1.1 	A bill for an act
1.2 	relating to economic development; encouraging job creation; allowing tax 
1.3 	credits for investments in small businesses and historic structure rehabilitation; 
1.4 	disallowing the deduction of certain dividends; expanding the permitted use of 
1.5 	tax increment financing for certain projects; repealing restrictions on city of 
1.6 	Bloomington's development of the Mall of America site; distributing certain 
1.7 	proceeds of taconite taxes; authorizing sale of municipal bonds for energy 
1.8 	efficiency improvements to residential and business property; appropriating 
1.9 	money;amending Minnesota Statutes 2008, sections 290.21, subdivision 4; 
1.10 	429.101, subdivision 1; 469.174, by adding a subdivision; 469.175, by adding a 
1.11 	subdivision; 469.176, subdivisions 1b, 4c, by adding subdivisions; Minnesota 
1.12 	Statutes 2009 Supplement, section 298.294; Laws 1986, chapter 391, section 
1.13 	1; Laws 1995, chapter 264, article 5, sections 44, subdivision 4, as amended; 
1.14 	45, subdivision 1, as amended; Laws 2008, chapter 366, article 5, sections 28, 
1.15 	subdivision 1; 29, subdivisions 1, 2, 4; Laws 2009, chapter 78, article 7, section 
1.16 	2; proposing coding for new law in Minnesota Statutes, chapters 116J; 216C; 
1.17 	290; 297I; repealing Laws 1996, chapter 464, article 1, section 8, subdivision 5.
1.18 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.19 	ARTICLE 1
1.20 	SMALL BUSINESS INVESTMENT CREDIT

1.21 	Section 1. [116J.8737] SMALL BUSINESS INVESTMENT TAX CREDIT.
1.22 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms 
1.23 	have the meanings given.
1.24 	(b) "Qualified small business" means a business that satisfies all of the following 
1.25 	conditions:
1.26 	(1) the business has its headquarters in Minnesota;
1.27 	(2) at least 51 percent of the business's employees are employed in Minnesota, and 
1.28 	51 percent of the business's total payroll is paid or incurred in the state;
2.1 	(3) the business is engaged in, or is committed to engage in, innovation in Minnesota 
2.2 	in one of the following:
2.3 	(i) using proprietary technology to add value to a product, process, or service in a 
2.4 	qualified high-technology field;
2.5 	(ii) researching or developing a proprietary product, process, or service in a qualified 
2.6 	high-technology field;
2.7 	(iii) researching, developing, or producing a new proprietary technology for use in 
2.8 	the fields of tourism, forestry, mining, or transportation; or
2.9 	(iv) qualified green manufacturing;
2.10 	(4) other than the activities specifically listed in clause (3), the business is not 
2.11 	engaged in real estate development, insurance, banking, lending, lobbying, political 
2.12 	consulting, information technology consulting, wholesale or retail trade, leisure, 
2.13 	hospitality, transportation, construction, ethanol production from corn, or professional 
2.14 	services provided by attorneys, accountants, business consultants, physicians, or health 
2.15 	care consultants;
2.16 	(5) the business has fewer than 25 employees; 
2.17 	(6) if the business has five or more employees as measured on a full-time equivalent 
2.18 	basis, the business must pay its employees in excess of the first five annual wages at least 
2.19 	175 percent of the federal poverty guideline for the year for a family of four;
2.20 	(7) the business has not been in operation for more than ten consecutive years;
2.21 	(8) the business has not received more than $4,000,000 in qualifying investments 
2.22 	that have qualified for and received tax credits under this section;
2.23 	(9) the business is not a member of a unitary group that employs more than 100 
2.24 	employees; and
2.25 	(10) the business has not previously received private equity investments of more 
2.26 	than $2,000,000.
2.27 	(c) "Qualified high-technology field" includes, but is not limited to, aerospace, 
2.28 	agricultural processing, alternative energy, environmental engineering, food technology, 
2.29 	cellulosic ethanol, information technology, materials science technology, nanotechnology, 
2.30 	telecommunications, biotechnology, medical device products, pharmaceuticals, 
2.31 	diagnostics, biologicals, and veterinary science.
2.32 	(d) "Proprietary technology" means the technical innovations that are unique and 
2.33 	legally owned or licensed by a business and includes, without limitation, those innovations 
2.34 	that are patented, patent pending, a subject of trade secrets, or copyrighted.
3.1 	(e) "Qualified green manufacturing" means a business whose primary business 
3.2 	activity is production of products, processes, methods,  technologies, or services, excluding 
3.3 	consulting, intended to do one or more of the following:
3.4 	(1) increase the use of energy from renewable sources, as defined in section 
3.5 	216B.1691;
3.6 	(2) increase the energy efficiency of the electric utility-producing infrastructure 
3.7 	system or to increase energy conservation related to electricity or other utility use, as 
3.8 	provided in sections 216B.2401 and 216B.241;
3.9 	(3) reduce greenhouse gas emissions, as defined in section 216H.01, subdivision 2, 
3.10 	or to mitigate greenhouse gas emissions or other waste products through, but not limited 
3.11 	to, carbon capture, storage, or sequestration;
3.12 	(4) monitor, protect, restore, and preserve the quality of surface waters; 
3.13 	(5) expand the use of biofuels, including expanding the feasibility or reducing the 
3.14 	cost of producing biofuels or the types of equipment, machinery, and vehicles that can use 
3.15 	biofuels; and
3.16 	(6) increase the use of green chemistry, as defined in section 116.9401.
3.17 	(f) "Qualified taxpayer" means an accredited investor, within the meaning of 
3.18 	Regulation D of the Securities and Exchange Commission, Code of Federal Regulations, 
3.19 	title 17, section 230.501(a), who:
3.20 	(1) does not own, control, or hold power to vote 20 percent or more of the outstanding 
3.21 	securities of the qualified small business in which the eligible investment is proposed; or
3.22 	(2) does not receive more than 50 percent of the taxpayer's gross annual income from 
3.23 	the qualified small business in which the eligible investment is proposed.
3.24 	A member of the family of a taxpayer disqualified by this subdivision is not eligible 
3.25 	for a credit under this section.
3.26 	(g)(1) "Qualified angel investment network fund" means a pooled investment fund 
3.27 	that:
3.28 	(i) invests in qualified small businesses;
3.29 	(ii) is organized as a pass-through entity; and
3.30 	(iii) has at least three separate investors, all of whom are qualified taxpayers 
3.31 	as defined in paragraph (f), and that own no more than 50 percent of the outstanding 
3.32 	ownership interests in the fund; and
3.33 	(2) for purposes of determining the number of investors and the ownership interest 
3.34 	of an investor under this paragraph, the ownership interests of an investor include those of 
3.35 	the investor's family, and any corporation, limited liability company, partnership, or trust 
3.36 	in which the investor or the investor's family has a controlling equity interest or exercises 
4.1 	management control. Investments in the fund may consist of equity investments or notes 
4.2 	that pay interest or other fixed amounts, or any combination of both.
4.3 	(h) "Qualified investment" means either a cash investment of a minimum of:
4.4 	(1) $10,000 in a calendar year by a qualified taxpayer; or
4.5 	(2) $50,000 in a calendar year by a qualified angel investment network fund. 
4.6 	The qualified investment in a qualified small business must be in exchange 
4.7 	for common stock, a partnership or membership interest, preferred stock, debt with 
4.8 	mandatory conversion to equity, or an equivalent ownership interest as determined by 
4.9 	the commissioner.
4.10 	(i) "Family" means a family member within the meaning of section 267(c)(4) of the 
4.11 	Internal Revenue Code.
4.12 		Subd. 2.Certification of small businesses. (a) Businesses may apply to the 
4.13 	commissioner for certification as a qualified small business. The application must be in the 
4.14 	form and be made under the procedures specified by the commissioner, accompanied by 
4.15 	an application fee of $150. The application for certification must be made available on the 
4.16 	department's Web site by August 1, 2010. Applications for subsequent years' certification 
4.17 	must be made available on the department's Web site by November 1 of the preceding year. 
4.18 	Application fees must be deposited in the state treasury and credited to the general fund.
4.19 	(b) A business seeking certification must submit an application for each taxable 
4.20 	year for which the business desires certification. If a qualified small business receives 
4.21 	a qualified investment for which tax credits are allocated, the business must annually 
4.22 	submit a certified small business report in the form required by the commissioner with 
4.23 	the required fee no later than February 1 for the two years subsequent to the last qualified 
4.24 	investment. Failure to file an annual report as required under this subdivision results in a 
4.25 	fine of $500 and revocation of certification.
4.26 	(c) The commissioner must maintain a list of businesses certified under this 
4.27 	subdivision and make the list accessible to the public on the department's Web site.
4.28 		Subd. 3.Certification of qualified taxpayers. (a) Taxpayers may apply to the 
4.29 	commissioner for certification as a qualified taxpayer. The application must be in the 
4.30 	form and be made under the procedures specified by the commissioner, accompanied 
4.31 	by an application fee of $350. The application for certification of qualified taxpayers 
4.32 	must be made available on the department's Web site by August 1, 2010. Applications 
4.33 	for subsequent years' certification must be made available on the department's Web site 
4.34 	by November 1 of the preceding year. Application fees must be deposited in the state 
4.35 	treasury and credited to the general fund.
5.1 	(b) A qualified taxpayer seeking certification must submit an application for each 
5.2 	taxable year in which the qualified taxpayer seeks certification. If a qualified taxpayer 
5.3 	receives tax credits under this section, a qualified taxpayer must submit an angel investor 
5.4 	annual report in the form required by the commissioner with the required fee no later than 
5.5 	February 1 of each year for two years subsequent to the last allocation of tax credits. 
5.6 	Failure to file an angel investor annual report as required under this subdivision results 
5.7 	in the revocation of tax credits. Once a qualified taxpayer has filed the required annual 
5.8 	reports and accompanying fees for two subsequent years following allocation of tax 
5.9 	credits and complied with all other requirements for that allocation, the tax credits are 
5.10 	no longer subject to revocation.
5.11 		Subd. 4.Certification of qualified angel investment network funds. (a) 
5.12 	Angel investment network funds may apply to the commissioner of employment and 
5.13 	economic development for certification as a qualified angel investment network fund. 
5.14 	The application must be in the form and be made under the procedures specified by 
5.15 	the commissioner, accompanied by an application fee of $1,000. The application for 
5.16 	certification of qualified angel investor network funds must be made available on the 
5.17 	department's Web site by August 1, 2010. Applications for subsequent years' certification 
5.18 	must be made available by November 1 of the preceding year. Application fees must be 
5.19 	deposited in the state treasury and credited to the general fund. 
5.20 	(b) A qualified angel investment network fund seeking certification must submit an 
5.21 	application for each taxable year for which the angel investment network fund seeks 
5.22 	certification. If any member of a qualified angel investment network fund receives tax 
5.23 	credits under this section for qualified investments made by the fund, the qualified angel 
5.24 	investment network fund must annually submit an angel investor annual report in the 
5.25 	form required by the commissioner with the required fee no later than February 1 of 
5.26 	each year for two years subsequent to the last allocation of credits. Failure to file an 
5.27 	angel investor annual report as required under this subdivision results in revocation of 
5.28 	tax credits. Once a qualified angel investment network fund has filed the required annual 
5.29 	reports and accompanying fees for two subsequent years following allocation of tax 
5.30 	credits and complied with all other requirements for that allocation, the tax credits are 
5.31 	no longer subject to revocation. 
5.32 		Subd. 5.Credit allowed. (a) A qualified taxpayer or angel investor network fund is 
5.33 	allowed a credit for investment in a qualified small business in the amount determined 
5.34 	by the certification allocated by the commissioner against the tax imposed by chapter 
5.35 	290. The commissioner must not allocate more than $10,000,000 in credits to qualified 
5.36 	taxpayers or angel investment network funds per taxable year for taxable years beginning 
6.1 	after December 31, 2009, and before January 1, 2012, and must not allocate more than 
6.2 	$12,000,000 in credits per taxable year for taxable years beginning after December 31, 
6.3 	2011. Any portion of a taxable year's credits that is not allocated by the commissioner 
6.4 	does not cancel and may be carried forward to the subsequent taxable year until all credits 
6.5 	have been allocated. Applications for tax investment credits must be made available on 
6.6 	the department's Web site by September 1, 2010, and the department must begin accepting 
6.7 	applications by September 1, 2010. Applications for subsequent years must be made 
6.8 	available by November 1 of the preceding year.
6.9 	(b) Tax investment credits must be allocated to qualified taxpayers or angel investor 
6.10 	network funds in the order that the tax credit request applications are filed with the 
6.11 	department. The investment specified in the application must be made within 60 days of 
6.12 	the allocation of the credits. If the investment is not made within 60 days, the credits are 
6.13 	deemed revoked. A qualified taxpayer or angel investor network fund that fails to invest 
6.14 	as specified in the application, within 60 days from allocation of the credits, must notify 
6.15 	the department of the failure to invest within five business days of the expiration of the 
6.16 	60-day investment period.
6.17 	(c) All tax credit request applications filed with the department on the same day must 
6.18 	be treated as having been filed contemporaneously. In the event that two or more qualified 
6.19 	taxpayers or angel investment network funds file tax credit request applications on the 
6.20 	same day, and the aggregate amount of credit allocation claims exceeds the aggregate limit 
6.21 	of credit under this section or the lesser amount of credits that remain unallocated on that 
6.22 	day, then the credits must be allocated among the qualified taxpayers or angel investment 
6.23 	network funds who filed on that day on a pro rata basis with respect to the amounts claimed. 
6.24 	The pro rata allocation for any one qualified taxpayer or angel investment network fund is 
6.25 	the product obtained by multiplying a fraction, the numerator of which is the amount of 
6.26 	the credit allocation claim filed on behalf of a qualified taxpayer and the denominator of 
6.27 	which is the total of all credit allocation claims filed on behalf of all applicants on that day, 
6.28 	by the amount of credits that remain unallocated on that day for the fiscal year.
6.29 	(d) The commissioner must notify the commissioner of revenue of every credit 
6.30 	allocated and every credit revoked under this section.
6.31 		Subd. 6.Annual reports. (a) By February 1 of each year for two years subsequent 
6.32 	to the last allocation of credits, qualified small businesses, qualified taxpayers, and 
6.33 	qualified angel investment network funds must submit to the commissioner an annual 
6.34 	report and a filing fee of $100. All report fees must be deposited in the state treasury 
6.35 	and credited to the general fund.
7.1 	(b) Qualified small businesses must certify to the department in the form required by 
7.2 	the commissioner that it satisfies the following requirements:
7.3 	(1) the business has its headquarters in Minnesota;
7.4 	(2) at least 51 percent of the business's employees are employed in Minnesota, and 
7.5 	51 percent of the business's total payroll is paid or incurred in the state;
7.6 	(3) the business is engaged in, or is committed to engage in, innovation in Minnesota 
7.7 	as defined under subdivision 1; and
7.8 	(4) the business meets the payroll requirements in subdivision 1, paragraph (b), 
7.9 	clause (6).
7.10 	(c) Qualified taxpayers must certify to the department in the form required by the 
7.11 	commissioner that the investor satisfies the following requirements:
7.12 	(1) the taxpayer continues to meet the requirements of subdivision 1, paragraph 
7.13 	(f); and
7.14 	(2) the taxpayer continues to remain invested in the qualified small business as 
7.15 	required by section 290.0692, subdivision 3.
7.16 	(d) Qualified angel investment network funds must certify to the department in the 
7.17 	form required by the commissioner that the investor satisfies the following requirements:
7.18 	(1) the taxpayer continues to meet the requirements of subdivision 1, paragraph 
7.19 	(g); and
7.20 	(2) the angel investment network fund continues to remain invested in the qualified 
7.21 	small business as required by section 290.0692, subdivision 3.
7.22 		Subd. 7.Rulemaking exception. The commissioner's actions in establishing 
7.23 	procedures and requirements and in making determinations and certifications to administer 
7.24 	this section are not a rule for purposes of chapter 14, are not subject to the Administrative 
7.25 	Procedure Act contained in chapter 14, and are not subject to section 14.386.
7.26 		Subd. 8.Report. Beginning in 2011, the commissioner must annually report by 
7.27 	March 15 to the chairs and ranking minority members of the legislative committees and 
7.28 	divisions having jurisdiction over taxes and economic development in the senate and 
7.29 	the house of representatives on the tax credits issued under this section. The report 
7.30 	must include:
7.31 	(1) the number and amount of the credits issued;
7.32 	(2) the recipients of the credits;
7.33 	(3) the number and type of each business certified as a qualified small business;
7.34 	(4) to the extent determinable, the total amount of investment generated by these 
7.35 	credits; and
7.36 	(5) any other information relevant to evaluating the effect of these credits.

