HF 3149

CCR--HF3149C - 85th Legislature (2007 - 2008)

Posted on 01/15/2013 08:28 p.m.

KEY: ~~stricken~~ = removed, old language.

underscored = added, new language.

Version List HF3149 Authors and Status

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Engrossments
Introduction PDF	Posted on 02/18/2008
1st Engrossment PDF	Posted on 04/30/2008
2nd Engrossment PDF	Posted on 05/01/2008
3rd Engrossment PDF	Posted on 05/06/2008
4th Engrossment PDF	Posted on 05/18/2008

Conference Committee Reports
CCR--HF3149C PDF	Posted on 05/18/2008

1.1CONFERENCE COMMITTEE REPORT ON H. F. No. 3149 1.2A bill for an act 1.3relating to the financing and operation of state and local government; making 1.4policy, technical, administrative, enforcement, collection, refund, clarifying, 1.5and other changes to income, franchise, property, sales and use, minerals, 1.6wheelage, mortgage, deed, and estate taxes, and other taxes and tax-related 1.7provisions; providing for homestead credit state refund; providing for aids to 1.8local governments; providing city foreclosure and deed grants; changing and 1.9providing property tax exemptions and credits; modifying job opportunity 1.10building zone program; modifying green acre eligibility requirements; providing 1.11aggregate resource preservation property tax law; providing seasonal recreational 1.12property tax deferral program; modifying eligibility for senior citizen tax 1.13deferral program; modifying transit taxing district; modifying levies, property 1.14valuation procedures, homestead provisions, property tax classes, and class rates; 1.15requiring levy limits under certain contingencies; providing for and modifying 1.16sales tax exemptions; exempting two-wheel, motorized vehicles from wheelage 1.17tax; abolishing the political contribution refund; providing exclusion from 1.18income for certain veterans' retirement benefits; providing credits; providing 1.19for additional financing of metropolitan area transit and paratransit capital 1.20expenditures; authorizing issuance of certain obligations; modifying provision 1.21governing bonding for county libraries; changing and authorizing powers, duties, 1.22and requirements of local governments and authorities and state departments 1.23or agencies; modifying, extending, and authorizing certain tax increment 1.24financing districts; authorizing and modifying local sales taxes; prohibiting 1.25the imposition of new local sales taxes; providing federal updates; changing 1.26accelerated sales tax; creating Surplus Lines Association of Minnesota; creating 1.27Iron Range revitalization account; changing provisions related to data practices 1.28and debt collection; requiring studies; providing appointments; appropriating 1.29money;amending Minnesota Statutes 2006, sections 13.51, subdivision 3; 1.3013.585, subdivision 5; 16D.02, subdivisions 3, 6; 16D.04, subdivision 2, as 1.31amended; 60A.196; 163.051, subdivision 1; 168.012, subdivision 1, by adding a 1.32subdivision; 168.013, subdivision 1f; 168A.03, subdivision 1; 169.01, by adding 1.33a subdivision; 169.781, subdivision 1; 216B.1612, by adding a subdivision; 1.34216B.1646; 270A.03, subdivision 7; 270A.08, subdivision 1; 270B.15; 270C.33, 1.35subdivision 5; 270C.56, subdivisions 1, as amended, 3; 270C.85, subdivision 2; 1.36272.02, subdivisions 13, 20, 21, 27, 31, 38, 49, by adding subdivisions; 272.03, 1.37subdivision 3, by adding a subdivision; 273.11, subdivisions 1, 1a, 8, 14a, 14b, 1.38by adding subdivisions; 273.111, subdivisions 3, as amended, 4, 8, 9, 11, 11a, 1.39by adding a subdivision; 273.121, as amended; 273.124, subdivisions 1, 6, 13, 1.40as amended, 21; 273.128, subdivision 1, as amended; 273.13, subdivisions 23, 1.41as amended, 24, 25, as amended, 33, 34, as added; 273.1384, subdivisions 1, 2; 1.42274.01, subdivision 3; 274.014, subdivision 3; 274.14; 275.025, subdivisions 2.11, 2; 275.065, subdivisions 1c, 6, 8, 9, 10, by adding subdivisions; 275.70, 2.2by adding a subdivision; 275.71; 276.04, subdivision 2, as amended; 282.08; 2.3287.20, subdivisions 3a, 9, by adding a subdivision; 289A.12, by adding a 2.4subdivision; 289A.18, subdivision 1, as amended; 289A.19, subdivision 2, by 2.5adding a subdivision; 289A.20, subdivision 4, as amended; 289A.40, subdivision 2.61; 289A.50, subdivision 1; 289A.55, by adding a subdivision; 289A.60, 2.7subdivision 15, as amended, by adding a subdivision; 290.01, subdivisions 6, 6b, 2.819a, as amended, 29, by adding a subdivision; 290.06, by adding subdivisions; 2.9290.068, subdivisions 1, 3, by adding subdivisions; 290.07, subdivision 1; 2.10290.091, subdivision 2, as amended; 290.21, subdivision 4; 290.92, subdivisions 2.111, 26, 31, as added; 290A.03, subdivision 13; 290A.04, subdivisions 2h, 3, 4, 2.12by adding subdivisions; 290B.03, subdivision 1; 290B.04, subdivisions 1, 3, 4; 2.13290B.05, subdivision 1; 290B.07; 291.03, subdivision 1; 295.50, subdivision 4; 2.14295.52, subdivision 4, as amended; 295.53, subdivision 4a; 296A.07, subdivision 2.154; 296A.08, subdivision 3; 296A.16, subdivision 2; 297A.61, subdivisions 22, 2.1629; 297A.665, as amended; 297A.67, subdivision 7, as amended; 297A.70, 2.17subdivisions 2, 8; 297A.71, subdivision 23, by adding subdivisions; 297A.75; 2.18297A.99, subdivision 1, as amended; 297A.995, subdivision 10, by adding 2.19subdivisions; 297B.01, subdivision 7, by adding a subdivision; 297B.03; 2.20297F.01, subdivision 8; 297F.09, subdivision 10, as amended; 297F.21, 2.21subdivision 1; 297G.01, subdivision 9; 297G.09, subdivision 9, as amended; 2.22297H.09; 297I.05, subdivision 12; 298.24, subdivision 1, as amended; 298.75, 2.23subdivisions 1, 2, 6, 7; 365A.095; 383A.80, subdivision 4; 383A.81, subdivisions 2.241, 2; 383B.80, subdivision 4; 383E.20; 429.101, subdivision 1; 469.033, 2.25subdivision 6; 469.040, subdivision 4; 469.174, subdivision 10b; 469.177, 2.26subdivision 1c, by adding a subdivision; 469.1813, subdivision 8; 469.312, by 2.27adding a subdivision; 469.319; 469.3201; 473.39, by adding a subdivision; 2.28473.446, subdivisions 2, 8; 477A.011, subdivisions 34, 36, as amended, by 2.29adding subdivisions; 477A.0124, subdivision 5; 477A.013, subdivisions 1, 8, 2.30as amended, 9, as amended; 477A.03; Minnesota Statutes 2007 Supplement, 2.31sections 115A.1314, subdivision 2; 268.19, subdivision 1; 273.1231, subdivision 2.327, by adding a subdivision; 273.1232, subdivision 1; 273.1233, subdivisions 1, 2.333; 273.1234; 273.1235, subdivisions 1, 3; 273.124, subdivision 14; 273.1393; 2.34275.065, subdivisions 1, 1a, 3; 290.01, subdivision 19b, as amended; 298.227; 2.35Laws 1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4, as 2.36amended; Laws 1995, chapter 264, article 5, section 46, subdivision 2; Laws 2.372003, chapter 127, article 10, section 31, subdivision 1; Laws 2006, chapter 259, 2.38article 10, section 14, subdivision 1; Laws 2008, chapter 154, article 2, section 2.3911; article 3, section 7; article 9, sections 23; 24; proposing coding for new law 2.40in Minnesota Statutes, chapters 60A; 116J; 169; 216F; 273; 298; 373; 383C; 2.41383D; 383E; 469; proposing coding for new law as Minnesota Statutes, chapter 2.42290D; repealing Minnesota Statutes 2006, sections 10A.322, subdivision 4; 2.43273.11, subdivision 14; 273.111, subdivision 6; 290.06, subdivision 23; 290.191, 2.44subdivision 4; 290A.04, subdivisions 2, 2b; 473.4461; 477A.014, subdivision 5; 2.45Minnesota Statutes 2007 Supplement, section 477A.014, subdivision 4; Laws 2.462005, First Special Session chapter 3, article 5, section 24; Minnesota Rules, 2.47parts 8031.0100, subpart 3; 8093.2100. 2.48May 18, 2008 2.49The Honorable Margaret Anderson Kelliher 2.50Speaker of the House of Representatives 2.51The Honorable James P. Metzen 2.52President of the Senate 2.53We, the undersigned conferees for H. F. No. 3149 report that we have agreed upon 2.54the items in dispute and recommend as follows: 3.1That the Senate recede from its amendments and that H. F. No. 3149 be further 3.2amended as follows: 3.3Delete everything after the enacting clause and insert: 3.4"ARTICLE 1 3.5HOMEOWNER PROPERTY TAX REFUND 3.6 Section 1. Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to 3.7read: 3.8 Subd. 2. Homeowners. A claimant whose property taxes payable are in excess 3.9of the percentage of the household income stated below shall pay an amount equal to 3.10the percent of income shown for the appropriate household income level along with the 3.11percent to be paid by the claimant of the remaining amount of property taxes payable. 3.12The state refund equals the amount of property taxes payable that remain, up to the state 3.13refund amount shown below. 3.14 3.15 Household Income Percent of Income Percent Paid by Claimant Maximum State Refund

3.16 $0 to 1,189 1.0 percent 15 percent $1,450$1,850 3.17 1,190 to 2,379 1.1 percent 15 percent $1,450$1,850 3.18 2,380 to 3,589 1.2 percent 15 percent $1,410$1,800 3.19 3,590 to 4,789 1.3 percent 20 percent $1,410$1,800 3.20 4,790 to 5,979 1.4 percent 20 percent $1,360$1,730 3.21 5,980 to 8,369 1.5 percent 20 percent $1,360$1,730 3.22 8,370 to 9,559 1.6 percent 25 percent $1,310$1,670 3.23 9,560 to 10,759 1.7 percent 25 percent $1,310$1,670 3.24 10,760 to 11,949 1.8 percent 25 percent $1,260$1,610 3.25 11,950 to 13,139 1.9 percent 30 percent $1,260$1,610 3.26 13,140 to 14,349 2.0 percent 30 percent $1,210$1,540 3.27 14,350 to 16,739 2.1 percent 30 percent $1,210$1,540 3.28 16,740 to 17,929 2.2 percent 35 percent $1,160$1,480 3.29 17,930 to 19,119 2.3 percent 35 percent $1,160$1,480 3.30 19,120 to 20,319 2.4 percent 35 percent $1,110$1,420 3.31 20,320 to 25,099 2.5 percent 40 percent $1,110$1,420 4.1 25,100 to 28,679 2.6 percent 40 percent $1,070$1,360 4.2 28,680 to 35,849 2.7 percent 40 percent $1,070$1,360 4.3 35,850 to 41,819 2.8 percent 45 percent $ 970$1,240 4.4 41,820 to 47,799 3.0 percent 45 percent $ 970$1,240 4.5 47,800 to 53,779 3.2 percent 45 percent $ 870$1,110 4.6 53,780 to 59,749 3.5 percent 50 percent $ 780$990 4.7 59,750 to 65,729 4.03.5 percent 50 percent $ 680 $870 4.8 65,730 to 69,319 4.03.5 percent 50 percent $ 580 $740 4.9 69,320 to 71,719 4.03.5 percent 50 percent $ 480$610 4.10 71,720 to 74,619 4.03.5 percent 50 percent $ 390$500 4.11 74,620 to 77,519 4.03.5 percent 50 percent $ 290$370

4.12 The payment made to a claimant shall be the amount of the state refund calculated 4.13under this subdivision. No payment is allowed if the claimant's household income is 4.14$77,520 or more. 4.15EFFECTIVE DATE.This section is effective beginning with refunds based on 4.16property taxes payable in 2009. 4.17 Sec. 2. TAXPAYER ASSISTANCE SERVICES; PROPERTY TAX REFUND. 4.18 (a) $100,000 in fiscal year 2009 is appropriated from the general fund to the 4.19commissioner of revenue to make grants to one or more nonprofit organizations, qualifying 4.20under section 501(c)(3) of the Internal Revenue Code of 1986, to coordinate, facilitate, 4.21encourage, and aid in the provision of taxpayer assistance services. The commissioner 4.22must award grants under this section so as to increase the availability of taxpayer 4.23assistance services after April 15, to assist homeowners in filing claims for the property 4.24tax refund, and to increase participation in the program. This appropriation is onetime and 4.25is not added to the agency's base budget. 4.26 (b) "Taxpayer assistance services" means accounting and tax preparation services 4.27provided by volunteers to low-income and disadvantaged Minnesota residents to help 4.28them file federal and state income tax returns, Minnesota property tax refund claims, and 4.29may include provision of personal representation before the Department of Revenue and 4.30Internal Revenue Service. 5.1ARTICLE 2 5.2AIDS TO LOCAL GOVERNMENTS 5.3 Section 1. Minnesota Statutes 2006, section 477A.011, subdivision 34, is amended to 5.4read: 5.5 Subd. 34. City revenue need. (a) For a city with a population equal to or greater 5.6than 2,500, "city revenue need" is the sum of (1) 5.0734098 times the pre-1940 housing 5.7percentage; plus (2) 19.141678 times the population decline percentage; plus (3) 5.82504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the metropolitan 5.9area factor; minus (6) 49.10638 times the household size. 5.10 (b) For a city with a population less than 2,500, "city revenue need" is the sum of 5.11(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial 5.12industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4) 5.131.206 times the transformed population; minus (5) 62.772. 5.14 (c) For a city with a population of 2,500 or more and a population in one of the most 5.15recently available five years that was less than 2,500, "city revenue need" is the sum of (1) 5.16its city revenue need calculated under paragraph (a) multiplied by its transition factor; 5.17plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied 5.18by the difference between one and its transition factor. For purposes of this paragraph, a 5.19city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's 5.20population estimate has been 2,500 or more. This provision only applies for aids payable 5.21in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It 5.22applies to any city for aids payable in 2009 and thereafter. The city revenue need under 5.23this paragraph may not be less than 285. 5.24 (d) The city revenue need cannot be less than zero. 5.25 (e) For calendar year 2005 and subsequent years, the city revenue need for a city, 5.26as determined in paragraphs (a) to (d), is multiplied by the ratio of the annual implicit 5.27price deflator for government consumption expenditures and gross investment for state 5.28and local governments as prepared by the United States Department of Commerce, for 5.29the most recently available year to the 2003 implicit price deflator for state and local 5.30government purchases. 5.31EFFECTIVE DATE.This section is effective for aids payable in calendar year 5.322009 and thereafter. 5.33 Sec. 2. Minnesota Statutes 2006, section 477A.011, subdivision 36, as amended by 5.34Laws 2008, chapter 154, article 1, section 1, is amended to read: 6.1 Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision, 6.2"city aid base" is zero. 6.3 (b) The city aid base for any city with a population less than 500 is increased by 6.4$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount 6.5of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 6.6increased by $40,000 for aids payable in calendar year 1995 only, provided that: 6.7 (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent; 6.8 (ii) the city portion of the tax capacity rate exceeds 100 percent; and 6.9 (iii) its city aid base is less than $60 per capita. 6.10 (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and 6.11the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 6.12paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that: 6.13 (i) the city has a population in 1994 of 2,500 or more; 6.14 (ii) the city is located in a county, outside of the metropolitan area, which contains a 6.15city of the first class; 6.16 (iii) the city's net tax capacity used in calculating its 1996 aid under section 6.17477A.013 is less than $400 per capita; and 6.18 (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of 6.19property located in the city is classified as railroad property. 6.20 (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and 6.21the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 6.22paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that: 6.23 (i) the city was incorporated as a statutory city after December 1, 1993; 6.24 (ii) its city aid base does not exceed $5,600; and 6.25 (iii) the city had a population in 1996 of 5,000 or more. 6.26 (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the 6.27maximum amount of total aid it may receive under section 477A.013, subdivision 9, 6.28paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that: 6.29 (i) the city had a population in 1996 of at least 50,000; 6.30 (ii) its population had increased by at least 40 percent in the ten-year period ending 6.31in 1996; and 6.32 (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita. 6.33 (f) (e) The city aid base for a city is increased by $150,000 for aids payable in 6.342000 and thereafter, and the maximum amount of total aid it may receive under section 6.35477A.013, subdivision 9 , paragraph (c), is also increased by $150,000 in calendar year 6.362000 only, provided that: 7.1 (1) the city has a population that is greater than 1,000 and less than 2,500; 7.2 (2) its commercial and industrial percentage for aids payable in 1999 is greater 7.3than 45 percent; and 7.4 (3) the total market value of all commercial and industrial property in the city 7.5for assessment year 1999 is at least 15 percent less than the total market value of all 7.6commercial and industrial property in the city for assessment year 1998. 7.7 (g) (f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, 7.8and the maximum amount of total aid it may receive under section 477A.013, subdivision 7.99 , paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that: 7.10 (1) the city had a population in 1997 of 2,500 or more; 7.11 (2) the net tax capacity of the city used in calculating its 1999 aid under section 7.12477A.013 is less than $650 per capita; 7.13 (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under 7.14section 477A.013 is greater than 12 percent; 7.15 (4) the 1999 local government aid of the city under section 477A.013 is less than 7.1620 percent of the amount that the formula aid of the city would have been if the need 7.17increase percentage was 100 percent; and 7.18 (5) the city aid base of the city used in calculating aid under section 477A.013 7.19is less than $7 per capita. 7.20 (h) (g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, 7.21and the maximum amount of total aid it may receive under section 477A.013, subdivision 7.229 , paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that: 7.23 (1) the city has a population in 1997 of 2,000 or more; 7.24 (2) the net tax capacity of the city used in calculating its 1999 aid under section 7.25477A.013 is less than $455 per capita; 7.26 (3) the net levy of the city used in calculating 1999 aid under section 477A.013 is 7.27greater than $195 per capita; and 7.28 (4) the 1999 local government aid of the city under section 477A.013 is less than 7.2938 percent of the amount that the formula aid of the city would have been if the need 7.30increase percentage was 100 percent. 7.31 (i) (h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and 7.32the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 7.33paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that: 7.34 (1) the city has a population in 1998 that is greater than 200 but less than 500; 7.35 (2) the city's revenue need used in calculating aids payable in 2000 was greater 7.36than $200 per capita; 8.1 (3) the city net tax capacity for the city used in calculating aids available in 2000 8.2was equal to or less than $200 per capita; 8.3 (4) the city aid base of the city used in calculating aid under section 477A.013 8.4is less than $65 per capita; and 8.5 (5) the city's formula aid for aids payable in 2000 was greater than zero. 8.6 (j) (i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and 8.7the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 8.8paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that: 8.9 (1) the city had a population in 1998 that is greater than 200 but less than 500; 8.10 (2) the city's commercial industrial percentage used in calculating aids payable in 8.112000 was less than ten percent; 8.12 (3) more than 25 percent of the city's population was 60 years old or older according 8.13to the 1990 census; 8.14 (4) the city aid base of the city used in calculating aid under section 477A.013 8.15is less than $15 per capita; and 8.16 (5) the city's formula aid for aids payable in 2000 was greater than zero. 8.17 (k) (j) The city aid base for a city is increased by $45,000 in 2001 and thereafter 8.18and by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount 8.19of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 8.20increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002 8.21only, provided that: 8.22 (1) the net tax capacity of the city used in calculating its 2000 aid under section 8.23477A.013 is less than $810 per capita; 8.24 (2) the population of the city declined more than two percent between 1988 and 1998; 8.25 (3) the net levy of the city used in calculating 2000 aid under section 477A.013 is 8.26greater than $240 per capita; and 8.27 (4) the city received less than $36 per capita in aid under section 477A.013, 8.28subdivision 9 , for aids payable in 2000. 8.29 (l) (k) The city aid base for a city with a population of 10,000 or more which is 8.30located outside of the seven-county metropolitan area is increased in 2002 and thereafter, 8.31and the maximum amount of total aid it may receive under section 477A.013, subdivision 8.329 , paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to 8.33the lesser of: 8.34 (1)(i) the total population of the city, as determined by the United States Bureau of 8.35the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or 8.36 (2) $2,500,000. 9.1 (m) (l) The city aid base is increased by $50,000 in 2002 and thereafter, and the 9.2maximum amount of total aid it may receive under section 477A.013, subdivision 9, 9.3paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that: 9.4 (1) the city is located in the seven-county metropolitan area; 9.5 (2) its population in 2000 is between 10,000 and 20,000; and 9.6 (3) its commercial industrial percentage, as calculated for city aid payable in 2001, 9.7was greater than 25 percent. 9.8 (n) (m) The city aid base for a city is increased by $150,000 in calendar years 2002 9.9to 2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum 9.10amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is 9.11also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year 9.122009 only, provided that: 9.13 (1) the city had a population of at least 3,000 but no more than 4,000 in 1999; 9.14 (2) its home county is located within the seven-county metropolitan area; 9.15 (3) its pre-1940 housing percentage is less than 15 percent; and 9.16 (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 9.17per capita. 9.18 (o) (n) The city aid base for a city is increased by $200,000 beginning in calendar 9.19year 2003 and the maximum amount of total aid it may receive under section 477A.013, 9.20subdivision 9 , paragraph (c), is also increased by $200,000 in calendar year 2003 only, 9.21provided that the city qualified for an increase in homestead and agricultural credit aid 9.22under Laws 1995, chapter 264, article 8, section 18. 9.23 (p) (o) The city aid base for a city is increased by $200,000 in 2004 only and the 9.24maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 9.25also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear 9.26dry cask storage facility. 9.27 (q) (p) The city aid base for a city is increased by $10,000 in 2004 and thereafter 9.28and the maximum total aid it may receive under section 477A.013, subdivision 9, is also 9.29increased by $10,000 in calendar year 2004 only, if the city was included in a federal 9.30major disaster designation issued on April 1, 1998, and its pre-1940 housing stock was 9.31decreased by more than 40 percent between 1990 and 2000. 9.32 (r) (q) The city aid base for a city is increased by $30,000 in 2009 and thereafter 9.33and the maximum total aid it may receive under section 477A.013, subdivision 9, is also 9.34increased by $25,000 in calendar year 2006 only if the city had a population in 2003 9.35of at least 1,000 and has a state park for which the city provides rescue services and 10.1which comprised at least 14 percent of the total geographic area included within the 10.2city boundaries in 2000. 10.3 (s) The city aid base for a city with a population less than 5,000 is increased in 10.42006 and thereafter and the minimum and maximum amount of total aid it may receive 10.5under this section is also increased in calendar year 2006 only by an amount equal to 10.6$6 multiplied by its population. 10.7 (t) (r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and 10.8the minimum and maximum amount of total aid it may receive under section 477A.013, 10.9subdivision 9, is also increased by $80,000 in calendar year 2009 only, if: 10.10 (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed 10.11to be placed in trust status as tax-exempt Indian land; 10.12 (2) the placement of the land is being challenged administratively or in court; and 10.13 (3) due to the challenge, the land proposed to be placed in trust is still on the tax 10.14rolls as of May 1, 2006. 10.15 (u) (s) The city aid base for a city is increased by $100,000 in 2007 and thereafter 10.16and the minimum and maximum total amount of aid it may receive under this section is 10.17also increased in calendar year 2007 only, provided that: 10.18 (1) the city has a 2004 estimated population greater than 200 but less than 2,000; 10.19 (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita; 10.20 (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids 10.21payable in 2006 was greater than 110 percent; and 10.22 (4) it is located in a county where at least 15,000 acres of land are classified as 10.23tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property. 10.24 (v) (t) The city aid base for a city is increased by $30,000 in 2009 only, and the 10.25maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 10.26by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than 10.273,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities 10.28and one township in 2002. 10.29 (u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and 10.30the maximum total aid it may receive under section 477A.013, subdivision 9, is also 10.31increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for 10.32aids payable in 2007 of less than $150 per capita and the city experienced flooding on 10.33March 14, 2007, that resulted in evacuation of at least 40 homes. 10.34 (v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the 10.35maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 10.36by $100,000 in calendar year 2009 only, if the city: 11.1 (1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical 11.2area; 11.3 (2) has a 2005 population greater than 7,000 but less than 8,000; and 11.4 (3) has a 2005 net tax capacity per capita of less than $500. 11.5 (w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the 11.6maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 11.7increased by $25,000 in calendar year 2009 only, provided that: 11.8 (1) the city is located in the seven-county metropolitan area; 11.9 (2) its population in 2006 is less than 200; and 11.10 (3) the percentage of its housing stock built before 1940, according to the 2000 11.11United States Census, is greater than 40 percent. 11.12 (x) The city aid base is increased by $90,000 in calendar year 2009 only and the 11.13minimum and maximum total amount of aid it may receive under section 477A.013, 11.14subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the 11.15city is located in the seven-county metropolitan area, has a 2006 population between 5,000 11.16and 7,000 and has a 1997 population of over 7,000. 11.17EFFECTIVE DATE.This section is effective for aids payable in calendar year 11.182009 and thereafter. 11.19 Sec. 3. Minnesota Statutes 2006, section 477A.011, is amended by adding a 11.20subdivision to read: 11.21 Subd. 41. Small city aid base. (a) "Small city aid base" for a city with a population 11.22less than 5,000 is equal to $8.50 multiplied by its population. The small city aid base for 11.23all other cities is equal to zero. 11.24 (b) For calendar year 2010 and subsequent years, the small city aid base for a city, as 11.25determined in paragraph (a), is multiplied by the ratio of the appropriation under section 11.26477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under 11.27that section for aids payable in 2009. 11.28EFFECTIVE DATE.This section is effective for aids payable in calendar year 11.292009 and thereafter. 11.30 Sec. 4. Minnesota Statutes 2006, section 477A.011, is amended by adding a 11.31subdivision to read: 11.32 Subd. 42. City jobs base. (a) "City jobs base" for a city with a population of 5,000 11.33or more is equal to the product of (1) $25.20, (2) the number of jobs per capita in the 11.34city, and (3) its population. For cities with a population less than 5,000, the city jobs 12.1base is equal to zero. For a city receiving aid under section 477A.011, subdivision 36, 12.2paragraph (l), its city jobs base is reduced by the lesser of 36 percent of the amount of 12.3aid received under that paragraph or $1,000,000. No city's city jobs base may exceed 12.4$4,725,000 under this paragraph. 12.5 (b) For calendar year 2010 and subsequent years, the city jobs base for a city, as 12.6determined in paragraph (a), is multiplied by the ratio of the appropriation under section 12.7477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under 12.8that section for aids payable in 2009. 12.9 (c) For purposes of this subdivision, "jobs per capita in the city" means (1) the 12.10average annual number of employees in the city based on the data from the Quarterly 12.11Census of Employment and Wages, as reported by the Department of Employment and 12.12Economic Development, for the most recent calendar year available as of May 1, 2008, 12.13divided by (2) the city's population for the same calendar year as the employment data. 12.14The commissioner of the Department of Employment and Economic Development shall 12.15certify to the city the average annual number of employees for each city by June 1, 2008. 12.16A city may challenge an estimate under this paragraph by filing its specific objection, 12.17including the names of employers that it feels may have misreported data, in writing with 12.18the commissioner by June 20, 2008. The commissioner shall make every reasonable effort 12.19to address the specific objection and adjust the data as necessary. The commissioner shall 12.20certify the estimates of the annual employment to the commissioner of revenue by July 15, 12.212008, including any estimates still under objection. 12.22EFFECTIVE DATE.This section is effective for aids payable in calendar year 12.232009 and thereafter. 12.24 Sec. 5. Minnesota Statutes 2006, section 477A.011, is amended by adding a 12.25subdivision to read: 12.26 Subd. 43. Unmet need. "Unmet need" for a city is equal to the difference between 12.27(1) its city revenue need multiplied by its population, and (2) its city net tax capacity 12.28multiplied by the tax effort rate. 12.29EFFECTIVE DATE.This section is effective for aids payable in calendar year 12.302009 and thereafter. 12.31 Sec. 6. Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read: 12.32 Subd. 5. County transition aid. (a) For 2005, a county is eligible for transition 12.33aid equal to the amount, if any, by which: 12.34 (1) the difference between: 13.1 (i) the aid the county received under subdivision 1 in 2004, divided by the total aid 13.2paid to all counties under subdivision 1, multiplied by $205,000,000; and 13.3 (ii) the amount of aid the county is certified to receive in 2005 under subdivisions 13.43 and 4; 13.5exceeds: 13.6 (2) three percent of the county's adjusted net tax capacity. 13.7A county's aid under this paragraph may not be less than zero. 13.8 (b) In 2006, a county is eligible to receive two-thirds of the transition aid it received 13.9in 2005. 13.10 (c) In 2007, For 2009 and each year thereafter, a county is eligible to receive 13.11one-third of the transition aid it received in 2005 2007. 13.12 (d) No county shall receive aid under this subdivision after 2007. 13.13 (b) In 2009 only, a county with (1) a 2006 population less than 30,000, and (2) 13.14an average Part I crimes per capita greater than 3.9 percent based on factors used in 13.15determining county program aid payable in 2008, shall receive $100,000. 13.16EFFECTIVE DATE.This section is effective for aids payable in 2009 and 13.17thereafter. 13.18 Sec. 7. Minnesota Statutes 2006, section 477A.013, subdivision 8, as amended by 13.19Laws 2008, chapter 154, article 1, section 2, is amended to read: 13.20 Subd. 8. City formula aid. (a) In calendar year 2009, the formula aid for a city 13.21is equal to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need 13.22increase percentage multiplied by its unmet need. 13.23 (b) In calendar year 2004 2010 and subsequent years, the formula aid for a city is 13.24equal to the need increase percentage multiplied by the difference between (1) the city's 13.25revenue need multiplied by its population, and (2) the sum of the city's net tax capacity 13.26multiplied by the tax effort rate. the sum of (1) its city jobs base, (2) its small city aid 13.27base, and (3) the need increase percentage multiplied by the average of its unmet need 13.28for the most recently available two years. 13.29No city may have a formula aid amount less than zero. The need increase percentage 13.30must be the same for all cities. 13.31 The applicable need increase percentage must be calculated by the Department of 13.32Revenue so that the total of the aid under subdivision 9 equals the total amount available 13.33for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions 13.344 and 5 . For aids payable in 2009 only, all data used in calculating aid to cities under 13.35sections 477A.011 to 477A.013 will be based on the data available for calculating aid to 14.1cities for aids payable in 2008. For aids payable in 2010 and thereafter, data used in 14.2calculating aids to cities under sections 477A.011 to 477A.013 shall be the most recently 14.3available data as of January 1 in the year in which the aid is calculated. 14.4EFFECTIVE DATE.This section is effective for aids payable in calendar year 14.52009 and thereafter, provided that the appropriation increase for aids payable in 2009 14.6under section 477A.03, subdivision 2a, goes into effect. 14.7 Sec. 8. Minnesota Statutes 2006, section 477A.013, subdivision 9, as amended by 14.8Laws 2008, chapter 154, article 1, section 3, is amended to read: 14.9 Subd. 9. City aid distribution. (a) In calendar year 2009 and thereafter, each 14.10city shall receive an aid distribution equal to the sum of (1) the city formula aid under 14.11subdivision 8, and (2) its city aid base, and (3) one-half of the difference between its total 14.12aid in the previous year under this subdivision and its city aid base in the previous year. 14.13 (b) For aids payable in 2010 and thereafter, each city shall receive an aid distribution 14.14equal to (1) the city aid formula under subdivision 8, (2) its city aid base, and (3) its 14.15formula aid under subdivision 8 in the previous year, prior to any adjustments under 14.16this subdivision 2009 only, the total aid for any city shall not exceed the sum of (1) 35 14.17percent of the city's net levy for the year prior to the aid distribution, plus (2) its total 14.18aid in the previous year. 14.19 (c) For aids payable in 2009 2010 and thereafter, the total aid for any city shall 14.20not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid 14.21distribution plus (2) its total aid in the previous year. For aids payable in 2009 and 14.22thereafter, the total aid for any city with a population of 2,500 or more may not be less than 14.23its total aid under this section in the previous year minus the lesser of $15 $10 multiplied 14.24by its population, or ten percent of its net levy in the year prior to the aid distribution. 14.25 (d) For aids payable in 2009 2010 and thereafter, the total aid for a city with a 14.26population less than 2,500 must not be less than the amount it was certified to receive in 14.27the previous year minus the lesser of $15 $10 multiplied by its population, or five percent 14.28of its 2003 certified aid amount. For aids payable in 2009 only, the total aid for a city with 14.29a population less than 2,500 must not be less than what it received under this section in the 14.30previous year unless its total aid in calendar year 2008 was aid under section 477A.011, 14.31subdivision 36, paragraph (s), in which case its minimum aid is zero. 14.32 (e) A city's aid loss under this section may not exceed $300,000 in any year in 14.33which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or 14.34greater than the appropriation under that subdivision in the previous year, unless the 15.1city has an adjustment in its city net tax capacity under the process described in section 15.2469.174, subdivision 28. 15.3 (f) If a city's net tax capacity used in calculating aid under this section has decreased 15.4in any year by more than 25 percent from its net tax capacity in the previous year due to 15.5property becoming tax-exempt Indian land, the city's maximum allowed aid increase 15.6under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the 15.7year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 15.8resulting from the property becoming tax exempt. 15.9EFFECTIVE DATE.This section is effective for aids payable in calendar year 15.102009 and thereafter, provided that the appropriation increase for aids payable in 2009 15.11under section 477A.03, subdivision 2a, goes into effect. 15.12 Sec. 9. Minnesota Statutes 2006, section 477A.03, is amended to read: 15.13477A.03 APPROPRIATION. 15.14 Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed 15.15by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the 15.16commissioner of revenue. 15.17 Subd. 2a. Cities. For aids payable in 2004 2009 and thereafter, the total aids aid 15.18paid under section 477A.013, subdivision 9, are limited to $429,000,000 is $526,148,487, 15.19subject to adjustment in subdivision 5. For aids payable in 2005, the total aids paid under 15.20section 477A.013, subdivision 9, are limited to $437,052,000. For aids payable in 2006 15.21and thereafter, the total aids paid under section 477A.013, subdivision 9, is limited to 15.22$485,052,000. 15.23 Subd. 2b. Counties. (a) For aids payable in calendar year 2005 and thereafter, 15.24the total aids paid to counties under section 477A.0124, subdivision 3, are limited to 15.25$100,500,000. For aids payable in 2009 and thereafter, the total aid payable under section 15.26477A.0124, subdivision 3, is $111,500,000 minus one-half of the total aid amount 15.27determined under section 477A.0124, subdivision 5, paragraph (b), subject to adjustment 15.28in subdivision 5. Each calendar year, $500,000 shall be retained by the commissioner of 15.29revenue to make reimbursements to the commissioner of finance for payments made 15.30under section 611.27. For calendar year 2004, the amount shall be in addition to the 15.31payments authorized under section 477A.0124, subdivision 1. For calendar year 2005 15.32and subsequent years, the amount shall be deducted from the appropriation under 15.33this paragraph. The reimbursements shall be to defray the additional costs associated 15.34with court-ordered counsel under section 611.27. Any retained amounts not used for 16.1reimbursement in a year shall be included in the next distribution of county need aid 16.2that is certified to the county auditors for the purpose of property tax reduction for the 16.3next taxes payable year. 16.4 (b) For aids payable in 2005 2009 and thereafter, the total aids aid under section 16.5477A.0124, subdivision 4 , are limited to $105,000,000 is $116,132,923 minus one-half 16.6of the total aid amount determined under section 477A.0124, subdivision 5, paragraph 16.7(b), subject to adjustment in subdivision 5. For aids payable in 2006 and thereafter, 16.8the total aid under section 477A.0124, subdivision 4, is limited to $105,132,923. The 16.9commissioner of finance shall bill the commissioner of revenue for the cost of preparation 16.10of local impact notes as required by section 3.987, not to exceed $207,000 in fiscal year 16.112004 and thereafter. The commissioner of education shall bill the commissioner of 16.12revenue for the cost of preparation of local impact notes for school districts as required by 16.13section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner 16.14of revenue shall deduct the amounts billed under this paragraph from the appropriation 16.15under this paragraph. The amounts deducted are appropriated to the commissioner of 16.16finance and the commissioner of education for the preparation of local impact notes. 16.17 Subd. 5. Aid adjustments. For aids payable in 2010, the aid amounts contained 16.18in subdivisions 2a and 2b are increased by two percent. For aids payable in 2011 and 16.19thereafter, the aids amounts contained in subdivisions 2a and 2b are equal to 104 percent 16.20of the amounts for aids payable in 2010 under this section. 16.21EFFECTIVE DATE.This section is effective for aids payable in calendar year 16.222009 and thereafter. 16.23 Sec. 10. [477A.16] UTILITY VALUATION TRANSITION AID. 16.24 Subdivision 1. Definitions. (a) When used in this section, the following terms have 16.25the meanings indicated in this subdivision. 16.26 (b) "Local unit" means a home rule charter or statutory city, or a town. 16.27 (c) "Old rule utility net tax capacity" means the net tax capacity of all public utility 16.28property within the local unit's taxing jurisdiction for assessment year 2007, calculated as 16.29if the property were valued under valuation rules in effect prior to assessment year 2007. 16.30 (d) "New rule utility net tax capacity" means the net tax capacity of all public utility 16.31property within the local unit's taxing jurisdiction for assessment year 2007, calculated as 16.32if the property were valued under valuation rules in effect for assessment year 2007, but 16.33without the phase-in provisions of Minnesota Rules, part 8100.0800. 16.34 (e) "Modified net tax capacity" means the local unit's net tax capacity for taxes 16.35payable in 2008, modified by substituting the old rule utility net tax capacity for the actual 17.1net tax capacity of utility property. Modified net tax capacity must be determined by the 17.2commissioner of revenue based on information and data available to the commissioner 17.3as of July 1, 2008. 17.4 (f) "Net tax capacity differential" means the positive difference, if any, by which the 17.5local unit's old rule utility net tax capacity exceeds its new rule utility net tax capacity. 17.6 (g) "Current year net tax capacity differential" means the positive difference, if any, 17.7by which the local unit's old rule utility net tax capacity exceeds its total tax capacity of 17.8utility property for taxes payable in the current year. 17.9 Subd. 2. Aid eligibility; payment. (a) If the net tax capacity differential of the 17.10local unit exceeds four percent of its modified net tax capacity, the local unit is eligible 17.11for transition aid computed under paragraphs (b) and (c). 17.12 (b) For aids payable in 2009, transition aid under this section for an eligible local 17.13unit equals 50 percent of (1) the net tax capacity differential, times (2) the jurisdiction's 17.14tax rate for taxes payable in 2008. 17.15 (c) For aids payable in 2010 and thereafter, transition aid under this section for 17.16an eligible local unit equals (1) the current year net tax capacity differential for taxes 17.17payable in the year preceding the aid distribution year, times (2) the jurisdiction's tax rate 17.18for taxes payable in 2008. 17.19 (c) The commissioner of revenue shall compute the amount of transition aid payable 17.20to each local unit under this section. On or before August 1 of each year, the commissioner 17.21shall certify the amount of transition aid computed for aids payable in the following year 17.22for each recipient local unit. The commissioner shall pay transition aid to local units 17.23annually at the times provided in section 477A.015. 17.24 Subd. 3. Appropriation. An amount sufficient to pay transition aid under this 17.25section is annually appropriated to the commissioner of revenue from the general fund. 17.26EFFECTIVE DATE.This section is effective for aids payable in 2009 and 17.27thereafter. 17.28 Sec. 11. STATE PARKS LOCATED ON LAKE VERMILION; DISTRIBUTION 17.29OF PAYMENTS IN LIEU OF TAXES. 17.30 (a) Notwithstanding Minnesota Statutes, section 477A.14, payments in lieu of 17.31taxation under Minnesota Statutes, sections 477A.11 to 477A.145, for the land included 17.32in any state park located in whole or in part on the shores of Lake Vermilion must be 17.33distributed to the taxing jurisdictions containing the property as follows: one-third to the 17.34school district, one-third to the township, and one-third to the county. Each of those taxing 17.35jurisdictions may use the payments for their general purposes. 18.1 (b) Notwithstanding Minnesota Statutes, section 477A.11, the payments for all lands 18.2described in paragraph (a) must be made at the rate set for acquired natural resources land. 18.3 Sec. 12. STUDY OF AIDS TO LOCAL GOVERNMENTS. 18.4 The chairs of the senate and house of representatives committees with jurisdiction 18.5over taxes shall each appoint five members to a study group of the tax committees to 18.6examine the current system of aids to local governments and make recommendations on 18.7improvements to the system. Of the five members appointed by each chair, two must be 18.8members of the tax committee, one of whom is a majority party member and one of 18.9whom is a minority party member. The remaining members must represent local units of 18.10government. The chairs of the divisions of the tax committees having jurisdiction over 18.11property taxes shall also be members and shall serve as cochairs of the study group. 18.12The study shall include, but not be limited to, consideration of existing disparities in 18.13the distribution of local government aid, an analysis of current law need and capacity 18.14factors as well as alternative need factors, alternative analytical methods for determining 18.15correlations between factors and need, the formula used to calculate aid for small cities, 18.16and volatility in the local government aid distribution. The group must report on its 18.17specific recommendations to the legislature by December 15, 2010. 18.18EFFECTIVE DATE.This section is effective the day following final enactment. 18.19 Sec. 13. OUT-OF-HOME PLACEMENT AID. 18.20 In calendar year 2009 only, $500,000 shall be distributed to any county in which (1) 18.21the 2006 estimated population exceeds 30,000, and (2) the 2006 percentage of households 18.22receiving food stamps exceeds 15 percent, based on data used in computing county 18.23program aids for aids payable in 2008 and the 2006 estimated household count according 18.24to the state demographer. The aid must be used to meet the county's cost of out-of-home 18.25placement programs. $500,000 is appropriated to the commissioner of revenue from 18.26the general fund to make the payment authorized under this section. The payment must 18.27be made prior to June 30, 2009. 18.28EFFECTIVE DATE.This section is effective the day following final enactment. 18.29 Sec. 14. REPEALER. 18.30Minnesota Statutes 2006, section 477A.014, subdivision 5, and Minnesota Statutes 18.312007 Supplement, section 477A.014, subdivision 4, are repealed. 18.32EFFECTIVE DATE.This section is effective for aid payable in 2009 and thereafter. 19.1ARTICLE 3 19.2LEVY LIMITS 19.3 Section 1. Minnesota Statutes 2006, section 275.70, subdivision 5, is amended to read: 19.4 Subd. 5. Special levies. "Special levies" means those portions of ad valorem taxes 19.5levied by a local governmental unit for the following purposes or in the following manner: 19.6 (1) to pay the costs of the principal and interest on bonded indebtedness or to 19.7reimburse for the amount of liquor store revenues used to pay the principal and interest 19.8due on municipal liquor store bonds in the year preceding the year for which the levy 19.9limit is calculated; 19.10 (2) to pay the costs of principal and interest on certificates of indebtedness issued for 19.11any corporate purpose except for the following: 19.12 (i) tax anticipation or aid anticipation certificates of indebtedness; 19.13 (ii) certificates of indebtedness issued under sections 298.28 and 298.282; 19.14 (iii) certificates of indebtedness used to fund current expenses or to pay the costs of 19.15extraordinary expenditures that result from a public emergency; or 19.16 (iv) certificates of indebtedness used to fund an insufficiency in tax receipts or 19.17an insufficiency in other revenue sources; 19.18 (3) to provide for the bonded indebtedness portion of payments made to another 19.19political subdivision of the state of Minnesota; 19.20 (4) to fund payments made to the Minnesota State Armory Building Commission 19.21under section 193.145, subdivision 2, to retire the principal and interest on armory 19.22construction bonds; 19.23 (5) property taxes approved by voters which are levied against the referendum 19.24market value as provided under section 275.61; 19.25 (6) to fund matching requirements needed to qualify for federal or state grants or 19.26programs to the extent that either (i) the matching requirement exceeds the matching 19.27requirement in calendar year 2001, or (ii) it is a new matching requirement that did not 19.28exist prior to 2002; 19.29 (7) to pay the expenses reasonably and necessarily incurred in preparing for or 19.30repairing the effects of natural disaster including the occurrence or threat of widespread 19.31or severe damage, injury, or loss of life or property resulting from natural causes, in 19.32accordance with standards formulated by the Emergency Services Division of the state 19.33Department of Public Safety, as allowed by the commissioner of revenue under section 19.34275.74, subdivision 2 ; 20.1 (8) pay amounts required to correct an error in the levy certified to the county 20.2auditor by a city or county in a levy year, but only to the extent that when added to the 20.3preceding year's levy it is not in excess of an applicable statutory, special law or charter 20.4limitation, or the limitation imposed on the governmental subdivision by sections 275.70 20.5to 275.74 in the preceding levy year; 20.6 (9) to pay an abatement under section 469.1815; 20.7 (10) to pay any costs attributable to increases in the employer contribution rates 20.8under chapter 353, or locally administered pension plans, that are effective after June 20.930, 2001; 20.10 (11) to pay the operating or maintenance costs of a county jail as authorized in 20.11section 641.01 or 641.262, or of a correctional facility as defined in section 241.021, 20.12subdivision 1 , paragraph (f), to the extent that the county can demonstrate to the 20.13commissioner of revenue that the amount has been included in the county budget as 20.14a direct result of a rule, minimum requirement, minimum standard, or directive of the 20.15Department of Corrections, or to pay the operating or maintenance costs of a regional jail 20.16as authorized in section 641.262. For purposes of this clause, a district court order is 20.17not a rule, minimum requirement, minimum standard, or directive of the Department of 20.18Corrections. If the county utilizes this special levy, except to pay operating or maintenance 20.19costs of a new regional jail facility under sections 641.262 to 641.264 which will not 20.20replace an existing jail facility, any amount levied by the county in the previous levy year 20.21for the purposes specified under this clause and included in the county's previous year's 20.22levy limitation computed under section 275.71, shall be deducted from the levy limit 20.23base under section 275.71, subdivision 2, when determining the county's current year 20.24levy limitation. The county shall provide the necessary information to the commissioner 20.25of revenue for making this determination; 20.26 (12) to pay for operation of a lake improvement district, as authorized under section 20.27103B.555 . If the county utilizes this special levy, any amount levied by the county in the 20.28previous levy year for the purposes specified under this clause and included in the county's 20.29previous year's levy limitation computed under section 275.71 shall be deducted from 20.30the levy limit base under section 275.71, subdivision 2, when determining the county's 20.31current year levy limitation. The county shall provide the necessary information to the 20.32commissioner of revenue for making this determination; 20.33 (13) to repay a state or federal loan used to fund the direct or indirect required 20.34spending by the local government due to a state or federal transportation project or other 20.35state or federal capital project. This authority may only be used if the project is not a 20.36local government initiative; 21.1 (14) to pay for court administration costs as required under section 273.1398, 21.2subdivision 4b , less the (i) county's share of transferred fines and fees collected by the 21.3district courts in the county for calendar year 2001 and (ii) the aid amount certified to be 21.4paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes 21.5levied to pay for these costs in the year in which the court financing is transferred to the 21.6state, the amount under this clause is limited to the amount of aid the county is certified to 21.7receive under section 273.1398, subdivision 4a; 21.8 (15) to fund a police or firefighters relief association as required under section 69.77 21.9to the extent that the required amount exceeds the amount levied for this purpose in 2001; 21.10 (16) for purposes of a storm sewer improvement district under section 444.20; and 21.11 (17) to pay for the maintenance and support of a city or county society for the 21.12prevention of cruelty to animals under section 343.11. If the city or county uses this 21.13special levy, any amount levied by the city or county in the previous levy year for the 21.14purposes specified in this clause and included in the city's or county's previous year's levy 21.15limit computed under section 275.71, must be deducted from the levy limit base under 21.16section 275.71, subdivision 2, in determining the city's or county's current year levy limit.; 21.17 (18) for counties, to pay for the increase in their share of health and human service 21.18costs caused by reductions in federal health and human services grants effective after 21.19September 30, 2007; 21.20 (19) for a city, for the costs reasonably and necessarily incurred for securing, 21.21maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by 21.22the commissioner of revenue under section 275.74, subdivision 2. A city must have either 21.23(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in 21.24the city or in a zip code area of the city that is at least 50 percent higher than the average 21.25foreclosure rate in the metropolitan area, as defined in Minnesota Statutes section 473.121, 21.26subdivision 2, to use this special levy. For purposes of this paragraph, "foreclosure rate" 21.27means the number of foreclosures, as indicated by sheriff sales records, divided by the 21.28number of households in the city in 2007; 21.29 (20) for a city, for the unreimbursed costs of redeployed traffic control agents and 21.30lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified 21.31to the Federal Highway Administration; 21.32 (21) to pay costs attributable to wages and benefits for sheriff, police, and fire 21.33personnel. If a local governmental unit did not use this special levy in the previous year its 21.34levy limit base under section 275.71 shall be reduced by the amount equal to the amount it 21.35levied for the purposes specified in this clause in the previous year; and 22.1 (22) an amount equal to any reductions in the certified aids or credits payable 22.2under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under 22.3section 16A.152. The amount of the levy allowed under this clause is equal to the amount 22.4unallotted in the calendar year in which the tax is levied unless the unallotment amount is 22.5not known by September 1 of the levy year, in which case the unallotment amount may 22.6be levied in the following year. 22.7EFFECTIVE DATE.This section is effective for taxes levied in calendar year 2008 22.8and thereafter, payable in 2009 and thereafter. 22.9 Sec. 2. Minnesota Statutes 2006, section 275.70, is amended by adding a subdivision 22.10to read: 22.11 Subd. 6. Levy aid base. "Levy aid base" for a local governmental unit for a levy 22.12year means its total levy spread on net tax capacity, minus any amounts that would 22.13qualify as a special levy under section 275.70, plus the sum of (1) the total amount of 22.14aids and reimbursements that the local governmental unit is certified to receive under 22.15sections to in the same year, (2) taconite aids under sections 22.16and in the same year, including any aid which was required to be placed in a 22.17special fund for expenditure in the next succeeding year, and (3) payments to the local 22.18governmental unit under section in the same year, adjusted for any error in 22.19estimation in the preceding year. 22.20EFFECTIVE DATE.This section is effective for levies certified in calendar year 22.212008, payable in calendar year 2009 and thereafter. 22.22 Sec. 3. Minnesota Statutes 2006, section 275.71, is amended to read: 22.23275.71 LEVY LIMITS. 22.24 Subdivision 1. Limit on levies. Notwithstanding any other provision of law or 22.25municipal charter to the contrary which authorize ad valorem taxes in excess of the limits 22.26established by sections 275.70 to 275.74, the provisions of this section apply to local 22.27governmental units for all purposes other than those for which special levies and special 22.28assessments are made. 22.29 Subd. 2. Levy limit base. (a) The levy limit base for a local governmental unit for 22.30taxes levied in 2003 is equal to its adjusted levy limit base in the previous year, subject 22.31to any adjustments under section , plus any aid amounts received in 2003 under 22.32section or , minus the difference between its levy limit under subdivision 22.335 for taxes levied in 2002 and the amount it actually levied under that subdivision in that 23.1year, and certified property tax replacement aid payable in 2003 under section . 23.22008 is its levy aid base from the previous year, subject to any adjustments under section 23.3275.72. For taxes levied in 2009 and 2010, the levy limit base for a local governmental 23.4unit is its adjusted levy limit base in the previous year, subject to any adjustments under 23.5section 275.72. 23.6 Subd. 3. Adjustments for state takeovers. (a) The levy limit base for each local 23.7unit of government shall be adjusted to reflect the assumption by the state of financing for 23.8certain government functions as indicated in this subdivision. 23.9 (b) For a county in a judicial district for which financing has not been transferred 23.10to the state by January 1, 2001, the levy limit base for 2001 is permanently reduced by 23.11the amount of the county's 2001 budget for court administration costs, as certified under 23.12section 273.1398, subdivision 4b, paragraph (b), net of the county's share of transferred 23.13fines and fees collected by the district courts in the county for the same budget period. 23.14 (c) For a governmental unit which levied a tax in 2000 under section 473.388, 23.15subdivision 7 , the levy limit base for 2001 is permanently reduced by an amount equal 23.16to the sum of the governmental unit's taxes payable 2001 nondebt transit services levy 23.17plus the portion of its 2001 homestead and agricultural credit aid under section 273.1398, 23.18subdivision 2 , attributable to nondebt transit services. 23.19 (d) For counties in a judicial district in which the state assumed financing of 23.20mandated services costs as defined in section 480.181, subdivision 4, on July 1, 2001, the 23.21levy limit base for taxes levied in 2001 is permanently reduced by an amount equal to 23.22one-half of the aid reduction under section 273.1398, subdivision 4a, paragraph (g). 23.23 Subd. 4. Adjusted levy limit base. (a) For taxes levied in 2003 2008 through 2010, 23.24the adjusted levy limit base is equal to the levy limit base computed under subdivisions 2 23.25and 3 subdivision 2 or section 275.72, reduced by 40 percent of the difference between 23.26(1) the sum of 2003 certified aid payments, under sections , except for 23.27amounts certified under subdivision 4a, paragraph (b), , to , 23.28, and , before any reduction under Laws 2003, First Special Session 23.29chapter 21, articles 5 and 6, and (2) the sum of the aids paid in 2004 under those same 23.30sections, after any reductions in 2004 under Laws 2003, First Special Session chapter 21, 23.31articles 5 and 6. multiplied by: 23.32 (1) one plus the lessor of 3.9 percent or the percentage growth in the implicit price 23.33deflator; 23.34 (2) one plus a percentage equal to 50 percent of the percentage increase in the number 23.35of households, if any, for the most recent 12-month period for which data is available; and 24.1 (3) one plus a percentage equal to 50 percent of the percentage increase in the 24.2taxable market value of the jurisdiction due to new construction of class 3 property, as 24.3defined in section 273.13, subdivision 4, except for state-assessed utility and railroad 24.4property, for the most recent year for which data is available. 24.5 (b) For taxes levied in 2003 only, the adjusted levy limit base is increased by 60 24.6percent of the difference between a jurisdiction's market value credit in 2003 before any 24.7reductions under Laws 2003, First Special Session chapter 21, articles 5 and 6, and its 24.8market value credit in 2004 after reductions in Laws 2003, First Special Session chapter 24.921, articles 5 and 6. 24.10 Subd. 5. Property tax levy limit. For taxes levied in 2003 2008 through 2010, the 24.11property tax levy limit for a local governmental unit is equal to its adjusted levy limit 24.12base determined under subdivision 4 plus any additional levy authorized under section 24.13275.73 , which is levied against net tax capacity, reduced by the sum of (i) the total amount 24.14of aids and reimbursements that the local governmental unit is certified to receive under 24.15sections 477A.011 to 477A.014, except for the increases in city aid bases in calendar 24.16year 2002 under section 477A.011, subdivision 36, paragraphs (l), (n), and (o), (ii) 24.17homestead and agricultural aids it is certified to receive under section , (iii) (ii) 24.18taconite aids under sections 298.28 and 298.282 including any aid which was required to 24.19be placed in a special fund for expenditure in the next succeeding year, (iv) temporary 24.20court aid under section 273.1398, subdivision 4a, and (v) (iii) estimated payments to the 24.21local governmental unit under section 272.029, adjusted for any error in estimation in the 24.22preceding year, and (iv) aids under section 477A.16. 24.23 Subd. 6. Levies in excess of levy limits. If the levy made by a city or county 24.24exceeds the levy limit provided in sections 275.70 to 275.74, except when the excess 24.25levy is due to the rounding of the rate in accordance with section 275.28, the county 24.26auditor shall only extend the amount of taxes permitted under sections 275.70 to 275.74, 24.27as provided for in section 275.16. 24.28EFFECTIVE DATE.This section is effective for levies certified in calendar years 24.292008 through 2010, payable in 2009 through 2011. 24.30 Sec. 4. Minnesota Statutes 2006, section 275.74, subdivision 2, is amended to read: 24.31 Subd. 2. Authorization for special levies. (a) A local governmental unit may 24.32request authorization to levy for unreimbursed costs for natural disasters under section 24.33275.70, subdivision 5 , clause (7). The local governmental unit shall submit a request to 24.34levy under section 275.70, subdivision 5, clause (7), to the commissioner of revenue by 25.1September 30 of the levy year and the request must include information documenting the 25.2estimated unreimbursed costs. The commissioner of revenue may grant levy authority, 25.3up to the amount requested based on the documentation submitted. All decisions of the 25.4commissioner are final. 25.5 (b) A city may request authorization to levy for reasonable and necessary costs for 25.6securing, maintaining, or demolishing foreclosed or abandoned residential properties 25.7under section 275.70, subdivision 5, clause (19). The local governmental unit shall submit 25.8a request to levy under section 275.70, subdivision 5, clause (19), to the commissioner 25.9of revenue by September 30 of the levy year and the request must include information 25.10documenting the estimated costs. For taxes payable in 2009, the amount may include 25.11unanticipated costs incurred above the amount budgeted for these purposes in 2008. Costs 25.12of securing foreclosed or abandoned residential properties include payment for police and 25.13fire department services. The commissioner of revenue may grant levy authority, up to the 25.14lesser of (1) the amount requested based on the documentation submitted, or (2) $3,000 25.15multiplied by the number of foreclosed residential properties, as defined by sheriff sales 25.16records, in calendar year 2007. All decisions of the commissioner are final. 25.17EFFECTIVE DATE.This section is effective for levies certified in 2008 through 25.182010, payable in 2009 through 2011. 25.19 Sec. 5. [275.76] MAINTENANCE OF EFFORT AND MATCHING 25.20REQUIREMENTS SUSPENDED. 25.21 Notwithstanding any law to the contrary, all maintenance of effort and matching 25.22fund requirements for counties, including, but not limited to, those under sections 25.23116L.872, 119B.11, 134.34, 145A.131, 145.882, 242.39, 245.4835, 245.714, 254B.02, 25.24254B.03, 256B.0625, 256F.10, and 256F.13, are suspended for the taxes payable years that 25.25levy limits are in effect. 25.26ARTICLE 4 25.27INCOME AND ESTATE TAXES 25.28 Section 1. Minnesota Statutes 2006, section 289A.19, subdivision 2, is amended to 25.29read: 25.30 Subd. 2. Corporate franchise and mining company taxes. Corporations or mining 25.31companies shall receive an extension of seven months or the amount of time granted by 25.32the Internal Revenue Service, whichever is longer, for filing the return of a corporation 25.33subject to tax under chapter 290 or for filing the return of a mining company subject to 25.34tax under sections 298.01 and 298.015. Interest on any balance of tax not paid when the 26.1regularly required return is due must be paid at the rate specified in section 270C.40, 26.2from the date such payment should have been made if no extension was granted, until 26.3the date of payment of such tax. 26.4 If a corporation or mining company does not: 26.5 (1) pay at least 90 percent of the amount of tax shown on the return on or before the 26.6regular due date of the return, the penalty prescribed by section 289A.60, subdivision 1, 26.7shall be imposed on the unpaid balance of tax; or 26.8 (2) pay the balance due shown on the regularly required return on or before the 26.9extended due date of the return, the penalty prescribed by section 289A.60, subdivision 1, 26.10shall be imposed on the unpaid balance of tax from the original due date of the return. 26.11EFFECTIVE DATE.This section is effective the day following final enactment 26.12and applies to any federal extension that allows filing after that date. 26.13 Sec. 2. Minnesota Statutes 2006, section 289A.19, is amended by adding a subdivision 26.14to read: 26.15 Subd. 7. Federal extensions. When an extension of time to file a partnership or 26.16S corporation tax return is granted by the Internal Revenue Service, the commissioner 26.17shall grant an automatic extension to file the comparable Minnesota return for that period. 26.18An extension granted under this subdivision does not affect the due date for making 26.19payments of tax. 26.20EFFECTIVE DATE.This section is effective the day following final enactment 26.21and applies to any federal extension that allows filing after that date. 26.22 Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read: 26.23 Subd. 6b. Foreign operating corporation. The term "foreign operating 26.24corporation," when applied to a corporation, means a domestic corporation with the 26.25following characteristics: 26.26 (1) it is part of a unitary business at least one member of which is taxable in this state; 26.27 (2) it is not a foreign sales corporation under section 922 of the Internal Revenue 26.28Code, as amended through December 31, 1999, for the taxable year; 26.29 (3) it is not an interest charge domestic international sales corporation under sections 26.30992, 993, 994, and 995 of the Internal Revenue Code; 26.31 (4) either (i) the average of the percentages of its property and payrolls, including 26.32the pro rata share of its unitary partnerships' property and payrolls, assigned to locations 26.33outside the United States, where the United States includes the District of Columbia and 26.34excludes the commonwealth of Puerto Rico and possessions of the United States, as 27.1determined under section or , is 80 percent or more; or (ii) it has in effect a 27.2valid election under section 936 of the Internal Revenue Code; or (ii) at least 80 percent 27.3of the gross income from all sources of the corporation in the tax year is active foreign 27.4business income; and 27.5 (4) it has $1,000,000 of payroll and $2,000,000 of property, as determined under 27.6section or , that are located outside the United States. If the domestic 27.7corporation does not have payroll as determined under section or , but it 27.8or its partnerships have paid $1,000,000 for work, performed directly for the domestic 27.9corporation or the partnerships, outside the United States, then paragraph (3)(i) shall not 27.10require payrolls to be included in the average calculation 27.11 (5) for purposes of this subdivision, active foreign business income means gross 27.12income that is (i) derived from sources without the United States, as defined in subtitle A, 27.13chapter 1, subchapter N, part 1, of the Internal Revenue Code; and (ii) attributable to the 27.14active conduct of a trade or business in a foreign country. 27.15EFFECTIVE DATE.This section is effective for taxable years beginning after 27.16December 31, 2007. 27.17 Sec. 4. Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, as 27.18amended by Laws 2008, chapter 154, article 3, section 3, is amended to read: 27.19 Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 27.20and trusts, there shall be subtracted from federal taxable income: 27.21 (1) net interest income on obligations of any authority, commission, or 27.22instrumentality of the United States to the extent includable in taxable income for federal 27.23income tax purposes but exempt from state income tax under the laws of the United States; 27.24 (2) if included in federal taxable income, the amount of any overpayment of income 27.25tax to Minnesota or to any other state, for any previous taxable year, whether the amount 27.26is received as a refund or as a credit to another taxable year's income tax liability; 27.27 (3) the amount paid to others, less the amount used to claim the credit allowed under 27.28section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 27.29to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 27.30transportation of each qualifying child in attending an elementary or secondary school 27.31situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 27.32resident of this state may legally fulfill the state's compulsory attendance laws, which 27.33is not operated for profit, and which adheres to the provisions of the Civil Rights Act 27.34of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 27.35tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 28.1"textbooks" includes books and other instructional materials and equipment purchased 28.2or leased for use in elementary and secondary schools in teaching only those subjects 28.3legally and commonly taught in public elementary and secondary schools in this state. 28.4Equipment expenses qualifying for deduction includes expenses as defined and limited in 28.5section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 28.6books and materials used in the teaching of religious tenets, doctrines, or worship, the 28.7purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 28.8or materials for, or transportation to, extracurricular activities including sporting events, 28.9musical or dramatic events, speech activities, driver's education, or similar programs. For 28.10purposes of the subtraction provided by this clause, "qualifying child" has the meaning 28.11given in section 32(c)(3) of the Internal Revenue Code; 28.12 (4) income as provided under section 290.0802; 28.13 (5) to the extent included in federal adjusted gross income, income realized on 28.14disposition of property exempt from tax under section 290.491; 28.15 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 28.16of the Internal Revenue Code in determining federal taxable income by an individual 28.17who does not itemize deductions for federal income tax purposes for the taxable year, an 28.18amount equal to 50 percent of the excess of charitable contributions over $500 allowable 28.19as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 28.20under the provisions of Public Law 109-1; 28.21 (7) for taxable years beginning before January 1, 2008, the amount of the federal 28.22small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 28.23which is included in gross income under section 87 of the Internal Revenue Code; 28.24 (8) for individuals who are allowed a federal foreign tax credit for taxes that do not 28.25qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 28.26of subnational foreign taxes for the taxable year, but not to exceed the total subnational 28.27foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 28.28"federal foreign tax credit" means the credit allowed under section 27 of the Internal 28.29Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 28.30under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 28.31the extent they exceed the federal foreign tax credit; 28.32 (9) in each of the five tax years immediately following the tax year in which an 28.33addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 28.34of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 28.35of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 28.36the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 29.1subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 29.2positive value of any net operating loss under section 172 of the Internal Revenue Code 29.3generated for the tax year of the addition. The resulting delayed depreciation cannot be 29.4less than zero; 29.5 (10) job opportunity building zone income as provided under section 469.316; 29.6 (11) to the extent included in federal taxable income, the amount of compensation 29.7paid to members of the Minnesota National Guard or other reserve components of the 29.8United States military for active service performed in Minnesota, excluding compensation 29.9for services performed under the Active Guard Reserve (AGR) program. For purposes of 29.10this clause, "active service" means (i) state active service as defined in section 190.05, 29.11subdivision 5a , clause (1); (ii) federally funded state active service as defined in section 29.12190.05, subdivision 5b ; or (iii) federal active service as defined in section 190.05, 29.13subdivision 5c , but "active service" excludes services performed exclusively for purposes 29.14of basic combat training, advanced individual training, annual training, and periodic 29.15inactive duty training; special training periodically made available to reserve members; 29.16and service performed in accordance with section 190.08, subdivision 3; 29.17 (12) to the extent included in federal taxable income, the amount of compensation 29.18paid to Minnesota residents who are members of the armed forces of the United States or 29.19United Nations for active duty performed outside Minnesota under United States Code, 29.20title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 29.21the United Nations; 29.22 (13) an amount, not to exceed $10,000, equal to qualified expenses related to a 29.23qualified donor's donation, while living, of one or more of the qualified donor's organs 29.24to another person for human organ transplantation. For purposes of this clause, "organ" 29.25means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 29.26"human organ transplantation" means the medical procedure by which transfer of a human 29.27organ is made from the body of one person to the body of another person; "qualified 29.28expenses" means unreimbursed expenses for both the individual and the qualified donor 29.29for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 29.30may be subtracted under this clause only once; and "qualified donor" means the individual 29.31or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 29.32individual may claim the subtraction in this clause for each instance of organ donation for 29.33transplantation during the taxable year in which the qualified expenses occur; 29.34 (14) in each of the five tax years immediately following the tax year in which an 29.35addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 29.36shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 30.1addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 30.2case of a shareholder of a corporation that is an S corporation, minus the positive value of 30.3any net operating loss under section 172 of the Internal Revenue Code generated for the 30.4tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 30.5subtraction is not allowed under this clause; 30.6 (15) to the extent included in federal taxable income, compensation paid to a 30.7nonresident who is a service member as defined in United States Code, title 10, section 30.8101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 30.9Law 108-189, section 101(2); and 30.10 (16) international economic development zone income as provided under section 30.11469.325 ; and 30.12 (17) to the extent included in federal taxable income, the amount of national service 30.13educational awards received from the National Service Trust under United States Code, 30.14title 42, sections 12601 to 12604, for service in an approved Americorps National Service 30.15program. 30.16EFFECTIVE DATE.This section is effective for tax years beginning after 30.17December 31, 2008, except clause (17) is effective for tax years beginning after December 30.1831, 2007. 30.19 Sec. 5. Minnesota Statutes 2006, section 290.01, subdivision 19c, as amended by Laws 30.202008, chapter 154, article 3, section 4, is amended to read: 30.21 Subd. 19c. Corporations; additions to federal taxable income. For corporations, 30.22there shall be added to federal taxable income: 30.23 (1) the amount of any deduction taken for federal income tax purposes for income, 30.24excise, or franchise taxes based on net income or related minimum taxes, including but not 30.25limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 30.26another state, a political subdivision of another state, the District of Columbia, or any 30.27foreign country or possession of the United States; 30.28 (2) interest not subject to federal tax upon obligations of: the United States, its 30.29possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 30.30state, any of its political or governmental subdivisions, any of its municipalities, or any 30.31of its governmental agencies or instrumentalities; the District of Columbia; or Indian 30.32tribal governments; 30.33 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 30.34Revenue Code; 31.1 (4) the amount of any net operating loss deduction taken for federal income tax 31.2purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 31.3deduction under section 810 of the Internal Revenue Code; 31.4 (5) the amount of any special deductions taken for federal income tax purposes 31.5under sections 241 to 247 and 965 of the Internal Revenue Code; 31.6 (6) losses from the business of mining, as defined in section 290.05, subdivision 1, 31.7clause (a), that are not subject to Minnesota income tax; 31.8 (7) the amount of any capital losses deducted for federal income tax purposes under 31.9sections 1211 and 1212 of the Internal Revenue Code; 31.10 (8) the exempt foreign trade income of a foreign sales corporation under sections 31.11921(a) and 291 of the Internal Revenue Code; 31.12 (9) the amount of percentage depletion deducted under sections 611 through 614 and 31.13291 of the Internal Revenue Code; 31.14 (10) for certified pollution control facilities placed in service in a taxable year 31.15beginning before December 31, 1986, and for which amortization deductions were elected 31.16under section 169 of the Internal Revenue Code of 1954, as amended through December 31.1731, 1985, the amount of the amortization deduction allowed in computing federal taxable 31.18income for those facilities; 31.19 (11) the amount of any deemed dividend from a foreign operating corporation 31.20determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 31.21shall be reduced by the amount of the addition to income required by clauses (20), (21), 31.22(22), and (23); 31.23 (12) the amount of a partner's pro rata share of net income which does not flow 31.24through to the partner because the partnership elected to pay the tax on the income under 31.25section 6242(a)(2) of the Internal Revenue Code; 31.26 (13) the amount of net income excluded under section 114 of the Internal Revenue 31.27Code; 31.28 (14) any increase in subpart F income, as defined in section 952(a) of the Internal 31.29Revenue Code, for the taxable year when subpart F income is calculated without regard 31.30to the provisions of section 103 of Public Law 109-222; 31.31 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 31.32and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 31.33has an activity that in the taxable year generates a deduction for depreciation under 31.34section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 31.35that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 31.36under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 32.1depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 32.2amount of the loss from the activity that is not allowed in the taxable year. In succeeding 32.3taxable years when the losses not allowed in the taxable year are allowed, the depreciation 32.4under section 168(k)(1)(A) and (k)(4)(A) is allowed; 32.5 (16) 80 percent of the amount by which the deduction allowed by section 179 of the 32.6Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 32.7Revenue Code of 1986, as amended through December 31, 2003; 32.8 (17) to the extent deducted in computing federal taxable income, the amount of the 32.9deduction allowable under section 199 of the Internal Revenue Code; 32.10 (18) the exclusion allowed under section 139A of the Internal Revenue Code for 32.11federal subsidies for prescription drug plans; and 32.12 (19) the amount of expenses disallowed under section 290.10, subdivision 2; 32.13 (20) an amount equal to the interest and intangible expenses, losses, and costs paid, 32.14accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 32.15of a corporation that is a member of the taxpayer's unitary business group that qualifies 32.16as a foreign operating corporation. For purposes of this clause, intangible expenses and 32.17costs include: 32.18 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 32.19use, maintenance or management, ownership, sale, exchange, or any other disposition of 32.20intangible property; 32.21 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting 32.22transactions; 32.23 (iii) royalty, patent, technical, and copyright fees; 32.24 (iv) licensing fees; and 32.25 (v) other similar expenses and costs. 32.26For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 32.27applications, trade names, trademarks, service marks, copyrights, mask works, trade 32.28secrets, and similar types of intangible assets. 32.29This clause does not apply to any item of interest or intangible expenses or costs paid, 32.30accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 32.31to such item of income to the extent that the income to the foreign operating corporation 32.32is income from sources without the United States as defined in subtitle A, chapter 1, 32.33subchapter N, part 1, of the Internal Revenue Code; 32.34 (21) except as already included in the taxpayer's taxable income pursuant to clause 32.35(20), any interest income and income generated from intangible property received or 33.1accrued by a foreign operating corporation that is a member of the taxpayer's unitary 33.2group. For purposes of this clause, income generated from intangible property includes: 33.3 (i) income related to the direct or indirect acquisition, use, maintenance or 33.4management, ownership, sale, exchange, or any other disposition of intangible property; 33.5 (ii) income from factoring transactions or discounting transactions; 33.6 (iii) royalty, patent, technical, and copyright fees; 33.7 (iv) licensing fees; and 33.8 (v) other similar income. 