, 
79.8 	subdivision 1; 
79.9 	(iii) general assistance medical care under section   256D.03, subdivision 6; 
79.10 	(iv) general assistance under section   256D.03, subdivision 2; 
79.11 	(v) emergency assistance under section   256J.48; 
79.12 	(vi) Minnesota supplemental aid under section   256D.36, subdivision 1; 
79.13 	(vii) preadmission screening under section   256B.0911, and alternative care grants 
79.14 	under section   256B.0913; 
79.15 	(viii) general assistance medical care claims processing, medical transportation and 
79.16 	related costs under section   256D.03, subdivision 4; 
79.17 	(ix) medical transportation and related costs under section   256B.0625, subdivisions 
79.18 	17 to 18a; 
79.19 	(x) group residential housing under section   256I.05, subdivision 8, transferred from 
79.20 	programs in clauses (iv) and (vi); or 
79.21 	(xi) any successor programs to those listed in clauses (i) to (x).
79.22 	(e) A city with a population of over 500 but not more than 2,500 that is required to 
79.23 	hold a public hearing under subdivision 6 must advertise by posted notice as defined in 
79.24 	section   645.12, subdivision 1. The advertisement must be posted at the time provided in 
79.25 	paragraph (a). It must be in the form required in paragraph (b). 
79.26 	(f) For purposes of this subdivision, the population of a city is the most recent 
79.27 	population as determined by the state demographer under section   4A.02. 
79.28 	(g) The commissioner of revenue, subject to the approval of the chairs of the house 
79.29 	and senate tax committees, shall annually prescribe the specific form and format of the 
79.30 	advertisements required under this subdivision, including such details as font size and 
79.31 	style, and spacing for the required items. The commissioner may prescribe alternate and 
79.32 	additional language for the advertisement for a taxing authority or for groups of taxing 
79.33 	authorities. At least two weeks before November 29 each year, the commissioner shall 
79.34 	provide a copy of the prescribed advertisements to the chairs of the committees of the 
79.35 	house of representatives and the senate with jurisdiction over taxes.

80.1 	EFFECTIVE DATE. This section is effective for advertisements in 2007 and 
80.2 	thereafter, for proposed taxes payable in 2008 and thereafter.

80.3 	Sec. 45. Minnesota Statutes 2006, section 275.067, is amended to read:
80.4 	275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE; 
80.5 	CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS.
80.6 	Special taxing districts as defined in section 275.066 organized on or before July 1 in 
80.7 	athe current calendar year may, and special taxing districts organized in a prior year that 
80.8 	have not previously certified a levy to the county auditor, are allowed to certify a levy to 
80.9 	the county auditor in that samethe current year for property taxes or special assessments 
80.10 	to be payable in the following calendar year to the extent that the special taxing district is 
80.11 	authorized by statute or special act to levy taxes or special assessments, but only if the 
80.12 	county auditor receives written notice from the district on or before July 1 of the current 
80.13 	year that the district may be certifying a levy in the current year, and the notice includes a 
80.14 	complete list or other description of the tax parcels in the district and a map showing the 
80.15 	boundaries of the district. Special taxing districts organized after July 1 in a calendar year 
80.16 	may not certify a levy of property taxes or special assessments to the county auditor under 
80.17 	the powers granted to them by statute or special act and subject to the requirements of 
80.18 	this section until the following calendar year. All special taxing districts must notify the 
80.19 	county auditor by July 1 in order for its boundaries for the levy to be certified that year 
80.20 	to be different than its boundaries for levies certified in prior years, and the notice must 
80.21 	include a complete list or other description of the tax parcels within the new boundaries 
80.22 	and a map showing the new boundaries of the district.

80.23 	EFFECTIVE DATE. This section is effective for taxes payable in 2008 and 
80.24 	thereafter.

80.25 	Sec. 46. Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision 
80.26 	to read:
80.27 		Subd. 5.Electronic tax statements. Upon written request by the owner of real 
80.28 	property located in the county, or by the owner's agent, a county may send tax statements 
80.29 	by electronic means instead of by mailing. For the purposes of the payment deadlines 
80.30 	specified in section 279.01, the postmark date on the envelope containing these property 
80.31 	tax statements is the date the statements were sent by electronic means.