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

8.2 	Sec. 2. [290.0692] SMALL BUSINESS INVESTMENT CREDIT; CREDIT 
8.3 	ALLOWED; LIMITATIONS; HOLDING PERIOD; AND CARRYOVER.
8.4 		Subdivision 1.Credit allowed. A qualified taxpayer is allowed a credit against the 
8.5 	tax imposed under this chapter for investments made in the year in a qualified small 
8.6 	business as defined under section 116J.8737. The credit equals 25 percent of the qualified 
8.7 	taxpayer's investment in the business, but not to exceed the lesser of:
8.8 	(1) the liability for tax under this chapter, including the applicable alternative 
8.9 	minimum tax, but excluding the minimum fee under section 290.0922; and
8.10 	(2) the amount of the certificate provided to the qualified taxpayer under section 
8.11 	116J.8737.
8.12 		Subd. 2.Limitations. No taxpayer may receive more than $125,000 in credits 
8.13 	under this section in any one year.
8.14 		Subd. 3.Holding periods. The credit is allowed only for investments for which a 
8.15 	credit has been allocated by the commissioner of employment and economic development 
8.16 	under section 116J.8737. Any credit taken by a taxpayer must be repaid, and any unused 
8.17 	credits must be canceled, if the investment in the qualified small business is not held for at 
8.18 	least three years. The three-year holding period does not apply if:
8.19 	(1) the investment by the qualified taxpayer becomes worthless before the end 
8.20 	of the three-year period; 
8.21 	(2) 80 percent or more of the assets of the qualified small business is sold before 
8.22 	the end of the three-year period;
8.23 	(3) the qualified small business is sold before the end of the three-year period; or
8.24 	(4) the qualified small business's common stock begins trading on a public exchange 
8.25 	before the end of the three-year period.
8.26 		Subd. 4.Proportional credits. Each pass-through entity must provide each 
8.27 	investor a statement indicating the investor's share of the credit amount certified to the 
8.28 	pass-through entity based on its share of the pass-through entity's assets at the time of 
8.29 	the qualified investment.
8.30 		Subd. 5.Carryover. If the amount of the credit under this subdivision for any 
8.31 	taxable year exceeds the liability for tax, the excess is a credit carryover to each of the ten 
8.32 	succeeding taxable years. The entire amount of the excess unused credit for the taxable 
8.33 	year must be carried first to the earliest of the taxable years to which the credit may be 
8.34 	carried. The amount of the unused credit that may be added under this subdivision may 
8.35 	not exceed the taxpayer's liability for tax less the credit for the taxable year.
9.1 		Subd. 6.Transfer of credits. Any taxpayer who has not had liability under this 
9.2 	chapter for the immediate past three taxable years and does not have anticipated liability 
9.3 	for the current taxable year may transfer the entirety of the credit to any natural person of 
9.4 	net worth, as defined in the Code of Federal Regulations, title 17, section 230.501(a). No 
9.5 	person is entitled to a refund for the interest created under this subdivision. Only the full 
9.6 	credit for any one taxpayer may be transferred and the interest may be transferred only one 
9.7 	time. A credit acquired by transfer is subject to the limitations prescribed in this section. 
9.8 	Documentation of any credit acquired by transfer must be provided by the taxpayer in 
9.9 	the form required by the commissioner.
9.10 		Subd. 7.Audit powers. Notwithstanding the certification eligibility issued by the 
9.11 	commissioner of employment and economic development under section 116J.8737, the 
9.12 	commissioner may utilize any audit and examination powers under chapter 270C or 289A 
9.13 	to the extent necessary to verify that the taxpayer is eligible for the credit and to assess for 
9.14 	the amount of any improperly claimed credit.

9.15 	EFFECTIVE DATE. This section is effective for investments made after July 
9.16 	1, 2010, for taxable years beginning after December 31, 2009, and only applies to 
9.17 	investments for which a credit has been allocated by the commissioner of employment and 
9.18 	economic development.

9.19 	Sec. 3. APPROPRIATION.
 9.20 	$100,000 is appropriated from the general fund to the commissioner of employment 
9.21 	and economic development to pay the costs of administering this article, to be available 
9.22 	for the fiscal year ending June 30, 2011.