33.9For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 33.10applications, trade names, trademarks, service marks, copyrights, mask works, trade 33.11secrets, and similar types of intangible assets. 33.12This clause does not apply to any item of interest or intangible income received or accrued 33.13by a foreign operating corporation with respect to such item of income to the extent that 33.14the income is income from sources without the United States as defined in subtitle A, 33.15chapter 1, subchapter N, part 1, of the Internal Revenue Code; 33.16 (22) the dividends attributable to the income of a foreign operating corporation that 33.17is a member of the taxpayer's unitary group in an amount that is equal to the dividends 33.18paid deduction of a real estate investment trust under section 561(a) of the Internal 33.19Revenue Code for amounts paid or accrued by the real estate investment trust to the 33.20foreign operating corporation; and 33.21 (23) the income of a foreign operating corporation that is a member of the taxpayer's 33.22unitary group in an amount that is equal to gains derived from the sale of real or personal 33.23property located in the United States. 33.24EFFECTIVE DATE.This section is effective for taxable years beginning after 33.25December 31, 2007. 33.26 Sec. 6. Minnesota Statutes 2006, section 290.01, subdivision 19d, as amended by Laws 33.272008, chapter 154, article 11, section 12, is amended to read: 33.28 Subd. 19d. Corporations; modifications decreasing federal taxable income. For 33.29corporations, there shall be subtracted from federal taxable income after the increases 33.30provided in subdivision 19c: 33.31 (1) the amount of foreign dividend gross-up added to gross income for federal 33.32income tax purposes under section 78 of the Internal Revenue Code; 33.33 (2) the amount of salary expense not allowed for federal income tax purposes due to 33.34claiming the work opportunity credit under section 51 of the Internal Revenue Code; 34.1 (3) any dividend (not including any distribution in liquidation) paid within the 34.2taxable year by a national or state bank to the United States, or to any instrumentality of 34.3the United States exempt from federal income taxes, on the preferred stock of the bank 34.4owned by the United States or the instrumentality; 34.5 (4) amounts disallowed for intangible drilling costs due to differences between 34.6this chapter and the Internal Revenue Code in taxable years beginning before January 34.71, 1987, as follows: 34.8 (i) to the extent the disallowed costs are represented by physical property, an amount 34.9equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 34.10subdivision 7 , subject to the modifications contained in subdivision 19e; and 34.11 (ii) to the extent the disallowed costs are not represented by physical property, an 34.12amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 34.13290.09, subdivision 8 ; 34.14 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 34.15Internal Revenue Code, except that: 34.16 (i) for capital losses incurred in taxable years beginning after December 31, 1986, 34.17capital loss carrybacks shall not be allowed; 34.18 (ii) for capital losses incurred in taxable years beginning after December 31, 1986, 34.19a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 34.20allowed; 34.21 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 34.22capital loss carryback to each of the three taxable years preceding the loss year, subject to 34.23the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and 34.24 (iv) for capital losses incurred in taxable years beginning before January 1, 1987, 34.25a capital loss carryover to each of the five taxable years succeeding the loss year to the 34.26extent such loss was not used in a prior taxable year and subject to the provisions of 34.27Minnesota Statutes 1986, section 290.16, shall be allowed; 34.28 (6) an amount for interest and expenses relating to income not taxable for federal 34.29income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 34.30expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 34.31291 of the Internal Revenue Code in computing federal taxable income; 34.32 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for 34.33which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a 34.34reasonable allowance for depletion based on actual cost. In the case of leases the deduction 34.35must be apportioned between the lessor and lessee in accordance with rules prescribed 34.36by the commissioner. In the case of property held in trust, the allowable deduction must 35.1be apportioned between the income beneficiaries and the trustee in accordance with the 35.2pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 35.3of the trust's income allocable to each; 35.4 (8) for certified pollution control facilities placed in service in a taxable year 35.5beginning before December 31, 1986, and for which amortization deductions were elected 35.6under section 169 of the Internal Revenue Code of 1954, as amended through December 35.731, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 35.81986, section 290.09, subdivision 7; 35.9 (9) amounts included in federal taxable income that are due to refunds of income, 35.10excise, or franchise taxes based on net income or related minimum taxes paid by the 35.11corporation to Minnesota, another state, a political subdivision of another state, the 35.12District of Columbia, or a foreign country or possession of the United States to the extent 35.13that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 35.14clause (1), in a prior taxable year; 35.15 (10) 80 percent of royalties, fees, or other like income accrued or received from a 35.16foreign operating corporation or a foreign corporation which is part of the same unitary 35.17business as the receiving corporation, unless the income resulting from such payments or 35.18accruals is income from sources within the United States as defined in subtitle A, chapter 35.191, subchapter N, part 1, of the Internal Revenue Code; 35.20 (11) income or gains from the business of mining as defined in section 290.05, 35.21subdivision 1 , clause (a), that are not subject to Minnesota franchise tax; 35.22 (12) the amount of disability access expenditures in the taxable year which are not 35.23allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code; 35.24 (13) the amount of qualified research expenses not allowed for federal income tax 35.25purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 35.26the amount exceeds the amount of the credit allowed under section 290.068; 35.27 (14) the amount of salary expenses not allowed for federal income tax purposes due 35.28to claiming the Indian employment credit under section 45A(a) of the Internal Revenue 35.29Code; 35.30 (15) for taxable years beginning before January 1, 2008, the amount of the federal 35.31small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 35.32which is included in gross income under section 87 of the Internal Revenue Code; 35.33 (16) for a corporation whose foreign sales corporation, as defined in section 922 35.34of the Internal Revenue Code, constituted a foreign operating corporation during any 35.35taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 35.36claiming the deduction under section 290.21, subdivision 4, for income received from 36.1the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 36.2income excluded under section 114 of the Internal Revenue Code, provided the income is 36.3not income of a foreign operating company; 36.4 (17) any decrease in subpart F income, as defined in section 952(a) of the Internal 36.5Revenue Code, for the taxable year when subpart F income is calculated without regard 36.6to the provisions of section 103 of Public Law 109-222; 36.7 (16) (18) in each of the five tax years immediately following the tax year in which 36.8an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth 36.9of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 36.10the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The 36.11resulting delayed depreciation cannot be less than zero; and 36.12 (17) (19) in each of the five tax years immediately following the tax year in which an 36.13addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the 36.14amount of the addition. 36.15EFFECTIVE DATE.This section is effective for taxable years beginning after 36.16December 31, 2007. 36.17 Sec. 7. Minnesota Statutes 2006, section 290.06, subdivision 33, as amended by Laws 36.182008, chapter 154, article 11, section 13, is amended to read: 36.19 Subd. 33. Bovine testing credit. (a) An owner of cattle in Minnesota may take a 36.20credit against the tax due under this chapter for an amount equal to: (1) for corporate 36.21filers, including shareholders of an "S" corporation under section 290.9725, 25 percent 36.22of the expenses incurred during the taxable year to conduct tuberculosis testing on those 36.23cattle; and (2) for all other filers, one-half the expenses incurred during the taxable year to 36.24conduct tuberculosis testing on those cattle. 36.25 (b) If the amount of credit which the taxpayer is eligible to receive under this 36.26subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of 36.27revenue shall refund the excess to the taxpayer. 36.28 (c) The amount necessary to pay claims for the refund provided in this subdivision is 36.29appropriated from the general fund to the commissioner of revenue. 36.30 (d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in 36.31Minnesota is not federally required are not allowed in claiming the credit under paragraph 36.32(a). 36.33EFFECTIVE DATE.This section is effective for taxable years beginning after 36.34December 31, 2008. 37.1 Sec. 8. Minnesota Statutes 2006, section 290.0677, subdivision 1, as amended by Laws 37.22008, chapter 154, article 3, section 5, is amended to read: 37.3 Subdivision 1. Credit allowed; current military service. (a) An individual is 37.4allowed a credit against the tax due under this chapter equal to $59 for each month or 37.5portion thereof that the individual was in active military service in a designated area after 37.6September 11, 2001, and before January 1, 2009, while a Minnesota domiciliary. 37.7 (b) An individual is allowed a credit against the tax due under this chapter equal to 37.8$120 for each month or portion thereof that the individual was in active military service in 37.9a designated area after December 31, 2008, while a Minnesota domiciliary. 37.10 (c) For active service performed after September 11, 2001, and before December 31, 37.112006, the individual may claim the credit in the taxable year beginning after December 31, 37.122005, and before January 1, 2007. 37.13 (c) (d) For active service performed after December 31, 2006, the individual may 37.14claim the credit for the taxable year in which the active service was performed. 37.15 (d) (e) If an individual entitled to the credit died prior to January 1, 2006, the 37.16individual's estate or heirs at law, if the individual's probate estate has closed or the estate 37.17was not probated, may claim the credit. 37.18EFFECTIVE DATE.This section is effective for taxable years beginning after 37.19December 31, 2008. 37.20 Sec. 9. Minnesota Statutes 2006, section 290.0677, is amended by adding a subdivision 37.21to read: 37.22 Subd. 1a. Credit allowed; past military service. (a) A qualified individual is 37.23allowed a credit against the tax imposed under this chapter for past military service. The 37.24credit equals $750. The credit allowed under this subdivision is reduced by 10 percent of 37.25adjusted gross income in excess of $30,000, but in no case is the credit less than zero. 37.26 (b) For a nonresident or a part-year resident, the credit under this subdivision 37.27must be allocated based on the percentage calculated under section 290.06, subdivision 37.282c, paragraph (e). 37.29EFFECTIVE DATE.This section is effective for taxable years beginning after 37.30December 31, 2008. 37.31 Sec. 10. Minnesota Statutes 2006, section 290.0677, subdivision 2, is amended to read: 37.32 Subd. 2. Definitions. (a) For purposes of this section the following terms have 37.33the meanings given. 38.1 (b) "Designated area" means a: 38.2 (1) combat zone designated by Executive Order from the President of the United 38.3States; 38.4 (2) qualified hazardous duty area, designated in Public Law; or 38.5 (3) location certified by the U. S. Department of Defense as eligible for combat zone 38.6tax benefits due to the location's direct support of military operations. 38.7 (c) "Active military service" means active duty service in any of the United States 38.8Armed Forces, the National Guard, or reserves. 38.9 (d) "Qualified individual" means an individual who has 38.10 (1) either (i) served at least 20 years in the military or (ii) has a service-connected 38.11disability rating of 100 percent for a total and permanent disability; and 38.12 (2) separated from military service before the end of the taxable year. 38.13 (e) "Adjusted gross income" has the meaning given in section 61 of the Internal 38.14Revenue Code. 38.15EFFECTIVE DATE.This section is effective for taxable years beginning after 38.16December 31, 2008. 38.17 Sec. 11. Minnesota Statutes 2006, section 290.0677, subdivision 3, is amended to read: 38.18 Subd. 3. Credit refundable. If the amount of credit which the individual is eligible 38.19to receive under this section subdivision 1 exceeds the individual's tax liability under this 38.20chapter, the commissioner shall refund the excess to the individual. 38.21EFFECTIVE DATE.This section is effective for taxable years beginning after 38.22December 31, 2008. 38.23 Sec. 12. Minnesota Statutes 2006, section 290.091, subdivision 2, as amended by Laws 38.242008, chapter 154, article 4, section 7, is amended to read: 38.25 Subd. 2. Definitions. For purposes of the tax imposed by this section, the following 38.26terms have the meanings given: 38.27 (a) "Alternative minimum taxable income" means the sum of the following for 38.28the taxable year: 38.29 (1) the taxpayer's federal alternative minimum taxable income as defined in section 38.3055(b)(2) of the Internal Revenue Code; 38.31 (2) the taxpayer's itemized deductions allowed in computing federal alternative 38.32minimum taxable income, but excluding: 38.33 (i) the charitable contribution deduction under section 170 of the Internal Revenue 38.34Code:; 39.1 (A) for taxable years beginning before January 1, 2006, to the extent that the 39.2deduction exceeds 1.0 percent of adjusted gross income; 39.3 (B) for taxable years beginning after December 31, 2005, to the full extent of the 39.4deduction. 39.5 For purposes of this clause, "adjusted gross income" has the meaning given in 39.6section 62 of the Internal Revenue Code; 39.7 (ii) the medical expense deduction; 39.8 (iii) the casualty, theft, and disaster loss deduction; and 39.9 (iv) the impairment-related work expenses of a disabled person; 39.10 (3) for depletion allowances computed under section 613A(c) of the Internal 39.11Revenue Code, with respect to each property (as defined in section 614 of the Internal 39.12Revenue Code), to the extent not included in federal alternative minimum taxable income, 39.13the excess of the deduction for depletion allowable under section 611 of the Internal 39.14Revenue Code for the taxable year over the adjusted basis of the property at the end of the 39.15taxable year (determined without regard to the depletion deduction for the taxable year); 39.16 (4) to the extent not included in federal alternative minimum taxable income, the 39.17amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 39.18Internal Revenue Code determined without regard to subparagraph (E); 39.19 (5) to the extent not included in federal alternative minimum taxable income, the 39.20amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and 39.21 (6) the amount of addition required by section 290.01, subdivision 19a, clauses 39.22(7) to (9), (11), and (12); 39.23 less the sum of the amounts determined under the following: 39.24 (1) interest income as defined in section 290.01, subdivision 19b, clause (1); 39.25 (2) an overpayment of state income tax as provided by section 290.01, subdivision 39.2619b , clause (2), to the extent included in federal alternative minimum taxable income; 39.27 (3) the amount of investment interest paid or accrued within the taxable year on 39.28indebtedness to the extent that the amount does not exceed net investment income, as 39.29defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 39.30amounts deducted in computing federal adjusted gross income; and 39.31 (4) amounts subtracted from federal taxable income as provided by section 290.01, 39.32subdivision 19b , clauses (6) and (9) to (16). 39.33 In the case of an estate or trust, alternative minimum taxable income must be 39.34computed as provided in section 59(c) of the Internal Revenue Code. 39.35 (b) "Investment interest" means investment interest as defined in section 163(d)(3) 39.36of the Internal Revenue Code. 40.1 (c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 40.2income after subtracting the exemption amount determined under subdivision 3. 40.3 (d) "Regular tax" means the tax that would be imposed under this chapter (without 40.4regard to this section and section 290.032), reduced by the sum of the nonrefundable 40.5credits allowed under this chapter. 40.6 (e) "Net minimum tax" means the minimum tax imposed by this section. 40.7EFFECTIVE DATE.This section is effective for taxable years beginning after 40.8December 31, 2007. 40.9 Sec. 13. Minnesota Statutes 2006, section 290.191, subdivision 5, is amended to read: 40.10 Subd. 5. Determination of sales factor. For purposes of this section, the following 40.11rules apply in determining the sales factor. 40.12 (a) The sales factor includes all sales, gross earnings, or receipts received in the 40.13ordinary course of the business, except that the following types of income are not included 40.14in the sales factor: 40.15 (1) interest; 40.16 (2) dividends; 40.17 (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code; 40.18 (4) sales of property used in the trade or business, except sales of leased property of 40.19a type which is regularly sold as well as leased; 40.20 (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue 40.21Code or sales of stock; and 40.22 (6) royalties, fees, or other like income of a type which qualify for a subtraction from 40.23federal taxable income under section 290.01, subdivision 19d(10). 40.24 (b) Sales of tangible personal property are made within this state if the property is 40.25received by a purchaser at a point within this state, and the taxpayer is taxable in this state, 40.26regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination 40.27of the property. 40.28 (c) Tangible personal property delivered to a common or contract carrier or foreign 40.29vessel for delivery to a purchaser in another state or nation is a sale in that state or nation, 40.30regardless of f.o.b. point or other conditions of the sale. 40.31 (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine, 40.32fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is 40.33licensed by a state or political subdivision to resell this property only within the state of 40.34ultimate destination, the sale is made in that state. 41.1 (e) Sales made by or through a corporation that is qualified as a domestic 41.2international sales corporation under section 992 of the Internal Revenue Code are not 41.3considered to have been made within this state. 41.4 (f) Sales, rents, royalties, and other income in connection with real property is 41.5attributed to the state in which the property is located. 41.6 (g) Receipts from the lease or rental of tangible personal property, including finance 41.7leases and true leases, must be attributed to this state if the property is located in this 41.8state and to other states if the property is not located in this state. Receipts from the 41.9lease or rental of moving property including, but not limited to, motor vehicles, rolling 41.10stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts 41.11factor to the extent that the property is used in this state. The extent of the use of moving 41.12property is determined as follows: 41.13 (1) A motor vehicle is used wholly in the state in which it is registered. 41.14 (2) The extent that rolling stock is used in this state is determined by multiplying 41.15the receipts from the lease or rental of the rolling stock by a fraction, the numerator of 41.16which is the miles traveled within this state by the leased or rented rolling stock and the 41.17denominator of which is the total miles traveled by the leased or rented rolling stock. 41.18 (3) The extent that an aircraft is used in this state is determined by multiplying the 41.19receipts from the lease or rental of the aircraft by a fraction, the numerator of which is 41.20the number of landings of the aircraft in this state and the denominator of which is the 41.21total number of landings of the aircraft. 41.22 (4) The extent that a vessel, mobile equipment, or other mobile property is used in 41.23the state is determined by multiplying the receipts from the lease or rental of the property 41.24by a fraction, the numerator of which is the number of days during the taxable year the 41.25property was in this state and the denominator of which is the total days in the taxable year. 41.26 (h) Royalties and other income not described in paragraph (a), clause (6), received 41.27for the use of or for the privilege of using intangible property, including patents, 41.28know-how, formulas, designs, processes, patterns, copyrights, trade names, service names, 41.29franchises, licenses, contracts, customer lists, or similar items, must be attributed to the 41.30state in which the property is used by the purchaser. If the property is used in more 41.31than one state, the royalties or other income must be apportioned to this state pro rata 41.32according to the portion of use in this state. If the portion of use in this state cannot be 41.33determined, the royalties or other income must be excluded from both the numerator 41.34and the denominator. Intangible property is used in this state if the purchaser uses the 41.35intangible property or the rights therein in the regular course of its business operations in 41.36this state, regardless of the location of the purchaser's customers. 42.1 (i) Sales of intangible property are made within the state in which the property is 42.2used by the purchaser. If the property is used in more than one state, the sales must be 42.3apportioned to this state pro rata according to the portion of use in this state. If the 42.4portion of use in this state cannot be determined, the sale must be excluded from both the 42.5numerator and the denominator of the sales factor. Intangible property is used in this 42.6state if the purchaser used the intangible property in the regular course of its business 42.7operations in this state. 42.8 (j) Receipts from the performance of services must be attributed to the state where 42.9the services are received. For the purposes of this section, receipts from the performance 42.10of services provided to a corporation, partnership, or trust may only be attributed to a state 42.11where it has a fixed place of doing business. If the state where the services are received is 42.12not readily determinable or is a state where the corporation, partnership, or trust receiving 42.13the service does not have a fixed place of doing business, the services shall be deemed 42.14to be received at the location of the office of the customer from which the services were 42.15ordered in the regular course of the customer's trade or business. If the ordering office 42.16cannot be determined, the services shall be deemed to be received at the office of the 42.17customer to which the services are billed. 42.18 (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts 42.19from management, distribution, or administrative services performed by a corporation 42.20or trust for a fund of a corporation or trust regulated under United States Code, title 15, 42.21sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of 42.22the fund resides. Under this paragraph, receipts for services attributed to shareholders are 42.23determined on the basis of the ratio of: (1) the average of the outstanding shares in the 42.24fund owned by shareholders residing within Minnesota at the beginning and end of each 42.25year; and (2) the average of the total number of outstanding shares in the fund at the 42.26beginning and end of each year. Residence of the shareholder, in the case of an individual, 42.27is determined by the mailing address furnished by the shareholder to the fund. Residence 42.28of the shareholder, when the shares are held by an insurance company as a depositor for 42.29the insurance company policyholders, is the mailing address of the policyholders. In 42.30the case of an insurance company holding the shares as a depositor for the insurance 42.31company policyholders, if the mailing address of the policyholders cannot be determined 42.32by the taxpayer, the receipts must be excluded from both the numerator and denominator. 42.33Residence of other shareholders is the mailing address of the shareholder. 42.34EFFECTIVE DATE.This section is effective for taxable years beginning after 42.35December 31, 2009. 43.1 Sec. 14. Minnesota Statutes 2006, section 290.191, subdivision 6, is amended to read: 43.2 Subd. 6. Determination of receipts factor for financial institutions. (a) For 43.3purposes of this section, the rules in this subdivision and subdivision subdivisions 5, 43.4paragraph (k), and 8 apply in determining the receipts factor for financial institutions. 43.5 (b) "Receipts" for this purpose means gross income, including net taxable gain on 43.6disposition of assets, including securities and money market instruments, when derived 43.7from transactions and activities in the regular course of the taxpayer's trade or business. 43.8 (c) "Money market instruments" means federal funds sold and securities purchased 43.9under agreements to resell, commercial paper, banker's acceptances, and purchased 43.10certificates of deposit and similar instruments to the extent that the instruments are 43.11reflected as assets under generally accepted accounting principles. 43.12 (d) "Securities" means United States Treasury securities, obligations of United States 43.13government agencies and corporations, obligations of state and political subdivisions, 43.14corporate stock, bonds, and other securities, participations in securities backed by 43.15mortgages held by United States or state government agencies, loan-backed securities and 43.16similar investments to the extent the investments are reflected as assets under generally 43.17accepted accounting principles. 43.18 (e) Receipts from the lease or rental of real or tangible personal property, including 43.19both finance leases and true leases, must be attributed to this state if the property is 43.20located in this state. Receipts from the lease or rental of tangible personal property that is 43.21characteristically moving property, including, but not limited to, motor vehicles, rolling 43.22stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts 43.23factor to the extent that the property is used in this state. The extent of the use of moving 43.24property is determined as follows: 43.25 (1) A motor vehicle is used wholly in the state in which it is registered. 43.26 (2) The extent that rolling stock is used in this state is determined by multiplying 43.27the receipts from the lease or rental of the rolling stock by a fraction, the numerator of 43.28which is the miles traveled within this state by the leased or rented rolling stock and the 43.29denominator of which is the total miles traveled by the leased or rented rolling stock. 43.30 (3) The extent that an aircraft is used in this state is determined by multiplying the 43.31receipts from the lease or rental of the aircraft by a fraction, the numerator of which is 43.32the number of landings of the aircraft in this state and the denominator of which is the 43.33total number of landings of the aircraft. 43.34 (4) The extent that a vessel, mobile equipment, or other mobile property is used in 43.35the state is determined by multiplying the receipts from the lease or rental of property by a 44.1fraction, the numerator of which is the number of days during the taxable year the property 44.2was in this state and the denominator of which is the total days in the taxable year. 44.3 (f) Interest income and other receipts from assets in the nature of loans that are 44.4secured primarily by real estate or tangible personal property must be attributed to this state 44.5if the security property is located in this state under the principles stated in paragraph (e). 44.6 (g) Interest income and other receipts from consumer loans not secured by real or 44.7tangible personal property that are made to residents of this state, whether at a place 44.8of business, by traveling loan officer, by mail, by telephone or other electronic means, 44.9must be attributed to this state. 44.10 (h) Interest income and other receipts from commercial loans and installment 44.11obligations that are unsecured by real or tangible personal property or secured by 44.12intangible property must be attributed to this state if the proceeds of the loan are to be 44.13applied in this state. If it cannot be determined where the funds are to be applied, the 44.14income and receipts are attributed to the state in which the office of the borrower from 44.15which the application would be made in the regular course of business is located. If this 44.16cannot be determined, the transaction is disregarded in the apportionment formula. 44.17 (i) Interest income and other receipts from a participating financial institution's 44.18portion of participation and syndication loans must be attributed under paragraphs (e) to 44.19(h). A participation loan is an arrangement in which a lender makes a loan to a borrower 44.20and then sells, assigns, or otherwise transfers all or a part of the loan to a purchasing 44.21financial institution. A syndication loan is a loan transaction involving multiple financial 44.22institutions in which all the lenders are named as parties to the loan documentation, are 44.23known to the borrower, and have privity of contract with the borrower. 44.24 (j) Interest income and other receipts including service charges from financial 44.25institution credit card and travel and entertainment credit card receivables and credit 44.26card holders' fees must be attributed to the state to which the card charges and fees are 44.27regularly billed. 44.28 (k) Merchant discount income derived from financial institution credit card holder 44.29transactions with a merchant must be attributed to the state in which the merchant is 44.30located. In the case of merchants located within and outside the state, only receipts from 44.31merchant discounts attributable to sales made from locations within the state are attributed 44.32to this state. It is presumed, subject to rebuttal, that the location of a merchant is the 44.33address shown on the invoice submitted by the merchant to the taxpayer. 44.34 (l) Receipts from the performance of fiduciary and other services must be attributed 44.35to the state in which the services are received. For the purposes of this section, services 44.36provided to a corporation, partnership, or trust must be attributed to a state where it has a 45.1fixed place of doing business. If the state where the services are received is not readily 45.2determinable or is a state where the corporation, partnership, or trust does not have a fixed 45.3place of doing business, the services shall be deemed to be received at the location of the 45.4office of the customer from which the services were ordered in the regular course of the 45.5customer's trade or business. If the ordering office cannot be determined, the services shall 45.6be deemed to be received at the office of the customer to which the services are billed. 45.7 (m) Receipts from the issuance of travelers checks and money orders must be 45.8attributed to the state in which the checks and money orders are purchased. 45.9 (n) Receipts from investments of a financial institution in securities and from money 45.10market instruments must be apportioned to this state based on the ratio that total deposits 45.11from this state, its residents, including any business with an office or other place of 45.12business in this state, its political subdivisions, agencies, and instrumentalities bear to the 45.13total deposits from all states, their residents, their political subdivisions, agencies, and 45.14instrumentalities. In the case of an unregulated financial institution subject to this section, 45.15these receipts are apportioned to this state based on the ratio that its gross business income, 45.16excluding such receipts, earned from sources within this state bears to gross business 45.17income, excluding such receipts, earned from sources within all states. For purposes 45.18of this subdivision, deposits made by this state, its residents, its political subdivisions, 45.19agencies, and instrumentalities must be attributed to this state, whether or not the deposits 45.20are accepted or maintained by the taxpayer at locations within this state. 45.21 (o) A financial institution's interest in property described in section 290.015, 45.22subdivision 3 , paragraph (b), is included in the receipts factor in the same manner as assets 45.23in the nature of securities or money market instruments are included in paragraph (n). 45.24EFFECTIVE DATE.This section is effective for taxable years beginning after 45.25December 31, 2009. 45.26 Sec. 15. Minnesota Statutes 2006, section 291.03, subdivision 1, is amended to read: 45.27 Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the 45.28proportion of the maximum credit for state death taxes computed under section 2011 of 45.29the Internal Revenue Code, as amended through December 31, 2000, but using Minnesota 45.30adjusted taxable estate instead of federal adjusted taxable estate, as the Minnesota gross 45.31estate bears to the value of the federal gross estate. The tax determined under this 45.32paragraph shall not be greater than the amount computed by applying the rates and 45.33brackets under section 2001(c) of the Internal Revenue Code to the Minnesota adjusted 45.34gross estate and subtracting the federal credit allowed under section 2010 of the Internal 45.35Revenue Code of 1986, as amended through December 31, 2000. For the purposes of 46.1this section, expenses which are deducted for federal income tax purposes under section 46.2642(g) of the Internal Revenue Code as amended through December 31, 2002, are not 46.3allowable in computing the tax under this chapter. 46.4 (b) The tax determined under this subdivision must not be greater than the sum of 46.5the following amounts multiplied by a fraction, the numerator of which is the Minnesota 46.6gross estate and the denominator of which is the federal gross estate: 46.7 (1) the rates and brackets under section 2001(c) of the Internal Revenue Code 46.8multiplied by the sum of: 46.9 (A) the taxable estate, as defined under section 2051 of the Internal Revenue Code; 46.10plus 46.11 (B) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue 46.12Code; less 46.13 (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue 46.14Code; and less 46.15 (3) the federal credit allowed under section 2010 of the Internal Revenue Code. 46.16 (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal 46.17Revenue Code of 1986, as amended through December 31, 2000. 46.18EFFECTIVE DATE.This section is effective for estates of decedents dying after 46.19December 31, 2005. 46.20 Sec. 16. Minnesota Statutes 2006, section 291.03, is amended by adding a subdivision 46.21to read: 46.22 Subd. 1a. Expenses disallowed. For the purposes of this section, expenses which 46.23are deducted for federal income tax purposes under section 642(g) of the Internal Revenue 46.24Code are not allowable in computing the tax under this chapter. 46.25EFFECTIVE DATE.This section is effective for estates of decedents dying after 46.26December 31, 2005. 46.27 Sec. 17. Laws 2008, chapter 154, article 3, section 3, the effective date, is amended to 46.28read: 46.29EFFECTIVE DATE.This section is effective for tax years beginning after 46.30December 31, 2007, except that clause (11) and the phrase "to the extent included in 46.31federal taxable income," added in clause (12) are effective retroactively for taxable years 46.32beginning after December 31, 2004. 47.1ARTICLE 5 47.2LOCAL DEVELOPMENT 47.3 Section 1. [116J.8732] SEED CAPITAL INVESTMENT CREDIT; 47.4COMMISSIONER'S RESPONSIBILITIES. 47.5 Subdivision 1. Scope. This section establishes rules that businesses must satisfy to 47.6qualify for the seed capital investment credit under section 290.06, subdivision 34, and the 47.7commissioner's responsibility for certifying the qualifying businesses. 47.8 Subd. 2. Definitions. (a) For purposes of this section and section 290.06, 47.9subdivision 34, the following terms have the meanings given. 47.10 (b) "Border city" means a city qualifying to designate a border city development 47.11zone under section 469.1731. 47.12 (c) "Pass-through entity" means a corporation that for the applicable tax year is 47.13treated as an S corporation or a general partnership, limited partnership, limited liability 47.14partnership, trust, or limited liability company and which for the applicable taxable year is 47.15not taxed as a corporation under chapter 290. 47.16 (d) "Primary sector business" means a qualified business that through the 47.17employment of knowledge or labor adds value to a product, process, or service and 47.18increases revenues to a Minnesota business generated by sales of products or services to 47.19customers outside of the state or increases revenues to a qualified business the customers 47.20of which previously were unable to acquire, or had limited availability of the product or 47.21service from a Minnesota provider. 47.22 (e) "Qualified business" means a business certified by the commissioner as meeting 47.23the requirements of subdivision 3. 47.24 Subd. 3. Qualified business. (a) The commissioner shall certify whether a business 47.25that has requested to become a qualified business meets the requirements of paragraph (b). 47.26 (b) For purposes of this section, a qualified business must be a primary sector 47.27business, other than a real estate investment trust, that: 47.28 (1) is incorporated or its satellite operation is incorporated as a for-profit corporation 47.29or is a partnership, limited partnership, limited liability company, limited liability 47.30partnership, or joint venture; 47.31 (2) is in compliance with the requirements for filings with the commissioner of 47.32commerce under the securities laws of this state; 47.33 (3) has Minnesota residents as a majority of its employees in its principal office or 47.34the satellite operation, which is located in a border city; 48.1 (4) has its principal office in a border city and has the majority of its business 48.2activity performed in a border city, except sales activity, or has a significant operation in 48.3a border city that has or is projected to have more than ten employees or $150,000 of 48.4sales annually; and 48.5 (5) relies on innovation, research, or the development of new products and processes 48.6in its plans for growth and profitability. 48.7 (c) The commissioner shall establish the necessary forms and procedures for 48.8certifying qualified businesses. 48.9 (d) A qualified business may apply to the commissioner for a recertification. Only 48.10one recertification is available to a qualified business. The application for recertification 48.11must be filed with the commissioner within 90 days before the original certification 48.12expiration date. The recertification issued by the director must comply with the provisions 48.13of paragraph (e). 48.14 (e) The commissioner shall issue a certification letter to a business the commissioner 48.15determines is a qualified business. The certification letter must include: 48.16 (1) the certification effective date; and 48.17 (2) the certification expiration date, which may not be more than four years from the 48.18certification effective date. 48.19 Subd. 4. Seed capital investment credit reporting. Within 30 days after the date 48.20that an investment in a qualified business is purchased, the qualified business shall file with 48.21the commissioner and the commissioner of revenue and provide to the investor completed 48.22forms prescribed by the commissioner of revenue that show as to each investment in the 48.23qualified business the following: 48.24 (1) the name, address, and Social Security number of the taxpayer who made the 48.25investment; and 48.26 (2) the dollar amount paid for the investment by the taxpayer. 48.27EFFECTIVE DATE.This section is effective the day following final enactment. 48.28 Sec. 2. Minnesota Statutes 2006, section 116J.993, subdivision 3, is amended to read: 48.29 Subd. 3. Business subsidy. "Business subsidy" or "subsidy" means a state or local 48.30government agency grant, contribution of personal property, real property, infrastructure, 48.31the principal amount of a loan at rates below those commercially available to the recipient, 48.32any reduction or deferral of any tax or any fee, any guarantee of any payment under any 48.33loan, lease, or other obligation, or any preferential use of government facilities given 48.34to a business. 48.35 The following forms of financial assistance are not a business subsidy: 49.1 (1) a business subsidy of less than $25,000 $150,000; 49.2 (2) assistance that is generally available to all businesses or to a general class of 49.3similar businesses, such as a line of business, size, location, or similar general criteria; 49.4 (3) public improvements to buildings or lands owned by the state or local 49.5government that serve a public purpose and do not principally benefit a single business or 49.6defined group of businesses at the time the improvements are made; 49.7 (4) redevelopment property polluted by contaminants as defined in section 116J.552, 49.8subdivision 3 ; 49.9 (5) assistance provided for the sole purpose of renovating old or decaying building 49.10stock or bringing it up to code and assistance provided for designated historic preservation 49.11districts, provided that the assistance is equal to or less than 50 percent of the total cost; 49.12 (6) assistance to provide job readiness and training services if the sole purpose of 49.13the assistance is to provide those services; 49.14 (7) assistance for housing; 49.15 (8) assistance for pollution control or abatement, including assistance for a tax 49.16increment financing hazardous substance subdistrict as defined under section 469.174, 49.17subdivision 23 ; 49.18 (9) assistance for energy conservation; 49.19 (10) tax reductions resulting from conformity with federal tax law; 49.20 (11) workers' compensation and unemployment insurance; 49.21 (12) benefits derived from regulation; 49.22 (13) indirect benefits derived from assistance to educational institutions; 49.23 (14) funds from bonds allocated under chapter 474A, bonds issued to refund 49.24outstanding bonds, and bonds issued for the benefit of an organization described in section 49.25501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; 49.26 (15) assistance for a collaboration between a Minnesota higher education institution 49.27and a business; 49.28 (16) assistance for a tax increment financing soils condition district as defined under 49.29section 469.174, subdivision 19; 49.30 (17) redevelopment when the recipient's investment in the purchase of the site and in 49.31site preparation is 70 percent or more of the assessor's current year's estimated market 49.32value; 49.33 (18) general changes in tax increment financing law and other general tax law 49.34changes of a principally technical nature; 49.35 (19) federal assistance until the assistance has been repaid to, and reinvested by, the 49.36state or local government agency; 50.1 (20) funds from dock and wharf bonds issued by a seaway port authority; 50.2 (21) business loans and loan guarantees of $75,000 $150,000 or less; 50.3 (22) federal loan funds provided through the United States Department of 50.4Commerce, Economic Development Administration; and 50.5 (23) property tax abatements granted under section 469.1813 to property that is 50.6subject to valuation under Minnesota Rules, chapter 8100. 50.7 Sec. 3. Minnesota Statutes 2006, section 116J.994, subdivision 2, is amended to read: 50.8 Subd. 2. Developing a set of criteria. A business subsidy may not be granted until 50.9the grantor has adopted criteria after a public hearing for awarding business subsidies 50.10that comply with this section. The criteria may not be adopted on a case-by-case basis. 50.11The criteria must set specific minimum requirements that recipients must meet in order 50.12to be eligible to receive business subsidies. The criteria must include a specific wage 50.13floor for the wages to be paid for the jobs created. The wage floor may be stated as a 50.14specific dollar amount or may be stated as a formula that will generate a specific dollar 50.15amount. A grantor may deviate from its criteria by documenting in writing the reason 50.16for the deviation and attaching a copy of the document to its next annual report to the 50.17department. The commissioner of employment and economic development may assist 50.18local government agencies in developing criteria. A copy of the criteria must be submitted 50.19to the Department of Employment and Economic Development along with the first annual 50.20report following the enactment of this section or with the first annual report after it has 50.21adopted criteria, whichever is earlier. Notwithstanding section 116J.993, subdivision 3, 50.22clauses (1) and (21), for the purpose of this subdivision, "business subsidies" as defined 50.23under section 116J.993 includes the following forms of financial assistance: 50.24 (1) a business subsidy of $25,000 or more; and 50.25 (2) business loans and guarantees of $75,000 or more. 50.26 Sec. 4. Minnesota Statutes 2006, section 116J.994, subdivision 5, is amended to read: 50.27 Subd. 5. Public notice and hearing. (a) Before granting a business subsidy that 50.28exceeds $500,000 for a state government grantor and $100,000 $150,000 for a local 50.29government grantor, the grantor must provide public notice and a hearing on the subsidy. 50.30A public hearing and notice under this subdivision is not required if a hearing and notice 50.31on the subsidy is otherwise required by law. 50.32 (b) Public notice of a proposed business subsidy under this subdivision by a state 50.33government grantor, other than the Iron Range Resources and Rehabilitation Board, must 50.34be published in the State Register. Public notice of a proposed business subsidy under this 51.1subdivision by a local government grantor or the Iron Range Resources and Rehabilitation 51.2Board must be published in a local newspaper of general circulation. The public notice 51.3must identify the location at which information about the business subsidy, including a 51.4summary of the terms of the subsidy, is available. Published notice should be sufficiently 51.5conspicuous in size and placement to distinguish the notice from the surrounding text. 51.6The grantor must make the information available in printed paper copies and, if possible, 51.7on the Internet. The government agency must provide at least a ten-day notice for the 51.8public hearing. 51.9 (c) The public notice must include the date, time, and place of the hearing. 51.10 (d) The public hearing by a state government grantor other than the Iron Range 51.11Resources and Rehabilitation Board must be held in St. Paul. 51.12 (e) If more than one nonstate grantor provides a business subsidy to the same 51.13recipient, the nonstate grantors may designate one nonstate grantor to hold a single 51.14public hearing regarding the business subsidies provided by all nonstate grantors. For 51.15the purposes of this paragraph, "nonstate grantor" includes the iron range resources and 51.16rehabilitation board. 51.17 (f) The public notice of any public meeting about a business subsidy agreement, 51.18including those required by this subdivision and by subdivision 4, must include notice that 51.19a person with residence in or the owner of taxable property in the granting jurisdiction 51.20may file a written complaint with the grantor if the grantor fails to comply with sections 51.21116J.993 to 116J.995, and that no action may be filed against the grantor for the failure to 51.22comply unless a written complaint is filed. 51.23 Sec. 5. Minnesota Statutes 2006, section 116J.994, subdivision 8, is amended to read: 51.24 Subd. 8. Reports by grantors. (a) Local government agencies of a local 51.25government with a population of more than 2,500 and state government agencies, 51.26regardless of whether or not they have awarded any business subsidies, must file a report 51.27by April 1 of each year with the commissioner. Local government agencies of a local 51.28government with a population of 2,500 or less are exempt from filing this report if they 51.29have not awarded a business subsidy in the past five years. The report must include a list 51.30of recipients that did not complete the recipient report required under subdivision 7 and a 51.31list of recipients that have not met their job and wage goals within two years and the steps 51.32being taken to bring them into compliance or to recoup the subsidy. 51.33 If the commissioner has not received the report by April 1 from an entity required 51.34to report, the commissioner shall issue a warning to the government agency. If the 51.35commissioner has still not received the report by June 1 of that same year from an entity 52.1required to report, then that government agency may not award any business subsidies 52.2until the report has been filed. 52.3 (b) The report required under paragraph (a) is also required for financial assistance 52.4of $25,000 and greater that is excluded from the definition of "business subsidy" by 52.5section 116J.993, subdivision 3, clause (1), and of $75,000 and greater that is excluded 52.6from the definition of "business subsidy" by section 116J.993, subdivision 3, clause (21). 52.7The report for the financial assistance under this paragraph must be completed within one 52.8year of the granting of the financial assistance. The report required for financial assistance 52.9under this paragraph must include: 52.10 (1) the name of the recipient, its organizational structure, its address and contact 52.11information, and its industry sector; 52.12 (2) a description of the amount and use of the financial assistance and the total 52.13project budget, including a list of all financial assistance by all grantors for the project and 52.14the private sources of financial assistance; 52.15 (3) the public purpose of the financial assistance, the job goals associated with both 52.16the financial assistance and the total project in which the financial assistance is included, 52.17the hourly wage of each job created, and the cost of health insurance provided by the 52.18employer; 52.19 (4) the date the project will be completed; 52.20 (5) the name and address of the parent corporation of the recipient, if any; and 52.21 (6) any other information the commissioner may request. 52.22 (c) Within one year of completing a report under paragraph (b), the local government 52.23agency must report to the commissioner on progress in achieving the purposes and goals 52.24under clause (3). 52.25 (d) The commissioner of employment and economic development must provide 52.26information on reporting requirements to state and local government agencies. 52.27 Sec. 6. Minnesota Statutes 2007 Supplement, section 268.19, subdivision 1, as 52.28amended by Laws 2008, chapter 315, section 16, is amended to read: 52.29 Subdivision 1. Use of data. (a) Except as provided by this section, data gathered 52.30from any person under the administration of the Minnesota Unemployment Insurance Law 52.31are private data on individuals or nonpublic data not on individuals as defined in section 52.3213.02, subdivisions 9 and 12 , and may not be disclosed except according to a district court 52.33order or section 13.05. A subpoena is not considered a district court order. These data 52.34may be disseminated to and used by the following agencies without the consent of the 52.35subject of the data: 53.1 (1) state and federal agencies specifically authorized access to the data by state 53.2or federal law; 53.3 (2) any agency of any other state or any federal agency charged with the 53.4administration of an unemployment insurance program; 53.5 (3) any agency responsible for the maintenance of a system of public employment 53.6offices for the purpose of assisting individuals in obtaining employment; 53.7 (4) the public authority responsible for child support in Minnesota or any other 53.8state in accordance with section 256.978; 53.9 (5) human rights agencies within Minnesota that have enforcement powers; 53.10 (6) the Department of Revenue to the extent necessary for its duties under Minnesota 53.11laws; 53.12 (7) public and private agencies responsible for administering publicly financed 53.13assistance programs for the purpose of monitoring the eligibility of the program's 53.14recipients; 53.15 (8) the Department of Labor and Industry and the Division of Insurance Fraud 53.16Prevention in the Department of Commerce for uses consistent with the administration of 53.17their duties under Minnesota law; 53.18 (9) local and state welfare agencies for monitoring the eligibility of the data subject 53.19for assistance programs, or for any employment or training program administered by those 53.20agencies, whether alone, in combination with another welfare agency, or in conjunction 53.21with the department or to monitor and evaluate the statewide Minnesota family investment 53.22program by providing data on recipients and former recipients of food stamps or food 53.23support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance 53.24under chapter 119B, or medical programs under chapter 256B, 256D, or 256L; 53.25 (10) local and state welfare agencies for the purpose of identifying employment, 53.26wages, and other information to assist in the collection of an overpayment debt in an 53.27assistance program; 53.28 (11) local, state, and federal law enforcement agencies for the purpose of ascertaining 53.29the last known address and employment location of an individual who is the subject of 53.30a criminal investigation; 53.31 (12) the United States Citizenship and Immigration Services has access to data on 53.32specific individuals and specific employers provided the specific individual or specific 53.33employer is the subject of an investigation by that agency; 53.34 (13) the Department of Health for the purposes of epidemiologic investigations; and 54.1 (14) the Department of Corrections for the purpose of preconfinement and 54.2postconfinement employment tracking of committed offenders for the purpose of case 54.3planning.; and 54.4 (15) the state auditor to the extent necessary to conduct audits of job opportunity 54.5building zones as required under section 469.3201. 54.6 (b) Data on individuals and employers that are collected, maintained, or used by 54.7the department in an investigation under section 268.182 are confidential as to data 54.8on individuals and protected nonpublic data not on individuals as defined in section 54.913.02, subdivisions 3 and 13 , and must not be disclosed except under statute or district 54.10court order or to a party named in a criminal proceeding, administrative or judicial, for 54.11preparation of a defense. 54.12 (c) Data gathered by the department in the administration of the Minnesota 54.13unemployment insurance program must not be made the subject or the basis for any 54.14suit in any civil proceedings, administrative or judicial, unless the action is initiated by 54.15the department. 54.16EFFECTIVE DATE.This section is effective the day following final enactment. 54.17 Sec. 7. Minnesota Statutes 2006, section 270B.15, is amended to read: 54.18270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR AND STATE 54.19AUDITOR. 54.20 (a) Returns and return information must be disclosed to the legislative auditor to the 54.21extent necessary for the legislative auditor to carry out sections 3.97 to 3.979. 54.22 (b) The commissioner must disclose return information, including the report 54.23required under section 289A.12, subdivision 15, to the state auditor to the extent necessary 54.24to conduct audits of job opportunity building zones as required under section 469.3201. 54.25EFFECTIVE DATE.This section is effective the day following final enactment. 54.26 Sec. 8. Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision 54.27to read: 54.28 Subd. 15. Report of job opportunity zone benefits; penalty for failure to file 54.29report. (a) By October 15 of each year, every qualified business, as defined under section 54.30469.310, subdivision 11, must file with the commissioner, on a form prescribed by the 54.31commissioner, a report listing the tax benefits under section 469.315 received by the 54.32business for the previous year. 54.33 (b) The commissioner shall send notice to each business that fails to timely submit 54.34the report required under paragraph (a). The notice shall demand that the business submit 55.1the report within 60 days. Where good cause exists, the commissioner may extend 55.2the period for submitting the report as long as a request for extension is filed by the 55.3business before the expiration of the 60-day period. The commissioner shall notify the 55.4commissioner of the Department of Employment and Economic Development and the 55.5appropriate job opportunity subzone administrator whenever notice is sent to a business 55.6under this paragraph. 55.7 (c) A business that fails to submit the report as required under paragraph (b) is no 55.8longer a qualified business under section 469.310, subdivision 11, and is subject to the 55.9repayment provisions of section 469.319. 55.10EFFECTIVE DATE.This section is effective beginning with reports required to be 55.11filed October 15, 2008. 55.12 Sec. 9. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision 55.13to read: 55.14 Subd. 35. Seed capital investment credit. (a) An individual, estate, or trust is 55.15allowed a credit against the tax imposed by this chapter for investments in a qualifying 55.16business certified under section 116J.8732, subdivision 3. The credit equals 45 percent 55.17of the amount invested by the taxpayer in qualified businesses during the taxable year. 55.18The credit must not exceed $112,500 for each taxable year. 55.19 (b) A pass-through entity that invests in a qualified business must be considered to 55.20be the taxpayer for purposes of the investment limitations in this subdivision and the 55.21amount of the credit allowed with respect to a pass-through entity's investment in a 55.22qualified business must be determined at the pass-through entity level. The amount of the 55.23total credit determined at the pass-through entity level must be allowed to the members in 55.24proportion to their respective interests in the pass-through entity. 55.25 (c) An investment made in a qualified business from the assets of a retirement 55.26plan is deemed to be the retirement plan participant's investment for the purpose of this 55.27subdivision if a separate account is maintained for the plan participant and the participant 55.28directly controls where the account assets are invested. 55.29 (d) The investment must be made on or after the certification effective date and 55.30must be at risk in the business to be eligible for the tax credit under this subdivision. 55.31An investment for which a credit is received under this subdivision must remain in the 55.32qualified business for at least three years. Investments placed in escrow do not qualify 55.33for the credit. 56.1 (e) The entire amount of an investment for which a credit is claimed under this 56.2subdivision must be expended by the qualified business for plant, equipment, research and 56.3development, marketing and sales activity, or working capital for the qualified business. 56.4 (f) A taxpayer who owns a controlling interest in the qualified business or who 56.5receives more than 50 percent of the taxpayer's gross annual income from the qualified 56.6business is not entitled to a credit under this subdivision. A member of the immediate 56.7family of a taxpayer disqualified by this subdivision is not entitled to the credit under this 56.8subdivision. For purposes of this subdivision, "immediate family" means the taxpayer's 56.9spouse, parent, sibling, or child or the spouse of any such person. 56.10 (g) The commissioner may disallow any credit otherwise allowed under this 56.11subdivision if any representation by a business in the application for certification as a 56.12qualified business proves to be false or if the taxpayer or qualified business fails to satisfy 56.13any conditions under this subdivision or section 116J.8732 or any conditions consistent 56.14with those requirements otherwise determined by the commissioner. The commissioner 56.15has four years after the due date of the return or after the return was filed, whichever 56.16period expires later, to audit the credit and assess additional tax that may be found due 56.17to failure to comply with the provisions of this subdivision and section 116J.8732. The 56.18amount of any credit disallowed by the commissioner that reduced the taxpayer's income 56.19tax liability for any or all applicable tax years, plus penalty and interest as provided under 56.20chapter 289A, must be paid by the taxpayer. 56.21 (h) If the amount of the credit under this subdivision for any taxable year exceeds 56.22the limitations under paragraph (a), the excess is a credit carryover to each of the four 56.23succeeding taxable years. The entire amount of the excess unused credit for the taxable 56.24year must be carried first to the earliest of the taxable years to which the credit may be 56.25carried. The amount of the unused credit that may be added under this paragraph may 56.26not exceed the taxpayer's liability for tax, less the credit for the taxable year. Each year, 56.27the aggregate amount of seed capital investment tax credit allowed for investments under 56.28this subdivision is limited to allocations that a border city has available for tax reductions 56.29in border city enterprise zones under section 469.169. The city must annually notify the 56.30commissioner of the amount of its section 469.169 allocations that it wishes to use to 56.31provide credits under this paragraph and the commissioner, after verifying the available 56.32allocation, shall implement the limit under this paragraph. If investments in qualified 56.33businesses reported to the commissioner exceed the limit on credits for investments 56.34imposed by this subdivision, the credit must be allowed to taxpayers in the chronological 56.35order of their investments in qualified businesses as determined from the forms filed 56.36under section 116J.8732. 57.1EFFECTIVE DATE.This section is effective July 1, 2008, for taxable years 57.2beginning after December 31, 2007, and only applies to investments made after the 57.3qualified business has been certified by the commissioner of employment and economic 57.4development. 57.5 Sec. 10. Minnesota Statutes 2006, section 383E.20, is amended to read: 57.6383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS. 57.7 The Anoka County Board may, by resolution adopted by a four-sevenths vote, 57.8issue and sell general obligation bonds of the county in the manner provided in chapter 57.9475 to acquire, better, and construct county library buildings. The bonds shall not be 57.10subject to the requirements of sections 475.57 to 475.59. The maturity years and amounts 57.11and interest rates of each series of bonds shall be fixed so that the maximum amount of 57.12principal and interest to become due in any year, on the bonds of that series and of all 57.13outstanding series issued by or for the purposes of libraries, shall not exceed an amount 57.14equal to the lesser of (i) .01 percent of the taxable market value of all taxable property in 57.15the county, excluding any taxable property taxed by any city for the support of any free 57.16public library, or (ii) $1,250,000. When the tax levy authorized in this section is collected, 57.17it shall be appropriated and credited to a debt service fund for the bonds. The tax levy for 57.18the debt service fund under section 475.61 shall be reduced by the amount available or 57.19reasonably anticipated to be available in the fund to make payments otherwise payable 57.20from the levy pursuant to section 475.61. 57.21EFFECTIVE DATE.This section is effective the day after the governing body 57.22of Anoka County and its chief clerical officer timely complete their compliance with 57.23Minnesota Statutes, section 645.021, subdivisions 2 and 3. 57.24 Sec. 11. Minnesota Statutes 2006, section 469.033, subdivision 6, is amended to read: 57.25 Subd. 6. Operation area as taxing district, special tax. All of the territory 57.26included within the area of operation of any authority shall constitute a taxing district for 57.27the purpose of levying and collecting special benefit taxes as provided in this subdivision. 57.28All of the taxable property, both real and personal, within that taxing district shall be 57.29deemed to be benefited by projects to the extent of the special taxes levied under this 57.30subdivision. Subject to the consent by resolution of the governing body of the city in and 57.31for which it was created, an authority may levy a tax upon all taxable property within that 57.32taxing district. The tax shall be extended, spread, and included with and as a part of 57.33the general taxes for state, county, and municipal purposes by the county auditor, to be 57.34collected and enforced therewith, together with the penalty, interest, and costs. As the tax, 58.1including any penalties, interest, and costs, is collected by the county treasurer it shall be 58.2accumulated and kept in a separate fund to be known as the "housing and redevelopment 58.3project fund." The money in the fund shall be turned over to the authority at the same time 58.4and in the same manner that the tax collections for the city are turned over to the city, and 58.5shall be expended only for the purposes of sections 469.001 to 469.047. It shall be paid 58.6out upon vouchers signed by the chair of the authority or an authorized representative. 58.7The amount of the levy shall be an amount approved by the governing body of the city, but 58.8shall not exceed 0.0144 0.0185 percent of taxable market value for the current levy year, 58.9notwithstanding section . The authority shall each year formulate and file a budget 58.10in accordance with the budget procedure of the city in the same manner as required of 58.11executive departments of the city or, if no budgets are required to be filed, by August 1. 58.12The amount of the tax levy for the following year shall be based on that budget. 58.13EFFECTIVE DATE.This section is effective for property taxes payable in 2009. 58.14 Sec. 12. Minnesota Statutes 2006, section 469.177, is amended by adding a subdivision 58.15to read: 58.16 Subd. 13. Correction of errors. (a) If the county auditor, as a result of an error 58.17or mistake, decertifies a district, fails to certify a district, incorrectly certifies a district, 58.18or otherwise fails to correctly compute the amount of increment, the county auditor may 58.19undertake one or more of the following actions to correct the error or mistake: 58.20 (1) certify the original tax capacity of the affected parcels at the appropriate value 58.21for a later taxes payable year and extend the duration of the district, in whole or in part, 58.22to compensate; 58.23 (2) recertify the affected parcels and extend duration of the district, in whole or in 58.24part, to compensate; 58.25 (3) recertify or correct the original tax capacity rate for the district; 58.26 (4) adjust the tax rates of one or more of the taxing districts imposing taxes in the tax 58.27increment financing districts for one or more years to recoup amounts advanced by the 58.28county or other entity to the authority to replace the reduced increments; or 58.29 (5) take other appropriate action so that the amount of increment compensates for or 58.30offsets the error or mistake and correctly reflects application of the law. 58.31 (b) At least 30 days before exercising authority under this subdivision, the county 58.32auditor must notify the authority and the municipality, in writing, of the intent to do so, 58.33including supporting information to describe reason for the proposed action. The authority 58.34and municipality may waive the time requirement of this paragraph. If the city or the 58.35authority objects before expiration of the 30-day period, the matter must be submitted to 59.1the commissioner of revenue for a decision or resolution of the dispute. The commissioner 59.2of revenue shall consult with the Office of the State Auditor before making a decision. 59.3 (c) The county auditor must notify the commissioner of revenue and the Office 59.4of the State Auditor of corrections made under this subdivision. The notification must 59.5be made in the form and manner and at the time prescribed by the commissioner. The 59.6commissioner shall incorporate the corrections in the tax increment financing district tax 59.7list supplement, as appropriate. 59.8EFFECTIVE DATE.This section is effective the day following final enactment 59.9and applies to all tax increment financing districts, regardless of when the request for 59.10certification was made or when the error occurred. 59.11 Sec. 13. Minnesota Statutes 2006, section 469.319, is amended to read: 59.12469.319 REPAYMENT OF TAX BENEFITS BY BUSINESSES THAT NO 59.13LONGER OPERATE IN A ZONE. 59.14 Subdivision 1. Repayment obligation. A business must repay the amount of the 59.15total tax reduction benefits listed in section 469.315 and any refund under section 59.16in excess of tax liability, received during the two years immediately before it (1) ceased to 59.17operate in the zone, if the business: 59.18 (1) received tax reductions authorized by section ; and 59.19 (2)(i) did not meet the goals specified in an agreement entered into with the applicant 59.20that states any obligation the qualified business must fulfill in order to be eligible for tax 59.21benefits. The commissioner of employment and economic development may extend for 59.22up to one year the period for meeting any goals provided in an agreement. The applicant 59.23may extend the period for meeting other goals by documenting in writing the reason 59.24for the extension and attaching a copy of the document to its next annual report to the 59.25commissioner of employment and economic development; or 59.26 (ii) ceased to operate its facility located within the job opportunity building zone 59.27perform a substantial level of activities described in the business subsidy agreement, or 59.28(2) otherwise ceases ceased to be or is not a qualified business, other than those subject to 59.29the provisions of section 469.3191. 59.30 Subd. 1a. Repayment obligation of businesses not operating in zone. Persons 59.31that receive benefits without operating a business in a zone are subject to repayment 59.32under this section if the business for which those benefits relate is subject to repayment 59.33under this section. Such persons are deemed to have ceased performing in the zone on 60.1the same day that the qualified business for which the benefits relate becomes subject to 60.2repayment under subdivision 1. 60.3 Subd. 2. Definitions. (a) For purposes of this section, the following terms have 60.4the meanings given. 60.5 (b) "Business" means any person who that received tax benefits enumerated in 60.6section 469.315. 60.7 (c) "Commissioner" means the commissioner of revenue. 60.8 (d) "Persons that receive benefits without operating a business in a zone" means 60.9persons that claim benefits under section 469.316, subdivision 2 or 4, as well as persons 60.10that own property leased by a qualified business and are eligible for benefits under section 60.11272.02, subdivision 64, or 297A.68, subdivision 37, paragraph (b). 60.12 Subd. 3. Disposition of repayment. The repayment must be paid to the state to 60.13the extent it represents a state tax reduction and to the county to the extent it represents a 60.14property tax reduction. Any amount repaid to the state must be deposited in the general 60.15fund. Any amount repaid to the county for the property tax exemption must be distributed 60.16to the local governments taxing authorities with authority to levy taxes in the zone in the 60.17same manner provided for distribution of payment of delinquent property taxes. Any 60.18repayment of local sales taxes must be repaid to the commissioner for distribution to the 60.19city or county imposing the local sales tax. 60.20 Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under 60.21chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must 60.22file an amended return with the commissioner of revenue and pay any taxes required 60.23to be repaid within 30 days after ceasing to do business in the zone becoming subject 60.24to repayment under this section. The amount required to be repaid is determined by 60.25calculating the tax for the period or periods for which repayment is required without 60.26regard to the exemptions and credits allowed under section 469.315. 60.27 (b) For the repayment of taxes imposed under chapter 297B, a business must pay any 60.28taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner 60.29of revenue, within 30 days after ceasing to do business in the zone becoming subject 60.30to repayment under this section. 60.31 (c) For the repayment of property taxes, the county auditor shall prepare a tax 60.32statement for the business, applying the applicable tax extension rates for each payable 60.33year and provide a copy to the business and to the taxpayer of record. The business must 60.34pay the taxes to the county treasurer within 30 days after receipt of the tax statement. 61.1The business or the taxpayer of record may appeal the valuation and determination of the 61.2property tax to the Tax Court within 30 days after receipt of the tax statement. 61.3 (d) The provisions of chapters 270C and 289A relating to the commissioner's 61.4authority to audit, assess, and collect the tax and to hear appeals are applicable to the 61.5repayment required under paragraphs (a) and (b). The commissioner may impose civil 61.6penalties as provided in chapter 289A, and the additional tax and penalties are subject to 61.7interest at the rate provided in section 270C.40, from 30 days after ceasing to do business 61.8in the job opportunity building zone becoming subject to repayment under this section 61.9until the date the tax is paid. 61.10 (e) If a property tax is not repaid under paragraph (c), the county treasurer shall add 61.11the amount required to be repaid to the property taxes assessed against the property for 61.12payment in the year following the year in which the treasurer discovers that the business 61.13ceased to operate in the job opportunity building zone auditor provided the statement 61.14under paragraph (c). 61.15 (f) For determining the tax required to be repaid, a tax reduction of a state or local 61.16sales or use tax is deemed to have been received on the date that the tax would have 61.17been due if the taxpayer had not been entitled to the exemption or on the date a refund 61.18was issued for a refundable tax credit. good or service was purchased or first put to a 61.19taxable use. In the case of an income tax or franchise tax, including the credit payable 61.20under section 469.318, a reduction of tax is deemed to have been received for the two 61.21most recent tax years that have ended prior to the date that the business became subject to 61.22repayment under this section. In the case of a property tax, a reduction of tax is deemed to 61.23have been received for the taxes payable in the year that the business became subject to 61.24repayment under this section and for the taxes payable in the prior year. 61.25 (g) The commissioner may assess the repayment of taxes under paragraph (d) 61.26any time within two years after the business ceases to operate in the job opportunity 61.27building zone becomes subject to repayment under subdivision 1, or within any period of 61.28limitations for the assessment of tax under section 289A.38, whichever period is later. The 61.29county auditor may send the statement under paragraph (c) any time within three years 61.30after the business becomes subject to repayment under subdivision 1. 61.31 (h) A business is not entitled to any income tax or franchise tax benefits, including 61.32refundable credits, for any part of the year in which the business becomes subject to 61.33repayment under this section nor for any year thereafter. Property is not exempt from tax 61.34under section 272.02, subdivision 64, for any taxes payable in the year following the year 61.35in which the property became subject to repayment under this section nor for any year 61.36thereafter. A business is not eligible for any sales tax benefits beginning with goods 62.1or services purchased or first put to a taxable use on the day that the business becomes 62.2subject to repayment under this section. 62.3 Subd. 5. Waiver authority. (a) The commissioner may waive all or part of a 62.4repayment required under subdivision 1, if the commissioner, in consultation with 62.5the commissioner of employment and economic development and appropriate officials 62.6from the local government units in which the qualified business is located, determines 62.7that requiring repayment of the tax is not in the best interest of the state or the local 62.8government units and the business ceased operating as a result of circumstances beyond 62.9its control including, but not limited to: 62.10 (1) a natural disaster; 62.11 (2) unforeseen industry trends; or 62.12 (3) loss of a major supplier or customer. 62.13 (b)(1) The commissioner shall waive repayment required under subdivision 1a if 62.14the commissioner has waived repayment by the operating business under subdivision 1, 62.15unless the person that received benefits without having to operate a business in the zone 62.16was a contributing factor in the qualified business becoming subject to repayment under 62.17subdivision 1; 62.18 (2) the commissioner shall waive the repayment required under subdivision 1a, even 62.19if the repayment has not been waived for the operating business if: 62.20 (i) the person that received benefits without having to operate a business in the zone 62.21and the business that operated in the zone are not related parties as defined in section 62.22267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and 62.23 (ii) actions of the person were not a contributing factor in the qualified business 62.24becoming subject to repayment under subdivision 1. 62.25 Subd. 6. Reconciliation. Where this section is inconsistent with section 116J.994, 62.26subdivision 3 , paragraph (e), or 6, or any other provisions of sections 116J.993 to 62.27116J.995 , this section prevails. 62.28EFFECTIVE DATE.The amendment to subdivision 4, paragraph (c), of this 62.29section is effective the day following final enactment. The amendment to subdivision 62.304, paragraph (f), is effective retroactively from January 1, 2008, and applies to all 62.31businesses that become subject to this section in 2008. The rest of this section is effective 62.32retroactively from January 1, 2004, except that for violations that occur before the day 62.33following final enactment, this section does not apply if the business has repaid the 62.34benefits or the commissioner has granted a waiver. 63.1 Sec. 14. [469.3191] BREACH OF AGREEMENTS BY BUSINESSES THAT 63.2CONTINUE TO OPERATE IN ZONE. 63.3 (a) A "business in violation of its business subsidy agreement but not subject to 63.4section 469.319" means a business that is operating in violation of the business subsidy 63.5agreement but maintains a level of operations in the zone that does not subject it to the 63.6repayment provisions of section 469.319, subdivision 1, clause (1). 63.7 (b) A business described in paragraph (a) that does not sign a new or amended 63.8business subsidy agreement, as authorized under paragraph (h), is subject to repayment 63.9of benefits under section 469.319 from the day that it ceases to perform in the zone a 63.10substantial level of activities described in the business subsidy agreement. 63.11 (c) A business described in paragraph (a) ceases being a qualified business after the 63.12last day that it has to meet the goals stated in the agreement. 63.13 (d) A business is not entitled to any income tax or franchise tax benefits, including 63.14refundable credits, for any part of the year in which the business is no longer a qualified 63.15business under paragraph (c), and thereafter. A business is not eligible for sales tax 63.16benefits beginning with goods or services purchased or put to a taxable use on the day that 63.17it is no longer a qualified business under paragraph (c). Property is not exempt from tax 63.18under section 272.02, subdivision 64, for any taxes payable in the year following the year 63.19in which the business is no longer a qualified business under paragraph (c), and thereafter. 63.20 (e) A business described in paragraph (a) that wants to resume eligibility for benefits 63.21under section 469.315 must request that the commissioner of employment and economic 63.22development determine the length of time that the business is ineligible for benefits. The 63.23commissioner shall determine the length of ineligibility by applying the proportionate 63.24level of performance under the agreement to the total duration of the zone as measured 63.25from the date that the business subsidy agreement was executed. The length of time 63.26must not be less than one full year for each tax benefit listed in section 469.315. The 63.27commissioner of employment and economic development and the appropriate local 63.28government officials shall consult with the commissioner of revenue to ensure that the 63.29period of ineligibility includes at least one full year of benefits for each tax. 63.30 (f) The length of ineligibility determined under paragraph (e) must be applied by 63.31reducing the zone duration for the property by the duration of the ineligibility. 63.32 (g) The zone duration of property that has been adjusted under paragraph (f) must 63.33not be altered again to permit the business additional benefits under section 469.315. 63.34 (h) A business described in paragraph (a) becomes eligible for benefits available 63.35under section 469.315 by entering into a new or amended business subsidy agreement 63.36with the appropriate local government unit. The new or amended agreement must cover 64.1a period beginning from the date of ineligibility under the original business subsidy 64.2agreement, through the zone duration determined by the commissioner under paragraph 64.3(f). No exemption of property taxes under section 272.02, subdivision 64, is available 64.4under the new or amended agreement for property taxes due or paid before the date of 64.5the final execution of the new or amended agreement, but unpaid taxes due after that 64.6date need not be paid. 64.7 (i) A business that violates the terms of an agreement authorized under paragraph 64.8(h) is permanently barred from seeking benefits under section 469.315 and is subject to 64.9the repayment provisions under section 469.319 effective from the day that the business 64.10ceases to operate as a qualified business in the zone under the second agreement. 64.11EFFECTIVE DATE.This section is effective retroactively from January 1, 2004. 64.12For violations that occur before the day following final enactment, this section does not 64.13apply if the business has repaid the benefits or the commissioner has granted a waiver. 64.14 Sec. 15. [469.3192] PROHIBITION AGAINST AMENDMENTS TO BUSINESS 64.15SUBSIDY AGREEMENT. 64.16 Except as authorized under section 469.3191, under no circumstance shall terms 64.17of any agreement required as a condition for eligibility for benefits listed under section 64.18469.315 be amended to change job creation, job retention, or wage goals included in 64.19the agreement. 64.20EFFECTIVE DATE.This section is effective the day following final enactment 64.21and applies to all agreements executed before, on, or after the effective date. 64.22 Sec. 16. [469.3193] CERTIFICATION OF CONTINUING ELIGIBILITY FOR 64.23JOBZ BENEFITS. 