1.1 	A bill for an act
1.2 	relating to the financing and operation of state and local government; making 
1.3 	policy, technical, administrative, enforcement, collection, refund, clarifying, 
1.4 	and other changes to income, franchise, property, sales and use, estate, gift, 
1.5 	cigarette, tobacco, liquor, motor vehicle, gross receipts, minerals, tax increment 
1.6 	financing and other taxes and tax-related provisions; requiring certain additions; 
1.7 	conforming to federal section 179 expensing allowances; adding Minnesota 
1.8 	development subsidies to corporate taxable income; disallowing certain 
1.9 	subtractions; allowing certain nonrefundable credits; allowing a refundable 
1.10 	Minnesota child credit; repealing various credits; conforming to certain 
1.11 	federal tax provisions; expanding definition of domestic corporation to include 
1.12 	tax havens; modifying income tax rates; expanding and increasing credit 
1.13 	for research activities; accelerating single sales apportionment; modifying 
1.14 	minimum fees; allowing county local sales tax; eliminating certain existing 
1.15 	local sales taxes; adjusting county program aid; modifying levy limits; making 
1.16 	changes to residential homestead market value credit; providing flexibility and 
1.17 	mandate reduction provisions; making changes to various property tax and local 
1.18 	government aid-related provisions; providing temporary suspension of new or 
1.19 	increased maintenance of effort and matching fund requirements; modifying 
1.20 	county support of libraries; establishing the Council on Local Results and 
1.21 	Innovation; providing property tax system benchmarks, critical indicators, and 
1.22 	principles; establishing a property tax work group; creating the Legislative 
1.23 	Commission on Mandate Reform; making changes to certain administrative 
1.24 	procedures; modifying mortgage registry tax payments; modifying truth in 
1.25 	taxation provisions; providing clarification for eligibility for property tax 
1.26 	exemption for institutions of purely public charity; making changes to property 
1.27 	tax refund and senior citizen property tax deferral programs; providing property 
1.28 	tax exemptions; providing a property valuation reduction for certain land 
1.29 	constituting a riparian buffer; providing a partial valuation exclusion for disaster 
1.30 	damaged homes; extending deadline for special service district and housing 
1.31 	improvement districts; requiring a fiscal disparity study; extending emergency 
1.32 	medical service special taxing district; providing emergency debt certificates; 
1.33 	providing and modifying local taxes; expanding county authorization to abate 
1.34 	certain improvements; providing municipal street improvement districts; 
1.35 	establishing a seasonal recreational property tax deferral program; expanding 
1.36 	sales and use tax base; defining solicitor for purposes of nexus; providing a 
1.37 	bovine tuberculosis testing grant; modifying tax preparation services law; 
1.38 	modifying local lodging tax; eliminating authority of municipalities to issue 
1.39 	bonds for certain other postemployment benefits; allowing use of increment to 
2.1 	offset state aid reductions; allowing additional authority to spend increments 
2.2 	for housing replacement district plans; modifying and authorizing certain tax 
2.3 	increment financing districts; providing equitable funding health and human 
2.4 	services reform; modifying JOBZ provisions; repealing international economic 
2.5 	development and biotechnology and health science industry zones; modifying 
2.6 	basic sliding fee program funding; providing appointments; requiring reports; 
2.7 	appropriating money;amending Minnesota Statutes 2008, sections 3.842, 
2.8 	subdivision 4a; 3.843; 16C.28, subdivision 1a; 40A.09; 84.82, subdivision 
2.9 	10; 84.922, subdivision 11; 86B.401, subdivision 12; 123B.10, subdivision 
2.10 	1; 134.34, subdivisions 1, 4; 245.4932, subdivision 1; 253B.045, subdivision 
2.11 	2; 254B.04, subdivision 1; 270C.12, by adding a subdivision; 270C.445; 
2.12 	270C.56, subdivision 3; 272.02, subdivision 7, by adding subdivisions; 272.029, 
2.13 	subdivision 6; 273.111, by adding a subdivision; 273.1231, subdivision 1; 
2.14 	273.1232, subdivision 1; 273.124, subdivision 1; 273.13, subdivisions 25, 34; 
2.15 	273.1384, subdivisions 1, 4, by adding a subdivision; 273.1393; 275.025, 
2.16 	subdivisions 1, 2; 275.065, subdivisions 1, 1a, 1c, 3, 6; 275.07, subdivisions 
2.17 	1, 4, by adding a subdivision; 275.70, subdivisions 3, 5; 275.71, subdivisions 
2.18 	2, 4, 5; 276.04, subdivision 2; 279.10; 282.08; 287.08; 289A.02, subdivision 
2.19 	7, as amended; 289A.11, subdivision 1; 289A.20, subdivision 4; 289A.31, 
2.20 	subdivision 5; 290.01, subdivisions 5, 19, as amended, 19a, as amended, 19b, 
2.21 	19c, as amended, 19d, as amended, 29, 31, as amended, by adding subdivisions; 
2.22 	290.014, subdivision 2; 290.06, subdivisions 2c, 2d, by adding subdivisions; 
2.23 	290.0671, subdivision 1; 290.068, subdivisions 1, 3, 4; 290.091, subdivision 2; 
2.24 	290.0921, subdivision 3; 290.0922, subdivisions 1, 3, by adding a subdivision; 
2.25 	290.17, subdivisions 2, 4; 290.191, subdivisions 2, 3; 290A.03, subdivision 
2.26 	15, as amended; 290A.04, subdivision 2; 290B.03, subdivision 1; 290B.04, 
2.27 	subdivisions 3, 4; 290B.05, subdivision 1; 291.005, subdivision 1, as amended; 
2.28 	291.03, subdivision 1; 295.75, subdivision 2; 297A.61, subdivisions 3, 4, 5, 6, 
2.29 	10, 14a, 17a, 21, 38, by adding subdivisions; 297A.62, by adding a subdivision; 
2.30 	297A.63; 297A.64, subdivision 2; 297A.66, subdivision 1, by adding a 
2.31 	subdivision; 297A.67, subdivisions 15, 23; 297A.815, subdivision 3; 297A.83, 
2.32 	subdivision 3; 297A.94; 297A.99, subdivisions 1, 6; 297B.02, subdivision 1; 
2.33 	297F.01, by adding a subdivision; 297F.05, subdivisions 1, 3, 4, by adding a 
2.34 	subdivision; 297G.03, subdivision 1; 297G.04; 298.001, by adding a subdivision; 
2.35 	298.018, subdivisions 1, 2, by adding a subdivision; 298.227; 298.24, subdivision 
2.36 	1; 298.28, subdivisions 2, 11, by adding a subdivision; 306.243, by adding a 
2.37 	subdivision; 344.18; 365.28; 375.194, subdivision 5; 383A.75, subdivision 3; 
2.38 	428A.101; 428A.21; 429.011, subdivision 2a; 429.021, subdivision 1; 429.041, 
2.39 	subdivisions 1, 2; 446A.086, subdivision 8; 465.719, subdivision 9; 469.015; 
2.40 	469.174, subdivision 22; 469.175, subdivisions 1, 6; 469.176, subdivisions 3, 6, 
2.41 	by adding a subdivision; 469.1763, subdivisions 2, 3; 469.178, subdivision 7; 
2.42 	469.315; 469.3192; 473.13, subdivision 1; 473H.04, by adding a subdivision; 
2.43 	473H.05, subdivision 1; 475.51, subdivision 4; 475.52, subdivision 6; 475.58, 
2.44 	subdivision 1; 477A.011, subdivision 36; 477A.0124, by adding a subdivision; 
2.45 	477A.013, subdivision 9, by adding a subdivision; 477A.03, subdivisions 2a, 
2.46 	2b; 641.12, subdivision 1; Laws 1986, chapter 396, section 4, subdivision 3; 
2.47 	by adding a subdivision; Laws 1986, chapter 400, section 44, as amended; 
2.48 	Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended; Laws 
2.49 	1993, chapter 375, article 9, section 46, subdivision 2, as amended, by adding 
2.50 	a subdivision; Laws 1995, chapter 264, article 5, sections 44, subdivision 4, as 
2.51 	amended; 45, subdivision 1, as amended; Laws 1996, chapter 471, article 2, 
2.52 	section 30; Laws 1998, chapter 389, article 8, section 37, subdivision 1; Laws 
2.53 	2001, First Special Session chapter 5, article 3, section 8, as amended; Laws 
2.54 	2002, chapter 377, article 3, section 25; Laws 2006, chapter 259, article 3, 
2.55 	section 12, subdivision 3; Laws 2008, chapter 366, article 5, section 34; article 6, 
2.56 	sections 9; 10; article 7, section 16, subdivision 3; proposing coding for new law 
2.57 	in Minnesota Statutes, chapters 3; 6; 14; 17; 256E; 270C; 272; 273; 275; 290; 
2.58 	292; 297A; 435; 471; 475; 477A; proposing coding for new law as Minnesota 
3.1 	Statutes, chapter 290D; repealing Minnesota Statutes 2008, sections 245.4835; 
3.2 	245.714; 246.54; 254B.02, subdivision 3; 256B.19, subdivision 1; 256F.10, 
3.3 	subdivision 7; 256I.08; 272.02, subdivision 83; 273.113; 275.065, subdivisions 
3.4 	5a, 6b, 6c, 8, 9, 10; 289A.50, subdivision 10; 290.01, subdivision 6b; 290.06, 
3.5 	subdivisions 24, 28, 30, 31, 32, 33, 34; 290.067, subdivisions 1, 2, 2a, 2b, 3, 4; 
3.6 	290.0672; 290.0674; 290.0679; 290.0802; 290.0921, subdivision 7; 290.191, 
3.7 	subdivision 4; 290.491; 297A.61, subdivision 45; 297A.68, subdivisions 38, 41; 
3.8 	469.316; 469.317; 469.321; 469.3215; 469.322; 469.323; 469.324; 469.325; 
3.9 	469.326; 469.327; 469.328; 469.329; 469.330; 469.331; 469.332; 469.333; 
3.10 	469.334; 469.335; 469.336; 469.337; 469.338; 469.339; 469.340; 469.341; 
3.11 	477A.0124, subdivisions 3, 4, 5; 477A.03, subdivision 5; Laws 2009, chapter 3, 
3.12 	section 1; Laws 2009, chapter 12, article 1, section 8.
3.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.14 	ARTICLE 1
3.15 	INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND 
3.16 	ESTATE AND GIFT TAXES

3.17 	Section 1. Minnesota Statutes 2008, section 289A.02, subdivision 7, as amended by 
3.18 	Laws 2009, chapter 12, article 1, section 1, is amended to read:
3.19 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
3.20 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
3.21 	31, 2008 March 31, 2009.

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

3.23 	Sec. 2. Minnesota Statutes 2008, section 289A.31, subdivision 5, is amended to read:
3.24 		Subd. 5.Withholding tax, withholding from payments to out-of-state 
3.25 	contractors, and withholding by partnerships and small business corporations. (a) 
3.26 	Except as provided in paragraph (b), an employer or person withholding tax under section 
3.27 	290.92 or 290.923, subdivision 2, who fails to pay to or deposit with the commissioner a 
3.28 	sum or sums required by those sections to be deducted, withheld, and paid, is personally 
3.29 	and individually liable to the state for the sum or sums, and added penalties and interest, 
3.30 	and is not liable to another person for that payment or payments. The sum or sums 
3.31 	deducted and withheld under section 290.92, subdivision 2a or 3, or 290.923, subdivision 
3.32 	2, must be held as a special fund in trust for the state of Minnesota.
3.33 	(b) If the employer or person withholding tax under section 290.92 or 290.923, 
3.34 	subdivision 2, fails to deduct and withhold the tax in violation of those sections, and later 
3.35 	the taxes against which the tax may be credited are paid, the tax required to be deducted 
3.36 	and withheld will not be collected from the employer. This does not, however, relieve the 
3.37 	employer from liability for any penalties and interest otherwise applicable for failure to 
4.1 	deduct and withhold. This paragraph does not apply to an employer subject to paragraph 
4.2 	(g), or to a contractor required to withhold under section 290.92, subdivision 31.
4.3 	(c) Liability for payment of withholding taxes includes a responsible person or entity 
4.4 	described in the personal liability provisions of section 270C.56.
4.5 	(d) Liability for payment of withholding taxes includes a third party lender or surety 
4.6 	described in section 270C.59.
4.7 	(e) A partnership or S corporation required to withhold and remit tax under section 
4.8 	290.92, subdivisions 4b and 4c, is liable for payment of the tax to the commissioner, and a 
4.9 	person having control of or responsibility for the withholding of the tax or the filing of 
4.10 	returns due in connection with the tax is personally liable for the tax due.
4.11 	(f) A payor of sums required to be withheld under section 290.9705, subdivision 
4.12 	1, is liable to the state for the amount required to be deducted, and is not liable to an 
4.13 	out-of-state contractor for the amount of the payment.
4.14 	(g) If an employer fails to withhold tax from the wages of an employee when 
4.15 	required to do so under section 290.92, subdivision 2a, by reason of treating the employee 
4.16 	as not being an employee, then the liability for tax is equal to three percent of the wages 
4.17 	paid to the employee. The liability for tax of an employee is not affected by the assessment 
4.18 	or collection of tax under this paragraph. The employer is not entitled to recover from the 
4.19 	employee any tax determined under this paragraph.

4.20 	EFFECTIVE DATE. This section is effective for taxes required to be withheld 
4.21 	after June 30, 2009.

4.22 	Sec. 3. Minnesota Statutes 2008, section 290.01, subdivision 5, is amended to read:
4.23 		Subd. 5.Domestic corporation. The term "domestic" when applied to a corporation 
4.24 	means a corporation:
4.25 	(1) created or organized in the United States, or under the laws of the United States 
4.26 	or of any state, the District of Columbia, or any political subdivision of any of the 
4.27 	foregoing but not including the Commonwealth of Puerto Rico, or any possession of 
4.28 	the United States;
4.29 	(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue 
4.30 	Code; or
4.31 	(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.;
4.32 	(4) which is incorporated in a tax haven;
4.33 	(5) which is engaged in activity in a tax haven sufficient for the tax haven to impose 
4.34 	a net income tax under United States constitutional standards and section 290.015; or
5.1 	(6) which has the average of its property, payroll, and sales factors, as defined under 
5.2 	section 290.191, within the 50 states of the United States and the District of Columbia of 
5.3 	20 percent or more.

5.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
5.5 	December 31, 2008.

5.6 	Sec. 4. Minnesota Statutes 2008, section 290.01, is amended by adding a subdivision 
5.7 	to read:
5.8 		Subd. 5c.Tax haven. (a) "Tax haven" means a foreign jurisdiction designated 
5.9 	under this subdivision.
5.10 	(b) The commissioner may designate a foreign jurisdiction as a tax haven by 
5.11 	administrative rule if the jurisdiction:
5.12 	(1) has no or nominal effective tax on the relevant income; and
5.13 	(2)(i) has laws or practices that prevent effective exchange of information for tax 
5.14 	purposes with other governments on taxpayers benefiting from the tax regime;
5.15 	(ii) has a tax regime that lacks transparency. A tax regime lacks transparency if the 
5.16 	details of legislative, legal, or administrative provisions are not open and apparent or are 
5.17 	not consistently applied among similarly situated taxpayers, or if the information needed 
5.18 	by tax authorities to determine a taxpayer's correct tax liability, such as accounting records 
5.19 	and underlying documentation, is not adequately available;
5.20 	(iii) facilitates the establishment of foreign-owned entities without the need for a 
5.21 	local substantive presence or prohibits these entities from having any commercial impact 
5.22 	on the local economy;
5.23 	(iv) explicitly or implicitly excludes the jurisdiction's resident taxpayers from taking 
5.24 	advantage of the tax regime's benefits or prohibits enterprises that benefit from the regime 
5.25 	from operating in the jurisdiction's domestic markets; or
5.26 	(v) has created a tax regime that is favorable for tax avoidance, based upon an 
5.27 	overall assessment of relevant factors, including whether the jurisdiction has a significant 
5.28 	untaxed offshore financial or other services sector relative to its overall economy.
5.29 	(c) The following foreign jurisdictions are deemed to be tax havens, unless the 
5.30 	commissioner, by revenue notice, revokes the listing of a jurisdiction:
5.31 	(1) Anguilla;
5.32 	(2) Antigua and Barbuda;
5.33 	(3) Aruba;
5.34 	(4) Bahamas;
5.35 	(5) Barbados;
6.1 	(6) Belize;
6.2 	(7) Bermuda;
6.3 	(8) British Virgin Islands;
6.4 	(9) Cayman Islands;
6.5 	(10) Cook Islands;
6.6 	(11) Dominica;
6.7 	(12) Gibraltar;
6.8 	(13) Grenada;
6.9 	(14) Guernsey-Sark-Alderney;
6.10 	(15) Isle of Man;
6.11 	(16) Jersey;
6.12 	(17) Latvia;
6.13 	(18) Liechtenstein;
6.14 	(19) Luxembourg;
6.15 	(20) Nauru;
6.16 	(21) Netherlands Antilles;
6.17 	(22) Panama;
6.18 	(23) Samoa;
6.19 	(24) St. Kitts and Nevis;
6.20 	(25) St. Lucia;
6.21 	(26) St. Vincent and Grenadines;
6.22 	(27) Turks and Caicos; and
6.23 	(28) Vanuatu.
6.24 	(d) The commissioner shall revoke a foreign jurisdiction's listing under paragraph 
6.25 	(b) or (c), as applicable, if the United States enters into a tax treaty or other agreement 
6.26 	with the foreign jurisdiction that provides for prompt, obligatory, and automatic exchange 
6.27 	of information with the United States government relevant to enforcing the provisions of 
6.28 	federal tax laws and the treaty or other agreement was in effect for the taxable year.

6.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
6.30 	December 31, 2008.

6.31 	Sec. 5. Minnesota Statutes 2008, section 290.01, subdivision 19, as amended by Laws 
6.32 	2009, chapter 12, article 1, section 2, is amended to read:
6.33 		Subd. 19. Net income. The term "net income" means the federal taxable income, 
6.34 	as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 
6.35 	date named in this subdivision, incorporating the federal effective dates of changes to the 
7.1 	Internal Revenue Code and any elections made by the taxpayer in accordance with the 
7.2 	Internal Revenue Code in determining federal taxable income for federal income tax 
7.3 	purposes, and with the modifications provided in subdivisions 19a to 19f. 
7.4 	In the case of a regulated investment company or a fund thereof, as defined in section 
7.5 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
7.6 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
7.7 	except that: 
7.8 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
7.9 	Revenue Code does not apply; 
7.10 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 
7.11 	Revenue Code must be applied by allowing a deduction for capital gain dividends and 
7.12 	exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 
7.13 	Revenue Code; and 
7.14 	(3) the deduction for dividends paid must also be applied in the amount of any 
7.15 	undistributed capital gains which the regulated investment company elects to have treated 
7.16 	as provided in section 852(b)(3)(D) of the Internal Revenue Code. 
7.17 	The net income of a real estate investment trust as defined and limited by section 
7.18 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
7.19 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code. 
7.20 	The net income of a designated settlement fund as defined in section 468B(d) of 
7.21 	the Internal Revenue Code means the gross income as defined in section 468B(b) of the 
7.22 	Internal Revenue Code. 
7.23 	The Internal Revenue Code of 1986, as amended through December 31, 2008 March 
7.24 	31, 2009, shall be in effect for taxable years beginning after December 31, 1996. 
7.25 	Except as otherwise provided, references to the Internal Revenue Code in 
7.26 	subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 
7.27 	the applicable year. 

7.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
7.29 	December 31, 2008. In enacting this section and other provisions of this article, the 
7.30 	legislature intends net income to include and tax to apply to interest paid on any Build 
7.31 	America Bond, as defined under section 54AA of the Internal Revenue Code of 1986, 
7.32 	notwithstanding the provisions of section 1531 of Division B, Title I of the American 
7.33 	Recovery and Reinvestment Act of 2009, Public Law 111-5.

7.34 	Sec. 6. Minnesota Statutes 2008, section 290.01, subdivision 19a, as amended by Laws 
7.35 	2009, chapter 12, article 1, section 3, is amended to read:
8.1 		Subd. 19a. Additions to federal taxable income. For individuals, estates, and 
8.2 	trusts, there shall be added to federal taxable income: 
8.3 	(1)(i) interest income on obligations of any state other than Minnesota or a political or 
8.4 	governmental subdivision, municipality, or governmental agency or instrumentality of any 
8.5 	state other than Minnesota exempt from federal income taxes under the Internal Revenue 
8.6 	Code or any other federal statute, but excluding interest on qualified obligations; and 
8.7 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
8.8 	Code, except the portion of the exempt-interest dividends derived from interest income 
8.9 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
8.10 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
8.11 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
8.12 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
8.13 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
8.14 	fund of the regulated investment company as defined in section 851(g) of the Internal 
8.15 	Revenue Code, making the payment and only to the extent the interest is paid on qualified 
8.16 	obligations; and 
8.17 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
8.18 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
8.19 	interest income on obligations of the state in which the tribe is located; 
8.20 	(2)(i)  the amount of income or, sales and use, motor vehicle sales, or excise taxes 
8.21 	paid or accrued within the taxable year under this chapter and the amount of taxes based 
8.22 	on net income paid or, sales and use, motor vehicle sales, or excise taxes paid to any other 
8.23 	state or to any province or territory of Canada,;
8.24 	(ii) the amount of real and personal property taxes paid or accrued within the taxable 
8.25 	year;
8.26 	(iii) qualified residence interest, as defined in section 163(h) of the Internal Revenue 
8.27 	Code, to the extent allowed as a deduction under section 63(d) of the Internal Revenue 
8.28 	Code; and
8.29 	(iv) charitable contributions, as defined in section 170(c) of the Internal Revenue 
8.30 	Code, to the extent allowed as a deduction under section 170(a) of the Internal Revenue 
8.31 	Code,
8.32 	to the extent allowed as a deduction deductions under section 63(d) of the Internal Revenue 
8.33 	Code, but the addition; but the sum of the additions made under items (i), (ii), (iii), and 
8.34 	(iv) may not be more than the amount by which the itemized deductions as allowed under 
8.35 	section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction 
8.36 	as defined in section 63(c) of the Internal Revenue Code, disregarding the amount amounts
9.1 	allowed under section sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. 
9.2 	For the purpose of this paragraph, the disallowance of itemized deductions under section 
9.3 	68 of the Internal Revenue Code of 1986, income or sales and use tax is, motor vehicle 
9.4 	sales or excise tax, real and personal property taxes, qualified residence interest, and 
9.5 	charitable contributions are the last itemized deduction deductions disallowed; 
9.6 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
9.7 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies; 
9.8 	(4) the amount of income taxes paid or accrued within the taxable year under this 
9.9 	chapter and taxes based on net income paid to any other state or any province or territory 
9.10 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
9.11 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
9.12 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
9.13 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
9.14 	other than expenses or interest used in computing net interest income for the subtraction 
9.15 	allowed under subdivision 19b, clause (1); 
9.16 	(6) the amount of a partner's pro rata share of net income which does not flow 
9.17 	through to the partner because the partnership elected to pay the tax on the income under 
9.18 	section 6242(a)(2) of the Internal Revenue Code; 
9.19 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
9.20 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
9.21 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
9.22 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
9.23 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
9.24 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
9.25 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
9.26 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
9.27 	under section 168(k) is allowed; 
9.28 	(8) for taxable years beginning before January 1, 2009, 80 percent of the amount by 
9.29 	which the deduction allowed by section 179 of the Internal Revenue Code exceeds the 
9.30 	deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended 
9.31 	through December 31, 2003; 
9.32 	(9) to the extent deducted in computing federal taxable income, the amount of the 
9.33 	deduction allowable under section 199 of the Internal Revenue Code; 
9.34 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
9.35 	federal subsidies for prescription drug plans; 
9.36 	(11) the amount of expenses disallowed under section 290.10, subdivision 2;
10.1 	(12) the amount deducted for qualified tuition and related expenses under section 
10.2 	222 of the Internal Revenue Code, to the extent deducted from gross income; 
10.3 	(13) the amount deducted for certain expenses of elementary and secondary school 
10.4 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
10.5 	from gross income; and
10.6 	(14) the additional standard deduction for property taxes payable that is allowable 
10.7 	under section 63(c)(1)(C) of the Internal Revenue Code.; 
10.8 	(15) the additional deduction for qualified motor vehicle sales tax allowable under 
10.9 	section 63(c)(1)(E) of the Internal Revenue Code; and
10.10 	(16) discharge of indebtedness income resulting from reacquisition of business 
10.11 	indebtedness and deferred under section 108(i) of the Internal Revenue Code.

10.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
10.13 	December 31, 2008, except that clause (16) is effective for taxable years ending after 
10.14 	December 31, 2008.

10.15 	Sec. 7. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:
10.16 		Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 
10.17 	and trusts, there shall be subtracted from federal taxable income:
10.18 	(1) net interest income on obligations of any authority, commission, or 
10.19 	instrumentality of the United States to the extent includable in taxable income for federal 
10.20 	income tax purposes but exempt from state income tax under the laws of the United States;
10.21 	(2) if included in federal taxable income, the amount of any overpayment of income 
10.22 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
10.23 	is received as a refund or as a credit to another taxable year's income tax liability;
10.24 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
10.25 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
10.26 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
10.27 	transportation of each qualifying child in attending an elementary or secondary school 
10.28 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
10.29 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
10.30 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
10.31 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
10.32 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
10.33 	"textbooks" includes books and other instructional materials and equipment purchased 
10.34 	or leased for use in elementary and secondary schools in teaching only those subjects 
10.35 	legally and commonly taught in public elementary and secondary schools in this state. 
11.1 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
11.2 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
11.3 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
11.4 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
11.5 	or materials for, or transportation to, extracurricular activities including sporting events, 
11.6 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
11.7 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
11.8 	given in section 32(c)(3) of the Internal Revenue Code;
11.9 	(4) income as provided under section 290.0802;
11.10 	(5) to the extent included in federal adjusted gross income, income realized on 
11.11 	disposition of property exempt from tax under section 290.491;
11.12 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
11.13 	of the Internal Revenue Code in determining federal taxable income by an individual 
11.14 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
11.15 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
11.16 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
11.17 	under the provisions of Public Law 109-1;
11.18 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
11.19 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
11.20 	which is included in gross income under section 87 of the Internal Revenue Code;
11.21 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
11.22 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
11.23 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
11.24 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
11.25 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
11.26 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
11.27 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
11.28 	the extent they exceed the federal foreign tax credit;
11.29 	(9) (3) in each of the five tax years immediately following the tax year in which an 
11.30 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
11.31 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
11.32 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
11.33 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
11.34 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
11.35 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
12.1 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
12.2 	less than zero;
12.3 	(10) job opportunity building zone income as provided under section 469.316;
12.4 	(11) (4) to the extent included in federal taxable income, the amount of compensation 
12.5 	paid to members of the Minnesota National Guard or other reserve components of the 
12.6 	United States military for active service performed in Minnesota, excluding compensation 
12.7 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
12.8 	this clause, "active service" means (i) state active service as defined in section 190.05, 
12.9 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
12.10 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
12.11 	subdivision 5c, but "active service" excludes service performed in accordance with section 
12.12 	190.08, subdivision 3;
12.13 	(12) (5) to the extent included in federal taxable income, the amount of compensation 
12.14 	paid to Minnesota residents who are members of the armed forces of the United States or 
12.15 	United Nations for active duty performed outside Minnesota under United States Code, 
12.16 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
12.17 	the United Nations;
12.18 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
12.19 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
12.20 	to another person for human organ transplantation. For purposes of this clause, "organ" 
12.21 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
12.22 	"human organ transplantation" means the medical procedure by which transfer of a human 
12.23 	organ is made from the body of one person to the body of another person; "qualified 
12.24 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
12.25 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
12.26 	may be subtracted under this clause only once; and "qualified donor" means the individual 
12.27 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
12.28 	individual may claim the subtraction in this clause for each instance of organ donation for 
12.29 	transplantation during the taxable year in which the qualified expenses occur;
12.30 	(14) (6) in each of the five tax years immediately following the tax year in which an 
12.31 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
12.32 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
12.33 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
12.34 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
12.35 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
13.1 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
13.2 	subtraction is not allowed under this clause; 
13.3 	(15) (7) to the extent included in federal taxable income, compensation paid to a 
13.4 	service member as defined in United States Code, title 10, section 101(a)(5), for military 
13.5 	service as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 
13.6 	101(2); and
13.7 	(16) international economic development zone income as provided under section 
13.8 	469.325; and
13.9 	(17) to the extent included in federal taxable income, the amount of national service 
13.10 	educational awards received from the National Service Trust under United States Code, 
13.11 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
13.12 	program.
13.13 	(8) to the extent included in federal taxable income, discharge of indebtedness 
13.14 	income from reacquisition of business indebtedness included in federal taxable income 
13.15 	under section 108(i) of the Internal Revenue Code. This subtraction applies only to the 
13.16 	extent that the income was included in net income in a prior year as a result of the addition 
13.17 	under subdivision 19a, clause (16).

13.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
13.19 	December 31, 2008, except that clause (8) is effective for taxable years ending after 
13.20 	December 31, 2008.

13.21 	Sec. 8. Minnesota Statutes 2008, section 290.01, subdivision 19c, as amended by Laws 
13.22 	2009, chapter 12, article 1, section 4, is amended to read:
13.23 		Subd. 19c. Corporations; additions to federal taxable income. For corporations, 
13.24 	there shall be added to federal taxable income: 
13.25 	(1) the amount of any deduction taken for federal income tax purposes for income, 
13.26 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
13.27 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
13.28 	another state, a political subdivision of another state, the District of Columbia, or any 
13.29 	foreign country or possession of the United States; 
13.30 	(2) interest not subject to federal tax upon obligations of: the United States, its 
13.31 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
13.32 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
13.33 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
13.34 	tribal governments; 
14.1 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
14.2 	Revenue Code; 
14.3 	(4) the amount of any net operating loss deduction taken for federal income tax 
14.4 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
14.5 	deduction under section 810 of the Internal Revenue Code; 
14.6 	(5) the amount of any special deductions taken for federal income tax purposes 
14.7 	under sections 241 to 247 and 965 of the Internal Revenue Code; 
14.8 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
14.9 	clause (a), that are not subject to Minnesota income tax; 
14.10 	(7) the amount of any capital losses deducted for federal income tax purposes under 
14.11 	sections 1211 and 1212 of the Internal Revenue Code; 
14.12 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
14.13 	921(a) and 291 of the Internal Revenue Code; 
14.14 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
14.15 	291 of the Internal Revenue Code; 
14.16 	(10) for certified pollution control facilities placed in service in a taxable year 
14.17 	beginning before December 31, 1986, and for which amortization deductions were elected 
14.18 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
14.19 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
14.20 	income for those facilities; 
14.21 	(11) for taxable years beginning before January 1, 2009, the amount of any deemed 
14.22 	dividend from a foreign operating corporation determined pursuant to section 290.17, 
14.23 	subdivision 4, paragraph (g). The deemed dividend shall be reduced by the amount of the 
14.24 	addition to income required by clauses (20), (21), (22), and (23); 
14.25 	(12) the amount of a partner's pro rata share of net income which does not flow 
14.26 	through to the partner because the partnership elected to pay the tax on the income under 
14.27 	section 6242(a)(2) of the Internal Revenue Code; 
14.28 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
14.29 	Code; 
14.30 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
14.31 	Revenue Code, for the taxable year when subpart F income is calculated without regard to 
14.32 	the provisions of Division C, title III, section 304(a)(1)-(2) 303(b) of Public Law 110-343; 
14.33 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
14.34 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
14.35 	has an activity that in the taxable year generates a deduction for depreciation under 
14.36 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
15.1 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
15.2 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
15.3 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
15.4 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
15.5 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
15.6 	under section 168(k)(1)(A) and (k)(4)(A) is allowed; 
15.7 	(16) for taxable years beginning before January 1, 2009, 80 percent of the amount by 
15.8 	which the deduction allowed by section 179 of the Internal Revenue Code exceeds the 
15.9 	deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended 
15.10 	through December 31, 2003; 
15.11 	(17) to the extent deducted in computing federal taxable income, the amount of the 
15.12 	deduction allowable under section 199 of the Internal Revenue Code; 
15.13 	(18) the exclusion allowed under section 139A of the Internal Revenue Code for 
15.14 	federal subsidies for prescription drug plans; 
15.15 	(19) the amount of expenses disallowed under section 290.10, subdivision 2;
15.16 	(20) an amount equal to the interest and intangible expenses, losses, and costs paid, 
15.17 	accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 
15.18 	of a corporation that is a member of the taxpayer's unitary business group that qualifies 
15.19 	as a foreign operating corporation. For purposes of this clause, intangible expenses and 
15.20 	costs include:
15.21 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
15.22 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
15.23 	intangible property;
15.24 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
15.25 	transactions;
15.26 	(iii) royalty, patent, technical, and copyright fees;
15.27 	(iv) licensing fees; and
15.28 	(v) other similar expenses and costs. 
15.29 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
15.30 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
15.31 	secrets, and similar types of intangible assets.
15.32 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
15.33 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
15.34 	to such item of income to the extent that the income to the foreign operating corporation 
15.35 	is income from sources without the United States as defined in subtitle A, chapter 1, 
15.36 	subchapter N, part 1, of the Internal Revenue Code;
16.1 	(21) except as already included in the taxpayer's taxable income pursuant to clause 
16.2 	(20), any interest income and income generated from intangible property received or 
16.3 	accrued by a foreign operating corporation that is a member of the taxpayer's unitary 
16.4 	group. For purposes of this clause, income generated from intangible property includes:
16.5 	(i) income related to the direct or indirect acquisition, use, maintenance or 
16.6 	management, ownership, sale, exchange, or any other disposition of intangible property;
16.7 	(ii) income from factoring transactions or discounting transactions;
16.8 	(iii) royalty, patent, technical, and copyright fees;
16.9 	(iv) licensing fees; and
16.10 	(v) other similar income.
16.11 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
16.12 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
16.13 	secrets, and similar types of intangible assets. 
16.14 	This clause does not apply to any item of interest or intangible income received or accrued 
16.15 	by a foreign operating corporation with respect to such item of income to the extent that 
16.16 	the income is income from sources without the United States as defined in subtitle A, 
16.17 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
16.18 	(22) the dividends attributable to the income of a foreign operating corporation that 
16.19 	is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
16.20 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
16.21 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
16.22 	foreign operating corporation; 
16.23 	(23) the income of a foreign operating corporation that is a member of the taxpayer's 
16.24 	unitary group in an amount that is equal to gains derived from the sale of real or personal 
16.25 	property located in the United States; and
16.26 	(24) the additional amount allowed as a deduction for donation of computer 
16.27 	technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the 
16.28 	extent deducted from taxable income.; and
16.29 	(25) discharge of indebtedness income resulting from reacquisition of business 
16.30 	indebtedness and deferred under section 108(i) of the Internal Revenue Code.

16.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
16.32 	December 31, 2008, except that clause (25) is effective for taxable years ending after 
16.33 	December 31, 2008.

17.1 	Sec. 9. Minnesota Statutes 2008, section 290.01, subdivision 19d, as amended by Laws 
17.2 	2009, chapter 12, article 1, section 5, is amended to read:
17.3 		Subd. 19d. Corporations; modifications decreasing federal taxable income. For 
17.4 	corporations, there shall be subtracted from federal taxable income after the increases 
17.5 	provided in subdivision 19c: 
17.6 	(1) the amount of foreign dividend gross-up added to gross income for federal 
17.7 	income tax purposes under section 78 of the Internal Revenue Code; 
17.8 	(2) the amount of salary expense not allowed for federal income tax purposes due to 
17.9 	claiming the work opportunity credit under section 51 of the Internal Revenue Code; 
17.10 	(3) any dividend (not including any distribution in liquidation) paid within the 
17.11 	taxable year by a national or state bank to the United States, or to any instrumentality of 
17.12 	the United States exempt from federal income taxes, on the preferred stock of the bank 
17.13 	owned by the United States or the instrumentality; 
17.14 	(4) amounts disallowed for intangible drilling costs due to differences between 
17.15 	this chapter and the Internal Revenue Code in taxable years beginning before January 
17.16 	1, 1987, as follows: 
17.17 	(i) to the extent the disallowed costs are represented by physical property, an amount 
17.18 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
17.19 	subdivision 7, subject to the modifications contained in subdivision 19e; and 
17.20 	(ii) to the extent the disallowed costs are not represented by physical property, an 
17.21 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
17.22 	290.09, subdivision 8; 
17.23 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
17.24 	Internal Revenue Code, except that: 
17.25 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
17.26 	capital loss carrybacks shall not be allowed; 
17.27 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
17.28 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
17.29 	allowed; 
17.30 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
17.31 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
17.32 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and 
17.33 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
17.34 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
17.35 	extent such loss was not used in a prior taxable year and subject to the provisions of 
17.36 	Minnesota Statutes 1986, section 290.16, shall be allowed; 
18.1 	(6) an amount for interest and expenses relating to income not taxable for federal 
18.2 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
18.3 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
18.4 	291 of the Internal Revenue Code in computing federal taxable income; 
18.5 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
18.6 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a 
18.7 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
18.8 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
18.9 	by the commissioner. In the case of property held in trust, the allowable deduction must 
18.10 	be apportioned between the income beneficiaries and the trustee in accordance with the 
18.11 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
18.12 	of the trust's income allocable to each; 
18.13 	(8) for certified pollution control facilities placed in service in a taxable year 
18.14 	beginning before December 31, 1986, and for which amortization deductions were elected 
18.15 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
18.16 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
18.17 	1986, section 290.09, subdivision 7; 
18.18 	(9) amounts included in federal taxable income that are due to refunds of income, 
18.19 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
18.20 	corporation to Minnesota, another state, a political subdivision of another state, the 
18.21 	District of Columbia, or a foreign country or possession of the United States to the extent 
18.22 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
18.23 	clause (1), in a prior taxable year; 
18.24 	(10) 80 percent of royalties, fees, or other like income accrued or received from a 
18.25 	foreign operating corporation or a foreign corporation which is part of the same unitary 
18.26 	business as the receiving corporation, unless the income resulting from such payments or 
18.27 	accruals is income from sources within the United States as defined in subtitle A, chapter 
18.28 	1, subchapter N, part 1, of the Internal Revenue Code; 
18.29 	(11) (10) income or gains from the business of mining as defined in section 290.05, 
18.30 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax; 
18.31 	(12) (11) the amount of disability access expenditures in the taxable year which are 
18.32 	not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue 
18.33 	Code; 
18.34 	(13) (12) the amount of qualified research expenses not allowed for federal income 
18.35 	tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent 
18.36 	that the amount exceeds the amount of the credit allowed under section 290.068; 
19.1 	(14) (13) the amount of salary expenses not allowed for federal income tax purposes 
19.2 	due to claiming the Indian employment credit under section 45A(a) of the Internal 
19.3 	Revenue Code; 
19.4 	(15) (14) for taxable years beginning before January 1, 2008, the amount of the 
19.5 	federal small ethanol producer credit allowed under section 40(a)(3) of the Internal 
19.6 	Revenue Code which is included in gross income under section 87 of the Internal Revenue 
19.7 	Code; 
19.8 	(16) (15) for a corporation whose foreign sales corporation, as defined in section 
19.9 	922 of the Internal Revenue Code, constituted a foreign operating corporation during any 
19.10 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
19.11 	claiming the deduction under section 290.21, subdivision 4, for income received from 
19.12 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
19.13 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
19.14 	not income of a foreign operating company; 
19.15 	(17) (16) any decrease in subpart F income, as defined in section 952(a) of the 
19.16 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
19.17 	regard to the provisions of Division C, title III, section 304(a)(1)-(2) 303(b) of Public 
19.18 	Law 110-343; 
19.19 	(18) (17) in each of the five tax years immediately following the tax year in which 
19.20 	an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth 
19.21 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
19.22 	the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The 
19.23 	resulting delayed depreciation cannot be less than zero; and
19.24 	(19) (18) in each of the five tax years immediately following the tax year in which an 
19.25 	addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of 
19.26 	the amount of the addition.; and
19.27 	(19) to the extent included in federal taxable income, discharge of indebtedness 
19.28 	income from reacquisition of business indebtedness included in federal taxable income 
19.29 	under section 108(i) of the Internal Revenue Code. This subtraction applies only to the 
19.30 	extent that the income was included in net income in a prior year as a result of the addition 
19.31 	under subdivision 19c, clause (25).

19.32 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
19.33 	December 31, 2008, except that clause (19) is effective for taxable years ending after 
19.34 	December 31, 2008.

19.35 	Sec. 10. Minnesota Statutes 2008, section 290.01, subdivision 29, is amended to read:
20.1 		Subd. 29.Taxable income. The term "taxable income" means:
20.2 	(1) for individuals, estates, and trusts, the same as taxable net income;
20.3 	(2) for corporations, the taxable net income less
20.4 	(i) the net operating loss deduction under section 290.095; and
20.5 	(ii) the dividends received deduction under section 290.21, subdivision 4; plus
20.6 	(iii) the exemption for operating in a job opportunity building zone under section 
20.7 	469.317; Minnesota development subsidies.
20.8 	(iv) the exemption for operating in a biotechnology and health sciences industry 
20.9 	zone under section 469.337; and
20.10 	(v) the exemption for operating in an international economic development zone 
20.11 	under section 469.326.

20.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
20.13 	December 31, 2009.

20.14 	Sec. 11. Minnesota Statutes 2008, section 290.01, subdivision 31, as amended by Laws 
20.15 	2009, chapter 12, article 1, section 7, is amended to read:
20.16 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
20.17 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
20.18 	31, 2008 March 31, 2009. Internal Revenue Code also includes any uncodified provision 
20.19 	in federal law that relates to provisions of the Internal Revenue Code that are incorporated 
20.20 	into Minnesota law.

20.21 	EFFECTIVE DATE. This section is effective the day following final enactment, 
20.22 	except the changes incorporated by federal changes are effective at the same time as the 
20.23 	changes were effective for federal purposes.

20.24 	Sec. 12. Minnesota Statutes 2008, section 290.01, is amended by adding a subdivision 
20.25 	to read:
20.26 		Subd. 33.Minnesota development subsidies. (a) "Minnesota development 
20.27 	subsidies" means the greater of the following amounts:
20.28 	(1) one-half of the amount deducted by the taxpayer in computing federal taxable 
20.29 	income for the taxable year, as property taxes, business expenses, or otherwise, that is 
20.30 	attributable to property taxes paid by the taxpayer, either directly or indirectly through a 
20.31 	lease or otherwise, on property located in a tax increment financing district, as defined in 
20.32 	section 469.174, or that receives an abatement under sections 469.1813 to 469.1815, if the 
20.33 	owner of the property or a related party has entered a development or similar agreement 
21.1 	with respect to the increment district or derives a benefit from the abatement by its 
21.2 	property having access to or use of public improvements financed with the abatement or 
21.3 	otherwise; or
21.4 	(2) the amount of payments received by the taxpayer under a development or similar 
21.5 	agreement that provides for payments or reimbursements from the proceeds of increments 
21.6 	from a tax increment financing district or from an abatement under sections 469.1813 to 
21.7 	469.1815, but excluding reimbursements under a development action response plan, as 
21.8 	defined in section 469.174, subdivision 17, to pay for its costs incurred to fund removal 
21.9 	or remedial actions.
21.10 	(b) For purposes of this subdivision, "tax increment financing district" excludes:
21.11 	(1) a housing district, as defined in section 469.174, subdivision 11;
21.12 	(2) a soils condition district, as defined in section 469.174, subdivision 19; and
21.13 	(3) a hazardous substance subdistrict, as defined in section 469.174, subdivision 23.

21.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
21.15 	December 31, 2009.

21.16 	Sec. 13. Minnesota Statutes 2008, section 290.01, is amended by adding a subdivision 
21.17 	to read:
21.18 		Subd. 34.Qualified obligations. (a) "Qualified obligations" means:
21.19 	(1) obligations of the state of Minnesota or a political or governmental subdivision, 
21.20 	municipality, or governmental agency or instrumentality of the state of Minnesota if the 
21.21 	obligations were sold before July 1, 2009; or
21.22 	(2) general obligations of the state of Minnesota sold after June 30, 2009, if the 
21.23 	commissioner of finance elects to issue the obligations exempt from taxation under 
21.24 	sections 290.06, subdivision 2c, and 290.091. The commissioner shall make the election 
21.25 	only if, in the commissioner's opinion, doing so is in the best interest of the state because it 
21.26 	will reduce the state's net borrowing costs. Prior to making the election, the commissioner 
21.27 	shall estimate whether (i) the present value of the reduction in state borrowing costs due to 
21.28 	issuing the obligations exempt from taxation under sections 290.06 and 290.091 exceeds 
21.29 	(ii) the present value of the revenues the state would collect if the obligations were 
21.30 	issued subject to taxation under sections 290.06 and 290.091. In making the estimate, 
21.31 	the commissioner may rely on data from past issuances of obligations by the state and 
21.32 	other states without income taxes or that impose their state income taxes on their bonds, 
21.33 	judgments about current market conditions, and any other relevant information, and the 
21.34 	commissioner shall use a reasonable methodology for preparing the estimate after seeking 
21.35 	advice and comments from the state economist or another qualified professional economist.
22.1 	(b) If the commissioner of finance elects to issue qualified obligations under 
22.2 	paragraph (a), clause (2), the commissioner must provide a written report to the chairs 
22.3 	of the committees of the senate and the house of representatives with jurisdiction over 
22.4 	taxes and capital investment on the decision to issue qualified obligations, including the 
22.5 	estimate of the net savings in borrowing costs from the use of qualified obligations and 
22.6 	a detailed description of how the estimate was prepared. This report must be provided 
22.7 	within 15 days after the bonds are sold.
22.8 	(c) The authority to issue tax-exempt obligations under paragraph (a), clause (2), 
22.9 	expires July 1, 2011. If the commissioner of finance elects to issue tax-exempt bonds 
22.10 	under this section during calendar year 2009 or 2010, the commissioner shall prepare a 
22.11 	report for the 2011 legislature evaluating whether the issuance resulted in a net reduction 
22.12 	in state borrowing costs, taking into account the effects of the tax exemption, and shall file 
22.13 	the report by January 31, 2011, under the provisions of Minnesota Statutes, section 3.195.

22.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
22.15 	December 31, 2008. 

22.16 	Sec. 14. Minnesota Statutes 2008, section 290.014, subdivision 2, is amended to read:
22.17 		Subd. 2.Nonresident individuals. Except as provided in section 290.015, a 
22.18 	nonresident individual is subject to the return filing requirements and to tax as provided in 
22.19 	this chapter to the extent that the income of the nonresident individual is:  
22.20 	(1) allocable to this state under section 290.17, 290.191, or 290.20;  
22.21 	(2) taxed to the individual under the Internal Revenue Code (or not taxed under the 
22.22 	Internal Revenue Code by reason of its character but of a character which is taxable under 
22.23 	this chapter) in the individual's capacity as a beneficiary of an estate with income allocable 
22.24 	to this state under section 290.17, 290.191, or 290.20 and the income, taking into account 
22.25 	the income character provisions of section 662(b) of the Internal Revenue Code, would be 
22.26 	allocable to this state under section 290.17, 290.191, or 290.20 if realized by the individual 
22.27 	directly from the source from which realized by the estate;  
22.28 	(3) taxed to the individual under the Internal Revenue Code (or not taxed under the 
22.29 	Internal Revenue Code by reason of its character but of a character that is taxable under 
22.30 	this chapter) in the individual's capacity as a beneficiary or grantor or other person treated 
22.31 	as a substantial owner of a trust with income allocable to this state under section 290.17, 
22.32 	290.191, or 290.20 and the income, taking into account the income character provisions of 
22.33 	section 652(b), 662(b), or 664(b) of the Internal Revenue Code, would be allocable to this 
22.34 	state under section 290.17, 290.191, or 290.20 if realized by the individual directly from 
22.35 	the source from which realized by the trust;  
23.1 	(4) taxed to the individual under the Internal Revenue Code (or not taxed under the 
23.2 	Internal Revenue Code by reason of its character but of a character which is taxable under 
23.3 	this chapter) in the individual's capacity as a limited or general partner in a partnership 
23.4 	with income allocable to this state under section 290.17, 290.191, or 290.20 and the 
23.5 	income, taking into account the income character provisions of section 702(b) of the 
23.6 	Internal Revenue Code, would be allocable to this state under section 290.17, 290.191, 
23.7 	or 290.20 if realized by the individual directly from the source from which realized by 
23.8 	the partnership; or
23.9 	(5) taxed to the individual under the Internal Revenue Code (or not taxed under the 
23.10 	Internal Revenue Code by reason of its character but of a character which is taxable under 
23.11 	this chapter) in the individual's capacity as a shareholder of a corporation treated as an 
23.12 	"S" corporation under section 290.9725, and income allocable to this state under section 
23.13 	290.17, 290.191, or 290.20 and the income, taking into account the income character 
23.14 	provisions of section 1366(b) of the Internal Revenue Code, would be allocable to this 
23.15 	state under section 290.17, 290.191, or 290.20 if realized by the individual directly from 
23.16 	the source from which realized by the corporation.; or
23.17 	(6) taxed to the individual under the Internal Revenue Code (or not taxed under the 
23.18 	Internal Revenue Code by reason of its character but of a character which is taxable under 
23.19 	this chapter) in the individual's capacity as the sole member of a limited liability company 
23.20 	that is disregarded for federal income tax purposes, with income allocable to this state 
23.21 	under section 290.17, 290.191, or 290.20, as though realized by the individual directly 
23.22 	from the source from which it was realized by the limited liability company.

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

23.24 	Sec. 15. Minnesota Statutes 2008, section 290.06, subdivision 2c, is amended to read:
23.25 		Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income 
23.26 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
23.27 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
23.28 	applying to their taxable net income the following schedule of rates:
23.29 	(1) on the first $25,680 $33,220, 5.35 percent;
23.30 	(2) on all over $25,680 $33,220, but not over $102,030 $131,970, 7.05 percent;
23.31 	(3) on all over $102,030 $131,970, but not over $300,000, 7.85 percent.; and
23.32 	(4) on all over $300,000, nine percent.
23.33 	Married individuals filing separate returns, estates, and trusts must compute their 
23.34 	income tax by applying the above rates to their taxable income, except that the income 
23.35 	brackets will be one-half of the above amounts.
24.1 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
24.2 	computed by applying to taxable net income the following schedule of rates:
24.3 	(1) on the first $17,570 $22,730, 5.35 percent;
24.4 	(2) on all over $17,570 $22,730, but not over $57,710 $74,650, 7.05 percent;
24.5 	(3) on all over $57,710 $74,650, but not over $169,700, 7.85 percent.; and
24.6 	(4) on all over $169,700, nine percent.
24.7 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
24.8 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
24.9 	computed by applying to taxable net income the following schedule of rates:
24.10 	(1) on the first $21,630 $27,980, 5.35 percent;
24.11 	(2) on all over $21,630 $27,980, but not over $86,910 $112,420, 7.05 percent;
24.12 	(3) on all over $86,910 $112,420, but not over $255,560, 7.85 percent.; and
24.13 	(4) on all over $255,560, nine percent.
24.14 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
24.15 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
24.16 	an amount determined by the commissioner must be computed in accordance with tables 
24.17 	prepared and issued by the commissioner of revenue based on income brackets of not 
24.18 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
24.19 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
24.20 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
24.21 	(e) An individual who is not a Minnesota resident for the entire year must compute 
24.22 	the individual's Minnesota income tax as provided in this subdivision. After the 
24.23 	application of the nonrefundable credits provided in this chapter, the tax liability must 
24.24 	then be multiplied by a fraction in which:
24.25 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
24.26 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
24.27 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), 
24.28 	and (13), and (16), and reduced by the Minnesota assignable portion of the subtraction 
24.29 	for United States government interest under section 290.01, subdivision 19b, clause (1), 
24.30 	and the subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), 
24.31 	and (16) (3), (6), (7), and (8), after applying the allocation and assignability provisions of 
24.32 	section 290.081, clause (a), or 290.17; and
24.33 	(2) the denominator is the individual's federal adjusted gross income as defined in 
24.34 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
24.35 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and (13), and (16),
25.1 	and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), (9), 
25.2 	(10), (14), (15), and (16) (3), (6), (7), and (8).

25.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
25.4 	December 31, 2008.

25.5 	Sec. 16. Minnesota Statutes 2008, section 290.06, subdivision 2d, is amended to read:
25.6 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
25.7 	December 31, 2000 2009, the minimum and maximum dollar amounts for each rate 
25.8 	bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the 
25.9 	percentage determined under paragraph (b). For the purpose of making the adjustment as 
25.10 	provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the 
25.11 	rate brackets as they existed for taxable years beginning after December 31, 1999 2008, 
25.12 	and before January 1, 2001 2010. The rate applicable to any rate bracket must not be 
25.13 	changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes 
25.14 	in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10 
25.15 	amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
25.16 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
25.17 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that:
25.18 	(1) in section 1(f)(2)(A) the words "increasing or decreasing" shall be substituted 
25.19 	for the word "increasing";
25.20 	(2) in section 1(f)(3)(A) the words "differs from" shall be substituted for the word 
25.21 	"exceeds"; and 
25.22 	(3) in section 1(f)(3)(B) the word "1999" "2008" shall be substituted for the word 
25.23 	"1992." For 2001 2010, the commissioner shall then determine the percent change from 
25.24 	the 12 months ending on August 31, 1999 2008, to the 12 months ending on August 31, 
25.25 	2000 2009, and in each subsequent year, from the 12 months ending on August 31, 1999
25.26 	2008, to the 12 months ending on August 31 of the year preceding the taxable year. The 
25.27 	determination of the commissioner pursuant to this subdivision shall not be considered a 
25.28 	"rule" and shall not be subject to the Administrative Procedure Act contained in chapter 14.
25.29 	No later than December 15 of each year, the commissioner shall announce the 
25.30 	specific percentage that will be used to adjust the tax rate brackets.

25.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
25.32 	December 31, 2008.

26.1 	Sec. 17. Minnesota Statutes 2008, section 290.06, is amended by adding a subdivision 
26.2 	to read:
26.3 		Subd. 36.Mortgage interest credit. (a) An individual is allowed a credit against 
26.4 	the tax imposed by this chapter equal to seven percent of the lesser of:
26.5 	(1) $6,000; or
26.6 	(2) qualified residence interest deduction for which the individual is eligible under 
26.7 	section 63(d) of the Internal Revenue Code, minus $4,000.
26.8 	(b) The amount of the credit allowed must be reduced by the amount of the 
26.9 	taxpayer's liability under section 290.091, determined before the credit allowed by this 
26.10 	section is subtracted from regular tax liability.
26.11 	(c) For a nonresident or part-year resident, the credit must be allocated based on the 
26.12 	percentage calculated under subdivision 2c, paragraph (e).

26.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
26.14 	December 31, 2008.

26.15 	Sec. 18. Minnesota Statutes 2008, section 290.06, is amended by adding a subdivision 
26.16 	to read:
26.17 		Subd. 37.Charitable contributions credit. (a) An individual is allowed a credit 
26.18 	against the tax imposed by this chapter equal to eight percent of the amount by which 
26.19 	eligible charitable contributions exceed the greater of:
26.20 	(1) two percent of the individual's adjusted gross income for the taxable year; or
26.21 	(2) $500.
26.22 	(b) For purposes of this subdivision, "eligible charitable contributions" means 
26.23 	charitable contributions allowable as a deduction for the taxable year under section 
26.24 	170(a) of the Internal Revenue Code, subject to the limitations of section 170(b) of the 
26.25 	Internal Revenue Code, and determined without regard to whether or not the taxpayers 
26.26 	itemize deductions.
26.27 	(c) For purposes of this subdivision, "adjusted gross income" has the meaning given 
26.28 	in section 62 of the Internal Revenue Code.
26.29 	(d) For a nonresident or part-year resident, the credit must be allocated based on the 
26.30 	percentage calculated under subdivision 2c, paragraph (e).

26.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
26.32 	December 31, 2008.

26.33 	Sec. 19. Minnesota Statutes 2008, section 290.0671, subdivision 1, is amended to read:
27.1 		Subdivision 1.Credit allowed. (a) An individual is allowed a credit against the tax 
27.2 	imposed by this chapter equal to a percentage of earned income. To receive a credit, a 
27.3 	taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
27.4 	(b) For individuals with no qualifying children, the credit equals 1.9125 percent of 
27.5 	the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned 
27.6 	income or adjusted gross income, whichever is greater, in excess of $5,770, but in no 
27.7 	case is the credit less than zero.
27.8 	(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first 
27.9 	$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than 
27.10 	$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income, 
27.11 	whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
27.12 	(d) For individuals with two or more qualifying children, the credit equals ten 
27.13 	percent of the first $9,720 of earned income and 20 percent of earned income over 
27.14 	$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income 
27.15 	or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is 
27.16 	the credit less than zero.
27.17 	(e) For a nonresident or part-year resident, the credit must be allocated based on the 
27.18 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).
27.19 	(f) For a person who was a resident for the entire tax year and has earned income 
27.20 	not subject to tax under this chapter, including income excluded under section 290.01, 
27.21 	subdivision 19b, clause (10) or (16), the credit must be allocated based on the ratio of 
27.22 	federal adjusted gross income reduced by the earned income not subject to tax under 
27.23 	this chapter over federal adjusted gross income. For purposes of this paragraph, the 
27.24 	subtractions for military pay under section 290.01, subdivision 19b, clauses (11) and (12)
27.25 	(4) and (5), are not considered "earned income not subject to tax under this chapter."
27.26 	For the purposes of this paragraph, the exclusion of combat pay under section 112 
27.27 	of the Internal Revenue Code is not considered "earned income not subject to tax under 
27.28 	this chapter."
27.29 	(g) For tax years beginning after December 31, 2001, and before December 31, 
27.30 	2004, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in 
27.31 	paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by 
27.32 	$1,000 for married taxpayers filing joint returns.
27.33 	(h) For tax years beginning after December 31, 2004, and before December 31, 
27.34 	2007, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in 
27.35 	paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by 
27.36 	$2,000 for married taxpayers filing joint returns.
28.1 	(i) For tax years beginning after December 31, 2007, and before December 31, 2010, 
28.2 	the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph 
28.3 	(d), after being adjusted for inflation under subdivision 7, are each increased by $3,000 for 
28.4 	married taxpayers filing joint returns. For tax years beginning after December 31, 2008, 
28.5 	the $3,000 is adjusted annually for inflation under subdivision 7.
28.6 	(j) The commissioner shall construct tables showing the amount of the credit at 
28.7 	various income levels and make them available to taxpayers. The tables shall follow 
28.8 	the schedule contained in this subdivision, except that the commissioner may graduate 
28.9 	the transition between income brackets.

28.10 	Sec. 20. Minnesota Statutes 2008, section 290.068, subdivision 1, is amended to read:
28.11 		Subdivision 1.Credit allowed. A corporation, other than a corporation treated as an 
28.12 	"S" corporation under section 290.9725, taxpayer is allowed a credit against the portion 
28.13 	of the franchise tax computed under section 290.06, subdivision 1, for the taxable year 
28.14 	equal to:  
28.15 	(a) 5 (1) ten percent of the first $2,000,000 of the excess (if any) of
28.16 	(1)(i) the qualified research expenses for the taxable year, over
28.17 	(2)(ii) the base amount; and
28.18 	(b)(2) 2.5 percent on all of such excess expenses over $2,000,000.

28.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
28.20 	December 31, 2008.

28.21 	Sec. 21. Minnesota Statutes 2008, section 290.068, subdivision 3, is amended to read:
28.22 		Subd. 3.Limitation; carryover. (a)(1) The credit for the taxable year shall not 
28.23 	exceed the liability for tax. "Liability for tax" for purposes of this section means the tax 
28.24 	imposed under section 290.06, subdivision 1, for the taxable year reduced by the sum of 
28.25 	the nonrefundable credits allowed under this chapter.
28.26 	(2) In the case of a corporation which is For a partner in a partnership and for a 
28.27 	shareholder in an S corporation, the credit allowed for the taxable year shall not exceed 
28.28 	the lesser of the amount determined under clause (1) for the taxable year or an amount 
28.29 	(separately computed with respect to the corporation's taxpayer's interest in the trade or 
28.30 	business or entity) equal to the amount of tax attributable to that portion of taxable income 
28.31 	which is allocable or apportionable to the corporation's taxpayer's interest in the trade or 
28.32 	business or entity.
28.33 	(b) If the amount of the credit determined under this section for any taxable year 
28.34 	exceeds the limitation under clause (a), the excess shall be a research credit carryover to 
29.1 	each of the 15 succeeding taxable years. The entire amount of the excess unused credit for 
29.2 	the taxable year shall be carried first to the earliest of the taxable years to which the credit 
29.3 	may be carried and then to each successive year to which the credit may be carried. The 
29.4 	amount of the unused credit which may be added under this clause shall not exceed the 
29.5 	taxpayer's liability for tax less the research credit for the taxable year.

29.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
29.7 	December 31, 2008.

29.8 	Sec. 22. Minnesota Statutes 2008, section 290.068, subdivision 4, is amended to read:
29.9 		Subd. 4.Partnerships and S corporations. In the case of partnerships and S 
29.10 	corporations the credit shall be allocated in the same manner provided by sectionsections 
29.11 	41(f)(2) and 41(g) of the Internal Revenue Code.

29.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
29.13 	December 31, 2008.

29.14 	Sec. 23. [290.0682] MINNESOTA CHILD CREDIT.
29.15 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
29.16 	have the meanings given.
29.17 	(b) "Adjusted gross income" has the meaning given in section 62 of the Internal 
29.18 	Revenue Code.
29.19 	(c) "Qualifying child" has the meaning given in section 24(c) of the Internal 
29.20 	Revenue Code.
29.21 		Subd. 2.Credit allowed. (a) An individual is allowed a credit against the tax 
29.22 	imposed by this chapter equal to the lesser of:
29.23 	(1) $200 for each qualifying child; or
29.24 	(2) ten percent of adjusted gross income in excess of $14,000.
29.25 	(b) The credit allowed in paragraph (a) is reduced by an amount equal to five percent 
29.26 	of adjusted gross income in excess of $28,000, but in no case is the credit less than zero.
29.27 	(c) For a nonresident or part-year resident, the credit must be allocated based on the 
29.28 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).
29.29 		Subd. 3.Credit refundable. If the amount of credit that an individual is eligible 
29.30 	to receive under this section exceeds the claimant's tax liability under this chapter, the 
29.31 	commissioner shall refund the excess to the claimant.
29.32 		Subd. 4.Appropriation. An amount sufficient to pay the refunds required by this 
29.33 	section is appropriated to the commissioner from the general fund.
30.1 		Subd. 5.Inflation adjustment. The adjusted gross income floor in subdivision 2, 
30.2 	paragraph (a), clause (2), and the phaseout threshold in subdivision 2, paragraph (b), 
30.3 	must be adjusted for inflation. For tax years beginning after December 31, 2009, the 
30.4 	commissioner shall annually adjust the adjusted gross income floor and the phaseout 
30.5 	threshold by the percentage determined pursuant to section 1(f) of the Internal Revenue 
30.6 	Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for the word 
30.7 	"1992." For 2010, the commissioner shall then determine the percent change from the 
30.8 	12 months ending on August 31, 2008, to the 12 months ending on August 31, 2009, 
30.9 	and in each subsequent year, from the 12 months ending on August 31, 2008, to the 12 
30.10 	months ending on August 31 of the year preceding the taxable year. The adjusted gross 
30.11 	income floor and the phaseout threshold as adjusted for inflation must be rounded to 
30.12 	the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10. 
30.13 	The determination of the commissioner under this subdivision is not a rule under the 
30.14 	Administrative Procedure Act.

30.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
30.16 	December 31, 2008.

30.17 	Sec. 24. Minnesota Statutes 2008, section 290.091, subdivision 2, is amended to read:
30.18 		Subd. 2. Definitions. For purposes of the tax imposed by this section, the following 
30.19 	terms have the meanings given: 
30.20 	(a) "Alternative minimum taxable income" means the sum of the following for 
30.21 	the taxable year: 
30.22 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
30.23 	55(b)(2) of the Internal Revenue Code; 
30.24 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
30.25 	minimum taxable income, but excluding: 
30.26 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
30.27 	Code;
30.28 	(ii) (i) the medical expense deduction; 
30.29 	(iii) (ii) the casualty, theft, and disaster loss deduction; and 
30.30 	(iv) (iii) the impairment-related work expenses of a disabled person; 
30.31 	(3) for depletion allowances computed under section 613A(c) of the Internal 
30.32 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
30.33 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
30.34 	the excess of the deduction for depletion allowable under section 611 of the Internal 
31.1 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
31.2 	taxable year (determined without regard to the depletion deduction for the taxable year); 
31.3 	(4) to the extent not included in federal alternative minimum taxable income, the 
31.4 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
31.5 	Internal Revenue Code determined without regard to subparagraph (E); 
31.6 	(5) to the extent not included in federal alternative minimum taxable income, the 
31.7 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and 
31.8 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 
31.9 	to (9), (12), and (13), and (16); 
31.10 	less the sum of the amounts determined under the following: 
31.11 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1); 
31.12 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
31.13 	19b, clause (2), to the extent included in federal alternative minimum taxable income; 
31.14 	(3) the amount of investment interest paid or accrued within the taxable year on 
31.15 	indebtedness to the extent that the amount does not exceed net investment income, as 
31.16 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
31.17 	amounts deducted in computing federal adjusted gross income; and 
31.18 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
31.19 	subdivision 19b, clauses (6) and (9) to (16) (3) to (8). 
31.20 	In the case of an estate or trust, alternative minimum taxable income must be 
31.21 	computed as provided in section 59(c) of the Internal Revenue Code. 
31.22 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
31.23 	of the Internal Revenue Code. 
31.24 	(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
31.25 	income after subtracting the exemption amount determined under subdivision 3. 
31.26 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
31.27 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
31.28 	credits allowed under this chapter. 
31.29 	(e) "Net minimum tax" means the minimum tax imposed by this section. 

31.30 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
31.31 	December 31, 2008.

