HF 42

1st Unofficial Engrossment - 87th Legislature (2011 - 2012)

Posted on 04/06/2011 10:42 a.m.

1.1A bill for an act 1.2relating to the financing of state and local government; making technical, policy, 1.3administrative, enforcement, and clarifying changes to taxes on individual 1.4income, estates, sales and uses, property, minerals, local taxes, aids to local 1.5governments; reducing and eliminating certain payments and credits; modifying 1.6property tax refund payments; authorizing grants; modifying the rural preserve 1.7program; reducing and eliminating the state general levy; modifying various 1.8taxes and tax-related provisions; providing income tax, estate tax, sales tax, 1.9and property tax exemptions; authorizing local sales taxes; permitting certain 1.10appeals; modifying tax increment financing authorities; requiring studies; setting 1.11the levels of the cash flow account and the budget reserve account; appropriating 1.12money;amending Minnesota Statutes 2010, sections 97A.061, subdivisions 1.131, 3; 270A.03, subdivisions 2, 7; 270A.07, subdivision 1; 270B.12, by adding 1.14a subdivision; 270C.13, subdivision 1; 272.02, subdivision 39, by adding a 1.15subdivision; 273.111, by adding a subdivision; 273.114, subdivisions 2, 5, 6; 1.16273.13, subdivisions 21b, 23, 25, 34; 273.1384, subdivisions 1, 3, 4, by adding 1.17a subdivision; 273.1393; 273.1398, subdivisions 3, 4; 274.01, subdivision 1; 1.18275.025, subdivisions 1, 4; 275.08, subdivision 1a; 276.04, subdivision 2; 1.19289A.50, subdivision 1; 290.01, subdivisions 6, 19b; 290.05, subdivision 1; 1.20290.0674, subdivision 1; 290.081; 290.091, subdivision 2; 290A.03, subdivisions 1.2111, 13; 290A.04, subdivisions 2, 4; 291.005, subdivision 1; 291.03, subdivision 1.221, by adding subdivisions; 297A.61, subdivision 3; 297A.67, subdivision 7, by 1.23adding subdivisions; 297A.68, subdivision 4; 297A.70, subdivisions 1, 2, 3, 8; 1.24297A.75, subdivisions 1, 2, 3; 297A.82, subdivision 4; 297A.99, subdivisions 1.251, 3; 298.001, by adding a subdivision; 298.01, subdivisions 3, 3a, 4; 298.015, 1.26subdivisions 1, 2; 298.016, subdivision 4; 298.225, subdivision 1; 298.24, 1.27subdivision 1; 298.28, subdivisions 3, 6, 7, 9, 9b; 469.176, subdivisions 4c, 1.284m; 477A.0124, by adding a subdivision; 477A.013, subdivision 9, by adding 1.29a subdivision; 477A.03; 477A.11, subdivision 1; 477A.12, subdivision 1; 1.30477A.14, subdivision 1; 477A.17; Laws 1996, chapter 471, article 2, section 1.3129, subdivision 1, as amended; Laws 1998, chapter 389, article 8, section 1.3243, subdivisions 3, as amended, 4, as amended, 5, as amended; Laws 2008, 1.33chapter 366, article 7, section 19, subdivision 3; Laws 2010, chapter 389, article 1.347, section 22; proposing coding for new law in Minnesota Statutes, chapters 1.35275; 290; repealing Minnesota Statutes 2010, sections 10A.322, subdivision 1.364; 13.4967, subdivision 2; 273.114, subdivision 1; 273.1384, subdivision 6; 1.37273.1398, subdivision 4; 275.025; 275.295; 290.06, subdivision 23; 290C.01; 1.38290C.02; 290C.03; 290C.04; 290C.05; 290C.055; 290C.06; 290C.07; 290C.08; 2.1290C.09; 290C.10; 290C.11; 290C.12; 290C.13; 298.017; 298.227; 298.28, 2.2subdivisions 8, 9a, 9c, 10; 298.285; 477A.145. 2.3BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.4ARTICLE 1 2.5INCOME AND ESTATE TAXES 2.6    Section 1. Minnesota Statutes 2010, section 270B.12, is amended by adding a 2.7subdivision to read: 2.8     new text begin Subd. 14. new text end new text begin Wisconsin secretary of revenue; income tax reciprocity benchmark new text end 2.9 new text begin study. new text end new text begin The commissioner may disclose return information to the secretary of revenue new text end 2.10 new text begin of the state of Wisconsin for the purpose of conducting a joint individual income tax new text end 2.11 new text begin reciprocity study. new text end 2.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 2.13    Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19b, is amended to read: 2.14    Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 2.15and trusts, there shall be subtracted from federal taxable income: 2.16    (1) net interest income on obligations of any authority, commission, or 2.17instrumentality of the United States to the extent includable in taxable income for federal 2.18income tax purposes but exempt from state income tax under the laws of the United States; 2.19    (2) if included in federal taxable income, the amount of any overpayment of income 2.20tax to Minnesota or to any other state, for any previous taxable year, whether the amount 2.21is received as a refund or as a credit to another taxable year's income tax liability; 2.22    (3) the amount paid to others, less the amount used to claim the credit allowed under 2.23section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 2.24to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 2.25transportation of each qualifying child in attending an elementary or secondary school 2.26situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 2.27resident of this state may legally fulfill the state's compulsory attendance laws, which 2.28is not operated for profit, and which adheres to the provisions of the Civil Rights Act 2.29of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 2.30tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 2.31"textbooks" includes books and other instructional materials and equipment purchased 2.32or leased for use in elementary and secondary schools in teaching only those subjects 2.33legally and commonly taught in public elementary and secondary schools in this state. 3.1Equipment expenses qualifying for deduction includes expenses as defined and limited in 3.2section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 3.3books and materials used in the teaching of religious tenets, doctrines, or worship, the 3.4purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 3.5or materials for, or transportation to, extracurricular activities including sporting events, 3.6musical or dramatic events, speech activities, driver's education, or similar programs. No 3.7deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 3.8the qualifying child's vehicle to provide such transportation for a qualifying child. For 3.9purposes of the subtraction provided by this clause, "qualifying child" has the meaning 3.10given in section 32(c)(3) of the Internal Revenue Code; 3.11    (4) income as provided under section 290.0802; 3.12    (5) to the extent included in federal adjusted gross income, income realized on 3.13disposition of property exempt from tax under section 290.491; 3.14    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 3.15of the Internal Revenue Code in determining federal taxable income by an individual 3.16who does not itemize deductions for federal income tax purposes for the taxable year, an 3.17amount equal to 50 percent of the excess of charitable contributions over $500 allowable 3.18as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, 3.19under the provisions of Public Law 109-1 and Public Law 111-126; 3.20    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not 3.21qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 3.22of subnational foreign taxes for the taxable year, but not to exceed the total subnational 3.23foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 3.24"federal foreign tax credit" means the credit allowed under section 27 of the Internal 3.25Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 3.26under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 3.27the extent they exceed the federal foreign tax credit; 3.28    (8) in each of the five tax years immediately following the tax year in which an 3.29addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 3.30of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 3.31of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 3.32the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 3.33subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 3.34positive value of any net operating loss under section 172 of the Internal Revenue Code 3.35generated for the tax year of the addition. The resulting delayed depreciation cannot be 3.36less than zero; 4.1    (9) job opportunity building zone income as provided under section 469.316; 4.2    (10) to the extent included in federal taxable income, the amount of compensation 4.3paid to members of the Minnesota National Guard or other reserve components of the 4.4United States military for active service performed in Minnesota, excluding compensation 4.5for services performed under the Active Guard Reserve (AGR) program. For purposes of 4.6this clause, "active service" means (i) state active service as defined in section 190.05, 4.7subdivision 5a , clause (1); (ii) federally funded state active service as defined in section 4.8190.05, subdivision 5b ; or (iii) federal active service as defined in section 190.05, 4.9subdivision 5c , but "active service" excludes service performed in accordance with section 4.10190.08, subdivision 3 ; 4.11    (11) to the extent included in federal taxable income, the amount of compensation 4.12paid to Minnesota residents who are members of the armed forces of the United States or 4.13United Nations for active duty performed outside Minnesota under United States Code, 4.14title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 4.15the United Nations; 4.16    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a 4.17qualified donor's donation, while living, of one or more of the qualified donor's organs 4.18to another person for human organ transplantation. For purposes of this clause, "organ" 4.19means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 4.20"human organ transplantation" means the medical procedure by which transfer of a human 4.21organ is made from the body of one person to the body of another person; "qualified 4.22expenses" means unreimbursed expenses for both the individual and the qualified donor 4.23for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 4.24may be subtracted under this clause only once; and "qualified donor" means the individual 4.25or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 4.26individual may claim the subtraction in this clause for each instance of organ donation for 4.27transplantation during the taxable year in which the qualified expenses occur; 4.28    (13) in each of the five tax years immediately following the tax year in which an 4.29addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 4.30shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 4.31addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 4.32case of a shareholder of a corporation that is an S corporation, minus the positive value of 4.33any net operating loss under section 172 of the Internal Revenue Code generated for the 4.34tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 4.35subtraction is not allowed under this clause; 5.1    (14) to the extent included in federal taxable income, compensation paid to a service 5.2member as defined in United States Code, title 10, section 101(a)(5), for military service 5.3as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2); 5.4    (15) international economic development zone income as provided under section 5.5469.325 ; 5.6    (16) to the extent included in federal taxable income, the amount of national service 5.7educational awards received from the National Service Trust under United States Code, 5.8title 42, sections 12601 to 12604, for service in an approved Americorps National Service 5.9program; and 5.10(17) to the extent included in federal taxable income, discharge of indebtedness 5.11income resulting from reacquisition of business indebtedness included in federal taxable 5.12income under section 108(i) of the Internal Revenue Code. This subtraction applies only 5.13to the extent that the income was included in net income in a prior year as a result of the 5.14addition under section 290.01, subdivision 19a, clause (16) new text begin ; and new text end 5.15 new text begin (18) to the extent included in federal taxable income, a percentage of compensation new text end 5.16 new text begin received from a pension or other retirement pay from the federal government for service in new text end 5.17 new text begin the military, as computed under United States Code, title 10, sections 1401 to 1414, 1447 new text end 5.18 new text begin to 1455, and 12733, as follows: new text end 5.19 new text begin (i) for taxable years beginning after December 31, 2010, and before January 1, new text end 5.20 new text begin 2012, the percentage is 20 percent; new text end 5.21 new text begin (ii) for taxable years beginning after December 31, 2011, and before January 1, new text end 5.22 new text begin 2013, the percentage is 35 percent; and new text end 5.23 new text begin (iii) for taxable years beginning after December 31, 2012, the percentage is 55 new text end 5.24 new text begin percent new text end . 5.