9.23 	ARTICLE 2
9.24 	MINNESOTA BUSINESS INVESTMENT CREDIT

9.25 	Section 1. [116J.665] MINNESOTA BUSINESS INVESTMENT COMPANY 
9.26 	CREDIT.
9.27 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
9.28 	have the meanings given.
9.29 	(b) "Affiliate" means:
9.30 	(1) any person who, directly or indirectly, beneficially owns, controls, or holds 
9.31 	power to vote 15 percent or more of the outstanding voting securities or other voting 
9.32 	ownership interest of a Minnesota business investment company or insurance company; or
10.1 	(2) any person, 15 percent or more of whose outstanding voting securities or other 
10.2 	voting ownership interests are directly or indirectly beneficially owned, controlled, or held 
10.3 	with power to vote by a Minnesota business investment company or insurance company.
10.4 	Notwithstanding this subdivision, an investment by a participating investor in a 
10.5 	Minnesota business investment company pursuant to an allocation of premium tax credits 
10.6 	under this section does not cause that Minnesota business investment company to become 
10.7 	an affiliate of that participating investor.
10.8 	(c) "Allocation date" means the date on which credits under section 297I.23 are 
10.9 	allocated to the participating investors of a Minnesota business investment company 
10.10 	under this section.
10.11 	(d) "Designated capital" means an amount of money that:
10.12 	(1) is invested by a participating investor in a Minnesota business investment 
10.13 	company; and
10.14 	(2) fully funds the purchase price of either or both participating investor's equity 
10.15 	interest in a Minnesota business investment company or a qualified debt instrument issued 
10.16 	by a Minnesota business investment company.
10.17 	(e) "Minnesota business investment company" means a partnership, corporation, 
10.18 	trust, or limited liability company, organized on a for-profit basis, that:
10.19 	(1) has its principal office located or is headquartered in Minnesota;
10.20 	(2) has as its primary business activity the investment of cash in qualified businesses; 
10.21 	and
10.22 	(3) is certified by the Department of Employment and Economic Development as 
10.23 	meeting the criteria in this section.
10.24 	(f) "Participating investor" means any insurance company as defined in section 
10.25 	60A.02, subdivision 4, excluding health maintenance organizations, that contributes 
10.26 	designated capital pursuant to this section.
10.27 	(g) "Person" means any natural person or entity, including, but not limited to, a 
10.28 	corporation, general or limited partnership, trust, or limited liability company.
10.29 	(h)(1) "Qualified business" means a business that is independently owned and 
10.30 	operated and meets all of the following requirements:
10.31 	(i) it is headquartered in Minnesota, its principal business operations are located in 
10.32 	this state, and at least 80 percent of its employees are located in Minnesota;
10.33 	(ii) it has no more than 100 employees;
10.34 	(iii) it is not engaged in:
10.35 	(A) professional services provided by accountants, doctors, or lawyers;
10.36 	(B) banking or lending;
11.1 	(C) real estate development;
11.2 	(D) insurance;
11.3 	(E) oil and gas exploration;
11.4 	(F) direct gambling activities;
11.5 	(G) retail sales; or
11.6 	(H) making loans to or investments in a Minnesota business investment company 
11.7 	or an affiliate; and
11.8 	(iv) it is not a franchise of and has no financial relationship with a Minnesota business 
11.9 	investment company or any affiliate of a Minnesota business investment company prior to 
11.10 	a Minnesota business investment company's first qualified investment in the business;
11.11 	(2) a business classified as a qualified business at the time of the first qualified 
11.12 	investment in the business remains classified as a qualified business and may receive 
11.13 	continuing qualified investments from any Minnesota business investment company. 
11.14 	Continuing investments constitute qualified investments even though the business may not 
11.15 	meet the definition of a qualified business at the time of the continuing investments.
11.16 	(i) "Qualified debt instrument" means a debt instrument issued by a Minnesota 
11.17 	business investment company which meets all of the following criteria:
11.18 	(1) it is issued at par value or a premium; and
11.19 	(2) it has an original maturity date of at least four years from the date of issuance, 
11.20 	and a repayment schedule which is not faster than a level principal amortization over 
11.21 	four years.
11.22 	(j) "Qualified distribution" means any distribution or payment made by a Minnesota 
11.23 	business investment company in connection with any of the following:
11.24 	(1) costs and expenses of forming, syndicating, and organizing the Minnesota 
11.25 	business investment company, including fees paid for professional services, and the costs 
11.26 	of financing and insuring the obligations of a Minnesota business investment company, 
11.27 	provided no payment is made to a participating investor;
11.28 	(2) an annual management fee not to exceed one percent of designated capital on 
11.29 	an annual basis to offset the costs and expenses of managing and operating a Minnesota 
11.30 	business investment company;
11.31 	(3) reasonable and necessary fees in accordance with industry custom for ongoing 
11.32 	professional services, including, but not limited to, legal and accounting services related 
11.33 	to the operation of a Minnesota business investment company, not including lobbying or 
11.34 	governmental relations;
11.35 	(4) any increase or projected increase in federal or state taxes, including penalties 
11.36 	and related interest of the equity owners of a Minnesota business investment company 
12.1 	resulting from the earnings or other tax liability of a Minnesota business investment 
12.2 	company to the extent that the increase is related to the ownership, management, or 
12.3 	operation of a Minnesota business investment company;
12.4 	(5) payments of principal and interest to holders of qualified debt instruments issued 
12.5 	by a Minnesota business investment company may be made without restriction whatsoever.
12.6 	(k) "Qualified investment" means the investment of money by a Minnesota 
12.7 	business investment company in a qualified business for the purchase of any debt, 
12.8 	debt participation, equity, or hybrid security of any nature and description whatsoever, 
12.9 	including a debt instrument or security that has the characteristics of debt but that provides 
12.10 	for conversion into equity or equity participation instruments such as options or warrants. 
12.11 	Any repayment of a qualified investment prior to one year from the date of issuance shall 
12.12 	result in the amount of the qualified investment being reduced by 50 percent for purposes 
12.13 	of the cumulative investment requirement in subdivision 8, paragraph (d).
12.14 	(l) "State premium tax liability" means any liability incurred by an insurance 
12.15 	company under chapter 297I or in the case of a repeal or a rate reduction by the state of 
12.16 	the liability imposed by chapter 297I, any other tax liability imposed upon an insurance 
12.17 	company by the state, other than the tax imposed on taxpayers under section 290.05.
12.18 		Subd. 2.Certification. (a) The department must provide a standardized format for 
12.19 	applying for the business investment credit under section 297I.23, and for certification as a 
12.20 	Minnesota business investment company.
12.21 	(b) An applicant for certification as a Minnesota business investment company 
12.22 	is required to:
12.23 	(1) file an application with the department that includes, without limitation, a 
12.24 	statement that the applicant has read and understands the requirements of this chapter;
12.25 	(2) pay a nonrefundable application fee of $7,500 at the time of filing the application;
12.26 	(3) submit as part of its application an audited balance sheet that contains an 
12.27 	unqualified opinion of an independent certified public accountant issued not more than 35 
12.28 	days before the application date that states that the applicant has an equity capitalization 
12.29 	of $500,000 or more in the form of unencumbered cash, marketable securities, or other 
12.30 	liquid assets; and
12.31 	(4) have at least two principals or persons, at least one of which is primarily located 
12.32 	in Minnesota, employed or engaged to manage the funds who each have a minimum of 
12.33 	five years of money management experience in the venture capital or business industry.
12.34 	(c) The department may certify partnerships, corporations, trusts, or limited liability 
12.35 	companies, organized on a for-profit basis, which submit an application to be designated as 
12.36 	a Minnesota business investment company if the applicant is located, headquartered, and 
13.1 	licensed or registered to conduct business in Minnesota, has as its primary business activity 
13.2 	the investment of cash in qualified businesses, and meets the other criteria in this section. 
13.3 	(d) The department must review the organizational documents of each applicant 
13.4 	for certification and the business history of each applicant and determine whether the 
13.5 	applicant has satisfied the requirements of this section.
13.6 	(e) Within 45 days after the receipt of an application, the department must issue the 
13.7 	certification or refuse the certification and communicate in detail to the applicant the 
13.8 	grounds for refusal, including suggestions for the removal of such grounds.
13.9 	(f) The department must begin accepting applications to become a Minnesota 
13.10 	business investment company as defined under section 297I.23 by August 1, 2010.
13.11 	(g) Application fees collected by the commissioner under this subdivision must be 
13.12 	deposited in the state treasury and credited to the general fund.
13.13 		Subd. 3.Requirements. (a) A participating investor or affiliate of a participating 
13.14 	investor must not, directly or indirectly:
13.15 	(1) beneficially own, whether through rights, options, convertible interest, or 
13.16 	otherwise, 15 percent or more of the voting securities or other voting ownership interest of 
13.17 	a Minnesota business investment company;
13.18 	(2) manage a Minnesota business investment company; or
13.19 	(3) control the direction of investments for a Minnesota business investment 
13.20 	company.
13.21 	(b) A Minnesota business investment company may obtain one or more guaranties, 
13.22 	indemnities, bonds, insurance policies, or other payment undertakings for the benefit 
13.23 	of its participating investors from any entity, except that in no case can more than one 
13.24 	participating investor of a Minnesota business investment company on an aggregate 
13.25 	basis with all affiliates of the participating investor be entitled to provide the guaranties, 
13.26 	indemnities, bonds, insurance policies, or other payment undertakings in favor of the 
13.27 	participating investors of a Minnesota business investment company and its affiliates in 
13.28 	this state.
13.29 	(c) This subdivision does not preclude a participating investor, insurance company, 
13.30 	or other party from exercising its legal rights and remedies, including, without limitation, 
13.31 	interim management of a Minnesota business investment company, in the event that a 
13.32 	Minnesota business investment company is in default of its statutory obligations or its 
13.33 	contractual obligations to the participating investor, insurance company, or other party, or 
13.34 	from monitoring a Minnesota business investment company to ensure its compliance with 
13.35 	this section or disallowing any investments that have not been approved by the department.
14.1 	(d) The department may contract with an independent third party to review, 
14.2 	investigate, and certify that the applications comply with this section.
14.3 		Subd. 4.Aggregate limitations on investment tax credits; allocation. (a) 
14.4 	The aggregate amount of investment tax credits to be allocated to all participating 
14.5 	investors of Minnesota business investment companies under this section shall not exceed 
14.6 	$60,000,000. No Minnesota business investment company, on an aggregate basis with its 
14.7 	affiliates, may file credit allocation claims that exceed $60,000,000.
14.8 	(b) Credits must be allocated to participating investors in the order that the credit 
14.9 	allocation claims are filed with the department, provided that all credit allocation 
14.10 	claims filed with the department on the same day must be treated as having been filed 
14.11 	contemporaneously. Any credit allocation claims filed with the department prior to the 
14.12 	initial credit allocation claim filing date are deemed to have been filed on the initial credit 
14.13 	allocation claim filing date. The department must set the initial credit allocation claim 
14.14 	filing date not less than 120 days and not greater than 150 days after the department 
14.15 	begins accepting applications for certification.
14.16 	(c) In the event that two or more Minnesota business investment companies file 
14.17 	credit allocation claims with the department on behalf of their respective participating 
14.18 	investors on the same day, and the aggregate amount of credit allocation claims exceeds 
14.19 	the aggregate limit of investment tax credits under this section or the lesser amount of 
14.20 	credits that remain unallocated on that day, then the department must allocate the credits 
14.21 	among the participating investors who filed on that day on a pro rata basis with respect 
14.22 	to the amounts claimed. The pro rata allocation for any one participating investor is the 
14.23 	product obtained by multiplying a fraction, the numerator of which is the amount of the 
14.24 	credit allocation claim filed on behalf of a participating investor and the denominator of 
14.25 	which is the total of all credit allocation claims filed on behalf of all participating investors 
14.26 	on that day, by the aggregate limit of credits under this section or the lesser amount of 
14.27 	credits that remain unallocated on that day.
14.28 	(d) Within ten business days after the department receives a credit allocation claim 
14.29 	filed by a Minnesota business investment company on behalf of one or more of its 
14.30 	participating investors, the department must notify the Minnesota business investment 
14.31 	company of the amount of credits allocated to each of the participating investors of that 
14.32 	Minnesota business investment company. In the event a Minnesota business investment 
14.33 	company does not receive an investment of designated capital from each participating 
14.34 	investor required to earn the amount of credits allocated to the participating investor 
14.35 	within ten business days of the Minnesota business investment company's receipt of notice 
14.36 	of allocation, then it shall notify the department on or before the next business day, and 
15.1 	the credits allocated to the participating investor of the Minnesota business investment 
15.2 	company are forfeited. The department must then reallocate those forfeited credits among 
15.3 	the participating investors of the other Minnesota business investment companies on a pro 
15.4 	rata basis with respect to the credit allocation claims filed on behalf of the participating 
15.5 	investors. The commissioner is authorized, but not required, to levy a fine of not more than 
15.6 	$50,000 on any participating investor that does not invest the full amount of designated 
15.7 	capital required to fund the credits allocated to it by the department in accordance with 
15.8 	the credit allocation claim filed on its behalf. Fine receipts must be deposited in the state 
15.9 	treasury and credited to the general fund.
15.10 	(e) No participating investor, on an aggregate basis with its affiliates, may file an 
15.11 	allocation claim for more than 25 percent of the maximum amount of investment tax 
15.12 	credits authorized under this subdivision, regardless of whether the claim is made in 
15.13 	connection with one or more Minnesota business investment companies.
15.14 		Subd. 5.Requirements for continuance of certification. (a) To maintain its 
15.15 	certification, a Minnesota business investment company must make qualified investments 
15.16 	as follows:
15.17 	(1) within two years after the allocation date, a Minnesota business investment 
15.18 	company must invest an amount equal to at least 35 percent of its designated capital in 
15.19 	qualified investments; and
15.20 	(2) within three years after the allocation date, a Minnesota business investment 
15.21 	company must invest an amount equal to at least 50 percent of its designated capital 
15.22 	in qualified investments.
15.23 	(b) Prior to making a proposed qualified investment in a specific business, a 
15.24 	Minnesota business investment company must request from the department a written 
15.25 	determination that the proposed investment qualifies as a qualified investment in a 
15.26 	qualified business. The department must notify a Minnesota business investment company 
15.27 	within ten business days from the receipt of a request of its determination and an 
15.28 	explanation thereof. If the department fails to notify the Minnesota business investment 
15.29 	company of its determination within the ten-business-day period, the proposed investment 
15.30 	is deemed a qualified investment in a qualified business. If the department determines that 
15.31 	the proposed investment does not meet the definition of a qualified investment or qualified 
15.32 	business, or both, the department may nevertheless consider the proposed investment a 
15.33 	qualified investment and, if necessary, the business a qualified business, if the department 
15.34 	determines that the proposed investment furthers state economic development.
15.35 	(c) All designated capital not invested in qualified investments by a Minnesota 
15.36 	business investment company shall be held or invested in such manner as the Minnesota 
16.1 	business investment company, in its discretion, deems appropriate. Designated capital 
16.2 	and proceeds of designated capital returned to a Minnesota business investment company 
16.3 	after being originally invested in qualified investments may be invested again in qualified 
16.4 	investments and the investment shall count toward the requirements of paragraph (a) with 
16.5 	respect to making investments of designated capital in qualified investments.
16.6 	(d) If, within four years after its allocation date, a Minnesota business investment 
16.7 	company has not invested at least 60 percent of its designated capital in qualified 
16.8 	investments, the Minnesota business investment company must not be permitted to pay 
16.9 	management fees.
16.10 	(e) If, within six years after its allocation date, a Minnesota business investment 
16.11 	company has not invested at least 100 percent of its designated capital in qualified 
16.12 	investments, the Minnesota business investment company must not be permitted to pay 
16.13 	management fees.
16.14 	(f) A Minnesota business investment company may not invest more than 15 percent 
16.15 	of its designated capital in any one qualified business without the specific approval 
16.16 	of the department.
16.17 	(g) For purposes of calculating the investment percentage thresholds of paragraph 
16.18 	(a), the cumulative amount of all qualified investments made by a Minnesota business 
16.19 	investment company from the allocation date must be considered.
16.20 		Subd. 6.Minnesota business investment company reporting requirements. (a) 
16.21 	Each Minnesota business investment company must report the following to the department 
16.22 	in the form designated by the commissioner:
16.23 	(1) as soon as practicable after the receipt of designated capital:
16.24 	(i) the name of each participating investor from which the designated capital was 
16.25 	received, including such participating investor's insurance tax identification number;
16.26 	(ii) the amount of each participating investor's investment of designated capital; and
16.27 	(iii) the date on which the designated capital was received;
16.28 	(2) on an annual basis, on or before January 31 of each year:
16.29 	(i) the amount of the Minnesota business investment company's designated capital 
16.30 	that remains to be invested in qualified investments at the end of the immediately 
16.31 	preceding taxable year;
16.32 	(ii) whether or not the Minnesota business investment company has invested more 
16.33 	than 15 percent of its total designated capital in any one business;
16.34 	(iii) all qualified investments that the Minnesota business investment company has 
16.35 	made in the previous taxable year, including the number of employees of each qualified 
17.1 	business in which it has made investments at the time of such investment, and as of 
17.2 	December 1 of the preceding taxable year; and
17.3 	(iv) for any qualified business where the Minnesota business investment company 
17.4 	no longer has an investment, the Minnesota business investment company must provide 
17.5 	employment figures for that company as of the last day before the investment was 
17.6 	terminated;
17.7 	(3) other information that the department may reasonably request that helps the 
17.8 	department ascertain the impact of the Minnesota business investment company program 
17.9 	both directly and indirectly on the economy of the state including, but not limited to, the 
17.10 	number of jobs created by qualified businesses that have received qualified investments;
17.11 	(4) within 90 days of the close of its fiscal year, annual audited financial statements 
17.12 	of the Minnesota business investment company, which must include the opinion of an 
17.13 	independent certified public accountant; and
17.14 	(5) an agreed upon procedures report or equivalent regarding the operations of the 
17.15 	Minnesota business investment company.
17.16 	(b) A Minnesota business investment company must pay to the department an annual, 
17.17 	nonrefundable certification fee of $5,000 on or before April 1, or $10,000 if later. The 
17.18 	certification fee must be deposited in the state treasury and credited to the general fund. 
17.19 	No annual certification fee is required if the payment date for the fee is within six months 
17.20 	of the date a Minnesota business investment company is first certified by the department.
17.21 	(c) Upon satisfying the requirements of subdivision 5, paragraph (a), clause (2), 
17.22 	a Minnesota business investment company must provide the notice to the department 
17.23 	and the department shall, within 60 days of receipt of the notice, either confirm that the 
17.24 	Minnesota business investment company has satisfied the requirements of subdivision 
17.25 	5, paragraph (a), clause (2), as of such date or provide notice of noncompliance and an 
17.26 	explanation of any existing deficiencies. If the department does not provide notification 
17.27 	within 60 days, the Minnesota business investment company is deemed to have met the 
17.28 	requirements of subdivision 5, paragraph (a), clause (2).
17.29 		Subd. 7.Distributions. (a) A Minnesota business investment company may 
17.30 	make qualified distributions at any time. In order for a Minnesota business investment 
17.31 	company to make a distribution other than a qualified distribution to its equity holders, 
17.32 	the cumulative amount of all qualified investments of the Minnesota business investment 
17.33 	company must equal or exceed 100 percent of its designated capital.
17.34 	(b) The state shall receive ten percent of the net profits on qualified investments. 
17.35 	For purposes of this paragraph, "net profits on qualified investments" means the amount 
17.36 	of money returned to the Minnesota business investment company in exchange for or 
18.1 	repayment of its qualified investments in qualified businesses in excess of the amount 
18.2 	invested by the Minnesota business investment company in qualified investments. The 
18.3 	net profits on qualified investments are the aggregate of all of the Minnesota business 
18.4 	investment company's qualified investments where gains on qualified investments are 
18.5 	netted against losses on qualified investments.
18.6 		Subd. 8.Decertification. (a) The department shall conduct an annual review of 
18.7 	each Minnesota business investment company to determine if a Minnesota business 
18.8 	investment company is abiding by the requirements of certification and to ensure that no 
18.9 	investment has been made in violation of this section. The cost of the annual review must 
18.10 	be paid by each Minnesota business investment company according to a reasonable fee 
18.11 	schedule adopted by the department. Fee receipts must be deposited in the state treasury 
18.12 	and credited to the general fund.
18.13 	(b) Any material violation of this section, including any material misrepresentation 
18.14 	made to the department in connection with the application process, is grounds for 
18.15 	decertification of a Minnesota business investment company and the disallowance of 
18.16 	credits under section 297I.23, provided that in all instances the department shall provide 
18.17 	notice to the Minnesota business investment company of the grounds of the proposed 
18.18 	decertification and the opportunity to cure the violation before any decertification becomes 
18.19 	effective.
18.20 	(c) The department shall send written notice of decertification to the commissioner 
18.21 	of revenue and to the address of each participating investor whose tax credit may be 
18.22 	subject to recapture or forfeiture, using the address shown on the last filing submitted 
18.23 	to the department.
18.24 	(d) Once a Minnesota business investment company has invested an amount 
18.25 	cumulatively equal to 100 percent of its designated capital in qualified investments, 
18.26 	provided that the Minnesota business investment company has met all other requirements 
18.27 	under this section as of such date, the Minnesota business investment company is no 
18.28 	longer subject to regulation by the department or the reporting requirements under 
18.29 	subdivision 6. Upon receiving certification by a Minnesota business investment company 
18.30 	that it has invested an amount equal to 100 percent of its designated capital, the department 
18.31 	shall notify a Minnesota business investment company within 60 days that it has or has not 
18.32 	met the requirements, with a reason for the determination if it has not. If the department 
18.33 	does not provide notification of deregulation within 60 days, the Minnesota business 
18.34 	investment company is deemed to have met the requirements and is deemed to no longer 
18.35 	be subject to regulation by the department.
19.1 		Subd. 9.Registration requirements. All investments by participating investors 
19.2 	for which tax credits are awarded under this section must be registered or specifically 
19.3 	exempt from registration.
19.4 		Subd. 10.Rulemaking. The commissioner's actions in establishing procedures and 
19.5 	requirements and in making determinations and certifications to administer this section are 
19.6 	not a rule for purposes of chapter 14, are not subject to the Administrative Procedure Act 
19.7 	contained in chapter 14, and are not subject to section 14.386.
19.8 		Subd. 11.Reports to governor and legislature. The department shall make an 
19.9 	annual report by March 15 of each year to the governor and the chairs and ranking 
19.10 	minority members of the legislative committees and divisions having jurisdiction over 
19.11 	taxes and economic development. The report must include:
19.12 	(1) the number of Minnesota business investment companies holding designated 
19.13 	capital;
19.14 	(2) the amount of designated capital invested in each Minnesota business investment 
19.15 	company;
19.16 	(3) the cumulative amount that each Minnesota business investment company has 
19.17 	invested as of January 1, 2011, and the cumulative total each year thereafter;
19.18 	(4) the cumulative amount of follow-on capital that the investments of each 
19.19 	Minnesota business investment company have created in terms of capital invested in 
19.20 	qualified businesses at the same time or subsequent to investments made by a Minnesota 
19.21 	business investment company in such businesses by sources other than Minnesota 
19.22 	business investment companies;
19.23 	(5) the total amount of investment tax credits applied under this section for each year;
19.24 	(6) the performance of each Minnesota business investment company with regard to 
19.25 	the requirements for continued certification;
19.26 	(7) the classification of the companies in which each Minnesota business investment 
19.27 	company has invested according to industrial sector and size of company;
19.28 	(8) the gross number of jobs created by investments made by each Minnesota 
19.29 	business investment company and the number of jobs retained;
19.30 	(9) the location of the companies in which each Minnesota business investment 
19.31 	company has invested;
19.32 	(10) those Minnesota business investment companies that have been decertified, 
19.33 	including the reasons for decertification; and
19.34 	(11) other related information as necessary to evaluate the effect of this section on 
19.35 	economic development.

