1.1 	A bill for an act
1.2 	relating to the financing and operation of state and local government; making 
1.3 	policy, technical, administrative, enforcement, collection, refund, and other 
1.4 	changes to income, franchise, property, sales and use, motor vehicle, health 
1.5 	care provider, cigarette and tobacco products, insurance premiums, aggregate 
1.6 	removal, mortgage, deed, and production taxes, and other taxes and tax-related 
1.7 	provisions; requiring withholding; providing and modifying income tax credits; 
1.8 	modifying taxation of certain compensation paid to nonresidents; providing 
1.9 	for taxation of foreign operating corporations; modifying and authorizing sales 
1.10 	tax exemptions; modifying and authorizing local government sales taxes; 
1.11 	modifying the residential and agricultural homestead market value credit; 
1.12 	modifying certain levies, property valuation procedures, property tax classes, 
1.13 	and tax bases; changing and providing property tax exemptions; modifying the 
1.14 	state general levy and providing for deposit of revenues; providing for aids to 
1.15 	local governments; increasing property tax refunds; extending a petrofund fee 
1.16 	exemption; modifying fiscal disparities computation for city of Bloomington; 
1.17 	changing provisions relating to fiscal disparities, education financing, state debt 
1.18 	collection procedures, sustainable forest incentives programs, and distributions 
1.19 	of production tax proceeds; conforming provisions to certain changes in 
1.20 	federal laws, changing and imposing powers, duties, and requirements on 
1.21 	certain local governments and authorities and state departments or agencies; 
1.22 	providing for issuance of obligations by political subdivisions, and use of 
1.23 	the proceeds of the debt; authorizing local governments to provide certain 
1.24 	development incentives; imposing conditions on local incentive grants; limiting 
1.25 	availability of JOBZ benefits; providing rules for operation of certain tax 
1.26 	increment financing districts; providing for financing of certain postretirement 
1.27 	benefits; validating certain trusts; transferring money to the budget reserve 
1.28 	account; appropriating money; amending Minnesota Statutes 2006, sections 
1.29 	3.987, subdivision 1; 3.988, subdivision 3; 3.989, subdivisions 2, 3; 13.4965, 
1.30 	subdivision 3; 16A.103, subdivision 2; 16A.152, subdivisions 1a, 1b, 2; 16D.04, 
1.31 	subdivisions 1, 2; 16D.11, subdivisions 2, 7; 37.13, by adding a subdivision; 
1.32 	62I.06, subdivision 6; 71A.04, subdivision 1; 97A.061, subdivision 2; 118A.03, 
1.33 	subdivision 3; 123B.53, subdivision 5; 123B.61; 126C.01, subdivision 3, 
1.34 	by adding a subdivision; 127A.48, subdivision 2, by adding a subdivision; 
1.35 	163.051, subdivision 5; 168.012, subdivision 1; 270.071, subdivision 7; 270.072, 
1.36 	subdivisions 2, 3, 6; 270.074, subdivision 3; 270.076, subdivision 1; 270.41, 
1.37 	subdivisions 1, 2, 3, 5, by adding a subdivision; 270.44; 270.45; 270.46; 
1.38 	270.47; 270.48; 270.50; 270A.03, subdivisions 2, 5; 270B.01, subdivision 
1.39 	8; 270B.02, subdivision 3; 270B.085, by adding a subdivision; 270B.14, 
2.1 	subdivision 3; 270C.306; 270C.34, subdivision 1; 270C.446, subdivision 2; 
2.2 	270C.56, subdivision 1; 270C.63, subdivision 9; 272.02, subdivision 64, by 
2.3 	adding subdivisions; 272.115, subdivision 1; 273.05, by adding a subdivision; 
2.4 	273.11, subdivision 1a; 273.111, subdivisions 2, 3, 6, 14; 273.112, subdivision 3; 
2.5 	273.117; 273.121; 273.123, subdivisions 2, 3, 7; 273.124, subdivisions 11, 13, 
2.6 	14, 21, by adding a subdivision; 273.125, subdivision 8; 273.128, subdivision 
2.7 	1; 273.13, subdivisions 22, 23, 24, 25, 33; 273.1315; 273.1384, subdivisions 
2.8 	1, 2; 273.1398, subdivision 4; 273.33, subdivision 2; 273.37, subdivision 2; 
2.9 	273.371, subdivision 1; 274.01, subdivision 1; 274.13, subdivision 1; 275.025, 
2.10 	subdivisions 1, 2, 4; 275.065, subdivisions 3, 5a; 275.067; 276.04, by adding a 
2.11 	subdivision; 276A.01, subdivision 3; 276A.04; 277.01, subdivision 2; 279.01, 
2.12 	subdivision 1; 279.37, subdivision 1a; 280.39; 287.22; 287.2205; 289A.02, 
2.13 	subdivision 7; 289A.08, subdivision 11; 289A.09, subdivision 2; 289A.12, 
2.14 	subdivision 14; 289A.18, subdivision 1; 289A.20, subdivision 4; 289A.31, 
2.15 	subdivision 7; 289A.40, subdivision 2; 289A.56, by adding a subdivision; 
2.16 	289A.60, subdivisions 8, 12, 15, 25, 27, by adding subdivisions; 290.01, 
2.17 	subdivisions 6b, 19, as amended, 19a, 19b, as amended, 19c, 19d, 29, 31, as 
2.18 	amended; 290.06, subdivision 33, by adding a subdivision; 290.067, subdivision 
2.19 	2b; 290.0671, subdivision 7; 290.0677, subdivision 1; 290.091, subdivisions 2, 
2.20 	3; 290.0921, subdivision 3; 290.0922, subdivision 2; 290.10; 290.17, subdivision 
2.21 	2; 290.191, subdivisions 2, 8; 290.34, by adding a subdivision; 290.92, by adding 
2.22 	a subdivision; 290A.03, subdivisions 7, 15, as amended; 290A.04, subdivisions 
2.23 	2, 2a, 4; 290A.10; 290B.03, subdivision 2; 290C.02, subdivision 3; 290C.04; 
2.24 	290C.05; 290C.07; 290C.11; 291.005, subdivision 1; 291.215, subdivision 1; 
2.25 	295.52, subdivisions 4, 4a; 295.54, subdivision 2; 297A.61, subdivisions 3, 
2.26 	4, 7, 10, 12, 24, by adding subdivisions; 297A.63, subdivision 1; 297A.665; 
2.27 	297A.668, by adding a subdivision; 297A.669, subdivisions 3, 13, 14, by adding 
2.28 	subdivisions; 297A.67, subdivisions 8, 9, 28; 297A.68, subdivisions 5, 11, 16, 35; 
2.29 	297A.69, subdivisions 3, 4; 297A.70, subdivisions 7, 8, by adding a subdivision; 
2.30 	297A.71, by adding subdivisions; 297A.72; 297A.90, subdivision 2; 297B.035, 
2.31 	subdivision 1; 297F.09, subdivision 10; 297F.21, subdivision 3; 297G.09, 
2.32 	subdivision 9; 297I.06, subdivisions 1, 2; 297I.15, by adding a subdivision; 
2.33 	297I.20, subdivision 2; 297I.40, subdivision 5; 298.22, subdivision 7, by adding 
2.34 	a subdivision; 298.221; 298.2211, subdivision 1, by adding a subdivision; 
2.35 	298.227; 298.24, subdivision 1; 298.25; 298.28, subdivisions 4, 5, 10; 298.292, 
2.36 	subdivision 2; 298.2961, subdivisions 4, 5; 298.75, subdivisions 1, 3, 7, by 
2.37 	adding a subdivision; 331A.05, subdivision 2; 365A.02; 365A.04; 365A.08; 
2.38 	365A.095; 373.01, subdivision 3; 375B.09; 383A.80, subdivision 4; 383B.117, 
2.39 	subdivision 2; 383B.80, subdivision 4; 410.32; 412.301; 424A.10, subdivision 3; 
2.40 	453A.02, subdivision 3; 469.169, by adding a subdivision; 469.1734, subdivision 
2.41 	6; 469.312, by adding a subdivision; 473.39, by adding a subdivision; 473.446, 
2.42 	subdivisions 2, 8; 473F.08, subdivision 5, by adding a subdivision; 475.52, 
2.43 	subdivision 6; 475.58, subdivisions 1, 3b; 477A.011, subdivision 36; 477A.0124, 
2.44 	subdivisions 4, 5; 477A.013, subdivisions 1, 8, 9; 477A.03, subdivisions 2a, 2b; 
2.45 	477A.12, subdivision 1; 477A.14, subdivision 1; Laws 1980, chapter 511, section 
2.46 	1, subdivision 2, as amended; Laws 1988, chapter 645, section 3, as amended; 
2.47 	Laws 1989, chapter 211, section 8, subdivision 4, as amended; Laws 1993, 
2.48 	chapter 375, article 9, section 45, subdivisions 2, as amended, 3, as amended, 
2.49 	4, as amended; Laws 1995, chapter 264, article 5, sections 44, subdivision 4, 
2.50 	as amended; 45, subdivision 1, as amended; Laws 1996, chapter 464, article 
2.51 	1, section 8, subdivision 3; Laws 1999, chapter 243, article 4, section 18, 
2.52 	subdivisions 1, 3, 4; Laws 2002, chapter 377, article 12, section 16, subdivision 
2.53 	1; Laws 2003, chapter 128, article 1, section 172, as amended; Laws 2005, First 
2.54 	Special Session chapter 3, article 5, section 39; article 10, section 23; Laws 2006, 
2.55 	chapter 259, article 11, section 3; proposing coding for new law in Minnesota 
2.56 	Statutes, chapters 270; 270C; 273; 274; 290; 290C; 297A; 383C; 383D; 383E; 
2.57 	469; 471; repealing Minnesota Statutes 2006, sections 16A.1522; 126C.21, 
2.58 	subdivision 4; 270.073; 270.41, subdivision 4; 270.43; 270.51; 270.52; 270.53; 
3.1 	275.025, subdivision 3; 279.01, subdivisions 2, 4; 295.60; 297A.61, subdivision 
3.2 	20; 297A.668, subdivision 6; 297A.67, subdivision 22; 473.4461; Laws 1998, 
3.3 	chapter 389, article 11, section 18.
3.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.5 	ARTICLE 1
3.6 	INCOME TAX

3.7 	Section 1. Minnesota Statutes 2006, section 290.01, subdivision 19a, is amended to 
3.8 	read:
3.9 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
3.10 	trusts, there shall be added to federal taxable income:
3.11 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
3.12 	or governmental subdivision, municipality, or governmental agency or instrumentality 
3.13 	of any state other than Minnesota exempt from federal income taxes under the Internal 
3.14 	Revenue Code or any other federal statute; and
3.15 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
3.16 	Code, except the portion of the exempt-interest dividends derived from interest income 
3.17 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
3.18 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
3.19 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
3.20 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
3.21 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
3.22 	fund of the regulated investment company as defined in section 851(g) of the Internal 
3.23 	Revenue Code, making the payment; and
3.24 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
3.25 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
3.26 	interest income on obligations of the state in which the tribe is located;
3.27 	(2) the amount of income or sales and use taxes paid or accrued within the taxable 
3.28 	year under this chapter and the amount of taxes based on net income paid or sales and use 
3.29 	taxes paid to any other state or to any province or territory of Canada, to the extent allowed 
3.30 	as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not 
3.31 	be more than the amount by which the itemized deductions as allowed under section 63(d) 
3.32 	of the Internal Revenue Code exceeds the amount of the standard deduction as defined 
3.33 	in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the 
3.34 	disallowance of itemized deductions under section 68 of the Internal Revenue Code of 
3.35 	1986, income or sales and use tax is the last itemized deduction disallowed;
4.1 	(3) the capital gain amount of a lump sum distribution to which the special tax under 
4.2 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
4.3 	(4) the amount of income taxes paid or accrued within the taxable year under this 
4.4 	chapter and taxes based on net income paid to any other state or any province or territory 
4.5 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
4.6 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
4.7 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
4.8 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
4.9 	other than expenses or interest used in computing net interest income for the subtraction 
4.10 	allowed under subdivision 19b, clause (1);
4.11 	(6) the amount of a partner's pro rata share of net income which does not flow 
4.12 	through to the partner because the partnership elected to pay the tax on the income under 
4.13 	section 6242(a)(2) of the Internal Revenue Code;
4.14 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
4.15 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
4.16 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
4.17 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
4.18 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
4.19 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
4.20 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
4.21 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
4.22 	under section 168(k) is allowed;
4.23 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
4.24 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
4.25 	Revenue Code of 1986, as amended through December 31, 2003;
4.26 	(9) to the extent deducted in computing federal taxable income, the amount of the 
4.27 	deduction allowable under section 199 of the Internal Revenue Code; and
4.28 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
4.29 	federal subsidies for prescription drug plans; and
4.30 	(11) the amount of expenses disallowed under section 290.10, subdivision 2.

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

4.33 	Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19b, as amended by Laws 
4.34 	2007, chapter 1, section 2, is amended to read:
5.1 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
5.2 	and trusts, there shall be subtracted from federal taxable income:
5.3 	(1) net interest income on obligations of any authority, commission, or 
5.4 	instrumentality of the United States to the extent includable in taxable income for federal 
5.5 	income tax purposes but exempt from state income tax under the laws of the United States;
5.6 	(2) if included in federal taxable income, the amount of any overpayment of income 
5.7 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
5.8 	is received as a refund or as a credit to another taxable year's income tax liability;
5.9 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
5.10 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
5.11 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
5.12 	transportation of each qualifying child in attending an elementary or secondary school 
5.13 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
5.14 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
5.15 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
5.16 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
5.17 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
5.18 	"textbooks" includes books and other instructional materials and equipment purchased 
5.19 	or leased for use in elementary and secondary schools in teaching only those subjects 
5.20 	legally and commonly taught in public elementary and secondary schools in this state. 
5.21 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
5.22 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
5.23 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
5.24 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
5.25 	or materials for, or transportation to, extracurricular activities including sporting events, 
5.26 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
5.27 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
5.28 	given in section 32(c)(3) of the Internal Revenue Code;
5.29 	(4) income as provided under section 290.0802;
5.30 	(5) to the extent included in federal adjusted gross income, income realized on 
5.31 	disposition of property exempt from tax under section 290.491;
5.32 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
5.33 	of the Internal Revenue Code in determining federal taxable income by an individual 
5.34 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
5.35 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
6.1 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
6.2 	under the provisions of Public Law 109-1;
6.3 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
6.4 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
6.5 	which is included in gross income under section 87 of the Internal Revenue Code;
6.6 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
6.7 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
6.8 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
6.9 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
6.10 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
6.11 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
6.12 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
6.13 	the extent they exceed the federal foreign tax credit;
6.14 	(9) in each of the five tax years immediately following the tax year in which an 
6.15 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
6.16 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
6.17 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
6.18 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
6.19 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
6.20 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
6.21 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
6.22 	less than zero;
6.23 	(10) job opportunity building zone income as provided under section 469.316;
6.24 	(11) the amount of compensation paid to members of the Minnesota National Guard 
6.25 	or other reserve components of the United States military for active service performed 
6.26 	in Minnesota, excluding compensation for services performed under the Active Guard 
6.27 	Reserve (AGR) program. For purposes of this clause, "active service" means (i) state 
6.28 	active service as defined in section 190.05, subdivision 5a, clause (1); (ii) federally 
6.29 	funded state active service as defined in section 190.05, subdivision 5b; or (iii) federal 
6.30 	active service as defined in section 190.05, subdivision 5c, but "active service" excludes 
6.31 	services performed exclusively for purposes of basic combat training, advanced individual 
6.32 	training, annual training, and periodic inactive duty training; special training periodically 
6.33 	made available to reserve members; and service performed in accordance with section 
6.34 	190.08, subdivision 3;
6.35 	(12) the amount of compensation paid to Minnesota residents who are members of 
6.36 	the armed forces of the United States or United Nations for active duty performed outside 
7.1 	Minnesota under United States Code, title 10, section 101(d); United States Code, title 32, 
7.2 	section 101(12); or the authority of the United Nations;
7.3 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
7.4 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
7.5 	to another person for human organ transplantation. For purposes of this clause, "organ" 
7.6 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
7.7 	"human organ transplantation" means the medical procedure by which transfer of a human 
7.8 	organ is made from the body of one person to the body of another person; "qualified 
7.9 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
7.10 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
7.11 	may be subtracted under this clause only once; and "qualified donor" means the individual 
7.12 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
7.13 	individual may claim the subtraction in this clause for each instance of organ donation for 
7.14 	transplantation during the taxable year in which the qualified expenses occur;
7.15 	(14) in each of the five tax years immediately following the tax year in which an 
7.16 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
7.17 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
7.18 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
7.19 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
7.20 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
7.21 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
7.22 	subtraction is not allowed under this clause;
7.23 	(15) to the extent included in federal taxable income, compensation paid to a 
7.24 	nonresident who is a service member as defined in United States Code, title 10, section 
7.25 	101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 
7.26 	Law 108-189, section 101(2); and
7.27 	(16) international economic development zone income as provided under section 
7.28 	469.325; and
7.29 	(17) to the extent included in federal taxable income, the amount of national service 
7.30 	educational awards received from the National Service Trust under United States Code, 
7.31 	title 42, sections 12601 to 12604, for service in an approved AmeriCorps national service 
7.32 	program.

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

7.35 	Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
8.1 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
8.2 	there shall be added to federal taxable income:
8.3 	(1) the amount of any deduction taken for federal income tax purposes for income, 
8.4 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
8.5 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
8.6 	another state, a political subdivision of another state, the District of Columbia, or any 
8.7 	foreign country or possession of the United States;
8.8 	(2) interest not subject to federal tax upon obligations of: the United States, its 
8.9 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
8.10 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
8.11 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
8.12 	tribal governments;
8.13 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
8.14 	Revenue Code;
8.15 	(4) the amount of any net operating loss deduction taken for federal income tax 
8.16 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
8.17 	deduction under section 810 of the Internal Revenue Code;
8.18 	(5) the amount of any special deductions taken for federal income tax purposes 
8.19 	under sections 241 to 247 and 965 of the Internal Revenue Code;
8.20 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
8.21 	clause (a), that are not subject to Minnesota income tax;
8.22 	(7) the amount of any capital losses deducted for federal income tax purposes under 
8.23 	sections 1211 and 1212 of the Internal Revenue Code;
8.24 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
8.25 	921(a) and 291 of the Internal Revenue Code;
8.26 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
8.27 	291 of the Internal Revenue Code;
8.28 	(10) for certified pollution control facilities placed in service in a taxable year 
8.29 	beginning before December 31, 1986, and for which amortization deductions were elected 
8.30 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
8.31 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
8.32 	income for those facilities;
8.33 	(11) the amount of any deemed dividend from a foreign operating corporation 
8.34 	determined pursuant to section 290.17, subdivision 4, paragraph (g);
9.1 	(12) the amount of a partner's pro rata share of net income which does not flow 
9.2 	through to the partner because the partnership elected to pay the tax on the income under 
9.3 	section 6242(a)(2) of the Internal Revenue Code;
9.4 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
9.5 	Code;
9.6 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
9.7 	Revenue Code, for the taxable year when subpart F income is calculated without regard 
9.8 	to the provisions of section 103 of Public Law 109-222;
9.9 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
9.10 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
9.11 	has an activity that in the taxable year generates a deduction for depreciation under 
9.12 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
9.13 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
9.14 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
9.15 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
9.16 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
9.17 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
9.18 	under section 168(k)(1)(A) and (k)(4)(A) is allowed;
9.19 	(16) 80 percent of the amount by which the deduction allowed by section 179 of the 
9.20 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
9.21 	Revenue Code of 1986, as amended through December 31, 2003;
9.22 	(17) to the extent deducted in computing federal taxable income, the amount of the 
9.23 	deduction allowable under section 199 of the Internal Revenue Code; and
9.24 	(18) the exclusion allowed under section 139A of the Internal Revenue Code for 
9.25 	federal subsidies for prescription drug plans; and
9.26 	(19) the amount of expenses disallowed under section 290.10, subdivision 2.

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

9.29 	Sec. 4. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision 
9.30 	to read:
9.31 		Subd. 34.Investment tax credit. (a) A credit is allowed against the tax imposed by 
9.32 	this chapter for a qualified taxpayer's investment in a qualified new business venture. The 
9.33 	credit shall equal 25 percent of the taxpayer's investment made in the business, but shall 
9.34 	not exceed the lesser of:
10.1 	(1) the liability for tax under this chapter, including the applicable alternative 
10.2 	minimum tax;
10.3 	(2) $25,000 for an individual not part of a partnership; or
10.4 	(3) $300,000 for a pass-through entity.
10.5 	(b) For purposes of this subdivision, a qualified taxpayer means:
10.6 	(1) an accredited investor within the meaning of Regulation D of the Securities and 
10.7 	Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether 
10.8 	part of a pass-through entity or not; and
10.9 	(2) an accredited investor who does not own, control, or hold power to vote 20 
10.10 	percent or more of the outstanding securities of the qualified business venture in which the 
10.11 	eligible investment is proposed.
10.12 	(c) Pass-through entities and individuals may apply to the commissioner of 
10.13 	employment and economic development for certification as a qualifying pass-through 
10.14 	entity or individual. The application must be in the form and made under the procedures 
10.15 	specified by the commissioner of employment and economic development. The 
10.16 	commissioner of employment and economic development may provide certificates 
10.17 	entitling investors to tax credit under this subdivision, but must not issue a total amount of 
10.18 	certificates of more than $2,000,000. In awarding certificates under this paragraph, the 
10.19 	commissioner of employment and economic development shall award them to qualified 
10.20 	applicants in the order in which the applications are received.
10.21 	(d) Each pass-through entity must provide each investor a statement indicating the 
10.22 	investor's share of the credit amount certified to the pass-through entity under paragraph 
10.23 	(c) based on its share of the pass-through entity's assets. The credit shall not exceed 
10.24 	$25,000 for each individual part of a pass-through entity.
10.25 	(e) If the amount of the credit under this subdivision or any taxable year exceeds the 
10.26 	limitation under paragraph (a), clause (1), the excess shall be a credit carryover to each 
10.27 	of the ten succeeding years but shall not exceed $25,000 for an individual not part of a 
10.28 	partnership and $300,000 for a pass-through entity. The entire amount of the excess 
10.29 	unused credit must be carried first to the earliest of the taxable years to which the credit 
10.30 	may be carried, and then to each successive year to which the credit may be carried. The 
10.31 	amount of the unused credit that may be added under this paragraph may not exceed the 
10.32 	taxpayer's liability for tax less the credit for the taxable year.
10.33 	(f) Unless otherwise provided under the rules of the Department of Employment and 
10.34 	Economic Development, a business is a qualified business venture for purposes of this 
10.35 	subdivision only if the business satisfies all of the following conditions:
10.36 	(1) the business has its headquarters in Minnesota;
11.1 	(2) at least 51 percent of the business's employees are employed in Minnesota;
11.2 	(3) the business is engaged in, or is committed to engage in, biotechnology or 
11.3 	medical device products or services or biotechnology or medical device-related products 
11.4 	and services in manufacturing, agriculture, processing or assembling products, conducting 
11.5 	research and development, or developing a new product or business process;
11.6 	(4) the business is not engaged in real estate development, insurance, banking, 
11.7 	lending, lobbying, political consulting, wholesale or retail trade, leisure, hospitality, 
11.8 	transportation, construction, or professional services provided by attorneys, accountants, 
11.9 	business consultants, physicians, or health care consultants;
11.10 	(5) the business has less than 100 employees;
11.11 	(6) the business has not been in operation for more than ten consecutive years;
11.12 	(7) the business has not received more than $1,000,000 in investments that have 
11.13 	qualified for and received tax credits under this section;
11.14 	(8) the business has less than $1,000,000 in annual gross sales receipts;
11.15 	(9) the business is not a subsidiary or an affiliate of a business that employs more 
11.16 	than 100 employees or has gross sales receipts for the previous year of more than 
11.17 	$1,000,000, computed by aggregating all of the employees and gross sales receipts of the 
11.18 	business entities affiliated with the business; and
11.19 	(10) the business has not received private equity investments of more than 
11.20 	$2,000,000.

11.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
11.22 	December 31, 2007.

11.23 	Sec. 5. Minnesota Statutes 2006, section 290.0677, subdivision 1, is amended to read:
11.24 		Subdivision 1.Credit allowed.  (a) An individual is allowed a credit against the tax 
11.25 	due under this chapter equal to $59 for each month or portion thereof that the individual 
11.26 	was in active military service in a designated area after September 11, 2001, and before 
11.27 	January 1, 2007, while a Minnesota domiciliary. 
11.28 	(b) An individual is allowed a credit against the tax due under this chapter equal to 
11.29 	$120 for each month or portion thereof that the individual was in active military service in 
11.30 	a designated area after December 31, 2006, while a Minnesota domiciliary.
11.31 	(c) For active service performed after September 11, 2001, and before December 31, 
11.32 	2006, the individual may claim the credit in the taxable year beginning after December 31, 
11.33 	2005, and before January 1, 2007. 
11.34 	(c)(d) For active service performed after December 31, 2006, the individual may 
11.35 	claim the credit for the taxable year in which the active service was performed. 
12.1 	(d)(e) If a Minnesota domiciliary is killed while performing active military service 
12.2 	in a designated area, the individual's surviving spouse or dependent child may take the 
12.3 	credit in the taxable year of the death. If a Minnesota domiciliary was killed while 
12.4 	performing active military service in a designated area between September 11, 2001, and 
12.5 	December 31, 2006, the individual's surviving spouse or dependent child may claim this 
12.6 	credit in the taxable year beginning after December 31, 2005, and before January 1, 2007
12.7 	an individual entitled to the credit died prior to January 1, 2006, the individual's estate or 
12.8 	heirs at law, if the individual's probate estate has closed or the estate was not probated, 
12.9 	may claim the credit. 

12.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
12.11 	December 31, 2006, except that paragraph (e) is effective retroactively for tax years 
12.12 	beginning after December 31, 2005.

12.13 	Sec. 6. [290.0681] MINNESOTA HOME CARE CREDIT.
12.14 		Subdivision 1.Definitions. The terms used in this section have the following 
12.15 	meanings unless otherwise provided for by text.
12.16 		Subd. 2.Caregiver. "Caregiver" means an individual who provides unpaid 
12.17 	assistance on a daily basis that qualifies as personal care assistant services under section 
12.18 	256B.0655, subdivision 2, to a service recipient in either the individual's principal 
12.19 	residence or the service recipient's principal residence.
12.20 		Subd. 3.Service recipient. "Service recipient" means an individual who:
12.21 	(1) is the spouse, parent, stepparent, sibling, stepsibling, child, stepchild, 
12.22 	grandparent, or stepgrandparent of the taxpayer;
12.23 	(2) does not reside in a setting licensed or registered by the commissioner of health 
12.24 	or human services; and 
12.25 	(3) has been screened by a county long-term care consultation team and determined 
12.26 	by that team to be eligible for placement in a nursing home or other long-term care facility.
12.27 		Subd. 4.Credit allowed. (a) An individual is allowed a credit against the tax 
12.28 	imposed by this chapter equal to $200 for each month during the tax year that the individual 
12.29 	is a caregiver for a service recipient.  The maximum credit in a tax year shall be $1,200.
12.30 	(b) The commissioner shall require individuals claiming the credit to certify that the 
12.31 	individual and the service recipient satisfy all the requirements of this section.
12.32 	(c) Only one credit may be claimed for each service recipient in any tax year.
12.33 	(d) For a nonresident or part-year resident, the credit must be allocated based on the 
12.34 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).
13.1 		Subd. 5.Credit limitations. (a) Eligibility for the credit in subdivision 4 is limited 
13.2 	to persons with total household income, as defined in section 290A.03, subdivision 5, 
13.3 	that does not exceed the maximum household income level eligible for a refund under 
13.4 	section 290A.04, subdivision 2.
13.5 	(b) Eligibility for the credit in subdivision 4 is limited to persons who have been 
13.6 	certified by a long-term physician or physician's designee in accordance with procedures 
13.7 	established by the commissioner that the care provided by the caregiver:
13.8 	(1) qualifies as personal care assistant services under section 256B.0655, subdivision 
13.9 	2;
13.10 	(2) is needed and provided in person on a daily basis; and
13.11 	(3) is appropriate based on the service recipient's needs and is likely to delay or 
13.12 	avoid transferring the person to an out-of-home placement.
13.13 	(c) The credit in subdivision 4 is reduced to $100 for any month in which a 
13.14 	service recipient receives more than four hours per day on average of federal, state, or 
13.15 	county-funded home care services as specified in section 256B.0651, subdivision 2.
13.16 		Subd. 6.Credit refundable. If the amount of the credit under this section exceeds 
13.17 	the individual's tax liability under this chapter, the commissioner shall refund the excess 
13.18 	amount to the claimant.
13.19 		Subd. 7.Caregiver training. For each year in which a credit is claimed under this 
13.20 	section, the caregiver must participate in at least eight hours of (1) caregiver training, 
13.21 	education, or counseling, or (2) caregiver support group sessions.

13.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
13.23 	December 31, 2007.

13.24 	Sec. 7. [290.0683] CITIZENSHIP CREDIT.
13.25 		Subdivision 1.Credit. A taxpayer who is not a dependent as defined in sections 151 
13.26 	and 152 of the Internal Revenue Code is allowed a credit against the tax imposed by this 
13.27 	chapter in the amount of qualified citizenship expenses incurred for a qualified individual.
13.28 		Subd. 2.Limitations on credit.  The credit is not allowed if the sum of a taxpayer's 
13.29 	income and taxpayer's spouse's income, as defined in section 290.067, subdivision 2a, 
13.30 	exceeds 200 percent of the federal poverty level. For a taxpayer who is not a Minnesota 
13.31 	resident for the entire year, the maximum credit must be allocated using the percentage 
13.32 	calculated in section 290.06, subdivision 2c, paragraph (e).
13.33 		Subd. 3.Qualified individual. A "qualified individual" is the taxpayer, the 
13.34 	taxpayer's spouse, or an individual who qualifies as a dependent of the taxpayer under 
13.35 	sections 151 and 152 of the Internal Revenue Code. These individuals are only qualified 
14.1 	individuals from the time the individual submits an I-485 application to register permanent 
14.2 	residence or at the time the individual enters the United States on an immigrant visa, to the 
14.3 	time the individual becomes a naturalized United States citizen.
14.4 		Subd. 4.Qualified citizenship expenses. Qualified citizenship expenses include:
14.5 	(1) filing fees, including both application and biometric fingerprint fees, paid to 
14.6 	the United States Citizenship and Immigration Services in connection with an N-400 
14.7 	naturalization application for a qualified individual;
14.8 	(2) amounts paid for enrollment of a qualified individual over the age of 18 at the 
14.9 	beginning of the year in an English language class offered by a school district in Minnesota 
14.10 	or a school that has been approved as a licensed school by the state of Minnesota; and
14.11 	(3) any costs for citizenship classes.
14.12 		Subd. 5.Credit to be refundable. If the amount of credit that the taxpayer is 
14.13 	eligible to receive under this section exceeds the taxpayer's tax liability under this chapter, 
14.14 	the commissioner of revenue shall refund the excess to the taxpayer.
14.15 		Subd. 6.Appropriation. An amount sufficient to pay the refunds required by this 
14.16 	section is appropriated to the commissioner of revenue from the general fund.

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

14.19 	Sec. 8. Minnesota Statutes 2006, section 290.10, is amended to read:
14.20 	290.10 NONDEDUCTIBLE ITEMS.
14.21 		 Subdivision 1.Expenses, interest, and taxes. Except as provided in section 290.17, 
14.22 	subdivision 4, paragraph (i), in computing the net income of a taxpayer no deduction 
14.23 	shall in any case be allowed for expenses, interest and taxes connected with or allocable 
14.24 	against the production or receipt of all income not included in the measure of the tax 
14.25 	imposed by this chapter, except that for corporations engaged in the business of mining 
14.26 	or producing iron ore, the mining of which is subject to the occupation tax imposed by 
14.27 	section 298.01, subdivision 4, this shall not prevent the deduction of expenses and other 
14.28 	items to the extent that the expenses and other items are allowable under this chapter and 
14.29 	are not deductible, capitalizable, retainable in basis, or taken into account by allowance 
14.30 	or otherwise in computing the occupation tax and do not exceed the amounts taken for 
14.31 	federal income tax purposes for that year.  Occupation taxes imposed under chapter 298, 
14.32 	royalty taxes imposed under chapter 299, or depletion expenses may not be deducted 
14.33 	under this clause  subdivision.
15.1 		Subd. 2.Fines, penalties, damages, and expenses. (a) No deduction from taxable 
15.2 	income for a trade or business expense under section 162(a) of the Internal Revenue Code 
15.3 	shall be allowed for any fine, penalty, damages, or expenses paid to:
15.4 	(1) the government of the United States, a state, a territory or possession of the 
15.5 	United States, the District of Columbia, or the Commonwealth of Puerto Rico;
15.6 	(2) the government of a foreign country; or 
15.7 	(3) a political subdivision of, or corporation or other entity serving as an agency or 
15.8 	instrumentality of, any government described in clause (1) or (2).
15.9 	(b) For purposes of this subdivision, "fine, penalty, damages, or expenses" include, 
15.10 	but are not limited to, any amount:
15.11 	(1) paid pursuant to a conviction or a plea of guilty or nolo contendere for any 
15.12 	crime in a criminal proceeding;
15.13 	(2) paid as a civil penalty imposed by federal, state, or local law, including tax 
15.14 	penalties and interest;
15.15 	(3) paid in settlement of the taxpayer's actual or potential liability for a civil or 
15.16 	criminal fine or penalty;
15.17 	(4) forfeited as collateral posted in connection with a proceeding that could result in 
15.18 	imposition of a fine or penalty; or 
15.19 	(5) for legal fees and related expenses paid or incurred in the prosecution or civil 
15.20 	action arising from a violation of the law imposing the fine or civil penalty, court costs 
15.21 	assessed against the taxpayer, or stenographic and printing charges, compensatory 
15.22 	damages, punitive damages, or restitution.

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

15.25 	Sec. 9. Minnesota Statutes 2006, section 290.17, subdivision 2, is amended to read:
15.26 		Subd. 2.Income not derived from conduct of a trade or business. The income of 
15.27 	a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 
15.28 	business must be assigned in accordance with paragraphs (a) to (f):
15.29 	(a)(1) Subject to paragraphs (a)(2), and (a)(3), and (a)(4), income from wages as 
15.30 	defined in section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, 
15.31 	and to the extent that, the work of the employee is performed within it; all other income 
15.32 	from such sources is treated as income from sources without this state.
15.33 	Severance pay shall be considered income from labor or personal or professional 
15.34 	services.
16.1 	(2) In the case of an individual who is a nonresident of Minnesota and who is an 
16.2 	athlete or entertainer, income from compensation for labor or personal services performed 
16.3 	within this state shall be determined in the following manner:
16.4 	(i) The amount of income to be assigned to Minnesota for an individual who is a 
16.5 	nonresident salaried athletic team employee shall be determined by using a fraction in 
16.6 	which the denominator contains the total number of days in which the individual is under 
16.7 	a duty to perform for the employer, and the numerator is the total number of those days 
16.8 	spent in Minnesota. For purposes of this paragraph, off-season training activities, unless 
16.9 	conducted at the team's facilities as part of a team imposed program, are not included in 
16.10 	the total number of duty days. Bonuses earned as a result of play during the regular season 
16.11 	or for participation in championship, play-off, or all-star games must be allocated under 
16.12 	the formula. Signing bonuses are not subject to allocation under the formula if they are 
16.13 	not conditional on playing any games for the team, are payable separately from any other 
16.14 	compensation, and are nonrefundable; and
16.15 	(ii) The amount of income to be assigned to Minnesota for an individual who is a 
16.16 	nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's 
16.17 	athletic or entertainment performance in Minnesota shall be determined by assigning to 
16.18 	this state all income from performances or athletic contests in this state.
16.19 	(3) For purposes of this section, amounts received by a nonresident as "retirement 
16.20 	income" as defined in section (b)(1) of the State Income Taxation of Pension Income 
16.21 	Act, Public Law 104-95, are not considered income derived from carrying on a trade 
16.22 	or business or from wages or other compensation for work an employee performed in 
16.23 	Minnesota, and are not taxable under this chapter.
16.24 	(4) Wages, otherwise assigned to this state under clause (1) and not qualifying under 
16.25 	clause (3), are not taxable under this chapter if the following conditions are met:
16.26 	(i) the recipient was not a resident of this state for any part of the taxable year in 
16.27 	which the wages were received; and
16.28 	(ii) the wages are for work performed while the recipient was a resident of this state.
16.29 	(b) Income or gains from tangible property located in this state that is not employed 
16.30 	in the business of the recipient of the income or gains must be assigned to this state.
16.31 	(c) Income or gains from intangible personal property not employed in the business 
16.32 	of the recipient of the income or gains must be assigned to this state if the recipient of the 
16.33 	income or gains is a resident of this state or is a resident trust or estate.
16.34 	Gain on the sale of a partnership interest is allocable to this state in the ratio of the 
16.35 	original cost of partnership tangible property in this state to the original cost of partnership 
16.36 	tangible property everywhere, determined at the time of the sale. If more than 50 percent 
17.1 	of the value of the partnership's assets consists of intangibles, gain or loss from the sale 
17.2 	of the partnership interest is allocated to this state in accordance with the sales factor of 
17.3 	the partnership for its first full tax period immediately preceding the tax period of the 
17.4 	partnership during which the partnership interest was sold.
17.5 	Gain on the sale of goodwill or income from a covenant not to compete that is 
17.6 	connected with a business operating all or partially in Minnesota is allocated to this state 
17.7 	to the extent that the income from the business in the year preceding the year of sale was 
17.8 	assignable to Minnesota under subdivision 3.
17.9 	When an employer pays an employee for a covenant not to compete, the income 
17.10 	allocated to this state is in the ratio of the employee's service in Minnesota in the calendar 
17.11 	year preceding leaving the employment of the employer over the total services performed 
17.12 	by the employee for the employer in that year.
17.13 	(d) Income from winnings on a bet made by an individual while in Minnesota is 
17.14 	assigned to this state. In this paragraph, "bet" has the meaning given in section  609.75, 
17.15 	subdivision 2, as limited by section  609.75, subdivision 3, clauses (1), (2), and (3). 
17.16 	(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 
17.17 	taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
17.18 	(f) For the purposes of this section, working as an employee shall not be considered 
17.19 	to be conducting a trade or business.

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

17.22 	Sec. 10. Minnesota Statutes 2006, section 290.92, is amended by adding a subdivision 
17.23 	to read:
17.24 		Subd. 31.Payments to persons who are not employees. (a) For purposes of this 
17.25 	subdivision, "contractor" means a person carrying on a trade or business described in 
17.26 	industry code numbers 23 through 238990 of the North American Industry Classification 
17.27 	System. 
17.28 	(b) A contractor or a third-party bulk filer acting on behalf of a contractor, who 
17.29 	makes payments to an individual, carrying on a trade or business described above as a 
17.30 	sole proprietorship, must deduct and withhold two percent of the payment as Minnesota 
17.31 	withholding tax when the amount the contractor paid to that individual during the calendar 
17.32 	year exceeds $600.
17.33 	(c) A payment subject to withholding under this subdivision must be treated as if 
17.34 	the payment were a wage paid by an employer to an employee. The requirements in the 
17.35 	definitions of "employee" and "employer" in subdivision 1 relating to geographic location 
18.1 	apply in determining whether withholding tax applies under this subdivision, but without 
18.2 	regard to whether the contractor or the individual otherwise satisfy the definition of an 
18.3 	employer or an employee. Each recipient of a payment subject to withholding under this 
18.4 	subdivision must furnish the contractor with a statement of the recipient's name, address, 
18.5 	and Social Security account number.

18.6 	EFFECTIVE DATE. This section is effective for payments made after July 31, 
18.7 	2007.

18.8 	Sec. 11. AUDIT AND REPORT TO LEGISLATURE.
 18.9 	The commissioner must conduct a random sample audit of withholdings under 
18.10 	Minnesota Statutes, section 290.92, subdivision 31, and returns associated with those 
18.11 	withholdings. The commissioner must report on the findings of the audit to the legislature 
18.12 	no later than January 15, 2009.

18.13 	Sec. 12. TAXPAYER ASSISTANCE SERVICES; APPROPRIATION.
 18.14 	(a) $75,000 in fiscal year 2008 and $75,000 in fiscal year 2009 are appropriated from 
18.15 	the general fund to the commissioner of revenue to make grants to one or more nonprofit 
18.16 	organizations, qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, to 
18.17 	coordinate, facilitate, encourage, and aid in the provision of taxpayer assistance services.
18.18 	(b) "Taxpayer assistance services" means accounting and tax preparation services 
18.19 	provided by volunteers to low-income and disadvantaged Minnesota residents to help 
18.20 	them file federal and state income tax returns and Minnesota property tax refund claims 
18.21 	and may include provision of personal representation before the Department of Revenue 
18.22 	and Internal Revenue Service.

18.23 	ARTICLE 2
18.24 	FEDERAL UPDATE

18.25 	Section 1. Minnesota Statutes 2006, section 289A.02, subdivision 7, is amended to 
18.26 	read:
18.27 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
18.28 	Revenue Code" means the Internal Revenue Code of 1986, as amended through May 18, 
18.29 	2006 December 31, 2006.

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

19.1 	Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19, as amended by Laws 
19.2 	2007, chapter 1, section 1, is amended to read:
19.3 		Subd. 19.Net income. The term "net income" means the federal taxable income, 
19.4 	as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 
19.5 	date named in this subdivision, incorporating the federal effective dates of changes to the 
19.6 	Internal Revenue Code and any elections made by the taxpayer in accordance with the 
19.7 	Internal Revenue Code in determining federal taxable income for federal income tax 
19.8 	purposes, and with the modifications provided in subdivisions 19a to 19f.
19.9 	In the case of a regulated investment company or a fund thereof, as defined in section 
19.10 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
19.11 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
19.12 	except that:
19.13 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
19.14 	Revenue Code does not apply;
19.15 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 
19.16 	Revenue Code must be applied by allowing a deduction for capital gain dividends and 
19.17 	exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 
19.18 	Revenue Code; and
19.19 	(3) the deduction for dividends paid must also be applied in the amount of any 
19.20 	undistributed capital gains which the regulated investment company elects to have treated 
19.21 	as provided in section 852(b)(3)(D) of the Internal Revenue Code.
19.22 	The net income of a real estate investment trust as defined and limited by section 
19.23 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
19.24 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
19.25 	The net income of a designated settlement fund as defined in section 468B(d) of 
19.26 	the Internal Revenue Code means the gross income as defined in section 468B(b) of the 
19.27 	Internal Revenue Code.
19.28 	The Internal Revenue Code of 1986, as amended through May 18 December 31, 
19.29 	2006, shall be in effect for taxable years beginning after December 31, 1996, and before 
19.30 	January 1, 2006, and for taxable years beginning after December 31, 2006. The Internal 
19.31 	Revenue Code of 1986, as amended through December 31, 2006, is in effect for taxable 
19.32 	years beginning after December 31, 2005, and before January 1, 2007.
19.33 	Except as otherwise provided, references to the Internal Revenue Code in 
19.34 	subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 
19.35 	the applicable year.

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

20.1 	Sec. 3. Minnesota Statutes 2006, section 290.01 subdivision 31, as amended by Laws 
20.2 	2007, chapter 1, section 3, is amended to read:
20.3 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, for 
20.4 	taxable years beginning before January 1, 2006, and after December 31, 2006, "Internal 
20.5 	Revenue Code" means the Internal Revenue Code of 1986, as amended through May 18, 
20.6 	2006; and for taxable years beginning after December 31, 2005, and before January 1, 
20.7 	2007, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended 
20.8 	through December 31, 2006.

20.9 	EFFECTIVE DATE. This section is effective the day following final enactment 
20.10 	except the changes incorporated by federal changes are effective at the same time as the 
20.11 	changes were effective for federal purposes.

20.12 	Sec. 4. Minnesota Statutes 2006, section 290A.03, subdivision 15, as amended by 
20.13 	Laws 2007, chapter 1, section 4, is amended to read:
20.14 		Subd. 15.Internal Revenue Code. For taxable years beginning before January 1, 
20.15 	2006, and after December 31, 2006, "Internal Revenue Code" means the Internal Revenue 
20.16 	Code of 1986, as amended through May 18, 2006; and for taxable years beginning after 
20.17 	December 31, 2005, and before January 1, 2007, "Internal Revenue Code" means the 
20.18 	Internal Revenue Code of 1986, as amended through December 31, 2006.

20.19 	EFFECTIVE DATE. This section is effective for property tax refunds based on 
20.20 	property taxes payable on or after December 31, 2006, and rent paid on or after December 
20.21 	31, 2005.

20.22 	Sec. 5. Minnesota Statutes 2006, section 291.005, subdivision 1, is amended to read:
20.23 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following 
20.24 	terms used in this chapter shall have the following meanings:
20.25 	(1) "Federal gross estate" means the gross estate of a decedent as valued and 
20.26 	otherwise determined for federal estate tax purposes by federal taxing authorities pursuant 
20.27 	to the provisions of the Internal Revenue Code.
20.28 	(2) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
20.29 	excluding therefrom any property included therein which has its situs outside Minnesota, 
20.30 	and (b) including therein any property omitted from the federal gross estate which is 
20.31 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
20.32 	authorities.
21.1 	(3) "Personal representative" means the executor, administrator or other person 
21.2 	appointed by the court to administer and dispose of the property of the decedent. If there 
21.3 	is no executor, administrator or other person appointed, qualified, and acting within this 
21.4 	state, then any person in actual or constructive possession of any property having a situs in 
21.5 	this state which is included in the federal gross estate of the decedent shall be deemed 
21.6 	to be a personal representative to the extent of the property and the Minnesota estate tax 
21.7 	due with respect to the property.
21.8 	(4) "Resident decedent" means an individual whose domicile at the time of death 
21.9 	was in Minnesota.
21.10 	(5) "Nonresident decedent" means an individual whose domicile at the time of 
21.11 	death was not in Minnesota.
21.12 	(6) "Situs of property" means, with respect to real property, the state or country in 
21.13 	which it is located; with respect to tangible personal property, the state or country in which 
21.14 	it was normally kept or located at the time of the decedent's death; and with respect to 
21.15 	intangible personal property, the state or country in which the decedent was domiciled 
21.16 	at death.
21.17 	(7) "Commissioner" means the commissioner of revenue or any person to whom the 
21.18 	commissioner has delegated functions under this chapter.
21.19 	(8) "Internal Revenue Code" means the United States Internal Revenue Code of 
21.20 	1986, as amended through May 18, 2006 December 31, 2006.
21.21 	(9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
21.22 	defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of 
21.23 	deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.

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

21.25 	ARTICLE 3
21.26 	CORPORATE INCOME TAX

21.27 	Section 1. Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read:
21.28 		Subd. 6b.Foreign operating corporation. The term "foreign operating 
21.29 	corporation," when applied to a corporation, means a domestic corporation with the 
21.30 	following characteristics:
21.31 	(1) it is part of a unitary business at least one member of which is taxable in this state;
21.32 	(2) it is not a foreign sales corporation under section 922 of the Internal Revenue 
21.33 	Code, as amended through December 31, 1999, for the taxable year;
22.1 	(3) either (i) the average of the percentages of its property and payrolls, including 
22.2 	the pro rata share of its unitary partnerships' property and payrolls, assigned to locations 
22.3 	outside the United States, where the United States includes the District of Columbia and 
22.4 	excludes the commonwealth of Puerto Rico and possessions of the United States, as 
22.5 	determined under section 290.191 or 290.20, is 80 percent or more; or (ii) it has in effect a 
22.6 	valid election under section 936 of the Internal Revenue Code; or (ii) at least 80 percent 
22.7 	of the gross income from all sources of the corporation in the tax year is active foreign 
22.8 	business income; and
22.9 	(4) it has $1,000,000 of payroll and $2,000,000 of property, as determined under 
22.10 	section 290.191 or 290.20, that are located outside the United States. If the domestic 
22.11 	corporation does not have payroll as determined under section 290.191 or 290.20, but it 
22.12 	or its partnerships have paid $1,000,000 for work, performed directly for the domestic 
22.13 	corporation or the partnerships, outside the United States, then paragraph (3)(i) shall not 
22.14 	require payrolls to be included in the average calculation for purposes of this subdivision, 
22.15 	active foreign business income means gross income that is (i) derived from sources 
22.16 	without the United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of the 
22.17 	Internal Revenue Code; and (ii) attributable to the active conduct of a trade or business in 
22.18 	a foreign country.

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

22.21 	Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
22.22 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
22.23 	there shall be added to federal taxable income:
22.24 	(1) the amount of any deduction taken for federal income tax purposes for income, 
22.25 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
22.26 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
22.27 	another state, a political subdivision of another state, the District of Columbia, or any 
22.28 	foreign country or possession of the United States;
22.29 	(2) interest not subject to federal tax upon obligations of: the United States, its 
22.30 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
22.31 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
22.32 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
22.33 	tribal governments;
22.34 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
22.35 	Revenue Code;
23.1 	(4) the amount of any net operating loss deduction taken for federal income tax 
23.2 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
23.3 	deduction under section 810 of the Internal Revenue Code;
23.4 	(5) the amount of any special deductions taken for federal income tax purposes 
23.5 	under sections 241 to 247 and 965 of the Internal Revenue Code;
23.6 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
23.7 	clause (a), that are not subject to Minnesota income tax;
23.8 	(7) the amount of any capital losses deducted for federal income tax purposes under 
23.9 	sections 1211 and 1212 of the Internal Revenue Code;
23.10 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
23.11 	921(a) and 291 of the Internal Revenue Code;
23.12 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
23.13 	291 of the Internal Revenue Code;
23.14 	(10) for certified pollution control facilities placed in service in a taxable year 
23.15 	beginning before December 31, 1986, and for which amortization deductions were elected 
23.16 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
23.17 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
23.18 	income for those facilities;
23.19 	(11) the amount of any deemed dividend from a foreign operating corporation 
23.20 	determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 
23.21 	shall be reduced by the amount of the addition to income required by clauses (19), (20), 
23.22 	(21), and (22);
23.23 	(12) the amount of a partner's pro rata share of net income which does not flow 
23.24 	through to the partner because the partnership elected to pay the tax on the income under 
23.25 	section 6242(a)(2) of the Internal Revenue Code;
23.26 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
23.27 	Code;
23.28 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
23.29 	Revenue Code, for the taxable year when subpart F income is calculated without regard 
23.30 	to the provisions of section 103 of Public Law 109-222;
23.31 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
23.32 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
23.33 	has an activity that in the taxable year generates a deduction for depreciation under 
23.34 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
23.35 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
23.36 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
24.1 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
24.2 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
24.3 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
24.4 	under section 168(k)(1)(A) and (k)(4)(A) is allowed;
24.5 	(16) 80 percent of the amount by which the deduction allowed by section 179 of the 
24.6 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
24.7 	Revenue Code of 1986, as amended through December 31, 2003;
24.8 	(17) to the extent deducted in computing federal taxable income, the amount of the 
24.9 	deduction allowable under section 199 of the Internal Revenue Code; and
24.10 	(18) the exclusion allowed under section 139A of the Internal Revenue Code for 
24.11 	federal subsidies for prescription drug plans;
24.12 	(19) an amount equal to the interest and intangible expenses, losses, and costs paid, 
24.13 	accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 
24.14 	of a corporation that is a member of the taxpayer's unitary business group that qualifies 
24.15 	as a foreign operating corporation. For purposes of this clause, intangible expenses and 
24.16 	costs include:
24.17 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
24.18 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
24.19 	intangible property;
24.20 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
24.21 	transactions;
24.22 	(iii) royalty, patent, technical, and copyright fees;
24.23 	(iv) licensing fees; and
24.24 	(v) other similar expenses and costs.
24.25 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
24.26 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
24.27 	secrets, and similar types of intangible assets.
24.28 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
24.29 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
24.30 	to such item of income to the extent that the income to the foreign operating corporation 
24.31 	is income from sources without the United States as defined in subtitle A, chapter 1, 
24.32 	subchapter N, part 1, of the Internal Revenue Code;
24.33 	(20) except as already included in the taxpayer's taxable income pursuant to clause 
24.34 	(19), any interest income and income generated from intangible property received or 
24.35 	accrued by a foreign operating corporation that is a member of the taxpayer's unitary 
24.36 	group. For purposes of this clause, income generated from intangible property includes:
25.1 	(i) income related to the direct or indirect acquisition, use, maintenance or 
25.2 	management, ownership, sale, exchange, or any other disposition of intangible property;
25.3 	(ii) income from factoring transactions or discounting transactions;
25.4 	(iii) royalty, patent, technical, and copyright fees;
25.5 	(iv) licensing fees; and
25.6 	(v) other similar income.
25.7 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
25.8 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
25.9 	secrets, and similar types of intangible assets. 
25.10 	This clause does not apply to any item of interest or intangible income received or accrued 
25.11 	by a foreign operating corporation with respect to such item of income to the extent that 
25.12 	the income is income from sources without the United States as defined in subtitle A, 
25.13 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
25.14 	(21) the dividends attributable to the income of a foreign operating corporation that 
25.15 	is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
25.16 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
25.17 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
25.18 	foreign operating corporation; and
25.19 	(22) the income of a foreign operating corporation that is a member of the taxpayer's 
25.20 	unitary group in an amount that is equal to gains derived from the sale of real or personal 
25.21 	property located in the United States.

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

25.24 	Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
25.25 		Subd. 19d.Corporations; modifications decreasing federal taxable income. For 
25.26 	corporations, there shall be subtracted from federal taxable income after the increases 
25.27 	provided in subdivision 19c:
25.28 	(1) the amount of foreign dividend gross-up added to gross income for federal 
25.29 	income tax purposes under section 78 of the Internal Revenue Code;
25.30 	(2) the amount of salary expense not allowed for federal income tax purposes due to 
25.31 	claiming the federal jobs credit under section 51 of the Internal Revenue Code;
25.32 	(3) any dividend (not including any distribution in liquidation) paid within the 
25.33 	taxable year by a national or state bank to the United States, or to any instrumentality of 
26.1 	the United States exempt from federal income taxes, on the preferred stock of the bank 
26.2 	owned by the United States or the instrumentality;
26.3 	(4) amounts disallowed for intangible drilling costs due to differences between 
26.4 	this chapter and the Internal Revenue Code in taxable years beginning before January 
26.5 	1, 1987, as follows:
26.6 	(i) to the extent the disallowed costs are represented by physical property, an amount 
26.7 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
26.8 	subdivision 7, subject to the modifications contained in subdivision 19e; and
26.9 	(ii) to the extent the disallowed costs are not represented by physical property, an 
26.10 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
26.11 	290.09, subdivision 8;
26.12 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
26.13 	Internal Revenue Code, except that:
26.14 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
26.15 	capital loss carrybacks shall not be allowed;
26.16 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
26.17 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
26.18 	allowed;
26.19 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
26.20 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
26.21 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
26.22 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
26.23 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
26.24 	extent such loss was not used in a prior taxable year and subject to the provisions of 
26.25 	Minnesota Statutes 1986, section 290.16, shall be allowed;
26.26 	(6) an amount for interest and expenses relating to income not taxable for federal 
26.27 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
26.28 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
26.29 	291 of the Internal Revenue Code in computing federal taxable income;
26.30 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
26.31 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a 
26.32 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
26.33 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
26.34 	by the commissioner. In the case of property held in trust, the allowable deduction must 
26.35 	be apportioned between the income beneficiaries and the trustee in accordance with the 
27.1 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
27.2 	of the trust's income allocable to each;
27.3 	(8) for certified pollution control facilities placed in service in a taxable year 
27.4 	beginning before December 31, 1986, and for which amortization deductions were elected 
27.5 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
27.6 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
27.7 	1986, section 290.09, subdivision 7;
27.8 	(9) amounts included in federal taxable income that are due to refunds of income, 
27.9 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
27.10 	corporation to Minnesota, another state, a political subdivision of another state, the 
27.11 	District of Columbia, or a foreign country or possession of the United States to the extent 
27.12 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
27.13 	clause (1), in a prior taxable year;
27.14 	(10) 80 percent of royalties, fees, or other like income accrued or received from a 
27.15 	foreign operating corporation or a foreign corporation which is part of the same unitary 
27.16 	business as the receiving corporation, unless the income resulting from such payments or 
27.17 	accruals is income from sources within the United States as defined in subtitle A, chapter 
27.18 	1, subchapter N, part 1, of the Internal Revenue Code;
27.19 	(11) income or gains from the business of mining as defined in section 290.05, 
27.20 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
27.21 	(12) the amount of disability access expenditures in the taxable year which are not 
27.22 	allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
27.23 	(13) the amount of qualified research expenses not allowed for federal income tax 
27.24 	purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 
27.25 	the amount exceeds the amount of the credit allowed under section 290.068;
27.26 	(14) the amount of salary expenses not allowed for federal income tax purposes due 
27.27 	to claiming the Indian employment credit under section 45A(a) of the Internal Revenue 
27.28 	Code;
27.29 	(15) the amount of any refund of environmental taxes paid under section 59A of the 
27.30 	Internal Revenue Code;
27.31 	(16) for taxable years beginning before January 1, 2008, the amount of the federal 
27.32 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
27.33 	which is included in gross income under section 87 of the Internal Revenue Code;
27.34 	(17) for a corporation whose foreign sales corporation, as defined in section 922 
27.35 	of the Internal Revenue Code, constituted a foreign operating corporation during any 
27.36 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
28.1 	claiming the deduction under section 290.21, subdivision 4, for income received from 
28.2 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
28.3 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
28.4 	not income of a foreign operating company;
28.5 	(18) any decrease in subpart F income, as defined in section 952(a) of the Internal 
28.6 	Revenue Code, for the taxable year when subpart F income is calculated without regard 
28.7 	to the provisions of section 614 of Public Law 107-147;
28.8 	(19) in each of the five tax years immediately following the tax year in which an 
28.9 	addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of 
28.10 	the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 
28.11 	amount of the addition made by the taxpayer under subdivision 19c, clause (15). The 
28.12 	resulting delayed depreciation cannot be less than zero; and
28.13 	(20) in each of the five tax years immediately following the tax year in which an 
28.14 	addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the 
28.15 	amount of the addition.

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

28.18 	Sec. 4. Minnesota Statutes 2006, section 290.191, subdivision 2, is amended to read:
28.19 		Subd. 2.Apportionment formula of general application. (a) Except for those 
28.20 	trades or businesses required to use a different formula under subdivision 3 or section 
28.21 	290.36, and for those trades or businesses that receive permission to use some other 
28.22 	method under section 290.20 or under subdivision 4, a trade or business required to 
28.23 	apportion its net income must apportion its income to this state on the basis of the 
28.24 	percentage obtained by taking the sum of:
28.25 	(1) the percent for the sales factor under paragraph (b) of the percentage which 
28.26 	the sales made within this state in connection with the trade or business during the tax 
28.27 	period are of the total sales wherever made in connection with the trade or business during 
28.28 	the tax period;
28.29 	(2) the percent for the property factor under paragraph (b) of the percentage which 
28.30 	the total tangible property used by the taxpayer in this state in connection with the trade or 
28.31 	business during the tax period is of the total tangible property, wherever located, used by 
28.32 	the taxpayer in connection with the trade or business during the tax period; and
28.33 	(3) the percent for the payroll factor under paragraph (b) of the percentage which 
28.34 	the taxpayer's total payrolls paid or incurred in this state or paid in respect to labor 
28.35 	performed in this state in connection with the trade or business during the tax period are 
29.1 	of the taxpayer's total payrolls paid or incurred in connection with the trade or business 
29.2 	during the tax period.
29.3 	(b) For purposes of paragraph (a) and subdivision 3, the following percentages apply 
29.4 	for the taxable years specified:

29.5
29.6
29.7
29.8	Taxable years 
beginning 
during 
calendar year
		Sales 
factor 
percent
		Property 
factor 
percent
		Payroll 
factor 
percent
	
29.9	2007
		78
		11
		11
	
29.10	2008
		81 85
		9.5 7.5
		9.5 7.5
	
29.11	2009
		84 90
		8 5
		8 5
	
29.12	2010
		87 95
		6.5 2.5
		6.5 2.5
	
29.13	2011
		90
		5
		5
	
29.14	2012
		93
		3.5
		3.5
	
29.15	2013
		96
		2
		2
	
29.16
29.17	2014 and later 
calendar years
		100
		0
		0

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

29.20 	Sec. 5. Minnesota Statutes 2006, section 290.34, is amended by adding a subdivision 
29.21 	to read:
29.22 		Subd. 3a.Transactions without economic substance. (a) When any person, 
29.23 	directly or indirectly, engages in a transaction or series of transactions without economic 
29.24 	substance to create a loss or to reduce taxable income or to increase credits allowed in 
29.25 	determining Minnesota tax, the commissioner must determine the amount of a taxpayer's 
29.26 	taxable income or tax so as to reflect what would have been the taxpayer's taxable income 
29.27 	or tax but for the transaction or transactions without economic substance causing the 
29.28 	reduction in taxable income or tax.
29.29 	(b) A transaction has economic substance only if a taxpayer shows by clear and 
29.30 	convincing evidence:
29.31 	(1) the transaction changes in a meaningful way (apart from federal, state, local, and 
29.32 	foreign tax effects) the taxpayer's economic position; and
29.33 	(2) the taxpayer has a substantial nontax purpose for entering into a transaction and 
29.34 	the transaction is a reasonable means of accomplishing the substantial nontax purpose.
29.35 	A transaction does not have a substantial nontax purpose if it does not have a potential 
29.36 	for profit. A transaction has a substantial nontax purpose when the taxpayer reasonably 
29.37 	expects that the pretax profit for the transaction is substantial in relation to the present 
30.1 	value of the expected net tax benefits that would be allowed if the transaction were 
30.2 	respected for tax purposes, and the reasonably expected pretax profit from the transaction 
30.3 	exceeds the risk-free rate of return.

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

30.6 	Sec. 6. PURPOSE AND EFFECT.
 30.7 	It is the intent of the legislature that the provisions of this article must not be 
30.8 	construed as supplanting any existing Minnesota law.

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

30.11 	ARTICLE 4
30.12 	SALES AND USE TAXES

30.13 	Section 1. Minnesota Statutes 2006, section 37.13, is amended by adding a subdivision 
30.14 	to read:
30.15 		Subd. 3.Capital improvements. The society shall spend the amount of sales 
30.16 	tax retained under section 289A.31, subdivision 7, paragraph (f), exclusively to make 
30.17 	capital improvements to state-owned buildings and facilities on the State Fairgrounds. 
30.18 	The society shall match the amount retained with an equal amount from proceeds from 
30.19 	special assessments levied against commercial exhibits, concessions, and rentals, and 
30.20 	other special user fees specifically designated for capital improvements.

30.21 	Sec. 2. Minnesota Statutes 2006, section 168.012, subdivision 1, is amended to read:
30.22 		Subdivision 1.Vehicles exempt from tax, fees, or plate display. (a) The following 
30.23 	vehicles are exempt from the provisions of this chapter requiring payment of tax and 
30.24 	registration fees, except as provided in subdivision 1c:
30.25 	(1) vehicles owned and used solely in the transaction of official business by the 
30.26 	federal government, the state, or any political subdivision;
30.27 	(2) vehicles owned and used exclusively by educational institutions and used solely 
30.28 	in the transportation of pupils to and from those institutions;
30.29 	(3) vehicles used solely in driver education programs at nonpublic high schools;
30.30 	(4) vehicles owned by nonprofit charities and used exclusively to transport disabled 
30.31 	persons for charitable, religious, or educational purposes;
31.1 	(5) ambulancesvehicles owned by ambulance services licensed under section 
31.2 	144E.10, the general appearance of which is unmistakable that are equipped and 
31.3 	specifically intended for emergency response or providing ambulance service; and
31.4 	(6) vehicles owned by a commercial driving school licensed under section 171.34, 
31.5 	or an employee of a commercial driving school licensed under section 171.34, and the 
31.6 	vehicle is used exclusively for driver education and training.
31.7 	(b) Vehicles owned by the federal government, municipal fire apparatuses including 
31.8 	fire-suppression support vehicles, police patrols, and ambulances, the general appearance 
31.9 	of which is unmistakable, are not required to register or display number plates.
31.10 	(c) Unmarked vehicles used in general police work, liquor investigations, or arson 
31.11 	investigations, and passenger automobiles, pickup trucks, and buses owned or operated by 
31.12 	the Department of Corrections, must be registered and must display appropriate license 
31.13 	number plates, furnished by the registrar at cost. Original and renewal applications for 
31.14 	these license plates authorized for use in general police work and for use by the Department 
31.15 	of Corrections must be accompanied by a certification signed by the appropriate chief of 
31.16 	police if issued to a police vehicle, the appropriate sheriff if issued to a sheriff's vehicle, 
31.17 	the commissioner of corrections if issued to a Department of Corrections vehicle, or the 
31.18 	appropriate officer in charge if issued to a vehicle of any other law enforcement agency. 
31.19 	The certification must be on a form prescribed by the commissioner and state that the 
31.20 	vehicle will be used exclusively for a purpose authorized by this section.
31.21 	(d) Unmarked vehicles used by the Departments of Revenue and Labor and Industry, 
31.22 	fraud unit, in conducting seizures or criminal investigations must be registered and must 
31.23 	display passenger vehicle classification license number plates, furnished at cost by the 
31.24 	registrar. Original and renewal applications for these passenger vehicle license plates 
31.25 	must be accompanied by a certification signed by the commissioner of revenue or the 
31.26 	commissioner of labor and industry. The certification must be on a form prescribed by 
31.27 	the commissioner and state that the vehicles will be used exclusively for the purposes 
31.28 	authorized by this section.
31.29 	(e) Unmarked vehicles used by the Division of Disease Prevention and Control of the 
31.30 	Department of Health must be registered and must display passenger vehicle classification 
31.31 	license number plates. These plates must be furnished at cost by the registrar. Original 
31.32 	and renewal applications for these passenger vehicle license plates must be accompanied 
31.33 	by a certification signed by the commissioner of health. The certification must be on a 
31.34 	form prescribed by the commissioner and state that the vehicles will be used exclusively 
31.35 	for the official duties of the Division of Disease Prevention and Control.
32.1 	(f) Unmarked vehicles used by staff of the Gambling Control Board in gambling 
32.2 	investigations and reviews must be registered and must display passenger vehicle 
32.3 	classification license number plates. These plates must be furnished at cost by the 
32.4 	registrar. Original and renewal applications for these passenger vehicle license plates must 
32.5 	be accompanied by a certification signed by the board chair. The certification must be on a 
32.6 	form prescribed by the commissioner and state that the vehicles will be used exclusively 
32.7 	for the official duties of the Gambling Control Board.
32.8 	(g) All other motor vehicles must be registered and display tax-exempt number 
32.9 	plates, furnished by the registrar at cost, except as provided in subdivision 1c. All 
32.10 	vehicles required to display tax-exempt number plates must have the name of the state 
32.11 	department or political subdivision, nonpublic high school operating a driver education 
32.12 	program, or licensed commercial driving school, plainly displayed on both sides of the 
32.13 	vehicle; except that each state hospital and institution for persons who are mentally ill 
32.14 	and developmentally disabled may have one vehicle without the required identification 
32.15 	on the sides of the vehicle, and county social service agencies may have vehicles used 
32.16 	for child and vulnerable adult protective services without the required identification on 
32.17 	the sides of the vehicle. This identification must be in a color giving contrast with that 
32.18 	of the part of the vehicle on which it is placed and must endure throughout the term of 
32.19 	the registration. The identification must not be on a removable plate or placard and must 
32.20 	be kept clean and visible at all times; except that a removable plate or placard may be 
32.21 	utilized on vehicles leased or loaned to a political subdivision or to a nonpublic high 
32.22 	school driver education program.

32.23 	EFFECTIVE DATE. This section is effective for registrations and renewals after 
32.24 	June 30, 2007.

32.25 	Sec. 3. Minnesota Statutes 2006, section 289A.20, subdivision 4, is amended to read:
32.26 		Subd. 4.Sales and use tax. (a) The taxes imposed by chapter 297A are due and 
32.27 	payable to the commissioner monthly on or before the 20th day of the month following the 
32.28 	month in which the taxable event occurred, or following another reporting period as the 
32.29 	commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph 
32.30 	(f) or (g), except that use taxes due on an annual use tax return as provided under section 
32.31 	289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.
32.32 	(b) A vendor having a liability of $120,000 or more during a fiscal year ending June 
32.33 	30 must remit the June liability for the next year in the following manner:
32.34 	(1) Two business days before June 30 of the year, the vendor must remit 7830 
32.35 	percent of the estimated June liability to the commissioner.
33.1 	(2) On or before August 20 of the year, the vendor must pay any additional amount 
33.2 	of tax not remitted in June.
33.3 	(c) A vendor having a liability of:
33.4 	(1) $20,000 or more in the fiscal year ending June 30, 2005; or
33.5 	(2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years 
33.6 	thereafter,
33.7 	must remit all liabilities on returns due for periods beginning in the subsequent calendar 
33.8 	year by electronic means on or before the 20th day of the month following the month in 
33.9 	which the taxable event occurred, or on or before the 20th day of the month following the 
33.10 	month in which the sale is reported under section 289A.18, subdivision 4, except for 78 30
33.11 	percent of the estimated June liability, which is due two business days before June 30. The 
33.12 	remaining amount of the June liability is due on August 20.

33.13 	EFFECTIVE DATE. This section is effective beginning with June 2008 tax 
33.14 	liabilities.

33.15 	Sec. 4. Minnesota Statutes 2006, section 289A.31, subdivision 7, is amended to read:
33.16 		Subd. 7.Sales and use tax. (a) The sales and use tax required to be collected by the 
33.17 	retailer under chapter 297A constitutes a debt owed by the retailer to Minnesota, and the 
33.18 	sums collected must be held as a special fund in trust for the state of Minnesota.
33.19 	A retailer who does not maintain a place of business within this state as defined by 
33.20 	section 297A.66, subdivision 1, shall not be indebted to Minnesota for amounts of tax that 
33.21 	it was required to collect but did not collect unless the retailer knew or had been advised 
33.22 	by the commissioner of its obligation to collect the tax.
33.23 	(b) The use tax required to be paid by a purchaser is a debt owed by the purchaser 
33.24 	to Minnesota.
33.25 	(c) The tax imposed by chapter 297A, and interest and penalties, is a personal debt 
33.26 	of the individual required to file a return from the time the liability arises, irrespective 
33.27 	of when the time for payment of that liability occurs. The debt is, in the case of the 
33.28 	executor or administrator of the estate of a decedent and in the case of a fiduciary, that 
33.29 	of the individual in an official or fiduciary capacity unless the individual has voluntarily 
33.30 	distributed the assets held in that capacity without reserving sufficient assets to pay the tax, 
33.31 	interest, and penalties, in which case the individual is personally liable for the deficiency.
33.32 	(d) Liability for payment of sales and use taxes includes any responsible person or 
33.33 	entity described in the personal liability provisions of section 270C.56.
34.1 	(e) Any amounts collected, even if erroneously or illegally collected, from a 
34.2 	purchaser under a representation that they are taxes imposed under chapter 297A are 
34.3 	state funds from the time of collection and must be reported on a return filed with the 
34.4 	commissioner.
34.5 	(f) The tax imposed under chapter 297A on sales of tickets to the premises of or 
34.6 	events sponsored by the Minnesota State Agricultural Society and conducted on the State 
34.7 	Fairgrounds during the period of annual State Fair may be retained by the Minnesota 
34.8 	State Agricultural Society if the funds are used and matched as required under section 
34.9 	37.13, subdivision 3.

34.10 	EFFECTIVE DATE. This section is effective for sales and purchases after June 
34.11 	30, 2007.

34.12 	Sec. 5. Minnesota Statutes 2006, section 289A.60, subdivision 15, is amended to read:
34.13 		Subd. 15.Accelerated payment of June sales tax liability; penalty for 
34.14 	underpayment. For payments made after December 31, 2006, if a vendor is required by 
34.15 	law to submit an estimation of June sales tax liabilities and 7830 percent payment by a 
34.16 	certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual 
34.17 	June liability required to be paid in June less the amount remitted in June. The penalty 
34.18 	must not be imposed, however, if the amount remitted in June equals the lesser of 7830 
34.19 	percent of the preceding May's liability or 7830 percent of the average monthly liability 
34.20 	for the previous calendar year.

34.21 	EFFECTIVE DATE. This section is effective beginning with June 2008 tax 
34.22 	liabilities.

34.23 	Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:
34.24 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
34.25 	to, each of the transactions listed in this subdivision.
34.26 	(b) Sale and purchase include:
34.27 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
34.28 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
34.29 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
34.30 	in money or by exchange or barter, tangible personal property, other than a manufactured 
34.31 	home used for residential purposes for a continuous period of 30 days or more.
35.1 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
35.2 	tangible personal property for a consideration for consumers who furnish either directly or 
35.3 	indirectly the materials used in the production, fabrication, printing, or processing.
35.4 	(d) Sale and purchase include the preparing for a consideration of food. 
35.5 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
35.6 	to, the following:
35.7 	(1) prepared food sold by the retailer;
35.8 	(2) soft drinks;
35.9 	(3) candy;
35.10 	(4) dietary supplements; and
35.11 	(5) all food sold through vending machines, except milk and water sold in schools. 
35.12 	Schools are those defined in section 120A.05. For contracts entered into after the date 
35.13 	of final enactment of this act, any savings realized as a result of this exception must be 
35.14 	reflected in the revenues apportioned to schools or school districts from vending machine 
35.15 	sales.
35.16 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
35.17 	gas, water, or steam for use or consumption within this state.
35.18 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
35.19 	computer software whether delivered electronically, by load and leave, or otherwise.
35.20 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
35.21 	services:
35.22 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
35.23 	events, and the making available of amusement devices, tanning facilities, reducing 
35.24 	salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
35.25 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
35.26 	motel, or trailer camp and the granting of any similar license to use real property in a 
35.27 	specific facility, other than the renting or leasing of it for a continuous period of 30 days 
35.28 	or more under an enforceable written agreement that may not be terminated without 
35.29 	prior notice;
35.30 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
35.31 	periodic basis, except for parking at a meter;
35.32 	(4) the granting of membership in a club, association, or other organization if:
35.33 	(i) the club, association, or other organization makes available for the use of its 
35.34 	members sports and athletic facilities, without regard to whether a separate charge is 
35.35 	assessed for use of the facilities; and
36.1 	(ii) use of the sports and athletic facility is not made available to the general public 
36.2 	on the same basis as it is made available to members.
36.3 	Granting of membership means both onetime initiation fees and periodic membership 
36.4 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
36.5 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
36.6 	swimming pools; and other similar athletic or sports facilities;
36.7 	(5) delivery of aggregate materials and concrete block by a third party if the delivery 
36.8 	would be subject to the sales tax if provided by the seller of the aggregate material or 
36.9 	concrete block; and
36.10 	(6) services as provided in this clause:
36.11 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
36.12 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
36.13 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
36.14 	include services provided by coin operated facilities operated by the customer;
36.15 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
36.16 	provided by coin operated facilities operated by the customer, and rustproofing, 
36.17 	undercoating, and towing of motor vehicles;
36.18 	(iii) building and residential cleaning, maintenance, and disinfecting and 
36.19 	exterminating services;
36.20 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
36.21 	including services performed within the jurisdiction they serve by off-duty licensed peace 
36.22 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
36.23 	organization for monitoring and electronic surveillance of persons placed on in-home 
36.24 	detention pursuant to court order or under the direction of the Minnesota Department 
36.25 	of Corrections;
36.26 	(v) pet grooming services;
36.27 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
36.28 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
36.29 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
36.30 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
36.31 	public utility lines. Services performed under a construction contract for the installation of 
36.32 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
36.33 	(vii) massages, except when provided by a licensed health care facility or 
36.34 	professional or upon written referral from a licensed health care facility or professional for 
36.35 	treatment of illness, injury, or disease; and
37.1 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
37.2 	other similar arrangements, but excluding veterinary and horse boarding services.
37.3 	In applying the provisions of this chapter, the terms "tangible personal property" 
37.4 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
37.5 	and the provision of these taxable services, unless specifically provided otherwise. 
37.6 	Services performed by an employee for an employer are not taxable. Services performed 
37.7 	by a partnership or association for another partnership or association are not taxable if 
37.8 	one of the entities owns or controls more than 80 percent of the voting power of the 
37.9 	equity interest in the other entity. Services performed between members of an affiliated 
37.10 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
37.11 	group of corporations" means those entities that would be classified as members of an 
37.12 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
37.13 	the exclusions in section 1504(b).
37.14 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
37.15 	personal property or taxable services by the United States or any of its agencies or 
37.16 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
37.17 	subdivisions.
37.18 	(i) A sale and a purchase includes the furnishing for a consideration of 
37.19 	telecommunications services, including cable television services and direct satellite 
37.20 	services. Telecommunications services are taxed to the extent allowed under federal law.
37.21 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
37.22 	the installation charges would be subject to the sales tax if the installation were provided 
37.23 	by the seller of the item being installed.
37.24 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
37.25 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
37.26 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
37.27 	65B.29, subdivision 1, clause (1).

37.28 	EFFECTIVE DATE. This section is effective for purchases and sales made on and 
37.29 	after July 1, 2007.

37.30 	Sec. 7. Minnesota Statutes 2006, section 297A.61, subdivision 12, is amended to read:
37.31 		Subd. 12.Farm machinery. (a) "Farm machinery" means new or used machinery, 
37.32 	equipment, implements, accessories, and contrivances used directly and principally in 
37.33 	agricultural production of tangible personal property intended to be sold ultimately at 
37.34 	retail including, but not limited to:
38.1 	(1) machinery for the preparation, seeding, or cultivation of soil for growing 
38.2 	agricultural crops;
38.3 	(2) barn cleaners, milking systems, grain dryers,  grain bins, feeding systems 
38.4 	including stationary feed bunks, and similar installations, whether or not the equipment is 
38.5 	installed by the seller and becomes part of the real property; and
38.6 	(3) irrigation equipment sold for exclusively agricultural use, including pumps, pipe 
38.7 	fittings, valves, sprinklers, and other equipment necessary to the operation of an irrigation 
38.8 	system when sold as part of an irrigation system, whether or not the equipment is installed 
38.9 	by the seller and becomes part of the real property.
38.10 	(b) Farm machinery does not include:
38.11 	(1) repair or replacement parts;
38.12 	(2) tools, shop equipment, grain bins, fencing material, communication equipment, 
38.13 	and other farm supplies;
38.14 	(3) motor vehicles taxed under chapter 297B;
38.15 	(4) snowmobiles or snow blowers;
38.16 	(5) lawn mowers except those used in the production of sod for sale, or garden-type 
38.17 	tractors or garden tillers; or
38.18 	(6) machinery, equipment, implements, accessories, and contrivances used directly in 
38.19 	the production of horses not raised for slaughter, fur-bearing animals, or research animals.

38.20 	EFFECTIVE DATE. This section is effective for sales made after June 30, 2007.

38.21 	Sec. 8. Minnesota Statutes 2006, section 297A.668, is amended by adding a 
38.22 	subdivision to read:
38.23 		Subd. 8.Manufactured and modular housing. (a) Notwithstanding other 
38.24 	subdivisions of this section, a sale of a manufactured or modular home shall be sourced to 
38.25 	the site where the housing is first set up or installed. 
38.26 	(b) For purposes of this section, "manufactured home" has the meaning given 
38.27 	in section 327.31, subdivision 6. For purposes of this section, "modular home" means 
38.28 	a building or structural unit that has been substantially manufactured or constructed, 
38.29 	in whole or in part, at an off-site location, with the final assembly occurring on-site 
38.30 	alone or with other units and attached to a permanent foundation site and occupied 
38.31 	as a single-family dwelling. Modular home construction must comply with applicable 
38.32 	standards adopted in Minnesota Rules authorized under chapter 16B. A modular home 
38.33 	does not include a structure subject to the requirements of the National Manufactured 
38.34 	Home Construction and Safety Standards Act of 1974 or a manufactured home.

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

39.3 	Sec. 9. Minnesota Statutes 2006, section 297A.67, subdivision 28, is amended to read:
39.4 		Subd. 28.Ambulance supplies, parts, and equipment. The following sales to or 
39.5 	use by an ambulance service licensed under section 144E.10 are exempt: 
39.6 	(1) supplies and equipment used to provide medical care; and
39.7 	(2) repair and replacement parts for ambulances and vehicles equipped and 
39.8 	specifically intended for emergency response.