64.24 (a) By December 1 of each year, every qualified business must certify to the 64.25commissioner of revenue, on a form prescribed by the commissioner of revenue, whether 64.26it is in compliance with any agreement required as a condition for eligibility for benefits 64.27listed under section 469.315. A business that fails to submit the certification, or any 64.28business, including those still operating in the zone, that submits a certification that 64.29the commissioner of revenue later determines materially misrepresents the business's 64.30compliance with the agreement, is subject to the repayment provisions under section 64.31469.319 from January 1 of the year in which the report is due or the date that the business 64.32became subject to section 469.319, whichever is earlier. Any such business is permanently 64.33barred from obtaining benefits under section 469.315. For purposes of this section, the bar 65.1applies to an entity and also applies to any individuals or entities that have an ownership 65.2interest of at least 20 percent of the entity. 65.3 (b) Before the sanctions under paragraph (a) apply to a business that fails to 65.4submit the certification, the commissioner of revenue shall send notice to the business, 65.5demanding that the certification be submitted within 30 days and advising the business 65.6of the consequences for failing to do so. The commissioner of revenue shall notify 65.7the commissioner of employment and economic development and the appropriate job 65.8opportunity subzone administrator whenever notice is sent to a business under this 65.9paragraph. 65.10 (c) The certification required under this section is public. 65.11 (d) The commissioner of revenue shall promptly notify the commissioner of 65.12employment and economic development of all businesses that certify that they are not 65.13in compliance with the terms of their business subsidy agreement and all businesses 65.14that fail to file the certification. 65.15EFFECTIVE DATE.This section is effective the day following final enactment. 65.16 Sec. 17. Minnesota Statutes 2006, section 469.3201, is amended to read: 65.17469.3201 JOBZ EXPENDITURE LIMITATIONS; AUDITS STATE 65.18AUDITOR; AUDITS OF JOB OPPORTUNITY BUILDING ZONES AND 65.19BUSINESS SUBSIDY AGREEMENTS. 65.20 The Tax Increment Financing, Investment and Finance Division of the Office of the 65.21State Auditor must annually audit the creation and operation of all job opportunity building 65.22zones and business subsidy agreements entered into under Minnesota Statutes, sections 65.23469.310 to 469.320. To the extent necessary to perform this audit, the state auditor may 65.24request from the commissioner of revenue tax return information of taxpayers who are 65.25eligible to receive tax benefits authorized under section 469.315. To the extent necessary 65.26to perform this audit, the state auditor may request from the commissioner of employment 65.27and economic development wage detail report information required under section 268.044 65.28of taxpayers eligible to receive tax benefits authorized under section 469.315. 65.29EFFECTIVE DATE.This section is effective the day following final enactment. 65.30 Sec. 18. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision 65.31to read: 65.32 Subd. 1n. Obligations. After July 1, 2008, in addition to other authority in this 65.33section, the council may issue certificates of indebtedness, bonds, or other obligations 65.34under this section in an amount not exceeding $33,000,000 for capital expenditures as 66.1prescribed in the council's regional transit master plan and transit capital improvement 66.2program and for related costs, including the costs of issuance and sale of the obligations. 66.3EFFECTIVE DATE.This section is effective July 1, 2008, and applies in the 66.4counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 66.5 Sec. 19. Minnesota Statutes 2006, section 474A.047, subdivision 1, is amended to read: 66.6 Subdivision 1. Eligibility. (a) An issuer may only use the proceeds from residential 66.7rental bonds if the proposed project meets the following requirements: 66.8 (1) the proposed residential rental project meets the requirements of section 142(d) 66.9of the Internal Revenue Code regarding the incomes of the occupants of the housing; and 66.10 (2) the maximum rent for at least 20 percent of the units in the proposed residential 66.11rental project do not exceed the area fair market rent or exception fair market rents for 66.12existing housing, if applicable, as established by the federal Department of Housing and 66.13Urban Development. The rental rates of units in a residential rental project for which 66.14project-based federal assistance payments are made are deemed to be within the rent 66.15limitations of this clause. 66.16 (b) The proceeds from residential rental bonds may be used for a project for which 66.17project-based federal rental assistance payments are made only if: 66.18 (1) the owner of the project enters into a binding agreement with the Minnesota 66.19Housing Finance Agency under which the owner is obligated to extend any existing 66.20low-income affordability restrictions and any contract or agreement for rental assistance 66.21payments for the maximum term permitted, including any renewals thereof; and 66.22 (2) the Minnesota Housing Finance Agency certifies that project reserves will be 66.23maintained at closing of the bond issue and budgeted in future years at the lesser of: 66.24 (i) the level described in Minnesota Rules, part 4900.0010, subpart 7, item A, 66.25subitem (2), effective May 1, 1997; or 66.26 (ii) the level of project reserves available prior to the bond issue, provided that 66.27additional money is available to accomplish repairs and replacements needed at the time 66.28of bond issue. 66.29EFFECTIVE DATE.This section is effective the day following final enactment. 66.30 Sec. 20. Laws 1995, chapter 264, article 5, section 46, subdivision 2, is amended to 66.31read: 66.32 Subd. 2. Limitation on use of tax increments. (a) All revenues derived from tax 66.33increments must be used in accordance with the housing replacement district plan. The 66.34revenues must be used solely to pay the costs of site acquisition, relocation, demolition 67.1of existing structures, site preparation, and pollution abatement on parcels identified in 67.2the housing replacement district plan, as well as public improvements and administrative 67.3costs directly related to those parcels. 67.4 (b) Notwithstanding paragraph (a), the city of Minneapolis may use revenues 67.5derived from tax increments from its housing replacement district for activities related 67.6to parcels not identified in the housing replacement plan, but which would qualify for 67.7inclusion under section 45, subdivision 1, paragraph (b), clauses (1) to (3). 67.8 (c) Notwithstanding paragraph (a), or any other provisions of sections 44 to 47, the 67.9Crystal Economic Development Authority may use revenues derived from tax increments 67.10from its housing replacement districts numbers one and two as if those districts were 67.11housing districts under Minnesota Statutes, section 469.174, subdivision 11, provided that 67.12eligible activities may be located anywhere in the city without regard to the boundaries of 67.13housing replacement district numbers one and two or any project area. 67.14EFFECTIVE DATE.This section applies to revenues from the housing replacement 67.15districts, regardless of when they were received, and is effective the day following final 67.16enactment and for the city of Minneapolis, upon compliance by the governing body of 67.17the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3, and, for 67.18the city of Crystal, upon compliance by the governing body of the city of Crystal with 67.19Minnesota Statutes, section 645.021, subdivision 3. 67.20 Sec. 21. Laws 2003, chapter 127, article 10, section 31, subdivision 1, is amended to 67.21read: 67.22 Subdivision 1. District extension. (a) The governing body of the city of Hopkins 67.23may elect to extend the duration of its redevelopment tax increment financing district 67.242-11 by up to four additional years. 67.25 (b) Notwithstanding any law to the contrary, effective upon approval of this 67.26subdivision, no increments may be spent on activities located outside of the area of the 67.27district, other than: 67.28 (1) to pay administrative expenses; or 67.29 (2) to pay the costs of housing activities, provided that expenditures under this 67.30clause may not exceed 20 percent of the total tax increments from the district. 67.31EFFECTIVE DATE.This section is effective the day following final enactment. 67.32 Sec. 22. Laws 2006, chapter 259, article 10, section 14, subdivision 1, is amended to 67.33read: 67.34 Subdivision 1. Definitions. (a) "City" means the city of Minneapolis. 68.1 (b) "Homeless assistance tax increment district" means a contiguous area of the 68.2city that: 68.3 (1) is no larger than six eight acres; 68.4 (2) is located within the boundaries of a city municipal development district; and 68.5 (3) contains at least two shelters for homeless persons that have been owned or 68.6operated by nonprofit corporations that (i) are qualified charitable organizations under 68.7section 501(c)(3) of the United States Internal Revenue Code, (ii) have operated such 68.8homeless facilities within the district for at least five years, and (iii) have been recipients 68.9of emergency services grants under Minnesota Statutes, section 256E.36. 68.10EFFECTIVE DATE.This section is effective upon compliance by the city of 68.11Minneapolis with Minnesota Statutes, section 645.021. 68.12 Sec. 23. Laws 2008, chapter 154, article 9, section 23, is amended to read: 68.13 Sec. 23. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT; 68.14SPECIAL RULES. 68.15 (a) If the city elects upon the adoption of a tax increment financing plan for a district, 68.16the rules under this section apply to a redevelopment tax increment financing district 68.17established by the city of Fridley or the housing and redevelopment authority of the city. 68.18The redevelopment tax increment district includes city may include one or more of the 68.19following parcels and adjacent railroad property and in the redevelopment tax increment 68.20district, which shall be referred to as the Northstar Transit Station District: parcel 68.21numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018, 68.22223024120012, 223024120011, 223024120005, 223024120004, 223024120003, 68.23223024120013, 223024120008, 223024120007, 223024120006, 223024130005, 68.24223024130010, 223024130011, 223024130003, 153024440039, 153024440037, 68.25153024440041, 153024440042, 223024110013, 223024110016, 223024110017, 68.26223024140008, 223024130002, 223024420004, 223024410002, 223024410003, 68.27223024110008, 223024110007, 223024110019, 223024110018, 223024110003, 68.28223024140003, 223024140009, 223024140002, 223024140010, and 223024410007. 68.29 (b) The requirements for qualifying a redevelopment tax increment district under 68.30Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located 68.31within the Northstar Transit Station District, which are deemed eligible for inclusion 68.32in a redevelopment tax increment district. 68.33 (c) In addition to the costs permitted by Minnesota Statutes, section 469.176, 68.34subdivision 4j , eligible expenditures within the Northstar Transit Station District include 68.35those costs necessary to provide for the construction and land acquisition for a tunnel 69.1under the Burlington Northern Santa Fe railroad tracks to allow access to the Northstar 69.2Commuter Rail. 69.3 (d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763, 69.4subdivision 2 , the city of Fridley may expend increments generated from its tax increment 69.5financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota 69.6Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing 69.7districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District. 69.8 (e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, 69.9does not apply to the Northstar Transit Station District or to tax increment financing 69.10districts Nos. 11, 12, and 13. 69.11 (f) The use of revenues for decertification under Minnesota Statutes, section 69.12469.1763, subdivision 4 , does not apply to tax increment financing districts Nos. 11, 69.1312, and 13. 69.14 (g) The city may establish additional tax increment financing districts consisting 69.15of parcels identified in paragraph (a), which it does not include in the Northstar Transit 69.16District, under general law. The provisions of paragraph (c) apply to these districts and the 69.17permitted pooling percentage for the districts under Minnesota Statutes, section 469.1763, 69.18subdivision 2, is increased to 30 percent. The provisions of paragraphs (b), (d), (e), and 69.19(f) do not apply to these districts. The authority to create districts under this authority 69.20expires on December 30, 2017. 69.21EFFECTIVE DATE.This section is effective upon approval by the governing body 69.22of the city of Fridley and upon compliance by the city with Minnesota Statutes, section 69.23645.021, subdivision 3. 69.24 Sec. 24. Laws 2008, chapter 154, article 9, section 24, is amended to read: 69.25 Sec. 24. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING; 69.26EXPENDITURES OUTSIDE DISTRICT. 69.27 Subdivision 1. Expenditures outside district. Notwithstanding the provisions of 69.28Minnesota Statutes, section sections 469.176, subdivision 4d, and 469.1763, subdivision 69.292 , or any other law to the contrary, the city of New Brighton may expend increments 69.30generated from its tax increment financing district No. 26 to facilitate eligible activities 69.31districts 9, 20, and 26. The increments may be used to pay eligible expenses as permitted 69.32by Minnesota Statutes, section 469.176, subdivision 4e 4j, outside the boundaries of 69.33tax increment financing district No. 26 districts 9, 20, and 26, but only within the area 69.34described in Laws 1998, chapter 389, article 11, section 24, subdivision 1, and commonly 70.1referred to as the Northwest Quadrant. Minnesota Statutes, section 469.1763, subdivisions 70.23 and 4, do not apply to expenditures permitted by this section. 70.3 Subd. 2. District duration extension. Notwithstanding the provisions of Minnesota 70.4Statutes, section 469.176, subdivision 1b, or any other law to the contrary, the duration 70.5limits that apply to redevelopment tax increment financing districts numbers 31 and 32 70.6established under Laws 1998, chapter 389, article 11, section 24, and hazardous substance 70.7subdistricts numbers 31A and 32A established under Minnesota Statutes, sections 469.174 70.8to 469.1799, are extended by four years. 70.9EFFECTIVE DATE.This section is effective upon approval by the governing body 70.10of the city of New Brighton and upon compliance by the city with Minnesota Statutes, 70.11section 645.021, subdivision 3. 70.12 Sec. 25. CITY OF AUSTIN; TAX INCREMENT FINANCING AUTHORITY. 70.13 Notwithstanding the requirements of Minnesota Statutes, section 469.1763, 70.14subdivision 3, that activities must be undertaken within a five-year period from the date of 70.15certification of tax increment financing district and notwithstanding the provisions of any 70.16other law, the governing body of the city of Austin may use tax increments from its Tax 70.17Increment Financing District No. 9 to reimburse the city's housing and redevelopment 70.18authority for money spent disposing of soils and debris in the tax increment financing 70.19district, as required by the Minnesota Pollution Control Agency. 70.20EFFECTIVE DATE.This section is effective upon compliance by the governing 70.21body of the city of Austin with the requirements of Minnesota Statutes, section 645.021. 70.22 Sec. 26. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR 70.23RULE. 70.24 The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that 70.25activities must be undertaken within a five-year period from the date of certification of a 70.26tax increment financing district, are increased to a ten-year period for the Port Authority 70.27of the City of Bloomington's Tax Increment Financing District No. 1-I, Bloomington 70.28Central Station. 70.29EFFECTIVE DATE.This section is effective upon compliance by the governing 70.30body of the Port Authority of the City of Bloomington with the requirements of Minnesota 70.31Statutes, section 645.021. 70.32 Sec. 27. CITY OF BLOOMINGTON; TAX INCREMENT FINANCING 70.33DISTRICT; PROJECT REQUIREMENTS. 71.1 Subdivision 1. Addition of parcels to Tax Increment Financing District No. 1-G. 71.2 Notwithstanding the provisions of Minnesota Statutes, section 469.175, subdivision 4, 71.3or any other law to the contrary, the governing bodies of the Port Authority of the city 71.4of Bloomington and the city of Bloomington may elect to eliminate certain real property 71.5from Tax Increment Financing District No. 1-C within Industrial Development District 71.6No. 1 Airport South in the city of Bloomington, Minnesota, and expand the boundaries of 71.7Tax Increment Financing District No. 1-G to include real property, which is described 71.8as follows: 71.9 (1) PARCEL C: That part of Lindau Lane lying westerly of 24th Avenue South and 71.10lying easterly of State Highway No. 77; and 71.11 (2) PARCEL D: Lot 1, Block 1, MALL OF AMERICA 3RD ADDITION, according 71.12to the recorded plat thereof, Hennepin County, Minnesota, Except that part of said Lot 1 71.13described as commencing at the most easterly corner of Lot 2, said Block 1, said MALL 71.14OF AMERICA 3RD ADDITION; thence on an assumed bearing of South 45 degrees 00 71.15minutes 00 seconds West, along the southeasterly line of said Lot 2, Block 1, MALL OF 71.16AMERICA 3RD ADDITION, a distance of 18.58 feet to the point of beginning of the 71.17land to be described: thence South 45 degrees 00 minutes 29 seconds East a distance of 71.1830.69 feet; thence South 89 degrees 59 minutes 52 seconds East a distance of 303.62 feet; 71.19thence South 0 degrees 00 minutes 08 seconds West a distance of 10.00 feet; thence North 71.2089 degrees 57 minutes 47 seconds East a distance of 55.90 feet; thence North 0 degrees 06 71.21minutes 52 minutes West a distance of 10.01 feet; thence North 89 degrees 59 minutes 04 71.22seconds East a distance of 332.04 feet; thence North 44 degrees 57 minutes 59 seconds 71.23East a distance 10.55 feet to the southwesterly line of Lot 3, Block 1, said MALL OF 71.24AMERICA 3RD ADDITION; thence South 45 degrees 00 minutes 00 seconds East along 71.25said southwesterly line of Lot 3, a distance of 244.08 feet to the most southerly southwest 71.26corner of said Lot 3; thence on a bearing of East along the south line of said Lot 3 a 71.27distance of 1.37 feet; thence South 0 degrees 10 minutes 07 seconds West a distance of 71.2830.07 feet; thence North 89 degrees 58 minutes 07 seconds East a distance of 83.84 feet; 71.29thence South 0 degrees 00 minutes 40 seconds West a distance of 540.08 feet; thence 71.30North 89 degrees 58 minutes 39 seconds West a distance of 53.64 feet; thence South 0 71.31degrees 02 minutes 43 seconds West a distance of 29.71 feet to the north line of Lot 4, 71.32Block 1, said MALL OF AMERICA 3RD ADDITION; thence on a bearing of West 71.33along said north line of Lot 4 a distance of 1.13 feet to the most northerly northwest 71.34corner of said Lot 4; thence South 45 degrees 00 minutes 00 seconds West along the 71.35northwesterly line of said Lot 4 a distance of 293.65 feet; thence North 45 degrees 03 71.36minutes 26 seconds West a distance of 59.81 feet; thence North 89 degrees 59 minutes 24 72.1seconds West a distance 277.25 feet; thence North 0 degrees 02 minutes 42 seconds East a 72.2distance of 10.21 feet; thence North 89 degrees 59 minutes 24 seconds West a distance of 72.355.93 feet; thence South 0 degrees 00 minutes 36 seconds West a distance of 10.17 feet; 72.4thence South 89 degrees 59 minutes 32 seconds West a distance of 261.98 feet; thence 72.5South 45 degrees 07 minutes 13 seconds West a distance of 70.69 feet to the northeasterly 72.6line of Lot 5, Block 1, said MALL OF AMERICA 3RD ADDITION; thence North 45 72.7degrees 00 minutes 00 seconds West along said northeasterly line of Lot 5 a distance of 72.8363.21 feet to the most northerly northeast corner of said Lot 5; thence on a bearing of 72.9West along the north line of said Lot 5 a distance of 1.74 feet; thence North 0 degrees 05 72.10minutes 14 seconds East a distance of 30.30 feet; thence South 89 degrees 56 minutes 58 72.11seconds West a distance of 81.56 feet; thence North 0 degrees 00 minutes 24 seconds East 72.12a distance of 497.92 feet; thence South 89 degrees 58 minutes 55 seconds East a distance 72.13of 123.79 feet; thence North 0 degrees 01 minutes 54 seconds East a distance of 30.06 feet 72.14to the south line of said Lot 2, Block 1, MALL OF AMERICA 3RD ADDITION; thence 72.15on a bearing of East along said south line of Lot 2, Block 1, MALL OF AMERICA 3RD 72.16ADDITION; thence on a bearing of East along said south line of Lot 2, Block 1, MALL 72.17OF AMERICA 3RD ADDITION, a distance of 1.22 feet to the most southerly southeast 72.18corner of said Lot 2, Block 1, MALL OF AMERICA 3RD ADDITION; thence North 45 72.19degrees 00 minutes 00 seconds East along said southeasterly line of Lot 2, Block 1, MALL 72.20OF AMERICA 3RD ADDITION, a distance of 264.05 feet to the point of beginning. 72.21 Subd. 2. Original tax capacity of Tax Increment Financing District No. 1-G. 72.22 Upon inclusion of the real property described above in the Tax Increment District No. 1-G, 72.23the Hennepin County auditor must increase the original tax capacity of Tax Increment 72.24District No. 1-G by $208,000. 72.25 Subd. 3. Use of increments. Notwithstanding Laws 1996, chapter 464, article 72.261, section 8, subdivision 3, paragraph (d), clauses (1) and (2), the tax increments, 72.27assessments, and other revenues derived from any portion of Tax Increment Financing 72.28District No. 1-G may be used: 72.29 (1) to pay debt service on revenue bonds issued under section 29; 72.30 (2) to reimburse or otherwise pay the developer for public improvements because 72.31of counted value resulting from investment in property in Tax Increment Financing 72.32District No. 1-G under section 9.2(05) of the restated contract for purchase and private 72.33redevelopment of land, by and among the city of Bloomington, the Port Authority of the 72.34city of Bloomington, and the Mall of America Company, dated May 31, 1988; and 72.35 (3) to pay the principal, premium, and interest on bonds, notes, or other obligations 72.36issued by the city of Bloomington or the Port Authority of the city of Bloomington to 73.1finance capital and related costs of public improvements in Tax Increment Financing 73.2District No. 1-G. In sections 27 to 30, "public improvements" are limited to public 73.3improvements for which tax increments may be expended under the tax increment 73.4financing plan for Tax Increment Financing District No. 1-G as amended November 73.515, 2001. 73.6 Subd. 4. Public hearing on district modification. When the governing bodies of 73.7the port authority or the city elect to exercise the authority provided in subdivision 1 to 73.8modify the districts, they must conduct a public hearing after published notice on the 73.9issue, with the meeting beginning between 6:00 p.m. and 7:00 p.m. on a weeknight. 73.10 Subd. 5. Construction of Mall of America phase II. (a) The governing bodies of 73.11the city of Bloomington and the Bloomington Port Authority, as a condition of providing 73.12tax increments or other financial assistance for parking facilities and other public 73.13improvements, must enter into an agreement with the developers of the project that ensures 73.14that the facility complies with the sustainable building guidelines in Minnesota Statutes, 73.15section 16B.325, and that it must be, to the greatest extent practicable, constructed of 73.16American-made steel. 73.17 (b) The agreement must prohibit any additional draw from an aquifer for the purpose 73.18of a man-made lake, waterpark, or similar entertainment venue. 73.19 (c) The agreement must also prohibit inclusion of an auditorium, theater, or similar 73.20live entertainment venue. This paragraph does not prohibit inclusion of multi-screen 73.21movie theaters, nightclubs, restaurants, or museums. 73.22 Subd. 6. Living wage. Any agreement to provide financial assistance to phase II of 73.23the Mall of America project must include a provision that requires payment of wages that 73.24meet the requirements of Minnesota Statutes, section 469.310, subdivision 11, paragraph 73.25(g), to persons employed on a full-time basis at the facility. This subdivision does not 73.26apply to seasonal or temporary employees or to internships or similar positions intended 73.27to provide career experience or training. This subdivision does not apply to nonprofit 73.28organizations, educational institutions, or businesses that employ fewer than 50 employees. 73.29 Subd. 7. Affordable access. To the extent determined by the governing body of 73.30the city or the port authority, any agreement to provide financial assistance to phase II 73.31of the Mall of America project must provide for affordable access to the amusement 73.32areas of the facility. 73.33 Subd. 8. Labor peace. As a condition to exercising the authority provided in 73.34subdivision 1, the governing bodies of the city of Bloomington and the Bloomington Port 73.35Authority shall require the developers of phase II of the Mall of America project to enter 74.1into a labor peace agreement with the labor organization which is most actively engaged in 74.2representing and attempting to represent hotel workers in Hennepin and Ramsey Counties. 74.3The labor peace agreement must be an enforceable agreement and must prohibit the labor 74.4organization and its members from engaging in any boycott or other activity advising 74.5customers not to patronize any hotel that is part of Phase II for at least the first five years 74.6of the hotel's operation, and must cover all operations at the hotel, other than construction, 74.7alteration, or repair of the premises separately owned and operated, which are conducted 74.8by lessees or tenants or under management agreements, except retail operations, including 74.9gift, jewelry, and clothing shops that have annual gross revenues of less than $250,000. 74.10 Subd. 9. Certificate of compliance; affirmative action. As a condition of 74.11exercising the authority provided in this section and sections 28 and 29, the governing 74.12bodies of the city of Bloomington and the Bloomington Port Authority must enter into an 74.13agreement with the developers of the project that requires each contractor or subcontractor 74.14in connection with construction of the project to comply with the requirements of 74.15Minnesota Statutes, section 363A.36, as if the contract were with a state agency or 74.16department. 74.17EFFECTIVE DATE.This section is effective the day after the governing body of 74.18the city of Bloomington and its chief clerical officer timely complete their compliance 74.19with Minnesota Statutes, section 645.021, subdivision 3, with respect to this section and 74.20section 30. 74.21 Sec. 28. CITY OF BLOOMINGTON; LOCAL TAXING AUTHORITY. 74.22 Subdivision 1. Additional taxes authorized; use of proceeds. Notwithstanding 74.23Minnesota Statutes, section 477A.016, or any other law, ordinance, or charter provision 74.24to the contrary, the governing body of the city of Bloomington may impose any or all of 74.25the taxes described in this section. The proceeds of any taxes imposed under this section 74.26or section 27, less refunds and the cost of collection, must be used to provide financing 74.27for parking facilities or other public improvements for the Mall of America phase II. The 74.28Port Authority of the city of Bloomington may, but is not required to, issue or cause 74.29the sale of bonds, a developer's note, or other obligations to finance the improvements. 74.30If a governmental entity other than the city of Bloomington issues the obligations used 74.31to finance the parking facilities and other public improvements, the city may transfer the 74.32funds available under this section and section 27 for financing the project to the entity 74.33that issued the bonds. 75.1 Subd. 2. Sales tax. The city of Bloomington may charter a special taxing authority, 75.2which is a separate political subdivision. The geographic area of the special taxing 75.3authority consists of Tax Increment Financing Districts No. 1-C and No. 1-G in the 75.4city. The city council is the governing body of the special taxing authority. The special 75.5taxing authority may impose, by resolution, a sales tax of not less than one-half of one 75.6percent and not more than one percent within its boundaries. The provisions of Minnesota 75.7Statutes, section 297A.99, except for subdivisions 2 and 3, govern the imposition, 75.8administration, collection, and enforcement of the tax authorized in this subdivision. 75.9 Subd. 3. Lodging tax. The city may impose, by ordinance, a tax of up to one 75.10percent on the gross receipts subject to the lodging tax under Minnesota Statutes, section 75.11469.190. This tax is in addition to any tax imposed under Minnesota Statutes, section 75.12469.190, and may be imposed within a tax district defined by the city council, which must 75.13include Tax Increment Districts No. 1-C and No. 1-G in the city of Bloomington and may 75.14include additional areas of the city, which are not required to be contiguous. 75.15 Subd. 4. Admissions and recreation tax. The city may impose, by ordinance, a tax 75.16of up to one percent on admissions to entertainment and recreational facilities and rental of 75.17recreation equipment at sites within a tax district defined by the city council, which must 75.18include Tax Increment Financing Districts No. 1-C and No. 1-G in the city of Bloomington 75.19and may include additional areas of the city, which are not required to be contiguous. 75.20 Subd. 5. Food and beverage tax. The city may impose, by ordinance, an additional 75.21sales tax of up to three percent on sales of food and beverages primarily for consumption 75.22on or off the premises by restaurants and places of refreshment as defined by resolution 75.23of the city within Tax Increment Financing Districts No. 1-C and No. 1-G in the city of 75.24Bloomington. 75.25 Subd. 6. Lodging taxes. Notwithstanding any law or ordinance, the city may 75.26use the unobligated proceeds of any existing city lodging tax attributable to imposition 75.27of the tax on lodging facilities constructed after the date of enactment of this act within 75.28Tax Increment Financing District No. 1-G. In this subdivision, "unobligated proceeds 75.29of any existing city lodging tax" means the proceeds of a lodging tax imposed by the 75.30city of Bloomington prior to May 1, 2008, to the extent the proceeds of the tax are not 75.31contractually pledged to any other specific uses. Lodging tax proceeds derived from 75.32lodging facilities constructed after the date of enactment of this act within Tax Increment 75.33Financing District No. 1-G that have been required by law to be expended for promotion 75.34of the metropolitan sports area or for marketing and promotion of the city by the city 76.1convention bureau may be expended for the purposes described in subdivision 1, 76.2notwithstanding the dedications in those laws. 76.3EFFECTIVE DATE.This section is effective the day after compliance by the 76.4governing body of the city of Bloomington with Minnesota Statutes, section 645.021, 76.5subdivision 3, with respect to this section and section 30. 76.6 Sec. 29. MALL OF AMERICA PHASE II PARKING FACILITY REVENUE 76.7BONDS. 76.8 Subdivision 1. Issuing authority. (a) The city of Bloomington may contract with 76.9any of the following authorities to issue and sell revenue bonds for the purposes and 76.10in the amounts specified in subdivision 2: 76.11 (1) the commissioner of finance, exercising the authority granted under this section 76.12and Minnesota Statutes, sections 16A.672 to 16A.675; 76.13 (2) the Agricultural and Economic Development Board, exercising the powers 76.14granted under this section and Minnesota Statutes, chapter 41A; or 76.15 (3) the Minnesota Public Facilities Authority, exercising the powers granted under 76.16this section and Minnesota Statutes, chapter 446A. 76.17 (b) The authority granted in this section is in addition to the statutes in paragraph 76.18(a) and notwithstanding any contrary provisions in them. 76.19 (c) The contract must include as a party the developer of phase II of the Mall of 76.20America and may include as a party any other entity deemed appropriate by the city of 76.21Bloomington, the issuing authority, and the developer. 76.22 Subd. 2. Purposes and amounts. (a) The revenue bonds may be issued in a single 76.23or multiple issues and sold for the following purposes: 76.24 (1) to pay the costs to design, construct, furnish, and equip parking facilities and 76.25related public improvements for phase II of the Mall of America; 76.26 (2) to pay the costs of issuance, debt service, and bond insurance or other credit 76.27enhancements, and to fund reserves; and 76.28 (3) to refund bonds issued under this section. 76.29 (b) The amount of bonds that may be issued for the purposes of paragraph (a), clause 76.30(1), may not exceed per issue the estimated cost from time to time of the parking facilities 76.31and other public improvements, including soft costs; the amount of bonds that may be 76.32issued for the purposes of paragraph (a), clauses (2) and (3), is not limited. 76.33 Subd. 3. Revenue sources. The debt service on the bonds is payable only from the 76.34following sources: 77.1 (1) the tax revenues referred to in section 28; and 77.2 (2) other nonstate revenues pledged to the payment of the bonds. 77.3 Subd. 4. Sale and issuance; proceeds. (a) The issuing authority may sell and issue 77.4the bonds on the terms and conditions the issuing authority determines to be in the best 77.5interests of the state after reviewing an agreement between the city of Bloomington and 77.6the developer of phase II of the Mall of America setting out the terms upon which the city 77.7of Bloomington will use the proceeds of the bond sales. The bonds may be sold at public 77.8or private sale at a price or prices the issuing authority finds appropriate. The issuing 77.9authority may enter any agreements or pledges the issuing authority determines necessary 77.10or useful to sell the bonds that are not inconsistent with this section. 77.11 (b) The city may enter into a preliminary agreement with the issuing authority under 77.12which the city agrees, if the revenue bonds are not issued, to pay or cause to be paid the 77.13costs and expenses incurred by the issuing authority relating to the proposed issuance of 77.14the revenue bonds. 77.15 (c) The proceeds of the bonds issued under this section must be credited to a special 77.16Mall of America revenue bond proceeds account with the issuing authority or a trustee 77.17and are appropriated to the issuing authority for payment to the city of Bloomington 77.18for the purposes specified in subdivision 2. 77.19 Subd. 5. Security. The issuing authority may irrevocably pledge and appropriate 77.20for payment of the revenue bonds and premium, if any, and interest thereon the revenues 77.21it receives from the city of Bloomington derived from tax increments and taxes the city 77.22is authorized to impose under section 28. By a resolution of the issuing authority or 77.23by an indenture of trust executed under its authority, the issuing authority may make 77.24any and all covenants with bondholders, or with a trustee for the bondholders, that are 77.25determined by the issuing authority to be necessary and proper to ensure the marketability 77.26of the revenue bonds and the segregation and application of the revenues pledged to the 77.27payment of the revenue bonds. Any tax revenues transferred to the issuing authority 77.28that are not required by the terms of the bonds or other obligations issued under this 77.29section, or related documents, to be applied to the payment of the principal, premium, or 77.30interest on the bonds or other obligations, the funding of reserves, or the payment of fees, 77.31costs, or reimbursements, must be transferred to the city of Bloomington. The revenue 77.32bonds are not general obligations of the issuing authority but are payable solely from the 77.33revenues received by the city of Bloomington and the proceeds thereof that are pledged 77.34to the payment of the revenue bonds. The revenue bonds must not be taken into account 77.35for purposes of any limitation on the principal amount of bonds of the issuing authority 77.36under Minnesota Statutes, section 446A.12, subdivision 1, or other law. The proceeds 78.1of the revenue bonds to be applied to the costs of parking facilities and other public 78.2improvements may be made available by the issuing authority to the city of Bloomington 78.3for those purposes by a loan agreement or other agreement between the issuing authority 78.4and the city. The city may, by resolution or in a loan agreement or other instrument with 78.5the issuing authority, pledge to the payment of the revenue bonds issued by the authority 78.6all or a portion of the revenues collected from the imposition of the taxes the city is 78.7authorized to impose under section 28 and make any or all covenants determined by the 78.8city and the issuing authority to be necessary and proper for the security or marketability 78.9of the revenue bonds to be issued by the issuing authority and the payment of the costs and 78.10expenses incurred by the issuing authority relating to the revenue bonds. 78.11 Subd. 6. Refunding bonds. The issuing authority may issue bonds to refund 78.12outstanding bonds issued under subdivision 1, including the payment of any redemption 78.13premiums on the bonds and any interest accrued or to accrue to the first redemption date 78.14after delivery of the refunding bonds. The proceeds of the refunding bonds may, in the 78.15discretion of the issuing authority, be applied to the purchases or payment at maturity of the 78.16bonds to be refunded, or the redemption of the outstanding bonds on the first redemption 78.17date after delivery of the refunding bonds and may, until so used, be placed in escrow to 78.18be applied to the purchase, retirement, or redemption. Refunding bonds issued under this 78.19subdivision must be issued and secured in the manner provided by the issuing authority. 78.20 Subd. 7. Not a general or moral obligation. Bonds issued under this section 78.21are not general or moral obligations of the issuing authority, and the full faith, credit, 78.22and taxing powers of the state are not pledged for their payment. The bonds may not be 78.23paid directly, in whole or in part, from a tax of statewide application on any class of 78.24property, income, transaction, or privilege. Payment of the bonds is limited to the revenues 78.25explicitly authorized to be pledged under this section. The state neither makes nor has 78.26a moral obligation to pay the bonds if the pledged revenues and other legal security for 78.27them is insufficient. 78.28 Subd. 8. Trustee. The issuing authority may contract with and appoint a trustee 78.29for bond holders. The trustee has the powers and authority vested in it by the issuing 78.30authority under the bond and trust indentures. 78.31 Subd. 9. Pledges. Any pledge made of money, property, or other revenues to the 78.32bonds by the issuing authority is valid and binding from the time the pledge is made. The 78.33money or property pledged and later received by the issuing authority is immediately 78.34subject to the lien of the pledge without any physical delivery of the property or money or 78.35further act, and the lien of any pledge is valid and binding as against all parties having 79.1claims of any kind in tort, contract, or otherwise against the issuing authority, whether or 79.2not those parties have notice of the lien or pledge. The resolution, indenture, agreement, 79.3or other instrument by which a pledge is created need not be recorded. Any tax revenues 79.4pledged to the issuing authority that are not required by the terms of the bonds or other 79.5obligations issued under this section, or related documents, to be applied to the payment 79.6of the principal, premium, or interest on the bonds or other obligations, the funding of 79.7reserves, or the payment of fees, costs, or reimbursements, must be released from the 79.8pledge to the bonds and other obligations in accordance with the terms of the bonds, 79.9other obligations, and related documents. 79.10 Subd. 10. Bonds; purchase and cancellation. The issuing authority, subject to 79.11agreements with bondholders that may then exist, may, out of any money available for 79.12the purpose, purchase bonds of the issuing authority at a price not exceeding (1) if the 79.13bonds are then redeemable, the redemption price then applicable plus accrued interest, 79.14or (2) if the bonds are not redeemable, the redemption price applicable on the first date 79.15after the purchase upon which the bonds become subject to redemption plus accrued 79.16interest to that date. 79.17 Subd. 11. State pledge against impairment of contracts. The state pledges and 79.18agrees with the holders of any bonds that the state will not limit or alter the rights vested in 79.19the issuing authority to fulfill the terms of any agreements made with the bondholders, or 79.20in any way impair the rights and remedies of the holders until the bonds, together with 79.21interest on them, with interest on any unpaid installments of interest, and all costs and 79.22expenses in connection with any action or proceeding by or on behalf of the bondholders, 79.23are fully met and discharged. The issuing authority may include this pledge and agreement 79.24of the state in any agreement with the holders of bonds issued under this section. 79.25EFFECTIVE DATE.This section is effective the day after the governing body of 79.26the city of Bloomington and its chief clerical officer timely complete their compliance 79.27with Minnesota Statutes, section 645.021, subdivision 3, with respect to this section and 79.28section 30. 79.29 Sec. 30. STATE REVIEW; BUT-FOR DETERMINATION; DEVELOPMENT 79.30AGREEMENT. 79.31 Subdivision 1. Required conditions. All of the conditions required under this 79.32section must be satisfied before the city and authority may contract with an issuing 79.33authority as provided in section 29. This section only applies if the city and authority 79.34contract with an issuing authority under section 29. 80.1 Subd. 2. Definitions. (a) For purposes of this section, the following terms have 80.2the meanings given. 80.3 (b) "Authority" means the port authority of the city of Bloomington. 80.4 (c) "City" means the city of Bloomington. 80.5 (d) "Commissioner" means the commissioner of finance. 80.6 Subd. 3. Required disclosure. The authority, city, and developer shall provide to 80.7the commissioner on a confidential basis all of the materials and information necessary 80.8to carry out the commissioner's responsibilities under this section. The developer shall 80.9provide information or access to its financial records and books as requested by the 80.10commissioner on a confidential basis. 80.11 Subd. 4. But-for determination. The commissioner shall determine, in writing, 80.12whether the assistance to be funded by the provisions of sections 27 to 29 is necessary to 80.13make the project financially feasible. The determination must be based on full disclosure 80.14by the developer of all costs and other information on the project and a determination 80.15by the commissioner that the amount of assistance to be provided is required to permit 80.16a competitive market return on the investment. The commissioner shall consider an 80.17executed letter of intent to issue financing for the project from a licensed financial 80.18institution or institutions that requires the funding described in this section as a condition 80.19of placing the financing to be evidence of the financial necessity of such assistance and 80.20must subsequently affirm in writing whether assistance is necessary to make the project 80.21financially feasible. 80.22 Subd. 5. Development agreement required. The city, authority, developer, and 80.23commissioner must enter into a development agreement that includes, at least, the 80.24following provisions: 80.25 (1) the minimum private improvements that must be undertaken to qualify for 80.26assistance; 80.27 (2) the developer's contribution to the parking facility or facilities; 80.28 (3) the dates for commencement and completion of the facility; 80.29 (4) a requirement that the assistance will be used solely for construction of the 80.30parking facilities and other public improvements and to reimburse the costs of the state in 80.31evaluation of the development and negotiation of the development agreement; 80.32 (5) the authority is the owner of the parking facilities; 80.33 (6) construction of the parking facilities and all private improvement construction 80.34are subject to payment of prevailing wage as defined in Minnesota Statutes, section 81.1177.42, subdivision 7, and construction of the parking facilities is subject to competitive 81.2bidding requirements, unless constructed under Minnesota Statutes, section 469.071; 81.3 (7) all costs for operation, maintenance, capital improvement and repair of the 81.4parking facilities must be paid by the developer; and 81.5 (8) the developer shall be allowed to utilize bond funds based on progress work in 81.6place for the construction of the parking facilities as design and construction progresses 81.7based on costs incurred and certified by the developer, port authority, and independent 81.8inspecting architect or engineer on a monthly basis subject to the provision of a completion 81.9guarantee by the developer or performance bond assuring the completion of the minimum 81.10parking and public improvements. The developer may assign its right to reimbursement 81.11under the development agreement as collateral for any loan to fund the construction. 81.12 Subd. 6. Recovery of state costs. The developer shall advance all of the costs of 81.13the commissioner to evaluate the need for the assistance and negotiate the development 81.14agreement as a condition of commencement of the negotiation. Notwithstanding the 81.15provisions of Minnesota Statutes, section 16C.095, the commissioner may contract with 81.16outside entities for any assistance needed in developing this development agreement. 81.17 Subd. 7. LCPFP Review. The commissioner shall submit the completed 81.18development agreement to the Legislative Commission on Planning and Fiscal Policy for 81.19approval. The development agreement is not effective until approved by the commission, 81.20provided that, if the commission has not approved or rejected the development agreement 81.21within 120 days of its submission by the commissioner, it will be deemed to have been 81.22approved. 81.23EFFECTIVE DATE.This section is effective the day after the governing body of 81.24the city of Bloomington and its chief clerical officer timely complete their compliance 81.25with Minnesota Statutes, section 645.021, subdivision 3, with respect to this section and 81.26section 29. 81.27 Sec. 31. CITY OF DULUTH; EXTENSION OF TIME FOR ACTIVITY IN TAX 81.28INCREMENT FINANCING DISTRICTS. 81.29 Subdivision 1. District No. 20. The requirements of Minnesota Statutes, section 81.30469.1763, subdivision 3, that activities must be undertaken within a five-year period from 81.31the date of certification of a tax increment financing district, must be considered to be met 81.32for Duluth Economic Development Authority Tax Increment Financing District No. 20 if 81.33the activities are undertaken within ten years from the date of certification of the district. 82.1 Subd. 2. District No. 21. The requirements of Minnesota Statutes, section 82.2469.1763, subdivision 3, that activities must be undertaken within a five-year period from 82.3the date of certification of a tax increment financing district, must be considered to be met 82.4for Duluth Economic Development Authority Tax Increment Financing District No. 21 if 82.5the activities are undertaken within ten years from the date of certification of the district. 82.6EFFECTIVE DATE.This section is effective upon compliance by the governing 82.7body of the city of Duluth with the requirements of Minnesota Statutes, section 645.021, 82.8subdivision 3. 82.9 Sec. 32. CITY OF WELLS; DISPOSITION OF TAX INCREMENT FINANCING 82.10REVENUES. 82.11 Notwithstanding the provisions of Minnesota Statutes, section 469.174, subdivision 82.1225, the following are deemed not to be "increments," "tax increments," or "revenues 82.13derived from tax increment" for purposes of the redevelopment district in the city of 82.14Wells, identified as Downtown Development Program 1, for amounts received after 82.15decertification of the district: 82.16 (1) rents paid by private tenants for use of a building acquired in whole or in part 82.17with tax increments; and 82.18 (2) proceeds from the sale of the building. 82.19EFFECTIVE DATE.This section is effective upon compliance by the governing 82.20body of the city of Wells with the requirements of Minnesota Statutes, section 645.021, 82.21subdivision 3. 82.22 Sec. 33. MULTICOUNTY HOUSING AND REDEVELOPMENT AUTHORITY 82.23LEVY AUTHORITY. 82.24 Notwithstanding Minnesota Statutes, section 469.033, subdivision 6, or any other 82.25law to the contrary, the governing body of the Northwest Minnesota Multicounty Housing 82.26and Redevelopment Authority, upon approval by a two-thirds majority of all its members, 82.27may levy an amount not to exceed 25 percent of the total levy permitted under Minnesota 82.28Statutes, section 469.033, subdivision 6, without approval of that levy by the governing 82.29body of the city or county within which the authority operates. The authority to levy the 82.30remainder of the total levy permitted under that provision remains subject to approval 82.31by the governing body of the city or county. For purposes of the levy authorized under 82.32this section only, the Northwest Minnesota Multicounty Housing and Redevelopment 82.33Authority is considered a special taxing jurisdiction as provided in Minnesota Statutes, 82.34section 275.066. 83.1EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in 83.22009, and is repealed effective for taxes levied in 2013, payable in 2014, and thereafter. 83.3 Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY. 83.4 (a) The provisions of this section apply to redevelopment tax increment financing 83.5districts created by the Housing and Redevelopment Authority in and for the city of 83.6Oakdale in the areas comprised of the parcels with the following parcel identification 83.7numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056; 83.83102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059; 83.93102921320060; and 3102921320061; and (2) 3102921330005 and 3102921330004. 83.10 (b) For a district subject to this section, the Housing and Redevelopment Authority 83.11may, when requesting certification of the original tax capacity of the district under 83.12Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district 83.13be certified as the tax capacity of the land. 83.14 (c) The authority to request certification of a district under this section expires on 83.15July 1, 2013. 83.16EFFECTIVE DATE; LOCAL APPROVAL.This section is effective upon 83.17approval by the governing body of the city of Oakdale and compliance with Minnesota 83.18Statutes, section 645.021, subdivision 3. 83.19 Sec. 35. DAKOTA COUNTY COMMUNITY DEVELOPMENT AUTHORITY; 83.20PLAN MODIFICATION. 83.21 Notwithstanding Minnesota Statutes, section 469.175, subdivision 4, the Dakota 83.22County Community Development Authority may designate additional property to be 83.23acquired by the authority for a tax increment financing project without meeting the 83.24requirements for approval of an original tax increment financing plan if the property: 83.25 (1) consists of one or more parcels under common ownership; 83.26 (2) is acquired from a willing seller; 83.27 (3) is acquired for purposes of development as a housing project as defined in 83.28Minnesota Statutes, section 469.174, subdivision 11; and 83.29 (4) the acquisition is approved by the governing body of the authority after holding 83.30a public hearing thereon after published notice in a newspaper of general circulation in 83.31the municipality in which the property is located at least once not less than ten days nor 83.32more than 30 days prior to the date of the hearing. The published notice must include a 83.33map depicting the property and the general area of the municipality within which the 84.1property is located. The hearing may be held before or at the time of authority approval 84.2of the acquisition. 84.3EFFECTIVE DATE.This section is effective upon compliance by the governing 84.4body of the Dakota County Community Development Authority with the requirements of 84.5Minnesota Statutes, section 645.021, subdivision 3. 84.6 Sec. 36. CITY OF ST. PAUL; TAX INCREMENT FINANCING DISTRICT. 84.7 Subdivision 1. Authorization. Notwithstanding the provisions of any other 84.8law, upon approval of the governing body of the city of St. Paul, the Housing and 84.9Redevelopment Authority of the city of St. Paul may establish a redevelopment tax 84.10increment financing district comprised of the properties included in the existing downtown 84.11and Seventh Place tax increment district (County #82). Notwithstanding Minnesota 84.12Statutes, section 469.177, subdivision 6, if certification of the district is requested by July 84.1331, 2008, the certification will be recognized by the county auditor in determining local 84.14tax rates for taxes payable in 2009 and subsequent years. The district created under this 84.15section terminates December 31, 2023. The city may create the district under this section 84.16only if it enters into an agreement with Ramsey County to pay the county annually out of 84.17the increment from this district an amount equal to the tax that would have been payable 84.18to the county on the captured tax capacity of the district had the district not been created. 84.19 Subd. 2. Special rules. The requirements for qualifying a redevelopment district 84.20under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located 84.21within the district. Minnesota Statutes, section 469.176, subdivisions 4j and 4l, do not 84.22apply to the district. The original tax capacity of the district is $1,801,052. 84.23 Subd. 3. Authorized expenditures. Tax increment from the district may be 84.24expended only to pay principal and interest on bond obligations issued by the St. Paul 84.25Housing and Redevelopment Authority in 1996 for the convention center, including 84.26payment of principal and interest on any bonds issued to repay the bonds or loans. All 84.27such expenditures are deemed to be activities within the district under Minnesota Statutes, 84.28section 469.1763, subdivisions 2, 3, and 4. 84.29 Subd. 4. Adjusted net tax capacity. The captured tax capacity of the district must 84.30be included in the adjusted net tax capacity of the city, county, and school district for the 84.31purposes of determining local government aid, education aid, and county program aid. 84.32The county auditor shall report to the commissioner of revenue the amount of the captured 84.33tax capacity for the district at the time the assessment abstracts are filed. 85.1EFFECTIVE DATE.This section is effective upon compliance with Minnesota 85.2Statutes, section 645.021, subdivision 3. 85.3 Sec. 37. CITY OF MINNEAPOLIS; TAX INCREMENT FINANCING 85.4DISTRICT. 85.5 Subdivision 1. Authorization. Notwithstanding the provisions of any other law, 85.6the city of Minneapolis may establish a redevelopment tax increment financing district 85.7comprised of the properties included in the existing tax increment districts in the city 85.8that are exempt under Minnesota Statutes, section 469.179, subdivision 1, and were not 85.9decertified before July 1, 2008. The district created under this section may be certified 85.10after January 1, 2010, and terminates no later than December 31, 2020. The city may 85.11create the district under this section only if it enters into an agreement with Hennepin 85.12County to pay the county annually out of the increment from this district an amount equal 85.13to the tax that would have been payable to the county on the captured tax capacity of the 85.14district had the district not been created. 85.15 Subd. 2. Special rules. The requirements for qualifying a redevelopment district 85.16under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located 85.17within the district. Minnesota Statutes, section 469.176, subdivisions 4j and 4l, do not 85.18apply to the district. The original tax capacity of the district is $2,731,854. 85.19 Subd. 3. Authorized expenditures. Tax increment from the district may be 85.20expended only to pay principal and interest on bond obligations issued by the city of 85.21Minneapolis or the Minneapolis Community Development Agency for Target Center, 85.22including payment of principal and interest on any bonds issued to repay bonds or loans 85.23and for neighborhood revitalization purposes. All such expenditures are deemed to be 85.24activities within the district under Minnesota Statutes, section 469.1763, subdivisions 2, 85.253, and 4. 85.26 Subd. 4. Adjusted net tax capacity. The captured tax capacity of the district must 85.27be included in the adjusted net tax capacity of the city, county, and school district for the 85.28purposes of determining local government aid, education aid, and county program aid. 85.29The county auditor shall report to the commissioner of revenue the amount of the captured 85.30tax capacity for the district at the time the assessment abstracts are filed. 85.31EFFECTIVE DATE.This section is effective upon compliance with Minnesota 85.32Statutes, section 645.021, subdivision 3. 85.33 Sec. 38. TEMPORARY INCREASE IN ANNUAL VOLUME CAP. 86.1 Subdivision 1. Applicability. This section applies if federal tax law is amended 86.2after April 28, 2008, to provide a temporary increase in the annual volume cap for private 86.3activity bonds for housing purposes for calendar year 2008 or 2009, and applies only to the 86.4amount of the annual volume cap attributable to the temporary increase for those purposes. 86.5 Subd. 2. Definitions. As used in this section, "annual volume cap," "bonding 86.6authority," "commissioner," "federal tax law," and "housing pool" have the meanings given 86.7in Minnesota Statutes, section 474A.02. As used in this section, "agency" and "city" have 86.8the meanings given in Minnesota Statutes, section 474A.061, subdivision 2a, paragraph 86.9(c). As used in this section, "carryforward" means the ability to issue obligations in a year 86.10subsequent to the year in which an allocation of bonding authority was obtained under this 86.11section as provided in section 146(f) of federal tax law. 86.12 Subd. 3. Allocations. (a) The commissioner shall determine the aggregate dollar 86.13amount attributable to the temporary increase in the annual volume cap for housing 86.14purposes. Of this amount, the commissioner shall make the following allocations for 2008: 86.15 (1) 43 percent to the housing pool, of which 31 percent of the allocation is reserved 86.16for single-family housing programs for a period ending on the earlier of: 86.17 (i) October 31, 2008, or October 31, 2009, if the increase is made available for 86.18calendar year 2009; or 86.19 (ii) 180 days after the allocation by the commissioner of the temporary increase 86.20in the volume cap; 86.21 (2) 30 percent to the agency; 86.22 (3) 12 percent to the city of Minneapolis; 86.23 (4) nine percent to the city of St. Paul; and 86.24 (5) six percent to the Dakota County Community Development Agency for the 86.25county of Dakota and all political subdivisions located within the county. 86.26 (b) Allocations provided under this subdivision must be used for mortgage bonds or 86.27residential rental project bonds. 86.28 (c) Data on the home purchase price amount, mortgage amount, income, household 86.29size, and race of the households served with the proceeds of mortgage bonds and 86.30mortgage credit certificates using an allocation under this section in a calendar year 86.31must be submitted by each issuer to the agency by December 31 of the following year. 86.32Compliance by the agency with the provisions of Minnesota Statutes, section 462A.073, 86.33subdivision 5, shall be deemed to be in compliance by the agency with the reporting 86.34requirements of this paragraph. 86.35 (d) Any amount allocated under paragraph (a), clause (2), (3), (4), or (5), may be 86.36transferred as provided in Minnesota Statutes, section 474A.04, subdivision 6. 87.1 Subd. 4. Housing pool. Any amounts allocated to the housing pool under 87.2subdivision 3 that are not reserved for single-family housing programs must be allocated 87.3according to Minnesota Statutes, section 474A.061, subdivisions 2a and 4, subject to 87.4the following conditions: 87.5 (1) other amounts in the housing pool, if any, must be allocated from the housing 87.6pool before any allocation is made from amounts attributable to the temporary increase in 87.7annual volume cap; 87.8 (2) any amount of the temporary increase in the annual volume cap remaining in 87.9the housing pool on the last Monday of July 2008, or on the last Monday of July 2009, if 87.10the temporary increase in annual volume cap is made available for calendar year 2009, or 87.11that is allocated to the housing pool under subdivision 3, thereafter shall remain in the 87.12housing pool for allocation until the last Monday in November 2008, or the last Monday 87.13in November 2009, if the temporary increase in the annual volume is made available 87.14for calendar year 2009; 87.15 (3) any allocation of the temporary increase in the annual volume cap that is 87.16canceled under Minnesota Statutes, section 474A.061, subdivision 4, shall be returned to 87.17the housing pool for reallocation, unless the cancellation occurs after the last Monday in 87.18November 2008, or after the last Monday in November 2009, if the temporary increase in 87.19the annual volume is made available for calendar year 2009, in which case the canceled 87.20allocation is allocated to the agency; and 87.21 (4) any bonding authority attributable to the temporary increase in the annual 87.22volume cap that has not been allocated on December 1, 2008, or on December 1, 2009, if 87.23the temporary increase in the annual volume is made available for calendar year 2009, is 87.24allocated to the agency. 87.25 Subd. 5. Single-family housing programs. (a) Bonding authority reserved in the 87.26housing pool for single-family housing programs under subdivision 3 is available for 87.27single-family housing programs for cities that applied in January 2008, and received an 87.28allocation under Minnesota Statutes, section 474A.061, subdivision 2a, in 2008. If the 87.29temporary increase in the annual volume is made available for calendar year 2009, the 87.30bonding authority reserved in the housing pool for single-family housing programs under 87.31subdivision 3 is available for single-family housing programs for cities that applied in 87.32January 2009, and received an allocation under Minnesota Statutes, section 474A.061, 87.33subdivision 2a, in 2009. The agency shall receive an allocation for mortgage bonds 87.34pursuant to this subdivision. For a period of time determined by the agency, the agency 87.35may accept applications from the cities for the volume cap. 88.1 (b) The agency may issue bonds on behalf of participating cities. The agency shall 88.2request an allocation from the commissioner for all applicants and the commissioner 88.3shall allocate the requested amount to the agency. Allocations shall be awarded by the 88.4commissioner through the last Monday in November 2008 for applications received by 88.54:30 p.m. on the Monday of the week preceding an allocation. If the temporary increase in 88.6the annual volume is made available for calendar year 2009, the commissioner shall award 88.7allocations through the last Monday in November 2009 for applications received by 4:30 88.8p.m. on the Monday of the week preceding an allocation. 88.9 Allocations must be made for each loan on a first-come, first-served basis among 88.10the cities. The agency shall submit an application fee under Minnesota Statutes, section 88.11474A.03, subdivision 4, and an application deposit equal to two percent of the requested 88.12allocation to the commissioner when requesting an allocation from the housing pool 88.13under this subdivision. After awarding an allocation and receiving a notice of issuance 88.14for mortgage bonds issued on behalf of the participating cities, the commissioner shall 88.15transfer the application deposit to the agency. 88.16 (c) Total allocations from the housing pool for single-family housing programs 88.17under this subdivision may not exceed 31 percent of the allocation to the housing pool 88.18under subdivision 3 until November 1, 2008. If the temporary increase in the annual 88.19volume is made available for calendar year 2009, the total allocations from the housing 88.20pool for single-family housing programs under this subdivision may not exceed 31 percent 88.21of the allocation to the housing pool under subdivision 3 until November 1, 2009. 88.22 (d) An allocation awarded to the agency for mortgage bonds under this subdivision 88.23may be carried forward by the agency as provided in subdivision 6. 88.24 Subd. 6. Carryforward. Any issuer that receives an allocation under this section 88.25may carry forward the allocation to the extent permitted by federal tax law. The provisions 88.26of Minnesota Statutes, section 474A.04, subdivision 1a, do not apply to the carryforward. 88.27EFFECTIVE DATE.This section is effective the day following final enactment. 88.28ARTICLE 6 88.29PROPERTY TAXES 88.30 Section 1. Minnesota Statutes 2006, section 126C.41, subdivision 2, is amended to read: 88.31 Subd. 2. Retired employee health benefits. A district may levy an amount up to the 88.32amount the district is required by the collective bargaining agreement in effect on March 88.3330, 1992, to pay for health insurance or unreimbursed medical expenses for licensed 88.34and nonlicensed employees who have terminated services in the employing district and 88.35withdrawn from active teaching service or other active service, as applicable, before July 89.11, 1992 1998, if a sunset clause is in effect for the current collective bargaining agreement. 89.2The total amount of the levy each year may not exceed $600,000. 89.3EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 89.4thereafter. 89.5 Sec. 2. Minnesota Statutes 2006, section 270C.85, subdivision 2, is amended to read: 89.6 Subd. 2. Powers and duties. The commissioner shall have and exercise the 89.7following powers and duties in administering the property tax laws. 89.8 (a) Confer with, advise, and give the necessary instructions and directions to local 89.9assessors and local boards of review throughout the state as to their duties under the 89.10laws of the state. 89.11 (b) Direct proceedings, actions, and prosecutions to be instituted to enforce the 89.12laws relating to the liability and punishment of public officers and officers and agents of 89.13corporations for failure or negligence to comply with the provisions of the property tax 89.14laws, and cause complaints to be made against local assessors, members of boards of 89.15equalization, members of boards of review, or any other assessing or taxing officer, to the 89.16proper authority, for their removal from office for misconduct or negligence of duty. 89.17 (c) Require county attorneys to assist in the commencement of prosecutions in 89.18actions or proceedings for removal, forfeiture, and punishment, for violation of the 89.19property tax laws in their respective districts or counties. 89.20 (d) Require town, city, county, and other public officers to report information as to 89.21the assessment of property, and such other information as may be needful in the work of 89.22the commissioner, in such form as the commissioner may prescribe. 89.23 (e) Transmit to the governor, on or before the third Monday in December of each 89.24even-numbered year, and to each member of the legislature, on or before November 89.2515 of each even-numbered year, the report of the department for the preceding years, 89.26showing all the taxable property subject to the property tax laws and the value of the 89.27same, in tabulated form. 89.28 (f) Inquire into the methods of assessment and taxation and ascertain whether the 89.29assessors faithfully discharge their duties. 89.30 (g) Assist local assessors in determining the estimated market value of industrial 89.31special-use property. For purposes of this paragraph, "industrial special-use property" 89.32means property that: 89.33 (1) is designed and equipped for a particular type of industry; 89.34 (2) is not easily adapted to some other use due to the unique nature of the facilities; 89.35 (3) has facilities totaling at least 75,000 square feet in size; and 90.1 (4) has a total estimated market value of $10,000,000 or greater based on the 90.2assessor's preliminary determination. 90.3EFFECTIVE DATE.This section is effective for assessment year 2009 and 90.4thereafter, for taxes payable in 2010 and thereafter. 90.5 Sec. 3. Minnesota Statutes 2006, section 272.02, subdivision 55, is amended to read: 90.6 Subd. 55. Electric generation facility; personal property. Notwithstanding 90.7subdivision 9, clause (a), attached machinery and other personal property which is part of 90.8an electric generating facility that meets the requirements of this subdivision is exempt. 90.9At the time of construction, the facility must (i) be designated as an innovative energy 90.10project as defined in section 216B.1694, (ii) be within a tax relief area as defined in 90.11section 273.134, (iii) have access to existing railroad infrastructure within less than three 90.12miles, (iv) have received by resolution approval from the governing body of the county 90.13and township or city in which the proposed facility is to be located for the exemption 90.14of personal property under this subdivision, and (v) be designed to host at least 500 90.15megawatts of electrical generation. 90.16 Construction of the first 500 megawatts of the facility must be commenced after 90.17January 1, 2006, and before January 1, 2010 2012. Construction of up to an additional 750 90.18megawatts of generation must be commenced before January 1, 2015. Property eligible 90.19for this exemption does not include electric transmission lines and interconnections or gas 90.20pipelines and interconnections appurtenant to the property or the facility. To qualify for an 90.21exemption under this subdivision, the owner of the electric generation facility must have 90.22an agreement with the host county, township or city, and school district, for payment in 90.23lieu of personal property taxes to the host county, township or city, and school district. 90.24 Sec. 4. Minnesota Statutes 2006, section 272.02, subdivision 84, is amended to read: 90.25 Subd. 84. Electric generation facility; personal property. Notwithstanding 90.26subdivision 9, clause (a), attached machinery and other personal property which is part 90.27of a 10.3 megawatt run-of-the-river hydroelectric generation facility and that meets the 90.28requirements of this subdivision is exempt. At the time of construction, the facility must: 90.29 (1) utilize between 12 and 16 turbine generators at a dam site existing on March 90.3031, 1994; 90.31 (2) be located on land within 3,000 feet of a 13.8 kilovolt distribution substation; and 90.32 (3) be eligible to receive a renewable energy production incentive payment under 90.33section 216C.41. 91.1 Construction of the facility must be commenced after April 30, 2006, and before 91.2January 1, 2009 2011. Property eligible for this exemption does not include electric 91.3transmission lines and interconnections or gas pipelines and interconnections appurtenant 91.4to the property or the facility. 91.5 Sec. 5. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 91.6to read: 91.7 Subd. 88. Fergus Falls historical zone. (a) Property located in the area of the 91.8campus of the former state regional treatment center in the city of Fergus Falls, including 91.9the five buildings and associated land that were acquired by the city prior to January 1, 91.102007, is exempt from ad valorem taxes levied under chapter 275. 91.11 (b) The exemption applies for 15 calendar years from the date specified by resolution 91.12of the governing body of the city of Fergus Falls. For the final three assessment years of 91.13the duration limit, the exemption applies to the following percentages of estimated market 91.14value of the property: 91.15 (1) for the third to the last assessment year of the duration, 75 percent; 91.16 (2) for the second to the last assessment year of the duration, 50 percent; and 91.17 (3) for the last assessment year of the duration, 25 percent. 91.18EFFECTIVE DATE.This section is effective for property taxes payable in 2009 91.19and thereafter. 91.20 Sec. 6. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 91.21to read: 91.22 Subd. 89. Electric generation facility; personal property. (a) Notwithstanding 91.23subdivision 9, paragraph (a), attached machinery and other personal property which is 91.24part of a simple-cycle combustion-turbine electric generation facility that exceeds 150 91.25megawatts of installed capacity and that meets the requirements of this subdivision is 91.26exempt. At the time of construction, the facility must: 91.27 (1) utilize natural gas as a primary fuel; 91.28 (2) be owned by an electric generation and transmission cooperative; 91.29 (3) be located within one mile of an existing 16-inch natural gas pipeline and a 91.3069-kilovolt and a 230-kilovolt high-voltage electric transmission line; 91.31 (4) be designed to provide peaking, emergency backup, or contingency services; 91.32 (5) have received a certificate of need under section 216B.243 demonstrating 91.33demand for its capacity; and 92.1 (6) have received by resolution the approval from the governing bodies of the county 92.2and the city in which the proposed facility is to be located for the exemption of personal 92.3property under this subdivision. 92.4 (b) Construction of the facility must be commenced after January 1, 2008, and 92.5before January 1, 2012. Property eligible for this exemption does not include electric 92.6transmission lines and interconnections or gas pipelines and interconnections appurtenant 92.7to the property or the facility. 92.8EFFECTIVE DATE.This section is effective for the 2008 assessment payable in 92.92009 and thereafter. 92.10 Sec. 7. [272.0213] LEASED SEASONAL-RECREATIONAL LAND. 92.11 A county board may elect, by resolution, to exempt from taxation, including the 92.12tax under section 273.19, qualified lands. "Qualified lands" for purposes of this section 92.13means property that: 92.14 (1) is owned by a county, city, town, the state, or the federal governments; 92.15 (2) is rented by the entity for noncommercial seasonal-recreational or noncommercial 92.16seasonal-recreational residential use; and 92.17 (3) was rented for the purposes specified in clause (2) and was exempt from taxation 92.18for property taxes payable in 2008. 92.19EFFECTIVE DATE.This section is effective beginning for taxes payable in 2009. 92.20 Sec. 8. [273.0645] COMMISSIONER REVIEW OF LOCAL ASSESSMENT 92.21PRACTICES. 92.22 The commissioner of revenue must review the assessment practices in a taxing 92.23jurisdiction if requested in writing by a qualifying number of property owners in that 92.24taxing jurisdiction. The request must be signed by the greater of: 92.25 (1) ten percent of the registered voters who voted in the last general election; or 92.26 (2) five property owners. 92.27 The request must identify the city, town, or county and describe why a review is 92.28sought for that taxing jurisdiction. The commissioner must conduct the review in a 92.29reasonable amount of time and report the findings to the county board of the affected 92.30county, to the affected city council or town board, if the review is for a specific city or 92.31town, and to the property owner designated in the request as the person to receive the 92.32report on behalf of all the property owners who signed the request. The commissioner 92.33must also provide the report electronically to all property owners who signed the request 92.34and provided an e-mail address in order to receive the report electronically. 93.1EFFECTIVE DATE.This section is effective the day following final enactment. 93.2 Sec. 9. Minnesota Statutes 2006, section 273.11, subdivision 14a, is amended to read: 93.3 Subd. 14a. Vacant land platted on or after August 1, 2001; located in 93.4metropolitan counties. (a) Except as provided in subdivision 14c, all land platted on or 93.5after August 1, 2001, located in a metropolitan county, and not improved with a permanent 93.6structure, shall be assessed as provided in this subdivision. The assessor shall determine 93.7the market value of each individual lot based upon the highest and best use of the property 93.8as unplatted land. In establishing the market value of the property, the assessor shall 93.9consider the sale price of the unplatted land or comparable sales of unplatted land of 93.10similar use and similar availability of public utilities. 93.11 (b) The market value determined in paragraph (a) shall be increased as follows for 93.12each of the three assessment years immediately following the final approval of the plat: 93.13one-third of the difference between the property's unplatted market value as determined 93.14under paragraph (a) and the market value based upon the highest and best use of the land 93.15as platted property shall be added in each of the three subsequent assessment years. 93.16 (c) Any increase in market value after the first assessment year following the plat's 93.17final approval shall be added to the property's market value in the next assessment year. 93.18Notwithstanding paragraph (b), if the property is sold or transferred, or construction 93.19begins before the expiration of the three years in paragraph (b), that lot shall be eligible 93.20for revaluation in the next assessment year. The market value of a platted lot determined 93.21under this subdivision shall not exceed the value of that lot based upon the highest and 93.22best use of the property as platted land. 93.23 (d) For purposes of this section, "metropolitan county" means the counties of Anoka, 93.24Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 93.25EFFECTIVE DATE.This section is effective for taxes payable in 2010 and 93.26thereafter. 93.27 Sec. 10. Minnesota Statutes 2006, section 273.11, subdivision 14b, is amended to read: 93.28 Subd. 14b. Vacant land platted on or after August 1, 2001; located in 93.29nonmetropolitan counties. (a) All land platted on or after August 1, 2001, located in a 93.30nonmetropolitan county, and not improved with a permanent structure, shall be assessed 93.31as provided in this subdivision. The assessor shall determine the market value of each 93.32individual lot based upon the highest and best use of the property as unplatted land. In 93.33establishing the market value of the property, the assessor shall consider the sale price 94.1of the unplatted land or comparable sales of unplatted land of similar use and similar 94.2availability of public utilities. 94.3 (b) The market value determined in paragraph (a) shall be increased as follows for 94.4each of the seven assessment years immediately following the final approval of the plat: 94.5one-seventh of the difference between the property's unplatted market value as determined 94.6under paragraph (a) and the market value based upon the highest and best use of the land 94.7as platted property shall be added in each of the seven subsequent assessment years. 94.8 (c) Any increase in market value after the first assessment year following the plat's 94.9final approval shall be added to the property's market value in the next assessment year. 94.10Notwithstanding paragraph (b), if the property is sold or transferred, or construction 94.11begins before the expiration of the seven years in paragraph (b), that lot shall be eligible 94.12for revaluation in the next assessment year. The market value of a platted lot determined 94.13under this subdivision shall not exceed the value of that lot based upon the highest and 94.14best use of the property as platted land. 94.15EFFECTIVE DATE.This section is effective for taxes payable in 2010 and 94.16thereafter. 94.17 Sec. 11. Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision 94.18to read: 94.19 Subd. 14c. Certain vacant land platted on or after August 1, 2001; located 94.20in metropolitan county. (a) All land platted on or after August 1, 2001, located in a 94.21metropolitan county and not improved with a structure shall be eligible for the phase-in 94.22assessment schedule under this subdivision, provided the property (i) is classified 94.23homestead under section 273.13, subdivision 22 or 23, in the assessment year prior to the 94.24year the initial platting begins on the property; (ii) has been owned or part-owned by the 94.25same person for the ten consecutive years prior to the initial platting; and (iii) remains 94.26under the same ownership in the current assessment year. 94.27 (b) Based upon the assessor's records, the assessor shall obtain the estimated market 94.28value of each individual lot based upon the highest and best use of the property as unplatted 94.29land for the assessment year that the property was platted. In establishing the market value 94.30of the property, the assessor shall have considered the sale price of the unplatted land or 94.31comparable sales of unplatted land of similar use and similar availability of public utilities. 94.32 (c) To the market value determined in paragraph (b) shall be added one-seventh 94.33of the difference between the property's unplatted market value as determined under 94.34paragraph (b) and the market value based upon the highest and best use of the land as 95.1platted property in the current year, multiplied by the number of assessment years since 95.2the property was platted, in each of the subsequent assessment years. 95.3 (d) Notwithstanding paragraph (c), if the property is sold or transferred, or 95.4construction begins before the expiration of the phase-in in paragraph (c), that lot shall 95.5be eligible for revaluation in the next assessment year. The market value of a platted lot 95.6determined under this subdivision shall not exceed the value of that lot based upon the 95.7highest and best use of the property as platted land. 95.8 (e) Any owner of eligible property platted before July 1, 2008, must file an 95.9application with the assessor in order to receive the phase-in under this subdivision for the 95.10remainder of the seven-year period. The application must be filed before July 1 in order 95.11for the property to be eligible for the current year's assessment. The commissioner shall 95.12prescribe a uniform application form and instructions. 95.13 (f) For purposes of this section, "metropolitan county" means the counties of Anoka, 95.14Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 95.15EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 95.16thereafter, except that the portion of paragraph (d) referring to a lot that is sold or 95.17transferred is effective for taxes payable in 2010 and thereafter. 95.18 Sec. 12. Minnesota Statutes 2006, section 273.111, subdivision 3, as amended by Laws 95.192008, chapter 154, article 13, section 26, is amended to read: 95.20 Subd. 3. Requirements. (a) Real estate consisting of ten acres or more or a nursery 95.21or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13, 95.22shall be entitled to valuation and tax deferment under this section only if it is primarily 95.23devoted to agricultural use, and meets the qualifications in subdivision 6, and either: 95.24 (1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the 95.25owner or is real estate which is farmed with the real estate which contains the homestead 95.26property; or 95.27 (2) has been in possession of the applicant, the applicant's spouse, parent, or sibling, 95.28or any combination thereof, for a period of at least seven years prior to application for 95.29benefits under the provisions of this section, or is real estate which is farmed with the 95.30real estate which qualifies under this clause and is within four townships or cities or 95.31combination thereof from the qualifying real estate; or 95.32 (3) is the homestead of a shareholder in a family farm corporation as defined in 95.33section , notwithstanding the fact that legal title to the real estate may be held in 95.34the name of the family farm corporation an individual who is part of an entity described 95.35in paragraph (b), clause (1), (2), or (3); or 96.1 (4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor, 96.2partnership, or corporation which also owns the nursery or greenhouse operations on the 96.3parcel or parcels, provided that only the acres used to produce nursery stock qualify 96.4for treatment under this section. 