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

20.1 	Sec. 2. [297I.23] MINNESOTA BUSINESS INVESTMENT COMPANY CREDIT.
20.2 		Subdivision 1.Credit allowed. (a) A participating investor as defined under section 
20.3 	116J.665, subdivision 1, is allowed a credit against the tax imposed in this chapter equal to 
20.4 	80 percent of the participating investor's investment of designated capital in a Minnesota 
20.5 	business investment company. Beginning January 1, 2014, in tax years 2014 to 2017, 
20.6 	a participating investor may claim an amount equal to 20 percent of the participating 
20.7 	investor's investment of designated capital.
20.8 	(b) The credit for any taxable year must not exceed the liability for tax. If the 
20.9 	amount of the credit determined under this section for any taxable year exceeds the 
20.10 	liability for tax, the excess is an investment tax credit carryover to each of the succeeding 
20.11 	taxable years and must be carried forward to each succeeding taxable year until the entire 
20.12 	carryforward has been credited against the participating investor's liability for tax under 
20.13 	this chapter. Credits may be used in connection with both estimated and return payments 
20.14 	of a participating investor's state premium tax liability.
20.15 	(c) A participating investor claiming a credit under this section is not required to pay 
20.16 	any additional retaliatory tax levied by Minnesota as a result of claiming the credit.
20.17 	(d) A participating investor is not required to reduce the amount of tax pursuant to 
20.18 	the state premium tax liability included by the participating investor in connection with 
20.19 	ratemaking for any insurance contract written in this state because of a reduction in the 
20.20 	participating investor's tax liability based on the tax credit allowed under this section.
20.21 	(e) Decertification of a Minnesota business investment company under section 
20.22 	116J.665 may result in the disallowance and the recapture of the credit allowed under this 
20.23 	section. The amount disallowed and recaptured must be assessed as follows:
20.24 	(1) decertification of a Minnesota business investment company within two years 
20.25 	of the allocation date of tax credits and prior to meeting the requirements of section 
20.26 	116J.665, subdivision 5, paragraph (a), clause (1), shall result in the disallowance of all 
20.27 	of the credits allowed under this section;
20.28 	(2) decertification of a Minnesota business investment company after two years 
20.29 	of the allocation date of tax credits, but prior to meeting the requirements of section 
20.30 	116J.665, subdivision 5, paragraph (a), clause (1), results in the disallowance of one-half 
20.31 	of all the credits allowed under this section; and 
20.32 	(3) decertification of a Minnesota business investment company that has already met 
20.33 	the requirements of section 116J.665, subdivision 5, paragraph (a), clause (1), does not 
20.34 	cause the disallowance of any credits allowed under this section nor the recapture of any 
20.35 	portion of the credits that was previously taken.
21.1 		Subd. 2.Transfers. A participating investor must not transfer, agree to transfer, 
21.2 	sell, or agree to sell the credit under this section until 180 days from the date on which 
21.3 	the participating investor invested designated capital. After 180 days from the date of 
21.4 	investment, a participating investor, or subsequent transferee, may transfer credits to 
21.5 	another person who is subject to tax and must notify the department in the form prescribed 
21.6 	by the commissioner within 30 days of the transfer. A person must not transfer a credit 
21.7 	more than once in a 12-month period. No person is entitled to a refund for the interest 
21.8 	created under this subdivision. A credit acquired by transfer is subject to the limitations 
21.9 	prescribed in this section. Any transfer or sale of the credits does not affect the time 
21.10 	schedule for claiming the credit. Any tax credits recaptured under this section remain the 
21.11 	liability of the participating investor that actually applied the credit towards its tax liability.
21.12 		Subd. 3.Repayment of tax benefits received. (a) Decertification of a Minnesota 
21.13 	small business investment company or revocation of credits under section 116J.665, 
21.14 	results in the disallowance to certified investors of any credits for that tax year or future 
21.15 	tax years and the participating investor is required to repay any credits claimed for the 
21.16 	previous year. Repayment must be made within 60 days of the decertification or the 
21.17 	revocation of the certification.
21.18 	(b) The provisions of chapters 270C and 297I relating to audit, assessment, refund, 
21.19 	collection, and appeals are applicable to the credits claimed and repayment required under 
21.20 	this section. The commissioner may impose civil penalties as provided in section 297I.85, 
21.21 	and additional tax and penalties are subject to interest at the rate provided in section 
21.22 	270C.40, from the date payment was due.

21.23 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
21.24 	December 31, 2010.

21.25 	Sec. 3. APPROPRIATION.
 21.26 	$75,000 is appropriated from the general fund to the commissioner of employment 
21.27 	and economic development to pay the costs of certifying Minnesota business investment 
21.28 	companies under section 1, to be available for the fiscal year ending June 30, 2011. The 
21.29 	general fund base for fiscal year 2012 is $50,000 and for fiscal year 2013 is $50,000.