31.32 	Sec. 25. Minnesota Statutes 2008, section 290.0921, subdivision 3, is amended to read:
31.33 		Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable 
31.34 	income" is Minnesota net income as defined in section 290.01, subdivision 19, and 
31.35 	includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 
32.1 	(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 
32.2 	Minnesota tax return, the minimum tax must be computed on a separate company basis. 
32.3 	If a corporation is part of a tax group filing a unitary return, the minimum tax must be 
32.4 	computed on a unitary basis. The following adjustments must be made. 
32.5 	(1) For purposes of the depreciation adjustments under section 56(a)(1) and 
32.6 	56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 
32.7 	service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 
32.8 	income tax purposes, including any modification made in a taxable year under section 
32.9 	290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7, 
32.10 	paragraph (c). 
32.11 	For taxable years beginning after December 31, 2000, the amount of any remaining 
32.12 	modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 
32.13 	section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 
32.14 	allowance in the first taxable year after December 31, 2000. 
32.15 	(2) The portion of the depreciation deduction allowed for federal income tax 
32.16 	purposes under section 168(k) of the Internal Revenue Code that is required as an 
32.17 	addition under section 290.01, subdivision 19c, clause (15), is disallowed in determining 
32.18 	alternative minimum taxable income. 
32.19 	(3) The subtraction for depreciation allowed under section 290.01, subdivision 
32.20 	19d, clause (18) (17), is allowed as a depreciation deduction in determining alternative 
32.21 	minimum taxable income. 
32.22 	(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
32.23 	of the Internal Revenue Code does not apply. 
32.24 	(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
32.25 	Revenue Code does not apply. 
32.26 	(6) The special rule for dividends from section 936 companies under section 
32.27 	56(g)(4)(C)(iii) does not apply. 
32.28 	(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue 
32.29 	Code does not apply. 
32.30 	(8) The tax preference for intangible drilling costs under section 57(a)(2) of the 
32.31 	Internal Revenue Code must be calculated without regard to subparagraph (E) and the 
32.32 	subtraction under section 290.01, subdivision 19d, clause (4). 
32.33 	(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 
32.34 	Revenue Code does not apply. 
32.35 	(10) The tax preference for charitable contributions of appreciated property under 
32.36 	section 57(a)(6) of the Internal Revenue Code does not apply. 
33.1 	(11) For purposes of calculating the tax preference for accelerated depreciation or 
33.2 	amortization on certain property placed in service before January 1, 1987, under section 
33.3 	57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 
33.4 	deduction allowed under section 290.01, subdivision 19e. 
33.5 	For taxable years beginning after December 31, 2000, the amount of any remaining 
33.6 	modification made under section 290.01, subdivision 19e, not previously deducted is a 
33.7 	depreciation or amortization allowance in the first taxable year after December 31, 2004. 
33.8 	(12) For purposes of calculating the adjustment for adjusted current earnings in 
33.9 	section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 
33.10 	income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 
33.11 	minimum taxable income as defined in this subdivision, determined without regard to the 
33.12 	adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code. 
33.13 	(13) For purposes of determining the amount of adjusted current earnings under 
33.14 	section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 
33.15 	56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend 
33.16 	gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), or (ii) the 
33.17 	amount of refunds of income, excise, or franchise taxes subtracted as provided in section 
33.18 	290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other like 
33.19 	income subtracted as provided in section 290.01, subdivision 19d, clause (10). 
33.20 	(14) Alternative minimum taxable income excludes the income from operating in a 
33.21 	job opportunity building zone as provided under section 469.317.
33.22 	(15) Alternative minimum taxable income excludes the income from operating in a 
33.23 	biotechnology and health sciences industry zone as provided under section 469.337.
33.24 	(16) Alternative minimum taxable income excludes the income from operating in an 
33.25 	international economic development zone as provided under section 469.326.
33.26 	(14) Alternative minimum taxable income includes Minnesota development 
33.27 	subsidies.
33.28 	Items of tax preference must not be reduced below zero as a result of the 
33.29 	modifications in this subdivision. 

33.30 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
33.31 	December 31, 2009, except the changes to clauses (3) and (13) and the new clause (14) are 
33.32 	effective for taxable years beginning after December 31, 2008.

33.33 	Sec. 26. Minnesota Statutes 2008, section 290.0922, subdivision 1, is amended to read:
33.34 		Subdivision 1.Imposition. (a) In addition to the tax imposed by this chapter without 
33.35 	regard to this section, the franchise tax imposed on a corporation required to file under 
34.1 	section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation 
34.2 	under section 290.9725 for the taxable year includes a tax equal to the following amounts:

34.3
34.4
34.5	If the sum of the corporation's Minnesota 
property, payrolls, and sales or receipts 
is:
		the tax equals:
	
34.6			less than
	$
	500,000
		$
	0
		
34.7		$
	500,000 to
	$
	999,999
		$
	100
		
34.8		$
	1,000,000 to
	$
	4,999,999
		$
	300
		
34.9		$
	5,000,000 to
	$
	9,999,999
		$
	1,000
		
34.10		$
	10,000,000 to
	$
	19,999,999
		$
	2,000
		
34.11		$
	20,000,000 or more
		$
	5,000
		
34.12			less than
	$
	830,000
		$
	0
		
34.13		$
	830,000 to
	$
	1,659,999
		$
	170
		
34.14		$
	1,660,000 to
	$
	8,319,999
		$
	500
		
34.15		$
	8,320,000 to
	$
	16,649,999
		$
	1,660
		
34.16		$
	16,650,000 to
	$
	33,299,999
		$
	3,330
		
34.17		$
	33,300,000 or more
		$
	8,320
		
34.18 	(b) A tax is imposed for each taxable year on a corporation required to file a return 
34.19 	under section 289A.12, subdivision 3, that is treated as an "S" corporation under section 
34.20 	290.9725 and on a partnership required to file a return under section 289A.12, subdivision 
34.21 	3, other than a partnership that derives over 80 percent of its income from farming. The 
34.22 	tax imposed under this paragraph is due on or before the due date of the return for the 
34.23 	taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe 
34.24 	the return to be used for payment of this tax. The tax under this paragraph is equal to 
34.25 	the following amounts:

34.26
34.27
34.28	If the sum of the S corporation's or 
partnership's Minnesota property, 
payrolls, and sales or receipts is:
			the tax equals:
	
34.29			less than
	$
	500,000
		$
	0
		
34.30		$
	500,000 to
	$
	999,999
		$
	100
		
34.31		$
	1,000,000 to
	$
	4,999,999
		$
	300
		
34.32		$
	5,000,000 to
	$
	9,999,999
		$
	1,000
		
34.33		$
	10,000,000 to
	$
	19,999,999
		$
	2,000
		
34.34		$
	20,000,000 or more
		$
	5,000
		
34.35			less than
	$
	830,000
		$
	0
		
34.36		$
	830,000 to
	$
	1,659,999
		$
	170
		
34.37		$
	1,660,000 to
	$
	8,319,999
		$
	500
		
34.38		$
	8,320,000 to
	$
	16,649,999
		$
	1,660
		
34.39		$
	16,650,000 to
	$
	33,299,999
		$
	3,330
		
34.40		$
	33,300,000 or more
		$
	8,320

35.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
35.2 	December 31, 2008.

35.3 	Sec. 27. Minnesota Statutes 2008, section 290.0922, subdivision 3, is amended to read:
35.4 		Subd. 3.Definitions. (a) "Minnesota sales or receipts" means the total sales 
35.5 	apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts 
35.6 	attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the 
35.7 	total sales or receipts apportioned or attributed to Minnesota pursuant to any other 
35.8 	apportionment formula applicable to the taxpayer.
35.9 	(b) "Minnesota property" means total Minnesota tangible property as provided in 
35.10 	section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota, 
35.11 	but does not include: (1) property located in a job opportunity building zone designated 
35.12 	under section 469.314, (2) property of a qualified business located in a biotechnology and 
35.13 	health sciences industry zone designated under section 469.334, or (3) for taxable years 
35.14 	beginning during the duration of the zone, property of a qualified business located in the 
35.15 	international economic development zone designated under section 469.322. Intangible 
35.16 	property shall not be included in Minnesota property for purposes of this section. 
35.17 	Taxpayers who do not utilize tangible property to apportion income shall nevertheless 
35.18 	include Minnesota property for purposes of this section. On a return for a short taxable 
35.19 	year, the amount of Minnesota property owned, as determined under section 290.191, 
35.20 	shall be included in Minnesota property based on a fraction in which the numerator is the 
35.21 	number of days in the short taxable year and the denominator is 365.
35.22 	(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section 
35.23 	290.191, subdivision 12, but does not include: (1) job opportunity building zone payrolls 
35.24 	under section 469.310, subdivision 8, (2) biotechnology and health sciences industry zone 
35.25 	payrolls under section 469.330, subdivision 8, or (3) for taxable years beginning during 
35.26 	the duration of the zone, international economic development zone payrolls under section 
35.27 	469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income shall 
35.28 	nevertheless include Minnesota payrolls for purposes of this section.

35.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
35.30 	December 31, 2009.

35.31 	Sec. 28. Minnesota Statutes 2008, section 290.0922, is amended by adding a 
35.32 	subdivision to read:
35.33 		Subd. 5.Inflation adjustment. The commissioner shall adjust the dollar amounts 
35.34 	of both the fee and the property, payrolls, and sales or receipts thresholds in subdivision 
36.1 	1 by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
36.2 	Revenue Code, except that in section 1(f)(3)(B) the word "2008" must be substituted for 
36.3 	the word "1992." For 2010, the commissioner shall then determine the percent change from 
36.4 	the 12 months ending on August 31, 2008, to the 12 months ending on August 31, 2009, 
36.5 	and in each subsequent year, from the 12 months ending on August 31, 2008, to the 12 
36.6 	months ending on August 31 of the year preceding the taxable year. The determination of 
36.7 	the commissioner pursuant to this subdivision is not a "rule" subject to the Administrative 
36.8 	Procedure Act contained in chapter 14. The fee amounts as adjusted must be rounded to 
36.9 	the nearest $10 and the threshold amounts must be adjusted to the nearest $10,000. For 
36.10 	fee amounts that end in $5, the amount is rounded up to the nearest $10 and for threshold 
36.11 	amounts that end in $5,000, the amount is rounded up to the nearest $10,000.

36.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
36.13 	December 31, 2009.

36.14 	Sec. 29. Minnesota Statutes 2008, section 290.17, subdivision 2, is amended to read:
36.15 		Subd. 2. Income not derived from conduct of a trade or business. The income of 
36.16 	a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 
36.17 	business must be assigned in accordance with paragraphs (a) to (f): 
36.18 	(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in 
36.19 	section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, and to the 
36.20 	extent that, the work of the employee is performed within it; all other income from such 
36.21 	sources is treated as income from sources without this state. 
36.22 	Severance pay shall be considered income from labor or personal or professional 
36.23 	services. 
36.24 	(2) In the case of an individual who is a nonresident of Minnesota and who is an 
36.25 	athlete or entertainer, income from compensation for labor or personal services performed 
36.26 	within this state shall be determined in the following manner: 
36.27 	(i) The amount of income to be assigned to Minnesota for an individual who is a 
36.28 	nonresident salaried athletic team employee shall be determined by using a fraction in 
36.29 	which the denominator contains the total number of days in which the individual is under 
36.30 	a duty to perform for the employer, and the numerator is the total number of those days 
36.31 	spent in Minnesota. For purposes of this paragraph, off-season training activities, unless 
36.32 	conducted at the team's facilities as part of a team imposed program, are not included in 
36.33 	the total number of duty days. Bonuses earned as a result of play during the regular season 
36.34 	or for participation in championship, play-off, or all-star games must be allocated under 
36.35 	the formula. Signing bonuses are not subject to allocation under the formula if they are 
37.1 	not conditional on playing any games for the team, are payable separately from any other 
37.2 	compensation, and are nonrefundable; and 
37.3 	(ii) The amount of income to be assigned to Minnesota for an individual who is a 
37.4 	nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's 
37.5 	athletic or entertainment performance in Minnesota shall be determined by assigning to 
37.6 	this state all income from performances or athletic contests in this state. 
37.7 	(3) For purposes of this section, amounts received by a nonresident as "retirement 
37.8 	income" as defined in section (b)(1) of the State Income Taxation of Pension Income 
37.9 	Act, Public Law 104-95, are not considered income derived from carrying on a trade 
37.10 	or business or from wages or other compensation for work an employee performed in 
37.11 	Minnesota, and are not taxable under this chapter. 
37.12 	(b) Income or gains from tangible property located in this state that is not employed 
37.13 	in the business of the recipient of the income or gains must be assigned to this state. 
37.14 	(c) Income or gains from intangible personal property not employed in the business 
37.15 	of the recipient of the income or gains must be assigned to this state if the recipient of the 
37.16 	income or gains is a resident of this state or is a resident trust or estate. 
37.17 	Gain on the sale of a partnership interest is allocable to this state in the ratio of the 
37.18 	original cost of partnership tangible property in this state to the original cost of partnership 
37.19 	tangible property everywhere, determined at the time of the sale. If more than 50 percent 
37.20 	of the value of the partnership's assets consists of intangibles, gain or loss from the sale 
37.21 	of the partnership interest is allocated to this state in accordance with the sales factor of 
37.22 	the partnership for its first full tax period immediately preceding the tax period of the 
37.23 	partnership during which the partnership interest was sold. 
37.24 	Gain on the sale of an interest in a single member limited liability company that 
37.25 	is disregarded for federal income tax purposes is allocable to this state as if the single 
37.26 	member limited liability company did not exist and the assets of the limited liability 
37.27 	company are personally owned by the sole member.
37.28 	Gain on the sale of goodwill or income from a covenant not to compete that is 
37.29 	connected with a business operating all or partially in Minnesota is allocated to this state 
37.30 	to the extent that the income from the business in the year preceding the year of sale was 
37.31 	assignable to Minnesota under subdivision 3. 
37.32 	When an employer pays an employee for a covenant not to compete, the income 
37.33 	allocated to this state is in the ratio of the employee's service in Minnesota in the calendar 
37.34 	year preceding leaving the employment of the employer over the total services performed 
37.35 	by the employee for the employer in that year. 
38.1 	(d) Income from winnings on a bet made by an individual while in Minnesota is 
38.2 	assigned to this state. In this paragraph, "bet" has the meaning given in section 609.75, 
38.3 	subdivision 2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3). 
38.4 	(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 
38.5 	taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile. 
38.6 	(f) For the purposes of this section, working as an employee shall not be considered 
38.7 	to be conducting a trade or business. 

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

38.9 	Sec. 30. Minnesota Statutes 2008, section 290.17, subdivision 4, is amended to read:
38.10 		Subd. 4.Unitary business principle. (a) If a trade or business conducted wholly 
38.11 	within this state or partly within and partly without this state is part of a unitary business, 
38.12 	the entire income of the unitary business is subject to apportionment pursuant to section 
38.13 	290.191. Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary 
38.14 	business is considered to be derived from any particular source and none may be allocated 
38.15 	to a particular place except as provided by the applicable apportionment formula. The 
38.16 	provisions of this subdivision do not apply to business income subject to subdivision 5, 
38.17 	income of an insurance company, or income of an investment company determined under 
38.18 	section 290.36.
38.19 	(b) The term "unitary business" means business activities or operations which 
38.20 	result in a flow of value between them. The term may be applied within a single legal 
38.21 	entity or between multiple entities and without regard to whether each entity is a sole 
38.22 	proprietorship, a corporation, a partnership or a trust.
38.23 	(c) Unity is presumed whenever there is unity of ownership, operation, and use, 
38.24 	evidenced by centralized management or executive force, centralized purchasing, 
38.25 	advertising, accounting, or other controlled interaction, but the absence of these 
38.26 	centralized activities will not necessarily evidence a nonunitary business. Unity is also 
38.27 	presumed when business activities or operations are of mutual benefit, dependent upon or 
38.28 	contributory to one another, either individually or as a group.
38.29 	(d) Where a business operation conducted in Minnesota is owned by a business 
38.30 	entity that carries on business activity outside the state different in kind from that 
38.31 	conducted within this state, and the other business is conducted entirely outside the state, it 
38.32 	is presumed that the two business operations are unitary in nature, interrelated, connected, 
38.33 	and interdependent unless it can be shown to the contrary.
38.34 	(e) Unity of ownership is not deemed to exist when a corporation is involved unless 
38.35 	that corporation is a member of a group of two or more business entities and more than 50 
39.1 	percent of the voting stock of each member of the group is directly or indirectly owned 
39.2 	by a common owner or by common owners, either corporate or noncorporate, or by one 
39.3 	or more of the member corporations of the group. For this purpose, the term "voting 
39.4 	stock" shall include membership interests of mutual insurance holding companies formed 
39.5 	under section 66A.40.
39.6 	(f) The net income and apportionment factors under section 290.191 or 290.20 of 
39.7 	foreign corporations and other foreign entities which are part of a unitary business shall 
39.8 	not be included in the net income or the apportionment factors of the unitary business. 
39.9 	A foreign corporation or other foreign entity which is required to file a return under this 
39.10 	chapter shall file on a separate return basis. The net income and apportionment factors 
39.11 	under section 290.191 or 290.20 of foreign operating corporations shall not be included in 
39.12 	the net income or the apportionment factors of the unitary business except as provided in 
39.13 	paragraph (g).
39.14 	(g) The adjusted net income of a foreign operating corporation shall be deemed to 
39.15 	be paid as a dividend on the last day of its taxable year to each shareholder thereof, in 
39.16 	proportion to each shareholder's ownership, with which such corporation is engaged in 
39.17 	a unitary business. Such deemed dividend shall be treated as a dividend under section 
39.18 	290.21, subdivision 4.
39.19 	Dividends actually paid by a foreign operating corporation to a corporate shareholder 
39.20 	which is a member of the same unitary business as the foreign operating corporation shall 
39.21 	be eliminated from the net income of the unitary business in preparing a combined report 
39.22 	for the unitary business. The adjusted net income of a foreign operating corporation 
39.23 	shall be its net income adjusted as follows:
39.24 	(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto 
39.25 	Rico, or a United States possession or political subdivision of any of the foregoing shall 
39.26 	be a deduction; and
39.27 	(2) the subtraction from federal taxable income for payments received from foreign 
39.28 	corporations or foreign operating corporations under section 290.01, subdivision 19d, 
39.29 	clause (10), shall not be allowed.
39.30 	If a foreign operating corporation incurs a net loss, neither income nor deduction 
39.31 	from that corporation shall be included in determining the net income of the unitary 
39.32 	business.
39.33 	(h) (g) For purposes of determining the net income of a unitary business and the 
39.34 	factors to be used in the apportionment of net income pursuant to section 290.191 or 
39.35 	290.20, there must be included only the income and apportionment factors of domestic 
39.36 	corporations or other domestic entities other than foreign operating corporations that are 
40.1 	determined to be part of the unitary business pursuant to this subdivision, notwithstanding 
40.2 	that foreign corporations or other foreign entities might be included in the unitary business.
40.3 	(i) (h) Deductions for expenses, interest, or taxes otherwise allowable under 
40.4 	this chapter that are connected with or allocable against dividends, deemed dividends 
40.5 	described in paragraph (g), or royalties, fees, or other like income described in section 
40.6 	290.01, subdivision 19d, clause (10), shall not be disallowed.
40.7 	(j) (i) Each corporation or other entity, except a sole proprietorship, that is part of 
40.8 	a unitary business must file combined reports as the commissioner determines. On the 
40.9 	reports, all intercompany transactions between entities included pursuant to paragraph 
40.10 	(h) (g) must be eliminated and the entire net income of the unitary business determined in 
40.11 	accordance with this subdivision is apportioned among the entities by using each entity's 
40.12 	Minnesota factors for apportionment purposes in the numerators of the apportionment 
40.13 	formula and the total factors for apportionment purposes of all entities included pursuant 
40.14 	to paragraph (h) (g) in the denominators of the apportionment formula.
40.15 	(k) (j) If a corporation has been divested from a unitary business and is included in a 
40.16 	combined report for a fractional part of the common accounting period of the combined 
40.17 	report:
40.18 	(1) its income includable in the combined report is its income incurred for that part 
40.19 	of the year determined by proration or separate accounting; and
40.20 	(2) its sales, property, and payroll included in the apportionment formula must 
40.21 	be prorated or accounted for separately.

40.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
40.23 	December 31, 2008.

40.24 	Sec. 31. Minnesota Statutes 2008, section 290.191, subdivision 2, is amended to read:
40.25 		Subd. 2.Apportionment formula of general application. (a) Except for those 
40.26 	trades or businesses required to use a different formula under subdivision 3 or section 
40.27 	290.36, and for those trades or businesses that receive permission to use some other 
40.28 	method under section 290.20 or under subdivision 4, a trade or business required to 
40.29 	apportion its net income must apportion its income to this state on the basis of the 
40.30 	percentage obtained by taking the sum of:
40.31 	(1) the percent for the sales factor under paragraph (b) of the percentage which 
40.32 	the sales made within this state in connection with the trade or business during the tax 
40.33 	period are of the total sales wherever made in connection with the trade or business during 
40.34 	the tax period;.
41.1 	(2) the percent for the property factor under paragraph (b) of the percentage which 
41.2 	the total tangible property used by the taxpayer in this state in connection with the trade or 
41.3 	business during the tax period is of the total tangible property, wherever located, used by 
41.4 	the taxpayer in connection with the trade or business during the tax period; and
41.5 	(3) the percent for the payroll factor under paragraph (b) of the percentage which 
41.6 	the taxpayer's total payrolls paid or incurred in this state or paid in respect to labor 
41.7 	performed in this state in connection with the trade or business during the tax period are 
41.8 	of the taxpayer's total payrolls paid or incurred in connection with the trade or business 
41.9 	during the tax period.
41.10 	(b) For purposes of paragraph (a) and subdivision 3, the following percentages apply 
41.11 	for the taxable years specified:

41.12
41.13	Taxable years beginning 
during calendar year
		Sales factor 
percent
		Property factor 
percent
		Payroll factor
percent
	
41.14	2007
			78
			11
		11
	
41.15	2008
			81
			9.5
		9.5
	
41.16	2009
			84
			8
		8
	
41.17	2010
			87
			6.5
		6.5
	
41.18	2011
			90
			5
		5
	
41.19	2012
			93
			3.5
		3.5
	
41.20	2013
			96
			2
		2
	
41.21	2014 and later calendar years 
	100
			0
		0

41.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
41.23 	December 31, 2008.

41.24 	Sec. 32. Minnesota Statutes 2008, section 290.191, subdivision 3, is amended to read:
41.25 		Subd. 3.Apportionment formula for financial institutions. Except for an 
41.26 	investment company required to apportion its income under section 290.36, a financial 
41.27 	institution that is required to apportion its net income must apportion its net income to this 
41.28 	state on the basis of the percentage obtained by taking the sum of:
41.29 	(1) the percent for the sales factor under subdivision 2, paragraph (b), of the 
41.30 	percentage which the receipts from within this state in connection with the trade or 
41.31 	business during the tax period are of the total receipts in connection with the trade or 
41.32 	business during the tax period, from wherever derived;.
41.33 	(2) the percent for the property factor under subdivision 2, paragraph (b), of the 
41.34 	percentage which the sum of the total tangible property used by the taxpayer in this 
41.35 	state and the intangible property owned by the taxpayer and attributed to this state in 
41.36 	connection with the trade or business during the tax period is of the sum of the total 
42.1 	tangible property, wherever located, used by the taxpayer and the intangible property 
42.2 	owned by the taxpayer and attributed to all states in connection with the trade or business 
42.3 	during the tax period; and
42.4 	(3) the percent for the payroll factor under subdivision 2, paragraph (b), of the 
42.5 	percentage which the taxpayer's total payrolls paid or incurred in this state or paid in 
42.6 	respect to labor performed in this state in connection with the trade or business during 
42.7 	the tax period are of the taxpayer's total payrolls paid or incurred in connection with 
42.8 	the trade or business during the tax period.

42.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
42.10 	December 31, 2008.

42.11 	Sec. 33. Minnesota Statutes 2008, section 290A.03, subdivision 15, as amended by 
42.12 	Laws 2009, chapter 12, article 1, section 10, is amended to read:
42.13 		Subd. 15.Internal Revenue Code.  "Internal Revenue Code" means the Internal 
42.14 	Revenue Code of 1986, as amended through December 31, 2008 March 31, 2009.

42.15 	EFFECTIVE DATE. This section is effective for property tax refunds based on 
42.16 	property taxes payable after December 31, 2009, and rent paid after December 31, 2008, 
42.17 	and thereafter.

42.18 	Sec. 34. Minnesota Statutes 2008, section 291.005, subdivision 1, as amended by Laws 
42.19 	2009, chapter 12, article 1, section 11, is amended to read:
42.20 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following 
42.21 	terms used in this chapter shall have the following meanings:
42.22 	(1) "Federal gross estate" means the gross estate of a decedent as valued and 
42.23 	otherwise determined for federal estate tax purposes by federal taxing authorities pursuant 
42.24 	to the provisions of the Internal Revenue Code.
42.25 	(2) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
42.26 	excluding therefrom any property included therein which has its situs outside Minnesota, 
42.27 	and (b) including therein any property omitted from the federal gross estate which is 
42.28 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
42.29 	authorities.
42.30 	(3) "Personal representative" means the executor, administrator or other person 
42.31 	appointed by the court to administer and dispose of the property of the decedent. If there 
42.32 	is no executor, administrator or other person appointed, qualified, and acting within this 
42.33 	state, then any person in actual or constructive possession of any property having a situs in 
43.1 	this state which is included in the federal gross estate of the decedent shall be deemed 
43.2 	to be a personal representative to the extent of the property and the Minnesota estate tax 
43.3 	due with respect to the property.
43.4 	(4) "Resident decedent" means an individual whose domicile at the time of death 
43.5 	was in Minnesota.
43.6 	(5) "Nonresident decedent" means an individual whose domicile at the time of 
43.7 	death was not in Minnesota.
43.8 	(6) "Situs of property" means, with respect to real property, the state or country in 
43.9 	which it is located; with respect to tangible personal property, the state or country in which 
43.10 	it was normally kept or located at the time of the decedent's death; and with respect to 
43.11 	intangible personal property, the state or country in which the decedent was domiciled 
43.12 	at death. For a nonresident decedent with an ownership interest in a pass-through entity 
43.13 	with assets that include real or tangible personal property, situs of the real or tangible 
43.14 	personal property is determined as if the pass-through entity does not exist and the real 
43.15 	or tangible personal property is personally owned by the decedent. If the pass-through 
43.16 	entity is owned by a person or persons in addition to the decedent, ownership of the 
43.17 	property is attributed to the decedent in proportion to the decedent's capital ownership 
43.18 	share of the pass-through entity.
43.19 	(7) "Commissioner" means the commissioner of revenue or any person to whom the 
43.20 	commissioner has delegated functions under this chapter.
43.21 	(8) "Internal Revenue Code" means the United States Internal Revenue Code of 
43.22 	1986, as amended through December 31, 2008 March 31, 2009.
43.23 	(9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
43.24 	defined by section 2011(b)(3) of the Internal Revenue Code, increased by:
43.25 	(i) the amount of deduction for state death taxes allowed under section 2058 of 
43.26 	the Internal Revenue Code.; and
43.27 	(ii) the amount of taxable gifts as defined in section 292.16 and made by the 
43.28 	decedent within three years of the decedent's date of death.
43.29 	(10) "Pass-through entity" includes the following:
43.30 	(i) an entity electing S corporation status under section 1362 of the Internal Revenue 
43.31 	Code;
43.32 	(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
43.33 	(iii) a single member limited liability company or similar entity, regardless of 
43.34 	whether it is taxed as an association or is disregarded for federal income tax purposes 
43.35 	under Code of Federal Regulations, title 26, section 301.7701-3; or
43.36 	(iv) a trust.

44.1 	EFFECTIVE DATE. This section is effective the day following final enactment, 
44.2 	except the changes incorporated by federal changes are effective at the same time as the 
44.3 	changes were effective for federal purposes, and except that the changes to clauses (6) to 
44.4 	(10) are effective for decedents dying after December 31, 2008.

44.5 	Sec. 35. Minnesota Statutes 2008, section 291.03, subdivision 1, is amended to read:
44.6 		Subdivision 1.Tax amount. (a) The tax imposed shall be an amount equal to the 
44.7 	proportion of the maximum credit for state death taxes computed under section 2011 of 
44.8 	the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal 
44.9 	adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal 
44.10 	gross estate. The tax is reduced by the gift tax paid by the decedent under section 292.17 
44.11 	on gifts included in the Minnesota adjusted gross estate.
44.12 	(b) The tax determined under this subdivision must not be greater than the sum of 
44.13 	the following amounts multiplied by a fraction, the numerator of which is the Minnesota 
44.14 	gross estate and the denominator of which is the federal gross estate:
44.15 	(1) the rates and brackets under section 2001(c) of the Internal Revenue Code 
44.16 	multiplied by the sum of:
44.17 	(i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; 
44.18 	plus
44.19 	(ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue 
44.20 	Code; less
44.21 	(2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue 
44.22 	Code; and less
44.23 	(3) the federal credit allowed under section 2010 of the Internal Revenue Code.
44.24 	(c) For purposes of this subdivision, "Internal Revenue Code" means the Internal 
44.25 	Revenue Code of 1986, as amended through December 31, 2000.

44.26 	EFFECTIVE DATE. This section is effective for decedents dying after December 
44.27 	31, 2008.

44.28 	Sec. 36. [292.16] DEFINITIONS.
44.29 	(a) For purposes of this chapter, the following definitions apply.
44.30 	(b) The definitions of terms defined in section 291.005 apply.
44.31 	(c) "Taxable gifts" means:
44.32 	(1) the transfers by gift which are included in taxable gifts for federal gift tax 
44.33 	purposes under the following sections of the Internal Revenue Code:
44.34 	(i) section 2503;
45.1 	(ii) sections 2511 to 2514; and
45.2 	(iii) sections 2516 to 2519; less
45.3 	(2)  the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.

45.4 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
45.5 	30, 2009.

45.6 	Sec. 37. [292.17] GIFT TAX.
45.7 		Subdivision 1.Imposition. (a) A tax is imposed on the transfer of property by gift 
45.8 	by any individual resident or nonresident in an amount equal to ten percent of the amount 
45.9 	of the taxable gift.
45.10 	(b) The donor is liable for payment of the tax. If the gift tax is not paid when due, 
45.11 	the recipient of any gift is personally liable for the tax to the extent of the value of the gift.
45.12 		Subd. 2.Lifetime credit. A credit of $100,000 is allowed against the tax imposed 
45.13 	under this section. This credit applies to the cumulative amount of taxable gifts made 
45.14 	by the donor during the donor's lifetime.
45.15 		Subd. 3.Out-of-state gifts. Taxable gifts exclude the transfer of tangible personal 
45.16 	property and real property having a situs outside this state. "Situs of taxable gifts" means, 
45.17 	with respect to real property, the state or country in which it is located; with respect to 
45.18 	tangible personal property, the state or country in which it was normally kept or located 
45.19 	at the time of making the gift; and with respect to intangible personal property, the state 
45.20 	or country in which the individual was domiciled at the time of making the gift. For a 
45.21 	nonresident individual making a gift of an ownership interest in a pass-through entity 
45.22 	with assets that include real or tangible personal property, situs of the real or tangible 
45.23 	personal property is determined as if the pass-through entity does not exist and the real or 
45.24 	tangible personal property is personally owned by the individual making the gift. If the 
45.25 	pass-through entity is owned by a person or persons in addition to the individual making 
45.26 	the gift, ownership of the property is attributed to the individual in proportion to the 
45.27 	individual's capital ownership share of the pass-through entity.

45.28 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
45.29 	30, 2009.

45.30 	Sec. 38. [292.18] RETURNS.
45.31 	(a) Any individual who makes a taxable gift during the taxable year shall file a gift 
45.32 	tax return in the form and manner prescribed by the commissioner.
46.1 	(b) If the donor dies before filing the return, the executor of the donor's will or 
46.2 	the administrator of the donor's estate shall file the return. If the donor becomes legally 
46.3 	incompetent before filing the return, the guardian or conservator shall file the return.
46.4 	(c) The return must include:
46.5 	(1) each gift made during the calendar year which is to be included in computing the 
46.6 	taxable gifts;
46.7 	(2) the deductions claimed and allowable under section 292.16, paragraph (c), 
46.8 	clause (2); 
46.9 	(3) a description of the gift, and the donee's name, address, and Social Security 
46.10 	number;
46.11 	(4) the fair market value of gifts not made in money; and
46.12 	(5) any other information the commissioner requires to administer the gift tax.

46.13 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
46.14 	30, 2009.

46.15 	Sec. 39. [292.19] FILING REQUIREMENTS.
46.16 	Gift tax returns must be filed by the April 15 following the close of the calendar 
46.17 	year, except if a gift is made during the calendar year in which the donor dies, the return 
46.18 	for the donor must be filed by the last date, including extensions, for filing the gift tax 
46.19 	return for federal gift tax purposes for the donor.

46.20 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
46.21 	30, 2009.

46.22 	Sec. 40. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
46.23 	The commissioner may require the donor or the donee to show the property subject 
46.24 	to the tax under section 292.17 to the commissioner upon demand and may employ 
46.25 	a suitable person to appraise the property. The donor shall submit a declaration, in a 
46.26 	form prescribed by the commissioner and including any certification required by the 
46.27 	commissioner, that the property shown by the donor on the gift tax return includes all of 
46.28 	the property transferred by gift for the calendar year and not excluded from taxable gifts 
46.29 	under section 292.16, paragraph (c), clause (2).

46.30 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
46.31 	30, 2009.

46.32 	Sec. 41. [292.21] ADMINISTRATIVE PROVISIONS.
47.1 		Subdivision 1.Payment of tax; penalty for late payment. The tax imposed under 
47.2 	section 292.17 is due and payable to the commissioner by the April 15 following the close 
47.3 	of the calendar year during which the gift was made. The return required under section 
47.4 	292.18 must be included with the payment. If a taxable gift is made during the calendar 
47.5 	year in which the donor dies, the due date is the last date, including extensions, for filing 
47.6 	the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the 
47.7 	tax due within the time specified under this section, a penalty applies equal to ten percent 
47.8 	of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty 
47.9 	bear interest at the rate under section 270C.40 from the due date of the return.
47.10 		Subd. 2.Extensions. The commissioner may, for good cause, extend the time for 
47.11 	filing a gift tax return, if a written request is filed with a tentative return accompanied by a 
47.12 	payment of the tax, which is estimated in the tentative return, on or before the last day for 
47.13 	filing the return. Any person to whom an extension is granted must pay, in addition to the 
47.14 	tax, interest at the rate under section 270C.40 from the date on which the tax would have 
47.15 	been due without the extension.
47.16 		Subd. 3.Changes in federal gift tax. If the amount of a taxpayer's taxable gifts 
47.17 	for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any 
47.18 	calendar year, is changed or corrected by the Internal Revenue Service or other officer 
47.19 	of the United States or other competent authority, the taxpayer shall report the change or 
47.20 	correction in federal taxable gifts within 180 days after the final determination of the 
47.21 	change or correction, and concede the accuracy of the determination or provide a letter 
47.22 	detailing how the federal determination is incorrect or does not change the Minnesota 
47.23 	gift tax. Any taxpayer filing an amended federal gift tax return shall also file within 
47.24 	180 days an amended return under this chapter and shall include any information the 
47.25 	commissioner requires. The time for filing the report or amended return may be extended 
47.26 	by the commissioner upon due cause shown. Notwithstanding any limitation of time in 
47.27 	this chapter, if, upon examination, the commissioner finds that the taxpayer is liable for 
47.28 	the payment of an additional tax, the commissioner shall, within a reasonable time from 
47.29 	the receipt of the report or amended return, notify the taxpayer of the amount of additional 
47.30 	tax, together with interest computed at the rate under section 270C.40 from the date when 
47.31 	the original tax was due and payable. Within 30 days of the mailing of the notice, the 
47.32 	taxpayer shall pay the commissioner the amount of the additional tax and interest. If, upon 
47.33 	examination of the report or amended return and related information, the commissioner 
47.34 	finds that the taxpayer has overpaid the tax due the state, the commissioner shall refund 
47.35 	the overpayment to the taxpayer.
48.1 		Subd. 4.Application of federal rules. In administering the tax under this chapter, 
48.2 	the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal 
48.3 	Revenue Code. The words "secretary or his delegate," as used in those sections of the 
48.4 	Internal Revenue Code, means the commissioner.

48.5 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
48.6 	30, 2009.

48.7 	Sec. 42. [292.22] CREDIT AGAINST ESTATE TAX.
48.8 	A credit is allowed against the estate tax imposed under chapter 291 in the amount 
48.9 	of any tax imposed and paid under this chapter for a gift includable in the Minnesota 
48.10 	adjusted taxable estate of the donor under section 291.005.

48.11 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
48.12 	30, 2009.

48.13 	Sec. 43. Minnesota Statutes 2008, section 469.315, is amended to read:
48.14 	469.315 TAX INCENTIVES AVAILABLE IN ZONES.
48.15 	Qualified businesses that operate in a job opportunity building zone, individuals who 
48.16 	invest in a qualified business that operates in a job opportunity building zone, and property 
48.17 	located in a job opportunity building zone qualify for:
48.18 	(1) exemption from individual income taxes as provided under section 469.316;  
48.19 	(2) exemption from corporate franchise taxes as provided under section 469.317;
48.20 	(3) (1) exemption from the state sales and use tax and any local sales and use taxes 
48.21 	on qualifying purchases as provided in section 297A.68, subdivision 37;
48.22 	(4) (2) exemption from the state sales tax on motor vehicles and any local sales tax 
48.23 	on motor vehicles as provided under section 297B.03;
48.24 	(5) (3) exemption from the property tax as provided in section 272.02, subdivision 
48.25 	64;
48.26 	(6) (4) exemption from the wind energy production tax under section 272.029, 
48.27 	subdivision 7; and
48.28 	(7) (5) the jobs credit allowed under section 469.318.

48.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
48.30 	December 31, 2009.

49.1 	Sec. 44. Minnesota Statutes 2008, section 469.3192, is amended to read:
49.2 	469.3192 PROHIBITION AGAINST AMENDMENTS TO BUSINESS 
49.3 	SUBSIDY AGREEMENT.
49.4 	(a) Except as authorized under paragraphs (b) and (c) or section 469.3191, under 
49.5 	no circumstance shall terms of any agreement required as a condition for eligibility for 
49.6 	benefits listed under section 469.315 be amended to change job creation, job retention, 
49.7 	or wage goals included in the agreement.
49.8 	(b) A business may elect to void a business subsidy agreement permitting it to 
49.9 	qualify for benefits listed under section 469.315 within 30 days after enactment of section 
49.10 	46, effective for obligations under the agreement that apply to periods after December 31, 
49.11 	2008. The authority to void an agreement expires 180 days after enactment of section 46.
49.12 	(c) A business that does not elect to void an agreement under paragraph (b) may 
49.13 	negotiate a modified or new business subsidy agreement to reflect the state's repeal of the 
49.14 	benefits of the individual income and corporate franchise tax exemptions under sections 
49.15 	469.316 and 469.317.

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

49.17 	Sec. 45. REVISOR'S INSTRUCTION.
 49.18 	The revisor of statutes shall identify and correct internal cross-references to sections 
49.19 	that are affected by section 46. The revisor may make changes necessary to correct the 
49.20 	punctuation, grammar, or structure of the remaining text to preserve its meaning.

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

49.22 	Sec. 46.  REPEALER.
 49.23 	(a) Minnesota Statutes 2008, sections 289A.50, subdivision 10; 290.01, subdivision 
49.24 	6b; 290.06, subdivisions 33 and 34; 290.067, subdivisions 1, 2, 2a, 2b, 3, and 4; 290.0672; 
49.25 	290.0674; 290.0679; 290.0802; 290.0921, subdivision 7; 290.191, subdivision 4; and 
49.26 	290.491, and  Laws 2009, chapter 3, section 1; and Laws 2009, chapter 12, article 1, 
49.27 	section 8,  are repealed.
49.28 	(b) Minnesota Statutes 2008, sections 272.02, subdivision 83; 290.06, subdivisions 
49.29 	24, 28, 30, 31, and 32; 297A.68, subdivisions 38 and 41; 469.316; 469.317; 469.321; 
49.30 	469.3215; 469.322; 469.323; 469.324; 469.325; 469.326; 469.327; 469.328; 469.329; 
49.31 	469.330; 469.331; 469.332; 469.333; 469.334; 469.335; 469.336; 469.337; 469.338; 
49.32 	469.339; 469.340; and 469.341, are repealed.

50.1 	EFFECTIVE DATE. Paragraph (a) is effective for taxable years beginning after 
50.2 	December 31, 2008. Paragraph (b) is effective for taxable years beginning after December 
50.3 	31, 2009.

50.4 	ARTICLE 2
50.5 	COUNTY REVENUE REFORM

50.6 	Section 1. Minnesota Statutes 2008, section 275.70, subdivision 3, is amended to read:
50.7 		Subd. 3.Local governmental unit. "Local governmental unit" means a county, or a 
50.8 	statutory or home rule charter city with a population greater than 2,500.

50.9 	EFFECTIVE DATE. This section is effective for taxes levied in calendar year 
50.10 	2009, payable in 2010 and thereafter.

50.11 	Sec. 2. Minnesota Statutes 2008, section 275.71, subdivision 2, is amended to read:
50.12 		Subd. 2.Levy limit base. (a) The levy limit base for a local governmental unit for 
50.13 	taxes levied in 2008 is its levy aid base from the previous year, subject to any adjustments 
50.14 	under section 275.72. For taxes levied in 2009 and 2010, the levy limit base for a local 
50.15 	governmental unit is its adjusted levy limit base in the previous year, subject to any 
50.16 	adjustments under section 275.72.

50.17 	EFFECTIVE DATE. This section is effective for taxes levied in calendar year 
50.18 	2009, payable in 2010 and thereafter.

50.19 	Sec. 3. Minnesota Statutes 2008, section 275.71, subdivision 4, is amended to read:
50.20 		Subd. 4.Adjusted levy limit base.  For taxes levied in 2008 through 2010 and 2009, 
50.21 	the adjusted levy limit base is equal to the levy limit base computed under subdivision 2 
50.22 	or section 275.72, multiplied by:
50.23 	(1) one plus the lesser of 3.9 percent or the percentage growth in the implicit price 
50.24 	deflator;
50.25 	(2) one plus a percentage equal to 50 percent of the percentage increase in the number 
50.26 	of households, if any, for the most recent 12-month period for which data is available; and
50.27 	(3) one plus a percentage equal to 50 percent of the percentage increase in the 
50.28 	taxable market value of the jurisdiction due to new construction of class 3 property, as 
50.29 	defined in section 273.13, subdivision 4, except for state-assessed utility and railroad 
50.30 	property, for the most recent year for which data is available.

51.1 	EFFECTIVE DATE. This section is effective for taxes levied in calendar year 
51.2 	2009, payable in 2010 and thereafter.

51.3 	Sec. 4. Minnesota Statutes 2008, section 275.71, subdivision 5, is amended to read:
51.4 		Subd. 5.Property tax levy limit. For taxes levied in 2008 through 2010 2009, the 
51.5 	property tax levy limit for a local governmental unit is equal to its adjusted levy limit 
51.6 	base determined under subdivision 4 plus any additional levy authorized under section 
51.7 	275.73, which is levied against net tax capacity, reduced by the sum of (i) the total amount 
51.8 	of aids and reimbursements that the local governmental unit is certified to receive under 
51.9 	sections 477A.011 to 477A.014, (ii) the amount of aid reduction under section 477A.0124, 
51.10 	subdivision 6, paragraph (c), (iii) taconite aids under sections 298.28 and 298.282
51.11 	including any aid which was required to be placed in a special fund for expenditure in the 
51.12 	next succeeding year, (iii) (iv) estimated payments to the local governmental unit under 
51.13 	section 272.029, adjusted for any error in estimation in the preceding year, and (iv) (v)
51.14 	aids under section 477A.16. 

51.15 	EFFECTIVE DATE. This section is effective for taxes levied in calendar year 
51.16 	2009, payable in 2010 and thereafter.

51.17 	Sec. 5. Minnesota Statutes 2008, section 297A.99, subdivision 1, is amended to read:
51.18 		Subdivision 1. Authorization; scope. (a) A political subdivision of this state may 
51.19 	impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) 
51.20 	under section 297A.994, or (4) if permitted by special law enacted prior to May 20, 2008, 
51.21 	or (4) (5) if the political subdivision enacted and imposed the tax before January 1, 1982, 
51.22 	and its predecessor provision. 
51.23 	(b) This section governs the imposition of a general sales tax by the political 
51.24 	subdivision. The provisions of this section preempt the provisions of any special law: 
51.25 	(1) enacted before June 2, 1997, or 
51.26 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
51.27 	provision from this section's rules by reference. 
51.28 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
51.29 	special excise tax on motor vehicles.
51.30 	(d) Until after May 31, 2010, a political subdivision may not advertise, promote, 
51.31 	expend funds, or hold a referendum to support imposing a local option sales tax unless 
51.32 	it is for extension of an existing tax or the tax was authorized by a special law enacted 
51.33 	prior to May 20, 2008.

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

52.2 	Sec. 6. [297A.994] COUNTY LOCAL OPTION SALES TAX.
52.3 		Subdivision 1.Authorization; rates. Notwithstanding section 297A.99, 
52.4 	subdivisions 2, 3, and 5, or 477A.016, or any other law, a county board may, by resolution, 
52.5 	impose a general sales tax of one-half of one percent on sales and uses taxable under this 
52.6 	chapter. In addition, an excise tax of $20 per motor vehicle is imposed on motor vehicles, 
52.7 	purchased or acquired from any person engaged within the county in the business of selling 
52.8 	motor vehicles at retail if a county imposes a local sales and use tax under this section.
52.9 		Subd. 2.Application of election requirement. (a) Imposition of the tax under this 
52.10 	section is not subject to the requirements of section 297A.99, subdivision 3.
52.11 	(b) Before imposing the tax under this section, the county must publish a notice of 
52.12 	its intention to impose the tax and the date and time of a hearing to obtain public comment 
52.13 	on the matter. The notice must be published in the official newspaper of the county, or 
52.14 	in a newspaper of general circulation in the county. The notice must be published at 
52.15 	least 14 days before the date of the hearing, but not more than 28 days. Following the 
52.16 	public hearing the county board may determine to take no further action, or may adopt a 
52.17 	resolution imposing the tax.
52.18 	(c) A county may impose the tax only upon obtaining the approval of the majority 
52.19 	of voters voting on the question of imposing the tax, if a petition requesting a vote on 
52.20 	imposition of the tax is signed by voters equal to the greater of (1) 500, or (2) ten percent 
52.21 	of the votes cast in the county at the last general election is filed with the county auditor 
52.22 	within 30 days after the public hearing. The vote on the tax may be held at a general or 
52.23 	special election. The commissioner of revenue shall prepare a suggested form of the 
52.24 	question to be presented at the election.
52.25 		Subd. 3.Use of revenues. Revenues from the tax imposed under this section 
52.26 	must first be used to fund obligations under section 297A.9945. Remaining revenues 
52.27 	are deposited in the county general fund.
52.28 		Subd. 4.Administration, collection, and enforcement. The administration, 
52.29 	collection, and enforcement of the provisions in section 297A.99, subdivisions 4, and 6 to 
52.30 	12, apply to a tax imposed under this section.
52.31 		Subd. 5.Termination. A county may terminate a tax imposed under this section 
52.32 	upon resolution of the county board and notification to the commissioner of revenue, if 
52.33 	all obligations under section 297A.9945 have been paid.

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

53.1 	Sec. 7. [297A.9945] EFFECT ON EXISTING LOCAL SALES TAXES; 
53.2 	SATISFACTION OF PREEXISTING OBLIGATIONS.
53.3 		Subdivision 1.Preemption of preexisting local sales taxes. (a) Notwithstanding 
53.4 	section 297A.99 or any other law or local ordinance to the contrary, all general local 
53.5 	sales and use taxes in a county or a part of a county is preempted on the day that a 
53.6 	county local sales tax under section 297A.994 takes effect, except the following taxes 
53.7 	are not preempted:
53.8 	(1) a local tax imposed under section 297A.992 or 297A.993;
53.9 	(2) a local sales tax authorized by special law in a city of the first class;
53.10 	(3) a local sales tax authorized by a special law in a city with a population in 2007 of 
53.11 	at least 100,000, provided that it complies with paragraph (c); and
53.12 	(4) a local sales tax in a county as authorized under Laws 2008, chapter 366, article 
53.13 	7, section 18.
53.14 	(b) A local sales tax that is imposed by a city located in two or more counties is 
53.15 	preempted if one or more counties in which the city is located impose the county tax. A 
53.16 	replacement tax must be imposed under subdivision 6 in any portion of the city located in 
53.17 	a county that has not imposed the tax under section 297A.994.
53.18 	(c) If a city with a population in 2007 of at least 100,000 would like to maintain an 
53.19 	existing local sales tax, the city council must pass a resolution to that effect within two 
53.20 	months of the enactment of this section. The city council must provide a copy of the 
53.21 	resolution to the commissioner of revenue and to the county in which the city is located 
53.22 	within five business days of the passage of the resolution.
53.23 		Subd. 2.County payment to cities; forgone sales tax revenue. (a) If a local 
53.24 	sales tax imposed in a city located partially or totally within a county is preempted under 
53.25 	subdivision 1, the county shall pay a portion of its local sales tax revenues, as provided 
53.26 	under subdivision 4 or 5, to the city to fund obligations allowed under the law authorizing 
53.27 	the city tax. The county must make these payments to the city within five business days 
53.28 	after it receives the revenues from the commissioner.
53.29 	(b) If the local sales tax was imposed under a joint powers agreement in cities 
53.30 	located in more than one county, the share of the obligation to be funded by the county 
53.31 	must be determined under subdivision 5.
53.32 	(c) The requirement to make these payments ceases on the earliest of the following:
53.33 	(1) the date on which the city tax was required to expire under the special law 
53.34 	authorizing it;
53.35 	(2) when the city has received sufficient revenues from its tax and from payments 
53.36 	under this section to pay in full or to defease debt obligations issued by the city under the 
54.1 	law authorizing the city sales tax and to pay any additional spending obligations allowed 
54.2 	under the special law and not funded by the issuance of debt obligations; or 
54.3 	(3) the city becomes a city of the first class and imposes a city sales tax.
54.4 		Subd. 3.Dedication of tax to fund county projects. If a county imposed local 
54.5 	sales tax is preempted under subdivision 1, the revenues from the tax imposed under 
54.6 	section 297A.994 are pledged first to pay and secure the bond obligations secured by and 
54.7 	to be paid with the revenues from the preempted county sales tax. 
54.8 		Subd. 4.Calculation of forgone revenue in cities located entirely within a 
54.9 	county. For purposes of subdivision 2, the forgone revenue to be paid to the city located 
54.10 	entirely in a county imposing a tax under section 297A.994 is calculated as follows:
54.11 	(1) in the first 12 months after the tax is preempted, the county shall make quarterly 
54.12 	payments to a city entirely located within the county equal to the amount that the city 
54.13 	received from the commissioner of revenue from the preempted tax in the corresponding 
54.14 	quarter in the previous year, multiplied by a percentage equal to the percentage change in 
54.15 	total state sales tax revenue in the previous quarter compared to the total state sales tax 
54.16 	revenue for the fifth preceding quarter; and
54.17 	(2) in subsequent years, the county shall make quarterly payments to the city equal 
54.18 	to the payment made in the corresponding quarter in the previous year, multiplied by the 
54.19 	ratio of the total quarterly remittance to the county in the current year compared to the 
54.20 	total quarterly remittance to the county in the previous year.
54.21 		Subd. 5.Calculation of forgone revenue in cities located partially within a 
54.22 	county. (a) For purposes of subdivision 2, the forgone revenue to be paid to the city 
54.23 	located partially in a county imposing a tax under section 297A.994 is calculated as 
54.24 	provided in this subdivision.
54.25 	(b) The commissioner of revenue shall determine the percentage of the city's local 
54.26 	sales tax revenue attributable to transactions located in the county. The commissioner 
54.27 	may consult with the county and the city to determine a reasonable percentage, or the 
54.28 	commissioner may set the percentage equal to the percentage of the city's market value 
54.29 	for the most recently available assessment year of class 3 property, except utility real and 
54.30 	personal property located in the county. The sum of the percentage of a city's local sales 
54.31 	tax revenue attributable to each county in which the city is located must equal 100 percent. 
54.32 	The determination of the commissioner is final.
54.33 	(c) In the first 12 months after the tax is preempted, the county shall make quarterly 
54.34 	payments to a city partially located within the county equal to the amount that the city 
54.35 	received from the commissioner from the preempted tax in the corresponding quarter in 
54.36 	the previous year, multiplied by (1) a percentage equal to one plus the percentage change 
55.1 	in total state sales tax revenue in the previous quarter compared to the total state sales tax 
55.2 	revenue for the fifth preceding quarter, and (2) one plus the percentage calculated in 
55.3 	paragraph (b).
55.4 	(d) In subsequent years, the county shall make quarterly payments to the city equal 
55.5 	to the payment made in the corresponding quarter in the previous year multiplied by the 
55.6 	ratio of the total quarterly remittance to the county in the current year compared to the 
55.7 	total quarterly remittance to the county in the previous year. 
55.8 	(e) A county's share of a city's obligations from the special law authorizing the city's 
55.9 	sales tax is equal to the total obligation under the special law multiplied by one plus the 
55.10 	percentage determined under paragraph (b).
55.11 		Subd. 6.Establishment of special sales tax districts within certain cities. (a) 
55.12 	For any city located in two or more counties, if at least one county imposes a county 
55.13 	sales tax under subdivision 1, and at least one county does not impose a county sales tax, 
55.14 	a special sales tax district is established in the portion of the city that is not subject to 
55.15 	a county sales tax.
55.16 	(b) The governing body of the city is the governing body of the special taxing district 
55.17 	and the special taxing district shall impose a replacement local sales tax by resolution 
55.18 	to take effect upon the preemption of the city's sales tax under subdivision 1. The 
55.19 	replacement tax must be imposed at the same rate as the city tax it replaces. Revenues 
55.20 	from the replacement tax are pledged to and may only be used for the purposes permitted 
55.21 	by law for the city sales tax, which it replaces. The authority to impose this tax expires 
55.22 	upon the city's receipt of sufficient revenues to pay the obligations to which the city sales 
55.23 	tax was pledged and other spending permitted by the law authorizing imposition of the 
55.24 	city sales tax from the sum of the following:
55.25 	(1) the city sales tax;
55.26 	(2) county payments of forgone sales tax revenues under this section; and
55.27 	(3) the special taxing district sales tax.

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

55.29 	Sec. 8. Minnesota Statutes 2008, section 477A.0124, is amended by adding a 
55.30 	subdivision to read:
55.31 		Subd. 6.County program aid. (a) For calendar year 2010 and thereafter, a county's 
55.32 	program aid under this section is equal to (1) its county program aid amount certified for 
55.33 	aids payable in 2009 under this section, minus (2) an amount determined under paragraph 
55.34 	(b) or (c). A county's program aid shall not be less than zero.
56.1 	(b) For a county that does not impose a tax under section 297A.994, the amount 
56.2 	subtracted under paragraph (a) is equal to 3.58 percent of the county's 2009 levy plus aid 
56.3 	revenue base. The "2009 levy plus aid revenue base" for a county is equal to the sum of 
56.4 	the county's certified property tax levy for taxes payable in 2009 plus the amount the 
56.5 	county was certified to receive in county program aid in 2009 under this section and 
56.6 	the amount the county was certified to receive in taconite aids in 2009 under sections 
56.7 	298.28 and 292.282, including any aid that was required to be placed in a special fund for 
56.8 	expenditure in the next succeeding year.
56.9 	(c) For a county that imposes a tax under section 297A.994, the amount subtracted 
56.10 	under paragraph (a) is equal to (1) 50 percent of its net sales tax revenue for the preceding 
56.11 	12-month period in excess of the greater of (i) $70,000, or (ii) $7 per capita, plus (2) 25 
56.12 	percent of its net sales tax revenue for the preceding 12-month period in excess of the 
56.13 	greater of (i) $170,000, or (ii) $17 per capita.
56.14 	(d) For purposes of this subdivision, "net sales tax revenue for the preceding 
56.15 	12-month period" means the sales tax revenue for the county for the 12-month period 
56.16 	ending July 1 of the year in which the aid under this section is certified minus its estimated 
56.17 	existing obligations under section 297A.9945 for the year in which the aid is paid. For 
56.18 	the first two years in which the aid is offset under this paragraph, the commissioner of 
56.19 	revenue shall estimate the offset based on available data regarding sales tax collections in 
56.20 	the county. Beginning with the third year in which the aid is offset under this paragraph, 
56.21 	the offset will be based on actual sales tax collections in the county in the 12-month period 
56.22 	ending July 1 of the year in which the aid is certified.

56.23 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
56.24 	2010 and thereafter.

56.25 	Sec. 9. Minnesota Statutes 2008, section 477A.03, subdivision 2b, is amended to read:
56.26 		Subd. 2b.Counties. (a) For aids payable in 2009 and thereafter, in addition to 
56.27 	the total aid payable under section 477A.0124, subdivision 3, is $111,500,000 minus 
56.28 	one-half of the total aid amount determined under section 477A.0124, subdivision 5, 
56.29 	paragraph (b), subject to adjustment in subdivision 5. Each calendar year, 477A.0124, 
56.30 	 $500,000 shall be retained by is appropriated to the commissioner of revenue to make 
56.31 	reimbursements to the commissioner of finance for payments made under section 611.27, 
56.32 	$357,000 is appropriated to the commissioner of revenue to make reimbursements to the 
56.33 	commissioner of finance for the preparation of local impact notes under section 3.987, and 
56.34 	$7,000 is appropriated to the commissioner of revenue to reimburse the commissioner 
56.35 	of education for the preparation of local impact notes for school districts under section 
57.1 	3.987. For calendar year 2004, the amount shall be in addition to the payments authorized 
57.2 	under section 477A.0124, subdivision 1. For calendar year 2005 and subsequent 
57.3 	years, the amount shall be deducted from the appropriation under this paragraph. The 
57.4 	reimbursements shall be to defray the additional costs associated with court-ordered 
57.5 	counsel under section 611.27.The commissioner of finance shall annually use at least 
57.6 	$150,000 of the $357,000 appropriation to contract with the representative associations for 
57.7 	counties, cities, towns, and school districts to establish a local impact network of political 
57.8 	subdivisions for preparing local impact notes that provide information to the legislature as 
57.9 	provided in section 270C.991, subdivision 7. Any retained appropriated amounts not used 
57.10 	for reimbursement in a year shall be included in the next distribution of county need aid 
57.11 	that is certified to the county auditors for the purpose of property tax reduction for the next 
57.12 	taxes payable year. under this subdivision shall be returned to the general fund.
57.13 	(b) For aids payable in 2009 and thereafter, the total aid under section 477A.0124, 
57.14 	subdivision 4, is $116,132,923 minus one-half of the total aid amount determined under 
57.15 	section 477A.0124, subdivision 5, paragraph (b), subject to adjustment in subdivision 
57.16 	5. The commissioner of finance shall bill the commissioner of revenue for the cost of 
57.17 	preparation of local impact notes as required by section 3.987, not to exceed $207,000 in 
57.18 	fiscal year 2004 and thereafter. The commissioner of education shall bill the commissioner 
57.19 	of revenue for the cost of preparation of local impact notes for school districts as 
57.20 	required by section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The 
57.21 	commissioner of revenue shall deduct the amounts billed under this paragraph from 
57.22 	the appropriation under this paragraph. The amounts deducted are appropriated to the 
57.23 	commissioner of finance and the commissioner of education for the preparation of local 
57.24 	impact notes., the total aid is the amount certified to be paid in 2009 under this subdivision, 
57.25 	subject to the reduction in section 477A.0133, subdivision 2.

57.26 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
57.27 	2009 and thereafter.

57.28 	Sec. 10.  REPEALER.
 57.29 	Minnesota Statutes 2008, section 477A.0124, subdivisions 3, 4, and 5, are repealed.

57.30 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
57.31 	2010 and thereafter.

58.1 	ARTICLE 3
58.2 	PROPERTY TAX REFORM, ACCOUNTABILITY, VALUE, AND 
58.3 	EFFICIENCY PROVISIONS

58.4 	Section 1. [6.90] COUNCIL ON LOCAL RESULTS AND INNOVATION.
58.5 		Subdivision 1.Creation. The Council on Local Results and Innovation consists of 
58.6 	11 members, as follows:
58.7 	(1) the state auditor;
58.8 	(2) two persons who are not members of the legislature, appointed by the chair of the 
58.9 	Property and Local Sales Tax Division of the house of representatives Taxes Committee;
58.10 	(3) two persons who are not members of the legislature, appointed by the designated 
58.11 	lead minority member of the Property and Local Sales Tax Division of the house of 
58.12 	representatives Taxes Committee;
58.13 	(4) two persons who are not members of the legislature, appointed by the chair of 
58.14 	the Taxes Division on Property Taxes of the senate Taxes Committee;
58.15 	(5) two persons who are not members of the legislature, appointed by the designated 
58.16 	lead minority member of the Taxes Division on Property Taxes of the senate Taxes 
58.17 	Committee;
58.18 	(6) one person who is not a member of the legislature, appointed by the Association 
58.19 	of Minnesota Counties; and
58.20 	(7) one person who is not a member of the legislature, appointed by the League 
58.21 	of Minnesota Cities.
58.22 	Each appointment under clauses (2) to (5) must include one person with expertise 
58.23 	or interest in county government and one person with expertise or interest in city 
58.24 	government. The appointing authorities must use their best efforts to ensure that a majority 
58.25 	of council members have experience with local performance measurement systems. The 
58.26 	membership of the council must include geographically balanced representation as well as 
58.27 	representation balanced between large and small jurisdictions. The appointments under 
58.28 	clauses (2) to (7) must be made within two months of the date of enactment.
58.29 	Appointees to the council under clauses (2) to (5) serve terms of four years, except 
58.30 	that one of each of the initial appointments under clauses (2) to (5) shall serve a term of 
58.31 	two years; each appointing agent must designate which appointee is serving the two-year 
58.32 	term. Subsequent appointments for members appointed under clauses (2) to (5) must 
58.33 	be made by the council, including appointments to replace any appointees who might 
58.34 	resign from the council prior to completion of their term. Appointees under clauses (2) to 
58.35 	(5) are not eligible to vote on appointing their successor, nor on the successors of other 
58.36 	appointees whose terms are expiring contemporaneously. In making appointments, the 
59.1 	council shall make all possible efforts to reflect the geographical distribution and meet the 
59.2 	qualifications of appointees required of the initial appointees. Subsequent appointments 
59.3 	for members appointed under clauses (6) and (7) must be made by the original appointing 
59.4 	authority. Appointees to the council under clauses (2) to (7) may serve no more than two 
59.5 	consecutive terms.
59.6 		Subd. 2.Duties. (a) By February 15, 2010, the council shall develop a standard 
59.7 	set of approximately ten performance measures for counties and ten performance 
59.8 	measures for cities that will aid residents, taxpayers, and state and local elected officials 
59.9 	in determining the efficacy of counties and cities in providing services, and measure 
59.10 	residents' opinions of those services. In developing its measures, the council must solicit 
59.11 	input from private citizens. Counties and cities that elect to participate in the standard 
59.12 	measures system shall report their results to the state auditor under section 6.91, who 
59.13 	shall compile the results and make them available to all interested parties by publishing 
59.14 	them on the auditor's Web site and report them to the legislative tax committees. Each 
59.15 	year after the initial designation of performance measures, the council shall evaluate the 
59.16 	usefulness of the standard set of performance measures and may revise the set by adding 
59.17 	or removing measures as it deems appropriate.
59.18 	(b) By February 15, 2011, the council shall develop minimum standards for 
59.19 	comprehensive performance measurement systems, which may vary by size and type 
59.20 	of governing jurisdiction.
59.21 	(c) In addition to its specific duties under paragraphs (a) and (b), the council 
59.22 	shall generally promote the use of performance measurement for governmental entities 
59.23 	across the state and shall serve as a resource for all governmental entities seeking to 
59.24 	implement a system of local performance measurement. The council may highlight and 
59.25 	promote systems that are innovative, or are ones that it deems to be best practices of local 
59.26 	performance measurement systems across the state and nation. The council should give 
59.27 	preference in its recommendations to systems that are results-oriented. The council may, 
59.28 	with the cooperation of the state auditor, establish and foster a collaborative network 
59.29 	of practitioners of local performance measurement systems. The council may support 
59.30 	the Association of Minnesota Counties and the League of Minnesota Cities to seek and 
59.31 	receive private funding to provide expert technical assistance to local governments for 
59.32 	the purposes of replicating best practices.
59.33 		Subd. 3.Reports. (a) The council shall report its initial set of standard performance 
59.34 	measures to the Property and Local Sales Tax Division of the house of representatives 
59.35 	Taxes Committee and the Taxes Division on Property Taxes of the senate Taxes Committee 
59.36 	by February 28, 2010. 
60.1 	(b) By February 1 of each subsequent year, the council shall report to the committees 
60.2 	with jurisdiction over taxes in the house of representatives and the senate on participation 
60.3 	in and results of the performance measurement system, along with any revisions in the 
60.4 	standard set of performance measures for the upcoming year. These reports may be made 
60.5 	by the state auditor in lieu of the council if agreed to by the auditor and the council.
60.6 		Subd. 4.Operation of council. (a) The state auditor shall convene the initial 
60.7 	meeting of the council.
60.8 	(b) The chair of the council shall be elected by the members. Once elected, a chair 
60.9 	shall serve a term of two years.
60.10 	(c) Members of the council serve without compensation.
60.11 	(d) Council members shall share and rotate responsibilities for administrative 
60.12 	support of the council.
60.13 	(e) Chapter 13D does not apply to meetings of the council. Meetings of the council 
60.14 	must be open to the public and the council must provide notice of a meeting on the state 
60.15 	auditor's Web site at least seven days before the meeting. A meeting of the council occurs 
60.16 	when a quorum is present.
60.17 	(f) The council must meet at least two times prior to the initial release of the standard 
60.18 	set of measurements. After the initial set has been developed, the council must meet a 
60.19 	minimum of once per year.
60.20 		Subd. 5.Termination. The council expires on January 1, 2019.

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

60.22 	Sec. 2. [6.91] LOCAL PERFORMANCE MEASUREMENT AND REPORTING.
60.23 		Subdivision 1.Reports of local performance measures. (a) A county or city that 
60.24 	elects to participate in the standard measures program must report its results to its citizens 
60.25 	annually through publication, direct mailing, posting on the jurisdiction's Web site, or 
60.26 	through a presentation at the jurisdiction's truth-in-taxation hearing under section 275.065.
60.27 	(b) Each year, jurisdictions participating in the local performance measurement 
60.28 	and improvement program must file a report with the state auditor by July 1, in a form 
60.29 	prescribed by the auditor. All reports must include a declaration that the jurisdiction has 
60.30 	complied with, or will have complied with by the end of the year, the requirement in 
60.31 	paragraph (a). For jurisdictions participating in the standard measures program, the report 
60.32 	shall consist of the jurisdiction's results for the standard set of performance measures 
60.33 	under section 6.90, subdivision 2, paragraph (a). In 2011, jurisdictions participating in the 
60.34 	comprehensive performance measurement program must submit a resolution approved by 
60.35 	its local governing body indicating that it either has implemented or is in the process of 
61.1 	implementing a local performance measurement system that meets the minimum standards 
61.2 	specified by the council under section 6.90, subdivision 2, paragraph (b). In 2012 and 
61.3 	thereafter, jurisdictions participating in the comprehensive performance measurement 
61.4 	program must submit a statement approved by its local governing body affirming that 
61.5 	it has implemented a local performance measurement system that meets the minimum 
61.6 	standards specified by the council under section 6.90, subdivision 2, paragraph (b).
61.7 		Subd. 2.Benefits of participation. (a) A county or city that elects to participate in 
61.8 	the standard measures program for 2010 is: (1) eligible for per capita reimbursement of 
61.9 	$0.25 per capita in 2011, but not to exceed $25,000 for any government entity; (2) exempt 
61.10 	from levy limits under sections 275.70 to 275.74 for taxes payable in 2011, if levy limits 
61.11 	are in effect; and (3) exempt from the truth-in-taxation public hearing requirement under 
61.12 	section 275.065, subdivision 6, for taxes payable in 2011, if the hearing requirement is 
61.13 	in effect.
61.14 	(b) Any county or city that elects to participate in the standard measures program for 
61.15 	2011 is eligible for per capita reimbursement of $0.25 per capita in 2012, but not to exceed 
61.16 	$25,000 for any government entity. Any jurisdiction participating in the comprehensive 
61.17 	performance measurement program is exempt from levy limits under sections 275.70 
61.18 	to 275.74 for taxes payable in 2012 if levy limits are in effect, and is exempt from the 
61.19 	truth-in-taxation public hearing requirement under section 275.065, subdivision 6, for 
61.20 	taxes payable in 2012, if the hearing requirement is in effect.
61.21 	(c) Any county or city that elects to participate in the standard measures program 
61.22 	for 2012 or any year thereafter is eligible for per capita reimbursement of $0.25 per 
61.23 	capita in the following year, but not to exceed $25,000 for any government entity. Any 
61.24 	jurisdiction participating in the comprehensive performance measurement program for 
61.25 	2012 or any year thereafter is exempt from levy limits under sections 275.70 to 275.74 
61.26 	for taxes payable in the following year, if levy limits are in effect, and is exempt from 
61.27 	the truth-in-taxation public hearing requirement under section 275.065, subdivision 6, for 
61.28 	taxes payable in the following year, if the hearing requirement is in effect.
61.29 		Subd. 3.Certification of participation. (a) The state auditor shall certify to 
61.30 	the commissioner of revenue by August 1 of each year the counties and cities that are 
61.31 	participating in the standard measures program and the comprehensive performance 
61.32 	measurement program.
61.33 	(b) The commissioner of revenue shall make per capita aid payments under this 
61.34 	section on the second payment date specified in section 477A.015, in the same year that 
61.35 	the measurements were reported.
62.1 	(c) The commissioner of revenue shall notify each county and city that is entitled to 
62.2 	exemption from levy limits by August 10 of each levy year. 
62.3 		Subd. 4.Appropriation. (a) The amount necessary to fund obligations to counties 
62.4 	under subdivision 2 is annually appropriated from the general fund to the commissioner of 
62.5 	revenue.
62.6 	(b) The amount necessary to fund obligations to cities under subdivision 2 is 
62.7 	annually appropriated from the general fund to the commissioner of revenue.
62.8 	(c) The sum of $6,000 in fiscal year 2010 and $2,000 in each fiscal year thereafter is 
62.9 	annually appropriated from the general fund to the state auditor to carry out the auditor's 
62.10 	responsibilities under sections 6.90 to 6.91.

