1.1 	A bill for an act
1.2 	relating to taxation; making policy, technical, administrative, and clarifying 
1.3 	changes to various taxes and tax-related provisions; changing certain provisions 
1.4 	relating to debt collection by the commissioner of revenue; changing provisions 
1.5 	relating to certain firefighters' supplemental benefits; imposing civil penalties;
1.6 	amending Minnesota Statutes 2006, sections 16D.04, subdivisions 1, 2; 16D.11, 
1.7 	subdivisions 2, 7; 62I.06, subdivision 6; 71A.04, subdivision 1; 270.071, 
1.8 	subdivision 7; 270.072, subdivisions 2, 3, 6; 270.074, subdivision 3; 270.076, 
1.9 	subdivision 1; 270.41, subdivisions 1, 2, 3, 5, by adding a subdivision; 270.44; 
1.10 	270.45; 270.46; 270.47; 270.48; 270.50; 270A.03, subdivision 5; 270C.306; 
1.11 	270C.34, subdivision 1; 270C.446, subdivision 2; 270C.56, subdivision 1; 
1.12 	270C.63, subdivision 9; 272.02, subdivision 64; 272.115, subdivision 1; 273.05, 
1.13 	by adding a subdivision; 273.111, subdivision 3; 273.117; 273.121; 273.123, 
1.14 	subdivisions 2, 3; 273.124, subdivision 13; 273.1398, subdivision 4; 273.33, 
1.15 	subdivision 2; 273.37, subdivision 2; 273.371, subdivision 1; 274.01, subdivision 
1.16 	1; 274.13, subdivision 1; 275.065, subdivisions 3, 5a; 275.067; 276.04, by adding 
1.17 	a subdivision; 277.01, subdivision 2; 279.01, subdivision 1; 287.22; 287.2205; 
1.18 	289A.08, subdivision 11; 289A.09, subdivision 2; 289A.12, subdivision 
1.19 	14; 289A.18, subdivision 1; 289A.40, subdivision 2; 289A.56, by adding a 
1.20 	subdivision; 289A.60, subdivisions 8, 12, 25, 27, by adding subdivisions; 
1.21 	290.01, subdivisions 19b, 19c, 19d; 290.06, subdivision 33; 290.067, subdivision 
1.22 	2b; 290.0671, subdivision 7; 290.091, subdivision 3; 290.0921, subdivision 
1.23 	3; 290.191, subdivision 8; 290A.03, subdivision 7; 290B.03, subdivision 2; 
1.24 	290C.02, subdivision 3; 290C.04; 290C.05; 290C.11; 291.215, subdivision 1; 
1.25 	295.52, subdivisions 4, 4a; 295.54, subdivision 2; 297A.61, subdivisions 3, 4, 7, 
1.26 	10, 24, by adding subdivisions; 297A.63, subdivision 1; 297A.665; 297A.669, 
1.27 	subdivisions 3, 13, 14, by adding subdivisions; 297A.67, subdivisions 7, 8, 9; 
1.28 	297A.68, subdivisions 11, 16, 35; 297A.69, subdivision 2; 297A.70, subdivision 
1.29 	7, by adding a subdivision; 297A.72; 297A.90, subdivision 2; 297B.035, 
1.30 	subdivision 1; 297F.06, subdivision 4; 297F.25, by adding a subdivision; 
1.31 	297I.06, subdivisions 1, 2; 297I.20, subdivision 2; 297I.40, subdivision 5; 
1.32 	424A.10, subdivision 3; 469.1734, subdivision 6; proposing coding for new law 
1.33 	in Minnesota Statutes, chapters 270; 270C; 273; 274; 290C; 297A; repealing 
1.34 	Minnesota Statutes 2006, sections 270.073; 270.41, subdivision 4; 270.43; 
1.35 	270.51; 270.52; 270.53; 295.60; 297A.61, subdivision 20; 297A.668, subdivision 
1.36 	6; 297A.67, subdivision 22.
1.37 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.1 	ARTICLE 1
2.2 	INCOME AND FRANCHISE TAXES

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

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

3.15 	Sec. 2. Minnesota Statutes 2006, section 289A.08, subdivision 11, is amended to read:
3.16 		Subd. 11.Information included in income tax return. (a) The return must state:
3.17 	(1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the 
3.18 	address of the taxpayer in the same name or names and same address as the taxpayer has 
3.19 	used in making the taxpayer's income tax return to the United States, and must state;
3.20 	(2) the date or dates of birth of the taxpayer or taxpayers;
3.21 	(3) the Social Security number of the taxpayer, or taxpayers, if a Social Security 
3.22 	number has been issued by the United States with respect to the taxpayers, and must 
3.23 	state; and
3.24 	(4) the amount of the taxable income of the taxpayer as it appears on the federal 
3.25 	return for the taxable year to which the Minnesota state return applies. 
3.26 	(b) The taxpayer must attach to the taxpayer's Minnesota state income tax return 
3.27 	a copy of the federal income tax return that the taxpayer has filed or is about to file for 
3.28 	the period, unless the taxpayer is eligible to telefile the federal return and does file the 
3.29 	Minnesota return by telefiling.

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

3.32 	Sec. 3. Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:
4.1 		Subd. 2.Withholding statement to employee or payee and to commissioner. (a) 
4.2 	A person required to deduct and withhold from an employee a tax under section 290.92, 
4.3 	subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to 
4.4 	deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required 
4.5 	to withhold tax under section 290.923, subdivision 2, determined without regard to 
4.6 	section 290.92, subdivision 19, if the employee or payee had claimed no more than one 
4.7 	withholding exemption, or who paid wages or made payments not subject to withholding 
4.8 	under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or 
4.9 	person receiving royalty payments in excess of $600, or who has entered into a voluntary 
4.10 	withholding agreement with a payee under section 290.92, subdivision 20, must give 
4.11 	every employee or person receiving royalty payments in respect to the remuneration paid 
4.12 	by the person to the employee or person receiving royalty payments during the calendar 
4.13 	year, on or before January 31 of the succeeding year, or, if employment is terminated 
4.14 	before the close of the calendar year, within 30 days after the date of receipt of a written 
4.15 	request from the employee if the 30-day period ends before January 31, a written statement 
4.16 	showing the following: 
4.17 	(1) name of the person;
4.18 	(2) the name of the employee or payee and the employee's or payee's Social Security 
4.19 	account number;
4.20 	(3) the total amount of wages as that term is defined in section 290.92, subdivision 
4.21 	1, paragraph (1); the total amount of remuneration subject to withholding under section 
4.22 	290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the 
4.23 	Internal Revenue Code; and the amount of royalties subject to withholding under section 
4.24 	290.923, subdivision 2; and 
4.25 	(4) the total amount deducted and withheld as tax under section 290.92, subdivision 
4.26 	2a or 3, or 290.923, subdivision 2. 
4.27 	(b) The statement required to be furnished by this paragraph (a) with respect to any 
4.28 	remuneration must be furnished at those times, must contain the information required, and 
4.29 	must be in the form the commissioner prescribes.
4.30 	(c) The commissioner may prescribe rules providing for reasonable extensions of 
4.31 	time, not in excess of 30 days, to employers or payers required to give the statements to 
4.32 	their employees or payees under this subdivision.
4.33 	(d) A duplicate of any statement made under this subdivision and in accordance 
4.34 	with rules prescribed by the commissioner, along with a reconciliation in the form the 
4.35 	commissioner prescribes of the statements for the calendar year, including a reconciliation 
5.1 	of the quarterly returns required to be filed under subdivision 1, must be filed with the 
5.2 	commissioner on or before February 28 of the year after the payments were made.
5.3 	(e) If an employer cancels the employer's Minnesota withholding account number 
5.4 	required by section 290.92, subdivision 24, the information required by paragraph (d), 
5.5 	must be filed with the commissioner within 30 days of the end of the quarter in which 
5.6 	the employer cancels its account number. 
5.7 	(f) The employer must submit the statements required to be sent to the commissioner 
5.8 	on magnetic media, if the magnetic media wasin the same manner required to satisfy the 
5.9 	federal reporting requirements of section 6011(e) of the Internal Revenue Code and the 
5.10 	regulations issued under it. For wages paid in calendar year 2007, an employer must 
5.11 	submit statements to the commissioner required by this section by electronic means if the 
5.12 	employer is required to send more than 100 statements to the commissioner, even though 
5.13 	the employer is not required to submit the returns federally by electronic means. For 
5.14 	calendar year 2008, the 100 statements threshold is reduced to 50, and for calendar year 
5.15 	2009, the threshold is reduced to 25, and for 2010 and after, the threshold is reduced to ten.
5.16 	(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph 
5.17 	(a), clause (2), must submit the returns required by this subdivision and subdivision 1, 
5.18 	paragraph (a), with the commissioner by electronic means. 

5.19 	EFFECTIVE DATE. This section is effective for wages paid after December 31, 
5.20 	2006.

5.21 	Sec. 4. Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read:
5.22 		Subd. 14.Regulated investment companies; reporting exempt-interest 
5.23 	dividends. (a) A regulated investment company paying $10 or more in exempt-interest 
5.24 	dividends to an individual who is a resident of Minnesota must make a return indicating 
5.25 	the amount of the exempt-interest dividends, the name, address, and Social Security 
5.26 	number of the recipient, and any other information that the commissioner specifies. The 
5.27 	return must be provided to the shareholder no later than 30 days after the close of the 
5.28 	taxable year. The return provided to the shareholder must include a clear statement, in the 
5.29 	form prescribed by the commissioner, that the exempt-interest dividends must be included 
5.30 	in the computation of Minnesota taxable income. The commissioner may by notice and 
5.31 	demand require the regulated investment company is required in a manner prescribed by 
5.32 	the commissioner to file a copy of the return with the commissioner.
5.33 	(b) This subdivision applies to regulated investment companies required to register 
5.34 	under chapter 80A.
5.35 	(c) For purposes of this subdivision, the following definitions apply.
6.1 	(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in 
6.2 	section 852(b)(5) of the Internal Revenue Code, but does not include the portion of 
6.3 	exempt-interest dividends that are not required to be added to federal taxable income 
6.4 	under section 290.01, subdivision 19a, clause (1)(ii). 
6.5 	(2) "Regulated investment company" means regulated investment company as 
6.6 	defined in section 851(a) of the Internal Revenue Code or a fund of the regulated 
6.7 	investment company as defined in section 851(g) of the Internal Revenue Code.

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

6.10 	Sec. 5. Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read:
6.11 		Subdivision 1.Individual income, fiduciary income, corporate franchise, and 
6.12 	entertainment taxes; partnership and S corporation returns; information returns; 
6.13 	mining company returns. The returns required to be made under sections 289A.08 and 
6.14 	289A.12 must be filed at the following times:
6.15 	(1) returns made on the basis of the calendar year must be filed on April 15 following 
6.16 	the close of the calendar year, except that returns of corporations must be filed on March 
6.17 	15 following the close of the calendar year;
6.18 	(2) returns made on the basis of the fiscal year must be filed on the 15th day of the 
6.19 	fourth month following the close of the fiscal year, except that returns of corporations 
6.20 	must be filed on the 15th day of the third month following the close of the fiscal year;
6.21 	(3) returns for a fractional part of a year must be filed on the 15th day of the fourth 
6.22 	month following the end of the month in which falls the last day of the period for which 
6.23 	the return is made, except that the returns of corporations must be filed on the 15th day of 
6.24 	the third month following the end of the tax year of the unitary group in which falls the 
6.25 	last day of the period for which the return is made;
6.26 	(4) in the case of a final return of a decedent for a fractional part of a year, the return 
6.27 	must be filed on the 15th day of the fourth month following the close of the 12-month 
6.28 	period that began with the first day of that fractional part of a year;
6.29 	(5) in the case of the return of a cooperative association, returns must be filed on or 
6.30 	before the 15th day of the ninth month following the close of the taxable year;
6.31 	(6) if a corporation has been divested from a unitary group and files a return for 
6.32 	a fractional part of a year in which it was a member of a unitary business that files a 
6.33 	combined report under section 290.34, subdivision 2, the divested corporation's return 
6.34 	must be filed on the 15th day of the third month following the close of the common 
6.35 	accounting period that includes the fractional year;
7.1 	(7) returns of entertainment entities must be filed on April 15 following the close of 
7.2 	the calendar year;
7.3 	(8) returns required to be filed under section 289A.08, subdivision 4, must be filed 
7.4 	on the 15th day of the fifth month following the close of the taxable year;
7.5 	(9) returns of mining companies must be filed on May 1 following the close of the 
7.6 	calendar year; and
7.7 	(10) returns required to be filed with the commissioner under section 289A.12, 
7.8 	subdivision 2,or 4 to 10, or 14, must be filed within 30 days after being demanded by 
7.9 	the commissioner.

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

7.12 	Sec. 6. Minnesota Statutes 2006, section 289A.60, subdivision 8, is amended to read:
7.13 		Subd. 8.Penalty forPenalties; failure to file informational return; incorrect 
7.14 	taxpayer identification number. (a) In the case of a failure to file an informational return 
7.15 	required by section 289A.12 with the commissioner on the date prescribed (determined 
7.16 	with regard to any extension of time for filing), the person failing to file the return shall pay 
7.17 	a penalty of $50 for each failure or in the case of a partnership, S corporation, or fiduciary 
7.18 	return, $50 for each partner, shareholder, or beneficiary; but the total amount imposed on 
7.19 	the delinquent person for all failures during any calendar year must not exceed $25,000. If 
7.20 	a failure to file a return is due to intentional disregard of the filing requirement, then the 
7.21 	penalty imposed under the preceding sentence must not be less than an amount equal to: 
7.22 	(1) in the case of a return not described in clause (2) or (3), ten percent of the 
7.23 	aggregate amount of the items required to be reported;
7.24 	(2) in the case of a return required to be filed under section 289A.12, subdivision 5, 
7.25 	five percent of the gross proceeds required to be reported; and 
7.26 	(3) in the case of a return required to be filed under section 289A.12, subdivision 9, 
7.27 	relating to direct sales, $100 for each failure; however, the total amount imposed on the 
7.28 	delinquent person for intentional failures during a calendar year must not exceed $50,000. 
7.29 	The penalty must be collected in the same manner as a delinquent income tax. 
7.30 	(b) If a partnership or S corporation files a partnership or S corporation return with 
7.31 	an incorrect tax identification number used for a partner or shareholder after being notified 
7.32 	by the commissioner that the identification number is incorrect, the partnership or S 
7.33 	corporation must pay a penalty of $50 for each such incorrect number.

8.1 	EFFECTIVE DATE. This section is effective for returns filed after December 
8.2 	31, 2007.

8.3 	Sec. 7. Minnesota Statutes 2006, section 289A.60, subdivision 12, is amended to read:
8.4 		Subd. 12.Penalties relating to property tax refunds. (a) If it is determined that a 
8.5 	property tax refund claim is excessive and was negligently prepared, a claimant is liable 
8.6 	for a penalty of ten percent of the corrected claim must be disallowed claim. If the claim 
8.7 	has been paid, the amount disallowed must be recovered by assessment and collection.
8.8 	(b) An owner who without reasonable cause fails to give a certificate of rent 
8.9 	constituting property tax to a renter, as required by section 290A.19, paragraph (a), is 
8.10 	liable to the commissioner for a penalty of $100 for each failure.
8.11 	(c) If the owner or managing agent knowingly gives rent certificates that report total 
8.12 	rent constituting property taxes in excess of the amount of actual rent constituting property 
8.13 	taxes paid on the rented part of a property, the owner or managing agent is liable for a 
8.14 	penalty equal to the greater of (1) $100 or (2) 50 percent of the excess that is reported. An 
8.15 	overstatement of rent constituting property taxes is presumed to be knowingly made if it 
8.16 	exceeds by ten percent or more the actual rent constituting property taxes.

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

8.19 	Sec. 8. Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read:
8.20 		Subd. 27.Reportable transaction understatement. (a) If a taxpayer has a 
8.21 	reportable transaction understatement for any taxable year, an amount equal to 20 percent 
8.22 	of the amount of the reportable transaction understatement must be added to the tax.
8.23 	(b)(1) For purposes of this subdivision, "reportable transaction understatement" 
8.24 	means the product of:
8.25 	(i) the amount of the increase, if any, in taxable income that results from a difference 
8.26 	between the proper tax treatment of an item to which this section applies and the taxpayer's 
8.27 	treatment of that item as shown on the taxpayer's tax return; and
8.28 	(ii) the highest rate of tax imposed on the taxpayer under section 290.06 determined 
8.29 	without regard to the understatement.
8.30 	(2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed 
8.31 	for the taxable year over gross income for that year, and any reduction in the amount of 
8.32 	capital losses which would, without regard to section 1211 of the Internal Revenue Code, 
8.33 	be allowed for that year, must be treated as an increase in taxable income.
8.34 	(c) This subdivision applies to any item that is attributable to:
9.1 	(1) any listed transaction under section 289A.121; and
9.2 	(2) any reportable transaction, other than a listed transaction, if a significant purpose 
9.3 	of that transaction is the avoidance or evasion of federal income tax liability.
9.4 	(d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect 
9.5 	to the portion of any reportable transaction understatement with respect to which the 
9.6 	disclosure requirements of section 289A.121, subdivision 5, and section 6664(d)(2)(A) 
9.7 	of the Internal Revenue Code are not met.
9.8 	(e)(1) No penalty applies under this subdivision with respect to any portion of a 
9.9 	reportable transaction understatement if the taxpayer shows that there was reasonable 
9.10 	cause for the portion and that the taxpayer acted in good faith with respect to the portion. 
9.11 	This paragraph applies only if:
9.12 	(i) the relevant facts affecting the tax treatment of the item are adequately disclosed 
9.13 	as required under section 289A.121;
9.14 	(ii) there is or was substantial authority for the treatment; and
9.15 	(iii) the taxpayer reasonably believed that the treatment was more likely than not 
9.16 	the proper treatment.
9.17 	(2) A taxpayer who did not adequately disclose under section 289A.121 meets 
9.18 	the requirements of clause (1)(i), if the commissioner abates the penalty imposed by 
9.19 	subdivision 26, paragraph (d), under section 270C.34 subdivision 26, paragraph (g).
9.20 	(3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief 
9.21 	with respect to the tax treatment of an item only if the belief:
9.22 	(i) is based on the facts and law that exist when the return of tax which includes the 
9.23 	tax treatment is filed; and
9.24 	(ii) relates solely to the taxpayer's chances of success on the merits of the treatment 
9.25 	and does not take into account the possibility that a return will not be audited, the 
9.26 	treatment will not be raised on audit, or the treatment will be resolved through settlement 
9.27 	if it is raised.
9.28 	(4) An opinion of a tax advisor may not be relied upon to establish the reasonable 
9.29 	belief of a taxpayer if:
9.30 	(i) the tax advisor:
9.31 	(A) is a material advisor, as defined in section 289A.121, and participates in the 
9.32 	organization, management, promotion, or sale of the transaction or is related (within the 
9.33 	meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person 
9.34 	who so participates;
9.35 	(B) is compensated directly or indirectly by a material advisor with respect to the 
9.36 	transaction;
10.1 	(C) has a fee arrangement with respect to the transaction which is contingent on all 
10.2 	or part of the intended tax benefits from the transaction being sustained; or
10.3 	(D) has a disqualifying financial interest with respect to the transaction, as 
10.4 	determined under United States Treasury regulations prescribed to implement the 
10.5 	provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or
10.6 	(ii) the opinion:
10.7 	(A) is based on unreasonable factual or legal assumptions, including assumptions 
10.8 	as to future events;
10.9 	(B) unreasonably relies on representations, statements, findings, or agreements of 
10.10 	the taxpayer or any other person;
10.11 	(C) does not identify and consider all relevant facts; or
10.12 	(D) fails to meet any other requirement as the Secretary of the Treasury may 
10.13 	prescribe under federal law.
10.14 	(f) The penalty imposed by this subdivision applies in lieu of the penalty imposed 
10.15 	under subdivision 4.

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

10.17 	Sec. 9. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision 
10.18 	to read:
10.19 		Subd. 28.Preparer identification number. Any Minnesota individual income tax 
10.20 	return or claim for refund prepared by a "tax refund or return preparer" as defined in 
10.21 	subdivision 13, paragraph (f), shall bear the identification number the preparer is required 
10.22 	to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund 
10.23 	or return preparer who prepares a Minnesota individual income tax return or claim for 
10.24 	refund and fails to include the required number on the return or claim is subject to a 
10.25 	penalty of $50 for each failure.

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

10.28 	Sec. 10. Minnesota Statutes 2006, section 290.01, subdivision 19b, as amended by 
10.29 	Laws 2007, chapter 1, section 2, is amended to read:
10.30 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
10.31 	and trusts, there shall be subtracted from federal taxable income:
11.1 	(1) net interest income on obligations of any authority, commission, or 
11.2 	instrumentality of the United States to the extent includable in taxable income for federal 
11.3 	income tax purposes but exempt from state income tax under the laws of the United States;
11.4 	(2) if included in federal taxable income, the amount of any overpayment of income 
11.5 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
11.6 	is received as a refund or as a credit to another taxable year's income tax liability;
11.7 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
11.8 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
11.9 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
11.10 	transportation of each qualifying child in attending an elementary or secondary school 
11.11 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
11.12 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
11.13 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
11.14 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
11.15 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
11.16 	"textbooks" includes books and other instructional materials and equipment purchased 
11.17 	or leased for use in elementary and secondary schools in teaching only those subjects 
11.18 	legally and commonly taught in public elementary and secondary schools in this state. 
11.19 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
11.20 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
11.21 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
11.22 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
11.23 	or materials for, or transportation to, extracurricular activities including sporting events, 
11.24 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
11.25 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
11.26 	given in section 32(c)(3) of the Internal Revenue Code;
11.27 	(4) income as provided under section 290.0802;
11.28 	(5) to the extent included in federal adjusted gross income, income realized on 
11.29 	disposition of property exempt from tax under section 290.491;
11.30 	(6) to the extent not deducted in determining federal taxable income by an individual 
11.31 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
11.32 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
11.33 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
11.34 	under the provisions of Public Law 109-1;
12.1 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
12.2 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
12.3 	which is included in gross income under section 87 of the Internal Revenue Code;
12.4 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
12.5 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
12.6 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
12.7 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
12.8 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
12.9 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
12.10 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
12.11 	the extent they exceed the federal foreign tax credit;
12.12 	(9) in each of the five tax years immediately following the tax year in which an 
12.13 	addition is required under subdivision 19a, clause (7), or 19c, clause (15) (14), in the case 
12.14 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
12.15 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
12.16 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
12.17 	subdivision 19c, clause (15) (14), in the case of a shareholder of an S corporation, minus 
12.18 	the positive value of any net operating loss under section 172 of the Internal Revenue 
12.19 	Code generated for the tax year of the addition. The resulting delayed depreciation 
12.20 	cannot be less than zero;
12.21 	(10) job opportunity building zone income as provided under section 469.316;
12.22 	(11) to the extent included in federal taxable income, the amount of compensation 
12.23 	paid to members of the Minnesota National Guard or other reserve components of the 
12.24 	United States military for active service performed in Minnesota, excluding compensation 
12.25 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
12.26 	this clause, "active service" means (i) state active service as defined in section 190.05, 
12.27 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
12.28 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
12.29 	subdivision 5c, but "active service" excludes services performed exclusively for purposes 
12.30 	of basic combat training, advanced individual training, annual training, and periodic 
12.31 	inactive duty training; special training periodically made available to reserve members; 
12.32 	and service performed in accordance with section 190.08, subdivision 3;
12.33 	(12) to the extent included in federal taxable income, the amount of compensation 
12.34 	paid to Minnesota residents who are members of the armed forces of the United States or 
12.35 	United Nations for active duty performed outside Minnesota;
13.1 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
13.2 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
13.3 	to another person for human organ transplantation. For purposes of this clause, "organ" 
13.4 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
13.5 	"human organ transplantation" means the medical procedure by which transfer of a human 
13.6 	organ is made from the body of one person to the body of another person; "qualified 
13.7 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
13.8 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
13.9 	may be subtracted under this clause only once; and "qualified donor" means the individual 
13.10 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
13.11 	individual may claim the subtraction in this clause for each instance of organ donation for 
13.12 	transplantation during the taxable year in which the qualified expenses occur;
13.13 	(14) in each of the five tax years immediately following the tax year in which an 
13.14 	addition is required under subdivision 19a, clause (8), or 19c, clause (16) (15), in the case 
13.15 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
13.16 	of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause 
13.17 	(16) (15), in the case of a shareholder of a corporation that is an S corporation, minus the 
13.18 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
13.19 	generated for the tax year of the addition. If the net operating loss exceeds the addition for 
13.20 	the tax year, a subtraction is not allowed under this clause;
13.21 	(15) to the extent included in federal taxable income, compensation paid to a 
13.22 	nonresident who is a service member as defined in United States Code, title 10, section 
13.23 	101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 
13.24 	Law 108-189, section 101(2); and
13.25 	(16) international economic development zone income as provided under section 
13.26 	469.325.

13.27 	EFFECTIVE DATE. Clauses (11) and (12) are effective retroactively for taxable 
13.28 	years beginning after December 31, 2004.