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 5.26 new text begin December 31, 2010. new text end 5.27    Sec. 3. Minnesota Statutes 2010, section 290.0674, subdivision 1, is amended to read: 5.28    Subdivision 1. Credit allowed. An individual is allowed a credit against the 5.29tax imposed by this chapter in an amount equal to 75 percent of the amount paid for 5.30education-related expenses for a qualifying child in kindergarten through grade 12. For 5.31purposes of this section, "education-related expenses" means: 5.32(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision 5.3310 , clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers 5.34Association, and who is not a lineal ancestor or sibling of the dependent for instruction 5.35outside the regular school day or school year, including tutoring, driver's education 6.1offered as part of school curriculum, regardless of whether it is taken from a public or 6.2private entity or summer camps, in grade or age appropriate curricula that supplement 6.3curricula and instruction available during the regular school year, that assists a dependent 6.4to improve knowledge of core curriculum areas or to expand knowledge and skills under 6.5the required academic standards under section 120B.021, subdivision 1, and the elective 6.6standard under section 120B.022, subdivision 1, clause (2), and that do not include the 6.7teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such 6.8tenets, doctrines, or worship; 6.9(2) expenses for textbooks, including books and other instructional materials and 6.10equipment purchased or leased for use in elementary and secondary schools in teaching 6.11only those subjects legally and commonly taught in public elementary and secondary 6.12schools in this state. "Textbooks" does not include instructional books and materials 6.13used in the teaching of religious tenets, doctrines, or worship, the purpose of which is 6.14to instill such tenets, doctrines, or worship, nor does it include books or materials for 6.15extracurricular activities including sporting events, musical or dramatic events, speech 6.16activities, driver's education, or similar programs; 6.17(3) a maximum expense of $200 per family for personal computer hardware, 6.18excluding single purpose processors, and educational software that assists a dependent to 6.19improve knowledge of core curriculum areas or to expand knowledge and skills under 6.20the required academic standards under section 120B.021, subdivision 1, and the elective 6.21standard under section 120B.022, subdivision 1, clause (2), purchased for use in the 6.22taxpayer's home and not used in a trade or business regardless of whether the computer is 6.23required by the dependent's school; and 6.24(4) the amount paid to others for new text begin tuition and new text end transportation of a qualifying child 6.25attending an elementary or secondary school situated in Minnesota, North Dakota, South 6.26Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's 6.27compulsory attendance laws, which is not operated for profit, and which adheres to the 6.28provisions of the Civil Rights Act of 1964 and chapter 363A. 6.29For purposes of this section, "qualifying child" has the meaning given in section 6.3032(c)(3) of the Internal Revenue Code. 6.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 6.32 new text begin December 31, 2010. new text end 6.33    Sec. 4. Minnesota Statutes 2010, section 290.081, is amended to read: 6.34290.081 INCOME OF NONRESIDENTS, RECIPROCITY. 7.1     new text begin Subdivision 1. new text end new text begin Reciprocity with other states. new text end (a) The compensation received for 7.2the performance of personal or professional services within this state by an individual 7.3whose residence, place of abode, and place customarily returned to at least once a month 7.4is in another state, shall be excluded from gross income to the extent such compensation is 7.5subject to an income tax imposed by the state of residence; provided that such state allows 7.6a similar exclusion of compensation received by residents of Minnesota for services 7.7performed therein. 7.8(b) When it is deemed to be in the best interests of the people of this state, the 7.9commissioner may determine that the provisions of paragraph (a) shall not apply new text begin as they new text end 7.10 new text begin relate to all states, except Wisconsin. The provisions of paragraph (a) apply with respect new text end 7.11 new text begin to Wisconsin only for taxable years in which a reciprocity agreement with Wisconsin is new text end 7.12 new text begin in effect as provided in this section new text end . As long as the provisions of paragraph (a) apply 7.13between Minnesota and Wisconsin, the provisions of paragraph (a) shall apply to any 7.14individual who is domiciled in Wisconsin. 7.15(c) For the purposes of paragraph (a), whenever the Wisconsin tax on Minnesota 7.16residents which would have been paid Wisconsin without paragraph (a) exceeds the 7.17Minnesota tax on Wisconsin residents which would have been paid Minnesota without 7.18paragraph (a), or vice versa, then the state with the net revenue loss resulting from 7.19paragraph (a) must be compensated by the other state as provided in the agreement under 7.20paragraph (d). This provision shall be effective for all years beginning after December 31, 7.211972. The data used for computing the loss to either state shall be determined on or before 7.22September 30 of the year following the close of the previous calendar year. 7.23(d) Interest is payable on all amounts calculated under paragraph (c) relating to 7.24taxable years beginning after December 31, 2000 new text begin , and before January 1, 2010 new text end . Interest 7.25accrues from July 1 of the taxable year. 7.26 new text begin (e) new text end The commissioner of revenue is authorized to enter into agreements new text begin reciprocity new text end 7.27 new text begin agreement new text end with the state of Wisconsin specifying new text begin must specify new text end the compensation required 7.28under paragraph (b), the new text begin one or more new text end reciprocity payment due date, new text begin dates for the revenue new text end 7.29 new text begin loss relating to each taxable year, with one or more estimated payment due dates in the new text end 7.30 new text begin same fiscal year in which the revenue loss occurred, and a final payment in the following new text end 7.31 new text begin fiscal year, new text end conditions constituting delinquency, interest rates, and a method for computing 7.32interest due. new text begin Interest is payable from July 1 of the taxable year on final payments made in new text end 7.33 new text begin the following fiscal year. new text end Calculation of compensation under the agreement must specify 7.34if the revenue loss is determined before or after the allowance of each state's credit for 7.35taxes paid to the other state. 8.1(e) new text begin (f) new text end If an agreement cannot be reached as to the amount of the loss, the 8.2commissioner of revenue and the taxing official of the state of Wisconsin shall each 8.3appoint a member of a board of arbitration and these members shall appoint the third 8.4member of the board. The board shall select one of its members as chair. Such board may 8.5administer oaths, take testimony, subpoena witnesses, and require their attendance, require 8.6the production of books, papers and documents, and hold hearings at such places as are 8.7deemed necessary. The board shall then make a determination as to the amount to be paid 8.8the other state which determination shall be final and conclusive. 8.9(f) new text begin (g) new text end The commissioner may furnish copies of returns, reports, or other information 8.10to the taxing official of the state of Wisconsin, a member of the board of arbitration, or a 8.11consultant under joint contract with the states of Minnesota and Wisconsin for the purpose 8.12of making a determination as to the amount to be paid the other state under the provisions 8.13of this section. Prior to the release of any information under the provisions of this section, 8.14the person to whom the information is to be released shall sign an agreement which 8.15provides that the person will protect the confidentiality of the returns and information 8.16revealed thereby to the extent that it is protected under the laws of the state of Minnesota. 8.17 new text begin (h) Any reciprocity agreement entered into under this section continues in effect new text end 8.18 new text begin until terminated by Minnesota or Wisconsin law. The commissioner may agree to modify new text end 8.19 new text begin the timing or method of calculating the state payments to be made under the agreement, new text end 8.20 new text begin consistent with the requirements of paragraphs (c) and (e), but may not terminate the new text end 8.21 new text begin agreement. new text end 8.22     new text begin Subd. 2. new text end new text begin New reciprocity agreement with Wisconsin. new text end new text begin The commissioner may new text end 8.23 new text begin not enter into an income tax reciprocity agreement with Wisconsin under this section new text end 8.24 new text begin until after Wisconsin has paid in full, with interest, the amount due to Minnesota under new text end 8.25 new text begin the income tax reciprocity agreement in full effect for taxable years beginning before new text end 8.26 new text begin January 1, 2010. The commissioner of revenue is directed to initiate negotiations with new text end 8.27 new text begin the secretary of revenue of Wisconsin, with the objective of entering into an income new text end 8.28 new text begin tax reciprocity agreement effective for tax years beginning after December 31, 2011. new text end 8.29 new text begin The agreement must satisfy the conditions of subdivision 1, with one or more estimated new text end 8.30 new text begin payment due dates and a final payment due date specified so that the state with a net new text end 8.31 new text begin revenue loss as a result of the agreement receives estimated payments from the other state, new text end 8.32 new text begin in the same fiscal year as that in which the net revenue loss occurred and a final payment new text end 8.33 new text begin with interest in the following fiscal year. new text end 8.34 new text begin EFFECTIVE DATE. new text end new text begin Subdivision 2 is effective the day following final enactment. new text end 8.35 new text begin The changes to subdivision 1 are effective for taxable years beginning after December 31 new text end 8.36 new text begin of the year of the agreement, contingent upon agreement from the state of Wisconsin to a new text end 9.1 new text begin reciprocity arrangement in which estimated payments are made in the same fiscal year in new text end 9.2 new text begin which a change in revenue occurs, and a final payment is made in the following fiscal year. new text end 9.3    Sec. 5. Minnesota Statutes 2010, section 290.091, subdivision 2, is amended to read: 9.4    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following 9.5terms have the meanings given: 9.6    (a) "Alternative minimum taxable income" means the sum of the following for 9.7the taxable year: 9.8    (1) the taxpayer's federal alternative minimum taxable income as defined in section 9.955(b)(2) of the Internal Revenue Code; 9.10    (2) the taxpayer's itemized deductions allowed in computing federal alternative 9.11minimum taxable income, but excluding: 9.12    (i) the charitable contribution deduction under section 170 of the Internal Revenue 9.13Code; 9.14    (ii) the medical expense deduction; 9.15    (iii) the casualty, theft, and disaster loss deduction; and 9.16    (iv) the impairment-related work expenses of a disabled person; 9.17    (3) for depletion allowances computed under section 613A(c) of the Internal 9.18Revenue Code, with respect to each property (as defined in section 614 of the Internal 9.19Revenue Code), to the extent not included in federal alternative minimum taxable income, 9.20the excess of the deduction for depletion allowable under section 611 of the Internal 9.21Revenue Code for the taxable year over the adjusted basis of the property at the end of the 9.22taxable year (determined without regard to the depletion deduction for the taxable year); 9.23    (4) to the extent not included in federal alternative minimum taxable income, the 9.24amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 9.25Internal Revenue Code determined without regard to subparagraph (E); 9.26    (5) to the extent not included in federal alternative minimum taxable income, the 9.27amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and 9.28    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 9.29to (9), (12), (13), (16), and (17); 9.30    less the sum of the amounts determined under the following: 9.31    (1) interest income as defined in section 290.01, subdivision 19b, clause (1); 9.32    (2) an overpayment of state income tax as provided by section 290.01, subdivision 9.3319b , clause (2), to the extent included in federal alternative minimum taxable income; 9.34    (3) the amount of investment interest paid or accrued within the taxable year on 9.35indebtedness to the extent that the amount does not exceed net investment income, as 10.1defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 10.2amounts deducted in computing federal adjusted gross income; and 10.3    (4) amounts subtracted from federal taxable income as provided by section 290.01, 10.4subdivision 19b , clauses (6), (8) to (15), and (17) new text begin , and (18) new text end . 10.5    In the case of an estate or trust, alternative minimum taxable income must be 10.6computed as provided in section 59(c) of the Internal Revenue Code. 10.7    (b) "Investment interest" means investment interest as defined in section 163(d)(3) 10.8of the Internal Revenue Code. 10.9    (c) "Net minimum tax" means the minimum tax imposed by this section. 10.10    (d) "Regular tax" means the tax that would be imposed under this chapter (without 10.11regard to this section and section 290.032), reduced by the sum of the nonrefundable 10.12credits allowed under this chapter. 10.13    (e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 10.14income after subtracting the exemption amount determined under subdivision 3. 10.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 10.16 new text begin December 31, 2010. new text end 10.17    Sec. 6. new text begin [290.433] BUDGET RESERVE FUND CHECKOFF. new text end 10.18     new text begin (a) An individual who files an income tax return or property tax refund claim form new text end 10.19 new text begin may designate on the original return that $1 or more shall be added to the tax or deducted new text end 10.20 new text begin from the refund that would otherwise be payable by or to that individual and paid into the new text end 10.21 new text begin general fund. new text end 10.22     new text begin (b) All amounts designated by individuals under paragraph (a) must be deposited in new text end 10.23 new text begin the state treasury and credited to the budget reserve established under section 16A.152, new text end 10.24 new text begin subdivision 1a. new text end 10.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 10.26 new text begin December 31, 2010. new text end 10.27    Sec. 7. Minnesota Statutes 2010, section 291.005, subdivision 1, is amended to read: 10.28    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following 10.29terms used in this chapter shall have the following meanings: 10.30    (1) "Commissioner" means the commissioner of revenue or any person to whom the 10.31commissioner has delegated functions under this chapter. 