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

39.11 	Sec. 10. Minnesota Statutes 2006, section 297A.68, subdivision 5, is amended to read:
39.12 		Subd. 5.Capital equipment. (a) Capital equipment is exempt. The tax must be 
39.13 	imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and 
39.14 	then refunded in the manner provided in section 297A.75.
39.15 	"Capital equipment" means machinery and equipment purchased or leased, and used 
39.16 	in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, 
39.17 	or refining tangible personal property to be sold ultimately at retail if the machinery and 
39.18 	equipment are essential to the integrated production process of manufacturing, fabricating, 
39.19 	mining, or refining. Capital equipment also includes machinery and equipment 
39.20 	used primarily to electronically transmit results retrieved by a customer of an online 
39.21 	computerized data retrieval system.
39.22 	(b) Capital equipment includes, but is not limited to:
39.23 	(1) machinery and equipment used to operate, control, or regulate the production 
39.24 	equipment;
39.25 	(2) machinery and equipment used for research and development, design, quality 
39.26 	control, and testing activities;
39.27 	(3) environmental control devices that are used to maintain conditions such as 
39.28 	temperature, humidity, light, or air pressure when those conditions are essential to and are 
39.29 	part of the production process;
39.30 	(4) materials and supplies used to construct and install machinery or equipment;
39.31 	(5) repair and replacement parts, including accessories, whether purchased as spare 
39.32 	parts, repair parts, or as upgrades or modifications to machinery or equipment;
39.33 	(6) materials used for foundations that support machinery or equipment;
40.1 	(7) materials used to construct and install special purpose buildings used in the 
40.2 	production process;
40.3 	(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed 
40.4 	as part of the delivery process regardless if mounted on a chassis, repair parts for 
40.5 	ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
40.6 	(9) machinery or equipment used for research, development, design, or production 
40.7 	of computer software.
40.8 	(c) Capital equipment does not include the following:
40.9 	(1) motor vehicles taxed under chapter 297B;
40.10 	(2) machinery or equipment used to receive or store raw materials;
40.11 	(3) building materials, except for materials included in paragraph (b), clauses (6) 
40.12 	and (7);
40.13 	(4) machinery or equipment used for nonproduction purposes, including, but not 
40.14 	limited to, the following: plant security, fire prevention, first aid, and hospital stations; 
40.15 	support operations or administration; pollution control; and plant cleaning, disposal of 
40.16 	scrap and waste, plant communications, space heating, cooling, lighting, or safety;
40.17 	(5) farm machinery and aquaculture production equipment as defined by section 
40.18 	297A.61, subdivisions 12 and 13;
40.19 	(6) machinery or equipment purchased and installed by a contractor as part of an 
40.20 	improvement to real property;
40.21 	(7) machinery and equipment used by restaurants in the furnishing, preparing, or 
40.22 	serving of prepared foods as defined in section 297A.61, subdivision 31;
40.23 	(8) machinery and equipment used to furnish the services listed in section 297A.61, 
40.24 	subdivision 3, paragraph (g), clause (6), items (i) to (vi) and (viii);
40.25 	(9) machinery or equipment used in the transportation, transmission, or distribution 
40.26 	of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, 
40.27 	tanks, mains, or other means of transporting those products. This clause does not apply to 
40.28 	machinery or equipment used to blend petroleum or biodiesel fuel as defined in section 
40.29 	239.77; or
40.30 	(10) any other item that is not essential to the integrated process of manufacturing, 
40.31 	fabricating, mining, or refining.
40.32 	(d) For purposes of this subdivision:
40.33 	(1) "Equipment" means independent devices or tools separate from machinery but 
40.34 	essential to an integrated production process, including computers and computer software, 
40.35 	used in operating, controlling, or regulating machinery and equipment; and any subunit or 
41.1 	assembly comprising a component of any machinery or accessory or attachment parts of 
41.2 	machinery, such as tools, dies, jigs, patterns, and molds.
41.3 	(2) "Fabricating" means to make, build, create, produce, or assemble components or 
41.4 	property to work in a new or different manner.
41.5 	(3) "Integrated production process" means a process or series of operations through 
41.6 	which tangible personal property is manufactured, fabricated, mined, or refined. For 
41.7 	purposes of this clause, (i) manufacturing begins with the removal of raw materials 
41.8 	from inventory and ends when the last process prior to loading for shipment has been 
41.9 	completed; (ii) fabricating begins with the removal from storage or inventory of the 
41.10 	property to be assembled, processed, altered, or modified and ends with the creation 
41.11 	or production of the new or changed product; (iii) mining begins with the removal of 
41.12 	overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and 
41.13 	ends when the last process before stockpiling is completed; and (iv) refining begins with 
41.14 	the removal from inventory or storage of a natural resource and ends with the conversion 
41.15 	of the item to its completed form.
41.16 	(4) "Machinery" means mechanical, electronic, or electrical devices, including 
41.17 	computers and computer software, that are purchased or constructed to be used for the 
41.18 	activities set forth in paragraph (a), beginning with the removal of raw materials from 
41.19 	inventory through completion of the product, including packaging of the product.
41.20 	(5) "Machinery and equipment used for pollution control" means machinery and 
41.21 	equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity 
41.22 	described in paragraph (a).
41.23 	(6) "Manufacturing" means an operation or series of operations where raw materials 
41.24 	are changed in form, composition, or condition by machinery and equipment and which 
41.25 	results in the production of a new article of tangible personal property. For purposes of 
41.26 	this subdivision, "manufacturing" includes the generation of electricity or steam to be 
41.27 	sold at retail.
41.28 	(7) "Mining" means the extraction of minerals, ores, stone, or peat.
41.29 	(8) "Online data retrieval system" means a system whose cumulation of information 
41.30 	is equally available and accessible to all its customers.
41.31 	(9) "Primarily" means machinery and equipment used 50 percent or more of the time 
41.32 	in an activity described in paragraph (a).
41.33 	(10) "Refining" means the process of converting a natural resource to an intermediate 
41.34 	or finished product, including the treatment of water to be sold at retail.
42.1 	(11) This subdivision does not apply to telecommunications equipment as 
42.2 	provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit 
42.3 	for telecommunications services.

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

42.6 	Sec. 11. Minnesota Statutes 2006, section 297A.69, subdivision 3, is amended to read:
42.7 		Subd. 3.Repair and replacement parts. (a) Repair and replacement parts, 
42.8 	except tires, used for maintenance or repair of farm machinery, logging equipment, and 
42.9 	aquaculture production equipment are exempt, if the part replaces a machinery part 
42.10 	assigned a specific or generic part number by the manufacturer of the machinery.
42.11 	(b) Repair and replacement parts, including tires, used for maintenance or repair of 
42.12 	logging equipment are exempt if the part replaces a machinery part assigned a specific or 
42.13 	generic part number by the manufacturer of the machinery.

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

42.16 	Sec. 12. Minnesota Statutes 2006, section 297A.69, subdivision 4, is amended to read:
42.17 		Subd. 4.Machinery, equipment, and fencing. The following machinery, 
42.18 	equipment, and fencing is exempt:
42.19 	(1) farm machinery;
42.20 	(2) logging equipment, including chain saws used for commercial logging;
42.21 	(3) fencing used for the containment of farmed cervidae, as defined in section 
42.22 	35.153, subdivision 3 livestock as defined in section 17A.03, subdivision 5; 
42.23 	(4) primary and backup generator units used to generate electricity for the purpose of 
42.24 	operating farm machinery, aquacultural production equipment, or logging equipment, or 
42.25 	providing light or space heating necessary for the production of livestock, dairy animals, 
42.26 	dairy products, or poultry and poultry products; and
42.27 	(5) aquaculture production equipment.

42.28 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
42.29 	January 1, 2007.

42.30 	Sec. 13. Minnesota Statutes 2006, section 297A.70, subdivision 8, is amended to read:
42.31 		Subd. 8.Regionwide public safety radio communication system; products and 
42.32 	services. Products and services including, but not limited to, end user equipment used 
43.1 	for construction, ownership, operation, maintenance, and enhancement of the backbone 
43.2 	system of the regionwide public safety radio communication system established under 
43.3 	sections 403.21 to 403.34 403.40, are exempt. For purposes of this subdivision, backbone 
43.4 	system is defined in section 403.21, subdivision 9. This subdivision is effective for 
43.5 	purchases, sales, storage, use, or consumption for use in the first and second phases of the 
43.6 	system, as defined in section 403.21, subdivisions 3, 10, and 11, and that portion of the 
43.7 	third phase of the system that is located in the southeast district of the State Patrol and 
43.8 	the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system 
43.9 	that is located in Itasca County.

43.10 	Sec. 14. Minnesota Statutes 2006, section 297A.71, is amended by adding a 
43.11 	subdivision to read:
43.12 		Subd. 40.Commuter rail; material, supplies, and equipment. Materials and 
43.13 	supplies used or consumed in, and equipment incorporated into, the construction or 
43.14 	improvement of a commuter rail transportation system operated under sections 174.80 
43.15 	to 174.90, are exempt. This exemption includes railroad cars and engines and related 
43.16 	equipment.

43.17 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
43.18 	December 31, 2006.

43.19 	Sec. 15. Minnesota Statutes 2006, section 297F.09, subdivision 10, is amended to read:
43.20 		Subd. 10.Accelerated tax payment; cigarette or tobacco products distributor.
 43.21 	A cigarette or tobacco products distributor having a liability of $120,000 or more during a 
43.22 	fiscal year ending June 30, shall remit the June liability for the next year in the following 
43.23 	manner:
43.24 	(a) Two business days before June 30 of the year, the distributor shall remit the 
43.25 	actual May liability and 7830 percent of the estimated June liability to the commissioner 
43.26 	and file the return in the form and manner prescribed by the commissioner.
43.27 	(b) On or before August 18 of the year, the distributor shall submit a return showing 
43.28 	the actual June liability and pay any additional amount of tax not remitted in June. A 
43.29 	penalty is imposed equal to ten percent of the amount of June liability required to be paid 
43.30 	in June, less the amount remitted in June. However, the penalty is not imposed if the 
43.31 	amount remitted in June equals the lesser of:
43.32 	(1) 7830 percent of the actual June liability; or
43.33 	(2) 7830 percent of the preceding May's liability.

44.1 	EFFECTIVE DATE. This section is effective beginning with June 2008 tax 
44.2 	liabilities.

44.3 	Sec. 16. Minnesota Statutes 2006, section 297G.09, subdivision 9, is amended to read:
44.4 		Subd. 9.Accelerated tax payment; penalty. A person liable for tax under this 
44.5 	chapter having a liability of $120,000 or more during a fiscal year ending June 30, shall 
44.6 	remit the June liability for the next year in the following manner:
44.7 	(a) Two business days before June 30 of the year, the taxpayer shall remit the actual 
44.8 	May liability and 7830 percent of the estimated June liability to the commissioner and file 
44.9 	the return in the form and manner prescribed by the commissioner.
44.10 	(b) On or before August 18 of the year, the taxpayer shall submit a return showing 
44.11 	the actual June liability and pay any additional amount of tax not remitted in June. A 
44.12 	penalty is imposed equal to ten percent of the amount of June liability required to be paid 
44.13 	in June less the amount remitted in June. However, the penalty is not imposed if the 
44.14 	amount remitted in June equals the lesser of:
44.15 	(1) 7830 percent of the actual June liability; or
44.16 	(2) 7830 percent of the preceding May liability.

44.17 	EFFECTIVE DATE. This section is effective beginning with June 2008 tax 
44.18 	liabilities.

44.19 	Sec. 17. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991, 
44.20 	chapter 291, article 8, section 22, and Laws 1998, chapter 389, article 8, section 25, and 
44.21 	Laws 2003, First Special Session chapter 21, article 8, section 11, is amended to read:
44.22 		Subd. 2. Notwithstanding Minnesota Statutes, Section 477A.016, or any other law, 
44.23 	ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance, 
44.24 	impose an additional sales tax of up to one and one-half two and one-quarter percent on 
44.25 	sales transactions which are described in Minnesota Statutes 2000, Section 297A.01, 
44.26 	Subdivision 3, Clause (c). When the city council determines that the taxes imposed 
44.27 	under this subdivision and under Laws 1998, chapter 389, article 8, section 26 at a rate 
44.28 	of one-half of one percent have produced revenue sufficient to pay (1) the debt service 
44.29 	on bonds in a principal amount of $8,000,000 issued for capital improvements to the 
44.30 	Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds 
44.31 	originally issued in the principal amount of $4,970,000 to finance capital improvements to 
44.32 	the Great Lakes Aquarium since the imposition of the taxes at the rate of one and one-half 
44.33 	percent, the rate of the tax under this subdivision is reduced to by one-half of one percent. 
44.34 	The imposition of this tax shall not be subject to voter referendum under either state law 
45.1 	or city charter provisions. When the city council determines that the taxes imposed under 
45.2 	this subdivision at a rate of three-quarters of one percent and other sources of revenue 
45.3 	produce revenue sufficient to pay debt service on bonds in the principal amount up to 
45.4 	$37,931,000 plus issuance and discount costs, issued for capital improvements at the 
45.5 	Duluth Entertainment Convention Center, which include a new arena, the rate of tax under 
45.6 	this subdivision shall be reduced by three-quarters of one percent.

45.7 	EFFECTIVE DATE. This section is effective the day after the governing body of 
45.8 	the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section 
45.9 	645.021, subdivisions 2 and 3.

45.10 	Sec. 18. Laws 1993, chapter 375, article 9, section 45, subdivision 2, as amended by 
45.11 	Laws 1997, chapter 231, article 7, section 36, is amended to read:
45.12 		Subd. 2.Use of revenues. (a) Revenues received from taxes authorized by 
45.13 	subdivision 1 shall be used by Cook county to pay the cost of collecting the tax and to pay 
45.14 	all or a portion of the costs of expanding and improving the health care facility located 
45.15 	in the county and known as North Shore hospital. Authorized costs include, but are not 
45.16 	limited to, securing or paying debt service on bonds or other obligations issued to finance 
45.17 	the expansion and improvement of North Shore hospital. The total capital expenditures 
45.18 	payable from bond proceeds, excluding investment earnings on bond proceeds and tax 
45.19 	revenues, shall not exceed $4,000,000.
45.20 	(b) Additional revenues received from taxes authorized by subdivision 1 may be 
45.21 	used by Cook county to pay all or a portion of the costs of betterment of North Shore 
45.22 	care center and providing additional improvements to North Shore hospital. Authorized 
45.23 	costs include, but are not limited to, securing or paying debt service on bonds or other 
45.24 	obligations issued to finance the remodeling of North Shore care center and additional 
45.25 	improvements to North Shore hospital. The total capital expenditures payable from bond 
45.26 	proceeds, excluding investment earnings on bond proceeds and tax revenues, shall not 
45.27 	exceed $2,200,000.
45.28 	(c) If approved by the voters at a special election held before December 31, 2007, 
45.29 	additional revenues received from taxes authorized by subdivision 1 may be used by Cook 
45.30 	County to pay for the following projects:
45.31 	(1) construction and improvements to a county community center and recreation 
45.32 	area, including, but not limited to, improvements and additions to the skateboard park, 
45.33 	hockey rink, ball fields, community center addition, county parking area, tennis courts, 
45.34 	and all associated improvements;
45.35 	(2) construction and improvement to the Grand Marais pool; and
46.1 	(3) construction and improvement to the Grand Marais Public Library.
46.2 	Authorized expenses include, but are not limited to, paying construction expenses 
46.3 	related to these improvements, and paying debt service on bonds or other obligations 
46.4 	issued to finance acquisition and construction of these improvements.

46.5 	Sec. 19. Laws 1993, chapter 375, article 9, section 45, subdivision 3, as amended by 
46.6 	Laws 1997, chapter 231, article 7, section 37, is amended to read:
46.7 		Subd. 3.Expiration of taxing authority and expenditure limitation. The 
46.8 	authority granted by subdivision 1 to Cook county to impose a sales tax shall expire 
46.9 	when the principal and interest on any bonds or obligations issued under subdivision 
46.10 	4, paragraph (a), to finance the expansion and improvement of North Shore hospital 
46.11 	described in subdivision 2, paragraph (a), have been paid, or at an earlier time as the 
46.12 	county shall, by resolution, determine at the later of (1) 20 years, or (2) when the county 
46.13 	determines that the amount of revenues received is sufficient to pay for the principal and 
46.14 	interest on any bonds or obligations issued to finance the projects in subdivision 2. Any 
46.15 	funds remaining after completion of the improvements and retirement or redemption of 
46.16 	the bonds may be placed in the general fund of the county.

46.17 	Sec. 20. Laws 1993, chapter 375, article 9, section 45, subdivision 4, as amended by 
46.18 	Laws 1997, chapter 231, article 7, section 38, is amended to read: 
46.19 		Subd. 4.Bonds. (a) Cook county may issue general obligation bonds in an amount 
46.20 	not to exceed $4,000,000 for the expansion and improvement of North Shore hospital.
46.21 	(b) Additionally, Cook county may issue general obligation bonds in an amount 
46.22 	not to exceed $2,200,000 for the betterment of North Shore care center and additional 
46.23 	improvements to North Shore hospital.
46.24 	(c) The bonds may be issued without election under Minnesota Statutes, chapter 
46.25 	475, on the question of issuance of the bonds or a property tax to pay them. The debt 
46.26 	represented by the bonds shall not be included in computing any debt limitations applicable 
46.27 	to Cook county, and the levy of taxes required by Minnesota Statutes, section 475.61, to 
46.28 	pay principal of and interest on the bonds shall not be subject to any levy limitation or be 
46.29 	included in computing or applying any levy limitation applicable to the county.
46.30 	(d) Cook County may issue bonds under Minnesota Statutes, chapter 475, to pay 
46.31 	capital and administrative expenses for the improvements authorized in subdivision 2, 
46.32 	paragraph (c), in an amount that does not exceed $14,000,000. An election to approve the 
46.33 	bonds under Minnesota Statutes, section 475.58, is not required. The issuance of bonds 
46.34 	under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. 
47.1 	The debt represented by the bonds is not included in computing any debt limitation 
47.2 	applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61, 
47.3 	to pay principal and interest on the bonds is not subject to any levy limitation.

47.4 	Sec. 21. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to 
47.5 	read:
47.6 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
47.7 	297A.48, subdivision 1a,477A.016, or any other provision of law, ordinance, or city 
47.8 	charter, if approved by the city voters at the first municipal general election held after the 
47.9 	date of final enactment of this act or at a special election held November 2, 1999, the city 
47.10 	of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent 
47.11 	for the purposes specified in subdivision 3. The provisions of Minnesota Statutes, section 
47.12 	297A.48 297A.99, govern the imposition, administration, collection, and enforcement of 
47.13 	the tax authorized under this subdivision.

47.14 	Sec. 22. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to 
47.15 	read:
47.16 		Subd. 3.Use of revenues. (a) Revenues received from taxes authorized by 
47.17 	subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to 
47.18 	pay for construction and improvement of the following city facilities:
47.19 	(1) streets; and 
47.20 	(2) constructing and equipping the Proctor community activity center.
47.21 	Authorized expenses include, but are not limited to, acquiring property, paying 
47.22 	construction and operating expenses related to the development of an authorized facility, 
47.23 	and paying debt service on bonds or other obligations, including lease obligations, issued 
47.24 	to finance the construction, expansion, or improvement of an authorized facility. The 
47.25 	capital expenses for all projects authorized under this paragraph that may be paid with 
47.26 	these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance 
47.27 	of the bonds.
47.28 	(b) Additional revenues received from taxes authorized by subdivision 1, may be 
47.29 	used by the city to pay for the following capital improvement projects: public utilities, 
47.30 	including water, sanitary sewer, storm sewer, and electric; sidewalks; bikeways and trails; 
47.31 	and parks and recreation.

47.32 	EFFECTIVE DATE. This section is effective the day following final enactment, 
47.33 	upon compliance by the city of Proctor with Minnesota Statutes, section 645.021, 
47.34 	subdivision 3.

48.1 	Sec. 23. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to 
48.2 	read:
48.3 		Subd. 4.Bonding authority. (a) The city may issue bonds under Minnesota 
48.4 	Statutes, chapter 475, to finance the capital expenditure and improvement projects 
48.5 	described in subdivision 3. An election to approve the bonds under Minnesota Statutes, 
48.6 	section 475.58, is not required.
48.7 	(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, 
48.8 	sections 275.60 and 279.61 275.61.
48.9 	(c) The bonds are not included in computing any debt limitation applicable to the 
48.10 	city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
48.11 	and interest on the bonds is not subject to any levy limitation.
48.12 	(d) For projects described in subdivision 3, paragraph (a), the aggregate principal 
48.13 	amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital 
48.14 	expenditures and improvements, may not exceed $3,600,000, plus an amount equal to 
48.15 	the costs related to issuance of the bonds, including interest on the bonds. For projects 
48.16 	described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may 
48.17 	not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds, 
48.18 	including interest on the bonds.
48.19 	(e) The sales and use and excise taxes authorized in this section may be pledged to 
48.20 	and used for the payment of the bonds and any bonds issued to refund them only if the 
48.21 	bonds and any refunding bonds are general obligations of the city.

48.22 	EFFECTIVE DATE. This section is effective the day following final enactment, 
48.23 	upon compliance by the city of Proctor with Minnesota Statutes, section 645.021, 
48.24 	subdivision 3.

48.25 	Sec. 24. Laws 2002, chapter 377, article 12, section 16, subdivision 1, is amended to 
48.26 	read:
48.27 		Subdivision 1.Nonprofit corporation may be established. The city of Thief River 
48.28 	Falls may incorporate or authorize the incorporation of a nonprofit corporation to operate 
48.29 	a community or regional center in the city. A nonprofit corporation incorporated under 
48.30 	this section is exempt from payment of sales and use tax on materials, equipment, and 
48.31 	supplies consumed or incorporated into the construction of the community or regional 
48.32 	center. The exemption under this section applies to purchases by the nonprofit corporation, 
48.33 	a contractor, subcontractor, or builder. 

49.1 	EFFECTIVE DATE. This section is effective retroactively for purchases made 
49.2 	on and after July 1, 2002.

49.3 	Sec. 25. Laws 2005, First Special Session chapter 3, article 5, section 39, is amended 
49.4 	to read:
49.5 	Sec. 39. CITY OF BEMIDJI.
 49.6 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
49.7 	section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to the 
49.8 	approval of the city voters at the general election held on November 5, 2002, and at the 
49.9 	general election held November 7, 2006, the city of Bemidji may impose by ordinance 
49.10 	a sales and use tax of one-half of one percent for the purposes specified in subdivision 
49.11 	2. The provisions of Minnesota Statutes, section 297A.99, govern the imposition, 
49.12 	administration, collection, and enforcement of the tax authorized under this subdivision.
49.13 		Subd. 2.Use of revenues. Revenues received from the tax authorized by 
49.14 	subdivision 1 must be used for the cost of collecting and administering the tax and to pay 
49.15 	for the projects listed in this subdivision:
49.16 	(1) To pay all or part of the capital or administrative costs of the acquisition, 
49.17 	construction, and improvement of parks and trails within the city, as provided for in the 
49.18 	city of Bemidji's parks, open space, and trail system plan, adopted by the Bemidji City 
49.19 	Council on November 21, 2001. Authorized expenses include, but are not limited to, 
49.20 	acquiring property, paying construction expenses related to the development of these 
49.21 	facilities and improvements, and securing and paying debt service on bonds or other 
49.22 	obligations issued to finance acquisition, construction, improvement, or development of 
49.23 	parks and trails within the city of Bemidji.
49.24 	(2) To pay all or part of the city's share of costs for acquisition, design, and 
49.25 	construction of a regional event center, not to exceed $40,000,000 plus any associated 
49.26 	bond costs. Authorized expenses include, but are not limited to, acquiring property, 
49.27 	paying demolition and construction expenses, improving associated infrastructure, and 
49.28 	purchasing furniture, fixtures, and equipment for the regional event center, and securing 
49.29 	and paying debt service on bonds or other obligations issued to finance the regional event 
49.30 	center project.
49.31 		Subd. 3.Bonds. (a) Pursuant to the approval of the city voters at the general 
49.32 	election held on November 5, 2002, the city of Bemidji may issue, without an additional 
49.33 	election, general obligation bonds of the city in an amount not to exceed $9,826,000 to 
49.34 	pay capital and administrative expenses for the acquisition, construction, improvement, 
49.35 	and development of parks and trails as specified in subdivision 2. The debt represented by 
50.1 	the bonds must not be included in computing any debt limitations applicable to the city, 
50.2 	and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal 
50.3 	of any interest on the bonds must not be subject to any levy limitations or be included in 
50.4 	computing or applying any levy limitation applicable to the city.
50.5 	(b) Pursuant to the approval of the city voters at the general election held on 
50.6 	November 7, 2006, the city of Bemidji may issue, without an additional election, general 
50.7 	obligation bonds of the city in an amount not to exceed $40,000,000 to pay capital and 
50.8 	administrative expenses for the acquisition, construction, improvement, and development 
50.9 	of the regional event center specified in subdivision 2. The debt represented by the bonds 
50.10 	must not be included in computing any debt limitations applicable to the city, and the levy 
50.11 	of taxes required by Minnesota Statutes, section 475.61, to pay the principal of any interest 
50.12 	on the bonds must not be subject to any levy limitations or be included in computing or 
50.13 	applying any levy limitation applicable to the city.
50.14 		Subd. 4.Termination of tax. The tax imposed under subdivision 1 expires 
50.15 	when the Bemidji City Council determines that the amount described in subdivision 3, 
50.16 	paragraph (a), has been received from the tax to finance the capital and administrative 
50.17 	costs for acquisition, construction, improvement, and development of parks and trails and 
50.18 	to repay or retire at maturity the principal, interest, and premium due on any bonds issued 
50.19 	for the park and trail improvements under subdivision 3, paragraph (a), plus the earlier 
50.20 	of (1) 30 years, or (2) when the city council first determines that the additional revenues 
50.21 	received from the extension of the tax equals or exceeds the amount authorized to be spent 
50.22 	for the regional event center under subdivision 2, clause (2). Any funds remaining after 
50.23 	completion of the park and trail improvements authorized projects and retirement or 
50.24 	redemption of the bonds may be placed in the general fund of the city. The tax imposed 
50.25 	under subdivision 1 may expire at an earlier time if the city so determines by ordinance.

50.26 	EFFECTIVE DATE. This section is effective the day after compliance by the 
50.27 	governing body of the city of Bemidji and its chief clerical officer with Minnesota 
50.28 	Statutes, section 645.021, subdivisions 2 and 3.

50.29 	Sec. 26. CITY OF CLEARWATER; TAXES AUTHORIZED.
 50.30 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
50.31 	477A.016, or any other provision of law, ordinance, or city charter, pursuant to the 
50.32 	approval of the voters on November 7, 2006, the city of Clearwater may impose by 
50.33 	ordinance a sales and use tax of up to one-half of one percent for the purposes specified in 
50.34 	subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota 
51.1 	Statutes, section 297A.99, govern the imposition, administration, collection, and 
51.2 	enforcement of the tax authorized under this subdivision.
51.3 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
51.4 	477A.016, or any other provision of law, ordinance, or city charter, the city of Clearwater 
51.5 	may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up 
51.6 	to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person 
51.7 	engaged within the city in the business of selling motor vehicles at retail.
51.8 		Subd. 3.Use of revenues. The proceeds of the tax imposed under this section shall 
51.9 	be used to pay for the costs of acquisition, construction, improvement, and development 
51.10 	of regional parks and trails, a pedestrian bridge, and land and buildings for a community 
51.11 	and recreation center.
51.12 		Subd. 4.Bonding authority. The city of Clearwater may issue bonds in an amount 
51.13 	not to exceed $15,000,000 under Minnesota Statutes, chapter 475, to finance the capital 
51.14 	expenditures and improvements authorized by the referendum under subdivision 3. An 
51.15 	election to approve the bonds under Minnesota Statutes, section 475.59, is not required. 
51.16 	The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section 
51.17 	275.60 or 275.61. The debt represented by the bonds must not be included in computing 
51.18 	any debt limitations applicable to the city, and the levy of taxes required by Minnesota 
51.19 	Statutes, section 475.61, to pay the principal or any interest on the bonds must not be 
51.20 	subject to any levy limitation.
51.21 		Subd. 5.Termination of tax. The tax authorized under subdivision 1 terminates at 
51.22 	the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the 
51.23 	city council determines that sufficient funds have been raised from the tax to finance the 
51.24 	capital and administrative costs of the improvements described in subdivision 3, plus the 
51.25 	additional amount needed to pay the costs related to issuance of bonds under subdivision 
51.26 	4, including interest on the bonds. Any funds remaining after completion of the projects 
51.27 	specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may 
51.28 	be placed in the general fund of the city. The tax imposed under subdivision 1 may expire 
51.29 	at an earlier time if the city so determines by ordinance.

51.30 	EFFECTIVE DATE. This section is effective the day after compliance by the 
51.31 	governing body of the city of Clearwater with Minnesota Statutes, section 645.021, 
51.32 	subdivisions 2 and 3.

51.33 	Sec. 27. CITY OF CLOQUET; TAXES AUTHORIZED.
 51.34 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
51.35 	477A.016, or any other provision of law, ordinance, or city charter, if approved by the 
52.1 	voters pursuant to Minnesota Statutes, section 297A.99, or at a special election held for 
52.2 	this purpose, the city of Cloquet may impose by ordinance a sales and use tax of up to 
52.3 	one-half of one percent for the purposes specified in subdivision 3. Except as provided in 
52.4 	this section, the provisions of Minnesota Statutes, section 297A.99, govern the imposition, 
52.5 	administration, collection, and enforcement of the tax authorized under this subdivision.
52.6 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
52.7 	477A.016, or any other provision of law, ordinance, or city charter, the city of Cloquet 
52.8 	may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up 
52.9 	to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person 
52.10 	engaged within the city in the business of selling motor vehicles at retail.
52.11 		Subd. 3.Use of revenues. Revenues received from taxes authorized by subdivisions 
52.12 	1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for 
52.13 	the following projects: construction and completion of park improvement projects, 
52.14 	including, but not limited to, reconstruction of a community swimming pool complex and 
52.15 	all associated improvements; St. Louis River Riverfront improvements; Veteran's Park 
52.16 	construction and improvements; construction of a community center; improvements to 
52.17 	the Hilltop Park soccer complex, Braun Park baseball complex, Athletic Park, Sunnyside 
52.18 	Park, and Cloquet Area Recreation Center/Pine Valley Arena; and development of 
52.19 	pedestrian trails within the city.
52.20 	Authorized expenses include, but are not limited to, acquiring property and paying 
52.21 	construction expenses related to these improvements, and paying debt service on bonds or 
52.22 	other obligations issued to finance acquisition and construction of these improvements.
52.23 		Subd. 4.Bonding authority. (a) The city may issue bonds under Minnesota 
52.24 	Statutes, chapter 475, to pay capital and administrative expenses for the improvements 
52.25 	described in subdivision 3 in an amount that does not exceed $7,500,000. An election to 
52.26 	approve the bonds under Minnesota Statutes, section 475.58, is not required.
52.27 	(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, 
52.28 	sections 275.60 and 275.61.
52.29 	(c) The debt represented by the bonds is not included in computing any debt 
52.30 	limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section 
52.31 	475.61, to pay principal of and interest on the bonds is not subject to any levy limitation.
52.32 		Subd. 5.Termination of taxes. The taxes imposed under subdivisions 1 and 2 
52.33 	expire at the earlier of (1) 30 years, or (2) when the city council determines that the amount 
52.34 	of revenues received from the taxes to finance the improvements described in subdivision 
52.35 	3 first equals or exceeds $7,500,000, plus the additional amount needed to pay the costs 
52.36 	related to issuance of bonds under subdivision 4, including interest on the bonds. Any 
53.1 	funds remaining after completion of the project and retirement or redemption of the bonds 
53.2 	may be placed in the general fund of the city.  The taxes imposed under subdivisions 1 and 
53.3 	2 may expire at an earlier time if the city so determines by ordinance.

53.4 	EFFECTIVE DATE. This section is effective the day after the governing body of 
53.5 	the city of Cloquet and its chief clerical officer timely comply with Minnesota Statutes, 
53.6 	section 645.021, subdivisions 2 and 3.

53.7 	Sec. 28. CITY OF CROOKSTON; TAXES AUTHORIZED.
 53.8 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
53.9 	477A.016, or any other provision of law, ordinance, or city charter, if approved by the 
53.10 	voters at the next general election or a special election prior to December 31, 2008, the 
53.11 	city of Crookston may impose by ordinance a sales and use tax of up to one-half of one 
53.12 	percent for the purposes specified in subdivision 2. Except as provided in this section, the 
53.13 	provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 
53.14 	collection, and enforcement of the tax authorized under this subdivision.
53.15 		Subd. 2.Use of revenues. Revenues received from taxes authorized by subdivision 
53.16 	1 must be used by the city to pay the cost of collecting the taxes and to pay all or part of 
53.17 	the capital costs of construction of a regional recreation center. Authorized expenses 
53.18 	include, but are not limited to, acquiring property and paying construction expenses 
53.19 	related to these facilities and improvements, and paying debt service on bonds or other 
53.20 	obligations issued to finance acquisition, development, and construction of these facilities 
53.21 	and improvements. The total amount of revenues that the city may raise under subdivision 
53.22 	1 to finance these projects is limited to $10,000,000 plus any associated bond costs.
53.23 		Subd. 3.Bonding authority. Pursuant to the approval of the city voters to impose 
53.24 	the tax authorized under subdivision 1, the city may issue, without an additional election, 
53.25 	general obligation bonds of the city in an amount not to exceed $10,000,000 to pay 
53.26 	capital and administrative expenses for the projects described in subdivision 2. The debt 
53.27 	represented by the bonds is not included in computing any debt limitation applicable to the 
53.28 	city, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
53.29 	and interest on the bonds is not subject to any levy limitation or be included in computing 
53.30 	or applying any levy limitation applicable to the city.
53.31 		Subd. 5.Termination of taxes. The taxes imposed under subdivision 1 expire when 
53.32 	the Crookston city council determines that the amount of revenues received from the taxes 
53.33 	to finance the projects described in subdivision 2 first equals or exceeds $10,000,000, 
53.34 	plus the additional amount needed to pay the costs related to issuance of bonds under 
53.35 	subdivision 3, including interest on the bonds. Any funds remaining after completion of 
54.1 	the projects and retirement or redemption of the bonds may be placed in the general fund 
54.2 	of the city.  The taxes imposed under subdivision 1 may expire at an earlier time if the 
54.3 	city so determines by ordinance.

54.4 	EFFECTIVE DATE. This section is effective the day after the governing body of 
54.5 	the city of Crookston and its chief clerical officer comply with Minnesota Statutes, section 
54.6 	645.021, subdivisions 2 and 3.

54.7 	Sec. 29. COOK COUNTY; LODGING AND ADMISSIONS TAXES.
 54.8 		Subdivision 1.Lodging tax. Notwithstanding Minnesota Statutes, section 
54.9 	477A.016, or any other provision of law, ordinance, or city charter, the Board of 
54.10 	Commissioners of Cook County may impose, by ordinance, a tax of up to one percent on 
54.11 	the gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190. 
54.12 	This tax is in addition to any tax imposed under Minnesota Statutes, section 469.190, and 
54.13 	the total tax imposed under that section and this provision must not exceed four percent. 
54.14 		Subd. 2.Admissions and recreation tax. Notwithstanding Minnesota Statutes, 
54.15 	section 477A.016, or any other provision of law, ordinance, or city charter, the Board of 
54.16 	Commissioners of Cook County may impose, by ordinance, a tax of up to three percent on 
54.17 	admissions to entertainment and recreational facilities and rental of recreation equipment. 
54.18 	In its ordinance, the Board of Commissioners of Cook County may provide that 
54.19 	entities exempt from the tax imposed under Minnesota Statutes, section 297A.70, are 
54.20 	not required to collect the taxes in subdivisions 1 and 2. The Board of Commissioners 
54.21 	of Cook County may also create lodging districts smaller than the county in which to 
54.22 	impose the tax.
54.23 		Subd. 3.Use of taxes. The taxes imposed in subdivisions 1 and 2 must be used 
54.24 	to fund a new Cook County Event and Visitors Bureau as established by the Board of 
54.25 	Commissioners of Cook County. The Board of Commissioners of Cook County must 
54.26 	annually review the budget of the Cook County Event and Visitors Bureau.
54.27 		Subd. 4.Termination of taxes. The taxes authorized under subdivisions 1 and 2 
54.28 	terminate ten years after the date of initial imposition of the taxes.
54.29 		Subd. 5.Cook County Event and Visitors Bureau. (a) The Cook County Event 
54.30 	and Visitors Bureau shall be governed by a 14-member board of directors composed of:
54.31 	(1) four directors to be appointed by the Grand Marais Area Tourism Association;
54.32 	(2) two directors to be appointed by the Gunflint Trail Association;
54.33 	(3) seven directors to be appointed by the Lutsen-Tofte Tourism Association; and
54.34 	(4) one nonvoting member appointed by Grand Portage.
55.1 	(b) The Cook County Event and Visitors Bureau may adjust its membership upon a 
55.2 	vote of approval by at least nine members.

55.3 	EFFECTIVE DATE. This section is effective for sales and purchases after June 
55.4 	30, 2007.

55.5 	Sec. 30. CITY OF ELY; SALES AND USE TAX.
 55.6 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
55.7 	section 477A.016, or any other provision of law, ordinance, or city charter, if approved by 
55.8 	the voters pursuant to Minnesota Statutes, section 297A.99, the city of Ely may impose by 
55.9 	ordinance a sales and use tax of up to one percent for the purposes specified in subdivision 
55.10 	3. Except as otherwise provided in this section, the provisions of Minnesota Statutes, 
55.11 	section 297A.99, govern the imposition, administration, collection, and enforcement of 
55.12 	the tax authorized under this subdivision.
55.13 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
55.14 	477A.016, or any other provision of law, ordinance, or city charter, the city of Ely may 
55.15 	impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up to 
55.16 	$20 per motor vehicle, as defined by ordinance, purchased or acquired from any person 
55.17 	engaged within the city in the business of selling motor vehicles at retail.
55.18 		Subd. 3.Use of revenues. The proceeds of the tax imposed under this section 
55.19 	must be used by the city of Ely to pay the costs of collecting and administering the tax 
55.20 	and to pay the following costs:
55.21 	(1) establishment of an entry to the Boundary Waters that includes the chamber of 
55.22 	commerce, visitor center, and related facilities;
55.23 	(2) construction of a pool facility that would support Independent School District 
55.24 	No. 696 and Ely Bloomenson Community Hospital;
55.25 	(3) infrastructure improvement related to the expansion of the Ely Bloomenson 
55.26 	Community Hospital; and
55.27 	(4) community center use transition to establish the Boundary Waters Historical 
55.28 	Center and provide for compliance with the Americans with Disabilities Act.
55.29 		Subd. 4.Bonding authority. (a) If the tax authorized under subdivision 1 is 
55.30 	approved by the voters, the city of Ely may issue bonds under Minnesota Statutes, 
55.31 	chapter 475, to pay the capital and administrative expenses for the improvement projects 
55.32 	authorized under subdivision 2. The total amount of bonds issued for the projects listed in 
55.33 	subdivision 3 may not exceed $15,000,000 in aggregate. An election to approve the bonds 
55.34 	under Minnesota Statutes, section 475.58, is not required.
56.1 	(b) The debt represented by the bonds is not included in computing any debt 
56.2 	limitation applicable to the city of Ely, and the levy of taxes under Minnesota Statutes, 
56.3 	section 475.61, to pay the principal of and interest on the bonds is not subject to any 
56.4 	levy limitation. 
56.5 		Subd. 5.Termination of tax. The tax authorized under this section expires when 
56.6 	the city council determines that the taxes imposed under this subdivision have raised 
56.7 	revenue sufficient to pay the bonds authorized in subdivision 3, including administrative 
56.8 	costs and interest.
56.9 	Any funds remaining after completion of the projects and retirement or redemption 
56.10 	of the bonds may be placed in the general fund of the city. The taxes imposed under 
56.11 	subdivisions 1 and 2 may expire at an earlier time if the city so determines by ordinance.

56.12 	EFFECTIVE DATE. This section is effective the day after compliance by the 
56.13 	governing body of the city of Ely with Minnesota Statutes, section 645.021, subdivision 3.

56.14 	Sec. 31. MINNETONKA WATER TREATMENT FACILITY.
 56.15 	Capital equipment used in or incorporated into the construction of a water treatment 
56.16 	facility owned by the city of Minnetonka is exempt from sales tax regardless of whether 
56.17 	purchased by the owner, contractor, subcontractor, or builder. The tax must be imposed 
56.18 	and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, 
56.19 	applied and then refunded to the city of Minnetonka in the manner provided in Minnesota 
56.20 	Statutes, section 297A.75.

56.21 	EFFECTIVE DATE. This section is effective for sales and purchases made before 
56.22 	December 31, 2006.

56.23 	Sec. 32. CITY OF NORTH MANKATO; TAXES AUTHORIZED.
 56.24 		Subdivision 1.Sales and use tax authorized.  Notwithstanding Minnesota Statutes, 
56.25 	section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to 
56.26 	the approval of the voters on November 7, 2006, the city of North Mankato may impose 
56.27 	by ordinance a sales and use tax of one-half of one percent for the purposes specified 
56.28 	in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the 
56.29 	imposition, administration, collection, and enforcement of the taxes authorized under 
56.30 	this subdivision. 
56.31 		Subd. 2.Use of revenues.  Revenues received from the tax authorized by 
56.32 	subdivision 1 must be used to pay all or part of the capital costs of the following projects: 
57.1 	(1) the local share of the Trunk Highway 14/County State Aid Highway 41 
57.2 	interchange project; and
57.3 	(2) development of regional parks and hiking and biking trails.
57.4 	The total amount of revenues from the tax in subdivision 1 that may be used to fund 
57.5 	these projects is $4,000,000 plus any associated bond costs.
57.6 		Subd. 3.Bonds.  (a) The city of North Mankato, pursuant to the approval of the 
57.7 	voters at the November 7, 2006, referendum authorizing the imposition of the taxes in 
57.8 	this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and 
57.9 	administrative expenses for the projects described in subdivision 2, in an amount that 
57.10 	does not exceed $4,000,000. A separate election to approve the bonds under Minnesota 
57.11 	Statutes, section 475.58, is not required.
57.12 	(b) The debt represented by the bonds is not included in computing any debt 
57.13 	limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section 
57.14 	475.61, to pay principal and interest on the bonds is not subject to any levy limitation.
57.15 		Subd. 4.Termination of taxes.  The tax imposed under subdivision 1 expires 
57.16 	when the city council determines that the amount of revenues received from the taxes 
57.17 	to pay for the projects under subdivision 2, first equals or exceeds $4,000,000 plus the 
57.18 	additional amount needed to pay the costs related to issuance of bonds under subdivision 
57.19 	3, including interest on the bonds. Any funds remaining after completion of the projects 
57.20 	and retirement or redemption of the bonds shall be placed in a capital facilities and 
57.21 	equipment replacement fund of the city. The tax imposed under subdivision 1 may expire 
57.22 	at an earlier time if the city so determines by ordinance. 

57.23 	EFFECTIVE DATE. This section is effective the day after compliance by the 
57.24 	governing body of the city of North Mankato with Minnesota Statutes, section 645.021, 
57.25 	subdivision 3.

57.26 	Sec. 33. CITY OF WINONA; TAXES AUTHORIZED.
 57.27 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
57.28 	477A.016, or any other provision of law, ordinance, or city charter, if approved by the 
57.29 	voters at a special election held before December 31, 2007, the city of Winona may 
57.30 	impose by ordinance a sales and use tax of up to one-half of one percent for the purpose 
57.31 	specified in subdivision 2. Except as otherwise provided in this section, the provisions of 
57.32 	Minnesota Statutes, section 297A.99, govern the imposition, administration, collection, 
57.33 	and enforcement of the tax authorized under this subdivision.
57.34 		Subd. 2.Use of revenues. The proceeds of the tax imposed under this section shall 
57.35 	be used to pay the city-borne costs for the construction of a street connection from the city 
58.1 	of Winona to Minnesota State Highways 61 and 43. The construction will provide access 
58.2 	to the city's newly built industrial park and additional access to a hospital.
58.3 		Subd. 3.Bonding authority. The city of Winona may issue bonds in an amount 
58.4 	not to exceed $8,000,000 under Minnesota Statutes, chapter 475, to finance the capital 
58.5 	expenditures under subdivision 2. An election to approve the bonds under Minnesota 
58.6 	Statutes, section 475.58, is not required. The issuance of bonds under this subdivision is 
58.7 	not subject to Minnesota Statutes, section 275.60 or 275.61. The debt represented by the 
58.8 	bonds must not be included in computing any debt limitations applicable to the city, and 
58.9 	the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or 
58.10 	any interest on the bonds must not be subject to any levy limitation.
58.11 		Subd. 4.Termination of tax. The tax authorized under subdivision 1 terminates 
58.12 	at the earlier of: (1) five years after the date of initial imposition of the tax; or (2) when 
58.13 	the city council determines that sufficient funds have been raised from the tax to finance 
58.14 	the capital and administrative costs of the project described in subdivision 2, plus the 
58.15 	additional amount needed to pay the costs related to issuance of bonds under subdivision 
58.16 	3, including interest on the bonds. Any funds remaining after completion of the project 
58.17 	specified in subdivision 2 and retirement or redemption of the bonds in subdivision 3 may 
58.18 	be placed in the general fund of the city. The tax imposed under subdivision 1 may expire 
58.19 	at an earlier time if the city so determines by ordinance.

58.20 	EFFECTIVE DATE. This section is effective the day after compliance by 
58.21 	the governing body of the city of Winona with Minnesota Statutes, section 645.021, 
58.22 	subdivisions 2 and 3.

58.23 	ARTICLE 5
58.24 	PROPERTY TAXES

58.25 	Section 1. Minnesota Statutes 2006, section 123B.53, subdivision 5, is amended to read:
58.26 		Subd. 5.Equalized debt service levy. (a) The equalized debt service levy of a 
58.27 	district equals the sum of the first tier equalized debt service levy and the second tier 
58.28 	equalized debt service levy.
58.29 	(b) A district's first tier equalized debt service levy equals the district's first tier debt 
58.30 	service equalization revenue times the lesser of one or the ratio of:
58.31 	(1) the quotient derived by dividing the adjusted debt service  net tax capacity of the 
58.32 	district for the year before the year the levy is certified by the adjusted pupil units in the 
58.33 	district for the school year ending in the year prior to the year the levy is certified; to
58.34 	(2) $3,200.
59.1 	(c) A district's second tier equalized debt service levy equals the district's second tier 
59.2 	debt service equalization revenue times the lesser of one or the ratio of:
59.3 	(1) the quotient derived by dividing the adjusted debt service  net tax capacity of the 
59.4 	district for the year before the year the levy is certified by the adjusted pupil units in the 
59.5 	district for the school year ending in the year prior to the year the levy is certified; to
59.6 	(2) $8,000.

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

59.8 	Sec. 2. Minnesota Statutes 2006, section 126C.01, is amended by adding a subdivision 
59.9 	to read:
59.10 		Subd. 2a.Debt service net tax capacity. A school district's debt service net tax 
59.11 	capacity means the net tax capacity of the taxable property of the district as adjusted by 
59.12 	the commissioner of revenue under section 127A.48, subdivision 17.  The debt service net 
59.13 	tax capacity for any given calendar year must be used to compute the debt service levy 
59.14 	limitations for levies certified in the succeeding calendar year and aid for the school year 
59.15 	beginning in the second succeeding calendar year.

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

59.18 	Sec. 3. Minnesota Statutes 2006, section 126C.01, subdivision 3, is amended to read:
59.19 		Subd. 3.Referendum market value. "Referendum market value" means the market 
59.20 	value of all taxable property, excluding property classified as class 2, noncommercial 
59.21 	4c(1), or 4c(4) under section 273.13. The portion of class 2a property consisting of the 
59.22 	house, garage, and surrounding one acre of land of an agricultural homestead is included 
59.23 	in referendum market value. Any class of property, or any portion of a class of property, 
59.24 	that is included in the definition of referendum market value and that has a class rate of 
59.25 	less than one percent under section 273.13 shall have a referendum market value equal 
59.26 	to its net tax capacity multiplied by 100. 

59.27 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
59.28 	in 2008, and thereafter.

59.29 	Sec. 4. Minnesota Statutes 2006, section 127A.48, subdivision 2, is amended to read:
59.30 		Subd. 2.Methodology. In making its annual assessment/sales ratio studies, the 
59.31 	Department of Revenue must use a methodology consistent with the most recent Standard 
59.32 	on Assessment Ratio Studies published by the assessment standards committee of the 
60.1 	International Association of Assessing Officers. The commissioner of revenue shall 
60.2 	supplement this general methodology with specific procedures necessary for execution of 
60.3 	the study in accordance with other Minnesota laws impacting the assessment/sales ratio 
60.4 	study. The commissioner shall document these specific procedures in writing and shall 
60.5 	publish the procedures in the State Register, but these procedures will not be considered 
60.6 	"rules" pursuant to the Minnesota Administrative Procedure Act. When property is 
60.7 	sold and the purchaser changes its use in a manner that would result in a change of 
60.8 	classification of the property, the study must take into account that changed classification 
60.9 	as soon as practicable. For purposes of this section, sections 270.12, subdivision 2, 
60.10 	clause (8), and 278.05, subdivision 4, the commissioner of revenue shall exclude from 
60.11 	the assessment/sales ratio study the sale of any nonagricultural property which does not 
60.12 	contain an improvement, if (1) the statutory basis on which the property's taxable value 
60.13 	as most recently assessed is less than market value as defined in section 273.11, or (2) 
60.14 	the property has undergone significant physical change or a change of use since the most 
60.15 	recent assessment. 

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

60.17 	Sec. 5. Minnesota Statutes 2006, section 127A.48, is amended by adding a subdivision 
60.18 	to read:
60.19 		Subd. 17.Debt service net tax capacity. To calculate each district's debt service 
60.20 	net tax capacity, the commissioner of revenue must recompute the amounts in this section 
60.21 	using an alternative sales ratio comparing the sales price to the estimated market value 
60.22 	of the property.

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

60.25 	Sec. 6. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
60.26 	to read:
60.27 		Subd. 85.Homestead of disabled veteran or surviving spouse. (a) Property 
60.28 	otherwise qualifying for homestead classification under section 273.13 is exempt from 
60.29 	taxation if it is the homestead of a military veteran, as defined in section 197.447, who 
60.30 	has a total and permanent service-connected disability. To qualify for exemption under 
60.31 	this subdivision, the veteran must have been honorably discharged from the United 
60.32 	States armed forces, as indicated by United States Government Form DD214 or other 
61.1 	official military discharge papers, and must be certified by the United States Veterans 
61.2 	Administration as having a total (100 percent) and permanent service-connected disability.
61.3 	(b) If a disabled veteran qualifying for exemption under paragraph (a) predeceases 
61.4 	the veteran's spouse, and if upon the death of the veteran the spouse holds the legal or 
61.5 	beneficial title to the homestead and permanently resides there, the exemption from 
61.6 	taxation shall carry over to the benefit of the veteran's spouse until the spouse remarries or 
61.7 	sells or otherwise disposes of the property.
61.8 	(c) In the case of an agricultural homestead, only the portion of the property 
61.9 	consisting of the house and garage and immediately surrounding one acre of land qualifies 
61.10 	for exemption under this subdivision.
61.11 	(d) To first qualify for exemption under this section, a property owner must apply 
61.12 	to the assessor by July 1 of the assessment year, except that for assessment year 2007 
61.13 	application may be made until October 1, 2007. The application must be accompanied by 
61.14 	supporting documentation as required by the assessor. Once a property has been accepted 
61.15 	for exemption under this section, the property continues to qualify as long as it meets 
61.16 	the requirements of this section.

61.17 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
61.18 	in 2008, and thereafter.

61.19 	Sec. 7. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
61.20 	to read:
61.21 		Subd. 86.Modular homes used as models by dealers. (a) A modular home 
61.22 	is exempt if it:
61.23 	(1) is owned by a licensed manufactured home dealer and is located on land owned 
61.24 	or leased by that dealer;
61.25 	(2) is a single-family model home;
61.26 	(3) is not available for sale and is used exclusively as a model;
61.27 	(4) is not permanently connected to any utilities except electricity; and
61.28 	(5) is situated on a temporary foundation.
61.29 	(b) The exemption under this subdivision is allowable for up to five assessment 
61.30 	years after the date it becomes located on the property, provided that the modular home 
61.31 	continues to meet all of the criteria under this subdivision each year. The owner of a 
61.32 	modular model home must notify the county assessor within 60 days that it has been 
61.33 	constructed or located on the property and must again notify the assessor if the modular 
61.34 	home ceases to meet any of the criteria. If more than one modular home is constructed or 
62.1 	situated on a property, the owner must notify the assessor within 60 days for each of the 
62.2 	models placed on the property.
62.3 	(c) For purposes of this subdivision, a "modular home" means a building or 
62.4 	structural unit that has been in whole or substantial part manufactured or constructed at an 
62.5 	off-site location to be wholly or partially assembled on-site as a single family dwelling. 
62.6 	Construction of the modular home must comply with applicable standards adopted in 
62.7 	Minnesota Rules authorized under Minnesota Statutes, chapter 16B. A modular home does 
62.8 	not include a structure subject to the requirements of the National Manufactured Home 
62.9 	Construction and Safety Standards Act of 1974 or prefabricated buildings, as defined in 
62.10 	Minnesota Statutes, section 327.31, subdivision 6.

62.11 	EFFECTIVE DATE. This section is effective for assessment year 2007 and 
62.12 	thereafter, for taxes payable in 2008 and thereafter. The five-year assessment time period 
62.13 	begins with the 2007 assessment for a modular model home currently situated provided 
62.14 	it meets all of the criteria and the county assessor is notified within 90 days of the day 
62.15 	following final enactment.

62.16 	Sec. 8. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
62.17 	to read:
62.18 		Subd. 87.Apprenticeship training facilities. Property used to operate a state or 
62.19 	federally approved apprenticeship program is exempt.

62.20 	EFFECTIVE DATE. This section is effective retroactively for property taxes 
62.21 	payable in 2006 and thereafter.

62.22 	Sec. 9. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
62.23 	to read:
62.24 		Subd. 88.Monosloped roofs for feedlots and manure storage areas. A 
62.25 	monosloped, single-pitched roof installed over a feedlot or manure storage area to prevent 
62.26 	runoff is exempt.

62.27 	EFFECTIVE DATE. This section is effective for property taxes levied in 2007, 
62.28 	payable in 2008, and thereafter.

62.29 	Sec. 10. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
62.30 	to read:
62.31 		Subd. 89.Electric generation facility; personal property. (a) Notwithstanding 
62.32 	subdivision 9, clause (a), attached machinery and other personal property which is part of 
63.1 	a simple-cycle combustion-turbine electric generation facility that exceeds 150 megawatts 
63.2 	of installed capacity and that meets the requirements of this subdivision is exempt. At 
63.3 	the time of construction, the facility must:
63.4 	(1) utilize natural gas as a primary fuel;
63.5 	(2) be owned by an electric generation and transmission cooperative;
63.6 	(3) be located within one mile of an existing 16-inch natural gas pipeline and a 
63.7 	69-kilovolt and a 230-kilovolt high-voltage electric transmission line;
63.8 	(4) be designed to provide peaking, emergency backup, or contingency services;
63.9 	(5) have received a certificate of need under section 216B.243 demonstrating 
63.10 	demand for its capacity; and
63.11 	(6) have received by resolution the approval from the governing bodies of the county 
63.12 	and the city in which the proposed facility is to be located for the exemption of personal 
63.13 	property under this subdivision.
63.14 	(b) Construction of the facility must be commenced after January 1, 2008, and 
63.15 	before January 1, 2012. Property eligible for this exemption does not include electric 
63.16 	transmission lines and interconnections or gas pipelines and interconnections appurtenant 
63.17 	to the property or the facility.

63.18 	EFFECTIVE DATE. This section is effective for property taxes levied in 2007, 
63.19 	payable in 2008, and thereafter.

63.20 	Sec. 11. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
63.21 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 
63.22 	whenever any real estate is sold for a consideration in excess of $1,000, whether by 
63.23 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
63.24 	grantee or the legal agent of either shall file a certificate of value with the county 
63.25 	auditor in the county in which the property is located when the deed or other document 
63.26 	is presented for recording. Contract for deeds are subject to recording under section 
63.27 	507.235, subdivision 1. Value shall, in the case of any deed not a gift, be the amount of 
63.28 	the full actual consideration thereof, paid or to be paid, including the amount of any lien 
63.29 	or liens assumed. The items and value of personal property transferred with the real 
63.30 	property must be listed and deducted from the sale price. The certificate of value shall 
63.31 	include the classification to which the property belongs for the purpose of determining 
63.32 	the fair market value of the property, and shall include any proposed change in use of the 
63.33 	property known to the person filing the certificate that could change the classification 
63.34 	of the property. The certificate shall include financing terms and conditions of the sale 
63.35 	which are necessary to determine the actual, present value of the sale price for purposes 
64.1 	of the sales ratio study. If the property is being acquired as part of a like-kind exchange 
64.2 	under section 1031 of the Internal Revenue Code of 1986, as amended through December 
64.3 	31, 2006, that must be indicated on the certificate. The commissioner of revenue shall 
64.4 	promulgate administrative rules specifying the financing terms and conditions which must 
64.5 	be included on the certificate. Pursuant to the authority of the commissioner of revenue in 
64.6 	section 270C.306, the certificate of value must include the Social Security number or the 
64.7 	federal employer identification number of the grantors and grantees. The identification 
64.8 	numbers of the grantors and grantees are private data on individuals or nonpublic data 
64.9 	as defined in section 13.02, subdivisions 9 and 12, but, notwithstanding that section, the 
64.10 	private or nonpublic data may be disclosed to the commissioner of revenue for purposes of 
64.11 	tax administration. The information required to be shown on the certificate of value is 
64.12 	limited to the information required as of the date of the acknowledgment on the deed or 
64.13 	other document to be recorded.

64.14 	EFFECTIVE DATE. This section is effective for certificates filed after June 30, 
64.15 	2007.

64.16 	Sec. 12. Minnesota Statutes 2006, section 273.11, subdivision 1a, is amended to read:
64.17 		Subd. 1a.Limited market value. In the case of all property classified as 
64.18 	agricultural homestead or nonhomestead, residential homestead or nonhomestead, timber, 
64.19 	or noncommercial seasonal residential recreational, or class 1c homestead resort,  the 
64.20 	assessor shall compare the value with the taxable portion of the value determined in 
64.21 	the preceding assessment.
64.22 	For assessment years 2004, 2005, and 2006, the amount of the increase shall not 
64.23 	exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 25 
64.24 	percent of the difference between the current assessment and the preceding assessment.
64.25 	For assessment year 2007, the amount of the increase shall not exceed the greater of 
64.26 	(1) 15 percent of the value in the preceding assessment, or (2) 33 percent of the difference 
64.27 	between the current assessment and the preceding assessment.
64.28 	For assessment year 2008, the amount of the increase shall not exceed the greater of 
64.29 	(1) 15 percent of the value in the preceding assessment, or (2) 50 percent of the difference 
64.30 	between the current assessment and the preceding assessment.
64.31 	This limitation shall not apply to increases in value due to improvements. For 
64.32 	purposes of this subdivision, the term "assessment" means the value prior to any exclusion 
64.33 	under subdivision 16.
64.34 	The provisions of this subdivision shall be in effect through assessment year 2008 
64.35 	as provided in this subdivision.
65.1 	For purposes of the assessment/sales ratio study conducted under section 127A.48, 
65.2 	and the computation of state aids paid under chapters 122A, 123A, 123B, excluding 
65.3 	section 123B.53, 124D, 125A, 126C, 127A, and 477A, market values and net tax 
65.4 	capacities determined under this subdivision and subdivision 16, shall be used.

65.5 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
65.6 	in 2008, and thereafter.

65.7 	Sec. 13. Minnesota Statutes 2006, section 273.111, subdivision 2, is amended to read:
65.8 		Subd. 2.Public policy. The present general system of ad valorem property taxation 
65.9 	in the state of Minnesota does not provide an equitable basis for the taxation of certain 
65.10 	agricultural real property and has resulted in inadequate taxes on some lands and excessive 
65.11 	taxes on others. Therefore, it is hereby declared to be the public policy of this state that 
65.12 	the public interest would best be served by equalizing tax burdens upon implementing 
65.13 	a more realistic and fair system of valuation of agricultural property within this state 
65.14 	through appropriate taxing measures.

65.15 	Sec. 14. Minnesota Statutes 2006, section 273.111, subdivision 6, is amended to read:
65.16 		Subd. 6.Agricultural use. Real property qualifying under subdivision 3 shall be 
65.17 	considered to be in agricultural use provided that annually:
65.18 	(1) in at least one of the three calendar years preceding the assessment year, at least 
65.19 	33-1/3 25 percent of the total family income of the owner is derived therefrom, or and the 
65.20 	total production income including, plus any rental income from the property is $300 plus 
65.21 	$10 per tillable acre in the parcel subject to this section; and
65.22 	(2) it is devoted to the production for sale of agricultural products as defined in 
65.23 	section 273.13, subdivision 23, paragraph (e). 
65.24 	In this subdivision, "total production income" means gross income as reported 
65.25 	for federal income tax purposes on Schedule F for the calendar year ending in the year 
65.26 	preceding the assessment year.
65.27 	Slough, wasteland, and woodland contiguous to or surrounded by land that is entitled 
65.28 	to valuation and tax deferment under this section is considered to be in agricultural use if 
65.29 	under the same ownership and management.

65.30 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
65.31 	in 2008, and thereafter.

65.32 	Sec. 15. Minnesota Statutes 2006, section 273.111, subdivision 14, is amended to read:
66.1 		Subd. 14.Applicability of special assessment provisions. This section shall apply 
66.2 	to special local assessments levied after July 1, 1967, and payable in the years thereafter, 
66.3 	but shall not apply to any special assessments levied at any time by a county or district 
66.4 	court under the provisions of chapter 116A, by a watershed district under chapter 103D, or 
66.5 	by a drainage authority under chapter 103E.

66.6 	EFFECTIVE DATE. This section is effective for special assessments levied after 
66.7 	May 31, 2007, or, as applied to special assessments levied before June 1, 2007, to property 
66.8 	that initially qualifies for valuation under section 273.111, for taxes levied in 2007.

66.9 	Sec. 16. [273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY 
66.10 	TAX LAW.
66.11 		Subdivision 1.Requirements. Real estate is entitled to valuation under this section 
66.12 	only if all of the following requirements are met:
66.13 	(1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13, 
66.14 	subdivisions 22 and 23;
66.15 	(2) the property is at least ten contiguous acres, when the application is filed under 
66.16 	subdivision 2;
66.17 	(3) the owner has filed a completed application for deferment as specified in 
66.18 	subdivision 2 with the county assessor in the county in which the property is located;
66.19 	(4) there are no delinquent taxes on the property; and 
66.20 	(5) a covenant on the land restricts its use as provided in subdivision 2, clause (4).
66.21 		Subd. 2.Application. Application for valuation deferment under this section 
66.22 	must be filed by May 1 of the assessment year.  Any application filed and granted 
66.23 	continues in effect for subsequent years until the property no longer qualifies, provided 
66.24 	that supplemental affidavits under subdivision 6 are timely filed.  The application must 
66.25 	be filed with the assessor of the county in which the real property is located on such 
66.26 	form as may be prescribed by the commissioner of revenue.  The application must be 
66.27 	executed and acknowledged in the manner required by law to execute and acknowledge a 
66.28 	deed and must contain at least the following information and any other information the 
66.29 	commissioner deems necessary:
66.30 	(1) the legal description of the area;
66.31 	(2) the name and address of owner;
66.32 	(3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph (h), 
66.33 	in the case of property classified class 2b, clause (5); or in the case of property classified 
66.34 	1a, 1b, 2a, and 2b, clauses (1) to (3), the application must include a similar document with 
67.1 	the same information as contained in the affidavit under section 273.13, subdivision 23, 
67.2 	paragraph (h); and 
67.3 	(4) a statement of proof from the owner that the land contains a restrictive covenant 
67.4 	limiting its use for the property's surface to that which exists on the date of the application 
67.5 	and limiting its future use to the preparation and removal of the aggregate commercial 
67.6 	deposit under its surface.
67.7 	To qualify under this clause, the covenant must be binding on the owner or the 
67.8 	owner's successor or assignee, and run with the land, except as provided in subdivision 4 
67.9 	allowing for the cancellation of the covenant under certain conditions.
67.10 		Subd. 3.Determination of value. Upon timely application by the owner as 
67.11 	provided in subdivision 2, notwithstanding sections 272.03, subdivision 8, and 273.11, 
67.12 	the value of any qualifying land described in subdivision 2 must be valued as if it were 
67.13 	agricultural property, using a per acre valuation equal to the current year's per acre 
67.14 	valuation of agricultural land in the county.  The assessor shall not consider any additional 
67.15 	value resulting from potential alternative and future uses of the property.  The buildings 
67.16 	located on the land shall be valued by the assessor in the normal manner.
67.17 		Subd. 4.Cancellation of covenant. The covenant required under subdivision 
67.18 	2 may be canceled in two ways:
67.19 	(1) by the owner beginning with the next subsequent assessment year provided 
67.20 	that the additional taxes as determined under subdivision 5 are paid by the owner at the 
67.21 	time of cancellation; and 
67.22 	(2) by the city or town in which the property is located beginning with the next 
67.23 	subsequent assessment year, if the city council or town board:
67.24 	(i) changes the conditional use of the property;
67.25 	(ii) revokes the mining permit; or 
67.26 	(iii) changes the zoning to disallow mining.
67.27 	No additional taxes are imposed on the property under this clause.
67.28 		Subd. 4a.County termination. Within two years of the effective date of this 
67.29 	section, a county may, following notice and public hearing, terminate application of this 
67.30 	section in the county.  The termination is effective upon adoption of a resolution of the 
67.31 	county board. A county has 60 days from receipt of the first application for enrollment 
67.32 	under this section to notify the applicant and any subsequent applicants of the county's 
67.33 	intent to begin the process of terminating application of this section in the county. The 
67.34 	county must act on the termination within six months. Upon termination by a vote of the 
67.35 	county board, all applications received during notification of intent to terminate shall be 
67.36 	deemed void. If the county board does not act on the termination within six months of 
68.1 	notification, all applications for valuation for deferment received shall be deemed eligible 
68.2 	to be enrolled under this section. Following this initial 60-day grace period, a termination 
68.3 	applies prospectively and does not affect property enrolled under this section prior to the 
68.4 	termination date.  A county may reauthorize application of this section by a resolution of 
68.5 	the county board revoking the termination.
68.6 		Subd. 5.Additional taxes. When real property which has been valued and assessed 
68.7 	under this section no longer qualifies, the portion of the land classified under subdivision 
68.8 	1, clause (1), is subject to additional taxes.  The additional tax amount is determined by:
68.9 	(1) computing the difference between (i) the current year's taxes determined in 
68.10 	accordance with subdivision 3, and (ii) an amount as determined by the assessor based 
68.11 	upon the property's current year's estimated market value of like real estate at its highest 
68.12 	and best use and the appropriate local tax rate; and 
68.13 	(2) multiplying the amount determined in clause (1) by the number of years the 
68.14 	land was in the program under this section.
68.15 	The current year's estimated market value as determined by the assessor must not 
68.16 	exceed the market value that would result if the property was sold in an arms-length 
68.17 	transaction and must not be greater than it would have been had the actual bona fide sale 
68.18 	price of the property been used in lieu of that market value.  The additional taxes must be 
68.19 	extended against the property on the tax list for the current year, except that interest or 
68.20 	penalties must not be levied on such additional taxes if timely paid.
68.21 	The additional tax under this subdivision must not be imposed on that portion of the 
68.22 	property which has actively been mined and has been removed from the program based 
68.23 	upon the supplemental affidavits filed under subdivision 6.
68.24 		Subd. 6.Supplemental affidavits; mining activity on land. When any portion 
68.25 	of the property begins to be actively mined, the owner must file a supplemental affidavit 
68.26 	within 60 days from the day any aggregate is removed stating the number of acres of the 
68.27 	property that is actively being mined.  The acres actively being mined shall be (1) valued 
68.28 	and classified under section 273.13, subdivision 24, in the next subsequent assessment 
68.29 	year, and (2) removed from the aggregate resource preservation property tax program 
68.30 	under this section.  The additional taxes under subdivision 5 must not be imposed on 
68.31 	the acres that are actively being mined and have been removed from the program under 
68.32 	this section.
68.33 	Copies of the original affidavit and all supplemental affidavits must be filed with the 
68.34 	county assessor, the local zoning administrator, and the Department of Natural Resources, 
68.35 	Division of Land and Minerals.  A supplemental affidavit must be filed each time a 
68.36 	subsequent portion of the property is actively mined, provided that the minimum acreage 
69.1 	change is five acres, even if the actual mining activity constitutes less than five acres. 
69.2 	Failure to file the affidavits timely shall result in the property losing its valuation deferment 
69.3 	under this section, and additional taxes must be imposed as calculated under subdivision 5.
69.4 		Subd. 7.Lien. The additional tax imposed by this section is a lien upon the property 
69.5 	assessed to the same extent and for the same duration as other taxes imposed upon 
69.6 	property within this state and, when collected, must be distributed in the manner provided 
69.7 	by law for the collection and distribution of other property taxes.
69.8 		Subd. 8.Continuation of tax treatment upon sale. When real property qualifying 
69.9 	under subdivision 1 is sold, additional taxes must not be extended against the property 
69.10 	if the property continues to qualify under subdivision 1, and the new owner files an 
69.11 	application with the assessor for continued deferment within 30 days after the sale.
69.12 		Subd. 9.Definitions. For purposes of this section, "commercial aggregate deposit" 
69.13 	and "actively mined" have the meanings given them in section 273.13, subdivision 23, 
69.14 	paragraph (h).

69.15 	EFFECTIVE DATE. This section is effective for taxes levied in 2008, payable 
69.16 	in 2009, and thereafter, except that for the 2008 assessment year, the application date 
69.17 	under subdivision 4 shall be September 1, 2008, and subdivision 4a is effective the day 
69.18 	following final enactment.

69.19 	Sec. 17. Minnesota Statutes 2006, section 273.112, subdivision 3, is amended to read:
69.20 		Subd. 3.Requirements. Real estate shall be entitled to valuation and tax deferment 
69.21 	under this section only if it is:
69.22 	(a) actively and exclusively devoted to golf, skiing, lawn bowling, croquet, polo, 
69.23 	soccer, or archery or firearms range recreational use or other recreational uses carried 
69.24 	on at the establishment;
69.25 	(b) five acres in size or more, except in the case of a lawn bowling or croquet green 
69.26 	or an archery or firearms range;
69.27 	(c)(1) operated by private individuals or, in the case of a lawn bowling or croquet 
69.28 	green, by private individuals or corporations, and open to the public; or
69.29 	(2) operated by firms or corporations for the benefit of employees or guests; or
69.30 	(3) operated by private clubs having a membership of 50 or more or open to the 
69.31 	public, provided that the club does not discriminate in membership requirements or 
69.32 	selection on the basis of sex or marital status; and
69.33 	(d) made available for use in the case of real estate devoted to golf without 
69.34 	discrimination on the basis of sex during the time when the facility is open to use by the 
69.35 	public or by members, except that use for golf may be restricted on the basis of sex no 
70.1 	more frequently than one, or part of one, weekend each calendar month for each sex and 
70.2 	no more than two, or part of two, weekdays each week for each sex.
70.3 	If a golf club membership allows use of golf course facilities by more than one adult 
70.4 	per membership, the use must be equally available to all adults entitled to use of the golf 
70.5 	course under the membership, except that use may be restricted on the basis of sex as 
70.6 	permitted in this section. Memberships that permit play during restricted times may be 
70.7 	allowed only if the restricted times apply to all adults using the membership. A golf club 
70.8 	may not offer a membership or golfing privileges to a spouse of a member that provides 
70.9 	greater or less access to the golf course than is provided to that person's spouse under the 
70.10 	same or a separate membership in that club, except that the terms of a membership may 
70.11 	provide that one spouse may have no right to use the golf course at any time while the 
70.12 	other spouse may have either limited or unlimited access to the golf course.
70.13 	A golf club may have or create an individual membership category which entitles a 
70.14 	member for a reduced rate to play during restricted hours as established by the club. The 
70.15 	club must have on record a written request by the member for such membership.
70.16 	A golf club that has food or beverage facilities or services must allow equal access 
70.17 	to those facilities and services for both men and women members in all membership 
70.18 	categories at all times. Nothing in this paragraph shall be construed to require service or 
70.19 	access to facilities to persons under the age of 21 years or require any act that would 
70.20 	violate law or ordinance regarding sale, consumption, or regulation of alcoholic beverages.
70.21 	For purposes of this subdivision and subdivision 7a, discrimination means a pattern 
70.22 	or course of conduct and not linked to an isolated incident.

70.23 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
70.24 	in 2008, and thereafter.

70.25 	Sec. 18. Minnesota Statutes 2006, section 273.117, is amended to read:
70.26 	273.117 CONSERVATION PROPERTY TAX VALUATION.
70.27 	The value of real property which is subject to a conservation restriction or easement 
70.28 	shall be entitled to reduced valuation under this section may be adjusted by the assessor if:
70.29 	(a) The restriction or easement is for a conservation purpose as defined in section 
70.30 	84.64, subdivision 2, and is recorded on the property; 
70.31 	(b) The property is being used in accordance with the terms of the conservation 
70.32 	restriction or easement.

70.33 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
70.34 	in 2008, and thereafter.

71.1 	Sec. 19. Minnesota Statutes 2006, section 273.123, subdivision 7, is amended to read:
71.2 		Subd. 7.Local option; other property. The owner of homestead property 
71.3 	not qualifying for an adjustment in valuation pursuant to subdivisions 1 to 5 or of 
71.4 	nonhomestead property may receive a reduction in the amount of taxes payable on the 
71.5 	property for the year in which the destruction occurs and in the following year if:
71.6 	(a) 50 percent or more of the homestead dwelling or other structure, as established 
71.7 	by the county assessor, is (i) unintentionally or accidentally destroyed, or (ii) destroyed by 
71.8 	arson or vandalism, by someone other than the owner,  and the homestead is uninhabitable 
71.9 	or the other structure is not usable;
71.10 	(b) the owner of the property makes written application to the county assessor as 
71.11 	soon as practical after the damage has occurred; and
71.12 	(c) the owner of the property makes written application to the county board.
71.13 	The county board may grant a reduction in the amount of property tax which the 
71.14 	owner must pay on the qualifying property in the year of destruction and in the following 
71.15 	year. Any reduction in the amount of tax payable which is authorized by county board 
71.16 	action shall be calculated based upon the number of months that the home is uninhabitable 
71.17 	or the other structure is unusable. The amount of net tax due from the taxpayer shall be 
71.18 	multiplied by a fraction, the numerator of which is the number of months the dwelling 
71.19 	was occupied by that taxpayer, or the number of months the other structure was used by 
71.20 	the taxpayer, and the denominator of which is 12. For purposes of this subdivision, if a 
71.21 	structure is occupied or used for a fraction of a month, it is considered a month. "Net tax" 
71.22 	is defined as the amount of tax after the subtraction of all of the state paid property tax 
71.23 	credits. If application is made following payment of all property taxes due for the year of 
71.24 	destruction, the amount of the reduction granted by the county board shall be refunded to 
71.25 	the taxpayer by the county treasurer as soon as practical.
71.26 	Any reductions or refunds approved by the county board shall not be subject to 
71.27 	approval by the commissioner of revenue.
71.28 	The county board may levy in the following year the amount of tax dollars lost to the 
71.29 	county government as a result of the reductions granted pursuant to this subdivision.

71.30 	EFFECTIVE DATE. This section is effective for destruction that occurs in calendar 
71.31 	year 2006 and thereafter.

71.32 	Sec. 20. Minnesota Statutes 2006, section 273.124, subdivision 11, is amended to read:
71.33 		Subd. 11.Limitation on homestead treatment. (a) For taxes payable in 2003 
71.34 	through 2005 only, If the assessor has classified a property as both homestead and 
71.35 	nonhomestead, the greater of: (1) the value attributable to the portion of the property 
72.1 	used as a homestead;, or (2) the homestead value amount determined under paragraph 
72.2 	(b) $76,000, is entitled to assessment as a homestead under section 273.13, subdivision 
72.3 	22 or 23. 
72.4 	(b) For taxes payable in 2003 only, the homestead value amount is $60,000. For 
72.5 	taxes payable in 2004 only, the homestead value amount is $45,000. For taxes payable in 
72.6 	2005 only, the homestead value amount is $30,000.
72.7 	The homestead value amount must not exceed the property's taxable market value.
72.8 	(c) The limitation in this section does not apply to buildings containing fewer than 
72.9 	four residential units or to a single rented or leased dwelling unit located within or attached 
72.10 	to a private garage or similar structure owned by the owner of a homestead and located on 
72.11 	the premises of that homestead. If the assessor has classified a property as both homestead 
72.12 	and nonhomestead, the reductions in tax provided under sections 273.135 and 273.1391
72.13 	apply to the value of both the homestead and the nonhomestead portions of the property. 

72.14 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
72.15 	in 2008, and thereafter.

72.16 	Sec. 21. Minnesota Statutes 2006, section 273.124, is amended by adding a subdivision 
72.17 	to read:
72.18 		Subd. 22.Annual registration of certain relative homesteads. If the owner of 
72.19 	property or the owner's relative who occupies property that is classified as a homestead 
72.20 	under subdivision 1, paragraph (c), receives compensation for allowing occupancy of any 
72.21 	part of that property for a period that exceeds 31 consecutive days during the calendar 
72.22 	year, the recipient of the compensation must register the property with the city in which 
72.23 	it is located no later than 60 days after the initial rental period began. This requirement 
72.24 	applies to property located in a city that has a population over 25,000. Each city must 
72.25 	maintain a file of these property registrations that is open to the public, and retain the 
72.26 	registrations for one year after the date of filing.

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

72.28 	Sec. 22. Minnesota Statutes 2006, section 273.125, subdivision 8, is amended to read:
72.29 		Subd. 8.Manufactured homes; sectional structures. (a) In this section, 
72.30 	"manufactured home" means a structure transportable in one or more sections, which is 
72.31 	built on a permanent chassis, and designed to be used as a dwelling with or without a 
72.32 	permanent foundation when connected to the required utilities, and contains the plumbing, 
72.33 	heating, air conditioning, and electrical systems in it. Manufactured home includes any 
73.1 	accessory structure that is an addition or supplement to the manufactured home and, when 
73.2 	installed, becomes a part of the manufactured home.
73.3 	(b) Except as provided in paragraph (c), a manufactured home that meets each of the 
73.4 	following criteria must be valued and assessed as an improvement to real property, the 
73.5 	appropriate real property classification applies, and the valuation is subject to review and 
73.6 	the taxes payable in the manner provided for real property:
73.7 	(1) the owner of the unit holds title to the land on which it is situated;
73.8 	(2) the unit is affixed to the land by a permanent foundation or is installed at its 
73.9 	location in accordance with the Manufactured Home Building Code in sections 327.31
73.10 	to 327.34, and rules adopted under those sections, or is affixed to the land like other real 
73.11 	property in the taxing district; and
73.12 	(3) the unit is connected to public utilities, has a well and septic tank system, or is 
73.13 	serviced by water and sewer facilities comparable to other real property in the taxing 
73.14 	district.
73.15 	(c) A manufactured home that meets each of the following criteria must be assessed 
73.16 	at the rate provided by the appropriate real property classification but must be treated as 
73.17 	personal property, and the valuation is subject to review and the taxes payable in the 
73.18 	manner provided in this section:
73.19 	(1) the owner of the unit is a lessee of the land under the terms of a lease, or the unit 
73.20 	is located in a manufactured home park but is not the homestead of the park owner;
73.21 	(2) the unit is affixed to the land by a permanent foundation or is installed at its 
73.22 	location in accordance with the Manufactured Home Building Code contained in sections 
73.23 	327.31 to 327.34, and the rules adopted under those sections, or is affixed to the land like 
73.24 	other real property in the taxing district; and
73.25 	(3) the unit is connected to public utilities, has a well and septic tank system, or is 
73.26 	serviced by water and sewer facilities comparable to other real property in the taxing 
73.27 	district.
73.28 	(d) Sectional structures must be valued and assessed as an improvement to real 
73.29 	property if the owner of the structure holds title to the land on which it is located or is a 
73.30 	qualifying lessee of the land under section 273.19. In this paragraph "sectional structure" 
73.31 	means a building or structural unit that has been in whole or substantial part manufactured 
73.32 	or constructed at an off-site location to be wholly or partially assembled on-site alone or 
73.33 	with other units and attached to a permanent foundation.
73.34 	(e) The commissioner of revenue may adopt rules under the Administrative 
73.35 	Procedure Act to establish additional criteria for the classification of manufactured homes 
73.36 	and sectional structures under this subdivision.
74.1 	(f) A storage shed, deck, or similar improvement constructed on property that is 
74.2 	leased or rented as a site for a manufactured home, sectional structure, park trailer, or 
74.3 	travel trailer is taxable as provided in this section. In the case of property that is leased or 
74.4 	rented as a site for a travel trailer, a storage shed, deck, or similar improvement on the 
74.5 	site that is considered personal property under this paragraph is taxable only if its total 
74.6 	estimated market value is over $500 $1,000. The property is taxable as personal property 
74.7 	to the lessee of the site if it is not owned by the owner of the site. The property is taxable 
74.8 	as real estate if it is owned by the owner of the site. As a condition of permitting the owner 
74.9 	of the manufactured home, sectional structure, park trailer, or travel trailer to construct 
74.10 	improvements on the leased or rented site, the owner of the site must obtain the permanent 
74.11 	home address of the lessee or user of the site. The site owner must provide the name 
74.12 	and address to the assessor upon request.

74.13 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
74.14 	in 2008, and thereafter.

74.15 	Sec. 23. Minnesota Statutes 2006, section 273.128, subdivision 1, is amended to read:
74.16 		Subdivision 1.Requirement. Low-income rental property classified as class 4d 
74.17 	under section 273.13, subdivision 25, is entitled to valuation under this section if at 
74.18 	least 75 25 percent of the units in the rental housing property meet any of the following 
74.19 	qualifications:
74.20 	(1) the units are subject to a housing assistance payments contract under Section 8 
74.21 	of the United States Housing Act of 1937, as amended;
74.22 	(2) the units are rent-restricted and income-restricted units of a qualified low-income 
74.23 	housing project receiving tax credits under section 42(g) of the Internal Revenue Code of 
74.24 	1986, as amended;
74.25 	(3) the units are financed by the Rural Housing Service of the United States 
74.26 	Department of Agriculture and receive payments under the rental assistance program 
74.27 	pursuant to section 521(a) of the Housing Act of 1949, as amended; or
74.28 	(4) the units are subject to rent and income restrictions under the terms of financial 
74.29 	assistance provided to the rental housing property by the federal government or, the 
74.30 	state of Minnesota, or a local unit of government as evidenced by a document recorded 
74.31 	against the property.
74.32 	The restrictions must require assisted units to be occupied by residents whose 
74.33 	household income at the time of initial occupancy does not exceed 60 percent of the 
74.34 	greater of area or state median income, adjusted for family size, as determined by the 
74.35 	United States Department of Housing and Urban Development. The restriction must also 
75.1 	require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of 
75.2 	area or state median income, adjusted for family size, as determined by the United States 
75.3 	Department of Housing and Urban Development.

75.4 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
75.5 	in 2008, and thereafter.