13.29 	Sec. 11. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
13.30 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
13.31 	there shall be added to federal taxable income:
13.32 	(1) the amount of any deduction taken for federal income tax purposes for income, 
13.33 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
13.34 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
14.1 	another state, a political subdivision of another state, the District of Columbia, or any 
14.2 	foreign country or possession of the United States;
14.3 	(2) interest not subject to federal tax upon obligations of: the United States, its 
14.4 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
14.5 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
14.6 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
14.7 	tribal governments;
14.8 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
14.9 	Revenue Code;
14.10 	(4) the amount of any net operating loss deduction taken for federal income tax 
14.11 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
14.12 	deduction under section 810 of the Internal Revenue Code;
14.13 	(5) the amount of any special deductions taken for federal income tax purposes 
14.14 	under sections 241 to 247 and 965 of the Internal Revenue Code;
14.15 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
14.16 	clause (a), that are not subject to Minnesota income tax;
14.17 	(7) the amount of any capital losses deducted for federal income tax purposes under 
14.18 	sections 1211 and 1212 of the Internal Revenue Code;
14.19 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
14.20 	921(a) and 291 of the Internal Revenue Code;
14.21 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
14.22 	291 of the Internal Revenue Code;
14.23 	(10) for certified pollution control facilities placed in service in a taxable year 
14.24 	beginning before December 31, 1986, and for which amortization deductions were elected 
14.25 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
14.26 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
14.27 	income for those facilities;
14.28 	(11) the amount of any deemed dividend from a foreign operating corporation 
14.29 	determined pursuant to section 290.17, subdivision 4, paragraph (g);
14.30 	(12)(11) the amount of a partner's pro rata share of net income which does not flow 
14.31 	through to the partner because the partnership elected to pay the tax on the income under 
14.32 	section 6242(a)(2) of the Internal Revenue Code;
14.33 	(13)(12) the amount of net income excluded under section 114 of the Internal 
14.34 	Revenue Code;
15.1 	(14) (13) any increase in subpart F income, as defined in section 952(a) of the 
15.2 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
15.3 	regard to the provisions of section 103 of Public Law 109-222;
15.4 	(15)(14) 80 percent of the depreciation deduction allowed under section 
15.5 	168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if 
15.6 	the taxpayer has an activity that in the taxable year generates a deduction for depreciation 
15.7 	under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable 
15.8 	year that the taxpayer is not allowed to claim for the taxable year, "the depreciation 
15.9 	allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess 
15.10 	of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) 
15.11 	over the amount of the loss from the activity that is not allowed in the taxable year. In 
15.12 	succeeding taxable years when the losses not allowed in the taxable year are allowed, the 
15.13 	depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
15.14 	(16)(15) 80 percent of the amount by which the deduction allowed by section 179 of 
15.15 	the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
15.16 	Revenue Code of 1986, as amended through December 31, 2003;
15.17 	(17) (16) to the extent deducted in computing federal taxable income, the amount of 
15.18 	the deduction allowable under section 199 of the Internal Revenue Code; and
15.19 	(18) (17) the exclusion allowed under section 139A of the Internal Revenue Code 
15.20 	for federal subsidies for prescription drug plans.

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

15.23 	Sec. 12. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
15.24 		Subd. 19d.Corporations; modifications decreasing federal taxable income. For 
15.25 	corporations, there shall be subtracted from federal taxable income after the increases 
15.26 	provided in subdivision 19c:
15.27 	(1) the amount of foreign dividend gross-up added to gross income for federal 
15.28 	income tax purposes under section 78 of the Internal Revenue Code;
15.29 	(2) the amount of salary expense not allowed for federal income tax purposes due 
15.30 	to claiming the federal jobs work opportunity credit under section 51 of the Internal 
15.31 	Revenue Code;
15.32 	(3) any dividend (not including any distribution in liquidation) paid within the 
15.33 	taxable year by a national or state bank to the United States, or to any instrumentality of 
15.34 	the United States exempt from federal income taxes, on the preferred stock of the bank 
15.35 	owned by the United States or the instrumentality;
16.1 	(4) amounts disallowed for intangible drilling costs due to differences between 
16.2 	this chapter and the Internal Revenue Code in taxable years beginning before January 
16.3 	1, 1987, as follows:
16.4 	(i) to the extent the disallowed costs are represented by physical property, an amount 
16.5 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
16.6 	subdivision 7, subject to the modifications contained in subdivision 19e; and
16.7 	(ii) to the extent the disallowed costs are not represented by physical property, an 
16.8 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
16.9 	290.09, subdivision 8;
16.10 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
16.11 	Internal Revenue Code, except that:
16.12 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
16.13 	capital loss carrybacks shall not be allowed;
16.14 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
16.15 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
16.16 	allowed;
16.17 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
16.18 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
16.19 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
16.20 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
16.21 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
16.22 	extent such loss was not used in a prior taxable year and subject to the provisions of 
16.23 	Minnesota Statutes 1986, section 290.16, shall be allowed;
16.24 	(6) an amount for interest and expenses relating to income not taxable for federal 
16.25 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
16.26 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
16.27 	291 of the Internal Revenue Code in computing federal taxable income;
16.28 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
16.29 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (11) (9), a 
16.30 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
16.31 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
16.32 	by the commissioner. In the case of property held in trust, the allowable deduction must 
16.33 	be apportioned between the income beneficiaries and the trustee in accordance with the 
16.34 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
16.35 	of the trust's income allocable to each;
17.1 	(8) for certified pollution control facilities placed in service in a taxable year 
17.2 	beginning before December 31, 1986, and for which amortization deductions were elected 
17.3 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
17.4 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
17.5 	1986, section 290.09, subdivision 7;
17.6 	(9) amounts included in federal taxable income that are due to refunds of income, 
17.7 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
17.8 	corporation to Minnesota, another state, a political subdivision of another state, the 
17.9 	District of Columbia, or a foreign country or possession of the United States to the extent 
17.10 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
17.11 	clause (1), in a prior taxable year;
17.12 	(10)(9) 80 percent of royalties, fees, or other like income accrued or received from a 
17.13 	foreign operating corporation or a foreign corporation which is part of the same unitary 
17.14 	business as the receiving corporation;
17.15 	(11)(10) income or gains from the business of mining as defined in section 290.05, 
17.16 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
17.17 	(12)(11) the amount of disability access expenditures in the taxable year which are 
17.18 	not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue 
17.19 	Code;
17.20 	(13)(12) the amount of qualified research expenses not allowed for federal income 
17.21 	tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent 
17.22 	that the amount exceeds the amount of the credit allowed under section 290.068;
17.23 	(14)(13) the amount of salary expenses not allowed for federal income tax purposes 
17.24 	due to claiming the Indian employment credit under section 45A(a) of the Internal 
17.25 	Revenue Code;
17.26 	(15) the amount of any refund of environmental taxes paid under section 59A of the 
17.27 	Internal Revenue Code;
17.28 	(16) (14) for taxable years beginning before January 1, 2008, the amount of the 
17.29 	federal small ethanol producer credit allowed under section 40(a)(3) of the Internal 
17.30 	Revenue Code which is included in gross income under section 87 of the Internal Revenue 
17.31 	Code;
17.32 	(17) (15) for a corporation whose foreign sales corporation, as defined in section 
17.33 	922 of the Internal Revenue Code, constituted a foreign operating corporation during any 
17.34 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
17.35 	claiming the deduction under section 290.21, subdivision 4, for income received from 
17.36 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
18.1 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
18.2 	not income of a foreign operating company;
18.3 	(18) (16) any decrease in subpart F income, as defined in section 952(a) of the 
18.4 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
18.5 	regard to the provisions of section 614 103 of Public Law 107-147 109-222;
18.6 	(19) (17) in each of the five tax years immediately following the tax year in which an 
18.7 	addition is required under subdivision 19c, clause (15) (14), an amount equal to one-fifth 
18.8 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 
18.9 	amount of the addition made by the taxpayer under subdivision 19c, clause (15) (14). The 
18.10 	resulting delayed depreciation cannot be less than zero; and
18.11 	(20) (18) in each of the five tax years immediately following the tax year in which an 
18.12 	addition is required under subdivision 19c, clause (16) (15), an amount equal to one-fifth 
18.13 	of the amount of the addition.

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

18.17 	Sec. 13. Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read:
18.18 		Subd. 33.Bovine testing credit. (a) An owner of cattle in Minnesota may take a 
18.19 	credit against the tax due under this chapter for an amount equal to one-half the expenses 
18.20 	incurred during the taxable year to conduct tuberculosis testing on those cattle. 
18.21 	(b) If the amount of credit which the taxpayer is eligible to receive under this 
18.22 	subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of 
18.23 	revenue shall refund the excess to the taxpayer.
18.24 	(c) The amount necessary to pay claims for the refund provided in this subdivision is 
18.25 	appropriated from the general fund to the commissioner of revenue.
18.26 	(d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in 
18.27 	Minnesota is not federally required are not allowed in claiming the credit under paragraph 
18.28 	(a).

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

18.31 	Sec. 14. Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read:
18.32 		Subd. 2b.Inflation adjustment. The commissioner shall adjust the dollar amount 
18.33 	of the income threshold at which the maximum credit begins to be reduced under 
19.1 	subdivision 2 must be adjusted for inflation. The commissioner shall make the inflation 
19.2 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
19.3 	the purposes of this subdivision the percentage increase must be determined from the year 
19.4 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting 
19.5 	for inflation for the tax year beginning after December 31, 2000. The determination of 
19.6 	the commissioner under this subdivision is not a rule under the Administrative Procedure 
19.7 	Act. by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
19.8 	Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for 
19.9 	the word "1992." For 2001, the commissioner shall then determine the percent change 
19.10 	from the 12 months ending on August 31, 1999, to the 12 months ending on August 31, 
19.11 	2000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the 
19.12 	12 months ending on August 31 of the year preceding the taxable year. The determination 
19.13 	of the commissioner pursuant to this subdivision must not be considered a "rule" and is 
19.14 	not subject to the Administrative Procedure Act contained in chapter 14. The threshold 
19.15 	amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in 
19.16 	$5, the amount is rounded up to the nearest $10 amount.

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

19.19 	Sec. 15. Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read:
19.20 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the 
19.21 	credit and the income thresholds at which the maximum credit begins to be reduced in 
19.22 	subdivision 1 must be adjusted for inflation. The commissioner shall make the inflation 
19.23 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
19.24 	the purposes of this subdivision the percentage increase shall be determined from the year 
19.25 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting for 
19.26 	inflation for the tax year beginning after December 31, 2000.adjust by the percentage 
19.27 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
19.28 	that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For 
19.29 	2001, the commissioner shall then determine the percent change from the 12 months 
19.30 	ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each 
19.31 	subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending 
19.32 	on August 31 of the year preceding the taxable year. The earned income thresholds as 
19.33 	adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends 
19.34 	in $5, the amount is rounded up to the nearest $10 amount. The determination of the 
19.35 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.

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

20.3 	Sec. 16. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
20.4 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative 
20.5 	minimum tax, the exemption amount is:
20.6 	(1) for taxable years beginning before January 1, 2006, the exemption determined 
20.7 	under section 55(d) of the Internal Revenue Code, as amended through December 31, 
20.8 	1992; and
20.9 	(2), for taxable years beginning after December 31, 2005, $60,000 for married 
20.10 	couples filing joint returns, $30,000 for married individuals filing separate returns, estates, 
20.11 	and trusts, and $45,000 for unmarried individuals.
20.12 	(b) The exemption amount determined under this subdivision is subject to the phase 
20.13 	out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 
20.14 	taxable income as determined under this section must be substituted in the computation of 
20.15 	the phase out.
20.16 	(c) For taxable years beginning after December 31, 2006, the exemption amount 
20.17 	under paragraph (a), clause (2), must be adjusted for inflation. The commissioner shall 
20.18 	make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 
20.19 	Code except that for the purposes of this subdivision the percentage increase must be 
20.20 	determined from the year starting September 1, 2005, and ending August 31, 2006, as the 
20.21 	base year for adjusting for inflation for the tax year beginning after December 31, 2006.
20.22 	The commissioner shall adjust the exemption amount by the percentage determined 
20.23 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
20.24 	section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007, 
20.25 	the commissioner shall then determine the percent change from the 12 months ending on 
20.26 	August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent 
20.27 	year, from the 12 months ending on August 31, 2005, to the 12 months ending on August 
20.28 	31 of the year preceding the taxable year. The exemption amount as adjusted must be 
20.29 	rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest 
20.30 	$10 amount. The determination of the commissioner under this subdivision is not a rule 
20.31 	under the Administrative Procedure Act.

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

20.34 	Sec. 17. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
21.1 		Subd. 3.Alternative minimum taxable income. "Alternative minimum taxable 
21.2 	income" is Minnesota net income as defined in section 290.01, subdivision 19, and 
21.3 	includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 
21.4 	(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 
21.5 	Minnesota tax return, the minimum tax must be computed on a separate company basis. 
21.6 	If a corporation is part of a tax group filing a unitary return, the minimum tax must be 
21.7 	computed on a unitary basis. The following adjustments must be made.
21.8 	(1) For purposes of the depreciation adjustments under section 56(a)(1) and 
21.9 	56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 
21.10 	service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 
21.11 	income tax purposes, including any modification made in a taxable year under section 
21.12 	290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7, 
21.13 	paragraph (c).
21.14 	For taxable years beginning after December 31, 2000, the amount of any remaining 
21.15 	modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 
21.16 	section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 
21.17 	allowance in the first taxable year after December 31, 2000.
21.18 	(2) The portion of the depreciation deduction allowed for federal income tax 
21.19 	purposes under section 168(k) of the Internal Revenue Code that is required as an addition 
21.20 	under section 290.01, subdivision 19c, clause (16) (14), is disallowed in determining 
21.21 	alternative minimum taxable income.
21.22 	(3) The subtraction for depreciation allowed under section 290.01, subdivision 
21.23 	19d, clause (19) (17), is allowed as a depreciation deduction in determining alternative 
21.24 	minimum taxable income.
21.25 	(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
21.26 	of the Internal Revenue Code does not apply.
21.27 	(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
21.28 	Revenue Code does not apply.
21.29 	(6) The special rule for dividends from section 936 companies under section 
21.30 	56(g)(4)(C)(iii) does not apply.
21.31 	(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue 
21.32 	Code does not apply.
21.33 	(8) The tax preference for intangible drilling costs under section 57(a)(2) of the 
21.34 	Internal Revenue Code must be calculated without regard to subparagraph (E) and the 
21.35 	subtraction under section 290.01, subdivision 19d, clause (4).
22.1 	(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 
22.2 	Revenue Code does not apply.
22.3 	(10) The tax preference for charitable contributions of appreciated property under 
22.4 	section 57(a)(6) of the Internal Revenue Code does not apply.
22.5 	(11) For purposes of calculating the tax preference for accelerated depreciation or 
22.6 	amortization on certain property placed in service before January 1, 1987, under section 
22.7 	57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 
22.8 	deduction allowed under section 290.01, subdivision 19e.
22.9 	For taxable years beginning after December 31, 2000, the amount of any remaining 
22.10 	modification made under section 290.01, subdivision 19e, not previously deducted is a 
22.11 	depreciation or amortization allowance in the first taxable year after December 31, 2004.
22.12 	(12) For purposes of calculating the adjustment for adjusted current earnings in 
22.13 	section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 
22.14 	income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 
22.15 	minimum taxable income as defined in this subdivision, determined without regard to the 
22.16 	adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
22.17 	(13) For purposes of determining the amount of adjusted current earnings under 
22.18 	section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 
22.19 	56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend 
22.20 	gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the 
22.21 	amount of refunds of income, excise, or franchise taxes subtracted as provided in section 
22.22 	290.01, subdivision 19d, clause (10) (8), or (iii) the amount of royalties, fees or other like 
22.23 	income subtracted as provided in section 290.01, subdivision 19d, clause (11) (9).
22.24 	(14) Alternative minimum taxable income excludes the income from operating in a 
22.25 	job opportunity building zone as provided under section 469.317.
22.26 	(15) Alternative minimum taxable income excludes the income from operating in a 
22.27 	biotechnology and health sciences industry zone as provided under section 469.337.
22.28 	(16) Alternative minimum taxable income excludes the income from operating in an 
22.29 	international economic development zone as provided under section 469.326.
22.30 	Items of tax preference must not be reduced below zero as a result of the 
22.31 	modifications in this subdivision.

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

22.34 	Sec. 18. Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read:
23.1 		Subd. 8.Deposit; definition. (a) "Deposit," as used in subdivision 7 6, paragraph 
23.2 	(n), has the meanings in this subdivision.
23.3 	(b) "Deposit" means the unpaid balance of money or its equivalent received or 
23.4 	held by a financial institution in the usual course of business and for which it has given 
23.5 	or is obligated to give credit, either conditionally or unconditionally, to a commercial, 
23.6 	checking, savings, time, or thrift account whether or not advance notice is required to 
23.7 	withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift 
23.8 	certificate, investment certificate, or certificate of indebtedness, or other similar name, or a 
23.9 	check or draft drawn against a deposit account and certified by the financial institution, 
23.10 	or a letter of credit or a traveler's check on which the financial institution is primarily 
23.11 	liable. However, without limiting the generality of the term "money or its equivalent," any 
23.12 	such account or instrument must be regarded as evidencing the receipt of the equivalent 
23.13 	of money when credited or issued in exchange for checks or drafts or for a promissory 
23.14 	note upon which the person obtaining the credit or instrument is primarily or secondarily 
23.15 	liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other 
23.16 	instruments forwarded to the bank for collection.
23.17 	(c) "Deposit" means trust funds received or held by the financial institution, whether 
23.18 	held in the trust department or held or deposited in any other department of the financial 
23.19 	institution.
23.20 	(d) "Deposit" means money received or held by a financial institution, or the credit 
23.21 	given for money or its equivalent received or held by a financial institution, in the usual 
23.22 	course of business for a special or specific purpose, regardless of the legal relationship so 
23.23 	established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds, 
23.24 	funds held as security for an obligation due to the financial institution or others, including 
23.25 	funds held as dealers reserves, or for securities loaned by the financial institution, funds 
23.26 	deposited by a debtor to meet maturing obligations, funds deposited as advance payment 
23.27 	on subscriptions to United States government securities, funds held for distribution or 
23.28 	purchase of securities, funds held to meet its acceptances or letters of credit, and withheld 
23.29 	taxes. It does not include funds received by the financial institution for immediate 
23.30 	application to the reduction of an indebtedness to the receiving financial institution, or 
23.31 	under condition that the receipt of the funds immediately reduces or extinguishes the 
23.32 	indebtedness.
23.33 	(e) "Deposit" means outstanding drafts, including advice or another such institution, 
23.34 	cashier's checks, money orders, or other officer's checks issued in the usual course 
23.35 	of business for any purpose, but not including those issued in payment for services, 
23.36 	dividends, or purchases or other costs or expenses of the financial institution itself.
24.1 	(f) "Deposit" means money or its equivalent held as a credit balance by a financial 
24.2 	institution on behalf of its customer if the entity is engaged in soliciting and holding such 
24.3 	balances in the regular course of its business.
24.4 	(g) Interinstitution fund transfers are not deposits.

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

24.6 	Sec. 19. Minnesota Statutes 2006, section 290A.03, subdivision 7, is amended to read:
24.7 		Subd. 7.Dependent. "Dependent" means any person who is considered a 
24.8 	dependent under sections 151 and 152 of the Internal Revenue Code. In the case of a son, 
24.9 	stepson, daughter, or stepdaughter of the claimant, amounts received as a Minnesota 
24.10 	family investment program grant, allowance to or on behalf of the child, surplus food, or 
24.11 	other relief in kind supplied by a governmental agency must not be taken into account 
24.12 	in determining whether the child received more than half of the child's support from 
24.13 	the claimant.

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

24.16 	Sec. 20. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:
24.17 		Subdivision 1.Determination. All property includable in the Minnesota gross 
24.18 	estate of a decedent shall be valued in accordance with the provisions of sections 2031 or 
24.19 	2032 and, if applicable, 2032A, of the Internal Revenue Code and any elections made in 
24.20 	valuing the federal gross estate shall be applicable in valuing the Minnesota gross estate. 
24.21 	Values for purposes of the estate tax on both probate and nonprobate assets shall be the 
24.22 	same as those finally determined for purposes of the federal estate tax on a decedent's 
24.23 	estate. Except as otherwise provided in section 291.075, the value of all property 
24.24 	includable in the Minnesota gross estate of a decedent may be independently determined 
24.25 	under those sections for Minnesota estate tax purposes.

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

24.28 	Sec. 21. TRANSITION; POLLUTION CONTROL FACILITIES 
24.29 	AMORTIZATION.
 24.30 	The amount of additions to federal taxable income pursuant to Minnesota Statutes, 
24.31 	section 290.01, subdivision 19c, clause (10), that are properly subtractable pursuant 
24.32 	to Minnesota Statutes, section 290.01, subdivision 19d, clause (8), for taxable years 
25.1 	beginning after December 31, 2006, and have not been subtracted pursuant to Minnesota 
25.2 	Statutes, section 290.01, subdivision 19d, clause (8), are subtractable in the taxpayer's first 
25.3 	taxable year beginning after December 31, 2006.

25.4 	ARTICLE 2
25.5 	SALES AND USE TAXES

25.6 	Section 1. Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to 
25.7 	read:
25.8 		Subd. 2.Bad debt loss. If a claim relates to an overpayment because of a failure to 
25.9 	deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered 
25.10 	timely if filed within seven years from the date prescribed for the filing of the return. A 
25.11 	claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2 
25.12 	years from the date prescribed for filing the return, plus any extensions granted for filing 
25.13 	the return, but only if filed within the extended time when the bad debt was (1) written off 
25.14 	as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted 
25.15 	for federal income tax purposes or would have been eligible for a bad debt deduction for 
25.16 	federal income tax purposes if the taxpayer were required to file a federal income tax 
25.17 	return, or within one year from the date the taxpayer's federal income tax return is timely 
25.18 	filed claiming the bad debt deduction, whichever period is later. The refund or credit is 
25.19 	limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes 
25.20 	of this subdivision, has the same meaning as that term is used in United States Code, 
25.21 	title 26, section 166, except that for a claim relating to an overpayment of taxes under 
25.22 	chapter 297A the following are excluded from the calculation of bad debt: financing 
25.23 	charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts 
25.24 	on property that remain in the possession of the seller until the full purchase price is 
25.25 	paid; expenses incurred in attempting to collect any debt; and repossessed property. For 
25.26 	purposes of reporting a payment received on previously claimed bad debt under chapter 
25.27 	297A, any payments made on a debt or account are applied first proportionally to the 
25.28 	taxable price of the property or service and the sales tax on it, and secondly to interest, 
25.29 	service charges, and any other charges.

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

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

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

26.6 	Sec. 3. Minnesota Statutes 2006, section 289A.60, subdivision 25, is amended to read:
26.7 		Subd. 25.Penalty for failure to properly complete sales and use tax return. A 
26.8 	person who fails to report local sales taxtaxes required to be reported on a sales and use 
26.9 	tax return or who fails to report local sales taxtaxes on separate tax lines on the sales 
26.10 	and use tax return is subject to a penalty of five percent of the amount of tax not properly 
26.11 	reported on the return. A person who files a consolidated tax return but fails to report 
26.12 	location information is subject to a $500 penalty for each return not containing location 
26.13 	information. In addition, the commissioner may revoke the privilege for a taxpayer to 
26.14 	file consolidated returns and may require the taxpayer to separately register each location 
26.15 	and to file a tax return for each location.

