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, and other 
1.4 	changes to income, franchise, property, sales and use, motor vehicle, estate, 
1.5 	gambling, solid waste management, health care provider, cigarette and tobacco 
1.6 	products, insurance premiums, aggregate removal, mortgage, deed, occupation, 
1.7 	and production taxes, and other taxes and tax-related provisions; requiring 
1.8 	withholding; providing and modifying income tax credits; modifying and 
1.9 	authorizing sales tax exemptions; modifying and authorizing local government 
1.10 	sales taxes; modifying certain levies, property valuation procedures, property 
1.11 	tax classes, and tax bases; changing and providing property tax exemptions; 
1.12 	modifying truth in taxation procedures; eliminating levy limits; eliminating 
1.13 	the targeting refund; modifying the state general levy; providing for aids to 
1.14 	local governments; changing provisions relating to fiscal disparities, education 
1.15 	financing, and distributions of production tax proceeds; conforming provisions 
1.16 	to certain changes in federal laws; changing and imposing powers, duties, and 
1.17 	requirements on certain local governments and authorities and state departments 
1.18 	or agencies; providing for issuance of obligations by political subdivisions, and 
1.19 	use of the proceeds of the debt; limiting availability of JOBZ benefits; providing 
1.20 	rules for operation of certain tax increment financing districts; providing for 
1.21 	financing of certain postretirement benefits; authorizing loans and grants for 
1.22 	certain businesses; requiring studies and reports; regulating tax preparers; 
1.23 	establishing the amount of the budget reserve account; appropriating money;
1.24 	amending Minnesota Statutes 2008, sections 37.31, subdivision 8; 123B.10, 
1.25 	subdivision 1; 124D.4531, by adding a subdivision; 126C.01, subdivision 
1.26 	3; 126C.41, subdivision 2; 126C.55, subdivision 4; 144F.01, subdivision 3; 
1.27 	204B.46; 270B.14, subdivision 16; 270C.12, by adding a subdivision; 270C.445; 
1.28 	270C.446, subdivisions 2, 5; 270C.56, subdivisions 1, 3; 272.02, subdivisions 
1.29 	7, 10, 86, by adding subdivisions; 272.0213; 273.11, subdivision 23; 273.111, 
1.30 	subdivision 4; 273.1115, subdivision 2; 273.113, subdivisions 1, 2; 273.1231, 
1.31 	subdivision 8; 273.124, subdivisions 3, 3a, 13, 21; 273.13, subdivisions 23, 24, 
1.32 	25, 33; 273.1384, subdivision 4; 273.33, subdivision 2; 273.37, subdivision 
1.33 	2; 274.13, subdivision 2; 274.135, subdivision 3; 274.14; 274.175; 275.025, 
1.34 	subdivisions 1, 4; 275.065, subdivisions 1, 3, 5a, 6; 275.16; 275.62, subdivision 
1.35 	1; 279.01, subdivision 1; 279.10; 282.01, subdivisions 1, 1a, 1c, 1d, 2, 3, 4, 7, 
1.36 	7a, by adding a subdivision; 287.04; 287.05, by adding a subdivision; 287.08; 
1.37 	287.22; 287.2205; 287.25; 289A.02, subdivision 7, as amended; 289A.08, 
1.38 	subdivision 3; 289A.12, by adding a subdivision; 289A.18, subdivision 1; 
1.39 	289A.19, subdivision 4; 289A.31, subdivision 5; 289A.38, subdivision 7; 
2.1 	289A.41; 290.01, subdivisions 19, as amended, 19a, as amended, 19b, 19c, as 
2.2 	amended, 19d, as amended, 31, as amended; 290.014, subdivision 2; 290.06, 
2.3 	subdivisions 2c, 2d, by adding a subdivision; 290.0671, subdivision 1; 290.091, 
2.4 	subdivisions 1, 2; 290.17, subdivision 2; 290.191, subdivision 2; 290A.03, 
2.5 	subdivision 15, as amended; 290A.10; 290A.14; 290A.23, subdivision 3; 
2.6 	290C.06; 290C.07; 291.005, subdivision 1; 295.52, subdivisions 1, 1a; 295.56; 
2.7 	295.57, subdivision 5; 296A.21, subdivision 1; 297A.64, subdivision 2; 297A.66, 
2.8 	by adding a subdivision; 297A.68, subdivision 5; 297A.70, subdivisions 2, 4; 
2.9 	297A.71, by adding a subdivision; 297A.75, subdivisions 1, 2, 3; 297A.992, 
2.10 	subdivision 2; 297A.993, subdivision 1; 297E.02, subdivision 4; 297E.06, 
2.11 	subdivision 4, by adding a subdivision; 297E.11, subdivision 1; 297F.09, 
2.12 	subdivision 7; 297G.09, subdivision 6; 297H.06, subdivision 1; 297I.30, by 
2.13 	adding a subdivision; 297I.35, subdivision 2; 298.17, by adding a subdivision; 
2.14 	298.227; 298.24, subdivision 1; 298.28, subdivisions 4, 11; 298.282, subdivision 
2.15 	1; 309.53, subdivision 3; 349.1641; 349.19, subdivision 9; 360.036, subdivision 
2.16 	2; 360.0425; 366.095, subdivision 1; 373.47, subdivision 1; 375.194, subdivision 
2.17 	5; 383A.75, subdivision 3; 423A.02, subdivisions 1b, 3, by adding a subdivision; 
2.18 	428A.01, subdivision 3; 428A.101; 428A.13, by adding a subdivision; 428A.14, 
2.19 	subdivision 1; 428A.21; 429.011, subdivision 2a; 446A.086, subdivision 8, by 
2.20 	adding a subdivision; 465.719, subdivision 9; 469.005, subdivision 1; 469.015, 
2.21 	subdivisions 1, 2, 3; 469.034, subdivision 2; 469.040, subdivisions 2, 4; 469.053, 
2.22 	by adding a subdivision; 469.153, subdivision 2; 469.174, subdivision 22, by 
2.23 	adding a subdivision; 469.175, subdivisions 1, 6; 469.176, subdivisions 1b, 3, 
2.24 	by adding a subdivision; 469.1763, subdivisions 2, 3; 469.178, subdivision 7; 
2.25 	469.312, by adding a subdivision; 471.191, subdivision 1; 473.121, by adding a 
2.26 	subdivision; 473.13, subdivision 1; 473.167, subdivision 3; 473.249, subdivision 
2.27 	1; 473.253, subdivision 1; 473.843, subdivision 3; 473F.08, subdivisions 3, 
2.28 	5; 474A.02, subdivisions 2, 14; 475.58, subdivision 1; 475.67, subdivision 
2.29 	8; 477A.011, subdivisions 34, 36, 42; 477A.0124, by adding a subdivision; 
2.30 	477A.013, subdivision 8, by adding a subdivision; Laws 1971, chapter 773, 
2.31 	section 4, as amended; Laws 1976, chapter 162, section 3, as amended; Laws 
2.32 	1986, chapter 400, section 44, as amended; Laws 1991, chapter 291, article 8, 
2.33 	section 27, subdivision 3, as amended; Laws 1993, chapter 375, article 9, section 
2.34 	46, subdivision 2, as amended, by adding a subdivision; Laws 1995, chapter 264, 
2.35 	article 5, sections 44, subdivision 4, as amended; 45, subdivision 1, as amended; 
2.36 	Laws 1998, chapter 389, article 8, section 37, subdivision 1; Laws 2001, 
2.37 	First Special Session chapter 5, article 3, section 8, as amended; Laws 2002, 
2.38 	chapter 377, article 3, section 25; Laws 2006, chapter 259, article 3, section 12, 
2.39 	subdivision 3; Laws 2008, chapter 366, article 5, sections 28, subdivision 1; 29, 
2.40 	subdivisions 1, 2, 4; 34; article 6, sections 9; 10; article 7, sections 16, subdivision 
2.41 	3; 18, subdivisions 2, 3; article 10, section 15; Laws 2009, chapter 12, article 2, 
2.42 	section 5, subdivisions 1, 2; proposing coding for new law in Minnesota Statutes, 
2.43 	chapters 16A; 116J; 290; 297I; 414; 475; 477A; repealing Minnesota Statutes 
2.44 	2008, sections 275.025, subdivision 3; 275.065, subdivisions 6b, 6c, 8, 9, 10; 
2.45 	275.70; 275.71; 275.72; 275.73; 275.74; 275.75; 282.01, subdivisions 1b, 9, 10, 
2.46 	11; 287.26; 287.27, subdivision 1; 290.06, subdivision 34; 290A.04, subdivision 
2.47 	2h; 297A.67, subdivision 24; 297A.815, subdivision 3; 298.28, subdivisions 
2.48 	11a, 13; 477A.16; Laws 1996, chapter 464, article 1, section 8, subdivision 3; 
2.49 	Laws 2008, chapter 366, article 5, section 30, subdivision 7; Minnesota Rules, 
2.50 	parts 8009.3000; 8115.0200; 8115.0300; 8115.0400; 8115.0500; 8115.0600; 
2.51 	8115.1000; 8115.1100; 8115.1200; 8115.1300; 8115.1400; 8115.1500; 
2.52 	8115.1600; 8115.1700; 8115.1800; 8115.1900; 8115.2000; 8115.2100; 
2.53 	8115.2200; 8115.2300; 8115.2400; 8115.2500; 8115.2600; 8115.2700; 
2.54 	8115.2800; 8115.2900; 8115.3000; 8115.4000; 8115.4100; 8115.4200; 
2.55 	8115.4300; 8115.4400; 8115.4500; 8115.4600; 8115.4700; 8115.4800; 
2.56 	8115.4900; 8115.5000; 8115.5100; 8115.5200; 8115.5300; 8115.5400; 
2.57 	8115.5500; 8115.5600; 8115.5700; 8115.5800; 8115.5900; 8115.6000; 
2.58 	8115.6100; 8115.6200; 8115.6300; 8115.6400; 8115.9900.
3.1 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.2 	ARTICLE 1
3.3 	INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND 
3.4 	INSURANCE PREMIUM TAXES

3.5 	Section 1. [116J.665] MINNESOTA BUSINESS INVESTMENT COMPANY 
3.6 	CREDIT.
3.7 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
3.8 	have the meanings given.
3.9 	(b) "Affiliate" means:
3.10 	(1) any person who, directly or indirectly, beneficially owns, controls, or holds power 
3.11 	to vote 15 percent or more of the outstanding voting securities or other voting ownership 
3.12 	interest of a Minnesota business investment company or insurance company; and
3.13 	(2) any person, 15 percent or more of whose outstanding voting securities or other 
3.14 	voting ownership interests are directly or indirectly beneficially owned, controlled, or held 
3.15 	with power to vote by a Minnesota business investment company or insurance company.
3.16 	Notwithstanding this subdivision, an investment by a participating investor in a 
3.17 	Minnesota business investment company pursuant to an allocation of premium tax credits 
3.18 	under this section does not cause that Minnesota business investment company to become 
3.19 	an affiliate of that participating investor.
3.20 	(c) "Allocation date" means the date on which credits under section 297I.23 are 
3.21 	allocated to the participating investors of a Minnesota business investment company 
3.22 	under this section.
3.23 	(d) "Commissioner" means the commissioner of employment and economic 
3.24 	development.
3.25 	(e) "Department" means the Department of Employment and Economic 
3.26 	Development.
3.27 	(f) "Designated capital" means an amount of money that:
3.28 	(1) is invested by a participating investor in a Minnesota business investment 
3.29 	company; and
3.30 	(2) fully funds the purchase price of either or both participating investor's equity 
3.31 	interest in a Minnesota business investment company or a qualified debt instrument issued 
3.32 	by a Minnesota business investment company.
3.33 	(g) "Minnesota business investment company" means a partnership, corporation, 
3.34 	trust, or limited liability company, organized on a for-profit basis, that:
3.35 	(1) has its principal office located or is headquartered in Minnesota;
4.1 	(2) has as its primary business activity the investment of cash in qualified businesses; 
4.2 	and
4.3 	(3) is certified by the Department of Employment and Economic Development as 
4.4 	meeting the criteria in this section.
4.5 	(h) "Participating investor" means any insurer as defined in section 60A.02, 
4.6 	subdivision 4, that contributes designated capital pursuant to this section.
4.7 	(i) "Person" means any natural person or entity, including, but not limited to, a 
4.8 	corporation, general or limited partnership, trust, or limited liability company.
4.9 	(j) "Qualified business" means a business that is independently owned and operated 
4.10 	and meets all of the following requirements:
4.11 	(1) it is headquartered in Minnesota, its principal business operations are located in 
4.12 	this state, and at least 80 percent of its employees are located in Minnesota;
4.13 	(2) it has not more than 100 employees at the time of the first qualified investment 
4.14 	in the business;
4.15 	(3) it is not predominantly engaged in:
4.16 	(i) professional services provided by accountants, doctors, or lawyers;
4.17 	(ii) banking or lending;
4.18 	(iii) real estate development;
4.19 	(iv) insurance;
4.20 	(v) oil and gas exploration;
4.21 	(vi) gambling activities; 
4.22 	(vii) retail sales; or
4.23 	(viii) making loans to or investments in a Minnesota business investment company 
4.24 	or an affiliate; and
4.25 	(4) it is not a franchise of and has no financial relationship with a Minnesota business 
4.26 	investment company or any affiliate of a Minnesota business investment company prior to 
4.27 	a Minnesota business investment company's first qualified investment in the business.
4.28 	(k) "Qualified debt instrument" means a debt instrument issued by a Minnesota 
4.29 	business investment company that meets all of the following criteria:
4.30 	(1) it is issued at par value or a premium;
4.31 	(2) it has an original maturity date of at least four years from the date of issuance, 
4.32 	and a repayment schedule that is not faster than a level principal amortization over four 
4.33 	years; and
4.34 	(3) it satisfies the rating criteria to qualify as "NAIC1," as determined by the 
4.35 	Securities Valuation Office of the National Association of Insurance Commissioners.
5.1 	(l) "Qualified distribution" means any distribution or payment not made to a 
5.2 	participating investor or affiliate of a participating investor by a Minnesota business 
5.3 	investment company in connection with the following:
5.4 	(1) costs and expenses of forming, syndicating, and organizing the Minnesota 
5.5 	business investment company, including fees paid for professional services, and the costs 
5.6 	of financing and insuring the obligations of a Minnesota business investment company;
5.7 	(2) an annual management fee not to exceed one percent of designated capital on 
5.8 	an annual basis to offset the costs and expenses of managing and operating a Minnesota 
5.9 	business investment company;
5.10 	(3) reasonable and necessary fees in accordance with industry custom for ongoing 
5.11 	professional services, including, but not limited to, legal and accounting services related 
5.12 	to the operation of a Minnesota business investment company, not including lobbying 
5.13 	or governmental relations; and
5.14 	(4) payments of principal and interest to holders of qualified debt instruments issued 
5.15 	by a Minnesota business investment company may be made without restriction.
5.16 	(m) "Qualified investment" means the investment of money by a Minnesota 
5.17 	business investment company in a qualified business for the purchase of any debt, 
5.18 	debt participation, equity, or hybrid security of any nature and description, including a 
5.19 	debt instrument or security that has the characteristics of debt but which provides for 
5.20 	conversion into equity or equity participation instruments such as options or warrants. 
5.21 	Any repayment of a qualified investment prior to one year from the date of issuance shall 
5.22 	result in the amount of the qualified investment being reduced by 50 percent for purposes 
5.23 	of the cumulative investment requirement set forth in subdivision 8, paragraph (c).
5.24 	(n) "State premium tax liability" means any liability incurred by an insurance 
5.25 	company under the provisions of chapter 297I or in the case of a repeal or a reduction by 
5.26 	the state of the liability imposed by chapter 297I, any other tax liability imposed upon an 
5.27 	insurance company by the state.
5.28 		Subd. 2.Certification. (a) The commissioner must provide a standardized format 
5.29 	for applying for the business investment credit under section 297I.23.
5.30 	(b) An applicant must:
5.31 	(1) file an application with the commissioner;
5.32 	(2) pay a nonrefundable application fee of $7,500 at the time of filing the application;
5.33 	(3) submit as part of its application an audited balance sheet that contains an 
5.34 	unqualified opinion of an independent certified public accountant issued not more than 35 
5.35 	days before the application date that states that the applicant has an equity capitalization 
6.1 	of $500,000 or more in the form of unencumbered cash, marketable securities, or other 
6.2 	liquid assets; and
6.3 	(4) have at least two principals or persons, at least one of which is primarily located 
6.4 	in Minnesota, employed or engaged to manage the funds who each have a minimum of 
6.5 	five years of money management experience in the venture capital or business industry.
6.6 	(c) The commissioner may certify partnerships, corporations, trusts, or limited 
6.7 	liability companies, organized on a for-profit basis, which submit an application to be 
6.8 	designated as a Minnesota business investment company if the applicant is located, 
6.9 	headquartered, and licensed or registered to conduct business in Minnesota, has as its 
6.10 	primary business activity the investment of cash in qualified businesses, and meets the 
6.11 	other criteria set forth in this section. 
6.12 	(d) The commissioner must review the organizational documents of each applicant 
6.13 	for certification and the business history of each applicant, determine whether the applicant 
6.14 	has satisfied the requirements of this section, and determine whether the officers and the 
6.15 	board of directors, general partners, trustees, managers, or members are trustworthy and 
6.16 	are thoroughly acquainted with the requirements of this section.
6.17 	(e) Within 45 days after the receipt of an application, the commissioner must issue 
6.18 	the certification or refuse the certification and communicate in detail to the applicant the 
6.19 	grounds for refusal, including suggestions for the removal of the grounds.
6.20 	(f) The commissioner must begin accepting applications to become a Minnesota 
6.21 	business investment company as defined under section 297I.23 by August 1, 2009.
6.22 		Subd. 3.Requirements. (a) An insurance company or affiliate of an insurance 
6.23 	company must not, directly or indirectly:
6.24 	(1) beneficially own, whether through rights, options, convertible interest, or 
6.25 	otherwise, 15 percent or more of the voting securities or other voting ownership interest of 
6.26 	a Minnesota business investment company;
6.27 	(2) manage a Minnesota business investment company; or
6.28 	(3) control the direction of investments for a Minnesota business investment 
6.29 	company.
6.30 	(b) A Minnesota business investment company may obtain one or more guaranties, 
6.31 	indemnities, bonds, insurance policies, or other payment undertakings for the benefit 
6.32 	of its participating investors from any entity, except that in no case can more than one 
6.33 	participating investor of a Minnesota business investment company on an aggregate basis 
6.34 	with all affiliates of the participating investor be entitled to provide guaranties, indemnities, 
6.35 	bonds, insurance policies, or other payment undertakings in favor of the participating 
6.36 	investors of a Minnesota business investment company and its affiliates in this state.
7.1 	(c) This subdivision does not preclude a participating investor, insurance company, 
7.2 	or other party from exercising its legal rights and remedies, including, without limitation, 
7.3 	interim management of a Minnesota business investment company, in the event that a 
7.4 	Minnesota business investment company is in default of its statutory obligations or its 
7.5 	contractual obligations to a participating investor, insurance company, or other party, or 
7.6 	from monitoring a Minnesota business investment company to ensure its compliance 
7.7 	with this section or disallowing any investments that have not been approved by the 
7.8 	commissioner.
7.9 	(d) The commissioner may contract with an independent third party to review, 
7.10 	investigate, and certify that the applications comply with the provisions of this section.
7.11 		Subd. 4.Aggregate limitations on investment tax credits; allocation. (a) 
7.12 	The aggregate amount of investment tax credits to be allocated to all participating 
7.13 	investors of Minnesota business investment companies under this section shall not exceed 
7.14 	$150,000,000. No Minnesota business investment company, on an aggregate basis with its 
7.15 	affiliates, may file credit allocation claims that exceed $150,000,000.
7.16 	(b) Credits must be allocated to participating investors in the order that the credit 
7.17 	allocation claims are filed with the commissioner, provided that all credit allocation 
7.18 	claims filed with the commissioner on the same day must be treated as having been filed 
7.19 	contemporaneously. Any credit allocation claims filed with the commissioner prior to the 
7.20 	initial credit allocation claim filing date will be deemed to have been filed on the initial 
7.21 	credit allocation claim filing date. The commissioner will set the initial credit allocation 
7.22 	claim filing date to be not less than 120 days and not greater than 150 days after the 
7.23 	commissioner begins accepting applications for certification.
7.24 	(c) If two or more Minnesota business investment companies file credit allocation 
7.25 	claims with the commissioner on behalf of their respective participating investors on the 
7.26 	same day, and the aggregate amount of credit allocation claims exceeds the aggregate 
7.27 	limit of investment tax credits under this section or the lesser amount of credits that 
7.28 	remain unallocated on that day, then the credits shall be allocated among the participating 
7.29 	investors who filed on that day on a pro rata basis with respect to the amounts claimed. 
7.30 	The pro rata allocation for any one participating investor is the product obtained by 
7.31 	multiplying a fraction, the numerator of which is the amount of the credit allocation claim 
7.32 	filed on behalf of a participating investor and the denominator of which is the total of all 
7.33 	credit allocation claims filed on behalf of all participating investors on that day, by the 
7.34 	aggregate limit of credits under this section or the lesser amount of credits that remain 
7.35 	unallocated on that day.
8.1 	(d) Within ten business days after the commissioner receives a credit allocation 
8.2 	claim filed by a Minnesota business investment company on behalf of one or more of its 
8.3 	participating investors, the commissioner must notify the Minnesota business investment 
8.4 	company of the amount of credits allocated to each of the participating investors of that 
8.5 	Minnesota business investment company. In the event a Minnesota business investment 
8.6 	company does not receive an investment of designated capital from each participating 
8.7 	investor required to earn the amount of credits allocated to the participating investor 
8.8 	within ten business days of the Minnesota business investment company's receipt of notice 
8.9 	of allocation, then it shall notify the commissioner on or before the next business day, and 
8.10 	the credits allocated to the participating investor of the Minnesota business investment 
8.11 	company will be forfeited. The commissioner must then reallocate those forfeited credits 
8.12 	among the participating investors of the other Minnesota business investment companies 
8.13 	on a pro rata basis with respect to the credit allocation claims filed on behalf of the 
8.14 	participating investors. The commissioner may levy a fine of not more than $50,000 
8.15 	on any participating investor that does not invest the full amount of designated capital 
8.16 	required to fund the credits allocated to it by the commissioner in accordance with the 
8.17 	credit allocation claim filed on its behalf.
8.18 	(e) No participating investor, on an aggregate basis with its affiliates, may file an 
8.19 	allocation claim for more than 25 percent of the maximum amount of investment tax 
8.20 	credits authorized hereunder, regardless of whether the claim is made in connection with 
8.21 	one or more Minnesota business investment companies.
8.22 		Subd. 5.Requirements for continuance of certification. (a) To maintain its 
8.23 	certification, a Minnesota business investment company must make qualified investments 
8.24 	as follows:
8.25 	(1) within two years after the allocation date, a Minnesota business investment 
8.26 	company must invest an amount equal to at least 35 percent of its designated capital in 
8.27 	qualified investments; and
8.28 	(2) within three years after the allocation date, a Minnesota business investment 
8.29 	company must invest an amount equal to at least 50 percent of its designated capital 
8.30 	in qualified investments.
8.31 	(b) Prior to making a proposed qualified investment in a specific business, a 
8.32 	Minnesota business investment company must request from the commissioner a written 
8.33 	determination that the proposed investment will qualify as a qualified investment in a 
8.34 	qualified business. The commissioner must notify a Minnesota business investment 
8.35 	company within ten business days from the receipt of a request of its determination and an 
8.36 	explanation thereof. If the commissioner fails to notify the Minnesota business investment 
9.1 	company of its determination within the ten-day period, the proposed investment must be 
9.2 	deemed to be a qualified investment in a qualified business.
9.3 	(c) All designated capital not invested in qualified investments by a Minnesota 
9.4 	business investment company shall be held or invested in the manner the Minnesota 
9.5 	business investment company deems appropriate. Designated capital and proceeds of 
9.6 	designated capital returned to a Minnesota business investment company after being 
9.7 	originally invested in qualified investments may be invested again in qualified investments 
9.8 	and the investment shall count toward the requirements of paragraph (a) of this subdivision 
9.9 	with respect to making investments of designated capital in qualified investments.
9.10 	(d) If, within four years after its allocation date, a Minnesota business investment 
9.11 	company has not invested at least 80 percent of its designated capital in qualified 
9.12 	investments, neither the Minnesota business investment company nor its affiliates shall 
9.13 	be permitted to receive management fees.
9.14 	(e) If, within six years after its allocation date, a Minnesota business investment 
9.15 	company has not invested at least 100 percent of its designated capital in qualified 
9.16 	investments, neither the Minnesota business investment company nor its affiliates shall 
9.17 	be permitted to receive management fees.
9.18 	(f) A Minnesota business investment company may not invest more than 15 percent 
9.19 	of its designated capital in any one qualified business without the specific approval of 
9.20 	the commissioner.
9.21 	(g) For purposes of calculating the investment percentage thresholds of paragraph 
9.22 	(a), the cumulative amount of all qualified investments made by a Minnesota business 
9.23 	investment company from the allocation date must be considered.
9.24 		Subd. 6.Minnesota business investment company reporting requirements.
 9.25 	(a) Each Minnesota business investment company must report the following to the 
9.26 	commissioner:
9.27 	(1) as soon as practicable after the receipt of designated capital:
9.28 	(i) the name of each participating investor from which the designated capital was 
9.29 	received, including the participating investor's insurance tax identification number;
9.30 	(ii) the amount of each participating investor's investment of designated capital; and
9.31 	(iii) the date on which the designated capital was received;
9.32 	(2) on an annual basis, on or before January 31 of each year:
9.33 	(i) the amount of the Minnesota business investment company's remaining 
9.34 	uninvested designated capital at the end of the immediately preceding taxable year;
9.35 	(ii) whether or not the Minnesota business investment company has invested more 
9.36 	than 15 percent of its total designated capital in any one business;
10.1 	(iii) all qualified investments that the Minnesota business investment company has 
10.2 	made in the previous taxable year, including the number of employees of each qualified 
10.3 	business in which it has made investments at the time of the investment, and as of 
10.4 	December 1 of the preceding taxable year; and
10.5 	(iv) for any qualified business where the Minnesota business investment company 
10.6 	no longer has an investment, the Minnesota business investment company must provide 
10.7 	employment figures for that company as of the last day before the investment was 
10.8 	terminated;
10.9 	(3) other information that the commissioner may reasonably request that will help 
10.10 	the commissioner ascertain the impact of the Minnesota business investment company 
10.11 	program both directly and indirectly on the economy of the state of Minnesota including, 
10.12 	but not limited to, the number of jobs created by qualified businesses that have received 
10.13 	qualified investments;
10.14 	(4) within 90 days of the close of its fiscal year, annual audited financial statements 
10.15 	of the Minnesota business investment company, which must include the opinion of an 
10.16 	independent certified public accountant; and
10.17 	(5) an "agreed upon procedures report" or equivalent regarding the operations of the 
10.18 	Minnesota business investment company.
10.19 	(b) A Minnesota business investment company must pay to the commissioner an 
10.20 	annual, nonrefundable certification fee of $5,000 on or before April 1, or $10,000 if later. 
10.21 	No annual certification fee is required if the payment date for the fee is within six months 
10.22 	of the date a Minnesota business investment company is first certified by the commissioner.
10.23 	(c) Upon satisfying the requirements of subdivision 5, paragraph (a), clause (2), a 
10.24 	Minnesota business investment company shall provide the notice to the commissioner 
10.25 	and the commissioner shall, within 60 days of receipt of the notice, either confirm that the 
10.26 	Minnesota business investment company has satisfied the requirements of subdivision 
10.27 	5, paragraph (a), clause (2), as of that date or provide notice of noncompliance and an 
10.28 	explanation of any existing deficiencies. If the commissioner does not provide the notice 
10.29 	within 60 days, the Minnesota business investment company shall be deemed to have met 
10.30 	the requirements of subdivision 5, paragraph (a), clause (2).
10.31 		Subd. 7.Distributions. A Minnesota business investment company may make 
10.32 	qualified distributions at any time. In order for a Minnesota business investment 
10.33 	company to make a distribution other than a qualified distribution to its equity holders, 
10.34 	the cumulative amount of all qualified investments of the Minnesota business investment 
10.35 	company must equal or exceed 100 percent of its designated capital.
11.1 		Subd. 8.Decertification. (a) The commissioner shall conduct an annual review 
11.2 	of each Minnesota business investment company to determine if a Minnesota business 
11.3 	investment company is abiding by the requirements of certification and to ensure that no 
11.4 	investment has been made in violation of this section. The cost of the annual review 
11.5 	must be paid by each Minnesota business investment company according to a reasonable 
11.6 	fee schedule adopted by the commissioner.
11.7 	(b) Any material violation of this section, including any material misrepresentation 
11.8 	made to the commissioner in connection with the application process, may be grounds 
11.9 	for decertification of a Minnesota business investment company and the disallowance of 
11.10 	credits under section 297I.23, provided that in all instances the commissioner shall provide 
11.11 	notice to the Minnesota business investment company of the grounds of the proposed 
11.12 	decertification and the opportunity to remedy the violation before the decertification 
11.13 	becomes effective.
11.14 	(c) After a Minnesota business investment company has invested an amount 
11.15 	cumulatively equal to 100 percent of its designated capital in qualified investments, 
11.16 	provided that the Minnesota business investment company has met all other requirements 
11.17 	under this section as of that date, the Minnesota business investment company shall 
11.18 	no longer be subject to regulation by the commissioner or the reporting requirements 
11.19 	under subdivision 6. Upon receiving certification by a Minnesota business investment 
11.20 	company that it has invested an amount equal to 100 percent of its designated capital, the 
11.21 	commissioner must notify a Minnesota business investment company within 60 days that 
11.22 	it has or has not met the requirements, with a reason for the determination if it has not. 
11.23 	If the commissioner does not provide notification of deregulation within 60 days, the 
11.24 	Minnesota business investment company shall be deemed to have met the requirements 
11.25 	and shall be deemed to no longer be subject to regulation by the commissioner.
11.26 	(d) The commissioner must send written notice of any decertification proceedings to 
11.27 	the commissioner of revenue and to the address of each participating investor whose tax 
11.28 	credit may be subject to recapture or forfeiture, using the address shown on the last filing 
11.29 	submitted to the commissioner.
11.30 		Subd. 9.Registration requirements. All investments by participating investors 
11.31 	for which tax credits are awarded under this section must be registered or specifically 
11.32 	exempt from registration.
11.33 		Subd. 10.Reports to governor and legislature. The commissioner must make 
11.34 	an annual report to the governor and the chairs and ranking minority members of the 
11.35 	legislative committees having jurisdiction over taxes and economic development. The 
11.36 	report must include:
12.1 	(1) the number of Minnesota business investment companies holding designated 
12.2 	capital;
12.3 	(2) the amount of designated capital invested in each Minnesota business investment 
12.4 	company;
12.5 	(3) the cumulative amount that each Minnesota business investment company has 
12.6 	invested as of January 1, 2010, and the cumulative total each year thereafter;
12.7 	(4) the cumulative amount of follow-on capital that the investments of each 
12.8 	Minnesota business investment company have created in terms of capital invested in 
12.9 	qualified businesses at the same time or subsequent to investments made by a Minnesota 
12.10 	business investment company in the businesses by sources other than Minnesota business 
12.11 	investment companies;
12.12 	(5) the total amount of investment tax credits applied under this section for each year;
12.13 	(6) the performance of each Minnesota business investment company with regard to 
12.14 	the requirements for continued certification;
12.15 	(7) the classification of the companies in which each Minnesota business investment 
12.16 	company has invested according to industrial sector and size of company;
12.17 	(8) the gross number of jobs created by investments made by each Minnesota 
12.18 	business investment company and the number of jobs retained;
12.19 	(9) the location of the companies in which each Minnesota business investment 
12.20 	company has invested;
12.21 	(10) those Minnesota business investment companies that have been decertified, 
12.22 	including the reasons for decertification; and
12.23 	(11) other related information necessary to evaluate the effect of this section on 
12.24 	economic development.

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

12.26 	Sec. 2. Minnesota Statutes 2008, section 290.01, subdivision 19a, as amended by Laws 
12.27 	2009, chapter 12, article 1, section 3, is amended to read:
12.28 		Subd. 19a. Additions to federal taxable income. For individuals, estates, and 
12.29 	trusts, there shall be added to federal taxable income: 
12.30 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
12.31 	or governmental subdivision, municipality, or governmental agency or instrumentality 
12.32 	of any state other than Minnesota exempt from federal income taxes under the Internal 
12.33 	Revenue Code or any other federal statute; and 
12.34 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
12.35 	Code, except the portion of the exempt-interest dividends derived from interest income 
13.1 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
13.2 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
13.3 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
13.4 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
13.5 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
13.6 	fund of the regulated investment company as defined in section 851(g) of the Internal 
13.7 	Revenue Code, making the payment; and 
13.8 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
13.9 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
13.10 	interest income on obligations of the state in which the tribe is located; 
13.11 	(2) the amount of income or sales and use taxes paid or accrued within the taxable 
13.12 	year under this chapter and the amount of taxes based on net income paid or sales and 
13.13 	use taxes paid to any other state or to any province or territory of Canada, to the extent 
13.14 	allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition 
13.15 	may not be more than the amount by which the itemized deductions as allowed under 
13.16 	section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction 
13.17 	as defined in section 63(c) of the Internal Revenue Code, disregarding the amount allowed 
13.18 	under section 63(c)(1)(C) of the Internal Revenue Code. For the purpose of this paragraph, 
13.19 	the disallowance of itemized deductions under section 68 of the Internal Revenue Code of 
13.20 	1986, income or sales and use tax is the last itemized deduction disallowed; 
13.21 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
13.22 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies; 
13.23 	(4) the amount of income taxes paid or accrued within the taxable year under this 
13.24 	chapter and taxes based on net income paid to any other state or any province or territory 
13.25 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
13.26 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
13.27 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
13.28 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
13.29 	other than expenses or interest used in computing net interest income for the subtraction 
13.30 	allowed under subdivision 19b, clause (1); 
13.31 	(6) the amount of a partner's pro rata share of net income which does not flow 
13.32 	through to the partner because the partnership elected to pay the tax on the income under 
13.33 	section 6242(a)(2) of the Internal Revenue Code; 
13.34 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
13.35 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
13.36 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
14.1 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
14.2 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
14.3 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
14.4 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
14.5 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
14.6 	under section 168(k) is allowed; 
14.7 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
14.8 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
14.9 	Revenue Code of 1986, as amended through December 31, 2003; 
14.10 	(9) to the extent deducted in computing federal taxable income, the amount of the 
14.11 	deduction allowable under section 199 of the Internal Revenue Code; 
14.12 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
14.13 	federal subsidies for prescription drug plans; 
14.14 	(11) the amount of expenses disallowed under section 290.10, subdivision 2;
14.15 	(12) the amount deducted for qualified tuition and related expenses under section 
14.16 	222 of the Internal Revenue Code, to the extent deducted from gross income; 
14.17 	(13) the amount deducted for certain expenses of elementary and secondary school 
14.18 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
14.19 	from gross income; and
14.20 	(14) the additional standard deduction for property taxes payable that is allowable 
14.21 	under section 63(c)(1)(C) of the Internal Revenue Code; and
14.22 	(15) to the extent deducted in computing federal taxable income, the amount of 
14.23 	the deduction allowed under section 163(h)(3)(A)(i) of the Internal Revenue Code for a 
14.24 	qualified residence defined in section 163(h)(4)(A)(i)(II) of the Internal Revenue Code.

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

14.27 	Sec. 3. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:
14.28 		Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 
14.29 	and trusts, there shall be subtracted from federal taxable income: 
14.30 	(1) net interest income on obligations of any authority, commission, or 
14.31 	instrumentality of the United States to the extent includable in taxable income for federal 
14.32 	income tax purposes but exempt from state income tax under the laws of the United States; 
14.33 	(2) if included in federal taxable income, the amount of any overpayment of income 
14.34 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
14.35 	is received as a refund or as a credit to another taxable year's income tax liability; 
15.1 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
15.2 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
15.3 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
15.4 	transportation of each qualifying child in attending an elementary or secondary school 
15.5 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
15.6 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
15.7 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
15.8 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
15.9 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
15.10 	"textbooks" includes books and other instructional materials and equipment purchased 
15.11 	or leased for use in elementary and secondary schools in teaching only those subjects 
15.12 	legally and commonly taught in public elementary and secondary schools in this state. 
15.13 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
15.14 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
15.15 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
15.16 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
15.17 	or materials for, or transportation to, extracurricular activities including sporting events, 
15.18 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
15.19 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
15.20 	given in section 32(c)(3) of the Internal Revenue Code; 
15.21 	(4) income as provided under section 290.0802; 
15.22 	(5) to the extent included in federal adjusted gross income, income realized on 
15.23 	disposition of property exempt from tax under section 290.491; 
15.24 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
15.25 	of the Internal Revenue Code in determining federal taxable income by an individual 
15.26 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
15.27 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
15.28 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
15.29 	under the provisions of Public Law 109-1; 
15.30 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
15.31 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
15.32 	which is included in gross income under section 87 of the Internal Revenue Code; 
15.33 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
15.34 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
15.35 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
15.36 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
16.1 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
16.2 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
16.3 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
16.4 	the extent they exceed the federal foreign tax credit; 
16.5 	(9) in each of the five tax years immediately following the tax year in which an 
16.6 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
16.7 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
16.8 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
16.9 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
16.10 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
16.11 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
16.12 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
16.13 	less than zero; 
16.14 	(10) job opportunity building zone income as provided under section 469.316; 
16.15 	(11) to the extent included in federal taxable income, the amount of compensation 
16.16 	paid to members of the Minnesota National Guard or other reserve components of the 
16.17 	United States military for active service performed in Minnesota, excluding compensation 
16.18 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
16.19 	this clause, "active service" means (i) state active service as defined in section 190.05, 
16.20 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
16.21 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
16.22 	subdivision 5c, but "active service" excludes service performed in accordance with section 
16.23 	190.08, subdivision 3; 
16.24 	(12) to the extent included in federal taxable income, the amount of compensation 
16.25 	paid to Minnesota residents who are members of the armed forces of the United States or 
16.26 	United Nations for active duty performed outside Minnesota under United States Code, 
16.27 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
16.28 	the United Nations; 
16.29 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
16.30 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
16.31 	to another person for human organ transplantation. For purposes of this clause, "organ" 
16.32 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
16.33 	"human organ transplantation" means the medical procedure by which transfer of a human 
16.34 	organ is made from the body of one person to the body of another person; "qualified 
16.35 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
16.36 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
17.1 	may be subtracted under this clause only once; and "qualified donor" means the individual 
17.2 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
17.3 	individual may claim the subtraction in this clause for each instance of organ donation for 
17.4 	transplantation during the taxable year in which the qualified expenses occur; 
17.5 	(14) in each of the five tax years immediately following the tax year in which an 
17.6 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
17.7 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
17.8 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
17.9 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
17.10 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
17.11 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
17.12 	subtraction is not allowed under this clause; 
17.13 	(15) to the extent included in federal taxable income, compensation paid to a service 
17.14 	member as defined in United States Code, title 10, section 101(a)(5), for military service 
17.15 	as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2); 
17.16 	(16) international economic development zone income as provided under section 
17.17 	469.325; and
17.18 	(17) to the extent included in federal taxable income, the amount of national service 
17.19 	educational awards received from the National Service Trust under United States Code, 
17.20 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
17.21 	program; and
17.22 	(18) to the extent included in federal taxable income for a shareholder of an S 
17.23 	corporation, or a partner of a partnership, an amount equal to ten percent of the taxpayer's 
17.24 	total Minnesota net partnership and S corporation income, less the taxpayer's total net 
17.25 	Minnesota passive partnership and S corporation income pursuant to section 469 of the 
17.26 	Internal Revenue Code, but not less than zero.

17.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
17.28 	December 31, 2008, and ending before January 1, 2013.

17.29 	Sec. 4. Minnesota Statutes 2008, section 290.014, subdivision 2, is amended to read:
17.30 		Subd. 2.Nonresident individuals. Except as provided in section 290.015, a 
17.31 	nonresident individual is subject to the return filing requirements and to tax as provided in 
17.32 	this chapter to the extent that the income of the nonresident individual is:  
17.33 	(1) allocable to this state under section 290.17, 290.191, or 290.20;  
17.34 	(2) taxed to the individual under the Internal Revenue Code (or not taxed under the 
17.35 	Internal Revenue Code by reason of its character but of a character which is taxable under 
18.1 	this chapter) in the individual's capacity as a beneficiary of an estate with income allocable 
18.2 	to this state under section 290.17, 290.191, or 290.20 and the income, taking into account 
18.3 	the income character provisions of section 662(b) of the Internal Revenue Code, would be 
18.4 	allocable to this state under section 290.17, 290.191, or 290.20 if realized by the individual 
18.5 	directly from the source from which realized by the estate;  
18.6 	(3) taxed to the individual under the Internal Revenue Code (or not taxed under the 
18.7 	Internal Revenue Code by reason of its character but of a character that is taxable under 
18.8 	this chapter) in the individual's capacity as a beneficiary or grantor or other person treated 
18.9 	as a substantial owner of a trust with income allocable to this state under section 290.17, 
18.10 	290.191, or 290.20 and the income, taking into account the income character provisions of 
18.11 	section 652(b), 662(b), or 664(b) of the Internal Revenue Code, would be allocable to this 
18.12 	state under section 290.17, 290.191, or 290.20 if realized by the individual directly from 
18.13 	the source from which realized by the trust;  
18.14 	(4) taxed to the individual under the Internal Revenue Code (or not taxed under the 
18.15 	Internal Revenue Code by reason of its character but of a character which is taxable under 
18.16 	this chapter) in the individual's capacity as a limited or general partner in a partnership 
18.17 	with income allocable to this state under section 290.17, 290.191, or 290.20 and the 
18.18 	income, taking into account the income character provisions of section 702(b) of the 
18.19 	Internal Revenue Code, would be allocable to this state under section 290.17, 290.191, 
18.20 	or 290.20 if realized by the individual directly from the source from which realized by 
18.21 	the partnership; or
18.22 	(5) taxed to the individual under the Internal Revenue Code (or not taxed under the 
18.23 	Internal Revenue Code by reason of its character but of a character which is taxable under 
18.24 	this chapter) in the individual's capacity as a shareholder of a corporation treated as an 
18.25 	"S" corporation under section 290.9725, and income allocable to this state under section 
18.26 	290.17, 290.191, or 290.20 and the income, taking into account the income character 
18.27 	provisions of section 1366(b) of the Internal Revenue Code, would be allocable to this 
18.28 	state under section 290.17, 290.191, or 290.20 if realized by the individual directly from 
18.29 	the source from which realized by the corporation; or
18.30 	(6) taxed to the individual under the Internal Revenue Code (or not taxed under the 
18.31 	Internal Revenue Code by reason of its character but of a character which is taxable under 
18.32 	this chapter) in the individual's capacity as the sole member of a limited liability company 
18.33 	that is disregarded for federal income tax purposes, with income allocable to this state 
18.34 	under section 290.17, 290.191, or 290.20, as though realized by the individual directly 
18.35 	from the source from which it was realized by the limited liability company.  

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

19.1 	Sec. 5. Minnesota Statutes 2008, section 290.06, subdivision 2c, is amended to read:
19.2 		Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income 
19.3 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
19.4 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
19.5 	applying to their taxable net income the following schedule of rates: 
19.6 	(1) On the first $25,680 $33,220, for taxable years beginning after December 31, 
19.7 	2008, and before January 1 of the first expiration year, 6.00 percent, and for taxable 
19.8 	years beginning after December 31 of the calendar year prior to the first expiration year, 
19.9 	5.35 percent; 
19.10 	(2) On all over $25,680 $33,220, but not over $102,030 $131,970, for taxable years 
19.11 	beginning after December 31, 2008, and before January 1 of the second expiration year, 
19.12 	7.70 percent, and for taxable years beginning after December 31 of the calendar year prior 
19.13 	to the second expiration year, 7.05 percent; 
19.14 	(3) On all over $102,030$131,970, but not over $250,000, for taxable years 
19.15 	beginning after December 31, 2008, and before January 1 of the third expiration year, 8.50 
19.16 	percent. For taxable years beginning after December 31 of the calendar year prior to the 
19.17 	third expiration year, on all over $131,970, 7.85 percent;
19.18 	(4) On all over $250,000, 9.25 percent for taxable years beginning after December 
19.19 	31, 2008, and before January 1 of the fourth expiration year. 
19.20 	In this subdivision and section 290.091, subdivision 1, the "first expiration year" 
19.21 	means the taxable year beginning after a February forecast in which the commissioner 
19.22 	of management and budget projects a positive general fund balance as of June 30, 2013, 
19.23 	that equals or exceeds the projected amount of tax revenue produced by the increased tax 
19.24 	rate under clause (1) of this paragraph and clause (1) of paragraphs (b) and (c) of this 
19.25 	subdivision for that taxable year.
19.26 	In this subdivision, the "second expiration year" means the taxable year beginning 
19.27 	after a February forecast in which the commissioner of management and budget projects a 
19.28 	positive general fund balance as of June 30, 2013, that equals or exceeds the projected 
19.29 	amount of tax revenue produced by the increased tax rates under clause (2) of this 
19.30 	paragraph and clause (2) of paragraphs (b) and (c) of this subdivision for that taxable year.
19.31 	In this subdivision, the "third expiration year" means the taxable year beginning 
19.32 	after a February forecast in which the commissioner of management and budget projects a 
19.33 	positive general fund balance as of June 30, 2013, that equals or exceeds the projected 
19.34 	amount of tax revenue produced by the increased tax rates under clause (3) of this 
19.35 	paragraph and clause (3) of paragraphs (b) and (c) of this subdivision for that taxable year.
20.1 	In this subdivision, the "fourth expiration year" means the taxable year beginning 
20.2 	after a February forecast in which the commissioner of management and budget projects a 
20.3 	positive general fund balance as of June 30, 2013, that equals or exceeds the projected 
20.4 	amount of tax revenue produced by the increased tax rates under clause (4) of this 
20.5 	paragraph and clause (4) of paragraphs (b) and (c) of this subdivision for that taxable year.
20.6 	The expiration years in this subdivision must be implemented in numerical order, 
20.7 	provided that, if the positive general fund balance in a forecast is sufficient to eliminate 
20.8 	more than one rate increase in the order provided, more than one may be eliminated in 
20.9 	that year.
20.10 	Married individuals filing separate returns, estates, and trusts must compute their 
20.11 	income tax by applying the above rates to their taxable income, except that the income 
20.12 	brackets will be one-half of the above amounts. 
20.13 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
20.14 	computed by applying to taxable net income the following schedule of rates: 
20.15 	(1) On the first $17,570 $22,730, for taxable years beginning after December 31, 
20.16 	2008, and before January 1 of the first expiration year, 6.00 percent, and for taxable 
20.17 	years beginning after December 31 of the calendar year prior to the first expiration year, 
20.18 	5.35 percent; 
20.19 	(2) On all over $17,570 $22,730, but not over $57,710 $74,650, for taxable years 
20.20 	beginning after December 31, 2008, and before January 1 of the second expiration year, 
20.21 	7.70 percent, and for taxable years beginning after December 31 of the calendar year prior 
20.22 	to the second expiration year, 7.05 percent; 
20.23 	(3) On all over $57,710 $74,650, but not over $141,250, for taxable years beginning 
20.24 	after December 31, 2008, and before January 1 of the third expiration year, 8.50 percent. 
20.25 	For taxable years beginning after December 31 of the calendar year prior to the third 
20.26 	expiration year, on all over $74,650, 7.85 percent;
20.27 	(4) On all over $141,250, 9.25 percent for taxable years beginning after December 
20.28 	31, 2008, and before January 1 of the fourth expiration year. 
20.29 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
20.30 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
20.31 	computed by applying to taxable net income the following schedule of rates: 
20.32 	(1) On the first $21,630 $27,980, for taxable years beginning after December 31, 
20.33 	2008, and before January 1 of the first expiration year, 6.00 percent, and for taxable 
20.34 	years beginning after December 31 of the calendar year prior to the first expiration year, 
20.35 	5.35 percent; 
21.1 	(2) On all over $21,630 $27,980, but not over $86,910 $112,420, for taxable years 
21.2 	beginning after December 31, 2008, and before January 1 of the second expiration year, 
21.3 	7.70 percent, and for taxable years beginning after December 31 of the calendar year prior 
21.4 	to the second expiration year, 7.05 percent; 
21.5 	(3) On all over $86,910 $112,420, but not over $212,500, for taxable years beginning 
21.6 	after December 31, 2008, and before January 1 of the third expiration year, 8.50 percent. 
21.7 	For taxable years beginning after December 31 of the calendar year prior to the third 
21.8 	expiration year, on all over $112,420, 7.85 percent;
21.9 	(4) On all over $212,500, 9.25 percent for taxable years beginning after December 
21.10 	31, 2008, and before January 1 of the fourth expiration year. 
21.11 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
21.12 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
21.13 	an amount determined by the commissioner must be computed in accordance with tables 
21.14 	prepared and issued by the commissioner of revenue based on income brackets of not 
21.15 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
21.16 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
21.17 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1. 
21.18 	(e) An individual who is not a Minnesota resident for the entire year must compute 
21.19 	the individual's Minnesota income tax as provided in this subdivision. After the 
21.20 	application of the nonrefundable credits provided in this chapter, the tax liability must 
21.21 	then be multiplied by a fraction in which: 
21.22 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
21.23 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
21.24 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and 
21.25 	(13) and reduced by the Minnesota assignable portion of the subtraction for United States 
21.26 	government interest under section 290.01, subdivision 19b, clause (1), and the subtractions 
21.27 	under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), and (16), after applying 
21.28 	the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and 
21.29 	(2) the denominator is the individual's federal adjusted gross income as defined in 
21.30 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
21.31 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and (13) and 
21.32 	reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), (9), 
21.33 	(10), (14), (15), and (16). 

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

22.1 	Sec. 6. Minnesota Statutes 2008, section 290.06, subdivision 2d, is amended to read:
22.2 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
22.3 	December 31, 2000 2009, the minimum and maximum dollar amounts for each rate 
22.4 	bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the 
22.5 	percentage determined under paragraph (b). For the purpose of making the adjustment as 
22.6 	provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the 
22.7 	rate brackets as they existed for taxable years beginning after December 31, 1999 2008, 
22.8 	and before January 1, 2001 2010. The rate applicable to any rate bracket must not be 
22.9 	changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes 
22.10 	in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10 
22.11 	amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
22.12 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
22.13 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
22.14 	section 1(f)(3)(B) the word "1999" "2008" shall be substituted for the word "1992." For 
22.15 	2001 2010, the commissioner shall then determine the percent change from the 12 months 
22.16 	ending on August 31, 1999 2008, to the 12 months ending on August 31, 2000 2009, and 
22.17 	in each subsequent year, from the 12 months ending on August 31, 1999 2008, to the 12 
22.18 	months ending on August 31 of the year preceding the taxable year. The determination of 
22.19 	the commissioner pursuant to this subdivision shall not be considered a "rule" and shall 
22.20 	not be subject to the Administrative Procedure Act contained in chapter 14.
22.21 	No later than December 15 of each year, the commissioner shall announce the 
22.22 	specific percentage that will be used to adjust the tax rate brackets.

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

22.25 	Sec. 7. Minnesota Statutes 2008, section 290.06, is amended by adding a subdivision 
22.26 	to read:
22.27 		Subd. 36.Investment tax credit. (a) A credit is allowed against the tax imposed 
22.28 	by this chapter for a qualified taxpayer's investment in a qualified new business venture. 
22.29 	The credit equals 25 percent of the taxpayer's investment made in the business, but may 
22.30 	not exceed the least of:
22.31 	(1) the liability for tax under this chapter, including the alternative minimum taxes in 
22.32 	sections 290.091 and 290.0921;
22.33 	(2) $50,000 for an individual not part of a partnership; or
22.34 	(3) $300,000 for a pass-through entity or C corporation.
22.35 	(b) For purposes of this subdivision, "qualified taxpayer" means:
23.1 	(1) an accredited investor within the meaning of Regulation D of the Securities and 
23.2 	Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether 
23.3 	part of a pass-through entity or not; and
23.4 	(2) an accredited investor who does not own, control, or hold power to vote 20 
23.5 	percent or more of the outstanding securities of the qualified business venture in which the 
23.6 	eligible investment is proposed.
23.7 	(c) For purposes of this paragraph, "commissioner" means the commissioner 
23.8 	of employment and economic development. Qualified taxpayers must apply to the 
23.9 	commissioner for certification. The application must be in the form and made under the 
23.10 	procedures specified by the commissioner. The commissioner may provide certificates 
23.11 	entitling qualified taxpayers to tax credits under this subdivision. The maximum amount 
23.12 	of credits for which the commissioner may issue certificates in each taxable year is 
23.13 	$10,000,000 in fiscal years 2010 to 2013. In awarding certificates under this paragraph, 
23.14 	the commissioner must award them to qualified taxpayers in the order in which the 
23.15 	applications are received. A credit certificate is first available to be applied against a 
23.16 	taxpayer's liability in the fourth taxable year after the year in which the certificate is 
23.17 	awarded.
23.18 	(d) Each pass-through entity must provide each investor a statement indicating the 
23.19 	investor's share of the credit amount certified to the pass-through entity under paragraph 
23.20 	(c) based on its share of the pass-through entity's assets. The credit shall not exceed 
23.21 	$50,000 for each individual part of a pass-through entity.
23.22 	(e) If the amount of the credit under this subdivision in any taxable year exceeds the 
23.23 	limitation under paragraph (a), clause (1), the excess is a credit carryover to each of the ten 
23.24 	succeeding years but may not exceed $50,000 for an individual not part of a partnership 
23.25 	and $300,000 for a pass-through entity or C corporation. The entire amount of the excess 
23.26 	unused credit must be carried first to the earliest of the taxable years to which the credit 
23.27 	may be carried, and then to each successive year to which the credit may be carried. The 
23.28 	amount of the unused credit that may be added under this paragraph may not exceed the 
23.29 	taxpayer's liability for tax less the credit for the taxable year.
23.30 	(f) A business is a qualified business venture for purposes of this subdivision only if 
23.31 	the business satisfies all of the following conditions:
23.32 	(1) the business has its headquarters in Minnesota;
23.33 	(2) at least 80 percent of the business's employees are employed in Minnesota, and 
23.34 	80 percent of the business's total payrolls paid or incurred are in the state;
23.35 	(3) the business is engaged in, or is committed to engage in:
24.1 	(i) using advanced technology to add value to a product, process, or service in a 
24.2 	qualified high-technology field or qualified biotechnology or medical device field;
24.3 	(ii) conducting research in and development of a product, process, or service in a 
24.4 	qualified high-technology field or qualified biotechnology or medical device field;
24.5 	(iii) developing a new product, process, or service in a qualified high-technology 
24.6 	field or qualified biotechnology or medical device field; or
24.7 	(iv) qualified green manufacturing;
24.8 	(4) the business is not engaged in real estate development, insurance, banking, 
24.9 	lending, lobbying, political consulting, information technology consulting, wholesale or 
24.10 	retail trade, leisure, hospitality, transportation, construction, ethanol production from 
24.11 	corn, or professional services provided by attorneys, accountants, business consultants, 
24.12 	physicians, or health care consultants;
24.13 	(5) the business has fewer than 25 employees, and, if the business has more than 
24.14 	five employees, the business must pay its employees annual wages of at least 175 percent 
24.15 	of the federal poverty guideline for the year for a family of four, and must pay any 
24.16 	remaining employees annual wages of at least 110 percent of the federal poverty guideline 
24.17 	for a family of four;
24.18 	(6) the business has not been in operation for more than ten consecutive years;
24.19 	(7) the business has not received more than $1,000,000 in investments that have 
24.20 	qualified for and received tax credits under this section;
24.21 	(8) the business has less than $2,000,000 in annual gross sales receipts;
24.22 	(9) the business is not a subsidiary or an affiliate of a business that employs more 
24.23 	than 100 employees or has gross sales receipts for the previous year of more than 
24.24 	$1,000,000, computed by aggregating all of the employees and gross sales receipts of the 
24.25 	business entities affiliated with the business; and 
24.26 	(10) the business has not received private equity investments of more than 
24.27 	$2,000,000.
24.28 	(g) For purposes of this subdivision, "qualified high-technology field" includes, but 
24.29 	is not limited to, aerospace, agricultural processing, alternative energy, environmental 
24.30 	engineering, food technology, cellulosic ethanol, information technology, materials 
24.31 	science technology, nanotechnology, and telecommunications, but excludes business 
24.32 	qualifying under the definitions in paragraphs (h) and (i).
24.33 	(h) For purposes of this subdivision, "qualified biotechnology or medical device 
24.34 	field" means the business of manufacturing, processing, assembling, researching, or 
24.35 	developing biotechnology or medical device products, including biotechnology and 
24.36 	device products used in agriculture.
25.1 	(i) For purposes of this subdivision, "qualified green manufacturing" means a 
25.2 	business whose primary business activity is production of products, processes, methods, 
25.3 	technologies, or services intended to do one or more of the following:
25.4 	(1) increase the use of energy from renewable sources, as defined in section 
25.5 	216B.1691;
25.6 	(2) increase the energy efficiency of the electric utility infrastructure system or to 
25.7 	increase energy conservation related to electricity use, as provided in sections 216B.2401 
25.8 	and 216B.241;
25.9 	(3) reduce greenhouse gas emissions, as defined in section 216H.01, subdivision 
25.10 	2, or to mitigate greenhouse gas emissions through, but not limited to, carbon capture, 
25.11 	storage, or sequestration;
25.12 	(4) monitor, protect, restore, and preserve the quality of surface waters; and
25.13 	(5) expand use of biofuels, including expanding the feasibility or reducing the cost 
25.14 	of producing biofuels or the types of equipment, machinery, and vehicles that can use 
25.15 	biofuels.

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

25.17 	Sec. 8. [290.0678] CREDIT FOR HISTORIC STRUCTURE REHABILITATION.
25.18 		Subdivision 1.Definitions. (a) As used in this section, the terms defined in this 
25.19 	subdivision have the meanings given.
25.20 	(b) "Certified historic structure" means a property located in Minnesota and listed 
25.21 	individually on the National Register of Historic Places or a historic property designated 
25.22 	by either a certified local government or a heritage preservation commission created 
25.23 	under the National Historic Preservation Act of 1966 and whose designation is approved 
25.24 	by the state historic preservation officer.
25.25 	(c) "Eligible property" means a certified historic structure or a structure in a certified 
25.26 	historic district that is offered or used for residential or business purposes.
25.27 	(d) "Structure in a certified historic district" means a structure located in Minnesota 
25.28 	that is certified by the State Historic Preservation Office as contributing to the historic 
25.29 	significance of a certified historic district listed on the National Register of Historic Places 
25.30 	or a local district that has been certified by the United States Department of the Interior.
25.31 		Subd. 2.Credit allowed. A taxpayer who incurs costs for the rehabilitation of 
25.32 	eligible property may take a credit against the tax imposed under this chapter in an amount 
25.33 	equal to 20 percent of the total costs of rehabilitation. Costs of rehabilitation include, 
25.34 	but are not limited to, qualified rehabilitation expenditures as defined under section 
25.35 	47(c)(2)(A) of the Internal Revenue Code, provided that the costs of rehabilitation must 
26.1 	exceed 50 percent of the total basis in the property at the time the rehabilitation activity 
26.2 	begins and the rehabilitation must meet standards consistent with the standards of the 
26.3 	Secretary of the Interior for rehabilitation as determined by the State Historic Preservation 
26.4 	Office of the Minnesota Historical Society.
26.5 		Subd. 3.Carryforward. If the amount of the credit under subdivision 2 exceeds the 
26.6 	tax liability under this chapter for the year in which the cost is incurred, the amount that 
26.7 	exceeds the tax liability may be carried forward to each of the ten taxable years succeeding 
26.8 	the taxable year in which the expense was incurred. The entire amount of the credit must 
26.9 	be carried to the earliest taxable year to which the amount may be carried. The unused 
26.10 	portion of the credit must be carried to the following taxable year.
26.11 		Subd. 4.Partnerships; multiple owners; transfers. (a) Credits granted to a 
26.12 	partnership, a limited liability company taxed as a partnership, or multiple owners of 
26.13 	property shall be passed through to the partners, members, or owners, respectively, pro 
26.14 	rata or pursuant to an executed agreement among the partners, members, or owners 
26.15 	documenting an alternate distribution method.
26.16 	(b) Taxpayers eligible for credits may transfer, sell, or assign the credits in whole 
26.17 	or part. Any assignee may use acquired credits to offset up to 100 percent of the taxes 
26.18 	otherwise imposed by this chapter. The assignee shall perfect such transfer by notifying 
26.19 	the Department of Revenue in writing within 30 calendar days following the effective 
26.20 	date of the transfer in such form and manner as shall be prescribed by the Department 
26.21 	of Revenue. The proceeds of any sale or assignment of a credit shall be exempt from 
26.22 	taxation under this chapter.
26.23 		Subd. 5.Process. To claim the credit, the taxpayer must apply to the State Historic 
26.24 	Preservation Office of the Minnesota Historical Society before a historic rehabilitation 
26.25 	project begins. The State Historic Preservation Office shall determine the amount of 
26.26 	eligible rehabilitation costs and whether the rehabilitation meets the standards of the 
26.27 	United States Department of the Interior. The State Historic Preservation Office shall issue 
26.28 	certificates verifying eligibility for and the amount of credit. The taxpayer shall attach 
26.29 	the certificate to any income tax return on which the credit is claimed. The State Historic 
26.30 	Preservation Office of the Minnesota Historical Society may collect fees for applications 
26.31 	for the historic preservation tax credit. Fees shall be set at an amount that does not exceed 
26.32 	the costs of administering the tax credit program.
26.33 		Subd. 6.Mortgage certificates; credit for lending institutions. (a) The taxpayer 
26.34 	may elect, in lieu of the credit otherwise allowed under this section, to receive a historic 
26.35 	rehabilitation mortgage credit certificate.
27.1 	(b) For purposes of this subdivision, a historic rehabilitation mortgage credit is a 
27.2 	certificate that is issued to the taxpayer according to procedures prescribed by the State 
27.3 	Historic Preservation Office with respect to the certified rehabilitation and which meets 
27.4 	the requirements of this paragraph. The face amount of the certificate must be equal to 
27.5 	the credit that would be allowable under subdivision 2 to the taxpayer with respect to 
27.6 	the rehabilitation. The certificate may only be transferred by the taxpayer to a lending 
27.7 	institution, including a nondepository home mortgage lending institution, in connection 
27.8 	with a loan:
27.9 	(1) that is secured by the building with respect to which the credit is issued; and 
27.10 	(2) the proceeds of which may not be used for any purpose other than the acquisition 
27.11 	or rehabilitation of the building.
27.12 	(c) In exchange for the certificate, the lending institution must provide to the 
27.13 	taxpayer an amount equal to the face amount of the certificate discounted by the amount 
27.14 	by which the federal income tax liability of the lending institution is increased due to its 
27.15 	use of the certificate in the manner provided in this section. That amount must be applied, 
27.16 	as directed by the taxpayer, in whole or in part, to reduce:
27.17 	(1) the principal amount of the loan;
27.18 	(2) the rate of interest on the loan; or 
27.19 	(3) the taxpayer's cost of purchasing the building, but only in the case of a qualified 
27.20 	historic home that is located in a poverty-impacted area as designated by the State Historic 
27.21 	Preservation Office.
27.22 	The lending institution may take as a credit against the tax due under this chapter an 
27.23 	amount equal to the amount specified in the certificate. If the amount of the discount 
27.24 	retained by the lender exceeds the amount by which the lending institution's federal 
27.25 	income tax liability is increased due to the use of a mortgage credit certificate, the excess 
27.26 	shall be refunded to the borrower with interest at the rate prescribed by the State Historic 
27.27 	Preservation Office. The lending institution may carry forward all unused credits under 
27.28 	this subdivision until exhausted. Nothing in this subdivision requires a lending institution 
27.29 	to accept a historic rehabilitation certificate from any person.
27.30 		Subd. 7.National landmarks. Notwithstanding subdivision 2, the rehabilitation 
27.31 	of a property designated as a National Historic Landmark on the National Register of 
27.32 	Historic Places, shall be eligible for the credit under this section provided the renovation 
27.33 	of the specific property, designated as the National Historic Landmark, without regard to 
27.34 	its being part of a larger project, is consistent with the standards set forth in section 47(c) 
27.35 	of the Internal Revenue Code, and all other requirements of this section are met.
28.1 		Subd. 8.Determination of economic impact. The Minnesota Historical Society 
28.2 	shall annually determine the economic impact to the state from the rehabilitation of 
28.3 	eligible property for which credits are provided under this section and report on the impact 
28.4 	to the committees on taxes of the senate and house of representatives.

28.5 	EFFECTIVE DATE. This section is effective for taxable years after December 31, 
28.6 	2008, except that only projects that have obtained a certificate pursuant to subdivision 5 
28.7 	after June 30, 2009, are eligible for the credit.

28.8 	Sec. 9. [290.0681] FILM PRODUCTION INVESTMENT CREDIT.
28.9 		Subdivision 1.Definitions. For the purposes of this section, the following terms 
28.10 	have the meanings given. 
28.11 	(a) "Qualifying film production" means a motion picture that is certified by the 
28.12 	Minnesota Film and TV Board as made wholly in Minnesota.
28.13 	(b) "Qualified investment" means an amount of cash used to pay qualified production 
28.14 	expenses that is provided by an investor who does not have any financial interest in the 
28.15 	motion picture or the production company responsible for filming the motion picture.
28.16 	(c) "Motion picture" means a feature length film, whether shot on film or digital 
28.17 	video, or a television series with a national distribution agreement, for theatrical or 
28.18 	television viewing or as a television pilot, but does not include television coverage of 
28.19 	news and athletic events.
28.20 	(d) "Qualified production expenses" means preproduction, production, and 
28.21 	postproduction expenditures incurred in Minnesota that are directly used in a qualifying 
28.22 	film production, including, without limitation, set construction and operation; wardrobes, 
28.23 	make-up, accessories, and related services; costs associated with photography and sound 
28.24 	synchronization, lighting, and related services and materials; editing and related services; 
28.25 	rental of facilities and equipment; leasing of vehicles; costs of food and lodging; digital or 
28.26 	tape editing, film processing, transfer of film to tape or digital format, sound mixing, and 
28.27 	special and visual effects; total aggregate payroll; and music, if performed, composed, or 
28.28 	recorded by a Minnesota musician or released or published by a Minnesota-domiciled 
28.29 	and headquartered company. The following are not included: (1) postproduction costs for 
28.30 	marketing and distribution; (2) any amounts that are later reimbursed; (3) any costs related 
28.31 	to the transfer of credits; and (4) any amounts paid to persons or entities as a result of their 
28.32 	participation in profits from the exploitation of the production. 
28.33 		Subd. 2.Credit allowed. An individual or corporate taxpayer is allowed a credit 
28.34 	against the tax due under this chapter equal to 25 percent of the qualified investment in a 
28.35 	qualifying film production made during the taxable year.
29.1 		Subd. 3.Carryover. The credit is limited to the liability for tax, as computed under 
29.2 	this chapter for the taxable year. If the amount of the credit determined under this section 
29.3 	for any taxable year exceeds this limitation, the excess is a film investment credit carryover 
29.4 	to each of the five succeeding taxable years. The entire amount of the excess unused credit 
29.5 	for the taxable year is carried first to the earliest of the taxable years to which the credit 
29.6 	may be carried and then to each successive year to which the credit may be carried. The 
29.7 	amount of the unused credit which may be added under this subdivision shall not exceed 
29.8 	the taxpayer's liability for tax, less the film investment credit for the taxable year.
29.9 		Subd. 4.Certification of credits. (a) Before making a qualified investment, 
29.10 	taxpayers must apply to the Minnesota Film and TV Board for a film production investment 
29.11 	credit certificate. The application must be in the form and made under the procedures 
29.12 	specified by the Minnesota Film and TV Board. The Minnesota Film and TV Board must 
29.13 	only issue credit certificates for qualifying investments in qualifying film productions.
29.14 	(b) The Minnesota Film and TV Board may not issue certificates for more than 
29.15 	$1,000,000 in film production investment credits per year.
29.16 	(c) By January 31 of each year, the Minnesota Film and TV Board must report to the 
29.17 	commissioner of revenue the number, amount, and taxpayers to whom film production 
29.18 	investment credit certificates were issued during the preceding taxable year, and must 
29.19 	provide verification that the taxpayers issued credit certificates made the full amount of 
29.20 	the investment required by the certificate.

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

29.23 	Sec. 10. Minnesota Statutes 2008, section 290.091, subdivision 1, is amended to read:
29.24 		Subdivision 1.Imposition of tax. In addition to all other taxes imposed by this 
29.25 	chapter a tax is imposed on individuals, estates, and trusts equal to the excess (if any) of
29.26 	(a) an amount equal to 7.0 percent for taxable years beginning after December 
29.27 	31, 2008, and before January 1 of the first expiration year; 6.8 percent for taxable years 
29.28 	beginning after December 31 of the first expiration year and before January 1 of the 
29.29 	second expiration year; 6.6 percent for taxable years beginning after December 31 of the 
29.30 	second expiration year and before January 1 of the third expiration year; 6.5 percent 
29.31 	for taxable years beginning after December 31 of the third expiration year and before 
29.32 	January 1 of the fourth expiration year, and 6.4 percent for taxable years beginning after 
29.33 	December 31 of the fourth expiration year, of alternative minimum taxable income after 
29.34 	subtracting the exemption amount, over
29.35 	(b) the regular tax for the taxable year.