11.1    (2) "Federal gross estate" means the gross estate of a decedent as required to be 11.2valued and otherwise determined for federal estate tax purposes under the Internal 11.3Revenue Code. 11.4    (3) "Internal Revenue Code" means the United States Internal Revenue Code of 11.51986, as amended through March 18, 2010, but without regard to the provisions of 11.6sections 501 and 901 of Public Law 107-16. 11.7    (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 11.8defined by section 2011(b)(3) of the Internal Revenue Code, increased by new text begin plus new text end 11.9 new text begin (i) new text end the amount of deduction for state death taxes allowed under section 2058 of 11.10the Internal Revenue Code new text begin ; less new text end 11.11 new text begin (ii) (A) the value of qualified small business property under section 291.03, new text end 11.12 new text begin subdivision 9, and the value of qualified farm property under section 291.03, subdivision new text end 11.13 new text begin 10, or (B) $4,000,000, whichever is less new text end . 11.14    (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 11.15excluding therefrom any property included therein which has its situs outside Minnesota, 11.16and (b) including therein any property omitted from the federal gross estate which is 11.17includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 11.18authorities. 11.19    (6) "Nonresident decedent" means an individual whose domicile at the time of 11.20death was not in Minnesota. 11.21    (7) "Personal representative" means the executor, administrator or other person 11.22appointed by the court to administer and dispose of the property of the decedent. If there 11.23is no executor, administrator or other person appointed, qualified, and acting within this 11.24state, then any person in actual or constructive possession of any property having a situs in 11.25this state which is included in the federal gross estate of the decedent shall be deemed 11.26to be a personal representative to the extent of the property and the Minnesota estate tax 11.27due with respect to the property. 11.28    (8) "Resident decedent" means an individual whose domicile at the time of death 11.29was in Minnesota. 11.30    (9) "Situs of property" means, with respect to real property, the state or country in 11.31which it is located; with respect to tangible personal property, the state or country in which 11.32it was normally kept or located at the time of the decedent's death; and with respect to 11.33intangible personal property, the state or country in which the decedent was domiciled 11.34at death. 11.35 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for decedents dying after December new text end 11.36 new text begin 31, 2010. new text end 12.1    Sec. 8. Minnesota Statutes 2010, section 291.03, subdivision 1, is amended to read: 12.2    Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the 12.3proportion of the maximum credit for state death taxes computed under section 2011 12.4of the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of 12.5federal adjusted taxable estate, as the Minnesota gross estate bears to the value of the 12.6federal gross estate. 12.7    (b) The tax determined under this subdivision must not be greater than the sum of 12.8the following amounts multiplied by a fraction, the numerator of which is the Minnesota 12.9gross estate and the denominator of which is the federal gross estate: 12.10    (1) the rates and brackets under section 2001(c) of the Internal Revenue Code 12.11multiplied by the sum of: 12.12    (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; 12.13plus 12.14    (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue 12.15Code; less 12.16 new text begin (iii) the lesser of (A) the sum of the value of qualified small business property new text end 12.17 new text begin under subdivision 9, and the value of qualified farm property under subdivision 10, new text end 12.18 new text begin or (B) $4,000,000; less new text end 12.19    (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue 12.20Code; and less 12.21    (3) the federal credit allowed under section 2010 of the Internal Revenue Code. 12.22    (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal 12.23Revenue Code of 1986, as amended through December 31, 2000. 12.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for decedents dying after December new text end 12.25 new text begin 31, 2010. new text end 12.26    Sec. 9. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 12.27to read: 12.28     new text begin Subd. 8. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms have the new text end 12.29 new text begin meanings given in this subdivision. new text end 12.30 new text begin (b) "Family member" means a family member as defined in section 2032A(e)(2) of new text end 12.31 new text begin the Internal Revenue Code. new text end 12.32 new text begin (c) "Qualified heir" means a family member who acquired qualified property from new text end 12.33 new text begin the decedent and satisfies the requirement under subdivision 9, clause (6), or subdivision new text end 12.34 new text begin 10, clause (4), for the property. new text end 13.1 new text begin (d) "Qualified property" means qualified small businesss property under subdivision new text end 13.2 new text begin 9 and qualified farm property under subdivision 10. new text end 13.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for decedents dying after December new text end 13.4 new text begin 31, 2010. new text end 13.5    Sec. 10. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 13.6to read: 13.7     new text begin Subd. 9. new text end new text begin Qualified small business property. new text end new text begin Property satisfying all of the following new text end 13.8 new text begin requirements is qualified small business property: new text end 13.9 new text begin (1) The value of the property was included in the federal adjusted taxable estate. new text end 13.10 new text begin (2) The property consists of the assets of a trade or business or shares of stock or new text end 13.11 new text begin other ownership interests in a corporation or other entity engaged in a trade or business. new text end 13.12 new text begin The decedent or the decedent's spouse must have materially participated in the trade or new text end 13.13 new text begin business within the meaning of section 469 of the Internal Revenue Code during the new text end 13.14 new text begin taxable year that ended before the date of the decedent's death. Shares of stock in a new text end 13.15 new text begin corporation or an ownership interest in another type of entity do not qualify under this new text end 13.16 new text begin subdivision if the shares or ownership interests are traded on a public stock exchange at new text end 13.17 new text begin any time during the three-year period ending on the decedent's date of death. new text end 13.18 new text begin (3) The gross annual sales of the trade or business were $10,000,000 or less for the new text end 13.19 new text begin last taxable year that ended before the date of the death of the decedent. new text end 13.20 new text begin (4) The property does not consist of cash or cash equivalents. For property consisting new text end 13.21 new text begin of shares of stock or other ownership interests in an entity, the amount of cash or cash new text end 13.22 new text begin equivalents held by the corporation or other entity must be deducted from the value of new text end 13.23 new text begin the property qualifying under this subdivision in proportion to the decedent's share of new text end 13.24 new text begin ownership of the entity on the date of death. new text end 13.25 new text begin (5) The decedent continuously owned the property for the three-year period ending new text end 13.26 new text begin on the date of death of the decedent. new text end 13.27 new text begin (6) A family member continuously uses the property in the operation of the trade or new text end 13.28 new text begin business for three years following the date of death of the decedent. new text end 13.29 new text begin (7) The estate and the qualified heir elect to treat the property as qualified small new text end 13.30 new text begin business property and agree, in the form prescribed by the commissioner, to pay the new text end 13.31 new text begin recapture tax under subdivision 11, if applicable. new text end 13.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for decedents dying after December new text end 13.33 new text begin 31, 2010. new text end 14.1    Sec. 11. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 14.2to read: 14.3     new text begin Subd. 10. new text end new text begin Qualified farm property. new text end new text begin Property satisfying all of the following new text end 14.4 new text begin requirements is qualified farm property: new text end 14.5 new text begin (1) The value of the property was included in the federal adjusted taxable estate. new text end 14.6 new text begin (2) The property consists of a farm meeting the requirements of section 500.24, new text end 14.7 new text begin and was classified for property tax purposes as the homestead of the decedent or the new text end 14.8 new text begin decedent's spouse or both under section 273.124, and as class 2a property under section new text end 14.9 new text begin 273.13, subdivision 23. new text end 14.10 new text begin (3) The decedent continuously owned the property for the three-year period ending new text end 14.11 new text begin on the date of death of the decedent. new text end 14.12 new text begin (4) A family member continuously uses the property in the operation of the trade or new text end 14.13 new text begin business for three years following the date of death of the decedent. new text end 14.14 new text begin (5) The estate and the qualified heir elect to treat the property as qualified farm new text end 14.15 new text begin property and agree, in a form prescribed by the commissioner, to pay the recapture tax new text end 14.16 new text begin under subdivision 11, if applicable. new text end 14.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for decedents dying after December new text end 14.18 new text begin 31, 2010. new text end 14.19    Sec. 12. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 14.20to read: 14.21     new text begin Subd. 11. new text end new text begin Recapture tax. new text end new text begin (a) If, within three years after the decedent's death and new text end 14.22 new text begin before the death of the qualified heir, the qualified heir disposes of any interest in the new text end 14.23 new text begin qualified property, other than by a disposition to a family member, or a family member new text end 14.24 new text begin ceases to use the qualified property which was acquired or passed from the decedent, an new text end 14.25 new text begin additional estate tax is imposed on the property. new text end 14.26 new text begin (b) The amount of the additional tax equals the amount of the exclusion claimed by new text end 14.27 new text begin the estate under subdivision 8, paragraph (d), multiplied by 16 percent. new text end 14.28 new text begin (c) The additional tax under this subdivision is due on the day which is six months new text end 14.29 new text begin after the date of the disposition or cessation in paragraph (a). new text end 14.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for decedents dying after December new text end 14.31 new text begin 31, 2010. new text end 14.32    Sec. 13. new text begin INCOME TAX RECIPROCITY BENCHMARK STUDY. new text end 15.1 new text begin (a) The Department of Revenue, in conjunction with the Wisconsin Department of new text end 15.2 new text begin Revenue, must conduct a study to determine at least the following: new text end 15.3 new text begin (1) the number of residents of each state who earn income from personal services in new text end 15.4 new text begin the other state; new text end 15.5 new text begin (2) the total amount of income earned by residents of each state who earn income new text end 15.6 new text begin from personal services in the other state; and new text end 15.7 new text begin (3) the change in tax revenue in each state if an income tax reciprocity arrangement new text end 15.8 new text begin were resumed between the two states under which the taxpayers were required to pay new text end 15.9 new text begin income taxes on the income only in their state of residence. new text end 15.10 new text begin (b) The study must be conducted as soon as practicable, using information obtained new text end 15.11 new text begin from each state's income tax returns for tax year 2011, and from any other source of new text end 15.12 new text begin information the departments determine is necessary to complete the study. new text end 15.13 new text begin (c) No later than March 1, 2013, the Department of Revenue must submit a report new text end 15.14 new text begin containing the results of the study to the governor and to the chairs and ranking minority new text end 15.15 new text begin members of the legislative committees having jurisdiction over taxes. new text end 15.16    Sec. 14. new text begin APPROPRIATIONS. new text end 15.17     new text begin Subdivision 1. new text end new text begin Income tax reciprocity benchmark study. new text end new text begin The sum of $409,000 in new text end 15.18 new text begin fiscal year 2012 and $429,000 in fiscal year 2013 is appropriated from the general fund new text end 15.19 new text begin to the commissioner of revenue for the income reciprocity benchmark study required new text end 15.20 new text begin under section 13. The appropriation under this section is onetime and is not added to new text end 15.21 new text begin the agency's base budget. new text end 15.22     new text begin Subd. 2. new text end new text begin Tax checkoff for state budget reserve. new text end new text begin $104,000 in fiscal year 2012 and new text end 15.23 new text begin $37,000 in fiscal year 2013 are appropriated from the general fund to the commissioner of new text end 15.24 new text begin revenue to implement the tax checkoff in Minnesota Statutes, section 290.433. new text end 15.25ARTICLE 2 15.26SALES TAXES 15.27    Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 3, is amended to 15.28read: 15.29    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 15.30to, each of the transactions listed in this subdivision. 