62.11 	EFFECTIVE DATE. This section is effective December 31, 2009.

62.12 	Sec. 3. Minnesota Statutes 2008, section 134.34, subdivision 1, is amended to read:
62.13 		Subdivision 1.Local support levels. (a) A regional library basic system support 
62.14 	grant shall be made to any regional public library system where there are at least three 
62.15 	participating counties and where each participating city and county is providing for 
62.16 	public library service support the lesser of (a) (1) an amount equivalent to .82 percent 
62.17 	of the average of the adjusted net tax capacity of the taxable property of that city or 
62.18 	county, as determined by the commissioner of revenue for the second, third, and fourth
62.19 	year preceding that calendar year in 1991 and later years or (b) (2) a per capita amount 
62.20 	calculated under the provisions of this subdivision. The per capita amount is established 
62.21 	for calendar year 1993 as $7.62. In succeeding calendar years, the per capita amount shall 
62.22 	be increased by a percentage equal to one-half of the percentage by which the total state 
62.23 	adjusted net tax capacity of property as determined by the commissioner of revenue for 
62.24 	the second year preceding that calendar year increases over that total adjusted net tax 
62.25 	capacity for the third year preceding that calendar year. 
62.26 	(b) The minimum level of support specified under this subdivision or subdivision 4 
62.27 	shall be certified annually to the participating cities and counties by the Department of 
62.28 	Education. If a city or county chooses to reduce its local support in accordance with 
62.29 	subdivision 4, paragraph (b) or (c), it shall notify its regional public library system. The 
62.30 	regional public library system shall notify the Department of Education that a revised 
62.31 	certification is required. The revised minimum level of support shall be certified to the 
62.32 	city or county by the Department of Education. 
62.33 	(c) A city which is a part of a regional public library system shall not be required to 
62.34 	provide this level of support if the property of that city is already taxable by the county 
62.35 	for the support of that regional public library system. In no event shall the Department 
63.1 	of Education require any city or county to provide a higher level of support than the 
63.2 	level of support specified in this section in order for a system to qualify for a regional 
63.3 	library basic system support grant. This section shall not be construed to prohibit a city 
63.4 	or county from providing a higher level of support for public libraries than the level of 
63.5 	support specified in this section.

63.6 	EFFECTIVE DATE. This section is effective for calendar years 2009 and 
63.7 	thereafter, except that the change in paragraph (a) is effective for calendar years 2011 
63.8 	and thereafter.

63.9 	Sec. 4. Minnesota Statutes 2008, section 134.34, subdivision 4, is amended to read:
63.10 		Subd. 4.Limitation. (a) A regional library basic system support grant shall not be 
63.11 	made to a regional public library system for a participating city or county which decreases 
63.12 	the dollar amount provided for support for operating purposes of public library service 
63.13 	below the amount provided by it for the second or third preceding year, whichever is less. 
63.14 	For purposes of this subdivision and subdivision 1, any funds provided under section 
63.15 	473.757, subdivision 2, for extending library hours of operation shall not be considered 
63.16 	amounts provided by a city or county for support for operating purposes of public library 
63.17 	service. This subdivision shall not apply to participating cities or counties where the 
63.18 	adjusted net tax capacity of that city or county has decreased, if the dollar amount of the 
63.19 	reduction in support is not greater than the dollar amount by which support would be 
63.20 	decreased if the reduction in support were made in direct proportion to the decrease in 
63.21 	adjusted net tax capacity.
63.22 	(b) In addition, in any calendar year in which a city's or county's aid under sections 
63.23 	477A.011 to 477A.014, or credits under section 273.1384 are reduced after the city or 
63.24 	county has certified its levy payable in that year, it may reduce its local support by the 
63.25 	lesser of (1) ten percent, or (2) a percent equal to the percent the aid or credit reduction is 
63.26 	of the city or county's revenue base as defined in paragraph (e), based on aids certified for 
63.27 	the current calendar year. For calendar year 2009 only, the reduction under this paragraph 
63.28 	shall be based on 2008 aid and credit reductions under the December 2008 unallotment, as 
63.29 	well as any aid and credit reductions in calendar year 2009. For calendar year 2009 only, 
63.30 	the commissioner of revenue shall calculate the reductions under this paragraph and certify 
63.31 	them to the commissioner of education within 15 days of this provision becoming law.
63.32 	(c) In addition, in any payable year in which the total amounts certified for city or 
63.33 	county aids under sections 477A.011 to 477A.014 are less than the total amounts paid 
63.34 	under those sections in the previous calendar year, a city or county may reduce its local 
63.35 	support by the lesser of (1) ten percent, or (2) a percentage equal to the ratio of (i) the 
64.1 	difference between the sum of the aid it was paid under sections 477A.011 to 477A.014 
64.2 	and the credit reimbursements it received under section 273.1384 in the previous calendar 
64.3 	year and the aid it is certified to be paid in the current calendar year under sections 
64.4 	477A.011 to 477A.014 and the credits estimated to be paid under section 273.1384, to (ii) 
64.5 	its revenue base for the previous year, based on aids actually paid in the previous calendar 
64.6 	year. The commissioner of revenue shall calculate the percent aid cut for each county and 
64.7 	city under this paragraph and certify the percentage cuts to the commissioner of education 
64.8 	by August 1 of the year prior to the year in which the reduced aids and credits are to be 
64.9 	paid. The percentage of reduction related to reductions to credit reimbursements under 
64.10 	section 273.1384 shall be based on the best estimation available as of July 30.
64.11 	(d) Notwithstanding paragraph (a), (b), or (c), no city or county shall reduce its 
64.12 	support for public libraries below the minimum level specified in subdivision 1. No county 
64.13 	may make a reduction under paragraph (b) or (c) in a year in which it is receiving local 
64.14 	sales tax revenue under section 297A.994.
64.15 	(e) For purposes of this subdivision, "revenue base" means the sum of:
64.16 	(1) its levy for taxes payable in the current calendar year, including the levy on 
64.17 	the fiscal disparities distribution under section 276A.06, subdivision 3, paragraph (a), 
64.18 	or 473F.08, subdivision 3, paragraph (a);
64.19 	(2) its aid under sections 477A.011 to 477A.014 in the current calendar year; and
64.20 	(3) its taconite aid in the current calendar year under sections 298.28 and 298.282.
64.21 	(f) The sum of $21,000 in fiscal year 2010 and each fiscal year thereafter is 
64.22 	appropriated from the general fund to the commissioner of education to carry out the 
64.23 	additional responsibilities under this section.

64.24 	EFFECTIVE DATE. This section is effective for support in calendar year 2009 and 
64.25 	thereafter for library grants paid in fiscal year 2010 and thereafter, except that the changes 
64.26 	in paragraph (a) are effective for support in calendar year 2010 and thereafter.

64.27 	Sec. 5. Minnesota Statutes 2008, section 245.4932, subdivision 1, is amended to read:
64.28 		Subdivision 1.Collaborative responsibilities. The children's mental health 
64.29 	collaborative shall have the following authority and responsibilities regarding federal 
64.30 	revenue enhancement:
64.31 	(1) the collaborative must establish an integrated fund;
64.32 	(2) the collaborative shall designate a lead county or other qualified entity as the 
64.33 	fiscal agency for reporting, claiming, and receiving payments;
64.34 	(3) the collaborative or lead county may enter into subcontracts with other counties, 
64.35 	school districts, special education cooperatives, municipalities, and other public and 
65.1 	nonprofit entities for purposes of identifying and claiming eligible expenditures to enhance 
65.2 	federal reimbursement;
65.3 	(4) the collaborative shall use any enhanced revenue attributable to the activities of 
65.4 	the collaborative, including administrative and service revenue, solely to provide mental 
65.5 	health services or to expand the operational target population. The lead county or other 
65.6 	qualified entity may not use enhanced federal revenue for any other purpose;
65.7 	(5) the members of the collaborative must continue the base level of expenditures, 
65.8 	as defined in section 245.492, subdivision 2, for services for children with emotional or 
65.9 	behavioral disturbances and their families from any state, county, federal, or other public 
65.10 	or private funding source which, in the absence of the new federal reimbursement earned 
65.11 	under sections 245.491 to 245.495, would have been available for those services. The 
65.12 	base year for purposes of this subdivision shall be the accounting period closest to state 
65.13 	fiscal year 1993;
65.14 	(6) (5) the collaborative or lead county must develop and maintain an accounting and 
65.15 	financial management system adequate to support all claims for federal reimbursement, 
65.16 	including a clear audit trail and any provisions specified in the contract with the 
65.17 	commissioner of human services;
65.18 	(7) (6) the collaborative or its members may elect to pay the nonfederal share of the 
65.19 	medical assistance costs for services designated by the collaborative; and
65.20 	(8) (7) the lead county or other qualified entity may not use federal funds or local 
65.21 	funds designated as matching for other federal funds to provide the nonfederal share of 
65.22 	medical assistance.

65.23 	EFFECTIVE DATE. This section is effective beginning January 1, 2012.

65.24 	Sec. 6. Minnesota Statutes 2008, section 253B.045, subdivision 2, is amended to read:
65.25 		Subd. 2. Facilities. Each county or a group of counties shall maintain or provide 
65.26 	by contract a facility for confinement of persons held temporarily for observation, 
65.27 	evaluation, diagnosis, treatment, and care. When the temporary confinement is provided 
65.28 	at a regional treatment center, the commissioner shall charge the county of financial 
65.29 	responsibility for the costs of confinement of persons hospitalized under section 253B.05, 
65.30 	subdivisions 1 and 2, and section 253B.07, subdivision 2b, except that the commissioner 
65.31 	shall bill the responsible health plan first. If the person has health plan coverage, but the 
65.32 	hospitalization does not meet the criteria in subdivision 6 or section 62M.07, 62Q.53, 
65.33 	or 62Q.535, the county is responsible. When a person is temporarily confined in a 
65.34 	Department of Corrections facility solely under subdivision 1a, and not based on any 
65.35 	separate correctional authority: 
66.1 	(1) the commissioner of corrections may charge the county of financial responsibility 
66.2 	for the costs of confinement; and 
66.3 	(2) the Department of Human Services shall use existing appropriations to fund 
66.4 	all remaining nonconfinement costs. The funds received by the commissioner for the 
66.5 	confinement and nonconfinement costs are appropriated to the department for these 
66.6 	purposes. 
66.7 	"County of financial responsibility" means the county in which the person resides at the 
66.8 	time of confinement or, if the person has no residence in this state, the county which 
66.9 	initiated the confinement. The charge for confinement in a facility operated by the 
66.10 	commissioner of human services shall be based on the commissioner's determination of 
66.11 	the cost of care pursuant to section 246.50, subdivision 5. When there is a dispute as to 
66.12 	which county is the county of financial responsibility, the county charged for the costs of 
66.13 	confinement shall pay for them pending final determination of the dispute over financial 
66.14 	responsibility. Disputes about the county of financial responsibility shall be submitted to 
66.15 	the commissioner to be settled in the manner prescribed in section 256G.09. 

66.16 	EFFECTIVE DATE. This section is effective beginning January 1, 2012.

66.17 	Sec. 7. Minnesota Statutes 2008, section 254B.04, subdivision 1, is amended to read:
66.18 		Subdivision 1.Eligibility. (a) Persons eligible for benefits under Code of Federal 
66.19 	Regulations, title 25, part 20, persons eligible for medical assistance benefits under 
66.20 	sections 256B.055, 256B.056, and 256B.057, subdivisions 1, 2, 5, and 6, or who meet 
66.21 	the income standards of section 256B.056, subdivision 4, and persons eligible for general 
66.22 	assistance medical care under section 256D.03, subdivision 3, are entitled to chemical 
66.23 	dependency fund services. State money appropriated for this paragraph must be placed in 
66.24 	a separate account established for this purpose.  
66.25 	Persons with dependent children who are determined to be in need of chemical 
66.26 	dependency treatment pursuant to an assessment under section 626.556, subdivision 10, or 
66.27 	a case plan under section 260C.201, subdivision 6, or 260C.212, shall be assisted by the 
66.28 	local agency to access needed treatment services. Treatment services must be appropriate 
66.29 	for the individual or family, which may include long-term care treatment or treatment in a 
66.30 	facility that allows the dependent children to stay in the treatment facility. The county 
66.31 	shall pay for out-of-home placement costs, if applicable.
66.32 	(b) A person not entitled to services under paragraph (a), but with family income 
66.33 	that is less than 215 percent of the federal poverty guidelines for the applicable family 
66.34 	size, shall be eligible to receive chemical dependency fund services within the limit 
67.1 	of funds appropriated for this group for the fiscal year. If notified by the state agency 
67.2 	of limited funds, a county must give preferential treatment to persons with dependent 
67.3 	children who are in need of chemical dependency treatment pursuant to an assessment 
67.4 	under section 626.556, subdivision 10, or a case plan under section 260C.201, subdivision 
67.5 	6, or 260C.212. A county may spend money from its own sources to serve persons under 
67.6 	this paragraph. State money appropriated for this paragraph must be placed in a separate 
67.7 	account established for this purpose.  
67.8 	(c) Persons whose income is between 215 percent and 412 percent of the federal 
67.9 	poverty guidelines for the applicable family size shall be eligible for chemical dependency 
67.10 	services on a sliding fee basis, within the limit of funds appropriated for this group for the 
67.11 	fiscal year. Persons eligible under this paragraph must contribute to the cost of services 
67.12 	according to the sliding fee scale established under subdivision 3. A county may spend 
67.13 	money from its own sources to provide services to persons under this paragraph. State 
67.14 	money appropriated for this paragraph must be placed in a separate account established 
67.15 	for this purpose.

67.16 	EFFECTIVE DATE. This section is effective beginning January 1, 2012.

67.17 	Sec. 8. [256E.40] EQUITABLE FUNDING HEALTH AND HUMAN SERVICES 
67.18 	REFORM.
67.19 		Subdivision 1.Reform. The goals in reforming local funding of the health and 
67.20 	human services delivery system is to:
67.21 	(1) sustain the funding of county provided services;
67.22 	(2) maintain Minnesota's ability to obtain federal funds to provide these services;
67.23 	(3) equalize and make transparent the demands that providing these services makes 
67.24 	on the property tax system; and
67.25 	(4) encouraging local innovation and pilot programs using local revenues without 
67.26 	the risk of long-term obligations.
67.27 		Subd. 2.Consolidated program funding. (a) Each county is required to dedicate a 
67.28 	portion of local property tax, determined under this section, to fund the local share of all 
67.29 	health and human services programs and services required by state law. The commissioner 
67.30 	of revenue shall provide estimates to the commissioner of human services of the expected 
67.31 	revenue from this dedication in each county. The commissioner of human services shall 
67.32 	devise a mechanism for collecting or allocating the sum of these dedications between 
67.33 	programs as necessary to meet federal match requirements. Any contribution in excess 
67.34 	of the amount needed to meet federal match requirements shall be spent on the various 
67.35 	programs at the discretion of the county.
68.1 	(b) In 2012, the required dedication of a county's portion of its local property tax 
68.2 	is equal to a uniform percentage of its adjusted net tax capacity for the most recently 
68.3 	available year, limited as provided in paragraph (d). The commissioner of revenue shall 
68.4 	determine the percentage so that the total amount dedicated in all counties in 2012, after 
68.5 	the limits in paragraph (d), is equal to the total estimated amount of local source revenues 
68.6 	that all counties were required to pay for these programs and services in calendar year 
68.7 	2011. The commissioner of human services shall provide the commissioner of revenue 
68.8 	with the information necessary to make this calculation by July 30, 2011.
68.9 	(c) In 2013 and future years, the required dedication of a county's portion of its local 
68.10 	property tax is equal to a percentage of its adjusted net tax capacity adjusted as required in 
68.11 	paragraph (d). The percentage is the same as the percentage used in the previous year.
68.12 	(d) In calendar year 2012, a county's revenue dedication under paragraph (b) cannot 
68.13 	be greater than the sum of (1) its estimated amount of required local source revenues for 
68.14 	these programs and services in calendar year 2011, plus (2) one percent of its calendar 
68.15 	year 2011 property tax levy. In calendar year 2013 and future years, a county's revenue 
68.16 	dedication under paragraph (c) cannot be greater than the sum of (1) its revenue dedicated 
68.17 	under this subdivision in the previous year, multiplied by one plus its percentage increase 
68.18 	in its adjusted net tax capacity for the most recently available year, plus (2) one percent of 
68.19 	its property tax levy from the previous year.
68.20 		Subd. 3.County discretionary spending. Nothing in this section shall be construed 
68.21 	as prohibiting counties from spending local source revenues on health and human services 
68.22 	in excess of the amount calculated under subdivision 2 but a county may not be required 
68.23 	to continue spending local source revenue at a higher level than the amount determined in 
68.24 	subdivision 2.

68.25 	EFFECTIVE DATE. This section is effective for property tax levies payable in 
68.26 	2012 and thereafter and program spending beginning January 1, 2012.

68.27 	Sec. 9. [270C.991] PROPERTY TAX SYSTEM BENCHMARKS AND 
68.28 	CRITICAL INDICATORS.
68.29 		Subdivision 1.Purpose. State policy makers should be provided with the tools to 
68.30 	create a more accountable and efficient property tax system. This section provides the 
68.31 	principles and available tools necessary to work toward achieving that goal.
68.32 		Subd. 2.Property tax principles. To better evaluate the various property tax 
68.33 	proposals that come before the legislature, the following basic property tax principles 
68.34 	should be taken into consideration. The property taxes proposed should be:
68.35 	(1) transparent and understandable;
69.1 	(2) simple and efficient;
69.2 	(3) equitable;
69.3 	(4) stable and predictable;
69.4 	(5) compliance and accountability;
69.5 	(6) competitive, both nationally and globally; and
69.6 	(7) responsive to economic conditions.
69.7 		Subd. 3.Major indicators. There are many different types of indicators available to 
69.8 	legislators to evaluate tax legislation. Indicators are useful to have available as benchmarks 
69.9 	when legislators are contemplating changes. Each tool has its own limitation, and no one 
69.10 	tool is perfect or should be used independently. Some of the tools measure the global 
69.11 	characteristics of the entire tax system, while others are only a measure of the property tax 
69.12 	impacts and its administration. The following is a list of the available major indicators:
69.13 	(1) property tax principles scale, the components of which are listed in subdivision 
69.14 	2, as they relate to the various features of the property tax system;
69.15 	(2) price of government report, as required under section 16A.102;
69.16 	(3) tax incidence report, as required under section 270C.13;
69.17 	(4) tax expenditure budget and report, as required under section 270C.11;
69.18 	(5) state tax rankings;
69.19 	(6) property tax levy plus aid data, and market value and net tax capacity data, by 
69.20 	taxing district for current and past years;
69.21 	(7) effective tax rate (tax as a percent of market value) and the equalized effective 
69.22 	tax rate (effective tax rate adjusted for assessment differences);
69.23 	(8) assessment sales ratio study, as required under section 127A.48;
69.24 	(9) "Voss" database, which matches homeowner property taxes and household 
69.25 	income;
69.26 	(10) revenue estimates under section 270C.11, subdivision 5, and state fiscal notes 
69.27 	under section 477A.03, subdivision 2b; and
69.28 	(11) local impact notes, with improved local analysis as described in subdivision 7.
69.29 		Subd. 4.Property tax working group. (a) A property tax working group is 
69.30 	established as provided in this subdivision. The goals of the working group are:
69.31 	(1) to investigate ways to simplify the property tax system and make advisory 
69.32 	recommendations on ways to make the system more understandable;
69.33 	(2) to reexamine the property tax calendar to determine what changes could be made 
69.34 	to shorten the two-year cycle from assessment through property tax collection; and
70.1 	(3) to determine the cost versus the benefits of the various property tax components, 
70.2 	including property classifications, credits, aids, exclusions, exemptions, and abatements, 
70.3 	and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
70.4 	(b) The 12-member working group shall consist of the following members:
70.5 	(1) two state representatives, both appointed by the chair of the house of 
70.6 	representatives Taxes Committee, one from the majority party and one from the minority 
70.7 	party; 
70.8 	(2) two senators, both appointed by the chair of the senate Taxes Committee, one 
70.9 	from the majority party and one from the minority party; 
70.10 	(3) the commissioner of revenue, or designee; 
70.11 	(4) one person, appointed by the Association of Minnesota Counties;
70.12 	(5) one person, appointed by the League of Minnesota Cities; 
70.13 	(6) one person, appointed by the Minnesota Association of Townships; 
70.14 	(7) one person, appointed by the Minnesota Chamber of Commerce;
70.15 	(8) one person, appointed by the Minnesota Association of Assessing Officers; and
70.16 	(9) two homeowners, one who is under 65 years of age, and one who is 65 years of 
70.17 	age or older, both appointed by the commissioner of revenue.
70.18 	The commissioner of revenue shall chair the initial meeting, and the working 
70.19 	group shall elect a chair at that initial meeting. The working group will meet at the call 
70.20 	of the chair. Members of the working group shall serve without compensation. The 
70.21 	commissioner of revenue must provide administrative support to the working group. 
70.22 	Chapter 13D does not apply to meetings of the working group. Meetings of the working 
70.23 	group must be open to the public and the working group must provide notice of a meeting 
70.24 	to potentially interested persons at least seven days before the meeting. A meeting of the 
70.25 	council occurs when a quorum is present.
70.26 	(c) The working group shall make its advisory recommendations to the chairs of the 
70.27 	house of representatives and senate Taxes Committees on or before February 1, 2011, at 
70.28 	which time the working group shall be finished and this subdivision expires. The advisory 
70.29 	recommendations should be reviewed by the Taxes Committee under subdivision 5.
70.30 		Subd. 5.Taxes Committee review and resolution. On or before March 1, 
70.31 	2011, and every two years thereafter, the house of representatives and senate Taxes 
70.32 	Committees must review the major indicators as contained in subdivision 3, and ascertain 
70.33 	the accountability and efficiency of the property tax system. The house of representatives 
70.34 	and senate Taxes Committees shall prepare a resolution on targets and benchmarks for 
70.35 	use during the current biennium.
71.1 		Subd. 6.Department of Revenue; revenue estimates. As provided under 
71.2 	section 270C.11, subdivision 5, the Department of Revenue is required to prepare an 
71.3 	estimate of the effect on the state's tax revenues which result from the passage of a 
71.4 	legislative bill establishing, extending, or restricting a tax expenditure. Beginning 
71.5 	with the 2010 legislative session, those revenue estimates must also identify how the 
71.6 	property tax principles contained in subdivision 2 apply to the proposed tax changes. The 
71.7 	commissioner of revenue shall develop a scale for measuring the appropriate principles 
71.8 	for each proposed change. The department shall quantify the effects, if possible, or at a 
71.9 	minimum, shall identify the relevant factors so that legislators are aware of possible 
71.10 	outcomes, including administrative difficulties and cost. The interaction of property tax 
71.11 	shifting should be identified and quantified to the degree possible.
71.12 		Subd. 7.Local impact notes. Local impact notes are statements that provide 
71.13 	information about changes in local government responsibility, administration, and cost due 
71.14 	to changes in state law. The local impact note process seeks the participation of political 
71.15 	subdivisions to gather information as needed by the legislature. The local impact network 
71.16 	of political subdivisions shall consist of representation from associations from Minnesota 
71.17 	counties, cities, towns, and school districts, and other members as needed. They shall, 
71.18 	among other things, work with the legislature and the commissioner of finance to analyze:
71.19 	(1) changes in tax revenues for local governments;
71.20 	(2) changes in expenditures for local governments, including program and 
71.21 	administration costs; and
71.22 	(3) incidences of tax shifting, including identifying the target audience (taxpayers 
71.23 	who will benefit from the tax shift) and the impact audience (taxpayers who will bear the 
71.24 	burden of the tax shift).
71.25 	For tax bills the local impact network of political subdivisions shall rate the impact 
71.26 	on Minnesota's tax system using the tax principles contained in subdivision 2.
71.27 	Some of the cost for preparing this information shall be distributed to the local 
71.28 	impact network as provided under section 477A.03, subdivision 2b, paragraph (b).
71.29 		Subd. 8.Appropriation. The sum of $30,000 in fiscal year 2010 and $25,000 in 
71.30 	each fiscal year thereafter is appropriated from the general fund to the commissioner of 
71.31 	revenue to carry out the commissioner's added responsibilities under subdivision 6.

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

71.33 	Sec. 10. Minnesota Statutes 2008, section 273.1384, is amended by adding a 
71.34 	subdivision to read:
72.1 		Subd. 3a.Reimbursement reductions. (a) Each year, each county's reimbursement 
72.2 	under this section shall be reduced by a uniform percentage so that the total reduction 
72.3 	in reimbursements equals the sum of: (i) the amount appropriated under section 6.91, 
72.4 	subdivision 4, paragraph (a); (ii) one-half of the total amount appropriated under section 
72.5 	6.91, subdivision 4, paragraph (c); and (iii) one-half of the total amount appropriated 
72.6 	under section 270C.991, subdivision 8.
72.7 	(b) Each year, each city's reimbursement under this section shall be reduced by a 
72.8 	uniform percentage so that the total reduction in reimbursements equals the sum of: (i) 
72.9 	the amount appropriated under section 6.91, subdivision 4, paragraph (b); (ii) one-half of 
72.10 	the total amount appropriated under section 6.91, subdivision 4, paragraph (c); and (iii) 
72.11 	one-half of the total amount appropriated under section 270C.991, subdivision 8.
72.12 	(c) Each year, each school district's reimbursement under this section shall be 
72.13 	reduced by a uniform percentage so that the total reduction in reimbursements equals the 
72.14 	amount appropriated under section 134.34, subdivision 4.

72.15 	EFFECTIVE DATE. This section is effective for aids payable in 2009 and 
72.16 	thereafter.

72.17 	Sec. 11. [275.77] TEMPORARY SUSPENSION OF NEW OR INCREASED 
72.18 	MAINTENANCE OF EFFORT AND MATCHING FUND REQUIREMENTS.
72.19 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
72.20 	the meanings given them:
72.21 	(1) "maintenance of effort" means a requirement imposed on a political subdivision 
72.22 	by state law to continue providing funding of a service or program at a given or increasing 
72.23 	level based on its funding of the service and program in prior years; 
72.24 	(2) "matching fund requirement" means a requirement imposed on a political 
72.25 	subdivision by state law to fund a portion of a program or service but does not mean 
72.26 	required nonstate contributions to state capital funded projects or other nonstate 
72.27 	contributions required in order to receive a grant or loan the political subdivision has 
72.28 	requested or applied for; and
72.29 	(3) "political subdivision" means a county, town, or statutory or home rule charter 
72.30 	city.
72.31 		Subd. 2.Temporary suspension. (a) Notwithstanding any other provision of law 
72.32 	to the contrary, any new maintenance of effort or matching fund requirement enacted 
72.33 	after January 1, 2009, that will require spending by a political subdivision shall not be 
72.34 	effective until January 1, 2012.
73.1 	(b) Notwithstanding any other provision of law to the contrary, any changes to 
73.2 	existing maintenance of effort or matching fund requirement enacted after January 1, 
73.3 	2009, that will require new spending by a political subdivision shall not be effective 
73.4 	until January 1, 2012.
73.5 	(c) The suspension of changes to existing maintenance of effort and matching fund 
73.6 	requirements under paragraph (b) does not apply if the spending is required by federal law 
73.7 	and there would be a cost to the state budget without the change.

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

73.9 	Sec. 12.  REPEALER.
 73.10 	Minnesota Statutes 2008, sections 245.4835; 245.714; 246.54; 254B.02, subdivision 
73.11 	3; 256B.19, subdivision 1; 256F.10, subdivision 7; and 256I.08, are repealed.

73.12 	EFFECTIVE DATE. This section is effective January 1, 2012.

73.13 	ARTICLE 4
73.14 	LOCAL GOVERNMENT FLEXIBILITY AND MANDATE 
73.15 	REDUCTION PROVISIONS

73.16 	Section 1. Minnesota Statutes 2008, section 3.842, subdivision 4a, is amended to read:
73.17 		Subd. 4a.Objections to rules. (a) For purposes of this subdivision, "committee" 
73.18 	means the house of representatives policy committee or senate policy committee with 
73.19 	primary jurisdiction over state governmental operations. The commission, the Legislative 
73.20 	Commission on Mandate Reform, or a committee may object to a rule as provided in 
73.21 	this subdivision. If the commission, the Legislative Commission on Mandate Reform,
73.22 	or a committee objects to all or some portion of a rule because the commission, the 
73.23 	Legislative Commission on Mandate Reform, or a committee considers it to be beyond 
73.24 	the procedural or substantive authority delegated to the agency, including a proposed rule 
73.25 	submitted under section 14.15, subdivision 4, or 14.26, subdivision 3, paragraph (c), the 
73.26 	commission, the Legislative Commission on Mandate Reform, or a committee may file 
73.27 	that objection in the Office of the Secretary of State. The filed objection must contain a 
73.28 	concise statement of the commission's, the Legislative Commission on Mandate Reform,
73.29 	or a committee's reasons for its action. An objection to a proposed rule submitted by the 
73.30 	commission, the Legislative Commission on Mandate Reform, or a committee under 
73.31 	section 14.15, subdivision 4, or 14.26, subdivision 3, paragraph (c), may not be filed 
73.32 	before the rule is adopted.  
74.1 	(b) The secretary of state shall affix to each objection a certification of the date and 
74.2 	time of its filing and as soon after the objection is filed as practicable shall transmit a 
74.3 	certified copy of it to the agency issuing the rule in question and to the revisor of statutes. 
74.4 	The secretary of state shall also maintain a permanent register open to public inspection of 
74.5 	all objections by the commission, the Legislative Commission on Mandate Reform, or 
74.6 	a committee.
74.7 	(c) The commission, the Legislative Commission on Mandate Reform, or a 
74.8 	committee shall publish and index an objection filed under this section in the next issue 
74.9 	of the State Register. The revisor of statutes shall indicate the existence of the objection 
74.10 	adjacent to the rule in question when that rule is published in Minnesota Rules.
74.11 	(d) Within 14 days after the filing of an objection by the commission, the Legislative 
74.12 	Commission on Mandate Reform, or a committee to a rule, the issuing agency shall 
74.13 	respond in writing to the objecting entity. After receipt of the response, the commission, 
74.14 	the Legislative Commission on Mandate Reform, or a committee may withdraw or modify 
74.15 	its objection.
74.16 	(e) After the filing of an objection by the commission, the Legislative Commission 
74.17 	on Mandate Reform, or a committee that is not subsequently withdrawn, the burden is 
74.18 	upon the agency in any proceeding for judicial review or for enforcement of the rule to 
74.19 	establish that the whole or portion of the rule objected to is valid.
74.20 	(f) The failure of the commission, the Legislative Commission on Mandate Reform,
74.21 	or a committee to object to a rule is not an implied legislative authorization of its validity.
74.22 	(g) In accordance with sections 14.44 and 14.45, the commission, the Legislative 
74.23 	Commission on Mandate Reform, or a committee may petition for a declaratory judgment 
74.24 	to determine the validity of a rule objected to by the commission, the Legislative 
74.25 	Commission on Mandate Reform, or a committee. The action must be started within two 
74.26 	years after an objection is filed in the Office of the Secretary of State.  
74.27 	(h) The commission, the Legislative Commission on Mandate Reform, or a 
74.28 	committee may intervene in litigation arising from agency action. For purposes of this 
74.29 	paragraph, agency action means the whole or part of a rule, or the failure to issue a rule.

74.30 	Sec. 2. Minnesota Statutes 2008, section 3.843, is amended to read:
74.31 	3.843 PUBLIC HEARINGS BY STATE AGENCIES.
74.32 	By a vote of a majority of its members, the commission or the Legislative 
74.33 	Commission on Mandate Reform may request any agency issuing rules to hold a 
74.34 	public hearing in respect to recommendations made under section 3.842, including 
74.35 	recommendations made by the commission or the Legislative Commission on Mandate 
75.1 	Reform to promote adequate and proper rules by that agency and recommendations 
75.2 	contained in the commission's biennial report. The agency shall give notice as provided in 
75.3 	section 14.14, subdivision 1, of a hearing under this section, to be conducted in accordance 
75.4 	with sections 14.05 to 14.28. The hearing must be held not more than 60 days after receipt 
75.5 	of the request or within any other longer time period specified by the commission or the 
75.6 	Legislative Commission on Mandate Reform in the request.  

75.7 	Sec. 3. [3.99] LEGISLATIVE COMMISSION ON MANDATE REFORM; 
75.8 	ESTABLISHED.
75.9 		Subdivision 1.Established. The Legislative Commission on Mandate Reform is 
75.10 	established as provided in this section, with the powers and duties given it in sections 
75.11 	3.842, subdivision 4a; 3.843; and 3.99 to 3.992.
75.12 		Subd. 2.Membership. The commission consists of four senators appointed by the 
75.13 	senate Subcommittee on Committees of the Committee on Rules and Administration, 
75.14 	three senators appointed by the senate minority leader, four state representatives appointed 
75.15 	by the speaker of the house, and three state representatives appointed by the house 
75.16 	of representatives minority leader. The appointing authorities must ensure balanced 
75.17 	geographic representation. Each appointing authority must make appointments as soon as 
75.18 	possible.
75.19 		Subd. 3.Terms; vacancies. Members of the commission serve for a two-year term 
75.20 	beginning upon appointment and expiring upon appointment of a successor after the 
75.21 	opening of the next regular session of the legislature in the odd-numbered year. A vacancy 
75.22 	in the membership of the commission must be filled for the unexpired term in a manner 
75.23 	that will preserve the representation established by this section.
75.24 		Subd. 4.Chair. The commission must meet as soon as practicable after members 
75.25 	are appointed in each odd-numbered year to elect its chair and other officers as it may 
75.26 	determine necessary. A chair serves a two-year term, expiring in the odd-numbered year 
75.27 	after a successor is elected. The chair must alternate biennially between the senate and the 
75.28 	house of representatives.
75.29 		Subd. 5.Compensation. Members may be reimbursed for their reasonable 
75.30 	expenses as members of the legislature.
75.31 		Subd. 6.Staff. The Legislative Coordinating Commission must provide 
75.32 	administrative support to the commission, including secretarial services, record keeping, 
75.33 	and grants administration.
75.34 		Subd. 7.Meetings; procedures; tie votes. The first meeting of the biennium must 
75.35 	be convened by the member designated by the senate majority leader if a senator is to chair 
76.1 	the commission for the biennium, or by the speaker of the house if a state representative 
76.2 	is to chair the commission for the biennium. The commission meets at the call of the 
76.3 	chair. Commission action requires a positive vote of at least four house of representatives 
76.4 	members and at least four senate members.
76.5 		Subd. 8.Funding. The Legislative Coordinating Commission shall annually bill the 
76.6 	commissioner of revenue for costs incurred by the Legislative Coordinating Commission 
76.7 	in providing administrative support and to make the grants authorized by the Legislative 
76.8 	Commission on Mandate Reform, in an amount not to exceed $100,000 per year. The 
76.9 	commissioner of revenue shall deduct one-half of the certified costs from payments to 
76.10 	counties under section 477A.03, subdivision 2b, and one-half of the certified costs from 
76.11 	payments to cities under section 477A.03, subdivision 2a.

76.12 	Sec. 4. [3.991] LEGISLATIVE COMMISSION ON MANDATE REFORM; 
76.13 	REVIEW AND RECOMMENDATIONS TO LEGISLATURE.
76.14 	The Legislative Commission on Mandate Reform must solicit from local 
76.15 	governments information on state laws and rules that local governments consider to be 
76.16 	problematic mandates. The commission must review the mandates identified and consider 
76.17 	why each mandate was enacted or adopted, whether the reason for it still exists, the costs 
76.18 	to local governments to comply with the mandate, and whether repeal or modification 
76.19 	of the mandate is appropriate. Before the beginning of each legislative session, the 
76.20 	commission must prepare for introduction a bill to repeal or modify those laws or rules the 
76.21 	commission determines are unnecessary.

76.22 	Sec. 5. [3.992] LEGISLATIVE COMMISSION ON MANDATE REFORM; 
76.23 	GRANTS.
76.24 	Upon recommendation of the Legislative Commission on Mandate Reform, 
76.25 	the commissioner of revenue may make grants to the League of Minnesota Cities, 
76.26 	the Association of Minnesota Counties, Minnesota Association of Townships, other 
76.27 	organizations representing local governments, the Board of Regents of the University of 
76.28 	Minnesota, the Board of Trustees of Minnesota State Colleges and Universities, or other 
76.29 	accredited postsecondary institutions to research and make recommendations on mandate 
76.30 	reform. The commissioner must specify the work to be done, the completion date, and 
76.31 	the maximum grant amount, and may specify any other conditions the commissioner 
76.32 	deems necessary or useful.

76.33 	Sec. 6. [3.993] EXPIRATION.
77.1 	Sections 3.99 to 3.992 expire June 30, 2013.

77.2 	Sec. 7. [14.128] EFFECTIVE DATE FOR RULES REQUIRING LOCAL 
77.3 	IMPLEMENTATION.
77.4 		Subdivision 1.Determination. An agency must determine if a local government 
77.5 	will be required to adopt or amend an ordinance or other regulation to comply with a 
77.6 	proposed agency rule.  An agency must make this determination before the close of the 
77.7 	hearing record or before the agency submits the record to the administrative law judge if 
77.8 	there is no hearing.  The administrative law judge must review and approve or disapprove 
77.9 	the agency's determination. "Local government" means a town, county, or home rule 
77.10 	charter or statutory city.
77.11 		Subd. 2.Effective dates.  If the agency determines that the proposed rule requires 
77.12 	adoption or amendment of an ordinance or other regulation, or if the administrative law 
77.13 	judge disapproves the agency's determination that the rule does not have this effect, the 
77.14 	rule may not become effective until:
77.15 	(1) the next  July 1 or January 1 after notice of final adoption is published in the 
77.16 	State Register; or
77.17 	(2) a later date provided by law or specified in the proposed rule.
77.18 		Subd. 3.Exceptions. Subdivision 2 does not apply:
77.19 	(1) to a rule adopted under section 14.388, 14.389, or 14.3895, or under another law 
77.20 	specifying that the rulemaking procedures of this chapter do not apply;
77.21 	(2)  if the administrative law judge approves an agency's determination that the rule 
77.22 	has been proposed pursuant to a specific federal statutory or regulatory mandate that 
77.23 	requires the rule to take effect before the date specified in subdivision 2; or
77.24 	(3) if the governor waives application of subdivision 2.

77.25 	Sec. 8. Minnesota Statutes 2008, section 16C.28, subdivision 1a, is amended to read:
77.26 		Subd. 1a.Establishment and purpose. (a) The state recognizes the importance of 
77.27 	the inclusion of a best value contracting system for construction as an alternative to the 
77.28 	current low-bid system of procurement. In order to accomplish that goal, state and local 
77.29 	governmental entities shall be able to choose the best value system in different phases.
77.30 	(b) "Best value" means the procurement method defined in section 16C.02, 
77.31 	subdivision 4a.
77.32 	(c) The following entities are eligible to participate in phase I:  
77.33 	(1) state agencies; 
77.34 	(2) counties;
78.1 	(3) cities; and
78.2 	(4) school districts with the highest 25 percent enrollment of students in the state.
78.3 	Phase I begins on July 1, 2007.
78.4 	(d) The following entities are eligible to participate in phase II:
78.5 	(1)  those entities included in phase I; and 
78.6 	(2)  school districts with the highest 50 percent enrollment of students in the state. 
78.7 	Phase II begins two years from July 1, 2007.
78.8 	(e) The following entities are eligible to participate in phase III: 
78.9 	(1)  all entities included in phases I and II; and 
78.10 	(2)  all other townships, school districts, and political subdivisions in the state. 
78.11 	Phase III begins three years from July 1, 2007.
78.12 	(f) The commissioner or any agency for which competitive bids or proposals are 
78.13 	required may not use best value contracting as defined in section 16C.02, subdivision 4a, 
78.14 	for more than one project annually, or 20 percent of its projects, whichever is greater, in 
78.15 	each of the first three fiscal years in which best value construction contracting is used.

78.16 	Sec. 9. Minnesota Statutes 2008, section 306.243, is amended by adding a subdivision 
78.17 	to read:
78.18 		Subd. 6.Abandonment; end of operation as cemetery. A county that has accepted 
78.19 	responsibility for an abandoned cemetery may prohibit further burials in the abandoned 
78.20 	cemetery, and may cease all acceptance of responsibility for new burials.

78.21 	Sec. 10. Minnesota Statutes 2008, section 344.18, is amended to read:
78.22 	344.18 COMPENSATION OF VIEWERS.
78.23 	Fence viewers must be paid for their services by the person employing them at the 
78.24 	rate of $15 each for each day's employment. $60 must be deposited with the town or city 
78.25 	treasurer before the service is performed. Upon completion of the service, any of the $60 
78.26 	not spent to compensate the fence viewers must be returned to the depositor. The town 
78.27 	board may by resolution require the person employing the fence viewers to post a bond or 
78.28 	other security acceptable to the board for the total estimated costs before the viewing takes 
78.29 	place. The total estimated costs may include the cost of professional and other services, 
78.30 	hearing costs, administrative costs, recording costs, and other costs and expenses which 
78.31 	the town may incur in connection with the viewing.

79.1 	Sec. 11. Minnesota Statutes 2008, section 365.28, is amended to read:
79.2 	365.28 PUBLIC BURIAL GROUND IS TOWN'S AFTER TEN YEARS.
79.3 	A tract of land in a town becomes town property after it has been used as a public 
79.4 	burial ground for ten years if the tract is not owned by a cemetery association. The town 
79.5 	board shall control the burial ground as it controls other town cemeteries. A town that has 
79.6 	assumed ownership of a cemetery may prohibit further burials in it.

79.7 	Sec. 12. Minnesota Statutes 2008, section 429.041, subdivision 1, is amended to read:
79.8 		Subdivision 1.Plans and specifications, advertisement for bids. When the 
79.9 	council determines to make any improvement, it shall let the contract for all or part of 
79.10 	the work, or order all or part of the work done by day labor or otherwise as authorized by 
79.11 	subdivision 2, no later than one year after the adoption of the resolution ordering such 
79.12 	improvement, unless a different time limit is specifically stated in the resolution ordering 
79.13 	the improvement. The council shall cause plans and specifications of the improvement 
79.14 	to be made, or if previously made, to be modified, if necessary, and to be approved and 
79.15 	filed with the clerk, and if the estimated cost exceeds $50,000 the amount in section 
79.16 	471.345, subdivision 3, shall advertise for bids for the improvement in the newspaper and 
79.17 	such other papers and for such length of time as it may deem advisable. If the estimated 
79.18 	cost exceeds $100,000 twice the amount in section 471.345, subdivision 3, publication 
79.19 	shall be made no less than three weeks before the last day for submission of bids once 
79.20 	in the newspaper and at least once in either a newspaper published in a city of the first 
79.21 	class or a trade paper. To be eligible as such a trade paper, a publication shall have all 
79.22 	the qualifications of a legal newspaper except that instead of the requirement that it shall 
79.23 	contain general and local news, such trade paper shall contain building and construction 
79.24 	news of interest to contractors in this state, among whom it shall have a general circulation. 
79.25 	The advertisement shall specify the work to be done, shall state the time when the bids 
79.26 	will be publicly opened for consideration by the council, which shall be not less than ten 
79.27 	days after the first publication of the advertisement when the estimated cost is less than 
79.28 	$100,000 twice the amount in section 471.345, subdivision 3, and not less than three 
79.29 	weeks after such publication in other cases, and shall state that no bids will be considered 
79.30 	unless sealed and filed with the clerk and accompanied by a cash deposit, cashier's check, 
79.31 	bid bond, or certified check payable to the clerk, for such percentage of the amount of the 
79.32 	bid as the council may specify. In providing for the advertisement for bids the council 
79.33 	may direct that the bids shall be opened publicly by two or more designated officers or 
79.34 	agents of the municipality and tabulated in advance of the meeting at which they are to 
79.35 	be considered by the council. Nothing herein shall prevent the council from advertising 
80.1 	separately for various portions of the work involved in an improvement, or from itself, 
80.2 	supplying by such means as may be otherwise authorized by law, all or any part of the 
80.3 	materials, supplies, or equipment to be used in the improvement or from combining two or 
80.4 	more improvements in a single set of plans and specifications or a single contract.

80.5 	Sec. 13. Minnesota Statutes 2008, section 429.041, subdivision 2, is amended to read:
80.6 		Subd. 2.Contracts; day labor. In contracting for an improvement, the council shall 
80.7 	require the execution of one or more written contracts and bonds, conditioned as required 
80.8 	by law. The council shall award the contract to the lowest responsible bidder or it may 
80.9 	reject all bids. If any bidder to whom a contract is awarded fails to enter promptly into 
80.10 	a written contract and to furnish the required bond, the defaulting bidder shall forfeit to 
80.11 	the municipality the amount of the defaulter's cash deposit, cashier's check, bid bond, or 
80.12 	certified check, and the council may thereupon award the contract to the next lowest 
80.13 	responsible bidder. When it appears to the council that the cost of the entire work projected 
80.14 	will be less than $50,000 the amount in section 471.345, subdivision 3, or whenever no 
80.15 	bid is submitted after proper advertisement or the only bids submitted are higher than 
80.16 	the engineer's estimate, the council may advertise for new bids or, without advertising 
80.17 	for bids, directly purchase the materials for the work and do it by the employment of day 
80.18 	labor or in any other manner the council considers proper. The council may have the 
80.19 	work supervised by the city engineer or other qualified person but shall have the work 
80.20 	supervised by a registered engineer if done by day labor and it appears to the council that 
80.21 	the entire cost of all work and materials for the improvement will be more than $25,000
80.22 	the lowest amount in section 471.345, subdivision 4. In case of improper construction 
80.23 	or unreasonable delay in the prosecution of the work by the contractor, the council may 
80.24 	order and cause the suspension of the work at any time and relet the contract, or order 
80.25 	a reconstruction of any portion of the work improperly done, and where the cost of 
80.26 	completion or reconstruction necessary will be less than $50,000 the amount in section 
80.27 	471.345, subdivision 3, the council may do it by the employment of day labor.

80.28 	Sec. 14. Minnesota Statutes 2008, section 469.015, is amended to read:
80.29 	469.015 LETTING OF CONTRACTS; PERFORMANCE BONDS.
80.30 		Subdivision 1.Bids; notice. All construction work, and work of demolition or 
80.31 	clearing, and every purchase of equipment, supplies, or materials, necessary in carrying 
80.32 	out the purposes of sections 469.001 to 469.047, that involve expenditure of $50,000 the 
80.33 	amount in section 471.345, subdivision 3, or more shall be awarded by contract. Before 
80.34 	receiving bids the authority shall publish, once a week for two consecutive weeks in an 
81.1 	official newspaper of general circulation in the community a notice that bids will be 
81.2 	received for that construction work, or that purchase of equipment, supplies, or materials. 
81.3 	The notice shall state the nature of the work and the terms and conditions upon which the 
81.4 	contract is to be let, naming a time and place where bids will be received, opened and read 
81.5 	publicly, which time shall be not less than seven days after the date of the last publication. 
81.6 	After the bids have been received, opened and read publicly and recorded, the authority 
81.7 	shall award the contract to the lowest responsible bidder, provided that the authority 
81.8 	reserves the right to reject any or all bids. Each contract shall be executed in writing, and 
81.9 	the person to whom the contract is awarded shall give sufficient bond to the authority for its 
81.10 	faithful performance. If no satisfactory bid is received, the authority may readvertise. The 
81.11 	authority may establish reasonable qualifications to determine the fitness and responsibility 
81.12 	of bidders and to require bidders to meet the qualifications before bids are accepted.  
81.13 		Subd. 1a.Best value alternative. As an alternative to the procurement method 
81.14 	described in subdivision 1, the authority may issue a request for proposals and award the 
81.15 	contract to the vendor or contractor offering the best value under a request for proposals as 
81.16 	described in section 16C.28, subdivision 1, paragraph (a), clause (2), and paragraph (c).
81.17 		Subd. 2.Exception; emergency. If the authority by a vote of four-fifths of its 
81.18 	members shall declare that an emergency exists requiring the immediate purchase of any 
81.19 	equipment or material or supplies at a cost in excess of $50,000 the amount in section 
81.20 	471.345, subdivision 3, but not exceeding $75,000 half again as much as the amount in 
81.21 	section 471.345, subdivision 3, or making of emergency repairs, it shall not be necessary 
81.22 	to advertise for bids, but the material, equipment, or supplies may be purchased in the 
81.23 	open market at the lowest price obtainable, or the emergency repairs may be contracted for 
81.24 	or performed without securing formal competitive bids. An emergency, for purposes of 
81.25 	this subdivision, shall be understood to be unforeseen circumstances or conditions which 
81.26 	result in the placing in jeopardy of human life or property.
81.27 		Subd. 3.Performance and payment bonds. Performance and payment bonds shall 
81.28 	be required from contractors for any works of construction as provided in and subject 
81.29 	to all the provisions of sections 574.26 to 574.31 except for contracts entered into by 
81.30 	an authority for an expenditure of less than $50,000 the minimum threshold amount in 
81.31 	section 471.345, subdivision 3.  
81.32 		Subd. 4.Exceptions. (a) An authority need not require competitive bidding in the 
81.33 	following circumstances:
81.34 	(1) in the case of a contract for the acquisition of a low-rent housing project:
81.35 	(i) for which financial assistance is provided by the federal government;
82.1 	(ii) which does not require any direct loan or grant of money from the municipality 
82.2 	as a condition of the federal financial assistance; and
82.3 	(iii) for which the contract provides for the construction of the project upon land that 
82.4 	is either owned by the authority for redevelopment purposes or not owned by the authority 
82.5 	at the time of the contract but the contract provides for the conveyance or lease to the 
82.6 	authority of the project or improvements upon completion of construction;
82.7 	(2) with respect to a structured parking facility:
82.8 	(i) constructed in conjunction with, and directly above or below, a development; and
82.9 	(ii) financed with the proceeds of tax increment or parking ramp general obligation 
82.10 	or revenue bonds;
82.11 	(3) until August 1, 2009, with respect to a facility built for the purpose of facilitating 
82.12 	the operation of public transit or encouraging its use:
82.13 	(i) constructed in conjunction with, and directly above or below, a development; and
82.14 	(ii) financed with the proceeds of parking ramp general obligation or revenue bonds 
82.15 	or with at least 60 percent of the construction cost being financed with funding provided 
82.16 	by the federal government; and
82.17 	(4) in the case of any building in which at least 75 percent of the usable square 
82.18 	footage constitutes a housing development project if:
82.19 	(i) the project is financed with the proceeds of bonds issued under section 469.034 or 
82.20 	from nongovernmental sources;
82.21 	(ii) the project is either located on land that is owned or is being acquired by the 
82.22 	authority only for development purposes, or is not owned by the authority at the time the 
82.23 	contract is entered into but the contract provides for conveyance or lease to the authority 
82.24 	of the project or improvements upon completion of construction; and
82.25 	(iii) the authority finds and determines that elimination of the public bidding 
82.26 	requirements is necessary in order for the housing development project to be economical 
82.27 	and feasible.
82.28 	(b) An authority need not require a performance bond for the following projects:
82.29 	(1) a contract described in paragraph (a), clause (1);
82.30 	(2) a construction change order for a housing project in which 30 percent of the 
82.31 	construction has been completed;
82.32 	(3) a construction contract for a single-family housing project in which the authority 
82.33 	acts as the general construction contractor; or
82.34 	(4) a services or materials contract for a housing project.
82.35 	For purposes of this paragraph, "services or materials contract" does not include 
82.36 	construction contracts.
83.1 		Subd. 5.Security in lieu of bond. The authority may accept a certified check or 
83.2 	cashier's check in the same amount as required for a bond in lieu of a performance bond 
83.3 	for contracts entered into by an authority for an expenditure of less than $50,000 the 
83.4 	minimum threshold amount in section 471.345, subdivision 3. The check must be held by 
83.5 	the authority for 90 days after the contract has been completed. If no suit is brought within 
83.6 	the 90 days, the authority must return the amount of the check to the person making it. If a 
83.7 	suit is brought within the 90-day period, the authority must disburse the amount of the 
83.8 	check pursuant to the order of the court.

83.9 	Sec. 15. Minnesota Statutes 2008, section 641.12, subdivision 1, is amended to read:
83.10 		Subdivision 1.Fee. A county board may require that each person who is booked for 
83.11 	confinement at a county or regional jail, and not released upon completion of the booking 
83.12 	process, pay a fee of up to $10 to the sheriff's department of the county in which the jail 
83.13 	is located to cover costs incurred by the county in the booking of that person. The fee 
83.14 	is payable immediately from any money then possessed by the person being booked, or 
83.15 	any money deposited with the sheriff's department on the person's behalf. If the person 
83.16 	has no funds at the time of booking or during the period of any incarceration, the sheriff 
83.17 	shall notify the district court in the county where the charges related to the booking are 
83.18 	pending, and shall request the assessment of the fee. Notwithstanding section 609.10 or 
83.19 	609.125, upon notification from the sheriff, the district court must order the fee paid to the 
83.20 	sheriff's department as part of any sentence or disposition imposed. If the person is not 
83.21 	charged, is acquitted, or if the charges are dismissed, the sheriff shall return the fee to the 
83.22 	person at the last known address listed in the booking records.  

83.23 	Sec. 16. LEGISLATIVE COMMISSION ON MANDATE REFORM; FIRST 
83.24 	MEETING.
 83.25 	The first meeting of the Legislative Commission on Mandate Reform must be held 
83.26 	as soon as practicable after all appointments are made. The speaker of the house must 
83.27 	designate a commission member to convene the first meeting. The first commission serves 
83.28 	until a new commission is appointed at the beginning of the next biennium.

83.29 	ARTICLE 5
83.30 	TRUTH IN TAXATION

83.31 	Section 1. Minnesota Statutes 2008, section 123B.10, subdivision 1, is amended to read:
83.32 		Subdivision 1.Budgets; form of notification. (a) Every board must publish revenue 
83.33 	and expenditure budgets for the current year and the actual revenues, expenditures, fund 
84.1 	balances for the prior year and projected fund balances for the current year in a form 
84.2 	prescribed by the commissioner within one week of the acceptance of the final audit by 
84.3 	the board, or November 30, whichever is earlier. The forms prescribed must be designed 
84.4 	so that year to year comparisons of revenue, expenditures and fund balances can be made. 
84.5 	(b) A school board annually must notify the public of its revenue, expenditures, fund 
84.6 	balances, and other relevant budget information. The board must include the budget 
84.7 	information required by this section in the materials provided as a part of its truth in 
84.8 	taxation hearing, post the materials in a conspicuous place on the district's official Web 
84.9 	site, including a link to the district's school report card on the Department of Education's 
84.10 	Web site, and publish the information in a qualified newspaper of general circulation 
84.11 	in the district.

84.12 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
84.13 	thereafter.

84.14 	Sec. 2. Minnesota Statutes 2008, section 275.065, subdivision 1, is amended to read:
84.15 		Subdivision 1.Proposed levy. (a) Notwithstanding any law or charter to the 
84.16 	contrary, on or before September 15 5, each taxing authority, other than a school district, 
84.17 	shall adopt a proposed budget and shall certify to the county auditor the proposed or, in 
84.18 	the case of a town, the final property tax levy for taxes payable in the following year.
84.19 	(b) On or before September 30 20, each school district that has not mutually agreed 
84.20 	with its home county to extend this date shall certify to the county auditor the proposed 
84.21 	property tax levy for taxes payable in the following year. Each school district that has 
84.22 	agreed with its home county to delay the certification of its proposed property tax levy 
84.23 	must certify its proposed property tax levy for the following year no later than October 7
84.24 	September 28. The school district shall certify the proposed levy as:
84.25 	(1) a specific dollar amount by school district fund, broken down between 
84.26 	voter-approved and non-voter-approved levies and between referendum market value 
84.27 	and tax capacity levies; or
84.28 	(2) the maximum levy limitation certified by the commissioner of education 
84.29 	according to section 126C.48, subdivision 1.
84.30 	(c) If the board of estimate and taxation or any similar board that establishes 
84.31 	maximum tax levies for taxing jurisdictions within a first class city certifies the maximum 
84.32 	property tax levies for funds under its jurisdiction by charter to the county auditor by 
84.33 	September 15 1, the city shall be deemed to have certified its levies for those taxing 
84.34 	jurisdictions.
85.1 	(d) For purposes of this section, "taxing authority" includes all home rule and 
85.2 	statutory cities, towns, counties, school districts, and special taxing districts as defined 
85.3 	in section 275.066. Intermediate school districts that levy a tax under chapter 124 or 
85.4 	136D, joint powers boards established under sections 123A.44 to 123A.446, and Common 
85.5 	School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing 
85.6 	districts for purposes of this section.
85.7 	(e) At the meeting where a taxing authority, other than a town, adopts its proposed 
85.8 	tax levy under paragraph (a) or (b), the taxing authority shall announce the time and place 
85.9 	of its subsequent regularly scheduled meetings at which the budget levy will be discussed 
85.10 	and at which the public will be allowed to speak. The time and place of those meetings 
85.11 	must be included in the proceedings or summary of the proceedings published in the 
85.12 	official newspaper of the taxing authority under section 123B.09, 375.12, or 412.191.

85.13 	EFFECTIVE DATE. This section is effective for proposed notices prepared in 2010 
85.14 	and thereafter, for property taxes payable in 2011 and thereafter, except that paragraph 
85.15 	(e) is effective for taxes payable in 2010 and thereafter.

85.16 	Sec. 3. Minnesota Statutes 2008, section 275.065, subdivision 1a, is amended to read:
85.17 		Subd. 1a.Overlapping jurisdictions. In the case of a taxing authority lying in two 
85.18 	or more counties, the home county auditor shall certify the proposed levy and the proposed 
85.19 	local tax rate to the other county auditor by October 5 September 25, unless the home 
85.20 	county has agreed to delay the certification of its proposed property tax levy, in which case 
85.21 	the home county auditor shall certify the proposed levy and the proposed local tax rate 
85.22 	to the other county auditor by October 10 September 30. The home county auditor must 
85.23 	estimate the levy or rate in preparing the notices required in subdivision 3, if the other 
85.24 	county has not certified the appropriate information. If requested by the home county 
85.25 	auditor, the other county auditor must furnish an estimate to the home county auditor.

85.26 	EFFECTIVE DATE. This section is effective for proposed notices prepared in 
85.27 	2010 and thereafter, for property taxes payable in 2011 and thereafter.

85.28 	Sec. 4. Minnesota Statutes 2008, section 275.065, subdivision 1c, is amended to read:
85.29 		Subd. 1c.Levy; shared, merged, consolidated services. If two or more taxing 
85.30 	authorities are in the process of negotiating an agreement for sharing, merging, or 
85.31 	consolidating services between those taxing authorities at the time the proposed levy is to 
85.32 	be certified under subdivision 1, each taxing authority involved in the negotiation shall 
85.33 	certify its total proposed levy as provided in that subdivision, including a notification to the 
86.1 	county auditor of the specific service involved in the agreement which is not yet finalized. 
86.2 	The affected taxing authorities may amend their proposed levies under subdivision 1 until 
86.3 	October 10 September 25 for levy amounts relating only to the specific service involved.

86.4 	EFFECTIVE DATE. This section is effective for proposed notices prepared in 
86.5 	2010 and thereafter, for property taxes payable in 2011 and thereafter.

86.6 	Sec. 5. Minnesota Statutes 2008, section 275.065, subdivision 3, is amended to read:
86.7 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare 
86.8 	and the county treasurer shall deliver after November 10 October 15 and on or before 
86.9 	November October 24 each year, by first class mail to each taxpayer at the address listed 
86.10 	on the county's current year's assessment roll, a notice of proposed property taxes. Upon 
86.11 	written request by the taxpayer, the treasurer may send the notice in electronic form or by 
86.12 	electronic mail instead of on paper or by ordinary mail.
86.13 	(b) The commissioner of revenue shall prescribe the form of the notice.
86.14 	(c) The notice must inform taxpayers that it contains the amount of property taxes 
86.15 	each taxing authority proposes to collect for taxes payable the following year. In the 
86.16 	case of a town, or in the case of the state general tax, the final tax amount will be its 
86.17 	proposed tax. In the case of taxing authorities required to hold a public meeting under 
86.18 	subdivision 6, the notice must clearly state that each taxing authority, including regional 
86.19 	library districts established under section 134.201, and including the metropolitan taxing 
86.20 	districts as defined in paragraph (i), but excluding all other special taxing districts and 
86.21 	towns, will hold a public meeting to receive public testimony on the proposed budget and 
86.22 	proposed or final property tax levy, or, in case of a school district, on the current budget 
86.23 	and proposed property tax levy.The notice must clearly state for each city, county, school 
86.24 	district, regional library authority established under section 134.201, and metropolitan 
86.25 	taxing districts as defined in paragraph (i), the time and place of the taxing authorities' 
86.26 	regularly scheduled meetings occurring after October 24, at which the budget and levy 
86.27 	will be discussed. The taxing authorities must provide the county auditor with the 
86.28 	information to be included in the notice on or before the time it certifies its proposed levy 
86.29 	under subdivision 1. The public shall be allowed to speak at that meeting. It must clearly 
86.30 	state the time and place of each taxing authority's meeting, provide a telephone number for 
86.31 	the taxing authority that taxpayers may call if they have questions related to the notice,
86.32 	and an address where comments will be received by mail.
86.33 	(d) The notice must state for each parcel:
86.34 	(1) the market value of the property as determined under section 273.11, and used 
86.35 	for computing property taxes payable in the following year and for taxes payable in the 
87.1 	current year as each appears in the records of the county assessor on November September
87.2 	1 of the current year; and, in the case of residential property, whether the property is 
87.3 	classified as homestead or nonhomestead. The notice must clearly inform taxpayers of the 
87.4 	years to which the market values apply and that the values are final values;
87.5 	(2) the items listed below, shown separately by county, city or town, and state general 
87.6 	tax, net of the residential and agricultural homestead credit under section 273.1384, voter 
87.7 	approved school levy, other local school levy, and the sum of the special taxing districts, 
87.8 	and as a total of all taxing authorities:
87.9 	(i) the actual tax for taxes payable in the current year; and
87.10 	(ii) the proposed tax amount.
87.11 	If the county levy under clause (2) includes an amount for a lake improvement 
87.12 	district as defined under sections 103B.501 to 103B.581, the amount attributable for that 
87.13 	purpose must be separately stated from the remaining county levy amount.
87.14 	In the case of a town or the state general tax, the final tax shall also be its proposed 
87.15 	tax unless the town changes its levy at a special town meeting under section 365.52. If a 
87.16 	school district has certified under section 126C.17, subdivision 9, that a referendum will 
87.17 	be held in the school district at the November general election, the county auditor must 
87.18 	note next to the school district's proposed amount that a referendum is pending and that, if 
87.19 	approved by the voters, the tax amount may be higher than shown on the notice. In the 
87.20 	case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be 
87.21 	listed separately from the remaining amount of the city's levy. In the case of the city of 
87.22 	St. Paul, the levy for the St. Paul Library Agency must be listed separately from the 
87.23 	remaining amount of the city's levy. In the case of Ramsey County, any amount levied 
87.24 	under section 134.07 may be listed separately from the remaining amount of the county's 
87.25 	levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax 
87.26 	under chapter 276A or 473F applies, the proposed tax levy on the captured value or the 
87.27 	proposed tax levy on the tax capacity subject to the areawide tax must each be stated 
87.28 	separately and not included in the sum of the special taxing districts; and
87.29 	(3) the increase or decrease between the total taxes payable in the current year and 
87.30 	the total proposed taxes, expressed as a percentage.
87.31 	For purposes of this section, the amount of the tax on homesteads qualifying under 
87.32 	the senior citizens' property tax deferral program under chapter 290B is the total amount 
87.33 	of property tax before subtraction of the deferred property tax amount.
87.34 	(e) The notice must clearly state that the proposed or final taxes do not include 
87.35 	the following:
87.36 	(1) special assessments;
88.1 	(2) levies approved by the voters after the date the proposed taxes are certified, 
88.2 	including bond referenda and school district levy referenda;
88.3 	(3) a levy limit increase approved by the voters by the first Tuesday after the first 
88.4 	Monday in November of the levy year as provided under section 275.73;
88.5 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster 
88.6 	occurring after the date the proposed taxes are certified;
88.7 	(5) amounts necessary to pay tort judgments against the taxing authority that become 
88.8 	final after the date the proposed taxes are certified; and
88.9 	(6) the contamination tax imposed on properties which received market value 
88.10 	reductions for contamination.
88.11 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or 
88.12 	the county treasurer to deliver the notice as required in this section does not invalidate the 
88.13 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
88.14 	(g) If the notice the taxpayer receives under this section lists the property as 
88.15 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
88.16 	applicable deadline, and the property qualifies for the homestead classification in that 
88.17 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
88.18 	in the following year.
88.19 	(h) In the case of class 4 residential property used as a residence for lease or rental 
88.20 	periods of 30 days or more, the taxpayer must either:
88.21 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 
88.22 	renter, or lessee; or
88.23 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
88.24 	The notice must be mailed or posted by the taxpayer by November October 27 or 
88.25 	within three days of receipt of the notice, whichever is later. A taxpayer may notify the 
88.26 	county treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises 
88.27 	to which the notice must be mailed in order to fulfill the requirements of this paragraph.
88.28 	(i) For purposes of this subdivision, subdivisions and subdivision 5a and 6, 
88.29 	"metropolitan special taxing districts" means the following taxing districts in the 
88.30 	seven-county metropolitan area that levy a property tax for any of the specified purposes 
88.31 	listed below:
88.32 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 
88.33 	473.446, 473.521, 473.547, or 473.834;
88.34 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 
88.35 	and 
88.36 	(3) Metropolitan Mosquito Control Commission under section 473.711.
89.1 	For purposes of this section, any levies made by the regional rail authorities in the 
89.2 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
89.3 	398A shall be included with the appropriate county's levy and shall be discussed at that 
89.4 	county's public hearing.
89.5 	(j) The governing body of a county, city, or school district may, with the consent 
89.6 	of the county board, include supplemental information with the statement of proposed 
89.7 	property taxes about the impact of state aid increases or decreases on property tax 
89.8 	increases or decreases and on the level of services provided in the affected jurisdiction. 
89.9 	This supplemental information may include information for the following year, the current 
89.10 	year, and for as many consecutive preceding years as deemed appropriate by the governing 
89.11 	body of the county, city, or school district. It may include only information regarding:
89.12 	(1) the impact of inflation as measured by the implicit price deflator for state and 
89.13 	local government purchases;
89.14 	(2) population growth and decline;
89.15 	(3) state or federal government action; and
89.16 	(4) other financial factors that affect the level of property taxation and local services 
89.17 	that the governing body of the county, city, or school district may deem appropriate to 
89.18 	include.
89.19 	The information may be presented using tables, written narrative, and graphic 
89.20 	representations and may contain instruction toward further sources of information or 
89.21 	opportunity for comment.