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

30.3 	Sec. 11. Minnesota Statutes 2008, section 290.091, subdivision 2, is amended to read:
30.4 		Subd. 2. Definitions. For purposes of the tax imposed by this section, the following 
30.5 	terms have the meanings given: 
30.6 	(a) "Alternative minimum taxable income" means the sum of the following for 
30.7 	the taxable year: 
30.8 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
30.9 	55(b)(2) of the Internal Revenue Code; 
30.10 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
30.11 	minimum taxable income, but excluding: 
30.12 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
30.13 	Code;
30.14 	(ii) the medical expense deduction; 
30.15 	(iii) the casualty, theft, and disaster loss deduction; and 
30.16 	(iv) the impairment-related work expenses of a disabled person; 
30.17 	(3) for depletion allowances computed under section 613A(c) of the Internal 
30.18 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
30.19 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
30.20 	the excess of the deduction for depletion allowable under section 611 of the Internal 
30.21 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
30.22 	taxable year (determined without regard to the depletion deduction for the taxable year); 
30.23 	(4) to the extent not included in federal alternative minimum taxable income, the 
30.24 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
30.25 	Internal Revenue Code determined without regard to subparagraph (E); 
30.26 	(5) to the extent not included in federal alternative minimum taxable income, the 
30.27 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and 
30.28 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses 
30.29 	(7) to (9), (12), and (13); 
30.30 	less the sum of the amounts determined under the following: 
30.31 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1); 
30.32 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
30.33 	19b, clause (2), to the extent included in federal alternative minimum taxable income; 
30.34 	(3) the amount of investment interest paid or accrued within the taxable year on 
30.35 	indebtedness to the extent that the amount does not exceed net investment income, as 
31.1 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
31.2 	amounts deducted in computing federal adjusted gross income; and 
31.3 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
31.4 	subdivision 19b, clauses (6) and, (9) to (16), and (18). 
31.5 	In the case of an estate or trust, alternative minimum taxable income must be 
31.6 	computed as provided in section 59(c) of the Internal Revenue Code. 
31.7 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
31.8 	of the Internal Revenue Code. 
31.9 	(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
31.10 	income after subtracting the exemption amount determined under subdivision 3. 
31.11 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
31.12 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
31.13 	credits allowed under this chapter. 
31.14 	(e) "Net minimum tax" means the minimum tax imposed by this section. 

31.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
31.16 	December 31, 2008, and ending before January 1, 2013.

31.17 	Sec. 12. [290.094] SURTAX ON CERTAIN INTEREST INCOME.
31.18 		Subdivision 1.Definitions. (a) Unless the language or context clearly indicates that 
31.19 	a different meaning is intended, for the purposes of this section, the following terms 
31.20 	have the meanings given them.
31.21 	(b) "Annual percentage rate" has the meanings given the term in the Code of Federal 
31.22 	Regulations, title 12, parts 226.14 and 226.22, related to open-end and closed-end credit.
31.23 	(c) "Borrower" means a debtor under a loan or a purchaser of debt under a credit 
31.24 	sale contract.
31.25 	(d) "Cardholder" means a person to whom a credit card is issued or who has agreed 
31.26 	with the financial institution to pay obligations arising from the issuance to or use of the 
31.27 	card by another person.
31.28 	(e) "Consumer loan" means a loan made by a financial institution in which:
31.29 	(1) the debtor is a person other than an organization;
31.30 	(2) the debt is incurred primarily for a personal, family, or household purpose; and
31.31 	(3) the debt is payable in installments or a finance charge is made.
31.32 	(f) "Credit" means the right granted by a financial institution to a borrower to defer 
31.33 	payment of a debt, to incur debt and defer its payment, or to purchase property or services 
31.34 	and defer payment.
32.1 	(g) "Credit card" means a card or device issued under an arrangement pursuant to 
32.2 	which a financial institution gives to a cardholder the privilege of obtaining credit from 
32.3 	the financial institution or other person in purchasing or leasing property or services, 
32.4 	obtaining loans, or otherwise. A transaction is "pursuant to a credit card" only if credit is 
32.5 	obtained according to the terms of the arrangement by transmitting information contained 
32.6 	on the card or device orally, in writing, by mechanical or electronic methods, or in any 
32.7 	other manner. A transaction is not "pursuant to a credit card" if the card or device is 
32.8 	used solely in that transaction to:
32.9 	(1) identify the cardholder or evidence the cardholder's creditworthiness and credit is 
32.10 	not obtained according to the terms of the arrangement;
32.11 	(2) obtain a guarantee of payment from the cardholder's deposit account, whether or 
32.12 	not the payment results in a credit extension to the cardholder by the financial institution; or
32.13 	(3) effect an immediate transfer of funds from the cardholder's deposit account by 
32.14 	electronic or other means, whether or not the transfer results in a credit extension to 
32.15 	the cardholder by the financial institution.
32.16 	(h) "Credit sale contract" means a contract evidencing a credit sale. "Credit sale" 
32.17 	means a sale of goods or services, or an interest in land, in which:
32.18 	(1) credit is granted by a seller who regularly engages as a seller in credit transactions 
32.19 	of the same kind; and
32.20 	(2) the debt is payable in installments or a finance charge is made.
32.21 	(i) "Financial institution" means a state or federally chartered bank, a state or 
32.22 	federally chartered bank and trust, a trust company with banking powers, a state or 
32.23 	federally chartered savings association, an industrial loan and thrift company organized 
32.24 	under chapter 53, a regulated lender organized under chapter 56, or an operating subsidiary 
32.25 	of any such institution.
32.26 	(j) "Loan" means:
32.27 	(1) the creation of debt by the financial institution's payment of money to the 
32.28 	borrower or a third person for the account of the borrower;
32.29 	(2) the creation of debt pursuant to a credit card in any manner, including a cash 
32.30 	advance or the financial institution's honoring a draft or similar order for the payment of 
32.31 	money drawn or accepted by the borrower, paying or agreeing to pay the borrower's 
32.32 	obligation, or purchasing or otherwise acquiring the borrower's obligation from the 
32.33 	obligee or the borrower's assignee;
32.34 	(3) the creation of debt by a cash advance to a borrower pursuant to an overdraft 
32.35 	line of credit arrangement;
33.1 	(4) the creation of debt by a credit to an account with the financial institution upon 
33.2 	which the borrower is entitled to draw immediately;
33.3 	(5) the forbearance of debt arising from a loan; and
33.4 	(6) the creation of debt pursuant to open-end credit.
33.5 	"Loan" does not include the forbearance of debt arising from a sale or lease, a credit 
33.6 	sale contract, or an overdraft from a person's deposit account with a financial institution 
33.7 	which is not pursuant to a written agreement to pay overdrafts with the right to defer 
33.8 	repayment thereof.
33.9 	(k) "Organization" means a corporation, government, government subdivision or 
33.10 	agency, trust, estate, partnership, joint venture, cooperative, limited liability company, 
33.11 	limited liability partnership, or association.
33.12 	(l) "Person" means a natural person or an organization.
33.13 	(m) "Principal" means the total of:
33.14 	(1) the amount paid to, received by, or paid or repayable for the account of, the 
33.15 	borrower; and
33.16 	(2) to the extent that payment is deferred:
33.17 	(i) the amount actually paid or to be paid by the financial institution for additional 
33.18 	charges permitted under this section; and
33.19 	(ii) prepaid finance charges.
33.20 		Subd. 2.Scope. (a) Any person or organization conducting a trade or business in 
33.21 	this state who is subject to the Truth in Lending requirements under Code of Regulations, 
33.22 	title 12, part 226 (Federal Regulation Z), and who charges interest on the credit issued 
33.23 	shall be subject to a surtax on each transaction as prescribed by this chapter. Transactions 
33.24 	include any open-end and closed-end credit transactions subject to Federal Regulation Z 
33.25 	such as loans, consumer loans, credit sale contracts, extensions of credit, and credit issued 
33.26 	pursuant to a credit card. A transferee or assignee of a transaction subject to the surtax 
33.27 	under this section, is also subject to the tax under this section.
33.28 	(b) The tax shall be determined for each transaction subject to the requirements of 
33.29 	this section that occurs during the calendar year.
33.30 		Subd. 3.Surtax rate. The surtax shall be imposed at the rate of 30 percent on any 
33.31 	income attributable to interest collected from the portion of an annual percentage rate that 
33.32 	exceeds 15 percent on transactions subject to Code of Regulations, title 12, part 226 
33.33 	(Federal Regulation Z).
33.34 		Subd. 4.Collection and administration. The tax imposed by this section shall 
33.35 	be paid annually to the commissioner of revenue and is subject to the same collection, 
33.36 	enforcement, and penalty provisions as other taxes imposed by this chapter.

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

34.3 	Sec. 13. Minnesota Statutes 2008, section 290.17, subdivision 2, is amended to read:
34.4 		Subd. 2. Income not derived from conduct of a trade or business. The income of 
34.5 	a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 
34.6 	business must be assigned in accordance with paragraphs (a) to (f): 
34.7 	(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in 
34.8 	section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, and to the 
34.9 	extent that, the work of the employee is performed within it; all other income from such 
34.10 	sources is treated as income from sources without this state. 
34.11 	Severance pay shall be considered income from labor or personal or professional 
34.12 	services. 
34.13 	(2) In the case of an individual who is a nonresident of Minnesota and who is an 
34.14 	athlete or entertainer, income from compensation for labor or personal services performed 
34.15 	within this state shall be determined in the following manner: 
34.16 	(i) The amount of income to be assigned to Minnesota for an individual who is a 
34.17 	nonresident salaried athletic team employee shall be determined by using a fraction in 
34.18 	which the denominator contains the total number of days in which the individual is under 
34.19 	a duty to perform for the employer, and the numerator is the total number of those days 
34.20 	spent in Minnesota. For purposes of this paragraph, off-season training activities, unless 
34.21 	conducted at the team's facilities as part of a team imposed program, are not included in 
34.22 	the total number of duty days. Bonuses earned as a result of play during the regular season 
34.23 	or for participation in championship, play-off, or all-star games must be allocated under 
34.24 	the formula. Signing bonuses are not subject to allocation under the formula if they are 
34.25 	not conditional on playing any games for the team, are payable separately from any other 
34.26 	compensation, and are nonrefundable; and 
34.27 	(ii) The amount of income to be assigned to Minnesota for an individual who is a 
34.28 	nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's 
34.29 	athletic or entertainment performance in Minnesota shall be determined by assigning to 
34.30 	this state all income from performances or athletic contests in this state. 
34.31 	(3) For purposes of this section, amounts received by a nonresident as "retirement 
34.32 	income" as defined in section (b)(1) of the State Income Taxation of Pension Income 
34.33 	Act, Public Law 104-95, are not considered income derived from carrying on a trade 
34.34 	or business or from wages or other compensation for work an employee performed in 
34.35 	Minnesota, and are not taxable under this chapter. 
35.1 	(b) Income or gains from tangible property located in this state that is not employed 
35.2 	in the business of the recipient of the income or gains must be assigned to this state. 
35.3 	(c) Income or gains from intangible personal property not employed in the business 
35.4 	of the recipient of the income or gains must be assigned to this state if the recipient of the 
35.5 	income or gains is a resident of this state or is a resident trust or estate. 
35.6 	Gain on the sale of a partnership interest is allocable to this state in the ratio of the 
35.7 	original cost of partnership tangible property in this state to the original cost of partnership 
35.8 	tangible property everywhere, determined at the time of the sale. If more than 50 percent 
35.9 	of the value of the partnership's assets consists of intangibles, gain or loss from the sale 
35.10 	of the partnership interest is allocated to this state in accordance with the sales factor of 
35.11 	the partnership for its first full tax period immediately preceding the tax period of the 
35.12 	partnership during which the partnership interest was sold. 
35.13 	Gain on the sale of an interest in a single member limited liability company that 
35.14 	is disregarded for federal income tax purposes is allocable to this state as if the single 
35.15 	member limited liability company did not exist and the assets of the limited liability 
35.16 	company are personally owned by the sole member.
35.17 	Gain on the sale of goodwill or income from a covenant not to compete that is 
35.18 	connected with a business operating all or partially in Minnesota is allocated to this state 
35.19 	to the extent that the income from the business in the year preceding the year of sale was 
35.20 	assignable to Minnesota under subdivision 3. 
35.21 	When an employer pays an employee for a covenant not to compete, the income 
35.22 	allocated to this state is in the ratio of the employee's service in Minnesota in the calendar 
35.23 	year preceding leaving the employment of the employer over the total services performed 
35.24 	by the employee for the employer in that year. 
35.25 	(d) Income from winnings on a bet made by an individual while in Minnesota is 
35.26 	assigned to this state. In this paragraph, "bet" has the meaning given in section 609.75, 
35.27 	subdivision 2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3). 
35.28 	(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 
35.29 	taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile. 
35.30 	(f) For the purposes of this section, working as an employee shall not be considered 
35.31 	to be conducting a trade or business. 

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

35.33 	Sec. 14. Minnesota Statutes 2008, section 290.191, subdivision 2, is amended to read:
35.34 		Subd. 2.Apportionment formula of general application. (a) Except for those 
35.35 	trades or businesses required to use a different formula under subdivision 3 or section 
36.1 	290.36, and for those trades or businesses that receive permission to use some other 
36.2 	method under section 290.20 or under subdivision 4, a trade or business required to 
36.3 	apportion its net income must apportion its income to this state on the basis of the 
36.4 	percentage obtained by taking the sum of:
36.5 	(1) the percent for the sales factor under paragraph (b) of the percentage which 
36.6 	the sales made within this state in connection with the trade or business during the tax 
36.7 	period are of the total sales wherever made in connection with the trade or business during 
36.8 	the tax period;
36.9 	(2) the percent for the property factor under paragraph (b) of the percentage which 
36.10 	the total tangible property used by the taxpayer in this state in connection with the trade or 
36.11 	business during the tax period is of the total tangible property, wherever located, used by 
36.12 	the taxpayer in connection with the trade or business during the tax period; and
36.13 	(3) the percent for the payroll factor under paragraph (b) of the percentage which 
36.14 	the taxpayer's total payrolls paid or incurred in this state or paid in respect to labor 
36.15 	performed in this state in connection with the trade or business during the tax period are 
36.16 	of the taxpayer's total payrolls paid or incurred in connection with the trade or business 
36.17 	during the tax period.
36.18 	(b) For purposes of paragraph (a) and subdivision 3, the following percentages apply 
36.19 	for the taxable years specified beginning during calendar year 2009:

36.20
36.21	Taxable years beginning 
during calendar year
		Sales factor 
percent
		Property factor 
percent
		Payroll factor
percent
	
36.22	2007
			78
			11
		11
	
36.23	2008
			81
			9.5
		9.5
	
36.24	2009
			84
			8
		8
	
36.25	2010
			87
			6.5
		6.5
	
36.26	2011
			90
			5
		5
	
36.27	2012
			93
			3.5
		3.5
	
36.28	2013
			96
			2
		2
	
36.29	2014 and later calendar years 
	100
			0
		0
	
36.30 	(1) sales factor is 81 percent;
36.31 	(2) property factor is 9.5 percent; and
36.32 	(3) payroll factor is 9.5 percent.

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

36.35 	Sec. 15. [297I.23] MINNESOTA BUSINESS INVESTMENT COMPANY 
36.36 	CREDIT.
37.1 	(a) A participating investor as defined under section 116J.665, subdivision 1, 
37.2 	is allowed a credit against the tax imposed in this chapter equal to 80 percent of the 
37.3 	participating investor's investment of designated capital in a Minnesota business 
37.4 	investment company. Beginning January 1, 2014, a participating investor may claim 
37.5 	the credit as follows:
37.6 	(1) in tax year 2014, an amount equal to 16 percent of the participating investor's 
37.7 	investment of designated capital;
37.8 	(2) in tax year 2015, an amount equal to 16 percent of the participating investor's 
37.9 	investment of designated capital;
37.10 	(3) in tax year 2016, an amount equal to 16 percent of the participating investor's 
37.11 	investment of designated capital; 
37.12 	(4) in tax year 2017, an amount equal to 16 percent of the participating investor's 
37.13 	investment of designated capital; and
37.14 	(5) in tax year 2018, an amount equal to 16 percent of the participating investor's 
37.15 	investment of designated capital.
37.16 	(b) The credit for any taxable year must not exceed the liability for tax under 
37.17 	this chapter for the year. If the amount of the credit determined under this section for 
37.18 	any taxable year exceeds the liability for tax under this chapter, the excess shall be an 
37.19 	investment tax credit carryover to future taxable years without limitation. Credits may be 
37.20 	used in connection with both final payments and prepayments of a participating investor's 
37.21 	state premium tax liability.
37.22 	(c) A participating investor claiming a credit under this section is not required to pay 
37.23 	any additional retaliatory tax levied as a result of claiming the credit.
37.24 	(d) If the taxes paid by a participating investor with respect to its state premium 
37.25 	tax liability constitute a credit against any other tax that is imposed by this state, the 
37.26 	participating investor's credit against the other tax shall not be reduced by virtue of the 
37.27 	reduction in the participating investor's tax liability based on the tax credit allowed 
37.28 	under this section.
37.29 	(e) Final decertification of Minnesota business investment company under section 
37.30 	116J.665 may result in the disallowance and the recapture of the credit allowed under this 
37.31 	section. The amount to be disallowed and recaptured must be assessed as follows:
37.32 	(1) decertification of a Minnesota business investment company within two years of 
37.33 	its allocation date and prior to meeting the requirements of section 116J.665, subdivision 
37.34 	5, paragraph (a), clause (1), shall result in the disallowance of all of the credits allowed 
37.35 	under this section; and
38.1 	(2) decertification of Minnesota business investment company that has already met 
38.2 	the requirements of section 116J.665, subdivision 5, paragraph (a), clause (1), shall not 
38.3 	cause the disallowance of any credits allowed under this section nor the recapture of any 
38.4 	portion of the credits that was previously taken.
38.5 	(f) A participating investor must not transfer, agree to transfer, sell, or agree to 
38.6 	sell the credit under this section until 180 days from the date on which the participating 
38.7 	investor invested designated capital. After 180 days from the date of investment, a 
38.8 	participating investor, or subsequent transferee, may transfer credits based upon rules 
38.9 	adopted by the commissioner to facilitate the transfers. Any transfer or sale of the credits 
38.10 	does not affect the time schedule for claiming the credit. Any tax credits recaptured 
38.11 	under this section remain the liability of the participating investor that applied the credit 
38.12 	towards its tax liability.

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

38.15 	Sec. 16.  REPEALER.
 38.16 	Minnesota Statutes 2008, sections 290.06, subdivision 34; and 297A.815, 
38.17 	subdivision 3, are repealed.

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

38.19 	ARTICLE 2
38.20 	FEDERAL UPDATE

38.21 	Section 1. Minnesota Statutes 2008, section 289A.02, subdivision 7, as amended by 
38.22 	Laws 2009, chapter 12, article 1, section 1, is amended to read:
38.23 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
38.24 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
38.25 	31, 2008 March 31, 2009.

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

38.29 	Sec. 2. Minnesota Statutes 2008, section 290.01, subdivision 19, as amended by Laws 
38.30 	2009, chapter 12, article 1, section 2, is amended to read:
39.1 		Subd. 19. Net income. The term "net income" means the federal taxable income, 
39.2 	as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 
39.3 	date named in this subdivision, incorporating the federal effective dates of changes to the 
39.4 	Internal Revenue Code and any elections made by the taxpayer in accordance with the 
39.5 	Internal Revenue Code in determining federal taxable income for federal income tax 
39.6 	purposes, and with the modifications provided in subdivisions 19a to 19f. 
39.7 	In the case of a regulated investment company or a fund thereof, as defined in section 
39.8 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
39.9 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
39.10 	except that: 
39.11 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
39.12 	Revenue Code does not apply; 
39.13 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 
39.14 	Revenue Code must be applied by allowing a deduction for capital gain dividends and 
39.15 	exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 
39.16 	Revenue Code; and 
39.17 	(3) the deduction for dividends paid must also be applied in the amount of any 
39.18 	undistributed capital gains which the regulated investment company elects to have treated 
39.19 	as provided in section 852(b)(3)(D) of the Internal Revenue Code. 
39.20 	The net income of a real estate investment trust as defined and limited by section 
39.21 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
39.22 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code. 
39.23 	The net income of a designated settlement fund as defined in section 468B(d) of 
39.24 	the Internal Revenue Code means the gross income as defined in section 468B(b) of the 
39.25 	Internal Revenue Code. 
39.26 	The Internal Revenue Code of 1986, as amended through December 31, 2008 March 
39.27 	31, 2009, shall be in effect for taxable years beginning after December 31, 1996. 
39.28 	Except as otherwise provided, references to the Internal Revenue Code in 
39.29 	subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 
39.30 	the applicable year. 

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

39.33 	Sec. 3. Minnesota Statutes 2008, section 290.01, subdivision 19a, as amended by Laws 
39.34 	2009, chapter 12, article 1, section 3, is amended to read:
40.1 		Subd. 19a. Additions to federal taxable income. For individuals, estates, and 
40.2 	trusts, there shall be added to federal taxable income: 
40.3 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
40.4 	or governmental subdivision, municipality, or governmental agency or instrumentality 
40.5 	of any state other than Minnesota exempt from federal income taxes under the Internal 
40.6 	Revenue Code or any other federal statute; and 
40.7 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
40.8 	Code, except the portion of the exempt-interest dividends derived from interest income 
40.9 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
40.10 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
40.11 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
40.12 	95 percent or more of the exempt-interest dividends that are paid by the regulated 
40.13 	investment company as defined in section 851(a) of the Internal Revenue Code, or the 
40.14 	fund of the regulated investment company as defined in section 851(g) of the Internal 
40.15 	Revenue Code, making the payment; and 
40.16 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
40.17 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
40.18 	interest income on obligations of the state in which the tribe is located; 
40.19 	(2) the amount of income or, sales and use, motor vehicle sales, or excise taxes paid 
40.20 	or accrued within the taxable year under this chapter and the amount of taxes based on 
40.21 	net income paid or, sales and use, motor vehicle sales, or excise taxes paid to any other 
40.22 	state or to any province or territory of Canada, to the extent allowed as a deduction under 
40.23 	section 63(d) of the Internal Revenue Code, but the addition may not be more than the 
40.24 	amount by which the itemized deductions as allowed under section 63(d) of the Internal 
40.25 	Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) 
40.26 	of the Internal Revenue Code, disregarding the amount amounts allowed under section
40.27 	sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of 
40.28 	this paragraph, the disallowance of itemized deductions under section 68 of the Internal 
40.29 	Revenue Code of 1986, income or, sales and use tax is, motor vehicle sales, or excise 
40.30 	taxes are the last itemized deduction deductions disallowed; 
40.31 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
40.32 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies; 
40.33 	(4) the amount of income taxes paid or accrued within the taxable year under this 
40.34 	chapter and taxes based on net income paid to any other state or any province or territory 
40.35 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
41.1 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
41.2 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
41.3 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
41.4 	other than expenses or interest used in computing net interest income for the subtraction 
41.5 	allowed under subdivision 19b, clause (1); 
41.6 	(6) the amount of a partner's pro rata share of net income which does not flow 
41.7 	through to the partner because the partnership elected to pay the tax on the income under 
41.8 	section 6242(a)(2) of the Internal Revenue Code; 
41.9 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
41.10 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
41.11 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
41.12 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
41.13 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
41.14 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
41.15 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
41.16 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
41.17 	under section 168(k) is allowed; 
41.18 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
41.19 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
41.20 	Revenue Code of 1986, as amended through December 31, 2003; 
41.21 	(9) to the extent deducted in computing federal taxable income, the amount of the 
41.22 	deduction allowable under section 199 of the Internal Revenue Code; 
41.23 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
41.24 	federal subsidies for prescription drug plans; 
41.25 	(11) the amount of expenses disallowed under section 290.10, subdivision 2;
41.26 	(12) the amount deducted for qualified tuition and related expenses under section 
41.27 	222 of the Internal Revenue Code, to the extent deducted from gross income; 
41.28 	(13) the amount deducted for certain expenses of elementary and secondary school 
41.29 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
41.30 	from gross income; and
41.31 	(14) the additional standard deduction for property taxes payable that is allowable 
41.32 	under section 63(c)(1)(C) of the Internal Revenue Code;
41.33 	(15) the additional standard deduction for qualified motor vehicle sales taxes 
41.34 	allowable under section 63(c)(1)(E) of the Internal Revenue Code; and
41.35 	(16) discharge of indebtedness income resulting from reacquisition of business 
41.36 	indebtedness and deferred under section 108(i) of the Internal Revenue Code.

42.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
42.2 	December 31, 2008, except that clause (16) is effective for taxable years ending after 
42.3 	December 31, 2008.

42.4 	Sec. 4. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:
42.5 		Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 
42.6 	and trusts, there shall be subtracted from federal taxable income: 
42.7 	(1) net interest income on obligations of any authority, commission, or 
42.8 	instrumentality of the United States to the extent includable in taxable income for federal 
42.9 	income tax purposes but exempt from state income tax under the laws of the United States; 
42.10 	(2) if included in federal taxable income, the amount of any overpayment of income 
42.11 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
42.12 	is received as a refund or as a credit to another taxable year's income tax liability; 
42.13 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
42.14 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
42.15 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
42.16 	transportation of each qualifying child in attending an elementary or secondary school 
42.17 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
42.18 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
42.19 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
42.20 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
42.21 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
42.22 	"textbooks" includes books and other instructional materials and equipment purchased 
42.23 	or leased for use in elementary and secondary schools in teaching only those subjects 
42.24 	legally and commonly taught in public elementary and secondary schools in this state. 
42.25 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
42.26 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
42.27 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
42.28 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
42.29 	or materials for, or transportation to, extracurricular activities including sporting events, 
42.30 	musical or dramatic events, speech activities, driver's education, or similar programs. For 
42.31 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
42.32 	given in section 32(c)(3) of the Internal Revenue Code; 
42.33 	(4) income as provided under section 290.0802; 
42.34 	(5) to the extent included in federal adjusted gross income, income realized on 
42.35 	disposition of property exempt from tax under section 290.491; 
43.1 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
43.2 	of the Internal Revenue Code in determining federal taxable income by an individual 
43.3 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
43.4 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
43.5 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
43.6 	under the provisions of Public Law 109-1; 
43.7 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
43.8 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
43.9 	which is included in gross income under section 87 of the Internal Revenue Code; 
43.10 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
43.11 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
43.12 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
43.13 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
43.14 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
43.15 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
43.16 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
43.17 	the extent they exceed the federal foreign tax credit; 
43.18 	(9) in each of the five tax years immediately following the tax year in which an 
43.19 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
43.20 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
43.21 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
43.22 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
43.23 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
43.24 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
43.25 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
43.26 	less than zero; 
43.27 	(10) job opportunity building zone income as provided under section 469.316; 
43.28 	(11) to the extent included in federal taxable income, the amount of compensation 
43.29 	paid to members of the Minnesota National Guard or other reserve components of the 
43.30 	United States military for active service performed in Minnesota, excluding compensation 
43.31 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
43.32 	this clause, "active service" means (i) state active service as defined in section 190.05, 
43.33 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
43.34 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
43.35 	subdivision 5c, but "active service" excludes service performed in accordance with section 
43.36 	190.08, subdivision 3; 
44.1 	(12) to the extent included in federal taxable income, the amount of compensation 
44.2 	paid to Minnesota residents who are members of the armed forces of the United States or 
44.3 	United Nations for active duty performed outside Minnesota under United States Code, 
44.4 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
44.5 	the United Nations; 
44.6 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
44.7 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
44.8 	to another person for human organ transplantation. For purposes of this clause, "organ" 
44.9 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
44.10 	"human organ transplantation" means the medical procedure by which transfer of a human 
44.11 	organ is made from the body of one person to the body of another person; "qualified 
44.12 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
44.13 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
44.14 	may be subtracted under this clause only once; and "qualified donor" means the individual 
44.15 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
44.16 	individual may claim the subtraction in this clause for each instance of organ donation for 
44.17 	transplantation during the taxable year in which the qualified expenses occur; 
44.18 	(14) in each of the five tax years immediately following the tax year in which an 
44.19 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
44.20 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
44.21 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
44.22 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
44.23 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
44.24 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
44.25 	subtraction is not allowed under this clause; 
44.26 	(15) to the extent included in federal taxable income, compensation paid to a service 
44.27 	member as defined in United States Code, title 10, section 101(a)(5), for military service 
44.28 	as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2); 
44.29 	(16) international economic development zone income as provided under section 
44.30 	469.325; and
44.31 	(17) to the extent included in federal taxable income, the amount of national service 
44.32 	educational awards received from the National Service Trust under United States Code, 
44.33 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
44.34 	program; and
44.35 	(18) to the extent included in federal taxable income, discharge of indebtedness 
44.36 	income resulting from reacquisition of business indebtedness included in federal taxable 
45.1 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
45.2 	to the extent that the income was included in net income in a prior year as a result of the 
45.3 	addition under section 290.01, subdivision 19a, clause (16). 

45.4 	EFFECTIVE DATE. This section is effective for taxable years ending after 
45.5 	December 31, 2008.

45.6 	Sec. 5. Minnesota Statutes 2008, section 290.01, subdivision 19c, as amended by Laws 
45.7 	2009, chapter 12, article 1, section 4, is amended to read:
45.8 		Subd. 19c. Corporations; additions to federal taxable income. For corporations, 
45.9 	there shall be added to federal taxable income: 
45.10 	(1) the amount of any deduction taken for federal income tax purposes for income, 
45.11 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
45.12 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
45.13 	another state, a political subdivision of another state, the District of Columbia, or any 
45.14 	foreign country or possession of the United States; 
45.15 	(2) interest not subject to federal tax upon obligations of: the United States, its 
45.16 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
45.17 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
45.18 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
45.19 	tribal governments; 
45.20 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
45.21 	Revenue Code; 
45.22 	(4) the amount of any net operating loss deduction taken for federal income tax 
45.23 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
45.24 	deduction under section 810 of the Internal Revenue Code; 
45.25 	(5) the amount of any special deductions taken for federal income tax purposes 
45.26 	under sections 241 to 247 and 965 of the Internal Revenue Code; 
45.27 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
45.28 	clause (a), that are not subject to Minnesota income tax; 
45.29 	(7) the amount of any capital losses deducted for federal income tax purposes under 
45.30 	sections 1211 and 1212 of the Internal Revenue Code; 
45.31 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
45.32 	921(a) and 291 of the Internal Revenue Code; 
45.33 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
45.34 	291 of the Internal Revenue Code; 
46.1 	(10) for certified pollution control facilities placed in service in a taxable year 
46.2 	beginning before December 31, 1986, and for which amortization deductions were elected 
46.3 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
46.4 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
46.5 	income for those facilities; 
46.6 	(11) the amount of any deemed dividend from a foreign operating corporation 
46.7 	determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 
46.8 	shall be reduced by the amount of the addition to income required by clauses (20), (21), 
46.9 	(22), and (23); 
46.10 	(12) the amount of a partner's pro rata share of net income which does not flow 
46.11 	through to the partner because the partnership elected to pay the tax on the income under 
46.12 	section 6242(a)(2) of the Internal Revenue Code; 
46.13 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
46.14 	Code; 
46.15 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
46.16 	Revenue Code, for the taxable year when subpart F income is calculated without regard to 
46.17 	the provisions of Division C, title III, section 304(a)(1)-(2) of Public Law 110-343; 
46.18 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
46.19 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
46.20 	has an activity that in the taxable year generates a deduction for depreciation under 
46.21 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
46.22 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
46.23 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
46.24 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
46.25 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
46.26 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
46.27 	under section 168(k)(1)(A) and (k)(4)(A) is allowed; 
46.28 	(16) 80 percent of the amount by which the deduction allowed by section 179 of the 
46.29 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
46.30 	Revenue Code of 1986, as amended through December 31, 2003; 
46.31 	(17) to the extent deducted in computing federal taxable income, the amount of the 
46.32 	deduction allowable under section 199 of the Internal Revenue Code; 
46.33 	(18) the exclusion allowed under section 139A of the Internal Revenue Code for 
46.34 	federal subsidies for prescription drug plans; 
46.35 	(19) the amount of expenses disallowed under section 290.10, subdivision 2;
47.1 	(20) an amount equal to the interest and intangible expenses, losses, and costs paid, 
47.2 	accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 
47.3 	of a corporation that is a member of the taxpayer's unitary business group that qualifies 
47.4 	as a foreign operating corporation. For purposes of this clause, intangible expenses and 
47.5 	costs include:
47.6 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
47.7 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
47.8 	intangible property;
47.9 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
47.10 	transactions;
47.11 	(iii) royalty, patent, technical, and copyright fees;
47.12 	(iv) licensing fees; and
47.13 	(v) other similar expenses and costs. 
47.14 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
47.15 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
47.16 	secrets, and similar types of intangible assets.
47.17 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
47.18 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
47.19 	to such item of income to the extent that the income to the foreign operating corporation 
47.20 	is income from sources without the United States as defined in subtitle A, chapter 1, 
47.21 	subchapter N, part 1, of the Internal Revenue Code;
47.22 	(21) except as already included in the taxpayer's taxable income pursuant to clause 
47.23 	(20), any interest income and income generated from intangible property received or 
47.24 	accrued by a foreign operating corporation that is a member of the taxpayer's unitary 
47.25 	group. For purposes of this clause, income generated from intangible property includes:
47.26 	(i) income related to the direct or indirect acquisition, use, maintenance or 
47.27 	management, ownership, sale, exchange, or any other disposition of intangible property;
47.28 	(ii) income from factoring transactions or discounting transactions;
47.29 	(iii) royalty, patent, technical, and copyright fees;
47.30 	(iv) licensing fees; and
47.31 	(v) other similar income.
47.32 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
47.33 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
47.34 	secrets, and similar types of intangible assets. 
48.1 	This clause does not apply to any item of interest or intangible income received or accrued 
48.2 	by a foreign operating corporation with respect to such item of income to the extent that 
48.3 	the income is income from sources without the United States as defined in subtitle A, 
48.4 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
48.5 	(22) the dividends attributable to the income of a foreign operating corporation that 
48.6 	is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
48.7 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
48.8 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
48.9 	foreign operating corporation; 
48.10 	(23) the income of a foreign operating corporation that is a member of the taxpayer's 
48.11 	unitary group in an amount that is equal to gains derived from the sale of real or personal 
48.12 	property located in the United States; and
48.13 	(24) the additional amount allowed as a deduction for donation of computer 
48.14 	technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the 
48.15 	extent deducted from taxable income; and
48.16 	(25) discharge of indebtedness income resulting from reacquisition of business 
48.17 	indebtedness and deferred under section 108(i) of the Internal Revenue Code. 

48.18 	EFFECTIVE DATE. This section is effective for taxable years ending after 
48.19 	December 31, 2008.

48.20 	Sec. 6. Minnesota Statutes 2008, section 290.01, subdivision 19d, as amended by Laws 
48.21 	2009, chapter 12, article 1, section 5, is amended to read:
48.22 		Subd. 19d. Corporations; modifications decreasing federal taxable income. For 
48.23 	corporations, there shall be subtracted from federal taxable income after the increases 
48.24 	provided in subdivision 19c: 
48.25 	(1) the amount of foreign dividend gross-up added to gross income for federal 
48.26 	income tax purposes under section 78 of the Internal Revenue Code; 
48.27 	(2) the amount of salary expense not allowed for federal income tax purposes due to 
48.28 	claiming the work opportunity credit under section 51 of the Internal Revenue Code; 
48.29 	(3) any dividend (not including any distribution in liquidation) paid within the 
48.30 	taxable year by a national or state bank to the United States, or to any instrumentality of 
48.31 	the United States exempt from federal income taxes, on the preferred stock of the bank 
48.32 	owned by the United States or the instrumentality; 
48.33 	(4) amounts disallowed for intangible drilling costs due to differences between 
48.34 	this chapter and the Internal Revenue Code in taxable years beginning before January 
48.35 	1, 1987, as follows: 
49.1 	(i) to the extent the disallowed costs are represented by physical property, an amount 
49.2 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
49.3 	subdivision 7, subject to the modifications contained in subdivision 19e; and 
49.4 	(ii) to the extent the disallowed costs are not represented by physical property, an 
49.5 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
49.6 	290.09, subdivision 8; 
49.7 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
49.8 	Internal Revenue Code, except that: 
49.9 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
49.10 	capital loss carrybacks shall not be allowed; 
49.11 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
49.12 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
49.13 	allowed; 
49.14 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
49.15 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
49.16 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and 
49.17 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
49.18 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
49.19 	extent such loss was not used in a prior taxable year and subject to the provisions of 
49.20 	Minnesota Statutes 1986, section 290.16, shall be allowed; 
49.21 	(6) an amount for interest and expenses relating to income not taxable for federal 
49.22 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
49.23 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
49.24 	291 of the Internal Revenue Code in computing federal taxable income; 
49.25 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
49.26 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a 
49.27 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
49.28 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
49.29 	by the commissioner. In the case of property held in trust, the allowable deduction must 
49.30 	be apportioned between the income beneficiaries and the trustee in accordance with the 
49.31 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
49.32 	of the trust's income allocable to each; 
49.33 	(8) for certified pollution control facilities placed in service in a taxable year 
49.34 	beginning before December 31, 1986, and for which amortization deductions were elected 
49.35 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
50.1 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
50.2 	1986, section 290.09, subdivision 7; 
50.3 	(9) amounts included in federal taxable income that are due to refunds of income, 
50.4 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
50.5 	corporation to Minnesota, another state, a political subdivision of another state, the 
50.6 	District of Columbia, or a foreign country or possession of the United States to the extent 
50.7 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
50.8 	clause (1), in a prior taxable year; 
50.9 	(10) 80 percent of royalties, fees, or other like income accrued or received from a 
50.10 	foreign operating corporation or a foreign corporation which is part of the same unitary 
50.11 	business as the receiving corporation, unless the income resulting from such payments or 
50.12 	accruals is income from sources within the United States as defined in subtitle A, chapter 
50.13 	1, subchapter N, part 1, of the Internal Revenue Code; 
50.14 	(11) income or gains from the business of mining as defined in section 290.05, 
50.15 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax; 
50.16 	(12) the amount of disability access expenditures in the taxable year which are not 
50.17 	allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code; 
50.18 	(13) the amount of qualified research expenses not allowed for federal income tax 
50.19 	purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 
50.20 	the amount exceeds the amount of the credit allowed under section 290.068; 
50.21 	(14) the amount of salary expenses not allowed for federal income tax purposes due 
50.22 	to claiming the Indian employment credit under section 45A(a) of the Internal Revenue 
50.23 	Code; 
50.24 	(15) for taxable years beginning before January 1, 2008, the amount of the federal 
50.25 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
50.26 	which is included in gross income under section 87 of the Internal Revenue Code; 
50.27 	(16) for a corporation whose foreign sales corporation, as defined in section 922 
50.28 	of the Internal Revenue Code, constituted a foreign operating corporation during any 
50.29 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
50.30 	claiming the deduction under section 290.21, subdivision 4, for income received from 
50.31 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
50.32 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
50.33 	not income of a foreign operating company; 
50.34 	(17) any decrease in subpart F income, as defined in section 952(a) of the Internal 
50.35 	Revenue Code, for the taxable year when subpart F income is calculated without regard to 
50.36 	the provisions of Division C, title III, section 304(a)(1)-(2) of Public Law 110-343; 
51.1 	(18) in each of the five tax years immediately following the tax year in which an 
51.2 	addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of 
51.3 	the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 
51.4 	amount of the addition made by the taxpayer under subdivision 19c, clause (15). The 
51.5 	resulting delayed depreciation cannot be less than zero; and
51.6 	(19) in each of the five tax years immediately following the tax year in which an 
51.7 	addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of 
51.8 	the amount of the addition; and
51.9 	(20) to the extent included in federal taxable income, discharge of indebtedness 
51.10 	income resulting from reacquisition of business indebtedness included in federal taxable 
51.11 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
51.12 	to the extent that the income was included in net income in a prior year as a result of the 
51.13 	addition under section 290.01, subdivision 19c, clause (25). 

51.14 	EFFECTIVE DATE. This section is effective for taxable years ending after 
51.15 	December 31, 2008.

51.16 	Sec. 7. Minnesota Statutes 2008, section 290.01, subdivision 31, as amended by Laws 
51.17 	2009, chapter 12, article 1, section 7, is amended to read:
51.18 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
51.19 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
51.20 	31, 2008 March 31, 2009. Internal Revenue Code also includes any uncodified provision 
51.21 	in federal law that relates to provisions of the Internal Revenue Code that are incorporated 
51.22 	into Minnesota law.

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

51.26 	Sec. 8. Minnesota Statutes 2008, section 290.06, subdivision 2c, is amended to read:
51.27 		Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income 
51.28 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
51.29 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
51.30 	applying to their taxable net income the following schedule of rates: 
51.31 	(1) On the first $25,680, 5.35 percent; 
51.32 	(2) On all over $25,680, but not over $102,030, 7.05 percent; 
51.33 	(3) On all over $102,030, 7.85 percent. 
52.1 	Married individuals filing separate returns, estates, and trusts must compute their 
52.2 	income tax by applying the above rates to their taxable income, except that the income 
52.3 	brackets will be one-half of the above amounts. 
52.4 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
52.5 	computed by applying to taxable net income the following schedule of rates: 
52.6 	(1) On the first $17,570, 5.35 percent; 
52.7 	(2) On all over $17,570, but not over $57,710, 7.05 percent; 
52.8 	(3) On all over $57,710, 7.85 percent. 
52.9 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
52.10 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
52.11 	computed by applying to taxable net income the following schedule of rates: 
52.12 	(1) On the first $21,630, 5.35 percent; 
52.13 	(2) On all over $21,630, but not over $86,910, 7.05 percent; 
52.14 	(3) On all over $86,910, 7.85 percent. 
52.15 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
52.16 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
52.17 	an amount determined by the commissioner must be computed in accordance with tables 
52.18 	prepared and issued by the commissioner of revenue based on income brackets of not 
52.19 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
52.20 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
52.21 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1. 
52.22 	(e) An individual who is not a Minnesota resident for the entire year must compute 
52.23 	the individual's Minnesota income tax as provided in this subdivision. After the 
52.24 	application of the nonrefundable credits provided in this chapter, the tax liability must 
52.25 	then be multiplied by a fraction in which: 
52.26 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
52.27 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
52.28 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), 
52.29 	and (13), and (16), and reduced by the Minnesota assignable portion of the subtraction 
52.30 	for United States government interest under section 290.01, subdivision 19b, clause (1), 
52.31 	and the subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), 
52.32 	and (16), and (18), after applying the allocation and assignability provisions of section 
52.33 	290.081, clause (a), or 290.17; and 
52.34 	(2) the denominator is the individual's federal adjusted gross income as defined in 
52.35 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
52.36 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and (13), and (16),
53.1 	and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), 
53.2 	(9), (10), (14), (15), and (16), and (18). 

53.3 	EFFECTIVE DATE. This section is effective for taxable years ending after 
53.4 	December 31, 2008.

53.5 	Sec. 9. Minnesota Statutes 2008, section 290.091, subdivision 2, is amended to read:
53.6 		Subd. 2. Definitions. For purposes of the tax imposed by this section, the following 
53.7 	terms have the meanings given: 
53.8 	(a) "Alternative minimum taxable income" means the sum of the following for 
53.9 	the taxable year: 
53.10 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
53.11 	55(b)(2) of the Internal Revenue Code; 
53.12 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
53.13 	minimum taxable income, but excluding: 
53.14 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
53.15 	Code;
53.16 	(ii) the medical expense deduction; 
53.17 	(iii) the casualty, theft, and disaster loss deduction; and 
53.18 	(iv) the impairment-related work expenses of a disabled person; 
53.19 	(3) for depletion allowances computed under section 613A(c) of the Internal 
53.20 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
53.21 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
53.22 	the excess of the deduction for depletion allowable under section 611 of the Internal 
53.23 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
53.24 	taxable year (determined without regard to the depletion deduction for the taxable year); 
53.25 	(4) to the extent not included in federal alternative minimum taxable income, the 
53.26 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
53.27 	Internal Revenue Code determined without regard to subparagraph (E); 
53.28 	(5) to the extent not included in federal alternative minimum taxable income, the 
53.29 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and 
53.30 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 
53.31 	to (9), (12), and (13), and (16); 
53.32 	less the sum of the amounts determined under the following: 
53.33 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1); 
53.34 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
53.35 	19b, clause (2), to the extent included in federal alternative minimum taxable income; 
54.1 	(3) the amount of investment interest paid or accrued within the taxable year on 
54.2 	indebtedness to the extent that the amount does not exceed net investment income, as 
54.3 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
54.4 	amounts deducted in computing federal adjusted gross income; and 
54.5 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
54.6 	subdivision 19b, clauses (6) and, (9) to (16), and (18). 
54.7 	In the case of an estate or trust, alternative minimum taxable income must be 
54.8 	computed as provided in section 59(c) of the Internal Revenue Code. 
54.9 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
54.10 	of the Internal Revenue Code. 
54.11 	(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
54.12 	income after subtracting the exemption amount determined under subdivision 3. 
54.13 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
54.14 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
54.15 	credits allowed under this chapter. 
54.16 	(e) "Net minimum tax" means the minimum tax imposed by this section. 

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

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

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

54.26 	Sec. 11. Minnesota Statutes 2008, section 291.005, subdivision 1, as amended by Laws 
54.27 	2009, chapter 12, article 1, section 11, is amended to read:
54.28 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following 
54.29 	terms used in this chapter shall have the following meanings:
54.30 	(1) "Federal gross estate" means the gross estate of a decedent as valued and 
54.31 	otherwise determined for federal estate tax purposes by federal taxing authorities pursuant 
54.32 	to the provisions of the Internal Revenue Code.
55.1 	(2) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
55.2 	excluding therefrom any property included therein which has its situs outside Minnesota, 
55.3 	and (b) including therein any property omitted from the federal gross estate which is 
55.4 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
55.5 	authorities.
55.6 	(3) "Personal representative" means the executor, administrator or other person 
55.7 	appointed by the court to administer and dispose of the property of the decedent. If there 
55.8 	is no executor, administrator or other person appointed, qualified, and acting within this 
55.9 	state, then any person in actual or constructive possession of any property having a situs in 
55.10 	this state which is included in the federal gross estate of the decedent shall be deemed 
55.11 	to be a personal representative to the extent of the property and the Minnesota estate tax 
55.12 	due with respect to the property.
55.13 	(4) "Resident decedent" means an individual whose domicile at the time of death 
55.14 	was in Minnesota.
55.15 	(5) "Nonresident decedent" means an individual whose domicile at the time of 
55.16 	death was not in Minnesota.
55.17 	(6) "Situs of property" means, with respect to real property, the state or country in 
55.18 	which it is located; with respect to tangible personal property, the state or country in which 
55.19 	it was normally kept or located at the time of the decedent's death; and with respect to 
55.20 	intangible personal property, the state or country in which the decedent was domiciled 
55.21 	at death.
55.22 	(7) "Commissioner" means the commissioner of revenue or any person to whom the 
55.23 	commissioner has delegated functions under this chapter.
55.24 	(8) "Internal Revenue Code" means the United States Internal Revenue Code of 
55.25 	1986, as amended through December 31, 2008 March 31, 2009.
55.26 	(9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
55.27 	defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of 
55.28 	deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.

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

56.1 	ARTICLE 3
56.2 	SALES AND EXCISE TAXES

56.3 	Section 1. Minnesota Statutes 2008, section 297A.64, subdivision 2, is amended to 
56.4 	read:
56.5 		Subd. 2. Fee imposed. (a) A fee equal to five percent of the sales price is imposed 
56.6 	on leases or rentals of vehicles subject to the tax under subdivision 1. The lessor on the 
56.7 	invoice to the customer may designate the fee as "a fee imposed by the State of Minnesota 
56.8 	for the registration of rental cars." 
56.9 	(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit 
56.10 	corporation or similar entity, consisting of individual or group members who pay the 
56.11 	organization for the use of a motor vehicle, if the organization:
56.12 	(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1 
56.13 	that are available to its members for use, priced on the basis of intervals of one hour or less;
56.14 	(2) parks its vehicles at unstaffed, self-service locations that are accessible at any 
56.15 	time of the day;
56.16 	(3) maintains its vehicles, insures its vehicles on behalf of its members, and 
56.17 	purchases fuel for its fleet; and
56.18 	(4) does not charge usage rates that decline on a per unit basis, whether specified 
56.19 	based on distance or time.

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

56.22 	Sec. 2. Minnesota Statutes 2008, section 297A.66, is amended by adding a subdivision 
56.23 	to read:
56.24 		Subd. 4a.Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a), 
56.25 	means a person, whether an independent contractor or other representative, who directly 
56.26 	or indirectly solicits business for the retailer.
56.27 	(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement 
56.28 	with a resident under which the resident, for a commission or other consideration, directly 
56.29 	or indirectly refers potential customers, whether by a link on an Internet Web site, or 
56.30 	otherwise, to the seller. This paragraph only applies if the total gross receipts from 
56.31 	sales to customers located in the state who were referred to the retailer by all residents 
56.32 	with this type of agreement with the retailer is at least $10,000 in the 12-month period 
56.33 	ending on the last day of the most recent calendar quarter before the calendar quarter in 
56.34 	which the sale is made.
57.1 	(c) The presumption under paragraph (b) may be rebutted by proof that the resident 
57.2 	with whom the seller has an agreement did not engage in any solicitation in the state 
57.3 	on behalf of the retailer that would satisfy the nexus requirement of the United States 
57.4 	Constitution during the 12-month period in question. Nothing in this section shall be 
57.5 	construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other 
57.6 	representative for purposes of subdivision 1, paragraph (a).
57.7 	(d) For purposes of this paragraph, "resident" includes an individual who is a 
57.8 	resident of this state, as defined in section 290.01, or a business that owns tangible 
57.9 	personal property located in this state or has one or more employees providing services 
57.10 	for it in this state.

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

57.13 	Sec. 3. Minnesota Statutes 2008, section 297A.68, subdivision 5, is amended to read:
57.14 		Subd. 5.Capital equipment. (a) Capital equipment is exempt. The tax must be 
57.15 	imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and 
57.16 	then refunded in the manner provided in section 297A.75.
57.17 	"Capital equipment" means machinery and equipment purchased or leased, and used 
57.18 	in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, 
57.19 	or refining tangible personal property to be sold ultimately at retail if the machinery and 
57.20 	equipment are essential to the integrated production process of manufacturing, fabricating, 
57.21 	mining, or refining. Capital equipment also includes machinery and equipment 
57.22 	used primarily to electronically transmit results retrieved by a customer of an online 
57.23 	computerized data retrieval system.
57.24 	(b) Capital equipment includes, but is not limited to:
57.25 	(1) machinery and equipment used to operate, control, or regulate the production 
57.26 	equipment;
57.27 	(2) machinery and equipment used for research and development, design, quality 
57.28 	control, and testing activities;
57.29 	(3) environmental control devices that are used to maintain conditions such as 
57.30 	temperature, humidity, light, or air pressure when those conditions are essential to and are 
57.31 	part of the production process;
57.32 	(4) materials and supplies used to construct and install machinery or equipment;
57.33 	(5) repair and replacement parts, including accessories, whether purchased as spare 
57.34 	parts, repair parts, or as upgrades or modifications to machinery or equipment;
57.35 	(6) materials used for foundations that support machinery or equipment;
58.1 	(7) materials used to construct and install special purpose buildings used in the 
58.2 	production process;
58.3 	(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed 
58.4 	as part of the delivery process regardless if mounted on a chassis, repair parts for 
58.5 	ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
58.6 	(9) machinery or equipment used for research, development, design, or production 
58.7 	of computer software.
58.8 	(c) Capital equipment does not include the following:
58.9 	(1) motor vehicles taxed under chapter 297B;
58.10 	(2) machinery or equipment used to receive or store raw materials;
58.11 	(3) building materials, except for materials included in paragraph (b), clauses (6) 
58.12 	and (7);
58.13 	(4) machinery or equipment used for nonproduction purposes, including, but not 
58.14 	limited to, the following: plant security, fire prevention, first aid, and hospital stations; 
58.15 	support operations or administration; pollution control; and plant cleaning, disposal of 
58.16 	scrap and waste, plant communications, space heating, cooling, lighting, or safety;
58.17 	(5) farm machinery and aquaculture production equipment as defined by section 
58.18 	297A.61, subdivisions 12 and 13;
58.19 	(6) machinery or equipment purchased and installed by a contractor as part of an 
58.20 	improvement to real property;
58.21 	(7) machinery and equipment used by restaurants in the furnishing, preparing, or 
58.22 	serving of prepared foods as defined in section 297A.61, subdivision 31;
58.23 	(8) machinery and equipment used to furnish the services listed in section 297A.61, 
58.24 	subdivision 3, paragraph (g), clause (6), items (i) to (vi) and (viii);
58.25 	(9) machinery or equipment used in the transportation, transmission, or distribution 
58.26 	of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, 
58.27 	tanks, mains, or other means of transporting those products. This clause does not apply to 
58.28 	machinery or equipment used to blend petroleum or biodiesel fuel as defined in section 
58.29 	239.77; or
58.30 	(10) any other item that is not essential to the integrated process of manufacturing, 
58.31 	fabricating, mining, or refining.
58.32 	(d) For purposes of this subdivision:
58.33 	(1) "Equipment" means independent devices or tools separate from machinery but 
58.34 	essential to an integrated production process, including computers and computer software, 
58.35 	used in operating, controlling, or regulating machinery and equipment; and any subunit or 
59.1 	assembly comprising a component of any machinery or accessory or attachment parts of 
59.2 	machinery, such as tools, dies, jigs, patterns, and molds.
59.3 	(2) "Fabricating" means to make, build, create, produce, or assemble components or 
59.4 	property to work in a new or different manner.
59.5 	(3) "Integrated production process" means a process or series of operations through 
59.6 	which tangible personal property is manufactured, fabricated, mined, or refined. For 
59.7 	purposes of this clause, (i) manufacturing begins with the removal of raw materials 
59.8 	from inventory and ends when the last process prior to loading for shipment has been 
59.9 	completed; (ii) fabricating begins with the removal from storage or inventory of the 
59.10 	property to be assembled, processed, altered, or modified and ends with the creation 
59.11 	or production of the new or changed product; (iii) mining begins with the removal of 
59.12 	overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and 
59.13 	ends when the last process before stockpiling is completed; and (iv) refining begins with 
59.14 	the removal from inventory or storage of a natural resource and ends with the conversion 
59.15 	of the item to its completed form.
59.16 	(4) "Machinery" means mechanical, electronic, or electrical devices, including 
59.17 	computers and computer software, that are purchased or constructed to be used for the 
59.18 	activities set forth in paragraph (a), beginning with the removal of raw materials from 
59.19 	inventory through completion of the product, including packaging of the product.
59.20 	(5) "Machinery and equipment used for pollution control" means machinery and 
59.21 	equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity 
59.22 	described in paragraph (a).
59.23 	(6) "Manufacturing" means an operation or series of operations where raw materials 
59.24 	are changed in form, composition, or condition by machinery and equipment and which 
59.25 	results in the production of a new article of tangible personal property. For purposes of 
59.26 	this subdivision, "manufacturing" includes the generation of electricity or steam to be 
59.27 	sold at retail.
59.28 	(7) "Mining" means the extraction of minerals, ores, stone, or peat.
59.29 	(8) "Online data retrieval system" means a system whose cumulation of information 
59.30 	is equally available and accessible to all its customers.
59.31 	(9) "Primarily" means machinery and equipment used 50 percent or more of the time 
59.32 	in an activity described in paragraph (a).
59.33 	(10) "Refining" means the process of converting a natural resource to an intermediate 
59.34 	or finished product, including the treatment of water to be sold at retail.
60.1 	(11) This subdivision does not apply to telecommunications equipment as 
60.2 	provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit 
60.3 	for telecommunications services.

60.4 	EFFECTIVE DATE. This section is effective for sales and purchases after 
60.5 	December 31, 2009.

60.6 	Sec. 4. Minnesota Statutes 2008, section 297A.71, is amended by adding a subdivision 
60.7 	to read:
60.8 		Subd. 41.Construction materials; meat processing facility. Materials and 
60.9 	supplies used or consumed in, and equipment incorporated into, the construction or 
60.10 	improvement of a meat processing facility are exempt. This facility must be constructed to 
60.11 	replace a meat processing facility destroyed in a fire in April 2009, that employed more 
60.12 	than 200 employees at the time of the destruction. The tax must be imposed and collected 
60.13 	as if the rate under section 297A.62, subdivision 1, applied and then refunded after June 
60.14 	30, 2011, in the manner provided in section 297A.75.

60.15 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
60.16 	April 30, 2009.

60.17 	Sec. 5. Minnesota Statutes 2008, section 297A.75, subdivision 1, is amended to read:
60.18 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the 
60.19 	following exempt items must be imposed and collected as if the sale were taxable and the 
60.20 	rate under section 297A.62, subdivision 1, applied. The exempt items include:
60.21 	(1) capital equipment exempt under section 297A.68, subdivision 5;
60.22 	(2) building materials for an agricultural processing facility exempt under section 
60.23 	297A.71, subdivision 13;
60.24 	(3) (2) building materials for mineral production facilities exempt under section 
60.25 	297A.71, subdivision 14;
60.26 	(4) (3) building materials for correctional facilities under section 297A.71, 
60.27 	subdivision 3;
60.28 	(5) (4) building materials used in a residence for disabled veterans exempt under 
60.29 	section 297A.71, subdivision 11;
60.30 	(6) (5) elevators and building materials exempt under section 297A.71, subdivision 
60.31 	12;
60.32 	(7) (6) building materials for the Long Lake Conservation Center exempt under 
60.33 	section 297A.71, subdivision 17;
61.1 	(8) materials, supplies, fixtures, furnishings, and equipment for a county law 
61.2 	enforcement and family service center under section 297A.71, subdivision 26;
61.3 	(9) (7) materials and supplies for qualified low-income housing under section 
61.4 	297A.71, subdivision 23; 
61.5 	(10) (8) materials, supplies, and equipment for municipal electric utility facilities 
61.6 	under section 297A.71, subdivision 35;
61.7 	(11) (9) equipment and materials used for the generation, transmission, and 
61.8 	distribution of electrical energy and an aerial camera package exempt under section 
61.9 	297A.68, subdivision 37; 
61.10 	(12) (10) tangible personal property and taxable services and construction materials, 
61.11 	supplies, and equipment exempt under section 297A.68, subdivision 41;  
61.12 	(13) (11) commuter rail vehicle and repair parts under section 297A.70, subdivision 
61.13 	3, clause (11); and
61.14 	(14) (12) materials, supplies, and equipment for construction or improvement of 
61.15 	projects and facilities under section 297A.71, subdivision 40.; and
61.16 	(13) materials, supplies, and equipment for construction or improvement of a meat 
61.17 	processing facility exempt under section 297A.71, subdivision 41.

61.18 	EFFECTIVE DATE. This section is effective for sales and purchases after 
61.19 	December 31, 2009, except that clause (13) is effective for sales and purchases beginning 
61.20 	after April 30, 2009.

61.21 	Sec. 6. Minnesota Statutes 2008, section 297A.75, subdivision 2, is amended to read:
61.22 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
61.23 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 
61.24 	must be paid to the applicant. Only the following persons may apply for the refund:
61.25 	(1) for subdivision 1, clauses (1) to (3), (2) and (13), the applicant must be the 
61.26 	purchaser;
61.27 	(2) for subdivision 1, clauses (4), (7), (3) and (8) (6), the applicant must be the 
61.28 	governmental subdivision;
61.29 	(3) for subdivision 1, clause (5) (4), the applicant must be the recipient of the 
61.30 	benefits provided in United States Code, title 38, chapter 21;
61.31 	(4) for subdivision 1, clause (6) (5), the applicant must be the owner of the 
61.32 	homestead property;
61.33 	(5) for subdivision 1, clause (9) (7), the owner of the qualified low-income housing 
61.34 	project; 
62.1 	(6) for subdivision 1, clause (10) (8), the applicant must be a municipal electric 
62.2 	utility or a joint venture of municipal electric utilities; 
62.3 	(7) for subdivision 1, clauses (11) (9) and (12) (10), the owner of the qualifying 
62.4 	business; and
62.5 	(8) for subdivision 1, clauses (13) and (14), the applicant must be the governmental 
62.6 	entity that owns or contracts for the project or facility.

62.7 	EFFECTIVE DATE. This section is effective for sales and purchases after 
62.8 	December 31, 2009, except that clause (1) related to section 297A.71, subdivision 41, is 
62.9 	effective for sales and purchases beginning after April 30, 2009.

62.10 	Sec. 7. Minnesota Statutes 2008, section 297A.75, subdivision 3, is amended to read:
62.11 		Subd. 3.Application. (a) The application must include sufficient information 
62.12 	to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 
62.13 	subcontractor, or builder, under subdivision 1, clause (3), (4), (5), (6), (7), (8), (9), (10), 
62.14 	(11), or (12), (13), or (14), the contractor, subcontractor, or builder must furnish to the 
62.15 	refund applicant a statement including the cost of the exempt items and the taxes paid on 
62.16 	the items unless otherwise specifically provided by this subdivision. The provisions of 
62.17 	sections 289A.40 and 289A.50 apply to refunds under this section.
62.18 	(b) An applicant may not file more than two applications per calendar year for 
62.19 	refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
62.20 	(c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 
62.21 	exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 
62.22 	of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 
62.23 	subdivision 40, must not be filed until after June 30, 2009.

62.24 	EFFECTIVE DATE. This section is effective for sales and purchases after 
62.25 	December 31, 2009.

62.26 	Sec. 8. Laws 1986, chapter 400, section 44, as amended by Laws 1995, chapter 264, 
62.27 	article 2, section 39, is amended to read:
62.28 	Sec. 44. DOWNTOWN TAXING AREA.
 62.29 	If a bill is enacted into law in the 1986 legislative session which authorizes the city 
62.30 	of Minneapolis to issue bonds and expend certain funds including taxes to finance the 
62.31 	acquisition and betterment of a convention center and related facilities, which authorizes 
62.32 	certain taxes to be levied in a downtown taxing area, then, notwithstanding the provisions 
62.33 	of that law "downtown taxing area" shall mean the geographic area bounded by the 
63.1 	portion of the Mississippi River between I-35W and Washington Avenue, the portion 
63.2 	of Washington Avenue between the river and I-35W, the portion of I-35W between 
63.3 	Washington Avenue and 8th Street South, the portion of 8th Street South between I-35W 
63.4 	and Portland Avenue South, the portion of Portland Avenue South between 8th Street 
63.5 	South and I-94, the portion of I-94 from the intersection of Portland Avenue South to 
63.6 	the intersection of I-94 and the Burlington Northern Railroad tracks, the portion of the 
63.7 	Burlington Northern Railroad tracks from I-94 to Main Street and including Nicollet 
63.8 	Island, and the portion of Main Street to Hennepin Avenue and the portion of Hennepin 
63.9 	Avenue between Main Street and 2nd Street S.E., and the portion of 2nd Street S.E. 
63.10 	between Main Street and Bank Street, and the portion of Bank Street between 2nd Street 
63.11 	S.E. and University Avenue S.E., and the portion of University Avenue S.E. between Bank 
63.12 	Street and I-35W, and by I-35W from University Avenue S.E., to the river. The downtown 
63.13 	taxing area excludes the area bounded on the south and west by Oak Grove Street, on the 
63.14 	east by Spruce Place, and on the north by West 15th Street. The downtown taxing area also 
63.15 	excludes any property located in a zone that is contained in chapter 546 of the Minneapolis 
63.16 	Zoning Code of Ordinances, on which a restaurant or liquor establishment is operated.

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

63.22 	Sec. 9. Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by 
63.23 	Laws 1998, chapter 389, article 8, section 28, and Laws 2008, chapter 366, article 7, 
63.24 	section 9, is amended to read:
63.25 		Subd. 3. Use of revenues. Revenues received from taxes authorized by subdivisions 
63.26 	1 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or 
63.27 	a portion of the expenses of constructing and improving facilities as part of an urban 
63.28 	revitalization project in downtown Mankato known as Riverfront 2000. Authorized 
63.29 	expenses include, but are not limited to, acquiring property and paying relocation expenses 
63.30 	related to the development of Riverfront 2000 and related facilities, and securing or paying 
63.31 	debt service on bonds or other obligations issued to finance the construction of Riverfront 
63.32 	2000 and related facilities. For purposes of this section, "Riverfront 2000 and related 
63.33 	facilities" means a civic-convention center, an arena, a riverfront park, a technology center 
63.34 	and related educational facilities, and all publicly owned real or personal property that 
63.35 	the governing body of the city determines will be necessary to facilitate the use of these 
64.1 	facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and 
64.2 	landscaping. It also includes the performing arts theatre and the Southern Minnesota 
64.3 	Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by 
64.4 	Minnesota State University, Mankato.

64.5 	EFFECTIVE DATE. This section is effective the day after the governing body of 
64.6 	the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section 
64.7 	645.021, subdivisions 2 and 3.

64.8 	Sec. 10. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by 
64.9 	Laws 1997, chapter 231, article 7, section 40, and Laws 1998, chapter 389, article 8, 
64.10 	section 30, and Laws 2003, First Special Session chapter 21, article 8, section 13, and 
64.11 	Laws 2005, First Special Session chapter 3, article 5, section 26, is amended to read:
64.12 		Subd. 2.Use of revenues. Revenues received from the tax authorized by 
64.13 	subdivision 1 may only be used by the city to pay the cost of collecting the tax, and to pay 
64.14 	for the following projects or to secure or pay any principal, premium, or interest on bonds 
64.15 	issued in accordance with subdivision 3 for the following projects.
64.16 	(a) To pay all or a portion of the capital expenses of construction, equipment and 
64.17 	acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex, 
64.18 	including the demolition of the existing arena and the construction and equipping of a 
64.19 	new arena.
64.20 	(b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be 
64.21 	spent for:
64.22 	(1) capital projects to further residential, cultural, commercial, and economic 
64.23 	development in both downtown St. Paul and St. Paul neighborhoods; and
64.24 	(2) capital and operating expenses of cultural organizations in the city, provided 
64.25 	that the amount spent under this clause must equal ten percent of the total amount spent 
64.26 	under this paragraph in any year.
64.27 	(c) The amount apportioned under paragraph (b) shall be no less than 60 percent 
64.28 	of the revenues derived from the tax each year, except to the extent that a portion of that 
64.29 	amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a) 
64.30 	prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1, 
64.31 	1998, but only if the city council determines that 40 percent of the revenues derived from 
64.32 	the tax together with other revenues pledged to the payment of the bonds, including the 
64.33 	proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
64.34 	(d) If in any year more than 40 percent of the revenue derived from the tax authorized 
64.35 	by subdivision 1 is used to pay debt service on the bonds issued for the purposes of 
65.1 	paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment 
65.2 	that exceeds 40 percent of the revenue must be determined for that year. In any year when 
65.3 	40 percent of the revenue produced by the sales tax exceeds the amount required to pay 
65.4 	debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the 
65.5 	amount of the excess must be made available for capital projects to further residential, 
65.6 	cultural, commercial, and economic development in the neighborhoods and downtown 
65.7 	until the cumulative amounts determined for all years under the preceding sentence have 
65.8 	been made available under this sentence. The amount made available as reimbursement in 
65.9 	the preceding sentence is not included in the 60 percent determined under paragraph (c).
65.10 	(e) In each of calendar years 2006, 2007, 2008, and 2009 to 2014, revenue not to 
65.11 	exceed $3,500,000 may be used to pay the principal of bonds issued for capital projects of 
65.12 	the city. After December 31, 2009 2014, revenue from the tax imposed under subdivision 
65.13 	1 may not be used for this purpose.
65.14 	(f) By January 15 of each year, the mayor and the city council must report to the 
65.15 	legislature on the use of sales tax revenues during the preceding one-year period.

65.16 	EFFECTIVE DATE. This section is effective the day after the governing body of 
65.17 	the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section 
65.18 	645.021, subdivisions 2 and 3.

65.19 	Sec. 11. Laws 1993, chapter 375, article 9, section 46, is amended by adding a 
65.20 	subdivision to read:
65.21 		Subd. 2a.Unexpended funds and interest. Any interest from loan repayments 
65.22 	or returned funds from revenues apportioned under subdivision 2, paragraph (b), clause 
65.23 	(1), must be made available only for projects qualifying under subdivision 2, paragraph 
65.24 	(b), clause (1).

65.25 	EFFECTIVE DATE. This section is effective the day after the governing body of 
65.26 	the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section 
65.27 	645.021, subdivisions 2 and 3.

65.28 	Sec. 12. Laws 1998, chapter 389, article 8, section 37, subdivision 1, is amended to 
65.29 	read:
65.30 		Subdivision 1.Requirement. Expenditures of revenues from the sales tax imposed 
65.31 	by the city of St. Paul that are dedicated to neighborhood investments may be made only 
65.32 	after review of the proposals for expenditures by the citizen review panel described in this 
65.33 	section. The panel must ensure that the application process for all proposals is open, fair, 
66.1 	and competitive. All proposals must be reviewed by the panel prior to presentation of the 
66.2 	proposal to the city council. The panel must evaluate the proposals and provide a report 
66.3 	to the city council that makes recommendations regarding the proposed expenditures 
66.4 	in rank order.

66.5 	EFFECTIVE DATE. This section is effective the day after the governing body of 
66.6 	the city of St. Paul and its chief clerical officer comply with Minnesota Statutes, section 
66.7 	645.021, subdivisions 2 and 3.

66.8 	Sec. 13. Laws 2002, chapter 377, article 3, section 25, is amended to read:
66.9 	Sec. 25. ROCHESTER LODGING TAX.
 66.10 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
66.11 	469.190 or 477A.016, or any other law, the city of Rochester may impose an additional 
66.12 	tax of one percent on the gross receipts from the furnishing for consideration of lodging at 
66.13 	a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it 
66.14 	for a continuous period of 30 days or more.
66.15 		Subd. 1a.Authorization. Notwithstanding Minnesota Statutes, section 469.190 or 
66.16 	477A.016, or any other law, and in addition to the tax authorized by subdivision 1, the city 
66.17 	of Rochester may impose an additional tax of one percent on the gross receipts from the 
66.18 	furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or 
66.19 	resort, other than the renting or leasing of it for a continuous period of 30 days or more 
66.20 	only upon approval of the city governing body of a total financial package for the project.
66.21 		Subd. 2.Disposition of proceeds. (a) The gross proceeds from any the tax imposed 
66.22 	under subdivision 1 must be used by the city to fund a local convention or tourism bureau 
66.23 	for the purpose of marketing and promoting the city as a tourist or convention center.
66.24 	(b) The gross proceeds from the one percent tax imposed under subdivision 1a 
66.25 	shall be used to pay for: (1) construction, renovation, improvement, and expansion of 
66.26 	the Mayo Civic Center and related skyway access, lighting, or landscaping; and (2) for 
66.27 	payment of any principal, interest, or premium on bonds issued to finance the Mayo 
66.28 	Civic Center Complex.
66.29 		Subd. 3.Expiration of taxing authority. The authority of the city to impose a tax 
66.30 	under subdivision 1a shall expire when the principal and interest on any bonds or other 
66.31 	obligations issued to finance the Mayo Civic Center Complex and related skyway access, 
66.32 	lighting, or landscaping described by the design grant authorized pursuant to Laws 2008, 
66.33 	chapter 179, section 21, subdivision 12, have been paid or at an earlier time as the city 
66.34 	shall, by ordinance, determine.