22.1 	ARTICLE 3
22.2 	HISTORICAL STRUCTURE REHABILITATION CREDIT & 
22.3 	REIT CONFORMITY

22.4 	Section 1. [290.0695] CREDIT FOR HISTORIC STRUCTURE 
22.5 	REHABILITATION.
22.6 		Subdivision 1.Definitions. (a) As used in this section, the terms defined in this 
22.7 	subdivision have the meanings given.
22.8 	(b) "Certified historic structure" means a property located in Minnesota and listed 
22.9 	individually on the National Register of Historic Places or a historic property designated 
22.10 	by either a certified local government or a heritage preservation commission created 
22.11 	under the National Historic Preservation Act of 1966 and whose designation is approved 
22.12 	by the state historic preservation officer.
22.13 	(c) "Eligible property" means a certified historic structure or a structure in a certified 
22.14 	historic district that is offered or used for residential or business purposes.
22.15 	(d) "Structure in a certified historic district" means a structure located in Minnesota 
22.16 	that is certified by the State Historic Preservation Office as contributing to the historic 
22.17 	significance of a certified historic district listed on the National Register of Historic Places 
22.18 	or a local district that has been certified by the United States Department of the Interior.
22.19 		Subd. 2.Credit allowed. A taxpayer who incurs costs for the rehabilitation of 
22.20 	eligible property may take a credit against the tax imposed under this chapter in an amount 
22.21 	equal to 20 percent of the total costs of rehabilitation. Costs of rehabilitation include, 
22.22 	but are not limited to, qualified rehabilitation expenditures as defined under section 
22.23 	47(c)(2)(A) of the Internal Revenue Code, provided that the costs of rehabilitation must 
22.24 	exceed 50 percent of the total basis in the property at the time the rehabilitation activity 
22.25 	begins and the rehabilitation must meet standards consistent with the standards of the 
22.26 	Secretary of the Interior for rehabilitation as determined by the State Historic Preservation 
22.27 	Office of the Minnesota Historical Society.
22.28 		Subd. 3.Carryforward. If the amount of the credit under subdivision 2 exceeds the 
22.29 	tax liability under this chapter for the year in which the cost is incurred, the amount that 
22.30 	exceeds the tax liability may be carried forward to each of the ten taxable years succeeding 
22.31 	the taxable year in which the expense was incurred. The entire amount of the credit must 
22.32 	be carried to the earliest taxable year to which the amount may be carried. The unused 
22.33 	portion of the credit must be carried to the following taxable year.
22.34 		Subd. 4.Partnerships; multiple owners; transfers. (a) Credits granted to a 
22.35 	partnership, a limited liability company taxed as a partnership, or multiple owners of 
23.1 	property shall be passed through to the partners, members, or owners, respectively, pro 
23.2 	rata or pursuant to an executed agreement among the partners, members, or owners 
23.3 	documenting an alternate distribution method.
23.4 	(b) Taxpayers eligible for credits may transfer, sell, or assign the credits in whole 
23.5 	or part. Any assignee may use acquired credits to offset up to 100 percent of the taxes 
23.6 	otherwise imposed by this chapter. The assignee shall perfect such transfer by notifying 
23.7 	the Department of Revenue in writing within 30 calendar days following the effective 
23.8 	date of the transfer in such form and manner as shall be prescribed by the Department 
23.9 	of Revenue. The proceeds of any sale or assignment of a credit shall be exempt from 
23.10 	taxation under this chapter.
23.11 		Subd. 5.Process. To claim the credit, the taxpayer must apply to the State Historic 
23.12 	Preservation Office of the Minnesota Historical Society before a historic rehabilitation 
23.13 	project begins. The State Historic Preservation Office shall determine the amount of 
23.14 	eligible rehabilitation costs and whether the rehabilitation meets the standards of the 
23.15 	United States Department of the Interior. The State Historic Preservation Office shall issue 
23.16 	certificates verifying eligibility for and the amount of credit. The taxpayer shall attach 
23.17 	the certificate to any income tax return on which the credit is claimed. The State Historic 
23.18 	Preservation Office of the Minnesota Historical Society may collect fees for applications 
23.19 	for the historic preservation tax credit. Fee receipts must be deposited in the state treasury 
23.20 	and credited to a special account and are appropriated to the Minnesota Historical Society 
23.21 	to administer the tax credit program. Fees shall be set at an amount that does not exceed 
23.22 	the costs of administering the tax credit program.
23.23 		Subd. 6.Mortgage certificates; credit for lending institutions. (a) The taxpayer 
23.24 	may elect, in lieu of the credit otherwise allowed under this section, to receive a historic 
23.25 	rehabilitation mortgage credit certificate.
23.26 	(b) For purposes of this subdivision, a historic rehabilitation mortgage credit is a 
23.27 	certificate that is issued to the taxpayer according to procedures prescribed by the State 
23.28 	Historic Preservation Office with respect to the certified rehabilitation and which meets 
23.29 	the requirements of this paragraph. The face amount of the certificate must be equal to 
23.30 	the credit that would be allowable under subdivision 2 to the taxpayer with respect to 
23.31 	the rehabilitation. The certificate may only be transferred by the taxpayer to a lending 
23.32 	institution, including a nondepository home mortgage lending institution, in connection 
23.33 	with a loan:
23.34 	(1) that is secured by the building with respect to which the credit is issued; and 
23.35 	(2) the proceeds of which may not be used for any purpose other than the acquisition 
23.36 	or rehabilitation of the building.
24.1 	(c) In exchange for the certificate, the lending institution must provide to the 
24.2 	taxpayer an amount equal to the face amount of the certificate discounted by the amount 
24.3 	by which the federal income tax liability of the lending institution is increased due to its 
24.4 	use of the certificate in the manner provided in this section. That amount must be applied, 
24.5 	as directed by the taxpayer, in whole or in part, to reduce:
24.6 	(1) the principal amount of the loan;
24.7 	(2) the rate of interest on the loan; or 
24.8 	(3) the taxpayer's cost of purchasing the building, but only in the case of a qualified 
24.9 	historic home that is located in a poverty-impacted area as designated by the State Historic 
24.10 	Preservation Office.
24.11 	(d) The lending institution may take as a credit against the tax due under this chapter 
24.12 	an amount equal to the amount specified in the certificate. If the amount of the discount 
24.13 	retained by the lender exceeds the amount by which the lending institution's federal 
24.14 	income tax liability is increased due to the use of a mortgage credit certificate, the excess 
24.15 	shall be refunded to the borrower with interest at the rate prescribed by the State Historic 
24.16 	Preservation Office. The lending institution may carry forward all unused credits under 
24.17 	this subdivision until exhausted. Nothing in this subdivision requires a lending institution 
24.18 	to accept a historic rehabilitation certificate from any person.

24.19 	EFFECTIVE DATE. This section is effective for taxable years after December 31, 
24.20 	2009, except that only projects that have obtained a certificate pursuant to subdivision 5 
24.21 	after June 30, 2010, are eligible for the credit.

24.22 	Sec. 2. Minnesota Statutes 2008, section 290.21, subdivision 4, is amended to read:
24.23 		Subd. 4.Dividends received from another corporation. (a)(1) Eighty percent 
24.24 	of dividends received by a corporation during the taxable year from another corporation, 
24.25 	in which the recipient owns 20 percent or more of the stock, by vote and value, not 
24.26 	including stock described in section 1504(a)(4) of the Internal Revenue Code when the 
24.27 	corporate stock with respect to which dividends are paid does not constitute the stock in 
24.28 	trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not 
24.29 	constitute property held by the taxpayer primarily for sale to customers in the ordinary 
24.30 	course of the taxpayer's trade or business, or when the trade or business of the taxpayer 
24.31 	does not consist principally of the holding of the stocks and the collection of the income 
24.32 	and gains therefrom; and
24.33 	(2)(i) the remaining 20 percent of dividends if the dividends received are the stock in 
24.34 	an affiliated company transferred in an overall plan of reorganization and the dividend 
25.1 	is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 
25.2 	amended through December 31, 1989;
25.3 	(ii) the remaining 20 percent of dividends if the dividends are received from a 
25.4 	corporation which is subject to tax under section 290.36 and which is a member of an 
25.5 	affiliated group of corporations as defined by the Internal Revenue Code and the dividend 
25.6 	is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 
25.7 	amended through December 31, 1989, or is deducted under an election under section 
25.8 	243(b) of the Internal Revenue Code; or 
25.9 	(iii) the remaining 20 percent of the dividends if the dividends are received from a 
25.10 	property and casualty insurer as defined under section 60A.60, subdivision 8, which is a 
25.11 	member of an affiliated group of corporations as defined by the Internal Revenue Code 
25.12 	and either: (A) the dividend is eliminated in consolidation under Treasury Regulation 
25.13 	1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted 
25.14 	under an election under section 243(b) of the Internal Revenue Code. 
25.15 	(b) Seventy percent of dividends received by a corporation during the taxable year 
25.16 	from another corporation in which the recipient owns less than 20 percent of the stock, 
25.17 	by vote or value, not including stock described in section 1504(a)(4) of the Internal 
25.18 	Revenue Code when the corporate stock with respect to which dividends are paid does not 
25.19 	constitute the stock in trade of the taxpayer, or does not constitute property held by the 
25.20 	taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or 
25.21 	business, or when the trade or business of the taxpayer does not consist principally of the 
25.22 	holding of the stocks and the collection of income and gain therefrom.
25.23 	(c) The dividend deduction provided in this subdivision shall be allowed only with 
25.24 	respect to dividends that are included in a corporation's Minnesota taxable net income 
25.25 	for the taxable year.
25.26 	The dividend deduction provided in this subdivision does not apply to a dividend 
25.27 	from a corporation which, for the taxable year of the corporation in which the distribution 
25.28 	is made or for the next preceding taxable year of the corporation, is a corporation exempt 
25.29 	from tax under section 501 of the Internal Revenue Code.
25.30 	The dividend deduction provided in this subdivision applies to the amount of 
25.31 	regulated investment company dividends only to the extent determined under section 
25.32 	854(b) of the Internal Revenue Code.
25.33 	The dividend deduction provided in this subdivision shall not be allowed with 
25.34 	respect to any dividend for which a deduction is not allowed under the provisions of 
25.35 	section 246(c) of the Internal Revenue Code.
26.1 	(d) If dividends received by a corporation that does not have nexus with Minnesota 
26.2 	under the provisions of Public Law 86-272 are included as income on the return of 
26.3 	an affiliated corporation permitted or required to file a combined report under section 
26.4 	290.17, subdivision 4, or 290.34, subdivision 2, then for purposes of this subdivision the 
26.5 	determination as to whether the trade or business of the corporation consists principally 
26.6 	of the holding of stocks and the collection of income and gains therefrom shall be made 
26.7 	with reference to the trade or business of the affiliated corporation having a nexus with 
26.8 	Minnesota. 
26.9 	(e) The deduction provided by this subdivision does not apply if the dividends are 
26.10 	paid by a FSC as defined in section 922 of the Internal Revenue Code.
26.11 	(f) If one or more of the members of the unitary group whose income is included on 
26.12 	the combined report received a dividend, the deduction under this subdivision for each 
26.13 	member of the unitary business required to file a return under this chapter is the product 
26.14 	of: (1) 100 percent of the dividends received by members of the group; (2) the percentage 
26.15 	allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business 
26.16 	income apportionable to this state for the taxable year under section 290.191 or 290.20. 
26.17 	(g) The deduction provided by this subdivision does not apply to dividends received 
26.18 	from a real estate investment trust, if the dividends are not considered to be dividends 
26.19 	under sections 243(d)(3) and 857(c) of the Internal Revenue Code.

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

26.22 	ARTICLE 4
26.23 	TAX INCREMENT FINANCING

26.24 	Section 1. Minnesota Statutes 2008, section 469.174, is amended by adding a 
26.25 	subdivision to read:
26.26 		Subd. 10c.Compact development district. "Compact development district" means 
26.27 	a type of tax increment financing district consisting of a project, or portions of a project, 
26.28 	within which the authority finds by resolution that the following conditions are satisfied:
26.29 	(1) parcels consisting of 70 percent of the area of the district are occupied by 
26.30 	buildings or other structures that are classified as class 3a property under section 273.13, 
26.31 	subdivision 24; and
26.32 	(2) the planned redevelopment or development of the district, when completed, will 
26.33 	increase the total square footage of buildings, classified as class 3a under section 273.13, 
27.1 	subdivision 24, occupying the district by three times or more relative to the square footage 
27.2 	of similar buildings occupying the district when the resolution was approved.

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

27.5 	Sec. 2. Minnesota Statutes 2008, section 469.175, is amended by adding a subdivision 
27.6 	to read:
27.7 		Subd. 2b.Compact development districts; sunset. The authority to establish or 
27.8 	approve the tax increment financing plan for a new compact development district expires 
27.9 	on June 30, 2012.