75.6 	Sec. 24. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:
75.7 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) 
75.8 	and (c), real estate which is residential and used for homestead purposes is class 1a. In the 
75.9 	case of a duplex or triplex in which one of the units is used for homestead purposes, the 
75.10 	entire property is deemed to be used for homestead purposes. The market value of class 1a 
75.11 	property must be determined based upon the value of the house, garage, and land.
75.12 	The first $500,000 of market value of class 1a property has a net class rate of 
75.13 	one percent of its market value; and the market value of class 1a property that exceeds 
75.14 	$500,000 has a class rate of 1.25 percent of its market value.
75.15 	(b) Class 1b property includes homestead real estate or homestead manufactured 
75.16 	homes used for the purposes of a homestead by
75.17 	(1) any person who is blind as defined in section 256D.35, or the blind person and 
75.18 	the blind person's spouse; or
75.19 	(2) any person, hereinafter referred to as "veteran," who:
75.20 	(i) served in the active military or naval service of the United States; and
75.21 	(ii) is entitled to compensation under the laws and regulations of the United States 
75.22 	for permanent and total service-connected disability due to the loss, or loss of use, by 
75.23 	reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both 
75.24 	lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or 
75.25 	a wheelchair; and
75.26 	(iii) has acquired a special housing unit with special fixtures or movable facilities 
75.27 	made necessary by the nature of the veteran's disability, or the surviving spouse of the 
75.28 	deceased veteran for as long as the surviving spouse retains the special housing unit 
75.29 	as a homestead; or
75.30 	(3) any person who is permanently and totally disabled.
75.31 	Property is classified and assessed under clause (3) (2) only if the government 
75.32 	agency or income-providing source certifies, upon the request of the homestead occupant, 
75.33 	that the homestead occupant satisfies the disability requirements of this paragraph.
76.1 	Property is classified and assessed pursuant to clause (1) only if the commissioner of 
76.2 	revenue certifies to the assessor that the homestead occupant satisfies the requirements of 
76.3 	this paragraph.
76.4 	Permanently and totally disabled for the purpose of this subdivision means a 
76.5 	condition which is permanent in nature and totally incapacitates the person from working 
76.6 	at an occupation which brings the person an income. The first $32,000 market value of 
76.7 	class 1b property has a net class rate of .45 percent of its market value. The remaining 
76.8 	market value of class 1b property has a class rate using the rates for class 1a or class 2a 
76.9 	property, whichever is appropriate, of similar market value.
76.10 	(c) Class 1c property is commercial use real property that abuts a lakeshore line and 
76.11 	is devoted to temporary and seasonal residential occupancy for recreational purposes but 
76.12 	not devoted to commercial purposes for more than 250 days in the year preceding the 
76.13 	year of assessment, and that includes a portion used as a homestead by the owner, which 
76.14 	includes a dwelling occupied as a homestead by a shareholder of a corporation that owns 
76.15 	the resort, a partner in a partnership that owns the resort, or a member of a limited liability 
76.16 	company that owns the resort even if the title to the homestead is held by the corporation, 
76.17 	partnership, or limited liability company. For purposes of this clause, property is devoted 
76.18 	to a commercial purpose on a specific day if any portion of the property, excluding the 
76.19 	portion used exclusively as a homestead, is used for residential occupancy and a fee is 
76.20 	charged for residential occupancy. The portion of the property used as a homestead is class 
76.21 	1a property under paragraph (a). The remainder of the property is classified as follows: 
76.22 	the first $500,000 of market value is tier I, the next $1,700,000 of market value is tier II, 
76.23 	and any remaining market value is tier III. The class rates for class 1c are: tier I, 0.55 
76.24 	percent; tier II, 1.0 percent; and tier III, 1.25 percent. If a class 1c resort property has any 
76.25 	market value in tier III, the entire property must meet the requirements of subdivision 25, 
76.26 	paragraph (d), clause (1), to qualify for class 1c treatment under this paragraph.
76.27 	(d) Class 1d property includes structures that meet all of the following criteria:
76.28 	(1) the structure is located on property that is classified as agricultural property under 
76.29 	section 273.13, subdivision 23;
76.30 	(2) the structure is occupied exclusively by seasonal farm workers during the time 
76.31 	when they work on that farm, and the occupants are not charged rent for the privilege of 
76.32 	occupying the property, provided that use of the structure for storage of farm equipment 
76.33 	and produce does not disqualify the property from classification under this paragraph;
76.34 	(3) the structure meets all applicable health and safety requirements for the 
76.35 	appropriate season; and
77.1 	(4) the structure is not salable as residential property because it does not comply 
77.2 	with local ordinances relating to location in relation to streets or roads.
77.3 	The market value of class 1d property has the same class rates as class 1a property 
77.4 	under paragraph (a).

77.5 	EFFECTIVE DATE. This section is effective for assessment year 2007 and 
77.6 	thereafter, for taxes payable in 2008 and thereafter.

77.7 	Sec. 25. Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read:
77.8 		Subd. 23.Class 2. (a) Class 2a property is agricultural land including any 
77.9 	improvements that is homesteaded. The market value of the house and garage and 
77.10 	immediately surrounding one acre of land has the same class rates as class 1a property 
77.11 	under subdivision 22. The value of the remaining land including improvements up to the 
77.12 	first tier valuation limit of agricultural homestead property has a net class rate of 0.55 0.5
77.13 	percent of market value. The remaining property over the first tier has a class rate of one 
77.14 	percent of market value. For purposes of this subdivision, the "first tier valuation limit of 
77.15 	agricultural homestead property" and "first tier" means the limit certified under section 
77.16 	273.11, subdivision 23.
77.17 	(b) Class 2b property is (1) unplatted real estate, rural in character and used 
77.18 	exclusively for growing trees for timber, lumber, and wood and wood products; (2) 
77.19 	real estate, that is not improved with a structure and is used exclusively for growing 
77.20 	trees for timber, lumber, and wood and wood products, if the owner has participated or 
77.21 	is participating in a cost-sharing program for afforestation, reforestation, or timber stand 
77.22 	improvement on that particular property, administered or coordinated by the commissioner 
77.23 	of natural resources; (3) and that consists of at least ten acres, including land used for 
77.24 	growing trees for timber, lumber, and wood and wood products, but not including land used 
77.25 	for agricultural purposes, provided that the presence of a minor, ancillary nonresidential 
77.26 	structure does not disqualify property from classification under this clause,  (2) real estate 
77.27 	that is nonhomestead agricultural land; or (4) (3) a landing area or public access area of a 
77.28 	privately owned public use airport; or (4) land with a commercial aggregate deposit that 
77.29 	is not actively being mined and is not otherwise classified as class 2a or 2b, clauses (1) 
77.30 	to (3). Class 2b property has a net class rate of one percent of market value, except that 
77.31 	property described in clause (1) has a net class rate of .55 percent if it consists of no 
77.32 	more than 1,920 acres and is being managed under a forest management plan that meets 
77.33 	the requirements of chapter 290C, but is not enrolled in the sustainable forest resource 
77.34 	management incentive program, provided that the owner of the property must apply to the 
78.1 	assessor annually to receive the reduced class rate and provide the information required by 
78.2 	the assessor to verify that the property qualifies for the reduced rate.
78.3 	(c) Agricultural land as used in this section means contiguous acreage of ten acres or 
78.4 	more, used during the preceding year for agricultural purposes. "Agricultural purposes" as 
78.5 	used in this section means the raising or cultivation of agricultural products. "Agricultural 
78.6 	purposes" also includes enrollment in the Reinvest in Minnesota program under sections 
78.7 	103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public 
78.8 	Law 99-198 if the property was classified as agricultural (i) under this subdivision for 
78.9 	the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage 
78.10 	on the same parcel, or contiguous acreage on an immediately adjacent parcel under the 
78.11 	same ownership, may also qualify as agricultural land, but only if it is pasture, timber, 
78.12 	waste, unusable wild land, or land included in state or federal farm programs. Agricultural 
78.13 	classification for property shall be determined excluding the house, garage, and 
78.14 	immediately surrounding one acre of land, and shall not be based upon the market value of 
78.15 	any residential structures on the parcel or contiguous parcels under the same ownership. 
78.16 	(d) Real estate, excluding the house, garage, and immediately surrounding one acre 
78.17 	of land, of less than ten acres which is exclusively and intensively used for raising or 
78.18 	cultivating agricultural products, shall be considered as agricultural land.
78.19 	Land shall be classified as agricultural even if all or a portion of the agricultural use 
78.20 	of that property is the leasing to, or use by another person for agricultural purposes.
78.21 	Classification under this subdivision is not determinative for qualifying under 
78.22 	section 273.111. 
78.23 	The property classification under this section supersedes, for property tax purposes 
78.24 	only, any locally administered agricultural policies or land use restrictions that define 
78.25 	minimum or maximum farm acreage.
78.26 	(e) The term "agricultural products" as used in this subdivision includes production 
78.27 	for sale of:
78.28 	(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 
78.29 	animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 
78.30 	bees, and apiary products by the owner;
78.31 	(2) fish bred for sale and consumption if the fish breeding occurs on land zoned 
78.32 	for agricultural use;
78.33 	(3) the commercial boarding of horses if the boarding is done in conjunction with 
78.34 	raising or cultivating agricultural products as defined in clause (1);
78.35 	(4) property which is owned and operated by nonprofit organizations used for 
78.36 	equestrian activities, excluding racing;
79.1 	(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed 
79.2 	under section 97A.115; 
79.3 	(6) insects primarily bred to be used as food for animals;
79.4 	(7) trees, grown for sale as a crop, including short rotation woody crops, and not 
79.5 	sold for timber, lumber, wood, or wood products; and
79.6 	(8) maple syrup taken from trees grown by a person licensed by the Minnesota 
79.7 	Department of Agriculture under chapter 28A as a food processor.
79.8 	(f) If a parcel used for agricultural purposes is also used for commercial or industrial 
79.9 	purposes, including but not limited to:
79.10 	(1) wholesale and retail sales;
79.11 	(2) processing of raw agricultural products or other goods;
79.12 	(3) warehousing or storage of processed goods; and
79.13 	(4) office facilities for the support of the activities enumerated in clauses (1), (2), 
79.14 	and (3),
79.15 	the assessor shall classify the part of the parcel used for agricultural purposes as class 
79.16 	1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 
79.17 	use. The grading, sorting, and packaging of raw agricultural products for first sale is 
79.18 	considered an agricultural purpose. A greenhouse or other building where horticultural 
79.19 	or nursery products are grown that is also used for the conduct of retail sales must be 
79.20 	classified as agricultural if it is primarily used for the growing of horticultural or nursery 
79.21 	products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 
79.22 	those products. Use of a greenhouse or building only for the display of already grown 
79.23 	horticultural or nursery products does not qualify as an agricultural purpose.
79.24 	The assessor shall determine and list separately on the records the market value of 
79.25 	the homestead dwelling and the one acre of land on which that dwelling is located. If any 
79.26 	farm buildings or structures are located on this homesteaded acre of land, their market 
79.27 	value shall not be included in this separate determination.
79.28 	(g) To qualify for classification under paragraph (b), clause (4), a privately owned 
79.29 	public use airport must be licensed as a public airport under section 360.018. For purposes 
79.30 	of paragraph (b), clause (4), "landing area" means that part of a privately owned public use 
79.31 	airport properly cleared, regularly maintained, and made available to the public for use by 
79.32 	aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing 
79.33 	or navigational aids. A landing area also includes land underlying both the primary surface 
79.34 	and the approach surfaces that comply with all of the following: 
80.1 	(i) the land is properly cleared and regularly maintained for the primary purposes of 
80.2 	the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 
80.3 	facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
80.4 	(ii) the land is part of the airport property; and
80.5 	(iii) the land is not used for commercial or residential purposes.
80.6 	The land contained in a landing area under paragraph (b), clause (4), must be described 
80.7 	and certified by the commissioner of transportation. The certification is effective until 
80.8 	it is modified, or until the airport or landing area no longer meets the requirements of 
80.9 	paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area" 
80.10 	means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival 
80.11 	and departure building in connection with the airport.
80.12 	(h) To qualify for classification under paragraph (b), clause (4), the property must be 
80.13 	at least ten contiguous acres in size and the owner of the property must record with the 
80.14 	county recorder of the county in which the property is located an affidavit containing:
80.15 	(1) a legal description of the property;
80.16 	(2) a disclosure that the property contains a commercial aggregate deposit that is not 
80.17 	actively being mined but is present on the entire parcel enrolled;
80.18 	(3) documentation that the conditional use under the county or local zoning 
80.19 	ordinance of this property is for mining; and 
80.20 	(4) documentation that a permit has been issued by the local unit of government 
80.21 	or the mining activity is allowed under local ordinance.  The disclosure must include a 
80.22 	statement from a registered professional geologist, engineer, or soil scientist delineating 
80.23 	the deposit and certifying that it is a commercial aggregate deposit.
80.24 	For purposes of this section and section 273.1115, "commercial aggregate deposit" 
80.25 	means a deposit that will yield crushed stone or sand and gravel that is suitable for use 
80.26 	as a construction aggregate; and "actively mined" means the removal of top soil and 
80.27 	overburden in preparation for excavation or excavation of a commercial deposit.
80.28 	(i) When any portion of the property under this subdivision or section 273.13, 
80.29 	subdivision 22, begins to be actively mined, the owner must file a supplemental affidavit 
80.30 	within 60 days from the day any aggregate is removed stating the number of acres of the 
80.31 	property that is actively being mined.  The acres actively being mined must be (1) valued 
80.32 	and classified under section 273.13, subdivision 24, in the next subsequent assessment 
80.33 	year, and (2) removed from the aggregate resource preservation property tax program 
80.34 	under section 273.1115, if the land was enrolled in that program.  Copies of the original 
80.35 	affidavit and all supplemental affidavits must be filed with the county assessor, the local 
80.36 	zoning administrator, and the Department of Natural Resources, Division of Land and 
81.1 	Minerals.  A supplemental affidavit must be filed each time a subsequent portion of the 
81.2 	property is actively mined, provided that the minimum acreage change is five acres, even 
81.3 	if the actual mining activity constitutes less than five acres.

81.4 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable in 
81.5 	2008, and thereafter, except that paragraph (b), clause (4), is effective for taxes levied 
81.6 	in 2008, payable in 2009, and thereafter.

81.7 	Sec. 26. Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:
81.8 		Subd. 24.Class 3. (a) Commercial and industrial property and utility real and 
81.9 	personal property is class 3a.
81.10 	(1) Except as otherwise provided, each parcel of commercial, industrial, or utility 
81.11 	real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent 
81.12 	of the remaining market value. In the case of contiguous parcels of property owned by the 
81.13 	same person or entity, only the value equal to the first-tier value of the contiguous parcels 
81.14 	qualifies for the reduced class rate, except that contiguous parcels owned by the same 
81.15 	person or entity shall be eligible for the first-tier value class rate on each separate business 
81.16 	operated by the owner of the property, provided the business is housed in a separate 
81.17 	structure. For the purposes of this subdivision, the first tier means the first $150,000 of 
81.18 	market value. Real property owned in fee by a utility for transmission line right-of-way 
81.19 	shall be classified at the class rate for the higher tier.
81.20 	For purposes of this subdivision, parcels are considered to be contiguous even if 
81.21 	they are separated from each other by a road, street, waterway, or other similar intervening 
81.22 	type of property. Connections between parcels that consist of power lines or pipelines do 
81.23 	not cause the parcels to be contiguous. Property owners who have contiguous parcels of 
81.24 	property that constitute separate businesses that may qualify for the first-tier class rate shall 
81.25 	notify the assessor by July 1, for treatment beginning in the following taxes payable year.
81.26 	(2) All Personal property that is: (i) part of an electric generation, transmission, or 
81.27 	distribution system; or (ii), including tools, implements, and machinery, has a class rate 
81.28 	of 2.5 percent for taxes levied in 2008, payable in 2009, and 3.0 percent for taxes levied 
81.29 	in 2009, payable in 2010, and thereafter.
81.30 	(3) Personal property that is either: (i) part of a pipeline system transporting 
81.31 	or distributing water, gas, crude oil, or petroleum products; and (iii) not described in 
81.32 	clause (3), and all, including tools, implements, and machinery, or (ii) part of an electric 
81.33 	transmission or distribution system, including tools, implements, and machinery, has a 
81.34 	class rate of 2.15 percent for taxes levied in 2008, payable in 2009, and 2.25 percent for 
81.35 	taxes levied in 2009, payable in 2010, and thereafter.
82.1 	(4) railroad operating property has a class rate as provided under clause (1) for 
82.2 	the first tier of market value and the remaining market value. In the case of multiple 
82.3 	parcels in one county that are owned by one person or entity, only one first tier amount 
82.4 	is eligible for the reduced rate.
82.5 	(3) The entire market value of personal property that is: (i) tools, implements, and 
82.6 	machinery of an electric generation, transmission, or distribution system; (ii) tools, 
82.7 	implements, and machinery of a pipeline system transporting or distributing water, gas, 
82.8 	crude oil, or petroleum products; or (iii) the (5) Personal property consisting of  mains 
82.9 	and pipes used in the distribution of steam or hot or chilled water for heating or cooling 
82.10 	buildings, has a class rate as provided under clause (1) for the remaining market value 
82.11 	in excess of the first tier.
82.12 	(b) Employment property defined in section 469.166, during the period provided 
82.13 	in section 469.170, shall constitute class 3b. The class rates for class 3b property are 
82.14 	determined under paragraph (a). 

82.15 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
82.16 	in 2008, and thereafter.

82.17 	Sec. 27. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:
82.18 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more 
82.19 	units and used or held for use by the owner or by the tenants or lessees of the owner 
82.20 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
82.21 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
82.22 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
82.23 	purposes, without regard to whether the property has been platted or subdivided. The 
82.24 	market value of class 4a property has a class rate of 1.25 percent.
82.25 	(b) Class 4b includes:
82.26 	(1) residential real estate containing less than four units that does not qualify as class 
82.27 	4bb, other than seasonal residential recreational property;
82.28 	(2) manufactured homes not classified under any other provision;
82.29 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
82.30 	farm classified under subdivision 23, paragraph (b) containing two or three units; and
82.31 	(4) unimproved property that is classified residential as determined under subdivision 
82.32 	33.
82.33 	The market value of class 4b property has a class rate of 1.25 percent.
82.34 	(c) Class 4bb includes:
83.1 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
83.2 	residential recreational property; and
83.3 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
83.4 	nonhomestead farm classified under subdivision 23, paragraph (b).
83.5 	Class 4bb property has the same class rates as class 1a property under subdivision 22.
83.6 	Property that has been classified as seasonal residential recreational property at 
83.7 	any time during which it has been owned by the current owner or spouse of the current 
83.8 	owner does not qualify for class 4bb.
83.9 	(d) Class 4c property includes:
83.10 	(1) except as provided in subdivision 22, paragraph (c), real property devoted to 
83.11 	temporary and seasonal residential occupancy for recreation purposes, including real 
83.12 	property devoted to temporary and seasonal residential occupancy for recreation purposes
83.13 	and not devoted to commercial purposes for not more than 250 days in the year preceding 
83.14 	the year of assessment. For purposes of this clause, property is devoted to a commercial 
83.15 	purpose on a specific day if any portion of the property is used for residential occupancy, 
83.16 	and a fee is charged for residential occupancy. In order for a property to be classified as 
83.17 	class 4c, seasonal residential recreational for commercial purposes, at least 40 percent of 
83.18 	the annual gross lodging receipts related to the property must be from business conducted 
83.19 	during 90 consecutive days and either (i) at least 60 percent of all paid bookings by lodging 
83.20 	guests during the year must be for periods of at least two consecutive nights; or (ii) at least 
83.21 	20 percent of the annual gross receipts must be from charges for rental of fish houses, 
83.22 	boats and motors, snowmobiles, downhill or cross-country ski equipment, or charges for 
83.23 	marina services, launch services, and guide services, or the sale of bait and fishing tackle. 
83.24 	For purposes of this determination, a paid booking of five or more nights shall be counted 
83.25 	as two bookings. Class 4c also includes commercial use real property used exclusively 
83.26 	for recreational purposes in conjunction with class 4c property devoted to temporary 
83.27 	and seasonal residential occupancy for recreational purposes, up to a total of two acres, 
83.28 	provided the property is not devoted to commercial recreational use for more than 250 
83.29 	days in the year preceding the year of assessment and is located within two miles of the 
83.30 	class 4c property with which it is used. Owners of real property devoted to temporary and 
83.31 	seasonal residential occupancy for recreation purposes and all or a portion of which was 
83.32 	devoted to commercial purposes for not more than 250 days in the year preceding the year 
83.33 	of assessment desiring classification as class 1c or 4c, must submit a declaration to the 
83.34 	assessor designating the cabins or units occupied for 250 days or less in the year preceding 
83.35 	the year of assessment by January 15 of the assessment year. Those cabins or units and a 
83.36 	proportionate share of the land on which they are located will be designated class 1c or 4c 
84.1 	as otherwise provided. The remainder of the cabins or units and a proportionate share of 
84.2 	the land on which they are located will be designated as class 3a. The owner of property 
84.3 	desiring designation as class 1c or 4c property must provide guest registers or other 
84.4 	records demonstrating that the units for which class 1c or 4c designation is sought were 
84.5 	not occupied for more than 250 days in the year preceding the assessment if so requested. 
84.6 	The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
84.7 	nonresidential facility operated on a commercial basis not directly related to temporary and 
84.8 	seasonal residential occupancy for recreation purposes shall not qualify for class 1c or 4c;
84.9 	(2) qualified property used as a golf course if:
84.10 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
84.11 	dues, but a membership fee may not be required in order to use the property for golfing, 
84.12 	and its green fees for golfing must be comparable to green fees typically charged by 
84.13 	municipal courses; and
84.14 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
84.15 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
84.16 	with the golf course is classified as class 3a property;
84.17 	(3) real property up to a maximum of one acrethree acres of land owned and used 
84.18 	by a nonprofit community service oriented organization; provided thatand that is not used 
84.19 	for residential purposes on either a temporary or permanent basis, qualifies for class 4c 
84.20 	provided that it meets either of the following:
84.21 	(i) the property is not used for a revenue-producing activity for more than six days 
84.22 	in the calendar year preceding the year of assessment and the property is not used for 
84.23 	residential purposes on either a temporary or permanent basis; or
84.24 	(ii) the organization makes annual charitable contributions and donations at least 
84.25 	equal to the property's previous year's property taxes and the property is allowed to be 
84.26 	used for public and community meetings or events for no charge, as appropriate to the 
84.27 	size of the facility. 
84.28 	For purposes of this clause, (A) "charitable contributions and donations" has 
84.29 	the same meaning as lawful gambling purposes under section 349.12, subdivision 25, 
84.30 	excluding those purposes relating to the payment of taxes, assessments, fees, auditing 
84.31 	costs, and utility payments; (B) "property taxes" excludes the state general tax; (C) a 
84.32 	"nonprofit community service oriented organization" means any corporation, society, 
84.33 	association, foundation, or institution organized and operated exclusively for charitable, 
84.34 	religious, fraternal, civic, or educational purposes, and which is exempt from federal 
84.35 	income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue Code 
84.36 	of 1986, as amended through December 31, 1990. For purposes of this clause,; and (D)
85.1 	"revenue-producing activities" shall include but not be limited to property or that portion 
85.2 	of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt liquor 
85.3 	establishment licensed under chapter 340A, a restaurant open to the public, bowling 
85.4 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
85.5 	insurance business, or office or other space leased or rented to a lessee who conducts a 
85.6 	for-profit enterprise on the premises. Any portion of the property qualifying under item (i) 
85.7 	which is used for revenue-producing activities for more than six days in the calendar year 
85.8 	preceding the year of assessment shall be assessed as class 3a. The use of the property 
85.9 	for social events open exclusively to members and their guests for periods of less than 24 
85.10 	hours, when an admission is not charged nor any revenues are received by the organization 
85.11 	shall not be considered a revenue-producing activity;.
85.12 	The organization shall maintain records of its charitable contributions and donations 
85.13 	and of public meetings and events held on the property and make them available upon 
85.14 	request any time to the assessor to ensure eligibility. An organization meeting the 
85.15 	requirement under item (ii) must file an application by May 1 with the assessor for 
85.16 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
85.17 	application form and instructions;
85.18 	(4) postsecondary student housing of not more than one acre of land that is owned by 
85.19 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
85.20 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
85.21 	miles of the border of a college campus;
85.22 	(5) manufactured home parks as defined in section 327.14, subdivision 3;
85.23 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
85.24 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
85.25 	and is located within the metropolitan area as defined in section 473.121, subdivision 2;
85.26 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
85.27 	under section 272.01, subdivision 2, and the land on which it is located, provided that:
85.28 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
85.29 	Airports Commission, or group thereof; and
85.30 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
85.31 	leased premise, prohibits commercial activity performed at the hangar.
85.32 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
85.33 	be filed by the new owner with the assessor of the county where the property is located 
85.34 	within 60 days of the sale;
85.35 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
85.36 	section 272.01, subdivision 2, and the land on which it is located, provided that:
86.1 	(i) the land abuts a public airport; and
86.2 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
86.3 	agreement restricting the use of the premises, prohibiting commercial use or activity 
86.4 	performed at the hangar; and
86.5 	(9) residential real estate, a portion of which is used by the owner for homestead 
86.6 	purposes, and that is also a place of lodging, if all of the following criteria are met:
86.7 	(i) rooms are provided for rent to transient guests that generally stay for periods 
86.8 	of 14 or fewer days;
86.9 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
86.10 	in the basic room rate;
86.11 	(iii) meals are not provided to the general public except for special events on fewer 
86.12 	than seven days in the calendar year preceding the year of the assessment; and
86.13 	(iv) the owner is the operator of the property; and
86.14 	(10) real property up to a maximum of three acres and operated as a restaurant 
86.15 	as defined under section 157.15, subdivision 12, provided it: (i) is located on a lake 
86.16 	as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (ii) 
86.17 	is either devoted to commercial purposes for not more than 250 consecutive days, or 
86.18 	receives at least 60 percent of its annual gross receipts from business conducted during 
86.19 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
86.20 	included in determining the property's qualification under clause (ii). The property's 
86.21 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
86.22 	sales located on the premises must be excluded. Owners of real property desiring 4c 
86.23 	classification under this clause must submit an annual declaration to the assessor by 
86.24 	February 1 of the current assessment year, based on the property's relevant information for 
86.25 	the preceding assessment year. 
86.26 	The market value subject to the 4c classification under this clause is limited to five rental 
86.27 	units. Any rental units on the property in excess of five, must be valued and assessed as 
86.28 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
86.29 	be classified as class 1a property under subdivision 22.
86.30 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
86.31 	parcel of seasonal residential recreational property not used for commercial purposes has 
86.32 	the same class rates as class 4bb property, (ii) manufactured home parks assessed under 
86.33 	clause (5) have the same class rate as class 4b property, (iii) (ii) commercial-use seasonal 
86.34 	residential recreational property and restaurant property under clause (10) has a class rate 
86.35 	of one percent for the first $500,000 of market value, and 1.25 percent for the remaining 
86.36 	market value, (iv) (iii) the market value of property described in clause (4) has a class rate 
87.1 	of one percent, (v) (iv) the market value of property described in clauses (2) and (6) has 
87.2 	a class rate of 1.25 percent, and (vi) (v) that portion of the market value of property in 
87.3 	clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
87.4 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
87.5 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
87.6 	of the units in the building qualify as low-income rental housing units as certified under 
87.7 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
87.8 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
87.9 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
87.10 	land as the qualifying low-income rental housing units are to the total units in the building. 
87.11 	For all properties qualifying as class 4d, the market value determined by the assessor must 
87.12 	be based on the normal approach to value using normal unrestricted rents.
87.13 	Class 4d property has a class rate of 0.75 percent.

87.14 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable in 
87.15 	2008, and thereafter, except that the application date in clause (10) for the 2007 assessment 
87.16 	is extended to September 1, 2007.

87.17 	Sec. 28. Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read:
87.18 		Subd. 33.Classification of unimproved property. (a) All real property that is not 
87.19 	improved with a structure must be classified according to its current use.
87.20 	(b) Except as provided in subdivision 23, paragraph (b), clause (1), real property that 
87.21 	is not improved with a structure and for which there is no identifiable current use must be 
87.22 	classified according to its highest and best use permitted under the local zoning ordinance. 
87.23 	If the ordinance permits more than one use, the land must be classified according to the 
87.24 	highest and best use permitted under the ordinance. If no such ordinance exists, the 
87.25 	assessor shall consider the most likely potential use of the unimproved land based upon 
87.26 	the use made of surrounding land or land in proximity to the unimproved land.

87.27 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
87.28 	in 2008, and thereafter.

87.29 	Sec. 29. Minnesota Statutes 2006, section 275.025, subdivision 1, is amended to read:
87.30 		Subdivision 1.Levy amount. The state general levy is levied against 
87.31 	commercial-industrial property and seasonal residential recreational property, as defined 
87.32 	in this section at the rate imposed under Minnesota Statutes 2002, section 275.025, for 
87.33 	taxes payable in 2004. The state general levy base amount is $592,000,000 for taxes 
88.1 	payable in 2002. For taxes payable in subsequent years, the levy base amount is increased 
88.2 	each year by multiplying the levy base amount for the prior year by the sum of one plus 
88.3 	the rate of increase, if any, in the implicit price deflator for government consumption 
88.4 	expenditures and gross investment for state and local governments prepared by the Bureau 
88.5 	of Economic Analysts of the United States Department of Commerce for the 12-month 
88.6 	period ending March 31 of the year prior to the year the taxes are payable. The tax under 
88.7 	this section is not treated as a local tax rate under section 469.177 and is not the levy of a 
88.8 	governmental unit under chapters 276A and 473F.
88.9 	The commissioner shall increase or decrease the preliminary or final rate for a year 
88.10 	as necessary to account for errors and tax base changes that affected a preliminary or final 
88.11 	rate for either of the two preceding years. Adjustments are allowed to the extent that the 
88.12 	necessary information is available to the commissioner at the time the rates for a year must 
88.13 	be certified, and for the following reasons:
88.14 	(1) an erroneous report of taxable value by a local official;
88.15 	(2) an erroneous calculation by the commissioner; and
88.16 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
88.17 	residential recreational property reported on the abstracts of tax lists submitted under 
88.18 	section 275.29 that was not reported on the abstracts of assessment submitted under 
88.19 	section 270C.89 for the same year.
88.20 	The commissioner may, but need not, make adjustments if the total difference in the tax 
88.21 	levied for the year would be less than $100,000.

88.22 	Sec. 30. Minnesota Statutes 2006, section 275.025, subdivision 2, is amended to read:
88.23 		Subd. 2.Commercial-industrial tax capacity. For the purposes of this section, 
88.24 	"commercial-industrial tax capacity" means the tax capacity of all taxable property 
88.25 	classified as class 3 or class 5(1) under section 273.13, except for electric generation 
88.26 	attached machinery under class 3 and property described in section 473.625. County 
88.27 	commercial-industrial tax capacity amounts are not adjusted for the captured net tax 
88.28 	capacity of a tax increment financing district under section 469.177, subdivision 2, the 
88.29 	net tax capacity of transmission lines deducted from a local government's total net tax 
88.30 	capacity under section 273.425, or fiscal disparities contribution and distribution net 
88.31 	tax capacities under chapter 276A or 473F. 

88.32 	Sec. 31. Minnesota Statutes 2006, section 275.025, subdivision 4, is amended to read:
88.33 		Subd. 4.Apportionment and levy of state general tax. Ninety-five percent of the 
88.34 	state general tax must be levied by applying a uniform rate to all commercial-industrial tax 
89.1 	capacity and five percent of the state general tax must be levied by applying a uniform 
89.2 	rate to all seasonal residential recreational tax capacity.  On or before October 1 each 
89.3 	year, the commissioner of revenue shall certify the preliminary state general levy rates to 
89.4 	each county auditor that must be used to prepare the notices of proposed property taxes 
89.5 	for taxes payable in the following year and to spread the tax. By January 1 of each year, 
89.6 	the commissioner shall certify the final state general levy rate to each county auditor that 
89.7 	shall be used in spreading taxes.

89.8 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
89.9 	in 2008, and thereafter.

89.10 	Sec. 32. Minnesota Statutes 2006, section 279.37, subdivision 1a, is amended to read:
89.11 		Subd. 1a.Class 3a property. (a) The delinquent taxes upon a parcel of property 
89.12 	which was classified class 3a, for the previous year's assessment and had a total market 
89.13 	value of $200,000 $500,000 or less for that same assessment shall be eligible to be 
89.14 	composed into a confession of judgment. Property qualifying under this subdivision 
89.15 	shall be subject to the same provisions as provided in this section except as provided 
89.16 	in paragraphs (b) to (d).
89.17 	(b) Current year taxes and penalty due at the time the confession of judgment 
89.18 	is entered must be paid.
89.19 	(c) The down payment must include all special assessments due in the current tax 
89.20 	year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties, 
89.21 	and interest accrued against the parcel. The balance remaining is payable in four equal 
89.22 	annual installments.
89.23 	(d) The amounts entered in judgment bear interest at the rate provided in section 
89.24 	279.03, subdivision 1a, commencing with the date the judgment is entered. The interest 
89.25 	rate is subject to change each year on the unpaid balance in the manner provided in section 
89.26 	279.03, subdivision 1a. 

89.27 	EFFECTIVE DATE. This section is effective for confessions of judgment entered 
89.28 	after June 30, 2007.

89.29 	Sec. 33. Minnesota Statutes 2006, section 280.39, is amended to read:
89.30 	280.39 DELINQUENT TAXES MAY BE PAID IN INVERSE ORDER.
89.31 	In any case where taxes for two or more years are delinquent against a parcel of land, 
89.32 	such taxes for one or more entire years, if held by the state, may be paid in the inverse 
89.33 	order to that in which the taxes were levied, with accrued penalties, interest, and costs 
90.1 	upon the taxes so paid, without payment of the taxes for the first of such years; provided, 
90.2 	that such payment shall not affect the lien of any unpaid taxes or tax judgment. Payments 
90.3 	for delinquent taxes for a part of a year may be accepted if payment is received under 
90.4 	section 290A.10, and must be applied in the order specified in this section.

90.5 	Sec. 34. Minnesota Statutes 2006, section 290A.10, is amended to read:
90.6 	290A.10 PROOF OF TAXES PAID.
90.7 		Subdivision 1.Generally. Every claimant who files a claim for relief for property 
90.8 	taxes payable shall include with the claim a property tax statement or a reproduction 
90.9 	thereof in a form deemed satisfactory by the commissioner of revenue indicating that 
90.10 	there are no delinquent property taxes on the homestead. Indication on the property tax 
90.11 	statement from the county treasurer that there are no delinquent taxes on the homestead 
90.12 	shall be sufficient proof. Taxes included in a confession of judgment under section 279.37
90.13 	shall not constitute delinquent taxes as long as the claimant is current on the payments 
90.14 	required to be made under section 279.37. 
90.15 		Subd. 2.Delinquent taxes. The governing body of a county may, by resolution, 
90.16 	allow claimants who would otherwise qualify for a refund, except for a property tax 
90.17 	delinquency under sections 279.02 and 279.03 on the homestead, to be eligible for 
90.18 	the refund but only if the refund is sent by electronic payment to the county where 
90.19 	the homestead on which property taxes are delinquent is located, to be applied to the 
90.20 	claimant's delinquent taxes under section 280.39.

90.21 	EFFECTIVE DATE. This section is effective for claims based on taxes payable in 
90.22 	2008 and thereafter.

90.23 	Sec. 35. Minnesota Statutes 2006, section 290C.07, is amended to read:
90.24 	290C.07 CALCULATION OF INCENTIVE PAYMENT.
90.25 	An approved claimant under the sustainable forest incentive program is eligible to 
90.26 	receive an annual payment. The payment shall equal the greater of:
90.27 	(1) the difference between the property tax that would be paid on the land using the 
90.28 	previous year's statewide average total township tax rate and the class rate for class 2b 
90.29 	timberland under section 273.13, subdivision 23, paragraph (b), if the land were valued 
90.30 	at (i) the average statewide timberland market value per acre calculated under section 
90.31 	290C.06, and (ii) the average statewide timberland current use value per acre calculated 
90.32 	under section 290C.02, subdivision 5; or
91.1 	(2) two-thirds of the property tax amount determined by using the previous year's 
91.2 	statewide average total township tax rate, the estimated market value per acre as calculated 
91.3 	in section 290C.06, and the class rate for 2b timberland under section 273.13, subdivision 
91.4 	23, paragraph (b); or
91.5 	(3) $1.50, provided that the payment shall be no less than $5 per acre for each acre 
91.6 	enrolled in the sustainable forest incentive program.

91.7 	EFFECTIVE DATE. This section is effective for payments made after June 30, 
91.8 	2007.

91.9 	Sec. 36. Minnesota Statutes 2006, section 473.446, subdivision 2, is amended to read:
91.10 		Subd. 2.Transit taxing district. The metropolitan transit taxing district is hereby 
91.11 	designated as that portion of the metropolitan transit area lying within the following 
91.12 	named cities, towns, or unorganized territory within the counties indicated:
91.13 	(a) Anoka County. Anoka, Blaine, Centerville, Columbia Heights, Coon Rapids, 
91.14 	Fridley, Circle Pines, Hilltop, Lexington, Lino Lakes, Spring Lake Park;
91.15 	(b) Carver County. Chanhassen, the city of Chaska;
91.16 	(c) Dakota County. Apple Valley, Burnsville, Eagan, Inver Grove Heights, Lilydale, 
91.17 	Mendota, Mendota Heights, Rosemount, South St. Paul, Sunfish Lake, West St. Paul;
91.18 	(d) Ramsey County. All of the territory within Ramsey County;
91.19 	(e) Hennepin County. Bloomington, Brooklyn Center, Brooklyn Park, Champlin, 
91.20 	Chanhassen, Crystal, Deephaven, Eden Prairie, Edina, Excelsior, Golden Valley, 
91.21 	Greenwood, Hopkins, Long Lake, Maple Grove, Medicine Lake, Minneapolis, 
91.22 	Minnetonka, Minnetonka Beach, Mound, New Hope, Orono, Osseo, Plymouth, Richfield, 
91.23 	Robbinsdale, St. Anthony, St. Louis Park, Shorewood, Spring Park, Tonka Bay, Wayzata, 
91.24 	Woodland, the unorganized territory of Hennepin County;
91.25 	(f) Scott County. Prior Lake, Savage, Shakopee;
91.26 	(g) Washington County. Baytown, the city of Stillwater, White Bear Lake, Bayport, 
91.27 	Birchwood, Cottage Grove, Dellwood, Lake Elmo, Landfall, Mahtomedi, Newport, 
91.28 	Oakdale, Oak Park Heights, Pine Springs, St. Paul Park, Willernie, Woodbury means the 
91.29 	metropolitan area.
91.30 	The Metropolitan Council in its sole discretion may provide transit service by 
91.31 	contract beyond the boundaries of the metropolitan transit taxing district or to cities and 
91.32 	towns within the taxing district which are receiving financial assistance under section 
91.33 	473.388, upon petition therefor by an interested city, township or political subdivision 
91.34 	within the metropolitan transit area. The Metropolitan Council may establish such 
91.35 	terms and conditions as it deems necessary and advisable for providing the transit 
92.1 	service, including such combination of fares and direct payments by the petitioner as 
92.2 	will compensate the council for the full capital and operating cost of the service and the 
92.3 	related administrative activities of the council. The amount of the levy made by any 
92.4 	municipality to pay for the service shall be disregarded when calculation of levies subject 
92.5 	to limitations is made, provided that cities and towns receiving financial assistance under 
92.6 	section 473.388 shall not make a special levy under this subdivision without having first 
92.7 	exhausted the available local transit funds as defined in section 473.388. The council shall 
92.8 	not be obligated to extend service beyond the boundaries of the taxing district, or to cities 
92.9 	and towns within the taxing district which are receiving financial assistance under section 
92.10 	473.388, under any law or contract unless or until payment therefor is received. 

92.11 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
92.12 	in 2008, and thereafter.

92.13 	Sec. 37. Minnesota Statutes 2006, section 473.446, subdivision 8, is amended to read:
92.14 		Subd. 8.State review. The commissioner of revenue shall certify the council's levy 
92.15 	limitation under this section to the council by August 1 of the levy year. The council 
92.16 	must certify its proposed property tax levy under this section to the commissioner of 
92.17 	revenue by September 1 of the levy year. The commissioner of revenue shall annually 
92.18 	determine whether the property tax for transit purposes certified by the council for levy 
92.19 	following the adoption of its proposed budget is within the levy limitation imposed by 
92.20 	subdivisionssubdivision 1 and 1b. Thecommissioner shall also annually determine 
92.21 	whether the transit tax imposed on all taxable property within the metropolitan transit area 
92.22 	but outside of the metropolitan transit taxing district is within the levy limitation imposed 
92.23 	by subdivision 1a. The determination must be completed prior to September 10 of each 
92.24 	year. If current information regarding market valuation in any county is not transmitted to 
92.25 	the commissioner in a timely manner, the commissioner may estimate the current market 
92.26 	valuation within that county for purposes of making the calculations.

92.27 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
92.28 	in 2008, and thereafter.

92.29 	Sec. 38. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243, 
92.30 	article 6, section 9, and Laws 2000, chapter 490, article 6, section 15, is amended to read:
92.31 	Sec. 3. TAX; PAYMENT OF EXPENSES.
 92.32 	(a) The tax levied by the hospital district under Minnesota Statutes, section 447.34, 
92.33 	must not be levied at a rate that exceeds 0.063 percent of taxable market value the amount 
93.1 	authorized to be levied under that section. The proceeds of the tax may be used for all 
93.2 	purposes of the hospital district, except as provided in paragraph (b).
93.3 	(b) 0.048 percent of taxable market value of tax in paragraph (a) may be used only 
93.4 	for acquisition, betterment, and maintenance of the district's hospital and nursing home 
93.5 	facilities and equipment, and not for administrative or salary expenses.
93.6 	(c) 0.015 percent of taxable market value of the tax in paragraph (a) may be used 
93.7 	solely for the purpose of capital expenditures as it relates to ambulance acquisitions for 
93.8 	the Cook ambulance service and the Orr ambulance service and not for administrative 
93.9 	or salary expenses.
93.10 	The part of the levy referred to in paragraph (c) (b) must be administered by the 
93.11 	Cook Hospital and passed on directly to the Cook area ambulance service board and the 
93.12 	city of Orr to be held in trust until funding for a new ambulance is needed by either the 
93.13 	Cook ambulance service or the Orr ambulance service.

93.14 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
93.15 	Statutes, section 645.021, subdivision 3, by the governing body of the Cook-Orr Hospital 
93.16 	District.

93.17 	Sec. 39. Laws 1989, chapter 211, section 8, subdivision 4, as amended by Laws 2002, 
93.18 	chapter 390, section 24, and Laws 2003, chapter 127, article 2, section 22, subdivision 4, 
93.19 	is amended to read:
93.20 		Subd. 4.Tax levy. The tax levied under Minnesota Statutes, section 447.34, shall 
93.21 	not exceed $300,000 for taxes levied in 2002. For taxes levied in 2003 and subsequent 
93.22 	years, the tax must not exceed the lesser of:
93.23 	(1) the product of the hospital district's property tax levy limitation for the previous 
93.24 	year determined under this subdivision, multiplied by 103 percent; or 
93.25 	(2) the product of the hospital district's property tax levy limitation for the previous 
93.26 	year determined under this subdivision multiplied by the ratio of the most recent available 
93.27 	annual medical care expenditure category of the revised Consumer Price Index, U.S. 
93.28 	citywide average, for all urban consumers prepared by the United States Department of 
93.29 	Labor to the same annual index for the previous year the amount authorized to be levied 
93.30 	under that section.
93.31 	The proceeds of the tax may be used for all purposes of the hospital district.

93.32 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
93.33 	Statutes, section 645.021, subdivision 3, by the governing body of the Cook County 
93.34 	Hospital District.

94.1 	Sec. 40. EDUCATION IMPROVEMENT ACCOUNT.
 94.2 	$78,000,000 of the proceeds of the tax under Minnesota Statutes, section 275.025, 
94.3 	for taxes payable in 2009 must be deposited in an education improvement account, which 
94.4 	is created in the general fund of the state treasury. $83,334,000 of the proceeds of the tax 
94.5 	under Minnesota Statutes, section 275.025, for taxes payable in 2010 and subsequent years 
94.6 	must be deposited in the education improvement account.

94.7 	Sec. 41. VALUATION OF AGRICULTURAL PROPERTY.
 94.8 	By October 1, 2007, the commissioner of revenue must develop a method of valuing 
94.9 	agricultural property that accurately reflects the actual value of the property by October 1, 
94.10 	2007. The commissioner must report and make specific recommendations to the chairs 
94.11 	of the committees and divisions of the senate and house of representatives that have 
94.12 	jurisdiction over taxes and property taxes.

94.13 	Sec. 42.  REPEALER.
 94.14 	Minnesota Statutes 2006, sections 275.025, subdivision 3; 279.01, subdivision 4; 
94.15 	and 473.4461, are repealed.

94.16 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
94.17 	in 2008, and thereafter.

94.18 	ARTICLE 6
94.19 	AIDS AND CREDITS; PROPERTY TAX REFUND

94.20 	Section 1. Minnesota Statutes 2006, section 97A.061, subdivision 2, is amended to 
94.21 	read:
94.22 		Subd. 2.Allocation. (a) Except as provided in subdivision 3, the county treasurer 
94.23 	shall allocate the payment among the county, towns, and school districts on the same basis 
94.24 	as if the payments were taxes on the land received in the year. Payment of a town's or a 
94.25 	school district's allocation must be made by the county treasurer to the town or school 
94.26 	district within 30 days of receipt of the payment to the county. The county's share of the 
94.27 	payment shall be deposited in the county general revenue fund.
94.28 	(b) The county treasurer of a county with a population over 39,000 but less than 
94.29 	42,000 in the 1950 federal census shall allocate the payment only among the towns and 
94.30 	school districts on the same basis as if the payments were taxes on the lands received 
94.31 	in the current year.
95.1 	(c) If a town received a payment in calendar year 2006 or thereafter under this 
95.2 	subdivision, and subsequently incorporated as a city, the city will continue to receive any 
95.3 	future year's allocations that would have been made to the town had it not incorporated, 
95.4 	provided that the payments will terminate if the governing body of the city passes an 
95.5 	ordinance that prohibits hunting within the boundaries of the city.

95.6 	EFFECTIVE DATE. This section is effective for aid payments made in 2007 
95.7 	and thereafter.

95.8 	Sec. 2. Minnesota Statutes 2006, section 273.1384, subdivision 1, is amended to read:
95.9 		Subdivision 1.Residential homestead market value credit. Each county auditor 
95.10 	shall determine a homestead credit for each class 1a, 1b, and 2a homestead property 
95.11 	within the county equal to 0.4 percent of the first $76,000 $86,000 of market value of 
95.12 	the property minus .09 .1 percent of the market value in excess of $76,000 $86,000. 
95.13 	The credit amount may not be less than zero. In the case of an agricultural or resort 
95.14 	homestead, only the market value of the house, garage, and immediately surrounding one 
95.15 	acre of land is eligible in determining the property's homestead credit. In the case of a 
95.16 	property that is classified as part homestead and part nonhomestead, (i) the credit shall 
95.17 	apply only to the homestead portion of the property, but (ii) if a portion of a property is 
95.18 	classified as nonhomestead solely because not all the owners occupy the property, not all 
95.19 	the owners have qualifying relatives occupying the property, or solely because not all the 
95.20 	spouses of owners occupy the property, the credit amount shall be initially computed as 
95.21 	if that nonhomestead portion were also in the homestead class and then prorated to the 
95.22 	owner-occupant's percentage of ownership. For the purpose of this section, when an 
95.23 	owner-occupant's spouse does not occupy the property, the percentage of ownership for 
95.24 	the owner-occupant spouse is one-half of the couple's ownership percentage.

95.25 	EFFECTIVE DATE. This section is effective for taxes payable in 2008 and 
95.26 	thereafter.

95.27 	Sec. 3. Minnesota Statutes 2006, section 273.1384, subdivision 2, is amended to read:
95.28 		Subd. 2.Agricultural homestead market value credit. Property classified as class 
95.29 	2a agricultural homestead is eligible for an agricultural credit. The credit is computed 
95.30 	using the property's agricultural credit market value, defined for this purpose as the 
95.31 	property's class 2a market value excluding the market value of the house, garage, and 
95.32 	immediately surrounding one acre of land. The credit is equal to 0.3 percent of the first 
95.33 	$115,000 $150,000 of the property's agricultural credit market value minus .05 percent of 
96.1 	the property's agricultural credit market value in excess of $115,000 $150,000, subject to a 
96.2 	maximum reduction of $115. In the case of property that is classified in part as class 2a 
96.3 	agricultural homestead and in part as class 2b nonhomestead farm land solely because not 
96.4 	all the owners occupy or farm the property, not all the owners have qualifying relatives 
96.5 	occupying or farming the property, or solely because not all the spouses of owners occupy 
96.6 	the property, the credit must be initially computed as if that nonhomestead agricultural 
96.7 	land was also classified as class 2a agricultural homestead and then prorated to the 
96.8 	owner-occupant's percentage of ownership.

96.9 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
96.10 	in 2008, and thereafter.

96.11 	Sec. 4. Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to read:
96.12 		Subd. 2.Homeowners. A claimant whose property taxes payable are in excess 
96.13 	of the percentage of the household income stated below shall pay an amount equal to 
96.14 	the percent of income shown for the appropriate household income level along with the 
96.15 	percent to be paid by the claimant of the remaining amount of property taxes payable. 
96.16 	The state refund equals the amount of property taxes payable that remain, up to the state 
96.17 	refund amount shown below.

96.18
96.19	Household Income
	Percent of Income
	Percent Paid by 
Claimant
	Maximum State 
Refund

96.20
96.21	$0 to 1,1891,399
	1.0 percent
	15 10 percent
		$1,450
$2,130
	
96.22
96.23	1,190 1,400 to 
2,379 2,799
	1.1 percent
	15 10 percent
		$1,450
$2,130
	
96.24
96.25	2,3802,800 to 
3,5894,219
	1.2 percent
	15 10 percent
		$1,410
$2,080
	
96.26
96.27	3,5904,220 to 
4,7895,629
	1.3 percent
	20 15 percent
		$1,410
$2,080
	
96.28
96.29	4,7905,630 to 
5,9797,029
	1.4 percent
	20 15 percent
		$1,360
$2,000
	
96.30
96.31	5,9807,030 to 
8,3699,839
	1.5 percent
	20 15 percent
		$1,360
$2,000
	
96.32
96.33	8,3709,840 to 
9,55911,239
	1.6 percent
	25 20 percent
		$1,310
$1,850
	
96.34
96.35	9,56011,240 to 
10,75912,649
	1.7 percent
	25 20 percent
		$1,310
$1,850
	
96.36
96.37	10,76012,650 to 
11,94914,049
	1.8 percent
	25 20 percent
		$1,260
$1,780
	
96.38
96.39	11,95014,050 to 
13,13915,449
	1.9 percent
	30 25 percent
		$1,260
$1,780
	
97.1
97.2	13,14015,450 to 
14,34916,869
	2.0 percent
	30 25 percent
		$1,210
$1,700
	
97.3
97.4	14,35016,870 to 
16,73919,679
	2.1 percent
	30 25 percent
		$1,210
$1,700
	
97.5
97.6	16,74019,680 to 
17,92921,079
	2.2 percent
	35 30 percent
		$1,160
$1,560
	
97.7
97.8	17,93021,080 to 
19,11922,469
	2.3 percent
	35 30 percent
		$1,160
$1,560
	
97.997.10
	19,12022,470 to 
20,31923,879
	2.4 percent
	35 30 percent
		$1,110
$1,500
	
97.11
97.12	20,32023,880 to 
25,09929,499
	2.5 percent
	40 35 percent
		$1,110
$1,500
	
97.13
97.14	25,10029,500 to 
28,67933,709
	2.6 percent
	40 35 percent
		$1,070
$1,450
	
97.15
97.16	28,68033,710 to 
35,84942,139
	2.7 percent
	40 35 percent
		$1,070
$1,450
	
97.17
97.18	35,85042,140 to 
41,81949,159
	2.8 percent
	45 40 percent
		$ 970
$1,310
	
97.19
97.20	41,82049,160 to 
47,79956,189
	3.0 percent
	45 40 percent
		$ 970
$1,310
	
97.21
97.22	47,80056,190 to 
53,77963,209
	3.2 percent
	45 40 percent
		$ 870
$1,170
	
97.23
97.24	53,78063,210 to 
59,74970,229
	3.5 percent
	50 45 percent
		$ 780
$1,010
	
97.25
97.26	59,75070,230 to 
65,72977,259
	4.0 percent
	50 45 percent
		$ 680
$880
	
97.27
97.28	65,73077,260 to 
69,31981,479
	4.0 percent
	50 45 percent
		$ 580
$750
	
97.29
97.30	69,32081,480 to 
71,71984,299
	4.0 percent
	50 45 percent
		$ 480
$620
	
97.31
97.32	71,72084,300 to 
74,61987,709
	4.0 percent
	50 45 percent
		$ 390
$510
	
97.33
97.34	74,62087,710 to 
77,51991,119
	4.0 percent
	50 45 percent
		$ 290
$370
	
97.35 	The payment made to a claimant shall be the amount of the state refund calculated 
97.36 	under this subdivision. No payment is allowed if the claimant's household income is 
97.37 	$77,520 $91,120 or more.

97.38 	EFFECTIVE DATE. This section is effective beginning with refunds based on 
97.39 	property taxes payable in 2008.

97.40 	Sec. 5. Minnesota Statutes 2006, section 290A.04, subdivision 2a, is amended to read:
97.41 		Subd. 2a.Renters. A claimant whose rent constituting property taxes exceeds the 
97.42 	percentage of the household income stated below must pay an amount equal to the percent 
97.43 	of income shown for the appropriate household income level along with the percent to 
97.44 	be paid by the claimant of the remaining amount of rent constituting property taxes. The 
98.1 	state refund equals the amount of rent constituting property taxes that remain, up to the 
98.2 	maximum state refund amount shown below.

98.3
98.4	Household Income
	Percent of Income
	Percent Paid by 
Claimant
	Maximum State 
Refund

98.5
98.6	$0 to 3,5894,219
	1.0 percent
	5 percent
		$1,190
 $1,400
	
98.7
98.8	3,5904,220 to 
4,7795,619
	1.0 percent
	10 percent
		$1,190
 $1,400
	
98.998.10
	4,7805,620 to 
5,9697,019
	1.1 percent
	10 percent
		$1,190
 $1,400
	
98.11
98.12	5,9707,020 to 
8,3699,839
	1.2 percent
	10 percent
		$1,190
 $1,400
	
98.13
98.14	8,3709,840 to 
10,75912,649
	1.3 percent
	15 percent
		$1,190
 $1,400
	
98.15
98.16	10,76012,650 to 
11,94914,049
	1.4 percent
	15 percent
		$1,190
 $1,400
	
98.17
98.18	11,95014,050 to 
13,13915,449
	1.4 percent
	20 percent
		$1,190
 $1,400
	
98.19
98.20	13,14015,450 to 
15,53918,269
	1.5 percent
	20 percent
		$1,190
 $1,400
	
98.21
98.22	15,54018,270 to 
16,72919,669
	1.6 percent
	20 percent
		$1,190
 $1,400
	
98.23
98.24	16,73019,670 to 
17,91921,059
	1.7 percent
	25 percent
		$1,190
$1,400 
	
98.25
98.26	17,92021,060 to 
20,31923,879
	1.8 percent
	25 percent
		$1,190
 $1,400
	
98.27
98.28	20,32023,880 to 
21,50925,279
	1.9 percent
	30 percent
		$1,190
 $1,400
	
98.29
98.30	21,51025,280 to 
22,69926,679
	2.0 percent
	30 percent
		$1,190
 $1,400
	
98.31
98.32	22,70026,680 to 
23,89928,089
	2.2 percent
	30 percent
		$1,190
 $1,400
	
98.33
98.34	23,90028,090 to 
25,08929,489
	2.4 percent
	30 percent
		$1,190
 $1,400
	
98.35
98.36	25,09029,490 to 
26,28930,899
	2.6 percent
	35 percent
		$1,190
 $1,400
	
98.37
98.38	26,29030,900 to 
27,48932,309
	2.7 percent
	35 percent
		$1,190
 $1,400
	
98.39
98.40	27,49032,310 to 
28,67933,709
	2.8 percent
	35 percent
		$1,190
 $1,400
	
98.41
98.42	28,68033,710 to 
29,86935,109
	2.9 percent
	40 percent
		$1,190
 $1,400
	
98.43
98.44	29,87035,110 to 
31,07936,529
	3.0 percent
	40 percent
		$1,190
 $1,400
	
98.45
98.46	31,08036,530 to 
32,26937,929
	3.1 percent
	40 percent
		$1,190
 $1,400
	
98.47
98.48	32,27037,930 to 
33,45939,329
	3.2 percent
	40 percent
		$1,190
 $1,400
	
99.1
99.2	33,46039,330 to 
34,64940,729
	3.3 percent
	45 percent
		$1,080
 $1,270
	
99.3
99.4	34,65040,730 to 
35,84942,139
	3.4 percent
	45 percent
		$ ........960 
 $1,130
	
99.5
99.6	35,85042,140 to 
37,04943,549
	3.5 percent
	45 percent
		$ ........830
 $980
	
99.7
99.8	37,05043,550 to 
38,23944,949
	3.5 percent
	50 percent
		$ ........720
 $850
	
99.999.10
	38,24044,950 to 
39,43946,359
	3.5 percent
	50 percent
		$ ........600 
 $710
	
99.11
99.12	38,44046,360 to 
40,62947,759
	3.5 percent
	50 percent
		$ ........360 
 $420
	
99.13
99.14	40,63047,760 to 
41,81949,159
	3.5 percent
	50 percent
		$ ........120
 $140
	
99.15 	The payment made to a claimant is the amount of the state refund calculated under 
99.16 	this subdivision. No payment is allowed if the claimant's household income is $41,820
99.17 	$49,160 or more.

99.18 	Sec. 6. Minnesota Statutes 2006, section 290A.04, subdivision 4, is amended to read:
99.19 		Subd. 4.Inflation adjustment. Beginning for property tax refunds payable in 
99.20 	calendar year 2002 2009, the commissioner shall annually adjust the dollar amounts of the 
99.21 	income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation. The 
99.22 	commissioner shall make the inflation adjustments in accordance with section 1(f) of the 
99.23 	Internal Revenue Code, except that for purposes of this subdivision the percentage increase 
99.24 	shall be determined from the year ending on June 30, 2000 2007, to the year ending on 
99.25 	June 30 of the year preceding that in which the refund is payable. The commissioner shall 
99.26 	use the appropriate percentage increase to annually adjust the income thresholds and 
99.27 	maximum refunds under subdivisions 2 and 2a for inflation without regard to whether or 
99.28 	not the income tax brackets are adjusted for inflation in that year. The commissioner shall 
99.29 	round the thresholds and the maximum amounts, as adjusted to the nearest $10 amount. If 
99.30 	the amount ends in $5, the commissioner shall round it up to the next $10 amount.
99.31 	The commissioner shall annually announce the adjusted refund schedule at the same 
99.32 	time provided under section  290.06. The determination of the commissioner under this 
99.33 	subdivision is not a rule under the Administrative Procedure Act. 

99.34 	Sec. 7. Minnesota Statutes 2006, section 477A.011, subdivision 36, is amended to read:
99.35 		Subd. 36.City aid base. (a) Except as otherwise provided in this subdivision, 
99.36 	"city aid base" is zero equal to the city aid base used to calculate the aid certified under 
99.37 	Minnesota Statutes 2002, section 477A.011, subdivision 36, for aid payable in 2003.
100.1 	(b) The city aid base for any city with a population less than 500 is increased by 
100.2 	$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount 
100.3 	of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
100.4 	increased by $40,000 for aids payable in calendar year 1995 only, provided that:
100.5 	(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
100.6 	(ii) the city portion of the tax capacity rate exceeds 100 percent; and
100.7 	(iii) its city aid base is less than $60 per capita.
100.8 	(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and 
100.9 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
100.10 	paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
100.11 	(i) the city has a population in 1994 of 2,500 or more;
100.12 	(ii) the city is located in a county, outside of the metropolitan area, which contains a 
100.13 	city of the first class;
100.14 	(iii) the city's net tax capacity used in calculating its 1996 aid under section 
100.15 	477A.013 is less than $400 per capita; and
100.16 	(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of 
100.17 	property located in the city is classified as railroad property.
100.18 	(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and 
100.19 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
100.20 	paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
100.21 	(i) the city was incorporated as a statutory city after December 1, 1993;
100.22 	(ii) its city aid base does not exceed $5,600; and
100.23 	(iii) the city had a population in 1996 of 5,000 or more.
100.24 	(e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the 
100.25 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
100.26 	paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:
100.27 	(i) the city had a population in 1996 of at least 50,000;
100.28 	(ii) its population had increased by at least 40 percent in the ten-year period ending 
100.29 	in 1996; and
100.30 	(iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.
100.31 	(f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and 
100.32 	thereafter, and the maximum amount of total aid it may receive under section 477A.013, 
100.33 	subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only, 
100.34 	provided that:
100.35 	(1) the city has a population that is greater than 1,000 and less than 2,500;
101.1 	(2) its commercial and industrial percentage for aids payable in 1999 is greater 
101.2 	than 45 percent; and
101.3 	(3) the total market value of all commercial and industrial property in the city 
101.4 	for assessment year 1999 is at least 15 percent less than the total market value of all 
101.5 	commercial and industrial property in the city for assessment year 1998.
101.6 	(g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and 
101.7 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
101.8 	paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
101.9 	(1) the city had a population in 1997 of 2,500 or more;
101.10 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
101.11 	477A.013 is less than $650 per capita;
101.12 	(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under 
101.13 	section 477A.013 is greater than 12 percent;
101.14 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
101.15 	20 percent of the amount that the formula aid of the city would have been if the need 
101.16 	increase percentage was 100 percent; and
101.17 	(5) the city aid base of the city used in calculating aid under section 477A.013
101.18 	is less than $7 per capita.
101.19 	(h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and 
101.20 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
101.21 	paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
101.22 	(1) the city has a population in 1997 of 2,000 or more;
101.23 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
101.24 	477A.013 is less than $455 per capita;
101.25 	(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is 
101.26 	greater than $195 per capita; and
101.27 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
101.28 	38 percent of the amount that the formula aid of the city would have been if the need 
101.29 	increase percentage was 100 percent.
101.30 	(i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and 
101.31 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
101.32 	paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
101.33 	(1) the city has a population in 1998 that is greater than 200 but less than 500;
101.34 	(2) the city's revenue need used in calculating aids payable in 2000 was greater 
101.35 	than $200 per capita;
102.1 	(3) the city net tax capacity for the city used in calculating aids available in 2000 
102.2 	was equal to or less than $200 per capita;
102.3 	(4) the city aid base of the city used in calculating aid under section 477A.013
102.4 	is less than $65 per capita; and
102.5 	(5) the city's formula aid for aids payable in 2000 was greater than zero.
102.6 	(j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and 
102.7 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
102.8 	paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
102.9 	(1) the city had a population in 1998 that is greater than 200 but less than 500;
102.10 	(2) the city's commercial industrial percentage used in calculating aids payable in 
102.11 	2000 was less than ten percent;
102.12 	(3) more than 25 percent of the city's population was 60 years old or older according 
102.13 	to the 1990 census;
102.14 	(4) the city aid base of the city used in calculating aid under section 477A.013
102.15 	is less than $15 per capita; and
102.16 	(5) the city's formula aid for aids payable in 2000 was greater than zero.
102.17 	(k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and 
102.18 	by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of 
102.19 	total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
102.20 	increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002 
102.21 	only, provided that:
102.22 	(1) the net tax capacity of the city used in calculating its 2000 aid under section 
102.23 	477A.013 is less than $810 per capita;
102.24 	(2) the population of the city declined more than two percent between 1988 and 1998;
102.25 	(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is 
102.26 	greater than $240 per capita; and
102.27 	(4) the city received less than $36 per capita in aid under section 477A.013, 
102.28 	subdivision 9, for aids payable in 2000.
102.29 	(l) The city aid base for a city with a population of 10,000 or more which is located 
102.30 	outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the 
102.31 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
102.32 	paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to 
102.33 	the lesser of:
102.34 	(1)(i) the total population of the city, as determined by the United States Bureau of 
102.35 	the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
102.36 	(2) $2,500,000.
103.1 	(m) The city aid base is increased by $50,000 in 2002 and thereafter, and the 
103.2 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
103.3 	paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
103.4 	(1) the city is located in the seven-county metropolitan area;
103.5 	(2) its population in 2000 is between 10,000 and 20,000; and
103.6 	(3) its commercial industrial percentage, as calculated for city aid payable in 2001, 
103.7 	was greater than 25 percent.
103.8 	(n) The city aid base for a city is increased by $150,000 in calendar years 2002 
103.9 	to 2011 and the maximum amount of total aid it may receive under section 477A.013, 
103.10 	subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2002 only, 
103.11 	provided that:
103.12 	(1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
103.13 	(2) its home county is located within the seven-county metropolitan area;
103.14 	(3) its pre-1940 housing percentage is less than 15 percent; and
103.15 	(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 
103.16 	per capita.
103.17 	(o) The city aid base for a city is increased by $200,000 beginning in calendar 
103.18 	year 2003 and the maximum amount of total aid it may receive under section 477A.013, 
103.19 	subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only, 
103.20 	provided that the city qualified for an increase in homestead and agricultural credit aid 
103.21 	under Laws 1995, chapter 264, article 8, section 18.
103.22 	(p) The city aid base for a city is increased by $200,000 in 2004 only and the 
103.23 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 
103.24 	also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear 
103.25 	dry cask storage facility.
103.26 	(q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the 
103.27 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
103.28 	by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster 
103.29 	designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by 
103.30 	more than 40 percent between 1990 and 2000.
103.31 	(r) (c) The city aid base for a city is increased by $25,000 $30,000 in 2006 only
103.32 	2008 and thereafter, and the maximum total aid it may receive under section 477A.013, 
103.33 	subdivision 9, is also increased by $25,000 $30,000 in calendar year 2006 2008 only if 
103.34 	the city had a population in 2003 of at least 1,000 and has a state park for which the city 
103.35 	provides rescue services and which comprised at least 14 percent of the total geographic 
103.36 	area included within the city boundaries in 2000.
104.1 	(s) (d) The city aid base for a city with a population less than 5,000 is increased in 
104.2 	2006 2008 and thereafter and the minimum and maximum amount of total aid it may 
104.3 	receive under this section is also increased in calendar year 2006 only by an amount 
104.4 	equal to $6 $9 multiplied by its population.
104.5 	(t) (e) The city aid base for a city is increased by $80,000 in 2007 only and thereafter
104.6 	and the minimum and maximum amount of total aid it may receive under section 
104.7 	477A.013, subdivision 9, is also increased by $80,000 in calendar year 2007 only, if, 
104.8 	as of May 1, 2006:
104.9 	(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed 
104.10 	to be placed in trust status as tax-exempt Indian land;
104.11 	(2) the placement of the land is being challenged administratively or in court; and 
104.12 	(3) due to the challenge, the land proposed to be placed in trust is still on the tax 
104.13 	rolls as of May 1, 2006.
104.14 	(u) (f) The city aid base for a city is increased by $100,000 in 2007 and thereafter 
104.15 	and the minimum and maximum total amount of aid it may receive under this section is 
104.16 	also increased in calendar year 2007 only, provided that:
104.17 	(1) the city has a 2004 estimated population greater than 200 but less than 2,000;
104.18 	(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
104.19 	(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids 
104.20 	payable in 2006 was greater than 110 percent; and
104.21 	(4) it is located in a county where at least 15,000 acres of land are classified as 
104.22 	tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.

104.23 	EFFECTIVE DATE. This section is effective beginning with aids payable in 2008.

104.24 	Sec. 8. Minnesota Statutes 2006, section 477A.0124, subdivision 4, is amended to read:
104.25 		Subd. 4.County tax-base equalization aid. (a) For 2006 and subsequent years, 
104.26 	the money appropriated to county tax-base equalization aid each calendar year, after the 
104.27 	payment under paragraph (f), shall be apportioned among the counties according to each 
104.28 	county's tax-base equalization aid factor.
104.29 	(b) A county's tax-base equalization aid factor is equal to the amount by which (i) 
104.30 	$185 $215 times the county's population, exceeds (ii) 9.45 8.33 percent of the county's 
104.31 	net tax capacity.
104.32 	(c) In the case of a county with a population less than 10,000, the factor determined 
104.33 	in paragraph (b) shall be multiplied by a factor of three.
104.34 	(d) In the case of a county with a population greater than or equal to 10,000, but less 
104.35 	than 12,500, the factor determined in paragraph (b) shall be multiplied by a factor of two.
105.1 	(e) In the case of a county with a population greater than 500,000, the factor 
105.2 	determined in paragraph (b) shall be multiplied by a factor of 0.25.
105.3 	(f) Before the money appropriated to county base equalization aid is apportioned 
105.4 	among the counties as provided in paragraph (a), an amount up to $73,259 is allocated 
105.5 	annually to Anoka County and up to $59,664 is annually allocated to Washington County 
105.6 	for the county to pay postretirement costs of health insurance premiums for court 
105.7 	employees. The allocation under this paragraph is in addition to the allocations under 
105.8 	paragraphs (a) to (e).

105.9 	Sec. 9. Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:
105.10 		Subd. 5.County transition aid. (a) For 2005, a county is eligible for transition 
105.11 	aid equal to the amount, if any, by which:
105.12 	(1) the difference between:
105.13 	(i) the aid the county received under subdivision 1 in 2004, divided by the total aid 
105.14 	paid to all counties under subdivision 1, multiplied by $205,000,000; and
105.15 	(ii) the amount of aid the county is certified to receive in 2005 under subdivisions 
105.16 	3 and 4;
105.17 	exceeds:
105.18 	(2) three percent of the county's adjusted net tax capacity.
105.19 	A county's aid under this paragraph may not be less than zero.
105.20 	(b) In 2006, a county is eligible to receive two-thirds of the transition aid it received 
105.21 	in 2005.
105.22 	(c) In 2007 and subsequent years, a county is eligible to receive one-third of the 
105.23 	transition aid it received in 2005.
105.24 	(d) No county shall receive aid under this subdivision after 2007.

105.25 	Sec. 10. Minnesota Statutes 2006, section 477A.013, subdivision 1, is amended to read:
105.26 		Subdivision 1.Towns. In 2002, no In 2008 and subsequent years, each town is 
105.27 	eligible for a distribution under this subdivision equal to 40 percent of the amount of 
105.28 	homestead and agricultural credit aid reimbursement it received under Minnesota Statutes 
105.29 	2000, section 273.1398, in calendar year 2001.

105.30 	Sec. 11. Minnesota Statutes 2006, section 477A.013, subdivision 8, is amended to read:
105.31 		Subd. 8.City formula aid. In calendar year 2004 2008 and subsequent years, the 
105.32 	formula aid for a city is equal to the need increase percentage multiplied by the difference 
105.33 	between (1) the city's revenue need multiplied by its population, and (2) the sum of the 
106.1 	city's net tax capacity multiplied by the tax effort rate; the taconite aids under sections 
106.2 	298.28 and 298.282 to any city except a city directly impacted by a taconite mine or plant, 
106.3 	multiplied by the following percentages:
106.4 	(i) zero percent for aids payable in 2004;
106.5 	(ii) 25 percent for aids payable in 2005;
106.6 	(iii) 50 percent for aids payable in 2006;
106.7 	(iv) 75 percent for aids payable in 2007; and
106.8 	(v) 100 percent for aids payable in 2008 and thereafter.
106.9 	For purposes of this subdivision, "a city directly impacted by a taconite mine or 
106.10 	plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6) 
106.11 	Silver Bay, or (7) Virginia.
106.12 	No city may have a formula aid amount less than zero. The need increase percentage 
106.13 	must be the same for all cities.
106.14 	The applicable need increase percentage must be calculated by the Department of 
106.15 	Revenue so that the total of the aid under subdivision 9 equals the total amount available 
106.16 	for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions 
106.17 	4 and 5.

106.18 	Sec. 12. Minnesota Statutes 2006, section 477A.013, subdivision 9, is amended to read:
106.19 		Subd. 9.City aid distribution. (a) In calendar year 2002 and thereafter 2009, each 
106.20 	city shall receive an aid distribution equal to the sum of (1) the city formula aid under 
106.21 	subdivision 8, and (2) its city aid base, and (3) one-half of the difference between its total 
106.22 	aid in the previous year under this section and its city aid base in the previous year. For aids 
106.23 	payable in 2010 and thereafter, each city shall receive an aid distribution equal to the sum 
106.24 	of (1) the city formula aid under subdivision 8, (2) its city aid base, and (3) its formula aid 
106.25 	under subdivision 8 in the previous year, prior to any adjustments under this subdivision.
106.26 	(b) For aids payable in 2005 2008 and thereafter, the total aid for any city shall 
106.27 	not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid 
106.28 	distribution $56 per capita  plus (2) its total aid in the previous year in the case of a city 
106.29 	that receives a distribution under section 477A.011, subdivision 36, paragraph (d), the 
106.30 	amount it receives under that provision. For aids payable in 2005 and thereafter 2008, the 
106.31 	total aid for any city with a population of 2,500 or more may not decrease from its total 
106.32 	aid under this section in the previous year by an amount greater than ten percent of its net 
106.33 	levy in the year prior to the aid distribution.
106.34 	(c) For aids payable in 2004 only, the total aid for a city with a population less 
106.35 	than 2,500 may not be less than the amount it was certified to receive in 2003 minus the 
107.1 	greater of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special 
107.2 	Session chapter 21, article 5, or (2) five percent of its 2003 aid amount.For aids payable 
107.3 	in 2005 and thereafter, the total aid for a city with a population less than 2,500 must not be 
107.4 	less than the amount it was certified to receive in the previous year minus five percent 
107.5 	of its 2003 certified aid amount.
107.6 	(d) If a city's net tax capacity used in calculating aid under this section has decreased 
107.7 	in any year by more than 25 percent from its net tax capacity in the previous year due to 
107.8 	property becoming tax-exempt Indian land, the city's maximum allowed aid increase 
107.9 	under paragraph (b) shall be increased by an amount equal to (1) the city's tax rate in the 
107.10 	year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 
107.11 	resulting from the property becoming tax exempt.

107.12 	Sec. 13. Minnesota Statutes 2006, section 477A.03, subdivision 2a, is amended to read:
107.13 		Subd. 2a.Cities. For aids payable in 2004, the total aids paid under section 
107.14 	477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the 
107.15 	total aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For 
107.16 	aids payable in 2006 and thereafter 2007, the total aids paid under section 477A.013, 
107.17 	subdivision 9, is limited to $485,052,000.
107.18 	For aids payable in 2008 and thereafter, the total aids paid under section 477A.013, 
107.19 	subdivision 9, is limited to $635,052,000.

107.20 	Sec. 14. Minnesota Statutes 2006, section 477A.03, subdivision 2b, is amended to read:
107.21 		Subd. 2b.Counties. (a) For aids payable in calendar year 2005 and thereafter to 
107.22 	2007, the total aids paid to counties under section 477A.0124, subdivision 3, are limited to 
107.23 	$100,500,000. For aids payable in calendar year 2008, the total aids paid to counties under 
107.24 	section 477A.0124, subdivision 3, are limited to $130,500,000. For aids payable in 2009 
107.25 	and subsequent years, the total aid limitation shall be the amount of the previous year's 
107.26 	limitation, increased by the percentage increase determined for the year under section 
107.27 	477A.145. Each calendar year, $500,000 shall be retained by the commissioner of revenue 
107.28 	to make reimbursements to the commissioner of finance for payments made under section 
107.29 	611.27. For calendar year 2004, the amount shall be in addition to the payments authorized 
107.30 	under section 477A.0124, subdivision 1. For calendar year 2005 and subsequent 
107.31 	years, the amount shall be deducted from the appropriation under this paragraph. The 
107.32 	reimbursements shall be to defray the additional costs associated with court-ordered 
107.33 	counsel under section 611.27. Any retained amounts not used for reimbursement in a year 
108.1 	shall be included in the next distribution of county need aid that is certified to the county 
108.2 	auditors for the purpose of property tax reduction for the next taxes payable year.
108.3 	(b) For aids payable in 2005, the total aids under section 477A.0124, subdivision 4, 
108.4 	are limited to $105,000,000. For aids payable in 2006 and thereafter 2007, the total aid 
108.5 	under section 477A.0124, subdivision 4, is limited to $105,132,923. For aids payable in 
108.6 	2008, the total aid under section 477A.0124, subdivision 4, is limited to $135,132,923. 
108.7 	For aids payable in 2009 and subsequent years, the total aid limitation shall be the amount 
108.8 	of the previous year's limitation, increased by the percentage increase determined for the 
108.9 	year under section 477A.145. The commissioner of finance shall bill the commissioner of 
108.10 	revenue for the cost of preparation of local impact notes as required by section 3.987, not 
108.11 	to exceed $207,000 in fiscal year 2004 and thereafter. The commissioner of education 
108.12 	shall bill the commissioner of revenue for the cost of preparation of local impact notes 
108.13 	for school districts as required by section 3.987, not to exceed $7,000 in fiscal year 2004 
108.14 	and thereafter. The commissioner of revenue shall deduct the amounts billed under 
108.15 	this paragraph from the appropriation under this paragraph. The amounts deducted are 
108.16 	appropriated to the commissioner of finance and the commissioner of education for the 
108.17 	preparation of local impact notes.

108.18 	Sec. 15. Minnesota Statutes 2006, section 477A.12, subdivision 1, is amended to read:
108.19 		Subdivision 1.Types of land; payments. (a) As an offset for expenses incurred 
108.20 	by counties and towns in support of natural resources lands, the following amounts are 
108.21 	annually appropriated to the commissioner of natural resources from the general fund for 
108.22 	transfer to the commissioner of revenue. The commissioner of revenue shall pay the 
108.23 	transferred funds to counties as required by sections 477A.11 to 477A.145. The amounts 
108.24 	are:
108.25 	(1) for acquired natural resources land, $3, as adjusted for inflation under section 
108.26 	477A.145, multiplied by the total number of acres of acquired natural resources land or, 
108.27 	at the county's option three-fourths of one percent of the appraised value of all acquired 
108.28 	natural resources land in the county, whichever is greater;
108.29 	(2) 75 cents, as adjusted for inflation under section 477A.145, multiplied by the 
108.30 	number of acres of county-administered other natural resources land;
108.31 	(3) 75 cents $3, as adjusted for inflation under section 477A.145, multiplied by 
108.32 	the total number of acres of land utilization project land that is located entirely within a 
108.33 	wildlife management area as described in section 86A.05, subdivision 8; and 75 cents, as 
108.34 	adjusted for inflation under section 477A.145, multiplied by the total number of acres of 
108.35 	land utilization project land not located within a wildlife management area; and
109.1 	(4) 37.5 cents, as adjusted for inflation under section 477A.145, multiplied by the 
109.2 	number of acres of commissioner-administered other natural resources land located in 
109.3 	each county as of July 1 of each year prior to the payment year.
109.4 	(b) The amount determined under paragraph (a), clause (1), is payable for land 
109.5 	that is acquired from a private owner and owned by the Department of Transportation 
109.6 	for the purpose of replacing wetland losses caused by transportation projects, but only 
109.7 	if the county contains more than 500 acres of such land at the time the certification is 
109.8 	made under subdivision 2.

109.9 	EFFECTIVE DATE. This section is effective for payments in 2008 and thereafter.

109.10 	Sec. 16. Minnesota Statutes 2006, section 477A.14, subdivision 1, is amended to read:
109.11 		Subdivision 1.General distribution. Except as provided in subdivision 2 or in 
109.12 	section 97A.061, subdivision 5, 40 percent of the total payment to the county shall be 
109.13 	deposited in the county general revenue fund to be used to provide property tax levy 
109.14 	reduction. The remainder shall be distributed by the county in the following priority:
109.15 	(a) 37.5 cents, as adjusted for inflation under section 477A.145, for each acre 
109.16 	of county-administered other natural resources land shall be deposited in a resource 
109.17 	development fund to be created within the county treasury for use in resource 
109.18 	development, forest management, game and fish habitat improvement, and recreational 
109.19 	development and maintenance of county-administered other natural resources land. Any 
109.20 	county receiving less than $5,000 annually for the resource development fund may elect to 
109.21 	deposit that amount in the county general revenue fund;
109.22 	(b) From the funds remaining, within 30 days of receipt of the payment to the county, 
109.23 	the county treasurer shall pay each organized township 30 cents, as adjusted for inflation 
109.24 	under section 477A.145, for each acre of acquired natural resources land, each acre of 
109.25 	land utilization project land located entirely within a wildlife management area, and each 
109.26 	acre of land described in section 477A.12, subdivision 1, paragraph (b), and 7.5 cents, as 
109.27 	adjusted for inflation under section 477A.145, for each acre of other natural resources land 
109.28 	and each acre of land utilization project land  not located within a wildlife management 
109.29 	area, located within its boundaries. Payments for natural resources lands not located in 
109.30 	an organized township shall be deposited in the county general revenue fund. Payments 
109.31 	to counties and townships pursuant to this paragraph shall be used to provide property 
109.32 	tax levy reduction, except that of the payments for natural resources lands not located in 
109.33 	an organized township, the county may allocate the amount determined to be necessary 
109.34 	for maintenance of roads in unorganized townships. Provided that, if the total payment 
109.35 	to the county pursuant to section 477A.12 is not sufficient to fully fund the distribution 
110.1 	provided for in this clause, the amount available shall be distributed to each township and 
110.2 	the county general revenue fund on a pro rata basis; and
110.3 	(c) Any remaining funds shall be deposited in the county general revenue fund. 
110.4 	Provided that, if the distribution to the county general revenue fund exceeds $35,000, the 
110.5 	excess shall be used to provide property tax levy reduction.

110.6 	EFFECTIVE DATE. This section is effective for payments in 2008 and thereafter.

110.7 	Sec. 17. Laws 2006, chapter 259, article 11, section 3, is amended to read:
110.8 	Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT, 
110.9 	PROPERTY TAX REIMBURSEMENT; 2006 ONLY.
 110.10 		Subdivision 1.Aid appropriation. $600,000 is appropriated annually from the 
110.11 	general fund to the commissioner of revenue to be used to make payments to compensate 
110.12 	for the loss of property tax revenue due to the placement of land located in the city of 
110.13 	Mahnomen that was put in trust status by the United Stated Department of the Interior, 
110.14 	Bureau of Indian Affairs, during calendar year 2006. The commissioner shall pay the 
110.15 	county of Mahnomen, $450,000; the city of Mahnomen, $80,000; and Independent School 
110.16 	District No. 432, Mahnomen, $70,000, provided that these payments shall be reduced 
110.17 	in 2007 and any subsequent year by the amount, if any, of payments to that political 
110.18 	subdivision made during the previous calendar year by the owner of the land that was 
110.19 	placed in trust. The payments shall be made on July 20,of 2006, and each subsequent year.
110.20 		Subd. 2.School district tax base adjustments. The Department of Revenue 
110.21 	must reduce the referendum market value and the adjusted net tax capacity certified for 
110.22 	assessment year 2005 used to calculate school levies for taxes payable in 2007 and 
110.23 	subsequent years for Independent School District No. 432, Mahnomen, by the amounts of 
110.24 	any values attributable to property that is no longer subject to property taxation because 
110.25 	the land has been placed in trust in calendar year 2006 through action of the United States 
110.26 	Department of Interior, Bureau of Indian Affairs. The Mahnomen County auditor must 
110.27 	certify the reductions in value to the Department of Revenue in the form and manner 
110.28 	specified by the Department of Revenue.