67.1 	EFFECTIVE DATE. This section is effective the day after the governing body of 
67.2 	the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section 
67.3 	645.021, subdivisions 2 and 3.

67.4 	Sec. 14. Laws 2006, chapter 259, article 3, section 12, subdivision 3, is amended to 
67.5 	read:
67.6 		Subd. 3.Use of revenues. Revenues received from the taxes authorized by 
67.7 	subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation 
67.8 	projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota 
67.9 	Department of Transportation, Steele County, and the city of Owatonna; regional parks 
67.10 	and trail developments; and the West Hills complex, including the firehall, and library 
67.11 	improvement projects; as described in the city resolution No. 4-06, Exhibit A, as adopted 
67.12 	by the city on January 17, 2006. Notwithstanding the specific transportation projects 
67.13 	described in city resolution No. 4-06, Exhibit A, the city may transfer up to $1,500,000 
67.14 	of the sales and use tax revenues from the Alexander Street to 39th Avenue Southwest 
67.15 	project to the reconstruction of 18th Street Southwest from 24th Avenue Southwest to 39th 
67.16 	Avenue West. The amount paid from these revenues for transportation projects may not 
67.17 	exceed $4,450,000 plus associated bond costs. The amount paid from these revenues for 
67.18 	park and trail projects may not exceed $5,400,000 plus associated bond costs. The amount 
67.19 	paid from these revenues for West Hills complex, fire hall, and library improvement 
67.20 	projects may not exceed $2,823,000 plus associated bond costs.

67.21 	EFFECTIVE DATE. This section is effective the day after the governing body of 
67.22 	the city of Owatonna complies with Minnesota Statutes, section 645.021, subdivision 3.

67.23 	Sec. 15. Laws 2008, chapter 366, article 7, section 16, subdivision 3, is amended to 
67.24 	read:
67.25 		Subd. 3.Use of proceeds from authorized taxes. The proceeds of any tax imposed 
67.26 	under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses 
67.27 	of operation and maintenance of the Riverfront 2000 and related facilities, including a 
67.28 	performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center, 
67.29 	attached to the Mankato Civic Center for use by Minnesota State University, Mankato. 
67.30 	Authorized expenses include securing or paying debt service on bonds or other obligations 
67.31 	issued to finance the construction of the facilities.

68.1 	EFFECTIVE DATE. This section is effective the day after the governing body of 
68.2 	the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section 
68.3 	645.021, subdivisions 2 and 3.

68.4 	Sec. 16. Laws 2008, chapter 366, article 7, section 18, subdivision 2, is amended to 
68.5 	read:
68.6 		Subd. 2.Use of revenues. Revenues received from the tax authorized by 
68.7 	subdivision 1 must be used by Cook County to pay the costs of collecting the tax and 
68.8 	to pay for the following projects:
68.9 	(1) construction and, improvements, and additions to a county community center
68.10 	centers  and public recreation area areas, including, but not limited to, improvements and 
68.11 	additions to the skateboard park, hockey rink, ball fields, community center addition, 
68.12 	county public parking area, tennis courts, and all associated improvements areas; and
68.13 	(2) construction of and improvements to the Grand Marais Public Library;
68.14 	(3) construction and improvement of a countywide high-speed communications 
68.15 	infrastructure network; and
68.16 	(4) construction and improvement of a district energy plant for public facilities in 
68.17 	Grand Marais.
68.18 	Authorized expenses include, but are not limited to, paying construction expenses related 
68.19 	to these improvements, and paying debt service on bonds or other obligations issued to 
68.20 	finance acquisition and construction of these improvements. The total amount of revenues 
68.21 	from the taxes in subdivision 1 that may be used to fund these projects is $14,000,000
68.22 	$20,000,000  plus any associated bond costs.

68.23 	EFFECTIVE DATE. This section is effective the day after the governing body 
68.24 	of Cook County and its chief clerical officer comply with Minnesota Statutes, section 
68.25 	645.021, subdivisions 2 and 3.

68.26 	Sec. 17. Laws 2008, chapter 366, article 7, section 18, subdivision 3, is amended to 
68.27 	read:
68.28 		Subd. 3.Bonding authority. Cook County may issue bonds under Minnesota 
68.29 	Statutes, chapter 475, to pay capital and administrative expenses for the projects 
68.30 	authorized in subdivision 2, in an amount that does not exceed $14,000,000 $20,000,000. 
68.31 	An election to approve the bonds under Minnesota Statutes, section 475.58, is not 
68.32 	required. The issuance of bonds under this subdivision is not subject to Minnesota 
68.33 	Statutes, sections 275.60 and 275.61. The debt represented by the bonds is not included 
69.1 	in computing any debt limitation applicable to the county, and any levy of taxes under 
69.2 	Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is not 
69.3 	subject to any levy limitation.

69.4 	EFFECTIVE DATE. This section is effective the day after the governing body 
69.5 	of Cook County and its chief clerical officer comply with Minnesota Statutes, section 
69.6 	645.021, subdivisions 2 and 3.

69.7 	Sec. 18. ROCHESTER FOOD AND BEVERAGE TAX.
 69.8 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
69.9 	477A.016, or any other law or charter provision, the city of Rochester may impose a tax of 
69.10 	one percent on the gross receipts on all sales of food and beverages by restaurants and 
69.11 	places of refreshment, as defined by resolution of the city, that occur in the city. For 
69.12 	purposes of this section, "food and beverages" include retail on-sale of intoxicating liquor 
69.13 	and fermented malt beverages.
69.14 		Subd. 2.Use of proceeds. The proceeds of this tax shall be used for: (1) paying the 
69.15 	cost of collection; (2) to pay for construction, renovation, improvement, and expansion 
69.16 	of the Mayo Civic Center Complex and related skyway access, lighting, or landscaping; 
69.17 	and (3) for payment of any principal, interest, or premium on bonds issued to finance 
69.18 	the Mayo Civic Center Complex.
69.19 		Subd. 3.Imposition of the tax. The tax under this section may only be imposed 
69.20 	upon approval of the city governing body of a total financing package for the project.
69.21 		Subd. 4.Expiration of taxing authority. The authority granted under subdivision 
69.22 	1 to the city to impose a one percent tax on food and beverages shall expire when the 
69.23 	principal and interest on any bonds or other obligations issued to finance the Mayo Civic 
69.24 	Center Complex and related skyway access, lighting, or landscaping described by the 
69.25 	design grant authorized pursuant to Laws 2008, chapter 179, section 21, subdivision 12, 
69.26 	have been paid or at an earlier time as the city shall, by ordinance, determine.

69.27 	EFFECTIVE DATE. This section is effective the day after the governing body of 
69.28 	the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section 
69.29 	645.021, subdivisions 2 and 3, and upon approval of the city governing body of a total 
69.30 	financing package to renovate, improve, or expand the Mayo Civic Center Complex.

69.31 	ARTICLE 4
69.32 	PROPERTY TAXES

69.33 	Section 1. Minnesota Statutes 2008, section 123B.10, subdivision 1, is amended to read:
70.1 		Subdivision 1.Budgets; form of notification. (a) Every board must publish revenue 
70.2 	and expenditure budgets for the current year and the actual revenues, expenditures, fund 
70.3 	balances for the prior year and projected fund balances for the current year in a form 
70.4 	prescribed by the commissioner within one week of the acceptance of the final audit by 
70.5 	the board, or November 30, whichever is earlier. The forms prescribed must be designed 
70.6 	so that year to year comparisons of revenue, expenditures and fund balances can be made. 
70.7 	(b) A school board annually must notify the public of its revenue, expenditures, fund 
70.8 	balances, and other relevant budget information. The board must include the budget 
70.9 	information required by this section in the materials provided as a part of its truth in 
70.10 	taxation hearing, post the materials in a conspicuous place on the district's official Web 
70.11 	site, including a link to the district's school report card on the Department of Education's 
70.12 	Web site, and publish the information in a qualified newspaper of general circulation 
70.13 	in the district.

70.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
70.15 	thereafter.

70.16 	Sec. 2. Minnesota Statutes 2008, section 124D.4531, is amended by adding a 
70.17 	subdivision to read:
70.18 		Subd. 5.Allocation from districts participating in agreements for secondary 
70.19 	education or interdistrict cooperation. For purposes of this section, a district with a 
70.20 	career and technical program approved under this section that participates in an agreement 
70.21 	under section 123A.30 or 123A.32 must allocate its levy authority under this section 
70.22 	among participating districts.

70.23 	EFFECTIVE DATE. This section is effective retroactively for taxes payable in 
70.24 	2008.

70.25 	Sec. 3. Minnesota Statutes 2008, section 126C.01, subdivision 3, is amended to read:
70.26 		Subd. 3.Referendum market value. "Referendum market value" means the market 
70.27 	value of all taxable property, excluding property classified as class 2, noncommercial 
70.28 	4c(1), or 4c(4) under section 273.13. The portion of class 2a property consisting of the 
70.29 	house, garage, and surrounding one acre of land of an agricultural homestead is included 
70.30 	in referendum market value. Any class of property, or any portion of a class of property, 
70.31 	that is included in the definition of referendum market value and that has a class rate of 
70.32 	less than one percent under section 273.13 shall have a referendum market value equal 
70.33 	to its net tax capacity multiplied by 100. 

71.1 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
71.2 	thereafter.

71.3 	Sec. 4. Minnesota Statutes 2008, section 126C.41, subdivision 2, is amended to read:
71.4 		Subd. 2.Retired employee health benefits. A district may levy an amount up to the 
71.5 	amount the district is required by the collective bargaining agreement in effect on March 
71.6 	30, 1992, to pay for health insurance or unreimbursed medical expenses for licensed 
71.7 	and nonlicensed employees who have terminated services in the employing district and 
71.8 	withdrawn from active teaching service or other active service, as applicable, either (1) 
71.9 	before July 1, 1992, or (2) before July 1, 1998, but for employees retiring after June 30, 
71.10 	1992, and before July 1, 1998, only if a sunset clause is in effect for the current collective 
71.11 	bargaining agreement. The total amount of the levy each year may not exceed $600,000.

71.12 	Sec. 5. Minnesota Statutes 2008, section 144F.01, subdivision 3, is amended to read:
71.13 		Subd. 3.Board. The special taxing district under this section is governed by a 
71.14 	board made up initially of representatives of each participating political subdivision in 
71.15 	the proportions set out in the establishing resolution, subject to change as provided in the 
71.16 	district's charter, if any, or in the district's bylaws. If a township states in its resolution that 
71.17 	less than the entire township will participate in the district, the partial townships shall be 
71.18 	represented on the board by only one member, appointed from among those townships 
71.19 	so participating. The method for appointment shall be governed by the bylaws of the 
71.20 	district's joint powers agreement. Each participant's representative serves at the pleasure 
71.21 	of that participant's governing body or bodies.

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

71.23 	Sec. 6. Minnesota Statutes 2008, section 272.02, subdivision 7, is amended to read:
71.24 		Subd. 7.Institutions of public charity. (a) Institutions of purely public charity that 
71.25 	are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue 
71.26 	Code are exempt. if they meet the requirements of this subdivision. In determining 
71.27 	whether real property is exempt under this subdivision, the following factors must be 
71.28 	considered:
71.29 	(1) whether the stated purpose of the undertaking is to be helpful to others without 
71.30 	immediate expectation of material reward;
71.31 	(2) whether the institution of public charity is supported by material donations, gifts, 
71.32 	or government grants for services to the public in whole or in part;
72.1 	(3) whether a material number of the recipients of the charity receive benefits or 
72.2 	services at reduced or no cost, or whether the organization provides services to the public 
72.3 	that alleviate burdens or responsibilities that would otherwise be borne by the government;
72.4 	(4) if income received, including material gifts and donations, that produces a profit 
72.5 	to the charitable institution is not distributed to private interests;
72.6 	(5) whether the beneficiaries of the charity are restricted or unrestricted, and, if 
72.7 	restricted, whether the class of persons to whom the charity is made available is one 
72.8 	having a reasonable relationship to the charitable objectives; and
72.9 	(6) whether dividends, in form or substance, or assets upon dissolution, are available 
72.10 	to private interests.
72.11 	A charitable organization must satisfy the factors in clauses (1) to (6) for its property 
72.12 	to be exempt under this subdivision, unless there is a compelling factual reason for failing 
72.13 	to meet the factors in clause (2), (3), or (5). If there is a compelling factual reason for 
72.14 	failing to meet the factors in clause (2), (3), or (5), an organization is a purely public 
72.15 	charity under this subdivision without meeting those factors. 
72.16 	After an exemption is properly granted under this subdivision, it will remain in effect 
72.17 	unless there is a material change in facts.
72.18 	(b) For purposes of this subdivision, a grant is a written instrument or electronic 
72.19 	document defining a legal relationship between a granting agency and a grantee when 
72.20 	the principal purpose of the relationship is to transfer cash or something of value to the 
72.21 	grantee to support a public purpose authorized by law in a general manner instead of 
72.22 	acquiring by professional or technical contract, purchase, lease, or barter property or 
72.23 	services for the direct benefit or use of the granting agency.
72.24 	(c) In determining whether rental housing property qualifies for exemption under 
72.25 	this subdivision, the following are not gifts or donations to the owner of the rental housing:
72.26 	(1) rent assistance provided by the government to or on behalf of tenants; and
72.27 	(2) financing assistance or tax credits provided by the government to the owner on 
72.28 	condition that specific units or a specific quantity of units be set aside for persons or 
72.29 	families with certain income characteristics.

72.30 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
72.31 	thereafter.

72.32 	Sec. 7. Minnesota Statutes 2008, section 272.02, subdivision 10, is amended to read:
72.33 		Subd. 10.Personal property used for pollution control. Personal property used 
72.34 	primarily for the abatement and control of air, water, or land pollution is exempt to the 
72.35 	extent that it is so used, and real property is exempt if it is used primarily for abatement 
73.1 	and control of air, water, or land pollution as part of an agricultural operation, as a part 
73.2 	of a centralized treatment and recovery facility operating under a permit issued by the 
73.3 	Minnesota Pollution Control Agency pursuant to chapters 115 and 116 and Minnesota 
73.4 	Rules, parts 7001.0500 to 7001.0730, and 7045.0020 to 7045.1260, as a wastewater 
73.5 	treatment facility and for the treatment, recovery, and stabilization of metals, oils, 
73.6 	chemicals, water, sludges, or inorganic materials from hazardous industrial wastes, or as 
73.7 	part of an electric generation system. For purposes of this subdivision, personal property 
73.8 	includes ponderous machinery and equipment used in a business or production activity 
73.9 	that at common law is considered real property.
73.10 	Any taxpayer requesting exemption of all or a portion of any real property or any 
73.11 	equipment or device, or part thereof, operated primarily for the control or abatement of 
73.12 	air, water, or land pollution shall file an application with the commissioner of revenue. 
73.13 	The Minnesota Pollution Control Agency shall upon request of the commissioner furnish 
73.14 	information and advice to the commissioner.
73.15 	The information and advice furnished by the Minnesota Pollution Control Agency 
73.16 	must include statements as to whether the equipment, device, or real property meets 
73.17 	a standard, rule, criteria, guideline, policy, or order of the Minnesota Pollution Control 
73.18 	Agency, and whether the equipment, device, or real property is installed or operated 
73.19 	in accordance with it. In the case of an exemption requested under this subdivision 
73.20 	for personal property at an electric generation facility, the commissioner must submit 
73.21 	the advice provided by the Minnesota Pollution Control Agency to the municipality 
73.22 	and the county in which the property is located for their approval. If the county and 
73.23 	municipality do not submit their approval or disapproval  to the commissioner within 90 
73.24 	days, the exemption is deemed to be approved. On determining that property qualifies for 
73.25 	exemption, the commissioner shall issue an order exempting the property from taxation. 
73.26 	The equipment, device, or real property shall continue to be exempt from taxation as long 
73.27 	as the order issued by the commissioner remains in effect.

73.28 	Sec. 8. Minnesota Statutes 2008, section 272.02, subdivision 86, is amended to read:
73.29 		Subd. 86. Apprenticeship training facilities. All or a portion of a building used 
73.30 	exclusively for a state-approved apprenticeship program through the Department of 
73.31 	Labor and Industry is exempt if (1) it is owned and operated by a nonprofit corporation
73.32 	organization or a nonprofit trust, and operated by a nonprofit organization or a nonprofit 
73.33 	trust, (2) the program participants receive no compensation, and (3) it is located in the 
73.34 	Minneapolis and St. Paul standard metropolitan statistical area as determined by the 2000 
73.35 	federal census or in a city outside the Minneapolis and St. Paul standard metropolitan 
74.1 	statistical area that has a population of 7,500 or greater according to the most recent 
74.2 	federal census. Use of the property for advanced skills training of incumbent workers does 
74.3 	not disqualify the property for the exemption under this subdivision. This exemption 
74.4 	does not include includes up to five acres of the land on which the building is located and 
74.5 	associated parking areas on that land. If a parking area associated with the facility is 
74.6 	used for the purposes of the facility and for other purposes, a portion of the parking area 
74.7 	shall be exempt in proportion to the square footage of the facility used for purposes of 
74.8 	apprenticeship training. 

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

74.11 	Sec. 9. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
74.12 	to read:
74.13 		Subd. 90.Electric generation facility; personal property. Notwithstanding 
74.14 	subdivision 9, clause (a), attached machinery and other personal property which is part 
74.15 	of an electric generation facility that exceeds 150 megawatts of installed capacity, does 
74.16 	not exceed 780 megawatts of summer capacity, and that meets the requirements of this 
74.17 	subdivision is exempt. At the time of construction, the facility must:
74.18 	(1) be designed to utilize natural gas as a primary fuel;
74.19 	(2) not be owned by a public utility as defined in section 216B.02, subdivision 4;
74.20 	(3) be located within five miles of at least two interstate natural gas pipelines;
74.21 	(4) be located within one mile of an existing electrical transmission substation with 
74.22 	operating alternating current voltages including each of 115 kV, 345kV, and 500 kV;
74.23 	(5) be designed to provide electrical capacity, energy, and ancillary services and have 
74.24 	satisfied all of the requirements under section 216B.243; and
74.25 	(6) have executed an interconnection agreement with the Midwest Independent 
74.26 	System Operator that does not require the acquisition of more than one mile of new 
74.27 	electric transmission right-of-way within the county where the property is located.
74.28 	Construction of the facility must be commenced after March 1, 2010, and before 
74.29 	March 1, 2014. Property eligible for this exemption does not include electric transmission 
74.30 	lines and interconnections or gas pipelines and interconnections appurtenant to the 
74.31 	property or the facility.

74.32 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
74.33 	thereafter, for taxes payable in 2010 and thereafter, subject to subdivision 92.

75.1 	Sec. 10. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
75.2 	to read:
75.3 		Subd. 91.Electric generation facility; personal property. Notwithstanding 
75.4 	subdivision 9, clause (a), attached machinery and other personal property that is part of 
75.5 	a simple-cycle electric generation facility of more than 40 megawatts and less than 125 
75.6 	megawatts of installed capacity and that meets the requirements of this subdivision is 
75.7 	exempt. At the time of construction, the facility must:
75.8 	(1) utilize natural gas as a primary fuel;
75.9 	(2) be located within two miles of parallel existing 36-inch natural gas pipelines and 
75.10 	an existing 115-kilovolt high-voltage electric transmission line;
75.11 	(3) be designed to provide peaking, emergency backup, or contingency services; and
75.12 	(4) satisfy a resource deficiency identified in an approved integrated resource plan 
75.13 	filed under section 216B.2422.
75.14 	Construction of the facility must be commenced after January 1, 2010, and 
75.15 	before January 1, 2014. Property eligible for this exemption does not include electric 
75.16 	transmission lines and interconnections or gas pipelines and interconnections appurtenant 
75.17 	to the property or the facility.

75.18 	EFFECTIVE DATE. This section is effective for assessments in 2011, taxes 
75.19 	payable in 2012, and thereafter, subject to subdivision 92.

75.20 	Sec. 11. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
75.21 	to read:
75.22 		Subd. 92.Phaseout of exemptions of personal property of electric generation 
75.23 	facilities. Notwithstanding any other law to the contrary, the exemptions provided under 
75.24 	this section for the attached machinery and other personal property of any electric 
75.25 	generation facility will terminate as provided in this subdivision. Each exemption 
75.26 	granted to begin with the 2007 or later assessment year will apply to the full value of the 
75.27 	attached machinery and other personal property for three assessment years; in the case 
75.28 	of an exemption granted beginning with the 2006 or an earlier assessment year, the full 
75.29 	exemption is terminated beginning with the 2009 assessment year. For the first assessment 
75.30 	year after the full exemption is terminated, one-third of the value of the previously 
75.31 	exempted property will be subject to taxation, and an additional one-third will become 
75.32 	taxable in each of the two subsequent assessment years.

75.33 	EFFECTIVE DATE. This section is effective for assessments in 2009 and 
75.34 	thereafter.

76.1 	Sec. 12. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
76.2 	to read:
76.3 		Subd. 93.Elderly living facility. An elderly living facility is exempt from taxation 
76.4 	if it meets all of the following requirements:
76.5 	(1) the facility consists of no more than 75 living units;
76.6 	(2) the facility is located in a city of the first class with a population of more than 
76.7 	350,000;
76.8 	(3) the facility is owned and operated by a nonprofit corporation organized under 
76.9 	chapter 317A; 
76.10 	(4) the owner of the facility is an affiliate of entities that own and operate assisted 
76.11 	living and skilled nursing facilities that:
76.12 	(i) are located across a street from the facility;
76.13 	(ii) are adjacent to a church that is exempt from taxation under subdivision 6;
76.14 	(iii) include a congregate dining program; and 
76.15 	(iv) provide assisted living or similar social and physical support;
76.16 	(5) the residents of the facility must be:
76.17 	(i) at least 62 years of age; or
76.18 	(ii) handicapped;
76.19 	(6) at least 30 percent of the units in the facility are occupied by persons whose 
76.20 	annual income does not exceed 50 percent of median family income for the area; and 
76.21 	(7) before the effective date of this subdivision, the facility has received approval of 
76.22 	street vacation and land use applications from the city in which it is to be located.
76.23 	In this subdivision, "affiliate" means any entity directly or indirectly controlling or 
76.24 	controlled by or under direct or indirect common control with an entity, and "control" 
76.25 	means the power to direct management and policies through membership or ownership 
76.26 	of voting securities.
76.27 	The exemption provided in this subdivision applies to taxes levied in each year or 
76.28 	partial year of the term of the facility's initial permanent financing or 25 years, whichever 
76.29 	is later.

76.30 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
76.31 	thereafter.

76.32 	Sec. 13. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
76.33 	to read:
76.34 		Subd. 94.Nursing homes. A nursing home licensed under section 144A.02 or a 
76.35 	boarding care home certified as a nursing facility under title 19 of the Social Security 
77.1 	Act that is exempt from federal income taxation pursuant to section 501(c)(3) of the 
77.2 	Internal Revenue Code is exempt from property taxation if the nursing home or boarding 
77.3 	care home either:
77.4 	(1) is certified to participate in the medical assistance program under title 19 of 
77.5 	the Social Security Act; or
77.6 	(2) certifies to the commissioner of revenue that it does not discharge residents 
77.7 	due to the inability to pay.

77.8 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
77.9 	thereafter.

77.10 	Sec. 14. Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision 
77.11 	to read:
77.12 		Subd. 95.Railroad wye connections. Any portion of a railroad wye connection, 
77.13 	including the track, ties, ballast, switch gear, and related improvements, is exempt if it 
77.14 	meets all of the following: (1) is publicly owned; (2) is funded, in whole or in part, by 
77.15 	state grants; (3) is located within the metropolitan area as defined in section 473.121, 
77.16 	subdivision 2; (4) includes a single track segment that is no longer than 2,500 feet in 
77.17 	length; (5) connects intersecting rail lines; and (6) is constructed after January 1, 2009.

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

77.20 	Sec. 15. Minnesota Statutes 2008, section 272.0213, is amended to read:
77.21 	272.0213 LEASED SEASONAL-RECREATIONAL LAND.
77.22 	A county board may elect, by resolution, to Qualified lands, as defined in this 
77.23 	section, are exempt from taxation, including an exemption from the tax under section 
77.24 	273.19, qualified lands. "Qualified lands" for purposes of this section means property that:
77.25 	(1) is owned by a county, city, town, the state, or the federal governments; and
77.26 	(2) is rented by the entity for noncommercial seasonal-recreational or noncommercial 
77.27 	seasonal-recreational residential use; and
77.28 	(3) was rented for the purposes specified in clause (2) and was exempt from taxation 
77.29 	for property taxes payable in 2008.

77.30 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
77.31 	thereafter.

78.1 	Sec. 16. Minnesota Statutes 2008, section 273.113, subdivision 1, is amended to read:
78.2 		Subdivision 1.Definition. For the purposes of this section, the following terms 
78.3 	have the meanings given to them:
78.4 	(1) "proposed bovine tuberculosis modified accredited zone" means the modified 
78.5 	accredited zone proposed designated by the Board of Animal Health under section 35.244; 
78.6 	and
78.7 	(2) "located within" means that the herd is kept in the area for at least a part of 
78.8 	calendar year 2006, 2007, or 2008; and
78.9 	(3) "animal" means cattle, bison, goats, and farmed cervidae.

78.10 	EFFECTIVE DATE. This section is effective for property taxes payable in 2010 
78.11 	and thereafter.

78.12 	Sec. 17. Minnesota Statutes 2008, section 273.113, subdivision 2, is amended to read:
78.13 		Subd. 2.Eligibility; amount of credit. Agricultural and rural vacant land classified 
78.14 	under section 273.13, subdivision 23, located within a proposed bovine tuberculosis 
78.15 	modified accredited zone is eligible for a property tax credit equal to the property tax
78.16 	greater of: (1) $5 per acre on the parcelfirst 160 acres of the property where the herd had 
78.17 	been located, excluding any tax attributable to residential structures.; or (2) an amount 
78.18 	equal to $5 per acre times five acres times the highest number of animals tested on the 
78.19 	property for bovine tuberculosis in a whole-herd test as reported by the Board of Animal 
78.20 	Health in 2006, 2007, or 2008. The amount of the credit cannot exceed the property tax 
78.21 	payable on the property where the herd had been located, excluding any tax attributable 
78.22 	to residential structures. To begin to qualify for the tax credit, the owner shall file an 
78.23 	application with the county by December 1 of the levy year. The credit must be given 
78.24 	for each subsequent taxes payable year until the credit terminates under subdivision 4. 
78.25 	The assessor shall indicate the amount of the property tax reduction on the property tax 
78.26 	statement of each taxpayer receiving a credit under this section. The credit paid pursuant 
78.27 	to this section shall be deducted from the tax due on the property as provided in section 
78.28 	273.1393.

78.29 	EFFECTIVE DATE. This section is effective for property taxes payable in 2010 
78.30 	and thereafter.

78.31 	Sec. 18. Minnesota Statutes 2008, section 273.13, subdivision 24, is amended to read:
78.32 		Subd. 24.Class 3. (a) Commercial and industrial property and utility real and 
78.33 	personal property is class 3a.
79.1 	(1) Except as otherwise provided, each parcel of commercial, industrial, or utility 
79.2 	real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent 
79.3 	of the remaining market value. In the case of contiguous parcels of property owned by the 
79.4 	same person or entity, only the value equal to the first-tier value of the contiguous parcels 
79.5 	qualifies for the reduced class rate, except that contiguous parcels owned by the same 
79.6 	person or entity shall be eligible for the first-tier value class rate on each separate business 
79.7 	operated by the owner of the property, provided the business is housed in a separate 
79.8 	structure. For the purposes of this subdivision, the first tier means the first $150,000 of 
79.9 	market value. Real property owned in fee by a utility for transmission line right-of-way 
79.10 	shall be classified at the class rate for the higher tier.
79.11 	For purposes of this subdivision, parcels are considered to be contiguous even if 
79.12 	they are separated from each other by a road, street, waterway, or other similar intervening 
79.13 	type of property. Connections between parcels that consist of power lines or pipelines do 
79.14 	not cause the parcels to be contiguous. Property owners who have contiguous parcels of 
79.15 	property that constitute separate businesses that may qualify for the first-tier class rate shall 
79.16 	notify the assessor by July 1, for treatment beginning in the following taxes payable year.
79.17 	(2) All Personal property that is: (i) part of an electric generation, transmission, or 
79.18 	distribution system; or (ii), including tools, implements, and machinery, has a class rate 
79.19 	of 2.8 percent.
79.20 	(3) Personal property that is either: (i) part of a pipeline system transporting 
79.21 	or distributing water, gas, crude oil, or petroleum products; and (iii) not described in 
79.22 	clause (3), and all, including tools, implements, and machinery; or (ii) part of an electric 
79.23 	transmission or distribution system, including tools, implements, and machinery, has a 
79.24 	class rate of 2.25 percent.
79.25 	(4)  Railroad operating property has a class rate as provided under clause paragraph
79.26 	(1) for the first tier of market value and the remaining market value. In the case of multiple 
79.27 	parcels in one county that are owned by one person or entity, only one first tier amount 
79.28 	is eligible for the reduced rate.
79.29 	(3) The entire market value of personal property that is: (i) tools, implements, and 
79.30 	machinery of an electric generation, transmission, or distribution system; (ii) tools, 
79.31 	implements, and machinery of a pipeline system transporting or distributing water, gas, 
79.32 	crude oil, or petroleum products; or (iii) the (5) Personal property consisting of mains 
79.33 	and pipes used in the distribution of steam or hot or chilled water for heating or cooling 
79.34 	buildings, has a class rate as provided under clause paragraph (1) for the remaining market 
79.35 	value in excess of the first tier.
80.1 	(b) Employment property defined in section 469.166, during the period provided 
80.2 	in section 469.170, shall constitute class 3b. The class rates for class 3b property are 
80.3 	determined under paragraph (a). 

80.4 	EFFECTIVE DATE. This section is effective for taxes levied in 2009, payable in 
80.5 	2010 and thereafter.

80.6 	Sec. 19. Minnesota Statutes 2008, section 273.13, subdivision 25, is amended to read:
80.7 		Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 
80.8 	units and used or held for use by the owner or by the tenants or lessees of the owner 
80.9 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
80.10 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
80.11 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
80.12 	purposes, without regard to whether the property has been platted or subdivided. The 
80.13 	market value of class 4a property has a class rate of 1.25 percent. 
80.14 	(b) Class 4b includes: 
80.15 	(1) residential real estate containing less than four units that does not qualify as class 
80.16 	4bb, other than seasonal residential recreational property; 
80.17 	(2) manufactured homes not classified under any other provision; 
80.18 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
80.19 	farm classified under subdivision 23, paragraph (b) containing two or three units; and 
80.20 	(4) unimproved property that is classified residential as determined under subdivision 
80.21 	33. 
80.22 	The market value of class 4b property has a class rate of 1.25 percent. 
80.23 	(c) Class 4bb includes: 
80.24 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
80.25 	residential recreational property; and 
80.26 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
80.27 	nonhomestead farm classified under subdivision 23, paragraph (b). 
80.28 	Class 4bb property has the same class rates as class 1a property under subdivision 22. 
80.29 	Property that has been classified as seasonal residential recreational property at 
80.30 	any time during which it has been owned by the current owner or spouse of the current 
80.31 	owner does not qualify for class 4bb. 
80.32 	(d) Class 4c property includes: 
80.33 	(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph 
80.34 	(b), clause (1), real and personal property devoted to temporary and seasonal residential 
80.35 	occupancy for recreation purposes, including real and personal property devoted to 
81.1 	temporary and seasonal residential occupancy for recreation purposes and not devoted to 
81.2 	commercial purposes for more than 250 days in the year preceding the year of assessment. 
81.3 	For purposes of this clause, property is devoted to a commercial purpose on a specific 
81.4 	day if any portion of the property is used for residential occupancy, and a fee is charged 
81.5 	for residential occupancy. Class 4c property must contain three or more rental units. A 
81.6 	"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual 
81.7 	camping site equipped with water and electrical hookups for recreational vehicles. Except 
81.8 	for property described in item (iii) below, class 4c property must provide recreational 
81.9 	activities such as renting ice fishing houses, boats and motors, snowmobiles, downhill or 
81.10 	cross-country ski equipment; provide marina services, launch services, or guide services; 
81.11 	or sell bait and fishing tackle. A camping pad offered for rent by a property that otherwise 
81.12 	qualifies for class 4c is also class 4c regardless of the term of the rental agreement, as 
81.13 	long as the use of the camping pad does not exceed 250 days. In order for a property to 
81.14 	be classified as class 4c, seasonal residential recreational for commercial purposes under 
81.15 	this clause, at least 40 percent of the annual gross lodging receipts related to the property 
81.16 	must be from business conducted during 90 consecutive days and either (i) at least 60 
81.17 	percent of all paid bookings by lodging guests during the year must be for periods of at 
81.18 	least two consecutive nights; or (ii) at least 20 percent of the annual gross receipts must 
81.19 	be from charges for rental of fish houses, boats and motors, snowmobiles, downhill or 
81.20 	cross-country ski equipment, or charges for marina services, launch services, and guide 
81.21 	services, or the sale of bait and fishing tackle; or (iii) the property contains 20 or fewer 
81.22 	rental units, is devoted to temporary residential occupancy for no more than 250 days in 
81.23 	the year, is located in a township or a city with a population of 2,500 or less, that is located 
81.24 	outside the metropolitan area as defined under section 473.121, subdivision 2, and that 
81.25 	contains a portion of a state trail administered by the Department of Natural Resources. 
81.26 	For purposes of this determination, a paid booking of five or more nights shall be counted 
81.27 	as two bookings. Class 4c also includes commercial use real property used exclusively 
81.28 	for recreational purposes in conjunction with class 4c property devoted to temporary 
81.29 	and seasonal residential occupancy for recreational purposes, up to a total of two acres, 
81.30 	provided the property is not devoted to commercial recreational use for more than 250 
81.31 	days in the year preceding the year of assessment and is located within two miles of the 
81.32 	class 4c property with which it is used. Owners of real and personal property devoted 
81.33 	to temporary and seasonal residential occupancy for recreation purposes and all or a 
81.34 	portion of which was devoted to commercial purposes for not more than 250 days in the 
81.35 	year preceding the year of assessment desiring classification as class 4c, must submit a 
81.36 	declaration to the assessor designating the cabins or units occupied for 250 days or less in 
82.1 	the year preceding the year of assessment by January 15 of the assessment year. Those 
82.2 	cabins or units and a proportionate share of the land on which they are located must be 
82.3 	designated class 4c as otherwise provided. The remainder of the cabins or units and 
82.4 	a proportionate share of the land on which they are located will be designated as class 
82.5 	3a. The owner of property desiring designation as class 4c property must provide guest 
82.6 	registers or other records demonstrating that the units for which class 4c designation is 
82.7 	sought were not occupied for more than 250 days in the year preceding the assessment if 
82.8 	so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, 
82.9 	(4) conference center or meeting room, and (5) other nonresidential facility operated on a 
82.10 	commercial basis not directly related to temporary and seasonal residential occupancy for 
82.11 	recreation purposes does not qualify for class 4c; 
82.12 	(2) qualified property used as a golf course if: 
82.13 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
82.14 	dues, but a membership fee may not be required in order to use the property for golfing, 
82.15 	and its green fees for golfing must be comparable to green fees typically charged by 
82.16 	municipal courses; and 
82.17 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 
82.18 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
82.19 	with the golf course is classified as class 3a property; 
82.20 	(3) real property up to a maximum of three acres of land owned and used by a 
82.21 	nonprofit community service oriented organization and that is not used for residential 
82.22 	purposes on either a temporary or permanent basis, qualifies for class 4c provided that 
82.23 	it meets either of the following: 
82.24 	(i) the property is not used for a revenue-producing activity for more than six days 
82.25 	in the calendar year preceding the year of assessment; or 
82.26 	(ii) the organization makes annual charitable contributions and donations at least 
82.27 	equal to the property's previous year's property taxes and the property is allowed to be 
82.28 	used for public and community meetings or events for no charge, as appropriate to the 
82.29 	size of the facility. 
82.30 	For purposes of this clause, 
82.31 	(A) "charitable contributions and donations" has the same meaning as lawful 
82.32 	gambling purposes under section 349.12, subdivision 25, excluding those purposes 
82.33 	relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; 
82.34 	(B) "property taxes" excludes the state general tax; 
82.35 	(C) a "nonprofit community service oriented organization" means any corporation, 
82.36 	society, association, foundation, or institution organized and operated exclusively for 
83.1 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt 
83.2 	from federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal 
83.3 	Revenue Code; and 
83.4 	(D) "revenue-producing activities" shall include but not be limited to property or that 
83.5 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
83.6 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
83.7 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
83.8 	insurance business, or office or other space leased or rented to a lessee who conducts a 
83.9 	for-profit enterprise on the premises. 
83.10 	Any portion of the property qualifying under item (i) which is used for revenue-producing 
83.11 	activities for more than six days in the calendar year preceding the year of assessment 
83.12 	shall be assessed as class 3a. The use of the property for social events open exclusively 
83.13 	to members and their guests for periods of less than 24 hours, when an admission is 
83.14 	not charged nor any revenues are received by the organization shall not be considered a 
83.15 	revenue-producing activity. 
83.16 	The organization shall maintain records of its charitable contributions and donations 
83.17 	and of public meetings and events held on the property and make them available upon 
83.18 	request any time to the assessor to ensure eligibility. An organization meeting the 
83.19 	requirement under item (ii) must file an application by May 1 with the assessor for 
83.20 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
83.21 	application form and instructions; 
83.22 	(4) postsecondary student housing of not more than one acre of land that is owned by 
83.23 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
83.24 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
83.25 	miles of the border of a college campus; 
83.26 	(5) manufactured home parks as defined in section 327.14, subdivision 3; 
83.27 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
83.28 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
83.29 	and is located within the metropolitan area as defined in section 473.121, subdivision 2; 
83.30 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
83.31 	under section 272.01, subdivision 2, and the land on which it is located, provided that: 
83.32 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
83.33 	Airports Commission, or group thereof; and 
83.34 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
83.35 	leased premise, prohibits commercial activity performed at the hangar. 
84.1 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
84.2 	be filed by the new owner with the assessor of the county where the property is located 
84.3 	within 60 days of the sale; 
84.4 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
84.5 	section 272.01, subdivision 2, and the land on which it is located, provided that: 
84.6 	(i) the land abuts a public airport; and 
84.7 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
84.8 	agreement restricting the use of the premises, prohibiting commercial use or activity 
84.9 	performed at the hangar; and 
84.10 	(9) residential real estate, a portion of which is used by the owner for homestead 
84.11 	purposes, and that is also a place of lodging, if all of the following criteria are met: 
84.12 	(i) rooms are provided for rent to transient guests that generally stay for periods 
84.13 	of 14 or fewer days; 
84.14 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
84.15 	in the basic room rate; 
84.16 	(iii) meals are not provided to the general public except for special events on fewer 
84.17 	than seven days in the calendar year preceding the year of the assessment; and 
84.18 	(iv) the owner is the operator of the property.
84.19 	The market value subject to the 4c classification under this clause is limited to five rental 
84.20 	units. Any rental units on the property in excess of five, must be valued and assessed as 
84.21 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
84.22 	be classified as class 1a property under subdivision 22; and
84.23 	(10) real property up to a maximum of three acres and operated as a restaurant 
84.24 	as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 
84.25 	as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 
84.26 	is either devoted to commercial purposes for not more than 250 consecutive days, or 
84.27 	receives at least 60 percent of its annual gross receipts from business conducted during 
84.28 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
84.29 	included in determining the property's qualification under subitem (B). The property's 
84.30 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
84.31 	sales located on the premises must be excluded. Owners of real property desiring 4c 
84.32 	classification under this clause must submit an annual declaration to the assessor by 
84.33 	February 1 of the current assessment year, based on the property's relevant information for 
84.34 	the preceding assessment year; and
84.35 	 (11) lakeshore and riparian property and adjacent land, not to exceed five acres, used 
84.36 	as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to the 
85.1 	public and devoted to recreational use for marina services. Buildings used in conjunction 
85.2 	with a marina for marina services, including but not limited to buildings used to provide 
85.3 	food and beverage services, fuel, boat repairs, or the sale of bait or fishing tackle are 
85.4 	classified as class 3a property.
85.5 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
85.6 	parcel of seasonal residential recreational property not used for commercial purposes has 
85.7 	the same class rates as class 4bb property, (ii) manufactured home parks assessed under 
85.8 	clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 
85.9 	residential recreational property and marina recreational land as described in clause (11), 
85.10 	has a class rate of one percent for the first $500,000 of market value, and 1.25 percent for 
85.11 	the remaining market value, (iv) the market value of property described in clause (4) has a 
85.12 	class rate of one percent, (v) the market value of property described in clauses (2), (6), and 
85.13 	(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property 
85.14 	in clause (9) qualifying for class 4c property has a class rate of 1.25 percent. 
85.15 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
85.16 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
85.17 	of the units in the building qualify as low-income rental housing units as certified under 
85.18 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
85.19 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
85.20 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
85.21 	land as the qualifying low-income rental housing units are to the total units in the building. 
85.22 	For all properties qualifying as class 4d, the market value determined by the assessor must 
85.23 	be based on the normal approach to value using normal unrestricted rents. 
85.24 	Class 4d property has a class rate of 0.75 percent. 

85.25 	EFFECTIVE DATE. This section is effective for assessment year 2009, taxes 
85.26 	payable in 2010, and thereafter. For assessment year 2009 only, the January 15 application 
85.27 	date under paragraph (d), clause (1), is extended to July 1, 2009, for property initially 
85.28 	qualifying for the 2009 assessment under paragraph (d), clause (1), item (iii).

85.29 	Sec. 20. Minnesota Statutes 2008, section 275.025, subdivision 1, is amended to read:
85.30 		Subdivision 1.Levy amount. The state general levy is levied against 
85.31 	commercial-industrial property and seasonal residential recreational property, as defined in 
85.32 	this section. The state general levy base amount is $592,000,000 tax is imposed for taxes 
85.33 	payable in 2002 2010 and subsequent years at the rate of the tax on commercial-industrial 
85.34 	property payable under this section in 2003. For taxes payable in subsequent years, 
85.35 	the levy base amount is increased each year by multiplying the levy base amount for 
86.1 	the prior year by the sum of one plus the rate of increase, if any, in the implicit price 
86.2 	deflator for government consumption expenditures and gross investment for state and 
86.3 	local governments prepared by the Bureau of Economic Analysts of the United States 
86.4 	Department of Commerce for the 12-month period ending March 31 of the year prior to the 
86.5 	year the taxes are payable. The tax under this section is not treated as a local tax rate under 
86.6 	section 469.177 and is not the levy of a governmental unit under chapters 276A and 473F.
86.7 	The commissioner shall increase or decrease the preliminary or final rate for a year 
86.8 	as necessary to account for errors and tax base changes that affected a preliminary or final 
86.9 	rate for either of the two preceding years. Adjustments are allowed to the extent that the 
86.10 	necessary information is available to the commissioner at the time the rates for a year must 
86.11 	be certified, and for the following reasons:
86.12 	(1) an erroneous report of taxable value by a local official;
86.13 	(2) an erroneous calculation by the commissioner; and
86.14 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
86.15 	residential recreational property reported on the abstracts of tax lists submitted under 
86.16 	section 275.29 that was not reported on the abstracts of assessment submitted under 
86.17 	section 270C.89 for the same year.
86.18 	The commissioner may, but need not, make adjustments if the total difference in the tax 
86.19 	levied for the year would be less than $100,000.

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

86.21 	Sec. 21. Minnesota Statutes 2008, section 275.025, subdivision 4, is amended to read:
86.22 		Subd. 4.Apportionment and levy of state general tax. Ninety-five percent of
86.23 	The state general tax must be levied by applying a uniform the rate determined under 
86.24 	subdivision 1 to all commercial-industrial tax capacity and five percent of the state general 
86.25 	tax must be levied by applying a uniform rate to all seasonal residential recreational tax 
86.26 	capacity. On or before October 1 each year, the commissioner of revenue shall certify the 
86.27 	preliminary state general levy rates to each county auditor that must be used to prepare the 
86.28 	notices of proposed property taxes for taxes payable in the following year. By January 1 
86.29 	of each year, the commissioner shall certify the final state general levy rate to each county 
86.30 	auditor that shall be used in spreading taxes.

86.31 	EFFECTIVE DATE. This section is effective for taxes payable 2010.

86.32 	Sec. 22. Minnesota Statutes 2008, section 275.065, subdivision 1, is amended to read:
87.1 		Subdivision 1.Proposed levy. (a) Notwithstanding any law or charter to the 
87.2 	contrary, on or before September 15, each taxing authority, other than a school district, 
87.3 	shall adopt a proposed budget and shall certify to the county auditor the proposed or, in 
87.4 	the case of a town, the final property tax levy for taxes payable in the following year.
87.5 	(b) On or before September 30, each school district that has not mutually agreed 
87.6 	with its home county to extend this date shall certify to the county auditor the proposed 
87.7 	property tax levy for taxes payable in the following year. Each school district that has 
87.8 	agreed with its home county to delay the certification of its proposed property tax levy 
87.9 	must certify its proposed property tax levy for the following year no later than October 
87.10 	7. The school district shall certify the proposed levy as:
87.11 	(1) a specific dollar amount by school district fund, broken down between 
87.12 	voter-approved and non-voter-approved levies and between referendum market value 
87.13 	and tax capacity levies; or
87.14 	(2) the maximum levy limitation certified by the commissioner of education 
87.15 	according to section 126C.48, subdivision 1.
87.16 	(c) If the board of estimate and taxation or any similar board that establishes 
87.17 	maximum tax levies for taxing jurisdictions within a first class city certifies the maximum 
87.18 	property tax levies for funds under its jurisdiction by charter to the county auditor by 
87.19 	September 15, the city shall be deemed to have certified its levies for those taxing 
87.20 	jurisdictions.
87.21 	(d) For purposes of this section, "taxing authority" includes all home rule and 
87.22 	statutory cities, towns, counties, school districts, and special taxing districts as defined 
87.23 	in section 275.066. Intermediate school districts that levy a tax under chapter 124 or 
87.24 	136D, joint powers boards established under sections 123A.44 to 123A.446, and Common 
87.25 	School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing 
87.26 	districts for purposes of this section.
87.27 	(e) At the meeting at which the taxing authority, other than a town, adopts its 
87.28 	proposed tax levy under paragraph (a) or (b), the taxing authority shall announce the time 
87.29 	and place of its subsequent regularly scheduled meetings at which the budget and levy will 
87.30 	be discussed and at which the public will be allowed to speak. The time and place of those 
87.31 	meetings must be included in the proceedings or summary of proceedings published in the 
87.32 	official newspaper of the taxing authority under sections 123B.09, 375.12, or 412.191.

87.33 	Sec. 23. Minnesota Statutes 2008, section 275.065, subdivision 3, is amended to read:
87.34 		Subd. 3.Notice of proposed property taxes. (a) The county auditor shall prepare 
87.35 	and the county treasurer shall deliver after November 10 and on or before November 24 
88.1 	each year, by first class mail to each taxpayer at the address listed on the county's current 
88.2 	year's assessment roll, a notice of proposed property taxes. Upon written request by 
88.3 	the taxpayer, the treasurer may send the notice in electronic form or by electronic mail 
88.4 	instead of on paper or by ordinary mail.
88.5 	(b) The commissioner of revenue shall prescribe the form of the notice.
88.6 	(c) The notice must inform taxpayers that it contains the amount of property taxes 
88.7 	each taxing authority proposes to collect for taxes payable the following year. In the 
88.8 	case of a town, or in the case of the state general tax, the final tax amount will be its 
88.9 	proposed tax. In the case of taxing authorities required to hold a public meeting under 
88.10 	subdivision 6, the notice must clearly state that each taxing authority, including regional 
88.11 	library districts established under section 134.201, and including the metropolitan taxing 
88.12 	districts as defined in paragraph (i), but excluding all other special taxing districts and 
88.13 	towns, will hold a public meeting to receive public testimony on the proposed budget and 
88.14 	proposed or final property tax levy, or, in case of a school district, on the current budget 
88.15 	and proposed property tax levy.The notice must clearly state for each city, county, school 
88.16 	district, regional library authority established under section 134.201, and metropolitan 
88.17 	taxing districts as defined in paragraph (i), the time and place of the taxing authorities' 
88.18 	regularly scheduled meetings in which the budget and levy will be discussed and the final 
88.19 	budget and levy determined, which must occur after November 24. The taxing authorities 
88.20 	must provide the county auditor with the information to be included in the notice on or 
88.21 	before the time it certifies its proposed levy under subdivision 1. The public must be 
88.22 	allowed to speak at the meetings. It must clearly state the time and place of each taxing 
88.23 	authority's meeting, provide a telephone number for the taxing authority that taxpayers 
88.24 	may call if they have questions related to the notice, and an address where comments 
88.25 	will be received by mail.
88.26 	(d) The notice must state for each parcel:
88.27 	(1) the market value of the property as determined under section 273.11, and used 
88.28 	for computing property taxes payable in the following year and for taxes payable in the 
88.29 	current year as each appears in the records of the county assessor on November 1 of the 
88.30 	current year; and, in the case of residential property, whether the property is classified as 
88.31 	homestead or nonhomestead. The notice must clearly inform taxpayers of the years to 
88.32 	which the market values apply and that the values are final values;
88.33 	(2) the items listed below, shown separately by county, city or town, and state general 
88.34 	tax, net of the residential and agricultural homestead credit under section 273.1384, voter 
88.35 	approved school levy, other local school levy, and the sum of the special taxing districts, 
88.36 	and as a total of all taxing authorities:
89.1 	(i) the actual tax for taxes payable in the current year; and
89.2 	(ii) the proposed tax amount.
89.3 	If the county levy under clause (2) includes an amount for a lake improvement 
89.4 	district as defined under sections 103B.501 to 103B.581, the amount attributable for that 
89.5 	purpose must be separately stated from the remaining county levy amount.
89.6 	In the case of a town or the state general tax, the final tax shall also be its proposed 
89.7 	tax unless the town changes its levy at a special town meeting under section 365.52. If a 
89.8 	school district has certified under section 126C.17, subdivision 9, that a referendum will 
89.9 	be held in the school district at the November general election, the county auditor must 
89.10 	note next to the school district's proposed amount that a referendum is pending and that, if 
89.11 	approved by the voters, the tax amount may be higher than shown on the notice. In the 
89.12 	case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be 
89.13 	listed separately from the remaining amount of the city's levy. In the case of the city of 
89.14 	St. Paul, the levy for the St. Paul Library Agency must be listed separately from the 
89.15 	remaining amount of the city's levy. In the case of Ramsey County, any amount levied 
89.16 	under section 134.07 may be listed separately from the remaining amount of the county's 
89.17 	levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax 
89.18 	under chapter 276A or 473F applies, the proposed tax levy on the captured value or the 
89.19 	proposed tax levy on the tax capacity subject to the areawide tax must each be stated 
89.20 	separately and not included in the sum of the special taxing districts; and
89.21 	(3) the increase or decrease between the total taxes payable in the current year and 
89.22 	the total proposed taxes, expressed as a percentage.
89.23 	For purposes of this section, the amount of the tax on homesteads qualifying under 
89.24 	the senior citizens' property tax deferral program under chapter 290B is the total amount 
89.25 	of property tax before subtraction of the deferred property tax amount.
89.26 	(e) The notice must clearly state that the proposed or final taxes do not include 
89.27 	the following:
89.28 	(1) special assessments;
89.29 	(2) levies approved by the voters after the date the proposed taxes are certified, 
89.30 	including bond referenda and school district levy referenda;
89.31 	(3) a levy limit increase approved by the voters by the first Tuesday after the first 
89.32 	Monday in November of the levy year as provided under section 275.73;
89.33 	(4) amounts necessary to pay cleanup or other costs due to a natural disaster 
89.34 	occurring after the date the proposed taxes are certified;
89.35 	(5) (4) amounts necessary to pay tort judgments against the taxing authority that 
89.36 	become final after the date the proposed taxes are certified; and
90.1 	(6) (5) the contamination tax imposed on properties which received market value 
90.2 	reductions for contamination.
90.3 	(f) Except as provided in subdivision 7, failure of the county auditor to prepare or 
90.4 	the county treasurer to deliver the notice as required in this section does not invalidate the 
90.5 	proposed or final tax levy or the taxes payable pursuant to the tax levy.
90.6 	(g) If the notice the taxpayer receives under this section lists the property as 
90.7 	nonhomestead, and satisfactory documentation is provided to the county assessor by the 
90.8 	applicable deadline, and the property qualifies for the homestead classification in that 
90.9 	assessment year, the assessor shall reclassify the property to homestead for taxes payable 
90.10 	in the following year.
90.11 	(h) In the case of class 4 residential property used as a residence for lease or rental 
90.12 	periods of 30 days or more, the taxpayer must either:
90.13 	(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, 
90.14 	renter, or lessee; or
90.15 	(2) post a copy of the notice in a conspicuous place on the premises of the property.
90.16 	The notice must be mailed or posted by the taxpayer by November 27 or within 
90.17 	three days of receipt of the notice, whichever is later. A taxpayer may notify the county 
90.18 	treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to 
90.19 	which the notice must be mailed in order to fulfill the requirements of this paragraph.
90.20 	(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special 
90.21 	taxing districts" means the following taxing districts in the seven-county metropolitan area 
90.22 	that levy a property tax for any of the specified purposes listed below:
90.23 	(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 
90.24 	473.446, 473.521, 473.547, or 473.834;
90.25 	(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; 
90.26 	and 
90.27 	(3) Metropolitan Mosquito Control Commission under section 473.711.
90.28 	For purposes of this section, any levies made by the regional rail authorities in the 
90.29 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
90.30 	398A shall be included with the appropriate county's levy and shall be discussed at that 
90.31 	county's public hearing.
90.32 	(j) The governing body of a county, city, or school district may, with the consent 
90.33 	of the county board, include supplemental information with the statement of proposed 
90.34 	property taxes about the impact of state aid increases or decreases on property tax 
90.35 	increases or decreases and on the level of services provided in the affected jurisdiction. 
90.36 	This supplemental information may include information for the following year, the current 
91.1 	year, and for as many consecutive preceding years as deemed appropriate by the governing 
91.2 	body of the county, city, or school district. It may include only information regarding:
91.3 	(1) the impact of inflation as measured by the implicit price deflator for state and 
91.4 	local government purchases;
91.5 	(2) population growth and decline;
91.6 	(3) state or federal government action; and
91.7 	(4) other financial factors that affect the level of property taxation and local services 
91.8 	that the governing body of the county, city, or school district may deem appropriate to 
91.9 	include.
91.10 	The information may be presented using tables, written narrative, and graphic 
91.11 	representations and may contain instruction toward further sources of information or 
91.12 	opportunity for comment.

91.13 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
91.14 	thereafter.

91.15 	Sec. 24. Minnesota Statutes 2008, section 275.065, subdivision 5a, is amended to read:
91.16 		Subd. 5a.Public advertisement. (a) Except for property taxes levied in 2009 and 
91.17 	2010, a city that has a population of more than 2,500, county, a metropolitan special taxing 
91.18 	district as defined in subdivision 3, paragraph (i), a regional library district established 
91.19 	under section 134.201, or school district shall advertise in a newspaper a notice of its 
91.20 	intent to adopt a budget and property tax levy or, in the case of a school district, to review 
91.21 	its current budget and proposed property taxes payable in the following year, at a public 
91.22 	hearing, if a public hearing is required under subdivision 6. The notice must be published 
91.23 	not less than two business days nor more than six business days before the hearing.
91.24 	The advertisement must be at least one-eighth page in size of a standard-size or a 
91.25 	tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper 
91.26 	where legal notices and classified advertisements appear. The advertisement must be 
91.27 	published in an official newspaper of general circulation in the taxing authority. The 
91.28 	newspaper selected must be one of general interest and readership in the community, and 
91.29 	not one of limited subject matter. The advertisement must appear in a newspaper that is 
91.30 	published at least once per week.
91.31 	For purposes of this section, the metropolitan special taxing district's advertisement 
91.32 	must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer 
91.33 	Press.
91.34 	In addition to other requirements, a county and a city having a population of 
91.35 	more than 2,500 must show in the public advertisement required under this subdivision 
92.1 	the current local tax rate, the proposed local tax rate if no property tax levy increase 
92.2 	is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this 
92.3 	subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by 
92.4 	the city's or county's taxable net tax capacity.
92.5 	(b) Subject to the provisions of paragraph (g), the advertisement for school districts, 
92.6 	metropolitan special taxing districts, and regional library districts must be in the following 
92.7 	form, except that the notice for a school district may include references to the current 
92.8 	budget in regard to proposed property taxes.
92.9 	"NOTICE OF
92.10 	PROPOSED PROPERTY TAXES
92.11 	(School District/Metropolitan
92.12 	Special Taxing District/Regional
92.13 	Library District) of .........
92.14 	The governing body of ........ will soon hold budget hearings and vote on the property 
92.15 	taxes for (metropolitan special taxing district/regional library district services that will be 
92.16 	provided in (year)/school district services that will be provided in (year) and (year)).
92.17 	NOTICE OF PUBLIC HEARING:
92.18 	All concerned citizens are invited to attend a public hearing and express their opinions 
92.19 	on the proposed (school district/metropolitan special taxing district/regional library 
92.20 	district) budget and property taxes, or in the case of a school district, its current budget 
92.21 	and proposed property taxes, payable in the following year. The hearing will be held on 
92.22 	(Month/Day/Year) at (Time) at (Location, Address)."
92.23 	(c) Subject to the provisions of paragraph (g), the advertisement for cities and 
92.24 	counties must be in the following form.
92.25 	"NOTICE OF PROPOSED
92.26 	TOTAL BUDGET AND PROPERTY TAXES
92.27 	The (city/county) governing body or board of commissioners will hold a public hearing to 
92.28 	discuss the budget and to vote on the amount of property taxes to collect for services the 
92.29 	(city/county) will provide in (year).
92.30 	SPENDING: The total budget amounts below compare (city's/county's) (year) total actual 
92.31 	budget with the amount the (city/county) proposes to spend in (year).

92.32
92.33	(Year) Total Actual
Budget
	Proposed (Year) Budget
	Change from 
(Year)-(Year)
	
92.34		$
........			$
........			.....%
		
92.35 	TAXES: The property tax amounts below compare that portion of the current budget 
92.36 	levied in property taxes in (city/county) for (year) with the property taxes the (city/county) 
92.37 	proposes to collect in (year). 

93.1
93.2	(Year) Property Taxes
	Proposed (Year) Property
Taxes
	Change from 
(Year)-(Year)
	
93.3		$
........			$
........			.....%
		
93.4 	LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax 
93.5 	levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.

93.6
93.7	(Year) Tax Rate
	(Year) Tax Rate if NO 
Levy Increase
	(Year) Proposed Tax
Rate
	
93.8		........
			........
			........
		
93.9 	ATTEND THE PUBLIC HEARING
93.10 	All (city/county) residents are invited to attend the public hearing of the (city/county) to 
93.11 	express your opinions on the budget and the proposed amount of (year) property taxes. 
93.12 	The hearing will be held on:
93.13 	(Month/Day/Year/Time)
93.14 	(Location/Address)
93.15 	If the discussion of the budget cannot be completed, a time and place for continuing the 
93.16 	discussion will be announced at the hearing. You are also invited to send your written 
93.17 	comments to:
93.18 	(City/County)
93.19 	(Location/Address)"
93.20 	(d) For purposes of this subdivision, the budget amounts listed on the advertisement 
93.21 	mean:
93.22 	(1) for cities, the total government fund expenditures, as defined by the state auditor 
93.23 	under section 471.6965, less any expenditures for improvements or services that are 
93.24 	specially assessed or charged under chapter 429, 430, 435, or the provisions of any other 
93.25 	law or charter; and
93.26 	(2) for counties, the total government fund expenditures, as defined by the state 
93.27 	auditor under section 375.169, less any expenditures for direct payments to recipients or 
93.28 	providers for the human service aids listed below:
93.29 	(i) Minnesota family investment program under chapters 256J and 256K;
93.30 	(ii) medical assistance under sections 256B.041, subdivision 5, and 256B.19, 
93.31 	subdivision 1;
93.32 	(iii) general assistance medical care under section 256D.03, subdivision 6;
93.33 	(iv) general assistance under section 256D.03, subdivision 2;
93.34 	(v) Minnesota supplemental aid under section 256D.36, subdivision 1;
93.35 	(vi) preadmission screening under section 256B.0911, and alternative care grants 
93.36 	under section  256B.0913;
94.1 	(vii) general assistance medical care claims processing, medical transportation and 
94.2 	related costs under section 256D.03, subdivision 4;
94.3 	(viii) medical transportation and related costs under section 256B.0625, subdivisions 
94.4 	17 to 18a;
94.5 	(ix) group residential housing under section 256I.05, subdivision 8, transferred 
94.6 	from programs in clauses (iv) and (v); or
94.7 	(x) any successor programs to those listed in clauses (i) to (ix).
94.8 	(e) A city with a population of over 500 but not more than 2,500 that is required to 
94.9 	hold a public hearing under subdivision 6 must advertise by posted notice as defined in 
94.10 	section 645.12, subdivision 1. The advertisement must be posted at the time provided in 
94.11 	paragraph (a). It must be in the form required in paragraph (b).
94.12 	(f) For purposes of this subdivision, the population of a city is the most recent 
94.13 	population as determined by the state demographer under section 4A.02.
94.14 	(g) The commissioner of revenue shall annually prescribe the specific form and 
94.15 	format of the advertisements required under this subdivision, including such details as 
94.16 	font size and style, and spacing for the required items. The commissioner may prescribe 
94.17 	alternate and additional language for the advertisement for a taxing authority or for groups 
94.18 	of taxing authorities. At least two weeks before November 29 each year, the commissioner 
94.19 	shall provide a copy of the prescribed advertisements to the chairs of the committees of 
94.20 	the house of representatives and the senate with jurisdiction over taxes.

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

94.22 	Sec. 25. Minnesota Statutes 2008, section 275.065, subdivision 6, is amended to read:
94.23 		Subd. 6.Public hearing; Adoption of budget and levy. (a) For purposes of this 
94.24 	section, the following terms shall have the meanings given:
94.25 	(1) "Initial hearing" means the first and primary hearing held to discuss the taxing 
94.26 	authority's proposed budget and proposed property tax levy for taxes payable in the 
94.27 	following year, or, for school districts, the current budget and the proposed property tax 
94.28 	levy for taxes payable in the following year.
94.29 	(2) "Continuation hearing" means a hearing held to complete the initial hearing, if 
94.30 	the initial hearing is not completed on its scheduled date.
94.31 	(3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final 
94.32 	property tax levy, and, in the case of taxing authorities other than school districts, the final 
94.33 	budget, for taxes payable in the following year.
94.34 	(b) Between November 29 and December 20, the governing bodies of a city that has a 
94.35 	population over 500, county, metropolitan special taxing districts as defined in subdivision 
95.1 	3, paragraph (i), and regional library districts shall each hold an initial public hearing 
95.2 	to discuss and seek public comment on its final budget and property tax levy for taxes 
95.3 	payable in the following year, and the governing body of the school district shall hold an 
95.4 	initial public hearing to review its current budget and proposed property tax levy for taxes 
95.5 	payable in the following year. The metropolitan special taxing districts shall be required to 
95.6 	hold only a single joint initial public hearing, the location of which will be determined by 
95.7 	the affected metropolitan agencies. A city, county, metropolitan special taxing district as 
95.8 	defined in subdivision 3, paragraph (i), regional library district established under section 
95.9 	134.201, or school district is not required to hold a public hearing under this subdivision 
95.10 	unless its proposed property tax levy for taxes payable in the following year, as certified 
95.11 	under subdivision 1, has increased over its final property tax levy for taxes payable in the 
95.12 	current year by a percentage that is greater than the percentage increase in the implicit 
95.13 	price deflator for government consumption expenditures and gross investment for state 
95.14 	and local governments prepared by the Bureau of Economic Analysts of the United States 
95.15 	Department of Commerce for the 12-month period ending March 31 of the current year.
95.16 	(c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than 
95.17 	Saturday. No initial hearing may be held on a Sunday.
95.18 	(d) At the initial hearing under this subdivision, the percentage increase in property 
95.19 	taxes proposed by the taxing authority, if any, and the specific purposes for which property 
95.20 	tax revenues are being increased must be discussed. During the discussion, the governing 
95.21 	body shall hear comments regarding a proposed increase and explain the reasons for the 
95.22 	proposed increase. The public shall be allowed to speak and to ask questions. At the public 
95.23 	hearing, the school district must also provide and discuss information on the distribution 
95.24 	of its revenues by revenue source, and the distribution of its spending by program area.
95.25 	(e) If the initial hearing is not completed on its scheduled date, the taxing authority 
95.26 	must announce, prior to adjournment of the hearing, the date, time, and place for the 
95.27 	continuation of the hearing. The continuation hearing must be held at least five business 
95.28 	days but no more than 14 business days after the initial hearing. A continuation hearing 
95.29 	may not be held later than December 20 except as provided in paragraphs (f) and (g). 
95.30 	A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than 
95.31 	Saturday. No continuation hearing may be held on a Sunday.
95.32 	(f) The governing body of a county shall hold its initial hearing on the first Thursday 
95.33 	in December each year, and may hold additional initial hearings on other dates before 
95.34 	December 20 if necessary for the convenience of county residents. If the county needs a 
95.35 	continuation of its hearing, the continuation hearing shall be held on the third Tuesday 
96.1 	in December. If the third Tuesday in December falls on December 21, the county's 
96.2 	continuation hearing shall be held on Monday, December 20.
96.3 	(g) The metropolitan special taxing districts shall hold a joint initial public hearing 
96.4 	on the first Wednesday of December. A continuation hearing, if necessary, shall be held on 
96.5 	the second Wednesday of December even if that second Wednesday is after December 10.
96.6 	(h) The county auditor shall provide for the coordination of initial and continuation 
96.7 	hearing dates for all school districts and cities within the county to prevent conflicts under 
96.8 	clauses (i) and (j).
96.9 	(i) By August 10, each school board and the board of the regional library district 
96.10 	shall certify to the county auditors of the counties in which the school district or regional 
96.11 	library district is located the dates on which it elects to hold its initial hearing and any 
96.12 	continuation hearing. If a school board or regional library district does not certify these 
96.13 	dates by August 10, the auditor will assign the initial and continuation hearing dates. The 
96.14 	dates elected or assigned must not conflict with the initial and continuation hearing dates 
96.15 	of the county or the metropolitan special taxing districts.
96.16 	(j) By August 20, the county auditor shall notify the clerks of the cities within the 
96.17 	county of the dates on which school districts and regional library districts have elected to 
96.18 	hold their initial and continuation hearings. At the time a city certifies its proposed levy 
96.19 	under subdivision 1 it shall certify the dates on which it elects to hold its initial hearing and 
96.20 	any continuation hearing. Until September 15, the first and second Mondays of December 
96.21 	are reserved for the use of the cities. If a city does not certify its hearing dates by 
96.22 	September 15, the auditor shall assign the initial and continuation hearing dates. The dates 
96.23 	elected or assigned for the initial hearing must not conflict with the initial hearing dates 
96.24 	of the county, metropolitan special taxing districts, regional library districts, or school 
96.25 	districts within which the city is located. To the extent possible, the dates of the city's 
96.26 	continuation hearing should not conflict with the continuation hearing dates of the county, 
96.27 	metropolitan special taxing districts, regional library districts, or school districts within 
96.28 	which the city is located. This paragraph does not apply to cities of 500 population or less.
96.29 	(k) The county initial hearing date and the city, metropolitan special taxing district, 
96.30 	regional library district, and school district initial hearing dates must be designated on 
96.31 	the notices required under subdivision 3. The continuation hearing dates need not be 
96.32 	stated on the notices.
96.33 	(l) At a subsequent hearing, each county, school district, city over 500 population, 
96.34 	and metropolitan special taxing district may amend its proposed property tax levy 
96.35 	and must adopt a final property tax levy. Each county, city over 500 population, and 
96.36 	metropolitan special taxing district may also amend its proposed budget and must adopt a 
97.1 	final budget at the subsequent hearing. The final property tax levy must be adopted prior 
97.2 	to adopting the final budget. A school district is not required to adopt its final budget at the 
97.3 	subsequent hearing. The subsequent hearing of a taxing authority must be held on a date 
97.4 	subsequent to the date of the taxing authority's initial public hearing. If a continuation 
97.5 	hearing is held, the subsequent hearing must be held either immediately following the 
97.6 	continuation hearing or on a date subsequent to the continuation hearing. The subsequent 
97.7 	hearing may be held at a regularly scheduled board or council meeting or at a special 
97.8 	meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing 
97.9 	of a taxing authority does not have to be coordinated by the county auditor to prevent a 
97.10 	conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any 
97.11 	other taxing authority. All subsequent hearings must be held prior to five working days 
97.12 	after December 20 of the levy year. The date, time, and place of the subsequent hearing 
97.13 	must be announced at the initial public hearing or at the continuation hearing.
97.14 	(m) (a) The property tax levy certified under section 275.07 by a city of any 
97.15 	population, county, metropolitan special taxing district, regional library district, or school 
97.16 	district must not exceed the proposed levy determined under subdivision 1, except by an 
97.17 	amount up to the sum of the following amounts:
97.18 	(1) the amount of a school district levy whose voters approved a referendum to 
97.19 	increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after 
97.20 	the proposed levy was certified;
97.21 	(2) the amount of a city or county levy approved by the voters after the proposed 
97.22 	levy was certified;
97.23 	(3) the amount of a levy to pay principal and interest on bonds approved by the 
97.24 	voters under section 475.58 after the proposed levy was certified;
97.25 	(4) the amount of a levy to pay costs due to a natural disaster occurring after the 
97.26 	proposed levy was certified, if that amount is approved by the commissioner of revenue 
97.27 	under subdivision 6a;
97.28 	(5) the amount of a levy to pay tort judgments against a taxing authority that become 
97.29 	final after the proposed levy was certified, if the amount is approved by the commissioner 
97.30 	of revenue under subdivision 6a;
97.31 	(6) the amount of an increase in levy limits certified to the taxing authority by the 
97.32 	commissioner of education or the commissioner of revenue after the proposed levy was 
97.33 	certified; and
97.34 	(7) the amount required under section 126C.55; and
97.35 	(8) the levy to pay emergency debt certificates under section 475.755 authorized and 
97.36 	issued after the proposed levy was certified.
98.1 	(n) (b) This subdivision does not apply to towns and special taxing districts other 
98.2 	than regional library districts and metropolitan special taxing districts.
98.3 	(o) (c) Notwithstanding the requirements of this section, the employer is required to 
98.4 	meet and negotiate over employee compensation as provided for in chapter 179A.