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

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

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

26.24 	Sec. 5. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:
26.25 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
26.26 	to, each of the transactions listed in this subdivision.
26.27 	(b) Sale and purchase include:
26.28 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
26.29 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
26.30 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
26.31 	in money or by exchange or barter, tangible personal property, other than a manufactured 
26.32 	home used for residential purposes for a continuous period of 30 days or more.
27.1 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
27.2 	tangible personal property for a consideration for consumers who furnish either directly or 
27.3 	indirectly the materials used in the production, fabrication, printing, or processing.
27.4 	(d) Sale and purchase include the preparing for a consideration of food. 
27.5 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
27.6 	to, the following:
27.7 	(1) prepared food sold by the retailer;
27.8 	(2) soft drinks;
27.9 	(3) candy;
27.10 	(4) dietary supplements; and
27.11 	(5) all food sold through vending machines.
27.12 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
27.13 	gas, water, or steam for use or consumption within this state.
27.14 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
27.15 	computer software whether delivered electronically, by load and leave, or otherwise.
27.16 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
27.17 	services:
27.18 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
27.19 	events, and the making available of amusement devices, tanning facilities, reducing 
27.20 	salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
27.21 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
27.22 	motel, or trailer camp, including furnishing the guest of the facility with access to 
27.23 	telecommunication services, and the granting of any similar license to use real property 
27.24 	in a specific facility, other than the renting or leasing of it for a continuous period of 
27.25 	30 days or more under an enforceable written agreement that may not be terminated 
27.26 	without prior notice;
27.27 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
27.28 	periodic basis, except for parking at a meter;
27.29 	(4) the granting of membership in a club, association, or other organization if:
27.30 	(i) the club, association, or other organization makes available for the use of its 
27.31 	members sports and athletic facilities, without regard to whether a separate charge is 
27.32 	assessed for use of the facilities; and
27.33 	(ii) use of the sports and athletic facility is not made available to the general public 
27.34 	on the same basis as it is made available to members.
27.35 	Granting of membership means both onetime initiation fees and periodic membership 
27.36 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
28.1 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
28.2 	swimming pools; and other similar athletic or sports facilities;
28.3 	(5) delivery of aggregate materials and concrete block by a third party if the delivery 
28.4 	would be subject to the sales tax if provided by the seller of the aggregate material or 
28.5 	concrete block; and
28.6 	(6) services as provided in this clause:
28.7 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
28.8 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
28.9 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
28.10 	include services provided by coin operated facilities operated by the customer;
28.11 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
28.12 	provided by coin operated facilities operated by the customer, and rustproofing, 
28.13 	undercoating, and towing of motor vehicles;
28.14 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
28.15 	pest control and exterminating services;
28.16 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
28.17 	including services performed within the jurisdiction they serve by off-duty licensed peace 
28.18 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
28.19 	organization for monitoring and electronic surveillance of persons placed on in-home 
28.20 	detention pursuant to court order or under the direction of the Minnesota Department 
28.21 	of Corrections;
28.22 	(v) pet grooming services;
28.23 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
28.24 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
28.25 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
28.26 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
28.27 	public utility lines. Services performed under a construction contract for the installation of 
28.28 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
28.29 	(vii) massages, except when provided by a licensed health care facility or 
28.30 	professional or upon written referral from a licensed health care facility or professional for 
28.31 	treatment of illness, injury, or disease; and
28.32 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
28.33 	other similar arrangements, but excluding veterinary and horse boarding services.
28.34 	In applying the provisions of this chapter, the terms "tangible personal property" 
28.35 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
28.36 	and the provision of these taxable services, unless specifically provided otherwise. 
29.1 	Services performed by an employee for an employer are not taxable. Services performed 
29.2 	by a partnership or association for another partnership or association are not taxable if 
29.3 	one of the entities owns or controls more than 80 percent of the voting power of the 
29.4 	equity interest in the other entity. Services performed between members of an affiliated 
29.5 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
29.6 	group of corporations" means those entities that would be classified as members of an 
29.7 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
29.8 	the exclusions in section 1504(b).
29.9 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
29.10 	personal property or taxable services by the United States or any of its agencies or 
29.11 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
29.12 	subdivisions.
29.13 	(i) A sale and a purchase includes the furnishing for a consideration 
29.14 	of telecommunications services, including ancillary services associated with 
29.15 	telecommunication services, cable television services and, direct satellite services, and 
29.16 	ring tones. Telecommunications Telecommunication services include, but are not limited 
29.17 	to, the following services, as defined in section 297A.669: air-to-ground radiotelephone 
29.18 	service, mobile telecommunication service, postpaid calling service, prepaid calling 
29.19 	service, prepaid wireless calling service, and private communication services. The
29.20 	services in this paragraph are taxed to the extent allowed under federal law.
29.21 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
29.22 	the installation charges would be subject to the sales tax if the installation were provided 
29.23 	by the seller of the item being installed.
29.24 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
29.25 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
29.26 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
29.27 	65B.29, subdivision 1, clause (1).

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

29.31 	Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 4, is amended to read:
29.32 		Subd. 4.Retail sale. (a) A "retail sale" means any sale, lease, or rental for any 
29.33 	purpose, other than resale, sublease, or subrent of items by the purchaser in the normal 
29.34 	course of business as defined in subdivision 21.
30.1 	(b) A sale of property used by the owner only by leasing it to others or by holding it 
30.2 	in an effort to lease it, and put to no use by the owner other than resale after the lease or 
30.3 	effort to lease, is a sale of property for resale.
30.4 	(c) A sale of master computer software that is purchased and used to make copies for 
30.5 	sale or lease is a sale of property for resale.
30.6 	(d) A sale of building materials, supplies, and equipment to owners, contractors, 
30.7 	subcontractors, or builders for the erection of buildings or the alteration, repair, or 
30.8 	improvement of real property is a retail sale in whatever quantity sold, whether the sale is 
30.9 	for purposes of resale in the form of real property or otherwise.
30.10 	(e) A sale of carpeting, linoleum, or similar floor covering to a person who provides 
30.11 	for installation of the floor covering is a retail sale and not a sale for resale since a sale 
30.12 	of floor covering which includes installation is a contract for the improvement of real 
30.13 	property.
30.14 	(f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides 
30.15 	for installation of the items is a retail sale and not a sale for resale since a sale of 
30.16 	shrubbery, plants, sod, trees, and similar items that includes installation is a contract for 
30.17 	the improvement of real property.
30.18 	(g) A sale of tangible personal property that is awarded as prizes is a retail sale and 
30.19 	is not considered a sale of property for resale.
30.20 	(h) A sale of tangible personal property utilized or employed in the furnishing or 
30.21 	providing of services under subdivision 3, paragraph (g), clause (1), including, but not 
30.22 	limited to, property given as promotional items, is a retail sale and is not considered a 
30.23 	sale of property for resale.
30.24 	(i) A sale of tangible personal property used in conducting lawful gambling under 
30.25 	chapter 349 or the State Lottery under chapter 349A, including, but not limited to, 
30.26 	property given as promotional items, is a retail sale and is not considered a sale of 
30.27 	property for resale.
30.28 	(j) A sale of machines, equipment, or devices that are used to furnish, provide, or 
30.29 	dispense goods or services, including, but not limited to, coin-operated devices, is a retail 
30.30 	sale and is not considered a sale of property for resale.
30.31 	(k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease 
30.32 	payment becomes due under the terms of the agreement or the trade practices of the 
30.33 	lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, 
30.34 	subdivision 5, but excluding vehicles with a manufacturer's gross vehicle weight rating 
30.35 	greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time 
30.36 	the lease is executed.
31.1 	(l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of 
31.2 	title or possession of the tangible personal property.
31.3 	(m) A sale of a bundled transaction in which one or more of the products included 
31.4 	in the bundle is a taxable product is a retail sale, except that if one of the products 
31.5 	is a telecommunication service, ancillary service, Internet access, or audio or video 
31.6 	programming service, and the seller has maintained books and records identifying through 
31.7 	reasonable and verifiable standards the portions of the price that are attributable to the 
31.8 	distinct and separately identifiable products, then the products are not considered part of a 
31.9 	bundled transaction. For purposes of this paragraph:
31.10 	(1) the books and records maintained by the seller must be maintained in the regular 
31.11 	course of business, and do not include books and records created and maintained by the 
31.12 	seller primarily for tax purposes; 
31.13 	(2) books and records maintained in the regular course of business include, but are 
31.14 	not limited to, financial statements, general ledgers, invoicing and billing systems and 
31.15 	reports, and reports for regulatory tariffs and other regulatory matters; and
31.16 	(3) books and records are maintained primarily for tax purposes when the books 
31.17 	and records identify taxable and nontaxable portions of the price, but the seller maintains 
31.18 	other books and records that identify different prices attributable to the distinct products 
31.19 	included in the same bundled transaction.

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

31.22 	Sec. 7. Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read:
31.23 		Subd. 7.Sales price. (a) "Sales price" means the measure subject to sales tax, and 
31.24 	means the total amount of consideration, including cash, credit, personal property, and 
31.25 	services, for which personal property or services are sold, leased, or rented, valued in 
31.26 	money, whether received in money or otherwise, without any deduction for the following:
31.27 	(1) the seller's cost of the property sold;
31.28 	(2) the cost of materials used, labor or service cost, interest, losses, all costs of 
31.29 	transportation to the seller, all taxes imposed on the seller, and any other expenses of 
31.30 	the seller;
31.31 	(3) charges by the seller for any services necessary to complete the sale, other than 
31.32 	delivery and installation charges;
31.33 	(4) delivery charges, except the percentage of the delivery charge allocated to 
31.34 	delivery of tax exempt property, when the delivery charge is allocated by using either (i) a 
31.35 	percentage based on the total sales price of the taxable property compared to the total sales 
32.1 	price of all property in the shipment, or (ii) a percentage based on the total weight of the 
32.2 	taxable property compared to the total weight of all property in the shipment; and
32.3 	(5) installation charges; and
32.4 	(6) the value of exempt property given to the purchaser when taxable and exempt 
32.5 	personal property have been bundled together and sold by the seller as a single product 
32.6 	or piece of merchandise.
32.7 	(b) Sales price does not include:
32.8 	(1) discounts, including cash, terms, or coupons, that are not reimbursed by a third 
32.9 	party and that are allowed by the seller and taken by a purchaser on a sale;
32.10 	(2) interest, financing, and carrying charges from credit extended on the sale of 
32.11 	personal property or services, if the amount is separately stated on the invoice, bill of sale, 
32.12 	or similar document given to the purchaser; and
32.13 	(3) any taxes legally imposed directly on the consumer that are separately stated on 
32.14 	the invoice, bill of sale, or similar document given to the purchaser.
32.15 	(c) Sales price includes consideration received by the seller from third parties if:
32.16 	(1) the seller actually receives consideration from a party other than the purchaser 
32.17 	and the consideration is directly related to a price reduction or discount on the sale;
32.18 	(2) the seller has an obligation to pass the price reduction or discount through to 
32.19 	the purchaser; 
32.20 	(3) the amount of the consideration attributable to the sale is fixed and determinable 
32.21 	by the seller at the time of the sale of the item to the purchaser; and
32.22 	(4) one of the following criteria is met: 
32.23 	(i) the purchaser presents a coupon, certificate, or other documentation to the seller 
32.24 	to claim a price reduction or discount when the coupon, certificate, or documentation is 
32.25 	authorized, distributed, or granted by a third party with the understanding that the third 
32.26 	party will reimburse any seller to whom the coupon, certificate, or documentation is 
32.27 	presented; 
32.28 	(ii) the purchaser identifies himself or herself to the seller as a member of a group or 
32.29 	organization entitled to a price reduction or discount. A "preferred customer" card that is 
32.30 	available to any customer does not constitute membership in such a group; or 
32.31 	(iii) the price reduction or discount is identified as a third-party price reduction or 
32.32 	discount on the invoice received by the purchaser or on a coupon, certificate, or other 
32.33 	documentation presented by the purchaser.

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

33.1 	Sec. 8. Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read:
33.2 		Subd. 10.Tangible personal property. (a) "Tangible personal property" means 
33.3 	personal property that can be seen, weighed, measured, felt, or touched, or that is in any 
33.4 	other manner perceptible to the senses. "Tangible personal property" includes, but is not 
33.5 	limited to, electricity, water, gas, steam, and prewritten computer software, and prepaid 
33.6 	calling cards.
33.7 	(b) Tangible personal property does not include:
33.8 	(1) large ponderous machinery and equipment used in a business or production 
33.9 	activity which at common law would be considered to be real property;
33.10 	(2) property which is subject to an ad valorem property tax;
33.11 	(3) property described in section 272.02, subdivision 9, clauses (a) to (d); and 
33.12 	(4) property described in section 272.03, subdivision 2, clauses (3) and (5). 

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

33.15 	Sec. 9. Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read:
33.16 		Subd. 24.Telecommunications services. (a) "Telecommunications services" means 
33.17 	the electronic transmission, conveyance, or routing of voice, data, audio, video, or any 
33.18 	other information or signals to a point, or between or among points, by or through any 
33.19 	electronic, satellite, optical, microwave, or other medium or method now in existence or 
33.20 	hereafter devised, regardless of the protocol used for such transmission, conveyance, 
33.21 	or routing.
33.22 	(b) Telecommunications services includes the furnishing for consideration of access 
33.23 	to telephone services by a hotel to its guests include transmission, conveyance, or routing 
33.24 	in which computer processing applications are used to act on the form, code, or protocol 
33.25 	of the content for purposes of transmission, conveyance, or routing, without regard to 
33.26 	whether the service is referred to as voice over Internet protocol services or is classified by 
33.27 	the Federal Communications Commission as enhanced or value added.
33.28 	(c) Telecommunications services do not include:
33.29 	(1) services purchased with a prepaid telephone calling card;
33.30 	(2) private communication service purchased by an agent acting on behalf of the 
33.31 	State Lottery;
33.32 	(3) information services; and
33.33 	(4) purchases of telecommunications when the purchaser uses the purchased services 
33.34 	as a component part of or integrates such service into another telecommunications service 
33.35 	that is sold by the purchaser in the normal course of business.
34.1 	(d) For purposes of this subdivision, "information services" means the offering of 
34.2 	the capability for generating, acquiring, storing, transforming, processing, retrieving, 
34.3 	utilizing, or making available information.
34.4 	(1) data processing and information services that allow data to be generated, 
34.5 	acquired, stored, processed, or retrieved and delivered by an electronic transmission to 
34.6 	a purchaser when the purchaser's primary purpose for the underlying transaction is the 
34.7 	processed data or information;
34.8 	(2) installation or maintenance of wiring or equipment on a customer's premises;
34.9 	(3) tangible personal property;
34.10 	(4) advertising, including, but not limited to, directory advertising;
34.11 	(5) billing and collection services provided to third parties;
34.12 	(6) Internet access service;
34.13 	(7) radio and television audio and video programming services, regardless of the 
34.14 	medium, including the furnishing of transmission, conveyance, and routing of such 
34.15 	services by the programming service provider. Radio and television audio and video 
34.16 	programming services includes, but is not limited to, cable service as defined in United 
34.17 	States Code, title 47, section 522(6), and audio and video programming services delivered 
34.18 	by commercial mobile radio service providers, as defined in Code of Federal Regulations, 
34.19 	title 47, section 20.3;
34.20 	(8) ancillary services; or
34.21 	(9) digital products delivered electronically, including, but not limited to, software, 
34.22 	music, video, reading materials, or ring tones.

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

34.25 	Sec. 10. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
34.26 	subdivision to read:
34.27 		Subd. 38.Bundled transaction. (a) "Bundled transaction" means the retail sale 
34.28 	of two or more products when the products are otherwise distinct and identifiable, and 
34.29 	the products are sold for one nonitemized price. As used in this subdivision, "product" 
34.30 	includes tangible personal property, services, intangibles, and digital goods, but does not 
34.31 	include real property or services to real property. A bundled transaction does not include 
34.32 	the sale of any products in which the sales price varies, or is negotiable, based on the 
34.33 	selection by the purchaser of the products included in the transaction.
34.34 	(b) For purposes of this subdivision, "distinct and identifiable" products does not 
34.35 	include:
35.1 	(1) packaging and other materials, such as containers, boxes, sacks, bags, and 
35.2 	bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the 
35.3 	products and are incidental or immaterial to the retail sale. Examples of packaging that are 
35.4 	incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags, 
35.5 	and express delivery envelopes and boxes;
35.6 	(2) a promotional product provided free of charge with the required purchase of 
35.7 	another product. A promotional product is provided free of charge if the sales price of 
35.8 	another product, which is required to be purchased in order to receive the promotional 
35.9 	product, does not vary depending on the inclusion of the promotional product; and 
35.10 	(3) items included in the definition of sales price.
35.11 	(c) For purposes of this subdivision, the term "one nonitemized price" does not 
35.12 	include a price that is separately identified by product on binding sales or other supporting 
35.13 	sales-related documentation made available to the customer in paper or electronic form 
35.14 	including, but not limited to an invoice, bill of sale, receipt, contract, service agreement, 
35.15 	lease agreement, periodic notice of rates and services, rate card, or price list.
35.16 	(d) A transaction that otherwise meets the definition of a bundled transaction is 
35.17 	not a bundled transaction if it is: 
35.18 	(1) the retail sale of tangible personal property and a service and the tangible 
35.19 	personal property is essential to the use of the service, and is provided exclusively in 
35.20 	connection with the service, and the true object of the transaction is the service; 
35.21 	(2) the retail sale of services if one service is provided that is essential to the use or 
35.22 	receipt of a second service and the first service is provided exclusively in connection with 
35.23 	the second service and the true object of the transaction is the second service; 
35.24 	(3) a transaction that includes taxable products and nontaxable products and the 
35.25 	purchase price or sales price of the taxable products is de minimis; or 
35.26 	(4) the retail sale of exempt tangible personal property and taxable tangible personal 
35.27 	property if:
35.28 	(i) the transaction includes food and food ingredients, drugs, durable medical 
35.29 	equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices, 
35.30 	or medical supplies; and
35.31 	(ii) the seller's purchase price or sales price of the taxable tangible personal property 
35.32 	is 50 percent or less of the total purchase price or sales price of the bundled tangible 
35.33 	personal property. Sellers must not use a combination of the purchase price and sales 
35.34 	price of the tangible personal property when making the 50 percent determination for 
35.35 	a transaction.
36.1 	(e) For purposes of this subdivision, "purchase price" means the measure subject to 
36.2 	use tax on purchases made by the seller, and "de minimis" means that the seller's purchase 
36.3 	price or sales price of the taxable products is ten percent or less of the total purchase 
36.4 	price or sales price of the bundled products. Sellers shall use either the purchase price 
36.5 	or the sales price of the products to determine if the taxable products are de minimis. 
36.6 	Sellers must not use a combination of the purchase price and sales price of the products 
36.7 	to determine if the taxable products are de minimis. Sellers shall use the full term of a 
36.8 	service contract to determine if the taxable products are de minimis.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

38.1 	Sec. 18. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
38.2 	subdivision to read:
38.3 		Subd. 46.Fur clothing. "Fur clothing" means human wearing apparel that is 
38.4 	required by the Federal Fur Products Labeling Act, United States Code, title 15, section 
38.5 	69, to be labeled as a fur product, and the value of the fur components in the product 
38.6 	is more than three times the value of the next most valuable tangible component. For 
38.7 	purposes of this subdivision, "fur" means any animal skin or part of an animal skin with 
38.8 	hair, fleece, or fur fibers attached to it, either in its raw or processed state, but does not 
38.9 	include animal skins that have been converted into leather or suede, or from which the 
38.10 	hair, fleece, or fur fiber has been completely removed in processing the skins.

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

38.13 	Sec. 19. Minnesota Statutes 2006, section 297A.63, subdivision 1, is amended to read:
38.14 		Subdivision 1.Use of tangible personal property or taxable services. (a) For the 
38.15 	privilege of using, storing, distributing, or consuming in Minnesota tangible personal 
38.16 	property or taxable services purchased for use, storage, distribution, or consumption in 
38.17 	this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the 
38.18 	purchase price of retail sales of the tangible personal property or taxable services at the 
38.19 	rate of tax imposed under section 297A.62. A person that purchases property from a 
38.20 	Minnesota retailer and returns the tangible personal property to a point within Minnesota, 
38.21 	except in the course of interstate commerce, after it was delivered outside of Minnesota, 
38.22 	is subject to the use tax. 
38.23 	(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
38.24 	was paid on the sales price of the tangible personal property or taxable services. 
38.25 	(c) No tax is imposed under paragraph (a) if the purchase meets the requirements for 
38.26 	exemption under section 297A.67, subdivision 21. 
38.27 	(d) When a transaction otherwise meets the definition of a bundled transaction, but 
38.28 	is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and 
38.29 	the seller's purchase price of the taxable product or taxable tangible personal property is 
38.30 	equal to or greater than $100, then use tax is imposed on the purchase price of the taxable 
38.31 	product or taxable personal property. For purposes of this paragraph, "purchase price" 
38.32 	means the measure subject to use tax on purchases made by the seller.

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

39.1 	Sec. 20. Minnesota Statutes 2006, section 297A.665, is amended to read:
39.2 	297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
39.3 	(a) For the purpose of the proper administration of this chapter and to prevent 
39.4 	evasion of the tax, until the contrary is established, it is presumed that:
39.5 	(1) all gross receipts are subject to the tax; and
39.6 	(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 
39.7 	in Minnesota.
39.8 	(b) The burden of proving that a sale is not a taxable retail sale is on the seller. 
39.9 	However, the seller may take from the purchaser at the time of the sale a fully completed 
39.10 	exemption certificate which conclusively relieves the seller from collecting and remitting 
39.11 	the tax. This However, a seller is relieved of liability if:
39.12 	(1) the seller obtains a fully completed exemption certificate or all the relevant 
39.13 	information required by section 297A.72, subdivision 2, at the time of the sale or within 
39.14 	90 days after the date of the sale; or
39.15 	(2) if the seller has not obtained a fully completed exemption certificate or all the 
39.16 	relevant information required by section 297A.72, subdivision 2, within the time provided 
39.17 	in clause (1), within 120 days after a request for substantiation by the commissioner, 
39.18 	the seller either:
39.19 	(i) obtains in good faith a fully completed exemption certificate or all the relevant 
39.20 	information required by section 297A.72, subdivision 2, from the purchaser; or
39.21 	(ii) proves by other means that the transaction was not subject to tax.
39.22 	(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
39.23 	(1) fraudulently fails to collect the tax; or 
39.24 	(2) solicits purchasers to participate in the unlawful claim of an exemption. If a 
39.25 	seller claiming that certain sales are exempt is not in possession of the required exemption 
39.26 	certificates within 60 days after receiving written notice from the commissioner that the 
39.27 	certificates are required, deductions claimed by the seller that required delivery of the 
39.28 	certificates must be disallowed. If the certificates are delivered to the commissioner within 
39.29 	the 60-day period, the commissioner may verify the reason or basis for the exemption 
39.30 	claimed in the certificates before allowing any deductions. A deduction must not be 
39.31 	granted on the basis of certificates delivered to the commissioner after the 60-day period.
39.32 	(c) (d) A purchaser of tangible personal property or any items listed in section 
39.33 	297A.63 that are shipped or brought to Minnesota by the purchaser has the burden 
39.34 	of proving that the property was not purchased from a retailer for storage, use, or 
39.35 	consumption in Minnesota. 

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

40.3 	Sec. 21. Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read:
40.4 		Subd. 3.Defined telecommunications services sourcing. The sale of the following 
40.5 	telecommunication services shall be sourced to each level of taxing jurisdiction in 
40.6 	paragraphs (a) to (d).
40.7 	(a) A sale of mobile telecommunications services, other than air-to-ground 
40.8 	radiotelephone service and prepaid calling service, is sourced to the customer's place of 
40.9 	primary use as required by the Mobile Telecommunications Sourcing Act.
40.10 	(b) A sale of postpaid calling service is sourced to the origination point of the 
40.11 	telecommunications signal as first identified by either:
40.12 	(1) the seller's telecommunications system; or
40.13 	(2) information received by the seller from its service provider, where the system 
40.14 	used to transport such signals is not that of the seller.
40.15 	(c) A sale of prepaid calling service or prepaid wireless calling service is sourced in 
40.16 	accordance with section 297A.668, subdivision 2. However, in the case of a sale of mobile 
40.17 	telecommunications service that is a prepaid telecommunicationswireless calling service, 
40.18 	the rule provided in section 297A.668, subdivision 2, paragraph (f), shall include as an 
40.19 	option the location associated with the mobile telephone number. 
40.20 	(d) A sale of a private communication service is sourced as follows:
40.21 	(1) service for a separate charge related to a customer channel termination point is 
40.22 	sourced to each level of jurisdiction in which the customer channel termination point 
40.23 	is located;
40.24 	(2) service where all customer termination points are located entirely within one 
40.25 	jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer 
40.26 	channel termination points are located;
40.27 	(3) service for segments of a channel between two customer channel termination 
40.28 	points located in different jurisdictions and which segment of channel are separately 
40.29 	charged is sourced 50 percent in each level of jurisdiction in which the customer channel 
40.30 	termination points are located; and
40.31 	(4) service for segments of a channel located in more than one jurisdiction or 
40.32 	levels of jurisdiction and which segments are not separately billed is sourced in each 
40.33 	jurisdiction based on the percentage determined by dividing the number of customer 
40.34 	channel termination points in the jurisdiction by the total number of customer channel 
40.35 	termination points.

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

41.3 	Sec. 22. Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to 
41.4 	read:
41.5 		Subd. 13.Postpaid calling service. "Postpaid calling service," for purposes of 
41.6 	this section, means the telecommunications service obtained by making a payment 
41.7 	on a call-by-call basis either through the use of a credit card or payment mechanism 
41.8 	such as a bank card, travel card, credit card, or debit card, or by a charge made to 
41.9 	a telephone number that is not associated with the origination or termination of the 
41.10 	telecommunications service. A postpaid calling service includes a telecommunications 
41.11 	service, except a prepaid wireless calling service, that would be a prepaid calling service 
41.12 	except it is not exclusively a telecommunication service.

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

41.15 	Sec. 23. Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to 
41.16 	read:
41.17 		Subd. 14.Prepaid calling service. "Prepaid calling service," for purposes of this 
41.18 	section, means a telecommunications service that:
41.19 	(1) provides the right to access exclusively telecommunications services, which;
41.20 	(2) must be paid for in advance and which;
41.21 	(3) enables the origination of calls using an access number or authorization code, 
41.22 	whether manually or electronically dialed,; and that
41.23 	(4) is sold in predetermined units or dollars of which the number declines with 
41.24 	use in a known amount.

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

41.26 	Sec. 24. Minnesota Statutes 2006, section 297A.669, is amended by adding a 
41.27 	subdivision to read:
41.28 		Subd. 14a.Prepaid wireless calling service. "Prepaid wireless calling service," for 
41.29 	purposes of this section, means a telecommunications service that: 
41.30 	(1) provides the right to utilize mobile wireless service as well as other 
41.31 	nontelecommunications services, including the download of digital products delivered 
41.32 	electronically, content, and ancillary services; 
42.1 	(2) must be paid for in advance; and 
42.2 	(3) is sold in predetermined units or dollars of which the number declines with 
42.3 	use in a known amount.