89.22 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
89.23 	thereafter, except that the changes advancing the dates for preparing and mailing the 
89.24 	notices are effective for proposed notices in 2010, for taxes payable in 2011 and thereafter.

89.25 	Sec. 6. Minnesota Statutes 2008, section 275.065, subdivision 6, is amended to read:
89.26 		Subd. 6.Public hearing; Adoption of budget and levy. (a) For purposes of this 
89.27 	section, the following terms shall have the meanings given:
89.28 	(1) "Initial hearing" means the first and primary hearing held to discuss the taxing 
89.29 	authority's proposed budget and proposed property tax levy for taxes payable in the 
89.30 	following year, or, for school districts, the current budget and the proposed property tax 
89.31 	levy for taxes payable in the following year.
89.32 	(2) "Continuation hearing" means a hearing held to complete the initial hearing, if 
89.33 	the initial hearing is not completed on its scheduled date.
90.1 	(3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final 
90.2 	property tax levy, and, in the case of taxing authorities other than school districts, the final 
90.3 	budget, for taxes payable in the following year.
90.4 	(b) Between November 29 and December 20, the governing bodies of a city that has a 
90.5 	population over 500, county, metropolitan special taxing districts as defined in subdivision 
90.6 	3, paragraph (i), and regional library districts shall each hold an initial public hearing 
90.7 	to discuss and seek public comment on its final budget and property tax levy for taxes 
90.8 	payable in the following year, and the governing body of the school district shall hold an 
90.9 	initial public hearing to review its current budget and proposed property tax levy for taxes 
90.10 	payable in the following year. The metropolitan special taxing districts shall be required to 
90.11 	hold only a single joint initial public hearing, the location of which will be determined by 
90.12 	the affected metropolitan agencies. A city, county, metropolitan special taxing district as 
90.13 	defined in subdivision 3, paragraph (i), regional library district established under section 
90.14 	134.201, or school district is not required to hold a public hearing under this subdivision 
90.15 	unless its proposed property tax levy for taxes payable in the following year, as certified 
90.16 	under subdivision 1, has increased over its final property tax levy for taxes payable in the 
90.17 	current year by a percentage that is greater than the percentage increase in the implicit 
90.18 	price deflator for government consumption expenditures and gross investment for state 
90.19 	and local governments prepared by the Bureau of Economic Analysts of the United States 
90.20 	Department of Commerce for the 12-month period ending March 31 of the current year.
90.21 	(c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than 
90.22 	Saturday. No initial hearing may be held on a Sunday.
90.23 	(d) At the initial hearing under this subdivision, the percentage increase in property 
90.24 	taxes proposed by the taxing authority, if any, and the specific purposes for which property 
90.25 	tax revenues are being increased must be discussed. During the discussion, the governing 
90.26 	body shall hear comments regarding a proposed increase and explain the reasons for the 
90.27 	proposed increase. The public shall be allowed to speak and to ask questions. At the public 
90.28 	hearing, the school district must also provide and discuss information on the distribution 
90.29 	of its revenues by revenue source, and the distribution of its spending by program area.
90.30 	(e) If the initial hearing is not completed on its scheduled date, the taxing authority 
90.31 	must announce, prior to adjournment of the hearing, the date, time, and place for the 
90.32 	continuation of the hearing. The continuation hearing must be held at least five business 
90.33 	days but no more than 14 business days after the initial hearing. A continuation hearing 
90.34 	may not be held later than December 20 except as provided in paragraphs (f) and (g). 
90.35 	A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than 
90.36 	Saturday. No continuation hearing may be held on a Sunday.
91.1 	(f) The governing body of a county shall hold its initial hearing on the first Thursday 
91.2 	in December each year, and may hold additional initial hearings on other dates before 
91.3 	December 20 if necessary for the convenience of county residents. If the county needs a 
91.4 	continuation of its hearing, the continuation hearing shall be held on the third Tuesday 
91.5 	in December. If the third Tuesday in December falls on December 21, the county's 
91.6 	continuation hearing shall be held on Monday, December 20.
91.7 	(g) The metropolitan special taxing districts shall hold a joint initial public hearing 
91.8 	on the first Wednesday of December. A continuation hearing, if necessary, shall be held on 
91.9 	the second Wednesday of December even if that second Wednesday is after December 10.
91.10 	(h) The county auditor shall provide for the coordination of initial and continuation 
91.11 	hearing dates for all school districts and cities within the county to prevent conflicts under 
91.12 	clauses (i) and (j).
91.13 	(i) By August 10, each school board and the board of the regional library district 
91.14 	shall certify to the county auditors of the counties in which the school district or regional 
91.15 	library district is located the dates on which it elects to hold its initial hearing and any 
91.16 	continuation hearing. If a school board or regional library district does not certify these 
91.17 	dates by August 10, the auditor will assign the initial and continuation hearing dates. The 
91.18 	dates elected or assigned must not conflict with the initial and continuation hearing dates 
91.19 	of the county or the metropolitan special taxing districts.
91.20 	(j) By August 20, the county auditor shall notify the clerks of the cities within the 
91.21 	county of the dates on which school districts and regional library districts have elected to 
91.22 	hold their initial and continuation hearings. At the time a city certifies its proposed levy 
91.23 	under subdivision 1 it shall certify the dates on which it elects to hold its initial hearing and 
91.24 	any continuation hearing. Until September 15, the first and second Mondays of December 
91.25 	are reserved for the use of the cities. If a city does not certify its hearing dates by 
91.26 	September 15, the auditor shall assign the initial and continuation hearing dates. The dates 
91.27 	elected or assigned for the initial hearing must not conflict with the initial hearing dates 
91.28 	of the county, metropolitan special taxing districts, regional library districts, or school 
91.29 	districts within which the city is located. To the extent possible, the dates of the city's 
91.30 	continuation hearing should not conflict with the continuation hearing dates of the county, 
91.31 	metropolitan special taxing districts, regional library districts, or school districts within 
91.32 	which the city is located. This paragraph does not apply to cities of 500 population or less.
91.33 	(k) The county initial hearing date and the city, metropolitan special taxing district, 
91.34 	regional library district, and school district initial hearing dates must be designated on 
91.35 	the notices required under subdivision 3. The continuation hearing dates need not be 
91.36 	stated on the notices.
92.1 	(l) At a subsequent hearing, each county, school district, city over 500 population, 
92.2 	and metropolitan special taxing district may amend its proposed property tax levy 
92.3 	and must adopt a final property tax levy. Each county, city over 500 population, and 
92.4 	metropolitan special taxing district may also amend its proposed budget and must adopt a 
92.5 	final budget at the subsequent hearing. The final property tax levy must be adopted prior 
92.6 	to adopting the final budget. A school district is not required to adopt its final budget at the 
92.7 	subsequent hearing. The subsequent hearing of a taxing authority must be held on a date 
92.8 	subsequent to the date of the taxing authority's initial public hearing. If a continuation 
92.9 	hearing is held, the subsequent hearing must be held either immediately following the 
92.10 	continuation hearing or on a date subsequent to the continuation hearing. The subsequent 
92.11 	hearing may be held at a regularly scheduled board or council meeting or at a special 
92.12 	meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing 
92.13 	of a taxing authority does not have to be coordinated by the county auditor to prevent a 
92.14 	conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any 
92.15 	other taxing authority. All subsequent hearings must be held prior to five working days 
92.16 	after December 20 of the levy year. The date, time, and place of the subsequent hearing 
92.17 	must be announced at the initial public hearing or at the continuation hearing.
92.18 	(m) (a) The property tax levy certified under section 275.07 by a city of any 
92.19 	population, county, metropolitan special taxing district, regional library district, or school 
92.20 	district must not exceed the proposed levy determined under subdivision 1, except by an 
92.21 	amount up to the sum of the following amounts:
92.22 	(1) the amount of a school district levy whose voters approved a referendum to 
92.23 	increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after 
92.24 	the proposed levy was certified;
92.25 	(2) the amount of a city or county levy approved by the voters after the proposed 
92.26 	levy was certified;
92.27 	(3) the amount of a levy to pay principal and interest on bonds approved by the 
92.28 	voters under section 475.58 after the proposed levy was certified;
92.29 	(4) the amount of a levy to pay costs due to a natural disaster occurring after the 
92.30 	proposed levy was certified, if that amount is approved by the commissioner of revenue 
92.31 	under subdivision 6a;
92.32 	(5) the amount of a levy to pay tort judgments against a taxing authority that become 
92.33 	final after the proposed levy was certified, if the amount is approved by the commissioner 
92.34 	of revenue under subdivision 6a;
93.1 	(6) the amount of an increase in levy limits certified to the taxing authority by the 
93.2 	commissioner of education or the commissioner of revenue after the proposed levy was 
93.3 	certified; and
93.4 	(7) the amount required under section 126C.55; and
93.5 	(8) the amount of unallotment under section 16A.152 that was recertified under 
93.6 	section 275.07, subdivision 6.
93.7 	(n) (b) This subdivision does not apply to towns and special taxing districts other 
93.8 	than regional library districts and metropolitan special taxing districts.
93.9 	(o) (c) Notwithstanding the requirements of this section, the employer is required to 
93.10 	meet and negotiate over employee compensation as provided for in chapter 179A.

93.11 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
93.12 	thereafter.

93.13 	Sec. 7. Minnesota Statutes 2008, section 275.07, subdivision 1, is amended to read:
93.14 		Subdivision 1.Certification of levy. (a) Except as provided under paragraph (b), 
93.15 	the taxes voted by cities, counties, school districts, and special districts shall be certified 
93.16 	by the proper authorities to the county auditor on or before five working days after 
93.17 	December 20 10 in each year. A town must certify the levy adopted by the town board to 
93.18 	the county auditor by September 15 5 each year. If the town board modifies the levy at 
93.19 	a special town meeting after September 15 5, the town board must recertify its levy to 
93.20 	the county auditor on or before five working days after December 20 10. If a city, town, 
93.21 	county, school district, or special district fails to certify its levy by that date, its levy shall 
93.22 	be the amount levied by it for the preceding year.
93.23 	(b)(i) The taxes voted by counties under sections 103B.241, 103B.245, and 
93.24 	103B.251 shall be separately certified by the county to the county auditor on or before 
93.25 	five working days after December 20 10 in each year. The taxes certified shall not be 
93.26 	reduced by the county auditor by the aid received under section 273.1398, subdivision 
93.27 	3. If a county fails to certify its levy by that date, its levy shall be the amount levied by 
93.28 	it for the preceding year.
93.29 	(ii) For purposes of the proposed property tax notice under section 275.065 and 
93.30 	the property tax statement under section 276.04, for the first year in which the county 
93.31 	implements the provisions of this paragraph, the county auditor shall reduce the county's 
93.32 	levy for the preceding year to reflect any amount levied for water management purposes 
93.33 	under clause (i) included in the county's levy.

94.1 	EFFECTIVE DATE. This section is effective for property taxes payable in 2011 
94.2 	and thereafter.

94.3 	Sec. 8. Minnesota Statutes 2008, section 275.07, subdivision 4, is amended to read:
94.4 		Subd. 4.Report to commissioner. (a) On or before October 8 September 20 of 
94.5 	each year, the county auditor shall report to the commissioner of revenue the proposed 
94.6 	levy certified by local units of government under section 275.065, subdivision 1. If 
94.7 	any taxing authorities have notified the county auditor that they are in the process of 
94.8 	negotiating an agreement for sharing, merging, or consolidating services but that when 
94.9 	the proposed levy was certified under section 275.065, subdivision 1c, the agreement was 
94.10 	not yet finalized, the county auditor shall supply that information to the commissioner 
94.11 	when filing the report under this section and shall recertify the affected levies as soon as 
94.12 	practical after October 10 September 25.
94.13 	(b) On or before January 15 5 of each year, the county auditor shall report to the 
94.14 	commissioner of revenue the final levy certified by local units of government under 
94.15 	subdivision 1.
94.16 	(c) The levies must be reported in the manner prescribed by the commissioner.

94.17 	EFFECTIVE DATE. This section is effective for property taxes payable in 2011 
94.18 	and thereafter.

94.19 	Sec. 9. Minnesota Statutes 2008, section 375.194, subdivision 5, is amended to read:
94.20 		Subd. 5.Determination of county tax rate. The eligible county's proposed and 
94.21 	final tax rates shall be determined by dividing the certified levy by the total taxable net tax 
94.22 	capacity, without regard to any abatements granted under this section. The county board 
94.23 	shall make available the estimated amount of the abatement at the public hearing under 
94.24 	section 275.065, subdivision 6.

94.25 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
94.26 	thereafter.

94.27 	Sec. 10. Minnesota Statutes 2008, section 383A.75, subdivision 3, is amended to read:
94.28 		Subd. 3.Duties. The committee is authorized to and shall meet from time to time 
94.29 	to make appropriate recommendations for the efficient and effective use of property tax 
94.30 	dollars raised by the jurisdictions for programs, buildings, and operations. In addition, 
94.31 	the committee shall:
95.1 	(1) identify trends and factors likely to be driving budget outcomes over the next 
95.2 	five years with recommendations for how the jurisdictions should manage those trends 
95.3 	and factors to increase efficiency and effectiveness;
95.4 	(2) agree, by October 1 of each year, on the appropriate level of overall property tax 
95.5 	levy for the three jurisdictions and publicly report such to the governing bodies of each 
95.6 	jurisdiction for ratification or modification by resolution; and
95.7 	(3) plan for the joint truth-in-taxation hearings under section 275.065, subdivision 
95.8 	8; and  
95.9 	(4) (3) identify, by December 31 of each year, areas of the budget to be targeted in 
95.10 	the coming year for joint review to improve services or achieve efficiencies.
95.11 	In carrying out its duties, the committee shall consult with public employees of 
95.12 	each jurisdiction and with other stakeholders of the city, county, and school district, as 
95.13 	appropriate.

95.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
95.15 	thereafter.

95.16 	Sec. 11. Minnesota Statutes 2008, section 446A.086, subdivision 8, is amended to read:
95.17 		Subd. 8.Tax levy for repayment. (a) With the approval of the authority, a 
95.18 	governmental unit may levy in the year the state makes a payment under this section an 
95.19 	amount up to the amount necessary to provide funds for the repayment of the amount paid 
95.20 	by the state plus interest through the date of estimated repayment by the governmental 
95.21 	unit. The proceeds of this levy may be used only for this purpose unless they exceed the 
95.22 	amount actually due. Any excess must be used to repay other state payments made under 
95.23 	this section or must be deposited in the debt redemption fund of the governmental unit. 
95.24 	The amount of aids to be reduced to repay the state are decreased by the amount levied.
95.25 	(b) If the state is not repaid in full for a payment made under this section by 
95.26 	November 30 of the calendar year following the year in which the state makes the 
95.27 	payment, the authority shall require the governmental unit to certify a property tax levy in 
95.28 	an amount up to the amount necessary to provide funds for repayment of the amount paid 
95.29 	by the state plus interest through the date of estimated repayment by the governmental unit. 
95.30 	To prevent undue hardship, the authority may allow the governmental unit to certify the 
95.31 	levy over a five-year period. The proceeds of the levy may be used only for this purpose 
95.32 	unless they are in excess of the amount actually due, in which case the excess must be used 
95.33 	to repay other state payments made under this section or must be deposited in the debt 
95.34 	redemption fund of the governmental unit. If the authority orders the governmental unit to 
95.35 	levy, the amount of aids reduced to repay the state are decreased by the amount levied.
96.1 	(c) A levy under this subdivision is an increase in the levy limits of the governmental 
96.2 	unit for purposes of section 275.065, subdivision 6, and must be explained as a specific 
96.3 	increase at the meeting required under that provision.

96.4 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
96.5 	thereafter.

96.6 	Sec. 12. Minnesota Statutes 2008, section 465.719, subdivision 9, is amended to read:
96.7 		Subd. 9.Application of other laws. A corporation created by a political subdivision 
96.8 	under this section must comply with every law that applies to the political subdivision, 
96.9 	as if the corporation is a part of the political subdivision, unless the resolution ratifying 
96.10 	creation of the corporation specifically exempts the corporation from part or all of a law. 
96.11 	If the resolution exempts the corporation from part or all of a law, the resolution must 
96.12 	make a detailed and specific finding as to why the corporation cannot fulfill its purpose if 
96.13 	the corporation is subject to that law. A corporation may not be exempted from chapter 
96.14 	13D, the Minnesota Open Meeting Law, sections 138.163 to 138.25, governing records 
96.15 	management, or chapter 13, the Minnesota Government Data Practices Act. Any affected 
96.16 	or interested person may bring an action in district court to void the resolution on the 
96.17 	grounds that the findings are not sufficiently detailed and specific, or that the corporation 
96.18 	can fulfill its purpose if it is subject to the law from which the resolution exempts the 
96.19 	corporation. Laws that apply to a political subdivision that also apply to a corporation 
96.20 	created by a political subdivision under this subdivision include, but are not limited to:  
96.21 	(1) chapter 13D, the Minnesota Open Meeting Law;
96.22 	(2) chapter 13, the Minnesota Government Data Practices Act;
96.23 	(3) section 471.345, the Uniform Municipal Contracting Law;  
96.24 	(4) sections 43A.17, limiting the compensation of employees based on the governor's 
96.25 	salary; 471.991 to 471.999, providing for equitable pay; and 465.72 and 465.722, 
96.26 	governing severance pay;  
96.27 	(5) section 275.065, providing for truth-in-taxation hearings. If any tax revenues of 
96.28 	the political subdivision will be appropriated to the corporation, the corporation's annual 
96.29 	operating and capital budgets must be included in the truth-in-taxation hearing of the 
96.30 	political subdivision that created the corporation;  
96.31 	(6) (5) if the corporation issues debt, its debt is included in the political subdivision's 
96.32 	debt limit if it would be included if issued by the political subdivision, and issuance of the 
96.33 	debt is subject to the election and other requirements of chapter 475 and section 471.69;  
96.34 	(7) (6) section 471.895, prohibiting acceptance of gifts from interested parties, and 
96.35 	sections 471.87 to 471.89, relating to interests in contracts;  
97.1 	(8) (7) chapter 466, relating to municipal tort liability;
97.2 	(9) (8) chapter 118A, requiring deposit insurance or bond or pledged collateral for 
97.3 	deposits;
97.4 	(10) (9) chapter 118A, restricting investments;
97.5 	(11) (10) section 471.346, requiring ownership of vehicles to be identified;  
97.6 	(12) (11) sections 471.38 to 471.41, requiring claims to be in writing, itemized, and 
97.7 	approved by the governing board before payment can be made; and  
97.8 	(13) (12) the corporation cannot make advances of pay, make or guarantee loans to 
97.9 	employees, or provide in-kind benefits unless authorized by law.

97.10 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
97.11 	thereafter.

97.12 	Sec. 13. Minnesota Statutes 2008, section 473.13, subdivision 1, is amended to read:
97.13 		Subdivision 1.Budget. (a) On or before December 20 10 of each year, the council, 
97.14 	after the public hearing required in section 275.065, shall adopt a final budget covering its 
97.15 	anticipated receipts and disbursements for the ensuing year and shall decide upon the total 
97.16 	amount necessary to be raised from ad valorem tax levies to meet its budget. The budget 
97.17 	shall state in detail the expenditures for each program to be undertaken, including the 
97.18 	expenses for salaries, consultant services, overhead, travel, printing, and other items. The 
97.19 	budget shall state in detail the capital expenditures of the council for the budget year, based 
97.20 	on a five-year capital program adopted by the council and transmitted to the legislature. 
97.21 	After adoption of the budget and no later than five working days after December 20, the 
97.22 	council shall certify to the auditor of each metropolitan county the share of the tax to be 
97.23 	levied within that county, which must be an amount bearing the same proportion to the 
97.24 	total levy agreed on by the council as the net tax capacity of the county bears to the net tax 
97.25 	capacity of the metropolitan area. The maximum amount of any levy made for the purpose 
97.26 	of this chapter may not exceed the limits set by the statute authorizing the levy.  
97.27 	(b) Each even-numbered year the council shall prepare for its transit programs a 
97.28 	financial plan for the succeeding three calendar years, in half-year segments. The financial 
97.29 	plan must contain schedules of user charges and any changes in user charges planned or 
97.30 	anticipated by the council during the period of the plan. The financial plan must contain a 
97.31 	proposed request for state financial assistance for the succeeding biennium.
97.32 	(c) In addition, the budget must show for each year:
97.33 	(1) the estimated operating revenues from all sources including funds on hand at the 
97.34 	beginning of the year, and estimated expenditures for costs of operation, administration, 
97.35 	maintenance, and debt service;
98.1 	(2) capital improvement funds estimated to be on hand at the beginning of the year 
98.2 	and estimated to be received during the year from all sources and estimated cost of capital 
98.3 	improvements to be paid out or expended during the year, all in such detail and form as 
98.4 	the council may prescribe; and
98.5 	(3) the estimated source and use of pass-through funds.

98.6 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
98.7 	thereafter, except that the date change in certifying the budget is effective for taxes 
98.8 	payable in 2011 and thereafter.

98.9 	Sec. 14.  REPEALER.
 98.10 	 Minnesota Statutes 2008, section 275.065, subdivisions 5a, 6b, 6c, 8, 9, and 10, are 
98.11 	repealed.

98.12 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
98.13 	thereafter.

98.14 	ARTICLE 6
98.15 	PROPERTY TAX

98.16 	Section 1. Minnesota Statutes 2008, section 40A.09, is amended to read:
98.17 	40A.09 AGRICULTURAL PRESERVE; ELIGIBILITY.
98.18 		Subdivision 1.Basic requirements. An owner or owners of land that has been 
98.19 	designated for exclusive long-term agricultural use under a plan submitted to or approved 
98.20 	by the commissioner is eligible to apply for the creation of an agricultural preserve. 
98.21 	Eligibility continues unless the commissioner determines that the plan and official 
98.22 	controls do not address the elements contained in this chapter or unless the county fails to 
98.23 	implement the plan and official controls as required by this chapter.
98.24 		Subd. 2.Termination of eligibility. (a) A parcel of property enrolled under this 
98.25 	section whose owner is subject to a final enforcement action for a violation of chapter 18B, 
98.26 	18C, 103E, 103F, 103G, or 103H, or any rule adopted under these chapters including but 
98.27 	not limited to the agricultural shoreland use standards in Minnesota Rules, chapter 6120, 
98.28 	occurring on the parcel, shall be removed from the program.
98.29 	(b) For the purposes of this subdivision, "final enforcement action" means any 
98.30 	administrative, civil, or criminal penalty other than an initial verbal or written warning. 
98.31 	An enforcement action is not final until any time period for corrective action has expired, 
98.32 	and until the completion or expiration of any applicable review or appeal procedure or 
98.33 	period provided by law.
99.1 	(c) When a final enforcement action is taken based on a violation occurring on a 
99.2 	parcel enrolled under sections 40A.09 to 40A.12, the law enforcement officer or other 
99.3 	person enforcing the law or rule must notify the county assessor. The county assessor 
99.4 	must then notify the property owner that the parcel is being removed from the program. 
99.5 	Any parcel for which the assessor has been notified prior to March 1 of any year shall 
99.6 	be removed from the program for taxes payable in the following year. The assessor shall 
99.7 	calculate (i) the amount of any credit received under section 273.119 for the current year, 
99.8 	and (ii) the difference between the actual tax on the parcel for the current year and the 
99.9 	tax that would apply if the value was not restricted under this section, and multiply the 
99.10 	result by the number of years that the parcel has been under its current ownership or 
99.11 	five, whichever is less. The resulting amount plus any special assessments that have 
99.12 	been deferred under this section shall be extended against the property on the tax list for 
99.13 	the current year, provided that no interest or penalties shall be levied on the additional 
99.14 	taxes if timely paid.
99.15 	(d) Termination of eligibility under this subdivision shall not affect the covenant 
99.16 	required under section 40A.10. A parcel of property terminated under this subdivision may 
99.17 	not be reenrolled for a period of three years, unless it has been sold or transferred so that it 
99.18 	is no longer under the same ownership, in full or in part, as when the parcel was terminated.

99.19 	EFFECTIVE DATE. This section is effective for taxes payable in 2011 and 
99.20 	thereafter.

99.21 	Sec. 2. Minnesota Statutes 2008, section 272.02, subdivision 7, is amended to read:
99.22 		Subd. 7.Institutions of public charity. (a) Institutions of purely public charity that 
99.23 	are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue 
99.24 	Code are exempt. if they meet the requirements of this subdivision. In determining 
99.25 	whether real property is exempt under this subdivision, the following factors must be 
99.26 	considered:
99.27 	(1) whether the stated purpose of the undertaking is to be helpful to others without 
99.28 	immediate expectation of material reward;
99.29 	(2) whether the institution of public charity is supported by material donations, gifts, 
99.30 	or government grants for services to the public in whole or in part;
99.31 	(3) whether a material number of the recipients of the charity receive benefits or 
99.32 	services at reduced or no cost, or whether the organization provides services to the public 
99.33 	that alleviate burdens or responsibilities that would otherwise be borne by the government;
99.34 	(4) whether the income received, including material gifts and donations, produces a 
99.35 	profit to the charitable institution that is distributed to private interests;
100.1 	(5) whether the beneficiaries of the charity are restricted or unrestricted, and, if 
100.2 	restricted, whether the class of persons to whom the charity is made available is one 
100.3 	having a reasonable relationship to the charitable objectives; and
100.4 	(6) whether dividends, in form or substance, or assets upon dissolution, are available 
100.5 	to private interests.
100.6 	A charitable organization must satisfy the factors in clauses (1) to (6) for its property 
100.7 	to be exempt under this subdivision, unless there is a reasonable justification for failing to 
100.8 	meet the factors in clause (2), (3), or (5). If there is reasonable justification for failing to 
100.9 	meet the factors in clause (2), (3), or (5), an organization is a purely public charity under 
100.10 	this subdivision without meeting those factors. After an exemption is properly granted 
100.11 	under this subdivision, it will remain in effect unless there is a material change in facts.
100.12 	(b) For purposes of this subdivision, a grant is a written instrument or electronic 
100.13 	document defining a legal relationship between a granting agency and a grantee when 
100.14 	the principal purpose of the relationship is to transfer cash or something of value to the 
100.15 	grantee to support a public purpose authorized by law in a general manner instead of 
100.16 	acquiring by professional or technical contract, purchase, lease, or barter property or 
100.17 	services for the direct benefit or use of the granting agency.
100.18 	(c) In determining whether rental housing property qualifies for exemption under 
100.19 	this subdivision, the following are not gifts or donations to the owner of the rental housing:
100.20 	(1) rent assistance provided by the government to or on behalf of tenants; and
100.21 	(2) financing assistance or tax credits provided by the government to the owner on 
100.22 	condition that specific units or a specific quantity of units be set aside for persons or 
100.23 	families with certain income characteristics.

100.24 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
100.25 	thereafter.

100.26 	Sec. 3. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
100.27 	to read:
100.28 		Subd. 90.Nursing homes. A nursing home licensed under section 144A.02 or a 
100.29 	boarding care home certified as a nursing facility under title 19 of the Social Security 
100.30 	Act that is exempt from federal income taxation pursuant to section 501(c)(3) of the 
100.31 	Internal Revenue Code is exempt from property taxation if the nursing home or boarding 
100.32 	care home either:
100.33 	(1) is certified to participate in the medical assistance program under title 19 of 
100.34 	the Social Security Act; or
101.1 	(2) certifies to the commissioner of revenue that it does not discharge residents 
101.2 	due to the inability to pay.

101.3 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
101.4 	thereafter.

101.5 	Sec. 4. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
101.6 	to read:
101.7 		Subd. 91.Railroad wye connections. Any real or personal property of a railroad 
101.8 	wye connection, including the track, ties, ballast, switch gear, and related improvements, 
101.9 	is exempt if it meets all of the following: (1) is publicly owned; (2) is funded, in whole or 
101.10 	in part, by state grants; (3) is located within the metropolitan area as defined in section 
101.11 	473.121, subdivision 2; (4) includes a single track segment that is no longer than 2,500 feet 
101.12 	in length; (5) connects intersecting rail lines; and (6) is constructed after January 1, 2009.

101.13 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
101.14 	thereafter, for taxes payable in 2010 and thereafter.

101.15 	Sec. 5. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
101.16 	to read:
101.17 		Subd. 92.Electric generation facility; personal property. (a) Notwithstanding 
101.18 	subdivision 9, clause (a), attached machinery and other personal property that is part of 
101.19 	an electric generation facility that exceeds 150 megawatts of installed capacity, does 
101.20 	not exceed 780 megawatts of summer capacity, and that meets the requirements of this 
101.21 	subdivision, is exempt. At the start of construction, the facility must:
101.22 	(1) be designed to utilize natural gas as a primary fuel;
101.23 	(2) be owned by an entity other than a public utility as defined in section 216B.02, 
101.24 	subdivision 4;
101.25 	(3) be located within five miles of two or more interstate natural gas pipelines;
101.26 	(4) be located within one mile of an existing electrical transmission substation with 
101.27 	operating alternating current voltages of 115 kV, 345 kV, and 500 kV;
101.28 	(5) be designed to provide electrical capacity, energy, and ancillary services;
101.29 	(6) have satisfied all of the requirements under section 216B.243;
101.30 	(7) have executed an interconnection agreement with the Midwest Independent 
101.31 	System Operator that does not require the acquisition of more than one mile of new 
101.32 	electric transmission right-of-way within the county where the facility is located, and does 
102.1 	not provide for any other new routes or corridors for future electric transmission lines in 
102.2 	the county where the facility is located;
102.3 	(8) be located in a county with an essential services and transmission services 
102.4 	ordinance;
102.5 	(9) have signed a development agreement with the county board in the county in 
102.6 	which the facility is located. The development agreement must be adopted by a two-thirds 
102.7 	vote of the county board, and must contain provisions ensuring that:
102.8 	(i) the facility is designed to use effluent from a wastewater treatment facility as its 
102.9 	preferred water source and will not seek an exemption from legislative approval under 
102.10 	section 103G.265, subdivision 3, paragraph (b);
102.11 	(ii) all processed wastewater discharge will be colocated with the outfall of a 
102.12 	wastewater treatment facility; and
102.13 	(iii) penalties will be paid to the county for harm to any aquifer or surface water as a 
102.14 	result of construction or operation and maintenance of the facility; and
102.15 	(10) have signed a development agreement with the township board in the township 
102.16 	in which the facility is located containing provisions ensuring that noise and visual 
102.17 	impacts of the facility are fully mitigated. The development agreement must be adopted 
102.18 	by a two-thirds vote of the township board.
102.19 	(b) Construction of the facility must begin after March 1, 2010, and before March 1, 
102.20 	2014. Property eligible for this exemption does not include electric transmission lines and 
102.21 	interconnections or gas pipelines and interconnections appurtenant to the facility.
102.22 	(c) The exemption granted under this subdivision is void if the Public Utilities 
102.23 	Commission issues a route permit for an electric transmission line connected to the 
102.24 	electric substation nearest the exempt facility on a route where no electric transmission 
102.25 	line currently exists.

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

102.27 	Sec. 6. [272.0275] PERSONAL PROPERTY USED TO GENERATE 
102.28 	ELECTRICITY; EXEMPTION.
102.29 		Subdivision 1.New plant construction after January 1, 2010. For a new 
102.30 	generating plant built and placed in service after January 1, 2010, its personal property 
102.31 	used to generate electric power is exempt if an exemption of generation personal property 
102.32 	form, with an attached siting agreement, is filed with the Department of Revenue. The 
102.33 	form must be signed by the utility, and the county and the city or town where the facility is 
102.34 	proposed to be located.
103.1 		Subd. 2.Definition; applicability. For purposes of this section, "personal property" 
103.2 	means tools, implements, and machinery of the generating plant. The exemption under this 
103.3 	section does not apply to transformers, transmission lines, distribution lines, or any other 
103.4 	tools, implements, and machinery that are part of an electric substation, wherever located.

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

103.6 	Sec. 7. Minnesota Statutes 2008, section 272.029, subdivision 6, is amended to read:
103.7 		Subd. 6.Distribution of revenues. Revenues from the taxes imposed under 
103.8 	subdivision 5 must be part of the settlement between the county treasurer and the county 
103.9 	auditor under section 276.09. The revenue must be distributed by the county auditor or the 
103.10 	county treasurer to local taxing jurisdictions in which the wind energy conversion system 
103.11 	is located as follows: beginning with distributions in 2006 2010, 80 percent to counties; 
103.12 	and 20 percent to cities and townships; and for distributions occurring in 2006 to 2009, 80 
103.13 	percent to counties; 14 percent to cities and townships; and six percent to school districts; 
103.14 	and for distributions occurring in 2004 and 2005 in the same proportion that each of the 
103.15 	local taxing jurisdiction's current year's net tax capacity based tax rate is to the current 
103.16 	year's total local net tax capacity based rate.

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

103.18 	Sec. 8. Minnesota Statutes 2008, section 273.111, is amended by adding a subdivision 
103.19 	to read:
103.20 		Subd. 9a.Cross-compliance with agricultural chemical and water laws.
 103.21 	(a) A parcel of property enrolled under this section whose owner is subject to a final 
103.22 	enforcement action for a violation of chapter 18B, 18C, 103E, 103F, 103G, or 103H, 
103.23 	or any rule adopted under these chapters including but not limited to the agricultural 
103.24 	shoreland use standards in Minnesota Rules, chapter 6120, occurring on the parcel, shall 
103.25 	be removed from the program.
103.26 	(b) For the purposes of this subdivision, "final enforcement action" means any 
103.27 	administrative, civil, or criminal penalty other than an initial verbal or written warning. 
103.28 	An enforcement action is not final until any time period for corrective action has expired, 
103.29 	and until the completion or expiration of any applicable review or appeal procedure or 
103.30 	period provided by law.
103.31 	(c) When a final enforcement action is taken based on a violation occurring on a 
103.32 	parcel enrolled under this section, the law enforcement officer or other person enforcing 
103.33 	the law or rule must notify the county assessor. The county assessor must then notify 
104.1 	the property owner that the parcel is being removed from the program. Any parcel for 
104.2 	which the assessor has been notified prior to March 1 of any year shall be removed from 
104.3 	the program for taxes payable in the following year. All deferred taxes on the parcel 
104.4 	during the current owner's time of ownership, but not to exceed five years, plus any 
104.5 	special assessments that have been deferred, shall be extended against the property on the 
104.6 	tax list for the current year, provided that no interest or penalties shall be levied on the 
104.7 	additional taxes if timely paid.
104.8 	(d) A parcel of property terminated under this subdivision may not be reenrolled for 
104.9 	a period of three years, unless it has been sold or transferred so that it is no longer under 
104.10 	the same ownership, in full or in part, as when the parcel was terminated.

104.11 	EFFECTIVE DATE. This section is effective for taxes payable in 2011 and 
104.12 	thereafter.

104.13 	Sec. 9. [273.115] PRESERVATION OF RIPARIAN BUFFERS.
104.14 		Subdivision 1.Definitions. (a) For the purposes of this section, the following 
104.15 	definitions apply.
104.16 	(b) "Riparian buffer" means a strip or area of deep-rooted, original native perennial 
104.17 	vegetation or vegetation restored with plants or seeds that originate from sources as close 
104.18 	to the site as possible, including trees, adjacent to public waters that extends a minimum 
104.19 	of 50 and a maximum of 100 feet landward from the ordinary high water level.
104.20 	(c) "Public waters" has the same meaning as defined under section 103G.005, 
104.21 	subdivision 15, excluding "wetlands," as defined under section 103G.005, subdivision 19, 
104.22 	and "public waters wetlands," as defined under section 103G.005, subdivision 15a.
104.23 	(d) "Ordinary high water level" means the boundary of public waters, and shall be an 
104.24 	elevation delineating the highest water level which has been maintained for a sufficient 
104.25 	period of time to leave evidence upon the landscape, commonly that point where the 
104.26 	natural vegetation changes from predominantly aquatic to predominantly terrestrial. For 
104.27 	watercourses, the ordinary high water level is the elevation of the top of the bank of 
104.28 	the channel. For reservoirs and flowages, the ordinary high water level is the operating 
104.29 	elevation of the normal summer pool.
104.30 	(e) "Buffer maintenance" means: 
104.31 	(1) inspecting the buffer periodically and identifying, repairing, and reseeding any 
104.32 	eroded or damaged areas;
104.33 	(2) preventing or addressing any soil compaction from vehicles, livestock, and 
104.34 	impervious surfaces that could inhibit infiltration or disrupt water flow patterns;
105.1 	(3) controlling weeds and managing any grazing livestock so as to minimize the 
105.2 	removal or alteration of the perennial plant community; and
105.3 	(4) refraining from applying fertilizers, pesticides, or animal wastes to the buffer 
105.4 	area, except to establish native vegetation.
105.5 		Subd. 2.Requirements. (a) Land constituting a riparian buffer that is classified as 
105.6 	class 2a under section 273.13, subdivision 23, or that is adjacent to land classified as class 
105.7 	2a, is entitled to valuation and tax deferment under this section if a covenant has been filed 
105.8 	with the county assessor and recorded in the county where the property is located.
105.9 	(b) The covenant must state that the buffer will be maintained in a natural state and 
105.10 	that annual buffer maintenance will be performed. The landowner must file an affidavit 
105.11 	with the county assessor at least once every three years stating that the buffer has been 
105.12 	maintained according to the definition in subdivision 1. If a landowner fails to meet 
105.13 	this requirement, the assessor must issue a written warning. If an affidavit is not filed 
105.14 	within 90 days of the written warning, the land shall be removed from the program. All 
105.15 	deferred taxes on the property during the current owner's time of ownership shall be 
105.16 	extended against the property on the tax list for the current year, provided that no interest 
105.17 	or penalties shall be levied on the additional taxes if timely paid.
105.18 	(c) Land qualifying under this subdivision shall be liable only for the taxes 
105.19 	determined based on the valuation prescribed in subdivision 3. All special assessments 
105.20 	levied against the land after the property has been enrolled in the program shall be deferred 
105.21 	until the property is withdrawn or becomes ineligible to continue in the program.
105.22 	(d) Real estate may not be enrolled for valuation and deferment under this section 
105.23 	and section 273.111, 273.112, 273.114, or 273.117 concurrently. Land enrolled under 
105.24 	section 273.111 that is withdrawn for enrollment under this subdivision shall not be 
105.25 	required to pay additional taxes under section 273.111, subdivision 3a or 9.
105.26 		Subd. 3.Determination of value. (a) Land for which an irrevocable covenant has 
105.27 	been recorded must be valued at 25 percent of the average value per acre of class 2b 
105.28 	rural vacant land in the surrounding area.
105.29 	(b) Land for which a revocable covenant has been recorded must be valued at 75 
105.30 	percent of the average value per acre of class 2b rural vacant land in the surrounding 
105.31 	area, provided that the covenant does not allow for its termination until at least 20 years 
105.32 	from the date that it was originally recorded.
105.33 	(c) For the purposes of this subdivision, surrounding area means the city or township 
105.34 	where the property is located, provided that there are at least ten other parcels containing 
105.35 	class 2b land in the city or township; otherwise, "surrounding area" means the city or 
106.1 	township where the property is located and all adjoining cities and townships within the 
106.2 	same county.
106.3 		Subd. 4.Separate determination of market value and tax. The assessor shall 
106.4 	make a separate determination of the market value of the real estate based on its highest 
106.5 	and best use. The tax based upon that value and the appropriate local tax rate applicable to 
106.6 	the property in the taxing district shall be recorded on the property assessment records.
106.7 		Subd. 5.Application and covenant agreement. (a) Application for deferment of 
106.8 	taxes and assessments under this subdivision shall be filed by May 1 of the year prior to 
106.9 	the year in which the taxes are payable. Any application filed under this subdivision and 
106.10 	granted shall continue in effect for subsequent years until the termination of the covenant 
106.11 	agreement under paragraph (b). The application must be filed with the county assessor on 
106.12 	a form prescribed by the commissioner of revenue. The assessor may require proof by 
106.13 	affidavit or otherwise that the property qualifies under subdivision 1.
106.14 	(b) The owner of the property must sign a covenant agreement that is filed with the 
106.15 	county assessor and recorded in the county where the property is located. The covenant 
106.16 	agreement must include all of the following:
106.17 	(1) legal description of the area to which the covenant applies;
106.18 	(2) name and address of the owner;
106.19 	(3) a statement that the land described in the covenant must be kept in a natural state, 
106.20 	and that annual buffer maintenance will be performed, for the duration of the covenant;
106.21 	(4) in the case of a revocable covenant under subdivision 3, paragraph (b), a 
106.22 	statement that the landowner may terminate the covenant agreement by notifying the 
106.23 	county assessor in writing four years in advance of the date of proposed termination, 
106.24 	provided that the notice of intent to terminate may not be given at any time before the land 
106.25 	has been subject to the covenant for a period of 16 years;
106.26 	(5) a statement that the covenant is binding on the owner or the owner's successor or 
106.27 	assigns and runs with the land; and 
106.28 	(6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as 
106.29 	described in subdivision 2.
106.30 	(c) Once a revocable covenant has been terminated, the property covered by 
106.31 	the covenant can never be re-enrolled under this subdivision unless it has been sold or 
106.32 	otherwise transferred to a different owner.
106.33 		Subd. 6.Additional taxes. Upon termination of a covenant agreement in 
106.34 	subdivision 5, paragraph (b), clause (4), the land to which the covenant applied shall 
106.35 	be subject to additional taxes in the amount equal to the difference between the taxes 
106.36 	determined in accordance with subdivision 3 and the amount determined under subdivision 
107.1 	4, provided that the amount determined under subdivision 4 shall not be greater than it 
107.2 	would have been had the actual bona fide sale price of the real property at an arm's-length 
107.3 	transaction been used in lieu of the market value determined under subdivision 4. The 
107.4 	additional taxes shall be extended against the property on the tax list for the current year, 
107.5 	provided that no interest or penalties shall be levied on the additional taxes if timely paid 
107.6 	and that the additional taxes shall only be levied with respect to the last seven years that 
107.7 	the property has been valued and assessed under this section. 
107.8 		Subd. 7.Cross-compliance with agricultural chemical and water laws. (a) A 
107.9 	parcel of property enrolled under this section whose owner or tenant is subject to a final 
107.10 	enforcement action for a violation of chapter 18B, 18C, 103E, 103F, 103G, or 103H, 
107.11 	or any rule adopted under these chapters including but not limited to the agricultural 
107.12 	shoreland use standards in Minnesota Rules, chapter 6120, occurring on the parcel, shall 
107.13 	be removed from the program.
107.14 	(b) For the purposes of this subdivision, "final enforcement action" means any 
107.15 	administrative, civil, or criminal penalty or action other than an initial verbal or written 
107.16 	warning. An enforcement action is not final until any time period for corrective action 
107.17 	has expired, and until the completion or expiration of any applicable review or appeal 
107.18 	procedure or period provided by law.
107.19 	(c) When a final enforcement action is taken based on a violation occurring on a 
107.20 	parcel enrolled under this section, the law enforcement officer or other person enforcing 
107.21 	the law or rule must notify the county assessor. The county assessor must then notify 
107.22 	the property owner that the parcel is being removed from the program. Any parcel for 
107.23 	which the assessor has been notified prior to March 1 of any year shall be removed from 
107.24 	the program for taxes payable in the following year, and subject to additional taxes as 
107.25 	provided in subdivision 6.
107.26 	(d) Termination of eligibility under this subdivision shall not affect the covenant 
107.27 	required under subdivision 5. A parcel of property terminated under this subdivision may 
107.28 	not be reenrolled for a period of three years, unless it has been sold or transferred so that it 
107.29 	is no longer under the same ownership, in full or in part, as when the parcel was terminated.
107.30 		Subd. 8.Lien. Any additional taxes imposed under subdivision 6 or 7 shall be a lien 
107.31 	upon the property assessed to the same extent and for the same duration as other taxes 
107.32 	imposed on the property in this state. The tax shall be annually extended by the county 
107.33 	auditor and, if and when payable, shall be collected and distributed in the manner provided 
107.34 	by law for the collection and distribution of other property taxes.

107.35 	EFFECTIVE DATE. This section is effective for assessment year 2011 and 
107.36 	thereafter, for taxes payable in 2012 and thereafter.

108.1 	Sec. 10. Minnesota Statutes 2008, section 273.1231, subdivision 1, is amended to read:
108.2 		Subdivision 1. Applicability.  For purposes of sections 273.1231 to 273.1235
108.3 	273.1236, the following words, terms, and phrases have the meanings given them in this 
108.4 	section unless the language or context clearly indicates that a different meaning is intended. 

108.5 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
108.6 	thereafter.

108.7 	Sec. 11. Minnesota Statutes 2008, section 273.1232, subdivision 1, is amended to read:
108.8 		Subdivision 1. Reassessments required.  For the purposes of sections 273.1231 to 
108.9 	273.1235 273.1236, the county assessor must reassess all damaged property in a disaster 
108.10 	or emergency area, except that the commissioner of revenue shall reassess all property 
108.11 	for which an application is submitted to the commissioner under section 273.1233 or 
108.12 	273.1235. As soon as practical, the assessor or commissioner of revenue must report 
108.13 	the reassessed value to the county auditor. 

108.14 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
108.15 	thereafter.

108.16 	Sec. 12. [273.1236] DISASTER-DAMAGED HOMES; PARTIAL VALUATION 
108.17 	EXCLUSION.
108.18 	(a) A homestead property that (1) sustained physical damage from a disaster or 
108.19 	emergency resulting in a reassessed market value that is at least $15,000 less than the 
108.20 	market value of the property established for the January 2 assessment in the year in which 
108.21 	the damage occurred, (2) has been substantially restored or rebuilt by the end of the 
108.22 	year following the year in which the damage occurred, (3) has a gross living area after 
108.23 	reconstruction that does not exceed 130 percent of the gross living area prior to the disaster 
108.24 	or emergency, and (4) has an estimated market value for the assessment year following the 
108.25 	year in which the restoration or reconstruction was substantially completed that exceeds 
108.26 	its estimated market value established for the January 2 assessment in the year in which 
108.27 	the damage occurred by at least $25,000 due to the restoration or reconstruction, is eligible 
108.28 	for a valuation exclusion under this section for the two assessment years immediately 
108.29 	following the year in which the restoration or reconstruction was completed.
108.30 	(b) The assessor shall determine the difference between the estimated market value 
108.31 	established for the January 2 assessment in the year in which the damage occurred and the 
108.32 	estimated market value established for the January 2 assessment in the year following the 
108.33 	completion of the restoration or reconstruction.
109.1 	(c) In the first assessment year following the restoration or reconstruction, all of the 
109.2 	difference identified under paragraph (b) shall be excluded in determining taxable market 
109.3 	value. In the second assessment year following the restoration or reconstruction, half of 
109.4 	the difference identified under paragraph (b) shall be excluded in determining taxable 
109.5 	market value.
109.6 	(d) For the purposes of this section, "gross living area" includes only above-grade 
109.7 	living area, and does not include any finished basement living area.
109.8 	(e) Application for the valuation exclusion under this section must be filed by 
109.9 	January 2 of the year following the year in which the restoration or reconstruction was 
109.10 	substantially completed. The application must be filed with the assessor of the county in 
109.11 	which the property is located on the form prescribed by the commissioner of revenue.

109.12 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
109.13 	thereafter. The application deadline in paragraph (e) is extended to June 30, 2009, for 
109.14 	restoration or reconstruction substantially completed in 2008.

109.15 	Sec. 13. Minnesota Statutes 2008, section 273.124, subdivision 1, is amended to read:
109.16 		Subdivision 1.General rule. (a) Residential real estate that is occupied and used 
109.17 	for the purposes of a homestead by its owner, who must be a Minnesota resident, is 
109.18 	a residential homestead.
109.19 	Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and 
109.20 	used as a homestead by its owner, who must be a Minnesota resident, is an agricultural 
109.21 	homestead.
109.22 	Dates for establishment of a homestead and homestead treatment provided to 
109.23 	particular types of property are as provided in this section.
109.24 	Property held by a trustee under a trust is eligible for homestead classification if the 
109.25 	requirements under this chapter are satisfied.
109.26 	The assessor shall require proof, as provided in subdivision 13, of the facts upon 
109.27 	which classification as a homestead may be determined. Notwithstanding any other law, 
109.28 	the assessor may at any time require a homestead application to be filed in order to verify 
109.29 	that any property classified as a homestead continues to be eligible for homestead status. 
109.30 	Notwithstanding any other law to the contrary, the Department of Revenue may, upon 
109.31 	request from an assessor, verify whether an individual who is requesting or receiving 
109.32 	homestead classification has filed a Minnesota income tax return as a resident for the most 
109.33 	recent taxable year for which the information is available.
110.1 	When there is a name change or a transfer of homestead property, the assessor may 
110.2 	reclassify the property in the next assessment unless a homestead application is filed to 
110.3 	verify that the property continues to qualify for homestead classification.
110.4 	(b) For purposes of this section, homestead property shall include property which 
110.5 	is used for purposes of the homestead but is separated from the homestead by a road, 
110.6 	street, lot, waterway, or other similar intervening property. The term "used for purposes 
110.7 	of the homestead" shall include but not be limited to uses for gardens, garages, or other 
110.8 	outbuildings commonly associated with a homestead, but shall not include vacant land 
110.9 	held primarily for future development. In order to receive homestead treatment for 
110.10 	the noncontiguous property, the owner must use the property for the purposes of the 
110.11 	homestead, and must apply to the assessor, both by the deadlines given in subdivision 
110.12 	9. After initial qualification for the homestead treatment, additional applications for 
110.13 	subsequent years are not required.
110.14 	(c) Residential real estate that is occupied and used for purposes of a homestead by a 
110.15 	relative of the owner is a homestead but only to the extent of the homestead treatment 
110.16 	that would be provided if the related owner occupied the property. For purposes of this 
110.17 	paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild, 
110.18 	grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship 
110.19 	may be by blood or marriage. Property that has been classified as seasonal residential 
110.20 	recreational property at any time during which it has been owned by the current owner or 
110.21 	spouse of the current owner will not be reclassified as a homestead unless it is occupied as 
110.22 	a homestead by the owner; this prohibition also applies to property that, in the absence of 
110.23 	this paragraph, would have been classified as seasonal residential recreational property at 
110.24 	the time when the residence was constructed. Neither the related occupant nor the owner 
110.25 	of the property may claim a property tax refund under chapter 290A for a homestead 
110.26 	occupied by a relative. In the case of a residence located on agricultural land, only the 
110.27 	house, garage, and immediately surrounding one acre of land shall be classified as a 
110.28 	homestead under this paragraph, except as provided in paragraph (d). In the case of 
110.29 	nonagricultural property, this paragraph only applies to applications approved before 
110.30 	December 16, 2009.
110.31 	(d) Agricultural property that is occupied and used for purposes of a homestead by 
110.32 	a relative of the owner, is a homestead, only to the extent of the homestead treatment 
110.33 	that would be provided if the related owner occupied the property, and only if all of the 
110.34 	following criteria are met:
110.35 	(1) the relative who is occupying the agricultural property is a son, daughter, brother, 
110.36 	sister, grandson, granddaughter, father, or mother of the owner of the agricultural property 
111.1 	or a son, daughter, brother, sister, grandson, or granddaughter of the spouse of the owner 
111.2 	of the agricultural property;
111.3 	(2) the owner of the agricultural property must be a Minnesota resident;
111.4 	(3) the owner of the agricultural property must not receive homestead treatment on 
111.5 	any other agricultural property in Minnesota; and
111.6 	(4) the owner of the agricultural property is limited to only one agricultural 
111.7 	homestead per family under this paragraph.
111.8 	Neither the related occupant nor the owner of the property may claim a property 
111.9 	tax refund under chapter 290A for a homestead occupied by a relative qualifying under 
111.10 	this paragraph. For purposes of this paragraph, "agricultural property" means the house, 
111.11 	garage, other farm buildings and structures, and agricultural land.
111.12 	Application must be made to the assessor by the owner of the agricultural property to 
111.13 	receive homestead benefits under this paragraph. The assessor may require the necessary 
111.14 	proof that the requirements under this paragraph have been met.
111.15 	(e) In the case of property owned by a property owner who is married, the assessor 
111.16 	must not deny homestead treatment in whole or in part if only one of the spouses occupies 
111.17 	the property and the other spouse is absent due to: (1) marriage dissolution proceedings, 
111.18 	(2) legal separation, (3) employment or self-employment in another location, or (4) other 
111.19 	personal circumstances causing the spouses to live separately, not including an intent to 
111.20 	obtain two homestead classifications for property tax purposes. To qualify under clause 
111.21 	(3), the spouse's place of employment or self-employment must be at least 50 miles distant 
111.22 	from the other spouse's place of employment, and the homesteads must be at least 50 miles 
111.23 	distant from each other. Homestead treatment, in whole or in part, shall not be denied to 
111.24 	the owner's spouse who previously occupied the residence with the owner if the absence 
111.25 	of the owner is due to one of the exceptions provided in this paragraph.
111.26 	(f) The assessor must not deny homestead treatment in whole or in part if:
111.27 	(1) in the case of a property owner who is not married, the owner is absent due to 
111.28 	residence in a nursing home, boarding care facility, or an elderly assisted living facility 
111.29 	property as defined in section 273.13, subdivision 25a, and the property is not otherwise 
111.30 	occupied; or
111.31 	(2) in the case of a property owner who is married, the owner or the owner's spouse 
111.32 	or both are absent due to residence in a nursing home, boarding care facility, or an elderly 
111.33 	assisted living facility property as defined in section 273.13, subdivision 25a, and the 
111.34 	property is not occupied or is occupied only by the owner's spouse.
111.35 	(g) If an individual is purchasing property with the intent of claiming it as a 
111.36 	homestead and is required by the terms of the financing agreement to have a relative 
112.1 	shown on the deed as a co-owner, the assessor shall allow a full homestead classification. 
112.2 	This provision only applies to first-time purchasers, whether married or single, or to a 
112.3 	person who had previously been married and is purchasing as a single individual for the 
112.4 	first time. The application for homestead benefits must be on a form prescribed by the 
112.5 	commissioner and must contain the data necessary for the assessor to determine if full 
112.6 	homestead benefits are warranted.
112.7 	(h) If residential or agricultural real estate is occupied and used for purposes of a 
112.8 	homestead by a child of a deceased owner and the property is subject to jurisdiction of 
112.9 	probate court, the child shall receive relative homestead classification under paragraph (c) 
112.10 	or (d) to the same extent they would be entitled to it if the owner was still living, until 
112.11 	the probate is completed. For purposes of this paragraph, "child" includes a relationship 
112.12 	by blood or by marriage.
112.13 	(i) If a single-family home, duplex, or triplex classified as either residential 
112.14 	homestead or agricultural homestead is also used to provide licensed child care, the 
112.15 	portion of the property used for licensed child care must be classified as a part of the 
112.16 	homestead property.

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

112.18 	Sec. 14. Minnesota Statutes 2008, section 273.13, subdivision 25, is amended to read:
112.19 		Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 
112.20 	units and used or held for use by the owner or by the tenants or lessees of the owner 
112.21 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
112.22 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
112.23 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
112.24 	purposes, without regard to whether the property has been platted or subdivided. The 
112.25 	market value of class 4a property has a class rate of 1.25 percent. 
112.26 	(b) Class 4b includes: 
112.27 	(1) residential real estate containing less than four units that does not qualify as class 
112.28 	4bb, other than seasonal residential recreational property; 
112.29 	(2) manufactured homes not classified under any other provision; 
112.30 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
112.31 	farm classified under subdivision 23, paragraph (b) containing two or three units; and 
112.32 	(4) unimproved property that is classified residential as determined under subdivision 
112.33 	33. 
112.34 	The market value of class 4b property has a class rate of 1.25 percent. 
112.35 	(c) Class 4bb includes: 
113.1 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
113.2 	residential recreational property; and 
113.3 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
113.4 	nonhomestead farm classified under subdivision 23, paragraph (b). 
113.5 	Class 4bb property has the same class rates as class 1a property under subdivision 22. 
113.6 	Property that has been classified as seasonal residential recreational property at 
113.7 	any time during which it has been owned by the current owner or spouse of the current 
113.8 	owner does not qualify for class 4bb. 
113.9 	(d) Class 4c property includes: 
113.10 	(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph 
113.11 	(b), clause (1), real and personal property devoted to temporary and seasonal residential 
113.12 	occupancy for recreation purposes, including real and personal property devoted to 
113.13 	temporary and seasonal residential occupancy for recreation purposes and not devoted to 
113.14 	commercial purposes for more than 250 days in the year preceding the year of assessment. 
113.15 	For purposes of this clause, property is devoted to a commercial purpose on a specific 
113.16 	day if any portion of the property is used for residential occupancy, and a fee is charged 
113.17 	for residential occupancy. Class 4c property must contain three or more rental units. A 
113.18 	"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual 
113.19 	camping site equipped with water and electrical hookups for recreational vehicles. 
113.20 	Except for property described in item (iii), class 4c property must provide recreational 
113.21 	activities such as renting ice fishing houses, boats and motors, snowmobiles, downhill or 
113.22 	cross-country ski equipment; provide marina services, launch services, or guide services; 
113.23 	or sell bait and fishing tackle. A camping pad offered for rent by a property that otherwise 
113.24 	qualifies for class 4c is also class 4c regardless of the term of the rental agreement, as 
113.25 	long as the use of the camping pad does not exceed 250 days. In order for a property to 
113.26 	be classified as class 4c, seasonal residential recreational for commercial purposes under 
113.27 	this clause, at least 40 percent of the annual gross lodging receipts related to the property 
113.28 	must be from business conducted during 90 consecutive days and either (i) at least 60 
113.29 	percent of all paid bookings by lodging guests during the year must be for periods of at 
113.30 	least two consecutive nights; or (ii) at least 20 percent of the annual gross receipts must 
113.31 	be from charges for rental of fish houses, boats and motors, snowmobiles, downhill or 
113.32 	cross-country ski equipment, or charges for marina services, launch services, and guide 
113.33 	services, or the sale of bait and fishing tackle; or (iii) the property contains 20 rental units 
113.34 	or less, is devoted to temporary residential occupancy, is located in a township or a city 
113.35 	that has a population of 2,500 or less, and is located outside the metropolitan area as 
113.36 	defined under section 473.121, subdivision 2. For purposes of this determination, a paid 
114.1 	booking of five or more nights shall be counted as two bookings. Class 4c also includes 
114.2 	commercial use real property used exclusively for recreational purposes in conjunction 
114.3 	with class 4c property devoted to temporary and seasonal residential occupancy for 
114.4 	recreational purposes, up to a total of two acres, provided the property is not devoted 
114.5 	to commercial recreational use for more than 250 days in the year preceding the year 
114.6 	of assessment and is located within two miles of the class 4c property with which it is 
114.7 	used. Owners of real and personal property devoted to temporary and seasonal residential 
114.8 	occupancy for recreation purposes and all or a portion of which was devoted to commercial 
114.9 	purposes for not more than 250 days in the year preceding the year of assessment desiring 
114.10 	classification as class 4c, must submit a declaration to the assessor designating the cabins 
114.11 	or units occupied for 250 days or less in the year preceding the year of assessment by 
114.12 	January 15 of the assessment year. Those cabins or units and a proportionate share of the 
114.13 	land on which they are located must be designated class 4c as otherwise provided. The 
114.14 	remainder of the cabins or units and a proportionate share of the land on which they are 
114.15 	located will be designated as class 3a. The owner of property desiring designation as class 
114.16 	4c property must provide guest registers or other records demonstrating that the units for 
114.17 	which class 4c designation is sought were not occupied for more than 250 days in the 
114.18 	year preceding the assessment if so requested. The portion of a property operated as a 
114.19 	(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other 
114.20 	nonresidential facility operated on a commercial basis not directly related to temporary 
114.21 	and seasonal residential occupancy for recreation purposes does not qualify for class 4c; 
114.22 	(2) qualified property used as a golf course if: 
114.23 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
114.24 	dues, but a membership fee may not be required in order to use the property for golfing, 
114.25 	and its green fees for golfing must be comparable to green fees typically charged by 
114.26 	municipal courses; and 
114.27 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 
114.28 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
114.29 	with the golf course is classified as class 3a property; 
114.30 	(3) real property up to a maximum of three acres of land owned and used by a 
114.31 	nonprofit community service oriented organization and that is not used for residential 
114.32 	purposes on either a temporary or permanent basis, qualifies for class 4c provided that 
114.33 	it meets either of the following: 
114.34 	(i) the property is not used for a revenue-producing activity for more than six days 
114.35 	in the calendar year preceding the year of assessment; or 
115.1 	(ii) the organization makes annual charitable contributions and donations at least 
115.2 	equal to the property's previous year's property taxes and the property is allowed to be 
115.3 	used for public and community meetings or events for no charge, as appropriate to the 
115.4 	size of the facility. 
115.5 	For purposes of this clause, 
115.6 	(A) "charitable contributions and donations" has the same meaning as lawful 
115.7 	gambling purposes under section 349.12, subdivision 25, excluding those purposes 
115.8 	relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; 
115.9 	(B) "property taxes" excludes the state general tax; 
115.10 	(C) a "nonprofit community service oriented organization" means any corporation, 
115.11 	society, association, foundation, or institution organized and operated exclusively for 
115.12 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt 
115.13 	from federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal 
115.14 	Revenue Code; and 
115.15 	(D) "revenue-producing activities" shall include but not be limited to property or that 
115.16 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
115.17 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
115.18 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
115.19 	insurance business, or office or other space leased or rented to a lessee who conducts a 
115.20 	for-profit enterprise on the premises. 
115.21 	Any portion of the property qualifying under item (i) which is used for revenue-producing 
115.22 	activities for more than six days in the calendar year preceding the year of assessment 
115.23 	shall be assessed as class 3a. The use of the property for social events open exclusively 
115.24 	to members and their guests for periods of less than 24 hours, when an admission is 
115.25 	not charged nor any revenues are received by the organization shall not be considered a 
115.26 	revenue-producing activity. 
115.27 	The organization shall maintain records of its charitable contributions and donations 
115.28 	and of public meetings and events held on the property and make them available upon 
115.29 	request any time to the assessor to ensure eligibility. An organization meeting the 
115.30 	requirement under item (ii) must file an application by May 1 with the assessor for 
115.31 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
115.32 	application form and instructions; 
115.33 	(4) postsecondary student housing of not more than one acre of land that is owned by 
115.34 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
115.35 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
115.36 	miles of the border of a college campus; 
116.1 	(5) manufactured home parks as defined in section 327.14, subdivision 3; 
116.2 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
116.3 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
116.4 	and is located within the metropolitan area as defined in section 473.121, subdivision 2; 
116.5 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
116.6 	under section 272.01, subdivision 2, and the land on which it is located, provided that: 
116.7 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
116.8 	Airports Commission, or group thereof; and 
116.9 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
116.10 	leased premise, prohibits commercial activity performed at the hangar. 
116.11 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
116.12 	be filed by the new owner with the assessor of the county where the property is located 
116.13 	within 60 days of the sale; 
116.14 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
116.15 	section 272.01, subdivision 2, and the land on which it is located, provided that: 
116.16 	(i) the land abuts a public airport; and 
116.17 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
116.18 	agreement restricting the use of the premises, prohibiting commercial use or activity 
116.19 	performed at the hangar; and 
116.20 	(9) residential real estate, a portion of which is used by the owner for homestead 
116.21 	purposes, and that is also a place of lodging, if all of the following criteria are met: 
116.22 	(i) rooms are provided for rent to transient guests that generally stay for periods 
116.23 	of 14 or fewer days; 
116.24 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
116.25 	in the basic room rate; 
116.26 	(iii) meals are not provided to the general public except for special events on fewer 
116.27 	than seven days in the calendar year preceding the year of the assessment; and 
116.28 	(iv) the owner is the operator of the property.
116.29 	The market value subject to the 4c classification under this clause is limited to five rental 
116.30 	units. Any rental units on the property in excess of five, must be valued and assessed as 
116.31 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
116.32 	be classified as class 1a property under subdivision 22; and
116.33 	(10) real property up to a maximum of three acres and operated as a restaurant 
116.34 	as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 
116.35 	as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 
116.36 	is either devoted to commercial purposes for not more than 250 consecutive days, or 
117.1 	receives at least 60 percent of its annual gross receipts from business conducted during 
117.2 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
117.3 	included in determining the property's qualification under subitem (B). The property's 
117.4 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
117.5 	sales located on the premises must be excluded. Owners of real property desiring 4c 
117.6 	classification under this clause must submit an annual declaration to the assessor by 
117.7 	February 1 of the current assessment year, based on the property's relevant information for 
117.8 	the preceding assessment year. 
117.9 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
117.10 	parcel of seasonal residential recreational property not used for commercial purposes has 
117.11 	the same class rates as class 4bb property, (ii) manufactured home parks assessed under 
117.12 	clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 
117.13 	residential recreational property has a class rate of one percent for the first $500,000 of 
117.14 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
117.15 	property described in clause (4) has a class rate of one percent, (v) the market value of 
117.16 	property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi) 
117.17 	that portion of the market value of property in clause (9) qualifying for class 4c property 
117.18 	has a class rate of 1.25 percent. 
117.19 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
117.20 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
117.21 	of the units in the building qualify as low-income rental housing units as certified under 
117.22 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
117.23 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
117.24 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
117.25 	land as the qualifying low-income rental housing units are to the total units in the building. 
117.26 	For all properties qualifying as class 4d, the market value determined by the assessor must 
117.27 	be based on the normal approach to value using normal unrestricted rents. 
117.28 	Class 4d property has a class rate of 0.75 percent. 

117.29 	EFFECTIVE DATE. This section is effective for assessment year 2009, taxes 
117.30 	payable in 2010, and thereafter. For assessment year 2009 only, the January 15 application 
117.31 	date under paragraph (d), clause (1), shall be extended to July 1, 2009, for property 
117.32 	qualifying for the 2009 assessment under paragraph (d), clause (1), item (iii).

117.33 	Sec. 15. Minnesota Statutes 2008, section 273.13, subdivision 34, is amended to read:
117.34 		Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value 
117.35 	of property owned by a veteran or by the veteran and the veteran's spouse qualifying 
118.1 	for homestead classification under subdivision 22 or 23 is excluded in determining the 
118.2 	property's taxable market value if it serves as the homestead of a military veteran, as 
118.3 	defined in section 197.447, who has a service-connected disability of 70 percent or more. 
118.4 	To qualify for exclusion under this subdivision, the veteran must have been honorably 
118.5 	discharged from the United States armed forces, as indicated by United States Government 
118.6 	Form DD214 or other official military discharge papers, and must be certified by the 
118.7 	United States Veterans Administration as having a service-connected disability. 
118.8 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is 
118.9 	excluded, except as provided in clause (2); and
118.10 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
118.11 	excluded.
118.12 	(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), 
118.13 	clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the 
118.14 	spouse holds the legal or beneficial title to the homestead and permanently resides there, 
118.15 	the exclusion shall carry over to the benefit of the veteran's spouse for one five additional 
118.16 	assessment year or years or until such time as the spouse sells, transfers, or otherwise 
118.17 	disposes of the property or remarries, whichever comes first.
118.18 	(d) In the case of an agricultural homestead, only the portion of the property 
118.19 	consisting of the house and garage and immediately surrounding one acre of land qualifies 
118.20 	for the valuation exclusion under this subdivision.
118.21 	(e) A property qualifying for a valuation exclusion under this subdivision is not 
118.22 	eligible for the credit under section 273.1384, subdivision 1, or classification under 
118.23 	subdivision 22, paragraph (b).
118.24 	(f) To qualify for a valuation exclusion under this subdivision a property owner must 
118.25 	apply to the assessor by July 1 of each assessment year, except that an annual reapplication 
118.26 	is not required once a property has been accepted for a valuation exclusion under paragraph 
118.27 	(b), clause (2), and the property continues to qualify until there is a change in ownership.

