1.1 	A bill for an act
1.2 	relating to financing and operation of government in this state; making 
1.3 	policy, technical, administrative, payment, enforcement, collection, proceeds 
1.4 	distribution, refund, and other changes to income, franchise, property, state 
1.5 	and local sales and use, motor vehicle sales, minerals, estate, cigarette and 
1.6 	tobacco products, gasoline, liquor, insurance premiums, mortgage and deed, 
1.7 	healthcare gross revenues, and wheelage taxes, and other taxes and tax-related 
1.8 	provisions; conforming to certain changes in the Internal Revenue Code; 
1.9 	changing accelerated sales tax payments; providing for licensure of assessors; 
1.10 	changing provisions relating to the sustainable forest resource management 
1.11 	incentive program; providing for aids to local governments; providing for 
1.12 	state debt collection; changing border city allocation, tax increment financing, 
1.13 	and economic development, provisions, powers, and incentives; authorizing 
1.14 	and providing terms and conditions related to the issuance of obligations and 
1.15 	the financing of public improvements and services; changing and imposing 
1.16 	powers, duties, and requirements on certain local governments and authorities 
1.17 	and on the commissioner of revenue and other state departments and agencies; 
1.18 	extending the time for certain publications of notices; requiring notices and 
1.19 	publication of information; extending a petrofund fee exemption; providing for 
1.20 	purchase of forest lands; authorizing and validating trusts to pay certain public 
1.21 	postemployment benefits; providing for iron range higher education grants; 
1.22 	changing revenue recapture, local impact notes, and data practices provisions; 
1.23 	providing penalties; appropriating money;amending Minnesota Statutes 2006, 
1.24 	sections 3.987, subdivision 1; 3.988, subdivision 3; 3.989, subdivisions 2, 
1.25 	3; 16A.103, subdivision 2; 16D.04, subdivisions 1, 2; 16D.11, subdivisions 
1.26 	2, 7; 62I.06, subdivision 6; 71A.04, subdivision 1; 97A.061, subdivision 
1.27 	2; 118A.03, subdivision 3; 123B.61; 127A.48, subdivision 2; 216B.1646; 
1.28 	270.071, subdivision 7; 270.072, subdivisions 2, 3, 6; 270.074, subdivision 3; 
1.29 	270.076, subdivision 1; 270.41, subdivisions 1, 2, 3, 5, by adding a subdivision; 
1.30 	270.44; 270.45; 270.46; 270.47; 270.48; 270.50; 270A.03, subdivision 2; 
1.31 	270A.10; 270C.306; 270C.34, subdivision 1; 270C.446, subdivision 2; 270C.56, 
1.32 	subdivision 1; 270C.63, subdivision 9; 272.02, by adding subdivisions; 272.115, 
1.33 	subdivision 1; 273.05, by adding a subdivision; 273.111, subdivision 3; 
1.34 	273.117; 273.121; 273.124, subdivision 13, by adding a subdivision; 273.125, 
1.35 	subdivision 8; 273.128, subdivision 1; 273.13, subdivisions 22, 24, 25, by 
1.36 	adding a subdivision; 273.1315; 273.1398, subdivision 4; 273.33, subdivision 2; 
1.37 	273.37, subdivision 2; 273.371, subdivision 1; 274.01, subdivision 1; 274.13, 
1.38 	subdivision 1; 275.025, subdivision 3; 275.065, subdivision 5a, by adding a 
1.39 	subdivision; 275.066; 275.067; 275.61, subdivision 1; 276.04, subdivision 2, by 
2.1 	adding a subdivision; 276A.01, subdivision 3; 276A.04; 277.01, subdivision 2; 
2.2 	278.05, subdivision 6; 279.01, subdivision 1; 279.37, subdivision 1a; 280.39; 
2.3 	287.22; 287.2205; 289A.02, subdivision 7; 289A.08, subdivision 11; 289A.09, 
2.4 	subdivision 2; 289A.12, subdivisions 4, 14; 289A.18, subdivision 1; 289A.20, 
2.5 	subdivision 4; 289A.38, subdivision 7; 289A.40, subdivision 2; 289A.56, by 
2.6 	adding a subdivision; 289A.60, subdivisions 8, 12, 15, 25, 27, by adding 
2.7 	subdivisions; 290.01, subdivisions 19a, 19c, 19d; 290.06, subdivisions 2c, 33; 
2.8 	290.067, subdivision 2b; 290.0671, subdivision 7; 290.0677, subdivision 1; 
2.9 	290.091, subdivision 3; 290.0921, subdivision 3; 290.10; 290.17, subdivision 2; 
2.10 	290.191, subdivision 8; 290.92, by adding a subdivision; 290A.03, subdivision 7; 
2.11 	290B.03, subdivision 2; 290C.02, subdivision 3; 290C.04; 290C.05; 290C.07; 
2.12 	290C.11; 291.005, subdivision 1; 291.215, subdivision 1; 295.52, subdivisions 4, 
2.13 	4a; 295.54, subdivision 2; 296A.18, subdivision 4; 297A.61, subdivisions 3, 4, 7, 
2.14 	10, 24, by adding subdivisions; 297A.63, subdivision 1; 297A.665; 297A.668, by 
2.15 	adding a subdivision; 297A.669, subdivisions 3, 13, 14, by adding subdivisions; 
2.16 	297A.67, subdivisions 7, 8, 9; 297A.68, subdivisions 11, 16, 35; 297A.69, 
2.17 	subdivision 2; 297A.70, subdivision 7, by adding a subdivision; 297A.72; 
2.18 	297A.90, subdivision 2; 297A.99, subdivision 1; 297B.035, subdivision 1; 
2.19 	297F.06, subdivision 4; 297F.09, subdivision 10; 297F.21, subdivision 3; 
2.20 	297F.25, by adding a subdivision; 297G.09, subdivision 9; 297I.06, subdivisions 
2.21 	1, 2; 297I.15, by adding a subdivision; 297I.20, subdivision 2; 297I.40, 
2.22 	subdivision 5; 298.22, by adding a subdivision; 298.2214, subdivision 2; 298.24, 
2.23 	subdivision 1; 298.25; 298.28, subdivisions 4, 5, by adding a subdivision; 
2.24 	298.282, subdivision 1; 298.292, subdivision 2; 298.296, subdivision 2; 
2.25 	298.2961, subdivisions 4, 5; 298.75, subdivisions 1, 3, 7, by adding a subdivision; 
2.26 	331A.05, subdivision 2; 360.031; 365A.02; 365A.04; 365A.08; 365A.095; 
2.27 	373.01, subdivision 3; 373.40, subdivision 4; 375B.09; 383A.80, subdivision 4; 
2.28 	383A.81, subdivisions 1, 2; 383B.117, subdivision 2; 383B.77, subdivisions 1, 
2.29 	2; 383B.80, subdivision 4; 410.32; 412.301; 435.193; 453A.02, subdivision 
2.30 	3; 469.169, by adding a subdivision; 469.1734, subdivision 6; 469.174, 
2.31 	subdivisions 10, 10a; 469.175, subdivisions 1, 3; 469.176, subdivisions 1, 2, 4l, 
2.32 	7; 469.1761, subdivision 1; 469.1763, subdivision 2; 469.177, subdivision 1; 
2.33 	469.178, subdivision 7; 469.1791, subdivision 3; 473.39, by adding subdivisions; 
2.34 	475.51, subdivision 4; 475.52, subdivision 6; 475.53, subdivision 1; 475.58, 
2.35 	subdivisions 1, 3b; 477A.011, subdivision 36; 477A.013, subdivisions 8, 9; 
2.36 	Minnesota Statutes 2007 Supplement, sections 270A.03, subdivision 5; 272.02, 
2.37 	subdivision 64; 273.124, subdivision 14; 275.065, subdivision 3; 290.01, 
2.38 	subdivisions 19, 19b, 31; 290A.03, subdivision 15; 424A.10, subdivision 3; 
2.39 	Laws 1973, chapter 393, section 1, as amended; Laws 1980, chapter 511, section 
2.40 	1, subdivision 2, as amended; Laws 1988, chapter 645, section 3, as amended; 
2.41 	Laws 1989, chapter 211, section 8, subdivision 4, as amended; Laws 1993, 
2.42 	chapter 375, article 9, section 45, subdivisions 2, as amended, 3, as amended, 
2.43 	4, as amended; Laws 1994, chapter 587, article 9, section 14, subdivisions 1, 2, 
2.44 	3; Laws 1995, chapter 264, article 5, sections 44, subdivision 4, as amended; 
2.45 	45, subdivision 1, as amended; Laws 1999, chapter 243, article 4, section 18, 
2.46 	subdivisions 1, 3, 4; Laws 2003, chapter 128, article 1, section 172, as amended; 
2.47 	Laws 2005, First Special Session chapter 3, article 5, section 39; article 10, 
2.48 	section 23, as amended; Laws 2006, chapter 259, article 11, section 3; proposing 
2.49 	coding for new law in Minnesota Statutes, chapters 270; 270C; 273; 274; 290C; 
2.50 	297A; 360; 383C; 383D; 383E; 471; 475; repealing Minnesota Statutes 2006, 
2.51 	sections 16A.1522; 163.051, subdivision 5; 270.073; 270.41, subdivision 4; 
2.52 	270.43; 270.51; 270.52; 270.53; 295.60; 297A.61, subdivision 20; 297A.668, 
2.53 	subdivision 6; 297A.67, subdivision 22; 469.174, subdivision 29; Laws 1973, 
2.54 	chapter 393, section 2; Laws 1994, chapter 587, article 9, section 8, subdivision 
2.55 	1, as amended; Laws 1998, chapter 389, article 11, section 18.
2.56 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.1 	ARTICLE 1
3.2 	AIDS TO LOCAL GOVERNMENTS

3.3 	Section 1. Minnesota Statutes 2006, section 477A.011, subdivision 36, is amended to 
3.4 	read:
3.5 		Subd. 36.City aid base. (a) Except as otherwise provided in this subdivision, 
3.6 	"city aid base" is zero.
3.7 	(b) The city aid base for any city with a population less than 500 is increased by 
3.8 	$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount 
3.9 	of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
3.10 	increased by $40,000 for aids payable in calendar year 1995 only, provided that:
3.11 	(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
3.12 	(ii) the city portion of the tax capacity rate exceeds 100 percent; and
3.13 	(iii) its city aid base is less than $60 per capita.
3.14 	(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and 
3.15 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
3.16 	paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
3.17 	(i) the city has a population in 1994 of 2,500 or more;
3.18 	(ii) the city is located in a county, outside of the metropolitan area, which contains a 
3.19 	city of the first class;
3.20 	(iii) the city's net tax capacity used in calculating its 1996 aid under section 
3.21 	477A.013 is less than $400 per capita; and
3.22 	(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of 
3.23 	property located in the city is classified as railroad property.
3.24 	(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and 
3.25 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
3.26 	paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
3.27 	(i) the city was incorporated as a statutory city after December 1, 1993;
3.28 	(ii) its city aid base does not exceed $5,600; and
3.29 	(iii) the city had a population in 1996 of 5,000 or more.
3.30 	(e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the 
3.31 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
3.32 	paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:
3.33 	(i) the city had a population in 1996 of at least 50,000;
3.34 	(ii) its population had increased by at least 40 percent in the ten-year period ending 
3.35 	in 1996; and
4.1 	(iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.
4.2 	(f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and 
4.3 	thereafter, and the maximum amount of total aid it may receive under section 477A.013, 
4.4 	subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only, 
4.5 	provided that:
4.6 	(1) the city has a population that is greater than 1,000 and less than 2,500;
4.7 	(2) its commercial and industrial percentage for aids payable in 1999 is greater 
4.8 	than 45 percent; and
4.9 	(3) the total market value of all commercial and industrial property in the city 
4.10 	for assessment year 1999 is at least 15 percent less than the total market value of all 
4.11 	commercial and industrial property in the city for assessment year 1998.
4.12 	(g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and 
4.13 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
4.14 	paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
4.15 	(1) the city had a population in 1997 of 2,500 or more;
4.16 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
4.17 	477A.013 is less than $650 per capita;
4.18 	(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under 
4.19 	section 477A.013 is greater than 12 percent;
4.20 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
4.21 	20 percent of the amount that the formula aid of the city would have been if the need 
4.22 	increase percentage was 100 percent; and
4.23 	(5) the city aid base of the city used in calculating aid under section 477A.013
4.24 	is less than $7 per capita.
4.25 	(h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and 
4.26 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
4.27 	paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
4.28 	(1) the city has a population in 1997 of 2,000 or more;
4.29 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
4.30 	477A.013 is less than $455 per capita;
4.31 	(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is 
4.32 	greater than $195 per capita; and
4.33 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
4.34 	38 percent of the amount that the formula aid of the city would have been if the need 
4.35 	increase percentage was 100 percent.
5.1 	(i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and 
5.2 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
5.3 	paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
5.4 	(1) the city has a population in 1998 that is greater than 200 but less than 500;
5.5 	(2) the city's revenue need used in calculating aids payable in 2000 was greater 
5.6 	than $200 per capita;
5.7 	(3) the city net tax capacity for the city used in calculating aids available in 2000 
5.8 	was equal to or less than $200 per capita;
5.9 	(4) the city aid base of the city used in calculating aid under section 477A.013
5.10 	is less than $65 per capita; and
5.11 	(5) the city's formula aid for aids payable in 2000 was greater than zero.
5.12 	(j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and 
5.13 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
5.14 	paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
5.15 	(1) the city had a population in 1998 that is greater than 200 but less than 500;
5.16 	(2) the city's commercial industrial percentage used in calculating aids payable in 
5.17 	2000 was less than ten percent;
5.18 	(3) more than 25 percent of the city's population was 60 years old or older according 
5.19 	to the 1990 census;
5.20 	(4) the city aid base of the city used in calculating aid under section 477A.013
5.21 	is less than $15 per capita; and
5.22 	(5) the city's formula aid for aids payable in 2000 was greater than zero.
5.23 	(k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and 
5.24 	by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of 
5.25 	total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
5.26 	increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002 
5.27 	only, provided that:
5.28 	(1) the net tax capacity of the city used in calculating its 2000 aid under section 
5.29 	477A.013 is less than $810 per capita;
5.30 	(2) the population of the city declined more than two percent between 1988 and 1998;
5.31 	(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is 
5.32 	greater than $240 per capita; and
5.33 	(4) the city received less than $36 per capita in aid under section 477A.013, 
5.34 	subdivision 9, for aids payable in 2000.
5.35 	(l) The city aid base for a city with a population of 10,000 or more which is located 
5.36 	outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the 
6.1 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
6.2 	paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to 
6.3 	the lesser of:
6.4 	(1)(i) the total population of the city, as determined by the United States Bureau of 
6.5 	the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
6.6 	(2) $2,500,000.
6.7 	(m) The city aid base is increased by $50,000 in 2002 and thereafter, and the 
6.8 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
6.9 	paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
6.10 	(1) the city is located in the seven-county metropolitan area;
6.11 	(2) its population in 2000 is between 10,000 and 20,000; and
6.12 	(3) its commercial industrial percentage, as calculated for city aid payable in 2001, 
6.13 	was greater than 25 percent.
6.14 	(n) The city aid base for a city is increased by $150,000 in calendar years 2002 
6.15 	to 2011 and the maximum amount of total aid it may receive under section 477A.013, 
6.16 	subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2002 only, 
6.17 	provided that:
6.18 	(1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
6.19 	(2) its home county is located within the seven-county metropolitan area;
6.20 	(3) its pre-1940 housing percentage is less than 15 percent; and
6.21 	(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 
6.22 	per capita.
6.23 	(o) The city aid base for a city is increased by $200,000 beginning in calendar 
6.24 	year 2003 and the maximum amount of total aid it may receive under section 477A.013, 
6.25 	subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only, 
6.26 	provided that the city qualified for an increase in homestead and agricultural credit aid 
6.27 	under Laws 1995, chapter 264, article 8, section 18.
6.28 	(p) The city aid base for a city is increased by $200,000 in 2004 only and the 
6.29 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 
6.30 	also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear 
6.31 	dry cask storage facility.
6.32 	(q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the 
6.33 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
6.34 	by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster 
6.35 	designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by 
6.36 	more than 40 percent between 1990 and 2000.
7.1 	(r) The city aid base for a city is increased by $25,000 in 2006 only and the 
7.2 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
7.3 	by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000 
7.4 	and has a state park for which the city provides rescue services and which comprised at 
7.5 	least 14 percent of the total geographic area included within the city boundaries in 2000.
7.6 	(s) The city aid base for a city with a population less than 5,000 is increased in 
7.7 	2006 and thereafter and the minimum and maximum amount of total aid it may receive 
7.8 	under this section is also increased in calendar year 2006 only by an amount equal to 
7.9 	$6 multiplied by its population.
7.10 	(t) The city aid base for a city is increased by $80,000 in 2007 only 2009 and 
7.11 	thereafter and the minimum and maximum amount of total aid it may receive under section 
7.12 	477A.013, subdivision 9, is also increased by $80,000 in calendar year 2007 2009 only, if:
7.13 	(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed 
7.14 	to be placed in trust status as tax-exempt Indian land;
7.15 	(2) the placement of the land is being challenged administratively or in court; and 
7.16 	(3) due to the challenge, the land proposed to be placed in trust is still on the tax 
7.17 	rolls as of May 1, 2006.
7.18 	(u) The city aid base for a city is increased by $100,000 in 2007 and thereafter and 
7.19 	the minimum and maximum total amount of aid it may receive under this section is also 
7.20 	increased in calendar year 2007 only, provided that:
7.21 	(1) the city has a 2004 estimated population greater than 200 but less than 2,000;
7.22 	(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
7.23 	(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids 
7.24 	payable in 2006 was greater than 110 percent; and
7.25 	(4) it is located in a county where at least 15,000 acres of land are classified as 
7.26 	tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.

7.27 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
7.28 	2009 and thereafter.

7.29 	Sec. 2. Minnesota Statutes 2006, section 477A.013, subdivision 8, is amended to read:
7.30 		Subd. 8.City formula aid. In calendar year 2004 and subsequent years, the 
7.31 	formula aid for a city is equal to the need increase percentage multiplied by the difference 
7.32 	between (1) the city's revenue need multiplied by its population, and (2) the sum of the 
7.33 	city's net tax capacity multiplied by the tax effort rate; the taconite aids under sections 
7.34 	298.28 and 298.282 to any city except a city directly impacted by a taconite mine or plant, 
7.35 	multiplied by the following percentages:.
8.1 	(i) zero percent for aids payable in 2004;
8.2 	(ii) 25 percent for aids payable in 2005;
8.3 	(iii) 50 percent for aids payable in 2006;
8.4 	(iv) 75 percent for aids payable in 2007; and
8.5 	(v) 100 percent for aids payable in 2008 and thereafter.
8.6 	For purposes of this subdivision, "a city directly impacted by a taconite mine or 
8.7 	plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6) 
8.8 	Silver Bay, or (7) Virginia.
8.9 	No city may have a formula aid amount less than zero. The need increase percentage 
8.10 	must be the same for all cities.
8.11 	The applicable need increase percentage must be calculated by the Department of 
8.12 	Revenue so that the total of the aid under subdivision 9 equals the total amount available 
8.13 	for aid under section 477A.03 after the subtraction under section 477A.014, subdivisions 
8.14 	4 and 5.

8.15 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
8.16 	2009 and thereafter.

8.17 	Sec. 3. Minnesota Statutes 2006, section 477A.013, subdivision 9, is amended to read:
8.18 		Subd. 9.City aid distribution. (a) In calendar year 2002 and thereafter, each 
8.19 	city shall receive an aid distribution equal to the sum of (1) the city formula aid under 
8.20 	subdivision 8, and (2) its city aid base. In calendar year 2009, each city shall receive an 
8.21 	aid distribution equal to the sum of (1) the city formula aid under subdivision 8, (2) its city 
8.22 	aid base, and (3) one-half of the difference between its total aid in the previous year under 
8.23 	this subdivision and its city aid base in the previous year. 
8.24 	(b) For aids payable in 2010 and thereafter, each city shall receive an aid distribution 
8.25 	equal to (1) the city aid formula under subdivision 8, (2) its city aid base, and (3) its 
8.26 	formula aid under subdivision 8 in the previous year, prior to any adjustments under 
8.27 	this subdivision.
8.28 	(b) (c) For aids payable in 2005 2009 and thereafter, the total aid for any city shall 
8.29 	not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid 
8.30 	distribution plus (2) its total aid in the previous year. For aids payable in 2005 2009 and 
8.31 	thereafter, the total aid for any city with a population of 2,500 or more may not decrease 
8.32 	from be less than its total aid under this section in the previous year by an amount greater 
8.33 	than minus the lesser of $15 multiplied by its population, or ten percent of its net levy in 
8.34 	the year prior to the aid distribution.
9.1 	(c) For aids payable in 2004 only, the total aid for a city with a population less than 
9.2 	2,500 may not be less than the amount it was certified to receive in 2003 minus the greater 
9.3 	of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special Session 
9.4 	chapter 21, article 5, or (2) five percent of its 2003 aid amount. (d) For aids payable in 
9.5 	2005 2009 and thereafter, the total aid for a city with a population less than 2,500 must not 
9.6 	be less than the amount it was certified to receive in the previous year minus the lesser of 
9.7 	$15 multiplied by its population, or five percent of its 2003 certified aid amount.
9.8 	(d) (e) If a city's net tax capacity used in calculating aid under this section has 
9.9 	decreased in any year by more than 25 percent from its net tax capacity in the previous 
9.10 	year due to property becoming tax-exempt Indian land, the city's maximum allowed aid 
9.11 	increase under paragraph (b) (c) shall be increased by an amount equal to (1) the city's tax 
9.12 	rate in the year of the aid calculation, multiplied by (2) the amount of its net tax capacity 
9.13 	decrease resulting from the property becoming tax exempt.

9.14 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
9.15 	2009 and thereafter.

9.16 	Sec. 4. Laws 2006, chapter 259, article 11, section 3, is amended to read:
9.17 	Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT, 
9.18 	PROPERTY TAX REIMBURSEMENT; 2006 ONLY.
 9.19 		Subdivision 1. Aid appropriation. (a) $600,000 is appropriated annually from the 
9.20 	general fund to the commissioner of revenue to be used to make payments to compensate 
9.21 	for the loss of property tax revenue due to the placement of land located in the city of 
9.22 	Mahnomen that was put in trust status by the United Stated Department of the Interior, 
9.23 	Bureau of Indian Affairs, during calendar year 2006 related to the trust conversion 
9.24 	application of the Shooting Star Casino. The commissioner shall pay the county of 
9.25 	Mahnomen, $450,000; the city of Mahnomen, $80,000; and Independent School District 
9.26 	No. 432, Mahnomen, $70,000. The payments shall be made on July 20, 2006 of 2008 
9.27 	and each subsequent year. 
9.28 	(b) Payments under this section must be reduced in any year by the amount, if any, 
9.29 	of payments in lieu of property taxes to that political subdivision made during the previous 
9.30 	calendar year by the owner of the land that was placed in trust.
9.31 		Subd. 2. School district tax base adjustments. The Department of Revenue 
9.32 	must reduce the referendum market value and the adjusted net tax capacity certified 
9.33 	for assessment year 2005 used to calculate school levies for taxes payable in 2007 
9.34 	for Independent School District No. 432, Mahnomen, by the amounts of any values 
9.35 	attributable to property that is no longer subject to property taxation because the land has 
10.1 	been placed in trust in calendar year 2006 through action of the United States Department 
10.2 	of Interior, Bureau of Indian Affairs. The Mahnomen County auditor must certify the 
10.3 	reductions in value to the Department of Revenue in the form and manner specified by the 
10.4 	Department of Revenue. 

10.5 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
10.6 	2008 and thereafter.

10.7 	Sec. 5. MAHNOMEN COUNTY; CITY, COUNTY, AND SCHOOL DISTRICT 
10.8 	TAX BASE ADJUSTMENTS.
 10.9 	(a) The commissioner of revenue must reduce the referendum market value and 
10.10 	adjusted net tax capacity used to calculate school levies beginning with taxes payable in 
10.11 	2009 and subsequent years for Independent School District No. 432, Mahnomen, by 
10.12 	the amounts attributable to the Shooting Star Casino, which is pending placement into 
10.13 	trust status by the United States Department of the Interior, Bureau of Indian Affairs. 
10.14 	This adjustment shall be made for each assessment year that the property remains on 
10.15 	the tax rolls. The Mahnomen County auditor must certify the reductions in value to the 
10.16 	Department of Revenue in the form and manner specified by the commissioner of revenue.
10.17 	(b) The commissioner of revenue must reduce the county and city net tax capacities 
10.18 	used to calculate aids under Minnesota Statutes, sections 477A.011 to 477A.03, beginning 
10.19 	with aids payable in 2009 for the county of Mahnomen and the city of Mahnomen, by the 
10.20 	amounts attributable to property that is pending placement into trust status by the United 
10.21 	States Department of the Interior, Bureau of Indian Affairs. This adjustment shall be made 
10.22 	for each assessment year that the property remains on the tax rolls.

10.23 	EFFECTIVE DATE. This section is effective for aids and levies payable in 2009 
10.24 	and thereafter.

10.25 	Sec. 6. UTILITY PROPERTY; TAX BASE ADJUSTMENTS FOR 
10.26 	CALCULATION OF SCHOOL DISTRICT AIDS AND LEVIES.
 10.27 	For purposes of calculating school levies and aids for fiscal years 2010 and 2011 
10.28 	only, the commissioner of revenue shall compute the adjusted net tax capacity and 
10.29 	referendum market value as if the tax base changes resulting from the amendments to 
10.30 	Minnesota Rules, chapter 8100, including the phase-in provisions of Minnesota Rules, 
10.31 	part 8100.0800, were effective one year earlier.

11.1 	Sec. 7. UTILITY PROPERTY; TAX BASE ADJUSTMENTS FOR 
11.2 	CALCULATION OF COUNTY, CITY, AND TOWN AIDS.
 11.3 	For purposes of calculating aid for towns and cities under section 477A.013, and for 
11.4 	counties under section 477A.0124, for payment in 2009 and 2010 only, the commissioner 
11.5 	of revenue shall calculate the adjusted net tax capacity of cities and counties, as defined 
11.6 	in sections 477A.011 and 477A.0124, as if the tax base changes resulting from the 
11.7 	amendments to Minnesota Rules, chapter 8100, including the phase-in provisions of 
11.8 	Minnesota Rules, part 8100.0800, were effective one year earlier.

11.9 	ARTICLE 2
11.10 	PROPERTY TAXES

11.11 	Section 1. Minnesota Statutes 2006, section 97A.061, subdivision 2, is amended to 
11.12 	read:
11.13 		Subd. 2.Allocation. (a) Except as provided in subdivision 3, the county treasurer 
11.14 	shall allocate the payment among the county, towns, and school districts on the same basis 
11.15 	as if the payments were taxes on the land received in the year. Payment of a town's or a 
11.16 	school district's allocation must be made by the county treasurer to the town or school 
11.17 	district within 30 days of receipt of the payment to the county. The county's share of the 
11.18 	payment shall be deposited in the county general revenue fund.
11.19 	(b) The county treasurer of a county with a population over 39,000 but less than 
11.20 	42,000 in the 1950 federal census shall allocate the payment only among the towns and 
11.21 	school districts on the same basis as if the payments were taxes on the lands received 
11.22 	in the current year.
11.23 	(c) If a town received a payment in calendar year 2006 or thereafter under this 
11.24 	subdivision, and subsequently incorporated as a city, the city will continue to receive any 
11.25 	future year's allocations that would have been made to the town had it not incorporated, 
11.26 	provided that the payments will terminate if the governing body of the city passes an 
11.27 	ordinance that prohibits hunting within the boundaries of the city.

11.28 	EFFECTIVE DATE. This section is effective retroactively for aid payments made 
11.29 	in 2007 and thereafter.

11.30 	Sec. 2. Minnesota Statutes 2006, section 127A.48, subdivision 2, is amended to read:
11.31 		Subd. 2.Methodology. In making its annual assessment/sales ratio studies, the 
11.32 	Department of Revenue must use a methodology consistent with the most recent Standard 
11.33 	on Assessment Ratio Studies published by the assessment standards committee of the 
12.1 	International Association of Assessing Officers. The commissioner of revenue shall 
12.2 	supplement this general methodology with specific procedures necessary for execution of 
12.3 	the study in accordance with other Minnesota laws impacting the assessment/sales ratio 
12.4 	study. The commissioner shall document these specific procedures in writing and shall 
12.5 	publish the procedures in the State Register, but these procedures will not be considered 
12.6 	"rules" pursuant to the Minnesota Administrative Procedure Act. When property is 
12.7 	sold and the purchaser changes its use in a manner that would result in a change of 
12.8 	classification of the property, the assessment sales ratio study under this subdivision must 
12.9 	take into account that changed classification as soon as practicable. A change in status 
12.10 	from homestead to nonhomestead or from nonhomestead to homestead is not a change 
12.11 	under this subdivision. For purposes of this section, sections 270.12, subdivision 2, 
12.12 	clause (8), and 278.05, subdivision 4, the commissioner of revenue shall exclude from 
12.13 	the assessment/sales ratio study the sale of any nonagricultural property which does not 
12.14 	contain an improvement, if (1) the statutory basis on which the property's taxable value 
12.15 	as most recently assessed is less than market value as defined in section 273.11, or (2) 
12.16 	the property has undergone significant physical change or a change of use since the most 
12.17 	recent assessment. 

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

12.19 	Sec. 3. Minnesota Statutes 2006, section 216B.1646, is amended to read:
12.20 	216B.1646 RATE REDUCTION ADJUSTMENT; PROPERTY TAX 
12.21 	REDUCTION CHANGE.
12.22 	(a) The commission shall, by any method the commission finds appropriate, reduce
12.23 	adjust  the rates each electric utility subject to rate regulation by the commission charges 
12.24 	its customers to reflect, on an ongoing basis, the amount by which each utility's property 
12.25 	tax, if applicable, on the personal property of its electric system from taxes payable in 
12.26 	2001 to taxes payable in 2002 is reduced or pipeline system transporting or distributing 
12.27 	natural gas is changed under this act. The commission must ensure that, to the extent 
12.28 	feasible, each dollar of personal property tax reduction allocated to Minnesota consumers 
12.29 	retroactive to January 1, 2002, change in taxes payable in 2009 and subsequent years
12.30 	results in a dollar of savings adjustment to the utility's customers rates. A utility may 
12.31 	voluntarily pass on any additional property tax savings allocated in the same manner as 
12.32 	approved by the commission under this paragraph. The adjustment under this paragraph is 
12.33 	outside of a general rate case proceeding under section 216B.16.
13.1 	(b) By April 10, 2002, Each utility shall may  submit a filing to the commission 
13.2 	containing:
13.3 	(1) certified information regarding the utility's property tax savings change allocated 
13.4 	to Minnesota retail customers; and
13.5 	(2) a proposed method of passing these savings on adjusting rates to Minnesota 
13.6 	retail customers.
13.7 	The utility shall provide the information in clause (1) to the commissioner of revenue at 
13.8 	the same time. The commissioner shall notify the commission within 30 days as to the 
13.9 	accuracy of the property tax data submitted by the utility.
13.10 	(c) For purposes of this section, "personal property" means tools, implements, and 
13.11 	machinery of the generating plant. It does not apply to transformers, transmission lines, 
13.12 	distribution lines, or any other tools, implements, and machinery that are part of an electric 
13.13 	substation, wherever located an electric system or of a pipeline system transporting or 
13.14 	distributing natural gas.

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

13.16 	Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
13.17 	to read:
13.18 		Subd. 85.Modular homes used as models by dealers. (a) A modular home 
13.19 	is exempt if it:
13.20 	(1) is owned by a modular home dealer and is located on land owned or leased 
13.21 	by that dealer;
13.22 	(2) is a single-family model home;
13.23 	(3) is not available for sale and is used exclusively as a model;
13.24 	(4) is not permanently connected to any utilities except electricity; and
13.25 	(5) is situated on a temporary foundation.
13.26 	(b) The exemption under this subdivision is allowable for up to five assessment 
13.27 	years after the date it becomes located on the property, provided that the modular home 
13.28 	continues to meet all of the criteria under this subdivision each year. The owner of a 
13.29 	modular model home must notify the county assessor within 60 days that it has been 
13.30 	constructed or located on the property and must again notify the assessor if the modular 
13.31 	home ceases to meet any of the criteria. If more than one modular home is constructed or 
13.32 	situated on a property, the owner must notify the assessor within 60 days for each of the 
13.33 	models placed on the property.
14.1 	(c) For purposes of this subdivision, a "modular home" means a building or 
14.2 	structural unit that has been in whole or substantial part manufactured or constructed at an 
14.3 	off-site location to be wholly or partially assembled on-site as a single family dwelling. 
14.4 	Construction of the modular home must comply with applicable standards adopted in 
14.5 	Minnesota Rules authorized under Minnesota Statutes, chapter 16B. A modular home does 
14.6 	not include a structure subject to the requirements of the National Manufactured Home 
14.7 	Construction and Safety Standards Act of 1974 or prefabricated buildings, as defined in 
14.8 	Minnesota Statutes, section 327.31, subdivision 6.

14.9 	EFFECTIVE DATE. This section is effective for assessment year 2008 and 
14.10 	thereafter, for taxes payable in 2009 and thereafter. The five-year assessment time period 
14.11 	begins with the 2008 assessment for a modular model home currently situated provided 
14.12 	it meets all of the criteria and the county assessor is notified within 90 days of the day 
14.13 	following final enactment.

14.14 	Sec. 5. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
14.15 	to read:
14.16 		Subd. 86.Apprenticeship training facilities. All or a portion of a building used 
14.17 	exclusively for a state-approved apprenticeship program through the Department of Labor 
14.18 	and Industry is exempt if (1) it is owned and operated by a nonprofit corporation, (2) the 
14.19 	program participants receive no compensation, and (3) it is located in the Minneapolis and 
14.20 	St. Paul standard metropolitan statistical area as determined by the 2000 federal census or 
14.21 	in a city outside the Minneapolis and St. Paul standard metropolitan statistical area that 
14.22 	has a population of 7,500 or greater according to the most recent federal census. This 
14.23 	exemption does not include land.

14.24 	EFFECTIVE DATE. This section is effective for assessment year 2008 and 
14.25 	thereafter, for taxes payable in 2009 and thereafter.

14.26 	Sec. 6. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision 
14.27 	to read:
14.28 		Subd. 87.Monosloped roofs for feedlots and manure storage areas. A 
14.29 	monosloped, single-pitched roof installed over a feedlot or manure storage area to prevent 
14.30 	runoff is exempt.

14.31 	EFFECTIVE DATE. This section is effective for assessment year 2008 for property 
14.32 	taxes payable in 2009, and thereafter.

15.1 	Sec. 7. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
15.2 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 
15.3 	whenever any real estate is sold for a consideration in excess of $1,000, whether by 
15.4 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
15.5 	grantee or the legal agent of either shall file a certificate of value with the county 
15.6 	auditor in the county in which the property is located when the deed or other document 
15.7 	is presented for recording. Contract for deeds are subject to recording under section 
15.8 	507.235, subdivision 1. Value shall, in the case of any deed not a gift, be the amount of 
15.9 	the full actual consideration thereof, paid or to be paid, including the amount of any lien 
15.10 	or liens assumed. The items and value of personal property transferred with the real 
15.11 	property must be listed and deducted from the sale price. The certificate of value shall 
15.12 	include the classification to which the property belongs for the purpose of determining 
15.13 	the fair market value of the property, and shall include any proposed change in use of the 
15.14 	property known to the person filing the certificate that could change the classification 
15.15 	of the property. The certificate shall include financing terms and conditions of the sale 
15.16 	which are necessary to determine the actual, present value of the sale price for purposes 
15.17 	of the sales ratio study. If the property is being acquired as part of a like-kind exchange 
15.18 	under section 1031 of the Internal Revenue Code of 1986, as amended through December 
15.19 	31, 2006, that must be indicated on the certificate. The commissioner of revenue shall 
15.20 	promulgate administrative rules specifying the financing terms and conditions which must 
15.21 	be included on the certificate. Pursuant to the authority of the commissioner of revenue in 
15.22 	section 270C.306, the certificate of value must include the Social Security number or the 
15.23 	federal employer identification number of the grantors and grantees. The identification 
15.24 	numbers of the grantors and grantees are private data on individuals or nonpublic data 
15.25 	as defined in section 13.02, subdivisions 9 and 12, but, notwithstanding that section, the 
15.26 	private or nonpublic data may be disclosed to the commissioner of revenue for purposes of 
15.27 	tax administration. The information required to be shown on the certificate of value is 
15.28 	limited to the information required as of the date of the acknowledgment on the deed or 
15.29 	other document to be recorded.

15.30 	EFFECTIVE DATE. This section is effective for certificates filed after June 30, 
15.31 	2008.

15.32 	Sec. 8. Minnesota Statutes 2007 Supplement, section 273.124, subdivision 14, is 
15.33 	amended to read:
16.1 		Subd. 14. Agricultural homesteads; special provisions.  (a) Real estate of less than 
16.2 	ten acres that is the homestead of its owner must be classified as class 2a under section 
16.3 	273.13, subdivision 23, paragraph (a), if: 
16.4 	(1) the parcel on which the house is located is contiguous on at least two sides to (i) 
16.5 	agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 
16.6 	Service, or (iii) land administered by the Department of Natural Resources on which in 
16.7 	lieu taxes are paid under sections 477A.11 to 477A.14; 
16.8 	(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 
16.9 	20 acres; 
16.10 	(3) the noncontiguous land is located not farther than four townships or cities, or a 
16.11 	combination of townships or cities from the homestead; and 
16.12 	(4) the agricultural use value of the noncontiguous land and farm buildings is equal 
16.13 	to at least 50 percent of the market value of the house, garage, and one acre of land. 
16.14 	Homesteads initially classified as class 2a under the provisions of this paragraph shall 
16.15 	remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 
16.16 	properties, as long as the homestead remains under the same ownership, the owner owns a 
16.17 	noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 
16.18 	value qualifies under clause (4). Homestead classification under this paragraph is limited 
16.19 	to property that qualified under this paragraph for the 1998 assessment. 
16.20 	(b)(i) Agricultural property consisting of at least 40 acres shall be classified as the 
16.21 	owner's homestead, to the same extent as other agricultural homestead property, if all 
16.22 	of the following criteria are met: 
16.23 	(1) the property consists of at least 40 acres including undivided government lots 
16.24 	and correctional 40's;
16.25 	(1) (2) the owner, the owner's spouse, the son or daughter of the owner or owner's 
16.26 	spouse, or the grandson or granddaughter of the owner or the owner's spouse, is actively 
16.27 	farming the agricultural property, either on the person's own behalf as an individual or 
16.28 	on behalf of a partnership operating a family farm, family farm corporation, joint family 
16.29 	farm venture, or limited liability company of which the person is a partner, shareholder, or 
16.30 	member; 
16.31 	(2) (3) both the owner of the agricultural property and the person who is actively 
16.32 	farming the agricultural property under clause (1) (2), are Minnesota residents; 
16.33 	(3) (4) neither the owner nor the spouse of the owner claims another agricultural 
16.34 	homestead in Minnesota; and 
16.35 	(4) (5) neither the owner nor the person actively farming the property lives farther 
16.36 	than four townships or cities, or a combination of four townships or cities, from the 
17.1 	agricultural property, except that if the owner or the owner's spouse is required to live in 
17.2 	employer-provided housing, the owner or owner's spouse, whichever is actively farming 
17.3 	the agricultural property, may live more than four townships or cities, or combination of 
17.4 	four townships or cities from the agricultural property. 
17.5 	The relationship under this paragraph may be either by blood or marriage. 
17.6 	(ii) Real property held by a trustee under a trust is eligible for agricultural homestead 
17.7 	classification under this paragraph if the qualifications in clause (i) are met, except that 
17.8 	"owner" means the grantor of the trust. 
17.9 	(iii) Property containing the residence of an owner who owns qualified property 
17.10 	under clause (i) shall be classified as part of the owner's agricultural homestead, if that 
17.11 	property is also used for noncommercial storage or drying of agricultural crops. 
17.12 	(c) Noncontiguous land shall be included as part of a homestead under section 
17.13 	273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a 
17.14 	and the detached land is located in the same township or city, or not farther than four 
17.15 	townships or cities or combination thereof from the homestead. Any taxpayer of these 
17.16 	noncontiguous lands must notify the county assessor that the noncontiguous land is part of 
17.17 	the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer 
17.18 	must also notify the assessor of the other county. 
17.19 	(d) Agricultural land used for purposes of a homestead and actively farmed by a 
17.20 	person holding a vested remainder interest in it must be classified as a homestead under 
17.21 	section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, 
17.22 	any other dwellings on the land used for purposes of a homestead by persons holding 
17.23 	vested remainder interests who are actively engaged in farming the property, and up to 
17.24 	one acre of the land surrounding each homestead and reasonably necessary for the use of 
17.25 	the dwelling as a home, must also be assessed class 2a. 
17.26 	(e) Agricultural land and buildings that were class 2a homestead property under 
17.27 	section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain 
17.28 	classified as agricultural homesteads for subsequent assessments if: 
17.29 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
17.30 	homestead as a result of the April 1997 floods; 
17.31 	(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, 
17.32 	or Wilkin; 
17.33 	(3) the agricultural land and buildings remain under the same ownership for the 
17.34 	current assessment year as existed for the 1997 assessment year and continue to be used 
17.35 	for agricultural purposes; 
18.1 	(4) the dwelling occupied by the owner is located in Minnesota and is within 30 
18.2 	miles of one of the parcels of agricultural land that is owned by the taxpayer; and 
18.3 	(5) the owner notifies the county assessor that the relocation was due to the 1997 
18.4 	floods, and the owner furnishes the assessor any information deemed necessary by the 
18.5 	assessor in verifying the change in dwelling. Further notifications to the assessor are not 
18.6 	required if the property continues to meet all the requirements in this paragraph and any 
18.7 	dwellings on the agricultural land remain uninhabited. 
18.8 	(f) Agricultural land and buildings that were class 2a homestead property under 
18.9 	section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain 
18.10 	classified agricultural homesteads for subsequent assessments if: 
18.11 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
18.12 	homestead as a result of damage caused by a March 29, 1998, tornado; 
18.13 	(2) the property is located in the county of Blue Earth, Brown, Cottonwood, 
18.14 	LeSueur, Nicollet, Nobles, or Rice; 
18.15 	(3) the agricultural land and buildings remain under the same ownership for the 
18.16 	current assessment year as existed for the 1998 assessment year; 
18.17 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles 
18.18 	of one of the parcels of agricultural land that is owned by the taxpayer; and 
18.19 	(5) the owner notifies the county assessor that the relocation was due to a March 29, 
18.20 	1998, tornado, and the owner furnishes the assessor any information deemed necessary by 
18.21 	the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 
18.22 	owner must notify the assessor by December 1, 1998. Further notifications to the assessor 
18.23 	are not required if the property continues to meet all the requirements in this paragraph 
18.24 	and any dwellings on the agricultural land remain uninhabited. 
18.25 	(g) Agricultural property consisting of at least 40 acres of a family farm corporation, 
18.26 	joint family farm venture, family farm limited liability company, or partnership operating 
18.27 	a family farm as described under subdivision 8 shall be classified homestead, to the same 
18.28 	extent as other agricultural homestead property, if all of the following criteria are met: 
18.29 	(1) the property consists of at least 40 acres including undivided government lots 
18.30 	and correctional 40's;
18.31 	(1) (2) a shareholder, member, or partner of that entity is actively farming the 
18.32 	agricultural property; 
18.33 	(2) (3) that shareholder, member, or partner who is actively farming the agricultural 
18.34 	property is a Minnesota resident; 
18.35 	(3) (4) neither that shareholder, member, or partner, nor the spouse of that 
18.36 	shareholder, member, or partner claims another agricultural homestead in Minnesota; and 
19.1 	(4) (5) that shareholder, member, or partner does not live farther than four townships 
19.2 	or cities, or a combination of four townships or cities, from the agricultural property. 
19.3 	Homestead treatment applies under this paragraph for property leased to a family 
19.4 	farm corporation, joint farm venture, limited liability company, or partnership operating a 
19.5 	family farm if legal title to the property is in the name of an individual who is a member, 
19.6 	shareholder, or partner in the entity. 
19.7 	(h) To be eligible for the special agricultural homestead under this subdivision, an 
19.8 	initial full application must be submitted to the county assessor where the property is 
19.9 	located. Owners and the persons who are actively farming the property shall be required 
19.10 	to complete only a one-page abbreviated version of the application in each subsequent 
19.11 	year provided that none of the following items have changed since the initial application: 
19.12 	(1) the day-to-day operation, administration, and financial risks remain the same; 
19.13 	(2) the owners and the persons actively farming the property continue to live within 
19.14 	the four townships or city criteria and are Minnesota residents; 
19.15 	(3) the same operator of the agricultural property is listed with the Farm Service 
19.16 	Agency; 
19.17 	(4) a Schedule F or equivalent income tax form was filed for the most recent year; 
19.18 	(5) the property's acreage is unchanged; and 
19.19 	(6) none of the property's acres have been enrolled in a federal or state farm program 
19.20 	since the initial application. 
19.21 	The owners and any persons who are actively farming the property must include 
19.22 	the appropriate Social Security numbers, and sign and date the application. If any of the 
19.23 	specified information has changed since the full application was filed, the owner must 
19.24 	notify the assessor, and must complete a new application to determine if the property 
19.25 	continues to qualify for the special agricultural homestead. The commissioner of revenue 
19.26 	shall prepare a standard reapplication form for use by the assessors. 
19.27 	(i) Agricultural land and buildings that were class 2a homestead property under 
19.28 	section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain 
19.29 	classified agricultural homesteads for subsequent assessments if: 
19.30 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
19.31 	homestead as a result of damage caused by the August 2007 floods; 
19.32 	(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, 
19.33 	Steele, Wabasha, or Winona; 
19.34 	(3) the agricultural land and buildings remain under the same ownership for the 
19.35 	current assessment year as existed for the 2007 assessment year; 
20.1 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles 
20.2 	of one of the parcels of agricultural land that is owned by the taxpayer; and 
20.3 	(5) the owner notifies the county assessor that the relocation was due to the August 
20.4 	2007 floods, and the owner furnishes the assessor any information deemed necessary by 
20.5 	the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the 
20.6 	owner must notify the assessor by December 1, 2008. Further notifications to the assessor 
20.7 	are not required if the property continues to meet all the requirements in this paragraph 
20.8 	and any dwellings on the agricultural land remain uninhabited. 

20.9 	EFFECTIVE DATE. This section is effective for assessment year 2008, taxes 
20.10 	payable in 2009 and thereafter.

20.11 	Sec. 9. Minnesota Statutes 2006, section 273.124, is amended by adding a subdivision 
20.12 	to read:
20.13 		Subd. 22.Annual registration of certain relative homesteads. If the owner of 
20.14 	property or the owner's relative who occupies property that is classified as a homestead 
20.15 	under subdivision 1, paragraph (c), receives compensation for allowing occupancy of any 
20.16 	part of that property for a period that exceeds 31 consecutive days during the calendar 
20.17 	year, the recipient of the compensation must register the property with the city in which 
20.18 	it is located no later than 60 days after the initial rental period began. This requirement 
20.19 	applies to property located in a city that has a population over 25,000. Each city must 
20.20 	maintain a file of these property registrations that is open to the public, and retain the 
20.21 	registrations for one year after the date of filing.

20.22 	EFFECTIVE DATE. This section is effective July 1, 2008.

20.23 	Sec. 10. Minnesota Statutes 2006, section 273.125, subdivision 8, is amended to read:
20.24 		Subd. 8.Manufactured homes; sectional structures. (a) In this section, 
20.25 	"manufactured home" means a structure transportable in one or more sections, which is 
20.26 	built on a permanent chassis, and designed to be used as a dwelling with or without a 
20.27 	permanent foundation when connected to the required utilities, and contains the plumbing, 
20.28 	heating, air conditioning, and electrical systems in it. Manufactured home includes any 
20.29 	accessory structure that is an addition or supplement to the manufactured home and, when 
20.30 	installed, becomes a part of the manufactured home.
20.31 	(b) Except as provided in paragraph (c), a manufactured home that meets each of the 
20.32 	following criteria must be valued and assessed as an improvement to real property, the 
21.1 	appropriate real property classification applies, and the valuation is subject to review and 
21.2 	the taxes payable in the manner provided for real property:
21.3 	(1) the owner of the unit holds title to the land on which it is situated;
21.4 	(2) the unit is affixed to the land by a permanent foundation or is installed at its 
21.5 	location in accordance with the Manufactured Home Building Code in sections 327.31
21.6 	to 327.34, and rules adopted under those sections, or is affixed to the land like other real 
21.7 	property in the taxing district; and
21.8 	(3) the unit is connected to public utilities, has a well and septic tank system, or is 
21.9 	serviced by water and sewer facilities comparable to other real property in the taxing 
21.10 	district.
21.11 	(c) A manufactured home that meets each of the following criteria must be assessed 
21.12 	at the rate provided by the appropriate real property classification but must be treated as 
21.13 	personal property, and the valuation is subject to review and the taxes payable in the 
21.14 	manner provided in this section:
21.15 	(1) the owner of the unit is a lessee of the land under the terms of a lease, or the unit 
21.16 	is located in a manufactured home park but is not the homestead of the park owner;
21.17 	(2) the unit is affixed to the land by a permanent foundation or is installed at its 
21.18 	location in accordance with the Manufactured Home Building Code contained in sections 
21.19 	327.31 to 327.34, and the rules adopted under those sections, or is affixed to the land like 
21.20 	other real property in the taxing district; and
21.21 	(3) the unit is connected to public utilities, has a well and septic tank system, or is 
21.22 	serviced by water and sewer facilities comparable to other real property in the taxing 
21.23 	district.
21.24 	(d) Sectional structures must be valued and assessed as an improvement to real 
21.25 	property if the owner of the structure holds title to the land on which it is located or is a 
21.26 	qualifying lessee of the land under section 273.19. In this paragraph "sectional structure" 
21.27 	means a building or structural unit that has been in whole or substantial part manufactured 
21.28 	or constructed at an off-site location to be wholly or partially assembled on-site alone or 
21.29 	with other units and attached to a permanent foundation.
21.30 	(e) The commissioner of revenue may adopt rules under the Administrative 
21.31 	Procedure Act to establish additional criteria for the classification of manufactured homes 
21.32 	and sectional structures under this subdivision.
21.33 	(f) A storage shed, deck, or similar improvement constructed on property that is 
21.34 	leased or rented as a site for a manufactured home, sectional structure, park trailer, or 
21.35 	travel trailer is taxable as provided in this section. In the case of property that is leased or 
21.36 	rented as a site for a travel trailer, a storage shed, deck, or similar improvement on the 
22.1 	site that is considered personal property under this paragraph is taxable only if its total 
22.2 	estimated market value is over $500 $1,000. The property is taxable as personal property 
22.3 	to the lessee of the site if it is not owned by the owner of the site. The property is taxable 
22.4 	as real estate if it is owned by the owner of the site. As a condition of permitting the owner 
22.5 	of the manufactured home, sectional structure, park trailer, or travel trailer to construct 
22.6 	improvements on the leased or rented site, the owner of the site must obtain the permanent 
22.7 	home address of the lessee or user of the site. The site owner must provide the name 
22.8 	and address to the assessor upon request.

22.9 	EFFECTIVE DATE. This section is effective for assessment year 2008 and 
22.10 	thereafter, for taxes payable in 2009 and thereafter.

22.11 	Sec. 11. Minnesota Statutes 2006, section 273.128, subdivision 1, is amended to read:
22.12 		Subdivision 1.Requirement. Low-income rental property classified as class 4d 
22.13 	under section 273.13, subdivision 25, is entitled to valuation under this section if at 
22.14 	least 7520 percent of the units in the rental housing property meet any of the following 
22.15 	qualifications:
22.16 	(1) the units are subject to a housing assistance payments contract under Section 8 
22.17 	of the United States Housing Act of 1937, as amended;
22.18 	(2) the units are rent-restricted and income-restricted units of a qualified low-income 
22.19 	housing project receiving tax credits under section 42(g) of the Internal Revenue Code of 
22.20 	1986, as amended;
22.21 	(3) the units are financed by the Rural Housing Service of the United States 
22.22 	Department of Agriculture and receive payments under the rental assistance program 
22.23 	pursuant to section 521(a) of the Housing Act of 1949, as amended; or
22.24 	(4) the units are subject to rent and income restrictions under the terms of financial 
22.25 	assistance provided to the rental housing property by the federal government or the 
22.26 	state of Minnesota, or a local unit of government, as evidenced by a document recorded 
22.27 	against the property.
22.28 	The restrictions must require assisted units to be occupied by residents whose 
22.29 	household income at the time of initial occupancy does not exceed 60 percent of the 
22.30 	greater of area or state median income, adjusted for family size, as determined by the 
22.31 	United States Department of Housing and Urban Development. The restriction must also 
22.32 	require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of 
22.33 	area or state median income, adjusted for family size, as determined by the United States 
22.34 	Department of Housing and Urban Development.

23.1 	EFFECTIVE DATE. This section is effective for property taxes payable in 2009, 
23.2 	and thereafter.

23.3 	Sec. 12. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:
23.4 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) 
23.5 	and (c), real estate which is residential and used for homestead purposes is class 1a. In the 
23.6 	case of a duplex or triplex in which one of the units is used for homestead purposes, the 
23.7 	entire property is deemed to be used for homestead purposes. The market value of class 1a 
23.8 	property must be determined based upon the value of the house, garage, and land.
23.9 	The first $500,000 of market value of class 1a property has a net class rate of 
23.10 	one percent of its market value; and the market value of class 1a property that exceeds 
23.11 	$500,000 has a class rate of 1.25 percent of its market value.
23.12 	(b) Class 1b property includes homestead real estate or homestead manufactured 
23.13 	homes used for the purposes of a homestead by
23.14 	(1) any person who is blind as defined in section 256D.35, or the blind person and 
23.15 	the blind person's spouse; or
23.16 	(2) any person, hereinafter referred to as "veteran," who:
23.17 	(i) served in the active military or naval service of the United States; and
23.18 	(ii) is entitled to compensation under the laws and regulations of the United States 
23.19 	for permanent and total service-connected disability due to the loss, or loss of use, by 
23.20 	reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both 
23.21 	lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or 
23.22 	a wheelchair; and
23.23 	(iii) has acquired a special housing unit with special fixtures or movable facilities 
23.24 	made necessary by the nature of the veteran's disability, or the surviving spouse of the 
23.25 	deceased veteran for as long as the surviving spouse retains the special housing unit 
23.26 	as a homestead; or
23.27 	(3) any person who is permanently and totally disabled.
23.28 	Property is classified and assessed under clause (3)(2)  only if the government 
23.29 	agency or income-providing source certifies, upon the request of the homestead occupant, 
23.30 	that the homestead occupant satisfies the disability requirements of this paragraph.
23.31 	Property is classified and assessed pursuant to clause (1)under paragraph (b)  only if 
23.32 	the commissioner of revenue certifies to the assessoror the county assessor certifies  that 
23.33 	the homestead occupant satisfies the requirements of this paragraph.
23.34 	Permanently and totally disabled for the purpose of this subdivision means a 
23.35 	condition which is permanent in nature and totally incapacitates the person from working 
24.1 	at an occupation which brings the person an income. The first $32,000 $50,000 market 
24.2 	value of class 1b property has a net class rate of .45 percent of its market value. The 
24.3 	remaining market value of class 1b property has a class rate using the rates for class 1a or 
24.4 	class 2a property, whichever is appropriate, of similar market value.
24.5 	(c) Class 1c property is commercial use real and personal property that abuts 
24.6 	a lakeshore linepublic water as defined in section 103G.005, subdivision 15, and is 
24.7 	devoted to temporary and seasonal residential occupancy for recreational purposes but 
24.8 	not devoted to commercial purposes for more than 250 days in the year preceding the 
24.9 	year of assessment, and that includes a portion used as a homestead by the owner, which 
24.10 	includes a dwelling occupied as a homestead by a shareholder of a corporation that owns 
24.11 	the resort, a partner in a partnership that owns the resort, or a member of a limited liability 
24.12 	company that owns the resort even if the title to the homestead is held by the corporation, 
24.13 	partnership, or limited liability company. For purposes of this clause, property is devoted 
24.14 	to a commercial purpose on a specific day if any portion of the property, excluding the 
24.15 	portion used exclusively as a homestead, is used for residential occupancy and a fee is 
24.16 	charged for residential occupancy. Class 1c property must contain three or more rental 
24.17 	units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, 
24.18 	or individual camping site equipped with water and electrical hookups for recreational 
24.19 	vehicles. Class 1c property must provide recreational activities such as the rental of ice 
24.20 	fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; 
24.21 	provide marina services, launch services, or guide services; or sell bait and fishing tackle. 
24.22 	Any unit in which the right to use the property is transferred to an individual or entity 
24.23 	by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c even 
24.24 	though it may remain available for rent. A camping pad offered for rent by a property 
24.25 	that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental 
24.26 	agreement, as long as the use of the camping pad does not exceed 250 days. The portion of 
24.27 	the property used as a homestead is class 1a property under paragraph (a). The remainder 
24.28 	of the property is classified as follows: the first $500,000 of market value is tier I, the 
24.29 	next $1,700,000 of market value is tier II, and any remaining market value is tier III. 
24.30 	The class rates for class 1c are: tier I, 0.55 percent; tier II, 1.0 percent; and tier III, 1.25 
24.31 	percent. If a class 1c resort property has any market value in tier III, the entire property 
24.32 	must meet the requirements of subdivision 25, paragraph (d), clause (1), to qualify for 
24.33 	class 1c treatment under this paragraph. Owners of real and personal property devoted to 
24.34 	temporary and seasonal residential occupancy for recreation purposes in which all or a 
24.35 	portion of the property was devoted to commercial purposes for not more than 250 days in 
24.36 	the year preceding the year of assessment desiring classification as class 1c, must submit a 
25.1 	declaration to the assessor designating the cabins or units occupied for 250 days or less in 
25.2 	the year preceding the year of assessment by January 15 of the assessment year. Those 
25.3 	cabins or units and a proportionate share of the land on which they are located must be 
25.4 	designated as class 1c as otherwise provided. The remainder of the cabins or units and 
25.5 	a proportionate share of the land on which they are located must be designated as class 
25.6 	3a commercial. The owner of property desiring designation as class 1c property must 
25.7 	provide guest registers or other records demonstrating that the units for which class 1c 
25.8 	designation is sought were not occupied for more than 250 days in the year preceding the 
25.9 	assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, 
25.10 	(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility 
25.11 	operated on a commercial basis not directly related to temporary and seasonal residential 
25.12 	occupancy for recreation purposes does not qualify for class 1c.
25.13 	(d) Class 1d property includes structures that meet all of the following criteria:
25.14 	(1) the structure is located on property that is classified as agricultural property under 
25.15 	section 273.13, subdivision 23;
25.16 	(2) the structure is occupied exclusively by seasonal farm workers during the time 
25.17 	when they work on that farm, and the occupants are not charged rent for the privilege of 
25.18 	occupying the property, provided that use of the structure for storage of farm equipment 
25.19 	and produce does not disqualify the property from classification under this paragraph;
25.20 	(3) the structure meets all applicable health and safety requirements for the 
25.21 	appropriate season; and
25.22 	(4) the structure is not salable as residential property because it does not comply 
25.23 	with local ordinances relating to location in relation to streets or roads.
25.24 	The market value of class 1d property has the same class rates as class 1a property 
25.25 	under paragraph (a).

25.26 	EFFECTIVE DATE. The amendments of this section to paragraph (b) are effective 
25.27 	for taxes payable in 2009 and thereafter. The rest of this section is effective for taxes 
25.28 	payable in 2010 and thereafter.

25.29 	Sec. 13. Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:
25.30 		Subd. 24.Class 3. (a) Commercial and industrial property and utility real and 
25.31 	personal property is class 3a.
25.32 	(1) Except as otherwise provided, each parcel of commercial, industrial, or utility 
25.33 	real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent 
25.34 	of the remaining market value. In the case of contiguous parcels of property owned by the 
25.35 	same person or entity, only the value equal to the first-tier value of the contiguous parcels 
26.1 	qualifies for the reduced class rate, except that contiguous parcels owned by the same 
26.2 	person or entity shall be eligible for the first-tier value class rate on each separate business 
26.3 	operated by the owner of the property, provided the business is housed in a separate 
26.4 	structure. For the purposes of this subdivision, the first tier means the first $150,000 of 
26.5 	market value. Real property owned in fee by a utility for transmission line right-of-way 
26.6 	shall be classified at the class rate for the higher tier.
26.7 	For purposes of this subdivision, parcels are considered to be contiguous even if 
26.8 	they are separated from each other by a road, street, waterway, or other similar intervening 
26.9 	type of property. Connections between parcels that consist of power lines or pipelines do 
26.10 	not cause the parcels to be contiguous. Property owners who have contiguous parcels of 
26.11 	property that constitute separate businesses that may qualify for the first-tier class rate shall 
26.12 	notify the assessor by July 1, for treatment beginning in the following taxes payable year.
26.13 	(2) All Personal property that is: (i) part of an electric generation, transmission, or 
26.14 	distribution system; or (ii), including tools, implements, and machinery, has a class rate 
26.15 	of 2.5 percent for taxes payable in 2009, and 2.8 percent for taxes payable in 2010, and 
26.16 	thereafter.
26.17 	(3) Personal property that is either: (i) part of a pipeline system transporting 
26.18 	or distributing water, gas, crude oil, or petroleum products; and (iii) not described in 
26.19 	clause (3), and all, including tools, implements, and machinery, or (ii) part of an electric 
26.20 	transmission or distribution system, including tools, implements, and machinery, has a 
26.21 	class rate of 2.15 percent for taxes payable in 2009, and 2.25 percent for taxes payable 
26.22 	in 2010, and thereafter.
26.23 	(4) railroad operating property has a class rate as provided under clause (1) for 
26.24 	the first tier of market value and the remaining market value. In the case of multiple 
26.25 	parcels in one county that are owned by one person or entity, only one first tier amount 
26.26 	is eligible for the reduced rate.
26.27 	(3) The entire market value of personal property that is: (i) tools, implements, and 
26.28 	machinery of an electric generation, transmission, or distribution system; (ii) tools, 
26.29 	implements, and machinery of a pipeline system transporting or distributing water, gas, 
26.30 	crude oil, or petroleum products; or (iii) the (5) Personal property consisting of  mains 
26.31 	and pipes used in the distribution of steam or hot or chilled water for heating or cooling 
26.32 	buildings, has a class rate as provided under clause (1) for the remaining market value 
26.33 	in excess of the first tier.
26.34 	(b) Employment property defined in section 469.166, during the period provided 
26.35 	in section 469.170, shall constitute class 3b. The class rates for class 3b property are 
26.36 	determined under paragraph (a). 