96.5 (b) Valuation of real estate under this section is limited to parcels the ownership of 96.6which is in noncorporate entities owned by individuals except for: 96.7 (1) a family farm corporations organized pursuant to entity or authorized farm entity 96.8regulated under section 500.24; and 96.9 (2) a poultry entity other than a limited liability entity in which the majority of the 96.10members, partners, or shareholders are related and at least one of the members, partners, 96.11or shareholders either resides on the land or actively operates the land; and 96.12 (3) corporations that derive 80 percent or more of their gross receipts from the 96.13wholesale or retail sale of horticultural or nursery stock. 96.14 The terms in this paragraph have the meanings given in section 500.24, where 96.15applicable. 96.16 (c) Land that previously qualified for tax deferment under this section and no longer 96.17qualifies because it is not primarily used for agricultural purposes but would otherwise 96.18qualify under subdivisions Minnesota Statutes 2006, section 273.111, subdivision 3 and 6, 96.19 for a period of at least three years will not be required to make payment of the previously 96.20deferred taxes, notwithstanding the provisions of subdivision 9. Sale of the land prior to 96.21the expiration of the three-year period requires payment of deferred taxes as follows: sale 96.22in the year the land no longer qualifies requires payment of the current year's deferred 96.23taxes plus payment of deferred taxes for the two prior years; sale during the second year 96.24the land no longer qualifies requires payment of the current year's deferred taxes plus 96.25payment of the deferred taxes for the prior year; and sale during the third year the land 96.26no longer qualifies requires payment of the current year's deferred taxes. Deferred taxes 96.27shall be paid even if the land qualifies pursuant to subdivision 11a. When such property is 96.28sold or no longer qualifies under this paragraph, or at the end of the three-year period, 96.29whichever comes first, all deferred special assessments plus interest are payable in equal 96.30installments spread over the time remaining until the last maturity date of the bonds issued 96.31to finance the improvement for which the assessments were levied. If the bonds have 96.32matured, the deferred special assessments plus interest are payable within 90 days. The 96.33provisions of section 429.061, subdivision 2, apply to the collection of these installments. 96.34Penalties are not imposed on any such special assessments if timely paid. 96.35 (d) Land that is enrolled in the reinvest in Minnesota program under sections 96.36103F.501 to 103F.535, the federal Conservation Reserve Program as contained in Public 97.1Law 99-198, or a similar state or federal conservation program does not qualify for 97.2valuation and assessment deferral under this section. This paragraph applies to land that 97.3has not qualified under this section for taxes payable in 2009 or previous years. 97.4EFFECTIVE DATE.This section is effective for taxes payable in 2010 and 97.5thereafter. 97.6 Sec. 13. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision 97.7to read: 97.8 Subd. 3a. Property no longer eligible for deferment. (a) Real estate receiving 97.9the tax deferment under this section for assessment year 2008, but that does not qualify 97.10for the 2009 assessment year due to changes in qualification requirements under this act, 97.11shall continue to qualify until any part of the land is sold, transferred, or subdivided, 97.12provided that the property continues to meet the requirements of Minnesota Statutes 2006, 97.13section 273.111, subdivision 3. 97.14 (b) When property assessed under this subdivision is withdrawn from the program or 97.15becomes ineligible, the property shall be subject to additional taxes, in the amount equal 97.16to the average difference between the taxes determined in accordance with subdivision 97.174, and the amount determined under subdivision 5, for the current year and the two 97.18preceding years, multiplied by (1) three, in the case of class 2a property under section 97.19273.13, subdivision 23, or any property withdrawn before January 2, 2009, or (2) seven, in 97.20the case of property withdrawn after January 2, 2009, that is not class 2a property. The 97.21number of years used as the multiplier must not exceed the number of years during which 97.22the property was subject to this section. The amount determined under subdivision 5 shall 97.23not be greater than it would have been had the actual bona fide sale price of the real 97.24property at an arm's-length transaction been used in lieu of the market value determined 97.25under subdivision 5. The additional taxes shall be extended against the property on the 97.26tax list for the current year, provided that no interest or penalties shall be levied on the 97.27additional taxes if timely paid. 97.28EFFECTIVE DATE.This section is effective the day following final enactment. 97.29 Sec. 14. Minnesota Statutes 2006, section 273.111, subdivision 4, is amended to read: 97.30 Subd. 4. Determination of value. (a) The value of any real estate described 97.31in subdivision 3 shall upon timely application by the owner, in the manner provided 97.32in subdivision 8, be determined solely with reference to its appropriate agricultural 97.33classification and value notwithstanding sections 272.03, subdivision 8, and 273.11. In 97.34determining the value for ad valorem tax purposes, the assessor shall use sales data for 98.1agricultural lands located outside the seven metropolitan counties having similar soil 98.2types, number of degree days, and other similar agricultural characteristics. Furthermore, 98.3the assessor shall not consider any added values resulting from nonagricultural factors. 98.4In order to account for the presence of nonagricultural influences that may affect the value 98.5of agricultural land, the commissioner of revenue shall develop a fair and uniform method 98.6of determining agricultural values for each county in the state that are consistent with this 98.7subdivision. The commissioner shall annually assign the resulting values to each county, 98.8and these values shall be used as the basis for determining the agricultural value for all 98.9properties in the county qualifying for tax deferment under this section. 98.10 (b) In the case of property qualifying for tax deferment only under subdivision 3a, 98.11the value shall be based on the value in effect for assessment year 2008, multiplied by 98.12the ratio of the total taxable market value of all property in the county for the current 98.13assessment year divided by the total taxable market value of all property in the county 98.14for assessment year 2008. 98.15EFFECTIVE DATE.This section is effective for assessment year 2009 and 98.16thereafter. 98.17 Sec. 15. Minnesota Statutes 2006, section 273.111, subdivision 8, is amended to read: 98.18 Subd. 8. Application. Application for deferment of taxes and assessment under this 98.19section shall be filed by May 1 of the year prior to the year in which the taxes are payable. 98.20Any application filed hereunder and granted shall continue in effect for subsequent years 98.21until the property no longer qualifies. Such The application shall must be filed with the 98.22assessor of the taxing district in which the real property is located on such the form as 98.23may be prescribed by the commissioner of revenue. The assessor may require proof by 98.24affidavit or otherwise that the property qualifies under subdivisions subdivision 3 and 6 98.25and may require the applicant to provide a copy of the appropriate schedule or form 98.26showing farm income that is attested to by the applicant as having been included in the 98.27most recently filed federal income tax return of the applicant. 98.28EFFECTIVE DATE.This section is effective for applications filed after May 98.291, 2008. 98.30 Sec. 16. Minnesota Statutes 2006, section 273.111, subdivision 9, is amended to read: 98.31 Subd. 9. Additional taxes. When real property which is being, or has been valued 98.32and assessed under this section no longer qualifies under subdivisions subdivision 3 and 6, 98.33the portion no longer qualifying shall be subject to additional taxes, in the amount equal to 98.34the difference between the taxes determined in accordance with subdivision 4, and the 99.1amount determined under subdivision 5. Provided, however, that the amount determined 99.2under subdivision 5 shall not be greater than it would have been had the actual bona fide 99.3sale price of the real property at an arm's-length transaction been used in lieu of the market 99.4value determined under subdivision 5. Such additional taxes shall be extended against 99.5the property on the tax list for the current year, provided, however, that no interest or 99.6penalties shall be levied on such additional taxes if timely paid, and provided further, that 99.7such additional taxes shall only be levied with respect to the last three years that the said 99.8property has been valued and assessed under this section. 99.9EFFECTIVE DATE.This section is effective for deferred taxes payable in 2009 99.10and thereafter. 99.11 Sec. 17. Minnesota Statutes 2006, section 273.111, subdivision 11, is amended to read: 99.12 Subd. 11. Special local assessments. The payment of special local assessments 99.13levied after June 1, 1967, for improvements made to any real property described in 99.14subdivision 3 together with the interest thereon shall, on timely application as provided 99.15in subdivision 8, be deferred as long as such property meets the conditions contained in 99.16subdivisions subdivision 3 and 6 or 3a or is transferred to an agricultural preserve under 99.17sections 473H.02 to 473H.17. If special assessments against the property have been 99.18deferred pursuant to this subdivision, the governmental unit shall file with the county 99.19recorder in the county in which the property is located a certificate containing the legal 99.20description of the affected property and of the amount deferred. When such property 99.21no longer qualifies under subdivisions subdivision 3 and 6 or 3a, all deferred special 99.22assessments plus interest shall be payable in equal installments spread over the time 99.23remaining until the last maturity date of the bonds issued to finance the improvement 99.24for which the assessments were levied. If the bonds have matured, the deferred special 99.25assessments plus interest shall be payable within 90 days. The provisions of section 99.26429.061, subdivision 2 , apply to the collection of these installments. Penalty shall not be 99.27levied on any such special assessments if timely paid. 99.28EFFECTIVE DATE.This section is effective for deferred taxes payable in 2009 99.29and thereafter. 99.30 Sec. 18. Minnesota Statutes 2006, section 273.111, subdivision 11a, is amended to read: 99.31 Subd. 11a. Continuation of tax treatment upon sale. When real property 99.32qualifying under subdivisions subdivision 3 and 6 is sold, no additional taxes or deferred 99.33special assessments plus interest shall be extended against the property provided the 100.1property continues to qualify pursuant to subdivisions subdivision 3 and 6, and provided 100.2the new owner files an application for continued deferment within 30 days after the sale. 100.3 For purposes of meeting the income requirements of subdivision 6, the property 100.4purchased shall be considered in conjunction with other qualifying property owned by 100.5the purchaser. 100.6EFFECTIVE DATE.This section is effective for deferred taxes payable in 2009 100.7and thereafter. 100.8 Sec. 19. Minnesota Statutes 2006, section 273.111, subdivision 14, is amended to read: 100.9 Subd. 14. Applicability of special assessment provisions. (a) This section shall 100.10apply to special local assessments levied after July 1, 1967, and payable in the years 100.11thereafter, but shall not apply to any special assessments levied at any time by a county 100.12or district court under the provisions of chapter 116A or by a watershed district under 100.13chapter 103D. 100.14 (b) For special assessments levied by a watershed district under chapter 103D before 100.15June 1, 2008, this section is effective only for real property initially qualifying for tax 100.16deferment after May 31, 2008. For special assessments by a watershed district under 100.17chapter 103D levied after May 31, 2008, this section is effective for all real property 100.18qualifying for tax deferment under this section. 100.19EFFECTIVE DATE.This section is effective the day following final enactment. 100.20 Sec. 20. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision 100.21to read: 100.22 Subd. 17. Implementation of program. This section must be applied to eligible 100.23properties by all county assessors, beginning no later than assessments for taxes levied 100.24in 2009, payable in 2010, and thereafter, unless the commissioner of revenue determines 100.25that a county is unable to comply with this requirement, in which case the county must 100.26implement it for taxes levied in 2010, payable in 2011, and thereafter. 100.27 Sec. 21. [273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY 100.28TAX LAW. 100.29 Subdivision 1. Definitions. For purposes of this section, "commercial aggregate 100.30deposit" and "actively mined" have the meanings given them in section 273.13, 100.31subdivision 23, paragraph (l). 101.1 Subd. 2. Requirement. Real estate is entitled to valuation under this section only if 101.2all of the following requirements are met: 101.3 (1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13, 101.4subdivisions 22 and 23; 101.5 (2) the property is at least ten contiguous acres, when the application is filed under 101.6subdivision 3; 101.7 (3) the owner has filed a completed application for deferment as specified in 101.8subdivision 3 with the county assessor in the county in which the property is located; 101.9 (4) there are no delinquent taxes on the property; and 101.10 (5) a covenant on the land restricts its use as provided in subdivision 3, clause (4). 101.11 Subd. 3. Application. Application for valuation deferment under this section 101.12must be filed by May 1 of the assessment year. Any application filed and granted 101.13continues in effect for subsequent years until the property no longer qualifies, provided 101.14that supplemental affidavits under subdivision 8 are timely filed. The application must 101.15be filed with the assessor of the county in which the real property is located on such 101.16form as may be prescribed by the commissioner of revenue. The application must be 101.17executed and acknowledged in the manner required by law to execute and acknowledge a 101.18deed and must contain at least the following information and any other information the 101.19commissioner deems necessary: 101.20 (1) the legal description of the area; 101.21 (2) the name and address of owner; 101.22 (3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph 101.23(l), when property is classified as: 101.24 (i) 1b under section 273.13, subdivision 22, paragraph (b); 101.25 (ii) 2a under section 273.13, subdivision 23; 101.26 (iii) 2b under section 273.13, subdivision 23; or 101.27 (iv) 2e under section 273.13, subdivision 23, paragraph (l). 101.28 The application must include a similar document with the same information as 101.29contained in the affidavit under section 273.13, subdivision 23, paragraph (l); and 101.30 (4) a statement of proof from the owner that the land contains a restrictive covenant 101.31limiting its use for the property's surface to that which exists on the date of the application 101.32and limiting its future use to the preparation and removal of the commercial aggregate 101.33deposit under its surface. To qualify under this clause, the covenant must be binding on 101.34the owner or the owner's successor or assignee, and run with the land, except as provided 101.35in subdivision 5 allowing for the cancellation of the covenant under certain conditions. 102.1 Subd. 4. Determination of value. Upon timely application by the owner as provided 102.2in subdivision 3, notwithstanding sections 272.03, subdivision 8, and 273.11, the value of 102.3any qualifying land described in subdivision 3 must be valued as if it were agricultural 102.4property, using a per acre valuation equal to the current assessment year's average per acre 102.5valuation of agricultural land in the county. The assessor shall not consider any additional 102.6value resulting from potential alternative and future uses of the property. The buildings 102.7located on the land shall be valued by the assessor in the normal manner. 102.8 Subd. 5. Cancellation of covenant. The covenant required under subdivision 102.93 may be canceled in two ways: 102.10 (1) by the owner beginning with the next subsequent assessment year provided 102.11that the additional taxes as determined under subdivision 7 are paid by the owner at the 102.12time of cancellation; or 102.13 (2) by the city or town in which the property is located beginning with the next 102.14subsequent assessment year, if the city council or town board: 102.15 (i) changes the conditional use of the property; 102.16 (ii) revokes the mining permit; or 102.17 (iii) changes the zoning to disallow mining. 102.18 No additional taxes are imposed on the property under this clause. 102.19 Subd. 6. County termination. Within two years of the effective date of this section, 102.20a county may, following notice and public hearing, terminate application of this section 102.21in the county. The termination is effective upon adoption of a resolution of the county 102.22board. A county has 60 days from receipt of the first application for enrollment under 102.23this section to notify the applicant and any subsequent applicants of the county's intent 102.24to begin the process of terminating application of this section in the county. The county 102.25must act on the termination within six months. Upon termination by a vote of the county 102.26board, all applications received prior to and during notification of intent to terminate shall 102.27be deemed void. If the county board does not act on the termination within six months of 102.28notification, all applications for valuation for deferment received shall be deemed eligible 102.29for consideration to be enrolled under this section. Following this initial 60-day grace 102.30period, a termination applies prospectively and does not affect property enrolled under this 102.31section prior to the termination date. A county may reauthorize application of this section 102.32by a resolution of the county board revoking the termination. 102.33 Subd. 7. Additional taxes. When real property which has been valued and assessed 102.34under this section no longer qualifies, the portion of the land classified under subdivision 102.352, clause (1), is subject to additional taxes. The additional tax amount is determined by: 103.1 (1) computing the difference between (i) the current year's taxes determined in 103.2accordance with subdivision 4, and (ii) an amount as determined by the assessor based 103.3upon the property's current year's estimated market value of like real estate at its highest 103.4and best use and the appropriate local tax rate; and 103.5 (2) multiplying the amount determined in clause (1) by the number of years the 103.6land was in the program under this section. The current year's estimated market value as 103.7determined by the assessor must not exceed the market value that would result if the 103.8property was sold in an arms-length transaction and must not be greater than it would have 103.9been had the actual bona fide sale price of the property been used in lieu of that market 103.10value. The additional taxes must be extended against the property on the tax list for the 103.11current year, except that interest or penalties must not be levied on these additional taxes if 103.12timely paid. The additional tax under this subdivision must not be imposed on that portion 103.13of the property which has actively been mined and has been removed from the program 103.14based upon the supplemental affidavits filed under subdivision 8. 103.15 Subd. 8. Supplemental affidavits; mining activity on land. When any portion 103.16of the property begins to be actively mined, the owner must file a supplemental affidavit 103.17within 60 days from the day any aggregate is removed stating the number of acres of the 103.18property that is actively being mined. The acres actively being mined shall be (1) valued 103.19and classified under section 273.13, subdivision 24, in the next subsequent assessment 103.20year, and (2) removed from the aggregate resource preservation property tax program 103.21under this section. The additional taxes under subdivision 7 must not be imposed on the 103.22acres that are actively being mined and have been removed from the program under this 103.23section. Copies of the original affidavit and all supplemental affidavits must be filed 103.24with the county assessor, the local zoning administrator, and the Department of Natural 103.25Resources, Division of Land and Minerals. A supplemental affidavit must be filed each 103.26time a subsequent portion of the property is actively mined, provided that the minimum 103.27acreage change is five acres, even if the actual mining activity constitutes less than five 103.28acres. Failure to file the affidavits timely shall result in the property losing its valuation 103.29deferment under this section, and additional taxes must be imposed as calculated under 103.30subdivision 7. 103.31 Subd. 9. Lien. The additional tax imposed by this section is a lien upon the property 103.32assessed to the same extent and for the same duration as other taxes imposed upon 103.33property within this state and, when collected, must be distributed in the manner provided 103.34by law for the collection and distribution of other property taxes. 104.1 Subd. 10. Continuation of tax treatment upon sale. When real property qualifying 104.2under subdivision 2 is sold, additional taxes must not be extended against the property 104.3if the property continues to qualify under subdivision 2, and the new owner files an 104.4application with the assessor for continued deferment within 30 days after the sale. 104.5EFFECTIVE DATE.This section is effective for taxes levied in 2009, payable 104.6in 2010, and thereafter, except that for the 2009 assessment year, the application date 104.7under subdivision 5 shall be September 1, 2009, and subdivision 6 is effective the day 104.8following final enactment. 104.9 Sec. 22. [273.113] TAX CREDIT FOR PROPERTY IN PROPOSED BOVINE 104.10TUBERCULOSIS MODIFIED ACCREDITED ZONE. 104.11 Subdivision 1. Definition. For the purposes of this section, the following terms 104.12have the meanings given to them: 104.13 (1) "proposed bovine tuberculosis modified accredited zone" means the modified 104.14accredited zone proposed by the Board of Animal Health under section 35.244; and 104.15 (2) "located within" means that the herd is kept in the area for at least a part of 104.16calendar year 2007. 104.17 Subd. 2. Eligibility; amount of credit. Agricultural land classified under section 104.18273.13, subdivision 23, located within a proposed bovine tuberculosis modified accredited 104.19zone is eligible for a property tax credit equal to the property tax on the parcel where the 104.20herd had been located, excluding any tax attributable to residential structures. To begin to 104.21qualify for the tax credit, the owner shall file an application with the county by December 104.221 of the levy year. The credit must be given for each subsequent taxes payable year until 104.23the credit terminates under subdivision 4. The assessor shall indicate the amount of the 104.24property tax reduction on the property tax statement of each taxpayer receiving a credit 104.25under this section. The credit paid pursuant to this section shall be deducted from the tax 104.26due on the property as provided in section 273.1393. 104.27 Subd. 3. Reimbursement for lost revenue. The county auditor shall certify to the 104.28commissioner of revenue, as part of the abstracts of tax lists required to be filed with 104.29the commissioner under section 275.29, the amount of tax lost to the county from the 104.30property tax credit under subdivision 2. Any prior year adjustments must also be certified 104.31in the abstracts of tax lists. The commissioner of revenue shall review the certifications to 104.32determine their accuracy. The commissioner may make the changes in the certification 104.33that are considered necessary or return a certification to the county auditor for corrections. 104.34The commissioner shall reimburse each taxing district for the taxes lost. The payments 105.1must be made at the time provided in section 473H.10 for payment to taxing jurisdictions 105.2in the same proportion that the ad valorem tax is distributed. The amount necessary to 105.3make the reimbursements under this section is annually appropriated from the general 105.4fund to the commissioner of revenue. 105.5 Subd. 4. Termination of credit. The credits provided under this section cease to be 105.6available beginning with taxes payable in the year following the date when the Board of 105.7Animal Health has certified that the state is free of bovine tuberculosis. 105.8 Sec. 23. Minnesota Statutes 2006, section 273.121, as amended by Laws 2008, chapter 105.9154, article 13, section 28, is amended to read: 105.10273.121 VALUATION OF REAL PROPERTY, NOTICE. 105.11 Subdivision 1. Notice. Any county assessor or city assessor having the powers of a 105.12county assessor, valuing or classifying taxable real property shall in each year notify those 105.13persons whose property is to be included on the assessment roll that year if the person's 105.14address is known to the assessor, otherwise the occupant of the property. The notice shall 105.15be in writing and shall be sent by ordinary mail at least ten days before the meeting of 105.16the local board of appeal and equalization under section 274.01 or the review process 105.17established under section 274.13, subdivision 1c. Upon written request by the owner of the 105.18property, the assessor may send the notice in electronic form or by electronic mail instead 105.19of on paper or by ordinary mail. It shall contain: (1) the market value for the current and 105.20prior assessment, (2) the limited market value under section 273.11, subdivision 1a, for 105.21the current and prior assessment, (3) the qualifying amount of any improvements under 105.22section 273.11, subdivision 16, for the current assessment, (4) the market value subject 105.23to taxation after subtracting the amount of any qualifying improvements for the current 105.24assessment, (5) the classification of the property for the current and prior assessment, 105.25(6) a note that if the property is homestead and at least 45 years old, improvements 105.26made to the property may be eligible for a valuation exclusion under section 273.11, 105.27subdivision 16 , (7) the assessor's office address, and (8) the dates, places, and times set for 105.28the meetings of the local board of appeal and equalization, the review process established 105.29under section 274.13, subdivision 1c, and the county board of appeal and equalization. 105.30The commissioner of revenue shall specify the form of the notice. The assessor shall 105.31attach to the assessment roll a statement that the notices required by this section have been 105.32mailed. Any assessor who is not provided sufficient funds from the assessor's governing 105.33body to provide such notices, may make application to the commissioner of revenue 105.34to finance such notices. The commissioner of revenue shall conduct an investigation 105.35and, if satisfied that the assessor does not have the necessary funds, issue a certification 106.1to the commissioner of finance of the amount necessary to provide such notices. The 106.2commissioner of finance shall issue a warrant for such amount and shall deduct such 106.3amount from any state payment to such county or municipality. The necessary funds to 106.4make such payments are hereby appropriated. Failure to receive the notice shall in no way 106.5affect the validity of the assessment, the resulting tax, the procedures of any board of 106.6review or equalization, or the enforcement of delinquent taxes by statutory means. 106.7 Subd. 2. Availability of data. The notice must state where the information on 106.8the property is available, the times when the information may be viewed by the public, 106.9and the county's Web site address. 106.10EFFECTIVE DATE.This section is effective for notices prepared in 2009 and 106.11thereafter. 106.12 Sec. 24. Minnesota Statutes 2006, section 273.124, subdivision 1, is amended to read: 106.13 Subdivision 1. General rule. (a) Residential real estate that is occupied and used 106.14for the purposes of a homestead by its owner, who must be a Minnesota resident, is 106.15a residential homestead. 106.16 Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and 106.17used as a homestead by its owner, who must be a Minnesota resident, is an agricultural 106.18homestead. 106.19 Dates for establishment of a homestead and homestead treatment provided to 106.20particular types of property are as provided in this section. 106.21 Property held by a trustee under a trust is eligible for homestead classification if the 106.22requirements under this chapter are satisfied. 106.23 The assessor shall require proof, as provided in subdivision 13, of the facts upon 106.24which classification as a homestead may be determined. Notwithstanding any other law, 106.25the assessor may at any time require a homestead application to be filed in order to verify 106.26that any property classified as a homestead continues to be eligible for homestead status. 106.27Notwithstanding any other law to the contrary, the Department of Revenue may, upon 106.28request from an assessor, verify whether an individual who is requesting or receiving 106.29homestead classification has filed a Minnesota income tax return as a resident for the most 106.30recent taxable year for which the information is available. 106.31 When there is a name change or a transfer of homestead property, the assessor may 106.32reclassify the property in the next assessment unless a homestead application is filed to 106.33verify that the property continues to qualify for homestead classification. 106.34 (b) For purposes of this section, homestead property shall include property which 106.35is used for purposes of the homestead but is separated from the homestead by a road, 107.1street, lot, waterway, or other similar intervening property. The term "used for purposes 107.2of the homestead" shall include but not be limited to uses for gardens, garages, or other 107.3outbuildings commonly associated with a homestead, but shall not include vacant land 107.4held primarily for future development. In order to receive homestead treatment for 107.5the noncontiguous property, the owner must use the property for the purposes of the 107.6homestead, and must apply to the assessor, both by the deadlines given in subdivision 107.79. After initial qualification for the homestead treatment, additional applications for 107.8subsequent years are not required. 107.9 (c) Residential real estate that is occupied and used for purposes of a homestead by a 107.10relative of the owner is a homestead but only to the extent of the homestead treatment 107.11that would be provided if the related owner occupied the property. For purposes of this 107.12paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild, 107.13grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship 107.14may be by blood or marriage. Property that has been classified as seasonal residential 107.15recreational property at any time during which it has been owned by the current owner or 107.16spouse of the current owner will not be reclassified as a homestead unless it is occupied as 107.17a homestead by the owner; this prohibition also applies to property that, in the absence of 107.18this paragraph, would have been classified as seasonal residential recreational property at 107.19the time when the residence was constructed. Neither the related occupant nor the owner 107.20of the property may claim a property tax refund under chapter 290A for a homestead 107.21occupied by a relative. In the case of a residence located on agricultural land, only the 107.22house, garage, and immediately surrounding one acre of land shall be classified as a 107.23homestead under this paragraph, except as provided in paragraph (d). 107.24 (d) Agricultural property that is occupied and used for purposes of a homestead by 107.25a relative of the owner, is a homestead, only to the extent of the homestead treatment 107.26that would be provided if the related owner occupied the property, and only if all of the 107.27following criteria are met: 107.28 (1) the relative who is occupying the agricultural property is a son, daughter, brother, 107.29sister, grandson, granddaughter, father, or mother of the owner of the agricultural property 107.30or a son, daughter, brother, sister, grandson, or granddaughter of the spouse of the owner 107.31of the agricultural property; 107.32 (2) the owner of the agricultural property must be a Minnesota resident; 107.33 (3) the owner of the agricultural property must not receive homestead treatment on 107.34any other agricultural property in Minnesota; and 107.35 (4) the owner of the agricultural property is limited to only one agricultural 107.36homestead per family under this paragraph. 108.1 Neither the related occupant nor the owner of the property may claim a property 108.2tax refund under chapter 290A for a homestead occupied by a relative qualifying under 108.3this paragraph. For purposes of this paragraph, "agricultural property" means the house, 108.4garage, other farm buildings and structures, and agricultural land. 108.5 Application must be made to the assessor by the owner of the agricultural property to 108.6receive homestead benefits under this paragraph. The assessor may require the necessary 108.7proof that the requirements under this paragraph have been met. 108.8 (e) In the case of property owned by a property owner who is married, the assessor 108.9must not deny homestead treatment in whole or in part if only one of the spouses occupies 108.10the property and the other spouse is absent due to: (1) marriage dissolution proceedings, 108.11(2) legal separation, (3) employment or self-employment in another location, or (4) other 108.12personal circumstances causing the spouses to live separately, not including an intent to 108.13obtain two homestead classifications for property tax purposes. To qualify under clause 108.14(3), the spouse's place of employment or self-employment must be at least 50 miles distant 108.15from the other spouse's place of employment, and the homesteads must be at least 50 miles 108.16distant from each other. Homestead treatment, in whole or in part, shall not be denied to 108.17the owner's spouse who previously occupied the residence with the owner if the absence 108.18of the owner is due to one of the exceptions provided in this paragraph. 108.19 (f) The assessor must not deny homestead treatment in whole or in part if: 108.20 (1) in the case of a property owner who is not married, the owner is absent due to 108.21residence in a nursing home, boarding care facility, or an elderly assisted living facility 108.22property as defined in section 273.13, subdivision 25a, and the property is not otherwise 108.23occupied; or 108.24 (2) in the case of a property owner who is married, the owner or the owner's spouse 108.25or both are absent due to residence in a nursing home, boarding care facility, or an elderly 108.26assisted living facility property as defined in section 273.13, subdivision 25a, and the 108.27property is not occupied or is occupied only by the owner's spouse. 108.28 (g) If an individual is purchasing property with the intent of claiming it as a 108.29homestead and is required by the terms of the financing agreement to have a relative 108.30shown on the deed as a co-owner, the assessor shall allow a full homestead classification. 108.31This provision only applies to first-time purchasers, whether married or single, or to a 108.32person who had previously been married and is purchasing as a single individual for the 108.33first time. The application for homestead benefits must be on a form prescribed by the 108.34commissioner and must contain the data necessary for the assessor to determine if full 108.35homestead benefits are warranted. 109.1 (h) If residential or agricultural real estate is occupied and used for purposes of a 109.2homestead by a child of a deceased owner and the property is subject to jurisdiction of 109.3probate court, the child shall receive relative homestead classification under paragraph (c) 109.4or (d) to the same extent they would be entitled to it if the owner was still living, until 109.5the probate is completed. For purposes of this paragraph, "child" includes a relationship 109.6by blood or by marriage. 109.7 (i) If a single-family home, duplex, or triplex classified as either residential 109.8homestead or agricultural homestead is also used to provide licensed child care, the 109.9portion of the property used for licensed child care must be classified as a part of the 109.10homestead property. 109.11EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 109.12thereafter. 109.13 Sec. 25. Minnesota Statutes 2007 Supplement, section 273.124, subdivision 14, as 109.14amended by Laws 2008, chapter 154, article 2, section 7, is amended to read: 109.15 Subd. 14. Agricultural homesteads; special provisions. (a) Real estate of less than 109.16ten acres that is the homestead of its owner must be classified as class 2a under section 109.17273.13, subdivision 23 , paragraph (a), if: 109.18 (1) the parcel on which the house is located is contiguous on at least two sides to (i) 109.19agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 109.20Service, or (iii) land administered by the Department of Natural Resources on which in 109.21lieu taxes are paid under sections 477A.11 to 477A.14; 109.22 (2) its owner also owns a noncontiguous parcel of agricultural land that is at least 109.2320 acres; 109.24 (3) the noncontiguous land is located not farther than four townships or cities, or a 109.25combination of townships or cities from the homestead; and 109.26 (4) the agricultural use value of the noncontiguous land and farm buildings is equal 109.27to at least 50 percent of the market value of the house, garage, and one acre of land. 109.28 Homesteads initially classified as class 2a under the provisions of this paragraph shall 109.29remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 109.30properties, as long as the homestead remains under the same ownership, the owner owns a 109.31noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 109.32value qualifies under clause (4). Homestead classification under this paragraph is limited 109.33to property that qualified under this paragraph for the 1998 assessment. 109.34 (b)(i) Agricultural property shall be classified as the owner's homestead, to the same 109.35extent as other agricultural homestead property, if all of the following criteria are met: 110.1 (1) the property consists of at least 40 acres including undivided government lots 110.2and correctional 40's; 110.3 (2) the owner, the owner's spouse, the son or daughter of the owner or owner's 110.4spouse, the brother or sister of the owner or owner's spouse, or the grandson or 110.5granddaughter of the owner or the owner's spouse, is actively farming the agricultural 110.6property, either on the person's own behalf as an individual or on behalf of a partnership 110.7operating a family farm, family farm corporation, joint family farm venture, or limited 110.8liability company of which the person is a partner, shareholder, or member; 110.9 (3) both the owner of the agricultural property and the person who is actively 110.10farming the agricultural property under clause (2), are Minnesota residents; 110.11 (4) neither the owner nor the spouse of the owner claims another agricultural 110.12homestead in Minnesota; and 110.13 (5) neither the owner nor the person actively farming the property lives farther 110.14than four townships or cities, or a combination of four townships or cities, from the 110.15agricultural property, except that if the owner or the owner's spouse is required to live in 110.16employer-provided housing, the owner or owner's spouse, whichever is actively farming 110.17the agricultural property, may live more than four townships or cities, or combination of 110.18four townships or cities from the agricultural property. 110.19 The relationship under this paragraph may be either by blood or marriage. 110.20 (ii) Real property held by a trustee under a trust is eligible for agricultural homestead 110.21classification under this paragraph if the qualifications in clause (i) are met, except that 110.22"owner" means the grantor of the trust. 110.23 (iii) Property containing the residence of an owner who owns qualified property 110.24under clause (i) shall be classified as part of the owner's agricultural homestead, if that 110.25property is also used for noncommercial storage or drying of agricultural crops. 110.26 (c) Noncontiguous land shall be included as part of a homestead under section 110.27273.13, subdivision 23 , paragraph (a), only if the homestead is classified as class 2a 110.28and the detached land is located in the same township or city, or not farther than four 110.29townships or cities or combination thereof from the homestead. Any taxpayer of these 110.30noncontiguous lands must notify the county assessor that the noncontiguous land is part of 110.31the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer 110.32must also notify the assessor of the other county. 110.33 (d) Agricultural land used for purposes of a homestead and actively farmed by a 110.34person holding a vested remainder interest in it must be classified as a homestead under 110.35section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, 110.36any other dwellings on the land used for purposes of a homestead by persons holding 111.1vested remainder interests who are actively engaged in farming the property, and up to 111.2one acre of the land surrounding each homestead and reasonably necessary for the use of 111.3the dwelling as a home, must also be assessed class 2a. 111.4 (e) Agricultural land and buildings that were class 2a homestead property under 111.5section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain 111.6classified as agricultural homesteads for subsequent assessments if: 111.7 (1) the property owner abandoned the homestead dwelling located on the agricultural 111.8homestead as a result of the April 1997 floods; 111.9 (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, 111.10or Wilkin; 111.11 (3) the agricultural land and buildings remain under the same ownership for the 111.12current assessment year as existed for the 1997 assessment year and continue to be used 111.13for agricultural purposes; 111.14 (4) the dwelling occupied by the owner is located in Minnesota and is within 30 111.15miles of one of the parcels of agricultural land that is owned by the taxpayer; and 111.16 (5) the owner notifies the county assessor that the relocation was due to the 1997 111.17floods, and the owner furnishes the assessor any information deemed necessary by the 111.18assessor in verifying the change in dwelling. Further notifications to the assessor are not 111.19required if the property continues to meet all the requirements in this paragraph and any 111.20dwellings on the agricultural land remain uninhabited. 111.21 (f) Agricultural land and buildings that were class 2a homestead property under 111.22section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain 111.23classified agricultural homesteads for subsequent assessments if: 111.24 (1) the property owner abandoned the homestead dwelling located on the agricultural 111.25homestead as a result of damage caused by a March 29, 1998, tornado; 111.26 (2) the property is located in the county of Blue Earth, Brown, Cottonwood, 111.27LeSueur, Nicollet, Nobles, or Rice; 111.28 (3) the agricultural land and buildings remain under the same ownership for the 111.29current assessment year as existed for the 1998 assessment year; 111.30 (4) the dwelling occupied by the owner is located in this state and is within 50 miles 111.31of one of the parcels of agricultural land that is owned by the taxpayer; and 111.32 (5) the owner notifies the county assessor that the relocation was due to a March 29, 111.331998, tornado, and the owner furnishes the assessor any information deemed necessary by 111.34the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 111.35owner must notify the assessor by December 1, 1998. Further notifications to the assessor 112.1are not required if the property continues to meet all the requirements in this paragraph 112.2and any dwellings on the agricultural land remain uninhabited. 112.3 (g) Agricultural property of a family farm corporation, joint family farm venture, 112.4family farm limited liability company, or partnership operating a family farm as described 112.5under subdivision 8 shall be classified homestead, to the same extent as other agricultural 112.6homestead property, if all of the following criteria are met: 112.7 (1) the property consists of at least 40 acres including undivided government lots 112.8and correctional 40's; 112.9 (2) a shareholder, member, or partner of that entity is actively farming the 112.10agricultural property; 112.11 (3) that shareholder, member, or partner who is actively farming the agricultural 112.12property is a Minnesota resident; 112.13 (4) neither that shareholder, member, or partner, nor the spouse of that shareholder, 112.14member, or partner claims another agricultural homestead in Minnesota; and 112.15 (5) that shareholder, member, or partner does not live farther than four townships or 112.16cities, or a combination of four townships or cities, from the agricultural property. 112.17 Homestead treatment applies under this paragraph for property leased to a family 112.18farm corporation, joint farm venture, limited liability company, or partnership operating a 112.19family farm if legal title to the property is in the name of an individual who is a member, 112.20shareholder, or partner in the entity. 112.21 (h) To be eligible for the special agricultural homestead under this subdivision, an 112.22initial full application must be submitted to the county assessor where the property is 112.23located. Owners and the persons who are actively farming the property shall be required 112.24to complete only a one-page abbreviated version of the application in each subsequent 112.25year provided that none of the following items have changed since the initial application: 112.26 (1) the day-to-day operation, administration, and financial risks remain the same; 112.27 (2) the owners and the persons actively farming the property continue to live within 112.28the four townships or city criteria and are Minnesota residents; 112.29 (3) the same operator of the agricultural property is listed with the Farm Service 112.30Agency; 112.31 (4) a Schedule F or equivalent income tax form was filed for the most recent year; 112.32 (5) the property's acreage is unchanged; and 112.33 (6) none of the property's acres have been enrolled in a federal or state farm program 112.34since the initial application. 112.35 The owners and any persons who are actively farming the property must include 112.36the appropriate Social Security numbers, and sign and date the application. If any of the 113.1specified information has changed since the full application was filed, the owner must 113.2notify the assessor, and must complete a new application to determine if the property 113.3continues to qualify for the special agricultural homestead. The commissioner of revenue 113.4shall prepare a standard reapplication form for use by the assessors. 113.5 (i) Agricultural land and buildings that were class 2a homestead property under 113.6section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain 113.7classified agricultural homesteads for subsequent assessments if: 113.8 (1) the property owner abandoned the homestead dwelling located on the agricultural 113.9homestead as a result of damage caused by the August 2007 floods; 113.10 (2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, 113.11Steele, Wabasha, or Winona; 113.12 (3) the agricultural land and buildings remain under the same ownership for the 113.13current assessment year as existed for the 2007 assessment year; 113.14 (4) the dwelling occupied by the owner is located in this state and is within 50 miles 113.15of one of the parcels of agricultural land that is owned by the taxpayer; and 113.16 (5) the owner notifies the county assessor that the relocation was due to the August 113.172007 floods, and the owner furnishes the assessor any information deemed necessary by 113.18the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the 113.19owner must notify the assessor by December 1, 2008. Further notifications to the assessor 113.20are not required if the property continues to meet all the requirements in this paragraph 113.21and any dwellings on the agricultural land remain uninhabited. 113.22EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 113.23thereafter. 113.24 Sec. 26. Minnesota Statutes 2006, section 273.13, subdivision 23, as amended by Laws 113.252008, chapter 154, article 2, section 12, is amended to read: 113.26 Subd. 23. Class 2. (a) Class 2a property is agricultural land including any 113.27improvements An agricultural homestead consists of class 2a agricultural land that is 113.28homesteaded, along with any class 2b rural vacant land that is contiguous to the class 113.292a land under the same ownership. The market value of the house and garage and 113.30immediately surrounding one acre of land has the same class rates as class 1a or 1b 113.31property under subdivision 22. The value of the remaining land including improvements 113.32up to the first tier valuation limit of agricultural homestead property has a net class rate of 113.330.55 0.5 percent of market value. The remaining property over the first tier has a class rate 113.34of one percent of market value. For purposes of this subdivision, the "first tier valuation 114.1limit of agricultural homestead property" and "first tier" means the limit certified under 114.2section 273.11, subdivision 23. 114.3 (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 114.4are agricultural land and buildings. Class 2a property has a net class rate of one percent of 114.5market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a 114.6property may contain property that would otherwise be classified as 2b, including but not 114.7limited to sloughs, wooded wind shelters, acreage abutting ditches, and other similar land 114.8impractical for the assessor to value separately from the rest of the property. 114.9 An assessor may classify the part of a parcel described in this subdivision that is used 114.10for agricultural purposes as class 2a and the remainder in the class appropriate to its use. 114.11 (c) Class 2b property is (1) rural vacant land consists of parcels of property, 114.12or portions thereof, that are unplatted real estate, rural in character and not used for 114.13agricultural purposes, including land used exclusively for growing trees for timber, 114.14lumber, and wood and wood products; (2) real estate, that is not improved with a structure 114.15and is used exclusively for growing trees for timber, lumber, and wood and wood products, 114.16if the owner has participated or is participating in a cost-sharing program for afforestation, 114.17reforestation, or timber stand improvement on that particular property, administered or 114.18coordinated by the commissioner of natural resources; (3) real estate that is nonhomestead 114.19agricultural land; or (4) a landing area or public access area of a privately owned public 114.20use airport. The presence of a minor, ancillary nonresidential structure as defined by the 114.21commissioner of revenue does not disqualify the property from classification under this 114.22paragraph. Any parcel of 20 acres or more improved with a structure that is not a minor, 114.23ancillary nonresidential structure must be split-classified, and ten acres must be assigned 114.24to the split parcel containing the structure. Class 2b property has a net class rate of one 114.25percent of market value, except that unplatted property described in clause (1) or (2) has 114.26a net class rate of .65 percent if it consists unless it is part of an agricultural homestead 114.27under paragraph (a), or qualifies as class 2c under paragraph (d). 114.28 (d) Class 2c managed forest land consists of no less than ten 20 and no more than 114.291,920 acres and statewide per taxpayer that is being managed under a forest management 114.30plan that meets the requirements of chapter 290C, but is not enrolled in the sustainable 114.31forest resource management incentive program. It has a class rate of .65 percent, provided 114.32that the owner of the property must apply to the assessor annually to receive the reduced 114.33class rate and provide the information required by the assessor to verify that the property 114.34qualifies for the reduced rate. The commissioner of natural resources must concur that the 114.35land is qualified. The commissioner of natural resources shall annually provide county 114.36assessors verification information on a timely basis. 115.1 (c) (e) Agricultural land as used in this section means contiguous acreage of ten 115.2acres or more, used during the preceding year for agricultural purposes. "Agricultural 115.3purposes" as used in this section means the raising or, cultivation, drying, or storage of 115.4agricultural products for sale, or the storage of machinery or equipment used in support 115.5of agricultural production by the same farm entity. For a property to be classified as 115.6agricultural based only on the drying or storage of agricultural products, the products 115.7being dried or stored must have been produced by the same farm entity as the entity 115.8operating the drying or storage facility. "Agricultural purposes" also includes enrollment 115.9in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal 115.10Conservation Reserve Program as contained in Public Law 99-198 or a similar state 115.11or federal conservation program if the property was classified as agricultural (i) under 115.12this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment. 115.13Contiguous acreage on the same parcel, or contiguous acreage on an immediately adjacent 115.14parcel under the same ownership, may also qualify as agricultural land, but only if it 115.15is pasture, timber, waste, unusable wild land, or land included in state or federal farm 115.16programs. Agricultural classification for property shall be determined excluding the 115.17house, garage, and immediately surrounding one acre of land, and shall not be based 115.18upon the market value of any residential structures on the parcel or contiguous parcels 115.19under the same ownership. 115.20 (d) (f) Real estate of less than ten acres, excluding the house, garage, and 115.21immediately surrounding one acre of land, of less than ten acres which is exclusively and 115.22 or intensively used for raising or cultivating agricultural products, shall be considered as 115.23agricultural land. To qualify under this paragraph, property that includes a residential 115.24structure must be used intensively for one of the following purposes: 115.25 (i) for drying or storage of grain or storage of machinery or equipment used to 115.26support agricultural activities on other parcels of property operated by the same farming 115.27entity; 115.28 (ii) as a nursery, provided that only those acres used to produce nursery stock are 115.29considered agricultural land; 115.30 (iii) for livestock or poultry confinement, provided that land that is used only for 115.31pasturing and grazing does not qualify; or 115.32 (iv) for market farming; for purposes of this paragraph, "market farming" means the 115.33cultivation of one or more fruits or vegetables or production of animal or other agricultural 115.34products for sale to local markets by the farmer or an organization with which the farmer 115.35is affiliated. 116.1 (g) Land shall be classified as agricultural even if all or a portion of the agricultural 116.2use of that property is the leasing to, or use by another person for agricultural purposes. 116.3 Classification under this subdivision is not determinative for qualifying under 116.4section 273.111. 116.5 (h) The property classification under this section supersedes, for property tax 116.6purposes only, any locally administered agricultural policies or land use restrictions that 116.7define minimum or maximum farm acreage. 116.8 (e) (i) The term "agricultural products" as used in this subdivision includes 116.9production for sale of: 116.10 (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 116.11animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 116.12bees, and apiary products by the owner; 116.13 (2) fish bred for sale and consumption if the fish breeding occurs on land zoned 116.14for agricultural use; 116.15 (3) the commercial boarding of horses if the boarding is done in conjunction with 116.16raising or cultivating agricultural products as defined in clause (1); 116.17 (4) property which is owned and operated by nonprofit organizations used for 116.18equestrian activities, excluding racing; 116.19 (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed 116.20under section 97A.115; 116.21 (6) insects primarily bred to be used as food for animals; 116.22 (7) trees, grown for sale as a crop, including short rotation woody crops, and not 116.23sold for timber, lumber, wood, or wood products; and 116.24 (8) maple syrup taken from trees grown by a person licensed by the Minnesota 116.25Department of Agriculture under chapter 28A as a food processor. 116.26 (f) (j) If a parcel used for agricultural purposes is also used for commercial or 116.27industrial purposes, including but not limited to: 116.28 (1) wholesale and retail sales; 116.29 (2) processing of raw agricultural products or other goods; 116.30 (3) warehousing or storage of processed goods; and 116.31 (4) office facilities for the support of the activities enumerated in clauses (1), (2), 116.32and (3), 116.33the assessor shall classify the part of the parcel used for agricultural purposes as class 116.341b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 116.35use. The grading, sorting, and packaging of raw agricultural products for first sale is 116.36considered an agricultural purpose. A greenhouse or other building where horticultural 117.1or nursery products are grown that is also used for the conduct of retail sales must be 117.2classified as agricultural if it is primarily used for the growing of horticultural or nursery 117.3products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 117.4those products. Use of a greenhouse or building only for the display of already grown 117.5horticultural or nursery products does not qualify as an agricultural purpose. 117.6 The assessor shall determine and list separately on the records the market value of 117.7the homestead dwelling and the one acre of land on which that dwelling is located. If any 117.8farm buildings or structures are located on this homesteaded acre of land, their market 117.9value shall not be included in this separate determination. 117.10 (g) (k) Class 2d airport landing area consists of a landing area or public access area 117.11of a privately owned public use airport. It has a class rate of one percent of market value. 117.12To qualify for classification under this paragraph (b), clause (4), a privately owned public 117.13use airport must be licensed as a public airport under section 360.018. For purposes of this 117.14paragraph (b), clause (4), "landing area" means that part of a privately owned public use 117.15airport properly cleared, regularly maintained, and made available to the public for use by 117.16aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing 117.17or navigational aids. A landing area also includes land underlying both the primary surface 117.18and the approach surfaces that comply with all of the following: 117.19 (i) the land is properly cleared and regularly maintained for the primary purposes of 117.20the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 117.21facilities for servicing, repair, or maintenance of aircraft is not included as a landing area; 117.22 (ii) the land is part of the airport property; and 117.23 (iii) the land is not used for commercial or residential purposes. 117.24The land contained in a landing area under this paragraph (b), clause (4), must be described 117.25and certified by the commissioner of transportation. The certification is effective until it 117.26is modified, or until the airport or landing area no longer meets the requirements of this 117.27paragraph (b), clause (4). For purposes of this paragraph (b), clause (4), "public access 117.28area" means property used as an aircraft parking ramp, apron, or storage hangar, or an 117.29arrival and departure building in connection with the airport. 117.30 (l) Class 2e consists of land with a commercial aggregate deposit that is not actively 117.31being mined and is not otherwise classified as class 2a or 2b. It has a class rate of one 117.32percent of market value. To qualify for classification under this paragraph, the property 117.33must be at least ten contiguous acres in size and the owner of the property must record with 117.34the county recorder of the county in which the property is located an affidavit containing: 117.35 (1) a legal description of the property; 118.1 (2) a disclosure that the property contains a commercial aggregate deposit that is not 118.2actively being mined but is present on the entire parcel enrolled; 118.3 (3) documentation that the conditional use under the county or local zoning 118.4ordinance of this property is for mining; and 118.5 (4) documentation that a permit has been issued by the local unit of government 118.6or the mining activity is allowed under local ordinance. The disclosure must include a 118.7statement from a registered professional geologist, engineer, or soil scientist delineating 118.8the deposit and certifying that it is a commercial aggregate deposit. 118.9 For purposes of this section and section 273.1115, "commercial aggregate deposit" 118.10means a deposit that will yield crushed stone or sand and gravel that is suitable for use 118.11as a construction aggregate; and "actively mined" means the removal of top soil and 118.12overburden in preparation for excavation or excavation of a commercial deposit. 118.13 (m) When any portion of the property under this subdivision or subdivision 22 118.14begins to be actively mined, the owner must file a supplemental affidavit within 60 days 118.15from the day any aggregate is removed stating the number of acres of the property that is 118.16actively being mined. The acres actively being mined must be (1) valued and classified 118.17under subdivision 24 in the next subsequent assessment year, and (2) removed from the 118.18aggregate resource preservation property tax program under section 273.1115, if the 118.19land was enrolled in that program. Copies of the original affidavit and all supplemental 118.20affidavits must be filed with the county assessor, the local zoning administrator, and the 118.21Department of Natural Resources, Division of Land and Minerals. A supplemental 118.22affidavit must be filed each time a subsequent portion of the property is actively mined, 118.23provided that the minimum acreage change is five acres, even if the actual mining activity 118.24constitutes less than five acres. 118.25EFFECTIVE DATE.The portions of this section reducing the agricultural class 118.26rate, expanding the definition of "agricultural purposes" in paragraph (e) and "agricultural 118.27products" in paragraph (h), and relating to managed forest land in paragraph (d), are 118.28effective for taxes payable in 2009 and thereafter. The remainder of the section is effective 118.29for taxes payable in 2010 and thereafter. 118.30 Sec. 27. Minnesota Statutes 2006, section 273.13, subdivision 25, as amended by Laws 118.312008, chapter 154, article 2, section 13, is amended to read: 118.32 Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 118.33units and used or held for use by the owner or by the tenants or lessees of the owner 118.34as a residence for rental periods of 30 days or more, excluding property qualifying for 118.35class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 119.1than hospitals exempt under section 272.02, and contiguous property used for hospital 119.2purposes, without regard to whether the property has been platted or subdivided. The 119.3market value of class 4a property has a class rate of 1.25 percent. 119.4 (b) Class 4b includes: 119.5 (1) residential real estate containing less than four units that does not qualify as class 119.64bb, other than seasonal residential recreational property; 119.7 (2) manufactured homes not classified under any other provision; 119.8 (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 119.9farm classified under subdivision 23, paragraph (b) containing two or three units; and 119.10 (4) unimproved property that is classified residential as determined under subdivision 119.1133. 119.12 The market value of class 4b property has a class rate of 1.25 percent. 119.13 (c) Class 4bb includes: 119.14 (1) nonhomestead residential real estate containing one unit, other than seasonal 119.15residential recreational property; and 119.16 (2) a single family dwelling, garage, and surrounding one acre of property on a 119.17nonhomestead farm classified under subdivision 23, paragraph (b). 119.18 Class 4bb property has the same class rates as class 1a property under subdivision 22. 119.19 Property that has been classified as seasonal residential recreational property at 119.20any time during which it has been owned by the current owner or spouse of the current 119.21owner does not qualify for class 4bb. 119.22 (d) Class 4c property includes: 119.23 (1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph 119.24(b), clause (1), real and personal property devoted to temporary and seasonal residential 119.25occupancy for recreation purposes, including real and personal property devoted to 119.26temporary and seasonal residential occupancy for recreation purposes and not devoted to 119.27commercial purposes for more than 250 days in the year preceding the year of assessment. 119.28For purposes of this clause, property is devoted to a commercial purpose on a specific 119.29day if any portion of the property is used for residential occupancy, and a fee is charged 119.30for residential occupancy. Class 4c property must contain three or more rental units. A 119.31"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual 119.32camping site equipped with water and electrical hookups for recreational vehicles. Class 119.334c property must provide recreational activities such as renting ice fishing houses, boats 119.34and motors, snowmobiles, downhill or cross-country ski equipment; provide marina 119.35services, launch services, or guide services; or sell bait and fishing tackle. A camping 119.36pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c 120.1regardless of the term of the rental agreement, as long as the use of the camping pad 120.2does not exceed 250 days. In order for a property to be classified as class 4c, seasonal 120.3residential recreational for commercial purposes under this clause, at least 40 percent of 120.4the annual gross lodging receipts related to the property must be from business conducted 120.5during 90 consecutive days and either (i) at least 60 percent of all paid bookings by 120.6lodging guests during the year must be for periods of at least two consecutive nights; or 120.7(ii) at least 20 percent of the annual gross receipts must be from charges for rental of fish 120.8houses, boats and motors, snowmobiles, downhill or cross-country ski equipment, or 120.9charges for marina services, launch services, and guide services, or the sale of bait and 120.10fishing tackle. For purposes of this determination, a paid booking of five or more nights 120.11shall be counted as two bookings. Class 4c also includes commercial use real property 120.12used exclusively for recreational purposes in conjunction with class 4c property devoted 120.13to temporary and seasonal residential occupancy for recreational purposes, up to a total of 120.14two acres, provided the property is not devoted to commercial recreational use for more 120.15than 250 days in the year preceding the year of assessment and is located within two 120.16miles of the class 4c property with which it is used. Owners of real and personal property 120.17devoted to temporary and seasonal residential occupancy for recreation purposes and all 120.18or a portion of which was devoted to commercial purposes for not more than 250 days in 120.19the year preceding the year of assessment desiring classification as class 4c, must submit a 120.20declaration to the assessor designating the cabins or units occupied for 250 days or less in 120.21the year preceding the year of assessment by January 15 of the assessment year. Those 120.22cabins or units and a proportionate share of the land on which they are located must be 120.23designated class 4c as otherwise provided. The remainder of the cabins or units and 120.24a proportionate share of the land on which they are located will be designated as class 120.253a. The owner of property desiring designation as class 4c property must provide guest 120.26registers or other records demonstrating that the units for which class 4c designation is 120.27sought were not occupied for more than 250 days in the year preceding the assessment if 120.28so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, 120.29(4) conference center or meeting room, and (5) other nonresidential facility operated on a 120.30commercial basis not directly related to temporary and seasonal residential occupancy for 120.31recreation purposes does not qualify for class 4c; 120.32 (2) qualified property used as a golf course if: 120.33 (i) it is open to the public on a daily fee basis. It may charge membership fees or 120.34dues, but a membership fee may not be required in order to use the property for golfing, 120.35and its green fees for golfing must be comparable to green fees typically charged by 120.36municipal courses; and 121.1 (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 121.2 A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 121.3with the golf course is classified as class 3a property; 121.4 (3) real property up to a maximum of three acres of land owned and used by a 121.5nonprofit community service oriented organization and that is not used for residential 121.6purposes on either a temporary or permanent basis, qualifies for class 4c provided that 121.7it meets either of the following: 121.8 (i) the property is not used for a revenue-producing activity for more than six days 121.9in the calendar year preceding the year of assessment; or 121.10 (ii) the organization makes annual charitable contributions and donations at least 121.11equal to the property's previous year's property taxes and the property is allowed to be 121.12used for public and community meetings or events for no charge, as appropriate to the 121.13size of the facility. 121.14 For purposes of this clause, 121.15 (A) "charitable contributions and donations" has the same meaning as lawful 121.16gambling purposes under section 349.12, subdivision 25, excluding those purposes 121.17relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; 121.18 (B) "property taxes" excludes the state general tax; 121.19 (C) a "nonprofit community service oriented organization" means any corporation, 121.20society, association, foundation, or institution organized and operated exclusively for 121.21charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 121.22federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue 121.23Code of 1986, as amended through December 31, 1990; and 121.24 (D) "revenue-producing activities" shall include but not be limited to property or that 121.25portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 121.26liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 121.27alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 121.28insurance business, or office or other space leased or rented to a lessee who conducts a 121.29for-profit enterprise on the premises. 121.30Any portion of the property qualifying under item (i) which is used for revenue-producing 121.31activities for more than six days in the calendar year preceding the year of assessment 121.32shall be assessed as class 3a. The use of the property for social events open exclusively 121.33to members and their guests for periods of less than 24 hours, when an admission is 121.34not charged nor any revenues are received by the organization shall not be considered a 121.35revenue-producing activity. 122.1 The organization shall maintain records of its charitable contributions and donations 122.2and of public meetings and events held on the property and make them available upon 122.3request any time to the assessor to ensure eligibility. An organization meeting the 122.4requirement under item (ii) must file an application by May 1 with the assessor for 122.5eligibility for the current year's assessment. The commissioner shall prescribe a uniform 122.6application form and instructions; 122.7 (4) postsecondary student housing of not more than one acre of land that is owned by 122.8a nonprofit corporation organized under chapter 317A and is used exclusively by a student 122.9cooperative, sorority, or fraternity for on-campus housing or housing located within two 122.10miles of the border of a college campus; 122.11 (5) manufactured home parks as defined in section 327.14, subdivision 3; 122.12 (6) real property that is actively and exclusively devoted to indoor fitness, health, 122.13social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 122.14and is located within the metropolitan area as defined in section 473.121, subdivision 2; 122.15 (7) a leased or privately owned noncommercial aircraft storage hangar not exempt 122.16under section 272.01, subdivision 2, and the land on which it is located, provided that: 122.17 (i) the land is on an airport owned or operated by a city, town, county, Metropolitan 122.18Airports Commission, or group thereof; and 122.19 (ii) the land lease, or any ordinance or signed agreement restricting the use of the 122.20leased premise, prohibits commercial activity performed at the hangar. 122.21 If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 122.22be filed by the new owner with the assessor of the county where the property is located 122.23within 60 days of the sale; 122.24 (8) a privately owned noncommercial aircraft storage hangar not exempt under 122.25section 272.01, subdivision 2, and the land on which it is located, provided that: 122.26 (i) the land abuts a public airport; and 122.27 (ii) the owner of the aircraft storage hangar provides the assessor with a signed 122.28agreement restricting the use of the premises, prohibiting commercial use or activity 122.29performed at the hangar; and 122.30 (9) residential real estate, a portion of which is used by the owner for homestead 122.31purposes, and that is also a place of lodging, if all of the following criteria are met: 122.32 (i) rooms are provided for rent to transient guests that generally stay for periods 122.33of 14 or fewer days; 122.34 (ii) meals are provided to persons who rent rooms, the cost of which is incorporated 122.35in the basic room rate; 123.1 (iii) meals are not provided to the general public except for special events on fewer 123.2than seven days in the calendar year preceding the year of the assessment; and 123.3 (iv) the owner is the operator of the property. 123.4The market value subject to the 4c classification under this clause is limited to five rental 123.5units. Any rental units on the property in excess of five, must be valued and assessed as 123.6class 3a. The portion of the property used for purposes of a homestead by the owner must 123.7be classified as class 1a property under subdivision 22.; and 123.8 (10) real property up to a maximum of three acres and operated as a restaurant 123.9as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 123.10as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 123.11is either devoted to commercial purposes for not more than 250 consecutive days, or 123.12receives at least 60 percent of its annual gross receipts from business conducted during 123.13four consecutive months. Gross receipts from the sale of alcoholic beverages must be 123.14included in determining the property's qualification under subitem (B). The property's 123.15primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 123.16sales located on the premises must be excluded. Owners of real property desiring 4c 123.17classification under this clause must submit an annual declaration to the assessor by 123.18February 1 of the current assessment year, based on the property's relevant information for 123.19the preceding assessment year. 123.20 Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 123.21parcel of seasonal residential recreational property not used for commercial purposes has 123.22the same class rates as class 4bb property, (ii) manufactured home parks assessed under 123.23clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 123.24residential recreational property has a class rate of one percent for the first $500,000 of 123.25market value, and 1.25 percent for the remaining market value, (iv) the market value of 123.26property described in clause (4) has a class rate of one percent, (v) the market value 123.27of property described in clauses (2) and, (6), and (10) has a class rate of 1.25 percent, 123.28and (vi) that portion of the market value of property in clause (9) qualifying for class 4c 123.29property has a class rate of 1.25 percent. 123.30 (e) Class 4d property is qualifying low-income rental housing certified to the assessor 123.31by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 123.32of the units in the building qualify as low-income rental housing units as certified under 123.33section 273.128, subdivision 3, only the proportion of qualifying units to the total number 123.34of units in the building qualify for class 4d. The remaining portion of the building shall be 123.35classified by the assessor based upon its use. Class 4d also includes the same proportion of 123.36land as the qualifying low-income rental housing units are to the total units in the building. 124.1For all properties qualifying as class 4d, the market value determined by the assessor must 124.2be based on the normal approach to value using normal unrestricted rents. 124.3 Class 4d property has a class rate of 0.75 percent. 124.4EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 124.5thereafter, except that for the 2008 assessment year, the declaration to the assessor shall be 124.6September 1, 2008. 124.7 Sec. 28. Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read: 124.8 Subd. 33. Classification of unimproved property. (a) All real property that is not 124.9improved with a structure must be classified according to its current use. 124.10 (b) Except as provided in subdivision 23, paragraph (c), real property that is not 124.11improved with a structure and for which there is no identifiable current use must be 124.12classified according to its highest and best use permitted under the local zoning ordinance. 124.13If the ordinance permits more than one use, the land must be classified according to the 124.14highest and best use permitted under the ordinance. If no such ordinance exists, the 124.15assessor shall consider the most likely potential use of the unimproved land based upon 124.16the use made of surrounding land or land in proximity to the unimproved land. 124.17EFFECTIVE DATE.This section is effective for taxes payable in 2010 and 124.18thereafter. 124.19 Sec. 29. Minnesota Statutes 2006, section 273.1384, subdivision 2, is amended to read: 124.20 Subd. 2. Agricultural homestead market value credit. Property classified as class 124.212a agricultural homestead under section 273.13, subdivision 23, paragraph (a), is eligible 124.22for an agricultural credit. The credit is computed using the property's agricultural credit 124.23market value, defined for this purpose as the property's class 2a market value excluding 124.24the market value of the house, garage, and immediately surrounding one acre of land. The 124.25credit is equal to 0.3 percent of the first $115,000 of the property's agricultural credit 124.26market value minus .05 percent of the property's agricultural credit market value in excess 124.27of $115,000, subject to a maximum reduction of $115. In the case of property that is 124.28classified in as part as class 2a agricultural homestead and in part as class 2b nonhomestead 124.29farm land solely because not all the owners occupy or farm the property, not all the owners 124.30have qualifying relatives occupying or farming the property, or solely because not all the 124.31spouses of owners occupy the property, the credit must be initially computed as if that 124.32nonhomestead agricultural land was also classified as class 2a agricultural homestead and 124.33then prorated to the owner-occupant's percentage of ownership. 125.1EFFECTIVE DATE.This section is effective for taxes payable in 2010 and 125.2thereafter. 125.3 Sec. 30. Minnesota Statutes 2007 Supplement, section 273.1393, is amended to read: 125.4273.1393 COMPUTATION OF NET PROPERTY TAXES. 125.5 Notwithstanding any other provisions to the contrary, "net" property taxes are 125.6determined by subtracting the credits in the order listed from the gross tax: 125.7 (1) disaster credit as provided in sections 273.1231 to 273.1235; 125.8 (2) powerline credit as provided in section 273.42; 125.9 (3) agricultural preserves credit as provided in section 473H.10; 125.10 (4) enterprise zone credit as provided in section 469.171; 125.11 (5) disparity reduction credit; 125.12 (6) conservation tax credit as provided in section 273.119; 125.13 (7) homestead and agricultural credits as provided in section 273.1384; 125.14 (8) taconite homestead credit as provided in section 273.135; and 125.15 (9) supplemental homestead credit as provided in section 273.1391; and 125.16 (10) the bovine tuberculosis zone credit, as provided in section 273.113. 125.17 The combination of all property tax credits must not exceed the gross tax amount. 125.18EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 125.19thereafter. 125.20 Sec. 31. Minnesota Statutes 2006, section 273.19, subdivision 1, is amended to read: 125.21 Subdivision 1. Tax-exempt property; lease. Except as provided in subdivision 3 or 125.224, tax-exempt property held under a lease for a term of at least one year, and not taxable 125.23under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be 125.24considered, for all purposes of taxation, as the property of the person holding it. In this 125.25subdivision, "tax-exempt property" means property owned by the United States, the state, 125.26a school, or any religious, scientific, or benevolent society or institution, incorporated 125.27or unincorporated, or any corporation whose property is not taxed in the same manner 125.28as other property. This subdivision does not apply to property exempt from taxation 125.29under section 272.01, subdivision 2, paragraph (b), clauses (2), (3), and (4), or to property 125.30exempt from taxation under section 272.0213. 125.31EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 125.32thereafter. 125.33 Sec. 32. Minnesota Statutes 2006, section 274.14, is amended to read: 126.1274.14 LENGTH OF SESSION; RECORD. 