80.32 	EFFECTIVE DATE. This section is effective for tax statements for taxes payable 
80.33 	in 2008 and thereafter.

81.1 	Sec. 47. Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read:
81.2 		Subd. 2.Partial payments. The county treasurer may accept payments of more or 
81.3 	less than the exact amount of a tax installment due. Payments must be applied first to the 
81.4 	oldest installment that is due but which has not been fully paid. If the accepted payment is 
81.5 	less than the amount due, payments must bethe payment is applied first to the penalty 
81.6 	accrued for the year the payment is made or the installment being paid. Acceptance of 
81.7 	partial payment of tax does not constitute a waiver of the minimum payment required as a 
81.8 	condition for filing an appeal under section 278.03 or any other law, nor does it affect the 
81.9 	order of payment of delinquent taxes under section 280.39. 

81.10 	EFFECTIVE DATE. This section is effective for payments made on or after the 
81.11 	day following final enactment.

81.12 	Sec. 48. Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read:
81.13 		Subdivision 1.Due dates; penalties. Except as provided in subdivision 3 or 4, on 
81.14 	May 16 or 21 days after the postmark date on the envelope containing the property tax 
81.15 	statement, whichever is later, a penalty shall accrueaccrues and thereafter beis charged 
81.16 	upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer. 
81.17 	The penalty shall beis at a rate of two percent on homestead property until May 31 and 
81.18 	four percent on June 1. The penalty on nonhomestead property shall beis at a rate of four 
81.19 	percent until May 31 and eight percent on June 1. This penalty shalldoes not accrue until 
81.20 	June 1 of each year, or 21 days after the postmark date on the envelope containing the 
81.21 	property tax statements, whichever is later, on commercial use real property used for 
81.22 	seasonal residential recreational purposes and classified as class 1c or 4c, and on other 
81.23 	commercial use real property classified as class 3a, provided that over 60 percent of the 
81.24 	gross income earned by the enterprise on the class 3a property is earned during the months 
81.25 	of May, June, July, and August. Any property owner of such class 3a property who pays
81.26 	In order for the first half of the tax due on theclass 3a property to be paid after May 15 
81.27 	and before June 1, or 21 days after the postmark date on the envelope containing the 
81.28 	property tax statement, whichever is later, shallwithout penalty, the owner of the property 
81.29 	must attach an affidavit to the payment attesting to compliance with the income provision 
81.30 	of this subdivision. Thereafter, for both homestead and nonhomestead property, on the 
81.31 	first day of each month beginning July 1, up to and including October 1 following, an 
81.32 	additional penalty of one percent for each month shall accrueaccrues and beis charged on 
81.33 	all such unpaid taxes provided that if the due date was extended beyond May 15 as the 
81.34 	result of any delay in mailing property tax statements no additional penalty shall accrue 
81.35 	if the tax is paid by the extended due date. If the tax is not paid by the extended due 
82.1 	date, then all penalties that would have accrued if the due date had been May 15 shall be 
82.2 	charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid 
82.3 	prior to May 16 or 21 days after the postmark date on the envelope containing the property 
82.4 	tax statement, whichever is later; and, if so paid, no penalty shall attach attaches; the 
82.5 	remaining one-half shallmay be paid at any time prior to October 16 following, without 
82.6 	penalty; but, if not so paid, then a penalty of two percent shall accrueaccrues thereon for 
82.7 	homestead property and a penalty of four percent on nonhomestead property. Thereafter, 
82.8 	for homestead property, on the first day of November an additional penalty of four percent 
82.9 	shall accrueaccrues and on the first day of December following, an additional penalty of 
82.10 	two percent shall accrueaccrues and beis charged on all such unpaid taxes. Thereafter, 
82.11 	for nonhomestead property, on the first day of November and December following, an 
82.12 	additional penalty of four percent for each month shall accrueaccrues and beis charged 
82.13 	on all such unpaid taxes. If one-half of such taxes shallare not be paid prior to May 16 or 
82.14 	21 days after the postmark date on the envelope containing the property tax statement, 
82.15 	whichever is later, the same may be paid at any time prior to October 16, with accrued 
82.16 	penalties to the date of payment added, and thereupon no penalty shall attachattaches to 
82.17 	the remaining one-half until October 16 following.
82.18 	This section applies to payment of personal property taxes assessed against 
82.19 	improvements to leased property, except as provided by section 277.01, subdivision 3. 
82.20 	A county may provide by resolution that in the case of a property owner that has 
82.21 	multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in 
82.22 	installments as provided in this subdivision.
82.23 	The county treasurer may accept payments of more or less than the exact amount of 
82.24 	a tax installment due. Payments must be applied first to the oldest installment that is due 
82.25 	but which has not been fully paid. If the accepted payment is less than the amount due, 
82.26 	payments must be applied first to the penalty accrued for the year the payment is made
82.27 	or the installment being paid. Acceptance of partial payment of tax does not constitute 
82.28 	a waiver of the minimum payment required as a condition for filing an appeal under 
82.29 	section 278.03 or any other law, nor does it affect the order of payment of delinquent 
82.30 	taxes under section 280.39. 