27.1 	EFFECTIVE DATE. This section is effective for taxes payable in 2009, and 
27.2 	thereafter.

27.3 	Sec. 14. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:
27.4 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more 
27.5 	units and used or held for use by the owner or by the tenants or lessees of the owner 
27.6 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
27.7 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
27.8 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
27.9 	purposes, without regard to whether the property has been platted or subdivided. The 
27.10 	market value of class 4a property has a class rate of 1.25 percent.
27.11 	(b) Class 4b includes:
27.12 	(1) residential real estate containing less than four units that does not qualify as class 
27.13 	4bb, other than seasonal residential recreational property;
27.14 	(2) manufactured homes not classified under any other provision;
27.15 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
27.16 	farm classified under subdivision 23, paragraph (b) containing two or three units; and
27.17 	(4) unimproved property that is classified residential as determined under subdivision 
27.18 	33.
27.19 	The market value of class 4b property has a class rate of 1.25 percent.
27.20 	(c) Class 4bb includes:
27.21 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
27.22 	residential recreational property; and
27.23 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
27.24 	nonhomestead farm classified under subdivision 23, paragraph (b).
27.25 	Class 4bb property has the same class rates as class 1a property under subdivision 22.
27.26 	Property that has been classified as seasonal residential recreational property at 
27.27 	any time during which it has been owned by the current owner or spouse of the current 
27.28 	owner does not qualify for class 4bb.
27.29 	(d) Class 4c property includes:
27.30 	(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph 
27.31 	(b), clause (1), real and personal property devoted to temporary and seasonal residential 
27.32 	occupancy for recreation purposes, including real and personal property devoted to 
27.33 	temporary and seasonal residential occupancy for recreation purposes and not devoted to 
27.34 	commercial purposes for more than 250 days in the year preceding the year of assessment. 
27.35 	For purposes of this clause, property is devoted to a commercial purpose on a specific 
28.1 	day if any portion of the property is used for residential occupancy, and a fee is charged 
28.2 	for residential occupancy. Class 4c property must contain three or more rental units. A 
28.3 	"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual 
28.4 	camping site equipped with water and electrical hookups for recreational vehicles. Class 
28.5 	4c property must provide recreational activities such as renting ice fishing houses, boats 
28.6 	and motors, snowmobiles, downhill or cross-country ski equipment; provide marina 
28.7 	services, launch services, or guide services; or sell bait and fishing tackle. A camping 
28.8 	pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c 
28.9 	regardless of the term of the rental agreement, as long as the use of the camping pad 
28.10 	does not exceed 250 days. In order for a property to be classified as class 4c, seasonal 
28.11 	residential recreational for commercial purposes, at least 40 percent of the annual gross 
28.12 	lodging receipts related to the property must be from business conducted during 90 
28.13 	consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests 
28.14 	during the year must be for periods of at least two consecutive nights; or (ii) at least 20 
28.15 	percent of the annual gross receipts must be from charges for rental of fish houses, boats 
28.16 	and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina 
28.17 	services, launch services, and guide services, or the sale of bait and fishing tackle. For 
28.18 	purposes of this determination, a paid booking of five or more nights shall be counted as 
28.19 	two bookings. Class 4c also includes commercial use real property used exclusively 
28.20 	for recreational purposes in conjunction with class 4c property devoted to temporary 
28.21 	and seasonal residential occupancy for recreational purposes, up to a total of two acres, 
28.22 	provided the property is not devoted to commercial recreational use for more than 250 
28.23 	days in the year preceding the year of assessment and is located within two miles of the 
28.24 	class 4c property with which it is used. Owners of real and personal property devoted to 
28.25 	temporary and seasonal residential occupancy for recreation purposes and all or a portion 
28.26 	of which was devoted to commercial purposes for not more than 250 days in the year 
28.27 	preceding the year of assessment desiring classification as class 1c or 4c, must submit a 
28.28 	declaration to the assessor designating the cabins or units occupied for 250 days or less in 
28.29 	the year preceding the year of assessment by January 15 of the assessment year. Those 
28.30 	cabins or units and a proportionate share of the land on which they are located willmust be 
28.31 	designated class 1c or 4c as otherwise provided. The remainder of the cabins or units and 
28.32 	a proportionate share of the land on which they are located will be designated as class 3a. 
28.33 	The owner of property desiring designation as class 1c or 4c property must provide guest 
28.34 	registers or other records demonstrating that the units for which class 1c or 4c designation 
28.35 	is sought were not occupied for more than 250 days in the year preceding the assessment if 
28.36 	so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, 
29.1 	(4) conference center or meeting room, and (4)(5) other nonresidential facility operated 
29.2 	on a commercial basis not directly related to temporary and seasonal residential occupancy 
29.3 	for recreation purposes shalldoes not qualify for class 1c or 4c;
29.4 	(2) qualified property used as a golf course if:
29.5 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
29.6 	dues, but a membership fee may not be required in order to use the property for golfing, 
29.7 	and its green fees for golfing must be comparable to green fees typically charged by 
29.8 	municipal courses; and
29.9 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
29.10 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
29.11 	with the golf course is classified as class 3a property;
29.12 	(3) real property up to a maximum of one acrethree acres of land owned and used 
29.13 	by a nonprofit community service oriented organization; provided thatand that is not used 
29.14 	for residential purposes on either a temporary or permanent basis, qualifies for class 4c 
29.15 	provided that it meets either of the following:
29.16 	(i) the property is not used for a revenue-producing activity for more than six days 
29.17 	in the calendar year preceding the year of assessment and the property is not used for 
29.18 	residential purposes on either a temporary or permanent basis; or
29.19 	(ii) the organization makes annual charitable contributions and donations at least 
29.20 	equal to the property's previous year's property taxes and the property is allowed to be 
29.21 	used for public and community meetings or events for no charge, as appropriate to the 
29.22 	size of the facility. 
29.23 	For purposes of this clause, 
29.24 	(A) "charitable contributions and donations" has the same meaning as lawful 
29.25 	gambling purposes under section 349.12, subdivision 25, excluding those purposes 
29.26 	relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
29.27 	(B) "property taxes" excludes the state general tax;
29.28 	(C) a "nonprofit community service oriented organization" means any corporation, 
29.29 	society, association, foundation, or institution organized and operated exclusively for 
29.30 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
29.31 	federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue 
29.32 	Code of 1986, as amended through December 31, 1990. For purposes of this clause,; and
29.33 	(D) "revenue-producing activities" shall include but not be limited to property or that 
29.34 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
29.35 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
29.36 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
30.1 	insurance business, or office or other space leased or rented to a lessee who conducts a 
30.2 	for-profit enterprise on the premises. 
30.3 	Any portion of the property qualifying under item (i) which is used for revenue-producing 
30.4 	activities for more than six days in the calendar year preceding the year of assessment 
30.5 	shall be assessed as class 3a. The use of the property for social events open exclusively 
30.6 	to members and their guests for periods of less than 24 hours, when an admission is 
30.7 	not charged nor any revenues are received by the organization shall not be considered a 
30.8 	revenue-producing activity;.
30.9 	The organization shall maintain records of its charitable contributions and donations 
30.10 	and of public meetings and events held on the property and make them available upon 
30.11 	request any time to the assessor to ensure eligibility. An organization meeting the 
30.12 	requirement under item (ii) must file an application by May 1 with the assessor for 
30.13 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
30.14 	application form and instructions;
30.15 	(4) postsecondary student housing of not more than one acre of land that is owned by 
30.16 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
30.17 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
30.18 	miles of the border of a college campus;
30.19 	(5) manufactured home parks as defined in section 327.14, subdivision 3;
30.20 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
30.21 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
30.22 	and is located within the metropolitan area as defined in section 473.121, subdivision 2;
30.23 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
30.24 	under section 272.01, subdivision 2, and the land on which it is located, provided that:
30.25 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
30.26 	Airports Commission, or group thereof; and
30.27 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
30.28 	leased premise, prohibits commercial activity performed at the hangar.
30.29 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
30.30 	be filed by the new owner with the assessor of the county where the property is located 
30.31 	within 60 days of the sale;
30.32 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
30.33 	section 272.01, subdivision 2, and the land on which it is located, provided that:
30.34 	(i) the land abuts a public airport; and
31.1 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
31.2 	agreement restricting the use of the premises, prohibiting commercial use or activity 
31.3 	performed at the hangar; and
31.4 	(9) residential real estate, a portion of which is used by the owner for homestead 
31.5 	purposes, and that is also a place of lodging, if all of the following criteria are met:
31.6 	(i) rooms are provided for rent to transient guests that generally stay for periods 
31.7 	of 14 or fewer days;
31.8 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
31.9 	in the basic room rate;
31.10 	(iii) meals are not provided to the general public except for special events on fewer 
31.11 	than seven days in the calendar year preceding the year of the assessment; and
31.12 	(iv) the owner is the operator of the property.
31.13 	The market value subject to the 4c classification under this clause is limited to five rental 
31.14 	units. Any rental units on the property in excess of five, must be valued and assessed as 
31.15 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
31.16 	be classified as class 1a property under subdivision 22.
31.17 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
31.18 	parcel of seasonal residential recreational property not used for commercial purposes has 
31.19 	the same class rates as class 4bb property, (ii) manufactured home parks assessed under 
31.20 	clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 
31.21 	residential recreational property has a class rate of one percent for the first $500,000 of 
31.22 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
31.23 	property described in clause (4) has a class rate of one percent, (v) the market value of 
31.24 	property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that 
31.25 	portion of the market value of property in clause (9) qualifying for class 4c property 
31.26 	has a class rate of 1.25 percent.
31.27 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
31.28 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
31.29 	of the units in the building qualify as low-income rental housing units as certified under 
31.30 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
31.31 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
31.32 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
31.33 	land as the qualifying low-income rental housing units are to the total units in the building. 
31.34 	For all properties qualifying as class 4d, the market value determined by the assessor must 
31.35 	be based on the normal approach to value using normal unrestricted rents.
31.36 	Class 4d property has a class rate of 0.75 percent.

32.1 	EFFECTIVE DATE. The part of this section relating to class 4c resorts in 
32.2 	paragraph (d), clause (1), is effective for assessment year 2009 and thereafter, for taxes 
32.3 	payable in 2010 and thereafter. The part of this section relating to nonprofit community 
32.4 	service oriented organizations is effective for assessment year 2008 and thereafter, for 
32.5 	taxes payable in 2009 and thereafter, except that the application date in paragraph (d), 
32.6 	clause (3), item (ii), for the 2008 assessment is extended to September 1, 2008.

32.7 	Sec. 15. Minnesota Statutes 2006, section 273.13, is amended by adding a subdivision 
32.8 	to read:
32.9 		Subd. 34.Homestead of disabled veteran. (a) All or a portion of the market value 
32.10 	of property qualifying for homestead classification under subdivision 22 or 23 is excluded 
32.11 	in determining the property's taxable market value if it serves as the homestead of a 
32.12 	military veteran, as defined in section 197.447, who has a service-connected disability of 
32.13 	70 percent or more. To qualify for exclusion under this subdivision, the veteran must have 
32.14 	been honorably discharged from the United States armed forces, as indicated by United 
32.15 	States Government Form DD214 or other official military discharge papers, and must be 
32.16 	certified by the United States Veterans Administration as having a service-connected 
32.17 	disability.
32.18 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is 
32.19 	excluded, except as provided in clause (2); and
32.20 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
32.21 	excluded.
32.22 	(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), 
32.23 	clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the 
32.24 	spouse holds the legal or beneficial title to the homestead and permanently resides there, 
32.25 	the exclusion shall carry over to the benefit of the veteran's spouse until such time as the 
32.26 	spouse sells, transfers, or otherwise disposes of the property.
32.27 	(d) In the case of an agricultural homestead, only the portion of the property 
32.28 	consisting of the house and garage and immediately surrounding one acre of land qualifies 
32.29 	for the valuation exclusion under this subdivision.
32.30 	(e) A property qualifying for a valuation exclusion under this subdivision is not 
32.31 	eligible for the credit under section 273.1384, subdivision 1.
32.32 	(f) To qualify for a valuation exclusion under this subdivision a property owner must 
32.33 	apply to the assessor by July 1 of each assessment year, except that an annual reapplication 
32.34 	is not required once a property has been accepted for a valuation exclusion under paragraph 
32.35 	(b), clause (2), and the property continues to qualify until there is a change in ownership.

33.1 	EFFECTIVE DATE. This section is effective for assessment year 2008 and 
33.2 	thereafter, for taxes payable in 2009 and thereafter.

33.3 	Sec. 16. Minnesota Statutes 2006, section 273.1315, is amended to read:
33.4 	273.1315 CERTIFICATION OF CLASS 1B PROPERTY.
33.5 		Subdivision 1.Class 1b homestead declaration before 2009. Any property owner 
33.6 	seeking classification and assessment of the owner's homestead as class 1b property 
33.7 	pursuant to section 273.13, subdivision 22, paragraph (b), on or before October 1, 2008, 
33.8 	shall file with the commissioner of revenue a 1b homestead declaration, on a form 
33.9 	prescribed by the commissioner. The declaration shall contain the following information:
33.10 	(a) the information necessary to verify that on or before June 30 of the filing year, 
33.11 	the property owner or the owner's spouse satisfies the requirements of section 273.13, 
33.12 	subdivision 22, paragraph (b), for 1b classification; and
33.13 	(b) any additional information prescribed by the commissioner.
33.14 	The declaration must be filed on or before October 1 to be effective for property 
33.15 	taxes payable during the succeeding calendar year. The declaration and any supplementary 
33.16 	information received from the property owner pursuant to this sectionsubdivision shall 
33.17 	be subject to chapter 270B. If approved by the commissioner, the declaration remains 
33.18 	in effect until the property no longer qualifies under section 273.13, subdivision 22, 
33.19 	paragraph (b). Failure to notify the commissioner within 30 days that the property no 
33.20 	longer qualifies under that paragraph because of a sale, change in occupancy, or change 
33.21 	in the status or condition of an occupant shall result in the penalty provided in section 
33.22 	273.124, subdivision 13, computed on the basis of the class 1b benefits for the property, 
33.23 	and the property shall lose its current class 1b classification.
33.24 	The commissioner shall provide to the assessor on or before November 1 a listing 
33.25 	of the parcels of property qualifying for 1b classification.
33.26 		Subd. 2.Class 1b homestead declaration 2009 and thereafter. (a) Any property 
33.27 	owner seeking classification and assessment of the owner's homestead as class 1b property 
33.28 	pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file 
33.29 	with the county assessor a class 1b homestead declaration, on a form prescribed by the 
33.30 	commissioner of revenue. The declaration must contain the following information:
33.31 	(1) the information necessary to verify that, on or before June 30 of the filing year, 
33.32 	the property owner or the owner's spouse satisfies the requirements of section 273.13, 
33.33 	subdivision 22, paragraph (b), for class 1b classification; and
33.34 	(2) any additional information prescribed by the commissioner.
34.1 	(b) The declaration must be filed on or before October 1 to be effective for property 
34.2 	taxes payable during the succeeding calendar year. The Social Security numbers and 
34.3 	income and medical information received from the property owner pursuant to this 
34.4 	subdivision are private data on individuals as defined in section 13.02. If approved by 
34.5 	the assessor, the declaration remains in effect until the property no longer qualifies under 
34.6 	section 273.13, subdivision 22, paragraph (b). Failure to notify the assessor within 30 
34.7 	days that the property no longer qualifies under that paragraph because of a sale, change in 
34.8 	occupancy, or change in the status or condition of an occupant shall result in the penalty 
34.9 	provided in section 273.124, subdivision 13, computed on the basis of the class 1b benefits 
34.10 	for the property, and the property shall lose its current class 1b classification.

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

34.12 	Sec. 17. Minnesota Statutes 2006, section 275.025, subdivision 3, is amended to read:
34.13 		Subd. 3.Seasonal residential recreational tax capacity. For the purposes of this 
34.14 	section, "seasonal residential recreational tax capacity" means the tax capacity of tier III of 
34.15 	class 1c under section 273.13, subdivision 22, and all class 4c(1) and 4c(3)(ii) property 
34.16 	under section 273.13, subdivision 25, except that the first $76,000 of market value of each 
34.17 	noncommercial class 4c(1) property has a tax capacity for this purpose equal to 40 percent 
34.18 	of its tax capacity under section 273.13.

34.19 	EFFECTIVE DATE. This section is effective for taxes payable in 2009 and 
34.20 	thereafter.

34.21 	Sec. 18. Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision 
34.22 	to read:
34.23 		Subd. 6c.Joint public hearing; nonmetropolitan county, cities, and school 
34.24 	districts. (a) Notwithstanding any other provision of law, the county board may hold a 
34.25 	joint hearing with the governing bodies of all taxing authorities located wholly or partially 
34.26 	within the county that are required to hold a public hearing under this section, excluding 
34.27 	special taxing districts. The primary purpose of the joint hearing is for taxpayer efficiency 
34.28 	by allowing taxpayers to come to a single public hearing to discuss the budgets and 
34.29 	proposed property tax levies of most taxing authorities that impact the taxes on their 
34.30 	property.
34.31 	(b) This subdivision applies only to counties located outside the metropolitan area 
34.32 	as defined under section 473.121, subdivision 2. If a city or school district is located 
35.1 	partially within the metropolitan area, that taxing jurisdiction may participate in its 
35.2 	nonmetropolitan county's joint hearing, if it so chooses.
35.3 	(c) Upon the adoption of a resolution by the county board to hold a joint public 
35.4 	hearing, the county shall notify each city with a population over 500 and each school 
35.5 	district located wholly or partially within the county of its intention to hold the joint 
35.6 	hearing and ask each of the taxing authorities if it would like to participate. Participation 
35.7 	is voluntary, and participation in the joint hearing is in lieu of the requirement for the 
35.8 	governing body to hold a separate public hearing under subdivision 6. If a participating 
35.9 	city or school district is located in more than one county, the hearing under this subdivision 
35.10 	is in lieu of the requirement to hold a separate public hearing if 75 percent or more 
35.11 	of that city or school district's previous year's net tax capacity is in the county where 
35.12 	the hearing is held.
35.13 	(d) The initial joint hearing must be held on the first Thursday in December. The 
35.14 	county may hold an additional joint hearing on another date before December 20 if the 
35.15 	majority of the participating taxing authorities want an additional hearing.
35.16 	The county board shall obtain a meeting space to hold the joint hearing, preferably 
35.17 	at a public building such as the courthouse, school, or community center. The location 
35.18 	shall be as centrally located within the county as possible. The meeting shall generally be 
35.19 	structured in the following general manner:
35.20 	(1) 30 to 60 minutes must be devoted to discussion of the county's budget and levy;
35.21 	(2) 30 to 60 minutes must be devoted to discussion of the city's budget and levy, 
35.22 	with each city's discussion held in a separate room, preferably in the same building;
35.23 	(3) 30 to 60 minutes must be devoted to discussion of the school district's levy, 
35.24 	with each school district's discussion held in a separate room, preferably in the same 
35.25 	building; and
35.26 	(4) during the last 30 minutes the governing bodies must reassemble in a joint 
35.27 	meeting to entertain any follow-up questions that have arisen from the separate discussions.
35.28 	The county shall attempt to keep the total public hearing to within three hours.
35.29 	(e) In lieu of the public advertisement requirement in subdivision 5a, the county shall 
35.30 	have a single advertisement listing the county, each city with a population of over 500, and 
35.31 	each school district participating in the joint public hearing listing. Any taxing authority 
35.32 	participating under this subdivision is exempt from the separate public advertisement 
35.33 	requirement under subdivision 5a. The cost of the joint hearing advertisement shall be 
35.34 	apportioned in the same manner provided in subdivision 4. The notice must be published 
35.35 	not less than two business days nor more than six business days before the hearing. The 
35.36 	newspaper selected must be one of general interest and readership in the county, and not 
36.1 	one of limited subject matter. The advertisement must appear in a newspaper that is 
36.2 	published at least once per week. The advertisement must be in the following form:
36.3 	"NOTICE OF JOINT PUBLIC HEARING
36.4 	PROPOSED TOTAL PROPERTY TAXES
36.5 	FOR PARTICIPATING TAXING AUTHORITIES
36.6 	The property tax amounts below compare that portion of the current budget levied in 
36.7 	property taxes in the county, cities, and school districts for (year) with the property 
36.8 	taxes the county, cities, and school districts propose to collect in (year) for those taxing 
36.9 	authorities participating in the joint public hearing.

36.10
36.11	Taxing Authority
	(Year) Property 
Taxes
	Proposed (Year) 
Property Taxes
	Change (Year) - 
(Year)
	
36.12	$.......
	$.......
	$.......
	...%
	
36.13	$.......
	$.......
	$.......
	...%
	
36.14	$.......
	$.......
	$.......
	...%
	
36.15 	ATTEND THE JOINT PUBLIC HEARING
36.16 	All residents are invited to attend the joint public hearing of the county/cities/school 
36.17 	districts to express your opinions on the proposed amount of (year) property taxes. The 
36.18 	hearing will be held on:
36.19 	(Month/Day/Year/Time)
36.20 	(Location/Address)
36.21 	If the discussion cannot be completed, and another hearing is scheduled, a time and place 
36.22 	for that hearing will be announced at this hearing. You are also invited to send your 
36.23 	written comments to the county auditor. If the comments relate to the city or school 
36.24 	district's levy, please identify that on the envelope so the county auditor can direct the 
36.25 	correspondence to the right jurisdiction."
36.26 	The formal adoption of the taxing authority's levy must not be made at the joint 
36.27 	public hearing held under this subdivision. The formal adoption must be made at one of 
36.28 	the regularly scheduled meetings of the taxing authority's governing body. However, the 
36.29 	property tax levy amount that is subsequently adopted cannot exceed the amount shown to 
36.30 	taxpayers at the joint public hearing.

36.31 	EFFECTIVE DATE. This section is effective for hearings held in 2008 and 
36.32 	thereafter.

36.33 	Sec. 19. Minnesota Statutes 2006, section 275.066, is amended to read:
36.34 	275.066 SPECIAL TAXING DISTRICTS; DEFINITION.
37.1 	For the purposes of property taxation and property tax state aids, the term "special 
37.2 	taxing districts" includes the following entities:
37.3 	(1) watershed districts under chapter 103D;
37.4 	(2) sanitary districts under sections 115.18 to 115.37; 
37.5 	(3) regional sanitary sewer districts under sections 115.61 to 115.67; 
37.6 	(4) regional public library districts under section 134.201; 
37.7 	(5) park districts under chapter 398;
37.8 	(6) regional railroad authorities under chapter 398A;
37.9 	(7) hospital districts under sections 447.31 to 447.38; 
37.10 	(8) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 458A.15; 
37.11 	(9) Duluth Transit Authority under sections 458A.21 to 458A.37; 
37.12 	(10) regional development commissions under sections 462.381 to 462.398; 
37.13 	(11) housing and redevelopment authorities under sections 469.001 to 469.047; 
37.14 	(12) port authorities under sections 469.048 to 469.068; 
37.15 	(13) economic development authorities under sections 469.090 to 469.1081; 
37.16 	(14) Metropolitan Council under sections 473.123 to 473.549; 
37.17 	(15) Metropolitan Airports Commission under sections 473.601 to 473.680; 
37.18 	(16) Metropolitan Mosquito Control Commission under sections 473.701 to 473.716; 
37.19 	(17) Morrison County Rural Development Financing Authority under Laws 1982, 
37.20 	chapter 437, section 1;
37.21 	(18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section 
37.22 	6;
37.23 	(19) East Lake County Medical Clinic District under Laws 1989, chapter 211, 
37.24 	sections 1 to 6;
37.25 	(20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article 
37.26 	5, section 39;
37.27 	(21) Middle Mississippi River Watershed Management Organization under sections 
37.28 	103B.211 and 103B.241; 
37.29 	(22) emergency medical services special taxing districts under section 144F.01; 
37.30 	(23) a county levying under the authority of section 103B.241, 103B.245, or 
37.31 	103B.251; 
37.32 	(24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home 
37.33 	under Laws 2003, First Special Session chapter 21, article 4, section 12; and
37.34 	(25) an airport authority created under section 360.0426; and
38.1 	(26) any other political subdivision of the state of Minnesota, excluding counties, 
38.2 	school districts, cities, and towns, that has the power to adopt and certify a property tax 
38.3 	levy to the county auditor, as determined by the commissioner of revenue.

38.4 	EFFECTIVE DATE. This section is effective for taxes payable in 2009, and 
38.5 	thereafter.

38.6 	Sec. 20. Minnesota Statutes 2006, section 276.04, subdivision 2, is amended to read:
38.7 		Subd. 2.Contents of tax statements. (a) The treasurer shall provide for the 
38.8 	printing of the tax statements. The commissioner of revenue shall prescribe the form 
38.9 	of the property tax statement and its contents. The statement must contain a tabulated 
38.10 	statement of the dollar amount due to each taxing authority and the amount of the state 
38.11 	tax from the parcel of real property for which a particular tax statement is prepared. The 
38.12 	dollar amounts attributable to the county, the state tax, the voter approved school tax, the 
38.13 	other local school tax, the township or municipality, and the total of the metropolitan 
38.14 	special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must 
38.15 	be separately stated. The amounts due all other special taxing districts, if any, may be 
38.16 	aggregated except that any levies made by the regional rail authorities in the county of 
38.17 	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A 
38.18 	shall be listed on a separate line directly under the appropriate county's levy. If the county 
38.19 	levy under this paragraph includes an amount for a lake improvement district as defined 
38.20 	under sections 103B.501 to 103B.581, the amount attributable for that purpose must be 
38.21 	separately stated from the remaining county levy amount. In the case of Ramsey County, 
38.22 	if the county levy under this paragraph includes an amount for public library service 
38.23 	under section 134.07, the amount attributable for that purpose may be separated from the 
38.24 	remaining county levy amount. The amount of the tax on homesteads qualifying under the 
38.25 	senior citizens' property tax deferral program under chapter 290B is the total amount of 
38.26 	property tax before subtraction of the deferred property tax amount. The amount of the 
38.27 	tax on contamination value imposed under sections 270.91 to 270.98, if any, must also 
38.28 	be separately stated. The dollar amounts, including the dollar amount of any special 
38.29 	assessments, may be rounded to the nearest even whole dollar. For purposes of this section 
38.30 	whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar. 
38.31 	The amount of market value excluded under section 273.11, subdivision 16, if any, must 
38.32 	also be listed on the tax statement.
38.33 	(b) The property tax statements for manufactured homes and sectional structures 
38.34 	taxed as personal property shall contain the same information that is required on the 
38.35 	tax statements for real property.
39.1 	(c) Real and personal property tax statements must contain the following information 
39.2 	in the order given in this paragraph. The information must contain the current year tax 
39.3 	information in the right column with the corresponding information for the previous year 
39.4 	in a column on the left:
39.5 	(1) the property's estimated market value under section 273.11, subdivision 1;
39.6 	(2) the property's taxable market value after reductions under section 273.11, 
39.7 	subdivisions 1a and 16;
39.8 	(3) the property's gross tax, calculated by adding the property's total property tax to 
39.9 	the sum of the aids enumerated in clause (4) before credits;
39.10 	(4) a total of the following aids:
39.11 	(i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C, 
39.12 	and 127A;
39.13 	(ii) local government aids for cities, towns, and counties under sections 477A.011 to 
39.14 	477A.04; and
39.15 	(iii) disparity reduction aid under section 273.1398;
39.16 	(5) (4) for homestead residential and agricultural properties, the credits under 
39.17 	section 273.1384;
39.18 	(6) (5) any credits received under sections 273.119; 273.123; 273.135; 273.1391; 
39.19 	273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received 
39.20 	under section 273.135 must be separately stated and identified as "taconite tax relief"; and
39.21 	(7)(6) the net tax payable in the manner required in paragraph (a).
39.22 	(d) If the county uses envelopes for mailing property tax statements and if the county 
39.23 	agrees, a taxing district may include a notice with the property tax statement notifying 
39.24 	taxpayers when the taxing district will begin its budget deliberations for the current 
39.25 	year, and encouraging taxpayers to attend the hearings. If the county allows notices to 
39.26 	be included in the envelope containing the property tax statement, and if more than 
39.27 	one taxing district relative to a given property decides to include a notice with the tax 
39.28 	statement, the county treasurer or auditor must coordinate the process and may combine 
39.29 	the information on a single announcement.
39.30 	The commissioner of revenue shall certify to the county auditor the actual or 
39.31 	estimated aids enumerated in paragraph (c), clause (4), that local governments will receive 
39.32 	in the following year. The commissioner must certify this amount by January 1 of each 
39.33 	year.

39.34 	EFFECTIVE DATE. This section is effective for property tax statements for 
39.35 	property taxes payable in 2009 and thereafter.

40.1 	Sec. 21. Minnesota Statutes 2006, section 278.05, subdivision 6, is amended to read:
40.2 		Subd. 6.Dismissal of petition; exclusion of certain evidence. (a) In cases where 
40.3 	the petitioner contests the valuation of income-producing property, information, including 
40.4 	income and expense figures in the form of (1) year-end financial statements for the 
40.5 	year prior to the assessment date, (2) year-end financial statements for the year of the 
40.6 	assessment date, and (3) rent rolls on the assessment date including tenant name, lease start 
40.7 	and end dates, option terms, base rent, square footage leased and vacant space, verified net 
40.8 	rentable areas in the form of net rentable square footage of the building or buildings, and 
40.9 	anticipated income and expenses in the form of proposed budgets for the year subsequent 
40.10 	to the year of the assessment date, for income-producing property must be provided to 
40.11 	the county assessor no later than 60 days after the applicable filing deadline contained 
40.12 	in section 278.01, subdivision 1 or 4. Failure to provide the information required in this 
40.13 	paragraph shall result in the dismissal of the petition, unless (1) the failure to provide it was 
40.14 	due to the unavailability of the evidence at the time that the information was due, or (2) 
40.15 	the petitioner was not aware of or informed of the requirement to provide the information. 
40.16 	If the petitioner proves that the requirements under clause (2) are met, the petitioner has 
40.17 	an additional 30 days to provide the information from the time the petitioner became 
40.18 	aware of or was informed of the requirement to provide the information, otherwise the 
40.19 	petition shall be dismissed.
40.20 	(b) Provided that the information as contained in paragraph (a) is timely submitted to 
40.21 	the county assessor, the county assessor shall furnish the petitioner at least five days before 
40.22 	the hearing under this chapter with the property's appraisal, if any, which will be presented 
40.23 	to the court at the hearing. The petitioner shall furnish to the county assessor at least five 
40.24 	days before the hearing under this chapter with the property's appraisal, if any, which 
40.25 	will be presented to the court at the hearing. An appraisal of the petitioner's property 
40.26 	done by or for the county shall not be admissible as evidence if the county assessor does 
40.27 	not comply with the provisions in this paragraph. The petition shall be dismissed if the 
40.28 	petitioner does not comply with the provisions in this paragraph.

40.29 	EFFECTIVE DATE. This section is effective for petitions filed on or after July 
40.30 	1, 2008.

40.31 	Sec. 22. Minnesota Statutes 2006, section 279.37, subdivision 1a, is amended to read:
40.32 		Subd. 1a.Class 3a property. (a) The delinquent taxes upon a parcel of property 
40.33 	which was classified class 3a, for the previous year's assessment and had a total market 
40.34 	value of $200,000$500,000 or less for that same assessment shall be eligible to be 
41.1 	composed into a confession of judgment. Property qualifying under this subdivision 
41.2 	shall be subject to the same provisions as provided in this section except as provided 
41.3 	in paragraphs (b) to (d).
41.4 	(b) Current year taxes and penalty due at the time the confession of judgment 
41.5 	is entered must be paid.
41.6 	(c) The down payment must include all special assessments due in the current tax 
41.7 	year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties, 
41.8 	and interest accrued against the parcel. The balance remaining is payable in four equal 
41.9 	annual installments.
41.10 	(d) The amounts entered in judgment bear interest at the rate provided in section 
41.11 	279.03, subdivision 1a, commencing with the date the judgment is entered. The interest 
41.12 	rate is subject to change each year on the unpaid balance in the manner provided in section 
41.13 	279.03, subdivision 1a. 

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

41.15 	Sec. 23. Minnesota Statutes 2006, section 280.39, is amended to read:
41.16 	280.39 DELINQUENT TAXES MAY BE PAID IN INVERSE ORDER.
41.17 	In any case where taxes for two or more years are delinquent against a parcel of 
41.18 	land, such taxes for one or more entire years the taxes, or a portion of them, if held by 
41.19 	the state, may be paid in the inverse order to that in which the taxes were levied, with 
41.20 	accrued penalties, interest, and costs upon the taxes so paid, without payment of the 
41.21 	taxes for the first of such years; provided, that such payment shall not affect the lien of 
41.22 	any unpaid taxes or tax judgment.

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

41.24 	Sec. 24. Minnesota Statutes 2006, section 290C.07, is amended to read:
41.25 	290C.07 CALCULATION OF INCENTIVE PAYMENT.
41.26 	An approved claimant under the sustainable forest incentive program is eligible to 
41.27 	receive an annual payment. The payment shall equal the greater of:
41.28 	(1) the difference between the property tax that would be paid on the land using the 
41.29 	previous year's statewide average total township tax rate and the class rate for class 2b 
41.30 	timberland under section 273.13, subdivision 23, paragraph (b), if the land were valued 
41.31 	at (i) the average statewide timberland market value per acre calculated under section 
41.32 	290C.06, and (ii) the average statewide timberland current use value per acre calculated 
41.33 	under section 290C.02, subdivision 5; or
42.1 	(2) two-thirds of the property tax amount determined by using the previous year's 
42.2 	statewide average total township tax rate, the estimated market value per acre as calculated 
42.3 	in section 290C.06, and the class rate for 2b timberland under section 273.13, subdivision 
42.4 	23, paragraph (b); or
42.5 	(3) $1.50, provided that the payment shall be no less than $7 per acre for each acre 
42.6 	enrolled in the sustainable forest incentive program.

42.7 	EFFECTIVE DATE. This section is effective for payments made after June 30, 
42.8 	2008.

42.9 	Sec. 25. Minnesota Statutes 2006, section 360.031, is amended to read:
42.10 	360.031 DEFINITION OF MUNICIPALITY.
42.11 	For the purposes of sections 360.031 to 360.045, inclusive (except section 360.042), 
42.12 	only, "municipality" means any county, city, or town, or airport authority of this state. 

42.13 	Sec. 26. [360.0425] GENERAL POWERS OF AUTHORITY.
42.14 	An airport authority created under section 360.0426 has all the powers granted a 
42.15 	municipality under sections 360.032 to 360.046.

42.16 	Sec. 27. [360.0426] CREATION OF AN AIRPORT AUTHORITY; 
42.17 	DISSOLUTION.
42.18 		Subdivision 1.Members; definition. A city together with another city, county, 
42.19 	town, or an Indian tribe may create an airport authority. For purposes of this chapter, 
42.20 	"airport authority" means a governmental entity created pursuant to this section for the 
42.21 	purpose of acquiring, establishing, constructing, maintaining, improving, and operating 
42.22 	airports and other air navigation facilities.
42.23 		Subd. 2.Process to establish authority. A city that owns an airport by joint 
42.24 	resolution together with other willing governmental units may create an airport authority 
42.25 	that is authorized to exercise its functions upon passage of a joint resolution by each of 
42.26 	their governing bodies, including a proposed date for the first meeting of the authority.
42.27 		Subd. 3.Airport authority commission. The powers of the airport authority shall 
42.28 	be vested in the airport authority commissioners. The commission shall consist of at 
42.29 	least five commissioners. Each governmental unit that is a member of the authority shall 
42.30 	be represented by at least one commissioner. If fewer than five governmental units are 
42.31 	members of the authority, there must be two commissioners appointed from each member 
42.32 	unit of government. The terms of each commissioner are three years, provided that the 
43.1 	length of the initial appointments must be staggered so that the terms of approximately 
43.2 	one-third of the commissioners expire each calendar year.
43.3 		Subd. 4.Appointment of commissioners. The governmental body of each member 
43.4 	governmental unit shall appoint a resident of that governmental unit to be a commissioner 
43.5 	of the airport authority. Upon vacancy of a commissioner prior to the end of a normal term, 
43.6 	the appropriate governmental body shall appoint a commissioner to fill the unexpired term.
43.7 		Subd. 5.Compensation; meetings; officers. Commissioners shall receive no 
43.8 	compensation for services, but are entitled to payment for necessary expenses, including 
43.9 	travel expenses, incurred in the discharge of the commissioners' duties.
43.10 	The commission shall establish a regular meeting schedule. A majority of the 
43.11 	commissioners of the authority constitutes a quorum for purposes of conducting business 
43.12 	of the authority. Action may be taken by the majority vote of not less than a majority of 
43.13 	the commissioners present, providing there is a quorum.
43.14 	The commission shall elect a chair, a vice-chair, a secretary, and a treasurer at its 
43.15 	organizational meeting. The authority may hire an executive director, a legal advisor, 
43.16 	technical experts, and other employees, permanent and temporary, as it may require.
43.17 		Subd. 6.Process to increase size of authority. An airport authority may be 
43.18 	increased in size by adding additional governmental entities if each of the additional 
43.19 	entities and each of the governmental entities currently included in the existing authority 
43.20 	adopt a resolution agreeing to the size increase.
43.21 		Subd. 7.Process to decrease size of authority. An airport authority may be 
43.22 	decreased in size if each of the governmental entities that are members of the authority 
43.23 	and the current commissioners consent to change and make provisions for the retention 
43.24 	or disposition of its assets and liabilities.
43.25 		Subd. 8.Process to dissolve authority. An airport authority may be dissolved after 
43.26 	payment of all debts and adoption of a joint resolution of the governing bodies of all of 
43.27 	the participating units of government. Before dissolution, the property of the airport 
43.28 	authority must be sold, transferred, or distributed as agreed to by the participating units 
43.29 	of government. Any remaining funds must be distributed to the general funds of the 
43.30 	participating units of government in proportion to their relative shares of the most recent 
43.31 	levy under section 360.0427.

43.32 	Sec. 28. [360.0427] TAX LEVY MAY BE CERTIFIED BY AN AIRPORT 
43.33 	AUTHORITY.
43.34 	In any year in which it imposes a property tax levy under sections 275.065 to 
43.35 	275.07, which requires an affirmative vote of at least two-thirds of the members of the 
44.1 	authority, an airport authority must submit its proposed levy to the governing body of the 
44.2 	municipality that contains the airport. The municipal governing body may approve or 
44.3 	modify the amount of the levy, and, when it has determined the amount, the authority must 
44.4 	certify to the auditor of the county where the airport is located the amount to be levied on 
44.5 	all taxable property within the boundaries of the airport authority.

44.6 	EFFECTIVE DATE. This section is effective for taxes payable in 2009, and 
44.7 	thereafter.

44.8 	Sec. 29. Minnesota Statutes 2006, section 435.193, is amended to read:
44.9 	435.193 HARDSHIP ASSESSMENT DEFERRAL FOR SENIORS OR,
44.10 	DISABLED, OR MILITARY PERSONS.
44.11 	(a) Notwithstanding the provisions of any law to the contrary, any county, statutory 
44.12 	or home rule charter city, or town, making a special assessment may, at its discretion, defer 
44.13 	the payment of that assessment for any homestead property:
44.14 	(1) owned by a person 65 years of age or older or retired by virtue of a permanent 
44.15 	and total disability for whom it would be a hardship to make the payments; or
44.16 	(2) owned by a person who is a member of the Minnesota National Guard or other 
44.17 	military reserves who is ordered into active military service, as defined in section 190.05, 
44.18 	subdivision 5b or 5c, as stated in the person's military orders, for whom it would be a 
44.19 	hardship to make the payments.
44.20 	(b) Any county, statutory or home rule charter city, or town electing to defer 
44.21 	special assessments shall adopt an ordinance or resolution establishing standards and 
44.22 	guidelines for determining the existence of a hardship and for determining the existence of 
44.23 	a disability, but nothing herein shall be construed to prohibit the determination of hardship 
44.24 	on the basis of exceptional and unusual circumstances not covered by the standards and 
44.25 	guidelines where the determination is made in a nondiscriminatory manner and does not 
44.26 	give the applicant an unreasonable preference or advantage over other applicants.

44.27 	EFFECTIVE DATE. This section is effective the day following final enactment, 
44.28 	and applies to any special assessment for which payment is due on or after that date.

44.29 	Sec. 30. Laws 1973, chapter 393, section 1, as amended by Laws 1974, chapter 153, 
44.30 	section 1, is amended to read:
44.31 	Section 1. MINNEAPOLIS, CITY OF; STREET MAINTENANCE AND 
44.32 	LIGHTING.
 45.1 	Notwithstanding the provisions of any statute or the charter of the city of 
45.2 	Minneapolis to the contrary, the city council of said city may provide that all or part of the 
45.3 	costs of construction, operation, and maintenance of streets and street lighting within the 
45.4 	city may hereafter be paid from the general revenues of the city of Minneapolis; provided 
45.5 	that the portion of the costs assessable against nongovernmental real property exempt from 
45.6 	ad valorem taxation may be levied as a special assessment against the property.

45.7 	Sec. 31. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243, 
45.8 	article 6, section 9, and Laws 2000, chapter 490, article 6, section 15, is amended to read:
45.9 	Sec. 3. TAX; PAYMENT OF EXPENSES.
 45.10 	(a) The tax levied by the hospital district under Minnesota Statutes, section 447.34, 
45.11 	must not be levied at a rate that exceeds 0.063 percent of taxable market value the amount 
45.12 	authorized to be levied under that section. The proceeds of the tax may be used for all 
45.13 	purposes of the hospital district, except as provided in paragraph (b).
45.14 	(b) 0.048 percent of taxable market value of tax in paragraph (a) may be used only 
45.15 	for acquisition, betterment, and maintenance of the district's hospital and nursing home 
45.16 	facilities and equipment, and not for administrative or salary expenses.
45.17 	(c) 0.015 percent of taxable market value of the tax in paragraph (a) may be used 
45.18 	solely for the purpose of capital expenditures as it relates to ambulance acquisitions for 
45.19 	the Cook ambulance service and the Orr ambulance service and not for administrative 
45.20 	or salary expenses.
45.21 	The part of the levy referred to in paragraph (c) (b) must be administered by the 
45.22 	Cook Hospital and passed on directly to the Cook area ambulance service board and the 
45.23 	city of Orr to be held in trust until funding for a new ambulance is needed by either the 
45.24 	Cook ambulance service or the Orr ambulance service.

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

45.28 	Sec. 32. Laws 1989, chapter 211, section 8, subdivision 4, as amended by Laws 2002, 
45.29 	chapter 390, section 24, and Laws 2003, chapter 127, article 2, section 22, subdivision 4, 
45.30 	is amended to read:
45.31 		Subd. 4.Tax levy. The tax levied under Minnesota Statutes, section 447.34, shall 
45.32 	not exceed $300,000 for taxes levied in 2002. For taxes levied in 2003 and subsequent 
45.33 	years, the tax must not exceed the lesser of:
46.1 	(1) the product of the hospital district's property tax levy limitation for the previous 
46.2 	year determined under this subdivision, multiplied by 103 percent; or 
46.3 	(2) the product of the hospital district's property tax levy limitation for the previous 
46.4 	year determined under this subdivision multiplied by the ratio of the most recent available 
46.5 	annual medical care expenditure category of the revised Consumer Price Index, U.S. 
46.6 	citywide average, for all urban consumers prepared by the United States Department of 
46.7 	Labor to the same annual index for the previous year the amount authorized to be levied 
46.8 	under that section.
46.9 	The proceeds of the tax may be used for all purposes of the hospital district.

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

46.13 	Sec. 33. LAKEVIEW CEMETERY ASSOCIATION.
 46.14 		Subdivision 1.Authorized. Any two or more of the following cities and towns in 
46.15 	Itasca County may enter into a joint powers agreement under Minnesota Statutes, section 
46.16 	471.59, to establish the Lakeview Cemetery Association with the powers and duties of a 
46.17 	cemetery association under Minnesota Statutes, chapter 306: the cities of Bovey, Calumet, 
46.18 	Coleraine, Marble, and Taconite, and the towns of Greenway, Iron Range, Lawrence, 
46.19 	and Trout Lake.
46.20 		Subd. 2.Additions; withdrawals. (a) A city or town listed in subdivision 1 that 
46.21 	does not join the association at the time of the initial agreement may join as provided in 
46.22 	the joint powers agreement, or if the joint powers agreement does not provide for later 
46.23 	additions, by providing the association a copy of the adopted resolution to join. If the 
46.24 	joint powers agreement does not provide for adding members, a city or town that joins 
46.25 	after the initial agreement is effective, may join prior to July 1 of the levy year, for taxes 
46.26 	payable in the following year.
46.27 	(b) A city or town may withdraw from the association as otherwise provided in the 
46.28 	joint powers agreement, or providing to the association a copy of the adopted resolution of 
46.29 	the city or town, prior to July 1 of the levy year for taxes payable in the following year.
46.30 		Subd. 3.Operation; tax levy. The joint powers agreement for the association may 
46.31 	provide for a uniform tax rate to be levied against all taxable properties located within each 
46.32 	participating city or town. The maximum amount that may be levied by all participating 
46.33 	cities and towns combined shall not exceed a total of $200,000 per year. If levied, the 
46.34 	tax is in addition to all other taxes permitted to be levied on the property, including taxes 
46.35 	permitted to be levied for cemetery purposes by a participating city or town. The levy 
47.1 	under this section must be disregarded in the calculation of all other rate or per capita levy 
47.2 	limitations imposed by law. One of the cities or towns within the association, chosen by 
47.3 	the members of the association, shall certify a tax levy to the Itasca County auditor. When 
47.4 	collected, the Itasca County auditor shall pay the Lakeview Cemetery Association directly.

47.5 	EFFECTIVE DATE. This section is effective for taxes payable in 2009 and 
47.6 	thereafter.

47.7 	Sec. 34. REPEALER.
 47.8 	(a) Laws 1973, chapter 393, section 2, is repealed.
47.9 	(b) Laws 1994, chapter 587, article 9, section 8, subdivision 1, as amended by Laws 
47.10 	2005, First Special Session chapter 3, article 1, section 36, is repealed, effective for the 
47.11 	same levy year in which the association initially levies under section 33.
47.12 	(c) Minnesota Statutes 2006, section 163.051, subdivision 5, is repealed, effective 
47.13 	for taxes payable in 2007 and thereafter.

47.14 	ARTICLE 3
47.15 	INCOME TAXES

47.16 	Section 1. Minnesota Statutes 2006, section 289A.12, subdivision 4, is amended to 
47.17 	read:
47.18 		Subd. 4.Returns by persons, corporations, cooperatives, governmental entities, 
47.19 	or school districts. (a) The commissioner may by notice and demand require to the 
47.20 	extent required by section 6041 of the Internal Revenue Code, a person, corporation, 
47.21 	or cooperative, the state of Minnesota and its political subdivisions, and a city, county, 
47.22 	and school district in Minnesota, making payments in the regular course of a trade or 
47.23 	business during the taxable year to any person or corporation of $600 or more on account 
47.24 	of rents or royalties, or of $10 or more on account of interest, or $10 or more on account 
47.25 	of dividends or patronage dividends, or $600 or more on account of either wages, salaries, 
47.26 	commissions, fees, prizes, awards, pensions, annuities, or any other fixed or determinable 
47.27 	gains, profits or income, not otherwise reportable under section 289A.09, subdivision 2, or 
47.28 	on account of earnings of $10 or more distributed to its members by savings associations 
47.29 	or credit unions chartered under the laws of this state or the United States, (1) to file with 
47.30 	the commissioner a return (except in cases where a valid agreement to participate in the 
47.31 	combined federal and state information reporting system has been entered into, and the 
47.32 	return is filed only with the commissioner of internal revenue under the applicable filing 
47.33 	and informational reporting requirements of the Internal Revenue Code) with respect to 
48.1 	the payments in excess of the amounts named, giving the names and addresses of the 
48.2 	persons to whom the payments were made, the amounts paid to each, and (2) to make 
48.3 	a return with respect to the total number of payments and total amount of payments, 
48.4 	for each category of income named, which were in excess of the amounts named. This 
48.5 	subdivision does not apply to the payment of interest or dividends to a person who was a 
48.6 	nonresident of Minnesota for the entire year. 
48.7 	(b) For payments for which a return is covered by paragraph (a), regardless of 
48.8 	whether the commissioner has required filing under paragraph (a), the payor must file a 
48.9 	copy of the return with the commissioner if: 
48.10 	(i) the return is for a payment made to a Minnesota resident, to a recipient with a 
48.11 	Minnesota address, or for activity occurring in the state of Minnesota; and 
48.12 	(ii) the payment is for wages, salaries, or other compensation for services provided. 
48.13 	The commissioner may require this information to be filed in electronic or another form 
48.14 	that the commissioner determines is appropriate, notwithstanding the provisions of 
48.15 	paragraph (c).
48.16 	(c) A person, corporation, or cooperative required to file returns under this 
48.17 	subdivision must file the returns on magnetic media if magnetic media was used to satisfy 
48.18 	the federal reporting requirement under section 6011(e) of the Internal Revenue Code, 
48.19 	unless the person establishes to the satisfaction of the commissioner that compliance with 
48.20 	this requirement would be an undue hardship.

48.21 	EFFECTIVE DATE. This section is effective for forms required to be filed by 
48.22 	federal law after December 31, 2009.

48.23 	Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19a, is amended to read:
48.24 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
48.25 	trusts, there shall be added to federal taxable income:
48.26 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
48.27 	or governmental subdivision, municipality, or governmental agency or instrumentality 
48.28 	of any state other than Minnesota exempt from federal income taxes under the Internal 
48.29 	Revenue Code or any other federal statute; and
48.30 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
48.31 	Code, except the portion of the exempt-interest dividends derived from interest income 
48.32 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
48.33 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
48.34 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
48.35 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
49.1 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
49.2 	fund of the regulated investment company as defined in section 851(g) of the Internal 
49.3 	Revenue Code, making the payment; and
49.4 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
49.5 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
49.6 	interest income on obligations of the state in which the tribe is located;
49.7 	(2) the amount of income or sales and use taxes paid or accrued within the taxable 
49.8 	year under this chapter and the amount of taxes based on net income paid or sales and use 
49.9 	taxes paid to any other state or to any province or territory of Canada, to the extent allowed 
49.10 	as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not 
49.11 	be more than the amount by which the itemized deductions as allowed under section 63(d) 
49.12 	of the Internal Revenue Code exceeds the amount of the standard deduction as defined 
49.13 	in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the 
49.14 	disallowance of itemized deductions under section 68 of the Internal Revenue Code of 
49.15 	1986, income or sales and use tax is the last itemized deduction disallowed;
49.16 	(3) the capital gain amount of a lump sum distribution to which the special tax under 
49.17 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
49.18 	(4) the amount of income taxes paid or accrued within the taxable year under this 
49.19 	chapter and taxes based on net income paid to any other state or any province or territory 
49.20 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
49.21 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
49.22 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
49.23 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
49.24 	other than expenses or interest used in computing net interest income for the subtraction 
49.25 	allowed under subdivision 19b, clause (1);
49.26 	(6) the amount of a partner's pro rata share of net income which does not flow 
49.27 	through to the partner because the partnership elected to pay the tax on the income under 
49.28 	section 6242(a)(2) of the Internal Revenue Code;
49.29 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
49.30 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
49.31 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
49.32 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
49.33 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
49.34 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
49.35 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
50.1 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
50.2 	under section 168(k) is allowed;
50.3 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
50.4 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
50.5 	Revenue Code of 1986, as amended through December 31, 2003;
50.6 	(9) to the extent deducted in computing federal taxable income, the amount of the 
50.7 	deduction allowable under section 199 of the Internal Revenue Code; and
50.8 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
50.9 	federal subsidies for prescription drug plans; and
50.10 	(11) the amount of expenses disallowed under section 290.10, subdivision 2.

50.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
50.12 	December 31, 2007, for disallowed expenses assessed after the date of final enactment 
50.13 	of this act.

50.14 	Sec. 3. Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, is 
50.15 	amended to read:
50.16 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
50.17 	and trusts, there shall be subtracted from federal taxable income:
50.18 	(1) net interest income on obligations of any authority, commission, or 
50.19 	instrumentality of the United States to the extent includable in taxable income for federal 
50.20 	income tax purposes but exempt from state income tax under the laws of the United States;
50.21 	(2) if included in federal taxable income, the amount of any overpayment of income 
50.22 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
50.23 	is received as a refund or as a credit to another taxable year's income tax liability;
50.24 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
50.25 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
50.26 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
50.27 	transportation of each qualifying child in attending an elementary or secondary school 
50.28 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
50.29 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
50.30 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
50.31 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
50.32 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
50.33 	"textbooks" includes books and other instructional materials and equipment purchased 
50.34 	or leased for use in elementary and secondary schools in teaching only those subjects 
50.35 	legally and commonly taught in public elementary and secondary schools in this state. 
51.1 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
51.2 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
51.3 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
51.4 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
51.5 	or materials for, or transportation to, extracurricular activities including sporting events, 
51.6 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
51.7 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
51.8 	given in section 32(c)(3) of the Internal Revenue Code;
51.9 	(4) income as provided under section 290.0802;
51.10 	(5) to the extent included in federal adjusted gross income, income realized on 
51.11 	disposition of property exempt from tax under section 290.491;
51.12 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
51.13 	of the Internal Revenue Code in determining federal taxable income by an individual 
51.14 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
51.15 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
51.16 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
51.17 	under the provisions of Public Law 109-1;
51.18 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
51.19 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
51.20 	which is included in gross income under section 87 of the Internal Revenue Code;
51.21 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
51.22 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
51.23 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
51.24 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
51.25 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
51.26 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
51.27 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
51.28 	the extent they exceed the federal foreign tax credit;
51.29 	(9) in each of the five tax years immediately following the tax year in which an 
51.30 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
51.31 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
51.32 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
51.33 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
51.34 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
51.35 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
52.1 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
52.2 	less than zero;
52.3 	(10) job opportunity building zone income as provided under section 469.316;
52.4 	(11) to the extent included in federal taxable income, the amount of compensation 
52.5 	paid to members of the Minnesota National Guard or other reserve components of the 
52.6 	United States military for active service performed in Minnesota, excluding compensation 
52.7 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
52.8 	this clause, "active service" means (i) state active service as defined in section 190.05, 
52.9 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
52.10 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
52.11 	subdivision 5c, but "active service" excludes services performed exclusively for purposes 
52.12 	of basic combat training, advanced individual training, annual training, and periodic 
52.13 	inactive duty training; special training periodically made available to reserve members; 
52.14 	and service performed in accordance with section 190.08, subdivision 3;
52.15 	(12) to the extent included in federal taxable income, the amount of compensation 
52.16 	paid to Minnesota residents who are members of the armed forces of the United States or 
52.17 	United Nations for active duty performed outside Minnesota under United States Code, 
52.18 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
52.19 	the United Nations;
52.20 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
52.21 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
52.22 	to another person for human organ transplantation. For purposes of this clause, "organ" 
52.23 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
52.24 	"human organ transplantation" means the medical procedure by which transfer of a human 
52.25 	organ is made from the body of one person to the body of another person; "qualified 
52.26 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
52.27 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
52.28 	may be subtracted under this clause only once; and "qualified donor" means the individual 
52.29 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
52.30 	individual may claim the subtraction in this clause for each instance of organ donation for 
52.31 	transplantation during the taxable year in which the qualified expenses occur;
52.32 	(14) in each of the five tax years immediately following the tax year in which an 
52.33 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
52.34 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
52.35 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
52.36 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
53.1 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
53.2 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
53.3 	subtraction is not allowed under this clause;
53.4 	(15) to the extent included in federal taxable income, compensation paid to a 
53.5 	nonresident who is a service member as defined in United States Code, title 10, section 
53.6 	101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 
53.7 	Law 108-189, section 101(2); and
53.8 	(16) international economic development zone income as provided under section 
53.9 	469.325.

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

53.12 	Sec. 4. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
53.13 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
53.14 	there shall be added to federal taxable income:
53.15 	(1) the amount of any deduction taken for federal income tax purposes for income, 
53.16 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
53.17 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
53.18 	another state, a political subdivision of another state, the District of Columbia, or any 
53.19 	foreign country or possession of the United States;
53.20 	(2) interest not subject to federal tax upon obligations of: the United States, its 
53.21 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
53.22 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
53.23 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
53.24 	tribal governments;
53.25 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
53.26 	Revenue Code;
53.27 	(4) the amount of any net operating loss deduction taken for federal income tax 
53.28 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
53.29 	deduction under section 810 of the Internal Revenue Code;
53.30 	(5) the amount of any special deductions taken for federal income tax purposes 
53.31 	under sections 241 to 247 and 965 of the Internal Revenue Code;
53.32 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
53.33 	clause (a), that are not subject to Minnesota income tax;
53.34 	(7) the amount of any capital losses deducted for federal income tax purposes under 
53.35 	sections 1211 and 1212 of the Internal Revenue Code;
54.1 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
54.2 	921(a) and 291 of the Internal Revenue Code;
54.3 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
54.4 	291 of the Internal Revenue Code;
54.5 	(10) for certified pollution control facilities placed in service in a taxable year 
54.6 	beginning before December 31, 1986, and for which amortization deductions were elected 
54.7 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
54.8 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
54.9 	income for those facilities;
54.10 	(11) the amount of any deemed dividend from a foreign operating corporation 
54.11 	determined pursuant to section 290.17, subdivision 4, paragraph (g);
54.12 	(12) the amount of a partner's pro rata share of net income which does not flow 
54.13 	through to the partner because the partnership elected to pay the tax on the income under 
54.14 	section 6242(a)(2) of the Internal Revenue Code;
54.15 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
54.16 	Code;
54.17 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
54.18 	Revenue Code, for the taxable year when subpart F income is calculated without regard 
54.19 	to the provisions of section 103 of Public Law 109-222;
54.20 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
54.21 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
54.22 	has an activity that in the taxable year generates a deduction for depreciation under 
54.23 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
54.24 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
54.25 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
54.26 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
54.27 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
54.28 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
54.29 	under section 168(k)(1)(A) and (k)(4)(A) is allowed;
54.30 	(16) 80 percent of the amount by which the deduction allowed by section 179 of the 
54.31 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
54.32 	Revenue Code of 1986, as amended through December 31, 2003;
54.33 	(17) to the extent deducted in computing federal taxable income, the amount of the 
54.34 	deduction allowable under section 199 of the Internal Revenue Code; and
54.35 	(18) the exclusion allowed under section 139A of the Internal Revenue Code for 
54.36 	federal subsidies for prescription drug plans.;
55.1 	(19) the amount of expenses disallowed under section 290.10, subdivision 2; and
55.2 	(20) for taxable years beginning after December 31, 2006, and before January 1, 
55.3 	2008, additional amounts deducted for donation of computer technology and equipment 
55.4 	under section 170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable 
55.5 	income.

55.6 	EFFECTIVE DATE. Clause (19) is effective for taxable years beginning after 
55.7 	December 31, 2007, for disallowed expenses assessed after the date of final enactment of 
55.8 	this act and clause (20) is effective for taxable years beginning after December 31, 2006.

55.9 	Sec. 5. Minnesota Statutes 2006, section 290.0677, subdivision 1, is amended to read:
55.10 		Subdivision 1.Credit allowed.  (a) An individual is allowed a credit against the tax 
55.11 	due under this chapter equal to $59 for each month or portion thereof that the individual 
55.12 	was in active military service in a designated area after September 11, 2001, while a 
55.13 	Minnesota domiciliary. 
55.14 	(b) For active service performed after September 11, 2001, and before December 31, 
55.15 	2006, the individual may claim the credit in the taxable year beginning after December 31, 
55.16 	2005, and before January 1, 2007. 
55.17 	(c) For active service performed after December 31, 2006, the individual may claim 
55.18 	the credit for the taxable year in which the active service was performed. 
55.19 	(d) If a Minnesota domiciliary is killed while performing active military service in a 
55.20 	designated area, the individual's surviving spouse or dependent child may take the credit 
55.21 	in the taxable year of the death. If a Minnesota domiciliary was killed while performing 
55.22 	active military service in a designated area between September 11, 2001, and December 
55.23 	31, 2006, the individual's surviving spouse or dependent child may claim this credit in 
55.24 	the taxable year beginning after December 31, 2005, and before January 1, 2007 an 
55.25 	individual entitled to the credit died prior to January 1, 2006, the individual's estate or 
55.26 	heirs at law, if the individual's probate estate has closed or the estate was not probated, 
55.27 	may claim the credit. 

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

55.30 	Sec. 6. Minnesota Statutes 2006, section 290.10, is amended to read:
55.31 	290.10 NONDEDUCTIBLE ITEMS.
55.32 		Subdivision 1.Expenses, interest, and taxes. Except as provided in section 290.17, 
55.33 	subdivision 4, paragraph (i), in computing the net income of a taxpayer no deduction 
56.1 	shall in any case be allowed for expenses, interest and taxes connected with or allocable 
56.2 	against the production or receipt of all income not included in the measure of the tax 
56.3 	imposed by this chapter, except that for corporations engaged in the business of mining 
56.4 	or producing iron ore, the mining of which is subject to the occupation tax imposed by 
56.5 	section 298.01, subdivision 4, this shall not prevent the deduction of expenses and other 
56.6 	items to the extent that the expenses and other items are allowable under this chapter and 
56.7 	are not deductible, capitalizable, retainable in basis, or taken into account by allowance 
56.8 	or otherwise in computing the occupation tax and do not exceed the amounts taken for 
56.9 	federal income tax purposes for that year.  Occupation taxes imposed under chapter 298, 
56.10 	royalty taxes imposed under chapter 299, or depletion expenses may not be deducted 
56.11 	under this clause  subdivision.
56.12 		Subd. 2.Fines, fees, and penalties. (a) Except as provided in this subdivision, no 
56.13 	deduction from taxable income for a trade or business expense under section 162(a) of 
56.14 	the Internal Revenue Code shall be allowed for any amount paid or incurred, whether by 
56.15 	suit, agreement, or otherwise, to, or at the direction of, a government or entity described in 
56.16 	paragraph (d) in relation to the violation of any law or the investigation or inquiry by such 
56.17 	government or entity into the potential violation of any law.
56.18 	(b) Exception for amounts constituting restitution or paid to come into compliance 
56.19 	with the law. Paragraph (a) does not apply to any amount which:
56.20 	(1) the taxpayer establishes:
56.21 	(i) constitutes restitution, including remediation of property for damage or harm 
56.22 	caused by or which may be caused by the violation of any law or the potential violation 
56.23 	of any law; or
56.24 	(ii) is paid to come into compliance with any law which was violated or involved in 
56.25 	the investigation or inquiry; and
56.26 	(2) is identified as restitution or as an amount paid to come into compliance with the 
56.27 	law, as the case may be, in the court order or settlement agreement.
56.28 	This paragraph does not apply to any amount paid or incurred as reimbursement to 
56.29 	the government or entity for the costs of any investigation or litigation.
56.30 	(c) Paragraph (a) does not apply to any amount paid or incurred by order of a court 
56.31 	in a suit in which no government or entity described in paragraph (d) is a party.
56.32 	(d) An entity is described in this paragraph if it is:
56.33 	(1) a nongovernmental entity which exercises self-regulatory powers, including 
56.34 	imposing sanctions, in connection with a qualified board or exchange, as defined in section 
56.35 	1256(g)(7) of the Internal Revenue Code, or;
57.1 	(2) to the extent provided in federal regulations, a nongovernmental entity which 
57.2 	exercises self-regulatory powers, including imposing sanctions, as part of performing an 
57.3 	essential governmental function.
57.4 	(e) Paragraph (a) does not apply to any amount paid or incurred as taxes due.

57.5 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
57.6 	December 31, 2007, and for fines, fees, and penalties assessed after the date of enactment.

57.7 	Sec. 7. Minnesota Statutes 2006, section 290.17, subdivision 2, is amended to read:
57.8 		Subd. 2.Income not derived from conduct of a trade or business. The income of 
57.9 	a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 
57.10 	business must be assigned in accordance with paragraphs (a) to (f):
57.11 	(a)(1) Subject to paragraphs (a)(2),and (a)(3), and (a)(4), income from wages as 
57.12 	defined in section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, 
57.13 	and to the extent that, the work of the employee is performed within it; all other income 
57.14 	from such sources is treated as income from sources without this state.
57.15 	Severance pay shall be considered income from labor or personal or professional 
57.16 	services.
57.17 	(2) In the case of an individual who is a nonresident of Minnesota and who is an 
57.18 	athlete or entertainer, income from compensation for labor or personal services performed 
57.19 	within this state shall be determined in the following manner:
57.20 	(i) The amount of income to be assigned to Minnesota for an individual who is a 
57.21 	nonresident salaried athletic team employee shall be determined by using a fraction in 
57.22 	which the denominator contains the total number of days in which the individual is under 
57.23 	a duty to perform for the employer, and the numerator is the total number of those days 
57.24 	spent in Minnesota. For purposes of this paragraph, off-season training activities, unless 
57.25 	conducted at the team's facilities as part of a team imposed program, are not included in 
57.26 	the total number of duty days. Bonuses earned as a result of play during the regular season 
57.27 	or for participation in championship, play-off, or all-star games must be allocated under 
57.28 	the formula. Signing bonuses are not subject to allocation under the formula if they are 
57.29 	not conditional on playing any games for the team, are payable separately from any other 
57.30 	compensation, and are nonrefundable; and
57.31 	(ii) The amount of income to be assigned to Minnesota for an individual who is a 
57.32 	nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's 
57.33 	athletic or entertainment performance in Minnesota shall be determined by assigning to 
57.34 	this state all income from performances or athletic contests in this state.
58.1 	(3) For purposes of this section, amounts received by a nonresident as "retirement 
58.2 	income" as defined in section (b)(1) of the State Income Taxation of Pension Income 
58.3 	Act, Public Law 104-95, are not considered income derived from carrying on a trade 
58.4 	or business or from wages or other compensation for work an employee performed in 
58.5 	Minnesota, and are not taxable under this chapter.
58.6 	(4) Wages, otherwise assigned to this state under clause (1) and not qualifying under 
58.7 	clause (3), are not taxable under this chapter if the following conditions are met:
58.8 	(i) the recipient was not a resident of this state for any part of the taxable year in 
58.9 	which the wages were received; and
58.10 	(ii) the wages are for work performed while the recipient was a resident of this state.
58.11 	(b) Income or gains from tangible property located in this state that is not employed 
58.12 	in the business of the recipient of the income or gains must be assigned to this state.
58.13 	(c) Income or gains from intangible personal property not employed in the business 
58.14 	of the recipient of the income or gains must be assigned to this state if the recipient of the 
58.15 	income or gains is a resident of this state or is a resident trust or estate.
58.16 	Gain on the sale of a partnership interest is allocable to this state in the ratio of the 
58.17 	original cost of partnership tangible property in this state to the original cost of partnership 
58.18 	tangible property everywhere, determined at the time of the sale. If more than 50 percent 
58.19 	of the value of the partnership's assets consists of intangibles, gain or loss from the sale 
58.20 	of the partnership interest is allocated to this state in accordance with the sales factor of 
58.21 	the partnership for its first full tax period immediately preceding the tax period of the 
58.22 	partnership during which the partnership interest was sold.
58.23 	Gain on the sale of goodwill or income from a covenant not to compete that is 
58.24 	connected with a business operating all or partially in Minnesota is allocated to this state 
58.25 	to the extent that the income from the business in the year preceding the year of sale was 
58.26 	assignable to Minnesota under subdivision 3.
58.27 	When an employer pays an employee for a covenant not to compete, the income 
58.28 	allocated to this state is in the ratio of the employee's service in Minnesota in the calendar 
58.29 	year preceding leaving the employment of the employer over the total services performed 
58.30 	by the employee for the employer in that year.
58.31 	(d) Income from winnings on a bet made by an individual while in Minnesota is 
58.32 	assigned to this state. In this paragraph, "bet" has the meaning given in section 609.75, 
58.33 	subdivision 2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3). 
58.34 	(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 
58.35 	taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
59.1 	(f) For the purposes of this section, working as an employee shall not be considered 
59.2 	to be conducting a trade or business.

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

59.5 	Sec. 8. Minnesota Statutes 2006, section 290.92, is amended by adding a subdivision 
59.6 	to read:
59.7 		Subd. 31.Payments to persons who are not employees. (a) For purposes of this 
59.8 	subdivision, "contractor" means a person carrying on a trade or business described in 
59.9 	industry code numbers 23 through 238990 of the North American Industry Classification 
59.10 	System. 
59.11 	(b) A contractor or a third-party bulk filer acting on behalf of a contractor, who 
59.12 	makes payments to an individual, carrying on a trade or business described in paragraph 
59.13 	(a) as a sole proprietorship, must deduct and withhold two percent of the payment as 
59.14 	Minnesota withholding tax when the amount the contractor paid to that individual during 
59.15 	the calendar year exceeds $600.
59.16 	(c) A payment subject to withholding under this subdivision must be treated as if 
59.17 	the payment were a wage paid by an employer to an employee. The requirements in the 
59.18 	definitions of "employee" and "employer" in subdivision 1 relating to geographic location 
59.19 	apply in determining whether withholding tax applies under this subdivision, but without 
59.20 	regard to whether the contractor or the individual otherwise satisfy the definition of an 
59.21 	employer or an employee. Each recipient of a payment subject to withholding under this 
59.22 	subdivision must furnish the contractor with a statement of the recipient's name, address, 
59.23 	and Social Security account number.