126.2 The board may meet on any ten consecutive meeting days in June, after the second 126.3Friday in June. The actual meeting dates must be contained on the valuation notices 126.4mailed to each property owner in the county as provided in section 273.121. For this 126.5purpose, "meeting days" is defined as any day of the week excluding Saturday and Sunday. 126.6At the board's discretion, "meeting days" may include Saturday. No action taken by the 126.7county board of review after June 30 is valid, except for corrections permitted in sections 126.8273.01 and 274.01. The county auditor shall keep an accurate record of the proceedings 126.9and orders of the board. The record must be published like other proceedings of county 126.10commissioners. A copy of the published record must be sent to the commissioner of 126.11revenue, with the abstract of assessment required by section 274.16. 126.12 For counties that conduct either regular board of review meetings or open book 126.13meetings, at least one of the meeting days must include a meeting that does not end 126.14before 7:00 p.m. For counties that require taxpayer appointments for the board of review, 126.15appointments must include some available times that extend until at least 7:00 p.m. The 126.16county may have a Saturday meeting in lieu of, or in addition to, the extended meeting 126.17times under this paragraph. 126.18EFFECTIVE DATE.This section is effective for assessment year 2009 and 126.19thereafter. 126.20 Sec. 33. Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision 126.21to read: 126.22 Subd. 1d. Failure to certify proposed levy. If a taxing authority fails to certify 126.23its proposed levy by the due dates specified under subdivisions 1, 1a, and 1c, the county 126.24auditor shall use the authority's previous year's final levy under section 275.07, subdivision 126.251, for purposes of determining its proposed property tax notices and public advertisements 126.26under this section. 126.27EFFECTIVE DATE.This section is effective for notices prepared in 2008, for 126.28property taxes payable in 2009 and thereafter. 126.29 Sec. 34. Minnesota Statutes 2006, section 275.065, subdivision 8, is amended to read: 126.30 Subd. 8. Hearing. Notwithstanding any other provision of law, Ramsey County, 126.31the city of St. Paul, and Independent School District No. 625 are authorized to and shall 126.32hold their initial public hearing jointly. The hearing must be held on during the week of 126.33the second Tuesday of December each year. The advertisement required in subdivision 127.15a may be a joint advertisement. The hearing is otherwise subject to the requirements 127.2of this section. 127.3 Ramsey County is authorized to hold an additional initial hearing or hearings as 127.4provided under this section, provided that any additional hearings must not conflict 127.5with the initial or continuation hearing dates of the other taxing districts. However, if 127.6Ramsey County elects not to hold such additional initial hearing or hearings, the joint 127.7initial hearing required by this subdivision must be held in a St. Paul location convenient 127.8to residents of Ramsey County. 127.9EFFECTIVE DATE.This section is effective for proposed notices and hearings 127.10held in 2008 and thereafter. 127.11 Sec. 35. Minnesota Statutes 2006, section 282.08, is amended to read: 127.12282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS. 127.13 The net proceeds from the sale or rental of any parcel of forfeited land, or from the 127.14sale of products from the forfeited land, must be apportioned by the county auditor to the 127.15taxing districts interested in the land, as follows: 127.16 (1) the portion required to pay any amounts included in the appraised value 127.17under section 282.01, subdivision 3, as representing increased value due to any public 127.18improvement made after forfeiture of the parcel to the state, but not exceeding the amount 127.19certified by the clerk of the municipality appropriate governmental authority must be 127.20apportioned to the municipal governmental subdivision entitled to it; 127.21 (2) the portion required to pay any amount included in the appraised value under 127.22section 282.019, subdivision 5, representing increased value due to response actions 127.23taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses 127.24certified by the Pollution Control Agency or the commissioner of agriculture, must be 127.25apportioned to the agency or the commissioner of agriculture and deposited in the fund 127.26from which the expenses were paid; 127.27 (3) the portion of the remainder required to discharge any special assessment 127.28chargeable against the parcel for drainage or other purpose whether due or deferred at 127.29the time of forfeiture, must be apportioned to the municipal governmental subdivision 127.30entitled to it; and 127.31 (4) any balance must be apportioned as follows: 127.32 (i) The county board may annually by resolution set aside no more than 30 percent 127.33of the receipts remaining to be used for forest development on tax-forfeited land and 127.34dedicated memorial forests, to be expended under the supervision of the county board. It 128.1must be expended only on projects improving the health and management of the forest 128.2resource. 128.3 (ii) The county board may annually by resolution set aside no more than 20 percent 128.4of the receipts remaining to be used for the acquisition and maintenance of county parks 128.5or recreational areas as defined in sections 398.31 to 398.36, to be expended under the 128.6supervision of the county board. 128.7 (iii) Any balance remaining must be apportioned as follows: county, 40 percent; 128.8town or city, 20 percent; and school district, 40 percent, provided, however, that in 128.9unorganized territory that portion which would have accrued to the township must be 128.10administered by the county board of commissioners. 128.11EFFECTIVE DATE.This section is effective the day following final enactment. 128.12 Sec. 36. Minnesota Statutes 2006, section 298.75, subdivision 1, as amended by Laws 128.132008, chapter 154, article 8, section 15, is amended to read: 128.14 Subdivision 1. Definitions. Except as may otherwise be provided, the following 128.15words, when used in this section, shall have the meanings herein ascribed to them. 128.16 (a) "Aggregate material" means: 128.17 (1) nonmetallic natural mineral aggregate including, but not limited to sand, silica 128.18sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is 128.19transported on a public road, street, or highway, provided that nonmetallic aggregate 128.20material does not include dimension stone and dimension granite; and 128.21 (2) taconite tailings, crushed rock, and architectural or dimension stone and 128.22dimension granite removed from a taconite mine or the site of a previously operated 128.23taconite mine. 128.24 Aggregate material must be measured or weighed after it has been extracted from 128.25the pit, quarry, or deposit. 128.26 (b) "Person" means any individual, firm, partnership, corporation, organization, 128.27trustee, association, or other entity. 128.28 (c) "Operator" means any person engaged in the business of removing aggregate 128.29material from the surface or subsurface of the soil, for the purpose of sale, either directly 128.30or indirectly, through the use of the aggregate material in a marketable product or service. 128.31 (d) "Extraction site" means a pit, quarry, or deposit containing aggregate material 128.32and any contiguous property to the pit, quarry, or deposit which is used by the operator for 128.33stockpiling the aggregate material. 129.1 (e) "Importer" means any person who buys aggregate material produced excavated 129.2from a county not listed in paragraph (f) or another state and causes the aggregate material 129.3to be imported into a county in this state which imposes a tax on aggregate material. 129.4 (f) "County" means the counties of Pope, Stearns, Benton, Sherburne, Carver, Scott, 129.5Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, 129.6Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley, Hennepin, 129.7Washington, Chisago, and Ramsey. County also means any other county whose board 129.8has voted after a public hearing to impose the tax under this section and has notified the 129.9commissioner of revenue of the imposition of the tax. 129.10 (g) "Borrow" means granular borrow, consisting of durable particles of gravel and 129.11sand, crushed quarry or mine rock, crushed gravel or stone, or any combination thereof, 129.12the ratio of the portion passing the (#200) sieve divided by the portion passing the (1 inch) 129.13sieve may not exceed 20 percent by mass. 129.14EFFECTIVE DATE.This section is effective January 1, 2009. 129.15 Sec. 37. Minnesota Statutes 2006, section 298.75, subdivision 2, is amended to read: 129.16 Subd. 2. Tax imposed. (a) A county that imposes the aggregate production tax shall 129.17impose upon every importer and operator a production tax up to ten cents of 21.5 cents per 129.18cubic yard or up to seven 15 cents per ton of aggregate material removed excavated in the 129.19county except that the county board may decide not to impose this tax if it determines 129.20that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of 129.21aggregate material from that county. The tax shall not be imposed on aggregate material 129.22produced excavated in the county when until the aggregate material is transported from 129.23the extraction site or sold, whichever occurs first. When aggregate material is stored in a 129.24stockpile within the state of Minnesota and a public highway, road or street is not used 129.25for transporting the aggregate material, the tax shall not be imposed until either when the 129.26aggregate material is sold, or when it is transported from the stockpile site, or when it is 129.27used from the stockpile, whichever occurs first. 129.28 (b) A county that imposes the aggregate production tax under paragraph (a) shall 129.29impose upon every importer a production tax of 21.5 cents per cubic yard or 15 cents per 129.30ton of aggregate material imported into the county. The tax shall be imposed when the 129.31aggregate material is imported from the extraction site or sold. When imported aggregate 129.32material is stored in a stockpile within the state of Minnesota and a public highway, road, 129.33or street is not used for transporting the aggregate material, the tax shall be imposed either 129.34when the aggregate material is sold, when it is transported from the stockpile site, or when 130.1it is used from the stockpile, whichever occurs first. The tax shall be imposed on an 130.2importer when the aggregate material is imported into the county that imposes the tax. 130.3 (c) If the aggregate material is transported directly from the extraction site to a 130.4waterway, railway, or another mode of transportation other than a highway, road or street, 130.5the tax imposed by this section shall be apportioned equally between the county where the 130.6aggregate material is extracted and the county to which the aggregate material is originally 130.7transported. If that destination is not located in Minnesota, then the county where the 130.8aggregate material was extracted shall receive all of the proceeds of the tax. 130.9 (d) A county, city, or town that receives revenue under this section is prohibited 130.10from imposing any additional host community fees on aggregate production within that 130.11county, city, or town. 130.12EFFECTIVE DATE.This section is effective January 1, 2009. 130.13 Sec. 38. Minnesota Statutes 2006, section 298.75, subdivision 6, is amended to read: 130.14 Subd. 6. Penalties; removal of aggregate if previous tax not paid; false report. 130.15 It is a misdemeanor for any operator or importer to remove aggregate material from a 130.16pit, quarry, or deposit or for any importer to import aggregate material unless all taxes 130.17due under this section for the all previous reporting period periods have been paid or 130.18objections thereto have been filed pursuant to subdivision 4. 130.19 It is a misdemeanor for the operator or importer who is required to file a report to file 130.20a false report with intent to evade the tax. 130.21EFFECTIVE DATE.This section is effective January 1, 2009. 130.22 Sec. 39. Minnesota Statutes 2006, section 298.75, subdivision 7, as amended by Laws 130.232008, chapter 154, article 8, section 17, is amended to read: 130.24 Subd. 7. Proceeds of taxes. (a) All money collected as taxes under this section 130.25on aggregate material as defined in subdivision 1, paragraph (a), clause (1), shall be 130.26deposited in the county treasury and credited as follows, for expenditure by the county 130.27board: according to this subdivision. 130.28 (b) The county auditor may retain an annual administrative fee of up to five percent 130.29of the total taxes collected in any year. 130.30 (c) The balance of the taxes, after any deduction under paragraph (b), shall be 130.31credited as follows: 130.32 (a) Sixty (1) 42.5 percent to the county road and bridge fund for expenditure for the 130.33maintenance, construction and reconstruction of roads, highways and bridges; 131.1 (b) Thirty (2) 42.5 percent to the road and bridge fund of those towns as determined 131.2by the county board and to the general fund or other designated fund of those cities as 131.3determined by the county board of the city or town in which the mine is located, or to the 131.4county, if the mine is located in an unorganized town, to be expended for maintenance, 131.5construction and reconstruction of roads, highways and bridges; and 131.6 (c) Ten (3) 15 percent to a special reserve fund which is hereby established, for 131.7expenditure for the restoration of abandoned pits, quarries, or deposits located upon public 131.8and tax forfeited lands within the county. 131.9 If there are no abandoned pits, quarries or deposits located upon public or tax 131.10forfeited lands within the county, this portion of the tax shall be deposited in the county 131.11road and bridge fund for expenditure for the maintenance, construction and reconstruction 131.12of roads, highways and bridges used for any other unmet reclamation need or for 131.13conservation or other environmental needs. 131.14EFFECTIVE DATE.This section is effective January 1, 2009. 131.15 Sec. 40. Minnesota Statutes 2006, section 365.243, is amended by adding a subdivision 131.16to read: 131.17 Subd. 3. Levy for first responder association. A county board may annually levy 131.18taxes on property located within the area of unorganized territory to which a first responder 131.19or fire protection association provides first responder services. By July 1 of the levy year, 131.20the association must certify to the county board the area of the unorganized township to 131.21which the association will provide first responder services during the following calendar 131.22year. The proceeds of the levy must be distributed to the association. 131.23EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 131.24thereafter. 131.25 Sec. 41. Minnesota Statutes 2006, section 365A.095, as amended by Laws 2008, 131.26chapter 154, article 10, section 8, is amended to read: 131.27365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE; 131.28REFUND OF SURPLUS. 131.29 Subdivision 1. Petition; procedure. A petition signed by at least 75 percent of the 131.30property owners in the territory of the subordinate service district requesting the removal 131.31of the district may be presented to the town board. Within 30 days after the town board 131.32receives the petition, the town clerk shall determine the validity of the signatures on 131.33the petition. If the requisite number of signatures are certified as valid, the town board 132.1must hold a public hearing on the petitioned matter. Within 30 days after the end of 132.2the hearing, the town board must decide whether to discontinue the subordinate service 132.3district, continue as it is, or take some other action with respect to it. 132.4 Subd. 2. Bonds Option to refund surplus. If obligations have been issued for the 132.5benefit of the subordinate service district, the rates, charges, and tax levies, if any, continue 132.6until the obligations and any obligations issued to refund them have been paid in full.If the 132.7district is removed under subdivision 1, after all outstanding obligations of the district 132.8have been paid in full, the town board may vote to refund any surplus tax revenue or 132.9service charge, or any part of it, collected from the district under section 365A.08. The 132.10refund must be distributed equally to the owners of any property within the discontinued 132.11district that were charged the extra tax or service fee during the most recent tax year for 132.12which the tax or service fee was imposed. Any surplus not refunded under this section 132.13must be transferred to the town's general fund. 132.14EFFECTIVE DATE.This section is effective the day following final enactment. 132.15 Sec. 42. Minnesota Statutes 2006, section 429.101, subdivision 1, is amended to read: 132.16 Subdivision 1. Ordinances. (a) In addition to any other method authorized by 132.17law or charter, the governing body of any municipality may provide for the collection 132.18of unpaid special charges as a special assessment against the property benefited for all 132.19or any part of the cost of: 132.20 (1) snow, ice, or rubbish removal from sidewalks; 132.21 (2) weed elimination from streets or private property; 132.22 (3) removal or elimination of public health or safety hazards from private property, 132.23excluding any structure included under the provisions of sections 463.15 to 463.26; 132.24 (4) installation or repair of water service lines, street sprinkling or other dust 132.25treatment of streets; 132.26 (5) the trimming and care of trees and the removal of unsound trees from any street; 132.27 (6) the treatment and removal of insect infested or diseased trees on private property, 132.28the repair of sidewalks and alleys; 132.29 (7) the operation of a street lighting system; 132.30 (8) the operation and maintenance of a fire protection or a pedestrian skyway system; 132.31 (9) reinspections which find noncompliance after the due date for compliance with 132.32an order to correct inspections relating to a municipal housing maintenance code violation; 132.33 (10) the recovery of any disbursements under section 504B.445, subdivision 4, 132.34clause (5), including disbursements for payment of utility bills and other services, even if 133.1provided by a third party, necessary to remedy violations as described in section 504B.445, 133.2subdivision 4 , clause (2); or 133.3 (11) [Repealed, 2004 c 275 s 5] 133.4as a special assessment against the property benefited. 133.5 (12) the recovery of delinquent vacant building registration fees under a municipal 133.6program designed to identify and register vacant buildings. 133.7 (b) The council may by ordinance adopt regulations consistent with this section to 133.8make this authority effective, including, at the option of the council, provisions for placing 133.9primary responsibility upon the property owner or occupant to do the work personally 133.10(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming, 133.11care, and removal or the operation of a street lighting system) upon notice before the work 133.12is undertaken, and for collection from the property owner or other person served of the 133.13charges when due before unpaid charges are made a special assessment. 133.14EFFECTIVE DATE.This section is effective the day following final enactment. 133.15 Sec. 43. Minnesota Statutes 2006, section 469.1813, subdivision 8, is amended to read: 133.16 Subd. 8. Limitation on abatements. In any year, the total amount of property 133.17taxes abated by a political subdivision under this section may not exceed (1) ten percent 133.18of the current levy net tax capacity of the political subdivision for the taxes payable year 133.19to which the abatement applies, or (2) $200,000, whichever is greater. The limit under 133.20this subdivision does not apply to: 133.21 (i) an uncollected abatement from a prior year that is added to the abatement levy; or 133.22 (ii) a taxpayer whose real and personal property is subject to valuation under 133.23Minnesota Rules, chapter 8100. 133.24EFFECTIVE DATE.This section is effective for abatement resolutions approved 133.25after the day following final enactment. 133.26 Sec. 44. Laws 2008, chapter 154, article 2, section 11, the effective date, is amended to 133.27read: 133.28EFFECTIVE DATE.The amendments of this section to paragraph (b) and to the 133.29class rate decrease and the market value increase of the first tier of class 1c homestead 133.30resorts are effective for taxes payable in 2009 and thereafter. The rest of this section is 133.31effective for taxes payable in 2010 and thereafter. 133.32EFFECTIVE DATE.This section is effective the day following final enactment. 134.1 Sec. 45. Laws 2008, chapter 154, article 2, section 27, is amended to read: 134.2[360.0427] TAX LEVY MAY BE CERTIFIED BY AN AIRPORT 134.3AUTHORITY. 134.4 In any year in which it imposes Imposition of a property tax levy under sections 134.5275.065 to 275.07, which requires an affirmative vote of at least two-thirds of the members 134.6of the authority, an airport authority must submit its proposed levy to the governing body 134.7of the municipality that contains the airport. The municipal governing body may approve 134.8or modify the amount of the levy, and, when it has determined the amount, the authority 134.9must certify to the auditor of the county where the airport is located the amount to be 134.10levied on all taxable property within the boundaries of the airport authority. 134.11EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 134.12thereafter. 134.13 Sec. 46. WHITE COMMUNITY HOSPITAL DISTRICT. 134.14 Subdivision 1. Authorized. Notwithstanding the contiguity requirement in 134.15Minnesota Statutes, section 447.31, subdivision 2, any two or more of the following cities 134.16and towns in St. Louis County may establish by resolution of their respective governing 134.17bodies the White Community Hospital District: the cities of Aurora, Biwabik, and Hoyt 134.18Lakes, and the towns of Biwabik, White, and Colvin. The proposed resolution to establish 134.19the hospital district must be published and is subject to referendum as provided in section 134.20447.31, subdivision 2. 134.21 Subd. 2. Powers; may make grants. (a) Except as otherwise provided in this 134.22section, the White Community Hospital District shall be organized and have the powers 134.23and duties provided in Minnesota Statutes, sections 447.31, except subdivisions 2, 5, and 134.246; 447.32, subdivisions 5, 7, and 9; 447.345; 447.37; and 447.38. 134.25 (b) The hospital district may levy taxes as provided in this section to provide funding 134.26to make grants to the White Community Hospital and any affiliated health care facility or 134.27provider for any purpose authorized for hospital districts in Minnesota Statutes, sections 134.28447.31 to 447.38, except 447.331. A grant must not be made under this section until the 134.29governing body of the White Community Hospital, and any of its affiliated health care 134.30facilities or providers receiving a grant, have entered into a written agreement with the 134.31hospital district board stating that the governing body will comply with and is subject to 134.32all provisions of the Minnesota open meeting law in Minnesota Statutes, chapter 13D. 134.33 Subd. 3. Annexation; detachment. Once the hospital district is established, any 134.34other city, town, or unorganized area in St. Louis County may join the hospital district 135.1in the same manner provided in subdivision 1 for establishment of the hospital district. 135.2A city, town, or unorganized area that is a member of the hospital district may detach 135.3from the district in the same manner as it may join. An annexation to or detachment 135.4from the hospital district is effective for taxes payable in the following calendar year if 135.5the resolution is adopted, or in the case of an unorganized area the petition submitted 135.6to the county auditor, before July 1 of the levy year. A resolution adopted or petition 135.7submitted after July 1 of any year is effective for the taxes payable the year following 135.8the next levy year. 135.9 Subd. 4. Unorganized areas. An unorganized area in St. Louis County shall 135.10become a member of the hospital district if at least 51 percent of the residents of the 135.11unorganized area signed a petition submitted to the hospital district board and the county 135.12auditor requesting to participate in the hospital district. 135.13 Subd. 5. Hospital district board. The hospital district shall be governed by a 135.14hospital board composed of one member of each participating city and town's governing 135.15body, appointed by the governing body. If the hospital district only has two members, 135.16each member city or town shall appoint two board members. The hospital district board 135.17must appoint from among its members a chair, clerk, treasurer, and any other officers the 135.18board deems necessary or useful. The St. Louis County Board of Commissioners shall 135.19appoint a resident of any unorganized area that is participating in the hospital district. All 135.20board members serve at the pleasure of the respective appointing authorities. 135.21 Subd. 6. No compensation; expenses. Board members shall serve without 135.22compensation but shall be eligible for per diem and expenses provided by, and at the 135.23discretion of, their respective appointing authorities. 135.24 Subd. 7. Operating tax levy. The hospital district board may levy a tax as 135.25provided in Minnesota Statutes, section 447.34, except as provided in this subdivision. 135.26If the hospital district board levies it must be a uniform tax rate levied against the net 135.27tax capacity of all taxable properties located within each participating city, town, or 135.28unorganized area. The maximum amount that may be levied in the hospital district must 135.29not exceed 0.066088 percent of the fully taxable market value of all taxable properties 135.30located within each participating city, town, or unorganized area. 135.31 Any tax levied by the hospital district is in addition to all other taxes levied on the 135.32property, including taxes levied for any other hospital purpose by a participating city 135.33or town. The levy must be disregarded in the calculation of all other rate or per capita 135.34levy limitations imposed by law. 136.1EFFECTIVE DATE; NO LOCAL APPROVAL.This section is effective the 136.2day following final enactment without local approval under Minnesota Statutes, section 136.3645.023, subdivision 1, paragraph (a), for taxes levied in 2008, payable in 2009, and 136.4thereafter. 136.5 Sec. 47. VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION; 136.6STORM SEWER UTILITY FEES. 136.7 Notwithstanding any other law to the contrary and pursuant to joint powers 136.8agreements authorized under Minnesota Statutes, sections 103B.211 and 471.59, the 136.9Vadnais Lake Area Water Management Organization may certify to the county auditor any 136.10fees or charges imposed by the organization under Minnesota Statutes, section 103B.211 136.11or 444.075, and the parcels on which the charges are imposed. The county auditor shall 136.12extend the charges on the property tax statements. The amounts must be certified by 136.13November 30 to appear on statements for taxes payable in the following year. The charges, 136.14if not paid, become delinquent and are subject to the same penalties, the same rate of 136.15interest, and become a lien upon the property in the same manner, as real property taxes. 136.16The charges shall be paid to the Vadnais Lake Area Water Management Organization by 136.17the county auditor in the same manner and at the same time as property taxes. The county 136.18auditor may charge the Vadnais Lake Area Water Management Organization a fee in the 136.19amount necessary to recover the costs of administering the charges. 136.20EFFECTIVE DATE.This section is effective the day following final enactment. 136.21 Sec. 48. CITY OF BROOKLYN CENTER; PARTICIPATION IN CRIME-FREE 136.22MULTIHOUSING PROGRAM. 136.23 (a) In addition to the requirements of Minnesota Statutes, section 273.128, if 136.24property located in the city of Brooklyn Center qualifies under paragraph (b), the owners 136.25or managers must complete the three phases of the city's crime-free multihousing program 136.26and the qualifying property must be annually certified by the police as participating 136.27in the program. If a qualifying property is not certified within one year after it is first 136.28determined to be a qualifying property under paragraph (b), or does not annually maintain 136.29its certification in the program, the city shall notify the property owner that the qualifying 136.30property must comply with the requirements of this section to maintain its classification 136.31as class 4d property. If a qualifying property is not in compliance within one year after 136.32receiving the notice from the city, the city shall issue a second notice and require the 136.33owners to enter into a plan to achieve compliance within one year. If, upon expiration 136.34of the one-year time period, the qualifying property has not been certified by the police 137.1as completing the program, the city shall notify the commissioner of the Housing 137.2Finance Agency and the commissioner shall remove the property from the list of class 4d 137.3properties certified to the assessor under Minnesota Statutes, section 273.128, subdivision 137.43. Once removed from the list, the property is not eligible for class 4d classification until 137.5it complies with this section and its compliance has been certified to the Housing Finance 137.6Agency by the city. Certification to the Housing Finance Agency must be made by May 137.715 to be effective for taxes payable in the following year. 137.8 (b) A property is a qualifying property for purposes of this section's requirements if 137.9it satisfies each of the following requirements: 137.10 (1) the city offers a crime-free multihousing program through its city police; 137.11 (2) over the preceding three-year period, the number of police calls to the property 137.12exceeded the city's average number of calls for multiunit rental properties for the period 137.13by at least 25 percent, adjusted for the number of rental units; 137.14 (3) the police department has requested, in writing, the owners or managers of the 137.15property to enroll in the crime-free multihousing program and the owners or managers 137.16refused or failed to enroll within 60 days after the request, or failed to complete phases 137.17one and three within 90 days and all three phases of the program within a one-year time 137.18period; and 137.19 (4) the governing body of the city, by resolution, determines the property is a 137.20qualifying property under clauses (1) to (3). 137.21 (c) Calls for police or emergency assistance in response to domestic abuse or 137.22medical assistance shall not be counted toward the number of calls in paragraph (b), clause 137.23(2). For purposes of this section, "domestic abuse" has the meaning given in Minnesota 137.24Statutes, section 518B.01, subdivision 2. 137.25 (d) Low-income qualifying rental housing property classified as class 4d property 137.26for taxes payable in 2008 must meet the requirements of this section by May 15, 2011, in 137.27order to retain the classification for taxes payable in 2012. 137.28 (e) Provided that the city utilizes the crime-free multihousing program under this 137.29section, on or before January 1, 2017, the city shall make a report to the chairs of the house 137.30of representatives and senate tax committees describing the effectiveness of the program. 137.31EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after 137.32compliance by the governing body of the city of Brooklyn Center and its chief clerical 137.33officer with Minnesota Statutes, section 645.021, subdivisions 2 and 3. This section 137.34expires after taxes payable in 2017. 137.35 Sec. 49. ASSESSMENT OF PROPERTIES OF PURELY PUBLIC CHARITIES. 138.1 Subdivision 1. Application. (a) To facilitate a review by the 2009 legislature of 138.2the property tax exemption for property of nonprofit organizations as purely public 138.3charities and the development of standards and criteria for the tax status of these facilities, 138.4this section: 138.5 (1) requires the commissioner of revenue to conduct an analysis of standards applied 138.6to determine the tax status of these organizations; and 138.7 (2) prohibits changes in assessment practices and policies regarding the property of 138.8these organizations. 138.9 (b) The purpose of this study is to allow the legislature to evaluate whether the 138.10judicially established rules and the assessment practices and policies in applying those 138.11rules to determine the tax status of these properties ensure that public benefits are, at 138.12least, commensurate with the costs of the exemption. The legislature does not intend, in 138.13requiring this study, to indicate an intention to expand or to narrow the existing rules for 138.14exempting institutions of purely public charity. 138.15 Subd. 2. Report by commissioner of revenue. (a) The commissioner of revenue 138.16shall survey all county assessors on: 138.17 (1) the tax status of property of institutions of purely public charity located in the 138.18state, including detail on the type of organization and the use of the property; and 138.19 (2) their practices and policies in determining the tax status of property of institutions 138.20of purely public charity, including the extent to which the assessment practices and 138.21policies require the institutions to provide goods or services at free or below market prices 138.22and on the treatment of government payments. 138.23 (b) The commissioner shall report the findings to the chairs of the house and senate 138.24committees with jurisdiction over taxation by February 1, 2009. 138.25 Subd. 3. Moratorium on changes in assessment practices. (a) An assessor 138.26may not change the current practices or policies used generally in assessing property 138.27of institutions of purely public charities. 138.28 (b) An assessor may not change the assessment of the taxable status of an existing 138.29property of an organization of purely public charity, unless the change is made as a result of 138.30a change in ownership, occupancy or use of the facility, or to correct an error. For currently 138.31taxable properties, the assessor may change the estimated market value of the property. 138.32 (c) This subdivision expires on the earlier of: 138.33 (1) the enactment of legislation establishing criteria for the property taxation of 138.34purely public charities; or 138.35 (2) adjournment of the 2009 regular legislative session to a date in calendar year 138.362010. 139.1EFFECTIVE DATE.This section is effective for the 2008 assessment, taxes 139.2payable in 2009. 139.3 Sec. 50. FEDERAL AUDIT; SCHOOL DISTRICT LEVY. 139.4 Subdivision 1. Calculation. The commissioner of education must calculate the total 139.5amount of revenue that each school district and intermediate school district needs to 139.6replace federal funds that have been disallowed resulting from the settlement of an audit 139.7by the federal Office of Inspector General of Local Collaborative Time Study school-based 139.8services claimed in Minnesota. 139.9 Subd. 2. Levy. A school district may levy a property tax for taxes payable in 2009, 139.102010, and 2011 only, not to exceed one-third of the amount calculated in subdivision 1 in 139.11each year. A school district that is a member of an intermediate school district may include 139.12in its levy authority under this subdivision the proportionate share of the intermediate 139.13school district's loss calculated under subdivision. One-half of the levy for taxes payable 139.14in 2009 shall be recognized in fiscal year 2009. 139.15EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 139.16thereafter. 139.17 Sec. 51. COMFORT LAKE-FOREST LAKE WATERSHED DISTRICT. 139.18 Notwithstanding any law to the contrary, the Comfort Lake-Forest Lake Watershed 139.19District established under Minnesota Statutes, chapter 103D, shall be considered a 139.20watershed management organization as defined in Minnesota Statutes, section 103B.205, 139.21subdivision 13. The Comfort Lake-Forest Lake Watershed District shall manage or plan 139.22for the management of surface water within the watershed district boundary in Chisago 139.23and Washington Counties as it existed on April 1, 2008, through the authorities contained 139.24in Minnesota Statutes, sections 103B.205 to 103B.255 and chapter 103D. 139.25EFFECTIVE DATE.This section is effective the day following final enactment. 139.26 Sec. 52. REPEALER. 139.27(a) Minnesota Statutes 2006, section 272.027, subdivision 3, is repealed. 139.28(b) Minnesota Statutes 2006, section 273.11, subdivision 14, is repealed. 139.29(c) Minnesota Statutes 2006, section 273.111, subdivision 6, is repealed. 139.30EFFECTIVE DATE.Paragraphs (a) and (b) are effective for taxes payable in 2009 139.31and thereafter. Paragraph (c) is effective for taxes payable in 2010 and thereafter. 140.1ARTICLE 7 140.2SALES AND USE TAXES 140.3 Section 1. Minnesota Statutes 2006, section 297A.67, subdivision 28, is amended to 140.4read: 140.5 Subd. 28. Ambulance supplies, parts, and equipment. The following sales to or 140.6use by an ambulance service licensed under section 144E.10 are exempt: 140.7 (1) supplies and equipment used to provide medical care; and 140.8 (2) repair and replacement parts for ambulances and vehicles equipped and 140.9specifically intended for emergency response. 140.10EFFECTIVE DATE.This section is effective for sales and purchases made after 140.11June 30, 2008. 140.12 Sec. 2. Minnesota Statutes 2007 Supplement, section 297A.70, subdivision 3, is 140.13amended to read: 140.14 Subd. 3. Sales of certain goods and services to government. (a) The following 140.15sales to or use by the specified governments and political subdivisions of the state are 140.16exempt: 140.17 (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and 140.18fire apparatus to a political subdivision; 140.19 (2) machinery and equipment, except for motor vehicles, used directly for mixed 140.20municipal solid waste management services at a solid waste disposal facility as defined in 140.21section 115A.03, subdivision 10; 140.22 (3) chore and homemaking services to a political subdivision of the state to be 140.23provided to elderly or disabled individuals; 140.24 (4) telephone services to the Office of Enterprise Technology that are used to provide 140.25telecommunications services through the enterprise technology revolving fund; 140.26 (5) firefighter personal protective equipment as defined in paragraph (b), if purchased 140.27or authorized by and for the use of an organized fire department, fire protection district, or 140.28fire company regularly charged with the responsibility of providing fire protection to the 140.29state or a political subdivision; 140.30 (6) bullet-resistant body armor that provides the wearer with ballistic and trauma 140.31protection, if purchased by a law enforcement agency of the state or a political subdivision 140.32of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1; 140.33 (7) motor vehicles purchased or leased by political subdivisions of the state if the 140.34vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b), 141.1exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax 141.2under section 297B.03, clause (12); 141.3 (8) equipment designed to process, dewater, and recycle biosolids for wastewater 141.4treatment facilities of political subdivisions, and materials incidental to installation of 141.5that equipment; 141.6 (9) sales to a town of gravel and of machinery, equipment, and accessories, except 141.7motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of 141.8motor vehicles exempt from tax under section 297B.03, clause (10); and 141.9 (10) the removal of trees, bushes, or shrubs for the construction and maintenance 141.10of roads, trails, or firebreaks when purchased by an agency of the state or a political 141.11subdivision of the state; and 141.12 (11) purchases by the Metropolitan Council or the Department of Transportation of 141.13vehicles and repair parts to equip operations provided for in section 174.90, including, but 141.14not limited to, the Northstar Corridor Rail project. 141.15 (b) For purposes of this subdivision, "firefighters personal protective equipment" 141.16means helmets, including face shields, chin straps, and neck liners; bunker coats and 141.17pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; 141.18protective coveralls; goggles; self-contained breathing apparatus; canister filter masks; 141.19personal alert safety systems; spanner belts; optical or thermal imaging search devices; 141.20and all safety equipment required by the Occupational Safety and Health Administration. 141.21 (c) For purchases of items listed in paragraph (a), clause (11), the tax must be 141.22imposed and collected as if the rate under section 297A.62, subdivision 1, applied and 141.23then refunded in the manner provided in section 297A.75. 141.24EFFECTIVE DATE.This section is effective retroactively for sales and purchases 141.25made after December 31, 2006. 141.26 Sec. 3. Minnesota Statutes 2006, section 297A.70, subdivision 8, is amended to read: 141.27 Subd. 8. Regionwide public safety radio communication system; products and 141.28services. Products and services including, but not limited to, end user equipment used 141.29for construction, ownership, operation, maintenance, and enhancement of the backbone 141.30system of the regionwide public safety radio communication system established under 141.31sections 403.21 to , are exempt. For purposes of this subdivision, backbone 141.32system is defined in section 403.21, subdivision 9. This subdivision is effective for 141.33purchases, sales, storage, use, or consumption for use in the first and second phases of the 141.34system, as defined in section 403.21, subdivisions 3, 10, and 11, and that portion of the 141.35third phase of the system that is located in the southeast district of the State Patrol and 142.1the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system 142.2that is located in Itasca County. 142.3EFFECTIVE DATE.This section is effective for sales and purchases made after 142.4June 30, 2008. 142.5 Sec. 4. Minnesota Statutes 2006, section 297A.71, subdivision 23, is amended to read: 142.6 Subd. 23. Construction materials for qualified low-income housing projects. (a) 142.7Purchases of materials and supplies used or consumed in and equipment incorporated into 142.8the construction, improvement, or expansion of qualified low-income housing projects are 142.9exempt from the tax imposed under this chapter if the owner of the qualified low-income 142.10housing project is: 142.11 (1) the public housing agency or housing and redevelopment authority of a political 142.12subdivision; 142.13 (2) an entity exercising the powers of a housing and redevelopment authority within 142.14a political subdivision; 142.15 (3) a limited partnership in which the sole or managing general partner is an 142.16authority under clause (1) or an entity under clause (2) or (4); 142.17 (4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying 142.18under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or 142.19 (5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604, 142.20for a qualified low-income housing project described in paragraph (b), clause (5). 142.21 This exemption applies regardless of whether the purchases are made by the owner 142.22of the facility or a contractor. 142.23 (b) For purposes of this exemption, "qualified low-income housing project" means: 142.24 (1) a housing or mixed use project in which at least 20 percent of the residential units 142.25are qualifying low-income rental housing units as defined in section 273.126; 142.26 (2) a federally assisted low-income housing project financed by a mortgage insured 142.27or held by the United States Department of Housing and Urban Development under 142.28United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United 142.29States Code, title 42, section 1437f; the Native American Housing Assistance and 142.30Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar 142.31successor federal low-income housing program; 142.32 (3) a qualified low-income housing project as defined in United States Code, title 142.3326, section 42(g), meeting all of the requirements for a low-income housing credit under 142.34section 42 of the Internal Revenue Code regardless of whether the project actually applies 142.35for or receives a low-income housing credit; 143.1 (4) a project that will be operated in compliance with Internal Revenue Service 143.2revenue procedure 96-32; or 143.3 (5) a housing or mixed use project in which all or a portion of the residential units 143.4are subject to the requirements of section 5 of the United States Housing Act of 1937. 143.5 (c) For a project, a portion of which is not used for low-income housing units, 143.6the amount of purchases that are exempt under this subdivision must be determined by 143.7multiplying the total purchases, as specified in paragraph (a), by the ratio of: 143.8 (1) the total gross square footage of units subject to the income limits under section 143.9273.126 , the financing for the project, the federal low-income housing tax credit, revenue 143.10procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable 143.11to the project; and 143.12 (2) the total gross square footage of all units in the project. 143.13 (d) The tax must be imposed and collected as if the rate under section 297A.62, 143.14subdivision 1 , applied, and then refunded in the manner provided in section 297A.75. 143.15EFFECTIVE DATE.This section is effective for sales and purchases made after 143.16June 30, 2009. 143.17 Sec. 5. Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision 143.18to read: 143.19 Subd. 40. Construction materials; Central Corridor light rail transit. Materials 143.20and supplies used or consumed in, and equipment incorporated into, the construction 143.21or improvement of the Central Corridor light rail transit line and associated facilities 143.22including, but not limited to, stations, park-and-ride facilities, and maintenance facilities, 143.23are exempt. The tax must be imposed and collected as if the rate under section 297A.62, 143.24subdivision 1, applied and then refunded in the manner provided in section 297A.75. 143.25Refunds must not be applied for or issued until after July 1, 2009. 143.26EFFECTIVE DATE.This section is effective for sales and purchases made after 143.27June 30, 2008. 143.28 Sec. 6. Minnesota Statutes 2006, section 297A.75, is amended to read: 143.29297A.75 REFUND; APPROPRIATION. 143.30 Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the 143.31following exempt items must be imposed and collected as if the sale were taxable and the 143.32rate under section 297A.62, subdivision 1, applied. The exempt items include: 143.33 (1) capital equipment exempt under section 297A.68, subdivision 5; 144.1 (2) building materials for an agricultural processing facility exempt under section 144.2297A.71, subdivision 13 ; 144.3 (3) building materials for mineral production facilities exempt under section 144.4297A.71, subdivision 14 ; 144.5 (4) building materials for correctional facilities under section 297A.71, subdivision 144.63 ; 144.7 (5) building materials used in a residence for disabled veterans exempt under section 144.8297A.71, subdivision 11 ; 144.9 (6) elevators and building materials exempt under section 297A.71, subdivision 12; 144.10 (7) building materials for the Long Lake Conservation Center exempt under section 144.11297A.71, subdivision 17 ; 144.12 (8) materials, supplies, fixtures, furnishings, and equipment for a county law 144.13enforcement and family service center under section 297A.71, subdivision 26; 144.14 (9) materials and supplies for qualified low-income housing under section 297A.71, 144.15subdivision 23 ; 144.16 (10) materials, supplies, and equipment for municipal electric utility facilities under 144.17section 297A.71, subdivision 35; 144.18 (11) equipment and materials used for the generation, transmission, and distribution 144.19of electrical energy and an aerial camera package exempt under section 297A.68, 144.20subdivision 37; and 144.21 (12) tangible personal property and taxable services and construction materials, 144.22supplies, and equipment exempt under section 297A.68, subdivision 41; 144.23 (13) commuter rail vehicle and repair parts under section 297A.70, subdivision 144.243, clause (11); and 144.25 (14) materials, supplies, and equipment for construction or improvement of projects 144.26and facilities under section 297A.71, subdivision 40. 144.27 Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the 144.28commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 144.29must be paid to the applicant. Only the following persons may apply for the refund: 144.30 (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser; 144.31 (2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental 144.32subdivision; 144.33 (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits 144.34provided in United States Code, title 38, chapter 21; 144.35 (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead 144.36property; 145.1 (5) for subdivision 1, clause (9), the owner of the qualified low-income housing 145.2project; 145.3 (6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or 145.4a joint venture of municipal electric utilities; and 145.5 (7) for subdivision 1, clauses (11) and (12), the owner of the qualifying business; and 145.6 (8) for subdivision 1, clauses (13) and (14), the applicant must be the governmental 145.7entity that owns or contracts for the project or facility. 145.8 Subd. 3. Application. (a) The application must include sufficient information 145.9to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 145.10subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), 145.11(11), or (12), (13), or (14), the contractor, subcontractor, or builder must furnish to the 145.12refund applicant a statement including the cost of the exempt items and the taxes paid on 145.13the items unless otherwise specifically provided by this subdivision. The provisions of 145.14sections 289A.40 and 289A.50 apply to refunds under this section. 145.15 (b) An applicant may not file more than two applications per calendar year for 145.16refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5. 145.17 (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 145.18exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 145.19of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 145.20subdivision 40, must not be filed until after June 30, 2009. 145.21 Subd. 4. Interest. Interest must be paid on the refund at the rate in section 270C.405 145.22from 90 days after the refund claim is filed with the commissioner for taxes paid under 145.23subdivision 1. 145.24 Subd. 5. Appropriation. The amount required to make the refunds is annually 145.25appropriated to the commissioner. 145.26EFFECTIVE DATE.This section is effective the day following final enactment. 145.27 Sec. 7. Minnesota Statutes 2006, section 297A.99, subdivision 1, as amended by Laws 145.282008, chapter 152, article 4, section 1, is amended to read: 145.29 Subdivision 1. Authorization; scope. (a) A political subdivision of this state may 145.30impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, 145.31(3) if permitted by special law enacted prior to May 20, 2008, or (4) if the political 145.32subdivision enacted and imposed the tax before the effective date of section 477A.016 and 145.33its predecessor provision. 146.1 (b) This section governs the imposition of a general sales tax by the political 146.2subdivision. The provisions of this section preempt the provisions of any special law: 146.3 (1) enacted before June 2, 1997, or 146.4 (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 146.5provision from this section's rules by reference. 146.6 (c) This section does not apply to or preempt a sales tax on motor vehicles or a 146.7special excise tax on motor vehicles. 146.8 (d) Until after May 31, 2010, a political subdivision may not advertise, promote, 146.9expend funds, or hold a referendum to support imposing a local option sales tax unless 146.10it is for extension of an existing tax or the tax was authorized by a special law enacted 146.11prior to May 20, 2008. 146.12EFFECTIVE DATE.This section is effective the day following final enactment. 146.13 Sec. 8. Minnesota Statutes 2006, section 297B.03, is amended to read: 146.14297B.03 EXEMPTIONS. 146.15 There is specifically exempted from the provisions of this chapter and from 146.16computation of the amount of tax imposed by it the following: 146.17 (1) purchase or use, including use under a lease purchase agreement or installment 146.18sales contract made pursuant to section 465.71, of any motor vehicle by the United States 146.19and its agencies and instrumentalities and by any person described in and subject to the 146.20conditions provided in section 297A.67, subdivision 11; 146.21 (2) purchase or use of any motor vehicle by any person who was a resident of 146.22another state or country at the time of the purchase and who subsequently becomes a 146.23resident of Minnesota, provided the purchase occurred more than 60 days prior to the date 146.24such person began residing in the state of Minnesota and the motor vehicle was registered 146.25in the person's name in the other state or country; 146.26 (3) purchase or use of any motor vehicle by any person making a valid election to be 146.27taxed under the provisions of section 297A.90; 146.28 (4) purchase or use of any motor vehicle previously registered in the state of 146.29Minnesota when such transfer constitutes a transfer within the meaning of section 118, 146.30331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal 146.31Revenue Code of 1986, as amended through December 31, 1999; 146.32 (5) purchase or use of any vehicle owned by a resident of another state and leased 146.33to a Minnesota-based private or for-hire carrier for regular use in the transportation of 146.34persons or property in interstate commerce provided the vehicle is titled in the state of 147.1the owner or secured party, and that state does not impose a sales tax or sales tax on 147.2motor vehicles used in interstate commerce; 147.3 (6) purchase or use of a motor vehicle by a private nonprofit or public educational 147.4institution for use as an instructional aid in automotive training programs operated by the 147.5institution. "Automotive training programs" includes motor vehicle body and mechanical 147.6repair courses but does not include driver education programs; 147.7 (7) purchase of a motor vehicle for use as an ambulance by an ambulance service 147.8licensed under section 144E.10; 147.9 (8) purchase of a motor vehicle by or for a public library, as defined in section 147.10134.001, subdivision 2 , as a bookmobile or library delivery vehicle; 147.11 (9) purchase of a ready-mixed concrete truck; 147.12 (10) purchase or use of a motor vehicle by a town for use exclusively for road 147.13maintenance, including snowplows and dump trucks, but not including automobiles, 147.14vans, or pickup trucks; 147.15 (11) purchase or use of a motor vehicle by a corporation, society, association, 147.16foundation, or institution organized and operated exclusively for charitable, religious, 147.17or educational purposes, except a public school, university, or library, but only if the 147.18vehicle is: 147.19 (i) a truck, as defined in section 168.011, a bus, as defined in section 168.011, or a 147.20passenger automobile, as defined in section 168.011, if the automobile is designed and 147.21used for carrying more than nine persons including the driver; and 147.22 (ii) intended to be used primarily to transport tangible personal property or 147.23individuals, other than employees, to whom the organization provides service in 147.24performing its charitable, religious, or educational purpose; 147.25 (12) purchase of a motor vehicle for use by a transit provider exclusively to provide 147.26transit service is exempt if the transit provider is either (i) receiving financial assistance or 147.27reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 147.28473.388 , or 473.405; 147.29 (13) purchase or use of a motor vehicle by a qualified business, as defined in section 147.30469.310 , located in a job opportunity building zone, if the motor vehicle is principally 147.31garaged in the job opportunity building zone and is primarily used as part of or in direct 147.32support of the person's operations carried on in the job opportunity building zone. The 147.33exemption under this clause applies to sales, if the purchase was made and delivery 147.34received during the duration of the job opportunity building zone. The exemption under 147.35this clause also applies to any local sales and use tax.; and 148.1 (14) purchase of a leased vehicle by the lessee who was a participant in a 148.2lease-to-own program from a charitable organization that is: 148.3 (i) described in section 501(c)(3) of the Internal Revenue Code; and 148.4 (ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4. 148.5EFFECTIVE DATE.This section is effective for sales and purchases made after 148.6June 30, 2008. 148.7 Sec. 9. Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by 148.8Laws 1998, chapter 389, article 8, section 28, is amended to read: 148.9 Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions 148.101 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or a 148.11portion of the expenses of constructing and operating improving facilities as part of an 148.12urban revitalization project in downtown Mankato known as Riverfront 2000. Authorized 148.13expenses include, but are not limited to, acquiring property and paying relocation expenses 148.14related to the development of Riverfront 2000 and related facilities, and securing or paying 148.15debt service on bonds or other obligations issued to finance the construction of Riverfront 148.162000 and related facilities. For purposes of this section, "Riverfront 2000 and related 148.17facilities" means a civic-convention center, an arena, a riverfront park, a technology center 148.18and related educational facilities, and all publicly owned real or personal property that 148.19the governing body of the city determines will be necessary to facilitate the use of these 148.20facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and 148.21landscaping. It also includes the performing arts theatre and the Southern Minnesota 148.22Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by 148.23Minnesota State University, Mankato. 148.24EFFECTIVE DATE.This section is effective the day after the governing body of 148.25the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section 148.26645.021, subdivisions 2 and 3, and after compliance with section 15. 148.27 Sec. 10. Laws 1991, chapter 291, article 8, section 27, subdivision 4, as amended by 148.28Laws 2005, First Special Session chapter 3, article 5, section 25, is amended to read: 148.29 Subd. 4. Expiration of taxing authority and expenditure limitation. The 148.30authority granted by subdivisions 1 and 2 to the city to impose a sales tax and an excise 148.31tax shall expire on December 31, 2015, unless sufficient revenues are not available to 148.32defease any bonds or obligations issued to finance construction of Riverfront 2000 and 148.33related facilities. If sufficient funds are not available to defease the bonds, the tax expires 148.34December 31, 2018, but all revenues from taxes imposed after December 31, 2015, must 149.1be used to defease the bonds. The city may, by ordinance, terminate the tax at an earlier 149.2date 2022. 149.3EFFECTIVE DATE.This section is effective the day after the governing body of 149.4the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section 149.5645.021, subdivisions 2 and 3, and after compliance with section 16. 149.6 Sec. 11. Laws 1998, chapter 389, article 8, section 45, subdivision 3, is amended to 149.7read: 149.8 Subd. 3. Use of revenues. Revenues received from the taxes authorized under 149.9subdivision 1 must be used for sanitary sewer separation, wastewater treatment, water 149.10system improvements, and harbor refuge development projects. 149.11EFFECTIVE DATE.This section is effective the day following final enactment, 149.12upon compliance by the city of Two Harbors with Minnesota Statutes, section 645.021, 149.13subdivision 3. 149.14 Sec. 12. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to 149.15read: 149.16 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section 149.17297A.48, subdivision 1a , 477A.016, or any other provision of law, ordinance, or city 149.18charter, if approved by the city voters at the first municipal general election held after the 149.19date of final enactment of this act or at a special election held November 2, 1999, the city 149.20of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent 149.21for the purposes specified in subdivision 3. The provisions of Minnesota Statutes, section 149.22297A.48 297A.99 , govern the imposition, administration, collection, and enforcement of 149.23the tax authorized under this subdivision. 149.24 Sec. 13. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to 149.25read: 149.26 Subd. 3. Use of revenues. (a) Revenues received from taxes authorized by 149.27subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to 149.28pay for construction and improvement of the following city facilities: 149.29 (1) streets; and 149.30 (2) constructing and equipping the Proctor community activity center. 149.31 Authorized expenses include, but are not limited to, acquiring property, paying 149.32construction and operating expenses related to the development of an authorized facility, 149.33and paying debt service on bonds or other obligations, including lease obligations, issued 150.1to finance the construction, expansion, or improvement of an authorized facility. The 150.2capital expenses for all projects authorized under this paragraph that may be paid with 150.3these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance 150.4of the bonds. 150.5 (b) Additional revenues received from taxes authorized by subdivision 1, may be 150.6used by the city to pay for the following capital improvement projects: public utilities, 150.7including water, sanitary sewer, storm sewer, and electric; sidewalks; bikeways and trails; 150.8and parks and recreation. 150.9EFFECTIVE DATE.This section is effective the day following final enactment, 150.10upon compliance by the city of Proctor with Minnesota Statutes, section 645.021, 150.11subdivision 3. 150.12 Sec. 14. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to 150.13read: 150.14 Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota 150.15Statutes, chapter 475, to finance the capital expenditure and improvement projects 150.16described in subdivision 3. An election to approve the bonds under Minnesota Statutes, 150.17section 475.58, is not required. 150.18 (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, 150.19sections 275.60 and . 150.20 (c) The bonds are not included in computing any debt limitation applicable to the 150.21city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 150.22and interest on the bonds is not subject to any levy limitation. 150.23 (d) For projects described in subdivision 3, paragraph (a), the aggregate principal 150.24amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital 150.25expenditures and improvements, may not exceed $3,600,000, plus an amount equal to 150.26the costs related to issuance of the bonds, including interest on the bonds. For projects 150.27described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may 150.28not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds, 150.29including interest on the bonds. 150.30 (e) The sales and use and excise taxes authorized in this section may be pledged to 150.31and used for the payment of the bonds and any bonds issued to refund them only if the 150.32bonds and any refunding bonds are general obligations of the city. 150.33EFFECTIVE DATE.This section is effective the day following final enactment, 150.34upon compliance by the city of Proctor with Minnesota Statutes, section 645.021, 150.35subdivision 3. 151.1 Sec. 15. CITY OF MANKATO; REVERSE REFERENDUM REQUIRED. 151.2 If the Mankato city council intends to extend the local sales tax and modify the use 151.3of revenues from the tax, authorized under sections 9 and 10, it shall pass a resolution 151.4stating the intent. The resolution must be published for two successive weeks in the 151.5official newspaper of the city or, if there is no official newspaper, in a newspaper of general 151.6circulation in the city, together with a notice fixing a date for a public hearing on the 151.7matter. The hearing must be held at least two weeks but not more than four weeks after the 151.8first publication of the resolution. Following the public hearing, the city may determine 151.9to take no further action or adopt a resolution confirming its intention to exercise the 151.10authority. That resolution must also be published in the official newspaper of the city or, if 151.11there is no official newspaper, in a newspaper of general circulation in the city. If within 151.1230 days after publication of the resolution a petition signed by voters equal in number to 151.13ten percent of the votes cast in the city in the last general election requesting a vote on the 151.14proposed resolution is filed with the county auditor, the resolution is not effective until it 151.15has been submitted to the voters at a general or special election and a majority of votes 151.16cast on the question of approving the resolution are in the affirmative. The commissioner 151.17of revenue shall prepare a suggested form of question to be presented at the election. This 151.18section applies notwithstanding any city charter provision to the contrary. 151.19EFFECTIVE DATE.This section is effective the day following final enactment. 151.20 Sec. 16. CITY OF MANKATO, LOCAL TAXES AUTHORIZED. 151.21 Subdivision 1. Food and beverage tax authorized. Notwithstanding Minnesota 151.22Statutes, section , or any ordinance, city charter, or other provision of law, the 151.23city of Mankato may, by ordinance, impose a sales tax of up to one percent on the gross 151.24receipts on all sales of food and beverages by a restaurant or place of refreshment, as 151.25defined by resolution of the city, that are located within the city. For purposes of this 151.26section, "food and beverages" include retail on-sale of intoxicating liquor and fermented 151.27malt beverages. 151.28 Subd. 2. Entertainment tax. Notwithstanding Minnesota Statutes, section 151.29, or any ordinance, city charter, or other provision of law, the city of Mankato 151.30may, by ordinance, impose a tax of up to one percent on the gross receipts on admissions to 151.31an entertainment event located within the city. For purposes of this section "entertainment 151.32event" means any event for which persons pay money in order to be admitted to the 151.33premises and to be entertained including, but not limited to, theaters, concerts, and 151.34sporting events. 152.1 Subd. 3. Use of proceeds from authorized taxes. The proceeds of any tax imposed 152.2under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses 152.3of operation and maintenance of the Riverfront 2000 and related facilities, including a 152.4performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center, 152.5attached to the Mankato Civic Center for use by Minnesota State University, Mankato. 152.6Authorized expenses include securing or paying debt service on bonds or other obligations 152.7issued to finance the construction of the facilities. 152.8 Subd. 4. Collection, administration, and enforcement. If the city desires, it may 152.9enter into an agreement with the commissioner of revenue to administer, collect, and 152.10enforce the taxes authorized under subdivisions 1 and 2. If the commissioner agrees 152.11to collect the tax, the provisions of Minnesota Statutes, section 297A.99, related to 152.12collection, administration, and enforcement apply. 152.13EFFECTIVE DATE.This section is effective the day after the governing body of 152.14the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section 152.15645.021, subdivisions 2 and 3. 152.16 Sec. 17. COOK COUNTY; LODGING AND ADMISSIONS TAXES. 152.17 Subdivision 1. Lodging tax. Notwithstanding Minnesota Statutes, section 152.18477A.016, or any other provision of law, ordinance, or city charter, the Board of 152.19Commissioners of Cook County may impose, by ordinance, a tax of up to one percent on 152.20the gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190. 152.21This tax is in addition to any tax imposed under Minnesota Statutes, section 469.190, and 152.22the total tax imposed under that section and this provision must not exceed four percent. 152.23 Subd. 2. Admissions and recreation tax. Notwithstanding Minnesota Statutes, 152.24section 477A.016, or any other provision of law, ordinance, or city charter, the Board of 152.25Commissioners of Cook County may impose, by ordinance, a tax of up to three percent on 152.26admissions to entertainment and recreational facilities and rental of recreation equipment. 152.27 Subd. 3. Use of taxes. The taxes imposed in subdivisions 1 and 2 must be used 152.28to fund a new Cook County Event and Visitors Bureau as established by the Board of 152.29Commissioners of Cook County. The Board of Commissioners of Cook County must 152.30annually review the budget of the Cook County Event and Visitors Bureau. The event and 152.31visitors bureau may not receive revenues raised from the taxes imposed in subdivisions 1 152.32and 2 until the board of commissioners approves the annual budget. 152.33 Subd. 4. Termination. The taxes imposed in subdivisions 1 and 2 terminate 15 152.34years after they are first imposed. 153.1EFFECTIVE DATE.This section is effective for sales and purchases after June 153.230, 2008. 153.3 Sec. 18. COOK COUNTY; TAXES AUTHORIZED. 153.4 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section 153.5477A.016, or any other provision of law, ordinance, or city charter, if approved by the 153.6voters at a general or special election held before December 31, 2009, Cook County 153.7may impose by ordinance a sales and use tax of up to one percent for the purposes 153.8specified in subdivision 2. Except as otherwise provided in this section, the provisions 153.9of Minnesota Statutes, section 297A.99, govern the imposition of the tax authorized 153.10under this subdivision. 153.11 Subd. 2. Use of revenues. Revenues received from the tax authorized by 153.12subdivision 1 must be used by Cook County to pay the costs of collecting the tax and 153.13to pay for the following projects: 153.14 (1) construction and improvements to a county community center and recreation 153.15area, including, but not limited to, improvements and additions to the skateboard park, 153.16hockey rink, ball fields, community center addition, county parking area, tennis courts, 153.17and all associated improvements; and 153.18 (2) construction and improvements to the Grand Marais Public Library. 153.19Authorized expenses include, but are not limited to, paying construction expenses related 153.20to these improvements, and paying debt service on bonds or other obligations issued to 153.21finance acquisition and construction of these improvements. The total amount of revenues 153.22from the taxes in subdivision 1 that may be used to fund these projects is $14,000,000 153.23plus any associated bond costs. 153.24 Subd. 3. Bonding authority. Cook County may issue bonds under Minnesota 153.25Statutes, chapter 475, to pay capital and administrative expenses for the projects authorized 153.26in subdivision 2, in an amount that does not exceed $14,000,000. An election to approve 153.27the bonds under Minnesota Statutes, section 475.58, is not required. The issuance of bonds 153.28under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. 153.29The debt represented by the bonds is not included in computing any debt limitation 153.30applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61, 153.31to pay principal and interest on the bonds is not subject to any levy limitation. 153.32 Subd. 4. Termination of tax. The tax imposed under subdivision 1 expires at the 153.33later of (1) 20 years or (2) when the county board determines that the amount of revenues 153.34received is sufficient to pay for the principal and interest on any bonds or obligation 154.1issued to finance the projects in subdivision 2. Any funds remaining after completion of 154.2the projects and retirement or redemption of the bonds may be placed in the general fund 154.3of the county. The tax imposed under subdivision 1 may expire at an earlier time if the 154.4county board so determines by ordinance. 154.5EFFECTIVE DATE.This section is effective the day after the governing body of 154.6Cook County and its chief clerical officer timely comply with Minnesota Statutes, section 154.7645.021, subdivisions 2 and 3. 154.8 Sec. 19. CITY OF CLEARWATER; TAXES AUTHORIZED. 154.9 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section 154.10477A.016, or any other provision of law, ordinance, or city charter, pursuant to the 154.11approval of the voters on November 7, 2006, the city of Clearwater may impose by 154.12ordinance a sales and use tax of up to one-half of one percent for the purposes specified in 154.13subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota 154.14Statutes, section 297A.99, govern the imposition, administration, collection, and 154.15enforcement of the tax authorized under this subdivision. 154.16 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section 154.17477A.016, or any other provision of law, ordinance, or city charter, the city of Clearwater 154.18may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up 154.19to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person 154.20engaged within the city in the business of selling motor vehicles at retail. 154.21 Subd. 3. Use of revenues. The proceeds of the tax imposed under this section shall 154.22be used to pay for the costs of acquisition, construction, improvement, and development 154.23of a pedestrian bridge, and land and buildings for a community and recreation center. The 154.24total amount of revenues from the taxes in subdivisions 1 and 2 that may be used to fund 154.25these projects is $12,000,000 plus any associated bond costs. 154.26 Subd. 4. Bonding authority. The city of Clearwater may issue bonds in an amount 154.27not to exceed $12,000,000 under Minnesota Statutes, chapter 475, to finance the capital 154.28expenditures and improvements authorized by the referendum under subdivision 1. An 154.29election to approve the bonds under Minnesota Statutes, section 475.59, is not required. 154.30The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section 154.31275.60 or 275.61. The debt represented by the bonds must not be included in computing 154.32any debt limitations applicable to the city, and the levy of taxes required by Minnesota 154.33Statutes, section 475.61, to pay the principal or any interest on the bonds must not be 154.34subject to any levy limitation. 155.1 Subd. 5. Termination of tax. The tax authorized under subdivision 1 terminates at 155.2the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the 155.3city council determines that sufficient funds have been raised from the tax to finance the 155.4capital and administrative costs of the improvements described in subdivision 3, plus the 155.5additional amount needed to pay the costs related to issuance of bonds under subdivision 155.64, including interest on the bonds. Any funds remaining after completion of the projects 155.7specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may 155.8be placed in the general fund of the city. The tax imposed under subdivision 1 may expire 155.9at an earlier time if the city so determines by ordinance. 155.10EFFECTIVE DATE.This section is effective the day after compliance by the 155.11governing body of the city of Clearwater with Minnesota Statutes, section 645.021, 155.12subdivisions 2 and 3. 155.13 Sec. 20. CITY OF NORTH MANKATO; TAXES AUTHORIZED. 155.14 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes, 155.15section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to 155.16the approval of the voters on November 7, 2006, the city of North Mankato may impose 155.17by ordinance a sales and use tax of one-half of one percent for the purposes specified 155.18in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the 155.19imposition, administration, collection, and enforcement of the taxes authorized under 155.20this subdivision. 155.21 Subd. 2. Use of revenues. Revenues received from the tax authorized by 155.22subdivision 1 must be used to pay all or part of the capital costs of the following projects: 155.23 (1) the local share of the Trunk Highway 14/County State-Aid Highway 41 155.24interchange project; 155.25 (2) development of regional parks and hiking and biking trails; 155.26 (3) expansion of the North Mankato Taylor Library; 155.27 (4) riverfront redevelopment; and 155.28 (5) lake improvement projects. 155.29 The total amount of revenues from the tax in subdivision 1 that may be used to fund 155.30these projects is $6,000,000 plus any associated bond costs. 155.31 Subd. 3. Bonds. (a) The city of North Mankato, pursuant to the approval of the 155.32voters at the November 7, 2006 referendum authorizing the imposition of the taxes in 155.33this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and 155.34administrative expenses for the projects described in subdivision 2, in an amount that 156.1does not exceed $6,000,000. A separate election to approve the bonds under Minnesota 156.2Statutes, section 475.58, is not required. 156.3 (b) The debt represented by the bonds is not included in computing any debt 156.4limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section 156.5475.61, to pay principal and interest on the bonds is not subject to any levy limitation. 156.6 Subd. 4. Termination of taxes. The tax imposed under subdivision 1 expires 156.7when the city council determines that the amount of revenues received from the taxes 156.8to pay for the projects under subdivision 2 first equals or exceeds $6,000,000 plus the 156.9additional amount needed to pay the costs related to issuance of bonds under subdivision 156.103, including interest on the bonds. Any funds remaining after completion of the projects 156.11and retirement or redemption of the bonds shall be placed in a capital facilities and 156.12equipment replacement fund of the city. The tax imposed under subdivision 1 may expire 156.13at an earlier time if the city so determines by ordinance. 156.14EFFECTIVE DATE.This section is effective the day after compliance by the 156.15governing body of the city of North Mankato with Minnesota Statutes, section 645.021, 156.16subdivision 3. 156.17 Sec. 21. CITY OF WINONA; TAXES AUTHORIZED. 156.18 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section 156.19477A.016, or any other provision of law, ordinance, or city charter, if approved by the 156.20voters at a general or special election held before December 31, 2009, the city of Winona 156.21may impose by ordinance a sales and use tax of up to one-half of one percent for the 156.22purpose specified in subdivision 2. Except as otherwise provided in this section, the 156.23provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 156.24collection, and enforcement of the tax authorized under this subdivision. 156.25 Subd. 2. Use of revenues. The proceeds of the tax imposed under this section shall 156.26be used to pay the city-borne costs for the construction of a street connection from the city 156.27of Winona to Minnesota marked State Highways 61 and 43. The construction will provide 156.28access to the city's newly built industrial park and additional access to a hospital. The total 156.29amount of revenues from the tax in subdivision 1 that may be used to fund this project is 156.30$8,000,000 plus any associated bond costs. 156.31 Subd. 3. Bonding authority. The city of Winona may issue bonds in an amount 156.32not to exceed $8,000,000 under Minnesota Statutes, chapter 475, to finance the capital 156.33expenditures under subdivision 2. An election to approve the bonds under Minnesota 156.34Statutes, section 475.58, is not required. The issuance of bonds under this subdivision is 157.1not subject to Minnesota Statutes, section 275.60 or 275.61. The debt represented by the 157.2bonds must not be included in computing any debt limitations applicable to the city, and 157.3the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or 157.4any interest on the bonds must not be subject to any levy limitation. 157.5 Subd. 4. Termination of tax. The tax authorized under subdivision 1 terminates 157.6at the earlier of: (1) five years after the date of initial imposition of the tax; or (2) when 157.7the city council determines that sufficient funds have been raised from the tax to finance 157.8the capital and administrative costs of the project described in subdivision 2, plus the 157.9additional amount needed to pay the costs related to issuance of bonds under subdivision 157.103, including interest on the bonds. Any funds remaining after completion of the project 157.11specified in subdivision 2 and retirement or redemption of the bonds in subdivision 3 may 157.12be placed in the general fund of the city. The tax imposed under subdivision 1 may expire 157.13at an earlier time if the city so determines by ordinance. 157.14EFFECTIVE DATE.This section is effective the day after compliance by 157.15the governing body of the city of Winona with Minnesota Statutes, section 645.021, 157.16subdivisions 2 and 3. 157.17 Sec. 22. REPEALER. 157.18Laws 2005, First Special Session chapter 3, article 5, section 24, is repealed. 157.19EFFECTIVE DATE.This section is effective upon enactment of section 9. 157.20ARTICLE 8 157.21JUNE ACCELERATED TAX PAYMENTS 157.22 Section 1. Minnesota Statutes 2006, section 289A.20, subdivision 4, as amended by 157.23Laws 2008, chapter 154, article 6, section 1, is amended to read: 157.24 Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and 157.25payable to the commissioner monthly on or before the 20th day of the month following the 157.26month in which the taxable event occurred, or following another reporting period as the 157.27commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph 157.28(f) or (g), except that use taxes due on an annual use tax return as provided under section 157.29289A.11, subdivision 1 , are payable by April 15 following the close of the calendar year. 157.30 (b) A vendor having a liability of $120,000 or more during a fiscal year ending June 157.3130 must remit the June liability for the next year in the following manner: 157.32 (1) Two business days before June 30 of the year, the vendor must remit 80 90 157.33percent of the estimated June liability to the commissioner. 158.1 (2) On or before August 20 of the year, the vendor must pay any additional amount 158.2of tax not remitted in June. 158.3 (c) A vendor having a liability of: 158.4 (1) $20,000 or more in the fiscal year ending June 30, 2005; or 158.5 (2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years 158.6thereafter, 158.7must remit all liabilities on returns due for periods beginning in the subsequent calendar 158.8year by electronic means on or before the 20th day of the month following the month in 158.9which the taxable event occurred, or on or before the 20th day of the month following the 158.10month in which the sale is reported under section 289A.18, subdivision 4, except for 80 90 158.11percent of the estimated June liability, which is due two business days before June 30. The 158.12remaining amount of the June liability is due on August 20. 158.13EFFECTIVE DATE.This section is effective beginning with June 2009 tax 158.14liabilities. 158.15 Sec. 2. Minnesota Statutes 2006, section 289A.60, subdivision 15, as amended by 158.16Laws 2008, chapter 154, article 6, section 2, is amended to read: 158.17 Subd. 15. Accelerated payment of June sales tax liability; penalty for 158.18underpayment. For payments made after December 31, 2006, if a vendor is required by 158.19law to submit an estimation of June sales tax liabilities and 80 90 percent payment by a 158.20certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual 158.21June liability required to be paid in June less the amount remitted in June. The penalty 158.22must not be imposed, however, if the amount remitted in June equals the lesser of 80 90 158.23percent of the preceding May's liability or 80 90 percent of the average monthly liability 158.24for the previous calendar year. 158.25EFFECTIVE DATE.This section is effective beginning with June 2009 tax 158.26liabilities. 158.27 Sec. 3. Minnesota Statutes 2006, section 297F.09, subdivision 10, as amended by Laws 158.282008, chapter 154, article 6, section 3, is amended to read: 158.29 Subd. 10. Accelerated tax payment; cigarette or tobacco products distributor. 158.30 A cigarette or tobacco products distributor having a liability of $120,000 or more during a 158.31fiscal year ending June 30, shall remit the June liability for the next year in the following 158.32manner: 159.1 (a) Two business days before June 30 of the year, the distributor shall remit the 159.2actual May liability and 80 90 percent of the estimated June liability to the commissioner 159.3and file the return in the form and manner prescribed by the commissioner. 159.4 (b) On or before August 18 of the year, the distributor shall submit a return showing 159.5the actual June liability and pay any additional amount of tax not remitted in June. A 159.6penalty is imposed equal to ten percent of the amount of June liability required to be paid 159.7in June, less the amount remitted in June. However, the penalty is not imposed if the 159.8amount remitted in June equals the lesser of: 159.9 (1) 80 90 percent of the actual June liability; or 159.10 (2) 80 90 percent of the preceding May's liability. 159.11EFFECTIVE DATE.This section is effective beginning with June 2009 tax 159.12liabilities. 159.13 Sec. 4. Minnesota Statutes 2006, section 297G.09, subdivision 9, as amended by Laws 159.142008, chapter 154, article 6, section 4, is amended to read: 159.15 Subd. 9. Accelerated tax payment; penalty. A person liable for tax under this 159.16chapter having a liability of $120,000 or more during a fiscal year ending June 30, shall 159.17remit the June liability for the next year in the following manner: 159.18 (a) Two business days before June 30 of the year, the taxpayer shall remit the actual 159.19May liability and 80 90 percent of the estimated June liability to the commissioner and file 159.20the return in the form and manner prescribed by the commissioner. 159.21 (b) On or before August 18 of the year, the taxpayer shall submit a return showing 159.22the actual June liability and pay any additional amount of tax not remitted in June. A 159.23penalty is imposed equal to ten percent of the amount of June liability required to be paid 159.24in June less the amount remitted in June. However, the penalty is not imposed if the 159.25amount remitted in June equals the lesser of: 159.26 (1) 80 90 percent of the actual June liability; or 159.27 (2) 80 90 percent of the preceding May liability. 159.28EFFECTIVE DATE.This section is effective beginning with June 2009 tax 159.29liabilities. 159.30ARTICLE 9 159.31SPECIAL TAXES 159.32 Section 1. Minnesota Statutes 2006, section 163.051, subdivision 1, is amended to read: 160.1 Subdivision 1. Tax authorized. (a) Except as provided in paragraph (b), the board 160.2of commissioners of each metropolitan county is authorized to levy a wheelage tax of $5 160.3for the year 1972 and each subsequent year thereafter by resolution on each motor vehicle, 160.4except motorcycles as defined in section 169.01, subdivision 4, which that is kept in such 160.5county when not in operation and which that is subject to annual registration and taxation 160.6under chapter 168. The board may provide by resolution for collection of the wheelage 160.7tax by county officials or it may request that the tax be collected by the state registrar of 160.8motor vehicles, and the state registrar of motor vehicles shall collect such tax on behalf 160.9of the county if requested, as provided in subdivision 2. 160.10 (b) The following vehicles are exempt from the wheelage tax: 160.11 (1) motorcycles, as defined in section 169.01, subdivision 4; 160.12 (2) motorized bicycles, as defined in section 169.01, subdivision 4a; 160.13 (3) electric-assisted bicycles, as defined in section 169.01, subdivision 4b; and 160.14 (4) motorized foot scooters, as defined in section 169.01, subdivision 4c. 160.15 Sec. 2. Minnesota Statutes 2006, section 168.012, subdivision 1, is amended to read: 160.16 Subdivision 1. Vehicles exempt from tax, fees, or plate display. (a) The following 160.17vehicles are exempt from the provisions of this chapter requiring payment of tax and 160.18registration fees, except as provided in subdivision 1c: 160.19 (1) vehicles owned and used solely in the transaction of official business by the 160.20federal government, the state, or any political subdivision; 160.21 (2) vehicles owned and used exclusively by educational institutions and used solely 160.22in the transportation of pupils to and from those institutions; 160.23 (3) vehicles used solely in driver education programs at nonpublic high schools; 160.24 (4) vehicles owned by nonprofit charities and used exclusively to transport disabled 160.25persons for charitable, religious, or educational purposes; 160.26 (5) vehicles owned by nonprofit charities and used exclusively for disaster response 160.27and related activities; 160.28 (5) ambulances (6) vehicles owned by ambulance services licensed under section 160.29144E.10 , the general appearance of which is unmistakable that are equipped and 160.30specifically intended for emergency response or providing ambulance services; and 160.31 (6) (7) vehicles owned by a commercial driving school licensed under section 160.32171.34 , or an employee of a commercial driving school licensed under section 171.34, and 160.33the vehicle is used exclusively for driver education and training. 161.1 (b) Vehicles owned by the federal government, municipal fire apparatuses including 161.2fire-suppression support vehicles, police patrols, and ambulances, the general appearance 161.3of which is unmistakable, are not required to register or display number plates. 161.4 (c) Unmarked vehicles used in general police work, liquor investigations, or arson 161.5investigations, and passenger automobiles, pickup trucks, and buses owned or operated by 161.6the Department of Corrections, must be registered and must display appropriate license 161.7number plates, furnished by the registrar at cost. Original and renewal applications for 161.8these license plates authorized for use in general police work and for use by the Department 161.9of Corrections must be accompanied by a certification signed by the appropriate chief of 161.10police if issued to a police vehicle, the appropriate sheriff if issued to a sheriff's vehicle, 161.11the commissioner of corrections if issued to a Department of Corrections vehicle, or the 161.12appropriate officer in charge if issued to a vehicle of any other law enforcement agency. 161.13The certification must be on a form prescribed by the commissioner and state that the 161.14vehicle will be used exclusively for a purpose authorized by this section. 161.15 (d) Unmarked vehicles used by the Departments of Revenue and Labor and Industry, 161.16fraud unit, in conducting seizures or criminal investigations must be registered and must 161.17display passenger vehicle classification license number plates, furnished at cost by the 161.18registrar. Original and renewal applications for these passenger vehicle license plates 161.19must be accompanied by a certification signed by the commissioner of revenue or the 161.20commissioner of labor and industry. The certification must be on a form prescribed by 161.21the commissioner and state that the vehicles will be used exclusively for the purposes 161.22authorized by this section. 161.23 (e) Unmarked vehicles used by the Division of Disease Prevention and Control of the 161.24Department of Health must be registered and must display passenger vehicle classification 161.25license number plates. These plates must be furnished at cost by the registrar. Original 161.26and renewal applications for these passenger vehicle license plates must be accompanied 161.27by a certification signed by the commissioner of health. The certification must be on a 161.28form prescribed by the commissioner and state that the vehicles will be used exclusively 161.29for the official duties of the Division of Disease Prevention and Control. 161.30 (f) Unmarked vehicles used by staff of the Gambling Control Board in gambling 161.31investigations and reviews must be registered and must display passenger vehicle 161.32classification license number plates. These plates must be furnished at cost by the 161.33registrar. Original and renewal applications for these passenger vehicle license plates must 161.34be accompanied by a certification signed by the board chair. The certification must be on a 161.35form prescribed by the commissioner and state that the vehicles will be used exclusively 161.36for the official duties of the Gambling Control Board. 162.1 (g) All other motor vehicles must be registered and display tax-exempt number 162.2plates, furnished by the registrar at cost, except as provided in subdivision 1c. All 162.3vehicles required to display tax-exempt number plates must have the name of the state 162.4department or political subdivision, nonpublic high school operating a driver education 162.5program, or licensed commercial driving school, plainly displayed on both sides of the 162.6vehicle; except that each state hospital and institution for persons who are mentally ill 162.7and developmentally disabled may have one vehicle without the required identification 162.8on the sides of the vehicle, and county social service agencies may have vehicles used 162.9for child and vulnerable adult protective services without the required identification on 162.10the sides of the vehicle. This identification must be in a color giving contrast with that 162.11of the part of the vehicle on which it is placed and must endure throughout the term of 162.12the registration. The identification must not be on a removable plate or placard and must 162.13be kept clean and visible at all times; except that a removable plate or placard may be 162.14utilized on vehicles leased or loaned to a political subdivision or to a nonpublic high 162.15school driver education program. 162.16 Sec. 3. Minnesota Statutes 2006, section 168.012, is amended by adding a subdivision 162.17to read: 162.18 Subd. 2c. Spotter trucks. Spotter trucks, as defined in section 169.01, subdivision 162.197a, must not be taxed as motor vehicles using the public streets and highways, and are 162.20exempt from the provisions of this chapter. 162.21EFFECTIVE DATE.This section is effective the day following final enactment 162.22and expires June 30, 2013. 162.23 Sec. 4. Minnesota Statutes 2006, section 168.013, subdivision 1f, is amended to read: 162.24 Subd. 1f. Bus; commuter van. (a) On all intercity buses, the tax during each 162.25the first two years of vehicle life shall be based on the gross weight of the vehicle and 162.26graduated according to the following schedule: 162.27 Gross Weight of Vehicle Tax 162.28 Under 6,000 lbs. ..... $125 162.29 6,000 to 8,000 lbs., incl. ..... 125 162.30 8,001 to 10,000 lbs., incl. ..... 125 162.31 10,001 to 12,000 lbs., incl. ..... 150 162.32 12,001 to 14,000 lbs., incl. ..... 190 163.1 14,001 to 16,000 lbs., incl. ..... 210 163.2 16,001 to 18,000 lbs., incl. ..... 225 163.3 18,001 to 20,000 lbs., incl. ..... 260 163.4 20,001 to 22,000 lbs., incl. ..... 300 163.5 22,001 to 24,000 lbs., incl. ..... 350 163.6 24,001 to 26,000 lbs., incl. ..... 400 163.7 26,001 to 28,000 lbs., incl. ..... 450 163.8 28,001 to 30,000 lbs., incl. ..... 500 163.9 30,001 and over ..... 550