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

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

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

42.12 	Sec. 26. Minnesota Statutes 2006, section 297A.67, subdivision 7, is amended to read:
42.13 		Subd. 7.Drugs; medical devices. (a) Sales of the following drugs and medical 
42.14 	devices are exempt:
42.15 	(1) drugs for human use, including over-the-counter drugs;
42.16 	(2) single-use finger-pricking devices for the extraction of blood and other single-use 
42.17 	devices and single-use diagnostic agents used in diagnosing, monitoring, or treating 
42.18 	diabetes;
42.19 	(3) insulin and medical oxygen for human use, regardless of whether prescribed 
42.20 	or sold over the counter;
42.21 	(4) prosthetic devices;
42.22 	(5) durable medical equipment for home use only;
42.23 	(6) mobility enhancing equipment; and
42.24 	(7) prescription corrective eyeglasses; and
42.25 	(8) kidney dialysis equipment, including repair and replacement parts.
42.26 	(b) For purposes of this subdivision:
42.27 	(1) "Drug" means a compound, substance, or preparation, and any component of 
42.28 	a compound, substance, or preparation, other than food and food ingredients, dietary 
42.29 	supplements, or alcoholic beverages that is:
42.30 	(i) recognized in the official United States Pharmacopoeia, official Homeopathic 
42.31 	Pharmacopoeia of the United States, or official National Formulary, and supplement 
42.32 	to any of them;
43.1 	(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention 
43.2 	of disease; or
43.3 	(iii) intended to affect the structure or any function of the body.
43.4 	(2) "Durable medical equipment" means equipment, including repair and 
43.5 	replacement parts, but not including mobility enhancing equipment, that:
43.6 	(i) can withstand repeated use;
43.7 	(ii) is primarily and customarily used to serve a medical purpose;
43.8 	(iii) generally is not useful to a person in the absence of illness or injury; and
43.9 	(iv) is not worn in or on the body.
43.10 	(3) "Mobility enhancing equipment" means equipment, including repair and 
43.11 	replacement parts, but not including durable medical equipment, that:
43.12 	(i) is primarily and customarily used to provide or increase the ability to move from 
43.13 	one place to another and that is appropriate for use either in a home or a motor vehicle;
43.14 	(ii) is not generally used by persons with normal mobility; and
43.15 	(iii) does not include any motor vehicle or equipment on a motor vehicle normally 
43.16 	provided by a motor vehicle manufacturer.
43.17 	(4) "Over-the-counter drug" means a drug that contains a label that identifies the 
43.18 	product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The 
43.19 	label must include a "drug facts" panel or a statement of the active ingredients with a list of 
43.20 	those ingredients contained in the compound, substance, or preparation. Over-the-counter 
43.21 	drugs do not include grooming and hygiene products, regardless of whether they otherwise 
43.22 	meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions, 
43.23 	shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
43.24 	(5) "Prescribed" and "prescription" means a direction in the form of an order, 
43.25 	formula, or recipe issued in any form of oral, written, electronic, or other means of 
43.26 	transmission by a duly licensed health care professional.
43.27 	(6) "Prosthetic device" means a replacement, corrective, or supportive device, 
43.28 	including repair and replacement parts, worn on or in the body to:
43.29 	(i) artificially replace a missing portion of the body;
43.30 	(ii) prevent or correct physical deformity or malfunction; or
43.31 	(iii) support a weak or deformed portion of the body.
43.32 	Prosthetic device does not include corrective eyeglasses.
43.33 	(7) "Kidney dialysis equipment" means equipment that:
43.34 	(i) is used to remove waste products that build up in the blood when the kidneys are 
43.35 	not able to do so on their own; and
43.36 	(ii) can withstand repeated use, including multiple use by a single patient. 

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

44.2 	Sec. 27. Minnesota Statutes 2006, section 297A.67, subdivision 8, is amended to read:
44.3 		Subd. 8.Clothing. (a) Clothing is exempt. For purposes of this subdivision, 
44.4 	"clothing" means all human wearing apparel suitable for general use.
44.5 	(b) Clothing includes, but is not limited to, aprons, household and shop; athletic 
44.6 	supporters; baby receiving blankets; bathing suits and caps; beach capes and coats; belts 
44.7 	and suspenders; boots; coats and jackets; costumes; children and adult diapers, including 
44.8 	disposable; ear muffs; footlets; formal wear; garters and garter belts; girdles; gloves and 
44.9 	mittens for general use; hats and caps; hosiery; insoles for shoes; lab coats; neckties; 
44.10 	overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes and shoe laces; 
44.11 	slippers; sneakers; socks and stockings; steel-toed boots; underwear; uniforms, athletic 
44.12 	and nonathletic; and wedding apparel.
44.13 	(c) Clothing does not include the following:
44.14 	(1) belt buckles sold separately;
44.15 	(2) costume masks sold separately;
44.16 	(3) patches and emblems sold separately;
44.17 	(4) sewing equipment and supplies, including but not limited to, knitting needles, 
44.18 	patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles;
44.19 	(5) sewing materials that become part of clothing, including but not limited to, 
44.20 	buttons, fabric, lace, thread, yarn, and zippers;
44.21 	(6) clothing accessories or equipment;
44.22 	(7) sports or recreational equipment; and
44.23 	(8) protective equipment.
44.24 	Clothing also does not include apparel made from fur if a uniform definition of "apparel 
44.25 	made from fur" is developed by the member states of the Streamlined Sales and Use Tax 
44.26 	Agreement "fur clothing" as defined in section 297A.61, subdivision 46.
44.27 	For purposes of this subdivision, "clothing accessories or equipment" means 
44.28 	incidental items worn on the person or in conjunction with clothing. Clothing accessories 
44.29 	and equipment include, but are not limited to, briefcases; cosmetics; hair notions, including 
44.30 	barrettes, hair bows, and hairnets; handbags; handkerchiefs; jewelry; nonprescription 
44.31 	sunglasses; umbrellas; wallets; watches; and wigs and hairpieces. "Sports or recreational 
44.32 	equipment" means items designed for human use and worn in conjunction with an athletic 
44.33 	or recreational activity that are not suitable for general use. Sports and recreational 
44.34 	equipment includes, but is not limited to, ballet and tap shoes; cleated or spiked athletic 
44.35 	shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf 
45.1 	gloves; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller 
45.2 	and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins. 
45.3 	"Protective equipment" means items for human wear and designed as protection of the 
45.4 	wearer against injury or disease or as protection against damage or injury of other persons 
45.5 	or property but not suitable for general use. Protective equipment includes, but is not 
45.6 	limited to, breathing masks; clean room apparel and equipment; ear and hearing protectors; 
45.7 	face shields; finger guards; hard hats; helmets; paint or dust respirators; protective gloves; 
45.8 	safety glasses and goggles; safety belts; tool belts; and welders gloves and masks.

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

45.11 	Sec. 28. Minnesota Statutes 2006, section 297A.67, subdivision 9, is amended to read:
45.12 		Subd. 9.Baby products. Breast pumps, baby bottles and nipples, pacifiers, teething 
45.13 	rings, and infant syringes are exempt.

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

45.16 	Sec. 29. Minnesota Statutes 2006, section 297A.68, subdivision 11, is amended to read:
45.17 		Subd. 11.Advertising materials. Materials designed to advertise and promote the 
45.18 	sale of merchandise or services are exempt if these materials are mailed or transferred to a 
45.19 	person outside the state for use solely outside the state. Mailing and reply envelopes and 
45.20 	cards and other shipping materials including, but not limited to, boxes, labels, containers, 
45.21 	and banding, used exclusively in connection with these advertising and promotional 
45.22 	materials are included in this exemption. The exemption applies regardless of where the 
45.23 	mailing occurs. The storage of these materials in the state for the purpose of subsequently 
45.24 	shipping or otherwise transferring the material out of state is also exempt if the other 
45.25 	conditions in this subdivision are met. For purposes of this subdivision, materials that have 
45.26 	a primary purpose other than advertising, such as fulfilling a legal obligation or furnishing 
45.27 	nonadvertising information, are not materials designed to advertise and promote the sale 
45.28 	of merchandise or services even if they do include advertising content.

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

45.30 	Sec. 30. Minnesota Statutes 2006, section 297A.68, subdivision 16, is amended to read:
45.31 		Subd. 16.Packing materials. Packing materials used to pack and ship household 
45.32 	goods and that are provided to and remain with the customer of a for-hire carrier are 
46.1 	exempt if the ultimate destination of the goods is outside Minnesota and if the goods
46.2 	packing materials are not later returned to a point within Minnesota, except in the course 
46.3 	of interstate commerce. This exemption does not apply to tools, equipment, pads, or 
46.4 	accessories owned or leased by the for-hire carrier.

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

46.7 	Sec. 31. Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read:
46.8 		Subd. 35.Telecommunications, cable television, and direct satellite equipment.
 46.9 	(a) Telecommunications, cable television, or direct satellite machinery and equipment 
46.10 	purchased or leased for use directly by a telecommunications, cable television, or 
46.11 	direct satellite service provider primarily in the provision of telecommunications, cable 
46.12 	television, or direct satellite services that are ultimately to be sold at retail are exempt, 
46.13 	regardless of whether purchased by the owner, a contractor, or a subcontractor.
46.14 	(b) For purposes of this subdivision, "telecommunications, cable television, or direct 
46.15 	satellite machinery and equipment" includes, but is not limited to:
46.16 	(1) machinery, equipment, and fixtures utilized in receiving, initiating, 
46.17 	amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring 
46.18 	telecommunications, cable television, or direct satellite services, such as computers, 
46.19 	transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items 
46.20 	performing comparable functions;
46.21 	(2) machinery, equipment, and fixtures used in the transportation of 
46.22 	telecommunications, cable television, or direct satellite services, radio transmitters and 
46.23 	receivers, satellite equipment, microwave equipment, and other transporting media, but 
46.24 	not wire, cable, fiber, poles, or conduit;
46.25 	(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or 
46.26 	enable the machinery in clauses (1) and (2) to accomplish its intended function, such as 
46.27 	auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning 
46.28 	equipment necessary to the operation of the telecommunications, cable television, or direct 
46.29 	satellite equipment; and software necessary to the operation of the telecommunications, 
46.30 	cable television, or direct satellite equipment; and
46.31 	(4) repair and replacement parts, including accessories, whether purchased as spare 
46.32 	parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
46.33 	(c) For purposes of this subdivision, "telecommunications services" means 
46.34 	telecommunications services as defined in section 297A.61, subdivision 24, paragraphs 
46.35 	(a), (c), and (d).

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

47.3 	Sec. 32. Minnesota Statutes 2006, section 297A.69, subdivision 2, is amended to read:
47.4 		Subd. 2.Materials consumed in agricultural production. Materials stored, used, 
47.5 	or consumed in agricultural production of personal property intended to be sold ultimately 
47.6 	at retail are exempt, whether or not the item becomes an ingredient or constituent part 
47.7 	of the property produced. Materials that qualify for this exemption include, but are not 
47.8 	limited to, the following:
47.9 	(1) feeds, seeds, trees, fertilizers, and herbicides, including when purchased for use 
47.10 	by farmers in a federal or state farm or conservation program;
47.11 	(2) materials sold to a veterinarian to be used or consumed in the care, medication, 
47.12 	and treatment of agricultural production animals and horses;
47.13 	(3) chemicals, including chemicals used for cleaning food processing machinery 
47.14 	and equipment;
47.15 	(4) materials, including chemicals, fuels, and electricity purchased by persons 
47.16 	engaged in agricultural production to treat waste generated as a result of the production 
47.17 	process;
47.18 	(5) fuels, electricity, gas, and steam used or consumed in the production process, 
47.19 	except that including electricity, gas, or steam used for space heating, cooling, or lighting 
47.20 	is exempt if (i) it is in excess of the average climate control or lighting for the production 
47.21 	area, and (ii) it is necessary to produce that particular product of facilities housing 
47.22 	agricultural animals;
47.23 	(6) petroleum products and lubricants;
47.24 	(7) packaging materials, including returnable containers used in packaging food and 
47.25 	beverage products; and
47.26 	(8) accessory tools and equipment that are separate detachable units with an ordinary 
47.27 	useful life of less than 12 months used in producing a direct effect upon the product.
47.28 	Machinery, equipment, implements, tools, accessories, appliances, contrivances, and 
47.29 	furniture and fixtures, except those listed in this clause are not included within this 
47.30 	exemption.

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

47.32 	Sec. 33. Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read:
48.1 		Subd. 7.Hospitals and outpatient surgical centers. (a) Sales, except for those 
48.2 	listed in paragraph (c), to a hospital are exempt, if the items purchased are used in 
48.3 	providing hospital services. For purposes of this subdivision, "hospital" means a hospital 
48.4 	organized and operated for charitable purposes within the meaning of section 501(c)(3) of 
48.5 	the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction, 
48.6 	and "hospital services" are services authorized or required to be performed by a "hospital" 
48.7 	under chapter 144.
48.8 	(b) Sales, except for those listed in paragraph (c), to an outpatient surgical center 
48.9 	are exempt, if the items purchased are used in providing outpatient surgical services. For 
48.10 	purposes of this subdivision, "outpatient surgical center" means an outpatient surgical 
48.11 	center organized and operated for charitable purposes within the meaning of section 
48.12 	501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other 
48.13 	jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means: 
48.14 	(1) services authorized or required to be performed by an outpatient surgical center under 
48.15 	chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means 
48.16 	health services furnished to a person whose medical condition is sufficiently acute to 
48.17 	require treatment unavailable through, or inappropriate to be provided by, a clinic or 
48.18 	physician's office, but not so acute as to require treatment in a hospital emergency room.
48.19 	(c) This exemption does not apply to the following products and services:
48.20 	(1) purchases made by a clinic, physician's office, or any other medical facility not 
48.21 	operating as a hospital or outpatient surgical center, even though the clinic, office, or 
48.22 	facility may be owned and operated by a hospital or outpatient surgical center;
48.23 	(2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and 
48.24 	prepared food, candy, and soft drinks; 
48.25 	(3) building and construction materials used in constructing buildings or facilities 
48.26 	that will not be used principally by the hospital or outpatient surgical center;
48.27 	(4) building, construction, or reconstruction materials purchased by a contractor 
48.28 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
48.29 	guaranteed maximum price covering both labor and materials for use in the construction, 
48.30 	alteration, or repair of a hospital or outpatient surgical center; or
48.31 	(5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5. 
48.32 	(d) A limited liability company also qualifies for exemption under this subdivision if 
48.33 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
48.34 	purchased qualify for the exemption.
48.35 	(e) An entity that contains both a hospital and a nonprofit unit may claim this 
48.36 	exemption on purchases made for both the hospital and nonprofit unit provided that:
49.1 	(1) the nonprofit unit would have qualified for exemption under subdivision 4; and
49.2 	(2) the items purchased would have qualified for the exemption.

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

49.4 	Sec. 34. Minnesota Statutes 2006, section 297A.70, is amended by adding a 
49.5 	subdivision to read:
49.6 		Subd. 17.Private communication service for State Lottery. Private 
49.7 	communication service, as defined in section 297A.61, subdivision 26, is exempt if the 
49.8 	service is purchased by an agent acting on behalf of the State Lottery.

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

49.11 	Sec. 35. Minnesota Statutes 2006, section 297A.72, is amended to read:
49.12 	297A.72 EXEMPTION CERTIFICATES.
49.13 		Subd. 2.Content and form of exemption certificate. An exemption certificate 
49.14 	must be substantially in the form prescribed by the commissioner and. To be fully 
49.15 	completed, the exemption certificate must:
49.16 	(1) either be signed by the purchaser if it is a paper form, or meet the requirements 
49.17 	of section 270C.304 if in electronic form;
49.18 	(2) bear the name and address of the purchaser; and
49.19 	(3) indicate the sales tax account identification number, if any, issued to the 
49.20 	purchaser. as follows:
49.21 	(i) the purchaser's Minnesota tax identification number;
49.22 	(ii) if the purchaser does not have a Minnesota tax identification number, then the 
49.23 	purchaser's state tax identification number that is issued by a state other than Minnesota, 
49.24 	and the name of that state;
49.25 	(iii) if the purchaser does not have an identification number described in either item 
49.26 	(i) or (ii), then the purchaser's federal Employer Identification Number; or
49.27 	(iv) if the purchaser does not have an identification number described in item (i), (ii), 
49.28 	or (iii), then either the number of the purchaser's state-issued driver's license, if valid in 
49.29 	the state of issue, or if the purchaser does not have a driver's license, a valid state-issued 
49.30 	identification number, and the name of the state of issue;
49.31 	(4) indicate the purchaser's type of business, using a business-type coding system 
49.32 	prescribed by the commissioner; and
50.1 	(5) indicate the reason for the exemption, using an exemption reason coding system 
50.2 	prescribed by the commissioner.
50.3 		Subd. 3.Purchaser requirement. A blanket exemption certificate is an exemption 
50.4 	certificate used for continuing future purchases. A purchaser using a blanket exemption 
50.5 	certificate must update it as needed to accurately reflect the information that is required 
50.6 	under subdivision 2.

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

50.8 	Sec. 36. [297A.8155] LIQUOR REPORTING REQUIREMENTS; PENALTY.
50.9 	A person who sells liquor, as defined in section 295.75, subdivision 1, in Minnesota 
50.10 	to a retailer that sells liquor, shall file with the commissioner an annual informational 
50.11 	report, in the form and manner prescribed by the commissioner, indicating the volume of 
50.12 	liquor sold to each retailer in the previous calendar year. The report must be filed on or 
50.13 	before February 28 of each calendar year beginning in 2008. A person failing to file this 
50.14 	report is subject to the penalty imposed under Minnesota Statutes, section 289A.60.

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

50.16 	Sec. 37. Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read:
50.17 		Subd. 2.Payment of tax. (a) Persons who are registered as retailers may make 
50.18 	purchases in this state or import property into this state without payment of the sales or use 
50.19 	taxes imposed by this chapter at the time of purchase or importation, if the purchases or 
50.20 	importations come within the provisions of this section and are made in strict compliance 
50.21 	with the rules of the commissioner.
50.22 	(b) A person described in subdivision 1 may elect to pay directly to the commissioner 
50.23 	any sales or use tax that may be due under this chapter for the acquisition of mobile 
50.24 	transportation equipment and parts and accessories attached or to be attached to such 
50.25 	equipment registered under section 168.187. 
50.26 	(c) The total cost of such equipment and parts and accessories attached or to be 
50.27 	attached to such equipment must be multiplied by a fraction. The numerator of the fraction 
50.28 	is the Minnesota mileage as reported on the current pro rata application provided for in 
50.29 	section 168.187 and the denominator of the fraction is the total mileage reported on the 
50.30 	current pro rata registration application. The amount so determined must be multiplied by 
50.31 	the tax rate to obtain the tax due. 
50.32 	In computing the tax under this section "sales price" does not include the amount of any 
50.33 	tax, except any manufacturer's or importer's excise tax, imposed by the United States 
51.1 	upon or with respect to retail sales, whethertaxes imposed directly on the retailer or the
51.2 	consumer that are separately stated on the invoice, bill of sale, or similar document given 
51.3 	to the purchaser.
51.4 	(d) A retailer covered by this section shall make a return and remit to the 
51.5 	commissioner the tax due for the preceding calendar month in accordance with sections 
51.6 	289A.11 and 289A.20, subdivision 4. 

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

51.8 	Sec. 38. Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read:
51.9 		Subdivision 1.Ordinary course of business. Except as provided in this section, 
51.10 	motor vehicles purchased solely for resale in the ordinary course of business by any motor 
51.11 	vehicle dealer, as defined in section 168.011, subdivision 21, who is licensed under section 
51.12 	168.27, subdivision 2 or 3, including vehicles which bear dealer plates as authorized by 
51.13 	section 168.27, subdivision 16, shall be exempt from the provisions of this chapter. 

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

51.15 	Sec. 39. Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read:
51.16 		Subd. 6.Sales tax exemption; equipment; construction materials. (a) The gross 
51.17 	receipts from the sale of machinery and equipment and repair parts are exempt from 
51.18 	taxation under chapter 297A, if the machinery and equipment:
51.19 	(1) are used in connection with a trade or business;
51.20 	(2) are placed in service in a city that is authorized to designate a zone under section 
51.21 	469.1731, regardless of whether the machinery and equipment are used in a zone; and
51.22 	(3) have a useful life of 12 months or more.
51.23 	(b) The gross receipts from the sale of construction materials are exempt, if they are 
51.24 	used to construct:
51.25 	(1) a facility for use in a trade or business located in a city that is authorized to 
51.26 	designate a zone under section 469.1731, regardless of whether the facility is located in a 
51.27 	zone; or
51.28 	(2) housing that is located in a zone.
51.29 	The exemptions under this paragraph apply regardless of whether the purchase is made by 
51.30 	the owner, the user, or a contractor.
51.31 	(c) A purchaser may claim an exemption under this subdivision for tax on the 
51.32 	purchases up to, but not exceeding:
51.33 	(1) the amount of the tax credit certificates received from the city, less
52.1 	(2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and 
52.2 	section 469.1732, subdivision 2.
52.3 	(d) The tax on sales of items exempted under this subdivision shall be imposed and 
52.4 	collected as if the applicable rate under section 297A.62 applied. Upon application by the 
52.5 	purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall 
52.6 	be paid to the purchaser. The application must include sufficient information to permit 
52.7 	the commissioner to verify the sales tax paid and the eligibility of the claimant to receive 
52.8 	the credit. No more than two applications for refunds may be filed under this subdivision 
52.9 	in a calendar year. The provisions of section 289A.40 apply to the refunds payable 
52.10 	under this subdivision. There is annually appropriated to the commissioner of revenue 
52.11 	the amount required to make the refunds, which must be deducted from the amount of 
52.12 	the city's allocation under section 469.169, subdivision 12, that remains available and its 
52.13 	limitation under section 469.1735. 
52.14 	(e) The amount to be refunded shall bear interest at the rate in section 270C.405
52.15 	from the date90 days after the refund claim is filed with the commissioner.

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

52.18 	Sec. 40. FUR TAX PAYMENTS.
 52.19 	(a) Furriers must file the annual return, required by Minnesota Statutes, section 
52.20 	295.60, subdivision 5, which otherwise would be due March 15, 2008, by September 
52.21 	15, 2007.
52.22 	(b) If a furrier is required by Minnesota Statutes, section 295.60, subdivision 3, to 
52.23 	make installments of quarterly estimates, then the furrier shall make the last installment by 
52.24 	July 15, 2007.

52.25 	EFFECTIVE DATE. Effective July 1, 2007, for sales and purchases made prior to 
52.26 	July 1, 2007.

52.27 	Sec. 41. REPEALER.
 52.28 	(a) Minnesota Statutes 2006, section 295.60, is repealed.
52.29 	(b) Minnesota Statutes 2006, section 297A.61, subdivision 20, is repealed.
52.30 	(c) Minnesota Statutes 2006, section 297A.668, subdivision 6, is repealed.
52.31 	(d) Minnesota Statutes 2006, section 297A.67, subdivision 22, is repealed.

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

53.4 	ARTICLE 3
53.5 	SPECIAL TAXES

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

53.16 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
53.17 	1, 2008.

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

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

53.23 	Sec. 3. Minnesota Statutes 2006, section 287.22, is amended to read:
53.24 	287.22 EXEMPTIONS.
53.25 	The tax imposed by section 287.21 does not apply to: 
53.26 	(1) An executory contract for the sale of real property under which the purchaser is 
53.27 	entitled to or does take possession of the real property, or any assignment or cancellation 
53.28 	of the contract;
53.29 	(2) A mortgage or an amendment, assignment, extension, partial release, or 
53.30 	satisfaction of a mortgage;
53.31 	(3) A will;
53.32 	(4) A plat;
54.1 	(5) A lease, amendment of lease, assignment of lease, or memorandum of lease;
54.2 	(6) A deed, instrument, or writing in which the United States or any agency or 
54.3 	instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;
54.4 	(7) A deed for a cemetery lot or lots;
54.5 	(8) A deed of distribution by a personal representative;
54.6 	(9) A deed to or from a co-owner partitioning their undivided interest in the same 
54.7 	piece of real property;
54.8 	(10) A deed or other instrument of conveyance issued pursuant to a permanent 
54.9 	school fund land exchange under section 92.121 and related laws; 
54.10 	(11) A referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;
54.11 	(12) A referee's, sheriff's, or certificate holder's certificate of redemption from a 
54.12 	mortgage or lien foreclosure sale issued to the redeeming mortgagor or lienee pursuant to 
54.13 	section 580.23 or other statute applicable to redemption by an owner of real property;
54.14 	(13) A deed, instrument, or writing which grants, creates, modifies, or terminates an 
54.15 	easement; and
54.16 	(14) A decree of marriage dissolution, as defined in section 287.01, subdivision 4, 
54.17 	or a deed or other instrument between the parties to the dissolution made pursuant to 
54.18 	the terms of the decree. 

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

54.20 	Sec. 4. Minnesota Statutes 2006, section 287.2205, is amended to read:
54.21 	287.2205 TAX-FORFEITED LAND.
54.22 	Before a state deed for tax-forfeited land may be issued, the deed tax must be paid 
54.23 	by the purchaser of tax-forfeited land whether the purchase is the result of a public 
54.24 	auction or private sale or a repurchase of tax-forfeited land. State agencies and local 
54.25 	units of government that acquire tax-forfeited land by purchase or any other means are 
54.26 	subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a 
54.27 	governmental subdivision for an authorized public use under section 282.01, subdivision 
54.28 	1a, or for redevelopment purposes under section 282.01, subdivision 1b.

