1.1 	A bill for an act
1.2 	relating to the financing and operation of state and local government; making 
1.3 	changes to individual income, corporate franchise, property, aids, credits, 
1.4 	payments, refunds, sales and use, tax increment financing, aggregate material, 
1.5 	minerals, local, and other taxes and tax-related provisions; making changes to the 
1.6 	green acres and rural preserve programs; authorizing border city development 
1.7 	zone powers and local taxes; modifying regional railroad authority provisions; 
1.8 	repealing sustainable forest resource management incentive; authorizing grants 
1.9 	to local governments for cooperation, consolidation, and service innovation; 
1.10 	providing a science and technology program; reducing certain income 
1.11 	rates; allowing capital equipment exemption at time of purchase; directing 
1.12 	commissioner of revenue to negotiate a reciprocity agreement with state of 
1.13 	Wisconsin and permitting its termination only by law; requiring studies; requiring 
1.14 	reports; repealing metropolitan revenue distribution program; appropriating 
1.15 	money;amending Minnesota Statutes 2010, sections 97A.061, subdivisions 
1.16 	1, 3; 270A.03, subdivision 7; 270B.12, by adding a subdivision; 270C.13, 
1.17 	subdivision 1; 272.02, by adding a subdivision; 273.111, subdivision 9, by adding 
1.18 	a subdivision; 273.114, subdivisions 2, 5, 6; 273.121, subdivision 1; 273.13, 
1.19 	subdivisions 21b, 25, 34; 273.1384, subdivisions 1, 3, 4; 273.1393; 273.1398, 
1.20 	subdivision 3; 275.025, subdivisions 1, 3, 4; 275.066; 275.08, subdivisions 
1.21 	1a, 1d; 276.04, subdivision 2; 279.01, subdivision 1; 289A.20, subdivision 4; 
1.22 	289A.50, subdivision 1; 290.01, subdivisions 6, 19b; 290.06, subdivision 2c; 
1.23 	290.068, subdivision 1; 290.081; 290.091, subdivision 2; 290A.03, subdivisions 
1.24 	11, 13; 297A.61, subdivision 3; 297A.62, by adding a subdivision; 297A.63, 
1.25 	by adding a subdivision; 297A.668, subdivision 7, by adding a subdivision; 
1.26 	297A.68, subdivision 5; 297A.70, subdivision 3; 297A.75; 297A.99, subdivision 
1.27 	1; 298.01, subdivision 3; 298.015, subdivision 1; 298.018, subdivision 1; 
1.28 	298.28, subdivision 3; 298.75, by adding a subdivision; 398A.04, subdivision 
1.29 	8; 398A.07, subdivision 2; 469.1763, subdivision 2; 473.757, subdivisions 2, 
1.30 	11; 477A.011, by adding a subdivision; 477A.0124, by adding a subdivision; 
1.31 	477A.013, subdivisions 8, 9, by adding a subdivision; 477A.03; 477A.11, 
1.32 	subdivision 1; 477A.12, subdivision 1; 477A.14, subdivision 1; 477A.17; Laws 
1.33 	1996, chapter 471, article 2, section 29, subdivision 1, as amended; Laws 1998, 
1.34 	chapter 389, article 8, section 43, subdivisions 3, as amended, 4, as amended, 
1.35 	5, as amended; Laws 2008, chapter 366, article 7, section 19, subdivision 
1.36 	3; Laws 2010, chapter 389, article 7, section 22; proposing coding for new 
1.37 	law in Minnesota Statutes, chapters 3; 116W; 275; 373; repealing Minnesota 
1.38 	Statutes 2010, sections 10A.322, subdivision 4; 13.4967, subdivision 2; 273.114, 
1.39 	subdivision 1; 273.1384, subdivision 6; 279.01, subdivision 4; 289A.60, 
2.1 	subdivision 31; 290.06, subdivision 23; 290C.01; 290C.02; 290C.03; 290C.04; 
2.2 	290C.05; 290C.055; 290C.06; 290C.07; 290C.08; 290C.09; 290C.10; 290C.11; 
2.3 	290C.12; 290C.13; 473F.001; 473F.01; 473F.02, subdivisions 1, 2, 3, 4, 5, 6, 
2.4 	7, 8, 10, 12, 13, 14, 15, 21, 22, 23, 24; 473F.03; 473F.05; 473F.06; 473F.07; 
2.5 	473F.08, subdivisions 1, 2, 3, 3a, 3b, 4, 5, 5a, 6, 7a, 8a, 10; 473F.09; 473F.10; 
2.6 	473F.11; 473F.13, subdivision 1; 477A.145.
2.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.8 	ARTICLE 1
2.9 	INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

2.10 	Section 1. Minnesota Statutes 2010, section 270B.12, is amended by adding a 
2.11 	subdivision to read:
2.12 		Subd. 14.Wisconsin secretary of revenue; income tax reciprocity benchmark 
2.13 	study. The commissioner may disclose return information to the secretary of revenue 
2.14 	of the state of Wisconsin for the purpose of conducting a joint individual income tax 
2.15 	reciprocity study.

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

2.17 	Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19b, is amended to read:
2.18 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
2.19 	and trusts, there shall be subtracted from federal taxable income:
2.20 	(1) net interest income on obligations of any authority, commission, or 
2.21 	instrumentality of the United States to the extent includable in taxable income for federal 
2.22 	income tax purposes but exempt from state income tax under the laws of the United States;
2.23 	(2) if included in federal taxable income, the amount of any overpayment of income 
2.24 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
2.25 	is received as a refund or as a credit to another taxable year's income tax liability;
2.26 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
2.27 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
2.28 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
2.29 	transportation of each qualifying child in attending an elementary or secondary school 
2.30 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
2.31 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
2.32 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
2.33 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
2.34 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
2.35 	"textbooks" includes books and other instructional materials and equipment purchased 
3.1 	or leased for use in elementary and secondary schools in teaching only those subjects 
3.2 	legally and commonly taught in public elementary and secondary schools in this state. 
3.3 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
3.4 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
3.5 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
3.6 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
3.7 	or materials for, or transportation to, extracurricular activities including sporting events, 
3.8 	musical or dramatic events, speech activities, driver's education, or similar programs. No 
3.9 	deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 
3.10 	the qualifying child's vehicle to provide such transportation for a qualifying child. For 
3.11 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
3.12 	given in section 32(c)(3) of the Internal Revenue Code;
3.13 	(4) income as provided under section 290.0802;
3.14 	(5) to the extent included in federal adjusted gross income, income realized on 
3.15 	disposition of property exempt from tax under section 290.491;
3.16 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
3.17 	of the Internal Revenue Code in determining federal taxable income by an individual 
3.18 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
3.19 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
3.20 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, 
3.21 	under the provisions of Public Law 109-1 and Public Law 111-126;
3.22 	(7) for individuals who are allowed a federal foreign tax credit for taxes that do not 
3.23 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
3.24 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
3.25 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
3.26 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
3.27 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
3.28 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
3.29 	the extent they exceed the federal foreign tax credit;
3.30 	(8) in each of the five tax years immediately following the tax year in which an 
3.31 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
3.32 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
3.33 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
3.34 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
3.35 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
3.36 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
4.1 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
4.2 	less than zero;
4.3 	(9) job opportunity building zone income as provided under section 469.316;
4.4 	(10) to the extent included in federal taxable income, the amount of compensation 
4.5 	paid to members of the Minnesota National Guard or other reserve components of the 
4.6 	United States military for active service performed in Minnesota, excluding compensation 
4.7 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
4.8 	this clause, "active service" means (i) state active service as defined in section 190.05, 
4.9 	subdivision 5a, clause (1); (ii) federally funded state active service as defined in section 
4.10 	190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
4.11 	subdivision 5c, but "active service" excludes service performed in accordance with section 
4.12 	190.08, subdivision 3;
4.13 	(11) to the extent included in federal taxable income, the amount of compensation 
4.14 	paid to Minnesota residents who are members of the armed forces of the United States or 
4.15 	United Nations for active duty performed outside Minnesota under United States Code, 
4.16 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
4.17 	the United Nations;
4.18 	(12) an amount, not to exceed $10,000, equal to qualified expenses related to a 
4.19 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
4.20 	to another person for human organ transplantation. For purposes of this clause, "organ" 
4.21 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
4.22 	"human organ transplantation" means the medical procedure by which transfer of a human 
4.23 	organ is made from the body of one person to the body of another person; "qualified 
4.24 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
4.25 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
4.26 	may be subtracted under this clause only once; and "qualified donor" means the individual 
4.27 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
4.28 	individual may claim the subtraction in this clause for each instance of organ donation for 
4.29 	transplantation during the taxable year in which the qualified expenses occur;
4.30 	(13) in each of the five tax years immediately following the tax year in which an 
4.31 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
4.32 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
4.33 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
4.34 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
4.35 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
5.1 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
5.2 	subtraction is not allowed under this clause;
5.3 	(14) to the extent included in federal taxable income, compensation paid to a service 
5.4 	member as defined in United States Code, title 10, section 101(a)(5), for military service 
5.5 	as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);
5.6 	(15) international economic development zone income as provided under section 
5.7 	469.325;
5.8 	(16) to the extent included in federal taxable income, the amount of national service 
5.9 	educational awards received from the National Service Trust under United States Code, 
5.10 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
5.11 	program; and
5.12 	(17) to the extent included in federal taxable income, discharge of indebtedness 
5.13 	income resulting from reacquisition of business indebtedness included in federal taxable 
5.14 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
5.15 	to the extent that the income was included in net income in a prior year as a result of the 
5.16 	addition under section 290.01, subdivision 19a, clause (16).; and
5.17 	(18) to the extent not deducted in computing federal taxable income, charitable 
5.18 	contributions of food inventory as determined under the provisions of section 170(e)(3)(C) 
5.19 	of the Internal Revenue Code, determined without regard to the termination date under 
5.20 	section 170(e)(3)(C)(iv).

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

5.23 	Sec. 3. Minnesota Statutes 2010, section 290.06, subdivision 2c, is amended to read:
5.24 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income 
5.25 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
5.26 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
5.27 	applying to their taxable net income the following schedule of rates:
5.28 	(1) On the first $25,680, 5.35 4.75 percent;
5.29 	(2) On all over $25,680, but not over $102,030, 7.05 6.75 percent;
5.30 	(3) On all over $102,030, 7.85 percent.
5.31 	Married individuals filing separate returns, estates, and trusts must compute their 
5.32 	income tax by applying the above rates to their taxable income, except that the income 
5.33 	brackets will be one-half of the above amounts.
5.34 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
5.35 	computed by applying to taxable net income the following schedule of rates:
6.1 	(1) On the first $17,570, 5.35 4.75 percent;
6.2 	(2) On all over $17,570, but not over $57,710, 7.05 6.75 percent;
6.3 	(3) On all over $57,710, 7.85 percent.
6.4 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
6.5 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
6.6 	computed by applying to taxable net income the following schedule of rates:
6.7 	(1) On the first $21,630, 5.35 4.75 percent;
6.8 	(2) On all over $21,630, but not over $86,910, 7.05 6.75 percent;
6.9 	(3) On all over $86,910, 7.85 percent.
6.10 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
6.11 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
6.12 	an amount determined by the commissioner must be computed in accordance with tables 
6.13 	prepared and issued by the commissioner of revenue based on income brackets of not 
6.14 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
6.15 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
6.16 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
6.17 	(e) An individual who is not a Minnesota resident for the entire year must compute 
6.18 	the individual's Minnesota income tax as provided in this subdivision. After the 
6.19 	application of the nonrefundable credits provided in this chapter, the tax liability must 
6.20 	then be multiplied by a fraction in which:
6.21 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
6.22 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
6.23 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), 
6.24 	(13), (16), and (17), and reduced by the Minnesota assignable portion of the subtraction 
6.25 	for United States government interest under section 290.01, subdivision 19b, clause 
6.26 	(1), and the subtractions under section 290.01, subdivision 19b, clauses (8), (9), (13), 
6.27 	(14), (15), and (17), after applying the allocation and assignability provisions of section 
6.28 	290.081, clause (a), or 290.17; and
6.29 	(2) the denominator is the individual's federal adjusted gross income as defined in 
6.30 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
6.31 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), (16), and 
6.32 	(17), and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), 
6.33 	(8), (9), (13), (14), (15), and (17).

6.34 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
6.35 	December 31, 2011, except that the 4.75 percent rates in paragraphs (a), clause (1), (b), 
6.36 	clause (1), and (c), clause (1), are 5.25 percent for taxable years beginning after December 
7.1 	31, 2011, and before January 1, 2013, and 5.15 percent for taxable years beginning after 
7.2 	December 31, 2012, and before January 1, 2014, and the 6.75 percent rates in paragraphs 
7.3 	(a), clause (2), (b), clause (2), and (c), clause (2), are 6.85 percent for taxable years 
7.4 	beginning after December 31, 2011, and before January 1, 2014.

7.5 	Sec. 4. Minnesota Statutes 2010, section 290.068, subdivision 1, is amended to read:
7.6 		Subdivision 1.Credit allowed. A corporation, partners in a partnership, or 
7.7 	shareholders in a corporation treated as an "S" corporation under section 290.9725 are 
7.8 	allowed a credit against the tax computed under this chapter for the taxable year equal to:
7.9 	(a) ten 12.5 percent of the first $2,000,000 of the excess (if any) of
7.10 	(1) the qualified research expenses for the taxable year, over
7.11 	(2) the base amount; and
7.12 	(b) 2.5 five percent on all of such excess expenses over $2,000,000.

7.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
7.14 	December 31, 2010, except that for taxable years beginning after December 31, 2010, and 
7.15 	before January 1, 2012, the five percent rate in clause (b) is reduced to four percent.

7.16 	Sec. 5. Minnesota Statutes 2010, section 290.081, is amended to read:
7.17 	290.081 INCOME OF NONRESIDENTS, RECIPROCITY.
7.18 		Subdivision 1.Reciprocity with other states. (a) The compensation received for 
7.19 	the performance of personal or professional services within this state by an individual 
7.20 	whose residence, place of abode, and place customarily returned to at least once a month 
7.21 	is in another state, shall be excluded from gross income to the extent such compensation is 
7.22 	subject to an income tax imposed by the state of residence; provided that such state allows 
7.23 	a similar exclusion of compensation received by residents of Minnesota for services 
7.24 	performed therein.
7.25 	(b) When it is deemed to be in the best interests of the people of this state, the 
7.26 	commissioner may determine that the provisions of paragraph (a) shall not apply, as they 
7.27 	relate to all states except Wisconsin. The provisions of paragraph (a) apply with respect 
7.28 	to Wisconsin only for taxable years in which a reciprocity agreement with Wisconsin is 
7.29 	in effect as provided by this section. As long as the provisions of paragraph (a) apply 
7.30 	between Minnesota and Wisconsin, the provisions of paragraph (a) shall apply to any 
7.31 	individual who is domiciled in Wisconsin.
7.32 	(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota 
7.33 	residents which would have been paid Wisconsin without paragraph (a) exceeds the 
8.1 	Minnesota tax on Wisconsin residents which would have been paid Minnesota without 
8.2 	paragraph (a), or vice versa, then the state with the net revenue loss resulting from 
8.3 	paragraph (a) must be compensated by the other state as provided in the agreement under 
8.4 	paragraph (d). This provision shall be effective for all years beginning after December 31, 
8.5 	1972. The data used for computing the loss to either state shall be determined on or before 
8.6 	September 30 of the year following the close of the previous calendar year.
8.7 	(d) Interest is payable on all amounts calculated under paragraph (c) relating to 
8.8 	taxable years beginning after December 31, 2000 and before January 1, 2010. Interest 
8.9 	accrues from July 1 of the taxable year. 
8.10 	(e) The commissioner of revenue is authorized to enter into agreements reciprocity 
8.11 	agreement with the state of Wisconsin specifying must specify the compensation required 
8.12 	under paragraph (b), the one or more  reciprocity payment due date,dates for the revenue 
8.13 	loss relating to each taxable year, with one or more estimated payment due dates in the 
8.14 	same fiscal year in which the revenue loss occurred, and a final payment in the following 
8.15 	fiscal year, conditions constituting delinquency, interest rates, and a method for computing 
8.16 	interest due. Interest is payable from July 1 of the taxable year on final payments made in 
8.17 	the following fiscal year. Calculation of compensation under the agreement must specify 
8.18 	if the revenue loss is determined before or after the allowance of each state's credit for 
8.19 	taxes paid to the other state.
8.20 	(e) (f) If an agreement cannot be reached as to the amount of the loss, the 
8.21 	commissioner of revenue and the taxing official of the state of Wisconsin shall each 
8.22 	appoint a member of a board of arbitration and these members shall appoint the third 
8.23 	member of the board. The board shall select one of its members as chair. Such board may 
8.24 	administer oaths, take testimony, subpoena witnesses, and require their attendance, require 
8.25 	the production of books, papers and documents, and hold hearings at such places as are 
8.26 	deemed necessary. The board shall then make a determination as to the amount to be paid 
8.27 	the other state which determination shall be final and conclusive.
8.28 	(f) (g) The commissioner may furnish copies of returns, reports, or other information 
8.29 	to the taxing official of the state of Wisconsin, a member of the board of arbitration, or a 
8.30 	consultant under joint contract with the states of Minnesota and Wisconsin for the purpose 
8.31 	of making a determination as to the amount to be paid the other state under the provisions 
8.32 	of this section. Prior to the release of any information under the provisions of this section, 
8.33 	the person to whom the information is to be released shall sign an agreement which 
8.34 	provides that the person will protect the confidentiality of the returns and information 
8.35 	revealed thereby to the extent that it is protected under the laws of the state of Minnesota.
9.1 	(h) Any reciprocity agreement entered into under this section continues in effect 
9.2 	until terminated by Minnesota or Wisconsin law. The commissioner may agree to modify 
9.3 	the timing or method of calculating the state payments to be made under the agreement, 
9.4 	consistent with the requirements of paragraphs (c) and (e), but may not terminate the 
9.5 	agreement.
9.6 		Subd. 2.New reciprocity agreement with Wisconsin. (a) The commissioner of 
9.7 	revenue is directed to initiate negotiations with the secretary of revenue of Wisconsin, 
9.8 	with the objective of entering into an income tax reciprocity agreement effective for tax 
9.9 	years beginning after December 31, 2011. The agreement must satisfy the conditions of 
9.10 	subdivision 1, with one or more estimated payment due dates and a final payment due 
9.11 	date specified so that the state with a net revenue loss as a result of the agreement receives 
9.12 	estimated payments from the other state, in the same fiscal year as that in which the net 
9.13 	revenue loss occurred and a final payment with interest in the following fiscal year.
9.14 	(b) The commissioner may not enter into an income tax reciprocity agreement 
9.15 	with Wisconsin under this section until after Wisconsin has paid in full with interest the 
9.16 	amount due to Minnesota under the income tax reciprocity agreement in effect for taxable 
9.17 	years beginning before January 1, 2010.

9.18 	EFFECTIVE DATE. Subdivision 2 is effective the day following final enactment. 
9.19 	The changes to subdivision 1 are effective for taxable years beginning after December 31 
9.20 	of the year of the agreement, contingent upon agreement from the state of Wisconsin to a 
9.21 	reciprocity arrangement in which estimated payments are made in the same fiscal year in 
9.22 	which a change in revenue occurs, and a final payment is made in the following fiscal year.

9.23 	Sec. 6. Minnesota Statutes 2010, section 290.091, subdivision 2, is amended to read:
9.24 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
9.25 	terms have the meanings given:
9.26 	(a) "Alternative minimum taxable income" means the sum of the following for 
9.27 	the taxable year:
9.28 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
9.29 	55(b)(2) of the Internal Revenue Code;
9.30 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
9.31 	minimum taxable income, but excluding:
9.32 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
9.33 	Code, including any additional subtraction for charitable contributions of food inventory 
9.34 	under section 290.01, subdivision 19b;
9.35 	(ii) the medical expense deduction;
10.1 	(iii) the casualty, theft, and disaster loss deduction; and
10.2 	(iv) the impairment-related work expenses of a disabled person;
10.3 	(3) for depletion allowances computed under section 613A(c) of the Internal 
10.4 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
10.5 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
10.6 	the excess of the deduction for depletion allowable under section 611 of the Internal 
10.7 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
10.8 	taxable year (determined without regard to the depletion deduction for the taxable year);
10.9 	(4) to the extent not included in federal alternative minimum taxable income, the 
10.10 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
10.11 	Internal Revenue Code determined without regard to subparagraph (E);
10.12 	(5) to the extent not included in federal alternative minimum taxable income, the 
10.13 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
10.14 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 
10.15 	to (9), (12), (13), (16), and (17);
10.16 	less the sum of the amounts determined under the following:
10.17 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1);
10.18 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
10.19 	19b, clause (2), to the extent included in federal alternative minimum taxable income;
10.20 	(3) the amount of investment interest paid or accrued within the taxable year on 
10.21 	indebtedness to the extent that the amount does not exceed net investment income, as 
10.22 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
10.23 	amounts deducted in computing federal adjusted gross income; and
10.24 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
10.25 	subdivision 19b, clauses (6), (8) to (15), and (17).
10.26 	In the case of an estate or trust, alternative minimum taxable income must be 
10.27 	computed as provided in section 59(c) of the Internal Revenue Code.
10.28 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
10.29 	of the Internal Revenue Code.
10.30 	(c) "Net minimum tax" means the minimum tax imposed by this section.
10.31 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
10.32 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
10.33 	credits allowed under this chapter.
10.34 	(e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
10.35 	income after subtracting the exemption amount determined under subdivision 3.

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

11.3 	Sec. 7. INCOME TAX RECIPROCITY BENCHMARK STUDY.
 11.4 	(a) The Department of Revenue, in conjunction with the Wisconsin Department of 
11.5 	Revenue, must conduct a study to determine at least the following:
11.6 	(1) the number of residents of each state who earn income from personal services in 
11.7 	the other state;
11.8 	(2) the total amount of income earned by residents of each state who earn income 
11.9 	from personal services in the other state; and
11.10 	(3) the change in tax revenue in each state if an income tax reciprocity arrangement 
11.11 	were resumed between the two states under which the taxpayers were required to pay 
11.12 	income taxes on the income only in their state of residence.
11.13 	(b) The study must be conducted as soon as practicable, using information obtained 
11.14 	from each state's income tax returns for tax year 2011, and from any other source of 
11.15 	information the departments determine is necessary to complete the study.
11.16 	(c) No later than March 1, 2013, the Department of Revenue must submit a report 
11.17 	containing the results of the study to the governor and to the chairs and ranking minority 
11.18 	members of the legislative committees having jurisdiction over taxes.

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

11.20 	ARTICLE 2
11.21 	SALES AND USE TAXES

11.22 	Section 1. Minnesota Statutes 2010, section 289A.20, subdivision 4, is amended to 
11.23 	read:
11.24 		Subd. 4.Sales and use tax. (a) The taxes imposed by chapter 297A are due and 
11.25 	payable to the commissioner monthly on or before the 20th day of the month following 
11.26 	the month in which the taxable event occurred, or following another reporting period 
11.27 	as the commissioner prescribes or as allowed under section 289A.18, subdivision 4, 
11.28 	paragraph (f) or (g), except that:
11.29 	(1) use taxes due on an annual use tax return as provided under section 289A.11, 
11.30 	subdivision 1, are payable by April 15 following the close of the calendar year; and.
11.31 	(2) except as provided in paragraph (f), for a vendor having a liability of $120,000 
11.32 	or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes 
12.1 	imposed by chapter 297A, except as provided in paragraph (b), are due and payable to the 
12.2 	commissioner monthly in the following manner:
12.3 	(i) On or before the 14th day of the month following the month in which the taxable 
12.4 	event occurred, the vendor must remit to the commissioner 90 percent of the estimated 
12.5 	liability for the month in which the taxable event occurred.
12.6 	(ii) On or before the 20th day of the month in which the taxable event occurs, the 
12.7 	vendor must remit to the commissioner a prepayment for the month in which the taxable 
12.8 	event occurs equal to 67 percent of the liability for the previous month.
12.9 	(iii) On or before the 20th day of the month following the month in which the taxable 
12.10 	event occurred, the vendor must pay any additional amount of tax not previously remitted 
12.11 	under either item (i) or (ii ) or, if the payment made under item (i) or (ii) was greater than 
12.12 	the vendor's liability for the month in which the taxable event occurred, the vendor may 
12.13 	take a credit against the next month's liability in a manner prescribed by the commissioner.
12.14 	(iv) Once the vendor first pays under either item (i) or (ii), the vendor is required to 
12.15 	continue to make payments in the same manner, as long as the vendor continues having a 
12.16 	liability of $120,000 or more during the most recent fiscal year ending June 30.
12.17 	(v) Notwithstanding items (i), (ii), and (iv), if a vendor fails to make the required 
12.18 	payment in the first month that the vendor is required to make a payment under either item 
12.19 	(i) or (ii), then the vendor is deemed to have elected to pay under item (ii) and must make 
12.20 	subsequent monthly payments in the manner provided in item (ii).
12.21 	(vi) For vendors making an accelerated payment under item (ii), for the first month 
12.22 	that the vendor is required to make the accelerated payment, on the 20th of that month, the 
12.23 	vendor will pay 100 percent of the liability for the previous month and a prepayment for 
12.24 	the first month equal to 67 percent of the liability for the previous month.
12.25 	(b) Notwithstanding paragraph (a), A vendor having a liability of $120,000 or more 
12.26 	during a fiscal year ending June 30 must remit the June liability for the next year in the 
12.27 	following manner:
12.28 	(1) Two business days before June 30 of the year, the vendor must remit 90 percent 
12.29 	of the estimated June liability to the commissioner.
12.30 	(2) On or before August 20 of the year, the vendor must pay any additional amount 
12.31 	of tax not remitted in June.
12.32 	(c) A vendor having a liability of:
12.33 	(1) $10,000 or more, but less than $120,000 during a fiscal year ending June 30, 
12.34 	2009, and fiscal years thereafter, must remit by electronic means all liabilities on returns 
12.35 	due for periods beginning in the subsequent calendar year on or before the 20th day of 
12.36 	the month following the month in which the taxable event occurred, or on or before the 
13.1 	20th day of the month following the month in which the sale is reported under section 
13.2 	289A.18, subdivision 4; or
13.3 	(2) $120,000 or more, during a fiscal year ending June 30, 2009, and fiscal years 
13.4 	thereafter, must remit by electronic means all liabilities in the manner provided in 
13.5 	paragraph (a), clause (2), on returns due for periods beginning in the subsequent calendar 
13.6 	year, except for 90 percent of the estimated June liability, which is due two business days 
13.7 	before June 30. The remaining amount of the June liability is due on August 20.
13.8 	(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's 
13.9 	religious beliefs from paying electronically shall be allowed to remit the payment by mail. 
13.10 	The filer must notify the commissioner of revenue of the intent to pay by mail before 
13.11 	doing so on a form prescribed by the commissioner. No extra fee may be charged to a 
13.12 	person making payment by mail under this paragraph. The payment must be postmarked 
13.13 	at least two business days before the due date for making the payment in order to be 
13.14 	considered paid on a timely basis.
13.15 	(e) Whenever the liability is $120,000 or more separately for: (1) the tax imposed 
13.16 	under chapter 297A; (2) a fee that is to be reported on the same return as and paid with the 
13.17 	chapter 297A taxes; or (3) any other tax that is to be reported on the same return as and 
13.18 	paid with the chapter 297A taxes, then the payment of all the liabilities on the return must 
13.19 	be accelerated as provided in this subdivision.
13.20 	(f) At the start of the first calendar quarter at least 90 days after the cash flow 
13.21 	account established in section 16A.152, subdivision 1, and the budget reserve account 
13.22 	established in section 16A.152, subdivision 1a, reach the amounts listed in section 
13.23 	16A.152, subdivision 2, paragraph (a), the remittance of the accelerated payments required 
13.24 	under paragraph (a), clause (2), must be suspended. The commissioner of management 
13.25 	and budget shall notify the commissioner of revenue when the accounts have reached 
13.26 	the required amounts. Beginning with the suspension of paragraph (a), clause (2), for a 
13.27 	vendor with a liability of $120,000 or more during a fiscal year ending June 30, 2009, 
13.28 	and fiscal years thereafter, the taxes imposed by chapter 297A are due and payable to the 
13.29 	commissioner on the 20th day of the month following the month in which the taxable 
13.30 	event occurred. Payments of tax liabilities for taxable events occurring in June under 
13.31 	paragraph (b) are not changed.