98.5 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
98.6 	thereafter.

98.7 	Sec. 26. Minnesota Statutes 2008, section 275.16, is amended to read:
98.8 	275.16 COUNTY AUDITOR TO FIX AMOUNT OF LEVY.
98.9 	If any such municipality shall return to the county auditor a levy greater than 
98.10 	permitted by chapters 123A, 123B, 124D, 126C, and 136C, and sections 275.124 to 
98.11 	275.16, and 275.70 to 275.74, such county auditor shall extend only such amount of 
98.12 	taxes as the limitations herein prescribed will permit; provided, if such levy shall include 
98.13 	any levy for the payment of bonded indebtedness or judgments, such levies for bonded 
98.14 	indebtedness or judgments shall be extended in full, and the remainder of the levies shall 
98.15 	be reduced so that the total thereof, including levies for bonds and judgments, shall not 
98.16 	exceed such amount as the limitations herein prescribed will permit.

98.17 	EFFECTIVE DATE. This section is effective for taxes levied in 2009, payable 
98.18 	in 2010, and thereafter.

98.19 	Sec. 27. Minnesota Statutes 2008, section 275.62, subdivision 1, is amended to read:
98.20 		Subdivision 1.Report on taxes levied. The commissioner of revenue shall establish 
98.21 	procedures for the annual reporting of local government levies. Each local governmental 
98.22 	unit shall submit a report to the commissioner by December 30 of the year in which the 
98.23 	tax is levied. The report shall include, but is not limited to, information on the amount of 
98.24 	the tax levied by the governmental unit for the following purposes:
98.25 	(1) social services and related programs, which include taxes levied for the purposes 
98.26 	defined in Minnesota Statutes 1991 Supplement, section 275.50, subdivision 5, clauses 
98.27 	(a), (j), and (v);  
98.28 	(2) the amounts levied for each of the purposes listed in Minnesota Statutes 2008, 
98.29 	section 275.70, subdivision 5; and  
98.30 	(3) other levies, which include the taxes levied for all purposes not included in 
98.31 	clause (1), (2), or (3).

99.1 	EFFECTIVE DATE. This section is effective for taxes levied in 2009, payable 
99.2 	in 2010, and thereafter.

99.3 	Sec. 28. Minnesota Statutes 2008, section 279.01, subdivision 1, is amended to read:
99.4 		Subdivision 1. Due dates; penalties. Except as provided in subdivision 3 or 4, on 
99.5 	May 16 or 21 days after the postmark date on the envelope containing the property tax 
99.6 	statement, whichever is later, a penalty accrues and thereafter is charged upon all unpaid 
99.7 	taxes on real estate on the current lists in the hands of the county treasurer. The penalty is 
99.8 	at a rate of two percent on homestead property until May 31 and four percent on June 1. 
99.9 	The penalty on nonhomestead property is at a rate of four percent until May 31 and eight 
99.10 	percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days after 
99.11 	the postmark date on the envelope containing the property tax statements, whichever is 
99.12 	later, on commercial use real property used for seasonal residential recreational purposes 
99.13 	and classified as class 1c or 4c, and on other commercial use real property classified as 
99.14 	class 3a, provided that over 60 percent of the gross income earned by the enterprise on the 
99.15 	class 3a property is earned during the months of May, June, July, and August. In order for 
99.16 	the first half of the tax due on class 3a property to be paid after May 15 and before June 1, 
99.17 	or 21 days after the postmark date on the envelope containing the property tax statement, 
99.18 	whichever is later, without penalty, the owner of the property must attach an affidavit to the 
99.19 	payment attesting to compliance with the income provision of this subdivision. Thereafter, 
99.20 	for both homestead and nonhomestead property, on the first day of each month beginning 
99.21 	July 1, up to and including October 1 following, an additional penalty of one percent for 
99.22 	each month accrues and is charged on all such unpaid taxes provided that if the due date 
99.23 	was extended beyond May 15 as the result of any delay in mailing property tax statements 
99.24 	no additional penalty shall accrue if the tax is paid by the extended due date. If the tax is 
99.25 	not paid by the extended due date, then all penalties that would have accrued if the due 
99.26 	date had been May 15 shall be charged. When the taxes against any tract or lot exceed 
99.27 	$50 $250, one-half thereof may be paid prior to May 16 or 21 days after the postmark 
99.28 	date on the envelope containing the property tax statement, whichever is later; and, if so 
99.29 	paid, no penalty attaches; the remaining one-half may be paid at any time prior to October 
99.30 	16 following, without penalty; but, if not so paid, then a penalty of two percent accrues 
99.31 	thereon for homestead property and a penalty of four percent on nonhomestead property. 
99.32 	Thereafter, for homestead property, on the first day of November an additional penalty of 
99.33 	four percent accrues and on the first day of December following, an additional penalty of 
99.34 	two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead 
99.35 	property, on the first day of November and December following, an additional penalty of 
100.1 	four percent for each month accrues and is charged on all such unpaid taxes. If one-half of 
100.2 	such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope 
100.3 	containing the property tax statement, whichever is later, the same may be paid at any time 
100.4 	prior to October 16, with accrued penalties to the date of payment added, and thereupon 
100.5 	no penalty attaches to the remaining one-half until October 16 following. 
100.6 	This section applies to payment of personal property taxes assessed against 
100.7 	improvements to leased property, except as provided by section 277.01, subdivision 3. 
100.8 	A county may provide by resolution that in the case of a property owner that has 
100.9 	multiple tracts or parcels with aggregate taxes exceeding $50 $250, payments may be 
100.10 	made in installments as provided in this subdivision. 
100.11 	The county treasurer may accept payments of more or less than the exact amount of 
100.12 	a tax installment due. Payments must be applied first to the oldest installment that is due 
100.13 	but which has not been fully paid. If the accepted payment is less than the amount due, 
100.14 	payments must be applied first to the penalty accrued for the year or the installment being 
100.15 	paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum 
100.16 	payment required as a condition for filing an appeal under section 278.03 or any other law, 
100.17 	nor does it affect the order of payment of delinquent taxes under section 280.39. 

100.18 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
100.19 	thereafter.

100.20 	Sec. 29. Minnesota Statutes 2008, section 279.10, is amended to read:
100.21 	279.10 PUBLICATION CORRECTED.
100.22 	Immediately after preparing forms for printing such notice and list, and at least five 
100.23 	days before the first day for the publication thereof, every such publisher shall furnish 
100.24 	proof of the proposed publication to the county auditor for correction. When such the copy 
100.25 	has been corrected, the auditor shall return the same it to the printer, who shall publish it 
100.26 	as corrected. On the first day on which such the notice and list are published, the publisher 
100.27 	shall mail a copy of the newspaper containing the same the notice and list to the auditor. If 
100.28 	during the publication of the notice and list, or within ten days after the last publication 
100.29 	thereof, the auditor shall discover discovers that such the publication is invalid contains an 
100.30 	error, the auditor shall forthwith direct the publisher to republish the same as corrected
100.31 	publish the correct information for an additional period of two weeks. The auditor does 
100.32 	not have to direct the publisher to republish the entire list. The publisher, if not neglectful, 
100.33 	shall be is entitled to the same compensation as allowed by law for the original publication
101.1 	of the corrected information, but shall receive no further compensation therefor if such
101.2 	the republication is necessary by reason of the neglect of the publisher.

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

101.4 	Sec. 30. Minnesota Statutes 2008, section 360.0425, is amended to read:
101.5 	360.0425 GENERAL POWERS OF AUTHORITY. 
101.6 	An airport authority created under section 360.0426 has all the powers granted a 
101.7 	municipality under sections 360.032 to 360.046 360.074. 

101.8 	Sec. 31. Minnesota Statutes 2008, section 375.194, subdivision 5, is amended to read:
101.9 		Subd. 5.Determination of county tax rate. The eligible county's proposed and 
101.10 	final tax rates shall be determined by dividing the certified levy by the total taxable net tax 
101.11 	capacity, without regard to any abatements granted under this section. The county board 
101.12 	shall make available the estimated amount of the abatement at the public hearing under 
101.13 	section 275.065, subdivision 6.

101.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
101.15 	thereafter.

101.16 	Sec. 32. Minnesota Statutes 2008, section 383A.75, subdivision 3, is amended to read:
101.17 		Subd. 3.Duties. The committee is authorized to and shall meet from time to time 
101.18 	to make appropriate recommendations for the efficient and effective use of property tax 
101.19 	dollars raised by the jurisdictions for programs, buildings, and operations. In addition, 
101.20 	the committee shall:
101.21 	(1) identify trends and factors likely to be driving budget outcomes over the next 
101.22 	five years with recommendations for how the jurisdictions should manage those trends 
101.23 	and factors to increase efficiency and effectiveness;
101.24 	(2) agree, by October 1 of each year, on the appropriate level of overall property tax 
101.25 	levy for the three jurisdictions and publicly report such to the governing bodies of each 
101.26 	jurisdiction for ratification or modification by resolution; and
101.27 	(3) plan for the joint truth-in-taxation hearings under section 275.065, subdivision 
101.28 	8; and  
101.29 	(4) identify, by December 31 of each year, areas of the budget to be targeted in the 
101.30 	coming year for joint review to improve services or achieve efficiencies.
102.1 	In carrying out its duties, the committee shall consult with public employees of 
102.2 	each jurisdiction and with other stakeholders of the city, county, and school district, as 
102.3 	appropriate.

102.4 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
102.5 	thereafter.

102.6 	Sec. 33. Minnesota Statutes 2008, section 428A.101, is amended to read:
102.7 	428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER 
102.8 	GENERAL LAW.
102.9 	The establishment of a new special service district after June 30, 2009 2013, requires 
102.10 	enactment of a special law authorizing the establishment.

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

102.12 	Sec. 34. Minnesota Statutes 2008, section 428A.13, is amended by adding a 
102.13 	subdivision to read:
102.14 		Subd. 1a.Prerequisites for establishing. Prior to establishment of a housing 
102.15 	improvement area, the governing body of the city must:
102.16 	(1) provide full disclosure of public expenditures, as well as the terms of any loans, 
102.17 	bonds, or other financing arrangements for housing improvement area projects; and
102.18 	(2) ensure that all contracts for housing improvement projects are subject to section 
102.19 	471.345.

102.20 	Sec. 35. Minnesota Statutes 2008, section 428A.14, subdivision 1, is amended to read:
102.21 		Subdivision 1.Authority. Fees may be imposed by the implementing entity on the 
102.22 	housing units within the housing improvement area at a rate, term, or amount sufficient 
102.23 	to produce revenue required to provide housing improvements in the area to reimburse 
102.24 	the implementing entity for advances made to pay for the housing improvements or to 
102.25 	pay principal of, interest on, and premiums, if any, on bonds issued by the implementing 
102.26 	entity under section 428A.16. The fee can be imposed on the basis of the tax capacity of 
102.27 	the housing unit, or the total amount of square footage of the housing unit, or a method 
102.28 	determined by the council and specified in the resolution. If a fee is imposed on a basis 
102.29 	other than the tax capacity or square footage of the housing unit, the council must make 
102.30 	a finding that the alternative basis for the fee is a more equitable basis. Fees imposed 
102.31 	under this section must meet the standard for benefit to property as provided for special 
102.32 	assessments under chapter 429, and are subject to the same appeal processes provided 
103.1 	under chapter 429. Before the imposition of the fees, a hearing must be held and notice 
103.2 	must be published in the official newspaper at least seven days before the hearing and shall 
103.3 	be mailed at least seven days before the hearing to any housing unit owner subject to a fee. 
103.4 	For purposes of this section, the notice must also include:  
103.5 	(1) a statement that all interested persons will be given an opportunity to be heard at 
103.6 	the hearing regarding a proposed housing improvement fee;
103.7 	(2) the estimated cost of improvements including administrative costs to be paid for 
103.8 	in whole or in part by the fee imposed under the ordinance;
103.9 	(3) the amount to be charged against the particular property;
103.10 	(4) the right of the property owner to prepay the entire fee;
103.11 	(5) the number of years the fee will be in effect; and
103.12 	(6) a statement that the petition requirements of section 428A.12 have either been 
103.13 	met or do not apply to the proposed fee.  
103.14 	Within six months of the public hearing, the implementing entity may adopt a 
103.15 	resolution imposing a fee within the area not exceeding the amount expressed in the 
103.16 	notice issued under this section.
103.17 	Prior to adoption of the resolution approving the fee, the condominium associations 
103.18 	located in the housing improvement area shall submit to the implementing entity a 
103.19 	financial plan prepared by an independent third party, acceptable to the implementing 
103.20 	entity and associations, that provides for the associations to finance maintenance and 
103.21 	operation of the common elements in the condominium and a long-range plan to conduct 
103.22 	and finance capital improvements.

103.23 	Sec. 36. Minnesota Statutes 2008, section 428A.21, is amended to read:
103.24 	428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER 
103.25 	GENERAL LAW.
103.26 	The establishment of a new housing improvement area after June 30, 2009 2013, 
103.27 	requires enactment of a special law authorizing the establishment of the area.

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

103.29 	Sec. 37. Minnesota Statutes 2008, section 429.011, subdivision 2a, is amended to read:
103.30 		Subd. 2a.Municipality; certain counties. "Municipality" also includes the 
103.31 	following: 
103.32 	(1) a county in the case of construction, reconstruction, or improvement of a county 
103.33 	state-aid highway or;
104.1 	(2) a county highway as defined in section 160.02 including curbs and gutters and 
104.2 	storm sewers; 
104.3 	(3) a county exercising its powers and duties under section 444.075, subdivision 
104.4 	1; and
104.5 	(4) a county for expenses not paid for under section 403.113, subdivision 3, 
104.6 	paragraph (b), clause (3); and
104.7 	(5) a county in the case of the abatement of nuisances.

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

104.9 	Sec. 38. Minnesota Statutes 2008, section 446A.086, subdivision 8, is amended to read:
104.10 		Subd. 8.Tax levy for repayment. (a) With the approval of the authority, a 
104.11 	governmental unit may levy in the year the state makes a payment under this section an 
104.12 	amount up to the amount necessary to provide funds for the repayment of the amount paid 
104.13 	by the state plus interest through the date of estimated repayment by the governmental 
104.14 	unit. The proceeds of this levy may be used only for this purpose unless they exceed the 
104.15 	amount actually due. Any excess must be used to repay other state payments made under 
104.16 	this section or must be deposited in the debt redemption fund of the governmental unit. 
104.17 	The amount of aids to be reduced to repay the state are decreased by the amount levied.
104.18 	(b) If the state is not repaid in full for a payment made under this section by 
104.19 	November 30 of the calendar year following the year in which the state makes the 
104.20 	payment, the authority shall require the governmental unit to certify a property tax levy in 
104.21 	an amount up to the amount necessary to provide funds for repayment of the amount paid 
104.22 	by the state plus interest through the date of estimated repayment by the governmental unit. 
104.23 	To prevent undue hardship, the authority may allow the governmental unit to certify the 
104.24 	levy over a five-year period. The proceeds of the levy may be used only for this purpose 
104.25 	unless they are in excess of the amount actually due, in which case the excess must be used 
104.26 	to repay other state payments made under this section or must be deposited in the debt 
104.27 	redemption fund of the governmental unit. If the authority orders the governmental unit to 
104.28 	levy, the amount of aids reduced to repay the state are decreased by the amount levied.
104.29 	(c) A levy under this subdivision is an increase in the levy limits of the governmental 
104.30 	unit for purposes of section 275.065, subdivision 6, and must be explained as a specific 
104.31 	increase at the meeting required under that provision.

104.32 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
104.33 	thereafter.

105.1 	Sec. 39. Minnesota Statutes 2008, section 465.719, subdivision 9, is amended to read:
105.2 		Subd. 9.Application of other laws. A corporation created by a political subdivision 
105.3 	under this section must comply with every law that applies to the political subdivision, 
105.4 	as if the corporation is a part of the political subdivision, unless the resolution ratifying 
105.5 	creation of the corporation specifically exempts the corporation from part or all of a law. 
105.6 	If the resolution exempts the corporation from part or all of a law, the resolution must 
105.7 	make a detailed and specific finding as to why the corporation cannot fulfill its purpose if 
105.8 	the corporation is subject to that law. A corporation may not be exempted from chapter 
105.9 	13D, the Minnesota Open Meeting Law, sections 138.163 to 138.25, governing records 
105.10 	management, or chapter 13, the Minnesota Government Data Practices Act. Any affected 
105.11 	or interested person may bring an action in district court to void the resolution on the 
105.12 	grounds that the findings are not sufficiently detailed and specific, or that the corporation 
105.13 	can fulfill its purpose if it is subject to the law from which the resolution exempts the 
105.14 	corporation. Laws that apply to a political subdivision that also apply to a corporation 
105.15 	created by a political subdivision under this subdivision include, but are not limited to:  
105.16 	(1) chapter 13D, the Minnesota Open Meeting Law;
105.17 	(2) chapter 13, the Minnesota Government Data Practices Act;
105.18 	(3) section 471.345, the Uniform Municipal Contracting Law;  
105.19 	(4) sections 43A.17, limiting the compensation of employees based on the governor's 
105.20 	salary; 471.991 to 471.999, providing for equitable pay; and 465.72 and 465.722, 
105.21 	governing severance pay;  
105.22 	(5) section 275.065, providing for truth-in-taxation hearings. If any tax revenues of 
105.23 	the political subdivision will be appropriated to the corporation, the corporation's annual 
105.24 	operating and capital budgets must be included in the truth-in-taxation hearing of the 
105.25 	political subdivision that created the corporation;  
105.26 	(6) if the corporation issues debt, its debt is included in the political subdivision's 
105.27 	debt limit if it would be included if issued by the political subdivision, and issuance of the 
105.28 	debt is subject to the election and other requirements of chapter 475 and section 471.69;  
105.29 	(7) (6) section 471.895, prohibiting acceptance of gifts from interested parties, and 
105.30 	sections 471.87 to 471.89, relating to interests in contracts;  
105.31 	(8) (7) chapter 466, relating to municipal tort liability;
105.32 	(9) (8) chapter 118A, requiring deposit insurance or bond or pledged collateral for 
105.33 	deposits;
105.34 	(10) (9) chapter 118A, restricting investments;
105.35 	(11) (10) section 471.346, requiring ownership of vehicles to be identified;  
106.1 	(12) (11) sections 471.38 to 471.41, requiring claims to be in writing, itemized, and 
106.2 	approved by the governing board before payment can be made; and  
106.3 	(13) (12) the corporation cannot make advances of pay, make or guarantee loans to 
106.4 	employees, or provide in-kind benefits unless authorized by law.

106.5 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
106.6 	thereafter.

106.7 	Sec. 40. Minnesota Statutes 2008, section 469.053, is amended by adding a subdivision 
106.8 	to read:
106.9 		Subd. 4a.Seaway port authority levy. A levy made under this subdivision shall 
106.10 	replace the mandatory city levy under subdivision 4. A seaway port authority is a special 
106.11 	taxing district under section 275.066 and may levy a tax in any year for the benefit of the 
106.12 	seaway port authority. The tax must not exceed 0.01813 percent of taxable market value. 
106.13 	The county auditor shall distribute the proceeds of the property tax levy to the seaway 
106.14 	port authority.

106.15 	EFFECTIVE DATE. This section is effective for property taxes levied in 2009 and 
106.16 	thereafter, payable in 2010 and thereafter.

106.17 	Sec. 41. Minnesota Statutes 2008, section 473.121, is amended by adding a subdivision 
106.18 	to read:
106.19 		Subd. 37.Implicit price deflator. "Implicit price deflator" means the implicit 
106.20 	price deflator for government consumption expenditures and gross investment for state 
106.21 	and local governments prepared by the Bureau of Economic Analysis of the United States 
106.22 	Department of Commerce for the 12-month period ending March 31 of the levy year.

106.23 	Sec. 42. Minnesota Statutes 2008, section 473.13, subdivision 1, is amended to read:
106.24 		Subdivision 1.Budget. (a) On or before December 20 of each year, the council, 
106.25 	after the public hearing required in section 275.065, shall adopt a final budget covering its 
106.26 	anticipated receipts and disbursements for the ensuing year and shall decide upon the total 
106.27 	amount necessary to be raised from ad valorem tax levies to meet its budget. The budget 
106.28 	shall state in detail the expenditures for each program to be undertaken, including the 
106.29 	expenses for salaries, consultant services, overhead, travel, printing, and other items. The 
106.30 	budget shall state in detail the capital expenditures of the council for the budget year, based 
106.31 	on a five-year capital program adopted by the council and transmitted to the legislature. 
106.32 	After adoption of the budget and no later than five working days after December 20, the 
107.1 	council shall certify to the auditor of each metropolitan county the share of the tax to be 
107.2 	levied within that county, which must be an amount bearing the same proportion to the 
107.3 	total levy agreed on by the council as the net tax capacity of the county bears to the net tax 
107.4 	capacity of the metropolitan area. The maximum amount of any levy made for the purpose 
107.5 	of this chapter may not exceed the limits set by the statute authorizing the levy.  
107.6 	(b) Each even-numbered year the council shall prepare for its transit programs a 
107.7 	financial plan for the succeeding three calendar years, in half-year segments. The financial 
107.8 	plan must contain schedules of user charges and any changes in user charges planned or 
107.9 	anticipated by the council during the period of the plan. The financial plan must contain a 
107.10 	proposed request for state financial assistance for the succeeding biennium.
107.11 	(c) In addition, the budget must show for each year:
107.12 	(1) the estimated operating revenues from all sources including funds on hand at the 
107.13 	beginning of the year, and estimated expenditures for costs of operation, administration, 
107.14 	maintenance, and debt service;
107.15 	(2) capital improvement funds estimated to be on hand at the beginning of the year 
107.16 	and estimated to be received during the year from all sources and estimated cost of capital 
107.17 	improvements to be paid out or expended during the year, all in such detail and form as 
107.18 	the council may prescribe; and
107.19 	(3) the estimated source and use of pass-through funds.

107.20 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
107.21 	thereafter.

107.22 	Sec. 43. Minnesota Statutes 2008, section 473.167, subdivision 3, is amended to read:
107.23 		Subd. 3.Tax. The council may levy a tax on all taxable property in the metropolitan 
107.24 	area, as defined in section 473.121, to provide funds for loans made pursuant to 
107.25 	subdivisions 2 and 2a. This tax for the right-of-way acquisition loan fund shall be certified 
107.26 	by the council, levied, and collected in the manner provided by section 473.13. The tax 
107.27 	shall be in addition to that authorized by section 473.249 and any other law and shall not 
107.28 	affect the amount or rate of taxes which may be levied by the council or any metropolitan 
107.29 	agency or local governmental unit. The amount of the levy shall be as determined and 
107.30 	certified by the council, provided that the tax levied by the Metropolitan Council for the 
107.31 	right-of-way acquisition loan fund shall not exceed $2,828,379 for taxes payable in 2004 
107.32 	and $2,828,379 for taxes payable in 2005. The amount of the levy for taxes payable in 
107.33 	2006 and subsequent years shall not exceed the product of (1) the Metropolitan Council's 
107.34 	property tax levy limitation under this subdivision for the previous year, multiplied by 
108.1 	(2) one plus a percentage equal to the growth in the implicit price deflator as defined 
108.2 	in section 275.70, subdivision 2.  

108.3 	EFFECTIVE DATE. This section is effective for taxes levied in 2009, payable 
108.4 	in 2010, and thereafter.

108.5 	Sec. 44. Minnesota Statutes 2008, section 473.249, subdivision 1, is amended to read:
108.6 		Subdivision 1.Indexed limit. (a) The Metropolitan Council may levy a tax on all 
108.7 	taxable property in the metropolitan area defined in section 473.121 to provide funds for 
108.8 	the purposes of sections 473.121 to 473.249 and for the purpose of carrying out other 
108.9 	responsibilities of the council as provided by law. This tax for general purposes shall be 
108.10 	levied and collected in the manner provided by section 473.13.  
108.11 	(b) The property tax levied by the Metropolitan Council for general purposes shall 
108.12 	not exceed $10,522,329 for taxes payable in 2004 and $10,522,329 for taxes payable 
108.13 	in 2005.
108.14 	(c) The property tax levy limitation for general purposes for taxes payable in 2006 
108.15 	and subsequent years shall not exceed the product of: (1) the Metropolitan Council's 
108.16 	property tax levy limitation for general purposes for the previous year determined under 
108.17 	this subdivision multiplied by (2) one plus a percentage equal to the growth in the implicit 
108.18 	price deflator as defined in section 275.70, subdivision 2.  

108.19 	EFFECTIVE DATE. This section is effective for taxes levied in 2009, payable 
108.20 	in 2010, and thereafter.

108.21 	Sec. 45. Minnesota Statutes 2008, section 473.253, subdivision 1, is amended to read:
108.22 		Subdivision 1.Sources of funds. The council shall credit to the livable communities 
108.23 	demonstration account the revenues provided in this subdivision. This tax shall be levied 
108.24 	and collected in the manner provided by section 473.13. The levy shall not exceed the 
108.25 	following amount for the years specified:  
108.26 	(1) for taxes payable in 2004 and 2005, $8,259,070; and
108.27 	(2) for taxes payable in 2006 and subsequent years, the product of (i) the property 
108.28 	tax levy limit under this subdivision for the previous year multiplied by (ii) one plus a 
108.29 	percentage equal to the growth in the implicit price deflator as defined in section 275.70, 
108.30 	subdivision 2.  

108.31 	EFFECTIVE DATE. This section is effective for taxes levied in 2009, payable 
108.32 	in 2010, and thereafter.

109.1 	Sec. 46. Minnesota Statutes 2008, section 473F.08, subdivision 3, is amended to read:
109.2 		Subd. 3.Apportionment of levy. The county auditor shall apportion the levy 
109.3 	of each governmental unit in the auditor's county in the manner prescribed by this 
109.4 	subdivision. The auditor shall:
109.5 	(a) by August 20, determine the areawide portion of the levy for each governmental 
109.6 	unit by multiplying the local tax rate of the governmental unit for the preceding current
109.7 	levy year times the distribution value set forth in subdivision 2, clause (b); and
109.8 	(b) by September 5, determine the local portion of the current year's levy by 
109.9 	subtracting the resulting amount from clause (a) from the governmental unit's current 
109.10 	year's levy;
109.11 	(c) for determinations made under clause (a) in the case of school districts, for 
109.12 	taxes payable in 2002, exclude the general education tax rate and the portion of the 
109.13 	referendum tax rate attributable to the first $415 per pupil unit from the local tax rate for 
109.14 	the preceding levy year;
109.15 	(d) for determinations made under clause (a) in the case of the Metropolitan Council, 
109.16 	for taxes payable in 2002, exclude the transit operating tax rate from the local tax rate 
109.17 	for the preceding levy year; and
109.18 	(e) for determinations made under clause (a) in the case of transit opt-out cities, 
109.19 	for taxes payable in 2002, exclude the opt-out transit rate from the local tax rate for the 
109.20 	preceding levy year.

109.21 	EFFECTIVE DATE. This section is effective for taxes payable in 2014 and 
109.22 	subsequent years.

109.23 	Sec. 47. Minnesota Statutes 2008, section 473F.08, subdivision 5, is amended to read:
109.24 		Subd. 5.Areawide tax rate. (a) On or before August 25 February 5 of each year, 
109.25 	the county auditor shall certify to the administrative auditor that portion of the levy of 
109.26 	each governmental unit determined under subdivisions 3, clause (a), 3a, and 3b. The 
109.27 	administrative auditor shall then determine the areawide tax rate sufficient to yield an 
109.28 	amount equal to the sum of such levies from the areawide net tax capacity.
109.29 	(b) On or before September 1 February 10 of each year, the administrative auditor 
109.30 	shall certify the areawide tax rate to each of the county auditors.
109.31 	(c) For the purposes of the notice required under section 275.065, the deadline 
109.32 	for the certification under paragraph (a) is October 10 and the deadline for certification 
109.33 	under paragraph (b) is October 15.
109.34 	(d) For any governmental unit for which the county auditor has not yet determined 
109.35 	the local tax rate by January 31, the county auditor shall determine the areawide portion 
110.1 	of the levy based on an estimated tax rate. In the following year, the distribution levy 
110.2 	of the unit must be adjusted to correct for the difference between the distribution levy 
110.3 	actually received and the distribution levy that would have been received if the actual tax 
110.4 	rate had been used.

110.5 	EFFECTIVE DATE. This section is effective for taxes payable in 2014 and 
110.6 	subsequent years.

110.7 	Sec. 48. Minnesota Statutes 2008, section 475.58, subdivision 1, is amended to read:
110.8 		Subdivision 1. Approval by electors; exceptions. Obligations authorized by law or 
110.9 	charter may be issued by any municipality upon obtaining the approval of a majority of 
110.10 	the electors voting on the question of issuing the obligations, but an election shall not be 
110.11 	required to authorize obligations issued: 
110.12 	(1) to pay any unpaid judgment against the municipality; 
110.13 	(2) for refunding obligations; 
110.14 	(3) for an improvement or improvement program, which obligation is payable wholly 
110.15 	or partly from the proceeds of special assessments levied upon property specially benefited 
110.16 	by the improvement or by an improvement within the improvement program, or from tax 
110.17 	increments, as defined in section 469.174, subdivision 25, including obligations which are 
110.18 	the general obligations of the municipality, if the municipality is entitled to reimbursement 
110.19 	in whole or in part from the proceeds of such special assessments or tax increments and 
110.20 	not less than 20 percent of the cost of the improvement or the improvement program is to 
110.21 	be assessed against benefited property or is to be paid from the proceeds of federal grant 
110.22 	funds or a combination thereof, or is estimated to be received from tax increments; 
110.23 	(4) payable wholly from the income of revenue producing conveniences; 
110.24 	(5) under the provisions of a home rule charter which permits the issuance of 
110.25 	obligations of the municipality without election; 
110.26 	(6) under the provisions of a law which permits the issuance of obligations of a 
110.27 	municipality without an election; 
110.28 	(7) to fund pension or retirement fund or postemployment benefit liabilities pursuant 
110.29 	to section 475.52, subdivision 6; 
110.30 	(8) under a capital improvement plan under section 373.40; and
110.31 	(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if 
110.32 	the proceeds of the bonds are not used for a purpose prohibited under section 469.176, 
110.33 	subdivision 4g, paragraph (b); and 
110.34 	(10) under section 475.755. 

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

111.2 	Sec. 49. [475.755] EMERGENCY DEBT CERTIFICATES.
111.3 	(a) If at any time during a fiscal year beginning before January 1, 2012, the receipts 
111.4 	of a local government are reasonably expected to be reduced below the amount provided 
111.5 	in the local government's budget when the final property tax levy to be collected during 
111.6 	the fiscal year was certified and the receipts are insufficient to meet the expenses incurred 
111.7 	or to be incurred during the fiscal year, the governing body of the local government may 
111.8 	authorize and sell certificates of indebtedness to mature within two years or less from the 
111.9 	end of the fiscal year in which the certificates are issued. The maximum principal amount 
111.10 	of the certificates that it may issue in a fiscal year is limited to the expected reduction in 
111.11 	receipts plus the cost of issuance. The certificates may be issued in the manner and on 
111.12 	the terms the governing body determines by resolution. 
111.13 	(b) The governing body of the local government shall levy taxes for the payment of 
111.14 	principal and interest on the certificates in accordance with section 475.61.
111.15 	(c) The certificates are not to be included in the net debt of the issuing local 
111.16 	government. 
111.17 	(d) For purposes of this section, the following terms have the meanings given:
111.18 	(1) "Local government" means a statutory or home rule charter city, a town, or 
111.19 	a county.
111.20 	(2) "Receipts" includes the following amounts scheduled to be received by the 
111.21 	local government for the fiscal year from:
111.22 	(i) taxes;
111.23 	(ii) aid payments previously certified by the state to be paid to the local government;
111.24 	(iii) state reimbursement payments for property tax credits; and
111.25 	(iv) any other source.

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

111.27 	Sec. 50. Laws 1976, chapter 162, section 3, as amended by Laws 1991, chapter 167, 
111.28 	section 3, is amended to read:
111.29 	Sec. 3. COOPERATION.
 111.30 	The Red River watershed management board may cooperate with water management 
111.31 	and flood control authorities in Minnesota, North Dakota, South Dakota, and the province 
111.32 	of Manitoba and may enter into contracts, compacts and agreements which may be 
111.33 	necessary to insure integration of its projects, to control the effects of flooding or to assure 
111.34 	the beneficial use of water in the Red River basin. The Red River Watershed Management 
112.1 	Board may conduct its meetings at a public facility within the Red River basin, or within 
112.2 	the jurisdiction of an authority with which the Red River Watershed Management Board is 
112.3 	authorized to cooperate.

112.4 	Sec. 51. Laws 2001, First Special Session chapter 5, article 3, section 8, the effective 
112.5 	date, as amended by Laws 2005, chapter 151, article 3, section 19, and Laws 2006, chapter 
112.6 	259, article 4, section 20, is amended to read:
112.7 	EFFECTIVE DATE. This section is effective for taxes levied in 2002, payable in 
112.8 	2003, through taxes levied in 2011, payable in 2012 and thereafter. 

112.9 	Sec. 52. Laws 2008, chapter 366, article 6, section 9, the effective date, is amended to 
112.10 	read:

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

112.13 	Sec. 53. Laws 2008, chapter 366, article 6, section 10, the effective date, is amended to 
112.14 	read:

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

112.17 	Sec. 54. Laws 2009, chapter 12, article 2, section 5, subdivision 1, is amended to read:
112.18 		Subdivision 1.Definitions. (a) In this section, the terms defined in this subdivision 
112.19 	have the meanings given them.
112.20 	(b) "Conservation management plan" means a written document approved by the 
112.21 	soil and water conservation district providing a framework for site-specific healthy, 
112.22 	productive, and sustainable conservation resources. A conservation management plan 
112.23 	must include at least the following:
112.24 	(1) conservation management goals for the land;
112.25 	(2) a reliable field inventory of the individual conservation practices and cover types;
112.26 	(3) a description of the soil type and quality;
112.27 	(4) an aerial photo or map of the vegetation and other natural features of the land 
112.28 	clearly indicating the boundaries of the conservation land;
112.29 	(5) the proposed future conditions of the land;
112.30 	(6) prescriptions to meet proposed future conditions of the land;
112.31 	(7) a recommended timetable for implementing the prescribed practices; and
113.1 	(8) a legal description of the land encompassing the parcels included in the plan.
113.2 	(c) The Board of Water and Soil Resources shall develop and distribute guidance for 
113.3 	conservation management plan preparation and approval and provide a training course 
113.4 	for plan writers that consists of up to eight hours of instruction. The board may charge a 
113.5 	fee for the course.
113.6 	(d) The commissioner of revenue is the final arbiter of disputes arising over plan 
113.7 	approvals.
113.8 	(c) "Approved plan writers" are natural resource professionals who are 
113.9 	self-employed, employed by private companies or individuals, nonprofit organizations, 
113.10 	local units of government, or public agencies. Persons employed to write conservation 
113.11 	plans for soil and water conservation districts or federal agencies and University of 
113.12 	Minnesota extension agents are deemed to meet the standards required under this 
113.13 	subdivision. All other plan writers must have attended the training course provided by 
113.14 	the Board of Water and Soil Resources.

113.15 	Sec. 55. Laws 2009, chapter 12, article 2, section 5, subdivision 2, is amended to read:
113.16 		Subd. 2.Requirements. Class 2a or 2b property that had been assessed under 
113.17 	Minnesota Statutes 2006, section 273.111, or that is part of an agricultural homestead 
113.18 	under Minnesota Statutes, section 273.13, subdivision 23, paragraph (a), is entitled to 
113.19 	valuation and tax deferment under this section if:
113.20 	(1) the land consists of at least ten acres;
113.21 	(2) a conservation management plan for the land must be prepared by an approved 
113.22 	plan writer and implemented during the period in which the land is subject to valuation 
113.23 	and deferment under this section;
113.24 	(3) the land must be enrolled for a minimum of ten years; and
113.25 	(4) there are no delinquent property taxes on the land.
113.26 	Real estate may not be enrolled for valuation and deferment under this section 
113.27 	and Minnesota Statutes, sections 273.111, 273.112, or 273.117, or Minnesota Statutes, 
113.28 	chapter 290C, concurrently.
113.29 	No more than 50 percent of the total acreage of an agricultural homestead may be 
113.30 	class 2b property enrolled in this program.

113.31 	Sec. 56. CLOQUET AREA FIRE AND AMBULANCE SPECIAL TAXING 
113.32 	DISTRICT.
 113.33 		Subdivision 1.Agreement. The city of Cloquet and Perch Lake Township, by 
113.34 	resolution of each of their governing bodies, may establish the Cloquet Area Fire and 
114.1 	Ambulance Taxing District for the purpose of providing fire and ambulance services 
114.2 	throughout the district. In this section, "municipality" means home rule charter and 
114.3 	statutory cities, towns, and Indian tribes. The district may exercise all the powers relating 
114.4 	to fire and ambulance services of the municipalities that receive fire and ambulance 
114.5 	services from the district. Any other municipality that is contiguous to a municipality that 
114.6 	is a member of the district may join the district with the agreement of the municipalities 
114.7 	that comprise the district at the time of its application to join.
114.8 		Subd. 2.Board. The Cloquet Area Fire and Ambulance Taxing District Board is 
114.9 	governed by a board made up initially of one or more elected officials of the governing 
114.10 	body of each participating municipality in the proportions set out in the establishing 
114.11 	resolution, subject to change as provided in the district's charter, if any, or in the district's 
114.12 	bylaws. Each municipality's representatives serve at the pleasure of that municipality's 
114.13 	governing body.
114.14 		Subd. 3.Tax. The district board may impose a property tax on taxable property 
114.15 	in the district. This tax shall be imposed at a rate that does not exceed 0.2835 percent of 
114.16 	taxable market value for taxes payable in 2010. The board shall annually determine the 
114.17 	separate amounts of the levy that are attributable to the cost of providing fire services and 
114.18 	the cost of providing ambulance services. Costs for the provision of ambulance services 
114.19 	shall be levied against taxable property within the area of the district that receive the 
114.20 	services. Costs for the provision of fire services shall be levied against taxable property 
114.21 	within the area of the district that receive the services.
114.22 	When an additional municipality becomes a member of the district, the additional 
114.23 	cost of providing ambulance and fire services to that municipality will be determined by 
114.24 	the board and added to the maximum levy amount.
114.25 	Each county auditor of a county that contains a municipality subject to the tax under 
114.26 	this section must collect the tax and pay it to the Fire and Ambulance Special Taxing 
114.27 	District. The district may also impose other fees or charges as allowed by law for the 
114.28 	provision of fire and ambulance services.
114.29 		Subd. 4.Public indebtedness. The district may incur debt in the manner provided 
114.30 	for a municipality by Minnesota Statutes, chapter 475, when necessary to accomplish 
114.31 	its duties.
114.32 		Subd. 5.Withdrawal. Notice of intent to withdraw from participation in the district 
114.33 	may be given only in the month of January, with a minimum of twelve months notice of 
114.34 	intent to withdraw. Withdrawal becomes effective for taxes levied in the year when the 
114.35 	notice is given. The district and its members may develop and agree upon continuing 
114.36 	obligations after withdrawal of a municipality.

115.1 	EFFECTIVE DATE. This section is effective in Cloquet and Perch Lake Township 
115.2 	the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the 
115.3 	governing body of each.

115.4 	Sec. 57. PROPERTY TAX TREATMENT OF HORSE BREEDING AND HORSE 
115.5 	BOARDING PROPERTIES.
 115.6 		Subdivision 1.Study. In order to provide for the uniform assessment and 
115.7 	classification for property tax purposes of real property used for horse breeding and 
115.8 	horse boarding activities, the commissioner of revenue, in consultation with the 
115.9 	commissioner of agriculture, shall study the treatment of such properties under current 
115.10 	law. The commissioner must report by February 1, 2010, to the chairs and ranking 
115.11 	minority members of the taxes committees of the senate and the house of representatives, 
115.12 	summarizing the current treatment and making recommendations for needed or useful 
115.13 	law changes.
115.14 		Subd. 2.Appeals to the commissioner. A person who has a right, title, interest, or 
115.15 	lien in or upon property that had been classified as agricultural for property tax purposes 
115.16 	for taxes payable in 2009 based on the use of the land for breeding or boarding horses, 
115.17 	may appeal the classification of the land for taxes payable in 2010 to the commissioner 
115.18 	of revenue if the use of the land has not substantially changed. The appeal must be in 
115.19 	written form, and must be received by the commissioner before September 1, 2009. The 
115.20 	commissioner must resolve the appeal by issuance of a written order accompanied by a 
115.21 	statement of the commissioner's reasons for the order, on or before December 31, 2009. 
115.22 	When the commissioner issues an order, a copy must be sent to both the appellant and the 
115.23 	county assessor. The order is appealable in tax court only by the owner or taxpayer, and 
115.24 	only within 60 days of issuance.

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

115.26 	Sec. 58. ABATEMENTS FOR BUSINESSES WITH DISRUPTED ACCESS.
 115.27 	A governing body of a municipality may abate the taxes imposed by it, in whole or 
115.28 	in part, on the property of a business with an estimated market value of $250,000 or less, 
115.29 	if access to the property has been impeded for a period of more than three consecutive 
115.30 	months, resulting in loss of revenue to the business, due to a public transportation project 
115.31 	in the vicinity of the business.

115.32 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 or 
115.33 	thereafter.

116.1 	Sec. 59. REPORT BY ADMINISTRATIVE AUDITOR.
 116.2 	The administrative auditor selected pursuant to Minnesota Statutes, section 473F.03, 
116.3 	with the cooperation of the county auditors in the area defined by Minnesota Statutes, 
116.4 	section 473F.02, subdivision 2, shall develop a working model of the metropolitan revenue 
116.5 	distribution system that implements the changes to the system provided in sections 46 and 
116.6 	47. By February 1, 2012, the administrative auditor shall prepare a report to the chairs and 
116.7 	ranking minority members of the house of representatives and senate taxes committees 
116.8 	regarding the working model, including recommendations for amendments to Minnesota 
116.9 	Statutes, chapter 473F, that are needed in order to administer sections 46 and 47.

116.10 	Sec. 60. PURPOSE; COMMISSIONER GUIDANCE.
 116.11 	The purpose of section 6 is not to contract or expand the definition of "institutions 
116.12 	of purely public charity" but to provide clear standards that can be applied uniformly to 
116.13 	determine eligibility for exemption from property taxations. To carry out this purpose and 
116.14 	to promote uniformity in application of the provisions of this section and section 6, the 
116.15 	commissioner of revenue shall prepare a bulletin providing guidance to assessors as to the 
116.16 	commissioner's interpretation of section 6. The bulletin may include a discussion of court 
116.17 	decisions relevant to the requirements in section 6. This guidance must include examples 
116.18 	of facts or circumstances that satisfy the requirement of "a compelling factual reason for 
116.19 	failing to meet the factors in clause (2), (3), or (5)" under section 6. Assessors must 
116.20 	implement the guidance provided in the bulletin when assessing property for which an 
116.21 	exemption as an institution of purely public charity has been requested. The commissioner 
116.22 	shall distribute the bulletin to all assessors by July 1, 2010.

116.23 	Sec. 61.  REPEALER.
 116.24 	(a) Minnesota Statutes 2008, section 275.065, subdivisions 6b, 6c, 8, 9, and 10, are 
116.25 	repealed.
116.26 	(b) Minnesota Statutes 2008, sections 275.70; 275.71; 275.72; 275.73; 275.74; 
116.27 	and 275.75, are repealed.
116.28 	(c) Minnesota Statutes 2008, section 275.025, subdivision 3, is repealed.

116.29 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
116.30 	thereafter.

117.1 	ARTICLE 5
117.2 	AIDS AND CREDITS

117.3 	Section 1. Minnesota Statutes 2008, section 273.1384, subdivision 4, is amended to 
117.4 	read:
117.5 		Subd. 4.Payment. (a) The commissioner of revenue shall reimburse each local 
117.6 	taxing jurisdiction, other than school districts, for the tax reductions granted under this 
117.7 	section in two equal installments on October 31 and December 26 of the taxes payable 
117.8 	year for which the reductions are granted, including in each payment the prior year 
117.9 	adjustments certified on the abstracts for that taxes payable year. The reimbursements 
117.10 	related to tax increments shall be issued in one installment each year on December 26.
117.11 	(b) The commissioner of revenue shall certify the total of the tax reductions 
117.12 	granted under this section for each taxes payable year within each school district to the 
117.13 	commissioner of the Department of Education and the commissioner of education shall 
117.14 	pay the reimbursement amounts to each school district as provided in section 273.1392.
117.15 	(c) The market value credit reimbursements payable in 2010, 2011, and 2012 for 
117.16 	each city and each county under this section are reduced by the dollar amount of the 
117.17 	reduction in market value credit reimbursements for that city under section 477A.013, 
117.18 	subdivision 11, and for that county under section 477A.0124, subdivision 6. The payable 
117.19 	2010, 2011, or 2012 market value credit reimbursement for a city or county is not reduced 
117.20 	to less than zero by this paragraph.

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

117.22 	Sec. 2. Minnesota Statutes 2008, section 290A.23, subdivision 3, is amended to read:
117.23 		Subd. 3.Annual appropriation. For payments made after July 1, 1996, there is 
117.24 	annually appropriated from the general fund to the commissioner of revenue the amount 
117.25 	necessary to make the payments required under section 290A.04, subdivisions subdivision
117.26 	2 and 2h.  

117.27 	EFFECTIVE DATE. This section is effective for claims based on property taxes 
117.28 	payable in 2010 and thereafter.

117.29 	Sec. 3. Minnesota Statutes 2008, section 477A.011, subdivision 36, is amended to read:
117.30 		Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision, 
117.31 	"city aid base" is zero. 
118.1 	(b) The city aid base for any city with a population less than 500 is increased by 
118.2 	$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount 
118.3 	of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
118.4 	increased by $40,000 for aids payable in calendar year 1995 only, provided that: 
118.5 	(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent; 
118.6 	(ii) the city portion of the tax capacity rate exceeds 100 percent; and 
118.7 	(iii) its city aid base is less than $60 per capita. 
118.8 	(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and 
118.9 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
118.10 	paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that: 
118.11 	(i) the city has a population in 1994 of 2,500 or more; 
118.12 	(ii) the city is located in a county, outside of the metropolitan area, which contains a 
118.13 	city of the first class; 
118.14 	(iii) the city's net tax capacity used in calculating its 1996 aid under section 
118.15 	477A.013 is less than $400 per capita; and 
118.16 	(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of 
118.17 	property located in the city is classified as railroad property. 
118.18 	(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and 
118.19 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
118.20 	paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that: 
118.21 	(i) the city was incorporated as a statutory city after December 1, 1993; 
118.22 	(ii) its city aid base does not exceed $5,600; and 
118.23 	(iii) the city had a population in 1996 of 5,000 or more. 
118.24 	(e) The city aid base for a city is increased by $150,000 for aids payable in 2000 and 
118.25 	thereafter, and the maximum amount of total aid it may receive under section 477A.013, 
118.26 	subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only, 
118.27 	provided that: 
118.28 	(1) the city has a population that is greater than 1,000 and less than 2,500; 
118.29 	(2) its commercial and industrial percentage for aids payable in 1999 is greater 
118.30 	than 45 percent; and 
118.31 	(3) the total market value of all commercial and industrial property in the city 
118.32 	for assessment year 1999 is at least 15 percent less than the total market value of all 
118.33 	commercial and industrial property in the city for assessment year 1998. 
118.34 	(f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and 
118.35 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
118.36 	paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that: 
119.1 	(1) the city had a population in 1997 of 2,500 or more; 
119.2 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
119.3 	477A.013 is less than $650 per capita; 
119.4 	(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under 
119.5 	section 477A.013 is greater than 12 percent; 
119.6 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
119.7 	20 percent of the amount that the formula aid of the city would have been if the need 
119.8 	increase percentage was 100 percent; and 
119.9 	(5) the city aid base of the city used in calculating aid under section 477A.013 
119.10 	is less than $7 per capita. 
119.11 	(g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and 
119.12 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
119.13 	paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that: 
119.14 	(1) the city has a population in 1997 of 2,000 or more; 
119.15 	(2) the net tax capacity of the city used in calculating its 1999 aid under section 
119.16 	477A.013 is less than $455 per capita; 
119.17 	(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is 
119.18 	greater than $195 per capita; and 
119.19 	(4) the 1999 local government aid of the city under section 477A.013 is less than 
119.20 	38 percent of the amount that the formula aid of the city would have been if the need 
119.21 	increase percentage was 100 percent. 
119.22 	(h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and 
119.23 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
119.24 	paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that: 
119.25 	(1) the city has a population in 1998 that is greater than 200 but less than 500; 
119.26 	(2) the city's revenue need used in calculating aids payable in 2000 was greater 
119.27 	than $200 per capita; 
119.28 	(3) the city net tax capacity for the city used in calculating aids available in 2000 
119.29 	was equal to or less than $200 per capita; 
119.30 	(4) the city aid base of the city used in calculating aid under section 477A.013 
119.31 	is less than $65 per capita; and 
119.32 	(5) the city's formula aid for aids payable in 2000 was greater than zero. 
119.33 	(i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and 
119.34 	the maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
119.35 	paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that: 
119.36 	(1) the city had a population in 1998 that is greater than 200 but less than 500; 
120.1 	(2) the city's commercial industrial percentage used in calculating aids payable in 
120.2 	2000 was less than ten percent; 
120.3 	(3) more than 25 percent of the city's population was 60 years old or older according 
120.4 	to the 1990 census; 
120.5 	(4) the city aid base of the city used in calculating aid under section 477A.013 
120.6 	is less than $15 per capita; and 
120.7 	(5) the city's formula aid for aids payable in 2000 was greater than zero. 
120.8 	(j) The city aid base for a city is increased by $45,000 in 2001 and thereafter and 
120.9 	by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of 
120.10 	total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also 
120.11 	increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002 
120.12 	only, provided that: 
120.13 	(1) the net tax capacity of the city used in calculating its 2000 aid under section 
120.14 	477A.013 is less than $810 per capita; 
120.15 	(2) the population of the city declined more than two percent between 1988 and 1998; 
120.16 	(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is 
120.17 	greater than $240 per capita; and 
120.18 	(4) the city received less than $36 per capita in aid under section 477A.013, 
120.19 	subdivision 9, for aids payable in 2000. 
120.20 	(k) The city aid base for a city with a population of 10,000 or more which is located 
120.21 	outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the 
120.22 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
120.23 	paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to 
120.24 	the lesser of: 
120.25 	(1)(i) the total population of the city, as determined by the United States Bureau of 
120.26 	the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or 
120.27 	(2) $2,500,000. 
120.28 	(l) The city aid base is increased by $50,000 in 2002 and thereafter, and the 
120.29 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, 
120.30 	paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that: 
120.31 	(1) the city is located in the seven-county metropolitan area; 
120.32 	(2) its population in 2000 is between 10,000 and 20,000; and 
120.33 	(3) its commercial industrial percentage, as calculated for city aid payable in 2001, 
120.34 	was greater than 25 percent. 
120.35 	(m) The city aid base for a city is increased by $150,000 in calendar years 2002 to 
120.36 	2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum 
121.1 	amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is 
121.2 	also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year 
121.3 	2009 only, provided that: 
121.4 	(1) the city had a population of at least 3,000 but no more than 4,000 in 1999; 
121.5 	(2) its home county is located within the seven-county metropolitan area; 
121.6 	(3) its pre-1940 housing percentage is less than 15 percent; and 
121.7 	(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900 
121.8 	per capita. 
121.9 	(n) The city aid base for a city is increased by $200,000 beginning in calendar 
121.10 	year 2003 and the maximum amount of total aid it may receive under section 477A.013, 
121.11 	subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only, 
121.12 	provided that the city qualified for an increase in homestead and agricultural credit aid 
121.13 	under Laws 1995, chapter 264, article 8, section 18. 
121.14 	(o) The city aid base for a city is increased by $200,000 in 2004 only and the 
121.15 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 
121.16 	also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear 
121.17 	dry cask storage facility. 
121.18 	(p) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the 
121.19 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
121.20 	by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster 
121.21 	designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by 
121.22 	more than 40 percent between 1990 and 2000. 
121.23 	(q) The city aid base for a city is increased by $30,000 in 2009 and thereafter and the 
121.24 	minimum and maximum total aid it may receive under section 477A.013, subdivision 9, 
121.25 	is also increased by $25,000 $30,000 in calendar year 2006 2010 only if the city had a 
121.26 	population in 2003 of at least 1,000 and has a state park for which the city provides rescue 
121.27 	services and which comprised at least 14 percent of the total geographic area included 
121.28 	within the city boundaries in 2000. 
121.29 	(r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and 
121.30 	the minimum and maximum amount of total aid it may receive under section 477A.013, 
121.31 	subdivision 9, is also increased by $80,000 in calendar year 2009 only, if: 
121.32 	(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed 
121.33 	to be placed in trust status as tax-exempt Indian land; 
121.34 	(2) the placement of the land is being challenged administratively or in court; and 
121.35 	(3) due to the challenge, the land proposed to be placed in trust is still on the tax 
121.36 	rolls as of May 1, 2006. 
122.1 	(s) The city aid base for a city is increased by $100,000 in 2007 and thereafter and 
122.2 	the minimum and maximum total amount of aid it may receive under this section is also 
122.3 	increased in calendar year 2007 only, provided that: 
122.4 	(1) the city has a 2004 estimated population greater than 200 but less than 2,000; 
122.5 	(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita; 
122.6 	(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids 
122.7 	payable in 2006 was greater than 110 percent; and 
122.8 	(4) it is located in a county where at least 15,000 acres of land are classified as 
122.9 	tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property. 
122.10 	(t) The city aid base for a city is increased by $30,000 in 2009 only, and the 
122.11 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
122.12 	by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than 
122.13 	3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities 
122.14 	and one township in 2002. 
122.15 	(u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and 
122.16 	the maximum total aid it may receive under section 477A.013, subdivision 9, is also 
122.17 	increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for 
122.18 	aids payable in 2007 of less than $150 per capita and the city experienced flooding on 
122.19 	March 14, 2007, that resulted in evacuation of at least 40 homes.
122.20 	(v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the 
122.21 	maximum total aid it may receive under section 477A.013, subdivision 9, is also increased 
122.22 	by $100,000 in calendar year 2009 only, if the city:
122.23 	(1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical 
122.24 	area;
122.25 	(2) has a 2005 population greater than 7,000 but less than 8,000; and
122.26 	(3) has a 2005 net tax capacity per capita of less than $500.
122.27 	(w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the 
122.28 	maximum amount of total aid it may receive under section 477A.013, subdivision 9, is 
122.29 	increased by $25,000 in calendar year 2009 only, provided that:
122.30 	(1) the city is located in the seven-county metropolitan area;
122.31 	(2) its population in 2006 is less than 200; and 
122.32 	(3) the percentage of its housing stock built before 1940, according to the 2000 
122.33 	United States Census, is greater than 40 percent.
122.34 	(x) The city aid base is increased by $90,000 in calendar year 2009 only and the 
122.35 	minimum and maximum total amount of aid it may receive under section 477A.013, 
122.36 	subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the 
123.1 	city is located in the seven-county metropolitan area, has a 2006 population between 5,000 
123.2 	and 7,000 and has a 1997 population of over 7,000.
123.3 	(y) The city aid base is increased by $150,000 in calendar year 2010 only, and the 
123.4 	minimum and maximum total amount of aid it may receive under section 477A.013, 
123.5 	subdivision 9, is also increased by $150,000 in calendar year 2010 only, provided that the 
123.6 	city is located outside the seven-county metropolitan area, with a 2006 population greater 
123.7 	than 425 but less than 475, and has an adjusted net tax capacity per capita greater than 
123.8 	$900 based on the data used to certify the 2009 aid distribution.
123.9 	(z) The city aid base is increased by $163,036 in calendar years 2010 and 2011 
123.10 	only, and the minimum and maximum total amount of aid it may receive under section 
123.11 	477A.013, subdivision 9, is also increased by $163,036 in calendar years 2010 and 2011 
123.12 	only, provided that the city is located outside the seven-county metropolitan area, with a 
123.13 	2006 population greater than 3,500, had a pre-1940 housing percentage greater than 29 
123.14 	percent, a commercial-industrial percentage less than nine percent, and had a population 
123.15 	decline percentage of zero based on the data used to certify the 2009 aid distribution.

123.16 	Sec. 4. Minnesota Statutes 2008, section 477A.0124, is amended by adding a 
123.17 	subdivision to read:
123.18 		Subd. 6.Aid adjustments. For aid payable in 2010, 2011, and 2012 only, each 
123.19 	county's total distribution amount under this section is equal to its distribution amount 
123.20 	under this section for aid payable in each year prior to the reductions under section 
123.21 	477A.0133, minus an aid reduction amount equal to 0.5 percent of the county's levy plus 
123.22 	aid revenue base determined under section 477A.0133, subdivision 2, for the previous year.
123.23 	Each county's reduction amount for each year is limited to the sum of the county's 
123.24 	distributions under this section and section 273.1384 for that year before the reductions 
123.25 	under this paragraph.
123.26 	The aid reduction is applied first to the county's distributions under this section, and 
123.27 	then, if necessary, to reduce the county's reimbursements under section 273.1384.

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

123.29 	Sec. 5. Minnesota Statutes 2008, section 477A.013, is amended by adding a 
123.30 	subdivision to read:
123.31 		Subd. 11.2010, 2011, and 2012 city aid. For aid payable in 2010, 2011, and 2012 
123.32 	only, each city's distribution amount under subdivision 9 is reduced by an amount equal to 
123.33 	0.7 percent of the city's levy plus aid revenue base determined under section 477A.0133 
123.34 	for the previous year.
124.1 	The reduction is limited to the sum of the city's distribution under this section and 
124.2 	the city's reimbursement under section 273.1384 before the reductions in this subdivision.
124.3 	The reduction amount for each year is applied first to the city's distribution under 
124.4 	this section, and then, if necessary, to the city's reimbursements under section 273.1384 
124.5 	for that year.

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

124.7 	Sec. 6. [477A.0133] 2010, 2011, and 2012 CITY AND COUNTY AID 
124.8 	REDUCTIONS.
124.9 		Subdivision 1.City aid. The commissioner of revenue shall compute an aid 
124.10 	reduction amount for each city for aid payable in 2010, 2011, and 2012 equal to 0.7 
124.11 	percent of the city's levy plus aid revenue base for the previous year.
124.12 	The "levy plus aid revenue base" for a city is the sum of that city's certified property 
124.13 	tax levy for taxes payable in the previous year, plus the sum of the amounts the city was 
124.14 	certified to receive in the previous year as:
124.15 	(1) local government aid under section 477A.013; and
124.16 	(2) taconite aids under sections 298.28 and 298.282, including any aid which was 
124.17 	required to be placed in a special fund for expenditure in the next succeeding year.
124.18 	The reduction is limited to the sum of the city's payable distributions in each year, 
124.19 	prior to the reductions under this subdivision, under sections 273.1384 and 477A.013.
124.20 	The reduction is applied first to the city's distribution under section 477A.013, and 
124.21 	then, if necessary, to the city's reimbursements under section 273.1384.
124.22 	To the extent that sufficient information is available on each successive payment 
124.23 	date within the year, the commissioner of revenue shall pay any remaining distribution or 
124.24 	reimbursement amount that is reduced under this subdivision in equal installments on the 
124.25 	payment dates provided by law.
124.26 		Subd. 2.County aid. The commissioner of revenue shall compute an aid reduction 
124.27 	amount for each county for aid payable in 2010, 2011, and 2012 equal to 0.5 percent of the 
124.28 	county's levy plus aid revenue base for the previous year.
124.29 	The "levy plus aid revenue base" for a county is the sum of that county's certified 
124.30 	property tax levy for taxes payable in the previous year, plus the sum of the amounts the 
124.31 	county was certified to receive in the previous year as:
124.32 	(1) county program aid under section 477A.0124; and
124.33 	(2) taconite aids under sections 298.28 and 298.282, including any aid which was 
124.34 	required to be placed in a special fund for expenditure in the next succeeding year.
125.1 	The reduction is limited to the sum of the county's payable 2009 distributions under 
125.2 	sections 273.1384 and 477A.0124.
125.3 	The aid reduction is applied first to the county's distributions under section 
125.4 	477A.0124, and then, if necessary, to reduce the county's reimbursements under section 
125.5 	273.1384.
125.6 	To the extent that sufficient information is available on each payment date in each 
125.7 	year, the commissioner of revenue shall pay any remaining distribution or reimbursement 
125.8 	amount that is reduced under this section in equal installments on the payment dates 
125.9 	provided by law.

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

125.11 	Sec. 7.  REPEALER.
 125.12 	(a) Minnesota Statutes 2008, section 290A.04, subdivision 2h, is repealed.
125.13 	(b) Minnesota Statutes 2008, section 477A.16, is repealed.

125.14 	EFFECTIVE DATE. Paragraph (a) is effective for claims based on property taxes 
125.15 	payable in 2010. Paragraph (b) is effective for aids payable in 2010.

125.16 	ARTICLE 6
125.17 	LOCAL DEVELOPMENT

125.18 	Section 1. [414.023] INCORPORATIONS TEMPORARILY PROHIBITED.
125.19 	The chief administrative law judge must not order any municipal incorporations 
125.20 	after June 1, 2009, and before June 1, 2014.

125.21 	Sec. 2. Minnesota Statutes 2008, section 428A.01, subdivision 3, is amended to read:
125.22 		Subd. 3.Special services. "Special services" has the meaning given in the city's 
125.23 	ordinance but, provided that special services may not include a service that is ordinarily 
125.24 	provided throughout the city from general fund revenues of the city unless an increased 
125.25 	level of the service is provided in the special service district.
125.26 	For a city that includes a portion of the central corridor light rail transit project, 
125.27 	"special services" includes public redevelopment costs related to the project, including the 
125.28 	cost of programs to mitigate lost parking caused by the project.

125.29 	Sec. 3. Minnesota Statutes 2008, section 469.174, is amended by adding a subdivision 
125.30 	to read:
126.1 		Subd. 10c.Compact development district. "Compact development district" means 
126.2 	a type of tax increment financing district consisting of a project, or portions of a project, 
126.3 	within which the authority finds by resolution that the following conditions are satisfied:
126.4 	(1) parcels consisting of 70 percent of the area of the district are occupied by 
126.5 	buildings or other structures that are classified as class 3a property under section 273.13, 
126.6 	subdivision 24; and
126.7 	(2) the planned redevelopment or development of the district, when completed, will 
126.8 	increase the total square footage of buildings, classified as class 3a under section 273.13, 
126.9 	subdivision 24, occupying the district by three times or more relative to the square footage 
126.10 	of similar buildings occupying the district when the resolution was approved.

126.11 	EFFECTIVE DATE. This section is effective for districts for which the request for 
126.12 	certification is made after June 30, 2009.

126.13 	Sec. 4. Minnesota Statutes 2008, section 469.174, subdivision 22, is amended to read:
126.14 		Subd. 22.Tourism facility. "Tourism facility" means property that:
126.15 	(1) is located in a county where the median income is no more than 85 percent of 
126.16 	the state median income;
126.17 	(2) is located in a county in development region 2, 3, 4, or 5, or 7E, as defined 
126.18 	in section 462.385; 
126.19 	(3) is not located in a city with a population in excess of 20,000; and
126.20 	(4) is acquired, constructed, or rehabilitated for use as a convention and meeting 
126.21 	facility that is privately owned, marina, hotel, motel, lodging facility, or nonhomestead 
126.22 	dwelling unit that in each case is intended to serve primarily individuals from outside 
126.23 	the county.

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

126.26 	Sec. 5. Minnesota Statutes 2008, section 469.175, subdivision 1, is amended to read:
126.27 		Subdivision 1. Tax increment financing plan. (a) A tax increment financing plan 
126.28 	shall contain: 
126.29 	(1) a statement of objectives of an authority for the improvement of a project; 
126.30 	(2) a statement as to the development program for the project, including the property 
126.31 	within the project, if any, that the authority intends to acquire, identified by parcel number, 
126.32 	identifiable property name, block, or other appropriate means indicating the area in which 
126.33 	the authority intends to acquire properties; 
127.1 	(3) a list of any development activities that the plan proposes to take place within 
127.2 	the project, for which contracts have been entered into at the time of the preparation of 
127.3 	the plan, including the names of the parties to the contract, the activity governed by the 
127.4 	contract, the estimated cost stated in the contract, and the expected date of completion 
127.5 	of that activity; 
127.6 	(4) identification or description of the type of any other specific development 
127.7 	reasonably expected to take place within the project, and the date when the development is 
127.8 	likely to occur;
127.9 	(5) estimates of the following: 
127.10 	(i) cost of the project, including administrative expenses, except that if part of the 
127.11 	cost of the project is paid or financed with increment from the tax increment financing 
127.12 	district, the tax increment financing plan for the district must contain an estimate of the 
127.13 	amount of the cost of the project, including administrative expenses, and interest costs
127.14 	that will be paid or financed with tax increments from the district, but not to exceed the 
127.15 	estimated tax increments to be generated by the development activity; 
127.16 	(ii) amount of bonded indebtedness to be incurred bonds to be issued; 
127.17 	(iii) sources of revenue to finance or otherwise pay public costs;
127.18 	(iv) the most recentoriginal net tax capacity of taxable real property within the tax 
127.19 	increment financing district and within any subdistrict; 
127.20 	(v)(iv) the estimated captured net tax capacity of the tax increment financing district 
127.21 	at completion; and
127.22 	(vi) (v) the duration of the tax increment financing district's and any subdistrict's 
127.23 	existence; 
127.24 	(6) (5) statements of the authority's alternate estimates of the impact of tax increment 
127.25 	financing on the net tax capacities of all taxing jurisdictions in which the tax increment 
127.26 	financing district is located in whole or in part. For purposes of one statement, the 
127.27 	authority shall assume that the estimated captured net tax capacity would be available to 
127.28 	the taxing jurisdictions without creation of the district, and for purposes of the second 
127.29 	statement, the authority shall assume that none of the estimated captured net tax capacity 
127.30 	would be available to the taxing jurisdictions without creation of the district or subdistrict; 
127.31 	(7) (6) identification and description of studies and analyses used to make the 
127.32 	determination set forth in subdivision 3, clause (2); and 
127.33 	(8) (7) identification of all parcels to be included in the district or any subdistrict. 
127.34 	(b) The authority may specify in the tax increment financing plan the first year in 
127.35 	which it elects to receive increment, up to four years following the year of approval of the 
127.36 	district. This paragraph does not apply to an economic development district. 