15.31    (b) Sale and purchase include: 15.32    (1) any transfer of title or possession, or both, of tangible personal property, whether 15.33absolutely or conditionally, for a consideration in money or by exchange or barter; and 16.1    (2) the leasing of or the granting of a license to use or consume, for a consideration 16.2in money or by exchange or barter, tangible personal property, other than a manufactured 16.3home used for residential purposes for a continuous period of 30 days or more. 16.4    (c) Sale and purchase include the production, fabrication, printing, or processing of 16.5tangible personal property for a consideration for consumers who furnish either directly or 16.6indirectly the materials used in the production, fabrication, printing, or processing. 16.7    (d) Sale and purchase include the preparing for a consideration of food. 16.8Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 16.9to, the following: 16.10    (1) prepared food sold by the retailer; 16.11    (2) soft drinks; 16.12    (3) candy; 16.13    (4) dietary supplements; and 16.14    (5) all food sold through vending machines. 16.15    (e) A sale and a purchase includes the furnishing for a consideration of electricity, 16.16gas, water, or steam for use or consumption within this state. 16.17    (f) A sale and a purchase includes the transfer for a consideration of prewritten 16.18computer software whether delivered electronically, by load and leave, or otherwise. 16.19    (g) A sale and a purchase includes the furnishing for a consideration of the following 16.20services: 16.21    (1) the privilege of admission to places of amusement, recreational areas, or athletic 16.22events, and the making available of amusement devices, tanning facilities, reducing 16.23salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities; 16.24    (2) lodging and related services by a hotel, rooming house, resort, campground, 16.25motel, or trailer camp, including furnishing the guest of the facility with access to 16.26telecommunication services, and the granting of any similar license to use real property 16.27in a specific facility, other than the renting or leasing of it for a continuous period of 16.2830 days or more under an enforceable written agreement that may not be terminated 16.29without prior notice; 16.30    (3) nonresidential parking services, whether on a contractual, hourly, or other 16.31periodic basis, except for parking at a meter; 16.32    (4) the granting of membership in a club, association, or other organization if: 16.33    (i) the club, association, or other organization makes available for the use of its 16.34members sports and athletic facilities, without regard to whether a separate charge is 16.35assessed for use of the facilities; and 17.1    (ii) use of the sports and athletic facility is not made available to the general public 17.2on the same basis as it is made available to members. 17.3Granting of membership means both onetime initiation fees and periodic membership 17.4dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 17.5squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 17.6swimming pools; and other similar athletic or sports facilities; 17.7    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate 17.8material used in road construction, and delivery of concrete block by a third party if 17.9the delivery would be subject to the sales tax if provided by the seller of the concrete 17.10block; and 17.11    (6) services as provided in this clause: 17.12    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 17.13and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 17.14drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 17.15include services provided by coin operated facilities operated by the customer; 17.16    (ii) motor vehicle washing, waxing, and cleaning services, including services 17.17provided by coin operated facilities operated by the customer, and rustproofing, 17.18undercoating, and towing of motor vehicles; 17.19    (iii) building and residential cleaning, maintenance, and disinfecting services and 17.20pest control and exterminating services; 17.21    (iv) detective, security, burglar, fire alarm, and armored car services; but not 17.22including services performed within the jurisdiction they serve by off-duty licensed peace 17.23officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 17.24organization for monitoring and electronic surveillance of persons placed on in-home 17.25detention pursuant to court order or under the direction of the Minnesota Department 17.26of Corrections; 17.27    (v) pet grooming services; 17.28    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 17.29and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 17.30plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 17.31clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 17.32public utility lines. Services performed under a construction contract for the installation of 17.33shrubbery, plants, sod, trees, bushes, and similar items are not taxable; 17.34    (vii) massages, except when provided by a licensed health care facility or 17.35professional or upon written referral from a licensed health care facility or professional for 17.36treatment of illness, injury, or disease; and 18.1    (viii) the furnishing of lodging, board, and care services for animals in kennels and 18.2other similar arrangements, but excluding veterinary and horse boarding services. 18.3    In applying the provisions of this chapter, the terms "tangible personal property" and 18.4"retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), and 18.5the provision of these taxable services, unless specifically provided otherwise. Services 18.6performed by an employee for an employer are not taxable. Services performed by a 18.7partnership or association for another partnership or association are not taxable if one 18.8of the entities owns or controls more than 80 percent of the voting power of the equity 18.9interest in the other entity. Services performed between members of an affiliated group 18.10of corporations are not taxable. 18.11For purposes of the preceding sentence, "affiliated group of corporations" means 18.12those entities that would be classified as members of an affiliated group as defined under 18.13United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b). 18.14    For purposes of clause (5), "road construction" means construction of (1) public 18.15roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 18.16metropolitan area up to the point of the emergency response location sign. 18.17    (h) A sale and a purchase includes the furnishing for a consideration of tangible 18.18personal property or taxable services by the United States or any of its agencies or 18.19instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 18.20subdivisions. 18.21    (i) A sale and a purchase includes the furnishing for a consideration of 18.22telecommunications services, ancillary services associated with telecommunication 18.23services, cable television services, new text begin and new text end direct satellite services, and ring tones. 18.24Telecommunication services include, but are not limited to, the following services, 18.25as defined in section 297A.669: air-to-ground radiotelephone service, mobile 18.26telecommunication service, postpaid calling service, prepaid calling service, prepaid 18.27wireless calling service, and private communication services. The services in this 18.28paragraph are taxed to the extent allowed under federal law. 18.29    (j) A sale and a purchase includes the furnishing for a consideration of installation if 18.30the installation charges would be subject to the sales tax if the installation were provided 18.31by the seller of the item being installed. 18.32    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 18.33to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 18.34the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 18.3559B.02, subdivision 11. 19.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 19.2 new text begin June 30, 2011. new text end 19.3    Sec. 2. Minnesota Statutes 2010, section 297A.67, subdivision 7, is amended to read: 19.4    Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical 19.5devices for human use are exempt: 19.6    (1) drugs, including over-the-counter drugs; 19.7    (2) single-use finger-pricking devices for the extraction of blood and other single-use 19.8devices and single-use diagnostic agents used in diagnosing, monitoring, or treating 19.9diabetes; 19.10    (3) insulin and medical oxygen for human use, regardless of whether prescribed 19.11or sold over the counter; 19.12    (4) prosthetic devices; 19.13    (5) durable medical equipment for home use only; 19.14    (6) mobility enhancing equipment; 19.15    (7) prescription corrective eyeglasses; and 19.16    (8) kidney dialysis equipment, including repair and replacement parts. 19.17    (b) new text begin Items purchased in transactions covered by: new text end 19.18 new text begin (1) Medicare as defined under title XVIII of the Social Security Act, United States new text end 19.19 new text begin Code, title 42, sections 1395, et seq.; or new text end 19.20 new text begin (2) Medicaid as defined under title XIX of the Social Security Act, United States new text end 19.21 new text begin Code, title 42, sections 1396, et seq. new text end 19.22 new text begin (c) new text end For purposes of this subdivision: 19.23    (1) "Drug" means a compound, substance, or preparation, and any component of 19.24a compound, substance, or preparation, other than food and food ingredients, dietary 19.25supplements, or alcoholic beverages that is: 19.26    (i) recognized in the official United States Pharmacopoeia, official Homeopathic 19.27Pharmacopoeia of the United States, or official National Formulary, and supplement 19.28to any of them; 19.29    (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention 19.30of disease; or 19.31    (iii) intended to affect the structure or any function of the body. 19.32    (2) "Durable medical equipment" means equipment, including repair and 19.33replacement parts new text begin , including single patient use items new text end , but not including mobility enhancing 19.34equipment, that: 19.35    (i) can withstand repeated use; 20.1    (ii) is primarily and customarily used to serve a medical purpose; 20.2    (iii) generally is not useful to a person in the absence of illness or injury; and 20.3    (iv) is not worn in or on the body. 20.4    For purposes of this clause, "repair and replacement parts" includes all components 20.5or attachments used in conjunction with the durable medical equipment, but does not 20.6include new text begin including new text end repair and replacement parts which are for single patient use only. 20.7    (3) "Mobility enhancing equipment" means equipment, including repair and 20.8replacement parts, but not including durable medical equipment, that: 20.9    (i) is primarily and customarily used to provide or increase the ability to move from 20.10one place to another and that is appropriate for use either in a home or a motor vehicle; 20.11    (ii) is not generally used by persons with normal mobility; and 20.12    (iii) does not include any motor vehicle or equipment on a motor vehicle normally 20.13provided by a motor vehicle manufacturer. 20.14    (4) "Over-the-counter drug" means a drug that contains a label that identifies the 20.15product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The 20.16label must include a "drug facts" panel or a statement of the active ingredients with a list of 20.17those ingredients contained in the compound, substance, or preparation. Over-the-counter 20.18drugs do not include grooming and hygiene products, regardless of whether they otherwise 20.19meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions, 20.20shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens. 20.21    (5) "Prescribed" and "prescription" means a direction in the form of an order, 20.22formula, or recipe issued in any form of oral, written, electronic, or other means of 20.23transmission by a duly licensed health care professional. 20.24    (6) "Prosthetic device" means a replacement, corrective, or supportive device, 20.25including repair and replacement parts, worn on or in the body to: 20.26    (i) artificially replace a missing portion of the body; 20.27    (ii) prevent or correct physical deformity or malfunction; or 20.28    (iii) support a weak or deformed portion of the body. 20.29Prosthetic device does not include corrective eyeglasses. 20.30    (7) "Kidney dialysis equipment" means equipment that: 20.31    (i) is used to remove waste products that build up in the blood when the kidneys are 20.32not able to do so on their own; and 20.33    (ii) can withstand repeated use, including multiple use by a single patient, 20.34notwithstanding the provisions of clause (2). 20.35 new text begin (8) A transaction is covered by Medicare or Medicaid if any portion of the cost of new text end 20.36 new text begin the item purchased in the transaction is paid for or reimbursed by the federal government new text end 21.1 new text begin or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private new text end 21.2 new text begin insurance company administering the Medicare or Medicaid program on behalf of the new text end 21.3 new text begin federal government or the state of Minnesota, or by a managed care organization for the new text end 21.4 new text begin benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu new text end 21.5 new text begin of conventional Medicare or Medicaid coverage pursuant to agreement with the federal new text end 21.6 new text begin government or the state of Minnesota. new text end 21.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 21.8 new text begin June 30, 2011. new text end 21.9    Sec. 3. Minnesota Statutes 2010, section 297A.67, is amended by adding a subdivision 21.10to read: 21.11     new text begin Subd. 7a. new text end new text begin Accessories and supplies. new text end new text begin Accessories and supplies required for the new text end 21.12 new text begin effective use of durable medical equipment for home use only or purchased in a transaction new text end 21.13 new text begin covered by Medicare or Medicaid, that are not already exempt under subdivision 7 are new text end 21.14 new text begin exempt. Accessories and supplies for the effective use of a prosthetic device that are new text end 21.15 new text begin not already exempt under subdivision 7 are exempt. For purposes of this subdivision new text end 21.16 new text begin "durable medical equipment," "prosthetic device," "Medicare," and "Medicaid" have the new text end 21.17 new text begin definitions given in subdivision 7. new text end 21.