110.29 	Sec. 18. STUDY OF AIDS TO LOCAL GOVERNMENTS.
 110.30 	The chairs of the senate and house of representatives committees on taxes shall each 
110.31 	appoint five members to a study group of the tax committees to examine the current 
110.32 	system of aids to local governments and make recommendations on improvements to 
110.33 	the system. Of the five members appointed by each chair, two must be members of the 
110.34 	tax committee, one who is a majority party member and one who is a minority party 
111.1 	member. The remaining members must represent local units of government. The chairs 
111.2 	of the divisions of the tax committees having jurisdiction over property taxes shall also 
111.3 	be members and shall serve as cochairs of the study group. The group must report on its 
111.4 	specific recommendations to the legislature by December 15, 2008.

111.5 	ARTICLE 7
111.6 	MINERALS

111.7 	Section 1. Minnesota Statutes 2006, section 276A.01, subdivision 3, is amended to 
111.8 	read:
111.9 		Subd. 3.Commercial-industrial property. "Commercial-industrial property" 
111.10 	means the following categories of property, as defined in section 273.13, excluding that 
111.11 	portion of the property (i) that may, by law, constitute the tax base for a tax increment 
111.12 	pledged pursuant to section 469.042 or 469.162 or sections 469.174 to 469.178, 
111.13 	certification of which was requested prior to May 1, 1996, to the extent and while the tax 
111.14 	increment is so pledged; or (ii) that is exempt from taxation under section 272.02: 
111.15 	(1) that portion of class 5 property consisting of unmined iron ore and low-grade 
111.16 	iron-bearing formations as defined in section 273.14, tools, implements, and machinery, 
111.17 	except the portion of high voltage transmission lines, the value of which is deducted from 
111.18 	net tax capacity under section 273.425; and 
111.19 	(2) that portion of class 3 and class 5 property which is either used or zoned for use 
111.20 	for any commercial or industrial purpose, including property that becomes taxable under 
111.21 	section 6, except for such property which is, or, in the case of property under construction, 
111.22 	will when completed be used exclusively for residential occupancy and the provision of 
111.23 	services to residential occupants thereof. Property must be considered as used exclusively 
111.24 	for residential occupancy only if each of not less than 80 percent of its occupied residential 
111.25 	units is, or, in the case of property under construction, will when completed be occupied 
111.26 	under an oral or written agreement for occupancy over a continuous period of not less 
111.27 	than 30 days.
111.28 	If the classification of property prescribed by section 273.13 is modified by 
111.29 	legislative amendment, the references in this subdivision are to the successor class or 
111.30 	classes of property, or portions thereof, that include the kinds of property designated 
111.31 	in this subdivision. 

111.32 	Sec. 2. Minnesota Statutes 2006, section 276A.04, is amended to read:
111.33 	276A.04 INCREASE IN NET TAX CAPACITY.
112.1 	By July 15 of 1997 and each subsequent year, the auditor of each county in the 
112.2 	area shall determine the amount, if any, by which the net tax capacity determined in the 
112.3 	preceding year pursuant to section 276A.03, of commercial-industrial property subject to 
112.4 	taxation within each municipality in the county exceeds the net tax capacity in 1995 of 
112.5 	commercial-industrial property subject to taxation within that municipality, including the 
112.6 	total net tax capacity of property that becomes taxable under section 6. If a municipality is 
112.7 	located in two or more counties within the area, the auditors of those counties shall certify 
112.8 	the data required by section 276A.03 to the county auditor responsible for allocating 
112.9 	the levies of that municipality between or among the affected counties. That county 
112.10 	auditor shall determine the amount of the net excess, if any, for the municipality under 
112.11 	this section, and certify that amount under section 276A.05. The increase in total net tax 
112.12 	capacity determined by this section must be reduced by the amount of any decreases in 
112.13 	the net tax capacity of commercial-industrial property resulting from any court decisions, 
112.14 	court-related stipulation agreements, or abatements for a prior year, and only in the 
112.15 	amount of such decreases made during the 12-month period ending on May 1 of the 
112.16 	current assessment year, where the decreases, if originally reflected in the determination of 
112.17 	a prior year's net tax capacity under section 276A.03, would have resulted in a smaller 
112.18 	contribution from the municipality in that year. An adjustment for the decreases shall be 
112.19 	made only if the municipality made a contribution in a prior year based on the higher net 
112.20 	tax capacity of the commercial-industrial property. 

112.21 	Sec. 3. Minnesota Statutes 2006, section 298.22, is amended by adding a subdivision 
112.22 	to read:
112.23 		Subd. 5a.Forest trust. The board may purchase forest lands in the taconite 
112.24 	assistance area under section 273.1341 with funds specifically authorized for the purchase. 
112.25 	All of these forest lands must be held in trust for the benefit of the citizens of the area as 
112.26 	the Iron Range Miners' Memorial Forest. The board may use the forest trust lands for 
112.27 	recreation and economic uses. The board must deposit the proceeds from the sale of 
112.28 	timber or removal of gravel or other minerals from these forest lands into an Iron Range 
112.29 	Miners' Memorial Forest account established by the board. By majority vote of the board, 
112.30 	money in the Iron Range Miners' Memorial Forest account may be transferred into the 
112.31 	Douglas J. Johnson economic protection trust fund under sections 298.291 to 298.294.

112.32 	Sec. 4. Minnesota Statutes 2006, section 298.227, is amended to read:
112.33 	298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
113.1 		Subdivision 1.Fund for producers. An amount equal to that distributed pursuant 
113.2 	to each taconite producer's taxable production and qualifying sales under section 298.28, 
113.3 	subdivision 9a, shall be held by the Iron Range Resources and Rehabilitation Board in 
113.4 	a separate taconite economic development fund for each taconite and direct reduced 
113.5 	ore producer.
113.6 		Subd. 2.Committee review. Money from the fund for each producer shall be 
113.7 	released by the commissioner after review by a joint committee consisting of an equal 
113.8 	number of representatives of the salaried employees and the nonsalaried production and 
113.9 	maintenance employees of that producer. The District 11 director of the United States 
113.10 	Steelworkers of America, on advice of each local employee president, shall select 
113.11 	the employee members. In nonorganized operations, the employee committee shall be 
113.12 	elected by the nonsalaried production and maintenance employees. The review must be 
113.13 	completed no later than six months after the producer presents a proposal for expenditure 
113.14 	of the funds to the committee.
113.15 		Subd. 3.Release of funds. The funds held pursuant to this section may be 
113.16 	released only for acquisition of equipment and facilities for the producer or for research 
113.17 	and development in Minnesota on new mining, or taconite, iron, or steel production 
113.18 	technology, but only if the producer provides a matching expenditure to be used for 
113.19 	the same purpose of at least 50 percent of the distribution based on 14.7 cents per ton 
113.20 	beginning with distributions in 2002.
113.21 		Subd. 4.Limitation. The amount that may be released to a producer under this 
113.22 	section in any year is subject to the following limitation:
113.23 	(1) in a calendar year following a calendar year during which the producer's total 
113.24 	production is less than 3,000,000 tons, the maximum distribution is an amount equal to 
113.25 	30.1 cents per ton;
113.26 	(2) in a calendar year following a calendar year during which the producer's 
113.27 	total production is at least 3,000,000 tons and less than 8,000,001 tons, the maximum 
113.28 	distribution is $903,000; and
113.29 	(3) in a calendar year following a calendar year during which the producer's total 
113.30 	production is in excess of 8,000,000 tons, the maximum distribution is $903,000 plus 60.2 
113.31 	cents for every ton by which the distribution exceeds 8,000,000 tons.
113.32 		Subd. 5.Repayment required. If a producer uses money from the fund to procure 
113.33 	haulage trucks, mobile equipment, or mining shovels, and the producer removes the piece 
113.34 	of equipment from the taconite tax relief area defined in section 273.134 within ten years 
113.35 	from the date of receipt of the money from the fund, a portion of the money granted 
113.36 	from the fund must be repaid to the taconite economic development fund. The portion 
114.1 	of the money to be repaid is 100 percent of the grant if the equipment is removed from 
114.2 	the taconite tax relief area within 12 months after receipt of the money from the fund, 
114.3 	declining by ten percent for each of the subsequent nine years during which the equipment 
114.4 	remains within the taconite tax relief area.
114.5 		Subd. 6.Sale of facility. If a taconite production facility is sold after operations at 
114.6 	the facility had ceased, any money remaining in the fund for the former producer may be 
114.7 	released to the purchaser of the facility on the terms otherwise applicable to the former 
114.8 	producer under this section.
114.9 		Subd. 7.Other distributions.  If a producer fails to provide matching funds for 
114.10 	a proposed expenditure within six months after the commissioner approves release of 
114.11 	the funds, the funds are available for release to another producer in proportion to the 
114.12 	distribution provided and under the conditions of this section. Any portion of the fund 
114.13 	which is not released by the commissioner within two years of its deposit in the fund shall 
114.14 	be divided between the taconite environmental protection fund created in section 298.223
114.15 	and the Douglas J. Johnson economic protection trust fund created in section 298.292 for 
114.16 	placement in their respective special accounts. Two-thirds of the unreleased funds shall be 
114.17 	distributed to the taconite environmental protection fund and one-third to the Douglas J. 
114.18 	Johnson economic protection trust fund. 

114.19 	EFFECTIVE DATE. This section is effective for distributions in 2008 and 
114.20 	thereafter.

114.21 	Sec. 5. Minnesota Statutes 2006, section 298.24, subdivision 1, is amended to read:
114.22 		Subdivision 1.Imposed; calculation. (a) For concentrate produced in 2001, 2002, 
114.23 	and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and 
114.24 	quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon 
114.25 	the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore 
114.26 	concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the 
114.27 	same rate imposed for concentrates produced in 2004.
114.28 	(b) For concentrates produced in 2006 and subsequent years, the tax rate shall be 
114.29 	equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate 
114.30 	multiplied by the percentage increase in the implicit price deflator from the fourth quarter 
114.31 	of the second preceding year to the fourth quarter of the preceding year. "Implicit price 
114.32 	deflator" means the implicit price deflator for the gross domestic product prepared by the 
114.33 	Bureau of Economic Analysis of the United States Department of Commerce.
114.34 	(c) On concentrates produced in 1997 and thereafter, an additional tax is imposed 
114.35 	equal to three cents per gross ton of merchantable iron ore concentrate for each one 
115.1 	percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees 
115.2 	Fahrenheit.
115.3 	(d) The tax shall be imposed on the average of the production for the current year 
115.4 	and the previous two years. The rate of the tax imposed will be the current year's tax rate. 
115.5 	This clause shall not apply in the case of the closing of a taconite facility if the property 
115.6 	taxes on the facility would be higher if this clause and section 298.25 were not applicable.
115.7 	(e) If the tax or any part of the tax imposed by this subdivision is held to be 
115.8 	unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate 
115.9 	produced shall be imposed.
115.10 	(f) Consistent with the intent of this subdivision to impose a tax based upon the 
115.11 	weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 
115.12 	determine the weight of merchantable iron ore concentrate included in fluxed pellets by 
115.13 	subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 
115.14 	flux additives included in the pellets from the weight of the pellets. For purposes of this 
115.15 	paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 
115.16 	olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 
115.17 	No subtraction from the weight of the pellets shall be allowed for binders, mineral and 
115.18 	chemical additives other than basic flux additives, or moisture.
115.19 	(g)(1) Notwithstanding any other provision of this subdivision, for the first two years 
115.20 	of a plant's commercial production of direct reduced ore, no tax is imposed under this 
115.21 	section. As used in this paragraph, "commercial production" is production of more than 
115.22 	50,000 tons of direct reduced ore in the current year or in any prior year, "noncommercial 
115.23 	production" is production of 50,000 tons or less of direct reduced ore in any year, and 
115.24 	"direct reduced ore" is ore that results in a product that has an iron content of at least 75 
115.25 	percent. For the third year of a plant's commercial production of direct reduced ore, the 
115.26 	rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined 
115.27 	under this subdivision. For the fourth commercial production year, the rate is 50 percent of 
115.28 	the rate otherwise determined under this subdivision; for the fifth commercial production 
115.29 	year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for 
115.30 	all subsequent commercial production years, the full rate is imposed.
115.31 	(2) Subject to clause (1), production of direct reduced ore in this state is subject to 
115.32 	the tax imposed by this section, but if that production is not produced by a producer 
115.33 	of taconite or iron sulfides, the production of taconite or iron sulfides consumed in the 
115.34 	production of direct reduced iron in this state is not subject to the tax imposed by this 
115.35 	section on taconite or iron sulfides.
116.1 	(3) Notwithstanding any other provision of this subdivision, no tax is imposed 
116.2 	on direct reduced ore under this section during the facility's noncommercial production 
116.3 	of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 
116.4 	production of direct reduced ore is subject to the tax imposed by this section on taconite 
116.5 	and iron sulphides. Three-year average production of direct reduced ore does not 
116.6 	include production of direct reduced ore in any noncommercial year. Three-year average 
116.7 	production for a direct reduced ore facility that has noncommercial production is the 
116.8 	average of the commercial production of direct reduced ore for the current year and the 
116.9 	previous two commercial years.
116.10 	(4) This paragraph applies only to plants for which all environmental permits have 
116.11 	been obtained and construction has begun before January 1, 2009.

116.12 	Sec. 6. Minnesota Statutes 2006, section 298.25, is amended to read:
116.13 	298.25 TAXES ADDITIONAL TO OCCUPATION TAX; IN LIEU OF OTHER 
116.14 	TAXES.
116.15 	The taxes imposed under section 298.24 shall be in addition to the occupation tax 
116.16 	imposed upon the business of mining and producing iron ore. Except as herein otherwise 
116.17 	provided, such taxes shall be in lieu of all other taxes upon such taconite, iron sulphides, 
116.18 	and direct reduced ore or the lands in which they are contained, or upon the mining or 
116.19 	quarrying thereof, or the production of concentrate or direct reduced ore therefrom, or 
116.20 	upon the concentrate or direct reduced ore produced, or upon the machinery, equipment, 
116.21 	tools, supplies and buildings used in such mining, quarrying or production, or upon the 
116.22 	lands occupied by, or used in connection with, such mining, quarrying or production 
116.23 	facilities. If electric or steam power for the mining, transportation or concentration of 
116.24 	such taconite, concentrates or direct reduced ore produced therefrom is generated in 
116.25 	plants principally devoted to the generation of power for such purposes, the plants in 
116.26 	which such power is generated and all machinery, equipment, tools, supplies, transmission 
116.27 	and distribution lines used in the generation and distribution of such power, shall not be 
116.28 	considered to be machinery, equipment, tools, supplies and buildings used in the mining, 
116.29 	quarrying, or production of taconite, taconite concentrates or direct reduced ore within 
116.30 	the meaning of this section, and shall be subject to general property taxation. If part 
116.31 	of the power generated in such a plant is used for purposes other than the mining or 
116.32 	concentration of taconite or direct reduced ore or the transportation or loading of taconite, 
116.33 	the concentrates thereof or direct reduced ore, a proportionate share of the value of such 
116.34 	generating facilities, equal to the proportion that the power used for such other purpose 
116.35 	bears to the generating capacity of the plant, shall be subject to the general property tax 
117.1 	in the same manner as other property; provided, power generated in such a plant and 
117.2 	exchanged for an equivalent amount of power which is used for the mining, transportation, 
117.3 	or concentration of such taconite, concentrates or direct reduced ore produced therefrom, 
117.4 	shall be considered as used for such purposes within the meaning of this section. Nothing 
117.5 	herein shall prevent the assessment and taxation of the surface of reserve land containing 
117.6 	taconite and not occupied by such facilities or used in connection therewith at the value 
117.7 	thereof without regard to the taconite or iron sulphides therein, nor the assessment and 
117.8 	taxation of merchantable iron ore or other minerals, or iron-bearing materials other than 
117.9 	taconite or iron sulphides in such lands in the manner provided by law, nor the assessment 
117.10 	and taxation of facilities used in producing sulphur or sulphur products from iron sulphide 
117.11 	concentrates, or in refining such sulphur products, under the general property tax laws. 
117.12 	Nothing herein shall except from general taxation or from taxation as provided by other 
117.13 	laws any property used for residential or townsite purposes, including utility services 
117.14 	thereto. This section does not provide an exemption from general property taxation for ore 
117.15 	docks even if located at the site of a taconite production facility.

117.16 	EFFECTIVE DATE. This section is effective for taxes levied in 2007, payable 
117.17 	in 2008, and thereafter.

117.18 	Sec. 7. Minnesota Statutes 2006, section 298.28, subdivision 4, is amended to read:
117.19 		Subd. 4.School districts. (a) 17.15 cents per taxable ton, plus the increase provided 
117.20 	in paragraph (d), plus an amount equal to 3 cents per ton of the increased tax proceeds 
117.21 	attributable to the increase in the implicit price deflator as provided in section 298.24, 
117.22 	subdivision 1, must be allocated to qualifying school districts to be distributed, based upon 
117.23 	the certification of the commissioner of revenue, under paragraphs (b) and (c), except as 
117.24 	otherwise provided in paragraph (f). 
117.25 	(b) 3.43 cents per taxable ton must be distributed to the school districts in which 
117.26 	the lands from which taconite was mined or quarried were located or within which the 
117.27 	concentrate was produced. The distribution must be based on the apportionment formula 
117.28 	prescribed in subdivision 2. 
117.29 	(c)(i) 13.72 16.72 cents per taxable ton, less any amount distributed under paragraph 
117.30 	(e), shall be distributed to a group of school districts comprised of those school districts 
117.31 	which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is 
117.32 	a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion 
117.33 	to school district indexes as follows: for each school district, its pupil units determined 
117.34 	under section 126C.05 for the prior school year shall be multiplied by the ratio of the 
117.35 	average adjusted net tax capacity per pupil unit for school districts receiving aid under 
118.1 	this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 
118.2 	ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 
118.3 	Each district shall receive that portion of the distribution which its index bears to the sum 
118.4 	of the indices for all school districts that receive the distributions. 
118.5 	(ii) Notwithstanding clause (i), each school district that receives a distribution 
118.6 	under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this 
118.7 	clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on 
118.8 	severed mineral values after reduction for any portion distributed to cities and towns under 
118.9 	section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy 
118.10 	reduction under section 126C.48, subdivision 8, for the second year prior to the year of the 
118.11 	distribution shall receive a distribution equal to the difference; the amount necessary to 
118.12 	make this payment shall be derived from proportionate reductions in the initial distribution 
118.13 	to other school districts under clause (i). 
118.14 	(d) Any school district described in paragraph (c) where a levy increase pursuant to 
118.15 	section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001, 
118.16 	shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the 
118.17 	pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous 
118.18 	year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent 
118.19 	times the district's taxable net tax capacity in the second previous year. 
118.20 	If the total amount provided by paragraph (d) is insufficient to make the payments 
118.21 	herein required then the entitlement of $175 per pupil unit shall be reduced uniformly 
118.22 	so as not to exceed the funds available. Any amounts received by a qualifying school 
118.23 	district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general 
118.24 	education aid which the district receives pursuant to section 126C.13 or the permissible 
118.25 	levies of the district. Any amount remaining after the payments provided in this paragraph 
118.26 	shall be paid to the commissioner of Iron Range resources and rehabilitation who shall 
118.27 	deposit the same in the taconite environmental protection fund and the Douglas J. Johnson 
118.28 	economic protection trust fund as provided in subdivision 11. 
118.29 	Each district receiving money according to this paragraph shall reserve the lesser of 
118.30 	the amount received under this paragraph or $25 times the number of pupil units served 
118.31 	in the district. It may use the money for early childhood programs or for outcome-based 
118.32 	learning programs that enhance the academic quality of the district's curriculum. The 
118.33 	outcome-based learning programs must be approved by the commissioner of education.
118.34 	(e) There shall be distributed to any school district the amount which the school 
118.35 	district was entitled to receive under section 298.32 in 1975. 
119.1 	(f) Effective for the distribution in 2003 only, five percent of the distributions to 
119.2 	school districts under paragraphs (b), (c), and (e); subdivision 6, paragraph (c); subdivision 
119.3 	11; and section 298.225, shall be distributed to the general fund. The remainder less any 
119.4 	portion distributed to cities and towns under section 126C.48, subdivision 8, paragraph 
119.5 	(5), shall be distributed to the Douglas J. Johnson economic protection trust fund created 
119.6 	in section 298.292. Fifty percent of the amount distributed to the Douglas J. Johnson 
119.7 	economic protection trust fund shall be made available for expenditure under section 
119.8 	298.293 as governed by section 298.296. Effective in 2003 only, 100 percent of the 
119.9 	distributions to school districts under section 477A.15 less any portion distributed to 
119.10 	cities and towns under section 126C.48, subdivision 8, paragraph (5), shall be distributed 
119.11 	to the general fund. 

119.12 	EFFECTIVE DATE. This section is effective for distributions in 2008 and 
119.13 	thereafter.

119.14 	Sec. 8. Minnesota Statutes 2006, section 298.28, subdivision 5, is amended to read:
119.15 		Subd. 5.Counties. (a) 26.05 cents per taxable ton is allocated to counties to be 
119.16 	distributed, based upon certification by the commissioner of revenue, under paragraphs 
119.17 	(b) to (d). 
119.18 	(b) 20.525 15.525 cents per taxable ton shall be distributed to the county in which 
119.19 	the taconite is mined or quarried or in which the concentrate is produced, less any 
119.20 	amount which is to be distributed pursuant to paragraph (c). The apportionment formula 
119.21 	prescribed in subdivision 2 is the basis for the distribution. 
119.22 	(c) If an electric power plant owned by and providing the primary source of power 
119.23 	for a taxpayer mining and concentrating taconite is located in a county other than the 
119.24 	county in which the mining and the concentrating processes are conducted, one cent per 
119.25 	taxable ton of the tax distributed to the counties pursuant to paragraph (b) and imposed 
119.26 	on and collected from such taxpayer shall be paid to the county in which the power plant 
119.27 	is located.
119.28 	(d) 5.525 10.525 cents per taxable ton shall be paid to the county from which the 
119.29 	taconite was mined, quarried or concentrated to be deposited in the county road and 
119.30 	bridge fund. If the mining, quarrying and concentrating, or separate steps in any of those 
119.31 	processes are carried on in more than one county, the commissioner shall follow the 
119.32 	apportionment formula prescribed in subdivision 2. 

119.33 	EFFECTIVE DATE. This section is effective for distributions in 2008 and 
119.34 	thereafter.

120.1 	Sec. 9. Minnesota Statutes 2006, section 298.28, subdivision 10, is amended to read:
120.2 		Subd. 10.Increase. (a) Except as provided in paragraph (b), beginning with 
120.3 	distributions in 2000, the amount determined under subdivision 9 shall be increased in 
120.4 	the same proportion as the increase in the implicit price deflator as provided in section 
120.5 	298.24, subdivision 1. Beginning with distributions in 2003, the amount determined under 
120.6 	subdivision 6, paragraph (a), shall be increased in the same proportion as the increase in 
120.7 	the implicit price deflator as provided in section 298.24, subdivision 1.
120.8 	(b) For distributions in 2005 and subsequent years, an amount equal to the increased 
120.9 	tax proceeds attributable to the increase in the implicit price deflator as provided in 
120.10 	section 298.24, subdivision 1, for taxes paid in 2005, except for the amount of revenue 
120.11 	increases provided in subdivision 4, paragraph (d), is distributed to the grant and loan fund 
120.12 	established in section 298.2961, subdivision 4.
120.13 	(c) For distributions in 2008 and subsequent years, if the amounts distributed under 
120.14 	paragraphs (a) and (b) exceed the increased tax proceeds attributable to the increase in 
120.15 	the implicit price deflator, less 3 cents per ton, they must be proportionately reduced so 
120.16 	that the sum of those amounts equals the amount of those increased tax proceeds less 3 
120.17 	cents per ton.

120.18 	Sec. 10. Minnesota Statutes 2006, section 298.292, subdivision 2, is amended to read:
120.19 		Subd. 2.Use of money. Money in the Douglas J. Johnson economic protection trust 
120.20 	fund may be used for the following purposes:
120.21 	(1) to provide loans, loan guarantees, interest buy-downs and other forms of 
120.22 	participation with private sources of financing, but a loan to a private enterprise shall be 
120.23 	for a principal amount not to exceed one-half of the cost of the project for which financing 
120.24 	is sought, and the rate of interest on a loan to a private enterprise shall be no less than the 
120.25 	lesser of eight percent or an interest rate three percentage points less than a full faith 
120.26 	and credit obligation of the United States government of comparable maturity, at the 
120.27 	time that the loan is approved;
120.28 	(2) to fund reserve accounts established to secure the payment when due of the 
120.29 	principal of and interest on bonds issued pursuant to section 298.2211; 
120.30 	(3) to pay in periodic payments or in a lump sum payment any or all of the interest 
120.31 	on bonds issued pursuant to chapter 474 for the purpose of constructing, converting, 
120.32 	or retrofitting heating facilities in connection with district heating systems or systems 
120.33 	utilizing alternative energy sources; and
120.34 	(4) to invest in a venture capital fund or enterprise that will provide capital to other 
120.35 	entities that are engaging in, or that will engage in, projects or programs that have the 
121.1 	purposes set forth in subdivision 1. No investments may be made in a venture capital fund 
121.2 	or enterprise unless at least two other unrelated investors make investments of at least 
121.3 	$500,000 in the venture capital fund or enterprise, and the investment by the Douglas 
121.4 	J. Johnson economic protection trust fund may not exceed the amount of the largest 
121.5 	investment by an unrelated investor in the venture capital fund or enterprise. For purposes 
121.6 	of this subdivision, an "unrelated investor" is a person or entity that is not related to 
121.7 	the entity in which the investment is made or to any individual who owns more than 40 
121.8 	percent of the value of the entity, in any of the following relationships: spouse, parent, 
121.9 	child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of 
121.10 	the value of all interests in it. For purposes of determining the limitations under this 
121.11 	clause, the amount of investments made by an investor other than the Douglas J. Johnson 
121.12 	economic protection trust fund is the sum of all investments made in the venture capital 
121.13 	fund or enterprise during the period beginning one year before the date of the investment 
121.14 	by the Douglas J. Johnson economic protection trust fund; and
121.15 	(5) to purchase forest land in the taconite assistance area under section 273.1341 to 
121.16 	be held as a public trust for the benefit of the area for recreational uses and for economic 
121.17 	purposes, including timber sales and gravel removal.
121.18 	Money from the trust fund shall be expended only in or for the benefit of the taconite 
121.19 	assistance area defined in section 273.1341. 

121.20 	Sec. 11. Minnesota Statutes 2006, section 298.2961, subdivision 4, is amended to read:
121.21 		Subd. 4.Grant and loan fund. (a) A fund is established to receive distributions 
121.22 	under section 298.28, subdivision 9b, and to make grants or loans as provided in this 
121.23 	subdivision. Any grant or loan made under this subdivision must be approved by 
121.24 	a majority of the members of the Iron Range Resources and Rehabilitation Board, 
121.25 	established under section 298.22.
121.26 	(b) Distributions received in calendar year 2005 are allocated to the city of Virginia 
121.27 	for improvements and repairs to the city's steam heating system.
121.28 	(c) Distributions received in calendar year 2006 are allocated to a project of the 
121.29 	public utilities commissions of the cities of Hibbing and Virginia to convert their electrical 
121.30 	generating plants to the use of biomass products, such as wood.
121.31 	(d) Distributions received in calendar year 2007 must be paid to the city of Tower to 
121.32 	be used for the East Two Rivers project in or near the city of Tower.
121.33 	(e) For distributions received in 2008, the first $2,000,000 of the 2008 distribution 
121.34 	must be paid to St. Louis County for deposit in its county road and bridge fund to be used 
121.35 	for relocation of St. Louis County Road 715, commonly referred to as Pike River Road. 
122.1 	The remainder of the 2008 distribution  must be paid to the city of Virginia for extension 
122.2 	and replacement of its water and sewer systems and the full amount of the distributions in 
122.3 	2009 and subsequent years is allocated for projects under section 298.223, subdivision 1.

122.4 	Sec. 12. Minnesota Statutes 2006, section 298.2961, subdivision 5, is amended to read:
122.5 		Subd. 5.Public works and local economic development fund. For distributions in 
122.6 	2007 only, a special fund is established to receive 38.4 cents per ton that otherwise would 
122.7 	be allocated under section 298.28, subdivision 6. The following amounts are allocated to 
122.8 	St. Louis County acting as the fiscal agent for the recipients for the specific purposes:
122.9 	(1) 13.4 cents per ton for the Central Iron Range Sanitary Sewer District for 
122.10 	construction of a combined wastewater facility and notwithstanding section 298.28, 
122.11 	subdivision 11, paragraph (a), or any other law, interest accrued on this money while held 
122.12 	by St. Louis County shall also be distributed to the recipient;
122.13 	(2) six cents per ton to the city of Eveleth to redesign and design and construct 
122.14 	improvements to renovate its water treatment facility;
122.15 	(3) one cent per ton for the East Range Joint Powers Board to acquire land for and to 
122.16 	design a central wastewater collection and treatment system;
122.17 	(4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;
122.18 	(5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;
122.19 	(6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;
122.20 	(7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and 
122.21 	Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment 
122.22 	and Economic Development;
122.23 	(8) 0.4 cents per ton to the city of Keewatin for a new city well;
122.24 	(9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous 
122.25 	materials center;
122.26 	(10) 0.9 cents per ton to Aitkin County Growth for an economic development 
122.27 	project for peat harvesting;
122.28 	(11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;
122.29 	(12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive 
122.30 	plan;
122.31 	(13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;
122.32 	(14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake 
122.33 	Environmental Learning Center; 
122.34 	(15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;
123.1 	(16) 0.5 cents per ton to the Economic Development Authority of the city of Grand 
123.2 	Rapids for planning for the North Central Research and Technology Laboratory;
123.3 	(17) 0.6 cents per ton to the city of Bovey for sewer and water extension;
123.4 	(18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and
123.5 	(19) ten cents per ton to an economic development authority in a city through which 
123.6 	State Highway 1 passes, or a city in Independent School District No. 2142 that has an 
123.7 	active mine, the Iron Range Resources and Rehabilitation Board for deposit in a Highway 
123.8 	1 Corridor Account established by the board, to be distributed by the board to any of the 
123.9 	cities of Babbitt, Cook, Ely, or Tower,  for an economic development project projects
123.10 	approved by the Iron Range Resources and Rehabilitation Board; notwithstanding section 
123.11 	298.28, subdivision 11, paragraph (a), or any other law, interest accrued on this money 
123.12 	while held by St. Louis County or the board shall also be distributed to the recipient.

123.13 	Sec. 13. Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:
123.14 		Subdivision 1.Definitions. Except as may otherwise be provided, the following 
123.15 	words, when used in this section, shall have the meanings herein ascribed to them.
123.16 	(1) (a) "Aggregate material" shall mean means:
123.17 	(1)  nonmetallic natural mineral aggregate including, but not limited to sand, silica 
123.18 	sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is 
123.19 	transported on a public road, street, or highway., provided that nonmetallic aggregate 
123.20 	material shall does not include dimension stone and dimension granite; and 
123.21 	(2) taconite tailings, crushed rock, and architectural or dimension stone and 
123.22 	dimension granite removed from taconite mines. 
123.23 	Aggregate material must be measured or weighed after it has been extracted from 
123.24 	the pit, quarry, or deposit.
123.25 	(2) (b) "Person" shall mean means any individual, firm, partnership, corporation, 
123.26 	organization, trustee, association, or other entity.
123.27 	(3) (c) "Operator" shall mean means any person engaged in the business of removing 
123.28 	aggregate material from the surface or subsurface of the soil, for the purpose of sale, 
123.29 	either directly or indirectly, through the use of the aggregate material in a marketable 
123.30 	product or service.
123.31 	(4) (d) "Extraction site" shall mean means a pit, quarry, or deposit containing 
123.32 	aggregate material and any contiguous property to the pit, quarry, or deposit which is used 
123.33 	by the operator for stockpiling the aggregate material.
123.34 	(5) (e) "Importer" shall mean means any person who buys aggregate material 
123.35 	produced from a county not listed in paragraph (6) (f) or another state and causes the 
124.1 	aggregate material to be imported into a county in this state which imposes a tax on 
124.2 	aggregate material.
124.3 	(6) (f) "County" shall mean means the counties of Pope, Stearns, Benton, Sherburne, 
124.4 	Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman, 
124.5 	Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley, 
124.6 	Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose 
124.7 	board has voted after a public hearing to impose the tax under this section and has notified 
124.8 	the commissioner of revenue of the imposition of the tax.
124.9 	(7) (g) "Borrow" shall mean means granular borrow, consisting of durable particles 
124.10 	of gravel and sand, crushed quarry or mine rock, crushed gravel or stone, or any 
124.11 	combination thereof, the ratio of the portion passing the (#200) sieve divided by the 
124.12 	portion passing the (1 inch) sieve may not exceed 20 percent by mass.

124.13 	Sec. 14. Minnesota Statutes 2006, section 298.75, subdivision 3, is amended to read:
124.14 		Subd. 3.Report and remittance. (a) By the 14th day following the last day of each 
124.15 	calendar quarter, every operator or importer shall make and file with the county auditor of 
124.16 	the county in which the aggregate material is removed or imported, a correct report under 
124.17 	oath, in such form and containing such information as the auditor shall require relative to 
124.18 	the quantity of aggregate material removed or imported during the preceding calendar 
124.19 	quarter. The report shall be accompanied by a remittance of the amount of tax due.
124.20 	(b) If any of the proceeds of the tax is to be apportioned as provided in subdivision 
124.21 	2, the operator or importer shall also include on the report any relevant information 
124.22 	concerning the amount of aggregate material transported, the tax and the county of 
124.23 	destination. The county auditor shall notify the county treasurer of the amount of such 
124.24 	tax and the county to which it is due. The county treasurer shall remit the tax to the 
124.25 	appropriate county within 30 days, except as provided in paragraph (c).
124.26 	(c) The proceeds of the tax on aggregate material as defined in subdivision 1, 
124.27 	paragraph (a), clause (2), must be remitted to the commissioner of iron range resources 
124.28 	and rehabilitation to be deposited in the taconite area environmental protection fund under 
124.29 	section 298.223, and used for the purposes of that fund.

124.30 	Sec. 15. Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:
124.31 		Subd. 7.Proceeds of taxes. All money collected as taxes under this section on 
124.32 	aggregate material as defined in subdivision 1, paragraph (a), clause (1), shall be deposited 
124.33 	in the county treasury and credited as follows, for expenditure by the county board:
125.1 	(a) Sixty percent to the county road and bridge fund for expenditure for the 
125.2 	maintenance, construction and reconstruction of roads, highways and bridges;
125.3 	(b) Thirty percent to the road and bridge fund of those towns as determined by the 
125.4 	county board and to the general fund or other designated fund of those cities as determined 
125.5 	by the county board, to be expended for maintenance, construction and reconstruction of 
125.6 	roads, highways and bridges; and
125.7 	(c) Ten percent to a special reserve fund which is hereby established, for expenditure 
125.8 	for the restoration of abandoned pits, quarries, or deposits located upon public and tax 
125.9 	forfeited lands within the county.
125.10 	If there are no abandoned pits, quarries or deposits located upon public or tax 
125.11 	forfeited lands within the county, this portion of the tax shall be deposited in the county 
125.12 	road and bridge fund for expenditure for the maintenance, construction and reconstruction 
125.13 	of roads, highways and bridges.

125.14 	Sec. 16. Minnesota Statutes 2006, section 298.75, is amended by adding a subdivision 
125.15 	to read:
125.16 		Subd. 11.Tax may be imposed; Otter Tail County. (a) If Otter Tail County 
125.17 	does not impose a tax under this section and approves imposition of the tax under this 
125.18 	subdivision, the town of Scambler in Otter Tail County may impose the aggregate 
125.19 	materials tax under this section.
125.20 	(b) For purposes of exercising the powers contained in this section, the "town" is 
125.21 	deemed to be the "county."
125.22 	(c) All provisions in this section apply to the town of Scambler, except that all 
125.23 	proceeds of the tax must be retained by the town and used for the purposes described in 
125.24 	subdivision 7.
125.25 	(d) If Otter Tail County imposes an aggregate materials tax under this section, the 
125.26 	tax imposed by the town of Scambler under this subdivision is repealed on the effective 
125.27 	date of the Otter Tail County tax.

125.28 	EFFECTIVE DATE. This section is effective the day after the governing body 
125.29 	of the town of Scambler and its chief clerical officer comply with section 645.021, 
125.30 	subdivisions 2 and 3.

125.31 	Sec. 17. IRON RANGE MEMORIAL FOREST.
 125.32 	Notwithstanding Minnesota Statutes, section 298.293, the Iron Range Resources and 
125.33 	Rehabilitation Board under Minnesota Statutes, section 298.22, may expend funds from 
125.34 	the principal of the Douglas J. Johnson economic protection trust fund under Minnesota 
126.1 	Statutes, sections 298.291 to 298.294, to purchase forest lands. All forest lands purchased 
126.2 	under this section must be held in trust for the benefit of the citizens of the taconite 
126.3 	assistance area under Minnesota Statutes, section 273.1341, as the Iron Range Miners' 
126.4 	Memorial Forest for the benefit of the area as provided under Minnesota Statutes, section 
126.5 	298.22, subdivision 5a.

126.6 	Sec. 18. APPROPRIATIONS; DEPARTMENT OF EDUCATION.
 126.7 		Subdivision 1.Department of Education. The sums indicated in this section are 
126.8 	appropriated from the general fund to the Department of Education. These appropriations 
126.9 	are added to any appropriations for the same purpose in 2007 S.F. No. 2095 for the fiscal 
126.10 	years indicated.
126.11 		Subd. 2.General education aid. For general education aid under Minnesota 
126.12 	Statutes, section 126C.13, subdivision 4:

126.13		$
	1,041,000
	.....
	2009
	
126.14 	The 2009 appropriation includes $1,041,000 for fiscal year 2008 and $0 for fiscal 
126.15 	year 2009.

126.16 	Sec. 19.  REPEALER.
 126.17 	Minnesota Statutes 2006, section 126C.21, subdivision 4, is repealed.

126.18 	ARTICLE 8
126.19 	LOCAL DEVELOPMENT

126.20 	Section 1. Minnesota Statutes 2006, section 272.02, is amended by adding a 
126.21 	subdivision to read:
126.22 		Subd. 85.Tax-free renaissance zones. (a) Property located in a tax-free renaissance 
126.23 	zone designated under section 469.342 is exempt from ad valorem taxes levied under 
126.24 	chapter 275.
126.25 	(b) The exemption applies to each assessment year beginning during the duration 
126.26 	of the zone or subzone. For the final three assessment years of the zone or subzone 
126.27 	duration limit, the exemption applies to the following percentages of estimated market 
126.28 	value of the property:
126.29 	(1) for the third to the last assessment year of the duration, 75 percent;
126.30 	(2) for the second to the last assessment year of the duration, 50 percent; and
126.31 	(3) for the last assessment  year of the duration, 25 percent.

127.1 	EFFECTIVE DATE. This section is effective for property taxes levied in 2007, 
127.2 	payable in 2008, and thereafter.

127.3 	Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19b, as amended by Laws 
127.4 	2007, chapter 1, section 2, is amended to read:
127.5 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
127.6 	and trusts, there shall be subtracted from federal taxable income:
127.7 	(1) net interest income on obligations of any authority, commission, or 
127.8 	instrumentality of the United States to the extent includable in taxable income for federal 
127.9 	income tax purposes but exempt from state income tax under the laws of the United States;
127.10 	(2) if included in federal taxable income, the amount of any overpayment of income 
127.11 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
127.12 	is received as a refund or as a credit to another taxable year's income tax liability;
127.13 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
127.14 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
127.15 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
127.16 	transportation of each qualifying child in attending an elementary or secondary school 
127.17 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
127.18 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
127.19 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
127.20 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
127.21 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
127.22 	"textbooks" includes books and other instructional materials and equipment purchased 
127.23 	or leased for use in elementary and secondary schools in teaching only those subjects 
127.24 	legally and commonly taught in public elementary and secondary schools in this state. 
127.25 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
127.26 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
127.27 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
127.28 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
127.29 	or materials for, or transportation to, extracurricular activities including sporting events, 
127.30 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
127.31 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
127.32 	given in section 32(c)(3) of the Internal Revenue Code;
127.33 	(4) income as provided under section 290.0802;
127.34 	(5) to the extent included in federal adjusted gross income, income realized on 
127.35 	disposition of property exempt from tax under section 290.491;
128.1 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
128.2 	of the Internal Revenue Code in determining federal taxable income by an individual 
128.3 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
128.4 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
128.5 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
128.6 	under the provisions of Public Law 109-1;
128.7 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
128.8 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
128.9 	which is included in gross income under section 87 of the Internal Revenue Code;
128.10 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
128.11 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
128.12 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
128.13 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
128.14 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
128.15 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
128.16 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
128.17 	the extent they exceed the federal foreign tax credit;
128.18 	(9) in each of the five tax years immediately following the tax year in which an 
128.19 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
128.20 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
128.21 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
128.22 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
128.23 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
128.24 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
128.25 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
128.26 	less than zero;
128.27 	(10) job opportunity building zone income as provided under section 469.316;
128.28 	(11) the amount of compensation paid to members of the Minnesota National Guard 
128.29 	or other reserve components of the United States military for active service performed 
128.30 	in Minnesota, excluding compensation for services performed under the Active Guard 
128.31 	Reserve (AGR) program. For purposes of this clause, "active service" means (i) state 
128.32 	active service as defined in section 190.05, subdivision 5a, clause (1); (ii) federally 
128.33 	funded state active service as defined in section 190.05, subdivision 5b; or (iii) federal 
128.34 	active service as defined in section 190.05, subdivision 5c, but "active service" excludes 
128.35 	services performed exclusively for purposes of basic combat training, advanced individual 
128.36 	training, annual training, and periodic inactive duty training; special training periodically 
129.1 	made available to reserve members; and service performed in accordance with section 
129.2 	190.08, subdivision 3;
129.3 	(12) the amount of compensation paid to Minnesota residents who are members 
129.4 	of the armed forces of the United States or United Nations for active duty performed 
129.5 	outside Minnesota;
129.6 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
129.7 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
129.8 	to another person for human organ transplantation. For purposes of this clause, "organ" 
129.9 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
129.10 	"human organ transplantation" means the medical procedure by which transfer of a human 
129.11 	organ is made from the body of one person to the body of another person; "qualified 
129.12 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
129.13 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
129.14 	may be subtracted under this clause only once; and "qualified donor" means the individual 
129.15 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
129.16 	individual may claim the subtraction in this clause for each instance of organ donation for 
129.17 	transplantation during the taxable year in which the qualified expenses occur;
129.18 	(14) in each of the five tax years immediately following the tax year in which an 
129.19 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
129.20 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
129.21 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
129.22 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
129.23 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
129.24 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
129.25 	subtraction is not allowed under this clause;
129.26 	(15) to the extent included in federal taxable income, compensation paid to a 
129.27 	nonresident who is a service member as defined in United States Code, title 10, section 
129.28 	101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 
129.29 	Law 108-189, section 101(2); and
129.30 	(16) international economic development zone income as provided under section 
129.31 	469.325; and
129.32 	(17) income of a qualified business derived from operations in a tax-free renaissance 
129.33 	zone as provided under section 469.343.

129.34 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
129.35 	December 31, 2007.

130.1 	Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 29, is amended to read:
130.2 		Subd. 29.Taxable income. The term "taxable income" means:
130.3 	(1) for individuals, estates, and trusts, the same as taxable net income;
130.4 	(2) for corporations, the taxable net income less
130.5 	(i) the net operating loss deduction under section 290.095;
130.6 	(ii) the dividends received deduction under section 290.21, subdivision 4;
130.7 	(iii) the exemption for operating in a job opportunity building zone under section 
130.8 	469.317;
130.9 	(iv) the exemption for operating in a biotechnology and health sciences industry 
130.10 	zone under section 469.337; and
130.11 	(v) the exemption for operating in an international economic development zone 
130.12 	under section 469.326; and
130.13 	(vi) the exemption for operating in a tax-free renaissance zone under section 469.343.

130.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
130.15 	December 31, 2007.

130.16 	Sec. 4. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision 
130.17 	to read:
130.18 		Subd. 34.Tax-free renaissance zone; historic rehabilitation credit. (a) A 
130.19 	taxpayer who incurs costs that are eligible for a credit under section 47 of the Internal 
130.20 	Revenue Code for the rehabilitation of a property in a tax-free renaissance zone, 
130.21 	designated under section 469.342, is allowed a credit against the tax imposed under this 
130.22 	chapter, including the taxes under sections 290.091 and 290.0922, equal to 25 percent 
130.23 	of the federal credit for the taxable year.
130.24 	(b) If the amount of the credit under this subdivision exceeds the tax liability under 
130.25 	this chapter for the year in which the cost is incurred, the amount that exceeds the tax 
130.26 	liability may be carried back to any of the three preceding taxable years or carried forward 
130.27 	to each of the ten taxable years succeeding the taxable year in which the expense was 
130.28 	incurred. The entire amount of the credit must be carried to the earliest taxable year to 
130.29 	which the amount may be carried. The unused portion of the credit must be carried to 
130.30 	the following taxable year.

130.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
130.32 	December 31, 2007.

130.33 	Sec. 5. Minnesota Statutes 2006, section 290.091, subdivision 2, is amended to read:
131.1 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
131.2 	terms have the meanings given:
131.3 	(a) "Alternative minimum taxable income" means the sum of the following for 
131.4 	the taxable year:
131.5 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
131.6 	55(b)(2) of the Internal Revenue Code;
131.7 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
131.8 	minimum taxable income, but excluding:
131.9 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
131.10 	Code:
131.11 	(A) for taxable years beginning before January 1, 2006, to the extent that the 
131.12 	deduction exceeds 1.0 percent of adjusted gross income;
131.13 	(B) for taxable years beginning after December 31, 2005, to the full extent of the 
131.14 	deduction.
131.15 	For purposes of this clause, "adjusted gross income" has the meaning given in 
131.16 	section 62 of the Internal Revenue Code;
131.17 	(ii) the medical expense deduction;
131.18 	(iii) the casualty, theft, and disaster loss deduction; and
131.19 	(iv) the impairment-related work expenses of a disabled person;
131.20 	(3) for depletion allowances computed under section 613A(c) of the Internal 
131.21 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
131.22 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
131.23 	the excess of the deduction for depletion allowable under section 611 of the Internal 
131.24 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
131.25 	taxable year (determined without regard to the depletion deduction for the taxable year);
131.26 	(4) to the extent not included in federal alternative minimum taxable income, the 
131.27 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
131.28 	Internal Revenue Code determined without regard to subparagraph (E);
131.29 	(5) to the extent not included in federal alternative minimum taxable income, the 
131.30 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
131.31 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses 
131.32 	(7), (8), and (9);
131.33 	less the sum of the amounts determined under the following:
131.34 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1);
131.35 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
131.36 	19b, clause (2), to the extent included in federal alternative minimum taxable income;
132.1 	(3) the amount of investment interest paid or accrued within the taxable year on 
132.2 	indebtedness to the extent that the amount does not exceed net investment income, as 
132.3 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
132.4 	amounts deducted in computing federal adjusted gross income; and
132.5 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
132.6 	subdivision 19b, clauses (9) to (16) (17).
132.7 	In the case of an estate or trust, alternative minimum taxable income must be 
132.8 	computed as provided in section 59(c) of the Internal Revenue Code.
132.9 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
132.10 	of the Internal Revenue Code.
132.11 	(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
132.12 	income after subtracting the exemption amount determined under subdivision 3.
132.13 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
132.14 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
132.15 	credits allowed under this chapter.
132.16 	(e) "Net minimum tax" means the minimum tax imposed by this section.

132.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
132.18 	December 31, 2007.

132.19 	Sec. 6. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
132.20 		Subd. 3.Alternative minimum taxable income. "Alternative minimum taxable 
132.21 	income" is Minnesota net income as defined in section 290.01, subdivision 19, and 
132.22 	includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 
132.23 	(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 
132.24 	Minnesota tax return, the minimum tax must be computed on a separate company basis. 
132.25 	If a corporation is part of a tax group filing a unitary return, the minimum tax must be 
132.26 	computed on a unitary basis. The following adjustments must be made.
132.27 	(1) For purposes of the depreciation adjustments under section 56(a)(1) and 
132.28 	56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 
132.29 	service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 
132.30 	income tax purposes, including any modification made in a taxable year under section 
132.31 	290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7, 
132.32 	paragraph (c).
132.33 	For taxable years beginning after December 31, 2000, the amount of any remaining 
132.34 	modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 
133.1 	section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 
133.2 	allowance in the first taxable year after December 31, 2000.
133.3 	(2) The portion of the depreciation deduction allowed for federal income tax 
133.4 	purposes under section 168(k) of the Internal Revenue Code that is required as an 
133.5 	addition under section 290.01, subdivision 19c, clause (16), is disallowed in determining 
133.6 	alternative minimum taxable income.
133.7 	(3) The subtraction for depreciation allowed under section 290.01, subdivision 19d, 
133.8 	clause (19), is allowed as a depreciation deduction in determining alternative minimum 
133.9 	taxable income.
133.10 	(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
133.11 	of the Internal Revenue Code does not apply.
133.12 	(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
133.13 	Revenue Code does not apply.
133.14 	(6) The special rule for dividends from section 936 companies under section 
133.15 	56(g)(4)(C)(iii) does not apply.
133.16 	(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue 
133.17 	Code does not apply.
133.18 	(8) The tax preference for intangible drilling costs under section 57(a)(2) of the 
133.19 	Internal Revenue Code must be calculated without regard to subparagraph (E) and the 
133.20 	subtraction under section 290.01, subdivision 19d, clause (4).
133.21 	(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 
133.22 	Revenue Code does not apply.
133.23 	(10) The tax preference for charitable contributions of appreciated property under 
133.24 	section 57(a)(6) of the Internal Revenue Code does not apply.
133.25 	(11) For purposes of calculating the tax preference for accelerated depreciation or 
133.26 	amortization on certain property placed in service before January 1, 1987, under section 
133.27 	57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 
133.28 	deduction allowed under section 290.01, subdivision 19e.
133.29 	For taxable years beginning after December 31, 2000, the amount of any remaining 
133.30 	modification made under section 290.01, subdivision 19e, not previously deducted is a 
133.31 	depreciation or amortization allowance in the first taxable year after December 31, 2004.
133.32 	(12) For purposes of calculating the adjustment for adjusted current earnings in 
133.33 	section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 
133.34 	income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 
133.35 	minimum taxable income as defined in this subdivision, determined without regard to the 
133.36 	adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
134.1 	(13) For purposes of determining the amount of adjusted current earnings under 
134.2 	section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 
134.3 	56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend 
134.4 	gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the 
134.5 	amount of refunds of income, excise, or franchise taxes subtracted as provided in section 
134.6 	290.01, subdivision 19d, clause (10), or (iii) the amount of royalties, fees or other like 
134.7 	income subtracted as provided in section 290.01, subdivision 19d, clause (11).
134.8 	(14) Alternative minimum taxable income excludes the income from operating in a 
134.9 	job opportunity building zone as provided under section 469.317.
134.10 	(15) Alternative minimum taxable income excludes the income from operating in a 
134.11 	biotechnology and health sciences industry zone as provided under section 469.337.
134.12 	(16) Alternative minimum taxable income excludes the income from operating in an 
134.13 	international economic development zone as provided under section 469.326.
134.14 	(17) Alternative minimum taxable income excludes the income from operating in a 
134.15 	tax-free renaissance zone as provided under section 469.343.
134.16 	Items of tax preference must not be reduced below zero as a result of the 
134.17 	modifications in this subdivision.

134.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
134.19 	December 31, 2007.

134.20 	Sec. 7. Minnesota Statutes 2006, section 290.0922, subdivision 2, is amended to read:
134.21 		Subd. 2.Exemptions. The following entities are exempt from the tax imposed 
134.22 	by this section:
134.23 	(1) corporations exempt from tax under section 290.05;
134.24 	(2) real estate investment trusts;
134.25 	(3) regulated investment companies or a fund thereof; and
134.26 	(4) entities having a valid election in effect under section 860D(b) of the Internal 
134.27 	Revenue Code;
134.28 	(5) town and farmers' mutual insurance companies;
134.29 	(6) cooperatives organized under chapter 308A or 308B that provide housing 
134.30 	exclusively to persons age 55 and over and are classified as homesteads under section 
134.31 	273.124, subdivision 3;
134.32 	(7) an entity, if for the taxable year all of its property is located in a job opportunity 
134.33 	building zone designated under section 469.314 and all of its payroll is a job opportunity 
134.34 	building zone payroll under section 469.310; and
135.1 	(8) an entity, if for the taxable year all of its property is located in an international 
135.2 	economic development zone designated under section 469.322, and all of its payroll is 
135.3 	international economic development zone payroll under section 469.321. The exemption 
135.4 	under this clause applies to taxable years beginning during the duration of the international 
135.5 	economic development zone; and
135.6 	(9) an entity, if for the taxable year all of its property is located in a tax-free 
135.7 	renaissance zone designated under section 469.342 and all of its payroll and its zone 
135.8 	payroll as defined under section 469.343.
135.9 	Entities not specifically exempted by this subdivision are subject to tax under this 
135.10 	section, notwithstanding section 290.05.

135.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
135.12 	December 31, 2007.

135.13 	Sec. 8. Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision 
135.14 	to read:
135.15 		Subd. 40.Legal reference and data center facility. (a) Materials and supplies used 
135.16 	or consumed in the construction, improvement, or expansion of a legal reference office 
135.17 	and data center facility are exempt, if:
135.18 	(1) the facility is used for the development or provision of print or online versions of 
135.19 	legal reference products and services or consultative services; and
135.20 	(2) the total capital investment made at the facility is at least $100,000,000.
135.21 	(b) The tax must be imposed and collected as if the rate under section 297A.62, 
135.22 	subdivision 1, applied, and refunded in the manner provided in section 297A.75, only 
135.23 	after the following criteria have been met:
135.24 	(1) a refund may not be issued until the owner of the legal reference and data center 
135.25 	facility has certified to the Department of Employment and Economic Development that 
135.26 	the legal reference and data center employs no fewer than 8,600 full-time equivalent 
135.27 	workers at the facility;
135.28 	(2) for each year that the owner of the legal reference and data center facility certifies 
135.29 	to the Department of Employment and Economic Development that no fewer than 8,600 
135.30 	full-time equivalent workers residents are employed at the facility, the refund may be 
135.31 	issued at a rate of 25 percent of the total allowable refund payable to date. Provided that 
135.32 	the Department of Employment and Economic Development continues to certify that no 
135.33 	fewer than 8,600 Minnesota full-time equivalent workers are employed at the facility, the 
135.34 	commissioner of revenue may make annual payments of the remaining refund until all 
135.35 	of the refund has been paid; and
136.1 	(3) the first certification must occur within one year from the completion date of 
136.2 	construction of the expansion of the legal reference and data center facility.

136.3 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
136.4 	December 31, 2006, and before January 1, 2012.

136.5 	Sec. 9. Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision 
136.6 	to read:
136.7 		Subd. 41.Biobusiness center. Materials and supplies used or consumed in the 
136.8 	initial construction of a biobusiness center building in the city of Rochester for which the 
136.9 	city received funding for the related infrastructure under Laws 2006, chapter 258, section 
136.10 	21, subdivision 7, are exempt. Materials and supplies used to construct a parking ramp 
136.11 	or related infrastructure are not exempt. The tax must be imposed and collected as if 
136.12 	the rate under section 297A.62, subdivision 1, applied and then refunded in the manner 
136.13 	provided in section 297A.75.

136.14 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
136.15 	June 30, 2007, and before December 30, 2009.

136.16 	Sec. 10. Minnesota Statutes 2006, section 298.22, subdivision 7, is amended to read:
136.17 		Subd. 7.Project area development authority. (a) In addition to the other powers 
136.18 	granted in this section and other law and notwithstanding any limitations contained in 
136.19 	subdivision 5, the commissioner, for purposes of fostering economic development and 
136.20 	tourism within the Giants Ridge Recreation Area or the Ironworld Discovery Center area, 
136.21 	may spend any money made available to the agency under section 298.28 to acquire real 
136.22 	or personal property or interests therein by gift, purchase, or lease and may convey by 
136.23 	lease, sale, or other means of conveyance or commitment any or all property interests 
136.24 	owned or administered by the commissioner within such areas. 
136.25 	(b) In furtherance of development of the Giants Ridge Recreation Area or the 
136.26 	Ironworld Discovery Center area, the commissioner may establish and participate in 
136.27 	charitable foundations and nonprofit corporations, including a corporation within the 
136.28 	meaning of section 317A.011, subdivision 6. 
136.29 	(c) The term "Giants Ridge recreation area" refers to an economic development 
136.30 	project area established by the commissioner in furtherance of the powers delegated in this 
136.31 	section within St. Louis County in the western following portions of the town of White 
136.32 	and in the eastern portion of the westerly, adjacent, unorganized township the city of 
136.33 	Biwabik: Township 59 North, Range 15 West, Sections 7, 8, 17-20 and 29-32; Township 
137.1 	59 North, Range 16 West, Sections 6, 13, 24, 25 and 36; Township 58 North, Range 16 
137.2 	West, Section 1; and Township 58 North, Range 15 West, Sections 5 and 6.
137.3 	(d) The term "Ironworld Discovery Center area" refers to an economic development 
137.4 	and tourism promotion project area established by the commissioner in furtherance 
137.5 	of the powers delegated in this section within St. Louis County in the south portion of 
137.6 	the town of Balkan.

137.7 	Sec. 11. Minnesota Statutes 2006, section 298.221, is amended to read:
137.8 	298.221 RECEIPTS FROM CONTRACTS; APPROPRIATION.
137.9 	(a) Except as provided in paragraph (c), all money paid to the state of Minnesota 
137.10 	pursuant to the terms of any contract entered into by the state under authority of section 
137.11 	298.22 and any fees which may, in the discretion of the commissioner of Iron Range 
137.12 	resources and rehabilitation, be charged in connection with any project pursuant to that 
137.13 	section as amended, shall be deposited in the state treasury to the credit of the Iron Range 
137.14 	Resources and Rehabilitation Board account in the special revenue fund and are hereby 
137.15 	appropriated for the purposes of section 298.22. 
137.16 	(b) Notwithstanding section 16A.013, merchandise may be accepted by the 
137.17 	commissioner of the Iron Range Resources and Rehabilitation Board for payment of 
137.18 	advertising contracts if the commissioner determines that the merchandise can be used 
137.19 	for special event prizes or mementos at facilities operated by the board. Nothing in this 
137.20 	paragraph authorizes the commissioner or a member of the board to receive merchandise 
137.21 	for personal use. 
137.22 	(c) All fees charged by the commissioner in connection with public use of the 
137.23 	state-owned ski and golf facilities at the Giants Ridge Recreation Area and all other 
137.24 	revenues derived by the commissioner from the operation or lease of those facilities 
137.25 	and from the lease, sale, or other disposition of undeveloped lands at the Giants Ridge 
137.26 	Recreation Area must be deposited into an Iron Range Resources and Rehabilitation 
137.27 	Board account that is created within the state enterprise fund. All funds deposited in the 
137.28 	enterprise fund account are appropriated to the commissioner to be expended, subject to 
137.29 	approval of a majority of the board, as follows:
137.30 	(1) to pay costs associated with the acquisition, development, or improvement of 
137.31 	lands or the construction, equipping, operation, repair, or improvement of facilities within 
137.32 	the Giants Ridge Recreation Area facilities or lands;
137.33 	(2) to pay principal, interest and associated bond issuance, reserve, and servicing 
137.34 	costs associated with the financing of the facilities acquisition, development, or 
138.1 	improvement of lands or the construction, equipping, operation, repair, or improvement 
138.2 	of facilities within the Giants Ridge Recreation Area; and
138.3 	(3) to pay the costs of any other project or program within the Giants Ridge 
138.4 	Recreation Area authorized under section 298.22. 

138.5 	Sec. 12. Minnesota Statutes 2006, section 298.2211, subdivision 1, is amended to read:
138.6 		Subdivision 1.Purpose; grant of authority. In order to accomplish the legislative 
138.7 	purposes specified in sections 469.142 to 469.165 and chapter 462C, within the taconite 
138.8 	assistance area as defined in section 273.1341, the commissioner of Iron Range resources 
138.9 	and rehabilitation may exercise the following powers: (1) all powers conferred upon a 
138.10 	rural development financing authority under sections 469.142 to 469.149; (2) all powers 
138.11 	conferred upon a city under chapter 462C; (3) all powers conferred upon a municipality or 
138.12 	a redevelopment agency under sections 469.090 to 469.1082 and 469.152 to 469.165; (4) 
138.13 	all powers conferred upon municipalities under sections 412.491, 450.31, and 471.15; (5) 
138.14 	all powers provided by sections 469.142 to 469.151 to further any of the purposes and 
138.15 	objectives of chapter 462C and sections 469.152 to 469.165; (5) (6) apply for, borrow, 
138.16 	receive, and expend grant and loan money made available from federal sources and from 
138.17 	federally funded programs; and (6) (7) all powers conferred upon a municipality or an 
138.18 	authority under sections 469.174 to 469.177, 469.178, except subdivision 2 thereof, and 
138.19 	469.179, subject to compliance with the provisions of section 469.175, subdivisions 1, 2, 
138.20 	and 3; provided that any tax increments derived by the commissioner from the exercise of 
138.21 	this authority may be used only to finance or pay premiums or fees for insurance, letters of 
138.22 	credit, or other contracts guaranteeing the payment when due of net rentals under a project 
138.23 	lease or the payment of principal and interest due on or repurchase of bonds issued to 
138.24 	finance a project or program, to accumulate and maintain reserves securing the payment 
138.25 	when due on bonds issued to finance a project or program, or to provide an interest rate 
138.26 	reduction program pursuant to section 469.012, subdivision 7, or as provided in section 
138.27 	298.221, paragraph (c), clauses (1) to (3). Tax increments and earnings thereon remaining 
138.28 	in any bond reserve account after payment or discharge of any bonds secured thereby shall 
138.29 	be used within one year thereafter in furtherance of this section or returned to the county 
138.30 	auditor of the county in which the tax increment financing district is located. If returned 
138.31 	to the county auditor, the county auditor shall immediately allocate the amount among 
138.32 	all government units which would have shared therein had the amount been received as 
138.33 	part of the other ad valorem taxes on property in the district most recently paid, in the 
138.34 	same proportions as other taxes were distributed, and shall immediately distribute it to 
138.35 	the government units in accordance with the allocation. 

139.1 	Sec. 13. Minnesota Statutes 2006, section 298.2211, is amended by adding a 
139.2 	subdivision to read:
139.3 		Subd. 7.Tax increment financing district; special rules. (a) Upon adoption of 
139.4 	the development program for a project and a tax increment financing plan for a district 
139.5 	or districts described in this section, the rules provided under this section apply to the 
139.6 	project and district. For purposes of this subdivision, "project" means a project as 
139.7 	defined in section 469.174, subdivision 8, to be established by the commissioner, that 
139.8 	has boundaries that are coterminous with the Giants Ridge Recreation Area as defined 
139.9 	in section 298.22, subdivision 7. For purposes of this subdivision, "district" means an 
139.10 	economic development tax increment financing district established by the commissioner 
139.11 	within the Giants Ridge Recreation Area.
139.12 	(b) Each parcel within a project shall be deemed eligible for inclusion in an 
139.13 	economic development tax increment financing district.
139.14 	(c) Original net tax capacity means the total net tax capacities for taxes payable in 
139.15 	2007, of (i) all land within the district, except for the parcels known as the Lodge at 
139.16 	Giants Ridge, the Villas at Giants Ridge, and the Woodlands; and (ii) the net tax capacities 
139.17 	of the structures located on these parcels.
139.18 	(d) Certification of the original net tax capacity under section 469.177, subdivision 
139.19 	1, does not apply.
139.20 	(e) Captured net tax capacity means the total net tax capacities of (1) any structures 
139.21 	located within the district, except for the parcels described in paragraph (c), and (2) the 
139.22 	increased net tax capacities of the structures on these parcels after taxes payable year 2007.
139.23 	(f) The certified original local tax rate for the district under section 469.177, 
139.24 	subdivision 1a, does not apply.
139.25 	(g) No tax increment may be paid to the commissioner after 12 years after receipt by 
139.26 	the commissioner of the first tax increment.
139.27 	(h) The five-year rule under section 469.1763, subdivision 3, does not apply.
139.28 	(i) The limitations on spending increment outside of the district under section 
139.29 	469.1763, subdivision 2, do not apply, but increments may only be expended within the 
139.30 	Giants Ridge Recreation Area.
139.31 	(j) The authority to approve a tax increment financing plan to establish a district or 
139.32 	districts under this section expires on December 31, 2023.

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

139.34 	Sec. 14. Minnesota Statutes 2006, section 469.169, is amended by adding a subdivision 
139.35 	to read:
140.1 		Subd. 18.Additional border city allocations; 2007. (a) In addition to tax 
140.2 	reductions authorized in subdivisions 7 to 17, the commissioner shall allocate $750,000 
140.3 	for tax reductions to border city enterprise zones in cities located on the western border 
140.4 	of the state. The commissioner shall make allocations to zones in cities on the western 
140.5 	border on a per capita basis. Allocations made under this subdivision may be used for 
140.6 	tax reductions as provided in section 469.171, or for other offsets of taxes imposed on 
140.7 	or remitted by businesses located in the enterprise zone, but only if the municipality 
140.8 	determines that the granting of the tax reduction or offset is necessary in order to retain a 
140.9 	business within or attract a business to the zone. The city alternatively may elect to use 
140.10 	any portion of the allocation provided in this paragraph for tax reductions under section 
140.11 	469.1732 or 469.1734. 
140.12 	(b) The commissioner shall allocate $750,000 for tax reductions under section 
140.13 	469.1732 or 469.1734 to cities with border city enterprise zones located on the western 
140.14 	border of the state. The commissioner shall allocate this amount among the cities on a per 
140.15 	capita basis. The city alternatively may elect to use any portion of the allocation provided 
140.16 	in this paragraph for tax reductions as provided in section 469.171.

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

140.18 	Sec. 15. Minnesota Statutes 2006, section 469.312, is amended by adding a subdivision 
140.19 	to read:
140.20 		Subd. 6.Termination of designation of qualified business. No person will be 
140.21 	deemed to be a qualified business eligible for the benefits provided in sections 469.310 
140.22 	to 469.320 unless the person has entered into a business subsidy agreement with a local 
140.23 	government unit as provided in section 469.310, subdivision 11, prior to May 1, 2007.

140.24 	Sec. 16. [469.342] TAX-FREE RENAISSANCE ZONE; FERGUS FALLS.
140.25 		Subdivision 1.Designation of zone. The area of the campus of the former state 
140.26 	regional treatment center in the city of Fergus Falls is designated a tax-free renaissance 
140.27 	zone. The zone includes the five buildings and associated land that were acquired by 
140.28 	the city prior to January 1, 2007.
140.29 		Subd. 2.Duration limit. Designation of the zone is effective for 15 calendar years 
140.30 	beginning on the date specified, by resolution, by the governing body of the city of Fergus 
140.31 	Falls. The city may divide the area of the zone into subzones. If the city divides the 
140.32 	zone into separate subzones, the duration of each subzone begins on the date specified 
140.33 	by the resolution establishing the subzone. Each subzone has a duration of 15 calendar 
141.1 	years, unless the authorizing resolution specifies a shorter limit. No subzone duration may 
141.2 	begin later than January 1, 2013.
141.3 		Subd. 3.Tax incentives available in the zone. Individuals that reside in the zone, 
141.4 	qualified businesses that operate in the zone, and property located in the zone qualify for 
141.5 	the following tax exemptions and incentives:
141.6 	(1) exemption for business income from the individual income and corporate 
141.7 	franchise taxes as provided under section 469.343;
141.8 	(2) exemption from the property tax as provided in section 272.02, subdivision 
141.9 	85; and
141.10 	(3) the historic preservation tax credit under section 290.06, subdivision 34.

141.11 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
141.12 	body of the city of Fergus Falls with section 645.021.

141.13 	Sec. 17. [469.343] BUSINESS INCOME TAX EXEMPTION.
141.14 		Subdivision 1.Definitions. (a) For purposes of this section and section 469.342, the 
141.15 	following terms have the meanings given them.
141.16 	(b) A "qualified business" is a person carrying on a trade or business at a place of 
141.17 	business located within the zone that has entered into a business subsidy agreement, as 
141.18 	defined in section 116J.994, with the city of Fergus Falls before the first day of the taxable 
141.19 	year or the taxes payable year for purposes of the property tax exemption. 
141.20 	(c) "Zone" is the tax-free renaissance zone designated under section 469.342.
141.21 	(d) "Zone payroll" is that portion of the payroll factor under section 290.191 that 
141.22 	represents:
141.23 	(1) wages or salaries paid to an individual for services performed in the zone; or 
141.24 	(2) wages or salaries paid to individuals working from offices within a zone if their 
141.25 	employment requires them to work outside the zone and the work is incidental to the work 
141.26 	performed by the individual within the zone.
141.27 	(e) "Zone percentage" means the following fraction reduced to a percentage:
141.28 	(1) the numerator of the fraction is: (i) the ratio of the taxpayer's property factor 
141.29 	under section 290.191 located in the zone for the taxable year over the property factor 
141.30 	numerator determined under section 290.191, plus (ii) the ratio of the taxpayer's zone 
141.31 	payroll factor over the payroll factor numerator determined under section 290.191; and
141.32 	(2) the denominator of the fraction is two.
141.33 	When calculating the zone percentage for a business that is part of a unitary business 
141.34 	as  defined under section 290.17, subdivision 4, the denominator of the payroll and 
142.1 	property factors is  the Minnesota payroll and property of the unitary business as reported 
142.2 	on the combined report  under section 290.17, subdivision 4, paragraph (j).
142.3 		Subd. 2.Tax exemption. (a) A qualified business is exempt from taxation under 
142.4 	sections 290.01, 290.02, the alternative  minimum tax under section 290.0921, and 
142.5 	the minimum fee under section 290.0922, on the portion  of its income attributable to 
142.6 	operations within the zone, designated under section 469.342.
142.7 	(b) This exemption is determined as follows:
142.8 	(1) for purposes of the individual income tax imposed under sections 290.01 and 
142.9 	290.091, the taxpayer may subtract an amount equal to the total income included in 
142.10 	federal taxable income attributable to operation of a trade or business, multiplied by 
142.11 	the zone percentage;
142.12 	(2) for purposes of the tax imposed under section 290.02, by multiplying its taxable 
142.13 	net  income by its zone percentage and subtracting the result in determining taxable income;
142.14 	(3) for purposes of the alternative minimum tax under section 290.0921, by 
142.15 	multiplying  its alternative minimum taxable income by its zone percentage and reducing 
142.16 	alternative minimum taxable income by this amount; and
142.17 	 (4) for purposes of the minimum fee under section 290.0922, by excluding property 
142.18 	and  payroll in the zone from the computations of the fee or by exempting the entity under 
142.19 	section  290.0922, subdivision 2, clause (9).
142.20 		Subd. 3.Application period. (a) This section applies only to taxable years 
142.21 	beginning during the duration of the tax-free renaissance zone or subzone.
142.22 	(b) For the final three years of the duration of the zone or subzone, the deductions or 
142.23 	exemptions under this section must be multiplied by the following percentages:
142.24 	(1) for taxable years beginning during the third to the last calendar year of the 
142.25 	duration, 75 percent;
142.26 	(2) for taxable years beginning during the second to the last calendar year of the 
142.27 	duration, 50 percent; and 
142.28 	(3) for taxable years beginning the last calendar year of the duration limit, 25 percent.

142.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
142.30 	December 31, 2007.

142.31 	Sec. 18. [469.344] LIMIT ON TAX REDUCTIONS; APPLICATIONS 
142.32 	REQUIRED.
142.33 		Subdivision 1.Businesses must apply. To claim a tax credit under section 290.06, 
142.34 	subdivision 34, or an exemption under section 469.343, a business must apply to the city 
142.35 	for a tax benefit certificate. As a condition of its application, the business must agree to 
143.1 	furnish information to the city that is sufficient to verify the eligibility for any credits or 
143.2 	other tax reductions claimed. The total amount of the state tax reductions allowed for the 
143.3 	specified period may not exceed the amount of the tax credit certificates provided by 
143.4 	the city to the business. The city must verify the amount of tax reduction or credits for 
143.5 	which each business is eligible.
143.6 		Subd. 2.City limitations. (a) The city may provide tax benefit certificates to 
143.7 	businesses that apply and meet the requirements for the tax credit and exemption. The 
143.8 	certificates that the city may provide for the period covered by this section is limited to 
143.9 	the amount specified in this subdivision.
143.10 	(b) The maximum amount of tax credit certificates the city may issue over the 
143.11 	duration of the program is $1,000,000.
143.12 		Subd. 3.Appropriation; waivers. An amount sufficient to fund any tax reductions 
143.13 	under section 469.343, is appropriated to the commissioner of revenue from the general 
143.14 	fund.

143.15 	Sec. 19. Minnesota Statutes 2006, section 473F.08, is amended by adding a subdivision 
143.16 	to read:
143.17 		Subd. 3c.Bloomington phase II computation. Effective for property taxes payable 
143.18 	in 2009 and thereafter, after the Hennepin County auditor has computed the areawide 
143.19 	portion of the levy for the city of Bloomington pursuant to subdivision 3, clause (a), 
143.20 	the auditor shall annually add a dollar amount to the city of Bloomington's areawide 
143.21 	portion of the levy equal to the amount which has been certified by the auditor as the 
143.22 	amount of the levy generated by the property included in phase II of the Mall of America 
143.23 	project. The total areawide portion of the levy for the city of Bloomington, including the 
143.24 	additional amount related to phase II of the Mall of America project certified pursuant to 
143.25 	this subdivision shall be certified by the Hennepin County auditor to the administrative 
143.26 	auditor pursuant to subdivision 5. The Hennepin County auditor shall distribute to the 
143.27 	city of Bloomington the additional areawide portion of the levy computed pursuant to 
143.28 	this subdivision at the same time that payments are made to the other counties pursuant 
143.29 	to subdivision 7a. The additional distribution to the city of Bloomington under this 
143.30 	subdivision terminates effective for the first taxes payable year after the cost of the parking 
143.31 	facility for the phase II of the Mall of America project has been paid.

143.32 	Sec. 20. Minnesota Statutes 2006, section 473F.08, subdivision 5, is amended to read:
143.33 		Subd. 5.Areawide tax rate. On or before August 25 of each year, the county 
143.34 	auditor shall certify to the administrative auditor that portion of the levy of each 
144.1 	governmental unit determined under subdivisions 3, clause (a), 3a, and 3b , and 3c. The 
144.2 	administrative auditor shall then determine the areawide tax rate sufficient to yield an 
144.3 	amount equal to the sum of such levies from the areawide net tax capacity. On or before 
144.4 	September 1 of each year, the administrative auditor shall certify the areawide tax rate to 
144.5 	each of the county auditors.

144.6 	Sec. 21. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by 
144.7 	Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10, 
144.8 	section 12, is amended to read:
144.9 		Subd. 4.Authority. For housing replacement projects in the city of Crystal, 
144.10 	"authority" means the Crystal economic development authority. For housing replacement 
144.11 	projects in the city of Fridley, "authority" means the housing and redevelopment authority 
144.12 	in and for the city of Fridley or a successor in interest. For housing replacement 
144.13 	projects in the city of Minneapolis, "authority" means the Minneapolis community 
144.14 	development agency or its successors and assigns. For housing replacement projects 
144.15 	in the city of St. Paul, "authority" means the St. Paul housing and redevelopment 
144.16 	authority. For housing replacement projects in the city of Duluth, "authority" means the 
144.17 	Duluth economic development authority. For housing replacement projects in the city of 
144.18 	Richfield, "authority" is the authority as defined in Minnesota Statutes, section 469.174, 
144.19 	subdivision 2, that is designated by the governing body of the city of Richfield. For 
144.20 	housing replacement projects in the city of Columbia Heights, "authority" is the authority 
144.21 	as defined in Minnesota Statutes, section 469.174, subdivision 2, that is designated by the 
144.22 	governing body of the city of Columbia Heights.

144.23 	EFFECTIVE DATE. This section is effective the day following final enactment 
144.24 	and upon compliance by the governing body of the city of Minneapolis with Minnesota 
144.25 	Statutes, section 645.021, subdivision 3.

144.26 	Sec. 22. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by 
144.27 	Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10, 
144.28 	section 13, and Laws 2002, chapter 377, article 7, section 6, is amended to read:
144.29 		Subdivision 1.Creation of projects. (a) An authority may create a housing 
144.30 	replacement project under sections 44 to 47, as provided in this section.
144.31 	(b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, the authority 
144.32 	may designate up to 50 parcels in the city to be included in a housing replacement 
144.33 	district. No more than ten parcels may be included in year one of the district, with up 
144.34 	to ten additional parcels added to the district in each of the following nine years. For 
145.1 	the cities of Minneapolis, St. Paul, and Duluth, each authority may designate not more 
145.2 	than 200 parcels in the city to be included in a housing replacement district over the life 
145.3 	of the district. For the city of Minneapolis, the authority may designate not more than 
145.4 	400 parcels in the city to be included in a housing replacement district over the life of 
145.5 	the district. The only parcels that may be included in a district are (1) vacant sites, (2) 
145.6 	parcels containing vacant houses, or (3) parcels containing houses that are structurally 
145.7 	substandard, as defined in Minnesota Statutes, section 469.174, subdivision 10.
145.8 	(c) The city in which the authority is located must pay at least 25 percent of the 
145.9 	housing replacement project costs from its general fund, a property tax levy, or other 
145.10 	unrestricted money, not including tax increments.
145.11 	(d) The housing replacement district plan must have as its sole object the acquisition 
145.12 	of parcels for the purpose of preparing the site to be sold for market rate housing. As 
145.13 	used in this section, "market rate housing" means housing that has a market value that 
145.14 	does not exceed 150 percent of the average market value of single-family housing in that 
145.15 	municipality.

145.16 	EFFECTIVE DATE. This section is effective the day following final enactment 
145.17 	and upon compliance by the governing body of the city of Minneapolis with Minnesota 
145.18 	Statutes, section 645.021, subdivision 3.

145.19 	Sec. 23. Laws 1996, chapter 464, article 1, section 8, subdivision 3, is amended to read:
145.20 		Subd. 3.Special rules. (a) Tax increment may not be captured by the port authority 
145.21 	from the tax increment financing district on the met center property after December 31 of 
145.22 	the year in which tax increments, assessments, and other revenues from the district and 
145.23 	the accumulated increments from the district consisting of the Kelly property exceed 
145.24 	the permitted expenditures under paragraph (d). The provisions of this paragraph apply 
145.25 	beginning with the first calendar year after the conditions precedent in subdivision 2 
145.26 	are satisfied and construction has begun on improvements on the met center site. No 
145.27 	increments may, in any event, be collected from the tax increment financing district on the 
145.28 	met center site after December 31, 2018 2025.
145.29 	(b) The provisions of Minnesota Statutes, section 273.1399, do not apply to the tax 
145.30 	increment financing district on the met center property.
145.31 	(c) The governing body of the city of Bloomington must elect the method of 
145.32 	computation of tax increment specified in Minnesota Statutes, section 469.177, subdivision 
145.33 	3, paragraph (b), in the tax increment financing district on the met center property.
145.34 	(d) Tax increments, assessments, and other revenues derived from the tax increment 
145.35 	district on the met center property and any accumulated tax increments from the tax 
146.1 	increment financing district on the Kelly property may be used to finance only the 
146.2 	following:
146.3 	(1) amounts that the city or port authority must pay to reimburse or otherwise 
146.4 	pay the developer for public improvements because of counted value resulting from 
146.5 	investment in property at the met center site under section 9.2(05) of the restated contract 
146.6 	for purchase and private redevelopment of land, by and among the city of Bloomington, 
146.7 	the port authority of the city of Bloomington, and the Mall of America Company, dated 
146.8 	May 31, 1988;
146.9 	(2) interest and other financing costs the city or port authority pays or incurs on, but 
146.10 	that are not included in, the amounts under clause (1);
146.11 	(3) interest and principal on qualified bonds to the extent that other available 
146.12 	revenues and increments from other sources that are pledged to pay the bonds are 
146.13 	insufficient. In determining whether other available revenues or increments are 
146.14 	insufficient, spending of these revenues for only the following items reduce available 
146.15 	revenues (all other revenues are deemed to be available):
146.16 	(A) payment of debt service on bonds and obligations issued and sold before March 
146.17 	31, 1996;
146.18 	(B) payments under binding written contracts in effect on March 31, 1996, to which 
146.19 	the increments or other revenues are pledged; and 
146.20 	(C) reasonable administrative expenses, subject to the limits under Minnesota 
146.21 	Statutes, section 469.176, subdivision 3; and 
146.22 	(4) reasonable administrative expenses as provided under Minnesota Statutes, 
146.23 	sections 469.174 to 469.178. The amounts permitted under clauses (1) and (2) must be 
146.24 	used to determine the limit or administrative expenses under Minnesota Statutes, section 
146.25 	469.176, subdivision 3.
146.26 	For the purposes of paragraph (d), "qualified bonds" means:
146.27 	(i) bonds or other obligations issued and sold before March 31, 1996, to which 
146.28 	increments from the tax increment financing district consisting of the Kelly property are 
146.29 	pledged; and 
146.30 	(ii) bonds or other obligations that refund bonds described in (i), if the refunding 
146.31 	bonds do not increase the present value of the debt service payments secured by the 
146.32 	increments and are secured by a pledge of the same increments and other revenues as 
146.33 	secured by the bonds to be refunded.
146.34 	For purposes of determining the qualifying ratio percent for counted value under 
146.35 	the formula in section 9.2(05) of the restated contract under clause (1), investment in 
147.1 	property at the met center site is deemed to be after or in addition to all the investment at 
147.2 	other sites covered by the restated contract.

147.3 	Sec. 24. Laws 2005, First Special Session chapter 3, article 10, section 23, is amended 
147.4 	to read:
147.5 	Sec. 23. GRANTS TO QUALIFYING BUSINESSES.
 147.6 	$750,000 is appropriated in fiscal year 2006 from the general fund to the 
147.7 	commissioner of employment and economic development to be distributed to the 
147.8 	foreign trade zone authority to provide grants to qualified businesses as determined 
147.9 	by the authority, subject to Minnesota Statutes, sections 116J.993 to 116J.995, to 
147.10 	provide incentives for the businesses to locate their operations in an international 
147.11 	economic development zone. Of this appropriation, up to $250,000 may be used by the 
147.12 	commissioner for a study to determine the economic viability of business plans for 
147.13 	international economic development zones. If the money is not distributed during fiscal 
147.14 	year 2006, it remains available for distribution under this section during fiscal year 2007.