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

128.3 	Sec. 6. Minnesota Statutes 2008, section 469.175, subdivision 6, is amended to read:
128.4 		Subd. 6.Annual financial reporting. (a) The state auditor shall develop a uniform 
128.5 	system of accounting and financial reporting for tax increment financing districts. The 
128.6 	system of accounting and financial reporting shall, as nearly as possible:
128.7 	(1) provide for full disclosure of the sources and uses of public funds in tax 
128.8 	increments of the district;
128.9 	(2) permit comparison and reconciliation with the affected local government's 
128.10 	accounts and financial reports;
128.11 	(3) permit auditing of the funds expended on behalf of a district, including a single 
128.12 	district that is part of a multidistrict project or that is funded in part or whole through 
128.13 	the use of a development account funded with tax increments from other districts or 
128.14 	with other public money;
128.15 	(4) be consistent with generally accepted accounting principles.
128.16 	(b) The authority must annually submit to the state auditor a financial report 
128.17 	in compliance with paragraph (a). Copies of the report must also be provided to the 
128.18 	county auditor and to the governing body of the municipality, if the authority is not 
128.19 	the municipality. To the extent necessary to permit compliance with the requirement 
128.20 	of financial reporting, the county and any other appropriate local government unit or 
128.21 	private entity must provide the necessary records or information to the authority or the 
128.22 	state auditor as provided by the system of accounting and financial reporting developed 
128.23 	pursuant to paragraph (a). The authority must submit the annual report for a year on or 
128.24 	before August 1 of the next year.
128.25 	(c) The annual financial report must also include the following items:
128.26 	(1) the original net tax capacity of the district and any subdistrict under section 
128.27 	469.177, subdivision 1;
128.28 	(2) the net tax capacity for the reporting period of the district and any subdistrict;
128.29 	(3) the captured net tax capacity of the district;
128.30 	(4) any fiscal disparity deduction from the captured net tax capacity under section 
128.31 	469.177, subdivision 3;
128.32 	(5) the captured net tax capacity retained for tax increment financing under section 
128.33 	469.177, subdivision 2, paragraph (a), clause (1);
128.34 	(6) any captured net tax capacity distributed among affected taxing districts under 
128.35 	section 469.177, subdivision 2, paragraph (a), clause (2);
129.1 	(7) the type of district;
129.2 	(8) the date the municipality approved the tax increment financing plan and the 
129.3 	date of approval of any modification of the tax increment financing plan, the approval of 
129.4 	which requires notice, discussion, a public hearing, and findings under subdivision 4, 
129.5 	paragraph (a);
129.6 	(9) the date the authority first requested certification of the original net tax capacity 
129.7 	of the district and the date of the request for certification regarding any parcel added 
129.8 	to the district;
129.9 	(10) the date the county auditor first certified the original net tax capacity of the 
129.10 	district and the date of certification of the original net tax capacity of any parcel added 
129.11 	to the district;
129.12 	(11) the month and year in which the authority has received or anticipates it will 
129.13 	receive the first increment from the district;
129.14 	(12) the date the district must be decertified;
129.15 	(13) for the reporting period and prior years of the district, the actual amount 
129.16 	received from, at least, the following categories:
129.17 	(i) tax increments paid by the captured net tax capacity retained for tax increment 
129.18 	financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding 
129.19 	any excess taxes;
129.20 	(ii) tax increments that are interest or other investment earnings on or from tax 
129.21 	increments;
129.22 	(iii) tax increments that are proceeds from the sale or lease of property, tangible or 
129.23 	intangible, purchased by the authority with tax increments;
129.24 	(iv) tax increments that are repayments of loans or other advances made by the 
129.25 	authority with tax increments;
129.26 	(v) bond or loan proceeds; and
129.27 	(vi) special assessments;
129.28 	(vii) grants;
129.29 	(viii) transfers from funds not exclusively associated with the district; and
129.30 	(ix) the market value homestead credit paid to the authority under section 273.1384;
129.31 	(14) for the reporting period and for the prior years of the district, the actual amount 
129.32 	expended for, at least, the following categories:
129.33 	(i) acquisition of land and buildings through condemnation or purchase;
129.34 	(ii) site improvements or preparation costs;
129.35 	(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or 
129.36 	other similar public improvements;
130.1 	(iv) administrative costs, including the allocated cost of the authority; and
130.2 	(v) public park facilities, facilities for social, recreational, or conference purposes, or 
130.3 	other similar public improvements; and for housing districts, construction of affordable 
130.4 	housing;
130.5 	(vi) transfers to funds not exclusively associated with the district;
130.6 	(15) the amount of any payments for activities and improvements located outside of 
130.7 	the district that are paid for or financed with tax increments;
130.8 	(16) the amount of payments of principal and interest that are made during the 
130.9 	reporting period on any nondefeased:
130.10 	(i) general obligation tax increment financing bonds; and
130.11 	(ii) other tax increment financing bonds, including pay-as-you-go contracts and 
130.12 	notes; and
130.13 	(iii) notes and pay-as-you-go contracts;
130.14 	(17) the principal amount, at the end of the reporting period, of any nondefeased:
130.15 	(i) general obligation tax increment financing bonds; and
130.16 	(ii) other tax increment financing bonds, including pay as you go contracts and 
130.17 	notes; and
130.18 	(iii) notes and pay-as-you-go contracts;
130.19 	(18) the amount of principal and interest payments that are due for the current 
130.20 	calendar year on any nondefeased:
130.21 	(i) general obligation tax increment financing bonds; and
130.22 	(ii) other tax increment financing bonds, including pay-as-you-go contracts and 
130.23 	notes; and
130.24 	(iii) notes and pay-as-you-go contracts;
130.25 	(19) if the fiscal disparities contribution under chapter 276A or 473F for the district 
130.26 	is computed under section 469.177, subdivision 3, paragraph (a), the amount of total 
130.27 	increased property taxes imposed on other properties in the municipality that approved the 
130.28 	tax increment financing plan as a result of the fiscal disparities contribution;  to be paid 
130.29 	from outside the tax increment financing district; and
130.30 	(20) the estimate, if any, contained in the tax increment financing plan of the amount 
130.31 	of the cost of the project, including administrative expenses, that will be paid or financed 
130.32 	with tax increment; and
130.33 	(21) any additional information the state auditor may require.
130.34 	(d) The commissioner of revenue shall prescribe the method of calculating the 
130.35 	increased property taxes under paragraph (c), clause (19), and the form of the statement 
130.36 	disclosing this information on the annual statement under subdivision 5.
131.1 	(e) The reporting requirements imposed by this subdivision apply to districts 
131.2 	certified before, on, and after August 1, 1979.

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

131.5 	Sec. 7. Minnesota Statutes 2008, section 469.176, subdivision 1b, is amended to read:
131.6 		Subd. 1b.Duration limits; terms. (a) No tax increment shall in any event be 
131.7 	paid to the authority
131.8 	(1) after 15 years after receipt by the authority of the first increment for a renewal 
131.9 	and renovation district,
131.10 	(2) after 20 years after receipt by the authority of the first increment for a soils 
131.11 	condition district,
131.12 	(3) after eight years after receipt by the authority of the first increment for an 
131.13 	economic development district,
131.14 	(4) for a housing district, a compact development district, or a redevelopment 
131.15 	district, after 25 years from the date of receipt by the authority of the first increment.
131.16 	(b) For purposes of determining a duration limit under this subdivision or subdivision 
131.17 	1e that is based on the receipt of an increment, any increments from taxes payable in 
131.18 	the year in which the district terminates shall be paid to the authority. This paragraph 
131.19 	does not affect a duration limit calculated from the date of approval of the tax increment 
131.20 	financing plan or based on the recovery of costs or to a duration limit under subdivision 
131.21 	1c. This paragraph does not supersede the restrictions on payment of delinquent taxes in 
131.22 	subdivision 1f.
131.23 	(c) An action by the authority to waive or decline to accept an increment has no 
131.24 	effect for purposes of computing a duration limit based on the receipt of increment under 
131.25 	this subdivision or any other provision of law. The authority is deemed to have received an 
131.26 	increment for any year in which it waived or declined to accept an increment, regardless 
131.27 	of whether the increment was paid to the authority.
131.28 	(d) Receipt by a hazardous substance subdistrict of an increment as a result of a 
131.29 	reduction in original net tax capacity under section 469.174, subdivision 7, paragraph 
131.30 	(b), does not constitute receipt of increment by the overlying district for the purpose of 
131.31 	calculating the duration limit under this section.  

131.32 	EFFECTIVE DATE. This section is effective for districts for which the request for 
131.33 	certification is made after June 30, 2009.

132.1 	Sec. 8. Minnesota Statutes 2008, section 469.176, is amended by adding a subdivision 
132.2 	to read:
132.3 		Subd. 1i.Compact development districts. Tax increments derived from a compact 
132.4 	development district may be used only to pay:
132.5 	(1) administrative expenses up to the amount permitted under subdivision 3;
132.6 	(2) the cost of acquiring land located in the district or abutting the boundary of 
132.7 	the district;
132.8 	(3) demolition and removal of buildings or other improvements and other site 
132.9 	preparation costs for lands located in the district or abutting the boundary of the district; 
132.10 	and
132.11 	(4) installation of public infrastructure or public improvements serving the district, 
132.12 	but excluding the costs of streets, roads, highways, parking, or other public improvements 
132.13 	primarily designed to serve private passenger motor vehicles.

132.14 	EFFECTIVE DATE. This section is effective for districts for which the request for 
132.15 	certification is made after June 30, 2009.

132.16 	Sec. 9. Minnesota Statutes 2008, section 469.176, subdivision 3, is amended to read:
132.17 		Subd. 3.Limitation on administrative expenses.
 132.18 	(a) For districts for which certification was requested before August 1, 1979, or after 
132.19 	June 30, 1982 and before August 1, 2001, no tax increment shall be used to pay any 
132.20 	administrative expenses for a project which exceed ten percent of the total estimated tax 
132.21 	increment expenditures authorized by the tax increment financing plan or the total tax 
132.22 	increment expenditures for the project, whichever is less.
132.23 	(b) For districts for which certification was requested after July 31, 1979, and before 
132.24 	July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in 
132.25 	Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the 
132.26 	total tax increment expenditures authorized by the tax increment financing plan or the total 
132.27 	estimated tax increment expenditures for the district, whichever is less.  
132.28 	(c) For districts for which certification was requested after July 31, 2001, no tax 
132.29 	increment may be used to pay any administrative expenses for a project which exceed 
132.30 	ten percent of total estimated tax increment expenditures authorized by the tax increment 
132.31 	financing plan or the total tax increments, as defined in section 469.174, subdivision 25, 
132.32 	clause (1), from the district, whichever is less.  
132.33 	(d) Increments used to pay the county's administrative expenses under subdivision 
132.34 	4h are not subject to the percentage limits in this subdivision.

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

133.3 	Sec. 10. Minnesota Statutes 2008, section 469.1763, subdivision 2, is amended to read:
133.4 		Subd. 2. Expenditures outside district. (a) For each tax increment financing 
133.5 	district, an amount equal to at least 75 percent of the total revenue derived from tax 
133.6 	increments paid by properties in the district must be expended on activities in the district 
133.7 	or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities 
133.8 	in the district or to pay, or secure payment of, debt service on credit enhanced bonds. 
133.9 	For districts, other than redevelopment districts for which the request for certification 
133.10 	was made after June 30, 1995, the in-district percentage for purposes of the preceding 
133.11 	sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax 
133.12 	increments paid by properties in the district may be expended, through a development fund 
133.13 	or otherwise, on activities outside of the district but within the defined geographic area of 
133.14 	the project except to pay, or secure payment of, debt service on credit enhanced bonds. 
133.15 	For districts, other than redevelopment districts for which the request for certification was 
133.16 	made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is 
133.17 	20 percent. The revenue derived from tax increments for the district that are expended on 
133.18 	costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before 
133.19 	calculating the percentages that must be expended within and without the district. 
133.20 	(b) In the case of a housing district, a housing project, as defined in section 469.174, 
133.21 	subdivision 11, is an activity in the district. 
133.22 	(c) All administrative expenses are for activities outside of the district, except that 
133.23 	if the only expenses for activities outside of the district under this subdivision are for 
133.24 	the purposes described in paragraph (d), administrative expenses will be considered as 
133.25 	expenditures for activities in the district. 
133.26 	(d) The authority may elect, in the tax increment financing plan for the district, 
133.27 	to increase by up to ten percentage points the permitted amount of expenditures for 
133.28 	activities located outside the geographic area of the district under paragraph (a). As 
133.29 	permitted by section 469.176, subdivision 4k, the expenditures, including the permitted 
133.30 	expenditures under paragraph (a), need not be made within the geographic area of the 
133.31 	project. Expenditures that meet the requirements of this paragraph are legally permitted 
133.32 	expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. 
133.33 	To qualify for the increase under this paragraph, the expenditures must: 
133.34 	(1) be used exclusively to assist housing that meets the requirement for a qualified 
133.35 	low-income building, as that term is used in section 42 of the Internal Revenue Code; 
134.1 	(2) not exceed the qualified basis of the housing, as defined under section 42(c) of 
134.2 	the Internal Revenue Code, less the amount of any credit allowed under section 42 of 
134.3 	the Internal Revenue Code; and 
134.4 	(3) be used to: 
134.5 	(i) acquire and prepare the site of the housing; 
134.6 	(ii) acquire, construct, or rehabilitate the housing; or 
134.7 	(iii) make public improvements directly related to the housing. 
134.8 	(e) For a district created within a biotechnology and health sciences industry 
134.9 	zone as defined in section 469.330, subdivision 6, a district created within a transit 
134.10 	improvement area as defined in section 469.351, subdivisions 1 to 3, or for an existing 
134.11 	district districts located within such a biotechnology and health sciences industry zone, 
134.12 	or a transit improvement area, tax increment derived from such a district districts may 
134.13 	be expended outside of the district but within the zone or transit improvement area,
134.14 	only for expenditures required for the construction of public infrastructure necessary to 
134.15 	support the activities of the biotechnology and health sciences industry zone, or the transit 
134.16 	improvement area, including land acquisition, and other redevelopment costs as defined 
134.17 	in section 469.176, subdivision 4j. These expenditures are considered as expenditures 
134.18 	for activities within the district. 

134.19 	Sec. 11. Minnesota Statutes 2008, section 469.1763, subdivision 3, is amended to read:
134.20 		Subd. 3.Five-year rule. (a) Revenues derived from tax increments are considered 
134.21 	to have been expended on an activity within the district under subdivision 2 only if one 
134.22 	of the following occurs:
134.23 	(1) before or within five years after certification of the district, the revenues are 
134.24 	actually paid to a third party with respect to the activity;
134.25 	(2) bonds, the proceeds of which must be used to finance the activity, are issued and 
134.26 	sold to a third party before or within five years after certification, the revenues are spent 
134.27 	to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, 
134.28 	reasonably expected to be spent before the end of the later of (i) the five-year period, or 
134.29 	(ii) a reasonable temporary period within the meaning of the use of that term under section 
134.30 	148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve 
134.31 	or replacement fund;
134.32 	(3) binding contracts with a third party are entered into for performance of the 
134.33 	activity before or within five years after certification of the district and the revenues are 
134.34 	spent under the contractual obligation;
135.1 	(4) costs with respect to the activity are paid before or within five years after 
135.2 	certification of the district and the revenues are spent to reimburse a party for payment 
135.3 	of the costs, including interest on unreimbursed costs; or
135.4 	(5) expenditures are made for housing purposes as permitted by subdivision 2, 
135.5 	paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted 
135.6 	by subdivision 2, paragraph (e).
135.7 	(b) For purposes of this subdivision, bonds include subsequent refunding bonds if 
135.8 	the original refunded bonds meet the requirements of paragraph (a), clause (2).
135.9 	(c) For a redevelopment district or a renewal and renovation district certified after 
135.10 	June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph (a) 
135.11 	are extended to ten years after certification of the district in order to accommodate delays 
135.12 	in development activities due to unanticipated economic circumstances.

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

135.14 	Sec. 12. Minnesota Statutes 2008, section 469.178, subdivision 7, is amended to read:
135.15 		Subd. 7. Interfund loans. The authority or municipality may advance or loan 
135.16 	money to finance expenditures under section 469.176, subdivision 4, from its general 
135.17 	fund or any other fund under which it has legal authority to do so. The loan or advance 
135.18 	must be authorized, by resolution of the governing body or of the authority, whichever 
135.19 	has jurisdiction over the fund from which the advance or loan is made authorized, before 
135.20 	money is transferred, advanced, or spent, whichever is earliest. The resolution may 
135.21 	generally grant to the authority the power to make interfund loans under one or more tax 
135.22 	increment financing plans or for one or more districts. The terms and conditions for 
135.23 	repayment of the loan must be provided in writing and include, at a minimum, the principal 
135.24 	amount, the interest rate, and maximum term. The maximum rate of interest permitted to 
135.25 	be charged is limited to the greater of the rates specified under section 270C.40 or 549.09
135.26 	as of the date the loan or advance is made authorized, unless the written agreement states 
135.27 	that the maximum interest rate will fluctuate as the interest rates specified under section 
135.28 	270C.40 or 549.09 are from time to time adjusted. 

135.29 	EFFECTIVE DATE. This section is effective for interfund loans made after June 
135.30 	30, 2009.

135.31 	Sec. 13. Minnesota Statutes 2008, section 469.312, is amended by adding a subdivision 
135.32 	to read:
136.1 		Subd. 6.Termination of designation of qualified business. No person will be 
136.2 	deemed to be a qualified business eligible for the benefits provided in sections 469.310 
136.3 	to 469.320, unless the person has entered into a business subsidy agreement with a local 
136.4 	government unit as provided in section 469.310, subdivision 11, prior to May 1, 2009.

136.5 	Sec. 14. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by 
136.6 	Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10, 
136.7 	section 12, and Laws 2008, chapter 154, article 9, section 18, is amended to read:
136.8 		Subd. 4.Authority. For housing replacement projects in the city of Crystal, 
136.9 	"authority" means the Crystal economic development authority. For housing replacement 
136.10 	projects in the city of Fridley, "authority" means the housing and redevelopment authority 
136.11 	in and for the city of Fridley or a successor in interest. For housing replacement 
136.12 	projects in the city of Minneapolis, "authority" means the Minneapolis community 
136.13 	development agency or its successors and assigns. For housing replacement projects 
136.14 	in the city of St. Paul, "authority" means the St. Paul housing and redevelopment 
136.15 	authority. For housing replacement projects in the city of Duluth, "authority" means the 
136.16 	Duluth economic development authority. For housing replacement projects in the city of 
136.17 	Richfield, "authority" is the authority as defined in Minnesota Statutes, section 469.174, 
136.18 	subdivision 2, that is designated by the governing body of the city of Richfield. For 
136.19 	housing replacement projects in the city of Columbia Heights, "authority" is the authority 
136.20 	as defined in Minnesota Statutes, section 469.174, subdivision 2, that is designated by 
136.21 	the governing body of the city of Columbia Heights. For housing replacement projects in 
136.22 	the city of Brooklyn Park, "authority" is the authority, as defined in Minnesota Statutes, 
136.23 	section 469.174, subdivision 2, that is designated by the governing body of the city of 
136.24 	Brooklyn Park.

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

136.28 	Sec. 15. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by 
136.29 	Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10, 
136.30 	section 13, and Laws 2002, chapter 377, article 7, section 6, and Laws 2008, chapter 154, 
136.31 	article 9, section 19, is amended to read:
136.32 		Subdivision 1.Creation of projects. (a) An authority may create a housing 
136.33 	replacement project under sections 44 to 47, as provided in this section.
137.1 	(b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, and Brooklyn 
137.2 	Park, the authority may designate up to 50 parcels in the city to be included in a housing 
137.3 	replacement district. No more than ten parcels may be included in year one of the district, 
137.4 	with up to ten additional parcels added to the district in each of the following nine years. 
137.5 	For the cities of St. Paul and Duluth, each authority may designate not more than 200 
137.6 	parcels in the city to be included in a housing replacement district over the life of the 
137.7 	district. For the city of Minneapolis, the authority may designate not more than 400 
137.8 	parcels in the city to be included in housing replacement districts over the life of the 
137.9 	districts. The only parcels that may be included in a district are (1) vacant sites, (2) 
137.10 	parcels containing vacant houses, or (3) parcels containing houses that are structurally 
137.11 	substandard, as defined in Minnesota Statutes, section 469.174, subdivision 10.
137.12 	(c) The city in which the authority is located must pay at least 25 percent of the 
137.13 	housing replacement project costs from its general fund, a property tax levy, or other 
137.14 	unrestricted money, not including tax increments.
137.15 	(d) The housing replacement district plan must have as its sole object the acquisition 
137.16 	of parcels for the purpose of preparing the site to be sold for market rate housing. As 
137.17 	used in this section, "market rate housing" means housing that has a market value that 
137.18 	does not exceed 150 percent of the average market value of single-family housing in that 
137.19 	municipality.

137.20 	EFFECTIVE DATE. This section is effective the day following final enactment 
137.21 	and applies to the affected cities without local approval under Minnesota Statutes, section 
137.22 	645.023, subdivision 1, paragraph (a).

137.23 	Sec. 16. Laws 2008, chapter 366, article 5, section 28, subdivision 1, is amended to 
137.24 	read:
137.25 		Subdivision 1.Additional taxes authorized; use of proceeds. Notwithstanding 
137.26 	Minnesota Statutes, section 477A.016, or any other law, ordinance, or charter provision 
137.27 	to the contrary, the governing body of the city of Bloomington may impose any or all of 
137.28 	the taxes described in this section. The proceeds of any taxes imposed under this section 
137.29 	or section 27, less refunds and the cost of collection, must be used to provide financing 
137.30 	for parking facilities or other public improvements for any phase of the Mall of America 
137.31 	phase II. The Port Authority of the city of Bloomington may, but is not required to, 
137.32 	issue or cause the sale of bonds, a developer's note, or other obligations to finance the 
137.33 	improvements. If a governmental entity other than the city of Bloomington issues the 
137.34 	obligations used to finance the parking facilities and other public improvements, the 
138.1 	city may transfer the funds available under this section and section 27 for financing the 
138.2 	project to the entity that issued the bonds.

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

138.4 	Sec. 17. Laws 2008, chapter 366, article 5, section 29, subdivision 1, is amended to 
138.5 	read:
138.6 		Subdivision 1.Issuing authority. (a) The city of Bloomington may contract with 
138.7 	any of the following authorities to issue and sell revenue bonds for the purposes and 
138.8 	in the amounts specified in subdivision 2:
138.9 	(1) the commissioner of finance, exercising the authority granted under this section 
138.10 	and Minnesota Statutes, sections 16A.672 to 16A.675;
138.11 	(2) the Agricultural and Economic Development Board, exercising the powers 
138.12 	granted under this section and Minnesota Statutes, chapter 41A; or
138.13 	(3) the Minnesota Public Facilities Authority, exercising the powers granted under 
138.14 	this section and Minnesota Statutes, chapter 446A.
138.15 	(b) The authority granted in this section is in addition to the statutes in paragraph 
138.16 	(a) and notwithstanding any contrary provisions in them.
138.17 	(c) The contract must include as a party the developer of any phase II of the Mall 
138.18 	of America and may include as a party any other entity deemed appropriate by the city 
138.19 	of Bloomington, the issuing authority, and the developer.

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

138.21 	Sec. 18. Laws 2008, chapter 366, article 5, section 29, subdivision 2, is amended to 
138.22 	read:
138.23 		Subd. 2.Purposes and amounts. (a) The revenue bonds may be issued in a single 
138.24 	or multiple issues and sold for the following purposes:
138.25 	(1) to pay the costs to design, construct, furnish, and equip parking facilities and 
138.26 	related other public improvements for any phase II of the Mall of America;
138.27 	(2) to pay the costs of issuance, debt service, and bond insurance or other credit 
138.28 	enhancements, and to fund reserves; and
138.29 	(3) to refund bonds issued under this section.
138.30 	(b) The amount of bonds that may be issued for the purposes of paragraph (a), clause 
138.31 	(1), may not exceed per issue the estimated cost from time to time of the parking facilities 
138.32 	and other public improvements, including soft costs; the amount of bonds that may be 
138.33 	issued for the purposes of paragraph (a), clauses (2) and (3), is not limited.

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

139.2 	Sec. 19. Laws 2008, chapter 366, article 5, section 29, subdivision 4, is amended to 
139.3 	read:
139.4 		Subd. 4.Sale and issuance; proceeds. (a) The issuing authority may sell and issue 
139.5 	the bonds on the terms and conditions the issuing authority determines to be in the best 
139.6 	interests of the state after reviewing an agreement between the city of Bloomington and 
139.7 	the developer of any phase II of the Mall of America setting out the terms upon which 
139.8 	the city of Bloomington will use the proceeds of the bond sales. The bonds may be sold 
139.9 	at public or private sale at a price or prices the issuing authority finds appropriate. The 
139.10 	issuing authority may enter any agreements or pledges the issuing authority determines 
139.11 	necessary or useful to sell the bonds that are not inconsistent with this section. 
139.12 	(b) The city may enter into a preliminary agreement with the issuing authority under 
139.13 	which the city agrees, if the revenue bonds are not issued, to pay or cause to be paid the 
139.14 	costs and expenses incurred by the issuing authority relating to the proposed issuance of 
139.15 	the revenue bonds.
139.16 	(c) The proceeds of the bonds issued under this section must be credited to a special 
139.17 	Mall of America revenue bond proceeds account with the issuing authority or a trustee 
139.18 	and are appropriated to the issuing authority for payment to the city of Bloomington 
139.19 	for the purposes specified in subdivision 2.

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

139.21 	Sec. 20. Laws 2008, chapter 366, article 5, section 34, is amended to read:
139.22 	Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY. 
 139.23 	(a) The provisions of this section apply to redevelopment tax increment financing 
139.24 	districts created by the Housing and Redevelopment Authority in and for the city of 
139.25 	Oakdale in the areas comprised of the parcels with the following parcel identification 
139.26 	numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056; 
139.27 	3102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059; 
139.28 	3102921320060; and 3102921320061; and (2) 3102921330005; and 3102921330004; and 
139.29 	(2) 2902921330001 and 2902921330005.
139.30 	(b) For a district subject to this section, the Housing and Redevelopment Authority 
139.31 	may, when requesting certification of the original tax capacity of the district under 
139.32 	Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district 
139.33 	be certified as the tax capacity of the land.
140.1 	(c) The authority to request certification of a district under this section expires on 
140.2 	July 1, 2013.

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

140.6 	Sec. 21. MALL OF AMERICA; LABOR PEACE.
 140.7 	As a condition to providing any public financing to any phase of the Mall of America 
140.8 	project, the governing bodies of the city of Bloomington and the Bloomington Port 
140.9 	Authority shall require the developers of any phase of the Mall of America project to enter 
140.10 	into a labor peace agreement with the labor organization which is most actively engaged in 
140.11 	representing and attempting to represent hotel workers in Hennepin and Ramsey Counties. 
140.12 	The labor peace agreement must be an enforceable agreement and must prohibit the labor 
140.13 	organization and its members from engaging in any boycott or other activity advising 
140.14 	customers not to patronize any hotel that is part of any phase for at least the first five years 
140.15 	of the hotel's operation, and must cover all operations at the hotel, other than construction, 
140.16 	alteration, or repair of the premises separately owned and operated, which are conducted 
140.17 	by lessees or tenants or under management agreements, except retail operations, including 
140.18 	gift, jewelry, and clothing shops that have annual gross revenues of less than $250,000.

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

140.20 	Sec. 22. CHISAGO CITY AND LINDSTROM JOINT VENTURE.
 140.21 	Any two or more of the cities of Chisago City and Lindstrom, their economic 
140.22 	development authorities, housing and redevelopment authorities, and the county of 
140.23 	Chisago may enter into a joint powers agreement to acquire and develop or redevelop 
140.24 	a business park in either city. Any party to the agreement may spend money or issue 
140.25 	debt for all or a part of the project, regardless of whether the project is located within its 
140.26 	corporate boundaries. Issuance of debt under this section is subject to Minnesota Statutes, 
140.27 	chapter 475, except that an election is not required. The agreement may provide for the 
140.28 	parties to share revenues from the project. Any party to the agreement may levy taxes 
140.29 	or spend its funds, as otherwise permitted by law, to pay for the project, including debt 
140.30 	issued to finance the project. 
140.31 	If the project is included in a tax increment financing district, each city and authority 
140.32 	that is a party to the agreement may treat the tax increment financing district as being 
140.33 	located within its corporate boundaries for purposes of the authority under the tax 
141.1 	increment financing act, Minnesota Statutes, sections 469.174 to 469.1799, to spend 
141.2 	increments or issue bonds for the project.

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

141.4 	Sec. 23. CITY OF MANKATO; TAX INCREMENT FINANCING DISTRICT; 
141.5 	PROJECT REQUIREMENTS.
 141.6 		Subdivision 1.Expenditures outside district. Notwithstanding Minnesota Statutes, 
141.7 	section 469.1763, subdivision 2, or any other law to the contrary, the city of Mankato may 
141.8 	expend increments generated from its South Riverfront tax increment financing district 
141.9 	anywhere within the South Riverfront Redevelopment project area. In this section, the 
141.10 	"South Riverfront Redevelopment project area" and the "South Riverfront tax increment 
141.11 	financing district" mean the area and district as they may be modified from time to time.
141.12 		Subd. 2.Use of increments. Tax increments derived from the South Riverfront 
141.13 	tax increment financing district may be used to reimburse or otherwise pay the city of 
141.14 	Mankato for allowable expenditures under the plan budget for the South Riverfront tax 
141.15 	increment district.
141.16 		Subd. 3.Interfund loans. The requirement for resolutions under Minnesota 
141.17 	Statutes, section 469.178, subdivision 7, does not apply to the South Riverfront tax 
141.18 	increment financing district.

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

141.22 	Sec. 24. CITY OF NORTH MANKATO; TAX INCREMENT FINANCING 
141.23 	DISTRICT; PROJECT REQUIREMENTS.
 141.24 		Subdivision 1.Addition of parcel to district. Notwithstanding Minnesota Statutes, 
141.25 	sections 469.174, subdivision 10, and 469.175, subdivision 4, paragraph (d), or any 
141.26 	other law to the contrary, the governing body of the city of North Mankato may elect to 
141.27 	expand the boundaries of Tax Increment Financing District No. IDD 1-8 to include real 
141.28 	property, described as follows:
141.29 	Lots 3, 4, 5, 6, 7, 8, B, and C and part of vacated Cedar Street, Lots A, 1, and 2 
141.30 	lying northwesterly of a line beginning at a point on the South line of Lot A 74.67 feet 
141.31 	West of the southeast corner of Lot A; thence northeasterly 107.30 feet to a point on 
141.32 	the East line of Lot 2; thence continuing northeasterly 47.47 feet to a point on the East 
141.33 	right-of-way line of vacated Cedar Street; said point being 101.93 feet southerly from the 
142.1 	intersection of the south right-of-way line of Wheeler Avenue and the east right-of-way 
142.2 	line vacated Cedar Street, Lamm's Second Addition, City of North Mankato, Nicollet 
142.3 	County, Minnesota (tax parcel number R 18.614.0040).
142.4 		Subd. 2.Original tax capacity of district. Upon addition of the property described 
142.5 	in subdivision 1 in Tax Increment Financing District No. IDD 1-8, the Nicollet County 
142.6 	auditor shall increase the original tax capacity of Tax Increment Financing District No. 
142.7 	IDD 1-8 by the amount required by Minnesota Statutes, section 469.177.
142.8 		Subd. 3.Use of increments. Tax increments and other revenues derived from any 
142.9 	portion of Tax Increment Financing District No. IDD 1-8, as enlarged, may be used:
142.10 	(1) to reimburse or otherwise pay the port authority of the city of North Mankato 
142.11 	and the city of North Mankato for allowable expenditures under the plan budget for Tax 
142.12 	Increment Financing District No. IDD 1-8, as amended from time to time; and
142.13 	(2) to pay the principal, premium, and interest on the $990,000 city of North 
142.14 	Mankato taxable general obligation tax increment bonds, series 2001D, issued by the city 
142.15 	of North Mankato for redevelopment costs in Tax Increment Financing District No. IDD 
142.16 	1-8 under the tax increment financing plan for Tax Increment Financing District No. IDD 
142.17 	1-8 as originally adopted January 16, 1990, and amended April 2, 2001.
142.18 		Subd. 4.Approval of modification. When the governing body of the city elects to 
142.19 	exercise the authority provided in subdivision 1 to modify the district, it must comply with 
142.20 	Minnesota Statutes, section 469.175, subdivision 4, except for paragraph (d).

142.21 	EFFECTIVE DATE. This section is effective upon approval by the governing body 
142.22 	of the city of North Mankato and upon compliance by the city with Minnesota Statutes, 
142.23 	section 645.021, subdivision 3.

142.24 	Sec. 25. CITY OF ST. LOUIS PARK; EXTENSION OF TAX INCREMENT 
142.25 	DISTRICT DURATION.
 142.26 	Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the duration 
142.27 	of the Elmwood Village Tax Increment Financing District is extended to 25 years after 
142.28 	receipt by the St. Louis Park Economic Development Authority of the first increment 
142.29 	from the district.

142.30 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
142.31 	body of the city of St. Louis Park with the requirements of Minnesota Statutes, sections 
142.32 	469.1782, subdivision 2, and 645.021, subdivision 3.

142.33 	Sec. 26. CENTRAL CORRIDOR LIGHT RAIL TRANSIT PROJECT AREA.
 143.1 	The Housing and Redevelopment Authority of the city of St. Paul, with the approval 
143.2 	of the city of St. Paul, may establish the central corridor light rail transit project area as a 
143.3 	redevelopment project under Minnesota Statutes, section 469.028. At least 80 percent of 
143.4 	the property included in the project area must be located within one quarter mile of the 
143.5 	central corridor light rail transit alignment.

143.6 	EFFECTIVE DATE. This section is effective upon approval by the St. Paul City 
143.7 	Council in compliance with Minnesota Statutes, section 645.021.

143.8 	Sec. 27. CITIES OF ST. PAUL AND FRIDLEY; AUTHORITY TO EXERCISE 
143.9 	SPECIAL LAW AUTHORITY.
 143.10 	Notwithstanding the failure of the governing bodies of the city of St. Paul and the 
143.11 	city of Fridley to approve Laws 1995, chapter 264, article 5, sections 44 to 47, as required 
143.12 	by Laws 1995, chapter 264, article 5, section 49, the provisions of sections 44 to 47, as 
143.13 	amended, apply to the city of St. Paul and to the city of Fridley without local approval 
143.14 	under Minnesota Statutes, section 645.023, subdivision 1, paragraph (a).

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

143.16 	Sec. 28. CITY OF ST. PAUL; TAX INCREMENTS FOR CENTRAL CORRIDOR 
143.17 	COSTS.
 143.18 	The Neighborhood Commercial Scattered Site tax increment financing district 
143.19 	(county No. 100), the Hubbard tax increment financing district (county No. 193), the 
143.20 	Spruce Tree tax increment financing district (county No. 83), and the Snelling-University 
143.21 	tax increment financing district (county No. 135) are subject to this section.
143.22 	Minnesota Statutes, sections 469.176, subdivisions 4b; 4g, paragraph (c); 4j; 
143.23 	and 4l, and 469.1763, subdivision 2, paragraph (a), do not apply to the expenditure 
143.24 	of tax increments from the named tax increment districts. The five-year rule under 
143.25 	Minnesota Statutes, section 469.1763, subdivision 3, is extended for these districts to a 
143.26 	ten-year period. Tax increments from these districts may be expended within the original 
143.27 	redevelopment project areas or within the central corridor light rail transit redevelopment 
143.28 	project area for any public redevelopment costs and to pay the cost of programs to mitigate 
143.29 	lost parking caused by the construction of the central corridor light rail transit line.

143.30 	EFFECTIVE DATE. This section is effective upon approval by the St. Paul City 
143.31 	Council in compliance with Minnesota Statutes, section 645.021.

143.32 	Sec. 29. CITY OF SAUK RAPIDS; TIF.
 144.1 	Any parcel in the city of Sauk Rapids located within Blocks 26, 27, 59, 61, and 62, 
144.2 	original town of Sauk Rapids Plat, is deemed to meet the requirements of Minnesota 
144.3 	Statutes, section 469.174, subdivision 10, paragraph (d), clause (1), if the following 
144.4 	conditions are met:
144.5 	(1) a building on the parcel was demolished in compliance with Minnesota Statutes, 
144.6 	section 469.174, subdivision 10, paragraph (d), clause (2), after the authority adopted a 
144.7 	resolution pursuant to Minnesota Statutes, section 469.174, subdivision 10, paragraph 
144.8 	(d), clause (3); and
144.9 	(2) the request for certification of the parcel as part of a district is filed with the 
144.10 	county auditor by December 31, 2012.

144.11 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
144.12 	body of the city of Sauk Rapids with the requirements of Minnesota Statutes, section 
144.13 	645.021, subdivision 3.

144.14 	Sec. 30. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF 
144.15 	SOUTH ST. PAUL; TAX INCREMENT FINANCING DISTRICT.
 144.16 		Subdivision 1.Authorization. Notwithstanding the provisions of any other law, 
144.17 	the Housing and Redevelopment Authority of the city of South St. Paul may establish a 
144.18 	redevelopment tax increment financing district comprised of the properties included in the 
144.19 	existing Concord Street tax increment district in the city that are exempt under Minnesota 
144.20 	Statutes, section 469.179, subdivision 1, and were not decertified before July 1, 2009. The 
144.21 	district created under this section may be certified after August 1, 2009, and terminates no 
144.22 	later than December 31, 2024. The Housing and Redevelopment Authority of the city of 
144.23 	South St. Paul may create the district under this section only if it enters into an agreement 
144.24 	with Dakota County to pay the county annually out of the increment from this district an 
144.25 	amount equal to the tax that would have been payable to the county on the captured tax 
144.26 	capacity of the district had the district not been created.
144.27 		Subd. 2.Special rules. The requirements for qualifying a redevelopment district 
144.28 	under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located 
144.29 	within the district. Minnesota Statutes, section 469.176, subdivisions 4j and 4l, do not 
144.30 	apply to the district. The original tax capacity of the district is $354,945.
144.31 		Subd. 3.Authorized expenditures. Tax increment from the district may be 
144.32 	expended to pay for any eligible activities authorized by Minnesota Statutes, chapter 
144.33 	469, within the redevelopment area that includes the district. All such expenditures are 
144.34 	deemed to be activities within the district under Minnesota Statutes, section 469.1763, 
144.35 	subdivisions 2, 3, and 4. The Housing and Redevelopment Authority of the city of South 
145.1 	St. Paul must collect the second half of the 2009 tax increment from the existing Concord 
145.2 	Street tax increment district and use the tax increment for eligible activities within the 
145.3 	redevelopment area.
145.4 		Subd. 4.Adjusted net tax capacity. The captured tax capacity of the district must 
145.5 	be included in the adjusted net tax capacity of the city, county, and school district for the 
145.6 	purposes of determining local government aid, education aid, and county program aid. 
145.7 	The county auditor shall report to the commissioner of revenue the amount of the captured 
145.8 	tax capacity for the district at the time the assessment abstracts are filed.

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

145.12 	Sec. 31. LOAN TO AIRCRAFT ASSEMBLY PROJECT.
 145.13 	Of the money available in the Minnesota investment fund provided in Minnesota 
145.14 	Statutes, section 116J.8731, $3,000,000 is appropriated in fiscal year 2010 to the 
145.15 	commissioner of employment and economic development for a loan to an aircraft 
145.16 	manufacturing and assembly company, associated with the aerospace industry, for 
145.17 	equipment utilized to establish an aircraft completion center at the Minneapolis-St. 
145.18 	Paul International Airport. The finishing center must use the state's vocational training 
145.19 	programs designed specifically for aircraft maintenance training and, to the extent 
145.20 	possible, recruit employees from these programs. The center must create at least 200 new 
145.21 	manufacturing jobs within 24 months of receiving the loan, and create not less than 500 
145.22 	new manufacturing jobs over a five-year period in Minnesota.
145.23 	This loan is not subject to loan limitations under Minnesota Statutes, section 
145.24 	116J.8731, subdivision 5, and any match requirements under Minnesota Statutes, section 
145.25 	116J.8371, subdivision 3, may be made from current resources. This is a onetime 
145.26 	appropriation and is effective the day following final enactment.

145.27 	Sec. 32. MOUNTAIN IRON ECONOMIC DEVELOPMENT AUTHORITY; 
145.28 	WIND ENERGY PROJECT.
 145.29 	(a) The Mountain Iron economic development authority may form or become a 
145.30 	member of a limited liability company organized under Minnesota Statutes, chapter 322B, 
145.31 	for the purpose of developing a community-based energy development project pursuant 
145.32 	to Minnesota Statutes, section 216B.1612. A limited liability company formed or joined 
145.33 	under this section is subject to the open meeting requirements established in Minnesota 
145.34 	Statutes, chapter 13D. A project authorized by this section may not sell, transmit, or 
146.1 	distribute the electrical energy at retail or provide for end use of the electrical energy to an 
146.2 	off-site facility of the economic development authority or the limited liability company. 
146.3 	Nothing in this section modifies the exclusive service territories or exclusive right to serve 
146.4 	as provided in Minnesota Statutes, sections 216B.37 to 216B.43.
146.5 	(b) The authority may acquire a leasehold interest in property outside its corporate 
146.6 	boundaries for the purpose of developing a community-based energy development project 
146.7 	as provided in Minnesota Statutes, section 216B.1612.

146.8 	EFFECTIVE DATE. This section is effective the day after the city of Mountain 
146.9 	Iron and its chief clerical officer comply with Minnesota Statutes, section 645.021, 
146.10 	subdivisions 2 and 3.

146.11 	Sec. 33. SEAWAY PORT AUTHORITY OF DULUTH; TAX INCREMENT 
146.12 	FINANCING DISTRICT; SPECIAL RULES.
 146.13 	If the Seaway Port Authority of Duluth adopts a tax increment financing plan 
146.14 	or plans and the governing body of the city of Duluth approves the plan or plans 
146.15 	for one or more tax increment financing districts consisting of one or more parcels 
146.16 	identified as: 010-2730-00010; 010-2730-00020; 010-2730-00040; 010-2730-00050; 
146.17 	010-2730-00070; 010-2730-00080; 010-2730-00090; 010-2730-00100; 010-2730-00160; 
146.18 	010-2730-00180; 010-2730-00200; 010-2730-01250; 010-2730-01340; 010-2730-01350; 
146.19 	010-2730-01490; 010-2730-01500; 010-2730-01510; 010-2730-01520; 010-2730-01530; 
146.20 	010-2730-01540; 010-2730-01550; 010-2730-01560; 010-2730-01570; 010-2730-01580; 
146.21 	010-2730-01590; 010-2730-1300; 010-2746-1330; 010-2746-1440; 010-2746-1380; 
146.22 	010-3300-4560; 010-3300-4565; 010-3300-04570; 010-3300-04580; 010-3300-04640; 
146.23 	010-3300-04645; 010-3300-04650, the five-year rule under Minnesota Statutes, section 
146.24 	469.1763, subdivision 3, is extended to a ten-year period.

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

146.28 	Sec. 34. WINONA COUNTY ECONOMIC DEVELOPMENT AUTHORITY; 
146.29 	WIND ENERGY PROJECT.
 146.30 	(a) The Winona County economic development authority may form or become a 
146.31 	member of a limited liability company organized under Minnesota Statutes, chapter 322B, 
146.32 	for the purpose of developing a community-based energy development project pursuant 
146.33 	to Minnesota Statutes, section 216B.1612. A limited liability company formed or joined 
147.1 	under this section is subject to the open meeting requirements established in Minnesota 
147.2 	Statutes, chapter 13D. A project authorized by this section may not sell, transmit, or 
147.3 	distribute the electrical energy at retail or provide for end use of the electrical energy to an 
147.4 	off-site facility of the economic development authority or the limited liability company. 
147.5 	Nothing in this section modifies the exclusive service territories or exclusive right to serve 
147.6 	as provided in Minnesota Statutes, sections 216B.37 to 216B.43.
147.7 	(b) The authority may acquire a leasehold interest in property outside its corporate 
147.8 	boundaries for the purpose of developing a community-based energy development project 
147.9 	as provided in Minnesota Statutes, section 216B.1612.

147.10 	EFFECTIVE DATE. This section is effective the day after the county of Winona 
147.11 	and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 
147.12 	2 and 3.

147.13 	Sec. 35.  REPEALER.
 147.14 	(a) Laws 1996, chapter 464, article 1, section 8, subdivisions 3 and 5, are repealed.
147.15 	(b) Laws 2008, chapter 366, article 5, section 30, subdivision 7, is repealed.

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

147.17 	ARTICLE 7
147.18 	PUBLIC FINANCE

147.19 	Section 1. [16A.647] TAX CREDIT AND INTEREST SUBSIDY BONDS.
147.20 		Subdivision 1.Authority to issue. When authorized by law to issue state general 
147.21 	obligation bonds, the commissioner may issue all or part of the bonds as tax credit bonds 
147.22 	or as interest subsidy bonds or a combination of the two.
147.23 		Subd. 2.Definitions. (a) For purposes of this section, the following terms have 
147.24 	the meanings given them.
147.25 	(b) "Tax credit bonds" means bonds, the interest on which is includable in the 
147.26 	income of the owner of the bonds for federal income tax purposes, but for which the 
147.27 	owner is entitled to a federal tax credit.
147.28 	(c) "Interest subsidy bonds" means bonds, the interest on which is includable in the 
147.29 	income of the owner of the bonds for federal income tax purposes, but for which the 
147.30 	issuer is entitled to federal interest subsidy payments based on a percentage of the interest 
147.31 	payable on the interest subsidy bonds.
147.32 		Subd. 3.Method of sale. Notwithstanding the provisions of section 16A.641, 
147.33 	subdivision 4, the commissioner may sell any series of tax credit bonds or interest 
148.1 	subsidy bonds at negotiated sale upon the terms and conditions and the restrictions the 
148.2 	commissioner prescribes, but the commissioner may contract for investment banking 
148.3 	and banking services only after receiving competitive proposals for the services. The 
148.4 	commissioner may enter into all contracts deemed necessary or desirable to accomplish 
148.5 	the sale in a cost-effective manner.
148.6 		Subd. 4.Sinking fund. The commissioner's order authorizing the issuance of 
148.7 	interest subsidy bonds must establish a separate sinking fund account for the interest 
148.8 	subsidy bonds in the state bond fund. There is annually appropriated, as received, to each 
148.9 	interest subsidy bond account, in addition to amounts appropriated under section 16A.641, 
148.10 	the interest subsidy payments received from the federal government with respect to that 
148.11 	issue of interest subsidy bonds in that year.
148.12 		Subd. 5.Sale. Tax credit bonds and interest subsidy bonds must be sold at a price 
148.13 	not less than 98 percent of their stated principal amount. No state trunk highway bond 
148.14 	may be sold for a price of less than par and accrued interest.

148.15 	Sec. 2. Minnesota Statutes 2008, section 37.31, subdivision 8, is amended to read:
148.16 		Subd. 8.Expiration. The authority to issue bonds, other than bonds to refund 
148.17 	outstanding bonds, under this section expires July 1, 2009 2015.

148.18 	Sec. 3. Minnesota Statutes 2008, section 126C.55, subdivision 4, is amended to read:
148.19 		Subd. 4.Pledge of district's full faith and credit. If, at the request of a school 
148.20 	district or intermediate school district, the state has paid part or all of the principal or 
148.21 	interest due on a district's debt obligation on a specific date, the pledge of the full faith and 
148.22 	credit and unlimited taxing powers of the school district or the member districts of the 
148.23 	intermediate district to repay the principal and interest due on those debt obligations shall 
148.24 	also, without an election or the requirement of a further authorization, become a pledge of 
148.25 	the full faith and credit and unlimited taxing powers of the school district or the member 
148.26 	districts of the intermediate district to repay to the state the amount paid, with interest. 
148.27 	Amounts paid by the state must be repaid in the order in which the state payments were 
148.28 	made. Whenever the state pays under this section interest on bonds for which the issuer is 
148.29 	entitled to federal interest subsidy payments, the state is subrogated to the issuer's rights to 
148.30 	any federal interest subsidy payments relating to the interest paid by the state, unless and 
148.31 	until the state has been reimbursed by the issuer in full.

148.32 	Sec. 4. Minnesota Statutes 2008, section 204B.46, is amended to read:
148.33 	204B.46 MAIL ELECTIONS; QUESTIONS. 
149.1 	A county, municipality, or school district submitting questions to the voters at a 
149.2 	special election may conduct an election by mail with no polling place other than the office 
149.3 	of the auditor or clerk. No more than two questions may be submitted at a mail election 
149.4 	and no offices may be voted on at a mail election. Notice of the election must be given 
149.5 	to the county auditor at least 53 days prior to the election. This notice shall also fulfill 
149.6 	the requirements of Minnesota Rules, part 8210.3000. The special mail ballot procedures 
149.7 	must be posted at least six weeks prior to the election. No earlier than 20 or later than 14 
149.8 	days prior to the election, the auditor or clerk shall mail ballots by nonforwardable mail 
149.9 	to all voters registered in the county, municipality, or school district. Eligible voters not 
149.10 	registered at the time the ballots are mailed may apply for ballots pursuant to chapter 203B.

149.11 	Sec. 5. Minnesota Statutes 2008, section 360.036, subdivision 2, is amended to read:
149.12 		Subd. 2.Issuance of bonds. (a) Bonds to be issued by a municipality under sections 
149.13 	360.011 to 360.076, shall be authorized and issued in the manner and within the limitation 
149.14 	prescribed by laws or the charter of the municipality for the issuance and authorization of 
149.15 	bonds for public purposes generally, except as provided in paragraphs (b) and (c). 
149.16 	(b) No election is required to authorize the issuance of the bonds if:
149.17 	(1) a board organized under section 360.042 recommends by a resolution adopted 
149.18 	by a vote of not less than 60 percent of its members the issuance of bonds, and the 
149.19 	bonds are authorized by a resolution of the governing body of each of the municipalities 
149.20 	acting jointly pursuant to section 360.042, adopted by a vote of not less than 60 percent 
149.21 	of its members; or
149.22 	(2) the bonds are authorized by a resolution of the governing body of the 
149.23 	municipality, adopted by a vote of not less than 60 percent of its members; or
149.24 	(3) the bonds are being issued for the purpose of financing the costs of constructing, 
149.25 	enlarging, or improving airports and other air navigation facilities; and
149.26 	(i) the governing body estimates that passenger facility charges and other revenues 
149.27 	pledged to the payment thereof will be at least 20 percent of the debt service payable 
149.28 	on the bonds in any year;
149.29 	(ii) the project will be funded in part by a state or federal grant for airport 
149.30 	development; and
149.31 	(iii) the principal amount of the bonds issued under this clause does not exceed 25 
149.32 	percent of the amount of the state or federal grant.
149.33 	(c) If the bonds are general obligations of the municipality, the levy of taxes required 
149.34 	by section 475.61 to pay principal and interest on the bonds is not included in computing 
149.35 	or applying any levy limitation applicable to the municipality.

150.1 	Sec. 6. Minnesota Statutes 2008, section 366.095, subdivision 1, is amended to read:
150.2 		Subdivision 1.Certificates of indebtedness. The town board may issue certificates 
150.3 	of indebtedness within the debt limits for a town purpose otherwise authorized by law. 
150.4 	The certificates shall be payable in not more than five ten years and be issued on the terms 
150.5 	and in the manner as the board may determine. If the amount of the certificates to be 
150.6 	issued exceeds 0.25 percent of the market value of the town, they shall not be issued for at 
150.7 	least ten days after publication in a newspaper of general circulation in the town of the 
150.8 	board's resolution determining to issue them. If within that time, a petition asking for an 
150.9 	election on the proposition signed by voters equal to ten percent of the number of voters 
150.10 	at the last regular town election is filed with the clerk, the certificates shall not be issued 
150.11 	until their issuance has been approved by a majority of the votes cast on the question at 
150.12 	a regular or special election. A tax levy shall be made to pay the principal and interest 
150.13 	on the certificates as in the case of bonds.

150.14 	Sec. 7. Minnesota Statutes 2008, section 373.47, subdivision 1, is amended to read:
150.15 		Subdivision 1. Authority to incur debt. Subject to prior approval by the Statewide 
150.16 	Radio Board under section 403.36, the governing body of a county may finance the cost of 
150.17 	designing, constructing, and acquiring public safety communication system infrastructure 
150.18 	and equipment for use on the statewide, shared public safety radio system by issuing: 
150.19 	(1) capital improvement bonds under section 373.40, as if the infrastructure and 
150.20 	equipment qualified as a "capital improvement" within the meaning of section 373.40, 
150.21 	subdivision 1, paragraph (b), bonds issued under this section are exempt from and shall 
150.22 	not be included in calculating the limitations in section 373.40, subdivision 4; and 
150.23 	(2) capital notes under the provisions of section 373.01, subdivision 3, as if the 
150.24 	equipment qualified as "capital equipment" within the meaning of section 373.01, 
150.25 	subdivision 3.

150.26 	EFFECTIVE DATE. This section is effective the day following final enactment, 
150.27 	and applies to bonds issued after May 22, 2002.

150.28 	Sec. 8. Minnesota Statutes 2008, section 446A.086, is amended by adding a 
150.29 	subdivision to read:
150.30 		Subd. 12.Federal interest subsidy payments. Whenever the state pays under 
150.31 	this section interest on bonds for which the issuer is entitled to federal interest subsidy 
150.32 	payments, the state is subrogated to the issuer's rights to any federal interest subsidy 
150.33 	payments relating to the interest paid by the state, unless and until the state has been 
150.34 	reimbursed by the issuer in full.

151.1 	Sec. 9. Minnesota Statutes 2008, section 469.005, subdivision 1, is amended to read:
151.2 		Subdivision 1.County and multicounty authorities. The area of operation of a 
151.3 	county authority shall include all of the county for which it is created, and in case of 
151.4 	a multicounty authority, it shall include all of the political subdivisions for which the 
151.5 	multicounty authority is created; provided, that a county authority or a multicounty 
151.6 	authority shall not undertake any project within the boundaries of any city which has not 
151.7 	empowered the authority to function therein as provided in section 469.004 unless a 
151.8 	resolution has been adopted by the governing body of the city, and by any authority which 
151.9 	has been established in the city, declaring that there is a need for the county or multicounty 
151.10 	authority to exercise its powers in the city. A resolution is not required for the operation of 
151.11 	a Section 8 program or a public housing scattered site project.

151.12 	Sec. 10. Minnesota Statutes 2008, section 469.015, subdivision 1, is amended to read:
151.13 		Subdivision 1.Bids; notice. All construction work, and work of demolition or 
151.14 	clearing, and every purchase of equipment, supplies, or materials, necessary in carrying 
151.15 	out the purposes of sections 469.001 to 469.047, that involve expenditure of $50,000 or 
151.16 	more shall be awarded by contract as provided in section 471.345. Before receiving 
151.17 	bids under section 471.345, subdivision 3, the authority shall publish, once a week for 
151.18 	two consecutive weeks in an official newspaper of general circulation in the community a 
151.19 	notice that bids will be received for that construction work, or that purchase of equipment, 
151.20 	supplies, or materials. The notice shall state the nature of the work and the terms and 
151.21 	conditions upon which the contract is to be let, naming a time and place where bids will 
151.22 	be received, opened and read publicly, which time shall be not less than seven days after 
151.23 	the date of the last publication. After the bids have been received, opened and read 
151.24 	publicly and recorded, the authority shall award the contract to the lowest responsible 
151.25 	bidder, provided that the authority reserves the right to reject any or all bids. Each 
151.26 	contract shall be executed in writing, and the person to whom the contract is awarded 
151.27 	shall give sufficient bond to the authority for its faithful performance. If no satisfactory 
151.28 	bid is received, the authority may readvertise. The authority may establish reasonable 
151.29 	qualifications to determine the fitness and responsibility of bidders and to require bidders 
151.30 	to meet the qualifications before bids are accepted.  

151.31 	Sec. 11. Minnesota Statutes 2008, section 469.015, subdivision 2, is amended to read:
151.32 		Subd. 2.Exception; emergency. If the authority by a vote of four-fifths of its 
151.33 	members shall declare that an emergency exists requiring the immediate purchase of 
151.34 	any equipment or material or supplies at a cost in excess of $50,000 but not exceeding 
152.1 	$75,000 the amount provided in section 471.345, or making of emergency repairs, it shall 
152.2 	not be necessary to advertise for bids, but the material, equipment, or supplies may be 
152.3 	purchased in the open market at the lowest price obtainable, or the emergency repairs may 
152.4 	be contracted for or performed without securing formal competitive bids. An emergency, 
152.5 	for purposes of this subdivision, shall be understood to be unforeseen circumstances or 
152.6 	conditions which result in the placing in jeopardy of human life or property.

152.7 	Sec. 12. Minnesota Statutes 2008, section 469.015, subdivision 3, is amended to read:
152.8 		Subd. 3.Performance and payment bonds. Performance and payment bonds shall 
152.9 	be required from contractors for any works of construction as provided in and subject to 
152.10 	all the provisions of sections 574.26 to 574.31except for contracts entered into by an 
152.11 	authority for an expenditure of less than $50,000.  

152.12 	Sec. 13. Minnesota Statutes 2008, section 469.034, subdivision 2, is amended to read:
152.13 		Subd. 2.General obligation revenue bonds. (a) An authority may pledge the 
152.14 	general obligation of the general jurisdiction governmental unit as additional security for 
152.15 	bonds payable from income or revenues of the project or the authority. The authority 
152.16 	must find that the pledged revenues will equal or exceed 110 percent of the principal and 
152.17 	interest due on the bonds for each year. The proceeds of the bonds must be used for a 
152.18 	qualified housing development project or projects. The obligations must be issued and 
152.19 	sold in the manner and following the procedures provided by chapter 475, except the 
152.20 	obligations are not subject to approval by the electors, and the maturities may extend to 
152.21 	not more than 35 years for obligations sold to finance housing for the elderly and 40 years 
152.22 	for other obligations issued under this subdivision. The authority is the municipality for 
152.23 	purposes of chapter 475.
152.24 	(b) The principal amount of the issue must be approved by the governing body of 
152.25 	the general jurisdiction governmental unit whose general obligation is pledged. Public 
152.26 	hearings must be held on issuance of the obligations by both the authority and the general 
152.27 	jurisdiction governmental unit. The hearings must be held at least 15 days, but not more 
152.28 	than 120 days, before the sale of the obligations.
152.29 	(c) The maximum amount of general obligation bonds that may be issued and 
152.30 	outstanding under this section equals the greater of (1) one-half of one percent of 
152.31 	the taxable market value of the general jurisdiction governmental unit whose general 
152.32 	obligation is pledged, or (2) $3,000,000. In the case of county or multicounty general 
152.33 	obligation bonds, the outstanding general obligation bonds of all cities in the county 
153.1 	or counties issued under this subdivision must be added in calculating the limit under 
153.2 	clause (1).
153.3 	(d) "General jurisdiction governmental unit" means the city in which the housing 
153.4 	development project is located. In the case of a county or multicounty authority, the 
153.5 	county or counties may act as the general jurisdiction governmental unit. In the case of 
153.6 	a multicounty authority, the pledge of the general obligation is a pledge of a tax on the 
153.7 	taxable property in each of the counties.
153.8 	(e) "Qualified housing development project" means a housing development project 
153.9 	providing housing either for the elderly or for individuals and families with incomes not 
153.10 	greater than 80 percent of the median family income as estimated by the United States 
153.11 	Department of Housing and Urban Development for the standard metropolitan statistical 
153.12 	area or the nonmetropolitan county in which the project is located. The project must be 
153.13 	owned for the term of the bonds either by the authority or by a limited partnership or other 
153.14 	entity in which the authority or another entity under the sole control of the authority is the 
153.15 	sole general partner and the partnership or other entity must receive (1) an allocation from 
153.16 	the Department of Finance or an entitlement issuer of tax-exempt bonding authority for 
153.17 	the project and a preliminary determination by the Minnesota Housing Finance Agency 
153.18 	or the applicable suballocator of tax credits that the project will qualify for four percent 
153.19 	low-income housing tax credits or (2) a reservation of nine percent low-income housing 
153.20 	tax credits from the Minnesota Housing Finance Agency or a suballocator of tax credits 
153.21 	for the project. A qualified housing development project may admit nonelderly individuals 
153.22 	and families with higher incomes if:
153.23 	(1) three years have passed since initial occupancy;
153.24 	(2) the authority finds the project is experiencing unanticipated vacancies resulting in 
153.25 	insufficient revenues, because of changes in population or other unforeseen circumstances 
153.26 	that occurred after the initial finding of adequate revenues; and
153.27 	(3) the authority finds a tax levy or payment from general assets of the general 
153.28 	jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher 
153.29 	income individuals or families are not admitted.
153.30 	(f) The authority may issue bonds to refund bonds issued under this subdivision in 
153.31 	accordance with section 475.67. The finding of the adequacy of pledged revenues required 
153.32 	by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the 
153.33 	issuance of refunding bonds. This paragraph applies to refunding bonds issued on and 
153.34 	after July 1, 1992.

153.35 	Sec. 14. Minnesota Statutes 2008, section 469.040, subdivision 2, is amended to read:
154.1 		Subd. 2.Leased property, exception. Notwithstanding the provisions of 
154.2 	subdivision 1, any property other than property to be operated as a parking facility that 
154.3 	the authority leases to private individuals or corporations for development in connection 
154.4 	with a redevelopment project shall have the same tax status as if the leased property were 
154.5 	owned by the private individuals or corporations. This subdivision does not apply to 
154.6 	leases by the authority to individuals or families for residential use.

154.7 	EFFECTIVE DATE. This section applies to housing projects and housing 
154.8 	development projects constructed or acquired by an authority after July 1, 1987, for 
154.9 	property taxes payable in 2010 and thereafter.

154.10 	Sec. 15. Minnesota Statutes 2008, section 469.040, subdivision 4, is amended to read:
154.11 		Subd. 4.Facilities funded from multiple sources. In the metropolitan area, as 
154.12 	defined in section 473.121, subdivision 2, the tax treatment provided in subdivision 3 
154.13 	applies to that portion of any multifamily rental housing facility represented by the ratio of 
154.14 	(1) the number of units in the facility that are subject to the requirements of constructed 
154.15 	with funds provided under Section 5 of the United States Housing Act of 1937, and are 
154.16 	receiving operating subsidy under Section 5 or rental assistance under Section 8 of the 
154.17 	United States Housing Act of 1937 as the result of the implementation of a federal court 
154.18 	order or consent decree to (2) the total number of units within the facility.
154.19 	The housing and redevelopment authority for the city in which the facility is located, 
154.20 	any public entity exercising the powers of such housing and redevelopment authority, or 
154.21 	the county housing and redevelopment authority for the county in which the facility is 
154.22 	located, shall annually certify to the assessor responsible for assessing the facility, at the 
154.23 	time and in the manner required by the assessor, the number of units in the facility that 
154.24 	are subject to the requirements of constructed with funds provided under Section 5 of the 
154.25 	United States Housing Act of 1937, and are receiving operating subsidy under Section 5 
154.26 	or rental assistance under Section 8 of the United States Housing Act of 1937.
154.27 	Nothing in this subdivision shall prevent that portion of the facility not subject to 
154.28 	this subdivision from meeting the requirements of section 273.128, and for that purpose 
154.29 	the total number of units in the facility must be taken into account.

154.30 	Sec. 16. Minnesota Statutes 2008, section 469.153, subdivision 2, is amended to read:
154.31 		Subd. 2. Project. (a) "Project" means (1) any properties, real or personal, used 
154.32 	or useful in connection with a revenue producing enterprise, or any combination of 
154.33 	two or more such enterprises engaged or to be engaged in generating, transmitting, or 
154.34 	distributing electricity, assembling, fabricating, manufacturing, mixing, processing, 
155.1 	storing, warehousing, or distributing any products of agriculture, forestry, mining, or 
155.2 	manufacture, or in research and development activity in this field, or in the manufacturing, 
155.3 	creation, or production of intangible property, including any patent, copyright, formula, 
155.4 	process, design, know how, format, or other similar item; (2) any properties, real or 
155.5 	personal, used or useful in the abatement or control of noise, air, or water pollution, or in 
155.6 	the disposal of solid wastes, in connection with a revenue producing enterprise, or any 
155.7 	combination of two or more such enterprises engaged or to be engaged in any business 
155.8 	or industry; (3) any properties, real or personal, used or useful in connection with the 
155.9 	business of telephonic communications, conducted or to be conducted by a telephone 
155.10 	company, including toll lines, poles, cables, switching, and other electronic equipment 
155.11 	and administrative, data processing, garage, and research and development facilities; 
155.12 	(4) any properties, real or personal, used or useful in connection with a district heating 
155.13 	system, consisting of the use of one or more energy conversion facilities to produce hot 
155.14 	water or steam for distribution to homes and businesses, including cogeneration facilities, 
155.15 	distribution lines, service facilities, and retrofit facilities for modifying the user's heating 
155.16 	or water system to use the heat energy converted from the steam or hot water. 
155.17 	(b) "Project" also includes any properties, real or personal, used or useful in 
155.18 	connection with a revenue producing enterprise, or any combination of two or more 
155.19 	such enterprises engaged in any business. 
155.20 	(c) "Project" also includes any properties, real or personal, used or useful for the 
155.21 	promotion of tourism in the state. Properties may include hotels, motels, lodges, resorts, 
155.22 	recreational facilities of the type that may be acquired under section 471.191, and related 
155.23 	facilities. 
155.24 	(d) "Project" also includes any properties, real or personal, used or useful in 
155.25 	connection with a revenue producing enterprise, whether or not operated for profit, 
155.26 	engaged in providing health care services, including hospitals, nursing homes, and related 
155.27 	medical facilities. 
155.28 	(e) "Project" does not include any property to be sold or to be affixed to or consumed 
155.29 	in the production of property for sale, and does not include any housing facility to be 
155.30 	rented or used as a permanent residence. 
155.31 	(f) "Project" also means the activities of any revenue producing enterprise involving 
155.32 	the construction, fabrication, sale, or leasing of equipment or products to be used in 
155.33 	gathering, processing, generating, transmitting, or distributing solar, wind, geothermal, 
155.34 	biomass, agricultural or forestry energy crops, or other alternative energy sources for 
155.35 	use by any person or any residential, commercial, industrial, or governmental entity in 
156.1 	heating, cooling, or otherwise providing energy for a facility owned or operated by that 
156.2 	person or entity. 
156.3 	(g) "Project" also includes any properties, real or personal, used or useful in 
156.4 	connection with a county jail, county regional jail, community corrections facilities 
156.5 	authorized by chapter 401, or other law enforcement facilities, the plans for which are 
156.6 	approved by the commissioner of corrections; provided that the provisions of section 
156.7 	469.155, subdivisions 7 and 13, do not apply to those projects. 
156.8 	(h) "Project" also includes any real properties used or useful in furtherance of the 
156.9 	purpose and policy of section 469.141. 
156.10 	(i) "Project" also includes related facilities as defined by section 471A.02, 
156.11 	subdivision 11. 
156.12 	(j) "Project" also includes an undertaking to purchase the obligations of local 
156.13 	governments located in whole or in part within the boundaries of the municipality that are 
156.14 	issued or to be issued for public purposes. 

156.15 	Sec. 17. Minnesota Statutes 2008, section 471.191, subdivision 1, is amended to read:
156.16 		Subdivision 1.Lease to nonprofit. Any city operating a program of public 
156.17 	recreation and playgrounds pursuant to sections 471.15 to 471.19 may acquire or lease, 
156.18 	equip, and maintain land, buildings, and other recreational facilities, including, but 
156.19 	without limitation, outdoor or indoor swimming pools, skating rinks and arenas, athletic 
156.20 	fields, golf courses, marinas, concert halls, museums, and facilities for other kinds of 
156.21 	athletic or cultural participation, contests, conventions, conferences, and exhibitions, 
156.22 	together with related automobile parking facilities as defined in section 459.14, and may 
156.23 	expend funds for the operation of such program and borrow and expend funds for capital 
156.24 	costs thereof pursuant to the provisions of this section. A school district operating a 
156.25 	program of public recreation and playgrounds has the rights provided in this section. Any 
156.26 	facilities to be operated by a nonprofit corporation, as contemplated in section 471.16, 
156.27 	may be leased to the corporation upon such rentals and for such term, not exceeding 30 
156.28 	years, and subject to such other provisions as may be agreed; including but not limited to 
156.29 	provisions (a) permitting the lessee, subject to whatever conditions are stated, to provide 
156.30 	for the construction and equipment of the facilities by any means available to it and in the 
156.31 	manner determined by it, without advertisement for bids as required for other municipal 
156.32 	facilities, and (b) granting the lessee the option to renew the lease upon such conditions 
156.33 	and rentals, or to purchase the facilities at such price, as may be agreed; provided that (c) 
156.34 	any such lease shall require the lessee to pay net rentals sufficient to pay the principal, 
156.35 	interest, redemption premiums, and other expenses when due with respect to all city 
157.1 	bonds issued for the acquisition or betterment of the facilities, less such amount of taxes 
157.2 	and special assessments, if any, as may become payable in any year of the term of the 
157.3 	lease, on the land, building, or other facilities leased, and (d) no option shall be granted 
157.4 	to purchase the facilities at any time at a price less than the amount required to pay all 
157.5 	principal and interest to become due on such bonds to the earliest date or dates on which 
157.6 	they may be paid and redeemed, and all redemption premiums and other expenses of 
157.7 	such payment and redemption.

157.8 	Sec. 18. Minnesota Statutes 2008, section 474A.02, subdivision 2, is amended to read:
157.9 		Subd. 2.Annual volume cap. "Annual volume cap" means the aggregate dollar 
157.10 	amount of obligations constituting "private activity bonds" under federal tax law and 
157.11 	bearing interest excluded from gross income for purposes of federal income taxation 
157.12 	which, under the provisions of federal tax law, may be issued in one year by issuers.
157.13 	Employees of the department shall handle the volume cap allocations for obligations 
157.14 	permitted under the federal American Recovery and Reinvestment Act of 2009, whether 
157.15 	taxable or tax-exempt, in accordance with orders of the commissioner.

157.16 	Sec. 19. Minnesota Statutes 2008, section 474A.02, subdivision 14, is amended to read:
157.17 		Subd. 14.Manufacturing project. "Manufacturing project" means any facility 
157.18 	which is used in the manufacturing or production of tangible personal property, 
157.19 	including the processing resulting in a change in the condition of the property, or in the 
157.20 	manufacturing, creation, or production of intangible property, including any patent, 
157.21 	copyright, formula, process, design, know how, format, or other similar item.

157.22 	Sec. 20. Minnesota Statutes 2008, section 475.67, subdivision 8, is amended to read:
157.23 		Subd. 8.Escrow account securities. Securities purchased for the escrow account 
157.24 	shall be limited to:
157.25 	(a) general obligations of the United States, securities whose principal and interest 
157.26 	payments are guaranteed by the United States, and securities issued by the following 
157.27 	agencies of the United States: Banks for Cooperatives, Federal Home Loan Banks, 
157.28 	Federal Intermediate Credit Banks, Federal Land Banks, and the Federal National 
157.29 	Mortgage Association; or
157.30 	(b) obligations issued or guaranteed by any state or any political subdivision of a 
157.31 	state, which at the date of purchase are rated in the highest or the next highest rating 
157.32 	given category  by Standard and Poor's Corporation, Moody's Investors Service, or a 
158.1 	similar nationally recognized rating agency, but not less than the rating on the refunded 
158.2 	bonds immediately prior to the refunding.
158.3 	"Rating category," as used in this subdivision, means a generic securities rating 
158.4 	category, without regard in the case of a long-term rating category to any refinement or 
158.5 	gradation of such long-term rating category by a numerical modifier or otherwise.

158.6 	Sec. 21. Laws 1971, chapter 773, section 4, as amended by Laws 1976, chapter 234, 
158.7 	section 2, is amended to read:
158.8 	Sec. 4. No proceeds of any bonds issued pursuant to section 1 hereof shall be 
158.9 	expended for the construction or equipment of any portion of the St. Paul auditorium or 
158.10 	civic center connected thereto; nor shall any proceeds be expended for the acquisition or 
158.11 	betterment of the building known as the Lowry Medical Arts Annex. All bonds issued 
158.12 	under this act shall mature at any time or times within ten or, for bonds for public buildings 
158.13 	or parking structures, 30 years from the date of issue.

158.14 	EFFECTIVE DATE. This section is effective the day after the city council and the 
158.15 	chief clerical officer of the city of St. Paul have timely completed their compliance with 
158.16 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.