59.24 	EFFECTIVE DATE. This section is effective for payments made after December 
59.25 	31, 2008.

59.26 	Sec. 9. AUDIT AND REPORT TO LEGISLATURE.
 59.27 	The commissioner must conduct a random sample audit of withholdings under 
59.28 	Minnesota Statutes, section 290.92, subdivision 31, and returns associated with those 
59.29 	withholdings. The commissioner must report on the findings of the audit to the committees 
59.30 	of the senate and house of representatives with jurisdiction over taxes, in compliance with 
59.31 	Minnesota Statutes, sections 3.195 and 3.197, no later than February 1, 2011. The report 
59.32 	must also include information on the number and amount of payments received, and on 
60.1 	the types of contractors making payments, grouped by specialty skills definitions provided 
60.2 	in the North American Industry Classification System.

60.3 	ARTICLE 4
60.4 	FEDERAL UPDATE

60.5 	Section 1. Minnesota Statutes 2006, section 289A.02, subdivision 7, is amended to 
60.6 	read:
60.7 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
60.8 	Revenue Code" means the Internal Revenue Code of 1986, as amended through May 18, 
60.9 	2006 February 13, 2008.

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

60.11 	Sec. 2. Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19, is 
60.12 	amended to read:
60.13 		Subd. 19.Net income. The term "net income" means the federal taxable income, 
60.14 	as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 
60.15 	date named in this subdivision, incorporating the federal effective dates of changes to the 
60.16 	Internal Revenue Code and any elections made by the taxpayer in accordance with the 
60.17 	Internal Revenue Code in determining federal taxable income for federal income tax 
60.18 	purposes, and with the modifications provided in subdivisions 19a to 19f.
60.19 	In the case of a regulated investment company or a fund thereof, as defined in section 
60.20 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
60.21 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
60.22 	except that:
60.23 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
60.24 	Revenue Code does not apply;
60.25 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 
60.26 	Revenue Code must be applied by allowing a deduction for capital gain dividends and 
60.27 	exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 
60.28 	Revenue Code; and
60.29 	(3) the deduction for dividends paid must also be applied in the amount of any 
60.30 	undistributed capital gains which the regulated investment company elects to have treated 
60.31 	as provided in section 852(b)(3)(D) of the Internal Revenue Code.
61.1 	The net income of a real estate investment trust as defined and limited by section 
61.2 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
61.3 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
61.4 	The net income of a designated settlement fund as defined in section 468B(d) of 
61.5 	the Internal Revenue Code means the gross income as defined in section 468B(b) of the 
61.6 	Internal Revenue Code.
61.7 	The Internal Revenue Code of 1986, as amended through May 18, 2006 February 
61.8 	13, 2008, shall be in effect for taxable years beginning after December 31, 1996, and 
61.9 	before January 1, 2006, and for taxable years beginning after December 31, 2006. The 
61.10 	Internal Revenue Code of 1986, as amended through December 31, 2006, is in effect for 
61.11 	taxable years beginning after December 31, 2005, and before January 1, 2007.
61.12 	Except as otherwise provided, references to the Internal Revenue Code in 
61.13 	subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 
61.14 	the applicable year.

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

61.17 	Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19a, is amended to read:
61.18 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
61.19 	trusts, there shall be added to federal taxable income:
61.20 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
61.21 	or governmental subdivision, municipality, or governmental agency or instrumentality 
61.22 	of any state other than Minnesota exempt from federal income taxes under the Internal 
61.23 	Revenue Code or any other federal statute; and
61.24 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
61.25 	Code, except the portion of the exempt-interest dividends derived from interest income 
61.26 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
61.27 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
61.28 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
61.29 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
61.30 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
61.31 	fund of the regulated investment company as defined in section 851(g) of the Internal 
61.32 	Revenue Code, making the payment; and
61.33 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
61.34 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
61.35 	interest income on obligations of the state in which the tribe is located;
62.1 	(2) the amount of income or sales and use taxes paid or accrued within the taxable 
62.2 	year under this chapter and the amount of taxes based on net income paid or sales and use 
62.3 	taxes paid to any other state or to any province or territory of Canada, to the extent allowed 
62.4 	as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not 
62.5 	be more than the amount by which the itemized deductions as allowed under section 63(d) 
62.6 	of the Internal Revenue Code exceeds the amount of the standard deduction as defined 
62.7 	in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the 
62.8 	disallowance of itemized deductions under section 68 of the Internal Revenue Code of 
62.9 	1986, income or sales and use tax is the last itemized deduction disallowed;
62.10 	(3) the capital gain amount of a lump sum distribution to which the special tax under 
62.11 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
62.12 	(4) the amount of income taxes paid or accrued within the taxable year under this 
62.13 	chapter and taxes based on net income paid to any other state or any province or territory 
62.14 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
62.15 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
62.16 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
62.17 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
62.18 	other than expenses or interest used in computing net interest income for the subtraction 
62.19 	allowed under subdivision 19b, clause (1);
62.20 	(6) the amount of a partner's pro rata share of net income which does not flow 
62.21 	through to the partner because the partnership elected to pay the tax on the income under 
62.22 	section 6242(a)(2) of the Internal Revenue Code;
62.23 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
62.24 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
62.25 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
62.26 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
62.27 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
62.28 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
62.29 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
62.30 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
62.31 	under section 168(k) is allowed;
62.32 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
62.33 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
62.34 	Revenue Code of 1986, as amended through December 31, 2003;
62.35 	(9) to the extent deducted in computing federal taxable income, the amount of the 
62.36 	deduction allowable under section 199 of the Internal Revenue Code; and
63.1 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
63.2 	federal subsidies for prescription drug plans.;
63.3 	(11) for taxable years beginning after December 31, 2006, and before January 1, 
63.4 	2008, the amount deducted for qualified tuition and related expenses under section 222 of 
63.5 	the Internal Revenue Code, to the extent deducted from gross income; and
63.6 	(12) for taxable years beginning after December 31, 2006, and before January 1, 
63.7 	2008, the amount deducted for certain expenses of elementary and secondary school 
63.8 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
63.9 	from gross income.

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

63.12 	Sec. 4. Minnesota Statutes 2007 Supplement, section 290.01, subdivision 31, is 
63.13 	amended to read:
63.14 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, for 
63.15 	taxable years beginning before January 1, 2006, and after December 31, 2006, "Internal 
63.16 	Revenue Code" means the Internal Revenue Code of 1986, as amended through May 18, 
63.17 	2006; and for taxable years beginning after December 31, 2005, and before January 1, 
63.18 	2007, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended 
63.19 	through December 31, 2006 February 13, 2008.

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

63.23 	Sec. 5. Minnesota Statutes 2006, section 290.06, subdivision 2c, is amended to read:
63.24 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income 
63.25 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
63.26 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
63.27 	applying to their taxable net income the following schedule of rates:
63.28 	(1) On the first $25,680, 5.35 percent;
63.29 	(2) On all over $25,680, but not over $102,030, 7.05 percent;
63.30 	(3) On all over $102,030, 7.85 percent.
63.31 	Married individuals filing separate returns, estates, and trusts must compute their 
63.32 	income tax by applying the above rates to their taxable income, except that the income 
63.33 	brackets will be one-half of the above amounts.
64.1 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
64.2 	computed by applying to taxable net income the following schedule of rates:
64.3 	(1) On the first $17,570, 5.35 percent;
64.4 	(2) On all over $17,570, but not over $57,710, 7.05 percent;
64.5 	(3) On all over $57,710, 7.85 percent.
64.6 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
64.7 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
64.8 	computed by applying to taxable net income the following schedule of rates:
64.9 	(1) On the first $21,630, 5.35 percent;
64.10 	(2) On all over $21,630, but not over $86,910, 7.05 percent;
64.11 	(3) On all over $86,910, 7.85 percent.
64.12 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
64.13 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
64.14 	an amount determined by the commissioner must be computed in accordance with tables 
64.15 	prepared and issued by the commissioner of revenue based on income brackets of not 
64.16 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
64.17 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
64.18 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
64.19 	(e) An individual who is not a Minnesota resident for the entire year must compute 
64.20 	the individual's Minnesota income tax as provided in this subdivision. After the 
64.21 	application of the nonrefundable credits provided in this chapter, the tax liability must 
64.22 	then be multiplied by a fraction in which:
64.23 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
64.24 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
64.25 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9), 
64.26 	(11), and (12) and reduced by the Minnesota assignable portion of the subtraction for 
64.27 	United States government interest under section 290.01, subdivision 19b, clause (1), 
64.28 	and the subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), 
64.29 	and (16), after applying the allocation and assignability provisions of section 290.081, 
64.30 	clause (a), or 290.17; and
64.31 	(2) the denominator is the individual's federal adjusted gross income as defined in 
64.32 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
64.33 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9), (11), and (12) and 
64.34 	reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), (9), 
64.35 	(10), (14), (15), and (16).

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

65.3 	Sec. 6. Minnesota Statutes 2007 Supplement, section 290A.03, subdivision 15, is 
65.4 	amended to read:
65.5 		Subd. 15.Internal Revenue Code. For taxable years beginning before January 1, 
65.6 	2006, and after December 31, 2006, "Internal Revenue Code" means the Internal Revenue 
65.7 	Code of 1986, as amended through May 18, 2006; and for taxable years beginning after 
65.8 	December 31, 2005, and before January 1, 2007, "Internal Revenue Code" means the 
65.9 	Internal Revenue Code of 1986, as amended through December 31, 2006 February 13, 
65.10 	2008.

65.11 	EFFECTIVE DATE. This section is effective for property tax refunds based on 
65.12 	property taxes payable on or after December 31, 2007, and rent paid on or after December 
65.13 	31, 2006.

65.14 	Sec. 7. Minnesota Statutes 2006, section 291.005, subdivision 1, is amended to read:
65.15 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following 
65.16 	terms used in this chapter shall have the following meanings:
65.17 	(1) "Federal gross estate" means the gross estate of a decedent as valued and 
65.18 	otherwise determined for federal estate tax purposes by federal taxing authorities pursuant 
65.19 	to the provisions of the Internal Revenue Code.
65.20 	(2) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
65.21 	excluding therefrom any property included therein which has its situs outside Minnesota, 
65.22 	and (b) including therein any property omitted from the federal gross estate which is 
65.23 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
65.24 	authorities.
65.25 	(3) "Personal representative" means the executor, administrator or other person 
65.26 	appointed by the court to administer and dispose of the property of the decedent. If there 
65.27 	is no executor, administrator or other person appointed, qualified, and acting within this 
65.28 	state, then any person in actual or constructive possession of any property having a situs in 
65.29 	this state which is included in the federal gross estate of the decedent shall be deemed 
65.30 	to be a personal representative to the extent of the property and the Minnesota estate tax 
65.31 	due with respect to the property.
65.32 	(4) "Resident decedent" means an individual whose domicile at the time of death 
65.33 	was in Minnesota.
66.1 	(5) "Nonresident decedent" means an individual whose domicile at the time of 
66.2 	death was not in Minnesota.
66.3 	(6) "Situs of property" means, with respect to real property, the state or country in 
66.4 	which it is located; with respect to tangible personal property, the state or country in which 
66.5 	it was normally kept or located at the time of the decedent's death; and with respect to 
66.6 	intangible personal property, the state or country in which the decedent was domiciled 
66.7 	at death.
66.8 	(7) "Commissioner" means the commissioner of revenue or any person to whom the 
66.9 	commissioner has delegated functions under this chapter.
66.10 	(8) "Internal Revenue Code" means the United States Internal Revenue Code of 
66.11 	1986, as amended through May 18, 2006 February 13, 2008.
66.12 	(9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
66.13 	defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of 
66.14 	deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.

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

66.16 	ARTICLE 5
66.17 	SALES AND USE TAX

66.18 	Section 1. Minnesota Statutes 2006, section 297A.668, is amended by adding a 
66.19 	subdivision to read:
66.20 		Subd. 8.Manufactured and modular housing. (a) Notwithstanding other 
66.21 	subdivisions of this section, a sale of a manufactured or modular home shall be sourced to 
66.22 	the site where the housing is first set up or installed. 
66.23 	(b) For purposes of this section, "manufactured home" has the meaning given 
66.24 	in section 327.31, subdivision 6. For purposes of this section, "modular home" means 
66.25 	a building or structural unit that has been substantially manufactured or constructed, 
66.26 	in whole or in part, at an off-site location, with the final assembly occurring on-site 
66.27 	alone or with other units and attached to a permanent foundation site and occupied 
66.28 	as a single-family dwelling. Modular home construction must comply with applicable 
66.29 	standards adopted in Minnesota Rules authorized under chapter 16B. A modular home 
66.30 	does not include a structure subject to the requirements of the National Manufactured 
66.31 	Home Construction and Safety Standards Act of 1974 or a manufactured home.

66.32 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
66.33 	June 30, 2008.

67.1 	Sec. 2. Minnesota Statutes 2006, section 297A.99, subdivision 1, is amended to read:
67.2 		Subdivision 1.Authorization; scope. (a) A political subdivision of this state may 
67.3 	impose a general sales tax if permitted by special law enacted prior to January 1, 2009, or 
67.4 	if the political subdivision enacted and imposed the tax before the effective date of section 
67.5 	477A.016 and its predecessor provision. 
67.6 	(b) This section governs the imposition of a general sales tax by the political 
67.7 	subdivision. The provisions of this section preempt the provisions of any special law:
67.8 	(1) enacted before June 2, 1997, or
67.9 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
67.10 	provision from this section's rules by reference.
67.11 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
67.12 	special excise tax on motor vehicles.
67.13 	(d) From June 1, 2008, through December 31, 2010, a political subdivision must not 
67.14 	advertise, promote, expend funds, or hold a referendum to support imposing a local option 
67.15 	sales tax unless authorized by a special law or statute enacted prior to June 1, 2008.

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

67.17 	Sec. 3. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991, 
67.18 	chapter 291, article 8, section 22, and Laws 1998, chapter 389, article 8, section 25, and 
67.19 	Laws 2003, First Special Session chapter 21, article 8, section 11, is amended to read:
67.20 		Subd. 2. Notwithstanding Minnesota Statutes, Section 477A.016, or any other law, 
67.21 	ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance, 
67.22 	impose an additional sales tax of up to one and one-half two and one-quarter percent on 
67.23 	sales transactions which are described in Minnesota Statutes 2000, Section 297A.01, 
67.24 	Subdivision 3, Clause (c). When the city council determines that the taxes imposed 
67.25 	under this subdivision and under Laws 1998, chapter 389, article 8, section 26, at a rate 
67.26 	of one-half of one percent have produced revenue sufficient to pay (1) the debt service 
67.27 	on bonds in a principal amount of $8,000,000 issued for capital improvements to the 
67.28 	Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds 
67.29 	originally issued in the principal amount of $4,970,000 to finance capital improvements 
67.30 	to the Great Lakes Aquarium since the imposition of the taxes at the rate of one and 
67.31 	one-half percent, the rate of the tax under this subdivision is reduced to by one-half of
67.32 	one percent. The imposition of this tax shall not be subject to voter referendum under 
67.33 	either state law or city charter provisions. When the city council determines that the taxes 
67.34 	imposed under this subdivision at a rate of three-quarters of one percent and other sources 
67.35 	of revenue produce revenue sufficient to pay debt service on bonds in the principal amount 
68.1 	of $40,285,000 plus issuance and discount costs, issued for capital improvements at the 
68.2 	Duluth Entertainment and Convention Center, which include a new arena, the rate of tax 
68.3 	under this subdivision must be reduced by three-quarters of one percent.

68.4 	EFFECTIVE DATE. This section is effective the day after the governing body of 
68.5 	the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section 
68.6 	645.021, subdivisions 2 and 3.

68.7 	Sec. 4. Laws 1993, chapter 375, article 9, section 45, subdivision 2, as amended by 
68.8 	Laws 1997, chapter 231, article 7, section 36, is amended to read:
68.9 		Subd. 2.Use of revenues. (a) Revenues received from taxes authorized by 
68.10 	subdivision 1 shall be used by Cook county to pay the cost of collecting the tax and to pay 
68.11 	all or a portion of the costs of expanding and improving the health care facility located 
68.12 	in the county and known as North Shore hospital. Authorized costs include, but are not 
68.13 	limited to, securing or paying debt service on bonds or other obligations issued to finance 
68.14 	the expansion and improvement of North Shore hospital. The total capital expenditures 
68.15 	payable from bond proceeds, excluding investment earnings on bond proceeds and tax 
68.16 	revenues, shall not exceed $4,000,000.
68.17 	(b) Additional revenues received from taxes authorized by subdivision 1 may be 
68.18 	used by Cook county to pay all or a portion of the costs of betterment of North Shore 
68.19 	care center and providing additional improvements to North Shore hospital. Authorized 
68.20 	costs include, but are not limited to, securing or paying debt service on bonds or other 
68.21 	obligations issued to finance the remodeling of North Shore care center and additional 
68.22 	improvements to North Shore hospital. The total capital expenditures payable from bond 
68.23 	proceeds, excluding investment earnings on bond proceeds and tax revenues, shall not 
68.24 	exceed $2,200,000.
68.25 	(c) If approved by the voters at a general or special election held before December 
68.26 	31, 2009, additional revenues received from taxes authorized by subdivision 1 may be 
68.27 	used by Cook County to pay for the following projects:
68.28 	(1) construction and improvements to community centers, museums, interpretive 
68.29 	centers, associated trails, and recreation areas, including, but not limited to, improvements 
68.30 	and additions to the skateboard park, hockey rink, ball fields, community center addition, 
68.31 	county parking area, tennis courts, and all associated improvements;
68.32 	(2) construction and improvement to the Grand Marais pool; 
68.33 	(3) construction and improvement to the Grand Marais Public Library; 
68.34 	(4) debt service to retire bonds for improvements to the Superior National Golf 
68.35 	Course; and
69.1 	(5) infrastructure and communications equipment for disaster mitigation and fire 
69.2 	protection and prevention.
69.3 	Authorized expenses include, but are not limited to, paying construction expenses 
69.4 	related to these improvements, and paying debt service on bonds or other obligations 
69.5 	issued to finance acquisition and construction of these improvements.

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

69.7 	Sec. 5. Laws 1993, chapter 375, article 9, section 45, subdivision 3, as amended by 
69.8 	Laws 1997, chapter 231, article 7, section 37, is amended to read:
69.9 		Subd. 3.Expiration of taxing authority and expenditure limitation. The 
69.10 	authority granted by subdivision 1 to Cook county to impose a sales tax shall expire 
69.11 	when the principal and interest on any bonds or obligations issued under subdivision 4, 
69.12 	paragraph (a), to finance the expansion and improvement of North Shore hospital described 
69.13 	in subdivision 2, paragraph (a), have been paid, or at an earlier time as the county shall, by 
69.14 	resolution, determine when the county determines that the amount of revenues received is 
69.15 	sufficient to pay for the principal and interest on any bonds or obligations issued to finance 
69.16 	the projects in subdivision 2. Any funds remaining after completion of the improvements 
69.17 	and retirement or redemption of the bonds may be placed in the general fund of the county.

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

69.19 	Sec. 6. Laws 1993, chapter 375, article 9, section 45, subdivision 4, as amended by 
69.20 	Laws 1997, chapter 231, article 7, section 38, is amended to read:
69.21 		Subd. 4.Bonds. (a) Cook county may issue general obligation bonds in an amount 
69.22 	not to exceed $4,000,000 for the expansion and improvement of North Shore hospital.
69.23 	(b) Additionally, Cook county may issue general obligation bonds in an amount 
69.24 	not to exceed $2,200,000 for the betterment of North Shore care center and additional 
69.25 	improvements to North Shore hospital.
69.26 	(c) The bonds may be issued without election under Minnesota Statutes, chapter 
69.27 	475, on the question of issuance of the bonds or a property tax to pay them. The debt 
69.28 	represented by the bonds shall not be included in computing any debt limitations applicable 
69.29 	to Cook county, and the levy of taxes required by Minnesota Statutes, section 475.61, to 
69.30 	pay principal of and interest on the bonds shall not be subject to any levy limitation or be 
69.31 	included in computing or applying any levy limitation applicable to the county.
69.32 	(d) Cook County may issue bonds under Minnesota Statutes, chapter 475, to pay 
69.33 	capital and administrative expenses for the improvements authorized in subdivision 2, 
70.1 	paragraph (c), in an amount that does not exceed $14,000,000. An election to approve the 
70.2 	bonds under Minnesota Statutes, section 475.58, is not required. The issuance of bonds 
70.3 	under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61. 
70.4 	The debt represented by the bonds is not included in computing any debt limitation 
70.5 	applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61, 
70.6 	to pay principal and interest on the bonds is not subject to any levy limitation.

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

70.8 	Sec. 7. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to read:
70.9 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
70.10 	297A.48, subdivision 1a,477A.016, or any other provision of law, ordinance, or city 
70.11 	charter, if approved by the city voters at the first municipal general election held after the 
70.12 	date of final enactment of this act or at a special election held November 2, 1999, the city 
70.13 	of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent 
70.14 	for the purposes specified in subdivision 3. The provisions of Minnesota Statutes, section 
70.15 	297A.48 297A.99, govern the imposition, administration, collection, and enforcement of 
70.16 	the tax authorized under this subdivision.

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

70.18 	Sec. 8. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to read:
70.19 		Subd. 3.Use of revenues. (a) Revenues received from taxes authorized by 
70.20 	subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to 
70.21 	pay for construction and improvement of the following city facilities:
70.22 	(1) streets; and 
70.23 	(2) constructing and equipping the Proctor community activity center.
70.24 	Authorized expenses include, but are not limited to, acquiring property, paying 
70.25 	construction and operating expenses related to the development of an authorized facility, 
70.26 	and paying debt service on bonds or other obligations, including lease obligations, issued 
70.27 	to finance the construction, expansion, or improvement of an authorized facility. The 
70.28 	capital expenses for all projects authorized under this paragraph that may be paid with 
70.29 	these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance 
70.30 	of the bonds.
70.31 	(b) Additional revenues received from taxes authorized by subdivision 1, may be 
70.32 	used by the city to pay for the following capital improvement projects: public utilities, 
71.1 	including water, sanitary sewer, storm sewer, and electric; bikeways and trails; and parks 
71.2 	and recreation.

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

71.6 	Sec. 9. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to read:
71.7 		Subd. 4.Bonding authority. (a) The city may issue bonds under Minnesota 
71.8 	Statutes, chapter 475, to finance the capital expenditure and improvement projects 
71.9 	described in subdivision 3. An election to approve the bonds under Minnesota Statutes, 
71.10 	section 475.58, is not required.
71.11 	(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, 
71.12 	sections 275.60 and 279.61 275.61.
71.13 	(c) The bonds are not included in computing any debt limitation applicable to the 
71.14 	city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
71.15 	and interest on the bonds is not subject to any levy limitation.
71.16 	(d) For projects described in subdivision 3, paragraph (a), the aggregate principal 
71.17 	amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital 
71.18 	expenditures and improvements, may not exceed $3,600,000, plus an amount equal to 
71.19 	the costs related to issuance of the bonds, including interest on the bonds. For projects 
71.20 	described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may 
71.21 	not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds, 
71.22 	including interest on the bonds.
71.23 	(e) The sales and use and excise taxes authorized in this section may be pledged to 
71.24 	and used for the payment of the bonds and any bonds issued to refund them only if the 
71.25 	bonds and any refunding bonds are general obligations of the city.

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

71.29 	Sec. 10. Laws 2005, First Special Session chapter 3, article 5, section 39, is amended 
71.30 	to read:
71.31 	Sec. 39. CITY OF BEMIDJI.
 71.32 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
71.33 	section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to the 
72.1 	approval of the city voters at the general election held on November 5, 2002, and at the 
72.2 	general election held November 7, 2006, the city of Bemidji may impose by ordinance 
72.3 	a sales and use tax of one-half of one percent for the purposes specified in subdivision 
72.4 	2. The provisions of Minnesota Statutes, section 297A.99, govern the imposition, 
72.5 	administration, collection, and enforcement of the tax authorized under this subdivision.
72.6 		Subd. 2.Use of revenues. Revenues received from the tax authorized by 
72.7 	subdivision 1 must be used for the cost of collecting and administering the tax and to pay 
72.8 	for the projects listed in this subdivision:
72.9 	(1) To pay all or part of the capital or administrative costs of the acquisition, 
72.10 	construction, and improvement of parks and trails within the city, as provided for in the 
72.11 	city of Bemidji's parks, open space, and trail system plan, adopted by the Bemidji City 
72.12 	Council on November 21, 2001. Authorized expenses include, but are not limited to, 
72.13 	acquiring property, paying construction expenses related to the development of these 
72.14 	facilities and improvements, and securing and paying debt service on bonds or other 
72.15 	obligations issued to finance acquisition, construction, improvement, or development of 
72.16 	parks and trails within the city of Bemidji.
72.17 	(2) To pay all or part of the city's share of costs for acquisition, design, and 
72.18 	construction of a regional event center, with construction costs not to exceed $40,000,000 
72.19 	plus any associated bond costs. Authorized expenses include, but are not limited to, 
72.20 	acquiring property, paying demolition and construction expenses, improving associated 
72.21 	infrastructure, and purchasing furniture, fixtures, and equipment for the regional event 
72.22 	center, and securing and paying debt service on bonds or other obligations issued to 
72.23 	finance the regional event center project.
72.24 		Subd. 3.Bonds. (a) Pursuant to the approval of the city voters at the general 
72.25 	election held on November 5, 2002, the city of Bemidji may issue, without an additional 
72.26 	election, general obligation bonds of the city in an amount not to exceed $9,826,000 to 
72.27 	pay capital and administrative expenses for the acquisition, construction, improvement, 
72.28 	and development of parks and trails as specified in subdivision 2. The debt represented by 
72.29 	the bonds must not be included in computing any debt limitations applicable to the city, 
72.30 	and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal 
72.31 	of any interest on the bonds must not be subject to any levy limitations or be included in 
72.32 	computing or applying any levy limitation applicable to the city.
72.33 	(b) Pursuant to the approval of the city voters at the general election held on 
72.34 	November 7, 2006, the city of Bemidji may issue, without an additional election, general 
72.35 	obligation bonds of the city in an amount not to exceed $40,000,000 to pay capital and 
72.36 	administrative expenses for the construction of the regional event center specified in 
73.1 	subdivision 2. The debt represented by the bonds must not be included in computing 
73.2 	any debt limitations applicable to the city, and the levy of taxes required by Minnesota 
73.3 	Statutes, section 475.61, to pay the principal of any interest on the bonds must not be 
73.4 	subject to any levy limitations or be included in computing or applying any levy limitation 
73.5 	applicable to the city.
73.6 		Subd. 4.Termination of tax. The tax imposed under subdivision 1 expires 
73.7 	when the Bemidji City Council determines that the amount described in subdivision 3, 
73.8 	paragraph (a), has been received from the tax to finance the capital and administrative 
73.9 	costs for acquisition, construction, improvement, and development of parks and trails and 
73.10 	to repay or retire at maturity the principal, interest, and premium due on any bonds issued 
73.11 	for the park and trail improvements under subdivision 3, paragraph (a), plus the earlier of 
73.12 	(1) 30 years after the tax extension to pay for the project in subdivision 2, clause (2), is 
73.13 	first imposed, or (2) when the city council first determines that the additional revenues 
73.14 	received from the extension of the tax equals or exceeds the amount authorized to be spent 
73.15 	for the regional event center under subdivision 2, clause (2). Any funds remaining after 
73.16 	completion of the park and trail improvements authorized projects and retirement or 
73.17 	redemption of the bonds may be placed in the general fund of the city. The tax imposed 
73.18 	under subdivision 1 may expire at an earlier time if the city so determines by ordinance.

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

73.22 	Sec. 11. CITY OF CLEARWATER; TAXES AUTHORIZED.
 73.23 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
73.24 	477A.016, or any other provision of law, ordinance, or city charter, pursuant to the 
73.25 	approval of the voters on November 7, 2006, the city of Clearwater may impose by 
73.26 	ordinance a sales and use tax of up to one-half of one percent for the purposes specified in 
73.27 	subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota 
73.28 	Statutes, section 297A.99, govern the imposition, administration, collection, and 
73.29 	enforcement of the tax authorized under this subdivision.
73.30 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
73.31 	477A.016, or any other provision of law, ordinance, or city charter, the city of Clearwater 
73.32 	may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up 
73.33 	to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person 
73.34 	engaged within the city in the business of selling motor vehicles at retail.
74.1 		Subd. 3.Use of revenues. The proceeds of the tax imposed under this section shall 
74.2 	be used to pay for the costs of acquisition, construction, improvement, and development 
74.3 	of a pedestrian bridge, and land and buildings for a community and recreation center.
74.4 		Subd. 4.Bonding authority. The city of Clearwater may issue bonds in an amount 
74.5 	not to exceed $12,000,000 under Minnesota Statutes, chapter 475, to finance the capital 
74.6 	expenditures and improvements authorized by the referendum under subdivision 3. An 
74.7 	election to approve the bonds under Minnesota Statutes, section 475.59, is not required. 
74.8 	The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section 
74.9 	275.60 or 275.61. The debt represented by the bonds must not be included in computing 
74.10 	any debt limitations applicable to the city, and the levy of taxes required by Minnesota 
74.11 	Statutes, section 475.61, to pay the principal or any interest on the bonds must not be 
74.12 	subject to any levy limitation.
74.13 		Subd. 5.Termination of tax. The tax authorized under subdivision 1 terminates at 
74.14 	the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the 
74.15 	city council determines that sufficient funds have been raised from the tax to finance the 
74.16 	capital and administrative costs of the improvements described in subdivision 3, plus the 
74.17 	additional amount needed to pay the costs related to issuance of bonds under subdivision 
74.18 	4, including interest on the bonds. Any funds remaining after completion of the projects 
74.19 	specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may 
74.20 	be placed in the general fund of the city. The tax imposed under subdivision 1 may expire 
74.21 	at an earlier time if the city so determines by ordinance.

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

74.25 	Sec. 12. CITY OF NORTH MANKATO; TAXES AUTHORIZED.
 74.26 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
74.27 	section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to 
74.28 	the approval of the voters on November 7, 2006, the city of North Mankato may impose 
74.29 	by ordinance a sales and use tax of one-half of one percent for the purposes specified 
74.30 	in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the 
74.31 	imposition, administration, collection, and enforcement of the taxes authorized under 
74.32 	this subdivision. 
74.33 		Subd. 2.Use of revenues. Revenues received from the tax authorized by 
74.34 	subdivision 1 must be used to pay all or part of the capital costs of the following projects: 
75.1 	(1) the local share of the Trunk Highway 14/County State Aid Highway 41 
75.2 	interchange project; 
75.3 	(2) development of regional parks and hiking and biking trails; 
75.4 	(3) expenses of the North Mankato Taylor library;
75.5 	(4) lake improvement projects; and
75.6 	(5) riverfront development.
75.7 	The total amount of revenues from the tax in subdivision 1 that may be used to fund 
75.8 	these projects is $6,000,000 plus any associated bond costs.
75.9 		Subd. 3.Bonds. (a) The city of North Mankato, pursuant to the approval of the 
75.10 	voters at the November 7, 2006, referendum authorizing the imposition of the taxes in 
75.11 	this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and 
75.12 	administrative expenses for the projects described in subdivision 2, in an amount that 
75.13 	does not exceed $6,000,000. A separate election to approve the bonds under Minnesota 
75.14 	Statutes, section 475.58, is not required.
75.15 	(b) The debt represented by the bonds is not included in computing any debt 
75.16 	limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section 
75.17 	475.61, to pay principal and interest on the bonds is not subject to any levy limitation.
75.18 		Subd. 4.Termination of taxes. The tax imposed under subdivision 1 expires 
75.19 	when the city council determines that the amount of revenues received from the taxes 
75.20 	to pay for the projects under subdivision 2, first equals or exceeds $6,000,000 plus the 
75.21 	additional amount needed to pay the costs related to issuance of bonds under subdivision 
75.22 	3, including interest on the bonds. Any funds remaining after completion of the projects 
75.23 	and retirement or redemption of the bonds shall be placed in a capital facilities and 
75.24 	equipment replacement fund of the city. The tax imposed under subdivision 1 may expire 
75.25 	at an earlier time if the city so determines by ordinance. 

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

75.29 	Sec. 13. CITY OF WINONA; TAXES AUTHORIZED.
 75.30 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
75.31 	477A.016, or any other provision of law, ordinance, or city charter, if approved by the 
75.32 	voters at a general or special election held before December 31, 2008, the city of Winona 
75.33 	may impose by ordinance a sales and use tax of up to one-half of one percent for the 
75.34 	purpose specified in subdivision 2. Except as otherwise provided in this section, the 
76.1 	provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 
76.2 	collection, and enforcement of the tax authorized under this subdivision.
76.3 		Subd. 2.Use of revenues. The proceeds of the tax imposed under this section shall 
76.4 	be used to pay the city-borne costs for the construction of a street connection from the city 
76.5 	of Winona to Minnesota State Highways 61 and 43. The construction will provide access 
76.6 	to the city's newly built industrial park and additional access to a hospital.
76.7 		Subd. 3.Bonding authority. The city of Winona may issue bonds in an amount 
76.8 	not to exceed $8,000,000 under Minnesota Statutes, chapter 475, to finance the capital 
76.9 	expenditures under subdivision 2. An election to approve the bonds under Minnesota 
76.10 	Statutes, section 475.58, is not required. The issuance of bonds under this subdivision is 
76.11 	not subject to Minnesota Statutes, section 275.60 or 275.61. The debt represented by the 
76.12 	bonds must not be included in computing any debt limitations applicable to the city, and 
76.13 	the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or 
76.14 	any interest on the bonds must not be subject to any levy limitation.
76.15 		Subd. 4.Termination of tax. The tax authorized under subdivision 1 terminates 
76.16 	at the earlier of: (1) five years after the date of initial imposition of the tax; or (2) when 
76.17 	the city council determines that sufficient funds have been raised from the tax to finance 
76.18 	the capital and administrative costs of the project described in subdivision 2, plus the 
76.19 	additional amount needed to pay the costs related to issuance of bonds under subdivision 
76.20 	3, including interest on the bonds. Any funds remaining after completion of the project 
76.21 	specified in subdivision 2 and retirement or redemption of the bonds in subdivision 3 may 
76.22 	be placed in the general fund of the city. The tax imposed under subdivision 1 may expire 
76.23 	at an earlier time if the city so determines by ordinance.

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

76.27 	ARTICLE 6
76.28 	JUNE ACCELERATED TAX PAYMENTS

76.29 	Section 1. Minnesota Statutes 2006, section 289A.20, subdivision 4, is amended to 
76.30 	read:
76.31 		Subd. 4.Sales and use tax. (a) The taxes imposed by chapter 297A are due and 
76.32 	payable to the commissioner monthly on or before the 20th day of the month following the 
76.33 	month in which the taxable event occurred, or following another reporting period as the 
76.34 	commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph 
77.1 	(f) or (g), except that use taxes due on an annual use tax return as provided under section 
77.2 	289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.
77.3 	(b) A vendor having a liability of $120,000 or more during a fiscal year ending June 
77.4 	30 must remit the June liability for the next year in the following manner:
77.5 	(1) Two business days before June 30 of the year, the vendor must remit 7880 
77.6 	percent of the estimated June liability to the commissioner.
77.7 	(2) On or before August 20 of the year, the vendor must pay any additional amount 
77.8 	of tax not remitted in June.
77.9 	(c) A vendor having a liability of:
77.10 	(1) $20,000 or more in the fiscal year ending June 30, 2005; or
77.11 	(2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years 
77.12 	thereafter,
77.13 	must remit all liabilities on returns due for periods beginning in the subsequent calendar 
77.14 	year by electronic means on or before the 20th day of the month following the month in 
77.15 	which the taxable event occurred, or on or before the 20th day of the month following the 
77.16 	month in which the sale is reported under section 289A.18, subdivision 4, except for 78 80
77.17 	percent of the estimated June liability, which is due two business days before June 30. The 
77.18 	remaining amount of the June liability is due on August 20.

77.19 	EFFECTIVE DATE. This section is effective beginning with June 2009 tax 
77.20 	liabilities.

77.21 	Sec. 2. Minnesota Statutes 2006, section 289A.60, subdivision 15, is amended to read:
77.22 		Subd. 15.Accelerated payment of June sales tax liability; penalty for 
77.23 	underpayment. For payments made after December 31, 2006, if a vendor is required by 
77.24 	law to submit an estimation of June sales tax liabilities and 7880 percent payment by a 
77.25 	certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual 
77.26 	June liability required to be paid in June less the amount remitted in June. The penalty 
77.27 	must not be imposed, however, if the amount remitted in June equals the lesser of 7880 
77.28 	percent of the preceding May's liability or 7880 percent of the average monthly liability 
77.29 	for the previous calendar year.

77.30 	EFFECTIVE DATE. This section is effective beginning with June 2009 tax 
77.31 	liabilities.

77.32 	Sec. 3. Minnesota Statutes 2006, section 297F.09, subdivision 10, is amended to read:
78.1 		Subd. 10.Accelerated tax payment; cigarette or tobacco products distributor.
 78.2 	A cigarette or tobacco products distributor having a liability of $120,000 or more during a 
78.3 	fiscal year ending June 30, shall remit the June liability for the next year in the following 
78.4 	manner:
78.5 	(a) Two business days before June 30 of the year, the distributor shall remit the 
78.6 	actual May liability and 7880 percent of the estimated June liability to the commissioner 
78.7 	and file the return in the form and manner prescribed by the commissioner.
78.8 	(b) On or before August 18 of the year, the distributor shall submit a return showing 
78.9 	the actual June liability and pay any additional amount of tax not remitted in June. A 
78.10 	penalty is imposed equal to ten percent of the amount of June liability required to be paid 
78.11 	in June, less the amount remitted in June. However, the penalty is not imposed if the 
78.12 	amount remitted in June equals the lesser of:
78.13 	(1) 7880 percent of the actual June liability; or
78.14 	(2) 7880 percent of the preceding May's liability.

78.15 	EFFECTIVE DATE. This section is effective beginning with June 2009 tax 
78.16 	liabilities.

78.17 	Sec. 4. Minnesota Statutes 2006, section 297G.09, subdivision 9, is amended to read:
78.18 		Subd. 9.Accelerated tax payment; penalty. A person liable for tax under this 
78.19 	chapter having a liability of $120,000 or more during a fiscal year ending June 30, shall 
78.20 	remit the June liability for the next year in the following manner:
78.21 	(a) Two business days before June 30 of the year, the taxpayer shall remit the actual 
78.22 	May liability and 7880 percent of the estimated June liability to the commissioner and file 
78.23 	the return in the form and manner prescribed by the commissioner.
78.24 	(b) On or before August 18 of the year, the taxpayer shall submit a return showing 
78.25 	the actual June liability and pay any additional amount of tax not remitted in June. A 
78.26 	penalty is imposed equal to ten percent of the amount of June liability required to be paid 
78.27 	in June less the amount remitted in June. However, the penalty is not imposed if the 
78.28 	amount remitted in June equals the lesser of:
78.29 	(1) 7880 percent of the actual June liability; or
78.30 	(2) 7880 percent of the preceding May liability.

78.31 	EFFECTIVE DATE. This section is effective beginning with June 2009 tax 
78.32 	liabilities.

79.1 	ARTICLE 7
79.2 	SPECIAL TAXES

79.3 	Section 1. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:
79.4 		Subdivision 1.Determination. All property includable in the Minnesota gross estate 
79.5 	of a decedent shall be valued in accordance with the provisions of sections 2031 or 2032 
79.6 	and, if applicable, 2032A, of the Internal Revenue Code and any elections made in valuing 
79.7 	the federal gross estate shall be applicable in valuing the Minnesota gross estate. Values 
79.8 	for purposes of the estate tax on both probate and nonprobate assets shall be the same as 
79.9 	those finally determined for purposes of the federal estate tax on a decedent's estate.
79.10 	The value of all property includable in the Minnesota gross estate of a decedent may be 
79.11 	independently determined under those sections for Minnesota estate tax purposes except:
79.12 	(1) as otherwise provided in section 291.075; or
79.13 	(2) if the Internal Revenue Service, after receiving the estate's federal estate tax 
79.14 	return, either conducts a separate appraisal of an asset reported on the return or proposes 
79.15 	a change in the reported valuation of an asset in the estate, in which case the federal 
79.16 	final determination of the value controls.

79.17 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
79.18 	dying after December 31, 2006.

79.19 	Sec. 2. Minnesota Statutes 2006, section 296A.18, subdivision 4, is amended to read:
79.20 		Subd. 4.All-terrain vehicle. Approximately 0.15 0.27 of one percent of all gasoline 
79.21 	received in or produced or brought into this state, except gasoline used for aviation 
79.22 	purposes, is being used for the operation of all-terrain vehicles in this state, and of the total 
79.23 	revenue derived from the imposition of the gasoline fuel tax, 0.15 0.27 of one percent is 
79.24 	the amount of tax on fuel used in all-terrain vehicles operated in this state.

79.25 	EFFECTIVE DATE. This section is effective for revenue received after June 
79.26 	30, 2008.

79.27 	Sec. 3. Minnesota Statutes 2006, section 297F.21, subdivision 3, is amended to read:
79.28 		Subd. 3.Inventory; judicial determination; appeal; disposition of seized 
79.29 	property. (a) Within ten days after the seizure of any alleged contraband, the person 
79.30 	making the seizure shall serve by certified mail an inventory of the property seized on the 
79.31 	person from whom the seizure was made, if known, and on any person known or believed 
79.32 	to have any right, title, interest, or lien in the property, at the last known address, and file 
80.1 	a copy with the commissioner. The notice must include an explanation of the right to 
80.2 	demand a judicial forfeiture determination.
80.3 	(b) Within 60 days after the date of service of the inventory, which is the date of 
80.4 	mailing, the person from whom the property was seized or any person claiming an interest 
80.5 	in the property may file a demand for a judicial determination of the question as to whether 
80.6 	the property was lawfully subject to seizure and forfeiture. The demand must be in the 
80.7 	form of a civil complaint and must be filed with the court administrator in the county in 
80.8 	which the seizure occurred, together with proof of service of a copy of the complaint 
80.9 	on the commissioner of revenue, and the standard filing fee for civil actions unless the 
80.10 	petitioner has the right to sue in forma pauperis under section 563.01. If the value of the 
80.11 	seized property is $7,500 or less, the claimant may file an action in conciliation court for 
80.12 	recovery of the property. If the value of the seized property is less than $500, the claimant 
80.13 	does not have to pay the conciliation court filing fee. 
80.14 	(c) The complaint must be captioned in the name of the claimant as plaintiff and 
80.15 	the seized property as defendant, and must state with specificity the grounds on which 
80.16 	the claimant alleges the property was improperly seized and the plaintiff's interest in the 
80.17 	property seized. No responsive pleading is required of the commissioner, and no court 
80.18 	fees may be charged for the commissioner's appearance in the matter. The proceedings 
80.19 	are governed by the Rules of Civil Procedure. Notwithstanding any law to the contrary, 
80.20 	an action for the return of property seized under this section may not be maintained by 
80.21 	or on behalf of any person who has been served with an inventory unless the person has 
80.22 	complied with this subdivision. The court shall decide whether the alleged contraband is 
80.23 	contraband, as defined in subdivision 1. The court shall hear the action without a jury and 
80.24 	shall try and determine the issues of fact and law involved.
80.25 	(d) When a judgment of forfeiture is entered, the commissioner may, unless the 
80.26 	judgment is stayed pending an appeal, either the commissioner:
80.27 	(1) deliver the forfeited cigarette packages or tobacco products to the commissioner 
80.28 	of human services for use by patients in state institutions may authorize the forfeited 
80.29 	property to be used for the purpose of enforcing a criminal provision of state or federal law;
80.30 	(2) shall cause the property in clause (1) forfeited cigarette packages or tobacco 
80.31 	products not used under clause (1) to be destroyed; or and products used under clause (1) 
80.32 	to be destroyed upon the completion of use; and
80.33 	(3) may cause the forfeited property, other than forfeited cigarette packages or 
80.34 	tobacco products, to be sold at public auction as provided by law.
80.35 	The person making a sale, after deducting the expense of keeping the property, the fee 
80.36 	for seizure, and the costs of the sale, shall pay all liens according to their priority, which 
81.1 	are established as being bona fide and as existing without the lienor having any notice 
81.2 	or knowledge that the property was being used or was intended to be used for or in 
81.3 	connection with the violation. The balance of the proceeds must be paid 75 percent to the 
81.4 	Department of Revenue for deposit as a supplement to its operating fund or similar fund 
81.5 	for official use, and 25 percent to the county attorney or other prosecuting agency that 
81.6 	handled the court proceeding, if there is one, for deposit as a supplement to its operating 
81.7 	fund or similar fund for prosecutorial purposes. If there is no prosecuting authority 
81.8 	involved in the forfeiture, the 25 percent of the proceeds otherwise designated for the 
81.9 	prosecuting authority must be deposited into the general fund.
81.10 	(e) If no demand for judicial determination is made, the property seized is considered 
81.11 	forfeited to the state by operation of law and may be disposed of by the commissioner as 
81.12 	provided in the case of a judgment of forfeiture.

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

81.14 	Sec. 4. Minnesota Statutes 2006, section 297I.15, is amended by adding a subdivision 
81.15 	to read:
81.16 		Subd. 11.Premiums paid to certain foreign insurance companies. With respect 
81.17 	to the state employees group insurance program established under sections 43A.23 to 
81.18 	43A.31, premiums paid for life insurance and accidental death and dismemberment 
81.19 	insurance for eligible employees and dependents, including premiums paid by employees 
81.20 	or dependents for optional coverage, are exempt from the taxes imposed under this chapter 
81.21 	to the extent the premiums are paid to a foreign insurance company domiciled in a state 
81.22 	that exempts its state employee group life insurance program from premium taxes.

81.23 	EFFECTIVE DATE. This section is effective for premiums paid after December 
81.24 	31, 2007.

81.25 	Sec. 5. Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read:
81.26 		Subd. 4.Expiration. The authority to impose the tax under this section expires 
81.27 	January 1, 2008 2013.

81.28 	EFFECTIVE DATE. This section is effective the day following final enactment 
81.29 	and the tax may be imposed on or after that date.

81.30 	Sec. 6. Minnesota Statutes 2006, section 383A.81, subdivision 1, is amended to read:
81.31 		Subdivision 1.Creation. An environmental response fund is created for the 
81.32 	purposes specified in this section. The taxes imposed by section 383A.80 must be 
82.1 	deposited in the fund. The board of county commissioners shall administer the fund either 
82.2 	as a county board, or a housing and redevelopment authority, or a regional rail authority. 

82.3 	Sec. 7. Minnesota Statutes 2006, section 383A.81, subdivision 2, is amended to read:
82.4 		Subd. 2.Uses of fund. The fund created in subdivision 1 must be used for the 
82.5 	following purposes:
82.6 	(1) acquisition through purchase or condemnation of lands or property which are 
82.7 	polluted or contaminated with hazardous substances;
82.8 	(2) paying the costs associated with indemnifying or holding harmless the 
82.9 	entity taking title to lands or property from any liability arising out of the ownership, 
82.10 	remediation, or use of the land or property;
82.11 	(3) paying for the costs of remediating the acquired land or property; or
82.12 	(4) paying the costs associated with remediating lands or property which are polluted 
82.13 	or contaminated with hazardous substances; or
82.14 	(5) paying for the costs associated with improving the property for economic 
82.15 	development, recreational, housing, transportation or rail traffic.

82.16 	Sec. 8. Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read:
82.17 		Subd. 4.Expiration. The authority to impose the tax under this section expires 
82.18 	January 1, 2008 2013.

82.19 	EFFECTIVE DATE. This section is effective the day following final enactment 
82.20 	and the tax may be imposed on or after that date.

82.21 	Sec. 9. [383C.798] COUNTY DEED AND MORTGAGE TAX.
82.22 		Subdivision 1.Authority to impose; rate. (a) The governing body of St. Louis 
82.23 	County may impose a mortgage registry and deed tax.
82.24 	(b) The rate of the mortgage registry tax equals .0001 of the principal.
82.25 	(c) The rate of the deed tax equals .0001 of the amount.
82.26 		Subd. 2.General law provisions apply. The taxes under this section apply to 
82.27 	the same base and must be imposed, collected, administered, and enforced in the same 
82.28 	manner as provided under chapter 287 for the state mortgage registry and deed taxes. 
82.29 	All the provisions of chapter 287 apply to these taxes, except the rate is as specified in 
82.30 	subdivision 1, the term "St. Louis County" must be substituted for "the state," and the 
82.31 	revenue must be deposited as provided in subdivision 3.
83.1 		Subd. 3.Deposit of revenues. All revenues from the tax are for the use of the 
83.2 	St. Louis County Board of Commissioners and must be deposited in the county's 
83.3 	environmental response fund under section 383C.799.
83.4 		Subd. 4.Initial implementation. Documents presented for recording within 60 
83.5 	days after the date of imposition of the tax by the county that are acknowledged, sworn to 
83.6 	before a notary, or certified before the imposition date, must not be rejected for failure to 
83.7 	include the tax imposed under this section.
83.8 		Subd. 5.Expiration. The authority to impose the tax under this section expires 
83.9 	January 1, 2013.

83.10 	Sec. 10. [383C.799] ENVIRONMENTAL RESPONSE FUND.
83.11 		Subdivision 1.Creation. An environmental response fund is created for the 
83.12 	purposes specified in this section. The taxes imposed under section 383C.798 must be 
83.13 	deposited in the fund. The Board of County Commissioners shall administer the fund 
83.14 	either as a county board or a housing and redevelopment authority.
83.15 		Subd. 2.Uses of fund. The fund created in subdivision 1 must be used for the 
83.16 	following purposes:
83.17 	(1) acquisition through purchase or condemnation of lands or property which are 
83.18 	polluted or contaminated with hazardous substances;
83.19 	(2) paying the costs associated with indemnifying or holding harmless the 
83.20 	entity taking title to lands or property from any liability arising out of the ownership, 
83.21 	remediation, or use of the land or property;
83.22 	(3) paying for the costs of remediating the acquired land or property; or
83.23 	(4) paying the costs associated with remediating lands or property which are polluted 
83.24 	or contaminated with hazardous substances.
83.25 		Subd. 3.Matching funds. In expending funds under this section, the county shall 
83.26 	seek matching funds from contamination cleanup funds administered by the commissioner 
83.27 	of the Department of Employment and Economic Development, the federal government, 
83.28 	the private sector, and any other source.
83.29 		Subd. 4.Bonds. The county may pledge the proceeds from the taxes imposed by 
83.30 	section 383C.798 to bonds issued under this section and chapters 462, 469, and 475. 
83.31 		Subd. 5.Land sales. Land or property acquired under this section may be resold 
83.32 	at fair market value. Proceeds from the sale of the land must be deposited in the 
83.33 	environmental response fund.

83.34 	Sec. 11. [383D.75] COUNTY DEED AND MORTGAGE TAX.
84.1 		Subdivision 1.Authority to impose; rate. (a) The governing body of Dakota 
84.2 	County may impose a mortgage registry and deed tax.
84.3 	(b) The rate of the mortgage registry tax equals .0001 of the principal.
84.4 	(c) The rate of the deed tax equals .0001 of the amount.
84.5 		Subd. 2.General law provisions apply. The taxes under this section apply to 
84.6 	the same base and must be imposed, collected, administered, and enforced in the same 
84.7 	manner as provided under chapter 287 for the state mortgage registry and deed taxes. 
84.8 	All the provisions of chapter 287 apply to these taxes, except the rate is as specified in 
84.9 	subdivision 1, the term "Dakota County" must be substituted for "the state," and the 
84.10 	revenue must be deposited as provided in subdivision 3.
84.11 		Subd. 3.Deposit of revenues. All revenues from the tax are for the use of 
84.12 	the Dakota County Board of Commissioners and must be deposited in the county's 
84.13 	environmental response fund under section  383D.76.
84.14 		Subd. 4.Initial implementation. Documents presented for recording within 60 
84.15 	days after the date of imposition of the tax by the county that are acknowledged, sworn to 
84.16 	before a notary, or certified before the imposition date, must not be rejected for failure to 
84.17 	include the tax imposed under this section.
84.18 		Subd. 5.Expiration. The authority to impose the tax under this section expires 
84.19 	January 1, 2013.

84.20 	Sec. 12. [383D.76] ENVIRONMENTAL RESPONSE FUND.
84.21 		Subdivision 1.Creation. An environmental response fund is created for the 
84.22 	purposes specified in this section. The taxes imposed under section 383D.75 must be 
84.23 	deposited in the fund. The Board of County Commissioners shall administer the fund 
84.24 	either as a county board or a housing and redevelopment authority.
84.25 		Subd. 2.Uses of fund. The fund created in subdivision 1 must be used for the 
84.26 	following purposes:
84.27 	(1) acquisition through purchase or condemnation of lands or property which are 
84.28 	polluted or contaminated with hazardous substances;
84.29 	(2) paying the costs associated with indemnifying or holding harmless the 
84.30 	entity taking title to lands or property from any liability arising out of the ownership, 
84.31 	remediation, or use of the land or property;
84.32 	(3) paying for the costs of remediating the acquired land or property; or
84.33 	(4) paying the costs associated with remediating lands or property which are polluted 
84.34 	or contaminated with hazardous substances.
85.1 		Subd. 3.Matching funds. In expending funds under this section, the county shall 
85.2 	seek matching funds from contamination cleanup funds administered by the commissioner 
85.3 	of the Department of Employment and Economic Development, the Metropolitan Council, 
85.4 	the federal government, the private sector, and any other source.
85.5 		Subd. 4.Bonds. The county may pledge the proceeds from the taxes imposed by 
85.6 	section  383D.75 to bonds issued under this chapter and chapters 462, 469, and 475. 
85.7 		Subd. 5.Land sales. Land or property acquired under this section may be resold 
85.8 	at fair market value. Proceeds from the sale of the land must be deposited in the 
85.9 	environmental response fund.

85.10 	Sec. 13. [383E.235] COUNTY DEED AND MORTGAGE TAX.
85.11 		Subdivision 1.Authority to impose; rate. (a) The governing body of Anoka 
85.12 	County may impose a mortgage registry and deed tax.
85.13 	(b) The rate of the mortgage registry tax equals .0001 of the principal.
85.14 	(c) The rate of the deed tax equals .0001 of the amount.
85.15 		Subd. 2.General law provisions apply. The taxes under this section apply to 
85.16 	the same base and must be imposed, collected, administered, and enforced in the same 
85.17 	manner as provided under chapter 287 for the state mortgage registry and deed taxes. 
85.18 	All the provisions of chapter 287 apply to these taxes, except the rate is as specified 
85.19 	in subdivision 1, the term "Anoka County" must be substituted for "the state," and the 
85.20 	revenue must be deposited as provided in subdivision 3.
85.21 		Subd. 3.Deposit of revenues. All revenues from the tax are for the use of the Anoka 
85.22 	County Board of Commissioners and must be deposited in the county's environmental 
85.23 	response fund under section 383E.236.
85.24 		Subd. 4.Initial implementation. Documents presented for recording within 60 
85.25 	days after the date of imposition of the tax by the county that are acknowledged, sworn to 
85.26 	before a notary, or certified before the imposition date, must not be rejected for failure to 
85.27 	include the tax imposed under this section.
85.28 		Subd. 5.Expiration. The authority to impose the tax under this section expires 
85.29 	January 1, 2013.

85.30 	Sec. 14. [383E.236] ENVIRONMENTAL RESPONSE FUND.
85.31 		Subdivision 1.Creation. An environmental response fund is created for the 
85.32 	purposes specified in this section. The taxes imposed under section 383E.235 must be 
85.33 	deposited in the fund. The Board of County Commissioners shall administer the fund 
85.34 	either as a county board or a housing and redevelopment authority.
86.1 		Subd. 2.Uses of fund. The fund created in subdivision 1 must be used for the 
86.2 	following purposes:
86.3 	(1) acquisition through purchase or condemnation of lands or property which are 
86.4 	polluted or contaminated with hazardous substances;
86.5 	(2) paying the costs associated with indemnifying or holding harmless the 
86.6 	entity taking title to lands or property from any liability arising out of the ownership, 
86.7 	remediation, or use of the land or property;
86.8 	(3) paying for the costs of remediating the acquired land or property; or
86.9 	(4) paying the costs associated with remediating lands or property which are polluted 
86.10 	or contaminated with hazardous substances.
86.11 		Subd. 3.Matching funds. In expending funds under this section, the county shall 
86.12 	seek matching funds from contamination cleanup funds administered by the commissioner 
86.13 	of the Department of Employment and Economic Development, the Metropolitan Council, 
86.14 	the federal government, the private sector, and any other source.
86.15 		Subd. 4.Bonds. The county may pledge the proceeds from the taxes imposed by 
86.16 	section 383E.235 to bonds issued under this section and chapters 462, 469, and 475. 
86.17 		Subd. 5.Land sales. Land or property acquired under this section may be resold 
86.18 	at fair market value. Proceeds from the sale of the land must be deposited in the 
86.19 	environmental response fund.
86.20 		Subd. 6.DOT assistance. The commissioner of transportation shall collaborate with 
86.21 	the county and any affected municipality by providing technical assistance and support in 
86.22 	cleaning up a contaminated site related to a trunk highway or railroad improvement.

86.23 	Sec. 15. Laws 2003, chapter 128, article 1, section 172, as amended by Laws 2005, 
86.24 	First Special Session chapter 1, article 4, section 118, is amended to read:
86.25 	Sec. 172. TEMPORARY PETROFUND FEE EXEMPTION FOR 
86.26 	MINNESOTA COMMERCIAL AIRLINES.
 86.27 	(a) A commercial airline providing regularly scheduled jet service and with its 
86.28 	corporate headquarters in Minnesota is exempt from the fee established in Minnesota 
86.29 	Statutes, section 115C.08, subdivision 3, until July 1, 2007 2009, provided the airline 
86.30 	develops a plan approved by the commissioner of commerce demonstrating that the 
86.31 	savings from this exemption will go towards minimizing job losses in Minnesota, and to 
86.32 	support the airline's efforts to avoid filing for resolve federal bankruptcy protections
86.33 	proceedings.
86.34 	(b) A commercial airline exempted from the fee is ineligible to receive 
86.35 	reimbursement under Minnesota Statutes, chapter 115C, until July 1, 2007 2009. A 
87.1 	commercial airline that has a release during the fee exemption period is ineligible to 
87.2 	receive reimbursement under Minnesota Statutes, chapter 115C, for the costs incurred in 
87.3 	response to that release.

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

87.5 	ARTICLE 8
87.6 	MINERALS

87.7 	Section 1. Minnesota Statutes 2006, section 276A.01, subdivision 3, is amended to 
87.8 	read:
87.9 		Subd. 3.Commercial-industrial property. "Commercial-industrial property" 
87.10 	means the following categories of property, as defined in section 273.13, excluding that 
87.11 	portion of the property (i) that may, by law, constitute the tax base for a tax increment 
87.12 	pledged pursuant to section 469.042 or 469.162 or sections 469.174 to 469.178, 
87.13 	certification of which was requested prior to May 1, 1996, to the extent and while the tax 
87.14 	increment is so pledged; or (ii) that is exempt from taxation under section 272.02: 
87.15 	(1) that portion of class 5 property consisting of unmined iron ore and low-grade 
87.16 	iron-bearing formations as defined in section 273.14, tools, implements, and machinery, 
87.17 	except the portion of high voltage transmission lines, the value of which is deducted from 
87.18 	net tax capacity under section 273.425; and 
87.19 	(2) that portion of class 3 and class 5 property which is either used or zoned for use 
87.20 	for any commercial or industrial purpose, including property that becomes taxable under 
87.21 	section 6, except for such property which is, or, in the case of property under construction, 
87.22 	will when completed be used exclusively for residential occupancy and the provision of 
87.23 	services to residential occupants thereof. Property must be considered as used exclusively 
87.24 	for residential occupancy only if each of not less than 80 percent of its occupied residential 
87.25 	units is, or, in the case of property under construction, will when completed be occupied 
87.26 	under an oral or written agreement for occupancy over a continuous period of not less 
87.27 	than 30 days.
87.28 	If the classification of property prescribed by section 273.13 is modified by 
87.29 	legislative amendment, the references in this subdivision are to the successor class or 
87.30 	classes of property, or portions thereof, that include the kinds of property designated 
87.31 	in this subdivision. 

87.32 	EFFECTIVE DATE. This section is effective for the 2008 assessment and 
87.33 	thereafter.

88.1 	Sec. 2. Minnesota Statutes 2006, section 276A.04, is amended to read:
88.2 	276A.04 INCREASE IN NET TAX CAPACITY.
88.3 	By July 15 of 1997 and each subsequent year, the auditor of each county in the 
88.4 	area shall determine the amount, if any, by which the net tax capacity determined in the 
88.5 	preceding year pursuant to section 276A.03, of commercial-industrial property subject to 
88.6 	taxation within each municipality in the county exceeds the net tax capacity in 1995 of 
88.7 	commercial-industrial property subject to taxation within that municipality, including the 
88.8 	total net tax capacity of property that becomes taxable under section 6. If a municipality is 
88.9 	located in two or more counties within the area, the auditors of those counties shall certify 
88.10 	the data required by section 276A.03 to the county auditor responsible for allocating 
88.11 	the levies of that municipality between or among the affected counties. That county 
88.12 	auditor shall determine the amount of the net excess, if any, for the municipality under 
88.13 	this section, and certify that amount under section 276A.05. The increase in total net tax 
88.14 	capacity determined by this section must be reduced by the amount of any decreases in 
88.15 	the net tax capacity of commercial-industrial property resulting from any court decisions, 
88.16 	court-related stipulation agreements, or abatements for a prior year, and only in the 
88.17 	amount of such decreases made during the 12-month period ending on May 1 of the 
88.18 	current assessment year, where the decreases, if originally reflected in the determination of 
88.19 	a prior year's net tax capacity under section 276A.03, would have resulted in a smaller 
88.20 	contribution from the municipality in that year. An adjustment for the decreases shall be 
88.21 	made only if the municipality made a contribution in a prior year based on the higher net 
88.22 	tax capacity of the commercial-industrial property. 

88.23 	EFFECTIVE DATE. This section is effective for the 2008 assessment and 
88.24 	thereafter.

88.25 	Sec. 3. Minnesota Statutes 2006, section 298.22, is amended by adding a subdivision 
88.26 	to read:
88.27 		Subd. 5a.Forest trust. The commissioner, upon the affirmative vote of a majority 
88.28 	of the members of the board, may purchase forest lands in the taconite assistance area 
88.29 	defined in under section 273.1341 with funds specifically authorized for the purchase. The 
88.30 	acquired forest lands must be held in trust for the benefit of the citizens of the taconite 
88.31 	assistance area as the Iron Range Miners' Memorial Forest. The forest trust lands shall be 
88.32 	managed and developed for recreation and economic development purposes. Proceeds 
88.33 	derived from the management of the lands and from the sale of timber or removal of 
88.34 	gravel or other minerals from these forest lands shall be deposited into an Iron Range 
89.1 	Miners' Memorial Forest account that is established within the state financial accounts. 
89.2 	Funds may be expended from the account upon approval of a majority of the members of 
89.3 	the board to purchase, manage, administer, convey interests in, and improve the forest 
89.4 	lands. By majority vote of the members of the board, money in the Iron Range Miners' 
89.5 	Memorial Forest account may be transferred into the corpus of the Douglas J. Johnson 
89.6 	economic protection trust fund established under sections 298.291 to 298.294. The 
89.7 	property acquired under the authority granted by this subdivision and income derived from 
89.8 	the property or the operation or management of the property are exempt from taxation 
89.9 	by the state or its political subdivisions.

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

89.11 	Sec. 4. Minnesota Statutes 2006, section 298.2214, subdivision 2, is amended to read:
89.12 		Subd. 2.Iron Range Higher Education Committee; membership. The members 
89.13 	of the committee shall consist of:
89.14 	(1) one member appointed by the governor;
89.15 	(2) one member appointed by the president of the University of Minnesota;
89.16 	(3) two four members appointed by the commissioner of the Iron Range Resources 
89.17 	and Rehabilitation Board appointed by the chair; and
89.18 	(4) the commissioner of Iron Range resources and rehabilitation
89.19 	(4) the president of the Northeast Higher Education District or its successor.