82.31 	EFFECTIVE DATE. This section is effective for payments made on or after the 
82.32 	day following final enactment.

82.33 	Sec. 49. Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read:
82.34 		Subd. 3.Claimant. (a) "Claimant" means:
83.1 	(1) a person, as that term is defined in section 290.01, subdivision 2, who owns 
83.2 	forest land in Minnesota and files an application authorized by the Sustainable Forest 
83.3 	Incentive Act. Claimant includes;
83.4 	(2) a purchaser or grantee if property enrolled in the program was sold or transferred 
83.5 	after the original application was filed and prior to the annual incentive payment being 
83.6 	made.; or
83.7 	(3) an owner of land previously covered by an auxiliary forest contract that 
83.8 	automatically qualifies for inclusion in the Sustainable Forest Incentive Act program 
83.9 	pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
83.10 	 The purchaser or grantee must notify the commissioner in writing of the sale or 
83.11 	transfer of the property. Owners of land that qualifies for inclusion pursuant to section 
83.12 	88.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing 
83.13 	of the expiration of the auxiliary forest contract or land trade with a governmental unit and 
83.14 	submit an application to the commissioner by August 15 in order to be eligible to receive a 
83.15 	payment by October 1 of that same year. For purposes of section 290C.11, claimant also 
83.16 	includes any person bound by the covenant required in section 290C.04. 
83.17 	(b) No more than one claimant is entitled to a payment under this chapter with 
83.18 	respect to any tract, parcel, or piece of land enrolled under this chapter that has been 
83.19 	assigned the same parcel identification number. When enrolled forest land is owned by 
83.20 	two or more persons, the owners must determine between them which person  is eligible to 
83.21 	claim the payments provided under sections 290C.01 to 290C.11. In the case of property 
83.22 	sold or transferred, the former owner and the purchaser or grantee must determine between 
83.23 	them which person is eligible to claim the payments provided under sections 290C.01 to 
83.24 	290C.11. The owners, transferees, or grantees must notify the commissioner in writing 
83.25 	which person is eligible to claim the payments. 