158.17 	Sec. 22. ST. PAUL PORT AUTHORITY CREDIT.
 158.18 	Notwithstanding Minnesota Statutes, section 474A.061, subdivision 4, the 
158.19 	commissioner of finance shall apply the $31,800 deposit paid in 2008 for a proposed issue 
158.20 	of $1,590,000 in tax exempt bonds by the St. Paul Port Authority for District Cooling 
158.21 	St. Paul, Inc. to an application for an allocation of tax exempt bonds by the St. Paul Port 
158.22 	Authority for the same project.

158.23 	EFFECTIVE DATE. This section is effective the day following final enactment 
158.24 	and expires January 1, 2011.

158.25 	Sec. 23. EFFECTIVE DATE.
 158.26 	Except where provided otherwise, this article is effective the day following final 
158.27 	enactment.

158.28 	ARTICLE 8
158.29 	MINERALS

158.30 	Section 1. Minnesota Statutes 2008, section 298.17, is amended to read:
159.1 		Subdivision 1.Generally. All occupation taxes paid by persons, copartnerships, 
159.2 	companies, joint stock companies, corporations, and associations, however or for whatever 
159.3 	purpose organized, engaged in the business of mining or producing iron ore or other ores, 
159.4 	when collected shall be apportioned and distributed in accordance with the Constitution 
159.5 	of the state of Minnesota, article X, section 3, in the manner following: 90 percent shall 
159.6 	be deposited in the state treasury and credited to the general fund of which four-ninths 
159.7 	shall be used for the support of elementary and secondary schools; and ten percent of the 
159.8 	proceeds of the tax imposed by this section shall be deposited in the state treasury and 
159.9 	credited to the general fund for the general support of the university.
159.10 		Subd. 2.IRRRB account. Of the moneys apportioned to the general fund by 
159.11 	this section there is annually appropriated and credited to the Iron Range Resources and 
159.12 	Rehabilitation Board account in the special revenue fund an amount equal to that which 
159.13 	would have been generated by a 1.5 cent tax imposed by section 298.24 on each taxable 
159.14 	ton produced in the preceding calendar year, to be expended for the purposes of section 
159.15 	298.22. The money appropriated pursuant to this section shall subdivision must be used 
159.16 	(1) to provide environmental development grants to local governments located within any 
159.17 	county in region 3 as defined in governor's executive order number 60, issued on June 
159.18 	12, 1970, which does not contain a municipality qualifying pursuant to section 273.134, 
159.19 	paragraph (b), or (2) to provide economic development loans or grants to businesses 
159.20 	located within any such county, provided that the county board or an advisory group 
159.21 	appointed by the county board to provide recommendations on economic development 
159.22 	shall make recommendations to the Iron Range Resources and Rehabilitation Board 
159.23 	regarding the loans. Payment to the Iron Range Resources and Rehabilitation Board 
159.24 	account shall be made by May 15 annually.
159.25 	Of the money allocated to Koochiching County, one-third must be paid to the 
159.26 	Koochiching County Economic Development Commission.
159.27 		Subd. 3.2009 collections. If the amount of occupation tax proceeds collected 
159.28 	in 2009 exceeds the amount of occupation tax that was forecast to be collected in the 
159.29 	February 2009 forecast, one-half of the amount credited to the general fund under 
159.30 	subdivision 1 and not used for the support of elementary and secondary schools or the 
159.31 	university, that exceeds the amount that would have been credited to the general fund 
159.32 	for noneducation purposes if the tax had been collected at the forecast amount, must be 
159.33 	deposited in the Minnesota 21st Century Minerals Fund created in section 116J.423.

159.34 	Sec. 2. Minnesota Statutes 2008, section 298.227, is amended to read:
159.35 	298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
160.1 	(a) An amount equal to that distributed pursuant to each taconite producer's taxable 
160.2 	production and qualifying sales under section 298.28, subdivision 9a, shall be held by 
160.3 	the Iron Range Resources and Rehabilitation Board in a separate taconite economic 
160.4 	development fund for each taconite and direct reduced ore producer. Money from the 
160.5 	fund for each producer shall be released by the commissioner after review by a joint 
160.6 	committee consisting of an equal number of representatives of the salaried employees and 
160.7 	the nonsalaried production and maintenance employees of that producer. The District 11 
160.8 	director of the United States Steelworkers of America, on advice of each local employee 
160.9 	president, shall select the employee members. In nonorganized operations, the employee 
160.10 	committee shall be elected by the nonsalaried production and maintenance employees. 
160.11 	The review must be completed no later than six months after the producer presents a 
160.12 	proposal for expenditure of the funds to the committee. The funds held pursuant to this 
160.13 	section may be released only for workforce development and associated public facility 
160.14 	improvement, or for acquisition of plant and stationary mining equipment and facilities 
160.15 	for the producer or for research and development in Minnesota on new mining, or 
160.16 	taconite, iron, or steel production technology, but only if the producer provides a matching 
160.17 	expenditure to be used for the same purpose of at least 50 percent of the distribution 
160.18 	based on 14.7 cents per ton beginning with distributions in 2002. Effective for proposals 
160.19 	for expenditures of money from the fund beginning May 26, 2007, the commissioner 
160.20 	may not release the funds before the next scheduled meeting of the board. If the board 
160.21 	rejects a proposed expenditure, the funds must be deposited in the Taconite Environmental 
160.22 	Protection Fund under sections 298.222 to 298.225. If a producer uses money which has 
160.23 	been released from the fund prior to May 26, 2007 to procure haulage trucks, mobile 
160.24 	equipment, or mining shovels, and the producer removes the piece of equipment from the 
160.25 	taconite tax relief area defined in section 273.134 within ten years from the date of receipt 
160.26 	of the money from the fund, a portion of the money granted from the fund must be repaid 
160.27 	to the taconite economic development fund. The portion of the money to be repaid is 100 
160.28 	percent of the grant if the equipment is removed from the taconite tax relief area within 12 
160.29 	months after receipt of the money from the fund, declining by ten percent for each of the 
160.30 	subsequent nine years during which the equipment remains within the taconite tax relief 
160.31 	area. If a taconite production facility is sold after operations at the facility had ceased, any 
160.32 	money remaining in the fund for the former producer may be released to the purchaser of 
160.33 	the facility on the terms otherwise applicable to the former producer under this section. If 
160.34 	a producer fails to provide matching funds for a proposed expenditure within six months 
160.35 	after the commissioner approves release of the funds, the funds are available for release to 
160.36 	another producer in proportion to the distribution provided and under the conditions of 
161.1 	this section. Any portion of the fund which is not released by the commissioner within 
161.2 	one year of its deposit in the fund shall be divided between the taconite environmental 
161.3 	protection fund created in section 298.223 and the Douglas J. Johnson economic protection 
161.4 	trust fund created in section 298.292 for placement in their respective special accounts. 
161.5 	Two-thirds of the unreleased funds shall be distributed to the taconite environmental 
161.6 	protection fund and one-third to the Douglas J. Johnson economic protection trust fund. 
161.7 	(b) Notwithstanding the requirements of paragraph (a), setting the amount of 
161.8 	distributions and the review process, an amount equal to ten cents per taxable ton of 
161.9 	production in 2007, for distribution in 2008 only, that would otherwise be distributed 
161.10 	under paragraph (a), may be used for a loan for the cost of construction of a biomass 
161.11 	energy facility. This amount must be deducted from the distribution under paragraph 
161.12 	(a) for which a matching expenditure by the producer is not required. The granting of 
161.13 	the loan is subject to approval by the Iron Range Resources and Rehabilitation Board; 
161.14 	interest must be payable on the loan at the rate prescribed in section 298.2213, subdivision 
161.15 	3. Repayments of the loan and interest must be deposited in the northeast Minnesota 
161.16 	economic development fund established in section 298.2213. If a loan is not made under 
161.17 	this paragraph by July 1, 2009 2010, the amount that had been made available for the 
161.18 	loan under this paragraph must be transferred to the northeast Minnesota economic 
161.19 	development fund. Money distributed in 2008 to the fund established under this section 
161.20 	that exceeds ten cents per ton is available to qualifying producers under paragraph (a) 
161.21 	on a pro rata basis.
161.22 	If 2008 H.F. No. 1812 is enacted and includes a provision that amends this section 
161.23 	in a manner that is different from the amendment in this section, the amendment in this 
161.24 	section supersedes the amendment in 2008 H.F. No. 1812, notwithstanding section 645.26.

161.25 	Sec. 3. Minnesota Statutes 2008, section 298.24, subdivision 1, is amended to read:
161.26 		Subdivision 1.Imposed; calculation. (a) For concentrate produced in 2001, 2002, 
161.27 	and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and 
161.28 	quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon 
161.29 	the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore 
161.30 	concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the 
161.31 	same rate imposed for concentrates produced in 2004. For concentrates produced in 2009 
161.32 	and subsequent years, the tax is also imposed upon other iron-bearing material.
161.33 	(b) For concentrates produced in 2006 and subsequent years, the tax rate shall be 
161.34 	equal to the preceding year's tax rate plus an amount equal to the preceding year's tax 
161.35 	rate multiplied by the percentage increase in the implicit price deflator from the fourth 
162.1 	quarter of the second preceding year to the fourth quarter of the preceding year, that may 
162.2 	not be less than zero. "Implicit price deflator" means the implicit price deflator for the 
162.3 	gross domestic product prepared by the Bureau of Economic Analysis of the United 
162.4 	States Department of Commerce.
162.5 	(c) An additional tax is imposed equal to three cents per gross ton of merchantable 
162.6 	iron ore concentrate for each one percent that the iron content of the product exceeds 72 
162.7 	percent, when dried at 212 degrees Fahrenheit.
162.8 	(d) The tax on taconite and iron sulphides shall be imposed on the average of the 
162.9 	production for the current year and the previous two years. The rate of the tax imposed 
162.10 	will be the current year's tax rate. This clause shall not apply in the case of the closing 
162.11 	of a taconite facility if the property taxes on the facility would be higher if this clause 
162.12 	and section 298.25 were not applicable. The tax on other iron-bearing material shall be 
162.13 	imposed on the current year production.
162.14 	(e) If the tax or any part of the tax imposed by this subdivision is held to be 
162.15 	unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate 
162.16 	produced shall be imposed.
162.17 	(f) Consistent with the intent of this subdivision to impose a tax based upon the 
162.18 	weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 
162.19 	determine the weight of merchantable iron ore concentrate included in fluxed pellets by 
162.20 	subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 
162.21 	flux additives included in the pellets from the weight of the pellets. For purposes of this 
162.22 	paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 
162.23 	olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 
162.24 	No subtraction from the weight of the pellets shall be allowed for binders, mineral and 
162.25 	chemical additives other than basic flux additives, or moisture.
162.26 	(g)(1) Notwithstanding any other provision of this subdivision, for the first two years 
162.27 	of a plant's commercial production of direct reduced ore from ore mined in this state, no 
162.28 	tax is imposed under this section. As used in this paragraph, "commercial production" is 
162.29 	production of more than 50,000 tons of direct reduced ore in the current year or in any 
162.30 	prior year, "noncommercial production" is production of 50,000 tons or less of direct 
162.31 	reduced ore in any year, and "direct reduced ore" is ore that results in a product that has an 
162.32 	iron content of at least 75 percent. For the third year of a plant's commercial production of 
162.33 	direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate 
162.34 	otherwise determined under this subdivision. For the fourth commercial production year, 
162.35 	the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth 
162.36 	commercial production year, the rate is 75 percent of the rate otherwise determined under 
163.1 	this subdivision; and for all subsequent commercial production years, the full rate is 
163.2 	imposed. The exemption from production tax under this paragraph does not subject the 
163.3 	exempt property to ad valorem taxation.
163.4 	(2) Subject to clause (1), production of direct reduced ore in this state is subject to 
163.5 	the tax imposed by this section, but if that production is not produced by a producer of 
163.6 	taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron 
163.7 	sulfides, or other iron-bearing material, that is consumed in the production of direct 
163.8 	reduced iron in this state is not subject to the tax imposed by this section on taconite, 
163.9 	iron sulfides, or other iron-bearing material.
163.10 	(3) Notwithstanding any other provision of this subdivision, no tax is imposed 
163.11 	on direct reduced ore under this section during the facility's noncommercial production 
163.12 	of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 
163.13 	production of direct reduced ore is subject to the tax imposed by this section on taconite 
163.14 	and iron sulphides. Three-year average production of direct reduced ore does not 
163.15 	include production of direct reduced ore in any noncommercial year. Three-year average 
163.16 	production for a direct reduced ore facility that has noncommercial production is the 
163.17 	average of the commercial production of direct reduced ore for the current year and the 
163.18 	previous two commercial years.
163.19 	(4) This paragraph applies only to plants for which all environmental permits have 
163.20 	been obtained and construction has begun before July 1, 2008.

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

163.22 	Sec. 4. Minnesota Statutes 2008, section 298.28, subdivision 4, is amended to read:
163.23 		Subd. 4. School districts. (a) 23.15 cents per taxable ton, plus the increase provided 
163.24 	in paragraph (d) must be allocated to qualifying school districts to be distributed, based 
163.25 	upon the certification of the commissioner of revenue, under paragraphs (b), (c), and (f). 
163.26 	(b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which 
163.27 	the lands from which taconite was mined or quarried were located or within which the 
163.28 	concentrate was produced. The distribution must be based on the apportionment formula 
163.29 	prescribed in subdivision 2. 
163.30 	(ii) Four cents per taxable ton from each taconite facility must be distributed to 
163.31 	each affected school district for deposit in a fund dedicated to building maintenance 
163.32 	and repairs, as follows: 
163.33 	(1) proceeds from Keewatin Taconite or its successor are distributed to Independent 
163.34 	School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor 
163.35 	districts; 
164.1 	(2) proceeds from the Hibbing Taconite Company or its successor are distributed to 
164.2 	Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor 
164.3 	districts; 
164.4 	(3) proceeds from the Mittal Steel Company and Minntac or their successors are 
164.5 	distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia, 
164.6 	2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts; 
164.7 	(4) proceeds from the Northshore Mining Company or its successor are distributed 
164.8 	to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior, 
164.9 	or their successor districts; and 
164.10 	(5) proceeds from United Taconite or its successor are distributed to Independent 
164.11 	School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their 
164.12 	successor districts. 
164.13 	Revenues that are required to be distributed to more than one district shall be 
164.14 	apportioned according to the number of pupil units identified in section 126C.05, 
164.15 	subdivision 1, enrolled in the second previous year. 
164.16 	(c)(i) 15.72 cents per taxable ton, less any amount distributed under paragraph (e), 
164.17 	shall be distributed to a group of school districts comprised of those school districts which 
164.18 	qualify as a tax relief area under section 273.134, paragraph (b), or in which there is a 
164.19 	qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion 
164.20 	to school district indexes as follows: for each school district, its pupil units determined 
164.21 	under section 126C.05 for the prior school year shall be multiplied by the ratio of the 
164.22 	average adjusted net tax capacity per pupil unit for school districts receiving aid under 
164.23 	this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 
164.24 	ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 
164.25 	Each district shall receive that portion of the distribution which its index bears to the sum 
164.26 	of the indices for all school districts that receive the distributions. 
164.27 	(ii) Notwithstanding clause (i), each school district that receives a distribution 
164.28 	under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this 
164.29 	clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on 
164.30 	severed mineral values after reduction for any portion distributed to cities and towns under 
164.31 	section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy 
164.32 	reduction under section 126C.48, subdivision 8, for the second year prior to the year of the 
164.33 	distribution shall receive a distribution equal to the difference; the amount necessary to 
164.34 	make this payment shall be derived from proportionate reductions in the initial distribution 
164.35 	to other school districts under clause (i). 
165.1 	If there are insufficient tax proceeds to make the distribution provided under this 
165.2 	paragraph in any year, money must be transferred from the taconite property tax relief 
165.3 	account in subdivision 6, to the extent of the shortfall in the distribution.
165.4 	(d) Any school district described in paragraph (c) where a levy increase pursuant to 
165.5 	section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001, 
165.6 	shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the 
165.7 	pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous 
165.8 	year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent 
165.9 	times the district's taxable net tax capacity in the second previous year. 
165.10 	If the total amount provided by paragraph (d) is insufficient to make the payments 
165.11 	herein required then the entitlement of $175 per pupil unit shall be reduced uniformly 
165.12 	so as not to exceed the funds available. Any amounts received by a qualifying school 
165.13 	district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general 
165.14 	education aid which the district receives pursuant to section 126C.13 or the permissible 
165.15 	levies of the district. Any amount remaining after the payments provided in this paragraph 
165.16 	shall be paid to the commissioner of Iron Range resources and rehabilitation who shall 
165.17 	deposit the same in the taconite environmental protection fund and the Douglas J. Johnson 
165.18 	economic protection trust fund as provided in subdivision 11. 
165.19 	Each district receiving money according to this paragraph shall reserve the lesser of 
165.20 	the amount received under this paragraph or $25 times the number of pupil units served 
165.21 	in the district. It may use the money for early childhood programs or for outcome-based 
165.22 	learning programs that enhance the academic quality of the district's curriculum. The 
165.23 	outcome-based learning programs must be approved by the commissioner of education. 
165.24 	(e) There shall be distributed to any school district the amount which the school 
165.25 	district was entitled to receive under section 298.32 in 1975. 
165.26 	(f) Four cents per taxable ton must be distributed to qualifying school districts 
165.27 	according to the distribution specified in paragraph (b), clause (ii), and two cents per 
165.28 	taxable ton must be distributed according to the distribution specified in paragraph 
165.29 	(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48, 
165.30 	subdivision 8. 

165.31 	Sec. 5. Minnesota Statutes 2008, section 298.282, subdivision 1, is amended to read:
165.32 		Subdivision 1. Distribution of taconite municipal aid account. The amount 
165.33 	deposited with the county as provided in section 298.28, subdivision 3, must be distributed 
165.34 	as provided by this section among: (1) the municipalities comprising a tax relief taconite 
165.35 	assistance area under section 273.134 273.1341, paragraph (b); (2) a township that 
166.1 	contains a state park consisting primarily of an underground iron ore mine; and (3) a city 
166.2 	located within five miles of that state park, each being referred to in this section as a 
166.3 	qualifying municipality. 

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

166.5 	Sec. 6. Laws 2008, chapter 366, article 10, section 15, is amended to read:
166.6 	Sec. 15. 2008 DISTRIBUTIONS ONLY.
 166.7 	For distribution in 2008 only, a special fund is established to receive 11.4 cents 
166.8 	per ton that otherwise would be allocated under Minnesota Statutes, section 298.28, 
166.9 	subdivision 6. If sufficient funds are not available under Minnesota Statutes, section 
166.10 	298.28, subdivision 6, to make the payments required under this section and under 
166.11 	Minnesota Statutes, section 298.28, subdivision 6, the remaining amount needed to total 
166.12 	11.4 cents per ton may be taken from funds available under Minnesota Statutes, section 
166.13 	298.28, subdivision 9. If 2008 H.F. No. 1812 is enacted and includes a provision that 
166.14 	distributes funds that would otherwise be allocated under Minnesota Statutes, section 
166.15 	298.28, subdivision 6, in a manner different from the distribution required in this section, 
166.16 	the distribution in this section supersedes the distribution set in 2008 H.F. No. 1812 
166.17 	notwithstanding Minnesota Statutes, section 645.26. The following amounts are allocated 
166.18 	to St. Louis County acting as the fiscal agent for the recipients for the following specified 
166.19 	purposes:
166.20 	(1) two cents per ton must be paid to the Hibbing Economic Development Authority 
166.21 	to retire bonds and for economic development purposes;
166.22 	(2) one cent per ton must be divided among and paid in equal shares to each of the 
166.23 	board of St. Louis County School District No. 2142, the board of Ely School District No. 
166.24 	696, the board of Mountain Iron-Buhl School District No. 712, and the board of Virginia 
166.25 	School District No. 706 for each to study the potential for and impact of consolidation 
166.26 	and streamlining the operations of their school districts;
166.27 	(3) 0.25 cent per ton must be paid to the city of Grand Rapids, for industrial park 
166.28 	work;
166.29 	(4) 0.65 cent per ton must be paid to the city of Aitkin, for sewer and water for 
166.30 	housing projects;
166.31 	(5) 0.5 cent per ton must be paid to the city of Crosby, for well and water tower 
166.32 	infrastructure;
166.33 	(6) 0.5 cent per ton must be paid to the city of Two Harbors, for well and water 
166.34 	tower infrastructure;
167.1 	(7) 1.5 cents per ton must be paid to the city of Silver Bay to pay for health and 
167.2 	safety and maintenance improvements at a former elementary school building that is 
167.3 	currently owned by the city, to be used for economic development purposes;
167.4 	(8) 1.5 cents per ton must be paid to St. Louis County to extend water and sewer 
167.5 	lines from the city of Chisholm to the St. Louis County fairgrounds;
167.6 	(9) 1.5 cents per ton must be paid to the White Community Hospital for debt 
167.7 	restructuring;
167.8 	(10) 0.5 cent per ton must be paid to the city of Keewatin for street, sewer, and 
167.9 	water improvements;
167.10 	(11) 0.5 cent per ton must be paid to the city of Calumet for street, sewer, and water 
167.11 	improvements; and
167.12 	(12) one cent per ton must be paid to Breitung township for sewer and water 
167.13 	extensions associated with the development of a state park, provided that Breitung 
167.14 	township may retain the amount distributed to it until used for this purpose or, if 
167.15 	a new state park is not established in Breitung township by July 1, 2009 2012, the 
167.16 	money provided in this clause must be transferred to the northeast Minnesota economic 
167.17 	development fund established in Minnesota Statutes, section 298.2213.

167.18 	Sec. 7. GRANTS OR LOANS FOR GREEN MANUFACTURING FACILITY; 
167.19 	APPROPRIATION.
 167.20 	(a) If approved by a majority vote of the members of the Iron Range Resources and 
167.21 	Rehabilitation Board, $10,000,000 must be made available from the Douglas J. Johnson 
167.22 	economic protection trust fund, notwithstanding Minnesota Statutes, section 298.292, 
167.23 	subdivision 2, as a grant or forgivable loan to a manufacturer of windmill blades at a 
167.24 	facility to be located within the taconite tax relief area defined in Minnesota Statutes, 
167.25 	section 273.134.
167.26 	(b) If $10,000,000 is provided from the Douglas J. Johnson economic protection 
167.27 	trust fund under paragraph (a):
167.28 	(1) an additional $10,000,000 is appropriated from the general fund to the 
167.29 	commissioner of iron range resources and rehabilitation to be used to make a grant or 
167.30 	forgivable loan to the manufacturer described in paragraph (a); and
167.31 	(2) notwithstanding Minnesota Statutes, section 116J.423, the commissioner of 
167.32 	employment and economic development must transfer $10,000,000 from the Minnesota 
167.33 	minerals 21st century fund to the commissioner of iron range resources and rehabilitation 
167.34 	to be used to make a grant or forgivable loan to the manufacturer described in paragraph 
167.35 	(a).

168.1 	ARTICLE 9
168.2 	DEPARTMENT INDIVIDUAL INCOME, CORPORATE FRANCHISE, 
168.3 	AND ESTATE TAXES

168.4 	Section 1. Minnesota Statutes 2008, section 289A.08, subdivision 3, is amended to 
168.5 	read:
168.6 		Subd. 3.Corporations. (a) A corporation that is subject to the state's jurisdiction to 
168.7 	tax under section 290.014, subdivision 5, must file a return, except that a foreign operating 
168.8 	corporation as defined in section 290.01, subdivision 6b, is not required to file a return.
168.9 	(b) Members of a unitary business that are required to file a combined report on one 
168.10 	return must designate a member of the unitary business to be responsible for tax matters, 
168.11 	including the filing of returns, the payment of taxes, additions to tax, penalties, interest, 
168.12 	or any other payment, and for the receipt of refunds of taxes or interest paid in excess of 
168.13 	taxes lawfully due. The designated member must be a member of the unitary business that 
168.14 	is filing the single combined report and either:
168.15 	(1) a corporation that is subject to the taxes imposed by chapter 290; or
168.16 	(2) a corporation that is not subject to the taxes imposed by chapter 290:
168.17 	(i) Such corporation consents by filing the return as a designated member under this 
168.18 	clause to remit taxes, penalties, interest, or additions to tax due from the members of the 
168.19 	unitary business subject to tax, and receive refunds or other payments on behalf of other 
168.20 	members of the unitary business. The member designated under this clause is a "taxpayer" 
168.21 	for the purposes of this chapter and chapter 270C, and is liable for any liability imposed 
168.22 	on the unitary business under this chapter and chapter 290.
168.23 	(ii) If the state does not otherwise have the jurisdiction to tax the member designated 
168.24 	under this clause, consenting to be the designated member does not create the jurisdiction 
168.25 	to impose tax on the designated member, other than as described in item (i).
168.26 	(iii) The member designated under this clause must apply for a business tax account 
168.27 	identification number.
168.28 	(c) The commissioner shall adopt rules for the filing of one return on behalf of the 
168.29 	members of an affiliated group of corporations that are required to file a combined report. 
168.30 	All members of an affiliated group that are required to file a combined report must file one 
168.31 	return on behalf of the members of the group under rules adopted by the commissioner.
168.32 	(d) If a corporation claims on a return that it has paid tax in excess of the amount of 
168.33 	taxes lawfully due, that corporation must include on that return information necessary for 
168.34 	payment of the tax in excess of the amount lawfully due by electronic means.

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

169.3 	Sec. 2. Minnesota Statutes 2008, section 289A.12, is amended by adding a subdivision 
169.4 	to read:
169.5 		Subd. 16.Qualified intermediaries. The commissioner may by notice and demand 
169.6 	require a qualified intermediary to file a return relating to transactions for which the 
169.7 	intermediary acted to facilitate exchanges under section 1031 of the Internal Revenue 
169.8 	Code. The return must include the name, address, and state or federal tax identification 
169.9 	number or Social Security number of each of the parties to the exchange, information 
169.10 	relating to the property subject to the exchange, and any other information required by 
169.11 	the commissioner.

169.12 	EFFECTIVE DATE. This section is effective July 1, 2009, and applies to all 
169.13 	transactions whether facilitated on, before, or after that date.

169.14 	Sec. 3. Minnesota Statutes 2008, section 289A.18, subdivision 1, is amended to read:
169.15 		Subdivision 1. Individual income, fiduciary income, corporate franchise, and 
169.16 	entertainment taxes; partnership and S corporation returns; information returns; 
169.17 	mining company returns. The returns required to be made under sections 289A.08 and 
169.18 	289A.12 must be filed at the following times: 
169.19 	(1) returns made on the basis of the calendar year must be filed on April 15 following 
169.20 	the close of the calendar year, except that returns of corporations must be filed on March 
169.21 	15 following the close of the calendar year; 
169.22 	(2) returns made on the basis of the fiscal year must be filed on the 15th day of the 
169.23 	fourth month following the close of the fiscal year, except that returns of corporations 
169.24 	must be filed on the 15th day of the third month following the close of the fiscal year; 
169.25 	(3) returns for a fractional part of a year must be filed on the 15th day of the fourth 
169.26 	month following the end of the month in which falls the last day of the period for which 
169.27 	the return is made, except that the returns of corporations must be filed on the 15th day of 
169.28 	the third month following the end of the tax year; or, in the case of a corporation which is 
169.29 	a member of a unitary group, the return of the corporation must be filed on the 15th day of 
169.30 	the third month following the end of the tax year of the unitary group in which falls the 
169.31 	last day of the period for which the return is made; 
169.32 	(4) in the case of a final return of a decedent for a fractional part of a year, the return 
169.33 	must be filed on the 15th day of the fourth month following the close of the 12-month 
169.34 	period that began with the first day of that fractional part of a year; 
170.1 	(5) in the case of the return of a cooperative association, returns must be filed on or 
170.2 	before the 15th day of the ninth month following the close of the taxable year; 
170.3 	(6) if a corporation has been divested from a unitary group and files a return for 
170.4 	a fractional part of a year in which it was a member of a unitary business that files a 
170.5 	combined report under section 290.17, subdivision 4, the divested corporation's return 
170.6 	must be filed on the 15th day of the third month following the close of the common 
170.7 	accounting period that includes the fractional year; 
170.8 	(7) returns of entertainment entities must be filed on April 15 following the close of 
170.9 	the calendar year; 
170.10 	(8) returns required to be filed under section 289A.08, subdivision 4, must be filed 
170.11 	on the 15th day of the fifth month following the close of the taxable year; 
170.12 	(9) returns of mining companies must be filed on May 1 following the close of the 
170.13 	calendar year; and 
170.14 	(10) returns required to be filed with the commissioner under section 289A.12, 
170.15 	subdivision 2 or, 4 to 10, or 16 must be filed within 30 days after being demanded by 
170.16 	the commissioner. 

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

170.18 	Sec. 4. Minnesota Statutes 2008, section 289A.19, subdivision 4, is amended to read:
170.19 		Subd. 4.Estate tax returns. When an extension to file the federal estate tax return 
170.20 	has been granted under section 6081 of the Internal Revenue Code, the time for filing 
170.21 	the estate tax return is extended for that period. If the estate requests an extension to 
170.22 	file an estate tax return within the time provided in section 289A.18, subdivision 3, the 
170.23 	commissioner shall extend the time for filing the estate tax return for six months. The time 
170.24 	for filing an estate tax return shall be extended for either six months or the amount of 
170.25 	time granted under section 6081 of the Internal Revenue Code to file the federal estate 
170.26 	tax return, whichever is longer.

170.27 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
170.28 	December 31, 2008.

170.29 	Sec. 5. Minnesota Statutes 2008, section 289A.31, subdivision 5, is amended to read:
170.30 		Subd. 5.Withholding tax, withholding from payments to out-of-state 
170.31 	contractors, and withholding by partnerships and small business corporations. (a) 
170.32 	Except as provided in paragraph (b), an employer or person withholding tax under section 
170.33 	290.92 or 290.923, subdivision 2, who fails to pay to or deposit with the commissioner a 
171.1 	sum or sums required by those sections to be deducted, withheld, and paid, is personally 
171.2 	and individually liable to the state for the sum or sums, and added penalties and interest, 
171.3 	and is not liable to another person for that payment or payments. The sum or sums 
171.4 	deducted and withheld under section 290.92, subdivision 2a or 3, or 290.923, subdivision 
171.5 	2, must be held as a special fund in trust for the state of Minnesota.
171.6 	(b) If the employer or person withholding tax under section 290.92 or 290.923, 
171.7 	subdivision 2, fails to deduct and withhold the tax in violation of those sections, and later 
171.8 	the taxes against which the tax may be credited are paid, the tax required to be deducted 
171.9 	and withheld will not be collected from the employer. This does not, however, relieve the 
171.10 	employer from liability for any penalties and interest otherwise applicable for failure to 
171.11 	deduct and withhold. This paragraph does not apply to an employer subject to paragraph 
171.12 	(g), or to a contractor required to withhold under section 290.92, subdivision 31.
171.13 	(c) Liability for payment of withholding taxes includes a responsible person or entity 
171.14 	described in the personal liability provisions of section 270C.56.
171.15 	(d) Liability for payment of withholding taxes includes a third party lender or surety 
171.16 	described in section 270C.59.
171.17 	(e) A partnership or S corporation required to withhold and remit tax under section 
171.18 	290.92, subdivisions 4b and 4c, is liable for payment of the tax to the commissioner, and a 
171.19 	person having control of or responsibility for the withholding of the tax or the filing of 
171.20 	returns due in connection with the tax is personally liable for the tax due.
171.21 	(f) A payor of sums required to be withheld under section 290.9705, subdivision 
171.22 	1, is liable to the state for the amount required to be deducted, and is not liable to an 
171.23 	out-of-state contractor for the amount of the payment.
171.24 	(g) If an employer fails to withhold tax from the wages of an employee when 
171.25 	required to do so under section 290.92, subdivision 2a, by reason of treating such 
171.26 	employee as not being an employee, then the liability for tax is equal to three percent of 
171.27 	the wages paid to the employee. The liability for tax of an employee is not affected by 
171.28 	the assessment or collection of tax under this paragraph. The employer is not entitled to 
171.29 	recover from the employee any tax determined under this paragraph.

171.30 	EFFECTIVE DATE. This section is effect for taxes required to be withheld after 
171.31 	June 30, 2009.

171.32 	Sec. 6. Minnesota Statutes 2008, section 289A.38, subdivision 7, is amended to read:
171.33 		Subd. 7. Federal tax changes. If the amount of income, items of tax preference, 
171.34 	deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for 
171.35 	any period, as reported to the Internal Revenue Service is changed or corrected by the 
172.1 	commissioner of Internal Revenue or other officer of the United States or other competent 
172.2 	authority, or where a renegotiation of a contract or subcontract with the United States 
172.3 	results in a change in income, items of tax preference, deductions, credits, or withholding 
172.4 	tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the 
172.5 	taxpayer shall report the change or correction or renegotiation results in writing to the 
172.6 	commissioner. The report must be submitted within 180 days after the final determination 
172.7 	and must be in the form of either an amended Minnesota estate, withholding tax, corporate 
172.8 	franchise tax, or income tax return conceding the accuracy of the federal determination 
172.9 	or a letter detailing how the federal determination is incorrect or does not change the 
172.10 	Minnesota tax. An amended Minnesota income tax return must be accompanied by an 
172.11 	amended property tax refund return, if necessary. A taxpayer filing an amended federal 
172.12 	tax return must also file a copy of the amended return with the commissioner of revenue 
172.13 	within 180 days after filing the amended return. 

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

172.15 	Sec. 7. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:
172.16 		Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 
172.17 	and trusts, there shall be subtracted from federal taxable income: 
172.18 	(1) net interest income on obligations of any authority, commission, or 
172.19 	instrumentality of the United States to the extent includable in taxable income for federal 
172.20 	income tax purposes but exempt from state income tax under the laws of the United States; 
172.21 	(2) if included in federal taxable income, the amount of any overpayment of income 
172.22 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
172.23 	is received as a refund or as a credit to another taxable year's income tax liability; 
172.24 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
172.25 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
172.26 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
172.27 	transportation of each qualifying child in attending an elementary or secondary school 
172.28 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
172.29 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
172.30 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
172.31 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
172.32 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
172.33 	"textbooks" includes books and other instructional materials and equipment purchased 
172.34 	or leased for use in elementary and secondary schools in teaching only those subjects 
172.35 	legally and commonly taught in public elementary and secondary schools in this state. 
173.1 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
173.2 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
173.3 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
173.4 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
173.5 	or materials for, or transportation to, extracurricular activities including sporting events, 
173.6 	musical or dramatic events, speech activities, driver's education, or similar programs. No 
173.7 	deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 
173.8 	the qualifying child's vehicle to provide such transportation for a qualifying child. For 
173.9 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
173.10 	given in section 32(c)(3) of the Internal Revenue Code; 
173.11 	(4) income as provided under section 290.0802; 
173.12 	(5) to the extent included in federal adjusted gross income, income realized on 
173.13 	disposition of property exempt from tax under section 290.491; 
173.14 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
173.15 	of the Internal Revenue Code in determining federal taxable income by an individual 
173.16 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
173.17 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
173.18 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and 
173.19 	under the provisions of Public Law 109-1; 
173.20 	(7) for taxable years beginning before January 1, 2008, the amount of the federal 
173.21 	small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code 
173.22 	which is included in gross income under section 87 of the Internal Revenue Code; 
173.23 	(8) for individuals who are allowed a federal foreign tax credit for taxes that do not 
173.24 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
173.25 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
173.26 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
173.27 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
173.28 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
173.29 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
173.30 	the extent they exceed the federal foreign tax credit; 
173.31 	(9) in each of the five tax years immediately following the tax year in which an 
173.32 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
173.33 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
173.34 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
173.35 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
173.36 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
174.1 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
174.2 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
174.3 	less than zero; 
174.4 	(10) job opportunity building zone income as provided under section 469.316; 
174.5 	(11) to the extent included in federal taxable income, the amount of compensation 
174.6 	paid to members of the Minnesota National Guard or other reserve components of the 
174.7 	United States military for active service performed in Minnesota, excluding compensation 
174.8 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
174.9 	this clause, "active service" means (i) state active service as defined in section 190.05, 
174.10 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
174.11 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
174.12 	subdivision 5c, but "active service" excludes service performed in accordance with section 
174.13 	190.08, subdivision 3; 
174.14 	(12) to the extent included in federal taxable income, the amount of compensation 
174.15 	paid to Minnesota residents who are members of the armed forces of the United States or 
174.16 	United Nations for active duty performed outside Minnesota under United States Code, 
174.17 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
174.18 	the United Nations; 
174.19 	(13) an amount, not to exceed $10,000, equal to qualified expenses related to a 
174.20 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
174.21 	to another person for human organ transplantation. For purposes of this clause, "organ" 
174.22 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
174.23 	"human organ transplantation" means the medical procedure by which transfer of a human 
174.24 	organ is made from the body of one person to the body of another person; "qualified 
174.25 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
174.26 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
174.27 	may be subtracted under this clause only once; and "qualified donor" means the individual 
174.28 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
174.29 	individual may claim the subtraction in this clause for each instance of organ donation for 
174.30 	transplantation during the taxable year in which the qualified expenses occur; 
174.31 	(14) in each of the five tax years immediately following the tax year in which an 
174.32 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
174.33 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
174.34 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
174.35 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
174.36 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
175.1 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
175.2 	subtraction is not allowed under this clause; 
175.3 	(15) to the extent included in federal taxable income, compensation paid to a service 
175.4 	member as defined in United States Code, title 10, section 101(a)(5), for military service 
175.5 	as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2); 
175.6 	(16) international economic development zone income as provided under section 
175.7 	469.325; and
175.8 	(17) to the extent included in federal taxable income, the amount of national service 
175.9 	educational awards received from the National Service Trust under United States Code, 
175.10 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
175.11 	program. 

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

175.13 	Sec. 8. Minnesota Statutes 2008, section 290.0671, subdivision 1, is amended to read:
175.14 		Subdivision 1.Credit allowed. (a) An individual is allowed a credit against the tax 
175.15 	imposed by this chapter equal to a percentage of earned income. To receive a credit, a 
175.16 	taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
175.17 	(b) For individuals with no qualifying children, the credit equals 1.9125 percent of 
175.18 	the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned 
175.19 	income or adjusted gross income, whichever is greater, in excess of $5,770, but in no 
175.20 	case is the credit less than zero.
175.21 	(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first 
175.22 	$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than 
175.23 	$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income, 
175.24 	whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
175.25 	(d) For individuals with two or more qualifying children, the credit equals ten 
175.26 	percent of the first $9,720 of earned income and 20 percent of earned income over 
175.27 	$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income 
175.28 	or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is 
175.29 	the credit less than zero.
175.30 	(e) For a nonresident or part-year resident, the credit must be allocated based on the 
175.31 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).
175.32 	(f) For a person who was a resident for the entire tax year and has earned income 
175.33 	not subject to tax under this chapter, including income excluded under section 290.01, 
175.34 	subdivision 19b, clause (10) or (16), the credit must be allocated based on the ratio of 
175.35 	federal adjusted gross income reduced by the earned income not subject to tax under 
176.1 	this chapter over federal adjusted gross income. For purposes of this paragraph, the 
176.2 	subtractions for military pay under section 290.01, subdivision 19b, clauses (11) and (12), 
176.3 	are not considered "earned income not subject to tax under this chapter."
176.4 	For the purposes of this paragraph, the exclusion of combat pay under section 112 
176.5 	of the Internal Revenue Code is not considered "earned income not subject to tax under 
176.6 	this chapter."
176.7 	(g) For tax years beginning after December 31, 2001, and before December 31, 
176.8 	2004, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in 
176.9 	paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by 
176.10 	$1,000 for married taxpayers filing joint returns.
176.11 	(h) For tax years beginning after December 31, 2004, and before December 31, 
176.12 	2007, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in 
176.13 	paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by 
176.14 	$2,000 for married taxpayers filing joint returns.
176.15 	(i)(g) For tax years beginning after December 31, 2007, and before December 
176.16 	31, 2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in 
176.17 	paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by 
176.18 	$3,000 for married taxpayers filing joint returns. For tax years beginning after December 
176.19 	31, 2008, the commissioner shall annually adjust the $3,000 is adjusted annually for 
176.20 	inflation under subdivision 7 by the percentage determined pursuant to the provisions of 
176.21 	section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B), the word 
176.22 	"2007" shall be substituted for the word "1992." For 2009, the commissioner shall then 
176.23 	determine the percent change from the 12 months ending on August 31, 2007, to the 12 
176.24 	months ending on August 31, 2008, and in each subsequent year, from the 12 months 
176.25 	ending on August 31, 2007, to the 12 months ending on August 31 of the year preceding 
176.26 	the taxable year. The earned income thresholds as adjusted for inflation must be rounded 
176.27 	to the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10. 
176.28 	The determination of the commissioner under this subdivision is not a rule under the 
176.29 	Administrative Procedure Act.
176.30 	(j)(h) The commissioner shall construct tables showing the amount of the credit 
176.31 	at various income levels and make them available to taxpayers. The tables shall follow 
176.32 	the schedule contained in this subdivision, except that the commissioner may graduate 
176.33 	the transition between income brackets.

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

177.1 	Sec. 9. Minnesota Statutes 2008, section 290A.10, is amended to read:
177.2 	290A.10 PROOF OF TAXES PAID.
177.3 	Every claimant who files a claim for relief for property taxes payable shall include 
177.4 	with the claim a property tax statement or a reproduction thereof in a form deemed 
177.5 	satisfactory by the commissioner of revenue indicating that there are no delinquent 
177.6 	property taxes on the homestead. Indication on the property tax statement from the county 
177.7 	treasurer that there are no delinquent taxes on the homestead shall be sufficient proof. 
177.8 	Taxes included in a confession of judgment under section 277.23 or279.37 shall not 
177.9 	constitute delinquent taxes as long as the claimant is current on the payments required to 
177.10 	be made under section 277.23 or279.37.

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

177.12 	Sec. 10. Minnesota Statutes 2008, section 290A.14, is amended to read:
177.13 	290A.14 PROPERTY TAX STATEMENT.
177.14 	The county treasurer shall prepare and send a sufficient number of copies of the 
177.15 	property tax statement to the owner, and to the owner's escrow agent if the taxes are 
177.16 	paid via an escrow account, to enable the owner to comply with the filing requirements 
177.17 	of this chapter and to retain one copy as a record. The property tax statement, in a form 
177.18 	prescribed by the commissioner, shall indicate the manner in which the claimant may 
177.19 	claim relief from the state under both this chapter and chapter 290B, and the amount of the 
177.20 	tax for which the applicant may claim relief. The statement shall also indicate if there 
177.21 	are delinquent property taxes on the property in the preceding year. Taxes included in a 
177.22 	confession of judgment under section 277.23 or279.37 shall not constitute delinquent 
177.23 	taxes as long as the claimant is current on the payments required to be made under section
177.24 	277.23 or279.37.

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

177.26 	Sec. 11.  REPEALER.
 177.27 	Minnesota Rules, part 8009.3000, is repealed.

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

178.1 	ARTICLE 10
178.2 	DEPARTMENT SALES AND USE TAXES

178.3 	Section 1. Minnesota Statutes 2008, section 297A.70, subdivision 2, is amended to 
178.4 	read:
178.5 		Subd. 2.Sales to government. (a) All sales, except those listed in paragraph (b), 
178.6 	to the following governments and political subdivisions, or to the listed agencies or 
178.7 	instrumentalities of governments and political subdivisions, are exempt:
178.8 	(1) the United States and its agencies and instrumentalities;
178.9 	(2) school districts, the University of Minnesota, state universities, community 
178.10 	colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts 
178.11 	Education, and an instrumentality of a political subdivision that is accredited as an 
178.12 	optional/special function school by the North Central Association of Colleges and Schools;
178.13 	(3) hospitals and nursing homes owned and operated by political subdivisions of 
178.14 	the state of tangible personal property and taxable services used at or by hospitals and 
178.15 	nursing homes;
178.16 	(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip 
178.17 	operations provided for in section 473.4051; 
178.18 	(5) other states or political subdivisions of other states, if the sale would be exempt 
178.19 	from taxation if it occurred in that state; and
178.20 	(6) sales to public libraries, public library systems, multicounty, multitype library 
178.21 	systems as defined in section 134.001, county law libraries under chapter 134A, state 
178.22 	agency libraries, the state library under section 480.09, and the Legislative Reference 
178.23 	Library. 
178.24 	(b) This exemption does not apply to the sales of the following products and services:
178.25 	(1) building, construction, or reconstruction materials purchased by a contractor 
178.26 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
178.27 	guaranteed maximum price covering both labor and materials for use in the construction, 
178.28 	alteration, or repair of a building or facility;
178.29 	(2) construction materials purchased by tax exempt entities or their contractors to 
178.30 	be used in constructing buildings or facilities which will not be used principally by the 
178.31 	tax exempt entities;
178.32 	(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, 
178.33 	except for leases entered into by the United States or its agencies or instrumentalities; or 
178.34 	(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause 
178.35 	(2), and prepared food, candy, and soft drinks, and alcoholic beverages as defined in 
179.1 	section 297A.67, subdivision 2, except for lodging, prepared food, candy, and soft 
179.2 	drinks, and alcoholic beverages purchased directly by the United States or its agencies 
179.3 	or instrumentalities. 
179.4 	(c) As used in this subdivision, "school districts" means public school entities and 
179.5 	districts of every kind and nature organized under the laws of the state of Minnesota, and 
179.6 	any instrumentality of a school district, as defined in section 471.59. 

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

179.9 	Sec. 2. Minnesota Statutes 2008, section 297A.70, subdivision 4, is amended to read:
179.10 		Subd. 4.Sales to nonprofit groups. (a) All sales, except those listed in paragraph 
179.11 	(b), to the following "nonprofit organizations" are exempt:
179.12 	(1) a corporation, society, association, foundation, or institution organized and 
179.13 	operated exclusively for charitable, religious, or educational purposes if the item 
179.14 	purchased is used in the performance of charitable, religious, or educational functions; and
179.15 	(2) any senior citizen group or association of groups that:
179.16 	(i) in general limits membership to persons who are either age 55 or older, or 
179.17 	physically disabled; and
179.18 	(ii) is organized and operated exclusively for pleasure, recreation, and other 
179.19 	nonprofit purposes, not including housing, no part of the net earnings of which inures to 
179.20 	the benefit of any private shareholders; and
179.21 	(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
179.22 	For purposes of this subdivision, charitable purpose includes the maintenance of a 
179.23 	cemetery owned by a religious organization.
179.24 	(b) This exemption does not apply to the following sales:
179.25 	(1) building, construction, or reconstruction materials purchased by a contractor 
179.26 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
179.27 	guaranteed maximum price covering both labor and materials for use in the construction, 
179.28 	alteration, or repair of a building or facility;
179.29 	(2) construction materials purchased by tax-exempt entities or their contractors to 
179.30 	be used in constructing buildings or facilities that will not be used principally by the 
179.31 	tax-exempt entities; and
179.32 	(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause 
179.33 	(2), and prepared food, candy, and soft drinks, and alcoholic beverages as defined in 
180.1 	section 297A.67, subdivision 2, except wine purchased by an established religious 
180.2 	organization for sacramental purposes; and 
180.3 	(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except 
180.4 	as provided in paragraph (c). 
180.5 	(c) This exemption applies to the leasing of a motor vehicle as defined in section 
180.6 	297B.01, subdivision 11, only if the vehicle is: 
180.7 	(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
180.8 	passenger automobile, as defined in section 168.002, if the automobile is designed and 
180.9 	used for carrying more than nine persons including the driver; and 
180.10 	(2) intended to be used primarily to transport tangible personal property or 
180.11 	individuals, other than employees, to whom the organization provides service in 
180.12 	performing its charitable, religious, or educational purpose.
180.13 	(d) A limited liability company also qualifies for exemption under this subdivision if 
180.14 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
180.15 	purchased qualify for the exemption.

180.16 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
180.17 	June 30, 2009, except that the amendment to paragraph (a) is effective the day following 
180.18 	final enactment.

180.19 	Sec. 3. Minnesota Statutes 2008, section 297A.992, subdivision 2, is amended to read:
180.20 		Subd. 2. Authorization; rates. (a) Notwithstanding section 297A.99, subdivisions 
180.21 	1, 2, and 3, or 477A.016, or any other law, the board of a county participating in a 
180.22 	joint powers agreement as specified in this section shall impose by resolution (1) a 
180.23 	transportation sales and use tax at a rate of one-quarter of one percent on retail sales and 
180.24 	uses taxable under this chapter, and (2) an excise tax of $20 per motor vehicle, as defined 
180.25 	in section 297B.01, subdivision 11, purchased or acquired from any person engaged in the 
180.26 	business of selling motor vehicles at retail, occurring within the jurisdiction of the taxing 
180.27 	authority. The taxes authorized are to fund transportation improvements as specified in 
180.28 	this section, including debt service on obligations issued to finance such improvements 
180.29 	pursuant to subdivision 7. 
180.30 	(b) The tax imposed under this section is not included in determining if the total tax 
180.31 	on lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986, 
180.32 	chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article 
180.33 	12, section 87, or in determining a tax that may be imposed under any other limitations. 

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

181.1 	Sec. 4. Minnesota Statutes 2008, section 297A.993, subdivision 1, is amended to read:
181.2 		Subdivision 1. Authorization; rates. Notwithstanding section 297A.99, 
181.3 	subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside 
181.4 	the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or 
181.5 	more than one county outside the metropolitan transportation area acting under a joint 
181.6 	powers agreement, may impose (1) a transportation sales tax at a rate of up to one-half of 
181.7 	one percent on retail sales and uses taxable under this chapter, and (2) an excise tax of $20 
181.8 	per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or acquired 
181.9 	from any person engaged in the business of selling motor vehicles at retail, occurring 
181.10 	within the jurisdiction of the taxing authority. The taxes imposed under this section are 
181.11 	subject to approval by a majority of the voters in each of the counties affected at a general 
181.12 	election who vote on the question to impose the taxes. 

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

181.14 	Sec. 5.  REPEALER.
 181.15 	Minnesota Statutes 2008, section 297A.67, subdivision 24, is repealed.

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

181.17 	ARTICLE 11
181.18 	DEPARTMENT SPECIAL TAXES

181.19 	Section 1. Minnesota Statutes 2008, section 287.04, is amended to read:
181.20 	287.04 EXEMPTIONS.
181.21 	The tax imposed by section 287.035 does not apply to:
181.22 	(a) A decree of marriage dissolution or an instrument made pursuant to it.
181.23 	(b) A mortgage given to correct a misdescription of the mortgaged property.
181.24 	(c) A mortgage or other instrument that adds additional security for the same debt 
181.25 	for which mortgage registry tax has been paid.
181.26 	(d) A contract for the conveyance of any interest in real property, including a 
181.27 	contract for deed.
181.28 	(e) A mortgage secured by real property subject to the minerals production tax of 
181.29 	sections 298.24 to 298.28.
181.30 	(f) The principal amount of a mortgage loan made under a low and moderate 
181.31 	income or other affordable housing program, if the mortgagee is a federal, state, or local 
181.32 	government agency.
181.33 	(g) Mortgages granted by fraternal benefit societies subject to section 64B.24.
182.1 	(h) A mortgage amendment or extension, as defined in section 287.01.
182.2 	(i) An agricultural mortgage if the proceeds of the loan secured by the mortgage are 
182.3 	used to acquire or improve real property classified under section 273.13, subdivision 23, 
182.4 	paragraph (a), or (b), clause (1), (2), or (3).
182.5 	(j) A mortgage on an armory building as set forth in section 193.147.

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

182.7 	Sec. 2. Minnesota Statutes 2008, section 287.05, is amended by adding a subdivision 
182.8 	to read:
182.9 		Subd. 9.Modification of mortgage. If a mortgage, or a document modifying a 
182.10 	mortgage, contains more than one statement that purports to limit: the enforcement of 
182.11 	the mortgage to a certain dollar amount; the tax imposed on the mortgage under this 
182.12 	chapter; or the effect of a modifying document, including but not limited to the statements 
182.13 	authorized in subdivisions 1, 1a, and 8, then the tax must be imposed based on the 
182.14 	combined effect, if any, of all the statements.

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

182.16 	Sec. 3. Minnesota Statutes 2008, section 287.22, is amended to read:
182.17 	287.22 EXEMPTIONS. 
182.18 	The tax imposed by section 287.21 does not apply to: 
182.19 	(1) an executory contract for the sale of real property under which the purchaser is 
182.20 	entitled to or does take possession of the real property, or any assignment or cancellation 
182.21 	of the contract; 
182.22 	(2) a mortgage or an amendment, assignment, extension, partial release, or 
182.23 	satisfaction of a mortgage; 
182.24 	(3) a will; 
182.25 	(4) a plat; 
182.26 	(5) a lease, amendment of lease, assignment of lease, or memorandum of lease; 
182.27 	(6) a deed, instrument, or writing in which the United States or any agency or 
182.28 	instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee; 
182.29 	(7) a deed for a cemetery lot or lots; 
182.30 	(8) a deed of distribution by a personal representative; 
182.31 	(9) a deed to or from a co-owner partitioning their undivided interest in the same 
182.32 	piece of real property; 
183.1 	(10) a deed or other instrument of conveyance issued pursuant to a permanent school 
183.2 	fund land exchange under section 92.121 and related laws; 
183.3 	(11) a referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale; 
183.4 	(12) a referee's, sheriff's, or certificate holder's certificate of redemption from a 
183.5 	mortgage or lien foreclosure sale issued under section 580.23 or other statute applicable to 
183.6 	redemption by an owner of real property; 
183.7 	(13) a deed, instrument, or writing which grants, creates, modifies, or terminates 
183.8 	an easement; 
183.9 	(14) a decree of marriage dissolution, as defined in section 287.01, subdivision 4, 
183.10 	or a deed or other instrument between the parties to the dissolution made pursuant to the 
183.11 	terms of the decree; and 
183.12 	(15) a transfer on death deed under section 507.071, and any affidavit or other 
183.13 	document to the extent it references a transfer on death deed. 

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

183.15 	Sec. 4. Minnesota Statutes 2008, section 287.25, is amended to read:
183.16 	287.25 PAYMENT OF TAX; STAMPS.
183.17 	Except for documents filed electronically, the county board shall determine the 
183.18 	method for collection of the tax imposed by section 287.21: 
183.19 	(1) The tax imposed by section 287.21 may be paid by the affixing of a documentary 
183.20 	stamp or stamps in the amount of the tax to the document or instrument with respect to 
183.21 	which the tax is paid, provided that the county board may permit the payment of the 
183.22 	tax without the affixing of the documentary stamps and in such cases shall direct the 
183.23 	treasurer to endorse a receipt for such tax upon the face of the document or instrument. 
183.24 	Documents submitted electronically must have the deed tax data affixed electronically and 
183.25 	the tax paid as provided in section 287.08. 
183.26 	(2) the tax imposed by section 287.21may must be paid in the manner prescribed by 
183.27 	section 287.08 relating to payment of mortgage registration tax, and the treasurer must 
183.28 	endorse a receipt for the tax on the face of the document or instrument. 

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

183.30 	Sec. 5. Minnesota Statutes 2008, section 295.56, is amended to read:
183.31 	295.56 TRANSFER OF ACCOUNTS RECEIVABLE.
183.32 	When a hospital or, surgical center,  health care provider, or wholesale drug 
183.33 	distributor transfers, assigns, or sells accounts receivable to another person who is subject 
184.1 	to tax under this chapter, liability for the tax on the accounts receivable is imposed on the 
184.2 	transferee, assignee, or buyer of the accounts receivable. No liability for these accounts 
184.3 	receivable is imposed on the transferor, assignor, or seller of the accounts receivable.

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

184.5 	Sec. 6. Minnesota Statutes 2008, section 295.57, subdivision 5, is amended to read:
184.6 		Subd. 5.Exemption for amounts paid for legend drugs. If a hospital, surgical 
184.7 	center, or health care provider cannot determine the actual cost or reimbursement of 
184.8 	legend drugs under the exemption provided in section 295.53, subdivision 1, paragraph 
184.9 	(a), clause (6) (5), the following method must be used: 
184.10 	A hospital, surgical center, or health care provider must determine the amount paid 
184.11 	for legend drugs used during the month or quarter and multiply that amount by a ratio, 
184.12 	the numerator of which is the total amount received for taxable patient services, and the 
184.13 	denominator of which is the total amount received for all patient services, including 
184.14 	amounts exempt under section 295.53, subdivision 1. The result represents the allowable 
184.15 	exemption for the monthly or quarterly cost of drugs. 

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

184.17 	Sec. 7. Minnesota Statutes 2008, section 296A.21, subdivision 1, is amended to read:
184.18 		Subdivision 1.General rules. (a) The commissioner shall make determinations, 
184.19 	corrections, assessments, and refunds with respect to taxes and fees under this chapter, 
184.20 	including interest, additions to taxes, and assessable penalties. Except as otherwise 
184.21 	provided in this section, the amount of taxes assessable must be assessed within 3-1/2 
184.22 	years after the date the return is filed. For purposes of this section, a tax return filed before 
184.23 	the last day prescribed by law for filing is considered to be filed on the last day.
184.24 	(b) A claim for a refund of an overpayment of state tax or fees must be filed within 
184.25 	3-1/2 years from the date prescribed for filing the return, plus any extension of time 
184.26 	granted for filing the return, but only if filed within the extended time; or the claim must 
184.27 	be filed within one year from the date of an order assessing tax or fees, or from the date of 
184.28 	a return filed by the commissioner, upon payment in full of the tax, fees, penalties, and 
184.29 	interest shown on the order or return, whichever period expires later.

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

184.31 	Sec. 8. Minnesota Statutes 2008, section 297E.02, subdivision 4, is amended to read:
185.1 		Subd. 4.Pull-tab and tipboard tax. (a) A tax is imposed on the sale of each deal 
185.2 	of pull-tabs and tipboards sold by a distributor. The rate of the tax is 1.7 percent of the 
185.3 	ideal gross of the pull-tab or tipboard deal. The sales tax imposed by chapter 297A on the 
185.4 	sale of the pull-tabs and tipboards by the distributor is imposed on the retail sales price 
185.5 	less the tax imposed by this subdivision. The retail sale of pull-tabs or tipboards by the 
185.6 	organization is exempt from taxes imposed by chapter 297A and is exempt from all local 
185.7 	taxes and license fees except a fee authorized under section 349.16, subdivision 8.
185.8 	(b) The liability for the tax imposed by this section is incurred when the pull-tabs 
185.9 	and tipboards are delivered by the distributor to the customer or to a common or contract 
185.10 	carrier for delivery to the customer, or when received by the customer's authorized 
185.11 	representative at the distributor's place of business, regardless of the distributor's method 
185.12 	of accounting or the terms of the sale.
185.13 	The tax imposed by this subdivision is imposed on all sales of pull-tabs and 
185.14 	tipboards, except the following:
185.15 	(1) sales to the governing body of an Indian tribal organization for use on an Indian 
185.16 	reservation;
185.17 	(2) sales to distributors licensed under the laws of another state or of a province of 
185.18 	Canada, as long as all statutory and regulatory requirements are met in the other state or 
185.19 	province;
185.20 	(3) sales of promotional tickets as defined in section 349.12; and
185.21 	(4) pull-tabs and tipboards sold to an organization that sells pull-tabs and tipboards 
185.22 	under the exemption from licensing in section 349.166, subdivision 2. A distributor shall 
185.23 	require an organization conducting exempt gambling to show proof of its exempt status 
185.24 	before making a tax-exempt sale of pull-tabs or tipboards to the organization. A distributor 
185.25 	shall identify, on all reports submitted to the commissioner, all sales of pull-tabs and 
185.26 	tipboards that are exempt from tax under this subdivision.
185.27 	(c) A distributor having a liability of $120,000 $10,000 or more during a fiscal year 
185.28 	ending June 30 must remit all liabilities in the subsequent calendar year by electronic 
185.29 	means.
185.30 	(d) Any customer who purchases deals of pull-tabs or tipboards from a distributor 
185.31 	may file an annual claim for a refund or credit of taxes paid pursuant to this subdivision 
185.32 	for unsold pull-tab and tipboard tickets. The claim must be filed with the commissioner on 
185.33 	a form prescribed by the commissioner by March 20 of the year following the calendar 
185.34 	year for which the refund is claimed. The refund must be filed as part of the customer's 
185.35 	February monthly return. The refund or credit is equal to 1.7 percent of the face value 
185.36 	of the unsold pull-tab or tipboard tickets, provided that the refund or credit will be 1.75 
186.1 	percent of the face value of the unsold pull-tab or tipboard tickets for claims for a refund 
186.2 	or credit of taxes filed on the February 2001 monthly return. The refund claimed will be 
186.3 	applied as a credit against tax owing under this chapter on the February monthly return. If 
186.4 	the refund claimed exceeds the tax owing on the February monthly return, that amount 
186.5 	will be refunded. The amount refunded will bear interest pursuant to section 270C.405
186.6 	from 90 days after the claim is filed.

186.7 	EFFECTIVE DATE. This section is effective for payments due in calendar year 
186.8 	2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30, 
186.9 	2009, and in fiscal years thereafter.

186.10 	Sec. 9. Minnesota Statutes 2008, section 297E.06, is amended by adding a subdivision 
186.11 	to read:
186.12 		Subd. 1a.Required signatures. The gambling manager and the chief executive 
186.13 	officer of the organization, or their respective designees, and the person who completed 
186.14 	the tax return must sign the tax return. The organization shall inform the commissioner of 
186.15 	revenue in writing of the identity of the designees as soon as practicable in the form and 
186.16 	manner prescribed by the commissioner.

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

186.18 	Sec. 10. Minnesota Statutes 2008, section 297E.11, subdivision 1, is amended to read:
186.19 		Subdivision 1.General rule. Except as otherwise provided in this chapter, the 
186.20 	amount of taxes assessable must be assessed within 3-1/2 years after the return is filed, 
186.21 	whether or not the return is filed on or after the date prescribed. A return must not be 
186.22 	treated as filed until it is in processible form. A return is in processible form if it is filed 
186.23 	on a permitted form and contains sufficient data to identify the taxpayer and permit the 
186.24 	mathematical verification of the tax liability shown on the return. For purposes of this 
186.25 	section, a tax return filed before the last day prescribed by law for filing is considered to 
186.26 	be filed on the last day.

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

186.28 	Sec. 11. Minnesota Statutes 2008, section 297F.09, subdivision 7, is amended to read:
186.29 		Subd. 7.Electronic payment. A cigarette or tobacco products distributor having a 
186.30 	liability of $120,000$10,000 or more during a fiscal year ending June 30 must remit all 
186.31 	liabilities in the subsequent calendar year by electronic means.

187.1 	EFFECTIVE DATE. This section is effective for payments due in calendar year 
187.2 	2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30, 
187.3 	2009, and in fiscal years thereafter.

187.4 	Sec. 12. Minnesota Statutes 2008, section 297G.09, subdivision 6, is amended to read:
187.5 		Subd. 6.Electronic payments. A licensed brewer, importer, or wholesaler having 
187.6 	an excise tax liability of $120,000$10,000 or more during a fiscal year ending June 30 
187.7 	must remit all excise tax liabilities in the subsequent calendar year by electronic means.

187.8 	EFFECTIVE DATE. This section is effective for payments due in calendar year 
187.9 	2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30, 
187.10 	2009, and in fiscal years thereafter.

187.11 	Sec. 13. Minnesota Statutes 2008, section 297I.30, is amended by adding a subdivision 
187.12 	to read:
187.13 		Subd. 9.Extensions for filing returns. When, in the commissioner's judgment, 
187.14 	good cause exists, the commissioner may extend the time for filing returns for not more 
187.15 	than six months.

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

187.17 	Sec. 14. Minnesota Statutes 2008, section 297I.35, subdivision 2, is amended to read:
187.18 		Subd. 2.Electronic payments. If the aggregate amount of tax and surcharges 
187.19 	due under this chapter during a calendar year is equal to or exceeds $120,000 $10,000, 
187.20 	or if the taxpayer is required to make payment of any other tax to the commissioner by 
187.21 	electronic means, then all tax and surcharge payments in the subsequent calendar year 
187.22 	must be paid by electronic means.

187.23 	EFFECTIVE DATE. This section is effective for payments due in calendar year 
187.24 	2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30, 
187.25 	2009, and in fiscal years thereafter.

187.26 	Sec. 15. Minnesota Statutes 2008, section 298.28, subdivision 11, is amended to read:
187.27 		Subd. 11.Remainder. (a) The proceeds of the tax imposed by section 298.24
187.28 	which remain after the distributions and payments in subdivisions 2 to 10a, as certified 
187.29 	by the commissioner of revenue, and paragraphs (b), (c), and (d), and (e) have been 
187.30 	made, together with interest earned on all money distributed under this section prior to 
187.31 	distribution, shall be divided between the taconite environmental protection fund created 
188.1 	in section 298.223 and the Douglas J. Johnson economic protection trust fund created in 
188.2 	section 298.292 as follows: Two-thirds to the taconite environmental protection fund and 
188.3 	one-third to the Douglas J. Johnson economic protection trust fund. The proceeds shall be 
188.4 	placed in the respective special accounts.
188.5 	(b) There shall be distributed to each city, town, and county the amount that it 
188.6 	received under section 294.26 in calendar year 1977; provided, however, that the amount 
188.7 	distributed in 1981 to the unorganized territory number 2 of Lake County and the town 
188.8 	of Beaver Bay based on the between-terminal trackage of Erie Mining Company will be 
188.9 	distributed in 1982 and subsequent years to the unorganized territory number 2 of Lake 
188.10 	County and the towns of Beaver Bay and Stony River based on the miles of track of Erie 
188.11 	Mining Company in each taxing district.
188.12 	(c) There shall be distributed to the Iron Range Resources and Rehabilitation Board 
188.13 	the amounts it received in 1977 under section 298.22. The amount distributed under 
188.14 	this paragraph shall be expended within or for the benefit of the taconite assistance area 
188.15 	defined in section 273.1341.
188.16 	(d) There shall be distributed to each school district 62 percent of the amount that it 
188.17 	received under section 294.26 in calendar year 1977. 
188.18 	(e) In 2003 only, $100,000 must be distributed to a township located in a taconite 
188.19 	tax relief area as defined in section 273.134, paragraph (a), that received $119,259 of 
188.20 	homestead and agricultural credit aid and $182,014 in local government aid in 2001.

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

188.22 	Sec. 16. Minnesota Statutes 2008, section 473.843, subdivision 3, is amended to read:
188.23 		Subd. 3.Payment of fee. On or before the 20th day of each month each operator 
188.24 	shall pay the fee due under this section for the previous month, using a form provided 
188.25 	by the commissioner of revenue.
188.26 	An operator having a fee of $120,000 $10,000 or more during a fiscal year ending 
188.27 	June 30 must pay all fees in the subsequent calendar year by electronic means.

188.28 	EFFECTIVE DATE. This section is effective for payments due in calendar year 
188.29 	2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30, 
188.30 	2009, and in fiscal years thereafter.

188.31 	Sec. 17.  REPEALER.
 188.32 	Minnesota Statutes 2008, sections 287.26; 287.27, subdivision 1; and 298.28, 
188.33 	subdivisions 11a and 13, are repealed.

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

189.2 	ARTICLE 12
189.3 	DEPARTMENT PROPERTY TAXES AND AIDS

189.4 	Section 1. Minnesota Statutes 2008, section 273.11, subdivision 23, is amended to read:
189.5 		Subd. 23.First tier valuation limit; agricultural homestead property. (a) 
189.6 	Beginning with assessment year 2006, The commissioner of revenue shall annually certify 
189.7 	the first tier limit for agricultural homestead property as. For assessment year 2010, the 
189.8 	limit is $1,110,000. Beginning with assessment year 2011, the limit is the product of (i) 
189.9 	$600,000 the first tier limit for the preceding assessment year, and (ii) the ratio of the 
189.10 	statewide average taxable market value of agricultural property per acre of deeded farm 
189.11 	land in the preceding assessment year to the statewide average taxable market value of 
189.12 	agricultural property per acre of deeded farm land for the second preceding assessment 
189.13 	year 2004. The limit shall be rounded to the nearest $10,000.
189.14 	(b) For the purposes of this subdivision, "agricultural property" means all class 
189.15 	2 2a property under section 273.13, subdivision 23, except for (1) timberland, (2) a 
189.16 	landing area or public access area of a privately owned public use airport, and (3) property 
189.17 	consisting of the house, garage, and immediately surrounding one acre of land of an 
189.18 	agricultural homestead.
189.19 	(c) The commissioner shall certify the limit by January 2 of each assessment year, 
189.20 	except that for assessment year 2006 the commissioner shall certify the limit by June 
189.21 	1, 2006.

189.22 	EFFECTIVE DATE. This section is effective for taxes payable in 2011 and 
189.23 	thereafter.

189.24 	Sec. 2. Minnesota Statutes 2008, section 273.111, subdivision 4, is amended to read:
189.25 		Subd. 4.Determination of value. (a) The value of any real estate described 
189.26 	in subdivision 3 shall upon timely application by the owner, in the manner provided 
189.27 	in subdivision 8, be determined solely with reference to its appropriate agricultural 
189.28 	classification and value notwithstanding sections 272.03, subdivision 8, and 273.11. 
189.29 	Furthermore, the assessor shall not consider any added values resulting from 
189.30 	nonagricultural factors. In order to account for the presence of nonagricultural influences 
189.31 	that may affect the value of agricultural land, the commissioner of revenue shall develop a 
189.32 	fair and uniform method of determining agricultural values for each county in the state 
189.33 	that are consistent with this subdivision. The commissioner shall annually assign the 
190.1 	resulting values to each county, and these values shall be used as the basis for determining 
190.2 	the agricultural value for all properties in the county qualifying for tax deferment under 
190.3 	this section.
190.4 	(b) In the case of property qualifying for tax deferment only under subdivision 3a, 
190.5 	the value shall be based on the value in effect for assessment year 2008, multiplied by 
190.6 	the ratio of the total taxable market value of all property in the county for the year prior 
190.7 	to the current assessment year divided by the total taxable market value of all property 
190.8 	in the county for assessment year 2008.

190.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2009 and 
190.10 	thereafter.