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 21.19 new text begin June 30, 2011. new text end 21.20    Sec. 4. Minnesota Statutes 2010, section 297A.67, is amended by adding a subdivision 21.21to read: 21.22     new text begin Subd. 33. new text end new text begin Resale ticket purchases. new text end new text begin For resale purchases made subsequent to the new text end 21.23 new text begin purchase of a ticket from the initial seller, as defined under section 609.807, paragraph new text end 21.24 new text begin (a), the original face value of a ticket, as defined under section 609.807, paragraph (a), new text end 21.25 new text begin is exempt. new text end 21.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 21.27 new text begin June 30, 2011. new text end 21.28    Sec. 5. Minnesota Statutes 2010, section 297A.70, subdivision 1, is amended to read: 21.29    Subdivision 1. Scope. (a) To the extent provided in this section, the gross receipts 21.30from sales of items to or by, and storage, distribution, use, or consumption of items by the 21.31organizations new text begin or units of local government new text end listed in this section are specifically exempted 21.32from the taxes imposed by this chapter. 22.1(b) Notwithstanding any law to the contrary enacted before 1992, only sales to 22.2governments and political subdivisions listed in this section are exempt from the taxes 22.3imposed by this chapter. 22.4(c) "Sales" includes purchases under an installment contract or lease purchase 22.5agreement under section 465.71. 22.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 22.7 new text begin June 30, 2011. new text end 22.8    Sec. 6. Minnesota Statutes 2010, section 297A.70, subdivision 2, is amended to read: 22.9    Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b), 22.10to the following governments and political subdivisions, or to the listed agencies or 22.11instrumentalities of governments and political subdivisions, are exempt: 22.12(1) the United States and its agencies and instrumentalities; 22.13(2) school districts, the University of Minnesota, state universities, community 22.14colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts 22.15Education, and an instrumentality of a political subdivision that is accredited as an 22.16optional/special function school by the North Central Association of Colleges and Schools; 22.17(3) hospitals and nursing homes owned and operated by political subdivisions of 22.18the state of tangible personal property and taxable services used at or by hospitals and 22.19nursing homes; 22.20(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip 22.21operations provided for in section 473.4051; 22.22(5) other states or political subdivisions of other states, if the sale would be exempt 22.23from taxation if it occurred in that state; and 22.24(6) sales to public libraries, public library systems, multicounty, multitype library 22.25systems as defined in section 134.001, county law libraries under chapter 134A, state 22.26agency libraries, the state library under section 480.09, and the Legislative Reference 22.27Library new text begin ; and new text end 22.28 new text begin (7) towns new text end . 22.29(b) This exemption does not apply to the sales of the following products and services: 22.30(1) building, construction, or reconstruction materials purchased by a contractor 22.31or a subcontractor as a part of a lump-sum contract or similar type of contract with a 22.32guaranteed maximum price covering both labor and materials for use in the construction, 22.33alteration, or repair of a building or facility; 23.1(2) construction materials purchased by tax exempt entities or their contractors to 23.2be used in constructing buildings or facilities which will not be used principally by the 23.3tax exempt entities; 23.4(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, 23.5except for leases entered into by the United States or its agencies or instrumentalities; or 23.6(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), 23.7clause (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in 23.8section 297A.67, subdivision 2, except for lodging, prepared food, candy, soft drinks, 23.9and alcoholic beverages purchased directly by the United States or its agencies or 23.10instrumentalities new text begin ; or new text end 23.11 new text begin (5) goods or services purchased by a town that are generally provided by a private new text end 23.12 new text begin business and the purchases would be taxable if made by a private business engaged in the new text end 23.13 new text begin same activity new text end . 23.14(c) As used in this subdivision, "school districts" means public school entities and 23.15districts of every kind and nature organized under the laws of the state of Minnesota, and 23.16any instrumentality of a school district, as defined in section 471.59. 23.17 new text begin (d) As used in this subdivision, "goods or services generally provided by a private new text end 23.18 new text begin business" include, but are not limited to, goods or services provided by liquor stores, gas new text end 23.19 new text begin and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes, new text end 23.20 new text begin and laundromats. "Goods or services generally provided by a private business" do not new text end 23.21 new text begin include housing services, sewer and water services, wastewater treatment, ambulance and new text end 23.22 new text begin other public safety services, correctional services, chore or homemaking services provided new text end 23.23 new text begin to elderly or disabled individuals, or road and street maintenance or lighting. new text end 23.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 23.25 new text begin June 30, 2011. new text end 23.26    Sec. 7. Minnesota Statutes 2010, section 297A.70, subdivision 3, is amended to read: 23.27    Subd. 3. Sales of certain goods and services to government. (a) The following 23.28sales to or use by the specified governments and political subdivisions of the state are 23.29exempt: 23.30    (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and 23.31fire apparatus to a political subdivision; 23.32    (2) machinery and equipment, except for motor vehicles, used directly for mixed 23.33municipal solid waste management services at a solid waste disposal facility as defined in 23.34section 115A.03, subdivision 10; 24.1    (3) chore and homemaking services to a political subdivision of the state to be 24.2provided to elderly or disabled individuals; 24.3    (4) telephone services to the Office of Enterprise Technology that are used to provide 24.4telecommunications services through the enterprise technology revolving fund; 24.5    (5) firefighter personal protective equipment as defined in paragraph (b), if purchased 24.6or authorized by and for the use of an organized fire department, fire protection district, or 24.7fire company regularly charged with the responsibility of providing fire protection to the 24.8state or a political subdivision; 24.9    (6) bullet-resistant body armor that provides the wearer with ballistic and trauma 24.10protection, if purchased by a law enforcement agency of the state or a political subdivision 24.11of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1; 24.12    (7) motor vehicles purchased or leased by political subdivisions of the state if the 24.13vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b), 24.14exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax 24.15under section 297B.03, clause (12); 24.16    (8) equipment designed to process, dewater, and recycle biosolids for wastewater 24.17treatment facilities of political subdivisions, and materials incidental to installation of 24.18that equipment; 24.19    (9) sales to a town of gravel and of machinery, equipment, and accessories, except 24.20motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of 24.21motor vehicles exempt from tax under section , clause (10); 24.22    (10) the removal of trees, bushes, or shrubs for the construction and maintenance 24.23of roads, trails, or firebreaks when purchased by an agency of the state or a political 24.24subdivision of the state; and 24.25    (11) new text begin (10) new text end purchases by the Metropolitan Council or the Department of Transportation 24.26of vehicles and repair parts to equip operations provided for in section 174.90, including, 24.27but not limited to, the Northstar Corridor Rail project. 24.28    (b) For purposes of this subdivision, "firefighters personal protective equipment" 24.29means helmets, including face shields, chin straps, and neck liners; bunker coats and 24.30pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; 24.31protective coveralls; goggles; self-contained breathing apparatus; canister filter masks; 24.32personal alert safety systems; spanner belts; optical or thermal imaging search devices; 24.33and all safety equipment required by the Occupational Safety and Health Administration. 24.34    (c) For purchases of items listed in paragraph (a), clause (11), the tax must be 24.35imposed and collected as if the rate under section 297A.62, subdivision 1, applied and 24.36then refunded in the manner provided in section 297A.75. 25.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 25.2 new text begin June 30, 2011. new text end 25.3    Sec. 8. Minnesota Statutes 2010, section 297A.70, subdivision 8, is amended to read: 25.4    Subd. 8. Regionwide Public safety radio communication system new text begin systems new text end ; 25.5products and services. Products and services including, but not limited to, end user 25.6equipment used for construction, ownership, operation, maintenance, and enhancement 25.7of the backbone system of the regionwide public safety radio communication system 25.8established under sections to new text begin systems, including public safety radio new text end 25.9 new text begin dispatch centers new text end , are exempt. For purposes of this subdivision, backbone system is defined 25.10in section 403.21, subdivision 9. This subdivision is effective for purchases, sales, storage, 25.11use, or consumption for use in the first and second phases of the system, as defined in 25.12section 403.21, subdivisions 3, 10, and 11, that portion of the third phase of the system that 25.13is located in the southeast district of the State Patrol and the counties of Benton, Sherburne, 25.14Stearns, and Wright, and that portion of the system that is located in Itasca County. 25.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 25.16 new text begin December 31, 2009. After December 31, 2013, purchasers may apply for a refund of tax new text end 25.17 new text begin paid for qualifying purchases under this subdivision made after December 31, 2009, and new text end 25.18 new text begin before January 1, 2013, in the manner provided in section 297A.75. new text end 25.19    Sec. 9. Minnesota Statutes 2010, section 297A.75, subdivision 1, is amended to read: 25.20    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the 25.21following exempt items must be imposed and collected as if the sale were taxable and the 25.22rate under section 297A.62, subdivision 1, applied. The exempt items include: 25.23    (1) capital equipment exempt under section 297A.68, subdivision 5; 25.24    (2) building materials for an agricultural processing facility exempt under section 25.25297A.71, subdivision 13 ; 25.26    (3) building materials for mineral production facilities exempt under section 25.27297A.71, subdivision 14 ; 25.28    (4) building materials for correctional facilities under section 297A.71, subdivision 25.293 ; 25.30    (5) building materials used in a residence for disabled veterans exempt under section 25.31297A.71, subdivision 11 ; 25.32    (6) elevators and building materials exempt under section 297A.71, subdivision 12; 25.33    (7) building materials for the Long Lake Conservation Center exempt under section 25.34297A.71, subdivision 17 ; 26.1    (8) materials and supplies for qualified low-income housing under section 297A.71, 26.2subdivision 23 ; 26.3    (9) materials, supplies, and equipment for municipal electric utility facilities under 26.4section 297A.71, subdivision 35; 26.5    (10) equipment and materials used for the generation, transmission, and distribution 26.6of electrical energy and an aerial camera package exempt under section 297A.68, 26.7subdivision 37; 26.8    (11) tangible personal property and taxable services and construction materials, 26.9supplies, and equipment exempt under section 297A.68, subdivision 41; 26.10    (12) commuter rail vehicle and repair parts under section 297A.70, subdivision 26.113, clause (11); 26.12    (13) materials, supplies, and equipment for construction or improvement of projects 26.13and facilities under section 297A.71, subdivision 40; 26.14(14) materials, supplies, and equipment for construction or improvement of a meat 26.15processing facility exempt under section 297A.71, subdivision 41; and 26.16(15) materials, supplies, and equipment for construction, improvement, or expansion 26.17of an aerospace defense manufacturing facility exempt under section 297A.71, subdivision 26.1842 new text begin ; and new text end 26.19 new text begin (16) products and services for a regionwide public safety radio communication new text end 26.20 new text begin system exempt under section 297A.70, subdivision 8, purchased after December 31, new text end 26.21 new text begin 2009, and before January 1, 2013 new text end . 26.