HF 3201

FOURTH ENGROSSMENT

Omnibus technical tax bill; Tax policy and administration provisions modified relating to income, franchise, property, sales, and other taxes.

ARTICLE 1 -- AIDS TO LOCAL GOVERNMENT

Section 1: City aid base language is modified.

Section 2: City formula aid language is modified.

Section 3: City aid distribution language is modified.

Section 4: Mahnomen County; County, City, School District, Property Tax Reimbursement, Aid Appropriation language is modified.

Section 5: Mahnomen County; City, County and School District Tax Base Adjustments language is modified.

Section 6: Utility property; tax base adjustments for calculation of school districts and levies language is modified.

Section 7: Utility property; tax base adjustments for calculation of county, city, and town aids language is modified.

ARTICLE 2 -- PROPERTY TAXES

Section 1: Allocation language is modified.

Section 2: Methodology language is modified.

Section 3: Modular homes used as models by dealers language is modified.

Section 4: Apprenticeship training facilities subdivision added.

Section 5: Monosloped roofs for feedlots and manure storage areas subdivision added.

Section 6: Requirement language is modified.

Section 7: Agricultural homesteads; special provisions language is amended.

Section 8: Annual registration of certain relative homesteads language is added.

Section 9: Manufactured homes; sectional structures language is amended.

Section 10: Requirement language is modified.

Section 11: Class 1 property language is modified.

Section 12: Class 2 property language is modified.

Section 13: Class 4 property language is modified. Charitable and nonprofit organizations property tax exemption provided.

Section 14: Homestead of disabled veteran language is added.

Section 15: Certification of Class 1b property - homestead declaration before 2009 and thereafter language is provided.

Section 16: Seasonal residential recreational tax capacity language is modified.

Section 17: Joint public hearing; nonmetropolitan county, cities, and school districts language is added.

Section 18: Special taxing districts; definitions are modified.

Section 19: Contents of tax statements language is amended.

Section 20: Dismissal of petition; exclusion of certain evidence language is modified.

Section 21: Class 3a property language is amended.

Section 22: Delinquent taxes may be paid in inverse order statute is amended.

Section 23: Calculation of incentive payment statute is amended.

Section 24: Definition of municipality statute is amended.

Section 25: General powers of authority statute is amended.

Section 26: Creation of an airport authority; dissolution.
Subdivision 1. Member details and definitions are provided.
Subdivision 2. Process to establish authority is provided.
Subdivision 3. Airport authority commission guidelines are provided.
Subdivision 4. Appointment of commissioners process is provided.
Subdivision 5. Compensation, meetings, and officers details are provided.
Subdivision 6. Process to increase size of authority is provided.
Subdivision 7. Process to decrease size of authority is provided.
Subdivision 8. Process to dissolve authority is provided.

Section 27: Tax levy may be certified by an airport authority - process is provided.

Section 28: Hardship assessment deferral for seniors, disabled, or military persons.

Section 29: Minneapolis, City of; street maintenance and lighting language is modified.

Section 30: Tax, payment of expenses language is modified.

Section 31: Tax levy language is modified.

Section 32: Lakeview cemetery association language provided.
Subdivision 1. Authorization to establish the association.
Subdivision 2. Additions and withdrawal of membership to the association.
Subdivision 3. Operation, tax levy language is provided.

Section 33: Repealer - past statutes are repealed.

ARTICLE 3 -- INCOME TAXES

Section 1: Returns by persons, corporations, cooperatives, governmental entities, or school districts language is amended.

Section 2: Additions to federal taxable income language is amended.

Section 3: Subtractions from federal taxable income language is amended.

Section 4: Corporations; additions to federal taxable income language is amended.

Section 5: Credit allowed - language modified.

Section 6: Nondeductible items language is modified.
Subdivision 1. Expenses, interest, and taxes language is modified.
Subdivision 2. Fines, fees, and penalties language is added.

Section 7: Income not derived from conduct of a trade or business - language modified.

Section 8: Payments to persons who are not employees - language added.

Section 9: Audit and report to legislature - The commissioner must conduct a random sample audit of withholdings and returns associated with those withholdings. The commissioner must report on the findings of the audit to the committees of the Senate and House of Representatives with jurisdiction over taxes no later than February 1, 2011.