118.28 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
118.29 	thereafter.

118.30 	Sec. 16. Minnesota Statutes 2008, section 273.1393, is amended to read:
118.31 	273.1393 COMPUTATION OF NET PROPERTY TAXES.
118.32 	Notwithstanding any other provisions to the contrary, "net" property taxes are 
118.33 	determined by subtracting the credits in the order listed from the gross tax:
118.34 	(1) disaster credit as provided in sections 273.1231 to 273.1235; 
119.1 	(2) powerline credit as provided in section 273.42; 
119.2 	(3) agricultural preserves credit as provided in section 473H.10; 
119.3 	(4) enterprise zone credit as provided in section 469.171; 
119.4 	(5) disparity reduction credit;
119.5 	(6) conservation tax credit as provided in section 273.119; 
119.6 	(7) homestead and agricultural credits as provided in section 273.1384; 
119.7 	(8) taconite homestead credit as provided in section 273.135; and
119.8 	(9) supplemental homestead credit as provided in section 273.1391; and.
119.9 	(10) the bovine tuberculosis zone credit, as provided in section 273.113.
119.10 	The combination of all property tax credits must not exceed the gross tax amount.

119.11 	EFFECTIVE DATE. This section is effective for property taxes payable in 2010 
119.12 	and thereafter.

119.13 	Sec. 17. Minnesota Statutes 2008, section 275.025, subdivision 1, is amended to read:
119.14 		Subdivision 1.Levy amount. (a) The state general levy is levied against 
119.15 	commercial-industrial property and seasonal residential recreational property, as defined 
119.16 	in this section. The state general levy base amount is $592,000,000 for taxes payable in 
119.17 	2002. For taxes payable in subsequent years, the levy base amount is increased each year 
119.18 	by multiplying the levy base amount for the prior year by the sum of one plus the rate of 
119.19 	increase, if any, in the implicit price deflator for government consumption expenditures 
119.20 	and gross investment for state and local governments prepared by the Bureau of Economic 
119.21 	Analysts of the United States Department of Commerce for the 12-month period ending 
119.22 	March 31 of the year prior to the year the taxes are payable. The tax under this section is 
119.23 	not treated as a local tax rate under section 469.177 and is not the levy of a governmental 
119.24 	unit under chapters 276A and 473F.
119.25 	(b) The commissioner shall increase or decrease the preliminary or final rate for a 
119.26 	year as necessary to account for errors and tax base changes that affected a preliminary or 
119.27 	final rate for either of the two preceding years. Adjustments are allowed to the extent that 
119.28 	the necessary information is available to the commissioner at the time the rates for a year 
119.29 	must be certified, and for the following reasons:
119.30 	(1) an erroneous report of taxable value by a local official;
119.31 	(2) an erroneous calculation by the commissioner; and
119.32 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
119.33 	residential recreational property reported on the abstracts of tax lists submitted under 
119.34 	section 275.29 that was not reported on the abstracts of assessment submitted under 
119.35 	section 270C.89 for the same year.
120.1 	The commissioner may, but need not, make adjustments if the total difference in the tax 
120.2 	levied for the year would be less than $100,000.
120.3 	(c) In setting the rate, for taxes payable in 2010 only, the commissioner shall exclude 
120.4 	the tax capacity of property described in section 473.625 from the tax base. The amount 
120.5 	levied against property described in section 473.625 for taxes payable in 2010 shall be 
120.6 	permanently added to the 2010 base amount before inflating to the 2011 levy amount 
120.7 	under paragraph (a).

120.8 	EFFECTIVE DATE. This section is effective beginning for taxes payable in 2010.

120.9 	Sec. 18. Minnesota Statutes 2008, section 275.025, subdivision 2, is amended to read:
120.10 		Subd. 2.Commercial-industrial tax capacity. For the purposes of this section, 
120.11 	"commercial-industrial tax capacity" means the tax capacity of all taxable property 
120.12 	classified as class 3 or class 5(1) under section 273.13, except for electric generation 
120.13 	attached machinery under class 3 and property described in section 473.625. County 
120.14 	commercial-industrial tax capacity amounts are not adjusted for the captured net tax 
120.15 	capacity of a tax increment financing district under section 469.177, subdivision 2, the 
120.16 	net tax capacity of transmission lines deducted from a local government's total net tax 
120.17 	capacity under section 273.425, or fiscal disparities contribution and distribution net 
120.18 	tax capacities under chapter 276A or 473F.

120.19 	EFFECTIVE DATE. This section is effective beginning for taxes payable in 2010.

120.20 	Sec. 19. Minnesota Statutes 2008, section 276.04, subdivision 2, is amended to read:
120.21 		Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the 
120.22 	printing of the tax statements. The commissioner of revenue shall prescribe the form of 
120.23 	the property tax statement and its contents. The tax statement must not state or imply 
120.24 	that property tax credits are paid by the state of Minnesota. The statement must contain 
120.25 	a tabulated statement of the dollar amount due to each taxing authority and the amount 
120.26 	of the state tax from the parcel of real property for which a particular tax statement is 
120.27 	prepared. The dollar amounts attributable to the county, the state tax, the voter approved 
120.28 	school tax, the other local school tax, the township or municipality, and the total of 
120.29 	the metropolitan special taxing districts as defined in section 275.065, subdivision 3, 
120.30 	paragraph (i), must be separately stated. The amounts due all other special taxing districts, 
120.31 	if any, may be aggregated except that any levies made by the regional rail authorities in the 
120.32 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
120.33 	398A shall be listed on a separate line directly under the appropriate county's levy. If the 
121.1 	county levy under this paragraph includes an amount for a lake improvement district as 
121.2 	defined under sections 103B.501 to 103B.581, the amount attributable for that purpose 
121.3 	must be separately stated from the remaining county levy amount. In the case of Ramsey 
121.4 	County, if the county levy under this paragraph includes an amount for public library 
121.5 	service under section 134.07, the amount attributable for that purpose may be separated 
121.6 	from the remaining county levy amount. The amount of the tax on homesteads qualifying 
121.7 	under the senior citizens' property tax deferral program under chapter 290B is the total 
121.8 	amount of property tax before subtraction of the deferred property tax amount. The 
121.9 	amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any, 
121.10 	must also be separately stated. The dollar amounts, including the dollar amount of any 
121.11 	special assessments, may be rounded to the nearest even whole dollar. For purposes of this 
121.12 	section whole odd-numbered dollars may be adjusted to the next higher even-numbered 
121.13 	dollar. The amount of market value excluded under section 273.11, subdivision 16, if any, 
121.14 	must also be listed on the tax statement. 
121.15 	(b) The property tax statements for manufactured homes and sectional structures 
121.16 	taxed as personal property shall contain the same information that is required on the 
121.17 	tax statements for real property. 
121.18 	(c) Real and personal property tax statements must contain the following information 
121.19 	in the order given in this paragraph. The information must contain the current year tax 
121.20 	information in the right column with the corresponding information for the previous year 
121.21 	in a column on the left: 
121.22 	(1) the property's estimated market value under section 273.11, subdivision 1; 
121.23 	(2) the property's taxable market value after reductions under section 273.11, 
121.24 	subdivisions 1a and 16; 
121.25 	(3) the property's gross tax, before credits; 
121.26 	(4) for homestead residential and agricultural properties, the credits under section 
121.27 	273.1384; 
121.28 	(5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 
121.29 	273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of 
121.30 	credit received under section 273.135 must be separately stated and identified as "taconite 
121.31 	tax relief"; and 
121.32 	(6) the net tax payable in the manner required in paragraph (a). 
121.33 	(d) If the county uses envelopes for mailing property tax statements and if the county 
121.34 	agrees, a taxing district may include a notice with the property tax statement notifying 
121.35 	taxpayers when the taxing district will begin its budget deliberations for the current 
121.36 	year, and encouraging taxpayers to attend the hearings. If the county allows notices to 
122.1 	be included in the envelope containing the property tax statement, and if more than 
122.2 	one taxing district relative to a given property decides to include a notice with the tax 
122.3 	statement, the county treasurer or auditor must coordinate the process and may combine 
122.4 	the information on a single announcement. 

122.5 	EFFECTIVE DATE. This section is effective for taxes payable in 2011 and 
122.6 	thereafter.

122.7 	Sec. 20. Minnesota Statutes 2008, section 279.10, is amended to read:
122.8 	279.10 PUBLICATION CORRECTED.
122.9 	Immediately after preparing forms for printing such notice and list, and at least five 
122.10 	days before the first day for the publication thereof, every such publisher shall furnish 
122.11 	proof of the proposed publication to the county auditor for correction. When such the copy 
122.12 	has been corrected, the auditor shall return the same it to the printer, who shall publish it 
122.13 	as corrected. On the first day on which such the notice and list are published, the publisher 
122.14 	shall mail a copy of the newspaper containing the same the notice and list to the auditor. If 
122.15 	during the publication of the notice and list, or within ten days after the last publication 
122.16 	thereof, the auditor shall discover discovers that such the publication is invalid contains an 
122.17 	error, the auditor shall forthwith direct the publisher to republish the same as corrected
122.18 	publish the correct information for an additional period of two weeks. The auditor does 
122.19 	not have to direct the publisher to republish the entire list. The publisher, if not neglectful, 
122.20 	shall be is entitled to the same compensation as allowed by law for the original publication
122.21 	of the corrected information, but shall receive no further compensation therefor if such the 
122.22 	 republication is necessary by reason of the neglect of the publisher.

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

122.24 	Sec. 21. Minnesota Statutes 2008, section 282.08, is amended to read:
122.25 	282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.
122.26 	The net proceeds from the sale or rental of any parcel of forfeited land, or from the 
122.27 	sale of products from the forfeited land, must be apportioned by the county auditor to the 
122.28 	taxing districts interested in the land, as follows:
122.29 	(1) the portion required to pay any amounts included in the appraised value 
122.30 	under section 282.01, subdivision 3, as representing increased value due to any public 
122.31 	improvement made after forfeiture of the parcel to the state, but not exceeding the 
122.32 	amount certified by the appropriate governmental authority must be apportioned to the 
122.33 	governmental subdivision entitled to it;
123.1 	(2) the portion required to pay any amount included in the appraised value under 
123.2 	section 282.019, subdivision 5, representing increased value due to response actions 
123.3 	taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses 
123.4 	certified by the Pollution Control Agency or the commissioner of agriculture, must be 
123.5 	apportioned to the agency or the commissioner of agriculture and deposited in the fund 
123.6 	from which the expenses were paid;
123.7 	(3) the portion of the remainder required to discharge any special assessment 
123.8 	chargeable against the parcel for drainage or other purpose whether due or deferred at the 
123.9 	time of forfeiture, must be apportioned to the governmental subdivision entitled to it; and
123.10 	(4) any balance must be apportioned as follows:
123.11 	(i)(A) Except as provided in subitem (B), the county board may annually by 
123.12 	resolution set aside no more than 30 percent of the receipts remaining to be used for forest 
123.13 	development on tax-forfeited land and dedicated memorial forests, to be expended under 
123.14 	the supervision of the county board. It must be expended only on projects improving the 
123.15 	health and management of the forest resource.
123.16 	(B) The county board is authorized to use some of the money set aside under subitem 
123.17 	(A) to replace all or a portion of the amount of aid or credit reimbursement that the county 
123.18 	was to receive under sections 273.1384 and 477A.0124, but did not receive due to aid cuts 
123.19 	or unallotment from the state. Within six months of the actual aid or credit reimbursement 
123.20 	loss, the county board may adopt a resolution transferring money from this fund to the 
123.21 	county's general fund, not to exceed the amount of aid or credit reimbursement loss to the 
123.22 	county. This subitem expires January 1, 2012.
123.23 	(ii) The county board may annually by resolution set aside no more than 20 percent 
123.24 	of the receipts remaining to be used for the acquisition and maintenance of county parks 
123.25 	or recreational areas as defined in sections 398.31 to 398.36, to be expended under the 
123.26 	supervision of the county board.
123.27 	(iii) Any balance remaining must be apportioned as follows: county, 40 percent; 
123.28 	town or city, 20 percent; and school district, 40 percent, provided, however, that in 
123.29 	unorganized territory that portion which would have accrued to the township must be 
123.30 	administered by the county board of commissioners.

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

123.32 	Sec. 22. Minnesota Statutes 2008, section 290B.03, subdivision 1, is amended to read:
123.33 		Subdivision 1.Program qualifications. The qualifications for the senior citizens' 
123.34 	property tax deferral program are as follows:
124.1 	(1) the property must be owned and occupied as a homestead by a person 65 years 
124.2 	of age or older. In the case of a married couple, both at least one of the spouses must 
124.3 	be at least 65 years old at the time the first property tax deferral is granted, regardless 
124.4 	of whether the property is titled in the name of one spouse or both spouses, or titled in 
124.5 	another way that permits the property to have homestead status, and the other spouse 
124.6 	must be at least 62 years of age;
124.7 	(2) the total household income of the qualifying homeowners, as defined in section 
124.8 	290A.03, subdivision 5, for the calendar year preceding the year of the initial application 
124.9 	may not exceed $60,000 $75,000;
124.10 	(3) the homestead must have been owned and occupied as the homestead of at 
124.11 	least one of the qualifying homeowners for at least 15 ten years prior to the year the 
124.12 	initial application is filed;
124.13 	(4) there are no state or federal tax liens or judgment liens on the homesteaded 
124.14 	property;
124.15 	(5) there are no mortgages or other liens on the property that secure future advances, 
124.16 	except for those subject to credit limits that result in compliance with clause (6); and
124.17 	(6) the total unpaid balances of debts secured by mortgages and other liens on the 
124.18 	property, including unpaid and delinquent special assessments and interest and any 
124.19 	delinquent property taxes, penalties, and interest, but not including property taxes payable 
124.20 	during the year, does not exceed 75 percent of the assessor's estimated market value for 
124.21 	the year.

124.22 	EFFECTIVE DATE. This section is effective July 1, 2009, and thereafter.

124.23 	Sec. 23. Minnesota Statutes 2008, section 290B.04, subdivision 3, is amended to read:
124.24 		Subd. 3.Excess-income certification by taxpayer. A taxpayer whose initial 
124.25 	application has been approved under subdivision 2 shall notify the commissioner of 
124.26 	revenue in writing by July 1 if the taxpayer's household income for the preceding calendar 
124.27 	year exceeded $60,000 $75,000. The certification must state the homeowner's total 
124.28 	household income for the previous calendar year. No property taxes may be deferred 
124.29 	under this chapter in any year following the year in which a program participant filed 
124.30 	or should have filed an excess-income certification under this subdivision, unless the 
124.31 	participant has filed a resumption of eligibility certification as described in subdivision 4.

124.32 	EFFECTIVE DATE. This section is effective July 1, 2009, and thereafter.

124.33 	Sec. 24. Minnesota Statutes 2008, section 290B.04, subdivision 4, is amended to read:
125.1 		Subd. 4.Resumption of eligibility certification by taxpayer. A taxpayer who has 
125.2 	previously filed an excess-income certification under subdivision 3 may resume program 
125.3 	participation if the taxpayer's household income for a subsequent year is $60,000 $75,000
125.4 	or less. If the taxpayer chooses to resume program participation, the taxpayer must notify 
125.5 	the commissioner of revenue in writing by July 1 of the year following a calendar year in 
125.6 	which the taxpayer's household income is $60,000 $75,000 or less. The certification must 
125.7 	state the taxpayer's total household income for the previous calendar year. Once a taxpayer 
125.8 	resumes participation in the program under this subdivision, participation will continue 
125.9 	until the taxpayer files a subsequent excess-income certification under subdivision 3 or 
125.10 	until participation is terminated under section 290B.08, subdivision 1.

125.11 	EFFECTIVE DATE. This section is effective July 1, 2009, and thereafter.

125.12 	Sec. 25. Minnesota Statutes 2008, section 290B.05, subdivision 1, is amended to read:
125.13 		Subdivision 1.Determination by commissioner. The commissioner shall 
125.14 	determine each qualifying homeowner's "annual maximum property tax amount" 
125.15 	following approval of the homeowner's initial application and following the receipt of a 
125.16 	resumption of eligibility certification. The "annual maximum property tax amount" equals 
125.17 	three percent of the homeowner's total household income for the year preceding either the 
125.18 	initial application or the resumption of eligibility certification, whichever is applicable. 
125.19 	Following approval of the initial application, the commissioner shall determine the 
125.20 	qualifying homeowner's "maximum allowable deferral." No tax may be deferred relative 
125.21 	to the appropriate assessment year for any homeowner whose total household income 
125.22 	for the previous year exceeds $60,000 $75,000. No tax shall be deferred in any year in 
125.23 	which the homeowner does not meet the program qualifications in section 290B.03. The 
125.24 	maximum allowable total deferral is equal to 75 percent of the assessor's estimated market 
125.25 	value for the year, less the balance of any mortgage loans and other amounts secured by 
125.26 	liens against the property at the time of application, including any unpaid and delinquent 
125.27 	special assessments and interest and any delinquent property taxes, penalties, and interest, 
125.28 	but not including property taxes payable during the year.

125.29 	EFFECTIVE DATE. This section is effective July 1, 2009, and thereafter.

125.30 	Sec. 26. Minnesota Statutes 2008, section 428A.101, is amended to read:
125.31 	428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER 
125.32 	GENERAL LAW.
126.1 	The establishment of a new special service district after June 30, 2009 2013, requires 
126.2 	enactment of a special law authorizing the establishment.

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

126.4 	Sec. 27. Minnesota Statutes 2008, section 428A.21, is amended to read:
126.5 	428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER 
126.6 	GENERAL LAW.
126.7 	The establishment of a new housing improvement area after June 30, 2009 2012, 
126.8 	requires enactment of a special law authorizing the establishment of the area.

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

126.10 	Sec. 28. Minnesota Statutes 2008, section 429.011, subdivision 2a, is amended to read:
126.11 		Subd. 2a.Municipality; certain counties. "Municipality" also includes the 
126.12 	following: 
126.13 	(1) a county in the case of construction, reconstruction, or improvement of a county 
126.14 	state-aid highway or;
126.15 	(2) a county highway as defined in section 160.02 including curbs and gutters and 
126.16 	storm sewers; 
126.17 	(3) a county exercising its powers and duties under section 444.075, subdivision 
126.18 	1; and
126.19 	(4) a county for expenses not paid for under section 403.113, subdivision 3, 
126.20 	paragraph (b), clause (3);
126.21 	(5) a county in the case of the abatement of nuisances; and
126.22 	(6) a county in the case of the correction of environmental, wetland, or land use 
126.23 	violations. 

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

126.25 	Sec. 29. Minnesota Statutes 2008, section 429.021, subdivision 1, is amended to read:
126.26 		Subdivision 1.Improvements authorized. The council of a municipality shall have 
126.27 	power to make the following improvements:
126.28 	(1) To acquire, open, and widen any street, and to improve the same by constructing, 
126.29 	reconstructing, and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking 
126.30 	strips of any material, or by grading, graveling, oiling, or otherwise improving the same, 
127.1 	including the beautification thereof and including storm sewers or other street drainage 
127.2 	and connections from sewer, water, or similar mains to curb lines.
127.3 	(2) To acquire, develop, construct, reconstruct, extend, and maintain storm and 
127.4 	sanitary sewers and systems, including outlets, holding areas and ponds, treatment plants, 
127.5 	pumps, lift stations, service connections, and other appurtenances of a sewer system, 
127.6 	within and without the corporate limits.
127.7 	(3) To construct, reconstruct, extend, and maintain steam heating mains.
127.8 	(4) To install, replace, extend, and maintain street lights and street lighting systems 
127.9 	and special lighting systems.
127.10 	(5) To acquire, improve, construct, reconstruct, extend, and maintain water works 
127.11 	systems, including mains, valves, hydrants, service connections, wells, pumps, reservoirs, 
127.12 	tanks, treatment plants, and other appurtenances of a water works system, within and 
127.13 	without the corporate limits.
127.14 	(6) To acquire, improve and equip parks, open space areas, playgrounds, and 
127.15 	recreational facilities within or without the corporate limits.
127.16 	(7) To plant trees on streets and provide for their trimming, care, and removal.
127.17 	(8) To abate nuisances and to drain swamps, marshes, and ponds on public or private 
127.18 	property and to fill the same.
127.19 	(9) To construct, reconstruct, extend, and maintain dikes and other flood control 
127.20 	works.
127.21 	(10) To construct, reconstruct, extend, and maintain retaining walls and area walls.
127.22 	(11) To acquire, construct, reconstruct, improve, alter, extend, operate, maintain, and 
127.23 	promote a pedestrian skyway system. Such improvement may be made upon a petition 
127.24 	pursuant to section 429.031, subdivision 3.
127.25 	(12) To acquire, construct, reconstruct, extend, operate, maintain, and promote 
127.26 	underground pedestrian concourses.
127.27 	(13) To acquire, construct, improve, alter, extend, operate, maintain, and promote 
127.28 	public malls, plazas or courtyards.
127.29 	(14) To construct, reconstruct, extend, and maintain district heating systems.
127.30 	(15) To construct, reconstruct, alter, extend, operate, maintain, and promote fire 
127.31 	protection systems in existing buildings, but only upon a petition pursuant to section 
127.32 	429.031, subdivision 3.
127.33 	(16) To acquire, construct, reconstruct, improve, alter, extend, and maintain highway 
127.34 	sound barriers.
127.35 	(17) To improve, construct, reconstruct, extend, and maintain gas and electric 
127.36 	distribution facilities owned by a municipal gas or electric utility.
128.1 	(18) To purchase, install, and maintain signs, posts, and other markers for addressing 
128.2 	related to the operation of enhanced 911 telephone service.
128.3 	(19) To improve, construct, extend, and maintain facilities for Internet access and 
128.4 	other communications purposes, if the council finds that:
128.5 	(i) the facilities are necessary to make available Internet access or other 
128.6 	communications services that are not and will not be available through other providers or 
128.7 	the private market in the reasonably foreseeable future; and
128.8 	(ii) the service to be provided by the facilities will not compete with service provided 
128.9 	by private entities.
128.10 	(20) To assess affected property owners for all or a portion of the costs agreed to 
128.11 	with an electric utility, telecommunications carrier, or cable system operator to bury or 
128.12 	alter a new or existing distribution system within the public right-of-way that exceeds the 
128.13 	utility's design and construction standards, or those set by law, tariff, or franchise, but only 
128.14 	upon petition under section 429.031, subdivision 3.
128.15 	(21) To correct environmental, wetland, or land use violations.

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

128.17 	Sec. 30. [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
128.18 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms 
128.19 	have the meanings given them.
128.20 	(b) "Class of property" mean classes 1 through 5 under section 273.13, but without 
128.21 	regard to subclasses, and tax exempt property may be treated as an additional class, if the 
128.22 	city elects to subject tax exempt property to the fee.
128.23 	(c) "Governing body" means the city council of a municipality.
128.24 	(d) "Improvements" means construction, reconstruction, and facility upgrades 
128.25 	involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and 
128.26 	their repair; milling; overlaying; drainage and storm sewers; excavation; base work; 
128.27 	subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement 
128.28 	markings; boulevard and easement restoration; impact mitigation; connection and 
128.29 	reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls; 
128.30 	fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit 
128.31 	infrastructure" does not include commuter rail rolling stock, light rail vehicles, or 
128.32 	transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning, 
128.33 	alternative analyses, environmental studies, engineering, or construction of transit ways; 
128.34 	or operating assistance for transit ways.
129.1 	(e) "Maintenance" means striping, seal coating, crack sealing, pavement repair, 
129.2 	sidewalk maintenance, signal maintenance, street light maintenance, and signage.
129.3 	(f) "Municipal street" means a street, alley, or public way in which the municipality 
129.4 	is the road authority with powers conferred by section 429.021.
129.5 	(g) "Municipality" means a home rule charter or statutory city.
129.6 	(g) "Street improvement district" means a geographic area designated by a 
129.7 	municipality within which street improvements and maintenance may be undertaken and 
129.8 	financed according to this section.
129.9 		Subd. 2.Authorization. A municipality may establish by ordinance municipal 
129.10 	street improvement districts and may defray all or part of the total costs of municipal street 
129.11 	improvements and maintenance by apportioning street improvement fees to all of the 
129.12 	parcels located in the district. In establishing the boundaries of the district, the city may 
129.13 	not exclude from the district or imposition of the fee any class or parcel of property that is 
129.14 	served by the municipal street on an equal basis with other classes or parcels of property 
129.15 	included in the district, except this limitation does not apply to tax exempt property.
129.16 		Subd. 3.Uniformity. (a) The total costs of municipal street improvements and 
129.17 	maintenance must be apportioned to all parcels or tracts of land located in the established 
129.18 	street improvement district on a uniform basis within each class of property. 
129.19 	(b) The method of apportioning costs must not apportion costs to any class of 
129.20 	property at a ratio of more than 2 to 1, relative to the rate for the property in any other 
129.21 	class. The limit under this paragraph does not apply to any fees that the municipality 
129.22 	elects to impose on tax exempt property.
129.23 		Subd. 4.Adoption of plan. (a) Before establishing a municipal street improvement 
129.24 	district or authorizing a street improvement fee, a municipality must propose and adopt 
129.25 	a street improvement plan that:
129.26 	(1) identifies and estimates the costs of proposed improvements and maintenance 
129.27 	for the life of the district;
129.28 	(2) identifies the location of the municipal street improvement district, which must 
129.29 	be limited to parcels that are served by the improvements to be constructed or maintained 
129.30 	by the street improvement district; and
129.31 	(3) specifies the manner in which costs will be apportioned among the parcels in 
129.32 	the district under subdivision 3.
129.33 	(b) Notice of a public hearing on the proposed plan must be given by mail to all 
129.34 	affected landowners at least ten days before the hearing and posted for at least ten days 
129.35 	before the hearing. The notice must include a description of the manner in which the fees 
129.36 	would be imposed and illustrative examples of the amount of fees for average parcels for 
130.1 	each class of property in the district. At the public hearing, the governing body must 
130.2 	present the plan and all affected landowners in attendance must have the opportunity to 
130.3 	comment before the governing body considers adoption of the plan.
130.4 		Subd. 5.Use of fees. Revenues collected from property in a district from the 
130.5 	fee authorized in this section must be placed in a separate account and be used only 
130.6 	for projects located within that same district and identified in the municipal street 
130.7 	improvement district plan.
130.8 		Subd. 6.Collection; up to ten years. (a) The ordinance adopted under this section 
130.9 	must provide for the billing and payment of the fee on a monthly, quarterly, or other basis 
130.10 	as directed by the governing body. The governing body may collect municipal street 
130.11 	improvement fees within a street improvement district for up to a maximum of ten years, 
130.12 	which is the maximum duration of the district.
130.13 	(b) Fees that, as of October 15 of each calendar year, have remained unpaid for at 
130.14 	least 30 days may be certified to the county auditor for collection as property taxes payable 
130.15 	in the following calendar year on the affected property.
130.16 		Subd. 7.Notice; hearings. (a) A municipality may impose a municipal street 
130.17 	improvement fee provided in this section by ordinance. The ordinance must not be voted 
130.18 	on or adopted until after a public hearing has been held on the question. The effective date 
130.19 	of an ordinance must be at least 45 days after it is adopted.
130.20 	(b) Within five days after adoption of the ordinance, a summary of the ordinance 
130.21 	must be mailed to the owner of each parcel included in the street improvement district. 
130.22 	The mailing must include: 
130.23 	(1) a notice that owners subject to a fee under the ordinance have a right to petition 
130.24 	for a referendum vote on the ordinance by filing the required number of objections with 
130.25 	the city clerk before the effective date of the ordinance and that a copy of the ordinance is 
130.26 	on file with the city clerk for public inspection; and
130.27 	(2) the estimated amount of the fee that would be imposed on the owner's parcel in 
130.28 	the first year the fee is imposed, and an estimate of the maximum annual amount of the fee 
130.29 	that may be imposed on the owner's parcel during the duration of the project.
130.30 		Subd. 8.Reverse referendum. (a) If owners of 35 percent or more of the net tax 
130.31 	capacity in the district subject to the fees under the ordinance file an objection to the 
130.32 	ordinance with the city clerk before the effective date of the ordinance, the ordinance does 
130.33 	not become effective unless it is approved as provided in paragraph (b). 
130.34 	(b) If an ordinance does not become effective as a result of the filing of objections 
130.35 	under paragraph (a), the city may submit the ordinance to the property owners in the 
130.36 	street improvement district that would be subject to the fee imposed by the ordinance for 
131.1 	approval. The election must be conducted by mail. Notice of the election and the mail 
131.2 	procedure must be given at least six weeks prior to the election. No earlier than 20 days or 
131.3 	later than 14 days before the date set for the election, the city clerk shall mail ballots by 
131.4 	nonforwardable mail to the owners, as recorded on the property tax records, of each parcel 
131.5 	of property subject to the fee under the ordinance. Each parcel of property is entitled to 
131.6 	one vote. Ballots may be returned to the city clerk by mail or in person by the date set for 
131.7 	the election. If a majority of the owners voting in the election approve the ordinance, it 
131.8 	becomes effective 30 days after the date of the election.
131.9 		Subd. 9.Not exclusive means of financing improvements. The use of the 
131.10 	municipal street improvement fee by a municipality does not restrict the municipality from 
131.11 	imposing other measures to pay the costs of local street improvements or maintenance, 
131.12 	except that a municipality must not impose special assessments for projects funded with 
131.13 	street improvement fees.

131.14 	EFFECTIVE DATE. This section is effective July 1, 2009.

131.15 	Sec. 31. Minnesota Statutes 2008, section 473H.04, is amended by adding a 
131.16 	subdivision to read:
131.17 		Subd. 2a.Termination of eligibility. (a) A parcel of property enrolled under this 
131.18 	section whose owner is subject to a final enforcement action for a violation of chapter 18B, 
131.19 	18C, 103E, 103F, 103G, or 103H, or any rule adopted under these chapters including but 
131.20 	not limited to the agricultural shoreland use standards in Minnesota Rules, chapter 6120, 
131.21 	occurring on the parcel, shall be removed from the program.
131.22 	(b) For the purposes of this subdivision, "final enforcement action" means any 
131.23 	administrative, civil, or criminal penalty other than an initial verbal or written warning. 
131.24 	An enforcement action is not final until any time period for corrective action has expired, 
131.25 	and until the completion or expiration of any applicable review or appeal procedure or 
131.26 	period provided by law.
131.27 	(c) When a final enforcement action is taken based on a violation occurring on a 
131.28 	parcel enrolled under this chapter, the law enforcement officer or other person enforcing 
131.29 	the law or rule must notify the county assessor. The county assessor must then notify 
131.30 	the property owner that the parcel is being removed from the program. Any parcel for 
131.31 	which the assessor has been notified prior to March 1 of any year shall be removed from 
131.32 	the program for taxes payable in the following year. The assessor shall calculate (i) the 
131.33 	amount of any credit received under section 473H.05 for the current year, and (ii) the 
131.34 	difference between the actual tax on the parcel for the current year and the tax that would 
131.35 	apply if the value was not restricted under this section, and multiply the result by the 
132.1 	number of years that the parcel has been under its current ownership or five, whichever is 
132.2 	less. The resulting amount plus any special assessments that have been deferred under this 
132.3 	section shall be extended against the parcel on the tax list for the current year, provided 
132.4 	that no interest or penalties shall be levied on the additional taxes if timely paid.
132.5 	(d) Termination of eligibility under this subdivision shall not affect the covenant 
132.6 	required under section 473H.05. A parcel of property terminated under this subdivision 
132.7 	may not be reenrolled for a period of three years, unless it has been sold or transferred 
132.8 	so that it is no longer under the same ownership, in full or in part, as when the parcel 
132.9 	was terminated.

132.10 	EFFECTIVE DATE. This section is effective for taxes payable in 2011 and 
132.11 	thereafter.

132.12 	Sec. 32. Minnesota Statutes 2008, section 473H.05, subdivision 1, is amended to read:
132.13 		Subdivision 1.Before March June 1 for next year's taxes. An owner or owners 
132.14 	of certified long-term agricultural land may apply to the authority with jurisdiction over 
132.15 	the land on forms provided by the commissioner of agriculture for the creation of an 
132.16 	agricultural preserve at any time. Land for which application is received prior to March
132.17 	June 1 of any year shall be assessed pursuant to section 473H.10 for taxes payable in the 
132.18 	following year. Land for which application is received on or after March June 1 of any 
132.19 	year shall be assessed pursuant to section 473H.10 in the following year. The application 
132.20 	shall be executed and acknowledged in the manner required by law to execute and 
132.21 	acknowledge a deed and shall contain at least the following information and such other 
132.22 	information as the commissioner deems necessary: 
132.23 	(a) Legal description of the area proposed to be designated and parcel identification 
132.24 	numbers if so designated by the county auditor and the certificate of title number if the 
132.25 	land is registered;
132.26 	(b) Name and address of owner;
132.27 	(c) An affidavit by the authority evidencing that the land is certified long-term 
132.28 	agricultural land at the date of application;
132.29 	(d) A statement by the owner covenanting that the land shall be kept in agricultural 
132.30 	use, and shall be used in accordance with the provisions of sections 473H.02 to 473H.17
132.31 	which exist on the date of application and providing that the restrictive covenant shall be 
132.32 	binding on the owner or the owner's successor or assignee, and shall run with the land. 

132.33 	EFFECTIVE DATE. This section is effective the day following final enactment, 
132.34 	except that in 2009 the application date in this section shall be extended to August 1.

133.1 	Sec. 33. Laws 2001, First Special Session chapter 5, article 3, section 8, the effective 
133.2 	date, as amended by Laws 2005, chapter 151, article 3, section 19, and Laws 2006, chapter 
133.3 	259, article 4, section 20, is amended to read:
133.4 	EFFECTIVE DATE. This section is effective for taxes levied in 2002, payable in 
133.5 	2003, through taxes levied in 2011 2014, payable in 2012 2015. This limitation applies 
133.6 	only to the establishment of a new emergency special service district.

133.7 	Sec. 34. Laws 2008, chapter 366, article 6, section 9, the effective date, is amended to 
133.8 	read:

133.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
133.10 	thereafter, on land platted after May 18, 2008.

133.11 	Sec. 35. Laws 2008, chapter 366, article 6, section 10, the effective date, is amended to 
133.12 	read:

133.13 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
133.14 	thereafter, on land platted after May 18, 2008.

133.15 	Sec. 36. PURPOSE; COMMISSIONER OF REVENUE GUIDANCE.
 133.16 	The purpose of section 2 is not to contract or expand the definition of "institutions 
133.17 	of purely public charity" but to provide clear standards that can be applied uniformly to 
133.18 	determine eligibility for exemption from property taxation. To carry out this purpose and 
133.19 	to promote uniformity in application of the provisions of section 2, the commissioner of 
133.20 	revenue shall prepare a bulletin providing guidance to assessors as to the commissioner's 
133.21 	interpretation of section 2. The bulletin may include a discussion of court decisions that 
133.22 	provide background to and context for the provisions in section 2, as the commissioner 
133.23 	deems appropriate. This guidance must include examples of facts or circumstances that 
133.24 	satisfy the requirement of "a reasonable justification for failing to meet the factors in clause 
133.25 	(2), (3), or (5)" under section 2, paragraph (a). Assessors shall give due consideration to 
133.26 	the bulletin in assessing property requesting an exemption as an institution of purely public 
133.27 	charity. The commissioner shall distribute the bulletin to all assessors by July 1, 2010. 

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

133.29 	Sec. 37. REPORT BY ADMINISTRATIVE AUDITOR.
 133.30 	The administrative auditor selected pursuant to Minnesota Statutes, section 473F.03, 
133.31 	with the cooperation of the county auditors in the area defined by Minnesota Statutes, 
134.1 	section 473F.02, subdivision 2, shall study the feasibility of basing fiscal disparities 
134.2 	calculations on current year tax rates rather than previous year tax rates, and report 
134.3 	the results of the study to the chairs and ranking minority members of the house of 
134.4 	representatives and senate tax committees by February 1, 2011. The report should include 
134.5 	any recommendations for amendments to Minnesota Statutes, chapter 473F, that would be 
134.6 	necessary to implement the change.

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

134.8 	Sec. 38. MINNEAPOLIS CONVENTION CENTER; LEASE; PROPERTY TAX 
134.9 	EXEMPTION.
 134.10 	Notwithstanding Minnesota Statutes, section 272.01, subdivision 2, or 273.19, real 
134.11 	or personal property subject to a lease or use agreement between the city of Minneapolis 
134.12 	and a private entity for purposes of providing food and beverage services within the 
134.13 	Minneapolis Convention Center is exempt from property taxation.

134.14 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
134.15 	thereafter, for taxes payable in 2010 and thereafter.

134.16 	Sec. 39.  REPEALER.
 134.17 	Minnesota Statutes 2008, section 273.113, is repealed.

134.18 	EFFECTIVE DATE. This section is effective for property taxes payable in 2010 
134.19 	and thereafter.

134.20 	ARTICLE 7
134.21 	AIDS AND CREDITS

134.22 	Section 1. Minnesota Statutes 2008, section 273.1384, subdivision 1, is amended to 
134.23 	read:
134.24 		Subdivision 1.Residential homestead market value credit. Each county auditor 
134.25 	shall determine a homestead credit for each class 1a, 1b, and 2a homestead property 
134.26 	within the county equal to 0.4 percent of the first $76,000 $75,000 of market value of 
134.27 	the property minus .09 0.1 percent of the market value in excess of $76,000 $75,000. 
134.28 	The credit amount may not be less than zero. In the case of an agricultural or resort 
134.29 	homestead, only the market value of the house, garage, and immediately surrounding one 
134.30 	acre of land is eligible in determining the property's homestead credit. In the case of a 
134.31 	property that is classified as part homestead and part nonhomestead, (i) the credit shall 
135.1 	apply only to the homestead portion of the property, but (ii) if a portion of a property is 
135.2 	classified as nonhomestead solely because not all the owners occupy the property, not all 
135.3 	the owners have qualifying relatives occupying the property, or solely because not all the 
135.4 	spouses of owners occupy the property, the credit amount shall be initially computed as 
135.5 	if that nonhomestead portion were also in the homestead class and then prorated to the 
135.6 	owner-occupant's percentage of ownership. For the purpose of this section, when an 
135.7 	owner-occupant's spouse does not occupy the property, the percentage of ownership for 
135.8 	the owner-occupant spouse is one-half of the couple's ownership percentage.

135.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
135.10 	thereafter.

135.11 	Sec. 2. Minnesota Statutes 2008, section 273.1384, subdivision 4, is amended to read:
135.12 		Subd. 4.Payment. (a) The commissioner of revenue shall reimburse each local 
135.13 	taxing jurisdiction, other than school districts, for the tax reductions granted under this 
135.14 	section in two equal installments on October 31 and December 26 of the taxes payable 
135.15 	year for which the reductions are granted, including in each payment the prior year 
135.16 	adjustments certified on the abstracts for that taxes payable year. The reimbursements 
135.17 	related to tax increments shall be issued in one installment each year on December 26.
135.18 	(b) The commissioner of revenue shall certify the total of the tax reductions 
135.19 	granted under this section for each taxes payable year within each school district to the 
135.20 	commissioner of the Department of Education and the commissioner of education shall 
135.21 	pay the reimbursement amounts to each school district as provided in section 273.1392. 
135.22 	(c) The market value credit reimbursements payable in 2011 and 2012 for each city 
135.23 	under this section are reduced by the dollar amount of the 2010 reduction in market value 
135.24 	credit reimbursements under section 477A.013, subdivision 11. The payable market value 
135.25 	credit reimbursement for a city is not reduced less than zero under this paragraph.

135.26 	EFFECTIVE DATE. This section is effective for credits payable in calendar year 
135.27 	2011 and thereafter.

135.28 	Sec. 3. Minnesota Statutes 2008, section 290A.04, subdivision 2, is amended to read:
135.29 		Subd. 2.Homeowners. A claimant whose property taxes payable are in excess 
135.30 	of the percentage of the household income stated below shall pay an amount equal to 
135.31 	the percent of income shown for the appropriate household income level along with the 
135.32 	percent to be paid by the claimant of the remaining amount of property taxes payable. 
136.1 	The state refund equals the amount of property taxes payable that remain, up to the state 
136.2 	refund amount shown below.

136.3
136.4	Household Income
	Percent of Income
	Percent Paid by 
Claimant
	Maximum State
Refund

136.5
136.6	$0 to 1,189
		1.0 percent
	15 percent
	$
	1,850
2,040
		
136.7
136.8	1,190 to 2,379
		1.1 percent
	15 percent
	$
	1,850
2,040
		
136.9136.10
	2,380 to 3,589
		1.2 percent
	15 percent
	$
	1,800
1,980
		
136.11
136.12	3,590 to 4,789
		1.3 percent
	20 percent
	$
	1,800
1,980
		
136.13
136.14	4,790 to 5,979
		1.4 percent
	20 percent
	$
	1,730
1,900
		
136.15
136.16	5,980 to 8,369
		1.5 percent
	20 percent
	$
	1,730
1,900
		
136.17
136.18	8,370 to 9,559
		1.6 percent
	25 percent
	$
	1,670
1,840
		
136.19
136.20	9,560 to 10,759
		1.7 percent
	25 percent
	$
	1,670
1,840
		
136.21
136.22	10,760 to 11,949
		1.8 percent
	25 percent
	$
	1,610
1,770
		
136.23
136.24	11,950 to 13,139
		1.9 percent
	30 percent
	$
	1,610
1,770
		
136.25
136.26	13,140 to 14,349
		2.0 percent
	30 percent
	$
	1,540
1,690
		
136.27
136.28	14,350 to 16,739
		2.12.0 percent
	30 percent
	$
	1,540
1,690
		
136.29	16,740 to 17,929
		2.2 percent
	35 percent
	$
	1,480
		
136.30
136.31	17,930 to 19,119
16,740 to 19,119
		2.32.0 percent
	35 percent
	$
	1,480
1,630
		
136.32
136.33	19,120 to 20,319
		2.42.1 percent
	35 percent
	$
	1,420
1,560
		
136.34
136.35	20,320 to 25,099
		2.52.2 percent
	40 percent
	$
	1,420
1,560
		
136.36
136.37	25,100 to 28,679
		2.62.3 percent
	40 percent
	$
	1,360
1,500
		
136.38
136.39	28,680 to 35,849
		2.72.5 percent
	40 percent
	$
	1,360
1,500
		
136.40
136.41	35,850 to 41,819
		2.82.6 percent
	45 percent
	$
	1,240
1,360
		
136.42
136.43	41,820 to 47,799
		3.02.8 percent
	45 percent
	$
	1,240
1,360
		
136.44
136.45	47,800 to 53,779
		3.23.0 percent
	45 percent
	$
	1,110
1,220
		
136.46	53,780 to 59,749
		3.5 percent
	50 percent
	$
	9901,090
		
136.47	59,750 to 65,729
		3.5 percent
	50 percent
	$
	870960
		
136.48	65,730 to 69,319
		3.5 percent
	50 percent
	$
	740810
		
137.1	69,320 to 71,719
		3.5 percent
	50 percent
	$
	610670
		
137.2	71,720 to 74,619
		3.5 percent
	50 percent
	$
	500550
		
137.3	74,620 to 77,519
		3.5 percent
	50 percent
	$
	370410
		
137.4 	The payment made to a claimant shall be the amount of the state refund calculated 
137.5 	under this subdivision. No payment is allowed if the claimant's household income is 
137.6 	$77,520 or more.

137.7 	EFFECTIVE DATE. This section is effective beginning with refunds based on 
137.8 	property taxes payable in 2010.

137.9 	Sec. 4. Minnesota Statutes 2008, section 477A.011, subdivision 36, is amended to read:
137.10 		Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision, 
137.11 	"city aid base" is zero. 
137.12 	(b) The city aid base for any city with a population less than 500 is increased by 
137.13 	$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount 
137.14 	of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
137.15 	increased by $40,000 for aids payable in calendar year 1995 only, provided that: 
137.16 	(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent; 
137.17 	(ii) the city portion of the tax capacity rate exceeds 100 percent; and 
137.18 	(iii) its city aid base is less than $60 per capita. 
137.19 	(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and 
137.20 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
137.21 	paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that: 
137.22 	(i) the city has a population in 1994 of 2,500 or more; 
137.23 	(ii) the city is located in a county, outside of the metropolitan area, which contains a 
137.24 	city of the first class; 
137.25 	(iii) the city's net tax capacity used in calculating its 1996 aid under section 
137.26 	477A.013 is less than $400 per capita; and 
137.27 	(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of 
137.28 	property located in the city is classified as railroad property. 
137.29 	(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and 
137.30 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
137.31 	paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that: 
137.32 	(i) the city was incorporated as a statutory city after December 1, 1993; 
137.33 	(ii) its city aid base does not exceed $5,600; and 
137.34 	(iii) the city had a population in 1996 of 5,000 or more. 
138.1 	(e) The city aid base for a city is increased by $150,000 for aids payable in 2000 and 
138.2 	thereafter, and the maximum amount of total aid it may receive under section 477A.013, 
138.3 	subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only, 
138.4 	provided that: 
138.5 	(1) the city has a population that is greater than 1,000 and less than 2,500; 
138.6 	(2) its commercial and industrial percentage for aids payable in 1999 is greater 
138.7 	than 45 percent; and 
138.8 	(3) the total market value of all commercial and industrial property in the city 
138.9 	for assessment year 1999 is at least 15 percent less than the total market value of all 
138.10 	commercial and industrial property in the city for assessment year 1998. 
138.11 	(f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and 
138.12 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
138.13 	paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that: 
138.14 	(1) the city had a population in 1997 of 2,500 or more; 
138.15 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
138.16 	477A.013 is less than $650 per capita; 
138.17 	(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under 
138.18 	section 477A.013 is greater than 12 percent; 
138.19 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
138.20 	20 percent of the amount that the formula aid of the city would have been if the need 
138.21 	increase percentage was 100 percent; and 
138.22 	(5) the city aid base of the city used in calculating aid under section 477A.013 
138.23 	is less than $7 per capita. 
138.24 	(g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and 
138.25 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
138.26 	paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that: 
138.27 	(1) the city has a population in 1997 of 2,000 or more; 
138.28 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
138.29 	477A.013 is less than $455 per capita; 
138.30 	(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is 
138.31 	greater than $195 per capita; and 
138.32 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
138.33 	38 percent of the amount that the formula aid of the city would have been if the need 
138.34 	increase percentage was 100 percent. 
139.1 	(h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and 
139.2 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
139.3 	paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that: 
139.4 	(1) the city has a population in 1998 that is greater than 200 but less than 500; 
139.5 	(2) the city's revenue need used in calculating aids payable in 2000 was greater 
139.6 	than $200 per capita; 
139.7 	(3) the city net tax capacity for the city used in calculating aids available in 2000 
139.8 	was equal to or less than $200 per capita; 
139.9 	(4) the city aid base of the city used in calculating aid under section 477A.013 
139.10 	is less than $65 per capita; and 
139.11 	(5) the city's formula aid for aids payable in 2000 was greater than zero. 
139.12 	(i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and 
139.13 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
139.14 	paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that: 
139.15 	(1) the city had a population in 1998 that is greater than 200 but less than 500; 
139.16 	(2) the city's commercial industrial percentage used in calculating aids payable in 
139.17 	2000 was less than ten percent; 
139.18 	(3) more than 25 percent of the city's population was 60 years old or older according 
139.19 	to the 1990 census; 
139.20 	(4) the city aid base of the city used in calculating aid under section 477A.013 
139.21 	is less than $15 per capita; and 
139.22 	(5) the city's formula aid for aids payable in 2000 was greater than zero. 
139.23 	(j) The city aid base for a city is increased by $45,000 in 2001 and thereafter and 
139.24 	by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of 
139.25 	total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
139.26 	increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002 
139.27 	only, provided that: 
139.28 	(1) the net tax capacity of the city used in calculating its 2000 aid under section 
139.29 	477A.013 is less than $810 per capita; 
139.30 	(2) the population of the city declined more than two percent between 1988 and 1998; 
139.31 	(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is 
139.32 	greater than $240 per capita; and 
139.33 	(4) the city received less than $36 per capita in aid under section 477A.013, 
139.34 	subdivision 9, for aids payable in 2000. 
139.35 	(k) The city aid base for a city with a population of 10,000 or more which is located 
139.36 	outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the 
140.1 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
140.2 	paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to 
140.3 	the lesser of: 
140.4 	(1)(i) the total population of the city, as determined by the United States Bureau of 
140.5 	the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or 
140.6 	(2) $2,500,000. 
140.7 	(l) The city aid base is increased by $50,000 in 2002 and thereafter, and the 
140.8 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
140.9 	paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that: 
140.10 	(1) the city is located in the seven-county metropolitan area; 
140.11 	(2) its population in 2000 is between 10,000 and 20,000; and 
140.12 	(3) its commercial industrial percentage, as calculated for city aid payable in 2001, 
140.13 	was greater than 25 percent. 
140.14 	(m) The city aid base for a city is increased by $150,000 in calendar years 2002 to 
140.15 	2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum 
140.16 	amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is 
140.17 	also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year 
140.18 	2009 only, provided that: 
140.19 	(1) the city had a population of at least 3,000 but no more than 4,000 in 1999; 
140.20 	(2) its home county is located within the seven-county metropolitan area; 
140.21 	(3) its pre-1940 housing percentage is less than 15 percent; and 
140.22 	(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 
140.23 	per capita. 
140.24 	(n) The city aid base for a city is increased by $200,000 beginning in calendar 
140.25 	year 2003 and the maximum amount of total aid it may receive under section 477A.013, 
140.26 	subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only, 
140.27 	provided that the city qualified for an increase in homestead and agricultural credit aid 
140.28 	under Laws 1995, chapter 264, article 8, section 18. 
140.29 	(o) The city aid base for a city is increased by $200,000 in 2004 only and the 
140.30 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 
140.31 	also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear 
140.32 	dry cask storage facility. 
140.33 	(p) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the 
140.34 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
140.35 	by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster 
141.1 	designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by 
141.2 	more than 40 percent between 1990 and 2000. 
141.3 	(q) The city aid base for a city is increased by $30,000 in 2009 and thereafter and the 
141.4 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
141.5 	by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000 
141.6 	and has a state park for which the city provides rescue services and which comprised at 
141.7 	least 14 percent of the total geographic area included within the city boundaries in 2000. 
141.8 	(r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and 
141.9 	the minimum and maximum amount of total aid it may receive under section 477A.013, 
141.10 	subdivision 9, is also increased by $80,000 in calendar year 2009 only, if: 
141.11 	(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed 
141.12 	to be placed in trust status as tax-exempt Indian land; 
141.13 	(2) the placement of the land is being challenged administratively or in court; and 
141.14 	(3) due to the challenge, the land proposed to be placed in trust is still on the tax 
141.15 	rolls as of May 1, 2006. 
141.16 	(s) The city aid base for a city is increased by $100,000 in 2007 and thereafter and 
141.17 	the minimum and maximum total amount of aid it may receive under this section is also 
141.18 	increased in calendar year 2007 only, provided that: 
141.19 	(1) the city has a 2004 estimated population greater than 200 but less than 2,000; 
141.20 	(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita; 
141.21 	(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids 
141.22 	payable in 2006 was greater than 110 percent; and 
141.23 	(4) it is located in a county where at least 15,000 acres of land are classified as 
141.24 	tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property. 
141.25 	(t) The city aid base for a city is increased by $30,000 in 2009 only, and the 
141.26 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
141.27 	by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than 
141.28 	3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities 
141.29 	and one township in 2002. 
141.30 	(u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and 
141.31 	the maximum total aid it may receive under section 477A.013, subdivision 9, is also 
141.32 	increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for 
141.33 	aids payable in 2007 of less than $150 per capita and the city experienced flooding on 
141.34 	March 14, 2007, that resulted in evacuation of at least 40 homes.
142.1 	(v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the 
142.2 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
142.3 	by $100,000 in calendar year 2009 only, if the city:
142.4 	(1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical 
142.5 	area;
142.6 	(2) has a 2005 population greater than 7,000 but less than 8,000; and
142.7 	(3) has a 2005 net tax capacity per capita of less than $500.
142.8 	(w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the 
142.9 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 
142.10 	increased by $25,000 in calendar year 2009 only, provided that:
142.11 	(1) the city is located in the seven-county metropolitan area;
142.12 	(2) its population in 2006 is less than 200; and 
142.13 	(3) the percentage of its housing stock built before 1940, according to the 2000 
142.14 	United States Census, is greater than 40 percent.
142.15 	(x) The city aid base is increased by $90,000 in calendar year 2009 only and the 
142.16 	minimum and maximum total amount of aid it may receive under section 477A.013, 
142.17 	subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the 
142.18 	city is located in the seven-county metropolitan area, has a 2006 population between 5,000 
142.19 	and 7,000 and has a 1997 population of over 7,000.
142.20 	(y) The city aid base is increased by $100,000 in calendar years 2011 to 2015 and 
142.21 	the maximum amount of total aid a city may receive under section 477A.013, subdivision 
142.22 	9, is increased by $100,000 in 2011 only, provided that:
142.23 	(1) the city is located in the metropolitan area;
142.24 	(2) its 2006 population is less than 2,000; and
142.25 	(3) its population has grown by at least 200 percent between 1996 and 2006.
142.26 	(z) In calendar year 2010 only, the city aid base for a city is increased by $225,000 if 
142.27 	it was eligible for a $450,000 payment in calendar year 2008 under Minnesota Statutes 
142.28 	2006, section 477A.011, subdivision 36, paragraph (e), and the second half of the payment 
142.29 	under that paragraph in December 2008 was canceled due to the governor's unallotment. 
142.30 	The payment under this paragraph is not subject to any aid reductions under section 
142.31 	477A.0133 or any future unallotment of the city aid under section 16A.152.

142.32 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
142.33 	2011 and thereafter.

142.34 	Sec. 5. Minnesota Statutes 2008, section 477A.013, subdivision 9, is amended to read:
143.1 		Subd. 9.City aid distribution. (a) In calendar year 2009 and thereafter, each 
143.2 	city shall receive an aid distribution equal to the sum of (1) the city formula aid under 
143.3 	subdivision 8, and (2) its city aid base. In calendar year 2010, each city receives an aid 
143.4 	distribution under this section, before the reductions under subdivision 11, equal to the 
143.5 	amount of aid under this section that it was certified to receive in 2009. In calendar year 
143.6 	2011 and thereafter, each city receives an aid distribution under this section equal to the 
143.7 	sum of (1) the city formula aid under subdivision 8, and (2) its city aid base.
143.8 	(b) For aids payable in 2009 only, the total aid for any city shall not exceed the sum 
143.9 	of (1) 35 percent of the city's net levy for the year prior to the aid distribution, plus (2) 
143.10 	its total aid in the previous year.
143.11 	(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed 
143.12 	the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution 
143.13 	plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total 
143.14 	aid for any city with a population of 2,500 or more may not be less than its total aid under 
143.15 	this section in the previous year minus the lesser of $10 multiplied by its population, or ten 
143.16 	percent of its net levy in the year prior to the aid distribution.
143.17 	(d) For aids payable in 2010 and thereafter, the total aid for a city with a population 
143.18 	less than 2,500 must not be less than the amount it was certified to receive in the 
143.19 	previous year minus the lesser of $10 multiplied by its population, or five percent of its 
143.20 	2003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a 
143.21 	population less than 2,500 must not be less than what it received under this section in the 
143.22 	previous year unless its total aid in calendar year 2008 was aid under section 477A.011, 
143.23 	subdivision 36, paragraph (s), in which case its minimum aid is zero.
143.24 	(e) A city's aid loss under this section may not exceed $300,000 in any year in 
143.25 	which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or 
143.26 	greater than the appropriation under that subdivision in the previous year, unless the 
143.27 	city has an adjustment in its city net tax capacity under the process described in section 
143.28 	469.174, subdivision 28.
143.29 	(f) If a city's net tax capacity used in calculating aid under this section has decreased 
143.30 	in any year by more than 25 percent from its net tax capacity in the previous year due to 
143.31 	property becoming tax-exempt Indian land, the city's maximum allowed aid increase 
143.32 	under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the 
143.33 	year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 
143.34 	resulting from the property becoming tax exempt.

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

144.1 	Sec. 6. Minnesota Statutes 2008, section 477A.013, is amended by adding a 
144.2 	subdivision to read:
144.3 		Subd. 11.2010 city aid. For aid payable in 2010 only, each city's distribution 
144.4 	amount under subdivision 9 is reduced by an amount equal to 1.8889 percent of the city's 
144.5 	net tax capacity, as defined in section 477A.011, subdivision 20, that would otherwise be 
144.6 	used in calculating aids payable in 2010.
144.7 	The reduction is limited to the sum of the city's payable 2010 distribution under this 
144.8 	section, except for city aid base under section 477A.011, subdivision 36, paragraph (z), 
144.9 	and the city's payable 2010 reimbursement under section 273.1384 before the reductions 
144.10 	in this subdivision.
144.11 	The reduction is applied first to the city's distribution under this section, and then, if 
144.12 	necessary, to the city's reimbursements under section 273.1384.

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

144.14 	Sec. 7. [477A.0133] 2009 CITY AND COUNTY AID REDUCTIONS.
144.15 		Subdivision 1.City aid. The commissioner of revenue shall compute an aid 
144.16 	reduction amount for each city for aid payable in 2009 equal to 1.2111 percent of the city's 
144.17 	net tax capacity, as defined in section 477A.011, subdivision 20, that would be used in 
144.18 	calculating for aids payable in 2010.
144.19 	The reduction is limited to the sum of the city's payable 2009 distributions, prior to 
144.20 	the reductions under this subdivision, under sections 273.1384 and 477A.013.
144.21 	The reduction is applied first to the city's distribution under section 477A.013, and 
144.22 	then, if necessary, to the city's reimbursements under section 273.1384.
144.23 	To the extent that sufficient information is available on each successive payment date 
144.24 	within the year, the commissioner of revenue shall pay any remaining 2009 distribution or 
144.25 	reimbursement amount that is reduced under this subdivision in equal installments on the 
144.26 	payment dates provided by law.
144.27 		Subd. 2.County aid. The commissioner of revenue shall compute an aid reduction 
144.28 	amount for each county's aid under section 477A.0124 for aid payable in 2009 equal 
144.29 	to 0.2308 percent of the county's net tax capacity, as defined in section 477A.0124, 
144.30 	subdivision 2, used in calculating the 2009 certified amount.
144.31 	To the extent that sufficient information is available on each payment date in 2009, 
144.32 	the commissioner of revenue shall pay any remaining 2009 distribution or reimbursement 
144.33 	amount that is reduced under this section in equal installments on the payment dates 
144.34 	provided by law.

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

145.2 	Sec. 8. Minnesota Statutes 2008, section 477A.03, subdivision 2a, is amended to read:
145.3 		Subd. 2a.Cities. For aids payable in 2009 and thereafter, the total aid paid under 
145.4 	section 477A.013, subdivision 9, is $526,148,487, subject to adjustment in subdivision 5. 
145.5 	For aids payable in 2010, the total aid paid under section 477A.013, subdivision 9, prior 
145.6 	to the reductions under section 477A.013, subdivision 11, is $526,373,487. For aids 
145.7 	payable in 2011 and thereafter, the total aid paid under section 477A.013, subdivision 
145.8 	9, is $526,148,487.

145.9 	EFFECTIVE DATE. This section is effective for aid paid in 2010 and thereafter.

145.10 	Sec. 9. APPROPRIATION; FISCAL STABILIZATION ACCOUNT.
 145.11 	$6,140,000 is appropriated from the fiscal stabilization account in the federal fund to 
145.12 	the commissioner of revenue in fiscal year 2010 for city aid under Minnesota Statutes, 
145.13 	section 477A.013, subdivision 9. The general fund appropriation for city aid in Minnesota 
145.14 	Statutes, section 477A.03, subdivision 2a, for fiscal year 2010, for aids payable in 2009, is 
145.15 	reduced by $6,140,000.

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

145.17 	Sec. 10. REPEALER.
 145.18 	Minnesota Statutes 2008, section 477A.03, subdivision 5, is repealed.

145.19 	EFFECTIVE DATE. This section is effective for aid paid in 2010 and thereafter.

145.20 	ARTICLE 8
145.21 	SEASONAL RECREATIONAL PROPERTY TAX DEFERRAL PROGRAM

145.22 	Section 1. [290D.01] CITATION.
145.23 	This program shall be named the "seasonal recreational property tax deferral 
145.24 	program."

145.25 	Sec. 2. [290D.02] TERMS.
145.26 		Subdivision 1.Terms. For purposes of sections 290D.01 to 290D.08, the terms 
145.27 	defined in this section have the meanings given them.
145.28 		Subd. 2.Primary property owner. "Primary property owner" means a person who 
145.29 	(1) has been the owner, or one of the owners, of the eligible property for at least 15 years 
146.1 	prior to the year the application is filed under section 290D.04; and (2) applies for the 
146.2 	deferral of property taxes under section 290D.04.
146.3 		Subd. 3.Secondary property owner. "Secondary property owner" means any 
146.4 	person, other than the primary property owner, who has been an owner of the eligible 
146.5 	property for at least 15 years prior to the year the initial application is filed for deferral 
146.6 	of property taxes under section 290D.04.
146.7 		Subd. 4.Eligible property. "Eligible property" means a parcel of property or 
146.8 	contiguous parcels of property under the same ownership classified as noncommercial 
146.9 	seasonal residential recreational 4c property under section 273.13, subdivision 25, 
146.10 	paragraph (d), clause (1).
146.11 		Subd. 5.Base property tax amount. "Base property tax amount" means the total 
146.12 	property taxes levied by all taxing jurisdictions, including special assessments, on the 
146.13 	eligible property in the year prior to the year that the initial application is approved under 
146.14 	section 290D.04 and payable in the year of the application.
146.15 		Subd. 6.Special assessments. "Special assessments" mean any assessment, fee, or 
146.16 	other charge that may be made by law, and that appears on the property tax statement for 
146.17 	the property for collection under the laws applicable to the enforcement of real estate taxes.
146.18 		Subd. 7.Commissioner. "Commissioner" means the commissioner of revenue.

146.19 	Sec. 3. [290D.03] QUALIFICATIONS FOR DEFERRAL.
146.20 	In order for an eligible property to qualify for treatment under this program:
146.21 	(1) the eligible property must have been owned solely by the primary property owner, 
146.22 	or jointly with others, for at least 15 years prior to the year the initial application is filed;
146.23 	(2) there must be no state or federal tax liens or judgment liens on the eligible 
146.24 	property;
146.25 	(3) there must be no mortgages or other liens on the eligible property that secure 
146.26 	future advances, except for those subject to credit limits that result in compliance with 
146.27 	clause (4); and
146.28 	(4) the total unpaid balances of debts secured by mortgages and other liens on the 
146.29 	eligible property, including unpaid and delinquent special assessments and interest and 
146.30 	any delinquent property taxes, penalties, and interest, but not including property taxes 
146.31 	payable during the year, must not exceed 60 percent of the assessor's estimated market 
146.32 	value for the current assessment year.

146.33 	Sec. 4. [290D.04] APPLICATION FOR DEFERRAL.
147.1 		Subdivision 1.Initial application. (a) A primary owner of a property meeting 
147.2 	the qualifications under section 290D.03 may apply to the commissioner for deferral 
147.3 	of taxes on the eligible property. Applications are due on or before July 1 for deferral 
147.4 	of any taxes payable in the following year. The application, which must be prescribed 
147.5 	by the commissioner, shall include the following items and any other information the 
147.6 	commissioner deems necessary: 
147.7 	(1) the name, address, and Social Security number of the primary property owner 
147.8 	and secondary property owners, if any;
147.9 	(2) a copy of the property tax statement for the current taxes payable year for the 
147.10 	eligible property;
147.11 	(3) the initial year of ownership of the primary property owner and any second 
147.12 	property owners of the eligible property;
147.13 	(4) information on any mortgage loans or other amounts secured by mortgages or 
147.14 	other liens against the eligible property, for which purpose the commissioner may require 
147.15 	the applicant to provide a copy of the mortgage note, the mortgage, or a statement of the 
147.16 	balance owed on the mortgage loan provided by the mortgage holder. The commissioner 
147.17 	may require the appropriate documents in connection with obtaining and confirming 
147.18 	information on unpaid amounts secured by other liens; and
147.19 	(5) the signatures of the primary property owner and all other owners, if any, stating 
147.20 	that each owner agrees to enroll the eligible property in the program to defer property 
147.21 	taxes under this chapter.
147.22 	The application must state that program participation is voluntary. The application 
147.23 	must also state that program participation includes authorization for the annual deferred 
147.24 	amount. The deferred property tax calculated by the county and the cumulative deferred 
147.25 	property tax amount is public data.
147.26 	(b) As part of the initial application process, if the property is abstract property, the 
147.27 	commissioner may require the applicant to obtain at the applicant's cost a report prepared 
147.28 	by a licensed abstracter showing the last deed and any unsatisfied mortgages, liens, 
147.29 	judgments, and state and federal tax lien notices which were recorded on or after the date 
147.30 	of that last deed with respect to the eligible property or to the applicant.
147.31 	The certificate or report need not include references to any documents filed or 
147.32 	recorded more than 40 years prior to the date of the certification or report. The certification 
147.33 	or report must be as of a date not more than 30 days prior to submission of the application 
147.34 	under this section.
147.35 	The commissioner may also require the county recorder or county registrar of the 
147.36 	county where the eligible property is located to provide copies of recorded documents 
148.1 	related to the applicant of the eligible property, for which the recorder or registrar shall 
148.2 	not charge a fee. The commissioner may use any information available to determine or 
148.3 	verify eligibility under this section.
148.4 		Subd. 2.Approval; recording. The commissioner shall approve all initial 
148.5 	applications that qualify under this chapter and shall notify the primary property owner on 
148.6 	or before December 1. The commissioner may investigate the facts or require confirmation 
148.7 	in regard to an application. The commissioner shall record or file a notice of qualification 
148.8 	for deferral, including the names of the primary and any secondary property owners and a 
148.9 	legal description of the eligible property, in the Office of the County Recorder, or registrar 
148.10 	of titles, whichever is applicable, in the county where the eligible property is located. The 
148.11 	notice must state that it serves as a notice of lien and that it includes deferrals under this 
148.12 	section for future years. The primary property owner shall pay the recording or filing fees 
148.13 	for the notice, which, notwithstanding section 357.18, shall be paid by that owner at the 
148.14 	time of satisfaction of the lien.
148.15 		Subd. 3.Penalty for failure; investigations. (a) The commissioner shall assess 
148.16 	a penalty equal to 20 percent of the property taxes improperly deferred in the case of a 
148.17 	false application. The commissioner shall assess a penalty equal to 50 percent of the 
148.18 	property taxes improperly deferred if the taxpayer knowingly filed a false application. The 
148.19 	commissioner shall assess penalties under this section through the issuance of an order 
148.20 	under the provisions of chapter 270C. Persons affected by a commissioner's order issued 
148.21 	under this section may appeal as provided in chapter 270C.
148.22 	(b) The commissioner may conduct investigations related to initial applications 
148.23 	required under this chapter within the period ending 3-1/2 years from the due date of 
148.24 	the application.
148.25 		Subd. 4.Annual certification to commissioner. Annually, on or before July 1, 
148.26 	the primary property owner must certify to the commissioner that the person continues 
148.27 	to qualify as a primary property owner. If the primary owner has died or has transferred 
148.28 	the property in the preceding year, a certification may be filed by the primary owner's 
148.29 	spouse, or by one of the secondary owners, provided that the person is currently an 
148.30 	owner of the property. In this case, the primary owner's spouse or the secondary owner 
148.31 	shall be considered the primary owner from that point forward. If neither the primary 
148.32 	owner, the primary owner's spouse, or a secondary owner is eligible to file the required 
148.33 	annual certification for the property, the property's participation in the program shall be 
148.34 	terminated, and the procedures in section 290D.08 apply.
148.35 		Subd. 5.Annual notice to primary property owner. Annually, on or before 
148.36 	September 1, the commissioner shall notify each primary property owner, in writing, of 
149.1 	the total cumulative deferred taxes and accrued interest on the qualifying property as of 
149.2 	that date.