163.10 (b) During each of the third and fourth years of vehicle life, the tax shall be 75 163.11percent of the foregoing scheduled tax; during the fifth year of vehicle life, the tax shall be 163.1250 percent of the foregoing scheduled tax; during the sixth year of vehicle life, the tax 163.13shall be 37-1/2 percent of the foregoing scheduled tax; and during the seventh and each 163.14succeeding year of vehicle life, the tax shall be 25 percent of the foregoing scheduled tax; 163.15provided that the annual tax paid in any year of its life for an intercity bus shall be not less 163.16than $175 for a vehicle of over 25 passenger seating capacity and not less than $125 for a 163.17vehicle of 25 passenger and less seating capacity. 163.18 (c) On all intracity buses operated by an auto transportation company in the business 163.19of transporting persons for compensation as a common carrier and operating within the 163.20limits of cities having populations in excess of 200,000 inhabitants, the tax during each 163.21year of the vehicle life of each such bus shall be $40; on all of such intracity buses operated 163.22in cities having a population of less than 200,000 and more than 70,000 inhabitants, the 163.23tax during each year of vehicle life of each bus shall be $10; and on all of such intracity 163.24buses operating in cities having a population of less than 70,000 inhabitants, the tax during 163.25each year of vehicle life of each bus shall be $2. 163.26 (d) On all other buses and commuter vans, as defined in section 168.126, the tax 163.27during each of the first three years of the vehicle life shall be based on the gross weight of 163.28the vehicle and graduated according to the following schedule: Where the gross weight 163.29of the vehicle is 6,000 pounds or less, $25. Where the gross weight of the vehicle is 163.30more than 6,000 pounds, and not more than 8,000 pounds, the tax shall be $25 plus an 163.31additional tax of $5 per ton for the ton or major portion in excess of 6,000 pounds. Where 163.32the gross weight of the vehicle is more than 8,000 pounds, and not more than 20,000 163.33pounds, the tax shall be $30 plus an additional tax of $10 per ton for each ton or major 163.34portion in excess of 8,000 pounds. Where the gross weight of the vehicle is more than 164.120,000 pounds and not more than 24,000 pounds, the tax shall be $90 plus an additional 164.2tax of $15 per ton for each ton or major portion in excess of 20,000 pounds. Where the 164.3gross weight of the vehicle is more than 24,000 pounds and not more than 28,000 pounds, 164.4the tax shall be $120 plus an additional tax of $25 per ton for each ton or major portion 164.5in excess of 24,000 pounds. Where the gross weight of the vehicle is more than 28,000 164.6pounds, the tax shall be $170 plus an additional tax of $30 per ton for each ton or major 164.7portion in excess of 28,000 pounds. 164.8 (e) During the fourth and succeeding years of vehicle life, the tax shall be 80 percent 164.9of the foregoing scheduled tax but in no event less than $20 per vehicle. 164.10 Sec. 5. Minnesota Statutes 2006, section 168A.03, subdivision 1, is amended to read: 164.11 Subdivision 1. No certificate issued. The registrar shall not issue a certificate of 164.12title for: 164.13 (1) a vehicle owned by the United States; 164.14 (2) a vehicle owned by a nonresident and not required by law to be registered in 164.15this state; 164.16 (3) a vehicle owned by a nonresident and regularly engaged in the interstate 164.17transportation of persons or property for which a currently effective certificate of title 164.18has been issued in another state; 164.19 (4) a vehicle moved solely by animal power; 164.20 (5) an implement of husbandry; 164.21 (6) special mobile equipment; 164.22 (7) a self-propelled wheelchair or invalid tricycle; 164.23 (8) a trailer (i) having a gross weight of 4,000 pounds or less unless a secured party 164.24holds an interest in the trailer or a certificate of title was previously issued by this state or 164.25any other state or (ii) designed primarily for agricultural purposes except a recreational 164.26vehicle or a manufactured home, both as defined in section 168.011, subdivisions 8 and 25; 164.27 (9) a snowmobile.; and 164.28 (10) a spotter truck, as defined in section 169.01, subdivision 7a. 164.29EFFECTIVE DATE.This section is effective the day following final enactment 164.30and expires June 30, 2013. 164.31 Sec. 6. Minnesota Statutes 2006, section 169.01, is amended by adding a subdivision 164.32to read: 165.1 Subd. 7a. Spotter truck. "Spotter truck" means a truck-tractor with a manufacturer's 165.2certificate of origin "not for on road use" specification, used exclusively for staging or 165.3shuttling trailers in the course of a truck freight operation or freight shipping operation. 165.4EFFECTIVE DATE.This section is effective the day following final enactment 165.5and expires June 30, 2013. 165.6 Sec. 7. [169.228] SPOTTER TRUCKS. 165.7 Notwithstanding any other law, a spotter truck may be operated on public streets 165.8and highways if: 165.9 (1) the operator has the appropriate class of driver's license; 165.10 (2) the vehicle complies with the size, weight, and load restrictions under this 165.11chapter; 165.12 (3) the vehicle meets all inspection requirements under section 169.781; and 165.13 (4) the vehicle is operated within (i) a zone of two air miles from the truck freight 165.14operation or freight shipping operation where the vehicle is housed, or (ii) directly to and 165.15from a repair shop, service station, or fueling station for the purpose of repair, servicing, 165.16or refueling. 165.17EFFECTIVE DATE.This section is effective the day following final enactment 165.18and expires June 30, 2013. 165.19 Sec. 8. Minnesota Statutes 2006, section 169.781, subdivision 1, as amended by Laws 165.202008, chapter 287, article 1, section 48, is amended to read: 165.21 Subdivision 1. Definitions. For purposes of sections 169.781 to 169.783: 165.22 (a) "Commercial motor vehicle": 165.23 (1) means a motor vehicle or combination of motor vehicles used to transport 165.24passengers or property if the motor vehicle: 165.25 (i) has a gross vehicle weight of more than 26,000 pounds; 165.26 (ii) is a vehicle in a combination of more than 26,000 pounds; 165.27 (iii) is a bus; or 165.28 (iv) is of any size and is used in the transportation of hazardous materials that are 165.29required to be placarded under Code of Federal Regulations, title 49, parts 100-185; and 165.30 (2) does not include (i) a school bus or Head Start bus displaying a certificate under 165.31section 169.451, or (ii) a bus operated by the Metropolitan Council or by a local transit 165.32commission created in chapter 458A.; and 165.33 (3) a spotter truck. 165.34 (b) "Commissioner" means the commissioner of public safety. 166.1 (c) "Owner" means a person who owns, or has control, under a lease of more than 30 166.2days' duration, of one or more commercial motor vehicles. 166.3 Sec. 9. Minnesota Statutes 2006, section 169.781, subdivision 2, as amended by Laws 166.42008, chapter 287, article 1, section 48, is amended to read: 166.5 Subd. 2. Inspection required. (a) It is unlawful for a person to operate or permit 166.6the operation of: 166.7 (1) a commercial motor vehicle registered in Minnesota or a spotter truck; or 166.8 (2) special mobile equipment as defined in section 168.011, subdivision 22, and 166.9which is self-propelled, if it is mounted on a commercial motor vehicle chassis, 166.10in violation of the requirements of paragraph (b). 166.11 (b) A vehicle described in paragraph (a): 166.12 (1) must display a valid safety inspection decal issued by an inspector certified 166.13by the commissioner; or 166.14 (2) must carry (i) proof that the vehicle complies with federal motor vehicle 166.15inspection requirements for vehicles in interstate commerce, and (ii) a certificate of 166.16compliance with federal requirements issued by the commissioner under subdivision 9. 166.17EFFECTIVE DATE.This section is effective the day following final enactment 166.18and expires June 30, 2013. 166.19 Sec. 10. Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read: 166.20 Subd. 4. Expiration. The authority to impose the tax under this section expires 166.21January 1, 2008 2013. 166.22EFFECTIVE DATE.This section is effective the day following final enactment 166.23and the tax may be imposed on or after that date. 166.24 Sec. 11. Minnesota Statutes 2006, section 383A.81, subdivision 1, is amended to read: 166.25 Subdivision 1. Creation. An environmental response fund is created for the 166.26purposes specified in this section. The taxes imposed by section 383A.80 must be 166.27deposited in the fund. The board of county commissioners shall administer the fund either 166.28as a county board, or a housing and redevelopment authority, or a regional rail authority. 166.29 Sec. 12. Minnesota Statutes 2006, section 383A.81, subdivision 2, is amended to read: 166.30 Subd. 2. Uses of fund. (a) The fund created in subdivision 1 must be used for 166.31the following purposes: 167.1 (1) acquisition through purchase or condemnation of lands or property which are 167.2polluted or contaminated with hazardous substances; 167.3 (2) paying the costs associated with indemnifying or holding harmless the 167.4entity taking title to lands or property from any liability arising out of the ownership, 167.5remediation, or use of the land or property; 167.6 (3) paying for the costs of remediating the acquired land or property; or 167.7 (4) paying the costs associated with remediating lands or property which are polluted 167.8or contaminated with hazardous substances; or 167.9 (5) paying for the costs associated with improving the property for economic 167.10development, recreational, housing, transportation or rail traffic. 167.11 (b) No more than three percent of the fund may be used each year for the costs 167.12of administration. 167.13 Sec. 13. Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read: 167.14 Subd. 4. Expiration. The authority to impose the tax under this section expires 167.15January 1, 2008 2013. 167.16EFFECTIVE DATE.This section is effective the day following final enactment 167.17and the tax may be imposed on or after that date. 167.18 Sec. 14. Minnesota Statutes 2006, section 383B.81, subdivision 2, is amended to read: 167.19 Subd. 2. Uses of fund. (a) The fund created in subdivision 1 must be used for 167.20the following purposes: 167.21 (1) acquisition through purchase or condemnation of lands or property which are 167.22polluted or contaminated with hazardous substances; 167.23 (2) paying the costs associated with indemnifying or holding harmless the 167.24entity taking title to lands or property from any liability arising out of the ownership, 167.25remediation, or use of the land or property; 167.26 (3) paying for the costs of remediating the acquired land or property; 167.27 (4) paying the costs associated with remediating lands or property which are polluted 167.28or contaminated with hazardous substances; or 167.29 (5) paying for the costs associated with improving the property for economic 167.30development, recreational, housing, transportation or rail traffic. 167.31 (b) No more than three percent of the fund may be used each year for the costs 167.32of administration. 168.1ARTICLE 10 168.2MINERALS 168.3 Section 1. Minnesota Statutes 2006, section 298.01, is amended by adding a 168.4subdivision to read: 168.5 Subd. 9. Other iron bearing material. "Other iron bearing material" means the 168.6material described in section 298.405. 168.7 Sec. 2. Minnesota Statutes 2006, section 298.22, subdivision 2, is amended to read: 168.8 Subd. 2. Iron Range Resources and Rehabilitation Board. There is hereby 168.9created the Iron Range Resources and Rehabilitation Board, consisting of 13 members, 168.10five of whom are state senators appointed by the Subcommittee on Committees of the 168.11Rules Committee of the senate, and five of whom are representatives, appointed by the 168.12speaker of the house of representatives. The remaining members shall be appointed one 168.13each by the senate majority leader, the speaker of the house of representatives, and the 168.14governor and must be nonlegislators who reside in a taconite assistance area as defined in 168.15section 273.1341. The members shall be appointed in January of every odd-numbered 168.16year, except that the initial nonlegislator members shall be appointed by July 1, 1999, and 168.17shall serve until January of the next odd-numbered year. Vacancies on the board shall be 168.18filled in the same manner as the original members were chosen. At least a majority of 168.19the legislative members of the board shall be elected from state senatorial or legislative 168.20districts in which over 50 percent of the residents reside within a taconite assistance area 168.21as defined in section 273.1341. All expenditures and projects made by the commissioner 168.22of Iron Range resources and rehabilitation shall be consistent with the priorities 168.23established in subdivision 8 and shall first be submitted to the Iron Range Resources and 168.24Rehabilitation Board for approval by a majority of the board of expenditures and projects 168.25for rehabilitation purposes as provided by this section, and the method, manner, and time 168.26of payment of all funds proposed to be disbursed shall be first approved or disapproved by 168.27the board. The board shall biennially make its report to the governor and the legislature on 168.28or before November 15 of each even-numbered year. The expenses of the board shall be 168.29paid by the state from the funds raised pursuant to this section. Members of the board who 168.30are legislators may be reimbursed for expenses in the manner provided in sections 3.099, 168.31subdivision 1, and 3.101, and may receive per diem payments during the interims between 168.32legislative sessions in the manner provided in section 3.099, subdivision 1. Members of 168.33the board who are not legislators may receive per diem payments and be reimbursed for 168.34expenses at the lowest rate provided for legislative members. 169.1 Sec. 3. Minnesota Statutes 2006, section 298.22, subdivision 5a, as added by Laws 169.22008, chapter 154, article 8, section 3, is amended to read: 169.3 Subd. 5a. Forest trust. The commissioner, upon the affirmative vote of a majority 169.4of the members of the board, may purchase forest lands in the taconite assistance area 169.5defined in under section 273.1341 with funds specifically authorized for the purchase. The 169.6acquired forest lands must be held in trust for the benefit of the citizens of the taconite 169.7assistance area as the Iron Range Miners' Memorial Forest. The forest trust lands shall 169.8be managed and developed for recreation and economic development purposes. The 169.9commissioner, upon the affirmative vote of a majority of the members of the board, may 169.10sell forest lands purchased under this subdivision if the board finds that the sale advances 169.11the purposes of the trust. Proceeds derived from the management or sale of the lands and 169.12from the sale of timber or removal of gravel or other minerals from these forest lands shall 169.13be deposited into an Iron Range Miners' Memorial Forest account that is established within 169.14the state financial accounts. Funds may be expended from the account upon approval of a 169.15majority of the members of the board to purchase, manage, administer, convey interests 169.16in, and improve the forest lands. By majority vote of the members of the board, money in 169.17the Iron Range Miners' Memorial Forest account may be transferred into the corpus of the 169.18Douglas J. Johnson economic protection trust fund established under sections 298.291 169.19to 298.294. The property acquired under the authority granted by this subdivision and 169.20income derived from the property or the operation or management of the property are 169.21exempt from taxation by the state or its political subdivisions while held by the forest trust. 169.22EFFECTIVE DATE.This section is effective the day following final enactment. 169.23 Sec. 4. Minnesota Statutes 2006, section 298.22, is amended by adding a subdivision 169.24to read: 169.25 Subd. 12. Data classification. Data collected by the commissioner on any 169.26application to determine the eligibility of an applicant for any loan or equity investment 169.27made from funds that are available to the commissioner under this section or otherwise 169.28by law, and to assess or monitor the applicant's or recipient's default risk or to collect 169.29payments owed are: (1) private data on individuals as defined in section 13.02, subdivision 169.3012; and (2) nonpublic data as defined in section 13.02, subdivision 9. The names of the 169.31recipients of the financial assistance and the amounts of financial assistance are public data. 169.32 Sec. 5. Minnesota Statutes 2007 Supplement, section 298.227, is amended to read: 169.33298.227 TACONITE ECONOMIC DEVELOPMENT FUND. 170.1 (a) An amount equal to that distributed pursuant to each taconite producer's taxable 170.2production and qualifying sales under section 298.28, subdivision 9a, shall be held by 170.3the Iron Range Resources and Rehabilitation Board in a separate taconite economic 170.4development fund for each taconite and direct reduced ore producer. Money from the 170.5fund for each producer shall be released by the commissioner after review by a joint 170.6committee consisting of an equal number of representatives of the salaried employees and 170.7the nonsalaried production and maintenance employees of that producer. The District 11 170.8director of the United States Steelworkers of America, on advice of each local employee 170.9president, shall select the employee members. In nonorganized operations, the employee 170.10committee shall be elected by the nonsalaried production and maintenance employees. 170.11The review must be completed no later than six months after the producer presents a 170.12proposal for expenditure of the funds to the committee. The funds held pursuant to this 170.13section may be released only for workforce development and associated public facility 170.14improvement, or for acquisition of plant and stationary mining equipment and facilities 170.15for the producer or for research and development in Minnesota on new mining, or 170.16taconite, iron, or steel production technology, but only if the producer provides a matching 170.17expenditure to be used for the same purpose of at least 50 percent of the distribution 170.18based on 14.7 cents per ton beginning with distributions in 2002. Effective for proposals 170.19for expenditures of money from the fund beginning May 26, 2007, the commissioner 170.20may not release the funds before the next scheduled meeting of the board. If the board 170.21rejects a proposed expenditure, the funds must be deposited in the Taconite Environmental 170.22Protection Fund under sections 298.222 to 298.225. If a producer uses money which has 170.23been released from the fund prior to May 26, 2007 to procure haulage trucks, mobile 170.24equipment, or mining shovels, and the producer removes the piece of equipment from 170.25the taconite tax relief area defined in section 273.134 within ten years from the date of 170.26receipt of the money from the fund, a portion of the money granted from the fund must 170.27be repaid to the taconite economic development fund. The portion of the money to be 170.28repaid is 100 percent of the grant if the equipment is removed from the taconite tax relief 170.29area within 12 months after receipt of the money from the fund, declining by ten percent 170.30for each of the subsequent nine years during which the equipment remains within the 170.31taconite tax relief area. If a taconite production facility is sold after operations at the 170.32facility had ceased, any money remaining in the fund for the former producer may be 170.33released to the purchaser of the facility on the terms otherwise applicable to the former 170.34producer under this section. If a producer fails to provide matching funds for a proposed 170.35expenditure within six months after the commissioner approves release of the funds, 170.36the funds are available for release to another producer in proportion to the distribution 171.1provided and under the conditions of this section. Any portion of the fund which is not 171.2released by the commissioner within two years one year of its deposit in the fund shall be 171.3divided between the taconite environmental protection fund created in section 298.223 171.4and the Douglas J. Johnson economic protection trust fund created in section 298.292 for 171.5placement in their respective special accounts. Two-thirds of the unreleased funds shall be 171.6distributed to the taconite environmental protection fund and one-third to the Douglas J. 171.7Johnson economic protection trust fund. 171.8 (b) Notwithstanding the requirements of paragraph (a), setting the amount of 171.9distributions and the review process, an amount equal to ten cents per taxable ton of 171.10production in 2007, for distribution in 2008 only, that would otherwise be distributed 171.11under paragraph (a), may be used for a loan for the cost of construction of a biomass 171.12energy facility. This amount must be deducted from the distribution under paragraph 171.13(a) for which a matching expenditure by the producer is not required. The granting of 171.14the loan is subject to approval by the Iron Range Resources and Rehabilitation Board; 171.15interest must be payable on the loan at the rate prescribed in section 298.2213, subdivision 171.163. Repayments of the loan and interest must be deposited in the northeast Minnesota 171.17economic development fund established in section 298.2213. If a loan is not made under 171.18this paragraph by July 1, 2009, the amount that had been made available for the loan under 171.19this paragraph must be transferred to the northeast Minnesota economic development 171.20fund. Money distributed in 2008 to the fund established under this section that exceeds ten 171.21cents per ton is available to qualifying producers under paragraph (a) on a pro rata basis. 171.22 If 2008 H.F. No. 1812 is enacted and includes a provision that amends this section 171.23in a manner that is different from the amendment in this section, the amendment in this 171.24section supersedes the amendment in 2008 H.F. No. 1812, notwithstanding section 645.26. 171.25EFFECTIVE DATE.The section is effective the day following final enactment. 171.26 Sec. 6. Minnesota Statutes 2006, section 298.24, subdivision 1, as amended by Laws 171.272008, chapter 154, article 8, section 5, is amended to read: 171.28 Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002, 171.29and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and 171.30quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon 171.31the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore 171.32concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the 171.33same rate imposed for concentrates produced in 2004. For concentrates produced in 2009 171.34and subsequent years, the tax is also imposed upon other iron bearing material. 172.1 (b) For concentrates produced in 2006 and subsequent years, the tax rate shall be 172.2equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate 172.3multiplied by the percentage increase in the implicit price deflator from the fourth quarter 172.4of the second preceding year to the fourth quarter of the preceding year. "Implicit price 172.5deflator" means the implicit price deflator for the gross domestic product prepared by the 172.6Bureau of Economic Analysis of the United States Department of Commerce. 172.7 (c) On concentrates produced in 1997 and thereafter, An additional tax is imposed 172.8equal to three cents per gross ton of merchantable iron ore concentrate for each one 172.9percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees 172.10Fahrenheit. 172.11 (d) The tax on taconite and iron sulphides shall be imposed on the average of the 172.12production for the current year and the previous two years. The rate of the tax imposed 172.13will be the current year's tax rate. This clause shall not apply in the case of the closing 172.14of a taconite facility if the property taxes on the facility would be higher if this clause 172.15and section 298.25 were not applicable. The tax on other iron bearing material shall be 172.16imposed on the current year production. 172.17 (e) If the tax or any part of the tax imposed by this subdivision is held to be 172.18unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate 172.19produced shall be imposed. 172.20 (f) Consistent with the intent of this subdivision to impose a tax based upon the 172.21weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 172.22determine the weight of merchantable iron ore concentrate included in fluxed pellets by 172.23subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 172.24flux additives included in the pellets from the weight of the pellets. For purposes of this 172.25paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 172.26olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 172.27No subtraction from the weight of the pellets shall be allowed for binders, mineral and 172.28chemical additives other than basic flux additives, or moisture. 172.29 (g)(1) Notwithstanding any other provision of this subdivision, for the first two years 172.30of a plant's commercial production of direct reduced ore from ore mined in this state, no 172.31tax is imposed under this section. As used in this paragraph, "commercial production" is 172.32production of more than 50,000 tons of direct reduced ore in the current year or in any 172.33prior year, "noncommercial production" is production of 50,000 tons or less of direct 172.34reduced ore in any year, and "direct reduced ore" is ore that results in a product that has an 172.35iron content of at least 75 percent. For the third year of a plant's commercial production of 172.36direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate 173.1otherwise determined under this subdivision. For the fourth commercial production year, 173.2the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth 173.3commercial production year, the rate is 75 percent of the rate otherwise determined under 173.4this subdivision; and for all subsequent commercial production years, the full rate is 173.5imposed. 173.6 (2) Subject to clause (1), production of direct reduced ore in this state is subject to 173.7the tax imposed by this section, but if that production is not produced by a producer of 173.8taconite or, iron sulfides, or other iron bearing material, the production of taconite or, 173.9iron sulfides, or other iron bearing material, that is consumed in the production of direct 173.10reduced iron in this state is not subject to the tax imposed by this section on taconite or, 173.11iron sulfides, or other iron bearing material. 173.12 (3) Notwithstanding any other provision of this subdivision, no tax is imposed 173.13on direct reduced ore under this section during the facility's noncommercial production 173.14of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 173.15production of direct reduced ore is subject to the tax imposed by this section on taconite 173.16and iron sulphides. Three-year average production of direct reduced ore does not 173.17include production of direct reduced ore in any noncommercial year. Three-year average 173.18production for a direct reduced ore facility that has noncommercial production is the 173.19average of the commercial production of direct reduced ore for the current year and the 173.20previous two commercial years. 173.21 (4) This paragraph applies only to plants for which all environmental permits have 173.22been obtained and construction has begun before July 1, 2008. 173.23EFFECTIVE DATE.This section is effective for production in 2009 and thereafter, 173.24except that the amendment to paragraph (g) is effective the day following final enactment. 173.25 Sec. 7. Minnesota Statutes 2006, section 298.25, as amended by Laws 2008, chapter 173.26154, article 8, section 6, is amended to read: 173.27298.25 TAXES ADDITIONAL TO OCCUPATION TAX; IN LIEU OF OTHER 173.28TAXES. 173.29 The taxes imposed under section 298.24 shall be in addition to the occupation tax 173.30imposed upon the business of mining and producing iron ore. Except as herein otherwise 173.31provided, such taxes shall be in lieu of all other taxes upon such taconite, iron sulphides, 173.32and direct reduced ore, and other iron bearing material or the lands in which they are 173.33contained, or upon the mining or quarrying thereof, or the production of concentrate or 173.34direct reduced ore therefrom, or upon the concentrate or direct reduced ore produced, 173.35or upon the machinery, equipment, tools, supplies and buildings used in such mining, 174.1quarrying or production, or upon the lands occupied by, or used in connection with, such 174.2mining, quarrying or production facilities. If electric or steam power for the mining, 174.3transportation or concentration of such taconite, concentrates or, direct reduced ore, or 174.4other iron bearing material produced therefrom is generated in plants principally devoted 174.5to the generation of power for such purposes, the plants in which such power is generated 174.6and all machinery, equipment, tools, supplies, transmission and distribution lines used in 174.7the generation and distribution of such power, shall not be considered to be machinery, 174.8equipment, tools, supplies and buildings used in the mining, quarrying, or production of 174.9taconite, taconite concentrates or direct reduced ore within the meaning of this section, 174.10and shall be subject to general property taxation. Nothing herein shall prevent in this 174.11section prevents the assessment and taxation under the general property tax law of: 174.12 (1) the surface of reserve land containing taconite or other iron bearing material 174.13and not occupied by such facilities or used in connection therewith with them at the 174.14value thereof of the land without regard to the taconite or, iron sulphides therein, nor the 174.15assessment and taxation of, or other iron bearing materials in the land; 174.16 (2) merchantable iron ore or other minerals, or iron-bearing materials other than 174.17taconite or iron sulphides in such the lands in the manner provided by law, nor the 174.18assessment and taxation of; 174.19 (3) facilities used in producing sulphur or sulphur products from iron sulphide 174.20concentrates, or in refining such sulphur products, under the general property tax laws. 174.21Nothing herein shall except from general taxation or from taxation as provided by other 174.22laws; or 174.23 (4) any property used for residential or townsite purposes, including utility services 174.24thereto to that property. 174.25 This section does not provide an exemption from general property taxation for ore 174.26docks even if located at the site of a taconite production facility. 174.27EFFECTIVE DATE.This section is effective for production in 2009 and thereafter. 174.28 Sec. 8. Minnesota Statutes 2006, section 298.28, subdivision 3, is amended to read: 174.29 Subd. 3. Cities; towns. (a) 12.5 cents per taxable ton, less any amount distributed 174.30under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid 174.31account to be distributed as provided in section 298.282. 174.32 (b) An amount must be allocated to towns or cities that is annually certified by 174.33the county auditor of a county containing a taconite tax relief area as defined in section 174.34273.134, paragraph (b) , within which there is (1) an organized township if, as of January 174.352, 1982, more than 75 percent of the assessed valuation of the township consists of iron 175.1ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation 175.2of the city consists of iron ore. 175.3 (c) The amount allocated under paragraph (b) will be the portion of a township's or 175.4city's certified levy equal to the proportion of (1) the difference between 50 percent of 175.5January 2, 1982, assessed value in the case of a township and 50 percent of the January 2, 175.61980, assessed value in the case of a city and its current assessed value to (2) the sum of 175.7its current assessed value plus the difference determined in (1), provided that the amount 175.8distributed shall not exceed $55 per capita in the case of a township or $75 per capita in 175.9the case of a city. For purposes of this limitation, population will be determined according 175.10to the 1980 decennial census conducted by the United States Bureau of the Census. If the 175.11current assessed value of the township exceeds 50 percent of the township's January 2, 175.121982, assessed value, or if the current assessed value of the city exceeds 50 percent of the 175.13city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this 175.14paragraph, "assessed value," when used in reference to years other than 1980 or 1982, 175.15means the appropriate net tax capacities multiplied by 10.2. 175.16 (d) In addition to other distributions under this subdivision, three cents per taxable 175.17ton for distributions in 2009 must be allocated for distribution to towns that are entirely 175.18located within the taconite tax relief area defined in section 273.134, paragraph (b). 175.19For distribution in 2010 and subsequent years, the three-cent amount must be annually 175.20increased in the same proportion as the increase in the implicit price deflator as provided 175.21in section 298.24, subdivision 1. The amount available under this paragraph will be 175.22distributed to eligible towns on a per capita basis, provided that no town may receive more 175.23than $50,000 in any year under this paragraph. Any amount of the distribution that exceeds 175.24the $50,000 limitation for a town under this paragraph must be redistributed on a per 175.25capita basis among the other eligible towns, to whose distributions do not exceed $50,000. 175.26EFFECTIVE DATE.This section is effective for distributions in 2009 and 175.27thereafter. 175.28 Sec. 9. Minnesota Statutes 2006, section 298.28, subdivision 9d, as added by Laws 175.292008, chapter 154, article 8, section 9, is amended to read: 175.30 Subd. 9d. Iron Range higher education account. Two Five cents per taxable ton 175.31must be allocated to the Iron Range Resources and Rehabilitation Board to be deposited 175.32in an Iron Range higher education account that is hereby created, to be used for higher 175.33education programs conducted at educational institutions in the taconite assistance area 175.34defined in section 273.1341. The Iron Range Higher Education committee under section 176.1298.2214 and the Iron Range Resources and Rehabilitation Board must approve all 176.2expenditures from the account. 176.3EFFECTIVE DATE.This section is effective for production in 2007, distributions 176.4in 2008, and thereafter. 176.5 Sec. 10. Minnesota Statutes 2006, section 298.28, subdivision 12, is amended to read: 176.6 Subd. 12. Estimates. On or before October 10 of each calendar year each 176.7producer of taconite or, iron sulphides, and other iron-bearing material subject to taxation 176.8under section 298.24 (, hereinafter called referred to as "taxpayer"), shall file with the 176.9commissioner of revenue an estimate of the amount of tax which that would be payable by 176.10such the taxpayer under said the law for such the calendar year; provided such that the 176.11 estimate shall be in an amount not less than the amount due on the mining and production 176.12of concentrates up to September 30 of said the year plus the amount becoming due 176.13because of probable production between September 30 and December 31 of said the year, 176.14less any credit allowable as provided in subdivision 13. The commissioner of revenue 176.15shall annually on or before October 10 report an estimated distribution amount to each 176.16taxing district and the officers with whom such report is so filed shall use the amount so 176.17indicated as being distributable to each taxing district in computing the permissible tax 176.18levy of such the county or city in the year in which such the estimate is made, and payable 176.19in the next ensuing calendar year, except that one cent per taxable ton of the amount 176.20distributed under subdivision 5, paragraph (d), shall not be deducted in calculating the 176.21permissible levy. In any calendar year in which a general property tax levy has been 176.22made, if the taxes distributable to any such county or city are greater than the amount 176.23estimated by the commissioner to be paid to any such the county or city in such that 176.24year, the excess of such the distribution shall be held in a special fund by the county or 176.25city and shall not be expended until the succeeding calendar year, and shall be included 176.26in computing the permissible levies of such the county or city payable in such year. If 176.27the amounts distributable to any such the county or city after final determination by the 176.28commissioner of revenue under this section are less than the amounts by which a taxing 176.29district's levies were reduced pursuant to this section, such the county or city may issue 176.30certificates of indebtedness in the amount of the shortage, and may include in its next tax 176.31levy an amount sufficient to pay such the certificates of indebtedness and interest thereon, 176.32or, if no certificates were issued, an amount equal to such the shortage. 176.33EFFECTIVE DATE.This section is effective for production in 2009 and thereafter. 177.1 Sec. 11. Minnesota Statutes 2006, section 298.292, subdivision 2, as amended by Laws 177.22008, chapter 154, article 8, section 11, is amended to read: 177.3 Subd. 2. Use of money. Money in the Douglas J. Johnson economic protection trust 177.4fund may be used for the following purposes: 177.5 (1) to provide loans, loan guarantees, interest buy-downs and other forms of 177.6participation with private sources of financing, but a loan to a private enterprise shall be 177.7for a principal amount not to exceed one-half of the cost of the project for which financing 177.8is sought, and the rate of interest on a loan to a private enterprise shall be no less than the 177.9lesser of eight percent or an interest rate three percentage points less than a full faith 177.10and credit obligation of the United States government of comparable maturity, at the 177.11time that the loan is approved; 177.12 (2) to fund reserve accounts established to secure the payment when due of the 177.13principal of and interest on bonds issued pursuant to section 298.2211; 177.14 (3) to pay in periodic payments or in a lump sum payment any or all of the interest 177.15on bonds issued pursuant to chapter 474 for the purpose of constructing, converting, 177.16or retrofitting heating facilities in connection with district heating systems or systems 177.17utilizing alternative energy sources; 177.18 (4) to invest in a venture capital fund or enterprise that will provide capital to other 177.19entities that are engaging in, or that will engage in, projects or programs that have the 177.20purposes set forth in subdivision 1. No investments may be made in a venture capital fund 177.21or enterprise unless at least two other unrelated investors make investments of at least 177.22$500,000 in the venture capital fund or enterprise, and the investment by the Douglas 177.23J. Johnson economic protection trust fund may not exceed the amount of the largest 177.24investment by an unrelated investor in the venture capital fund or enterprise. For purposes 177.25of this subdivision, an "unrelated investor" is a person or entity that is not related to 177.26the entity in which the investment is made or to any individual who owns more than 40 177.27percent of the value of the entity, in any of the following relationships: spouse, parent, 177.28child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of 177.29the value of all interests in it. For purposes of determining the limitations under this 177.30clause, the amount of investments made by an investor other than the Douglas J. Johnson 177.31economic protection trust fund is the sum of all investments made in the venture capital 177.32fund or enterprise during the period beginning one year before the date of the investment 177.33by the Douglas J. Johnson economic protection trust fund; and 177.34 (5) to purchase forest land in the taconite assistance area defined in section 273.1341 177.35to be held and managed as a public trust for the benefit of the area for the purposes 177.36authorized in section 298.22, subdivision 5a. Property purchased under this section may 178.1be sold by the commissioner upon approval by a majority vote of the board. The net 178.2proceeds must be deposited in the trust fund for the purposes and uses of this section. 178.3 Money from the trust fund shall be expended only in or for the benefit of the taconite 178.4assistance area defined in section 273.1341. 178.5 Sec. 12. Minnesota Statutes 2006, section 298.405, subdivision 1, is amended to read: 178.6 Subdivision 1. Imposition of tax Definition. In any year in which Iron bearing 178.7material other than taconite and semitaconite as defined by law, having not more than 46.5 178.8percent natural iron content on the average, is subject to taxation under section 298.24. 178.9The tax under that section applies to material that is: 178.10 (1) produced from any 40 acre tract or governmental lot, but not from more than 178.11three such tracts or lots by an individual producer, is finer than or is ground to 90 percent 178.12passing 20 mesh and is; and 178.13 (2) treated in Minnesota for the purpose of separating the iron particles from silica, 178.14alumina, or other detrimental compounds or elements unless used in a direct reduction 178.15process, and is treated in Minnesota: 178.16 (a) (i) by either electrostatic separation, roasting and magnetic separation, or 178.17flotation or; 178.18 (b) (ii) by a direct reduction process or; 178.19 (c) (iii) by any combination of such processes; or 178.20 (d) (iv) by any other process or method not presently employed in gravity separation 178.21plants employing only crushing, screening, washing, jigging, heavy media separation, 178.22spirals, cyclones, drying or any combination thereof, the production of such ore shall 178.23be taxed in the manner and at the rates provided for the taxation of semitaconite under 178.24section provided that the 178.25 amount of concentrates or final product so produced each year from any one 40 acre 178.26tract or governmental lot exceeds 100,000 tons or exceeds 25,000 tons from any one 178.2740 acre tract or governmental lot where the average phosphorus content exceeds .125 178.28percent dry analysis or .10 percent sulphur dry analysis. Such tax shall be in addition to 178.29the occupation and royalty taxes but shall be in lieu of all other taxes upon the said 40 178.30acre tract or governmental lot, the iron ore contained therein, the concentrates produced, 178.31and the mining and beneficiating facilities used in such production. The determination 178.32as to what materials will qualify under this law will be made by the commissioner of 178.33revenue who may use the services of the Ore Estimate Division of the University of 178.34Minnesota, Department of Civil and Mineral Engineering, which is hereby established 178.35as a technical consultant to the commissioner for the purposes of this section. The tax 179.1imposed shall be collected, paid, and the proceeds thereof distributed in the same manner 179.2and at the same time as the tax imposed upon semitaconite by section is collected, 179.3paid, and distributed. 179.4 Sec. 13. Laws 2008, chapter 154, article 8, section 14, the effective date, is amended to 179.5read: 179.6EFFECTIVE DATE.This section is effective for distributions made in 2008 2007 179.7and thereafter. 179.8 Sec. 14. ELECTRIC GENERATING PLANTS IN TACONITE TAX RELIEF 179.9AREAS. 179.10 For purposes of definitions of "taconite tax relief area" and "taconite assistance area" 179.11in Minnesota Statutes, sections 273.134, 273.1341, and related laws, the elimination 179.12of the property tax exemption for certain electric generating plants under Laws 2008, 179.13chapter 154, article 8, section 6, does not change the status of any electric generating plant 179.14qualifying as a taconite facility. 179.15 Sec. 15. 2008 DISTRIBUTIONS ONLY. 179.16 For distribution in 2008 only, a special fund is established to receive 11.4 cents 179.17per ton that otherwise would be allocated under Minnesota Statutes, section 298.28, 179.18subdivision 6. If sufficient funds are not available under Minnesota Statutes, section 179.19298.28, subdivision 6, to make the payments required under this section and under 179.20Minnesota Statutes, section 298.28, subdivision 6, the remaining amount needed to total 179.2111.4 cents per ton may be taken from funds available under Minnesota Statutes, section 179.22298.28, subdivision 9. If 2008 H.F. No. 1812 is enacted and includes a provision that 179.23distributes funds that would otherwise be allocated under Minnesota Statutes, section 179.24298.28, subdivision 6, in a manner different from the distribution required in this section, 179.25the distribution in this section supersedes the distribution set in 2008 H.F. No. 1812 179.26notwithstanding Minnesota Statutes, section 645.26. The following amounts are allocated 179.27to St. Louis County acting as the fiscal agent for the recipients for the following specified 179.28purposes: 179.29 (1) two cents per ton must be paid to the Hibbing Economic Development Authority 179.30to retire bonds and for economic development purposes; 179.31 (2) one cent per ton must be divided among and paid in equal shares to each of the 179.32board of St. Louis County School District No. 2142, the board of Ely School District No. 179.33696, the board of Mountain Iron-Buhl School District No. 712, and the board of Virginia 180.1School District No. 706 for each to study the potential for and impact of consolidation 180.2and streamlining the operations of their school districts; 180.3 (3) 0.25 cent per ton must be paid to the city of Grand Rapids, for industrial park 180.4work; 180.5 (4) 0.65 cent per ton must be paid to the city of Aitkin, for sewer and water for 180.6housing projects; 180.7 (5) 0.5 cent per ton must be paid to the city of Crosby, for well and water tower 180.8infrastructure; 180.9 (6) 0.5 cent per ton must be paid to the city of Two Harbors, for well and water 180.10tower infrastructure; 180.11 (7) 1.5 cents per ton must be paid to the city of Silver Bay to pay for health and 180.12safety and maintenance improvements at a former elementary school building that is 180.13currently owned by the city, to be used for economic development purposes; 180.14 (8) 1.5 cents per ton must be paid to St. Louis County to extend water and sewer 180.15lines from the city of Chisholm to the St. Louis County fairgrounds; 180.16 (9) 1.5 cents per ton must be paid to the White Community Hospital for debt 180.17restructuring; 180.18 (10) 0.5 cent per ton must be paid to the city of Keewatin for street, sewer, and 180.19water improvements; 180.20 (11) 0.5 cent per ton must be paid to the city of Calumet for street, sewer, and water 180.21improvements; and 180.22 (12) one cent per ton must be paid to Breitung township for sewer and water 180.23extensions associated with the development of a state park, provided that if a new state 180.24park is not established in Breitung township by July 1, 2009, the money provided in 180.25this clause must be transferred to the northeast Minnesota economic development fund 180.26established in Minnesota Statutes, section 298.2213. 180.27 Sec. 16. REPEALER. 180.28Minnesota Statutes 2006, section 298.405, subdivisions 2, 3, and 4, are repealed. 180.29ARTICLE 11 180.30FEDERAL UPDATE 180.31 Section 1. Minnesota Statutes 2006, section 272.02, subdivision 13, is amended to read: 180.32 Subd. 13. Emergency shelters for victims of domestic abuse. Property used in 180.33a continuous program to provide emergency shelter for victims of domestic abuse is 180.34exempt, provided the organization that owns and sponsors the shelter is exempt from 181.1federal income taxation pursuant to section 501(c)(3) of the Internal Revenue Code 181.2of 1986, as amended through December 31, 1992, notwithstanding the fact that the 181.3sponsoring organization receives funding under Section 8 of the United States Housing 181.4Act of 1937, as amended. 181.5EFFECTIVE DATE.This section is effective the day following final enactment. 181.6 Sec. 2. Minnesota Statutes 2006, section 272.02, subdivision 20, is amended to read: 181.7 Subd. 20. Transitional housing facilities. Transitional housing facilities are 181.8exempt. "Transitional housing facility" means a facility that meets the following 181.9requirements. (i) It provides temporary housing to individuals, couples, or families. (ii) 181.10It has the purpose of reuniting families and enabling parents or individuals to obtain 181.11self-sufficiency, advance their education, get job training, or become employed in jobs 181.12that provide a living wage. (iii) It provides support services such as child care, work 181.13readiness training, and career development counseling; and a self-sufficiency program 181.14with periodic monitoring of each resident's progress in completing the program's goals. 181.15(iv) It provides services to a resident of the facility for at least three months but no longer 181.16than three years, except residents enrolled in an educational or vocational institution or job 181.17training program. These residents may receive services during the time they are enrolled 181.18but in no event longer than four years. (v) It is owned and operated or under lease from a 181.19unit of government or governmental agency under a property disposition program and 181.20operated by one or more organizations exempt from federal income tax under section 181.21501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 181.221992. This exemption applies notwithstanding the fact that the sponsoring organization 181.23receives financing by a direct federal loan or federally insured loan or a loan made by the 181.24Minnesota Housing Finance Agency under the provisions of either Title II of the National 181.25Housing Act, as amended, or the Minnesota Housing Finance Agency Law of 1971, 181.26chapter 462A, or rules promulgated by the agency pursuant to it, and notwithstanding the 181.27fact that the sponsoring organization receives funding under Section 8 of the United 181.28States Housing Act of 1937, as amended. 181.29EFFECTIVE DATE.This section is effective the day following final enactment. 181.30 Sec. 3. Minnesota Statutes 2006, section 272.02, subdivision 21, is amended to read: 181.31 Subd. 21. Property used to provide computing resources to University of 181.32Minnesota. Real and personal property, including leasehold or other personal property 181.33interests, is exempt if it is owned and operated by a corporation of which more than 50 181.34percent of the total voting power of the stock of the corporation is owned collectively by: 182.1(i) the Board of Regents of the University of Minnesota, (ii) the University of Minnesota 182.2Foundation, an organization exempt from federal income taxation under section 501(c)(3) 182.3of the Internal Revenue Code of 1986, as amended through December 31, 1992, and (iii) 182.4a corporation organized under chapter 317A, which by its articles of incorporation is 182.5prohibited from providing pecuniary gain to any person or entity other than the regents 182.6of the University of Minnesota; which property is used primarily to manage or provide 182.7goods, services, or facilities utilizing or relating to large-scale advanced scientific 182.8computing resources to the regents of the University of Minnesota and others. 182.9EFFECTIVE DATE.This section is effective the day following final enactment. 182.10 Sec. 4. Minnesota Statutes 2006, section 272.02, subdivision 27, is amended to read: 182.11 Subd. 27. Superior National Forest; recreational property for use by disabled 182.12veterans. Real and personal property is exempt if it is located in the Superior National 182.13Forest, and owned or leased and operated by a nonprofit organization that is exempt 182.14from federal income taxation under section 501(c)(3) of the Internal Revenue Code of 182.151986, as amended through December 31, 1992, and primarily used to provide recreational 182.16opportunities for disabled veterans and their families. 182.17EFFECTIVE DATE.This section is effective the day following final enactment. 182.18 Sec. 5. Minnesota Statutes 2006, section 272.02, subdivision 31, is amended to read: 182.19 Subd. 31. Business incubator property. Property owned by a nonprofit charitable 182.20organization that qualifies for tax exemption under section 501(c)(3) of the Internal 182.21Revenue Code of 1986, as amended through December 31, 1997, that is intended to be 182.22used as a business incubator in a high-unemployment county, is exempt. As used in this 182.23subdivision, a "business incubator" is a facility used for the development of nonretail 182.24businesses, offering access to equipment, space, services, and advice to the tenant 182.25businesses, for the purpose of encouraging economic development, diversification, and 182.26job creation in the area served by the organization, and "high-unemployment county" is a 182.27county that had an average annual unemployment rate of 7.9 percent or greater in 1997. 182.28Property that qualifies for the exemption under this subdivision is limited to no more than 182.29two contiguous parcels and structures that do not exceed in the aggregate 40,000 square 182.30feet. This exemption expires after taxes payable in 2011. 182.31EFFECTIVE DATE.This section is effective the day following final enactment. 182.32 Sec. 6. Minnesota Statutes 2006, section 272.02, subdivision 49, is amended to read: 183.1 Subd. 49. Agricultural historical society property. Property is exempt from 183.2taxation if it is owned by a nonprofit charitable or educational organization that qualifies 183.3for exemption under section 501(c)(3) of the Internal Revenue Code of 1986, as amended 183.4through December 31, 2000, and meets the following criteria: 183.5 (1) the property is primarily used for storing and exhibiting tools, equipment, and 183.6artifacts useful in providing an understanding of local or regional agricultural history. 183.7Primary use is determined each year based on the number of days the property is used 183.8solely for storage and exhibition purposes; 183.9 (2) the property is limited to a maximum of 20 acres per owner per county, but 183.10includes the land and any taxable structures, fixtures, and equipment on the land; 183.11 (3) the property is not used for a revenue-producing activity for more than ten days 183.12in each calendar year; and 183.13 (4) the property is not used for residential purposes on either a temporary or 183.14permanent basis. 183.15EFFECTIVE DATE.This section is effective the day following final enactment. 183.16 Sec. 7. Minnesota Statutes 2006, section 272.03, subdivision 3, is amended to read: 183.17 Subd. 3. Construction of terms. For the purposes of chapters 270 to 284, unless a 183.18different meaning is indicated by the context, the words, phrases, and terms defined in 183.19subdivisions 4 to 11 shall this section have the meanings given them. 183.20EFFECTIVE DATE.This section is effective the day following final enactment. 183.21 Sec. 8. Minnesota Statutes 2006, section 272.03, is amended by adding a subdivision 183.22to read: 183.23 Subd. 13. Internal Revenue Code. Unless specifically defined otherwise, "Internal 183.24Revenue Code" means the Internal Revenue Code as defined in section 289A.02, 183.25subdivision 7. 183.26EFFECTIVE DATE.This section is effective the day following final enactment. 183.27 Sec. 9. [273.105] INTERNAL REVENUE CODE. 183.28 Unless specifically defined otherwise, for purposes of this chapter, "Internal Revenue 183.29Code" means the Internal Revenue Code as defined in section 289A.02, subdivision 7. 183.30EFFECTIVE DATE.This section is effective the day following final enactment. 183.31 Sec. 10. Minnesota Statutes 2006, section 273.11, subdivision 8, is amended to read: 184.1 Subd. 8. Limited equity cooperative apartments. For the purposes of this 184.2subdivision, the terms defined in this subdivision have the meanings given them. 184.3 A "limited equity cooperative" is a corporation organized under chapter 308A or 184.4308B, which has as its primary purpose the provision of housing and related services to 184.5its members which meets one of the following criteria with respect to the income of its 184.6members: (1) a minimum of 75 percent of members must have incomes at or less than 184.790 percent of area median income, (2) a minimum of 40 percent of members must have 184.8incomes at or less than 60 percent of area median income, or (3) a minimum of 20 percent 184.9of members must have incomes at or less than 50 percent of area median income. For 184.10purposes of this clause, "member income" shall mean the income of a member existing at 184.11the time the member acquires cooperative membership, and median income shall mean 184.12the St. Paul-Minneapolis metropolitan area median income as determined by the United 184.13States Department of Housing and Urban Development. It must also meet the following 184.14requirements: 184.15 (a) The articles of incorporation set the sale price of occupancy entitling cooperative 184.16shares or memberships at no more than a transfer value determined as provided in the 184.17articles. That value may not exceed the sum of the following: 184.18 (1) the consideration paid for the membership or shares by the first occupant of the 184.19unit, as shown in the records of the corporation; 184.20 (2) the fair market value, as shown in the records of the corporation, of any 184.21improvements to the real property that were installed at the sole expense of the member 184.22with the prior approval of the board of directors; 184.23 (3) accumulated interest, or an inflation allowance not to exceed the greater of a ten 184.24percent annual noncompounded increase on the consideration paid for the membership or 184.25share by the first occupant of the unit, or the amount that would have been paid on that 184.26consideration if interest had been paid on it at the rate of the percentage increase in the 184.27revised Consumer Price Index for All Urban Consumers for the Minneapolis-St. Paul 184.28metropolitan area prepared by the United States Department of Labor, provided that the 184.29amount determined pursuant to this clause may not exceed $500 for each year or fraction 184.30of a year the membership or share was owned; plus 184.31 (4) real property capital contributions shown in the records of the corporation to 184.32have been paid by the transferor member and previous holders of the same membership, 184.33or of separate memberships that had entitled occupancy to the unit of the member 184.34involved. These contributions include contributions to a corporate reserve account the 184.35use of which is restricted to real property improvements or acquisitions, contributions to 184.36the corporation which are used for real property improvements or acquisitions, and the 185.1amount of principal amortized by the corporation on its indebtedness due to the financing 185.2of real property acquisition or improvement or the averaging of principal paid by the 185.3corporation over the term of its real property-related indebtedness. 185.4 (b) The articles of incorporation require that the board of directors limit the purchase 185.5price of stock or membership interests for new member-occupants or resident shareholders 185.6to an amount which does not exceed the transfer value for the membership or stock as 185.7defined in clause (a). 185.8 (c) The articles of incorporation require that the total distribution out of capital to a 185.9member shall not exceed that transfer value. 185.10 (d) The articles of incorporation require that upon liquidation of the corporation any 185.11assets remaining after retirement of corporate debts and distribution to members will 185.12be conveyed to a charitable organization described in section 501(c)(3) of the Internal 185.13Revenue Code of 1986, as amended through December 31, 1992, or a public agency. 185.14 A "limited equity cooperative apartment" is a dwelling unit owned by a limited 185.15equity cooperative. 185.16 "Occupancy entitling cooperative share or membership" is the ownership interest 185.17in a cooperative organization which entitles the holder to an exclusive right to occupy a 185.18dwelling unit owned or leased by the cooperative. 185.19 For purposes of taxation, the assessor shall value a unit owned by a limited equity 185.20cooperative at the lesser of its market value or the value determined by capitalizing the net 185.21operating income of a comparable apartment operated on a rental basis at the capitalization 185.22rate used in valuing comparable buildings that are not limited equity cooperatives. If a 185.23cooperative fails to operate in accordance with the provisions of clauses (a) to (d), the 185.24property shall be subject to additional property taxes in the amount of the difference 185.25between the taxes determined in accordance with this subdivision for the last ten years that 185.26the property had been assessed pursuant to this subdivision and the amount that would 185.27have been paid if the provisions of this subdivision had not applied to it. The additional 185.28taxes, plus interest at the rate specified in section 549.09, shall be extended against the 185.29property on the tax list for the current year. 185.30EFFECTIVE DATE.This section is effective the day following final enactment. 185.31 Sec. 11. Minnesota Statutes 2006, section 273.124, subdivision 6, is amended to read: 185.32 Subd. 6. Leasehold cooperatives. When one or more dwellings or one or more 185.33buildings which each contain several dwelling units is owned by a nonprofit corporation 185.34subject to the provisions of chapter 317A and qualifying under section 501(c)(3) or 185.35501(c)(4) of the Internal Revenue Code of 1986, as amended through December 31, 186.11990, or a limited partnership which corporation or partnership operates the property in 186.2conjunction with a cooperative association, and has received public financing, homestead 186.3treatment may be claimed by the cooperative association on behalf of the members of 186.4the cooperative for each dwelling unit occupied by a member of the cooperative. The 186.5cooperative association must provide the assessor with the Social Security numbers of 186.6those members. To qualify for the treatment provided by this subdivision, the following 186.7conditions must be met: 186.8 (a) the cooperative association must be organized under chapter 308A or 308B and 186.9all voting members of the board of directors must be resident tenants of the cooperative 186.10and must be elected by the resident tenants of the cooperative; 186.11 (b) the cooperative association must have a lease for occupancy of the property for a 186.12term of at least 20 years, which permits the cooperative association, while not in default on 186.13the lease, to participate materially in the management of the property, including material 186.14participation in establishing budgets, setting rent levels, and hiring and supervising a 186.15management agent; 186.16 (c) to the extent permitted under state or federal law, the cooperative association 186.17must have a right under a written agreement with the owner to purchase the property if the 186.18owner proposes to sell it; if the cooperative association does not purchase the property it is 186.19offered for sale, the owner may not subsequently sell the property to another purchaser at 186.20a price lower than the price at which it was offered for sale to the cooperative association 186.21unless the cooperative association approves the sale; 186.22 (d) a minimum of 40 percent of the cooperative association's members must have 186.23incomes at or less than 60 percent of area median gross income as determined by the 186.24United States Secretary of Housing and Urban Development under section 142(d)(2)(B) 186.25of the Internal Revenue Code of 1986, as amended through December 31, 1991. For 186.26purposes of this clause, "member income" means the income of a member existing at the 186.27time the member acquires cooperative membership; 186.28 (e) if a limited partnership owns the property, it must include as the managing 186.29general partner a nonprofit organization operating under the provisions of chapter 317A 186.30and qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, 186.31as amended through December 31, 1990, and the limited partnership agreement must 186.32provide that the managing general partner have sufficient powers so that it materially 186.33participates in the management and control of the limited partnership; 186.34 (f) prior to becoming a member of a leasehold cooperative described in this 186.35subdivision, a person must have received notice that (1) describes leasehold cooperative 186.36property in plain language, including but not limited to the effects of classification 187.1under this subdivision on rents, property taxes and tax credits or refunds, and operating 187.2expenses, and (2) states that copies of the articles of incorporation and bylaws of the 187.3cooperative association, the lease between the owner and the cooperative association, a 187.4sample sublease between the cooperative association and a tenant, and, if the owner is a 187.5partnership, a copy of the limited partnership agreement, can be obtained upon written 187.6request at no charge from the owner, and the owner must send or deliver the materials 187.7within seven days after receiving any request; 187.8 (g) if a dwelling unit of a building was occupied on the 60th day prior to the date on 187.9which the unit became leasehold cooperative property described in this subdivision, the 187.10notice described in paragraph (f) must have been sent by first class mail to the occupant of 187.11the unit at least 60 days prior to the date on which the unit became leasehold cooperative 187.12property. For purposes of the notice under this paragraph, the copies of the documents 187.13referred to in paragraph (f) may be in proposed version, provided that any subsequent 187.14material alteration of those documents made after the occupant has requested a copy 187.15shall be disclosed to any occupant who has requested a copy of the document. Copies of 187.16the articles of incorporation and certificate of limited partnership shall be filed with the 187.17secretary of state after the expiration of the 60-day period unless the change to leasehold 187.18cooperative status does not proceed; 187.19 (h) the county attorney of the county in which the property is located must certify to 187.20the assessor that the property meets the requirements of this subdivision; 187.21 (i) the public financing received must be from at least one of the following sources: 187.22 (1) tax increment financing proceeds used for the acquisition or rehabilitation of the 187.23building or interest rate write-downs relating to the acquisition of the building; 187.24 (2) government issued bonds exempt from taxes under section 103 of the Internal 187.25Revenue Code of 1986, as amended through December 31, 1991, the proceeds of which 187.26are used for the acquisition or rehabilitation of the building; 187.27 (3) programs under section 221(d)(3), 202, or 236, of Title II of the National 187.28Housing Act; 187.29 (4) rental housing program funds under Section 8 of the United States Housing Act 187.30of 1937, as amended, or the market rate family graduated payment mortgage program 187.31funds administered by the Minnesota Housing Finance Agency that are used for the 187.32acquisition or rehabilitation of the building; 187.33 (5) low-income housing credit under section 42 of the Internal Revenue Code of 187.341986, as amended through December 31, 1991; 187.35 (6) public financing provided by a local government used for the acquisition or 187.36rehabilitation of the building, including grants or loans from (i) federal community 188.1development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued 188.2under chapter 474A; or 188.3 (7) other rental housing program funds provided by the Minnesota Housing Finance 188.4Agency for the acquisition or rehabilitation of the building; 188.5 (j) at the time of the initial request for homestead classification or of any transfer of 188.6ownership of the property, the governing body of the municipality in which the property is 188.7located must hold a public hearing and make the following findings: 188.8 (1) that the granting of the homestead treatment of the apartment's units will 188.9facilitate safe, clean, affordable housing for the cooperative members that would otherwise 188.10not be available absent the homestead designation; 188.11 (2) that the owner has presented information satisfactory to the governing body 188.12showing that the savings garnered from the homestead designation of the units will be 188.13used to reduce tenant's rents or provide a level of furnishing or maintenance not possible 188.14absent the designation; and 188.15 (3) that the requirements of paragraphs (b), (d), and (i) have been met. 188.16 Homestead treatment must be afforded to units occupied by members of the 188.17cooperative association and the units must be assessed as provided in subdivision 3, 188.18provided that any unit not so occupied shall be classified and assessed pursuant to the 188.19appropriate class. No more than three acres of land may, for assessment purposes, 188.20be included with each dwelling unit that qualifies for homestead treatment under this 188.21subdivision. 188.22 When dwelling units no longer qualify under this subdivision, the current owner 188.23must notify the assessor within 60 days. Failure to notify the assessor within 60 days shall 188.24result in the loss of benefits under this subdivision for taxes payable in the year that the 188.25failure is discovered. For these purposes, "benefits under this subdivision" means the 188.26difference in the net tax capacity of the units which no longer qualify as computed under 188.27this subdivision and as computed under the otherwise applicable law, times the local tax 188.28rate applicable to the building for that taxes payable year. Upon discovery of a failure to 188.29notify, the assessor shall inform the auditor of the difference in net tax capacity for the 188.30building or buildings in which units no longer qualify, and the auditor shall calculate the 188.31benefits under this subdivision. Such amount, plus a penalty equal to 100 percent of that 188.32amount, shall then be demanded of the building's owner. The property owner may appeal 188.33the county's determination by serving copies of a petition for review with county officials 188.34as provided in section 278.01 and filing a proof of service as provided in section 278.01 188.35with the Minnesota Tax Court within 60 days of the date of the notice from the county. 188.36The appeal shall be governed by the Tax Court procedures provided in chapter 271, for 189.1cases relating to the tax laws as defined in section 271.01, subdivision 5; disregarding 189.2sections 273.125, subdivision 5, and 278.03, but including section 278.05, subdivision 2. 189.3If the amount of the benefits under this subdivision and penalty are not paid within 60 189.4days, and if no appeal has been filed, the county auditor shall certify the amount of the 189.5benefit and penalty to the succeeding year's tax list to be collected as part of the property 189.6taxes on the affected buildings. 189.7EFFECTIVE DATE.This section is effective the day following final enactment. 189.8 Sec. 12. Minnesota Statutes 2006, section 273.128, subdivision 1, as amended by Laws 189.92008, chapter 154, article 2, section 10, is amended to read: 189.10 Subdivision 1. Requirement. Low-income rental property classified as class 4d 189.11under section 273.13, subdivision 25, is entitled to valuation under this section if at least 20 189.12percent of the units in the rental housing property meet any of the following qualifications: 189.13 (1) the units are subject to a housing assistance payments contract under Section 8 189.14of the United States Housing Act of 1937, as amended; 189.15 (2) the units are rent-restricted and income-restricted units of a qualified low-income 189.16housing project receiving tax credits under section 42(g) of the Internal Revenue Code 189.17of 1986, as amended; 189.18 (3) the units are financed by the Rural Housing Service of the United States 189.19Department of Agriculture and receive payments under the rental assistance program 189.20pursuant to section 521(a) of the Housing Act of 1949, as amended; or 189.21 (4) the units are subject to rent and income restrictions under the terms of financial 189.22assistance provided to the rental housing property by the federal government or the 189.23state of Minnesota, or a local unit of government, as evidenced by a document recorded 189.24against the property. 