ARTICLE 4 -- FEDERAL UPDATE

Section 1: Internal Revenue Code language is amended through February 13, 2008.

Section 2: Net income language is modified.

Section 3: Additions to federal taxable income language is modified.

Section 4: Corporations; additions to federal taxable income language is modified.

Section 5: Internal Revenue Code is amended through February 13, 2008.

Section 6: Schedules of rates for individuals, estates, and trusts language is modified.

Section 7: Definitions language is modified.

Section 8: Internal Revenue Code is amended through February 13, 2008.

Section 9: Scope language is modified.

ARTICLE 5 -- SALES AND USE TAX

Section 1: Manufactured and modular housing language is added.

Section 2: City of Duluth, authoriziation for additional sales tax language is provided.

Section 3: City of Bemidji language is modified.
Subdivision 1. Sales and use tax authorized
Subdivision 2. Use of revenues
Subdivision 3. Bonds
Subdivision 4. Termination of tax

ARTICLE 6 -- JUNE ACCELERATED TAX PAYMENTS

Section 1: Sales and use tax is amended.

Section 2: Accelerated payment of June sales tax liability; penalty for underpayment language is modified.

Section 3: Accelerated tax payment; cigarette or tobacco products distributor language modified.

Section 4: Accelerated tax payment; penalty language is provided.

ARTICLE 7 -- SPECIAL TAXES

Section 1: Determination of property includable in the Minnesota gross estate of a decedent language provided.

Section 2: All-terrain vehicle language amended.

Section 3: Inventory; judicial determination; appeal; disposition of seized property language is amended.

Section 4: Premiums paid to certain foreign insurance companies language added.

Section 5: Temporary petrofund fee exemption for Minnesota commercial airlines language provided.

ARTICLE 8 -- MINERALS

Section 1: Commercial-industrial property language is modified.

Section 2: Increase in net tax capacity language is modified.

Section 3: Forest trust - forest lands in the taconite assistance area may be purchased with specifically authorized funds and held in trust for the benefit of the citizens as the Iron Ranger Miners' Memorial Forest.

Section 4: Iron Range Higher Education Committee membership language is amended.

Section 5: Imposed; calculation - details regarding the tax on concentrate, taconite, iron sulphides, and the mining and quarrying of these minerals.

Section 6: Taxes additional to occupation tax; in lieu of other taxes language is modified.

Section 7: School districts - proceeds from various mining companies are distributed to applicable school districts, language is modified.

Section 8: Counties - rate of tax per ton is modified.

Section 9: Iron Range higher education account language is added.

Section 10: Distribution of taconite municipal aid account language is modified.

Section 11: Use of money - money in the Douglas J. Johnson economic protection trust fund, language is modified.

Section 12: Expenditure of funds language is modified.

Section 13: Grant and loan fund - language is added regarding a grant to the city of Virginia for connecting sewer and water lines to the St. Louis County maintenance garage and extending the lines to interconnect with the city of Gilbert's sewer and water lines.

Section 14: Public works and local economic development fund language is modified.

Section 15: Definitions including "aggregate metal", "person", "operator", "extraction site", "importer", "county", and "borrow" are modified.

Section 16: Report and remittance language is modified regarding the proceeds of the tax on aggregate material.

Section 17: Proceeds of taxes language is modified to include "aggregate materials".

Section 18: Iron Range resources and rehabilitation board; appropriation; retire bonds language is provided.

ARTICLE 9 -- ECONOMIC DEVELOPMENT

Section 1: Additional border city allocations, 2008 language is provided.

Section 2: Redevelopment district language is modified.

Section 3: Renewal and renovation district language is modified.

Section 4: Tax increment financing plan language is modified.

Section 5: Municipality approval language is modified.

Section 6: Duration of tax increment financing districts language is modified.

Section 7: Excess increments language is modified.

Section 8: Prohibited facilities language is modified.

Section 9: Parcels not includable in districts language is modified.

Section 10: Requirement imposed language is modified.

Section 11: Expenditures outside district language is modified.

Section 12: Original net tax capacity language is modified.

Section 13: Interfund loans language is modified.