13.32 	EFFECTIVE DATE. This section is effective for taxes due and payable after 
13.33 	July 1, 2011.

13.34 	Sec. 2. Minnesota Statutes 2010, section 297A.61, subdivision 3, is amended to read:
14.1 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
14.2 	to, each of the transactions listed in this subdivision.
14.3 	(b) Sale and purchase include:
14.4 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
14.5 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
14.6 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
14.7 	in money or by exchange or barter, tangible personal property, other than a manufactured 
14.8 	home used for residential purposes for a continuous period of 30 days or more.
14.9 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
14.10 	tangible personal property for a consideration for consumers who furnish either directly or 
14.11 	indirectly the materials used in the production, fabrication, printing, or processing.
14.12 	(d) Sale and purchase include the preparing for a consideration of food. 
14.13 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
14.14 	to, the following:
14.15 	(1) prepared food sold by the retailer;
14.16 	(2) soft drinks;
14.17 	(3) candy;
14.18 	(4) dietary supplements; and
14.19 	(5) all food sold through vending machines.
14.20 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
14.21 	gas, water, or steam for use or consumption within this state.
14.22 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
14.23 	computer software whether delivered electronically, by load and leave, or otherwise.
14.24 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
14.25 	services:
14.26 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
14.27 	events, and the making available of amusement devices, tanning facilities, reducing 
14.28 	salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
14.29 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
14.30 	motel, or trailer camp, including furnishing the guest of the facility with access to 
14.31 	telecommunication services, and the granting of any similar license to use real property 
14.32 	in a specific facility, other than the renting or leasing of it for a continuous period of 
14.33 	30 days or more under an enforceable written agreement that may not be terminated 
14.34 	without prior notice;
14.35 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
14.36 	periodic basis, except for parking at a meter;
15.1 	(4) the granting of membership in a club, association, or other organization if:
15.2 	(i) the club, association, or other organization makes available for the use of its 
15.3 	members sports and athletic facilities, without regard to whether a separate charge is 
15.4 	assessed for use of the facilities; and
15.5 	(ii) use of the sports and athletic facility is not made available to the general public 
15.6 	on the same basis as it is made available to members.
15.7 	Granting of membership means both onetime initiation fees and periodic membership 
15.8 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
15.9 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
15.10 	swimming pools; and other similar athletic or sports facilities;
15.11 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
15.12 	material used in road construction, and delivery of concrete block by a third party if 
15.13 	the delivery would be subject to the sales tax if provided by the seller of the concrete 
15.14 	block; and
15.15 	(6) services as provided in this clause:
15.16 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
15.17 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
15.18 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
15.19 	include services provided by coin operated facilities operated by the customer;
15.20 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
15.21 	provided by coin operated facilities operated by the customer, and rustproofing, 
15.22 	undercoating, and towing of motor vehicles;
15.23 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
15.24 	pest control and exterminating services;
15.25 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
15.26 	including services performed within the jurisdiction they serve by off-duty licensed peace 
15.27 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
15.28 	organization for monitoring and electronic surveillance of persons placed on in-home 
15.29 	detention pursuant to court order or under the direction of the Minnesota Department 
15.30 	of Corrections;
15.31 	(v) pet grooming services;
15.32 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
15.33 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
15.34 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
15.35 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
16.1 	public utility lines. Services performed under a construction contract for the installation of 
16.2 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
16.3 	(vii) massages, except when provided by a licensed health care facility or 
16.4 	professional or upon written referral from a licensed health care facility or professional for 
16.5 	treatment of illness, injury, or disease; and
16.6 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
16.7 	other similar arrangements, but excluding veterinary and horse boarding services.
16.8 	In applying the provisions of this chapter, the terms "tangible personal property" 
16.9 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
16.10 	and the provision of these taxable services, unless specifically provided otherwise. 
16.11 	Services performed by an employee for an employer are not taxable. Services performed 
16.12 	by a partnership or association for another partnership or association are not taxable if 
16.13 	one of the entities owns or controls more than 80 percent of the voting power of the 
16.14 	equity interest in the other entity. Services performed between members of an affiliated 
16.15 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
16.16 	group of corporations" means those entities that would be classified as members of an 
16.17 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
16.18 	the exclusions in section 1504(b).
16.19 	For purposes of clause (5), "road construction" means construction of (1) public 
16.20 	roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 
16.21 	metropolitan area up to the point of the emergency response location sign.
16.22 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
16.23 	personal property or taxable services by the United States or any of its agencies or 
16.24 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
16.25 	subdivisions.
16.26 	(i) A sale and a purchase includes the furnishing for a consideration of 
16.27 	telecommunications services, ancillary services associated with telecommunication 
16.28 	services, cable television services, and direct satellite services, and ring tones. 
16.29 	Telecommunication services include, but are not limited to, the following services, 
16.30 	as defined in section 297A.669: air-to-ground radiotelephone service, mobile 
16.31 	telecommunication service, postpaid calling service, prepaid calling service, prepaid 
16.32 	wireless calling service, and private communication services. The services in this 
16.33 	paragraph are taxed to the extent allowed under federal law.
16.34 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
16.35 	the installation charges would be subject to the sales tax if the installation were provided 
16.36 	by the seller of the item being installed.
17.1 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
17.2 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
17.3 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
17.4 	59B.02, subdivision 11.

17.5 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
17.6 	June 30, 2011.

17.7 	Sec. 3. Minnesota Statutes 2010, section 297A.62, is amended by adding a subdivision 
17.8 	to read:
17.9 		Subd. 5.Transitional period for services. When there is a change in the rate of tax 
17.10 	imposed by this section, the following transitional period shall apply to the retail sale of 
17.11 	services covering a billing period starting before and ending after the statutory effective 
17.12 	date of the rate change:
17.13 	(1) for a rate increase, the new rate shall apply to the first billing period starting 
17.14 	on or after the effective date; and
17.15 	(2) for a rate decrease, the new rate shall apply to bills rendered on or after the 
17.16 	effective date.

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

17.18 	Sec. 4. Minnesota Statutes 2010, section 297A.63, is amended by adding a subdivision 
17.19 	to read:
17.20 		Subd. 3.Transitional period for services. When there is a change in the rate of 
17.21 	tax imposed by this section, the following transitional period shall apply to the taxable 
17.22 	services purchased for use, storage, distribution, or consumption in this state when the 
17.23 	service purchased covers a billing period starting before and ending after the statutory 
17.24 	effective date of the rate change:
17.25 	(1) for a rate increase, the new rate shall apply to the first billing period starting 
17.26 	on or after the effective date; and
17.27 	(2) for a rate decrease, the new rate shall apply to bills rendered on or after the 
17.28 	effective date.

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

17.30 	Sec. 5. Minnesota Statutes 2010, section 297A.668, subdivision 7, is amended to read:
17.31 		Subd. 7.Advertising and promotional direct mail. (a) Notwithstanding other 
17.32 	subdivisions of this section, the provisions in paragraphs (b) to (e) apply to the sale of 
18.1 	advertising and promotional direct mail. "Advertising and promotional direct mail" means 
18.2 	printed material that is direct mail as defined in section 297A.61, subdivision 35, the 
18.3 	primary purpose of which is to attract public attention to a product, person, business, or 
18.4 	organization, or to attempt to sell, popularize, or secure financial support for a person, 
18.5 	business, organization, or product. "Product" includes tangible personal property, a digital 
18.6 	product transferred electronically, or a service.
18.7 	(b) A purchaser of advertising and promotional direct mail that is not a holder of 
18.8 	a direct pay permit shall provide to the seller, in conjunction with the purchase, either a 
18.9 	direct mail form or may provide the seller with either:
18.10 	(1) a fully completed exemption certificate as described in section 297A.72 
18.11 	indicating that the purchaser is authorized to pay any sales or use tax due on purchases 
18.12 	made by the purchaser directly to the commissioner under section 297A.89;
18.13 	(2) a fully completed exemption certificate claiming an exemption for direct mail; or
18.14 	(3) information to show showing the jurisdictions to which the advertising and 
18.15 	promotional direct mail is to be delivered to recipients.
18.16 	(1) Upon receipt of the direct mail form, (c) In the absence of bad faith, if the 
18.17 	purchaser provides one of the exemption certificates indicated in paragraph (b), clauses (1) 
18.18 	and (2), the seller is relieved of all obligations to collect, pay, or remit the applicable tax 
18.19 	and the purchaser is obligated to pay or remit the applicable tax on a direct pay basis. A 
18.20 	direct mail form remains in effect for all future sales of direct mail by the seller to the 
18.21 	purchaser until it is revoked in writing. tax on any transaction involving advertising and 
18.22 	promotional direct mail to which the certificate applies. The purchaser shall source the 
18.23 	sale to the jurisdictions to which the advertising and promotional direct mail is to be 
18.24 	delivered to the recipients of the mail, and shall report and pay any applicable tax due.
18.25 	(2) Upon receipt of (d) If the purchaser provides the seller information from the 
18.26 	purchaser showing the jurisdictions to which the advertising and promotional direct mail 
18.27 	is to be delivered to recipients, the seller shall source the sale to the jurisdictions to which 
18.28 	the advertising and promotional direct mail is to be delivered and shall collect and remit
18.29 	the applicable tax according to the delivery information provided by the purchaser. In 
18.30 	the absence of bad faith, the seller is relieved of any further obligation to collect any 
18.31 	additional tax on any transaction for which the sale of advertising and promotional direct 
18.32 	mail where the seller has collected tax pursuant sourced the sale according to the delivery 
18.33 	information provided by the purchaser.
18.34 	(b) (e) If the purchaser of direct mail does not have a direct pay permit and does 
18.35 	not provide the seller with either a direct mail form or delivery information, as required 
18.36 	by paragraph (a), the seller shall collect the tax according to any of the items listed in 
19.1 	paragraph (b), the sale shall be sourced under subdivision 2, paragraph (f). Nothing in 
19.2 	this paragraph limits a purchaser's obligation for sales or use tax to any state to which the 
19.3 	direct mail is delivered.
19.4 	(c) If a purchaser of direct mail provides the seller with documentation of direct 
19.5 	pay authority, the purchaser is not required to provide a direct mail form or delivery 
19.6 	information to the seller.
19.7 	(f) This subdivision does not apply to printed materials that result from developing 
19.8 	billing information or providing any data processing service that is more than incidental 
19.9 	to producing the printed materials, regardless of whether advertising and promotional 
19.10 	direct mail is included in the same mailing.
19.11 	(g) If a transaction is a bundled transaction that includes advertising and promotional 
19.12 	direct mail, this subdivision applies only if the primary purpose of the transaction is the sale 
19.13 	of products or services that meet the definition of advertising and promotional direct mail.

19.14 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
19.15 	June 30, 2011.

19.16 	Sec. 6. Minnesota Statutes 2010, section 297A.668, is amended by adding a 
19.17 	subdivision to read:
19.18 		Subd. 7a.Other direct mail. (a) Notwithstanding other subdivisions of this section, 
19.19 	the provisions in paragraphs (b) and (c) apply to the sale of other direct mail. "Other direct 
19.20 	mail" means printed material that is direct mail as defined in section 297A.61, subdivision 
19.21 	35, but is not advertising and promotional direct mail as described in subdivision 7, 
19.22 	regardless of whether advertising and promotional direct mail is included in the same 
19.23 	mailing. Other direct mail includes, but is not limited to:
19.24 	(1) direct mail pertaining to a transaction between the purchaser and addressee, 
19.25 	where the mail contains personal information specific to the addressee including, but not 
19.26 	limited to, invoices, bills, statements of account, and payroll advices;
19.27 	(2) any legally required mailings including, but not limited to, privacy notices, 
19.28 	tax reports, and stockholder reports; and
19.29 	(3) other nonpromotional direct mail delivered to existing or former shareholders, 
19.30 	customers, employees, or agents including, but not limited to, newsletters and 
19.31 	informational pieces.
19.32 	Other direct mail does not include printed materials that result from developing 
19.33 	billing information or providing any data processing service that is more than incidental to 
19.34 	producing the other direct mail.
20.1 	(b) A purchaser of other direct mail may provide the seller with either a fully 
20.2 	completed exemption certificate as described in section 297A.72 indicating that the 
20.3 	purchaser is authorized to pay any sales or use tax due on purchases made by the purchaser 
20.4 	directly to the commissioner under section 297A.89, or a fully completed exemption 
20.5 	certificate claiming an exemption for direct mail. If the purchaser provides one of the 
20.6 	exemption certificates listed, then the seller, in the absence of bad faith, is relieved of all 
20.7 	obligations to collect, pay, or remit the tax on any transaction involving other direct mail 
20.8 	to which the certificate applies. The purchaser shall source the sale to the jurisdictions to 
20.9 	which the other direct mail is to be delivered to the recipients of the mail, and shall report 
20.10 	and pay any applicable tax due.
20.11 	(c) If the purchaser does not provide the seller with a fully completed exemption 
20.12 	certificate claiming either exemption listed in paragraph (b), the sale shall be sourced 
20.13 	according to subdivision 2, paragraph (d).

20.14 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
20.15 	June 30, 2011.

20.16 	Sec. 7. Minnesota Statutes 2010, section 297A.68, subdivision 5, is amended to read:
20.17 		Subd. 5.Capital equipment. (a) Capital equipment is exempt. The tax must be 
20.18 	imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and 
20.19 	then refunded in the manner provided in section 297A.75.
20.20 	"Capital equipment" means machinery and equipment purchased or leased, and used 
20.21 	in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, 
20.22 	or refining tangible personal property to be sold ultimately at retail if the machinery and 
20.23 	equipment are essential to the integrated production process of manufacturing, fabricating, 
20.24 	mining, or refining. Capital equipment also includes machinery and equipment 
20.25 	used primarily to electronically transmit results retrieved by a customer of an online 
20.26 	computerized data retrieval system.
20.27 	(b) Capital equipment includes, but is not limited to:
20.28 	(1) machinery and equipment used to operate, control, or regulate the production 
20.29 	equipment;
20.30 	(2) machinery and equipment used for research and development, design, quality 
20.31 	control, and testing activities;
20.32 	(3) environmental control devices that are used to maintain conditions such as 
20.33 	temperature, humidity, light, or air pressure when those conditions are essential to and are 
20.34 	part of the production process;
20.35 	(4) materials and supplies used to construct and install machinery or equipment;
21.1 	(5) repair and replacement parts, including accessories, whether purchased as spare 
21.2 	parts, repair parts, or as upgrades or modifications to machinery or equipment;
21.3 	(6) materials used for foundations that support machinery or equipment;
21.4 	(7) materials used to construct and install special purpose buildings used in the 
21.5 	production process;
21.6 	(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed 
21.7 	as part of the delivery process regardless if mounted on a chassis, repair parts for 
21.8 	ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
21.9 	(9) machinery or equipment used for research, development, design, or production 
21.10 	of computer software.
21.11 	(c) Capital equipment does not include the following:
21.12 	(1) motor vehicles taxed under chapter 297B;
21.13 	(2) machinery or equipment used to receive or store raw materials;
21.14 	(3) building materials, except for materials included in paragraph (b), clauses (6) 
21.15 	and (7);
21.16 	(4) machinery or equipment used for nonproduction purposes, including, but not 
21.17 	limited to, the following: plant security, fire prevention, first aid, and hospital stations; 
21.18 	support operations or administration; pollution control; and plant cleaning, disposal of 
21.19 	scrap and waste, plant communications, space heating, cooling, lighting, or safety;
21.20 	(5) farm machinery and aquaculture production equipment as defined by section 
21.21 	297A.61, subdivisions 12 and 13;
21.22 	(6) machinery or equipment purchased and installed by a contractor as part of an 
21.23 	improvement to real property;
21.24 	(7) machinery and equipment used by restaurants in the furnishing, preparing, or 
21.25 	serving of prepared foods as defined in section 297A.61, subdivision 31;
21.26 	(8) machinery and equipment used to furnish the services listed in section 297A.61, 
21.27 	subdivision 3, paragraph (g), clause (6), items (i) to (vi) and (viii);
21.28 	(9) machinery or equipment used in the transportation, transmission, or distribution 
21.29 	of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, 
21.30 	tanks, mains, or other means of transporting those products. This clause does not apply to 
21.31 	machinery or equipment used to blend petroleum or biodiesel fuel as defined in section 
21.32 	239.77; or
21.33 	(10) any other item that is not essential to the integrated process of manufacturing, 
21.34 	fabricating, mining, or refining.
21.35 	(d) For purposes of this subdivision:
22.1 	(1) "Equipment" means independent devices or tools separate from machinery but 
22.2 	essential to an integrated production process, including computers and computer software, 
22.3 	used in operating, controlling, or regulating machinery and equipment; and any subunit or 
22.4 	assembly comprising a component of any machinery or accessory or attachment parts of 
22.5 	machinery, such as tools, dies, jigs, patterns, and molds.
22.6 	(2) "Fabricating" means to make, build, create, produce, or assemble components or 
22.7 	property to work in a new or different manner.
22.8 	(3) "Integrated production process" means a process or series of operations through 
22.9 	which tangible personal property is manufactured, fabricated, mined, or refined. For 
22.10 	purposes of this clause, (i) manufacturing begins with the removal of raw materials 
22.11 	from inventory and ends when the last process prior to loading for shipment has been 
22.12 	completed; (ii) fabricating begins with the removal from storage or inventory of the 
22.13 	property to be assembled, processed, altered, or modified and ends with the creation 
22.14 	or production of the new or changed product; (iii) mining begins with the removal of 
22.15 	overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and 
22.16 	ends when the last process before stockpiling is completed; and (iv) refining begins with 
22.17 	the removal from inventory or storage of a natural resource and ends with the conversion 
22.18 	of the item to its completed form.
22.19 	(4) "Machinery" means mechanical, electronic, or electrical devices, including 
22.20 	computers and computer software, that are purchased or constructed to be used for the 
22.21 	activities set forth in paragraph (a), beginning with the removal of raw materials from 
22.22 	inventory through completion of the product, including packaging of the product.
22.23 	(5) "Machinery and equipment used for pollution control" means machinery and 
22.24 	equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity 
22.25 	described in paragraph (a).
22.26 	(6) "Manufacturing" means an operation or series of operations where raw materials 
22.27 	are changed in form, composition, or condition by machinery and equipment and which 
22.28 	results in the production of a new article of tangible personal property. For purposes of 
22.29 	this subdivision, "manufacturing" includes the generation of electricity or steam to be 
22.30 	sold at retail.
22.31 	(7) "Mining" means the extraction of minerals, ores, stone, or peat.
22.32 	(8) "Online data retrieval system" means a system whose cumulation of information 
22.33 	is equally available and accessible to all its customers.
22.34 	(9) "Primarily" means machinery and equipment used 50 percent or more of the time 
22.35 	in an activity described in paragraph (a).
23.1 	(10) "Refining" means the process of converting a natural resource to an intermediate 
23.2 	or finished product, including the treatment of water to be sold at retail.
23.3 	(11) This subdivision does not apply to telecommunications equipment as 
23.4 	provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit 
23.5 	for telecommunications services.

23.6 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
23.7 	June 30, 2013.

23.8 	Sec. 8. Minnesota Statutes 2010, section 297A.70, subdivision 3, is amended to read:
23.9 		Subd. 3.Sales of certain goods and services to government. (a) The following 
23.10 	sales to or use by the specified governments and political subdivisions of the state are 
23.11 	exempt:
23.12 	(1) repair and replacement parts for emergency rescue vehicles, fire trucks, and 
23.13 	fire apparatus to a political subdivision;
23.14 	(2) machinery and equipment, except for motor vehicles, used directly for mixed 
23.15 	municipal solid waste management services at a solid waste disposal facility as defined in 
23.16 	section 115A.03, subdivision 10;
23.17 	(3) chore and homemaking services to a political subdivision of the state to be 
23.18 	provided to elderly or disabled individuals;
23.19 	(4) telephone services to the Office of Enterprise Technology that are used to provide 
23.20 	telecommunications services through the enterprise technology revolving fund;
23.21 	(5) firefighter personal protective equipment as defined in paragraph (b), if purchased 
23.22 	or authorized by and for the use of an organized fire department, fire protection district, or 
23.23 	fire company regularly charged with the responsibility of providing fire protection to the 
23.24 	state or a political subdivision;
23.25 	(6) bullet-resistant body armor that provides the wearer with ballistic and trauma 
23.26 	protection, if purchased by a law enforcement agency of the state or a political subdivision 
23.27 	of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;
23.28 	(7) motor vehicles purchased or leased by political subdivisions of the state if the 
23.29 	vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b), 
23.30 	exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax 
23.31 	under section 297B.03, clause (12);
23.32 	(8) equipment designed to process, dewater, and recycle biosolids for wastewater 
23.33 	treatment facilities of political subdivisions, and materials incidental to installation of 
23.34 	that equipment;
24.1 	(9) sales to a town of gravel and of machinery, equipment, and accessories, except 
24.2 	motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of 
24.3 	motor vehicles exempt from tax under section 297B.03, clause (10);
24.4 	(10) the removal of trees, bushes, or shrubs for the construction and maintenance 
24.5 	of roads, trails, or firebreaks when purchased by an agency of the state or a political 
24.6 	subdivision of the state; and
24.7 	(11) purchases by the Metropolitan Council or the Department of Transportation of 
24.8 	vehicles and repair parts to equip operations provided for in section 174.90, including, but 
24.9 	not limited to, the Northstar Corridor Rail project.; and
24.10 	(12) purchases of water used directly in providing public safety services by an 
24.11 	organized fire department, fire protection district, or fire company regularly charged with 
24.12 	the responsibility of providing fire protection to the state or a political subdivision.
24.13 	(b) For purposes of this subdivision, "firefighters personal protective equipment" 
24.14 	means helmets, including face shields, chin straps, and neck liners; bunker coats and 
24.15 	pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; 
24.16 	protective coveralls; goggles; self-contained breathing apparatus; canister filter masks; 
24.17 	personal alert safety systems; spanner belts; optical or thermal imaging search devices; 
24.18 	and all safety equipment required by the Occupational Safety and Health Administration.
24.19 	(c) For purchases of items listed in paragraph (a), clause (11), the tax must be 
24.20 	imposed and collected as if the rate under section 297A.62, subdivision 1, applied and 
24.21 	then refunded in the manner provided in section 297A.75.

24.22 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
24.23 	made after June 30, 2007; however, no refunds may be made for amounts already paid on 
24.24 	water purchased between June 30, 2007, and January 30, 2010.

24.25 	Sec. 9. Minnesota Statutes 2010, section 297A.75, is amended to read:
24.26 	297A.75 REFUND; APPROPRIATION.
24.27 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the 
24.28 	following exempt items must be imposed and collected as if the sale were taxable and the 
24.29 	rate under section 297A.62, subdivision 1, applied. The exempt items include:
24.30 	(1) capital equipment exempt under section 297A.68, subdivision 5;
24.31 	(2) (1) building materials for an agricultural processing facility exempt under section 
24.32 	297A.71, subdivision 13;
24.33 	(3) (2) building materials for mineral production facilities exempt under section 
24.34 	297A.71, subdivision 14;
25.1 	(4) (3) building materials for correctional facilities under section 297A.71, 
25.2 	subdivision 3;
25.3 	(5) (4) building materials used in a residence for disabled veterans exempt under 
25.4 	section 297A.71, subdivision 11;
25.5 	(6) (5) elevators and building materials exempt under section 297A.71, subdivision 
25.6 	12;
25.7 	(7) (6) building materials for the Long Lake Conservation Center exempt under 
25.8 	section 297A.71, subdivision 17;
25.9 	(8) (7) materials and supplies for qualified low-income housing under section 
25.10 	297A.71, subdivision 23;
25.11 	(9) (8) materials, supplies, and equipment for municipal electric utility facilities 
25.12 	under section 297A.71, subdivision 35;
25.13 	(10) (9) equipment and materials used for the generation, transmission, and 
25.14 	distribution of electrical energy and an aerial camera package exempt under section 
25.15 	297A.68, subdivision 37;
25.16 	(11) (10) tangible personal property and taxable services and construction materials, 
25.17 	supplies, and equipment exempt under section 297A.68, subdivision 41;
25.18 	(12) (11) commuter rail vehicle and repair parts under section 297A.70, subdivision 
25.19 	3, clause (11);
25.20 	(13) (12) materials, supplies, and equipment for construction or improvement of 
25.21 	projects and facilities under section 297A.71, subdivision 40;
25.22 	(14) (13) materials, supplies, and equipment for construction or improvement of a 
25.23 	meat processing facility exempt under section 297A.71, subdivision 41; and
25.24 	(15) (14) materials, supplies, and equipment for construction, improvement, or 
25.25 	expansion of an aerospace defense manufacturing facility exempt under section 297A.71, 
25.26 	subdivision 42.
25.27 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
25.28 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 
25.29 	must be paid to the applicant. Only the following persons may apply for the refund:
25.30 	(1) for subdivision 1, clauses (1) to (3) and (2), the applicant must be the purchaser;
25.31 	(2) for subdivision 1, clauses (4) (3) and (7) (6), the applicant must be the 
25.32 	governmental subdivision;
25.33 	(3) for subdivision 1, clause (5) (4), the applicant must be the recipient of the 
25.34 	benefits provided in United States Code, title 38, chapter 21;
25.35 	(4) for subdivision 1, clause (6) (5), the applicant must be the owner of the 
25.36 	homestead property;
26.1 	(5) for subdivision 1, clause (8) (7), the owner of the qualified low-income housing 
26.2 	project;
26.3 	(6) for subdivision 1, clause (9) (8), the applicant must be a municipal electric utility 
26.4 	or a joint venture of municipal electric utilities;
26.5 	(7) for subdivision 1, clauses  (9), (10), (11), (13), and (14), and (15), the owner 
26.6 	of the qualifying business; and
26.7 	(8) for subdivision 1, clauses (11) and  (12) and (13), the applicant must be the 
26.8 	governmental entity that owns or contracts for the project or facility.
26.9 		Subd. 3.Application. (a) The application must include sufficient information 
26.10 	to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 
26.11 	subcontractor, or builder, under subdivision 1, clause (3), (4), (5), (6), (7), (8), (9), (10), 
26.12 	(11), (12), (13),  or (14), or (15), the contractor, subcontractor, or builder must furnish to 
26.13 	the refund applicant a statement including the cost of the exempt items and the taxes paid 
26.14 	on the items unless otherwise specifically provided by this subdivision. The provisions of 
26.15 	sections 289A.40 and 289A.50 apply to refunds under this section.
26.16 	(b) An applicant may not file more than two applications per calendar year for 
26.17 	refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
26.18 	(c) (b) Total refunds for purchases of items in section 297A.71, subdivision 40, 
26.19 	must not exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for 
26.20 	purchases of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 
26.21 	297A.71, subdivision 40, must not be filed until after June 30, 2009.
26.22 		Subd. 4.Interest. Interest must be paid on the refund at the rate in section 270C.405 
26.23 	from 90 days after the refund claim is filed with the commissioner for taxes paid under 
26.24 	subdivision 1.
26.25 		Subd. 5.Appropriation. The amount required to make the refunds is annually 
26.26 	appropriated to the commissioner.