149.3 	Sec. 5. [290D.05] DEFERRED PROPERTY TAX AMOUNT.
149.4 		Subdivision 1.Calculation of deferred property tax amount. Each year after 
149.5 	the county auditor has determined the final property tax rates under section 275.08, the 
149.6 	"deferred property tax amount" must be calculated on each eligible property. The deferred 
149.7 	property tax amount is equal to 50 percent of the amount of the difference between (1) the 
149.8 	total amount of property taxes and special assessments levied upon the eligible property 
149.9 	for the current year by all taxing jurisdictions and (2) the eligible property's base property 
149.10 	tax amount. Any tax attributable to new improvements made to the eligible property after 
149.11 	the initial application has been approved under section 290D.04, subdivision 2, must be 
149.12 	excluded in determining the deferred property tax amount. The eligible property's total 
149.13 	current year's tax less the deferred property tax amount for the current year must be listed 
149.14 	on the property tax statement and is the amount due to the county under chapter 276. 
149.15 	Reference that the property is enrolled in the seasonal recreational property tax deferral 
149.16 	program under this chapter and a state lien has been recorded must be clearly printed on 
149.17 	the statement.
149.18 		Subd. 2.Certification to commissioner. The county auditor shall annually, on or 
149.19 	before April 15, certify to the commissioner the property tax deferral amounts determined 
149.20 	under this section for each eligible property in the county. The commissioner shall 
149.21 	prescribe the information that is necessary to identify the eligible properties.
149.22 		Subd. 3.Limitation on total amount of deferred taxes. The total amount of 
149.23 	deferred taxes and interest on a property, when added to (1) the balance owed on any 
149.24 	mortgages on the property at the time of initial application; (2) other amounts secured by 
149.25 	liens on the property at the time of the initial application; and (3) any unpaid and delinquent 
149.26 	special assessments and interest and any delinquent property taxes, penalties, and interest, 
149.27 	but not including property taxes payable during the year, must not exceed 60 percent of 
149.28 	the assessor's estimated market value of the property for the current assessment year.

149.29 	Sec. 6. [290D.06] LIEN; DEFERRED PORTION.
149.30 	(a) Payment by the state to the county treasurer of property taxes, penalties, interest, 
149.31 	or special assessments and interest, deferred under this chapter is deemed a loan from the 
149.32 	state to the program participant. The commissioner shall compute the interest as provided 
149.33 	in section 270C.40, subdivision 5, but not to exceed two percent over the maximum 
149.34 	interest rate provided in section 290B.07, paragraph (a), and maintain records of the total 
150.1 	deferred amount and interest for each participant. Interest accrues beginning September 1 
150.2 	of the payable year for which the taxes are deferred. Any deferral made under this chapter 
150.3 	must not be construed as delinquent property taxes.
150.4 	The lien created under section 272.31 continues to secure payment by the taxpayer, 
150.5 	or by the taxpayer's successors or assigns, of the amount deferred, including interest, with 
150.6 	respect to all years for which amounts are deferred. The lien for deferred taxes and interest 
150.7 	has the same priority as any other lien under section 272.31, except that liens, including 
150.8 	mortgages, recorded or filed prior to the recording or filing of the notice under section 
150.9 	290D.04, subdivision 2, have priority over the lien for deferred taxes and interest. A 
150.10 	seller's interest in a contract for deed, in which a qualifying owner is the purchaser or an 
150.11 	assignee of the purchaser, has priority over deferred taxes and interest on deferred taxes, 
150.12 	regardless of whether the contract for deed is recorded or filed. The lien for deferred taxes 
150.13 	and interest for future years has the same priority as the lien for deferred taxes and interest 
150.14 	for the first year, which is always higher in priority than any mortgages or other liens filed, 
150.15 	recorded, or created after the notice recorded or filed under section 290D.04, subdivision 
150.16 	2. The county treasurer or auditor shall maintain records of the deferred portion and shall 
150.17 	list the amount of deferred taxes for the year and the cumulative deferral and interest for 
150.18 	all previous years as a lien against the eligible property. In any certification of unpaid 
150.19 	taxes for a tax parcel, the county auditor shall clearly distinguish between taxes payable in 
150.20 	the current year, deferred taxes and interest, and delinquent taxes. Payment of the deferred 
150.21 	portion becomes due and owed at the time specified in section 290D.07. Upon receipt of 
150.22 	the payment, the commissioner shall issue a receipt to the person making the payment 
150.23 	upon request and shall notify the auditor of the county in which the parcel is located, 
150.24 	within ten days, identifying the parcel to which the payment applies. Upon receipt by the 
150.25 	commissioner of collected funds in the amount of the deferral, the state's loan to the 
150.26 	program participant is deemed paid in full.
150.27 	(b) If eligible property for which taxes have been deferred under this chapter forfeits 
150.28 	under chapter 281 for nonpayment of a nondeferred property tax amount, or because 
150.29 	of nonpayment of amounts previously deferred following a termination under section 
150.30 	290D.07, the lien for the taxes deferred under this chapter, plus interest and costs, shall be 
150.31 	canceled by the county auditor as provided in section 282.07. However, notwithstanding 
150.32 	any other law to the contrary, any proceeds from a subsequent sale of the eligible property 
150.33 	under chapter 282 or another law, must be used to first reimburse the county's forfeited 
150.34 	tax sale fund for any direct costs of selling the eligible property or any costs directly 
150.35 	related to preparing the eligible property for sale, and then to reimburse the state for 
150.36 	the amount of the canceled lien. Within 90 days of the receipt of any sale proceeds to 
151.1 	which the state is entitled under these provisions, the county auditor must pay those funds 
151.2 	to the commissioner by warrant for deposit in the general fund. No other deposit, use, 
151.3 	distribution, or release of gross sale proceeds or receipts may be made by the county until 
151.4 	payments sufficient to fully reimburse the state for the canceled lien amount have been 
151.5 	transmitted to the commissioner.

151.6 	Sec. 7. [290D.07] TERMINATION OF DEFERRAL; PAYMENT OF DEFERRED 
151.7 	TAXES.
151.8 		Subdivision 1.Termination. (a) The deferral of taxes granted under this chapter 
151.9 	terminates when one of the following occurs:
151.10 	(1) the eligible property is sold or transferred to someone other than the primary 
151.11 	owner's spouse or a secondary owner;
151.12 	(2) the death of the primary owner, or in the case of a married couple, after the 
151.13 	death of both spouses, provided that there is not a secondary owner eligible to become 
151.14 	the primary owner;
151.15 	(3) the primary property owner notifies the commissioner, in writing, that all owners, 
151.16 	including any secondary property owners, desire to discontinue the deferral; or
151.17 	(4) the eligible property no longer qualifies under section 290D.03.
151.18 	(b) An eligible property is not terminated from the program because no deferred 
151.19 	property tax amount is determined for any given year after the eligible property's initial 
151.20 	enrollment into the program.
151.21 	(c) An eligible property is not terminated from the program if the eligible property 
151.22 	subsequently becomes the homestead of one or more of the property owners and the 
151.23 	property and the owners qualify for, and are immediately enrolled in, the senior deferral 
151.24 	program under chapter 290B.
151.25 		Subd. 2.Payment upon termination. Upon the termination of the deferral under 
151.26 	subdivision 1, the amount of deferred taxes, penalties, interest, and special assessments 
151.27 	and interest, plus the recording or filing fees under this subdivision and section 290D.04, 
151.28 	subdivision 2, becomes due and payable to the commissioner within 90 days of termination 
151.29 	of the deferral for terminations under subdivision 1, paragraph (a), clauses (1) and (2), 
151.30 	and within one year of termination of the deferral for terminations under subdivision 1, 
151.31 	paragraph (a), clauses (3) and (4). No additional interest is due on the deferral if timely 
151.32 	paid. On receipt of payment, the commissioner shall, within ten days, notify the auditor 
151.33 	of the county in which the parcel is located, identifying the parcel to which the payment 
151.34 	applies and shall remit the recording or filing fees under this subdivision and section 
151.35 	290D.04, subdivision 2, to the auditor. A notice of termination of deferral, containing the 
152.1 	legal description and the recording or filing data for the notice of qualification for deferral 
152.2 	under section 290D.04, subdivision 2, shall be prepared and recorded or filed by the 
152.3 	county auditor in the same office in which the notice of qualification for deferral under 
152.4 	section 290D.04, subdivision 2, was recorded or filed, and the county auditor shall mail a 
152.5 	copy of the notice of termination to the property owner. The property owner shall pay the 
152.6 	recording or filing fees. Upon recording or filing of the notice of termination of deferral, 
152.7 	the notice of qualification for deferral under section 290D.04, subdivision 2, and the lien 
152.8 	created by it are discharged. If the deferral is not timely paid, the penalty, interest, lien, 
152.9 	forfeiture, and other rules for the collection of ad valorem property taxes apply. 

152.10 	Sec. 8. [290D.08] STATE REIMBURSEMENT.
152.11 		Subdivision 1.Determination; payment. The county auditor shall determine the 
152.12 	total current year's deferred amount of property tax under this chapter in the county, and 
152.13 	submit those amounts as part of the abstracts of tax lists submitted by the county auditors 
152.14 	under section 275.29. The commissioner may make changes in the abstracts of tax lists as 
152.15 	deemed necessary. The commissioner, after such review, shall pay the deferred amount of 
152.16 	property tax to each county treasurer on or before August 31. 
152.17 	The county treasurer shall distribute as part of the October settlement the funds 
152.18 	received as if they had been collected as part of the property tax.
152.19 		Subd. 2.Appropriation. An amount sufficient to pay the total amount of property 
152.20 	tax determined under subdivision 1, plus any other amounts paid under this chapter, is 
152.21 	annually appropriated from the general fund to the commissioner.

152.22 	Sec. 9. EFFECTIVE DATE.
 152.23 	Sections 1 to 8 are effective for applications filed July 1, 2009, and thereafter.

152.24 	ARTICLE 9
152.25 	SPECIAL TAXES

152.26 	Section 1. Minnesota Statutes 2008, section 295.75, subdivision 2, is amended to read:
152.27 		Subd. 2.Gross receipts tax imposed. A tax is imposed on each liquor retailer equal 
152.28 	to 2.5 five percent of gross receipts from retail sales in Minnesota of liquor.

152.29 	EFFECTIVE DATE. This section is effective for gross receipts received after 
152.30 	June 30, 2009.

153.1 	Sec. 2. Minnesota Statutes 2008, section 297F.01, is amended by adding a subdivision 
153.2 	to read:
153.3 		Subd. 10b.Moist snuff. "Moist snuff" means any finely cut, ground, or powdered 
153.4 	smokeless tobacco that is intended to be placed or dipped in the oral cavity, but does 
153.5 	not include any finely cut, ground, or powdered tobacco that is intended to be placed 
153.6 	in the nasal cavity.

153.7 	EFFECTIVE DATE. This section is effective July 1, 2009.

153.8 	Sec. 3. Minnesota Statutes 2008, section 297F.05, subdivision 1, is amended to read:
153.9 		Subdivision 1.Rates; cigarettes. A tax is imposed upon the sale of cigarettes in 
153.10 	this state, upon having cigarettes in possession in this state with intent to sell, upon any 
153.11 	person engaged in business as a distributor, and upon the use or storage by consumers, at 
153.12 	the following rates:
153.13 	(1) on cigarettes weighing not more than three pounds per thousand, 24 51 mills on 
153.14 	each such cigarette; and
153.15 	(2) on cigarettes weighing more than three pounds per thousand, 48 102 mills on 
153.16 	each such cigarette.

153.17 	EFFECTIVE DATE. This section is effective July 1, 2009.

153.18 	Sec. 4. Minnesota Statutes 2008, section 297F.05, subdivision 3, is amended to read:
153.19 		Subd. 3.Rates; tobacco products. (a) A tax is imposed upon all tobacco products 
153.20 	in this state and upon any person engaged in business as a distributor, at the rate rates of:
153.21 	(1) 35 percent of the wholesale sales price of the tobacco products other than moist 
153.22 	snuff; or
153.23 	(2) for moist snuff, 91 cents per ounce and a proportionate tax at that rate on all 
153.24 	fractional parts of an ounce. The tax must be computed based on the net weight as listed 
153.25 	by manufacturer and rounded up to the nearest one-tenth of an ounce, provided that any 
153.26 	product listed by the manufacturer as having a net weight of less than 1.2 ounces must 
153.27 	be taxed as if the product has a net weight of 1.2 ounces.
153.28 	(b) The tax is imposed at the time the distributor:
153.29 	(1) brings, or causes to be brought, into this state from outside the state tobacco 
153.30 	products for sale;
153.31 	(2) makes, manufactures, or fabricates tobacco products in this state for sale in 
153.32 	this state; or
154.1 	(3) ships or transports tobacco products to retailers in this state, to be sold by those 
154.2 	retailers.

154.3 	EFFECTIVE DATE. This section is effective July 1, 2009, but does not apply 
154.4 	to any moist snuff (1) that was in the inventory of a distributor, wholesaler, or retail 
154.5 	dealer within this state on that date, or in the possession of a consumer within this state 
154.6 	on that date, and (2) as to which the tax levied by Minnesota Statutes, section 297F.05, 
154.7 	subdivisions 3 and 4, and the tobacco health impact fee levied by Minnesota Statutes, 
154.8 	section 256.9658, subdivision 3, paragraph (b), had been paid as of August 1, 2009.

154.9 	Sec. 5. Minnesota Statutes 2008, section 297F.05, subdivision 4, is amended to read:
154.10 		Subd. 4.Use tax; tobacco products. A tax is imposed upon the use or storage by 
154.11 	consumers of tobacco products in this state, and upon such consumers, at the rate rates of:
154.12 	(1) 35 percent of the cost to the consumer of the tobacco products other than moist 
154.13 	snuff; and
154.14 	(2) for moist snuff, 91 cents per ounce and a proportionate tax at that rate on all 
154.15 	fractional parts of an ounce. The tax must be computed based on the net weight as listed 
154.16 	by manufacturer and rounded up to the nearest one-tenth of an ounce, provided that any 
154.17 	product listed by the manufacturer as having a net weight of less than 1.2 ounces must 
154.18 	be taxed as if the product has a net weight of 1.2 ounces.

154.19 	EFFECTIVE DATE. This section is effective July 1, 2009, but does not apply 
154.20 	to any moist snuff (1) that was in the inventory of a distributor, wholesaler, or retail 
154.21 	dealer within this state on that date, or in the possession of a consumer within this state 
154.22 	on that date, and (2) as to which the tax levied by Minnesota Statutes, section 297F.05, 
154.23 	subdivisions 3 and 4, and the tobacco health impact fee levied by Minnesota Statutes, 
154.24 	section 256.9658, subdivision 3, paragraph (b), had been paid as of August 1, 2009.

154.25 	Sec. 6. Minnesota Statutes 2008, section 297F.05, is amended by adding a subdivision 
154.26 	to read:
154.27 		Subd. 8.Inflation adjustment. (a) Each year the rates of tax applicable to moist 
154.28 	snuff under subdivisions 3 and 4 are adjusted for inflation as provided in this subdivision. 
154.29 	The inflation adjusted rate of tax applies to sales, use, and possession of moist snuff 
154.30 	during the calendar year.
154.31 	(b) In making the inflation adjustment under this subdivision for a calendar year, the 
154.32 	commissioner shall adjust the tax rate by the percentage determined under section 1(f) 
154.33 	of the Internal Revenue Code of 1986, except that in section 1(f)(3)(B) the word "2010" 
155.1 	is substituted for the word "1992." For 2012, the commissioner shall then determine the 
155.2 	percentage change from the 12 months ending on August 31, 2010, to the 12 months 
155.3 	ending on August 31, 2011, and in each subsequent year, from the 12 months ending on 
155.4 	August 31, 2010, to the 12 months ending on August 31 of the year preceding the calendar 
155.5 	year. The amount as adjusted must be rounded to the nearest cent. If the amount ends 
155.6 	in 0.5 cent, the amount is rounded up to the nearest cent.
155.7 	(c) The determination of the commissioner under this subdivision is not a "rule" and 
155.8 	is not subject to the Administrative Procedure Act in chapter 14.

155.9 	EFFECTIVE DATE. This section is effective beginning for calendar year 2012.

155.10 	Sec. 7. Minnesota Statutes 2008, section 297G.03, subdivision 1, is amended to read:
155.11 		Subdivision 1.General rate; distilled spirits and wine. The following excise tax is 
155.12 	imposed on all distilled spirits and wine manufactured, imported, sold, or possessed in 
155.13 	this state:

155.14				Standard
			Metric
	
155.15
155.16
155.17
155.18	(a) Distilled spirits, liqueurs, 
cordials, and specialties regardless 
of alcohol content (excluding ethyl 
alcohol)
		$
	5.037.59 per 
gallon
		$
	1.332.01 
per liter
	
155.19
155.20
155.21
155.22	(b) Wine containing 14 percent 
or less alcohol by volume (except 
cider as defined in section 297G.01, 
subdivision 3a)
		$
	.30.56 per 
gallon
		$
	.08.15 per 
liter
	
155.23
155.24
155.25	(c) Wine containing more than 
14 percent but not more than 21 
percent alcohol by volume
		$
	.951.20 per 
gallon
		$
	.25.32  per 
liter
	
155.26
155.27
155.28	(d) Wine containing more than 
21 percent but not more than 24 
percent alcohol by volume
		$
	1.822.07 per 
gallon
		$
	.48.55 per 
liter
	
155.29
155.30	(e) Wine containing more than 24 
percent alcohol by volume
		$
	3.523.77 per 
gallon
		$
	.931.00
per liter
	
155.31
155.32	(f) Natural and artificial sparkling 
wines containing alcohol
		$
	1.822.07 per 
gallon
		$
	.48.55 per 
liter
	
155.33
155.34	(g) Cider as defined in section 
297G.01, subdivision 3a
		$
	.15.41 per 
gallon
		$
	.04.11 per 
liter
	
155.35	(h) Low alcohol dairy cocktails
		$
	.08 per gallon
		$
	.02 per liter
	
155.36 	In computing the tax on a package of distilled spirits or wine, a proportional tax at a 
155.37 	like rate on all fractional parts of a gallon or liter must be paid, except that the tax on a 
155.38 	fractional part of a gallon less than 1/16 of a gallon is the same as for 1/16 of a gallon.

155.39 	EFFECTIVE DATE. This section is effective July 1, 2009.

156.1 	Sec. 8. Minnesota Statutes 2008, section 297G.04, is amended to read:
156.2 	297G.04 FERMENTED MALT BEVERAGES; RATE OF TAX.
156.3 		Subdivision 1.Tax imposed. The following excise tax is imposed on all fermented 
156.4 	malt beverages that are imported, directly or indirectly sold, or possessed in this state:
156.5 	(1) on fermented malt beverages containing not more than 3.2 percent alcohol by 
156.6 	weight, $2.40 $5.71 per 31-gallon barrel; and
156.7 	(2) on fermented malt beverages containing more than 3.2 percent alcohol by 
156.8 	weight, $4.60 $7.91 per 31-gallon barrel.
156.9 	For fractions of a 31-gallon barrel, the tax rate is calculated proportionally.
156.10 		Subd. 2.Tax credit. A qualified brewer producing fermented malt beverages is 
156.11 	entitled to a tax credit of $4.60 $7.91 per barrel on 25,000 barrels sold in any fiscal year 
156.12 	beginning July 1, regardless of the alcohol content of the product. Qualified brewers may 
156.13 	take the credit on the 18th day of each month, but the total credit allowed may not exceed 
156.14 	in any fiscal year the lesser of:
156.15 	(1) the liability for tax; or
156.16 	(2) $115,000 $198,000.
156.17 	For purposes of this subdivision, a "qualified brewer" means a brewer, whether 
156.18 	or not located in this state, manufacturing less than 100,000 barrels of fermented malt 
156.19 	beverages in the calendar year immediately preceding the calendar year for which the 
156.20 	credit under this subdivision is claimed. In determining the number of barrels, all brands 
156.21 	or labels of a brewer must be combined. All facilities for the manufacture of fermented 
156.22 	malt beverages owned or controlled by the same person, corporation, or other entity 
156.23 	must be treated as a single brewer.

156.24 	EFFECTIVE DATE. This section is effective July 1, 2009.

156.25 	Sec. 9. FLOOR STOCKS TAX.
 156.26 		Subdivision 1.Cigarettes. (a) A floor stocks cigarette tax is imposed on every 
156.27 	person engaged in the business in this state as a distributor, retailer, subjobber, vendor, 
156.28 	manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and 
156.29 	unaffixed stamps in the person's possession or under the person's control at 12:01 a.m. on 
156.30 	July 1, 2009. The tax is imposed at the following rates:
156.31 	(1) on cigarettes weighing not more than three pounds per thousand, 27 mills on 
156.32 	each cigarette; and 
156.33 	(2) on cigarettes weighing more than three pounds per thousand, 54 mills on each 
156.34 	cigarette.
157.1 	(b) Each distributor, on or before July 15, 2009, shall file a return with the 
157.2 	commissioner of revenue, in the form the commissioner prescribes, showing the stamped 
157.3 	cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2009, and the amount 
157.4 	of tax due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor, 
157.5 	manufacturer, or manufacturer's representative, on or before July 15, 2009, shall file 
157.6 	a return with the commissioner of revenue, in the form the commissioner prescribes, 
157.7 	showing the cigarettes on hand at 12:01 a.m. on July 1, 2009, and the amount of tax due 
157.8 	on the cigarettes. The tax imposed by this section is due and payable on or before August 
157.9 	14, 2009, and after that date bears interest at the rate of one percent per month.
157.10 		Subd. 2.Audit and enforcement. The tax imposed by this section is subject to 
157.11 	the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and 
157.12 	collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner 
157.13 	of revenue may require a distributor to receive and maintain copies of floor stocks fee 
157.14 	returns filed by all persons requesting a credit for returned cigarettes.
157.15 		Subd. 3.Deposit of proceeds. The commissioner of revenue shall deposit the 
157.16 	revenues from the tax under this section in the state treasury and credit them to the 
157.17 	general fund.

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

157.19 	Sec. 10. ADJUSTMENT OF CIGARETTE SALES TAX.
 157.20 	Effective July 1, 2009, through July 31, 2010, the cigarette sales tax under Minnesota 
157.21 	Statutes, section 297F.25, is 36.8 cents per pack of 20 cigarettes. Effective August 1, 
157.22 	2010, the rate as determined by the commissioner under Minnesota Statutes, section 
157.23 	297F.25, applies.

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

157.25 	ARTICLE 10
157.26 	SALES AND USE TAX

157.27 	Section 1. Minnesota Statutes 2008, section 84.82, subdivision 10, is amended to read:
157.28 		Subd. 10.Proof of sales tax payment. (a) A person applying for initial registration 
157.29 	of a snowmobile, or applying for reregistration for the first time after a change of 
157.30 	ownership under subdivision 1, must provide a snowmobile purchaser's certificate, 
157.31 	showing a complete description of the snowmobile, the seller's name and address, the full 
157.32 	purchase price of the snowmobile, and the trade-in allowance, if any. The certificate must 
157.33 	include information showing either (1) that the sales and use tax under chapter 297A was 
158.1 	paid or (2) the purchase was exempt from tax under chapter 297A. The commissioner of 
158.2 	public safety, in consultation with the commissioner and the commissioner of revenue, 
158.3 	shall prescribe the form of the certificate.
158.4 	(b) The certificate is not required if the applicant provides a receipt, invoice, or other 
158.5 	document that shows the snowmobile was purchased from a retailer maintaining a place of 
158.6 	business in this state as defined in section 297A.66, subdivision 1.  
158.7 	(c) If the applicant cannot meet the provisions in either paragraph (a) or (b), the 
158.8 	applicant must provide a receipt, invoice, or other document from the previous owner 
158.9 	certifying the amount paid for the snowmobile, whether in money or other consideration, 
158.10 	and remit the applicable use tax along with the registration fee.

158.11 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
158.12 	June 30, 2009.

158.13 	Sec. 2. Minnesota Statutes 2008, section 84.922, subdivision 11, is amended to read:
158.14 		Subd. 11.Proof of sales tax payment. (a) A person applying for initial registration 
158.15 	in Minnesota of an all-terrain vehicle, or transfer of a registration under subdivision 4,
158.16 	shall provide a purchaser's certificate showing a complete description of the all-terrain 
158.17 	vehicle, the seller's name and address, the full purchase price of the all-terrain vehicle, 
158.18 	and the trade-in allowance, if any. The certificate also must include information showing 
158.19 	either that (1) the sales and use tax under chapter 297A was paid, or (2) the purchase 
158.20 	was exempt from tax under chapter 297A. The certificate is not required if the applicant 
158.21 	provides a receipt, invoice, or other document that shows the all-terrain vehicle was 
158.22 	purchased from a retailer maintaining a place of business in this state as defined in section 
158.23 	297A.66, subdivision 1.  
158.24 	(b) If the applicant cannot meet the provisions in paragraph (a), the applicant must 
158.25 	provide a receipt, invoice, or other document from the previous owner certifying the 
158.26 	amount paid for the all-terrain vehicle, whether in money or other consideration, and remit 
158.27 	the applicable use tax along with the registration or transfer fee.

158.28 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
158.29 	June 30, 2009.

158.30 	Sec. 3. Minnesota Statutes 2008, section 86B.401, subdivision 12, is amended to read:
158.31 		Subd. 12.Proof of sales tax payment. (a) A person applying for initial licensing of 
158.32 	a watercraft, or applying for a duplicate license due to change of ownership as required 
158.33 	in subdivision 8, must provide a watercraft purchaser's certificate, showing a complete 
159.1 	description of the watercraft, the seller's name and address, the full purchase price of the 
159.2 	watercraft, and the trade-in allowance, if any. The certificate must include information 
159.3 	showing either (1) that the sales and use tax under chapter 297A was paid or (2) the 
159.4 	purchase was exempt from tax under chapter 297A. The commissioner of public safety, 
159.5 	in consultation with the commissioner and the commissioner of revenue, shall prescribe 
159.6 	the form of the certificate.
159.7 	(b) The certificate is not required if the applicant provides a receipt, invoice, or other 
159.8 	document that shows the watercraft was purchased from a retailer maintaining a place of 
159.9 	business in this state as defined in section 297A.66, subdivision 1.  
159.10 	(c) If the applicant cannot meet the provisions in either paragraph (a) or (b), the 
159.11 	applicant must provide a receipt, invoice, or other document from the previous owner 
159.12 	certifying the amount paid for the watercraft, whether in money or other consideration, 
159.13 	and remit the applicable use tax along with the license fee.

159.14 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
159.15 	June 30, 2009.

159.16 	Sec. 4. [270C.085] NOTIFICATION REQUIREMENTS; SALES AND USE 
159.17 	TAXES.
159.18 	The commissioner of revenue shall establish a means of electronically notifying 
159.19 	persons holding a sales tax permit under section 297A.84 of any statutory change in 
159.20 	chapter 297A and any issuance or change in any administrative rule, revenue notice, or 
159.21 	sales tax fact sheet or other written information provided by the department explaining the 
159.22 	interpretation or administration of the tax imposed under that chapter. The notification 
159.23 	must indicate the basic subject of the statute, rule, fact sheet, or other material and provide 
159.24 	an electronic link to the material. Any person holding a sales tax permit that provides 
159.25 	an electronic address to the department must receive these notifications unless they 
159.26 	specifically request electronically, or in writing, to be removed from the notification list. 
159.27 	This requirement does not replace traditional means of notifying the general public or 
159.28 	persons without access to electronic communications of changes in the sales tax law. The 
159.29 	electronic notification must begin no later than December 31, 2009.

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

159.31 	Sec. 5. Minnesota Statutes 2008, section 289A.11, subdivision 1, is amended to read:
159.32 		Subdivision 1.Return required. (a) Except as provided in section 289A.18, 
159.33 	subdivision 4, for the month in which taxes imposed by chapter 297A are payable, or for 
160.1 	which a return is due, a return for the preceding reporting period must be filed with the 
160.2 	commissioner in the form and manner the commissioner prescribes. A person making 
160.3 	sales at retail at two or more places of business may file a consolidated return subject to 
160.4 	rules prescribed by the commissioner. In computing the dollar amount of items on the 
160.5 	return, the amounts are rounded off to the nearest whole dollar, disregarding amounts less 
160.6 	than 50 cents and increasing amounts of 50 cents to 99 cents to the next highest dollar.
160.7 	(b) Notwithstanding this subdivision, a person who is not required to hold a sales tax 
160.8 	permit under chapter 297A and who makes annual purchases, for use in a trade or business, 
160.9 	of less than $18,500, or a person who is not required to hold a sales tax permit and who 
160.10 	makes purchases for personal use, that are subject to the use tax imposed by section 
160.11 	297A.63, may file an annual use tax return on a form prescribed by the commissioner. If a 
160.12 	person who qualifies for an annual use tax reporting period is required to obtain a sales tax 
160.13 	permit or makes use tax purchases, for use in a trade or business, in excess of $18,500 
160.14 	during the calendar year, the reporting period must be considered ended at the end of the 
160.15 	month in which the permit is applied for or the purchase in excess of $18,500 is made and 
160.16 	a return must be filed for the preceding reporting period.
160.17 	(c) Notwithstanding paragraph (a), a person prohibited by the person's religious 
160.18 	beliefs from using electronics shall be allowed to file by mail, without any additional fees. 
160.19 	The filer must notify the commissioner of revenue of the intent to file by mail on a form 
160.20 	prescribed by the commissioner. A return filed under this paragraph must be postmarked 
160.21 	no later than the day the return is due in order to be considered filed on a timely basis.

160.22 	EFFECTIVE DATE. This section is effective for returns filed after June 30, 2009.

160.23 	Sec. 6. Minnesota Statutes 2008, section 289A.20, subdivision 4, is amended to read:
160.24 		Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and 
160.25 	payable to the commissioner monthly on or before the 20th day of the month following the 
160.26 	month in which the taxable event occurred, or following another reporting period as the 
160.27 	commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph 
160.28 	(f) or (g), except that use taxes due on an annual use tax return as provided under section 
160.29 	289A.11, subdivision 1, are payable by April 15 following the close of the calendar year. 
160.30 	(b) A vendor having a liability of $120,000 or more during a fiscal year ending June 
160.31 	30 must remit the June liability for the next year in the following manner: 
160.32 	(1) Two business days before June 30 of the year, the vendor must remit 90 percent 
160.33 	of the estimated June liability to the commissioner. 
160.34 	(2) On or before August 20 of the year, the vendor must pay any additional amount 
160.35 	of tax not remitted in June. 
161.1 	(c) A vendor having a liability of: 
161.2 	(1) $20,000 or more in the fiscal year ending June 30, 2005; or 
161.3 	(2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years 
161.4 	thereafter, 
161.5 	must remit all liabilities on returns due for periods beginning in the subsequent calendar 
161.6 	year by electronic means on or before the 20th day of the month following the month in 
161.7 	which the taxable event occurred, or on or before the 20th day of the month following the 
161.8 	month in which the sale is reported under section 289A.18, subdivision 4, except for 90 
161.9 	percent of the estimated June liability, which is due two business days before June 30. The 
161.10 	remaining amount of the June liability is due on August 20. 
161.11 	(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's 
161.12 	religious beliefs from paying electronically shall be allowed to remit the payment by mail. 
161.13 	The filer must notify the commissioner of revenue of the intent to pay by mail before 
161.14 	doing so on a form prescribed by the commissioner. No extra fee may be charged to a 
161.15 	person making payment by mail under this paragraph. The payment must be postmarked 
161.16 	at least two business days before the due date for making the payment in order to be 
161.17 	considered paid on a timely basis.

161.18 	EFFECTIVE DATE. This section is effective for payments remitted after June 
161.19 	30, 2009.

161.20 	Sec. 7. Minnesota Statutes 2008, section 297A.61, subdivision 3, is amended to read:
161.21 		Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
161.22 	to, each of the transactions listed in this subdivision. 
161.23 	(b) Sale and purchase include: 
161.24 	(1) any transfer of title or possession, or both, of tangible personal property,
161.25 	specified digital products, or other digital products whether absolutely or conditionally, for 
161.26 	a consideration in money or by exchange or barter; and 
161.27 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
161.28 	in money or by exchange or barter, tangible personal property, specified digital products or 
161.29 	other digital products, other than a manufactured home used for residential purposes for 
161.30 	a continuous period of 30 days or more. 
161.31 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
161.32 	tangible personal property for a consideration for consumers who furnish either directly or 
161.33 	indirectly the materials used in the production, fabrication, printing, or processing. It also 
161.34 	includes the production or processing of specified digital products or other digital products 
162.1 	for a consideration for consumers who furnish either directly or indirectly materials or 
162.2 	other inputs used in the production or processing.
162.3 	(d) Sale and purchase include the preparing for a consideration of food. 
162.4 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
162.5 	to, the following: 
162.6 	(1) prepared food sold by the retailer; 
162.7 	(2) soft drinks; 
162.8 	(3) candy; 
162.9 	(4) dietary supplements; and 
162.10 	(5) all food sold through vending machines. 
162.11 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
162.12 	gas, water, or steam for use or consumption within this state. 
162.13 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
162.14 	computer software whether delivered electronically, by load and leave, or otherwise. 
162.15 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
162.16 	services: 
162.17 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
162.18 	events, and the making available of amusement devices, tanning facilities, reducing 
162.19 	salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities; 
162.20 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
162.21 	motel, or trailer camp, including furnishing the guest of the facility with access to 
162.22 	telecommunication services, and the granting of any similar license to use real property 
162.23 	in a specific facility, other than the renting or leasing of it for a continuous period of 
162.24 	30 days or more under an enforceable written agreement that may not be terminated 
162.25 	without prior notice; 
162.26 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
162.27 	periodic basis, except for parking at a meter; 
162.28 	(4) the granting of membership in a club, association, or other organization if: 
162.29 	(i) the club, association, or other organization makes available for the use of its 
162.30 	members sports and athletic facilities, without regard to whether a separate charge is 
162.31 	assessed for use of the facilities; and 
162.32 	(ii) use of the sports and athletic facility is not made available to the general public 
162.33 	on the same basis as it is made available to members. 
162.34 	Granting of membership means both onetime initiation fees and periodic membership 
162.35 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
163.1 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
163.2 	swimming pools; and other similar athletic or sports facilities; 
163.3 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
163.4 	material used in road construction, and delivery of concrete block by a third party if 
163.5 	the delivery would be subject to the sales tax if provided by the seller of the concrete 
163.6 	block; and 
163.7 	(6) services as provided in this clause: 
163.8 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
163.9 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
163.10 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
163.11 	include services provided by coin operated facilities operated by the customer; 
163.12 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
163.13 	provided by coin operated facilities operated by the customer, and rustproofing, 
163.14 	undercoating, and towing of motor vehicles; 
163.15 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
163.16 	pest control and exterminating services; 
163.17 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
163.18 	including services performed within the jurisdiction they serve by off-duty licensed peace 
163.19 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
163.20 	organization for monitoring and electronic surveillance of persons placed on in-home 
163.21 	detention pursuant to court order or under the direction of the Minnesota Department 
163.22 	of Corrections; 
163.23 	(v) pet grooming services; 
163.24 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
163.25 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
163.26 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
163.27 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
163.28 	public utility lines. Services performed under a construction contract for the installation of 
163.29 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable; 
163.30 	(vii) massages, except when provided by a licensed health care facility or 
163.31 	professional or upon written referral from a licensed health care facility or professional for 
163.32 	treatment of illness, injury, or disease; and 
163.33 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
163.34 	other similar arrangements, but excluding veterinary and horse boarding services. 
163.35 	In applying the provisions of this chapter, the terms "tangible personal property" 
163.36 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
164.1 	and the provision of these taxable services, unless specifically provided otherwise. 
164.2 	Services performed by an employee for an employer are not taxable. Services performed 
164.3 	by a partnership or association for another partnership or association are not taxable if 
164.4 	one of the entities owns or controls more than 80 percent of the voting power of the 
164.5 	equity interest in the other entity. Services performed between members of an affiliated 
164.6 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
164.7 	group of corporations" means those entities that would be classified as members of an 
164.8 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
164.9 	the exclusions in section 1504(b). 
164.10 	For purposes of clause (5), "road construction" means construction of (1) public 
164.11 	roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 
164.12 	metropolitan area up to the point of the emergency response location sign. 
164.13 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
164.14 	personal property or taxable services by the United States or any of its agencies or 
164.15 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
164.16 	subdivisions. 
164.17 	(i) A sale and a purchase includes the furnishing for a consideration of 
164.18 	telecommunications services, ancillary services associated with telecommunication 
164.19 	services, cable television services, direct satellite services, and ring tones. 
164.20 	Telecommunication services include, but are not limited to, the following services, 
164.21 	as defined in section 297A.669: air-to-ground radiotelephone service, mobile 
164.22 	telecommunication service, postpaid calling service, prepaid calling service, prepaid 
164.23 	wireless calling service, and private communication services. The services in this 
164.24 	paragraph are taxed to the extent allowed under federal law. 
164.25 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
164.26 	the installation charges would be subject to the sales tax if the installation were provided 
164.27 	by the seller of the item being installed. 
164.28 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
164.29 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
164.30 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
164.31 	65B.29, subdivision 1, clause (1). 
164.32 	(l) A sale and a purchase includes the furnishing for a consideration of specified 
164.33 	digital products and other digital products and granting the right for a consideration to use 
164.34 	specified digital products and other digital products on a temporary or permanent basis and 
164.35 	regardless of whether the purchaser is required to make continued payments for such right.

165.1 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
165.2 	June 30, 2009.

165.3 	Sec. 8. Minnesota Statutes 2008, section 297A.61, subdivision 4, is amended to read:
165.4 		Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any 
165.5 	purpose, other than resale, sublease, or subrent of items by the purchaser in the normal 
165.6 	course of business as defined in subdivision 21. 
165.7 	(b) A sale of property used by the owner only by leasing it to others or by holding it 
165.8 	in an effort to lease it, and put to no use by the owner other than resale after the lease or 
165.9 	effort to lease, is a sale of property for resale. 
165.10 	(c) A sale of master computer software that is purchased and used to make copies for 
165.11 	sale or lease is a sale of property for resale. 
165.12 	(d) A sale of building materials, supplies, and equipment to owners, contractors, 
165.13 	subcontractors, or builders for the erection of buildings or the alteration, repair, or 
165.14 	improvement of real property is a retail sale in whatever quantity sold, whether the sale is 
165.15 	for purposes of resale in the form of real property or otherwise. 
165.16 	(e) A sale of carpeting, linoleum, or similar floor covering to a person who provides 
165.17 	for installation of the floor covering is a retail sale and not a sale for resale since a sale 
165.18 	of floor covering which includes installation is a contract for the improvement of real 
165.19 	property. 
165.20 	(f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides 
165.21 	for installation of the items is a retail sale and not a sale for resale since a sale of 
165.22 	shrubbery, plants, sod, trees, and similar items that includes installation is a contract for 
165.23 	the improvement of real property. 
165.24 	(g) A sale of tangible personal property, specified digital products, or other digital 
165.25 	products that is awarded as prizes is a retail sale and is not considered a sale of property 
165.26 	for resale. 
165.27 	(h) A sale of tangible personal property, specified digital products, or other digital 
165.28 	products utilized or employed in the furnishing or providing of services under subdivision 
165.29 	3, paragraph (g), clause (1), including, but not limited to, property given as promotional 
165.30 	items, is a retail sale and is not considered a sale of property for resale. 
165.31 	(i) A sale of tangible personal property, specified digital products, or other digital 
165.32 	products used in conducting lawful gambling under chapter 349 or the State Lottery under 
165.33 	chapter 349A, including, but not limited to, property given as promotional items, is a retail 
165.34 	sale and is not considered a sale of property for resale. 
166.1 	(j) A sale of machines, equipment, or devices that are used to furnish, provide, or 
166.2 	dispense goods or services, including, but not limited to, coin-operated devices, is a retail 
166.3 	sale and is not considered a sale of property for resale. 
166.4 	(k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease 
166.5 	payment becomes due under the terms of the agreement or the trade practices of the 
166.6 	lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, 
166.7 	subdivision 11, but excluding vehicles with a manufacturer's gross vehicle weight rating 
166.8 	greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time 
166.9 	the lease is executed. 
166.10 	(l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of 
166.11 	title or possession of the tangible personal property. 
166.12 	(m) A sale of a bundled transaction in which one or more of the products included 
166.13 	in the bundle is a taxable product is a retail sale, except that if one of the products 
166.14 	is a telecommunication service, ancillary service, Internet access, or audio or video 
166.15 	programming service, and the seller has maintained books and records identifying through 
166.16 	reasonable and verifiable standards the portions of the price that are attributable to the 
166.17 	distinct and separately identifiable products, then the products are not considered part of a 
166.18 	bundled transaction. For purposes of this paragraph: 
166.19 	(1) the books and records maintained by the seller must be maintained in the regular 
166.20 	course of business, and do not include books and records created and maintained by the 
166.21 	seller primarily for tax purposes; 
166.22 	(2) books and records maintained in the regular course of business include, but are 
166.23 	not limited to, financial statements, general ledgers, invoicing and billing systems and 
166.24 	reports, and reports for regulatory tariffs and other regulatory matters; and 
166.25 	(3) books and records are maintained primarily for tax purposes when the books 
166.26 	and records identify taxable and nontaxable portions of the price, but the seller maintains 
166.27 	other books and records that identify different prices attributable to the distinct products 
166.28 	included in the same bundled transaction. 
166.29 	(n) A sale of specified digital products or other digital products to an end user with 
166.30 	or without rights of permanent use and regardless of whether rights of use are conditioned 
166.31 	upon continued payment by the purchaser. When a digital code has been purchased that 
166.32 	relates to specified digital products or other digital products, the subsequent receipt of or 
166.33 	access to the related specified digital products or other digital products is not a retail sale.

166.34 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
166.35 	June 30, 2009.

167.1 	Sec. 9. Minnesota Statutes 2008, section 297A.61, subdivision 5, is amended to read:
167.2 		Subd. 5.Storage. "Storage" includes keeping or retaining tangible personal 
167.3 	property, specified digital products, or other digital products in Minnesota for any purpose 
167.4 	except sale in the regular course of business.

167.5 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
167.6 	June 30, 2009.

167.7 	Sec. 10. Minnesota Statutes 2008, section 297A.61, subdivision 6, is amended to read:
167.8 		Subd. 6.Use. (a) "Use" includes the exercise of a right or power incident to the 
167.9 	ownership of any interest in tangible personal property,  specified digital products, other 
167.10 	digital products, or services, purchased from a retailer, other than the sale of that property 
167.11 	in the regular course of business.
167.12 	(b) Use includes the consumption of printed materials in the creation of nontaxable 
167.13 	advertising that is distributed, either directly or indirectly, within Minnesota.

167.14 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
167.15 	June 30, 2009.

167.16 	Sec. 11. Minnesota Statutes 2008, section 297A.61, subdivision 10, is amended to read:
167.17 		Subd. 10. Tangible personal property. (a) "Tangible personal property" means 
167.18 	personal property that can be seen, weighed, measured, felt, or touched, or that is in any 
167.19 	other manner perceptible to the senses. "Tangible personal property" includes, but is not 
167.20 	limited to, electricity, water, gas, steam, and prewritten computer software. 
167.21 	(b) Tangible personal property does not include: 
167.22 	(1) large ponderous machinery and equipment used in a business or production 
167.23 	activity which at common law would be considered to be real property; 
167.24 	(2) property which is subject to an ad valorem property tax; 
167.25 	(3) property described in section 272.02, subdivision 9, clauses (a) to (d); and 
167.26 	(4) property described in section 272.03, subdivision 2, clauses (3) and (5); and
167.27 	(5) specified digital products, or other digital products transferred electronically, 
167.28 	except prewritten computer software delivered electronically is tangible personal property. 

167.29 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
167.30 	June 30, 2009.

167.31 	Sec. 12. Minnesota Statutes 2008, section 297A.61, subdivision 14a, is amended to 
167.32 	read:
168.1 		Subd. 14a.Lease or rental. (a) "Lease or rental" means any transfer of possession 
168.2 	or control of tangible personal property, specified digital products, or other digital 
168.3 	products for a fixed or indeterminate term for consideration. A lease or rental may include 
168.4 	future options to purchase or extend.
168.5 	(b) Lease or rental does not include:
168.6 	(1) a transfer of possession or control of property under a security agreement or 
168.7 	deferred payment plan that requires the transfer of title upon completion of the required 
168.8 	payments;
168.9 	(2) a transfer of possession or control of property under an agreement that requires 
168.10 	the transfer of title upon completion of required payments and payment of an option price 
168.11 	does not exceed the greater of $100 or one percent of the total required payments; or
168.12 	(3) providing tangible personal property along with an operator for a fixed or 
168.13 	indeterminate period of time. A condition of this exclusion is that the operator is necessary 
168.14 	for the equipment to perform as designed. For the purpose of this subdivision, an operator 
168.15 	must do more than maintain, inspect, or set up the tangible personal property.
168.16 	(c) Lease or rental does include agreements covering motor vehicles and trailers 
168.17 	where the amount of consideration may be increased or decreased by reference to the 
168.18 	amount realized upon sale or disposition of the property as defined in United States Code, 
168.19 	title 26, section 7701(h)(l).
168.20 	(d) This definition must be used for sales and use tax purposes regardless if a 
168.21 	transaction is characterized as a lease or rental under generally accepted accounting 
168.22 	principles, the Internal Revenue Code, chapter 336, or other provisions of federal, state, or 
168.23 	local law.

168.24 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
168.25 	June 30, 2009.

168.26 	Sec. 13. Minnesota Statutes 2008, section 297A.61, subdivision 17a, is amended to 
168.27 	read:
168.28 		Subd. 17a.Delivered electronically. "Delivered electronically" means delivered to 
168.29 	the purchaser by means other than tangible storage media; and unless the context indicates 
168.30 	otherwise, applies to the delivery of computer software. Computer software is considered 
168.31 	"delivered electronically" to a purchaser if the purchaser has access to the product online.

168.32 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
168.33 	June 30, 2009.

169.1 	Sec. 14. Minnesota Statutes 2008, section 297A.61, subdivision 21, is amended to read:
169.2 		Subd. 21.Normal course of business. "Normal course of business" means 
169.3 	activities that demonstrate a commercial continuity or consistency of making sales or 
169.4 	performing services for the purposes of attaining profit or producing income. Factors that 
169.5 	indicate that a person is acting in the normal course of business include:
169.6 	(1) systematic solicitation of sales through advertising media;
169.7 	(2) entering into contracts to perform services or provide tangible personal property, 
169.8 	specified digital products, or other digital products;
169.9 	(3) maintaining a place of business; or
169.10 	(4) use of exemption certificates to purchase items exempt from the sales tax.

169.11 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
169.12 	June 30, 2009.

169.13 	Sec. 15. Minnesota Statutes 2008, section 297A.61, subdivision 38, is amended to read:
169.14 		Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale 
169.15 	of two or more products when the products are otherwise distinct and identifiable, and 
169.16 	the products are sold for one nonitemized price. As used in this subdivision, "product" 
169.17 	includes tangible personal property, services, intangibles, and digital goods, including 
169.18 	specified digital products, or other digital products,  but does not include real property or 
169.19 	services to real property. A bundled transaction does not include the sale of any products 
169.20 	in which the sales price varies, or is negotiable, based on the selection by the purchaser of 
169.21 	the products included in the transaction. 
169.22 	(b) For purposes of this subdivision, "distinct and identifiable" products does not 
169.23 	include: 
169.24 	(1) packaging and other materials, such as containers, boxes, sacks, bags, and 
169.25 	bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the 
169.26 	products and are incidental or immaterial to the retail sale. Examples of packaging that are 
169.27 	incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags, 
169.28 	and express delivery envelopes and boxes; 
169.29 	(2) a promotional product provided free of charge with the required purchase of 
169.30 	another product. A promotional product is provided free of charge if the sales price of 
169.31 	another product, which is required to be purchased in order to receive the promotional 
169.32 	product, does not vary depending on the inclusion of the promotional product; and 
169.33 	(3) items included in the definition of sales price. 
169.34 	(c) For purposes of this subdivision, the term "one nonitemized price" does not 
169.35 	include a price that is separately identified by product on binding sales or other supporting 
170.1 	sales-related documentation made available to the customer in paper or electronic form 
170.2 	including but not limited to an invoice, bill of sale, receipt, contract, service agreement, 
170.3 	lease agreement, periodic notice of rates and services, rate card, or price list. 
170.4 	(d) A transaction that otherwise meets the definition of a bundled transaction is 
170.5 	not a bundled transaction if it is: 
170.6 	(1) the retail sale of tangible personal property and a service and the tangible 
170.7 	personal property is essential to the use of the service, and is provided exclusively in 
170.8 	connection with the service, and the true object of the transaction is the service; 
170.9 	(2) the retail sale of services if one service is provided that is essential to the use or 
170.10 	receipt of a second service and the first service is provided exclusively in connection with 
170.11 	the second service and the true object of the transaction is the second service; 
170.12 	(3) a transaction that includes taxable products and nontaxable products and the 
170.13 	purchase price or sales price of the taxable products is de minimis; or 
170.14 	(4) the retail sale of exempt tangible personal property and taxable tangible personal 
170.15 	property if: 
170.16 	(i) the transaction includes food and food ingredients, drugs, durable medical 
170.17 	equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices, 
170.18 	or medical supplies; and 
170.19 	(ii) the seller's purchase price or sales price of the taxable tangible personal property 
170.20 	is 50 percent or less of the total purchase price or sales price of the bundled tangible 
170.21 	personal property. Sellers must not use a combination of the purchase price and sales 
170.22 	price of the tangible personal property when making the 50 percent determination for 
170.23 	a transaction. 
170.24 	(e) For purposes of this subdivision, "purchase price" means the measure subject to 
170.25 	use tax on purchases made by the seller, and "de minimis" means that the seller's purchase 
170.26 	price or sales price of the taxable products is ten percent or less of the total purchase 
170.27 	price or sales price of the bundled products. Sellers shall use either the purchase price 
170.28 	or the sales price of the products to determine if the taxable products are de minimis. 
170.29 	Sellers must not use a combination of the purchase price and sales price of the products 
170.30 	to determine if the taxable products are de minimis. Sellers shall use the full term of a 
170.31 	service contract to determine if the taxable products are de minimis. 

170.32 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
170.33 	June 30, 2009.

170.34 	Sec. 16. Minnesota Statutes 2008, section 297A.61, is amended by adding a 
170.35 	subdivision to read:
171.1 		Subd. 47.Digital audio visual work. "Digital audio visual work" means a series 
171.2 	of related images, together with accompanying sounds, if any, which, when shown in 
171.3 	succession, impart an impression of motion, that are transferred electronically. Digital 
171.4 	audio visual works include such items as motion pictures, movies, musical videos, news 
171.5 	and entertainment programs, and live events. Digital audio visual works do not include 
171.6 	video greeting cards sent by electronic mail. Unless the context provides otherwise, digital 
171.7 	audio visual works include the digital code or a subscription to or access to a digital code 
171.8 	for receiving, accessing, or otherwise obtaining digital audio visual works.

171.9 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
171.10 	June 30, 2009.

171.11 	Sec. 17. Minnesota Statutes 2008, section 297A.61, is amended by adding a 
171.12 	subdivision to read:
171.13 		Subd. 48.Digital audio work. "Digital audio work" means a work that results 
171.14 	from the fixation of a series of musical, spoken, or other sounds, that are transferred 
171.15 	electronically. Digital audio works include such items as songs, music, readings of books 
171.16 	or other written materials, speeches, ring tones, or other sound recordings which may be 
171.17 	either prerecorded or live. Digital audio works do not include audio greeting cards sent 
171.18 	by electronic mail. Unless the context provides otherwise, digital audio works include 
171.19 	the digital code or a subscription to or access to a digital code for receiving, accessing, 
171.20 	or otherwise obtaining digital audio works. For purposes of this subdivision, "ring tone" 
171.21 	means a digitized sound file that is downloaded onto a device and that may be used to alert 
171.22 	the customer with respect to a communication. A ring tone does not include ring back tones 
171.23 	or other digital audio files that are not stored on the customer's communication device.

171.24 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
171.25 	June 30, 2009.

171.26 	Sec. 18. Minnesota Statutes 2008, section 297A.61, is amended by adding a 
171.27 	subdivision to read:
171.28 		Subd. 49.Digital book. "Digital book" means a work that is a literary work, other 
171.29 	than digital audio visual works or digital audio works, expressed in words, numbers, or 
171.30 	numerical symbols or indicia so long as the product is generally recognized in the ordinary 
171.31 	and usual sense as a book and is transferred electronically. It includes works of fiction, 
171.32 	nonfiction, and short stories. It does not include periodicals, magazines, newspapers, or 
171.33 	other news and information products, chat rooms, or weblogs. Unless the context provides 
172.1 	otherwise, digital books include the digital code or a subscription to or access to a digital 
172.2 	code for receiving, accessing, or otherwise obtaining digital books.

172.3 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
172.4 	June 30, 2009.

172.5 	Sec. 19. Minnesota Statutes 2008, section 297A.61, is amended by adding a 
172.6 	subdivision to read:
172.7 		Subd. 50.Digital code. "Digital code" means a code which provides a purchaser 
172.8 	with a right to obtain one or more of the specified digital products or other digital products. 
172.9 	A digital code may be transferred electronically such as through electronic e-mail, or 
172.10 	it may be transferred on a tangible medium, such as a plastic card, a piece of paper or 
172.11 	invoice, or imprinted on another product. A digital code is not a code that represents 
172.12 	stored monetary value that is deducted from a total as it is used by the purchaser and it is 
172.13 	not a code that represents a redeemable card, gift card, or gift certificate that entitles the 
172.14 	holder to select a specified digital product or other digital product of an indicated cash 
172.15 	value. The end user of the digital code is any purchaser except one who receives the 
172.16 	contractual right to redistribute the specified digital product or other digital product which 
172.17 	is the subject of the transaction.

172.18 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
172.19 	June 30, 2009.

172.20 	Sec. 20. Minnesota Statutes 2008, section 297A.61, is amended by adding a 
172.21 	subdivision to read:
172.22 		Subd. 51.Specified digital products. "Specified digital products" means 
172.23 	digital audio visual works, digital audio works, and digital books that are transferred 
172.24 	electronically to a customer.

172.25 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
172.26 	June 30, 2009.

172.27 	Sec. 21. Minnesota Statutes 2008, section 297A.61, is amended by adding a 
172.28 	subdivision to read:
172.29 		Subd. 52.Transferred electronically. "Transferred electronically" means obtained 
172.30 	by the purchaser by means other than tangible storage media and, unless the context 
172.31 	indicated otherwise, applies to the delivery of specified digital products and other digital 
172.32 	products. For purposes of this subdivision, it is not necessary that a copy of the product 
173.1 	be physically transferred to the purchaser. A product shall be considered to have been 
173.2 	transferred electronically to a purchaser if the purchaser has access to the product.

173.3 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
173.4 	June 30, 2009.

173.5 	Sec. 22. Minnesota Statutes 2008, section 297A.61, is amended by adding a 
173.6 	subdivision to read:
173.7 		Subd. 53.Other digital products. "Other digital products" means the following 
173.8 	items when transferred electronically:
173.9 	(1) greeting cards;
173.10 	(2) artwork available for reproduction or display purposes; and
173.11 	(3) video or electronic games.

173.12 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
173.13 	June 30, 2009.

173.14 	Sec. 23. Minnesota Statutes 2008, section 297A.62, is amended by adding a 
173.15 	subdivision to read:
173.16 		Subd. 1a.Constitutionally required sales tax increase. An additional sales tax 
173.17 	of 0.375 percent, as required under the Minnesota Constitution, article XI, section 15, is 
173.18 	imposed on the gross receipts from retail sales as defined in section 297A.61, subdivision 
173.19 	4, made in this state or to a destination in this state by a person who is required to have 
173.20 	or voluntarily obtains a permit under section 297A.83, subdivision 1. This additional 
173.21 	tax expires July 1, 2034.

173.22 	Sec. 24. Minnesota Statutes 2008, section 297A.63, is amended to read:
173.23 	297A.63 USE TAXES IMPOSED; RATES.
173.24 		Subdivision 1. Use of tangible personal property, specified digital products, 
173.25 	other digital products, or taxable services. (a) For the privilege of using, storing, 
173.26 	distributing, or consuming in Minnesota tangible personal property, specified digital 
173.27 	products, other digital products, or taxable services purchased for use, storage, distribution, 
173.28 	or consumption in this state, a use tax is imposed on a person in Minnesota. The tax is 
173.29 	imposed on the purchase price of retail sales of the tangible personal property, specified 
173.30 	digital products, other digital products, or taxable services at the rate of tax imposed under 
173.31 	section 297A.62. A person that purchases property from a Minnesota retailer and returns 
173.32 	the tangible personal property, specified digital products, or other digital products, to a 
174.1 	point within Minnesota, except in the course of interstate commerce, after it was delivered 
174.2 	outside of Minnesota, is subject to the use tax. 
174.3 	(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62 
174.4 	was paid on the sales price of the tangible personal property or taxable services. 
174.5 	(c) No tax is imposed under paragraph (a) if the purchase meets the requirements for 
174.6 	exemption under section 297A.67, subdivision 21. 
174.7 	(d) When a transaction otherwise meets the definition of a bundled transaction, but 
174.8 	is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and 
174.9 	the seller's purchase price of the taxable product or taxable tangible personal property is 
174.10 	equal to or greater than $100, then use tax is imposed on the purchase price of the taxable 
174.11 	product or taxable personal property. For purposes of this paragraph, "purchase price" 
174.12 	means the measure subject to use tax on purchases made by the seller. 
174.13 		Subd. 2.Use of tangible personal property, specified digital products, other 
174.14 	digital products, made from materials. (a) A use tax is imposed on a person who 
174.15 	manufactures, fabricates, or assembles tangible personal property, specified digital 
174.16 	products, or other digital products, from materials, either within or outside this state and 
174.17 	who uses, stores, distributes, or consumes the tangible personal property, specified digital 
174.18 	products, or other digital products, in Minnesota. The tax is imposed on the purchase price 
174.19 	of retail sales of the materials contained in the tangible personal property, specified digital 
174.20 	products, or other digital products, at the rate of tax imposed under section 297A.62. 
174.21 	(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62 was 
174.22 	paid on the sales price of materials contained in the tangible personal property, specified 
174.23 	digital products, or other digital products. 

174.24 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
174.25 	June 30, 2009.

174.26 	Sec. 25. Minnesota Statutes 2008, section 297A.64, subdivision 2, is amended to read:
174.27 		Subd. 2. Fee imposed. (a) A fee equal to five percent of the sales price is imposed 
174.28 	on leases or rentals of vehicles subject to the tax under subdivision 1. The lessor on the 
174.29 	invoice to the customer may designate the fee as "a fee imposed by the State of Minnesota 
174.30 	for the registration of rental cars." 
174.31 	(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit 
174.32 	corporation or similar entity, consisting of individual or group members who pay the 
174.33 	organization for the use of a motor vehicle, if the organization:
174.34 	(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1 
174.35 	that are available to its members for use, priced on the basis of intervals of one hour or less;
175.1 	(2) parks its vehicles at unstaffed, self-service locations that are accessible at any 
175.2 	time of the day;
175.3 	(3) maintains its vehicles, insures its vehicles on behalf of its members, and 
175.4 	purchases fuel for its fleet; and
175.5 	(4) does not charge usage rates that decline on a per unit basis, whether specified 
175.6 	based on distance or time.

175.7 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to 
175.8 	registrations made or renewed on or after that date.

175.9 	Sec. 26. Minnesota Statutes 2008, section 297A.66, subdivision 1, is amended to read:
175.10 		Subdivision 1.Definitions. (a) To the extent allowed by the United States 
175.11 	Constitution and the laws of the United States, "retailer maintaining a place of business in 
175.12 	this state," or a similar term, means a retailer:
175.13 	(1) having or maintaining within this state, directly or by a subsidiary or an affiliate, 
175.14 	an office, place of distribution, sales or sample room or place, warehouse, or other place 
175.15 	of business; or
175.16 	(2) having a representative, including, but not limited to, an affiliate, agent, 
175.17 	salesperson, canvasser, or solicitor operating in this state under the authority of the retailer 
175.18 	or its subsidiary, for any purpose, including the repairing, selling, delivering, installing, or 
175.19 	soliciting of orders for the retailer's goods or services, or the leasing of tangible personal 
175.20 	property, specified digital products, or other digital products, located in this state, whether 
175.21 	the place of business or agent, representative, affiliate, salesperson, canvasser, or solicitor 
175.22 	is located in the state permanently or temporarily, or whether or not the retailer, subsidiary, 
175.23 	or affiliate is authorized to do business in this state.
175.24 	(b) "Destination of a sale" means the location to which the retailer makes delivery of 
175.25 	the property sold, or causes the property to be delivered, to the purchaser of the property, 
175.26 	or to the agent or designee of the purchaser. The delivery may be made by any means, 
175.27 	including the United States Postal Service or a for-hire carrier.

175.28 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
175.29 	June 30, 2009.

175.30 	Sec. 27. Minnesota Statutes 2008, section 297A.66, is amended by adding a 
175.31 	subdivision to read:
176.1 		Subd. 4a.Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a), 
176.2 	means a person, whether an independent contractor or other representative, who directly 
176.3 	or indirectly solicits business for the retailer. 
176.4 	(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement 
176.5 	with a resident under which the resident, for a commission or other consideration, directly 
176.6 	or indirectly refers potential customers, whether by a link on an Internet Web site, or 
176.7 	otherwise, to the seller. This paragraph only applies if the total gross receipts from 
176.8 	sales to customers located in the state who were referred to the retailer by all residents 
176.9 	with this type of agreement with the retailer is at least $10,000 in the 12-month period 
176.10 	ending on the last day of the most recent calendar quarter before the calendar quarter in 
176.11 	which the sale is made.
176.12 	(c) The presumption under paragraph (b) may be rebutted by proof that the resident 
176.13 	with whom the seller has an agreement did not engage in any solicitation in the state 
176.14 	on behalf of the retailer that would satisfy the nexus requirement of the United States 
176.15 	Constitution during the 12-month period in question. Nothing in this section shall be 
176.16 	construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other 
176.17 	representative for purposes of subdivision 1, paragraph (a).
176.18 	(d) For purposes of this paragraph, "resident" includes an individual who is a 
176.19 	resident of this state, as defined in section 290.01, or a business that owns tangible 
176.20 	personal property located in this state or has one or more employees providing services 
176.21 	for it in this state.

176.22 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
176.23 	June 30, 2009.

176.24 	Sec. 28. Minnesota Statutes 2008, section 297A.67, subdivision 15, is amended to read:
176.25 		Subd. 15.Residential heating fuels. Residential heating fuels are exempt as 
176.26 	follows:
176.27 	(1) all fuel oil, coal, wood, steam, hot water, propane gas, and L.P. gas sold to 
176.28 	residential customers for residential use;
176.29 	(2) for the period encompassing the billing months of November, December, 
176.30 	January, February, March, and April, the first 850 hundred cubic feet per dwelling unit of 
176.31 	natural gas sold for residential use to customers who are metered and billed as residential 
176.32 	users and who use natural gas for their primary source of residential heat; and
176.33 	(3) for the period encompassing the billing months of November, December, 
176.34 	January, February, March, and April, the first 5,750 kilowatt-hours per dwelling unit of 
177.1 	electricity sold for residential use to customers who are metered and billed as residential 
177.2 	users and who use electricity for their primary source of residential heat.

177.3 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
177.4 	June 30, 2009.

177.5 	Sec. 29. Minnesota Statutes 2008, section 297A.67, subdivision 23, is amended to read:
177.6 		Subd. 23.Occasional sales. Isolated and occasional sales in Minnesota not made 
177.7 	in the normal course of business of selling that kind of property or service are exempt. 
177.8 	The storage, use, or consumption of property or services acquired as a result of such a 
177.9 	sale is exempt. This exemption does not apply to sales of tangible personal property, 
177.10 	specified digital products, or other digital products, primarily used in a trade or business, 
177.11 	a snowmobile or all-terrain vehicle licensed under chapter 84, or to watercraft licensed 
177.12 	under chapter 86B.

177.13 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
177.14 	June 30, 2009.

177.15 	Sec. 30. Minnesota Statutes 2008, section 297A.815, subdivision 3, is amended to read:
177.16 		Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this 
177.17 	subdivision, "net revenue revenues" means an amount equal to:
177.18 	(1) the revenues, including interest and penalties, collected under this section, during 
177.19 	the fiscal year; less.
177.20 	(2) the estimated reduction in individual income tax receipts and the estimated 
177.21 	amount of refunds paid out under section 290.06, subdivision 34, for the fiscal year.
177.22 	(b) On or before June 30 of each fiscal year, the commissioner of revenue shall 
177.23 	estimate the amount of the revenues and subtraction under paragraph (a) for the current 
177.24 	fiscal year. 
177.25 	(c) On or after July 1 of the subsequent fiscal year, the commissioner of finance shall 
177.26 	transfer the net revenue as estimated in paragraph (b) from the general fund, as follows: 
177.27 	(b) The commissioner of revenue shall estimate the revenues for each fiscal year and 
177.28 	transfer one-quarter of the estimated amount from the general fund on January 1, April 1, 
177.29 	July 1, and October 1, allocated as follows:
177.30 	(1) 50 percent to the greater Minnesota transit account; and 
177.31 	(2) 50 percent to the county state-aid highway fund. Notwithstanding any other law 
177.32 	to the contrary, the commissioner of transportation shall allocate the funds transferred 
177.33 	under this clause to the counties in the metropolitan area, as defined in section 473.121, 
178.1 	subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall 
178.2 	receive of such amount the percentage that its population, as defined in section 477A.011, 
178.3 	subdivision 3, estimated or established by July 15 of the year prior to the current calendar 
178.4 	year, bears to the total population of the counties receiving funds under this clause. 
178.5 	(d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1),
178.6 	revenues must be calculated using the following percentages of the total revenues: 
178.7 	(1) for fiscal year 2010, 83.75 percent; and 
178.8 	(2) for fiscal year 2011, 93.75 percent.