27.10 	Sec. 3. Minnesota Statutes 2008, section 469.176, subdivision 1b, is amended to read:
27.11 		Subd. 1b.Duration limits; terms. (a) No tax increment shall in any event be 
27.12 	paid to the authority
27.13 	(1) after 15 years after receipt by the authority of the first increment for a renewal 
27.14 	and renovation district,
27.15 	(2) after 20 years after receipt by the authority of the first increment for a soils 
27.16 	condition district,
27.17 	(3) after eight years after receipt by the authority of the first increment for an 
27.18 	economic development district,
27.19 	(4) for a housing district, a compact development district, or a redevelopment 
27.20 	district, after 25 years from the date of receipt by the authority of the first increment.
27.21 	(b) For purposes of determining a duration limit under this subdivision or subdivision 
27.22 	1e that is based on the receipt of an increment, any increments from taxes payable in 
27.23 	the year in which the district terminates shall be paid to the authority. This paragraph 
27.24 	does not affect a duration limit calculated from the date of approval of the tax increment 
27.25 	financing plan or based on the recovery of costs or to a duration limit under subdivision 
27.26 	1c. This paragraph does not supersede the restrictions on payment of delinquent taxes in 
27.27 	subdivision 1f.
27.28 	(c) An action by the authority to waive or decline to accept an increment has no 
27.29 	effect for purposes of computing a duration limit based on the receipt of increment under 
27.30 	this subdivision or any other provision of law. The authority is deemed to have received an 
27.31 	increment for any year in which it waived or declined to accept an increment, regardless 
27.32 	of whether the increment was paid to the authority.
27.33 	(d) Receipt by a hazardous substance subdistrict of an increment as a result of a 
27.34 	reduction in original net tax capacity under section 469.174, subdivision 7, paragraph 
28.1 	(b), does not constitute receipt of increment by the overlying district for the purpose of 
28.2 	calculating the duration limit under this section.  

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

28.5 	Sec. 4. Minnesota Statutes 2008, section 469.176, is amended by adding a subdivision 
28.6 	to read:
28.7 		Subd. 1i.Compact development districts. Tax increments derived from a compact 
28.8 	development district may be used only to pay:
28.9 	(1) administrative expenses up to the amount permitted under subdivision 3;
28.10 	(2) the cost of acquiring land located in the district or abutting the boundary of 
28.11 	the district;
28.12 	(3) demolition and removal of buildings or other improvements and other site 
28.13 	preparation costs for lands located in the district or abutting the boundary of the district; 
28.14 	and
28.15 	(4) installation of public infrastructure or public improvements serving the district, 
28.16 	but excluding the costs of streets, roads, highways, parking, or other public improvements 
28.17 	primarily designed to serve private passenger motor vehicles.

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

28.20 	Sec. 5. Minnesota Statutes 2008, section 469.176, subdivision 4c, is amended to read:
28.21 		Subd. 4c.Economic development districts. (a) Revenue derived from tax 
28.22 	increment from an economic development district may not be used to provide 
28.23 	improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form 
28.24 	to developments consisting of buildings and ancillary facilities, if more than 15 percent 
28.25 	of the buildings and facilities (determined on the basis of square footage) are used for a 
28.26 	purpose other than:
28.27 	(1) the manufacturing or production of tangible personal property, including 
28.28 	processing resulting in the change in condition of the property;
28.29 	(2) warehousing, storage, and distribution of tangible personal property, excluding 
28.30 	retail sales;
28.31 	(3) research and development related to the activities listed in clause (1) or (2);
28.32 	(4) telemarketing if that activity is the exclusive use of the property;
28.33 	(5) tourism facilities;
29.1 	(6) qualified border retail facilities; or
29.2 	(7) space necessary for and related to the activities listed in clauses (1) to (6).
29.3 	(b) Notwithstanding the provisions of this subdivision, revenue derived from tax 
29.4 	increment from an economic development district may be used to pay for site preparation 
29.5 	and public improvements, if the following conditions are met:
29.6 	(1) bedrock soils conditions are present in 80 percent or more of the acreage of 
29.7 	the district;
29.8 	(2) the estimated cost of physical preparation of the site exceeds the fair market 
29.9 	value of the land before completion of the preparation; and
29.10 	(3) revenues from tax increments are expended only for the additional costs of 
29.11 	preparing the site because of unstable soils and the bedrock soils condition, the additional 
29.12 	cost of installing public improvements because of unstable soils or the bedrock soils 
29.13 	condition, and reasonable administrative costs.
29.14 	(c) Notwithstanding the provisions of this subdivision, revenues derived from tax 
29.15 	increment from an economic development district may be used to provide improvements, 
29.16 	loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000 
29.17 	square feet of any separately owned commercial facility located within the municipal 
29.18 	jurisdiction of a small city, if the revenues derived from increments are spent only to 
29.19 	assist the facility directly or for administrative expenses, the assistance is necessary to 
29.20 	develop the facility, and all of the increments, except those for administrative expenses, 
29.21 	are spent only for activities within the district.
29.22 	(d) For purposes of this subdivision, a qualified border retail facility is a development 
29.23 	consisting of a shopping center or one or more retail stores, if the authority finds that all 
29.24 	of the following conditions are satisfied:
29.25 	(1) the district is in a small city located within one mile or less of the border of 
29.26 	the state;
29.27 	(2) the development is not located in the seven-county metropolitan area, as defined 
29.28 	in section 473.121, subdivision 2;  
29.29 	(3) the development will contain new buildings or will substantially rehabilitate 
29.30 	existing buildings that together contain at least 25,000 square feet of retail space; and
29.31 	(4) without the use of tax increment financing for the development, the development 
29.32 	or a similar competing development will instead occur in the bordering state or province.
29.33 	(e)(c) A city is a small city for purposes of this subdivision if the city was a small 
29.34 	city in the year in which the request for certification was made and applies for the rest of 
29.35 	the duration of the district, regardless of whether the city qualifies or ceases to qualify 
29.36 	as a small city.
30.1 	(d) Notwithstanding the requirements of paragraph (a) and the finding requirements 
30.2 	of section 469.174, subdivision 12, tax increments from an economic development district 
30.3 	may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or 
30.4 	assistance in any form to developments consisting of buildings and ancillary facilities, if 
30.5 	all the following conditions are met:
30.6 	(1) the municipality finds that the project will create or retain jobs in this state, 
30.7 	including construction jobs, and that construction of the project would not have 
30.8 	commenced before July 1, 2011, without the authority providing assistance under the 
30.9 	provisions of this paragraph;
30.10 	(2) construction of the project begins no later than July 1, 2011; and
30.11 	(3) the request for certification of the district is made no later than June 30, 2011.

30.12 	EFFECTIVE DATE. This section is effective the day following final enactment 
30.13 	and applies to any economic development district for which the request for certification 
30.14 	was made after June 30, 2009.

30.15 	Sec. 6. Minnesota Statutes 2008, section 469.176, is amended by adding a subdivision 
30.16 	to read:
30.17 		Subd. 4m.Temporary authority to stimulate construction. (a) Notwithstanding 
30.18 	the restrictions in any other subdivision of this section or any other law to the contrary, 
30.19 	except the requirement to pay bonds to which the increments are pledged and the 
30.20 	provisions of subdivisions 4g and 4h, the authority may spend tax increments for one or 
30.21 	more of the following purposes:
30.22 	(1) to provide improvements, loans, interest rate subsidies, or assistance in any 
30.23 	form to private development consisting of the construction or substantial rehabilitation 
30.24 	of buildings and ancillary facilities, if doing so will create or retain jobs in this state, 
30.25 	including construction jobs, and that the construction commences before July 1, 2011, and 
30.26 	would not have commenced before that date without the assistance; or
30.27 	(2) to make an equity or similar investment in a corporation, partnership, or limited 
30.28 	liability company that the authority determines is necessary to make a construction of a 
30.29 	development that meets the requirements of clause (1) financially feasible.
30.30 	(b) The authority may undertake actions under the authority of this subdivision only 
30.31 	after approval by the municipality of a written spending plan that specifically authorizes 
30.32 	the authority to take the actions. The municipality shall approve the spending plan only 
30.33 	after a public hearing after published notice in a newspaper of general circulation in 
30.34 	the municipality at least once, not less than ten days nor more than 30 days prior to the 
30.35 	date of the hearing.
31.1 	(c) The authority to spend tax increments under this subdivision expires December 
31.2 	31, 2011.

31.3 	EFFECTIVE DATE. This section is effective the day following final enactment 
31.4 	and applies to tax increments derived from a district, regardless of when the request for 
31.5 	certification was made.

31.6 	Sec. 7. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by 
31.7 	Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10, 
31.8 	section 12, and Laws 2008, chapter 154, article 9, section 18, is amended to read:
31.9 		Subd. 4.Authority. For housing replacement projects in the city of Crystal, 
31.10 	"authority" means the Crystal economic development authority. For housing replacement 
31.11 	projects in the city of Fridley, "authority" means the housing and redevelopment authority 
31.12 	in and for the city of Fridley or a successor in interest. For housing replacement 
31.13 	projects in the city of Minneapolis, "authority" means the Minneapolis community 
31.14 	development agency or its successors and assigns. For housing replacement projects 
31.15 	in the city of St. Paul, "authority" means the St. Paul housing and redevelopment 
31.16 	authority. For housing replacement projects in the city of Duluth, "authority" means the 
31.17 	Duluth economic development authority. For housing replacement projects in the city of 
31.18 	Richfield, "authority" is the authority as defined in Minnesota Statutes, section 469.174, 
31.19 	subdivision 2, that is designated by the governing body of the city of Richfield. For 
31.20 	housing replacement projects in the city of Columbia Heights, "authority" is the authority 
31.21 	as defined in Minnesota Statutes, section 469.174, subdivision 2, that is designated by 
31.22 	the governing body of the city of Columbia Heights. For housing replacement projects in 
31.23 	the city of Brooklyn Park, "authority" is the authority as defined in Minnesota Statutes, 
31.24 	section 469.174, subdivision 2, that is designated by the governing body of the city of 
31.25 	Brooklyn Park.

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

31.29 	Sec. 8. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by 
31.30 	Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10, 
31.31 	section 13, and Laws 2002, chapter 377, article 7, section 6, and Laws 2008, chapter 154, 
31.32 	article 9, section 19, is amended to read:
32.1 		Subdivision 1.Creation of projects. (a) An authority may create a housing 
32.2 	replacement project under sections 44 to 47, as provided in this section.
32.3 	(b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, and Brooklyn 
32.4 	Park, the authority may designate up to 50 100 parcels in the city to be included in a 
32.5 	housing replacement district over the life of a district or districts. No more than ten 
32.6 	parcels may be included in year one of the district, with up to ten additional parcels added 
32.7 	to the district in each of the following nine years. For the cities of St. Paul and Duluth, 
32.8 	each authority may designate not more than 200 parcels in the city to be included in a 
32.9 	housing replacement district over the life of the district. For the city of Minneapolis, the 
32.10 	authority may designate not more than 400 parcels in the city to be included in housing 
32.11 	replacement districts over the life of the districts. The only parcels that may be included 
32.12 	in a district are (1) vacant sites, (2) parcels containing vacant houses, or (3) parcels 
32.13 	containing houses that are structurally substandard, as defined in Minnesota Statutes, 
32.14 	section 469.174, subdivision 10.
32.15 	(c) The city in which the authority is located must pay at least 25 percent of the 
32.16 	housing replacement project costs from its general fund, a property tax levy, or other 
32.17 	unrestricted money, not including tax increments.
32.18 	(d) The housing replacement district plan must have as its sole object the acquisition 
32.19 	of parcels for the purpose of preparing the site to be sold for market rate housing. As 
32.20 	used in this section, "market rate housing" means housing that has a market value that 
32.21 	does not exceed 150 percent of the average market value of single-family housing in that 
32.22 	municipality.

32.23 	EFFECTIVE DATE. This section is effective the day following final enactment 
32.24 	and applies to the affected cities without local approval under Minnesota Statutes, section 
32.25 	645.023, subdivision 1, paragraph (a).

32.26 	Sec. 9. CITY OF ST. PAUL; AUTHORITY TO EXERCISE SPECIAL LAW 
32.27 	AUTHORITY.
 32.28 	Notwithstanding the failure of the governing body of the city of St. Paul to approve 
32.29 	Laws 1995, chapter 264, article 5, sections 44 to 47, as required by Laws 1995, chapter 
32.30 	264, article 5, section 49, the provisions of sections 44 to 47, as amended, apply to the city 
32.31 	of St. Paul without local approval under Minnesota Statutes, section 645.023, subdivision 
32.32 	1, paragraph (a).

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

33.1 	ARTICLE 5
33.2 	MALL OF AMERICA

33.3 	Section 1. Laws 1986, chapter 391, section 1, is amended to read:
33.4 	Section 1. 
33.5 	The legislature finds that providing areawide and local financial assistance, 
33.6 	including the provision of security for debt financing, but not including direct subsidies to 
33.7 	private interests, in the development of the former metropolitan stadium site Industrial 
33.8 	Development District 1 (Airport South) of the city of Bloomington, as amended, is a 
33.9 	public purpose of state, metropolitan, and local government in Minnesota and that it is a 
33.10 	benefit to the metropolitan area within the purpose of the metropolitan revenue distribution 
33.11 	program pursuant to chapter 473F.