26.27 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
26.28 	June 30, 2013.

26.29 	Sec. 10. BUDGET ADJUSTMENT.
 26.30 	Upon implementation of section 7, the commissioner of management and budget 
26.31 	shall reduce the base budget of the Department of Revenue by $140,000, beginning in 
26.32 	fiscal year 2015.

26.33 	Sec. 11.  REPEALER.
 26.34 	Minnesota Statutes 2010, section 289A.60, subdivision 31, is repealed.

27.1 	EFFECTIVE DATE. This section is effective for taxes due and payable after 
27.2 	July 1, 2011.

27.3 	ARTICLE 3
27.4 	ECONOMIC DEVELOPMENT

27.5 	Section 1. [116W.25] CITATION.
27.6 	Sections 116W.26 to 116W.34 may be cited as the "Minnesota science and 
27.7 	technology program." 

27.8 	Sec. 2. [116W.26] DEFINITIONS.
27.9 		Subdivision 1.Applicability. For the purposes of sections 116W.26 to 116W.34, 
27.10 	the terms in this section have the meanings given them. 
27.11 		Subd. 2.Authority. "Authority" means the Minnesota Science and Technology 
27.12 	Authority established under this chapter. 
27.13 		Subd. 3.College or university. "College or university" means an institution of 
27.14 	postsecondary education, public or private, that grants undergraduate or postgraduate 
27.15 	academic degrees, conducts significant research or development activities in the areas of 
27.16 	science and technology.
27.17 		Subd. 4.Commercialization. "Commercialization" means any of the full spectrum 
27.18 	of activities required for a new technology, product, or process to be developed from 
27.19 	its basic research of conceptual stage through applied research or development to the 
27.20 	marketplace including, without limitation, the steps leading up to and including licensure, 
27.21 	sales, and services.
27.22 		Subd. 5.Commercialized research project. "Commercialized research project" 
27.23 	means research conducted within a college or university or nonprofit research institution 
27.24 	or by a qualified science and technology company that has shown advanced commercial 
27.25 	potential through license agreements, patents, or other forms of invention disclosure, and 
27.26 	by which a qualified science and technology company has been or is being currently 
27.27 	formed. 
27.28 		Subd. 6.Fund. "Fund" means the Minnesota science and technology fund.
27.29 		Subd. 7.Nonprofit research institution. "Nonprofit research institution" means an 
27.30 	entity with its principle place of business in Minnesota, that qualifies under section 501(c) 
27.31 	of the Internal Revenue Code, and that conducts significant research or development 
27.32 	activities in this state in the areas of science and technology.
27.33 		Subd. 8.Program. "Program" means the Minnesota science and technology 
27.34 	program.
28.1 		Subd. 9.Qualified science and technology company. "Qualified science and 
28.2 	technology company" means a corporation, limited liability company, S corporation, 
28.3 	partnership, limited liability partnership, or sole proprietorship with fewer than 100 
28.4 	employees that is engaged in research, development, or production of science or 
28.5 	technology in this state including, without limitation, research, development, or production 
28.6 	directed toward developing or providing science and technology products, processes, or 
28.7 	services for specific commercial or public purposes.

28.8 	Sec. 3. [116W.27] MINNESOTA SCIENCE AND TECHNOLOGY FUND.
28.9 	(a) A Minnesota science and technology fund is created in the state treasury. The 
28.10 	fund is a direct-appropriated special revenue fund. Money of the authority must be 
28.11 	paid to the commissioner of management and budget as agent of the authority and the 
28.12 	commissioner shall not commingle the money with other money. The money in the fund 
28.13 	must be paid out only on warrants drawn by the commissioner of management and budget 
28.14 	on requisition of the executive director of the authority or designee.
28.15 	(b) $1,500,000 is appropriated per year for fiscal years 2012 and 2013, and 
28.16 	$3,500,000 in each fiscal year thereafter, from the general fund to the Minnesota science 
28.17 	and technology fund.

28.18 	Sec. 4. [116W.28] MINNESOTA SCIENCE AND TECHNOLOGY FUND; 
28.19 	AUTHORIZED USES.
28.20 	The Minnesota science and technology fund may be used for the following to:
28.21 	(1) establish the commercialized research program authorized under section 
28.22 	116W.29;
28.23 	(2) establish the federal research and development support program under section 
28.24 	116W.30;
28.25 	(3) establish the industry technology and competitiveness program under section 
28.26 	116W.31; and 
28.27 	(4) carry out the powers of the authority authorized under sections 116W.04 and 
28.28 	116W.32 that are in support of the programs in clauses (1) to (3).

28.29 	Sec. 5. [116W.29] COMMERCIALIZED RESEARCH PROGRAM.
28.30 	(a) The authority may establish a commercialized research program. The purpose of 
28.31 	the program is to accelerate the commercialization of science and technology products, 
28.32 	processes, or services from colleges or universities, nonprofit research institutions or 
29.1 	qualified science and technology companies that lead to an increase in science and 
29.2 	technology businesses and jobs. The program shall:
29.3 	(1) provide science and technology gap funding of up to $250,000 per science and 
29.4 	technology research project to assist in the commercialization and transfer of science and 
29.5 	technology research projects from a college or university or nonprofit research institution 
29.6 	to a qualified science and technology company; and
29.7 	(2) provide funding of up to $250,000 for early stage development for qualified 
29.8 	science and technology companies to conduct commercialized research projects.
29.9 	(b) All activities under the commercialized research program must require:
29.10 	(1) written criteria set by the authority for the application, award, and use of the 
29.11 	funds;
29.12 	(2) matching funds by the participating qualified science and technology company, 
29.13 	college or university, or nonprofit research institution;
29.14 	(3) no more than 15 percent of the funds awarded by the authority may be used 
29.15 	for overhead costs; and
29.16 	(4) a report by the participating qualified science and technology company, college 
29.17 	or university, or nonprofit research institution that provides documentation of the use of 
29.18 	funds and outcomes of the award. The report must be submitted to the authority within 
29.19 	one calendar year of the date of the award.

29.20 	Sec. 6. [116W.30] FEDERAL RESEARCH AND DEVELOPMENT SUPPORT 
29.21 	PROGRAM.
29.22 	The authority may establish a federal research and development support program. 
29.23 	The purpose of the program is to increase and coordinate efforts to procure federal funding 
29.24 	for research projects of primary benefit to qualified science and technology companies, 
29.25 	colleges or universities, and nonprofit research institutions. The program shall:
29.26 	(1) develop and execute a strategy to identify specific federal agencies and programs 
29.27 	that support the growth of science and technology industries in this state; and
29.28 	(2) provide grants to qualified science and technology companies:
29.29 	(i) to assist in the development of federal Small Business Innovation (SBIR) or 
29.30 	Small Business Technology Transfer (STTR) proposals; and
29.31 	(ii) to match funds received through SBIR or STTR awards. No more than 
29.32 	$1,500,000 may be awarded in a year for matching grants under this clause.

29.33 	Sec. 7. [116W.31] INDUSTRY INNOVATION AND COMPETITIVENESS 
29.34 	PROGRAM.
30.1 	(a) The authority may establish an industry technology and competitiveness program. 
30.2 	The purpose of the program is to advance the technological capacity and competitiveness 
30.3 	of existing and emerging science and technology industries. The program shall:
30.4 	(1) provide matching funds to programs and organizations that assist entrepreneurs 
30.5 	in starting and growing qualified science and technology companies including, but not 
30.6 	limited to, matching funds for mentoring programs, consulting and technical services, 
30.7 	and related activities;
30.8 	(2) fund initiatives that retain engineering, science, technology, and mathematical 
30.9 	occupations in the state including, but not limited to, internships, mentoring, and support 
30.10 	of industry and professional organizations; and
30.11 	(3) fund initiatives that support the growth of targeted industry clusters and the 
30.12 	competitiveness of existing qualified science and technology companies in developing 
30.13 	and marketing new products and services.
30.14 	(b) All activities under the industry innovation and competitiveness program shall 
30.15 	require:
30.16 	(i) written criteria set by the authority for the application, award, and use of the funds;
30.17 	(ii) matching funds by the participating qualified science and technology company, 
30.18 	college or university, or nonprofit research institution; and
30.19 	(iii) a report by the participating qualified science and technology company, college 
30.20 	or university, or nonprofit research institution providing documentation on the use of the 
30.21 	funds and outcomes of the award. The report must be submitted to the authority within 
30.22 	one calendar year from the date of the award.

30.23 	Sec. 8. [116W.32] MINNESOTA SCIENCE AND TECHNOLOGY AUTHORITY; 
30.24 	POWERS UNDER FUND.
30.25 		Subdivision 1.General powers. The authority shall have all of the powers 
30.26 	necessary to carry out the purposes and provisions of sections 116W.26 to 116W.34, 
30.27 	including, but not limited to, those provided under section 116W.04 and the following:
30.28 	(1) The authority may make awards in the forms of grants or loans, and charge and 
30.29 	receive a reasonable interest for the loans, or take an equity position in form of stock, a 
30.30 	convertible note, or other securities in consideration of an award. Interests, revenues, or 
30.31 	other proceeds received as a result of a transaction authorized by use of this fund shall be 
30.32 	deposited to the corpus of the fund and used in the same manner as the corpus of the fund.
30.33 	(2) In awarding money from the fund, priority shall be given to proposals from 
30.34 	qualified science and technology companies that have demonstrable economic benefit to 
31.1 	the state in terms of the formation of a new private sector business entity, the creation of 
31.2 	jobs, or the attraction of federal and private funding.
31.3 	(3) In awarding money from the fund, priority shall be given to proposals from 
31.4 	colleges or universities and nonprofit research institutions that:
31.5 	(i) promote collaboration between any combination of colleges or universities, 
31.6 	nonprofit research institutions, and private industry;
31.7 	(ii) enhance existing research superiority by attracting new research entities, 
31.8 	research talent, or resources to the state; and
31.9 	(iii) create new research superiority that attracts significant researchers and resources 
31.10 	from outside the state.
31.11 	(4) Subject to the limits in this clause, money within the fund may be used 
31.12 	for reasonable administrative expenses by the authority including staffing and direct 
31.13 	operational expenses, and professional fees for accounting, legal, and other technical 
31.14 	services required to carry out the intent of the program and administration of the fund. 
31.15 	Administrative expenses may not exceed five percent of the first $5,000,000 in the fund 
31.16 	and two percent of any amount in excess of $5,000,000.
31.17 	(5) Before making an award, the authority shall enter into a written agreement with 
31.18 	the entity receiving the award that specifies the uses of the award.
31.19 	(6) If the award recipient has not used the award received for the purposes intended, 
31.20 	as of the date provided in the agreement, the recipient shall repay that amount and any 
31.21 	interest applicable under the agreement to the authority. All repayments must be deposited 
31.22 	to the corpus of the fund.
31.23 		Subd. 2.Rules. The authority may adopt rules to implement the programs 
31.24 	authorized under sections 116W.29 to 116W.31.

31.25 	Sec. 9. [116W.33] REPAYMENT.
31.26 	An entity must repay all or a portion of the amount of any award, grant, loan, or 
31.27 	financial assistance of any type paid by the authority under sections 116W.29 to 116W.32 
31.28 	if the entity relocates outside the state or ceases operation in Minnesota within three years 
31.29 	from the date the authority provided the financial award. If the entity relocates outside of 
31.30 	this state or ceases operation in Minnesota within two years of the financial award, the 
31.31 	entity must repay 100 percent of the award. If the entity relocates or ceases operation in 
31.32 	Minnesota after a period of two years but before three years from the date of the financial 
31.33 	award, the entity must repay 75 percent of the financial award. 

31.34 	Sec. 10. [116W.34] EXPIRATION.
32.1 	Sections 116W.26 to 116W.33 expire on the expiration date of the authority under 
32.2 	section 116W.03, subdivision 7. Any unused money in the fund shall be deposited in the 
32.3 	general fund.

32.4 	Sec. 11. Minnesota Statutes 2010, section 469.1763, subdivision 2, is amended to read:
32.5 		Subd. 2. Expenditures outside district. (a) For each tax increment financing 
32.6 	district, an amount equal to at least 75 percent of the total revenue derived from tax 
32.7 	increments paid by properties in the district must be expended on activities in the district 
32.8 	or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities 
32.9 	in the district or to pay, or secure payment of, debt service on credit enhanced bonds. 
32.10 	For districts, other than redevelopment districts for which the request for certification 
32.11 	was made after June 30, 1995, the in-district percentage for purposes of the preceding 
32.12 	sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax 
32.13 	increments paid by properties in the district may be expended, through a development fund 
32.14 	or otherwise, on activities outside of the district but within the defined geographic area of 
32.15 	the project except to pay, or secure payment of, debt service on credit enhanced bonds. 
32.16 	For districts, other than redevelopment districts for which the request for certification was 
32.17 	made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is 
32.18 	20 percent. The revenue derived from tax increments for the district that are expended on 
32.19 	costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before 
32.20 	calculating the percentages that must be expended within and without the district. 
32.21 	(b) In the case of a housing district, a housing project, as defined in section 469.174, 
32.22 	subdivision 11, is an activity in the district. 
32.23 	(c) All administrative expenses are for activities outside of the district, except that 
32.24 	if the only expenses for activities outside of the district under this subdivision are for 
32.25 	the purposes described in paragraph (d), administrative expenses will be considered as 
32.26 	expenditures for activities in the district. 
32.27 	(d) The authority may elect, in the tax increment financing plan for the district, 
32.28 	to increase by up to ten percentage points the permitted amount of expenditures for 
32.29 	activities located outside the geographic area of the district under paragraph (a). As 
32.30 	permitted by section 469.176, subdivision 4k, the expenditures, including the permitted 
32.31 	expenditures under paragraph (a), need not be made within the geographic area of the 
32.32 	project. Expenditures that meet the requirements of this paragraph are legally permitted 
32.33 	expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j. 
32.34 	To qualify for the increase under this paragraph, the expenditures must: 
33.1 	(1) be used exclusively to assist housing that meets the requirement for a qualified 
33.2 	low-income building, as that term is used in section 42 of the Internal Revenue Code; and
33.3 	(2) not exceed the qualified basis of the housing, as defined under section 42(c) of 
33.4 	the Internal Revenue Code, less the amount of any credit allowed under section 42 of 
33.5 	the Internal Revenue Code; and 
33.6 	(3) be used to: 
33.7 	(i) acquire and prepare the site of the housing; 
33.8 	(ii) acquire, construct, or rehabilitate the housing; or 
33.9 	(iii) make public improvements directly related to the housing.; or
33.10 	(4) be used to develop housing:
33.11 	(i) if the market value of the housing does not exceed the lesser of:
33.12 	(A) 150 percent of the average market of single-family homes in that municipality; or
33.13 	(B) $200,000 for municipalities located in the metropolitan area, as defined in 
33.14 	section 473.121, or $125,000 for all other municipalities; and
33.15 	(ii) if the expenditures are used to pay the cost of site acquisition, relocation, 
33.16 	demolition of existing structures, site preparation, and pollution abatement on one or 
33.17 	more parcels, if the parcel:
33.18 	(A) contains a residence containing one to four family dwelling units that has been 
33.19 	vacant for six or more months;
33.20 	(B) contains a residence containing one to four family dwelling units that is 
33.21 	structurally substandard, as defined in section 469.174, subdivision 10;
33.22 	(C) is in foreclosure as defined in section 325N.10, subdivision 7, but without regard 
33.23 	to whether the residence is the owner's principal residence, and a notice of pendency of the 
33.24 	foreclosure has been recorded under section 580.032, except a notice of pendency is not 
33.25 	required for a delinquency or default that relates to a contract for deed payment; or
33.26 	(D) is a vacant site, if the authority uses the parcel in connection with the 
33.27 	development or redevelopment of a parcel qualifying under subitems (A) to (C).
33.28 	(e) For a district created within a biotechnology and health sciences industry zone 
33.29 	as defined in section 469.330, subdivision 6, or for an existing district located within 
33.30 	such a zone, tax increment derived from such a district may be expended outside of the 
33.31 	district but within the zone only for expenditures required for the construction of public 
33.32 	infrastructure necessary to support the activities of the zone, land acquisition, and other 
33.33 	redevelopment costs as defined in section 469.176, subdivision 4j. These expenditures are 
33.34 	considered as expenditures for activities within the district. 
33.35 	(f) The authority under paragraph (d), clause (4), expires on December 31, 2016. 
33.36 	Increments may continue to be expended under this authority after that date, if they are 
34.1 	used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph 
34.2 	(a), if December 31, 2016, is considered to be the last date of the five-year period after 
34.3 	certification under that provision.

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

34.7 	Sec. 12. Laws 2010, chapter 389, article 7, section 22, is amended to read:
34.8 	Sec. 22. CITY OF RAMSEY; TAX INCREMENT FINANCING DISTRICT; 
34.9 	SPECIAL RULES.
 34.10 	(a) If the city of Ramsey or an authority of the city elects upon the adoption of a tax 
34.11 	increment financing plan for a district, the rules under this section apply to a redevelopment 
34.12 	tax increment financing district established by the city or an authority of the city. The 
34.13 	redevelopment tax increment district includes parcels within the area bounded on the east 
34.14 	by Ramsey Boulevard, on the north by Bunker Lake Boulevard as extended west to Llama 
34.15 	Street, on the west by Llama Street, and on the south by a line running parallel to and 
34.16 	600 feet south of the southerly right-of-way for U.S. Highway 10, but including Parcels 
34.17 	28-32-25-43-0007 and 28-32-25-34-0002 in their entirety, and excluding the Anoka 
34.18 	County Regional Park property in its entirety. A parcel within this area that is included in 
34.19 	a tax increment financing district that was certified before the date of enactment of this act 
34.20 	may be included in the district created under this act if the initial district is decertified.
34.21 	(b) The requirements for qualifying a redevelopment tax increment district under 
34.22 	Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located 
34.23 	within the district.
34.24 	(c) In addition to the costs permitted by Minnesota Statutes, section 469.176, 
34.25 	subdivision 4j, does not apply to the district. Eligible expenditures within the district 
34.26 	include but are not limited to (1) the city's share of the costs necessary to provide for 
34.27 	the construction of the Northstar Transit Station and related infrastructure, including 
34.28 	structured parking, a pedestrian overpass, and roadway improvements, (2) the cost of 
34.29 	land acquired by the city or the housing and redevelopment authority in and for the city 
34.30 	of Ramsey within the district prior to the establishment of the district, and (3) the cost 
34.31 	of public improvements installed within the tax increment financing district prior to the 
34.32 	establishment of the district.
34.33 	(d) The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that 
34.34 	activities must be undertaken within a five-year period from the date of certification of a 
35.1 	tax increment financing district, is considered to be met for the district if the activities 
35.2 	were undertaken within ten years from the date of certification of the district.
35.3 	(e) Except for administrative expenses, the in-district percentage for purposes of 
35.4 	the restriction on pooling under Minnesota Statutes, section 469.1763, subdivision 2, for 
35.5 	this district is 100 percent.
35.6 	(f) The four-year period under Minnesota Statutes, section 469.176, subdivision 
35.7 	6, is extended to six years for the district.

35.8 	EFFECTIVE DATE. This section is effective upon approval by the governing 
35.9 	body of the city of Ramsey, and upon compliance by the city with Minnesota Statutes, 
35.10 	section 645.021, subdivision 3.

35.11 	Sec. 13. CITY OF LINO LAKES; TAX INCREMENT FINANCING.
 35.12 		Subdivision 1.Duration of district. Notwithstanding the provisions of Minnesota 
35.13 	Statutes, section 469.176, subdivision 1b, the city of Lino Lakes may collect tax 
35.14 	increments from tax increment financing district no. 1-10 through December 31, 2023, 
35.15 	subject to the conditions in subdivision 2.
35.16 		Subd. 2.Conditions for extension. All tax increments remaining in the account 
35.17 	for the district after February 1, 2011, and all tax increments collected thereafter, must 
35.18 	be used only to pay debt service on bonds issued to finance the interchange of Anoka 
35.19 	County Highway 23 and marked Interstate Highway 35W, bonds issued to finance public 
35.20 	improvements serving the development known as Legacy at Woods Edge, and any bonds 
35.21 	issued to refund those bonds. Minnesota Statutes, sections 469.176, subdivision 4c, and 
35.22 	469.1763 do not apply to expenditures made under this section.

35.23 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
35.24 	body of the city of Lino Lakes with the requirements of Minnesota Statutes, sections 
35.25 	469.1782, subdivision 2, and 645.021, subdivision 3.

35.26 	Sec. 14. CITY OF TAYLORS FALLS; BORDER CITY DEVELOPMENT ZONE.
 35.27 		Subdivision 1.Authorization. The governing body of the city of Taylors Falls may 
35.28 	designate all or any part of the city as a border city development zone.
35.29 		Subd. 2.Application of general law. (a) Minnesota Statutes, sections 469.1731 to 
35.30 	469.1735, apply to the border city development zones designated under this section. The 
35.31 	governing body of the city may exercise the powers granted under Minnesota Statutes, 
35.32 	sections 469.1731 to 469.1735, including powers that apply outside of the zones.
36.1 	(b) The allocation under subdivision 3 for purposes of Minnesota Statutes, section 
36.2 	469.1735, subdivision 2, is appropriated to the commissioner of revenue.
36.3 		Subd. 3.Allocation of state tax reductions. (a) The cumulative total amount of the 
36.4 	state portion of the tax reductions for all years of the program under Minnesota Statutes, 
36.5 	sections 469.1731 to 469.1735, for the city of Taylors Falls, is limited to $100,000.
36.6 	(b) This allocation may be used for tax reductions provided in Minnesota Statutes, 
36.7 	section 469.1732 or 469.1734, or for reimbursements under Minnesota Statutes, section 
36.8 	469.1735, subdivision 3, but only if the governing body of the city of Taylors Falls 
36.9 	determines that the tax reduction or offset is necessary to enable a business to expand 
36.10 	within the city or to attract a business to the city.
36.11 	(c) The commissioner of revenue may waive the limit under this subdivision using 
36.12 	the same rules and standards provided in Minnesota Statutes, section 469.169, subdivision 
36.13 	12, paragraph (b).

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

36.15 	ARTICLE 4
36.16 	LOCAL TAXES

36.17 	Section 1. Minnesota Statutes 2010, section 297A.99, subdivision 1, is amended to 
36.18 	read:
36.19 		Subdivision 1.Authorization; scope. (a) A political subdivision of this state may 
36.20 	impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) if 
36.21 	permitted by special law enacted prior to May 20, 2008, or (4) if the political subdivision 
36.22 	enacted and imposed the tax before January 1, 1982, and its predecessor provision.
36.23 	(b) This section governs the imposition of a general sales tax by the political 
36.24 	subdivision. The provisions of this section preempt the provisions of any special law:
36.25 	(1) enacted before June 2, 1997, or
36.26 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
36.27 	provision from this section's rules by reference.
36.28 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
36.29 	special excise tax on motor vehicles.
36.30 	(d) Until after May 31, 2010 2013, a political subdivision may not advertise, 
36.31 	promote, expend funds, or hold a referendum to support imposing a local option sales tax 
36.32 	unless it is for extension of an existing tax or the tax was authorized by a special law 
36.33 	enacted prior to May 20, 2008 May 24, 2011.

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

37.1 	Sec. 2. Minnesota Statutes 2010, section 298.75, is amended by adding a subdivision 
37.2 	to read:
37.3 		Subd. 12.Tax may be imposed; Pope County. (a) If Pope County does not 
37.4 	impose a tax under this section and approves imposition of the tax under this subdivision, 
37.5 	Glenwood Township in Pope County may impose the aggregate materials tax under this 
37.6 	section.
37.7 	(b) For purposes of exercising the powers contained in this section, the "township" is 
37.8 	deemed to be the "county."
37.9 	(c) All provisions in this section apply to Glenwood Township, except that all 
37.10 	proceeds of the tax must be retained by the township and used for the purposes described 
37.11 	in subdivision 7.
37.12 	(d) If Pope County imposes an aggregate materials tax under this section, the tax 
37.13 	imposed by Glenwood Township under this subdivision is repealed on the effective date 
37.14 	of the Pope County tax.

37.15 	EFFECTIVE DATE. This section is effective the day after the governing body 
37.16 	of Glenwood Township and its chief clerical officer comply with section 645.021, 
37.17 	subdivisions 2 and 3.