83.26 	EFFECTIVE DATE. This section is effective the day following final enactment.

83.27 	Sec. 50. Minnesota Statutes 2006, section 290C.04, is amended to read:
83.28 	290C.04 APPLICATIONS.
83.29 	(a) A landowner may apply to enroll forest land for the sustainable forest incentive 
83.30 	program under this chapter. The claimant must complete, sign, and submit an application 
83.31 	to the commissioner by September 30 in order for the land to become eligible beginning 
83.32 	in the next year. The application shall be on a form prescribed by the commissioner and 
83.33 	must include the information the commissioner deems necessary. At a minimum, the 
83.34 	application must show the following information for the land and the claimant: (i) the 
84.1 	claimant's Social Security number or state or federal business tax registration number and 
84.2 	date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's 
84.3 	parcel identification numbers for the tax parcels that completely contain the claimant's 
84.4 	forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment 
84.5 	in the program, (vi) the approved plan writer's signature and identification number, and 
84.6 	(vii) proof, in a form specified by the commissioner, that the claimant has executed and 
84.7 	acknowledged in the manner required by law for a deed, and recorded, a covenant that the 
84.8 	land is not and shall not be developed in a manner inconsistent with the requirements and 
84.9 	conditions of this chapter. The covenant shall state in writing that the covenant is binding 
84.10 	on the claimant and the claimant's successor or assignee, and that it runs with the land 
84.11 	for a period of not less than eight years. The commissioner shall specify the form of the 
84.12 	covenant and provide copies upon request. The covenant must include a legal description 
84.13 	that encompasses all the forest land that the claimant wishes to enroll under this section or 
84.14 	the certificate of title number for that land if it is registered land.
84.15 	(b) In all cases, the commissioner shall notify the claimant within 90 days after 
84.16 	receipt of a completed application that either the land has or has not been approved for 
84.17 	enrollment. A claimant whose application is denied may appeal the denial as provided in 
84.18 	section 290C.11, paragraph (a) 290C.13. 
84.19 	(c) Within 90 days after the denial of an application, or within 90 days after the 
84.20 	final resolution of any appeal related to the denial, the commissioner shall execute and 
84.21 	acknowledge a document releasing the land from the covenant required under this chapter. 
84.22 	The document must be mailed to the claimant and is entitled to be recorded.
84.23 	(d) The Social Security numbers collected from individuals under this section are 
84.24 	private data as provided in section 13.355. The  federal business tax registration number 
84.25 	and date of birth data collected under this section are also private data on individuals or 
84.26 	nonpublic data, as defined in section 13.02, subdivisions 9 and 12, but may be shared 
84.27 	with county assessors for purposes of tax administration and with county treasurers for 
84.28 	purposes of the revenue recapture under chapter 270A. 

84.29 	EFFECTIVE DATE. This section is effective the day following final enactment.

84.30 	Sec. 51. Minnesota Statutes 2006, section 290C.05, is amended to read:
84.31 	290C.05 ANNUAL CERTIFICATION.
84.32 	On or before July 1 of each year, beginning with the year after the original claimant 
84.33 	has received an approved application, the commissioner shall send each claimant enrolled 
84.34 	under the sustainable forest incentive program a certification form. For purposes of this 
85.1 	section, the original claimant is the person that filed the first application under section 
85.2 	290C.04 to enroll the land in the program. The claimant must sign the certification, 
85.3 	attesting that the requirements and conditions for continued enrollment in the program are 
85.4 	currently being met, and must return the signed certification form to the commissioner by 
85.5 	August 15 of that same year. If the claimant does not return an annual certification form 
85.6 	by the due date, the provisions in section 290C.11 apply.