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

54.30 	Sec. 5. Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:
54.31 		Subd. 4.Use tax; prescription drugs. (a) A person that receives prescription drugs 
54.32 	for resale or use in Minnesota, other than from a wholesale drug distributor that is subject 
54.33 	to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug 
55.1 	distributor multiplied by the tax percentage specified in this section. Liability for the tax is 
55.2 	incurred when prescription drugs are received or delivered in Minnesota by the person.
55.3 	(b) A person that receives prescription drugs for use in Minnesota from a nonresident 
55.4 	pharmacy required to be registered under section 151.19 is subject to a tax equal to 
55.5 	the price paid by the nonresident pharmacy to the wholesale drug distributor or the 
55.6 	price received by the nonresident pharmacy, whichever is lower, multiplied by the tax 
55.7 	percentage specified in this section. Liability for the tax is incurred when prescription 
55.8 	drugs are received in Minnesota by the person.
55.9 	(c) A tax imposed under this subdivision does not apply to purchases by an 
55.10 	individual for personal consumption.

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

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

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

55.20 	Sec. 7. Minnesota Statutes 2006, section 295.54, subdivision 2, is amended to read:
55.21 		Subd. 2.Pharmacy refund. A pharmacy may claim an annual refund against the 
55.22 	total amount of tax, if any, the pharmacy owes during that calendar year under section 
55.23 	295.52, subdivision 2. The refund shall equal the amount paid by the pharmacy to a 
55.24 	wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend 
55.25 	drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage 
55.26 	specified in section 295.52. If the amount of the refund exceeds the tax liability of the 
55.27 	pharmacy under section 295.52, subdivision 1b 2, the commissioner shall provide the 
55.28 	pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply 
55.29 	for the refund on the annual return as provided under section 295.55, subdivision 5. The 
55.30 	refund must be claimed within one year of the due date of the return. Interest on refunds 
55.31 	paid under this subdivision will begin to accrue 60 days after the date a claim for refund is 
55.32 	filed. For purposes of this subdivision, the date a claim is filed is the due date of the return 
55.33 	or the date of the actual claim for refund, whichever is later. 

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

56.2 	Sec. 8. Minnesota Statutes 2006, section 297F.06, subdivision 4, is amended to read:
56.3 		Subd. 4.Tobacco products use tax. The tobacco products use tax does not apply to 
56.4 	the possession, use, or storage of tobacco products thatif (1) the tobacco products have an 
56.5 	aggregate cost in any calendar month to the consumer of $100 $50 or less, and (2) the 
56.6 	tobacco products were carried into this state by that consumer.

56.7 	EFFECTIVE DATE. This section is effective for the possession, use, or storage of 
56.8 	tobacco products on or after July 1, 2007.

56.9 	Sec. 9. Minnesota Statutes 2006, section 297F.25, is amended by adding a subdivision 
56.10 	to read:
56.11 		Subd. 3a.Consumer use tax; use tax return; cigarette consumer. (a) On or before 
56.12 	the 18th day of each calendar month, a consumer who, during the preceding calendar 
56.13 	month, has acquired title to or possession of cigarettes for use or storage in this state, upon 
56.14 	which the sales tax imposed by this section has not been paid, shall file a return with the 
56.15 	commissioner showing the quantity of cigarettes so acquired or possessed. The return 
56.16 	must be made in the form and manner prescribed by the commissioner, and must contain 
56.17 	any other information required by the commissioner. The return must be accompanied by 
56.18 	a remittance for the full unpaid sales tax liability shown by it.
56.19 	(b) The tax imposed under paragraph (a) does not apply if (1) the consumer has 
56.20 	acquired title to or possession of cigarettes for use or storage in this state in quantities 
56.21 	of 200 or fewer in the month, and (2) the cigarettes were carried into this state by that 
56.22 	consumer.

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

56.25 	Sec. 10. Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read:
56.26 		Subdivision 1.Insurance policies surcharge. (a) Except as otherwise provided in 
56.27 	subdivision 2, each licensed insurer engaged in writing policies of homeowner's insurance 
56.28 	authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or 
56.29 	commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the 
56.30 	gross premiums and assessments, less return premiums, on direct business received by 
56.31 	the company, or by its agents for it, for homeowner's insurance policies, commercial fire 
56.32 	policies, and commercial nonliability insurance policies in this state.
57.1 	(b) The surcharge amount collected under paragraph (a) or subdivision 2, paragraph 
57.2 	(b), may not be considered premium for any other purpose. The surcharge amount 
57.3 	under paragraph (a) must be separately stated on either a billing or policy declaration or 
57.4 	document containing similar information sent to an insured.
57.5 	(c) Amounts collected by the commissioner under this section must be deposited in 
57.6 	the fire safety account established pursuant to subdivision 3.

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

57.9 	Sec. 11. Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read:
57.10 		Subd. 2.Exemptions. (a) This section does not apply to a farmers' mutual fire 
57.11 	insurance company or township mutual fire insurance company in Minnesota organized 
57.12 	under chapter 67A.
57.13 	(b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to 
57.14 	transact business in Minnesota shall elect to remit to the Department of Revenue for 
57.15 	deposit in the fire safety account either (1) the surcharge amount collected imposed under 
57.16 	this section subdivision 1 on all premiums subject to that surcharge, or (2) a surcharge of 
57.17 	one-half of one percent on the gross fire premiums and assessments, less return premiums, 
57.18 	on all direct business received by the insurer or agents of the insurer in Minnesota, in 
57.19 	cash or otherwise, during the year. 
57.20 	(c) The election must be made prior to July 1, 2007, for policies written or renewed 
57.21 	between July 1, 2007, and December 31, 2007, and by December 31 of each year for 
57.22 	insurance for policies written or renewed in the succeeding calendar year. An insurer 
57.23 	who elects to remit the one-half of one percent surcharge on gross fire premiums and 
57.24 	assessments must not charge the insured the surcharge imposed under subdivision 1.
57.25 	(d) For purposes of this subdivision, "gross fire premiums and assessments" includes 
57.26 	premiums on policies covering fire risks only on automobiles, whether written or under 
57.27 	floater form or otherwise.

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

57.32 	Sec. 12. Minnesota Statutes 2006, section 297I.20, subdivision 2, is amended to read:
58.1 		Subd. 2.Joint Underwriting Association offset. An insurance company may offset 
58.2 	against its premium tax liability to this state any amount paid for an assessment made 
58.3 	pursuant to section 62I.06, subdivision 6, shall be deductible by the member from past 
58.4 	or future premium taxes due the state. The offset against premium tax liability must be 
58.5 	claimed beginning with the taxable year that the assessment is paid. To the extent that the 
58.6 	allowable offset exceeds the tax liability, the remaining offset must be carried forward to 
58.7 	succeeding taxable years until the entire offset has been credited against the insurance 
58.8 	company's liability for premium tax under this chapter.

58.9 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
58.10 	1, 2008.

58.11 	Sec. 13. Minnesota Statutes 2006, section 297I.40, subdivision 5, is amended to read:
58.12 		Subd. 5.Definition of tax. The term "tax" as used in this section means the tax 
58.13 	imposed by section 297I.05, subdivisions 1 to 6, 11, and 12, paragraphs (a), clauses (1) 
58.14 	to (5), (b), and (e) (d), without regard to the retaliatory provisions of section 297I.05, 
58.15 	subdivision 11, and the less any offset in section 297I.20. 

58.16 	EFFECTIVE DATE. This section is effective for tax returns due on or after January 
58.17 	1, 2008.

58.18 	ARTICLE 4
58.19 	PROPERTY TAXES AND AIDS

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

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

58.26 	Sec. 2. Minnesota Statutes 2006, section 270.072, subdivision 2, is amended to read:
58.27 		Subd. 2.Assessment of flight property. The Flight property of allthat is owned 
58.28 	by, or is leased, loaned, or otherwise made available to an airline companiescompany 
58.29 	operating in Minnesota shall be assessed and appraised annually by the commissioner 
58.30 	with reference to its value on January 2 of the assessment year in the manner prescribed 
58.31 	by sections 270.071 to 270.079. Aircraft with a gross weight of less than 30,000 pounds 
59.1 	and used on intermittent or irregularly timed flights shall be excluded from the provisions 
59.2 	of sections 270.071 to 270.079. 

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

59.4 	Sec. 3. Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read:
59.5 		Subd. 3.Report by airline company. Each year, on or before July 1, every airline 
59.6 	company engaged in air commerce in this state shall file with the commissioner on or 
59.7 	before the time fixed by the commissioner a report under oath setting forth specifically 
59.8 	the information prescribed by the commissioner to enable the commissioner to make the 
59.9 	assessment required in sections 270.071 to 270.079, unless the commissioner determines 
59.10 	that the airline company or person should be excluded from filing because its activities do 
59.11 	not constitute air commerce as defined herein. A penalty of five percent of the tax being 
59.12 	assessed is imposed on a late filing of the annual report. If the report is not filed within 
59.13 	30 days, an additional penalty of five percent of the assessed tax is imposed for each 
59.14 	additional 30 days or fraction of 30 days until the return is filed. The penalty imposed 
59.15 	under this section must not exceed the lesser of $25,000 or 25 percent of the assessed tax.

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

59.18 	Sec. 4. Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read:
59.19 		Subd. 6.Airflight property tax lien. The tax imposed under sections 270.071 to 
59.20 	270.079 is a lien on all real and personal property within this state of the airline company 
59.21 	in whose name the property is assessed. For purposes of sections 270C.62 and 270C.63, 
59.22 	the date of assessment for the tax imposed under sections 270.071 to 270.079 isThe lien 
59.23 	attaches on January 2 of each year for the taxes payable in the following year.

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

59.26 	Sec. 5. [270.0725] PENALTIES.
59.27 		Subdivision 1.Penalty for late filing. If an airline company does not file its annual 
59.28 	report by the date designated in section 270.072, subdivision 3, a penalty of five percent 
59.29 	of the tax being assessed is imposed on that company. On August 1, and on the first day 
59.30 	of each succeeding calendar month, an additional five percent penalty is imposed if the 
59.31 	report has not yet been filed. For each airline company, the penalties imposed under 
60.1 	this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of 
60.2 	the assessed tax. 
60.3 		Subd. 2.Penalty for repeated instances of late filing. If there is a pattern of 
60.4 	repeated failures by an airline company to timely file the report required by this section, a 
60.5 	penalty of ten percent of the tax being assessed is imposed on that company.
60.6 		Subd. 3.Penalty for frivolous report. If an airline company files a frivolous annual 
60.7 	report, a penalty of 25 percent of the tax being assessed is imposed on that company. A 
60.8 	frivolous report under this section is a report that would fulfill the criteria for a frivolous 
60.9 	return under section 289A.60, subdivision 7, notwithstanding the restriction in section 
60.10 	289A.01. In a proceeding involving the issue of whether or not an airline company is 
60.11 	liable for this penalty, the burden of proof is on the commissioner.
60.12 		Subd. 4.Penalty for fraudulent report. If an airline company files a false or 
60.13 	fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50 
60.14 	percent of the tax being assessed is imposed on that company.
60.15 		Subd. 5.Penalties added to tax. Penalties imposed under this section are added to 
60.16 	the tax and collected as a part of it.

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

60.19 	Sec. 6. [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS.
60.20 	In addition to the powers granted to the commissioner in this chapter, and in order to 
60.21 	determine net tax capacities and issue notices of net tax capacity and tax under sections 
60.22 	270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and 
60.23 	270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes 
60.24 	an airline company.

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

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

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

61.10 	Sec. 8. Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read:
61.11 		Subdivision 1.Appeal. Any airline company against which a tax has been imposed 
61.12 	under sections 270.071 to 270.079 shall have the right to appeal within 60 days from the 
61.13 	date of notice of the levy of the taxThe notices of net tax capacity and of tax required 
61.14 	under section 270.075, subdivision 2, are orders of the commissioner. These orders must 
61.15 	be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject 
61.16 	to administrative review under section 270C.35. These orders may be appealed to the Tax 
61.17 	Court in the manner provided by law in section 271.06 for appealing official orders of 
61.18 	the commissioner that do not deal with valuation, assessment, or taxation for property 
61.19 	tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter 
61.20 	278 do not apply. 

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

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

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

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

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

62.4 	Sec. 11. Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read:
62.5 		Subd. 2.Members. The board shall consist of nine members, who shall be 
62.6 	appointed by the commissioner of revenue, in the manner provided herein. The members 
62.7 	shall include:
62.8 	(1) two from the Department of Revenue;
62.9 	(2) two county assessors;
62.10 	(3) two assessors who are not county assessors, one of whom shall be a township 
62.11 	assessor;
62.12 	(4) one from the private appraisal field holding a professional appraisal designation; 
62.13 	and
62.14 	(5) two public members as defined by section 214.02. 
62.15 	The appointment provided in clauses (2) and (3) may be made from two listsa list 
62.16 	of not less than three names each, one submitted to the commissioner of revenue by the 
62.17 	Minnesota Association of Assessing Officers or its successor organization containing 
62.18 	recommendations for the appointment of appointees described in clause clauses (2), 
62.19 	and one by the Minnesota Association of Assessors, Inc. or its successor organization 
62.20 	containing recommendations for the appointees described in clause (3) and (3). The lists
62.21 	list must be submitted 30 days before the commencement of the term. In the case of a 
62.22 	vacancy, a new list shall be furnished to the commissioner by the respective organization
62.23 	immediately. A member of the board who is no longer engaged in the capacity listed 
62.24 	abovethat was the basis of appointment is disqualified from membership in the board.
62.25 	The board shall annually elect a chair and a secretaryvice-chair of the board.

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

62.27 	Sec. 12. Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read:
62.28 		Subd. 3.Licenses; refusal or revocation. The board may refuse to grant or renew, 
62.29 	or may suspend or revoke, a license of an applicant or licensee for any of the following 
62.30 	causes or acts:
62.31 	(1) failure to complete required training;
62.32 	(2) inefficiency or neglect of duty;
63.1 	(3) "unprofessional conduct" which means knowingly neglecting to perform a duty 
63.2 	required by law, or violation of the laws of this state relating to the assessment of property 
63.3 	or unlawfully exempting property or knowingly and intentionally listing property on the 
63.4 	tax list at substantially less than its market value or the level required by law in order to 
63.5 	gain favor or benefit, or knowingly and intentionally misclassifying property in order to 
63.6 	gain favor or benefit failure to comply with the Code of Conduct and Ethics for Licensed 
63.7 	Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session 
63.8 	chapter 3, article 1, section 38;
63.9 	(4) conviction of a crime involving moral turpitude; or
63.10 	(5) any other cause or act that in the board's opinion warrants a refusal to issue 
63.11 	or suspension or revocation of a license.

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

63.13 	Sec. 13. Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read:
63.14 		Subd. 5.Prohibited activity. An assessor, deputy assessor, assistant assessor, 
63.15 	appraiser,A licensed assessor or other person employed by an assessment jurisdiction 
63.16 	or contracting with an assessment jurisdiction for the purpose of valuing or classifying 
63.17 	property for property tax purposes is prohibited from making appraisals or analyses, 
63.18 	accepting an appraisal assignment, or preparing an appraisal report as defined in section 
63.19 	82B.02, subdivisions 2 to 5, on any property within the assessment jurisdiction where the 
63.20 	individual is employed or performing the duties of the assessor under contract. Violation 
63.21 	of this prohibition shall result in immediate revocation of the individual's license to assess 
63.22 	property for property tax purposes. This prohibition must not be construed to prohibit an 
63.23 	individual from carrying out any duties required for the proper assessment of property 
63.24 	for property tax purposes. If a formal resolution has been adopted by the governing body 
63.25 	of a governmental unit, which specifies the purposes for which such work will be done, 
63.26 	this prohibition does not apply to appraisal activities undertaken on behalf of and at the 
63.27 	request of the governmental unit that has employed or contracted with the individual. 
63.28 	The resolution may only allow appraisal activities which are related to condemnations, 
63.29 	right-of-way acquisitions, or special assessments. 

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

63.31 	Sec. 14. Minnesota Statutes 2006, section 270.44, is amended to read:
63.32 	270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.
63.33 	The board shall charge the following fees:
64.1 	(1) $105 for a senior accredited Minnesota assessor license;
64.2 	(2) $80 for an accredited Minnesota assessor license;
64.3 	(3) $65 for a certified Minnesota assessor specialist license;
64.4 	(4) $55 for a certified Minnesota assessor license;
64.5 	(5) $50 for a course challenge examination;
64.6 	(6) $35 for grading a form appraisal;
64.7 	(7)(6) $60 for grading a narrative appraisal;
64.8 	(8)(7) $30 for a reinstatement fee;
64.9 	(9)(8) $25 for a record retention fee; and
64.10 	(10)(9) $20 for an educational transcript; and
64.11 	(11) $30 for all retests of board-sponsored educational courses.

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

64.13 	Sec. 15. Minnesota Statutes 2006, section 270.45, is amended to read:
64.14 	270.45 DISPOSITION OF FEES.
64.15 	All fees so established and collected shall be paid to the commissioner of finance for 
64.16 	deposit in the general fund. The expenses of carrying out the provisions of sections 270.41
64.17 	to 270.53 shall be paid from appropriations made to the board of Assessors. 

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

64.19 	Sec. 16. Minnesota Statutes 2006, section 270.46, is amended to read:
64.20 	270.46 TRAINING COURSES, ESTABLISHMENT; OTHER COURSES,
64.21 	REGULATION.
64.22 	The board shall establishreview and approve training courses on assessment 
64.23 	practices and shall review and approve courses on assessment practices, techniques of 
64.24 	assessment, and ethics offered by schools, colleges and,  universities as well as courses that 
64.25 	are offered by any units of government on techniques of assessment. Courses shall be 
64.26 	established in various places throughout the state and be offered on regular intervals, units 
64.27 	of government, and other entities.

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

64.29 	Sec. 17. Minnesota Statutes 2006, section 270.47, is amended to read:
64.30 	270.47 RULES.
65.1 	The board shall establish theadopt rules necessary to accomplish the purpose of 
65.2 	sectionsections 270.41 to 270.51, and shall establish criteria required of assessing officials 
65.3 	in the state. Separate criteria may be established depending upon the responsibilities of the 
65.4 	assessor. The board shall prepare and give examinations from time to time to determine 
65.5 	whether assessing officials possess the necessary qualifications for performing the 
65.6 	functions of the office. Such tests shall be given immediately upon completion of courses 
65.7 	required by the board, or to persons who already possess the requisite qualifications under 
65.8 	the rules of the board. An action of the board in refusing to grant or renew a license or in 
65.9 	suspending or revoking a license is subject to review in accordance with chapter 14.

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

65.11 	Sec. 18. Minnesota Statutes 2006, section 270.48, is amended to read:
65.12 	270.48 LICENSURE OF QUALIFIED PERSONS.
65.13 	The board shall may license persons as possessing the necessary qualifications of an 
65.14 	assessing official. Different levels of licensure may be established as to classes of property 
65.15 	which assessors may be certified to assess at the discretion of the board. Every person, 
65.16 	except a local or county assessor, regularly employed by the assessor to assist in making 
65.17 	decisions regarding valuing and classifying property for assessment purposes shall be 
65.18 	required tomust become licensed within three years of the date of employment. Licensure 
65.19 	shall be required for local and county assessors as otherwise provided in sections 270.41
65.20 	to 270.53 section 273.061 and rules adopted by the board. 

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

65.22 	Sec. 19. Minnesota Statutes 2006, section 270.50, is amended to read:
65.23 	270.50 EMPLOYMENT OF LICENSED ASSESSORS.
65.24 	No assessor shall be employed who has not been licensed as qualified by the board, 
65.25 	provided the time to comply may be extended after application to the board upon a 
65.26 	showing that licensed assessors are not available for employment. The board may license 
65.27 	that a county or local assessor who has not received the training, but possesses the 
65.28 	necessary qualifications for performing the functions of the office by the passage of an 
65.29 	approved examination or may waive the examination if such person has demonstrated 
65.30 	competence in performing the functions of the office for a period of time the board deems 
65.31 	reasonable. The county or local assessing district shall assume the cost of training of its 
65.32 	assessors in courses approved by the board for the purpose of obtaining the assessor's 
65.33 	license to the extent of course fees, mileage, meals and lodging, and recognized travel 
66.1 	expenses not paid by the state. If the governing body of any township or city fails to 
66.2 	employ an assessor as required by sections 270.41 to 270.53, the assessment shall be 
66.3 	made by the county assessor. 
66.4 	In the case of cities incorporated or townships organized after April 11, 1974, except 
66.5 	cities or towns located in Ramsey county or which have elected a county assessor system 
66.6 	in accordance with section 273.055, the board shall allow the city or town 90 days from 
66.7 	the date of incorporation or organization to employ a licensed assessor.

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

66.9 	Sec. 20. Minnesota Statutes 2006, section 270C.306, is amended to read:
66.10 	270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR 
66.11 	IDENTIFYING NUMBERS ON FORMS.
66.12 	Notwithstanding the provisions of any other law except section 272.115, the 
66.13 	commissioner may require that a form required to be filed with the commissioner include 
66.14 	the Social Security number, federal employer identification number, or Minnesota 
66.15 	taxpayer identification number of the taxpayer or applicant.

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

66.17 	Sec. 21. Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read:
66.18 		Subdivision 1.Authority. (a) The commissioner may abate, reduce, or refund any 
66.19 	penalty or interest that is imposed by a law administered by the commissioner as a result 
66.20 	of the late payment of tax or late filing of a return, if the failure to timely pay the tax or 
66.21 	failure to timely file the return is due to reasonable cause, or if the taxpayer is located 
66.22 	in a presidentially declared disaster area.
66.23 	(b) The commissioner shall abate any part of a penalty or additional tax charge 
66.24 	under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 
66.25 	advice given to the taxpayer in writing by an employee of the department acting in 
66.26 	an official capacity, if the advice:
66.27 	(1) was reasonably relied on and was in response to a specific written request of the 
66.28 	taxpayer; and
66.29 	(2) was not the result of failure by the taxpayer to provide adequate or accurate 
66.30 	information.
66.31 	(c) The commissioner may abate a penalty imposed under section 270.0725, 
66.32 	subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline 
66.33 	company is located in a presidentially declared disaster area.

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

67.2 	Sec. 22. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:
67.3 		Subd. 64.Job opportunity building zone property. (a) Improvements to real 
67.4 	property, and personal property, classified under section 273.13, subdivision 24, and 
67.5 	located within a job opportunity building zone, designated under section 469.314, are 
67.6 	exempt from ad valorem taxes levied under chapter 275.
67.7 	(b) Improvements to real property, and tangible personal property, of an agricultural 
67.8 	production facility located within an agricultural processing facility zone, designated 
67.9 	under section 469.314, is exempt from ad valorem taxes levied under chapter 275.
67.10 	(c) For property to qualify for exemption under paragraph (a), the occupant must be 
67.11 	a qualified business, as defined in section 469.310.
67.12 	(d) The exemption applies beginning for the first assessment year after designation 
67.13 	of the job opportunity building zone by the commissioner of employment and economic 
67.14 	development. The exemption applies to each assessment year that begins during the 
67.15 	duration of the job opportunity building zone. To be exempt, the property must be 
67.16 	occupied by July 1 of the assessment year by a qualified business that has signed the 
67.17 	business subsidy agreement and relocation agreement, if required, by July 1 of the 
67.18 	assessment year. This exemption does not apply to:
67.19 	(1) the levy under section 475.61 or similar levy provisions under any other law to 
67.20 	pay general obligation bonds; or
67.21 	(2) a levy under section 126C.17, if the levy was approved by the voters before the 
67.22 	designation of the job opportunity building zone.
67.23 	(e) Except for property of a business that was exempt under this subdivision for 
67.24 	taxes payable in 2007, a business must notify the county assessor in writing of eligibility 
67.25 	under this subdivision by July 1 in order to begin receiving the exemption under this 
67.26 	subdivision for taxes payable in the following year. The business need not annually notify 
67.27 	the county assessor of its continued exemption under this subdivision, but must notify the 
67.28 	county assessor immediately if the exemption no longer applies.

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

67.30 	Sec. 23. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
67.31 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 
67.32 	whenever any real estate is sold for a consideration in excess of $1,000, whether by 
67.33 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
67.34 	grantee or the legal agent of either shall file a certificate of value with the county auditor 
68.1 	in the county in which the property is located when the deed or other document is 
68.2 	presented for recording. Contract for deeds are subject to recording under section 507.235, 
68.3 	subdivision 1. Value shall, in the case of any deed not a gift, be the amount of the full 
68.4 	actual consideration thereof, paid or to be paid, including the amount of any lien or liens 
68.5 	assumed. The items and value of personal property transferred with the real property 
68.6 	must be listed and deducted from the sale price. The certificate of value shall include 
68.7 	the classification to which the property belongs for the purpose of determining the fair 
68.8 	market value of the property. The certificate shall include financing terms and conditions 
68.9 	of the sale which are necessary to determine the actual, present value of the sale price 
68.10 	for purposes of the sales ratio study. The commissioner of revenue shall promulgate 
68.11 	administrative rules specifying the financing terms and conditions which must be included 
68.12 	on the certificate. Pursuant to the authority of the commissioner of revenue in section 
68.13 	270C.306, The certificate of value must include the Social Security number or the federal 
68.14 	employer identification number of the grantors and grantees. However, a married person 
68.15 	who is not an owner of record and who is signing a conveyance instrument along with 
68.16 	the person's spouse solely to release and convey their marital interest, if any, in the real 
68.17 	property being conveyed is not a grantor for the purpose of the preceding sentence. A 
68.18 	statement in the deed that is substantially in the following form is sufficient to allow the 
68.19 	county auditor to accept a certificate for filing without the Social Security number of the 
68.20 	named spouse: "(Name) claims no ownership interest in the real property being conveyed 
68.21 	and is executing this instrument solely to release and convey a marital interest, if any, in 
68.22 	that real property." The identification numbers of the grantors and grantees are private 
68.23 	data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12, 
68.24 	but, notwithstanding that section, the private or nonpublic data may be disclosed to the 
68.25 	commissioner of revenue for purposes of tax administration. The information required to 
68.26 	be shown on the certificate of value is limited to the information required as of the date of 
68.27 	the acknowledgment on the deed or other document to be recorded.