89.20 	Sec. 5. Minnesota Statutes 2006, section 298.24, subdivision 1, is amended to read:
89.21 		Subdivision 1.Imposed; calculation. (a) For concentrate produced in 2001, 2002, 
89.22 	and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and 
89.23 	quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon 
89.24 	the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore 
89.25 	concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the 
89.26 	same rate imposed for concentrates produced in 2004.
89.27 	(b) For concentrates produced in 2006 and subsequent years, the tax rate shall be 
89.28 	equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate 
89.29 	multiplied by the percentage increase in the implicit price deflator from the fourth quarter 
89.30 	of the second preceding year to the fourth quarter of the preceding year. "Implicit price 
89.31 	deflator" means the implicit price deflator for the gross domestic product prepared by the 
89.32 	Bureau of Economic Analysis of the United States Department of Commerce.
89.33 	(c) On concentrates produced in 1997 and thereafter, an additional tax is imposed 
89.34 	equal to three cents per gross ton of merchantable iron ore concentrate for each one 
90.1 	percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees 
90.2 	Fahrenheit.
90.3 	(d) The tax shall be imposed on the average of the production for the current year 
90.4 	and the previous two years. The rate of the tax imposed will be the current year's tax rate. 
90.5 	This clause shall not apply in the case of the closing of a taconite facility if the property 
90.6 	taxes on the facility would be higher if this clause and section 298.25 were not applicable.
90.7 	(e) If the tax or any part of the tax imposed by this subdivision is held to be 
90.8 	unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate 
90.9 	produced shall be imposed.
90.10 	(f) Consistent with the intent of this subdivision to impose a tax based upon the 
90.11 	weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 
90.12 	determine the weight of merchantable iron ore concentrate included in fluxed pellets by 
90.13 	subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 
90.14 	flux additives included in the pellets from the weight of the pellets. For purposes of this 
90.15 	paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 
90.16 	olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 
90.17 	No subtraction from the weight of the pellets shall be allowed for binders, mineral and 
90.18 	chemical additives other than basic flux additives, or moisture.
90.19 	(g)(1) Notwithstanding any other provision of this subdivision, for the first two years 
90.20 	of a plant's commercial production of direct reduced ore, no tax is imposed under this 
90.21 	section. As used in this paragraph, "commercial production" is production of more than 
90.22 	50,000 tons of direct reduced ore in the current year or in any prior year, "noncommercial 
90.23 	production" is production of 50,000 tons or less of direct reduced ore in any year, and 
90.24 	"direct reduced ore" is ore that results in a product that has an iron content of at least 75 
90.25 	percent. For the third year of a plant's commercial production of direct reduced ore, the 
90.26 	rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined 
90.27 	under this subdivision. For the fourth commercial production year, the rate is 50 percent of 
90.28 	the rate otherwise determined under this subdivision; for the fifth commercial production 
90.29 	year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for 
90.30 	all subsequent commercial production years, the full rate is imposed.
90.31 	(2) Subject to clause (1), production of direct reduced ore in this state is subject to 
90.32 	the tax imposed by this section, but if that production is not produced by a producer 
90.33 	of taconite or iron sulfides, the production of taconite or iron sulfides consumed in the 
90.34 	production of direct reduced iron in this state is not subject to the tax imposed by this 
90.35 	section on taconite or iron sulfides.
91.1 	(3) Notwithstanding any other provision of this subdivision, no tax is imposed 
91.2 	on direct reduced ore under this section during the facility's noncommercial production 
91.3 	of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 
91.4 	production of direct reduced ore is subject to the tax imposed by this section on taconite 
91.5 	and iron sulphides. Three-year average production of direct reduced ore does not 
91.6 	include production of direct reduced ore in any noncommercial year. Three-year average 
91.7 	production for a direct reduced ore facility that has noncommercial production is the 
91.8 	average of the commercial production of direct reduced ore for the current year and the 
91.9 	previous two commercial years.
91.10 	(4) This paragraph applies only to plants for which all environmental permits have 
91.11 	been obtained and construction has begun before July 1, 2008.

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

91.13 	Sec. 6. Minnesota Statutes 2006, section 298.25, is amended to read:
91.14 	298.25 TAXES ADDITIONAL TO OCCUPATION TAX; IN LIEU OF OTHER 
91.15 	TAXES.
91.16 	The taxes imposed under section 298.24 shall be in addition to the occupation tax 
91.17 	imposed upon the business of mining and producing iron ore. Except as herein otherwise 
91.18 	provided, such taxes shall be in lieu of all other taxes upon such taconite, iron sulphides, 
91.19 	and direct reduced ore or the lands in which they are contained, or upon the mining or 
91.20 	quarrying thereof, or the production of concentrate or direct reduced ore therefrom, or 
91.21 	upon the concentrate or direct reduced ore produced, or upon the machinery, equipment, 
91.22 	tools, supplies and buildings used in such mining, quarrying or production, or upon the 
91.23 	lands occupied by, or used in connection with, such mining, quarrying or production 
91.24 	facilities. If electric or steam power for the mining, transportation or concentration of 
91.25 	such taconite, concentrates or direct reduced ore produced therefrom is generated in 
91.26 	plants principally devoted to the generation of power for such purposes, the plants in 
91.27 	which such power is generated and all machinery, equipment, tools, supplies, transmission 
91.28 	and distribution lines used in the generation and distribution of such power, shall not be 
91.29 	considered to be machinery, equipment, tools, supplies and buildings used in the mining, 
91.30 	quarrying, or production of taconite, taconite concentrates or direct reduced ore within 
91.31 	the meaning of this section, and shall be subject to general property taxation. If part 
91.32 	of the power generated in such a plant is used for purposes other than the mining or 
91.33 	concentration of taconite or direct reduced ore or the transportation or loading of taconite, 
91.34 	the concentrates thereof or direct reduced ore, a proportionate share of the value of such 
92.1 	generating facilities, equal to the proportion that the power used for such other purpose 
92.2 	bears to the generating capacity of the plant, shall be subject to the general property tax 
92.3 	in the same manner as other property; provided, power generated in such a plant and 
92.4 	exchanged for an equivalent amount of power which is used for the mining, transportation, 
92.5 	or concentration of such taconite, concentrates or direct reduced ore produced therefrom, 
92.6 	shall be considered as used for such purposes within the meaning of this section. Nothing 
92.7 	herein shall prevent the assessment and taxation of the surface of reserve land containing 
92.8 	taconite and not occupied by such facilities or used in connection therewith at the value 
92.9 	thereof without regard to the taconite or iron sulphides therein, nor the assessment and 
92.10 	taxation of merchantable iron ore or other minerals, or iron-bearing materials other than 
92.11 	taconite or iron sulphides in such lands in the manner provided by law, nor the assessment 
92.12 	and taxation of facilities used in producing sulphur or sulphur products from iron sulphide 
92.13 	concentrates, or in refining such sulphur products, under the general property tax laws. 
92.14 	Nothing herein shall except from general taxation or from taxation as provided by other 
92.15 	laws any property used for residential or townsite purposes, including utility services 
92.16 	thereto. This section does not provide an exemption from general property taxation for ore 
92.17 	docks even if located at the site of a taconite production facility.

92.18 	EFFECTIVE DATE. This section is effective for taxes levied in 2008, payable 
92.19 	in 2009, and thereafter.

92.20 	Sec. 7. Minnesota Statutes 2006, section 298.28, subdivision 4, is amended to read:
92.21 		Subd. 4.School districts. (a) 17.15 23.15 cents per taxable ton, plus the increase 
92.22 	provided in paragraph (d) must be allocated to qualifying school districts to be distributed, 
92.23 	based upon the certification of the commissioner of revenue, under paragraphs (b) and,
92.24 	(c), except as otherwise provided in paragraphand (f). 
92.25 	(b) (i) 3.43 cents per taxable ton must be distributed to the school districts in which 
92.26 	the lands from which taconite was mined or quarried were located or within which the 
92.27 	concentrate was produced. The distribution must be based on the apportionment formula 
92.28 	prescribed in subdivision 2. 
92.29 	(ii) Four cents per taxable ton from each taconite facility must be distributed to 
92.30 	each affected school district for deposit in a fund dedicated to building maintenance 
92.31 	and repairs, as follows:
92.32 	(1) proceeds from Keewatin Taconite or its successor are distributed to Independent 
92.33 	School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor 
92.34 	districts;
93.1 	(2) proceeds from the Hibbing Taconite Company or its successor are distributed to 
93.2 	Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor 
93.3 	districts;
93.4 	(3) proceeds from the Mittal Steel Company and Minntac or their successors are 
93.5 	distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia, 
93.6 	2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts; 
93.7 	(4) proceeds from the Northshore Mining Company or its successor are distributed 
93.8 	to Independent School Districts Nos. 2142, St. Louis County, and 318, Lake Superior, 
93.9 	or their successor districts; and
93.10 	(5) proceeds from United Taconite or its successor are distributed to Independent 
93.11 	School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their 
93.12 	successor districts.
93.13 	Revenues that are required to be distributed to more than one district shall be 
93.14 	apportioned according to the number of pupil units identified in section 126C.05, 
93.15 	subdivision 1, enrolled in the second previous year.
93.16 	(c)(i) 13.7215.72 cents per taxable ton, less any amount distributed under paragraph 
93.17 	(e), shall be distributed to a group of school districts comprised of those school districts 
93.18 	which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is 
93.19 	a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion 
93.20 	to school district indexes as follows: for each school district, its pupil units determined 
93.21 	under section 126C.05 for the prior school year shall be multiplied by the ratio of the 
93.22 	average adjusted net tax capacity per pupil unit for school districts receiving aid under 
93.23 	this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 
93.24 	ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 
93.25 	Each district shall receive that portion of the distribution which its index bears to the sum 
93.26 	of the indices for all school districts that receive the distributions. 
93.27 	(ii) Notwithstanding clause (i), each school district that receives a distribution 
93.28 	under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this 
93.29 	clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on 
93.30 	severed mineral values after reduction for any portion distributed to cities and towns under 
93.31 	section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy 
93.32 	reduction under section 126C.48, subdivision 8, for the second year prior to the year of the 
93.33 	distribution shall receive a distribution equal to the difference; the amount necessary to 
93.34 	make this payment shall be derived from proportionate reductions in the initial distribution 
93.35 	to other school districts under clause (i). 
94.1 	(d) Any school district described in paragraph (c) where a levy increase pursuant to 
94.2 	section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001, 
94.3 	shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the 
94.4 	pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous 
94.5 	year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent 
94.6 	times the district's taxable net tax capacity in the second previous year. 
94.7 	If the total amount provided by paragraph (d) is insufficient to make the payments 
94.8 	herein required then the entitlement of $175 per pupil unit shall be reduced uniformly 
94.9 	so as not to exceed the funds available. Any amounts received by a qualifying school 
94.10 	district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general 
94.11 	education aid which the district receives pursuant to section 126C.13 or the permissible 
94.12 	levies of the district. Any amount remaining after the payments provided in this paragraph 
94.13 	shall be paid to the commissioner of Iron Range resources and rehabilitation who shall 
94.14 	deposit the same in the taconite environmental protection fund and the Douglas J. Johnson 
94.15 	economic protection trust fund as provided in subdivision 11. 
94.16 	Each district receiving money according to this paragraph shall reserve the lesser of 
94.17 	the amount received under this paragraph or $25 times the number of pupil units served 
94.18 	in the district. It may use the money for early childhood programs or for outcome-based 
94.19 	learning programs that enhance the academic quality of the district's curriculum. The 
94.20 	outcome-based learning programs must be approved by the commissioner of education.
94.21 	(e) There shall be distributed to any school district the amount which the school 
94.22 	district was entitled to receive under section 298.32 in 1975. 
94.23 	(f) Effective for the distribution in 2003 only, five percent of the distributions to 
94.24 	school districts under paragraphs (b), (c), and (e); subdivision 6, paragraph (c); subdivision 
94.25 	11; and section 298.225, shall be distributed to the general fund. The remainder less any 
94.26 	portion distributed to cities and towns under section 126C.48, subdivision 8, paragraph 
94.27 	(5), shall be distributed to the Douglas J. Johnson economic protection trust fund created 
94.28 	in section 298.292. Fifty percent of the amount distributed to the Douglas J. Johnson 
94.29 	economic protection trust fund shall be made available for expenditure under section 
94.30 	298.293 as governed by section 298.296. Effective in 2003 only, 100 percent of the 
94.31 	distributions to school districts under section 477A.15 less any portion distributed to cities 
94.32 	and towns under section 126C.48, subdivision 8, paragraph (5), shall be distributed to the 
94.33 	general fund. Four cents per taxable ton must be distributed to qualifying school districts 
94.34 	according to the distribution specified in paragraph (b), clause (ii), and two cents per 
94.35 	taxable ton must be distributed according to the distribution specified in paragraph (c). 
94.36 	These amounts are not subject to section 126C.48, subdivision 8.

95.1 	EFFECTIVE DATE. This section is effective for distributions in 2009 and 
95.2 	thereafter.

95.3 	Sec. 8. Minnesota Statutes 2006, section 298.28, subdivision 5, is amended to read:
95.4 		Subd. 5.Counties. (a) 26.05 cents per taxable ton is allocated to counties to be 
95.5 	distributed, based upon certification by the commissioner of revenue, under paragraphs 
95.6 	(b) to (d). 
95.7 	(b) 20.525 15.525 cents per taxable ton shall be distributed to the county in which 
95.8 	the taconite is mined or quarried or in which the concentrate is produced, less any 
95.9 	amount which is to be distributed pursuant to paragraph (c). The apportionment formula 
95.10 	prescribed in subdivision 2 is the basis for the distribution. 
95.11 	(c) If an electric power plant owned by and providing the primary source of power 
95.12 	for a taxpayer mining and concentrating taconite is located in a county other than the 
95.13 	county in which the mining and the concentrating processes are conducted, one cent per 
95.14 	taxable ton of the tax distributed to the counties pursuant to paragraph (b) and imposed 
95.15 	on and collected from such taxpayer shall be paid to the county in which the power plant 
95.16 	is located.
95.17 	(d) 5.525 10.525 cents per taxable ton shall be paid to the county from which the 
95.18 	taconite was mined, quarried or concentrated to be deposited in the county road and 
95.19 	bridge fund. If the mining, quarrying and concentrating, or separate steps in any of those 
95.20 	processes are carried on in more than one county, the commissioner shall follow the 
95.21 	apportionment formula prescribed in subdivision 2. 

95.22 	EFFECTIVE DATE. This section is effective for distributions in 2009 and 
95.23 	thereafter.

95.24 	Sec. 9. Minnesota Statutes 2006, section 298.28, is amended by adding a subdivision 
95.25 	to read:
95.26 		Subd. 9d.Iron Range higher education account. Two cents per taxable ton must 
95.27 	be allocated to the Iron Range Resources and Rehabilitation Board to be deposited in 
95.28 	an Iron Range higher education account that is hereby created, to be used for higher 
95.29 	education programs conducted at educational institutions in the taconite assistance area 
95.30 	defined in section 273.1341. The Iron Range Higher Education committee under section 
95.31 	298.2214 and the Iron Range Resources and Rehabilitation Board must approve all 
95.32 	expenditures from the account.

96.1 	EFFECTIVE DATE. This section is effective for production in 2007, distributions 
96.2 	in 2008, and thereafter.

96.3 	Sec. 10. Minnesota Statutes 2006, section 298.282, subdivision 1, is amended to read:
96.4 		Subdivision 1.Distribution of taconite municipal aid account. The amount 
96.5 	deposited with the county as provided in section 298.28, subdivision 3, must be distributed 
96.6 	as provided by this section among: (1) the municipalities comprising a tax relief area 
96.7 	under section 273.134, paragraph (b),; (2) a township that contains a state park consisting 
96.8 	primarily of an underground iron ore mine; and (3) a city located within five miles of that 
96.9 	state park, each being referred to in this section as a qualifying municipality. 

96.10 	EFFECTIVE DATE. This section is effective for distributions in 2008 and 
96.11 	thereafter.

96.12 	Sec. 11. Minnesota Statutes 2006, section 298.292, subdivision 2, is amended to read:
96.13 		Subd. 2.Use of money. Money in the Douglas J. Johnson economic protection trust 
96.14 	fund may be used for the following purposes:
96.15 	(1) to provide loans, loan guarantees, interest buy-downs and other forms of 
96.16 	participation with private sources of financing, but a loan to a private enterprise shall be 
96.17 	for a principal amount not to exceed one-half of the cost of the project for which financing 
96.18 	is sought, and the rate of interest on a loan to a private enterprise shall be no less than the 
96.19 	lesser of eight percent or an interest rate three percentage points less than a full faith 
96.20 	and credit obligation of the United States government of comparable maturity, at the 
96.21 	time that the loan is approved;
96.22 	(2) to fund reserve accounts established to secure the payment when due of the 
96.23 	principal of and interest on bonds issued pursuant to section 298.2211; 
96.24 	(3) to pay in periodic payments or in a lump sum payment any or all of the interest 
96.25 	on bonds issued pursuant to chapter 474 for the purpose of constructing, converting, 
96.26 	or retrofitting heating facilities in connection with district heating systems or systems 
96.27 	utilizing alternative energy sources; and
96.28 	(4) to invest in a venture capital fund or enterprise that will provide capital to other 
96.29 	entities that are engaging in, or that will engage in, projects or programs that have the 
96.30 	purposes set forth in subdivision 1. No investments may be made in a venture capital fund 
96.31 	or enterprise unless at least two other unrelated investors make investments of at least 
96.32 	$500,000 in the venture capital fund or enterprise, and the investment by the Douglas 
96.33 	J. Johnson economic protection trust fund may not exceed the amount of the largest 
96.34 	investment by an unrelated investor in the venture capital fund or enterprise. For purposes 
97.1 	of this subdivision, an "unrelated investor" is a person or entity that is not related to 
97.2 	the entity in which the investment is made or to any individual who owns more than 40 
97.3 	percent of the value of the entity, in any of the following relationships: spouse, parent, 
97.4 	child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of 
97.5 	the value of all interests in it. For purposes of determining the limitations under this 
97.6 	clause, the amount of investments made by an investor other than the Douglas J. Johnson 
97.7 	economic protection trust fund is the sum of all investments made in the venture capital 
97.8 	fund or enterprise during the period beginning one year before the date of the investment 
97.9 	by the Douglas J. Johnson economic protection trust fund; and
97.10 	(5) to purchase forest land in the taconite assistance area defined in section 273.1341 
97.11 	to be held and managed as a public trust for the benefit of the area for the purposes 
97.12 	authorized in section 298.22, subdivision 5a.
97.13 	Money from the trust fund shall be expended only in or for the benefit of the taconite 
97.14 	assistance area defined in section 273.1341. 

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

97.16 	Sec. 12. Minnesota Statutes 2006, section 298.296, subdivision 2, is amended to read:
97.17 		Subd. 2.Expenditure of funds. (a) Before January 1, 2028, funds may be expended 
97.18 	on projects and for administration of the trust fund only from the net interest, earnings, 
97.19 	and dividends arising from the investment of the trust at any time, including net interest, 
97.20 	earnings, and dividends that have arisen prior to July 13, 1982, plus $10,000,000 made 
97.21 	available for use in fiscal year 1983, except that any amount required to be paid out of the 
97.22 	trust fund to provide the property tax relief specified in Laws 1977, chapter 423, article 
97.23 	X, section 4, and to make school bond payments and payments to recipients of taconite 
97.24 	production tax proceeds pursuant to section 298.225, may be taken from the corpus of 
97.25 	the trust. 
97.26 	(b) Additionally, upon recommendation by the board, up to $13,000,000 from the 
97.27 	corpus of the trust may be made available for use as provided in subdivision 4, and up to 
97.28 	$10,000,000 from the corpus of the trust may be made available for use as provided in 
97.29 	section 298.2961. 
97.30 	(c) Additionally, an amount equal to 20 percent of the value of the corpus of the trust 
97.31 	on May 18, 2002, not including the funds authorized in paragraph (b), plus the amounts 
97.32 	made available under section 298.28, subdivision 4, and Laws 2002, chapter 377, article 
97.33 	8, section 17, may be expended on projects. Funds may be expended for projects under 
97.34 	this paragraph only if the project: 
98.1 	(1) is for the purposes established under section 298.292, subdivision 1, clause 
98.2 	(1) or (2); and 
98.3 	(2) is approved by the board upon an affirmative vote of at least ten of its members.
98.4 	No money made available under this paragraph or paragraph (d) can be used for 
98.5 	administrative or operating expenses of the Iron Range Resources and Rehabilitation 
98.6 	Board or expenses relating to any facilities owned or operated by the board on May 18, 
98.7 	2002.
98.8 	(d) Upon recommendation by a unanimous vote of all members of the board, 
98.9 	amounts in addition to those authorized under paragraphs (a), (b), and (c) may be 
98.10 	expended on projects described in section 298.292, subdivision 1. 
98.11 	(e) Annual administrative costs, not including detailed engineering expenses for the 
98.12 	projects, shall not exceed five percent of the net interest, dividends, and earnings arising 
98.13 	from the trust in the preceding fiscal year.
98.14 	(f) Principal and interest received in repayment of loans made pursuant to this 
98.15 	section, and earnings on other investments made under section 298.292, subdivision 2, 
98.16 	clause (4), shall be deposited in the state treasury and credited to the trust. These receipts 
98.17 	are appropriated to the board for the purposes of sections 298.291 to 298.298. 
98.18 	(g) Additionally, notwithstanding section 298.293, upon affirmative vote of a 
98.19 	majority of the members of the board, money from the corpus of the trust may be expanded 
98.20 	to purchase forest lands within the taconite assistance area as provided in sections 298.22, 
98.21 	subdivision 5a, and 298.292, subdivision 2, clause (5).

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

98.23 	Sec. 13. Minnesota Statutes 2006, section 298.2961, subdivision 4, is amended to read:
98.24 		Subd. 4.Grant and loan fund. (a) A fund is established to receive distributions 
98.25 	under section 298.28, subdivision 9b, and to make grants or loans as provided in this 
98.26 	subdivision. Any grant or loan made under this subdivision must be approved by 
98.27 	a majority of the members of the Iron Range Resources and Rehabilitation Board, 
98.28 	established under section 298.22.
98.29 	(b) Distributions received in calendar year 2005 are allocated to the city of Virginia 
98.30 	for improvements and repairs to the city's steam heating system.
98.31 	(c) Distributions received in calendar year 2006 are allocated to a project of the 
98.32 	public utilities commissions of the cities of Hibbing and Virginia to convert their electrical 
98.33 	generating plants to the use of biomass products, such as wood.
99.1 	(d) Distributions received in calendar year 2007 must be paid to the city of Tower to 
99.2 	be used for the East Two Rivers project in or near the city of Tower.
99.3 	(e) For distributions received in 2008, the first $2,000,000 of the 2008 distribution 
99.4 	must be paid to St. Louis County for deposit in its county road and bridge fund to be 
99.5 	used for relocation of St. Louis County Road 715, commonly referred to as Pike River 
99.6 	Road. The remainder of the 2008 distribution and the full amount of the distributions
99.7 	must be paid to St. Louis County for a grant to the city of Virginia for connecting sewer 
99.8 	and water lines to the St. Louis County maintenance garage on Highway 135, further 
99.9 	extending the lines to interconnect with the city of Gilbert's sewer and water lines. All 
99.10 	distributions received in 2009 and subsequent years isare allocated for projects under 
99.11 	section 298.223, subdivision 1.

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

99.13 	Sec. 14. Minnesota Statutes 2006, section 298.2961, subdivision 5, is amended to read:
99.14 		Subd. 5.Public works and local economic development fund. For distributions in 
99.15 	2007 only, a special fund is established to receive 38.4 cents per ton that otherwise would 
99.16 	be allocated under section 298.28, subdivision 6. The following amounts are allocated to 
99.17 	St. Louis County acting as the fiscal agent for the recipients for the specific purposes:
99.18 	(1) 13.4 cents per ton for the Central Iron Range Sanitary Sewer District for 
99.19 	construction of a combined wastewater facility and notwithstanding section 298.28, 
99.20 	subdivision 11, paragraph (a), or any other law, interest accrued on this money while held 
99.21 	by St. Louis County shall also be distributed to the recipient;
99.22 	(2) six cents per ton to the city of Eveleth to redesign and design and construct 
99.23 	improvements to renovate its water treatment facility;
99.24 	(3) one cent per ton for the East Range Joint Powers Board to acquire land for and to 
99.25 	design a central wastewater collection and treatment system;
99.26 	(4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;
99.27 	(5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;
99.28 	(6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;
99.29 	(7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and 
99.30 	Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment 
99.31 	and Economic Development;
99.32 	(8) 0.4 cents per ton to the city of Keewatin for a new city well;
99.33 	(9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous 
99.34 	materials center;
100.1 	(10) 0.9 cents per ton to Aitkin County Growth for an economic development 
100.2 	project for peat harvesting;
100.3 	(11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;
100.4 	(12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive 
100.5 	plan;
100.6 	(13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;
100.7 	(14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake 
100.8 	Environmental Learning Center; 
100.9 	(15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;
100.10 	(16) 0.5 cents per ton to the Economic Development Authority of the city of Grand 
100.11 	Rapids for planning for the North Central Research and Technology Laboratory;
100.12 	(17) 0.6 cents per ton to the city of Bovey for sewer and water extension;
100.13 	(18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and
100.14 	(19) ten cents per ton to an economic development authority in a city through which 
100.15 	State Highway 1 passes, or a city in Independent School District No. 2142 that has an 
100.16 	active mine, the commissioner of Iron Range Resources and Rehabilitation for deposit 
100.17 	in a Highway 1 Corridor Account established by the commissioner, to be distributed by 
100.18 	the commissioner to any of the cities of Babbitt, Cook, Ely, or Tower,  for an economic 
100.19 	development project projects approved by the Iron Range Resources and Rehabilitation 
100.20 	Board; notwithstanding section 298.28, subdivision 11, paragraph (a), or any other law, 
100.21 	interest accrued on this money while held by St. Louis County or the commissioner 
100.22 	shall also be distributed to the recipient.

100.23 	EFFECTIVE DATE. This section is effective for distributions made in 2008 and 
100.24 	thereafter.

100.25 	Sec. 15. Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:
100.26 		Subdivision 1.Definitions. Except as may otherwise be provided, the following 
100.27 	words, when used in this section, shall have the meanings herein ascribed to them.
100.28 	(1)  (a) "Aggregate material" shall mean means:
100.29 	(1)  nonmetallic natural mineral aggregate including, but not limited to sand, silica 
100.30 	sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is 
100.31 	transported on a public road, street, or highway., provided that nonmetallic aggregate 
100.32 	material shall does not include dimension stone and dimension granite; and 
100.33 	(2) taconite tailings, crushed rock, and architectural or dimension stone and 
100.34 	dimension granite removed from a taconite mine or the site of a previously operated 
100.35 	taconite mine. 
101.1 	Aggregate material must be measured or weighed after it has been extracted from 
101.2 	the pit, quarry, or deposit.
101.3 	(2) (b)  "Person" shall mean means any individual, firm, partnership, corporation, 
101.4 	organization, trustee, association, or other entity.
101.5 	(3)  (c) "Operator" shall mean means any person engaged in the business of removing 
101.6 	aggregate material from the surface or subsurface of the soil, for the purpose of sale, 
101.7 	either directly or indirectly, through the use of the aggregate material in a marketable 
101.8 	product or service.
101.9 	(4) (d) "Extraction site" shall mean means a pit, quarry, or deposit containing 
101.10 	aggregate material and any contiguous property to the pit, quarry, or deposit which is used 
101.11 	by the operator for stockpiling the aggregate material.
101.12 	(5)  (e) "Importer" shall mean means any person who buys aggregate material 
101.13 	produced from a county not listed in paragraph (6)  (f) or another state and causes the 
101.14 	aggregate material to be imported into a county in this state which imposes a tax on 
101.15 	aggregate material.
101.16 	(6)  (f) "County" shall mean means the counties of Pope, Stearns, Benton, Sherburne, 
101.17 	Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman, 
101.18 	Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley, 
101.19 	Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose 
101.20 	board has voted after a public hearing to impose the tax under this section and has notified 
101.21 	the commissioner of revenue of the imposition of the tax.
101.22 	(7) (g) "Borrow" shall mean means granular borrow, consisting of durable particles 
101.23 	of gravel and sand, crushed quarry or mine rock, crushed gravel or stone, or any 
101.24 	combination thereof, the ratio of the portion passing the (#200) sieve divided by the 
101.25 	portion passing the (1 inch) sieve may not exceed 20 percent by mass.

101.26 	EFFECTIVE DATE. This section is effective for aggregate material removed 
101.27 	beginning June 1, 2008.

101.28 	Sec. 16. Minnesota Statutes 2006, section 298.75, subdivision 3, is amended to read:
101.29 		Subd. 3.Report and remittance. (a) By the 14th day following the last day of each 
101.30 	calendar quarter, every operator or importer shall make and file with the county auditor of 
101.31 	the county in which the aggregate material is removed or imported, a correct report under 
101.32 	oath, in such form and containing such information as the auditor shall require relative to 
101.33 	the quantity of aggregate material removed or imported during the preceding calendar 
101.34 	quarter. The report shall be accompanied by a remittance of the amount of tax due.
102.1 	(b) If any of the proceeds of the tax is to be apportioned as provided in subdivision 
102.2 	2, the operator or importer shall also include on the report any relevant information 
102.3 	concerning the amount of aggregate material transported, the tax and the county of 
102.4 	destination. The county auditor shall notify the county treasurer of the amount of such 
102.5 	tax and the county to which it is due. The county treasurer shall remit the tax to the 
102.6 	appropriate county within 30 days, except as provided in paragraph (c).
102.7 	(c) The proceeds of the tax on aggregate material as defined in subdivision 1, 
102.8 	paragraph (a), clause (2), must be remitted to the commissioner of iron range resources 
102.9 	and rehabilitation to be deposited in the taconite area environmental protection fund under 
102.10 	section 298.223, and used for the purposes of that fund.

102.11 	EFFECTIVE DATE. This section is effective for aggregate material removed 
102.12 	beginning June 1, 2008.

102.13 	Sec. 17. Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:
102.14 		Subd. 7.Proceeds of taxes. All money collected as taxes under this section on 
102.15 	aggregate material as defined in subdivision 1, paragraph (a), clause (1), shall be deposited 
102.16 	in the county treasury and credited as follows, for expenditure by the county board:
102.17 	(a) Sixty percent to the county road and bridge fund for expenditure for the 
102.18 	maintenance, construction and reconstruction of roads, highways and bridges;
102.19 	(b) Thirty percent to the road and bridge fund of those towns as determined by the 
102.20 	county board and to the general fund or other designated fund of those cities as determined 
102.21 	by the county board, to be expended for maintenance, construction and reconstruction of 
102.22 	roads, highways and bridges; and
102.23 	(c) Ten percent to a special reserve fund which is hereby established, for expenditure 
102.24 	for the restoration of abandoned pits, quarries, or deposits located upon public and tax 
102.25 	forfeited lands within the county.
102.26 	If there are no abandoned pits, quarries or deposits located upon public or tax 
102.27 	forfeited lands within the county, this portion of the tax shall be deposited in the county 
102.28 	road and bridge fund for expenditure for the maintenance, construction and reconstruction 
102.29 	of roads, highways and bridges.

102.30 	EFFECTIVE DATE. This section is effective for aggregate material removed 
102.31 	beginning June 1, 2008.

102.32 	Sec. 18. IRON RANGE RESOURCES AND REHABILITATION BOARD; 
102.33 	APPROPRIATION; RETIRE BONDS.
 103.1 	Commencing with taxes payable in 2008 there is annually appropriated from 
103.2 	the distribution of the taconite production tax revenues to the taconite environmental 
103.3 	protection fund under Minnesota Statutes, section 298.28, subdivision 11, and to the 
103.4 	Douglas J. Johnson economic protection trust fund under Minnesota Statutes, section 
103.5 	298.28, subdivisions 9 and 11, in equal shares, an amount of $500,000 per year.
103.6 	The revenue received under this section shall be used only to retire Mesabi East 
103.7 	School District No. 2711 bonds in the amount of $9,000,000 issued September 1, 2006, 
103.8 	and in the amount of $6,250,000 issued March 1, 2007. The payments shall continue 
103.9 	for a period of ten years ending with taxes payable in 2017. Payments to the school 
103.10 	district shall be made annually on March 1, except that the initial annual payment shall 
103.11 	be made by September 1, 2008.

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

103.13 	ARTICLE 9
103.14 	ECONOMIC DEVELOPMENT

103.15 	Section 1. Minnesota Statutes 2006, section 469.169, is amended by adding a 
103.16 	subdivision to read:
103.17 		Subd. 18.Additional border city allocations; 2008. (a) In addition to tax 
103.18 	reductions authorized in subdivisions 7 to 17, the commissioner shall allocate $375,000 
103.19 	for tax reductions to border city enterprise zones in cities located on the western border 
103.20 	of the state. The commissioner shall make allocations to zones in cities on the western 
103.21 	border on a per capita basis. Allocations made under this subdivision may be used for 
103.22 	tax reductions as provided in section 469.171, or for other offsets of taxes imposed on 
103.23 	or remitted by businesses located in the enterprise zone, but only if the municipality 
103.24 	determines that the granting of the tax reduction or offset is necessary in order to retain a 
103.25 	business within or attract a business to the zone. The city alternatively may elect to use 
103.26 	any portion of the allocation provided in this paragraph for tax reductions under section 
103.27 	469.1732 or 469.1734.
103.28 	(b) The commissioner shall allocate $375,000 for tax reductions under section 
103.29 	469.1732 or 469.1734 to cities with border city enterprise zones located on the western 
103.30 	border of the state. The commissioner shall allocate this amount among the cities on a per 
103.31 	capita basis. The city alternatively may elect to use any portion of the allocation provided 
103.32 	in this paragraph for tax reductions as provided in section 469.171.

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

104.1 	Sec. 2. Minnesota Statutes 2006, section 469.174, subdivision 10, is amended to read:
104.2 		Subd. 10.Redevelopment district. (a) "Redevelopment district" means a type of 
104.3 	tax increment financing district consisting of a project, or portions of a project, within 
104.4 	which the authority finds by resolution that one or more of the following conditions, 
104.5 	reasonably distributed throughout the district, exists:
104.6 	(1) parcels consisting of 70 percent of the area of the district are occupied by 
104.7 	buildings, streets, utilities, paved or gravel parking lots, or other similar structures 
104.8 	and more than 50 percent of the buildings, not including outbuildings, are structurally 
104.9 	substandard to a degree requiring substantial renovation or clearance;
104.10 	(2) the property consists of vacant, unused, underused, inappropriately used, 
104.11 	or infrequently used railyards, rail storage facilities, or excessive or vacated railroad 
104.12 	rights-of-way;
104.13 	(3) tank facilities, or property whose immediately previous use was for tank 
104.14 	facilities, as defined in section 115C.02, subdivision 15, if the tank facilities: 
104.15 	(i) have or had a capacity of more than 1,000,000 gallons;
104.16 	(ii) are located adjacent to rail facilities; and
104.17 	(iii) have been removed or are unused, underused, inappropriately used, or 
104.18 	infrequently used; or
104.19 	(4) a qualifying disaster area, as defined in subdivision 10b.
104.20 	(b) For purposes of this subdivision, "structurally substandard" shall mean 
104.21 	containing defects in structural elements or a combination of deficiencies in essential 
104.22 	utilities and facilities, light and ventilation, fire protection including adequate egress, 
104.23 	layout and condition of interior partitions, or similar factors, which defects or deficiencies 
104.24 	are of sufficient total significance to justify substantial renovation or clearance.
104.25 	(c) A building is not structurally substandard if it is in compliance with the building 
104.26 	code applicable to new buildings or could be modified to satisfy the building code at 
104.27 	a cost of less than 15 percent of the cost of constructing a new structure of the same 
104.28 	square footage and type on the site. The municipality may find that a building is not 
104.29 	disqualified as structurally substandard under the preceding sentence on the basis of 
104.30 	reasonably available evidence, such as the size, type, and age of the building, the average 
104.31 	cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. The 
104.32 	municipality may not make such a determination without an interior inspection of the 
104.33 	property, but need not have an independent, expert appraisal prepared of the cost of repair 
104.34 	and rehabilitation of the building. An interior inspection of the property is not required, 
104.35 	if the municipality finds that (1) the municipality or authority is unable to gain access to 
104.36 	the property after using its best efforts to obtain permission from the party that owns or 
105.1 	controls the property; and (2) the evidence otherwise supports a reasonable conclusion that 
105.2 	the building is structurally substandard. Items of evidence that support such a conclusion 
105.3 	include recent fire or police inspections, on-site property tax appraisals or housing 
105.4 	inspections, exterior evidence of deterioration, or other similar reliable evidence. Written 
105.5 	documentation of the findings and reasons why an interior inspection was not conducted 
105.6 	must be made and retained under section 469.175, subdivision 3, clause (1). Failure of a 
105.7 	building to be disqualified under the provisions of this paragraph is a necessary, but not a 
105.8 	sufficient, condition to determining that the building is substandard. 
105.9 	(d) A parcel is deemed to be occupied by a structurally substandard building 
105.10 	for purposes of the finding under paragraph (a) or by the improvements described in 
105.11 	paragraph (e) if all of the following conditions are met:
105.12 	(1) the parcel was occupied by a substandard building or met the requirements 
105.13 	of paragraph (e), as the case may be, within three years of the filing of the request for 
105.14 	certification of the parcel as part of the district with the county auditor;
105.15 	(2) the substandard building was or the improvements described in paragraph (e) 
105.16 	were demolished or removed by the authority or the demolition or removal was financed 
105.17 	by the authority or was done by a developer under a development agreement with the 
105.18 	authority;
105.19 	(3) the authority found by resolution before the demolition or removal that the 
105.20 	parcel was occupied by a structurally substandard building or met the requirements of 
105.21 	paragraph (e) and that after demolition and clearance the authority intended to include 
105.22 	the parcel within a district; and
105.23 	(4) upon filing the request for certification of the tax capacity of the parcel as part 
105.24 	of a district, the authority notifies the county auditor that the original tax capacity of the 
105.25 	parcel must be adjusted as provided by section 469.177, subdivision 1, paragraph (f). 
105.26 	(e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, 
105.27 	utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the 
105.28 	area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or 
105.29 	other similar structures.
105.30 	(f) For districts consisting of two or more noncontiguous areas, each area must 
105.31 	qualify as a redevelopment district under paragraph (a) to be included in the district, and 
105.32 	the entire area of the district must satisfy paragraph (a).

105.33 	EFFECTIVE DATE. This section is effective for requests for certification made 
105.34 	after June 30, 2008.

105.35 	Sec. 3. Minnesota Statutes 2006, section 469.174, subdivision 10a, is amended to read:
106.1 		Subd. 10a.Renewal and renovation district. (a) "Renewal and renovation district" 
106.2 	means a type of tax increment financing district consisting of a project, or portions of a 
106.3 	project, within which the authority finds by resolution that:
106.4 	(1)(i) parcels consisting of 70 percent of the area of the district are occupied by 
106.5 	buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii) 
106.6 	20 percent of the buildings are structurally substandard; and (iii) 30 percent of the other 
106.7 	buildings require substantial renovation or clearance to remove existing conditions such 
106.8 	as: inadequate street layout, incompatible uses or land use relationships, overcrowding of 
106.9 	buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for 
106.10 	improvement or conversion, or other identified hazards to the health, safety, and general 
106.11 	well-being of the community; and
106.12 	(2) the conditions described in clause (1) are reasonably distributed throughout the 
106.13 	geographic area of the district.
106.14 	(b) For purposes of determining whether a building is structurally substandard, 
106.15 	whether parcels are occupied by buildings, streets, utilities, paved or gravel parking lots, 
106.16 	or other similar structures, or whether noncontiguous areas qualify, the provisions of 
106.17 	subdivision 10, paragraphs (c), (e), and (b) through (f) apply.

106.18 	EFFECTIVE DATE. This section is effective for requests for certification made 
106.19 	after June 30, 2008.

106.20 	Sec. 4. Minnesota Statutes 2006, section 469.175, subdivision 1, is amended to read:
106.21 		Subdivision 1.Tax increment financing plan. (a) A tax increment financing plan 
106.22 	shall contain:
106.23 	(1) a statement of objectives of an authority for the improvement of a project;
106.24 	(2) a statement as to the development program for the project, including the property 
106.25 	within the project, if any, that the authority intends to acquire, identified by parcel number, 
106.26 	identifiable property name, block, or other appropriate means indicating the area in which 
106.27 	the authority intends to acquire properties;
106.28 	(3) a list of any development activities that the plan proposes to take place within 
106.29 	the project, for which contracts have been entered into at the time of the preparation of 
106.30 	the plan, including the names of the parties to the contract, the activity governed by the 
106.31 	contract, the cost stated in the contract, and the expected date of completion of that activity;
106.32 	(4) identification or description of the type of any other specific development 
106.33 	reasonably expected to take place within the project, and the date when the development is 
106.34 	likely to occur;
106.35 	(5) estimates of the following:
107.1 	(i) cost of the project, including administrative expenses, except that if part of the 
107.2 	cost of the project is paid or financed with increment from the tax increment financing 
107.3 	district, the tax increment financing plan for the district must contain an estimate of the 
107.4 	amount of the cost of the project, including administrative expenses, that will be paid or 
107.5 	financed with tax increments from the district;
107.6 	(ii) amount of bonded indebtedness to be incurred;
107.7 	(iii) sources of revenue to finance or otherwise pay public costs;
107.8 	(iv) the most recent net tax capacity of taxable real property within the tax increment 
107.9 	financing district and within any subdistrict;
107.10 	(v) the estimated captured net tax capacity of the tax increment financing district 
107.11 	at completion; and
107.12 	(vi) the duration of the tax increment financing district's and any subdistrict's 
107.13 	existence;
107.14 	(6) statements of the authority's alternate estimates of the impact of tax increment 
107.15 	financing on the net tax capacities of all taxing jurisdictions in which the tax increment 
107.16 	financing district is located in whole or in part. For purposes of one statement, the 
107.17 	authority shall assume that the estimated captured net tax capacity would be available to 
107.18 	the taxing jurisdictions without creation of the district, and for purposes of the second 
107.19 	statement, the authority shall assume that none of the estimated captured net tax capacity 
107.20 	would be available to the taxing jurisdictions without creation of the district or subdistrict;
107.21 	(7) identification and description of studies and analyses used to make the 
107.22 	determination set forth in subdivision 3, clause (2); and
107.23 	(8) identification of all parcels to be included in the district or any subdistrict.
107.24 	(b) The authority may specify in the tax increment financing plan the first year in 
107.25 	which it elects to receive increment, up to four years following the year of approval of the 
107.26 	district. This paragraph does not apply to an economic development district.

107.27 	EFFECTIVE DATE. This section is effective for districts for which the request for 
107.28 	certification is made after June 30, 2008.

107.29 	Sec. 5. Minnesota Statutes 2006, section 469.175, subdivision 3, is amended to read:
107.30 		Subd. 3.Municipality approval. (a) A county auditor shall not certify the original 
107.31 	net tax capacity of a tax increment financing district until the tax increment financing plan 
107.32 	proposed for that district has been approved by the municipality in which the district 
107.33 	is located. If an authority that proposes to establish a tax increment financing district 
107.34 	and the municipality are not the same, the authority shall apply to the municipality in 
107.35 	which the district is proposed to be located and shall obtain the approval of its tax 
108.1 	increment financing plan by the municipality before the authority may use tax increment 
108.2 	financing. The municipality shall approve the tax increment financing plan only after a 
108.3 	public hearing thereon after published notice in a newspaper of general circulation in the 
108.4 	municipality at least once not less than ten days nor more than 30 days prior to the date 
108.5 	of the hearing. The published notice must include a map of the area of the district from 
108.6 	which increments may be collected and, if the project area includes additional area, a map 
108.7 	of the project area in which the increments may be expended. The hearing may be held 
108.8 	before or after the approval or creation of the project or it may be held in conjunction with 
108.9 	a hearing to approve the project.
108.10 	(b) Before or at the time of approval of the tax increment financing plan, the 
108.11 	municipality shall make the following findings, and shall set forth in writing the reasons 
108.12 	and supporting facts for each determination:
108.13 	(1) that the proposed tax increment financing district is a redevelopment district, a 
108.14 	renewal or renovation district, a housing district, a soils condition district, or an economic 
108.15 	development district; if the proposed district is a redevelopment district or a renewal or 
108.16 	renovation district, the reasons and supporting facts for the determination that the district 
108.17 	meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2), or 
108.18 	subdivision 10a, must be documented in writing and retained and made available to the 
108.19 	public by the authority until the district has been terminated; 
108.20 	(2) that, in the opinion of the municipality:
108.21 	(i) the proposed development or redevelopment would not reasonably be expected to 
108.22 	occur solely through private investment within the reasonably foreseeable future; and
108.23 	(ii) the increased market value of the site that could reasonably be expected to 
108.24 	occur without the use of tax increment financing would be less than the increase in the 
108.25 	market value estimated to result from the proposed development after subtracting the 
108.26 	present value of the projected tax increments for the maximum duration of the district 
108.27 	permitted by the plan. The requirements of this item do not apply if the district is a 
108.28 	qualified housing district;
108.29 	(3) that the tax increment financing plan conforms to the general plan for the 
108.30 	development or redevelopment of the municipality as a whole;
108.31 	(4) that the tax increment financing plan will afford maximum opportunity, 
108.32 	consistent with the sound needs of the municipality as a whole, for the development or 
108.33 	redevelopment of the project by private enterprise;
108.34 	(5) that the municipality elects the method of tax increment computation set forth in 
108.35 	section 469.177, subdivision 3, paragraph (b), if applicable. 
109.1 	(c) When the municipality and the authority are not the same, the municipality shall 
109.2 	approve or disapprove the tax increment financing plan within 60 days of submission by 
109.3 	the authority. When the municipality and the authority are not the same, the municipality 
109.4 	may not amend or modify a tax increment financing plan except as proposed by the 
109.5 	authority pursuant to subdivision 4. Once approved, the determination of the authority 
109.6 	to undertake the project through the use of tax increment financing and the resolution of 
109.7 	the governing body shall be conclusive of the findings therein and of the public need for 
109.8 	the financing.
109.9 	(d) For a district that is subject to the requirements of paragraph (b), clause (2), 
109.10 	item (ii), the municipality's statement of reasons and supporting facts must include all of 
109.11 	the following:
109.12 	(1) an estimate of the amount by which the market value of the site will increase 
109.13 	without the use of tax increment financing;
109.14 	(2) an estimate of the increase in the market value that will result from the 
109.15 	development or redevelopment to be assisted with tax increment financing; and
109.16 	(3) the present value of the projected tax increments for the maximum duration of 
109.17 	the district permitted by the tax increment financing plan.
109.18 	(e) For purposes of this subdivision, "site" means the parcels on which the 
109.19 	development or redevelopment to be assisted with tax increment financing will be located.

109.20 	EFFECTIVE DATE. This section is effective the day following final enactment 
109.21 	and applies to all districts, regardless of when the request for certification was made.

109.22 	Sec. 6. Minnesota Statutes 2006, section 469.176, subdivision 1, is amended to read:
109.23 		Subdivision 1.Duration of tax increment financing districts. (a) Subject to the 
109.24 	limitations contained in subdivisions 1a to 1f, any tax increment financing district as to 
109.25 	which bonds are outstanding, payment for which the tax increment and other revenues 
109.26 	have been pledged, shall remain in existence at least as long as the bonds continue to be 
109.27 	outstanding. The municipality may, at the time of approval of the initial tax increment 
109.28 	financing plan, provide for one or both of the following:
109.29 	(1) a shorter maximum duration limit than specified in subdivisions 1a to 1f.;
109.30 	(2) an election as provided under section 469.175, subdivision 1, paragraph (b).
109.31 	The specified limit applies in place of the otherwise applicable limit, unless the authority 
109.32 	modifies the plan following the procedures under section 469.175, subdivision 4, 
109.33 	paragraph (b).
110.1 	(b) The tax increment pledged to the payment of the bonds and interest thereon may 
110.2 	be discharged and the tax increment financing district may be terminated if sufficient funds 
110.3 	have been irrevocably deposited in the debt service fund or other escrow account held in 
110.4 	trust for all outstanding bonds to provide for the payment of the bonds at maturity or date 
110.5 	of redemption and interest thereon to the maturity or redemption date.
110.6 	(c) For bonds issued pursuant to section 469.178, subdivisions 2 and 3, the full 
110.7 	faith and credit and any taxing powers of the municipality or authority are pledged to the 
110.8 	payment of the bonds until the principal of and interest on the bonds has been paid in full. 

110.9 	EFFECTIVE DATE. This section is effective for districts for which the request for 
110.10 	certification is made after June 30, 2008.

110.11 	Sec. 7. Minnesota Statutes 2006, section 469.176, subdivision 2, is amended to read:
110.12 		Subd. 2.Excess increments. (a) The authority shall annually determine the amount 
110.13 	of excess increments for a district, if any. This determination must be based on the tax 
110.14 	increment financing plan in effect on December 31 of the year and the increments and 
110.15 	other revenues received as of December 31 of the year. The authority must spend or return 
110.16 	the excess increments under paragraph (c) within nine months after the end of the year.
110.17 	(b) For purposes of this subdivision, "excess increments" equals the excess of:
110.18 	(1) total increments collected from the district since its certification, reduced by any 
110.19 	excess increments paid under paragraph (c), clause (4), for a prior year, over
110.20 	(2) the total costs authorized by the tax increment financing plan to be paid with 
110.21 	increments from the district, reduced, but not below zero, by the sum of:
110.22 	(i) the amounts of those authorized costs that have been paid from sources other than 
110.23 	tax increments from the district;
110.24 	(ii) revenues, other than tax increments from the district, that are dedicated for or 
110.25 	otherwise required to be used to pay those authorized costs and that the authority has 
110.26 	received and that are not included in item (i);
110.27 	(iii) the amount of principal and interest obligations due on outstanding bonds after 
110.28 	December 31 of the year and not prepaid under paragraph (c) in a prior year; and
110.29 	(iv) increased by the sum of the transfers of increments made under section 469.1763, 
110.30 	subdivision 6, to reduce deficits in other districts made by December 31 of the year.
110.31 	(c) The authority shall use excess increment only to do one or more of the following:
110.32 	(1) prepay any outstanding bonds;
110.33 	(2) discharge the pledge of tax increment for any outstanding bonds;
110.34 	(3) pay into an escrow account dedicated to the payment of any outstanding bonds; or
111.1 	(4) return the excess amount to the county auditor who shall distribute the excess 
111.2 	amount to the city or town, county, and school district in which the tax increment financing 
111.3 	district is located in direct proportion to their respective local tax rates.
111.4 	(d) For purposes of a district for which the request for certification was made prior to 
111.5 	August 1, 1979, excess increments equal the amount of increments on hand on December 
111.6 	31, less the principal and interest obligations due on outstanding bonds or advances, 
111.7 	qualifying under subdivision 1c, clauses (1), (2), (4), and (5), after December 31 of the 
111.8 	year and not prepaid under paragraph (c).
111.9 	(e) The county auditor must report to the commissioner of education the amount of 
111.10 	any excess tax increment distributed to a school district within 30 days of the distribution.
111.11 	(f) For purposes of this subdivision, "outstanding bonds" means bonds which are 
111.12 	secured by increments from the district.
111.13 	(g) The state auditor may exempt an authority from reporting the amounts calculated 
111.14 	under this subdivision for a calendar year, if the authority certifies to the auditor in 
111.15 	its report that the total amount authorized by the tax increment plan to be paid with 
111.16 	increments from the district exceeds the sum of the total increments collected for the 
111.17 	district for all years by 20 percent.

111.18 	EFFECTIVE DATE. This section is effective the day following final enactment and 
111.19 	applies to all districts regardless of when the request for certification was made, including 
111.20 	districts for which the request for certification was made on or before August 1, 1979.

111.21 	Sec. 8. Minnesota Statutes 2006, section 469.176, subdivision 4l, is amended to read:
111.22 		Subd. 4l.Prohibited facilities. (a) No tax increment from any district may be 
111.23 	used for:
111.24 	(1) a commons area used as a public park; or
111.25 	(2) a facility used for social, recreational, or conference purposes.
111.26 	(b) This subdivision does not apply to a privately owned facility for conference 
111.27 	purposes or a parking structure, whether it is public or privately owned or whether it is 
111.28 	ancillary to a use listed in paragraph (a).

111.29 	EFFECTIVE DATE. This section confirms the original intent of the legislature 
111.30 	in enacting Minnesota Statutes, section 469.176, subdivision 4l, and is effective the day 
111.31 	following final enactment and applies to any expenditure subject to Minnesota Statutes, 
111.32 	section 469.176, subdivision 4l.

111.33 	Sec. 9. Minnesota Statutes 2006, section 469.176, subdivision 7, is amended to read:
112.1 		Subd. 7.Parcels not includable in districts. (a) The authority may request 
112.2 	inclusion in a tax increment financing district and the county auditor may certify the 
112.3 	original tax capacity of a parcel or a part of a parcel that qualified under the provisions of 
112.4 	section 273.111 or 273.112 or chapter 473H for taxes payable in any of the five calendar 
112.5 	years before the filing of the request for certification only for: 
112.6 	(1) a district in which 85 percent or more of the planned buildings and facilities 
112.7 	(determined on the basis of square footage) are a qualified manufacturing facility or a 
112.8 	qualified distribution facility or a combination of both; or
112.9 	(2) a qualified housing district.
112.10 	(b)(1) A distribution facility means buildings and other improvements to real 
112.11 	property that are used to conduct activities in at least each of the following categories:
112.12 	(i) to store or warehouse tangible personal property;
112.13 	(ii) to take orders for shipment, mailing, or delivery;
112.14 	(iii) to prepare personal property for shipment, mailing, or delivery; and
112.15 	(iv) to ship, mail, or deliver property.
112.16 	(2) A manufacturing facility includes space used for manufacturing or producing 
112.17 	tangible personal property, including processing resulting in the change in condition of the 
112.18 	property, and space necessary for and related to the manufacturing activities.
112.19 	(3) To be a qualified facility, the owner or operator of a manufacturing or distribution 
112.20 	facility must agree to pay and pay 90 percent or more of the employees of the facility at 
112.21 	a rate equal to or greater than 160 percent of the federal minimum wage for individuals 
112.22 	over the age of 20.

112.23 	EFFECTIVE DATE. This section is effective the day following final enactment 
112.24 	and applies to all districts regardless of when the request for certification was made.

112.25 	Sec. 10. Minnesota Statutes 2006, section 469.1761, subdivision 1, is amended to read:
112.26 		Subdivision 1.Requirement imposed. (a) In order for a tax increment financing 
112.27 	district to qualify as a housing district:
112.28 	(1) the income limitations provided in this section must be satisfied; and
112.29 	(2) no more than 20 percent of the square footage of buildings that receive assistance 
112.30 	from tax increments may consist of commercial, retail, or other nonresidential uses.
112.31 	(b) The requirements imposed by this section apply to property receiving assistance 
112.32 	financed with tax increments, including interest reduction, land transfers at less than the 
112.33 	authority's cost of acquisition, utility service or connections, roads, parking facilities, or 
112.34 	other subsidies. The provisions of this section do not apply to districts located in a targeted 
112.35 	area as defined in section 462C.02, subdivision 9, clause (e).
113.1 	(c) For purposes of the requirements of paragraph (a), the authority may elect to treat 
113.2 	an addition to an existing structure as a separate building if:
113.3 	(1) construction of the addition begins more than three years after construction of 
113.4 	the existing structure was completed; and 
113.5 	(2) for an addition that does not meet the requirements of paragraph (a), clause (2), if 
113.6 	it is treated as a separate building, the addition was not contemplated by the tax increment 
113.7 	financing plan which includes the existing structure.

113.8 	EFFECTIVE DATE. This section is effective for expenditures of tax increment 
113.9 	authorized and made after the day following final enactment, regardless of when the 
113.10 	request for certification of the district was made.

113.11 	Sec. 11. Minnesota Statutes 2006, section 469.1763, subdivision 2, is amended to read:
113.12 		Subd. 2.Expenditures outside district. (a) For each tax increment financing 
113.13 	district, an amount equal to at least 75 percent of the total revenue derived from tax 
113.14 	increments paid by properties in the district must be expended on activities in the district 
113.15 	or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities 
113.16 	in the district or to pay, or secure payment of, debt service on credit enhanced bonds. 
113.17 	For districts, other than redevelopment districts for which the request for certification 
113.18 	was made after June 30, 1995, the in-district percentage for purposes of the preceding 
113.19 	sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax 
113.20 	increments paid by properties in the district may be expended, through a development fund 
113.21 	or otherwise, on activities outside of the district but within the defined geographic area of 
113.22 	the project except to pay, or secure payment of, debt service on credit enhanced bonds. 
113.23 	For districts, other than redevelopment districts for which the request for certification was 
113.24 	made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is 
113.25 	20 percent. The revenue derived from tax increments for the district that are expended on 
113.26 	costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before 
113.27 	calculating the percentages that must be expended within and without the district.
113.28 	(b) In the case of a housing district, a housing project, as defined in section 469.174, 
113.29 	subdivision 11, is an activity in the district.
113.30 	(c) All administrative expenses are for activities outside of the district, except that 
113.31 	if the only expenses for activities outside of the district under this subdivision are for 
113.32 	the purposes described in paragraph (d), administrative expenses will be considered as 
113.33 	expenditures for activities in the district.
113.34 	(d) The authority may elect, in the tax increment financing plan for the district, 
113.35 	to increase by up to ten percentage points the permitted amount of expenditures for 
114.1 	activities located outside the geographic area of the district under paragraph (a). As 
114.2 	permitted by section 469.176, subdivision 4k, the expenditures, including the permitted 
114.3 	expenditures under paragraph (a), need not be made within the geographic area of the 
114.4 	project. Expenditures that meet the requirements of this paragraph are legally permitted 
114.5 	expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. 
114.6 	To qualify for the increase under this paragraph, the expenditures must:
114.7 	(1) be used exclusively to assist housing that meets the requirement for a qualified 
114.8 	low-income building, as that term is used in section 42 of the Internal Revenue Code;
114.9 	(2) not exceed the qualified basis of the housing, as defined under section 42(c) of 
114.10 	the Internal Revenue Code, less the amount of any credit allowed under section 42 of 
114.11 	the Internal Revenue Code; and
114.12 	(3) be used to:
114.13 	(i) acquire and prepare the site of the housing;
114.14 	(ii) acquire, construct, or rehabilitate the housing; or
114.15 	(iii) make public improvements directly related to the housing.
114.16 	(e) For a district created within a biotechnology and health sciences industry zone 
114.17 	as defined in section 469.330, subdivision 6, or for an existing district located within 
114.18 	such a zone, tax increment derived from such a district may be expended outside of the 
114.19 	district but within the zone only for expenditures required for the construction of public 
114.20 	infrastructure necessary to support the activities of the zone, land acquisition, and other 
114.21 	redevelopment costs as defined in section 469.176, subdivision 4j. Public infrastructure
114.22 	These expenditures are considered as expenditures for activities within the district.

114.23 	EFFECTIVE DATE. This section is effective for all districts located in bioscience 
114.24 	zones, regardless of when the request for certification was made.

114.25 	Sec. 12. Minnesota Statutes 2006, section 469.177, subdivision 1, is amended to read:
114.26 		Subdivision 1.Original net tax capacity. (a) Upon or after adoption of a tax 
114.27 	increment financing plan, the auditor of any county in which the district is situated shall, 
114.28 	upon request of the authority, certify the original net tax capacity of the tax increment 
114.29 	financing district and that portion of the district overlying any subdistrict as described in 
114.30 	the tax increment financing plan and shall certify in each year thereafter the amount by 
114.31 	which the original net tax capacity has increased or decreased as a result of a change in tax 
114.32 	exempt status of property within the district and any subdistrict, reduction or enlargement 
114.33 	of the district or changes pursuant to subdivision 4. The auditor shall certify the amount 
114.34 	within 30 days after receipt of the request and sufficient information to identify the parcels 
115.1 	included in the district. The certification relates to the taxes payable year as provided in 
115.2 	subdivision 6.
115.3 	(b) If the classification under section 273.13 of property located in a district changes 
115.4 	to a classification that has a different assessment ratio, the original net tax capacity of that 
115.5 	property must be redetermined at the time when its use is changed as if the property had 
115.6 	originally been classified in the same class in which it is classified after its use is changed.
115.7 	(c) The amount to be added to the original net tax capacity of the district as a result 
115.8 	of previously tax exempt real property within the district becoming taxable equals the net 
115.9 	tax capacity of the real property as most recently assessed pursuant to section 273.18 or, if 
115.10 	that assessment was made more than one year prior to the date of title transfer rendering 
115.11 	the property taxable, the net tax capacity assessed by the assessor at the time of the 
115.12 	transfer. If improvements are made to tax exempt property after the municipality approves 
115.13 	the district and before the parcel becomes taxable, the assessor shall, at the request of 
115.14 	the authority, separately assess the estimated market value of the improvements. If the 
115.15 	property becomes taxable, the county auditor shall add to original net tax capacity, the net 
115.16 	tax capacity of the parcel, excluding the separately assessed improvements. If substantial 
115.17 	taxable improvements were made to a parcel after certification of the district and if the 
115.18 	property later becomes tax exempt, in whole or part, as a result of the authority acquiring 
115.19 	the property through foreclosure or exercise of remedies under a lease or other revenue 
115.20 	agreement or as a result of tax forfeiture, the amount to be added to the original net tax 
115.21 	capacity of the district as a result of the property again becoming taxable is the amount 
115.22 	of the parcel's value that was included in original net tax capacity when the parcel was 
115.23 	first certified. The amount to be added to the original net tax capacity of the district as a 
115.24 	result of enlargements equals the net tax capacity of the added real property as most 
115.25 	recently certified by the commissioner of revenue as of the date of modification of the tax 
115.26 	increment financing plan pursuant to section 469.175, subdivision 4.
115.27 	(d) If the net tax capacity of a property increases because the property no longer 
115.28 	qualifies under the Minnesota Agricultural Property Tax Law, section 273.111; the 
115.29 	Minnesota Open Space Property Tax Law, section 273.112; or the Metropolitan 
115.30 	Agricultural Preserves Act, chapter 473H, or because platted, unimproved property is 
115.31 	improved or market value is increased after approval of the plat under section 273.11, 
115.32 	subdivision 14, 14a, or 14b, the increase in net tax capacity must be added to the original 
115.33 	net tax capacity.
115.34 	(e) The amount to be subtracted from the original net tax capacity of the district 
115.35 	as a result of previously taxable real property within the district becoming tax exempt, 
115.36 	or a reduction in the geographic area of the district, shall be the amount of original net 
116.1 	tax capacity initially attributed to the property becoming tax exempt or being removed 
116.2 	from the district. If the net tax capacity of property located within the tax increment 
116.3 	financing district is reduced by reason of a court-ordered abatement, stipulation agreement, 
116.4 	voluntary abatement made by the assessor or auditor or by order of the commissioner of 
116.5 	revenue, the reduction shall be applied to the original net tax capacity of the district when 
116.6 	the property upon which the abatement is made has not been improved since the date of 
116.7 	certification of the district and to the captured net tax capacity of the district in each year 
116.8 	thereafter when the abatement relates to improvements made after the date of certification. 
116.9 	The county auditor may specify reasonable form and content of the request for certification 
116.10 	of the authority and any modification thereof pursuant to section 469.175, subdivision 4.
116.11 	(f) If a parcel of property contained a substandard building or improvements 
116.12 	described in section 469.174, subdivision 10, paragraph (e), that was were demolished 
116.13 	or removed and if the authority elects to treat the parcel as occupied by a substandard 
116.14 	building under section 469.174, subdivision 10, paragraph (b), or by improvements under 
116.15 	section 469.174, subdivision 10, paragraph (e), the auditor shall certify the original net 
116.16 	tax capacity of the parcel using the greater of (1) the current net tax capacity of the 
116.17 	parcel, or (2) the estimated market value of the parcel for the year in which the building 
116.18 	wasor other improvements were demolished or removed, but applying the class rates 
116.19 	for the current year.
116.20 	(g) For a redevelopment district qualifying under section 469.174, subdivision 10, 
116.21 	paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of 
116.22 	the land as the original tax capacity for any parcel in the district that contains a building 
116.23 	that suffered substantial damage as a result of the disaster or emergency.

116.24 	EFFECTIVE DATE. This section is effective for requests for certification made 
116.25 	after June 30, 2008.

116.26 	Sec. 13. Minnesota Statutes 2006, section 469.178, subdivision 7, is amended to read:
116.27 		Subd. 7.Interfund loans. The authority or municipality may advance or loan 
116.28 	money to finance expenditures under section 469.176, subdivision 4, from its general 
116.29 	fund or any other fund under which it has legal authority to do so. The loan or advance 
116.30 	must be authorized, by resolution of the governing body or of the authority, whichever 
116.31 	has jurisdiction over the fund from which the advance or loan is made, before money 
116.32 	is transferred, advanced, or spent, whichever is earliest. The resolution may generally 
116.33 	grant to the authority the power to make interfund loans under one or more tax increment 
116.34 	financing plans or for one or more districts. The terms and conditions for repayment of the 
116.35 	loan must be provided in writing and include, at a minimum, the principal amount, the 
117.1 	interest rate, and maximum term. The maximum rate of interest permitted to be charged 
117.2 	is limited to the greater of the rates specified under section 270C.40 or 549.09 as of the 
117.3 	date the loan or advance is made, unless the written agreement states that the maximum 
117.4 	interest rate will fluctuate as the interest rates specified under section 270C.40 or 549.09
117.5 	are from time to time adjusted.

117.6 	EFFECTIVE DATE. This section is effective the day following final enactment 
117.7 	and applies to all districts subject to Minnesota Statutes, section 469.178, subdivision 7, 
117.8 	regardless of when the request for certification was made.

117.9 	Sec. 14. Minnesota Statutes 2006, section 469.1791, subdivision 3, is amended to read:
117.10 		Subd. 3.Preconditions to establish district. (a) A city may establish a special 
117.11 	taxing district within a tax increment financing district under this section only if the 
117.12 	conditions under paragraphs (b) and (c) are met or if the city elects to exercise the 
117.13 	authority under paragraph (d).
117.14 	(b) The city has determined that:
117.15 	(1) total tax increments from the district, including unspent increments from 
117.16 	previous years and increments transferred under paragraph (c), will be insufficient to pay 
117.17 	the amounts due in a year on preexisting obligations; and
117.18 	(2) this insufficiency of increments resulted from the reduction in property tax class 
117.19 	rates enacted in the 1997 and 1998 legislative sessions.
117.20 	(c) The city has agreed to transfer any available increments from other tax increment 
117.21 	financing districts in the city to pay the preexisting obligations of the district under section 
117.22 	469.1763, subdivision 6. This requirement does not apply to any available increments of a 
117.23 	qualified housing district. 
117.24 	(d) If a tax increment financing district does not qualify under paragraphs (b) and 
117.25 	(c), the governing body may elect to establish a special taxing district under this section. 
117.26 	If the city elects to exercise this authority, increments from the tax increment financing 
117.27 	district and the proceeds of the tax imposed under this section may only be used to pay 
117.28 	preexisting obligations and reasonable administrative expenses of the authority for the tax 
117.29 	increment financing district. The tax increment financing district must be decertified when 
117.30 	all preexisting obligations have been paid.

117.31 	EFFECTIVE DATE. This section is effective the day following final enactment 
117.32 	and applies to districts regardless of when the request for certification was made.

118.1 	Sec. 15. Laws 1994, chapter 587, article 9, section 14, subdivision 1, is amended to 
118.2 	read:
118.3 		Subdivision 1.Establishment. The city of Brooklyn Center may establish an
118.4 	a redevelopment tax increment financing district in which 15 percent of the revenues 
118.5 	generated from tax increment in any year is deposited in the housing and environmental 
118.6 	remediation development account of the authority and expended according to the tax 
118.7 	increment financing plan.