37.18 	Sec. 3. Minnesota Statutes 2010, section 473.757, subdivision 2, is amended to read:
37.19 		Subd. 2.Youth sports; library. To the extent funds are available from collections 
37.20 	of the tax authorized by subdivision 10 after payment each year of debt service on the 
37.21 	bonds authorized and issued under subdivision 9 and payments for the purposes described 
37.22 	in subdivision 1, the county may also authorize, by resolution, and expend or make 
37.23 	grants to the authority and to other governmental units and nonprofit organizations in an 
37.24 	aggregate amount of up to $4,000,000 annually, increased by up to 1.5 percent annually
37.25 	to fund equally: (1) youth activities and youth and amateur sports within Hennepin 
37.26 	County; and (2) the cost of extending the hours of operation of Hennepin County libraries 
37.27 	and Minneapolis public libraries.
37.28 	The money provided under this subdivision is intended to supplement and not 
37.29 	supplant county expenditures for these purposes as of May 27, 2006.
37.30 	Hennepin County must provide reports to the chairs of the committees and budget 
37.31 	divisions in the senate and the house of representatives that have jurisdiction over 
37.32 	education policy and funding, describing the uses of the money provided under this 
37.33 	subdivision. The first report must be made by January 15, 2009, and subsequent reports 
37.34 	must be made on January 15 of each subsequent odd-numbered year.

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

38.2 	Sec. 4. Minnesota Statutes 2010, section 473.757, subdivision 11, is amended to read:
38.3 		Subd. 11.Uses of tax. (a) Revenues received from the tax imposed under 
38.4 	subdivision 10 may be used:
38.5 	(1) to pay costs of collection;
38.6 	(2) to pay or reimburse or secure the payment of any principal of, premium, or 
38.7 	interest on bonds issued in accordance with this act;
38.8 	(3) to pay costs and make expenditures and grants described in this section, including 
38.9 	financing costs related to them;
38.10 	(4) to maintain reserves for the foregoing purposes deemed reasonable and 
38.11 	appropriate by the county;
38.12 	(5) to pay for operating costs of the ballpark authority other than the cost of 
38.13 	operating or maintaining the ballpark; and
38.14 	(6) to make expenditures and grants for youth activities and amateur sports and 
38.15 	extension of library hours as described in subdivision 2;
38.16 	and for no other purpose.
38.17 	(b) Revenues from the tax designated for use under paragraph (a), clause (5), must 
38.18 	be deposited in the operating fund of the ballpark authority.
38.19 	(c) After completion of the ballpark and public infrastructure, the tax revenues not 
38.20 	required for current payments of the expenditures described in paragraph (a), clauses (1) to 
38.21 	(6), shall be used to (i) redeem or defease the bonds and (ii) prepay or establish a fund for 
38.22 	payment of future obligations under grants or other commitments for future expenditures 
38.23 	which are permitted by this section paragraph (a), clauses (1) to (5), but no additional tax 
38.24 	revenues may be deposited in the fund when its balance exceeds $20,000,000. Upon the 
38.25 	redemption or defeasance of the bonds and the establishment of reserves adequate to meet 
38.26 	such future obligations, the taxes shall terminate and shall not be reimposed.

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

38.28 	Sec. 5. Laws 1996, chapter 471, article 2, section 29, subdivision 1, as amended by 
38.29 	Laws 2006, chapter 259, article 3, section 3, is amended to read:
38.30 		Subdivision 1.Sales tax authorized. (a) Notwithstanding Minnesota Statutes, 
38.31 	section 477A.016, or any other contrary provision of law, ordinance, or city charter, the 
38.32 	city of Hermantown may, by ordinance, impose an additional sales tax of up to one 
38.33 	percent on sales transactions taxable pursuant to Minnesota Statutes, chapter 297A, that 
39.1 	occur within the city. The proceeds of the tax imposed under this section must be used to 
39.2 	meet the costs of:
39.3 	(1) extending a sewer interceptor line; 
39.4 	(2) construction of a booster pump station, reservoirs, and related improvements 
39.5 	to the water system; and
39.6 	(3) construction of a building containing a police and fire station and an 
39.7 	administrative services facility.
39.8 	(b) If the city imposed a sales tax of only one-half of one percent under paragraph 
39.9 	(a), it may increase the tax to one percent to fund the purposes under paragraph (a) 
39.10 	provided it is approved by the voters at a general election held before December 31, 2012.

39.11 	EFFECTIVE DATE. This section is effective the day following compliance by the 
39.12 	city of Hermantown with Minnesota Statutes, section 645.021, subdivision 3.

39.13 	Sec. 6. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by 
39.14 	Laws 2005, First Special Session chapter 3, article 5, section 28, is amended to read:
39.15 		Subd. 3.Use of revenues. (a) Revenues received from the taxes authorized by 
39.16 	subdivisions 1 and 2 must be used by the city to pay for the cost of collecting and 
39.17 	administering the taxes and to pay for the following projects:
39.18 	(1) transportation infrastructure improvements including regional highway and 
39.19 	airport improvements;
39.20 	(2) improvements to the civic center complex;
39.21 	(3) a municipal water, sewer, and storm sewer project necessary to improve regional 
39.22 	ground water quality; and
39.23 	(4) construction of a regional recreation and sports center and other higher education 
39.24 	facilities available for both community and student use.
39.25 	(b) The total amount of capital expenditures or bonds for these projects listed in 
39.26 	paragraph (a) that may be paid from the revenues raised from the taxes authorized in this 
39.27 	section may not exceed $111,500,000. The total amount of capital expenditures or bonds 
39.28 	for the project in clause (4) that may be paid from the revenues raised from the taxes 
39.29 	authorized in this section may not exceed $28,000,000.
39.30 	(c) In addition to the projects authorized in paragraph (a) and not subject to the 
39.31 	amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an 
39.32 	election under subdivision 5, paragraph (c), use the revenues received from the taxes and 
39.33 	bonds authorized in this section to pay the costs of or bonds for the following purposes:
39.34 	(1) $17,000,000 for capital expenditures and bonds for the following Olmsted 
39.35 	County transportation infrastructure improvements:
40.1 	(i) County State Aid Highway 34 reconstruction;
40.2 	(ii) Trunk Highway 63 and County State Aid Highway 16 interchange; 
40.3 	(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 
40.4 	interchange;
40.5 	(iv) widening of County State Aid Highway 22 West Circle Drive; and 
40.6 	(v) 60th Avenue Northwest corridor preservation;
40.7 	(2) $30,000,000 for city transportation projects including:
40.8 	(i) Trunk Highway 52 and 65th Street interchange;
40.9 	(ii) NW transportation corridor acquisition; 
40.10 	(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
40.11 	(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
40.12 	(v) Southeast transportation corridor acquisition;
40.13 	(vi) Rochester International Airport expansion; and 
40.14 	(vii) a transit operations center bus facility;
40.15 	(3) $14,000,000 for the Minnesota Rochester academic and complementary facilities;
40.16 	(4) $6,500,000 for the Rochester Community Center and Technical College/Winona 
40.17 	State University career technical education and science and math facilities;
40.18 	(5) $6,000,000 for the Rochester Community Center and Technical College regional 
40.19 	recreation facilities at University Center Rochester;
40.20 	(6) $20,000,000 for the Destination Medical Community Initiative; and
40.21 	(7) $8,000,000 for the regional public safety and 911 dispatch center facilities.
40.22 	(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1 
40.23 	and 2 may be used to fund transportation improvements related to a railroad bypass that 
40.24 	would divert traffic from the city of Rochester.

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

40.26 	Sec. 7. Laws 1998, chapter 389, article 8, section 43, subdivision 4, as amended by 
40.27 	Laws 2005, First Special Session chapter 3, article 5, section 29, is amended to read:
40.28 		Subd. 4.Bonding authority. (a) The city may issue bonds under Minnesota 
40.29 	Statutes, chapter 475, to finance the capital expenditure and improvement projects. 
40.30 	An election to approve up to $71,500,000 in bonds under Minnesota Statutes, section 
40.31 	475.58, may be held in combination with the election to authorize imposition of the tax 
40.32 	under subdivision 1. Whether to permit imposition of the tax and issuance of bonds 
40.33 	may be posed to the voters as a single question. The question must state that the sales 
40.34 	tax revenues are pledged to pay the bonds, but that the bonds are general obligations 
40.35 	and will be guaranteed by the city's property taxes. An election to approve up to an 
41.1 	additional $40,000,000 of bonds under Minnesota Statutes, section 475.58, may be held 
41.2 	in combination with the election to authorize extension of the tax under subdivision 5, 
41.3 	paragraph (b). An election to approve bonds under Minnesota Statutes, section 475.58, 
41.4 	in an amount not to exceed $101,500,000 plus an amount equal to the costs of issuance 
41.5 	of the bonds, may be held in combination with the election to authorize the extension of 
41.6 	the tax under subdivision 5, paragraph (c).
41.7 	(b) The city may shall enter into an agreement with Olmsted County under which the 
41.8 	city and the county agree to jointly undertake and finance certain roadway infrastructure 
41.9 	improvements. The agreement may shall provide that the city will make available to the 
41.10 	county a portion of the sales tax revenues collected pursuant to the authority granted in 
41.11 	this section and the bonding authority provided in this subdivision. The county may, 
41.12 	pursuant to the agreement, issue its general obligation bonds in a principal amount not 
41.13 	exceeding the amount authorized by its agreement with the city payable primarily from 
41.14 	the sales tax revenues from the city under the agreement. The county's bonds must be 
41.15 	issued in accordance with the provisions of Minnesota Statutes, chapter 475, except that 
41.16 	no election is required for the issuance of the bonds and the bonds are not included in 
41.17 	the net debt of the county.
41.18 	(b) (c) The issuance of bonds under this subdivision is not subject to Minnesota 
41.19 	Statutes, section 275.60.
41.20 	(c) (d)  The bonds are not included in computing any debt limitation applicable to the 
41.21 	city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
41.22 	and interest on the bonds is not subject to any levy limitation.
41.23 	(e) The aggregate principal amount of bonds, plus the aggregate of the taxes used 
41.24 	directly to pay eligible capital expenditures and improvements for projects listed in 
41.25 	subdivision 3, paragraph (a), may not exceed $111,500,000, plus an amount equal to the 
41.26 	costs related to issuance of the bonds. The aggregate principal amount of bonds plus the 
41.27 	aggregate of the taxes used directly to pay the costs of eligible projects under subdivision 
41.28 	3, paragraph (c), may not exceed $101,500,000 plus an amount equal to the costs of 
41.29 	issuance of the bonds.
41.30 	(d) (f) The taxes may be pledged to and used for the payment of the bonds and 
41.31 	any bonds issued to refund them, only if the bonds and any refunding bonds are general 
41.32 	obligations of the city.

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

41.34 	Sec. 8. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by 
41.35 	Laws 2005, First Special Session chapter 3, article 5, section 30, is amended to read:
42.1 		Subd. 5.Termination of taxes. (a) The taxes imposed under subdivisions 1 and 
42.2 	2 expire at the later of (1) December 31, 2009, or (2) when the city council determines 
42.3 	that sufficient funds have been received from the taxes to finance the first $71,500,000 
42.4 	of capital expenditures and bonds for the projects authorized in subdivision 3, including 
42.5 	the amount to prepay or retire at maturity the principal, interest, and premium due on any 
42.6 	bonds issued for the projects under subdivision 4, unless the taxes are extended as allowed 
42.7 	in paragraph (b). Any funds remaining after completion of the project and retirement or 
42.8 	redemption of the bonds shall also be used to fund the projects under subdivision 3. The 
42.9 	taxes imposed under subdivisions 1 and 2 may expire at an earlier time if the city so 
42.10 	determines by ordinance.
42.11 	(b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 
42.12 	other contrary provision of law, ordinance, or city charter, the city of Rochester may, by 
42.13 	ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009, 
42.14 	if approved by the voters of the city at a special election in 2005 or the general election in 
42.15 	2006. The question put to the voters must indicate that an affirmative vote would allow 
42.16 	up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000 
42.17 	of bonds to be issued above the amount authorized in the June 23, 1998, referendum for 
42.18 	the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are 
42.19 	extended under this paragraph, the taxes expire when the city council determines that 
42.20 	sufficient funds have been received from the taxes to finance the projects and to prepay 
42.21 	or retire at maturity the principal, interest, and premium due on any bonds issued for the 
42.22 	projects under subdivision 4. Any funds remaining after completion of the project and 
42.23 	retirement or redemption of the bonds may be placed in the general fund of the city.
42.24 	(c) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 
42.25 	other contrary provision of law, ordinance, or city charter, the city of Rochester may, by 
42.26 	ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond the date the city 
42.27 	council determines that sufficient funds have been received from the taxes to finance 
42.28 	$111,500,000 of expenditures and bonds for the projects authorized in subdivision 3, 
42.29 	paragraph (a), plus an amount equal to the costs of issuance of the bonds and including 
42.30 	the amount to prepay or retire at maturity the principal, interest, and premiums due on 
42.31 	any bonds issued for the projects under subdivision 4, paragraph (a), if approved by the 
42.32 	voters of the city at the general election in 2012. If the election to authorize the additional 
42.33 	$101,500,000 of bonds plus an amount equal to the costs of the issuance of the bonds is 
42.34 	placed on the general election ballot in 2012, the city may continue to collect the taxes 
42.35 	authorized in subdivisions 1 and 2 until December 31, 2012. The question put to the 
42.36 	voters must indicate that an affirmative vote would allow sales tax revenues be raised for 
43.1 	an extended period of time and an additional $101,500,000 of bonds plus an amount 
43.2 	equal to the costs of issuance of the bonds, to be issued above the amount authorized in 
43.3 	the previous elections required under paragraphs (a) and (b) for the projects and amounts 
43.4 	specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended 
43.5 	under this paragraph, the taxes expire when the city council determines that $101,500,000 
43.6 	has been received from the taxes to finance the projects plus an amount sufficient to 
43.7 	prepay or retire at maturity the principal, interest, and premium due on any bonds issued 
43.8 	for the projects under subdivision 4, including any bonds issued to refund the bonds. Any 
43.9 	funds remaining after completion of the projects and retirement or redemption of the 
43.10 	bonds may be placed in the general fund of the city.

43.11 	EFFECTIVE DATE. This section is effective the day after compliance by the 
43.12 	governing body of the city of Rochester with Minnesota Statutes, section 645.021, 
43.13 	subdivision 3.

43.14 	Sec. 9. Laws 2008, chapter 366, article 7, section 19, subdivision 3, is amended to read:
43.15 		Subd. 3.Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99, 
43.16 	subdivision 3, paragraph (b), the proceeds of the tax imposed under this section shall be 
43.17 	used to pay for the costs of acquisition, construction, improvement, and development of 
43.18 	a regional parks, bicycle trails, park land, open space, and pedestrian bridge walkways, 
43.19 	as described in the city improvement plan adopted by the city council by resolution on 
43.20 	December 12, 2006, and land and buildings for a community and recreation center. The 
43.21 	total amount of revenues from the taxes in subdivisions 1 and 2 that may be used to fund 
43.22 	these projects is $12,000,000 plus any associated bond costs.

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

43.26 	Sec. 10. CITY OF CLOQUET; TAXES AUTHORIZED.
 43.27 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
43.28 	297A.99, subdivision 1, 477A.016, or any other provision of law, ordinance, or city 
43.29 	charter, if approved by the voters pursuant to Minnesota Statutes, section 297A.99, the 
43.30 	city of Cloquet may impose by ordinance a sales and use tax of up to one-half of one 
43.31 	percent for the purposes specified in subdivision 3. Except as provided in this section, the 
43.32 	provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 
43.33 	collection, and enforcement of the tax authorized under this subdivision.
44.1 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
44.2 	297A.99, subdivision 1, 477A.016, or any other provision of law, ordinance, or city 
44.3 	charter, the city of Cloquet may impose by ordinance, for the purposes specified in 
44.4 	subdivision 3, an excise tax of up to $20 per motor vehicle, as defined by ordinance, 
44.5 	purchased or acquired from any person engaged within the city in the business of selling 
44.6 	motor vehicles at retail.
44.7 		Subd. 3.Use of revenues. Revenues received from taxes authorized by subdivisions 
44.8 	1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for the 
44.9 	following projects:
44.10 	(1) $4,500,000 for construction and completion of park improvement projects, 
44.11 	including St. Louis River riverfront improvements; Veteran's Park construction and 
44.12 	improvements; improvements to the Hilltop Park soccer complex and Braun Park baseball 
44.13 	complex; capital equipment and building and grounds improvements at the Pine Valley 
44.14 	Park/Pine Valley Hockey Arena/Cloquet Area Recreation Center; and development of 
44.15 	pedestrian trails within the city;
44.16 	(2) $5,800,00 for extension of utilities and the construction of all improvements 
44.17 	associated with the development of property adjacent to Highway 33 and Interstate 
44.18 	Highway 35, including payment of all debt service on bonds issued for these; and
44.19 	(3) $6,200,000 for engineering and construction of infrastructure improvements, 
44.20 	including, but not limited to, storm sewer, sanitary sewer, and water in areas identified as 
44.21 	part of the city's comprehensive land use plan.
44.22 	Authorized expenses include, but are not limited to, acquiring property and paying 
44.23 	construction expenses related to these improvements, and paying debt service on bonds or 
44.24 	other obligations issued to finance acquisition and construction of these improvements.
44.25 		Subd. 4.Bonding authority. (a) The city may issue bonds under Minnesota 
44.26 	Statutes, chapter 475, to pay capital and administrative expenses for the improvements 
44.27 	described in subdivision 3 in an amount that does not exceed $16,500,000. An election to 
44.28 	approve the bonds under Minnesota Statutes, section 475.58, is not required.
44.29 	(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, 
44.30 	sections 275.60 and 275.61.
44.31 	(c) The debt represented by the bonds is not included in computing any debt 
44.32 	limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section 
44.33 	475.61, to pay principal of and interest on the bonds is not subject to any levy limitation.
44.34 		Subd. 5.Termination of taxes. The taxes imposed under subdivisions 1 and 2 
44.35 	expire at the earlier of (1) 30 years, or (2) when the city council determines that the amount 
44.36 	of revenues received from the taxes to finance the improvements described in subdivision 
45.1 	3 first equals or exceeds $16,500,000, plus the additional amount needed to pay the costs 
45.2 	related to issuance of bonds under subdivision 4, including interest on the bonds. Any 
45.3 	funds remaining after completion of the project and retirement or redemption of the bonds 
45.4 	may be placed in the general fund of the city.  The taxes imposed under subdivisions 1 and 
45.5 	2 may expire at an earlier time if the city so determines by ordinance.

45.6 	EFFECTIVE DATE. This section is effective the day after the governing body of 
45.7 	the city of Cloquet and its chief clerical officer timely comply with Minnesota Statutes, 
45.8 	section 645.021, subdivisions 2 and 3.

45.9 	Sec. 11. CITY OF FERGUS FALLS; SALES AND USE TAX AUTHORIZED.
 45.10 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
45.11 	297A.99, subdivision 1, or 477A.016, or any other provision of law, ordinance, or city 
45.12 	charter, as approved by the voters at the November 2, 2010 general election, the city 
45.13 	of Fergus Falls may impose by ordinance a sales and use tax of up to one-half of one 
45.14 	percent for the purposes specified in subdivision 2.  Except as provided in this section, the 
45.15 	provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 
45.16 	collection, and enforcement of the tax authorized under this subdivision.
45.17 		Subd. 2.Use of revenues. Revenues received from taxes authorized by subdivision 
45.18 	1 must be used by the city of Fergus Falls to pay the cost of collecting the tax and to pay for 
45.19 	all or part of the costs of the acquisition and betterment of a regional community ice arena 
45.20 	facility. Authorized expenses include, but are not limited to, acquiring property, predesign, 
45.21 	design, and paying construction, furnishing, and equipment costs related to the facility and 
45.22 	paying debt service on bonds or other obligations issued by the Fergus Falls Port Authority 
45.23 	to finance the facility. The amount of revenues from the tax imposed under subdivision 1 
45.24 	that may be used to finance the facility and any associated costs is limited to $6,600,000.
45.25 		Subd. 3.Termination of taxes. The tax imposed under this section expires when 
45.26 	the Fergus Falls City Council determines that sufficient funds have been received from 
45.27 	the taxes to finance the facility and to prepay or retire at maturity the principal, interest, 
45.28 	and premium due on any bonds, including refunding bonds, issued by the Fergus Falls 
45.29 	Port Authority for the facility. Any funds remaining after completion of the facility and 
45.30 	retirement or redemption of the bonds may be placed in the general fund of the city of 
45.31 	Fergus Falls. The tax imposed under subdivision 1 may expire at an earlier time if the 
45.32 	city so determines by ordinance.

46.1 	EFFECTIVE DATE. This section is effective the day after the governing body 
46.2 	of the city of Fergus Falls and its chief clerical officer timely comply with Minnesota 
46.3 	Statutes, section 645.021, subdivisions 2 and 3.

46.4 	Sec. 12. CITY OF HUTCHINSON; TAXES AUTHORIZED.
 46.5 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
46.6 	477A.016, or any other provision of law, ordinance, or city charter, as approved by 
46.7 	the voters at a referendum held at the 2010 general election, the city of Hutchinson 
46.8 	may impose by ordinance a sales and use tax of up to one-half of one percent for the 
46.9 	purposes specified in subdivision 3. Except as otherwise provided in this section, 
46.10 	Minnesota Statutes, section 297A.99, governs the imposition, administration, collection, 
46.11 	and enforcement of the tax authorized under this subdivision. Minnesota Statutes, section 
46.12 	297A.99, subdivision 1, paragraph (d), does not apply to this section.
46.13 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
46.14 	477A.016, or any other provision of law, ordinance, or city charter, the city of Hutchinson 
46.15 	may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up 
46.16 	to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person 
46.17 	engaged within the city in the business of selling motor vehicles at retail.
46.18 		Subd. 3.Use of revenues. Revenues received from the taxes authorized by this 
46.19 	section must be used to pay the cost of collecting and administering the tax and to finance 
46.20 	the costs of constructing the water treatment facility and renovating the wastewater 
46.21 	treatment facility in the city of Hutchinson. Authorized costs include, but are not limited 
46.22 	to, construction and engineering costs of the projects and associated bond costs.
46.23 		Subd. 4.Termination of tax. The taxes authorized under subdivisions 1 and 2 
46.24 	terminate at the earlier of: (1) 18 years after the date of initial imposition of the tax; or 
46.25 	(2) when the Hutchinson City Council determines that the amount of revenues raised is 
46.26 	sufficient to pay for the projects under subdivision 3, plus the amount needed to finance 
46.27 	the capital and administrative costs for the projects specified in subdivision 3, and to repay 
46.28 	or retire at maturity the principal, interest, and premium due on any bonds issued for the 
46.29 	projects. Any funds remaining after completion of the projects specified in subdivision 
46.30 	3 and retirement or redemption of the associated bonds may be placed in the general 
46.31 	fund of the city. The taxes imposed under subdivisions 1 and 2 may expire at an earlier 
46.32 	time if the city so determines by ordinance. 

46.33 	EFFECTIVE DATE. This section is effective the day after compliance by the 
46.34 	governing body of the city of Hutchinson with Minnesota Statutes, section 645.021, 
46.35 	subdivisions 2 and 3.

47.1 	Sec. 13. CITY OF LANESBORO; SALES AND USE TAX AUTHORIZED.
 47.2 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
47.3 	sections 297A.99, subdivision 1, and 477A.016, or any other provision of law, ordinance, 
47.4 	or city charter, as approved by the voters at the November 2, 2010, general election, the 
47.5 	city of Lanesboro may impose by ordinance a sales and use tax of up to one-half of one 
47.6 	percent for the purposes specified in subdivision 2. Except as provided in this section, 
47.7 	the provisions of Minnesota Statutes, section 297A.99, govern the imposition of the tax 
47.8 	authorized under this subdivision.
47.9 		Subd. 2.Use of revenues. Revenues received from the tax authorized under 
47.10 	subdivision 1 must be used by the city of Lanesboro to pay the costs of collecting the tax 
47.11 	and to pay for all or a part of the improvements to city streets and utility systems, and the 
47.12 	betterment of city municipal buildings consisting of (i) street and utility improvements to 
47.13 	Calhoun Avenue, Fillmore Avenue, Kenilworth Avenue, Pleasant Street, Kirkwood Street, 
47.14 	Auburn Avenue, and Zenith Street, and street light replacement on State Highways 250 
47.15 	and 16; (ii) improvements to utility systems consisting of wastewater treatment facility 
47.16 	improvements and electric utility improvements to the Lanesboro High Hazard Dam; and 
47.17 	(iii) improvements to the Lanesboro community center, library, and city hall, including 
47.18 	paying debt service on bonds or other obligations issued to fund these projects under 
47.19 	subdivision 3. The total amount of revenues from the taxes in subdivision 1 that may be 
47.20 	used to fund these projects is $800,000 plus any associated bond costs.
47.21 		Subd. 3.Bonding authority. The city of Lanesboro may issue bonds under 
47.22 	Minnesota Statutes, chapter 475, to pay capital and administrative expenses related to the 
47.23 	projects authorized in subdivision 2. An election to approve the bonds under Minnesota 
47.24 	Statutes, section 475.58, is not required. The issuance of bonds under this subdivision 
47.25 	is not subject to Minnesota Statutes, sections 275.60 and 275.61. The bonds are not 
47.26 	included in computing any debt limitation applicable to the city and the levy of taxes 
47.27 	under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is 
47.28 	not subject to any levy limitation.
47.29 	The aggregate principal amount of the bonds plus the aggregate of the taxes used 
47.30 	directly to pay costs of the projects listed in subdivision 2 may not exceed $800,000, plus 
47.31 	an amount equal to the costs related to issuance of the bonds and capitalized interest. 
47.32 	The taxes authorized in subdivision 1 may be pledged and used for payments of 
47.33 	the bonds and bonds issued to refund them, only if the bonds and any refunding bonds 
47.34 	are general obligations of the city.
47.35 		Subd. 4.Termination of tax. The tax imposed under subdivision 1 expires when 
47.36 	the Lanesboro City Council determines that sufficient funds have been raised from the 
48.1 	taxes to finance the projects authorized under subdivision 2 and to prepay or retire at 
48.2 	maturity the principal, interest, and premium due on any bonds issued under subdivision 3. 
48.3 	Any funds remaining after completion of the project and retirement or redemption of the 
48.4 	bonds may be placed in the general fund of the city. The tax imposed under subdivision 1 
48.5 	may expire at an earlier time if the city so determines by ordinance.

48.6 	EFFECTIVE DATE. This section is effective the day after the governing body of 
48.7 	the city of Lanesboro and its chief clerical officer comply with Minnesota Statutes, section 
48.8 	645.021, subdivisions 2 and 3.