190.11 	Sec. 3. Minnesota Statutes 2008, section 273.1115, subdivision 2, is amended to read:
190.12 		Subd. 2.Requirement. Real estate is entitled to valuation under this section only if 
190.13 	all of the following requirements are met:
190.14 	(1) the property is classified as class 1a, 1b, 2a, or 2b property under section 273.13, 
190.15 	subdivisions 22 and 23, or the property is classified as class 2e under section 273.13, 
190.16 	subdivision 23, and immediately before being classified as class 2e was classified as 
190.17 	class 1a or 1b;
190.18 	(2) the property is at least ten contiguous acres, when the application is filed under 
190.19 	subdivision 3;
190.20 	(3) the owner has filed a completed application for deferment as specified in 
190.21 	subdivision 3 with the county assessor in the county in which the property is located;
190.22 	(4) there are no delinquent taxes on the property; and
190.23 	(5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).

190.24 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
190.25 	thereafter.

190.26 	Sec. 4. Minnesota Statutes 2008, section 273.1231, subdivision 8, is amended to read:
190.27 		Subd. 8.Utility property. "Utility property" means property appraised and 
190.28 	classified for tax purposes by order of the commissioner of revenue under sections 273.33
190.29 	to 273.3711.

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

190.31 	Sec. 5. Minnesota Statutes 2008, section 273.124, subdivision 3, is amended to read:
191.1 		Subd. 3.Cooperatives and charitable corporations; homestead and other 
191.2 	property. (a) When property is owned by a corporation or association organized under 
191.3 	chapter 308A or 308B, and each person who owns a share or shares in the corporation or 
191.4 	association is entitled to occupy a building on the property, or a unit within a building 
191.5 	on the property, the corporation or association may claim homestead treatment for each 
191.6 	dwelling, or for each unit in the case of a building containing several dwelling units, or for 
191.7 	the part of the value of the building occupied by a shareholder. Each building or unit must 
191.8 	be designated by legal description or number. The net tax capacity of each building or 
191.9 	unit that qualifies for assessment as a homestead under this subdivision must include not 
191.10 	more than one-half acre of land, if platted, nor more than 80 acres if unplatted. The net 
191.11 	tax capacity of the property is the sum of the net tax capacities of each of the respective 
191.12 	buildings or units comprising the property, including the net tax capacity of each unit's 
191.13 	or building's proportionate share of the land and any common buildings. To qualify for 
191.14 	the treatment provided by this subdivision, the corporation or association must be wholly 
191.15 	owned by persons having a right to occupy a building or unit owned by the corporation 
191.16 	or association. A charitable corporation organized under the laws of Minnesota and not 
191.17 	otherwise exempt thereunder with no outstanding stock qualifies for homestead treatment 
191.18 	with respect to member residents of the dwelling units who have purchased and hold 
191.19 	residential participation warrants entitling them to occupy the units.
191.20 	(b) To the extent provided in paragraph (a), a cooperative or corporation organized 
191.21 	under chapter 308A or 308B may obtain separate assessment and valuation, and separate 
191.22 	property tax statements for each residential homestead, residential nonhomestead, or for 
191.23 	each seasonal residential recreational building or unit not used for commercial purposes. 
191.24 	The appropriate class rates under section 273.13 shall be applicable as if each building or 
191.25 	unit were a separate tax parcel; provided, however, that the tax parcel which exists at the 
191.26 	time the cooperative or corporation makes application under this subdivision shall be a 
191.27 	single parcel for purposes of property taxes or the enforcement and collection thereof, 
191.28 	other than as provided in paragraph (a) or this paragraph.
191.29 	(c) A member of a corporation or association may initially obtain the separate 
191.30 	assessment and valuation and separate property tax statements, as provided in paragraph 
191.31 	(b), by applying to the assessor by June 30 of the assessment year.
191.32 	(d) When a building, or dwelling units within a building, no longer qualify under 
191.33 	paragraph (a) or (b), the current owner must notify the assessor within 30 days. Failure to 
191.34 	notify the assessor within 30 days shall result in the loss of benefits under paragraph (a) or 
191.35 	(b) for taxes payable in the year that the failure is discovered. For these purposes, "benefits 
191.36 	under paragraph (a) or (b)" means the difference in the net tax capacity of the building or 
192.1 	units which no longer qualify as computed under paragraph (a) or (b) and as computed 
192.2 	under the otherwise applicable law, times the local tax rate applicable to the building for 
192.3 	that taxes payable year. Upon discovery of a failure to notify, the assessor shall inform the 
192.4 	auditor of the difference in net tax capacity for the building or buildings in which units no 
192.5 	longer qualify, and the auditor shall calculate the benefits under paragraph (a) or (b). Such 
192.6 	amount, plus a penalty equal to 100 percent of that amount, shall then be demanded of the 
192.7 	building's owner. The property owner may appeal the county's determination by serving 
192.8 	copies of a petition for review with county officials as provided in section 278.01 and 
192.9 	filing a proof of service as provided in section 278.01 with the Minnesota Tax Court within 
192.10 	60 days of the date of the notice from the county. The appeal shall be governed by the Tax 
192.11 	Court procedures provided in chapter 271, for cases relating to the tax laws as defined in 
192.12 	section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and 278.03, 
192.13 	but including section 278.05, subdivision 2. If the amount of the benefits under paragraph 
192.14 	(a) or (b) and penalty are not paid within 60 days, and if no appeal has been filed, the 
192.15 	county auditor shall certify the amount of the benefit and penalty to the succeeding year's 
192.16 	tax list to be collected as part of the property taxes on the affected property.

192.17 	Sec. 6. Minnesota Statutes 2008, section 273.124, subdivision 3a, is amended to read:
192.18 		Subd. 3a.Manufactured home park cooperative. When a manufactured home 
192.19 	park is owned by a corporation or association organized under chapter 308A or 308B, 
192.20 	and each person who owns a share or shares in the corporation or association is entitled 
192.21 	to occupy a lot within the park, the corporation or association may claim homestead 
192.22 	treatment for each lot occupied by a shareholder. Each lot must be designated by legal 
192.23 	description or number, and each lot is limited to not more than one-half acre of land for 
192.24 	each homestead. The manufactured home park shall be valued and assessed as if it were 
192.25 	homestead property within class 1 if all of the following criteria are met:
192.26 	(1) the occupant is using the property as a permanent residence;
192.27 	(2) the occupant or the cooperative association is paying the ad valorem property 
192.28 	taxes and any special assessments levied against the land and structure either directly, or 
192.29 	indirectly through dues to the corporation; and
192.30 	(3) the corporation or association organized under chapter 308A or 308B is wholly 
192.31 	owned by persons having a right to occupy a lot owned by the corporation or association.
192.32 	A charitable corporation, organized under the laws of Minnesota with no outstanding 
192.33 	stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt 
192.34 	status, qualifies for homestead treatment with respect to member residents of the 
193.1 	manufactured home park who hold residential participation warrants entitling them to 
193.2 	occupy a lot in the manufactured home park.

193.3 	Sec. 7. Minnesota Statutes 2008, section 273.124, subdivision 13, is amended to read:
193.4 		Subd. 13. Homestead application. (a) A person who meets the homestead 
193.5 	requirements under subdivision 1 must file a homestead application with the county 
193.6 	assessor to initially obtain homestead classification. 
193.7 	(b) The format and contents of a uniform homestead application shall be prescribed 
193.8 	by the commissioner of revenue. The application must clearly inform the taxpayer that 
193.9 	this application must be signed by all owners who occupy the property or by the qualifying 
193.10 	relative and returned to the county assessor in order for the property to receive homestead 
193.11 	treatment. 
193.12 	(c) Every property owner applying for homestead classification must furnish to the 
193.13 	county assessor the Social Security number of each occupant who is listed as an owner 
193.14 	of the property on the deed of record, the name and address of each owner who does not 
193.15 	occupy the property, and the name and Social Security number of each owner's spouse who 
193.16 	occupies the property. The application must be signed by each owner who occupies the 
193.17 	property and by each owner's spouse who occupies the property, or, in the case of property 
193.18 	that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative. 
193.19 	If a property owner occupies a homestead, the property owner's spouse may not 
193.20 	claim another property as a homestead unless the property owner and the property owner's 
193.21 	spouse file with the assessor an affidavit or other proof required by the assessor stating that 
193.22 	the property qualifies as a homestead under subdivision 1, paragraph (e). 
193.23 	Owners or spouses occupying residences owned by their spouses and previously 
193.24 	occupied with the other spouse, either of whom fail to include the other spouse's name 
193.25 	and Social Security number on the homestead application or provide the affidavits or 
193.26 	other proof requested, will be deemed to have elected to receive only partial homestead 
193.27 	treatment of their residence. The remainder of the residence will be classified as 
193.28 	nonhomestead residential. When an owner or spouse's name and Social Security number 
193.29 	appear on homestead applications for two separate residences and only one application is 
193.30 	signed, the owner or spouse will be deemed to have elected to homestead the residence for 
193.31 	which the application was signed. 
193.32 	The Social Security numbers, state or federal tax returns or tax return information, 
193.33 	including the federal income tax schedule F required by this section, or affidavits or other 
193.34 	proofs of the property owners and spouses submitted under this or another section to 
193.35 	support a claim for a property tax homestead classification are private data on individuals 
194.1 	as defined by section 13.02, subdivision 12, but, notwithstanding that section, the private 
194.2 	data may be disclosed to the commissioner of revenue, or, for purposes of proceeding 
194.3 	under the Revenue Recapture Act to recover personal property taxes owing, to the county 
194.4 	treasurer. 
194.5 	(d) If residential real estate is occupied and used for purposes of a homestead by 
194.6 	a relative of the owner and qualifies for a homestead under subdivision 1, paragraph 
194.7 	(c) or (d), in order for the property to receive homestead status, a homestead application 
194.8 	must be filed with the assessor. The application must be signed by each relative of an 
194.9 	owner who occupies the property and by each relative's spouse who also occupies the 
194.10 	property. The Social Security number of each relative and spouse of a relative occupying 
194.11 	the property shall be required on the homestead application filed under this subdivision. 
194.12 	If a different relative of the owner subsequently occupies the property, the owner of the 
194.13 	property must notify the assessor within 30 days of the change in occupancy. The Social 
194.14 	Security number of a relative or relative's spouse occupying the property is private data 
194.15 	on individuals as defined by section 13.02, subdivision 12, but may be disclosed to the 
194.16 	commissioner of revenue, or, for the purposes of proceeding under the Revenue Recapture 
194.17 	Act to recover personal property taxes owing, to the county treasurer.
194.18 	(e) The homestead application shall also notify the property owners that the 
194.19 	application filed under this section will not be mailed annually and that if the property 
194.20 	is granted homestead status for any assessment year, that same property shall remain 
194.21 	classified as homestead until the property is sold or transferred to another person, or 
194.22 	the owners, the spouse of the owner, or the relatives no longer use the property as their 
194.23 	homestead. Upon the sale or transfer of the homestead property, a certificate of value must 
194.24 	be timely filed with the county auditor as provided under section 272.115. Failure to 
194.25 	notify the assessor within 30 days that the property has been sold, transferred, or that the 
194.26 	owner, the spouse of the owner, or the relative is no longer occupying the property as a 
194.27 	homestead, shall result in the penalty provided under this subdivision and the property 
194.28 	will lose its current homestead status.
194.29 	(f) If the homestead application is not returned within 30 days, the county will send a 
194.30 	second application to the present owners of record. The notice of proposed property taxes 
194.31 	prepared under section 275.065, subdivision 3, shall reflect the property's classification. If 
194.32 	a homestead application has not been filed with the county by December 15, the assessor 
194.33 	shall classify the property as nonhomestead for the current assessment year for taxes 
194.34 	payable in the following year, provided that the owner may be entitled to receive the 
194.35 	homestead classification by proper application under section 375.192.
195.1 	(g) At the request of the commissioner, each county must give the commissioner a 
195.2 	list that includes the name and Social Security number of each occupant of homestead 
195.3 	property who is the property owner, property owner's spouse, qualifying relative of a 
195.4 	property owner, or a spouse of a qualifying relative. The commissioner shall use the 
195.5 	information provided on the lists as appropriate under the law, including for the detection 
195.6 	of improper claims by owners, or relatives of owners, under chapter 290A.
195.7 	(h) If the commissioner finds that a property owner may be claiming a fraudulent 
195.8 	homestead, the commissioner shall notify the appropriate counties. Within 90 days of 
195.9 	the notification, the county assessor shall investigate to determine if the homestead 
195.10 	classification was properly claimed. If the property owner does not qualify, the county 
195.11 	assessor shall notify the county auditor who will determine the amount of homestead 
195.12 	benefits that had been improperly allowed. For the purpose of this section, "homestead 
195.13 	benefits" means the tax reduction resulting from the classification as a homestead under 
195.14 	section 273.13, the taconite homestead credit under section 273.135, the residential 
195.15 	homestead and agricultural homestead credits under section 273.1384, and the 
195.16 	supplemental homestead credit under section 273.1391.
195.17 	The county auditor shall send a notice to the person who owned the affected property 
195.18 	at the time the homestead application related to the improper homestead was filed, 
195.19 	demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 
195.20 	of the homestead benefits. The person notified may appeal the county's determination 
195.21 	by serving copies of a petition for review with county officials as provided in section 
195.22 	278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 
195.23 	Court within 60 days of the date of the notice from the county. Procedurally, the appeal 
195.24 	is governed by the provisions in chapter 271 which apply to the appeal of a property tax 
195.25 	assessment or levy, but without requiring any prepayment of the amount in controversy. If 
195.26 	the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 
195.27 	has been filed, the county auditor shall certify the amount of taxes and penalty to the county 
195.28 	treasurer. The county treasurer will add interest to the unpaid homestead benefits and 
195.29 	penalty amounts at the rate provided in section 279.03 for real property taxes becoming 
195.30 	delinquent in the calendar year during which the amount remains unpaid. Interest may be 
195.31 	assessed for the period beginning 60 days after demand for payment was made.
195.32 	If the person notified is the current owner of the property, the treasurer may add the 
195.33 	total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 
195.34 	otherwise payable on the property by including the amounts on the property tax statements 
195.35 	under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 
195.36 	valorem taxes shall include interest accrued through December 31 of the year preceding 
196.1 	the taxes payable year for which the amounts are first added. These amounts, when added 
196.2 	to the property tax statement, become subject to all the laws for the enforcement of real or 
196.3 	personal property taxes for that year, and for any subsequent year.
196.4 	If the person notified is not the current owner of the property, the treasurer may 
196.5 	collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 
196.6 	the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 
196.7 	of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 
196.8 	tax obligations of the person who owned the property at the time the application related 
196.9 	to the improperly allowed homestead was filed. The treasurer may relieve a prior owner 
196.10 	of personal liability for the homestead benefits, penalty, interest, and costs, and instead 
196.11 	extend those amounts on the tax lists against the property as provided in this paragraph 
196.12 	to the extent that the current owner agrees in writing. On all demands, billings, property 
196.13 	tax statements, and related correspondence, the county must list and state separately the 
196.14 	amounts of homestead benefits, penalty, interest and costs being demanded, billed or 
196.15 	assessed.
196.16 	(i) Any amount of homestead benefits recovered by the county from the property 
196.17 	owner shall be distributed to the county, city or town, and school district where the 
196.18 	property is located in the same proportion that each taxing district's levy was to the total 
196.19 	of the three taxing districts' levy for the current year. Any amount recovered attributable 
196.20 	to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 
196.21 	deposited in the taconite property tax relief account. Any amount recovered that is 
196.22 	attributable to supplemental homestead credit is to be transmitted to the commissioner of 
196.23 	revenue for deposit in the general fund of the state treasury. The total amount of penalty 
196.24 	collected must be deposited in the county general fund.
196.25 	(j) If a property owner has applied for more than one homestead and the county 
196.26 	assessors cannot determine which property should be classified as homestead, the county 
196.27 	assessors will refer the information to the commissioner. The commissioner shall make 
196.28 	the determination and notify the counties within 60 days.
196.29 	(k) In addition to lists of homestead properties, the commissioner may ask the 
196.30 	counties to furnish lists of all properties and the record owners. The Social Security 
196.31 	numbers and federal identification numbers that are maintained by a county or city 
196.32 	assessor for property tax administration purposes, and that may appear on the lists retain 
196.33 	their classification as private or nonpublic data; but may be viewed, accessed, and used by 
196.34 	the county auditor or treasurer of the same county for the limited purpose of assisting the 
196.35 	commissioner in the preparation of microdata samples under section 270C.12. 
197.1 	(l) On or before April 30 each year beginning in 2007, each county must provide the 
197.2 	commissioner with the following data for each parcel of homestead property by electronic 
197.3 	means as defined in section 289A.02, subdivision 8: 
197.4 	(i) the property identification number assigned to the parcel for purposes of taxes 
197.5 	payable in the current year; 
197.6 	(ii) the name and Social Security number of each occupant of homestead property 
197.7 	who is the property owner, property owner's spouse, qualifying relative of a property 
197.8 	owner, or spouse of a qualifying relative; 
197.9 	(iii) the classification of the property under section 273.13 for taxes payable in the 
197.10 	current year and in the prior year; 
197.11 	(iv) an indication of whether the property was classified as a homestead for taxes 
197.12 	payable in the current year because of occupancy by a relative of the owner or by a 
197.13 	spouse of a relative; 
197.14 	(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
197.15 	current year and the prior year; 
197.16 	(vi) the market value of improvements to the property first assessed for tax purposes 
197.17 	for taxes payable in the current year; 
197.18 	(vii) the assessor's estimated market value assigned to the property for taxes payable 
197.19 	in the current year and the prior year; 
197.20 	(viii) the taxable market value assigned to the property for taxes payable in the 
197.21 	current year and the prior year; 
197.22 	(ix) whether there are delinquent property taxes owing on the homestead; 
197.23 	(x) the unique taxing district in which the property is located; and 
197.24 	(xi) such other information as the commissioner decides is necessary. 
197.25 	The commissioner shall use the information provided on the lists as appropriate 
197.26 	under the law, including for the detection of improper claims by owners, or relatives 
197.27 	of owners, under chapter 290A. 

197.28 	EFFECTIVE DATE. This section is effective for applications received after June 
197.29 	30, 2009.

197.30 	Sec. 8. Minnesota Statutes 2008, section 273.124, subdivision 21, is amended to read:
197.31 		Subd. 21.Trust property; homestead. Real or personal property held by a trustee 
197.32 	under a trust is eligible for classification as homestead property if: the property satisfies 
197.33 	the requirements of paragraph (a), (b), (c), or (d).
197.34 	(1) (a) The grantor or surviving spouse of the grantor of the trust occupies and 
197.35 	uses the property as a homestead;.
198.1 	(2) (b) A relative or surviving relative of the grantor who meets the requirements 
198.2 	of subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1, 
198.3 	paragraph (d), in the case of agricultural property, occupies and uses the property as 
198.4 	a homestead;.
198.5 	(3) (c) A family farm corporation, joint farm venture, limited liability company, or 
198.6 	partnership operating a family farm in which the grantor or the grantor's surviving spouse 
198.7 	is a shareholder, member, or partner rents the property,; and, either (1) a shareholder, 
198.8 	member, or partner of the corporation, joint farm venture, limited liability company, or 
198.9 	partnership occupies and uses the property as a homestead,; or is actively farming (2) the 
198.10 	property is at least 40 acres, including undivided government lots and correctional 40's, and 
198.11 	a shareholder, member, or partner of the tenant-entity is actively farming the property on 
198.12 	behalf of the corporation, joint farm venture, limited liability company, or partnership; or.
198.13 	(4) (d) A person who has received homestead classification for property taxes 
198.14 	payable in 2000 on the basis of an unqualified legal right under the terms of the trust 
198.15 	agreement to occupy the property as that person's homestead and who continues to use the 
198.16 	property as a homestead; or, a person who received the homestead classification for taxes 
198.17 	payable in 2005 under clause (3)paragraph (c) who does not qualify under clause (3)
198.18 	paragraph (c)  for taxes payable in 2006 or thereafter but who continues to qualify under 
198.19 	clause (3)paragraph (c)  as it existed for taxes payable in 2005.
198.20 	For purposes of this subdivision, "grantor" is defined as the person creating or 
198.21 	establishing a testamentary, inter Vivos, revocable or irrevocable trust by written 
198.22 	instrument or through the exercise of a power of appointment.

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

198.24 	Sec. 9. Minnesota Statutes 2008, section 273.13, subdivision 23, is amended to read:
198.25 		Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural 
198.26 	land that is homesteaded, along with any class 2b rural vacant land that is contiguous to 
198.27 	the class 2a land under the same ownership. The market value of the house and garage 
198.28 	and immediately surrounding one acre of land has the same class rates as class 1a or 1b 
198.29 	property under subdivision 22. The value of the remaining land including improvements 
198.30 	up to the first tier valuation limit of agricultural homestead property has a net class rate 
198.31 	of 0.5 percent of market value. The remaining property over the first tier has a class rate 
198.32 	of one percent of market value. For purposes of this subdivision, the "first tier valuation 
198.33 	limit of agricultural homestead property" and "first tier" means the limit certified under 
198.34 	section 273.11, subdivision 23. 
199.1 	(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 
199.2 	are agricultural land and buildings. Class 2a property has a net class rate of one percent of 
199.3 	market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a 
199.4 	property may contain property that would otherwise be classified as 2b, including but not 
199.5 	limited to sloughs, wooded wind shelters, acreage abutting ditches, and other similar land 
199.6 	impractical for the assessor to value separately from the rest of the property.
199.7 	An assessor may classify the part of a parcel described in this subdivision that is used 
199.8 	for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
199.9 	(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, 
199.10 	that are unplatted real estate, rural in character and not used for agricultural purposes, 
199.11 	including land used for growing trees for timber, lumber, and wood and wood products, 
199.12 	that is not improved with a structure. The presence of a minor, ancillary nonresidential 
199.13 	structure as defined by the commissioner of revenue does not disqualify the property from 
199.14 	classification under this paragraph. Any parcel of 20 acres or more improved with a 
199.15 	structure that is not a minor, ancillary nonresidential structure must be split-classified, and 
199.16 	ten acres must be assigned to the split parcel containing the structure. Class 2b property 
199.17 	has a net class rate of one percent of market value unless it is part of an agricultural 
199.18 	homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
199.19 	(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 
199.20 	acres statewide per taxpayer that is being managed under a forest management plan that 
199.21 	meets the requirements of chapter 290C, but is not enrolled in the sustainable forest 
199.22 	resource management incentive program. It has a class rate of .65 percent, provided 
199.23 	that the owner of the property must apply to the assessor to receive the reduced class in 
199.24 	order for the property to initially qualify for the reduced rate and provide the information 
199.25 	required by the assessor to verify that the property qualifies for the reduced rate. If the 
199.26 	assessor receives the application and information before May 1 in an assessment year, 
199.27 	the property qualifies beginning with that assessment year. If the assessor receives the 
199.28 	application and information after April 30 in an assessment year, the property qualifies 
199.29 	beginning with the next assessment year. The commissioner of natural resources must 
199.30 	concur that the land is qualified. The commissioner of natural resources shall annually 
199.31 	provide county assessors verification information on a timely basis. The presence of a 
199.32 	minor, ancillary nonresidential structure as defined by the commissioner of revenue does 
199.33 	not disqualify the property from classification under this paragraph.
199.34 	(e) Agricultural land as used in this section means contiguous acreage of ten 
199.35 	acres or more, used during the preceding year for agricultural purposes. "Agricultural 
199.36 	purposes" as used in this section means the raising, cultivation, drying, or storage of 
200.1 	agricultural products for sale, or the storage of machinery or equipment used in support 
200.2 	of agricultural production by the same farm entity. For a property to be classified as 
200.3 	agricultural based only on the drying or storage of agricultural products, the products 
200.4 	being dried or stored must have been produced by the same farm entity as the entity 
200.5 	operating the drying or storage facility. "Agricultural purposes" also includes enrollment 
200.6 	in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal 
200.7 	Conservation Reserve Program as contained in Public Law 99-198 or a similar state 
200.8 	or federal conservation program if the property was classified as agricultural (i) under 
200.9 	this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment. 
200.10 	Agricultural classification shall not be based upon the market value of any residential 
200.11 	structures on the parcel or contiguous parcels under the same ownership. 
200.12 	(f) Real estate of less than ten acres, which is exclusively or intensively used for 
200.13 	raising or cultivating agricultural products, shall be considered as agricultural land. To 
200.14 	qualify under this paragraph, property that includes a residential structure must be used 
200.15 	intensively for one of the following purposes:
200.16 	(i) for drying or storage of grain or storage of machinery or equipment used to 
200.17 	support agricultural activities on other parcels of property operated by the same farming 
200.18 	entity;
200.19 	(ii) as a nursery, provided that only those acres used to produce nursery stock are 
200.20 	considered agricultural land;
200.21 	(iii) for livestock or poultry confinement, provided that land that is used only for 
200.22 	pasturing and grazing does not qualify; or
200.23 	(iv) for market farming; for purposes of this paragraph, "market farming" means the 
200.24 	cultivation of one or more fruits or vegetables or production of animal or other agricultural 
200.25 	products for sale to local markets by the farmer or an organization with which the farmer 
200.26 	is affiliated. 
200.27 	(g) Land shall be classified as agricultural even if all or a portion of the agricultural 
200.28 	use of that property is the leasing to, or use by another person for agricultural purposes. 
200.29 	Classification under this subdivision is not determinative for qualifying under 
200.30 	section 273.111. 
200.31 	(h) The property classification under this section supersedes, for property tax 
200.32 	purposes only, any locally administered agricultural policies or land use restrictions that 
200.33 	define minimum or maximum farm acreage. 
200.34 	(i) The term "agricultural products" as used in this subdivision includes production 
200.35 	for sale of: 
201.1 	(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 
201.2 	animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 
201.3 	bees, and apiary products by the owner; 
201.4 	(2) fish bred for sale and consumption if the fish breeding occurs on land zoned 
201.5 	for agricultural use; 
201.6 	(3) the commercial boarding of horses if the boarding is done in conjunction with 
201.7 	raising or cultivating agricultural products as defined in clause (1); 
201.8 	(4) property which is owned and operated by nonprofit organizations used for 
201.9 	equestrian activities, excluding racing; 
201.10 	(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed 
201.11 	under section 97A.115; 
201.12 	(6) insects primarily bred to be used as food for animals; 
201.13 	(7) trees, grown for sale as a crop, including short rotation woody crops, and not 
201.14 	sold for timber, lumber, wood, or wood products; and 
201.15 	(8) maple syrup taken from trees grown by a person licensed by the Minnesota 
201.16 	Department of Agriculture under chapter 28A as a food processor. 
201.17 	(j) If a parcel used for agricultural purposes is also used for commercial or industrial 
201.18 	purposes, including but not limited to: 
201.19 	(1) wholesale and retail sales; 
201.20 	(2) processing of raw agricultural products or other goods; 
201.21 	(3) warehousing or storage of processed goods; and 
201.22 	(4) office facilities for the support of the activities enumerated in clauses (1), (2), 
201.23 	and (3), 
201.24 	the assessor shall classify the part of the parcel used for agricultural purposes as class 
201.25 	1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 
201.26 	use. The grading, sorting, and packaging of raw agricultural products for first sale is 
201.27 	considered an agricultural purpose. A greenhouse or other building where horticultural 
201.28 	or nursery products are grown that is also used for the conduct of retail sales must be 
201.29 	classified as agricultural if it is primarily used for the growing of horticultural or nursery 
201.30 	products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 
201.31 	those products. Use of a greenhouse or building only for the display of already grown 
201.32 	horticultural or nursery products does not qualify as an agricultural purpose. 
201.33 	(k) The assessor shall determine and list separately on the records the market value 
201.34 	of the homestead dwelling and the one acre of land on which that dwelling is located. If 
201.35 	any farm buildings or structures are located on this homesteaded acre of land, their market 
201.36 	value shall not be included in this separate determination. 
202.1 	(k) (l) Class 2d airport landing area consists of a landing area or public access area 
202.2 	of a privately owned public use airport. It has a class rate of one percent of market value. 
202.3 	To qualify for classification under this paragraph, a privately owned public use airport 
202.4 	must be licensed as a public airport under section 360.018. For purposes of this paragraph, 
202.5 	"landing area" means that part of a privately owned public use airport properly cleared, 
202.6 	regularly maintained, and made available to the public for use by aircraft and includes 
202.7 	runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. 
202.8 	A landing area also includes land underlying both the primary surface and the approach 
202.9 	surfaces that comply with all of the following: 
202.10 	(i) the land is properly cleared and regularly maintained for the primary purposes of 
202.11 	the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 
202.12 	facilities for servicing, repair, or maintenance of aircraft is not included as a landing area; 
202.13 	(ii) the land is part of the airport property; and 
202.14 	(iii) the land is not used for commercial or residential purposes. 
202.15 	The land contained in a landing area under this paragraph must be described and certified 
202.16 	by the commissioner of transportation. The certification is effective until it is modified, 
202.17 	or until the airport or landing area no longer meets the requirements of this paragraph. 
202.18 	For purposes of this paragraph, "public access area" means property used as an aircraft 
202.19 	parking ramp, apron, or storage hangar, or an arrival and departure building in connection 
202.20 	with the airport. 
202.21 	(l) (m) Class 2e consists of land with a commercial aggregate deposit that is not 
202.22 	actively being mined and is not otherwise classified as class 2a or 2b. It has a class rate of 
202.23 	one percent of market value. To qualify for classification under this paragraph, the property 
202.24 	must be at least ten contiguous acres in size and the owner of the property must record with 
202.25 	the county recorder of the county in which the property is located an affidavit containing:
202.26 	(1) a legal description of the property;
202.27 	(2) a disclosure that the property contains a commercial aggregate deposit that is not 
202.28 	actively being mined but is present on the entire parcel enrolled;
202.29 	(3) documentation that the conditional use under the county or local zoning 
202.30 	ordinance of this property is for mining; and
202.31 	(4) documentation that a permit has been issued by the local unit of government 
202.32 	or the mining activity is allowed under local ordinance. The disclosure must include a 
202.33 	statement from a registered professional geologist, engineer, or soil scientist delineating 
202.34 	the deposit and certifying that it is a commercial aggregate deposit.
202.35 	For purposes of this section and section 273.1115, "commercial aggregate deposit" 
202.36 	means a deposit that will yield crushed stone or sand and gravel that is suitable for use 
203.1 	as a construction aggregate; and "actively mined" means the removal of top soil and 
203.2 	overburden in preparation for excavation or excavation of a commercial deposit.
203.3 	(m) (n) When any portion of the property under this subdivision or subdivision 22 
203.4 	begins to be actively mined, the owner must file a supplemental affidavit within 60 days 
203.5 	from the day any aggregate is removed stating the number of acres of the property that is 
203.6 	actively being mined. The acres actively being mined must be (1) valued and classified 
203.7 	under subdivision 24 in the next subsequent assessment year, and (2) removed from the 
203.8 	aggregate resource preservation property tax program under section 273.1115, if the 
203.9 	land was enrolled in that program. Copies of the original affidavit and all supplemental 
203.10 	affidavits must be filed with the county assessor, the local zoning administrator, and the 
203.11 	Department of Natural Resources, Division of Land and Minerals. A supplemental 
203.12 	affidavit must be filed each time a subsequent portion of the property is actively mined, 
203.13 	provided that the minimum acreage change is five acres, even if the actual mining activity 
203.14 	constitutes less than five acres.
203.15 	(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are 
203.16 	not rules, are exempt from the rulemaking provisions of chapter 14, and the provisions 
203.17 	in section 14.386 concerning exempt rules do not apply.

203.18 	EFFECTIVE DATE. The section is effective the day following final enactment.

203.19 	Sec. 10. Minnesota Statutes 2008, section 273.13, subdivision 25, is amended to read:
203.20 		Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 
203.21 	units and used or held for use by the owner or by the tenants or lessees of the owner 
203.22 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
203.23 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
203.24 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
203.25 	purposes, without regard to whether the property has been platted or subdivided. The 
203.26 	market value of class 4a property has a class rate of 1.25 percent. 
203.27 	(b) Class 4b includes: 
203.28 	(1) residential real estate containing less than four units that does not qualify as class 
203.29 	4bb, other than seasonal residential recreational property; 
203.30 	(2) manufactured homes not classified under any other provision; 
203.31 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
203.32 	farm classified under subdivision 23, paragraph (b) containing two or three units; and 
203.33 	(4) unimproved property that is classified residential as determined under subdivision 
203.34 	33. 
203.35 	The market value of class 4b property has a class rate of 1.25 percent. 
204.1 	(c) Class 4bb includes: 
204.2 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
204.3 	residential recreational property; and 
204.4 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
204.5 	nonhomestead farm classified under subdivision 23, paragraph (b). 
204.6 	Class 4bb property has the same class rates as class 1a property under subdivision 22. 
204.7 	Property that has been classified as seasonal residential recreational property at 
204.8 	any time during which it has been owned by the current owner or spouse of the current 
204.9 	owner does not qualify for class 4bb. 
204.10 	(d) Class 4c property includes: 
204.11 	(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph 
204.12 	(b), clause (1), real and personal property devoted to temporary and seasonal residential 
204.13 	occupancy for recreation purposes, including real and personal property devoted to 
204.14 	temporary and seasonal residential occupancy for recreation purposes and not devoted to 
204.15 	commercial purposes for more than 250 days in the year preceding the year of assessment. 
204.16 	For purposes of this clause, property is devoted to a commercial purpose on a specific 
204.17 	day if any portion of the property is used for residential occupancy, and a fee is charged 
204.18 	for residential occupancy. Class 4c property under this clause must contain three or 
204.19 	more rental units. A "rental unit" is defined as a cabin, condominium, townhouse, 
204.20 	sleeping room, or individual camping site equipped with water and electrical hookups 
204.21 	for recreational vehicles. Class 4c property under this clause must provide recreational 
204.22 	activities such as renting ice fishing houses, boats and motors, snowmobiles, downhill or 
204.23 	cross-country ski equipment; provide marina services, launch services, or guide services; 
204.24 	or sell bait and fishing tackle. A camping pad offered for rent by a property that otherwise 
204.25 	qualifies for class 4c under this clause is also class 4c under this clause regardless of the 
204.26 	term of the rental agreement, as long as the use of the camping pad does not exceed 250 
204.27 	days. In order for a property to be classified as class 4c, seasonal residential recreational 
204.28 	for commercial purposes under this clause, at least 40 percent of the annual gross lodging 
204.29 	receipts related to the property must be from business conducted during 90 consecutive 
204.30 	days and either (i) at least 60 percent of all paid bookings by lodging guests during the 
204.31 	year must be for periods of at least two consecutive nights; or (ii) at least 20 percent 
204.32 	of the annual gross receipts must be from charges for rental of fish houses, boats and 
204.33 	motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina 
204.34 	services, launch services, and guide services, or the sale of bait and fishing tackle. For 
204.35 	purposes of this determination, a paid booking of five or more nights shall be counted as 
204.36 	two bookings. Class 4c property classified under this clause also includes commercial 
205.1 	use real property used exclusively for recreational purposes in conjunction with other 
205.2 	class 4c property classified under this clause and devoted to temporary and seasonal 
205.3 	residential occupancy for recreational purposes, up to a total of two acres, provided the 
205.4 	property is not devoted to commercial recreational use for more than 250 days in the year 
205.5 	preceding the year of assessment and is located within two miles of the class 4c property 
205.6 	with which it is used. Owners of real and personal property devoted to temporary and 
205.7 	seasonal residential occupancy for recreation purposes and all or a portion of which was 
205.8 	devoted to commercial purposes for not more than 250 days in the year preceding the 
205.9 	year of assessment desiring classification as class 4c, must submit a declaration to the 
205.10 	assessor designating the cabins or units occupied for 250 days or less in the year preceding 
205.11 	the year of assessment by January 15 of the assessment year. Those cabins or units and 
205.12 	a proportionate share of the land on which they are located must be designated class 
205.13 	4c under this clause  as otherwise provided. The remainder of the cabins or units and a 
205.14 	proportionate share of the land on which they are located will be designated as class 3a. 
205.15 	The owner of property desiring designation as class 4c property under this clause must 
205.16 	provide guest registers or other records demonstrating that the units for which class 4c 
205.17 	designation is sought were not occupied for more than 250 days in the year preceding the 
205.18 	assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, 
205.19 	(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility 
205.20 	operated on a commercial basis not directly related to temporary and seasonal residential 
205.21 	occupancy for recreation purposes does not qualify for class 4c; 
205.22 	(2) qualified property used as a golf course if: 
205.23 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
205.24 	dues, but a membership fee may not be required in order to use the property for golfing, 
205.25 	and its green fees for golfing must be comparable to green fees typically charged by 
205.26 	municipal courses; and 
205.27 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 
205.28 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
205.29 	with the golf course is classified as class 3a property; 
205.30 	(3) real property up to a maximum of three acres of land owned and used by a 
205.31 	nonprofit community service oriented organization and that is not used for residential 
205.32 	purposes on either a temporary or permanent basis, qualifies for class 4c provided that 
205.33 	it meets either of the following: 
205.34 	(i) the property is not used for a revenue-producing activity for more than six days 
205.35 	in the calendar year preceding the year of assessment; or 
206.1 	(ii) the organization makes annual charitable contributions and donations at least 
206.2 	equal to the property's previous year's property taxes and the property is allowed to be 
206.3 	used for public and community meetings or events for no charge, as appropriate to the 
206.4 	size of the facility. 
206.5 	For purposes of this clause, 
206.6 	(A) "charitable contributions and donations" has the same meaning as lawful 
206.7 	gambling purposes under section 349.12, subdivision 25, excluding those purposes 
206.8 	relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; 
206.9 	(B) "property taxes" excludes the state general tax; 
206.10 	(C) a "nonprofit community service oriented organization" means any corporation, 
206.11 	society, association, foundation, or institution organized and operated exclusively for 
206.12 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
206.13 	federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 
206.14 	Revenue Code; and 
206.15 	(D) "revenue-producing activities" shall include but not be limited to property or that 
206.16 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
206.17 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
206.18 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
206.19 	insurance business, or office or other space leased or rented to a lessee who conducts a 
206.20 	for-profit enterprise on the premises. 
206.21 	Any portion of the property not qualifying under either item (i) which is used for 
206.22 	revenue-producing activities for more than six days in the calendar year preceding the 
206.23 	year of assessment shall be assessed as or (ii) is class 3a. The use of the property for social 
206.24 	events open exclusively to members and their guests for periods of less than 24 hours, 
206.25 	when an admission is not charged nor any revenues are received by the organization shall 
206.26 	not be considered a revenue-producing activity. 
206.27 	The organization shall maintain records of its charitable contributions and donations 
206.28 	and of public meetings and events held on the property and make them available upon 
206.29 	request any time to the assessor to ensure eligibility. An organization meeting the 
206.30 	requirement under item (ii) must file an application by May 1 with the assessor for 
206.31 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
206.32 	application form and instructions; 
206.33 	(4) postsecondary student housing of not more than one acre of land that is owned by 
206.34 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
206.35 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
206.36 	miles of the border of a college campus; 
207.1 	(5) manufactured home parks as defined in section 327.14, subdivision 3; 
207.2 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
207.3 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
207.4 	and is located within the metropolitan area as defined in section 473.121, subdivision 2; 
207.5 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
207.6 	under section 272.01, subdivision 2, and the land on which it is located, provided that: 
207.7 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
207.8 	Airports Commission, or group thereof; and 
207.9 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
207.10 	leased premise, prohibits commercial activity performed at the hangar. 
207.11 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
207.12 	be filed by the new owner with the assessor of the county where the property is located 
207.13 	within 60 days of the sale; 
207.14 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
207.15 	section 272.01, subdivision 2, and the land on which it is located, provided that: 
207.16 	(i) the land abuts a public airport; and 
207.17 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
207.18 	agreement restricting the use of the premises, prohibiting commercial use or activity 
207.19 	performed at the hangar; and 
207.20 	(9) residential real estate, a portion of which is used by the owner for homestead 
207.21 	purposes, and that is also a place of lodging, if all of the following criteria are met: 
207.22 	(i) rooms are provided for rent to transient guests that generally stay for periods 
207.23 	of 14 or fewer days; 
207.24 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
207.25 	in the basic room rate; 
207.26 	(iii) meals are not provided to the general public except for special events on fewer 
207.27 	than seven days in the calendar year preceding the year of the assessment; and 
207.28 	(iv) the owner is the operator of the property.
207.29 	The market value subject to the 4c classification under this clause is limited to five rental 
207.30 	units. Any rental units on the property in excess of five, must be valued and assessed as 
207.31 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
207.32 	be classified as class 1a property under subdivision 22; and
207.33 	(10) real property up to a maximum of three acres and operated as a restaurant 
207.34 	as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 
207.35 	as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 
207.36 	is either devoted to commercial purposes for not more than 250 consecutive days, or 
208.1 	receives at least 60 percent of its annual gross receipts from business conducted during 
208.2 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
208.3 	included in determining the property's qualification under subitem (B). The property's 
208.4 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
208.5 	sales located on the premises must be excluded. Owners of real property desiring 4c 
208.6 	classification under this clause must submit an annual declaration to the assessor by 
208.7 	February 1 of the current assessment year, based on the property's relevant information for 
208.8 	the preceding assessment year. 
208.9 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
208.10 	parcel of seasonal residential recreational property not used for commercial purposes has 
208.11 	the same class rates as class 4bb property, (ii) manufactured home parks assessed under 
208.12 	clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal 
208.13 	residential recreational property has a class rate of one percent for the first $500,000 of 
208.14 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
208.15 	property described in clause (4) has a class rate of one percent, (v) the market value of 
208.16 	property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi) 
208.17 	that portion of the market value of property in clause (9) qualifying for class 4c property 
208.18 	has a class rate of 1.25 percent. 
208.19 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
208.20 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
208.21 	of the units in the building qualify as low-income rental housing units as certified under 
208.22 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
208.23 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
208.24 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
208.25 	land as the qualifying low-income rental housing units are to the total units in the building. 
208.26 	For all properties qualifying as class 4d, the market value determined by the assessor must 
208.27 	be based on the normal approach to value using normal unrestricted rents. 
208.28 	Class 4d property has a class rate of 0.75 percent. 

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

208.30 	Sec. 11. Minnesota Statutes 2008, section 273.13, subdivision 33, is amended to read:
208.31 		Subd. 33.Classification of unimproved property. (a) All real property that is not 
208.32 	improved with a structure must be classified according to its current use.
208.33 	(b) Except as provided in subdivision 23, paragraph (c) or (d), real property that is 
208.34 	not improved with a structure and for which there is no identifiable current use must be 
208.35 	classified according to its highest and best use permitted under the local zoning ordinance. 
209.1 	If the ordinance permits more than one use, the land must be classified according to the 
209.2 	highest and best use permitted under the ordinance. If no such ordinance exists, the 
209.3 	assessor shall consider the most likely potential use of the unimproved land based upon 
209.4 	the use made of surrounding land or land in proximity to the unimproved land.

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

209.6 	Sec. 12. Minnesota Statutes 2008, section 273.33, subdivision 2, is amended to read:
209.7 		Subd. 2. Listing and assessment by commissioner. The personal property, 
209.8 	consisting of the pipeline system of mains, pipes, and equipment attached thereto, of 
209.9 	pipeline companies and others engaged in the operations or business of transporting natural 
209.10 	gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed with and 
209.11 	assessed by the commissioner of revenue and the values provided to the city or county 
209.12 	assessor by order. This subdivision shall not apply to the assessment of the products 
209.13 	transported through the pipelines nor to the lines of local commercial gas companies 
209.14 	engaged primarily in the business of distributing gas to consumers at retail nor to pipelines 
209.15 	used by the owner thereof to supply natural gas or other petroleum products exclusively 
209.16 	for such owner's own consumption and not for resale to others. If more than 85 percent 
209.17 	of the natural gas or other petroleum products actually transported over the pipeline is 
209.18 	used for the owner's own consumption and not for resale to others, then this subdivision 
209.19 	shall not apply; provided, however, that in that event, the pipeline shall be assessed in 
209.20 	proportion to the percentage of gas actually transported over such pipeline that is not used 
209.21 	for the owner's own consumption. On or before June 30 August 1, the commissioner shall 
209.22 	certify to the auditor of each county, the amount of such personal property assessment 
209.23 	against each company in each district in which such property is located. 

209.24 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
209.25 	thereafter.

209.26 	Sec. 13. Minnesota Statutes 2008, section 273.37, subdivision 2, is amended to read:
209.27 		Subd. 2. Listing and assessment by commissioner. Transmission lines of less 
209.28 	than 69 kv, transmission lines of 69 kv and above located in an unorganized township, 
209.29 	and distribution lines, and equipment attached thereto, having a fixed situs outside the 
209.30 	corporate limits of cities except distribution lines taxed as provided in sections 273.40 and 
209.31 	273.41, shall be listed with and assessed by the commissioner of revenue in the county 
209.32 	where situated and the values provided to the city or county assessor by order. The 
209.33 	commissioner shall assess such property at the percentage of market value fixed by law; 
210.1 	and, on or before June 30 August 1, shall certify to the auditor of each county in which 
210.2 	such property is located the amount of the assessment made against each company and 
210.3 	person owning such property. 

210.4 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
210.5 	thereafter.

210.6 	Sec. 14. Minnesota Statutes 2008, section 274.13, subdivision 2, is amended to read:
210.7 		Subd. 2.Special board; delegated duties. The board of equalization for any 
210.8 	county may appoint a special board of equalization and may delegate to it the powers and 
210.9 	duties in subdivision 1. The special board of equalization shall serve at the direction and 
210.10 	discretion of the appointing county board, subject to the restrictions imposed by law on 
210.11 	the appointing board. The appointing board may determine the number of members to be 
210.12 	appointed to the special board, the compensation and expenses to be paid, and the term of 
210.13 	office of each member. At least one member of the special board of equalization must be 
210.14 	an appraiser, realtor, or other person familiar with property valuations in the county. The 
210.15 	county auditor is a nonvoting member and serves as the recorder for the special board.
210.16 	The special board is subject to the quorum requirements for county boards and the training 
210.17 	requirements for county boards in section 274.135, subdivision 2.

210.18 	EFFECTIVE DATE. The section is effective the day following final enactment.

210.19 	Sec. 15. Minnesota Statutes 2008, section 274.135, subdivision 3, is amended to read:
210.20 		Subd. 3. Proof of compliance; transfer of duties. (a) Any county that 
210.21 	conducts county boards of appeal and equalization meetings must provide proof to the 
210.22 	commissioner by December 1, 2009, and each year thereafter, that it is in compliance 
210.23 	with the requirements of subdivision 2. Beginning in 2009, this notice must also verify 
210.24 	that there was a quorum of voting members at each meeting of the board of appeal and 
210.25 	equalization in the current year. A county that does not comply with these requirements 
210.26 	is deemed to have transferred its board of appeal and equalization powers to the special 
210.27 	board of equalization appointed pursuant to section 274.13, subdivision 2, beginning 
210.28 	with the following year's assessment and continuing unless the powers are reinstated 
210.29 	under paragraph (c). A county that does not comply with the requirements of subdivision 
210.30 	2 and has not appointed a special board of equalization shall appoint a special board of 
210.31 	equalization before the following year's assessment. 
210.32 	(b) The county shall notify the taxpayers when the board of appeal and equalization 
210.33 	for a county has been transferred to the special board of equalization under this subdivision 
211.1 	and, prior to the meeting time of the special board of equalization, the county shall make 
211.2 	available to those taxpayers a procedure for a review of the assessments, including, but 
211.3 	not limited to, open book meetings. This alternate review process must take place in 
211.4 	April and May. 
211.5 	(c) A county board whose powers are transferred to the special board of equalization 
211.6 	under this subdivision may be reinstated by resolution of the county board and upon proof 
211.7 	of compliance with the requirements of subdivision 2. The resolution and proofs must be 
211.8 	provided to the commissioner by December 1 in order to be effective for the following 
211.9 	year's assessment. 
211.10 	(d) If a person who was entitled to appeal to the county board of appeal and 
211.11 	equalization or to the county special board of equalization is not able to do so in a 
211.12 	particular year because the county board or special board did not meet the quorum and 
211.13 	training requirements in this section and section 274.13, or because the special board 
211.14 	was not appointed, that person may instead appeal to the commissioner of revenue, 
211.15 	provided that the appeal is received by the commissioner prior to August 1. The appeal 
211.16 	is not subject to either chapter 14 or section 270C.92. The commissioner must issue 
211.17 	an appropriate order to the county assessor in response to each timely appeal, either 
211.18 	upholding or changing the valuation or classification of the property. Prior to October 1 of 
211.19 	each year, the commissioner must charge and bill the county where the property is located 
211.20 	$500 for each tax parcel covered by an order issued under this paragraph in that year. 
211.21 	Amounts received by the commissioner under this paragraph must be deposited in the 
211.22 	state's general fund. If payment of a billed amount is not received by the commissioner 
211.23 	before December 1 of the year when billed, the commissioner must deduct that unpaid 
211.24 	amount from any state aid the commissioner would otherwise pay to the county under 
211.25 	chapter 477A in the next year. Late payments may either be returned to the county 
211.26 	uncashed and undeposited or may be accepted. If a late payment is accepted, the state aid 
211.27 	paid to the county under chapter 477A must be adjusted within 12 months to eliminate any 
211.28 	reduction that occurred because the payment was late. Amounts needed to make these 
211.29 	adjustments are included in the appropriation under section 477A.03, subdivision 2.

211.30 	EFFECTIVE DATE. This section is effective for taxes payable in 2010 and 
211.31 	thereafter.

211.32 	Sec. 16. Minnesota Statutes 2008, section 274.14, is amended to read:
211.33 	274.14 LENGTH OF SESSION; RECORD.
212.1 	The board may must meet on anyafter the second Friday in June on at least one 
212.2 	meeting day and may meet for up to ten consecutive meeting days in June, after the 
212.3 	second Friday in June. The actual meeting dates must be contained on the valuation 
212.4 	notices mailed to each property owner in the county as provided in section 273.121. For 
212.5 	this purpose, "meeting days" is defined as any day of the week excluding Sunday. At 
212.6 	the board's discretion, "meeting days" may include Saturday. No action taken by the 
212.7 	county board of review after June 30 is valid, except for corrections permitted in sections 
212.8 	273.01 and 274.01. The county auditor shall keep an accurate record of the proceedings 
212.9 	and orders of the board. The record must be published like other proceedings of county 
212.10 	commissioners. A copy of the published record must be sent to the commissioner of 
212.11 	revenue, with the abstract of assessment required by section 274.16.
212.12 	For counties that conduct either regular board of review meetings or open book 
212.13 	meetings, at least one of the meeting days must include a meeting that does not end 
212.14 	before 7:00 p.m. For counties that require taxpayer appointments for the board of review, 
212.15 	appointments must include some available times that extend until at least 7:00 p.m. The 
212.16 	county may have a Saturday meeting in lieu of, or in addition to, the extended meeting 
212.17 	times under this paragraph.

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

212.19 	Sec. 17. Minnesota Statutes 2008, section 274.175, is amended to read:
212.20 	274.175 VALUES FINALIZED.
212.21 	The assessments recorded by the county assessor and the county auditor under 
212.22 	sections 273.124, subdivision 9; 274.16; 274.17; or other law for real and personal 
212.23 	property are final on July 1 of the assessment year, except for property added to the 
212.24 	assessment rolls under section 272.02, subdivision 38, and assessments certified to the 
212.25 	auditor under sections 273.33, subdivision 2, and 273.37, subdivision 2, or deleted 
212.26 	because of tax forfeiture pursuant to chapter 281. No changes in value may be made 
212.27 	after July 1 of the assessment year, except for corrections permitted in sections 273.01
212.28 	and 274.01, or assessments certified to the auditor under sections 273.33, subdivision 2, 
212.29 	and 273.37, subdivision 2.  

212.30 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
212.31 	thereafter.

213.1 	Sec. 18. Minnesota Statutes 2008, section 290C.06, is amended to read:
213.2 	290C.06 CALCULATION OF AVERAGE ESTIMATED MARKET VALUE; 
213.3 	TIMBERLAND MANAGED FOREST LAND.
213.4 	The commissioner shall annually calculate a statewide average estimated market 
213.5 	value per acre for class 2b timberland2c managed forest land under section 273.13, 
213.6 	subdivision 23, paragraph (b).

213.7 	EFFECTIVE DATE. This section is effective for calculations made in 2010 and 
213.8 	thereafter.

213.9 	Sec. 19. Minnesota Statutes 2008, section 290C.07, is amended to read:
213.10 	290C.07 CALCULATION OF INCENTIVE PAYMENT.
213.11 	An approved claimant under the sustainable forest incentive program is eligible to 
213.12 	receive an annual payment. The payment shall equal the greater of: 
213.13 	(1) the difference between the property tax that would be paid on the land using the 
213.14 	previous year's statewide average total township tax rate and the a class rate for class 2b 
213.15 	timberland under section 273.13, subdivision 23, paragraph (b) of one percent, if the land 
213.16 	were valued at (i) the average statewide timberland managed forest land market value per 
213.17 	acre calculated under section 290C.06, and (ii) the average statewide timberland managed 
213.18 	forest land current use value per acre calculated under section 290C.02, subdivision 5; or 
213.19 	(2) two-thirds of the property tax amount determined by using the previous 
213.20 	year's statewide average total township tax rate, the estimated market value per acre as 
213.21 	calculated in section 290C.06, and the a class rate for 2b timberland under section 273.13, 
213.22 	subdivision 23, paragraph (b) of one percent, provided that the payment shall be no less 
213.23 	than $7 per acre for each acre enrolled in the sustainable forest incentive program. 

213.24 	EFFECTIVE DATE. This section is effective for calculations made in 2010 and 
213.25 	thereafter.

213.26 	Sec. 20. Minnesota Statutes 2008, section 477A.011, subdivision 34, is amended to 
213.27 	read:
213.28 		Subd. 34.City revenue need. (a) For a city with a population equal to or greater 
213.29 	than 2,500, "city revenue need" is the greater of 285 or the sum of (1) 5.0734098 times the 
213.30 	pre-1940 housing percentage; plus (2) 19.141678 times the population decline percentage; 
213.31 	plus (3) 2504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the 
213.32 	metropolitan area factor; minus (6) 49.10638 times the household size.
214.1 	(b) For a city with a population less than 2,500, "city revenue need" is the sum of 
214.2 	(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial 
214.3 	industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4) 
214.4 	1.206 times the transformed population; minus (5) 62.772.
214.5 	(c) For a city with a population of 2,500 or more and a population in one of the most 
214.6 	recently available five years that was less than 2,500, "city revenue need" is the sum of (1) 
214.7 	its city revenue need calculated under paragraph (a) multiplied by its transition factor; 
214.8 	plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied 
214.9 	by the difference between one and its transition factor. For purposes of this paragraph, a 
214.10 	city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's 
214.11 	population estimate has been 2,500 or more. This provision only applies for aids payable 
214.12 	in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It 
214.13 	applies to any city for aids payable in 2009 and thereafter. The city revenue need under 
214.14 	this paragraph may not be less than 285.
214.15 	(d) The city revenue need cannot be less than zero.
214.16 	(e) For calendar year 2005 and subsequent years, the city revenue need for a city, 
214.17 	as determined in paragraphs (a) to (d), is multiplied by the ratio of the annual implicit 
214.18 	price deflator for government consumption expenditures and gross investment for state 
214.19 	and local governments as prepared by the United States Department of Commerce, for 
214.20 	the most recently available year to the 2003 implicit price deflator for state and local 
214.21 	government purchases.

214.22 	EFFECTIVE DATE. This section is effective for aids payable in 2009 and 
214.23 	thereafter.

214.24 	Sec. 21. Minnesota Statutes 2008, section 477A.011, subdivision 42, is amended to 
214.25 	read:
214.26 		Subd. 42.City jobs base. (a) "City jobs base" for a city with a population of 5,000 or 
214.27 	more is equal to the product of (1) $25.20, (2) the number of jobs per capita in the city, and 
214.28 	(3) its population. For cities with a population less than 5,000, the city jobs base is equal 
214.29 	to zero. For a city receiving aid under subdivision 36, paragraph (l) (k), its city jobs base 
214.30 	is reduced by the lesser of 36 percent of the amount of aid received under that paragraph 
214.31 	or $1,000,000. No city's city jobs base may exceed $4,725,000 under this paragraph.
214.32 	(b) For calendar year 2010 and subsequent years, the city jobs base for a city, as 
214.33 	determined in paragraph (a), is multiplied by the ratio of the appropriation under section 
214.34 	477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under 
214.35 	that section for aids payable in 2009.
215.1 	(c) For purposes of this subdivision, "jobs per capita in the city" means (1) the 
215.2 	average annual number of employees in the city based on the data from the Quarterly 
215.3 	Census of Employment and Wages, as reported by the Department of Employment and 
215.4 	Economic Development, for the most recent calendar year available as of May 1, 2008, 
215.5 	divided by (2) the city's population for the same calendar year as the employment data. 
215.6 	The commissioner of the Department of Employment and Economic Development shall 
215.7 	certify to the city the average annual number of employees for each city by June 1, 2008. 
215.8 	A city may challenge an estimate under this paragraph by filing its specific objection, 
215.9 	including the names of employers that it feels may have misreported data, in writing with 
215.10 	the commissioner by June 20, 2008. The commissioner shall make every reasonable effort 
215.11 	to address the specific objection and adjust the data as necessary. The commissioner shall 
215.12 	certify the estimates of the annual employment to the commissioner of revenue by July 15, 
215.13 	2008, including any estimates still under objection.

215.14 	EFFECTIVE DATE. This section is effective for aids payable in 2009 and 
215.15 	thereafter.

215.16 	Sec. 22. Minnesota Statutes 2008, section 477A.013, subdivision 8, is amended to read:
215.17 		Subd. 8. City formula aid. (a) In calendar year 2009, the formula aid for a city 
215.18 	is equal to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need 
215.19 	increase percentage multiplied by its unmet need. 
215.20 	(b) In calendar year 2010 and subsequent years, the formula aid for a city is equal 
215.21 	to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase 
215.22 	percentage multiplied by the average of its unmet need for the most recently available 
215.23 	two years.
215.24 	No city may have a formula aid amount less than zero. The need increase percentage 
215.25 	must be the same for all cities. 
215.26 	The applicable need increase percentage must be calculated by the Department of 
215.27 	Revenue so that the total of the aid under subdivision 9 equals the total amount available 
215.28 	for aid under section 477A.03. For aids payable in 2009 only, all data used in calculating 
215.29 	aid to cities under sections 477A.011 to 477A.013 will be based on the data available for 
215.30 	calculating aid to cities for aids payable in 2008. For aids payable in 2010 and thereafter, 
215.31 	data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be the 
215.32 	most recently available data as of January 1 in the year in which the aid is calculated
215.33 	except as provided in section 477A.011, subdivisions 3 and 35.

216.1 	EFFECTIVE DATE. This section is effective for assessment year 2009 and 
216.2 	thereafter.

216.3 	Sec. 23.  REPEALER.
 216.4 	Minnesota Rules, parts 8115.0200; 8115.0300; 8115.0400; 8115.0500; 8115.0600; 
216.5 	8115.1000; 8115.1100; 8115.1200; 8115.1300; 8115.1400; 8115.1500; 8115.1600; 
216.6 	8115.1700; 8115.1800; 8115.1900; 8115.2000; 8115.2100; 8115.2200; 8115.2300; 
216.7 	8115.2400; 8115.2500; 8115.2600; 8115.2700; 8115.2800; 8115.2900; 8115.3000; 
216.8 	8115.4000; 8115.4100; 8115.4200; 8115.4300; 8115.4400; 8115.4500; 8115.4600; 
216.9 	8115.4700; 8115.4800; 8115.4900; 8115.5000; 8115.5100; 8115.5200; 8115.5300; 
216.10 	8115.5400; 8115.5500; 8115.5600; 8115.5700; 8115.5800; 8115.5900; 8115.6000; 
216.11 	8115.6100; 8115.6200; 8115.6300; 8115.6400; and 8115.9900; are repealed.

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

216.13 	ARTICLE 13
216.14 	DEPARTMENT CONDITIONAL USE DEEDS 

216.15 	Section 1. Minnesota Statutes 2008, section 282.01, subdivision 1, is amended to read:
216.16 		Subdivision 1.Classification as conservation or nonconservation. (a) It is the 
216.17 	general policy of this state to encourage the best use of tax-forfeited lands, recognizing that 
216.18 	some lands in public ownership should be retained and managed for public benefits while 
216.19 	other lands should be returned to private ownership. Parcels of land becoming the property 
216.20 	of the state in trust under law declaring the forfeiture of lands to the state for taxes must be 
216.21 	classified by the county board of the county in which the parcels lie as conservation or,
216.22 	nonconservation, or as conservation land suited for particular purposes. In making the 
216.23 	classification the board shall consider the present use of adjacent lands, the productivity of 
216.24 	the soil, the character of forest or other growth, accessibility of lands to established roads, 
216.25 	schools, and other public services, their peculiar suitability or desirability for particular 
216.26 	uses, and the suitability of the forest resources on the land for multiple use, and sustained 
216.27 	yield management. The classification, furthermore, must encourage and foster a mode of 
216.28 	land utilization that will facilitate the economical and adequate provision of transportation, 
216.29 	roads, water supply, drainage, sanitation, education, and recreation; facilitate reduction of 
216.30 	governmental expenditures; conserve and develop the natural resources; and foster and 
216.31 	develop agriculture and other industries in the districts and places best suited to them.
216.32 	In making the classification the county board may use information made available 
216.33 	by any office or department of the federal, state, or local governments, or by any other 
217.1 	person or agency possessing pertinent information at the time the classification is made. 
217.2 	The lands may be reclassified from time to time as the county board considers necessary 
217.3 	or desirable, except for conservation lands held by the state free from any trust in favor of 
217.4 	any taxing district.
217.5 	If the lands are located within the boundaries of an organized town, with taxable 
217.6 	valuation in excess of $20,000, or incorporated municipality, the classification or 
217.7 	reclassification and sale must first be approved by the town board of the town or the 
217.8 	governing body of the municipality in which the lands are located. The town board of 
217.9 	the town or the governing body of the municipality is considered to have approved 
217.10 	the classification or reclassification and sale if the county board is not notified of the 
217.11 	disapproval of the classification or reclassification and sale within 60 days of the date the 
217.12 	request for approval was transmitted to the town board of the town or governing body 
217.13 	of the municipality. If the town board or governing body desires to acquire any parcel 
217.14 	lying in the town or municipality by procedures authorized in this section, it must file a 
217.15 	written application with the county board to withhold the parcel from public sale. The 
217.16 	application must be filed within 60 days of the request for classification or reclassification 
217.17 	and sale. The county board shall then withhold the parcel from public sale for six months. 
217.18 	A municipality or governmental subdivision shall pay maintenance costs incurred by 
217.19 	the county during the six-month period while the property is withheld from public sale, 
217.20 	provided the property is not offered for public sale after the six-month period. A clerical 
217.21 	error made by county officials does not serve to eliminate the request of the town board 
217.22 	or governing body if the board or governing body has forwarded the application to the 
217.23 	county auditor. If the town board or governing body of the municipality fails to submit an 
217.24 	application and a resolution of the board or governing body to acquire the property within 
217.25 	the withholding period, the county may offer the property for sale upon the expiration of 
217.26 	the withholding period.
217.27 	(b) Whenever the county board deems it appropriate, the board may hold a meeting 
217.28 	for the purpose of reclassifying tax-forfeited land that has not been sold or released from 
217.29 	the trust. The criteria and procedures for reclassification are the same as those required for 
217.30 	an initial classification.
217.31 	(c) Prior to meeting for the purpose of classifying or reclassifying tax-forfeited 
217.32 	lands, the county board must give notice of its intent to meet for that purpose as provided 
217.33 	in this paragraph. The notice must be given no more than 90 days and no less than 60 
217.34 	days before the date of the meeting; provided that if the meeting is rescheduled, notice 
217.35 	of the new date, time, and location must be given at least 14 days before the date of the 
217.36 	rescheduled meeting. The notice must be posted on a Web site under the procedures in 
218.1 	section 331A.12. The board must also mail a notice by electronic means to each person 
218.2 	who requests notice of meetings dealing with this subject and who agrees as provided 
218.3 	in chapter 325L to accept notice that is mailed by electronic means. Receipt of actual 
218.4 	notice under the conditions specified in section 13D.04, subdivision 7, satisfies the notice 
218.5 	requirements of this paragraph.
218.6 	The board may classify or reclassify tax-forfeited lands at any regular or special 
218.7 	meeting, as those terms are defined in chapter 13D and may conduct only this business, or 
218.8 	this business as well as other business or activities at the meeting.
218.9 	(d) At the meeting, the county board must allow any person or agency possessing 
218.10 	pertinent information to make or submit comments and recommendations about the 
218.11 	pending classification or reclassification. In addition, representatives of governmental 
218.12 	entities in attendance must be allowed to describe plans, ideas, or projects that may 
218.13 	involve use or acquisition of the property by that or another governmental entity. After 
218.14 	allowing testimony, the board may classify, reclassify, or delay taking action on any parcel 
218.15 	or parcels.
218.16 	(e) When classifying, reclassifying, appraising, and selling lands under this chapter, 
218.17 	the county board may designate the tracts as assessed and acquired, or may by resolution 
218.18 	provide for the subdivision of the tracts into smaller units or for the grouping of several 
218.19 	tracts into one tract when the subdivision or grouping is deemed advantageous for 
218.20 	conservation or sale purposes. This paragraph does not authorize the county board to 
218.21 	subdivide a parcel or tract of tax-forfeited land that, as assessed and acquired, is withheld 
218.22 	from sale under section 282.018, subdivision 1.

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

218.24 	Sec. 2. Minnesota Statutes 2008, section 282.01, subdivision 1a, is amended to read:
218.25 		Subd. 1a.Conveyance; generally to public entities. (a) Upon written request 
218.26 	from a state agency or a governmental subdivision of the state, a parcel of unsold 
218.27 	tax-forfeited land is withheld from sale or lease to others for a maximum of six months. 
218.28 	The request must be submitted to the county auditor. Upon receipt, the county auditor 
218.29 	must withhold the parcel from sale or lease to any other party for six months, and 
218.30 	must confirm the starting date of the six-month withholding period to the requesting 
218.31 	agency or subdivision. If the request is from a governmental subdivision of the state, the 
218.32 	governmental subdivision must pay the maintenance costs incurred by the county during 
218.33 	the period the parcel is withheld. The county board may approve a sale or conveyance to 
218.34 	the requesting party during the withholding period. A conveyance of the property to the 
218.35 	requesting party terminates the withholding period.
219.1 	A governmental subdivision of the state must not make, and a county auditor must 
219.2 	not act upon, a second request to withhold a parcel from sale or lease within 18 months of 
219.3 	a previous request for that parcel.
219.4 	(b) Nonconservation tax-forfeited lands may be sold by the county board, for 
219.5 	their market value as determined by the county board, to an organized or incorporated 
219.6 	governmental subdivision of the state for any public purpose for which the subdivision is 
219.7 	authorized to acquire property or.
219.8 	(c) Nonconservation tax-forfeited lands may be released from the trust in favor of the 
219.9 	taxing districts on application of to the county board by a state agency for an authorized 
219.10 	use at not less than their market value as determined by the county board.
219.11 	(d) Nonconservation tax-forfeited lands may be sold by the county board to an 
219.12 	organized or incorporated governmental subdivision of the state or state agency for less 
219.13 	than their market value if:
219.14 	(1) the county board determines that a sale at a reduced price is in the public interest 
219.15 	because (i) a reduced price is necessary to provide an incentive to correct the blighted 
219.16 	conditions that make the lands undesirable in the open market, or (ii) the reduced price 
219.17 	will lead to the development of affordable housing; and
219.18 	(2) the governmental subdivision or state agency has documented (i) its specific 
219.19 	plans for correcting the blighted conditions or developing affordable housing, and (ii) the 
219.20 	specific law or laws that empower it to acquire real property in furtherance of such plans.
219.21 	(e) Nonconservation tax-forfeited land held in trust in favor of the taxing districts 
219.22 	may be conveyed by the commissioner of revenue may convey by deed in the name 
219.23 	of the state a tract of tax-forfeited land held in trust in favor of the taxing districts to a 
219.24 	governmental subdivision for an authorized public use, if an application is submitted to 
219.25 	the commissioner which includes a statement of facts as to the use to be made of the 
219.26 	tract and the need therefor and the favorable recommendation of the county board. An 
219.27 	authorized public use under this paragraph is a use that either (i) allows an indefinite 
219.28 	segment of the public to physically use and enjoy the property in numbers appropriate to 
219.29 	its size and use, or (ii) is for a public service facility. Authorized public uses as defined 
219.30 	in this paragraph are limited to:
219.31 	(1) a road, or right-of-way for a road;
219.32 	(2) a park that is both available to, and accessible by, the public that contains 
219.33 	amenities such as campgrounds, playgrounds, ball fields, trails, or shelters;
219.34 	(3) trails for walking, bicycling, snowmobiling, or other recreational purposes, along 
219.35 	with a reasonable amount of surrounding land maintained in its natural state;
219.36 	(4) transit ways for buses or commuter trains;
220.1 	(5) public beaches or boat launches;
220.2 	(6) public parking;
220.3 	(7) civic recreation or conference facilities; and
220.4 	(8) public service facilities such as fire halls, police stations, lift stations, water 
220.5 	tower, sanitation facilities, water treatment facilities, and administrative offices.
220.6 	(f) The commissioner of revenue must convey a parcel of nonconservation 
220.7 	tax-forfeited land to a local governmental subdivision by quit claim deed on behalf of 
220.8 	the state upon the favorable recommendation of the county board if the governmental 
220.9 	subdivision has certified to the board that prior to forfeiture the subdivision was entitled 
220.10 	to the parcel under a written development agreement, but the conveyance failed to occur 
220.11 	prior to forfeiture. No compensation or consideration is required for, and no conditions 
220.12 	attach to, the conveyance.
220.13 	(g) Conservation tax-forfeited land may be sold to a governmental subdivision of 
220.14 	the state for less than its market value for either: (i) creation or preservation of wetlands, 
220.15 	(ii) drainage or storage of storm water under a storm water management plan, or (iii) 
220.16 	preservation, or restoration and preservation, of the land in its natural state. The deed in 
220.17 	such case must contain a restrictive covenant limiting the use of the land to one of these 
220.18 	purposes for 30 years or until the property is reconveyed back to the state in trust. At any 
220.19 	time, the governmental subdivision may reconvey the property to the state in trust for the 
220.20 	taxing districts. The deed of reconveyance is subject to approval by the commissioner of 
220.21 	revenue. No part of a purchase price determined under this paragraph shall be refunded 
220.22 	upon a reconveyance, but the amount paid for a conveyance under this paragraph may be 
220.23 	taken into account by the county board when setting the terms of a future sale of the same 
220.24 	property to the same governmental subdivision under paragraph (b) or (d).