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

118.9 	Sec. 16. Laws 1994, chapter 587, article 9, section 14, subdivision 2, is amended to 
118.10 	read:
118.11 		Subd. 2.Eligible activities. The authority must identify in the plan the housing 
118.12 	activities that will be assisted by the housing and environmental remediation development 
118.13 	account. Housing activities may include rehabilitation, acquisition, construction, 
118.14 	demolition, and financing of new or existing single family or multifamily housing. 
118.15 	Housing and environmental remediation activities listed in the plan need not be located 
118.16 	within the district or project area but must be activities that meet the income requirements 
118.17 	of a qualified housing district under Minnesota Statutes, section 273.1399 or469.1761, 
118.18 	subdivision 2.

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

118.20 	Sec. 17. Laws 1994, chapter 587, article 9, section 14, subdivision 3, is amended to 
118.21 	read:
118.22 		Subd. 3.Housing account. Tax increment to be expended for housing and 
118.23 	environmental remediation activities under this section must be segregated by the 
118.24 	authority into a special account on its official books and records. The account may also 
118.25 	receive funds from other public and private sources.

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

118.27 	Sec. 18. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by 
118.28 	Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10, 
118.29 	section 12, is amended to read:
118.30 		Subd. 4.Authority. For housing replacement projects in the city of Crystal, 
118.31 	"authority" means the Crystal economic development authority. For housing replacement 
118.32 	projects in the city of Fridley, "authority" means the housing and redevelopment authority 
119.1 	in and for the city of Fridley or a successor in interest. For housing replacement 
119.2 	projects in the city of Minneapolis, "authority" means the Minneapolis community 
119.3 	development agency or its successors and assigns. For housing replacement projects 
119.4 	in the city of St. Paul, "authority" means the St. Paul housing and redevelopment 
119.5 	authority. For housing replacement projects in the city of Duluth, "authority" means the 
119.6 	Duluth economic development authority. For housing replacement projects in the city of 
119.7 	Richfield, "authority" is the authority as defined in Minnesota Statutes, section 469.174, 
119.8 	subdivision 2, that is designated by the governing body of the city of Richfield. For 
119.9 	housing replacement projects in the city of Columbia Heights, "authority" is the authority 
119.10 	as defined in Minnesota Statutes, section 469.174, subdivision 2, that is designated by the 
119.11 	governing body of the city of Columbia Heights.

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

119.15 	Sec. 19. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by 
119.16 	Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10, 
119.17 	section 13, and Laws 2002, chapter 377, article 7, section 6, is amended to read:
119.18 		Subdivision 1.Creation of projects. (a) An authority may create a housing 
119.19 	replacement project under sections 44 to 47, as provided in this section.
119.20 	(b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, the authority 
119.21 	may designate up to 50 parcels in the city to be included in a housing replacement 
119.22 	district. No more than ten parcels may be included in year one of the district, with up 
119.23 	to ten additional parcels added to the district in each of the following nine years. For 
119.24 	the cities of Minneapolis, St. Paul, and Duluth, each authority may designate not more 
119.25 	than 200 parcels in the city to be included in a housing replacement district over the life 
119.26 	of the district. For the city of Minneapolis, the authority may designate not more than 
119.27 	400 parcels in the city to be included in housing replacement districts over the life of 
119.28 	the districts. The only parcels that may be included in a district are (1) vacant sites, (2) 
119.29 	parcels containing vacant houses, or (3) parcels containing houses that are structurally 
119.30 	substandard, as defined in Minnesota Statutes, section 469.174, subdivision 10.
119.31 	(c) The city in which the authority is located must pay at least 25 percent of the 
119.32 	housing replacement project costs from its general fund, a property tax levy, or other 
119.33 	unrestricted money, not including tax increments.
119.34 	(d) The housing replacement district plan must have as its sole object the acquisition 
119.35 	of parcels for the purpose of preparing the site to be sold for market rate housing. As 
120.1 	used in this section, "market rate housing" means housing that has a market value that 
120.2 	does not exceed 150 percent of the average market value of single-family housing in that 
120.3 	municipality.

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

120.7 	Sec. 20. Laws 2005, First Special Session chapter 3, article 10, section 23, as amended 
120.8 	by Laws 2006, chapter 259, article 13, section 16, is amended to read:
120.9 	Sec. 23. GRANTS TO QUALIFYING BUSINESSES. 
120.10 	$750,000 is appropriated in fiscal year 2006 from the general fund to the 
120.11 	commissioner of employment and economic development to be distributed to the 
120.12 	foreign trade zone authority to provide grants to qualified businesses as determined 
120.13 	by the authority, subject to Minnesota Statutes, sections 116J.993 to 116J.995, to 
120.14 	provide incentives for the businesses to locate their operations in an international 
120.15 	economic development zone. Of this appropriation, up to $250,000 may be used by the 
120.16 	commissioner for a study to determine the economic viability of business plans for 
120.17 	international economic development zones. If the money is not distributed during fiscal 
120.18 	year 2006, it remains available for distribution under this section until December 31, 2010.

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

120.20 	Sec. 21. BURNSVILLE; NORTHWEST QUADRANT TAX INCREMENT 
120.21 	FINANCING.
 120.22 		Subdivision 1.Definitions. (a) For the purposes of this section, the words and 
120.23 	phrases defined have the meanings given them in this subdivision.
120.24 	(b) "City" means the city of Burnsville.
120.25 	(c) "Project area" means the area in the city bounded on the south, southeast, and 
120.26 	southwest by the southerly right-of-way line of Minnesota Trunk Highway 13; on the east 
120.27 	by the easterly right-of-way line of Interstate Highway I-35W; on the north and northwest 
120.28 	by the Minnesota River; and on the west by the westerly corporate limits of the city, 
120.29 	together with a single parcel to the east of said Interstate Highway I-35W described as 
120.30 	the North 1370 feet of the West 1075 feet of the NW Quarter of Section 34 Township 27 
120.31 	Range 24 in the city of Burnsville, Dakota County, except the North 50 feet thereof; 
120.32 	provided that the project area includes the rights-of-way for all present and future highway 
120.33 	interchanges abutting the area described in this paragraph.
121.1 	(d) "Soil deficiency district" means a type of tax increment financing district 
121.2 	consisting of a portion of the project area in which the city finds by resolution that the 
121.3 	following conditions exist:
121.4 	(1) unusual terrain or soil deficiencies for 80 percent of the acreage in the district 
121.5 	require substantial filling, grading, or other physical preparation for use; and
121.6 	(2) the estimated cost of the physical preparation under clause (1), but excluding 
121.7 	costs directly related to roads as defined in Minnesota Statutes, section 160.01, and 
121.8 	local improvements as described in Minnesota Statutes, sections 429.021, subdivision 1, 
121.9 	clauses (1) to (7), (11), and (12), and 430.01, exceeds the fair market value of the land 
121.10 	before completion of the preparation.
121.11 		Subd. 2.Special rules. (a) If the city elects, upon the adoption of the tax increment 
121.12 	financing plan for a district, the rules under this section apply to a redevelopment district, 
121.13 	renewal and renovation district, soil condition district, or a soil deficiency district 
121.14 	established by the city or a development authority of the city in the project area.
121.15 	(b) Prior to or upon the adoption of the first tax increment plan subject to the special 
121.16 	rules under this subdivision, the city must find by resolution that parcels consisting of at 
121.17 	least 80 percent of the acreage of the project area (excluding street and railroad right of 
121.18 	way) are characterized by one or more of the following conditions:
121.19 	(1) peat or other soils with geotechnical deficiencies that impair development of 
121.20 	residential or commercial buildings or infrastructure;
121.21 	(2) soils or terrain that requires substantial filling in order to permit the development 
121.22 	of commercial or residential buildings or infrastructure;
121.23 	(3) landfills, dumps, or similar deposits of municipal or private waste;
121.24 	(4) quarries or similar resource extraction sites;
121.25 	(5) floodway; and
121.26 	(6) substandard buildings within the meaning of Minnesota Statutes, section 
121.27 	469.174, subdivision 10.
121.28 	(c) For the purposes of paragraph (b), clauses (1) through (5), a parcel is deemed to 
121.29 	be characterized by the relevant condition if at least 70 percent of the area of the parcel 
121.30 	contains the relevant condition. For the purposes of paragraph (b), clause (6), a parcel is 
121.31 	deemed to be characterized by substandard buildings if the buildings occupy at least 30 
121.32 	percent of the area of the parcel.
121.33 	(d) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 
121.34 	3, is extended to ten years for any district, and section 469.1763, subdivision 4, does 
121.35 	not apply to any district.
122.1 	(e) Notwithstanding anything to the contrary in section 469.1763, subdivision 2, 
122.2 	paragraph (a), not more than 80 percent of the total revenue derived from tax increments 
122.3 	paid by properties in any district (measured over the life of the district) may be expended 
122.4 	on activities outside the district but within the project area.
122.5 	(f) For a soil deficiency district:
122.6 	(1) increments may be collected through 20 years after the receipt by the authority of 
122.7 	the first increment from the district; and
122.8 	(2) except as otherwise provided in this subdivision, increments may be used only to:
122.9 	(i) acquire parcels on which the improvements described in item (ii) will occur;
122.10 	(ii) pay for the cost of correcting the unusual terrain or soil deficiencies and the 
122.11 	additional cost of installing public improvements directly caused by the deficiencies; and
122.12 	(iii) pay for the administrative expenses of the authority allocable to the district.
122.13 	(g) Increments spent for any infrastructure costs, whether inside a district or outside 
122.14 	a district but within the project area, are deemed to satisfy the requirements of paragraph 
122.15 	(f) and Minnesota Statutes, section 469.176, subdivisions 4b and 4j.
122.16 	(h) Increments from any district may not be used to pay the costs of landfill closure or 
122.17 	public infrastructure located on the following parcels within the plat known as Burnsville 
122.18 	Amphitheater:  Lot 1, Block 1; Lots 1 and 2, Block 2; and Outlots A, B, C and D.
122.19 	(i) The authority to approve tax increment financing plans to establish tax increment 
122.20 	financing districts under this section expires on December 31, 2018.

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

122.23 	Sec. 22. CITY OF EYOTA; TAX INCREMENT FINANCING DISTRICT.
 122.24 		Subdivision 1.Authorization. Notwithstanding the mileage limitation in Minnesota 
122.25 	Statutes, section 469.174, subdivision 27, the city of Eyota is deemed to be a small city for 
122.26 	the purposes of Minnesota Statutes, section 469.174 to 469.1799, as long as its population 
122.27 	does not exceed the population limit in that section.
122.28 		Subd. 2.Local approval. This section is effective for the city of Eyota upon 
122.29 	approval of Eyota's governing body and compliance with Minnesota Statutes, section 
122.30 	645.021, subdivisions 2 and 3.

122.31 	Sec. 23. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT; 
122.32 	SPECIAL RULES.
 122.33 	(a) If the city elects upon the adoption of a tax increment financing plan for a district, 
122.34 	the rules under this section apply to a redevelopment tax increment financing district 
123.1 	established by the city of Fridley or the housing and redevelopment authority of the city. 
123.2 	The redevelopment tax increment district includes the following parcels and adjacent 
123.3 	railroad property and shall be referred to as the Northstar Transit Station District: parcel 
123.4 	numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018, 
123.5 	223024120012, 223024120011, 223024120005, 223024120004, 223024120003, 
123.6 	223024120013, 223024120008, 223024120007, 223024120006, 223024130005, 
123.7 	223024130010, 223024130011, 223024130003, 153024440039, 153024440037, 
123.8 	153024440041, 153024440042, 223024110013, 223024110016, 223024110017, 
123.9 	223024140008, 223024130002, 223024420004, 223024410002, 223024410003, 
123.10 	223024110008, 223024110007, 223024110019, 223024110018, 223024110003, 
123.11 	223024140003, 223024140009, 223024140002, 223024140010, and 223024410007.
123.12 	(b) The requirements for qualifying a redevelopment tax increment district under 
123.13 	Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located 
123.14 	within the Northstar Transit Station District, which are deemed eligible for inclusion 
123.15 	in a redevelopment tax increment district.
123.16 	(c) In addition to the costs permitted by Minnesota Statutes, section 469.176, 
123.17 	subdivision 4j, eligible expenditures within the Northstar Transit Station District include 
123.18 	those costs necessary to provide for the construction and land acquisition for a tunnel 
123.19 	under the Burlington Northern Santa Fe railroad tracks.
123.20 	(d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763, 
123.21 	subdivision 2, the city of Fridley may expend increments generated from its tax increment 
123.22 	financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota 
123.23 	Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing 
123.24 	districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District.
123.25 	(e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, 
123.26 	does not apply to the Northstar Transit Station District or to tax increment financing 
123.27 	districts Nos. 11, 12, and 13.
123.28 	(f) The use of revenues for decertification under Minnesota Statutes, section 
123.29 	469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11, 
123.30 	12, and 13.

123.31 	EFFECTIVE DATE. This section is effective upon approval by the governing body 
123.32 	of the city of Fridley and upon compliance by the city with Minnesota Statutes, section 
123.33 	645.021, subdivision 3.

123.34 	Sec. 24. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING; 
123.35 	EXPENDITURES OUTSIDE DISTRICT.
 124.1 	Notwithstanding the provisions of Minnesota Statutes, section 469.1763, subdivision 
124.2 	2, the city of New Brighton may expend increments generated from its tax increment 
124.3 	financing district No. 26 to facilitate eligible activities as permitted by Minnesota Statutes, 
124.4 	section 469.176, subdivision 4e, outside the boundaries of tax increment financing district 
124.5 	No. 26, but only within the area described in Laws 1998, chapter 389, article 11, section 
124.6 	24, subdivision 1, and commonly referred to as the Northwest Quadrant. Minnesota 
124.7 	Statutes, section 469.1763, subdivisions 3 and 4, do not apply to expenditures permitted 
124.8 	by this section.

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

124.12 	Sec. 25.  REPEALER.
 124.13 	(a) Minnesota Statutes 2006, section 469.174, subdivision 29, is repealed.
124.14 	(b) Laws 1998, chapter 389, article 11, section 18, is repealed.

124.15 	EFFECTIVE DATE. Paragraph (a) is effective the day following final enactment. 
124.16 	For purposes of any special law authorizing or limiting the use of increments to projects 
124.17 	meeting the requirements of a qualified housing district, expenditures for housing districts 
124.18 	satisfying the requirements of Minnesota Statutes, sections 469.174, subdivision 11; 
124.19 	469.176, subdivision 4d; and 469.1761, as amended, also satisfy the requirements of 
124.20 	the special law.
124.21 	Paragraph (b) is effective upon compliance with Minnesota Statutes, section 
124.22 	645.021, subdivision 3, by the governing body of the city of Burnsville. The balance of 
124.23 	tax increments derived from tax increment financing district No. 2-1 as of the effective 
124.24 	date of this section must be returned to the county for distribution in accordance with 
124.25 	Minnesota Statutes, section 469.176, subdivision 2.

124.26 	ARTICLE 10
124.27 	PUBLIC FINANCE

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

125.3 	Sec. 2. Minnesota Statutes 2006, section 123B.61, is amended to read:
125.4 	123B.61 PURCHASE OF CERTAIN EQUIPMENT.
125.5 	The board of a district may issue general obligation certificates of indebtedness 
125.6 	or capital notes subject to the district debt limits to: (a) purchase vehicles, computers, 
125.7 	telephone systems, cable equipment, photocopy and office equipment, technological 
125.8 	equipment for instruction, and other capital equipment having an expected useful life at 
125.9 	least as long as the terms of the certificates or notes; (b) purchase computer hardware and 
125.10 	software, without regard to its expected useful life, whether bundled with machinery or 
125.11 	equipment or unbundled, together with application development services and training 
125.12 	related to the use of the computer; and (c) prepay special assessments. The certificates or 
125.13 	notes must be payable in not more than five ten years and must be issued on the terms 
125.14 	and in the manner determined by the board, except that certificates or notes issued to 
125.15 	prepay special assessments must be payable in not more than 20 years. The certificates 
125.16 	or notes may be issued by resolution and without the requirement for an election. The 
125.17 	certificates or notes are general obligation bonds for purposes of section 126C.55. A tax 
125.18 	levy must be made for the payment of the principal and interest on the certificates or 
125.19 	notes, in accordance with section 475.61, as in the case of bonds. The sum of the tax 
125.20 	levies under this section and section 123B.62 for each year must not exceed the lesser 
125.21 	of the amount of the district's total operating capital revenue or the sum of the district's 
125.22 	levy in the general and community service funds excluding the adjustments under this 
125.23 	section for the year preceding the year the initial debt service levies are certified. The 
125.24 	district's general fund levy for each year must be reduced by the sum of (1) the amount 
125.25 	of the tax levies for debt service certified for each year for payment of the principal and 
125.26 	interest on the certificates or notes issued under this section as required by section 475.61, 
125.27 	(2) the amount of the tax levies for debt service certified for each year for payment of the 
125.28 	principal and interest on bonds issued under section 123B.62, and (3) any excess amount 
125.29 	in the debt redemption fund used to retire bonds, certificates, or notes issued under this 
125.30 	section or section 123B.62 after April 1, 1997, other than amounts used to pay capitalized 
125.31 	interest. If the district's general fund levy is less than the amount of the reduction, the 
125.32 	balance shall be deducted first from the district's community service fund levy, and next 
125.33 	from the district's general fund or community service fund levies for the following year. A 
125.34 	district using an excess amount in the debt redemption fund to retire the certificates or 
125.35 	notes shall report the amount used for this purpose to the commissioner by July 15 of the 
126.1 	following fiscal year. A district having an outstanding capital loan under section 126C.69
126.2 	or an outstanding debt service loan under section 126C.68 must not use an excess amount 
126.3 	in the debt redemption fund to retire the certificates or notes. 

126.4 	Sec. 3. Minnesota Statutes 2006, section 275.61, subdivision 1, is amended to read:
126.5 		Subdivision 1.Market value. (a) For local governmental subdivisions other than 
126.6 	school districts, any levy, including the issuance of debt obligations payable in whole or in 
126.7 	part from property taxes, required to be approved and approved by the voters at a general 
126.8 	or special election for taxes payable in 1993 and thereafter, shall be levied against the 
126.9 	referendum market value of all taxable property within the governmental subdivision, as 
126.10 	defined in section 126C.01, subdivision 3. Any levy amount subject to the requirements of 
126.11 	this section shall be certified separately to the county auditor under section 275.07. 
126.12 	(b) The ballot shall state the maximum amount of the increased levy as a percentage 
126.13 	of market value and the amount that will be raised by the new referendum tax rate in the 
126.14 	first year it is to be levied.
126.15 	(c) This subdivision does not apply to tax levies for the payment of debt obligations 
126.16 	that are approved by the voters after June 30, 2008.

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

126.18 	Sec. 4. Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read:
126.19 		Subd. 2.Time of notice. Unless otherwise specified by a particular statute law, or 
126.20 	by order of a court, publication of a public notice shall be as follows:
126.21 	(a) the notice shall be published once;
126.22 	(b) if the notice is intended to inform the public about a future event, the last 
126.23 	publication shall occur not more than 14 30 days and not less than seven days before 
126.24 	the event;
126.25 	(c) if the notice is intended to inform the public about a past action or event, the last 
126.26 	publication shall occur not more than 45 days after occurrence of the action or event.

126.27 	Sec. 5. Minnesota Statutes 2006, section 365A.02, is amended to read:
126.28 	365A.02 DEFINITION DEFINITIONS.
126.29 		Subdivision 1.Subordinate service district. "Subordinate service district" means a 
126.30 	defined area within the town in which one or more governmental services or additions to 
126.31 	townwidespecial services are provided by the town specially for the area and financed 
127.1 	from revenues from the area. The boundaries of a single subordinate service district 
127.2 	may not embrace an entire town.
127.3 		Subd. 2.Special services. "Special services" means one or more governmental 
127.4 	services or additions to townwide services provided by the town specially for the area 
127.5 	and financed from revenues from the area.

127.6 	Sec. 6. Minnesota Statutes 2006, section 365A.04, is amended to read:
127.7 	365A.04 CREATION BY PETITION.
127.8 		Subdivision 1.Petition. A petition signed by at least 50 percent of the property 
127.9 	owners in the part of the town proposed for the subordinate service district may be 
127.10 	submitted to the town board requesting the establishment of a subordinate service district 
127.11 	to provide a service that the town is otherwise authorized by law to provide. The petition 
127.12 	must include the territorial boundaries of the proposed district and specify the kinds of 
127.13 	services to be provided within the district.
127.14 		Subd. 2.Public hearing. Upon receipt of the petition, and the verification of the 
127.15 	signatures by the town clerk, the town board shall, within 30 days following verification, 
127.16 	hold a public hearing on the question of whether or not the requested district shall be 
127.17 	established. The notice of public hearing must specify the special services to be provided 
127.18 	within the subordinate service district and must specify the territorial boundaries of the 
127.19 	requested district. The notice of public hearing must be published once in a newspaper of 
127.20 	general circulation in the town at least 14 days prior to the date of the public hearing.
127.21 		Subd. 3.Approval; disapproval. Within 30 days after the public hearing, the 
127.22 	town board by resolution shall approve or disapprove the establishment of the requested 
127.23 	district. An approving resolution must specify the special services to be provided within 
127.24 	the subordinate service district and must specify the territorial boundaries of the district. 
127.25 	A resolution approving the establishment of the district may contain amendments or 
127.26 	modifications of the district's boundaries or functions as set forth in the petition.

127.27 	Sec. 7. Minnesota Statutes 2006, section 365A.08, is amended to read:
127.28 	365A.08 FINANCING.
127.29 		Subdivision 1.Budget. (a) Upon adoption of the next annual budget following 
127.30 	the creation of a subordinate service district the town board shall include in the budget 
127.31 	appropriate provisions for the operation of the district including either a property tax 
127.32 	levied only on property of the users of the service within the boundaries of the district 
127.33 	or a levy of a service charge against the users of the service within the district, or a 
127.34 	combination of a property tax and a service charge on the users of the service.
128.1 	(b) A tax or service charge or a combination of them may be imposed to finance a 
128.2 	function or service in the district that the town ordinarily provides throughout the town 
128.3 	only to the extent that there is an increase in the level of the function or service provided 
128.4 	in the service district over that provided throughout the town. In that case, in addition 
128.5 	to the townwide tax levy, an amount necessary to pay for the increase in the level of the 
128.6 	function or service may be imposed in the district.
128.7 		Subd. 2.Bonds. At any time after the requirements of section 356A.06 have been 
128.8 	met and the subordinate service district created, the town board may issue obligations 
128.9 	in an amount it deems necessary to defray in whole or in part the expense incurred 
128.10 	and estimated to be incurred in making capital improvements necessary to operate the 
128.11 	subordinate service district and provide the special services in the district, including every 
128.12 	item of cost from inception to completion and all fees and expenses incurred in connection 
128.13 	with the capital improvements or the financing. The obligations are payable primarily 
128.14 	out of the proceeds of the taxes and service charges imposed under subdivision 1, net 
128.15 	revenues as described in section 444.075, and special assessments under chapter 429. The 
128.16 	town board may by resolution pledge the full faith credit and taxing power of the town 
128.17 	to ensure payment of the principal and interest on the obligations if the proceeds of the 
128.18 	taxes and service charges are insufficient to pay the principal and interest. Obligations 
128.19 	must be issued in accordance with chapter 475, except that an election is not required, and 
128.20 	the amount of the obligations is not included in determining the net indebtedness of the 
128.21 	town under the provisions of any law limiting indebtedness.
128.22 		Subd. 3.Covenants to secure obligations. In resolutions authorizing the issuance 
128.23 	of general or special obligations and pledging taxes and service charges imposed under 
128.24 	subdivision 1, net revenues, or special assessments to their payment, the town board 
128.25 	may make covenants for the protection of holders of the obligations and taxpayers of the 
128.26 	town as it deems necessary, including a covenant that the town will impose and collect 
128.27 	charges of the nature authorized by this chapter at the time and in the amounts required to 
128.28 	produce, together with any taxes or special assessments designated as a primary source 
128.29 	of payment of the obligations, funds adequate to pay all principal and interest when due 
128.30 	on the obligations, and to create and maintain reserves securing the payments as may be 
128.31 	provided in the resolutions.

128.32 	Sec. 8. Minnesota Statutes 2006, section 365A.095, is amended to read:
128.33 	365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.
128.34 		Subdivision 1.Petition. A petition signed by at least 75 percent of the property 
128.35 	owners in the territory of the subordinate service district requesting the removal of the 
129.1 	district may be presented to the town board. Within 30 days after the town board receives 
129.2 	the petition, the town clerk shall determine the validity of the signatures on the petition. If 
129.3 	the requisite number of signatures are certified as valid, the town board must hold a public 
129.4 	hearing on the petitioned matter. Within 30 days after the end of the hearing, the town 
129.5 	board must decide whether to discontinue the subordinate service district, continue as it is, 
129.6 	or take some other action with respect to it.
129.7 		Subd. 2.Bonds. If obligations have been issued for the benefit of the subordinate 
129.8 	service district, the rates, charges, and tax levies, if any, continue until the obligations and 
129.9 	any obligations issued to refund them have been paid in full.

129.10 	Sec. 9. Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read:
129.11 		Subd. 3.Capital notes. (a) A county board may, by resolution and without 
129.12 	referendum, issue capital notes subject to the county debt limit to purchase capital 
129.13 	equipment useful for county purposes that has an expected useful life at least equal to the 
129.14 	term of the notes. The notes shall be payable in not more than ten years and shall be 
129.15 	issued on terms and in a manner the board determines. A tax levy shall be made for 
129.16 	payment of the principal and interest on the notes, in accordance with section 475.61, 
129.17 	as in the case of bonds.
129.18 	(b) For purposes of this subdivision, "capital equipment" means:
129.19 	(1) public safety, ambulance, road construction or maintenance, and medical 
129.20 	equipment; and
129.21 	(2) computer hardware and software, whether bundled with machinery or equipment 
129.22 	or unbundled. The authority to issue capital notes for software expires on July 1, 2007.

129.23 	Sec. 10. Minnesota Statutes 2006, section 373.40, subdivision 4, is amended to read:
129.24 		Subd. 4.Limitations on amount. A county, other than Ramsey, may not issue 
129.25 	bonds under this section if the maximum amount of principal and interest to become due in 
129.26 	any year on all the outstanding bonds issued pursuant to this section (including the bonds 
129.27 	to be issued) will equal or exceed 0.05367 0.12 percent of taxable market value of property 
129.28 	in the county. Ramsey county may not issue bonds under this section if the maximum 
129.29 	amount of principal and interest to become due in any year on all the outstanding bonds 
129.30 	issued pursuant to this section (including the bonds to be issued) will equal or exceed 
129.31 	0.06455 percent of taxable market value of property in the county. Calculation of the 
129.32 	limit must be made using the taxable market value for the taxes payable year in which 
129.33 	the obligations are issued and sold. This section does not limit the authority to issue 
129.34 	bonds under any other special or general law.

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

130.2 	Sec. 11. Minnesota Statutes 2006, section 375B.09, is amended to read:
130.3 	375B.09 FINANCING.
130.4 		Subdivision 1.Budget. (a) Upon adoption of the next annual budget following the 
130.5 	creation of a subordinate service district the county board shall include in the budget 
130.6 	appropriate provisions for the operation of the district including, as appropriate, either a 
130.7 	property tax levied only on property within the boundaries of the district or a levy of a 
130.8 	service charge against the users of the service within the district, or any combination of a 
130.9 	property tax and a service charge.
130.10 	(b) A tax or service charge or a combination thereof shall not be imposed to finance a 
130.11 	function or service in the subordinate service district which the county generally provides 
130.12 	throughout the county unless an increase in the level of the service is to be supplied in the 
130.13 	subordinate service district in which case, in addition to the countywide tax levy, only an 
130.14 	amount necessary to pay for the increased level of service may be imposed.
130.15 		Subd. 2.Bonds. At any time after the requirements of section 375B.07 have been 
130.16 	met and the subordinate service district created, the county board may issue obligations 
130.17 	in an amount it deems necessary to defray in whole or in part the expense incurred 
130.18 	and estimated to be incurred in making capital improvements necessary to operate the 
130.19 	subordinate service district and provide the special services in the district, including every 
130.20 	item of cost from inception to completion and all fees and expenses incurred in connection 
130.21 	with the capital improvements or the financing. The obligations shall be payable primarily 
130.22 	out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net 
130.23 	revenues as described in section 444.075, and special assessments under chapter 429. The 
130.24 	county board may by resolution pledge the full faith credit and taxing power of the county 
130.25 	to ensure payment of the principal and interest on the obligations if the proceeds of the 
130.26 	taxes and service charges are insufficient to pay the principal and interest. Obligations 
130.27 	must be issued in accordance with chapter 475, except that an election is not required, and 
130.28 	the amount of the obligations is not included in determining the net indebtedness of the 
130.29 	county under the provisions of any law limiting indebtedness.
130.30 		Subd. 3.Covenants to secure obligations. In resolutions authorizing the issuance 
130.31 	of general or special obligations and pledging taxes and service charges imposed under 
130.32 	subdivision 1, net revenues, or special assessments to their payment, the county board 
130.33 	may make covenants for the protection of holders of the obligations and taxpayers of the 
130.34 	county as it deems necessary, including a covenant that the county will impose and collect 
130.35 	charges of the nature authorized by this chapter at the time and in the amounts required to 
131.1 	produce, together with any taxes or special assessments designated as a primary source 
131.2 	of payment of the obligations, funds adequate to pay all principal and interest when due 
131.3 	on the obligations and to create and maintain reserves securing the payments as may be 
131.4 	provided in the resolutions.
131.5 		Subd. 4.Continuance in the event of withdrawal. If obligations have been issued 
131.6 	for the benefit of the subordinate service district, and the district is withdrawn or removed 
131.7 	pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in 
131.8 	the withdrawn or removed district must continue until the obligations and any obligations 
131.9 	issued to refund them have been paid in full.

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

131.11 	Sec. 12. Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read:
131.12 		Subd. 2.Equipment acquisition; capital notes. The board may, by resolution and 
131.13 	without public referendum, issue capital notes within existing debt limits for the purpose 
131.14 	of purchasing ambulance and other medical equipment, road construction or maintenance 
131.15 	equipment, public safety equipment and other capital equipment having an expected 
131.16 	useful life at least equal to the term of the notes issued. The notes shall be payable in 
131.17 	not more than five ten years and shall be issued on terms and in a manner as the board 
131.18 	determines. The total principal amount of the notes issued for any fiscal year shall not 
131.19 	exceed one percent of the total annual budget for that year and shall be issued solely for 
131.20 	the purchases authorized in this subdivision. A tax levy shall be made for the payment 
131.21 	of the principal and interest on such notes as in the case of bonds. For purposes of this 
131.22 	subdivision, "equipment" includes computer hardware and software, whether bundled with 
131.23 	machinery or equipment or unbundled. For purposes of this subdivision, the term "medical 
131.24 	equipment" includes computer hardware and software and other intellectual property for 
131.25 	use in medical diagnosis, medical procedures, research, record keeping, billing, and other 
131.26 	hospital applications, together with application development services and training related 
131.27 	to the use of the computer hardware and software and other intellectual property, all 
131.28 	without regard to their useful life. For purposes of determining the amount of capital notes 
131.29 	which the county may issue in any year, the budget of the county and Hennepin Healthcare 
131.30 	System, Inc. shall be combined and the notes issuable under this subdivision shall be in 
131.31 	addition to obligations issuable under section 373.01, subdivision 3.

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

131.33 	Sec. 13. Minnesota Statutes 2006, section 383B.77, subdivision 1, is amended to read:
132.1 		Subdivision 1.Creation. The Hennepin County Housing and Redevelopment 
132.2 	Authority is created in the county of Hennepin. It shall have all of the powers and duties 
132.3 	of a housing and redevelopment authority under sections 469.001 to 469.047. For the 
132.4 	purposes of applying the municipal housing and redevelopment act to Hennepin County, 
132.5 	the county has all of the powers and duties of a city, the county board has all the powers 
132.6 	and duties of a governing body, the chair of the county board has all of the powers and 
132.7 	duties of a mayor, and, notwithstanding section 469.008, the area of operation includes the 
132.8 	area within the territorial boundaries of the county. 

132.9 	EFFECTIVE DATE. Because the population of Hennepin County is more than 
132.10 	1,000,000, under Minnesota Statutes, section 645.023, this section is effective without 
132.11 	local approval.

132.12 	Sec. 14. Minnesota Statutes 2006, section 383B.77, subdivision 2, is amended to read:
132.13 		Subd. 2.Limitation. This section does not limit or restrict any existing housing 
132.14 	and redevelopment authority or prevent a municipality from creating an authority. For 
132.15 	purposes of this subdivision, "housing and redevelopment authority" includes any 
132.16 	municipal department, agency, or authority of the city of Minneapolis which exercises the 
132.17 	powers of a housing and redevelopment authority pursuant to section 469.003 or other 
132.18 	law. The county authority shall notify a municipal authority by January 31 of each year 
132.19 	as to the activities the county authority plans to participate in within the municipality. 
132.20 	The municipal authority shall notify the county authority within 45 days of the date of 
132.21 	the notice from the county authority, if the municipal authority does not consent to the 
132.22 	activities of the county authority. The county authority shall not exercise its powers in a 
132.23 	municipality where a housing and redevelopment authority was created under Minnesota 
132.24 	Statutes 1969, chapter 462, before June 8, 1971, except as provided in this subdivision. If a 
132.25 	city housing and redevelopment authority requests the county housing and redevelopment 
132.26 	authority to exercise any power or perform any function of the municipal authority, the 
132.27 	county authority may do so. 

132.28 	EFFECTIVE DATE. Because the population of Hennepin County is more than 
132.29 	1,000,000, under Minnesota Statutes, section 645.023, this section is effective without 
132.30 	local approval.

132.31 	Sec. 15. Minnesota Statutes 2006, section 410.32, is amended to read:
132.32 	410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
133.1 	(a) Notwithstanding any contrary provision of other law or charter, a home rule 
133.2 	charter city may, by resolution and without public referendum, issue capital notes subject 
133.3 	to the city debt limit to purchase capital equipment.
133.4 	(b) For purposes of this section, "capital equipment" means:
133.5 	(1) public safety equipment, ambulance and other medical equipment, road 
133.6 	construction and maintenance equipment, and other capital equipment; and
133.7 	(2) computer hardware and software, whether bundled with machinery or equipment 
133.8 	or unbundled.
133.9 	(c) The equipment or software must have an expected useful life at least as long as the 
133.10 	term of the notes. The authority to issue capital notes for software expires on July 1, 2007.
133.11 	(d) The notes shall be payable in not more than ten years and be issued on terms and 
133.12 	in the manner the city determines. The total principal amount of the capital notes issued 
133.13 	in a fiscal year shall not exceed 0.03 percent of the market value of taxable property 
133.14 	in the city for that year.
133.15 	(e) A tax levy shall be made for the payment of the principal and interest on the 
133.16 	notes, in accordance with section 475.61, as in the case of bonds.
133.17 	(f) Notes issued under this section shall require an affirmative vote of two-thirds of 
133.18 	the governing body of the city.
133.19 	(g) Notwithstanding a contrary provision of other law or charter, a home rule charter 
133.20 	city may also issue capital notes subject to its debt limit in the manner and subject to the 
133.21 	limitations applicable to statutory cities pursuant to section 412.301.

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

133.23 	Sec. 16. Minnesota Statutes 2006, section 412.301, is amended to read:
133.24 	412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
133.25 	(a) The council may issue certificates of indebtedness or capital notes subject to the 
133.26 	city debt limits to purchase capital equipment.
133.27 	(b) For purposes of this section, "capital equipment" means:
133.28 	(1) public safety equipment, ambulance and other medical equipment, road 
133.29 	construction and maintenance equipment, and other capital equipment; and
133.30 	(2) computer hardware and software, whether bundled with machinery or equipment 
133.31 	or unbundled.
133.32 	(c) The equipment or software must have an expected useful life at least as long as 
133.33 	the terms of the certificates or notes. The authority to issue capital notes for software 
133.34 	expires on July 1, 2007.
134.1 	(d) Such certificates or notes shall be payable in not more than ten years and shall be 
134.2 	issued on such terms and in such manner as the council may determine.
134.3 	(e) If the amount of the certificates or notes to be issued to finance any such purchase 
134.4 	exceeds 0.25 percent of the market value of taxable property in the city, they shall not 
134.5 	be issued for at least ten days after publication in the official newspaper of a council 
134.6 	resolution determining to issue them; and if before the end of that time, a petition asking 
134.7 	for an election on the proposition signed by voters equal to ten percent of the number of 
134.8 	voters at the last regular municipal election is filed with the clerk, such certificates or notes 
134.9 	shall not be issued until the proposition of their issuance has been approved by a majority 
134.10 	of the votes cast on the question at a regular or special election.
134.11 	(f) A tax levy shall be made for the payment of the principal and interest on such 
134.12 	certificates or notes, in accordance with section 475.61, as in the case of bonds.

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

134.14 	Sec. 17. Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read:
134.15 		Subd. 3.City. "City" means a city organized and existing under the laws of 
134.16 	Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or 
134.17 	charter to engage in the local distribution and sale of gas, provided that any city so 
134.18 	engaged on January 1, 1979 is authorized to continue such distribution and sale, and every 
134.19 	city now or hereafter so authorized may exercise, either individually or as a member of a 
134.20 	municipal gas agency, all of the powers granted in sections 453A.01 to 453A.12. 
134.21 	City also includes a city organized and existing under the laws of another state or 
134.22 	a city charter adopted pursuant thereto which participates in a municipal gas agency 
134.23 	with Minnesota cities.

134.24 	Sec. 18. [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
134.25 		Subdivision 1.Authorization; establishment. A political subdivision or other 
134.26 	public entity that creates or has created an actuarial liability to pay postemployment 
134.27 	benefits to employees or officers after their termination of service may establish a trust to 
134.28 	pay those benefits. For purposes of this section, the term "postemployment benefits" means 
134.29 	benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting 
134.30 	Standards Board and the term "trust" means a trust, a trust account, or a custodial account 
134.31 	or contract authorized under section 401(f) of the Internal Revenue Code.
134.32 		Subd. 2.Purpose of trust. The trust established under this section may only be 
134.33 	used to pay postemployment benefits and may be either revocable or irrevocable.
135.1 		Subd. 3.Trust administrator. The trust administrator of a trust established under 
135.2 	this section shall be either:
135.3 	(1) the Public Employees Retirement Association; 
135.4 	(2) a bank or banking association incorporated under the laws of the United States or 
135.5 	of any state and authorized by the laws under which it is organized to exercise corporate 
135.6 	trust powers; or 
135.7 	(3) an insurance company or agency qualified to do business in Minnesota which has 
135.8 	at least five years' experience in investment products and services for group retirement 
135.9 	benefits and which has a specialized department dedicated to services for retirement 
135.10 	investment products. 
135.11 	A political subdivision or public entity may, in its discretion and in compliance 
135.12 	with any applicable trust document, change trust administrators and transfer trust assets 
135.13 	accordingly.
135.14 		Subd. 4.Account maintenance. (a) A political subdivision or other public entity 
135.15 	may establish a trust account to be held under the supervision of the trust administrator for 
135.16 	the purposes of this section. A trust administrator shall establish a separate account for 
135.17 	each participating political subdivision or public entity. The trust administrator may charge 
135.18 	participating political subdivisions and public entities fees for reasonable administrative 
135.19 	costs. The amount of any fees charged by the Public Employees Retirement Association is 
135.20 	appropriated to the association from the account. A trust administrator may establish other 
135.21 	reasonable terms and conditions for creation and maintenance of these accounts. 
135.22 	(b) The trust administrator must report to the political subdivision or other public 
135.23 	entity on the investment returns of invested trust assets and on all investment fees or costs 
135.24 	incurred by the trust. The annual rates of return, along with investment and administrative 
135.25 	fees and costs for the trust, must be disclosed in the political subdivision's or public entity's 
135.26 	annual financial audit in a manner prescribed by the state auditor. 
135.27 	(c) Effective for fiscal years beginning after December 31, 2009, the trust 
135.28 	administrator must report electronically to the state auditor the portfolio and performance 
135.29 	information specified in section 356.219, subdivision 3, in the manner prescribed by 
135.30 	the state auditor.
135.31 		Subd. 5.Investment. (a) The assets of a trust or trust account shall be invested and 
135.32 	held as stipulated in paragraphs (b) to (e).
135.33 	(b) The Public Employees Retirement Association must certify all money in the trust 
135.34 	accounts for which it is trust administrator to the State Board of Investment for investment 
135.35 	under section 11A.14, subject to the policies and procedures established by the State 
136.1 	Board of Investment. Investment earnings must be credited to the trust account of the 
136.2 	individual political subdivision or public entity.
136.3 	(c) A trust administrator, other than the Public Employees Retirement Association, 
136.4 	must ensure that all money in the trust accounts for which it is trust administrator is 
136.5 	invested by a registered investment adviser, a bank investment trust department, or an 
136.6 	insurance company or  agency retirement investment department. Investment earnings 
136.7 	must be credited to the trust account of the individual political subdivision or public entity.
136.8 	(d) For trust assets invested by the State Board of Investment, the investment 
136.9 	restrictions shall be the same as those generally applicable to the State Board of 
136.10 	Investment. For trust assets invested by a trust administrator other than the Public 
136.11 	Employees Retirement Association, the assets may only be invested in investments 
136.12 	authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified 
136.13 	in the applicable trust document.
136.14 	(e) A political subdivision or public entity may provide investment direction to a 
136.15 	trust administrator in compliance with any applicable trust document.
136.16 		Subd. 6.Limit on deposit. A political subdivision or public entity may not 
136.17 	deposit money in a trust or trust account created pursuant to this section if the total 
136.18 	amount invested by that political subdivision or public entity would exceed the political 
136.19 	subdivision's or public entity's actuarially determined liabilities for postemployment 
136.20 	benefits due to officers and employees, as determined under the applicable standards of the 
136.21 	Governmental Accounting Standards Board.
136.22 		Subd. 7.Withdrawal of funds and termination of account. (a) For a revocable 
136.23 	account, a political subdivision or public entity may withdraw some or all of its money 
136.24 	or terminate the trust account. Money and accrued investment earnings withdrawn 
136.25 	from a revocable account must be deposited in a fund separate and distinct from any 
136.26 	other funds of the political subdivision or public entity. This money, with accrued 
136.27 	investment earnings, must be used to pay legally enforceable postemployment benefits 
136.28 	to former officers and employees, unless (i) there has been a change in state or federal 
136.29 	law affecting that political subdivision's or public entity's liabilities for postemployment 
136.30 	benefits, or (ii) there has been a change in the demographic composition of that political 
136.31 	subdivision's or public entity's employees eligible for postemployment benefits, or (iii) 
136.32 	there has been a change in the provisions or terms of the postemployment benefits in that 
136.33 	political subdivision or public entity including, but not limited to, the portion of the costs 
136.34 	eligible employees must pay to receive the benefits, or (iv) other factors exist that have 
136.35 	a material effect on that political subdivision's or public entity's actuarially determined 
136.36 	liabilities for postemployment benefits, in which event any amount in excess of 100 
137.1 	percent of that political subdivision's or public entity's actuarially determined liabilities for 
137.2 	postemployment benefits, as determined under standards of the Government Accounting 
137.3 	Standards Board, may be withdrawn and used for any purpose.
137.4 	(b) For an irrevocable account, a political subdivision or public entity may withdraw 
137.5 	money only:
137.6 	(1) as needed to pay postemployment benefits owed to former officers and employees 
137.7 	of the political subdivision or public entity; or
137.8 	(2) when all postemployment benefit  liability owed to former officers or employees 
137.9 	of the political subdivision or public entity has been satisfied or otherwise defeased.
137.10 	(c) A political subdivision or public entity requesting withdrawal of money from 
137.11 	an account created under this section must do so at a time and in the manner required by 
137.12 	the executive director of the Public Employees Retirement Association or specified in an 
137.13 	applicable trust document. The political subdivision or public entity that created the trust 
137.14 	must ensure that withdrawals comply with the requirements of this section.
137.15 	(d) The legislature may not divert funds in these trusts or trust accounts for use 
137.16 	for another purpose.
137.17 		Subd. 8.Status of irrevocable trust. (a) All money in an irrevocable trust or trust 
137.18 	account created in this section is held in trust for the exclusive benefit of former officers 
137.19 	and employees of the participating political subdivision or public entity, and is not subject 
137.20 	to claims by creditors of the state, the participating political subdivision or public entity, 
137.21 	the current or former officers and employees of the political subdivision or public entity, 
137.22 	or the trust administrator.
137.23 	(b) An irrevocable trust fund or trust account created in this section shall be deemed 
137.24 	an arrangement equivalent to a trust for all legal purposes.

137.25 	EFFECTIVE DATE. This section is effective the day following final enactment, 
137.26 	and is applicable immediately to all political subdivisions or public entities subject to 
137.27 	Statement No. 45 of the Governmental Accounting Standards Board in 2007, to those 
137.28 	political subdivisions or public entities whose trusts or trust accounts are validated 
137.29 	by section 27, and to those political subdivisions or public entities that have begun 
137.30 	consideration in 2007 of measures to implement Statement No. 45. This section is 
137.31 	applicable on July 1, 2008, for all other political subdivisions or public entities.

137.32 	Sec. 19. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision 
137.33 	to read:
137.34 		Subd. 1m.Obligations. After March 1, 2008, in addition to other authority in this 
137.35 	section, the council may issue certificates of indebtedness, bonds, or other obligations 
138.1 	under this section in an amount not exceeding $33,600,000 for capital expenditures as 
138.2 	prescribed in the council's regional transit master plan and transit capital improvement 
138.3 	program and for related costs, including the costs of issuance and sale of the obligations.

138.4 	APPLICATION AND EFFECTIVE DATE. This section applies in the counties of 
138.5 	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the 
138.6 	day following final enactment.

138.7 	Sec. 20. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision 
138.8 	to read:
138.9 		Subd. 5.Anticipation of grants. In addition to other authority granted in this 
138.10 	section, the council may exercise the authority granted to an issuing political subdivision 
138.11 	by section 475.522.

138.12 	APPLICATION AND EFFECTIVE DATE. This section applies in the counties of 
138.13 	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the 
138.14 	day following final enactment.

138.15 	Sec. 21. Minnesota Statutes 2006, section 475.51, subdivision 4, is amended to read:
138.16 		Subd. 4.Net debt. "Net debt" means the amount remaining after deducting from its 
138.17 	gross debt the amount of current revenues which are applicable within the current fiscal 
138.18 	year to the payment of any debt and the aggregate of the principal of the following:
138.19 	(1) Obligations issued for improvements which are payable wholly or partly from the 
138.20 	proceeds of special assessments levied upon property specially benefited thereby, including 
138.21 	those which are general obligations of the municipality issuing them, if the municipality is 
138.22 	entitled to reimbursement in whole or in part from the proceeds of the special assessments.
138.23 	(2) Warrants or orders having no definite or fixed maturity.
138.24 	(3) Obligations payable wholly from the income from revenue producing 
138.25 	conveniences.
138.26 	(4) Obligations issued to create or maintain a permanent improvement revolving 
138.27 	fund.
138.28 	(5) Obligations issued for the acquisition, and betterment of public waterworks 
138.29 	systems, and public lighting, heating or power systems, and of any combination thereof or 
138.30 	for any other public convenience from which a revenue is or may be derived.
138.31 	(6) Debt service loans and capital loans made to a school district under the provisions 
138.32 	of sections 126C.68 and 126C.69.
139.1 	(7) Amount of all money and the face value of all securities held as a debt service 
139.2 	fund for the extinguishment of obligations other than those deductible under this 
139.3 	subdivision.
139.4 	(8) Obligations to repay loans made under section 216C.37.
139.5 	(9) Obligations to repay loans made from money received from litigation or 
139.6 	settlement of alleged violations of federal petroleum pricing regulations.
139.7 	(10) Obligations issued to pay pension fund or other postemployment benefit 
139.8 	liabilities under section 475.52, subdivision 6, or any charter authority.
139.9 	(11) Obligations issued to pay judgments against the municipality under section 
139.10 	475.52, subdivision 6, or any charter authority.
139.11 	(12) All other obligations which under the provisions of law authorizing their 
139.12 	issuance are not to be included in computing the net debt of the municipality.

139.13 	EFFECTIVE DATE. This section is effective for obligations issued after June 
139.14 	30, 2008.

139.15 	Sec. 22. Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read:
139.16 		Subd. 6.Certain purposes. Any municipality may issue bonds for paying 
139.17 	judgments against it; for refunding outstanding bonds; for funding floating indebtedness;
139.18 	for funding actuarial liabilities to pay postemployment benefits to employees or officers 
139.19 	after their termination of service; or for funding all or part of the municipality's current 
139.20 	and future unfunded liability for a pension or retirement fund or plan referred to in 
139.21 	section 356.20, subdivision 2, as those liabilities are most recently computed pursuant 
139.22 	to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or 
139.23 	relief association referred to in section 69.77 or chapter 422A must consent and must 
139.24 	be a party to any contract made under this section with respect to the fund held by it 
139.25 	for the benefit of and in trust for its members. For purposes of this section, the term 
139.26 	"postemployment benefits" means benefits giving rise to a liability under Statement No. 
139.27 	45 of the Governmental Accounting Standards Board.

139.28 	Sec. 23. [475.522] GRANT ANTICIPATION FINANCING OF 
139.29 	TRANSPORTATION OR TRANSIT PROJECTS.
139.30 		Subdivision 1.Definitions. For purposes of this section, the term "political 
139.31 	subdivision" means a county or a statutory or home rule charter city, and the term 
139.32 	"issuing political subdivision" means a political subdivision that issues obligations under 
139.33 	subdivision 2.
140.1 		Subd. 2.Authorization. An issuing political subdivision may enter into agreements 
140.2 	with any other political subdivision of the state, within or without its jurisdiction, and any 
140.3 	state agency, with respect to federal grants for transportation or transit projects to be 
140.4 	received directly or indirectly by or on behalf of the political subdivision or agency, 
140.5 	under an executed grant agreement with the relevant federal agency. The agreements 
140.6 	may provide that the political subdivision or agency will pledge to the issuing political 
140.7 	subdivision all or a specified portion of the federal grants received by or on behalf of the 
140.8 	political subdivision or agency for a specified period of years, or until all obligations issued 
140.9 	by the issuing political subdivision under subdivision 3 with respect to those federal grants 
140.10 	have been paid or legally defeased. If the issuing political subdivision issues obligations 
140.11 	under subdivision 3, the agreements must provide the method by which the proceeds of 
140.12 	the obligations will be used to pay or reimburse the costs of the transportation or transit 
140.13 	projects relating to the federal grants described in the executed federal grant agreement.
140.14 		Subd. 3.Issuance of obligations. In anticipation of any federal grants for 
140.15 	transportation or transit projects to be received directly or indirectly by any political 
140.16 	subdivision or agency as specified in subdivision 1, or by an issuing political subdivision 
140.17 	with respect to any transportation or transit projects within its jurisdiction, an issuing 
140.18 	political subdivision may issue its obligations payable from the collections of those 
140.19 	federal grants. The obligations may be issued in the principal amount the issuing political 
140.20 	subdivision determines provided that the estimated collections of the federal grants under 
140.21 	the relevant executed federal grant agreement in each year in which the obligations will 
140.22 	be outstanding must be at least equal to:
140.23 	(1) if the obligations are to be issued as revenue obligations, 150 percent of the 
140.24 	maximum annual debt service on the obligations; or
140.25 	(2) if the obligations are to be issued as general obligations, 110 percent of the 
140.26 	maximum annual debt service on the obligations.
140.27 	Except as otherwise provided in this section, the issuing political subdivision shall 
140.28 	provide for the issuance, sale, and security of the obligations as provided in chapter 475, 
140.29 	and has the same powers and duties as a municipality issuing bonds under that law, except 
140.30 	that no election is required and the net debt limitations in chapter 475 do not apply to the 
140.31 	obligations. The issuing political subdivision may determine to issue the obligations as 
140.32 	revenue obligations, payable solely from the collections of the federal grants anticipated, 
140.33 	or may pledge its full faith and credit to the payment of the obligations.
140.34 		Subd. 4.Use of proceeds. The proceeds of the obligations must be used:
140.35 	(1) to pay or reimburse the costs of the transportation or transit projects relating to 
140.36 	the federal grants being anticipated;
141.1 	(2) to pay the costs of issuance of the obligations, including credit enhancement; 
141.2 	(3) to pay interest on the obligations for a period not exceeding three years from 
141.3 	their date of issue; and
141.4 	(4) if the full faith and credit of the issuing political subdivision is not pledged to the 
141.5 	payment of the obligations, to fund a debt service reserve fund for the obligations.

141.6 	Sec. 24. Minnesota Statutes 2006, section 475.53, subdivision 1, is amended to read:
141.7 		Subdivision 1.Generally. Except as otherwise provided in sections 475.51 to 
141.8 	475.74, no municipality, except a school district or a city of the first class, shall incur or 
141.9 	be subject to a net debt in excess of two three percent of the market value of taxable 
141.10 	property in the municipality. 

141.11 	EFFECTIVE DATE. This section is effective for obligations issued after June 
141.12 	30, 2008.

141.13 	Sec. 25. Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read:
141.14 		Subdivision 1.Approval by electors; exceptions. Obligations authorized by law or 
141.15 	charter may be issued by any municipality upon obtaining the approval of a majority of 
141.16 	the electors voting on the question of issuing the obligations, but an election shall not be 
141.17 	required to authorize obligations issued:
141.18 	(1) to pay any unpaid judgment against the municipality;
141.19 	(2) for refunding obligations;
141.20 	(3) for an improvement or improvement program, which obligation is payable wholly 
141.21 	or partly from the proceeds of special assessments levied upon property specially benefited 
141.22 	by the improvement or by an improvement within the improvement program, or from tax 
141.23 	increments, as defined in section 469.174, subdivision 25, including obligations which are 
141.24 	the general obligations of the municipality, if the municipality is entitled to reimbursement 
141.25 	in whole or in part from the proceeds of such special assessments or tax increments and 
141.26 	not less than 20 percent of the cost of the improvement or the improvement program is to 
141.27 	be assessed against benefited property or is to be paid from the proceeds of federal grant 
141.28 	funds or a combination thereof, or is estimated to be received from tax increments;
141.29 	(4) payable wholly from the income of revenue producing conveniences;
141.30 	(5) under the provisions of a home rule charter which permits the issuance of 
141.31 	obligations of the municipality without election;
141.32 	(6) under the provisions of a law which permits the issuance of obligations of a 
141.33 	municipality without an election;
142.1 	(7) to fund pension or retirement fund or postemployment benefit liabilities pursuant 
142.2 	to section 475.52, subdivision 6; 
142.3 	(8) under a capital improvement plan under section 373.40; and 
142.4 	(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if 
142.5 	the proceeds of the bonds are not used for a purpose prohibited under section 469.176, 
142.6 	subdivision 4g, paragraph (b). 

142.7 	Sec. 26. Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read:
142.8 		Subd. 3b.Street reconstruction. (a) A municipality may, without regard to 
142.9 	the election requirement under subdivision 1, issue and sell obligations for street 
142.10 	reconstruction, if the following conditions are met:
142.11 	(1) the streets are reconstructed under a street reconstruction plan that describes the 
142.12 	streets to be reconstructed street reconstruction to be financed, the estimated costs, and 
142.13 	any planned reconstruction of other streets in the municipality over the next five years, 
142.14 	and the plan and issuance of the obligations has been approved by a vote of all of the 
142.15 	members of the governing body present at the meeting following a public hearing for 
142.16 	which notice has been published in the official newspaper at least ten days but not more 
142.17 	than 28 days prior to the hearing; and
142.18 	(2) if a petition requesting a vote on the issuance is signed by voters equal to 
142.19 	five percent of the votes cast in the last municipal general election and is filed with the 
142.20 	municipal clerk within 30 days of the public hearing, the municipality may issue the bonds 
142.21 	only after obtaining the approval of a majority of the voters voting on the question of 
142.22 	the issuance of the obligations.
142.23 	(b) Obligations issued under this subdivision are subject to the debt limit of the 
142.24 	municipality and are not excluded from net debt under section 475.51, subdivision 4.
142.25 	(c) For purposes of this subdivision, street reconstruction includes utility 
142.26 	replacement and relocation and other activities incidental to the street reconstruction, turn 
142.27 	lanes and other improvements having a substantial public safety function, realignments, 
142.28 	other modifications to intersect with state and county roads, and the local share of state 
142.29 	and county road projects.
142.30 	(d) Except in the case of turn lanes, safety improvements, realignments, intersection 
142.31 	modifications, and the local share of state and county road projects, street reconstruction 
142.32 	does not include the portion of project cost allocable to widening a street or adding curbs 
142.33 	and gutters where none previously existed.

142.34 	Sec. 27. VALIDATION.
 143.1 	Any trust or trust account or other custodial account or contract authorized under 
143.2 	section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay 
143.3 	postemployment benefits to employees or officers after termination of service, is hereby 
143.4 	validated, may continue in full force and effect, and shall have continuing authority 
143.5 	to accept new funds; however, this section does not validate or correct defects in any 
143.6 	previously created trust document. Any funds held by a validated trust or account 
143.7 	under this section may be invested as provided in Minnesota Statutes, section 471.6175, 
143.8 	subdivision 5. A validated trust or account shall have until January 1, 2009, to bring 
143.9 	its trust documents and procedures into compliance with Minnesota Statutes, section 
143.10 	471.6175.

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

143.12 	Sec. 28. TOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS.
 143.13 	Notwithstanding Minnesota Statutes, section 366.095, or any other law to the 
143.14 	contrary, the town board of the town of Crane Lake in St. Louis County may issue one 
143.15 	or more certificates of indebtedness in a total amount not to exceed $225,000, which 
143.16 	are not subject to the debt limits of the town. The proceeds of the certificates must be 
143.17 	used to acquire property and pay other costs related to a land exchange with the United 
143.18 	States Forest Service. The certificates shall be payable in not more than 30 years and be 
143.19 	issued on the terms and in the manner as the board may determine. Minnesota Statutes, 
143.20 	sections 475.54, subdivision 1, and 475.56, paragraph (c), do not apply to the certificates 
143.21 	issued under this section. A tax levy shall be made to pay the principal and interest on the 
143.22 	certificates as in the case of bonds.

143.23 	EFFECTIVE DATE. This section is effective the day after the governing body of 
143.24 	the town of Crane Lake and its chief clerical officer timely complete their compliance with 
143.25 	Minnesota Statutes, section 645.021, subdivisions 2 and 3. 

143.26 	Sec. 29. CITY OF WINSTED; BONDING AUTHORITY.
 143.27 	(a) The city of Winsted may issue general obligation bonds under Minnesota 
143.28 	Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of 
143.29 	a city hall, community center, and police station; park improvements, including trails 
143.30 	and an amphitheater; related public improvements; and substantial landscaping for the 
143.31 	improvements. 
143.32 	(b) The bonds may be issued as general obligations of the city without an election to 
143.33 	approve the bonds under Minnesota Statutes, section 475.58.
144.1 	(c) The bonds are not included in computing any debt limitation applicable to the 
144.2 	city, including, but not limited to, the net debt limits under Minnesota Statutes, section 
144.3 	475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
144.4 	and interest on the bonds is not subject to any levy limitation.
144.5 	(d) The aggregate principal amount of bonds used to pay costs of the acquisition and 
144.6 	betterment of the facility consisting of a city hall, community center, and police station; 
144.7 	park improvements, including trails and an amphitheater; related public improvements; 
144.8 	and substantial landscaping for the improvements may not exceed $4,900,000, plus an 
144.9 	amount equal to the costs related to issuance of the bonds and capitalized interest.

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

144.12 	ARTICLE 11
144.13 	DEPARTMENT INCOME AND FRANCHISE TAXES

144.14 	Section 1. Minnesota Statutes 2007 Supplement, section 270A.03, subdivision 5, 
144.15 	is amended to read:
144.16 		Subd. 5.Debt. (a) "Debt" means a legal obligation of a natural person to pay a fixed 
144.17 	and certain amount of money, which equals or exceeds $25 and which is due and payable 
144.18 	to a claimant agency. The term includes criminal fines imposed under section 609.10 or 
144.19 	609.125, fines imposed for petty misdemeanors as defined in section 609.02, subdivision 
144.20 	4a, and restitution. A debt may arise under a contractual or statutory obligation, a court 
144.21 	order, or other legal obligation, but need not have been reduced to judgment.
144.22 	A debt includes any legal obligation of a current recipient of assistance which is 
144.23 	based on overpayment of an assistance grant where that payment is based on a client 
144.24 	waiver or an administrative or judicial finding of an intentional program violation; 
144.25 	or where the debt is owed to a program wherein the debtor is not a client at the time 
144.26 	notification is provided to initiate recovery under this chapter and the debtor is not a 
144.27 	current recipient of food support, transitional child care, or transitional medical assistance.
144.28 	(b) A debt does not include any legal obligation to pay a claimant agency for medical 
144.29 	care, including hospitalization if the income of the debtor at the time when the medical 
144.30 	care was rendered does not exceed the following amount:
144.31 	(1) for an unmarried debtor, an income of $8,800 or less;
144.32 	(2) for a debtor with one dependent, an income of $11,270 or less;
144.33 	(3) for a debtor with two dependents, an income of $13,330 or less;
144.34 	(4) for a debtor with three dependents, an income of $15,120 or less;
145.1 	(5) for a debtor with four dependents, an income of $15,950 or less; and
145.2 	(6) for a debtor with five or more dependents, an income of $16,630 or less.
145.3 	The income amounts in this subdivision shall be adjusted for inflation for debts 
145.4 	incurred in calendar years 2001 and thereafter. The dollar amount of each income level 
145.5 	that applied to debts incurred in the prior year shall be increased in the same manner 
145.6 	as provided in section 1(f) of the Internal Revenue Code of 1986, as amended through 
145.7 	December 31, 2000, except that for the purposes of this subdivision the percentage 
145.8 	increase shall be determined from the year starting September 1, 1999, and ending August 
145.9 	31, 2000, as the base year for adjusting for inflation for debts incurred after December 
145.10 	31, 2000. (c) The commissioner shall adjust the income amounts in paragraph (b) by the 
145.11 	percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue 
145.12 	Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word 
145.13 	"1992." For 2001, the commissioner shall then determine the percent change from the 12 
145.14 	months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in 
145.15 	each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months 
145.16 	ending on August 31 of the year preceding the taxable year. The determination of the 
145.17 	commissioner pursuant to this subdivision shall not be considered a "rule" and shall not 
145.18 	be subject to the Administrative Procedure Act contained in chapter 14. The income 
145.19 	amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in 
145.20 	$5, the amount is rounded up to the nearest $10 amount.
145.21 	(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of 
145.22 	the dollar amount of the premium authorized under section 256L.15, subdivision 1a.

145.23 	EFFECTIVE DATE. This section is effective for debts incurred after December 
145.24 	31, 2007.

145.25 	Sec. 2. Minnesota Statutes 2006, section 289A.08, subdivision 11, is amended to read:
145.26 		Subd. 11.Information included in income tax return. (a) The return must state:
145.27 	(1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the 
145.28 	address of the taxpayer in the same name or names and same address as the taxpayer has 
145.29 	used in making the taxpayer's income tax return to the United States, and must state;
145.30 	(2) the date or dates of birth of the taxpayer or taxpayers;
145.31 	(3) the Social Security number of the taxpayer, or taxpayers, if a Social Security 
145.32 	number has been issued by the United States with respect to the taxpayers, and must 
145.33 	state; and
145.34 	(4) the amount of the taxable income of the taxpayer as it appears on the federal 
145.35 	return for the taxable year to which the Minnesota state return applies. 
146.1 	(b) The taxpayer must attach to the taxpayer's Minnesota state income tax return 
146.2 	a copy of the federal income tax return that the taxpayer has filed or is about to file for 
146.3 	the period, unless the taxpayer is eligible to telefile the federal return and does file the 
146.4 	Minnesota return by telefiling.

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

146.7 	Sec. 3. Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:
146.8 		Subd. 2.Withholding statement to employee or payee and to commissioner. (a) 
146.9 	A person required to deduct and withhold from an employee a tax under section 290.92, 
146.10 	subdivision 2a or 3, or 290.923, subdivision 2, or who would have been required to 
146.11 	deduct and withhold a tax under section 290.92, subdivision 2a or 3, or persons required 
146.12 	to withhold tax under section 290.923, subdivision 2, determined without regard to 
146.13 	section 290.92, subdivision 19, if the employee or payee had claimed no more than one 
146.14 	withholding exemption, or who paid wages or made payments not subject to withholding 
146.15 	under section 290.92, subdivision 2a or 3, or 290.923, subdivision 2, to an employee or 
146.16 	person receiving royalty payments in excess of $600, or who has entered into a voluntary 
146.17 	withholding agreement with a payee under section 290.92, subdivision 20, must give 
146.18 	every employee or person receiving royalty payments in respect to the remuneration paid 
146.19 	by the person to the employee or person receiving royalty payments during the calendar 
146.20 	year, on or before January 31 of the succeeding year, or, if employment is terminated 
146.21 	before the close of the calendar year, within 30 days after the date of receipt of a written 
146.22 	request from the employee if the 30-day period ends before January 31, a written statement 
146.23 	showing the following: 
146.24 	(1) name of the person;
146.25 	(2) the name of the employee or payee and the employee's or payee's Social Security 
146.26 	account number;
146.27 	(3) the total amount of wages as that term is defined in section 290.92, subdivision 
146.28 	1, paragraph (1); the total amount of remuneration subject to withholding under section 
146.29 	290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the 
146.30 	Internal Revenue Code; and the amount of royalties subject to withholding under section 
146.31 	290.923, subdivision 2; and 
146.32 	(4) the total amount deducted and withheld as tax under section 290.92, subdivision 
146.33 	2a or 3, or 290.923, subdivision 2. 
147.1 	(b) The statement required to be furnished by this paragraph (a) with respect to any 
147.2 	remuneration must be furnished at those times, must contain the information required, and 
147.3 	must be in the form the commissioner prescribes.
147.4 	(c) The commissioner may prescribe rules providing for reasonable extensions of 
147.5 	time, not in excess of 30 days, to employers or payers required to give the statements to 
147.6 	their employees or payees under this subdivision.
147.7 	(d) A duplicate of any statement made under this subdivision and in accordance 
147.8 	with rules prescribed by the commissioner, along with a reconciliation in the form the 
147.9 	commissioner prescribes of the statements for the calendar year, including a reconciliation 
147.10 	of the quarterly returns required to be filed under subdivision 1, must be filed with the 
147.11 	commissioner on or before February 28 of the year after the payments were made.
147.12 	(e) If an employer cancels the employer's Minnesota withholding account number 
147.13 	required by section 290.92, subdivision 24, the information required by paragraph (d), 
147.14 	must be filed with the commissioner within 30 days of the end of the quarter in which 
147.15 	the employer cancels its account number. 
147.16 	(f) The employer must submit the statements required to be sent to the commissioner 
147.17 	on magnetic media, if the magnetic media wasin the same manner required to satisfy the 
147.18 	federal reporting requirements of section 6011(e) of the Internal Revenue Code and the 
147.19 	regulations issued under it. For wages paid in calendar year 2008, an employer must 
147.20 	submit statements to the commissioner required by this section by electronic means if the 
147.21 	employer is required to send more than 100 statements to the commissioner, even though 
147.22 	the employer is not required to submit the returns federally by electronic means. For 
147.23 	calendar year 2009, the 100 statements threshold is reduced to 50, and for calendar year 
147.24 	2010, the threshold is reduced to 25, and for 2011 and after, the threshold is reduced to ten.
147.25 	(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph 
147.26 	(a), clause (2), must submit the returns required by this subdivision and subdivision 1, 
147.27 	paragraph (a), with the commissioner by electronic means. 