Section 14: Preconditions to establish district language is modified.

Section 15: Establishment language is modified.

Section 16: Eligible activities language is modified.

Section 17: Housing account language is modified.

Section 18: Authority - housing replacement projects in the city of Crystal, language is modified.

Section 19: Creation of projects - language is modified regarding the number of parcels in the city of Minneapolis to be included in housing replacement districts.

Section 20: Grants to qualifying businesses language is modified.

Section 21: Burnsville; Northwest quadrant tax increment financing
Subdivision 1. Definitions include "city", "project area", and "soil deficiency district".
Subdivision 2. Special rules - if the city elects, upon the adoption of the tax increment finance plan for the district, the rules in this section apply to various types of districts.

Section 22: City of Eyota; tax increment financing district
Subdivision 1. Authorization - the city of Eyota is deemed to be a small city
Subdivision 2. Local approval - this section is effective for the city of Eyota upon approval of Eyota's governing body

Section 23: City of Fridley; tax increment financing district; special rules language is modified.

Section 24: City of New Brighton; tax increment financing; expenditures outside district language is modified.

Section 25: Repealer language is modified and effective date is provided.

ARTICLE 10 -- PUBLIC FINANCE

Section 1: Amount language is modified.

Section 2: Purchase of certain equipment language is modified.

Section 3: Market value language is modified.

Section 4: Time of notice language is modified.

Section 5: Definitions
Subdivision 1. Subordinate service district definition is modified.
Subdivision 2. Special services definition is added.

Section 6: Creation language is modified.
Subdivision 1. Petition language is provided.
Subdivision 2. Public hearing language is modified.
Subdivision 3. Approval and disapproval language is modified.

Section 7: Financing language is modified.
Subdivision 1. Budget language regarding the town board is provided.
Subdivision 2. Bonds language is modified.
Subdivision 3. Covenants to secure obligations language is modified.

Section 8: Petition for removal of district and procedure language is provided.
Subdivision 1. Petition details are provided.
Subdivision 2. Bonds language is added.

Section 9: Capital notes language is modified.

Section 10: Limitations on amount language is modified.

Section 11: Financing language is modified.
Subdivision 1. Budget language is modified.
Subdivision 2. Bonds language is added.
Subdivision 3. Covenants to secure obligations language is added.
Subdivision 4. Continuance in the event of withdrawal language is added.

Section 12: Equipment acquisition; capitol notes language is modified.

Section 13: Creation - The Hennepin County Housing and Redevelopment language is modified.

Section 14: Limitation language is modified.

Section 15: Cities may issue capitol notes for capital equipment language is modified.

Section 16: Financing purchase of certain equipment language is modified.

Section 17: City definition is modified.

Section 18: Trust for postemployment benefits
Subdivision 1. Authorization and establishment language provided.
Subdivision 2. Purpose of the trust language is provided.
Subdivision 3. Trust administrator guidelines are provided.
Subdivision 4. Account maintenance language is provided.
Subdivision 5. Investment language is provided.
Subdivision 6. Limit on deposit language is provided.
Subdivision 7. Withdrawal of funds and termination of account language is provided.
Subdivision 8: Status of irrevocable trust language is provided.

Section 19: Obligations language is modified.

Section 20: Anticipation of grants language is added.

Section 21: Net debt language is modified.

Section 22: Certain purposes language is modified.

Section 23: Grant anticipation financing of transportation or transit projects language is modified.
Subdivision 1. Definitions added include "political subdivision", and "issuing political subdivision".
Subdivision 2. Authorization language is provided.
Subdivision 3. Issuance of obligations language is provided.
Subdivision 4. Use of proceeds language is provided.

Section 24: Generally - except as otherwise provided no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt of three percent of the market value of taxable property in the municipality.

Section 25: Approval by electors and exceptions language is provided.

Section 26: Street reconstruction language is modified.

Section 27: Validation language is provided.

Section 28: Town of Crane Lake, Certificates of Indebtedness language is provided.

Section 29: City of Winsted, bonding authority language is provided.

ARTICLE 11 -- DEPARTMENT INCOME AND FRANCHISE TAXES

Section 1: Debt language is modified.

Section 2: Information included in income tax return language is modified.