48.9 	Sec. 14. CITY OF MARSHALL; SALES AND USE TAX.
 48.10 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
48.11 	297A.99, subdivisions 1 and 2, or 477A.016, or any other law, ordinance, or city charter, 
48.12 	the city of Marshall, if approved by the voters at a general election held within two 
48.13 	years of the date of final enactment of this section, may impose the tax authorized under 
48.14 	subdivision 2. Two separate ballot questions must be presented to the voters, one for each 
48.15 	of the two facility projects named in subdivision 3.
48.16 		Subd. 2.Sales and use tax authorized. The city of Marshall may impose by 
48.17 	ordinance a sales and use tax of up to one-half of one percent for the purposes specified in 
48.18 	subdivision 3. The provisions of Minnesota Statutes, section 297A.99, except subdivisions 
48.19 	1 and 2, govern the imposition, administration, collection, and enforcement of the tax 
48.20 	authorized under this subdivision.
48.21 		Subd. 3.Use of sales and use tax revenues. The revenues derived from the tax 
48.22 	authorized under subdivision 2 must be used by the city of Marshall to pay the costs of 
48.23 	collecting and administering the sales and use tax and to pay all or part of the costs of the 
48.24 	new and existing facilities of the Minnesota Emergency Response and Industry Training 
48.25 	Center and all or part of the costs of the new facilities of the Southwest Minnesota 
48.26 	Regional Amateur Sports Center. Authorized expenses include, but are not limited to, 
48.27 	acquiring property, predesign, design, and paying construction, furnishing, and equipment 
48.28 	costs related to these facilities and paying debt service on bonds or other obligations issued 
48.29 	by the city of Marshall under subdivision 4 to finance the capital costs of these facilities.
48.30 		Subd. 4.Bonds. (a) If the imposition of a sales and use tax is approved by the voters, 
48.31 	the city of Marshall may issue bonds under Minnesota Statutes, chapter 475, to finance all 
48.32 	or a portion of the costs of the facilities authorized in subdivision 3, and may issue bonds 
48.33 	to refund bonds previously issued. The aggregate principal amount of bonds issued under 
48.34 	this subdivision may not exceed $17,290,000, plus an amount to be applied to the payment 
49.1 	of the costs of issuing the bonds. The bonds may be paid from or secured by any funds 
49.2 	available to the city of Marshall, including the tax authorized under subdivision 2. 
49.3 	(b) The bonds are not included in computing any debt limitation applicable to the 
49.4 	city of Marshall, and any levy of taxes under Minnesota Statutes, section 475.61, to pay 
49.5 	principal and interest on the bonds, is not subject to any levy limitation. A separate 
49.6 	election to approve the bonds under Minnesota Statutes, section 475.58, is not required. 
49.7 		Subd. 5.Termination of taxes. The tax imposed under subdivision 2 expires at the 
49.8 	earlier of (1) 15 years after the tax is first imposed, or (2) when the city council determines 
49.9 	that the amount of revenues received from the tax to pay for the capital and administrative 
49.10 	costs of the facilities under subdivision 3 first equals or exceeds the amount authorized to 
49.11 	be spent for the facilities plus the additional amount needed to pay the costs related to 
49.12 	issuance of the bonds under subdivision 4, including interest on the bonds. Any funds 
49.13 	remaining after payment of all such costs and retirement or redemption of the bonds shall 
49.14 	be placed in the general fund of the city. The tax imposed under subdivision 2 may expire 
49.15 	at an earlier time if the city so determines by ordinance.

49.16 	EFFECTIVE DATE. This section is effective the day after compliance by the 
49.17 	governing body of the city of Marshall with Minnesota Statutes, section 645.021, 
49.18 	subdivision 3.

49.19 	Sec. 15. CITY OF MEDFORD; SALES AND USE TAX.
 49.20 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
49.21 	sections 297A.99, subdivision 1, and 477A.016, or any other provision of law, ordinance, 
49.22 	or city charter, if approved by the voters pursuant to Minnesota Statutes, section 297A.99, 
49.23 	at the next general election, the city of Medford may impose by ordinance a sales and use 
49.24 	tax of one-half of one percent for the purposes specified in subdivision 2. Except as 
49.25 	otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, 
49.26 	govern the imposition, administration, collection, and enforcement of the tax authorized 
49.27 	under this subdivision.
49.28 		Subd. 2.Use of revenues. The proceeds of the tax imposed under this section must 
49.29 	be used by the city of Medford to pay the costs of collecting and administering the tax 
49.30 	and to repay loans received from the Minnesota Public Facilities Authority since 2007 
49.31 	that were used to finance $4,200,000 of improvements to the city's water and wastewater 
49.32 	systems.
49.33 		Subd. 3.Termination of taxes. The tax imposed under this section expires at the 
49.34 	earlier of (1) 20 years after the date the taxes are first imposed, or (2) when the Medford 
49.35 	City Council determines that the amount of revenues received from the tax equals or 
50.1 	exceeds the sum of loans made to the city by the Minnesota Public Facilities Authority 
50.2 	as described in subdivision 2, including interest on the loans. Any funds remaining 
50.3 	after completion of the repayment of the loans may be placed in the general fund of the 
50.4 	city. The tax imposed under subdivision 1 may expire at an earlier time if the city so 
50.5 	determines by ordinance.

50.6 	EFFECTIVE DATE. This section is effective the day after compliance by the 
50.7 	governing body of the city of Medford with Minnesota Statutes, section 645.021, 
50.8 	subdivision 3.

50.9 	Sec. 16. REPORT ON THE USE OF ZIP CODES IN COLLECTING AND 
50.10 	REMITTING LOCAL SALES TAXES.
 50.11 		Subdivision 1.Report to the legislature. By March 1, 2012, the commissioner 
50.12 	of revenue shall provide a report to the chairs and ranking minority members of the 
50.13 	legislative committees with jurisdiction over local sales taxes reporting on the current use 
50.14 	of zip codes for the purposes of collecting and remitting local sales taxes, problems with 
50.15 	the current system, and suggestions for improvements.
50.16 		Subd. 2.Contents of the report. The report shall include the following information:
50.17 	(1) the current status of the department's development of a system that allows 
50.18 	vendors to identify the correct local sales tax based on a street address and the five-digit 
50.19 	zip code, as described in Minnesota Statutes, section 297A.99, subdivision 10, including a 
50.20 	list of cities and townships that impose a local sales tax or do not impose a local sales tax 
50.21 	but share a zip code with a jurisdiction in which a local sales tax is imposed for which the 
50.22 	system has not been developed;
50.23 	(2) a priority list and timeline for developing the required system outlined in 
50.24 	Minnesota Statutes, section 297A.99, subdivision 10, for the cities and townships 
50.25 	identified in clause (1);
50.26 	(3) the compliance by businesses with the requirement in Minnesota Statutes, section 
50.27 	297A.99, subdivision 10, that the tax be collected on the lowest combined rate within the 
50.28 	zip code for cities and townships identified in clause (1); 
50.29 	(4) the accuracy of the crediting and remittance of local sales taxes to the appropriate 
50.30 	taxing jurisdiction when two contiguous cities with different local sales tax authority 
50.31 	share a zip code; and 
50.32 	(5) recommendations for administrative or statutory changes to improve the accurate 
50.33 	collection and allocation of local sales tax revenues collected by the Department of 
50.34 	Revenue.

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

51.2 	ARTICLE 5
51.3 	PROPERTY TAXES

51.4 	Section 1. Minnesota Statutes 2010, section 272.02, is amended by adding a 
51.5 	subdivision to read:
51.6 		Subd. 95.Electric generation facility; personal property. (a) Notwithstanding 
51.7 	subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and other 
51.8 	personal property that is part of a multiple reciprocating engine electric generation facility 
51.9 	that adds more than 20 and less than 30 megawatts of installed capacity at a site where 
51.10 	there is presently more than ten megawatts and fewer than 15 megawatts of installed 
51.11 	capacity and that meets the requirements of this subdivision is exempt from taxation and 
51.12 	from payments in lieu of taxation. At the time of construction, the facility must:
51.13 	(1) be designed to utilize natural gas as a primary fuel;
51.14 	(2) be owned and operated by a municipal power agency as defined in section 
51.15 	453.52, subdivision 8;
51.16 	(3) be located within one mile of an existing natural gas pipeline;
51.17 	(4) be designed to have black start capability and to furnish emergency backup 
51.18 	power service to the city in which it is located;
51.19 	(5) satisfy a resource deficiency identified in an approved integrated resource plan 
51.20 	filed under section 216B.2422; and 
51.21 	(6) have received, by resolution, the approval of the governing bodies of the city 
51.22 	and county in which it is located for the exemption of personal property provided by 
51.23 	this subdivision.
51.24 	(b) Construction of the facility must be commenced after December 31, 2011, and 
51.25 	before January 1, 2015. Property eligible for this exemption does not include (i) electric 
51.26 	transmission lines and interconnections or gas pipelines and interconnections appurtenant 
51.27 	to the property or the facility; or (ii) property located on the site on the enactment date 
51.28 	of this subdivision.

51.29 	EFFECTIVE DATE. This section is effective for assessments in 2012, taxes 
51.30 	payable in 2013, and thereafter.

51.31 	Sec. 2. Minnesota Statutes 2010, section 273.121, subdivision 1, is amended to read:
51.32 		Subdivision 1.Notice. Any county assessor or city assessor having the powers of a 
51.33 	county assessor, valuing or classifying taxable real property shall in each year notify those 
52.1 	persons whose property is to be included on the assessment roll that year if the person's 
52.2 	address is known to the assessor, otherwise the occupant of the property. The notice shall 
52.3 	be in writing and shall be sent by ordinary mail at least ten days before the meeting of 
52.4 	the local board of appeal and equalization under section 274.01 or the review process 
52.5 	established under section 274.13, subdivision 1c. Upon written request by the owner of the 
52.6 	property, the assessor may send the notice in electronic form or by electronic mail instead 
52.7 	of on paper or by ordinary mail. It shall contain: (1) the market value for the current and 
52.8 	prior assessment, (2) the limited market value under section 273.11, subdivision 1a, for 
52.9 	the current and prior assessment, (3) the qualifying amount of any improvements under 
52.10 	section 273.11, subdivision 16, for the current assessment, (4) (3) the market value subject 
52.11 	to taxation after subtracting the amount of any qualifying improvements for the current 
52.12 	assessment, (5) (4) the classification of the property for the current and prior assessment, 
52.13 	(6) a note that if the property is homestead and at least 45 years old, improvements made 
52.14 	to the property may be eligible for a valuation exclusion under section 273.11, subdivision 
52.15 	16, (7) (5) the assessor's office address, and (8) (6) the dates, places, and times set for the 
52.16 	meetings of the local board of appeal and equalization, the review process established 
52.17 	under section 274.13, subdivision 1c, and the county board of appeal and equalization. If 
52.18 	the classification of the property has changed between the current and prior assessments, a 
52.19 	specific note to that effect shall be prominently listed on the statement. The commissioner 
52.20 	of revenue shall specify the form of the notice. The assessor shall attach to the assessment 
52.21 	roll a statement that the notices required by this section have been mailed. Any assessor 
52.22 	who is not provided sufficient funds from the assessor's governing body to provide such 
52.23 	notices, may make application to the commissioner of revenue to finance such notices. 
52.24 	The commissioner of revenue shall conduct an investigation and, if satisfied that the 
52.25 	assessor does not have the necessary funds, issue a certification to the commissioner 
52.26 	of management and budget of the amount necessary to provide such notices. The 
52.27 	commissioner of management and budget shall issue a warrant for such amount and shall 
52.28 	deduct such amount from any state payment to such county or municipality. The necessary 
52.29 	funds to make such payments are hereby appropriated. Failure to receive the notice shall in 
52.30 	no way affect the validity of the assessment, the resulting tax, the procedures of any board 
52.31 	of review or equalization, or the enforcement of delinquent taxes by statutory means.

52.32 	EFFECTIVE DATE. This section is effective for notifications for taxes payable in 
52.33 	2013 and thereafter.

52.34 	Sec. 3. Minnesota Statutes 2010, section 273.13, subdivision 25, is amended to read:
53.1 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more 
53.2 	units and used or held for use by the owner or by the tenants or lessees of the owner 
53.3 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
53.4 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
53.5 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
53.6 	purposes, without regard to whether the property has been platted or subdivided. The 
53.7 	market value of class 4a property has a class rate of 1.25 percent.
53.8 	(b) Class 4b includes:
53.9 	(1) residential real estate containing less than four units that does not qualify as class 
53.10 	4bb, other than seasonal residential recreational property;
53.11 	(2) manufactured homes not classified under any other provision;
53.12 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
53.13 	farm classified under subdivision 23, paragraph (b) containing two or three units; and
53.14 	(4) unimproved property that is classified residential as determined under subdivision 
53.15 	33.
53.16 	The market value of class 4b property has a class rate of 1.25 percent.
53.17 	(c) Class 4bb includes:
53.18 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
53.19 	residential recreational property; and
53.20 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
53.21 	nonhomestead farm classified under subdivision 23, paragraph (b).
53.22 	Class 4bb property has the same class rates as class 1a property under subdivision 22.
53.23 	Property that has been classified as seasonal residential recreational property at 
53.24 	any time during which it has been owned by the current owner or spouse of the current 
53.25 	owner does not qualify for class 4bb.
53.26 	(d) Class 4c property includes:
53.27 	(1) except as provided in subdivision 22, paragraph (c), real and personal property 
53.28 	devoted to commercial temporary and seasonal residential occupancy for recreation 
53.29 	purposes, including real and personal property devoted to temporary and seasonal 
53.30 	residential occupancy for recreation purposes and not devoted to commercial purposes for 
53.31 	not more than 250 days in the year preceding the year of assessment. For purposes of this 
53.32 	clause, property is devoted to a commercial purpose on a specific day if any portion of the 
53.33 	property is used for residential occupancy, and a fee is charged for residential occupancy. 
53.34 	Class 4c property under this clause must contain three or more rental units. A "rental unit" 
53.35 	is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site 
53.36 	equipped with water and electrical hookups for recreational vehicles. Class 4c property 
54.1 	under this clause must provide recreational activities such as renting ice fishing houses, 
54.2 	boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina 
54.3 	services, launch services, or guide services; or sell bait and fishing tackle. A camping pad 
54.4 	offered for rent by a property that otherwise qualifies for class 4c under this clause is also 
54.5 	class 4c under this clause regardless of the term of the rental agreement, as long as the use 
54.6 	of the camping pad does not exceed 250 days. In order for a property to be classified as 
54.7 	class 4c, seasonal residential recreational for commercial purposes under this clause, either 
54.8 	(i) the business located on the property must provide recreational activities, at least 40 
54.9 	percent of the annual gross lodging receipts related to the property must be from business 
54.10 	conducted during 90 consecutive days,  and either (i) (A) at least 60 percent of all paid 
54.11 	bookings by lodging guests during the year must be for periods of at least two consecutive 
54.12 	nights; or (ii) (B) at least 20 percent of the annual gross receipts must be from charges 
54.13 	for rental of fish houses, boats and motors, snowmobiles, downhill or cross-country ski 
54.14 	equipment, or charges for marina services, launch services, and guide services, or the sale 
54.15 	of bait and fishing tackle providing recreational activities, or (ii) the business must contain 
54.16 	20 or fewer rental units, and must be located in a township or a city with a population of 
54.17 	2,500 or less located outside the metropolitan area, as defined under section 473.121, 
54.18 	subdivision 2, that contains a portion of a state trail administered by the Department of 
54.19 	Natural Resources. For purposes of this determination item (i)(A), a paid booking of 
54.20 	five or more nights shall be counted as two bookings. Class 4c property classified under 
54.21 	this clause also includes commercial use real property used exclusively for recreational 
54.22 	purposes in conjunction with other class 4c property classified under this clause and 
54.23 	devoted to temporary and seasonal residential occupancy for recreational purposes, up to a 
54.24 	total of two acres, provided the property is not devoted to commercial recreational use for 
54.25 	more than 250 days in the year preceding the year of assessment and is located within two 
54.26 	miles of the class 4c property with which it is used. Owners of real and personal property 
54.27 	devoted to temporary and seasonal residential occupancy for recreation purposes and all 
54.28 	or a portion of which was devoted to commercial purposes for not more than 250 days in 
54.29 	the year preceding the year of assessment desiring classification as class 4c, In order for a 
54.30 	property to qualify for classification under this clause, the owner must submit a declaration 
54.31 	to the assessor designating the cabins or units occupied for 250 days or less in the year 
54.32 	preceding the year of assessment by January 15 of the assessment year. Those cabins or 
54.33 	units and a proportionate share of the land on which they are located must be designated 
54.34 	class 4c under this clause as otherwise provided. The remainder of the cabins or units and 
54.35 	a proportionate share of the land on which they are located will be designated as class 3a. 
54.36 	The owner of property desiring designation as class 4c property under this clause must 
55.1 	provide guest registers or other records demonstrating that the units for which class 4c 
55.2 	designation is sought were not occupied for more than 250 days in the year preceding the 
55.3 	assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, 
55.4 	(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility 
55.5 	operated on a commercial basis not directly related to temporary and seasonal residential 
55.6 	occupancy for recreation purposes does not qualify for class 4c. For the purposes of this 
55.7 	paragraph, "recreational activities" means renting ice fishing houses, boats and motors, 
55.8 	snowmobiles, downhill or cross-country ski equipment; providing marina services, launch 
55.9 	services, or guide services; or selling bait and fishing tackle;
55.10 	(2) qualified property used as a golf course if:
55.11 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
55.12 	dues, but a membership fee may not be required in order to use the property for golfing, 
55.13 	and its green fees for golfing must be comparable to green fees typically charged by 
55.14 	municipal courses; and
55.15 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
55.16 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
55.17 	with the golf course is classified as class 3a property;
55.18 	(3) real property up to a maximum of three acres of land owned and used by a 
55.19 	nonprofit community service oriented organization and not used for residential purposes 
55.20 	on either a temporary or permanent basis, provided that:
55.21 	(i) the property is not used for a revenue-producing activity for more than six days 
55.22 	in the calendar year preceding the year of assessment; or
55.23 	(ii) the organization makes annual charitable contributions and donations at least 
55.24 	equal to the property's previous year's property taxes and the property is allowed to be 
55.25 	used for public and community meetings or events for no charge, as appropriate to the 
55.26 	size of the facility.
55.27 	For purposes of this clause,
55.28 	(A) "charitable contributions and donations" has the same meaning as lawful 
55.29 	gambling purposes under section 349.12, subdivision 25, excluding those purposes 
55.30 	relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
55.31 	(B) "property taxes" excludes the state general tax;
55.32 	(C) a "nonprofit community service oriented organization" means any corporation, 
55.33 	society, association, foundation, or institution organized and operated exclusively for 
55.34 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
55.35 	federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 
55.36 	Revenue Code; and
56.1 	(D) "revenue-producing activities" shall include but not be limited to property or that 
56.2 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
56.3 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
56.4 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
56.5 	insurance business, or office or other space leased or rented to a lessee who conducts a 
56.6 	for-profit enterprise on the premises.
56.7 	Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use 
56.8 	of the property for social events open exclusively to members and their guests for periods 
56.9 	of less than 24 hours, when an admission is not charged nor any revenues are received by 
56.10 	the organization shall not be considered a revenue-producing activity.
56.11 	The organization shall maintain records of its charitable contributions and donations 
56.12 	and of public meetings and events held on the property and make them available upon 
56.13 	request any time to the assessor to ensure eligibility. An organization meeting the 
56.14 	requirement under item (ii) must file an application by May 1 with the assessor for 
56.15 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
56.16 	application form and instructions;
56.17 	(4) postsecondary student housing of not more than one acre of land that is owned by 
56.18 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
56.19 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
56.20 	miles of the border of a college campus;
56.21 	(5) (i) manufactured home parks as defined in section 327.14, subdivision 3, 
56.22 	excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii) 
56.23 	manufactured home parks as defined in section 327.14, subdivision 3, that are described in 
56.24 	section 273.124, subdivision 3a;
56.25 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
56.26 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
56.27 	and is located within the metropolitan area as defined in section 473.121, subdivision 2;
56.28 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
56.29 	under section 272.01, subdivision 2, and the land on which it is located, provided that:
56.30 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
56.31 	Airports Commission, or group thereof; and
56.32 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
56.33 	leased premise, prohibits commercial activity performed at the hangar.
56.34 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
56.35 	be filed by the new owner with the assessor of the county where the property is located 
56.36 	within 60 days of the sale;
57.1 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
57.2 	section 272.01, subdivision 2, and the land on which it is located, provided that:
57.3 	(i) the land abuts a public airport; and
57.4 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
57.5 	agreement restricting the use of the premises, prohibiting commercial use or activity 
57.6 	performed at the hangar; and
57.7 	(9) residential real estate, a portion of which is used by the owner for homestead 
57.8 	purposes, and that is also a place of lodging, if all of the following criteria are met:
57.9 	(i) rooms are provided for rent to transient guests that generally stay for periods 
57.10 	of 14 or fewer days;
57.11 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
57.12 	in the basic room rate;
57.13 	(iii) meals are not provided to the general public except for special events on fewer 
57.14 	than seven days in the calendar year preceding the year of the assessment; and
57.15 	(iv) the owner is the operator of the property.
57.16 	The market value subject to the 4c classification under this clause is limited to five rental 
57.17 	units. Any rental units on the property in excess of five, must be valued and assessed as 
57.18 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
57.19 	be classified as class 1a property under subdivision 22;
57.20 	(10) real property up to a maximum of three acres and operated as a restaurant 
57.21 	as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 
57.22 	as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 
57.23 	is either devoted to commercial purposes for not more than 250 consecutive days, or 
57.24 	receives at least 60 percent of its annual gross receipts from business conducted during 
57.25 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
57.26 	included in determining the property's qualification under subitem (B). The property's 
57.27 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
57.28 	sales located on the premises must be excluded. Owners of real property desiring 4c 
57.29 	classification under this clause must submit an annual declaration to the assessor by 
57.30 	February 1 of the current assessment year, based on the property's relevant information for 
57.31 	the preceding assessment year; and
57.32 	(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used 
57.33 	as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to 
57.34 	the public and devoted to recreational use for marina services. The marina owner must 
57.35 	annually provide evidence to the assessor that it provides services, including lake or river 
57.36 	access to the public by means of an access ramp or other facility that is either located on 
58.1 	the property of the marina or at a publicly owned site that abuts the property of the marina. 
58.2 	No more than 800 feet of lakeshore may be included in this classification. Buildings used 
58.3 	in conjunction with a marina for marina services, including but not limited to buildings 
58.4 	used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing 
58.5 	tackle, are classified as class 3a property; and
58.6 	(12) real and personal property devoted to noncommercial temporary and seasonal 
58.7 	residential occupancy for recreation purposes.
58.8 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) 
58.9 	each parcel of noncommercial seasonal residential recreational property not used for 
58.10 	commercial purposes under clause (12)  has the same class rates as class 4bb property, (ii) 
58.11 	manufactured home parks assessed under clause (5), item (i), have the same class rate 
58.12 	as class 4b property, and the market value of manufactured home parks assessed under 
58.13 	clause (5), item (ii), has the same class rate as class 4d property if more than 50 percent 
58.14 	of the lots in the park are occupied by shareholders in the cooperative corporation or 
58.15 	association and a class rate of one percent if 50 percent or less of the lots are so occupied, 
58.16 	(iii) commercial-use seasonal residential recreational property and marina recreational 
58.17 	land as described in clause (11), has a class rate of one percent for the first $500,000 of 
58.18 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
58.19 	property described in clause (4) has a class rate of one percent, (v) the market value of 
58.20 	property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi) 
58.21 	that portion of the market value of property in clause (9) qualifying for class 4c property 
58.22 	has a class rate of 1.25 percent.
58.23 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
58.24 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
58.25 	of the units in the building qualify as low-income rental housing units as certified under 
58.26 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
58.27 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
58.28 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
58.29 	land as the qualifying low-income rental housing units are to the total units in the building. 
58.30 	For all properties qualifying as class 4d, the market value determined by the assessor must 
58.31 	be based on the normal approach to value using normal unrestricted rents.
58.32 	Class 4d property has a class rate of 0.75 percent.

58.33 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
58.34 	thereafter.

58.35 	Sec. 4. Minnesota Statutes 2010, section 273.13, subdivision 34, is amended to read:
59.1 		Subd. 34.Homestead of disabled veteran or family caregiver. (a) All or a portion 
59.2 	of the market value of property owned by a veteran or by the veteran and theand serving 
59.3 	as the veteran's spouse qualifying for homestead classification under subdivision 22 or 23,
59.4 	is excluded in determining the property's taxable market value if it serves as the homestead 
59.5 	of a military veteran, as defined in section 197.447, who has a service-connected disability 
59.6 	of 70 percent or more as certified by the United States Department of Veterans Affairs. 
59.7 	To qualify for exclusion under this subdivision, the veteran must have been honorably 
59.8 	discharged from the United States armed forces, as indicated by United States Government 
59.9 	Form DD214 or other official military discharge papers, and must be certified by the 
59.10 	United States Veterans Administration as having a service-connected disability.
59.11 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is 
59.12 	excluded, except as provided in clause (2); and
59.13 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
59.14 	excluded.
59.15 	(c) If:
59.16 	(1) a disabled veteran qualifying for a valuation exclusion under paragraph (b), 
59.17 	clause (2),; or
59.18 	(2) a member of any branch or unit of the United States armed forces who dies due 
59.19 	to a service-connected cause while serving honorably in active service, as indicated on 
59.20 	United States Government Form DD1300 or DD2064;
59.21 	predeceases the veteran's or service member's spouse, and if upon the death of the veteran 
59.22 	or service member the spouse holds the legal or beneficial title to the homestead and 
59.23 	permanently resides there, the exclusion shall carry over to the benefit of the veteran's
59.24 	spouse for one additional assessment year the current taxes payable year and for five 
59.25 	additional taxes payable years or until such time as the spouse remarries, or sells, transfers, 
59.26 	or otherwise disposes of the property, whichever comes first.
59.27 	(d) A surviving spouse qualifying for a market valuation exclusion under paragraph 
59.28 	(c), clause (2), is eligible for the same level of benefit as that described in paragraph 
59.29 	(b), clause (2).
59.30 	(e) If a veteran meets the disability criteria of paragraph (a) but does not own 
59.31 	property classified as homestead in the state of Minnesota, then the homestead of the 
59.32 	veteran's primary family caregiver, if any, is eligible for the exclusion that the veteran 
59.33 	would otherwise qualify for under paragraph (b).
59.34 	(d) (f) In the case of an agricultural homestead, only the portion of the property 
59.35 	consisting of the house and garage and immediately surrounding one acre of land qualifies 
59.36 	for the valuation exclusion under this subdivision.
60.1 	(e) (g) A property qualifying for a valuation exclusion under this subdivision is 
60.2 	not eligible for the credit under section 273.1384, subdivision 1, or classification under 
60.3 	subdivision 22, paragraph (b).
60.4 	(f) (h) To qualify for a valuation exclusion under this subdivision a property owner 
60.5 	must apply to the assessor by July 1 of each assessment year, except that an annual 
60.6 	reapplication is not required once a property has been accepted for a valuation exclusion 
60.7 	under paragraph (a) and qualifies for the benefit described in paragraph (b), clause (2), and 
60.8 	the property continues to qualify until there is a change in ownership.
60.9 	(i) A first-time application by a qualifying spouse for the market value exclusion 
60.10 	under paragraph (c), clause (2), may be made at any time during the year of or year 
60.11 	following the death of the veteran or service member who predeceased the spouse.
60.12 	(j) For purposes of this subdivision:
60.13 	(1) "active service" has the meaning given in section 190.05;
60.14 	(2) "own" means that the person's name is present as an owner on the property deed;
60.15 	(3) "primary family caregiver" means a person who is approved by the secretary of 
60.16 	the United States Department of Veterans Affairs for assistance as the primary provider 
60.17 	of personal care services for an eligible veteran under the Program of Comprehensive 
60.18 	Assistance for Family Caregivers, as established by Public Law 111â€“163 and codified as 
60.19 	United States Code, title 38, section 1720G, as amended by Congress at any time; and
60.20 	(4) "veteran" has the meaning given the term in section 197.447.
60.21 	(k) The purpose of this provision of law providing a level of homestead property tax 
60.22 	relief for gravely disabled veterans, their primary family caregivers, and their surviving 
60.23 	spouses is to help ease the burdens of war for those among our state's citizens who bear 
60.24 	those burdens most heavily.