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 26.23 new text begin December 31, 2009. After December 31, 2013, purchasers may apply for a refund of tax new text end 26.24 new text begin paid for qualifying purchases under this subdivision made after December 31, 2009, and new text end 26.25 new text begin before January 1, 2013, in the manner provided in section 297A.75. new text end 26.26    Sec. 10. Minnesota Statutes 2010, section 297A.75, subdivision 2, is amended to read: 26.27    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the 26.28commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 26.29must be paid to the applicant. Only the following persons may apply for the refund: 26.30    (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser; 26.31    (2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental 26.32subdivision; 26.33    (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits 26.34provided in United States Code, title 38, chapter 21; 27.1    (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead 27.2property; 27.3    (5) for subdivision 1, clause (8), the owner of the qualified low-income housing 27.4project; 27.5    (6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or 27.6a joint venture of municipal electric utilities; 27.7    (7) for subdivision 1, clauses (10), (11), (14), and (15), the owner of the qualifying 27.8business; and 27.9    (8) for subdivision 1, clauses (12) and new text begin , new text end (13) new text begin , and (16) new text end , the applicant must be the 27.10governmental entity that owns or contracts for the project or facility. 27.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 27.12 new text begin December 31, 2009. After December 31, 2013, purchasers may apply for a refund of tax new text end 27.13 new text begin paid for qualifying purchases under this subdivision made after December 31, 2009, and new text end 27.14 new text begin before January 1, 2013, in the manner provided in section 297A.75. new text end 27.15    Sec. 11. Minnesota Statutes 2010, section 297A.75, subdivision 3, is amended to read: 27.16    Subd. 3. Application. (a) The application must include sufficient information 27.17to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 27.18subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11), 27.19(12), (13), (14), or (15) new text begin , or (16) new text end , the contractor, subcontractor, or builder must furnish to 27.20the refund applicant a statement including the cost of the exempt items and the taxes paid 27.21on the items unless otherwise specifically provided by this subdivision. The provisions of 27.22sections 289A.40 and 289A.50 apply to refunds under this section. 27.23    (b) An applicant may not file more than two applications per calendar year for 27.24refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5. 27.25    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 27.26exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 27.27of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 27.28subdivision 40, must not be filed until after June 30, 2009. 27.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 27.30 new text begin December 31, 2009. After December 31, 2013, purchasers may apply for a refund of tax new text end 27.31 new text begin paid for qualifying purchases under this subdivision made after December 31, 2009, and new text end 27.32 new text begin before January 1, 2013, in the manner provided in section 297A.75. new text end 27.33    Sec. 12. Minnesota Statutes 2010, section 297A.82, subdivision 4, is amended to read: 28.1    Subd. 4. Exemptions. (a) The following transactions are exempt from the tax 28.2imposed in this chapter to the extent provided. 28.3(b) The purchase or use of aircraft previously registered in Minnesota by a 28.4corporation or partnership is exempt if the transfer constitutes a transfer within the 28.5meaning of section 351 or 721 of the Internal Revenue Code. 28.6(c) The sale to or purchase, storage, use, or consumption by a licensed aircraft dealer 28.7of an aircraft for which a commercial use permit has been issued pursuant to section 28.8360.654 is exempt, if the aircraft is resold while the permit is in effect. 28.9(d) Airflight equipment when sold to, or purchased, stored, used, or consumed by 28.10airline companies, as defined in section 270.071, subdivision 4, is exempt. For purposes of 28.11this subdivision, "airflight equipment" includes airplanes and parts necessary for the repair 28.12and maintenance of such airflight equipment, and flight simulators, but does not include 28.13airplanes with a gross weight of less than 30,000 pounds that are used on intermittent or 28.14irregularly timed flights. 28.15(e) Sales of, and the storage, distribution, use, or consumption of aircraft, as defined 28.16in section 360.511 and approved by the Federal Aviation Administration, and which the 28.17seller delivers to a purchaser outside Minnesota or which, without intermediate use, is 28.18shipped or transported outside Minnesota by the purchaser are exempt, but only if the 28.19purchaser is not a resident of Minnesota and provided that the aircraft is not thereafter 28.20returned to a point within Minnesota, except in the course of interstate commerce or 28.21isolated and occasional use, and will be registered in another state or country upon its 28.22removal from Minnesota. This exemption applies even if the purchaser takes possession of 28.23the aircraft in Minnesota and uses the aircraft in the state exclusively for training purposes 28.24for a period not to exceed ten days prior to removing the aircraft from this state. 28.25 new text begin (f) The sale or purchase of aircraft and aircraft equipment, including parts necessary new text end 28.26 new text begin for repair and maintenance of such airflight equipment, as defined under Federal Aviation new text end 28.27 new text begin Regulations, Part 135, that has a maximum certified takeoff weight of 6,000 pounds or new text end 28.28 new text begin more are exempt. new text end 28.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 28.30 new text begin June 30, 2011. new text end 28.31    Sec. 13. Minnesota Statutes 2010, section 297A.99, subdivision 1, is amended to read: 28.32    Subdivision 1. Authorization; scope. (a) A political subdivision of this state may 28.33impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) if 28.34permitted by special law enacted prior to May 20, 2008, or (4) if the political subdivision 28.35enacted and imposed the tax before January 1, 1982, and its predecessor provision. 29.1    (b) This section governs the imposition of a general sales tax by the political 29.2subdivision. The provisions of this section preempt the provisions of any special law: 29.3    (1) enacted before June 2, 1997, or 29.4    (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 29.5provision from this section's rules by reference. 29.6    (c) This section does not apply to or preempt a sales tax on motor vehicles or a 29.7special excise tax on motor vehicles. 29.8    (d) Until after May 31, 2010, a political subdivision may not advertise, promote, 29.9expend funds, or hold a referendum to support imposing a local option sales tax unless 29.10it is for extension of an existing tax or the tax was authorized by a special law enacted 29.11prior to May 20, 2008. 29.12    Sec. 14. Minnesota Statutes 2010, section 297A.99, subdivision 3, is amended to read: 29.13    Subd. 3. Requirements for adoption, use, termination. (a) Imposition of a local 29.14sales tax is subject to approval by voters of the political subdivision at a general election. new text begin new text end 29.15 new text begin The election must be conducted before the governing body of the political subdivision new text end 29.16 new text begin requests legislative approval of the tax. A referendum on the issuance of bonds to be paid new text end 29.17 new text begin from the proceeds of a local sales tax is not subject to sections 275.60 and 275.61. new text end 29.18(b) The proceeds of the tax must be dedicated exclusively to payment of the cost of a 29.19specific capital improvement which is designated at least 90 days before the referendum 29.20on imposition of the tax is conducted. 29.21(c) The tax must terminate after the improvement designated under paragraph (b) 29.22has been completed. 29.23(d) After a sales tax imposed by a political subdivision has expired or been 29.24terminated, the political subdivision is prohibited from imposing a local sales tax for a 29.25period of one year. Notwithstanding subdivision 13, this paragraph applies to all local 29.26sales taxes in effect at the time of or imposed after May 26, 1999. 29.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 29.28    Sec. 15. Laws 1996, chapter 471, article 2, section 29, subdivision 1, as amended by 29.29Laws 2006, chapter 259, article 3, section 3, is amended to read: 29.30    Subdivision 1. Sales tax authorized. new text begin (a) new text end Notwithstanding Minnesota Statutes, 29.31section 477A.016, or any other contrary provision of law, ordinance, or city charter, the 29.32city of Hermantown may, by ordinance, impose an additional sales tax of up to one 29.33percent on sales transactions taxable pursuant to Minnesota Statutes, chapter 297A, that 30.1occur within the city. The proceeds of the tax imposed under this section must be used to 30.2meet the costs of: 30.3    (1) extending a sewer interceptor line; 30.4    (2) construction of a booster pump station, reservoirs, and related improvements 30.5to the water system; and 30.6    (3) construction of a building containing a police and fire station and an 30.7administrative services facility. 30.8 new text begin (b) If the city imposed a sales tax of only one-half of one percent under paragraph (a), new text end 30.9 new text begin it may increase the tax to one percent to fund the purposes under paragraph (a) provided it new text end 30.10 new text begin is approved by the voters at a general or special election held before December 31, 2012. new text end 30.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following compliance by the new text end 30.12 new text begin city of Hermantown with Minnesota Statutes, section 645.021, subdivision 3. new text end 30.13    Sec. 16. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by 30.14Laws 2005, First Special Session chapter 3, article 5, section 28, is amended to read: 30.15    Subd. 3. Use of revenues. new text begin (a) new text end Revenues received from the taxes authorized by 30.16subdivisions 1 and 2 must be used by the city to pay for the cost of collecting and 30.17administering the taxes and to pay for the following projects: 30.18    (1) transportation infrastructure improvements including regional highway and 30.19airport improvements; 30.20    (2) improvements to the civic center complex; 30.21    (3) a municipal water, sewer, and storm sewer project necessary to improve regional 30.22ground water quality; and 30.23    (4) construction of a regional recreation and sports center and other higher education 30.24facilities available for both community and student use. 30.25     new text begin (b) new text end The total amount of capital expenditures or bonds for these projects new text begin listed in new text end 30.26 new text begin paragraph (a) new text end that may be paid from the revenues raised from the taxes authorized in this 30.27section may not exceed $111,500,000. The total amount of capital expenditures or bonds 30.28for the project in clause (4) that may be paid from the revenues raised from the taxes 30.29authorized in this section may not exceed $28,000,000. 30.30 new text begin (c) In addition to the projects authorized in paragraph (a) and not subject to the new text end 30.31 new text begin amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an new text end 30.32 new text begin election under subdivision 5, paragraph (c), use the revenues received from the taxes and new text end 30.33 new text begin bonds authorized in this section to pay the costs of or bonds for the following purposes: new text end 30.34 new text begin (1) $47,000,000 for capital expenditures and bonds for transportation infrastructure new text end 30.35 new text begin improvements including regional highway and airport improvements, but excluding any new text end 31.1 new text begin transportation improvements related to a railroad bypass that would divert rail traffic new text end 31.2 new text begin from the city of Rochester; new text end 31.3 new text begin (2) $26,500,000 for capital expenditures and bonds for higher education facilities in new text end 31.4 new text begin the city; new text end 31.5 new text begin (3) $40,500,000 for capital expenditures and bonds for improvements to regional new text end 31.6 new text begin youth and elder community facilities; new text end 31.7 new text begin (4) $8,000,000 for capital expenditures and bonds for construction of regional public new text end 31.8 new text begin safety facilities; and new text end 31.9 new text begin (5) $38,000,000 for project expenditures and bonds for any economic development new text end 31.10 new text begin purposes authorized under Minnesota Statutes, chapter 469. new text end 31.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 31.12    Sec. 17. Laws 1998, chapter 389, article 8, section 43, subdivision 4, as amended by 31.13Laws 2005, First Special Session chapter 3, article 5, section 29, is amended to read: 31.14    Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota 31.15Statutes, chapter 475, to finance the capital expenditure and improvement projects. 31.16An election to approve up to $71,500,000 in bonds under Minnesota Statutes, section 31.17475.58 , may be held in combination with the election to authorize imposition of the tax 31.18under subdivision 1. Whether to permit imposition of the tax and issuance of bonds 31.19may be posed to the voters as a single question. The question must state that the sales 31.20tax revenues are pledged to pay the bonds, but that the bonds are general obligations 31.21and will be guaranteed by the city's property taxes. An election to approve up to an 31.22additional $40,000,000 of bonds under Minnesota Statutes, section 475.58, may be held 31.23in combination with the election to authorize extension of the tax under subdivision 5, 31.24paragraph (b). new text begin An election to approve bonds under Minnesota Statutes, section 475.58, new text end 31.25 new text begin in an amount not to exceed $160,000,000 plus an amount equal to the costs of issuance new text end 31.26 new text begin of the bonds, may be held in combination with the election to authorize the extension of new text end 31.27 new text begin the tax under subdivision 5, paragraph (c). new text end 31.28     new text begin (b) new text end The city may new text begin shall new text end enter into an agreement with Olmsted County under which the 31.29city and the county agree to jointly undertake and finance certain roadway infrastructure 31.30improvements. The agreement may new text begin shall new text end provide that the city will make available to the 31.31county a portion of the sales tax revenues collected pursuant to the authority granted in 31.32this section and the bonding authority provided in this subdivision. The county may, 31.33pursuant to the agreement, issue its general obligation bonds in a principal amount not 31.34exceeding the amount authorized by its agreement with the city payable primarily from 31.35the sales tax revenues from the city under the agreement. The county's bonds must be 32.1issued in accordance with the provisions of Minnesota Statutes, chapter 475, except that 32.2no election is required for the issuance of the bonds and the bonds are not included in 32.3the net debt of the county. 