33.12 	EFFECTIVE DATE. This section is effective upon local approval of and 
33.13 	compliance by the governing body of the city of Bloomington with the requirements 
33.14 	of Minnesota Statutes, section 645.023.

33.15 	Sec. 2. Laws 2008, chapter 366, article 5, section 28, subdivision 1, is amended to read:
33.16 		Subdivision 1.Additional taxes authorized; use of proceeds. Notwithstanding 
33.17 	Minnesota Statutes, section 477A.016, or any other law, ordinance, or charter provision 
33.18 	to the contrary, the governing body of the city of Bloomington may impose any or all of 
33.19 	the taxes described in this section. The proceeds of any taxes imposed under this section 
33.20 	or section 27, less refunds and the cost of collection, must be used to provide financing 
33.21 	for parking facilities or other public improvements for any phase of the Mall of America 
33.22 	phase II. The Port Authority of the city of Bloomington may, but is not required to, 
33.23 	issue or cause the sale of bonds, a developer's note, or other obligations to finance the 
33.24 	improvements. If a governmental entity other than the city of Bloomington issues the 
33.25 	obligations used to finance the parking facilities and other public improvements, the 
33.26 	city may transfer the funds available under this section and section 27 for financing the 
33.27 	project to the entity that issued the bonds.

33.28 	EFFECTIVE DATE. This section is effective upon local approval of and 
33.29 	compliance by the governing body of the city of Bloomington with the requirements 
33.30 	of Minnesota Statutes, section 645.023.

33.31 	Sec. 3. Laws 2008, chapter 366, article 5, section 29, subdivision 1, is amended to read:
34.1 		Subdivision 1.Issuing authority. (a) The city of Bloomington may contract with 
34.2 	any of the following authorities to issue and sell revenue bonds for the purposes and 
34.3 	in the amounts specified in subdivision 2:
34.4 	(1) the commissioner of finance, exercising the authority granted under this section 
34.5 	and Minnesota Statutes, sections 16A.672 to 16A.675;
34.6 	(2) the Agricultural and Economic Development Board, exercising the powers 
34.7 	granted under this section and Minnesota Statutes, chapter 41A; or
34.8 	(3) the Minnesota Public Facilities Authority, exercising the powers granted under 
34.9 	this section and Minnesota Statutes, chapter 446A.
34.10 	(b) The authority granted in this section is in addition to the statutes in paragraph 
34.11 	(a) and notwithstanding any contrary provisions in them.
34.12 	(c) The contract must include as a party the developer of any phase II of the Mall 
34.13 	of America and may include as a party any other entity deemed appropriate by the city 
34.14 	of Bloomington, the issuing authority, and the developer.

34.15 	EFFECTIVE DATE. This section is effective upon local approval of and 
34.16 	compliance by the governing body of the city of Bloomington with the requirements 
34.17 	of Minnesota Statutes, section 645.023.

34.18 	Sec. 4. Laws 2008, chapter 366, article 5, section 29, subdivision 2, is amended to read:
34.19 		Subd. 2.Purposes and amounts. (a) The revenue bonds may be issued in a single 
34.20 	or multiple issues and sold for the following purposes:
34.21 	(1) to pay the costs to design, construct, furnish, and equip parking facilities and 
34.22 	related other public improvements for any phase II of the Mall of America;
34.23 	(2) to pay the costs of issuance, debt service, and bond insurance or other credit 
34.24 	enhancements, and to fund reserves; and
34.25 	(3) to refund bonds issued under this section.
34.26 	(b) The amount of bonds that may be issued for the purposes of paragraph (a), clause 
34.27 	(1), may not exceed per issue the estimated cost from time to time of the parking facilities 
34.28 	and other public improvements, including soft costs; the amount of bonds that may be 
34.29 	issued for the purposes of paragraph (a), clauses (2) and (3), is not limited.

34.30 	EFFECTIVE DATE. This section is effective upon local approval of and 
34.31 	compliance by the governing body of the city of Bloomington with the requirements 
34.32 	of Minnesota Statutes, section 645.023.

34.33 	Sec. 5. Laws 2008, chapter 366, article 5, section 29, subdivision 4, is amended to read:
35.1 		Subd. 4.Sale and issuance; proceeds. (a) The issuing authority may sell and issue 
35.2 	the bonds on the terms and conditions the issuing authority determines to be in the best 
35.3 	interests of the state after reviewing an agreement between the city of Bloomington and 
35.4 	the developer of any phase II of the Mall of America setting out the terms upon which 
35.5 	the city of Bloomington will use the proceeds of the bond sales. The bonds may be sold 
35.6 	at public or private sale at a price or prices the issuing authority finds appropriate. The 
35.7 	issuing authority may enter any agreements or pledges the issuing authority determines 
35.8 	necessary or useful to sell the bonds that are not inconsistent with this section. 
35.9 	(b) The city may enter into a preliminary agreement with the issuing authority under 
35.10 	which the city agrees, if the revenue bonds are not issued, to pay or cause to be paid the 
35.11 	costs and expenses incurred by the issuing authority relating to the proposed issuance of 
35.12 	the revenue bonds.
35.13 	(c) The proceeds of the bonds issued under this section must be credited to a special 
35.14 	Mall of America revenue bond proceeds account with the issuing authority or a trustee 
35.15 	and are appropriated to the issuing authority for payment to the city of Bloomington 
35.16 	for the purposes specified in subdivision 2.

35.17 	EFFECTIVE DATE. This section is effective upon local approval of and 
35.18 	compliance by the governing body of the city of Bloomington with the requirements 
35.19 	of Minnesota Statutes, section 645.023.

35.20 	Sec. 6.  REPEALER.
 35.21 	Laws 1996, chapter 464, article 1, section 8, subdivision 5, is repealed.

35.22 	EFFECTIVE DATE. This section is effective upon local approval of and 
35.23 	compliance by the governing body of the city of Bloomington with the requirements 
35.24 	of Minnesota Statutes, section 645.023.

35.25 	ARTICLE 6
35.26 	MINERALS

35.27 	Section 1. Minnesota Statutes 2009 Supplement, section 298.294, is amended to read:
35.28 	298.294 INVESTMENT OF FUND.
35.29 	(a) The trust fund established by section 298.292 shall be invested pursuant to law 
35.30 	by the State Board of Investment and the net interest, dividends, and other earnings arising 
35.31 	from the investments shall be transferred, except as provided in paragraph (b), on the first 
35.32 	day of each month to the trust and shall be included and become part of the trust fund. 
36.1 	The amounts transferred, including the interest, dividends, and other earnings earned 
36.2 	prior to July 13, 1982, together with the additional amount of $10,000,000 for fiscal year 
36.3 	1983, which is appropriated April 21, 1983, are appropriated from the trust fund to the 
36.4 	commissioner of Iron Range resources and rehabilitation for deposit in a separate account 
36.5 	for expenditure for the purposes set forth in section 298.292. Amounts appropriated 
36.6 	pursuant to this section shall not cancel but shall remain available unless expended.
36.7 	(b) For fiscal years 2010 and 2011 only, $1,000,000$1,500,000 of the net interest, 
36.8 	dividends, and other earnings under paragraph (a) shall be transferred to a special account. 
36.9 	Funds in the special account are available for loans or grants to businesses, with priority 
36.10 	given to businesses with 25 or fewer employees. Funds may be used for wage subsidies 
36.11 	for up to 52 weeks of up to $5 per hour or other activities, including, but not limited to, 
36.12 	short-term operating expenses and purchase of equipment and materials by businesses 
36.13 	under financial duress,  that will create additional jobs in the taconite assistance area under 
36.14 	section 273.1341. Expenditures from the special account must be approved by at least 
36.15 	seven Iron Range Resources and Rehabilitation Board members.
36.16 	(c) To qualify for a grant or loan, a business must be currently operating and have 
36.17 	been operating for one year immediately prior to its application for a loan or grant, and its 
36.18 	corporate headquarters must be located in the taconite assistance area.

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

36.20 	Sec. 2. Laws 2009, chapter 78, article 7, section 2, is amended to read:
36.21 	Sec. 2. IRON RANGE RESOURCES AND REHABILITATION; EARLY 
36.22 	SEPARATION INCENTIVE PROGRAM AUTHORIZATION.
36.23 	(a) Notwithstanding any law to the contrary, the commissioner of Iron Range 
36.24 	resources and rehabilitation, in consultation with the commissioner of management and 
36.25 	budget, may shall offer a targeted early separation incentive program for employees of the 
36.26 	commissioner who have attained the age of 60 years or who have received credit for at 
36.27 	least 30 years of allowable service under the provisions of Minnesota Statutes, chapter 352.
36.28 	(b) The early separation incentive program may include one or more of the following:
36.29 	(1) employer-paid postseparation health, medical, and dental insurance until age 
36.30 	65; and
36.31 	(2) cash incentives that may, but are not required to be, used to purchase additional 
36.32 	years of service credit through the Minnesota State Retirement System, to the extent that 
36.33 	the purchases are otherwise authorized by law.
36.34 	(c) The commissioner of Iron Range resources and rehabilitation shall establish 
36.35 	eligibility requirements for employees to receive an incentive.
37.1 	(d) The commissioner of Iron Range resources and rehabilitation, consistent with the 
37.2 	established program provisions under paragraph (b), and with the eligibility requirements 
37.3 	under paragraph (c), may designate specific programs or employees as eligible to be 
37.4 	offered the incentive program.
37.5 	(e) Acceptance of the offered incentive must be voluntary on the part of the 
37.6 	employee and must be in writing. The incentive may only be offered at the sole discretion 
37.7 	of the commissioner of Iron Range resources and rehabilitation.
37.8 	(f) The cost of the incentive is payable solely by funds made available to the 
37.9 	commissioner of Iron Range resources and rehabilitation by law, but only on prior approval 
37.10 	of the expenditures by a majority of the Iron Range Resources and Rehabilitation Board.
37.11 	(g) This section and section 3 are repealed June 30, 2011 December 31, 2012.