147.28 	EFFECTIVE DATE. This section is effective for wages paid after December 31, 
147.29 	2007.

147.30 	Sec. 4. Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read:
147.31 		Subd. 14.Regulated investment companies; reporting exempt-interest 
147.32 	dividends. (a) A regulated investment company paying $10 or more in exempt-interest 
147.33 	dividends to an individual who is a resident of Minnesota must make a return indicating 
147.34 	the amount of the exempt-interest dividends, the name, address, and Social Security 
147.35 	number of the recipient, and any other information that the commissioner specifies. The 
148.1 	return must be provided to the shareholder no later than 30 days after the close of the 
148.2 	taxable year. The return provided to the shareholder must include a clear statement, in the 
148.3 	form prescribed by the commissioner, that the exempt-interest dividends must be included 
148.4 	in the computation of Minnesota taxable income. The commissioner may by notice and 
148.5 	demand require the regulated investment company is required in a manner prescribed by 
148.6 	the commissioner to file a copy of the return with the commissioner.
148.7 	(b) This subdivision applies to regulated investment companies required to register 
148.8 	under chapter 80A.
148.9 	(c) For purposes of this subdivision, the following definitions apply.
148.10 	(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in 
148.11 	section 852(b)(5) of the Internal Revenue Code, but does not include the portion of 
148.12 	exempt-interest dividends that are not required to be added to federal taxable income 
148.13 	under section 290.01, subdivision 19a, clause (1)(ii). 
148.14 	(2) "Regulated investment company" means regulated investment company as 
148.15 	defined in section 851(a) of the Internal Revenue Code or a fund of the regulated 
148.16 	investment company as defined in section 851(g) of the Internal Revenue Code.

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

148.19 	Sec. 5. Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read:
148.20 		Subdivision 1.Individual income, fiduciary income, corporate franchise, and 
148.21 	entertainment taxes; partnership and S corporation returns; information returns; 
148.22 	mining company returns. The returns required to be made under sections 289A.08 and 
148.23 	289A.12 must be filed at the following times:
148.24 	(1) returns made on the basis of the calendar year must be filed on April 15 following 
148.25 	the close of the calendar year, except that returns of corporations must be filed on March 
148.26 	15 following the close of the calendar year;
148.27 	(2) returns made on the basis of the fiscal year must be filed on the 15th day of the 
148.28 	fourth month following the close of the fiscal year, except that returns of corporations 
148.29 	must be filed on the 15th day of the third month following the close of the fiscal year;
148.30 	(3) returns for a fractional part of a year must be filed on the 15th day of the fourth 
148.31 	month following the end of the month in which falls the last day of the period for which 
148.32 	the return is made, except that the returns of corporations must be filed on the 15th day of 
148.33 	the third month following the end of the tax year of the unitary group in which falls the 
148.34 	last day of the period for which the return is made;
149.1 	(4) in the case of a final return of a decedent for a fractional part of a year, the return 
149.2 	must be filed on the 15th day of the fourth month following the close of the 12-month 
149.3 	period that began with the first day of that fractional part of a year;
149.4 	(5) in the case of the return of a cooperative association, returns must be filed on or 
149.5 	before the 15th day of the ninth month following the close of the taxable year;
149.6 	(6) if a corporation has been divested from a unitary group and files a return for 
149.7 	a fractional part of a year in which it was a member of a unitary business that files a 
149.8 	combined report under section 290.34, subdivision 2, the divested corporation's return 
149.9 	must be filed on the 15th day of the third month following the close of the common 
149.10 	accounting period that includes the fractional year;
149.11 	(7) returns of entertainment entities must be filed on April 15 following the close of 
149.12 	the calendar year;
149.13 	(8) returns required to be filed under section 289A.08, subdivision 4, must be filed 
149.14 	on the 15th day of the fifth month following the close of the taxable year;
149.15 	(9) returns of mining companies must be filed on May 1 following the close of the 
149.16 	calendar year; and
149.17 	(10) returns required to be filed with the commissioner under section 289A.12, 
149.18 	subdivision 2,or 4 to 10, or 14, must be filed within 30 days after being demanded by 
149.19 	the commissioner.

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

149.22 	Sec. 6. Minnesota Statutes 2006, section 289A.38, subdivision 7, is amended to read:
149.23 		Subd. 7.Federal tax changes. If the amount of income, items of tax preference, 
149.24 	deductions, or credits for any year of a taxpayer as reported to the Internal Revenue 
149.25 	Service is changed or corrected by the commissioner of Internal Revenue or other officer 
149.26 	of the United States or other competent authority, or where a renegotiation of a contract or 
149.27 	subcontract with the United States results in a change in income, items of tax preference, 
149.28 	deductions, credits, or withholding tax, or, in the case of estate tax, where there are 
149.29 	adjustments to the taxable estate resulting in a change to the credit for state death taxes, 
149.30 	the taxpayer shall report the change or correction or renegotiation results in writing to the 
149.31 	commissioner. The report must be submitted within 180 days after the final determination 
149.32 	and must be in the form of either an amended Minnesota estate, withholding tax, corporate 
149.33 	franchise tax, or income tax return conceding the accuracy of the federal determination 
149.34 	or a letter detailing how the federal determination is incorrect or does not change the 
149.35 	Minnesota tax. An amended Minnesota income tax return must be accompanied by an 
150.1 	amended property tax refund return, if necessary. A taxpayer filing an amended federal 
150.2 	tax return must also file a copy of the amended return with the commissioner of revenue 
150.3 	within 180 days after filing the amended return.

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

150.5 	Sec. 7. Minnesota Statutes 2006, section 289A.60, subdivision 8, is amended to read:
150.6 		Subd. 8.Penalty forPenalties; failure to file informational return; incorrect 
150.7 	taxpayer identification number. (a) In the case of a failure to file an informational return 
150.8 	required by section 289A.12 with the commissioner on the date prescribed (determined 
150.9 	with regard to any extension of time for filing), the person failing to file the return shall pay 
150.10 	a penalty of $50 for each failure or in the case of a partnership, S corporation, or fiduciary 
150.11 	return, $50 for each partner, shareholder, or beneficiary; but the total amount imposed on 
150.12 	the delinquent person for all failures during any calendar year must not exceed $25,000. If 
150.13 	a failure to file a return is due to intentional disregard of the filing requirement, then the 
150.14 	penalty imposed under the preceding sentence must not be less than an amount equal to: 
150.15 	(1) in the case of a return not described in clause (2) or (3), ten percent of the 
150.16 	aggregate amount of the items required to be reported;
150.17 	(2) in the case of a return required to be filed under section 289A.12, subdivision 5, 
150.18 	five percent of the gross proceeds required to be reported; and 
150.19 	(3) in the case of a return required to be filed under section 289A.12, subdivision 9, 
150.20 	relating to direct sales, $100 for each failure; however, the total amount imposed on the 
150.21 	delinquent person for intentional failures during a calendar year must not exceed $50,000. 
150.22 	The penalty must be collected in the same manner as a delinquent income tax. 
150.23 	(b) If a partnership or S corporation files a partnership or S corporation return with 
150.24 	an incorrect tax identification number used for a partner or shareholder after being notified 
150.25 	by the commissioner that the identification number is incorrect, the partnership or S 
150.26 	corporation must pay a penalty of $50 for each such incorrect number.

150.27 	EFFECTIVE DATE. This section is effective for returns filed after December 
150.28 	31, 2008.

150.29 	Sec. 8. Minnesota Statutes 2006, section 289A.60, subdivision 12, is amended to read:
150.30 		Subd. 12.Penalties relating to property tax refunds. (a) If it is determined that a 
150.31 	property tax refund claim is excessive and was negligently prepared, a claimant is liable 
150.32 	for a penalty of ten percent of the corrected claim must be disallowed claim. If the claim 
150.33 	has been paid, the amount disallowed must be recovered by assessment and collection.
151.1 	(b) An owner who without reasonable cause fails to give a certificate of rent 
151.2 	constituting property tax to a renter, as required by section 290A.19, paragraph (a), is 
151.3 	liable to the commissioner for a penalty of $100 for each failure.
151.4 	(c) If the owner or managing agent knowingly gives rent certificates that report total 
151.5 	rent constituting property taxes in excess of the amount of actual rent constituting property 
151.6 	taxes paid on the rented part of a property, the owner or managing agent is liable for a 
151.7 	penalty equal to the greater of (1) $100 or (2) 50 percent of the excess that is reported. An 
151.8 	overstatement of rent constituting property taxes is presumed to be knowingly made if it 
151.9 	exceeds by ten percent or more the actual rent constituting property taxes.

151.10 	EFFECTIVE DATE. This section is effective for property tax refund claims filed 
151.11 	after June 30, 2008.

151.12 	Sec. 9. Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read:
151.13 		Subd. 27.Reportable transaction understatement. (a) If a taxpayer has a 
151.14 	reportable transaction understatement for any taxable year, an amount equal to 20 percent 
151.15 	of the amount of the reportable transaction understatement must be added to the tax.
151.16 	(b)(1) For purposes of this subdivision, "reportable transaction understatement" 
151.17 	means the product of:
151.18 	(i) the amount of the increase, if any, in taxable income that results from a difference 
151.19 	between the proper tax treatment of an item to which this section applies and the taxpayer's 
151.20 	treatment of that item as shown on the taxpayer's tax return; and
151.21 	(ii) the highest rate of tax imposed on the taxpayer under section 290.06 determined 
151.22 	without regard to the understatement.
151.23 	(2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed 
151.24 	for the taxable year over gross income for that year, and any reduction in the amount of 
151.25 	capital losses which would, without regard to section 1211 of the Internal Revenue Code, 
151.26 	be allowed for that year, must be treated as an increase in taxable income.
151.27 	(c) This subdivision applies to any item that is attributable to:
151.28 	(1) any listed transaction under section 289A.121; and
151.29 	(2) any reportable transaction, other than a listed transaction, if a significant purpose 
151.30 	of that transaction is the avoidance or evasion of federal income tax liability.
151.31 	(d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect 
151.32 	to the portion of any reportable transaction understatement with respect to which the 
151.33 	disclosure requirements of section 289A.121, subdivision 5, and section 6664(d)(2)(A) 
151.34 	of the Internal Revenue Code are not met.
152.1 	(e)(1) No penalty applies under this subdivision with respect to any portion of a 
152.2 	reportable transaction understatement if the taxpayer shows that there was reasonable 
152.3 	cause for the portion and that the taxpayer acted in good faith with respect to the portion. 
152.4 	This paragraph applies only if:
152.5 	(i) the relevant facts affecting the tax treatment of the item are adequately disclosed 
152.6 	as required under section 289A.121;
152.7 	(ii) there is or was substantial authority for the treatment; and
152.8 	(iii) the taxpayer reasonably believed that the treatment was more likely than not 
152.9 	the proper treatment.
152.10 	(2) A taxpayer who did not adequately disclose under section 289A.121 meets 
152.11 	the requirements of clause (1)(i), if the commissioner abates the penalty imposed by 
152.12 	subdivision 26, paragraph (d), under section 270C.34 subdivision 26, paragraph (g).
152.13 	(3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief 
152.14 	with respect to the tax treatment of an item only if the belief:
152.15 	(i) is based on the facts and law that exist when the return of tax which includes the 
152.16 	tax treatment is filed; and
152.17 	(ii) relates solely to the taxpayer's chances of success on the merits of the treatment 
152.18 	and does not take into account the possibility that a return will not be audited, the 
152.19 	treatment will not be raised on audit, or the treatment will be resolved through settlement 
152.20 	if it is raised.
152.21 	(4) An opinion of a tax advisor may not be relied upon to establish the reasonable 
152.22 	belief of a taxpayer if:
152.23 	(i) the tax advisor:
152.24 	(A) is a material advisor, as defined in section 289A.121, and participates in the 
152.25 	organization, management, promotion, or sale of the transaction or is related (within the 
152.26 	meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person 
152.27 	who so participates;
152.28 	(B) is compensated directly or indirectly by a material advisor with respect to the 
152.29 	transaction;
152.30 	(C) has a fee arrangement with respect to the transaction which is contingent on all 
152.31 	or part of the intended tax benefits from the transaction being sustained; or
152.32 	(D) has a disqualifying financial interest with respect to the transaction, as 
152.33 	determined under United States Treasury regulations prescribed to implement the 
152.34 	provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or
152.35 	(ii) the opinion:
153.1 	(A) is based on unreasonable factual or legal assumptions, including assumptions 
153.2 	as to future events;
153.3 	(B) unreasonably relies on representations, statements, findings, or agreements of 
153.4 	the taxpayer or any other person;
153.5 	(C) does not identify and consider all relevant facts; or
153.6 	(D) fails to meet any other requirement as the Secretary of the Treasury may 
153.7 	prescribe under federal law.
153.8 	(f) The penalty imposed by this subdivision applies in lieu of the penalty imposed 
153.9 	under subdivision 4.

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

153.11 	Sec. 10. Minnesota Statutes 2006, section 289A.60, is amended by adding a 
153.12 	subdivision to read:
153.13 		Subd. 28.Preparer identification number. Any Minnesota individual income tax 
153.14 	return or claim for refund prepared by a "tax refund or return preparer" as defined in 
153.15 	subdivision 13, paragraph (f), shall bear the identification number the preparer is required 
153.16 	to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund 
153.17 	or return preparer who prepares a Minnesota individual income tax return or claim for 
153.18 	refund and fails to include the required number on the return or claim is subject to a 
153.19 	penalty of $50 for each failure.

153.20 	EFFECTIVE DATE. This section is effective for returns prepared for taxable 
153.21 	years beginning after December 31, 2007.

153.22 	Sec. 11. Minnesota Statutes 2007 Supplement, section 290.01, subdivision 19b, 
153.23 	is amended to read:
153.24 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
153.25 	and trusts, there shall be subtracted from federal taxable income:
153.26 	(1) net interest income on obligations of any authority, commission, or 
153.27 	instrumentality of the United States to the extent includable in taxable income for federal 
153.28 	income tax purposes but exempt from state income tax under the laws of the United States;
153.29 	(2) if included in federal taxable income, the amount of any overpayment of income 
153.30 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
153.31 	is received as a refund or as a credit to another taxable year's income tax liability;
153.32 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
153.33 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
154.1 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
154.2 	transportation of each qualifying child in attending an elementary or secondary school 
154.3 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
154.4 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
154.5 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
154.6 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
154.7 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
154.8 	"textbooks" includes books and other instructional materials and equipment purchased 
154.9 	or leased for use in elementary and secondary schools in teaching only those subjects 
154.10 	legally and commonly taught in public elementary and secondary schools in this state. 
154.11 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
154.12 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
154.13 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
154.14 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
154.15 	or materials for, or transportation to, extracurricular activities including sporting events, 
154.16 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
154.17 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
154.18 	given in section 32(c)(3) of the Internal Revenue Code;
154.19 	(4) income as provided under section 290.0802;
154.20 	(5) to the extent included in federal adjusted gross income, income realized on 
154.21 	disposition of property exempt from tax under section 290.491;
154.22 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
154.23 	of the Internal Revenue Code in determining federal taxable income by an individual 
154.24 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
154.25 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
154.26 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
154.27 	under the provisions of Public Law 109-1;
154.28 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
154.29 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
154.30 	which is included in gross income under section 87 of the Internal Revenue Code;
154.31 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
154.32 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
154.33 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
154.34 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
154.35 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
154.36 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
155.1 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
155.2 	the extent they exceed the federal foreign tax credit;
155.3 	(9) in each of the five tax years immediately following the tax year in which an 
155.4 	addition is required under subdivision 19a, clause (7), or 19c, clause (15) (14), in the case 
155.5 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
155.6 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
155.7 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
155.8 	subdivision 19c, clause (15) (14), in the case of a shareholder of an S corporation, minus 
155.9 	the positive value of any net operating loss under section 172 of the Internal Revenue 
155.10 	Code generated for the tax year of the addition. The resulting delayed depreciation 
155.11 	cannot be less than zero;
155.12 	(10) job opportunity building zone income as provided under section 469.316;
155.13 	(11) to the extent included in federal taxable income, the amount of compensation 
155.14 	paid to members of the Minnesota National Guard or other reserve components of the 
155.15 	United States military for active service performed in Minnesota, excluding compensation 
155.16 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
155.17 	this clause, "active service" means (i) state active service as defined in section 190.05, 
155.18 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
155.19 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
155.20 	subdivision 5c, but "active service" excludes services performed exclusively for purposes 
155.21 	of basic combat training, advanced individual training, annual training, and periodic 
155.22 	inactive duty training; special training periodically made available to reserve members; 
155.23 	and service performed in accordance with section 190.08, subdivision 3;
155.24 	(12) to the extent included in federal taxable income, the amount of compensation 
155.25 	paid to Minnesota residents who are members of the armed forces of the United States or 
155.26 	United Nations for active duty performed outside Minnesota;
155.27 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
155.28 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
155.29 	to another person for human organ transplantation. For purposes of this clause, "organ" 
155.30 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
155.31 	"human organ transplantation" means the medical procedure by which transfer of a human 
155.32 	organ is made from the body of one person to the body of another person; "qualified 
155.33 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
155.34 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
155.35 	may be subtracted under this clause only once; and "qualified donor" means the individual 
155.36 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
156.1 	individual may claim the subtraction in this clause for each instance of organ donation for 
156.2 	transplantation during the taxable year in which the qualified expenses occur;
156.3 	(14) in each of the five tax years immediately following the tax year in which an 
156.4 	addition is required under subdivision 19a, clause (8), or 19c, clause (16) (15), in the case 
156.5 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
156.6 	of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause 
156.7 	(16) (15), in the case of a shareholder of a corporation that is an S corporation, minus the 
156.8 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
156.9 	generated for the tax year of the addition. If the net operating loss exceeds the addition for 
156.10 	the tax year, a subtraction is not allowed under this clause;
156.11 	(15) to the extent included in federal taxable income, compensation paid to a 
156.12 	nonresident who is a service member as defined in United States Code, title 10, section 
156.13 	101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public 
156.14 	Law 108-189, section 101(2); and
156.15 	(16) international economic development zone income as provided under section 
156.16 	469.325.

156.17 	EFFECTIVE DATE. Clauses (9) and (14) of this section are effective the day 
156.18 	following final enactment. Clauses (11) and (12) are effective retroactively for taxable 
156.19 	years beginning after December 31, 2004.

156.20 	Sec. 12. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
156.21 		Subd. 19d.Corporations; modifications decreasing federal taxable income. For 
156.22 	corporations, there shall be subtracted from federal taxable income after the increases 
156.23 	provided in subdivision 19c:
156.24 	(1) the amount of foreign dividend gross-up added to gross income for federal 
156.25 	income tax purposes under section 78 of the Internal Revenue Code;
156.26 	(2) the amount of salary expense not allowed for federal income tax purposes due 
156.27 	to claiming the federal jobs work opportunity credit under section 51 of the Internal 
156.28 	Revenue Code;
156.29 	(3) any dividend (not including any distribution in liquidation) paid within the 
156.30 	taxable year by a national or state bank to the United States, or to any instrumentality of 
156.31 	the United States exempt from federal income taxes, on the preferred stock of the bank 
156.32 	owned by the United States or the instrumentality;
156.33 	(4) amounts disallowed for intangible drilling costs due to differences between 
156.34 	this chapter and the Internal Revenue Code in taxable years beginning before January 
156.35 	1, 1987, as follows:
157.1 	(i) to the extent the disallowed costs are represented by physical property, an amount 
157.2 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
157.3 	subdivision 7, subject to the modifications contained in subdivision 19e; and
157.4 	(ii) to the extent the disallowed costs are not represented by physical property, an 
157.5 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
157.6 	290.09, subdivision 8;
157.7 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
157.8 	Internal Revenue Code, except that:
157.9 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
157.10 	capital loss carrybacks shall not be allowed;
157.11 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
157.12 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
157.13 	allowed;
157.14 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
157.15 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
157.16 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
157.17 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
157.18 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
157.19 	extent such loss was not used in a prior taxable year and subject to the provisions of 
157.20 	Minnesota Statutes 1986, section 290.16, shall be allowed;
157.21 	(6) an amount for interest and expenses relating to income not taxable for federal 
157.22 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
157.23 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
157.24 	291 of the Internal Revenue Code in computing federal taxable income;
157.25 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
157.26 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (11) (9), a 
157.27 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
157.28 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
157.29 	by the commissioner. In the case of property held in trust, the allowable deduction must 
157.30 	be apportioned between the income beneficiaries and the trustee in accordance with the 
157.31 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
157.32 	of the trust's income allocable to each;
157.33 	(8) for certified pollution control facilities placed in service in a taxable year 
157.34 	beginning before December 31, 1986, and for which amortization deductions were elected 
157.35 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
158.1 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
158.2 	1986, section 290.09, subdivision 7;
158.3 	(9) amounts included in federal taxable income that are due to refunds of income, 
158.4 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
158.5 	corporation to Minnesota, another state, a political subdivision of another state, the 
158.6 	District of Columbia, or a foreign country or possession of the United States to the extent 
158.7 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
158.8 	clause (1), in a prior taxable year;
158.9 	(10) 80 percent of royalties, fees, or other like income accrued or received from a 
158.10 	foreign operating corporation or a foreign corporation which is part of the same unitary 
158.11 	business as the receiving corporation;
158.12 	(11) income or gains from the business of mining as defined in section 290.05, 
158.13 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
158.14 	(12) the amount of disability access expenditures in the taxable year which are not 
158.15 	allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
158.16 	(13) the amount of qualified research expenses not allowed for federal income tax 
158.17 	purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 
158.18 	the amount exceeds the amount of the credit allowed under section 290.068;
158.19 	(14) the amount of salary expenses not allowed for federal income tax purposes due 
158.20 	to claiming the Indian employment credit under section 45A(a) of the Internal Revenue 
158.21 	Code;
158.22 	(15) the amount of any refund of environmental taxes paid under section 59A of the 
158.23 	Internal Revenue Code;
158.24 	(16) (15) for taxable years beginning before January 1, 2008, the amount of the 
158.25 	federal small ethanol producer credit allowed under section 40(a)(3) of the Internal 
158.26 	Revenue Code which is included in gross income under section 87 of the Internal Revenue 
158.27 	Code;
158.28 	(17) (16) for a corporation whose foreign sales corporation, as defined in section 
158.29 	922 of the Internal Revenue Code, constituted a foreign operating corporation during any 
158.30 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
158.31 	claiming the deduction under section 290.21, subdivision 4, for income received from 
158.32 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
158.33 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
158.34 	not income of a foreign operating company;
159.1 	(18) (17) any decrease in subpart F income, as defined in section 952(a) of the 
159.2 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
159.3 	regard to the provisions of section 614 103 of Public Law 107-147 109-222;
159.4 	(19) (16) in each of the five tax years immediately following the tax year in which 
159.5 	an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth 
159.6 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
159.7 	the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The 
159.8 	resulting delayed depreciation cannot be less than zero; and
159.9 	(20) (17) in each of the five tax years immediately following the tax year in which an 
159.10 	addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the 
159.11 	amount of the addition.

159.12 	EFFECTIVE DATE. The amendment to clause (2) is effective the day following 
159.13 	final enactment. The rest of this section is effective for taxable years beginning after 
159.14 	December 31, 2007.

159.15 	Sec. 13. Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read:
159.16 		Subd. 33.Bovine testing credit. (a) An owner of cattle in Minnesota may take a 
159.17 	credit against the tax due under this chapter for an amount equal to one-half the expenses 
159.18 	incurred during the taxable year to conduct tuberculosis testing on those cattle. 
159.19 	(b) If the amount of credit which the taxpayer is eligible to receive under this 
159.20 	subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of 
159.21 	revenue shall refund the excess to the taxpayer.
159.22 	(c) The amount necessary to pay claims for the refund provided in this subdivision is 
159.23 	appropriated from the general fund to the commissioner of revenue.
159.24 	(d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in 
159.25 	Minnesota is not federally required are not allowed in claiming the credit under paragraph 
159.26 	(a).

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

159.29 	Sec. 14. Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read:
159.30 		Subd. 2b.Inflation adjustment. The commissioner shall adjust the dollar amount 
159.31 	of the income threshold at which the maximum credit begins to be reduced under 
159.32 	subdivision 2 must be adjusted for inflation. The commissioner shall make the inflation 
159.33 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
160.1 	the purposes of this subdivision the percentage increase must be determined from the year 
160.2 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting 
160.3 	for inflation for the tax year beginning after December 31, 2000. The determination of 
160.4 	the commissioner under this subdivision is not a rule under the Administrative Procedure 
160.5 	Act. by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
160.6 	Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for 
160.7 	the word "1992." For 2001, the commissioner shall then determine the percent change 
160.8 	from the 12 months ending on August 31, 1999, to the 12 months ending on August 31, 
160.9 	2000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the 
160.10 	12 months ending on August 31 of the year preceding the taxable year. The determination 
160.11 	of the commissioner pursuant to this subdivision must not be considered a "rule" and is 
160.12 	not subject to the Administrative Procedure Act contained in chapter 14. The threshold 
160.13 	amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in 
160.14 	$5, the amount is rounded up to the nearest $10 amount.

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

160.17 	Sec. 15. Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read:
160.18 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the 
160.19 	credit and the income thresholds at which the maximum credit begins to be reduced in 
160.20 	subdivision 1 must be adjusted for inflation. The commissioner shall make the inflation 
160.21 	adjustments in accordance with section 1(f) of the Internal Revenue Code except that for 
160.22 	the purposes of this subdivision the percentage increase shall be determined from the year 
160.23 	starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting for 
160.24 	inflation for the tax year beginning after December 31, 2000.adjust by the percentage 
160.25 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
160.26 	that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For 
160.27 	2001, the commissioner shall then determine the percent change from the 12 months 
160.28 	ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each 
160.29 	subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending 
160.30 	on August 31 of the year preceding the taxable year. The earned income thresholds as 
160.31 	adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends 
160.32 	in $5, the amount is rounded up to the nearest $10 amount. The determination of the 
160.33 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.

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

161.3 	Sec. 16. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
161.4 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative 
161.5 	minimum tax, the exemption amount is:
161.6 	(1) for taxable years beginning before January 1, 2006, the exemption determined 
161.7 	under section 55(d) of the Internal Revenue Code, as amended through December 31, 
161.8 	1992; and
161.9 	(2), for taxable years beginning after December 31, 2005, $60,000 for married 
161.10 	couples filing joint returns, $30,000 for married individuals filing separate returns, estates, 
161.11 	and trusts, and $45,000 for unmarried individuals.
161.12 	(b) The exemption amount determined under this subdivision is subject to the phase 
161.13 	out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 
161.14 	taxable income as determined under this section must be substituted in the computation of 
161.15 	the phase out.
161.16 	(c) For taxable years beginning after December 31, 2006, the exemption amount 
161.17 	under paragraph (a), clause (2), must be adjusted for inflation. The commissioner shall 
161.18 	make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 
161.19 	Code except that for the purposes of this subdivision the percentage increase must be 
161.20 	determined from the year starting September 1, 2005, and ending August 31, 2006, as the 
161.21 	base year for adjusting for inflation for the tax year beginning after December 31, 2006.
161.22 	The commissioner shall adjust the exemption amount by the percentage determined 
161.23 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
161.24 	section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007, 
161.25 	the commissioner shall then determine the percent change from the 12 months ending on 
161.26 	August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent 
161.27 	year, from the 12 months ending on August 31, 2005, to the 12 months ending on August 
161.28 	31 of the year preceding the taxable year. The exemption amount as adjusted must be 
161.29 	rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest 
161.30 	$10 amount. The determination of the commissioner under this subdivision is not a rule 
161.31 	under the Administrative Procedure Act.

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

161.34 	Sec. 17. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
162.1 		Subd. 3.Alternative minimum taxable income. "Alternative minimum taxable 
162.2 	income" is Minnesota net income as defined in section 290.01, subdivision 19, and 
162.3 	includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 
162.4 	(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 
162.5 	Minnesota tax return, the minimum tax must be computed on a separate company basis. 
162.6 	If a corporation is part of a tax group filing a unitary return, the minimum tax must be 
162.7 	computed on a unitary basis. The following adjustments must be made.
162.8 	(1) For purposes of the depreciation adjustments under section 56(a)(1) and 
162.9 	56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 
162.10 	service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 
162.11 	income tax purposes, including any modification made in a taxable year under section 
162.12 	290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7, 
162.13 	paragraph (c).
162.14 	For taxable years beginning after December 31, 2000, the amount of any remaining 
162.15 	modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 
162.16 	section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 
162.17 	allowance in the first taxable year after December 31, 2000.
162.18 	(2) The portion of the depreciation deduction allowed for federal income tax 
162.19 	purposes under section 168(k) of the Internal Revenue Code that is required as an addition 
162.20 	under section 290.01, subdivision 19c, clause (16) (15), is disallowed in determining 
162.21 	alternative minimum taxable income.
162.22 	(3) The subtraction for depreciation allowed under section 290.01, subdivision 
162.23 	19d, clause (19) (18), is allowed as a depreciation deduction in determining alternative 
162.24 	minimum taxable income.
162.25 	(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
162.26 	of the Internal Revenue Code does not apply.
162.27 	(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
162.28 	Revenue Code does not apply.
162.29 	(6) The special rule for dividends from section 936 companies under section 
162.30 	56(g)(4)(C)(iii) does not apply.
162.31 	(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue 
162.32 	Code does not apply.
162.33 	(8) The tax preference for intangible drilling costs under section 57(a)(2) of the 
162.34 	Internal Revenue Code must be calculated without regard to subparagraph (E) and the 
162.35 	subtraction under section 290.01, subdivision 19d, clause (4).
163.1 	(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 
163.2 	Revenue Code does not apply.
163.3 	(10) The tax preference for charitable contributions of appreciated property under 
163.4 	section 57(a)(6) of the Internal Revenue Code does not apply.
163.5 	(11) For purposes of calculating the tax preference for accelerated depreciation or 
163.6 	amortization on certain property placed in service before January 1, 1987, under section 
163.7 	57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 
163.8 	deduction allowed under section 290.01, subdivision 19e.
163.9 	For taxable years beginning after December 31, 2000, the amount of any remaining 
163.10 	modification made under section 290.01, subdivision 19e, not previously deducted is a 
163.11 	depreciation or amortization allowance in the first taxable year after December 31, 2004.
163.12 	(12) For purposes of calculating the adjustment for adjusted current earnings in 
163.13 	section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 
163.14 	income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 
163.15 	minimum taxable income as defined in this subdivision, determined without regard to the 
163.16 	adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
163.17 	(13) For purposes of determining the amount of adjusted current earnings under 
163.18 	section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 
163.19 	56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend 
163.20 	gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the 
163.21 	amount of refunds of income, excise, or franchise taxes subtracted as provided in section 
163.22 	290.01, subdivision 19d, clause (10) (9), or (iii) the amount of royalties, fees or other like 
163.23 	income subtracted as provided in section 290.01, subdivision 19d, clause (11) (10).
163.24 	(14) Alternative minimum taxable income excludes the income from operating in a 
163.25 	job opportunity building zone as provided under section 469.317.
163.26 	(15) Alternative minimum taxable income excludes the income from operating in a 
163.27 	biotechnology and health sciences industry zone as provided under section 469.337.
163.28 	(16) Alternative minimum taxable income excludes the income from operating in an 
163.29 	international economic development zone as provided under section 469.326.
163.30 	Items of tax preference must not be reduced below zero as a result of the 
163.31 	modifications in this subdivision.

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

163.34 	Sec. 18. Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read:
164.1 		Subd. 8.Deposit; definition. (a) "Deposit," as used in subdivision 7 6, paragraph 
164.2 	(n), has the meanings in this subdivision.
164.3 	(b) "Deposit" means the unpaid balance of money or its equivalent received or 
164.4 	held by a financial institution in the usual course of business and for which it has given 
164.5 	or is obligated to give credit, either conditionally or unconditionally, to a commercial, 
164.6 	checking, savings, time, or thrift account whether or not advance notice is required to 
164.7 	withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift 
164.8 	certificate, investment certificate, or certificate of indebtedness, or other similar name, or a 
164.9 	check or draft drawn against a deposit account and certified by the financial institution, 
164.10 	or a letter of credit or a traveler's check on which the financial institution is primarily 
164.11 	liable. However, without limiting the generality of the term "money or its equivalent," any 
164.12 	such account or instrument must be regarded as evidencing the receipt of the equivalent 
164.13 	of money when credited or issued in exchange for checks or drafts or for a promissory 
164.14 	note upon which the person obtaining the credit or instrument is primarily or secondarily 
164.15 	liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other 
164.16 	instruments forwarded to the bank for collection.
164.17 	(c) "Deposit" means trust funds received or held by the financial institution, whether 
164.18 	held in the trust department or held or deposited in any other department of the financial 
164.19 	institution.
164.20 	(d) "Deposit" means money received or held by a financial institution, or the credit 
164.21 	given for money or its equivalent received or held by a financial institution, in the usual 
164.22 	course of business for a special or specific purpose, regardless of the legal relationship so 
164.23 	established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds, 
164.24 	funds held as security for an obligation due to the financial institution or others, including 
164.25 	funds held as dealers reserves, or for securities loaned by the financial institution, funds 
164.26 	deposited by a debtor to meet maturing obligations, funds deposited as advance payment 
164.27 	on subscriptions to United States government securities, funds held for distribution or 
164.28 	purchase of securities, funds held to meet its acceptances or letters of credit, and withheld 
164.29 	taxes. It does not include funds received by the financial institution for immediate 
164.30 	application to the reduction of an indebtedness to the receiving financial institution, or 
164.31 	under condition that the receipt of the funds immediately reduces or extinguishes the 
164.32 	indebtedness.
164.33 	(e) "Deposit" means outstanding drafts, including advice or another such institution, 
164.34 	cashier's checks, money orders, or other officer's checks issued in the usual course 
164.35 	of business for any purpose, but not including those issued in payment for services, 
164.36 	dividends, or purchases or other costs or expenses of the financial institution itself.
165.1 	(f) "Deposit" means money or its equivalent held as a credit balance by a financial 
165.2 	institution on behalf of its customer if the entity is engaged in soliciting and holding such 
165.3 	balances in the regular course of its business.
165.4 	(g) Interinstitution fund transfers are not deposits.

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

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

165.14 	EFFECTIVE DATE. This section is effective for property tax refunds based on 
165.15 	rents paid after December 31, 2007, and property taxes payable after December 31, 2008.

165.16 	ARTICLE 12
165.17 	DEPARTMENT SALES AND USE TAXES

165.18 	Section 1. Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to 
165.19 	read:
165.20 		Subd. 2.Bad debt loss. If a claim relates to an overpayment because of a failure to 
165.21 	deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered 
165.22 	timely if filed within seven years from the date prescribed for the filing of the return. A 
165.23 	claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2 
165.24 	years from the date prescribed for filing the return, plus any extensions granted for filing 
165.25 	the return, but only if filed within the extended time when the bad debt was (1) written off 
165.26 	as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted 
165.27 	for federal income tax purposes or would have been eligible for a bad debt deduction for 
165.28 	federal income tax purposes if the taxpayer were required to file a federal income tax 
165.29 	return, or within one year from the date the taxpayer's federal income tax return is timely 
165.30 	filed claiming the bad debt deduction, whichever period is later. The refund or credit is 
165.31 	limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes 
165.32 	of this subdivision, has the same meaning as that term is used in United States Code, 
165.33 	title 26, section 166, except that for a claim relating to an overpayment of taxes under 
166.1 	chapter 297A the following are excluded from the calculation of bad debt: financing 
166.2 	charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts 
166.3 	on property that remain in the possession of the seller until the full purchase price is 
166.4 	paid; expenses incurred in attempting to collect any debt; and repossessed property. For 
166.5 	purposes of reporting a payment received on previously claimed bad debt under chapter 
166.6 	297A, any payments made on a debt or account are applied first proportionally to the 
166.7 	taxable price of the property or service and the sales tax on it, and secondly to interest, 
166.8 	service charges, and any other charges.

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

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

166.15 	EFFECTIVE DATE. This section is effective for refund claims filed after June 
166.16 	30, 2008.

166.17 	Sec. 3. Minnesota Statutes 2006, section 289A.60, subdivision 25, is amended to read:
166.18 		Subd. 25.Penalty for failure to properly complete sales and use tax return. A 
166.19 	person who fails to report local sales taxtaxes required to be reported on a sales and use 
166.20 	tax return or who fails to report local sales taxtaxes on separate tax lines on the sales 
166.21 	and use tax return is subject to a penalty of five percent of the amount of tax not properly 
166.22 	reported on the return. A person who files a consolidated tax return but fails to report 
166.23 	location information is subject to a $500 penalty for each return not containing location 
166.24 	information. In addition, the commissioner may revoke the privilege for a taxpayer to 
166.25 	file consolidated returns and may require the taxpayer to separately register each location 
166.26 	and to file a tax return for each location.

166.27 	EFFECTIVE DATE. This section is effective for returns filed after June 30, 2008.

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

167.3 	EFFECTIVE DATE. This section is effective for reports filed after December 
167.4 	31, 2008.

167.5 	Sec. 5. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:
167.6 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
167.7 	to, each of the transactions listed in this subdivision.
167.8 	(b) Sale and purchase include:
167.9 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
167.10 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
167.11 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
167.12 	in money or by exchange or barter, tangible personal property, other than a manufactured 
167.13 	home used for residential purposes for a continuous period of 30 days or more.
167.14 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
167.15 	tangible personal property for a consideration for consumers who furnish either directly or 
167.16 	indirectly the materials used in the production, fabrication, printing, or processing.
167.17 	(d) Sale and purchase include the preparing for a consideration of food. 
167.18 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
167.19 	to, the following:
167.20 	(1) prepared food sold by the retailer;
167.21 	(2) soft drinks;
167.22 	(3) candy;
167.23 	(4) dietary supplements; and
167.24 	(5) all food sold through vending machines.
167.25 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
167.26 	gas, water, or steam for use or consumption within this state.
167.27 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
167.28 	computer software whether delivered electronically, by load and leave, or otherwise.
167.29 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
167.30 	services:
167.31 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
167.32 	events, and the making available of amusement devices, tanning facilities, reducing 
167.33 	salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
167.34 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
167.35 	motel, or trailer camp, including furnishing the guest of the facility with access to 
168.1 	telecommunication services, and the granting of any similar license to use real property 
168.2 	in a specific facility, other than the renting or leasing of it for a continuous period of 
168.3 	30 days or more under an enforceable written agreement that may not be terminated 
168.4 	without prior notice;
168.5 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
168.6 	periodic basis, except for parking at a meter;
168.7 	(4) the granting of membership in a club, association, or other organization if:
168.8 	(i) the club, association, or other organization makes available for the use of its 
168.9 	members sports and athletic facilities, without regard to whether a separate charge is 
168.10 	assessed for use of the facilities; and
168.11 	(ii) use of the sports and athletic facility is not made available to the general public 
168.12 	on the same basis as it is made available to members.
168.13 	Granting of membership means both onetime initiation fees and periodic membership 
168.14 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
168.15 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
168.16 	swimming pools; and other similar athletic or sports facilities;
168.17 	(5) delivery of aggregate materials and concrete block by a third party, excluding 
168.18 	delivery of aggregate material used in road construction, and delivery of concrete block by 
168.19 	a third party if the delivery would be subject to the sales tax if provided by the seller of the 
168.20 	aggregate material or concrete block; and
168.21 	(6) services as provided in this clause:
168.22 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
168.23 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
168.24 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
168.25 	include services provided by coin operated facilities operated by the customer;
168.26 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
168.27 	provided by coin operated facilities operated by the customer, and rustproofing, 
168.28 	undercoating, and towing of motor vehicles;
168.29 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
168.30 	pest control and exterminating services;
168.31 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
168.32 	including services performed within the jurisdiction they serve by off-duty licensed peace 
168.33 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
168.34 	organization for monitoring and electronic surveillance of persons placed on in-home 
168.35 	detention pursuant to court order or under the direction of the Minnesota Department 
168.36 	of Corrections;
169.1 	(v) pet grooming services;
169.2 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
169.3 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
169.4 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
169.5 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
169.6 	public utility lines. Services performed under a construction contract for the installation of 
169.7 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
169.8 	(vii) massages, except when provided by a licensed health care facility or 
169.9 	professional or upon written referral from a licensed health care facility or professional for 
169.10 	treatment of illness, injury, or disease; and
169.11 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
169.12 	other similar arrangements, but excluding veterinary and horse boarding services.
169.13 	In applying the provisions of this chapter, the terms "tangible personal property" 
169.14 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
169.15 	and the provision of these taxable services, unless specifically provided otherwise. 
169.16 	Services performed by an employee for an employer are not taxable. Services performed 
169.17 	by a partnership or association for another partnership or association are not taxable if 
169.18 	one of the entities owns or controls more than 80 percent of the voting power of the 
169.19 	equity interest in the other entity. Services performed between members of an affiliated 
169.20 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
169.21 	group of corporations" means those entities that would be classified as members of an 
169.22 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
169.23 	the exclusions in section 1504(b).
169.24 	For purposes of clause (5), "road construction" means construction of (1) public 
169.25 	roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 
169.26 	metropolitan area up to the point of the emergency response location sign.
169.27 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
169.28 	personal property or taxable services by the United States or any of its agencies or 
169.29 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
169.30 	subdivisions.
169.31 	(i) A sale and a purchase includes the furnishing for a consideration 
169.32 	of telecommunications services, including ancillary services associated with 
169.33 	telecommunication services, cable television services and, direct satellite services, and 
169.34 	ring tones. Telecommunications Telecommunication services include, but are not limited 
169.35 	to, the following services, as defined in section 297A.669: air-to-ground radiotelephone 
169.36 	service, mobile telecommunication service, postpaid calling service, prepaid calling 
170.1 	service, prepaid wireless calling service, and private communication services. The
170.2 	services in this paragraph are taxed to the extent allowed under federal law.
170.3 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
170.4 	the installation charges would be subject to the sales tax if the installation were provided 
170.5 	by the seller of the item being installed.
170.6 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
170.7 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
170.8 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
170.9 	65B.29, subdivision 1, clause (1).

170.10 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
170.11 	June 30, 2008, except that the amendments to paragraphs (g), clause (2), and (i), are 
170.12 	effective retroactively for sales and purchases made after December 31, 2007.

170.13 	Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 4, is amended to read:
170.14 		Subd. 4.Retail sale. (a) A "retail sale" means any sale, lease, or rental for any 
170.15 	purpose, other than resale, sublease, or subrent of items by the purchaser in the normal 
170.16 	course of business as defined in subdivision 21.
170.17 	(b) A sale of property used by the owner only by leasing it to others or by holding it 
170.18 	in an effort to lease it, and put to no use by the owner other than resale after the lease or 
170.19 	effort to lease, is a sale of property for resale.
170.20 	(c) A sale of master computer software that is purchased and used to make copies for 
170.21 	sale or lease is a sale of property for resale.
170.22 	(d) A sale of building materials, supplies, and equipment to owners, contractors, 
170.23 	subcontractors, or builders for the erection of buildings or the alteration, repair, or 
170.24 	improvement of real property is a retail sale in whatever quantity sold, whether the sale is 
170.25 	for purposes of resale in the form of real property or otherwise.
170.26 	(e) A sale of carpeting, linoleum, or similar floor covering to a person who provides 
170.27 	for installation of the floor covering is a retail sale and not a sale for resale since a sale 
170.28 	of floor covering which includes installation is a contract for the improvement of real 
170.29 	property.
170.30 	(f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides 
170.31 	for installation of the items is a retail sale and not a sale for resale since a sale of 
170.32 	shrubbery, plants, sod, trees, and similar items that includes installation is a contract for 
170.33 	the improvement of real property.
170.34 	(g) A sale of tangible personal property that is awarded as prizes is a retail sale and 
170.35 	is not considered a sale of property for resale.
171.1 	(h) A sale of tangible personal property utilized or employed in the furnishing or 
171.2 	providing of services under subdivision 3, paragraph (g), clause (1), including, but not 
171.3 	limited to, property given as promotional items, is a retail sale and is not considered a 
171.4 	sale of property for resale.
171.5 	(i) A sale of tangible personal property used in conducting lawful gambling under 
171.6 	chapter 349 or the State Lottery under chapter 349A, including, but not limited to, 
171.7 	property given as promotional items, is a retail sale and is not considered a sale of 
171.8 	property for resale.
171.9 	(j) A sale of machines, equipment, or devices that are used to furnish, provide, or 
171.10 	dispense goods or services, including, but not limited to, coin-operated devices, is a retail 
171.11 	sale and is not considered a sale of property for resale.
171.12 	(k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease 
171.13 	payment becomes due under the terms of the agreement or the trade practices of the 
171.14 	lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, 
171.15 	subdivision 5, but excluding vehicles with a manufacturer's gross vehicle weight rating 
171.16 	greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time 
171.17 	the lease is executed.
171.18 	(l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of 
171.19 	title or possession of the tangible personal property.
171.20 	(m) A sale of a bundled transaction in which one or more of the products included 
171.21 	in the bundle is a taxable product is a retail sale, except that if one of the products 
171.22 	is a telecommunication service, ancillary service, Internet access, or audio or video 
171.23 	programming service, and the seller has maintained books and records identifying through 
171.24 	reasonable and verifiable standards the portions of the price that are attributable to the 
171.25 	distinct and separately identifiable products, then the products are not considered part of a 
171.26 	bundled transaction. For purposes of this paragraph:
171.27 	(1) the books and records maintained by the seller must be maintained in the regular 
171.28 	course of business, and do not include books and records created and maintained by the 
171.29 	seller primarily for tax purposes; 
171.30 	(2) books and records maintained in the regular course of business include, but are 
171.31 	not limited to, financial statements, general ledgers, invoicing and billing systems and 
171.32 	reports, and reports for regulatory tariffs and other regulatory matters; and
171.33 	(3) books and records are maintained primarily for tax purposes when the books 
171.34 	and records identify taxable and nontaxable portions of the price, but the seller maintains 
171.35 	other books and records that identify different prices attributable to the distinct products 
171.36 	included in the same bundled transaction.

172.1 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
172.2 	made after December 31, 2007.

172.3 	Sec. 7. Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read:
172.4 		Subd. 7.Sales price. (a) "Sales price" means the measure subject to sales tax, and 
172.5 	means the total amount of consideration, including cash, credit, personal property, and 
172.6 	services, for which personal property or services are sold, leased, or rented, valued in 
172.7 	money, whether received in money or otherwise, without any deduction for the following:
172.8 	(1) the seller's cost of the property sold;
172.9 	(2) the cost of materials used, labor or service cost, interest, losses, all costs of 
172.10 	transportation to the seller, all taxes imposed on the seller, and any other expenses of 
172.11 	the seller;
172.12 	(3) charges by the seller for any services necessary to complete the sale, other than 
172.13 	delivery and installation charges;
172.14 	(4) delivery charges, except the percentage of the delivery charge allocated to 
172.15 	delivery of tax exempt property, when the delivery charge is allocated by using either (i) a 
172.16 	percentage based on the total sales price of the taxable property compared to the total sales 
172.17 	price of all property in the shipment, or (ii) a percentage based on the total weight of the 
172.18 	taxable property compared to the total weight of all property in the shipment; and
172.19 	(5) installation charges; and.
172.20 	(6) the value of exempt property given to the purchaser when taxable and exempt 
172.21 	personal property have been bundled together and sold by the seller as a single product 
172.22 	or piece of merchandise.
172.23 	(b) Sales price does not include:
172.24 	(1) discounts, including cash, terms, or coupons, that are not reimbursed by a third 
172.25 	party and that are allowed by the seller and taken by a purchaser on a sale;
172.26 	(2) interest, financing, and carrying charges from credit extended on the sale of 
172.27 	personal property or services, if the amount is separately stated on the invoice, bill of sale, 
172.28 	or similar document given to the purchaser; and
172.29 	(3) any taxes legally imposed directly on the consumer that are separately stated on 
172.30 	the invoice, bill of sale, or similar document given to the purchaser.
172.31 	(c) Sales price includes consideration received by the seller from third parties if:
172.32 	(1) the seller actually receives consideration from a party other than the purchaser 
172.33 	and the consideration is directly related to a price reduction or discount on the sale;
172.34 	(2) the seller has an obligation to pass the price reduction or discount through to 
172.35 	the purchaser; 
173.1 	(3) the amount of the consideration attributable to the sale is fixed and determinable 
173.2 	by the seller at the time of the sale of the item to the purchaser; and
173.3 	(4) one of the following criteria is met: 
173.4 	(i) the purchaser presents a coupon, certificate, or other documentation to the seller 
173.5 	to claim a price reduction or discount when the coupon, certificate, or documentation is 
173.6 	authorized, distributed, or granted by a third party with the understanding that the third 
173.7 	party will reimburse any seller to whom the coupon, certificate, or documentation is 
173.8 	presented; 
173.9 	(ii) the purchaser identifies himself or herself to the seller as a member of a group or 
173.10 	organization entitled to a price reduction or discount. A "preferred customer" card that is 
173.11 	available to any customer does not constitute membership in such a group; or 
173.12 	(iii) the price reduction or discount is identified as a third-party price reduction or 
173.13 	discount on the invoice received by the purchaser or on a coupon, certificate, or other 
173.14 	documentation presented by the purchaser.

173.15 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
173.16 	made after December 31, 2007, except that the amendment to paragraph (a), clause (4), is 
173.17 	effective the day following final enactment.

173.18 	Sec. 8. Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read:
173.19 		Subd. 10.Tangible personal property. (a) "Tangible personal property" means 
173.20 	personal property that can be seen, weighed, measured, felt, or touched, or that is in any 
173.21 	other manner perceptible to the senses. "Tangible personal property" includes, but is not 
173.22 	limited to, electricity, water, gas, steam, and prewritten computer software, and prepaid 
173.23 	calling cards.
173.24 	(b) Tangible personal property does not include:
173.25 	(1) large ponderous machinery and equipment used in a business or production 
173.26 	activity which at common law would be considered to be real property;
173.27 	(2) property which is subject to an ad valorem property tax;
173.28 	(3) property described in section 272.02, subdivision 9, clauses (a) to (d); and 
173.29 	(4) property described in section 272.03, subdivision 2, clauses (3) and (5). 

173.30 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
173.31 	made after December 31, 2007.

173.32 	Sec. 9. Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read:
174.1 		Subd. 24.Telecommunications services. (a) "Telecommunications services" means 
174.2 	the electronic transmission, conveyance, or routing of voice, data, audio, video, or any 
174.3 	other information or signals to a point, or between or among points, by or through any 
174.4 	electronic, satellite, optical, microwave, or other medium or method now in existence or 
174.5 	hereafter devised, regardless of the protocol used for such transmission, conveyance, 
174.6 	or routing.
174.7 	(b) Telecommunications services includes the furnishing for consideration of access 
174.8 	to telephone services by a hotel to its guests. include transmission, conveyance, or routing 
174.9 	in which computer processing applications are used to act on the form, code, or protocol 
174.10 	of the content for purposes of transmission, conveyance, or routing, without regard to 
174.11 	whether the service is referred to as voice over Internet protocol services or is classified by 
174.12 	the Federal Communications Commission as enhanced or value added.
174.13 	(c) Telecommunications services do not include:
174.14 	(1) services purchased with a prepaid telephone calling card;
174.15 	(2) private communication service purchased by an agent acting on behalf of the 
174.16 	State Lottery;
174.17 	(3) information services; and
174.18 	(4) purchases of telecommunications when the purchaser uses the purchased services 
174.19 	as a component part of or integrates such service into another telecommunications service 
174.20 	that is sold by the purchaser in the normal course of business.
174.21 	(d) For purposes of this subdivision, "information services" means the offering of 
174.22 	the capability for generating, acquiring, storing, transforming, processing, retrieving, 
174.23 	utilizing, or making available information.
174.24 	(1) data processing and information services that allow data to be generated, 
174.25 	acquired, stored, processed, or retrieved and delivered by an electronic transmission to 
174.26 	a purchaser when the purchaser's primary purpose for the underlying transaction is the 
174.27 	processed data or information;
174.28 	(2) installation or maintenance of wiring or equipment on a customer's premises;
174.29 	(3) tangible personal property;
174.30 	(4) advertising, including, but not limited to, directory advertising;
174.31 	(5) billing and collection services provided to third parties;
174.32 	(6) Internet access service;
174.33 	(7) radio and television audio and video programming services, regardless of the 
174.34 	medium, including the furnishing of transmission, conveyance, and routing of such 
174.35 	services by the programming service provider. Radio and television audio and video 
174.36 	programming services includes, but is not limited to, cable service as defined in United 
175.1 	States Code, title 47, section 522(6), and audio and video programming services delivered 
175.2 	by commercial mobile radio service providers, as defined in Code of Federal Regulations, 
175.3 	title 47, section 20.3;
175.4 	(8) ancillary services; or
175.5 	(9) digital products delivered electronically, including, but not limited to, software, 
175.6 	music, video, reading materials, or ring tones.

175.7 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
175.8 	made after December 31, 2007.

175.9 	Sec. 10. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
175.10 	subdivision to read:
175.11 		Subd. 38.Bundled transaction. (a) "Bundled transaction" means the retail sale 
175.12 	of two or more products when the products are otherwise distinct and identifiable, and 
175.13 	the products are sold for one nonitemized price. As used in this subdivision, "product" 
175.14 	includes tangible personal property, services, intangibles, and digital goods, but does not 
175.15 	include real property or services to real property. A bundled transaction does not include 
175.16 	the sale of any products in which the sales price varies, or is negotiable, based on the 
175.17 	selection by the purchaser of the products included in the transaction.
175.18 	(b) For purposes of this subdivision, "distinct and identifiable" products does not 
175.19 	include:
175.20 	(1) packaging and other materials, such as containers, boxes, sacks, bags, and 
175.21 	bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the 
175.22 	products and are incidental or immaterial to the retail sale. Examples of packaging that are 
175.23 	incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags, 
175.24 	and express delivery envelopes and boxes;
175.25 	(2) a promotional product provided free of charge with the required purchase of 
175.26 	another product. A promotional product is provided free of charge if the sales price of 
175.27 	another product, which is required to be purchased in order to receive the promotional 
175.28 	product, does not vary depending on the inclusion of the promotional product; and 
175.29 	(3) items included in the definition of sales price.
175.30 	(c) For purposes of this subdivision, the term "one nonitemized price" does not 
175.31 	include a price that is separately identified by product on binding sales or other supporting 
175.32 	sales-related documentation made available to the customer in paper or electronic form 
175.33 	including, but not limited to an invoice, bill of sale, receipt, contract, service agreement, 
175.34 	lease agreement, periodic notice of rates and services, rate card, or price list.
176.1 	(d) A transaction that otherwise meets the definition of a bundled transaction is 
176.2 	not a bundled transaction if it is: 
176.3 	(1) the retail sale of tangible personal property and a service and the tangible 
176.4 	personal property is essential to the use of the service, and is provided exclusively in 
176.5 	connection with the service, and the true object of the transaction is the service; 
176.6 	(2) the retail sale of services if one service is provided that is essential to the use or 
176.7 	receipt of a second service and the first service is provided exclusively in connection with 
176.8 	the second service and the true object of the transaction is the second service; 
176.9 	(3) a transaction that includes taxable products and nontaxable products and the 
176.10 	purchase price or sales price of the taxable products is de minimis; or 
176.11 	(4) the retail sale of exempt tangible personal property and taxable tangible personal 
176.12 	property if:
176.13 	(i) the transaction includes food and food ingredients, drugs, durable medical 
176.14 	equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices, 
176.15 	or medical supplies; and
176.16 	(ii) the seller's purchase price or sales price of the taxable tangible personal property 
176.17 	is 50 percent or less of the total purchase price or sales price of the bundled tangible 
176.18 	personal property. Sellers must not use a combination of the purchase price and sales 
176.19 	price of the tangible personal property when making the 50 percent determination for 
176.20 	a transaction.
176.21 	(e) For purposes of this subdivision, "purchase price" means the measure subject to 
176.22 	use tax on purchases made by the seller, and "de minimis" means that the seller's purchase 
176.23 	price or sales price of the taxable products is ten percent or less of the total purchase 
176.24 	price or sales price of the bundled products. Sellers shall use either the purchase price 
176.25 	or the sales price of the products to determine if the taxable products are de minimis. 
176.26 	Sellers must not use a combination of the purchase price and sales price of the products 
176.27 	to determine if the taxable products are de minimis. Sellers shall use the full term of a 
176.28 	service contract to determine if the taxable products are de minimis.

176.29 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
176.30 	made after December 31, 2007.

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

177.3 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
177.4 	made after December 31, 2007.

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

177.11 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
177.12 	made after December 31, 2007.

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

177.18 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
177.19 	made after December 31, 2007.

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

177.24 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
177.25 	made after December 31, 2007.

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

178.3 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
178.4 	made after December 31, 2007.

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

178.11 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
178.12 	made after December 31, 2007.

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

178.18 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
178.19 	made after December 31, 2007.

178.20 	Sec. 18. Minnesota Statutes 2006, section 297A.61, is amended by adding a 
178.21 	subdivision to read:
178.22 		Subd. 46.Fur clothing. "Fur clothing" means human wearing apparel that is 
178.23 	required by the Federal Fur Products Labeling Act, United States Code, title 15, section 
178.24 	69, to be labeled as a fur product, and the value of the fur components in the product 
178.25 	is more than three times the value of the next most valuable tangible component. For 
178.26 	purposes of this subdivision, "fur" means any animal skin or part of an animal skin with 
178.27 	hair, fleece, or fur fibers attached to it, either in its raw or processed state, but does not 
178.28 	include animal skins that have been converted into leather or suede, or from which the 
178.29 	hair, fleece, or fur fiber has been completely removed in processing the skins.

178.30 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
178.31 	June 30, 2008.

179.1 	Sec. 19. Minnesota Statutes 2006, section 297A.63, subdivision 1, is amended to read:
179.2 		Subdivision 1.Use of tangible personal property or taxable services. (a) For the 
179.3 	privilege of using, storing, distributing, or consuming in Minnesota tangible personal 
179.4 	property or taxable services purchased for use, storage, distribution, or consumption in 
179.5 	this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the 
179.6 	purchase price of retail sales of the tangible personal property or taxable services at the 
179.7 	rate of tax imposed under section 297A.62. A person that purchases property from a 
179.8 	Minnesota retailer and returns the tangible personal property to a point within Minnesota, 
179.9 	except in the course of interstate commerce, after it was delivered outside of Minnesota, 
179.10 	is subject to the use tax. 
179.11 	(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
179.12 	was paid on the sales price of the tangible personal property or taxable services. 
179.13 	(c) No tax is imposed under paragraph (a) if the purchase meets the requirements for 
179.14 	exemption under section 297A.67, subdivision 21. 
179.15 	(d) When a transaction otherwise meets the definition of a bundled transaction, but 
179.16 	is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and 
179.17 	the seller's purchase price of the taxable product or taxable tangible personal property is 
179.18 	equal to or greater than $100, then use tax is imposed on the purchase price of the taxable 
179.19 	product or taxable personal property. For purposes of this paragraph, "purchase price" 
179.20 	means the measure subject to use tax on purchases made by the seller.

179.21 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
179.22 	made after December 31, 2007.

179.23 	Sec. 20. Minnesota Statutes 2006, section 297A.665, is amended to read:
179.24 	297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
179.25 	(a) For the purpose of the proper administration of this chapter and to prevent 
179.26 	evasion of the tax, until the contrary is established, it is presumed that:
179.27 	(1) all gross receipts are subject to the tax; and
179.28 	(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 
179.29 	in Minnesota.
179.30 	(b) The burden of proving that a sale is not a taxable retail sale is on the seller. 
179.31 	However, the seller may take from the purchaser at the time of the sale a fully completed 
179.32 	exemption certificate which conclusively relieves the seller from collecting and remitting 
179.33 	the tax. This However, a seller is relieved of liability if:
180.1 	(1) the seller obtains a fully completed exemption certificate or all the relevant 
180.2 	information required by section 297A.72, subdivision 2, at the time of the sale or within 
180.3 	90 days after the date of the sale; or
180.4 	(2) if the seller has not obtained a fully completed exemption certificate or all the 
180.5 	relevant information required by section 297A.72, subdivision 2, within the time provided 
180.6 	in clause (1), within 120 days after a request for substantiation by the commissioner, 
180.7 	the seller either:
180.8 	(i) obtains in good faith a fully completed exemption certificate or all the relevant 
180.9 	information required by section 297A.72, subdivision 2, from the purchaser; or
180.10 	(ii) proves by other means that the transaction was not subject to tax.
180.11 	(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
180.12 	(1) fraudulently fails to collect the tax; or 
180.13 	(2) solicits purchasers to participate in the unlawful claim of an exemption. If a 
180.14 	seller claiming that certain sales are exempt is not in possession of the required exemption 
180.15 	certificates within 60 days after receiving written notice from the commissioner that the 
180.16 	certificates are required, deductions claimed by the seller that required delivery of the 
180.17 	certificates must be disallowed. If the certificates are delivered to the commissioner within 
180.18 	the 60-day period, the commissioner may verify the reason or basis for the exemption 
180.19 	claimed in the certificates before allowing any deductions. A deduction must not be 
180.20 	granted on the basis of certificates delivered to the commissioner after the 60-day period.
180.21 	(c) (d) A purchaser of tangible personal property or any items listed in section 
180.22 	297A.63 that are shipped or brought to Minnesota by the purchaser has the burden 
180.23 	of proving that the property was not purchased from a retailer for storage, use, or 
180.24 	consumption in Minnesota. 

180.25 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
180.26 	made after December 31, 2007.

180.27 	Sec. 21. Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read:
180.28 		Subd. 3.Defined telecommunications services sourcing. The sale of the following 
180.29 	telecommunication services shall be sourced to each level of taxing jurisdiction in 
180.30 	paragraphs (a) to (d).
180.31 	(a) A sale of mobile telecommunications services, other than air-to-ground 
180.32 	radiotelephone service and prepaid calling service, is sourced to the customer's place of 
180.33 	primary use as required by the Mobile Telecommunications Sourcing Act.
180.34 	(b) A sale of postpaid calling service is sourced to the origination point of the 
180.35 	telecommunications signal as first identified by either:
181.1 	(1) the seller's telecommunications system; or
181.2 	(2) information received by the seller from its service provider, where the system 
181.3 	used to transport such signals is not that of the seller.
181.4 	(c) A sale of prepaid calling service or prepaid wireless calling service is sourced in 
181.5 	accordance with section 297A.668, subdivision 2. However, in the case of a sale of mobile 
181.6 	telecommunications service that is a prepaid telecommunicationswireless calling service, 
181.7 	the rule provided in section 297A.668, subdivision 2, paragraph (f), shall include as an 
181.8 	option the location associated with the mobile telephone number. 
181.9 	(d) A sale of a private communication service is sourced as follows:
181.10 	(1) service for a separate charge related to a customer channel termination point is 
181.11 	sourced to each level of jurisdiction in which the customer channel termination point 
181.12 	is located;
181.13 	(2) service where all customer termination points are located entirely within one 
181.14 	jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer 
181.15 	channel termination points are located;
181.16 	(3) service for segments of a channel between two customer channel termination 
181.17 	points located in different jurisdictions and which segment of channel are separately 
181.18 	charged is sourced 50 percent in each level of jurisdiction in which the customer channel 
181.19 	termination points are located; and
181.20 	(4) service for segments of a channel located in more than one jurisdiction or 
181.21 	levels of jurisdiction and which segments are not separately billed is sourced in each 
181.22 	jurisdiction based on the percentage determined by dividing the number of customer 
181.23 	channel termination points in the jurisdiction by the total number of customer channel 
181.24 	termination points.

181.25 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
181.26 	made after December 31, 2007.

181.27 	Sec. 22. Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to 
181.28 	read:
181.29 		Subd. 13.Postpaid calling service. "Postpaid calling service," for purposes of 
181.30 	this section, means the telecommunications service obtained by making a payment 
181.31 	on a call-by-call basis either through the use of a credit card or payment mechanism 
181.32 	such as a bank card, travel card, credit card, or debit card, or by a charge made to 
181.33 	a telephone number that is not associated with the origination or termination of the 
181.34 	telecommunications service. A postpaid calling service includes a telecommunications 
182.1 	service, except a prepaid wireless calling service, that would be a prepaid calling service 
182.2 	except it is not exclusively a telecommunication service.

182.3 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
182.4 	made after December 31, 2007.