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

60.27 	Sec. 5. Minnesota Statutes 2010, section 275.025, subdivision 3, is amended to read:
60.28 		Subd. 3.Seasonal residential recreational tax capacity. For the purposes of this 
60.29 	section, "seasonal residential recreational tax capacity" means the tax capacity of tier III 
60.30 	of class 1c under section 273.13, subdivision 22, and all class 4c(1) and, 4c(3)(ii), and 
60.31 	4c(12) property under section 273.13, subdivision 25, except that the first $76,000 of 
60.32 	market value of each noncommercial class 4c(1) 4c(12) property has a tax capacity for this 
60.33 	purpose equal to 40 percent of its tax capacity under section 273.13.

61.1 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
61.2 	thereafter.

61.3 	Sec. 6. Minnesota Statutes 2010, section 275.066, is amended to read:
61.4 	275.066 SPECIAL TAXING DISTRICTS; DEFINITION.
61.5 	For the purposes of property taxation and property tax state aids, the term "special 
61.6 	taxing districts" includes the following entities:
61.7 	(1) watershed districts under chapter 103D;
61.8 	(2) sanitary districts under sections 115.18 to 115.37;
61.9 	(3) regional sanitary sewer districts under sections 115.61 to 115.67;
61.10 	(4) regional public library districts under section 134.201;
61.11 	(5) park districts under chapter 398;
61.12 	(6) regional railroad authorities under chapter 398A;
61.13 	(7) hospital districts under sections 447.31 to 447.38;
61.14 	(8) (7) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 
61.15 	458A.15;
61.16 	(9) (8) Duluth Transit Authority under sections 458A.21 to 458A.37;
61.17 	(10) (9) regional development commissions under sections 462.381 to 462.398;
61.18 	(11) (10) housing and redevelopment authorities under sections 469.001 to 469.047;
61.19 	(12) (11) port authorities under sections 469.048 to 469.068;
61.20 	(13) (12) economic development authorities under sections 469.090 to 469.1081;
61.21 	(14) (13) Metropolitan Council under sections 473.123 to 473.549;
61.22 	(15) (14) Metropolitan Airports Commission under sections 473.601 to 473.680;
61.23 	(16) (15) Metropolitan Mosquito Control Commission under sections 473.701 to 
61.24 	473.716;
61.25 	(17) (16) Morrison County Rural Development Financing Authority under Laws 
61.26 	1982, chapter 437, section 1;
61.27 	(18) (17) Croft Historical Park District under Laws 1984, chapter 502, article 13, 
61.28 	section 6;
61.29 	(19) (18) East Lake County Medical Clinic District under Laws 1989, chapter 211, 
61.30 	sections 1 to 6;
61.31 	(20) (19) Floodwood Area Ambulance District under Laws 1993, chapter 375, 
61.32 	article 5, section 39;
61.33 	(21) (20) Middle Mississippi River Watershed Management Organization under 
61.34 	sections 103B.211 and 103B.241;
61.35 	(22) (21) emergency medical services special taxing districts under section 144F.01;
62.1 	(23) (22) a county levying under the authority of section 103B.241, 103B.245, 
62.2 	or 103B.251;
62.3 	(24) (23) Southern St. Louis County Special Taxing District; Chris Jensen Nursing 
62.4 	Home under Laws 2003, First Special Session chapter 21, article 4, section 12;
62.5 	(25) (24) an airport authority created under section 360.0426; and
62.6 	(26) (25) any other political subdivision of the state of Minnesota, excluding 
62.7 	counties, school districts, cities, and towns, that has the power to adopt and certify a 
62.8 	property tax levy to the county auditor, as determined by the commissioner of revenue.

62.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
62.10 	thereafter.

62.11 	Sec. 7. [275.761] MAINTENANCE OF EFFORT REQUIREMENTS 
62.12 	SUSPENDED.
62.13 	(a) Notwithstanding any law to the contrary and except as provided in paragraphs 
62.14 	(b) and (c), all maintenance of effort requirements for counties, including but not limited 
62.15 	to those under sections 116L.872, 134.34, 245.4835, 245.4932, 245.714, 256F.10, and 
62.16 	256F.13, are suspended.
62.17 	(b) This section does not permit a county to suspend compliance with maintenance 
62.18 	of effort requirements to the extent that the suspension  would:
62.19 	(1) require the state to expend additional money or incur additional costs; or
62.20 	(2) cause a reduction in the receipt by the state or the county of federal funds.
62.21 	(c) The commissioner of management and budget may determine the maintenance 
62.22 	of effort requirements that are not permitted, in whole or in part, to be suspended under 
62.23 	paragraph (b). The commissioner shall publish these determinations on the department's 
62.24 	Web site and no county may suspend compliance with a maintenance of effort requirement 
62.25 	that the commissioner determines is not subject to suspension.
62.26 	(d) Notwithstanding any law to the contrary, all statutory and home rule charter cities 
62.27 	are exempt from the maintenance of effort requirements under section 134.34.

62.28 	EFFECTIVE DATE. This section is effective for maintenance of effort 
62.29 	requirements in calendar years 2012 and 2013.

62.30 	Sec. 8. Minnesota Statutes 2010, section 279.01, subdivision 1, is amended to read:
62.31 		Subdivision 1.Due dates; penalties. Except as provided in subdivision 3 or 4, on 
62.32 	May 16 or 21 days after the postmark date on the envelope containing the property tax 
62.33 	statement, whichever is later, a penalty accrues and thereafter is charged upon all unpaid 
63.1 	taxes on real estate on the current lists in the hands of the county treasurer. The penalty is 
63.2 	at a rate of two percent on homestead property until May 31 and four percent on June 1. 
63.3 	The penalty on nonhomestead property is at a rate of four percent until May 31 and eight 
63.4 	percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days after 
63.5 	the postmark date on the envelope containing the property tax statements, whichever is 
63.6 	later, on commercial use real property used for seasonal residential recreational purposes 
63.7 	and classified as class 1c or 4c, and on other commercial use real property classified as 
63.8 	class 3a, provided that over 60 percent of the gross income earned by the enterprise on the 
63.9 	class 3a property is earned during the months of May, June, July, and August. In order 
63.10 	for the first half of the tax due on class 3a property to be paid after May 15 and before 
63.11 	June 1, or 21 days after the postmark date on the envelope containing the property tax 
63.12 	statement, whichever is later, without penalty, the owner of the property must attach 
63.13 	an affidavit to the payment attesting to compliance with the income provision of this 
63.14 	subdivision. Thereafter, for both homestead and nonhomestead property, on the first day 
63.15 	of each month beginning July 1, up to and including October 1 following, an additional 
63.16 	penalty of one percent for each month accrues and is charged on all such unpaid taxes 
63.17 	provided that if the due date was extended beyond May 15 as the result of any delay in 
63.18 	mailing property tax statements no additional penalty shall accrue if the tax is paid by the 
63.19 	extended due date. If the tax is not paid by the extended due date, then all penalties that 
63.20 	would have accrued if the due date had been May 15 shall be charged. When the taxes 
63.21 	against any tract or lot exceed $100, one-half thereof may be paid prior to May 16 or 
63.22 	21 days after the postmark date on the envelope containing the property tax statement, 
63.23 	whichever is later; and, if so paid, no penalty attaches; the remaining one-half may be 
63.24 	paid at any time prior to October 16 following, without penalty; but, if not so paid, then 
63.25 	a penalty of two percent accrues thereon for homestead property and a penalty of four 
63.26 	percent on nonhomestead property. Thereafter, for homestead property, on the first day 
63.27 	of November an additional penalty of fourtwo percent accrues and on the first day of 
63.28 	December following, an additional penalty of two percent accrues and is charged on all 
63.29 	such unpaid taxes. Thereafter, for nonhomestead property, on the first day of November 
63.30 	and December following, an additional penalty of four percent for each month accrues 
63.31 	and is charged on all such unpaid taxes. If one-half of such taxes are not paid prior to 
63.32 	May 16 or 21 days after the postmark date on the envelope containing the property tax 
63.33 	statement, whichever is later, the same may be paid at any time prior to October 16, with 
63.34 	accrued penalties to the date of payment added, and thereupon no penalty attaches to the 
63.35 	remaining one-half until October 16 following.
64.1 	This section applies to payment of personal property taxes assessed against 
64.2 	improvements to leased property, except as provided by section 277.01, subdivision 3.
64.3 	A county may provide by resolution that in the case of a property owner that has 
64.4 	multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in 
64.5 	installments as provided in this subdivision.
64.6 	The county treasurer may accept payments of more or less than the exact amount of 
64.7 	a tax installment due. Payments must be applied first to the oldest installment that is due 
64.8 	but which has not been fully paid. If the accepted payment is less than the amount due, 
64.9 	payments must be applied first to the penalty accrued for the year or the installment being 
64.10 	paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum 
64.11 	payment required as a condition for filing an appeal under section 278.03 or any other law, 
64.12 	nor does it affect the order of payment of delinquent taxes under section 280.39.

64.13 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
64.14 	thereafter.

64.15 	Sec. 9. Minnesota Statutes 2010, section 398A.04, subdivision 8, is amended to read:
64.16 		Subd. 8.Taxation. Before deciding to exercise the power to tax, the authority shall 
64.17 	give six weeks' published notice in all municipalities in the region. If a number of voters 
64.18 	in the region equal to five percent of those who voted for candidates for governor at the 
64.19 	last gubernatorial election present a petition within nine weeks of the first published notice 
64.20 	to the secretary of state requesting that the matter be submitted to popular vote, it shall be 
64.21 	submitted at the next general election. The question prepared shall be:
64.22 	"Shall the regional rail authority have the power to impose a property tax?

64.23		Yes 
........		
64.24		No ........"
		
64.25 	If a majority of those voting on the question approve or if no petition is presented 
64.26 	within the prescribed time the authority may levy a tax at any annual rate not exceeding 
64.27 	0.04835 percent of market value of all taxable property situated within the municipality 
64.28 	or municipalities named in its organization resolution. Its recording officer shall file, All 
64.29 	taxes imposed for the support of the authority must be imposed by the county board and 
64.30 	included in the county budget for all purposes, including levy limits, if any. If the authority 
64.31 	consists of more than one county, the authority must determine the total levy request and 
64.32 	apportion it among the member counties as provided in the joint resolution organizing the 
64.33 	authority.On or before September 15, in the office of the county auditor of each county 
64.34 	in which territory under the jurisdiction of the authority is located a certified copy of the 
64.35 	board of commissioners' resolution levying the tax, and each county auditor shall assess 
65.1 	and extend upon the tax rolls of each municipality named in the organization resolution the 
65.2 	portion of the tax that bears the same ratio to the whole amount that the net tax capacity of 
65.3 	taxable property in that municipality bears to the net tax capacity of taxable property in 
65.4 	all municipalities named in the organization resolution. Collections of the tax shall be 
65.5 	remitted by each county treasurer to the treasurer of the authority. For taxes levied in 1991, 
65.6 	the amount levied for light rail transit purposes under this subdivision shall not exceed 75 
65.7 	percent of the amount levied in 1990 for light rail transit purposes under this subdivision.

65.8 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
65.9 	thereafter.

65.10 	Sec. 10. Minnesota Statutes 2010, section 398A.07, subdivision 2, is amended to read:
65.11 		Subd. 2.Security. Bonds may be made payable exclusively from the revenues from 
65.12 	one or more projects, or from one or more revenue producing contracts, or from the 
65.13 	authority's revenues generally, including but not limited to specified taxes which the 
65.14 	county may levy on behalf of the authority may levy or which a particular municipality 
65.15 	may agree to levy for a specified purpose, and may be additionally secured by a pledge 
65.16 	of any grant, subsidy, or contribution from any public agency, including but not limited 
65.17 	to a participating municipality, or any income or revenues from any source. They may 
65.18 	be secured by a mortgage or deed of trust of the whole or any part of the property of the 
65.19 	authority. They shall be payable solely from the revenues, funds, and property pledged or 
65.20 	mortgaged for their payment. No commissioner, officer, employee, agent, or trustee of the 
65.21 	authority shall be liable personally on its bonds or be subject to any personal liability or 
65.22 	accountability by reason of their issuance. Neither the state nor Only a county or other 
65.23 	municipality except the authority may pledge its faith and credit or taxing power or shall 
65.24 	be obligated in any manner for the payment of the bonds or interest on them, except as 
65.25 	specifically provided by agreement under section 398A.06; but nothing herein shall affect 
65.26 	the obligation of the state or municipality to perform any contract made by it with the 
65.27 	authority, and when the authority's rights under a contract with the state or a municipality 
65.28 	are pledged by the authority for the security of its bonds, the holders or a bond trustee 
65.29 	may enforce the rights as a third-party beneficiary. All bonds shall be negotiable within 
65.30 	the meaning and for the purposes of the Uniform Commercial Code, subject only to any 
65.31 	registration requirement. In the case of bonds issued by a regional rail authority prior to 
65.32 	June 1, 2011, to which the authority's levy was pledged, the county must levy whatever 
65.33 	tax is necessary to fulfill the authority's pledge under the bonds.

66.1 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
66.2 	thereafter.

66.3 	Sec. 11. REVISOR'S INSTRUCTION.
 66.4 	The revisor of statutes shall remove from Minnesota Statutes and Minnesota Rules 
66.5 	all references to the sections repealed in section 12, paragraph (b). The revisor shall also 
66.6 	remove text and calculations relating to the repealed sections.
66.7 	In sections affected by this instruction, the revisor may make changes necessary 
66.8 	to correct the punctuation, grammar, or structure of the remaining text and preserve its 
66.9 	meaning. If text in Minnesota Statutes or Minnesota Rules that is unrelated to the repealed 
66.10 	sections refers to a repealed definition, the revisor may substitute the text of the repealed 
66.11 	definition in the cross-reference.
66.12 	If the revisor requests it, the commissioner of revenue shall assist the revisor in 
66.13 	making the changes to statutes and rules necessary to accomplish the purpose of section 
66.14 	12, paragraph (b).

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

66.16 	Sec. 12.  REPEALER.
 66.17 	(a) Minnesota Statutes 2010, section 279.01, subdivision 4, is repealed.
66.18 	(b) Minnesota Statutes 2010, sections 473F.001; 473F.01; 473F.02, subdivisions 1, 2, 
66.19 	3, 4, 5, 6, 7, 8, 10, 12, 13, 14, 15, 21, 22, 23, and 24; 473F.03; 473F.05; 473F.06; 473F.07; 
66.20 	473F.08, subdivisions 1, 2, 3, 3a, 3b, 4, 5, 5a, 6, 7a, 8a, and 10; 473F.09; 473F.10; 473F.11; 
66.21 	and 473F.13, subdivision 1, are repealed.

66.22 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
66.23 	thereafter.

66.24 	ARTICLE 6
66.25 	AIDS, CREDITS, AND REFUNDS

66.26 	Section 1. Minnesota Statutes 2010, section 97A.061, subdivision 1, is amended to 
66.27 	read:
66.28 		Subdivision 1.Applicability; amount. (a) The commissioner shall annually make a 
66.29 	payment to each county having public hunting areas and game refuges. Money to make 
66.30 	the payments is annually appropriated for that purpose from the general fund. Except as 
66.31 	provided in paragraph (b), this section does not apply to state trust fund land and other 
67.1 	state land not purchased for game refuge or public hunting purposes. Except as provided 
67.2 	in paragraph (b), the payment shall be the greatest of:
67.3 	(1) 35 29.75 percent of the gross receipts from all special use permits and leases of 
67.4 	land acquired for public hunting and game refuges;
67.5 	(2) 50 42.5 cents per acre on land purchased actually used for public hunting or 
67.6 	game refuges; or
67.7 	(3) three-fourths of one.6375 percent of the appraised value of purchased land 
67.8 	actually used for public hunting and game refuges.
67.9 	(b) The payment shall be 50 percent of the dollar amount adjusted for inflation as 
67.10 	determined under section 477A.12, subdivision 1, paragraph (a), clause (1), multiplied 
67.11 	by the number of acres of land in the county that are owned by another state agency for 
67.12 	military purposes and designated as a game refuge under section 97A.085.
67.13 	(c) The payment must be reduced by the amount paid under subdivision 3 for 
67.14 	croplands managed for wild geese.
67.15 	(d) The appraised value is the purchase price for five years after acquisition. 
67.16 	The appraised value shall be determined by the county assessor every five years after 
67.17 	acquisition.

67.18 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
67.19 	2011 and thereafter.

67.20 	Sec. 2. Minnesota Statutes 2010, section 97A.061, subdivision 3, is amended to read:
67.21 		Subd. 3.Goose management croplands. (a) The commissioner shall make a 
67.22 	payment on July 1 of each year to each county where the state owns more than 1,000 acres 
67.23 	of crop land, for wild goose management purposes. The payment shall be equal to 85 
67.24 	percent of the taxes assessed on comparable, privately owned, adjacent land. Money to 
67.25 	make the payments is annually appropriated for that purpose from the general fund. The 
67.26 	county treasurer shall allocate and distribute the payment as provided in subdivision 2.
67.27 	(b) The land used for goose management under this subdivision is exempt from 
67.28 	taxation as provided in sections 272.01 and 273.19.

67.29 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
67.30 	2011 and thereafter.

67.31 	Sec. 3. Minnesota Statutes 2010, section 270A.03, subdivision 7, is amended to read:
68.1 		Subd. 7.Refund. "Refund" means an individual income tax refund or political 
68.2 	contribution refund, pursuant to chapter 290, or a property tax credit or refund, pursuant to 
68.3 	chapter 290A, or a sustainable forest tax payment to a claimant under chapter 290C.
68.4 	For purposes of this chapter, lottery prizes, as set forth in section 349A.08, 
68.5 	subdivision 8, and amounts granted to persons by the legislature on the recommendation 
68.6 	of the joint senate-house of representatives Subcommittee on Claims shall be treated 
68.7 	as refunds.
68.8 	In the case of a joint property tax refund payable to spouses under chapter 290A, 
68.9 	the refund shall be considered as belonging to each spouse in the proportion of the total 
68.10 	refund that equals each spouse's proportion of the total income determined under section 
68.11 	290A.03, subdivision 3. In the case of a joint income tax refund under chapter 289A, the 
68.12 	refund shall be considered as belonging to each spouse in the proportion of the total 
68.13 	refund that equals each spouse's proportion of the total taxable income determined under 
68.14 	section 290.01, subdivision 29. The commissioner shall remit the entire refund to the 
68.15 	claimant agency, which shall, upon the request of the spouse who does not owe the debt, 
68.16 	determine the amount of the refund belonging to that spouse and refund the amount to 
68.17 	that spouse. For court fines, fees, and surcharges and court-ordered restitution under 
68.18 	section 611A.04, subdivision 2, the notice provided by the commissioner of revenue under 
68.19 	section 270A.07, subdivision 2, paragraph (b), serves as the appropriate legal notice 
68.20 	to the spouse who does not owe the debt.

68.21 	EFFECTIVE DATE. This section is effective for refund claims based on 
68.22 	contributions made after June 30, 2011.

68.23 	Sec. 4. Minnesota Statutes 2010, section 273.13, subdivision 21b, is amended to read:
68.24 		Subd. 21b.Tax capacity. (a) Gross tax capacity means the product of the 
68.25 	appropriate gross class rates in this section and market values.
68.26 	(b) Net tax capacity means the product of the appropriate net class rates in this 
68.27 	section and market values, minus the property's tax capacity reduction determined under 
68.28 	section 273.1384, subdivision 1, if applicable.

68.29 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
68.30 	thereafter.

68.31 	Sec. 5. Minnesota Statutes 2010, section 273.1384, subdivision 1, is amended to read:
68.32 		Subdivision 1.Residential homestead market value credit tax capacity 
68.33 	reduction. Each county auditor shall determine a homestead credit tax capacity reduction
69.1 	for each class 1a, 1b, and 2a homestead property within the county equal to 0.4 percent of 
69.2 	the first $76,000 of market value of the property minus .09 percent of the market value 
69.3 	in excess of $76,000. The credit tax capacity reduction amount may not be less than 
69.4 	zero. In the case of an agricultural or resort homestead, only the market value of the 
69.5 	house, garage, and immediately surrounding one acre of land is eligible in determining 
69.6 	the property's homestead credit tax capacity reduction. In the case of a property that is 
69.7 	classified as part homestead and part nonhomestead, (i) the credit tax capacity reduction
69.8 	shall apply only to the homestead portion of the property, but (ii) if a portion of a property 
69.9 	is classified as nonhomestead solely because not all the owners occupy the property, not 
69.10 	all the owners have qualifying relatives occupying the property, or solely because not all 
69.11 	the spouses of owners occupy the property, the credit tax capacity reduction amount shall 
69.12 	be initially computed as if that nonhomestead portion were also in the homestead class and 
69.13 	then prorated to the owner-occupant's percentage of ownership. For the purpose of this 
69.14 	section, when an owner-occupant's spouse does not occupy the property, the percentage of 
69.15 	ownership for the owner-occupant spouse is one-half of the couple's ownership percentage.

69.16 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
69.17 	thereafter.

69.18 	Sec. 6. Minnesota Statutes 2010, section 273.1384, subdivision 3, is amended to read:
69.19 		Subd. 3.Credit reimbursements. The county auditor shall determine the tax 
69.20 	reductions allowed under this section subdivision 2 within the county for each taxes 
69.21 	payable year and shall certify that amount to the commissioner of revenue as a part of the 
69.22 	abstracts of tax lists submitted by the county auditors under section 275.29. Any prior 
69.23 	year adjustments shall also be certified on the abstracts of tax lists. The commissioner 
69.24 	shall review the certifications for accuracy, and may make such changes as are deemed 
69.25 	necessary, or return the certification to the county auditor for correction. The credits
69.26 	credit under this section must be used to proportionately reduce the net tax capacity-based 
69.27 	property tax payable to each local taxing jurisdiction as provided in section 273.1393.

69.28 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
69.29 	thereafter.

69.30 	Sec. 7. Minnesota Statutes 2010, section 273.1384, subdivision 4, is amended to read:
69.31 		Subd. 4.Payment. (a) The commissioner of revenue shall reimburse each local 
69.32 	taxing jurisdiction, other than school districts, for the tax reductions granted under this 
69.33 	section subdivision 2 in two equal installments on October 31 and December 26 of the 
70.1 	taxes payable year for which the reductions are granted, including in each payment 
70.2 	the prior year adjustments certified on the abstracts for that taxes payable year. The 
70.3 	reimbursements related to tax increments shall be issued in one installment each year on 
70.4 	December 26.
70.5 	(b) The commissioner of revenue shall certify the total of the tax reductions granted 
70.6 	under this section subdivision 2 for each taxes payable year within each school district to 
70.7 	the commissioner of the Department of Education and the commissioner of education shall 
70.8 	pay the reimbursement amounts to each school district as provided in section 273.1392.

70.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
70.10 	thereafter.

70.11 	Sec. 8. Minnesota Statutes 2010, section 273.1393, is amended to read:
70.12 	273.1393 COMPUTATION OF NET PROPERTY TAXES.
70.13 	Notwithstanding any other provisions to the contrary, "net" property taxes are 
70.14 	determined by subtracting the credits in the order listed from the gross tax:
70.15 	(1) disaster credit as provided in sections 273.1231 to 273.1235;
70.16 	(2) powerline credit as provided in section 273.42;
70.17 	(3) agricultural preserves credit as provided in section 473H.10;
70.18 	(4) enterprise zone credit as provided in section 469.171;
70.19 	(5) disparity reduction credit;
70.20 	(6) conservation tax credit as provided in section 273.119;
70.21 	(7) homestead and agricultural credits credit as provided in section 273.1384;
70.22 	(8) taconite homestead credit as provided in section 273.135;
70.23 	(9) supplemental homestead credit as provided in section 273.1391; and
70.24 	(10) the bovine tuberculosis zone credit, as provided in section 273.113.
70.25 	The combination of all property tax credits must not exceed the gross tax amount.

70.26 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
70.27 	thereafter.

70.28 	Sec. 9. Minnesota Statutes 2010, section 273.1398, subdivision 3, is amended to read:
70.29 		Subd. 3.Disparity reduction aid.  The amount of disparity aid certified each year 
70.30 	for each taxing district within each unique taxing jurisdiction for taxes payable in the prior 
70.31 	year shall be multiplied by the ratio of (1) the jurisdiction's tax capacity using the class 
70.32 	rates for taxes payable in the year for which aid is being computed, to (2) its tax capacity 
70.33 	using the class rates for taxes payable in the year prior to that for which aid is being 
71.1 	computed, both based upon market values for taxes payable in the year prior to that for 
71.2 	which aid is being computed. If the commissioner determines that insufficient information 
71.3 	is available to reasonably and timely calculate the numerator in this ratio for the first taxes 
71.4 	payable year that a class rate change or new class rate is effective, the commissioner 
71.5 	shall omit the effects of that class rate change or new class rate when calculating this 
71.6 	ratio for aid payable in that taxes payable year. For aid payable in the year following a 
71.7 	year for which such omission was made, the commissioner shall use in the denominator 
71.8 	for the class that was changed or created, the tax capacity for taxes payable two years 
71.9 	prior to that in which the aid is payable, based on market values for taxes payable in the 
71.10 	year prior to that for which aid is being computed is 50 percent of the amount certified 
71.11 	for taxes payable in 2011.