85.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

85.8 	Sec. 52. Minnesota Statutes 2006, section 290C.11, is amended to read:
85.9 	290C.11 PENALTIES FOR REMOVAL.
85.10 	(a) If the commissioner determines that land enrolled in the sustainable forest 
85.11 	incentive program is in violation of the conditions for enrollment as specified in section 
85.12 	290C.03, the commissioner shall notify the claimant of the intent to remove all enrolled 
85.13 	land from the sustainable forest incentive program. The claimant has 60 days to appeal 
85.14 	this determination under the provisions of section 290C.13. The appeal must be made 
85.15 	in writing to the commissioner, who shall, within 60 days, notify the claimant as to the 
85.16 	outcome of the appeal. Within 60 days after the commissioner denies an appeal, or within 
85.17 	120 days after the commissioner received a written appeal if the commissioner has not 
85.18 	made a determination in that time, the owner may appeal to Tax Court under chapter 271 
85.19 	as if the appeal is from an order of the commissioner.
85.20 	(b) If the commissioner determines the land is to be removed from the sustainable 
85.21 	forest incentive program, the claimant is liable for payment to the commissioner in the 
85.22 	amount equal to the payments received under this chapter for the previous four-year 
85.23 	period, plus interest. The claimant has 90 days to satisfy the payment for removal of land 
85.24 	from the sustainable forest incentive program under this section. If the penalty is not paid 
85.25 	within the 90-day period under this paragraph, the commissioner shall certify the amount 
85.26 	to the county auditor for collection as a part of the general ad valorem real property taxes 
85.27 	on the land in the following taxes payable year.

85.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

85.29 	Sec. 53. [290C.13] APPEALS.
85.30 		Subdivision 1.Claimant right to reconsideration. A claimant may obtain 
85.31 	reconsideration by the commissioner of a determination removing enrolled land from the 
85.32 	sustainable forest incentive program, a determination denying an application to enroll land 
85.33 	in the program, or a denial of part or all of an incentive payment by filing an administrative 
86.1 	appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if 
86.2 	the action taken by the commissioner is the outcome of an administrative appeal.
86.3 		Subd. 2.Appeal by claimant. A claimant who wishes to seek administrative review 
86.4 	must follow the procedures in subdivision 4.
86.5 		Subd. 3.Notice date. For purposes of this section, the term "notice date" means 
86.6 	the date of the determination removing enrolled land or the date of the notice denying an 
86.7 	application to enroll land or denying part or all of an incentive payment.
86.8 		Subd. 4.Time and content for administrative appeal. Within 60 days after the 
86.9 	notice date, the claimant must file a written appeal with the commissioner. The appeal 
86.10 	need not be in any particular form but must contain the following information:
86.11 	(1) name and address of the claimant;
86.12 	(2) if a corporation, the state of incorporation of the claimant, and the principal 
86.13 	place of business of the corporation;
86.14 	(3) the Minnesota or federal business identification number or Social Security 
86.15 	number of the claimant;
86.16 	(4) the date;
86.17 	(5) the periods involved and the amount of payment involved for each year or period;
86.18 	(6) the findings in the notice that the claimant disputes;
86.19 	(7) a summary statement that the claimant relies on for each exception; and
86.20 	(8) the claimant's signature or signature of the claimant's duly authorized agent.
86.21 		Subd. 5.Extensions. When requested in writing and within the time allowed for 
86.22 	filing an administrative appeal, the commissioner may extend the time for filing an appeal 
86.23 	for a period not more than 30 days from the expiration of the 60 days from the notice date.
86.24 		Subd. 6.Determination of appeal. On the basis of applicable law and available 
86.25 	information, the commissioner shall determine the validity, if any, in whole or in part, 
86.26 	of the appeal and notify the claimant of the decision. This notice must be in writing 
86.27 	and contain the basis for the determination.
86.28 		Subd. 7.Agreement determining issues under appeal. When it appears to be in 
86.29 	the best interests of the state, the commissioner may settle the amount of any incentive 
86.30 	payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties, 
86.31 	or interest that the commissioner has under consideration by virtue of an appeal filed 
86.32 	under this section. An agreement must be in writing and signed by the commissioner and 
86.33 	the claimant, or the claimant's representative authorized by the claimant to enter into an 
86.34 	agreement. The agreement is final and conclusive and, except upon a showing of fraud or 
86.35 	malfeasance, or misrepresentation of a material fact, the case must not be reopened as to 
86.36 	the matters agreed upon.
87.1 		Subd. 8.Appeal to Tax Court. Within 60 days after the commissioner denies 
87.2 	an appeal, or within 120 days after the commissioner received a written appeal if the 
87.3 	commissioner has not made a determination in that time, the claimant may appeal to Tax 
87.4 	Court under chapter 271 as if the appeal is from an order of the commissioner.
87.5 		Subd. 9.Exemption from Administrative Procedure Act. This section is not 
87.6 	subject to chapter 14.