189.25 The restrictions must require assisted units to be occupied by residents whose 189.26household income at the time of initial occupancy does not exceed 60 percent of the 189.27greater of area or state median income, adjusted for family size, as determined by the 189.28United States Department of Housing and Urban Development. The restriction must also 189.29require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of 189.30area or state median income, adjusted for family size, as determined by the United States 189.31Department of Housing and Urban Development. 189.32EFFECTIVE DATE.This section is effective the day following final enactment. 189.33 Sec. 13. Minnesota Statutes 2006, section 273.13, subdivision 25, as amended by Laws 189.342008, chapter 154, article 2, section 13, is amended to read: 190.1 Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 190.2units and used or held for use by the owner or by the tenants or lessees of the owner 190.3as a residence for rental periods of 30 days or more, excluding property qualifying for 190.4class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 190.5than hospitals exempt under section 272.02, and contiguous property used for hospital 190.6purposes, without regard to whether the property has been platted or subdivided. The 190.7market value of class 4a property has a class rate of 1.25 percent. 190.8 (b) Class 4b includes: 190.9 (1) residential real estate containing less than four units that does not qualify as class 190.104bb, other than seasonal residential recreational property; 190.11 (2) manufactured homes not classified under any other provision; 190.12 (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 190.13farm classified under subdivision 23, paragraph (b) containing two or three units; and 190.14 (4) unimproved property that is classified residential as determined under subdivision 190.1533. 190.16 The market value of class 4b property has a class rate of 1.25 percent. 190.17 (c) Class 4bb includes: 190.18 (1) nonhomestead residential real estate containing one unit, other than seasonal 190.19residential recreational property; and 190.20 (2) a single family dwelling, garage, and surrounding one acre of property on a 190.21nonhomestead farm classified under subdivision 23, paragraph (b). 190.22 Class 4bb property has the same class rates as class 1a property under subdivision 22. 190.23 Property that has been classified as seasonal residential recreational property at 190.24any time during which it has been owned by the current owner or spouse of the current 190.25owner does not qualify for class 4bb. 190.26 (d) Class 4c property includes: 190.27 (1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph 190.28(b), clause (1), real and personal property devoted to temporary and seasonal residential 190.29occupancy for recreation purposes, including real and personal property devoted to 190.30temporary and seasonal residential occupancy for recreation purposes and not devoted to 190.31commercial purposes for more than 250 days in the year preceding the year of assessment. 190.32For purposes of this clause, property is devoted to a commercial purpose on a specific 190.33day if any portion of the property is used for residential occupancy, and a fee is charged 190.34for residential occupancy. Class 4c property must contain three or more rental units. A 190.35"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual 190.36camping site equipped with water and electrical hookups for recreational vehicles. Class 191.14c property must provide recreational activities such as renting ice fishing houses, boats 191.2and motors, snowmobiles, downhill or cross-country ski equipment; provide marina 191.3services, launch services, or guide services; or sell bait and fishing tackle. A camping 191.4pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c 191.5regardless of the term of the rental agreement, as long as the use of the camping pad 191.6does not exceed 250 days. In order for a property to be classified as class 4c, seasonal 191.7residential recreational for commercial purposes, at least 40 percent of the annual gross 191.8lodging receipts related to the property must be from business conducted during 90 191.9consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests 191.10during the year must be for periods of at least two consecutive nights; or (ii) at least 20 191.11percent of the annual gross receipts must be from charges for rental of fish houses, boats 191.12and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina 191.13services, launch services, and guide services, or the sale of bait and fishing tackle. For 191.14purposes of this determination, a paid booking of five or more nights shall be counted as 191.15two bookings. Class 4c also includes commercial use real property used exclusively 191.16for recreational purposes in conjunction with class 4c property devoted to temporary 191.17and seasonal residential occupancy for recreational purposes, up to a total of two acres, 191.18provided the property is not devoted to commercial recreational use for more than 250 191.19days in the year preceding the year of assessment and is located within two miles of the 191.20class 4c property with which it is used. Owners of real and personal property devoted 191.21to temporary and seasonal residential occupancy for recreation purposes and all or a 191.22portion of which was devoted to commercial purposes for not more than 250 days in the 191.23year preceding the year of assessment desiring classification as class 4c, must submit a 191.24declaration to the assessor designating the cabins or units occupied for 250 days or less in 191.25the year preceding the year of assessment by January 15 of the assessment year. Those 191.26cabins or units and a proportionate share of the land on which they are located must be 191.27designated class 4c as otherwise provided. The remainder of the cabins or units and 191.28a proportionate share of the land on which they are located will be designated as class 191.293a. The owner of property desiring designation as class 4c property must provide guest 191.30registers or other records demonstrating that the units for which class 4c designation is 191.31sought were not occupied for more than 250 days in the year preceding the assessment if 191.32so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, 191.33(4) conference center or meeting room, and (5) other nonresidential facility operated on a 191.34commercial basis not directly related to temporary and seasonal residential occupancy for 191.35recreation purposes does not qualify for class 4c; 191.36 (2) qualified property used as a golf course if: 192.1 (i) it is open to the public on a daily fee basis. It may charge membership fees or 192.2dues, but a membership fee may not be required in order to use the property for golfing, 192.3and its green fees for golfing must be comparable to green fees typically charged by 192.4municipal courses; and 192.5 (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 192.6 A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 192.7with the golf course is classified as class 3a property; 192.8 (3) real property up to a maximum of three acres of land owned and used by a 192.9nonprofit community service oriented organization and that is not used for residential 192.10purposes on either a temporary or permanent basis, qualifies for class 4c provided that 192.11it meets either of the following: 192.12 (i) the property is not used for a revenue-producing activity for more than six days 192.13in the calendar year preceding the year of assessment; or 192.14 (ii) the organization makes annual charitable contributions and donations at least 192.15equal to the property's previous year's property taxes and the property is allowed to be 192.16used for public and community meetings or events for no charge, as appropriate to the 192.17size of the facility. 192.18 For purposes of this clause, 192.19 (A) "charitable contributions and donations" has the same meaning as lawful 192.20gambling purposes under section 349.12, subdivision 25, excluding those purposes 192.21relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; 192.22 (B) "property taxes" excludes the state general tax; 192.23 (C) a "nonprofit community service oriented organization" means any corporation, 192.24society, association, foundation, or institution organized and operated exclusively for 192.25charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 192.26federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue 192.27Code of 1986, as amended through December 31, 1990; and 192.28 (D) "revenue-producing activities" shall include but not be limited to property or that 192.29portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 192.30liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 192.31alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 192.32insurance business, or office or other space leased or rented to a lessee who conducts a 192.33for-profit enterprise on the premises. 192.34Any portion of the property qualifying under item (i) which is used for revenue-producing 192.35activities for more than six days in the calendar year preceding the year of assessment 192.36shall be assessed as class 3a. The use of the property for social events open exclusively 193.1to members and their guests for periods of less than 24 hours, when an admission is 193.2not charged nor any revenues are received by the organization shall not be considered a 193.3revenue-producing activity. 193.4 The organization shall maintain records of its charitable contributions and donations 193.5and of public meetings and events held on the property and make them available upon 193.6request any time to the assessor to ensure eligibility. An organization meeting the 193.7requirement under item (ii) must file an application by May 1 with the assessor for 193.8eligibility for the current year's assessment. The commissioner shall prescribe a uniform 193.9application form and instructions; 193.10 (4) postsecondary student housing of not more than one acre of land that is owned by 193.11a nonprofit corporation organized under chapter 317A and is used exclusively by a student 193.12cooperative, sorority, or fraternity for on-campus housing or housing located within two 193.13miles of the border of a college campus; 193.14 (5) manufactured home parks as defined in section 327.14, subdivision 3; 193.15 (6) real property that is actively and exclusively devoted to indoor fitness, health, 193.16social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 193.17and is located within the metropolitan area as defined in section 473.121, subdivision 2; 193.18 (7) a leased or privately owned noncommercial aircraft storage hangar not exempt 193.19under section 272.01, subdivision 2, and the land on which it is located, provided that: 193.20 (i) the land is on an airport owned or operated by a city, town, county, Metropolitan 193.21Airports Commission, or group thereof; and 193.22 (ii) the land lease, or any ordinance or signed agreement restricting the use of the 193.23leased premise, prohibits commercial activity performed at the hangar. 193.24 If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 193.25be filed by the new owner with the assessor of the county where the property is located 193.26within 60 days of the sale; 193.27 (8) a privately owned noncommercial aircraft storage hangar not exempt under 193.28section 272.01, subdivision 2, and the land on which it is located, provided that: 193.29 (i) the land abuts a public airport; and 193.30 (ii) the owner of the aircraft storage hangar provides the assessor with a signed 193.31agreement restricting the use of the premises, prohibiting commercial use or activity 193.32performed at the hangar; and 193.33 (9) residential real estate, a portion of which is used by the owner for homestead 193.34purposes, and that is also a place of lodging, if all of the following criteria are met: 193.35 (i) rooms are provided for rent to transient guests that generally stay for periods 193.36of 14 or fewer days; 194.1 (ii) meals are provided to persons who rent rooms, the cost of which is incorporated 194.2in the basic room rate; 194.3 (iii) meals are not provided to the general public except for special events on fewer 194.4than seven days in the calendar year preceding the year of the assessment; and 194.5 (iv) the owner is the operator of the property. 194.6The market value subject to the 4c classification under this clause is limited to five rental 194.7units. Any rental units on the property in excess of five, must be valued and assessed as 194.8class 3a. The portion of the property used for purposes of a homestead by the owner must 194.9be classified as class 1a property under subdivision 22. 194.10 Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 194.11parcel of seasonal residential recreational property not used for commercial purposes has 194.12the same class rates as class 4bb property, (ii) manufactured home parks assessed under 194.13clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 194.14residential recreational property has a class rate of one percent for the first $500,000 of 194.15market value, and 1.25 percent for the remaining market value, (iv) the market value of 194.16property described in clause (4) has a class rate of one percent, (v) the market value of 194.17property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that 194.18portion of the market value of property in clause (9) qualifying for class 4c property 194.19has a class rate of 1.25 percent. 194.20 (e) Class 4d property is qualifying low-income rental housing certified to the assessor 194.21by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 194.22of the units in the building qualify as low-income rental housing units as certified under 194.23section 273.128, subdivision 3, only the proportion of qualifying units to the total number 194.24of units in the building qualify for class 4d. The remaining portion of the building shall be 194.25classified by the assessor based upon its use. Class 4d also includes the same proportion of 194.26land as the qualifying low-income rental housing units are to the total units in the building. 194.27For all properties qualifying as class 4d, the market value determined by the assessor must 194.28be based on the normal approach to value using normal unrestricted rents. 194.29 Class 4d property has a class rate of 0.75 percent. 194.30EFFECTIVE DATE.This section is effective the day following final enactment. 194.31 Sec. 14. Minnesota Statutes 2006, section 287.20, subdivision 3a, is amended to read: 194.32 Subd. 3a. Designated transfer. "Designated transfer" means any of the following: 194.33 (1) a transfer between (i) an entity owned by a sole owner, and (ii) that sole owner; 194.34 (2) a transfer between (i) an entity in which a husband, a wife, or both are the sole 194.35owners, and (ii) the husband, wife, or both; 195.1 (3) a transfer between (i) an entity with multiple co-owners, and (ii) all of the 195.2co-owners, so long as each of the co-owners maintains the same percentage ownership 195.3interest in the transferred real property, whether directly or through ownership of a 195.4percentage of the entity; 195.5 (4) a transfer between (i) a revocable trust, and (ii) the grantor or grantors of the 195.6revocable trust; or 195.7 (5) a transfer of substantially all of the assets of one or more entities pursuant to a 195.8reorganization, as defined in section 287.20, subdivision 9. 195.9For purposes of this definition of designated transfer, an interest in an entity that is 195.10owned, directly or indirectly, by or for another entity shall be considered as being owned 195.11proportionately by or for the owners of the other entity under provisions similar to those 195.12of section 267(c)(1) and (5) of the Internal Revenue Code of 1986, as amended through 195.13December 31, 2004. 195.14EFFECTIVE DATE.This section is effective the day following final enactment. 195.15 Sec. 15. Minnesota Statutes 2006, section 287.20, subdivision 9, is amended to read: 195.16 Subd. 9. Reorganization. "Reorganization" means the transfer of substantially all 195.17of the assets of a corporation, a limited liability company, or a partnership not in the usual 195.18or regular course of business if at the time of the transfer the transfer qualifies as: (i) a 195.19corporate reorganization under section 368(a) of the Internal Revenue Code of 1986, as 195.20amended through December 31, 2004; or (ii) a transfer from a partnership to another 195.21partnership when the transferee is treated as a continuation of the transferor under section 195.22708 of the Internal Revenue Code of 1986, as amended through December 31, 2004. 195.23 Sec. 16. Minnesota Statutes 2006, section 287.20, is amended by adding a subdivision 195.24to read: 195.25 Subd. 10. Internal Revenue Code. Unless specifically defined otherwise, "Internal 195.26Revenue Code" means the Internal Revenue Code as defined in section 289A.02, 195.27subdivision 7. 195.28EFFECTIVE DATE.This section is effective the day following final enactment. 195.29 Sec. 17. Minnesota Statutes 2006, section 295.53, subdivision 4a, is amended to read: 195.30 Subd. 4a. Credit for research. (a) In addition to the exemptions allowed under 195.31subdivision 1, a hospital or health care provider may claim an annual credit against the 195.32total amount of tax, if any, the hospital or health care provider owes for that calendar year 195.33under sections 295.50 to 295.57. The credit shall equal 2.5 percent of revenues for patient 196.1services used to fund expenditures for qualifying research conducted by an allowable 196.2research program. The amount of the credit shall not exceed the tax liability of the hospital 196.3or health care provider under sections 295.50 to 295.57. 196.4 (b) For purposes of this subdivision, the following requirements apply: 196.5 (1) expenditures must be for program costs of qualifying research conducted by 196.6an allowable research program; 196.7 (2) an allowable research program must be a formal program of medical and health 196.8care research conducted by an entity which is exempt under section 501(c)(3) of the 196.9Internal Revenue Code of 1986 as defined in section 289A.02, subdivision 7, or is owned 196.10and operated under authority of a governmental unit; 196.11 (3) qualifying research must: 196.12 (A) be approved in writing by the governing body of the hospital or health care 196.13provider which is taking the deduction under this subdivision; 196.14 (B) have as its purpose the development of new knowledge in basic or applied 196.15science relating to the diagnosis and treatment of conditions affecting the human body; 196.16 (C) be subject to review by individuals with expertise in the subject matter of the 196.17proposed study but who have no financial interest in the proposed study and are not 196.18involved in the conduct of the proposed study; and 196.19 (D) be subject to review and supervision by an institutional review board operating 196.20in conformity with federal regulations if the research involves human subjects or 196.21an institutional animal care and use committee operating in conformity with federal 196.22regulations if the research involves animal subjects. Research expenses are not exempt if 196.23the study is a routine evaluation of health care methods or products used in a particular 196.24setting conducted for the purpose of making a management decision. Costs of clinical 196.25research activities paid directly for the benefit of an individual patient are excluded from 196.26this exemption. Basic research in fields including biochemistry, molecular biology, and 196.27physiology are also included if such programs are subject to a peer review process. 196.28 (c) No credit shall be allowed under this subdivision for any revenue received by the 196.29hospital or health care provider in the form of a grant, gift, or otherwise, whether from a 196.30government or nongovernment source, on which the tax liability under section 295.52 is 196.31not imposed. 196.32 (d) The taxpayer shall apply for the credit under this section on the annual return 196.33under section 295.55, subdivision 5. 196.34 (e) Beginning September 1, 2001, if the actual or estimated amount paid under 196.35this section for the calendar year exceeds $2,500,000, the commissioner of finance shall 196.36determine the rate of the research credit for the following calendar year to the nearest 197.1one-half percent so that refunds paid under this section will most closely equal $2,500,000. 197.2The commissioner of finance shall publish in the State Register by October 1 of each year 197.3the rate of the credit for the following calendar year. A determination under this section 197.4is not subject to the rulemaking provisions of chapter 14. 197.5EFFECTIVE DATE.This section is effective the day following final enactment. 197.6 Sec. 18. Minnesota Statutes 2006, section 296A.16, subdivision 2, is amended to read: 197.7 Subd. 2. Fuel used in other vehicle; claim for refund. Any person who buys and 197.8uses gasoline for a qualifying purpose other than use in motor vehicles, snowmobiles 197.9except as provided in clause (2), or motorboats, or special fuel for a qualifying purpose 197.10other than use in licensed motor vehicles, and who paid the tax directly or indirectly 197.11through the amount of the tax being included in the price of the gasoline or special fuel, or 197.12otherwise, shall be reimbursed and repaid the amount of the tax paid upon filing with the 197.13commissioner a claim for refund in the form and manner prescribed by the commissioner, 197.14and containing the information the commissioner shall require. By signing any such claim 197.15which is false or fraudulent, the applicant shall be subject to the penalties provided in this 197.16chapter for knowingly making a false claim. The claim shall set forth the total amount 197.17of the gasoline so purchased and used by the applicant other than in motor vehicles, or 197.18special fuel purchased and used by the applicant other than in licensed motor vehicles, 197.19and shall state when and for what purpose it was used. When a claim contains an error 197.20in computation or preparation, the commissioner is authorized to adjust the claim in 197.21accordance with the evidence shown on the claim or other information available to the 197.22commissioner. The commissioner, on being satisfied that the claimant is entitled to the 197.23payments, shall approve the claim and transmit it to the commissioner of finance. The 197.24words "gasoline" or "special fuel" as used in this subdivision do not include aviation 197.25gasoline or special fuel for aircraft. Gasoline or special fuel bought and used for a 197.26"qualifying purpose" means: 197.27 (1) Gasoline or special fuel used in carrying on a trade or business, used on a farm 197.28situated in Minnesota, and used for a farming purpose. "Farm" and "farming purpose" 197.29have the meanings given them in section 6420(c)(2), (3), and (4) of the Internal Revenue 197.30Code of 1986, as amended through December 31, 1997 as defined in section 289A.02, 197.31subdivision 7. 197.32 (2) Gasoline or special fuel used for off-highway business use. 197.33 (i) "Off-highway business use" means any use off the public highway by a person in 197.34that person's trade, business, or activity for the production of income. 198.1 (ii) Off-highway business use includes use of a passenger snowmobile off the public 198.2highways as part of the operations of a resort as defined in section 157.15, subdivision 11; 198.3and use of gasoline or special fuel to operate a power takeoff unit on a vehicle, but not 198.4including fuel consumed during idling time. 198.5 (iii) Off-highway business use does not include use as a fuel in a motor vehicle 198.6which, at the time of use, is registered or is required to be registered for highway use under 198.7the laws of any state or foreign country; or use of a licensed motor vehicle fuel tank in lieu 198.8of a separate storage tank for storing fuel to be used for a qualifying purpose, as defined in 198.9this section. Fuel purchased to be used for a qualifying purpose cannot be placed in the 198.10fuel tank of a licensed motor vehicle and must be stored in a separate supply tank. 198.11 (3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles, 198.12manufactured in Minnesota, and shipped by interstate carrier to destinations in other 198.13states or foreign countries. 198.14EFFECTIVE DATE.This section is effective the day following final enactment. 198.15 Sec. 19. Minnesota Statutes 2006, section 297A.61, subdivision 22, is amended to read: 198.16 Subd. 22. Internal Revenue Code. Unless specifically provided otherwise, 198.17"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through 198.18December 31, 2000 as defined in section 289A.02, subdivision 7. 198.19EFFECTIVE DATE.This section is effective the day following final enactment. 198.20 Sec. 20. Minnesota Statutes 2006, section 297B.01, subdivision 7, is amended to read: 198.21 Subd. 7. Sale, sells, selling, purchase, purchased, or acquired. (a) "Sale," "sells," 198.22"selling," "purchase," "purchased," or "acquired" means any transfer of title of any motor 198.23vehicle, whether absolutely or conditionally, for a consideration in money or by exchange 198.24or barter for any purpose other than resale in the regular course of business. 198.25 (b) Any motor vehicle utilized by the owner only by leasing such vehicle to others 198.26or by holding it in an effort to so lease it, and which is put to no other use by the owner 198.27other than resale after such lease or effort to lease, shall be considered property purchased 198.28for resale. 198.29 (c) The terms also shall include any transfer of title or ownership of a motor vehicle 198.30by other means, for or without consideration, except that these terms shall not include: 198.31 (1) the acquisition of a motor vehicle by inheritance from or by bequest of, a 198.32decedent who owned it; 199.1 (2) the transfer of a motor vehicle which was previously licensed in the names of 199.2two or more joint tenants and subsequently transferred without monetary consideration to 199.3one or more of the joint tenants; 199.4 (3) the transfer of a motor vehicle by way of gift between individuals, or gift 199.5from a limited used vehicle dealer licensed under section 168.27, subdivision 4a, to an 199.6individual, when the transfer is with no monetary or other consideration or expectation 199.7of consideration and the parties to the transfer submit an affidavit to that effect at the 199.8time the title transfer is recorded; 199.9 (4) the voluntary or involuntary transfer of a motor vehicle between a husband and 199.10wife in a divorce proceeding; or 199.11 (5) the transfer of a motor vehicle by way of a gift to an organization that is exempt 199.12from federal income taxation under section 501(c)(3) of the Internal Revenue Code, as 199.13amended through December 31, 1996, when the motor vehicle will be used exclusively for 199.14religious, charitable, or educational purposes. 199.15EFFECTIVE DATE.This section is effective the day following final enactment. 199.16 Sec. 21. Minnesota Statutes 2006, section 297B.01, is amended by adding a 199.17subdivision to read: 199.18 Subd. 10. Internal Revenue Code. Unless specifically defined otherwise, "Internal 199.19Revenue Code" means the Internal Revenue Code as defined in section 289A.02, 199.20subdivision 7. 199.21EFFECTIVE DATE.This section is effective the day following final enactment. 199.22 Sec. 22. Minnesota Statutes 2006, section 297B.03, is amended to read: 199.23297B.03 EXEMPTIONS. 199.24 There is specifically exempted from the provisions of this chapter and from 199.25computation of the amount of tax imposed by it the following: 199.26 (1) purchase or use, including use under a lease purchase agreement or installment 199.27sales contract made pursuant to section 465.71, of any motor vehicle by the United States 199.28and its agencies and instrumentalities and by any person described in and subject to the 199.29conditions provided in section 297A.67, subdivision 11; 199.30 (2) purchase or use of any motor vehicle by any person who was a resident of 199.31another state or country at the time of the purchase and who subsequently becomes a 199.32resident of Minnesota, provided the purchase occurred more than 60 days prior to the date 199.33such person began residing in the state of Minnesota and the motor vehicle was registered 199.34in the person's name in the other state or country; 200.1 (3) purchase or use of any motor vehicle by any person making a valid election to be 200.2taxed under the provisions of section 297A.90; 200.3 (4) purchase or use of any motor vehicle previously registered in the state of 200.4Minnesota when such transfer constitutes a transfer within the meaning of section 118, 200.5331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal 200.6Revenue Code of 1986, as amended through December 31, 1999; 200.7 (5) purchase or use of any vehicle owned by a resident of another state and leased 200.8to a Minnesota-based private or for-hire carrier for regular use in the transportation of 200.9persons or property in interstate commerce provided the vehicle is titled in the state of 200.10the owner or secured party, and that state does not impose a sales tax or sales tax on 200.11motor vehicles used in interstate commerce; 200.12 (6) purchase or use of a motor vehicle by a private nonprofit or public educational 200.13institution for use as an instructional aid in automotive training programs operated by the 200.14institution. "Automotive training programs" includes motor vehicle body and mechanical 200.15repair courses but does not include driver education programs; 200.16 (7) purchase of a motor vehicle for use as an ambulance by an ambulance service 200.17licensed under section 144E.10; 200.18 (8) purchase of a motor vehicle by or for a public library, as defined in section 200.19134.001, subdivision 2 , as a bookmobile or library delivery vehicle; 200.20 (9) purchase of a ready-mixed concrete truck; 200.21 (10) purchase or use of a motor vehicle by a town for use exclusively for road 200.22maintenance, including snowplows and dump trucks, but not including automobiles, 200.23vans, or pickup trucks; 200.24 (11) purchase or use of a motor vehicle by a corporation, society, association, 200.25foundation, or institution organized and operated exclusively for charitable, religious, 200.26or educational purposes, except a public school, university, or library, but only if the 200.27vehicle is: 200.28 (i) a truck, as defined in section 168.011, a bus, as defined in section 168.011, or a 200.29passenger automobile, as defined in section 168.011, if the automobile is designed and 200.30used for carrying more than nine persons including the driver; and 200.31 (ii) intended to be used primarily to transport tangible personal property or 200.32individuals, other than employees, to whom the organization provides service in 200.33performing its charitable, religious, or educational purpose; 200.34 (12) purchase of a motor vehicle for use by a transit provider exclusively to provide 200.35transit service is exempt if the transit provider is either (i) receiving financial assistance or 201.1reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 201.2473.388 , or 473.405; 201.3 (13) purchase or use of a motor vehicle by a qualified business, as defined in section 201.4469.310 , located in a job opportunity building zone, if the motor vehicle is principally 201.5garaged in the job opportunity building zone and is primarily used as part of or in direct 201.6support of the person's operations carried on in the job opportunity building zone. The 201.7exemption under this clause applies to sales, if the purchase was made and delivery 201.8received during the duration of the job opportunity building zone. The exemption under 201.9this clause also applies to any local sales and use tax. 201.10EFFECTIVE DATE.This section is effective the day following final enactment. 201.11 Sec. 23. Minnesota Statutes 2006, section 297F.01, subdivision 8, is amended to read: 201.12 Subd. 8. Internal Revenue Code. Unless specifically defined otherwise, "Internal 201.13Revenue Code" means the Internal Revenue Code of 1986, as amended through December 201.1431, 1996 as defined in section 289A.02, subdivision 7. 201.15EFFECTIVE DATE.This section is effective the day following final enactment. 201.16 Sec. 24. Minnesota Statutes 2006, section 297G.01, subdivision 9, is amended to read: 201.17 Subd. 9. Internal Revenue Code. Unless specifically defined otherwise, "Internal 201.18Revenue Code" means the Internal Revenue Code of 1986, as amended through December 201.1931, 1996 as defined in section 289A.02, subdivision 7. 201.20EFFECTIVE DATE.This section is effective the day following final enactment. 201.21 Sec. 25. Minnesota Statutes 2006, section 297H.09, is amended to read: 201.22297H.09 BAD DEBTS. 201.23 The remitter of the solid waste management tax may offset against the tax payable, 201.24with respect to any reporting period, the amount of tax imposed by this chapter previously 201.25remitted to the commissioner of revenue which qualified as a bad debt under section 201.26166(a) of the Internal Revenue Code, as amended through December 31, 1993 defined 201.27in section 289A.02, subdivision 7, during such reporting period, but only in proportion 201.28to the portion of such debt which became uncollectable. This section applies only to 201.29accrual basis remitters that remit tax before it is collected and to the extent they are 201.30unable to collect the tax. 201.31EFFECTIVE DATE.This section is effective the day following final enactment. 202.1ARTICLE 12 202.2DEPARTMENT INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES 202.3 Section 1. Minnesota Statutes 2006, section 289A.18, subdivision 1, as amended by 202.4Laws 2008, chapter 154, article 11, section 5, is amended to read: 202.5 Subdivision 1. Individual income, fiduciary income, corporate franchise, and 202.6entertainment taxes; partnership and S corporation returns; information returns; 202.7mining company returns. The returns required to be made under sections 289A.08 and 202.8289A.12 must be filed at the following times: 202.9 (1) returns made on the basis of the calendar year must be filed on April 15 following 202.10the close of the calendar year, except that returns of corporations must be filed on March 202.1115 following the close of the calendar year; 202.12 (2) returns made on the basis of the fiscal year must be filed on the 15th day of the 202.13fourth month following the close of the fiscal year, except that returns of corporations 202.14must be filed on the 15th day of the third month following the close of the fiscal year; 202.15 (3) returns for a fractional part of a year must be filed on the 15th day of the fourth 202.16month following the end of the month in which falls the last day of the period for which 202.17the return is made, except that the returns of corporations must be filed on the 15th day of 202.18the third month following the end of the tax year; or, in the case of a corporation which is 202.19a member of a unitary group, the return of the corporation must be filed on the 15th day of 202.20the third month following the end of the tax year of the unitary group in which falls the 202.21last day of the period for which the return is made; 202.22 (4) in the case of a final return of a decedent for a fractional part of a year, the return 202.23must be filed on the 15th day of the fourth month following the close of the 12-month 202.24period that began with the first day of that fractional part of a year; 202.25 (5) in the case of the return of a cooperative association, returns must be filed on or 202.26before the 15th day of the ninth month following the close of the taxable year; 202.27 (6) if a corporation has been divested from a unitary group and files a return for 202.28a fractional part of a year in which it was a member of a unitary business that files a 202.29combined report under section 290.34 290.17, subdivision 2 4, the divested corporation's 202.30return must be filed on the 15th day of the third month following the close of the common 202.31accounting period that includes the fractional year; 202.32 (7) returns of entertainment entities must be filed on April 15 following the close of 202.33the calendar year; 202.34 (8) returns required to be filed under section 289A.08, subdivision 4, must be filed 202.35on the 15th day of the fifth month following the close of the taxable year; 203.1 (9) returns of mining companies must be filed on May 1 following the close of the 203.2calendar year; and 203.3 (10) returns required to be filed with the commissioner under section 289A.12, 203.4subdivision 2 or 4 to 10, must be filed within 30 days after being demanded by the 203.5commissioner. 203.6EFFECTIVE DATE.This section is effective the day following final enactment 203.7except that the change in clause (6) is effective for taxable years beginning after December 203.831, 2007. 203.9 Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read: 203.10 Subd. 6b. Foreign operating corporation. The term "foreign operating 203.11corporation," when applied to a corporation, means a domestic corporation with the 203.12following characteristics: 203.13 (1) it is part of a unitary business at least one member of which is taxable in this state; 203.14 (2) it is not a foreign sales corporation under section 922 of the Internal Revenue 203.15Code, as amended through December 31, 1999, for the taxable year; 203.16 (3)(i) the average of the percentages of its property and payrolls, including the pro 203.17rata share of its unitary partnerships' property and payrolls, assigned to locations outside 203.18the United States, where the United States includes the District of Columbia and excludes 203.19the commonwealth of Puerto Rico and possessions of the United States, as determined 203.20under section 290.191 or 290.20, is 80 percent or more; or (ii) it has in effect a valid 203.21election under section 936 of the Internal Revenue Code; and 203.22 (4) it has a minimum of $1,000,000 of payroll and $2,000,000 of property, as 203.23determined under section 290.191 or 290.20, that are located outside the United States. If 203.24the domestic corporation does not have payroll as determined under section 290.191 or 203.25290.20 , but it or its partnerships have paid $1,000,000 for work, performed directly for the 203.26domestic corporation or the partnerships, outside the United States, then paragraph (3)(i) 203.27shall not require payrolls to be included in the average calculation. 203.28EFFECTIVE DATE.This section is effective the day following final enactment. 203.29 Sec. 3. Minnesota Statutes 2006, section 290.068, subdivision 3, is amended to read: 203.30 Subd. 3. Limitation; carryover. (a)(1) The credit for the taxable year shall not 203.31exceed the liability for tax. "Liability for tax" for purposes of this section means the tax 203.32imposed under this chapter section 290.06, subdivision 1, for the taxable year reduced by 203.33the sum of the nonrefundable credits allowed under this chapter. 204.1 (2) In the case of a corporation which is a partner in a partnership, the credit allowed 204.2for the taxable year shall not exceed the lesser of the amount determined under clause (1) 204.3for the taxable year or an amount (separately computed with respect to the corporation's 204.4interest in the trade or business or entity) equal to the amount of tax attributable to that 204.5portion of taxable income which is allocable or apportionable to the corporation's interest 204.6in the trade or business or entity. 204.7 (b) If the amount of the credit determined under this section for any taxable year 204.8exceeds the limitation under clause (a), the excess shall be a research credit carryover to 204.9each of the 15 succeeding taxable years. The entire amount of the excess unused credit for 204.10the taxable year shall be carried first to the earliest of the taxable years to which the credit 204.11may be carried and then to each successive year to which the credit may be carried. The 204.12amount of the unused credit which may be added under this clause shall not exceed the 204.13taxpayer's liability for tax less the research credit for the taxable year. 204.14EFFECTIVE DATE.This section is effective for taxable years beginning after 204.15December 31, 2007. 204.16 Sec. 4. Minnesota Statutes 2006, section 290.07, subdivision 1, is amended to read: 204.17 Subdivision 1. Annual accounting period. Net income and taxable net income 204.18shall be computed upon the basis of the taxpayer's annual accounting period. If a taxpayer 204.19has no annual accounting period, or has one other than a fiscal year, as heretofore defined, 204.20the net income and taxable net income shall be computed on the basis of the calendar year. 204.21Taxpayers shall employ the same accounting period on which they report, or would be 204.22required to report, their net income under the Internal Revenue Code. The commissioner 204.23shall provide by rule for the determination of the accounting period for taxpayers who 204.24file a combined report under section 290.34 290.17, subdivision 2 4, when members of 204.25the group use different accounting periods for federal income tax purposes. Unless the 204.26taxpayer changes its accounting period for federal purposes, the due date of the return 204.27is not changed. 204.28 A taxpayer may change accounting periods only with the consent of the 204.29commissioner. In case of any such change, the taxpayer shall pay a tax for the period 204.30not included in either the taxpayer's former or newly adopted taxable year, computed as 204.31provided in section 290.32. 204.32EFFECTIVE DATE.This section is effective for taxable years beginning after 204.33December 31, 2007. 204.34 Sec. 5. Minnesota Statutes 2006, section 290.21, subdivision 4, is amended to read: 205.1 Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent 205.2of dividends received by a corporation during the taxable year from another corporation, 205.3in which the recipient owns 20 percent or more of the stock, by vote and value, not 205.4including stock described in section 1504(a)(4) of the Internal Revenue Code when the 205.5corporate stock with respect to which dividends are paid does not constitute the stock in 205.6trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not 205.7constitute property held by the taxpayer primarily for sale to customers in the ordinary 205.8course of the taxpayer's trade or business, or when the trade or business of the taxpayer 205.9does not consist principally of the holding of the stocks and the collection of the income 205.10and gains therefrom; and 205.11 (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in 205.12an affiliated company transferred in an overall plan of reorganization and the dividend 205.13is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 205.14amended through December 31, 1989; 205.15 (ii) the remaining 20 percent of dividends if the dividends are received from a 205.16corporation which is subject to tax under section 290.36 and which is a member of an 205.17affiliated group of corporations as defined by the Internal Revenue Code and the dividend 205.18is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 205.19amended through December 31, 1989, or is deducted under an election under section 205.20243(b) of the Internal Revenue Code; or 205.21 (iii) the remaining 20 percent of the dividends if the dividends are received from a 205.22property and casualty insurer as defined under section 60A.60, subdivision 8, which is a 205.23member of an affiliated group of corporations as defined by the Internal Revenue Code 205.24and either: (A) the dividend is eliminated in consolidation under Treasury Regulation 205.251.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted 205.26under an election under section 243(b) of the Internal Revenue Code. 205.27 (b) Seventy percent of dividends received by a corporation during the taxable year 205.28from another corporation in which the recipient owns less than 20 percent of the stock, 205.29by vote or value, not including stock described in section 1504(a)(4) of the Internal 205.30Revenue Code when the corporate stock with respect to which dividends are paid does not 205.31constitute the stock in trade of the taxpayer, or does not constitute property held by the 205.32taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or 205.33business, or when the trade or business of the taxpayer does not consist principally of the 205.34holding of the stocks and the collection of income and gain therefrom. 206.1 (c) The dividend deduction provided in this subdivision shall be allowed only with 206.2respect to dividends that are included in a corporation's Minnesota taxable net income 206.3for the taxable year. 206.4 The dividend deduction provided in this subdivision does not apply to a dividend 206.5from a corporation which, for the taxable year of the corporation in which the distribution 206.6is made or for the next preceding taxable year of the corporation, is a corporation exempt 206.7from tax under section 501 of the Internal Revenue Code. 206.8 The dividend deduction provided in this subdivision applies to the amount of 206.9regulated investment company dividends only to the extent determined under section 206.10854(b) of the Internal Revenue Code. 206.11 The dividend deduction provided in this subdivision shall not be allowed with 206.12respect to any dividend for which a deduction is not allowed under the provisions of 206.13section 246(c) of the Internal Revenue Code. 206.14 (d) If dividends received by a corporation that does not have nexus with Minnesota 206.15under the provisions of Public Law 86-272 are included as income on the return of 206.16an affiliated corporation permitted or required to file a combined report under section 206.17290.17, subdivision 4 or 290.34, subdivision 2, then for purposes of this subdivision the 206.18determination as to whether the trade or business of the corporation consists principally 206.19of the holding of stocks and the collection of income and gains therefrom shall be made 206.20with reference to the trade or business of the affiliated corporation having a nexus with 206.21Minnesota. 206.22 (e) The deduction provided by this subdivision does not apply if the dividends are 206.23paid by a FSC as defined in section 922 of the Internal Revenue Code. 206.24 (f) If one or more of the members of the unitary group whose income is included on 206.25the combined report received a dividend, the deduction under this subdivision for each 206.26member of the unitary business required to file a return under this chapter is the product 206.27of: (1) 100 percent of the dividends received by members of the group; (2) the percentage 206.28allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business 206.29income apportionable to this state for the taxable year under section 290.191 or 290.20. 206.30EFFECTIVE DATE.This section is effective for taxable years beginning after 206.31December 31, 2007. 206.32 Sec. 6. Minnesota Statutes 2006, section 290.92, subdivision 26, is amended to read: 206.33 Subd. 26. Extension of withholding to certain payments where identifying 206.34number not furnished or inaccurate. (a) If, in the case of any reportable payment, (1) 206.35the payee fails to furnish the payee's Social Security account number to the payor, or 207.1(2) the payee is subject to federal backup withholding on the reportable payment under 207.2section 3406 of the Internal Revenue Code, or (3) the commissioner notifies the payor that 207.3the Social Security account number furnished by the payee is incorrect, then the payor 207.4shall deduct and withhold from the payment a tax equal to the amount of the payment 207.5multiplied by the highest rate used in determining the income tax liability of an individual 207.6under section 290.06, subdivision 2c. 207.7 (b)(1) In the case of any failure described in clause (a)(1), clause (a) shall apply to 207.8any reportable payment made by the payor during the period during which the Social 207.9Security account number has not been furnished. 207.10 (2) In any case where there is a notification described in clause (a)(2)(3), clause (a) 207.11shall apply to any reportable payment made by the payor (i) after the close of the 30th 207.12day after the day on which the payor received the notification, and (ii) before the payee 207.13furnishes another Social Security account number. 207.14 (3)(i) Unless the payor elects not to have this subparagraph apply with respect to 207.15the payee, clause (a) shall also apply to any reportable payment made after the close of 207.16the period described in paragraph (1) or (2) (as the case may be) and before the 30th 207.17day after the close of the period. 207.18 (ii) If the payor elects the application of this subparagraph with respect to the payee, 207.19clause (a) shall also apply to any reportable payment made during the 30-day period 207.20described in paragraph (2). 207.21 (iii) The payor may elect a period shorter than the grace period set forth in 207.22subparagraph (i) or (ii) as the case may be. 207.23 (c) The provisions of section 3406 of the Internal Revenue Code shall apply and 207.24shall govern when withholding shall be required and the definition of terms. The term 207.25"reportable payment" shall include only those payments for personal services. No tax 207.26shall be deducted or withheld under this subdivision with respect to any amount for 207.27which withholding is otherwise required under this section. For purposes of this section, 207.28payments which are subject to withholding under this subdivision shall be treated as if 207.29they were wages paid by an employer to an employee and amounts deducted and withheld 207.30under this subdivision shall be treated as if deducted and withheld under subdivision 2a. 207.31 (d) Whenever the commissioner notifies a payor under this subdivision that the 207.32Social Security account number furnished by any payee is incorrect, the commissioner 207.33shall at the same time furnish a copy of the notice to the payor, and the payor shall 207.34promptly furnish the copy to the payee. If the commissioner notifies a payor under this 207.35subdivision that the Social Security account number furnished by any payee is incorrect 207.36and the payee subsequently furnishes another Social Security account number to the 208.1payor, the payor shall promptly notify the commissioner of the other Social Security 208.2account number furnished. 208.3EFFECTIVE DATE.This section is effective for payments made after December 208.431, 2008. 208.5 Sec. 7. Minnesota Statutes 2006, section 290.92, subdivision 31, as added by Laws 208.62008, chapter 154, article 3, section 8, is amended to read: 208.7 Subd. 31. Payments to persons who are not employees. (a) For purposes of this 208.8subdivision, "contractor" means a person carrying on a trade or business described in 208.9industry code numbers 23 through 238990 of the North American Industry Classification 208.10System. 208.11 (b) A contractor or a third-party bulk filer acting on behalf of a contractor, who 208.12makes payments to an individual, carrying on a trade or business described in paragraph 208.13(a) as a sole proprietorship, must deduct and withhold two percent of the payment as 208.14Minnesota withholding tax when the amount the contractor paid to that individual during 208.15the calendar year exceeds $600. 208.16 (c) A payment subject to withholding under this subdivision must be treated as if 208.17the payment were a wage paid by an employer to an employee. The requirements in the 208.18definitions of "employee" and "employer" in subdivision 1 relating to geographic location 208.19apply in determining whether withholding tax applies under this subdivision, but without 208.20regard to whether the contractor or the individual otherwise satisfy the definition of an 208.21employer or an employee. Each recipient of a payment subject to withholding under this 208.22subdivision must furnish the contractor with a statement of the recipient's name, address, 208.23and Social Security account number. 208.24EFFECTIVE DATE.This section is effective the day following final enactment. 208.25 Sec. 8. REPEALER. 208.26Minnesota Rules, part 8031.0100, subpart 3, is repealed effective the day following 208.27final enactment. 208.28Minnesota Rules, part 8093.2100, is repealed effective the day following final 208.29enactment. 208.30ARTICLE 13 208.31DEPARTMENT SALES AND USE TAXES 208.32 Section 1. Minnesota Statutes 2006, section 289A.55, is amended by adding a 208.33subdivision to read: 209.1 Subd. 10. Relief for purchasers. A purchaser that meets the requirements of section 209.2297A.995, subdivision 11, is relieved from the imposition of interest on tax and penalty. 209.3EFFECTIVE DATE.This section is effective for sales and purchases made after 209.4December 31, 2008. 209.5 Sec. 2. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision 209.6to read: 209.7 Subd. 30. Relief for purchasers. A purchaser that meets the requirements of 209.8section 297A.995, subdivision 11, is relieved from the imposition of penalty. 209.9EFFECTIVE DATE.This section is effective for sales and purchases made after 209.10December 31, 2008. 209.11 Sec. 3. Minnesota Statutes 2006, section 297A.61, subdivision 29, is amended to read: 209.12 Subd. 29. State. Unless specifically provided otherwise, "state" means any state of 209.13the United States, the Commonwealth of Puerto Rico, and the District of Columbia. 209.14EFFECTIVE DATE.This section is effective the day following final enactment. 209.15 Sec. 4. Minnesota Statutes 2006, section 297A.665, as amended by Laws 2008, chapter 209.16154, article 12, section 20, is amended to read: 209.17297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF. 209.18 (a) For the purpose of the proper administration of this chapter and to prevent 209.19evasion of the tax, until the contrary is established, it is presumed that: 209.20 (1) all gross receipts are subject to the tax; and 209.21 (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 209.22in Minnesota. 209.23 (b) The burden of proving that a sale is not a taxable retail sale is on the seller. 209.24However, a seller is relieved of liability if: 209.25 (1) the seller obtains a fully completed exemption certificate or all the relevant 209.26information required by section 297A.72, subdivision 2, at the time of the sale or within 209.2790 days after the date of the sale; or 209.28 (2) if the seller has not obtained a fully completed exemption certificate or all the 209.29relevant information required by section 297A.72, subdivision 2, within the time provided 209.30in clause (1), within 120 days after a request for substantiation by the commissioner, 209.31the seller either: 210.1 (i) obtains in good faith a fully completed exemption certificate or all the relevant 210.2information required by section 297A.72, subdivision 2, from the purchaser; or 210.3 (ii) proves by other means that the transaction was not subject to tax. 210.4 (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who: 210.5 (1) fraudulently fails to collect the tax; or 210.6 (2) solicits purchasers to participate in the unlawful claim of an exemption. 210.7 (d) A certified service provider, as defined in section 297A.995, subdivision 2, is 210.8relieved of liability under this section to the extent a seller who is its client is relieved of 210.9liability. 210.10 (d) (e) A purchaser of tangible personal property or any items listed in section 210.11297A.63 that are shipped or brought to Minnesota by the purchaser has the burden 210.12of proving that the property was not purchased from a retailer for storage, use, or 210.13consumption in Minnesota. 210.14EFFECTIVE DATE.This section is effective retroactively for sales and purchases 210.15made after December 31, 2007. 210.16 Sec. 5. Minnesota Statutes 2006, section 297A.67, subdivision 7, as amended by Laws 210.172008, chapter 154, article 12, section 26, is amended to read: 210.18 Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical 210.19devices for human use are exempt: 210.20 (1) drugs for human use, including over-the-counter drugs; 210.21 (2) single-use finger-pricking devices for the extraction of blood and other single-use 210.22devices and single-use diagnostic agents used in diagnosing, monitoring, or treating 210.23diabetes; 210.24 (3) insulin and medical oxygen for human use, regardless of whether prescribed 210.25or sold over the counter; 210.26 (4) prosthetic devices; 210.27 (5) durable medical equipment for home use only; 210.28 (6) mobility enhancing equipment; 210.29 (7) prescription corrective eyeglasses; and 210.30 (8) kidney dialysis equipment, including repair and replacement parts. 210.31 (b) For purposes of this subdivision: 210.32 (1) "Drug" means a compound, substance, or preparation, and any component of 210.33a compound, substance, or preparation, other than food and food ingredients, dietary 210.34supplements, or alcoholic beverages that is: 211.1 (i) recognized in the official United States Pharmacopoeia, official Homeopathic 211.2Pharmacopoeia of the United States, or official National Formulary, and supplement 211.3to any of them; 211.4 (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention 211.5of disease; or 211.6 (iii) intended to affect the structure or any function of the body. 211.7 (2) "Durable medical equipment" means equipment, including repair and 211.8replacement parts, but not including mobility enhancing equipment, that: 211.9 (i) can withstand repeated use; 211.10 (ii) is primarily and customarily used to serve a medical purpose; 211.11 (iii) generally is not useful to a person in the absence of illness or injury; and 211.12 (iv) is not worn in or on the body. 211.13 For purposes of this clause, "repair and replacement parts" includes all components 211.14or attachments used in conjunction with the durable medical equipment, but does not 211.15include repair and replacement parts which are for single patient use only. 211.16 (3) "Mobility enhancing equipment" means equipment, including repair and 211.17replacement parts, but not including durable medical equipment, that: 211.18 (i) is primarily and customarily used to provide or increase the ability to move from 211.19one place to another and that is appropriate for use either in a home or a motor vehicle; 211.20 (ii) is not generally used by persons with normal mobility; and 211.21 (iii) does not include any motor vehicle or equipment on a motor vehicle normally 211.22provided by a motor vehicle manufacturer. 211.23 (4) "Over-the-counter drug" means a drug that contains a label that identifies the 211.24product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The 211.25label must include a "drug facts" panel or a statement of the active ingredients with a list of 211.26those ingredients contained in the compound, substance, or preparation. Over-the-counter 211.27drugs do not include grooming and hygiene products, regardless of whether they otherwise 211.28meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions, 211.29shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens. 211.30 (5) "Prescribed" and "prescription" means a direction in the form of an order, 211.31formula, or recipe issued in any form of oral, written, electronic, or other means of 211.32transmission by a duly licensed health care professional. 211.33 (6) "Prosthetic device" means a replacement, corrective, or supportive device, 211.34including repair and replacement parts, worn on or in the body to: 211.35 (i) artificially replace a missing portion of the body; 211.36 (ii) prevent or correct physical deformity or malfunction; or 212.1 (iii) support a weak or deformed portion of the body. 212.2Prosthetic device does not include corrective eyeglasses. 212.3 (7) "Kidney dialysis equipment" means equipment that: 212.4 (i) is used to remove waste products that build up in the blood when the kidneys are 212.5not able to do so on their own; and 212.6 (ii) can withstand repeated use, including multiple use by a single patient, 212.7notwithstanding the provisions of clause (2). 212.8EFFECTIVE DATE.This section is effective the day following final enactment. 212.9 Sec. 6. Minnesota Statutes 2006, section 297A.995, subdivision 10, is amended to read: 212.10 Subd. 10. Relief from certain liability. (a) Notwithstanding subdivision 9, sellers 212.11and certified service providers are relieved from liability to the state for having charged 212.12and collected the incorrect amount of sales or use tax resulting from the seller or certified 212.13service provider (1) relying on erroneous data provided by this state the commissioner 212.14in the database files on tax rates, boundaries, or taxing jurisdiction assignments, or (2) 212.15relying on erroneous data provided by the state in its taxability matrix concerning the 212.16taxability of products and services. 212.17 (b) Notwithstanding subdivision 9, sellers and certified service providers are 212.18relieved from liability to the state for having charged and collected the incorrect amount 212.19of sales or use tax resulting from the seller or certified service provider relying on the 212.20certification by the commissioner as to the accuracy of a certified automated system as to 212.21the taxability of product categories. The relief from liability provided by this paragraph 212.22does not apply when the sellers or certified service providers have incorrectly classified 212.23an item or transaction into a product category, unless the item or transaction within a 212.24product category was approved by the commissioner or approved jointly by the states that 212.25are signatories to the agreement. The sellers and certified service providers must revise a 212.26classification within ten days after receipt of notice from the commissioner that an item or 212.27transaction within a product category is incorrectly classified as to its taxability, or they 212.28are not relieved from liability for the incorrect classification following the notification. 212.29EFFECTIVE DATE.This section is effective retroactively for sales and purchases 212.30made after December 31, 2007. 212.31 Sec. 7. Minnesota Statutes 2006, section 297A.995, is amended by adding a 212.32subdivision to read: 212.33 Subd. 11. Purchaser relief from certain liability. (a) Notwithstanding other 212.34provisions in the law, a purchaser is relieved from liability resulting from having paid 213.1the incorrect amount of sales or use tax if a purchaser, whether or not holding a direct 213.2pay permit, or a purchaser's seller or certified service provider relied on erroneous data 213.3provided by this state in the database files on tax rates, boundaries, taxing jurisdiction 213.4assignments, or in the taxability matrix. After providing an address-based database for 213.5assigning taxing jurisdictions and their associated rates, no relief for errors resulting from 213.6the purchaser's reliance on a database using zip codes is allowed. 213.7 (b) With respect to reliance on the taxability matrix provided by this state in 213.8paragraph (a), relief is limited to erroneous classifications in the taxability matrix for 213.9items included within the classifications as "taxable," "exempt," "included in sales 213.10price," "excluded from sales price," "included in the definition," and "excluded from 213.11the definition." 213.12EFFECTIVE DATE.This section is effective for sales and purchases made after 213.13December 31, 2008. 213.14 Sec. 8. Minnesota Statutes 2006, section 297A.995, is amended by adding a 213.15subdivision to read: 213.16 Subd. 12. Database files. For purposes of this section, "database files on tax rates, 213.17boundaries, and taxing jurisdiction assignments" and the "taxability matrix" means those 213.18databases and the taxability matrix required under the agreement. 213.19EFFECTIVE DATE.This section is effective retroactively for sales and purchases 213.20made after December 31, 2007. 213.21ARTICLE 14 213.22DEPARTMENT SPECIAL TAXES AND FEES 213.23 Section 1. Minnesota Statutes 2007 Supplement, section 115A.1314, subdivision 2, 213.24is amended to read: 213.25 Subd. 2. Creation of account; appropriations. (a) The electronic waste account 213.26is established in the environmental fund. The commissioner of revenue must deposit 213.27receipts from the fee established in subdivision 1 in the account. Any interest earned on 213.28the account must be credited to the account. Money from other sources may be credited to 213.29the account. Beginning in the second program year and continuing each program year 213.30thereafter, as of the last day of each program year, the commissioner of revenue shall 213.31determine the total amount of the variable fees that were collected. By July 15, 2009, and 213.32each July 15 thereafter, the commissioner of the Pollution Control Agency shall inform 213.33the commissioner of revenue of the amount necessary to operate the program in the new 214.1program year. To the extent that the total fees collected by the commissioner of revenue in 214.2connection with this section exceeds exceed the amount the commissioner of the Pollution 214.3Control Agency determines necessary to operate the program for the new program 214.4year, the commissioner of revenue shall refund on a pro rata basis, to all manufacturers 214.5who paid any fees for the previous program year, the amount of fees collected by the 214.6commissioner of revenue in excess of the amount necessary to operate the program for the 214.7new program year. No individual refund is required of amounts of $100 or less for a fiscal 214.8year. Manufacturers who report collections less than 50 percent of their obligation for the 214.9previous program year are not eligible for a refund. Amounts not refunded pursuant to this 214.10paragraph shall remain in the account. The commissioner of revenue shall issue refunds 214.11by August 10. In lieu of issuing a refund, the commissioner of revenue may grant credit 214.12against a manufacturer's variable fee due by September 1. 214.13 (b) Until June 30, 2009, money in the account is annually appropriated to the 214.14Pollution Control Agency: 214.15 (1) for the purpose of implementing sections 115A.1312 to 115A.1330, including 214.16transfer to the commissioner of revenue to carry out the department's duties under 214.17section 115A.1320, subdivision 2, and transfer to the commissioner of administration for 214.18responsibilities under section 115A.1324; and 214.19 (2) to the commissioner of the Pollution Control Agency to be distributed on a 214.20competitive basis through contracts with counties outside the 11-county metropolitan 214.21area, as defined in paragraph (c), and with private entities that collect for recycling 214.22covered electronic devices in counties outside the 11-county metropolitan area, where the 214.23collection and recycling is consistent with the respective county's solid waste plan, for 214.24the purpose of carrying out the activities under sections 115A.1312 to 115A.1330. In 214.25awarding competitive grants under this clause, the commissioner must give preference to 214.26counties and private entities that are working cooperatively with manufacturers to help 214.27them meet their recycling obligations under section 115A.1318, subdivision 1. 214.28 (c) The 11-county metropolitan area consists of the counties of Anoka, Carver, 214.29Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright. 214.30EFFECTIVE DATE.This section is effective the day following final enactment. 214.31 Sec. 2. Minnesota Statutes 2006, section 270C.56, subdivision 1, as amended by Laws 214.322008, chapter 154, article 15, section 7, is amended to read: 214.33 Subdivision 1. Liability imposed. A person who, either singly or jointly with 214.34others, has the control of, supervision of, or responsibility for filing returns or reports, 214.35paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a 215.1person who is liable under any other law, is liable for the payment of taxes, penalties, and 215.2interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658, 215.3290.92, and 297E.02, and, for the taxes listed in this subdivision, the applicable penalties 215.4for nonpayment under section 289A.60. 215.5EFFECTIVE DATE.This section is effective for fees due after June 30, 2008. 215.6 Sec. 3. Minnesota Statutes 2006, section 295.50, subdivision 4, is amended to read: 215.7 Subd. 4. Health care provider. (a) "Health care provider" means: 215.8 (1) a person whose health care occupation is regulated or required to be regulated by 215.9the state of Minnesota furnishing any or all of the following goods or services directly to a 215.10patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services, 215.11drugs, laboratory, diagnostic or therapeutic services; 215.12 (2) a person who provides goods and services not listed in clause (1) that qualify for 215.13reimbursement under the medical assistance program provided under chapter 256B; 215.14 (3) a staff model health plan company; 215.15 (4) an ambulance service required to be licensed; or 215.16 (5) a person who sells or repairs hearing aids and related equipment or prescription 215.17eyewear. 215.18 (b) Health care provider does not include: 215.19 (1) hospitals; medical supplies distributors, except as specified under paragraph 215.20(a), clause (5); nursing homes licensed under chapter 144A or licensed in any other 215.21jurisdiction; wholesale drug distributors; pharmacies; surgical centers; bus and taxicab 215.22transportation, or any other providers of transportation services other than ambulance 215.23services required to be licensed; supervised living facilities for persons with developmental 215.24disabilities, licensed under Minnesota Rules, parts 4665.0100 to 4665.9900; housing 215.25with services establishments required to be registered under chapter 144D; board 215.26and lodging establishments providing only custodial services that are licensed under 215.27chapter 157 and registered under section 157.17 to provide supportive services or health 215.28supervision services; adult foster homes as defined in Minnesota Rules, part 9555.5105; 215.29day training and habilitation services for adults with developmental disabilities as defined 215.30in section 252.41, subdivision 3; boarding care homes, as defined in Minnesota Rules, part 215.314655.0100 ; and adult day care centers as defined in Minnesota Rules, part 9555.9600; 215.32 (2) home health agencies as defined in Minnesota Rules, part 9505.0175, subpart 215.3315; a person providing personal care services and supervision of personal care services 215.34as defined in Minnesota Rules, part 9505.0335; a person providing private duty nursing 216.1services as defined in Minnesota Rules, part 9505.0360; and home care providers required 216.2to be licensed under chapter 144A; 216.3 (3) a person who employs health care providers solely for the purpose of providing 216.4patient services to its employees; and 216.5 (4) an educational institution that employs health care providers solely for the 216.6purpose of providing patient services to its students if the institution does not receive fee 216.7for service payments or payments for extended coverage; and 216.8 (5) a person who receives all payments for patient services from health care 216.9providers, surgical centers, or hospitals for goods and services that are taxable to the 216.10paying health care providers, surgical centers, or hospitals, as provided under section 216.11295.53, subdivision 1, clause (3) or (4), or from a source of funds that is exempt from tax 216.12under this chapter. 216.13EFFECTIVE DATE.Paragraph (b), clause (1), is effective the day following 216.14final enactment. Paragraph (b), clause (5), is effective for payments received after June 216.1530, 2008. 216.16 Sec. 4. Minnesota Statutes 2006, section 295.52, subdivision 4, as amended by Laws 216.172008, chapter 154, article 14, section 5, is amended to read: 216.18 Subd. 4. Use tax; prescription legend drugs. (a) A person that receives 216.19prescription legend drugs for resale or use in Minnesota, other than from a wholesale drug 216.20distributor that is subject to tax under subdivision 3, is subject to a tax equal to the price 216.21paid to the wholesale drug distributor for the legend drugs multiplied by the tax percentage 216.22specified in this section. Liability for the tax is incurred when prescription legend drugs 216.23are received or delivered in Minnesota by the person. 216.24 (b) A tax imposed under this subdivision does not apply to purchases by an 216.25individual for personal consumption. 216.26EFFECTIVE DATE.This section is effective the day following final enactment. 216.27 Sec. 5. Minnesota Statutes 2006, section 296A.07, subdivision 4, is amended to read: 216.28 Subd. 4. Exemptions. The provisions of subdivision 1 do not apply to gasoline or 216.29denatured ethanol purchased by: 216.30 (1) a transit system or transit provider receiving financial assistance or 216.31reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; or 216.32 (2) an ambulance service licensed under chapter 144E; or 216.33 (3) a licensed distributor to be delivered to a terminal for use in blending. 217.1EFFECTIVE DATE.This section is effective the day following final enactment. 217.2 Sec. 6. Minnesota Statutes 2006, section 296A.08, subdivision 3, is amended to read: 217.3 Subd. 3. Exemptions. The provisions of subdivisions 1 and 2 do not apply to 217.4special fuel or alternative fuels purchased by: 217.5 (1) a transit system or transit provider receiving financial assistance or 217.6reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; or 217.7 (2) an ambulance service licensed under chapter 144E; or 217.8 (3) a licensed distributor to be delivered to a terminal for use in blending. 217.9EFFECTIVE DATE.This section is effective the day following final enactment. 217.10 Sec. 7. Minnesota Statutes 2006, section 297F.21, subdivision 1, is amended to read: 217.11 Subdivision 1. Contraband defined. The following are declared to be contraband 217.12and therefore subject to civil and criminal penalties under this chapter: 217.13 (a) Cigarette packages which do not have stamps affixed to them as provided in this 217.14chapter, including but not limited to (i) packages with illegible stamps and packages with 217.15stamps that are not complete or whole even if the stamps are legible, and (ii) all devices 217.16for the vending of cigarettes in which packages as defined in item (i) are found, including 217.17all contents contained within the devices. 217.18 (b) A device for the vending of cigarettes and all packages of cigarettes, where the 217.19device does not afford at least partial visibility of contents. Where any package exposed 217.20to view does not carry the stamp required by this chapter, it shall be presumed that all 217.21packages contained in the device are unstamped and contraband. 217.22 (c) A device for the vending of cigarettes to which the commissioner or authorized 217.23agents have been denied access for the inspection of contents. In lieu of seizure, the 217.24commissioner or an agent may seal the device to prevent its use until inspection of 217.25contents is permitted. 217.26 (d) A device for the vending of cigarettes which does not carry the name and address 217.27of the owner, plainly marked and visible from the front of the machine. 217.28 (e) A device including, but not limited to, motor vehicles, trailers, snowmobiles, 217.29airplanes, and boats used with the knowledge of the owner or of a person operating with 217.30the consent of the owner for the storage or transportation of more than 5,000 cigarettes 217.31which are contraband under this subdivision. When cigarettes are being transported in 217.32the course of interstate commerce, or are in movement from either a public warehouse to 217.33a distributor upon orders from a manufacturer or distributor, or from one distributor to 217.34another, the cigarettes are not contraband, notwithstanding the provisions of clause (a). 218.1 (f) A device including, but not limited to, motor vehicles, trailers, snowmobiles, 218.2airplanes, and boats used with the knowledge of the owner, or of a person operating with 218.3the consent of the owner, for the storage or transportation of untaxed tobacco products 218.4intended for sale in Minnesota other than those in the possession of a licensed distributor 218.5on or before the due date for payment of the tax under section 297F.09, subdivision 2. 218.6 (g) Cigarette packages or tobacco products obtained from an unlicensed seller. 218.7 (h) Cigarette packages offered for sale or held as inventory in violation of section 218.8297F.20, subdivision 7 . 218.9 (i) Tobacco products on which the tax has not been paid by a licensed distributor. 218.10 (j) Any cigarette packages or tobacco products offered for sale or held as inventory 218.11for which there is not an invoice from a licensed seller as required under section 297F.13, 218.12subdivision 4 . 218.13 (k) Cigarette packages which have been imported into the United States in violation 218.14of United States Code, title 26, section 5754. All cigarettes held in violation of that section 218.15shall be presumed to have entered the United States after December 31, 1999, in the 218.16absence of proof to the contrary. 218.17 (l) Cigarettes subject to forfeiture under section 299F.854, subdivision 5, and 218.18cigarette packaging and markings, including the cigarettes contained therein, which do not 218.19meet the requirements under section 299F.853, paragraph (a). 218.20EFFECTIVE DATE.Property added in paragraph (l) of this section is contraband 218.21effective December 1, 2008. 218.22 Sec. 8. Minnesota Statutes 2006, section 297I.05, subdivision 12, is amended to read: 218.23 Subd. 12. Other entities. (a) A tax is imposed equal to two percent of: 218.24 (1) gross premiums less return premiums written for risks resident or located in 218.25Minnesota by a risk retention group; 218.26 (2) gross premiums less return premiums received by an attorney in fact acting 218.27in accordance with chapter 71A; 218.28 (3) gross premiums less return premiums received pursuant to assigned risk policies 218.29and contracts of coverage under chapter 79; 218.30 (4) the direct funded premium received by the reinsurance association under section 218.3179.34 from self-insurers approved under section 176.181 and political subdivisions that 218.32self-insure; and 218.33 (5) gross premiums less return premiums received by a nonprofit health service plan 218.34corporation authorized under chapter 62C; and 219.1 (6) gross premiums less return premiums paid to an insurer other than a licensed 219.2insurance company or a surplus lines licensee for coverage of risks resident or located in 219.3Minnesota by a purchasing group or any members of the purchasing group to a broker or 219.4agent for the purchasing group. 219.5 (b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The 219.6rate of tax is equal to two percent of the total amount of claims paid during the fund year, 219.7with no deduction for claims wholly or partially reimbursed through stop-loss insurance. 219.8 (c) A tax is imposed on a joint self-insurance plan operating under chapter 62H. 219.9The rate of tax is equal to two percent of the total amount of claims paid during the 219.10fund's fiscal year, with no deduction for claims wholly or partially reimbursed through 219.11stop-loss insurance. 219.12 (d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5, 219.13on the gross premiums less return premiums on all coverages received by an accountable 219.14provider network or agents of an accountable provider network in Minnesota, in cash or 219.15otherwise, during the year. 219.16EFFECTIVE DATE.This section is effective the day following final enactment. 219.17ARTICLE 15 219.18DEPARTMENT PROPERTY TAXES AND AIDS 219.19 Section 1. Minnesota Statutes 2006, section 13.51, subdivision 3, is amended to read: 219.20 Subd. 3. Data on income of individuals. Income information on individuals 219.21collected and maintained by political subdivisions to determine eligibility of property for 219.22class 4d under section 273.126 sections 273.128 and 273.13, is private data on individuals 219.23as defined in section 13.02, subdivision 12. 219.24EFFECTIVE DATE.This section is effective for data collected or maintained by 219.25political subdivisions beginning the day following final enactment. 219.26 Sec. 2. Minnesota Statutes 2006, section 13.585, subdivision 5, is amended to read: 219.27 Subd. 5. Private data on individuals. Income information on individuals collected 219.28and maintained by a housing agency to determine eligibility of property for class 4d 219.29under sections and 273.13, is private data on individuals as defined in 219.30section 13.02, subdivision 12. The data may be disclosed to the county and local assessors 219.31responsible for determining eligibility of the property for classification 4d. 219.32EFFECTIVE DATE.This section is effective for data collected or maintained by a 219.33housing agency beginning the day following final enactment. 220.1 Sec. 3. Minnesota Statutes 2006, section 272.02, subdivision 38, is amended to read: 220.2 Subd. 38. Conversion to exempt or taxable uses. (a) Any property, except 220.3property taxed as personal property under section 273.125, that is exempt from taxation on 220.4January 2 of any year which, due to sale or other reason, loses its exemption prior to July 1 220.5of any year, shall be placed on the current assessment rolls for that year. 220.6 The valuation shall be determined with respect to its value on January 2 of such 220.7year. The classification shall be based upon the use to which the property was put by the 220.8purchaser, or in the event the purchaser has not utilized the property by July 1, the intended 220.9use of the property, determined by the county assessor, based upon all relevant facts. 220.10 (b) Property, except property taxed as personal property under section 273.125, that 220.11is subject to tax on January 2 that is acquired before July 1 of the year is exempt for that 220.12assessment year if the property is to be used for an exempt purpose under subdivisions 2 220.13to 8. 220.14 (c) Property which forfeits to the state for nonpayment of real estate taxes on or 220.15before December 31 in an assessment year, shall be removed from the assessment rolls for 220.16that assessment year. Forfeited property that is repurchased, or sold at a public or private 220.17sale, on or before December 31 of an assessment year shall be placed on the assessment 220.18rolls for that year's assessment. 220.19EFFECTIVE DATE.This section is effective the day following final enactment. 220.20 Sec. 4. Minnesota Statutes 2007 Supplement, section 273.1231, subdivision 7, is 220.21amended to read: 220.22 Subd. 7. Reassessed market value. "Reassessed market value" means the taxable 220.23market value of the property established for the January 2 assessment in the year that the 220.24disaster or destruction occurs, as adjusted by the county assessor or the commissioner of 220.25revenue to reflect the loss in market value caused by the damage. As soon as practical, the 220.26assessor or commissioner shall report the reassessed value to the county auditor. 220.27EFFECTIVE DATE.This section is effective the day following final enactment. 220.28 Sec. 5. Minnesota Statutes 2007 Supplement, section 273.1231, is amended by adding 220.29a subdivision to read: 220.30 Subd. 8. Utility property. "Utility property" means property appraised and 220.31classified for tax purposes by the commissioner of revenue under sections 273.33 to 220.32273.3711. 220.33EFFECTIVE DATE.This section is effective the day following final enactment. 221.1 Sec. 6. Minnesota Statutes 2007 Supplement, section 273.1232, subdivision 1, is 221.2amended to read: 221.3 Subdivision 1. Reassessments required. For the purposes of sections 273.1231 221.4to 273.1235, the county assessor must reassess all damaged property in a disaster or 221.5emergency area, and the county assessor or except that the commissioner of revenue 221.6as appropriate shall reassess all property for which an application is submitted to the 221.7commissioner under section 273.1233 or 273.1235. As soon as practical, the assessor or 221.8commissioner of revenue must report the reassessed value to the county auditor. 221.9EFFECTIVE DATE.This section is effective the day following final enactment. 221.10 Sec. 7. Minnesota Statutes 2007 Supplement, section 273.1233, subdivision 1, is 221.11amended to read: 221.12 Subdivision 1. Abatement authorization. (a) Notwithstanding section 375.192, 221.13a county board may grant an abatement of net tax for homestead and nonhomestead 221.14property under the provisions of this paragraph for taxes payable in the year in which 221.15the destruction occurs if: 221.16 (1) the owner submits a written application to the county assessor as soon as 221.17practical after the damage has occurred; 221.18 (2) the owner submits a written application to the county board as soon as practical 221.19after the damage has occurred; and 221.20 (3) the county assessor determines that 50 percent or more of a homestead dwelling 221.21or other building has been (i) unintentionally or accidentally destroyed, or (ii) destroyed 221.22by arson or vandalism by someone other than the owner. 