71.12 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
71.13 	thereafter.

71.14 	Sec. 10. Minnesota Statutes 2010, section 275.08, subdivision 1a, is amended to read:
71.15 		Subd. 1a.Computation of tax capacity. For taxes payable in 1989, the county 
71.16 	auditor shall compute the gross tax capacity for each parcel according to the class rates 
71.17 	specified in section 273.13. The gross tax capacity will be the appropriate class rate 
71.18 	multiplied by the parcel's market value. For taxes payable in 1990 and subsequent years,
71.19 	The county auditor shall compute the net tax capacity for each parcel according to the 
71.20 	class rates specified in as defined under section 273.13, subdivision 21b. The net tax 
71.21 	capacity will be the appropriate class rate multiplied by the parcel's market value. 

71.22 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
71.23 	thereafter.

71.24 	Sec. 11. Minnesota Statutes 2010, section 275.08, subdivision 1d, is amended to read:
71.25 		Subd. 1d.Additional adjustment. If, after computing each local government's 
71.26 	adjusted local tax rate within a unique taxing jurisdiction pursuant to subdivision 1c, the 
71.27 	auditor finds that the total adjusted local tax rate of all local governments combined is 
71.28 	less than 90 105 percent of gross tax capacity for taxes payable in 1989 and 90 percent
71.29 	of net tax capacity for taxes payable in 1990 and thereafter, the auditor shall increase 
71.30 	each local government's adjusted local tax rate proportionately so the total adjusted local 
71.31 	tax rate of all local governments combined equals 90 105 percent. The total amount 
71.32 	of the increase in tax resulting from the increased local tax rates must not exceed the 
71.33 	amount of disparity aid allocated to the unique taxing district under section 273.1398. The 
72.1 	auditor shall certify to the Department of Revenue the difference between the disparity 
72.2 	aid originally allocated under section 273.1398, subdivision 3, and the amount necessary 
72.3 	to reduce the total adjusted local tax rate of all local governments combined to 90 105
72.4 	percent. Each local government's disparity reduction aid payment under section 273.1398, 
72.5 	subdivision 6, must be reduced accordingly. 

72.6 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
72.7 	thereafter.

72.8 	Sec. 12. Minnesota Statutes 2010, section 276.04, subdivision 2, is amended to read:
72.9 		Subd. 2.Contents of tax statements. (a) The treasurer shall provide for the 
72.10 	printing of the tax statements. The commissioner of revenue shall prescribe the form of 
72.11 	the property tax statement and its contents. The tax statement must not state or imply 
72.12 	that property tax credits are paid by the state of Minnesota. The statement must contain 
72.13 	a tabulated statement of the dollar amount due to each taxing authority and the amount 
72.14 	of the state tax from the parcel of real property for which a particular tax statement is 
72.15 	prepared. The dollar amounts attributable to the county, the state tax, the voter approved 
72.16 	school tax, the other local school tax, the township or municipality, and the total of 
72.17 	the metropolitan special taxing districts as defined in section 275.065, subdivision 3, 
72.18 	paragraph (i), must be separately stated. The amounts due all other special taxing districts, 
72.19 	if any, may be aggregated except that any levies made by the regional rail authorities in the 
72.20 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
72.21 	398A shall be listed on a separate line directly under the appropriate county's levy. If the 
72.22 	county levy under this paragraph includes an amount for a lake improvement district as 
72.23 	defined under sections 103B.501 to 103B.581, the amount attributable for that purpose 
72.24 	must be separately stated from the remaining county levy amount. In the case of Ramsey 
72.25 	County, if the county levy under this paragraph includes an amount for public library 
72.26 	service under section 134.07, the amount attributable for that purpose may be separated 
72.27 	from the remaining county levy amount. The amount of the tax on homesteads qualifying 
72.28 	under the senior citizens' property tax deferral program under chapter 290B is the total 
72.29 	amount of property tax before subtraction of the deferred property tax amount. The 
72.30 	amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any, 
72.31 	must also be separately stated. The dollar amounts, including the dollar amount of any 
72.32 	special assessments, may be rounded to the nearest even whole dollar. For purposes of this 
72.33 	section whole odd-numbered dollars may be adjusted to the next higher even-numbered 
72.34 	dollar. The amount of market value excluded under section 273.11, subdivision 16, if any, 
72.35 	must also be listed on the tax statement.
73.1 	(b) The property tax statements for manufactured homes and sectional structures 
73.2 	taxed as personal property shall contain the same information that is required on the 
73.3 	tax statements for real property.
73.4 	(c) Real and personal property tax statements must contain the following information 
73.5 	in the order given in this paragraph. The information must contain the current year tax 
73.6 	information in the right column with the corresponding information for the previous year 
73.7 	in a column on the left:
73.8 	(1) the property's estimated market value under section 273.11, subdivision 1;
73.9 	(2) the property's taxable market value after reductions under section 273.11, 
73.10 	subdivisions 1a and 16;
73.11 	(3) the property's gross tax, before credits;
73.12 	(4) for homestead residential and agricultural properties, the credits credit under 
73.13 	section 273.1384;
73.14 	(5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 
73.15 	273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of 
73.16 	credit received under section 273.135 must be separately stated and identified as "taconite 
73.17 	tax relief"; and
73.18 	(6) the net tax payable in the manner required in paragraph (a).
73.19 	(d) If the county uses envelopes for mailing property tax statements and if the county 
73.20 	agrees, a taxing district may include a notice with the property tax statement notifying 
73.21 	taxpayers when the taxing district will begin its budget deliberations for the current 
73.22 	year, and encouraging taxpayers to attend the hearings. If the county allows notices to 
73.23 	be included in the envelope containing the property tax statement, and if more than 
73.24 	one taxing district relative to a given property decides to include a notice with the tax 
73.25 	statement, the county treasurer or auditor must coordinate the process and may combine 
73.26 	the information on a single announcement.

73.27 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
73.28 	thereafter.

73.29 	Sec. 13. Minnesota Statutes 2010, section 289A.50, subdivision 1, is amended to read:
73.30 		Subdivision 1.General right to refund. (a) Subject to the requirements of this 
73.31 	section and section 289A.40, a taxpayer who has paid a tax in excess of the taxes lawfully 
73.32 	due and who files a written claim for refund will be refunded or credited the overpayment 
73.33 	of the tax determined by the commissioner to be erroneously paid.
73.34 	(b) The claim must specify the name of the taxpayer, the date when and the period 
73.35 	for which the tax was paid, the kind of tax paid, the amount of the tax that the taxpayer 
74.1 	claims was erroneously paid, the grounds on which a refund is claimed, and other 
74.2 	information relative to the payment and in the form required by the commissioner. An 
74.3 	income tax, estate tax, or corporate franchise tax return, or amended return claiming an 
74.4 	overpayment constitutes a claim for refund.
74.5 	(c) When, in the course of an examination, and within the time for requesting a 
74.6 	refund, the commissioner determines that there has been an overpayment of tax, the 
74.7 	commissioner shall refund or credit the overpayment to the taxpayer and no demand 
74.8 	is necessary. If the overpayment exceeds $1, the amount of the overpayment must 
74.9 	be refunded to the taxpayer. If the amount of the overpayment is less than $1, the 
74.10 	commissioner is not required to refund. In these situations, the commissioner does not 
74.11 	have to make written findings or serve notice by mail to the taxpayer.
74.12 	(d) If the amount allowable as a credit for withholding, estimated taxes, or dependent 
74.13 	care exceeds the tax against which the credit is allowable, the amount of the excess is 
74.14 	considered an overpayment. The refund allowed by section 290.06, subdivision 23, is also 
74.15 	considered an overpayment. The requirements of section 270C.33 do not apply to the 
74.16 	refunding of such an overpayment shown on the original return filed by a taxpayer.
74.17 	(e) If the entertainment tax withheld at the source exceeds by $1 or more the taxes, 
74.18 	penalties, and interest reported in the return of the entertainment entity or imposed by 
74.19 	section 290.9201, the excess must be refunded to the entertainment entity. If the excess is 
74.20 	less than $1, the commissioner need not refund that amount.
74.21 	(f) If the surety deposit required for a construction contract exceeds the liability of 
74.22 	the out-of-state contractor, the commissioner shall refund the difference to the contractor.
74.23 	(g) An action of the commissioner in refunding the amount of the overpayment does 
74.24 	not constitute a determination of the correctness of the return of the taxpayer.
74.25 	(h) There is appropriated from the general fund to the commissioner of revenue the 
74.26 	amount necessary to pay refunds allowed under this section.

74.27 	EFFECTIVE DATE. This section is effective for refund claims based on 
74.28 	contributions made after June 30, 2011.

74.29 	Sec. 14. Minnesota Statutes 2010, section 290.01, subdivision 6, is amended to read:
74.30 		Subd. 6.Taxpayer. The term "taxpayer" means any person or corporation subject to 
74.31 	a tax imposed by this chapter. For purposes of section 290.06, subdivision 23, the term 
74.32 	"taxpayer" means an individual eligible to vote in Minnesota under section 201.014.

74.33 	EFFECTIVE DATE. This section is effective for refund claims based on 
74.34 	contributions made after June 30, 2011.

75.1 	Sec. 15. Minnesota Statutes 2010, section 290A.03, subdivision 11, is amended to read:
75.2 		Subd. 11.Rent constituting property taxes. "Rent constituting property taxes" 
75.3 	means 19 12 percent of the gross rent actually paid in cash, or its equivalent, or the portion 
75.4 	of rent paid in lieu of property taxes, in any calendar year by a claimant for the right 
75.5 	of occupancy of the claimant's Minnesota homestead in the calendar year, and which 
75.6 	rent constitutes the basis, in the succeeding calendar year of a claim for relief under this 
75.7 	chapter by the claimant.

75.8 	EFFECTIVE DATE. This section is effective for claims based on rent paid in 
75.9 	2010 and following years.

75.10 	Sec. 16. Minnesota Statutes 2010, section 290A.03, subdivision 13, is amended to read:
75.11 		Subd. 13.Property taxes payable. "Property taxes payable" means the property tax 
75.12 	exclusive of special assessments, penalties, and interest payable on a claimant's homestead 
75.13 	after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2, 
75.14 	and any other state paid property tax credits in any calendar year, and after any refund 
75.15 	claimed and allowable under section 290A.04, subdivision 2h, that is first payable in 
75.16 	the year that the property tax is payable. In the case of a claimant who makes ground 
75.17 	lease payments, "property taxes payable" includes the amount of the payments directly 
75.18 	attributable to the property taxes assessed against the parcel on which the house is located. 
75.19 	No apportionment or reduction of the "property taxes payable" shall be required for the 
75.20 	use of a portion of the claimant's homestead for a business purpose if the claimant does not 
75.21 	deduct any business depreciation expenses for the use of a portion of the homestead in the 
75.22 	determination of federal adjusted gross income. For homesteads which are manufactured 
75.23 	homes as defined in section 273.125, subdivision 8, and for homesteads which are park 
75.24 	trailers taxed as manufactured homes under section 168.012, subdivision 9, "property 
75.25 	taxes payable" shall also include 19 12 percent of the gross rent paid in the preceding 
75.26 	year for the site on which the homestead is located. When a homestead is owned by 
75.27 	two or more persons as joint tenants or tenants in common, such tenants shall determine 
75.28 	between them which tenant may claim the property taxes payable on the homestead. If 
75.29 	they are unable to agree, the matter shall be referred to the commissioner of revenue 
75.30 	whose decision shall be final. Property taxes are considered payable in the year prescribed 
75.31 	by law for payment of the taxes.
75.32 	In the case of a claim relating to "property taxes payable," the claimant must have 
75.33 	owned and occupied the homestead on January 2 of the year in which the tax is payable 
75.34 	and (i) the property must have been classified as homestead property pursuant to section 
75.35 	273.124, on or before December 15 of the assessment year to which the "property taxes 
76.1 	payable" relate; or (ii) the claimant must provide documentation from the local assessor 
76.2 	that application for homestead classification has been made on or before December 15 
76.3 	of the year in which the "property taxes payable" were payable and that the assessor has 
76.4 	approved the application.

76.5 	EFFECTIVE DATE. This section is effective for claims based on rent paid in 
76.6 	2010 and following years.

76.7 	Sec. 17. [373.51] ALTERNATIVE PROCESS FOR CONSOLIDATION.
76.8 	Notwithstanding the provisions relating to petitions in sections 371.02 and 371.03, 
76.9 	two or more counties may begin the process for consolidation by filing with the secretary 
76.10 	of state a resolution unanimously adopted by the board of each affected county to seek 
76.11 	voter approval for consolidation of the counties following the procedures in chapter 371. 

76.12 	Sec. 18. Minnesota Statutes 2010, section 477A.011, is amended by adding a 
76.13 	subdivision to read:
76.14 		Subd. 1c.First class city. "First class city" means a city of the first class as of 
76.15 	2009 as defined in section 410.01.

76.16 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
76.17 	2011 and thereafter.

76.18 	Sec. 19. Minnesota Statutes 2010, section 477A.0124, is amended by adding a 
76.19 	subdivision to read:
76.20 		Subd. 6.Aid payments in 2011 and 2012. Notwithstanding total aids calculated or 
76.21 	certified for 2011 under subdivisions 3, 4, and 5, for 2011 and 2012, each county shall 
76.22 	receive an aid distribution under this section equal to the lesser of (1) the total amount of 
76.23 	aid it received under this section in 2010 after the reductions under sections 477A.0133 
76.24 	and 477A.0134, or (2) the total amount the county is certified to receive in 2011 under 
76.25 	subdivisions 3 to 5.

76.26 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
76.27 	2011 and 2012.

76.28 	Sec. 20. Minnesota Statutes 2010, section 477A.013, subdivision 8, is amended to read:
76.29 		Subd. 8.City formula aid.  The formula aid for a city is equal to the sum of (1) its 
76.30 	city jobs base, (2) its small city aid base, and (3) the need increase percentage multiplied 
76.31 	by the average of its unmet need for the most recently available two years.
77.1 	No city may have a formula aid amount less than zero. The need increase percentage must 
77.2 	be the same for all cities. For first class cities, the formula aid is 25 percent of its base 
77.3 	aid as defined in subdivision 11, paragraph (a), for aids payable in 2013 and zero for aids 
77.4 	payable in 2014 and thereafter.
77.5 	The applicable need increase percentage must be calculated by the Department of 
77.6 	Revenue so that the total of the aid under subdivision 9 equals the total amount available 
77.7 	for aid under section 477A.03. Data used in calculating aids to cities under sections 
77.8 	477A.011 to 477A.013 shall be the most recently available data as of January 1 in the 
77.9 	year in which the aid is calculated except that the data used to compute "net levy" in 
77.10 	subdivision 9 is the data most recently available at the time of the aid computation.

77.11 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
77.12 	2013 and thereafter.

77.13 	Sec. 21. Minnesota Statutes 2010, section 477A.013, subdivision 9, is amended to read:
77.14 		Subd. 9.City aid distribution. (a) In calendar year 2009 and thereafter, each 
77.15 	city shall receive an aid distribution equal to the sum of (1) the city formula aid under 
77.16 	subdivision 8, and (2) its city aid base.
77.17 	(b) For aids payable in 2011 2013 only, the total aid in the previous year for any 
77.18 	city shall mean the amount of aid it was certified to receive for aids payable in 2010
77.19 	2012 under this section minus the amount of its aid reduction under section 477A.0134
77.20 	subdivision 11. For aids payable in 2012 2014 and thereafter, the total aid in the previous 
77.21 	year for any city means the amount of aid it was certified to receive under this section in 
77.22 	the previous payable year.
77.23 	(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed 
77.24 	the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution 
77.25 	plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total 
77.26 	aid for any city with a population of 2,500 or more may not be less than its total aid under 
77.27 	this section in the previous year minus the lesser of $10 multiplied by its population, or ten 
77.28 	percent of its net levy in the year prior to the aid distribution.
77.29 	(d) For aids payable in 2010 and thereafter, the total aid for a city with a population 
77.30 	less than 2,500 must not be less than the amount it was certified to receive in the 
77.31 	previous year minus the lesser of $10 multiplied by its population, or five percent of its 
77.32 	2003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a 
77.33 	population less than 2,500 must not be less than what it received under this section in the 
77.34 	previous year unless its total aid in calendar year 2008 was aid under section 477A.011, 
77.35 	subdivision 36, paragraph (s), in which case its minimum aid is zero.
78.1 	(e) A city's aid loss under this section may not exceed $300,000 in any year in 
78.2 	which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or 
78.3 	greater than the appropriation under that subdivision in the previous year, unless the 
78.4 	city has an adjustment in its city net tax capacity under the process described in section 
78.5 	469.174, subdivision 28.
78.6 	(f) If a city's net tax capacity used in calculating aid under this section has decreased 
78.7 	in any year by more than 25 percent from its net tax capacity in the previous year due to 
78.8 	property becoming tax-exempt Indian land, the city's maximum allowed aid increase 
78.9 	under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the 
78.10 	year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 
78.11 	resulting from the property becoming tax exempt.
78.12 	(g) Notwithstanding paragraphs (a) to (f), the total aid for a first class city is its 
78.13 	formula aid under subdivision 8.

78.14 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
78.15 	2013 and thereafter.

78.16 	Sec. 22. Minnesota Statutes 2010, section 477A.013, is amended by adding a 
78.17 	subdivision to read:
78.18 		Subd. 11.Aid payments in 2011 and 2012. (a) For purposes of this subdivision, 
78.19 	"base aid" means the lesser of (1) the total amount of aid it received under this section in 
78.20 	2010, after the reductions under sections 477A.0133 and 477A.0134 and reduced by the 
78.21 	amount of payments under section 477A.011, subdivision 36, paragraphs (y) and (z), or 
78.22 	(2) the amount it was certified to receive in 2011 under subdivision 9, minus any aid base 
78.23 	adjustment under section 477A.011, subdivision 36, paragraph (aa).
78.24 	(b) Notwithstanding aids calculated or certified for aids payable in 2011 under 
78.25 	subdivision 9, in 2011 each city shall receive an aid distribution under this section as 
78.26 	follows:
78.27 	(1) for a first class city, 75 percent of its base aid as defined in paragraph (a); and
78.28 	(2) for any other city, the amount it is certified to receive in 2011 under subdivision 9.
78.29 	(c) Notwithstanding aids calculated or certified for aids payable in 2012 under 
78.30 	subdivision 9, in 2012 each city shall receive an aid distribution under this section as 
78.31 	follows:
78.32 	(1) for a first class city, 50 percent of its base aid as defined in paragraph (a); and
78.33 	(2) for any other city, its base aid as defined under paragraph (a).

79.1 	EFFECTIVE DATE. This section is effective for aids payable in calendar years 
79.2 	2011 and 2012.

79.3 	Sec. 23. Minnesota Statutes 2010, section 477A.03, is amended to read:
79.4 	477A.03 APPROPRIATION.
79.5 		Subd. 2.Annual appropriation. A sum sufficient to discharge the duties imposed 
79.6 	by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the 
79.7 	commissioner of revenue.
79.8 		Subd. 2a.Cities. For aids payable in 2013 only, the total aid paid under section 
79.9 	477A.013, subdivision 9, is $318,774,184. For aids payable in 2011 2014 and thereafter, 
79.10 	the total aid paid under section 477A.013, subdivision 9, is $527,100,646 $283,292,875.
79.11 		Subd. 2b.Counties. (a) For aids payable in 2011 2013 and thereafter, the total aid 
79.12 	payable under section 477A.0124, subdivision 3, is $96,395,000 $78,218,000. Each 
79.13 	calendar year, $500,000 shall be retained by the commissioner of revenue to make 
79.14 	reimbursements to the commissioner of management and budget for payments made 
79.15 	under section 611.27. For calendar year 2004, the amount shall be in addition to the 
79.16 	payments authorized under section 477A.0124, subdivision 1. For calendar year 2005 
79.17 	and subsequent years, The amount shall be deducted from the appropriation under 
79.18 	this paragraph. The reimbursements shall be to defray the additional costs associated 
79.19 	with court-ordered counsel under section 611.27. Any retained amounts not used for 
79.20 	reimbursement in a year shall be included in the next distribution of county need aid 
79.21 	that is certified to the county auditors for the purpose of property tax reduction for the 
79.22 	next taxes payable year.
79.23 	(b) For aids payable in 2011 2013 and thereafter, the total aid under section 
79.24 	477A.0124, subdivision 4, is $101,309,575 $83,133,000. The commissioner of 
79.25 	management and budget shall bill the commissioner of revenue for the cost of preparation 
79.26 	of local impact notes as required by section 3.987, not to exceed $207,000 in fiscal year 
79.27 	2004 and thereafter. The commissioner of education shall bill the commissioner of 
79.28 	revenue for the cost of preparation of local impact notes for school districts as required by 
79.29 	section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner 
79.30 	of revenue shall deduct the amounts billed under this paragraph from the appropriation 
79.31 	under this paragraph. The amounts deducted are appropriated to the commissioner of 
79.32 	management and budget and the commissioner of education for the preparation of local 
79.33 	impact notes.

80.1 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
80.2 	2012 and thereafter.

80.3 	Sec. 24. Minnesota Statutes 2010, section 477A.11, subdivision 1, is amended to read:
80.4 		Subdivision 1.Terms. For the purpose of sections 477A.11 to 477A.145 477A.14, 
80.5 	the terms defined in this section have the meanings given them. 

80.6 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
80.7 	2011 and thereafter.

80.8 	Sec. 25. Minnesota Statutes 2010, section 477A.12, subdivision 1, is amended to read:
80.9 		Subdivision 1.Types of land; payments. (a) As an offset for expenses incurred 
80.10 	by counties and towns in support of natural resources lands, the following amounts are 
80.11 	annually appropriated to the commissioner of natural resources from the general fund for 
80.12 	transfer to the commissioner of revenue. The commissioner of revenue shall pay the 
80.13 	transferred funds to counties as required by sections 477A.11 to 477A.145 477A.14. 
80.14 	The amounts are:
80.15 	(1) for acquired natural resources land, $3, as adjusted for inflation under section 
80.16 	477A.145, $4.363 multiplied by the total number of acres of acquired natural resources 
80.17 	land or, at the county's option three-fourths of one 0.6375 percent of the appraised value of 
80.18 	all acquired natural resources land in the county, whichever is greater;
80.19 	(2) 75 cents, as adjusted for inflation under section 477A.145, $1.091 multiplied by 
80.20 	the number of acres of county-administered other natural resources land;
80.21 	(3) 75 cents, as adjusted for inflation under section 477A.145, $1.091 multiplied by 
80.22 	the total number of acres of land utilization project land; and
80.23 	(4) 37.5 cents, as adjusted for inflation under section 477A.145, 54.5 cents multiplied 
80.24 	by the number of acres of commissioner-administered other natural resources land located 
80.25 	in each county as of July 1 of each year prior to the payment year.
80.26 	(b) The amount determined under paragraph (a), clause (1), is payable for land 
80.27 	that is acquired from a private owner and owned by the Department of Transportation 
80.28 	for the purpose of replacing wetland losses caused by transportation projects, but only 
80.29 	if the county contains more than 500 acres of such land at the time the certification is 
80.30 	made under subdivision 2.

80.31 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
80.32 	2011 and thereafter.

81.1 	Sec. 26. Minnesota Statutes 2010, section 477A.14, subdivision 1, is amended to read:
81.2 		Subdivision 1.General distribution. Except as provided in subdivision 2 or in 
81.3 	section 97A.061, subdivision 5, 40 percent of the total payment to the county shall be 
81.4 	deposited in the county general revenue fund to be used to provide property tax levy 
81.5 	reduction. The remainder shall be distributed by the county in the following priority:
81.6 	(a) 37.5 cents, as adjusted for inflation under section 477A.145, 54.5 cents for 
81.7 	each acre of county-administered other natural resources land shall be deposited in a 
81.8 	resource development fund to be created within the county treasury for use in resource 
81.9 	development, forest management, game and fish habitat improvement, and recreational 
81.10 	development and maintenance of county-administered other natural resources land. Any 
81.11 	county receiving less than $5,000 annually for the resource development fund may elect to 
81.12 	deposit that amount in the county general revenue fund;
81.13 	(b) From the funds remaining, within 30 days of receipt of the payment to the 
81.14 	county, the county treasurer shall pay each organized township 30 cents, as adjusted for 
81.15 	inflation under section 477A.145, 43.6 cents for each acre of acquired natural resources 
81.16 	land and each acre of land described in section 477A.12, subdivision 1, paragraph (b), and 
81.17 	7.5 cents, as adjusted for inflation under section 477A.145, 10.9 cents for each acre of 
81.18 	other natural resources land and each acre of land utilization project land located within its 
81.19 	boundaries. Payments for natural resources lands not located in an organized township 
81.20 	shall be deposited in the county general revenue fund. Payments to counties and townships 
81.21 	pursuant to this paragraph shall be used to provide property tax levy reduction, except 
81.22 	that of the payments for natural resources lands not located in an organized township, the 
81.23 	county may allocate the amount determined to be necessary for maintenance of roads in 
81.24 	unorganized townships. Provided that, if the total payment to the county pursuant to 
81.25 	section 477A.12 is not sufficient to fully fund the distribution provided for in this clause, 
81.26 	the amount available shall be distributed to each township and the county general revenue 
81.27 	fund on a pro rata basis; and
81.28 	(c) Any remaining funds shall be deposited in the county general revenue fund. 
81.29 	Provided that, if the distribution to the county general revenue fund exceeds $35,000, the 
81.30 	excess shall be used to provide property tax levy reduction.

81.31 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
81.32 	2011 and thereafter.

82.1 	Sec. 27. Minnesota Statutes 2010, section 477A.17, is amended to read:
82.2 	477A.17 LAKE VERMILION STATE PARK AND SOUDAN 
82.3 	UNDERGROUND MINE STATE PARK; ANNUAL PAYMENTS.
82.4 	(a) Beginning in fiscal year 2012, in lieu of the payment amount provided under 
82.5 	section 477A.12, subdivision 1, clause (1), the county shall receive an annual payment for 
82.6 	land acquired for Lake Vermilion State Park, established in section 85.012, subdivision 
82.7 	38a, and land within the boundary of Soudan Underground Mine State Park, established 
82.8 	in section 85.012, subdivision 53a, equal to 1.5 1.275 percent of the appraised value of 
82.9 	the land.
82.10 	(b) For the purposes of this section, the appraised value of the land acquired for 
82.11 	Lake Vermilion State Park for the first five years after acquisition shall be the purchase 
82.12 	price of the land, plus the value of any portion of the land that is acquired by donation. 
82.13 	The appraised value must be redetermined by the county assessor every five years after 
82.14 	the land is acquired.
82.15 	(c) The annual payments under this section shall be distributed to the taxing 
82.16 	jurisdictions containing the property as follows: one-third to the school districts; one-third 
82.17 	to the town; and one-third to the county. The payment to school districts is not a county 
82.18 	apportionment under section 127A.34 and is not subject to aid recapture. Each of those 
82.19 	taxing jurisdictions may use the payments for their general purposes.
82.20 	(d) Except as provided in this section, the payments shall be made as provided 
82.21 	in sections 477A.11 to 477A.13.