87.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

87.8 	Sec. 54.  REPEALER.
 87.9 	(a) Minnesota Statutes 2006, section 270.073, is repealed.
87.10 	(b) Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52; 
87.11 	and 270.53, are repealed.
87.12 	(c) Minnesota Statutes 2006, section 279.01, subdivision 2, is repealed.

87.13 	EFFECTIVE DATE. This section is effective the day following final enactment, 
87.14 	except that paragraph (a) is effective beginning January 2, 2007, for taxes payable in 
87.15 	2008 and thereafter.

87.16 	ARTICLE 5
87.17 	MISCELLANEOUS

87.18 	Section 1. [270C.435] REFUNDS NOT SUBJECT TO ATTACHMENT OR 
87.19 	GARNISHMENT.
87.20 	No amount of a tax refund or other payment payable by the commissioner to 
87.21 	a taxpayer is assignable or subject to execution, levy, attachment, garnishment, lien 
87.22 	foreclosure, or other legal process, except as specifically provided by law.

87.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

87.24 	Sec. 2. Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read:
87.25 		Subd. 2.Required and excluded tax preparers. (a) Subject to the limitations 
87.26 	of paragraph (b), the commissioner must publish lists of tax preparers as defined in 
87.27 	section 289A.60, subdivision 13, paragraph (f), who have been convicted under section 
87.28 	289A.63  or assessed penalties in excess of $1,000 under section 289A.60, subdivision 
87.29 	13, paragraph (a).
87.30 	(b) For the purposes of this section, tax preparers are not subject to publication if:
88.1 	(1) an administrative or court action contesting the penalty has been filed or served 
88.2 	and is unresolved at the time when notice would be given under subdivision 3;
88.3 	(2) an appeal period to contest the penalty has not expired; or
88.4 	(3) the commissioner has been notified that the tax preparer is deceased.

88.5 	EFFECTIVE DATE. This section is effective for penalties on returns filed after 
88.6 	December 31, 2007.

88.7 	Sec. 3. Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read:
88.8 		Subd. 3.State reimbursement. (a) By February 15 of each year, the treasurer of 
88.9 	the relief association shall apply to the commissioner of revenueEach year, to be eligible 
88.10 	for state reimbursement of the amount of supplemental benefits paid under subdivision 2 
88.11 	during the preceding calendar year, the relief association must apply to the commissioner 
88.12 	of revenue by February 15. By March 15 the commissioner shall reimburse the relief 
88.13 	association for the amount of the supplemental benefits paid to qualified recipients. 
88.14 	(b) The commissioner of revenue shall prescribe the form of and supporting 
88.15 	information that must be supplied as part of the application for state reimbursement.
88.16 	The commissioner of revenue shall reimburse the relief association by paying the 
88.17 	reimbursement amount to the treasurer of the municipality where the association is located. 
88.18 	Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement 
88.19 	to the treasurer of the association if the association has filed a financial report with the 
88.20 	municipality. If the relief association has not filed a financial report with the municipality, 
88.21 	the municipal treasurer shall delay transmission of the reimbursement payment to the 
88.22 	association until the complete financial report is filed. If the association has dissolved or 
88.23 	has been removed as a trustee of state aid, the treasurer shall deposit the money in a 
88.24 	special account in the municipal treasury, and the money may be disbursed only for the 
88.25 	purposes and in the manner provided in section 424A.08. When paid to the association, 
88.26 	(c) the reimbursement payment must be deposited in the special fund of the relief 
88.27 	association. 
88.28 	(d)(c) A sum sufficient to make the payments is appropriated from the general fund 
88.29 	to the commissioner of revenue.

88.30 	EFFECTIVE DATE. This section is effective January 1, 2007, and thereafter.