178.9 	Sec. 31. Minnesota Statutes 2008, section 297A.83, subdivision 3, is amended to read:
178.10 		Subd. 3.Commissioner's discretion. (a) The commissioner may decline to issue a 
178.11 	permit to a retailer not maintaining a place of business in this state, or may cancel a permit 
178.12 	previously issued to the retailer, if the commissioner believes that the tax can be collected 
178.13 	more effectively from the persons using the property in this state. A refusal to issue or 
178.14 	cancellation of a permit on such grounds does not affect the retailer's right to make retail 
178.15 	sales from outside this state to destinations within this state.
178.16 	(b) If the commissioner considers it necessary for the efficient administration of the 
178.17 	tax to regard a salesperson, representative, trucker, peddler, or canvasser as the agent of 
178.18 	the dealer, distributor, supervisor, employer, or other person under whom that person 
178.19 	operates or from whom the person obtains the tangible personal property, specified digital 
178.20 	products, or other digital products, sold, whether making sales personally or in behalf of 
178.21 	that dealer, distributor, supervisor, employer, or other person, the commissioner may 
178.22 	regard the salesperson, representative, trucker, peddler, or canvasser as such agent, and 
178.23 	may regard the dealer, distributor, supervisor, employer, or other person as a retailer for 
178.24 	the purposes of collecting the tax.

178.25 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
178.26 	June 30, 2009.

178.27 	Sec. 32. Minnesota Statutes 2008, section 297A.94, is amended to read:
178.28 	297A.94 DEPOSIT OF REVENUES.
178.29 	(a) Except as provided in this section, the commissioner shall deposit the revenues, 
178.30 	including interest and penalties, derived from the taxes imposed by this chapter in the state 
178.31 	treasury and credit them to the general fund.
178.32 	(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic 
178.33 	account in the special revenue fund if:
179.1 	(1) the taxes are derived from sales and use of property and services purchased for 
179.2 	the construction and operation of an agricultural resource project; and
179.3 	(2) the purchase was made on or after the date on which a conditional commitment 
179.4 	was made for a loan guaranty for the project under section 41A.04, subdivision 3.
179.5 	The commissioner of finance shall certify to the commissioner the date on which the 
179.6 	project received the conditional commitment. The amount deposited in the loan guaranty 
179.7 	account must be reduced by any refunds and by the costs incurred by the Department of 
179.8 	Revenue to administer and enforce the assessment and collection of the taxes.
179.9 	(c) The commissioner shall deposit the revenues, including interest and penalties, 
179.10 	derived from the taxes imposed on sales and purchases included in section 297A.61, 
179.11 	subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them 
179.12 	as follows: 
179.13 	(1) first to the general obligation special tax bond debt service account in each fiscal 
179.14 	year the amount required by section 16A.661, subdivision 3, paragraph (b); and
179.15 	(2) after the requirements of clause (1) have been met, the balance to the general 
179.16 	fund.
179.17 	(d) The commissioner shall deposit the revenues, including interest and penalties, 
179.18 	collected under section 297A.64, subdivision 5, in the state treasury and credit them to the 
179.19 	general fund. By July 15 of each year the commissioner shall transfer to the highway user 
179.20 	tax distribution fund an amount equal to the excess fees collected under section 297A.64, 
179.21 	subdivision 5, for the previous calendar year.
179.22 	(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and 
179.23 	for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and 
179.24 	penalties, transmitted to the commissioner under section 297A.65, must be deposited by 
179.25 	the commissioner in the state treasury as follows:
179.26 	(1) 50 percent of the receipts must be deposited in the heritage enhancement account 
179.27 	in the game and fish fund, and may be spent only on activities that improve, enhance, or 
179.28 	protect fish and wildlife resources, including conservation, restoration, and enhancement 
179.29 	of land, water, and other natural resources of the state;
179.30 	(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and 
179.31 	may be spent only for state parks and trails;
179.32 	(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and 
179.33 	may be spent only on metropolitan park and trail grants;
179.34 	(4) three percent of the receipts must be deposited in the natural resources fund, and 
179.35 	may be spent only on local trail grants; and
180.1 	(5) two percent of the receipts must be deposited in the natural resources fund, 
180.2 	and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and 
180.3 	Conservatory, and the Duluth Zoo.
180.4 	(f) The revenue dedicated under paragraph (e) may not be used as a substitute 
180.5 	for traditional sources of funding for the purposes specified, but the dedicated revenue 
180.6 	shall supplement traditional sources of funding for those purposes. Land acquired with 
180.7 	money deposited in the game and fish fund under paragraph (e) must be open to public 
180.8 	hunting and fishing during the open season, except that in aquatic management areas or 
180.9 	on lands where angling easements have been acquired, fishing may be prohibited during 
180.10 	certain times of the year and hunting may be prohibited. At least 87 percent of the money 
180.11 	deposited in the game and fish fund for improvement, enhancement, or protection of fish 
180.12 	and wildlife resources under paragraph (e) must be allocated for field operations.
180.13 	(g) The revenues deposited under paragraphs (a) to (f) do not include the revenues, 
180.14 	including interest and penalties, generated by the sales tax imposed under section 
180.15 	297A.62, subdivision 1a, which must be deposited as provided under the Minnesota 
180.16 	Constitution, article XI, section 15.

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

180.18 	Sec. 33. Minnesota Statutes 2008, section 297A.99, subdivision 6, is amended to read:
180.19 		Subd. 6.Use tax. A compensating use tax applies, at the same rate as the sales tax, 
180.20 	on the use, storage, distribution, or consumption of tangible personal property, specified 
180.21 	digital products, other digital products, or taxable services.

180.22 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
180.23 	June 30, 2009.

180.24 	Sec. 34. Minnesota Statutes 2008, section 297B.02, subdivision 1, is amended to read:
180.25 		Subdivision 1.Rate. There is imposed an excise tax at the rate provided in chapter 
180.26 	297A of 6.5 percent on the purchase price of any motor vehicle purchased or acquired, 
180.27 	either in or outside of the state of Minnesota, which is required to be registered under 
180.28 	the laws of this state.
180.29 	The excise tax is also imposed on the purchase price of motor vehicles purchased 
180.30 	or acquired on Indian reservations when the tribal council has entered into a sales tax on 
180.31 	motor vehicles refund agreement with the state of Minnesota.

180.32 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
180.33 	June 30, 2009.

181.1 	Sec. 35. [471.691] TEMPORARY AUTHORITY TO USE LODGING TAX 
181.2 	REVENUES.
181.3 	(a) A city may use or spend the proceeds of a tax or fee on lodging for any permitted 
181.4 	municipal purpose, but only if the lodging is provided at a facility located within 
181.5 	boundaries of the city. For purposes of this section, "lodging" means the furnishing for 
181.6 	consideration of lodging at a hotel, motel, rooming house, tourist court, or resort, other 
181.7 	than the renting or leasing of lodging for a continuous period of 30 days or more. 
181.8 	(b) This section preempts the provisions of section 469.190, subdivision 3, or any 
181.9 	other law, including special laws, ordinances, and charter provisions, that dedicate or limit 
181.10 	the purposes for which the proceeds or revenues derived from a tax or fee imposed on 
181.11 	lodging may be used or spent. It does not apply to:
181.12 	(1) lodging tax proceeds that are pledged to pay bonds or other debt; or
181.13 	(2) any of the proceeds of a general sales or use tax.
181.14 	(c) This section expires on December 31, 2012.

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

181.16 	Sec. 36. Laws 1986, chapter 396, section 4, subdivision 3, is amended to read:
181.17 		Subd. 3.Use of property. Revenues received from the tax may only be used:
181.18 	(1) to pay costs of collection;
181.19 	(2) to pay or secure the payment of any principal of, premium or interest on bonds 
181.20 	issued in accordance with this act;
181.21 	(3) to pay costs to acquire, design, equip, construct, improve, maintain, operate, 
181.22 	administer, or promote the convention center or related facilities, including financing 
181.23 	costs related to them;
181.24 	(4) to pay reasonable and appropriate costs determined by the city to replace housing 
181.25 	removed from the site; and
181.26 	(5) to maintain reserves for the foregoing purposes deemed reasonable and 
181.27 	appropriate by the city.; and
181.28 	(6) to fund projects under subdivision 4.
181.29 	In the event of any amendment to chapter 297A enacted subsequent to the effective date 
181.30 	of this act which exempts sales or uses which were taxable under chapter 297A on the 
181.31 	effective date of this act, the city may by ordinance extend the tax authorized hereby to 
181.32 	any such sales or uses provided that the city council shall have determined that such 
181.33 	extension is necessary to provide revenues for the uses to which taxes may be applied 
181.34 	under this section and further provided that, in the estimation of the city council, the 
182.1 	aggregate annual collections following such extension will not exceed the aggregate 
182.2 	annual collections which would have been generated if chapter 297A, as in effect on the 
182.3 	effective date of this act, were then in effect. Any revenue bonds issued in accordance 
182.4 	with this act may, with the consent of the city council, contain a covenant that the tax will 
182.5 	be so extended to the extent necessary to pay principal and interest on the bonds when due.
182.6 	Money for replacement housing shall be made available by the city only for new 
182.7 	construction, conversion of nonresidential buildings, and for rehabilitation of vacant 
182.8 	residential structures, only if all of the units in the newly constructed building, converted 
182.9 	nonresidential building, or rehabilitated residential structure are to be used for replacement 
182.10 	housing.

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

182.12 	Sec. 37. Laws 1986, chapter 396, section 4, is amended by adding a subdivision to read:
182.13 		Subd. 4.Minneapolis downtown and neighborhood projects. To the extent that 
182.14 	revenues from the tax authorized in subdivision 1 exceeds the amount needed to fund the 
182.15 	purposes in subdivision 3, the city may use the excess revenue in any year to fund capital 
182.16 	projects to further residential, cultural, commercial, and economic development in both 
182.17 	downtown Minneapolis and the Minneapolis neighborhoods.

182.18 	EFFECTIVE DATE. This section is effective upon compliance of the governing 
182.19 	body of the city of Minneapolis with Minnesota Statutes, section 645.021, subdivisions 
182.20 	2 and 3.

182.21 	Sec. 38. Laws 1986, chapter 400, section 44, as amended by Laws 1995, chapter 264, 
182.22 	article 2, section 39, is amended to read:
182.23 	Sec. 44. DOWNTOWN TAXING AREA.
 182.24 	If a bill is enacted into law in the 1986 legislative session which authorizes the city 
182.25 	of Minneapolis to issue bonds and expend certain funds including taxes to finance the 
182.26 	acquisition and betterment of a convention center and related facilities, which authorizes 
182.27 	certain taxes to be levied in a downtown taxing area, then, notwithstanding the provisions 
182.28 	of that law "downtown taxing area" shall mean the geographic area bounded by the 
182.29 	portion of the Mississippi River between I-35W and Washington Avenue, the portion 
182.30 	of Washington Avenue between the river and I-35W, the portion of I-35W between 
182.31 	Washington Avenue and 8th Street South, the portion of 8th Street South between I-35W 
182.32 	and Portland Avenue South, the portion of Portland Avenue South between 8th Street 
182.33 	South and I-94, the portion of I-94 from the intersection of Portland Avenue South to 
183.1 	the intersection of I-94 and the Burlington Northern Railroad tracks, the portion of the 
183.2 	Burlington Northern Railroad tracks from I-94 to Main Street and including Nicollet 
183.3 	Island, and the portion of Main Street to Hennepin Avenue and the portion of Hennepin 
183.4 	Avenue between Main Street and 2nd Street S.E., and the portion of 2nd Street S.E. 
183.5 	between Main Street and Bank Street, and the portion of Bank Street between 2nd Street 
183.6 	S.E. and University Avenue S.E., and the portion of University Avenue S.E. between Bank 
183.7 	Street and I-35W, and by I-35W from University Avenue S.E., to the river. The downtown 
183.8 	taxing area excludes the area bounded on the south and west by Oak Grove Street, on the 
183.9 	east by Spruce Place, and on the north by West 15th Street. The downtown taxing area 
183.10 	also excludes any property located in a zoned area that is contained in chapter 546 of the 
183.11 	Minneapolis zone code of ordinances on which a restaurant or liquor establishment is 
183.12 	operated.

183.13 	EFFECTIVE DATE. This section is effective for sales made after July 31, 2012, 
183.14 	provided that the proceeds of the tax collected between July 1, 2009, and July 31, 2012, 
183.15 	by a restaurant or liquor establishment that is excluded from the downtown taxing area 
183.16 	by this section, when collected by the commissioner of revenue, shall be deposited in the 
183.17 	general fund of the state treasury.

183.18 	Sec. 39. Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended 
183.19 	by Laws 1998, chapter 389, article 8, section 28, and Laws 2008, chapter 366, article 
183.20 	7, section 9, is amended to read:
183.21 		Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions 
183.22 	1 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or 
183.23 	a portion of the expenses of constructing and improving facilities as part of an urban 
183.24 	revitalization project in downtown Mankato known as Riverfront 2000. Authorized 
183.25 	expenses include, but are not limited to, acquiring property and paying relocation expenses 
183.26 	related to the development of Riverfront 2000 and related facilities, and securing or paying 
183.27 	debt service on bonds or other obligations issued to finance the construction of Riverfront 
183.28 	2000 and related facilities. For purposes of this section, "Riverfront 2000 and related 
183.29 	facilities" means a civic-convention center, an arena, a riverfront park, a technology center 
183.30 	and related educational facilities, and all publicly owned real or personal property that 
183.31 	the governing body of the city determines will be necessary to facilitate the use of these 
183.32 	facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and 
183.33 	landscaping. It also includes the performing arts theatre and the Southern Minnesota 
183.34 	Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by 
183.35 	Minnesota State University, Mankato.

184.1 	EFFECTIVE DATE. This section is effective the day after the governing body of 
184.2 	the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section 
184.3 	645.021, subdivisions 2 and 3.

184.4 	Sec. 40. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by 
184.5 	Laws 1997, chapter 231, article 7, section 40, and Laws 1998, chapter 389, article 8, 
184.6 	section 30, and Laws 2003, First Special Session chapter 21, article 8, section 13, and 
184.7 	Laws 2005, First Special Session chapter 3, article 5, section 26, is amended to read:
184.8 		Subd. 2.Use of revenues. Revenues received from the tax authorized by 
184.9 	subdivision 1 may only be used by the city to pay the cost of collecting the tax, and to pay 
184.10 	for the following projects or to secure or pay any principal, premium, or interest on bonds 
184.11 	issued in accordance with subdivision 3 for the following projects.
184.12 	(a) To pay all or a portion of the capital expenses of construction, equipment and 
184.13 	acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex, 
184.14 	including the demolition of the existing arena and the construction and equipping of a 
184.15 	new arena.
184.16 	(b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be 
184.17 	spent for:
184.18 	(1) capital projects to further residential, cultural, commercial, and economic 
184.19 	development in both downtown St. Paul and St. Paul neighborhoods; and
184.20 	(2) capital and operating expenses of cultural organizations in the city, provided 
184.21 	that the amount spent under this clause must equal ten percent of the total amount spent 
184.22 	under this paragraph in any year.
184.23 	(c) The amount apportioned under paragraph (b) shall be no less than 60 percent 
184.24 	of the revenues derived from the tax each year, except to the extent that a portion of that 
184.25 	amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a) 
184.26 	prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1, 
184.27 	1998, but only if the city council determines that 40 percent of the revenues derived from 
184.28 	the tax together with other revenues pledged to the payment of the bonds, including the 
184.29 	proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
184.30 	(d) If in any year more than 40 percent of the revenue derived from the tax authorized 
184.31 	by subdivision 1 is used to pay debt service on the bonds issued for the purposes of 
184.32 	paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment 
184.33 	that exceeds 40 percent of the revenue must be determined for that year. In any year when 
184.34 	40 percent of the revenue produced by the sales tax exceeds the amount required to pay 
184.35 	debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the 
185.1 	amount of the excess must be made available for capital projects to further residential, 
185.2 	cultural, commercial, and economic development in the neighborhoods and downtown 
185.3 	until the cumulative amounts determined for all years under the preceding sentence have 
185.4 	been made available under this sentence. The amount made available as reimbursement in 
185.5 	the preceding sentence is not included in the 60 percent determined under paragraph (c).
185.6 	(e) In each of calendar years 2006, 2007, 2008, and 2009 to 2014, revenue not to 
185.7 	exceed $3,500,000 may be used to pay the principal of bonds issued for capital projects of 
185.8 	the city. After December 31, 2009 2014, revenue from the tax imposed under subdivision 
185.9 	1 may not be used for this purpose.
185.10 	(f) By January 15 of each year, the mayor and the city council must report to the 
185.11 	legislature on the use of sales tax revenues during the preceding one-year period.

185.12 	EFFECTIVE DATE. This section is effective the day after the governing body of 
185.13 	the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section 
185.14 	645.021, subdivisions 2 and 3.

185.15 	Sec. 41. Laws 1993, chapter 375, article 9, section 46, is amended by adding a 
185.16 	subdivision to read:
185.17 		Subd. 2a.Unexpended funds and interest. Any interest from loan repayments 
185.18 	or returned funds from revenues apportioned under subdivision 2, paragraph (b), clause 
185.19 	(1), must be made available only for projects qualifying under subdivision 2, paragraph 
185.20 	(b), clause (1).

185.21 	EFFECTIVE DATE. This section is effective the day after the governing body of 
185.22 	the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section 
185.23 	645.021, subdivisions 2 and 3.

185.24 	Sec. 42. Laws 1996, chapter 471, article 2, section 30, is amended to read:
185.25 	Sec. 30. CITY OF LITTLE FALLS; TAX AUTHORIZED.
 185.26 		Subdivision 1.Sales of food; tax. The city of Little Falls may by ordinance impose 
185.27 	a tax of one-half percent on the gross receipts from the retail sale of food and nonalcoholic 
185.28 	beverages sold by the operator of a restaurant or place of refreshment within the city. The 
185.29 	tax imposed may be effective at any time after July 1, 1996.
185.30 		Subd. 1a.Sale of alcoholic beverages. The city of Little Falls may also by 
185.31 	ordinance impose the tax in subdivision 1 on the sales of alcoholic beverages sold by the 
185.32 	operator of a restaurant or place of refreshment in the city. Notwithstanding subdivision 
186.1 	5, and regardless of when the city imposes the tax under this subdivision, this tax will 
186.2 	expire when the tax in subdivision 1 expires.
186.3 		Subd. 2.Definitions. For purposes of this section:
186.4 	(1) "restaurant" means every building or other structure or enclosure, or any part 
186.5 	thereof and all buildings in connection, kept, used or maintained as, or held out to the 
186.6 	public to be an enclosure where meals or lunches are served or prepared for service 
186.7 	elsewhere, except schools;
186.8 	(2) "place of refreshment" means every building, structure, vehicle, sidewalk cart or 
186.9 	any part thereof, used as, maintained as, or advertised as, or held out to be a place where 
186.10 	confectionery, ice cream, or drinks of various kinds are made, sold, or served at retail, 
186.11 	excepting schools and school sponsored events; and 
186.12 	(3) "operator" means the person who is the proprietor of the restaurant, or place of 
186.13 	refreshment, whether in the capacity of owner, lessee, subleases, licensee, or an other 
186.14 	capacity.
186.15 		Subd. 3.Use of proceeds. The ordinance adopted by the city shall provide for 
186.16 	distribution of the proceeds of the tax. The proceeds of the tax must be used for tourism 
186.17 	purposes, including operating and maintaining the activities and programs of the tourism 
186.18 	and convention bureau.
186.19 		Subd. 4.Enforcement, collection, and administration of taxes. The tax imposed 
186.20 	under this section shall be enforced, administered, and collected by the city of Little Falls 
186.21 	provided that the city may contract with the commissioner of revenue to perform audits of 
186.22 	the tax on behalf of the city. The commissioner shall charge the city an amount that equals 
186.23 	the direct and indirect costs incurred by the department that are necessary to audit the tax.
186.24 		Subd. 5.Expiration of taxing authority. The tax imposed under this section shall 
186.25 	expire 15 subdivision 1 expires 30 years after it first becomes effective.
186.26 		Subd. 6.Effective date. This section is effective the day following compliance by 
186.27 	the governing body of the city of Little Falls with Minnesota Statutes, section 645.021, 
186.28 	subdivision 3.

186.29 	EFFECTIVE DATE. This section is effective the day following compliance by 
186.30 	the governing body of the city of Little Falls with Minnesota Statutes, section 645.021, 
186.31 	subdivisions 2 and 3.

186.32 	Sec. 43. Laws 1998, chapter 389, article 8, section 37, subdivision 1, is amended to 
186.33 	read:
186.34 		Subdivision 1.Requirement. Expenditures of revenues from the sales tax imposed 
186.35 	by the city of St. Paul that are dedicated to neighborhood investments may be made only 
187.1 	after review of the proposals for expenditures by the citizen review panel described in this 
187.2 	section. The panel must ensure that the application process for all proposals is open, fair, 
187.3 	and competitive. All proposals must be reviewed by the panel prior to presentation of the 
187.4 	proposal to the city council. The panel must evaluate the proposals and provide a report 
187.5 	to the city council that makes recommendations regarding the proposed expenditures 
187.6 	in rank order.

187.7 	EFFECTIVE DATE. This section is effective the day after the governing body of 
187.8 	the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section 
187.9 	645.021, subdivisions 2 and 3.

187.10 	Sec. 44. Laws 2002, chapter 377, article 3, section 25, is amended to read:
187.11 	Sec. 25. ROCHESTER LODGING TAX.
 187.12 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
187.13 	469.190 or 477A.016, or any other law, the city of Rochester may impose an additional 
187.14 	tax of one percent on the gross receipts from the furnishing for consideration of lodging at 
187.15 	a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it 
187.16 	for a continuous period of 30 days or more.
187.17 		Subd. 1a.Authorization. Notwithstanding Minnesota Statutes, section 469.190 or 
187.18 	477A.016, or any other law, and in addition to the tax authorized by subdivision 1, the city 
187.19 	of Rochester may impose an additional tax of one percent on the gross receipts from the 
187.20 	furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or 
187.21 	resort, other than the renting or leasing of it for a continuous period of 30 days or more 
187.22 	only upon (1) enactment of a law appropriating state money for construction costs of 
187.23 	renovating, improving, or expanding the Mayo Civic Center Complex; and (2) approval of 
187.24 	the city governing body of a total financial package for the project.
187.25 		Subd. 2.Disposition of proceeds. (a) The gross proceeds from any the tax imposed 
187.26 	under subdivision 1 must be used by the city to fund a local convention or tourism bureau 
187.27 	for the purpose of marketing and promoting the city as a tourist or convention center.
187.28 	(b) The gross proceeds from the one percent tax imposed under subdivision 1a shall 
187.29 	be used to pay for (1) construction, renovation, improvement, and expansion of the Mayo 
187.30 	Civic Center and related skyway access, lighting, parking, or landscaping; and (2) for 
187.31 	payment of any principal, interest, or premium on bonds issued to finance the construction, 
187.32 	renovation, improvement, and expansion of the Mayo Civic Center Complex.
187.33 		Subd. 3.Expiration of taxing authority. The authority of the city to impose a tax 
187.34 	under subdivision 1a shall expire when the principal and interest on any bonds or other 
187.35 	obligations issued to finance the construction, renovation, improvement, and expansion 
188.1 	of the Mayo Civic Center Complex and related skyway access, lighting, parking, or 
188.2 	landscaping have been paid or at an earlier time as the city shall, by ordinance, determine.

188.3 	EFFECTIVE DATE. This section is effective the day after the governing body of 
188.4 	the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section 
188.5 	645.021, subdivisions 2 and 3.

188.6 	Sec. 45. Laws 2006, chapter 259, article 3, section 12, subdivision 3, is amended to 
188.7 	read:
188.8 		Subd. 3.Use of revenues. Revenues received from the taxes authorized by 
188.9 	subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation 
188.10 	projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota 
188.11 	Department of Transportation, Steele County, and the city of Owatonna; regional parks 
188.12 	and trail developments; and the West Hills complex, including the firehall, and library 
188.13 	improvement projects; as described in the city resolution No. 4-06, Exhibit A, as adopted 
188.14 	by the city on January 17, 2006. Notwithstanding the specific transportation projects 
188.15 	described in city resolution No. 4-06, Exhibit A, the city may transfer up to $1,500,000 
188.16 	of the sales and use tax revenues from the Alexander Street to 39th Avenue Southwest 
188.17 	project to the reconstruction of 18th Street Southwest from 24th Avenue Southwest to 39th 
188.18 	Avenue West. The amount paid from these revenues for transportation projects may not 
188.19 	exceed $4,450,000 plus associated bond costs. The amount paid from these revenues for 
188.20 	park and trail projects may not exceed $5,400,000 plus associated bond costs. The amount 
188.21 	paid from these revenues for West Hills complex, fire hall, and library improvement 
188.22 	projects may not exceed $2,823,000 plus associated bond costs.

188.23 	EFFECTIVE DATE. This section is effective the day after compliance by the 
188.24 	governing body of the city of Owatonna with Minnesota Statutes, section 645.021, 
188.25 	subdivision 3.

188.26 	Sec. 46. Laws 2008, chapter 366, article 7, section 16, subdivision 3, is amended to 
188.27 	read:
188.28 		Subd. 3.Use of proceeds from authorized taxes. The proceeds of any tax imposed 
188.29 	under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses 
188.30 	of operation and maintenance of the Riverfront 2000 and related facilities, including a 
188.31 	performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center, 
188.32 	attached to the Mankato Civic Center for use by Minnesota State University, Mankato. 
189.1 	Authorized expenses include securing or paying debt service on bonds or other obligations 
189.2 	issued to finance the construction of the facilities.

189.3 	EFFECTIVE DATE. This section is effective the day after the governing body of 
189.4 	the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section 
189.5 	645.021, subdivisions 2 and 3.

189.6 	Sec. 47. SALES AND LOCAL LODGING TAXES COLLECTION; 
189.7 	DEPARTMENT OF REVENUE.
 189.8 	(a) The Department of Revenue shall collect from an online travel company, by all 
189.9 	available means authorized by law for the collection of taxes, the amount of sales and 
189.10 	local lodging taxes uncollected by an online travel company and owed to a city and the 
189.11 	state, plus interest and penalties, on the total rent paid for lodging in a hotel, rooming 
189.12 	house, tourist court, motel, or trailer camp, or for the granting of any similar license 
189.13 	to use real property. 
189.14 	(b) For purposes of this section, the following terms have the meanings given: 
189.15 	(1) "online travel company" means a person who offers information on the Internet 
189.16 	about the availability of accommodations to a customer, arranges for the customer's 
189.17 	occupancy of the accommodations, and collects the rental payments from the customer for 
189.18 	occupancy of the accommodations; 
189.19 	(2) "total rent paid" means the cost of lodging;
189.20 	(3) "unpaid amount of sales and local lodging taxes" means the state sales tax rate as 
189.21 	defined in Minnesota Statutes, section 297A.62, subdivision 1, plus the applicable local 
189.22 	lodging tax rate as applied against the total rent paid by a customer to an online travel 
189.23 	company less the amount of sales and local lodging taxes collected by the online travel 
189.24 	company and remitted to a lodging entity at the time the online travel company purchased 
189.25 	the right to make reservations on behalf of a customer to rent a lodging accommodation.
189.26 	(c) A city that imposes a local lodging tax must make a request to the Department of 
189.27 	Revenue for action to be taken under this section. 
189.28 	(d) The commissioner of revenue may request the attorney general to conduct legal 
189.29 	proceedings, if necessary, on behalf of the state to enforce the provisions of this section. 

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

189.31 	Sec. 48. ROCHESTER FOOD AND BEVERAGE TAX.
 189.32 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
189.33 	477A.016, or any other law or charter provision, the city of Rochester may impose a tax of 
190.1 	one percent on the gross receipts on all sales of food and beverages by restaurants and 
190.2 	places of refreshment, as defined by resolution of the city, that occur in the city. For 
190.3 	purposes of this section, "food and beverages" include retail on-sale of intoxicating liquor 
190.4 	and fermented malt beverages.
190.5 		Subd. 2.Use of proceeds. The proceeds of this tax shall be used for (1) paying the 
190.6 	cost of collection; (2) to pay for construction, renovation, improvement, and expansion 
190.7 	of the Mayo Civic Center Complex and related skyway access, lighting, parking, or 
190.8 	landscaping; and (3) for payment of any principal, interest, or premium on bonds issued 
190.9 	to finance the construction, renovation, improvement, and expansion of the Mayo Civic 
190.10 	Center Complex.
190.11 		Subd. 3.Imposition of the tax. The tax under this section may only be imposed 
190.12 	upon (1) enactment of a law appropriating state money for construction costs of 
190.13 	renovating, improving, or expanding the Mayo Civic Center Complex; and (2) approval of 
190.14 	the city governing body of a total financing package for the project.
190.15 		Subd. 4.Expiration of taxing authority. The authority granted under subdivision 
190.16 	1 to the city to impose a one percent tax on food and beverages shall expire when the 
190.17 	principal and interest on any bonds or other obligations issued to finance the construction, 
190.18 	renovation, improvement, and expansion of the Mayo Civic Center Complex and related 
190.19 	skyway access, lighting, parking, or landscaping have been paid or at an earlier time 
190.20 	as the city shall, by ordinance, determine.

190.21 	EFFECTIVE DATE. This section is effective the day after the governing body of 
190.22 	the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section 
190.23 	645.021, subdivisions 2 and 3, and upon approval of the city governing body of a total 
190.24 	financing package to renovate, improve, or expand the Mayo Civic Center Complex.

190.25 	Sec. 49.  REPEALER.
 190.26 	Minnesota Statutes 2008, section 297A.61, subdivision 45, is repealed.

190.27 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
190.28 	June 30, 2009.

190.29 	ARTICLE 11
190.30 	LOCAL DEVELOPMENT

190.31 	Section 1. Minnesota Statutes 2008, section 469.174, subdivision 22, is amended to 
190.32 	read:
190.33 		Subd. 22.Tourism facility. "Tourism facility" means property that:
191.1 	(1) is located in a county where the median income is no more than 85 percent of 
191.2 	the state median income;
191.3 	(2) is located in a county in development region 2, 3, 4, or 5, or 7E, as defined 
191.4 	in section 462.385; 
191.5 	(3) is not located in a city with a population in excess of 20,000; and
191.6 	(4) is acquired, constructed, or rehabilitated for use as a convention and meeting 
191.7 	facility that is privately owned, marina, hotel, motel, lodging facility, or nonhomestead 
191.8 	dwelling unit that in each case is intended to serve primarily individuals from outside 
191.9 	the county.

191.10 	EFFECTIVE DATE. This section is effective for requests for certification made 
191.11 	after June 30, 2009.

191.12 	Sec. 2. Minnesota Statutes 2008, section 469.175, subdivision 1, is amended to read:
191.13 		Subdivision 1. Tax increment financing plan. (a) A tax increment financing plan 
191.14 	shall contain: 
191.15 	(1) a statement of objectives of an authority for the improvement of a project; 
191.16 	(2) a statement as to the development program for the project, including the property 
191.17 	within the project, if any, that the authority intends to acquire, identified by parcel number, 
191.18 	identifiable property name, block, or other appropriate means indicating the area in which 
191.19 	the authority intends to acquire properties; 
191.20 	(3) a list of any development activities that the plan proposes to take place within 
191.21 	the project, for which contracts have been entered into at the time of the preparation of 
191.22 	the plan, including the names of the parties to the contract, the activity governed by the 
191.23 	contract, the estimated cost stated in the contract, and the expected date of completion 
191.24 	of that activity; 
191.25 	(4) identification or description of the type of any other specific development 
191.26 	reasonably expected to take place within the project district, and the date when the 
191.27 	development is likely to occur; 
191.28 	(5) estimates of the following: 
191.29 	(i) cost of the project, including administrative expenses, except that if part of the 
191.30 	cost of the project is paid or financed with increment from the tax increment financing 
191.31 	district, the tax increment financing plan for the district must contain an estimate of the 
191.32 	amount of the cost of the project, including administrative expenses, and interest costs
191.33 	that will be paid or financed with tax increments from the district, but not to exceed the 
191.34 	estimated tax increment generated by the development activity; 
191.35 	(ii) amount of bonded indebtedness to be incurred bonds to be issued; 
192.1 	(iii) sources of revenue to finance or otherwise pay public costs; 
192.2 	(iv) the most recentoriginal net tax capacity of taxable real property within the tax 
192.3 	increment financing district and within any subdistrict; 
192.4 	(v)(iv) the estimated captured net tax capacity of the tax increment financing district 
192.5 	at completion; and
192.6 	(vi) (v) the duration of the tax increment financing district's and any subdistrict's 
192.7 	existence; 
192.8 	(6) statements of the authority's alternate estimates of the impact of tax increment 
192.9 	financing on the net tax capacities of all taxing jurisdictions in which the tax increment 
192.10 	financing district is located in whole or in part. For purposes of one statement, the 
192.11 	authority shall assume that the estimated captured net tax capacity would be available to 
192.12 	the taxing jurisdictions without creation of the district, and for purposes of the second 
192.13 	statement, the authority shall assume that none of the estimated captured net tax capacity 
192.14 	would be available to the taxing jurisdictions without creation of the district or subdistrict; 
192.15 	(7) identification and description of studies and analyses used to make the 
192.16 	determination set forth in subdivision 3, clause (2); and 
192.17 	(8) identification of all parcels to be included in the district or any subdistrict. 
192.18 	(b) The authority may specify in the tax increment financing plan the first year in 
192.19 	which it elects to receive increment, up to four years following the year of approval of the 
192.20 	district. This paragraph does not apply to an economic development district. 

192.21 	EFFECTIVE DATE. This section is effective for tax increment financing plans 
192.22 	approved after June 30, 2009.

192.23 	Sec. 3. Minnesota Statutes 2008, section 469.175, subdivision 6, is amended to read:
192.24 		Subd. 6.Annual financial reporting. (a) The state auditor shall develop a uniform 
192.25 	system of accounting and financial reporting for tax increment financing districts. The 
192.26 	system of accounting and financial reporting shall, as nearly as possible:
192.27 	(1) provide for full disclosure of the sources and uses of public funds in tax 
192.28 	increments of the district;
192.29 	(2) permit comparison and reconciliation with the affected local government's 
192.30 	accounts and financial reports;
192.31 	(3) permit auditing of the funds expended on behalf of a district, including a single 
192.32 	district that is part of a multidistrict project or that is funded in part or whole through 
192.33 	the use of a development account funded with tax increments from other districts or 
192.34 	with other public money;
192.35 	(4) be consistent with generally accepted accounting principles.
193.1 	(b) The authority must annually submit to the state auditor a financial report 
193.2 	in compliance with paragraph (a). Copies of the report must also be provided to the 
193.3 	county auditor and to the governing body of the municipality, if the authority is not 
193.4 	the municipality. To the extent necessary to permit compliance with the requirement 
193.5 	of financial reporting, the county and any other appropriate local government unit or 
193.6 	private entity must provide the necessary records or information to the authority or the 
193.7 	state auditor as provided by the system of accounting and financial reporting developed 
193.8 	pursuant to paragraph (a). The authority must submit the annual report for a year on or 
193.9 	before August 1 of the next year.
193.10 	(c) The annual financial report must also include the following items:
193.11 	(1) the original net tax capacity of the district and any subdistrict under section 
193.12 	469.177, subdivision 1;
193.13 	(2) the net tax capacity for the reporting period of the district and any subdistrict;
193.14 	(3) the captured net tax capacity of the district;
193.15 	(4) any fiscal disparity deduction from the captured net tax capacity under section 
193.16 	469.177, subdivision 3;
193.17 	(5) the captured net tax capacity retained for tax increment financing under section 
193.18 	469.177, subdivision 2, paragraph (a), clause (1);
193.19 	(6) any captured net tax capacity distributed among affected taxing districts under 
193.20 	section 469.177, subdivision 2, paragraph (a), clause (2);
193.21 	(7) the type of district;
193.22 	(8) the date the municipality approved the tax increment financing plan and the 
193.23 	date of approval of any modification of the tax increment financing plan, the approval of 
193.24 	which requires notice, discussion, a public hearing, and findings under subdivision 4, 
193.25 	paragraph (a);
193.26 	(9) the date the authority first requested certification of the original net tax capacity 
193.27 	of the district and the date of the request for certification regarding any parcel added 
193.28 	to the district;
193.29 	(10) the date the county auditor first certified the original net tax capacity of the 
193.30 	district and the date of certification of the original net tax capacity of any parcel added 
193.31 	to the district;
193.32 	(11) the month and year in which the authority has received or anticipates it will 
193.33 	receive the first increment from the district;
193.34 	(12) the date the district must be decertified;
193.35 	(13) for the reporting period and prior years of the district, the actual amount 
193.36 	received from, at least, the following categories:
194.1 	(i) tax increments paid by the captured net tax capacity retained for tax increment 
194.2 	financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding 
194.3 	any excess taxes;
194.4 	(ii) tax increments that are interest or other investment earnings on or from tax 
194.5 	increments;
194.6 	(iii) tax increments that are proceeds from the sale or lease of property, tangible or 
194.7 	intangible, purchased by the authority with tax increments;
194.8 	(iv) tax increments that are repayments of loans or other advances made by the 
194.9 	authority with tax increments;
194.10 	(v) bond or loan proceeds; and
194.11 	(vi) special assessments;
194.12 	(vii) grants;
194.13 	(viii) transfers from funds not exclusively associated with the district; and
194.14 	(ix) (vi) the market value homestead credit paid to the authority under section 
194.15 	273.1384;
194.16 	(14) for the reporting period and for the prior years of the district, the actual amount 
194.17 	expended for, at least, the following categories:
194.18 	(i) acquisition of land and buildings through condemnation or purchase;
194.19 	(ii) site improvements or preparation costs;
194.20 	(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or 
194.21 	other similar public improvements;
194.22 	(iv) administrative costs, including the allocated cost of the authority; and
194.23 	(v) public park facilities, facilities for social, recreational, or conference purposes, or 
194.24 	other similar public improvements; and for housing districts, construction of affordable 
194.25 	housing;
194.26 	(vi) transfers to funds not exclusively associated with the district;
194.27 	(15) the amount of any payments for activities and improvements located outside of 
194.28 	the district that are paid for or financed with tax increments;
194.29 	(16) the amount of payments of principal and interest that are made during the 
194.30 	reporting period on any nondefeased:
194.31 	(i) general obligation tax increment financing bonds; and
194.32 	(ii) other tax increment financing bonds, including pay-as-you-go contracts and 
194.33 	notes; and
194.34 	(iii) notes and pay-as-you-go contracts;
194.35 	(17) the principal amount, at the end of the reporting period, of any nondefeased:
194.36 	(i) general obligation tax increment financing bonds; and
195.1 	(ii) other tax increment financing bonds, including pay-as-you-go contracts and 
195.2 	notes; and
195.3 	(iii) notes and pay-as-you-go contracts;
195.4 	(18) the amount of principal and interest payments that are due for the current 
195.5 	calendar year on any nondefeased:
195.6 	(i) general obligation tax increment financing bonds; and
195.7 	(ii) other tax increment financing bonds, including pay-as-you-go contracts and 
195.8 	notes; and
195.9 	(iii) notes and pay-as-you-go contracts;
195.10 	(19) if the fiscal disparities contribution under chapter 276A or 473F for the district 
195.11 	is computed under section 469.177, subdivision 3, paragraph (a), the amount of total 
195.12 	increased property taxes imposed on other properties in the municipality that approved the 
195.13 	tax increment financing plan as a result of the fiscal disparities contribution;  to be paid 
195.14 	from outside the tax increment financing district; and
195.15 	(20) the estimate, if any, contained in the tax increment financing plan of the amount 
195.16 	of the cost of the project, including administrative expenses, that will be paid or financed 
195.17 	with tax increment; and
195.18 	(21) any additional information the state auditor may require.
195.19 	(d) The commissioner of revenue shall prescribe the method of calculating the 
195.20 	increased property taxes under paragraph (c), clause (19), and the form of the statement 
195.21 	disclosing this information on the annual statement under subdivision 5.
195.22 	(e) (d) The reporting requirements imposed by this subdivision apply to districts 
195.23 	certified before, on, and after August 1, 1979.

195.24 	EFFECTIVE DATE. This section is effective for tax increment financing reports 
195.25 	due after December 31, 2009.

195.26 	Sec. 4. Minnesota Statutes 2008, section 469.176, subdivision 3, is amended to read:
195.27 		Subd. 3.Limitation on administrative expenses.
 195.28 	(a) For districts for which certification was requested before August 1, 1979, or after 
195.29 	June 30, 1982 and before August 1, 2001, no tax increment shall be used to pay any 
195.30 	administrative expenses for a project which exceed ten percent of the total estimated tax 
195.31 	increment expenditures authorized by the tax increment financing plan or the total tax 
195.32 	increment expenditures for the project, whichever is less.
195.33 	(b) For districts for which certification was requested after July 31, 1979, and before 
195.34 	July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in 
195.35 	Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the 
196.1 	total tax increment expenditures authorized by the tax increment financing plan or the total 
196.2 	estimated tax increment expenditures for the district, whichever is less.  
196.3 	(c) For districts for which certification was requested after July 31, 2001, no tax 
196.4 	increment may be used to pay any administrative expenses for a project which exceed 
196.5 	ten percent of total estimated tax increment expenditures authorized by the tax increment 
196.6 	financing plan or the total tax increments, as defined in section 469.174, subdivision 25, 
196.7 	clause (1), from the district, whichever is less.  
196.8 	(d) Increments used to pay the county's administrative expenses under subdivision 
196.9 	4h are not subject to the percentage limits in this subdivision.

196.10 	EFFECTIVE DATE. This section is effective for all districts, regardless of when 
196.11 	the request for certification was made.

196.12 	Sec. 5. Minnesota Statutes 2008, section 469.176, is amended by adding a subdivision 
196.13 	to read:
196.14 		Subd. 4m.Use to offset state aid reductions. (a) Notwithstanding any other 
196.15 	provision of this section, section 469.1763, or a special law, upon the request of the 
196.16 	municipality, the authority may elect, by resolution, to transfer increments from a district 
196.17 	to the municipality for deposit in its general fund. The permitted transfer for a calendar 
196.18 	year is limited to the amount allowed under paragraph (b). Following the election, 
196.19 	expenditure of increments from the district are limited by the conditions in paragraph (c). 
196.20 	The transferred increments may be expended for any purpose the municipality's general 
196.21 	fund permits.
196.22 	(b) For each calendar year for which transfers are permitted under this section, 
196.23 	the maximum transfer equals the lesser of:
196.24 	(1) the excess of the district's available increment over the sum of:
196.25 	(i) required payments of obligations that will come due during the calendar year or 
196.26 	the first six months of the following calendar year on outstanding bonds and binding 
196.27 	contracts to which the district's increments are pledged; plus
196.28 	(ii) transfers of increments from the district to offset deficits in other districts to be 
196.29 	made during the calendar year under section 469.1763, subdivision 6; or
196.30 	(2) the sum of the following amounts, limited to the relevant amounts that are 
196.31 	effective through the calendar year in which the transfer is to be made:
196.32 	(i) unallotment of aid payments previously certified by the state to be paid to the 
196.33 	municipality during calendar years 2008 to 2010;
196.34 	(ii) reductions in state reimbursement payments for property tax credits to be paid 
196.35 	to the municipality in calendar years 2008 to 2010; and
197.1 	(iii) reductions in local government aids to be paid to the municipality resulting from 
197.2 	reductions in the appropriation or changes in the formula, enacted by the legislature, for 
197.3 	calendar years 2009 to 2010; less
197.4 	(iv) any special levy made by the municipality under section 275.70, subdivision 
197.5 	5, clause (22).
197.6 	(c) Following an election under this subdivision, an authority may expend 
197.7 	increments from the district for only the following purposes:
197.8 	(1) payment of bonds and binding contracts with an entity not under the control of 
197.9 	the municipality or authority to which the district's increments were pledged that were 
197.10 	outstanding when the election was made;
197.11 	(2) transfers to offset deficits in other districts as permitted under section 469.1763, 
197.12 	subdivision 6;
197.13 	(3) administrative expenses of the district; and
197.14 	(4) transfers permitted under this subdivision.
197.15 	(d) The commissioner of revenue shall calculate and certify the amount, if any, of 
197.16 	the reduction under paragraph (b), clause (2), item (iii), for a city, upon request of the city.
197.17 	(g) The authority to transfer increments under this section does not apply to a 
197.18 	municipality, if the captured tax capacity of the municipality exceeds 12 percent of the 
197.19 	municipality's total tax capacity for the taxes payable year in which the transfer is made.
197.20 	(f) The authority to transfer increments under this section expires on December 
197.21 	31, 2010.

197.22 	EFFECTIVE DATE. This section is effective the day following final enactment 
197.23 	and applies to increments from any district, regardless of when the request for certification 
197.24 	was made.

197.25 	Sec. 6. Minnesota Statutes 2008, section 469.176, subdivision 6, is amended to read:
197.26 		Subd. 6.Action required. (a) If, after four years from the date of certification of 
197.27 	the original net tax capacity of the tax increment financing district pursuant to section 
197.28 	469.177, no demolition, rehabilitation, or renovation of property or other site preparation, 
197.29 	including qualified improvement of a street adjacent to a parcel but not installation 
197.30 	of utility service including sewer or water systems, has been commenced on a parcel 
197.31 	located within a tax increment financing district by the authority or by the owner of the 
197.32 	parcel in accordance with the tax increment financing plan, no additional tax increment 
197.33 	may be taken from that parcel, and the original net tax capacity of that parcel shall be 
197.34 	excluded from the original net tax capacity of the tax increment financing district. If the 
197.35 	authority or the owner of the parcel subsequently commences demolition, rehabilitation, 
198.1 	or renovation or other site preparation on that parcel including qualified improvement of 
198.2 	a street adjacent to that parcel, in accordance with the tax increment financing plan, the 
198.3 	authority shall certify to the county auditor that the activity has commenced, and the 
198.4 	county auditor shall certify the net tax capacity thereof as most recently certified by the 
198.5 	commissioner of revenue and add it to the original net tax capacity of the tax increment 
198.6 	financing district. The county auditor must enforce the provisions of this subdivision. The 
198.7 	authority must submit to the county auditor evidence that the required activity has taken 
198.8 	place for each parcel in the district. The evidence for a parcel must be submitted by 
198.9 	February 1 of the fifth year following the year in which the parcel was certified as included 
198.10 	in the district. For purposes of this subdivision, qualified improvements of a street are 
198.11 	limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) 
198.12 	substantial reconstruction or rebuilding of an existing street.  
198.13 	(b) For districts which were certified on or after January 1, 2005, and before July 1, 
198.14 	2010, the four-year period under paragraph (a) is increased to six years.

198.15 	EFFECTIVE DATE. This section is effective for districts certified on or after 
198.16 	January 1, 2005.

198.17 	Sec. 7. Minnesota Statutes 2008, section 469.1763, subdivision 2, is amended to read:
198.18 		Subd. 2. Expenditures outside district. (a) For each tax increment financing 
198.19 	district, an amount equal to at least 75 percent of the total revenue derived from tax 
198.20 	increments paid by properties in the district must be expended on activities in the district 
198.21 	or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities 
198.22 	in the district or to pay, or secure payment of, debt service on credit enhanced bonds. 
198.23 	For districts, other than redevelopment districts for which the request for certification 
198.24 	was made after June 30, 1995, the in-district percentage for purposes of the preceding 
198.25 	sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax 
198.26 	increments paid by properties in the district may be expended, through a development fund 
198.27 	or otherwise, on activities outside of the district but within the defined geographic area of 
198.28 	the project except to pay, or secure payment of, debt service on credit enhanced bonds. 
198.29 	For districts, other than redevelopment districts for which the request for certification was 
198.30 	made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is 
198.31 	20 percent. The revenue derived from tax increments for the district that are expended on 
198.32 	costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before 
198.33 	calculating the percentages that must be expended within and without the district. 
198.34 	(b) In the case of a housing district, a housing project, as defined in section 469.174, 
198.35 	subdivision 11, is an activity in the district. 
199.1 	(c) All administrative expenses are for activities outside of the district, except that 
199.2 	if the only expenses for activities outside of the district under this subdivision are for 
199.3 	the purposes described in paragraph (d), administrative expenses will be considered as 
199.4 	expenditures for activities in the district. 
199.5 	(d) The authority may elect, in the tax increment financing plan for the district, 
199.6 	to increase by up to ten percentage points the permitted amount of expenditures for 
199.7 	activities located outside the geographic area of the district under paragraph (a). As 
199.8 	permitted by section 469.176, subdivision 4k, the expenditures, including the permitted 
199.9 	expenditures under paragraph (a), need not be made within the geographic area of the 
199.10 	project. Expenditures that meet the requirements of this paragraph are legally permitted 
199.11 	expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. 
199.12 	To qualify for the increase under this paragraph, the expenditures must: 
199.13 	(1)(i) be used exclusively to assist housing that meets the requirement for a qualified 
199.14 	low-income building, as that term is used in section 42 of the Internal Revenue Code; 
199.15 	(2) (ii) not exceed the qualified basis of the housing, as defined under section 42(c) 
199.16 	of the Internal Revenue Code, less the amount of any credit allowed under section 42 of 
199.17 	the Internal Revenue Code; and 
199.18 	(3) (iii) be used to: 
199.19 	(i) (A) acquire and prepare the site of the housing; 
199.20 	(ii) (B) acquire, construct, or rehabilitate the housing; or 
199.21 	(iii) (C) make public improvements directly related to the housing; or
199.22 	(2) be used to develop housing that does not exceed 150 percent of the average 
199.23 	market value of single-family homes in that municipality and to pay the cost of site 
199.24 	acquisition, relocation, demolition of existing structures, site preparation, and pollution 
199.25 	abatement on one or more parcels, if the parcel:
199.26 	(i) contains a residence containing one to four family dwelling units that has been 
199.27 	vacant for three or more months;
199.28 	(ii) contains a residence containing one to four family dwelling units that is 
199.29 	structurally substandard, as defined in section 469.174, subdivision 10;
199.30 	(iii) is in foreclosure as defined in section 325N.10, subdivision 7, but without regard 
199.31 	to whether the residence is the owner's principal residence; or
199.32 	(iv) is a vacant site, if the authority uses the parcel in connection with the 
199.33 	development or redevelopment of a parcel qualifying under items (i) to (iii). 
199.34 	(e) For a district created within a biotechnology and health sciences industry zone 
199.35 	as defined in section 469.330, subdivision 6, or for an existing district located within 
199.36 	such a zone, tax increment derived from such a district may be expended outside of the 
200.1 	district but within the zone only for expenditures required for the construction of public 
200.2 	infrastructure necessary to support the activities of the zone, land acquisition, and other 
200.3 	redevelopment costs as defined in section 469.176, subdivision 4j. These expenditures are 
200.4 	considered as expenditures for activities within the district. 
200.5 	(f) The authority under paragraph (d), clause (2), expires on December 31, 2015. 
200.6 	Increments may continue to be expended under this authority after that date, if they are 
200.7 	used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph 
200.8 	(a), if December 31, 2015 is considered to be the last date of the five-year period after 
200.9 	certification under that provision.

200.10 	EFFECTIVE DATE. This section is effective for any district that is subject to the 
200.11 	provisions of section 469.1763, regardless of when the request for certification of the 
200.12 	district was made.

200.13 	Sec. 8. Minnesota Statutes 2008, section 469.1763, subdivision 3, is amended to read:
200.14 		Subd. 3.Five-year rule. (a) Revenues derived from tax increments are considered 
200.15 	to have been expended on an activity within the district under subdivision 2 only if one 
200.16 	of the following occurs:
200.17 	(1) before or within five years after certification of the district, the revenues are 
200.18 	actually paid to a third party with respect to the activity;
200.19 	(2) bonds, the proceeds of which must be used to finance the activity, are issued and 
200.20 	sold to a third party before or within five years after certification, the revenues are spent 
200.21 	to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, 
200.22 	reasonably expected to be spent before the end of the later of (i) the five-year period, or 
200.23 	(ii) a reasonable temporary period within the meaning of the use of that term under section 
200.24 	148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve 
200.25 	or replacement fund;
200.26 	(3) binding contracts with a third party are entered into for performance of the 
200.27 	activity before or within five years after certification of the district and the revenues are 
200.28 	spent under the contractual obligation;
200.29 	(4) costs with respect to the activity are paid before or within five years after 
200.30 	certification of the district and the revenues are spent to reimburse a party for payment 
200.31 	of the costs, including interest on unreimbursed costs; or
200.32 	(5) expenditures are made for housing purposes as permitted by subdivision 2, 
200.33 	paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted 
200.34 	by subdivision 2, paragraph (e).
201.1 	(b) For purposes of this subdivision, bonds include subsequent refunding bonds if 
201.2 	the original refunded bonds meet the requirements of paragraph (a), clause (2).
201.3 	(c) For districts which were certified on or after January 1, 2004, and before July 1, 
201.4 	2010, the five-year period under paragraph (a) is increased to eight years. For districts 
201.5 	qualifying under this paragraph, application of subdivision 4 begins in the ninth year 
201.6 	following certification of the district.

201.7 	EFFECTIVE DATE. This section is effective for districts certified on or after 
201.8 	January 1, 2004.

201.9 	Sec. 9. Minnesota Statutes 2008, section 469.178, subdivision 7, is amended to read:
201.10 		Subd. 7. Interfund loans. The authority or municipality may advance or loan 
201.11 	money to finance expenditures under section 469.176, subdivision 4, from its general 
201.12 	fund or any other fund under which it has legal authority to do so. The loan or advance 
201.13 	must be authorized, by resolution of the governing body or of the authority, whichever 
201.14 	has jurisdiction over the fund from which the advance or loan is made authorized, before 
201.15 	money is transferred, advanced, or spent, whichever is earliest. The resolution may 
201.16 	generally grant to the authority the power to make interfund loans under one or more tax 
201.17 	increment financing plans or for one or more districts. The terms and conditions for 
201.18 	repayment of the loan must be provided in writing and include, at a minimum, the principal 
201.19 	amount, the interest rate, and maximum term. The maximum rate of interest permitted to 
201.20 	be charged is limited to the greater of the rates specified under section 270C.40 or 549.09
201.21 	as of the date the loan or advance is made authorized, unless the written agreement states 
201.22 	that the maximum interest rate will fluctuate as the interest rates specified under section 
201.23 	270C.40 or 549.09 are from time to time adjusted. 

201.24 	EFFECTIVE DATE. This section is effective for interfund loans made after June 
201.25 	30, 2009.

201.26 	Sec. 10. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by 
201.27 	Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10, 
201.28 	section 12, and Laws 2008, chapter 154, article 9, section 18, is amended to read:
201.29 		Subd. 4.Authority. For housing replacement projects in the city of Crystal, 
201.30 	"authority" means the Crystal economic development authority. For housing replacement 
201.31 	projects in the city of Fridley, "authority" means the housing and redevelopment authority 
201.32 	in and for the city of Fridley or a successor in interest. For housing replacement 
201.33 	projects in the city of Minneapolis, "authority" means the Minneapolis community 
202.1 	development agency or its successors and assigns. For housing replacement projects 
202.2 	in the city of St. Paul, "authority" means the St. Paul housing and redevelopment 
202.3 	authority. For housing replacement projects in the city of Duluth, "authority" means the 
202.4 	Duluth economic development authority. For housing replacement projects in the city of 
202.5 	Richfield, "authority" is the authority as defined in Minnesota Statutes, section 469.174, 
202.6 	subdivision 2, that is designated by the governing body of the city of Richfield. For 
202.7 	housing replacement projects in the city of Columbia Heights, "authority" is the authority 
202.8 	as defined in Minnesota Statutes, section 469.174, subdivision 2, that is designated by 
202.9 	the governing body of the city of Columbia Heights. For housing replacement projects in 
202.10 	the city of Brooklyn Park, "authority" is the authority as defined in Minnesota Statutes, 
202.11 	section 469.174, subdivision 2, that is designated by the governing body of the city of 
202.12 	Brooklyn Park.

202.13 	EFFECTIVE DATE. This section is effective the day following final enactment 
202.14 	and applies to the city of Brooklyn Park without local approval under Minnesota Statutes, 
202.15 	section 645.023, subdivision 1, clause (a).

202.16 	Sec. 11. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by 
202.17 	Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10, 
202.18 	section 13, and Laws 2002, chapter 377, article 7, section 6, and Laws 2008, chapter 154, 
202.19 	article 9, section 19, is amended to read:
202.20 		Subdivision 1.Creation of projects. (a) An authority may create a housing 
202.21 	replacement project under sections 44 to 47, as provided in this section.
202.22 	(b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, and Brooklyn 
202.23 	Park, the authority may designate up to 50 100 parcels in the city to be included in a 
202.24 	housing replacement district over the life of a district or districts. No more than ten 
202.25 	parcels may be included in year one of the district, with up to ten additional parcels added 
202.26 	to the district in each of the following nine years. For the cities of St. Paul and Duluth, 
202.27 	each authority may designate not more than 200 parcels in the city to be included in a 
202.28 	housing replacement district over the life of the district. For the city of Minneapolis, the 
202.29 	authority may designate not more than 400 parcels in the city to be included in housing 
202.30 	replacement districts over the life of the districts. The only parcels that may be included 
202.31 	in a district are (1) vacant sites, (2) parcels containing vacant houses, or (3) parcels 
202.32 	containing houses that are structurally substandard, as defined in Minnesota Statutes, 
202.33 	section 469.174, subdivision 10.
203.1 	(c) The city in which the authority is located must pay at least 25 percent of the 
203.2 	housing replacement project costs from its general fund, a property tax levy, or other 
203.3 	unrestricted money, not including tax increments.
203.4 	(d) The housing replacement district plan must have as its sole object the acquisition 
203.5 	of parcels for the purpose of preparing the site to be sold for market rate housing. As 
203.6 	used in this section, "market rate housing" means housing that has a market value that 
203.7 	does not exceed 150 percent of the average market value of single-family housing in that 
203.8 	municipality.

203.9 	EFFECTIVE DATE. This section is effective the day following final enactment 
203.10 	and applies to the affected cities without local approval under Minnesota Statutes, section 
203.11 	645.023, subdivision 1, clause (a).

203.12 	Sec. 12. Laws 2008, chapter 366, article 5, section 34, is amended to read:
203.13 	Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY. 
 203.14 	(a) The provisions of this section apply to redevelopment tax increment financing 
203.15 	districts created by the Housing and Redevelopment Authority in and for the city of 
203.16 	Oakdale in the areas comprised of the parcels with the following parcel identification 
203.17 	numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056; 
203.18 	3102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059; 
203.19 	3102921320060; and 3102921320061; and (2) 3102921330005; and 3102921330004; and 
203.20 	(2) 2902921330001 and 2902921330005.
203.21 	(b) For a district subject to this section, the Housing and Redevelopment Authority 
203.22 	may, when requesting certification of the original tax capacity of the district under 
203.23 	Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district 
203.24 	be certified as the tax capacity of the land.
203.25 	(c) The authority to request certification of a district under this section expires on 
203.26 	July 1, 2013.

203.27 	EFFECTIVE DATE. This section is effective upon approval by the governing 
203.28 	body of the city of Oakdale and compliance with Minnesota Statutes, section 645.021, 
203.29 	subdivision 3.

203.30 	Sec. 13. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF 
203.31 	SOUTH ST. PAUL; TAX INCREMENT FINANCING DISTRICT.
 203.32 		Subdivision 1.Authorization. Notwithstanding the provisions of any other law, 
203.33 	the Housing and Redevelopment Authority of the city of South St. Paul may establish a 
204.1 	redevelopment tax increment financing district comprised of the properties included in the 
204.2 	existing Concord Street tax increment district in the city that are exempt under Minnesota 
204.3 	Statutes, section 469.179, subdivision 1, and were not decertified before July 1, 2009. The 
204.4 	district created under this section may be certified after August 1, 2009, and terminates no 
204.5 	later than December 31, 2024. The Housing and Redevelopment Authority of the city of 
204.6 	South St. Paul may create the district under this section only if it enters into an agreement 
204.7 	with Dakota County to pay the county annually out of the increment from this district an 
204.8 	amount equal to the tax that would have been payable to the county on the captured tax 
204.9 	capacity of the district had the district not been created.
204.10 		Subd. 2.Special rules. The requirements for qualifying a redevelopment district 
204.11 	under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located 
204.12 	within the district. Minnesota Statutes, section 469.176, subdivisions 4j and 4l, do not 
204.13 	apply to the district. The original tax capacity of the district is $354,945.
204.14 		Subd. 3.Authorized expenditures. Tax increment from the district may be 
204.15 	expended to pay for any eligible activities authorized by Minnesota Statutes, chapter 
204.16 	469, within the redevelopment area that includes the district. All such expenditures are 
204.17 	deemed to be activities within the district under Minnesota Statutes, section 469.1763, 
204.18 	subdivisions 2, 3, and 4.
204.19 		Subd. 4.Adjusted net tax capacity. The captured tax capacity of the district must 
204.20 	be included in the adjusted net tax capacity of the city, county, and school district for the 
204.21 	purposes of determining local government aid, education aid, and county program aid. 
204.22 	The county auditor shall report to the commissioner of revenue the amount of the captured 
204.23 	tax capacity for the district at the time the assessment abstracts are filed.

204.24 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
204.25 	Statutes, section 645.021, subdivision 3, by the governing body of the city of South St. 
204.26 	Paul.

204.27 	Sec. 14. CITY OF MINNETONKA; TAX INCREMENT FINANCING 
204.28 	DISTRICT EXTENSION.
 204.29 	Notwithstanding the provisions of Minnesota Statutes, section 469.176, subdivision 
204.30 	1b, paragraph (a), clause (1), the governing bodies of the city of Minnetonka and its 
204.31 	economic development authority may elect to extend the maximum duration of all or 
204.32 	a portion the Glenhaven Tax Increment Financing District by up to seven years. The 
204.33 	city may make the election under this section only if it finds by resolution that when it 
204.34 	approved the original tax increment financing plan for the Glenhaven Tax Increment 
204.35 	Financing District the area of the district qualified to be certified as a redevelopment 
205.1 	district under Minnesota Statutes, section 469.174, subdivision 10, or that the portion of 
205.2 	the district it is electing to extend so qualified. The city must document this finding in the 
205.3 	manner provided under Minnesota Statutes, section 469.175, subdivision 3, paragraph (b), 
205.4 	clause (1), for a redevelopment district.

205.5 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota 
205.6 	Statutes, sections 469.1782, subdivision 2, and 645.021, subdivision 3.

205.7 	Sec. 15. CITY OF ARDEN HILLS; SPECIAL TAX INCREMENT FINANCING 
205.8 	AUTHORITY.
 205.9 		Subdivision 1.Establishment. The city of Arden Hills may establish within the 
205.10 	corporate boundaries of the city a redevelopment tax increment financing district subject 
205.11 	to the special rules under subdivision 2. The district must be located within the area 
205.12 	described in the TCAAP Boundary Survey dated December 12, 2007, by W. Brown Land 
205.13 	Surveying, Inc.
205.14 		Subd. 2.Special rules. (a) If the city elects to adopt the tax increment financing 
205.15 	plan in subdivision 1 for the district, the following rules apply to the district:
205.16 	(1) the district is deemed to meet all the requirements of Minnesota Statutes, section 
205.17 	469.174, subdivision 10;
205.18 	(2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, is 
205.19 	extended to a ten-year period; and
205.20 	(3) the duration limit under Minnesota Statutes, section 469.176, subdivision 1b, 
205.21 	paragraph (a), clause (4), is extended to 30 years after receipt of the first increment.
205.22 	(b) Notwithstanding Minnesota Statutes, section 469.175, subdivision 1, paragraph 
205.23 	(b), the city may designate the first year in which it elects to receive an increment, up to six 
205.24 	years following the year of approval of the district. The city must make the designation 
205.25 	by written notice to the county auditor delivered by June 30 of the year prior to the 
205.26 	designated year of first receipt.
205.27 		Subd. 3.Expiration. The authority to approve a tax increment financing plan to 
205.28 	establish a tax increment financing district under this section expires December 31, 2019.

205.29 	EFFECTIVE DATE. This section is effective upon approval by the governing body 
205.30 	of the city of Arden Hills and upon compliance by the city with Minnesota Statutes, 
205.31 	sections 469.1782, subdivision 2, and 645.021, subdivision 3.

205.32 	Sec. 16. CITY OF ST. PAUL; AUTHORITY TO EXERCISE SPECIAL LAW 
205.33 	AUTHORITY.
 206.1 	Notwithstanding the failure of the governing body of the city of St. Paul to approve 
206.2 	Laws 1995, chapter 264, article 5, sections 44 to 47, as required by Laws 1995, chapter 
206.3 	264, article 5, section 49, the provisions of sections 44 to 47, as amended, apply to the city 
206.4 	of St. Paul without local approval under Minnesota Statutes, section 645.023, subdivision 
206.5 	1, clause (a).

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

206.7 	Sec. 17. CITY OF SAUK RAPIDS; TAX INCREMENT FINANCING DISTRICT.
 206.8 	Any parcel in the city of Sauk Rapids located within Blocks 26, 27, 59, 61, and 62, 
206.9 	original town of Sauk Rapids Plat, is deemed to meet the requirements of Minnesota 
206.10 	Statutes, section 469.174, subdivision 10, paragraph (d), clause (1), if the following 
206.11 	conditions are met:
206.12 	(1) a building on the parcel was demolished in compliance with Minnesota Statutes, 
206.13 	section 469.174, subdivision 10, paragraph (d), clause (2), after the authority adopted a 
206.14 	resolution pursuant to Minnesota Statutes, section 469.174, subdivision 10, paragraph 
206.15 	(d), clause (3); and
206.16 	(2) the request for certification of the parcel as part of a district is filed with the 
206.17 	county auditor by December 31, 2012, or three years after the date of demolition, 
206.18 	whichever is later.

206.19 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
206.20 	body of the city of Sauk Rapids with the requirements of Minnesota Statutes, section 
206.21 	645.021, subdivision 3.

206.22 	Sec. 18. SEAWAY PORT AUTHORITY OF DULUTH; TAX INCREMENT 
206.23 	FINANCING DISTRICT; SPECIAL RULES.
 206.24 	(a) If the Seaway Port Authority of Duluth adopts a tax increment financing plan 
206.25 	or plans and the governing body of the city of Duluth approves the plan or plans for one 
206.26 	or more tax increment financing districts consisting of one or more parcels identified as: 
206.27 	010-2730-00010; 010-2730-00020; 010-2730-00040; 010-2730-00050; 010-2730-00070; 
206.28 	010-2730-00080; 010-2730-00090; 010-2730-00100; 010-2730-00160; 010-2730-00180; 
206.29 	010-2730-00200; 010-2730-01250; 010-2730-01340; 010-2730-01350; 010-2730-01490; 
206.30 	010-2730-01500; 010-2730-01510; 010-2730-01520; 010-2730-01530; 010-2730-01540; 
206.31 	010-2730-01550; 010-2730-01560; 010-2730-01570; 010-2730-01580; 010-2730-01590; 
206.32 	010-2730-1300; 010-2746-1330; 010-2746-1440; 010-2746-1380; 010-3300-4560; 
206.33 	010-3300-4565; 010-3300-04570; 010-3300-04580; 010-3300-04640; 010-3300-04645; 
207.1 	and 010-3300-04650, the five-year rule under Minnesota Statutes, section 469.1763, 
207.2 	subdivision 3, that activities must be undertaken within a five-year period from the date 
207.3 	of certification of a tax increment financing district, must be considered to be met if the 
207.4 	activities are undertaken within five years after the date all qualifying parcels are delisted 
207.5 	from the Federal Superfund list.
207.6 	(b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4, 
207.7 	beginning in the sixth year following certification of the district requirement, will begin 
207.8 	in the sixth year following the date all qualifying parcels are delisted from the Federal 
207.9 	Superfund list. 
207.10 	(c) For purposes of this section, "qualifying parcels" means United States Steel 
207.11 	parcels listed in paragraph (a) and shown by the Minnesota Pollution Control Agency as 
207.12 	part of the USS Site (USEPA OU 02) that are:
207.13 	(1) included in the tax increment financing district; and
207.14 	(2) on which actions are taken that meet the requirements of Minnesota Statutes, 
207.15 	section 469.176, subdivision 6.
207.16 	(d) In addition to the reporting requirements of Minnesota Statutes, section 469.175, 
207.17 	subdivision 5, the Seaway Port Authority of Duluth shall report the status of all parcels 
207.18 	listed in paragraph (a) and shown as part of the USS Site (USEPA OU 02). The status 
207.19 	report must show the parcel numbers, the listed or delisted status, and if delisted, the 
207.20 	delisting date.