Section 3: Withholding statement to employee or payee and to commissioner language is modified.

Section 4: Regulated investment companies reporting exempt-interest dividends language is modified.

Section 5: Individual income, fiduciary income, corporate franchise, and entertainment taxes; partnership and S corporation returns, information returns, and mining company returns language is modified.

Section 6: Federal tax changes language is modified.

Section 7: Penalties; failure to file informational return and incorrect identification number language is modified.

Section 8: Penalties relating to property tax refunds language is modified.

Section 9: Reportable transaction understatement language is modified.

Section 10: Preparer identification number language is provided.

Section 11: Subtractions from federal taxable income language is modified.

Section 12: Corporations; modifications decreasing federal taxable income language is modified.

Section 13: Bovine testing credit language is provided.

Section 14: Inflation adjustment language is modified.

Section 15: Inflation adjustment language is modified.

Section 16: Exemption amount language is modified.

Section 17: Alternative minimum taxable income language is modified.

Section 18: "Deposit" definition is provided.

Section 19: "Dependent" definition is provided.

ARTICLE 12 -- DEPARTMENT SALES AND USE TAX

Section 1: Bad debt loss language is modified.

Section 2: Border city zone refunds language is provided.

Section 3: Penalty for failure to properly complete sales and use tax return language is modified.

Section 4: Penalty for failure to report liquor sales language is provided.

Section 5: Sale and purchase language is modified.

Section 6: Retail sale language is modified.

Section 7: Sales price language is modified.

Section 8: Tangible personal property language is modified.

Section 9: Telecommunications services language is modified.

Section 10: Bundled transaction language is provided.

Section 11: Ancillary services language is provided.

Section 12: Conference bridging service language is provided.

Section 13: Detailed telecommunications billing service language is provided.

Section 14: Directory assistance definition is provided.

Section 15: Vertical service language is provided.

Section 16: Voice mail service language is provided.

Section 17: Ring tone definition is provided.

Section 18: Fur clothing language is provided.

Section 19: Use of tangible personal property or taxable services language is modified.

Section 20: Presumption of tax; burden of proof language is modified.

Section 21: Defined telecommunications services sourcing language is modified.

Section 22: Postpaid calling service language is modified.

Section 23: Prepaid calling service language is modified.

Section 24: Prepaid wireless calling service language is provided.

Section 25: Ancillary service language is provided.

Section 26: Drugs and medical devices language is modified.

Section 27: Clothing language is modified.

Section 28: Baby products language is modified.

Section 29: Advertising materials language is modified.

Section 30: Packing materials language is modified.

Section 31: Telecommunications, cable television, and direct satellite equipment language is modified.

Section 32: Materials consumed in agricultural production language is modified.

Section 33: Hospitals and outpatient surgical centers language is modified.

Section 34: Private communication service for State Lottery language is provided.

Section 35: Exemption Certificates - Content and form of exemption certification and purchaser requirement language is modified.

Section 36: Liquor reporting requirements and penalty language is provided.

Section 37: Payment of tax language is modified.

Section 38: Ordinary course of business language is modified.

Section 39: Sales tax exemption; equipment; construction materials language is modified.

Section 40: Fur tax payments language is provided.

Section 41: Repealer language is provided.

ARTICLE 13 -- DEPARTMENT PROPERTY TAXES

Section 1: Flight property language is modified.

Section 2: Assessment of flight property language is modified.

Section 3: Report by airline company language is modified.

Section 4: Airflight property tax lien language is modified.

Section 5: Penalties
Subdivision 1. Penalty for late filing language is provided.
Subdivision 2. Penalty for repeated instances of late filing language is provided.
Subdivision 3. Penalty for frivolous report language is provided.
Subdivision 4. Penalty for fraudulent report language is provided.
Subdivision 5. Penalties added to tax language is provided.

Section 6: Examinations, investigations and subpoenas language is provided.

Section 7: Tax capacity language is modified.

Section 8: Appeal language is modified.

Section 9: Creation, purpose, and powers of the Board of Assessors language is modified.

Section 10: Definition of "board" is provided.

Section 11: Members of the Board of Assessors details are provided.

Section 12: License; refusal or revocation language is modified.