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

37.13 	Sec. 3. 2010 DISTRIBUTIONS ONLY.
 37.14 	For distributions in 2010 only, a special fund is established to receive 27.067 cents 
37.15 	per ton that otherwise would be allocated under Minnesota Statutes, section 298.28, 
37.16 	subdivision 6:
37.17 	(1) 0.764 cent per ton must be paid to Northern Minnesota Dental to provide 
37.18 	incentives for at least two dentists to establish dental practices in high-need areas of the 
37.19 	taconite tax relief area;
37.20 	(2) 0.955 cent per ton must be paid to the city of Virginia for repairs and geothermal 
37.21 	heat at the Olcott Park Greenhouse/Virginia Commons project;
37.22 	(3) 0.637 cent per ton must be paid to the city of Virginia for health and safety 
37.23 	repairs at the Miners Memorial;
37.24 	(4) 0.955 cent per ton must be paid to the city of Eveleth for the reconstruction 
37.25 	of Highway 142/Grant and Park Avenues;
37.26 	(5) 0.478 cent per ton must be paid to the Greenway Joint Recreation Board for 
37.27 	upgrades and capital improvements to the Hodgins Berardo Arena in Coleraine;
37.28 	(6) 0.796 cent per ton must be paid to the city of Calumet for water treatment and 
37.29 	pumphouse modifications;
37.30 	(7) 0.159 cent per ton must be paid to the city of Bovey for residential and 
37.31 	commercial claims for water damage due to water and flood-related damage caused by 
37.32 	the Canisteo Pit;
37.33 	(8) 0.637 cent per ton must be paid to the city of Nashwauk for a community and 
37.34 	child care center;
38.1 	(9) 0.637 cent per ton must be paid to the city of Keewatin for water and sewer 
38.2 	upgrades;
38.3 	(10) 0.637 cent per ton must be paid to the city of Marble for the city hall and 
38.4 	library project;
38.5 	(11) 0.955 cent per ton must be paid to the city of Grand Rapids for extension of 
38.6 	water and sewer services for Lakewood Housing;
38.7 	(12) 0.159 cent per ton must be paid to the city of Grand Rapids for exhibits at 
38.8 	the Children's Museum;
38.9 	(13) 0.637 cent per ton must be paid to the city of Grand Rapids for Block 20/21 soil 
38.10 	corrections. This amount must be matched by local sources;
38.11 	(14) 0.605 cent per ton must be paid to the city of Aitkin for three water loops;
38.12 	(15) 0.048 cent per ton must be paid to the city of Aitkin for signage;
38.13 	(16) 0.159 cent per ton must be paid to Itasca County for an ATV trail; 
38.14 	(17) 0.637 cent per ton must be paid to the city of Cohasset for the Beiers Road 
38.15 	railroad crossing;
38.16 	(18) 0.088 cent per ton must be paid to the city of Clinton for expansion and striping 
38.17 	of the community center parking lot;
38.18 	(19) 0.398 cent per ton must be paid to the city of Kinney for water line replacement;
38.19 	(20) 0.796 cent per ton must be paid to the city of Gilbert for infrastructure 
38.20 	improvements, milling, and overlay for Summit Street between Alaska Avenue and 
38.21 	Highway 135;
38.22 	(21) 0.318 cent per ton must be paid to the city of Gilbert for sanitary sewer main 
38.23 	replacements and improvements in the Northeast Lower Alley area;
38.24 	(22) 0.637 cent per ton must be paid to the town of White for replacement of the 
38.25 	Stepetz Road culvert;
38.26 	(23) 0.637 cent per ton must be paid to the city of Buhl for reconstruction of Sharon 
38.27 	Street and associated infrastructure;
38.28 	(24) 0.637 cent per ton must be paid to the city of Mountain Iron for site 
38.29 	improvements at the Park Ridge development;
38.30 	(25) 0.796 cent per ton must be paid to the city of Mountain Iron for infrastructure 
38.31 	and site preparation for its renewable and sustainable energy park;
38.32 	(26) 0.637 cent per ton must be paid to the city of Biwabik for sanitary sewer 
38.33 	improvements;
38.34 	(27) 0.796 cent per ton must be paid to the city of Aurora for alley and road 
38.35 	rebuilding for the Summit Addition;
39.1 	(28) 0.955 cent per ton must be paid to the city of Silver Bay for bioenergy facility 
39.2 	improvements;
39.3 	(29) 0.318 cent per ton must be paid to the city of Grand Marais for water and 
39.4 	sewer infrastructure improvements;
39.5 	(30) 0.318 cent per ton must be paid to the city of Orr for airport, water, and sewer 
39.6 	improvements;
39.7 	(31) 0.318 cent per ton must be paid to the city of Cook for street and bridge 
39.8 	improvements;
39.9 	(32) 0.955 cent per ton must be paid to the city of Ely for street, water, and sewer 
39.10 	improvements;
39.11 	(33) 0.318 cent per ton must be paid to the city of Tower for water and sewer 
39.12 	improvements;
39.13 	(34) 0.955 cent per ton must be paid to the city of Two Harbors for water and sewer 
39.14 	improvements;
39.15 	(35) 0.637 cent per ton must be paid to the city of Babbitt for water and sewer 
39.16 	improvements;
39.17 	(36) 0.096 cent per ton must be paid to the township of Duluth for infrastructure 
39.18 	improvements;
39.19 	(37) 0.096 cent per ton must be paid to the township of Tofte for infrastructure 
39.20 	improvements;
39.21 	(38) 3.184 cents per ton must be paid to the city of Hibbing for sewer improvements;
39.22 	(39) 1.273 cents per ton must be paid to the city of Chisholm for NW Area Project 
39.23 	infrastructure improvements; 
39.24 	(40) 0.318 cent per ton must be paid to the city of Chisholm for health and safety 
39.25 	improvements at the athletic facility; 
39.26 	(41) 0.796 cent per ton must be paid to the city of Hoyt Lakes for residential street 
39.27 	improvements;
39.28 	(42) 0.796 cent per ton must be paid to the Bois Forte Indian Reservation for 
39.29 	infrastructure related to a housing development; and
39.30 	(43) 0.159 cent per ton must be paid to Balkan Township for building improvements.

39.31 	EFFECTIVE DATE. This section is effective for the 2010 distribution, all of which 
39.32 	must be made in the August 2010 payment.

40.1 	ARTICLE 7
40.2 	GREEN ENERGY REVENUE BONDS

40.3 	Section 1. [216C.435] DEFINITIONS; ENERGY IMPROVEMENTS 
40.4 	FINANCING PROGRAM FOR RESIDENTIAL AND BUSINESS PROPERTY.
40.5 		Subdivision 1.Scope. For the purposes of this section and section 216C.436, the 
40.6 	terms defined in this section have the meanings given them.
40.7 		Subd. 2.City. "City" means a home rule charter or statutory city.
40.8 		Subd. 3.Energy audit. "Energy audit" means a formal evaluation of the energy 
40.9 	consumption of a building by a certified energy auditor, whose certification is approved by 
40.10 	the commissioner, for the purpose of identifying appropriate energy improvements that 
40.11 	could be made to the building and including an estimate of the length of time a specific 
40.12 	energy improvement will take to repay its purchase and installation costs, based on the 
40.13 	amount of energy saved and estimated future energy prices.
40.14 		Subd. 4.Energy improvement. "Energy improvement" means:
40.15 	(1) any renovation or retrofitting of a building to improve energy efficiency that 
40.16 	is permanently affixed to the property and that results in a net reduction in energy 
40.17 	consumption without altering the principal source of energy; or
40.18 	(2) a renewable energy system attached to or installed within or proximate to a 
40.19 	building that generates electrical or thermal energy from a renewable energy source.
40.20 		Subd. 5.Qualifying real property. "Qualifying real property" means a 
40.21 	single-family or multifamily residential dwelling, or  a commercial or industrial building, 
40.22 	that the city has determined, after review of an energy audit or renewable energy system 
40.23 	feasibility study, can be benefited by installation of energy improvements.
40.24 		Subd. 6.Renewable energy. "Renewable energy" means energy produced by 
40.25 	means of solar thermal, solar photovoltaic,  wind, or geothermal resources.
40.26 		Subd. 7.Renewable energy system feasibility study. "Renewable energy system 
40.27 	feasibility study" means a written study, conducted by a contractor trained to perform that 
40.28 	analysis, for the purpose of determining the feasibility of installing a renewable energy 
40.29 	system in  a building, including an estimate of the length of time a specific renewable 
40.30 	energy system will take to repay its purchase and installation costs, based on the amount of 
40.31 	energy saved and estimated future energy prices.  For a geothermal energy improvement, 
40.32 	the feasibility study must calculate net savings in terms of nongeothermal energy and costs.
40.33 		Subd. 8.Solar thermal. "Solar thermal" has the meaning given to "qualifying solar 
40.34 	thermal project" in section 216B.2411, subdivision 2, paragraph (e).
41.1 		Subd. 9.Solar photovoltaic. "Solar photovoltaic" has the meaning given in section 
41.2 	216C.06, subdivision 16, and must meet the requirements of section 216C.25.
41.3 		Subd. 10.Cost-effective energy efficiency improvements. "Cost-effective energy 
41.4 	efficiency improvements" mean projects that have a simple payback of ten years or less.

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

41.6 	Sec. 2. [216C.436] VOLUNTARY ENERGY EFFICIENCY FINANCING 
41.7 	PROGRAM FOR CITIES.
41.8 		Subdivision 1.Program authority. A city may establish a program to make loans 
41.9 	to owners of qualifying real property to pay for cost-effective energy improvements to 
41.10 	the qualifying real property with the net proceeds and interest earnings of revenue bonds 
41.11 	authorized in this section.
41.12 		Subd. 2.Program requirements. A loan program must:
41.13 	(1) impose requirements and conditions on loans to ensure their timely repayment;
41.14 	(2) require an energy audit or renewable energy system feasibility study to be 
41.15 	conducted on the qualifying real property and reviewed by the city prior to approval of 
41.16 	the loan; 
41.17 	(3) inspect the installation and verify the performance of energy improvements 
41.18 	financed by the loan program; 
41.19 	(4) require that all cost-effective energy efficiency improvements be made to a 
41.20 	qualifying real property prior to, or in conjunction with, an applicant receiving a loan for a 
41.21 	renewable energy system for that property;
41.22 	(5) have work funded by a loan be done by licensed contractors as required by 
41.23 	chapter 326B or other law or ordinance;
41.24 	(6) require disclosures to borrowers by the city of the risks involved in borrowing, 
41.25 	including the risk of foreclosure if a tax delinquency results from a default;
41.26 	(7) provide loans only to those who demonstrate an ability to repay the loan;
41.27 	(8) not make loans for a qualifying real property in which the owner has a negative 
41.28 	equity or is not current on mortgage or real property tax payments;
41.29 	(9) provide that payments and assessments are not accelerated due to a default and 
41.30 	that a tax delinquency exists only for assessments not paid when due; and
41.31 	(10) that liability for special assessments related to the loan runs with the qualifying 
41.32 	real property.
41.33 		Subd. 3.Loan terms. Loans made under this section must have:
42.1 	(1) a term not to exceed the weighted average of the useful life of the energy 
42.2 	improvements installed, as determined by the city, but in no event may a term exceed 
42.3 	20 years;
42.4 	(2)  a principal amount not to exceed the lesser of ten percent of the appraised value 
42.5 	of the real property on which the improvements are to be installed or the actual cost of 
42.6 	installing the energy improvements, including the costs of necessary equipment, materials, 
42.7 	and labor, the costs of each related energy audit or renewable energy system feasibility 
42.8 	study, and the cost of verification of installation; and
42.9 	(3) an interest rate sufficient to pay the financing costs of the program, including the 
42.10 	issuance of bonds and loan delinquencies.
42.11 		Subd. 4.Coordination with other programs. A loan program must include 
42.12 	cooperation and coordination with the conservation improvement activities of the utility 
42.13 	serving the qualifying real property and other public and private energy improvement 
42.14 	programs.
42.15 		Subd. 5.Certificate of participation. Upon completion of a project, a city shall 
42.16 	provide a borrower with a certificate stating participation in the program and what energy 
42.17 	improvements have been made with loan proceeds.
42.18 		Subd. 6.Loan repayment. In addition to any other method established in the 
42.19 	program for loan repayment, a city making a loan under this section may: 
42.20 	(1) secure the loan with a lien against the benefited qualifying real property; and
42.21 	(2) collect loan repayments as a special assessment as provided for in section 
42.22 	429.101 or by charter.
42.23 		Subd. 7.Bond issuance; repayment. (a) A city may issue revenue bonds as 
42.24 	provided in chapter 475 for the purposes of this section. 
42.25 	(b) The bonds must be payable as to both principal and interest solely from the 
42.26 	revenues from the assessments established in subdivision 6. 
42.27 	(c) No holder of bonds issued under this subdivision may compel any exercise 
42.28 	of the taxing power of the city that issued the bonds to pay principal or interest on the 
42.29 	bonds.  Bonds issued under this subdivision are not a debt or obligation of the city that 
42.30 	issued them, nor is the payment of the bonds enforceable out of any money other than the 
42.31 	revenue pledged to the payment of the bonds.

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

42.33 	Sec. 3. Minnesota Statutes 2008, section 429.101, subdivision 1, is amended to read:
42.34 		Subdivision 1.Ordinances. (a) In addition to any other method authorized by 
42.35 	law or charter, the governing body of any municipality may provide for the collection 
43.1 	of unpaid special charges as a special assessment against the property benefited for all 
43.2 	or any part of the cost of:
43.3 	(1) snow, ice, or rubbish removal from sidewalks;
43.4 	(2) weed elimination from streets or private property;
43.5 	(3) removal or elimination of public health or safety hazards from private property, 
43.6 	excluding any structure included under the provisions of sections 463.15 to 463.26; 
43.7 	(4) installation or repair of water service lines, street sprinkling or other dust 
43.8 	treatment of streets;
43.9 	(5) the trimming and care of trees and the removal of unsound trees from any street;
43.10 	(6) the treatment and removal of insect infested or diseased trees on private property, 
43.11 	the repair of sidewalks and alleys;
43.12 	(7) the operation of a street lighting system;
43.13 	(8) the operation and maintenance of a fire protection or a pedestrian skyway system;
43.14 	(9) inspections relating to a municipal housing maintenance code violation;
43.15 	(10) the recovery of any disbursements under section 504B.445, subdivision 4, 
43.16 	clause (5), including disbursements for payment of utility bills and other services, even if 
43.17 	provided by a third party, necessary to remedy violations as described in section 504B.445, 
43.18 	subdivision 4, clause (2); or
43.19 	(11) [Repealed, 2004 c 275 s 5]
43.20 	(12) the recovery of delinquent vacant building registration fees under a municipal 
43.21 	program designed to identify and register vacant buildings; or
43.22 	(13) energy improvements to residential or business property, as authorized under 
43.23 	section 216C.435.
43.24 	(b) The council may by ordinance adopt regulations consistent with this section to 
43.25 	make this authority effective, including, at the option of the council, provisions for placing 
43.26 	primary responsibility upon the property owner or occupant to do the work personally 
43.27 	(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming, 
43.28 	care, and removal, or the operation of a street lighting system) upon notice before the work 
43.29 	is undertaken, and for collection from the property owner or other person served of the 
43.30 	charges when due before unpaid charges are made a special assessment.

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