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

147.16 	Sec. 25. CITY OF BLOOMINGTON; TAX INCREMENT FINANCING 
147.17 	DISTRICT; PROJECT REQUIREMENTS.
 147.18 		Subdivision 1.Addition of parcels to Tax Increment District No. 1-G.
 147.19 	Notwithstanding the provisions of Minnesota Statutes, section 469.175, subdivision 4, 
147.20 	or any other law to the contrary, the governing bodies of the Port Authority of the city 
147.21 	of Bloomington and the city of Bloomington may elect to eliminate certain real property 
147.22 	from Tax Increment District No. 1-C within Industrial Development District No. 1 Airport 
147.23 	South in the city of Bloomington, Minnesota, and expand the boundaries of Tax Increment 
147.24 	District No. 1-G to include real property, which is described as follows:
147.25 	(1) PARCEL A: Outlot A, MALL OF AMERICA 5TH ADDITION, according to 
147.26 	the recorded plat thereof, Hennepin County, Minnesota;
147.27 	(2) PARCEL B: Lots 1 and 2, Block 1, MALL OF AMERICA 6TH ADDITION, 
147.28 	according to the recorded plat thereof, Hennepin County, Minnesota;
147.29 	(3) PARCEL C: That part of Lindau Lane lying westerly of 24th Avenue South and 
147.30 	lying easterly of State Highway No. 77;
147.31 	(4) PARCEL D: Those parts of Lots 1, 2, and 3, Block 1, MALL OF AMERICA 
147.32 	3RD ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, 
147.33 	which lie northerly of a line described as commencing at the most westerly northwest 
147.34 	corner of said Lot 1; thence on an assumed bearing of South 4 degrees 10 minutes 55 
148.1 	seconds West, along the west line of said Lot 1, a distance of 58.60 feet to the point of 
148.2 	beginning of the line to be described; thence South 89 degrees 59 minutes 29 seconds East 
148.3 	a distance of 205.48 feet; thence South 62 degrees 16 minutes 23 seconds East a distance 
148.4 	of 169.47 feet; thence North 445 degrees 01 minute 28 seconds East a distance of 249.76 
148.5 	feet; thence South 89 degrees 59 minutes 39 seconds East a distance of 88.47 feet; thence 
148.6 	South 45 degrees 09 minutes 10 seconds East a distance of 225.13 feet; thence South 89 
148.7 	degrees 59 minutes 52 seconds East a distance of 303.62 feet; thence South 0 degrees 00 
148.8 	minutes 08 seconds West a distance of 10.00 feet; thence North 89 degrees 57 minutes 
148.9 	47 seconds East a distance of 55.90 feet; thence North 0 degrees 06 minutes 52 seconds 
148.10 	West a distance of 10.01 feet; thence North 89 degrees 59 minutes 04 seconds East a 
148.11 	distance of 332.04 feet; thence North 44 degrees 57 minutes 59 seconds East a distance of 
148.12 	251.28 feet; thence South 45 degrees 05 minutes 41 seconds East a distance of 267.55 
148.13 	feet; thence North 73 degrees 11 minutes 28 seconds East a distance of 145.63 feet; thence 
148.14 	South 89 degrees 59 minutes 38 seconds East a distance of 217.21 feet to the east line of 
148.15 	said Lot 1 and said line there terminating;
148.16 	(5) PARCEL E: That part of Lot 1, Block 1, MALL OF AMERICA 3RD 
148.17 	ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, 
148.18 	described as commencing at the most southerly southwest corner of said Lot 1; thence 
148.19 	on an assumed bearing of South 88 degrees 03 minutes 50 seconds East, along the south 
148.20 	line of said Lot 1, a distance of 847.28 feet to the point of beginning of the parcel to be 
148.21 	described; thence North 0 degrees 01 minutes 05 seconds West a distance of 307.69 feet; 
148.22 	thence North 89 degrees 59 minutes 32 seconds East a distance of 163.77 feet; thence 
148.23 	North 0 degrees 00 minutes 36 seconds East a distance of 10.17 feet; thence South 89 
148.24 	degrees 59 minutes 24 seconds East a distance 55.93 feet; thence South 0 degrees 02 
148.25 	minutes 42 seconds West a distance of 10.21 feet; thence South 89 degrees 59 minutes 24 
148.26 	seconds East a distance of 242.25 feet; thence South 0 degrees 00 minutes 36 seconds 
148.27 	West a distance of 54.87 feet; thence South 62 degrees 14 minutes 23 seconds East a 
148.28 	distance of 22.55 feet; thence South 45 degrees 05 minutes 26 seconds East a distance 
148.29 	of 263.33 feet; thence South 0 degrees 12 minutes 39 seconds East a distance of 62.13 
148.30 	feet to said south line of Lot 1; thence westerly along said south line of Lot 1, a distance 
148.31 	of 668.64 feet to the point of beginning;
148.32 	(6) PARCEL F: That part of Lot 1, Block 1, MALL OF AMERICA 3RD 
148.33 	ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, 
148.34 	described as beginning at the most westerly southwest corner of said Lot 1; thence on an 
148.35 	assumed bearing of North 4 degrees 10 minutes 55 seconds East, along the west line of 
148.36 	said Lot 1, a distance of 490.00 feet; thence South 89 degrees 59 minutes 26 seconds East 
149.1 	a distance of 69.49 feet; thence South 0 degrees 00 minutes 34 seconds West a distance of 
149.2 	488.70 feet; thence North 89 degrees 59 minutes 26 seconds West a distance of 105.14 
149.3 	feet to the point of beginning;
149.4 	(7) PARCEL G: That part of Lot 1, Block 1, MALL OF AMERICA 3RD 
149.5 	ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, 
149.6 	described as commencing at the most westerly southwest corner of said Lot 1; thence on 
149.7 	an assumed bearing of North 4 degrees 10 minutes 55 seconds East, along the west line 
149.8 	of said Lot 1, a distance of 873.70 feet; thence South 89 degrees 58 minutes 59 seconds 
149.9 	East a distance of 273.87 feet to the point of beginning of the parcel to be described; 
149.10 	thence continuing South 89 degrees 58 minutes 59 seconds East a distance of 130.00 feet; 
149.11 	thence South 0 degrees 01 minute 01 second West a distance of 216.53 feet; thence South 
149.12 	85 degrees 23 minutes 04 seconds East a distance of 1.70 feet; thence South 0 degrees 
149.13 	01 minute 01 second West a distance of 87.63 feet; thence South 83 degrees 20 minutes 
149.14 	10 seconds West a distance of 1.68 feet; thence South 0 degrees 01 minute 49 seconds 
149.15 	East a distance of 216.46 feet; thence North 89 degrees 58 minutes 59 seconds West a 
149.16 	distance of 130.21 feet; thence North 0 degrees 01 minute 01 second East a distance of 
149.17 	520.95 feet to the point of beginning, which lies above an elevation of 894.2 feet, Mean 
149.18 	Sea Level Datum NGVD 1929 adjustment;
149.19 	(8) PARCEL H: That part of Lot 1, Block 1, MALL OF AMERICA 3RD 
149.20 	ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, 
149.21 	described as commencing at the most westerly southwest corner of said Lot 1; thence on 
149.22 	an assumed bearing of North 4 degrees 10 minutes 55 seconds East, along the west line of 
149.23 	said Lot 1, a distance of 873.70 feet; thence South 89 degrees 58 minutes 59 seconds East a 
149.24 	distance of 403.87 feet; thence North 89 degrees 56 minutes 58 seconds East a distance of 
149.25 	61.26 feet to the point of beginning of the parcel to be described; thence South 89 degrees 
149.26 	56 minutes 58 seconds West a distance of 61.26 feet; thence South 0 degrees 01 minute 01 
149.27 	second West a distance of 216.53 feet; thence South 85 degrees 23 minutes 04 seconds 
149.28 	East a distance of 1.70 feet; thence South 0 degrees 01 minute 01 second West a distance 
149.29 	of 87.63 feet; thence South 83 degrees 20 minutes 10 seconds West a distance of 1.68 feet; 
149.30 	thence South 0 degrees 01 minute 49 seconds East a distance of 216.46 feet; thence North 
149.31 	89 degrees 56 minutes 58 seconds East a distance of 61.15 feet to a line bearing South 0 
149.32 	degrees 00 minutes 24 seconds West from the point of beginning; thence North 0 degrees 
149.33 	00 minutes 24 seconds East a distance of 520.95 feet to the point of beginning;
149.34 	(9) PARCEL I: That part of Lot 1, Block 1, MALL OF AMERICA 3RD ADDITION, 
149.35 	according to the recorded plat thereof, Hennepin County, Minnesota, described as 
149.36 	commencing at the most westerly southwest corner of said Lot 1; thence on an assumed 
150.1 	bearing of North 4 degrees 10 minutes 55 seconds East, along the west line of said Lot 1, a 
150.2 	distance of 873.70 feet; thence South 89 degrees 58 minutes 59 seconds East a distance 
150.3 	of 403.87 feet; thence North 89 degrees 56 minutes 58 seconds East a distance of 61.26 
150.4 	feet; thence South 0 degrees 00 minutes 24 seconds West a distance of 5.54 feet to the 
150.5 	point of beginning of the parcel to be described; thence continuing South 0 degrees 00 
150.6 	minutes 24 seconds West a distance of 300.00 feet; thence South 89 degrees 59 minutes 36 
150.7 	seconds East a distance of 123.79 feet; thence North 0 degrees 00 minutes 24 seconds East 
150.8 	a distance of 299.98 feet; thence North 89 degrees 58 minutes 55 seconds West a distance 
150.9 	of 123.79 feet to the point of beginning, which lies above an elevation of 877.6 feet, Mean 
150.10 	Sea Level Datum NGVD 1929 adjustment;
150.11 	(10) PARCEL J: That part of Lot 4, Block 1, MALL OF AMERICA 3RD 
150.12 	ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, which 
150.13 	lies above an elevation of 878.0 feet, Mean Sea Level Datum NGVD 1929 adjustment; and
150.14 	(11) PARCEL K: That part of Lot 1, Block 1, MALL OF AMERICA 3RD 
150.15 	ADDITION, according to the recorded plat thereof, Hennepin County, Minnesota, 
150.16 	described as beginning at the most southerly southeast corner of said Lot 1; thence on an 
150.17 	assumed bearing of North 86 degrees 49 minutes 30 seconds West, along the south line of 
150.18 	said Lot 1, a distance of 117.87 feet; thence North 0 degrees 01 minute 27 seconds East a 
150.19 	distance of 293.98 feet; thence North 89 degrees 59 minutes 41 seconds East a distance of 
150.20 	213.38 feet to the east line of said Lot 1; thence southerly and westerly along said east and 
150.21 	south lines of Lot 1, a distance of 357.03 feet to the point of beginning.
150.22 		Subd. 2.Original tax capacity of Tax Increment District No. 1-G. Upon 
150.23 	inclusion of the real property described above in the Tax Increment District No. 1-G, 
150.24 	the Hennepin County auditor must increase the original tax capacity of Tax Increment 
150.25 	District No. 1-G by $10,490.
150.26 		Subd. 3.Use of increments. All tax increments from Tax Increment District No. 
150.27 	1-G must be used for infrastructure costs.
150.28 		Subd. 4.Public hearing on district modification. When the governing bodies of 
150.29 	the port authority or the city elect to exercise the authority provided in subdivision 1 to 
150.30 	modify the districts, they must conduct a public hearing after published notice on the 
150.31 	issue, with the meeting beginning between 6:00 p.m. and 7:00 p.m. on a weeknight. 
150.32 	Modification of the district must be approved by a unanimous vote of all members of the 
150.33 	governing body who are present at the meeting.
150.34 		Subd. 5.Construction of Mall of America phase II. The governing body of the 
150.35 	city of Bloomington and the Bloomington port authority, as a condition of providing tax 
150.36 	increments for infrastructure costs of the Mall of America phase II, must enter into an 
151.1 	agreement with the developers of the project that ensures that the facility be, to the greatest 
151.2 	extent practicable, constructed of American-made steel.
151.3 		Subd. 6.No strikes; lockouts. The city or the port authority, together with the 
151.4 	developer of the project, must negotiate a public sector project labor agreement or other 
151.5 	agreement to prevent strikes and lockouts that would halt, delay, or impede construction 
151.6 	of the facility.
151.7 		Subd. 7.No work stoppages; hospitality operations. (a) As a result of tax 
151.8 	increment financing the city of Bloomington has a financial or proprietary interest at risk 
151.9 	in the Mall of American phase II development project, which is anticipated to include 
151.10 	hospitality operations. This subdivision is intended to protect the city's proprietary and 
151.11 	financial interests by requiring agreements that prevent disruption of hospitality operations 
151.12 	due to work stoppages.
151.13 	(b) For purposes of this subdivision, the following terms have the meanings given 
151.14 	them:
151.15 	(1) "contract" means:
151.16 	(i) any development agreement, contract, lease, license, or other agreement pursuant 
151.17 	to which the developer, contractor, or subcontractors receives financing for the project 
151.18 	from the city directly or indirectly, including tax increment financing for infrastructure; or
151.19 	(ii) any subcontract, sublease, sublicense or other transfer or assignment of any 
151.20 	right, title, or interest received from the city pursuant to any such development agreement, 
151.21 	contract, lease, or license; and
151.22 	(2) "hospitality operations" means hotels or motels providing lodging and other guest 
151.23 	accommodations and restaurants, bars, clubs, cafeterias, food, and beverage operations.
151.24 	(c) To protect its proprietary and financial interests, the city of Bloomington shall 
151.25 	require that each and every contractor and employer of employees hired to staff hospitality 
151.26 	operations be or become signatory to valid collective bargaining agreements or other 
151.27 	contracts under United States Code, title 29, section 185, with any labor organization 
151.28 	seeking to represent hospitality workers employed in the contractor's and/or employer's 
151.29 	hospitality operations in the Mall of America phase II development project as a condition 
151.30 	precedent to its contract with the city of Bloomington. Each collective bargaining 
151.31 	agreement or contract must contain a provision prohibiting the labor organization and its 
151.32 	members, and in the case of a collective bargaining agreement, all employees covered 
151.33 	by the agreement, from engaging in any picketing, work stoppages, boycotts or any 
151.34 	other economic interference with the hospitality operations of contractor or any persons 
151.35 	under contract to it for the duration of the time required for the repayment of the city's 
151.36 	indebtedness incurred to finance the acquisition or development of such project, or for 
152.1 	the duration of contractor's contract or contracts with the city for the operation of such 
152.2 	development project, whichever period of time is more extensive. Each agreement must 
152.3 	provide that during this time period, all disputes relating to employment conditions or the 
152.4 	negotiation thereof shall be submitted to final and binding arbitration. Each and every 
152.5 	contractor and employer of employees hired to staff hospitality operations shall require 
152.6 	that any work under its contract or contracts with the city to be done by the contractor's 
152.7 	or employer's contractors, subcontractors, tenants, or subtenants shall be done under 
152.8 	collective bargaining agreements or other contracts under United States Code, title 29, 
152.9 	section 185, containing the same provisions as specified above.
152.10 		Subd. 8.Living wage. Any agreement to provide financial assistance to phase II 
152.11 	of the Mall of America project must include a provision that requires payment of wages 
152.12 	that meet the requirements of section 469.310, subdivision 11, paragraph (g), to persons 
152.13 	employed on a full-time basis at the facility.
152.14 		Subd. 9.Affordable access. To the extent determined by the governing body of 
152.15 	the city or the port authority, any agreement to provide financial assistance to phase II 
152.16 	of the Mall of America project must provide for affordable access to the amusement 
152.17 	areas of the facility.

152.18 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
152.19 	Statutes, section 645.021, subdivision 3.

152.20 	Sec. 26. CITY OF BLOOMINGTON; LOCAL TAXING AUTHORITY.
 152.21 		Subdivision 1.Additional taxes authorized; use of proceeds. Notwithstanding 
152.22 	Minnesota Statutes, section 477A.016, or any other law, ordinance, or charter provision 
152.23 	to the contrary, the governing body of the city of Bloomington may impose any or all of 
152.24 	the taxes described in this section. The proceeds of any taxes imposed under this section, 
152.25 	less refunds and the cost of collection, must be used to provide financing for a parking 
152.26 	facility for the Mall of America phase II.
152.27 		Subd. 2.Sales tax. The city may impose by ordinance a sales and use tax of up 
152.28 	to one percent within a special taxing district that includes the geographic area included 
152.29 	within Tax Increment Districts No. 1-C and No. 1-G in the city of Bloomington. The 
152.30 	provisions of Minnesota Statutes, section 297A.99, except for subdivisions 2 and 3, 
152.31 	govern the imposition, administration, collection, and enforcement of the tax authorized 
152.32 	in this subdivision.
152.33 		Subd. 3.Lodging tax. The city may impose, by ordinance, a tax of up to one percent 
152.34 	on the gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190. 
152.35 	This tax is in addition to any tax imposed under Minnesota Statutes, section 469.190.
153.1 		Subd. 4.Admissions and recreation tax. The city may impose, by ordinance, a 
153.2 	tax of up to one percent on admissions to entertainment and recreational facilities and 
153.3 	rental of recreation equipment at sites within Tax Increment Districts No. 1-C and No. 
153.4 	1-G in the city of Bloomington.

153.5 	EFFECTIVE DATE. This section is effective the day after compliance by the 
153.6 	governing body of the city of Bloomington with Minnesota Statutes, section 645.021, 
153.7 	subdivision 3.

153.8 	Sec. 27. BURNSVILLE; NORTHWEST QUADRANT TAX INCREMENT 
153.9 	FINANCING.
 153.10 		Subdivision 1.Definitions. (a)  For the purposes of this section, the words and 
153.11 	phrases defined have the meanings given them in this subdivision.
153.12 	(b) "City" means the city of Burnsville.
153.13 	(c)	"Project area" means the area in the city bounded on the south, southeast, and 
153.14 	southwest by the southerly right-of-way line of Minnesota Trunk Highway 13; on the east 
153.15 	by the easterly right-of-way line of Interstate Highway I-35W; on the north and northwest 
153.16 	by the Minnesota River; and on the west by the westerly corporate limits of the city, 
153.17 	together with a single parcel to the east of said Interstate Highway I-35W described as 
153.18 	the North 1370 feet of the West 1075 feet of the NW Quarter of Section 34 Township 27 
153.19 	Range 24 in the city of Burnsville, Dakota County, except the North 50 feet thereof; 
153.20 	provided that the project area includes the rights-of-way for all present and future highway 
153.21 	interchanges abutting the area described in this paragraph.
153.22 	(d) "Soil deficiency district" means a type of tax increment financing district 
153.23 	consisting of a portion of the project area in which the city finds by resolution that the 
153.24 	following conditions exist:
153.25 	(1) unusual terrain or soil deficiencies for 80 percent of the acreage in the district 
153.26 	require substantial filling, grading, or other physical preparation for use; and 
153.27 	(2) the estimated cost of the physical preparation under clause (1), but excluding 
153.28 	costs directly related to roads as defined in Minnesota Statutes, section 160.01, and 
153.29 	local improvements as described in Minnesota Statutes, sections 429.021, subdivision 1, 
153.30 	clauses (1) to (7), (11), and (12), and 430.01, exceeds the fair market value of the land 
153.31 	before completion of the preparation.
153.32 		Subd. 2.Special rules. (a) If the city elects, upon the adoption of the tax increment 
153.33 	financing plan for a district, the rules under this section apply to a redevelopment district, 
153.34 	renewal and renovation district, soil condition district, or a soil deficiency district 
153.35 	established by the city or a development authority of the city in the project area.
154.1 	(b) The five-year rule under Minnesota Statutes, section 469.1763, subdivisions 3 
154.2 	and 4, is extended to ten years for any district.
154.3 	(c) The limitations on spending tax increment outside of the district under Minnesota 
154.4 	Statutes, section 469.1763, subdivision 2, do not apply, but increments may only be 
154.5 	expended on improvements or activities within the project area.
154.6 	(d) For a soil deficiency district:
154.7 	(1) increments may be collected through 20 years after the receipt by the authority of 
154.8 	the first increment from the district; and
154.9 	(2) except as otherwise provided in this subdivision, increments may be used only to:
154.10 	(i) acquire parcels on which the improvements described in clause (ii) will occur;
154.11 	(ii) pay for the cost of correcting the unusual terrain or soil deficiencies and the 
154.12 	additional cost of installing public improvements directly caused by the deficiencies; and
154.13 	(iii) pay for the administrative expenses of the authority allocable to the district.
154.14 	(e) Increments spent for any infrastructure costs, whether inside a district or outside 
154.15 	a district but within the project area, are deemed to satisfy the requirements of paragraph 
154.16 	(d) and Minnesota Statutes, section 469.176, subdivisions 4b and 4j.
154.17 	(f) The authority to approve tax increment financing plans to establish tax increment 
154.18 	financing districts under this section expires on December 31, 2017.

154.19 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
154.20 	Statutes, section 645.021, subdivision 3.

154.21 	Sec. 28. COLUMBIA HEIGHTS; TAX INCREMENT FINANCING DISTRICT.
 154.22 		Subdivision 1.Definitions. (a) "Housing revitalization district" means a single tax 
154.23 	increment financing district established by the city of Columbia Heights and the Columbia 
154.24 	Heights Economic Development Authority consisting of all the property included in the 
154.25 	boundaries of tax increment financing district A3/C7.
154.26 	(b) "Home rehabilitation program" means a program to provide grants or loans to 
154.27 	finance costs of rehabilitation of single family and duplex dwellings located anywhere 
154.28 	in the city that are:
154.29 	(1) classified as homestead under Minnesota Statutes, chapter 273; and
154.30 	(2) occupied by persons or families whose income is less than or equal to the income 
154.31 	requirements for qualified mortgage revenue bond projects under section 143(f) of the 
154.32 	Internal Revenue Code.
154.33 	(c) "Home replacement program" means a program to pay eligible replacement 
154.34 	costs associated with removal of substandard housing located anywhere in the city and 
154.35 	the development of replacement housing.
155.1 	(d) "Eligible replacement costs" means acquisition of substandard housing through 
155.2 	voluntary purchase from willing sellers, relocation expenses, demolition, and site 
155.3 	improvements related to construction of replacement housing.
155.4 	(e) "Replacement housing" means residential developments containing fewer than 
155.5 	five units.
155.6 	(f) "Substandard housing" means residential property containing fewer than 
155.7 	five units, whether or not classified as homestead, that is characterized by inadequate 
155.8 	maintenance, dilapidation, physical damage, unsanitary conditions, or abandonment.
155.9 	(g) "Downtown dump remediation" means removal or remediation, as those terms 
155.10 	are defined in Minnesota Statutes, section 469.174, subdivision 18, of the property within 
155.11 	the housing revitalization district described as follows: the South 180 feet of the North 
155.12 	330 feet of Block 4, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, 
155.13 	except the East 165 feet thereof, according to the recorded plat thereof, and situated in 
155.14 	Anoka County, Minnesota; and Block 4, Walton's Rearrangement of Lots 33 and 34, Block 
155.15 	6, Reservoir Hills, excepting therefrom however, the two following described tracts: Tract 
155.16 	1, the North 330 feet thereof; Tract 2, commencing at the southwest corner of Block 4, 
155.17 	Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills; thence northerly 
155.18 	along the west line of said Block 4, 100 feet; thence easterly parallel with the south line of 
155.19 	said Block 4, 183 feet; thence southerly parallel with the west line of said Block 4, 100 
155.20 	feet to a point within said south boundary line; thence westerly along the south line of 
155.21 	said Block 4, 183 feet to the point of beginning, according to the plat thereof on file or 
155.22 	of record in the office of the County Recorder, Anoka County, Minnesota; and that part 
155.23 	of Block numbered 4, of Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir 
155.24 	Hills, described as follows: commencing at the southwest corner of Block 4, Walton's 
155.25 	Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills; thence northerly along the 
155.26 	west line of said Block 4, 100 feet; thence easterly parallel with the south line of said 
155.27 	Block 4, 183 feet; thence southerly parallel with the west line of said Block 4, 100 feet to a 
155.28 	point within said south boundary line; thence westerly along the south line of said Block 
155.29 	4, 183 feet to the point of beginning, Anoka County, Minnesota.
155.30 		Subd. 2.Establishment of housing revitalization district. The city and authority 
155.31 	may establish the housing revitalization district notwithstanding the inclusion of that 
155.32 	property in tax increment financing district A3/C7 at the time of approval of the tax 
155.33 	increment financing plan. To establish the housing revitalization district, the city and 
155.34 	authority shall adopt a tax increment financing plan and otherwise comply with the 
155.35 	requirements of Minnesota Statutes, section 469.175, except that the determinations set 
156.1 	forth in Minnesota Statutes, section 469.175, subdivision 3, paragraph (b), clauses (1) 
156.2 	and (2), item (ii), are not required.
156.3 		Subd. 3.Special rules. (a) The housing revitalization district is subject to the 
156.4 	provisions of Minnesota Statutes, sections 469.174 to 469.1799, except as otherwise 
156.5 	provided in this section.
156.6 	(b) The original net tax capacity of the housing revitalization district is the same 
156.7 	as the original net tax capacity of the A3/C7 district as of the date of approval of the tax 
156.8 	increment financing plan for the housing revitalization district, subject thereafter to all 
156.9 	adjustments pursuant to Minnesota Statutes, section 469.177, subdivisions 1 and 7, but not 
156.10 	subject to the adjustments under Minnesota Statutes, section 469.177, subdivision 4.
156.11 	(c) For the purposes of Minnesota Statutes, section 469.177, subdivision 1a, the 
156.12 	original local tax rate is the rate in effect for taxes payable in 2010.
156.13 	(d) The city may elect the method of computation under Minnesota Statutes, section 
156.14 	469.177, subdivision 3, paragraph (a) or (b), and all other provisions of Minnesota 
156.15 	Statutes, section 469.177, subdivision 3, apply, except that the first calculation and 
156.16 	payment of tax increment from the housing revitalization district shall be based on the 
156.17 	net capacity assessed in 2009 for taxes payable in 2010.
156.18 	(e) Increments from the housing revitalization district may be expended only to pay 
156.19 	or reimburse the costs of a home rehabilitation program, a home replacement program, 
156.20 	and downtown dump remediation, whether such costs are incurred before or after the 
156.21 	establishment of the district.
156.22 	(f) Minnesota Statutes, section 469.1763, does not apply to the housing revitalization 
156.23 	district.
156.24 	(g) No tax increment from the housing revitalization district shall be paid to the city 
156.25 	or authority after 25 years from the date of receipt by the authority of the first increment in 
156.26 	accordance with paragraph (d).
156.27 	(h) Minnesota Statutes, section 469.176, subdivision 6, does not apply to the housing 
156.28 	revitalization district.
156.29 	(i) If tax increments from the housing revitalization district are expended to pay 
156.30 	downtown dump remediation costs, then notwithstanding the city of Columbia Heights 
156.31 	ordinance 1490, city code chapter 9, land use article 1, zoning and land development 
156.32 	section 9.110, the only permitted uses on parcels where tax increments are spent are those 
156.33 	set forth in the following provisions of that section: subsection (F)(2)(a), (e), (i), (n), (q), 
156.34 	(s), (t), but only if the occupant has no liquor license other than a class B license, (u), (y), 
156.35 	(z), (aa), unless it is a consignment sale facility as described in section 9.107, subsection 
156.36 	(c)(12), (bb), or (ee), and permitted accessory uses set forth in subsection (F)(4).
157.1 		Subd. 4.Expiration. The authority to approve a tax increment financing plan to 
157.2 	establish the housing revitalization district under this section expires on December 31, 
157.3 	2008.
157.4 		Subd. 5.Applicability of other laws. (a) References in Minnesota Statutes to 
157.5 	tax increment financing districts created and tax increment generated under Minnesota 
157.6 	Statutes, sections 469.174 to 469.1799, include the housing revitalization district subject 
157.7 	to this section.
157.8 	(b) For the purposes of Minnesota Statutes, section 469.1782, this section does not 
157.9 	extend the duration of an existing district or allow establishment of a new district with a 
157.10 	longer duration limit than that permitted by general law.

157.11 	EFFECTIVE DATE. This section is effective upon compliance by the city of 
157.12 	Columbia Heights with Minnesota Statutes, section 645.021.

157.13 	Sec. 29. TAX INCREMENT FINANCING; CITY OF DAYTON.
 157.14 		Subdivision 1.Authority. The city of Dayton may establish an economic 
157.15 	development tax increment financing district under the authority provided in this 
157.16 	section. The city may include area with the jurisdiction of the town of Hassan to the 
157.17 	extent authorized by a joint powers agreement with the town. This district must be 
157.18 	established within the area defined in subdivision 2 and is subject to the special rules 
157.19 	under subdivision 3.
157.20 		Subd. 2.Defined area. The district must be established within the area defined as 
157.21 	the southwestern corner of the city of Dayton bounded by Brockton Lane (also known 
157.22 	as Hennepin County Road 101) to the west, 109th Avenue North to the south, Hennepin 
157.23 	County Highway 81 diagonally to the north and east from 109th Avenue northwesterly 
157.24 	to a line 120 feet east of the extension of York Avenue northerly to a line 120 feet north 
157.25 	of Gay Wood Drive and then west to Brockton Lane (Hennepin County Road 101).  The 
157.26 	area within the jurisdiction of the town of Hassan that may be included in the district is 
157.27 	limited to and defined as all the land within the town of Hassan north of 109th Avenue 
157.28 	North, east of Fletcher Lane (also know as Hennepin County Road 116), south of I-94 
157.29 	and west of Brockton Lane (Hennepin County Road 101).
157.30 		Subd. 3.Special rules. The district is subject to the rules under Minnesota Statutes, 
157.31 	sections 469.174 to 469.1799, with the following exceptions:
157.32 	(1) the city need not make the findings required by Minnesota Statutes, section 
157.33 	469.174, subdivision 12;
157.34 	(2) the restrictions on the expenditures of increments under Minnesota Statutes, 
157.35 	section 469.176, subdivision 4c, do not apply;
158.1 	(3) the provisions of Minnesota Statutes, section 469.176, subdivision 5, do not 
158.2 	apply to the district;
158.3 	(4) the provisions of section 469.176, subdivision 7, do not apply to the district;
158.4 	(5) the district's tax increments must be used only to pay for the costs related to 
158.5 	the Brockton interchange project, including land acquisition, public infrastructure, and 
158.6 	administrative costs, whether paid directly or to reimburse for payment of those costs or to 
158.7 	repay bonds or other obligations issued and sold to pay those costs initially; and
158.8 	(6) for purposes of any joint powers agreement authorized by this section, the town 
158.9 	of Hassan is deemed to have all the powers of an authority, as defined in Minnesota 
158.10 	Statutes, section 469.174, subdivision 2.

158.11 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
158.12 	body of the city of Dayton and by the board of supervisors of the town of Hassan with 
158.13 	Minnesota Statutes, section 645.021.

158.14 	Sec. 30. CITY OF EAGAN; TAX INCREMENT FINANCING DISTRICT.
 158.15 		Subdivision 1.Authorization; location. The city of Eagan may establish within 
158.16 	the corporate boundaries of the city one or more economic development tax increment 
158.17 	financing districts subject to the special rules under subdivision 2. The districts must be 
158.18 	located within the "area" defined for purposes of this section as Section 13, Township 
158.19 	27, Range 23, Dakota County, Minnesota.
158.20 		Subd. 2.Special rules. (a) If the city elects upon adoption of the tax increment 
158.21 	financing plan for the district, the rules under this subdivision apply to the district.
158.22 	(b) The limitations in Minnesota Statutes, section 469.176, subdivision 4c, on 
158.23 	spending increment for developments more than 15 percent of the square footage of which 
158.24 	is used for purposes other than those listed in that subdivision, do not apply.
158.25 	(c) Increments may be expended on surface parking, sanitary sewer, storm sewer, 
158.26 	water, and street improvements inside and outside the area whether or not included in a tax 
158.27 	increment financing district, and without regard to any limitations in Minnesota Statutes, 
158.28 	section 469.1763, subdivision 2, if the improvements are related to development within 
158.29 	the area and on administrative expenses.
158.30 		Subd. 3.Expiration of authority. The authority to approve tax increment financing 
158.31 	plans to establish tax increment financing districts under this section expires on December 
158.32 	31, 2008.

158.33 	EFFECTIVE DATE. This section is effective upon compliance by the city of 
158.34 	Eagan with Minnesota Statutes, section 645.021.

159.1 	Sec. 31. CITIES OF ELGIN, EYOTA, BYRON, AND ORONOCO; TAX 
159.2 	INCREMENT FINANCING DISTRICTS.
 159.3 		Subdivision 1.Authorization. Notwithstanding the mileage limitation in Minnesota 
159.4 	Statutes, section 469.174, subdivision 27, the cities of Elgin, Eyota, Byron, and Oronoco 
159.5 	are deemed to be small cities for purposes of Minnesota Statutes, section 469.174 to 
159.6 	469.1799, as long as they do not exceed the population limit in that section.
159.7 		Subd. 2.Local approval. This section is effective for each of the cities of Elgin, 
159.8 	Eyota, Byron, and Oronoco upon approval of that city's governing body and compliance 
159.9 	with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

159.10 	Sec. 32. CITY OF FARIBAULT; TAX INCREMENT FINANCING 
159.11 	EXPENDITURES.
 159.12 	Notwithstanding the provisions of Minnesota Statutes, section 469.1764, or any 
159.13 	other law, the city of Faribault is authorized to expend revenues derived from the city of 
159.14 	Faribault's Original 1981 Tax Increment District (1 West, 2 North, 3 Central, and 4 East) 
159.15 	for the costs of sidewalk, streetscape (surface treatment and lighting), water, sanitary 
159.16 	sewer, and storm sewer utility improvements, and parking improvement related expenses 
159.17 	in the city of Faribault's downtown improvement district, an area defined and bounded as 
159.18 	follows: beginning at the corner of the intersection of the Western Railroad Properties 
159.19 	Inc. (formerly Chicago, Rock Island, and Pacific Railroad Company) railroad right of way 
159.20 	and West Division Street; from such intersection travel on West Division Street to the 
159.21 	intersection of West Division Street and 1st Avenue NW; travel on 1st Avenue NW to 2nd 
159.22 	Street NW; travel on Second Street NW to 2nd Avenue NW; travel on 2nd Avenue NW 
159.23 	to 5th Street NW; travel on 5th Street NW to 1st Avenue NW; travel on 1st Avenue NW 
159.24 	to 6th Street NW; travel on 6th Street NW to its intersection with the Western Railroad 
159.25 	Properties Inc. (formerly Chicago, Rock Island, and Pacific Railroad Company) railroad 
159.26 	right of way; travel on the Western Railroad Properties Inc. (formerly Chicago, Rock 
159.27 	Island, and Pacific Railroad Company) railroad right of way to its intersection with West 
159.28 	Division Street, all in the city of Faribault.

159.29 	EFFECTIVE DATE. This section is effective upon approval by the governing 
159.30 	body of the city of Faribault and compliance with Minnesota Statutes, section 645.021, 
159.31 	subdivision 3.

159.32 	Sec. 33. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT; 
159.33 	SPECIAL RULES.
 160.1 	(a) If the city elects upon the adoption of a tax increment financing plan for a district, 
160.2 	the rules under this section apply to a redevelopment tax increment financing district 
160.3 	established by the city of Fridley or the housing and redevelopment authority of the city. 
160.4 	The redevelopment tax increment district includes the following parcels and adjacent 
160.5 	railroad property and shall be referred to as the Northstar Transit Station District: parcel 
160.6 	numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018, 
160.7 	223024120012, 223024120011, 223024120005, 223024120004, 223024120003, 
160.8 	223024120013, 223024120008, 223024120007, 223024120006, 223024130005, 
160.9 	223024130010, 223024130011, 223024130003, 153024440039, 153024440037, 
160.10 	153024440041, 153024440042, 223024110013, 223024110016, 223024110017, 
160.11 	223024140008, 223024130002, 223024420004, 223024410002, 223024410003, 
160.12 	223024110008, 223024110007, 223024110019, 223024110018, 223024110003, 
160.13 	223024140003, 223024140009, 223024140002, 223024140010, and 223024410007.
160.14 	(b) The requirements for qualifying a redevelopment tax increment district under 
160.15 	Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located 
160.16 	within the Northstar Transit Station District, which are deemed eligible for inclusion 
160.17 	in a redevelopment tax increment district.
160.18 	(c) In addition to the costs permitted by Minnesota Statutes, section 469.176, 
160.19 	subdivision 4j, eligible expenditures within the Northstar Transit Station District include 
160.20 	those costs necessary to provide for the construction and land acquisition for a tunnel 
160.21 	under the Burlington Northern Santa Fe railroad tracks.
160.22 	(d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763, 
160.23 	subdivision 2, the city of Fridley may expend increments generated from its tax increment 
160.24 	financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota 
160.25 	Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing 
160.26 	districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District.
160.27 	(e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, 
160.28 	does not apply to the Northstar Transit Station District or to tax increment financing 
160.29 	districts Nos. 11, 12, and 13.
160.30 	(f) The use of revenues for decertification under Minnesota Statutes, section 
160.31 	469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11, 
160.32 	12, and 13.

160.33 	EFFECTIVE DATE. This section is effective upon approval by the governing body 
160.34 	of the city of Fridley and upon compliance by the city with Minnesota Statutes, section 
160.35 	645.021, subdivision 3.

161.1 	Sec. 34. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING; 
161.2 	EXPENDITURES OUTSIDE DISTRICT.
 161.3 	Notwithstanding the provisions of Minnesota Statutes, section 469.1763, subdivision 
161.4 	2, the city of New Brighton may expend increments generated from its tax increment 
161.5 	financing district No. 26 to facilitate eligible activities as permitted by Minnesota Statutes, 
161.6 	section 469.176, subdivision 4e, outside the boundaries of tax increment financing district 
161.7 	No. 26, but only within the area described in Laws 1998, chapter 389, article 11, section 
161.8 	24, subdivision 1, and commonly referred to as the Northwest Quadrant. Minnesota 
161.9 	Statutes, section 469.1763, subdivisions 3 and 4, do not apply to expenditures permitted 
161.10 	by this section.

161.11 	EFFECTIVE DATE. This section is effective upon approval by the governing 
161.12 	body of the city of New Brighton and compliance by the city with Minnesota Statutes, 
161.13 	section 645.021, subdivision 3.

161.14 	Sec. 35. NORTH ST. PAUL; TRANSFER OF TAX INCREMENTS.
 161.15 	(a) Notwithstanding any limitations under Minnesota Statutes, section 469.1763, 
161.16 	subdivision 2, the city of North St. Paul may expend available increments from Tax 
161.17 	Increment Financing Districts Nos. 3-1, 1, 4-2, 4-3, and 4-4 for eligible activities 
161.18 	among the districts and for any district outside of those districts but within the defined 
161.19 	redevelopment project area.
161.20 	(b) For the purposes of Minnesota Statutes, section 469.1763, subdivision 3, 
161.21 	expenditures within Tax Increment Financing Districts Nos. 3-1, 1, 4-2, 4-3, and 4-4 are 
161.22 	considered to have been expended on an activity within the districts if a qualifying action 
161.23 	occurs within 12 years after certification of the respective district.

161.24 	EFFECTIVE DATE. This section is effective upon local approval by the governing 
161.25 	body of the city of North St. Paul and compliance with Minnesota Statutes, section 
161.26 	645.021, subdivision 3.

161.27 	Sec. 36. USE OF APPROPRIATION.
 161.28 	To the extent that money appropriated to the commissioner of administration in Laws 
161.29 	2006, chapter 258, section 18, for redevelopment, reuse, or demolition of Department of 
161.30 	Human Services campuses, is unencumbered, the commissioner of administration must 
161.31 	distribute $1,000,000 of that money on June 1, 2007, to the city of Fergus Falls for use 
161.32 	by the city to provide security, heat, and utility service to the site of the Fergus Falls 
161.33 	Regional Treatment Center.

162.1 	Sec. 37.  REPEALER.
 162.2 	Laws 1998, chapter 389, article 11, section 18, is repealed.

162.3 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
162.4 	Statutes, section 645.021, subdivision 3, by the governing body of the city of Burnsville. 
162.5 	The balance of tax increments derived from tax increment financing district No. 2-1 as 
162.6 	of the effective date of this section must be returned to the county for distribution in 
162.7 	accordance with Minnesota Statutes, section 469.176, subdivision 2.

162.8 	ARTICLE 9
162.9 	PUBLIC FINANCE

162.10 	Section 1. Minnesota Statutes 2006, section 118A.03, subdivision 3, is amended to read:
162.11 		Subd. 3.Amount. The total amount of the collateral computed at its market value 
162.12 	shall be at least ten percent more than the amount on deposit plus accrued interest at 
162.13 	the close of the financial institution's banking day, except that where the collateral is 
162.14 	irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of 
162.15 	collateral shall be at least equal to the amount on deposit plus accrued interest at the close 
162.16 	of the financial institution's banking day. The financial institution may furnish both a 
162.17 	surety bond and collateral aggregating the required amount.

162.18 	Sec. 2. Minnesota Statutes 2006, section 123B.61, is amended to read:
162.19 	123B.61 PURCHASE OF CERTAIN EQUIPMENT.
162.20 	The board of a district may issue general obligation certificates of indebtedness 
162.21 	or capital notes subject to the district debt limits to: (a) purchase vehicles, computers, 
162.22 	telephone systems, cable equipment, photocopy and office equipment, technological 
162.23 	equipment for instruction, and other capital equipment having an expected useful life at 
162.24 	least as long as the terms of the certificates or notes; (b) purchase computer hardware and 
162.25 	software, without regard to its expected useful life, whether bundled with machinery or 
162.26 	equipment or unbundled, together with application development services and training 
162.27 	related to the use of the computer; and (c) prepay special assessments. The certificates or 
162.28 	notes must be payable in not more than five ten years and must be issued on the terms 
162.29 	and in the manner determined by the board, except that certificates or notes issued to 
162.30 	prepay special assessments must be payable in not more than 20 years. The certificates 
162.31 	or notes may be issued by resolution and without the requirement for an election. The 
162.32 	certificates or notes are general obligation bonds for purposes of section 126C.55. A tax 
162.33 	levy must be made for the payment of the principal and interest on the certificates or 
163.1 	notes, in accordance with section 475.61, as in the case of bonds. The sum of the tax 
163.2 	levies under this section and section 123B.62 for each year must not exceed the lesser 
163.3 	of the amount of the district's total operating capital revenue or the sum of the district's 
163.4 	levy in the general and community service funds excluding the adjustments under this 
163.5 	section for the year preceding the year the initial debt service levies are certified. The 
163.6 	district's general fund levy for each year must be reduced by the sum of (1) the amount 
163.7 	of the tax levies for debt service certified for each year for payment of the principal and 
163.8 	interest on the certificates or notes issued under this section as required by section 475.61, 
163.9 	(2) the amount of the tax levies for debt service certified for each year for payment of the 
163.10 	principal and interest on bonds issued under section 123B.62, and (3) any excess amount 
163.11 	in the debt redemption fund used to retire bonds, certificates, or notes issued under this 
163.12 	section or section 123B.62 after April 1, 1997, other than amounts used to pay capitalized 
163.13 	interest. If the district's general fund levy is less than the amount of the reduction, the 
163.14 	balance shall be deducted first from the district's community service fund levy, and next 
163.15 	from the district's general fund or community service fund levies for the following year. A 
163.16 	district using an excess amount in the debt redemption fund to retire the certificates or 
163.17 	notes shall report the amount used for this purpose to the commissioner by July 15 of the 
163.18 	following fiscal year. A district having an outstanding capital loan under section 126C.69
163.19 	or an outstanding debt service loan under section 126C.68 must not use an excess amount 
163.20 	in the debt redemption fund to retire the certificates or notes. 

163.21 	Sec. 3. Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read:
163.22 		Subd. 2.Time of notice. Unless otherwise specified by a particular statute law, or 
163.23 	by order of a court, publication of a public notice shall be as follows:
163.24 	(a) the notice shall be published once;
163.25 	(b) if the notice is intended to inform the public about a future event, the last 
163.26 	publication shall occur not more than 14 30 days and not less than seven days before 
163.27 	the event;
163.28 	(c) if the notice is intended to inform the public about a past action or event, the last 
163.29 	publication shall occur not more than 45 days after occurrence of the action or event.

163.30 	Sec. 4. Minnesota Statutes 2006, section 365A.02, is amended to read:
163.31 	365A.02 DEFINITION DEFINITIONS.
163.32 		Subdivision 1.Subordinate service district. "Subordinate service district" means a 
163.33 	defined area within the town in which one or more governmental services or additions to 
163.34 	townwidespecial services are provided by the town specially for the area and financed 
164.1 	from revenues from the area. The boundaries of a single subordinate service district 
164.2 	may not embrace an entire town.
164.3 		Subd. 2.Special services. "Special services" means one or more governmental 
164.4 	services or additions to townwide services provided by the town specially for the area 
164.5 	and financed from revenues from the area.

164.6 	Sec. 5. Minnesota Statutes 2006, section 365A.04, is amended to read:
164.7 	365A.04 CREATION BY PETITION.
164.8 		Subdivision 1.Petition. A petition signed by at least 50 percent of the property 
164.9 	owners in the part of the town proposed for the subordinate service district may be 
164.10 	submitted to the town board requesting the establishment of a subordinate service district 
164.11 	to provide a service that the town is otherwise authorized by law to provide. The petition 
164.12 	must include the territorial boundaries of the proposed district and specify the kinds of 
164.13 	services to be provided within the district.
164.14 		Subd. 1a.Creation by town board. The town board may establish a subordinate 
164.15 	service district in a portion of the town by adoption of a resolution, subject to the 
164.16 	requirements of subdivision 2.
164.17 		Subd. 2.Public hearing. Upon receipt of the petition, and the verification of the 
164.18 	signatures by the town clerk or prior to adoption of the resolution specified in subdivision 
164.19 	1a, the town board shall, within 30 days following verification or prior to adoption of the 
164.20 	resolution specified in subdivision 1a, hold a public hearing on the question of whether or 
164.21 	not the requested district shall be established. The notice of public hearing must specify 
164.22 	the special services to be provided within the subordinate service district and must specify 
164.23 	the territorial boundaries of the requested district. The notice of public hearing must be 
164.24 	published once in a newspaper of general circulation in the town at least 14 days prior 
164.25 	to the date of the public hearing.
164.26 		Subd. 3.Approval; disapproval. Within 30 days after the public hearing, the 
164.27 	town board by resolution shall approve or disapprove the establishment of the requested 
164.28 	district. An approving resolution must specify the special services to be provided within 
164.29 	the subordinate service district and must specify the territorial boundaries of the district. 
164.30 	A resolution approving the establishment of the district may contain amendments or 
164.31 	modifications of the district's boundaries or functions as set forth in the petition or the 
164.32 	resolution specified in subdivision 1a.

164.33 	Sec. 6. Minnesota Statutes 2006, section 365A.08, is amended to read:
164.34 	365A.08 FINANCING.
165.1 		Subdivision 1.Budget. (a) Upon adoption of the next annual budget following 
165.2 	the creation of a subordinate service district the town board shall include in the budget 
165.3 	appropriate provisions for the operation of the district including either a property tax 
165.4 	levied only on property of the users of the service within the boundaries of the district 
165.5 	or a levy of a service charge against the users of the service within the district, or a 
165.6 	combination of a property tax and a service charge on the users of the service.
165.7 	(b) A tax or service charge or a combination of them may be imposed to finance a 
165.8 	function or service in the district that the town ordinarily provides throughout the town 
165.9 	only to the extent that there is an increase in the level of the function or service provided 
165.10 	in the service district over that provided throughout the town. In that case, in addition 
165.11 	to the townwide tax levy, an amount necessary to pay for the increase in the level of the 
165.12 	function or service may be imposed in the district.
165.13 		Subd. 2.Bonds. At any time after the requirements of section 356A.06 have been 
165.14 	met and the subordinate service district created, the town board may issue obligations 
165.15 	in an amount it deems necessary to defray in whole or in part the expense incurred 
165.16 	and estimated to be incurred in making capital improvements necessary to operate the 
165.17 	subordinate service district and provide the special services in the district, including every 
165.18 	item of cost from inception to completion and all fees and expenses incurred in connection 
165.19 	with the capital improvements or the financing. The obligations are payable primarily 
165.20 	out of the proceeds of the taxes and service charges imposed under subdivision 1, net 
165.21 	revenues as described in section 444.075, and special assessments under chapter 429. The 
165.22 	town board may by resolution pledge the full faith credit and taxing power of the town 
165.23 	to ensure payment of the principal and interest on the obligations if the proceeds of the 
165.24 	taxes and service charges are insufficient to pay the principal and interest. Obligations 
165.25 	must be issued in accordance with chapter 475, except that an election is not required, and 
165.26 	the amount of the obligations is not included in determining the net indebtedness of the 
165.27 	town under the provisions of any law limiting indebtedness.
165.28 		Subd. 3.Covenants to secure obligations. In resolutions authorizing the issuance 
165.29 	of general or special obligations and pledging taxes and service charges imposed under 
165.30 	subdivision 1, net revenues, or special assessments to their payment, the town board 
165.31 	may make covenants for the protection of holders of the obligations and taxpayers of the 
165.32 	town as it deems necessary, including a covenant that the town will impose and collect 
165.33 	charges of the nature authorized by this chapter at the time and in the amounts required to 
165.34 	produce, together with any taxes or special assessments designated as a primary source 
165.35 	of payment of the obligations, funds adequate to pay all principal and interest when due 
166.1 	on the obligations, and to create and maintain reserves securing the payments as may be 
166.2 	provided in the resolutions.

166.3 	Sec. 7. Minnesota Statutes 2006, section 365A.095, is amended to read:
166.4 	365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.
166.5 		Subdivision 1.Petition. A petition signed by at least 75 percent of the property 
166.6 	owners in the territory of the subordinate service district requesting the removal of the 
166.7 	district may be presented to the town board. Within 30 days after the town board receives 
166.8 	the petition, the town clerk shall determine the validity of the signatures on the petition. If 
166.9 	the requisite number of signatures are certified as valid, the town board must hold a public 
166.10 	hearing on the petitioned matter. Within 30 days after the end of the hearing, the town 
166.11 	board must decide whether to discontinue the subordinate service district, continue as it is, 
166.12 	or take some other action with respect to it.
166.13 		Subd. 2.Bonds. If obligations have been issued for the benefit of the subordinate 
166.14 	service district, the rates, charges, and tax levies, if any, shall continue until the obligations 
166.15 	and any obligations issued to refund them have been paid in full.

166.16 	Sec. 8. Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read:
166.17 		Subd. 3.Capital notes. (a) A county board may, by resolution and without 
166.18 	referendum, issue capital notes subject to the county debt limit to purchase capital 
166.19 	equipment useful for county purposes that has an expected useful life at least equal to the 
166.20 	term of the notes. The notes shall be payable in not more than ten years and shall be 
166.21 	issued on terms and in a manner the board determines. A tax levy shall be made for 
166.22 	payment of the principal and interest on the notes, in accordance with section 475.61, 
166.23 	as in the case of bonds.
166.24 	(b) For purposes of this subdivision, "capital equipment" means:
166.25 	(1) public safety, ambulance, road construction or maintenance, and medical 
166.26 	equipment; and
166.27 	(2) computer hardware and software, whether bundled with machinery or equipment 
166.28 	or unbundled. The authority to issue capital notes for software expires on July 1, 2007.

166.29 	Sec. 9. Minnesota Statutes 2006, section 375B.09, is amended to read:
166.30 	375B.09 FINANCING.
166.31 		Subdivision 1.Budget. (a) Upon adoption of the next annual budget following the 
166.32 	creation of a subordinate service district the county board shall include in the budget 
166.33 	appropriate provisions for the operation of the district including, as appropriate, either a 
167.1 	property tax levied only on property within the boundaries of the district or a levy of a 
167.2 	service charge against the users of the service within the district, or any combination of a 
167.3 	property tax and a service charge.
167.4 	(b) A tax or service charge or a combination thereof shall not be imposed to finance a 
167.5 	function or service in the subordinate service district which the county generally provides 
167.6 	throughout the county unless an increase in the level of the service is to be supplied in the 
167.7 	subordinate service district in which case, in addition to the countywide tax levy, only an 
167.8 	amount necessary to pay for the increased level of service may be imposed.
167.9 		Subd. 2.Bonds. At any time after the requirements of section 375B.07 have been 
167.10 	met and the subordinate service district created, the county board may issue obligations 
167.11 	in an amount it deems necessary to defray in whole or in part the expense incurred 
167.12 	and estimated to be incurred in making capital improvements necessary to operate the 
167.13 	subordinate service district and provide the special services in the district, including every 
167.14 	item of cost from inception to completion and all fees and expenses incurred in connection 
167.15 	with the capital improvements or the financing. The obligations shall be payable primarily 
167.16 	out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net 
167.17 	revenues as described in section 444.075, and special assessments under chapter 429. The 
167.18 	county board may by resolution pledge the full faith credit and taxing power of the county 
167.19 	to ensure payment of the principal and interest on the obligations if the proceeds of the 
167.20 	taxes and service charges are insufficient to pay the principal and interest. Obligations 
167.21 	must be issued in accordance with chapter 475, except that an election is not required, and 
167.22 	the amount of the obligations is not included in determining the net indebtedness of the 
167.23 	county under the provisions of any law limiting indebtedness.
167.24 		Subd. 3.Covenants to secure obligations. In resolutions authorizing the issuance 
167.25 	of general or special obligations and pledging taxes and service charges imposed under 
167.26 	subdivision 1, net revenues, or special assessments to their payment, the county board 
167.27 	may make covenants for the protection of holders of the obligations and taxpayers of the 
167.28 	county as it deems necessary, including a covenant that the county will impose and collect 
167.29 	charges of the nature authorized by this chapter at the time and in the amounts required to 
167.30 	produce, together with any taxes or special assessments designated as a primary source 
167.31 	of payment of the obligations, funds adequate to pay all principal and interest when due 
167.32 	on the obligations and to create and maintain reserves securing the payments as may be 
167.33 	provided in the resolutions.
167.34 		Subd. 4.Continuance in the event of withdrawal. If obligations have been issued 
167.35 	for the benefit of the subordinate service district, and the district is withdrawn or removed 
167.36 	pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in 
168.1 	the withdrawn or removed district must continue until the obligations and any obligations 
168.2 	issued to refund them have been paid in full.

168.3 	Sec. 10. Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read:
168.4 		Subd. 2.Equipment acquisition; capital notes. The board may, by resolution and 
168.5 	without public referendum, issue capital notes within existing debt limits for the purpose 
168.6 	of purchasing ambulance and other medical equipment, road construction or maintenance 
168.7 	equipment, public safety equipment and other capital equipment having an expected 
168.8 	useful life at least equal to the term of the notes issued. The notes shall be payable in 
168.9 	not more than five ten years and shall be issued on terms and in a manner as the board 
168.10 	determines. The total principal amount of the notes issued for any fiscal year shall not 
168.11 	exceed one percent of the total annual budget for that year and shall be issued solely for 
168.12 	the purchases authorized in this subdivision. A tax levy shall be made for the payment 
168.13 	of the principal and interest on such notes as in the case of bonds. For purposes of this 
168.14 	subdivision, "equipment" includes computer hardware and software, whether bundled with 
168.15 	machinery or equipment or unbundled. For purposes of this subdivision, the term "medical 
168.16 	equipment" includes computer hardware and software and other intellectual property for 
168.17 	use in medical diagnosis, medical procedures, research, record keeping, billing, and other 
168.18 	hospital applications, together with application development services and training related 
168.19 	to the use of the computer hardware and software and other intellectual property, all 
168.20 	without regard to their useful life. For purposes of determining the amount of capital notes 
168.21 	which the county may issue in any year, the budget of the county and Hennepin Healthcare 
168.22 	System, Inc. shall be combined and the notes issuable under this subdivision shall be in 
168.23 	addition to obligations issuable under section 373.01, subdivision 3.

168.24 	Sec. 11. Minnesota Statutes 2006, section 410.32, is amended to read:
168.25 	410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
168.26 	(a) Notwithstanding any contrary provision of other law or charter, a home rule 
168.27 	charter city may, by resolution and without public referendum, issue capital notes subject 
168.28 	to the city debt limit to purchase capital equipment.
168.29 	(b) For purposes of this section, "capital equipment" means:
168.30 	(1) public safety equipment, ambulance and other medical equipment, road 
168.31 	construction and maintenance equipment, and other capital equipment; and
168.32 	(2) computer hardware and software, whether bundled with machinery or equipment 
168.33 	or unbundled.
169.1 	(c) The equipment or software must have an expected useful life at least as long as the 
169.2 	term of the notes. The authority to issue capital notes for software expires on July 1, 2007.
169.3 	(d) The notes shall be payable in not more than ten years and be issued on terms and 
169.4 	in the manner the city determines. The total principal amount of the capital notes issued 
169.5 	in a fiscal year shall not exceed 0.03 percent of the market value of taxable property 
169.6 	in the city for that year.
169.7 	(e) A tax levy shall be made for the payment of the principal and interest on the 
169.8 	notes, in accordance with section 475.61, as in the case of bonds.
169.9 	(f) Notes issued under this section shall require an affirmative vote of two-thirds of 
169.10 	the governing body of the city.
169.11 	(g) Notwithstanding a contrary provision of other law or charter, a home rule charter 
169.12 	city may also issue capital notes subject to its debt limit in the manner and subject to the 
169.13 	limitations applicable to statutory cities pursuant to section 412.301.

169.14 	Sec. 12. Minnesota Statutes 2006, section 412.301, is amended to read:
169.15 	412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
169.16 	(a) The council may issue certificates of indebtedness or capital notes subject to the 
169.17 	city debt limits to purchase capital equipment.
169.18 	(b) For purposes of this section, "capital equipment" means:
169.19 	(1) public safety equipment, ambulance and other medical equipment, road 
169.20 	construction and maintenance equipment, and other capital equipment; and
169.21 	(2) computer hardware and software, whether bundled with machinery or equipment 
169.22 	or unbundled.
169.23 	(c) The equipment or software must have an expected useful life at least as long as 
169.24 	the terms of the certificates or notes. The authority to issue capital notes for software 
169.25 	expires on July 1, 2007.
169.26 	(d) Such certificates or notes shall be payable in not more than ten years and shall be 
169.27 	issued on such terms and in such manner as the council may determine.
169.28 	(e) If the amount of the certificates or notes to be issued to finance any such purchase 
169.29 	exceeds 0.25 percent of the market value of taxable property in the city, they shall not 
169.30 	be issued for at least ten days after publication in the official newspaper of a council 
169.31 	resolution determining to issue them; and if before the end of that time, a petition asking 
169.32 	for an election on the proposition signed by voters equal to ten percent of the number of 
169.33 	voters at the last regular municipal election is filed with the clerk, such certificates or notes 
169.34 	shall not be issued until the proposition of their issuance has been approved by a majority 
169.35 	of the votes cast on the question at a regular or special election.
170.1 	(f) A tax levy shall be made for the payment of the principal and interest on such 
170.2 	certificates or notes, in accordance with section 475.61, as in the case of bonds.

170.3 	Sec. 13. Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read:
170.4 		Subd. 3.City. "City" means a city organized and existing under the laws of 
170.5 	Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or 
170.6 	charter to engage in the local distribution and sale of gas, provided that any city so 
170.7 	engaged on January 1, 1979 is authorized to continue such distribution and sale, and every 
170.8 	city now or hereafter so authorized may exercise, either individually or as a member of a 
170.9 	municipal gas agency, all of the powers granted in sections 453A.01 to 453A.12. 
170.10 	"City" also includes a city organized and existing under the laws of another state 
170.11 	or a city charter adopted pursuant thereto which participates in a municipal gas agency 
170.12 	with Minnesota cities.

170.13 	Sec. 14. [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
170.14 		Subdivision 1.Authorization; establishment. A political subdivision or other 
170.15 	public entity that creates or has created an actuarial liability to pay postemployment 
170.16 	benefits to employees or officers after their termination of service may establish a trust to 
170.17 	pay those benefits. For purposes of this section, the term "postemployment benefits" means 
170.18 	benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting 
170.19 	Standards Board and the term "trust" means a trust, a trust account, or a custodial account 
170.20 	or contract authorized under section 401(f) of the Internal Revenue Code.
170.21 		Subd. 2.Purpose of trust. The trust established under this section may only be 
170.22 	used to pay postemployment benefits and may be either revocable or irrevocable.
170.23 		Subd. 3.Trust administrator. The trust administrator of a trust established under 
170.24 	this section shall be either:
170.25 	(1) the Public Employees Retirement Association; 
170.26 	(2) a bank or banking association incorporated under the laws of the United States or 
170.27 	of any state and authorized by the laws under which it is organized to exercise corporate 
170.28 	trust powers; or 
170.29 	(3) an insurance company or agency qualified to do business in Minnesota which has 
170.30 	at least five years' experience in investment products and services for group retirement 
170.31 	benefits and which has a specialized department dedicated to services for retirement 
170.32 	investment products. 
171.1 	A political subdivision or public entity may, in its discretion and in compliance 
171.2 	with any applicable trust document, change trust administrators and transfer trust assets 
171.3 	accordingly.
171.4 		Subd. 4.Account maintenance. A political subdivision or other public entity may 
171.5 	establish a trust account to be held under the supervision of the trust administrator for the 
171.6 	purposes of this section. A trust administrator shall establish a separate account for each 
171.7 	participating political subdivision or public entity. The trust administrator may charge 
171.8 	participating political subdivisions and public entities fees for reasonable administrative 
171.9 	costs. A trust administrator may establish other reasonable terms and conditions for 
171.10 	creation and maintenance of these accounts. The trust administrator must report to the 
171.11 	political subdivision or other public entity on the investment returns of invested trust 
171.12 	assets and on all investment fees or costs incurred by the trust. The annual rates of return, 
171.13 	along with investment and administrative fees and costs for the trust, must be disclosed in 
171.14 	the political subdivision's or public entity's annual financial audit in a manner prescribed 
171.15 	by the state auditor.
171.16 		Subd. 5.Investment. (a) The assets of a trust or trust account shall be invested and 
171.17 	held as stipulated in paragraphs (b) to (e).
171.18 	(b) The Public Employees Retirement Association must certify all money in the trust 
171.19 	accounts for which it is trust administrator to the State Board of Investment for investment 
171.20 	created under section 11A.14, subject to the policies and procedures established by the 
171.21 	State Board of Investment. Investment earnings must be credited to the trust account of 
171.22 	the individual political subdivision or public entity.
171.23 	(c) A trust administrator, other than the Public Employees Retirement Association, 
171.24 	must ensure that all money in the trust accounts for which it is trust administrator is 
171.25 	invested by a registered investment adviser, a bank investment trust department or an 
171.26 	insurance company or  agency retirement investment department. Investment earnings 
171.27 	must be credited to the trust account of the individual political subdivision or public entity.
171.28 	(d) For trust assets invested by the State Board of Investment, the investment 
171.29 	restrictions shall be the same as those generally applicable to the State Board of 
171.30 	Investment. For trust assets invested by a trust administrator other than the Public 
171.31 	Employees Retirement Association, the assets may only be invested in investments 
171.32 	authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified 
171.33 	in the applicable trust document.
171.34 	(e) A political subdivision or public entity may provide investment direction to a 
171.35 	trust administrator in compliance with any applicable trust document.
172.1 		Subd. 6.Limit on deposit. A political subdivision or public entity may not 
172.2 	deposit money in a trust or trust account created pursuant to this section if the total 
172.3 	amount invested by that political subdivision or public entity would exceed the political 
172.4 	subdivision's or public entity's actuarially determined liabilities for postemployment 
172.5 	benefits due to officers and employees, as determined under the applicable standards of the 
172.6 	Governmental Accounting Standards Board.
172.7 		Subd. 7.Withdrawal of funds and termination of account. (a) For a revocable 
172.8 	account, a political subdivision or public entity may withdraw some or all of its money 
172.9 	or terminate the trust account. Money and accrued investment earnings withdrawn 
172.10 	from a revocable account must be deposited in a fund separate and distinct from any 
172.11 	other funds of the political subdivision or public entity. This money, with accrued 
172.12 	investment earnings, must be used to pay legally enforceable postemployment benefits 
172.13 	to former officers and employees, unless (i) there has been a change in state or federal 
172.14 	law affecting that political subdivision's or public entity's liabilities for postemployment 
172.15 	benefits, or (ii) there has been a change in the demographic composition of that political 
172.16 	subdivision's or public entity's employees eligible for postemployment benefits, or (iii) 
172.17 	there has been a change in the provisions or terms of the postemployment benefits in that 
172.18 	political subdivision or public entity including, but not limited to, the portion of the costs 
172.19 	eligible employees must pay to receive the benefits, or (iv) other factors exist that have 
172.20 	a material effect on that political subdivision's or public entity's actuarially determined 
172.21 	liabilities for postemployment benefits, in which event any amount in excess of 100 
172.22 	percent of that political subdivision's or public entity's actuarially determined liabilities for 
172.23 	postemployment benefits, as determined under standards of the Government Accounting 
172.24 	Standards Board, may be withdrawn and used for any purpose.
172.25 	(b) For an irrevocable account, a political subdivision or public entity may withdraw 
172.26 	money only:
172.27 	(1) as needed to pay postemployment benefits owed to former officers and employees 
172.28 	of the political subdivision or public entity; or
172.29 	(2) when all postemployment benefit  liability owed to former officers or employees 
172.30 	of the political subdivision or public entity has been satisfied or otherwise defeased.
172.31 	(c) A political subdivision or public entity requesting withdrawal of money from 
172.32 	an account created under this section must do so at a time and in the manner required by 
172.33 	the executive director of the Public Employees Retirement Association or specified in an 
172.34 	applicable trust document. The political subdivision or public entity that created the trust 
172.35 	must ensure that withdrawals comply with the requirements of this section.
173.1 	(d) The legislature may not divert funds in these trusts or trust accounts for use 
173.2 	for another purpose.
173.3 		Subd. 8.Status of irrevocable trust. (a) All money in an irrevocable trust or 
173.4 	trust account created in this section is held in trust for the exclusive benefit of former 
173.5 	officers and employees of the participating political subdivision or public entity, and are 
173.6 	not subject to claims by creditors of the state, the participating political subdivision or 
173.7 	public entity, the current or former officers and employees of the political subdivision 
173.8 	or public entity, or the trust administrator.
173.9 	(b) An irrevocable trust fund or trust account created in this section shall be deemed 
173.10 	an arrangement equivalent to a trust for all legal purposes.

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

173.12 	Sec. 15. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision 
173.13 	to read:
173.14 		Subd. 1m.Obligations. After July 1, 2007, in addition to other authority in this 
173.15 	section, the council may issue certificates of indebtedness, bonds, or other obligations 
173.16 	under this section in an amount not exceeding $44,000,000 for capital expenditures as 
173.17 	prescribed in the council's regional transit master plan and transit capital improvement 
173.18 	program and for related costs, including the costs of issuance and sale of the obligations.

173.19 	Sec. 16. Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read:
173.20 		Subd. 6.Certain purposes. Any municipality may issue bonds for paying 
173.21 	judgments against it; for refunding outstanding bonds; for funding floating indebtedness;
173.22 	for funding actuarial liabilities to pay postemployment benefits to employees or officers 
173.23 	after their termination of service; or for funding all or part of the municipality's current 
173.24 	and future unfunded liability for a pension or retirement fund or plan referred to in 
173.25 	section 356.20, subdivision 2, as those liabilities are most recently computed pursuant 
173.26 	to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or 
173.27 	relief association referred to in section 69.77 or chapter 422A must consent and must 
173.28 	be a party to any contract made under this section with respect to the fund held by it 
173.29 	for the benefit of and in trust for its members. For purposes of this section, the term 
173.30 	"postemployment benefits" means benefits giving rise to a liability under Statement No. 
173.31 	45 of the Governmental Accounting Standards Board.

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

174.1 	Sec. 17. Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read:
174.2 		Subdivision 1.Approval by electors; exceptions. Obligations authorized by law or 
174.3 	charter may be issued by any municipality upon obtaining the approval of a majority of 
174.4 	the electors voting on the question of issuing the obligations, but an election shall not be 
174.5 	required to authorize obligations issued:
174.6 	(1) to pay any unpaid judgment against the municipality;
174.7 	(2) for refunding obligations;
174.8 	(3) for an improvement or improvement program, which obligation is payable wholly 
174.9 	or partly from the proceeds of special assessments levied upon property specially benefited 
174.10 	by the improvement or by an improvement within the improvement program, or from tax 
174.11 	increments, as defined in section 469.174, subdivision 25, including obligations which are 
174.12 	the general obligations of the municipality, if the municipality is entitled to reimbursement 
174.13 	in whole or in part from the proceeds of such special assessments or tax increments and 
174.14 	not less than 20 percent of the cost of the improvement or the improvement program is to 
174.15 	be assessed against benefited property or is to be paid from the proceeds of federal grant 
174.16 	funds or a combination thereof, or is estimated to be received from tax increments;
174.17 	(4) payable wholly from the income of revenue producing conveniences;
174.18 	(5) under the provisions of a home rule charter which permits the issuance of 
174.19 	obligations of the municipality without election;
174.20 	(6) under the provisions of a law which permits the issuance of obligations of a 
174.21 	municipality without an election;
174.22 	(7) to fund pension or retirement fund or postemployment benefit liabilities pursuant 
174.23 	to section 475.52, subdivision 6; 
174.24 	(8) under a capital improvement plan under section 373.40; and 
174.25 	(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if 
174.26 	the proceeds of the bonds are not used for a purpose prohibited under section 469.176, 
174.27 	subdivision 4g, paragraph (b). 

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

174.29 	Sec. 18. Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read:
174.30 		Subd. 3b.Street reconstruction. (a) A municipality may, without regard to 
174.31 	the election requirement under subdivision 1, issue and sell obligations for street 
174.32 	reconstruction, if the following conditions are met:
174.33 	(1) the streets are reconstructed under a street reconstruction plan that describes the 
174.34 	streets to be reconstructed street reconstruction to be financed, the estimated costs, and 
174.35 	any planned reconstruction of other streets in the municipality over the next five years, 
175.1 	and the plan and issuance of the obligations has been approved by a unanimous vote of all
175.2 	of the members of the governing body who are present at the meeting following a public 
175.3 	hearing for which notice has been published in the official newspaper at least ten days but 
175.4 	not more than 28 days prior to the hearing; and
175.5 	(2) if a petition requesting a vote on the issuance is signed by voters equal to 
175.6 	five percent of the votes cast in the last municipal general election and is filed with the 
175.7 	municipal clerk within 30 days of the public hearing, the municipality may issue the bonds 
175.8 	only after obtaining the approval of a majority of the voters voting on the question of 
175.9 	the issuance of the obligations.
175.10 	(b) Obligations issued under this subdivision are subject to the debt limit of the 
175.11 	municipality and are not excluded from net debt under section 475.51, subdivision 4.
175.12 	(c) For purposes of this subdivision, street reconstruction includes utility 
175.13 	replacement and relocation and other activities incidental to the street reconstruction, turn 
175.14 	lanes and other improvements having a substantial public safety function, realignments, 
175.15 	other modifications to intersect with state and county roads, and the local share of state 
175.16 	and county road projects.
175.17 	(d) Except in the case of turn lanes, safety improvements, realignments, intersection 
175.18 	modifications, and the local share of state and county road projects, street reconstruction 
175.19 	does not include the portion of project cost allocable to widening a street or adding curbs 
175.20 	and gutters where none previously existed.

175.21 	Sec. 19. VALIDATION.
 175.22 	Any trust or trust account or other custodial account or contract authorized under 
175.23 	section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay 
175.24 	postemployment benefits to employees or officers after termination of service, is hereby 
175.25 	validated, may continue in full force and effect, and shall have continuing authority 
175.26 	to accept new funds; however, this section does not validate or correct defects in any 
175.27 	previously created trust document. Any funds held by a validated trust or account 
175.28 	under this section may be invested as provided in section 471.6175, subdivision 5. A 
175.29 	validated trust or account shall have until January 1, 2008, to bring its trust documents 
175.30 	and procedures into compliance with section 471.6175.

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

175.32 	Sec. 20. TOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS.
 175.33 	Notwithstanding Minnesota Statutes, section 366.095, the town board of the town of 
175.34 	Crane Lake in St. Louis County may issue one or more certificates of indebtedness in a 
176.1 	total amount not to exceed $225,000, which are not subject to the debt limits of the town. 
176.2 	The proceeds of the certificates must be used to acquire property and pay other costs 
176.3 	related to a land exchange with the United States Forest Service. The certificates shall be 
176.4 	payable in not more than 30 years and be issued on the terms and in the manner as the 
176.5 	board may determine. Minnesota Statutes, sections 475.54, subdivision 1, and 475.56, 
176.6 	paragraph (c), do not apply to the certificates issued under this section. A tax levy shall be 
176.7 	made to pay the principal and interest on the certificates as in the case of bonds.

176.8 	EFFECTIVE DATE. This section is effective the day after the Crane Lake Town 
176.9 	Board and its chief clerical officer timely complete their compliance with Minnesota 
176.10 	Statutes, section 645.021, subdivisions 2 and 3.

176.11 	Sec. 21. CITY OF WINSTED; BONDING AUTHORITY.
 176.12 	(a) The city of Winsted may issue general obligation bonds under Minnesota 
176.13 	Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of 
176.14 	a city hall, community center, and police station; park improvements, including trails 
176.15 	and an amphitheater; related public improvements; and substantial landscaping for the 
176.16 	improvements. 
176.17 	(b) The bonds may be issued as general obligations of the city without an election to 
176.18 	approve the bonds under Minnesota Statutes, section 475.58.
176.19 	(c) The bonds are not included in computing any debt limitation applicable to the 
176.20 	city, including, but not limited to, the net debt limits under Minnesota Statutes, section 
176.21 	475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
176.22 	and interest on the bonds is not subject to any levy limitation.
176.23 	(d) The aggregate principal amount of bonds used to pay costs of the acquisition and 
176.24 	betterment of the facility consisting of a city hall, community center, and police station; 
176.25 	park improvements, including trails and an amphitheater; related public improvements; 
176.26 	and substantial landscaping for the improvements may not exceed $4,900,000, plus an 
176.27 	amount equal to the costs related to issuance of the bonds and capitalized interest.

176.28 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
176.29 	body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.

176.30 	ARTICLE 10
176.31 	SPECIAL TAXES

176.32 	Section 1. Minnesota Statutes 2006, section 297I.15, is amended by adding a 
176.33 	subdivision to read:
177.1 		Subd. 11.Premiums paid to certain foreign insurance companies. With respect 
177.2 	to the state employees group insurance program established under sections 43A.23 to 
177.3 	43A.31, premiums paid for life insurance and accidental death and dismemberment 
177.4 	insurance for eligible employees and dependents, including premiums paid by employees 
177.5 	or dependents for optional coverage, are exempt from the taxes imposed under this chapter 
177.6 	to the extent the premiums are paid to a foreign insurance company domiciled in a state 
177.7 	that exempts its state employee group life insurance program from premium taxes.

177.8 	EFFECTIVE DATE. This section is effective for premiums paid after December 
177.9 	31, 2006.

177.10 	Sec. 2. Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read:
177.11 		Subd. 4.Expiration. The authority to impose the tax under this section expires 
177.12 	January 1, 2008 2013.

177.13 	Sec. 3. Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read:
177.14 		Subd. 4.Expiration. The authority to impose the tax under this section expires 
177.15 	January 1, 2008 2013.

177.16 	Sec. 4. [383C.798] COUNTY DEED AND MORTGAGE TAX.
177.17 		Subdivision 1.Authority to impose; rate. (a) The governing body of St. Louis 
177.18 	County may impose a mortgage registry and deed tax.
177.19 	(b) The rate of the mortgage registry tax equals .0001 of the principal.
177.20 	(c) The rate of the deed tax equals .0001 of the amount.
177.21 		Subd. 2.General law provisions apply. The taxes under this section apply to 
177.22 	the same base and must be imposed, collected, administered, and enforced in the same 
177.23 	manner as provided under chapter 287 for the state mortgage registry and deed taxes. 
177.24 	All the provisions of chapter 287 apply to these taxes, except the rate is as specified in 
177.25 	subdivision 1, the term "St. Louis County" must be substituted for "the state," and the 
177.26 	revenue must be deposited as provided in subdivision 3.
177.27 		Subd. 3.Deposit of revenues. All revenues from the tax are for the use of the 
177.28 	St. Louis County Board of Commissioners and must be deposited in the county's 
177.29 	environmental response fund under section 383C.799.
177.30 		Subd. 4.Expiration. The authority to impose the tax under this section expires 
177.31 	January 1, 2013.

177.32 	Sec. 5. [383C.799] ENVIRONMENTAL RESPONSE FUND.
178.1 		Subdivision 1.Creation. An environmental response fund is created for the 
178.2 	purposes specified in this section. The taxes imposed under section 383C.798 must be 
178.3 	deposited in the fund. The Board of County Commissioners shall administer the fund 
178.4 	either as a county board or a housing and redevelopment authority.
178.5 		Subd. 2.Uses of fund. The fund created in subdivision 1 must be used for the 
178.6 	following purposes:
178.7 	(1) acquisition through purchase or condemnation of lands or property which are 
178.8 	polluted or contaminated with hazardous substances;
178.9 	(2) paying the costs associated with indemnifying or holding harmless the 
178.10 	entity taking title to lands or property from any liability arising out of the ownership, 
178.11 	remediation, or use of the land or property;
178.12 	(3) paying for the costs of remediating the acquired land or property; or
178.13 	(4) paying the costs associated with remediating lands or property which are polluted 
178.14 	or contaminated with hazardous substances.
178.15 		Subd. 3.Matching funds. In expending funds under this section, the county shall 
178.16 	seek matching funds from contamination cleanup funds administered by the commissioner 
178.17 	of the Department of Employment and Economic Development, the federal government, 
178.18 	the private sector, and any other source.
178.19 		Subd. 4.Bonds. The county may pledge the proceeds from the taxes imposed by 
178.20 	section 383C.798 to bonds issued under this section and chapters 462, 469, and 475. 
178.21 		Subd. 5.Land sales. Land or property acquired under this section may be resold 
178.22 	at fair market value. Proceeds from the sale of the land must be deposited in the 
178.23 	environmental response fund.

178.24 	Sec. 6. [383D.75] COUNTY DEED AND MORTGAGE TAX.
178.25 		Subdivision 1.Authority to impose; rate. (a) The governing body of Dakota 
178.26 	County may impose a mortgage registry and deed tax.
178.27 	(b) The rate of the mortgage registry tax equals .0001 of the principal.
178.28 	(c) The rate of the deed tax equals .0001 of the amount.
178.29 		Subd. 2.General law provisions apply. The taxes under this section apply to 
178.30 	the same base and must be imposed, collected, administered, and enforced in the same 
178.31 	manner as provided under chapter 287 for the state mortgage registry and deed taxes. 
178.32 	All the provisions of chapter 287 apply to these taxes, except the rate is as specified in 
178.33 	subdivision 1, the term "Dakota County" must be substituted for "the state," and the 
178.34 	revenue must be deposited as provided in subdivision 3.
179.1 		Subd. 3.Deposit of revenues. All revenues from the tax are for the use of 
179.2 	the Dakota County Board of Commissioners and must be deposited in the county's 
179.3 	environmental response fund under section  383D.76.
179.4 		Subd. 4.Expiration. The authority to impose the tax under this section expires 
179.5 	January 1, 2013.

179.6 	Sec. 7. [383D.76] ENVIRONMENTAL RESPONSE FUND.
179.7 		Subdivision 1.Creation. An environmental response fund is created for the 
179.8 	purposes specified in this section. The taxes imposed under section 383D.75 must be 
179.9 	deposited in the fund. The Board of County Commissioners shall administer the fund 
179.10 	either as a county board or a housing and redevelopment authority.
179.11 		Subd. 2.Uses of fund. The fund created in subdivision 1 must be used for the 
179.12 	following purposes:
179.13 	(1) acquisition through purchase or condemnation of lands or property which are 
179.14 	polluted or contaminated with hazardous substances;
179.15 	(2) paying the costs associated with indemnifying or holding harmless the 
179.16 	entity taking title to lands or property from any liability arising out of the ownership, 
179.17 	remediation, or use of the land or property;
179.18 	(3) paying for the costs of remediating the acquired land or property; or
179.19 	(4) paying the costs associated with remediating lands or property which are polluted 
179.20 	or contaminated with hazardous substances.
179.21 		Subd. 3.Matching funds. In expending funds under this section, the county shall 
179.22 	seek matching funds from contamination cleanup funds administered by the commissioner 
179.23 	of the Department of Employment and Economic Development, the Metropolitan Council, 
179.24 	the federal government, the private sector, and any other source.
179.25 		Subd. 4.Bonds. The county may pledge the proceeds from the taxes imposed by 
179.26 	section  383D.75 to bonds issued under this chapter and chapters 462, 469, and 475. 
179.27 		Subd. 5.Land sales. Land or property acquired under this section may be resold 
179.28 	at fair market value. Proceeds from the sale of the land must be deposited in the 
179.29 	environmental response fund.

179.30 	Sec. 8. [383E.235] COUNTY DEED AND MORTGAGE TAX.
179.31 		Subdivision 1.Authority to impose; rate. (a) The governing body of Anoka 
179.32 	County may impose a mortgage registry and deed tax.
179.33 	(b) The rate of the mortgage registry tax equals .0001 of the principal.
179.34 	(c) The rate of the deed tax equals .0001 of the amount.
180.1 		Subd. 2.General law provisions apply. The taxes under this section apply to 
180.2 	the same base and must be imposed, collected, administered, and enforced in the same 
180.3 	manner as provided under chapter 287 for the state mortgage registry and deed taxes. 
180.4 	All the provisions of chapter 287 apply to these taxes, except the rate is as specified 
180.5 	in subdivision 1, the term "Anoka County" must be substituted for "the state," and the 
180.6 	revenue must be deposited as provided in subdivision 3.
180.7 		Subd. 3.Deposit of revenues. All revenues from the tax are for the use of the Anoka 
180.8 	County Board of Commissioners and must be deposited in the county's environmental 
180.9 	response fund under section 383E.236.
180.10 		Subd. 4.Expiration. The authority to impose the tax under this section expires 
180.11 	January 1, 2013.