221.23 Abatements granted under this paragraph are not subject to approval by the 221.24commissioner of revenue. 221.25 (b) Notwithstanding sections 270C.86 and 375.192, the commissioner of revenue 221.26may grant an abatement of net tax for utility property that the commissioner is required by 221.27law to appraise for taxes payable in the year in which the destruction occurs if: 221.28 (1) the owner submits a written application to the commissioner as soon as practical 221.29after the damage has occurred; 221.30 (2) the owner forwards a copy of the written application to the county board as soon 221.31as practical after the damage has occurred; and 221.32 (3) the commissioner determines that 50 percent or more of the property has been 221.33(i) unintentionally or accidentally destroyed, or (ii) destroyed by arson or vandalism by 221.34someone other than the owner. 222.1 Abatements granted under this paragraph are not subject to approval by the county 222.2board of the county where the property is located. 222.3EFFECTIVE DATE.This section is effective the day following final enactment. 222.4 Sec. 8. Minnesota Statutes 2007 Supplement, section 273.1233, subdivision 3, is 222.5amended to read: 222.6 Subd. 3. Reimbursement, levy, and appropriation. (a) If the destruction occurs as 222.7a result of a disaster or emergency and the property is located in a disaster or emergency 222.8area, the county auditor shall certify the abatements granted under this section to the 222.9commissioner of revenue for reimbursement to each taxing jurisdiction in which the 222.10damaged property is located. The commissioner shall make the payments to the taxing 222.11jurisdictions containing the property, other than school districts and the state, at the time 222.12distributions are made under section 473H.10, subdivision 3. Reimbursements to school 222.13districts shall be made as provided in section 273.1392. No reimbursement is to be paid 222.14to the state treasury. 222.15 (b) Local taxing authorities may levy in the following year the amount of 222.16unreimbursed tax dollars lost as a result of the reductions granted pursuant to this 222.17subdivision section and sections 273.1234 and 273.1235 outside of any statutory 222.18restriction as to levy amount or tax rate. 222.19 (c) There is annually appropriated from the general fund to the commissioner of 222.20revenue an amount necessary to make the payments required by this section. 222.21EFFECTIVE DATE.This section is effective the day following final enactment. 222.22 Sec. 9. Minnesota Statutes 2007 Supplement, section 273.1234, is amended to read: 222.23273.1234 TAX RELIEF FOR DESTROYED PROPERTY; HOMESTEAD 222.24AND DISASTER CREDITS. 222.25 Subdivision 1. Credit provided. The county auditor shall compute a credit for taxes 222.26payable in the year following the year in which the damage or destruction occurred for 222.27each reassessed homestead property within the county that is located within a disaster 222.28or emergency area. The credit is equal to the difference in the net tax on the property 222.29computed using the market value of the property established for the January 2 assessment 222.30in the year in which the damage occurred and as computed using the reassessed value. 222.31 Subd. 2. Credit reimbursements. The county auditor shall certify the credits 222.32granted under this section to the commissioner of revenue for reimbursement to each 222.33taxing jurisdiction in which the damaged property is located. The commissioner shall 223.1make the payments to the taxing jurisdictions containing the property, other than 223.2school districts and the state, at the time distributions are made under section 473H.10, 223.3subdivision 3. Reimbursements to school districts shall be made as provided in section 223.4273.1392 . No reimbursement is to be paid to the state treasury. 223.5 Subd. 3. Appropriation. There is annually appropriated from the general fund 223.6to the commissioner of revenue an amount necessary to make the payments required 223.7by this section. 223.8EFFECTIVE DATE.This section is effective the day following final enactment. 223.9 Sec. 10. Minnesota Statutes 2007 Supplement, section 273.1235, subdivision 1, 223.10is amended to read: 223.11 Subdivision 1. Credit provided. The county board may grant a credit for taxes 223.12payable in the year following the year in which the damage or destruction occurred 223.13for: (1) homestead properties property that meets all the requirements under section 223.14273.1233, subdivision 1, paragraph (a), but that do does not qualify for a credit under 223.15section 273.1234, except that an application need only be submitted by the end of the 223.16year in which the damage occurred; and (2) nonhomestead and utility property meeting 223.17the requirements that meets all the requirements under section 273.1233, subdivision 1, 223.18paragraph (b), except that an application need only be submitted by the end of the year 223.19in which the damage occurred. 223.20EFFECTIVE DATE.This section is effective the day following final enactment. 223.21 Sec. 11. Minnesota Statutes 2007 Supplement, section 273.1235, subdivision 3, 223.22is amended to read: 223.23 Subd. 3. Credit reimbursements. The county auditor shall certify the credits 223.24granted under this section for property within a disaster or emergency area to the 223.25commissioner of revenue for reimbursement to each taxing jurisdiction in which the 223.26damaged property is located. The commissioner shall make the payments to the taxing 223.27jurisdictions containing the property, other than school districts and the state, at the time 223.28distributions are made under section 473H.10, subdivision 3. Reimbursements to school 223.29districts shall be made as provided in section 273.1392. No reimbursement is to be paid 223.30to the state treasury. No reimbursement is to be made for credits to property not located 223.31in a disaster or emergency area. 223.32EFFECTIVE DATE.This section is effective the day following final enactment. 224.1 Sec. 12. Minnesota Statutes 2006, section 273.124, subdivision 13, as amended by 224.2Laws 2008, chapter 154, article 13, section 29, is amended to read: 224.3 Subd. 13. Homestead application. (a) A person who meets the homestead 224.4requirements under subdivision 1 must file a homestead application with the county 224.5assessor to initially obtain homestead classification. 224.6 (b) The format and contents of a uniform homestead application shall be prescribed 224.7by the commissioner of revenue. The application must clearly inform the taxpayer that 224.8this application must be signed by all owners who occupy the property or by the qualifying 224.9relative and returned to the county assessor in order for the property to receive homestead 224.10treatment. 224.11 (c) Every property owner applying for homestead classification must furnish to the 224.12county assessor the Social Security number of each occupant who is listed as an owner 224.13of the property on the deed of record, the name and address of each owner who does not 224.14occupy the property, and the name and Social Security number of each owner's spouse who 224.15occupies the property. The application must be signed by each owner who occupies the 224.16property and by each owner's spouse who occupies the property, or, in the case of property 224.17that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative. 224.18 If a property owner occupies a homestead, the property owner's spouse may not 224.19claim another property as a homestead unless the property owner and the property owner's 224.20spouse file with the assessor an affidavit or other proof required by the assessor stating that 224.21the property qualifies as a homestead under subdivision 1, paragraph (e). 224.22 Owners or spouses occupying residences owned by their spouses and previously 224.23occupied with the other spouse, either of whom fail to include the other spouse's name 224.24and Social Security number on the homestead application or provide the affidavits or 224.25other proof requested, will be deemed to have elected to receive only partial homestead 224.26treatment of their residence. The remainder of the residence will be classified as 224.27nonhomestead residential. When an owner or spouse's name and Social Security number 224.28appear on homestead applications for two separate residences and only one application is 224.29signed, the owner or spouse will be deemed to have elected to homestead the residence for 224.30which the application was signed. 224.31 The Social Security numbers, state or federal tax returns or tax return information, 224.32including the federal income tax schedule F required by this section, or affidavits or other 224.33proofs of the property owners and spouses, and the federal income tax schedule F required 224.34by this section, submitted under this or another section to support a claim for a property 224.35tax homestead classification are private data on individuals as defined by section 13.02, 224.36subdivision 12 , but, notwithstanding that section, the private data may be disclosed to the 225.1commissioner of revenue, or, for purposes of proceeding under the Revenue Recapture 225.2Act to recover personal property taxes owing, to the county treasurer. 225.3 (d) If residential real estate is occupied and used for purposes of a homestead by a 225.4relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 225.5order for the property to receive homestead status, a homestead application must be filed 225.6with the assessor. The Social Security number of each relative and spouse of a relative 225.7occupying the property shall be required on the homestead application filed under this 225.8subdivision. If a different relative of the owner subsequently occupies the property, the 225.9owner of the property must notify the assessor within 30 days of the change in occupancy. 225.10The Social Security number of a relative or relative's spouse occupying the property 225.11is private data on individuals as defined by section 13.02, subdivision 12, but may be 225.12disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 225.13Revenue Recapture Act to recover personal property taxes owing, to the county treasurer. 225.14 (e) The homestead application shall also notify the property owners that the 225.15application filed under this section will not be mailed annually and that if the property 225.16is granted homestead status for any assessment year, that same property shall remain 225.17classified as homestead until the property is sold or transferred to another person, or 225.18the owners, the spouse of the owner, or the relatives no longer use the property as their 225.19homestead. Upon the sale or transfer of the homestead property, a certificate of value must 225.20be timely filed with the county auditor as provided under section 272.115. Failure to 225.21notify the assessor within 30 days that the property has been sold, transferred, or that the 225.22owner, the spouse of the owner, or the relative is no longer occupying the property as a 225.23homestead, shall result in the penalty provided under this subdivision and the property 225.24will lose its current homestead status. 225.25 (f) If the homestead application is not returned within 30 days, the county will send a 225.26second application to the present owners of record. The notice of proposed property taxes 225.27prepared under section 275.065, subdivision 3, shall reflect the property's classification. If 225.28a homestead application has not been filed with the county by December 15, the assessor 225.29shall classify the property as nonhomestead for the current assessment year for taxes 225.30payable in the following year, provided that the owner may be entitled to receive the 225.31homestead classification by proper application under section 375.192. 225.32 (g) At the request of the commissioner, each county must give the commissioner a 225.33list that includes the name and Social Security number of each occupant of homestead 225.34property who is the property owner, property owner's spouse, qualifying relative of a 225.35property owner, or a spouse of a qualifying relative. The commissioner shall use the 226.1information provided on the lists as appropriate under the law, including for the detection 226.2of improper claims by owners, or relatives of owners, under chapter 290A. 226.3 (h) If the commissioner finds that a property owner may be claiming a fraudulent 226.4homestead, the commissioner shall notify the appropriate counties. Within 90 days of 226.5the notification, the county assessor shall investigate to determine if the homestead 226.6classification was properly claimed. If the property owner does not qualify, the county 226.7assessor shall notify the county auditor who will determine the amount of homestead 226.8benefits that had been improperly allowed. For the purpose of this section, "homestead 226.9benefits" means the tax reduction resulting from the classification as a homestead under 226.10section 273.13, the taconite homestead credit under section 273.135, the residential 226.11homestead and agricultural homestead credits under section 273.1384, and the 226.12supplemental homestead credit under section 273.1391. 226.13 The county auditor shall send a notice to the person who owned the affected property 226.14at the time the homestead application related to the improper homestead was filed, 226.15demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 226.16of the homestead benefits. The person notified may appeal the county's determination 226.17by serving copies of a petition for review with county officials as provided in section 226.18278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 226.19Court within 60 days of the date of the notice from the county. Procedurally, the appeal 226.20is governed by the provisions in chapter 271 which apply to the appeal of a property tax 226.21assessment or levy, but without requiring any prepayment of the amount in controversy. If 226.22the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 226.23has been filed, the county auditor shall certify the amount of taxes and penalty to the county 226.24treasurer. The county treasurer will add interest to the unpaid homestead benefits and 226.25penalty amounts at the rate provided in section 279.03 for real property taxes becoming 226.26delinquent in the calendar year during which the amount remains unpaid. Interest may be 226.27assessed for the period beginning 60 days after demand for payment was made. 226.28 If the person notified is the current owner of the property, the treasurer may add the 226.29total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 226.30otherwise payable on the property by including the amounts on the property tax statements 226.31under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 226.32valorem taxes shall include interest accrued through December 31 of the year preceding 226.33the taxes payable year for which the amounts are first added. These amounts, when added 226.34to the property tax statement, become subject to all the laws for the enforcement of real or 226.35personal property taxes for that year, and for any subsequent year. 227.1 If the person notified is not the current owner of the property, the treasurer may 227.2collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 227.3the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 227.4of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 227.5tax obligations of the person who owned the property at the time the application related 227.6to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 227.7of personal liability for the homestead benefits, penalty, interest, and costs, and instead 227.8extend those amounts on the tax lists against the property as provided in this paragraph 227.9to the extent that the current owner agrees in writing. On all demands, billings, property 227.10tax statements, and related correspondence, the county must list and state separately the 227.11amounts of homestead benefits, penalty, interest and costs being demanded, billed or 227.12assessed. 227.13 (i) Any amount of homestead benefits recovered by the county from the property 227.14owner shall be distributed to the county, city or town, and school district where the 227.15property is located in the same proportion that each taxing district's levy was to the total 227.16of the three taxing districts' levy for the current year. Any amount recovered attributable 227.17to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 227.18deposited in the taconite property tax relief account. Any amount recovered that is 227.19attributable to supplemental homestead credit is to be transmitted to the commissioner of 227.20revenue for deposit in the general fund of the state treasury. The total amount of penalty 227.21collected must be deposited in the county general fund. 227.22 (j) If a property owner has applied for more than one homestead and the county 227.23assessors cannot determine which property should be classified as homestead, the county 227.24assessors will refer the information to the commissioner. The commissioner shall make 227.25the determination and notify the counties within 60 days. 227.26 (k) In addition to lists of homestead properties, the commissioner may ask the 227.27counties to furnish lists of all properties and the record owners. The Social Security 227.28numbers and federal identification numbers that are maintained by a county or city 227.29assessor for property tax administration purposes, and that may appear on the lists retain 227.30their classification as private or nonpublic data; but may be viewed, accessed, and used by 227.31the county auditor or treasurer of the same county for the limited purpose of assisting the 227.32commissioner in the preparation of microdata samples under section 270C.12. 227.33 (l) On or before April 30 each year beginning in 2007, each county must provide the 227.34commissioner with the following data for each parcel of homestead property by electronic 227.35means as defined in section 289A.02, subdivision 8: 228.1 (i) the property identification number assigned to the parcel for purposes of taxes 228.2payable in the current year; 228.3 (ii) the name and Social Security number of each occupant of homestead property 228.4who is the property owner, property owner's spouse, qualifying relative of a property 228.5owner, or spouse of a qualifying relative; 228.6 (iii) the classification of the property under section 273.13 for taxes payable in the 228.7current year and in the prior year; 228.8 (iv) an indication of whether the property was classified as a homestead for taxes 228.9payable in the current year because of occupancy by a relative of the owner or by a 228.10spouse of a relative; 228.11 (v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 228.12current year and the prior year; 228.13 (vi) the market value of improvements to the property first assessed for tax purposes 228.14for taxes payable in the current year; 228.15 (vii) the assessor's estimated market value assigned to the property for taxes payable 228.16in the current year and the prior year; 228.17 (viii) the taxable market value assigned to the property for taxes payable in the 228.18current year and the prior year; 228.19 (ix) whether there are delinquent property taxes owing on the homestead; 228.20 (x) the unique taxing district in which the property is located; and 228.21 (xi) such other information as the commissioner decides is necessary. 228.22 The commissioner shall use the information provided on the lists as appropriate 228.23under the law, including for the detection of improper claims by owners, or relatives 228.24of owners, under chapter 290A. 228.25EFFECTIVE DATE.This section is effective the day following final enactment. 228.26 Sec. 13. Minnesota Statutes 2006, section 273.124, subdivision 21, is amended to read: 228.27 Subd. 21. Trust property; homestead. Real property held by a trustee under a trust 228.28is eligible for classification as homestead property if: 228.29 (1) the grantor or surviving spouse of the grantor of the trust occupies and uses the 228.30property as a homestead; 228.31 (2) a relative or surviving relative of the grantor who meets the requirements of 228.32subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1, 228.33paragraph (d), in the case of agricultural property, occupies and uses the property as 228.34a homestead; 229.1 (3) a family farm corporation, joint farm venture, limited liability company, or 229.2partnership operating a family farm in which the grantor or the grantor's surviving spouse 229.3is a shareholder, member, or partner rents the property held by a trustee under a trust, and 229.4the grantor, the spouse of the grantor, or the son or daughter of the grantor, who is also a 229.5shareholder, member, or partner of the corporation, joint farm venture, limited liability 229.6company, or partnership occupies and uses the property as a homestead, or is actively 229.7farming at least 40 acres, including undivided government lots and correctional 40's the 229.8property on behalf of the corporation, joint farm venture, limited liability company, or 229.9partnership; or 229.10 (4) a person who has received homestead classification for property taxes payable in 229.112000 on the basis of an unqualified legal right under the terms of the trust agreement to 229.12occupy the property as that person's homestead and who continues to use the property as 229.13a homestead or a person who received the homestead classification for taxes payable in 229.142005 under clause (3) who does not qualify under clause (3) for taxes payable in 2006 229.15or thereafter but who continues to qualify under clause (3) as it existed for taxes payable 229.16in 2005. 229.17 For purposes of this subdivision, "grantor" is defined as the person creating or 229.18establishing a testamentary, inter Vivos, revocable or irrevocable trust by written 229.19instrument or through the exercise of a power of appointment. 229.20EFFECTIVE DATE.This section is effective the day following final enactment. 229.21 Sec. 14. Minnesota Statutes 2006, section 273.13, subdivision 22, as amended by Laws 229.222008, chapter 154, article 2, section 11, is amended to read: 229.23 Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) 229.24and (c), real estate which is residential and used for homestead purposes is class 1a. In the 229.25case of a duplex or triplex in which one of the units is used for homestead purposes, the 229.26entire property is deemed to be used for homestead purposes. The market value of class 1a 229.27property must be determined based upon the value of the house, garage, and land. 229.28 The first $500,000 of market value of class 1a property has a net class rate of 229.29one percent of its market value; and the market value of class 1a property that exceeds 229.30$500,000 has a class rate of 1.25 percent of its market value. 229.31 (b) Class 1b property includes homestead real estate or homestead manufactured 229.32homes used for the purposes of a homestead by 229.33 (1) any person who is blind as defined in section 256D.35, or the blind person and 229.34the blind person's spouse; or 230.1 (2) any person who is permanently and totally disabled or by the disabled person and 230.2the disabled person's spouse.; or 230.3 (3) the surviving spouse of a permanently and totally disabled veteran homesteading 230.4a property classified under this paragraph for taxes payable in 2008. 230.5 Property is classified and assessed under clause (2) only if the government agency or 230.6income-providing source certifies, upon the request of the homestead occupant, that the 230.7homestead occupant satisfies the disability requirements of this paragraph, and that the 230.8property is not eligible for the valuation exclusion under subdivision 34. 230.9 Property is classified and assessed under paragraph (b) only if the commissioner 230.10of revenue or the county assessor certifies that the homestead occupant satisfies the 230.11requirements of this paragraph. 230.12 Permanently and totally disabled for the purpose of this subdivision means a 230.13condition which is permanent in nature and totally incapacitates the person from working 230.14at an occupation which brings the person an income. The first $50,000 market value of 230.15class 1b property has a net class rate of .45 percent of its market value. The remaining 230.16market value of class 1b property has a class rate using the rates for class 1a or class 2a 230.17property, whichever is appropriate, of similar market value. 230.18 (c) Class 1c property is commercial use real and personal property that abuts public 230.19water as defined in section 103G.005, subdivision 15, and is devoted to temporary and 230.20seasonal residential occupancy for recreational purposes but not devoted to commercial 230.21purposes for more than 250 days in the year preceding the year of assessment, and that 230.22includes a portion used as a homestead by the owner, which includes a dwelling occupied 230.23as a homestead by a shareholder of a corporation that owns the resort, a partner in a 230.24partnership that owns the resort, or a member of a limited liability company that owns 230.25the resort even if the title to the homestead is held by the corporation, partnership, or 230.26limited liability company. For purposes of this clause, property is devoted to a commercial 230.27purpose on a specific day if any portion of the property, excluding the portion used 230.28exclusively as a homestead, is used for residential occupancy and a fee is charged for 230.29residential occupancy. Class 1c property must contain three or more rental units. A 230.30"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual 230.31camping site equipped with water and electrical hookups for recreational vehicles. Class 230.321c property must provide recreational activities such as the rental of ice fishing houses, 230.33boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina 230.34services, launch services, or guide services; or sell bait and fishing tackle. Any unit in 230.35which the right to use the property is transferred to an individual or entity by deeded 230.36interest, or the sale of shares or stock, no longer qualifies for class 1c even though it may 231.1remain available for rent. A camping pad offered for rent by a property that otherwise 231.2qualifies for class 1c is also class 1c, regardless of the term of the rental agreement, as long 231.3as the use of the camping pad does not exceed 250 days. The portion of the property used 231.4as a homestead is class 1a property under paragraph (a). The remainder of the property is 231.5classified as follows: the first $600,000 of market value is tier I, the next $1,700,000 of 231.6market value is tier II, and any remaining market value is tier III. The class rates for class 231.71c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners of real and 231.8personal property devoted to temporary and seasonal residential occupancy for recreation 231.9purposes in which all or a portion of the property was devoted to commercial purposes for 231.10not more than 250 days in the year preceding the year of assessment desiring classification 231.11as class 1c, must submit a declaration to the assessor designating the cabins or units 231.12occupied for 250 days or less in the year preceding the year of assessment by January 15 of 231.13the assessment year. Those cabins or units and a proportionate share of the land on which 231.14they are located must be designated as class 1c as otherwise provided. The remainder of 231.15the cabins or units and a proportionate share of the land on which they are located must be 231.16designated as class 3a commercial. The owner of property desiring designation as class 231.171c property must provide guest registers or other records demonstrating that the units for 231.18which class 1c designation is sought were not occupied for more than 250 days in the 231.19year preceding the assessment if so requested. The portion of a property operated as a 231.20(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other 231.21nonresidential facility operated on a commercial basis not directly related to temporary 231.22and seasonal residential occupancy for recreation purposes does not qualify for class 1c. 231.23 (d) Class 1d property includes structures that meet all of the following criteria: 231.24 (1) the structure is located on property that is classified as agricultural property under 231.25section 273.13, subdivision 23; 231.26 (2) the structure is occupied exclusively by seasonal farm workers during the time 231.27when they work on that farm, and the occupants are not charged rent for the privilege of 231.28occupying the property, provided that use of the structure for storage of farm equipment 231.29and produce does not disqualify the property from classification under this paragraph; 231.30 (3) the structure meets all applicable health and safety requirements for the 231.31appropriate season; and 231.32 (4) the structure is not salable as residential property because it does not comply 231.33with local ordinances relating to location in relation to streets or roads. 231.34 The market value of class 1d property has the same class rates as class 1a property 231.35under paragraph (a). 232.1EFFECTIVE DATE.This section is effective for taxes payable in 2009 and 232.2thereafter. 232.3 Sec. 15. Minnesota Statutes 2006, section 273.13, subdivision 34, as added by Laws 232.42008, chapter 154, article 2, section 14, is amended to read: 232.5 Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value 232.6of property owned by a veteran or by the veteran and the veteran's spouse qualifying 232.7for homestead classification under subdivision 22 or 23 is excluded in determining the 232.8property's taxable market value if it serves as the homestead of a military veteran, as 232.9defined in section 197.447, who has a service-connected disability of 70 percent or more. 232.10To qualify for exclusion under this subdivision, the veteran must have been honorably 232.11discharged from the United States armed forces, as indicated by United States Government 232.12Form DD214 or other official military discharge papers, and must be certified by the 232.13United States Veterans Administration as having a service-connected disability. 232.14 (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is 232.15excluded, except as provided in clause (2); and 232.16 (2) for a total (100 percent) and permanent disability, $300,000 of market value is 232.17excluded. 232.18 (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), 232.19clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the 232.20spouse holds the legal or beneficial title to the homestead and permanently resides there, 232.21the exclusion shall carry over to the benefit of the veteran's spouse for one additional 232.22assessment year or until such time as the spouse sells, transfers, or otherwise disposes of 232.23the property, whichever comes first. 232.24 (d) In the case of an agricultural homestead, only the portion of the property 232.25consisting of the house and garage and immediately surrounding one acre of land qualifies 232.26for the valuation exclusion under this subdivision. 232.27 (e) A property qualifying for a valuation exclusion under this subdivision is not 232.28eligible for the credit under section 273.1384, subdivision 1, or classification under 232.29subdivision 22, paragraph (b). 232.30 (f) To qualify for a valuation exclusion under this subdivision a property owner must 232.31apply to the assessor by July 1 of each assessment year, except that an annual reapplication 232.32is not required once a property has been accepted for a valuation exclusion under paragraph 232.33(b), clause (2), and the property continues to qualify until there is a change in ownership. 233.1EFFECTIVE DATE.This section is effective for assessment year 2008 and 233.2thereafter, for taxes payable in 2009 and thereafter, except that the application date in 233.3paragraph (f) for the 2008 assessment year is extended to September 1, 2008. 233.4 Sec. 16. Minnesota Statutes 2006, section 274.014, subdivision 3, is amended to read: 233.5 Subd. 3. Proof of compliance; transfer of duties. (a) Any city or town that 233.6conducts local boards of appeal and equalization meetings must provide proof to the 233.7county assessor by December 1, 2006, and each year thereafter, that it is in compliance 233.8with the requirements of subdivision 2. Beginning in 2006, this notice must also verify 233.9that there was a quorum of voting members at each meeting of the board of appeal 233.10and equalization in the current year. A city or town that does not comply with these 233.11requirements is deemed to have transferred its board of appeal and equalization powers 233.12to the county beginning with the following year's assessment and continuing unless the 233.13powers are reinstated under paragraph (c). 233.14 (b) The county shall notify the taxpayers when the board of appeal and equalization 233.15for a city or town has been transferred to the county under this subdivision and, prior to 233.16the meeting time of the county board of equalization, the county shall make available to 233.17those taxpayers a procedure for a review of the assessments, including, but not limited to, 233.18open book meetings. This alternate review process shall take place in April and May. 233.19 (c) A local board whose powers are transferred to the county under this subdivision 233.20may be reinstated by resolution of the governing body of the city or town and upon proof 233.21of compliance with the requirements of subdivision 2. The resolution and proofs must be 233.22provided to the county assessor by December 1 in order to be effective for the following 233.23year's assessment. 233.24 (d) A local board whose powers are transferred to the county under this subdivision 233.25may continue to employ a local assessor and is not deemed to have transferred its powers 233.26to make assessments. 233.27EFFECTIVE DATE.This section is effective the day following final enactment. 233.28 Sec. 17. Minnesota Statutes 2006, section 276.04, subdivision 2, as amended by Laws 233.292008, chapter 154, article 2, section 19, is amended to read: 233.30 Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the 233.31printing of the tax statements. The commissioner of revenue shall prescribe the form 233.32of the property tax statement and its contents. The statement must contain a tabulated 233.33statement of the dollar amount due to each taxing authority and the amount of the state 233.34tax from the parcel of real property for which a particular tax statement is prepared. The 234.1dollar amounts attributable to the county, the state tax, the voter approved school tax, the 234.2other local school tax, the township or municipality, and the total of the metropolitan 234.3special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must 234.4be separately stated. The amounts due all other special taxing districts, if any, may be 234.5aggregated except that any levies made by the regional rail authorities in the county of 234.6Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A 234.7shall be listed on a separate line directly under the appropriate county's levy. If the county 234.8levy under this paragraph includes an amount for a lake improvement district as defined 234.9under sections 103B.501 to 103B.581, the amount attributable for that purpose must be 234.10separately stated from the remaining county levy amount. In the case of Ramsey County, 234.11if the county levy under this paragraph includes an amount for public library service 234.12under section 134.07, the amount attributable for that purpose may be separated from the 234.13remaining county levy amount. The amount of the tax on homesteads qualifying under the 234.14senior citizens' property tax deferral program under chapter 290B is the total amount of 234.15property tax before subtraction of the deferred property tax amount. The amount of the 234.16tax on contamination value imposed under sections 270.91 to 270.98, if any, must also 234.17be separately stated. The dollar amounts, including the dollar amount of any special 234.18assessments, may be rounded to the nearest even whole dollar. For purposes of this section 234.19whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar. 234.20The amount of market value excluded under section 273.11, subdivision 16, if any, must 234.21also be listed on the tax statement. 234.22 (b) The property tax statements for manufactured homes and sectional structures 234.23taxed as personal property shall contain the same information that is required on the 234.24tax statements for real property. 234.25 (c) Real and personal property tax statements must contain the following information 234.26in the order given in this paragraph. The information must contain the current year tax 234.27information in the right column with the corresponding information for the previous year 234.28in a column on the left: 234.29 (1) the property's estimated market value under section 273.11, subdivision 1; 234.30 (2) the property's taxable market value after reductions under section 273.11, 234.31subdivisions 1a and 16 ; 234.32 (3) the property's gross tax, before credits; 234.33 (4) for homestead residential and agricultural properties, the credits under section 234.34273.1384 ; 234.35 (5) any credits received under sections 273.119; 273.1234 or 273.1235; 234.36273.135 ; 273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the 235.1amount of credit received under section 273.135 must be separately stated and identified 235.2as "taconite tax relief"; and 235.3 (6) the net tax payable in the manner required in paragraph (a). 235.4 (d) If the county uses envelopes for mailing property tax statements and if the county 235.5agrees, a taxing district may include a notice with the property tax statement notifying 235.6taxpayers when the taxing district will begin its budget deliberations for the current 235.7year, and encouraging taxpayers to attend the hearings. If the county allows notices to 235.8be included in the envelope containing the property tax statement, and if more than 235.9one taxing district relative to a given property decides to include a notice with the tax 235.10statement, the county treasurer or auditor must coordinate the process and may combine 235.11the information on a single announcement. 235.12EFFECTIVE DATE.This section is effective the day following final enactment. 235.13 Sec. 18. Minnesota Statutes 2006, section 290B.04, subdivision 1, is amended to read: 235.14 Subdivision 1. Initial application. (a) A taxpayer meeting the program 235.15qualifications under section 290B.03 may apply to the commissioner of revenue for the 235.16deferral of taxes. Applications are due on or before July 1 for deferral of any of the 235.17following year's property taxes. A taxpayer may apply in the year in which the taxpayer 235.18becomes 65 years old, provided that no deferral of property taxes will be made until the 235.19calendar year after the taxpayer becomes 65 years old. The application, which shall be 235.20prescribed by the commissioner of revenue, shall include the following items and any 235.21other information which the commissioner deems necessary: 235.22 (1) the name, address, and Social Security number of the owner or owners; 235.23 (2) a copy of the property tax statement for the current payable year for the 235.24homesteaded property; 235.25 (3) the initial year of ownership and occupancy as a homestead; 235.26 (4) the owner's household income for the previous calendar year; and 235.27 (5) information on any mortgage loans or other amounts secured by mortgages or 235.28other liens against the property, for which purpose the commissioner may require the 235.29applicant to provide a copy of the mortgage note, the mortgage, or a statement of the 235.30balance owing on the mortgage loan provided by the mortgage holder. The commissioner 235.31may require the appropriate documents in connection with obtaining and confirming 235.32information on unpaid amounts secured by other liens. 235.33 The application must state that program participation is voluntary. The application 235.34must also state that the deferred amount depends directly on the applicant's household 235.35income, and that program participation includes authorization for the annual deferred 236.1amount, the cumulative deferral and interest that appear on each year's notice prepared by 236.2the county under subdivision 6, is public data. 236.3 The application must state that program participants may claim the property tax 236.4refund based on the full amount of property taxes eligible for the refund, including any 236.5deferred amounts. The application must also state that property tax refunds will be used to 236.6offset any deferral and interest under this program, and that any other amounts subject to 236.7revenue recapture under section 270A.03, subdivision 7, will also be used to offset any 236.8deferral and interest under this program. 236.9 (b) As part of the initial application process, the commissioner may require the 236.10applicant to obtain at the applicant's own cost and submit: 236.11 (1) if the property is registered property under chapter 508 or 508A, a copy of the 236.12original certificate of title in the possession of the county registrar of titles (sometimes 236.13referred to as "condition of register"); or 236.14 (2) if the property is abstract property, a report prepared by a licensed abstracter 236.15showing the last deed and any unsatisfied mortgages, liens, judgments, and state and 236.16federal tax lien notices which were recorded on or after the date of that last deed with 236.17respect to the property or to the applicant. 236.18 The certificate or report under clauses (1) and (2) need not include references to 236.19any documents filed or recorded more than 40 years prior to the date of the certification 236.20or report. The certification or report must be as of a date not more than 30 days prior 236.21to submission of the application. 236.22 The commissioner may also require the county recorder or county registrar of the 236.23county where the property is located to provide copies of recorded documents related to 236.24the applicant or the property, for which the recorder or registrar shall not charge a fee. The 236.25commissioner may use any information available to determine or verify eligibility under 236.26this section. The household income from the application is private data on individuals as 236.27defined in section 13.02, subdivision 12. 236.28EFFECTIVE DATE.This section is effective for data collected or maintained by 236.29the commissioner of revenue beginning the day following final enactment. 236.30 Sec. 19. Minnesota Statutes 2006, section 469.040, subdivision 4, is amended to read: 236.31 Subd. 4. Facilities funded from multiple sources. In the metropolitan area, as 236.32defined in section 473.121, subdivision 2, the tax treatment provided in subdivision 3 236.33applies to that portion of any multifamily rental housing facility represented by the ratio of 236.34(1) the number of units in the facility that are subject to the requirements of Section 5 of 237.1the United States Housing Act of 1937, as the result of the implementation of a federal 237.2court order or consent decree to (2) the total number of units within the facility. 237.3 The housing and redevelopment authority for the city in which the facility is located, 237.4any public entity exercising the powers of such housing and redevelopment authority, or 237.5the county housing and redevelopment authority for the county in which the facility is 237.6located, shall annually certify to the assessor responsible for assessing the facility, at the 237.7time and in the manner required by the assessor, the number of units in the facility that are 237.8subject to the requirements of Section 5 of the United States Housing Act of 1937. 237.9 Nothing in this subdivision shall prevent that portion of the facility not subject to 237.10this subdivision from meeting the requirements of section 273.128, and for that 237.11purpose the total number of units in the facility must be taken into account. 237.12EFFECTIVE DATE.This section is effective retroactively for taxes payable in 237.132006 and thereafter. 237.14 Sec. 20. Minnesota Statutes 2006, section 469.174, subdivision 10b, is amended to 237.15read: 237.16 Subd. 10b. Qualified disaster area. A "qualified disaster area" is an area that 237.17meets the following requirements: 237.18 (1) parcels consisting of 70 percent of the area of the district were occupied by 237.19buildings, streets, utilities, paved or gravel parking lots, or other similar structures 237.20immediately before the disaster or emergency; 237.21 (2) the area of the district was subject to a disaster or emergency, as defined in 237.22section 273.123, subdivision 1 273.1231, subdivision 2, within the 18-month period 237.23ending on the day the request for certification of the district is made; and 237.24 (3) 50 percent or more of the buildings in the area have suffered substantial damage 237.25as a result of the disaster or emergency. 237.26EFFECTIVE DATE.This section is effective the day following final enactment. 237.27 Sec. 21. Minnesota Statutes 2006, section 469.177, subdivision 1c, is amended to read: 237.28 Subd. 1c. Original net tax capacity adjustments; presidential disaster area. (a) 237.29The provisions of this subdivision apply to a district located in a disaster area, as described 237.30in section 273.123, subdivision 1, paragraph (b) 273.1231, subdivision 3, paragraph (a), 237.31clause (1), and are effective for taxes payable in the first calendar year beginning at least 237.32four months after the date of the determination. 237.33 (b) For a district certified before the date of the disaster area determination as 237.34provided in section 273.123, subdivision 1, paragraph (b) 273.1231, subdivision 3, 238.1paragraph (a), clause (1), upon the request of the municipality, the county auditor shall 238.2reduce the original net tax capacity of the district by the reduction in the net tax capacity 238.3of properties in the district that is attributable to the physical effects of the disaster, but not 238.4below zero. The assessor shall determine the amount of the reduction in market value that 238.5is attributable to the physical effects of the disaster to be used by the county auditor in 238.6computing the reduction in net tax capacity. 238.7 (c) For a district that does not qualify under paragraph (b) and for which the request 238.8for certification is made in the same calendar year as the disaster area determination, 238.9upon the request of the municipality, the assessor shall determine the reduction in market 238.10value of properties in the district that is attributable to the physical effects of the disaster. 238.11The county auditor shall use the reduced market value in certifying the original net tax 238.12capacity of the district. 238.13EFFECTIVE DATE.This section is effective the day following final enactment. 238.14ARTICLE 16 238.15DEPARTMENT MISCELLANEOUS 238.16 Section 1. Minnesota Statutes 2006, section 16D.02, subdivision 3, is amended to read: 238.17 Subd. 3. Debt. "Debt" means an amount owed to the state directly, or through a 238.18state agency, on account of a fee, duty, lease, direct loan, loan insured or guaranteed by 238.19the state, rent, service, sale of real or personal property, overpayment, fine, assessment, 238.20penalty, restitution, damages, interest, tax, bail bond, forfeiture, reimbursement, liability 238.21owed, an assignment to the state including assignments under section 256.741, the Social 238.22Security Act, or other state or federal law, recovery of costs incurred by the state, or any 238.23other source of indebtedness to the state. Debt also includes amounts owed to individuals 238.24as a result of civil, criminal, or administrative action brought by the state or a state agency 238.25pursuant to its statutory authority or for which the state or state agency acts in a fiduciary 238.26capacity in providing collection services in accordance with the regulations adopted under 238.27the Social Security Act at Code of Federal Regulations, title 45, section 302.33. When the 238.28commissioner provides collection services pursuant to a debt qualification plan, debt also 238.29includes an amount owed to the courts, local government units, Minnesota state colleges 238.30and universities governed by the Board of Trustees of the Minnesota State Colleges and 238.31Universities, or University of Minnesota for which the commissioner provides collection 238.32services pursuant to contract. 238.33EFFECTIVE DATE.This section is effective the day following final enactment. 238.34 Sec. 2. Minnesota Statutes 2006, section 16D.02, subdivision 6, is amended to read: 239.1 Subd. 6. Referring agency. "Referring agency" means a state agency, local 239.2government unit, Minnesota state colleges and universities governed by the Board of 239.3Trustees of the Minnesota State Colleges and Universities, University of Minnesota, or 239.4a court, that has entered into a debt qualification plan with the commissioner to refer 239.5debts to the commissioner for collection. 239.6EFFECTIVE DATE.This section is effective the day following final enactment. 239.7 Sec. 3. Minnesota Statutes 2006, section 16D.04, subdivision 2, as amended by Laws 239.82008, chapter 154, article 15, section 2, is amended to read: 239.9 Subd. 2. Agency participation. (a) A referring agency must refer, by electronic 239.10means, debts to the commissioner for collection. Responsibility for the debt, including the 239.11reporting of the debt to the commissioner of finance and the decision with regard to the 239.12continuing collection and uncollectibility of the debt, remains with the referring agency. 239.13Decisions with regard to continuing collection and the uncollectibility of referred debts 239.14shall be made by the commissioner who shall then notify the commissioner of finance and 239.15the referring agency. A decision by the commissioner that a referred debt is uncollectible 239.16does not prevent the referring agency from taking additional collection action. 239.17 (b) Before a debt becomes 121 days past due, a referring agency may refer the 239.18debt to the commissioner for collection at any time after a debt becomes delinquent and 239.19uncontested and the debtor has no further administrative appeal of the amount of the debt. 239.20When a debt owed to a referring agency becomes 121 days past due, the referring agency 239.21must refer the debt to the commissioner for collection. This requirement does not apply if 239.22there is a dispute over the amount or validity of the debt, if the debt is the subject of legal 239.23action or administrative proceedings, or the agency determines that the debtor is adhering 239.24to acceptable payment arrangements. The commissioner may provide that certain types of 239.25debt need not be referred to the commissioner for collection under this paragraph. Methods 239.26and procedures for referral must follow internal guidelines prepared by the commissioner. 239.27 (c) If the referring agency is a court, the court must furnish a debtor's Social Security 239.28number to the commissioner when the court refers the debt. 239.29EFFECTIVE DATE.This section is effective for debts referred after December 239.3031, 2008. 239.31 Sec. 4. Minnesota Statutes 2006, section 270A.08, subdivision 1, is amended to read: 239.32 Subdivision 1. Notice to debtor. (a) Not later than five days after the claimant 239.33agency has sent notification to the department pursuant to section 270A.07, subdivision 1, 239.34the claimant agency shall send a written notification to the debtor asserting the right of the 240.1claimant agency to the refund or any part thereof. If the notice is returned to the claimant 240.2agency as undeliverable, or the claimant agency has reason to believe the debtor did not 240.3receive the notice, the claimant agency shall obtain the current last known address of the 240.4debtor from the commissioner and resend the corrected notice. 240.5 (b) If a debt has been referred to the commissioner for collection under chapter 16D, 240.6and the referring agency meets the definition of claimant agency under this chapter, the 240.7commissioner must notify the debtor prior to using revenue recapture under this chapter 240.8for collection of the debt. The notice must be sent by United States mail or personal 240.9delivery to the last known address of the debtor. 240.10EFFECTIVE DATE.This section is effective for debts referred after December 240.1131, 2008. 240.12 Sec. 5. Minnesota Statutes 2006, section 270C.33, subdivision 5, is amended to read: 240.13 Subd. 5. Prohibition against collection during appeal period of an order. No 240.14collection action can be taken on an order of assessment, or any other order imposing a 240.15liability, including the filing of liens under section 270C.63, and no late payment penalties 240.16may be imposed when a return has been filed for the tax type and period upon which the 240.17order is based, during the appeal period of an order. The appeal period of an order ends: 240.18(1) 60 days after the order has been mailed to the taxpayer by the commissioner; (2) if an 240.19administrative appeal is filed under section 270C.35, 60 days after determination of the 240.20administrative appeal; (3) if an appeal to Tax Court is filed under chapter 271, when the 240.21decision of the Tax Court is made; or (4) if an appeal to Tax Court is filed and the appeal is 240.22based upon a constitutional challenge to the tax, 60 days after final determination of the 240.23appeal. This subdivision does not apply to a jeopardy assessment under section 270C.36, 240.24or a jeopardy collection under section 270C.36. 240.25EFFECTIVE DATE.This section is effective the day following final enactment. 240.26ARTICLE 17 240.27MISCELLANEOUS 240.28 Section 1. Minnesota Statutes 2006, section 60A.196, is amended to read: 240.2960A.196 DEFINITIONS. 240.30 Unless the context otherwise requires, the following terms have the meanings given 240.31them for the purposes of sections 60A.195 to 60A.209: 241.1 (a) "Surplus lines insurance" means insurance placed with an insurer permitted 241.2to transact the business of insurance in this state only pursuant to sections 60A.195 to 241.360A.209 . 241.4 (b) "Eligible surplus lines insurer" means an insurer recognized as eligible to write 241.5insurance business under sections 60A.195 to 60A.209 but not licensed by any other 241.6Minnesota law to transact the business of insurance. 241.7 (c) "Ineligible surplus lines insurer" means an insurer not recognized as an eligible 241.8surplus lines insurer pursuant to sections 60A.195 to 60A.209 and not licensed by any 241.9other Minnesota law to transact the business of insurance. "Ineligible surplus lines 241.10insurer" includes a risk retention group as defined under the Liability Risk Retention 241.11Act, Public Law 99-563. 241.12 (d) "Surplus lines licensee" or "licensee" means a person licensed under sections 241.1360A.195 to 60A.209 to place insurance with an eligible or ineligible surplus lines insurer. 241.14 (e) "Association" means an association registered under section 60A.208. 241.15 (f) "Alien insurer" means any insurer which is incorporated or otherwise organized 241.16outside of the United States. 241.17 (g) "Insurance laws" means chapters 60 to 79 inclusive. 241.18 (h) "Stamping" means electronically assigning a unique identifying number that is 241.19specific to a submitted policy, contract, or insurance document. 241.20EFFECTIVE DATE.This section is effective the day following final enactment 241.21and applies to policies written or renewed on or after that date. 241.22 Sec. 2. [60A.2085] SURPLUS LINES ASSOCIATION OF MINNESOTA. 241.23 Subdivision 1. Association created; duties. There is hereby created a nonprofit 241.24association to be known as the Surplus Lines Association of Minnesota. All surplus lines 241.25licensees are members of this association. Section 60A.208, subdivision 5, does not apply 241.26to the provisions of this section. The association shall perform its functions under the 241.27plan of operation established under subdivision 3 and must exercise its powers through a 241.28board of directors established under subdivision 2. The association shall be authorized 241.29and have the duty to: 241.30 (1) receive, record, and stamp all surplus lines insurance documents that surplus 241.31lines licensees are required to file with the association; 241.32 (2) prepare and deliver monthly to the commissioners of revenue and commerce a 241.33report regarding surplus lines business. The report must include a list of all the business 241.34procured during the preceding month, in the form the commissioners prescribe; 242.1 (3) educate its members regarding the surplus lines law of this state including 242.2insurance tax responsibilities and the rules and regulations of the commissioners of 242.3revenue and commerce relative to surplus lines insurance; 242.4 (4) communicate with organizations of agents, brokers, and admitted insurers with 242.5respect to the proper use of the surplus lines market; 242.6 (5) employ and retain persons necessary to carry out the duties of the association; 242.7 (6) borrow money necessary to effect the purposes of the association; 242.8 (7) enter contracts necessary to effect the purposes of the association; 242.9 (8) provide other services to its members that are incidental or related to the 242.10purposes of the association; and 242.11 (9) take other actions reasonably required to implement the provisions of this section. 242.12 Subd. 2. Board of directors. (a) The commissioner shall appoint an interim board 242.13of five directors within 30 days of enactment of this section. The interim board must: 242.14 (1) establish a plan of operation within 60 days after the appointment of the interim 242.15board; 242.16 (2) create a stamping office that is operational no later than December 31, 2008; and 242.17 (3) conduct an election for a board of directors by the membership after December 242.1831, 2008, and no later than one year after the appointment of the interim board. 242.19 (b) Once the responsibilities of the interim board in paragraph (a) are fulfilled, the 242.20association shall function through a board of directors composed of the following: 242.21 (1) one director appointed by the commissioner of revenue; 242.22 (2) one director appointed by the commissioner of commerce; and 242.23 (3) at least five but no more than seven directors elected by the members. The 242.24elected directors must be members of the association. 242.25 Directors may serve until their successors are appointed or elected and their terms 242.26are completed as outlined in the plan of operation. 242.27 Subd. 3. Plan of operation. (a) The plan of operation shall provide for the 242.28formation, operation, and governance of the association. The plan of operation must 242.29provide for the election of a board of directors by the members of the association. The 242.30board of directors shall elect officers as provided for in the plan of operation. The plan 242.31of operation shall establish the manner of voting and may weigh each member's vote to 242.32reflect the annual surplus lines insurance premium written by the member. Members 242.33employed by the same or affiliated employers may consolidate their premiums written 242.34and delegate an individual officer or partner to represent the member in the exercise of 242.35association affairs, including service on the board of directors. 243.1 (b) The plan of operation shall provide for an independent audit once each year of all 243.2the books and records of the association and a report of such independent audit shall be 243.3made to the board of directors, the commissioner of revenue, and the commissioner of 243.4commerce, with a copy made available to each member to review at the association office. 243.5 (c) The plan of operation and any amendments to the plan of operation shall be 243.6submitted to the commissioner and shall be effective upon approval in writing by the 243.7commissioner. The association and all members shall comply with the plan of operation or 243.8any amendments to it. Failure to comply with the plan of operation or any amendments 243.9shall constitute a violation for which the commissioner may issue an order requiring 243.10discontinuance of the violation. 243.11 (d) If the interim board of directors fails to submit a suitable plan of operation 243.12within 60 days following the creation of the interim board, or if at any time thereafter the 243.13association fails to submit required amendments to the plan, the commissioner may submit 243.14to the association a plan of operation or amendments to the plan, which the association 243.15must follow. The plan of operation or amendments submitted by the commissioner shall 243.16continue in force until amended by the commissioner or superseded by a plan of operation 243.17or amendment submitted by the association and approved by the commissioner. A plan 243.18of operation or an amendment submitted by the commissioner constitutes an order of 243.19the commissioner. 243.20 Subd. 4. Reporting requirement. The association shall file with the commissioner: 243.21 (1) a copy of its plan of operation and any amendments to it; 243.22 (2) a current list of its members revised at least annually; and 243.23 (3) the name and address of a member of the board residing in this state upon 243.24whom notices or orders of the commissioner or processes issued at the direction of the 243.25commissioner may be served. 243.26 Subd. 5. Examination. The commissioner shall, at such times as deemed necessary, 243.27make or cause to be made an examination of the association. The officers, managers, 243.28agents, and employees of the association may be examined at any time, under oath, and 243.29shall exhibit all books, records, accounts, documents, or agreements governing its method 243.30of operation. The commissioner shall furnish a copy of the examination report to the 243.31association. If the commissioner finds the association to be in violation of this section, the 243.32commissioner may issue an order requiring the discontinuance of the violation. 243.33 Subd. 6. Immunity. There shall be no liability on the part of and no causes of action 243.34of any nature shall arise against the association, its directors, officers, agents, or employees 244.1for any action taken or omitted by them in the performance of their powers and duties 244.2under this section, absent gross negligence or willful misconduct. 244.3 Subd. 7. Stamping fee. The services performed by the association shall be 244.4funded by a stamping fee assessed for each premium-bearing document submitted to 244.5the association. The stamping fee shall be established by the board of directors of the 244.6association from time to time. The stamping fee shall be paid by the insured to the surplus 244.7lines licensee and remitted electronically to the association by the surplus lines licensee. 244.8 Subd. 8. Data classification. Unless otherwise classified by statute, a temporary 244.9classification under section 13.06, or federal law, information obtained by the 244.10commissioner from the association is public, except that any data identifying insureds is 244.11private data on individuals or nonpublic data as defined in section 13.02, subdivisions 244.129 and 12. 244.13EFFECTIVE DATE.This section is effective the day following final enactment 244.14and applies to policies written or renewed on or after that date. 244.15 Sec. 3. [60A.2086] LICENSEE'S DUTY TO SUBMIT DOCUMENTS; PENALTY. 244.16 Subdivision 1. Submission of documents to the Surplus Lines Association 244.17of Minnesota; certification. (a) A surplus lines licensee shall submit every insurance 244.18policy or contract issued under the licensee's license to the Surplus Lines Association of 244.19Minnesota for recording and stamping. The submission and stamping must be effected 244.20through electronic means. The submission must include: 244.21 (1) the name of the insured; 244.22 (2) a description and location of the insured property or risk; 244.23 (3) the amount insured; 244.24 (4) the gross premiums charged or returned; 244.25 (5) the name of the surplus lines insurer from whom coverage has been procured; 244.26 (6) the kind or kinds of insurance procured; and 244.27 (7) the amount of premium subject to tax. 244.28 (b) The submission of insurance policies or contracts to the Surplus Lines 244.29Association of Minnesota constitutes a certification by the surplus lines licensee, or by the 244.30insurance producer who presented the risk to the surplus lines licensee for placement as a 244.31surplus lines risk, that the insurance policies or contracts were procured in accordance 244.32with sections 60A.195 to 60A.209. 244.33 Subd. 2. Stamping requirement; penalty. (a) It shall be unlawful for an insurance 244.34agent, broker, or surplus lines licensee to deliver in this state any surplus lines insurance 245.1policy or contract unless the insurance document is stamped by the association. A 245.2licensee's failure to comply with the requirements of this subdivision shall not affect the 245.3validity of the coverage. 245.4 (b) Any insurance agent, broker, or surplus lines licensee who delivers in this state 245.5any insurance policy or contract that has not been stamped by the association shall be 245.6subject to a penalty payable to the commissioner as follows: 245.7 (1) $50 for delivery of the first unstamped policy; 245.8 (2) $250 for delivery of a second unstamped policy; and 245.9 (3) $1,000 per policy for delivery of any additional unstamped policies. 245.10EFFECTIVE DATE.This section is effective January 1, 2009, and applies to 245.11policies written or renewed after December 31, 2008. 245.12 Sec. 4. [62U.071] HEALTH INSURANCE CREDIT. 245.13 Subdivision 1. Definitions. (a) For purposes of this section, the following terms 245.14have the meanings given them. 245.15 (b) "Commissioner" means the commissioner of commerce. 245.16 (c) "Employee" means an employee currently on an employer's payroll other than a 245.17retiree or disabled former employee. 245.18 (d) "Employer" means a person, firm, corporation, partnership, association, business 245.19trust, or other entity employing one or more persons, including a political subdivision of 245.20the state, filing payroll tax information on such employed person or persons. 245.21 (e) "Section 125 plan" means a cafeteria or premium-only plan under section 125 of 245.22the Internal Revenue Code that allows employees to pay for health insurance premiums 245.23with pretax dollars. 245.24 (f) "Small employer" means an employer with two to 50 employees. 245.25 Subd. 2. Tax credits allowed; generally. (a) Upon application, the commissioner 245.26shall allow tax credits to eligible small employers as incentives for the employers to 245.27provide section 125 plans or to encourage their employees to participate in existing section 245.28125 plans. The applications for the credits must be made in the form and manner and at 245.29the times prescribed by the commissioner. 245.30 (b) The credits allowed under this section must not exceed the liability for tax paid 245.31by the employer. The liability for tax includes tax paid by the employer under chapter 245.32290, ad valorem property tax on property used in the conduct of their trade or business, 245.33and the insurance premiums tax under chapter 297I. The commissioner must verify that 245.34the amount of the credit paid under this section does not exceed the employer's liability 245.35for tax paid in the previous calendar year. 246.1 Subd. 3. Establishment credit. (a) The commissioner shall pay a tax credit to 246.2eligible small employers that establish section 125 plans to the extent that credit authority 246.3is available under subdivision 5 for the fiscal year. An eligible small employer is eligible 246.4for a credit under this subdivision only once. 246.5 (b) To be eligible for a credit, a small employer must: 246.6 (1) not have offered health insurance to employees through a group health insurance 246.7plan, as defined in section 62A.10, or through a self-insured plan, as defined in section 246.862E.02, in the 12 months before applying for a tax credit under this subdivision; 246.9 (2) have established a section 125 plan within 90 days before applying for a tax 246.10credit under this subdivision, and must not have offered a section 125 plan to employees 246.11for at least a nine-month period before the establishment of the section 125 plan under 246.12this subdivision; and 246.13 (3) certify to the commissioner that the employer has established a section 125 plan 246.14and meets the requirements of 2008 S.F. 3780, article 4, section 10, subdivisions 2 and 246.153, if enacted. 246.16 (c) The amount of the credit under this subdivision equals the lesser of: 246.17 (1) the employer's actual cost to establish the section 125 plan; or 246.18 (2) $350. 246.19 Subd. 4. Participation credit. (a) The commissioner shall pay a tax credit to 246.20eligible small employers with section 125 plans. The amount of the credit equals the 246.21least of the following amounts: 246.22 (1) 50 percent of the amount the employer spends during the calendar year for 246.23incentives to encourage participation by the employer's nonparticipating employees in 246.24the employer's section 125 plan; 246.25 (2) $200 for each nonparticipating employee who begins participating in the 246.26employer's section 125 plan; or 246.27 (3) the amount of credit certificates the employer received for the calendar year. 246.28 (b) An eligible employer is a small employer that: 246.29 (1) offers a section 125 plan to its employees; 246.30 (2) has five percent or more of its employees not participating in the section 125 plan 246.31during the quarter prior to the application for the tax credit; and 246.32 (3) pays average compensation to its nonparticipating employees of no more 246.33than the maximum annual income of an individual who is eligible to participate in the 246.34MinnesotaCare program under chapter 256L. 246.35 (c) For purposes of this subdivision, "incentives to encourage participation" includes 246.36paying an increased employer share of the premium or other costs of the insurance, 247.1contributing to the employee's health savings account, or taking other measures that the 247.2commissioner considers likely to foster higher rates of participation; and "nonparticipating 247.3employee" means an employee who is not participating in the section 125 plan, and who is 247.4not otherwise covered by health insurance other than MinnesotaCare. 247.5 Subd. 5. Credits and credit certificates. (a) The commissioner may transfer 247.6all or part of the appropriation provided in 2008 S.F. 3780, article 4, section 10, 247.7subdivision 4, if enacted, to provide tax credits under subdivision 3. The commissioner 247.8shall allow tax credits under subdivision 3 to applicants on a first-come-first-served 247.9basis and the maximum amount of credits allowed for each fiscal year is limited to the 247.10amount transferred from the appropriation provided in S.F. 3780, article 4, section 10, 247.11subdivision 4, if enacted. If applications for credits exceed the allowance for the fiscal 247.12year, the commissioner shall hold the applications and award the credits from the amount 247.13appropriated for that purpose in the next fiscal year. If the commissioner does not transfer 247.14any of the appropriation provided in 2008 S.F. 3780, article 4, section 10, subdivision 4, if 247.15enacted, no tax credits are allowed under subdivision 3. 247.16 (b) Upon application, the commissioner shall award credit certificates to eligible 247.17employers for credits under subdivision 4. The maximum amount of credit certificates 247.18is limited to $730,000 per fiscal year. The commissioner shall award the certificates to 247.19eligible employers on a first-come-first-served basis, and certificates will apply to the 247.20calendar year in which the employer intends to provide incentives for nonparticipating 247.21employees to begin participating in the employer's section 125 plan. No employer may be 247.22awarded more than $5,000 in credit certificates. Following the close of the calendar year, 247.23employers who have been awarded certificates must report to the commissioner on the 247.24amount spent for incentives to encourage participation by nonparticipating employees, 247.25and the number of nonparticipating employees who became participating employees, and 247.26the commissioner must allow the appropriate credit amount as provided in subdivision 4, 247.27paragraph (a). 247.28 (c) The commissioner may transfer credit authority between the authorizations in 247.29paragraphs (a) and (b) based on the applications for the credits under subdivisions 3 and 4 247.30or on other factors so that in the commissioner's opinion the allocation between the two 247.31credits will provide a more effective incentive to expand health care coverage. 247.32 Subd. 6. Appropriation. The amount necessary to award credits under subdivision 247.335, paragraph (b), is appropriated from the general fund to the commissioner of commerce 247.34in fiscal year 2009. 247.35EFFECTIVE DATE.This section is effective for fiscal year 2009. 248.1 Sec. 5. Laws 2006, chapter 269, section 2, is amended to read: 248.2 Sec. 2. DEDICATION FEE. 248.3 The Minneapolis Park and Recreation Board and the Minneapolis City Council 248.4may jointly exercise the powers conferred under Minnesota Statutes, section 462.358, 248.5with respect to requiring that a reasonable portion of land be dedicated to the public 248.6or imposing a dedication fee on new housing units and new commercial and industrial 248.7development in the city, wherever located, for public parks, playgrounds, recreational 248.8facilities, wetlands, trails, or open space. The dedication of land or dedication fee must 248.9be imposed by an ordinance jointly enacted by the park board and the city council. The 248.10ordinance may exclude senior housing and affordable housing from paying the fee or the 248.11dedication of land. The provisions of Minnesota Statutes, section 462.358, subdivisions 248.122b , paragraph (b), and 2c, apply to the imposition, application, and use of the dedication of 248.13land or the dedication fee. 248.14EFFECTIVE DATE.This section is effective upon compliance by the Minneapolis 248.15Park and Recreation Board and the Minneapolis City Council with Minnesota Statutes, 248.16section 645.021, subdivision 3. 248.17 Sec. 6. DATA UPDATE. 248.18 The commissioner of revenue must continue to maintain, update, and make available 248.19the information required under Laws 1987, chapter 268, article 7, section 1, subdivision 248.206, paragraph (b). The commissioner must provide the most complete and current data 248.21available, when requested, to the chairs of the senate and house of representatives 248.22committees on taxes. 248.23 Sec. 7. APPROPRIATIONS. 248.24 Subdivision 1. Department of Revenue; assessment assistance. $100,000 is 248.25appropriated to the commissioner of revenue from the general fund for fiscal year 2009 to 248.26assist local assessors in valuing industrial special-use industrial properties. 248.27 Subd. 2. Department of Revenue; onetime appropriations. (a) $15,000 is 248.28appropriated to the commissioner of revenue to administer the study of the property tax 248.29exemption for institutions of purely public charity. 248.30 (b) $200,000 is appropriated to the commissioner of revenue to prepare the database 248.31required in section 5 matching homeowners' property, property tax, income, and income 248.32tax information. 248.33 (c) The appropriations under this subdivision are onetime appropriations from the 248.34general fund for fiscal year 2009 and are not added to the agency's base budget. 249.1 Subd. 3. Department of Administration. $60,000 is appropriated from the general 249.2fund in fiscal year 2009 to the commissioner of administration to pay the cost incurred by 249.3the Land Management Information Center to prepare township acreage data. $50,000 of 249.4this appropriation is onetime and is not added to the agency's base budget; $10,000 of this 249.5appropriation is added to the agency's budget." 249.6Delete the title and insert: 249.7"A bill for an act 249.8relating to the financing and operation of state and local government; modifying 249.9property tax refund; making policy, technical, administrative, enforcement, 249.10collection, refund, clarifying, and other changes to income, franchise, property, 249.11sales and use, minerals, aggregate, motor vehicle, wheelage, mortgage, deed, 249.12cigarette and tobacco, gasoline, and estate taxes, and other taxes and tax-related 249.13provisions; providing for aids to local governments; changing, eliminating, 249.14and providing property tax exemptions and credits; modifying job opportunity 249.15building zone program; modifying green acres; providing aggregate resource 249.16preservation property tax law; modifying levies, property valuation procedures, 249.17homestead provisions, property tax classes, and class rates; providing for and 249.18modifying sales tax exemptions; exempting two-wheel, motorized vehicles 249.19from wheelage tax; providing credits; providing for additional financing of 249.20metropolitan area transit and paratransit capital expenditures; authorizing 249.21issuance of certain obligations; modifying provision governing bonding for 249.22county libraries; changing and authorizing powers, duties, and requirements 249.23of local governments and authorities and state departments or agencies; 249.24modifying, extending, and authorizing certain tax increment financing districts; 249.25authorizing and modifying local sales taxes; providing federal updates; changing 249.26accelerated sales tax; creating Surplus Lines Association of Minnesota; 249.27changing provisions related to data practices and debt collection; requiring 249.28studies; providing appointments; providing levy limits; modifying taxation 249.29of foreign operating corporations; requiring a state review and approval of a 249.30local economic development project; modifying park board fees; modifying 249.31certain tax districts; providing for sale of forest lands; prohibiting imposition 249.32of new local sales tax; providing income tax credit for military service; 249.33providing economic development powers and incentives; providing health 249.34insurance credit; appropriating money;amending Minnesota Statutes 2006, 249.35sections 13.51, subdivision 3; 13.585, subdivision 5; 16D.02, subdivisions 249.363, 6; 16D.04, subdivision 2, as amended; 60A.196; 116J.993, subdivision 3; 249.37116J.994, subdivisions 2, 5, 8; 126C.41, subdivision 2; 163.051, subdivision 249.381; 168.012, subdivision 1, by adding a subdivision; 168.013, subdivision 1f; 249.39168A.03, subdivision 1; 169.01, by adding a subdivision; 169.781, subdivisions 249.401, as amended, 2, as amended; 270A.08, subdivision 1; 270B.15; 270C.33, 249.41subdivision 5; 270C.56, subdivision 1, as amended; 270C.85, subdivision 2; 249.42272.02, subdivisions 13, 20, 21, 27, 31, 38, 49, 55, 84, by adding subdivisions; 249.43272.03, subdivision 3, by adding a subdivision; 273.11, subdivisions 8, 14a, 14b, 249.44by adding a subdivision; 273.111, subdivisions 3, as amended, 4, 8, 9, 11, 11a, 249.4514, by adding subdivisions; 273.121, as amended; 273.124, subdivisions 1, 6, 249.4613, as amended, 21; 273.128, subdivision 1, as amended; 273.13, subdivisions 249.4722, as amended, 23, as amended, 25, as amended, 33, 34, as added; 273.1384, 249.48subdivision 2; 273.19, subdivision 1; 274.014, subdivision 3; 274.14; 275.065, 249.49subdivision 8, by adding a subdivision; 275.70, subdivision 5, by adding a 249.50subdivision; 275.71; 275.74, subdivision 2; 276.04, subdivision 2, as amended; 249.51282.08; 287.20, subdivisions 3a, 9, by adding a subdivision; 289A.12, by adding 249.52a subdivision; 289A.18, subdivision 1, as amended; 289A.19, subdivision 249.532, by adding a subdivision; 289A.20, subdivision 4, as amended; 289A.55, 249.54by adding a subdivision; 289A.60, subdivision 15, as amended, by adding a 250.1subdivision; 290.01, subdivisions 6b, 19c, as amended, 19d, as amended; 290.06, 250.2subdivision 33, as amended, by adding a subdivision; 290.0677, subdivisions 250.31, as amended, 2, 3, by adding a subdivision; 290.068, subdivision 3; 290.07, 250.4subdivision 1; 290.091, subdivision 2, as amended; 290.191, subdivisions 5, 250.56; 290.21, subdivision 4; 290.92, subdivisions 26, 31, as added; 290A.04, 250.6subdivision 2; 290B.04, subdivision 1; 291.03, subdivision 1, by adding a 250.7subdivision; 295.50, subdivision 4; 295.52, subdivision 4, as amended; 295.53, 250.8subdivision 4a; 296A.07, subdivision 4; 296A.08, subdivision 3; 296A.16, 250.9subdivision 2; 297A.61, subdivisions 22, 29; 297A.665, as amended; 297A.67, 250.10subdivisions 7, as amended, 28; 297A.70, subdivision 8; 297A.71, subdivision 250.1123, by adding a subdivision; 297A.75; 297A.99, subdivision 1, as amended; 250.12297A.995, subdivision 10, by adding subdivisions; 297B.01, subdivision 7, by 250.13adding a subdivision; 297B.03; 297F.01, subdivision 8; 297F.09, subdivision 250.1410, as amended; 297F.21, subdivision 1; 297G.01, subdivision 9; 297G.09, 250.15subdivision 9, as amended; 297H.09; 297I.05, subdivision 12; 298.01, by adding 250.16a subdivision; 298.22, subdivisions 2, 5a, as added, by adding a subdivision; 250.17298.24, subdivision 1, as amended; 298.25, as amended; 298.28, subdivisions 250.183, 9d, as added, 12; 298.292, subdivision 2, as amended; 298.405, subdivision 250.191; 298.75, subdivisions 1, as amended, 2, 6, 7, as amended; 365.243, by adding 250.20a subdivision; 365A.095, as amended; 383A.80, subdivision 4; 383A.81, 250.21subdivisions 1, 2; 383B.80, subdivision 4; 383B.81, subdivision 2; 383E.20; 250.22429.101, subdivision 1; 469.033, subdivision 6; 469.040, subdivision 4; 250.23469.174, subdivision 10b; 469.177, subdivision 1c, by adding a subdivision; 250.24469.1813, subdivision 8; 469.319; 469.3201; 473.39, by adding a subdivision; 250.25474A.047, subdivision 1; 477A.011, subdivisions 34, 36, as amended, by 250.26adding subdivisions; 477A.0124, subdivision 5; 477A.013, subdivisions 8, 250.27as amended, 9, as amended; 477A.03; Minnesota Statutes 2007 Supplement, 250.28sections 115A.1314, subdivision 2; 268.19, subdivision 1, as amended; 250.29273.1231, subdivision 7, by adding a subdivision; 273.1232, subdivision 1; 250.30273.1233, subdivisions 1, 3; 273.1234; 273.1235, subdivisions 1, 3; 273.124, 250.31subdivision 14, as amended; 273.1393; 290.01, subdivision 19b, as amended; 250.32297A.70, subdivision 3; 298.227; Laws 1991, chapter 291, article 8, section 27, 250.33subdivisions 3, as amended, 4, as amended; Laws 1995, chapter 264, article 250.345, section 46, subdivision 2; Laws 1998, chapter 389, article 8, section 45, 250.35subdivision 3; Laws 1999, chapter 243, article 4, section 18, subdivisions 1, 3, 250.364; Laws 2003, chapter 127, article 10, section 31, subdivision 1; Laws 2006, 250.37chapter 259, article 10, section 14, subdivision 1; Laws 2006, chapter 269, 250.38section 2; Laws 2008, chapter 154, article 2, sections 11; 27; article 3, section 250.393; article 8, section 14; article 9, sections 23; 24; proposing coding for new law 250.40in Minnesota Statutes, chapters 60A; 116J; 169; 272; 273; 275; 469; 477A; 250.41proposing coding for new law as Minnesota Statutes, chapter 62U; repealing 250.42Minnesota Statutes 2006, sections 272.027, subdivision 3; 273.11, subdivision 250.4314; 273.111, subdivision 6; 298.405, subdivisions 2, 3, 4; 477A.014, subdivision 250.445; Minnesota Statutes 2007 Supplement, section 477A.014, subdivision 4; Laws 250.452005, First Special Session chapter 3, article 5, section 24; Minnesota Rules, 250.46parts 8031.0100, subpart 3; 8093.2100." We request the adoption of this report and repassage of the bill.House Conferees: (Signed) Ann Lenczewski, Paul Marquart, Jim Davnie, Debra Hilstrom, Lyle KoenenSenate Conferees: (Signed) Thomas M. Bakk, Rod Skoe, Dan Larson, D. Scott Dibble, Mee Moua 251.1 We request the adoption of this report and repassage of the bill. 251.2 House Conferees:(Signed) 251.3 ..... ..... 251.4 Ann Lenczewski Paul Marquart 251.5 ..... ..... 251.6 Jim Davnie Debra Hilstrom 251.7 ..... 251.8 Lyle Koenen 251.9 Senate Conferees:(Signed) 251.10 ..... ..... 251.11 Thomas M. Bakk Rod Skoe 251.12 ..... ..... 251.13 Dan Larson D. Scott Dibble 251.14 ..... 251.15 Mee Moua

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HF 3149

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