82.22 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
82.23 	2011 and thereafter.

82.24 	Sec. 28. ADMINISTRATION OF PROPERTY TAX REFUND CLAIMS; 2011.
 82.25 	In administering sections 15 and 16 for claims for refunds submitted using 19 
82.26 	percent of gross rent as rent constituting property taxes under prior law, the commissioner 
82.27 	shall recalculate and pay the refund amounts using 12 percent of gross rent. The 
82.28 	commissioner shall notify the claimant that the recalculation was mandated by action 
82.29 	of the 2011 Legislature.

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

82.31 	Sec. 29. CREDIT REDUCTIONS AND LIMITATION; COUNTIES AND 
82.32 	CITIES.
 83.1 	In 2011, the market value credit reimbursement payment to each county and city 
83.2 	authorized under Minnesota Statutes, section 273.1384, subdivision 4, may not exceed the 
83.3 	reimbursement payment received by the county or city for taxes payable in 2010. 

83.4 	EFFECTIVE DATE. This section is effective for credit reimbursements in 2011.

83.5 	Sec. 30. PROPERTY TAX STATEMENT FOR TAXES PAYABLE IN 2012 ONLY.
 83.6 	For the purposes of the property tax statements required under Minnesota Statutes, 
83.7 	section 276.04, subdivision 2, for taxes payable in 2012 only, the gross tax amount shown 
83.8 	for the previous year is the gross tax minus the residential homestead market value credit.

83.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 only.

83.10 	Sec. 31. COOPERATION, CONSOLIDATION, INNOVATION GRANTS.
 83.11 		Subdivision 1.Definition. For the purposes of this section, "local government" 
83.12 	means a town, county, or home rule charter or statutory city.
83.13 		Subd. 2.Grants. The commissioner of administration may make a cooperation, 
83.14 	consolidation, and service innovation grant to a local government that is participating with 
83.15 	at least one other local government in planning for or implementing provision of services 
83.16 	cooperatively or in planning and implementing consolidation of services, functions, or 
83.17 	governance. The grants shall be made on a first-come first-served basis. The commissioner 
83.18 	shall determine the form and content of the application and grant agreements. At a 
83.19 	minimum, an application must contain a resolution adopted by the governing body of each 
83.20 	participating local government supporting the cooperation, consolidation, or innovation 
83.21 	effort that identifies the services and functions the local government is considering 
83.22 	providing cooperatively with one or more other local governments or that identifies the 
83.23 	functions the local governments seek to consolidate. The maximum grant amount is 
83.24 	$100,000 per local government.
83.25 		Subd. 3.Report. The commissioner of administration must report to the governor 
83.26 	and legislative committees with jurisdiction over local government governance and local 
83.27 	government taxes and finance on the cooperation and consolidation grants made and 
83.28 	how the money was used, what services and functions have been provided by local 
83.29 	governments in cooperation with each other, what programs or governance structures have 
83.30 	been proposed for consolidation or consolidated, and what impediments remain that 
83.31 	prevent cooperation, consolidation, and service innovation. An interim report is due 
83.32 	February 1, 2012, and a final report is due December 15, 2012.
84.1 		Subd. 4.Appropriation. $5,000,000 is appropriated from the general fund to the 
84.2 	commissioner of administration for the biennium ending June 30, 2013, to make grants to 
84.3 	counties as provided in this section.

84.4 	Sec. 32.  REPEALER.
 84.5 	(a) Minnesota Statutes 2010, sections 10A.322, subdivision 4; 13.4967, subdivision 
84.6 	2; are repealed.
84.7 	(b) Minnesota Statutes 2010, section 290.06, subdivision 23, is repealed.
84.8 	(c) Minnesota Statutes 2010, sections 273.1384, subdivision 6; and 477A.145, are 
84.9 	repealed.
84.10 	(d) Minnesota Statutes 2010, sections 290C.01; 290C.02; 290C.03; 290C.04; 
84.11 	290C.05; 290C.055; 290C.06; 290C.07; 290C.08; 290C.09; 290C.10; 290C.11; 290C.12; 
84.12 	and 290C.13, are repealed.

84.13 	EFFECTIVE DATE. Paragraph (a) is effective the day following final enactment. 
84.14 	Paragraph (b) is effective for refund claims based on contributions made after June 30, 
84.15 	2011. Paragraph (c) is effective for aids payable in 2011 and thereafter. Paragraph (d) is 
84.16 	effective July 1, 2011, and the covenants under the program are void on that date. No later 
84.17 	than 60 days after enactment of this section, the commissioner of revenue shall issue a 
84.18 	document to each enrollee immediately releasing the land from the covenant as provided 
84.19 	in Minnesota Statutes 2010, section 290C.04, paragraph (c).

84.20 	ARTICLE 7
84.21 	GREEN ACRES AND RURAL PRESERVES

84.22 	Section 1. Minnesota Statutes 2010, section 273.111, is amended by adding a 
84.23 	subdivision to read:
84.24 		Subd. 2a.Purpose. The legislature finds that it is in the interest of the state to 
84.25 	encourage and preserve farms by mitigating the property tax impact of increasing land 
84.26 	values due to nonagricultural economic forces.

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

84.28 	Sec. 2. Minnesota Statutes 2010, section 273.111, subdivision 9, is amended to read:
84.29 		Subd. 9.Additional taxes. (a) Except as provided in paragraph (b), when real 
84.30 	property which is being, or has been valued and assessed under this section no longer 
84.31 	qualifies under subdivision 3, the portion no longer qualifying shall be subject to additional 
84.32 	taxes, in the amount equal to the difference between the taxes determined in accordance 
85.1 	with subdivision 4, and the amount determined under subdivision 5. Provided, however, 
85.2 	that the amount determined under subdivision 5 shall not be greater than it would have 
85.3 	been had the actual bona fide sale price of the real property at an arm's-length transaction 
85.4 	been used in lieu of the market value determined under subdivision 5. Such additional 
85.5 	taxes shall be extended against the property on the tax list for the current year, provided, 
85.6 	however, that no interest or penalties shall be levied on such additional taxes if timely 
85.7 	paid, and provided further, that such additional taxes shall only be levied with respect to 
85.8 	(1) the last three years that the said property has been valued and assessed under this 
85.9 	section, for property originally enrolled on or before May 1, 2012, or (2) the last five years 
85.10 	that the property has been valued and assessed under this section, for property originally 
85.11 	enrolled after May 1, 2012.
85.12 	(b) Real property that has been valued and assessed under this section prior to 
85.13 	May 29, 2008, and that ceases to qualify under this section after May 28, 2008, and is 
85.14 	withdrawn from the program before August 16, 2010, is not subject to additional taxes 
85.15 	under this subdivision or subdivision 3, paragraph (c). If additional taxes have been 
85.16 	paid under this subdivision with respect to property described in this paragraph prior to 
85.17 	April 3, 2009, the county must repay the property owner in the manner prescribed by the 
85.18 	commissioner of revenue.

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

85.20 	Sec. 3. Minnesota Statutes 2010, section 273.114, subdivision 2, is amended to read:
85.21 		Subd. 2.Requirements. Class 2a or 2b property that had been assessed properly 
85.22 	enrolled under Minnesota Statutes 2006, section 273.111 for taxes payable in 2008, or that 
85.23 	is part of an agricultural homestead under Minnesota Statutes, section 273.13, subdivision 
85.24 	23, paragraph (a), at least a portion of which is enrolled under section 273.111, is entitled 
85.25 	to valuation and tax deferment under this section if:
85.26 	(1) the land consists of at least ten acres property is contiguous to class 2a property 
85.27 	enrolled under section 273.111 under the same ownership;
85.28 	(2) a conservation assessment plan for the land must be prepared by an approved 
85.29 	plan writer and implemented during the period in which the land is subject to valuation 
85.30 	and deferment under this section;
85.31 	(3) the land must be enrolled for a minimum of eight years;
85.32 	(4) (2) there are no delinquent property taxes on the land; and
85.33 	(5) (3) the property is not also enrolled for valuation and deferment under section 
85.34 	273.111 or 273.112, or chapter 290C or 473H.

86.1 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
86.2 	thereafter.

86.3 	Sec. 4. Minnesota Statutes 2010, section 273.114, subdivision 5, is amended to read:
86.4 		Subd. 5.Application and covenant agreement. (a) Application for deferment 
86.5 	of taxes and assessment under this section shall be filed by May 1 of the year prior to 
86.6 	the year in which the taxes are payable. Any application filed under this subdivision 
86.7 	and granted shall continue in effect for subsequent years until the termination of the 
86.8 	covenant agreement under paragraph (b) property is withdrawn or no longer qualifies. The 
86.9 	application must be filed with the assessor of the taxing district in which the real property 
86.10 	is located on the form prescribed by the commissioner of revenue. The assessor may 
86.11 	require proof by affidavit or otherwise that the property qualifies under subdivision 2.
86.12 	(b) The owner of the property must sign a covenant agreement that is filed with the 
86.13 	county recorder and recorded in the county where the property is located. The covenant 
86.14 	agreement must include all of the following:
86.15 	(1) legal description of the area to which the covenant applies;
86.16 	(2) name and address of the owner;
86.17 	(3) a statement that the land described in the covenant must be kept as rural preserve 
86.18 	land, which meets the requirements of subdivision 2, for the duration of the covenant;
86.19 	(4) a statement that the landowner may terminate the covenant agreement by 
86.20 	notifying the county assessor in writing three years in advance of the date of proposed 
86.21 	termination, provided that the notice of intent to terminate may not be given at any time 
86.22 	before the land has been subject to the covenant for a period of five years;
86.23 	(5) a statement that the covenant is binding on the owner or the owner's successor or 
86.24 	assigns and runs with the land; and
86.25 	(6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as 
86.26 	described in subdivision 2.
86.27 	(c) After a covenant under this section has been terminated, the land that had been 
86.28 	subject to the covenant is ineligible for subsequent valuation under this section for a 
86.29 	period of three years after the termination.

86.30 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
86.31 	thereafter.

86.32 	Sec. 5. Minnesota Statutes 2010, section 273.114, subdivision 6, is amended to read:
86.33 		Subd. 6.Additional taxes. Upon termination of a covenant agreement in 
86.34 	subdivision 5, paragraph (b), the land to which the covenant appliedWhen real property 
87.1 	that is being or has been valued and assessed under this section no longer qualifies under 
87.2 	subdivision 2, the portion no longer qualifying shall be subject to additional taxes in 
87.3 	the amount equal to the difference between the taxes determined in accordance with 
87.4 	subdivision 3 and the amount determined under subdivision 4, provided that the amount 
87.5 	determined under subdivision 4 shall not be greater than it would have been had the actual 
87.6 	bona fide sale price of the real property at an arm's-length transaction been used in lieu of 
87.7 	the market value determined under subdivision 4. The additional taxes shall be extended 
87.8 	against the property on the tax list for the current year, provided that no interest or penalties 
87.9 	shall be levied on the additional taxes if timely paid and that the additional taxes shall only 
87.10 	be levied with respect to the current year plus (1) two prior years that the property has 
87.11 	been valued and assessed under this section, for property that had been enrolled under 
87.12 	this section or section 273.111 on or before May 1, 2012, or (2) four prior years that the 
87.13 	property had been valued and assessed under this section, for all other property.

87.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
87.15 	thereafter.

87.16 	Sec. 6. LAND REMOVED FROM PROGRAM.
 87.17 	(a) Any class 2a land that had been properly enrolled in the Minnesota Agricultural 
87.18 	Property Tax Law under Minnesota Statutes 2006, section 273.111, and that was removed 
87.19 	from the program between May 21, 2008, and the effective date of this paragraph must be 
87.20 	reinstated to the program at the request of the owner provided that the request is made 
87.21 	prior to September 1, 2011.
87.22 	(b) Any class 2b land that had been properly enrolled in the Minnesota Agricultural 
87.23 	Property Tax Law under Minnesota Statutes, section 273.111, and that was removed from 
87.24 	the program between May 21, 2008, and the effective date of this paragraph, and that 
87.25 	applies for enrollment in the rural preserve program under Minnesota Statutes, section 
87.26 	273.114, prior to September 1, 2011, shall be allowed to apply as if it had been enrolled 
87.27 	under Minnesota Statutes, section 273.111, immediately prior to application for enrollment 
87.28 	under Minnesota Statutes, section 273.114.
87.29 	(c) If additional taxes, as defined under Minnesota Statutes, section 273.111, 
87.30 	subdivision 9, have been paid by a property owner prior to the effective date of this 
87.31 	paragraph for property being enrolled or reenrolled under paragraph (a) or (b), the county 
87.32 	must repay the property owner in the manner prescribed by the commissioner of revenue.

88.1 	EFFECTIVE DATE. Paragraphs (a) and (b) are effective the day following final 
88.2 	enactment for taxes payable in 2012 and thereafter. Paragraph (c) is effective the day 
88.3 	following final enactment.

88.4 	Sec. 7. COVENANTS TERMINATED.
 88.5 	Any covenants entered into in order to comply with the requirements of Minnesota 
88.6 	Statutes 2010, section 273.114, subdivision 5, are terminated.

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

88.8 	Sec. 8. STUDY REQUIRED.
 88.9 	The commissioner of revenue, in consultation with the Minnesota Association of 
88.10 	Assessing Officers, the Department of Applied Economics at the University of Minnesota, 
88.11 	and representatives of major farm groups within the state of Minnesota, must explore 
88.12 	alternative methods for determining the taxable value of tillable and nontillable land 
88.13 	enrolled in the green acres program under Minnesota Statutes, section 273.111, and the 
88.14 	rural preserves program under Minnesota Statutes, section 273.114. The commissioner 
88.15 	must make a report to the legislature by February 15, 2012, describing the methodologies 
88.16 	intended to be used for assessment year 2012 and thereafter.

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

88.18 	Sec. 9.  REPEALER.
 88.19 	Minnesota Statutes 2010, section 273.114, subdivision 1, is repealed.

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

88.21 	ARTICLE 8
88.22 	MINERALS

88.23 	Section 1. Minnesota Statutes 2010, section 298.01, subdivision 3, is amended to read:
88.24 		Subd. 3.Occupation tax; other ores. Every person engaged in the business of 
88.25 	mining or producing ores in this state, except iron ore or taconite concentrates, shall pay 
88.26 	an occupation tax to the state of Minnesota as provided in this subdivision. The tax is 
88.27 	determined in the same manner as the tax imposed by section 290.02, except that sections 
88.28 	290.05, subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do 
88.29 	not apply, and the occupation tax must be computed by applying to taxable income the rate 
89.1 	of 2.45 1.75 percent. A person subject to occupation tax under this section shall apportion 
89.2 	its net income on the basis of the percentage obtained by taking the sum of:
89.3 	(1) 75 percent of the percentage which the sales made within this state in connection 
89.4 	with the trade or business during the tax period are of the total sales wherever made in 
89.5 	connection with the trade or business during the tax period;
89.6 	(2) 12.5 percent of the percentage which the total tangible property used by the 
89.7 	taxpayer in this state in connection with the trade or business during the tax period is of 
89.8 	the total tangible property, wherever located, used by the taxpayer in connection with the 
89.9 	trade or business during the tax period; and
89.10 	(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 
89.11 	in this state or paid in respect to labor performed in this state in connection with the trade 
89.12 	or business during the tax period are of the taxpayer's total payrolls paid or incurred in 
89.13 	connection with the trade or business during the tax period.
89.14 	The tax is in addition to all other taxes.

89.15 	Sec. 2. Minnesota Statutes 2010, section 298.015, subdivision 1, is amended to read:
89.16 		Subdivision 1.Tax imposed. A person engaged in the business of mining shall pay 
89.17 	to the state of Minnesota for distribution as provided in section 298.018 a net proceeds tax 
89.18 	equal to two 2.7 percent of the net proceeds from mining in Minnesota. The tax applies to 
89.19 	all mineral and energy resources mined or extracted within the state of Minnesota except 
89.20 	for sand, silica sand, gravel, building stone, crushed rock, limestone, granite, dimension 
89.21 	granite, dimension stone, horticultural peat, clay, soil, iron ore, and taconite concentrates. 
89.22 	The tax is in addition to all other taxes provided for by law. 

89.23 	Sec. 3. Minnesota Statutes 2010, section 298.018, subdivision 1, is amended to read:
89.24 		Subdivision 1.Within taconite assistance area. The proceeds of the tax paid under 
89.25 	sections 298.015 to 298.017 on minerals and energy resources mined or extracted within 
89.26 	the taconite assistance area defined in section 273.1341, shall be allocated as follows:
89.27 	(1) five percent to the city or town within which the minerals or energy resources 
89.28 	are mined or extracted or within which the concentrate was produced. If the mining and 
89.29 	concentration, or different steps in either process, are carried on in more than one taxing 
89.30 	district, the commissioner shall apportion equitably the proceeds of the part of the tax going 
89.31 	to cities and towns among them upon the basis of attributing 50 percent of the proceeds of 
89.32 	the tax to the operation of mining or extraction, and the remainder to the concentrating 
89.33 	plant and to the processes of concentration, and with respect to each of them giving due 
89.34 	consideration to the relative extent of the operations performed in each taxing district;
90.1 	(2) ten percent to the taconite municipal aid account to be distributed as provided 
90.2 	in section 298.282;
90.3 	(3) ten percent to the school district within which the minerals or energy resources 
90.4 	are mined or extracted or within which the concentrate was produced. If the mining 
90.5 	and concentration, or different steps in either process, are carried on in more than one 
90.6 	school district, distribution among the school districts must be based on the apportionment 
90.7 	formula prescribed in clause (1);
90.8 	(4) 20 percent to a group of school districts comprised of those school districts 
90.9 	wherein the mineral or energy resource was mined or extracted or in which there is a 
90.10 	qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion 
90.11 	to school district indexes as follows: for each school district, its pupil units determined 
90.12 	under section 126C.05 for the prior school year shall be multiplied by the ratio of the 
90.13 	average adjusted net tax capacity per pupil unit for school districts receiving aid under 
90.14 	this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 
90.15 	ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 
90.16 	Each district shall receive that portion of the distribution which its index bears to the sum 
90.17 	of the indices for all school districts that receive the distributions;
90.18 	(5) 20 percent to the county within which the minerals or energy resources are mined 
90.19 	or extracted, provided that the county shall pay one percent of its proceeds to the Range 
90.20 	Association of Municipalities and Schools;
90.21 	(6) 20 percent to St. Louis County acting as the counties' fiscal agent to be 
90.22 	distributed as provided in sections 273.134 to 273.136;
90.23 	(7) five percent to the Iron Range Resources and Rehabilitation Board for the 
90.24 	purposes of section 298.22;
90.25 	(8) five three percent to the Douglas J. Johnson economic protection trust fund; and
90.26 	(9) five seven percent to the taconite environmental protection fund.
90.27 	The proceeds of the tax shall be distributed on July 15 each year.

90.28 	Sec. 4. Minnesota Statutes 2010, section 298.28, subdivision 3, is amended to read:
90.29 		Subd. 3.Cities; towns. (a) 12.5 cents per taxable ton, less any amount distributed 
90.30 	under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid 
90.31 	account to be distributed as provided in section 298.282.
90.32 	(b) An amount must be allocated to towns or cities that is annually certified by 
90.33 	the county auditor of a county containing a taconite tax relief area as defined in section 
90.34 	273.134, paragraph (b), within which there is (1) an organized township if, as of January 
90.35 	2, 1982, more than 75 percent of the assessed valuation of the township consists of iron 
91.1 	ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation 
91.2 	of the city consists of iron ore.
91.3 	(c) The amount allocated under paragraph (b) will be the portion of a township's or 
91.4 	city's certified levy equal to the proportion of (1) the difference between 50 percent of 
91.5 	January 2, 1982, assessed value in the case of a township and 50 percent of the January 2, 
91.6 	1980, assessed value in the case of a city and its current assessed value to (2) the sum of 
91.7 	its current assessed value plus the difference determined in (1), provided that the amount 
91.8 	distributed shall not exceed $55 per capita in the case of a township or $75 per capita in 
91.9 	the case of a city. For purposes of this limitation, population will be determined according 
91.10 	to the 1980 decennial census conducted by the United States Bureau of the Census. If the 
91.11 	current assessed value of the township exceeds 50 percent of the township's January 2, 
91.12 	1982, assessed value, or if the current assessed value of the city exceeds 50 percent of the 
91.13 	city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this 
91.14 	paragraph, "assessed value," when used in reference to years other than 1980 or 1982, 
91.15 	means the appropriate net tax capacities multiplied by 10.2.
91.16 	(d) In addition to other distributions under this subdivision, three cents per taxable 
91.17 	ton for distributions in 2009 and subsequent years must be allocated for distribution 
91.18 	to towns that are entirely located within the taconite tax relief area defined in section 
91.19 	273.134, paragraph (b). For distribution in 2010 and subsequent years, the three-cent 
91.20 	amount must be annually increased in the same proportion as the increase in the implicit 
91.21 	price deflator as provided in section 298.24, subdivision 1. The amount available under 
91.22 	this paragraph will be distributed to eligible towns on a per capita basis, provided that no 
91.23 	town may receive more than $50,000 in any year under this paragraph. Any amount of the 
91.24 	distribution that exceeds the $50,000 limitation for a town under this paragraph must be 
91.25 	redistributed on a per capita basis among the other eligible towns, to whose distributions 
91.26 	do not exceed $50,000.

91.27 	EFFECTIVE DATE. This section is effective for the 2012 distribution.

91.28 	ARTICLE 9
91.29 	MISCELLANEOUS

91.30 	Section 1. [3.193] REVENUE INCREASES VOID.
91.31 	Notwithstanding any other law to the contrary, any increase in a tax, as defined in 
91.32 	Minnesota Statutes, section 645.44, subdivision 19, enacted into law is void, unless it 
91.33 	specifically provides that this section does not apply.

92.1 	EFFECTIVE DATE. This section is effective the day following final enactment 
92.2 	and does not apply to the provisions of the bill styled as H.F. No. 79, if enacted into law 
92.3 	during the 2011 regular session of the legislature.

92.4 	Sec. 2. Minnesota Statutes 2010, section 270C.13, subdivision 1, is amended to read:
92.5 		Subdivision 1.Biennial report. The commissioner shall report to the legislature 
92.6 	by March 1 of each odd-numbered year on the overall incidence of the income tax, 
92.7 	sales and excise taxes, and property tax. The report shall present information on the 
92.8 	distribution of the tax burden as follows: (1) for the overall income distribution, using 
92.9 	a systemwide incidence measure such as the Suits index or other appropriate measures 
92.10 	of equality and inequality; (2) by income classes, including at a minimum deciles of the 
92.11 	income distribution; and (3) by other appropriate taxpayer characteristics. The report 
92.12 	must also include information on the distribution of the burden of federal taxes borne 
92.13 	by Minnesota residents.

92.14 	EFFECTIVE DATE. This section is effective beginning with the report due in 
92.15 	March 2013.

92.16 	Sec. 3. Minnesota Statutes 2010, section 275.025, subdivision 1, is amended to read:
92.17 		Subdivision 1.Levy amount. The state general levy is levied against 
92.18 	commercial-industrial property and seasonal residential recreational property, as defined 
92.19 	in this section. The state general levy base amount for commercial-industrial property is 
92.20 	$592,000,000 $739,000,000 for taxes payable in 2002 2012. The state general levy base 
92.21 	amount for seasonal recreational property is $40,600,000 for taxes payable in 2012. For 
92.22 	taxes payable in subsequent years, the each levy base amount is increased each year by 
92.23 	multiplying the levy base amount for the prior year by the sum of one plus the rate of 
92.24 	increase, if any, in the implicit price deflator for government consumption expenditures 
92.25 	and gross investment for state and local governments prepared by the Bureau of Economic 
92.26 	Analysts of the United States Department of Commerce for the 12-month period ending 
92.27 	March 31 of the year prior to the year the taxes are payable. The tax under this section is 
92.28 	not treated as a local tax rate under section 469.177 and is not the levy of a governmental 
92.29 	unit under chapters 276A and 473F.
92.30 	The commissioner shall increase or decrease the preliminary or final rate for a year 
92.31 	as necessary to account for errors and tax base changes that affected a preliminary or final 
92.32 	rate for either of the two preceding years. Adjustments are allowed to the extent that the 
92.33 	necessary information is available to the commissioner at the time the rates for a year must 
92.34 	be certified, and for the following reasons:
93.1 	(1) an erroneous report of taxable value by a local official;
93.2 	(2) an erroneous calculation by the commissioner; and
93.3 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
93.4 	residential recreational property reported on the abstracts of tax lists submitted under 
93.5 	section 275.29 that was not reported on the abstracts of assessment submitted under 
93.6 	section 270C.89 for the same year.
93.7 	The commissioner may, but need not, make adjustments if the total difference in the tax 
93.8 	levied for the year would be less than $100,000.

93.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
93.10 	thereafter.

93.11 	Sec. 4. Minnesota Statutes 2010, section 275.025, subdivision 4, is amended to read:
93.12 		Subd. 4.Apportionment and levy of state general tax. Ninety-five percent of The 
93.13 	state general tax must be levied by applying a uniform rate to all commercial-industrial tax 
93.14 	capacity and five percent of the state general tax must be levied by applying a uniform 
93.15 	rate to all seasonal residential recreational tax capacity. On or before October 1 each 
93.16 	year, the commissioner of revenue shall certify the preliminary state general levy rates to 
93.17 	each county auditor that must be used to prepare the notices of proposed property taxes 
93.18 	for taxes payable in the following year. By January 1 of each year, the commissioner 
93.19 	shall certify the final state general levy rate rates to each county auditor that shall be 
93.20 	used in spreading taxes.

93.21 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
93.22 	thereafter.

93.23 	Sec. 5. APPROPRIATIONS.
 93.24 		Subdivision 1.Income tax reciprocity benchmark study. $115,000 in fiscal year 
93.25 	2012 and $215,000 in fiscal year 2013 are appropriated from the general fund to the 
93.26 	commissioner of revenue for the income tax reciprocity benchmark study in article 1, 
93.27 	section 17. This appropriation is onetime and is not added to the agency's base budget.
93.28 		Subd. 2.Tax incidence report. $15,000 in fiscal year 2012 and $15,000 in fiscal 
93.29 	year 2013 are appropriated from the general fund to the commissioner of revenue for the 
93.30 	change to the tax incidence report in section 2.