207.21 	EFFECTIVE DATE. This section is effective upon approval by the governing 
207.22 	body of the city of Duluth and compliance with Minnesota Statutes, section 645.021, 
207.23 	subdivision 3.

207.24 	Sec. 19. CITY OF MANKATO; TAX INCREMENT FINANCING DISTRICT; 
207.25 	PROJECT REQUIREMENTS.
 207.26 		Subdivision 1.Expenditures outside district. Notwithstanding Minnesota Statutes, 
207.27 	section 469.1763, subdivision 2, or any other law to the contrary, the city of Mankato may 
207.28 	expend increments generated from its South Riverfront tax increment financing district for 
207.29 	construction of street and roadway improvements under the Sibley Parkway Plan, provided 
207.30 	the improvements are located within 500 feet or less of the boundaries of the district.
207.31 		Subd. 2.Five-year rule. The five-year rule under Minnesota Statutes, section 
207.32 	469.1763, subdivision 3, is extended to an 11-year period for the South Riverfront tax 
207.33 	increment financing district.

208.1 	EFFECTIVE DATE. This section is effective upon approval by the governing 
208.2 	body of the city of Mankato and upon compliance by the city with Minnesota Statutes, 
208.3 	section 645.021, subdivision 3.

208.4 	Sec. 20. CITY OF FARIBAULT; JOBZ EXTENSION.
 208.5 	Notwithstanding the provisions of Minnesota Statutes, section 469.312, subdivision 
208.6 	5, the city of Faribault may, with approval by the commissioner of employment and 
208.7 	economic development, extend the duration of a job opportunity building zone located 
208.8 	within its corporate boundaries by five years. This authority applies to a zone that borders 
208.9 	on Trunk Highway No. I-35 and Park Avenue. The authority to extend the duration of 
208.10 	the zone applies only if the city enters a business subsidy agreement that provides for a 
208.11 	business, which is engaged in manufacturing products that increase the efficiency of the 
208.12 	use of energy resources, to construct or improve a facility in the zone.
208.13 	The authority to extend the duration of a zone under this section expires January 1, 
208.14 	2011.

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

208.16 	ARTICLE 12
208.17 	MINERALS

208.18 	Section 1. Minnesota Statutes 2008, section 298.001, is amended by adding a 
208.19 	subdivision to read:
208.20 		Subd. 10.Nonferrous minerals assistance area. The area of the "nonferrous 
208.21 	minerals assistance area" means the area of the following independent school districts, or 
208.22 	their successor districts:
208.23 	(1) No. 166, Cook County;
208.24 	(2) No. 316, Coleraine;
208.25 	(3) No. 318, Grand Rapids;
208.26 	(4) No. 319, Nashwauk-Keewatin;
208.27 	(5) No. 381, Lake Superior;
208.28 	(6) No. 695, Chisholm;
208.29 	(7) No. 696, Ely;
208.30 	(8) No. 701, Hibbing;
208.31 	(9) No. 706, Virginia;
208.32 	(10) No. 712, Mountain Iron-Buhl;
208.33 	(11) No. 2711, Mesabi-East;
209.1 	(12) No. 2142, St. Louis County; and
209.2 	(13) No. 2154, Eveleth-Gilbert.

209.3 	Sec. 2. Minnesota Statutes 2008, section 298.018, subdivision 1, is amended to read:
209.4 		Subdivision 1.Within taconite nonferrous minerals assistance area. The 
209.5 	proceeds of the tax paid under sections 298.015 to 298.017 on minerals and energy 
209.6 	resources mined or extracted within the taconite nonferrous minerals assistance area 
209.7 	defined in section 273.1341, shall be allocated as follows: 
209.8 	(1) five percent to the city or town within which the minerals or energy resources 
209.9 	are mined or extracted;
209.10 	(2) ten percent to the taconite municipal aid account to be distributed as provided 
209.11 	in section 298.282 to qualifying municipalities, as defined in section 298.282, located in 
209.12 	the nonferrous minerals assistance area; 
209.13 	(3) ten percent to the school district within which the minerals or energy resources 
209.14 	are mined or extracted;
209.15 	(4) 20 30 percent to a group of school districts comprised of those school districts 
209.16 	wherein the mineral or energy resource was mined or extracted or in which there is a 
209.17 	qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion 
209.18 	to school district indexes as follows: for each school district, its pupil units determined 
209.19 	under section 126C.05 for the prior school year shall be multiplied by the ratio of the 
209.20 	average adjusted net tax capacity per pupil unit for school districts receiving aid under 
209.21 	this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 
209.22 	ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 
209.23 	Each district shall receive that portion of the distribution which its index bears to the sum 
209.24 	of the indices for all school districts that receive the distributions. These amounts are not 
209.25 	subject to sections 126C.21, subdivision 4, and 126C.48, subdivision 8; 
209.26 	(5) 20 percent to the county within which the minerals or energy resources are 
209.27 	mined or extracted;
209.28 	(6) 20 percent to St. Louis County acting as the counties' fiscal agent to be 
209.29 	distributed as provided in sections 273.134 to 273.136;
209.30 	(7) five percent to the Iron Range Resources and Rehabilitation Board for the 
209.31 	purposes of section 298.22; 
209.32 	(8) five (7) ten percent to the Douglas J. Johnson economic protection trust fund; and
209.33 	(9) five (8) ten percent to the taconite environmental protection fund.
209.34 	The proceeds of the tax shall be distributed on July 15 each year.

210.1 	Sec. 3. Minnesota Statutes 2008, section 298.018, subdivision 2, is amended to read:
210.2 		Subd. 2.Outside taconitenonferrous minerals assistance area. The proceeds of 
210.3 	the tax paid under sections 298.015 to 298.017 on minerals and energy resources mined or 
210.4 	extracted outside of the taconitenonferrous minerals assistance area defined in section 
210.5 	273.1341, shall be deposited in the general fund. 

210.6 	Sec. 4. Minnesota Statutes 2008, section 298.018, is amended by adding a subdivision 
210.7 	to read:
210.8 		Subd. 3.Segregation of funds. The proceeds of the tax allocated under subdivision 
210.9 	1, clauses (2), (6), (7), and (8), including the investment earnings on the funds, must be 
210.10 	segregated and separately accounted for in the respective funds or accounts to which 
210.11 	they are allocated. These amounts must only be distributed to municipalities within the 
210.12 	nonferrous minerals assistance area or used for projects within the area.

210.13 	Sec. 5. Minnesota Statutes 2008, section 298.227, is amended to read:
210.14 	298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
210.15 	(a) An amount equal to that distributed pursuant to each taconite producer's taxable 
210.16 	production and qualifying sales under section 298.28, subdivision 9a, shall be held by 
210.17 	the Iron Range Resources and Rehabilitation Board in a separate taconite economic 
210.18 	development fund for each taconite and direct reduced ore producer. Money from the 
210.19 	fund for each producer shall be released by the commissioner after review by a joint 
210.20 	committee consisting of an equal number of representatives of the salaried employees and 
210.21 	the nonsalaried production and maintenance employees of that producer. The District 11 
210.22 	director of the United States Steelworkers of America, on advice of each local employee 
210.23 	president, shall select the employee members. In nonorganized operations, the employee 
210.24 	committee shall be elected by the nonsalaried production and maintenance employees. 
210.25 	The review must be completed no later than six months after the producer presents a 
210.26 	proposal for expenditure of the funds to the committee. The funds held pursuant to this 
210.27 	section may be released only for workforce development and associated public facility 
210.28 	improvement, or for acquisition of plant and stationary mining equipment and facilities 
210.29 	for the producer or for research and development in Minnesota on new mining, or 
210.30 	taconite, iron, or steel production technology, but only if the producer provides a matching 
210.31 	expenditure to be used for the same purpose of at least 50 percent of the distribution 
210.32 	based on 14.7 cents per ton beginning with distributions in 2002. Effective for proposals 
210.33 	for expenditures of money from the fund beginning May 26, 2007, the commissioner 
210.34 	may not release the funds before the next scheduled meeting of the board. If the board 
211.1 	rejects a proposed expenditure, the funds must be deposited in the Taconite Environmental 
211.2 	Protection Fund under sections 298.222 to 298.225. If a producer uses money which has 
211.3 	been released from the fund prior to May 26, 2007 to procure haulage trucks, mobile 
211.4 	equipment, or mining shovels, and the producer removes the piece of equipment from the 
211.5 	taconite tax relief area defined in section 273.134 within ten years from the date of receipt 
211.6 	of the money from the fund, a portion of the money granted from the fund must be repaid 
211.7 	to the taconite economic development fund. The portion of the money to be repaid is 100 
211.8 	percent of the grant if the equipment is removed from the taconite tax relief area within 12 
211.9 	months after receipt of the money from the fund, declining by ten percent for each of the 
211.10 	subsequent nine years during which the equipment remains within the taconite tax relief 
211.11 	area. If a taconite production facility is sold after operations at the facility had ceased, any 
211.12 	money remaining in the fund for the former producer may be released to the purchaser of 
211.13 	the facility on the terms otherwise applicable to the former producer under this section. If 
211.14 	a producer fails to provide matching funds for a proposed expenditure within six months 
211.15 	after the commissioner approves release of the funds, the funds are available for release to 
211.16 	another producer in proportion to the distribution provided and under the conditions of 
211.17 	this section. Any portion of the fund which is not released by the commissioner within 
211.18 	one year of its deposit in the fund shall be divided between the taconite environmental 
211.19 	protection fund created in section 298.223 and the Douglas J. Johnson economic protection 
211.20 	trust fund created in section 298.292 for placement in their respective special accounts. 
211.21 	Two-thirds of the unreleased funds shall be distributed to the taconite environmental 
211.22 	protection fund and one-third to the Douglas J. Johnson economic protection trust fund. 
211.23 	(b) Notwithstanding the requirements of paragraph (a), setting the amount of 
211.24 	distributions and the review process, an amount equal to ten cents per taxable ton of 
211.25 	production in 2007, for distribution in 2008 only, that would otherwise be distributed 
211.26 	under paragraph (a), may be used for a loan for the cost of construction of providing for
211.27 	a biomass energy facility. This amount must be deducted from the distribution under 
211.28 	paragraph (a) for which a matching expenditure by the producer is not required. The 
211.29 	granting of the loan is subject to approval by the Iron Range Resources and Rehabilitation 
211.30 	Board; interest must be payable on the loan at the rate prescribed in section 298.2213, 
211.31 	subdivision 3. Repayments of the loan and interest must be deposited in the northeast 
211.32 	Minnesota economic development fund established in section 298.2213. If a loan is not 
211.33 	made under this paragraph by July 1, 2009 2010, the amount that had been made available 
211.34 	for the loan under this paragraph must be transferred to the northeast Minnesota economic 
211.35 	development fund. Money distributed in 2008 to the fund established under this section 
212.1 	that exceeds ten cents per ton is available to qualifying producers under paragraph (a) 
212.2 	on a pro rata basis.
212.3 	If 2008 H.F. No. 1812 is enacted and includes a provision that amends this section 
212.4 	in a manner that is different from the amendment in this section, the amendment in this 
212.5 	section supersedes the amendment in 2008 H.F. No. 1812, notwithstanding section 645.26.

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

212.7 	Sec. 6. Minnesota Statutes 2008, section 298.24, subdivision 1, is amended to read:
212.8 		Subdivision 1.Imposed; calculation. (a) For concentrate produced in 2001, 2002, 
212.9 	and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and 
212.10 	quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon 
212.11 	the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore 
212.12 	concentrate produced therefrom. For concentrates produced in 2005 2009, the tax rate is 
212.13 	the same rate imposed for concentrates produced in 2004 2008. For concentrates produced 
212.14 	in 2009 and subsequent years, the tax is also imposed upon other iron-bearing material.
212.15 	(b) For concentrates produced in 2006 2010 and subsequent years, the tax rate shall 
212.16 	be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax 
212.17 	rate multiplied by the percentage increase in the implicit price deflator from the fourth 
212.18 	quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit 
212.19 	price deflator" means the implicit price deflator for the gross domestic product prepared by 
212.20 	the Bureau of Economic Analysis of the United States Department of Commerce.
212.21 	(c) An additional tax is imposed equal to three cents per gross ton of merchantable 
212.22 	iron ore concentrate for each one percent that the iron content of the product exceeds 72 
212.23 	percent, when dried at 212 degrees Fahrenheit.
212.24 	(d) The tax on taconite and iron sulphides shall be imposed on the average of the 
212.25 	production for the current year and the previous two years. The rate of the tax imposed 
212.26 	will be the current year's tax rate. This clause shall not apply in the case of the closing 
212.27 	of a taconite facility if the property taxes on the facility would be higher if this clause 
212.28 	and section 298.25 were not applicable. The tax on other iron-bearing material shall be 
212.29 	imposed on the current year production.
212.30 	(e) If the tax or any part of the tax imposed by this subdivision is held to be 
212.31 	unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate 
212.32 	produced shall be imposed.
212.33 	(f) Consistent with the intent of this subdivision to impose a tax based upon the 
212.34 	weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 
212.35 	determine the weight of merchantable iron ore concentrate included in fluxed pellets by 
213.1 	subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 
213.2 	flux additives included in the pellets from the weight of the pellets. For purposes of this 
213.3 	paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 
213.4 	olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 
213.5 	No subtraction from the weight of the pellets shall be allowed for binders, mineral and 
213.6 	chemical additives other than basic flux additives, or moisture.
213.7 	(g)(1) Notwithstanding any other provision of this subdivision, for the first two years 
213.8 	of a plant's commercial production of direct reduced ore from ore mined in this state, no 
213.9 	tax is imposed under this section. As used in this paragraph, "commercial production" is 
213.10 	production of more than 50,000 tons of direct reduced ore in the current year or in any 
213.11 	prior year, "noncommercial production" is production of 50,000 tons or less of direct 
213.12 	reduced ore in any year, and "direct reduced ore" is ore that results in a product that has an 
213.13 	iron content of at least 75 percent. For the third year of a plant's commercial production of 
213.14 	direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate 
213.15 	otherwise determined under this subdivision. For the fourth commercial production year, 
213.16 	the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth 
213.17 	commercial production year, the rate is 75 percent of the rate otherwise determined under 
213.18 	this subdivision; and for all subsequent commercial production years, the full rate is 
213.19 	imposed.
213.20 	(2) Subject to clause (1), production of direct reduced ore in this state is subject to 
213.21 	the tax imposed by this section, but if that production is not produced by a producer of 
213.22 	taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron 
213.23 	sulfides, or other iron-bearing material, that is consumed in the production of direct 
213.24 	reduced iron in this state is not subject to the tax imposed by this section on taconite, 
213.25 	iron sulfides, or other iron-bearing material.
213.26 	(3) Notwithstanding any other provision of this subdivision, no tax is imposed 
213.27 	on direct reduced ore under this section during the facility's noncommercial production 
213.28 	of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 
213.29 	production of direct reduced ore is subject to the tax imposed by this section on taconite 
213.30 	and iron sulphides. Three-year average production of direct reduced ore does not 
213.31 	include production of direct reduced ore in any noncommercial year. Three-year average 
213.32 	production for a direct reduced ore facility that has noncommercial production is the 
213.33 	average of the commercial production of direct reduced ore for the current year and the 
213.34 	previous two commercial years.
213.35 	(4) This paragraph applies only to plants for which all environmental permits have 
213.36 	been obtained and construction has begun before July 1, 2008.

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

214.2 	Sec. 7. Minnesota Statutes 2008, section 298.28, subdivision 2, is amended to read:
214.3 		Subd. 2.City or town where quarried or produced. (a) 4.5 6.5 cents per gross 
214.4 	ton of merchantable iron ore concentrate, hereinafter referred to as "taxable ton," must be 
214.5 	allocated to the city or town in the county in which the lands from which taconite was 
214.6 	mined or quarried were located or within which the concentrate was produced. If the 
214.7 	mining, quarrying, and concentration, or different steps in either thereof are carried on in 
214.8 	more than one taxing district, the commissioner shall apportion equitably the proceeds 
214.9 	of the part of the tax going to cities and towns among such subdivisions upon the basis 
214.10 	of attributing 40 50 percent of the proceeds of the tax to the operation of mining or 
214.11 	quarrying the taconite, and the remainder to the concentrating plant and to the processes of 
214.12 	concentration, and with respect to each thereof giving due consideration to the relative 
214.13 	extent of such operations performed in each such taxing district. The commissioner's 
214.14 	order making such apportionment shall be subject to review by the Tax Court at the 
214.15 	instance of any of the interested taxing districts, in the same manner as other orders of 
214.16 	the commissioner.
214.17 	(b) Four cents per taxable ton shall be allocated to cities and organized townships 
214.18 	affected by mining because their boundaries are within three miles of a taconite mine pit 
214.19 	that has been actively mined in at least one of the prior three years. If a city or town is 
214.20 	located near more than one mine meeting these criteria, the city or town is eligible to 
214.21 	receive aid calculated from only the mine producing the largest taxable tonnage. When 
214.22 	more than one municipality qualifies for aid based on one company's production, the aid 
214.23 	must be apportioned among the municipalities in proportion to their populations. Of the 
214.24 	amounts distributed under this paragraph to each municipality, one-half must be used for 
214.25 	infrastructure improvement projects, and one-half must be used for projects in which two 
214.26 	or more municipalities cooperate. Each municipality that receives a distribution under this 
214.27 	paragraph must report annually to the Iron Range Resources and Rehabilitation Board and 
214.28 	the commissioner of Iron Range resources and rehabilitation on the projects involving 
214.29 	cooperation with other municipalities.

214.30 	EFFECTIVE DATE. This section is effective for production in 2009, for 
214.31 	distributions in 2010, and thereafter.

214.32 	Sec. 8. Minnesota Statutes 2008, section 298.28, is amended by adding a subdivision 
214.33 	to read:
215.1 		Subd. 9e.Taconite environmental fund; additional distribution. Beginning 
215.2 	with distributions in 2010, an amount equal to (i) the total taconite railroad distribution 
215.3 	paid in 2009 to counties, cities, and towns under section 298.28, subdivision 11, less (ii) 
215.4 	the equivalent of 2.0 cents per gross ton that is distributed to the cities and towns under 
215.5 	section 298.28, subdivision 2, for the current distribution year, must annually be paid 
215.6 	to the taconite environmental fund for use under section 298.223, as provided under 
215.7 	that subdivision.

215.8 	EFFECTIVE DATE. This section is effective for production in 2009, for 
215.9 	distributions in 2010, and thereafter.

215.10 	Sec. 9. Minnesota Statutes 2008, section 298.28, subdivision 11, is amended to read:
215.11 		Subd. 11.Remainder. (a) The proceeds of the tax imposed by section 298.24 which 
215.12 	remain after the distributions and payments in subdivisions 2 to 10a, as certified by the 
215.13 	commissioner of revenue, and paragraphs (b), (c), (d), and (e) have been made, together 
215.14 	with interest earned on all money distributed under this section prior to distribution, shall 
215.15 	be divided between the taconite environmental protection fund created in section 298.223
215.16 	and the Douglas J. Johnson economic protection trust fund created in section 298.292 as 
215.17 	follows: Two-thirds to the taconite environmental protection fund and one-third to the 
215.18 	Douglas J. Johnson economic protection trust fund. The proceeds shall be placed in 
215.19 	the respective special accounts. 
215.20 	(b) There shall be distributed to each city, town, and county the amount that it 
215.21 	received under section 294.26 in calendar year 1977; provided, however, that the amount 
215.22 	distributed in 1981 to the unorganized territory number 2 of Lake County and the town 
215.23 	of Beaver Bay based on the between-terminal trackage of Erie Mining Company will be 
215.24 	distributed in 1982 and subsequent years to the unorganized territory number 2 of Lake 
215.25 	County and the towns of Beaver Bay and Stony River based on the miles of track of Erie 
215.26 	Mining Company in each taxing district.
215.27 	(c) There shall be distributed to the Iron Range Resources and Rehabilitation Board 
215.28 	the amounts it received in 1977 under section 298.22. The amount distributed under 
215.29 	this paragraph shall be expended within or for the benefit of the taconite assistance area 
215.30 	defined in section 273.1341. 
215.31 	(d) (c) There shall be distributed to each school district 62 percent of the amount 
215.32 	that it received under section 294.26 in calendar year 1977. 
215.33 	(e) (d) In 2003 only, $100,000 must be distributed to a township located in a taconite 
215.34 	tax relief area as defined in section 273.134, paragraph (a), that received $119,259 of 
215.35 	homestead and agricultural credit aid and $182,014 in local government aid in 2001. 

216.1 	EFFECTIVE DATE. This section is effective for production in 2009, for 
216.2 	distributions in 2010, and thereafter.

216.3 	ARTICLE 13
216.4 	MISCELLANEOUS

216.5 	Section 1. [17.1195] BOVINE TUBERCULOSIS TESTING GRANTS.
216.6 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
216.7 	have the meanings given.
216.8 	(b) "Commissioner" means the commissioner of agriculture.
216.9 	(c) "Corporate owner of cattle" means an owner of cattle subject to tax under section 
216.10 	290.06, subdivision 1, and also a shareholder of an S corporation under section 290.9725.
216.11 		Subd. 2.Bovine tuberculosis testing grants. (a) The commissioner is authorized to 
216.12 	make grants to owners of cattle in Minnesota to offset a portion of the cost of tuberculosis 
216.13 	testing performed on the cattle. For corporate owners of cattle, the grant equals 25 percent 
216.14 	of the tuberculosis testing expenses incurred during the calendar year. For all other 
216.15 	owners, the grant equals 50 percent of tuberculosis testing expenses incurred during the 
216.16 	calendar year.
216.17 	(b) The commissioner may specify a time and manner for cattle owners to apply 
216.18 	for grants under this section, and may request supporting documentation of actual testing 
216.19 	expenses. Applications received by January 31 relating to testing expenses incurred in 
216.20 	the previous calendar year are eligible for grants. The commissioner must issue grants by 
216.21 	March 1.
216.22 	(c) If applications for grants exceed the amount available for the fiscal year, the 
216.23 	commissioner must proportionally adjust all grant amounts so that the amount awarded for 
216.24 	the year does not exceed the amount available.

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

216.26 	Sec. 2. [17.1197] BOVINE TUBERCULOSIS GRANTS; SPLIT STATE STATUS.
216.27 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
216.28 	have the meanings given.
216.29 	(b) "Commissioner" means the commissioner of agriculture.
216.30 	(c) "Owner" means an individual or corporation, including a shareholder of an S 
216.31 	corporation under section 290.9725, who owned a herd of animals subject to a whole-herd 
216.32 	test for bovine tuberculosis in calendar years 2006 through 2008 and located in the 
217.1 	modified accredited zone established as part of Minnesota's split state status as approved 
217.2 	by the United States Department of Agriculture and effective October 10, 2008. 
217.3 	(e) "Animals" means cattle, bison, and goats.
217.4 		Subd. 2.Bovine tuberculosis split state grants. (a) The commissioner is 
217.5 	authorized to make annual grants to owners to offset a portion of the cost of tuberculosis 
217.6 	testing performed on animals. The annual grant amount for each owner equals $25 per 
217.7 	animal multiplied by the largest number of animals tested as part of any whole-herd test 
217.8 	of the owner's animals occurring during the years 2006 through 2008 as reported by the 
217.9 	Board of Animal Health.
217.10 	(b) The commissioner may specify a time and manner for owners to apply for grants 
217.11 	under this section, and may request supporting documentation of actual testing expenses.
217.12 	(c) If applications for grants exceed the amount available for the fiscal year, the 
217.13 	commissioner must proportionally adjust all grant amounts so that the amount awarded for 
217.14 	the year does not exceed the amount available.
217.15 	(d) The grants made under this subdivision shall be made annually after July 1 
217.16 	and before July 15, beginning in 2010, until terminated under this paragraph. The 
217.17 	commissioner's authority to make grants under this subdivision terminates in the year 
217.18 	following the calendar year in which the Board of Animal Health certifies that the state is 
217.19 	free of bovine tuberculosis.

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

217.21 	Sec. 3. Minnesota Statutes 2008, section 270C.12, is amended by adding a subdivision 
217.22 	to read:
217.23 		Subd. 5.Duration. Notwithstanding the provisions of any statutes to the contrary, 
217.24 	including section 15.059, the coordinating committee as established by this section to 
217.25 	oversee and coordinate preparation of the microdata samples of income tax returns and 
217.26 	other information does not expire.

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

217.28 	Sec. 4. Minnesota Statutes 2008, section 270C.445, is amended to read:
217.29 	270C.445 TAX PREPARATION SERVICES.
217.30 		Subdivision 1.Scope. This section applies to a person who provides tax preparation 
217.31 	services., except:
217.32 	(1) a person who provides tax preparation services for fewer than ten clients in a 
217.33 	calendar year;
218.1 	(2) a person who provides tax preparation services only to immediate family 
218.2 	members. For the purposes of this section, "immediate family members" means a spouse, 
218.3 	parent, grandparent, child, or sibling;
218.4 	(3) an employee who prepares a tax return for an employer's business;
218.5 	(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of 
218.6 	the fiduciary estate, testator, trustor, grantor, or beneficiaries of them; and
218.7 	(5) nonprofit organizations providing tax preparation services under the Internal 
218.8 	Revenue Service Volunteer Income Tax Assistance Program or Tax Counseling for the 
218.9 	Elderly Program.
218.10 		Subd. 2.Definitions. (a) For purposes of this section, the following terms have 
218.11 	the meanings given.
218.12 	(b) "Client" means an individual for whom a tax preparer performs or agrees to 
218.13 	perform tax preparation services.
218.14 	(c) "Person" means an individual, corporation, partnership, limited liability 
218.15 	company, association, trustee, or other legal entity.
218.16 	(d) "Refund anticipation loan" means a loan or any other extension of credit, whether 
218.17 	provided by the tax preparer or another entity such as a financial institution, in anticipation 
218.18 	of, and whose payment is secured by, a client's federal or state income tax refund or both.
218.19 	(e) "Tax preparation services" means services provided for a fee or other 
218.20 	consideration to a client to:
218.21 	(1) assist with preparing or filing state or federal individual income tax returns;
218.22 	(2) assume final responsibility for completed work on an individual income tax 
218.23 	return on which preliminary work has been done by another; or
218.24 	(3) offer or facilitate the provision of refund anticipation loans and refund 
218.25 	anticipation checks.
218.26 	(f) "Tax preparer" or "preparer" means a person providing tax preparation services 
218.27 	subject to this section.
218.28 	(g) "Advertise" means to solicit business through any means or medium.
218.29 	(h) "Facilitate" means to individually or in conjunction or cooperation with another 
218.30 	person: 
218.31 	(1) accept an application for a refund anticipation loan; 
218.32 	(2) pay to a client the proceeds, through direct deposit, a negotiable instrument, or 
218.33 	any other means, of a refund anticipation loan; or 
218.34 	(3) offer, arrange, process, provide, or in any other manner act to allow the making 
218.35 	of, a refund anticipation loan.
219.1 	(i) "Refund anticipation check" means a negotiable instrument provided to a client 
219.2 	by the tax preparer or another person, which is issued from the proceeds of a taxpayer's 
219.3 	federal or state income tax refund or both and represents the net of the refund minus the tax 
219.4 	preparation fee and any other fees. A refund anticipation check includes a refund transfer.
219.5 		Subd. 3.Standards of conduct. No tax preparer shall:
219.6 	(1) without good cause fail to promptly, diligently, and without unreasonable delay 
219.7 	complete a client's tax return;
219.8 	(2) obtain the signature of a client to a tax return or authorizing document that 
219.9 	contains blank spaces to be filled in after it has been signed;
219.10 	(3) fail to sign a client's tax return when payment for services rendered has been 
219.11 	made;
219.12 	(4) fail or refuse to give a client a copy of any document requiring the client's 
219.13 	signature within a reasonable time after the client signs the document;
219.14 	(5) fail to retain for at least four years a copy of individual income tax returns;
219.15 	(6) fail to maintain a confidential relationship between themselves and their with
219.16 	clients or former clients;
219.17 	(7) fail to take commercially reasonable measures to safeguard a client's nonpublic 
219.18 	personal information;
219.19 	(8) make, authorize, publish, disseminate, circulate, or cause to make, either directly 
219.20 	or indirectly, any false, deceptive, or misleading statement or representation relating to or 
219.21 	in connection with the offering or provision of tax preparation services;
219.22 	(9) require a client to enter into a loan arrangement in order to complete a tax return;
219.23 	(10) claim credits or deductions on a client's tax return for which the tax preparer 
219.24 	knows or reasonably should know the taxpayer client does not qualify;
219.25 	(11) charge, offer to accept, or accept a fee based upon a percentage of an anticipated 
219.26 	refund for tax preparation services;
219.27 	(12) under any circumstances, withhold or fail to return to a client a document 
219.28 	provided by the client for use in preparing the client's tax return.;
219.29 	(13) establish an account in the preparer's name to receive a client's refund through 
219.30 	a direct deposit or any other instrument unless the client's name is also on the account, 
219.31 	except that a taxpayer may assign the portion of a refund representing the Minnesota 
219.32 	education credit available under section 290.0674 to a bank account without the client's 
219.33 	name, as provided under section 290.0679;
219.34 	(14) fail to act in the best interests of the client;
219.35 	(15) fail to safeguard and account for any money handled for the client;
220.1 	(16) fail to disclose all material facts of which the preparer has knowledge which 
220.2 	might reasonably affect the client's rights and interests;
220.3 	(17) violate any provision of section 332.37;
220.4 	(18) include any of the following in any document provided or signed in connection 
220.5 	with the provision of tax preparation services:
220.6 	(i) a hold harmless clause;
220.7 	(ii) a confession of judgment or a power of attorney to confess judgment against the 
220.8 	client or appear as the client in any judicial proceeding;
220.9 	(iii) a waiver of the right to a jury trial, if applicable, in any action brought by or 
220.10 	against a debtor;
220.11 	(iv) an assignment of or an order for payment of wages or other compensation for 
220.12 	services;
220.13 	(v) a provision in which the client agrees not to assert any claim or defense otherwise 
220.14 	available;
220.15 	(vi) a waiver of any provision of this section or a release of any obligation required 
220.16 	to be performed on the part of the tax preparer; or
220.17 	(vii) a waiver of the right to injunctive, declaratory, or other equitable relief or 
220.18 	relief on a class basis; or
220.19 	(19) if making, providing, or facilitating a refund anticipation loan, fail to provide all 
220.20 	disclosures required by the federal Truth in Lending Act, United States Code, title 15, in a 
220.21 	form that may be retained by the client.
220.22 		Subd. 3a.Written agreements required; refund anticipation loans and checks.
 220.23 	(a) All agreements to make, provide, or facilitate a refund anticipation loan or refund 
220.24 	anticipation check must be in writing. No agreement may include a provision that 
220.25 	directly or indirectly arranges for payment of or deduction from any portion of the refund 
220.26 	anticipation loan or refund anticipation check for check cashing, credit insurance, attorney 
220.27 	fees, or the collection of any debt owed to any party for any other good or service other 
220.28 	than a debt owed to the facilitator for the repayment of a refund anticipation loan and tax 
220.29 	preparation fees associated with the refund anticipation loan or refund anticipation check.
220.30 	(b) If a written agreement contains a mandatory arbitration clause, the tax preparer 
220.31 	must provide a separate written notice to the client that: 
220.32 	(1) arbitration is the exclusive means of dispute resolution for any dispute about the 
220.33 	written agreement;
220.34 	(2) the client has the right to affirmatively opt out of the arbitration clause within 30 
220.35 	days of entering into an agreement; and 
221.1 	(3) the client is not bound to arbitration if the claim or dispute involves a violation of 
221.2 	this section or the client invokes the remedies provided in subdivision 7.
221.3 	The tax preparer must advise the client, both orally and in writing, of the process by 
221.4 	which the client may exercise the right to opt out of the mandatory arbitration clause.
221.5 		Subd. 4.Required disclosures; refund anticipation loans. (a) IfBefore or at the 
221.6 	same time a tax preparer offers to make or facilitate a refund anticipation loan to the 
221.7 	client, the preparer must make the disclosures in this subdivision. The disclosures must 
221.8 	be made before or at the same time the preparer offers the refund anticipation loan to the 
221.9 	client. subdivision 4a. Before or at the same time a tax preparer offers or facilitates a 
221.10 	refund anticipation check or refund transfer, the tax preparer must make the disclosures 
221.11 	in subdivision 4b.
221.12 	(b) The disclosures must be provided to a client in a written notice on a single sheet 
221.13 	of paper, separate from any other document or writing.
221.14 	(c) All required statements must be in capital and small font type fonts, in a 
221.15 	minimum of 14-point type, with at least a double space between each statement.
221.16 	(d) The notice must be signed and dated by the tax preparer and the client.
221.17 	(e) All required disclosures, notices, and statements must be provided in the client's 
221.18 	primary language, if the tax preparer advertises in that language.
221.19 	(b) The tax preparer must provide to a client a written notice on a single sheet of 
221.20 	paper, separate from any other document or writing, containing:
221.21 	(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters, 
221.22 	and in 28-point type stating "NOTICE";
221.23 	(2) the following verbatim statements:
221.24 	(i) "This is a loan. The annual percentage rate (APR), based on the estimated 
221.25 	payment period, is (fill in the estimated APR)."
221.26 	(ii) "Your refund will be used to repay the loan. As a result, the amount of your 
221.27 	refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other 
221.28 	charges."
221.29 	(iii) "You can get your refund in about two weeks if you file your return electronically 
221.30 	and have the Internal Revenue Service send your refund to your own bank account." and
221.31 	(3) if the client is subject to additional interest when a refund is delayed, the 
221.32 	following verbatim statement must also be included in the notice: "If you choose to take 
221.33 	this loan and your refund is delayed, you may have to pay additional interest."
221.34 	(c) All required statements must be in capital and small font type fonts, in a 
221.35 	minimum of 14-point type, with at least a double space between each line in the statement 
221.36 	and four spaces between each statement.
222.1 	(d) The notice must be signed and dated by the tax preparer and the client.
222.2 		Subd. 4a.Refund anticipation loan disclosures. The disclosure required under 
222.3 	subdivision 4 for a refund anticipation loan must contain:
222.4 	(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters, 
222.5 	and in 28-point type stating "NOTICE";
222.6 	(2) the following verbatim statements:
222.7 	(i) "This is a loan. This is not your refund. The annual percentage rate (APR), based 
222.8 	on the estimated payment period, is (fill in the estimated APR).";
222.9 	(ii) "Your refund will be used to repay the loan. As a result, the amount of your 
222.10 	refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other 
222.11 	charges.";
222.12 	(iii) "You have the right to cancel this transaction by returning the loan check or the 
222.13 	amount of the loan in cash within one business day after you get the loan."; and
222.14 	(iv) "You can get your refund in about two weeks if you file your return electronically 
222.15 	and have the Internal Revenue Service send your refund to your own bank account."; and
222.16 	(3) if the client is subject to additional interest when a refund is delayed, the 
222.17 	following verbatim statement must also be included in the notice: "If you choose to take 
222.18 	this loan and your refund is delayed, you may have to pay."
222.19 		Subd. 4b.Refund anticipation check disclosures. (a) The disclosure required 
222.20 	under subdivision 4 for a refund anticipation check must contain:
222.21 	(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters, 
222.22 	and in 28-point type stating "NOTICE";
222.23 	(2) the following verbatim statements:
222.24 	(i) "You do not have to purchase a refund anticipation check (RAC) to get your tax 
222.25 	refund.";
222.26 	(ii) "Generally the IRS can direct deposit your income tax refund to your personal 
222.27 	bank account within 8 to 15 days after the IRS accepts your tax return for processing.";
222.28 	(iii) "If you choose to purchase a RAC, your tax return funds will generally be 
222.29 	made available to you within 8 to 15 days.";
222.30 	(iv) "A RAC is not a loan.";
222.31 	(v) "The cost of the RAC is $ (fill in dollar amount).";
222.32 	(vi) "You can either pay for your RAC now or you can have it withheld from your 
222.33 	refund."; and
222.34 	(vii) "The cost of your tax return is not any more or any less if you purchase a RAC."
223.1 	(b) A tax preparer offering a refund anticipation check that uses a different product 
223.2 	name, including but not limited to refund transfer, must substitute the product name for 
223.3 	"RAC" in all the statements required under this subdivision.
223.4 		Subd. 5.Itemized bill required. A tax preparer must provide an itemized statement 
223.5 	of the charges for services, at least separately stating the charges for:
223.6 	(1) return preparation; and
223.7 	(2) providing or facilitating a refund anticipation loan.; and
223.8 	(3) each fee associated with the provision of a refund anticipation check.
223.9 		Subd. 5a.Nongame wildlife checkoff. A tax preparer must give written notice of 
223.10 	the option to contribute to the nongame wildlife management account in section 290.431
223.11 	to corporate clients that file an income tax return and to individual clients who file an 
223.12 	income tax return or property tax refund claim form. This notification must be included 
223.13 	with information sent to the client at the same time as the preliminary worksheets or other 
223.14 	documents used in preparing the client's return and must include a line for displaying 
223.15 	contributions.
223.16 		Subd. 5b.Right to rescind refund anticipation loan. (a) A client may rescind a 
223.17 	refund anticipation loan on or before the close of business on the next day of business 
223.18 	following execution of the loan agreement or receipt of the proceeds of the loan by 
223.19 	providing written notification to the tax preparer of the rescission, and either returning the 
223.20 	original check issued for the loan, or tendering the amount of the loan to the tax preparer.
223.21 	(b) The tax preparer may charge a fee for rescinding a refund anticipation loan 
223.22 	only if an account has been established at a financial institution to electronically receive 
223.23 	the refund and the financial institution has charged a fee to establish the account. The 
223.24 	allowable fee the tax preparer may charge the client rescinding the refund anticipation 
223.25 	loan may not exceed the fee charged to the tax preparer by the financial institution to 
223.26 	establish the account.
223.27 		Subd. 6.Enforcement; penalties. The commissioner may impose an administrative 
223.28 	penalty of not more than $1,000 per violation of subdivision 3, 3a, 4, or 5, or 5b, provided 
223.29 	that a penalty may not be imposed for any conduct that is also subject to the tax return 
223.30 	preparer penalties in section 289A.60, subdivision 13. The commissioner may terminate a 
223.31 	tax preparer's authority to transmit returns electronically to the state, if the commissioner 
223.32 	determines the tax preparer engaged in a pattern and practice of violating this section. 
223.33 	Imposition of a penalty under this subdivision is subject to the contested case procedure 
223.34 	under chapter 14. The commissioner shall collect the penalty in the same manner as the 
223.35 	income tax. Penalties imposed under this subdivision are public data.
224.1 		Subd. 6a.Exchange of data; State Board of Accountancy. The State Board of 
224.2 	Accountancy shall refer to the commissioner complaints it receives about tax preparers 
224.3 	who are not subject to the jurisdiction of the State Board of Accountancy and who are 
224.4 	alleged to have violated the provisions of subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b.
224.5 		Subd. 6b.Exchange of data; Lawyers Board of Professional Responsibility. The 
224.6 	Lawyers Board of Professional Responsibility may refer to the commissioner complaints 
224.7 	it receives about tax preparers who are not subject to its jurisdiction and who are alleged 
224.8 	to have violated the provisions of subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b.
224.9 		Subd. 6c.Exchange of data; commissioner. The commissioner shall refer 
224.10 	complaints about tax preparers who are alleged to have violated the provisions of 
224.11 	subdivisions 3 to, 3a, 4, 4a, 4b, 5, and 5b to:
224.12 	(1) the State Board of Accountancy, if the tax preparer is under its jurisdiction; and
224.13 	(2) the Lawyers Board of Professional Responsibility, if the tax preparer is under 
224.14 	its jurisdiction.
224.15 		Subd. 6d.Data private. Information exchanged on individuals under subdivisions 
224.16 	6a to 6c are private data under section 13.02, subdivision 12, until such time as a penalty 
224.17 	is imposed as provided in section 326A.08 or by the Lawyers Board of Professional 
224.18 	Responsibility.
224.19 		Subd. 7.Enforcement; civil actions. (a) Any violation of this section is an unfair, 
224.20 	deceptive, and unlawful trade practice within the meaning of section 8.31. An action taken 
224.21 	under section 8.31 is in the public interest.
224.22 	(b) A client may bring a civil action seeking redress for a violation of this section in 
224.23 	the conciliation or the district court of the county in which unlawful action is alleged to 
224.24 	have been committed or where the respondent resides or has a principal place of business.
224.25 	(c) A district court finding for the plaintiff must award:
224.26 	(1) actual damages, including;
224.27 	(2) incidental and consequential damages,;
224.28 	(3) statutory damages of twice the sum of: (i) the tax preparation fees; and (ii) if the 
224.29 	plaintiff violated subdivision 3a, 4, or 5b all interest and fees for a refund anticipation loan;
224.30 	(4) reasonable attorney fees,;
224.31 	(5) court costs,; and
224.32 	(6) any other equitable relief as the court considers appropriate.
224.33 		Subd. 8.Limited exemptions; enforcement provisions.  The provisions of this 
224.34 	section, except for subdivision subdivisions 3a, 4, and 5b, do not apply to:
224.35 	(1) an attorney admitted to practice under section 481.01;
225.1 	(2) a certified public accountant or other person who is subject to the jurisdiction of 
225.2 	the State Board of Accountancy;
225.3 	(3) an enrolled agent who has passed the special enrollment examination 
225.4 	administered by the Internal Revenue Service; or
225.5 	(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of 
225.6 	the fiduciary estate, the testator, trustor, grantor, or beneficiaries of them;
225.7 	(5) a tax preparer who provides tax preparation services for fewer than six clients 
225.8 	in a calendar year;
225.9 	(6) tax preparation services to a spouse, parent, grandparent, child, or sibling of 
225.10 	the tax preparer; and
225.11 	(7) the preparation by an employee of the tax return of the employee's employer
225.12 	(4) anyone who provides, or assists in providing, tax preparation services within 
225.13 	the scope of duties as an employee or supervisor of a person who is exempt under this 
225.14 	subdivision.

225.15 	Sec. 5. Minnesota Statutes 2008, section 270C.56, subdivision 3, is amended to read:
225.16 		Subd. 3.Procedure for assessment; claims for refunds. (a) The commissioner 
225.17 	may assess liability for the taxes described in subdivision 1 against a person liable 
225.18 	under this section. The assessment may be based upon information available to the 
225.19 	commissioner. It must be made within the prescribed period of limitations for assessing 
225.20 	the underlying tax, or within one year after the date of an order assessing underlying tax, 
225.21 	whichever period expires later. An order assessing personal liability under this section is 
225.22 	reviewable under section 270C.35 and is appealable to Tax Court.
225.23 	(b) If the time for appealing the order has expired and a payment is made by or 
225.24 	collected from the person assessed on the order in excess of the amount lawfully due 
225.25 	from that person of any portion of the liability shown on the order, a claim for refund 
225.26 	may be made by that person within 120 days after any payment of the liability if the 
225.27 	payment is within 3-1/2 years after the date the order was issued. Claims for refund under 
225.28 	this paragraph are limited to the amount paid during the 120-day period. Any amounts 
225.29 	collected under paragraph (c) after a claim for refund is filed in order to satisfy the unpaid 
225.30 	balance of the assessment that is the subject of the claim shall be returned if the claim is 
225.31 	allowed. There is no claim for refund available under this paragraph if the assessment has 
225.32 	previously been the subject of an administrative or Tax Court appeal, or a denied claim 
225.33 	for refund. The taxpayer may contest denial of the refund as provided in the procedures 
225.34 	governing claims for refunds under section 289A.50, subdivision 7.
226.1 	(c) If a person has been assessed under this section for an amount for a given period 
226.2 	and the time for appeal has expired, regardless of whether an action contesting denial of a 
226.3 	claim for refund has been filed under paragraph (b), or there has been a final determination 
226.4 	that the person is liable, collection action is not stayed pursuant to section 270C.33, 
226.5 	subdivision 5, for that assessment or for subsequent assessments of additional amounts for 
226.6 	the same person for the same period and tax type.

226.7 	EFFECTIVE DATE. This section is effective for orders issued after the date of 
226.8 	final enactment.

226.9 	Sec. 6. Minnesota Statutes 2008, section 275.07, is amended by adding a subdivision 
226.10 	to read:
226.11 		Subd. 6.Recertification due to unallotment. If a local government's December 
226.12 	aid or credit payments under sections 477A.011 to 477A.014 and section 273.1384 are 
226.13 	reduced due to unallotment under section 16A.152, the local government may recertify 
226.14 	its levy under subdivision 1, by January 15 of the year in which the levy will be paid. 
226.15 	The local government must report the recertified amount to the county auditor within 
226.16 	two business days of January 15 or the levy will remain at the amount certified under 
226.17 	subdivision 1. Notwithstanding subdivision 4, the county auditor shall report to the 
226.18 	commissioner of revenue any recertified levies under this subdivision by January 30 
226.19 	of the year in which the levy will be paid.

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

226.21 	Sec. 7. Minnesota Statutes 2008, section 275.70, subdivision 5, is amended to read:
226.22 		Subd. 5.Special levies. "Special levies" means those portions of ad valorem taxes 
226.23 	levied by a local governmental unit for the following purposes or in the following manner:
226.24 	(1) to pay the costs of the principal and interest on bonded indebtedness or to 
226.25 	reimburse for the amount of liquor store revenues used to pay the principal and interest 
226.26 	due on municipal liquor store bonds in the year preceding the year for which the levy 
226.27 	limit is calculated;
226.28 	(2) to pay the costs of principal and interest on certificates of indebtedness issued for 
226.29 	any corporate purpose except for the following:
226.30 	(i) tax anticipation or aid anticipation certificates of indebtedness;
226.31 	(ii) certificates of indebtedness issued under sections 298.28 and 298.282;
226.32 	(iii) certificates of indebtedness used to fund current expenses or to pay the costs of 
226.33 	extraordinary expenditures that result from a public emergency; or
227.1 	(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or 
227.2 	an insufficiency in other revenue sources;
227.3 	(3) to provide for the bonded indebtedness portion of payments made to another 
227.4 	political subdivision of the state of Minnesota;
227.5 	(4) to fund payments made to the Minnesota State Armory Building Commission 
227.6 	under section 193.145, subdivision 2, to retire the principal and interest on armory 
227.7 	construction bonds;
227.8 	(5) property taxes approved by voters which are levied against the referendum 
227.9 	market value as provided under section 275.61;
227.10 	(6) to fund matching requirements needed to qualify for federal or state grants or 
227.11 	programs to the extent that either (i) the matching requirement exceeds the matching 
227.12 	requirement in calendar year 2001, or (ii) it is a new matching requirement that did not 
227.13 	exist prior to 2002;
227.14 	(7) to pay the expenses reasonably and necessarily incurred in preparing for or 
227.15 	repairing the effects of natural disaster including the occurrence or threat of widespread 
227.16 	or severe damage, injury, or loss of life or property resulting from natural causes, in 
227.17 	accordance with standards formulated by the Emergency Services Division of the state 
227.18 	Department of Public Safety, as allowed by the commissioner of revenue under section 
227.19 	275.74, subdivision 2;
227.20 	(8) pay amounts required to correct an error in the levy certified to the county 
227.21 	auditor by a city or county in a levy year, but only to the extent that when added to the 
227.22 	preceding year's levy it is not in excess of an applicable statutory, special law or charter 
227.23 	limitation, or the limitation imposed on the governmental subdivision by sections 275.70 
227.24 	to 275.74 in the preceding levy year;
227.25 	(9) to pay an abatement under section 469.1815;
227.26 	(10) to pay any costs attributable to increases in the employer contribution rates 
227.27 	under chapter 353, or locally administered pension plans, that are effective after June 
227.28 	30, 2001;
227.29 	(11) to pay the operating or maintenance costs of a county jail as authorized in 
227.30 	section 641.01 or 641.262, or of a correctional facility as defined in section 241.021, 
227.31 	subdivision 1, paragraph (f), to the extent that the county can demonstrate to the 
227.32 	commissioner of revenue that the amount has been included in the county budget as 
227.33 	a direct result of a rule, minimum requirement, minimum standard, or directive of the 
227.34 	Department of Corrections, or to pay the operating or maintenance costs of a regional jail 
227.35 	as authorized in section 641.262. For purposes of this clause, a district court order is 
227.36 	not a rule, minimum requirement, minimum standard, or directive of the Department of 
228.1 	Corrections. If the county utilizes this special levy, except to pay operating or maintenance 
228.2 	costs of a new regional jail facility under sections 641.262 to 641.264 which will not 
228.3 	replace an existing jail facility, any amount levied by the county in the previous levy year 
228.4 	for the purposes specified under this clause and included in the county's previous year's 
228.5 	levy limitation computed under section 275.71, shall be deducted from the levy limit 
228.6 	base under section 275.71, subdivision 2, when determining the county's current year 
228.7 	levy limitation. The county shall provide the necessary information to the commissioner 
228.8 	of revenue for making this determination;
228.9 	(12) to pay for operation of a lake improvement district, as authorized under section 
228.10 	103B.555. If the county utilizes this special levy, any amount levied by the county in the 
228.11 	previous levy year for the purposes specified under this clause and included in the county's 
228.12 	previous year's levy limitation computed under section 275.71 shall be deducted from 
228.13 	the levy limit base under section 275.71, subdivision 2, when determining the county's 
228.14 	current year levy limitation. The county shall provide the necessary information to the 
228.15 	commissioner of revenue for making this determination;
228.16 	(13) to repay a state or federal loan used to fund the direct or indirect required 
228.17 	spending by the local government due to a state or federal transportation project or other 
228.18 	state or federal capital project. This authority may only be used if the project is not a 
228.19 	local government initiative;
228.20 	(14) to pay for court administration costs as required under section 273.1398, 
228.21 	subdivision 4b, less the (i) county's share of transferred fines and fees collected by the 
228.22 	district courts in the county for calendar year 2001 and (ii) the aid amount certified to be 
228.23 	paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes 
228.24 	levied to pay for these costs in the year in which the court financing is transferred to the 
228.25 	state, the amount under this clause is limited to the amount of aid the county is certified to 
228.26 	receive under section 273.1398, subdivision 4a;
228.27 	(15) to fund a police or firefighters relief association as required under section 69.77 
228.28 	to the extent that the required amount exceeds the amount levied for this purpose in 2001;
228.29 	(16) for purposes of a storm sewer improvement district under section 444.20; 
228.30 	(17) to pay for the maintenance and support of a city or county society for the 
228.31 	prevention of cruelty to animals under section 343.11, but not to exceed in any year 
228.32 	$4,800 or the sum of $1 per capita based on the county's or city's population as of the most 
228.33 	recent federal census, whichever is greater. If the city or county uses this special levy, any 
228.34 	amount levied by the city or county in the previous levy year for the purposes specified 
228.35 	in this clause and included in the city's or county's previous year's levy limit computed 
229.1 	under section 275.71, must be deducted from the levy limit base under section 275.71, 
229.2 	subdivision 2, in determining the city's or county's current year levy limit; 
229.3 	(18) for counties, to pay for the increase in their share of health and human service 
229.4 	costs caused by reductions in federal health and human services grants effective after 
229.5 	September 30, 2007;
229.6 	(19) for a city, for the costs reasonably and necessarily incurred for securing, 
229.7 	maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by 
229.8 	the commissioner of revenue under section 275.74, subdivision 2. A city must have either 
229.9 	(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in 
229.10 	the city or in a zip code area of the city that is at least 50 percent higher than the average 
229.11 	foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2, 
229.12 	to use this special levy. For purposes of this paragraph, "foreclosure rate" means the 
229.13 	number of foreclosures, as indicated by sheriff sales records, divided by the number of 
229.14 	households in the city in 2007;
229.15 	(20) for a city, for the unreimbursed costs of redeployed traffic control agents and 
229.16 	lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified 
229.17 	to the Federal Highway Administration;
229.18 	(21) to pay costs attributable to wages and benefits for sheriff, police, and fire 
229.19 	personnel. If a local governmental unit did not use this special levy in the previous year its 
229.20 	levy limit base under section 275.71 shall be reduced by the amount equal to the amount it 
229.21 	levied for the purposes specified in this clause in the previous year; and
229.22 	(22) an amount equal to any reductions in the certified aids or credits payable 
229.23 	under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under 
229.24 	section 16A.152 in any year, reductions in aids under chapter 477A, that are enacted by 
229.25 	the legislature in the year in which the aid is paid, and reductions to credits under section 
229.26 	273.1384 enacted by the legislature in any year. The amount of the levy allowed under 
229.27 	this clause is equal to the amount unallotted or reduced in the calendar year in which the 
229.28 	tax is levied unless the unallotment amount is not known by September 1 of the levy year, 
229.29 	and the local government has not adjusted its levy under section 275.065, subdivision 6, 
229.30 	or section 275.07, subdivision 6, in which case the unallotment amount may be levied in 
229.31 	the following year.;
229.32 	(23) to pay for the difference between one-half of the costs of confining sex offenders 
229.33 	undergoing the civil commitment process and any state payments for this purpose pursuant 
229.34 	to section 253B.185, subdivision 5; and
229.35 	(24) for a county to pay the costs of the first year of maintaining and operating a new 
229.36 	facility or new expansion, either of which contains courts, corrections, dispatch, criminal 
230.1 	investigation labs, or other public safety facilities and for which all or a portion of the 
230.2 	funding for the site acquisition, building design, site preparation, construction, and related 
230.3 	equipment was issued or authorized prior to the imposition of levy limits in 2008. The 
230.4 	levy limit base shall then be increased by an amount equal to the new facility's first full 
230.5 	year's operating costs as described in this clause.

230.6 	EFFECTIVE DATE. This section is effective for levies certified in calendar year 
230.7 	2009 and thereafter, payable in 2010 and thereafter.

230.8 	Sec. 8. Minnesota Statutes 2008, section 275.71, subdivision 4, is amended to read:
230.9 		Subd. 4.Adjusted levy limit base.  For taxes levied in 2008 through2009 2010, 
230.10 	the adjusted levy limit base is equal to the levy limit base computed under subdivision 2 
230.11 	or section 275.72, multiplied by:
230.12 	(1) one plus the lesser of 3.9 percent or the percentage growth in the implicit price 
230.13 	deflator, but not less than two percent;
230.14 	(2) one plus a percentage equal to 50 percent of the percentage increase in the number 
230.15 	of households, if any, for the most recent 12-month period for which data is available; and
230.16 	(3) one plus a percentage equal to 50 percent of the percentage increase in the 
230.17 	taxable market value of the jurisdiction due to new construction of class 3 property, as 
230.18 	defined in section 273.13, subdivision 4, except for state-assessed utility and railroad 
230.19 	property, for the most recent year for which data is available.

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

230.21 	Sec. 9. Minnesota Statutes 2008, section 287.08, is amended to read:
230.22 	287.08 TAX, HOW PAYABLE; RECEIPTS. 
230.23 	(a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of 
230.24 	any county in this state in which the real property or some part is located at or before 
230.25 	the time of filing the mortgage for record. The treasurer shall endorse receipt on the 
230.26 	mortgage and the receipt is conclusive proof that the tax has been paid in the amount 
230.27 	stated and authorizes any county recorder or registrar of titles to record the mortgage. Its 
230.28 	form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the 
230.29 	mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from 
230.30 	registration tax." In either case the receipt must be signed by the treasurer. In case the 
230.31 	treasurer is unable to determine whether a claim of exemption should be allowed, the tax 
230.32 	must be paid as in the case of a taxable mortgage. For documents submitted electronically, 
230.33 	the endorsements and tax amount shall be affixed electronically and no signature by the 
231.1 	treasurer will be required. The actual payment method must be arranged in advance 
231.2 	between the submitter and the receiving county.
231.3 	(b) The county treasurer may refund in whole or in part any mortgage registry tax 
231.4 	overpayment if a written application by the taxpayer is submitted to the county treasurer 
231.5 	within 3-1/2 years from the date of the overpayment. If the county has not issued a denial 
231.6 	of the application, the taxpayer may bring an action in Tax Court in the county in which 
231.7 	the tax was paid at any time after the expiration of six months from the time that the 
231.8 	application was submitted. A denial of refund may be appealed within 60 days from 
231.9 	the date of the denial by bringing an action in Tax Court in the county in which the tax 
231.10 	was paid. The action is commenced by the serving of a petition for relief on the county 
231.11 	treasurer, and by filing a copy with the court. The county attorney shall defend the action. 
231.12 	The county treasurer shall notify the treasurer of each county that has or would receive a 
231.13 	portion of the tax as paid.
231.14 	(c) If the county treasurer determines a refund should be paid, or if a refund is 
231.15 	ordered by the court, the county treasurer of each county that actually received a portion 
231.16 	of the tax shall immediately pay a proportionate share of three percent of the refund 
231.17 	using any available county funds. The county treasurer of each county that received, or 
231.18 	would have received, a portion of the tax shall also pay their county's proportionate share 
231.19 	of the remaining 97 percent of the court-ordered refund on or before the 20th day of the 
231.20 	following month using solely the mortgage registry tax funds that would be paid to the 
231.21 	commissioner of revenue on that date under section 287.12. If the funds on hand under 
231.22 	this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the 
231.23 	county treasurer of the county in which the action was brought shall file a claim with the 
231.24 	commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of 
231.25 	the refund, and shall pay over the remaining portion upon receipt of a warrant from the 
231.26 	state issued pursuant to the claim.
231.27 	(d) When any mortgage covers real property located in more than one county in this 
231.28 	state the total tax must be paid to the treasurer of the county where the mortgage is first 
231.29 	presented for recording, and the payment must be receipted as provided in paragraph (a). 
231.30 	If the principal debt or obligation secured by such a multiple county mortgage exceeds 
231.31 	$1,000,000, the nonstate portion of the tax must be divided and paid over by the county 
231.32 	treasurer receiving it, on or before the 20th day of each month after receipt, to the county 
231.33 	or counties entitled in the ratio that the market value of the real property covered by the 
231.34 	mortgage in each county bears to the market value of all the real property in this state 
231.35 	described in the mortgage. In making the division and payment the county treasurer shall 
231.36 	send a statement giving the description of the real property described in the mortgage and 
232.1 	the market value of the part located in each county. For this purpose, the treasurer of any 
232.2 	county may require the treasurer of any other county to certify to the former the market 
232.3 	valuation of any tract of real property in any mortgage.
232.4 	(e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The 
232.5 	mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the 
232.6 	mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor, 
232.7 	the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the 
232.8 	amount of the tax collected for that purpose and the mortgagor is relieved of any further 
232.9 	obligation to pay the tax as to the amount collected by the mortgagee for this purpose.

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

232.11 	Sec. 10. Minnesota Statutes 2008, section 475.51, subdivision 4, is amended to read:
232.12 		Subd. 4. Net debt. "Net debt" means the amount remaining after deducting from its 
232.13 	gross debt the amount of current revenues which are applicable within the current fiscal 
232.14 	year to the payment of any debt and the aggregate of the principal of the following: 
232.15 	(1) Obligations issued for improvements which are payable wholly or partly from the 
232.16 	proceeds of special assessments levied upon property specially benefited thereby, including 
232.17 	those which are general obligations of the municipality issuing them, if the municipality is 
232.18 	entitled to reimbursement in whole or in part from the proceeds of the special assessments. 
232.19 	(2) Warrants or orders having no definite or fixed maturity. 
232.20 	(3) Obligations payable wholly from the income from revenue producing 
232.21 	conveniences. 
232.22 	(4) Obligations issued to create or maintain a permanent improvement revolving 
232.23 	fund. 
232.24 	(5) Obligations issued for the acquisition, and betterment of public waterworks 
232.25 	systems, and public lighting, heating or power systems, and of any combination thereof or 
232.26 	for any other public convenience from which a revenue is or may be derived. 
232.27 	(6) Debt service loans and capital loans made to a school district under the provisions 
232.28 	of sections 126C.68 and 126C.69. 
232.29 	(7) Amount of all money and the face value of all securities held as a debt service 
232.30 	fund for the extinguishment of obligations other than those deductible under this 
232.31 	subdivision. 
232.32 	(8) Obligations to repay loans made under section 216C.37. 
232.33 	(9) Obligations to repay loans made from money received from litigation or 
232.34 	settlement of alleged violations of federal petroleum pricing regulations. 
233.1 	(10) Obligations issued to pay pension fund or other postemployment benefit
233.2 	liabilities under section 475.52, subdivision 6, or any charter authority. 
233.3 	(11) Obligations issued to pay judgments against the municipality under section 
233.4 	475.52, subdivision 6, or any charter authority. 
233.5 	(12) All other obligations which under the provisions of law authorizing their 
233.6 	issuance are not to be included in computing the net debt of the municipality. 

233.7 	EFFECTIVE DATE. This section is effective for obligations sold after August 
233.8 	1, 2009.

233.9 	Sec. 11. Minnesota Statutes 2008, section 475.52, subdivision 6, is amended to read:
233.10 		Subd. 6. Certain purposes. Any municipality may issue bonds for paying 
233.11 	judgments against it; for refunding outstanding bonds; for funding floating indebtedness; 
233.12 	for funding actuarial liabilities to pay postemployment benefits to employees or officers 
233.13 	after their termination of service; or for funding all or part of the municipality's current 
233.14 	and future unfunded liability for a pension or retirement fund or plan referred to in 
233.15 	section 356.20, subdivision 2, as those liabilities are most recently computed pursuant 
233.16 	to sections 356.215 and 356.216. The board of trustees or directors of a pension fund or 
233.17 	relief association referred to in section 69.77 or chapter 422A must consent and must 
233.18 	be a party to any contract made under this section with respect to the fund held by it 
233.19 	for the benefit of and in trust for its members. For purposes of this section, the term 
233.20 	"postemployment benefits" means benefits giving rise to a liability under Statement No. 
233.21 	45 of the Governmental Accounting Standards Board.

233.22 	EFFECTIVE DATE. This section is effective for obligations sold after August 
233.23 	1, 2009.

233.24 	Sec. 12. Minnesota Statutes 2008, section 475.58, subdivision 1, is amended to read:
233.25 		Subdivision 1. Approval by electors; exceptions. Obligations authorized by law or 
233.26 	charter may be issued by any municipality upon obtaining the approval of a majority of 
233.27 	the electors voting on the question of issuing the obligations, but an election shall not be 
233.28 	required to authorize obligations issued: 
233.29 	(1) to pay any unpaid judgment against the municipality; 
233.30 	(2) for refunding obligations; 
233.31 	(3) for an improvement or improvement program, which obligation is payable wholly 
233.32 	or partly from the proceeds of special assessments levied upon property specially benefited 
233.33 	by the improvement or by an improvement within the improvement program, or from tax 
234.1 	increments, as defined in section 469.174, subdivision 25, including obligations which are 
234.2 	the general obligations of the municipality, if the municipality is entitled to reimbursement 
234.3 	in whole or in part from the proceeds of such special assessments or tax increments and 
234.4 	not less than 20 percent of the cost of the improvement or the improvement program is to 
234.5 	be assessed against benefited property or is to be paid from the proceeds of federal grant 
234.6 	funds or a combination thereof, or is estimated to be received from tax increments; 
234.7 	(4) payable wholly from the income of revenue producing conveniences; 
234.8 	(5) under the provisions of a home rule charter which permits the issuance of 
234.9 	obligations of the municipality without election; 
234.10 	(6) under the provisions of a law which permits the issuance of obligations of a 
234.11 	municipality without an election; 
234.12 	(7) to fund pension or retirement fund or postemployment benefit liabilities pursuant 
234.13 	to section 475.52, subdivision 6; 
234.14 	(8) under a capital improvement plan under section 373.40; and 
234.15 	(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if 
234.16 	the proceeds of the bonds are not used for a purpose prohibited under section 469.176, 
234.17 	subdivision 4g, paragraph (b). 

234.18 	EFFECTIVE DATE. This section is effective for obligations sold after August 
234.19 	1, 2009.

234.20 	Sec. 13. [475.755] EMERGENCY DEBT CERTIFICATES.
234.21 	(a) If at any time during a fiscal year the receipts of a local government are 
234.22 	reasonably expected to be reduced below the amount provided in the local government's 
234.23 	budget when the final property tax levy to be collected during the fiscal year was certified 
234.24 	and the receipts are insufficient to meet the expenses incurred or to be incurred during the 
234.25 	fiscal year, the governing body of the local government may authorize and sell certificates 
234.26 	of indebtedness to mature within two years or less from the end of the fiscal year in which 
234.27 	the certificates are issued. The maximum principal amount of the certificates that it may 
234.28 	issue in a fiscal year is limited to the expected reduction in receipts plus the cost of 
234.29 	issuance. The certificates may be issued in the manner and on the terms the governing 
234.30 	body determines by resolution. 
234.31 	(b) The governing body of the local government shall levy taxes for the payment of 
234.32 	principal and interest on the certificates in accordance with section 475.61.
234.33 	(c) The certificates are not to be included in the net debt of the issuing local 
234.34 	government. 
235.1 	(d) To the extent that a local government issues certificates under this section to fund 
235.2 	an unallotment or other reduction in its state aid, the local government may not use a 
235.3 	special levy for the aid reduction under section 275.70, subdivision 5, clause (22), or a 
235.4 	similar or successor provision. This provision does not affect the status of the levy under 
235.5 	section 475.61 to pay the certificates as a levy that is not subject to levy limits.
235.6 	(e) For purposes of this section, the following terms have the meanings given:
235.7 	(1) "Local government" means a statutory or home rule charter city, a town, or 
235.8 	a county.
235.9 	(2) "Receipts" includes the following amounts scheduled to be received by the 
235.10 	local government for the fiscal year from:
235.11 	(i) taxes;
235.12 	(ii) aid payments previously certified by the state to be paid to the local government;
235.13 	(iii) state reimbursement payments for property tax credits; and
235.14 	(iv) any other source.

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

235.16 	Sec. 14. BUDGET RESERVE.
 235.17 	In fiscal year 2010, the commissioner of finance shall transfer $250,000,000 to the 
235.18 	budget reserve account in the general fund. The commissioner shall make this transfer 
235.19 	from general fund revenues resulting from legislation enacted in the 2009 legislative 
235.20 	session. The amount necessary for this purpose is appropriated from the general fund.

235.21 	Sec. 15. APPROPRIATIONS.
 235.22 		Subdivision 1.Bovine tuberculosis testing grants. $360,000 in fiscal year 
235.23 	2010 and $360,000 in fiscal year 2011 are appropriated from the general fund to the 
235.24 	commissioner of agriculture to make bovine tuberculosis testing grants as provided in 
235.25 	Minnesota Statutes, section 17.1195. Of this amount, the commissioner may use up to five 
235.26 	percent for administrative expenses related to the grant program.
235.27 		Subd. 2.Bovine tuberculosis; split state status grants. $400,000 in fiscal year 
235.28 	2010 and $400,000 in fiscal year 2011 are appropriated from the general fund to the 
235.29 	commissioner of agriculture to make bovine tuberculosis split state status grants as 
235.30 	provided in Minnesota Statutes, section 17.1197. Of this amount, the commissioner may 
235.31 	use up to five percent for administrative expenses related to the grant program.
236.1 		Subd. 3.Basic sliding fee child care. $5,000,000 in fiscal year 2010 and $5,000,000 
236.2 	in fiscal year 2011 are appropriated from the general fund to the commissioner of human 
236.3 	services for basic sliding fee child care under Minnesota Statutes, section 119B.03. This 
236.4 	appropriation is added to base level funding and is in addition to any other appropriation 
236.5 	for the same purpose. Notwithstanding any other law to the contrary, this appropriation 
236.6 	may only be used to fund child care assistance.