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

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

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

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

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

69.11 	Sec. 26. Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read:
69.12 		Subd. 3.Requirements. (a) Real estate consisting of ten acres or more or a nursery 
69.13 	or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13, 
69.14 	shall be entitled to valuation and tax deferment under this section only if it is primarily 
69.15 	devoted to agricultural use, and meets the qualifications in subdivision 6, and either: 
69.16 	(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the 
69.17 	owner or is real estate which is farmed with the real estate which contains the homestead 
69.18 	property; or
69.19 	(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling, 
69.20 	or any combination thereof, for a period of at least seven years prior to application for 
69.21 	benefits under the provisions of this section, or is real estate which is farmed with the 
69.22 	real estate which qualifies under this clause and is within four townships or cities or 
69.23 	combination thereof from the qualifying real estate; or
69.24 	(3) is the homestead of a shareholder in a family farm corporation as defined in 
69.25 	section 500.24, notwithstanding the fact that legal title to the real estate may be held in the 
69.26 	name of the family farm corporation; or 
69.27 	(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor, 
69.28 	partnership, or corporation which also owns the nursery or greenhouse operations on 
69.29 	the parcel or parcels.
69.30 	(b) Valuation of real estate under this section is limited to parcels the ownership of 
69.31 	which is in noncorporate entities except for:
69.32 	(1) family farm corporations organized pursuant to section 500.24; and 
70.1 	(2) corporations that derive 80 percent or more of their gross receipts from the 
70.2 	wholesale or retail sale of horticultural or nursery stock.
70.3 	Corporate entities who previously qualified for tax deferment pursuant to this section 
70.4 	and who continue to otherwise qualify under subdivisions 3 and 6 for a period of at least 
70.5 	three years following the effective date of Laws 1983, chapter 222, section 8, will not be 
70.6 	required to make payment of the previously deferred taxes, notwithstanding the provisions 
70.7 	of subdivision 9. Special assessments are payable at the end of the three-year period 
70.8 	or at time of sale, whichever comes first.
70.9 	(c) Land that previously qualified for tax deferment under this section and no longer 
70.10 	qualifies because it is not primarily used for agricultural purposes but would otherwise 
70.11 	qualify under subdivisions 3 and 6 for a period of at least three years will not be required 
70.12 	to make payment of the previously deferred taxes, notwithstanding the provisions of 
70.13 	subdivision 9. Sale of the land prior to the expiration of the three-year period requires 
70.14 	payment of deferred taxes as follows: sale in the year the land no longer qualifies requires 
70.15 	payment of the current year's deferred taxes plus payment of deferred taxes for the two 
70.16 	prior years; sale during the second year the land no longer qualifies requires payment of 
70.17 	the current year's deferred taxes plus payment of the deferred taxes for the prior year; and 
70.18 	sale during the third year the land no longer qualifies requires payment of the current 
70.19 	year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to 
70.20 	subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or 
70.21 	at the end of the three-year period, whichever comes first, all deferred special assessments 
70.22 	plus interest are payable in equal installments spread over the time remaining until the last 
70.23 	maturity date of the bonds issued to finance the improvement for which the assessments 
70.24 	were levied. If the bonds have matured, the deferred special assessments plus interest 
70.25 	are payable within 90 days. The provisions of section 429.061, subdivision 2, apply 
70.26 	to the collection of these installments. Penalties are not imposed on any such special 
70.27 	assessments if timely paid. 

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

70.29 	Sec. 27. Minnesota Statutes 2006, section 273.117, is amended to read:
70.30 	273.117 CONSERVATION PROPERTY TAX VALUATION.
70.31 	The value of real property which is subject to a conservation restriction or easement 
70.32 	shall be entitled to reduced valuation under this section may be adjusted by the assessor if:
70.33 	(a) The restriction or easement is for a conservation purpose as defined in section 
70.34 	84.64, subdivision 2, and is recorded on the property; 
71.1 	(b) The property is being used in accordance with the terms of the conservation 
71.2 	restriction or easement.

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

71.5 	Sec. 28. Minnesota Statutes 2006, section 273.121, is amended to read:
71.6 	273.121 VALUATION OF REAL PROPERTY, NOTICE.
71.7 	Any county assessor or city assessor having the powers of a county assessor, valuing 
71.8 	or classifying taxable real property shall in each year notify those persons whose property 
71.9 	is to be included on the assessment roll that year if the person's address is known to the 
71.10 	assessor, otherwise the occupant of the property. The notice shall be in writing and shall be 
71.11 	sent by ordinary mail at least ten days before the meeting of the local board of appeal and 
71.12 	equalization under section 274.01 or the review process established under section 274.13, 
71.13 	subdivision 1c. Upon written request by the owner of the property, the assessor may send 
71.14 	the notice in electronic form or by electronic mail instead of on paper or by ordinary mail. 
71.15 	It shall contain: (1) the market value for the current and prior assessment, (2) the limited 
71.16 	market value under section 273.11, subdivision 1a, for the current and prior assessment, 
71.17 	(3) the qualifying amount of any improvements under section 273.11, subdivision 16, 
71.18 	for the current assessment, (4) the market value subject to taxation after subtracting the 
71.19 	amount of any qualifying improvements for the current assessment, (5) the classification 
71.20 	of the property for the current and prior assessment, (6) a note that if the property is 
71.21 	homestead and at least 45 years old, improvements made to the property may be eligible 
71.22 	for a valuation exclusion under section 273.11, subdivision 16, (7) the assessor's office 
71.23 	address, and (8) the dates, places, and times set for the meetings of the local board of 
71.24 	appeal and equalization, the review process established under section 274.13, subdivision 
71.25 	1c, and the county board of appeal and equalization. The commissioner of revenue shall 
71.26 	specify the form of the notice. The assessor shall attach to the assessment roll a statement 
71.27 	that the notices required by this section have been mailed. Any assessor who is not 
71.28 	provided sufficient funds from the assessor's governing body to provide such notices, 
71.29 	may make application to the commissioner of revenue to finance such notices. The 
71.30 	commissioner of revenue shall conduct an investigation and, if satisfied that the assessor 
71.31 	does not have the necessary funds, issue a certification to the commissioner of finance 
71.32 	of the amount necessary to provide such notices. The commissioner of finance shall 
71.33 	issue a warrant for such amount and shall deduct such amount from any state payment 
71.34 	to such county or municipality. The necessary funds to make such payments are hereby 
72.1 	appropriated. Failure to receive the notice shall in no way affect the validity of the 
72.2 	assessment, the resulting tax, the procedures of any board of review or equalization, or 
72.3 	the enforcement of delinquent taxes by statutory means. 

72.4 	EFFECTIVE DATE. This section is effective for notices required in 2008 and 
72.5 	thereafter.

72.6 	Sec. 29. Minnesota Statutes 2006, section 273.123, subdivision 2, is amended to read:
72.7 		Subd. 2.Reassessment of homestead property. The county assessor shall reassess 
72.8 	all homestead property located within a disaster or emergency area which is physically 
72.9 	damaged by the disaster or emergency and shall adjust the valuation for taxes payable the 
72.10 	following year to reflect the loss in market value caused by the damage as follows: Subtract 
72.11 	the market value of the property as reassessed from the market value of the property as 
72.12 	assessed under section 273.01 for January 1 of the year in which the disaster or emergency 
72.13 	occurred; multiply the remainder by a fraction, the numerator of which is the number of 
72.14 	full months remaining in the year on the date the disaster or emergency occurred, and the 
72.15 	denominator of which is 12; subtract the product of the calculation from the market value 
72.16 	of the property as assessed for January 1 of the year in which the disaster or emergency 
72.17 	occurred; the remainder is the estimated market value to be used for taxes payable the 
72.18 	following year. The assessor shall report to the county auditor the net tax capacity based 
72.19 	on the assessment of January 1 offor the year in which the disaster or emergency occurred 
72.20 	and the net tax capacity based on the reassessment made pursuant to this subdivision.

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

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

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

72.29 	Sec. 31. Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:
72.30 		Subd. 13.Homestead application. (a) A person who meets the homestead 
72.31 	requirements under subdivision 1 must file a homestead application with the county 
72.32 	assessor to initially obtain homestead classification.
73.1 	(b) On or before January 2, 1993, each county assessor shall mail a homestead 
73.2 	application to the owner of each parcel of property within the county which was 
73.3 	classified as homestead for the 1992 assessment year. The format and contents of a 
73.4 	uniform homestead application shall be prescribed by the commissioner of revenue. The 
73.5 	commissioner shall consult with the chairs of the house and senate tax committees on the 
73.6 	contents of the homestead application form. The application must clearly inform the 
73.7 	taxpayer that this application must be signed by all owners who occupy the property or 
73.8 	by the qualifying relative and returned to the county assessor in order for the property to 
73.9 	continue receivingreceive homestead treatment. The envelope containing the homestead 
73.10 	application shall clearly identify its contents and alert the taxpayer of its necessary 
73.11 	immediate response.
73.12 	(c) Every property owner applying for homestead classification must furnish to the 
73.13 	county assessor the Social Security number of each occupant who is listed as an owner 
73.14 	of the property on the deed of record, the name and address of each owner who does not 
73.15 	occupy the property, and the name and Social Security number of each owner's spouse who 
73.16 	occupies the property. The application must be signed by each owner who occupies the 
73.17 	property and by each owner's spouse who occupies the property, or, in the case of property 
73.18 	that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
73.19 	If a property owner occupies a homestead, the property owner's spouse may not 
73.20 	claim another property as a homestead unless the property owner and the property owner's 
73.21 	spouse file with the assessor an affidavit or other proof required by the assessor stating that 
73.22 	the property qualifies as a homestead under subdivision 1, paragraph (e).
73.23 	Owners or spouses occupying residences owned by their spouses and previously 
73.24 	occupied with the other spouse, either of whom fail to include the other spouse's name 
73.25 	and Social Security number on the homestead application or provide the affidavits or 
73.26 	other proof requested, will be deemed to have elected to receive only partial homestead 
73.27 	treatment of their residence. The remainder of the residence will be classified as 
73.28 	nonhomestead residential. When an owner or spouse's name and Social Security number 
73.29 	appear on homestead applications for two separate residences and only one application is 
73.30 	signed, the owner or spouse will be deemed to have elected to homestead the residence for 
73.31 	which the application was signed.
73.32 	The Social Security numbers or affidavits or other proofs of the property owners 
73.33 	and spouses are private data on individuals as defined by section 13.02, subdivision 12, 
73.34 	but, notwithstanding that section, the private data may be disclosed to the commissioner 
73.35 	of revenue, or, for purposes of proceeding under the Revenue Recapture Act to recover 
73.36 	personal property taxes owing, to the county treasurer.
74.1 	(d) If residential real estate is occupied and used for purposes of a homestead by a 
74.2 	relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 
74.3 	order for the property to receive homestead status, a homestead application must be filed 
74.4 	with the assessor. The Social Security number of each relative and spouse of a relative
74.5 	occupying the property and the Social Security number of each owner who is related to an 
74.6 	occupant of the property shall be required on the homestead application filed under this 
74.7 	subdivision. If a different relative of the owner subsequently occupies the property, the 
74.8 	owner of the property must notify the assessor within 30 days of the change in occupancy. 
74.9 	The Social Security number of a relative or relative's spouse occupying the property 
74.10 	is private data on individuals as defined by section 13.02, subdivision 12, but may be 
74.11 	disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 
74.12 	Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
74.13 	(e) The homestead application shall also notify the property owners that the 
74.14 	application filed under this section will not be mailed annually and that if the property 
74.15 	is granted homestead status for the 1993 assessment, or any assessment year thereafter, 
74.16 	that same property shall remain classified as homestead until the property is sold or 
74.17 	transferred to another person, or the owners, the spouse of the owner, or the relatives no 
74.18 	longer use the property as their homestead. Upon the sale or transfer of the homestead 
74.19 	property, a certificate of value must be timely filed with the county auditor as provided 
74.20 	under section 272.115. Failure to notify the assessor within 30 days that the property has 
74.21 	been sold, transferred, or that the owner, the spouse of the owner, or the relative is no 
74.22 	longer occupying the property as a homestead, shall result in the penalty provided under 
74.23 	this subdivision and the property will lose its current homestead status.
74.24 	(f) If the homestead application is not returned within 30 days, the county will send a 
74.25 	second application to the present owners of record. The notice of proposed property taxes 
74.26 	prepared under section 275.065, subdivision 3, shall reflect the property's classification. 
74.27 	Beginning with assessment year 1993 for all properties, If a homestead application has 
74.28 	not been filed with the county by December 15, the assessor shall classify the property 
74.29 	as nonhomestead for the current assessment year for taxes payable in the following year, 
74.30 	provided that the owner may be entitled to receive the homestead classification by proper 
74.31 	application under section 375.192.
74.32 	(g) At the request of the commissioner, each county must give the commissioner a 
74.33 	list that includes the name and Social Security number of each occupant of homestead 
74.34 	property who is the property owner and the, property owner's spouse occupying the 
74.35 	property, or, qualifying relative of a property owner, applying for homestead classification 
74.36 	under this subdivision or a spouse of a qualifying relative. The commissioner shall use the 
75.1 	information provided on the lists as appropriate under the law, including for the detection 
75.2 	of improper claims by owners, or relatives of owners, under chapter 290A.
75.3 	(h) If the commissioner finds that a property owner may be claiming a fraudulent 
75.4 	homestead, the commissioner shall notify the appropriate counties. Within 90 days of 
75.5 	the notification, the county assessor shall investigate to determine if the homestead 
75.6 	classification was properly claimed. If the property owner does not qualify, the county 
75.7 	assessor shall notify the county auditor who will determine the amount of homestead 
75.8 	benefits that had been improperly allowed. For the purpose of this section, "homestead 
75.9 	benefits" means the tax reduction resulting from the classification as a homestead under 
75.10 	section 273.13, the taconite homestead credit under section 273.135, the residential 
75.11 	homestead and agricultural homestead credits under section 273.1384, and the 
75.12 	supplemental homestead credit under section 273.1391.
75.13 	The county auditor shall send a notice to the person who owned the affected property 
75.14 	at the time the homestead application related to the improper homestead was filed, 
75.15 	demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 
75.16 	of the homestead benefits. The person notified may appeal the county's determination 
75.17 	by serving copies of a petition for review with county officials as provided in section 
75.18 	278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 
75.19 	Court within 60 days of the date of the notice from the county. Procedurally, the appeal 
75.20 	is governed by the provisions in chapter 271 which apply to the appeal of a property tax 
75.21 	assessment or levy, but without requiring any prepayment of the amount in controversy. If 
75.22 	the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 
75.23 	has been filed, the county auditor shall certify the amount of taxes and penalty to the county 
75.24 	treasurer. The county treasurer will add interest to the unpaid homestead benefits and 
75.25 	penalty amounts at the rate provided in section 279.03 for real property taxes becoming 
75.26 	delinquent in the calendar year during which the amount remains unpaid. Interest may be 
75.27 	assessed for the period beginning 60 days after demand for payment was made.
75.28 	If the person notified is the current owner of the property, the treasurer may add the 
75.29 	total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 
75.30 	otherwise payable on the property by including the amounts on the property tax statements 
75.31 	under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 
75.32 	valorem taxes shall include interest accrued through December 31 of the year preceding 
75.33 	the taxes payable year for which the amounts are first added. These amounts, when added 
75.34 	to the property tax statement, become subject to all the laws for the enforcement of real or 
75.35 	personal property taxes for that year, and for any subsequent year.
76.1 	If the person notified is not the current owner of the property, the treasurer may 
76.2 	collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 
76.3 	the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 
76.4 	of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 
76.5 	tax obligations of the person who owned the property at the time the application related 
76.6 	to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 
76.7 	of personal liability for the homestead benefits, penalty, interest, and costs, and instead 
76.8 	extend those amounts on the tax lists against the property as provided in this paragraph 
76.9 	to the extent that the current owner agrees in writing. On all demands, billings, property 
76.10 	tax statements, and related correspondence, the county must list and state separately the 
76.11 	amounts of homestead benefits, penalty, interest and costs being demanded, billed or 
76.12 	assessed.
76.13 	(i) Any amount of homestead benefits recovered by the county from the property 
76.14 	owner shall be distributed to the county, city or town, and school district where the 
76.15 	property is located in the same proportion that each taxing district's levy was to the total 
76.16 	of the three taxing districts' levy for the current year. Any amount recovered attributable 
76.17 	to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 
76.18 	deposited in the taconite property tax relief account. Any amount recovered that is 
76.19 	attributable to supplemental homestead credit is to be transmitted to the commissioner of 
76.20 	revenue for deposit in the general fund of the state treasury. The total amount of penalty 
76.21 	collected must be deposited in the county general fund.
76.22 	(j) If a property owner has applied for more than one homestead and the county 
76.23 	assessors cannot determine which property should be classified as homestead, the county 
76.24 	assessors will refer the information to the commissioner. The commissioner shall make 
76.25 	the determination and notify the counties within 60 days.
76.26 	(k) In addition to lists of homestead properties, the commissioner may ask the 
76.27 	counties to furnish lists of all properties and the record owners. The Social Security 
76.28 	numbers and federal identification numbers that are maintained by a county or city 
76.29 	assessor for property tax administration purposes, and that may appear on the lists retain 
76.30 	their classification as private or nonpublic data; but may be viewed, accessed, and used by 
76.31 	the county auditor or treasurer of the same county for the limited purpose of assisting the 
76.32 	commissioner in the preparation of microdata samples under section 270C.12.
76.33 	(l) On or before April 30 each year beginning in 2007, each county must provide the 
76.34 	commissioner with the following data for each parcel of homestead property by electronic 
76.35 	means as defined in section 289A.02, subdivision 8:
77.1 	(i) the property identification number assigned to the parcel for purposes of taxes 
77.2 	payable in the current year;
77.3 	(ii) the name and Social Security number of each occupant of homestead property 
77.4 	who is the property owner and, property owner's spouse, as shown on the tax rolls for the 
77.5 	current and the prior assessment year qualifying relative of a property owner, or spouse 
77.6 	of a qualifying relative;
77.7 	(iii) the classification of the property under section 273.13 for taxes payable in the 
77.8 	current year and in the prior year;
77.9 	(iv) an indication of whether the property was classified as a homestead for taxes 
77.10 	payable in the current year or for taxes payable in the prior year because of occupancy by 
77.11 	a relative of the owner or by a spouse of a relative;
77.12 	(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
77.13 	current year and the prior year;
77.14 	(vi) the market value of improvements to the property first assessed for tax purposes 
77.15 	for taxes payable in the current year;
77.16 	(vii) the assessor's estimated market value assigned to the property for taxes payable 
77.17 	in the current year and the prior year;
77.18 	(viii) the taxable market value assigned to the property for taxes payable in the 
77.19 	current year and the prior year;
77.20 	(ix) whether there are delinquent property taxes owing on the homestead;
77.21 	(x) the unique taxing district in which the property is located; and
77.22 	(xi) such other information as the commissioner decides is necessary.
77.23 	The commissioner shall use the information provided on the lists as appropriate 
77.24 	under the law, including for the detection of improper claims by owners, or relatives 
77.25 	of owners, under chapter 290A.

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

77.27 	Sec. 32. Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read:
77.28 		Subd. 4.Disparity reduction credit. (a) Beginning with taxes payable in 1989, 
77.29 	class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1) 
77.30 	the property is located in a border city that has an enterprise zone designated pursuant 
77.31 	to section 469.168, subdivision 4; (2) the property is located in a city with a population 
77.32 	greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the 
77.33 	city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city 
77.34 	in another state; and (4) the adjacent city in the other state has a population of greater than 
77.35 	5,000 and less than 75,000 according to the 1980 decennial census. 
78.1 	(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 
78.2 	property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class 
78.3 	3b property to 2.3 percent of market value.
78.4 	(c) The county auditor shall annually certify the costs of the credits to the 
78.5 	Department of Revenue. The department shall reimburse local governments for the 
78.6 	property taxes foregone as the result of the credits in proportion to their total levies.

78.7 	EFFECTIVE DATE. This section is effective retroactively for taxes payable in 
78.8 	2001 and thereafter.

78.9 	Sec. 33. Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read:
78.10 		Subd. 2.Listing and assessment by commissioner. The personal property, 
78.11 	consisting of the pipeline system of mains, pipes, and equipment attached thereto, of 
78.12 	pipeline companies and others engaged in the operations or business of transporting 
78.13 	natural gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed 
78.14 	with and assessed by the commissioner of revenue and the values provided to the city 
78.15 	or county assessor by order. This subdivision shall not apply to the assessment of 
78.16 	the products transported through the pipelines nor to the lines of local commercial gas 
78.17 	companies engaged primarily in the business of distributing gas to consumers at retail nor 
78.18 	to pipelines used by the owner thereof to supply natural gas or other petroleum products 
78.19 	exclusively for such owner's own consumption and not for resale to others. If more than 
78.20 	85 percent of the natural gas or other petroleum products actually transported over the 
78.21 	pipeline is used for the owner's own consumption and not for resale to others, then this 
78.22 	subdivision shall not apply; provided, however, that in that event, the pipeline shall be 
78.23 	assessed in proportion to the percentage of gas actually transported over such pipeline that 
78.24 	is not used for the owner's own consumption. On or before June 30, the commissioner 
78.25 	shall certify to the auditor of each county, the amount of such personal property assessment 
78.26 	against each company in each district in which such property is located.

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

78.28 	Sec. 34. Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read:
78.29 		Subd. 2.Listing and assessment by commissioner. Transmission lines of less 
78.30 	than 69 kv, transmission lines of 69 kv and above located in an unorganized township, 
78.31 	and distribution lines, and equipment attached thereto, having a fixed situs outside the 
78.32 	corporate limits of cities except distribution lines taxed as provided in sections 273.40
78.33 	and 273.41, shall be listed with and assessed by the commissioner of revenue in the 
79.1 	county where situated and the values provided to the city or county assessor by order. 
79.2 	The commissioner shall assess such property at the percentage of market value fixed by 
79.3 	law; and, on or before June 30, shall certify to the auditor of each county in which such 
79.4 	property is located the amount of the assessment made against each company and person 
79.5 	owning such property. 

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

79.7 	Sec. 35. Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read:
79.8 		Subdivision 1.Report required. Every electric light, power, gas, water, express, 
79.9 	stage, and transportation company and pipeline doing business in Minnesota shall 
79.10 	annually file with the commissioner on or before March 31 a report under oath setting 
79.11 	forth the information prescribed by the commissioner to enable the commissioner to make 
79.12 	valuations, recommended valuations, and equalization required under sections 273.33, 
79.13 	273.35, 273.36, and273.37, and 273.3711. If all the required information is not available 
79.14 	on March 31, the company or pipeline shall file the information that is available on or 
79.15 	before March 31, and the balance of the information as soon as it becomes available. 

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

79.17 	Sec. 36. [273.3711] RECOMMENDED AND ORDERED VALUES.
79.18 	For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372, 
79.19 	all values not required to be listed and assessed by the commissioner of revenue are 
79.20 	recommended values.