180.12 	Sec. 9. [383E.236] ENVIRONMENTAL RESPONSE FUND.
180.13 		Subdivision 1.Creation. An environmental response fund is created for the 
180.14 	purposes specified in this section. The taxes imposed under section 383E.235 must be 
180.15 	deposited in the fund. The Board of County Commissioners shall administer the fund 
180.16 	either as a county board or a housing and redevelopment authority.
180.17 		Subd. 2.Uses of fund. The fund created in subdivision 1 must be used for the 
180.18 	following purposes:
180.19 	(1) acquisition through purchase or condemnation of lands or property which are 
180.20 	polluted or contaminated with hazardous substances;
180.21 	(2) paying the costs associated with indemnifying or holding harmless the 
180.22 	entity taking title to lands or property from any liability arising out of the ownership, 
180.23 	remediation, or use of the land or property;
180.24 	(3) paying for the costs of remediating the acquired land or property; or
180.25 	(4) paying the costs associated with remediating lands or property which are polluted 
180.26 	or contaminated with hazardous substances.
180.27 		Subd. 3.Matching funds. In expending funds under this section, the county shall 
180.28 	seek matching funds from contamination cleanup funds administered by the commissioner 
180.29 	of the Department of Employment and Economic Development, the Metropolitan Council, 
180.30 	the federal government, the private sector, and any other source.
180.31 		Subd. 4.Bonds. The county may pledge the proceeds from the taxes imposed by 
180.32 	section 383E.235 to bonds issued under this section and chapters 462, 469, and 475. 
180.33 		Subd. 5.Land sales. Land or property acquired under this section may be resold 
180.34 	at fair market value. Proceeds from the sale of the land must be deposited in the 
180.35 	environmental response fund.
181.1 		Subd. 6.DOT assistance. The commissioner of transportation shall collaborate with 
181.2 	the county and any affected municipality by providing technical assistance and support in 
181.3 	cleaning up a contaminated site related to a trunk highway or railroad improvement.

181.4 	Sec. 10. Laws 2003, chapter 128, article 1, section 172, as amended by Laws 2005, 
181.5 	First Special Session chapter 1, article 4, section 118, is amended to read:
181.6 	Sec. 172. TEMPORARY PETROFUND FEE EXEMPTION FOR 
181.7 	MINNESOTA COMMERCIAL AIRLINES.
 181.8 	(a) A commercial airline providing regularly scheduled jet service and with its 
181.9 	corporate headquarters in Minnesota is exempt from the fee established in Minnesota 
181.10 	Statutes, section 115C.08, subdivision 3, until July 1, 2007 2009, provided the airline 
181.11 	develops a plan approved by the commissioner of commerce demonstrating that the 
181.12 	savings from this exemption will go towards minimizing job losses in Minnesota, and to 
181.13 	support the airline's efforts to avoid filing for resolve federal bankruptcy protections
181.14 	proceedings.
181.15 	(b) A commercial airline exempted from the fee is ineligible to receive 
181.16 	reimbursement under Minnesota Statutes, chapter 115C, until July 1, 2007 2009. A 
181.17 	commercial airline that has a release during the fee exemption period is ineligible to 
181.18 	receive reimbursement under Minnesota Statutes, chapter 115C, for the costs incurred in 
181.19 	response to that release.

181.20 	ARTICLE 11
181.21 	DEPARTMENT INCOME AND FRANCHISE TAXES

181.22 	Section 1. Minnesota Statutes 2006, section 270A.03, subdivision 5, is amended to 
181.23 	read:
181.24 		Subd. 5.Debt. (a) "Debt" means a legal obligation of a natural person to pay a fixed 
181.25 	and certain amount of money, which equals or exceeds $25 and which is due and payable 
181.26 	to a claimant agency. The term includes criminal fines imposed under section 609.10 or 
181.27 	609.125, fines imposed for petty misdemeanors as defined in section 609.02, subdivision 
181.28 	4a, and restitution. The term also includes the co-payment for the appointment of a district 
181.29 	public defender imposed under section 611.17, paragraph (c). A debt may arise under a 
181.30 	contractual or statutory obligation, a court order, or other legal obligation, but need not 
181.31 	have been reduced to judgment.
181.32 	A debt includes any legal obligation of a current recipient of assistance which is 
181.33 	based on overpayment of an assistance grant where that payment is based on a client 
181.34 	waiver or an administrative or judicial finding of an intentional program violation; 
182.1 	or where the debt is owed to a program wherein the debtor is not a client at the time 
182.2 	notification is provided to initiate recovery under this chapter and the debtor is not a 
182.3 	current recipient of food support, transitional child care, or transitional medical assistance.
182.4 	(b) A debt does not include any legal obligation to pay a claimant agency for medical 
182.5 	care, including hospitalization if the income of the debtor at the time when the medical 
182.6 	care was rendered does not exceed the following amount:
182.7 	(1) for an unmarried debtor, an income of $8,800 or less;
182.8 	(2) for a debtor with one dependent, an income of $11,270 or less;
182.9 	(3) for a debtor with two dependents, an income of $13,330 or less;
182.10 	(4) for a debtor with three dependents, an income of $15,120 or less;
182.11 	(5) for a debtor with four dependents, an income of $15,950 or less; and
182.12 	(6) for a debtor with five or more dependents, an income of $16,630 or less.
182.13 	The income amounts in this subdivision shall be adjusted for inflation for debts 
182.14 	incurred in calendar years 2001 and thereafter. The dollar amount of each income level 
182.15 	that applied to debts incurred in the prior year shall be increased in the same manner 
182.16 	as provided in section 1(f) of the Internal Revenue Code of 1986, as amended through 
182.17 	December 31, 2000, except that for the purposes of this subdivision the percentage 
182.18 	increase shall be determined from the year starting September 1, 1999, and ending August 
182.19 	31, 2000, as the base year for adjusting for inflation for debts incurred after December 
182.20 	31, 2000. (c) The commissioner shall adjust the income amounts in paragraph (b) by the 
182.21 	percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue 
182.22 	Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word 
182.23 	"1992." For 2001, the commissioner shall then determine the percent change from the 12 
182.24 	months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in 
182.25 	each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months 
182.26 	ending on August 31 of the year preceding the taxable year. The determination of the 
182.27 	commissioner pursuant to this subdivision shall not be considered a "rule" and shall not 
182.28 	be subject to the Administrative Procedure Act contained in chapter 14. The income 
182.29 	amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in 
182.30 	$5, the amount is rounded up to the nearest $10 amount.
182.31 	(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of 
182.32 	the dollar amount of the premium authorized under section 256L.15, subdivision 1a.

182.33 	EFFECTIVE DATE. This section is effective for debts incurred after December 
182.34 	31, 2006.

182.35 	Sec. 2. Minnesota Statutes 2006, section 289A.08, subdivision 11, is amended to read:
183.1 		Subd. 11.Information included in income tax return. (a) The return must state:
183.2 	(1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the 
183.3 	address of the taxpayer in the same name or names and same address as the taxpayer has 
183.4 	used in making the taxpayer's income tax return to the United States, and must state;
183.5 	(2) the date or dates of birth of the taxpayer or taxpayers;
183.6 	(3) the Social Security number of the taxpayer, or taxpayers, if a Social Security 
183.7 	number has been issued by the United States with respect to the taxpayers, and must 
183.8 	state; and
183.9 	(4) the amount of the taxable income of the taxpayer as it appears on the federal 
183.10 	return for the taxable year to which the Minnesota state return applies. 
183.11 	(b) The taxpayer must attach to the taxpayer's Minnesota state income tax return 
183.12 	a copy of the federal income tax return that the taxpayer has filed or is about to file for 
183.13 	the period, unless the taxpayer is eligible to telefile the federal return and does file the 
183.14 	Minnesota return by telefiling.

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

183.17 	Sec. 3. Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:
183.18 		Subd. 2.Withholding statement to employee or payee and to commissioner. (a) 
183.19 	A person required to deduct and withhold from an employee a tax under section 290.92, 
183.20 	subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to 
183.21 	deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required 
183.22 	to withhold tax under section 290.923, subdivision 2, determined without regard to 
183.23 	section 290.92, subdivision 19, if the employee or payee had claimed no more than one 
183.24 	withholding exemption, or who paid wages or made payments not subject to withholding 
183.25 	under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or 
183.26 	person receiving royalty payments in excess of $600, or who has entered into a voluntary 
183.27 	withholding agreement with a payee under section 290.92, subdivision 20, must give 
183.28 	every employee or person receiving royalty payments in respect to the remuneration paid 
183.29 	by the person to the employee or person receiving royalty payments during the calendar 
183.30 	year, on or before January 31 of the succeeding year, or, if employment is terminated 
183.31 	before the close of the calendar year, within 30 days after the date of receipt of a written 
183.32 	request from the employee if the 30-day period ends before January 31, a written statement 
183.33 	showing the following: 
183.34 	(1) name of the person;
184.1 	(2) the name of the employee or payee and the employee's or payee's Social Security 
184.2 	account number;
184.3 	(3) the total amount of wages as that term is defined in section 290.92, subdivision 
184.4 	1, paragraph (1); the total amount of remuneration subject to withholding under section 
184.5 	290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the 
184.6 	Internal Revenue Code; and the amount of royalties subject to withholding under section 
184.7 	290.923, subdivision 2; and 
184.8 	(4) the total amount deducted and withheld as tax under section 290.92, subdivision 
184.9 	2a or 3, or 290.923, subdivision 2. 
184.10 	(b) The statement required to be furnished by this paragraph (a) with respect to any 
184.11 	remuneration must be furnished at those times, must contain the information required, and 
184.12 	must be in the form the commissioner prescribes.
184.13 	(c) The commissioner may prescribe rules providing for reasonable extensions of 
184.14 	time, not in excess of 30 days, to employers or payers required to give the statements to 
184.15 	their employees or payees under this subdivision.
184.16 	(d) A duplicate of any statement made under this subdivision and in accordance 
184.17 	with rules prescribed by the commissioner, along with a reconciliation in the form the 
184.18 	commissioner prescribes of the statements for the calendar year, including a reconciliation 
184.19 	of the quarterly returns required to be filed under subdivision 1, must be filed with the 
184.20 	commissioner on or before February 28 of the year after the payments were made.
184.21 	(e) If an employer cancels the employer's Minnesota withholding account number 
184.22 	required by section 290.92, subdivision 24, the information required by paragraph (d), 
184.23 	must be filed with the commissioner within 30 days of the end of the quarter in which 
184.24 	the employer cancels its account number. 
184.25 	(f) The employer must submit the statements required to be sent to the commissioner 
184.26 	on magnetic media, if the magnetic media wasin the same manner required to satisfy the 
184.27 	federal reporting requirements of section 6011(e) of the Internal Revenue Code and the 
184.28 	regulations issued under it. For wages paid in calendar year 2007, an employer must 
184.29 	submit statements to the commissioner required by this section by electronic means if the 
184.30 	employer is required to send more than 100 statements to the commissioner, even though 
184.31 	the employer is not required to submit the returns federally by electronic means. For 
184.32 	calendar year 2008, the 100 statements threshold is reduced to 50, and for calendar year 
184.33 	2009, the threshold is reduced to 25, and for 2010 and after, the threshold is reduced to ten.
184.34 	(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph 
184.35 	(a), clause (2), must submit the returns required by this subdivision and subdivision 1, 
184.36 	paragraph (a), with the commissioner by electronic means. 

185.1 	EFFECTIVE DATE. This section is effective for wages paid after December 31, 
185.2 	2006.

185.3 	Sec. 4. Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read:
185.4 		Subd. 14.Regulated investment companies; reporting exempt-interest 
185.5 	dividends. (a) A regulated investment company paying $10 or more in exempt-interest 
185.6 	dividends to an individual who is a resident of Minnesota must make a return indicating 
185.7 	the amount of the exempt-interest dividends, the name, address, and Social Security 
185.8 	number of the recipient, and any other information that the commissioner specifies. The 
185.9 	return must be provided to the shareholder no later than 30 days after the close of the 
185.10 	taxable year. The return provided to the shareholder must include a clear statement, in the 
185.11 	form prescribed by the commissioner, that the exempt-interest dividends must be included 
185.12 	in the computation of Minnesota taxable income. The commissioner may by notice and 
185.13 	demand require the regulated investment company is required in a manner prescribed by 
185.14 	the commissioner to file a copy of the return with the commissioner.
185.15 	(b) This subdivision applies to regulated investment companies required to register 
185.16 	under chapter 80A.
185.17 	(c) For purposes of this subdivision, the following definitions apply.
185.18 	(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in 
185.19 	section 852(b)(5) of the Internal Revenue Code, but does not include the portion of 
185.20 	exempt-interest dividends that are not required to be added to federal taxable income 
185.21 	under section 290.01, subdivision 19a, clause (1)(ii). 
185.22 	(2) "Regulated investment company" means regulated investment company as 
185.23 	defined in section 851(a) of the Internal Revenue Code or a fund of the regulated 
185.24 	investment company as defined in section 851(g) of the Internal Revenue Code.

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

185.27 	Sec. 5. Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read:
185.28 		Subdivision 1.Individual income, fiduciary income, corporate franchise, and 
185.29 	entertainment taxes; partnership and S corporation returns; information returns; 
185.30 	mining company returns. The returns required to be made under sections 289A.08 and 
185.31 	289A.12 must be filed at the following times:
185.32 	(1) returns made on the basis of the calendar year must be filed on April 15 following 
185.33 	the close of the calendar year, except that returns of corporations must be filed on March 
185.34 	15 following the close of the calendar year;
186.1 	(2) returns made on the basis of the fiscal year must be filed on the 15th day of the 
186.2 	fourth month following the close of the fiscal year, except that returns of corporations 
186.3 	must be filed on the 15th day of the third month following the close of the fiscal year;
186.4 	(3) returns for a fractional part of a year must be filed on the 15th day of the fourth 
186.5 	month following the end of the month in which falls the last day of the period for which 
186.6 	the return is made, except that the returns of corporations must be filed on the 15th day of 
186.7 	the third month following the end of the tax year of the unitary group in which falls the 
186.8 	last day of the period for which the return is made;
186.9 	(4) in the case of a final return of a decedent for a fractional part of a year, the return 
186.10 	must be filed on the 15th day of the fourth month following the close of the 12-month 
186.11 	period that began with the first day of that fractional part of a year;
186.12 	(5) in the case of the return of a cooperative association, returns must be filed on or 
186.13 	before the 15th day of the ninth month following the close of the taxable year;
186.14 	(6) if a corporation has been divested from a unitary group and files a return for 
186.15 	a fractional part of a year in which it was a member of a unitary business that files a 
186.16 	combined report under section 290.34, subdivision 2, the divested corporation's return 
186.17 	must be filed on the 15th day of the third month following the close of the common 
186.18 	accounting period that includes the fractional year;
186.19 	(7) returns of entertainment entities must be filed on April 15 following the close of 
186.20 	the calendar year;
186.21 	(8) returns required to be filed under section 289A.08, subdivision 4, must be filed 
186.22 	on the 15th day of the fifth month following the close of the taxable year;
186.23 	(9) returns of mining companies must be filed on May 1 following the close of the 
186.24 	calendar year; and
186.25 	(10) returns required to be filed with the commissioner under section 289A.12, 
186.26 	subdivision 2,or 4 to 10, or 14, must be filed within 30 days after being demanded by 
186.27 	the commissioner.

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

186.30 	Sec. 6. Minnesota Statutes 2006, section 289A.60, subdivision 8, is amended to read:
186.31 		Subd. 8.Penalty forPenalties; failure to file informational return; incorrect 
186.32 	taxpayer identification number. (a) In the case of a failure to file an informational return 
186.33 	required by section 289A.12 with the commissioner on the date prescribed (determined 
186.34 	with regard to any extension of time for filing), the person failing to file the return shall pay 
186.35 	a penalty of $50 for each failure or in the case of a partnership, S corporation, or fiduciary 
187.1 	return, $50 for each partner, shareholder, or beneficiary; but the total amount imposed on 
187.2 	the delinquent person for all failures during any calendar year must not exceed $25,000. If 
187.3 	a failure to file a return is due to intentional disregard of the filing requirement, then the 
187.4 	penalty imposed under the preceding sentence must not be less than an amount equal to: 
187.5 	(1) in the case of a return not described in clause (2) or (3), ten percent of the 
187.6 	aggregate amount of the items required to be reported;
187.7 	(2) in the case of a return required to be filed under section 289A.12, subdivision 5, 
187.8 	five percent of the gross proceeds required to be reported; and 
187.9 	(3) in the case of a return required to be filed under section 289A.12, subdivision 9, 
187.10 	relating to direct sales, $100 for each failure; however, the total amount imposed on the 
187.11 	delinquent person for intentional failures during a calendar year must not exceed $50,000. 
187.12 	The penalty must be collected in the same manner as a delinquent income tax. 
187.13 	(b) If a partnership or S corporation files a partnership or S corporation return with 
187.14 	an incorrect tax identification number used for a partner or shareholder after being notified 
187.15 	by the commissioner that the identification number is incorrect, the partnership or S 
187.16 	corporation must pay a penalty of $50 for each such incorrect number.

187.17 	EFFECTIVE DATE. This section is effective for returns filed after December 
187.18 	31, 2007.

187.19 	Sec. 7. Minnesota Statutes 2006, section 289A.60, subdivision 12, is amended to read:
187.20 		Subd. 12.Penalties relating to property tax refunds. (a) If it is determined that a 
187.21 	property tax refund claim is excessive and was negligently prepared, a claimant is liable 
187.22 	for a penalty of ten percent of the corrected claim must be disallowed claim. If the claim 
187.23 	has been paid, the amount disallowed must be recovered by assessment and collection.
187.24 	(b) An owner who without reasonable cause fails to give a certificate of rent 
187.25 	constituting property tax to a renter, as required by section 290A.19, paragraph (a), is 
187.26 	liable to the commissioner for a penalty of $100 for each failure.
187.27 	(c) If the owner or managing agent knowingly gives rent certificates that report total 
187.28 	rent constituting property taxes in excess of the amount of actual rent constituting property 
187.29 	taxes paid on the rented part of a property, the owner or managing agent is liable for a 
187.30 	penalty equal to the greater of (1) $100 or (2) 50 percent of the excess that is reported. An 
187.31 	overstatement of rent constituting property taxes is presumed to be knowingly made if it 
187.32 	exceeds by ten percent or more the actual rent constituting property taxes.

187.33 	EFFECTIVE DATE. This section is effective for property tax refund claims filed 
187.34 	on or after July 1, 2007.

188.1 	Sec. 8. Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read:
188.2 		Subd. 27.Reportable transaction understatement. (a) If a taxpayer has a 
188.3 	reportable transaction understatement for any taxable year, an amount equal to 20 percent 
188.4 	of the amount of the reportable transaction understatement must be added to the tax.
188.5 	(b)(1) For purposes of this subdivision, "reportable transaction understatement" 
188.6 	means the product of:
188.7 	(i) the amount of the increase, if any, in taxable income that results from a difference 
188.8 	between the proper tax treatment of an item to which this section applies and the taxpayer's 
188.9 	treatment of that item as shown on the taxpayer's tax return; and
188.10 	(ii) the highest rate of tax imposed on the taxpayer under section 290.06 determined 
188.11 	without regard to the understatement.
188.12 	(2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed 
188.13 	for the taxable year over gross income for that year, and any reduction in the amount of 
188.14 	capital losses which would, without regard to section 1211 of the Internal Revenue Code, 
188.15 	be allowed for that year, must be treated as an increase in taxable income.
188.16 	(c) This subdivision applies to any item that is attributable to:
188.17 	(1) any listed transaction under section 289A.121; and
188.18 	(2) any reportable transaction, other than a listed transaction, if a significant purpose 
188.19 	of that transaction is the avoidance or evasion of federal income tax liability.
188.20 	(d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect 
188.21 	to the portion of any reportable transaction understatement with respect to which the 
188.22 	disclosure requirements of section 289A.121, subdivision 5, and section 6664(d)(2)(A) 
188.23 	of the Internal Revenue Code are not met.
188.24 	(e)(1) No penalty applies under this subdivision with respect to any portion of a 
188.25 	reportable transaction understatement if the taxpayer shows that there was reasonable 
188.26 	cause for the portion and that the taxpayer acted in good faith with respect to the portion. 
188.27 	This paragraph applies only if:
188.28 	(i) the relevant facts affecting the tax treatment of the item are adequately disclosed 
188.29 	as required under section 289A.121;
188.30 	(ii) there is or was substantial authority for the treatment; and
188.31 	(iii) the taxpayer reasonably believed that the treatment was more likely than not 
188.32 	the proper treatment.
188.33 	(2) A taxpayer who did not adequately disclose under section 289A.121 meets 
188.34 	the requirements of clause (1)(i), if the commissioner abates the penalty imposed by 
188.35 	subdivision 26, paragraph (d), under section 270C.34 subdivision 26, paragraph (g).
189.1 	(3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief 
189.2 	with respect to the tax treatment of an item only if the belief:
189.3 	(i) is based on the facts and law that exist when the return of tax which includes the 
189.4 	tax treatment is filed; and
189.5 	(ii) relates solely to the taxpayer's chances of success on the merits of the treatment 
189.6 	and does not take into account the possibility that a return will not be audited, the 
189.7 	treatment will not be raised on audit, or the treatment will be resolved through settlement 
189.8 	if it is raised.
189.9 	(4) An opinion of a tax advisor may not be relied upon to establish the reasonable 
189.10 	belief of a taxpayer if:
189.11 	(i) the tax advisor:
189.12 	(A) is a material advisor, as defined in section 289A.121, and participates in the 
189.13 	organization, management, promotion, or sale of the transaction or is related (within the 
189.14 	meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person 
189.15 	who so participates;
189.16 	(B) is compensated directly or indirectly by a material advisor with respect to the 
189.17 	transaction;
189.18 	(C) has a fee arrangement with respect to the transaction which is contingent on all 
189.19 	or part of the intended tax benefits from the transaction being sustained; or
189.20 	(D) has a disqualifying financial interest with respect to the transaction, as 
189.21 	determined under United States Treasury regulations prescribed to implement the 
189.22 	provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or
189.23 	(ii) the opinion:
189.24 	(A) is based on unreasonable factual or legal assumptions, including assumptions 
189.25 	as to future events;
189.26 	(B) unreasonably relies on representations, statements, findings, or agreements of 
189.27 	the taxpayer or any other person;
189.28 	(C) does not identify and consider all relevant facts; or
189.29 	(D) fails to meet any other requirement as the Secretary of the Treasury may 
189.30 	prescribe under federal law.
189.31 	(f) The penalty imposed by this subdivision applies in lieu of the penalty imposed 
189.32 	under subdivision 4.

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

189.34 	Sec. 9. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision 
189.35 	to read:
190.1 		Subd. 28.Preparer identification number. Any Minnesota individual income tax 
190.2 	return or claim for refund prepared by a "tax refund or return preparer" as defined in 
190.3 	subdivision 13, paragraph (f), shall bear the identification number the preparer is required 
190.4 	to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund 
190.5 	or return preparer who prepares a Minnesota individual income tax return or claim for 
190.6 	refund and fails to include the required number on the return or claim is subject to a 
190.7 	penalty of $50 for each failure.

190.8 	EFFECTIVE DATE. This section is effective for returns prepared for tax years 
190.9 	beginning after December 31, 2006.

190.10 	Sec. 10. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
190.11 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
190.12 	there shall be added to federal taxable income:
190.13 	(1) the amount of any deduction taken for federal income tax purposes for income, 
190.14 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
190.15 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
190.16 	another state, a political subdivision of another state, the District of Columbia, or any 
190.17 	foreign country or possession of the United States;
190.18 	(2) interest not subject to federal tax upon obligations of: the United States, its 
190.19 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
190.20 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
190.21 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
190.22 	tribal governments;
190.23 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
190.24 	Revenue Code;
190.25 	(4) the amount of any net operating loss deduction taken for federal income tax 
190.26 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
190.27 	deduction under section 810 of the Internal Revenue Code;
190.28 	(5) the amount of any special deductions taken for federal income tax purposes 
190.29 	under sections 241 to 247 and 965 of the Internal Revenue Code;
190.30 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
190.31 	clause (a), that are not subject to Minnesota income tax;
190.32 	(7) the amount of any capital losses deducted for federal income tax purposes under 
190.33 	sections 1211 and 1212 of the Internal Revenue Code;
190.34 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
190.35 	921(a) and 291 of the Internal Revenue Code;
191.1 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
191.2 	291 of the Internal Revenue Code;
191.3 	(10) for certified pollution control facilities placed in service in a taxable year 
191.4 	beginning before December 31, 1986, and for which amortization deductions were elected 
191.5 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
191.6 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
191.7 	income for those facilities;
191.8 	(11) the amount of any deemed dividend from a foreign operating corporation 
191.9 	determined pursuant to section 290.17, subdivision 4, paragraph (g);
191.10 	(12)(11) the amount of a partner's pro rata share of net income which does not flow 
191.11 	through to the partner because the partnership elected to pay the tax on the income under 
191.12 	section 6242(a)(2) of the Internal Revenue Code;
191.13 	(13)(12) the amount of net income excluded under section 114 of the Internal 
191.14 	Revenue Code;
191.15 	(14) (13) any increase in subpart F income, as defined in section 952(a) of the 
191.16 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
191.17 	regard to the provisions of section 103 of Public Law 109-222;
191.18 	(15)(14) 80 percent of the depreciation deduction allowed under section 
191.19 	168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if 
191.20 	the taxpayer has an activity that in the taxable year generates a deduction for depreciation 
191.21 	under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable 
191.22 	year that the taxpayer is not allowed to claim for the taxable year, "the depreciation 
191.23 	allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess 
191.24 	of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) 
191.25 	over the amount of the loss from the activity that is not allowed in the taxable year. In 
191.26 	succeeding taxable years when the losses not allowed in the taxable year are allowed, the 
191.27 	depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
191.28 	(16)(15) 80 percent of the amount by which the deduction allowed by section 179 of 
191.29 	the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
191.30 	Revenue Code of 1986, as amended through December 31, 2003;
191.31 	(17) (16) to the extent deducted in computing federal taxable income, the amount of 
191.32 	the deduction allowable under section 199 of the Internal Revenue Code; and
191.33 	(18) (17) the exclusion allowed under section 139A of the Internal Revenue Code 
191.34 	for federal subsidies for prescription drug plans.

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

192.1 	Sec. 11. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
192.2 		Subd. 19d.Corporations; modifications decreasing federal taxable income. For 
192.3 	corporations, there shall be subtracted from federal taxable income after the increases 
192.4 	provided in subdivision 19c:
192.5 	(1) the amount of foreign dividend gross-up added to gross income for federal 
192.6 	income tax purposes under section 78 of the Internal Revenue Code;
192.7 	(2) the amount of salary expense not allowed for federal income tax purposes due 
192.8 	to claiming the federal jobs work opportunity credit under section 51 of the Internal 
192.9 	Revenue Code;
192.10 	(3) any dividend (not including any distribution in liquidation) paid within the 
192.11 	taxable year by a national or state bank to the United States, or to any instrumentality of 
192.12 	the United States exempt from federal income taxes, on the preferred stock of the bank 
192.13 	owned by the United States or the instrumentality;
192.14 	(4) amounts disallowed for intangible drilling costs due to differences between 
192.15 	this chapter and the Internal Revenue Code in taxable years beginning before January 
192.16 	1, 1987, as follows:
192.17 	(i) to the extent the disallowed costs are represented by physical property, an amount 
192.18 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
192.19 	subdivision 7, subject to the modifications contained in subdivision 19e; and
192.20 	(ii) to the extent the disallowed costs are not represented by physical property, an 
192.21 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
192.22 	290.09, subdivision 8;
192.23 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
192.24 	Internal Revenue Code, except that:
192.25 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
192.26 	capital loss carrybacks shall not be allowed;
192.27 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
192.28 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
192.29 	allowed;
192.30 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
192.31 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
192.32 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
192.33 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
192.34 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
192.35 	extent such loss was not used in a prior taxable year and subject to the provisions of 
192.36 	Minnesota Statutes 1986, section 290.16, shall be allowed;
193.1 	(6) an amount for interest and expenses relating to income not taxable for federal 
193.2 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
193.3 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
193.4 	291 of the Internal Revenue Code in computing federal taxable income;
193.5 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
193.6 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (11) (9), a 
193.7 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
193.8 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
193.9 	by the commissioner. In the case of property held in trust, the allowable deduction must 
193.10 	be apportioned between the income beneficiaries and the trustee in accordance with the 
193.11 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
193.12 	of the trust's income allocable to each;
193.13 	(8) for certified pollution control facilities placed in service in a taxable year 
193.14 	beginning before December 31, 1986, and for which amortization deductions were elected 
193.15 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
193.16 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
193.17 	1986, section 290.09, subdivision 7;
193.18 	(9) amounts included in federal taxable income that are due to refunds of income, 
193.19 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
193.20 	corporation to Minnesota, another state, a political subdivision of another state, the 
193.21 	District of Columbia, or a foreign country or possession of the United States to the extent 
193.22 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
193.23 	clause (1), in a prior taxable year;
193.24 	(10)(9) 80 percent of royalties, fees, or other like income accrued or received from a 
193.25 	foreign operating corporation or a foreign corporation which is part of the same unitary 
193.26 	business as the receiving corporation;
193.27 	(11)(10) income or gains from the business of mining as defined in section 290.05, 
193.28 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
193.29 	(12)(11) the amount of disability access expenditures in the taxable year which are 
193.30 	not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue 
193.31 	Code;
193.32 	(13)(12) the amount of qualified research expenses not allowed for federal income 
193.33 	tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent 
193.34 	that the amount exceeds the amount of the credit allowed under section 290.068;
194.1 	(14)(13) the amount of salary expenses not allowed for federal income tax purposes 
194.2 	due to claiming the Indian employment credit under section 45A(a) of the Internal 
194.3 	Revenue Code;
194.4 	(15) the amount of any refund of environmental taxes paid under section 59A of the 
194.5 	Internal Revenue Code;
194.6 	(16) (14) for taxable years beginning before January 1, 2008, the amount of the 
194.7 	federal small ethanol producer credit allowed under section 40(a)(3) of the Internal 
194.8 	Revenue Code which is included in gross income under section 87 of the Internal Revenue 
194.9 	Code;
194.10 	(17) (15) for a corporation whose foreign sales corporation, as defined in section 
194.11 	922 of the Internal Revenue Code, constituted a foreign operating corporation during any 
194.12 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
194.13 	claiming the deduction under section 290.21, subdivision 4, for income received from 
194.14 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
194.15 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
194.16 	not income of a foreign operating company;
194.17 	(18) (16) any decrease in subpart F income, as defined in section 952(a) of the 
194.18 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
194.19 	regard to the provisions of section 614 103 of Public Law 107-147 109-222;
194.20 	(19) (17) in each of the five tax years immediately following the tax year in which an 
194.21 	addition is required under subdivision 19c, clause (15) (14), an amount equal to one-fifth 
194.22 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 
194.23 	amount of the addition made by the taxpayer under subdivision 19c, clause (15) (14). The 
194.24 	resulting delayed depreciation cannot be less than zero; and
194.25 	(20) (18) in each of the five tax years immediately following the tax year in which an 
194.26 	addition is required under subdivision 19c, clause (16) (15), an amount equal to one-fifth 
194.27 	of the amount of the addition.

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

194.31 	Sec. 12. Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read:
194.32 		Subd. 33.Bovine testing credit. (a) An owner of cattle in Minnesota may take a 
194.33 	credit against the tax due under this chapter for an amount equal to one-half the expenses 
194.34 	incurred during the taxable year to conduct tuberculosis testing on those cattle. 
195.1 	(b) If the amount of credit which the taxpayer is eligible to receive under this 
195.2 	subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of 
195.3 	revenue shall refund the excess to the taxpayer.
195.4 	(c) The amount necessary to pay claims for the refund provided in this subdivision is 
195.5 	appropriated from the general fund to the commissioner of revenue.
195.6 	(d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in 
195.7 	Minnesota is not federally required are not allowed in claiming the credit under paragraph 
195.8 	(a).

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

195.11 	Sec. 13. Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read:
195.12 		Subd. 2b.Inflation adjustment. The commissioner shall adjust the dollar amount 
195.13 	of the income threshold at which the maximum credit begins to be reduced under 
195.14 	subdivision 2 must be adjusted for inflation. The commissioner shall make the inflation 
195.15 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
195.16 	the purposes of this subdivision the percentage increase must be determined from the year 
195.17 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting 
195.18 	for inflation for the tax year beginning after December 31, 2000. The determination of 
195.19 	the commissioner under this subdivision is not a rule under the Administrative Procedure 
195.20 	Act. by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
195.21 	Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for 
195.22 	the word "1992." For 2001, the commissioner shall then determine the percent change 
195.23 	from the 12 months ending on August 31, 1999, to the 12 months ending on August 31, 
195.24 	2000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the 
195.25 	12 months ending on August 31 of the year preceding the taxable year. The determination 
195.26 	of the commissioner pursuant to this subdivision must not be considered a "rule" and is 
195.27 	not subject to the Administrative Procedure Act contained in chapter 14. The threshold 
195.28 	amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in 
195.29 	$5, the amount is rounded up to the nearest $10 amount.

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

195.32 	Sec. 14. Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read:
196.1 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the 
196.2 	credit and the income thresholds at which the maximum credit begins to be reduced in 
196.3 	subdivision 1 must be adjusted for inflation. The commissioner shall make the inflation 
196.4 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
196.5 	the purposes of this subdivision the percentage increase shall be determined from the year 
196.6 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting for 
196.7 	inflation for the tax year beginning after December 31, 2000.adjust by the percentage 
196.8 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
196.9 	that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For 
196.10 	2001, the commissioner shall then determine the percent change from the 12 months 
196.11 	ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each 
196.12 	subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending 
196.13 	on August 31 of the year preceding the taxable year. The earned income thresholds as 
196.14 	adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends 
196.15 	in $5, the amount is rounded up to the nearest $10 amount. The determination of the 
196.16 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.

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

196.19 	Sec. 15. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
196.20 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative 
196.21 	minimum tax, the exemption amount is:
196.22 	(1) for taxable years beginning before January 1, 2006, the exemption determined 
196.23 	under section 55(d) of the Internal Revenue Code, as amended through December 31, 
196.24 	1992; and
196.25 	(2), for taxable years beginning after December 31, 2005, $60,000 for married 
196.26 	couples filing joint returns, $30,000 for married individuals filing separate returns, estates, 
196.27 	and trusts, and $45,000 for unmarried individuals.
196.28 	(b) The exemption amount determined under this subdivision is subject to the phase 
196.29 	out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 
196.30 	taxable income as determined under this section must be substituted in the computation of 
196.31 	the phase out.
196.32 	(c) For taxable years beginning after December 31, 2006, the exemption amount 
196.33 	under paragraph (a), clause (2), must be adjusted for inflation. The commissioner shall 
196.34 	make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 
196.35 	Code except that for the purposes of this subdivision the percentage increase must be 
197.1 	determined from the year starting September 1, 2005, and ending August 31, 2006, as the 
197.2 	base year for adjusting for inflation for the tax year beginning after December 31, 2006.
197.3 	The commissioner shall adjust the exemption amount by the percentage determined 
197.4 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
197.5 	section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007, 
197.6 	the commissioner shall then determine the percent change from the 12 months ending on 
197.7 	August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent 
197.8 	year, from the 12 months ending on August 31, 2005, to the 12 months ending on August 
197.9 	31 of the year preceding the taxable year. The exemption amount as adjusted must be 
197.10 	rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest 
197.11 	$10 amount. The determination of the commissioner under this subdivision is not a rule 
197.12 	under the Administrative Procedure Act.

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

197.15 	Sec. 16. Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read:
197.16 		Subd. 8.Deposit; definition. (a) "Deposit," as used in subdivision 7 6, paragraph 
197.17 	(n), has the meanings in this subdivision.
197.18 	(b) "Deposit" means the unpaid balance of money or its equivalent received or 
197.19 	held by a financial institution in the usual course of business and for which it has given 
197.20 	or is obligated to give credit, either conditionally or unconditionally, to a commercial, 
197.21 	checking, savings, time, or thrift account whether or not advance notice is required to 
197.22 	withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift 
197.23 	certificate, investment certificate, or certificate of indebtedness, or other similar name, or a 
197.24 	check or draft drawn against a deposit account and certified by the financial institution, 
197.25 	or a letter of credit or a traveler's check on which the financial institution is primarily 
197.26 	liable. However, without limiting the generality of the term "money or its equivalent," any 
197.27 	such account or instrument must be regarded as evidencing the receipt of the equivalent 
197.28 	of money when credited or issued in exchange for checks or drafts or for a promissory 
197.29 	note upon which the person obtaining the credit or instrument is primarily or secondarily 
197.30 	liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other 
197.31 	instruments forwarded to the bank for collection.
197.32 	(c) "Deposit" means trust funds received or held by the financial institution, whether 
197.33 	held in the trust department or held or deposited in any other department of the financial 
197.34 	institution.
198.1 	(d) "Deposit" means money received or held by a financial institution, or the credit 
198.2 	given for money or its equivalent received or held by a financial institution, in the usual 
198.3 	course of business for a special or specific purpose, regardless of the legal relationship so 
198.4 	established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds, 
198.5 	funds held as security for an obligation due to the financial institution or others, including 
198.6 	funds held as dealers reserves, or for securities loaned by the financial institution, funds 
198.7 	deposited by a debtor to meet maturing obligations, funds deposited as advance payment 
198.8 	on subscriptions to United States government securities, funds held for distribution or 
198.9 	purchase of securities, funds held to meet its acceptances or letters of credit, and withheld 
198.10 	taxes. It does not include funds received by the financial institution for immediate 
198.11 	application to the reduction of an indebtedness to the receiving financial institution, or 
198.12 	under condition that the receipt of the funds immediately reduces or extinguishes the 
198.13 	indebtedness.
198.14 	(e) "Deposit" means outstanding drafts, including advice or another such institution, 
198.15 	cashier's checks, money orders, or other officer's checks issued in the usual course 
198.16 	of business for any purpose, but not including those issued in payment for services, 
198.17 	dividends, or purchases or other costs or expenses of the financial institution itself.
198.18 	(f) "Deposit" means money or its equivalent held as a credit balance by a financial 
198.19 	institution on behalf of its customer if the entity is engaged in soliciting and holding such 
198.20 	balances in the regular course of its business.
198.21 	(g) Interinstitution fund transfers are not deposits.

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

198.23 	Sec. 17. Minnesota Statutes 2006, section 290A.03, subdivision 7, is amended to read:
198.24 		Subd. 7.Dependent. "Dependent" means any person who is considered a 
198.25 	dependent under sections 151 and 152 of the Internal Revenue Code. In the case of a son, 
198.26 	stepson, daughter, or stepdaughter of the claimant, amounts received as a Minnesota 
198.27 	family investment program grant, allowance to or on behalf of the child, surplus food, or 
198.28 	other relief in kind supplied by a governmental agency must not be taken into account 
198.29 	in determining whether the child received more than half of the child's support from 
198.30 	the claimant.

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

198.33 	Sec. 18. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:
199.1 		Subdivision 1.Determination. All property includable in the Minnesota gross 
199.2 	estate of a decedent shall be valued in accordance with the provisions of sections 2031 or 
199.3 	2032 and, if applicable, 2032A, of the Internal Revenue Code and any elections made in 
199.4 	valuing the federal gross estate shall be applicable in valuing the Minnesota gross estate. 
199.5 	Values for purposes of the estate tax on both probate and nonprobate assets shall be the 
199.6 	same as those finally determined for purposes of the federal estate tax on a decedent's 
199.7 	estate. Except as otherwise provided in section 291.075, the value of all property 
199.8 	includable in the Minnesota gross estate of a decedent may be independently determined 
199.9 	under those sections for Minnesota estate tax purposes.

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

199.12 	Sec. 19. TRANSITION; POLLUTION CONTROL FACILITIES 
199.13 	AMORTIZATION.
 199.14 	The amount of additions to federal taxable income pursuant to Minnesota Statutes, 
199.15 	section 290.01, subdivision 19c, clause (10), that are properly subtractable pursuant 
199.16 	to Minnesota Statutes, section 290.01, subdivision 19d, clause (8), for taxable years 
199.17 	beginning after December 31, 2006, and have not been subtracted pursuant to Minnesota 
199.18 	Statutes, section 290.01, subdivision 19d, clause (8), are subtractable in the taxpayer's first 
199.19 	taxable year beginning after December 31, 2006.

199.20 	ARTICLE 12
199.21 	DEPARTMENT SALES AND USE TAXES

199.22 	Section 1. Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to 
199.23 	read:
199.24 		Subd. 2.Bad debt loss. If a claim relates to an overpayment because of a failure to 
199.25 	deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered 
199.26 	timely if filed within seven years from the date prescribed for the filing of the return. A 
199.27 	claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2 
199.28 	years from the date prescribed for filing the return, plus any extensions granted for filing 
199.29 	the return, but only if filed within the extended time when the bad debt was (1) written off 
199.30 	as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted 
199.31 	for federal income tax purposes or would have been eligible for a bad debt deduction for 
199.32 	federal income tax purposes if the taxpayer were required to file a federal income tax 
199.33 	return, or within one year from the date the taxpayer's federal income tax return is timely 
200.1 	filed claiming the bad debt deduction, whichever period is later. The refund or credit is 
200.2 	limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes 
200.3 	of this subdivision, has the same meaning as that term is used in United States Code, 
200.4 	title 26, section 166, except that for a claim relating to an overpayment of taxes under 
200.5 	chapter 297A the following are excluded from the calculation of bad debt: financing 
200.6 	charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts 
200.7 	on property that remain in the possession of the seller until the full purchase price is 
200.8 	paid; expenses incurred in attempting to collect any debt; and repossessed property. For 
200.9 	purposes of reporting a payment received on previously claimed bad debt under chapter 
200.10 	297A, any payments made on a debt or account are applied first proportionally to the 
200.11 	taxable price of the property or service and the sales tax on it, and secondly to interest, 
200.12 	service charges, and any other charges.

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

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

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

200.21 	Sec. 3. Minnesota Statutes 2006, section 289A.60, subdivision 25, is amended to read:
200.22 		Subd. 25.Penalty for failure to properly complete sales and use tax return. A 
200.23 	person who fails to report local sales taxtaxes required to be reported on a sales and use 
200.24 	tax return or who fails to report local sales taxtaxes on separate tax lines on the sales 
200.25 	and use tax return is subject to a penalty of five percent of the amount of tax not properly 
200.26 	reported on the return. A person who files a consolidated tax return but fails to report 
200.27 	location information is subject to a $500 penalty for each return not containing location 
200.28 	information. In addition, the commissioner may revoke the privilege for a taxpayer to 
200.29 	file consolidated returns and may require the taxpayer to separately register each location 
200.30 	and to file a tax return for each location.

200.31 	EFFECTIVE DATE. This section is effective for returns filed after June 30, 2007.

201.1 	Sec. 4. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision 
201.2 	to read:
201.3 		Subd. 29.Penalty for failure to report liquor sales. In the case of a failure to file 
201.4 	an informational return required by section 297A.8155 with the commissioner on or before 
201.5 	the date prescribed, the person failing to file the report shall pay a penalty of $500 each 
201.6 	failure. If a failure to file a report is intentional, the penalty shall be $1,000 each failure.

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

201.8 	Sec. 5. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:
201.9 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
201.10 	to, each of the transactions listed in this subdivision.
201.11 	(b) Sale and purchase include:
201.12 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
201.13 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
201.14 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
201.15 	in money or by exchange or barter, tangible personal property, other than a manufactured 
201.16 	home used for residential purposes for a continuous period of 30 days or more.
201.17 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
201.18 	tangible personal property for a consideration for consumers who furnish either directly or 
201.19 	indirectly the materials used in the production, fabrication, printing, or processing.
201.20 	(d) Sale and purchase include the preparing for a consideration of food. 
201.21 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
201.22 	to, the following:
201.23 	(1) prepared food sold by the retailer;
201.24 	(2) soft drinks;
201.25 	(3) candy;
201.26 	(4) dietary supplements; and
201.27 	(5) all food sold through vending machines.
201.28 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
201.29 	gas, water, or steam for use or consumption within this state.
201.30 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
201.31 	computer software whether delivered electronically, by load and leave, or otherwise.
201.32 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
201.33 	services:
202.1 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
202.2 	events, and the making available of amusement devices, tanning facilities, reducing 
202.3 	salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
202.4 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
202.5 	motel, or trailer camp, including furnishing the guest of the facility with access to 
202.6 	telecommunication services, and the granting of any similar license to use real property 
202.7 	in a specific facility, other than the renting or leasing of it for a continuous period of 
202.8 	30 days or more under an enforceable written agreement that may not be terminated 
202.9 	without prior notice;
202.10 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
202.11 	periodic basis, except for parking at a meter;
202.12 	(4) the granting of membership in a club, association, or other organization if:
202.13 	(i) the club, association, or other organization makes available for the use of its 
202.14 	members sports and athletic facilities, without regard to whether a separate charge is 
202.15 	assessed for use of the facilities; and
202.16 	(ii) use of the sports and athletic facility is not made available to the general public 
202.17 	on the same basis as it is made available to members.
202.18 	Granting of membership means both onetime initiation fees and periodic membership 
202.19 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
202.20 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
202.21 	swimming pools; and other similar athletic or sports facilities;
202.22 	(5) delivery of aggregate materials and concrete block by a third party if the delivery 
202.23 	would be subject to the sales tax if provided by the seller of the aggregate material or 
202.24 	concrete block; and
202.25 	(6) services as provided in this clause:
202.26 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
202.27 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
202.28 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
202.29 	include services provided by coin operated facilities operated by the customer;
202.30 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
202.31 	provided by coin operated facilities operated by the customer, and rustproofing, 
202.32 	undercoating, and towing of motor vehicles;
202.33 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
202.34 	pest control and exterminating services;
202.35 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
202.36 	including services performed within the jurisdiction they serve by off-duty licensed peace 
203.1 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
203.2 	organization for monitoring and electronic surveillance of persons placed on in-home 
203.3 	detention pursuant to court order or under the direction of the Minnesota Department 
203.4 	of Corrections;
203.5 	(v) pet grooming services;
203.6 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
203.7 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
203.8 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
203.9 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
203.10 	public utility lines. Services performed under a construction contract for the installation of 
203.11 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
203.12 	(vii) massages, except when provided by a licensed health care facility or 
203.13 	professional or upon written referral from a licensed health care facility or professional for 
203.14 	treatment of illness, injury, or disease; and
203.15 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
203.16 	other similar arrangements, but excluding veterinary and horse boarding services.
203.17 	In applying the provisions of this chapter, the terms "tangible personal property" 
203.18 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
203.19 	and the provision of these taxable services, unless specifically provided otherwise. 
203.20 	Services performed by an employee for an employer are not taxable. Services performed 
203.21 	by a partnership or association for another partnership or association are not taxable if 
203.22 	one of the entities owns or controls more than 80 percent of the voting power of the 
203.23 	equity interest in the other entity. Services performed between members of an affiliated 
203.24 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
203.25 	group of corporations" means those entities that would be classified as members of an 
203.26 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
203.27 	the exclusions in section 1504(b).
203.28 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
203.29 	personal property or taxable services by the United States or any of its agencies or 
203.30 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
203.31 	subdivisions.
203.32 	(i) A sale and a purchase includes the furnishing for a consideration 
203.33 	of telecommunications services, including ancillary services associated with 
203.34 	telecommunication services, cable television services and, direct satellite services, and 
203.35 	ring tones. Telecommunications Telecommunication services include, but are not limited 
203.36 	to, the following services, as defined in section 297A.669: air-to-ground radiotelephone 
204.1 	service, mobile telecommunication service, postpaid calling service, prepaid calling 
204.2 	service, prepaid wireless calling service, and private communication services. The
204.3 	services in this paragraph are taxed to the extent allowed under federal law.
204.4 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
204.5 	the installation charges would be subject to the sales tax if the installation were provided 
204.6 	by the seller of the item being installed.
204.7 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
204.8 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
204.9 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
204.10 	65B.29, subdivision 1, clause (1).

204.11 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
204.12 	June 30, 2007, except that the amendments to paragraphs (g), clause (2), and (i), are 
204.13 	effective for sales and purchases made on or after January 1, 2008.

204.14 	Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 4, is amended to read:
204.15 		Subd. 4.Retail sale. (a) A "retail sale" means any sale, lease, or rental for any 
204.16 	purpose, other than resale, sublease, or subrent of items by the purchaser in the normal 
204.17 	course of business as defined in subdivision 21.
204.18 	(b) A sale of property used by the owner only by leasing it to others or by holding it 
204.19 	in an effort to lease it, and put to no use by the owner other than resale after the lease or 
204.20 	effort to lease, is a sale of property for resale.
204.21 	(c) A sale of master computer software that is purchased and used to make copies for 
204.22 	sale or lease is a sale of property for resale.
204.23 	(d) A sale of building materials, supplies, and equipment to owners, contractors, 
204.24 	subcontractors, or builders for the erection of buildings or the alteration, repair, or 
204.25 	improvement of real property is a retail sale in whatever quantity sold, whether the sale is 
204.26 	for purposes of resale in the form of real property or otherwise.
204.27 	(e) A sale of carpeting, linoleum, or similar floor covering to a person who provides 
204.28 	for installation of the floor covering is a retail sale and not a sale for resale since a sale 
204.29 	of floor covering which includes installation is a contract for the improvement of real 
204.30 	property.
204.31 	(f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides 
204.32 	for installation of the items is a retail sale and not a sale for resale since a sale of 
204.33 	shrubbery, plants, sod, trees, and similar items that includes installation is a contract for 
204.34 	the improvement of real property.
205.1 	(g) A sale of tangible personal property that is awarded as prizes is a retail sale and 
205.2 	is not considered a sale of property for resale.
205.3 	(h) A sale of tangible personal property utilized or employed in the furnishing or 
205.4 	providing of services under subdivision 3, paragraph (g), clause (1), including, but not 
205.5 	limited to, property given as promotional items, is a retail sale and is not considered a 
205.6 	sale of property for resale.
205.7 	(i) A sale of tangible personal property used in conducting lawful gambling under 
205.8 	chapter 349 or the State Lottery under chapter 349A, including, but not limited to, 
205.9 	property given as promotional items, is a retail sale and is not considered a sale of 
205.10 	property for resale.
205.11 	(j) A sale of machines, equipment, or devices that are used to furnish, provide, or 
205.12 	dispense goods or services, including, but not limited to, coin-operated devices, is a retail 
205.13 	sale and is not considered a sale of property for resale.
205.14 	(k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease 
205.15 	payment becomes due under the terms of the agreement or the trade practices of the 
205.16 	lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, 
205.17 	subdivision 5, but excluding vehicles with a manufacturer's gross vehicle weight rating 
205.18 	greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time 
205.19 	the lease is executed.
205.20 	(l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of 
205.21 	title or possession of the tangible personal property.
205.22 	(m) A sale of a bundled transaction in which one or more of the products included 
205.23 	in the bundle is a taxable product is a retail sale, except that if one of the products 
205.24 	is a telecommunication service, ancillary service, Internet access, or audio or video 
205.25 	programming service, and the seller has maintained books and records identifying through 
205.26 	reasonable and verifiable standards the portions of the price that are attributable to the 
205.27 	distinct and separately identifiable products, then the products are not considered part of a 
205.28 	bundled transaction. For purposes of this paragraph:
205.29 	(1) the books and records maintained by the seller must be maintained in the regular 
205.30 	course of business, and do not include books and records created and maintained by the 
205.31 	seller primarily for tax purposes; 
205.32 	(2) books and records maintained in the regular course of business include, but are 
205.33 	not limited to, financial statements, general ledgers, invoicing and billing systems and 
205.34 	reports, and reports for regulatory tariffs and other regulatory matters; and
205.35 	(3) books and records are maintained primarily for tax purposes when the books 
205.36 	and records identify taxable and nontaxable portions of the price, but the seller maintains 
206.1 	other books and records that identify different prices attributable to the distinct products 
206.2 	included in the same bundled transaction.

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

206.5 	Sec. 7. Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read:
206.6 		Subd. 7.Sales price. (a) "Sales price" means the measure subject to sales tax, and 
206.7 	means the total amount of consideration, including cash, credit, personal property, and 
206.8 	services, for which personal property or services are sold, leased, or rented, valued in 
206.9 	money, whether received in money or otherwise, without any deduction for the following:
206.10 	(1) the seller's cost of the property sold;
206.11 	(2) the cost of materials used, labor or service cost, interest, losses, all costs of 
206.12 	transportation to the seller, all taxes imposed on the seller, and any other expenses of 
206.13 	the seller;
206.14 	(3) charges by the seller for any services necessary to complete the sale, other than 
206.15 	delivery and installation charges;
206.16 	(4) delivery charges, except the percentage of the delivery charge allocated to 
206.17 	delivery of tax exempt property, when the delivery charge is allocated by using either (i) a 
206.18 	percentage based on the total sales price of the taxable property compared to the total sales 
206.19 	price of all property in the shipment, or (ii) a percentage based on the total weight of the 
206.20 	taxable property compared to the total weight of all property in the shipment; and
206.21 	(5) installation charges; and.
206.22 	(6) the value of exempt property given to the purchaser when taxable and exempt 
206.23 	personal property have been bundled together and sold by the seller as a single product 
206.24 	or piece of merchandise.
206.25 	(b) Sales price does not include:
206.26 	(1) discounts, including cash, terms, or coupons, that are not reimbursed by a third 
206.27 	party and that are allowed by the seller and taken by a purchaser on a sale;
206.28 	(2) interest, financing, and carrying charges from credit extended on the sale of 
206.29 	personal property or services, if the amount is separately stated on the invoice, bill of sale, 
206.30 	or similar document given to the purchaser; and
206.31 	(3) any taxes legally imposed directly on the consumer that are separately stated on 
206.32 	the invoice, bill of sale, or similar document given to the purchaser.
206.33 	(c) Sales price includes consideration received by the seller from third parties if:
206.34 	(1) the seller actually receives consideration from a party other than the purchaser 
206.35 	and the consideration is directly related to a price reduction or discount on the sale;
207.1 	(2) the seller has an obligation to pass the price reduction or discount through to 
207.2 	the purchaser; 
207.3 	(3) the amount of the consideration attributable to the sale is fixed and determinable 
207.4 	by the seller at the time of the sale of the item to the purchaser; and
207.5 	(4) one of the following criteria is met: 
207.6 	(i) the purchaser presents a coupon, certificate, or other documentation to the seller 
207.7 	to claim a price reduction or discount when the coupon, certificate, or documentation is 
207.8 	authorized, distributed, or granted by a third party with the understanding that the third 
207.9 	party will reimburse any seller to whom the coupon, certificate, or documentation is 
207.10 	presented; 
207.11 	(ii) the purchaser identifies himself or herself to the seller as a member of a group or 
207.12 	organization entitled to a price reduction or discount. A "preferred customer" card that is 
207.13 	available to any customer does not constitute membership in such a group; or 
207.14 	(iii) the price reduction or discount is identified as a third-party price reduction or 
207.15 	discount on the invoice received by the purchaser or on a coupon, certificate, or other 
207.16 	documentation presented by the purchaser.

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

207.20 	Sec. 8. Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read:
207.21 		Subd. 10.Tangible personal property. (a) "Tangible personal property" means 
207.22 	personal property that can be seen, weighed, measured, felt, or touched, or that is in any 
207.23 	other manner perceptible to the senses. "Tangible personal property" includes, but is not 
207.24 	limited to, electricity, water, gas, steam, and prewritten computer software, and prepaid 
207.25 	calling cards.
207.26 	(b) Tangible personal property does not include:
207.27 	(1) large ponderous machinery and equipment used in a business or production 
207.28 	activity which at common law would be considered to be real property;
207.29 	(2) property which is subject to an ad valorem property tax;
207.30 	(3) property described in section 272.02, subdivision 9, clauses (a) to (d); and 
207.31 	(4) property described in section 272.03, subdivision 2, clauses (3) and (5). 

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

208.1 	Sec. 9. Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read:
208.2 		Subd. 24.Telecommunications services. (a) "Telecommunications services" means 
208.3 	the electronic transmission, conveyance, or routing of voice, data, audio, video, or any 
208.4 	other information or signals to a point, or between or among points, by or through any 
208.5 	electronic, satellite, optical, microwave, or other medium or method now in existence or 
208.6 	hereafter devised, regardless of the protocol used for such transmission, conveyance, 
208.7 	or routing.
208.8 	(b) Telecommunications services includes the furnishing for consideration of access 
208.9 	to telephone services by a hotel to its guests. include transmission, conveyance, or routing 
208.10 	in which computer processing applications are used to act on the form, code, or protocol 
208.11 	of the content for purposes of transmission, conveyance, or routing, without regard to 
208.12 	whether the service is referred to as voice over Internet protocol services or is classified by 
208.13 	the Federal Communications Commission as enhanced or value added.
208.14 	(c) Telecommunications services do not include:
208.15 	(1) services purchased with a prepaid telephone calling card;
208.16 	(2) private communication service purchased by an agent acting on behalf of the 
208.17 	State Lottery;
208.18 	(3) information services; and
208.19 	(4) purchases of telecommunications when the purchaser uses the purchased services 
208.20 	as a component part of or integrates such service into another telecommunications service 
208.21 	that is sold by the purchaser in the normal course of business.
208.22 	(d) For purposes of this subdivision, "information services" means the offering of 
208.23 	the capability for generating, acquiring, storing, transforming, processing, retrieving, 
208.24 	utilizing, or making available information.
208.25 	(1) data processing and information services that allow data to be generated, 
208.26 	acquired, stored, processed, or retrieved and delivered by an electronic transmission to 
208.27 	a purchaser when the purchaser's primary purpose for the underlying transaction is the 
208.28 	processed data or information;
208.29 	(2) installation or maintenance of wiring or equipment on a customer's premises;
208.30 	(3) tangible personal property;
208.31 	(4) advertising, including, but not limited to, directory advertising;
208.32 	(5) billing and collection services provided to third parties;
208.33 	(6) Internet access service;
208.34 	(7) radio and television audio and video programming services, regardless of the 
208.35 	medium, including the furnishing of transmission, conveyance, and routing of such 
208.36 	services by the programming service provider. Radio and television audio and video 
209.1 	programming services includes, but is not limited to, cable service as defined in United 
209.2 	States Code, title 47, section 522(6), and audio and video programming services delivered 
209.3 	by commercial mobile radio service providers, as defined in Code of Federal Regulations, 
209.4 	title 47, section 20.3;
209.5 	(8) ancillary services; or
209.6 	(9) digital products delivered electronically, including, but not limited to, software, 
209.7 	music, video, reading materials, or ring tones.

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

209.10 	Sec. 10. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
209.11 	subdivision to read:
209.12 		Subd. 38.Bundled transaction. (a) "Bundled transaction" means the retail sale 
209.13 	of two or more products when the products are otherwise distinct and identifiable, and 
209.14 	the products are sold for one nonitemized price. As used in this subdivision, "product" 
209.15 	includes tangible personal property, services, intangibles, and digital goods, but does not 
209.16 	include real property or services to real property. A bundled transaction does not include 
209.17 	the sale of any products in which the sales price varies, or is negotiable, based on the 
209.18 	selection by the purchaser of the products included in the transaction.
209.19 	(b) For purposes of this subdivision, "distinct and identifiable" products does not 
209.20 	include:
209.21 	(1) packaging and other materials, such as containers, boxes, sacks, bags, and 
209.22 	bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the 
209.23 	products and are incidental or immaterial to the retail sale. Examples of packaging that are 
209.24 	incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags, 
209.25 	and express delivery envelopes and boxes;
209.26 	(2) a promotional product provided free of charge with the required purchase of 
209.27 	another product. A promotional product is provided free of charge if the sales price of 
209.28 	another product, which is required to be purchased in order to receive the promotional 
209.29 	product, does not vary depending on the inclusion of the promotional product; and 
209.30 	(3) items included in the definition of sales price.
209.31 	(c) For purposes of this subdivision, the term "one nonitemized price" does not 
209.32 	include a price that is separately identified by product on binding sales or other supporting 
209.33 	sales-related documentation made available to the customer in paper or electronic form 
209.34 	including, but not limited to an invoice, bill of sale, receipt, contract, service agreement, 
209.35 	lease agreement, periodic notice of rates and services, rate card, or price list.
210.1 	(d) A transaction that otherwise meets the definition of a bundled transaction is 
210.2 	not a bundled transaction if it is: 
210.3 	(1) the retail sale of tangible personal property and a service and the tangible 
210.4 	personal property is essential to the use of the service, and is provided exclusively in 
210.5 	connection with the service, and the true object of the transaction is the service; 
210.6 	(2) the retail sale of services if one service is provided that is essential to the use or 
210.7 	receipt of a second service and the first service is provided exclusively in connection with 
210.8 	the second service and the true object of the transaction is the second service; 
210.9 	(3) a transaction that includes taxable products and nontaxable products and the 
210.10 	purchase price or sales price of the taxable products is de minimis; or 
210.11 	(4) the retail sale of exempt tangible personal property and taxable tangible personal 
210.12 	property if:
210.13 	(i) the transaction includes food and food ingredients, drugs, durable medical 
210.14 	equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices, 
210.15 	or medical supplies; and
210.16 	(ii) the seller's purchase price or sales price of the taxable tangible personal property 
210.17 	is 50 percent or less of the total purchase price or sales price of the bundled tangible 
210.18 	personal property. Sellers must not use a combination of the purchase price and sales 
210.19 	price of the tangible personal property when making the 50 percent determination for 
210.20 	a transaction.
210.21 	(e) For purposes of this subdivision, "purchase price" means the measure subject to 
210.22 	use tax on purchases made by the seller, and "de minimis" means that the seller's purchase 
210.23 	price or sales price of the taxable products is ten percent or less of the total purchase 
210.24 	price or sales price of the bundled products. Sellers shall use either the purchase price 
210.25 	or the sales price of the products to determine if the taxable products are de minimis. 
210.26 	Sellers must not use a combination of the purchase price and sales price of the products 
210.27 	to determine if the taxable products are de minimis. Sellers shall use the full term of a 
210.28 	service contract to determine if the taxable products are de minimis.

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

210.31 	Sec. 11. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
210.32 	subdivision to read:
210.33 		Subd. 39.Ancillary services. "Ancillary services" means services that are 
210.34 	associated with or incidental to the provision of telecommunications services, including, 
211.1 	but not limited to, conference bridging service, detailed telecommunications billing, 
211.2 	directory assistance, vertical service, and voice mail services.

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

211.5 	Sec. 12. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
211.6 	subdivision to read:
211.7 		Subd. 40.Conference bridging service. "Conference bridging service" means an 
211.8 	ancillary service that links two or more participants of an audio or video conference call 
211.9 	and may include the provision of a telephone number. Conference bridging service does 
211.10 	not include the telecommunications services used to reach the conference bridge.

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

211.13 	Sec. 13. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
211.14 	subdivision to read:
211.15 		Subd. 41.Detailed telecommunications billing service. "Detailed 
211.16 	telecommunications billing service" means an ancillary service of separately stating 
211.17 	information pertaining to individual calls on a customer's billing statement.

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

211.20 	Sec. 14. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
211.21 	subdivision to read:
211.22 		Subd. 42.Directory assistance. "Directory assistance" means an ancillary service 
211.23 	of providing telephone number information or address information, or both.

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

211.26 	Sec. 15. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
211.27 	subdivision to read:
211.28 		Subd. 43.Vertical service. "Vertical service" means an ancillary service that is 
211.29 	offered in connection with one or more telecommunications services and which offers 
212.1 	advanced calling features that allow customers to identify callers and to manage multiple 
212.2 	calls and call connections, including conference bridging services.

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

212.5 	Sec. 16. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
212.6 	subdivision to read:
212.7 		Subd. 44.Voice mail service. "Voice mail service" means an ancillary service that 
212.8 	enables the customer to store, send, or receive recorded messages. Voice mail service 
212.9 	does not include any vertical services that the customer may be required to have in order 
212.10 	to utilize the voice mail service.

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

212.13 	Sec. 17. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
212.14 	subdivision to read:
212.15 		Subd. 45.Ring tone. "Ring tone" means a digitized sound file that is downloaded 
212.16 	onto a device and that may be used to alert the customer of a telecommunication service 
212.17 	with respect to a communication.

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

212.19 	Sec. 18. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
212.20 	subdivision to read:
212.21 		Subd. 46.Fur clothing. "Fur clothing" means human wearing apparel that is 
212.22 	required by the Federal Fur Products Labeling Act, United States Code, title 15, section 
212.23 	69, to be labeled as a fur product, and the value of the fur components in the product 
212.24 	is more than three times the value of the next most valuable tangible component. For 
212.25 	purposes of this subdivision, "fur" means any animal skin or part of an animal skin with 
212.26 	hair, fleece, or fur fibers attached to it, either in its raw or processed state, but does not 
212.27 	include animal skins that have been converted into leather or suede, or from which the 
212.28 	hair, fleece, or fur fiber has been completely removed in processing the skins.

212.29 	EFFECTIVE DATE. This section is effective for sales and purchases made on or 
212.30 	after July 1, 2007.

213.1 	Sec. 19. Minnesota Statutes 2006, section 297A.63, subdivision 1, is amended to read:
213.2 		Subdivision 1.Use of tangible personal property or taxable services. (a) For the 
213.3 	privilege of using, storing, distributing, or consuming in Minnesota tangible personal 
213.4 	property or taxable services purchased for use, storage, distribution, or consumption in 
213.5 	this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the 
213.6 	purchase price of retail sales of the tangible personal property or taxable services at the 
213.7 	rate of tax imposed under section 297A.62. A person that purchases property from a 
213.8 	Minnesota retailer and returns the tangible personal property to a point within Minnesota, 
213.9 	except in the course of interstate commerce, after it was delivered outside of Minnesota, 
213.10 	is subject to the use tax. 
213.11 	(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
213.12 	was paid on the sales price of the tangible personal property or taxable services. 
213.13 	(c) No tax is imposed under paragraph (a) if the purchase meets the requirements for 
213.14 	exemption under section 297A.67, subdivision 21. 
213.15 	(d) When a transaction otherwise meets the definition of a bundled transaction, but 
213.16 	is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and 
213.17 	the seller's purchase price of the taxable product or taxable tangible personal property is 
213.18 	equal to or greater than $100, then use tax is imposed on the purchase price of the taxable 
213.19 	product or taxable personal property. For purposes of this paragraph, "purchase price" 
213.20 	means the measure subject to use tax on purchases made by the seller.

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

213.23 	Sec. 20. Minnesota Statutes 2006, section 297A.665, is amended to read:
213.24 	297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
213.25 	(a) For the purpose of the proper administration of this chapter and to prevent 
213.26 	evasion of the tax, until the contrary is established, it is presumed that:
213.27 	(1) all gross receipts are subject to the tax; and
213.28 	(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 
213.29 	in Minnesota.
213.30 	(b) The burden of proving that a sale is not a taxable retail sale is on the seller. 
213.31 	However, the seller may take from the purchaser at the time of the sale a fully completed 
213.32 	exemption certificate which conclusively relieves the seller from collecting and remitting 
213.33 	the tax. This However, a seller is relieved of liability if:
214.1 	(1) the seller obtains a fully completed exemption certificate or all the relevant 
214.2 	information required by section 297A.72, subdivision 2, at the time of the sale or within 
214.3 	90 days after the date of the sale; or
214.4 	(2) if the seller has not obtained a fully completed exemption certificate or all the 
214.5 	relevant information required by section 297A.72, subdivision 2, within the time provided 
214.6 	in clause (1), within 120 days after a request for substantiation by the commissioner, 
214.7 	the seller either:
214.8 	(i) obtains in good faith a fully completed exemption certificate or all the relevant 
214.9 	information required by section 297A.72, subdivision 2, from the purchaser; or
214.10 	(ii) proves by other means that the transaction was not subject to tax.
214.11 	(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
214.12 	(1) fraudulently fails to collect the tax; or 
214.13 	(2) solicits purchasers to participate in the unlawful claim of an exemption. If a 
214.14 	seller claiming that certain sales are exempt is not in possession of the required exemption 
214.15 	certificates within 60 days after receiving written notice from the commissioner that the 
214.16 	certificates are required, deductions claimed by the seller that required delivery of the 
214.17 	certificates must be disallowed. If the certificates are delivered to the commissioner within 
214.18 	the 60-day period, the commissioner may verify the reason or basis for the exemption 
214.19 	claimed in the certificates before allowing any deductions. A deduction must not be 
214.20 	granted on the basis of certificates delivered to the commissioner after the 60-day period.
214.21 	(c) (d) A purchaser of tangible personal property or any items listed in section 
214.22 	297A.63 that are shipped or brought to Minnesota by the purchaser has the burden 
214.23 	of proving that the property was not purchased from a retailer for storage, use, or 
214.24 	consumption in Minnesota. 

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

214.27 	Sec. 21. Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read:
214.28 		Subd. 3.Defined telecommunications services sourcing. The sale of the following 
214.29 	telecommunication services shall be sourced to each level of taxing jurisdiction in 
214.30 	paragraphs (a) to (d).
214.31 	(a) A sale of mobile telecommunications services, other than air-to-ground 
214.32 	radiotelephone service and prepaid calling service, is sourced to the customer's place of 
214.33 	primary use as required by the Mobile Telecommunications Sourcing Act.
214.34 	(b) A sale of postpaid calling service is sourced to the origination point of the 
214.35 	telecommunications signal as first identified by either:
215.1 	(1) the seller's telecommunications system; or
215.2 	(2) information received by the seller from its service provider, where the system 
215.3 	used to transport such signals is not that of the seller.
215.4 	(c) A sale of prepaid calling service or prepaid wireless calling service is sourced in 
215.5 	accordance with section 297A.668, subdivision 2. However, in the case of a sale of mobile 
215.6 	telecommunications service that is a prepaid telecommunicationswireless calling service, 
215.7 	the rule provided in section 297A.668, subdivision 2, paragraph (f), shall include as an 
215.8 	option the location associated with the mobile telephone number. 
215.9 	(d) A sale of a private communication service is sourced as follows:
215.10 	(1) service for a separate charge related to a customer channel termination point is 
215.11 	sourced to each level of jurisdiction in which the customer channel termination point 
215.12 	is located;
215.13 	(2) service where all customer termination points are located entirely within one 
215.14 	jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer 
215.15 	channel termination points are located;
215.16 	(3) service for segments of a channel between two customer channel termination 
215.17 	points located in different jurisdictions and which segment of channel are separately 
215.18 	charged is sourced 50 percent in each level of jurisdiction in which the customer channel 
215.19 	termination points are located; and
215.20 	(4) service for segments of a channel located in more than one jurisdiction or 
215.21 	levels of jurisdiction and which segments are not separately billed is sourced in each 
215.22 	jurisdiction based on the percentage determined by dividing the number of customer 
215.23 	channel termination points in the jurisdiction by the total number of customer channel 
215.24 	termination points.

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

215.27 	Sec. 22. Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to 
215.28 	read:
215.29 		Subd. 13.Postpaid calling service. "Postpaid calling service," for purposes of 
215.30 	this section, means the telecommunications service obtained by making a payment 
215.31 	on a call-by-call basis either through the use of a credit card or payment mechanism 
215.32 	such as a bank card, travel card, credit card, or debit card, or by a charge made to 
215.33 	a telephone number that is not associated with the origination or termination of the 
215.34 	telecommunications service. A postpaid calling service includes a telecommunications 
216.1 	service, except a prepaid wireless calling service, that would be a prepaid calling service 
216.2 	except it is not exclusively a telecommunication service.

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

216.5 	Sec. 23. Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to 
216.6 	read:
216.7 		Subd. 14.Prepaid calling service. "Prepaid calling service," for purposes of this 
216.8 	section, means a telecommunications service that:
216.9 	(1) provides the right to access exclusively telecommunications services, which;
216.10 	(2) must be paid for in advance and which;
216.11 	(3) enables the origination of calls using an access number or authorization code, 
216.12 	whether manually or electronically dialed,; and that
216.13 	(4) is sold in predetermined units or dollars of which the number declines with 
216.14 	use in a known amount.

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

216.16 	Sec. 24. Minnesota Statutes 2006, section 297A.669, is amended by adding a 
216.17 	subdivision to read:
216.18 		Subd. 14a.Prepaid wireless calling service. "Prepaid wireless calling service," for 
216.19 	purposes of this section, means a telecommunications service that: 
216.20 	(1) provides the right to utilize mobile wireless service as well as other 
216.21 	nontelecommunications services, including the download of digital products delivered 
216.22 	electronically, content, and ancillary services; 
216.23 	(2) must be paid for in advance; and 
216.24 	(3) is sold in predetermined units or dollars of which the number declines with 
216.25 	use in a known amount.

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

216.28 	Sec. 25. Minnesota Statutes 2006, section 297A.669, is amended by adding a 
216.29 	subdivision to read:
216.30 		Subd. 17.Ancillary service. The sale of an ancillary service is sourced to the 
216.31 	customer's place of primary use.

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

217.3 	Sec. 26. Minnesota Statutes 2006, section 297A.67, subdivision 8, is amended to read:
217.4 		Subd. 8.Clothing. (a) Clothing is exempt. For purposes of this subdivision, 
217.5 	"clothing" means all human wearing apparel suitable for general use.
217.6 	(b) Clothing includes, but is not limited to, aprons, household and shop; athletic 
217.7 	supporters; baby receiving blankets; bathing suits and caps; beach capes and coats; belts 
217.8 	and suspenders; boots; coats and jackets; costumes; children and adult diapers, including 
217.9 	disposable; ear muffs; footlets; formal wear; garters and garter belts; girdles; gloves and 
217.10 	mittens for general use; hats and caps; hosiery; insoles for shoes; lab coats; neckties; 
217.11 	overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes and shoe laces; 
217.12 	slippers; sneakers; socks and stockings; steel-toed boots; underwear; uniforms, athletic 
217.13 	and nonathletic; and wedding apparel.
217.14 	(c) Clothing does not include the following:
217.15 	(1) belt buckles sold separately;
217.16 	(2) costume masks sold separately;
217.17 	(3) patches and emblems sold separately;
217.18 	(4) sewing equipment and supplies, including but not limited to, knitting needles, 
217.19 	patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles;
217.20 	(5) sewing materials that become part of clothing, including but not limited to, 
217.21 	buttons, fabric, lace, thread, yarn, and zippers;
217.22 	(6) clothing accessories or equipment;
217.23 	(7) sports or recreational equipment; and
217.24 	(8) protective equipment.
217.25 	Clothing also does not include apparel made from fur if a uniform definition of "apparel 
217.26 	made from fur" is developed by the member states of the Streamlined Sales and Use Tax 
217.27 	Agreement "fur clothing" as defined in section 297A.61, subdivision 46.
217.28 	For purposes of this subdivision, "clothing accessories or equipment" means 
217.29 	incidental items worn on the person or in conjunction with clothing. Clothing accessories 
217.30 	and equipment include, but are not limited to, briefcases; cosmetics; hair notions, including 
217.31 	barrettes, hair bows, and hairnets; handbags; handkerchiefs; jewelry; nonprescription 
217.32 	sunglasses; umbrellas; wallets; watches; and wigs and hairpieces. "Sports or recreational 
217.33 	equipment" means items designed for human use and worn in conjunction with an athletic 
217.34 	or recreational activity that are not suitable for general use. Sports and recreational 
217.35 	equipment includes, but is not limited to, ballet and tap shoes; cleated or spiked athletic 
218.1 	shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf 
218.2 	gloves; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller 
218.3 	and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins. 
218.4 	"Protective equipment" means items for human wear and designed as protection of the 
218.5 	wearer against injury or disease or as protection against damage or injury of other persons 
218.6 	or property but not suitable for general use. Protective equipment includes, but is not 
218.7 	limited to, breathing masks; clean room apparel and equipment; ear and hearing protectors; 
218.8 	face shields; finger guards; hard hats; helmets; paint or dust respirators; protective gloves; 
218.9 	safety glasses and goggles; safety belts; tool belts; and welders gloves and masks.

218.10 	EFFECTIVE DATE. This section is effective for sales and purchases made on or 
218.11 	after July 1, 2007.

218.12 	Sec. 27. Minnesota Statutes 2006, section 297A.67, subdivision 9, is amended to read:
218.13 		Subd. 9.Baby products. Breast pumps, baby bottles and nipples, pacifiers, teething 
218.14 	rings, and infant syringes are exempt.

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

218.17 	Sec. 28. Minnesota Statutes 2006, section 297A.68, subdivision 11, is amended to read:
218.18 		Subd. 11.Advertising materials. Materials designed to advertise and promote the 
218.19 	sale of merchandise or services are exempt if these materials are mailed or transferred to a 
218.20 	person outside the state for use solely outside the state. Mailing and reply envelopes and 
218.21 	cards and other shipping materials including, but not limited to, boxes, labels, containers, 
218.22 	and banding, used exclusively in connection with these advertising and promotional 
218.23 	materials are included in this exemption. The exemption applies regardless of where the 
218.24 	mailing occurs. The storage of these materials in the state for the purpose of subsequently 
218.25 	shipping or otherwise transferring the material out of state is also exempt if the other 
218.26 	conditions in this subdivision are met. For purposes of this subdivision, materials that have 
218.27 	a primary purpose other than advertising, such as fulfilling a legal obligation or furnishing 
218.28 	nonadvertising information, are not materials designed to advertise and promote the sale 
218.29 	of merchandise or services even if they do include advertising content.

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

218.31 	Sec. 29. Minnesota Statutes 2006, section 297A.68, subdivision 16, is amended to read:
219.1 		Subd. 16.Packing materials. Packing materials used to pack and ship household 
219.2 	goods and that are provided to and remain with the customer of a for-hire carrier are 
219.3 	exempt if the ultimate destination of the goods is outside Minnesota and if the goods
219.4 	packing materials are not later returned to a point within Minnesota, except in the course 
219.5 	of interstate commerce. This exemption does not apply to tools, equipment, pads, or 
219.6 	accessories owned or leased by the for-hire carrier.

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

219.9 	Sec. 30. Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read:
219.10 		Subd. 35.Telecommunications, cable television, and direct satellite  equipment.
 219.11 	(a) Telecommunications, cable television, or direct satellite  machinery and equipment 
219.12 	purchased or leased for use directly by a telecommunications, cable television, or 
219.13 	direct satellite  service provider primarily in the provision of telecommunications, cable 
219.14 	television, or direct satellite  services that are ultimately to be sold at retail are exempt, 
219.15 	regardless of whether purchased by the owner, a contractor, or a subcontractor.
219.16 	(b) For purposes of this subdivision, "telecommunications, cable television, or direct 
219.17 	satellite machinery and equipment" includes, but is not limited to:
219.18 	(1) machinery, equipment, and fixtures utilized in receiving, initiating, 
219.19 	amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring 
219.20 	telecommunications, cable television, or direct satellite services, such as computers, 
219.21 	transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items 
219.22 	performing comparable functions;
219.23 	(2) machinery, equipment, and fixtures used in the transportation of 
219.24 	telecommunications, cable television, or direct satellite services, radio transmitters and 
219.25 	receivers, satellite equipment, microwave equipment, and other transporting media, but 
219.26 	not wire, cable, fiber, poles, or conduit;
219.27 	(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or 
219.28 	enable the machinery in clauses (1) and (2) to accomplish its intended function, such as 
219.29 	auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning 
219.30 	equipment necessary to the operation of the telecommunications, cable television, or direct 
219.31 	satellite  equipment; and software necessary to the operation of the telecommunications, 
219.32 	cable television, or direct satellite equipment; and
219.33 	(4) repair and replacement parts, including accessories, whether purchased as spare 
219.34 	parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
220.1 	(c) For purposes of this subdivision, "telecommunications services" means 
220.2 	telecommunications services as defined in section 297A.61, subdivision 24, paragraphs 
220.3 	(a), (c), and (d).

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

220.6 	Sec. 31. Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read:
220.7 		Subd. 7.Hospitals and outpatient surgical centers. (a) Sales, except for those 
220.8 	listed in paragraph (c), to a hospital are exempt, if the items purchased are used in 
220.9 	providing hospital services. For purposes of this subdivision, "hospital" means a hospital 
220.10 	organized and operated for charitable purposes within the meaning of section 501(c)(3) of 
220.11 	the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction, 
220.12 	and "hospital services" are services authorized or required to be performed by a "hospital" 
220.13 	under chapter 144.
220.14 	(b) Sales, except for those listed in paragraph (c), to an outpatient surgical center 
220.15 	are exempt, if the items purchased are used in providing outpatient surgical services. For 
220.16 	purposes of this subdivision, "outpatient surgical center" means an outpatient surgical 
220.17 	center organized and operated for charitable purposes within the meaning of section 
220.18 	501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other 
220.19 	jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means: 
220.20 	(1) services authorized or required to be performed by an outpatient surgical center under 
220.21 	chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means 
220.22 	health services furnished to a person whose medical condition is sufficiently acute to 
220.23 	require treatment unavailable through, or inappropriate to be provided by, a clinic or 
220.24 	physician's office, but not so acute as to require treatment in a hospital emergency room.
220.25 	(c) This exemption does not apply to the following products and services:
220.26 	(1) purchases made by a clinic, physician's office, or any other medical facility not 
220.27 	operating as a hospital or outpatient surgical center, even though the clinic, office, or 
220.28 	facility may be owned and operated by a hospital or outpatient surgical center;
220.29 	(2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and 
220.30 	prepared food, candy, and soft drinks; 
220.31 	(3) building and construction materials used in constructing buildings or facilities 
220.32 	that will not be used principally by the hospital or outpatient surgical center;
220.33 	(4) building, construction, or reconstruction materials purchased by a contractor 
220.34 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
221.1 	guaranteed maximum price covering both labor and materials for use in the construction, 
221.2 	alteration, or repair of a hospital or outpatient surgical center; or
221.3 	(5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5. 
221.4 	(d) A limited liability company also qualifies for exemption under this subdivision if 
221.5 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
221.6 	purchased qualify for the exemption.
221.7 	(e) An entity that contains both a hospital and a nonprofit unit may claim this 
221.8 	exemption on purchases made for both the hospital and nonprofit unit provided that:
221.9 	(1) the nonprofit unit would have qualified for exemption under subdivision 4; and
221.10 	(2) the items purchased would have qualified for the exemption.

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

221.12 	Sec. 32. Minnesota Statutes 2006, section 297A.70, is amended by adding a 
221.13 	subdivision to read:
221.14 		Subd. 17.Private communication service for State Lottery. Private 
221.15 	communication service, as defined in section 297A.61, subdivision 26, is exempt if the 
221.16 	service is purchased by an agent acting on behalf of the State Lottery.