182.5 	Sec. 23. Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to 
182.6 	read:
182.7 		Subd. 14.Prepaid calling service. "Prepaid calling service," for purposes of this 
182.8 	section, means a telecommunications service that:
182.9 	(1) provides the right to access exclusively telecommunications services, which;
182.10 	(2) must be paid for in advance and which;
182.11 	(3) enables the origination of calls using an access number or authorization code, 
182.12 	whether manually or electronically dialed,; and that
182.13 	(4) is sold in predetermined units or dollars of which the number declines with 
182.14 	use in a known amount.

182.15 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
182.16 	made after December 31, 2007.

182.17 	Sec. 24. Minnesota Statutes 2006, section 297A.669, is amended by adding a 
182.18 	subdivision to read:
182.19 		Subd. 14a.Prepaid wireless calling service. "Prepaid wireless calling service," for 
182.20 	purposes of this section, means a telecommunications service that: 
182.21 	(1) provides the right to utilize mobile wireless service as well as other 
182.22 	nontelecommunications services, including the download of digital products delivered 
182.23 	electronically, content, and ancillary services; 
182.24 	(2) must be paid for in advance; and 
182.25 	(3) is sold in predetermined units or dollars of which the number declines with 
182.26 	use in a known amount.

182.27 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
182.28 	made after December 31, 2007.

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

183.1 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
183.2 	made after December 31, 2007.

183.3 	Sec. 26. Minnesota Statutes 2006, section 297A.67, subdivision 7, is amended to read:
183.4 		Subd. 7.Drugs; medical devices. (a) Sales of the following drugs and medical 
183.5 	devices are exempt:
183.6 	(1) drugs for human use, including over-the-counter drugs;
183.7 	(2) single-use finger-pricking devices for the extraction of blood and other single-use 
183.8 	devices and single-use diagnostic agents used in diagnosing, monitoring, or treating 
183.9 	diabetes;
183.10 	(3) insulin and medical oxygen for human use, regardless of whether prescribed 
183.11 	or sold over the counter;
183.12 	(4) prosthetic devices;
183.13 	(5) durable medical equipment for home use only;
183.14 	(6) mobility enhancing equipment; and
183.15 	(7) prescription corrective eyeglasses.; and
183.16 	(8) kidney dialysis equipment, including repair and replacement parts.
183.17 	(b) For purposes of this subdivision:
183.18 	(1) "Drug" means a compound, substance, or preparation, and any component of 
183.19 	a compound, substance, or preparation, other than food and food ingredients, dietary 
183.20 	supplements, or alcoholic beverages that is:
183.21 	(i) recognized in the official United States Pharmacopoeia, official Homeopathic 
183.22 	Pharmacopoeia of the United States, or official National Formulary, and supplement 
183.23 	to any of them;
183.24 	(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention 
183.25 	of disease; or
183.26 	(iii) intended to affect the structure or any function of the body.
183.27 	(2) "Durable medical equipment" means equipment, including repair and 
183.28 	replacement parts, but not including mobility enhancing equipment, that:
183.29 	(i) can withstand repeated use;
183.30 	(ii) is primarily and customarily used to serve a medical purpose;
183.31 	(iii) generally is not useful to a person in the absence of illness or injury; and
183.32 	(iv) is not worn in or on the body.
183.33 	(3) "Mobility enhancing equipment" means equipment, including repair and 
183.34 	replacement parts, but not including durable medical equipment, that:
184.1 	(i) is primarily and customarily used to provide or increase the ability to move from 
184.2 	one place to another and that is appropriate for use either in a home or a motor vehicle;
184.3 	(ii) is not generally used by persons with normal mobility; and
184.4 	(iii) does not include any motor vehicle or equipment on a motor vehicle normally 
184.5 	provided by a motor vehicle manufacturer.
184.6 	(4) "Over-the-counter drug" means a drug that contains a label that identifies the 
184.7 	product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The 
184.8 	label must include a "drug facts" panel or a statement of the active ingredients with a list of 
184.9 	those ingredients contained in the compound, substance, or preparation. Over-the-counter 
184.10 	drugs do not include grooming and hygiene products, regardless of whether they otherwise 
184.11 	meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions, 
184.12 	shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
184.13 	(5) "Prescribed" and "prescription" means a direction in the form of an order, 
184.14 	formula, or recipe issued in any form of oral, written, electronic, or other means of 
184.15 	transmission by a duly licensed health care professional.
184.16 	(6) "Prosthetic device" means a replacement, corrective, or supportive device, 
184.17 	including repair and replacement parts, worn on or in the body to:
184.18 	(i) artificially replace a missing portion of the body;
184.19 	(ii) prevent or correct physical deformity or malfunction; or
184.20 	(iii) support a weak or deformed portion of the body.
184.21 	Prosthetic device does not include corrective eyeglasses.
184.22 	(7) "Kidney dialysis equipment" means equipment that:
184.23 	(i) is used to remove waste products that build up in the blood when the kidneys are 
184.24 	not able to do so on their own; and
184.25 	(ii) can withstand repeated use, including multiple use by a single patient. 

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

184.27 	Sec. 27. Minnesota Statutes 2006, section 297A.67, subdivision 8, is amended to read:
184.28 		Subd. 8.Clothing. (a) Clothing is exempt. For purposes of this subdivision, 
184.29 	"clothing" means all human wearing apparel suitable for general use.
184.30 	(b) Clothing includes, but is not limited to, aprons, household and shop; athletic 
184.31 	supporters; baby receiving blankets; bathing suits and caps; beach capes and coats; belts 
184.32 	and suspenders; boots; coats and jackets; costumes; children and adult diapers, including 
184.33 	disposable; ear muffs; footlets; formal wear; garters and garter belts; girdles; gloves and 
184.34 	mittens for general use; hats and caps; hosiery; insoles for shoes; lab coats; neckties; 
185.1 	overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes and shoe laces; 
185.2 	slippers; sneakers; socks and stockings; steel-toed boots; underwear; uniforms, athletic 
185.3 	and nonathletic; and wedding apparel.
185.4 	(c) Clothing does not include the following:
185.5 	(1) belt buckles sold separately;
185.6 	(2) costume masks sold separately;
185.7 	(3) patches and emblems sold separately;
185.8 	(4) sewing equipment and supplies, including but not limited to, knitting needles, 
185.9 	patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles;
185.10 	(5) sewing materials that become part of clothing, including but not limited to, 
185.11 	buttons, fabric, lace, thread, yarn, and zippers;
185.12 	(6) clothing accessories or equipment;
185.13 	(7) sports or recreational equipment; and
185.14 	(8) protective equipment.
185.15 	Clothing also does not include apparel made from fur if a uniform definition of "apparel 
185.16 	made from fur" is developed by the member states of the Streamlined Sales and Use Tax 
185.17 	Agreement "fur clothing" as defined in section 297A.61, subdivision 46.
185.18 	For purposes of this subdivision, "clothing accessories or equipment" means 
185.19 	incidental items worn on the person or in conjunction with clothing. Clothing accessories 
185.20 	and equipment include, but are not limited to, briefcases; cosmetics; hair notions, including 
185.21 	barrettes, hair bows, and hairnets; handbags; handkerchiefs; jewelry; nonprescription 
185.22 	sunglasses; umbrellas; wallets; watches; and wigs and hairpieces. "Sports or recreational 
185.23 	equipment" means items designed for human use and worn in conjunction with an athletic 
185.24 	or recreational activity that are not suitable for general use. Sports and recreational 
185.25 	equipment includes, but is not limited to, ballet and tap shoes; cleated or spiked athletic 
185.26 	shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf 
185.27 	gloves; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller 
185.28 	and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins. 
185.29 	"Protective equipment" means items for human wear and designed as protection of the 
185.30 	wearer against injury or disease or as protection against damage or injury of other persons 
185.31 	or property but not suitable for general use. Protective equipment includes, but is not 
185.32 	limited to, breathing masks; clean room apparel and equipment; ear and hearing protectors; 
185.33 	face shields; finger guards; hard hats; helmets; paint or dust respirators; protective gloves; 
185.34 	safety glasses and goggles; safety belts; tool belts; and welders gloves and masks.

186.1 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
186.2 	June 30, 2008.

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

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

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

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

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

186.28 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
186.29 	after December 31, 2007.

186.30 	Sec. 31. Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read:
187.1 		Subd. 35.Telecommunications, cable television, and direct satellite equipment.
 187.2 	(a) Telecommunications, cable television, or direct satellite machinery and equipment 
187.3 	purchased or leased for use directly by a telecommunications, cable television, or 
187.4 	direct satellite service provider primarily in the provision of telecommunications, cable 
187.5 	television, or direct satellite services that are ultimately to be sold at retail are exempt, 
187.6 	regardless of whether purchased by the owner, a contractor, or a subcontractor.
187.7 	(b) For purposes of this subdivision, "telecommunications, cable television, or direct 
187.8 	satellite machinery and equipment" includes, but is not limited to:
187.9 	(1) machinery, equipment, and fixtures utilized in receiving, initiating, 
187.10 	amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring 
187.11 	telecommunications, cable television, or direct satellite services, such as computers, 
187.12 	transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items 
187.13 	performing comparable functions;
187.14 	(2) machinery, equipment, and fixtures used in the transportation of 
187.15 	telecommunications, cable television, or direct satellite services, radio transmitters and 
187.16 	receivers, satellite equipment, microwave equipment, and other transporting media, but 
187.17 	not wire, cable, fiber, poles, or conduit;
187.18 	(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or 
187.19 	enable the machinery in clauses (1) and (2) to accomplish its intended function, such as 
187.20 	auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning 
187.21 	equipment necessary to the operation of the telecommunications, cable television, or direct 
187.22 	satellite equipment; and software necessary to the operation of the telecommunications, 
187.23 	cable television, or direct satellite equipment; and
187.24 	(4) repair and replacement parts, including accessories, whether purchased as spare 
187.25 	parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
187.26 	(c) For purposes of this subdivision, "telecommunications services" means 
187.27 	telecommunications services as defined in section 297A.61, subdivision 24, paragraphs 
187.28 	(a), (c), and (d).

187.29 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
187.30 	made after December 31, 2007.

187.31 	Sec. 32. Minnesota Statutes 2006, section 297A.69, subdivision 2, is amended to read:
187.32 		Subd. 2.Materials consumed in agricultural production. Materials stored, used, 
187.33 	or consumed in agricultural production of personal property intended to be sold ultimately 
187.34 	at retail are exempt, whether or not the item becomes an ingredient or constituent part 
188.1 	of the property produced. Materials that qualify for this exemption include, but are not 
188.2 	limited to, the following:
188.3 	(1) feeds, seeds, trees, fertilizers, and herbicides, including when purchased for use 
188.4 	by farmers in a federal or state farm or conservation program;
188.5 	(2) materials sold to a veterinarian to be used or consumed in the care, medication, 
188.6 	and treatment of agricultural production animals and horses;
188.7 	(3) chemicals, including chemicals used for cleaning food processing machinery 
188.8 	and equipment;
188.9 	(4) materials, including chemicals, fuels, and electricity purchased by persons 
188.10 	engaged in agricultural production to treat waste generated as a result of the production 
188.11 	process;
188.12 	(5) fuels, electricity, gas, and steam used or consumed in the production process, 
188.13 	except that including electricity, gas, or steam used for space heating, cooling, or lighting 
188.14 	is exempt if (i) it is in excess of the average climate control or lighting for the production 
188.15 	area, and (ii) it is necessary to produce that particular product of facilities housing 
188.16 	agricultural animals;
188.17 	(6) petroleum products and lubricants;
188.18 	(7) packaging materials, including returnable containers used in packaging food and 
188.19 	beverage products; and
188.20 	(8) accessory tools and equipment that are separate detachable units with an ordinary 
188.21 	useful life of less than 12 months used in producing a direct effect upon the product.
188.22 	Machinery, equipment, implements, tools, accessories, appliances, contrivances, and 
188.23 	furniture and fixtures, except those listed in this clause are not included within this 
188.24 	exemption.

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

188.26 	Sec. 33. Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read:
188.27 		Subd. 7.Hospitals and outpatient surgical centers. (a) Sales, except for those 
188.28 	listed in paragraph (c), to a hospital are exempt, if the items purchased are used in 
188.29 	providing hospital services. For purposes of this subdivision, "hospital" means a hospital 
188.30 	organized and operated for charitable purposes within the meaning of section 501(c)(3) of 
188.31 	the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction, 
188.32 	and "hospital services" are services authorized or required to be performed by a "hospital" 
188.33 	under chapter 144.
189.1 	(b) Sales, except for those listed in paragraph (c), to an outpatient surgical center 
189.2 	are exempt, if the items purchased are used in providing outpatient surgical services. For 
189.3 	purposes of this subdivision, "outpatient surgical center" means an outpatient surgical 
189.4 	center organized and operated for charitable purposes within the meaning of section 
189.5 	501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other 
189.6 	jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means: 
189.7 	(1) services authorized or required to be performed by an outpatient surgical center under 
189.8 	chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means 
189.9 	health services furnished to a person whose medical condition is sufficiently acute to 
189.10 	require treatment unavailable through, or inappropriate to be provided by, a clinic or 
189.11 	physician's office, but not so acute as to require treatment in a hospital emergency room.
189.12 	(c) This exemption does not apply to the following products and services:
189.13 	(1) purchases made by a clinic, physician's office, or any other medical facility not 
189.14 	operating as a hospital or outpatient surgical center, even though the clinic, office, or 
189.15 	facility may be owned and operated by a hospital or outpatient surgical center;
189.16 	(2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and 
189.17 	prepared food, candy, and soft drinks; 
189.18 	(3) building and construction materials used in constructing buildings or facilities 
189.19 	that will not be used principally by the hospital or outpatient surgical center;
189.20 	(4) building, construction, or reconstruction materials purchased by a contractor 
189.21 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
189.22 	guaranteed maximum price covering both labor and materials for use in the construction, 
189.23 	alteration, or repair of a hospital or outpatient surgical center; or
189.24 	(5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5. 
189.25 	(d) A limited liability company also qualifies for exemption under this subdivision if 
189.26 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
189.27 	purchased qualify for the exemption.
189.28 	(e) An entity that contains both a hospital and a nonprofit unit may claim this 
189.29 	exemption on purchases made for both the hospital and nonprofit unit provided that:
189.30 	(1) the nonprofit unit would have qualified for exemption under subdivision 4; and
189.31 	(2) the items purchased would have qualified for the exemption.

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

189.33 	Sec. 34. Minnesota Statutes 2006, section 297A.70, is amended by adding a 
189.34 	subdivision to read:
190.1 		Subd. 18.Private communication service for State Lottery. Private 
190.2 	communication service, as defined in section 297A.61, subdivision 26, is exempt if the 
190.3 	service is purchased by an agent acting on behalf of the State Lottery.

190.4 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
190.5 	made after December 31, 2007.

190.6 	Sec. 35. Minnesota Statutes 2006, section 297A.72, is amended to read:
190.7 	297A.72 EXEMPTION CERTIFICATES.
190.8 		Subd. 2.Content and form of exemption certificate. An exemption certificate 
190.9 	must be substantially in the form prescribed by the commissioner and. To be fully 
190.10 	completed, the exemption certificate must:
190.11 	(1) either be signed by the purchaser if it is a paper form, or meet the requirements 
190.12 	of section 270C.304 if in electronic form;
190.13 	(2) bear the name and address of the purchaser; and
190.14 	(3) indicate the sales tax account identification number, if any, issued to the 
190.15 	purchaser. as follows:
190.16 	(i) the purchaser's Minnesota tax identification number;
190.17 	(ii) if the purchaser does not have a Minnesota tax identification number, then the 
190.18 	purchaser's state tax identification number that is issued by a state other than Minnesota, 
190.19 	and the name of that state;
190.20 	(iii) if the purchaser does not have an identification number described in either item 
190.21 	(i) or (ii), then the purchaser's federal Employer Identification Number; or
190.22 	(iv) if the purchaser does not have an identification number described in item (i), (ii), 
190.23 	or (iii), then either the number of the purchaser's state-issued driver's license, if valid in 
190.24 	the state of issue, or if the purchaser does not have a driver's license, a valid state-issued 
190.25 	identification number, and the name of the state of issue;
190.26 	(4) indicate the purchaser's type of business, using a business-type coding system 
190.27 	prescribed by the commissioner; and
190.28 	(5) indicate the reason for the exemption, using an exemption reason coding system 
190.29 	prescribed by the commissioner.
190.30 		Subd. 3.Purchaser requirement. A blanket exemption certificate is an exemption 
190.31 	certificate used for continuing future purchases. A purchaser using a blanket exemption 
190.32 	certificate must update it as needed to accurately reflect the information that is required 
190.33 	under subdivision 2.

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

191.1 	Sec. 36. [297A.8155] LIQUOR REPORTING REQUIREMENTS; PENALTY.
191.2 	A person who sells liquor, as defined in section 295.75, subdivision 1, in Minnesota 
191.3 	to a retailer that sells liquor, shall file with the commissioner an annual informational 
191.4 	report, in the form and manner prescribed by the commissioner, indicating the name, 
191.5 	address, and Minnesota business identification number of each retailer, and the total dollar 
191.6 	amount of liquor sold to each retailer in the previous calendar year. The report must be 
191.7 	filed on or before March 31 following the close of the calendar year. A person failing to file 
191.8 	this report is subject to the penalty imposed under Minnesota Statutes, section 289A.60.

191.9 	EFFECTIVE DATE. This section is effective for reports filed after December 
191.10 	31, 2008.

191.11 	Sec. 37. Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read:
191.12 		Subd. 2.Payment of tax. (a) Persons who are registered as retailers may make 
191.13 	purchases in this state or import property into this state without payment of the sales or use 
191.14 	taxes imposed by this chapter at the time of purchase or importation, if the purchases or 
191.15 	importations come within the provisions of this section and are made in strict compliance 
191.16 	with the rules of the commissioner.
191.17 	(b) A person described in subdivision 1 may elect to pay directly to the commissioner 
191.18 	any sales or use tax that may be due under this chapter for the acquisition of mobile 
191.19 	transportation equipment and parts and accessories attached or to be attached to such 
191.20 	equipment registered under section 168.187. 
191.21 	(c) The total cost of such equipment and parts and accessories attached or to be 
191.22 	attached to such equipment must be multiplied by a fraction. The numerator of the fraction 
191.23 	is the Minnesota mileage as reported on the current pro rata application provided for in 
191.24 	section 168.187 and the denominator of the fraction is the total mileage reported on the 
191.25 	current pro rata registration application. The amount so determined must be multiplied by 
191.26 	the tax rate to obtain the tax due. 
191.27 	In computing the tax under this section "sales price" does not include the amount of any 
191.28 	tax, except any manufacturer's or importer's excise tax, imposed by the United States 
191.29 	upon or with respect to retail sales, whethertaxes imposed directly on the retailer or the
191.30 	consumer that are separately stated on the invoice, bill of sale, or similar document given 
191.31 	to the purchaser.
191.32 	(d) A retailer covered by this section shall make a return and remit to the 
191.33 	commissioner the tax due for the preceding calendar month in accordance with sections 
191.34 	289A.11 and 289A.20, subdivision 4. 

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

192.2 	Sec. 38. Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read:
192.3 		Subdivision 1.Ordinary course of business. Except as provided in this section, 
192.4 	motor vehicles purchased solely for resale in the ordinary course of business by any motor 
192.5 	vehicle dealer, as defined in section 168.011, subdivision 21, who is licensed under section 
192.6 	168.27, subdivision 2 or 3, including vehicles which bear dealer plates as authorized by 
192.7 	section 168.27, subdivision 16, shall be exempt from the provisions of this chapter. 

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

192.9 	Sec. 39. Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read:
192.10 		Subd. 6.Sales tax exemption; equipment; construction materials. (a) The gross 
192.11 	receipts from the sale of machinery and equipment and repair parts are exempt from 
192.12 	taxation under chapter 297A, if the machinery and equipment:
192.13 	(1) are used in connection with a trade or business;
192.14 	(2) are placed in service in a city that is authorized to designate a zone under section 
192.15 	469.1731, regardless of whether the machinery and equipment are used in a zone; and
192.16 	(3) have a useful life of 12 months or more.
192.17 	(b) The gross receipts from the sale of construction materials are exempt, if they are 
192.18 	used to construct:
192.19 	(1) a facility for use in a trade or business located in a city that is authorized to 
192.20 	designate a zone under section 469.1731, regardless of whether the facility is located in a 
192.21 	zone; or
192.22 	(2) housing that is located in a zone.
192.23 	The exemptions under this paragraph apply regardless of whether the purchase is made by 
192.24 	the owner, the user, or a contractor.
192.25 	(c) A purchaser may claim an exemption under this subdivision for tax on the 
192.26 	purchases up to, but not exceeding:
192.27 	(1) the amount of the tax credit certificates received from the city, less
192.28 	(2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and 
192.29 	section 469.1732, subdivision 2.
192.30 	(d) The tax on sales of items exempted under this subdivision shall be imposed and 
192.31 	collected as if the applicable rate under section 297A.62 applied. Upon application by the 
192.32 	purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall 
192.33 	be paid to the purchaser. The application must include sufficient information to permit 
193.1 	the commissioner to verify the sales tax paid and the eligibility of the claimant to receive 
193.2 	the credit. No more than two applications for refunds may be filed under this subdivision 
193.3 	in a calendar year. The provisions of section 289A.40 apply to the refunds payable 
193.4 	under this subdivision. There is annually appropriated to the commissioner of revenue 
193.5 	the amount required to make the refunds, which must be deducted from the amount of 
193.6 	the city's allocation under section 469.169, subdivision 12, that remains available and its 
193.7 	limitation under section 469.1735. 
193.8 	(e) The amount to be refunded shall bear interest at the rate in section 270C.405
193.9 	from the date90 days after the refund claim is filed with the commissioner.

193.10 	EFFECTIVE DATE. This section is effective for refund claims filed after June 
193.11 	30, 2008.

193.12 	Sec. 40. FUR TAX PAYMENTS.
 193.13 	(a) Furriers must file the annual return, required by Minnesota Statutes, section 
193.14 	295.60, subdivision 5, which otherwise would be due March 15, 2009, by September 
193.15 	15, 2008.
193.16 	(b) If a furrier is required by Minnesota Statutes, section 295.60, subdivision 3, to 
193.17 	make installments of quarterly estimates, then the furrier shall make the last installment by 
193.18 	July 15, 2008.

193.19 	EFFECTIVE DATE. This section is effective July 1, 2008, for sales and purchases 
193.20 	made prior to July 1, 2008.

193.21 	Sec. 41. REPEALER.
 193.22 	(a) Minnesota Statutes 2006, section 295.60, is repealed.
193.23 	(b) Minnesota Statutes 2006, section 297A.61, subdivision 20, is repealed.
193.24 	(c) Minnesota Statutes 2006, section 297A.668, subdivision 6, is repealed.
193.25 	(d) Minnesota Statutes 2006, section 297A.67, subdivision 22, is repealed.

193.26 	EFFECTIVE DATE. Paragraph (a) of this section is effective for sales and 
193.27 	purchases made after June 30, 2008; paragraph (b) is effective retroactively for sales and 
193.28 	purchases made after December 31, 2007; and paragraphs (c) and (d) are effective the 
193.29 	day following final enactment.

194.1 	ARTICLE 13
194.2 	DEPARTMENT PROPERTY TAXES

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

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

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

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

194.18 	Sec. 3. Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read:
194.19 		Subd. 3.Report by airline company. Each year, on or before July 1, every airline 
194.20 	company engaged in air commerce in this state shall file with the commissioner on or 
194.21 	before the time fixed by the commissioner a report under oath setting forth specifically 
194.22 	the information prescribed by the commissioner to enable the commissioner to make the 
194.23 	assessment required in sections 270.071 to 270.079, unless the commissioner determines 
194.24 	that the airline company or person should be excluded from filing because its activities do 
194.25 	not constitute air commerce as defined herein. A penalty of five percent of the tax being 
194.26 	assessed is imposed on a late filing of the annual report. If the report is not filed within 
194.27 	30 days, an additional penalty of five percent of the assessed tax is imposed for each 
194.28 	additional 30 days or fraction of 30 days until the return is filed. The penalty imposed 
194.29 	under this section must not exceed the lesser of $25,000 or 25 percent of the assessed tax.

194.30 	EFFECTIVE DATE. This section is effective beginning January 2, 2008, for taxes 
194.31 	payable in 2009 and thereafter.

195.1 	Sec. 4. Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read:
195.2 		Subd. 6.Airflight property tax lien. The tax imposed under sections 270.071 to 
195.3 	270.079 is a lien on all real and personal property within this state of the airline company 
195.4 	in whose name the property is assessed. For purposes of sections 270C.62 and 270C.63, 
195.5 	the date of assessment for the tax imposed under sections 270.071 to 270.079 isThe lien 
195.6 	attaches on January 2 of each year for the taxes payable in the following year.

195.7 	EFFECTIVE DATE. This section is effective beginning January 2, 2008, for taxes 
195.8 	payable in 2009 and thereafter.

195.9 	Sec. 5. [270.0725] PENALTIES.
195.10 		Subdivision 1.Penalty for late filing. If an airline company does not file its annual 
195.11 	report by the date designated in section 270.072, subdivision 3, a penalty of five percent 
195.12 	of the tax being assessed is imposed on that company. On August 1, and on the first day 
195.13 	of each succeeding calendar month, an additional five percent penalty is imposed if the 
195.14 	report has not yet been filed. For each airline company, the penalties imposed under 
195.15 	this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of 
195.16 	the assessed tax. 
195.17 		Subd. 2.Penalty for repeated instances of late filing. If there is a pattern of 
195.18 	repeated failures by an airline company to timely file the report required by this section, a 
195.19 	penalty of ten percent of the tax being assessed is imposed on that company.
195.20 		Subd. 3.Penalty for frivolous report. If an airline company files a frivolous annual 
195.21 	report, a penalty of 25 percent of the tax being assessed is imposed on that company. A 
195.22 	frivolous report under this section is a report that would fulfill the criteria for a frivolous 
195.23 	return under section 289A.60, subdivision 7, notwithstanding the restriction in section 
195.24 	289A.01. In a proceeding involving the issue of whether or not an airline company is 
195.25 	liable for this penalty, the burden of proof is on the commissioner.
195.26 		Subd. 4.Penalty for fraudulent report. If an airline company files a false or 
195.27 	fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50 
195.28 	percent of the tax being assessed is imposed on that company.
195.29 		Subd. 5.Penalties added to tax. Penalties imposed under this section are added to 
195.30 	the tax and collected as a part of it.

195.31 	EFFECTIVE DATE. This section is effective for annual reports due after June 
195.32 	30, 2008.

195.33 	Sec. 6. [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS.
196.1 	In addition to the powers granted to the commissioner in this chapter, and in order to 
196.2 	determine net tax capacities and issue notices of net tax capacity and tax under sections 
196.3 	270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and 
196.4 	270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes 
196.5 	an airline company.

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

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

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

196.22 	Sec. 8. Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read:
196.23 		Subdivision 1.Appeal. Any airline company against which a tax has been imposed 
196.24 	under sections 270.071 to 270.079 shall have the right to appeal within 60 days from the 
196.25 	date of notice of the levy of the taxThe notices of net tax capacity and of tax required 
196.26 	under section 270.075, subdivision 2, are orders of the commissioner. These orders must 
196.27 	be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject 
196.28 	to administrative review under section 270C.35. These orders may be appealed to the Tax 
196.29 	Court in the manner provided by law in section 271.06 for appealing official orders of 
196.30 	the commissioner that do not deal with valuation, assessment, or taxation for property 
196.31 	tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter 
196.32 	278 do not apply. 

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

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

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

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

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

197.14 	Sec. 11. Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read:
197.15 		Subd. 2.Members. The board shall consist of nine members, who shall be 
197.16 	appointed by the commissioner of revenue, in the manner provided herein. The members 
197.17 	shall include:
197.18 	(1) two from the Department of Revenue;
197.19 	(2) two county assessors;
197.20 	(3) two assessors who are not county assessors, one of whom shall be a township 
197.21 	assessor;
197.22 	(4) one from the private appraisal field holding a professional appraisal designation; 
197.23 	and
197.24 	(5) two public members as defined by section 214.02. 
197.25 	The appointment provided in clauses (2) and (3) may be made from two listsa list 
197.26 	of not less than three names each, one submitted to the commissioner of revenue by the 
197.27 	Minnesota Association of Assessing Officers or its successor organization containing 
197.28 	recommendations for the appointment of appointees described in clause clauses (2), 
197.29 	and one by the Minnesota Association of Assessors, Inc. or its successor organization 
197.30 	containing recommendations for the appointees described in clause (3) and (3). The lists
197.31 	list must be submitted 30 days before the commencement of the term. In the case of a 
197.32 	vacancy, a new list shall be furnished to the commissioner by the respective organization
198.1 	immediately. A member of the board who is no longer engaged in the capacity listed 
198.2 	abovethat was the basis of appointment is disqualified from membership in the board.
198.3 	The board shall annually elect a chair and a secretaryvice-chair of the board.

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

198.5 	Sec. 12. Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read:
198.6 		Subd. 3.Licenses; refusal or revocation. The board may refuse to grant or renew, 
198.7 	or may suspend or revoke, a license of an applicant or licensee for any of the following 
198.8 	causes or acts:
198.9 	(1) failure to complete required training;
198.10 	(2) inefficiency or neglect of duty;
198.11 	(3) "unprofessional conduct" which means knowingly neglecting to perform a duty 
198.12 	required by law, or violation of the laws of this state relating to the assessment of property 
198.13 	or unlawfully exempting property or knowingly and intentionally listing property on the 
198.14 	tax list at substantially less than its market value or the level required by law in order to 
198.15 	gain favor or benefit, or knowingly and intentionally misclassifying property in order to 
198.16 	gain favor or benefit failure to comply with the Code of Conduct and Ethics for Licensed 
198.17 	Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session 
198.18 	chapter 3, article 1, section 38;
198.19 	(4) conviction of a crime involving moral turpitude; or
198.20 	(5) any other cause or act that in the board's opinion warrants a refusal to issue 
198.21 	or suspension or revocation of a license.

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

198.23 	Sec. 13. Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read:
198.24 		Subd. 5.Prohibited activity. An assessor, deputy assessor, assistant assessor, 
198.25 	appraiser,A licensed assessor or other person employed by an assessment jurisdiction 
198.26 	or contracting with an assessment jurisdiction for the purpose of valuing or classifying 
198.27 	property for property tax purposes is prohibited from making appraisals or analyses, 
198.28 	accepting an appraisal assignment, or preparing an appraisal report as defined in section 
198.29 	82B.02, subdivisions 2 to 5, on any property within the assessment jurisdiction where the 
198.30 	individual is employed or performing the duties of the assessor under contract. Violation 
198.31 	of this prohibition shall result in immediate revocation of the individual's license to assess 
198.32 	property for property tax purposes. This prohibition must not be construed to prohibit an 
198.33 	individual from carrying out any duties required for the proper assessment of property 
199.1 	for property tax purposes. If a formal resolution has been adopted by the governing body 
199.2 	of a governmental unit, which specifies the purposes for which such work will be done, 
199.3 	this prohibition does not apply to appraisal activities undertaken on behalf of and at the 
199.4 	request of the governmental unit that has employed or contracted with the individual. 
199.5 	The resolution may only allow appraisal activities which are related to condemnations, 
199.6 	right-of-way acquisitions, or special assessments. 

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

199.8 	Sec. 14. Minnesota Statutes 2006, section 270.44, is amended to read:
199.9 	270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.
199.10 	The board shall charge the following fees:
199.11 	(1) $105 for a senior accredited Minnesota assessor license;
199.12 	(2) $80 for an accredited Minnesota assessor license;
199.13 	(3) $65 for a certified Minnesota assessor specialist license;
199.14 	(4) $55 for a certified Minnesota assessor license;
199.15 	(5) $50 for a course challenge examination;
199.16 	(6)(5) $35 for grading a form appraisal;
199.17 	(7)(6) $60 for grading a narrative appraisal;
199.18 	(8)(7) $30 for a reinstatement fee;
199.19 	(9)(8) $25 for a record retention fee; and
199.20 	(10)(9) $20 for an educational transcript; and.
199.21 	(11) $30 for all retests of board-sponsored educational courses.

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

199.23 	Sec. 15. Minnesota Statutes 2006, section 270.45, is amended to read:
199.24 	270.45 DISPOSITION OF FEES.
199.25 	All fees so established and collected shall be paid to the commissioner of finance for 
199.26 	deposit in the general fund. The expenses of carrying out the provisions of sections 270.41
199.27 	to 270.53 shall be paid from appropriations made to the board of Assessors. 

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

199.29 	Sec. 16. Minnesota Statutes 2006, section 270.46, is amended to read:
199.30 	270.46 TRAINING COURSES, ESTABLISHMENT; OTHER COURSES,
199.31 	REGULATION.
200.1 	The board shall establishreview and approve training courses on assessment 
200.2 	practices and shall review and approve courses on assessment practices, techniques of 
200.3 	assessment, and ethics offered by schools, colleges and,  universities as well as courses that 
200.4 	are offered by any units of government on techniques of assessment. Courses shall be 
200.5 	established in various places throughout the state and be offered on regular intervals, units 
200.6 	of government, and other entities.

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

200.8 	Sec. 17. Minnesota Statutes 2006, section 270.47, is amended to read:
200.9 	270.47 RULES.
200.10 	The board shall establish theadopt rules necessary to accomplish the purpose of 
200.11 	sectionsections 270.41 to 270.51, and shall establish criteria required of assessing officials 
200.12 	in the state. Separate criteria may be established depending upon the responsibilities of the 
200.13 	assessor. The board shall prepare and give examinations from time to time to determine 
200.14 	whether assessing officials possess the necessary qualifications for performing the 
200.15 	functions of the office. Such tests shall be given immediately upon completion of courses 
200.16 	required by the board, or to persons who already possess the requisite qualifications under 
200.17 	the rules of the board. An action of the board in refusing to grant or renew a license or in 
200.18 	suspending or revoking a license is subject to review in accordance with chapter 14.

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

200.20 	Sec. 18. Minnesota Statutes 2006, section 270.48, is amended to read:
200.21 	270.48 LICENSURE OF QUALIFIED PERSONS.
200.22 	The board shall may license persons as possessing the necessary qualifications of an 
200.23 	assessing official. Different levels of licensure may be established as to classes of property 
200.24 	which assessors may be certified to assess at the discretion of the board. Every person, 
200.25 	except a local or county assessor, regularly employed by the assessor to assist in making 
200.26 	decisions regarding valuing and classifying property for assessment purposes shall be 
200.27 	required tomust become licensed within three years of the date of employment. Licensure 
200.28 	shall be required for local and county assessors as otherwise provided in sections 270.41
200.29 	to 270.53 270.50 and 273.061, and rules adopted by the board. 

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

201.1 	Sec. 19. Minnesota Statutes 2006, section 270.50, is amended to read:
201.2 	270.50 EMPLOYMENT OF LICENSED ASSESSORS.
201.3 	No assessor shall be employed who has not been licensed as qualified by the board, 
201.4 	provided the time to comply may be extended after application to the board upon a 
201.5 	showing that licensed assessors are not available for employment. The board may license 
201.6 	that a county or local assessor who has not received the training, but possesses the 
201.7 	necessary qualifications for performing the functions of the office by the passage of an 
201.8 	approved examination or may waive the examination if such person has demonstrated 
201.9 	competence in performing the functions of the office for a period of time the board deems 
201.10 	reasonable. The county or local assessing district shall assume the cost of training of its 
201.11 	assessors in courses approved by the board for the purpose of obtaining the assessor's 
201.12 	license to the extent of course fees, mileage, meals and lodging, and recognized travel 
201.13 	expenses not paid by the state. If the governing body of any township or city fails to 
201.14 	employ an assessor as required by sections 270.41 to 270.53, the assessment shall be 
201.15 	made by the county assessor. 
201.16 	In the case of cities incorporated or townships organized after April 11, 1974, except 
201.17 	cities or towns located in Ramsey county or which have elected a county assessor system 
201.18 	in accordance with section 273.055, the board shall allow the city or town 90 days from 
201.19 	the date of incorporation or organization to employ a licensed assessor.

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

201.21 	Sec. 20. Minnesota Statutes 2006, section 270C.306, is amended to read:
201.22 	270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR 
201.23 	IDENTIFYING NUMBERS ON FORMS.
201.24 	Notwithstanding the provisions of any other law except section 272.115, the 
201.25 	commissioner may require that a form required to be filed with the commissioner include 
201.26 	the Social Security number, federal employer identification number, or Minnesota 
201.27 	taxpayer identification number of the taxpayer or applicant.

201.28 	EFFECTIVE DATE. This section is effective beginning after June 30, 2008.

201.29 	Sec. 21. Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read:
201.30 		Subdivision 1.Authority. (a) The commissioner may abate, reduce, or refund any 
201.31 	penalty or interest that is imposed by a law administered by the commissioner as a result 
201.32 	of the late payment of tax or late filing of a return, if the failure to timely pay the tax or 
202.1 	failure to timely file the return is due to reasonable cause, or if the taxpayer is located 
202.2 	in a presidentially declared disaster area.
202.3 	(b) The commissioner shall abate any part of a penalty or additional tax charge 
202.4 	under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 
202.5 	advice given to the taxpayer in writing by an employee of the department acting in 
202.6 	an official capacity, if the advice:
202.7 	(1) was reasonably relied on and was in response to a specific written request of the 
202.8 	taxpayer; and
202.9 	(2) was not the result of failure by the taxpayer to provide adequate or accurate 
202.10 	information.
202.11 	(c) The commissioner may abate a penalty imposed under section 270.0725, 
202.12 	subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline 
202.13 	company is located in a presidentially declared disaster area.

202.14 	EFFECTIVE DATE. This section is effective for penalties imposed after June 
202.15 	30, 2008.

202.16 	Sec. 22. Minnesota Statutes 2007 Supplement, section 272.02, subdivision 64, is 
202.17 	amended to read:
202.18 		Subd. 64.Job opportunity building zone property. (a) Improvements to real 
202.19 	property, and personal property, classified under section 273.13, subdivision 24, and 
202.20 	located within a job opportunity building zone, designated under section 469.314, are 
202.21 	exempt from ad valorem taxes levied under chapter 275.
202.22 	(b) Improvements to real property, and tangible personal property, of an agricultural 
202.23 	production facility located within an agricultural processing facility zone, designated 
202.24 	under section 469.314, is exempt from ad valorem taxes levied under chapter 275.
202.25 	(c) For property to qualify for exemption under paragraph (a), the occupant must be 
202.26 	a qualified business, as defined in section 469.310.
202.27 	(d) The exemption applies beginning for the first assessment year after designation 
202.28 	of the job opportunity building zone by the commissioner of employment and economic 
202.29 	development. The exemption applies to each assessment year that begins during the 
202.30 	duration of the job opportunity building zone. To be exempt, the property must be 
202.31 	occupied by July 1 of the assessment year by a qualified business that has signed the 
202.32 	business subsidy agreement and relocation agreement, if required, by July 1 of the 
202.33 	assessment year. This exemption does not apply to:
202.34 	(1) the levy under section 475.61 or similar levy provisions under any other law to 
202.35 	pay general obligation bonds; or
203.1 	(2) other school district levies included in the debt service levy of the district 
203.2 	under section 123B.55.
203.3 	(e) Except for property of a business that was exempt under this subdivision for 
203.4 	taxes payable in 2008, a business must notify the county assessor in writing of eligibility 
203.5 	under this subdivision by July 1 in order to begin receiving the exemption under this 
203.6 	subdivision for taxes payable in the following year. The business need not annually notify 
203.7 	the county assessor of its continued exemption under this subdivision, but must notify the 
203.8 	county assessor immediately if the exemption no longer applies.

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

203.10 	Sec. 23. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
203.11 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 
203.12 	whenever any real estate is sold for a consideration in excess of $1,000, whether by 
203.13 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
203.14 	grantee or the legal agent of either shall file a certificate of value with the county auditor 
203.15 	in the county in which the property is located when the deed or other document is 
203.16 	presented for recording. Contract for deeds are subject to recording under section 507.235, 
203.17 	subdivision 1. Value shall, in the case of any deed not a gift, be the amount of the full 
203.18 	actual consideration thereof, paid or to be paid, including the amount of any lien or liens 
203.19 	assumed. The items and value of personal property transferred with the real property 
203.20 	must be listed and deducted from the sale price. The certificate of value shall include 
203.21 	the classification to which the property belongs for the purpose of determining the fair 
203.22 	market value of the property. The certificate shall include financing terms and conditions 
203.23 	of the sale which are necessary to determine the actual, present value of the sale price 
203.24 	for purposes of the sales ratio study. The commissioner of revenue shall promulgate 
203.25 	administrative rules specifying the financing terms and conditions which must be included 
203.26 	on the certificate. Pursuant to the authority of the commissioner of revenue in section 
203.27 	270C.306, The certificate of value must include the Social Security number or the federal 
203.28 	employer identification number of the grantors and grantees. However, a married person 
203.29 	who is not an owner of record and who is signing a conveyance instrument along with 
203.30 	the person's spouse solely to release and convey their marital interest, if any, in the real 
203.31 	property being conveyed is not a grantor for the purpose of the preceding sentence. A 
203.32 	statement in the deed that is substantially in the following form is sufficient to allow the 
203.33 	county auditor to accept a certificate for filing without the Social Security number of the 
203.34 	named spouse: " (Name) claims no ownership interest in the real property being conveyed 
203.35 	and is executing this instrument solely to release and convey a marital interest, if any, in 
204.1 	that real property." The identification numbers of the grantors and grantees are private 
204.2 	data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12, 
204.3 	but, notwithstanding that section, the private or nonpublic data may be disclosed to the 
204.4 	commissioner of revenue for purposes of tax administration. The information required to 
204.5 	be shown on the certificate of value is limited to the information required as of the date of 
204.6 	the acknowledgment on the deed or other document to be recorded.

204.7 	EFFECTIVE DATE. This section is effective for certificates of value filed after 
204.8 	June 30, 2008.

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

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

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

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

204.24 	Sec. 26. Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read:
204.25 		Subd. 3.Requirements. (a) Real estate consisting of ten acres or more or a nursery 
204.26 	or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section 273.13, 
204.27 	shall be entitled to valuation and tax deferment under this section only if it is primarily 
204.28 	devoted to agricultural use, and meets the qualifications in subdivision 6, and either: 
204.29 	(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the 
204.30 	owner or is real estate which is farmed with the real estate which contains the homestead 
204.31 	property; or
205.1 	(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling, 
205.2 	or any combination thereof, for a period of at least seven years prior to application for 
205.3 	benefits under the provisions of this section, or is real estate which is farmed with the 
205.4 	real estate which qualifies under this clause and is within four townships or cities or 
205.5 	combination thereof from the qualifying real estate; or
205.6 	(3) is the homestead of a shareholder in a family farm corporation as defined in 
205.7 	section 500.24, notwithstanding the fact that legal title to the real estate may be held in the 
205.8 	name of the family farm corporation; or 
205.9 	(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor, 
205.10 	partnership, or corporation which also owns the nursery or greenhouse operations on 
205.11 	the parcel or parcels.
205.12 	(b) Valuation of real estate under this section is limited to parcels the ownership of 
205.13 	which is in noncorporate entities except for:
205.14 	(1) family farm corporations organized pursuant to section 500.24; and 
205.15 	(2) corporations that derive 80 percent or more of their gross receipts from the 
205.16 	wholesale or retail sale of horticultural or nursery stock.
205.17 	Corporate entities who previously qualified for tax deferment pursuant to this section 
205.18 	and who continue to otherwise qualify under subdivisions 3 and 6 for a period of at least 
205.19 	three years following the effective date of Laws 1983, chapter 222, section 8, will not be 
205.20 	required to make payment of the previously deferred taxes, notwithstanding the provisions 
205.21 	of subdivision 9. Special assessments are payable at the end of the three-year period 
205.22 	or at time of sale, whichever comes first.
205.23 	(c) Land that previously qualified for tax deferment under this section and no longer 
205.24 	qualifies because it is not primarily used for agricultural purposes but would otherwise 
205.25 	qualify under subdivisions 3 and 6 for a period of at least three years will not be required 
205.26 	to make payment of the previously deferred taxes, notwithstanding the provisions of 
205.27 	subdivision 9. Sale of the land prior to the expiration of the three-year period requires 
205.28 	payment of deferred taxes as follows: sale in the year the land no longer qualifies requires 
205.29 	payment of the current year's deferred taxes plus payment of deferred taxes for the two 
205.30 	prior years; sale during the second year the land no longer qualifies requires payment of 
205.31 	the current year's deferred taxes plus payment of the deferred taxes for the prior year; and 
205.32 	sale during the third year the land no longer qualifies requires payment of the current 
205.33 	year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to 
205.34 	subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or 
205.35 	at the end of the three-year period, whichever comes first, all deferred special assessments 
205.36 	plus interest are payable in equal installments spread over the time remaining until the last 
206.1 	maturity date of the bonds issued to finance the improvement for which the assessments 
206.2 	were levied. If the bonds have matured, the deferred special assessments plus interest 
206.3 	are payable within 90 days. The provisions of section 429.061, subdivision 2, apply 
206.4 	to the collection of these installments. Penalties are not imposed on any such special 
206.5 	assessments if timely paid. 

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

206.7 	Sec. 27. Minnesota Statutes 2006, section 273.117, is amended to read:
206.8 	273.117 CONSERVATION PROPERTY TAX VALUATION.
206.9 	The value of real property which is subject to a conservation restriction or easement 
206.10 	shall be entitled to reduced valuation under this section may be adjusted by the assessor if:
206.11 	(a) The restriction or easement is for a conservation purpose as defined in section 
206.12 	84.64, subdivision 2, and is recorded on the property; 
206.13 	(b) The property is being used in accordance with the terms of the conservation 
206.14 	restriction or easement.

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

206.16 	Sec. 28. Minnesota Statutes 2006, section 273.121, is amended to read:
206.17 	273.121 VALUATION OF REAL PROPERTY, NOTICE.
206.18 	Any county assessor or city assessor having the powers of a county assessor, valuing 
206.19 	or classifying taxable real property shall in each year notify those persons whose property 
206.20 	is to be included on the assessment roll that year if the person's address is known to the 
206.21 	assessor, otherwise the occupant of the property. The notice shall be in writing and shall be 
206.22 	sent by ordinary mail at least ten days before the meeting of the local board of appeal and 
206.23 	equalization under section 274.01 or the review process established under section 274.13, 
206.24 	subdivision 1c. Upon written request by the owner of the property, the assessor may send 
206.25 	the notice in electronic form or by electronic mail instead of on paper or by ordinary mail. 
206.26 	It shall contain: (1) the market value for the current and prior assessment, (2) the limited 
206.27 	market value under section 273.11, subdivision 1a, for the current and prior assessment, 
206.28 	(3) the qualifying amount of any improvements under section 273.11, subdivision 16, 
206.29 	for the current assessment, (4) the market value subject to taxation after subtracting the 
206.30 	amount of any qualifying improvements for the current assessment, (5) the classification 
206.31 	of the property for the current and prior assessment, (6) a note that if the property is 
206.32 	homestead and at least 45 years old, improvements made to the property may be eligible 
206.33 	for a valuation exclusion under section 273.11, subdivision 16, (7) the assessor's office 
207.1 	address, and (8) the dates, places, and times set for the meetings of the local board of 
207.2 	appeal and equalization, the review process established under section 274.13, subdivision 
207.3 	1c, and the county board of appeal and equalization. The commissioner of revenue shall 
207.4 	specify the form of the notice. The assessor shall attach to the assessment roll a statement 
207.5 	that the notices required by this section have been mailed. Any assessor who is not 
207.6 	provided sufficient funds from the assessor's governing body to provide such notices, 
207.7 	may make application to the commissioner of revenue to finance such notices. The 
207.8 	commissioner of revenue shall conduct an investigation and, if satisfied that the assessor 
207.9 	does not have the necessary funds, issue a certification to the commissioner of finance 
207.10 	of the amount necessary to provide such notices. The commissioner of finance shall 
207.11 	issue a warrant for such amount and shall deduct such amount from any state payment 
207.12 	to such county or municipality. The necessary funds to make such payments are hereby 
207.13 	appropriated. Failure to receive the notice shall in no way affect the validity of the 
207.14 	assessment, the resulting tax, the procedures of any board of review or equalization, or 
207.15 	the enforcement of delinquent taxes by statutory means. 

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

207.17 	Sec. 29. Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:
207.18 		Subd. 13.Homestead application. (a) A person who meets the homestead 
207.19 	requirements under subdivision 1 must file a homestead application with the county 
207.20 	assessor to initially obtain homestead classification.
207.21 	(b) On or before January 2, 1993, each county assessor shall mail a homestead 
207.22 	application to the owner of each parcel of property within the county which was 
207.23 	classified as homestead for the 1992 assessment year. The format and contents of a 
207.24 	uniform homestead application shall be prescribed by the commissioner of revenue. The 
207.25 	commissioner shall consult with the chairs of the house and senate tax committees on the 
207.26 	contents of the homestead application form. The application must clearly inform the 
207.27 	taxpayer that this application must be signed by all owners who occupy the property or 
207.28 	by the qualifying relative and returned to the county assessor in order for the property to 
207.29 	continue receivingreceive homestead treatment. The envelope containing the homestead 
207.30 	application shall clearly identify its contents and alert the taxpayer of its necessary 
207.31 	immediate response.
207.32 	(c) Every property owner applying for homestead classification must furnish to the 
207.33 	county assessor the Social Security number of each occupant who is listed as an owner 
207.34 	of the property on the deed of record, the name and address of each owner who does not 
207.35 	occupy the property, and the name and Social Security number of each owner's spouse who 
208.1 	occupies the property. The application must be signed by each owner who occupies the 
208.2 	property and by each owner's spouse who occupies the property, or, in the case of property 
208.3 	that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
208.4 	If a property owner occupies a homestead, the property owner's spouse may not 
208.5 	claim another property as a homestead unless the property owner and the property owner's 
208.6 	spouse file with the assessor an affidavit or other proof required by the assessor stating that 
208.7 	the property qualifies as a homestead under subdivision 1, paragraph (e).
208.8 	Owners or spouses occupying residences owned by their spouses and previously 
208.9 	occupied with the other spouse, either of whom fail to include the other spouse's name 
208.10 	and Social Security number on the homestead application or provide the affidavits or 
208.11 	other proof requested, will be deemed to have elected to receive only partial homestead 
208.12 	treatment of their residence. The remainder of the residence will be classified as 
208.13 	nonhomestead residential. When an owner or spouse's name and Social Security number 
208.14 	appear on homestead applications for two separate residences and only one application is 
208.15 	signed, the owner or spouse will be deemed to have elected to homestead the residence for 
208.16 	which the application was signed.
208.17 	The Social Security numbers or affidavits or other proofs of the property owners 
208.18 	and spouses, and the federal income tax schedule F required by this section, are private 
208.19 	data on individuals as defined by section 13.02, subdivision 12, but, notwithstanding 
208.20 	that section, the private data may be disclosed to the commissioner of revenue, or, for 
208.21 	purposes of proceeding under the Revenue Recapture Act to recover personal property 
208.22 	taxes owing, to the county treasurer.
208.23 	(d) If residential real estate is occupied and used for purposes of a homestead by a 
208.24 	relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 
208.25 	order for the property to receive homestead status, a homestead application must be filed 
208.26 	with the assessor. The Social Security number of each relative and spouse of a relative
208.27 	occupying the property and the Social Security number of each owner who is related to an 
208.28 	occupant of the property shall be required on the homestead application filed under this 
208.29 	subdivision. If a different relative of the owner subsequently occupies the property, the 
208.30 	owner of the property must notify the assessor within 30 days of the change in occupancy. 
208.31 	The Social Security number of a relative or relative's spouse occupying the property 
208.32 	is private data on individuals as defined by section 13.02, subdivision 12, but may be 
208.33 	disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 
208.34 	Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
208.35 	(e) The homestead application shall also notify the property owners that the 
208.36 	application filed under this section will not be mailed annually and that if the property 
209.1 	is granted homestead status for the 1993 assessment, or any assessment year thereafter, 
209.2 	that same property shall remain classified as homestead until the property is sold or 
209.3 	transferred to another person, or the owners, the spouse of the owner, or the relatives no 
209.4 	longer use the property as their homestead. Upon the sale or transfer of the homestead 
209.5 	property, a certificate of value must be timely filed with the county auditor as provided 
209.6 	under section 272.115. Failure to notify the assessor within 30 days that the property has 
209.7 	been sold, transferred, or that the owner, the spouse of the owner, or the relative is no 
209.8 	longer occupying the property as a homestead, shall result in the penalty provided under 
209.9 	this subdivision and the property will lose its current homestead status.
209.10 	(f) If the homestead application is not returned within 30 days, the county will send a 
209.11 	second application to the present owners of record. The notice of proposed property taxes 
209.12 	prepared under section 275.065, subdivision 3, shall reflect the property's classification. 
209.13 	Beginning with assessment year 1993 for all properties, If a homestead application has 
209.14 	not been filed with the county by December 15, the assessor shall classify the property 
209.15 	as nonhomestead for the current assessment year for taxes payable in the following year, 
209.16 	provided that the owner may be entitled to receive the homestead classification by proper 
209.17 	application under section 375.192.
209.18 	(g) At the request of the commissioner, each county must give the commissioner a 
209.19 	list that includes the name and Social Security number of each occupant of homestead 
209.20 	property who is the property owner and the, property owner's spouse occupying the 
209.21 	property, or, qualifying relative of a property owner, applying for homestead classification 
209.22 	under this subdivision or a spouse of a qualifying relative. The commissioner shall use the 
209.23 	information provided on the lists as appropriate under the law, including for the detection 
209.24 	of improper claims by owners, or relatives of owners, under chapter 290A.
209.25 	(h) If the commissioner finds that a property owner may be claiming a fraudulent 
209.26 	homestead, the commissioner shall notify the appropriate counties. Within 90 days of 
209.27 	the notification, the county assessor shall investigate to determine if the homestead 
209.28 	classification was properly claimed. If the property owner does not qualify, the county 
209.29 	assessor shall notify the county auditor who will determine the amount of homestead 
209.30 	benefits that had been improperly allowed. For the purpose of this section, "homestead 
209.31 	benefits" means the tax reduction resulting from the classification as a homestead under 
209.32 	section 273.13, the taconite homestead credit under section 273.135, the residential 
209.33 	homestead and agricultural homestead credits under section 273.1384, and the 
209.34 	supplemental homestead credit under section 273.1391.
209.35 	The county auditor shall send a notice to the person who owned the affected property 
209.36 	at the time the homestead application related to the improper homestead was filed, 
210.1 	demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 
210.2 	of the homestead benefits. The person notified may appeal the county's determination 
210.3 	by serving copies of a petition for review with county officials as provided in section 
210.4 	278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 
210.5 	Court within 60 days of the date of the notice from the county. Procedurally, the appeal 
210.6 	is governed by the provisions in chapter 271 which apply to the appeal of a property tax 
210.7 	assessment or levy, but without requiring any prepayment of the amount in controversy. If 
210.8 	the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 
210.9 	has been filed, the county auditor shall certify the amount of taxes and penalty to the county 
210.10 	treasurer. The county treasurer will add interest to the unpaid homestead benefits and 
210.11 	penalty amounts at the rate provided in section 279.03 for real property taxes becoming 
210.12 	delinquent in the calendar year during which the amount remains unpaid. Interest may be 
210.13 	assessed for the period beginning 60 days after demand for payment was made.
210.14 	If the person notified is the current owner of the property, the treasurer may add the 
210.15 	total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 
210.16 	otherwise payable on the property by including the amounts on the property tax statements 
210.17 	under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 
210.18 	valorem taxes shall include interest accrued through December 31 of the year preceding 
210.19 	the taxes payable year for which the amounts are first added. These amounts, when added 
210.20 	to the property tax statement, become subject to all the laws for the enforcement of real or 
210.21 	personal property taxes for that year, and for any subsequent year.
210.22 	If the person notified is not the current owner of the property, the treasurer may 
210.23 	collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 
210.24 	the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 
210.25 	of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 
210.26 	tax obligations of the person who owned the property at the time the application related 
210.27 	to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 
210.28 	of personal liability for the homestead benefits, penalty, interest, and costs, and instead 
210.29 	extend those amounts on the tax lists against the property as provided in this paragraph 
210.30 	to the extent that the current owner agrees in writing. On all demands, billings, property 
210.31 	tax statements, and related correspondence, the county must list and state separately the 
210.32 	amounts of homestead benefits, penalty, interest and costs being demanded, billed or 
210.33 	assessed.
210.34 	(i) Any amount of homestead benefits recovered by the county from the property 
210.35 	owner shall be distributed to the county, city or town, and school district where the 
210.36 	property is located in the same proportion that each taxing district's levy was to the total 
211.1 	of the three taxing districts' levy for the current year. Any amount recovered attributable 
211.2 	to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 
211.3 	deposited in the taconite property tax relief account. Any amount recovered that is 
211.4 	attributable to supplemental homestead credit is to be transmitted to the commissioner of 
211.5 	revenue for deposit in the general fund of the state treasury. The total amount of penalty 
211.6 	collected must be deposited in the county general fund.
211.7 	(j) If a property owner has applied for more than one homestead and the county 
211.8 	assessors cannot determine which property should be classified as homestead, the county 
211.9 	assessors will refer the information to the commissioner. The commissioner shall make 
211.10 	the determination and notify the counties within 60 days.
211.11 	(k) In addition to lists of homestead properties, the commissioner may ask the 
211.12 	counties to furnish lists of all properties and the record owners. The Social Security 
211.13 	numbers and federal identification numbers that are maintained by a county or city 
211.14 	assessor for property tax administration purposes, and that may appear on the lists retain 
211.15 	their classification as private or nonpublic data; but may be viewed, accessed, and used by 
211.16 	the county auditor or treasurer of the same county for the limited purpose of assisting the 
211.17 	commissioner in the preparation of microdata samples under section 270C.12.
211.18 	(l) On or before April 30 each year beginning in 2007, each county must provide the 
211.19 	commissioner with the following data for each parcel of homestead property by electronic 
211.20 	means as defined in section 289A.02, subdivision 8:
211.21 	(i) the property identification number assigned to the parcel for purposes of taxes 
211.22 	payable in the current year;
211.23 	(ii) the name and Social Security number of each occupant of homestead property 
211.24 	who is the property owner and, property owner's spouse, as shown on the tax rolls for the 
211.25 	current and the prior assessment year qualifying relative of a property owner, or spouse 
211.26 	of a qualifying relative;
211.27 	(iii) the classification of the property under section 273.13 for taxes payable in the 
211.28 	current year and in the prior year;
211.29 	(iv) an indication of whether the property was classified as a homestead for taxes 
211.30 	payable in the current year or for taxes payable in the prior year because of occupancy by 
211.31 	a relative of the owner or by a spouse of a relative;
211.32 	(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
211.33 	current year and the prior year;
211.34 	(vi) the market value of improvements to the property first assessed for tax purposes 
211.35 	for taxes payable in the current year;
212.1 	(vii) the assessor's estimated market value assigned to the property for taxes payable 
212.2 	in the current year and the prior year;
212.3 	(viii) the taxable market value assigned to the property for taxes payable in the 
212.4 	current year and the prior year;
212.5 	(ix) whether there are delinquent property taxes owing on the homestead;
212.6 	(x) the unique taxing district in which the property is located; and
212.7 	(xi) such other information as the commissioner decides is necessary.
212.8 	The commissioner shall use the information provided on the lists as appropriate 
212.9 	under the law, including for the detection of improper claims by owners, or relatives 
212.10 	of owners, under chapter 290A.

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

212.12 	Sec. 30. Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read:
212.13 		Subd. 4.Disparity reduction credit. (a) Beginning with taxes payable in 1989, 
212.14 	class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1) 
212.15 	the property is located in a border city that has an enterprise zone designated pursuant 
212.16 	to section 469.168, subdivision 4; (2) the property is located in a city with a population 
212.17 	greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the 
212.18 	city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city 
212.19 	in another state; and (4) the adjacent city in the other state has a population of greater than 
212.20 	5,000 and less than 75,000 according to the 1980 decennial census. 
212.21 	(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 
212.22 	property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class 
212.23 	3b property to 2.3 percent of market value.
212.24 	(c) The county auditor shall annually certify the costs of the credits to the 
212.25 	Department of Revenue. The department shall reimburse local governments for the 
212.26 	property taxes foregone as the result of the credits in proportion to their total levies.

212.27 	EFFECTIVE DATE. This section is effective retroactively for taxes payable in 
212.28 	2001 and thereafter.

212.29 	Sec. 31. Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read:
212.30 		Subd. 2.Listing and assessment by commissioner. The personal property, 
212.31 	consisting of the pipeline system of mains, pipes, and equipment attached thereto, of 
212.32 	pipeline companies and others engaged in the operations or business of transporting 
212.33 	natural gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed 
213.1 	with and assessed by the commissioner of revenue and the values provided to the city 
213.2 	or county assessor by order. This subdivision shall not apply to the assessment of 
213.3 	the products transported through the pipelines nor to the lines of local commercial gas 
213.4 	companies engaged primarily in the business of distributing gas to consumers at retail nor 
213.5 	to pipelines used by the owner thereof to supply natural gas or other petroleum products 
213.6 	exclusively for such owner's own consumption and not for resale to others. If more than 
213.7 	85 percent of the natural gas or other petroleum products actually transported over the 
213.8 	pipeline is used for the owner's own consumption and not for resale to others, then this 
213.9 	subdivision shall not apply; provided, however, that in that event, the pipeline shall be 
213.10 	assessed in proportion to the percentage of gas actually transported over such pipeline that 
213.11 	is not used for the owner's own consumption. On or before June 30, the commissioner 
213.12 	shall certify to the auditor of each county, the amount of such personal property assessment 
213.13 	against each company in each district in which such property is located.

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

213.15 	Sec. 32. Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read:
213.16 		Subd. 2.Listing and assessment by commissioner. Transmission lines of less 
213.17 	than 69 kv, transmission lines of 69 kv and above located in an unorganized township, 
213.18 	and distribution lines, and equipment attached thereto, having a fixed situs outside the 
213.19 	corporate limits of cities except distribution lines taxed as provided in sections 273.40
213.20 	and 273.41, shall be listed with and assessed by the commissioner of revenue in the 
213.21 	county where situated and the values provided to the city or county assessor by order. 
213.22 	The commissioner shall assess such property at the percentage of market value fixed by 
213.23 	law; and, on or before June 30, shall certify to the auditor of each county in which such 
213.24 	property is located the amount of the assessment made against each company and person 
213.25 	owning such property. 

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

213.27 	Sec. 33. Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read:
213.28 		Subdivision 1.Report required. Every electric light, power, gas, water, express, 
213.29 	stage, and transportation company and pipeline doing business in Minnesota shall 
213.30 	annually file with the commissioner on or before March 31 a report under oath setting 
213.31 	forth the information prescribed by the commissioner to enable the commissioner to make 
213.32 	valuations, recommended valuations, and equalization required under sections 273.33, 
213.33 	273.35, 273.36, and273.37, and 273.3711. If all the required information is not available 
214.1 	on March 31, the company or pipeline shall file the information that is available on or 
214.2 	before March 31, and the balance of the information as soon as it becomes available. 

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

214.4 	Sec. 34. [273.3711] RECOMMENDED AND ORDERED VALUES.
214.5 	For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372, 
214.6 	all values not required to be listed and assessed by the commissioner of revenue are 
214.7 	recommended values.

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

214.9 	Sec. 35. Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read:
214.10 		Subdivision 1.Ordinary board; meetings, deadlines, grievances. (a) The town 
214.11 	board of a town, or the council or other governing body of a city, is the board of appeal 
214.12 	and equalization except (1) in cities whose charters provide for a board of equalization or 
214.13 	(2) in any city or town that has transferred its local board of review power and duties to 
214.14 	the county board as provided in subdivision 3. The county assessor shall fix a day and 
214.15 	time when the board or the board of equalization shall meet in the assessment districts 
214.16 	of the county. Notwithstanding any law or city charter to the contrary, a city board of 
214.17 	equalization shall be referred to as a board of appeal and equalization. On or before 
214.18 	February 15 of each year the assessor shall give written notice of the time to the city or 
214.19 	town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings 
214.20 	must be held between April 1 and May 31 each year. The clerk shall give published and 
214.21 	posted notice of the meeting at least ten days before the date of the meeting.
214.22 	The board shall meet at the office of the clerk to review the assessment and 
214.23 	classification of property in the town or city. No changes in valuation or classification 
214.24 	which are intended to correct errors in judgment by the county assessor may be made by 
214.25 	the county assessor after the board has adjourned in those cities or towns that hold a 
214.26 	local board of review; however, corrections of errors that are merely clerical in nature or 
214.27 	changes that extend homestead treatment to property are permitted after adjournment until 
214.28 	the tax extension date for that assessment year. The changes must be fully documented and 
214.29 	maintained in the assessor's office and must be available for review by any person. A copy 
214.30 	of the changes made during this period in those cities or towns that hold a local board of 
214.31 	review must be sent to the county board no later than December 31 of the assessment year.
214.32 	(b) The board shall determine whether the taxable property in the town or city has 
214.33 	been properly placed on the list and properly valued by the assessor. If real or personal 
215.1 	property has been omitted, the board shall place it on the list with its market value, and 
215.2 	correct the assessment so that each tract or lot of real property, and each article, parcel, 
215.3 	or class of personal property, is entered on the assessment list at its market value. No 
215.4 	assessment of the property of any person may be raised unless the person has been 
215.5 	duly notified of the intent of the board to do so. On application of any person feeling 
215.6 	aggrieved, the board shall review the assessment or classification, or both, and correct 
215.7 	it as appears just. The board may not make an individual market value adjustment or 
215.8 	classification change that would benefit the property if the owner or other person having 
215.9 	control over the property has refused the assessor access to inspect the property and the 
215.10 	interior of any buildings or structures as provided in section 273.20. A board member 
215.11 	shall not participate in any actions of the board which result in market value adjustments 
215.12 	or classification changes to property owned by the board member, the spouse, parent, 
215.13 	stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, 
215.14 	or niece of a board member, or property in which a board member has a financial interest. 
215.15 	The relationship may be by blood or marriage.
215.16 	(c) A local board may reduce assessments upon petition of the taxpayer but the total 
215.17 	reductions must not reduce the aggregate assessment made by the county assessor by more 
215.18 	than one percent. If the total reductions would lower the aggregate assessments made by 
215.19 	the county assessor by more than one percent, none of the adjustments may be made. The 
215.20 	assessor shall correct any clerical errors or double assessments discovered by the board 
215.21 	without regard to the one percent limitation.
215.22 	(d) A local board does not have authority to grant an exemption or to order property 
215.23 	removed from the tax rolls.
215.24 	(e) A majority of the members may act at the meeting, and adjourn from day to day 
215.25 	until they finish hearing the cases presented. The assessor shall attend, with the assessment 
215.26 	books and papers, and take part in the proceedings, but must not vote. The county assessor, 
215.27 	or an assistant delegated by the county assessor shall attend the meetings. The board shall 
215.28 	list separately, on a form appended to the assessment book, all omitted property added 
215.29 	to the list by the board and all items of property increased or decreased, with the market 
215.30 	value of each item of property, added or changed by the board, placed opposite the item. 
215.31 	The county assessor shall enter all changes made by the board in the assessment book.
215.32 	(f) Except as provided in subdivision 3, if a person fails to appear in person, by 
215.33 	counsel, or by written communication before the board after being duly notified of the 
215.34 	board's intent to raise the assessment of the property, or if a person feeling aggrieved by an 
215.35 	assessment or classification fails to apply for a review of the assessment or classification, 
215.36 	the person may not appear before the county board of appeal and equalization for a review 
216.1 	of the assessment or classification. This paragraph does not apply if an assessment was 
216.2 	made after the local board meeting, as provided in section 273.01, or if the person can 
216.3 	establish not having received notice of market value at least five days before the local 
216.4 	board meeting.
216.5 	(g) The local board must complete its work and adjourn within 20 days from the 
216.6 	time of convening stated in the notice of the clerk, unless a longer period is approved by 
216.7 	the commissioner of revenue. No action taken after that date is valid. All complaints 
216.8 	about an assessment or classification made after the meeting of the board must be heard 
216.9 	and determined by the county board of equalization. A nonresident may, at any time, 
216.10 	before the meeting of the board file written objections to an assessment or classification 
216.11 	with the county assessor. The objections must be presented to the board at its meeting by 
216.12 	the county assessor for its consideration.