32.4    (b) new text begin (c) new text end The issuance of bonds under this subdivision is not subject to Minnesota 32.5Statutes, section 275.60. 32.6    (c) new text begin (d) new text end The bonds are not included in computing any debt limitation applicable to the 32.7city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 32.8and interest on the bonds is not subject to any levy limitation. 32.9     new text begin (e) new text end The aggregate principal amount of bonds, plus the aggregate of the taxes used 32.10directly to pay eligible capital expenditures and improvements new text begin for projects listed in new text end 32.11 new text begin subdivision 3, paragraph (a), new text end may not exceed new text begin new text end $111,500,000, plus an amount equal to the 32.12costs related to issuance of the bonds. new text begin The aggregate principal amount of bonds plus the new text end 32.13 new text begin aggregate of the taxes used directly to pay the costs of eligible projects under subdivision new text end 32.14 new text begin 3, paragraph (c), may not exceed $160,000,000 plus an amount equal to the costs of new text end 32.15 new text begin issuance of the bonds. new text end 32.16    (d) new text begin (f) new text end The taxes may be pledged to and used for the payment of the bonds and 32.17any bonds issued to refund them, only if the bonds and any refunding bonds are general 32.18obligations of the city. 32.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 32.20    Sec. 18. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by 32.21Laws 2005, First Special Session chapter 3, article 5, section 30, is amended to read: 32.22    Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and 32.232 expire at the later of (1) December 31, 2009, or (2) when the city council determines 32.24that sufficient funds have been received from the taxes to finance the first $71,500,000 32.25of capital expenditures and bonds for the projects authorized in subdivision 3, including 32.26the amount to prepay or retire at maturity the principal, interest, and premium due on any 32.27bonds issued for the projects under subdivision 4, unless the taxes are extended as allowed 32.28in paragraph (b). Any funds remaining after completion of the project and retirement or 32.29redemption of the bonds shall also be used to fund the projects under subdivision 3. The 32.30taxes imposed under subdivisions 1 and 2 may expire at an earlier time if the city so 32.31determines by ordinance. 32.32    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 32.33other contrary provision of law, ordinance, or city charter, the city of Rochester may, by 32.34ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009, 32.35if approved by the voters of the city at a special election in 2005 or the general election in 33.12006. The question put to the voters must indicate that an affirmative vote would allow 33.2up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000 33.3of bonds to be issued above the amount authorized in the June 23, 1998, referendum for 33.4the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are 33.5extended under this paragraph, the taxes expire when the city council determines that 33.6sufficient funds have been received from the taxes to finance the projects and to prepay 33.7or retire at maturity the principal, interest, and premium due on any bonds issued for the 33.8projects under subdivision 4. Any funds remaining after completion of the project and 33.9retirement or redemption of the bonds may be placed in the general fund of the city. 33.10 new text begin (c) Notwithstanding Minnesota Statutes, sections new text end new text begin and new text end new text begin , or any new text end 33.11 new text begin other contrary provision of law, ordinance, or city charter, the city of Rochester may, by new text end 33.12 new text begin ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond the date the city new text end 33.13 new text begin council determines that sufficient funds have been received from the taxes to finance new text end 33.14 new text begin $111,500,000 of expenditures and bonds for the projects authorized in subdivision 3, new text end 33.15 new text begin paragraph (a), plus an amount equal to the costs of issuance of the bonds and including new text end 33.16 new text begin the amount to prepay or retire at maturity the principal, interest, and premiums due on new text end 33.17 new text begin any bonds issued for the projects under subdivision 4, paragraph (a), if approved by the new text end 33.18 new text begin voters of the city at the general election in 2012. If the election to authorize the additional new text end 33.19 new text begin $160,000,000 of bonds plus an amount equal to the costs of the issuance of the bonds is new text end 33.20 new text begin placed on the general election ballot in 2012, the city may continue to collect the taxes new text end 33.21 new text begin authorized in subdivisions 1 and 2 until December 31, 2012. The question put to the new text end 33.22 new text begin voters must indicate that an affirmative vote would allow sales tax revenues be raised for new text end 33.23 new text begin an extended period of time and an additional $160,000,000 of bonds plus an amount new text end 33.24 new text begin equal to the costs of issuance of the bonds, to be issued above the amount authorized in new text end 33.25 new text begin the previous elections required under paragraphs (a) and (b) for the projects and amounts new text end 33.26 new text begin specified in subdivision 3. The issuance of bonds under this subdivision is not subject to new text end 33.27 new text begin Minnesota Statutes, sections 275.60 and 275.61. If the taxes authorized in subdivisions 1 new text end 33.28 new text begin and 2 are extended under this paragraph, the taxes expire when the city council determines new text end 33.29 new text begin that $160,000,000 has been received from the taxes to finance the projects plus an amount new text end 33.30 new text begin sufficient to prepay or retire at maturity the principal, interest, and premium due on any new text end 33.31 new text begin bonds issued for the projects under subdivision 4, including any bonds issued to refund the new text end 33.32 new text begin bonds. Any funds remaining after completion of the projects and retirement or redemption new text end 33.33 new text begin of the bonds may be placed in the general fund of the city. new text end 33.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 33.35 new text begin governing body of the city of Rochester with Minnesota Statutes, section 645.021, new text end 33.36 new text begin subdivision 3. new text end 34.1    Sec. 19. Laws 2008, chapter 366, article 7, section 19, subdivision 3, is amended to 34.2read: 34.3    Subd. 3. Use of revenues. new text begin Notwithstanding Minnesota Statutes, section 297A.99, new text end 34.4 new text begin subdivision 3, paragraph (b), new text end the proceeds of the tax imposed under this section shall be 34.5used to pay for the costs of acquisition, construction, improvement, and development of 34.6a new text begin regional parks, bicycle trails, park land, open space, and new text end pedestrian bridge new text begin walkways, new text end 34.7 new text begin as described in the city improvement plan adopted by the city council by resolution on new text end 34.8 new text begin December 12, 2006 new text end , and land and buildings for a community and recreation center. The 34.9total amount of revenues from the taxes in subdivisions 1 and 2 that may be used to fund 34.10these projects is $12,000,000 plus any associated bond costs. 34.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 34.12 new text begin governing body of the city of Clearwater with Minnesota Statutes, section 645.021, new text end 34.13 new text begin subdivisions 2 and 3. new text end 34.14    Sec. 20. new text begin CITY OF FERGUS FALLS; SALES AND USE TAX AUTHORIZED. new text end 34.15     new text begin Subdivision 1. new text end new text begin Sales and use tax. new text end new text begin Notwithstanding Minnesota Statutes, section new text end 34.16 new text begin 297A.99, subdivision 1, or 477A.016, or any other provision of law, ordinance, or city new text end 34.17 new text begin charter, as approved by the voters at the November 2, 2010, general election, the city new text end 34.18 new text begin of Fergus Falls may impose by ordinance a sales and use tax of up to one-half of one new text end 34.19 new text begin percent for the purposes specified in subdivision 2. Except as provided in this section, the new text end 34.20 new text begin provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, new text end 34.21 new text begin collection, and enforcement of the tax authorized under this subdivision. new text end 34.22     new text begin Subd. 2. new text end new text begin Use of revenues. new text end new text begin Revenues received from taxes authorized by subdivision new text end 34.23 new text begin 1 must be used by the city of Fergus Falls to pay the cost of collecting the tax and to pay new text end 34.24 new text begin for all or part of the costs of the acquisition and betterment of a regional community ice new text end 34.25 new text begin arena facility. Authorized expenses include, but are not limited to, acquiring property, new text end 34.26 new text begin predesign, design, and paying construction, furnishing, and equipment costs related to new text end 34.27 new text begin the facility and paying debt service on bonds or other obligations issued by the Fergus new text end 34.28 new text begin Falls Port Authority to finance the facility. new text end 34.29     new text begin Subd. 3. new text end new text begin Termination of taxes. new text end new text begin The tax imposed under this section expires when new text end 34.30 new text begin the Fergus Falls City Council determines that sufficient funds have been received from new text end 34.31 new text begin the taxes to finance the facility and to prepay or retire at maturity the principal, interest, new text end 34.32 new text begin and premium due on any bonds, including refunding bonds, issued by the Fergus Falls new text end 34.33 new text begin Port Authority for the facility. Any funds remaining after completion of the facility and new text end 34.34 new text begin retirement or redemption of the bonds may be placed in the general fund of the city of new text end 35.1 new text begin Fergus Falls. The tax imposed under subdivision 1 may expire at an earlier time if the new text end 35.2 new text begin city so determines by ordinance. new text end 35.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after the governing body new text end 35.4 new text begin of the city of Fergus Falls and its chief clerical officer timely comply with Minnesota new text end 35.5 new text begin Statutes, section 645.021, subdivisions 2 and 3. new text end 35.6    Sec. 21. new text begin CITY OF LANESBORO; SALES TAX AUTHORIZED. new text end 35.7     new text begin Subdivision 1. new text end new text begin Sales and use tax authorized. new text end new text begin Notwithstanding Minnesota Statutes, new text end 35.8 new text begin section 477A.016, or any other provision of law, ordinance, or city charter, as approved by new text end 35.9 new text begin the voters at the November 2, 2010, general election, the city of Lanesboro may impose by new text end 35.10 new text begin ordinance a sales and use tax of up to one-half of one percent for the purposes specified in new text end 35.11 new text begin subdivision 2. Except as provided in this section, the provisions of Minnesota Statutes, new text end 35.12 new text begin section 297A.99, govern the imposition of the tax authorized under this subdivision. new text end 35.13     new text begin Subd. 2. new text end new text begin Use of revenues. new text end new text begin Revenues received from the tax authorized under new text end 35.14 new text begin subdivision 1 must be used by the city of Lanesboro to pay the costs of collecting the tax new text end 35.15 new text begin and to pay for all or a part of the improvements to city streets and utility systems, and the new text end 35.16 new text begin betterment of city municipal buildings consisting of (i) street and utility improvements to new text end 35.17 new text begin Calhoun Avenue, Fillmore Avenue, Kenilworth Avenue, Pleasant Street, Kirkwood Street, new text end 35.18 new text begin Auburn Avenue, and Zenith Street, and street light replacement on State Highways 250 new text end 35.19 new text begin and 16; (ii) improvements to utility systems consisting of wastewater treatment facility new text end 35.20 new text begin improvements and electric utility improvements to the Lanesboro High Hazard Dam; and new text end 35.21 new text begin (iii) improvements to the Lanesboro community center, library, and city hall, including new text end 35.22 new text begin paying debt service on bonds or other obligations issued to fund these projects under new text end 35.23 new text begin subdivision 3. The total amount of revenues from the taxes in subdivision 1 that may be new text end 35.24 new text begin used to fund these projects is $800,000 plus any associated bond costs. new text end 35.25     new text begin Subd. 3. new text end new text begin Bonding