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

221.19 	Sec. 33. Minnesota Statutes 2006, section 297A.72, is amended to read:
221.20 	297A.72 EXEMPTION CERTIFICATES.
221.21 		Subd. 2.Content and form of exemption certificate. An exemption certificate 
221.22 	must be substantially in the form prescribed by the commissioner and. To be fully 
221.23 	completed, the exemption certificate must:
221.24 	(1) either be signed by the purchaser if it is a paper form, or meet the requirements 
221.25 	of section 270C.304 if in electronic form;
221.26 	(2) bear the name and address of the purchaser; and
221.27 	(3) indicate the sales tax account identification number, if any, issued to the 
221.28 	purchaser. as follows:
221.29 	(i) the purchaser's Minnesota tax identification number;
221.30 	(ii) if the purchaser does not have a Minnesota tax identification number, then the 
221.31 	purchaser's state tax identification number that is issued by a state other than Minnesota, 
221.32 	and the name of that state;
222.1 	(iii) if the purchaser does not have an identification number described in either item 
222.2 	(i) or (ii), then the purchaser's federal Employer Identification Number; or
222.3 	(iv) if the purchaser does not have an identification number described in item (i), (ii), 
222.4 	or (iii), then either the number of the purchaser's state-issued driver's license, if valid in 
222.5 	the state of issue, or if the purchaser does not have a driver's license, a valid state-issued 
222.6 	identification number, and the name of the state of issue;
222.7 	(4) indicate the purchaser's type of business, using a business-type coding system 
222.8 	prescribed by the commissioner; and
222.9 	(5) indicate the reason for the exemption, using an exemption reason coding system 
222.10 	prescribed by the commissioner.
222.11 		Subd. 3.Purchaser requirement. A blanket exemption certificate is an exemption 
222.12 	certificate used for continuing future purchases. A purchaser using a blanket exemption 
222.13 	certificate must update it as needed to accurately reflect the information that is required 
222.14 	under subdivision 2.

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

222.16 	Sec. 34. [297A.8155] LIQUOR REPORTING REQUIREMENTS; PENALTY.
222.17 	A person who sells liquor, as defined in section 295.75, subdivision 1, in Minnesota 
222.18 	to a retailer that sells liquor, shall file with the commissioner an annual informational 
222.19 	report, in the form and manner prescribed by the commissioner, indicating the volume of 
222.20 	liquor sold to each retailer in the previous calendar year. The report must be filed on or 
222.21 	before February 28 of each calendar year beginning in 2008. A person failing to file this 
222.22 	report is subject to the penalty imposed under Minnesota Statutes, section 289A.60.

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

222.24 	Sec. 35. Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read:
222.25 		Subd. 2.Payment of tax. (a) Persons who are registered as retailers may make 
222.26 	purchases in this state or import property into this state without payment of the sales or use 
222.27 	taxes imposed by this chapter at the time of purchase or importation, if the purchases or 
222.28 	importations come within the provisions of this section and are made in strict compliance 
222.29 	with the rules of the commissioner.
222.30 	(b) A person described in subdivision 1 may elect to pay directly to the commissioner 
222.31 	any sales or use tax that may be due under this chapter for the acquisition of mobile 
222.32 	transportation equipment and parts and accessories attached or to be attached to such 
222.33 	equipment registered under section 168.187. 
223.1 	(c) The total cost of such equipment and parts and accessories attached or to be 
223.2 	attached to such equipment must be multiplied by a fraction. The numerator of the fraction 
223.3 	is the Minnesota mileage as reported on the current pro rata application provided for in 
223.4 	section 168.187 and the denominator of the fraction is the total mileage reported on the 
223.5 	current pro rata registration application. The amount so determined must be multiplied by 
223.6 	the tax rate to obtain the tax due. 
223.7 	In computing the tax under this section "sales price" does not include the amount of any 
223.8 	tax, except any manufacturer's or importer's excise tax, imposed by the United States 
223.9 	upon or with respect to retail sales, whethertaxes imposed directly on the retailer or the
223.10 	consumer that are separately stated on the invoice, bill of sale, or similar document given 
223.11 	to the purchaser.
223.12 	(d) A retailer covered by this section shall make a return and remit to the 
223.13 	commissioner the tax due for the preceding calendar month in accordance with sections 
223.14 	289A.11 and 289A.20, subdivision 4. 

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

223.16 	Sec. 36. Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read:
223.17 		Subdivision 1.Ordinary course of business. Except as provided in this section, 
223.18 	motor vehicles purchased solely for resale in the ordinary course of business by any motor 
223.19 	vehicle dealer, as defined in section 168.011, subdivision 21, who is licensed under section 
223.20 	168.27, subdivision 2 or 3, including vehicles which bear dealer plates as authorized by 
223.21 	section 168.27, subdivision 16, shall be exempt from the provisions of this chapter. 

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

223.23 	Sec. 37. Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read:
223.24 		Subd. 6.Sales tax exemption; equipment; construction materials. (a) The gross 
223.25 	receipts from the sale of machinery and equipment and repair parts are exempt from 
223.26 	taxation under chapter 297A, if the machinery and equipment:
223.27 	(1) are used in connection with a trade or business;
223.28 	(2) are placed in service in a city that is authorized to designate a zone under section 
223.29 	469.1731, regardless of whether the machinery and equipment are used in a zone; and
223.30 	(3) have a useful life of 12 months or more.
223.31 	(b) The gross receipts from the sale of construction materials are exempt, if they are 
223.32 	used to construct:
224.1 	(1) a facility for use in a trade or business located in a city that is authorized to 
224.2 	designate a zone under section 469.1731, regardless of whether the facility is located in a 
224.3 	zone; or
224.4 	(2) housing that is located in a zone.
224.5 	The exemptions under this paragraph apply regardless of whether the purchase is made by 
224.6 	the owner, the user, or a contractor.
224.7 	(c) A purchaser may claim an exemption under this subdivision for tax on the 
224.8 	purchases up to, but not exceeding:
224.9 	(1) the amount of the tax credit certificates received from the city, less
224.10 	(2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and 
224.11 	section 469.1732, subdivision 2.
224.12 	(d) The tax on sales of items exempted under this subdivision shall be imposed and 
224.13 	collected as if the applicable rate under section 297A.62 applied. Upon application by the 
224.14 	purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall 
224.15 	be paid to the purchaser. The application must include sufficient information to permit 
224.16 	the commissioner to verify the sales tax paid and the eligibility of the claimant to receive 
224.17 	the credit. No more than two applications for refunds may be filed under this subdivision 
224.18 	in a calendar year. The provisions of section 289A.40 apply to the refunds payable 
224.19 	under this subdivision. There is annually appropriated to the commissioner of revenue 
224.20 	the amount required to make the refunds, which must be deducted from the amount of 
224.21 	the city's allocation under section 469.169, subdivision 12, that remains available and its 
224.22 	limitation under section 469.1735. 
224.23 	(e) The amount to be refunded shall bear interest at the rate in section 270C.405
224.24 	from the date90 days after the refund claim is filed with the commissioner.

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

224.27 	Sec. 38. FUR TAX PAYMENTS.
 224.28 	(a) Furriers must file the annual return, required by Minnesota Statutes, section 
224.29 	295.60, subdivision 5, which otherwise would be due March 15, 2008, by September 
224.30 	15, 2007.
224.31 	(b) If a furrier is required by Minnesota Statutes, section 295.60, subdivision 3, to 
224.32 	make installments of quarterly estimates, then the furrier shall make the last installment by 
224.33 	July 15, 2007.

225.1 	EFFECTIVE DATE. Effective July 1, 2007, for sales and purchases made prior to 
225.2 	July 1, 2007.

225.3 	Sec. 39.  REPEALER.
 225.4 	(a) Minnesota Statutes 2006, section 295.60, is repealed.
225.5 	(b) Minnesota Statutes 2006, section 297A.61, subdivision 20, is repealed.
225.6 	(c) Minnesota Statutes 2006, section 297A.668, subdivision 6, is repealed.
225.7 	(d) Minnesota Statutes 2006, section 297A.67, subdivision 22, is repealed.

225.8 	EFFECTIVE DATE. Paragraph (a) is effective for sales and purchases made on 
225.9 	or after July 1, 2007; paragraph (b) is effective for sales and purchases made on or after 
225.10 	January 1, 2008; and paragraphs (c) and (d) are effective the day following final enactment.

225.11 	ARTICLE 13
225.12 	DEPARTMENT SPECIAL TAXES

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

225.23 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
225.24 	1, 2008.

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

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

226.1 	Sec. 3. Minnesota Statutes 2006, section 287.22, is amended to read:
226.2 	287.22 EXEMPTIONS.
226.3 	The tax imposed by section 287.21 does not apply to: 
226.4 	(1) An executory contract for the sale of real property under which the purchaser is 
226.5 	entitled to or does take possession of the real property, or any assignment or cancellation 
226.6 	of the contract;
226.7 	(2) A mortgage or an amendment, assignment, extension, partial release, or 
226.8 	satisfaction of a mortgage;
226.9 	(3) A will;
226.10 	(4) A plat;
226.11 	(5) A lease, amendment of lease, assignment of lease, or memorandum of lease;
226.12 	(6) A deed, instrument, or writing in which the United States or any agency or 
226.13 	instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;
226.14 	(7) A deed for a cemetery lot or lots;
226.15 	(8) A deed of distribution by a personal representative;
226.16 	(9) A deed to or from a co-owner partitioning their undivided interest in the same 
226.17 	piece of real property;
226.18 	(10) A deed or other instrument of conveyance issued pursuant to a permanent 
226.19 	school fund land exchange under section 92.121 and related laws; 
226.20 	(11) A referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;
226.21 	(12) A referee's, sheriff's, or certificate holder's certificate of redemption from a 
226.22 	mortgage or lien foreclosure sale issued to the redeeming mortgagor or lienee pursuant to 
226.23 	section 580.23 or other statute applicable to redemption by an owner of real property;
226.24 	(13) A deed, instrument, or writing which grants, creates, modifies, or terminates an 
226.25 	easement; and
226.26 	(14) A decree of marriage dissolution, as defined in section 287.01, subdivision 4, 
226.27 	or a deed or other instrument between the parties to the dissolution made pursuant to 
226.28 	the terms of the decree. 

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

226.30 	Sec. 4. Minnesota Statutes 2006, section 287.2205, is amended to read:
226.31 	287.2205 TAX-FORFEITED LAND.
226.32 	Before a state deed for tax-forfeited land may be issued, the deed tax must be paid 
226.33 	by the purchaser of tax-forfeited land whether the purchase is the result of a public 
226.34 	auction or private sale or a repurchase of tax-forfeited land. State agencies and local 
227.1 	units of government that acquire tax-forfeited land by purchase or any other means are 
227.2 	subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a 
227.3 	governmental subdivision for an authorized public use under section 282.01, subdivision 
227.4 	1a, or for redevelopment purposes under section 282.01, subdivision 1b.

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

227.6 	Sec. 5. Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:
227.7 		Subd. 4.Use tax; prescription drugs. (a) A person that receives prescription drugs 
227.8 	for resale or use in Minnesota, other than from a wholesale drug distributor that is subject 
227.9 	to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug 
227.10 	distributor multiplied by the tax percentage specified in this section. Liability for the tax is 
227.11 	incurred when prescription drugs are received or delivered in Minnesota by the person.
227.12 	(b) A person that receives prescription drugs for use in Minnesota from a nonresident 
227.13 	pharmacy required to be registered under section 151.19 is subject to a tax equal to 
227.14 	the price paid by the nonresident pharmacy to the wholesale drug distributor or the 
227.15 	price received by the nonresident pharmacy, whichever is lower, multiplied by the tax 
227.16 	percentage specified in this section. Liability for the tax is incurred when prescription 
227.17 	drugs are received in Minnesota by the person.
227.18 	(c) (b) A tax imposed under this subdivision does not apply to purchases by an 
227.19 	individual for personal consumption.

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

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

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

227.29 	Sec. 7. Minnesota Statutes 2006, section 295.54, subdivision 2, is amended to read:
227.30 		Subd. 2.Pharmacy refund. A pharmacy may claim an annual refund against the 
227.31 	total amount of tax, if any, the pharmacy owes during that calendar year under section 
227.32 	295.52, subdivision 2. The refund shall equal the amount paid by the pharmacy to a 
228.1 	wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend 
228.2 	drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage 
228.3 	specified in section 295.52. If the amount of the refund exceeds the tax liability of the 
228.4 	pharmacy under section 295.52, subdivision 1b 2, the commissioner shall provide the 
228.5 	pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply 
228.6 	for the refund on the annual return as provided under section 295.55, subdivision 5. The 
228.7 	refund must be claimed within one year of the due date of the return. Interest on refunds 
228.8 	paid under this subdivision will begin to accrue 60 days after the date a claim for refund is 
228.9 	filed. For purposes of this subdivision, the date a claim is filed is the due date of the return 
228.10 	or the date of the actual claim for refund, whichever is later. 

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

228.12 	Sec. 8. Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read:
228.13 		Subdivision 1.Insurance policies surcharge. (a) Except as otherwise provided in 
228.14 	subdivision 2, each licensed insurer engaged in writing policies of homeowner's insurance 
228.15 	authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or 
228.16 	commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the 
228.17 	gross premiums and assessments, less return premiums, on direct business received by 
228.18 	the company, or by its agents for it, for homeowner's insurance policies, commercial fire 
228.19 	policies, and commercial nonliability insurance policies in this state.
228.20 	(b) The surcharge amount collected under paragraph (a) or subdivision 2, paragraph 
228.21 	(b), may not be considered premium for any other purpose. The surcharge amount 
228.22 	under paragraph (a) must be separately stated on either a billing or policy declaration or 
228.23 	document containing similar information sent to an insured.
228.24 	(c) Amounts collected by the commissioner under this section must be deposited in 
228.25 	the fire safety account established pursuant to subdivision 3.

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

228.28 	Sec. 9. Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read:
228.29 		Subd. 2.Exemptions. (a) This section does not apply to a farmers' mutual fire 
228.30 	insurance company or township mutual fire insurance company in Minnesota organized 
228.31 	under chapter 67A.
228.32 	(b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to 
228.33 	transact business in Minnesota shall elect to remit to the Department of Revenue for 
229.1 	deposit in the fire safety account either (1) the surcharge amount collected imposed under 
229.2 	this section subdivision 1 on all premiums subject to that surcharge, or (2) a surcharge of 
229.3 	one-half of one percent on the gross fire premiums and assessments, less return premiums, 
229.4 	on all direct business received by the insurer or agents of the insurer in Minnesota, in 
229.5 	cash or otherwise, during the year. 
229.6 	(c) The election must be made prior to July 1, 2007, for policies written or renewed 
229.7 	between July 1, 2007, and December 31, 2007, and by December 31 of each year for 
229.8 	insurance for policies written or renewed in the succeeding calendar year. An insurer 
229.9 	who elects to remit the one-half of one percent surcharge on gross fire premiums and 
229.10 	assessments must not charge the insured the surcharge imposed under subdivision 1.
229.11 	(c)(d) For purposes of this subdivision, "gross fire premiums and assessments" 
229.12 	includes premiums on policies covering fire risks only on automobiles, whether written or 
229.13 	under floater form or otherwise.

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

229.18 	Sec. 10. Minnesota Statutes 2006, section 297I.20, subdivision 2, is amended to read:
229.19 		Subd. 2.Joint Underwriting Association offset. An insurance company may offset 
229.20 	against its premium tax liability to this state any amount paid for an assessment made 
229.21 	pursuant to section 62I.06, subdivision 6, shall be deductible by the member from past 
229.22 	or future premium taxes due the state. The offset against premium tax liability must be 
229.23 	claimed beginning with the taxable year that the assessment is paid. To the extent that the 
229.24 	allowable offset exceeds the tax liability, the remaining offset must be carried forward to 
229.25 	succeeding taxable years until the entire offset has been credited against the insurance 
229.26 	company's liability for premium tax under this chapter.

229.27 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
229.28 	1, 2008.

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

230.1 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
230.2 	1, 2008.

230.3 	ARTICLE 14
230.4 	DEPARTMENT PROPERTY TAXES AND AIDS

230.5 	Section 1. Minnesota Statutes 2006, section 163.051, subdivision 5, is amended to read:
230.6 		Subd. 5.Effect on road and bridge levy. For taxes payable in the same year 
230.7 	that the county first receives tax revenues under this section, the county auditor of each 
230.8 	metropolitan county shall reduce the amount of the property taxes levied pursuant to law 
230.9 	in 1973 for collection in 1974, by the board of commissioners of such county for the 
230.10 	county road and bridge fund, by the following amount: Anoka County, $341,750; Carver 
230.11 	County, $86,725; Dakota County, $386,165; Hennepin County, $2,728,425; Ramsey 
230.12 	County, $1,276,815; Scott County, $104,805; Washington County, $227,220 estimated 
230.13 	wheelage tax revenues to be received by the county through June 30 of that taxes payable 
230.14 	year, and shall spread only the balance thereof on the tax rolls for collection in 1972. The 
230.15 	county auditor shall also reduce the amount of such taxes levied pursuant to law in 1972 
230.16 	and any subsequent year, for collection in the respective ensuing years, by the amount 
230.17 	of wheelage taxes received by the county in the 12 months immediately preceding such 
230.18 	levy July 1 of the year preceding the taxes payable year.

230.19 	EFFECTIVE DATE. This section is effective for taxes payable in 2007 and 
230.20 	thereafter, except that the estimated 2007 wheelage tax revenues for counties that receive 
230.21 	wheelage tax revenues in 2007 may reflect any reasonable time period determined by 
230.22 	the county.

230.23 	Sec. 2. Minnesota Statutes 2006, section 270.071, subdivision 7, is amended to read:
230.24 		Subd. 7.Flight property. "Flight property" means all aircraft and flight equipment 
230.25 	used in connection therewith, including spare flight equipment. Flight property also 
230.26 	includes computers and computer software used in operating, controlling, or regulating 
230.27 	aircraft and flight equipment.

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

230.29 	Sec. 3. Minnesota Statutes 2006, section 270.072, subdivision 2, is amended to read:
230.30 		Subd. 2.Assessment of flight property. The Flight property ofthat is owned by, 
230.31 	or is leased, loaned, or otherwise made available to all airline companies operating in 
230.32 	Minnesota shall be assessed and appraised annually by the commissioner with reference 
231.1 	to its value on January 2 of the assessment year in the manner prescribed by sections 
231.2 	270.071 to 270.079. Aircraft with a gross weight of less than 30,000 pounds and used on 
231.3 	intermittent or irregularly timed flights shall be excluded from the provisions of sections 
231.4 	270.071 to 270.079. 

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

231.6 	Sec. 4. Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read:
231.7 		Subd. 3.Report by airline company. Each year, on or before July 1, every airline 
231.8 	company engaged in air commerce in this state shall file with the commissioner on or 
231.9 	before the time fixed by the commissioner a report under oath setting forth specifically 
231.10 	the information prescribed by the commissioner to enable the commissioner to make the 
231.11 	assessment required in sections 270.071 to 270.079, unless the commissioner determines 
231.12 	that the airline company or person should be excluded from filing because its activities do 
231.13 	not constitute air commerce as defined herein. A penalty of five percent of the tax being 
231.14 	assessed is imposed on a late filing of the annual report. If the report is not filed within 
231.15 	30 days, an additional penalty of five percent of the assessed tax is imposed for each 
231.16 	additional 30 days or fraction of 30 days until the return is filed. The penalty imposed 
231.17 	under this section must not exceed the lesser of $25,000 or 25 percent of the assessed tax.

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

231.20 	Sec. 5. Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read:
231.21 		Subd. 6.Airflight property tax lien. The tax imposed under sections 270.071 to 
231.22 	270.079 is a lien on all real and personal property within this state of the airline company 
231.23 	in whose name the property is assessed. For purposes of sections 270C.62 and 270C.63, 
231.24 	the date of assessment for the tax imposed under sections 270.071 to 270.079 isThe lien 
231.25 	attaches on January 2 of each year for the taxes payable in the following year.

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

231.28 	Sec. 6. [270.0725] PENALTIES.
231.29 		Subdivision 1.Penalty for late filing. If an airline company does not file its annual 
231.30 	report by the date designated in section 270.072, subdivision 3, a penalty of five percent 
231.31 	of the tax being assessed is imposed on that company. On August 1, and on the first day 
231.32 	of each succeeding calendar month, an additional five percent penalty is imposed if the 
232.1 	report has not yet been filed. For each airline company, the penalties imposed under 
232.2 	this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of 
232.3 	the assessed tax. 
232.4 		Subd. 2.Penalty for repeated instances of late filing. If there is a pattern of 
232.5 	repeated failures by an airline company to timely file the report required by this section, a 
232.6 	penalty of ten percent of the tax being assessed is imposed on that company.
232.7 		Subd. 3.Penalty for frivolous report. If an airline company files a frivolous annual 
232.8 	report, a penalty of 25 percent of the tax being assessed is imposed on that company. A 
232.9 	frivolous report under this section is a report that would fulfill the criteria for a frivolous 
232.10 	return under section 289A.60, subdivision 7, notwithstanding the restriction in section 
232.11 	289A.01. In a proceeding involving the issue of whether or not an airline company is 
232.12 	liable for this penalty, the burden of proof is on the commissioner.
232.13 		Subd. 4.Penalty for fraudulent report. If an airline company files a false or 
232.14 	fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50 
232.15 	percent of the tax being assessed is imposed on that company.
232.16 		Subd. 5.Penalties added to tax. Penalties imposed under this section are added to 
232.17 	the tax and collected as a part of it.

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

232.20 	Sec. 7. [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS.
232.21 	In addition to the powers granted to the commissioner in this chapter, and in order to 
232.22 	determine net tax capacities and issue notices of net tax capacity and tax under sections 
232.23 	270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and 
232.24 	270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes 
232.25 	an airline company.

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

232.28 	Sec. 8. Minnesota Statutes 2006, section 270.074, subdivision 3, is amended to read:
232.29 		Subd. 3.Tax capacity. (a) The net tax capacity of the flight property of every airline 
232.30 	company shall have a tax capacity ofis 70 percent of the value thereof apportioned to this 
232.31 	state under subdivision 1, except that the net tax capacity of quiet aircraft shall have a 
232.32 	tax capacity ofis 40 percent of the value determined under subdivision 1. Quiet aircraft 
232.33 	shall include "Quiet aircraft" means turboprops and aircraft defined as stage III or IV by 
233.1 	the Federal Aeronautics Administration. If, in the opinion of the commissioner, other 
233.2 	aircraft may be qualified as quiet aircraft, the commissioner may adopt rules providing 
233.3 	additional qualifications.
233.4 	(b) The flight property of an airline company that owns or leases aircraft the majority 
233.5 	of which are turboprops, and which provides, during six months or more of the year that 
233.6 	taxes are levied, scheduled passenger service to three or more airports inside or outside of 
233.7 	this state that serve small or medium sized communities, shall be assessed at 50 percent of 
233.8 	the assessment percentage otherwise set by paragraph (a).

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

233.11 	Sec. 9. Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read:
233.12 		Subdivision 1.Appeal. Any airline company against which a tax has been imposed 
233.13 	under sections 270.071 to 270.079 shall have the right to appeal within 60 days from the 
233.14 	date of notice of the levy of the taxThe notices of net tax capacity and of tax required 
233.15 	under section 270.075, subdivision 2, are orders of the commissioner. These orders must 
233.16 	be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject 
233.17 	to administrative review under section 270C.35. These orders may be appealed to the Tax 
233.18 	Court in the manner provided by law in section 271.06 for appealing official orders of 
233.19 	the commissioner that do not deal with valuation, assessment, or taxation for property 
233.20 	tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter 
233.21 	278 do not apply. 

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

233.24 	Sec. 10. Minnesota Statutes 2006, section 270.41, subdivision 1, is amended to read:
233.25 		Subdivision 1.Creation; purpose; powers. A Board of Assessors is created. 
233.26 	The board shall establish, conduct, review, supervise, coordinate, and approve courses 
233.27 	in assessment practices, and establish criteria for determining assessor's qualifications. 
233.28 	The board shall also consider other matters relating to assessment administration brought 
233.29 	before it by the commissioner of revenue. The board may grant, renew, suspend, or revoke 
233.30 	an assessor's license.

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

234.1 	Sec. 11. Minnesota Statutes 2006, section 270.41, is amended by adding a subdivision 
234.2 	to read:
234.3 		Subd. 1a.Definition. For purposes of sections 270.41 to 270.48, "board" means 
234.4 	the Board of Assessors.

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

234.6 	Sec. 12. Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read:
234.7 		Subd. 2.Members. The board shall consist of nine members, who shall be 
234.8 	appointed by the commissioner of revenue, in the manner provided herein. The members 
234.9 	shall include:
234.10 	(1) two from the Department of Revenue;
234.11 	(2) two county assessors;
234.12 	(3) two assessors who are not county assessors, one of whom shall be a township 
234.13 	assessor;
234.14 	(4) one from the private appraisal field holding a professional appraisal designation; 
234.15 	and
234.16 	(5) two public members as defined by section 214.02. 
234.17 	The appointment provided in clauses (2) and (3) may be made from two listsa list 
234.18 	of not less than three names each, one submitted to the commissioner of revenue by the 
234.19 	Minnesota Association of Assessing Officers or its successor organization containing 
234.20 	recommendations for the appointment of appointees described in clause clauses (2), 
234.21 	and one by the Minnesota Association of Assessors, Inc. or its successor organization 
234.22 	containing recommendations for the appointees described in clause (3) and (3). The lists
234.23 	list must be submitted 30 days before the commencement of the term. In the case of a 
234.24 	vacancy, a new list shall be furnished to the commissioner by the respective organization
234.25 	immediately. A member of the board who is no longer engaged in the capacity listed 
234.26 	abovethat was the basis of appointment is disqualified from membership in the board.
234.27 	The board shall annually elect a chair and a secretaryvice-chair of the board.

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

234.29 	Sec. 13. Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read:
234.30 		Subd. 3.Licenses; refusal or revocation. The board may refuse to grant or renew, 
234.31 	or may suspend or revoke, a license of an applicant or licensee for any of the following 
234.32 	causes or acts:
234.33 	(1) failure to complete required training;
235.1 	(2) inefficiency or neglect of duty;
235.2 	(3) "unprofessional conduct" which means knowingly neglecting to perform a duty 
235.3 	required by law, or violation of the laws of this state relating to the assessment of property 
235.4 	or unlawfully exempting property or knowingly and intentionally listing property on the 
235.5 	tax list at substantially less than its market value or the level required by law in order to 
235.6 	gain favor or benefit, or knowingly and intentionally misclassifying property in order to 
235.7 	gain favor or benefit failure to comply with the Code of Conduct and Ethics for Licensed 
235.8 	Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session 
235.9 	chapter 3, article 1, section 38;
235.10 	(4) conviction of a crime involving moral turpitude; or
235.11 	(5) any other cause or act that in the board's opinion warrants a refusal to issue 
235.12 	or suspension or revocation of a license.

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

235.14 	Sec. 14. Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read:
235.15 		Subd. 5.Prohibited activity. An assessor, deputy assessor, assistant assessor, 
235.16 	appraiser,A licensed assessor or other person employed by an assessment jurisdiction 
235.17 	or contracting with an assessment jurisdiction for the purpose of valuing or classifying 
235.18 	property for property tax purposes is prohibited from making appraisals or analyses, 
235.19 	accepting an appraisal assignment, or preparing an appraisal report as defined in section 
235.20 	82B.02, subdivisions 2 to 5, on any property within the assessment jurisdiction where the 
235.21 	individual is employed or performing the duties of the assessor under contract. Violation 
235.22 	of this prohibition shall result in immediate revocation of the individual's license to assess 
235.23 	property for property tax purposes. This prohibition must not be construed to prohibit an 
235.24 	individual from carrying out any duties required for the proper assessment of property 
235.25 	for property tax purposes. If a formal resolution has been adopted by the governing body 
235.26 	of a governmental unit, which specifies the purposes for which such work will be done, 
235.27 	this prohibition does not apply to appraisal activities undertaken on behalf of and at the 
235.28 	request of the governmental unit that has employed or contracted with the individual. 
235.29 	The resolution may only allow appraisal activities which are related to condemnations, 
235.30 	right-of-way acquisitions, or special assessments. 

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

235.32 	Sec. 15. Minnesota Statutes 2006, section 270.44, is amended to read:
235.33 	270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.
236.1 	The board shall charge the following fees:
236.2 	(1) $105 for a senior accredited Minnesota assessor license;
236.3 	(2) $80 for an accredited Minnesota assessor license;
236.4 	(3) $65 for a certified Minnesota assessor specialist license;
236.5 	(4) $55 for a certified Minnesota assessor license;
236.6 	(5) $50 for a course challenge examination;
236.7 	(6)(5) $35 for grading a form appraisal;
236.8 	(7)(6) $60 for grading a narrative appraisal;
236.9 	(8)(7) $30 for a reinstatement fee;
236.10 	(9)(8) $25 for a record retention fee; and
236.11 	(10)(9) $20 for an educational transcript; and.
236.12 	(11) $30 for all retests of board-sponsored educational courses.

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

236.14 	Sec. 16. Minnesota Statutes 2006, section 270.45, is amended to read:
236.15 	270.45 DISPOSITION OF FEES.
236.16 	All fees so established and collected shall be paid to the commissioner of finance for 
236.17 	deposit in the general fund. The expenses of carrying out the provisions of sections 270.41
236.18 	to 270.53 shall be paid from appropriations made to the board of Assessors. 

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

236.20 	Sec. 17. Minnesota Statutes 2006, section 270.46, is amended to read:
236.21 	270.46 TRAINING COURSES, ESTABLISHMENT; OTHER COURSES,
236.22 	REGULATION.
236.23 	The board shall establishreview and approve training courses on assessment 
236.24 	practices and shall review and approve courses on assessment practices, techniques of 
236.25 	assessment, and ethics  offered by schools, colleges and,  universities as well as courses that 
236.26 	are offered by any units of government on techniques of assessment. Courses shall be 
236.27 	established in various places throughout the state and be offered on regular intervals, units 
236.28 	of government, and other entities.

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

236.30 	Sec. 18. Minnesota Statutes 2006, section 270.47, is amended to read:
236.31 	270.47 RULES.
237.1 	The board shall establish theadopt rules necessary to accomplish the purpose of 
237.2 	sectionsections 270.41 to 270.51, and shall establish criteria required of assessing officials 
237.3 	in the state. Separate criteria may be established depending upon the responsibilities of the 
237.4 	assessor. The board shall prepare and give examinations from time to time to determine 
237.5 	whether assessing officials possess the necessary qualifications for performing the 
237.6 	functions of the office. Such tests shall be given immediately upon completion of courses 
237.7 	required by the board, or to persons who already possess the requisite qualifications under 
237.8 	the rules of the board. An action of the board in refusing to grant or renew a license or in 
237.9 	suspending or revoking a license is subject to review in accordance with chapter 14.

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

237.11 	Sec. 19. Minnesota Statutes 2006, section 270.48, is amended to read:
237.12 	270.48 LICENSURE OF QUALIFIED PERSONS.
237.13 	The board shall may license persons as possessing the necessary qualifications of an 
237.14 	assessing official. Different levels of licensure may be established as to classes of property 
237.15 	which assessors may be certified to assess at the discretion of the board. Every person, 
237.16 	except a local or county assessor, regularly employed by the assessor to assist in making 
237.17 	decisions regarding valuing and classifying property for assessment purposes shall be 
237.18 	required tomust become licensed within three years of the date of employment. Licensure 
237.19 	shall be required for local and county assessors as otherwise provided in sections 270.41
237.20 	to 270.53 section 273.061 and rules adopted by the board. 

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

237.22 	Sec. 20. Minnesota Statutes 2006, section 270.50, is amended to read:
237.23 	270.50 EMPLOYMENT OF LICENSED ASSESSORS.
237.24 	No assessor shall be employed who has not been licensed as qualified by the board, 
237.25 	provided the time to comply may be extended after application to the board upon a 
237.26 	showing that licensed assessors are not available for employment. The board may license 
237.27 	that a county or local assessor who has not received the training, but possesses the 
237.28 	necessary qualifications for performing the functions of the office by the passage of an 
237.29 	approved examination or may waive the examination if such person has demonstrated 
237.30 	competence in performing the functions of the office for a period of time the board deems 
237.31 	reasonable. The county or local assessing district shall assume the cost of training of its 
237.32 	assessors in courses approved by the board for the purpose of obtaining the assessor's 
237.33 	license to the extent of course fees, mileage, meals and lodging, and recognized travel 
238.1 	expenses not paid by the state. If the governing body of any township or city fails to 
238.2 	employ an assessor as required by sections 270.41 to 270.53, the assessment shall be 
238.3 	made by the county assessor. 
238.4 	In the case of cities incorporated or townships organized after April 11, 1974, except 
238.5 	cities or towns located in Ramsey county or which have elected a county assessor system 
238.6 	in accordance with section 273.055, the board shall allow the city or town 90 days from 
238.7 	the date of incorporation or organization to employ a licensed assessor.

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

238.9 	Sec. 21. Minnesota Statutes 2006, section 270C.306, is amended to read:
238.10 	270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR 
238.11 	IDENTIFYING NUMBERS ON FORMS.
238.12 	Notwithstanding the provisions of any other law except section 272.115, the 
238.13 	commissioner may require that a form required to be filed with the commissioner include 
238.14 	the Social Security number, federal employer identification number, or Minnesota 
238.15 	taxpayer identification number of the taxpayer or applicant.

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

238.17 	Sec. 22. Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read:
238.18 		Subdivision 1.Authority. (a) The commissioner may abate, reduce, or refund any 
238.19 	penalty or interest that is imposed by a law administered by the commissioner as a result 
238.20 	of the late payment of tax or late filing of a return, if the failure to timely pay the tax or 
238.21 	failure to timely file the return is due to reasonable cause, or if the taxpayer is located 
238.22 	in a presidentially declared disaster area.
238.23 	(b) The commissioner shall abate any part of a penalty or additional tax charge 
238.24 	under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 
238.25 	advice given to the taxpayer in writing by an employee of the department acting in 
238.26 	an official capacity, if the advice:
238.27 	(1) was reasonably relied on and was in response to a specific written request of the 
238.28 	taxpayer; and
238.29 	(2) was not the result of failure by the taxpayer to provide adequate or accurate 
238.30 	information.
238.31 	(c) The commissioner may abate a penalty imposed under section 270.0725, 
238.32 	subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline 
238.33 	company is located in a presidentially declared disaster area.

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

239.2 	Sec. 23. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:
239.3 		Subd. 64.Job opportunity building zone property. (a) Improvements to real 
239.4 	property, and personal property, classified under section 273.13, subdivision 24, and 
239.5 	located within a job opportunity building zone, designated under section 469.314, are 
239.6 	exempt from ad valorem taxes levied under chapter 275.
239.7 	(b) Improvements to real property, and tangible personal property, of an agricultural 
239.8 	production facility located within an agricultural processing facility zone, designated 
239.9 	under section 469.314, is exempt from ad valorem taxes levied under chapter 275.
239.10 	(c) For property to qualify for exemption under paragraph (a), the occupant must be 
239.11 	a qualified business, as defined in section 469.310.
239.12 	(d) The exemption applies beginning for the first assessment year after designation 
239.13 	of the job opportunity building zone by the commissioner of employment and economic 
239.14 	development. The exemption applies to each assessment year that begins during the 
239.15 	duration of the job opportunity building zone. To be exempt, the property must be 
239.16 	occupied by July 1 of the assessment year by a qualified business that has signed the 
239.17 	business subsidy agreement and relocation agreement, if required, by July 1 of the 
239.18 	assessment year. This exemption does not apply to:
239.19 	(1) the levy under section 475.61 or similar levy provisions under any other law to 
239.20 	pay general obligation bonds; or
239.21 	(2) a levy under section 126C.17, if the levy was approved by the voters before the 
239.22 	designation of the job opportunity building zone.
239.23 	(e) Except for property of a business that was exempt under this subdivision for 
239.24 	taxes payable in 2007, a business must notify the county assessor in writing of eligibility 
239.25 	under this subdivision by July 1 in order to begin receiving the exemption under this 
239.26 	subdivision for taxes payable in the following year. The business need not annually notify 
239.27 	the county assessor of its continued exemption under this subdivision, but must notify the 
239.28 	county assessor immediately if the exemption no longer applies.

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

239.30 	Sec. 24. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
239.31 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 
239.32 	whenever any real estate is sold for a consideration in excess of $1,000, whether by 
239.33 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
239.34 	grantee or the legal agent of either shall file a certificate of value with the county auditor 
240.1 	in the county in which the property is located when the deed or other document is 
240.2 	presented for recording. Contract for deeds are subject to recording under section 507.235, 
240.3 	subdivision 1. Value shall, in the case of any deed not a gift, be the amount of the full 
240.4 	actual consideration thereof, paid or to be paid, including the amount of any lien or liens 
240.5 	assumed. The items and value of personal property transferred with the real property 
240.6 	must be listed and deducted from the sale price. The certificate of value shall include 
240.7 	the classification to which the property belongs for the purpose of determining the fair 
240.8 	market value of the property. The certificate shall include financing terms and conditions 
240.9 	of the sale which are necessary to determine the actual, present value of the sale price 
240.10 	for purposes of the sales ratio study. The commissioner of revenue shall promulgate 
240.11 	administrative rules specifying the financing terms and conditions which must be included 
240.12 	on the certificate. Pursuant to the authority of the commissioner of revenue in section 
240.13 	270C.306, The certificate of value must include the Social Security number or the federal 
240.14 	employer identification number of the grantors and grantees. However, a married person 
240.15 	who is not an owner of record and who is signing a conveyance instrument along with 
240.16 	the person's spouse solely to release and convey their marital interest, if any, in the real 
240.17 	property being conveyed is not a grantor for the purpose of the preceding sentence. A 
240.18 	statement in the deed that is substantially in the following form is sufficient to allow the 
240.19 	county auditor to accept a certificate for filing without the Social Security number of the 
240.20 	named spouse: " (Name) claims no ownership interest in the real property being conveyed 
240.21 	and is executing this instrument solely to release and convey a marital interest, if any, in 
240.22 	that real property." The identification numbers of the grantors and grantees are private 
240.23 	data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12, 
240.24 	but, notwithstanding that section, the private or nonpublic data may be disclosed to the 
240.25 	commissioner of revenue for purposes of tax administration. The information required to 
240.26 	be shown on the certificate of value is limited to the information required as of the date of 
240.27 	the acknowledgment on the deed or other document to be recorded.

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

240.30 	Sec. 25. Minnesota Statutes 2006, section 273.05, is amended by adding a subdivision 
240.31 	to read:
240.32 		Subd. 3.Cities and townships; employment of licensed assessor. In the case 
240.33 	of cities or townships, except cities or towns located in Ramsey County or which have 
240.34 	elected a county assessor system in accordance with section 273.055, the commissioner 
241.1 	shall allow the city or town 90 days from the date of incorporation or organization to 
241.2 	employ a licensed assessor.

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

241.4 	Sec. 26. [273.0535] COUNTY OR LOCAL ASSESSING DISTRICT TO ASSUME 
241.5 	COST OF TRAINING.
241.6 	The county or local assessing district must assume the cost of training its assessors 
241.7 	in courses approved by the board for the purpose of obtaining the assessor's license to 
241.8 	the extent of course fees, mileage, meals, and lodging, and recognized travel expenses 
241.9 	not paid by the state.

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

241.11 	Sec. 27. Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read:
241.12 		Subd. 3.Requirements. (a) Real estate consisting of ten acres or more or a nursery 
241.13 	or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13, 
241.14 	shall be entitled to valuation and tax deferment under this section only if it is primarily 
241.15 	devoted to agricultural use, and meets the qualifications in subdivision 6, and either: 
241.16 	(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the 
241.17 	owner or is real estate which is farmed with the real estate which contains the homestead 
241.18 	property; or
241.19 	(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling, 
241.20 	or any combination thereof, for a period of at least seven years prior to application for 
241.21 	benefits under the provisions of this section, or is real estate which is farmed with the 
241.22 	real estate which qualifies under this clause and is within four townships or cities or 
241.23 	combination thereof from the qualifying real estate; or
241.24 	(3) is the homestead of a shareholder in a family farm corporation as defined in 
241.25 	section 500.24, notwithstanding the fact that legal title to the real estate may be held in the 
241.26 	name of the family farm corporation; or 
241.27 	(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor, 
241.28 	partnership, or corporation which also owns the nursery or greenhouse operations on 
241.29 	the parcel or parcels.
241.30 	(b) Valuation of real estate under this section is limited to parcels the ownership of 
241.31 	which is in noncorporate entities except for:
241.32 	(1) family farm corporations organized pursuant to section 500.24; and 
242.1 	(2) corporations that derive 80 percent or more of their gross receipts from the 
242.2 	wholesale or retail sale of horticultural or nursery stock.
242.3 	Corporate entities who previously qualified for tax deferment pursuant to this section 
242.4 	and who continue to otherwise qualify under subdivisions 3 and 6 for a period of at least 
242.5 	three years following the effective date of Laws 1983, chapter 222, section 8, will not be 
242.6 	required to make payment of the previously deferred taxes, notwithstanding the provisions 
242.7 	of subdivision 9. Special assessments are payable at the end of the three-year period 
242.8 	or at time of sale, whichever comes first.
242.9 	(c) Land that previously qualified for tax deferment under this section and no longer 
242.10 	qualifies because it is not primarily used for agricultural purposes but would otherwise 
242.11 	qualify under subdivisions 3 and 6 for a period of at least three years will not be required 
242.12 	to make payment of the previously deferred taxes, notwithstanding the provisions of 
242.13 	subdivision 9. Sale of the land prior to the expiration of the three-year period requires 
242.14 	payment of deferred taxes as follows: sale in the year the land no longer qualifies 
242.15 	requires payment of the current year's deferred taxes plus payment of deferred taxes for 
242.16 	the two prior years; sale during the second year the land no longer qualifies requires 
242.17 	payment of the current year's deferred taxes plus payment of the deferred taxes for the 
242.18 	prior year; and sale during the third year the land no longer qualifies requires payment of 
242.19 	the current year's deferred taxes. Deferred taxes shall be paid even if the land qualifies 
242.20 	pursuant to subdivision 11a. When such property is sold or no longer qualifies under this 
242.21 	paragraph, or at the end of the three-year period, whichever comes first, all deferred 
242.22 	special assessments plus interest are payable in equal installments spread over the time 
242.23 	remaining until the last maturity date of the bonds issued to finance the improvement 
242.24 	for which the assessments were levied. If the bonds have matured, the deferred special 
242.25 	assessments plus interest are payable within 90 days. The provisions of section 429.061, 
242.26 	subdivision 2, apply to the collection of these installments. Penalties are not imposed on 
242.27 	any such special assessments if timely paid.

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

242.29 	Sec. 28. Minnesota Statutes 2006, section 273.121, is amended to read:
242.30 	273.121 VALUATION OF REAL PROPERTY, NOTICE.
242.31 	Any county assessor or city assessor having the powers of a county assessor, valuing 
242.32 	or classifying taxable real property shall in each year notify those persons whose property 
242.33 	is to be included on the assessment roll that year if the person's address is known to the 
242.34 	assessor, otherwise the occupant of the property. The notice shall be in writing and shall be 
243.1 	sent by ordinary mail at least ten days before the meeting of the local board of appeal and 
243.2 	equalization under section 274.01 or the review process established under section 274.13, 
243.3 	subdivision 1c. Upon written request by the owner of the property, the assessor may send 
243.4 	the notice in electronic form or by electronic mail instead of on paper or by ordinary mail. 
243.5 	It shall contain: (1) the market value for the current and prior assessment, (2) the limited 
243.6 	market value under section 273.11, subdivision 1a, for the current and prior assessment, 
243.7 	(3) the qualifying amount of any improvements under section 273.11, subdivision 16, 
243.8 	for the current assessment, (4) the market value subject to taxation after subtracting the 
243.9 	amount of any qualifying improvements for the current assessment, (5) the classification 
243.10 	of the property for the current and prior assessment, (6) a note that if the property is 
243.11 	homestead and at least 45 years old, improvements made to the property may be eligible 
243.12 	for a valuation exclusion under section 273.11, subdivision 16, (7) the assessor's office 
243.13 	address, and (8) the dates, places, and times set for the meetings of the local board of 
243.14 	appeal and equalization, the review process established under section 274.13, subdivision 
243.15 	1c, and the county board of appeal and equalization. The commissioner of revenue shall 
243.16 	specify the form of the notice. The assessor shall attach to the assessment roll a statement 
243.17 	that the notices required by this section have been mailed. Any assessor who is not 
243.18 	provided sufficient funds from the assessor's governing body to provide such notices, 
243.19 	may make application to the commissioner of revenue to finance such notices. The 
243.20 	commissioner of revenue shall conduct an investigation and, if satisfied that the assessor 
243.21 	does not have the necessary funds, issue a certification to the commissioner of finance 
243.22 	of the amount necessary to provide such notices. The commissioner of finance shall 
243.23 	issue a warrant for such amount and shall deduct such amount from any state payment 
243.24 	to such county or municipality. The necessary funds to make such payments are hereby 
243.25 	appropriated. Failure to receive the notice shall in no way affect the validity of the 
243.26 	assessment, the resulting tax, the procedures of any board of review or equalization, or 
243.27 	the enforcement of delinquent taxes by statutory means. 

243.28 	EFFECTIVE DATE. This section is effective for notices required in 2007 and 
243.29 	thereafter.

243.30 	Sec. 29. Minnesota Statutes 2006, section 273.123, subdivision 2, is amended to read:
243.31 		Subd. 2.Reassessment of homestead property. The county assessor shall reassess 
243.32 	all homestead property located within a disaster or emergency area which is physically 
243.33 	damaged by the disaster or emergency and shall adjust the valuation for taxes payable the 
243.34 	following year to reflect the loss in market value caused by the damage as follows: Subtract 
243.35 	the market value of the property as reassessed from the market value of the property as 
244.1 	assessed under section 273.01 for January 1 of the year in which the disaster or emergency 
244.2 	occurred; multiply the remainder by a fraction, the numerator of which is the number of 
244.3 	full months remaining in the year on the date the disaster or emergency occurred, and the 
244.4 	denominator of which is 12; subtract the product of the calculation from the market value 
244.5 	of the property as assessed for January 1 of the year in which the disaster or emergency 
244.6 	occurred; the remainder is the estimated market value to be used for taxes payable the 
244.7 	following year. The assessor shall report to the county auditor the net tax capacity based 
244.8 	on the assessment of January 1 offor the year in which the disaster or emergency occurred 
244.9 	and the net tax capacity based on the reassessment made pursuant to this subdivision.

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

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

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

244.18 	Sec. 31. Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:
244.19 		Subd. 13.Homestead application. (a) A person who meets the homestead 
244.20 	requirements under subdivision 1 must file a homestead application with the county 
244.21 	assessor to initially obtain homestead classification.
244.22 	(b) On or before January 2, 1993, each county assessor shall mail a homestead 
244.23 	application to the owner of each parcel of property within the county which was 
244.24 	classified as homestead for the 1992 assessment year. The format and contents of a 
244.25 	uniform homestead application shall be prescribed by the commissioner of revenue. The 
244.26 	commissioner shall consult with the chairs of the house and senate tax committees on the 
244.27 	contents of the homestead application form. The application must clearly inform the 
244.28 	taxpayer that this application must be signed by all owners who occupy the property or 
244.29 	by the qualifying relative and returned to the county assessor in order for the property 
244.30 	to continue receiving homestead treatment. The envelope containing the homestead 
244.31 	application shall clearly identify its contents and alert the taxpayer of its necessary 
244.32 	immediate response.
245.1 	(c) Every property owner applying for homestead classification must furnish to the 
245.2 	county assessor the Social Security number of each occupant who is listed as an owner 
245.3 	of the property on the deed of record, the name and address of each owner who does not 
245.4 	occupy the property, and the name and Social Security number of each owner's spouse who 
245.5 	occupies the property. The application must be signed by each owner who occupies the 
245.6 	property and by each owner's spouse who occupies the property, or, in the case of property 
245.7 	that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
245.8 	If a property owner occupies a homestead, the property owner's spouse may not 
245.9 	claim another property as a homestead unless the property owner and the property owner's 
245.10 	spouse file with the assessor an affidavit or other proof required by the assessor stating that 
245.11 	the property qualifies as a homestead under subdivision 1, paragraph (e).
245.12 	Owners or spouses occupying residences owned by their spouses and previously 
245.13 	occupied with the other spouse, either of whom fail to include the other spouse's name 
245.14 	and Social Security number on the homestead application or provide the affidavits or 
245.15 	other proof requested, will be deemed to have elected to receive only partial homestead 
245.16 	treatment of their residence. The remainder of the residence will be classified as 
245.17 	nonhomestead residential. When an owner or spouse's name and Social Security number 
245.18 	appear on homestead applications for two separate residences and only one application is 
245.19 	signed, the owner or spouse will be deemed to have elected to homestead the residence for 
245.20 	which the application was signed.
245.21 	The Social Security numbers or affidavits or other proofs of the property owners 
245.22 	and spouses are private data on individuals as defined by section 13.02, subdivision 12, 
245.23 	but, notwithstanding that section, the private data may be disclosed to the commissioner 
245.24 	of revenue, or, for purposes of proceeding under the Revenue Recapture Act to recover 
245.25 	personal property taxes owing, to the county treasurer.
245.26 	(d)(c) If residential real estate is occupied and used for purposes of a homestead by 
245.27 	a relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 
245.28 	order for the property to receive homestead status, a homestead application must be filed 
245.29 	with the assessor. The Social Security number of each relative and spouse of a relative
245.30 	occupying the property and the Social Security number of each owner who is related to an 
245.31 	occupant of the property shall be required on the homestead application filed under this 
245.32 	subdivision. If a different relative of the owner subsequently occupies the property, the 
245.33 	owner of the property must notify the assessor within 30 days of the change in occupancy. 
245.34 	The Social Security number of a relative or relative's spouse occupying the property 
245.35 	is private data on individuals as defined by section 13.02, subdivision 12, but may be 
246.1 	disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 
246.2 	Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
246.3 	(e)(d) The homestead application shall also notify the property owners that the 
246.4 	application filed under this section will not be mailed annually and that if the property 
246.5 	is granted homestead status for the 1993 assessment, or any assessment year thereafter, 
246.6 	that same property shall remain classified as homestead until the property is sold or 
246.7 	transferred to another person, or the owners, the spouse of the owner, or the relatives no 
246.8 	longer use the property as their homestead. Upon the sale or transfer of the homestead 
246.9 	property, a certificate of value must be timely filed with the county auditor as provided 
246.10 	under section 272.115. Failure to notify the assessor within 30 days that the property has 
246.11 	been sold, transferred, or that the owner, the spouse of the owner, or the relative is no 
246.12 	longer occupying the property as a homestead, shall result in the penalty provided under 
246.13 	this subdivision and the property will lose its current homestead status.
246.14 	(f)(e) If the homestead application is not returned within 30 days, the county 
246.15 	will send a second application to the present owners of record. The notice of proposed 
246.16 	property taxes prepared under section 275.065, subdivision 3, shall reflect the property's 
246.17 	classification. Beginning with assessment year 1993 for all properties, If a homestead 
246.18 	application has not been filed with the county by December 15, the assessor shall classify 
246.19 	the property as nonhomestead for the current assessment year for taxes payable in 
246.20 	the following year, provided that the owner may be entitled to receive the homestead 
246.21 	classification by proper application under section 375.192.
246.22 	(g)(f) At the request of the commissioner, each county must give the commissioner 
246.23 	a list that includes the name and Social Security number of each occupant of homestead 
246.24 	property who is the property owner and the, property owner's spouse occupying the 
246.25 	property, or, qualifying relative of a property owner, applying for homestead classification 
246.26 	under this subdivision or a spouse of a qualifying relative. The commissioner shall use the 
246.27 	information provided on the lists as appropriate under the law, including for the detection 
246.28 	of improper claims by owners, or relatives of owners, under chapter 290A.
246.29 	(h)(g) If the commissioner finds that a property owner may be claiming a 
246.30 	fraudulent homestead, the commissioner shall notify the appropriate counties. Within 
246.31 	90 days of the notification, the county assessor shall investigate to determine if the 
246.32 	homestead classification was properly claimed. If the property owner does not qualify, 
246.33 	the county assessor shall notify the county auditor who will determine the amount of 
246.34 	homestead benefits that had been improperly allowed. For the purpose of this section, 
246.35 	"homestead benefits" means the tax reduction resulting from the classification as a 
246.36 	homestead under section 273.13, the taconite homestead credit under section 273.135, the 
247.1 	residential homestead and agricultural homestead credits under section 273.1384, and the 
247.2 	supplemental homestead credit under section 273.1391.
247.3 	The county auditor shall send a notice to the person who owned the affected property 
247.4 	at the time the homestead application related to the improper homestead was filed, 
247.5 	demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 
247.6 	of the homestead benefits. The person notified may appeal the county's determination 
247.7 	by serving copies of a petition for review with county officials as provided in section 
247.8 	278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 
247.9 	Court within 60 days of the date of the notice from the county. Procedurally, the appeal 
247.10 	is governed by the provisions in chapter 271 which apply to the appeal of a property tax 
247.11 	assessment or levy, but without requiring any prepayment of the amount in controversy. If 
247.12 	the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 
247.13 	has been filed, the county auditor shall certify the amount of taxes and penalty to the county 
247.14 	treasurer. The county treasurer will add interest to the unpaid homestead benefits and 
247.15 	penalty amounts at the rate provided in section 279.03 for real property taxes becoming 
247.16 	delinquent in the calendar year during which the amount remains unpaid. Interest may be 
247.17 	assessed for the period beginning 60 days after demand for payment was made.
247.18 	If the person notified is the current owner of the property, the treasurer may add the 
247.19 	total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 
247.20 	otherwise payable on the property by including the amounts on the property tax statements 
247.21 	under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 
247.22 	valorem taxes shall include interest accrued through December 31 of the year preceding 
247.23 	the taxes payable year for which the amounts are first added. These amounts, when added 
247.24 	to the property tax statement, become subject to all the laws for the enforcement of real or 
247.25 	personal property taxes for that year, and for any subsequent year.
247.26 	If the person notified is not the current owner of the property, the treasurer may 
247.27 	collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 
247.28 	the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 
247.29 	of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 
247.30 	tax obligations of the person who owned the property at the time the application related 
247.31 	to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 
247.32 	of personal liability for the homestead benefits, penalty, interest, and costs, and instead 
247.33 	extend those amounts on the tax lists against the property as provided in this paragraph 
247.34 	to the extent that the current owner agrees in writing. On all demands, billings, property 
247.35 	tax statements, and related correspondence, the county must list and state separately the 
248.1 	amounts of homestead benefits, penalty, interest and costs being demanded, billed or 
248.2 	assessed.
248.3 	(i)(h) Any amount of homestead benefits recovered by the county from the property 
248.4 	owner shall be distributed to the county, city or town, and school district where the 
248.5 	property is located in the same proportion that each taxing district's levy was to the total 
248.6 	of the three taxing districts' levy for the current year. Any amount recovered attributable 
248.7 	to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 
248.8 	deposited in the taconite property tax relief account. Any amount recovered that is 
248.9 	attributable to supplemental homestead credit is to be transmitted to the commissioner of 
248.10 	revenue for deposit in the general fund of the state treasury. The total amount of penalty 
248.11 	collected must be deposited in the county general fund.
248.12 	(j)(i) If a property owner has applied for more than one homestead and the county 
248.13 	assessors cannot determine which property should be classified as homestead, the county 
248.14 	assessors will refer the information to the commissioner. The commissioner shall make 
248.15 	the determination and notify the counties within 60 days.
248.16 	(k)(j) In addition to lists of homestead properties, the commissioner may ask the 
248.17 	counties to furnish lists of all properties and the record owners. The Social Security 
248.18 	numbers and federal identification numbers that are maintained by a county or city 
248.19 	assessor for property tax administration purposes, and that may appear on the lists retain 
248.20 	their classification as private or nonpublic data; but may be viewed, accessed, and used by 
248.21 	the county auditor or treasurer of the same county for the limited purpose of assisting the 
248.22 	commissioner in the preparation of microdata samples under section 270C.12.
248.23 	(l)(k) On or before April 30 each year beginning in 2007, each county must provide 
248.24 	the commissioner with the following data for each parcel of homestead property by 
248.25 	electronic means as defined in section 289A.02, subdivision 8:
248.26 	(i) the property identification number assigned to the parcel for purposes of taxes 
248.27 	payable in the current year;
248.28 	(ii) the name and Social Security number of each occupant of homestead property 
248.29 	who is the property owner and, property owner's spouse, as shown on the tax rolls for the 
248.30 	current and the prior assessment year qualifying relative of a property owner, or spouse 
248.31 	of a qualifying relative;
248.32 	(iii) the classification of the property under section 273.13 for taxes payable in the 
248.33 	current year and in the prior year;
248.34 	(iv) an indication of whether the property was classified as a homestead for taxes 
248.35 	payable in the current year or for taxes payable in the prior year because of occupancy by 
248.36 	a relative of the owner or by a spouse of a relative;
249.1 	(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
249.2 	current year and the prior year;
249.3 	(vi) the market value of improvements to the property first assessed for tax purposes 
249.4 	for taxes payable in the current year;
249.5 	(vii) the assessor's estimated market value assigned to the property for taxes payable 
249.6 	in the current year and the prior year;
249.7 	(viii) the taxable market value assigned to the property for taxes payable in the 
249.8 	current year and the prior year;
249.9 	(ix) whether there are delinquent property taxes owing on the homestead;
249.10 	(x) the unique taxing district in which the property is located; and
249.11 	(xi) such other information as the commissioner decides is necessary.
249.12 	The commissioner shall use the information provided on the lists as appropriate 
249.13 	under the law, including for the detection of improper claims by owners, or relatives 
249.14 	of owners, under chapter 290A.

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

249.16 	Sec. 32. Minnesota Statutes 2006, section 273.124, subdivision 14, is amended to read:
249.17 		Subd. 14.Agricultural homesteads; special provisions. (a) Real estate of less than 
249.18 	ten acres that is the homestead of its owner must be classified as class 2a under section 
249.19 	273.13, subdivision 23, paragraph (a), if:
249.20 	(1) the parcel on which the house is located is contiguous on at least two sides to (i) 
249.21 	agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 
249.22 	Service, or (iii) land administered by the Department of Natural Resources on which in 
249.23 	lieu taxes are paid under sections 477A.11 to 477A.14;
249.24 	(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 
249.25 	20 acres;
249.26 	(3) the noncontiguous land is located not farther than four townships or cities, or a 
249.27 	combination of townships or cities from the homestead; and
249.28 	(4) the agricultural use value of the noncontiguous land and farm buildings is equal 
249.29 	to at least 50 percent of the market value of the house, garage, and one acre of land.
249.30 	Homesteads initially classified as class 2a under the provisions of this paragraph shall 
249.31 	remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 
249.32 	properties, as long as the homestead remains under the same ownership, the owner owns a 
249.33 	noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 
249.34 	value qualifies under clause (4). Homestead classification under this paragraph is limited 
249.35 	to property that qualified under this paragraph for the 1998 assessment.
250.1 	(b)(i) Agricultural property consisting of at least 40 acres shall be classified as the 
250.2 	owner's homestead, to the same extent as other agricultural homestead property, if all 
250.3 	of the following criteria are met:
250.4 	(1) the owner, the owner's spouse, the son or daughter of the owner or owner's 
250.5 	spouse, or the grandson or granddaughter of the owner or the owner's spouse, is actively 
250.6 	farming the agricultural property, either on the person's own behalf as an individual or 
250.7 	on behalf of a partnership operating a family farm, family farm corporation, joint family 
250.8 	farm venture, or limited liability company of which the person is a partner, shareholder, or 
250.9 	member;
250.10 	(2) both the owner of the agricultural property and the person who is actively 
250.11 	farming the agricultural property under clause (1), are Minnesota residents;
250.12 	(3) neither the owner nor the spouse of the owner claims another agricultural 
250.13 	homestead in Minnesota; and
250.14 	(4) neither the owner nor the person actively farming the property lives farther 
250.15 	than four townships or cities, or a combination of four townships or cities, from the 
250.16 	agricultural property, except that if the owner or the owner's spouse is required to live in 
250.17 	employer-provided housing, the owner or owner's spouse, whichever is actively farming 
250.18 	the agricultural property, may live more than four townships or cities, or combination of 
250.19 	four townships or cities from the agricultural property.; and
250.20 	(5) the owner or the person actively farming the property is farming at least 40 
250.21 	acres of the property.
250.22 	The relationship under this paragraph may be either by blood or marriage.
250.23 	(ii) Real property held by a trustee under a trust is eligible for agricultural homestead 
250.24 	classification under this paragraph if the qualifications in clause (i) are met, except that 
250.25 	"owner" means the grantor of the trust.
250.26 	(iii) Property containing the residence of an owner who owns qualified property 
250.27 	under clause (i) shall be classified as part of the owner's agricultural homestead, if that 
250.28 	property is also used for noncommercial storage or drying of agricultural crops.
250.29 	(c) Noncontiguous land shall be included as part of a homestead under section 
250.30 	273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a 
250.31 	and the detached land is located in the same township or city, or not farther than four 
250.32 	townships or cities or combination thereof from the homestead. Any taxpayer of these 
250.33 	noncontiguous lands must notify the county assessor that the noncontiguous land is part of 
250.34 	the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer 
250.35 	must also notify the assessor of the other county.
251.1 	(d) Agricultural land used for purposes of a homestead and actively farmed by a 
251.2 	person holding a vested remainder interest in it must be classified as a homestead under 
251.3 	section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, 
251.4 	any other dwellings on the land used for purposes of a homestead by persons holding 
251.5 	vested remainder interests who are actively engaged in farming the property, and up to 
251.6 	one acre of the land surrounding each homestead and reasonably necessary for the use of 
251.7 	the dwelling as a home, must also be assessed class 2a.
251.8 	(e) Agricultural land and buildings that were class 2a homestead property under 
251.9 	section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain 
251.10 	classified as agricultural homesteads for subsequent assessments if:
251.11 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
251.12 	homestead as a result of the April 1997 floods;
251.13 	(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, 
251.14 	or Wilkin;
251.15 	(3) the agricultural land and buildings remain under the same ownership for the 
251.16 	current assessment year as existed for the 1997 assessment year and continue to be used 
251.17 	for agricultural purposes;
251.18 	(4) the dwelling occupied by the owner is located in Minnesota and is within 30 
251.19 	miles of one of the parcels of agricultural land that is owned by the taxpayer; and
251.20 	(5) the owner notifies the county assessor that the relocation was due to the 1997 
251.21 	floods, and the owner furnishes the assessor any information deemed necessary by the 
251.22 	assessor in verifying the change in dwelling. Further notifications to the assessor are not 
251.23 	required if the property continues to meet all the requirements in this paragraph and any 
251.24 	dwellings on the agricultural land remain uninhabited.
251.25 	(f) Agricultural land and buildings that were class 2a homestead property under 
251.26 	section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain 
251.27 	classified agricultural homesteads for subsequent assessments if:
251.28 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
251.29 	homestead as a result of damage caused by a March 29, 1998, tornado;
251.30 	(2) the property is located in the county of Blue Earth, Brown, Cottonwood, 
251.31 	LeSueur, Nicollet, Nobles, or Rice;
251.32 	(3) the agricultural land and buildings remain under the same ownership for the 
251.33 	current assessment year as existed for the 1998 assessment year;
251.34 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles 
251.35 	of one of the parcels of agricultural land that is owned by the taxpayer; and
252.1 	(5) the owner notifies the county assessor that the relocation was due to a March 29, 
252.2 	1998, tornado, and the owner furnishes the assessor any information deemed necessary by 
252.3 	the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 
252.4 	owner must notify the assessor by December 1, 1998. Further notifications to the assessor 
252.5 	are not required if the property continues to meet all the requirements in this paragraph 
252.6 	and any dwellings on the agricultural land remain uninhabited.
252.7 	(g) Agricultural property consisting of at least 40 acres of a family farm corporation, 
252.8 	joint family farm venture, family farm limited liability company, or partnership operating 
252.9 	a family farm as described under subdivision 8 shall be classified homestead, to the same 
252.10 	extent as other agricultural homestead property, if all of the following criteria are met:
252.11 	(1) a shareholder, member, or partner of that entity is actively farming the 
252.12 	agricultural property;
252.13 	(2) that shareholder, member, or partner who is actively farming the agricultural 
252.14 	property is a Minnesota resident;
252.15 	(3) neither that shareholder, member, or partner, nor the spouse of that shareholder, 
252.16 	member, or partner claims another agricultural homestead in Minnesota; and
252.17 	(4) that shareholder, member, or partner does not live farther than four townships or 
252.18 	cities, or a combination of four townships or cities, from the agricultural property.; and
252.19 	(5) the shareholder, member, or partner actively farming the property is farming 
252.20 	at least 40 acres of the property.
252.21 	Homestead treatment applies under this paragraph for property leased to a family 
252.22 	farm corporation, joint farm venture, limited liability company, or partnership operating a 
252.23 	family farm if legal title to the property is in the name of an individual who is a member, 
252.24 	shareholder, or partner in the entity.
252.25 	(h) To be eligible for the special agricultural homestead under this subdivision, an 
252.26 	initial full application must be submitted to the county assessor where the property is 
252.27 	located. Owners and the persons who are actively farming the property shall be required 
252.28 	to complete only a one-page abbreviated version of the application in each subsequent 
252.29 	year provided that none of the following items have changed since the initial application:
252.30 	(1) the day-to-day operation, administration, and financial risks remain the same;
252.31 	(2) the owners and the persons actively farming the property continue to live within 
252.32 	the four townships or city criteria and are Minnesota residents;
252.33 	(3) the same operator of the agricultural property is listed with the Farm Service 
252.34 	Agency;
252.35 	(4) a Schedule F or equivalent income tax form was filed for the most recent year;
252.36 	(5) the property's acreage is unchanged; and
253.1 	(6) none of the property's acres have been enrolled in a federal or state farm program 
253.2 	since the initial application.
253.3 	The owners and any persons who are actively farming the property must include 
253.4 	the appropriate Social Security numbers, and sign and date the application. If any of the 
253.5 	specified information has changed since the full application was filed, the owner must 
253.6 	notify the assessor, and must complete a new application to determine if the property 
253.7 	continues to qualify for the special agricultural homestead. The commissioner of revenue 
253.8 	shall prepare a standard reapplication form for use by the assessors.

253.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2008 and 
253.10 	thereafter.

253.11 	Sec. 33. Minnesota Statutes 2006, section 273.124, subdivision 21, is amended to read:
253.12 		Subd. 21.Trust property; homestead. Real property held by a trustee under a trust 
253.13 	is eligible for classification as homestead property if:
253.14 	(1) the grantor or surviving spouse of the grantor of the trust occupies and uses the 
253.15 	property as a homestead;
253.16 	(2) a relative or surviving relative of the grantor who meets the requirements of 
253.17 	subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1, 
253.18 	paragraph (d), in the case of agricultural property, occupies and uses the property as 
253.19 	a homestead;
253.20 	(3) a family farm corporation, joint farm venture, limited liability company, or 
253.21 	partnership operating a family farm rents the property held by a trustee under a trust, and 
253.22 	the grantor, the spouse or surviving spouse of the grantor, or the sonchild or daughter
253.23 	grandchild of the grantor, who is also a shareholder, member, or partner of the corporation, 
253.24 	joint farm venture, limited liability company, or partnership occupies and uses the property 
253.25 	as a homestead, or is actively farming the property on behalf of the corporation, joint farm 
253.26 	venture, limited liability company, or partnership such that the grantor, the spouse or 
253.27 	surviving spouse of the grantor, or the child or grandchild of the grantor actively farming 
253.28 	the property is farming at least 40 acres of the property; or
253.29 	(4) a person who has received homestead classification for property taxes payable in 
253.30 	2000 on the basis of an unqualified legal right under the terms of the trust agreement to 
253.31 	occupy the property as that person's homestead and who continues to use the property as 
253.32 	a homestead or a person who received the homestead classification for taxes payable in 
253.33 	2005 under clause (3) who does not qualify under clause (3) for taxes payable in 2006 
253.34 	or thereafter but who continues to qualify under clause (3) as it existed for taxes payable 
253.35 	in 2005.
254.1 	For purposes of this subdivision, "grantor" is defined as the person creating or 
254.2 	establishing a testamentary, inter Vivos, revocable or irrevocable trust by written 
254.3 	instrument or through the exercise of a power of appointment.

254.4 	EFFECTIVE DATE. This section is effective the day following final enactment, 
254.5 	except that the requirement that at least 40 acres of the property be farmed by an eligible 
254.6 	person is effective for taxes payable in 2008 and thereafter.

254.7 	Sec. 34. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:
254.8 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) 
254.9 	and (c), real estate which is residential and used for homestead purposes is class 1a. In the 
254.10 	case of a duplex or triplex in which one of the units is used for homestead purposes, the 
254.11 	entire property is deemed to be used for homestead purposes. The market value of class 1a 
254.12 	property must be determined based upon the value of the house, garage, and land.
254.13 	The first $500,000 of market value of class 1a property has a net class rate of 
254.14 	one percent of its market value; and the market value of class 1a property that exceeds 
254.15 	$500,000 has a class rate of 1.25 percent of its market value.
254.16 	(b) Class 1b property includes homestead real estate or homestead manufactured 
254.17 	homes used for the purposes of a homestead by
254.18 	(1) any person who is blind as defined in section 256D.35, or the blind person and 
254.19 	the blind person's spouse; or
254.20 	(2) any person, hereinafter referred to as "veteran," who:
254.21 	(i) served in the active military or naval service of the United States; and
254.22 	(ii) is entitled to compensation under the laws and regulations of the United States 
254.23 	for permanent and total service-connected disability due to the loss, or loss of use, by 
254.24 	reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both 
254.25 	lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or 
254.26 	a wheelchair; and
254.27 	(iii) has acquired a special housing unit with special fixtures or movable facilities 
254.28 	made necessary by the nature of the veteran's disability, or the surviving spouse of the 
254.29 	deceased veteran for as long as the surviving spouse retains the special housing unit 
254.30 	as a homestead; or
254.31 	(3) any person who is permanently and totally disabled.
254.32 	Property is classified and assessed under clause (3) only if the government agency or 
254.33 	income-providing source certifies, upon the request of the homestead occupant, that the 
254.34 	homestead occupant satisfies the disability requirements of this paragraph.
255.1 	Property is classified and assessed pursuant to clause (1) only if the commissioner of 
255.2 	revenue certifies to the assessor that the homestead occupant satisfies the requirements 
255.3 	of this paragraph or the county assessor has approved the occupant's declaration under 
255.4 	section 273.1315.
255.5 	Permanently and totally disabled for the purpose of this subdivision means a 
255.6 	condition which is permanent in nature and totally incapacitates the person from working 
255.7 	at an occupation which brings the person an income. The first $32,000 market value of 
255.8 	class 1b property has a net class rate of .45 percent of its market value. The remaining 
255.9 	market value of class 1b property has a class rate using the rates for class 1a or class 2a 
255.10 	property, whichever is appropriate, of similar market value.
255.11 	(c) Class 1c property is commercial use real and personal property that abuts 
255.12 	a lakeshore line public water as defined in section 103G.005, subdivision 15, and is 
255.13 	devoted to temporary and seasonal residential occupancy for recreational purposes but 
255.14 	not devoted to commercial purposes for more than 250 days in the year preceding the 
255.15 	year of assessment, and that includes a portion used as a homestead by the owner, which 
255.16 	includes a dwelling occupied as a homestead by a shareholder of a corporation that owns 
255.17 	the resort, a partner in a partnership that owns the resort, or a member of a limited liability 
255.18 	company that owns the resort even if the title to the homestead is held by the corporation, 
255.19 	partnership, or limited liability company. For purposes of this clause, property is devoted 
255.20 	to a commercial purpose on a specific day if any portion of the property, excluding the 
255.21 	portion used exclusively as a homestead, is used for residential occupancy and a fee is 
255.22 	charged for residential occupancy. Class 1c property is composed of three or more rental 
255.23 	units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, 
255.24 	or individual camping site equipped with water and electrical hookups for recreational 
255.25 	vehicles. Class 1c property must provide recreational activities such as the rental of ice 
255.26 	fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; 
255.27 	provide marina services, launch services, or guide services; or sell bait and fishing tackle. 
255.28 	Any unit in which the right to use the property is transferred to an individual or entity 
255.29 	by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c even 
255.30 	though it may remain available for rent. A camping pad offered for rent by a property 
255.31 	that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental 
255.32 	agreement, as long as the use of the camping pad does not exceed 250 days. The portion of 
255.33 	the property used as a homestead is class 1a property under paragraph (a). The remainder 
255.34 	of the property is classified as follows: the first $500,000 of market value is tier I, the 
255.35 	next $1,700,000 of market value is tier II, and any remaining market value is tier III. 
255.36 	The class rates for class 1c are: tier I, 0.55 percent; tier II, 1.0 percent; and tier III, 1.25
256.1 	percent. If a class 1c resort property has any market value in tier III, the entire property 
256.2 	must meet the requirements of subdivision 25, paragraph (d), clause (1), to qualify for 
256.3 	class 1c treatment under this paragraph. Owners of real and personal property devoted to 
256.4 	temporary and seasonal residential occupancy for recreation purposes in which all or a 
256.5 	portion of the property was devoted to commercial purposes for not more than 250 days in 
256.6 	the year preceding the year of assessment desiring classification as class 1c, must submit a 
256.7 	declaration to the assessor designating the cabins or units occupied for 250 days or less in 
256.8 	the year preceding the year of assessment by January 15 of the assessment year. Those 
256.9 	cabins or units and a proportionate share of the land on which they are located must be 
256.10 	designated as class 1c as otherwise provided. The remainder of the cabins or units and 
256.11 	a proportionate share of the land on which they are located must be designated as class 
256.12 	3a commercial. The owner of property desiring designation as class 1c property must 
256.13 	provide guest registers or other records demonstrating that the units for which class 1c 
256.14 	designation is sought were not occupied for more than 250 days in the year preceding the 
256.15 	assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, 
256.16 	(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility 
256.17 	operated on a commercial basis not directly related to temporary and seasonal residential 
256.18 	occupancy for recreation purposes does not qualify for class 1c.
256.19 	(d) Class 1d property includes structures that meet all of the following criteria:
256.20 	(1) the structure is located on property that is classified as agricultural property under 
256.21 	section 273.13, subdivision 23;
256.22 	(2) the structure is occupied exclusively by seasonal farm workers during the time 
256.23 	when they work on that farm, and the occupants are not charged rent for the privilege of 
256.24 	occupying the property, provided that use of the structure for storage of farm equipment 
256.25 	and produce does not disqualify the property from classification under this paragraph;
256.26 	(3) the structure meets all applicable health and safety requirements for the 
256.27 	appropriate season; and
256.28 	(4) the structure is not salable as residential property because it does not comply 
256.29 	with local ordinances relating to location in relation to streets or roads.
256.30 	The market value of class 1d property has the same class rates as class 1a property 
256.31 	under paragraph (a).

256.32 	EFFECTIVE DATE. This section is effective for taxes payable in 2009 and 
256.33 	thereafter.

256.34 	Sec. 35. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:
257.1 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more 
257.2 	units and used or held for use by the owner or by the tenants or lessees of the owner 
257.3 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
257.4 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
257.5 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
257.6 	purposes, without regard to whether the property has been platted or subdivided. The 
257.7 	market value of class 4a property has a class rate of 1.25 percent.
257.8 	(b) Class 4b includes:
257.9 	(1) residential real estate containing less than four units that does not qualify as class 
257.10 	4bb, other than seasonal residential recreational property;
257.11 	(2) manufactured homes not classified under any other provision;
257.12 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
257.13 	farm classified under subdivision 23, paragraph (b) containing two or three units; and
257.14 	(4) unimproved property that is classified residential as determined under subdivision 
257.15 	33.
257.16 	The market value of class 4b property has a class rate of 1.25 percent.
257.17 	(c) Class 4bb includes:
257.18 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
257.19 	residential recreational property; and
257.20 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
257.21 	nonhomestead farm classified under subdivision 23, paragraph (b).
257.22 	Class 4bb property has the same class rates as class 1a property under subdivision 22.
257.23 	Property that has been classified as seasonal residential recreational property at 
257.24 	any time during which it has been owned by the current owner or spouse of the current 
257.25 	owner does not qualify for class 4bb.
257.26 	(d) Class 4c property includes:
257.27 	(1) except as provided in subdivision 22, paragraph (c), real and personal property 
257.28 	devoted to temporary and seasonal residential occupancy for recreation purposes, 
257.29 	including real and personal property devoted to temporary and seasonal residential 
257.30 	occupancy for recreation purposes and not devoted to commercial purposes for more 
257.31 	than 250 days in the year preceding the year of assessment. For purposes of this clause, 
257.32 	property is devoted to a commercial purpose on a specific day if any portion of the 
257.33 	property is used for residential occupancy, and a fee is charged for residential occupancy.
257.34 	Class 4c property is composed of three or more rental units. A "rental unit" is defined as a 
257.35 	cabin, condominium, townhouse, sleeping room, or individual camping site equipped with 
257.36 	water and electrical hookups for recreational vehicles. Class 4c property must provide 
258.1 	recreational activities such as renting ice fishing houses, boats and motors, snowmobiles, 
258.2 	downhill or cross-country ski equipment; provide marina services, launch services, or 
258.3 	guide services; or sell bait and fishing tackle. A camping pad offered for rent by a property 
258.4 	that otherwise qualifies for class 4c is also class 4c regardless of the term of the rental 
258.5 	agreement, as long as the use of the camping pad does not exceed 250 days. In order for 
258.6 	a property to be classified as class 4c, seasonal residential recreational for commercial 
258.7 	purposes, at least 40 percent of the annual gross lodging receipts related to the property 
258.8 	must be from business conducted during 90 consecutive days and either (i) at least 60 
258.9 	percent of all paid bookings by lodging guests during the year must be for periods of at 
258.10 	least two consecutive nights; or (ii) at least 20 percent of the annual gross receipts must 
258.11 	be from charges for rental of fish houses, boats and motors, snowmobiles, downhill or 
258.12 	cross-country ski equipment, or charges for marina services, launch services, and guide 
258.13 	services, or the sale of bait and fishing tackle. For purposes of this determination, a paid 
258.14 	booking of five or more nights shall be counted as two bookings. Class 4c also includes 
258.15 	commercial use real property used exclusively for recreational purposes in conjunction 
258.16 	with class 4c property devoted to temporary and seasonal residential occupancy for 
258.17 	recreational purposes, up to a total of two acres, provided the property is not devoted 
258.18 	to commercial recreational use for more than 250 days in the year preceding the year 
258.19 	of assessment and is located within two miles of the class 4c property with which it 
258.20 	is used. Owners of real and personal property devoted to temporary and seasonal 
258.21 	residential occupancy for recreation purposes and all or a portion of which was devoted 
258.22 	to commercial purposes for not more than 250 days in the year preceding the year of 
258.23 	assessment desiring classification as class 1c or 4c, must submit a declaration to the 
258.24 	assessor designating the cabins or units occupied for 250 days or less in the year preceding 
258.25 	the year of assessment by January 15 of the assessment year. Those cabins or units and a 
258.26 	proportionate share of the land on which they are located will must be designated as class 
258.27 	1c or 4c as otherwise provided. The remainder of the cabins or units and a proportionate 
258.28 	share of the land on which they are located will must be designated as class 3a. The owner 
258.29 	of property desiring designation as class 1c or 4c property must provide guest registers or 
258.30 	other records demonstrating that the units for which class 1c or 4c designation is sought 
258.31 	were not occupied for more than 250 days in the year preceding the assessment if so 
258.32 	requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, and
258.33 	(4) conference center or meeting room, and (5) other nonresidential facility operated on a 
258.34 	commercial basis not directly related to temporary and seasonal residential occupancy for 
258.35 	recreation purposes shall does not qualify for class 1c or 4c;
258.36 	(2) qualified property used as a golf course if:
259.1 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
259.2 	dues, but a membership fee may not be required in order to use the property for golfing, 
259.3 	and its green fees for golfing must be comparable to green fees typically charged by 
259.4 	municipal courses; and
259.5 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
259.6 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
259.7 	with the golf course is classified as class 3a property;
259.8 	(3) real property up to a maximum of one acre of land owned by a nonprofit 
259.9 	community service oriented organization; provided that the property is not used for a 
259.10 	revenue-producing activity for more than six days in the calendar year preceding the year 
259.11 	of assessment and the property is not used for residential purposes on either a temporary 
259.12 	or permanent basis. For purposes of this clause, a "nonprofit community service oriented 
259.13 	organization" means any corporation, society, association, foundation, or institution 
259.14 	organized and operated exclusively for charitable, religious, fraternal, civic, or educational 
259.15 	purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3), 
259.16 	(10), or (19) of the Internal Revenue Code of 1986, as amended through December 31, 
259.17 	1990. For purposes of this clause, "revenue-producing activities" shall include but not be 
259.18 	limited to property or that portion of the property that is used as an on-sale intoxicating 
259.19 	liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant 
259.20 	open to the public, bowling alley, a retail store, gambling conducted by organizations 
259.21 	licensed under chapter 349, an insurance business, or office or other space leased or 
259.22 	rented to a lessee who conducts a for-profit enterprise on the premises. Any portion of 
259.23 	the property which is used for revenue-producing activities for more than six days in the 
259.24 	calendar year preceding the year of assessment shall be assessed as class 3a. The use of 
259.25 	the property for social events open exclusively to members and their guests for periods of 
259.26 	less than 24 hours, when an admission is not charged nor any revenues are received by the 
259.27 	organization shall not be considered a revenue-producing activity;
259.28 	(4) postsecondary student housing of not more than one acre of land that is owned by 
259.29 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
259.30 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
259.31 	miles of the border of a college campus;
259.32 	(5) manufactured home parks as defined in section 327.14, subdivision 3;
259.33 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
259.34 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
259.35 	and is located within the metropolitan area as defined in section 473.121, subdivision 2;
260.1 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
260.2 	under section 272.01, subdivision 2, and the land on which it is located, provided that:
260.3 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
260.4 	Airports Commission, or group thereof; and
260.5 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
260.6 	leased premise, prohibits commercial activity performed at the hangar.
260.7 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
260.8 	be filed by the new owner with the assessor of the county where the property is located 
260.9 	within 60 days of the sale;
260.10 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
260.11 	section 272.01, subdivision 2, and the land on which it is located, provided that:
260.12 	(i) the land abuts a public airport; and
260.13 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
260.14 	agreement restricting the use of the premises, prohibiting commercial use or activity 
260.15 	performed at the hangar; and
260.16 	(9) residential real estate, a portion of which is used by the owner for homestead 
260.17 	purposes, and that is also a place of lodging, if all of the following criteria are met:
260.18 	(i) rooms are provided for rent to transient guests that generally stay for periods 
260.19 	of 14 or fewer days;
260.20 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
260.21 	in the basic room rate;
260.22 	(iii) meals are not provided to the general public except for special events on fewer 
260.23 	than seven days in the calendar year preceding the year of the assessment; and
260.24 	(iv) the owner is the operator of the property.
260.25 	The market value subject to the 4c classification under this clause is limited to five rental 
260.26 	units. Any rental units on the property in excess of five, must be valued and assessed as 
260.27 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
260.28 	be classified as class 1a property under subdivision 22.
260.29 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
260.30 	parcel of seasonal residential recreational property not used for commercial purposes has 
260.31 	the same class rates as class 4bb property, (ii) manufactured home parks assessed under 
260.32 	clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 
260.33 	residential recreational property has a class rate of one percent for the first $500,000 of 
260.34 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
260.35 	property described in clause (4) has a class rate of one percent, (v) the market value of 
260.36 	property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that 
261.1 	portion of the market value of property in clause (9) qualifying for class 4c property 
261.2 	has a class rate of 1.25 percent.
261.3 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
261.4 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
261.5 	of the units in the building qualify as low-income rental housing units as certified under 
261.6 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
261.7 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
261.8 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
261.9 	land as the qualifying low-income rental housing units are to the total units in the building. 
261.10 	For all properties qualifying as class 4d, the market value determined by the assessor must 
261.11 	be based on the normal approach to value using normal unrestricted rents.
261.12 	Class 4d property has a class rate of 0.75 percent.