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

216.14 	Sec. 36. Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read:
216.15 		Subdivision 1.Members; meetings; rules for equalizing assessments. The county 
216.16 	commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be 
216.17 	present, the deputy county auditor, or, if there is no deputy, the court administrator of the 
216.18 	district court, shall form a board for the equalization of the assessment of the property 
216.19 	of the county, including the property of all cities whose charters provide for a board of 
216.20 	equalization. This board shall be referred to as the county board of appeal and equalization. 
216.21 	The board shall meet annually, on the date specified in section 274.14, at the office of the 
216.22 	auditor. Each member shall take an oath to fairly and impartially perform duties as a 
216.23 	member. Members shall not participate in any actions of the board which result in market 
216.24 	value adjustments or classification changes to property owned by the board member, the 
216.25 	spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, 
216.26 	aunt, nephew, or niece of a board member, or property in which a board member has a 
216.27 	financial interest. The relationship may be by blood or marriage. The board shall examine 
216.28 	and compare the returns of the assessment of property of the towns or districts, and 
216.29 	equalize them so that each tract or lot of real property and each article or class of personal 
216.30 	property is entered on the assessment list at its market value, subject to the following rules: 
216.31 	(1) The board shall raise the valuation of each tract or lot of real property which 
216.32 	in its opinion is returned below its market value to the sum believed to be its market 
216.33 	value. The board must first give notice of intention to raise the valuation to the person in 
216.34 	whose name it is assessed, if the person is a resident of the county. The notice must fix 
216.35 	a time and place for a hearing.
217.1 	(2) The board shall reduce the valuation of each tract or lot which in its opinion is 
217.2 	returned above its market value to the sum believed to be its market value.
217.3 	(3) The board shall raise the valuation of each class of personal property which 
217.4 	in its opinion is returned below its market value to the sum believed to be its market 
217.5 	value. It shall raise the aggregate value of the personal property of individuals, firms, or 
217.6 	corporations, when it believes that the aggregate valuation, as returned, is less than the 
217.7 	market value of the taxable personal property possessed by the individuals, firms, or 
217.8 	corporations, to the sum it believes to be the market value. The board must first give notice 
217.9 	to the persons of intention to do so. The notice must set a time and place for a hearing.
217.10 	(4) The board shall reduce the valuation of each class of personal property that 
217.11 	is returned above its market value to the sum it believes to be its market value. Upon 
217.12 	complaint of a party aggrieved, the board shall reduce the aggregate valuation of the 
217.13 	individual's personal property, or of any class of personal property for which the individual 
217.14 	is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes 
217.15 	was the market value of the individual's personal property of that class.
217.16 	(5) The board must not reduce the aggregate value of all the property of its county, as 
217.17 	submitted to the county board of equalization, with the additions made by the auditor under 
217.18 	this chapter, by more than one percent of its whole valuation. The board may raise the 
217.19 	aggregate valuation of real property, and of each class of personal property, of the county, 
217.20 	or of any town or district of the county, when it believes it is below the market value of the 
217.21 	property, or class of property, to the aggregate amount it believes to be its market value.
217.22 	(6) The board shall change the classification of any property which in its opinion 
217.23 	is not properly classified.
217.24 	(7) The board does not have the authority to grant an exemption or to order property 
217.25 	removed from the tax rolls.

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

217.27 	Sec. 37. [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION 
217.28 	COURSE AND MEETING REQUIREMENTS.
217.29 		Subdivision 1.Handbook for county boards. By no later than January 1, 2009, the 
217.30 	commissioner of revenue must develop a handbook detailing procedures, responsibilities, 
217.31 	and requirements for county boards of appeal and equalization. The handbook must 
217.32 	include, but need not be limited to, the role of the county board in the assessment process, 
217.33 	the legal and policy reasons for fair and impartial appeal and equalization hearings, county 
217.34 	board meeting procedures that foster fair and impartial assessment reviews and other best 
218.1 	practices recommendations, quorum requirements for county boards, and explanations 
218.2 	of alternate methods of appeal.
218.3 		Subd. 2.Appeals and equalization course. Beginning in 2009, and each year 
218.4 	thereafter, there must be at least one member at each meeting of a county board of appeal 
218.5 	and equalization who has attended an appeals and equalization course developed or 
218.6 	approved by the commissioner within the last four years, as certified by the commissioner. 
218.7 	The course may be offered in conjunction with a meeting of the Minnesota Association 
218.8 	of Assessment Officers. The course content must include, but need not be limited to, a 
218.9 	review of the handbook developed by the commissioner under subdivision 1.
218.10 		Subd. 3.Proof of compliance; transfer of duties. (a) Any county that 
218.11 	conducts county boards of appeal and equalization meetings must provide proof to the 
218.12 	commissioner by December 1, 2009, and each year thereafter, that it is in compliance 
218.13 	with the requirements of subdivision 2. Beginning in 2009, this notice must also verify 
218.14 	that there was a quorum of voting members at each meeting of the board of appeal and 
218.15 	equalization in the current year. A county that does not comply with these requirements 
218.16 	is deemed to have transferred its board of appeal and equalization powers to the special 
218.17 	board of equalization appointed pursuant to section 274.13, subdivision 2, beginning 
218.18 	with the following year's assessment and continuing unless the powers are reinstated 
218.19 	under paragraph (c). A county that does not comply with the requirements of subdivision 
218.20 	2 and has not appointed a special board of equalization shall appoint a special board of 
218.21 	equalization before the following year's assessment.
218.22 	(b) The county shall notify the taxpayers when the board of appeal and equalization 
218.23 	for a county has been transferred to the special board of equalization under this subdivision 
218.24 	and, prior to the meeting time of the special board of equalization, the county shall make 
218.25 	available to those taxpayers a procedure for a review of the assessments, including, but 
218.26 	not limited to, open book meetings. This alternate review process must take place in 
218.27 	April and May.
218.28 	(c) A county board whose powers are transferred to the special board of equalization 
218.29 	under this subdivision may be reinstated by resolution of the county board and upon proof 
218.30 	of compliance with the requirements of subdivision 2. The resolution and proofs must be 
218.31 	provided to the commissioner by December 1 in order to be effective for the following 
218.32 	year's assessment.

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

218.34 	Sec. 38. Minnesota Statutes 2007 Supplement, section 275.065, subdivision 3, is 
218.35 	amended to read:
219.1 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare 
219.2 	and the county treasurer shall deliver after November 10 and on or before November 24 
219.3 	each year, by first class mail to each taxpayer at the address listed on the county's current 
219.4 	year's assessment roll, a notice of proposed property taxes. Upon written request by 
219.5 	the taxpayer, the treasurer may send the notice in electronic form or by electronic mail 
219.6 	instead of on paper or by ordinary mail.
219.7 	(b) The commissioner of revenue shall prescribe the form of the notice.
219.8 	(c) The notice must inform taxpayers that it contains the amount of property taxes 
219.9 	each taxing authority proposes to collect for taxes payable the following year. In the case 
219.10 	of a town, or in the case of the state general tax, the final tax amount will be its proposed 
219.11 	tax. In the case of taxing authorities required to hold a public meeting under subdivision 6, 
219.12 	the notice must clearly state that each taxing authority, including regional library districts 
219.13 	established under section 134.201, and including the metropolitan taxing districts as 
219.14 	defined in paragraph (i), but excluding all other special taxing districts and towns, will 
219.15 	hold a public meeting to receive public testimony on the proposed budget and proposed or 
219.16 	final property tax levy, or, in case of a school district, on the current budget and proposed 
219.17 	property tax levy. It must clearly state the time and place of each taxing authority's 
219.18 	meeting, a telephone number for the taxing authority that taxpayers may call if they have 
219.19 	questions related to the notice, and an address where comments will be received by mail.
219.20 	(d) The notice must state for each parcel:
219.21 	(1) the market value of the property as determined under section 273.11, and used 
219.22 	for computing property taxes payable in the following year and for taxes payable in the 
219.23 	current year as each appears in the records of the county assessor on November 1 of the 
219.24 	current year; and, in the case of residential property, whether the property is classified as 
219.25 	homestead or nonhomestead. The notice must clearly inform taxpayers of the years to 
219.26 	which the market values apply and that the values are final values;
219.27 	(2) the items listed below, shown separately by county, city or town, and state general 
219.28 	tax, net of the residential and agricultural homestead credit under section 273.1384, voter 
219.29 	approved school levy, other local school levy, and the sum of the special taxing districts, 
219.30 	and as a total of all taxing authorities:
219.31 	(i) the actual tax for taxes payable in the current year; and
219.32 	(ii) the proposed tax amount.
219.33 	If the county levy under clause (2) includes an amount for a lake improvement 
219.34 	district as defined under sections 103B.501 to 103B.581, the amount attributable for that 
219.35 	purpose must be separately stated from the remaining county levy amount.
220.1 	In the case of a town or the state general tax, the final tax shall also be its proposed 
220.2 	tax unless the town changes its levy at a special town meeting under section 365.52. If a 
220.3 	school district has certified under section 126C.17, subdivision 9, that a referendum will 
220.4 	be held in the school district at the November general election, the county auditor must 
220.5 	note next to the school district's proposed amount that a referendum is pending and that, if 
220.6 	approved by the voters, the tax amount may be higher than shown on the notice. In the 
220.7 	case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be 
220.8 	listed separately from the remaining amount of the city's levy. In the case of the city of 
220.9 	St. Paul, the levy for the St. Paul Library Agency must be listed separately from the 
220.10 	remaining amount of the city's levy. In the case of Ramsey County, any amount levied 
220.11 	under section 134.07 may be listed separately from the remaining amount of the county's 
220.12 	levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax 
220.13 	under chapter 276A or 473F applies, the proposed tax levy on the captured value or the 
220.14 	proposed tax levy on the tax capacity subject to the areawide tax must each be stated 
220.15 	separately and not included in the sum of the special taxing districts; and
220.16 	(3) the increase or decrease between the total taxes payable in the current year and 
220.17 	the total proposed taxes, expressed as a percentage.
220.18 	For purposes of this section, the amount of the tax on homesteads qualifying under 
220.19 	the senior citizens' property tax deferral program under chapter 290B is the total amount 
220.20 	of property tax before subtraction of the deferred property tax amount.
220.21 	(e) The notice must clearly state that the proposed or final taxes do not include 
220.22 	the following:
220.23 	(1) special assessments;
220.24 	(2) levies approved by the voters after the date the proposed taxes are certified, 
220.25 	including bond referenda and school district levy referenda;
220.26 	(3) a levy limit increase approved by the voters by the first Tuesday after the first 
220.27 	Monday in November of the levy year as provided under section 275.73;
220.28 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster 
220.29 	occurring after the date the proposed taxes are certified;
220.30 	(5) amounts necessary to pay tort judgments against the taxing authority that become 
220.31 	final after the date the proposed taxes are certified; and
220.32 	(6) the contamination tax imposed on properties which received market value 
220.33 	reductions for contamination.
220.34 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or 
220.35 	the county treasurer to deliver the notice as required in this section does not invalidate the 
220.36 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
221.1 	(g) If the notice the taxpayer receives under this section lists the property as 
221.2 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
221.3 	applicable deadline, and the property qualifies for the homestead classification in that 
221.4 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
221.5 	in the following year.
221.6 	(h) In the case of class 4 residential property used as a residence for lease or rental 
221.7 	periods of 30 days or more, the taxpayer must either:
221.8 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 
221.9 	renter, or lessee; or
221.10 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
221.11 	The notice must be mailed or posted by the taxpayer by November 27 or within 
221.12 	three days of receipt of the notice, whichever is later. A taxpayer may notify the county 
221.13 	treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to 
221.14 	which the notice must be mailed in order to fulfill the requirements of this paragraph.
221.15 	(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special 
221.16 	taxing districts" means the following taxing districts in the seven-county metropolitan area 
221.17 	that levy a property tax for any of the specified purposes listed below:
221.18 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 
221.19 	473.446, 473.521, 473.547, or 473.834;
221.20 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 
221.21 	and
221.22 	(3) Metropolitan Mosquito Control Commission under section 473.711.
221.23 	For purposes of this section, any levies made by the regional rail authorities in the 
221.24 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
221.25 	398A shall be included with the appropriate county's levy and shall be discussed at that 
221.26 	county's public hearing.
221.27 	(j) The governing body of a county, city, or school district may, with the consent 
221.28 	of the county board, include supplemental information with the statement of proposed 
221.29 	property taxes about the impact of state aid increases or decreases on property tax 
221.30 	increases or decreases and on the level of services provided in the affected jurisdiction. 
221.31 	This supplemental information may include information for the following year, the current 
221.32 	year, and for as many consecutive preceding years as deemed appropriate by the governing 
221.33 	body of the county, city, or school district. It may include only information regarding:
221.34 	(1) the impact of inflation as measured by the implicit price deflator for state and 
221.35 	local government purchases;
221.36 	(2) population growth and decline;
222.1 	(3) state or federal government action; and
222.2 	(4) other financial factors that affect the level of property taxation and local services 
222.3 	that the governing body of the county, city, or school district may deem appropriate to 
222.4 	include.
222.5 	The information may be presented using tables, written narrative, and graphic 
222.6 	representations and may contain instruction toward further sources of information or 
222.7 	opportunity for comment.

222.8 	EFFECTIVE DATE. This section is effective for notices required in 2008 and 
222.9 	thereafter, for taxes payable in 2009 and thereafter.

222.10 	Sec. 39. Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read:
222.11 		Subd. 5a.Public advertisement. (a) A city that has a population of more than 
222.12 	2,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph 
222.13 	(i), a regional library district established under section   134.201, or school district shall 
222.14 	advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or, 
222.15 	in the case of a school district, to review its current budget and proposed property taxes 
222.16 	payable in the following year, at a public hearing, if a public hearing is required under 
222.17 	subdivision 6. The notice must be published not less than two business days nor more 
222.18 	than six business days before the hearing. 
222.19 	The advertisement must be at least one-eighth page in size of a standard-size or a 
222.20 	tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper 
222.21 	where legal notices and classified advertisements appear. The advertisement must be 
222.22 	published in an official newspaper of general circulation in the taxing authority. The 
222.23 	newspaper selected must be one of general interest and readership in the community, and 
222.24 	not one of limited subject matter. The advertisement must appear in a newspaper that is 
222.25 	published at least once per week.
222.26 	For purposes of this section, the metropolitan special taxing district's advertisement 
222.27 	must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer 
222.28 	Press.
222.29 	In addition to other requirements, a county and a city having a population of 
222.30 	more than 2,500 must show in the public advertisement required under this subdivision 
222.31 	the current local tax rate, the proposed local tax rate if no property tax levy increase 
222.32 	is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this 
222.33 	subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by 
222.34 	the city's or county's taxable net tax capacity.
223.1 	(b) Subject to the provisions of paragraph (g), the advertisement for school districts, 
223.2 	metropolitan special taxing districts, and regional library districts must be in the following 
223.3 	form, except that the notice for a school district may include references to the current 
223.4 	budget in regard to proposed property taxes.
223.5 	"NOTICE OF
223.6 	PROPOSED PROPERTY TAXES
223.7 	(School District/Metropolitan
223.8 	Special Taxing District/Regional
223.9 	Library District) of .........
223.10 	The governing body of ........ will soon hold budget hearings and vote on the property 
223.11 	taxes for (metropolitan special taxing district/regional library district services that will be 
223.12 	provided in (year)/school district services that will be provided in (year) and (year)).
223.13 	NOTICE OF PUBLIC HEARING:
223.14 	All concerned citizens are invited to attend a public hearing and express their opinions 
223.15 	on the proposed (school district/metropolitan special taxing district/regional library 
223.16 	district) budget and property taxes, or in the case of a school district, its current budget 
223.17 	and proposed property taxes, payable in the following year. The hearing will be held on 
223.18 	(Month/Day/Year) at (Time) at (Location, Address)."
223.19 	(c) Subject to the provisions of paragraph (g), the advertisement for cities and 
223.20 	counties must be in the following form.
223.21 	"NOTICE OF PROPOSED
223.22 	TOTAL BUDGET AND PROPERTY TAXES
223.23 	The (city/county) governing body or board of commissioners will hold a public hearing to 
223.24 	discuss the budget and to vote on the amount of property taxes to collect for services the 
223.25 	(city/county) will provide in (year).
223.26 	SPENDING: The total budget amounts below compare (city's/county's) (year) total actual 
223.27 	budget with the amount the (city/county) proposes to spend in (year).

223.28
223.29	(Year) Total Actual 
Budget
		Proposed (Year) 
Budget
		Change from 
(Year)-(Year)

223.30	$...........
		$...........
		.....%
	
223.31 	TAXES: The property tax amounts below compare that portion of the current budget 
223.32 	levied in property taxes in (city/county) for (year) with the property taxes the (city/county) 
223.33 	proposes to collect in (year).

223.34
223.35	(Year) Property 
Taxes
		Proposed (Year) 
Property Taxes
		Change from 
(Year)-(Year)

223.36	$...........
		$...........
		.....%
	
224.1 	LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax 
224.2 	levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.

224.3
224.4	(Year) Tax Rate
		(Year) Tax Rate if NO 
Levy Increase
		(Year) Proposed 
Tax Rate
	
224.5	...........
		...........
		.....
	
224.6 	ATTEND THE PUBLIC HEARING
224.7 	All (city/county) residents are invited to attend the public hearing of the (city/county) to 
224.8 	express your opinions on the budget and the proposed amount of (year) property taxes. 
224.9 	The hearing will be held on:
224.10 	(Month/Day/Year/Time)
224.11 	(Location/Address)
224.12 	If the discussion of the budget cannot be completed, a time and place for continuing the 
224.13 	discussion will be announced at the hearing. You are also invited to send your written 
224.14 	comments to:
224.15 	(City/County)
224.16 	(Location/Address)"
224.17 	(d) For purposes of this subdivision, the budget amounts listed on the advertisement 
224.18 	mean:
224.19 	(1) for cities, the total government fund expenditures, as defined by the state auditor 
224.20 	under section   471.6965, less any expenditures for improvements or services that are 
224.21 	specially assessed or charged under chapter 429, 430, 435, or the provisions of any other 
224.22 	law or charter; and 
224.23 	(2) for counties, the total government fund expenditures, as defined by the state 
224.24 	auditor under section   375.169, less any expenditures for direct payments to recipients or 
224.25 	providers for the human service aids listed below: 
224.26 	(i) Minnesota family investment program under chapters 256J and 256K;
224.27 	(ii) medical assistance under sections   256B.041, subdivision 5, and   256B.19, 
224.28 	subdivision 1; 
224.29 	(iii) general assistance medical care under section   256D.03, subdivision 6; 
224.30 	(iv) general assistance under section   256D.03, subdivision 2; 
224.31 	(v) emergency assistance under section   256J.48; 
224.32 	(vi) Minnesota supplemental aid under section   256D.36, subdivision 1; 
224.33 	(vii) preadmission screening under section   256B.0911, and alternative care grants 
224.34 	under section   256B.0913; 
224.35 	(viii) general assistance medical care claims processing, medical transportation and 
224.36 	related costs under section   256D.03, subdivision 4; 
225.1 	(ix) medical transportation and related costs under section   256B.0625, subdivisions 
225.2 	17 to 18a; 
225.3 	(x) group residential housing under section   256I.05, subdivision 8, transferred from 
225.4 	programs in clauses (iv) and (vi); or 
225.5 	(xi) any successor programs to those listed in clauses (i) to (x).
225.6 	(e) A city with a population of over 500 but not more than 2,500 that is required to 
225.7 	hold a public hearing under subdivision 6 must advertise by posted notice as defined in 
225.8 	section   645.12, subdivision 1. The advertisement must be posted at the time provided in 
225.9 	paragraph (a). It must be in the form required in paragraph (b). 
225.10 	(f) For purposes of this subdivision, the population of a city is the most recent 
225.11 	population as determined by the state demographer under section   4A.02. 
225.12 	(g) The commissioner of revenue, subject to the approval of the chairs of the house 
225.13 	and senate tax committees, shall annually prescribe the specific form and format of the 
225.14 	advertisements required under this subdivision, including such details as font size and 
225.15 	style, and spacing for the required items. The commissioner may prescribe alternate and 
225.16 	additional language for the advertisement for a taxing authority or for groups of taxing 
225.17 	authorities. At least two weeks before November 29 each year, the commissioner shall 
225.18 	provide a copy of the prescribed advertisements to the chairs of the committees of the 
225.19 	house of representatives and the senate with jurisdiction over taxes.

225.20 	EFFECTIVE DATE. This section is effective for advertisements in 2008 and 
225.21 	thereafter, for proposed taxes payable in 2009 and thereafter.

225.22 	Sec. 40. Minnesota Statutes 2006, section 275.067, is amended to read:
225.23 	275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE; 
225.24 	CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS.
225.25 	Special taxing districts as defined in section 275.066 organized on or before July 1 in 
225.26 	athe current calendar year may, and special taxing districts organized in a prior year that 
225.27 	have not previously certified a levy to the county auditor, are allowed to certify a levy to 
225.28 	the county auditor in that samethe current year for property taxes or special assessments 
225.29 	to be payable in the following calendar year to the extent that the special taxing district is 
225.30 	authorized by statute or special act to levy taxes or special assessments, but only if the 
225.31 	county auditor receives written notice from the district on or before July 1 of the current 
225.32 	year that the district may be certifying a levy in the current year, and the notice includes a 
225.33 	complete list or other description of the tax parcels in the district and a map showing the 
225.34 	boundaries of the district. Special taxing districts organized after July 1 in a calendar year 
226.1 	may not certify a levy of property taxes or special assessments to the county auditor under 
226.2 	the powers granted to them by statute or special act and subject to the requirements of 
226.3 	this section until the following calendar year. All special taxing districts must notify the 
226.4 	county auditor by July 1 in order for its boundaries for the levy to be certified that year 
226.5 	to be different than its boundaries for levies certified in prior years, and the notice must 
226.6 	include a complete list or other description of the tax parcels within the new boundaries 
226.7 	and a map showing the new boundaries of the district.

226.8 	EFFECTIVE DATE. This section is effective for taxes payable in 2009 and 
226.9 	thereafter.

226.10 	Sec. 41. Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision 
226.11 	to read:
226.12 		Subd. 5.Electronic tax statements. Upon written request by the owner of real 
226.13 	property located in the county, or by the owner's agent, a county may send tax statements 
226.14 	by electronic means instead of by mailing. For the purposes of the payment deadlines 
226.15 	specified in section 279.01, the postmark date on the envelope containing these property 
226.16 	tax statements is the date the statements were sent by electronic means.

226.17 	EFFECTIVE DATE. This section is effective for tax statements for taxes payable 
226.18 	in 2009 and thereafter.

226.19 	Sec. 42. Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read:
226.20 		Subd. 2.Partial payments. The county treasurer may accept payments of more or 
226.21 	less than the exact amount of a tax installment due. Payments must be applied first to the 
226.22 	oldest installment that is due but which has not been fully paid. If the accepted payment is 
226.23 	less than the amount due, payments must bethe payment is applied first to the penalty 
226.24 	accrued for the year the payment is made or the installment being paid. Acceptance of 
226.25 	partial payment of tax does not constitute a waiver of the minimum payment required as a 
226.26 	condition for filing an appeal under section 278.03 or any other law, nor does it affect the 
226.27 	order of payment of delinquent taxes under section 280.39. 

226.28 	EFFECTIVE DATE. This section is effective for payments made after the day 
226.29 	of final enactment.

226.30 	Sec. 43. Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read:
226.31 		Subdivision 1.Due dates; penalties. Except as provided in subdivision 3 or 4, on 
226.32 	May 16 or 21 days after the postmark date on the envelope containing the property tax 
227.1 	statement, whichever is later, a penalty shall accrueaccrues and thereafter beis charged 
227.2 	upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer. 
227.3 	The penalty shall beis at a rate of two percent on homestead property until May 31 and 
227.4 	four percent on June 1. The penalty on nonhomestead property shall beis at a rate of four 
227.5 	percent until May 31 and eight percent on June 1. This penalty shalldoes not accrue until 
227.6 	June 1 of each year, or 21 days after the postmark date on the envelope containing the 
227.7 	property tax statements, whichever is later, on commercial use real property used for 
227.8 	seasonal residential recreational purposes and classified as class 1c or 4c, and on other 
227.9 	commercial use real property classified as class 3a, provided that over 60 percent of the 
227.10 	gross income earned by the enterprise on the class 3a property is earned during the months 
227.11 	of May, June, July, and August. Any property owner of such class 3a property who pays
227.12 	In order for the first half of the tax due on theclass 3a property to be paid after May 15 
227.13 	and before June 1, or 21 days after the postmark date on the envelope containing the 
227.14 	property tax statement, whichever is later, shallwithout penalty, the owner of the property 
227.15 	must attach an affidavit to the payment attesting to compliance with the income provision 
227.16 	of this subdivision. Thereafter, for both homestead and nonhomestead property, on the 
227.17 	first day of each month beginning July 1, up to and including October 1 following, an 
227.18 	additional penalty of one percent for each month shall accrueaccrues and beis charged on 
227.19 	all such unpaid taxes provided that if the due date was extended beyond May 15 as the 
227.20 	result of any delay in mailing property tax statements no additional penalty shall accrue 
227.21 	if the tax is paid by the extended due date. If the tax is not paid by the extended due 
227.22 	date, then all penalties that would have accrued if the due date had been May 15 shall be 
227.23 	charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid 
227.24 	prior to May 16 or 21 days after the postmark date on the envelope containing the property 
227.25 	tax statement, whichever is later; and, if so paid, no penalty shall attach attaches; the 
227.26 	remaining one-half shallmay be paid at any time prior to October 16 following, without 
227.27 	penalty; but, if not so paid, then a penalty of two percent shall accrueaccrues thereon for 
227.28 	homestead property and a penalty of four percent on nonhomestead property. Thereafter, 
227.29 	for homestead property, on the first day of November an additional penalty of four percent 
227.30 	shall accrueaccrues and on the first day of December following, an additional penalty of 
227.31 	two percent shall accrueaccrues and beis charged on all such unpaid taxes. Thereafter, 
227.32 	for nonhomestead property, on the first day of November and December following, an 
227.33 	additional penalty of four percent for each month shall accrueaccrues and beis charged 
227.34 	on all such unpaid taxes. If one-half of such taxes shallare not be paid prior to May 16 or 
227.35 	21 days after the postmark date on the envelope containing the property tax statement, 
227.36 	whichever is later, the same may be paid at any time prior to October 16, with accrued 
228.1 	penalties to the date of payment added, and thereupon no penalty shall attachattaches to 
228.2 	the remaining one-half until October 16 following.
228.3 	This section applies to payment of personal property taxes assessed against 
228.4 	improvements to leased property, except as provided by section 277.01, subdivision 3. 
228.5 	A county may provide by resolution that in the case of a property owner that has 
228.6 	multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in 
228.7 	installments as provided in this subdivision.
228.8 	The county treasurer may accept payments of more or less than the exact amount of 
228.9 	a tax installment due. Payments must be applied first to the oldest installment that is due 
228.10 	but which has not been fully paid. If the accepted payment is less than the amount due, 
228.11 	payments must be applied first to the penalty accrued for the year the payment is made
228.12 	or the installment being paid. Acceptance of partial payment of tax does not constitute 
228.13 	a waiver of the minimum payment required as a condition for filing an appeal under 
228.14 	section 278.03 or any other law, nor does it affect the order of payment of delinquent 
228.15 	taxes under section 280.39. 

228.16 	EFFECTIVE DATE. This section is effective for payments made after the day 
228.17 	of final enactment.

228.18 	Sec. 44. Minnesota Statutes 2006, section 290B.03, subdivision 2, is amended to read:
228.19 		Subd. 2.Qualifying homestead; defined. Qualifying homestead property is defined 
228.20 	as the dwelling located in this state that is taxed as real property and that is occupied as the 
228.21 	homeowner's principal residence and so much of the land surrounding it as is reasonably 
228.22 	necessary for use of the dwelling as a home and any other property used for purposes of a 
228.23 	homestead as defined in section 273.13, subdivisions 22 and 23, but not to exceed one 
228.24 	acre. The homestead may be part of a multidwelling building and the land on which it is 
228.25 	built.  Property is not qualifying homestead property if a person or entity other than the 
228.26 	applicant or the applicant's spouse holds an interest in the property as the vendor under a 
228.27 	contract for deed or as a remainderperson.

228.28 	EFFECTIVE DATE. This section is effective retroactively for applications 
228.29 	submitted after December 31, 2007.

228.30 	Sec. 45. Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read:
228.31 		Subd. 3.Claimant. (a) "Claimant" means:
229.1 	(1) a person, as that term is defined in section 290.01, subdivision 2, who owns 
229.2 	forest land in Minnesota and files an application authorized by the Sustainable Forest 
229.3 	Incentive Act. Claimant includes;
229.4 	(2) a purchaser or grantee if property enrolled in the program was sold or transferred 
229.5 	after the original application was filed and prior to the annual incentive payment being 
229.6 	made.; or
229.7 	(3) an owner of land previously covered by an auxiliary forest contract that 
229.8 	automatically qualifies for inclusion in the Sustainable Forest Incentive Act program 
229.9 	pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
229.10 	 The purchaser or grantee must notify the commissioner in writing of the sale or 
229.11 	transfer of the property. Owners of land that qualifies for inclusion pursuant to section 
229.12 	88.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing 
229.13 	of the expiration of the auxiliary forest contract or land trade with a governmental unit and 
229.14 	submit an application to the commissioner by August 15 in order to be eligible to receive a 
229.15 	payment by October 1 of that same year. For purposes of section 290C.11, claimant also 
229.16 	includes any person bound by the covenant required in section 290C.04. 
229.17 	(b) No more than one claimant is entitled to a payment under this chapter with 
229.18 	respect to any tract, parcel, or piece of land enrolled under this chapter that has been 
229.19 	assigned the same parcel identification number. When enrolled forest land is owned by 
229.20 	two or more persons, the owners must determine between them which person is eligible to 
229.21 	claim the payments provided under sections 290C.01 to 290C.11. In the case of property 
229.22 	sold or transferred, the former owner and the purchaser or grantee must determine between 
229.23 	them which person is eligible to claim the payments provided under sections 290C.01 to 
229.24 	290C.11. The owners, transferees, or grantees must notify the commissioner in writing 
229.25 	which person is eligible to claim the payments. 

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

229.27 	Sec. 46. Minnesota Statutes 2006, section 290C.04, is amended to read:
229.28 	290C.04 APPLICATIONS.
229.29 	(a) A landowner may apply to enroll forest land for the sustainable forest incentive 
229.30 	program under this chapter. The claimant must complete, sign, and submit an application 
229.31 	to the commissioner by September 30 in order for the land to become eligible beginning 
229.32 	in the next year. The application shall be on a form prescribed by the commissioner and 
229.33 	must include the information the commissioner deems necessary. At a minimum, the 
229.34 	application must show the following information for the land and the claimant: (i) the 
230.1 	claimant's Social Security number or state or federal business tax registration number and 
230.2 	date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's 
230.3 	parcel identification numbers for the tax parcels that completely contain the claimant's 
230.4 	forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment 
230.5 	in the program, (vi) the approved plan writer's signature and identification number, and 
230.6 	(vii) proof, in a form specified by the commissioner, that the claimant has executed and 
230.7 	acknowledged in the manner required by law for a deed, and recorded, a covenant that the 
230.8 	land is not and shall not be developed in a manner inconsistent with the requirements and 
230.9 	conditions of this chapter. The covenant shall state in writing that the covenant is binding 
230.10 	on the claimant and the claimant's successor or assignee, and that it runs with the land 
230.11 	for a period of not less than eight years. The commissioner shall specify the form of the 
230.12 	covenant and provide copies upon request. The covenant must include a legal description 
230.13 	that encompasses all the forest land that the claimant wishes to enroll under this section or 
230.14 	the certificate of title number for that land if it is registered land.
230.15 	(b) In all cases, the commissioner shall notify the claimant within 90 days after 
230.16 	receipt of a completed application that either the land has or has not been approved for 
230.17 	enrollment. A claimant whose application is denied may appeal the denial as provided in 
230.18 	section 290C.11, paragraph (a) 290C.13. 
230.19 	(c) Within 90 days after the denial of an application, or within 90 days after the 
230.20 	final resolution of any appeal related to the denial, the commissioner shall execute and 
230.21 	acknowledge a document releasing the land from the covenant required under this chapter. 
230.22 	The document must be mailed to the claimant and is entitled to be recorded.
230.23 	(d) The Social Security numbers collected from individuals under this section are 
230.24 	private data as provided in section 13.355. The federal business tax registration number 
230.25 	and date of birth data collected under this section are also private data on individuals or 
230.26 	nonpublic data, as defined in section 13.02, subdivisions 9 and 12, but may be shared 
230.27 	with county assessors for purposes of tax administration and with county treasurers for 
230.28 	purposes of the revenue recapture under chapter 270A. 

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

230.30 	Sec. 47. Minnesota Statutes 2006, section 290C.05, is amended to read:
230.31 	290C.05 ANNUAL CERTIFICATION.
230.32 	On or before July 1 of each year, beginning with the year after the original claimant 
230.33 	has received an approved application, the commissioner shall send each claimant enrolled 
230.34 	under the sustainable forest incentive program a certification form. For purposes of this 
231.1 	section, the original claimant is the person that filed the first application under section 
231.2 	290C.04 to enroll the land in the program. The claimant must sign the certification, 
231.3 	attesting that the requirements and conditions for continued enrollment in the program are 
231.4 	currently being met, and must return the signed certification form to the commissioner by 
231.5 	August 15 of that same year. If the claimant does not return an annual certification form 
231.6 	by the due date, the provisions in section 290C.11 apply.

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

231.8 	Sec. 48. Minnesota Statutes 2006, section 290C.11, is amended to read:
231.9 	290C.11 PENALTIES FOR REMOVAL.
231.10 	(a) If the commissioner determines that land enrolled in the sustainable forest 
231.11 	incentive program is in violation of the conditions for enrollment as specified in section 
231.12 	290C.03, the commissioner shall notify the claimant of the intent to remove all enrolled 
231.13 	land from the sustainable forest incentive program. The claimant has 60 days to appeal 
231.14 	this determination under the provisions of section 290C.13. The appeal must be made 
231.15 	in writing to the commissioner, who shall, within 60 days, notify the claimant as to the 
231.16 	outcome of the appeal. Within 60 days after the commissioner denies an appeal, or within 
231.17 	120 days after the commissioner received a written appeal if the commissioner has not 
231.18 	made a determination in that time, the owner may appeal to Tax Court under chapter 271 
231.19 	as if the appeal is from an order of the commissioner.
231.20 	(b) If the commissioner determines the land is to be removed from the sustainable 
231.21 	forest incentive program, the claimant is liable for payment to the commissioner in the 
231.22 	amount equal to the payments received under this chapter for the previous four-year 
231.23 	period, plus interest. The claimant has 90 days to satisfy the payment for removal of land 
231.24 	from the sustainable forest incentive program under this section. If the penalty is not paid 
231.25 	within the 90-day period under this paragraph, the commissioner shall certify the amount 
231.26 	to the county auditor for collection as a part of the general ad valorem real property taxes 
231.27 	on the land in the following taxes payable year.

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

231.29 	Sec. 49. [290C.13] APPEALS.
231.30 		Subdivision 1.Claimant right to reconsideration. A claimant may obtain 
231.31 	reconsideration by the commissioner of a determination removing enrolled land from the 
231.32 	sustainable forest incentive program, a determination denying an application to enroll land 
231.33 	in the program, or a denial of part or all of an incentive payment by filing an administrative 
232.1 	appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if 
232.2 	the action taken by the commissioner is the outcome of an administrative appeal.
232.3 		Subd. 2.Appeal by claimant. A claimant who wishes to seek administrative review 
232.4 	must follow the procedures in subdivision 4.
232.5 		Subd. 3.Notice date. For purposes of this section, the term "notice date" means 
232.6 	the date of the determination removing enrolled land or the date of the notice denying an 
232.7 	application to enroll land or denying part or all of an incentive payment.
232.8 		Subd. 4.Time and content for administrative appeal. Within 60 days after the 
232.9 	notice date, the claimant must file a written appeal with the commissioner. The appeal 
232.10 	need not be in any particular form but must contain the following information:
232.11 	(1) name and address of the claimant;
232.12 	(2) if a corporation, the state of incorporation of the claimant, and the principal 
232.13 	place of business of the corporation;
232.14 	(3) the Minnesota or federal business identification number or Social Security 
232.15 	number of the claimant;
232.16 	(4) the date;
232.17 	(5) the periods involved and the amount of payment involved for each year or period;
232.18 	(6) the findings in the notice that the claimant disputes;
232.19 	(7) a summary statement that the claimant relies on for each exception; and
232.20 	(8) the claimant's signature or signature of the claimant's duly authorized agent.
232.21 		Subd. 5.Extensions. When requested in writing and within the time allowed for 
232.22 	filing an administrative appeal, the commissioner may extend the time for filing an appeal 
232.23 	for a period not more than 30 days from the expiration of the 60 days from the notice date.
232.24 		Subd. 6.Determination of appeal. On the basis of applicable law and available 
232.25 	information, the commissioner shall determine the validity, if any, in whole or in part, 
232.26 	of the appeal and notify the claimant of the decision. This notice must be in writing 
232.27 	and contain the basis for the determination.
232.28 		Subd. 7.Agreement determining issues under appeal. When it appears to be in 
232.29 	the best interests of the state, the commissioner may settle the amount of any incentive 
232.30 	payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties, 
232.31 	or interest that the commissioner has under consideration by virtue of an appeal filed 
232.32 	under this section. An agreement must be in writing and signed by the commissioner and 
232.33 	the claimant, or the claimant's representative authorized by the claimant to enter into an 
232.34 	agreement. The agreement is final and conclusive and, except upon a showing of fraud or 
232.35 	malfeasance, or misrepresentation of a material fact, the case must not be reopened as to 
232.36 	the matters agreed upon.
233.1 		Subd. 8.Appeal to Tax Court. Within 60 days after the commissioner denies 
233.2 	an appeal, or within 120 days after the commissioner received a written appeal if the 
233.3 	commissioner has not made a determination in that time, the claimant may appeal to Tax 
233.4 	Court under chapter 271 as if the appeal is from an order of the commissioner.
233.5 		Subd. 9.Exemption from Administrative Procedure Act. This section is not 
233.6 	subject to chapter 14.

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

233.8 	Sec. 50. REPEALER.
 233.9 	(a) Minnesota Statutes 2006, section 270.073, is repealed.
233.10 	(b) Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52; 
233.11 	and 270.53, are repealed.

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

233.13 	ARTICLE 14
233.14 	DEPARTMENT SPECIAL TAXES

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

233.25 	EFFECTIVE DATE. This section is effective for tax returns due after December 
233.26 	31, 2008.

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

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

234.1 	Sec. 3. Minnesota Statutes 2006, section 287.22, is amended to read:
234.2 	287.22 EXEMPTIONS.
234.3 	The tax imposed by section 287.21 does not apply to: 
234.4 	(1) An executory contract for the sale of real property under which the purchaser is 
234.5 	entitled to or does take possession of the real property, or any assignment or cancellation 
234.6 	of the contract;
234.7 	(2) A mortgage or an amendment, assignment, extension, partial release, or 
234.8 	satisfaction of a mortgage;
234.9 	(3) A will;
234.10 	(4) A plat;
234.11 	(5) A lease, amendment of lease, assignment of lease, or memorandum of lease;
234.12 	(6) A deed, instrument, or writing in which the United States or any agency or 
234.13 	instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;
234.14 	(7) A deed for a cemetery lot or lots;
234.15 	(8) A deed of distribution by a personal representative;
234.16 	(9) A deed to or from a co-owner partitioning their undivided interest in the same 
234.17 	piece of real property;
234.18 	(10) A deed or other instrument of conveyance issued pursuant to a permanent 
234.19 	school fund land exchange under section 92.121 and related laws; 
234.20 	(11) A referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;
234.21 	(12) A referee's, sheriff's, or certificate holder's certificate of redemption from a 
234.22 	mortgage or lien foreclosure sale issued to the redeeming mortgagor or lienee under 
234.23 	section 580.23 or other statute applicable to redemption by an owner of real property;
234.24 	(13) A deed, instrument, or writing which grants, creates, modifies, or terminates an 
234.25 	easement; and
234.26 	(14) A decree of marriage dissolution, as defined in section 287.01, subdivision 4, 
234.27 	or a deed or other instrument between the parties to the dissolution made pursuant to 
234.28 	the terms of the decree. 

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

234.30 	Sec. 4. Minnesota Statutes 2006, section 287.2205, is amended to read:
234.31 	287.2205 TAX-FORFEITED LAND.
234.32 	Before a state deed for tax-forfeited land may be issued, the deed tax must be paid 
234.33 	by the purchaser of tax-forfeited land whether the purchase is the result of a public 
234.34 	auction or private sale or a repurchase of tax-forfeited land. State agencies and local 
235.1 	units of government that acquire tax-forfeited land by purchase or any other means are 
235.2 	subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a 
235.3 	governmental subdivision for an authorized public use under section 282.01, subdivision 
235.4 	1a, or for redevelopment purposes under section 282.01, subdivision 1b.

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

235.6 	Sec. 5. Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:
235.7 		Subd. 4.Use tax; prescription drugs. (a) A person that receives prescription drugs 
235.8 	for resale or use in Minnesota, other than from a wholesale drug distributor that is subject 
235.9 	to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug 
235.10 	distributor multiplied by the tax percentage specified in this section. Liability for the tax is 
235.11 	incurred when prescription drugs are received or delivered in Minnesota by the person.
235.12 	(b) A person that receives prescription drugs for use in Minnesota from a nonresident 
235.13 	pharmacy required to be registered under section 151.19 is subject to a tax equal to 
235.14 	the price paid by the nonresident pharmacy to the wholesale drug distributor or the 
235.15 	price received by the nonresident pharmacy, whichever is lower, multiplied by the tax 
235.16 	percentage specified in this section. Liability for the tax is incurred when prescription 
235.17 	drugs are received in Minnesota by the person.
235.18 	(c) (b) A tax imposed under this subdivision does not apply to purchases by an 
235.19 	individual for personal consumption.

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

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

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

235.29 	Sec. 7. Minnesota Statutes 2006, section 295.54, subdivision 2, is amended to read:
235.30 		Subd. 2.Pharmacy refund. A pharmacy may claim an annual refund against the 
235.31 	total amount of tax, if any, the pharmacy owes during that calendar year under section 
235.32 	295.52, subdivision 2 4. The refund shall equal the amount paid by the pharmacy to a 
236.1 	wholesale drug distributor subject to tax under section 295.52, subdivision 3, for legend 
236.2 	drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage 
236.3 	specified in section 295.52, subdivision 3. If the amount of the refund exceeds the tax 
236.4 	liability of the pharmacy under section 295.52, subdivision 1b 4, the commissioner 
236.5 	shall provide the pharmacy with a refund equal to the excess amount. Each qualifying 
236.6 	pharmacy must apply for the refund on the annual return as provided under section 295.55, 
236.7 	subdivision 5. The refund must be claimed within one year of the due date of the return 18 
236.8 	months from the date the drugs were delivered outside of Minnesota. Interest on refunds 
236.9 	paid under this subdivision will begin to accrue 60 days after the date a claim for refund is 
236.10 	filed. For purposes of this subdivision, the date a claim is filed is the due date of the return 
236.11 	if a return is due or the date of the actual claim for refund, whichever is later. 

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

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

236.18 	EFFECTIVE DATE. This section is effective for the possession, use, or storage 
236.19 	of tobacco products after June 30, 2008.

236.20 	Sec. 9. Minnesota Statutes 2006, section 297F.25, is amended by adding a subdivision 
236.21 	to read:
236.22 		Subd. 3a.Consumer use tax; use tax return; cigarette consumer. (a) On or before 
236.23 	the 18th day of each calendar month, a consumer who, during the preceding calendar 
236.24 	month, has acquired title to or possession of cigarettes for use or storage in this state, upon 
236.25 	which the sales tax imposed by this section has not been paid, shall file a return with the 
236.26 	commissioner showing the quantity of cigarettes so acquired or possessed. The return 
236.27 	must be made in the form and manner prescribed by the commissioner, and must contain 
236.28 	any other information required by the commissioner. The return must be accompanied by 
236.29 	a remittance for the full unpaid sales tax liability shown by it.
236.30 	(b) The tax imposed under paragraph (a) does not apply if (1) the consumer has 
236.31 	acquired title to or possession of cigarettes for use or storage in this state in quantities 
236.32 	of 200 or fewer in the month, and (2) the cigarettes were carried into this state by that 
236.33 	consumer.

237.1 	EFFECTIVE DATE. This section is effective for cigarettes which a consumer has 
237.2 	acquired title to or possession of after June 30, 2008.

237.3 	Sec. 10. Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read:
237.4 		Subdivision 1.Insurance policies surcharge. (a) Except as otherwise provided in 
237.5 	subdivision 2, each licensed insurer engaged in writing policies of homeowner's insurance 
237.6 	authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or 
237.7 	commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the 
237.8 	gross premiums and assessments, less return premiums, on direct business received by 
237.9 	the company, or by its agents for it, for homeowner's insurance policies, commercial fire 
237.10 	policies, and commercial nonliability insurance policies in this state.
237.11 	(b) The surcharge amount collected under paragraph (a) or subdivision 2, paragraph 
237.12 	(b), may not be considered premium for any other purpose. The surcharge amount 
237.13 	under paragraph (a) must be separately stated on either a billing or policy declaration or 
237.14 	document containing similar information sent to an insured.
237.15 	(c) Amounts collected by the commissioner under this section must be deposited in 
237.16 	the fire safety account established pursuant to subdivision 3.

237.17 	EFFECTIVE DATE. This section is effective retroactively from July 1, 2007, and 
237.18 	applies to policies written or renewed on or after that date.

237.19 	Sec. 11. Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read:
237.20 		Subd. 2.Exemptions. (a) This section does not apply to a farmers' mutual fire 
237.21 	insurance company or township mutual fire insurance company in Minnesota organized 
237.22 	under chapter 67A.
237.23 	(b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to 
237.24 	transact business in Minnesota shall elect to remit to the Department of Revenue for 
237.25 	deposit in the fire safety account either (1) the surcharge amount collected imposed under 
237.26 	this section subdivision 1 on all premiums subject to that surcharge, or (2) a surcharge of 
237.27 	one-half of one percent on the gross fire premiums and assessments, less return premiums, 
237.28 	on all direct business received by the insurer or agents of the insurer in Minnesota, in 
237.29 	cash or otherwise, during the year. 
237.30 	(c) The election must be made by December 31 of each year for insurance policies 
237.31 	written or renewed in the succeeding calendar year. An insurer who elects to remit the 
237.32 	one-half of one percent surcharge on gross fire premiums and assessments must not charge 
237.33 	the insured the surcharge imposed under subdivision 1.
238.1 	(c)(d) For purposes of this subdivision, "gross fire premiums and assessments" 
238.2 	includes premiums on policies covering fire risks only on automobiles, whether written or 
238.3 	under floater form or otherwise.

238.4 	EFFECTIVE DATE. This section is effective retroactively from July 1, 2007, and 
238.5 	applies to insurance policies written or renewed on or after that date.

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

238.15 	EFFECTIVE DATE. This section is effective for tax returns due after December 
238.16 	31, 2008.

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

238.22 	EFFECTIVE DATE. This section is effective for tax returns due after December 
238.23 	31, 2008.

238.24 	ARTICLE 15
238.25 	DEPARTMENT MISCELLANEOUS

238.26 	Section 1. Minnesota Statutes 2006, section 16D.04, subdivision 1, is amended to read:
238.27 		Subdivision 1.Duties. The commissioner shall provide services to the state and its
238.28 	referring agencies to collect debts owed the state referred for collection under this chapter. 
238.29 	The commissioner is not a collection agency as defined by section 332.31, subdivision 3, 
238.30 	and is not licensed, bonded, or regulated by the commissioner of commerce under sections 
238.31 	332.31 to 332.35 or 332.38 to 332.45. The commissioner is subject to section 332.37, 
239.1 	except clause (9), (10), (12), or (19). Debts referred to the commissioner for collection 
239.2 	under section 256.9792 may in turn be referred by the commissioner to the enterprise. 
239.3 	An audited financial statement may not be required as a condition of debt placement with 
239.4 	a private agency if the private agency: (1) has errors and omissions coverage under a 
239.5 	professional liability policy in an amount of at least $1,000,000; or (2) has a fidelity bond 
239.6 	to cover actions of its employees, in an amount of at least $100,000. In cases of debts 
239.7 	referred under section 256.9792, the provisions of this chapter and section 256.9792 apply 
239.8 	to the extent they are not in conflict. If they are in conflict, the provisions of section 
239.9 	256.9792 control. For purposes of this chapter, the referring agency for such debts remains 
239.10 	the Department of Human Services. 

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

239.12 	Sec. 2. Minnesota Statutes 2006, section 16D.04, subdivision 2, is amended to read:
239.13 		Subd. 2.Agency participation. (a) A referring agency may, at its option, must
239.14 	refer, by electronic means, debts to the commissioner for collection. The ultimate
239.15 	Responsibility for the debt, including the reporting of the debt to the commissioner of 
239.16 	finance and the decision with regard to the continuing collection and uncollectibility of the 
239.17 	debt, remains with the referring agency.
239.18 	(b) Before a debt becomes 121 days past due, a referring agency may refer the 
239.19 	debt to the commissioner for collection at any time after a debt becomes delinquent and 
239.20 	uncontested and the debtor has no further administrative appeal of the amount of the 
239.21 	debt. When a debt owed to a statereferring agency becomes 121 days past due, the state
239.22 	referring agency must refer the debt to the commissioner for collection. This requirement 
239.23 	does not apply if there is a dispute over the amount or validity of the debt, if the debt is the 
239.24 	subject of legal action or administrative proceedings, or the agency determines that the 
239.25 	debtor is adhering to acceptable payment arrangements. The commissioner, in consultation 
239.26 	with the commissioner of finance, may provide that certain types of debt need not be 
239.27 	referred to the commissioner for collection under this paragraph. Methods and procedures 
239.28 	for referral must follow internal guidelines prepared by the commissioner of finance.
239.29 	(c) If the referring agency is a court, the court must furnish a debtor's Social Security 
239.30 	number to the commissioner when the court refers the debt.

239.31 	EFFECTIVE DATE. This section is effective for debts referred after December 
239.32 	31, 2008.

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

240.10 	EFFECTIVE DATE. This section is effective for debts referred after December 
240.11 	31, 2008.

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

240.21 	EFFECTIVE DATE. This section is effective January 1, 2009.

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

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

240.28 	Sec. 6. Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read:
240.29 		Subd. 2.Required and excluded tax preparers. (a) Subject to the limitations 
240.30 	of paragraph (b), the commissioner must publish lists of tax preparers as defined in 
240.31 	section 289A.60, subdivision 13, paragraph (f), who have been convicted under section 
241.1 	289A.63 or assessed penalties in excess of $1,000 under section 289A.60, subdivision 
241.2 	13, paragraph (a).
241.3 	(b) For the purposes of this section, tax preparers are not subject to publication if:
241.4 	(1) an administrative or court action contesting the penalty has been filed or served 
241.5 	and is unresolved at the time when notice would be given under subdivision 3;
241.6 	(2) an appeal period to contest the penalty has not expired; or
241.7 	(3) the commissioner has been notified that the tax preparer is deceased.

241.8 	EFFECTIVE DATE. This section is effective for penalties on returns filed after 
241.9 	December 31, 2008.

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

241.18 	EFFECTIVE DATE. This section is effective for personal liability assessments 
241.19 	made after the day of final enactment.

241.20 	Sec. 8. Minnesota Statutes 2006, section 270C.63, subdivision 9, is amended to read:
241.21 		Subd. 9.Period of limitations. The lien imposed by this section shall, 
241.22 	notwithstanding any other provision of law to the contrary, be enforceable from the time 
241.23 	the lien arises and for ten years from the date of filing the notice of lien, which must be 
241.24 	filed by the commissioner within five years after the date of assessment of the tax or final 
241.25 	administrative or judicial determination of the assessment. A notice of lien filed at the 
241.26 	Office of the Secretary of State may be transcribed to any county within ten years after the 
241.27 	date of its filing, but the transcription does not extend the period during which the lien is 
241.28 	enforceable. A notice of lien filed in one county may be transcribed to the secretary of 
241.29 	state or to any other county within ten years after the date of its filing, but the transcription 
241.30 	shall not extend the period during which the lien is enforceable. A notice of lien may be 
241.31 	renewed by the commissioner before the expiration of the ten-year period for an additional 
241.32 	ten years. The taxpayer must receive written notice of the renewal.

242.1 	EFFECTIVE DATE. This section is effective for liens transcribed after the day 
242.2 	of final enactment.

242.3 	Sec. 9. Minnesota Statutes 2007 Supplement, section 424A.10, subdivision 3, is 
242.4 	amended to read:
242.5 		Subd. 3.State reimbursement. (a) By February 15 of each year, the treasurer of 
242.6 	the relief association shall apply to the commissioner of revenue Each year, to be eligible
242.7 	for state reimbursement of the amount of supplemental benefits paid under subdivision 2 
242.8 	during the preceding calendar year, the relief association must apply to the commissioner 
242.9 	of revenue by February 15. By March 15, the commissioner shall reimburse the relief 
242.10 	association for the amount of the supplemental benefits paid to qualified recipients and to 
242.11 	survivors of deceased active or deferred volunteer firefighters. 
242.12 	(b) The commissioner of revenue shall prescribe the form of and supporting 
242.13 	information that must be supplied as part of the application for state reimbursement. 
242.14 	The commissioner of revenue shall reimburse the relief association by paying the 
242.15 	reimbursement amount to the treasurer of the municipality where the association is located. 
242.16 	Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement 
242.17 	to the treasurer of the association if the association has filed a financial report with the 
242.18 	municipality. If the relief association has not filed a financial report with the municipality, 
242.19 	the municipal treasurer shall delay transmission of the reimbursement payment to the 
242.20 	association until the complete financial report is filed. If the association has dissolved or 
242.21 	has been removed as a trustee of state aid, the treasurer shall deposit the money in a 
242.22 	special account in the municipal treasury, and the money may be disbursed only for the 
242.23 	purposes and in the manner provided in section 424A.08. When paid to the association,
242.24 	(c) the reimbursement payment must be deposited in the special fund of the relief 
242.25 	association. 
242.26 	(d) (c) A sum sufficient to make the payments is appropriated from the general fund 
242.27 	to the commissioner of revenue.

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

242.29 	ARTICLE 16
242.30 	MISCELLANEOUS

242.31 	Section 1. Minnesota Statutes 2006, section 3.987, subdivision 1, is amended to read:
242.32 		Subdivision 1.Local impact notes. The commissioner of finance shall coordinate 
242.33 	the development of a local impact note for any proposed legislation introduced after June 
243.1 	30, 1997, or any rule proposed after December 31, 1999, upon request of the chair or the 
243.2 	ranking minority member of either legislative Tax Committee. Upon receipt of a request 
243.3 	to prepare a local impact note, the commissioner must notify the authors of the proposed 
243.4 	legislation or, for an administrative rule, the head of the relevant executive agency or 
243.5 	department, that the request has been made. The local impact note must be made available 
243.6 	to the public upon request. If the action is among the exceptions listed in section 3.988, 
243.7 	a local impact note need not be requested nor prepared. The commissioner shall make 
243.8 	a reasonable and timely estimate of the local fiscal impact on each type of political 
243.9 	subdivision that would result from the proposed legislation. The commissioner of finance 
243.10 	may require any political subdivision or the commissioner of an administrative agency 
243.11 	of the state to supply in a timely manner any information determined to be necessary to 
243.12 	determine local fiscal impact. The political subdivision, its representative association, or 
243.13 	commissioner shall convey the requested information to the commissioner of finance with 
243.14 	a signed statement to the effect that the information is accurate and complete to the best 
243.15 	of its ability. The political subdivision, its representative association, or commissioner, 
243.16 	when requested, shall update its determination of local fiscal impact based on actual 
243.17 	cost or revenue figures, improved estimates, or both. Upon completion of the note, the 
243.18 	commissioner must provide a copy to the authors of the proposed legislation or, for an 
243.19 	administrative rule, to the head of the relevant executive agency or department. 

243.20 	Sec. 2. Minnesota Statutes 2006, section 3.988, subdivision 3, is amended to read:
243.21 		Subd. 3.Miscellaneous exceptions. A local impact note or an attachment as 
243.22 	provided in section 3.987, subdivision 2, need not be prepared for the cost of a mandated 
243.23 	action if the law, including a rulemaking, containing the mandate: 
243.24 	(1) accommodates a specific local request;
243.25 	(2) results in no new local government duties;
243.26 	(3) leads to revenue losses from exemptions to taxes;
243.27 	(4) provided only clarifying or conforming, nonsubstantive charges on local 
243.28 	government;
243.29 	(5) imposes additional net local costs that are minor (an amount less than or equal 
243.30 	to one-half of one percent of the local revenue base as defined in section 477A.011, 
243.31 	subdivision 27, or $50,000, whichever is less for any single local government if the 
243.32 	mandate does not apply statewide or less than $1,000,000 if the mandate is statewide); 
243.33 	(6) is a law or executive order enacted before July 1, 1997, or a rule initially 
243.34 	implementing a law enacted before July 1, 1997;
244.1 	(7) implements something other than a law or executive order, such as a federal, 
244.2 	court, or voter-approved mandate;
244.3 	(8) results in savings that equal or exceed costs;
244.4 	(9) requires the holding of elections;
244.5 	(10) ensures due process or equal protection;
244.6 	(11) provides for the notification and conduct of public meetings;
244.7 	(12) establishes the procedures for administrative and judicial review of actions 
244.8 	taken by political subdivisions;
244.9 	(13) protects the public from malfeasance, misfeasance, or nonfeasance by officials 
244.10 	of political subdivisions;
244.11 	(14) relates directly to financial administration, including the levy, assessment, 
244.12 	and collection of taxes;
244.13 	(15) relates directly to the preparation and submission of financial audits necessary 
244.14 	to the administration of state laws; or
244.15 	(16) requires uniform standards to apply to public and private institutions without 
244.16 	differentiation.

244.17 	Sec. 3. Minnesota Statutes 2006, section 3.989, subdivision 2, is amended to read:
244.18 		Subd. 2.Report Compilation of local impact notes. The commissioner of finance 
244.19 	shall prepare by September 1, 2000, and by September 1 of each even-numbered year 
244.20 	thereafter, a report compilation of the costs of local mandates established after June 30, 
244.21 	1997 key impact notes requested by the legislature during the previous biennial session 
244.22 	as provided in section 3.987. The commissioner may consult with local government 
244.23 	representatives and legislative fiscal staff to determine which local impact notes were key.
244.24 	The commissioner shall include the statewide total of the statement of costs of local 
244.25 	mandates after June 30, 1997, as a notation in the state biennial budget.

244.26 	Sec. 4. Minnesota Statutes 2006, section 3.989, subdivision 3, is amended to read:
244.27 		Subd. 3.Certain political subdivisions; report. The political subdivisions that 
244.28 	have opted to administer class B state mandates shall report to the commissioner of 
244.29 	finance by September 1, 1998, and by September 1 of each year thereafter, identifying 
244.30 	each instance when revenue for a class B state mandate has fallen below 85 percent of 
244.31 	the total cost of the program and the political subdivision intends to cease administration 
244.32 	of the program.
245.1 	The commissioner shall forward a copy of the report to the chairs of the appropriate 
245.2 	funding committees of the senate and the house for proposed inclusion of the shortfall as a 
245.3 	line item appropriation in the state budget for the next fiscal year.
245.4 	The political subdivision may exercise its option to cease administration only if the 
245.5 	legislature has failed to include the shortfall as an appropriation in the state budget for 
245.6 	the next fiscal year.

245.7 	Sec. 5. Minnesota Statutes 2006, section 16A.103, subdivision 2, is amended to read:
245.8 		Subd. 2.Local revenue. In February and November of each year, the commissioner 
245.9 	of revenue shall prepare and deliver to the governor and the legislature forecasts of 
245.10 	revenue to be received by school districts as a group, counties as a group, and the group of 
245.11 	cities and towns that have a population of more than 2,500. The forecasts must assume 
245.12 	the continuation of current laws, projections of valuation changes in real property, and 
245.13 	reasonable estimates of projected growth in the national and state economies and affected 
245.14 	populations. Revenue must be estimated for property taxes, state and federal aids, local 
245.15 	sales taxes, if any, and a single projection for all other revenue for each group of affected 
245.16 	local governmental units. As part of the February forecast, the commissioner of revenue 
245.17 	shall report to the governor and legislature on which groups of local government units 
245.18 	exceeded the revenue targets of the governor and legislature in the most recent biennium.

245.19 	Sec. 6. Minnesota Statutes 2006, section 270A.03, subdivision 2, is amended to read:
245.20 		Subd. 2.Claimant agency. "Claimant agency" means any state agency, as defined 
245.21 	by section 14.02, subdivision 2, the regents of the University of Minnesota, any district 
245.22 	court of the state, any county, any statutory or home rule charter city, including a city that 
245.23 	is  presenting a claim for a municipal hospital or a public library or a municipal ambulance 
245.24 	service, a hospital district, a private nonprofit hospital that leases its building from the 
245.25 	county or city in which it is located, any public agency responsible for child support 
245.26 	enforcement, any public agency responsible for the collection of court-ordered restitution, 
245.27 	and any public agency established by general or special law that is responsible for the 
245.28 	administration of a low-income housing program, and the Minnesota collection enterprise 
245.29 	as defined in section 16D.02, subdivision 8, for the purpose of collecting the costs imposed 
245.30 	under section 16D.11. A county may act as a claimant agency on behalf of an ambulance 
245.31 	service licensed under chapter 144E if the ambulance service's primary service area is 
245.32 	located at least in part within the county, but more than one county may not act as a 
245.33 	claimant agency for a licensed ambulance service with respect to the same debt. 

246.1 	Sec. 7. Minnesota Statutes 2006, section 270A.10, is amended to read:
246.2 	270A.10 PRIORITY OF CLAIMS.
246.3 	If two or more debts, in a total amount exceeding the debtor's refund, are submitted 
246.4 	for setoff, the priority of payment shall be as follows: First, any
246.5 	(1) delinquent tax obligations of the debtor which are owed to the department shall 
246.6 	be satisfied. Secondly, the refund shall be applied to;
246.7 	(2) debts for child support based on the order in time in which the commissioner 
246.8 	received the debts. Thirdly, the refund shall be applied to;
246.9 	(3) payment of restitution obligations. Fourthly, the refund shall be applied to;
246.10 	(4) claims brought for a hospital or an ambulance service;
246.11 	(5) the remaining debts based on the order in time in which the commissioner 
246.12 	received the debts.

246.13 	Sec. 8. Minnesota Statutes 2006, section 298.75, is amended by adding a subdivision 
246.14 	to read:
246.15 		Subd. 11.Tax may be imposed; Otter Tail County. (a) If Otter Tail County 
246.16 	does not impose a tax under this section and approves imposition of the tax under this 
246.17 	subdivision, the town of Scambler in Otter Tail County may impose the aggregate 
246.18 	materials tax under this section.
246.19 	(b) For purposes of exercising the powers contained in this section, the "town" is 
246.20 	deemed to be the "county."
246.21 	(c) All provisions in this section apply to the town of Scambler, except that all 
246.22 	proceeds of the tax must be retained by the town and used for the purposes described in 
246.23 	subdivision 7.
246.24 	(d) If Otter Tail County imposes an aggregate materials tax under this section, the 
246.25 	tax imposed by the town of Scambler under this subdivision is repealed on the effective 
246.26 	date of the Otter Tail County tax.

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

246.30 	Sec. 9.  REPEALER.
 246.31 	Minnesota Statutes 2006, section 16A.1522, is repealed.