Section 13: Prohibited activity language is modified.

Section 14: Charges for courses, examinations or materials language is modified.

Section 15: Disposition of fees language is modified.

Section 16: Training courses regulations language is modified.

Section 17: Rules are provided.

Section 18: Licensure of qualified persons language is modified.

Section 19: Employment of licensed assessors language is modified.

Section 20: Commissioner may require social security or identifying numbers on forms language is modified.

Section 21: Authority language is modified.

Section 22: Job opportunity building zone property language is modified.

Section 23: Requirement language is modified.

Section 24: Cities and townships; employment of licensed assessor language is provided.

Section 25: County or local assessing district to assume cost of training language is provided.

Section 26: Requirements language is modified.

Section 27: Conservation property tax valuation language is modified.

Section 28: Valuation of real property, notice language is modified.

Section 29: Homestead application language is modified.

Section 30: Disparity reduction credit language is modified.

Section 31: Listing and assessment by commissioner language is modified.

Section 32: Listing and assessment by commissioner language is modified.

Section 33: Report required language is modified.

Section 34: Recommended and ordered values language is provided.

Section 35: Ordinary board; meetings, deadlines, grievances language is modified.

Section 36: Members, meetings, and rules for equalizing assignments language is modified.

Section 37: County Boards; appeals and equalization course and meeting requirements language is provided.
Subdivision 1. Handbook for county boards
Subdivision 2. Appeals and equalization course
Subdivision 3. Proof of compliance; transfer of duties

Section 38: Notice of proposed property taxes language is modified.

Section 39: Public advertisement language is modified.

Section 40: Special taxing districts; organization date; certification of levy or special assessments language is modified.

Section 41: Electronic tax statements language is provided.

Section 42: Partial payments language is modified.

Section 43: Due dates and penalties language is modified.

Section 44: Qualifying homestead definition is provided.

Section 45: Claimant definition is provided.

Section 46: Applications language is modified.

Section 47: Annual certification language is modified.

Section 48: Penalties for removal language is modified.

Section 49: Appeals language is provided.
Subdivision 1. Claimant right to reconsideration
Subdivision 2. Appeal by claimant
Subdivision 3. Notice date
Subdivision 4. Time and content for administrative appeal
Subdivision 5. Extensions
Subdivision 6. Determination of appeal
Subdivision 7. Agreement determining issues under appeal
Subdivision 8. Appeal to Tax Court
Subdivision 9: Exemption from Administrative Procedure Act

Section 50: Repealer language is provided.

ARTICLE 14 -- DEPARTMENT SPECIAL TAXES

Section 1: Deficit assessments language is modified.

Section 2: Premium tax language is modified.

Section 3: Exemptions language is modified.

Section 4: Tax-forfeited land language is modified.

Section 5: Use tax and prescription drugs language is modified.

Section 6: Tax collection language is modified.

Section 7: Pharmacy refund language is modified.

Section 8: Tobacco products use tax language is modified.

Section 9: Consumer use tax, use tax return, and cigarette consumer language is modified.

Section 10: Insurance policies surcharge language is modified.

Section 11: Exemptions language is modified.

Section 12: Joint Underwriting Association offset language is modified.

Section 13: Definition of tax language is modified.

ARTICLE 15 -- DEPARTMENT MISCELLANEOUS

Section 1: Duties language is modified.

Section 2: Agency participation language is modified.

Section 3: Computation language is modified

Section 4: Adjustment of rate language is modified.

Section 5: Refunds not subject to attachment or garnishment language is provided.

Section 6: Required and excluded tax preparers language is modified.

Section 7: Liability imposed language is modified.

Section 8: Period of limitations language is modified.

Section 9: State reimbursement language is modified.

ARTICLE 16 -- MISCELLANEOUS

Section 1: Local impact notes language is modified.

Section 2: Miscellaneous exceptions language is modified.

Section 3: Compilation of local impact notes language is modified.

Section 4: Certain political subdivisions, report language is modified.

Section 5: Local revenue language is modified.

Section 6: Claimant agency language is modified.

Section 7: Priority of claims language is modified.

Section 8: Tax may be imposed; Otter Tail County language is modified.

Section 9: Repealer language provided.

SNA 3/10/08