261.13 	EFFECTIVE DATE. This section is effective for taxes payable in 2009 and 
261.14 	thereafter.

261.15 	Sec. 36. Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read:
261.16 		Subd. 4.Disparity reduction credit. (a) Beginning with taxes payable in 1989, 
261.17 	class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1) 
261.18 	the property is located in a border city that has an enterprise zone designated pursuant 
261.19 	to section 469.168, subdivision 4; (2) the property is located in a city with a population 
261.20 	greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the 
261.21 	city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city 
261.22 	in another state; and (4) the adjacent city in the other state has a population of greater than 
261.23 	5,000 and less than 75,000 according to the 1980 decennial census. 
261.24 	(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 
261.25 	property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class 
261.26 	3b property to 2.3 percent of market value.
261.27 	(c) The county auditor shall annually certify the costs of the credits to the 
261.28 	Department of Revenue. The department shall reimburse local governments for the 
261.29 	property taxes foregone as the result of the credits in proportion to their total levies.

261.30 	EFFECTIVE DATE. This section is effective retroactively for taxes payable in 
261.31 	2001 and thereafter.

261.32 	Sec. 37. Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read:
262.1 		Subd. 2.Listing and assessment by commissioner. The personal property, 
262.2 	consisting of the pipeline system of mains, pipes, and equipment attached thereto, of 
262.3 	pipeline companies and others engaged in the operations or business of transporting 
262.4 	natural gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed 
262.5 	with and assessed by the commissioner of revenue and the values provided to the city 
262.6 	or county assessor by order. This subdivision shall not apply to the assessment of 
262.7 	the products transported through the pipelines nor to the lines of local commercial gas 
262.8 	companies engaged primarily in the business of distributing gas to consumers at retail nor 
262.9 	to pipelines used by the owner thereof to supply natural gas or other petroleum products 
262.10 	exclusively for such owner's own consumption and not for resale to others. If more than 
262.11 	85 percent of the natural gas or other petroleum products actually transported over the 
262.12 	pipeline is used for the owner's own consumption and not for resale to others, then this 
262.13 	subdivision shall not apply; provided, however, that in that event, the pipeline shall be 
262.14 	assessed in proportion to the percentage of gas actually transported over such pipeline that 
262.15 	is not used for the owner's own consumption. On or before June 30, the commissioner 
262.16 	shall certify to the auditor of each county, the amount of such personal property assessment 
262.17 	against each company in each district in which such property is located.

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

262.19 	Sec. 38. Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read:
262.20 		Subd. 2.Listing and assessment by commissioner. Transmission lines of less 
262.21 	than 69 kv, transmission lines of 69 kv and above located in an unorganized township, 
262.22 	and distribution lines, and equipment attached thereto, having a fixed situs outside the 
262.23 	corporate limits of cities except distribution lines taxed as provided in sections 273.40
262.24 	and 273.41, shall be listed with and assessed by the commissioner of revenue in the 
262.25 	county where situated and the values provided to the city or county assessor by order. 
262.26 	The commissioner shall assess such property at the percentage of market value fixed by 
262.27 	law; and, on or before June 30, shall certify to the auditor of each county in which such 
262.28 	property is located the amount of the assessment made against each company and person 
262.29 	owning such property. 

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

262.31 	Sec. 39. Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read:
262.32 		Subdivision 1.Report required. Every electric light, power, gas, water, express, 
262.33 	stage, and transportation company and pipeline doing business in Minnesota shall 
263.1 	annually file with the commissioner on or before March 31 a report under oath setting 
263.2 	forth the information prescribed by the commissioner to enable the commissioner to make 
263.3 	valuations, recommended valuations, and equalization required under sections 273.33, 
263.4 	273.35, 273.36, and273.37, and 273.3711. If all the required information is not available 
263.5 	on March 31, the company or pipeline shall file the information that is available on or 
263.6 	before March 31, and the balance of the information as soon as it becomes available. 

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

263.8 	Sec. 40. [273.3711] RECOMMENDED AND ORDERED VALUES.
263.9 	For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372, 
263.10 	all values not required to be listed and assessed by the commissioner of revenue are 
263.11 	recommended values.

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

263.13 	Sec. 41. Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read:
263.14 		Subdivision 1.Ordinary board; meetings, deadlines, grievances. (a) The town 
263.15 	board of a town, or the council or other governing body of a city, is the board of appeal 
263.16 	and equalization except (1) in cities whose charters provide for a board of equalization or 
263.17 	(2) in any city or town that has transferred its local board of review power and duties to 
263.18 	the county board as provided in subdivision 3. The county assessor shall fix a day and 
263.19 	time when the board or the board of equalization shall meet in the assessment districts 
263.20 	of the county. Notwithstanding any law or city charter to the contrary, a city board of 
263.21 	equalization shall be referred to as a board of appeal and equalization. On or before 
263.22 	February 15 of each year the assessor shall give written notice of the time to the city or 
263.23 	town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings 
263.24 	must be held between April 1 and May 31 each year. The clerk shall give published and 
263.25 	posted notice of the meeting at least ten days before the date of the meeting.
263.26 	The board shall meet at the office of the clerk to review the assessment and 
263.27 	classification of property in the town or city. No changes in valuation or classification 
263.28 	which are intended to correct errors in judgment by the county assessor may be made by 
263.29 	the county assessor after the board has adjourned in those cities or towns that hold a 
263.30 	local board of review; however, corrections of errors that are merely clerical in nature or 
263.31 	changes that extend homestead treatment to property are permitted after adjournment until 
263.32 	the tax extension date for that assessment year. The changes must be fully documented and 
263.33 	maintained in the assessor's office and must be available for review by any person. A copy 
264.1 	of the changes made during this period in those cities or towns that hold a local board of 
264.2 	review must be sent to the county board no later than December 31 of the assessment year.
264.3 	(b) The board shall determine whether the taxable property in the town or city has 
264.4 	been properly placed on the list and properly valued by the assessor. If real or personal 
264.5 	property has been omitted, the board shall place it on the list with its market value, and 
264.6 	correct the assessment so that each tract or lot of real property, and each article, parcel, 
264.7 	or class of personal property, is entered on the assessment list at its market value. No 
264.8 	assessment of the property of any person may be raised unless the person has been 
264.9 	duly notified of the intent of the board to do so. On application of any person feeling 
264.10 	aggrieved, the board shall review the assessment or classification, or both, and correct 
264.11 	it as appears just. The board may not make an individual market value adjustment or 
264.12 	classification change that would benefit the property if the owner or other person having 
264.13 	control over the property has refused the assessor access to inspect the property and the 
264.14 	interior of any buildings or structures as provided in section 273.20. A board member 
264.15 	shall not participate in any actions of the board which result in market value adjustments 
264.16 	or classification changes to property owned by the board member, the spouse, parent, 
264.17 	stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, 
264.18 	or niece of a board member, or property in which a board member has a financial interest. 
264.19 	The relationship may be by blood or marriage.
264.20 	(c) A local board may reduce assessments upon petition of the taxpayer but the total 
264.21 	reductions must not reduce the aggregate assessment made by the county assessor by more 
264.22 	than one percent. If the total reductions would lower the aggregate assessments made by 
264.23 	the county assessor by more than one percent, none of the adjustments may be made. The 
264.24 	assessor shall correct any clerical errors or double assessments discovered by the board 
264.25 	without regard to the one percent limitation.
264.26 	(d) A local board does not have authority to grant an exemption or to order property 
264.27 	removed from the tax rolls.
264.28 	(e) A majority of the members may act at the meeting, and adjourn from day to day 
264.29 	until they finish hearing the cases presented. The assessor shall attend, with the assessment 
264.30 	books and papers, and take part in the proceedings, but must not vote. The county assessor, 
264.31 	or an assistant delegated by the county assessor shall attend the meetings. The board shall 
264.32 	list separately, on a form appended to the assessment book, all omitted property added 
264.33 	to the list by the board and all items of property increased or decreased, with the market 
264.34 	value of each item of property, added or changed by the board, placed opposite the item. 
264.35 	The county assessor shall enter all changes made by the board in the assessment book.
265.1 	(f) Except as provided in subdivision 3, if a person fails to appear in person, by 
265.2 	counsel, or by written communication before the board after being duly notified of the 
265.3 	board's intent to raise the assessment of the property, or if a person feeling aggrieved by an 
265.4 	assessment or classification fails to apply for a review of the assessment or classification, 
265.5 	the person may not appear before the county board of appeal and equalization for a review 
265.6 	of the assessment or classification. This paragraph does not apply if an assessment was 
265.7 	made after the local board meeting, as provided in section 273.01, or if the person can 
265.8 	establish not having received notice of market value at least five days before the local 
265.9 	board meeting.
265.10 	(g) The local board must complete its work and adjourn within 20 days from the 
265.11 	time of convening stated in the notice of the clerk, unless a longer period is approved by 
265.12 	the commissioner of revenue. No action taken after that date is valid. All complaints 
265.13 	about an assessment or classification made after the meeting of the board must be heard 
265.14 	and determined by the county board of equalization. A nonresident may, at any time, 
265.15 	before the meeting of the board file written objections to an assessment or classification 
265.16 	with the county assessor. The objections must be presented to the board at its meeting by 
265.17 	the county assessor for its consideration.

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

265.19 	Sec. 42. Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read:
265.20 		Subdivision 1.Members; meetings; rules for equalizing assessments. The county 
265.21 	commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be 
265.22 	present, the deputy county auditor, or, if there is no deputy, the court administrator of the 
265.23 	district court, shall form a board for the equalization of the assessment of the property 
265.24 	of the county, including the property of all cities whose charters provide for a board of 
265.25 	equalization. This board shall be referred to as the county board of appeal and equalization. 
265.26 	The board shall meet annually, on the date specified in section 274.14, at the office of the 
265.27 	auditor. Each member shall take an oath to fairly and impartially perform duties as a 
265.28 	member. Members shall not participate in any actions of the board which result in market 
265.29 	value adjustments or classification changes to property owned by the board member, the 
265.30 	spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, 
265.31 	aunt, nephew, or niece of a board member, or property in which a board member has a 
265.32 	financial interest. The relationship may be by blood or marriage. The board shall examine 
265.33 	and compare the returns of the assessment of property of the towns or districts, and 
265.34 	equalize them so that each tract or lot of real property and each article or class of personal 
265.35 	property is entered on the assessment list at its market value, subject to the following rules: 
266.1 	(1) The board shall raise the valuation of each tract or lot of real property which 
266.2 	in its opinion is returned below its market value to the sum believed to be its market 
266.3 	value. The board must first give notice of intention to raise the valuation to the person in 
266.4 	whose name it is assessed, if the person is a resident of the county. The notice must fix 
266.5 	a time and place for a hearing.
266.6 	(2) The board shall reduce the valuation of each tract or lot which in its opinion is 
266.7 	returned above its market value to the sum believed to be its market value.
266.8 	(3) The board shall raise the valuation of each class of personal property which 
266.9 	in its opinion is returned below its market value to the sum believed to be its market 
266.10 	value. It shall raise the aggregate value of the personal property of individuals, firms, or 
266.11 	corporations, when it believes that the aggregate valuation, as returned, is less than the 
266.12 	market value of the taxable personal property possessed by the individuals, firms, or 
266.13 	corporations, to the sum it believes to be the market value. The board must first give notice 
266.14 	to the persons of intention to do so. The notice must set a time and place for a hearing.
266.15 	(4) The board shall reduce the valuation of each class of personal property that 
266.16 	is returned above its market value to the sum it believes to be its market value. Upon 
266.17 	complaint of a party aggrieved, the board shall reduce the aggregate valuation of the 
266.18 	individual's personal property, or of any class of personal property for which the individual 
266.19 	is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes 
266.20 	was the market value of the individual's personal property of that class.
266.21 	(5) The board must not reduce the aggregate value of all the property of its county, as 
266.22 	submitted to the county board of equalization, with the additions made by the auditor under 
266.23 	this chapter, by more than one percent of its whole valuation. The board may raise the 
266.24 	aggregate valuation of real property, and of each class of personal property, of the county, 
266.25 	or of any town or district of the county, when it believes it is below the market value of the 
266.26 	property, or class of property, to the aggregate amount it believes to be its market value.
266.27 	(6) The board shall change the classification of any property which in its opinion 
266.28 	is not properly classified.
266.29 	(7) The board does not have the authority to grant an exemption or to order property 
266.30 	removed from the tax rolls.

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

266.32 	Sec. 43. [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION 
266.33 	COURSE AND MEETING REQUIREMENTS.
266.34 		Subdivision 1.Handbook for county boards. By no later than January 1, 2009, the 
266.35 	commissioner of revenue must develop a handbook detailing procedures, responsibilities, 
267.1 	and requirements for county boards of appeal and equalization. The handbook must 
267.2 	include, but need not be limited to, the role of the county board in the assessment process, 
267.3 	the legal and policy reasons for fair and impartial appeal and equalization hearings, county 
267.4 	board meeting procedures that foster fair and impartial assessment reviews and other best 
267.5 	practices recommendations, quorum requirements for county boards, and explanations 
267.6 	of alternate methods of appeal.
267.7 		Subd. 2.Appeals and equalization course. Beginning in 2009, and each year 
267.8 	thereafter, there must be at least one member at each meeting of a county board of appeal 
267.9 	and equalization who has attended an appeals and equalization course developed or 
267.10 	approved by the commissioner within the last four years, as certified by the commissioner. 
267.11 	The course may be offered in conjunction with a meeting of the Minnesota Association 
267.12 	of Assessment Officers. The course content must include, but need not be limited to, a 
267.13 	review of the handbook developed by the commissioner under subdivision 1.
267.14 		Subd. 3.Proof of compliance; transfer of duties. (a) Any county that 
267.15 	conducts county boards of appeal and equalization meetings must provide proof to the 
267.16 	commissioner by December 1, 2009, and each year thereafter, that it is in compliance 
267.17 	with the requirements of subdivision 2. Beginning in 2009, this notice must also verify 
267.18 	that there was a quorum of voting members at each meeting of the board of appeal and 
267.19 	equalization in the current year. A county that does not comply with these requirements 
267.20 	is deemed to have transferred its board of appeal and equalization powers to the special 
267.21 	board of equalization appointed pursuant to section 274.13, subdivision 2, beginning 
267.22 	with the following year's assessment and continuing unless the powers are reinstated 
267.23 	under paragraph (c). A county that does not comply with the requirements of subdivision 
267.24 	2 and has not appointed a special board of equalization shall appoint a special board of 
267.25 	equalization before the following year's assessment.
267.26 	(b) The county shall notify the taxpayers when the board of appeal and equalization 
267.27 	for a county has been transferred to the special board of equalization under this subdivision 
267.28 	and, prior to the meeting time of the special board of equalization, the county shall make 
267.29 	available to those taxpayers a procedure for a review of the assessments, including, but 
267.30 	not limited to, open book meetings. This alternate review process must take place in 
267.31 	April and May.
267.32 	(c) A county board whose powers are transferred to the special board of equalization 
267.33 	under this subdivision may be reinstated by resolution of the county board and upon proof 
267.34 	of compliance with the requirements of subdivision 2. The resolution and proofs must be 
267.35 	provided to the commissioner by December 1 in order to be effective for the following 
267.36 	year's assessment.

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

268.2 	Sec. 44. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:
268.3 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare 
268.4 	and the county treasurer shall deliver after November 10 and on or before November 24 
268.5 	each year, by first class mail to each taxpayer at the address listed on the county's current 
268.6 	year's assessment roll, a notice of proposed property taxes. Upon written request by 
268.7 	the taxpayer, the treasurer may send the notice in electronic form or by electronic mail 
268.8 	instead of on paper or by ordinary mail.
268.9 	(b) The commissioner of revenue shall prescribe the form of the notice.
268.10 	(c) The notice must inform taxpayers that it contains the amount of property taxes 
268.11 	each taxing authority proposes to collect for taxes payable the following year. In the case 
268.12 	of a town, or in the case of the state general tax, the final tax amount will be its proposed 
268.13 	tax. In the case of taxing authorities required to hold a public meeting under subdivision 6, 
268.14 	the notice must clearly state that each taxing authority, including regional library districts 
268.15 	established under section 134.201, and including the metropolitan taxing districts as 
268.16 	defined in paragraph (i), but excluding all other special taxing districts and towns, will 
268.17 	hold a public meeting to receive public testimony on the proposed budget and proposed or 
268.18 	final property tax levy, or, in case of a school district, on the current budget and proposed 
268.19 	property tax levy. It must clearly state the time and place of each taxing authority's 
268.20 	meeting, a telephone number for the taxing authority that taxpayers may call if they have 
268.21 	questions related to the notice, and an address where comments will be received by mail.
268.22 	(d) The notice must state for each parcel:
268.23 	(1) the market value of the property as determined under section 273.11, and used 
268.24 	for computing property taxes payable in the following year and for taxes payable in the 
268.25 	current year as each appears in the records of the county assessor on November 1 of the 
268.26 	current year; and, in the case of residential property, whether the property is classified as 
268.27 	homestead or nonhomestead. The notice must clearly inform taxpayers of the years to 
268.28 	which the market values apply and that the values are final values;
268.29 	(2) the items listed below, shown separately by county, city or town, and state general 
268.30 	tax, net of the residential and agricultural homestead credit under section 273.1384, voter 
268.31 	approved school levy, other local school levy, and the sum of the special taxing districts, 
268.32 	and as a total of all taxing authorities:
268.33 	(i) the actual tax for taxes payable in the current year; and
268.34 	(ii) the proposed tax amount.
269.1 	If the county levy under clause (2) includes an amount for a lake improvement 
269.2 	district as defined under sections 103B.501 to 103B.581, the amount attributable for that 
269.3 	purpose must be separately stated from the remaining county levy amount.
269.4 	In the case of a town or the state general tax, the final tax shall also be its proposed 
269.5 	tax unless the town changes its levy at a special town meeting under section 365.52. If a 
269.6 	school district has certified under section 126C.17, subdivision 9, that a referendum will 
269.7 	be held in the school district at the November general election, the county auditor must 
269.8 	note next to the school district's proposed amount that a referendum is pending and that, 
269.9 	if approved by the voters, the tax amount may be higher than shown on the notice. In 
269.10 	the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the 
269.11 	levy for Minneapolis Park and Recreation shall be listed separately from the remaining 
269.12 	amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul 
269.13 	Library Agency must be listed separately from the remaining amount of the city's levy. 
269.14 	In the case of Ramsey County, any amount levied under section 134.07 may be listed 
269.15 	separately from the remaining amount of the county's levy. In the case of a parcel where 
269.16 	tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies, 
269.17 	the proposed tax levy on the captured value or the proposed tax levy on the tax capacity 
269.18 	subject to the areawide tax must each be stated separately and not included in the sum of 
269.19 	the special taxing districts; and
269.20 	(3) the increase or decrease between the total taxes payable in the current year and 
269.21 	the total proposed taxes, expressed as a percentage.
269.22 	For purposes of this section, the amount of the tax on homesteads qualifying under 
269.23 	the senior citizens' property tax deferral program under chapter 290B is the total amount 
269.24 	of property tax before subtraction of the deferred property tax amount.
269.25 	(e) The notice must clearly state that the proposed or final taxes do not include 
269.26 	the following:
269.27 	(1) special assessments;
269.28 	(2) levies approved by the voters after the date the proposed taxes are certified, 
269.29 	including bond referenda and school district levy referenda;
269.30 	(3) a levy limit increase approved by the voters by the first Tuesday after the first 
269.31 	Monday in November of the levy year as provided under section 275.73;
269.32 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster 
269.33 	occurring after the date the proposed taxes are certified;
269.34 	(5) amounts necessary to pay tort judgments against the taxing authority that become 
269.35 	final after the date the proposed taxes are certified; and
270.1 	(6) the contamination tax imposed on properties which received market value 
270.2 	reductions for contamination.
270.3 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or 
270.4 	the county treasurer to deliver the notice as required in this section does not invalidate the 
270.5 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
270.6 	(g) If the notice the taxpayer receives under this section lists the property as 
270.7 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
270.8 	applicable deadline, and the property qualifies for the homestead classification in that 
270.9 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
270.10 	in the following year.
270.11 	(h) In the case of class 4 residential property used as a residence for lease or rental 
270.12 	periods of 30 days or more, the taxpayer must either:
270.13 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 
270.14 	renter, or lessee; or
270.15 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
270.16 	The notice must be mailed or posted by the taxpayer by November 27 or within 
270.17 	three days of receipt of the notice, whichever is later. A taxpayer may notify the county 
270.18 	treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to 
270.19 	which the notice must be mailed in order to fulfill the requirements of this paragraph.
270.20 	(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special 
270.21 	taxing districts" means the following taxing districts in the seven-county metropolitan area 
270.22 	that levy a property tax for any of the specified purposes listed below:
270.23 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 
270.24 	473.446, 473.521, 473.547, or 473.834;
270.25 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 
270.26 	and
270.27 	(3) Metropolitan Mosquito Control Commission under section 473.711.
270.28 	For purposes of this section, any levies made by the regional rail authorities in the 
270.29 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
270.30 	398A shall be included with the appropriate county's levy and shall be discussed at that 
270.31 	county's public hearing.
270.32 	(j) The governing body of a county, city, or school district may, with the consent 
270.33 	of the county board, include supplemental information with the statement of proposed 
270.34 	property taxes about the impact of state aid increases or decreases on property tax 
270.35 	increases or decreases and on the level of services provided in the affected jurisdiction. 
270.36 	This supplemental information may include information for the following year, the current 
271.1 	year, and for as many consecutive preceding years as deemed appropriate by the governing 
271.2 	body of the county, city, or school district. It may include only information regarding:
271.3 	(1) the impact of inflation as measured by the implicit price deflator for state and 
271.4 	local government purchases;
271.5 	(2) population growth and decline;
271.6 	(3) state or federal government action; and
271.7 	(4) other financial factors that affect the level of property taxation and local services 
271.8 	that the governing body of the county, city, or school district may deem appropriate to 
271.9 	include.
271.10 	The information may be presented using tables, written narrative, and graphic 
271.11 	representations and may contain instruction toward further sources of information or 
271.12 	opportunity for comment.

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

271.15 	Sec. 45. Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read:
271.16 		Subd. 5a.Public advertisement. (a) A city that has a population of more than 
271.17 	2,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph 
271.18 	(i), a regional library district established under section   134.201, or school district shall 
271.19 	advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or, 
271.20 	in the case of a school district, to review its current budget and proposed property taxes 
271.21 	payable in the following year, at a public hearing, if a public hearing is required under 
271.22 	subdivision 6. The notice must be published not less than two business days nor more 
271.23 	than six business days before the hearing. 
271.24 	The advertisement must be at least one-eighth page in size of a standard-size or a 
271.25 	tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper 
271.26 	where legal notices and classified advertisements appear. The advertisement must be 
271.27 	published in an official newspaper of general circulation in the taxing authority. The 
271.28 	newspaper selected must be one of general interest and readership in the community, and 
271.29 	not one of limited subject matter. The advertisement must appear in a newspaper that is 
271.30 	published at least once per week.
271.31 	For purposes of this section, the metropolitan special taxing district's advertisement 
271.32 	must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer 
271.33 	Press.
271.34 	In addition to other requirements, a county and a city having a population of 
271.35 	more than 2,500 must show in the public advertisement required under this subdivision 
272.1 	the current local tax rate, the proposed local tax rate if no property tax levy increase 
272.2 	is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this 
272.3 	subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by 
272.4 	the city's or county's taxable net tax capacity.
272.5 	(b) Subject to the provisions of paragraph (g), the advertisement for school districts, 
272.6 	metropolitan special taxing districts, and regional library districts must be in the following 
272.7 	form, except that the notice for a school district may include references to the current 
272.8 	budget in regard to proposed property taxes.
272.9 	"NOTICE OF
272.10 	PROPOSED PROPERTY TAXES
272.11 	(School District/Metropolitan
272.12 	Special Taxing District/Regional
272.13 	Library District) of .........
272.14 	The governing body of ........ will soon hold budget hearings and vote on the property 
272.15 	taxes for (metropolitan special taxing district/regional library district services that will be 
272.16 	provided in (year)/school district services that will be provided in (year) and (year)).
272.17 	NOTICE OF PUBLIC HEARING:
272.18 	All concerned citizens are invited to attend a public hearing and express their opinions 
272.19 	on the proposed (school district/metropolitan special taxing district/regional library 
272.20 	district) budget and property taxes, or in the case of a school district, its current budget 
272.21 	and proposed property taxes, payable in the following year. The hearing will be held on 
272.22 	(Month/Day/Year) at (Time) at (Location, Address)."
272.23 	(c) Subject to the provisions of paragraph (g), the advertisement for cities and 
272.24 	counties must be in the following form.
272.25 	"NOTICE OF PROPOSED
272.26 	TOTAL BUDGET AND PROPERTY TAXES
272.27 	The (city/county) governing body or board of commissioners will hold a public hearing to 
272.28 	discuss the budget and to vote on the amount of property taxes to collect for services the 
272.29 	(city/county) will provide in (year).
272.30 	SPENDING: The total budget amounts below compare (city's/county's) (year) total actual 
272.31 	budget with the amount the (city/county) proposes to spend in (year).

272.32
272.33	(Year) Total Actual 
Budget
		Proposed (Year) 
Budget
		Change from 
(Year)-(Year)

272.34	$...........
		$...........
		.....%
	
273.1 	TAXES: The property tax amounts below compare that portion of the current budget 
273.2 	levied in property taxes in (city/county) for (year) with the property taxes the (city/county) 
273.3 	proposes to collect in (year).

273.4
273.5	(Year) Property 
Taxes
		Proposed (Year) 
Property Taxes
		Change from 
(Year)-(Year)

273.6	$...........
		$...........
		.....%
	
273.7 	LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax 
273.8 	levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.

273.9273.10
	(Year) Tax Rate
		(Year) Tax Rate if NO 
Levy Increase
		(Year) Proposed 
Tax Rate
	
273.11	...........
		...........
		.....
	
273.12 	ATTEND THE PUBLIC HEARING
273.13 	All (city/county) residents are invited to attend the public hearing of the (city/county) to 
273.14 	express your opinions on the budget and the proposed amount of (year) property taxes. 
273.15 	The hearing will be held on:
273.16 	(Month/Day/Year/Time)
273.17 	(Location/Address)
273.18 	If the discussion of the budget cannot be completed, a time and place for continuing the 
273.19 	discussion will be announced at the hearing. You are also invited to send your written 
273.20 	comments to:
273.21 	(City/County)
273.22 	(Location/Address)"
273.23 	(d) For purposes of this subdivision, the budget amounts listed on the advertisement 
273.24 	mean:
273.25 	(1) for cities, the total government fund expenditures, as defined by the state auditor 
273.26 	under section   471.6965, less any expenditures for improvements or services that are 
273.27 	specially assessed or charged under chapter 429, 430, 435, or the provisions of any other 
273.28 	law or charter; and 
273.29 	(2) for counties, the total government fund expenditures, as defined by the state 
273.30 	auditor under section   375.169, less any expenditures for direct payments to recipients or 
273.31 	providers for the human service aids listed below: 
273.32 	(i) Minnesota family investment program under chapters 256J and 256K;
273.33 	(ii) medical assistance under sections   256B.041, subdivision 5, and   256B.19, 
273.34 	subdivision 1; 
273.35 	(iii) general assistance medical care under section   256D.03, subdivision 6; 
273.36 	(iv) general assistance under section   256D.03, subdivision 2; 
274.1 	(v) emergency assistance under section   256J.48; 
274.2 	(vi) Minnesota supplemental aid under section   256D.36, subdivision 1; 
274.3 	(vii) preadmission screening under section   256B.0911, and alternative care grants 
274.4 	under section   256B.0913; 
274.5 	(viii) general assistance medical care claims processing, medical transportation and 
274.6 	related costs under section   256D.03, subdivision 4; 
274.7 	(ix) medical transportation and related costs under section   256B.0625, subdivisions 
274.8 	17 to 18a; 
274.9 	(x) group residential housing under section   256I.05, subdivision 8, transferred from 
274.10 	programs in clauses (iv) and (vi); or 
274.11 	(xi) any successor programs to those listed in clauses (i) to (x).
274.12 	(e) A city with a population of over 500 but not more than 2,500 that is required to 
274.13 	hold a public hearing under subdivision 6 must advertise by posted notice as defined in 
274.14 	section   645.12, subdivision 1. The advertisement must be posted at the time provided in 
274.15 	paragraph (a). It must be in the form required in paragraph (b). 
274.16 	(f) For purposes of this subdivision, the population of a city is the most recent 
274.17 	population as determined by the state demographer under section   4A.02. 
274.18 	(g) The commissioner of revenue, subject to the approval of the chairs of the house 
274.19 	and senate tax committees, shall annually prescribe the specific form and format of the 
274.20 	advertisements required under this subdivision, including such details as font size and 
274.21 	style, and spacing for the required items. The commissioner may prescribe alternate and 
274.22 	additional language for the advertisement for a taxing authority or for groups of taxing 
274.23 	authorities. At least two weeks before November 29 each year, the commissioner shall 
274.24 	provide a copy of the prescribed advertisements to the chairs of the committees of the 
274.25 	house of representatives and the senate with jurisdiction over taxes.

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

274.28 	Sec. 46. Minnesota Statutes 2006, section 275.067, is amended to read:
274.29 	275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE; 
274.30 	CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS.
274.31 	Special taxing districts as defined in section 275.066 organized on or before July 1 in 
274.32 	athe current calendar year may, and special taxing districts organized in a prior year that 
274.33 	have not previously certified a levy to the county auditor, are allowed to certify a levy to 
274.34 	the county auditor in that samethe current year for property taxes or special assessments 
275.1 	to be payable in the following calendar year to the extent that the special taxing district is 
275.2 	authorized by statute or special act to levy taxes or special assessments, but only if the 
275.3 	county auditor receives written notice from the district on or before July 1 of the current 
275.4 	year that the district may be certifying a levy in the current year, and the notice includes a 
275.5 	complete list or other description of the tax parcels in the district and a map showing the 
275.6 	boundaries of the district. Special taxing districts organized after July 1 in a calendar year 
275.7 	may not certify a levy of property taxes or special assessments to the county auditor under 
275.8 	the powers granted to them by statute or special act and subject to the requirements of 
275.9 	this section until the following calendar year. All special taxing districts must notify the 
275.10 	county auditor by July 1 in order for its boundaries for the levy to be certified that year 
275.11 	to be different than its boundaries for levies certified in prior years, and the notice must 
275.12 	include a complete list or other description of the tax parcels within the new boundaries 
275.13 	and a map showing the new boundaries of the district.

275.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2008 and 
275.15 	thereafter.

275.16 	Sec. 47. Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision 
275.17 	to read:
275.18 		Subd. 5.Electronic tax statements. Upon written request by the owner of real 
275.19 	property located in the county, or by the owner's agent, a county may send tax statements 
275.20 	in electric form or by electronic means instead of on paper or by mailing. For the purposes 
275.21 	of the payment deadlines specified in section 279.01, the postmark date on the envelope 
275.22 	containing these property tax statements is the date the statements were sent by electronic 
275.23 	means.

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

275.26 	Sec. 48. Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read:
275.27 		Subd. 2.Partial payments. The county treasurer may accept payments of more or 
275.28 	less than the exact amount of a tax installment due. Payments must be applied first to the 
275.29 	oldest installment that is due but which has not been fully paid. If the accepted payment is 
275.30 	less than the amount due, payments must bethe payment is applied first to the penalty 
275.31 	accrued for the year the payment is made or the installment being paid. Acceptance of 
275.32 	partial payment of tax does not constitute a waiver of the minimum payment required as a 
276.1 	condition for filing an appeal under section 278.03 or any other law, nor does it affect the 
276.2 	order of payment of delinquent taxes under section 280.39. 

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

276.5 	Sec. 49. Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read:
276.6 		Subdivision 1.Due dates; penalties. Except as provided in subdivision 3 or 4, on 
276.7 	May 16 or 21 days after the postmark date on the envelope containing the property tax 
276.8 	statement, whichever is later, a penalty shall accrueaccrues and thereafter beis charged 
276.9 	upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer. 
276.10 	The penalty shall beis at a rate of two percent on homestead property until May 31 and 
276.11 	four percent on June 1. The penalty on nonhomestead property shall beis at a rate of four 
276.12 	percent until May 31 and eight percent on June 1. This penalty shalldoes not accrue until 
276.13 	June 1 of each year, or 21 days after the postmark date on the envelope containing the 
276.14 	property tax statements, whichever is later, on commercial use real property used for 
276.15 	seasonal residential recreational purposes and classified as class 1c or 4c, and on other 
276.16 	commercial use real property classified as class 3a, provided that over 60 percent of the 
276.17 	gross income earned by the enterprise on the class 3a property is earned during the months 
276.18 	of May, June, July, and August. Any property owner of such class 3a property who pays
276.19 	In order for the first half of the tax due on theclass 3a property to be paid after May 15 
276.20 	and before June 1, or 21 days after the postmark date on the envelope containing the 
276.21 	property tax statement, whichever is later, shallwithout penalty, the owner of the property 
276.22 	must attach an affidavit to the payment attesting to compliance with the income provision 
276.23 	of this subdivision. Thereafter, for both homestead and nonhomestead property, on the 
276.24 	first day of each month beginning July 1, up to and including October 1 following, an 
276.25 	additional penalty of one percent for each month shall accrueaccrues and beis charged on 
276.26 	all such unpaid taxes provided that if the due date was extended beyond May 15 as the 
276.27 	result of any delay in mailing property tax statements no additional penalty shall accrue 
276.28 	if the tax is paid by the extended due date. If the tax is not paid by the extended due 
276.29 	date, then all penalties that would have accrued if the due date had been May 15 shall be 
276.30 	charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid 
276.31 	prior to May 16 or 21 days after the postmark date on the envelope containing the property 
276.32 	tax statement, whichever is later; and, if so paid, no penalty shall attach attaches; the 
276.33 	remaining one-half shallmay be paid at any time prior to October 16 following, without 
276.34 	penalty; but, if not so paid, then a penalty of two percent shall accrueaccrues thereon for 
276.35 	homestead property and a penalty of four percent on nonhomestead property. Thereafter, 
277.1 	for homestead property, on the first day of November an additional penalty of four percent 
277.2 	shall accrueaccrues and on the first day of December following, an additional penalty of 
277.3 	two percent shall accrueaccrues and beis charged on all such unpaid taxes. Thereafter, 
277.4 	for nonhomestead property, on the first day of November and December following, an 
277.5 	additional penalty of four percent for each month shall accrueaccrues and beis charged 
277.6 	on all such unpaid taxes. If one-half of such taxes shallare not be paid prior to May 16 or 
277.7 	21 days after the postmark date on the envelope containing the property tax statement, 
277.8 	whichever is later, the same may be paid at any time prior to October 16, with accrued 
277.9 	penalties to the date of payment added, and thereupon no penalty shall attachattaches to 
277.10 	the remaining one-half until October 16 following.
277.11 	This section applies to payment of personal property taxes assessed against 
277.12 	improvements to leased property, except as provided by section 277.01, subdivision 3. 
277.13 	A county may provide by resolution that in the case of a property owner that has 
277.14 	multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in 
277.15 	installments as provided in this subdivision.
277.16 	The county treasurer may accept payments of more or less than the exact amount of 
277.17 	a tax installment due. Payments must be applied first to the oldest installment that is due 
277.18 	but which has not been fully paid. If the accepted payment is less than the amount due, 
277.19 	payments must be applied first to the penalty accrued for the year the payment is made
277.20 	or the installment being paid. Acceptance of partial payment of tax does not constitute 
277.21 	a waiver of the minimum payment required as a condition for filing an appeal under 
277.22 	section 278.03 or any other law, nor does it affect the order of payment of delinquent 
277.23 	taxes under section 280.39. 

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

277.26 	Sec. 50. Minnesota Statutes 2006, section 290B.03, subdivision 2, is amended to read:
277.27 		Subd. 2.Qualifying homestead; defined. Qualifying homestead property is defined 
277.28 	as the dwelling occupied as the homeowner's principal residence and so much of the land 
277.29 	surrounding it as is reasonably necessary for use of the dwelling as a home and any other 
277.30 	property used for purposes of a homestead as defined in section 273.13, subdivisions 
277.31 	22 and 23, but not to exceed one acre. The homestead may be part of a multidwelling 
277.32 	building and the land on which it is built.  Property is not qualifying homestead property if 
277.33 	a person or entity other than the applicant or the applicant's spouse holds an interest in the 
277.34 	property as the vendor under a contract for deed or as a remainderperson.

278.1 	EFFECTIVE DATE. This section is effective for applications submitted on or 
278.2 	after January 1, 2007.

278.3 	Sec. 51. Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read:
278.4 		Subd. 3.Claimant. (a) "Claimant" means:
278.5 	(1) a person, as that term is defined in section 290.01, subdivision 2, who owns 
278.6 	forest land in Minnesota and files an application authorized by the Sustainable Forest 
278.7 	Incentive Act. Claimant includes;
278.8 	(2) a purchaser or grantee if property enrolled in the program was sold or transferred 
278.9 	after the original application was filed and prior to the annual incentive payment being 
278.10 	made.; or
278.11 	(3) an owner of land previously covered by an auxiliary forest contract that 
278.12 	automatically qualifies for inclusion in the Sustainable Forest Incentive Act program 
278.13 	pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
278.14 	 The purchaser or grantee must notify the commissioner in writing of the sale or 
278.15 	transfer of the property. Owners of land that qualifies for inclusion pursuant to section 
278.16 	88.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing 
278.17 	of the expiration of the auxiliary forest contract or land trade with a governmental unit and 
278.18 	submit an application to the commissioner by August 15 in order to be eligible to receive a 
278.19 	payment by October 1 of that same year. For purposes of section 290C.11, claimant also 
278.20 	includes any person bound by the covenant required in section 290C.04. 
278.21 	(b) No more than one claimant is entitled to a payment under this chapter with 
278.22 	respect to any tract, parcel, or piece of land enrolled under this chapter that has been 
278.23 	assigned the same parcel identification number. When enrolled forest land is owned by 
278.24 	two or more persons, the owners must determine between them which person  is eligible to 
278.25 	claim the payments provided under sections 290C.01 to 290C.11. In the case of property 
278.26 	sold or transferred, the former owner and the purchaser or grantee must determine between 
278.27 	them which person is eligible to claim the payments provided under sections 290C.01 to 
278.28 	290C.11. The owners, transferees, or grantees must notify the commissioner in writing 
278.29 	which person is eligible to claim the payments. 

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

278.31 	Sec. 52. Minnesota Statutes 2006, section 290C.04, is amended to read:
278.32 	290C.04 APPLICATIONS.
279.1 	(a) A landowner may apply to enroll forest land for the sustainable forest incentive 
279.2 	program under this chapter. The claimant must complete, sign, and submit an application 
279.3 	to the commissioner by September 30 in order for the land to become eligible beginning 
279.4 	in the next year. The application shall be on a form prescribed by the commissioner and 
279.5 	must include the information the commissioner deems necessary. At a minimum, the 
279.6 	application must show the following information for the land and the claimant: (i) the 
279.7 	claimant's Social Security number or state or federal business tax registration number and 
279.8 	date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's 
279.9 	parcel identification numbers for the tax parcels that completely contain the claimant's 
279.10 	forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment 
279.11 	in the program, (vi) the approved plan writer's signature and identification number, and 
279.12 	(vii) proof, in a form specified by the commissioner, that the claimant has executed and 
279.13 	acknowledged in the manner required by law for a deed, and recorded, a covenant that the 
279.14 	land is not and shall not be developed in a manner inconsistent with the requirements and 
279.15 	conditions of this chapter. The covenant shall state in writing that the covenant is binding 
279.16 	on the claimant and the claimant's successor or assignee, and that it runs with the land 
279.17 	for a period of not less than eight years. The commissioner shall specify the form of the 
279.18 	covenant and provide copies upon request. The covenant must include a legal description 
279.19 	that encompasses all the forest land that the claimant wishes to enroll under this section or 
279.20 	the certificate of title number for that land if it is registered land.
279.21 	(b) In all cases, the commissioner shall notify the claimant within 90 days after 
279.22 	receipt of a completed application that either the land has or has not been approved for 
279.23 	enrollment. A claimant whose application is denied may appeal the denial as provided in 
279.24 	section 290C.11, paragraph (a) 290C.13. 
279.25 	(c) Within 90 days after the denial of an application, or within 90 days after the 
279.26 	final resolution of any appeal related to the denial, the commissioner shall execute and 
279.27 	acknowledge a document releasing the land from the covenant required under this chapter. 
279.28 	The document must be mailed to the claimant and is entitled to be recorded.
279.29 	(d) The Social Security numbers collected from individuals under this section are 
279.30 	private data as provided in section 13.355. The  federal business tax registration number 
279.31 	and date of birth data collected under this section are also private data on individuals or 
279.32 	nonpublic data, as defined in section 13.02, subdivisions 9 and 12, but may be shared 
279.33 	with county assessors for purposes of tax administration and with county treasurers for 
279.34 	purposes of the revenue recapture under chapter 270A. 

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

280.1 	Sec. 53. Minnesota Statutes 2006, section 290C.05, is amended to read:
280.2 	290C.05 ANNUAL CERTIFICATION.
280.3 	On or before July 1 of each year, beginning with the year after the original claimant 
280.4 	has received an approved application, the commissioner shall send each claimant enrolled 
280.5 	under the sustainable forest incentive program a certification form. For purposes of this 
280.6 	section, the original claimant is the person that filed the first application under section 
280.7 	290C.04 to enroll the land in the program. The claimant must sign the certification, 
280.8 	attesting that the requirements and conditions for continued enrollment in the program are 
280.9 	currently being met, and must return the signed certification form to the commissioner by 
280.10 	August 15 of that same year. If the claimant does not return an annual certification form 
280.11 	by the due date, the provisions in section 290C.11 apply.

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

280.13 	Sec. 54. Minnesota Statutes 2006, section 290C.11, is amended to read:
280.14 	290C.11 PENALTIES FOR REMOVAL.
280.15 	(a) If the commissioner determines that land enrolled in the sustainable forest 
280.16 	incentive program is in violation of the conditions for enrollment as specified in section 
280.17 	290C.03, the commissioner shall notify the claimant of the intent to remove all enrolled 
280.18 	land from the sustainable forest incentive program. The claimant has 60 days to appeal 
280.19 	this determination under the provisions of section 290C.13. The appeal must be made 
280.20 	in writing to the commissioner, who shall, within 60 days, notify the claimant as to the 
280.21 	outcome of the appeal. Within 60 days after the commissioner denies an appeal, or within 
280.22 	120 days after the commissioner received a written appeal if the commissioner has not 
280.23 	made a determination in that time, the owner may appeal to Tax Court under chapter 271 
280.24 	as if the appeal is from an order of the commissioner.
280.25 	(b) If the commissioner determines the land is to be removed from the sustainable 
280.26 	forest incentive program, the claimant is liable for payment to the commissioner in the 
280.27 	amount equal to the payments received under this chapter for the previous four-year 
280.28 	period, plus interest. The claimant has 90 days to satisfy the payment for removal of land 
280.29 	from the sustainable forest incentive program under this section. If the penalty is not paid 
280.30 	within the 90-day period under this paragraph, the commissioner shall certify the amount 
280.31 	to the county auditor for collection as a part of the general ad valorem real property taxes 
280.32 	on the land in the following taxes payable year.

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

281.1 	Sec. 55. [290C.13] APPEALS.
281.2 		Subdivision 1.Claimant right to reconsideration. A claimant may obtain 
281.3 	reconsideration by the commissioner of a determination removing enrolled land from the 
281.4 	sustainable forest incentive program, a determination denying an application to enroll land 
281.5 	in the program, or a denial of part or all of an incentive payment by filing an administrative 
281.6 	appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if 
281.7 	the action taken by the commissioner is the outcome of an administrative appeal.
281.8 		Subd. 2.Appeal by claimant. A claimant who wishes to seek administrative review 
281.9 	must follow the procedures in subdivision 4.
281.10 		Subd. 3.Notice date. For purposes of this section, the term "notice date" means 
281.11 	the date of the determination removing enrolled land or the date of the notice denying an 
281.12 	application to enroll land or denying part or all of an incentive payment.
281.13 		Subd. 4.Time and content for administrative appeal. Within 60 days after the 
281.14 	notice date, the claimant must file a written appeal with the commissioner. The appeal 
281.15 	need not be in any particular form but must contain the following information:
281.16 	(1) name and address of the claimant;
281.17 	(2) if a corporation, the state of incorporation of the claimant, and the principal 
281.18 	place of business of the corporation;
281.19 	(3) the Minnesota or federal business identification number or Social Security 
281.20 	number of the claimant;
281.21 	(4) the date;
281.22 	(5) the periods involved and the amount of payment involved for each year or period;
281.23 	(6) the findings in the notice that the claimant disputes;
281.24 	(7) a summary statement that the claimant relies on for each exception; and
281.25 	(8) the claimant's signature or signature of the claimant's duly authorized agent.
281.26 		Subd. 5.Extensions. When requested in writing and within the time allowed for 
281.27 	filing an administrative appeal, the commissioner may extend the time for filing an appeal 
281.28 	for a period not more than 30 days from the expiration of the 60 days from the notice date.
281.29 		Subd. 6.Determination of appeal. On the basis of applicable law and available 
281.30 	information, the commissioner shall determine the validity, if any, in whole or in part, 
281.31 	of the appeal and notify the claimant of the decision. This notice must be in writing 
281.32 	and contain the basis for the determination.
281.33 		Subd. 7.Agreement determining issues under appeal. When it appears to be in 
281.34 	the best interests of the state, the commissioner may settle the amount of any incentive 
281.35 	payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties, 
281.36 	or interest that the commissioner has under consideration by virtue of an appeal filed 
282.1 	under this section. An agreement must be in writing and signed by the commissioner and 
282.2 	the claimant, or the claimant's representative authorized by the claimant to enter into an 
282.3 	agreement. The agreement is final and conclusive and, except upon a showing of fraud or 
282.4 	malfeasance, or misrepresentation of a material fact, the case must not be reopened as to 
282.5 	the matters agreed upon.
282.6 		Subd. 8.Appeal to Tax Court. Within 60 days after the commissioner denies 
282.7 	an appeal, or within 120 days after the commissioner received a written appeal if the 
282.8 	commissioner has not made a determination in that time, the claimant may appeal to Tax 
282.9 	Court under chapter 271 as if the appeal is from an order of the commissioner.
282.10 		Subd. 9.Exemption from Administrative Procedure Act. This section is not 
282.11 	subject to chapter 14.

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

282.13 	Sec. 56.  REPEALER.
 282.14 	(a) Minnesota Statutes 2006, section 270.073, is repealed.
282.15 	(b) Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52; 
282.16 	and 270.53, are repealed.
282.17 	(c) Minnesota Statutes 2006, section 279.01, subdivision 2, is repealed.

282.18 	EFFECTIVE DATE. This section is effective the day following final enactment, 
282.19 	except that paragraph (a) is effective beginning January 2, 2007, for taxes payable in 
282.20 	2008 and thereafter.

282.21 	ARTICLE 15
282.22 	DEPARTMENT MISCELLANEOUS

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

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

282.29 	Sec. 2. Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read:
282.30 		Subd. 2.Required and excluded tax preparers. (a) Subject to the limitations 
282.31 	of paragraph (b), the commissioner must publish lists of tax preparers as defined in 
283.1 	section 289A.60, subdivision 13, paragraph (f), who have been convicted under section 
283.2 	289A.63  or assessed penalties in excess of $1,000 under section 289A.60, subdivision 
283.3 	13, paragraph (a).
283.4 	(b) For the purposes of this section, tax preparers are not subject to publication if:
283.5 	(1) an administrative or court action contesting the penalty has been filed or served 
283.6 	and is unresolved at the time when notice would be given under subdivision 3;
283.7 	(2) an appeal period to contest the penalty has not expired; or
283.8 	(3) the commissioner has been notified that the tax preparer is deceased.

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

283.11 	Sec. 3. Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read:
283.12 		Subd. 3.State reimbursement. (a) By February 15 of each year, the treasurer of 
283.13 	the relief association shall apply to the commissioner of revenueEach year, to be eligible 
283.14 	for state reimbursement of the amount of supplemental benefits paid under subdivision 2 
283.15 	during the preceding calendar year, the relief association must apply to the commissioner 
283.16 	of revenue by February 15. By March 15 the commissioner shall reimburse the relief 
283.17 	association for the amount of the supplemental benefits paid to qualified recipients. 
283.18 	(b) The commissioner of revenue shall prescribe the form of and supporting 
283.19 	information that must be supplied as part of the application for state reimbursement.
283.20 	The commissioner of revenue shall reimburse the relief association by paying the 
283.21 	reimbursement amount to the treasurer of the municipality where the association is located. 
283.22 	Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement 
283.23 	to the treasurer of the association if the association has filed a financial report with the 
283.24 	municipality. If the relief association has not filed a financial report with the municipality, 
283.25 	the municipal treasurer shall delay transmission of the reimbursement payment to the 
283.26 	association until the complete financial report is filed. If the association has dissolved or 
283.27 	has been removed as a trustee of state aid, the treasurer shall deposit the money in a 
283.28 	special account in the municipal treasury, and the money may be disbursed only for the 
283.29 	purposes and in the manner provided in section 424A.08. When paid to the association, 
283.30 	(c) the reimbursement payment must be deposited in the special fund of the relief 
283.31 	association. 
283.32 	(d)(c) A sum sufficient to make the payments is appropriated from the general fund 
283.33 	to the commissioner of revenue.

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

284.1 	ARTICLE 16
284.2 	MISCELLANEOUS

284.3 	Section 1. Minnesota Statutes 2006, section 3.987, subdivision 1, is amended to read:
284.4 		Subdivision 1.Local impact notes. The commissioner of finance shall coordinate 
284.5 	the development of a local impact note for any proposed legislation introduced after June 
284.6 	30, 1997, or any rule proposed after December 31, 1999, upon request of the chair or the 
284.7 	ranking minority member of either legislative Tax Committee. Upon receipt of a request 
284.8 	to prepare a local impact note, the commissioner must notify the authors of the proposed 
284.9 	legislation or, for an administrative rule, the head of the relevant executive agency or 
284.10 	department, that the request has been made. The local impact note must be made available 
284.11 	to the public upon request. If the action is among the exceptions listed in section 3.988, 
284.12 	a local impact note need not be requested nor prepared. The commissioner shall make 
284.13 	a reasonable and timely estimate of the local fiscal impact on each type of political 
284.14 	subdivision that would result from the proposed legislation. The commissioner of finance 
284.15 	may require any political subdivision or the commissioner of an administrative agency 
284.16 	of the state to supply in a timely manner any information determined to be necessary to 
284.17 	determine local fiscal impact. The political subdivision, its representative association, or 
284.18 	commissioner shall convey the requested information to the commissioner of finance with 
284.19 	a signed statement to the effect that the information is accurate and complete to the best 
284.20 	of its ability. The political subdivision, its representative association, or commissioner, 
284.21 	when requested, shall update its determination of local fiscal impact based on actual 
284.22 	cost or revenue figures, improved estimates, or both. Upon completion of the note, the 
284.23 	commissioner must provide a copy to the authors of the proposed legislation or, for an 
284.24 	administrative rule, to the head of the relevant executive agency or department. 

284.25 	Sec. 2. Minnesota Statutes 2006, section 3.988, subdivision 3, is amended to read:
284.26 		Subd. 3.Miscellaneous exceptions. A local impact note or an attachment as 
284.27 	provided in section 3.987, subdivision 2, need not be prepared for the cost of a mandated 
284.28 	action if the law, including a rulemaking, containing the mandate: 
284.29 	(1) accommodates a specific local request;
284.30 	(2) results in no new local government duties;
284.31 	(3) leads to revenue losses from exemptions to taxes;
284.32 	(4) provided only clarifying or conforming, nonsubstantive charges on local 
284.33 	government;
285.1 	(5) imposes additional net local costs that are minor (an amount less than or equal 
285.2 	to one-half of one percent of the local revenue base as defined in section 477A.011, 
285.3 	subdivision 27, or $50,000, whichever is less for any single local government if the 
285.4 	mandate does not apply statewide or less than $1,000,000 if the mandate is statewide); 
285.5 	(6) is a law or executive order enacted before July 1, 1997, or a rule initially 
285.6 	implementing a law enacted before July 1, 1997;
285.7 	(7) implements something other than a law or executive order, such as a federal, 
285.8 	court, or voter-approved mandate;
285.9 	(8) results in savings that equal or exceed costs;
285.10 	(9) requires the holding of elections;
285.11 	(10) ensures due process or equal protection;
285.12 	(11) provides for the notification and conduct of public meetings;
285.13 	(12) establishes the procedures for administrative and judicial review of actions 
285.14 	taken by political subdivisions;
285.15 	(13) protects the public from malfeasance, misfeasance, or nonfeasance by officials 
285.16 	of political subdivisions;
285.17 	(14) relates directly to financial administration, including the levy, assessment, 
285.18 	and collection of taxes;
285.19 	(15) relates directly to the preparation and submission of financial audits necessary 
285.20 	to the administration of state laws; or
285.21 	(16) requires uniform standards to apply to public and private institutions without 
285.22 	differentiation.

285.23 	Sec. 3. Minnesota Statutes 2006, section 3.989, subdivision 2, is amended to read:
285.24 		Subd. 2.Report Compilation of local impact notes. The commissioner of finance 
285.25 	shall prepare by September 1, 2000, and by September 1 of each even-numbered year 
285.26 	thereafter, a report compilation of the costs of keylocal mandates established after June 
285.27 	30, 1997 impact notes requested by the legislature during the previous biennial session 
285.28 	as provided in section 3.987. The commissioner may consult with local government 
285.29 	representatives and legislative fiscal staff to determine which local impact notes were key.
285.30 	The commissioner shall include the statewide total of the statement of costs of local 
285.31 	mandates after June 30, 1997, as a notation in the state biennial budget.

285.32 	Sec. 4. Minnesota Statutes 2006, section 3.989, subdivision 3, is amended to read:
285.33 		Subd. 3.Certain political subdivisions; report. The political subdivisions that 
285.34 	have opted to administer class B state mandates shall report to the commissioner of 
286.1 	finance by September 1, 1998, and by September 1 of each year thereafter, identifying 
286.2 	each instance when revenue for a class B state mandate has fallen below 85 percent of 
286.3 	the total cost of the program and the political subdivision intends to cease administration 
286.4 	of the program.
286.5 	The commissioner shall forward a copy of the report to the chairs of the appropriate 
286.6 	funding committees of the senate and the house for proposed inclusion of the shortfall as a 
286.7 	line item appropriation in the state budget for the next fiscal year.
286.8 	The political subdivision may exercise its option to cease administration only if the 
286.9 	legislature has failed to include the shortfall as an appropriation in the state budget for 
286.10 	the next fiscal year.

286.11 	Sec. 5. Minnesota Statutes 2006, section 13.4965, subdivision 3, is amended to read:
286.12 		Subd. 3.Homestead applications. The classification and disclosure of certain 
286.13 	information collected to determine homestead classification are governed by section
286.14 	sections 273.124, subdivision 13, and 273.1315, subdivision 2.

286.15 	Sec. 6. Minnesota Statutes 2006, section 16A.103, subdivision 2, is amended to read:
286.16 		Subd. 2.Local revenue. In February and November of each year, the commissioner 
286.17 	of revenue shall prepare and deliver to the governor and the legislature forecasts of 
286.18 	revenue to be received by school districts as a group, counties as a group, and the group of 
286.19 	cities and towns that have a population of more than 2,500. The forecasts must assume 
286.20 	the continuation of current laws, projections of valuation changes in real property, and 
286.21 	reasonable estimates of projected growth in the national and state economies and affected 
286.22 	populations. Revenue must be estimated for property taxes, state and federal aids, local 
286.23 	sales taxes, if any, and a single projection for all other revenue for each group of affected 
286.24 	local governmental units. As part of the February forecast, the commissioner of revenue 
286.25 	shall report to the governor and legislature on which groups of local government units 
286.26 	exceeded the revenue targets of the governor and legislature in the most recent biennium.

286.27 	Sec. 7. Minnesota Statutes 2006, section 16A.152, subdivision 1a, is amended to read:
286.28 		Subd. 1a.Budget reserve. A budget reserve account is created in the general fund 
286.29 	in the state treasury. The commissioner of finance shall transfer to the budget reserve 
286.30 	account on July 1 of each odd-numbered year any amounts specifically appropriated by 
286.31 	law to the budget reserve. Notwithstanding section 11A.12, net income attributable to 
286.32 	investment of $629,000,000 in the account, rounded to the nearest $1,000,000, must be 
286.33 	credited to the account.

287.1 	Sec. 8. Minnesota Statutes 2006, section 16A.152, subdivision 1b, is amended to read:
287.2 		Subd. 1b.Budget reserve increase. On July 1, 2003 2007, the commissioner of 
287.3 	finance shall transfer $300,000,000 $629,000,000 to the budget reserve account in the 
287.4 	general fund. On July 1, 2004, the commissioner of finance shall transfer $296,000,000 to 
287.5 	the budget reserve account in the general fund. The amounts amount necessary for this 
287.6 	purpose are is appropriated from the general fund.

287.7 	Sec. 9. Minnesota Statutes 2006, section 16A.152, subdivision 2, is amended to read:
287.8 		Subd. 2.Additional revenues; priority. (a) If on the basis of a forecast of general 
287.9 	fund revenues and expenditures, the commissioner of finance determines that there will be 
287.10 	a positive unrestricted budgetary general fund balance at the close of the biennium, the 
287.11 	commissioner of finance must allocate money to the following accounts and purposes in 
287.12 	priority order:
287.13 	(1) the cash flow account established in subdivision 1 until that account reaches 
287.14 	$350,000,000;
287.15 	(2) the budget reserve account established in subdivision 1a until that account 
287.16 	reaches $653,000,000;
287.17 	(3) the amount necessary to increase the aid payment schedule for school district 
287.18 	aids and credits payments in section 127A.45 to not more than 90 percent rounded to the 
287.19 	nearest tenth of a percent without exceeding the amount available and with any remaining 
287.20 	funds deposited in the budget reserve; and
287.21 	(4) the amount necessary to restore all or a portion of the net aid reductions under 
287.22 	section 127A.441 and to reduce the property tax revenue recognition shift under section 
287.23 	123B.75, subdivision 5, paragraph (c), and Laws 2003, First Special Session chapter 9, 
287.24 	article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section 
287.25 	20, by the same amount.
287.26 	(b) The amounts necessary to meet the requirements of this section are appropriated 
287.27 	from the general fund within two weeks after the forecast is released or, in the case of 
287.28 	transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations 
287.29 	schedules otherwise established in statute.
287.30 	(c) To the extent that a positive unrestricted budgetary general fund balance is 
287.31 	projected, appropriations under this section must be made before section 16A.1522 takes 
287.32 	effect.
287.33 	(d) The commissioner of finance shall certify the total dollar amount of the 
287.34 	reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The 
287.35 	commissioner of education shall increase the aid payment percentage and reduce the 
288.1 	property tax shift percentage by these amounts and apply those reductions to the current 
288.2 	fiscal year and thereafter.

288.3 	Sec. 10. Minnesota Statutes 2006, section 16D.04, subdivision 1, is amended to read:
288.4 		Subdivision 1.Duties. The commissioner shall provide services to the state and its
288.5 	referring agencies to collect debts owed the state referred for collection under this chapter. 
288.6 	The commissioner is not a collection agency as defined by section 332.31, subdivision 3, 
288.7 	and is not licensed, bonded, or regulated by the commissioner of commerce under sections 
288.8 	332.31 to 332.35 or 332.38 to 332.45. The commissioner is subject to section 332.37, 
288.9 	except clause (9), (10), (12), or (19). Debts referred to the commissioner for collection 
288.10 	under section 256.9792 may in turn be referred by the commissioner to the enterprise. 
288.11 	An audited financial statement may not be required as a condition of debt placement with 
288.12 	a private agency if the private agency: (1) has errors and omissions coverage under a 
288.13 	professional liability policy in an amount of at least $1,000,000; or (2) has a fidelity bond 
288.14 	to cover actions of its employees, in an amount of at least $100,000. In cases of debts 
288.15 	referred under section 256.9792, the provisions of this chapter and section 256.9792 apply 
288.16 	to the extent they are not in conflict. If they are in conflict, the provisions of section 
288.17 	256.9792 control. For purposes of this chapter, the referring agency for such debts remains 
288.18 	the Department of Human Services. 

288.19 	EFFECTIVE DATE. This section is effective January 1, 2008.

288.20 	Sec. 11. Minnesota Statutes 2006, section 16D.04, subdivision 2, is amended to read:
288.21 		Subd. 2.Agency participation. (a) A referring agency may, at its option, must
288.22 	refer, by electronic means, debts to the commissioner for collection. The ultimate
288.23 	Responsibility for the debt, including the reporting of the debt to the commissioner of 
288.24 	finance and the decision with regard to the continuing collection and uncollectibility of the 
288.25 	debt, remains with the referring agency.
288.26 	(b) Before a debt becomes 121 days past due, a referring agency may refer the 
288.27 	debt to the commissioner for collection at any time after a debt becomes delinquent and 
288.28 	uncontested and the debtor has no further administrative appeal of the amount of the 
288.29 	debt. When a debt owed to a statereferring agency becomes 121 days past due, the state
288.30 	referring agency must refer the debt to the commissioner for collection. This requirement 
288.31 	does not apply if there is a dispute over the amount or validity of the debt, if the debt is the 
288.32 	subject of legal action or administrative proceedings, or the agency determines that the 
288.33 	debtor is adhering to acceptable payment arrangements. The commissioner, in consultation 
288.34 	with the commissioner of finance, may provide that certain types of debt need not be 
289.1 	referred to the commissioner for collection under this paragraph. Methods and procedures 
289.2 	for referral must follow internal guidelines prepared by the commissioner of finance.
289.3 	(c) If the referring agency is a court, the court must furnish a debtor's Social Security 
289.4 	number to the commissioner when the court refers the debt.

289.5 	EFFECTIVE DATE. This section is effective for debts referred on or after January 
289.6 	1, 2008.

289.7 	Sec. 12. Minnesota Statutes 2006, section 16D.11, subdivision 2, is amended to read:
289.8 		Subd. 2.Computation. At the time a debt is referred, the amount of collection 
289.9 	costs is equal to 1517 percent of the debt, or 25 percent of the debt remaining unpaid if 
289.10 	the commissioner or private collection agency has to take enforced collection action 
289.11 	by serving a summons and complaint on or entering judgment against the debtor, or by 
289.12 	utilizing any of the remedies authorized under section 16D.08, subdivision 2, except for 
289.13 	the remedies in sections 270C.32 and 270C.65 or when referred by the commissioner for 
289.14 	additional collection activity by a private collection agency. If, after referral of a debt to 
289.15 	a private collection agency, the debtor requests cancellation of collection costs under 
289.16 	subdivision 3, the debt must be returned to the commissioner for resolution of the request.

289.17 	EFFECTIVE DATE. This section is effective for debts referred on or after January 
289.18 	1, 2008.

289.19 	Sec. 13. Minnesota Statutes 2006, section 16D.11, subdivision 7, is amended to read:
289.20 		Subd. 7.Adjustment of rate. By June 1 of each year, the commissioner of finance
289.21 	shall determine the rate of collection costs for debts referred to the enterprise during 
289.22 	the next fiscal year. The rate is a percentage of the debts in an amount that most nearly 
289.23 	equals the costs of the enterprise necessary to process and collect referred debts under this 
289.24 	chapter. In no event shall the rate of collection costs when a debt is first referred exceed 
289.25 	three-fifths of the maximum collection costs, and in no event shall the rate of the maximum
289.26 	collection costs exceed 25 percent of the debt. Determination of the rate of collection costs 
289.27 	under this section is not subject to the fee setting requirements of section 16A.1285. 

289.28 	EFFECTIVE DATE. This section is effective January 1, 2008.

289.29 	Sec. 14. Minnesota Statutes 2006, section 270A.03, subdivision 2, is amended to read:
289.30 		Subd. 2.Claimant agency. "Claimant agency" means any state agency, as 
289.31 	defined by section 14.02, subdivision 2, the regents of the University of Minnesota, any 
289.32 	district court of the state, any county, any statutory or home rule charter city presenting 
290.1 	a claim for a municipal hospital or a public library or a municipal ambulance service, a 
290.2 	hospital district, a private nonprofit hospital that leases its building from the county in 
290.3 	which it is located, any public agency responsible for child support enforcement, any 
290.4 	public agency responsible for the collection of court-ordered restitution, and any public 
290.5 	agency established by general or special law that is responsible for the administration of 
290.6 	a low-income housing program, and the Minnesota collection enterprise as defined in 
290.7 	section 16D.02, subdivision 8, for the purpose of collecting the costs imposed under 
290.8 	section 16D.11. A county may act as a claimant agency on behalf of an ambulance service 
290.9 	licensed under chapter 144E if the ambulance service's primary service area is located at 
290.10 	least in part within the county, but more than one county may not act as a claimant agency 
290.11 	for a licensed ambulance service with respect to the same debt. 

290.12 	Sec. 15. Minnesota Statutes 2006, section 270B.01, subdivision 8, is amended to read:
290.13 		Subd. 8.Minnesota tax laws. For purposes of this chapter only, unless expressly 
290.14 	stated otherwise, "Minnesota tax laws" means:
290.15 	(1) the taxes, refunds, and fees administered by or paid to the commissioner under 
290.16 	chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24), 
290.17 	290, 290A, 291, 295, 297A, 297B, and 297H, or any similar Indian tribal tax administered 
290.18 	by the commissioner pursuant to any tax agreement between the state and the Indian tribal 
290.19 	government, and includes any laws for the assessment, collection, and enforcement of 
290.20 	those taxes, refunds, and fees; and 
290.21 	(2) section 273.1315, subdivision 1. 

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

290.23 	Sec. 16. Minnesota Statutes 2006, section 270B.02, subdivision 3, is amended to read:
290.24 		Subd. 3.Confidential data on individuals; protected nonpublic data. (a) Except 
290.25 	as provided in paragraph (b), the name or existence of an informer, informer letters, and 
290.26 	other data, in whatever form, given to the Department of Revenue by a person, other than 
290.27 	the data subject, who informs that a specific person is not or may not be in compliance 
290.28 	with tax laws, or nontax laws administered by the Department of Revenue, including laws 
290.29 	other than those relating to property taxes not listed in section 270B.01, subdivision 8, are 
290.30 	confidential data on individuals or protected nonpublic data as defined in section 13.02, 
290.31 	subdivisions 3 and 13. This paragraph does not apply to laws relating to property taxes.
290.32 	(b) Data under paragraph (a) may be disclosed with the consent of the informer 
290.33 	or upon a written finding by a court that the information provided by the informer was 
290.34 	false and that there is evidence that the information was provided in bad faith. This 
291.1 	subdivision does not alter disclosure responsibilities or obligations under the Rules of 
291.2 	Criminal Procedure.

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

291.4 	Sec. 17. Minnesota Statutes 2006, section 270B.085, is amended by adding a 
291.5 	subdivision to read:
291.6 		Subd. 3.Collection of nontax debt. The commissioner may use return information 
291.7 	for the purpose of collecting debts referred to the commissioner under chapter 16D.

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

291.9 	Sec. 18. Minnesota Statutes 2006, section 270B.14, subdivision 3, is amended to read:
291.10 		Subd. 3.Administration of enterprise, job opportunity, and biotechnology 
291.11 	and health sciences industry zone program programs. The commissioner may 
291.12 	disclose return information relating to the taxes imposed by chapters 290 and 297A to 
291.13 	the Department of Employment and Economic Development or a municipality receiving 
291.14 	an enterprise zone designation under section 469.169 but only as necessary to administer 
291.15 	the funding limitations under section 469.169, subdivision 7., or to the Department 
291.16 	of Employment and Economic Development and appropriate officials from the local 
291.17 	government units in which a qualified business is located but only as necessary to enforce 
291.18 	the job opportunity building zone benefits under section 469.315, or biotechnology and 
291.19 	health sciences industry zone benefits under section 469.336.

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

291.21 	Sec. 19. Minnesota Statutes 2006, section 270C.56, subdivision 1, is amended to read:
291.22 		Subdivision 1.Liability imposed. A person who, either singly or jointly with 
291.23 	others, has the control of, supervision of, or responsibility for filing returns or reports, 
291.24 	paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or 
291.25 	a person who is liable under any other law, is liable for the payment of taxes, penalties, 
291.26 	and interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 290.92
291.27 	and 297E.02, and, for the taxes listed in this subdivision, the applicable penalties for 
291.28 	nonpayment under section 289A.60.

291.29 	EFFECTIVE DATE. This section is effective for personal liability assessments 
291.30 	made on or after the day following final enactment.

292.1 	Sec. 20. Minnesota Statutes 2006, section 270C.63, subdivision 9, is amended to read:
292.2 		Subd. 9.Period of limitations. The lien imposed by this section shall, 
292.3 	notwithstanding any other provision of law to the contrary, be enforceable from the time 
292.4 	the lien arises and for ten years from the date of filing the notice of lien, which must be 
292.5 	filed by the commissioner within five years after the date of assessment of the tax or final 
292.6 	administrative or judicial determination of the assessment. A notice of lien filed at the 
292.7 	Office of the Secretary of State may be transcribed to any county within ten years after the 
292.8 	date of its filing, but the transcription does not extend the period during which the lien is 
292.9 	enforceable. A notice of lien filed in one county may be transcribed to the secretary of 
292.10 	state or to any other county within ten years after the date of its filing, but the transcription 
292.11 	shall not extend the period during which the lien is enforceable. A notice of lien may be 
292.12 	renewed by the commissioner before the expiration of the ten-year period for an additional 
292.13 	ten years. The taxpayer must receive written notice of the renewal.

292.14 	EFFECTIVE DATE. This section is effective for liens transcribed on or after the 
292.15 	day following final enactment.

292.16 	Sec. 21. Minnesota Statutes 2006, section 273.1315, is amended to read:
292.17 	273.1315 CERTIFICATION OF CLASS 1B PROPERTY.
292.18 		Subdivision 1.Class 1b homestead declaration before 2008. Any property owner 
292.19 	seeking classification and assessment of the owner's homestead as class 1b property 
292.20 	pursuant to section 273.13, subdivision 22, paragraph (b), on or before October 1, 2007, 
292.21 	shall file with the commissioner of revenue a 1b homestead declaration, on a form 
292.22 	prescribed by the commissioner. The declaration shall contain the following information:
292.23 	(a) the information necessary to verify that on or before June 30 of the filing year, 
292.24 	the property owner or the owner's spouse satisfies the requirements of section 273.13, 
292.25 	subdivision 22, paragraph (b), for 1b classification; and
292.26 	(b) any additional information prescribed by the commissioner.
292.27 	The declaration must be filed on or before October 1 to be effective for property 
292.28 	taxes payable during the succeeding calendar year. The declaration and any supplementary 
292.29 	information received from the property owner pursuant to this sectionsubdivision shall 
292.30 	be subject to chapter 270B. If approved by the commissioner, the declaration remains 
292.31 	in effect until the property no longer qualifies under section 273.13, subdivision 22, 
292.32 	paragraph (b). Failure to notify the commissioner within 30 days that the property no 
292.33 	longer qualifies under that paragraph because of a sale, change in occupancy, or change 
292.34 	in the status or condition of an occupant shall result in the penalty provided in section 
293.1 	273.124, subdivision 13, computed on the basis of the class 1b benefits for the property, 
293.2 	and the property shall lose its current class 1b classification.
293.3 	The commissioner shall provide to the assessor on or before November 1 a listing 
293.4 	of the parcels of property qualifying for 1b classification.
293.5 		Subd. 2.Class 1b homestead declaration 2008 and thereafter. Any property 
293.6 	owner seeking classification and assessment of the owner's homestead as class 1b property 
293.7 	pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2007, shall file 
293.8 	with the county assessor a class 1b homestead declaration, on a form prescribed by the 
293.9 	commissioner of revenue. The declaration must contain the following information:
293.10 	(1) the information necessary to verify that, on or before June 30 of the filing year, 
293.11 	the property owner or the owner's spouse satisfies the requirements of section 273.13, 
293.12 	subdivision 22, paragraph (b), for class 1b classification; and
293.13 	(2) any additional information prescribed by the commissioner.
293.14 	The declaration must be filed on or before October 1 to be effective for property 
293.15 	taxes payable during the succeeding calendar year. The Social Security numbers and 
293.16 	income and medical information received from the property owner pursuant to this 
293.17 	subdivision are private data on individuals as defined in section 13.02. If approved by 
293.18 	the assessor, the declaration remains in effect until the property no longer qualifies under 
293.19 	section 273.13, subdivision 22, paragraph (b). Failure to notify the assessor within 30 
293.20 	days that the property no longer qualifies under that paragraph because of a sale, change in 
293.21 	occupancy, or change in the status or condition of an occupant shall result in the penalty 
293.22 	provided in section 273.124, subdivision 13, computed on the basis of the class 1b benefits 
293.23 	for the property, and the property shall lose its current class 1b classification.

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

293.25 	Sec. 22. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:
293.26 		Subdivision 1.Determination. All property includable in the Minnesota gross estate 
293.27 	of a decedent shall be valued in accordance with the provisions of sections 2031 or 2032 
293.28 	and, if applicable, 2032A, of the Internal Revenue Code and any elections made in valuing 
293.29 	the federal gross estate shall be applicable in valuing the Minnesota gross estate. Values 
293.30 	for purposes of the estate tax on both probate and nonprobate assets shall be the same as 
293.31 	those finally determined for purposes of the federal estate tax on a decedent's estate.
293.32 	Except as otherwise provided in section 291.215, the value of all property includable in 
293.33 	the Minnesota gross estate of a decedent may be independently determined under said 
293.34 	sections for Minnesota estate tax purposes, provided that, in cases where a federal estate 
294.1 	tax return is required to be filed and a federal tax of at least one dollar, values for probate 
294.2 	and nonprobate assets shall be as finally determined for federal estate tax purposes.

294.3 	Sec. 23. Minnesota Statutes 2006, section 297F.21, subdivision 3, is amended to read:
294.4 		Subd. 3.Inventory; judicial determination; appeal; disposition of seized 
294.5 	property. (a) Within ten days after the seizure of any alleged contraband, the person 
294.6 	making the seizure shall serve by certified mail an inventory of the property seized on the 
294.7 	person from whom the seizure was made, if known, and on any person known or believed 
294.8 	to have any right, title, interest, or lien in the property, at the last known address, and file 
294.9 	a copy with the commissioner. The notice must include an explanation of the right to 
294.10 	demand a judicial forfeiture determination.
294.11 	(b) Within 60 days after the date of service of the inventory, which is the date of 
294.12 	mailing, the person from whom the property was seized or any person claiming an interest 
294.13 	in the property may file a demand for a judicial determination of the question as to whether 
294.14 	the property was lawfully subject to seizure and forfeiture. The demand must be in the 
294.15 	form of a civil complaint and must be filed with the court administrator in the county in 
294.16 	which the seizure occurred, together with proof of service of a copy of the complaint 
294.17 	on the commissioner of revenue, and the standard filing fee for civil actions unless the 
294.18 	petitioner has the right to sue in forma pauperis under section 563.01. If the value of the 
294.19 	seized property is $7,500 or less, the claimant may file an action in conciliation court for 
294.20 	recovery of the property. If the value of the seized property is less than $500, the claimant 
294.21 	does not have to pay the conciliation court filing fee. 
294.22 	(c) The complaint must be captioned in the name of the claimant as plaintiff and 
294.23 	the seized property as defendant, and must state with specificity the grounds on which 
294.24 	the claimant alleges the property was improperly seized and the plaintiff's interest in the 
294.25 	property seized. No responsive pleading is required of the commissioner, and no court 
294.26 	fees may be charged for the commissioner's appearance in the matter. The proceedings 
294.27 	are governed by the Rules of Civil Procedure. Notwithstanding any law to the contrary, 
294.28 	an action for the return of property seized under this section may not be maintained by 
294.29 	or on behalf of any person who has been served with an inventory unless the person has 
294.30 	complied with this subdivision. The court shall decide whether the alleged contraband is 
294.31 	contraband, as defined in subdivision 1. The court shall hear the action without a jury and 
294.32 	shall try and determine the issues of fact and law involved.
294.33 	(d) When a judgment of forfeiture is entered, the commissioner may, unless the 
294.34 	judgment is stayed pending an appeal, either the commissioner:
295.1 	(1) deliver the forfeited cigarette packages or tobacco products to the commissioner 
295.2 	of human services for use by patients in state institutions may authorize the forfeited 
295.3 	property to be used for the purpose of enforcing a criminal provision of state or federal law;
295.4 	(2) shall cause the property in clause (1) forfeited cigarette packages or tobacco 
295.5 	products not used under clause (1) to be destroyed; or and products used under clause (1) 
295.6 	to be destroyed upon the completion of use; and
295.7 	(3) may cause the forfeited property, other than forfeited cigarette packages or 
295.8 	tobacco products, to be sold at public auction as provided by law.
295.9 	The person making a sale, after deducting the expense of keeping the property, the fee 
295.10 	for seizure, and the costs of the sale, shall pay all liens according to their priority, which 
295.11 	are established as being bona fide and as existing without the lienor having any notice 
295.12 	or knowledge that the property was being used or was intended to be used for or in 
295.13 	connection with the violation. The balance of the proceeds must be paid 75 percent to the 
295.14 	Department of Revenue for deposit as a supplement to its operating fund or similar fund 
295.15 	for official use, and 25 percent to the county attorney or other prosecuting agency that 
295.16 	handled the court proceeding, if there is one, for deposit as a supplement to its operating 
295.17 	fund or similar fund for prosecutorial purposes. If there is no prosecuting authority 
295.18 	involved in the forfeiture, the 25 percent of the proceeds otherwise designated for the 
295.19 	prosecuting authority must be deposited into the general fund.
295.20 	(e) If no demand for judicial determination is made, the property seized is considered 
295.21 	forfeited to the state by operation of law and may be disposed of by the commissioner as 
295.22 	provided in the case of a judgment of forfeiture.

295.23 	EFFECTIVE DATE. This section is effective for forfeitures after June 30, 2007.

295.24 	Sec. 24. JOINT LEGISLATIVE SUBCOMMITTEE ON SALES AND USE TAX.
 295.25 		Subdivision 1.Creation. A legislative subcommittee on sales tax is created.
295.26 		Subd. 2.Duties. The subcommittee must:
295.27 	(1) examine the revenue productivity and equity implications of the current sales 
295.28 	and use tax base and alternative tax bases;
295.29 	(2) examine the implications of demographic and economic trends for the future 
295.30 	revenue adequacy of the current sales and use tax base;
295.31 	(3) examine the sales and use tax base, the exemptions, and the rate and recommend 
295.32 	to the legislature alternative tax structures to improve revenue stability and equity of 
295.33 	tax imposition;
296.1 	(4) examine the tax burdens on individuals and businesses and recommend to the 
296.2 	legislature alternative structures that would improve the horizontal and vertical equity 
296.3 	of the tax burden;
296.4 	(5) examine the administrative and compliance burden of the taxes;
296.5 	(6) examine and report on broadening the sales and use tax base in conjunction with 
296.6 	a lower rate and exemption for business inputs on the vertical equity of the taxes; and
296.7 	(7) file a report with the chairs and the ranking minority members of the committees 
296.8 	on taxes in the senate and the house of representatives no later than March 30, 2008.
296.9 		Subd. 3.Membership. The subcommittee must consist of ten members of the 
296.10 	legislature as follows:
296.11 	(1) four members of the senate, including at least one member of the minority party, 
296.12 	to be appointed by the chair of the senate committee on taxes;
296.13 	(2) four members of the house of representatives, including one member of the 
296.14 	minority party, to be appointed by the chair of the house of representatives committee 
296.15 	on taxes;
296.16 	(3) the chair of the senate committee on taxes; and
296.17 	(4) the chair of the house of representatives committee on taxes.
296.18 		Subd. 4.Assistance of other agencies. (a) The subcommittee may request 
296.19 	information from any state officer or agency to assist in carrying out its duties under 
296.20 	this section. The officer or agency must promptly provide the data requested to the 
296.21 	extent permitted by law.
296.22 	(b) The commissioner of revenue shall prepare, maintain, and make available to the 
296.23 	commission data in the form and manner that the subcommittee determines will facilitate 
296.24 	in discharging its duties under this section.

296.25 	Sec. 25. DATA UPDATE.
 296.26 	The commissioner of revenue must continue to maintain, update, and make available 
296.27 	the information required under Laws 1987, chapter 268, article 7, section 1, subdivision 
296.28 	6, paragraph (b). The commissioner must provide the most complete and current data 
296.29 	available, when requested, to the chairs of the senate and house of representatives 
296.30 	committees on taxes.

296.31 	Sec. 26. BUDGET RESERVE TRANSFER.
 296.32 	If Senate File No. 2054 or another bill providing for a transfer of funds to the 
296.33 	budget reserve is enacted at the 2007 session of the legislature, section 8 of this article 
296.34 	is not enacted.

297.1 	Sec. 27.  REPEALER.
 297.2 	Minnesota Statutes 2006, section 16A.1522, is repealed.