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

220.26 	Sec. 3. Minnesota Statutes 2008, section 282.01, subdivision 1c, is amended to read:
220.27 		Subd. 1c.Deed of conveyance; form; approvals. The deed of conveyance for 
220.28 	property conveyed for a an authorized public use under the authorities in subdivision 
220.29 	1a, paragraph (e), must be on a form approved by the attorney general and must be 
220.30 	conditioned on continued use for the purpose stated in the application as provided in this 
220.31 	section. These deeds are conditional use deeds that convey a defeasible estate. Reversion 
220.32 	of the estate occurs by operation of law and without the requirement for any affirmative 
220.33 	act by, or on behalf of the state when there is a failure to put the property to the approved 
220.34 	authorized public use for which it was conveyed, or an abandonment of that use; except as 
220.35 	provided in subdivision 1d.

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

221.2 	Sec. 4. Minnesota Statutes 2008, section 282.01, subdivision 1d, is amended to read:
221.3 		Subd. 1d.Reverter for failure to use; conveyance to state. (a) If after three 
221.4 	years from the date of the conveyance a governmental subdivision to which tax-forfeited 
221.5 	land has been conveyed for a specified an authorized public use as provided in this 
221.6 	section fails to put the land to that use, or abandons that use, the governing body of the 
221.7 	subdivision may, must: (1) with the approval of the county board, purchase the property 
221.8 	for an authorized public purpose at the present appraised market value as determined by 
221.9 	the county board. In that case, the commissioner of revenue shall, upon proper written 
221.10 	application approved by the county board, issue an appropriate deed to the subdivisions 
221.11 	free of a use restriction and reverter. The governing body may also, or (2) authorize the 
221.12 	proper officers to convey the land, or the part of the land not required for an authorized 
221.13 	public use, to the state of Minnesota. in trust for the taxing districts. If the governing body 
221.14 	purchases the property under clause (1), the commissioner of revenue shall, upon property 
221.15 	application submitted by the county auditor, convey the property on behalf of the state by 
221.16 	quit claim deed to the subdivision free of a use restriction and the possibility of reversion 
221.17 	or defeasement. If the governing body decides to reconvey the property to the state under 
221.18 	clause (2), the officers shall execute a deed of conveyance immediately. The conveyance is 
221.19 	subject to the approval of the commissioner and its form must be approved by the attorney 
221.20 	general. A sale, lease, transfer, or other conveyance of tax-forfeited lands by a housing 
221.21 	and redevelopment authority, a port authority, an economic development authority, or a 
221.22 	city as authorized by chapter 469 is not an abandonment of use and the lands shall not be 
221.23 	reconveyed to the state nor shall they revert to the state. A certificate made by a housing 
221.24 	and redevelopment authority, a port authority, an economic development authority, or a 
221.25 	city referring to a conveyance by it and stating that the conveyance has been made as 
221.26 	authorized by chapter 469 may be filed with the county recorder or registrar of titles, and 
221.27 	the rights of reverter in favor of the state provided by subdivision 1e will then terminate. 
221.28 	No vote of the people is required for the conveyance. For the purposes of this paragraph, 
221.29 	there is no failure to put the land to the authorized public use and no abandonment of 
221.30 	that use if a formal plan of the governmental subdivision shows an intended future use 
221.31 	of the land for the authorized public use.
221.32 	(b) Property held by a governmental subdivision of the state under a conditional use 
221.33 	deed executed by the commissioner of revenue after January 1, 2006, may be acquired 
221.34 	by that governmental subdivision after 15 years from the date of the conveyance if 
221.35 	the commissioner determines upon written application from the subdivision that, the 
222.1 	subdivision has in fact put the property to the authorized public use for which it was 
222.2 	conveyed, and the subdivision has made a finding that it has no current plans to change 
222.3 	the use of the lands. Prior to conveying the property, the commissioner shall inquire 
222.4 	whether the county board where the land is located objects to a conveyance of the property 
222.5 	to the subdivision without conditions and without further act by or obligation of the 
222.6 	subdivision. If the county does not object within 60 days, and the commissioner makes 
222.7 	a favorable determination, the commissioner shall issue a quit claim deed on behalf of 
222.8 	the state unconditionally conveying the property to the governmental subdivision. For 
222.9 	purposes of this paragraph, demonstration of an intended future use for the authorized 
222.10 	public use in a formal plan of the governmental subdivision does not constitute use for 
222.11 	that authorized public use.
222.12 	(c) Property held by a governmental subdivision of the state under a conditional use 
222.13 	deed executed by the commissioner of revenue before January 1, 2006, is released from 
222.14 	the use restriction and possibility of reversion on January 1, 2021, if the county board 
222.15 	records a document describing the land and citing this paragraph. The county board may 
222.16 	authorize the county treasurer to deduct the amount of the recording fees from future 
222.17 	settlements of property taxes to the subdivision.
222.18 	(d) All property held by a governmental subdivision of the state under a conditional 
222.19 	use deed executed by the commissioner of revenue is released from the use restriction 
222.20 	and possibility of reversion on the later of: (i) January 1, 2012; (ii) 40 years after the 
222.21 	date the deed was executed; or (iii) upon final resolution of an appeal to district court 
222.22 	under subdivision 1e if the appeal was commenced prior to January 1, 2012. Upon the 
222.23 	occurrence of item (i), (ii), or (iii), the governmental subdivision may record a certificate 
222.24 	referring to the land, the original conveyance, and to the release under this paragraph.

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

222.26 	Sec. 5. Minnesota Statutes 2008, section 282.01, is amended by adding a subdivision 
222.27 	to read:
222.28 		Subd. 1g.Conditional use deed fees. (a) A governmental subdivision applying 
222.29 	for a conditional use deed under subdivision 1a, paragraph (e), must submit a fee of $250 
222.30 	to the commissioner of revenue along with the application. If the application is denied, 
222.31 	the commissioner shall refund $150 of the application fee.
222.32 	(b) The proceeds from the fees must be deposited in a Department of Revenue 
222.33 	conditional use deed revolving fund. The sums deposited into the revolving fund are 
222.34 	appropriated to the commissioner of revenue for the purpose of making the refunds 
222.35 	described in this subdivision, and administering conditional use deed laws.

223.1 	EFFECTIVE DATE. This section is effective for applications received by the 
223.2 	commissioner after June 30, 2009.

223.3 	Sec. 6. Minnesota Statutes 2008, section 282.01, subdivision 2, is amended to read:
223.4 		Subd. 2.Conservation lands; county board supervision. (a) Lands classified as 
223.5 	conservation lands, unless reclassified as nonconservation lands, sold to a governmental 
223.6 	subdivision of the state, designated as lands primarily suitable for forest production and 
223.7 	sold as hereinafter provided, or released from the trust in favor of the taxing districts, as 
223.8 	herein provided, will must be held under the supervision of the county board of the county 
223.9 	within which such parcels lie. and must not be conveyed or sold unless the lands are:
223.10 	The county board may, by resolution duly adopted, declare lands classified as 
223.11 	conservation lands as primarily suitable for timber production and as lands which should 
223.12 	be placed in private ownership for such purposes. If such action be approved by the 
223.13 	commissioner of natural resources, the lands so designated, or any part thereof, may be 
223.14 	sold by the county board in the same manner as provided for the sale of lands classified as 
223.15 	nonconservation lands. Such county action and the approval of the commissioner shall be 
223.16 	limited to lands lying within areas zoned for restricted uses under the provisions of Laws 
223.17 	1939, chapter 340, or any amendments thereof.
223.18 	(1) reclassified as nonconservation lands;
223.19 	(2) conveyed to a governmental subdivision of the state under subdivision 1a;
223.20 	(3) released from the trust in favor of the taxing districts as provided in paragraph 
223.21 	(b); or
223.22 	(4) conveyed or sold under the authority of another general or special law.
223.23 	(b) The county board may, by resolution duly adopted, resolve that certain lands 
223.24 	classified as conservation lands shall be devoted to conservation uses and may submit 
223.25 	such resolution to the commissioner of natural resources. If, upon investigation, the 
223.26 	commissioner of natural resources determines that the lands covered by such resolution, 
223.27 	or any part thereof, can be managed and developed for conservation purposes, the 
223.28 	commissioner shall make a certificate describing the lands and reciting the acceptance 
223.29 	thereof on behalf of the state for such purposes. The commissioner shall transmit the 
223.30 	certificate to the county auditor, who shall note the same upon the auditor's records and 
223.31 	record the same with the county recorder. The title to all lands so accepted shall be held 
223.32 	by the state free from any trust in favor of any and all taxing districts and such lands 
223.33 	shall be devoted thereafter to the purposes of forestry, water conservation, flood control, 
223.34 	parks, game refuges, controlled game management areas, public shooting grounds, or 
223.35 	other public recreational or conservation uses, and managed, controlled, and regulated 
224.1 	for such purposes under the jurisdiction of the commissioner of natural resources and 
224.2 	the divisions of the department.
224.3 	(c) All proceeds derived from the sale of timber, lease of hay stumpage, or other 
224.4 	revenue from such lands under the jurisdiction of the commissioner of natural resources 
224.5 	shall be paid into the general fund of the state.
224.6 	In case (d) If the commissioner of natural resources shall determine determines that 
224.7 	any tract of land so held acquired  by the state under paragraph (b) and situated within 
224.8 	or adjacent to the boundaries of any governmental subdivision of the state is suitable 
224.9 	for use by such subdivision for any authorized public purpose, the commissioner may 
224.10 	convey such tract by deed in the name of the state to such subdivision upon the filing 
224.11 	with the commissioner of a resolution adopted by a majority vote of all the members 
224.12 	of the governing body thereof, stating the purpose for which the land is desired. The 
224.13 	deed of conveyance shall be upon a form approved by the attorney general and must be 
224.14 	conditioned upon continued use for the purpose stated in the resolution. All proceeds 
224.15 	derived from the sale of timber, lease of hay stumpage, or other revenue from such 
224.16 	lands under the jurisdiction of the natural resources commissioner shall be paid into the 
224.17 	general fund of the state.
224.18 	(e) The county auditor, with the approval of the county board, may lease conservation 
224.19 	lands remaining under the jurisdiction supervision of the county board and sell timber 
224.20 	and hay stumpage thereon in the manner hereinafter provided, and all proceeds derived 
224.21 	therefrom shall be distributed in the same manner as provided in section 282.04. 

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

224.23 	Sec. 7. Minnesota Statutes 2008, section 282.01, subdivision 3, is amended to read:
224.24 		Subd. 3.Nonconservation lands; appraisal and sale. (a) All parcels of land 
224.25 	classified as nonconservation, except those which may be reserved, shall be sold as 
224.26 	provided, if it is determined, by the county board of the county in which the parcels lie, 
224.27 	that it is advisable to do so, having in mind their accessibility, their proximity to existing 
224.28 	public improvements, and the effect of their sale and occupancy on the public burdens. 
224.29 	Any parcels of land proposed to be sold shall be first appraised by the county board of 
224.30 	the county in which the parcels lie. The parcels may be reappraised whenever the county 
224.31 	board deems it necessary to carry out the intent of sections 282.01 to 282.13.
224.32 	(b) In an appraisal the value of the land and any standing timber on it shall be 
224.33 	separately determined. No parcel of land containing any standing timber may be sold until 
224.34 	the appraised value of the timber on it and the sale of the land have been approved by the 
224.35 	commissioner of natural resources. The commissioner shall base review of a proposed 
225.1 	sale on the policy and considerations specified in subdivision 1. The decision of the 
225.2 	commissioner shall be in writing and shall state the reasons for it. The commissioner's 
225.3 	decision is exempt from the rulemaking provisions of chapter 14 and section 14.386
225.4 	does not apply. The county may appeal the decision of the commissioner in accordance 
225.5 	with chapter 14. 
225.6 	(c) In any county in which a state forest or any part of it is located, the county 
225.7 	auditor shall submit to the commissioner at least 60 days before the first publication of the 
225.8 	list of lands to be offered for sale a list of all lands included on the list which are situated 
225.9 	outside of any incorporated municipality. If, at any time before the opening of the sale, the 
225.10 	commissioner notifies the county auditor in writing that there is standing timber on any 
225.11 	parcel of such land, the parcel shall not be sold unless the requirements of this section 
225.12 	respecting the separate appraisal of the timber and the approval of the appraisal by the 
225.13 	commissioner have been complied with. The commissioner may waive the requirement 
225.14 	of the 60-day notice as to any parcel of land which has been examined and the timber 
225.15 	value approved as required by this section.
225.16 	(d) If any public improvement is made by a municipality after any parcel of land has 
225.17 	been forfeited to the state for the nonpayment of taxes, and the improvement is assessed in 
225.18 	whole or in part against the property benefited by it, the clerk of the municipality shall 
225.19 	certify to the county auditor, immediately upon the determination of the assessments for 
225.20 	the improvement, the total amount that would have been assessed against the parcel of land 
225.21 	if it had been subject to assessment; or if the public improvement is made, petitioned for, 
225.22 	ordered in or assessed, whether the improvement is completed in whole or in part, at any 
225.23 	time between the appraisal and the sale of the parcel of land, the cost of the improvement 
225.24 	shall be included as a separate item and added to the appraised value of the parcel of land 
225.25 	at the time it is sold. No sale of a parcel of land shall discharge or free the parcel of land 
225.26 	from lien for the special benefit conferred upon it by reason of the public improvement 
225.27 	until the cost of it, including penalties, if any, is paid. The county board shall determine 
225.28 	the amount, if any, by which the value of the parcel was enhanced by the improvement and 
225.29 	include the amount as a separate item in fixing the appraised value for the purpose of sale. 
225.30 	In classifying, appraising, and selling the lands, the county board may designate the tracts 
225.31 	as assessed and acquired, or may by resolution provide for the subdivision of the tracts into 
225.32 	smaller units or for the grouping of several tracts into one tract when the subdivision or 
225.33 	grouping is deemed advantageous for the purpose of sale. Each such smaller tract or larger 
225.34 	tract must be classified and appraised as such before being offered for sale. If any such 
225.35 	lands have once been classified, the board of county commissioners, in its discretion, may, 
225.36 	by resolution, authorize the sale of the smaller tract or larger tract without reclassification.

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

226.2 	Sec. 8. Minnesota Statutes 2008, section 282.01, subdivision 4, is amended to read:
226.3 		Subd. 4.Sale: method, requirements, effects. The sale authorized under 
226.4 	subdivision 3 must be conducted by the county auditor at the county seat of the county in 
226.5 	which the parcels lie, except that in St. Louis and Koochiching Counties, the sale may 
226.6 	be conducted in any county facility within the county. The sale must not be for less than 
226.7 	the appraised value except as provided in subdivision 7a. The parcels must be sold for 
226.8 	cash only and at not less than the appraised value, unless the county board of the county 
226.9 	has adopted a resolution providing for their sale on terms, in which event the resolution 
226.10 	controls with respect to the sale. When the sale is made on terms other than for cash only 
226.11 	(1) a payment of at least ten percent of the purchase price must be made at the time of 
226.12 	purchase, and the balance must be paid in no more than ten equal annual installments, or 
226.13 	(2) the payments must be made in accordance with county board policy, but in no event 
226.14 	may the board require more than 12 installments annually, and the contract term must not 
226.15 	be for more than ten years. Standing timber or timber products must not be removed from 
226.16 	these lands until an amount equal to the appraised value of all standing timber or timber 
226.17 	products on the lands at the time of purchase has been paid by the purchaser. If a parcel of 
226.18 	land bearing standing timber or timber products is sold at public auction for more than 
226.19 	the appraised value, the amount bid in excess of the appraised value must be allocated 
226.20 	between the land and the timber in proportion to their respective appraised values. In that 
226.21 	case, standing timber or timber products must not be removed from the land until the 
226.22 	amount of the excess bid allocated to timber or timber products has been paid in addition 
226.23 	to the appraised value of the land. The purchaser is entitled to immediate possession, 
226.24 	subject to the provisions of any existing valid lease made in behalf of the state.
226.25 	For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price 
226.26 	is subject to interest at the rate determined pursuant to section 549.09. The unpaid balance 
226.27 	of the purchase price for sales occurring after December 31, 1990, is subject to interest 
226.28 	at the rate determined in section 279.03, subdivision 1a. The interest rate is subject to 
226.29 	change each year on the unpaid balance in the manner provided for rate changes in section 
226.30 	549.09 or 279.03, subdivision 1a, whichever, is applicable. Interest on the unpaid contract 
226.31 	balance on sales occurring before July 1, 1982, is payable at the rate applicable to the sale 
226.32 	at the time that the sale occurred. 

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

226.34 	Sec. 9. Minnesota Statutes 2008, section 282.01, subdivision 7, is amended to read:
227.1 		Subd. 7.County sales; notice, purchase price, disposition. The sale must 
227.2 	commence at the time determined by the county board of the county in which the parcels 
227.3 	are located. The county auditor shall offer the parcels of land in order in which they 
227.4 	appear in the notice of sale, and shall sell them to the highest bidder, but not for a sum 
227.5 	less than the appraised value, until all of the parcels of land have been offered. Then the 
227.6 	county auditor shall sell any remaining parcels to anyone offering to pay the appraised 
227.7 	value, except that if the person could have repurchased a parcel of property under section 
227.8 	282.012 or 282.241, that person may not purchase that same parcel of property at the sale 
227.9 	under this subdivision for a purchase price less than the sum of all taxes, assessments, 
227.10 	penalties, interest, and costs due at the time of forfeiture computed under section 282.251, 
227.11 	and any special assessments for improvements certified as of the date of sale. The sale 
227.12 	must continue until all the parcels are sold or until the county board orders a reappraisal or 
227.13 	withdraws any or all of the parcels from sale. The list of lands may be added to and the 
227.14 	added lands may be sold at any time by publishing the descriptions and appraised values. 
227.15 	The added lands must be: (1) parcels of land that have become forfeited and classified 
227.16 	as nonconservation since the commencement of any prior sale; (2) parcels classified as 
227.17 	nonconservation that have been reappraised; (3) parcels that have been reclassified as 
227.18 	nonconservation; or (4) other parcels that are subject to sale but were omitted from the 
227.19 	existing list for any reason. The descriptions and appraised values must be published in 
227.20 	the same manner as provided for the publication of the original list. Parcels added to the 
227.21 	list must first be offered for sale to the highest bidder before they are sold at appraised 
227.22 	value. All parcels of land not offered for immediate sale, as well as parcels that are offered 
227.23 	and not immediately sold, continue to be held in trust by the state for the taxing districts 
227.24 	interested in each of the parcels, under the supervision of the county board. Those parcels 
227.25 	may be used for public purposes until sold, as directed by the county board. 

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

227.27 	Sec. 10. Minnesota Statutes 2008, section 282.01, subdivision 7a, is amended to read:
227.28 		Subd. 7a.City sales; alternate procedures. Land located in a home rule charter 
227.29 	or statutory city, or in a town which cannot be improved because of noncompliance with 
227.30 	local ordinances regarding minimum area, shape, frontage or access may be sold by the 
227.31 	county auditor pursuant to this subdivision if the auditor determines that a nonpublic sale 
227.32 	will encourage the approval of sale of the land by the city or town and promote its return 
227.33 	to the tax rolls. If the physical characteristics of the land indicate that its highest and best 
227.34 	use will be achieved by combining it with an adjoining parcel and the city or town has not 
227.35 	adopted a local ordinance governing minimum area, shape, frontage, or access, the land 
228.1 	may also be sold pursuant to this subdivision. If the property consists of an undivided 
228.2 	interest in land or land and improvements, the property may also be sold to the other 
228.3 	owners under this subdivision. The sale of land pursuant to this subdivision shall be 
228.4 	subject to any conditions imposed by the county board pursuant to section 282.03. The 
228.5 	governing body of the city or town may recommend to the county board conditions to be 
228.6 	imposed on the sale. The county auditor may restrict the sale to owners of lands adjoining 
228.7 	the land to be sold. The county auditor shall conduct the sale by sealed bid or may select 
228.8 	another means of sale. The land shall be sold to the highest bidder but in no event shall the 
228.9 	land and may be sold for less than its appraised value. All owners of land adjoining the 
228.10 	land to be sold shall be given a written notice at least 30 days prior to the sale. 
228.11 	This subdivision shall be liberally construed to encourage the sale and utilization 
228.12 	of tax-forfeited land, to eliminate nuisances and dangerous conditions and to increase 
228.13 	compliance with land use ordinances.

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

228.15 	Sec. 11. Minnesota Statutes 2008, section 287.2205, is amended to read:
228.16 	287.2205 TAX-FORFEITED LAND. 
228.17 	Before a state deed for tax-forfeited land may be issued, the deed tax must be paid 
228.18 	by the purchaser of tax-forfeited land whether the purchase is the result of a public 
228.19 	auction or private sale or a repurchase of tax-forfeited land. State agencies and local 
228.20 	units of government that acquire tax-forfeited land by purchase or any other means are 
228.21 	subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a 
228.22 	governmental subdivision for an authorized public use under section 282.01, subdivision 
228.23 	1a, or for redevelopment purposes under section 282.01, subdivision 1b. 

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

228.25 	Sec. 12.  REPEALER.
 228.26 	Minnesota Statutes 2008, section 282.01, subdivisions 1b, 9, 10, and 11, are repealed.

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

228.28 	ARTICLE 14
228.29 	DEPARTMENT MISCELLANEOUS

228.30 	Section 1. Minnesota Statutes 2008, section 270B.14, subdivision 16, is amended to 
228.31 	read:
229.1 		Subd. 16.Disclosure to law enforcement authorities. Under circumstances 
229.2 	involving threat of death or physical injury to any individual, or harassment of a 
229.3 	Department of Revenue employee, the commissioner may disclose return information 
229.4 	to the extent necessary to apprise appropriate federal, state, or local law enforcement 
229.5 	authorities of such circumstances. For purposes of this subdivision, "harassment" is 
229.6 	purposeful conduct directed at an individual and causing an individual to feel frightened, 
229.7 	threatened, oppressed, persecuted, or intimidated. For purposes of harassment, the return 
229.8 	information that initially can be disclosed is limited to the name, address, and phone 
229.9 	number of the harassing individual, the name of the employee being harassed, and the 
229.10 	nature and circumstances of the harassment. Data disclosed under this subdivision are 
229.11 	classified under section 13.82 once they are received by the law enforcement authority.  

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

229.13 	Sec. 2. Minnesota Statutes 2008, section 270C.12, is amended by adding a subdivision 
229.14 	to read:
229.15 		Subd. 5.Duration. Notwithstanding the provisions of any statutes to the contrary, 
229.16 	including section 15.059, the coordinating committee as established by this section to 
229.17 	oversee and coordinate preparation of the microdata samples of income tax returns and 
229.18 	other information shall not expire.

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

229.20 	Sec. 3. Minnesota Statutes 2008, section 270C.446, subdivision 2, is amended to read:
229.21 		Subd. 2. Required and excluded tax preparers. (a) Subject to the limitations of 
229.22 	paragraph (b), the commissioner must publish lists of tax preparers as defined in section 
229.23 	289A.60, subdivision 13, paragraph (f), who have been convicted under section 289A.63
229.24 	for returns or claims prepared as a tax preparer or assessed penalties in excess of $1,000 
229.25 	under section 289A.60, subdivision 13, paragraph (a). 
229.26 	(b) For the purposes of this section, tax preparers are not subject to publication if: 
229.27 	(1) an administrative or court action contesting the penalty has been filed or served 
229.28 	and is unresolved at the time when notice would be given under subdivision 3; 
229.29 	(2) an appeal period to contest the penalty has not expired; or 
229.30 	(3) the commissioner has been notified that the tax preparer is deceased. 

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

229.32 	Sec. 4. Minnesota Statutes 2008, section 270C.446, subdivision 5, is amended to read:
230.1 		Subd. 5.Removal from list. The commissioner shall remove the name of a tax 
230.2 	preparer from the list of tax preparers published under this section:
230.3 	(1) when the commissioner determines that the name was included on the list in error;
230.4 	(2) within 90 days after the preparer has demonstrated to the commissioner that 
230.5 	the preparer fully paid all fines imposed, served any suspension, satisfied any sentence 
230.6 	imposed, and demonstrated to the satisfaction of the commissioner that the preparer has
230.7 	successfully completed any remedial actions required by the commissioner, the State 
230.8 	Board of Accountancy, or the Lawyers Board of Professional Responsibility; or
230.9 	(3) when the commissioner has been notified that the tax preparer is deceased.

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

230.11 	Sec. 5. Minnesota Statutes 2008, section 270C.56, subdivision 1, is amended to read:
230.12 		Subdivision 1. Liability imposed. A person who, either singly or jointly with 
230.13 	others, has the control of, supervision of, or responsibility for filing returns or reports, 
230.14 	paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a 
230.15 	person who is liable under any other law, is liable for the payment of taxes, penalties, and 
230.16 	interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658, 
230.17 	290.92, and 297E.02, and, for the taxes listed in this subdivision, the applicable penalties 
230.18 	for nonpayment under section 289A.60 and interest on those taxes. 

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

230.20 	Sec. 6. Minnesota Statutes 2008, section 289A.41, is amended to read:
230.21 	289A.41 BANKRUPTCY; SUSPENSION OF TIME.
230.22 	The running of the period during which a tax must be assessed or collection 
230.23 	proceedings commenced is suspended during the period from the date of a filing of a 
230.24 	petition in bankruptcy until 30 days after either notice to the commissioner of revenue that 
230.25 	the bankruptcy proceedings have been closed or dismissed, or notice that the automatic 
230.26 	stay has been terminated or has expired, whichever occurs first.
230.27 	The suspension of the statute of limitations under this section applies to the person 
230.28 	the petition in bankruptcy is filed against and other persons who may also be wholly or 
230.29 	partially liable for the tax.

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

231.1 	ARTICLE 15
231.2 	MISCELLANEOUS

231.3 	Section 1. Minnesota Statutes 2008, section 270C.445, is amended to read:
231.4 	270C.445 TAX PREPARATION SERVICES.
231.5 		Subdivision 1.Scope. This section applies to a person who provides tax preparation 
231.6 	services, except:
231.7 	(1) a person who provides tax preparation services for fewer than ten clients in a 
231.8 	calendar year;
231.9 	(2) a person who provides tax preparation services only to immediate family 
231.10 	members. For the purposes of this section, "immediate family members" means a spouse, 
231.11 	parent, grandparent, child, or sibling;
231.12 	(3) an employee who prepares a tax return for an employer's business;
231.13 	(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of 
231.14 	the fiduciary estate, testator, trustor, grantor, or beneficiaries of them; and
231.15 	(5) nonprofit organizations providing tax preparation services under the Internal 
231.16 	Revenue Service Volunteer Income Tax Assistance Program or Tax Counseling for the 
231.17 	Elderly Program.
231.18 		Subd. 2.Definitions. (a) For purposes of this section, the following terms have 
231.19 	the meanings given.
231.20 	(b) "Client" means an individual for whom a tax preparer performs or agrees to 
231.21 	perform tax preparation services.
231.22 	(c) "Person" means an individual, corporation, partnership, limited liability 
231.23 	company, association, trustee, or other legal entity.
231.24 	(d) "Refund anticipation loan" means a loan or any other extension of credit, whether 
231.25 	provided by the tax preparer or another entity such as a financial institution, in anticipation 
231.26 	of, and whose payment is secured by, a client's federal or state income tax refund or both.
231.27 	(e) "Tax preparation services" means services provided for a fee or other 
231.28 	consideration to a client to:
231.29 	(1) assist with preparing or filing state or federal individual income tax returns;
231.30 	(2) assume final responsibility for completed work on an individual income tax 
231.31 	return on which preliminary work has been done by another; or
231.32 	(3) offer or facilitate the provision of refund anticipation loans and refund 
231.33 	anticipation checks.
231.34 	(f) "Tax preparer" or "preparer" means a person providing tax preparation services 
231.35 	subject to this section.
232.1 	(g) "Advertise" means to solicit business through any means or medium.
232.2 	(h) "Facilitate" means to individually or in conjunction or cooperation with another 
232.3 	person: 
232.4 	(1) accept an application for a refund anticipation loan; 
232.5 	(2) pay to a client the proceeds, through direct deposit, a negotiable instrument, or 
232.6 	any other means, of a refund anticipation loan; or 
232.7 	(3) offer, arrange, process, provide, or in any other manner act to allow the making 
232.8 	of, a refund anticipation loan.
232.9 	(i) "Refund anticipation check" means a negotiable instrument provided to a client 
232.10 	by the tax preparer or another person, which is issued from the proceeds of a taxpayer's 
232.11 	federal or state income tax refund or both and represents the net of the refund minus the tax 
232.12 	preparation fee and any other fees. A refund anticipation check includes a refund transfer.
232.13 		Subd. 3.Standards of conduct. No tax preparer shall:
232.14 	(1) without good cause fail to promptly, diligently, and without unreasonable delay 
232.15 	complete a client's tax return;
232.16 	(2) obtain the signature of a client to a tax return or authorizing document that 
232.17 	contains blank spaces to be filled in after it has been signed;
232.18 	(3) fail to sign a client's tax return when payment for services rendered has been 
232.19 	made;
232.20 	(4) fail or refuse to give a client a copy of any document requiring the client's 
232.21 	signature within a reasonable time after the client signs the document;
232.22 	(5) fail to retain for at least four years a copy of individual income tax returns;
232.23 	(6) fail to maintain a confidential relationship between themselves and their with
232.24 	clients or former clients;
232.25 	(7) fail to take commercially reasonable measures to safeguard a client's nonpublic 
232.26 	personal information;
232.27 	(8) make, authorize, publish, disseminate, circulate, or cause to make, either directly 
232.28 	or indirectly, any false, deceptive, or misleading statement or representation relating to or 
232.29 	in connection with the offering or provision of tax preparation services;
232.30 	(9) require a client to enter into a loan arrangement in order to complete a tax return;
232.31 	(10) claim credits or deductions on a client's tax return for which the tax preparer 
232.32 	knows or reasonably should know the taxpayer client does not qualify;
232.33 	(11) charge, offer to accept, or accept a fee based upon a percentage of an anticipated 
232.34 	refund for tax preparation services;
232.35 	(12) under any circumstances, withhold or fail to return to a client a document 
232.36 	provided by the client for use in preparing the client's tax return.;
233.1 	(13) establish an account in the preparer's name to receive a client's refund through 
233.2 	a direct deposit or any other instrument unless the client's name is also on the account, 
233.3 	except that a taxpayer may assign the portion of a refund representing the Minnesota 
233.4 	education credit available under section 290.0674 to a bank account without the client's 
233.5 	name, as provided under section 290.0679;
233.6 	(14) fail to act in the best interests of the client;
233.7 	(15) fail to safeguard and account for any money handled for the client;
233.8 	(16) fail to disclose all material facts of which the preparer has knowledge which 
233.9 	might reasonably affect the client's rights and interests;
233.10 	(17) violate any provision of section 332.37;
233.11 	(18) include any of the following in any document provided or signed in connection 
233.12 	with the provision of tax preparation services:
233.13 	(i) a hold harmless clause;
233.14 	(ii) a confession of judgment or a power of attorney to confess judgment against the 
233.15 	client or appear as the client in any judicial proceeding;
233.16 	(iii) a waiver of the right to a jury trial, if applicable, in any action brought by or 
233.17 	against a debtor;
233.18 	(iv) an assignment of or an order for payment of wages or other compensation for 
233.19 	services;
233.20 	(v) a provision in which the client agrees not to assert any claim or defense otherwise 
233.21 	available;
233.22 	(vi) a waiver of any provision of this section or a release of any obligation required 
233.23 	to be performed on the part of the tax preparer; or
233.24 	(vii) a waiver of the right to injunctive, declaratory, or other equitable relief or 
233.25 	relief on a class basis; or
233.26 	(19) if making, providing, or facilitating a refund anticipation loan, fail to provide all 
233.27 	disclosures required by the federal Truth in Lending Act, United States Code, title 15, in a 
233.28 	form that may be retained by the client.
233.29 		Subd. 3a.Written agreements required; refund anticipation loans and checks.
 233.30 	(a) All agreements to make, provide, or facilitate a refund anticipation loan or refund 
233.31 	anticipation check must be in writing. No agreement may include a provision that 
233.32 	directly or indirectly arranges for payment of or deduction from any portion of the refund 
233.33 	anticipation loan or refund anticipation check for check cashing, credit insurance, attorney 
233.34 	fees, or the collection of any debt owed to any party for any other good or service other 
233.35 	than a debt owed to the facilitator for the repayment of a refund anticipation loan and 
233.36 	tax preparation fees.
234.1 	(b) If a written agreement contains a mandatory arbitration clause, the tax preparer 
234.2 	must provide a separate written notice to the client that:
234.3 	(1) arbitration is the exclusive means of dispute resolution for any dispute about the 
234.4 	written agreement;
234.5 	(2) the client has the right to affirmatively opt out of the arbitration clause within 30 
234.6 	days of entering into the agreement; and 
234.7 	(3) the client is not bound to arbitration if the claim or dispute involves a violation of 
234.8 	this section or the client invokes the remedies provided in subdivision 7.
234.9 	The tax preparer must advise the client, both orally and in writing, of the process by which 
234.10 	the client may exercise the right to opt out of the mandatory arbitration clause.
234.11 		Subd. 4.Required disclosures; refund anticipation loans and checks. (a) If
234.12 	Before or at the same time a tax preparer offers to make or facilitate a refund anticipation 
234.13 	loan to the client, the preparer must make the disclosures in this subdivision. The 
234.14 	disclosures must be made before or at the same time the preparer offers the refund 
234.15 	anticipation loan to the client.
234.16 	(b) The tax preparer must provide to a client a written notice on a single sheet of 
234.17 	paper, separate from any other document or writing, containing:
234.18 	(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters, 
234.19 	and in 28-point type stating "NOTICE";
234.20 	(2) the following verbatim statements:
234.21 	(i) "This is a loan. The annual percentage rate (APR), based on the estimated 
234.22 	payment period, is (fill in the estimated APR)."
234.23 	(ii) "Your refund will be used to repay the loan. As a result, the amount of your 
234.24 	refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other 
234.25 	charges."
234.26 	(iii) 
234.27 	"You can get your refund in about two weeks if you file your return electronically 
234.28 	and have the Internal Revenue Service send your refund to your own bank account." and
234.29 	(3) if the client is subject to additional interest when a refund is delayed, the 
234.30 	following verbatim statement must also be included in the notice: "If you choose to take 
234.31 	this loan and your refund is delayed, you may have to pay additional interest."
234.32 	(c) All required statements must be in capital and small font type fonts, in a 
234.33 	minimum of 14-point type, with at least a double space between each line in the statement 
234.34 	and four spaces between each statement.
235.1 	(d) The notice must be signed and dated by the tax preparer and the client subdivision 
235.2 	4a. Before or at the same time a tax preparer offers or facilitates a refund anticipation 
235.3 	check or refund transfer, the tax preparer must make the disclosures in subdivision 4b.
235.4 	(b) The disclosures must be provided to the client in a written notice on a single 
235.5 	sheet of paper, separate from any other document or writing.
235.6 	(c) The notice must be signed and dated by the tax preparer and the client.
235.7 	(d) All required disclosures, notices, and statements must be provided in the client's 
235.8 	primary language, if the tax preparer advertises in that language.
235.9 		Subd. 4a.Refund anticipation loan disclosures. The disclosure required under 
235.10 	subdivision 4 for a refund anticipation loan must contain:
235.11 	(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters, 
235.12 	and in 28-point type stating "NOTICE";
235.13 	(2) the following verbatim statements:
235.14 	(i) "This is a loan. This is not your refund. The annual percentage rate (APR), based 
235.15 	on the estimated payment period, is (fill in the estimated APR).";
235.16 	(ii) "Your refund will be used to repay the loan. As a result, the amount of your 
235.17 	refund will be reduced by (fill in appropriate dollar amount) for fees, interest, and other 
235.18 	charges.";
235.19 	(iii) "You have the right to cancel this transaction by returning the loan check or the 
235.20 	amount of the loan in cash within one business day after you get the loan."; and
235.21 	(iv) "You can get your refund in about two weeks if you file your return electronically 
235.22 	and have the Internal Revenue Service send your refund to your own bank account."; and
235.23 	(3) if the client is subject to additional interest when a refund is delayed, the 
235.24 	following verbatim statement must also be included in the notice: "If you choose to take 
235.25 	this loan and your refund check is delayed, you may have to pay."
235.26 		Subd. 4b.Refund anticipation check disclosures. (a) The disclosure required 
235.27 	under subdivision 4 for a refund anticipation check must contain:
235.28 	(1) a legend, centered at the top on the single sheet of paper, in bold, capital letters, 
235.29 	and in 28-point type stating "NOTICE"; and
235.30 	(2) the following verbatim statements:
235.31 	(i) "You do not have to purchase a refund anticipation check (RAC) to get your tax 
235.32 	refund.";
235.33 	(ii) "Generally, the IRS can direct deposit your income tax refund to your personal 
235.34 	bank account within eight to 15 days after the IRS accepts your tax return for processing.";
235.35 	(iii) "If you choose to purchase a RAC, your tax return funds will generally be made 
235.36 	available to you within eight to 15 days.";
236.1 	(iv) "A RAC is not a loan.";
236.2 	(v) "The cost of the RAC is (fill in dollar amount).";
236.3 	(vi) "You can either pay for your RAC now or you can have it withheld from your 
236.4 	refund."; and
236.5 	(vii) "The cost of your tax return is not any more or any less if you purchase a RAC."
236.6 	(b) A tax preparer offering a refund anticipation check that uses a different product 
236.7 	name, including but not limited to refund transfer, must substitute the product name for 
236.8 	"RAC" in all the statements required under this subdivision.
236.9 		Subd. 5.Itemized bill required. A tax preparer must provide an itemized statement 
236.10 	of the charges for services, at least separately stating the charges for:
236.11 	(1) return preparation; and
236.12 	(2) providing or facilitating a refund anticipation loan; and
236.13 	(3) each fee associated with the provision of a refund anticipation check.
236.14 		Subd. 5a.Nongame wildlife checkoff. A tax preparer must give written notice of 
236.15 	the option to contribute to the nongame wildlife management account in section 290.431
236.16 	to corporate clients that file an income tax return and to individual clients who file an 
236.17 	income tax return or property tax refund claim form. This notification must be included 
236.18 	with information sent to the client at the same time as the preliminary worksheets or other 
236.19 	documents used in preparing the client's return and must include a line for displaying 
236.20 	contributions.
236.21 		Subd. 5b.Right to rescind refund anticipation loan. (a) A client may rescind a 
236.22 	refund anticipation loan on or before the close of business on the next day of business 
236.23 	following execution of the loan agreement or receipt of the proceeds of the loan by:
236.24 	(1) providing written notification to the tax preparer of the rescission; and
236.25 	(2) returning the original check issued for the loan; or
236.26 	(3) tendering the amount of the loan in cash to the tax preparer.
236.27 	(b) The tax preparer may charge a fee for rescinding a refund anticipation loan 
236.28 	only if an account has been established at a financial institution to electronically receive 
236.29 	the refund and the financial institution has charged a fee to establish the account. The 
236.30 	allowable fee the tax preparer may charge the client rescinding the refund anticipation 
236.31 	loan may not exceed the fee charged to the tax preparer by the financial institution to 
236.32 	establish the account.
236.33 		Subd. 6.Enforcement; penalties. The commissioner may impose an administrative 
236.34 	penalty of not more than $1,000 per violation of subdivision 3, 3a, 4, or 5, or 5b, provided 
236.35 	that a penalty may not be imposed for any conduct that is also subject to the tax return 
236.36 	preparer penalties in section 289A.60, subdivision 13. The commissioner may terminate a 
237.1 	tax preparer's authority to transmit returns electronically to the state, if the commissioner 
237.2 	determines the tax preparer engaged in a pattern and practice of violating this section. 
237.3 	Imposition of a penalty under this subdivision is subject to the contested case procedure 
237.4 	under chapter 14. The commissioner shall collect the penalty in the same manner as the 
237.5 	income tax. Penalties imposed under this subdivision are public data.
237.6 		Subd. 6a.Exchange of data; State Board of Accountancy. The State Board of 
237.7 	Accountancy shall refer to the commissioner complaints it receives about tax preparers 
237.8 	who are not subject to the jurisdiction of the State Board of Accountancy and who are 
237.9 	alleged to have violated the provisions of subdivisions 3 to 5 and 5b.
237.10 		Subd. 6b.Exchange of data; Lawyers Board of Professional Responsibility. The 
237.11 	Lawyers Board of Professional Responsibility may refer to the commissioner complaints 
237.12 	it receives about tax preparers who are not subject to its jurisdiction and who are alleged 
237.13 	to have violated the provisions of subdivisions 3 to 5 and 5b.
237.14 		Subd. 6c.Exchange of data; commissioner. The commissioner shall refer 
237.15 	complaints about tax preparers who are alleged to have violated the provisions of 
237.16 	subdivisions 3 to 5 and 5b to:
237.17 	(1) the State Board of Accountancy, if the tax preparer is under its jurisdiction; and
237.18 	(2) the Lawyers Board of Professional Responsibility, if the tax preparer is under 
237.19 	its jurisdiction.
237.20 		Subd. 6d.Data private. Information exchanged on individuals under subdivisions 
237.21 	6a to 6c are private data under section 13.02, subdivision 12, until such time as a penalty 
237.22 	is imposed as provided in section 326A.08 or by the Lawyers Board of Professional 
237.23 	Responsibility.
237.24 		Subd. 7.Enforcement; civil actions. (a) Any violation of this section is an unfair, 
237.25 	deceptive, and unlawful trade practice within the meaning of section 8.31. An action taken 
237.26 	under section 8.31 is in the public interest.
237.27 	(b) A client may bring a civil action seeking redress for a violation of this section in 
237.28 	the conciliation or the district court of the county in which unlawful action is alleged to 
237.29 	have been committed or where the respondent resides or has a principal place of business.
237.30 	(c) A district court finding for the plaintiff must award:
237.31 	(1) actual damages, including;
237.32 	(2) incidental and consequential damages,;
237.33 	(3) statutory damages of twice the sum of: (i) the tax preparation fees; and (ii) if the 
237.34 	plaintiff violated subdivision 3a, 4, or 5b, all interest and fees for a refund anticipation loan;
237.35 	(4) reasonable attorney fees,;
237.36 	(5) court costs,; and
238.1 	(6) any other equitable relief as the court considers appropriate.
238.2 		Subd. 8.Limited exemptions; enforcement provisions.  The provisions of this 
238.3 	section, except for subdivision subdivisions 3a, 4, and 5b, do not apply to:
238.4 	(1) an attorney admitted to practice under section 481.01;
238.5 	(2) a certified public accountant or other person who is subject to the jurisdiction of 
238.6 	the State Board of Accountancy;
238.7 	(3) an enrolled agent who has passed the special enrollment examination 
238.8 	administered by the Internal Revenue Service; or
238.9 	(4) any fiduciary, or the regular employees of a fiduciary, while acting on behalf of 
238.10 	the fiduciary estate, the testator, trustor, grantor, or beneficiaries of them;
238.11 	(5) a tax preparer who provides tax preparation services for fewer than six clients 
238.12 	in a calendar year;
238.13 	(6) tax preparation services to a spouse, parent, grandparent, child, or sibling of 
238.14 	the tax preparer; and
238.15 	(7) the preparation by an employee of the tax return of the employee's employer
238.16 	(4) anyone who provides, or assists in providing, tax preparation services within 
238.17 	the scope of duties as an employee or supervisor of a person who is exempt under this 
238.18 	subdivision.

238.19 	Sec. 2. Minnesota Statutes 2008, section 270C.56, subdivision 3, is amended to read:
238.20 		Subd. 3.Procedure for assessment; claims for refunds. (a) The commissioner 
238.21 	may assess liability for the taxes described in subdivision 1 against a person liable 
238.22 	under this section. The assessment may be based upon information available to the 
238.23 	commissioner. It must be made within the prescribed period of limitations for assessing 
238.24 	the underlying tax, or within one year after the date of an order assessing underlying tax, 
238.25 	whichever period expires later. An order assessing personal liability under this section is 
238.26 	reviewable under section 270C.35 and is appealable to Tax Court.
238.27 	(b) If the time for appealing the order has expired and a payment is made by or 
238.28 	collected from the person assessed on the order in excess of the amount lawfully due from 
238.29 	that person of any portion of the liability shown on the order, a claim for refund may be 
238.30 	made by that person within 120 days after any payment of the liability if the payment is 
238.31 	within three and one-half years after the date the order was issued. Claims for refund 
238.32 	under this paragraph are limited to the amount paid during the 120-day period. Any 
238.33 	amounts collected under paragraph (c) after a claim for refund is filed in order to satisfy 
238.34 	the unpaid balance of the assessment that is the subject of the claim will be returned if 
238.35 	the claim is allowed. There is no claim for refund available under this paragraph if the 
239.1 	assessment has previously been the subject of an administrative or Tax Court appeal, or a 
239.2 	denied claim for refund. The taxpayer may contest denial of the refund as provided in the 
239.3 	procedures governing claims for refunds under section 289A.50, subdivision 7.
239.4 	(c) If a person has been assessed under this section for an amount for a given period 
239.5 	and the time for appeal has expired, regardless of whether an action contesting denial of a 
239.6 	claim for refund has been filed under paragraph (b), or there has been a final determination 
239.7 	that the person is liable, collection action is not stayed pursuant to section 270C.33, 
239.8 	subdivision 5, for that assessment or for subsequent assessments of additional amounts for 
239.9 	the same person for the same period and tax type.

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

239.12 	Sec. 3. Minnesota Statutes 2008, section 287.08, is amended to read:
239.13 	287.08 TAX, HOW PAYABLE; RECEIPTS. 
239.14 	(a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of 
239.15 	any county in this state in which the real property or some part is located at or before 
239.16 	the time of filing the mortgage for record. The treasurer shall endorse receipt on the 
239.17 	mortgage and the receipt is conclusive proof that the tax has been paid in the amount 
239.18 	stated and authorizes any county recorder or registrar of titles to record the mortgage. Its 
239.19 	form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the 
239.20 	mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from 
239.21 	registration tax." In either case the receipt must be signed by the treasurer. In case the 
239.22 	treasurer is unable to determine whether a claim of exemption should be allowed, the tax 
239.23 	must be paid as in the case of a taxable mortgage. For documents submitted electronically, 
239.24 	the endorsements and tax amount shall be affixed electronically and no signature by the 
239.25 	treasurer will be required. The actual payment method must be arranged in advance 
239.26 	between the submitter and the receiving county.
239.27 	(b) The county treasurer may refund in whole or in part any mortgage registry tax 
239.28 	overpayment if a written application by the taxpayer is submitted to the county treasurer 
239.29 	within 3-1/2 years from the date of the overpayment. If the county has not issued a denial 
239.30 	of the application, the taxpayer may bring an action in Tax Court in the county in which 
239.31 	the tax was paid at any time after the expiration of six months from the time that the 
239.32 	application was submitted. A denial of refund may be appealed within 60 days from 
239.33 	the date of the denial by bringing an action in Tax Court in the county in which the tax 
239.34 	was paid. The action is commenced by the serving of a petition for relief on the county 
240.1 	treasurer, and by filing a copy with the court. The county attorney shall defend the action. 
240.2 	The county treasurer shall notify the treasurer of each county that has or would receive a 
240.3 	portion of the tax as paid.
240.4 	(c) If the county treasurer determines a refund should be paid, or if a refund is 
240.5 	ordered by the court, the county treasurer of each county that actually received a portion 
240.6 	of the tax shall immediately pay a proportionate share of three percent of the refund 
240.7 	using any available county funds. The county treasurer of each county that received, or 
240.8 	would have received, a portion of the tax shall also pay their county's proportionate share 
240.9 	of the remaining 97 percent of the court-ordered refund on or before the 20th day of the 
240.10 	following month using solely the mortgage registry tax funds that would be paid to the 
240.11 	commissioner of revenue on that date under section 287.12. If the funds on hand under 
240.12 	this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the 
240.13 	county treasurer of the county in which the action was brought shall file a claim with the 
240.14 	commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of 
240.15 	the refund, and shall pay over the remaining portion upon receipt of a warrant from the 
240.16 	state issued pursuant to the claim.
240.17 	(d) When any mortgage covers real property located in more than one county in this 
240.18 	state the total tax must be paid to the treasurer of the county where the mortgage is first 
240.19 	presented for recording, and the payment must be receipted as provided in paragraph (a). 
240.20 	If the principal debt or obligation secured by such a multiple county mortgage exceeds 
240.21 	$1,000,000 $10,000,000, the nonstate portion of the tax must be divided and paid over by 
240.22 	the county treasurer receiving it, on or before the 20th day of each month after receipt, 
240.23 	to the county or counties entitled in the ratio that the market value of the real property 
240.24 	covered by the mortgage in each county bears to the market value of all the real property 
240.25 	in this state described in the mortgage. In making the division and payment the county 
240.26 	treasurer shall send a statement giving the description of the real property described in 
240.27 	the mortgage and the market value of the part located in each county. For this purpose, 
240.28 	the treasurer of any county may require the treasurer of any other county to certify to the 
240.29 	former the market valuation of any tract of real property in any mortgage.
240.30 	(e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The 
240.31 	mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the 
240.32 	mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor, 
240.33 	the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the 
240.34 	amount of the tax collected for that purpose and the mortgagor is relieved of any further 
240.35 	obligation to pay the tax as to the amount collected by the mortgagee for this purpose.

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

241.1 	Sec. 4. Minnesota Statutes 2008, section 291.005, subdivision 1, is amended to read:
241.2 		Subdivision 1. Scope. Unless the context otherwise clearly requires, the following 
241.3 	terms used in this chapter shall have the following meanings: 
241.4 	(1) "Federal gross estate" means the gross estate of a decedent as valued and 
241.5 	otherwise determined for federal estate tax purposes by federal taxing authorities pursuant 
241.6 	to the provisions of the Internal Revenue Code. 
241.7 	(2) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
241.8 	excluding therefrom any property included therein which has its situs outside Minnesota, 
241.9 	and (b) including therein any property omitted from the federal gross estate which is 
241.10 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
241.11 	authorities. 
241.12 	(3) "Personal representative" means the executor, administrator or other person 
241.13 	appointed by the court to administer and dispose of the property of the decedent. If there 
241.14 	is no executor, administrator or other person appointed, qualified, and acting within this 
241.15 	state, then any person in actual or constructive possession of any property having a situs in 
241.16 	this state which is included in the federal gross estate of the decedent shall be deemed 
241.17 	to be a personal representative to the extent of the property and the Minnesota estate tax 
241.18 	due with respect to the property. 
241.19 	(4) "Resident decedent" means an individual whose domicile at the time of death 
241.20 	was in Minnesota. 
241.21 	(5) "Nonresident decedent" means an individual whose domicile at the time of 
241.22 	death was not in Minnesota. 
241.23 	(6) "Situs of property" means, with respect to real property, the state or country in 
241.24 	which it is located; with respect to tangible personal property, the state or country in which 
241.25 	it was normally kept or located at the time of the decedent's death; and with respect to 
241.26 	intangible personal property, the state or country in which the decedent was domiciled 
241.27 	at death. For a nonresident decedent with an ownership interest in a pass-through entity 
241.28 	with assets that include real or tangible personal property, situs of the real or tangible 
241.29 	personal property is determined as if the pass-through entity does not exist and the real 
241.30 	or tangible personal property is personally owned by the decedent. If the pass-through 
241.31 	entity is owned by a person or persons in addition to the decedent, ownership of the 
241.32 	property is attributed to the decedent in proportion to the decedent's capital ownership 
241.33 	share of the pass-through entity.
241.34 	(7) "Commissioner" means the commissioner of revenue or any person to whom the 
241.35 	commissioner has delegated functions under this chapter. 
242.1 	(8) "Internal Revenue Code" means the United States Internal Revenue Code of 
242.2 	1986, as amended through February 13, 2008. 
242.3 	(9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
242.4 	defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of 
242.5 	deduction for state death taxes allowed under section 2058 of the Internal Revenue Code. 
242.6 	(10) "Pass-through entity" includes the following:
242.7 	(i) an entity electing S corporation status under section 1362 of the Internal Revenue 
242.8 	Code;
242.9 	(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
242.10 	(iii) a single member limited liability company or similar entity, regardless of 
242.11 	whether it is taxed as an association or is disregarded for federal income tax purposes 
242.12 	under Code of Federal Regulations, title 26, section 301.7701-3; or
242.13 	(iv) a trust.

242.14 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
242.15 	December 31, 2008.

242.16 	Sec. 5. Minnesota Statutes 2008, section 295.52, subdivision 1, is amended to read:
242.17 		Subdivision 1.Hospital tax. A tax is imposed on each hospital equal to two ...
242.18 	percent of its gross revenues.

242.19 	EFFECTIVE DATE. This section is effective for gross revenues received after 
242.20 	December 31, 2008, except the rate imposed for revenues received during calendar year 
242.21 	2009 is ....

242.22 	Sec. 6. Minnesota Statutes 2008, section 295.52, subdivision 1a, is amended to read:
242.23 		Subd. 1a.Surgical center tax. A tax is imposed on each surgical center equal to 
242.24 	two ... percent of its gross revenues.

242.25 	EFFECTIVE DATE. This section is effective for gross revenues received after 
242.26 	December 31, 2008, except the rate imposed for revenues received during calendar year 
242.27 	2009 is ....

242.28 	Sec. 7. Minnesota Statutes 2008, section 297E.06, subdivision 4, is amended to read:
242.29 		Subd. 4.Annual audit, certified inventory, and cash count. (a) An organization 
242.30 	licensed under chapter 349 with gross receipts from lawful gambling of more than 
242.31 	$300,000 $500,000 in any year must have an annual financial audit of its lawful gambling 
242.32 	activities and funds for that year. An organization licensed under chapter 349 with gross 
243.1 	receipts from lawful gambling of more than $150,000 but not more than $300,000 in any 
243.2 	year must have an annual financial review of its lawful gambling activities and funds for 
243.3 	that year.
243.4 	(b) The commissioner may require a financial audit of the lawful gambling activities 
243.5 	and funds of an organization licensed under chapter 349, with gross receipts less than 
243.6 	$500,000 annually, when an organization has:
243.7 	(1) failed to timely file required gambling tax returns;
243.8 	(2) failed to timely pay the gambling tax or regulatory fee;
243.9 	(3) filed fraudulent gambling tax returns;
243.10 	(4) failed to take corrective actions required by the commissioner; or
243.11 	(5) failed to otherwise comply with chapter 297E.
243.12 	 (c) Audits and financial reviews under this subdivision must be performed by an 
243.13 	independent accountant licensed by the state of Minnesota.
243.14 	(d) An organization licensed under chapter 349 must perform an annual certified 
243.15 	inventory and cash count at the end of its fiscal year and submit the report to the 
243.16 	commissioner within 30 days after the end of its fiscal year. The report shall be on a form 
243.17 	prescribed by the commissioner.
243.18 	(b)(e) The commissioner of revenue shall prescribe standards for the audits and 
243.19 	financial review, certified inventory, and cash count reports required under this subdivision. 
243.20 	The standards may vary based on the gross receipts of the organization. The standards 
243.21 	must incorporate and be consistent with standards prescribed by the American Institute 
243.22 	of Certified Public Accountants. A complete, true, and correct copy of the audit audits, 
243.23 	certified inventory, and cash count report must be filed as prescribed by the commissioner.

243.24 	Sec. 8. Minnesota Statutes 2008, section 297H.06, subdivision 1, is amended to read:
243.25 		Subdivision 1.Certain surcharges or fees. The amount of a surcharge, fee, or 
243.26 	charge established pursuant to section 115A.919, 115A.921, 115A.923, 400.08, 473.811, 
243.27 	or473.843, or a service charge by a home rule charter city that owns and operates a solid 
243.28 	waste-to-energy resource recovery facility, is exempt from the solid waste management 
243.29 	tax. The exemption does not apply to the tax imposed on market price under section 
243.30 	297H.02, subdivision 1, paragraphs (b) and (c), or section 297H.03, subdivision 1, 
243.31 	paragraphs (b) and (c).

243.32 	EFFECTIVE DATE. This section is effective for taxes imposed after March 31, 
243.33 	2007.

243.34 	Sec. 9. Minnesota Statutes 2008, section 309.53, subdivision 3, is amended to read:
244.1 		Subd. 3.Financial statement requirements. The financial statement shall include 
244.2 	a balance sheet, statement of income and expense, and statement of functional expenses, 
244.3 	shall be consistent with forms furnished by the attorney general, and shall be prepared in 
244.4 	accordance with generally accepted accounting principles so as to make a full disclosure 
244.5 	of the following, including necessary allocations between each item and the basis of 
244.6 	such allocations:
244.7 	(a) total receipts and total income from all sources;
244.8 	(b) cost of management and general;
244.9 	(c) program services;
244.10 	(d) cost of fund-raising;
244.11 	(e) cost of public education;
244.12 	(f) funds or properties transferred out of state, with explanation as to recipient and 
244.13 	purpose;
244.14 	(g) total net amount disbursed or dedicated within this state, broken down into total 
244.15 	amounts disbursed or dedicated for each major purpose, charitable or otherwise;
244.16 	(h) names of professional fund-raisers used during the accounting year and the 
244.17 	financial compensation and profit resulting to each professional fund-raiser; and
244.18 	(i) a list of the five highest paid directors, officers, and employees of the organization 
244.19 	and its related organizations, as that term is defined by section 317A.011, subdivision 18, 
244.20 	that receive total compensation of more than $50,000, together with the total compensation 
244.21 	paid to each. Total compensation shall include salaries, fees, bonuses, fringe benefits, 
244.22 	severance payments, and deferred compensation paid by the charitable organization and 
244.23 	all related organizations as that term is defined by section 317A.011, subdivision 18. 
244.24 	Unless otherwise required by this subdivision, the financial statement need not be 
244.25 	certified.
244.26 	A financial statement of a charitable organization which has received total revenue 
244.27 	in excess of $350,000 $750,000 for the 12 months of operation covered by the statement 
244.28 	shall be accompanied by an audited financial statement prepared in accordance with 
244.29 	generally accepted accounting principles that has been examined by an independent 
244.30 	certified public accountant for the purpose of expressing an opinion. In preparing the audit 
244.31 	the certified public accountant shall take into consideration capital, endowment or other 
244.32 	reserve funds, if any, controlled by the charitable organization. For purposes of calculating 
244.33 	the $350,000 $750,000 total revenue threshold provided by this subdivision, the value 
244.34 	of donated food to a nonprofit food shelf may not be included if the food is donated for 
244.35 	subsequent distribution at no charge, and not for resale.

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

245.1 	Sec. 10. Minnesota Statutes 2008, section 349.1641, is amended to read:
245.2 	349.1641 LICENSES; SUMMARY SUSPENSION. 
245.3 	The board may (1) summarily suspend the license of an organization that is more 
245.4 	than three months 45 days late in filing a tax return or in paying a tax required under 
245.5 	chapter 297E and may keep the suspension in effect until all required returns are filed and 
245.6 	required taxes are paid; (2) summarily suspend for not more than 90 days any license 
245.7 	issued by the board or director for what the board determines are actions detrimental to the 
245.8 	integrity of lawful gambling in Minnesota; and (3) summarily suspend the license of a 
245.9 	gambling manager who has failed to receive the training required under section 349.167, 
245.10 	subdivision 4, clause (2), and may keep the suspension in effect until the gambling 
245.11 	manager passes an examination prepared and administered by the board. The examination 
245.12 	does not qualify as continuing education credit for the next calendar year. The board must 
245.13 	notify the licensee at least 14 days before suspending the license under this section. If a 
245.14 	license is summarily suspended under this section, a contested case hearing on the merits 
245.15 	must be held within 20 days of the issuance of the order of suspension, unless the parties 
245.16 	agree to a later hearing date. The administrative law judge's report must be issued within 
245.17 	20 days after the close of the hearing record. In all cases involving summary suspension, 
245.18 	the board must issue its final decision within 30 days after receipt of the report of the 
245.19 	administrative law judge and subsequent exceptions and argument under section 14.61. 
245.20 	When an organization's license is suspended under this section, the board shall within 
245.21 	three days notify all municipalities in which the organization's gambling premises are 
245.22 	located and all licensed distributors in the state. 

245.23 	Sec. 11. Minnesota Statutes 2008, section 349.19, subdivision 9, is amended to read:
245.24 		Subd. 9.Annual financial audit; filing requirement. An organization licensed 
245.25 	under this chapter must have an annual financial audit or financial review when required 
245.26 	by section 297E.06, subdivision 4.  

245.27 	Sec. 12. Minnesota Statutes 2008, section 423A.02, subdivision 1b, is amended to read:
245.28 		Subd. 1b.Additional amortization state aid. (a) Annually, on October 1, the 
245.29 	commissioner of revenue shall allocate the additional amortization state aid transferred 
245.30 	under section 69.021, subdivision 11, to: 
245.31 	(1) all police or salaried firefighters relief associations governed by and in full 
245.32 	compliance with the requirements of section 69.77, that had an unfunded actuarial accrued 
245.33 	liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 
245.34 	preceding December 31; 
246.1 	(2) all local police or salaried firefighter consolidation accounts governed by chapter 
246.2 	353A that are certified by the executive director of the public employees retirement 
246.3 	association as having for the current fiscal year an additional municipal contribution 
246.4 	amount under section 353A.09, subdivision 5, paragraph (b), and that have implemented 
246.5 	section 353A.083, subdivision 1, if the effective date of the consolidation preceded May 
246.6 	24, 1993, and that have implemented section 353A.083, subdivision 2, if the effective date 
246.7 	of the consolidation preceded June 1, 1995; and 
246.8 	(3) the municipalities that are required to make an additional municipal contribution 
246.9 	under section 353.665, subdivision 8, for the duration of the required additional 
246.10 	contribution. 
246.11 	(b) The commissioner shall allocate the state aid on the basis of the proportional share 
246.12 	of the relief association or consolidation account of the total unfunded actuarial accrued 
246.13 	liability of all recipient relief associations and consolidation accounts as of December 31, 
246.14 	1993, for relief associations, and as of June 30, 1994, for consolidation accounts.
246.15 	(c) Beginning October 1, 2000, and annually thereafter, the commissioner shall 
246.16 	allocate the state aid, including any state aid in excess of the limitation in subdivision 
246.17 	4, on the following basis:
246.18 	(1) 64.5 percent to the municipalities to which section 353.665, subdivision 
246.19 	8, paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution in 
246.20 	accordance with paragraph (b) and subject to the limitation in subdivision 4; 
246.21 	(2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued 
246.22 	liability in the actuarial valuation prepared under sections 356.215 and 356.216 as of the 
246.23 	preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis 
246.24 	Fire Department Relief Association; and 
246.25 	(3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability 
246.26 	in the actuarial valuation prepared under sections 356.215 and 356.216 as of the preceding 
246.27 	December 31 for the Virginia Fire Department Relief Association. 
246.28 	If there is no unfunded actuarial accrued liability in both the Minneapolis Police 
246.29 	Relief Association and the Minneapolis Fire Department Relief Association as disclosed 
246.30 	in the most recent actuarial valuations for the relief associations prepared under sections 
246.31 	356.215 and 356.216, the commissioner shall allocate that 34.2 percent of the aid as 
246.32 	follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul 
246.33 	Teachers Retirement Fund Association, and 30 percent as additional funding to support 
246.34 	minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded 
246.35 	actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed 
246.36 	in the most recent actuarial valuation for the relief association prepared under sections 
247.1 	356.215 and 356.216, the commissioner shall allocate that 1.3 percent of the aid as 
247.2 	follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul 
247.3 	Teachers Retirement Fund Association, and 30 percent as additional funding to support 
247.4 	minimum fire state aid for volunteer firefighters relief associations. Upon the final 
247.5 	payment to municipalities required by section 353.665, subdivision 8, paragraph (b), 
247.6 	or 353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that 64.5 
247.7 	percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund 
247.8 	Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued 
247.9 	liability in the actuarial valuation proposed under sections 356.215 and 356.216 as of the 
247.10 	preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis 
247.11 	Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs 
247.12 	associated with the police and firefighters pensions, and 40 percent as additional funding to 
247.13 	support minimum fire state aid for volunteer firefighters relief associations. The allocation 
247.14 	must be made by the commissioner at the same time and under the same procedures 
247.15 	as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund 
247.16 	Association, annually, beginning on July 1, 2005, if the applicable teacher's association 
247.17 	five-year average time-weighted rate of investment return does not equal or exceed the 
247.18 	performance of a composite portfolio assumed passively managed (indexed) invested ten 
247.19 	percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent 
247.20 	in domestic stock calculated using the formula under section 11A.04, clause (11), the aid 
247.21 	allocation to that retirement fund under this section ceases until the five-year annual rate 
247.22 	of investment return equals or exceeds the performance of that composite portfolio. 
247.23 	(d) The amounts required under this subdivision are the amounts annually 
247.24 	appropriated to the commissioner of revenue under section 69.021, subdivision 11, 
247.25 	paragraph (e).

247.26 	EFFECTIVE DATE. This section is effective retroactively for aid payable in 
247.27 	2003 and thereafter.

247.28 	Sec. 13. Minnesota Statutes 2008, section 423A.02, subdivision 3, is amended to read:
247.29 		Subd. 3.Reallocation of amortization or supplementary amortization state 
247.30 	aid. (a) Seventy percent of the difference between $5,720,000 and the current year 
247.31 	amortization aid or and supplemental amortization aid distributed under subdivisions 1 
247.32 	and 1a that is not distributed for any reason to a municipality for use by a local police 
247.33 	or salaried fire relief association must be distributed by the commissioner of revenue 
247.34 	according to this paragraph. The commissioner shall distribute 70 percent of the amounts 
247.35 	derived under this paragraph to the Teachers Retirement Association and 30 percent to the 
248.1 	St. Paul Teachers Retirement Fund Association to fund the unfunded actuarial accrued 
248.2 	liabilities of the respective funds. These payments shall be made on or before June 30 
248.3 	each fiscal year. The amount required under this paragraph is appropriated annually from 
248.4 	the general fund to the commissioner of revenue. If the St. Paul Teachers Retirement Fund 
248.5 	Association becomes fully funded, its eligibility for this aid ceases. Amounts remaining 
248.6 	in the undistributed balance account at the end of the biennium if aid eligibility ceases 
248.7 	cancel to the general fund.
248.8 	(b) In order to receive amortization and supplementary amortization aid under 
248.9 	paragraph (a), Independent School District No. 625, St. Paul, must make contributions 
248.10 	to the St. Paul Teachers Retirement Fund Association in accordance with the following 
248.11 	schedule:

248.12		Fiscal Year
		Amount
		
248.13		1996
	$
	0
		
248.14		1997
	$
	0
		
248.15		1998
	$
	200,000
		
248.16		1999
	$
	400,000
		
248.17		2000
	$
	600,000
		
248.18		2001 and thereafter
	$
	800,000
		
248.19 	(c) Special School District No. 1, Minneapolis, and the city of Minneapolis must 
248.20 	each make contributions to the Teachers Retirement Association in accordance with the 
248.21 	following schedule:

248.22
248.23		Fiscal Year
	City amount
		School district 
amount
		
248.24		1996
	$
	0
		$
	0
		
248.25		1997
	$
	0
		$
	0
		
248.26		1998
	$
	250,000
		$
	250,000
		
248.27		1999
	$
	400,000
		$
	400,000
		
248.28		2000
	$
	550,000
		$
	550,000
		
248.29		2001
	$
	700,000
		$
	700,000
		
248.30		2002
	$
	850,000
		$
	850,000
		
248.31		2003 and thereafter
	$
	1,000,000
		$
	1,000,000
		
248.32 	(d) Money contributed under paragraph (a) and either paragraph (b) or (c), as 
248.33 	applicable, must be credited to a separate account in the applicable teachers retirement 
248.34 	fund and may not be used in determining any benefit increases. The separate account 
248.35 	terminates for a fund when the aid payments to the fund under paragraph (a) cease.
248.36 	(e) Thirty percent of the difference between $5,720,000 and the current year 
248.37 	amortization aid or and supplemental amortization aid under subdivisions 1 and 1a that 
248.38 	is not distributed for any reason to a municipality for use by a local police or salaried 
249.1 	firefighter relief association must be distributed under section 69.021, subdivision 7, 
249.2 	paragraph (d), as additional funding to support a minimum fire state aid amount for 
249.3 	volunteer firefighter relief associations. The amount required under this paragraph is 
249.4 	appropriated annually to the commissioner of revenue.

249.5 	EFFECTIVE DATE. This section is effective retroactively for aid payable in 
249.6 	2003 and thereafter.

249.7 	Sec. 14. Minnesota Statutes 2008, section 423A.02, is amended by adding a 
249.8 	subdivision to read:
249.9 		Subd. 3a.Appropriations for amortization state aid; supplementary 
249.10 	amortization state aid; and amortization state aid and supplementary state aid 
249.11 	reallocations. $4,720,000 is annually appropriated from the general fund to the 
249.12 	commissioner of revenue for amortization state aid under subdivision 1 and for the 
249.13 	reallocation of amortization aid under subdivision 3. $1,000,000 is annually appropriated 
249.14 	from the general fund to the commissioner of revenue for supplementary amortization 
249.15 	state aid under subdivision 1a, and for the reallocation of supplementary amortization state 
249.16 	aid under subdivision 3.

249.17 	EFFECTIVE DATE. This section is effective retroactively for aid payable in 
249.18 	2003 and thereafter.

249.19 	Sec. 15. APPROPRIATION.
 249.20 	$164,081,000 is appropriated from the general fund to the commissioner of 
249.21 	management and budget to be used for the purposes of 2009 S.F. No. 2078, if enacted.