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

79.22 	Sec. 37. Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read:
79.23 		Subdivision 1.Ordinary board; meetings, deadlines, grievances. (a) The town 
79.24 	board of a town, or the council or other governing body of a city, is the board of appeal 
79.25 	and equalization except (1) in cities whose charters provide for a board of equalization or 
79.26 	(2) in any city or town that has transferred its local board of review power and duties to 
79.27 	the county board as provided in subdivision 3. The county assessor shall fix a day and 
79.28 	time when the board or the board of equalization shall meet in the assessment districts 
79.29 	of the county. Notwithstanding any law or city charter to the contrary, a city board of 
79.30 	equalization shall be referred to as a board of appeal and equalization. On or before 
79.31 	February 15 of each year the assessor shall give written notice of the time to the city or 
79.32 	town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings 
80.1 	must be held between April 1 and May 31 each year. The clerk shall give published and 
80.2 	posted notice of the meeting at least ten days before the date of the meeting.
80.3 	The board shall meet at the office of the clerk to review the assessment and 
80.4 	classification of property in the town or city. No changes in valuation or classification 
80.5 	which are intended to correct errors in judgment by the county assessor may be made by 
80.6 	the county assessor after the board has adjourned in those cities or towns that hold a 
80.7 	local board of review; however, corrections of errors that are merely clerical in nature or 
80.8 	changes that extend homestead treatment to property are permitted after adjournment until 
80.9 	the tax extension date for that assessment year. The changes must be fully documented and 
80.10 	maintained in the assessor's office and must be available for review by any person. A copy 
80.11 	of the changes made during this period in those cities or towns that hold a local board of 
80.12 	review must be sent to the county board no later than December 31 of the assessment year.
80.13 	(b) The board shall determine whether the taxable property in the town or city has 
80.14 	been properly placed on the list and properly valued by the assessor. If real or personal 
80.15 	property has been omitted, the board shall place it on the list with its market value, and 
80.16 	correct the assessment so that each tract or lot of real property, and each article, parcel, 
80.17 	or class of personal property, is entered on the assessment list at its market value. No 
80.18 	assessment of the property of any person may be raised unless the person has been 
80.19 	duly notified of the intent of the board to do so. On application of any person feeling 
80.20 	aggrieved, the board shall review the assessment or classification, or both, and correct 
80.21 	it as appears just. The board may not make an individual market value adjustment or 
80.22 	classification change that would benefit the property if the owner or other person having 
80.23 	control over the property has refused the assessor access to inspect the property and the 
80.24 	interior of any buildings or structures as provided in section 273.20. A board member 
80.25 	shall not participate in any actions of the board which result in market value adjustments 
80.26 	or classification changes to property owned by the board member, the spouse, parent, 
80.27 	stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, 
80.28 	or niece of a board member, or property in which a board member has a financial interest. 
80.29 	The relationship may be by blood or marriage.
80.30 	(c) A local board may reduce assessments upon petition of the taxpayer but the total 
80.31 	reductions must not reduce the aggregate assessment made by the county assessor by more 
80.32 	than one percent. If the total reductions would lower the aggregate assessments made by 
80.33 	the county assessor by more than one percent, none of the adjustments may be made. The 
80.34 	assessor shall correct any clerical errors or double assessments discovered by the board 
80.35 	without regard to the one percent limitation.
81.1 	(d) A local board does not have authority to grant an exemption or to order property 
81.2 	removed from the tax rolls.
81.3 	(e) A majority of the members may act at the meeting, and adjourn from day to day 
81.4 	until they finish hearing the cases presented. The assessor shall attend, with the assessment 
81.5 	books and papers, and take part in the proceedings, but must not vote. The county assessor, 
81.6 	or an assistant delegated by the county assessor shall attend the meetings. The board shall 
81.7 	list separately, on a form appended to the assessment book, all omitted property added 
81.8 	to the list by the board and all items of property increased or decreased, with the market 
81.9 	value of each item of property, added or changed by the board, placed opposite the item. 
81.10 	The county assessor shall enter all changes made by the board in the assessment book.
81.11 	(f) Except as provided in subdivision 3, if a person fails to appear in person, by 
81.12 	counsel, or by written communication before the board after being duly notified of the 
81.13 	board's intent to raise the assessment of the property, or if a person feeling aggrieved by an 
81.14 	assessment or classification fails to apply for a review of the assessment or classification, 
81.15 	the person may not appear before the county board of appeal and equalization for a review 
81.16 	of the assessment or classification. This paragraph does not apply if an assessment was 
81.17 	made after the local board meeting, as provided in section 273.01, or if the person can 
81.18 	establish not having received notice of market value at least five days before the local 
81.19 	board meeting.
81.20 	(g) The local board must complete its work and adjourn within 20 days from the 
81.21 	time of convening stated in the notice of the clerk, unless a longer period is approved by 
81.22 	the commissioner of revenue. No action taken after that date is valid. All complaints 
81.23 	about an assessment or classification made after the meeting of the board must be heard 
81.24 	and determined by the county board of equalization. A nonresident may, at any time, 
81.25 	before the meeting of the board file written objections to an assessment or classification 
81.26 	with the county assessor. The objections must be presented to the board at its meeting by 
81.27 	the county assessor for its consideration.

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

81.29 	Sec. 38. Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read:
81.30 		Subdivision 1.Members; meetings; rules for equalizing assessments. The county 
81.31 	commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be 
81.32 	present, the deputy county auditor, or, if there is no deputy, the court administrator of the 
81.33 	district court, shall form a board for the equalization of the assessment of the property 
81.34 	of the county, including the property of all cities whose charters provide for a board of 
81.35 	equalization. This board shall be referred to as the county board of appeal and equalization. 
82.1 	The board shall meet annually, on the date specified in section 274.14, at the office of the 
82.2 	auditor. Each member shall take an oath to fairly and impartially perform duties as a 
82.3 	member. Members shall not participate in any actions of the board which result in market 
82.4 	value adjustments or classification changes to property owned by the board member, the 
82.5 	spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, 
82.6 	aunt, nephew, or niece of a board member, or property in which a board member has a 
82.7 	financial interest. The relationship may be by blood or marriage. The board shall examine 
82.8 	and compare the returns of the assessment of property of the towns or districts, and 
82.9 	equalize them so that each tract or lot of real property and each article or class of personal 
82.10 	property is entered on the assessment list at its market value, subject to the following rules: 
82.11 	(1) The board shall raise the valuation of each tract or lot of real property which 
82.12 	in its opinion is returned below its market value to the sum believed to be its market 
82.13 	value. The board must first give notice of intention to raise the valuation to the person in 
82.14 	whose name it is assessed, if the person is a resident of the county. The notice must fix 
82.15 	a time and place for a hearing.
82.16 	(2) The board shall reduce the valuation of each tract or lot which in its opinion is 
82.17 	returned above its market value to the sum believed to be its market value.
82.18 	(3) The board shall raise the valuation of each class of personal property which 
82.19 	in its opinion is returned below its market value to the sum believed to be its market 
82.20 	value. It shall raise the aggregate value of the personal property of individuals, firms, or 
82.21 	corporations, when it believes that the aggregate valuation, as returned, is less than the 
82.22 	market value of the taxable personal property possessed by the individuals, firms, or 
82.23 	corporations, to the sum it believes to be the market value. The board must first give notice 
82.24 	to the persons of intention to do so. The notice must set a time and place for a hearing.
82.25 	(4) The board shall reduce the valuation of each class of personal property that 
82.26 	is returned above its market value to the sum it believes to be its market value. Upon 
82.27 	complaint of a party aggrieved, the board shall reduce the aggregate valuation of the 
82.28 	individual's personal property, or of any class of personal property for which the individual 
82.29 	is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes 
82.30 	was the market value of the individual's personal property of that class.
82.31 	(5) The board must not reduce the aggregate value of all the property of its county, as 
82.32 	submitted to the county board of equalization, with the additions made by the auditor under 
82.33 	this chapter, by more than one percent of its whole valuation. The board may raise the 
82.34 	aggregate valuation of real property, and of each class of personal property, of the county, 
82.35 	or of any town or district of the county, when it believes it is below the market value of the 
82.36 	property, or class of property, to the aggregate amount it believes to be its market value.
83.1 	(6) The board shall change the classification of any property which in its opinion 
83.2 	is not properly classified.
83.3 	(7) The board does not have the authority to grant an exemption or to order property 
83.4 	removed from the tax rolls.

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

83.6 	Sec. 39. [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION 
83.7 	COURSE AND MEETING REQUIREMENTS.
83.8 		Subdivision 1.Handbook for county boards. By no later than January 1, 2009, the 
83.9 	commissioner of revenue must develop a handbook detailing procedures, responsibilities, 
83.10 	and requirements for county boards of appeal and equalization. The handbook must 
83.11 	include, but need not be limited to, the role of the county board in the assessment process, 
83.12 	the legal and policy reasons for fair and impartial appeal and equalization hearings, county 
83.13 	board meeting procedures that foster fair and impartial assessment reviews and other best 
83.14 	practices recommendations, quorum requirements for county boards, and explanations 
83.15 	of alternate methods of appeal.
83.16 		Subd. 2.Appeals and equalization course. Beginning in 2009, and each year 
83.17 	thereafter, there must be at least one member at each meeting of a county board of appeal 
83.18 	and equalization who has attended an appeals and equalization course developed or 
83.19 	approved by the commissioner within the last four years, as certified by the commissioner. 
83.20 	The course may be offered in conjunction with a meeting of the Minnesota Association 
83.21 	of Assessment Officers. The course content must include, but need not be limited to, a 
83.22 	review of the handbook developed by the commissioner under subdivision 1.
83.23 		Subd. 3.Proof of compliance; transfer of duties. (a) Any county that 
83.24 	conducts county boards of appeal and equalization meetings must provide proof to the 
83.25 	commissioner by December 1, 2009, and each year thereafter, that it is in compliance 
83.26 	with the requirements of subdivision 2. Beginning in 2009, this notice must also verify 
83.27 	that there was a quorum of voting members at each meeting of the board of appeal and 
83.28 	equalization in the current year. A county that does not comply with these requirements 
83.29 	is deemed to have transferred its board of appeal and equalization powers to the special 
83.30 	board of equalization appointed pursuant to section 274.13, subdivision 2, beginning 
83.31 	with the following year's assessment and continuing unless the powers are reinstated 
83.32 	under paragraph (c). A county that does not comply with the requirements of subdivision 
83.33 	2 and has not appointed a special board of equalization shall appoint a special board of 
83.34 	equalization before the following year's assessment.
84.1 	(b) The county shall notify the taxpayers when the board of appeal and equalization 
84.2 	for a county has been transferred to the special board of equalization under this subdivision 
84.3 	and, prior to the meeting time of the special board of equalization, the county shall make 
84.4 	available to those taxpayers a procedure for a review of the assessments, including, but 
84.5 	not limited to, open book meetings. This alternate review process must take place in 
84.6 	April and May.
84.7 	(c) A county board whose powers are transferred to the special board of equalization 
84.8 	under this subdivision may be reinstated by resolution of the county board and upon proof 
84.9 	of compliance with the requirements of subdivision 2. The resolution and proofs must be 
84.10 	provided to the commissioner by December 1 in order to be effective for the following 
84.11 	year's assessment.

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

84.13 	Sec. 40. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:
84.14 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare 
84.15 	and the county treasurer shall deliver after November 10 and on or before November 24 
84.16 	each year, by first class mail to each taxpayer at the address listed on the county's current 
84.17 	year's assessment roll, a notice of proposed property taxes. Upon written request by 
84.18 	the taxpayer, the treasurer may send the notice in electronic form or by electronic mail 
84.19 	instead of on paper or by ordinary mail.
84.20 	(b) The commissioner of revenue shall prescribe the form of the notice.
84.21 	(c) The notice must inform taxpayers that it contains the amount of property taxes 
84.22 	each taxing authority proposes to collect for taxes payable the following year. In the case 
84.23 	of a town, or in the case of the state general tax, the final tax amount will be its proposed 
84.24 	tax. In the case of taxing authorities required to hold a public meeting under subdivision 6, 
84.25 	the notice must clearly state that each taxing authority, including regional library districts 
84.26 	established under section 134.201, and including the metropolitan taxing districts as 
84.27 	defined in paragraph (i), but excluding all other special taxing districts and towns, will 
84.28 	hold a public meeting to receive public testimony on the proposed budget and proposed or 
84.29 	final property tax levy, or, in case of a school district, on the current budget and proposed 
84.30 	property tax levy. It must clearly state the time and place of each taxing authority's 
84.31 	meeting, a telephone number for the taxing authority that taxpayers may call if they have 
84.32 	questions related to the notice, and an address where comments will be received by mail.
84.33 	(d) The notice must state for each parcel:
84.34 	(1) the market value of the property as determined under section 273.11, and used 
84.35 	for computing property taxes payable in the following year and for taxes payable in the 
85.1 	current year as each appears in the records of the county assessor on November 1 of the 
85.2 	current year; and, in the case of residential property, whether the property is classified as 
85.3 	homestead or nonhomestead. The notice must clearly inform taxpayers of the years to 
85.4 	which the market values apply and that the values are final values;
85.5 	(2) the items listed below, shown separately by county, city or town, and state general 
85.6 	tax, net of the residential and agricultural homestead credit under section 273.1384, voter 
85.7 	approved school levy, other local school levy, and the sum of the special taxing districts, 
85.8 	and as a total of all taxing authorities:
85.9 	(i) the actual tax for taxes payable in the current year; and
85.10 	(ii) the proposed tax amount.
85.11 	If the county levy under clause (2) includes an amount for a lake improvement 
85.12 	district as defined under sections 103B.501 to 103B.581, the amount attributable for that 
85.13 	purpose must be separately stated from the remaining county levy amount.
85.14 	In the case of a town or the state general tax, the final tax shall also be its proposed 
85.15 	tax unless the town changes its levy at a special town meeting under section 365.52. If a 
85.16 	school district has certified under section 126C.17, subdivision 9, that a referendum will 
85.17 	be held in the school district at the November general election, the county auditor must 
85.18 	note next to the school district's proposed amount that a referendum is pending and that, 
85.19 	if approved by the voters, the tax amount may be higher than shown on the notice. In 
85.20 	the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the 
85.21 	levy for Minneapolis Park and Recreation shall be listed separately from the remaining 
85.22 	amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul 
85.23 	Library Agency must be listed separately from the remaining amount of the city's levy. 
85.24 	In the case of Ramsey County, any amount levied under section 134.07 may be listed 
85.25 	separately from the remaining amount of the county's levy. In the case of a parcel where 
85.26 	tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies, 
85.27 	the proposed tax levy on the captured value or the proposed tax levy on the tax capacity 
85.28 	subject to the areawide tax must each be stated separately and not included in the sum of 
85.29 	the special taxing districts; and
85.30 	(3) the increase or decrease between the total taxes payable in the current year and 
85.31 	the total proposed taxes, expressed as a percentage.
85.32 	For purposes of this section, the amount of the tax on homesteads qualifying under 
85.33 	the senior citizens' property tax deferral program under chapter 290B is the total amount 
85.34 	of property tax before subtraction of the deferred property tax amount.
85.35 	(e) The notice must clearly state that the proposed or final taxes do not include 
85.36 	the following:
86.1 	(1) special assessments;
86.2 	(2) levies approved by the voters after the date the proposed taxes are certified, 
86.3 	including bond referenda and school district levy referenda;
86.4 	(3) a levy limit increase approved by the voters by the first Tuesday after the first 
86.5 	Monday in November of the levy year as provided under section 275.73;
86.6 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster 
86.7 	occurring after the date the proposed taxes are certified;
86.8 	(5) amounts necessary to pay tort judgments against the taxing authority that become 
86.9 	final after the date the proposed taxes are certified; and
86.10 	(6) the contamination tax imposed on properties which received market value 
86.11 	reductions for contamination.
86.12 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or 
86.13 	the county treasurer to deliver the notice as required in this section does not invalidate the 
86.14 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
86.15 	(g) If the notice the taxpayer receives under this section lists the property as 
86.16 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
86.17 	applicable deadline, and the property qualifies for the homestead classification in that 
86.18 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
86.19 	in the following year.
86.20 	(h) In the case of class 4 residential property used as a residence for lease or rental 
86.21 	periods of 30 days or more, the taxpayer must either:
86.22 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 
86.23 	renter, or lessee; or
86.24 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
86.25 	The notice must be mailed or posted by the taxpayer by November 27 or within 
86.26 	three days of receipt of the notice, whichever is later. A taxpayer may notify the county 
86.27 	treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to 
86.28 	which the notice must be mailed in order to fulfill the requirements of this paragraph.
86.29 	(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special 
86.30 	taxing districts" means the following taxing districts in the seven-county metropolitan area 
86.31 	that levy a property tax for any of the specified purposes listed below:
86.32 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 
86.33 	473.446, 473.521, 473.547, or 473.834;
86.34 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 
86.35 	and
86.36 	(3) Metropolitan Mosquito Control Commission under section 473.711.
87.1 	For purposes of this section, any levies made by the regional rail authorities in the 
87.2 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
87.3 	398A shall be included with the appropriate county's levy and shall be discussed at that 
87.4 	county's public hearing.
87.5 	(j) The governing body of a county, city, or school district may, with the consent 
87.6 	of the county board, include supplemental information with the statement of proposed 
87.7 	property taxes about the impact of state aid increases or decreases on property tax 
87.8 	increases or decreases and on the level of services provided in the affected jurisdiction. 
87.9 	This supplemental information may include information for the following year, the current 
87.10 	year, and for as many consecutive preceding years as deemed appropriate by the governing 
87.11 	body of the county, city, or school district. It may include only information regarding:
87.12 	(1) the impact of inflation as measured by the implicit price deflator for state and 
87.13 	local government purchases;
87.14 	(2) population growth and decline;
87.15 	(3) state or federal government action; and
87.16 	(4) other financial factors that affect the level of property taxation and local services 
87.17 	that the governing body of the county, city, or school district may deem appropriate to 
87.18 	include.
87.19 	The information may be presented using tables, written narrative, and graphic 
87.20 	representations and may contain instruction toward further sources of information or 
87.21 	opportunity for comment.

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

87.24 	Sec. 41. Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read:
87.25 		Subd. 5a.Public advertisement. (a) A city that has a population of more than 
87.26 	2,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph 
87.27 	(i), a regional library district established under section   134.201, or school district shall 
87.28 	advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or, 
87.29 	in the case of a school district, to review its current budget and proposed property taxes 
87.30 	payable in the following year, at a public hearing, if a public hearing is required under 
87.31 	subdivision 6. The notice must be published not less than two business days nor more 
87.32 	than six business days before the hearing. 
87.33 	The advertisement must be at least one-eighth page in size of a standard-size or a 
87.34 	tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper 
87.35 	where legal notices and classified advertisements appear. The advertisement must be 
88.1 	published in an official newspaper of general circulation in the taxing authority. The 
88.2 	newspaper selected must be one of general interest and readership in the community, and 
88.3 	not one of limited subject matter. The advertisement must appear in a newspaper that is 
88.4 	published at least once per week.
88.5 	For purposes of this section, the metropolitan special taxing district's advertisement 
88.6 	must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer 
88.7 	Press.
88.8 	In addition to other requirements, a county and a city having a population of 
88.9 	more than 2,500 must show in the public advertisement required under this subdivision 
88.10 	the current local tax rate, the proposed local tax rate if no property tax levy increase 
88.11 	is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this 
88.12 	subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by 
88.13 	the city's or county's taxable net tax capacity.
88.14 	(b) Subject to the provisions of paragraph (g), the advertisement for school districts, 
88.15 	metropolitan special taxing districts, and regional library districts must be in the following 
88.16 	form, except that the notice for a school district may include references to the current 
88.17 	budget in regard to proposed property taxes.
88.18 	"NOTICE OF
88.19 	PROPOSED PROPERTY TAXES
88.20 	(School District/Metropolitan
88.21 	Special Taxing District/Regional
88.22 	Library District) of .........
88.23 	The governing body of ........ will soon hold budget hearings and vote on the property 
88.24 	taxes for (metropolitan special taxing district/regional library district services that will be 
88.25 	provided in (year)/school district services that will be provided in (year) and (year)).
88.26 	NOTICE OF PUBLIC HEARING:
88.27 	All concerned citizens are invited to attend a public hearing and express their opinions 
88.28 	on the proposed (school district/metropolitan special taxing district/regional library 
88.29 	district) budget and property taxes, or in the case of a school district, its current budget 
88.30 	and proposed property taxes, payable in the following year. The hearing will be held on 
88.31 	(Month/Day/Year) at (Time) at (Location, Address)."
88.32 	(c) Subject to the provisions of paragraph (g), the advertisement for cities and 
88.33 	counties must be in the following form.
88.34 	"NOTICE OF PROPOSED
88.35 	TOTAL BUDGET AND PROPERTY TAXES
89.1 	The (city/county) governing body or board of commissioners will hold a public hearing to 
89.2 	discuss the budget and to vote on the amount of property taxes to collect for services the 
89.3 	(city/county) will provide in (year).
89.4 	SPENDING: The total budget amounts below compare (city's/county's) (year) total actual 
89.5 	budget with the amount the (city/county) proposes to spend in (year).

89.6
89.7	(Year) Total Actual 
Budget
		Proposed (Year) 
Budget
		Change from 
(Year)-(Year)

89.8	$...........
		$...........
		.....%
	
89.9 	TAXES: The property tax amounts below compare that portion of the current budget 
89.10 	levied in property taxes in (city/county) for (year) with the property taxes the (city/county) 
89.11 	proposes to collect in (year).

89.12
89.13	(Year) Property 
Taxes
		Proposed (Year) 
Property Taxes
		Change from 
(Year)-(Year)

89.14	$...........
		$...........
		.....%
	
89.15 	LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax 
89.16 	levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.

89.17
89.18	(Year) Tax Rate
		(Year) Tax Rate if NO 
Levy Increase
		(Year) Proposed 
Tax Rate
	
89.19	...........
		...........
		.....
	
89.20 	ATTEND THE PUBLIC HEARING
89.21 	All (city/county) residents are invited to attend the public hearing of the (city/county) to 
89.22 	express your opinions on the budget and the proposed amount of (year) property taxes. 
89.23 	The hearing will be held on:
89.24 	(Month/Day/Year/Time)
89.25 	(Location/Address)
89.26 	If the discussion of the budget cannot be completed, a time and place for continuing the 
89.27 	discussion will be announced at the hearing. You are also invited to send your written 
89.28 	comments to:
89.29 	(City/County)
89.30 	(Location/Address)"
89.31 	(d) For purposes of this subdivision, the budget amounts listed on the advertisement 
89.32 	mean:
89.33 	(1) for cities, the total government fund expenditures, as defined by the state auditor 
89.34 	under section   471.6965, less any expenditures for improvements or services that are 
90.1 	specially assessed or charged under chapter 429, 430, 435, or the provisions of any other 
90.2 	law or charter; and 
90.3 	(2) for counties, the total government fund expenditures, as defined by the state 
90.4 	auditor under section   375.169, less any expenditures for direct payments to recipients or 
90.5 	providers for the human service aids listed below: 
90.6 	(i) Minnesota family investment program under chapters 256J and 256K;
90.7 	(ii) medical assistance under sections   256B.041, subdivision 5, and   256B.19, 
90.8 	subdivision 1; 
90.9 	(iii) general assistance medical care under section   256D.03, subdivision 6; 
90.10 	(iv) general assistance under section   256D.03, subdivision 2; 
90.11 	(v) emergency assistance under section   256J.48; 
90.12 	(vi) Minnesota supplemental aid under section   256D.36, subdivision 1; 
90.13 	(vii) preadmission screening under section   256B.0911, and alternative care grants 
90.14 	under section   256B.0913; 
90.15 	(viii) general assistance medical care claims processing, medical transportation and 
90.16 	related costs under section   256D.03, subdivision 4; 
90.17 	(ix) medical transportation and related costs under section   256B.0625, subdivisions 
90.18 	17 to 18a; 
90.19 	(x) group residential housing under section   256I.05, subdivision 8, transferred from 
90.20 	programs in clauses (iv) and (vi); or 
90.21 	(xi) any successor programs to those listed in clauses (i) to (x).
90.22 	(e) A city with a population of over 500 but not more than 2,500 that is required to 
90.23 	hold a public hearing under subdivision 6 must advertise by posted notice as defined in 
90.24 	section   645.12, subdivision 1. The advertisement must be posted at the time provided in 
90.25 	paragraph (a). It must be in the form required in paragraph (b). 
90.26 	(f) For purposes of this subdivision, the population of a city is the most recent 
90.27 	population as determined by the state demographer under section   4A.02. 
90.28 	(g) The commissioner of revenue, subject to the approval of the chairs of the house 
90.29 	and senate tax committees, shall annually prescribe the specific form and format of the 
90.30 	advertisements required under this subdivision, including such details as font size and 
90.31 	style, and spacing for the required items. The commissioner may prescribe alternate and 
90.32 	additional language for the advertisement for a taxing authority or for groups of taxing 
90.33 	authorities. At least two weeks before November 29 each year, the commissioner shall 
90.34 	provide a copy of the prescribed advertisements to the chairs of the committees of the 
90.35 	house of representatives and the senate with jurisdiction over taxes.

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

91.3 	Sec. 42. Minnesota Statutes 2006, section 275.067, is amended to read:
91.4 	275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE; 
91.5 	CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS.
91.6 	Special taxing districts as defined in section 275.066 organized on or before July 1 in 
91.7 	athe current calendar year may, and special taxing districts organized in a prior year that 
91.8 	have not previously certified a levy to the county auditor, are allowed to certify a levy to 
91.9 	the county auditor in that samethe current year for property taxes or special assessments 
91.10 	to be payable in the following calendar year to the extent that the special taxing district is 
91.11 	authorized by statute or special act to levy taxes or special assessments, but only if the 
91.12 	county auditor receives written notice from the district on or before July 1 of the current 
91.13 	year that the district may be certifying a levy in the current year, and the notice includes a 
91.14 	complete list or other description of the tax parcels in the district and a map showing the 
91.15 	boundaries of the district. Special taxing districts organized after July 1 in a calendar year 
91.16 	may not certify a levy of property taxes or special assessments to the county auditor under 
91.17 	the powers granted to them by statute or special act and subject to the requirements of 
91.18 	this section until the following calendar year. All special taxing districts must notify the 
91.19 	county auditor by July 1 in order for its boundaries for the levy to be certified that year 
91.20 	to be different than its boundaries for levies certified in prior years, and the notice must 
91.21 	include a complete list or other description of the tax parcels within the new boundaries 
91.22 	and a map showing the new boundaries of the district.

91.23 	EFFECTIVE DATE. This section is effective for taxes payable in 2008 and 
91.24 	thereafter.

91.25 	Sec. 43. Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision 
91.26 	to read:
91.27 		Subd. 5.Electronic tax statements. Upon written request by the owner of real 
91.28 	property located in the county, or by the owner's agent, a county may send tax statements 
91.29 	by electronic means instead of by mailing. For the purposes of the payment deadlines 
91.30 	specified in section 279.01, the postmark date on the envelope containing these property 
91.31 	tax statements is the date the statements were sent by electronic means.

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

92.1 	Sec. 44. Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read:
92.2 		Subd. 2.Partial payments. The county treasurer may accept payments of more or 
92.3 	less than the exact amount of a tax installment due. Payments must be applied first to the 
92.4 	oldest installment that is due but which has not been fully paid. If the accepted payment is 
92.5 	less than the amount due, payments must bethe payment is applied first to the penalty 
92.6 	accrued for the year the payment is made or the installment being paid. Acceptance of 
92.7 	partial payment of tax does not constitute a waiver of the minimum payment required as a 
92.8 	condition for filing an appeal under section 278.03 or any other law, nor does it affect the 
92.9 	order of payment of delinquent taxes under section 280.39. 

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

92.12 	Sec. 45. Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read:
92.13 		Subdivision 1.Due dates; penalties. Except as provided in subdivision 3 or 4, on 
92.14 	May 16 or 21 days after the postmark date on the envelope containing the property tax 
92.15 	statement, whichever is later, a penalty shall accrueaccrues and thereafter beis charged 
92.16 	upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer. 
92.17 	The penalty shall beis at a rate of two percent on homestead property until May 31 and 
92.18 	four percent on June 1. The penalty on nonhomestead property shall beis at a rate of four 
92.19 	percent until May 31 and eight percent on June 1. This penalty shalldoes not accrue until 
92.20 	June 1 of each year, or 21 days after the postmark date on the envelope containing the 
92.21 	property tax statements, whichever is later, on commercial use real property used for 
92.22 	seasonal residential recreational purposes and classified as class 1c or 4c, and on other 
92.23 	commercial use real property classified as class 3a, provided that over 60 percent of the 
92.24 	gross income earned by the enterprise on the class 3a property is earned during the months 
92.25 	of May, June, July, and August. Any property owner of such class 3a property who pays
92.26 	In order for the first half of the tax due on theclass 3a property to be paid after May 15 
92.27 	and before June 1, or 21 days after the postmark date on the envelope containing the 
92.28 	property tax statement, whichever is later, shallwithout penalty, the owner of the property 
92.29 	must attach an affidavit to the payment attesting to compliance with the income provision 
92.30 	of this subdivision. Thereafter, for both homestead and nonhomestead property, on the 
92.31 	first day of each month beginning July 1, up to and including October 1 following, an 
92.32 	additional penalty of one percent for each month shall accrueaccrues and beis charged on 
92.33 	all such unpaid taxes provided that if the due date was extended beyond May 15 as the 
92.34 	result of any delay in mailing property tax statements no additional penalty shall accrue 
92.35 	if the tax is paid by the extended due date. If the tax is not paid by the extended due 
93.1 	date, then all penalties that would have accrued if the due date had been May 15 shall be 
93.2 	charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid 
93.3 	prior to May 16 or 21 days after the postmark date on the envelope containing the property 
93.4 	tax statement, whichever is later; and, if so paid, no penalty shall attach attaches; the 
93.5 	remaining one-half shallmay be paid at any time prior to October 16 following, without 
93.6 	penalty; but, if not so paid, then a penalty of two percent shall accrueaccrues thereon for 
93.7 	homestead property and a penalty of four percent on nonhomestead property. Thereafter, 
93.8 	for homestead property, on the first day of November an additional penalty of four percent 
93.9 	shall accrueaccrues and on the first day of December following, an additional penalty of 
93.10 	two percent shall accrueaccrues and beis charged on all such unpaid taxes. Thereafter, 
93.11 	for nonhomestead property, on the first day of November and December following, an 
93.12 	additional penalty of four percent for each month shall accrueaccrues and beis charged 
93.13 	on all such unpaid taxes. If one-half of such taxes shallare not be paid prior to May 16 or 
93.14 	21 days after the postmark date on the envelope containing the property tax statement, 
93.15 	whichever is later, the same may be paid at any time prior to October 16, with accrued 
93.16 	penalties to the date of payment added, and thereupon no penalty shall attachattaches to 
93.17 	the remaining one-half until October 16 following.
93.18 	This section applies to payment of personal property taxes assessed against 
93.19 	improvements to leased property, except as provided by section 277.01, subdivision 3. 
93.20 	A county may provide by resolution that in the case of a property owner that has 
93.21 	multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in 
93.22 	installments as provided in this subdivision.
93.23 	The county treasurer may accept payments of more or less than the exact amount of 
93.24 	a tax installment due. Payments must be applied first to the oldest installment that is due 
93.25 	but which has not been fully paid. If the accepted payment is less than the amount due, 
93.26 	payments must be applied first to the penalty accrued for the year the payment is made
93.27 	or the installment being paid. Acceptance of partial payment of tax does not constitute 
93.28 	a waiver of the minimum payment required as a condition for filing an appeal under 
93.29 	section 278.03 or any other law, nor does it affect the order of payment of delinquent 
93.30 	taxes under section 280.39. 

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

93.33 	Sec. 46. Minnesota Statutes 2006, section 290B.03, subdivision 2, is amended to read:
93.34 		Subd. 2.Qualifying homestead; defined. Qualifying homestead property is defined 
93.35 	as the dwelling occupied as the homeowner's principal residence and so much of the land 
94.1 	surrounding it as is reasonably necessary for use of the dwelling as a home and any other 
94.2 	property used for purposes of a homestead as defined in section 273.13, subdivisions 
94.3 	22 and 23, but not to exceed one acre. The homestead may be part of a multidwelling 
94.4 	building and the land on which it is built.  Property is not qualifying homestead property if 
94.5 	a person or entity other than the applicant or the applicant's spouse holds an interest in the 
94.6 	property as the vendor under a contract for deed or as a remainderperson.

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

94.9 	Sec. 47. Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read:
94.10 		Subd. 3.Claimant. (a) "Claimant" means:
94.11 	(1) a person, as that term is defined in section 290.01, subdivision 2, who owns 
94.12 	forest land in Minnesota and files an application authorized by the Sustainable Forest 
94.13 	Incentive Act. Claimant includes;
94.14 	(2) a purchaser or grantee if property enrolled in the program was sold or transferred 
94.15 	after the original application was filed and prior to the annual incentive payment being 
94.16 	made; or
94.17 	(3) an owner of land previously covered by an auxiliary forest contract that 
94.18 	automatically qualifies for inclusion in the Sustainable Forest Incentive Act program 
94.19 	pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
94.20 	 The purchaser or grantee must notify the commissioner in writing of the sale or 
94.21 	transfer of the property. Owners of land that qualifies for inclusion pursuant to section 
94.22 	88.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing 
94.23 	of the expiration of the auxiliary forest contract or land trade with a governmental unit and 
94.24 	submit an application to the commissioner by August 15 in order to be eligible to receive a 
94.25 	payment by October 1 of that same year. For purposes of section 290C.11, claimant also 
94.26 	includes any person bound by the covenant required in section 290C.04. 
94.27 	(b) No more than one claimant is entitled to a payment under this chapter with 
94.28 	respect to any tract, parcel, or piece of land enrolled under this chapter that has been 
94.29 	assigned the same parcel identification number. When enrolled forest land is owned by 
94.30 	two or more persons, the owners must determine between them which person is eligible to 
94.31 	claim the payments provided under sections 290C.01 to 290C.11. In the case of property 
94.32 	sold or transferred, the former owner and the purchaser or grantee must determine between 
94.33 	them which person is eligible to claim the payments provided under sections 290C.01 to 
94.34 	290C.11. The owners, transferees, or grantees must notify the commissioner in writing 
94.35 	which person is eligible to claim the payments. 

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

95.2 	Sec. 48. Minnesota Statutes 2006, section 290C.04, is amended to read:
95.3 	290C.04 APPLICATIONS.
95.4 	(a) A landowner may apply to enroll forest land for the sustainable forest incentive 
95.5 	program under this chapter. The claimant must complete, sign, and submit an application 
95.6 	to the commissioner by September 30 in order for the land to become eligible beginning 
95.7 	in the next year. The application shall be on a form prescribed by the commissioner and 
95.8 	must include the information the commissioner deems necessary. At a minimum, the 
95.9 	application must show the following information for the land and the claimant: (i) the 
95.10 	claimant's Social Security number or state or federal business tax registration number and 
95.11 	date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's 
95.12 	parcel identification numbers for the tax parcels that completely contain the claimant's 
95.13 	forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment 
95.14 	in the program, (vi) the approved plan writer's signature and identification number, and 
95.15 	(vii) proof, in a form specified by the commissioner, that the claimant has executed and 
95.16 	acknowledged in the manner required by law for a deed, and recorded, a covenant that the 
95.17 	land is not and shall not be developed in a manner inconsistent with the requirements and 
95.18 	conditions of this chapter. The covenant shall state in writing that the covenant is binding 
95.19 	on the claimant and the claimant's successor or assignee, and that it runs with the land 
95.20 	for a period of not less than eight years. The commissioner shall specify the form of the 
95.21 	covenant and provide copies upon request. The covenant must include a legal description 
95.22 	that encompasses all the forest land that the claimant wishes to enroll under this section or 
95.23 	the certificate of title number for that land if it is registered land.
95.24 	(b) In all cases, the commissioner shall notify the claimant within 90 days after 
95.25 	receipt of a completed application that either the land has or has not been approved for 
95.26 	enrollment. A claimant whose application is denied may appeal the denial as provided in 
95.27 	section 290C.11, paragraph (a) 290C.13. 
95.28 	(c) Within 90 days after the denial of an application, or within 90 days after the 
95.29 	final resolution of any appeal related to the denial, the commissioner shall execute and 
95.30 	acknowledge a document releasing the land from the covenant required under this chapter. 
95.31 	The document must be mailed to the claimant and is entitled to be recorded.
95.32 	(d) The Social Security numbers collected from individuals under this section are 
95.33 	private data as provided in section 13.355. The federal business tax registration number 
95.34 	and date of birth data collected under this section are also private data on individuals or 
95.35 	nonpublic data, as defined in section 13.02, subdivisions 9 and 12, but may be shared 
96.1 	with county assessors for purposes of tax administration and with county treasurers for 
96.2 	purposes of the revenue recapture under chapter 270A. 

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

96.4 	Sec. 49. Minnesota Statutes 2006, section 290C.05, is amended to read:
96.5 	290C.05 ANNUAL CERTIFICATION.
96.6 	On or before July 1 of each year, beginning with the year after the original claimant 
96.7 	has received an approved application, the commissioner shall send each claimant enrolled 
96.8 	under the sustainable forest incentive program a certification form. For purposes of this 
96.9 	section, the original claimant is the person that filed the first application under section 
96.10 	290C.04 to enroll the land in the program. The claimant must sign the certification, 
96.11 	attesting that the requirements and conditions for continued enrollment in the program are 
96.12 	currently being met, and must return the signed certification form to the commissioner by 
96.13 	August 15 of that same year. If the claimant does not return an annual certification form 
96.14 	by the due date, the provisions in section 290C.11 apply.

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

96.16 	Sec. 50. Minnesota Statutes 2006, section 290C.11, is amended to read:
96.17 	290C.11 PENALTIES FOR REMOVAL.
96.18 	(a) If the commissioner determines that land enrolled in the sustainable forest 
96.19 	incentive program is in violation of the conditions for enrollment as specified in section 
96.20 	290C.03, the commissioner shall notify the claimant of the intent to remove all enrolled 
96.21 	land from the sustainable forest incentive program. The claimant has 60 days to appeal 
96.22 	this determination under the provisions of section 290C.13. The appeal must be made 
96.23 	in writing to the commissioner, who shall, within 60 days, notify the claimant as to the 
96.24 	outcome of the appeal. Within 60 days after the commissioner denies an appeal, or within 
96.25 	120 days after the commissioner received a written appeal if the commissioner has not 
96.26 	made a determination in that time, the owner may appeal to Tax Court under chapter 271 
96.27 	as if the appeal is from an order of the commissioner.
96.28 	(b) If the commissioner determines the land is to be removed from the sustainable 
96.29 	forest incentive program, the claimant is liable for payment to the commissioner in the 
96.30 	amount equal to the payments received under this chapter for the previous four-year 
96.31 	period, plus interest. The claimant has 90 days to satisfy the payment for removal of land 
96.32 	from the sustainable forest incentive program under this section. If the penalty is not paid 
96.33 	within the 90-day period under this paragraph, the commissioner shall certify the amount 
97.1 	to the county auditor for collection as a part of the general ad valorem real property taxes 
97.2 	on the land in the following taxes payable year.

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

97.4 	Sec. 51. [290C.13] APPEALS.
97.5 		Subdivision 1.Claimant right to reconsideration. A claimant may obtain 
97.6 	reconsideration by the commissioner of a determination removing enrolled land from the 
97.7 	sustainable forest incentive program, a determination denying an application to enroll land 
97.8 	in the program, or a denial of part or all of an incentive payment by filing an administrative 
97.9 	appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if 
97.10 	the action taken by the commissioner is the outcome of an administrative appeal.
97.11 		Subd. 2.Appeal by claimant. A claimant who wishes to seek administrative review 
97.12 	must follow the procedures in subdivision 4.
97.13 		Subd. 3.Notice date. For purposes of this section, the term "notice date" means 
97.14 	the date of the determination removing enrolled land or the date of the notice denying an 
97.15 	application to enroll land or denying part or all of an incentive payment.
97.16 		Subd. 4.Time and content for administrative appeal. Within 60 days after the 
97.17 	notice date, the claimant must file a written appeal with the commissioner. The appeal 
97.18 	need not be in any particular form but must contain the following information:
97.19 	(1) name and address of the claimant;
97.20 	(2) if a corporation, the state of incorporation of the claimant, and the principal 
97.21 	place of business of the corporation;
97.22 	(3) the Minnesota or federal business identification number or Social Security 
97.23 	number of the claimant;
97.24 	(4) the date;
97.25 	(5) the periods involved and the amount of payment involved for each year or period;
97.26 	(6) the findings in the notice that the claimant disputes;
97.27 	(7) a summary statement that the claimant relies on for each exception; and
97.28 	(8) the claimant's signature or signature of the claimant's duly authorized agent.
97.29 		Subd. 5.Extensions. When requested in writing and within the time allowed for 
97.30 	filing an administrative appeal, the commissioner may extend the time for filing an appeal 
97.31 	for a period not more than 30 days from the expiration of the 60 days from the notice date.
97.32 		Subd. 6.Determination of appeal. On the basis of applicable law and available 
97.33 	information, the commissioner shall determine the validity, if any, in whole or in part, 
97.34 	of the appeal and notify the claimant of the decision. This notice must be in writing 
97.35 	and contain the basis for the determination.
98.1 		Subd. 7.Agreement determining issues under appeal. When it appears to be in 
98.2 	the best interests of the state, the commissioner may settle the amount of any incentive 
98.3 	payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties, 
98.4 	or interest that the commissioner has under consideration by virtue of an appeal filed 
98.5 	under this section. An agreement must be in writing and signed by the commissioner and 
98.6 	the claimant, or the claimant's representative authorized by the claimant to enter into an 
98.7 	agreement. The agreement is final and conclusive and, except upon a showing of fraud or 
98.8 	malfeasance, or misrepresentation of a material fact, the case must not be reopened as to 
98.9 	the matters agreed upon.
98.10 		Subd. 8.Appeal to Tax Court. Within 60 days after the commissioner denies 
98.11 	an appeal, or within 120 days after the commissioner received a written appeal if the 
98.12 	commissioner has not made a determination in that time, the claimant may appeal to Tax 
98.13 	Court under chapter 271 as if the appeal is from an order of the commissioner.
98.14 		Subd. 9.Exemption from Administrative Procedure Act. This section is not 
98.15 	subject to chapter 14.

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

98.17 	Sec. 52. REPEALER.
 98.18 	(a) Minnesota Statutes 2006, section 270.073, is repealed.
98.19 	(b) Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52; 
98.20 	and 270.53, are repealed.

98.21 	EFFECTIVE DATE. Paragraph (a) is effective beginning January 2, 2007, for 
98.22 	taxes payable in 2008 and thereafter. Paragraph (b) is effective the day following final 
98.23 	enactment.

98.24 	ARTICLE 5
98.25 	MISCELLANEOUS

98.26 	Section 1. Minnesota Statutes 2006, section 16D.04, subdivision 1, is amended to read:
98.27 		Subdivision 1.Duties. The commissioner shall provide services to the state and its
98.28 	referring agencies to collect debts owed the state referred for collection under this chapter. 
98.29 	The commissioner is not a collection agency as defined by section 332.31, subdivision 3, 
98.30 	and is not licensed, bonded, or regulated by the commissioner of commerce under sections 
98.31 	332.31 to 332.35 or 332.38 to 332.45. The commissioner is subject to section 332.37, 
98.32 	except clause (9), (10), (12), or (19). Debts referred to the commissioner for collection 
98.33 	under section 256.9792 may in turn be referred by the commissioner to the enterprise. 
99.1 	An audited financial statement may not be required as a condition of debt placement with 
99.2 	a private agency if the private agency: (1) has errors and omissions coverage under a 
99.3 	professional liability policy in an amount of at least $1,000,000; or (2) has a fidelity bond 
99.4 	to cover actions of its employees, in an amount of at least $100,000. In cases of debts 
99.5 	referred under section 256.9792, the provisions of this chapter and section 256.9792 apply 
99.6 	to the extent they are not in conflict. If they are in conflict, the provisions of section 
99.7 	256.9792 control. For purposes of this chapter, the referring agency for such debts remains 
99.8 	the Department of Human Services. 

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

99.10 	Sec. 2. Minnesota Statutes 2006, section 16D.04, subdivision 2, is amended to read:
99.11 		Subd. 2.Agency participation. (a) A referring agency may, at its option, must
99.12 	refer, by electronic means, debts to the commissioner for collection. The ultimate
99.13 	Responsibility for the debt, including the reporting of the debt to the commissioner of 
99.14 	finance and the decision with regard to the continuing collection and uncollectibility of the 
99.15 	debt, remains with the referring agency.
99.16 	(b) Before a debt becomes 121 days past due, a referring agency may refer the 
99.17 	debt to the commissioner for collection at any time after a debt becomes delinquent and 
99.18 	uncontested and the debtor has no further administrative appeal of the amount of the 
99.19 	debt. When a debt owed to a statereferring agency becomes 121 days past due, the state
99.20 	referring agency must refer the debt to the commissioner for collection. This requirement 
99.21 	does not apply if there is a dispute over the amount or validity of the debt, if the debt is the 
99.22 	subject of legal action or administrative proceedings, or the agency determines that the 
99.23 	debtor is adhering to acceptable payment arrangements. The commissioner, in consultation 
99.24 	with the commissioner of finance, may provide that certain types of debt need not be 
99.25 	referred to the commissioner for collection under this paragraph. Methods and procedures 
99.26 	for referral must follow internal guidelines prepared by the commissioner of finance.
99.27 	(c) If the referring agency is a court, the court must furnish a debtor's Social Security 
99.28 	number to the commissioner when the court refers the debt.

99.29 	EFFECTIVE DATE. This section is effective for debts referred on or after January 
99.30 	1, 2008.

99.31 	Sec. 3. Minnesota Statutes 2006, section 16D.11, subdivision 2, is amended to read:
99.32 		Subd. 2.Computation. At the time a debt is referred, the amount of collection 
99.33 	costs is equal to 1517 percent of the debt, or 25 percent of the debt remaining unpaid if 
100.1 	the commissioner or private collection agency has to take enforced collection action 
100.2 	by serving a summons and complaint on or entering judgment against the debtor, or by 
100.3 	utilizing any of the remedies authorized under section 16D.08, subdivision 2, except for 
100.4 	the remedies in sections 270C.32 and 270C.65 or when referred by the commissioner for 
100.5 	additional collection activity by a private collection agency. If, after referral of a debt to 
100.6 	a private collection agency, the debtor requests cancellation of collection costs under 
100.7 	subdivision 3, the debt must be returned to the commissioner for resolution of the request.

100.8 	EFFECTIVE DATE. This section is effective for debts referred on or after January 
100.9 	1, 2008.

100.10 	Sec. 4. Minnesota Statutes 2006, section 16D.11, subdivision 7, is amended to read:
100.11 		Subd. 7.Adjustment of rate. By June 1 of each year, the commissioner of finance
100.12 	shall determine the rate of collection costs for debts referred to the enterprise during 
100.13 	the next fiscal year. The rate is a percentage of the debts in an amount that most nearly 
100.14 	equals the costs of the enterprise necessary to process and collect referred debts under this 
100.15 	chapter. In no event shall the rate of collection costs when a debt is first referred exceed 
100.16 	three-fifths of the maximum collection costs, and in no event shall the rate of the maximum
100.17 	collection costs exceed 25 percent of the debt. Determination of the rate of collection costs 
100.18 	under this section is not subject to the fee setting requirements of section 16A.1285. 

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

100.20 	Sec. 5. [270C.435] REFUNDS NOT SUBJECT TO ATTACHMENT OR 
100.21 	GARNISHMENT.
100.22 	No amount of a tax refund or other payment payable by the commissioner to 
100.23 	a taxpayer is assignable or subject to execution, levy, attachment, garnishment, lien 
100.24 	foreclosure, or other legal process, except as specifically provided by law.

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

100.26 	Sec. 6. Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read:
100.27 		Subd. 2.Required and excluded tax preparers. (a) Subject to the limitations 
100.28 	of paragraph (b), the commissioner must publish lists of tax preparers as defined in 
100.29 	section 289A.60, subdivision 13, paragraph (f), who have been convicted under section 
100.30 	289A.63 or assessed penalties in excess of $1,000 under section 289A.60, subdivision 
100.31 	13, paragraph (a).
100.32 	(b) For the purposes of this section, tax preparers are not subject to publication if:
101.1 	(1) an administrative or court action contesting the penalty has been filed or served 
101.2 	and is unresolved at the time when notice would be given under subdivision 3;
101.3 	(2) an appeal period to contest the penalty has not expired; or
101.4 	(3) the commissioner has been notified that the tax preparer is deceased.

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

101.7 	Sec. 7. Minnesota Statutes 2006, section 270C.56, subdivision 1, is amended to read:
101.8 		Subdivision 1.Liability imposed. A person who, either singly or jointly with 
101.9 	others, has the control of, supervision of, or responsibility for filing returns or reports, 
101.10 	paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or 
101.11 	a person who is liable under any other law, is liable for the payment of taxes, penalties, 
101.12 	and interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 290.92
101.13 	and 297E.02, and, for the taxes listed in this subdivision, the applicable penalties for 
101.14 	nonpayment under section 289A.60.

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

101.17 	Sec. 8. Minnesota Statutes 2006, section 270C.63, subdivision 9, is amended to read:
101.18 		Subd. 9.Period of limitations. The lien imposed by this section shall, 
101.19 	notwithstanding any other provision of law to the contrary, be enforceable from the time 
101.20 	the lien arises and for ten years from the date of filing the notice of lien, which must be 
101.21 	filed by the commissioner within five years after the date of assessment of the tax or final 
101.22 	administrative or judicial determination of the assessment. A notice of lien filed at the 
101.23 	Office of the Secretary of State may be transcribed to any county within ten years after the 
101.24 	date of its filing, but the transcription does not extend the period during which the lien is 
101.25 	enforceable. A notice of lien filed in one county may be transcribed to the secretary of 
101.26 	state or to any other county within ten years after the date of its filing, but the transcription 
101.27 	shall not extend the period during which the lien is enforceable. A notice of lien may be 
101.28 	renewed by the commissioner before the expiration of the ten-year period for an additional 
101.29 	ten years. The taxpayer must receive written notice of the renewal.

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

101.32 	Sec. 9. Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read:
102.1 		Subd. 3.State reimbursement. (a) By February 15 of each year, the treasurer of 
102.2 	the relief association shall apply to the commissioner of revenueEach year, to be eligible 
102.3 	for state reimbursement of the amount of supplemental benefits paid under subdivision 2 
102.4 	during the preceding calendar year, the relief association must apply to the commissioner 
102.5 	of revenue by February 15. By March 15 the commissioner shall reimburse the relief 
102.6 	association for the amount of the supplemental benefits paid to qualified recipients. 
102.7 	(b) The commissioner of revenue shall prescribe the form of and supporting 
102.8 	information that must be supplied as part of the application for state reimbursement.
102.9 	The commissioner of revenue shall reimburse the relief association by paying the 
102.10 	reimbursement amount to the treasurer of the municipality where the association is located. 
102.11 	Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement 
102.12 	to the treasurer of the association if the association has filed a financial report with the 
102.13 	municipality. If the relief association has not filed a financial report with the municipality, 
102.14 	the municipal treasurer shall delay transmission of the reimbursement payment to the 
102.15 	association until the complete financial report is filed. If the association has dissolved or 
102.16 	has been removed as a trustee of state aid, the treasurer shall deposit the money in a 
102.17 	special account in the municipal treasury, and the money may be disbursed only for the 
102.18 	purposes and in the manner provided in section 424A.08. When paid to the association,
102.19 	(c) the reimbursement payment must be deposited in the special fund of the relief 
102.20 	association. 
102.21 	(d)(c) A sum sufficient to make the payments is appropriated from the general fund 
102.22 	to the commissioner of revenue.

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