authority. new text end new text begin The city of Lanesboro may issue bonds under new text end 35.26 new text begin Minnesota Statutes, chapter 475, to pay capital and administrative expenses related to the new text end 35.27 new text begin projects authorized in subdivision 2. An election to approve the bonds under Minnesota new text end 35.28 new text begin Statutes, section 475.58, is not required. The issuance of bonds under this subdivision new text end 35.29 new text begin is not subject to Minnesota Statutes, sections 275.60 and 275.61. The bonds are not new text end 35.30 new text begin included in computing any debt limitation applicable to the city and the levy of taxes new text end 35.31 new text begin under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is new text end 35.32 new text begin not subject to any levy limitation. new text end 35.33 new text begin The aggregate principal amount of the bonds plus the aggregate of the taxes used new text end 35.34 new text begin directly to pay costs of the projects listed in subdivision 2 may not exceed $800,000, plus new text end 35.35 new text begin an amount equal to the costs related to issuance of the bonds and capitalized interest. new text end 36.1 new text begin The taxes authorized in subdivision 1 may be pledged and used for payments of new text end 36.2 new text begin the bonds and bonds issued to refund them, only if the bonds and any refunding bonds new text end 36.3 new text begin are general obligations of the city. new text end 36.4     new text begin Subd. 4. new text end new text begin Termination of tax. new text end new text begin The tax imposed under subdivision 1 expires when new text end 36.5 new text begin the Lanesboro City Council determines that sufficient funds have been raised from the new text end 36.6 new text begin taxes to finance the projects authorized under subdivision 2 and to prepay or retire at new text end 36.7 new text begin maturity the principal, interest, and premium due on any bonds issued under subdivision 3. new text end 36.8 new text begin Any funds remaining after completion of the project and retirement or redemption of the new text end 36.9 new text begin bonds may be placed in the general fund of the city. The tax imposed under subdivision 1 new text end 36.10 new text begin may expire at an earlier time if the city so determines by ordinance. new text end 36.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after the governing body of new text end 36.12 new text begin the city of Lanesboro and its chief clerical officer comply with Minnesota Statutes, section new text end 36.13 new text begin 645.021, subdivisions 2 and 3. new text end 36.14    Sec. 22. new text begin CITY OF HUTCHINSON; TAXES AUTHORIZED. new text end 36.15     new text begin Subdivision 1. new text end new text begin Sales and use tax. new text end new text begin Notwithstanding Minnesota Statutes, section new text end 36.16 new text begin 477A.016, or any other provision of law, ordinance, or city charter, as approved by new text end 36.17 new text begin the voters at a referendum held at the 2010 general election, the city of Hutchinson new text end 36.18 new text begin may impose by ordinance a sales and use tax of up to one-half of one percent for the new text end 36.19 new text begin purposes specified in subdivision 3. Except as otherwise provided in this section, new text end 36.20 new text begin Minnesota Statutes, section 297A.99, governs the imposition, administration, collection, new text end 36.21 new text begin and enforcement of the tax authorized under this subdivision. Minnesota Statutes, section new text end 36.22 new text begin 297A.99, subdivision 1, paragraph (d), does not apply to this section. new text end 36.23     new text begin Subd. 2. new text end new text begin Excise tax authorized. new text end new text begin Notwithstanding Minnesota Statutes, section new text end 36.24 new text begin 477A.016, or any other provision of law, ordinance, or city charter, the city of Hutchinson new text end 36.25 new text begin may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up new text end 36.26 new text begin to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person new text end 36.27 new text begin engaged within the city in the business of selling motor vehicles at retail. new text end 36.28     new text begin Subd. 3. new text end new text begin Use of revenues. new text end new text begin Revenues received from the taxes authorized by this new text end 36.29 new text begin section must be used to pay the cost of collecting and administering the tax and to finance new text end 36.30 new text begin the costs of constructing the water treatment facility and renovating the wastewater new text end 36.31 new text begin treatment facility in the city of Hutchinson. Authorized costs include, but are not limited new text end 36.32 new text begin to, construction and engineering costs of the projects and associated bond costs. new text end 36.33     new text begin Subd. 4. new text end new text begin Termination of tax. new text end new text begin The taxes authorized under subdivisions 1 and 2 new text end 36.34 new text begin terminate at the earlier of: (1) 18 years after the date of initial imposition of the tax; or new text end 36.35 new text begin (2) when the Hutchinson City Council determines that the amount of revenues raised is new text end 37.1 new text begin sufficient to pay for the projects under subdivision 3, plus the amount needed to finance new text end 37.2 new text begin the capital and administrative costs for the projects specified in subdivision 3, and to repay new text end 37.3 new text begin or retire at maturity the principal, interest, and premium due on any bonds issued for the new text end 37.4 new text begin projects. Any funds remaining after completion of the projects specified in subdivision new text end 37.5 new text begin 3 and retirement or redemption of the associated bonds may be placed in the general new text end 37.6 new text begin fund of the city. The taxes imposed under subdivisions 1 and 2 may expire at an earlier new text end 37.7 new text begin time if the city so determines by ordinance. new text end 37.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 37.9 new text begin governing body of the city of Hutchinson with Minnesota Statutes, section 645.021, new text end 37.10 new text begin subdivisions 2 and 3. new text end 37.11ARTICLE 3 37.12TAX AIDS AND CREDITS 37.13    Section 1. Minnesota Statutes 2010, section 97A.061, subdivision 1, is amended to 37.14read: 37.15    Subdivision 1. Applicability; amount. (a) The commissioner shall annually make a 37.16payment to each county having public hunting areas and game refuges. Money to make 37.17the payments is annually appropriated for that purpose from the general fund. Except as 37.18provided in paragraph (b), this section does not apply to state trust fund land and other 37.19state land not purchased for game refuge or public hunting purposes. Except as provided 37.20in paragraph (b), the payment shall be the greatest of: 37.21(1) 35 new text begin 30.8 new text end percent of the gross receipts from all special use permits and leases of 37.22land acquired for public hunting and game refuges; 37.23(2) 50 new text begin 44 new text end cents per acre on land purchased actually used for public hunting or game 37.24refuges; or 37.25(3) three-fourths of one new text begin .66 new text end percent of the appraised value of purchased land actually 37.26used for public hunting and game refuges. 37.27(b) The payment shall be 50 percent of the dollar amount adjusted for inflation as 37.28determined under section 477A.12, subdivision 1, paragraph (a), clause (1), multiplied 37.29by the number of acres of land in the county that are owned by another state agency for 37.30military purposes and designated as a game refuge under section 97A.085. 37.31(c) The payment must be reduced by the amount paid under subdivision 3 for 37.32croplands managed for wild geese. 38.1(d) The appraised value is the purchase price for five years after acquisition. 38.2The appraised value shall be determined by the county assessor every five years after 38.3acquisition. 38.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 38.5 new text begin 2011 and thereafter. new text end 38.6    Sec. 2. Minnesota Statutes 2010, section 97A.061, subdivision 3, is amended to read: 38.7    Subd. 3. Goose management croplands. (a) The commissioner shall make a 38.8payment on July 1 of each year to each county where the state owns more than 1,000 acres 38.9of crop land, for wild goose management purposes. The payment shall be equal to new text begin 88 new text end 38.10 new text begin percent of new text end the taxes assessed on comparable, privately owned, adjacent land. Money to 38.11make the payments is annually appropriated for that purpose from the general fund. The 38.12county treasurer shall allocate and distribute the payment as provided in subdivision 2. 38.13(b) The land used for goose management under this subdivision is exempt from 38.14taxation as provided in sections 272.01 and 273.19. 38.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 38.16 new text begin 2011 and thereafter. new text end 38.17    Sec. 3. Minnesota Statutes 2010, section 270A.03, subdivision 7, is amended to read: 38.18    Subd. 7. Refund. "Refund" means an individual income tax refund or political 38.19contribution refund, pursuant to chapter 290, or a property tax credit or refund, pursuant to 38.20chapter 290A, or a sustainable forest tax payment to a claimant under chapter 290C. 38.21For purposes of this chapter, lottery prizes, as set forth in section 349A.08, 38.22subdivision 8 , and amounts granted to persons by the legislature on the recommendation 38.23of the joint senate-house of representatives Subcommittee on Claims shall be treated 38.24as refunds. 38.25In the case of a joint property tax refund payable to spouses under chapter 290A, 38.26the refund shall be considered as belonging to each spouse in the proportion of the total 38.27refund that equals each spouse's proportion of the total income determined under section 38.28290A.03, subdivision 3 . In the case of a joint income tax refund under chapter 289A, the 38.29refund shall be considered as belonging to each spouse in the proportion of the total 38.30refund that equals each spouse's proportion of the total taxable income determined under 38.31section 290.01, subdivision 29. The commissioner shall remit the entire refund to the 38.32claimant agency, which shall, upon the request of the spouse who does not owe the debt, 38.33determine the amount of the refund belonging to that spouse and refund the amount to 39.1that spouse. For court fines, fees, and surcharges and court-ordered restitution under 39.2section 611A.04, subdivision 2, the notice provided by the commissioner of revenue under 39.3section 270A.07, subdivision 2, paragraph (b), serves as the appropriate legal notice 39.4to the spouse who does not owe the debt. 39.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for refund claims based on new text end 39.6 new text begin contributions made after June 30, 2011. new text end 39.7    Sec. 4. Minnesota Statutes 2010, section 273.13, subdivision 21b, is amended to read: 39.8    Subd. 21b. Tax capacity. (a) Gross tax capacity means the product of the 39.9appropriate gross class rates in this section and market values. 39.10(b) Net tax capacity means the product of the appropriate net class rates in this 39.11section and market values new text begin , minus the property's tax capacity reduction determined under new text end 39.12 new text begin section 273.1384, subdivision 1, if applicable new text end . 39.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 39.14 new text begin thereafter. new text end 39.15    Sec. 5. Minnesota Statutes 2010, section 273.13, subdivision 23, is amended to read: 39.16    Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural 39.17land that is homesteaded, along with any class 2b rural vacant land that is contiguous to 39.18the class 2a land under the same ownership. The market value of the house and garage 39.19and immediately surrounding one acre of land has the same class rates as class 1a or 1b 39.20property under subdivision 22. The value of the remaining land including improvements 39.21up to the first tier valuation limit of agricultural homestead property has a net class rate 39.22of 0.5 percent of market value. The remaining property over the first tier has a class rate 39.23of one percent of market value. For purposes of this subdivision, the "first tier valuation 39.24limit of agricultural homestead property" and "first tier" means the limit certified under 39.25section 273.11, subdivision 23. 39.26    (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 39.27are agricultural land and buildings. Class 2a property has a net class rate of one percent of 39.28market value, unless it is part of an agricultural homestead under paragraph (a). Class 39.292a property must also include any property that would otherwise be classified as 2b, 39.30but is interspersed with class 2a property, including but not limited to sloughs, wooded 39.31wind shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback 39.32requirement, and other similar land that is impractical for the assessor to value separately 40.1from the rest of the property or that is unlikely to be able to be sold separately from 40.2the rest of the property. 40.3    An assessor may classify the part of a parcel described in this subdivision that is used 40.4for agricultural purposes as class 2a and the remainder in the class appropriate to its use. 40.5    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof, 40.6that are unplatted real estate, rural in character and not used for agricultural purposes, 40.7including land used for growing trees for timber, lumber, and wood and wood products, 40.8that is not improved with a structure. The presence of a minor, ancillary nonresidential 40.9structure as defined by the commissioner of revenue does not disqualify the property from 40.10classification under this paragraph. Any parcel of 20 acres or more improved with a 40.11structure that is not a minor, ancillary nonresidential structure must be split-classified, and 40.12ten acres must be assigned to the split parcel containing the structure. Class 2b property 40.13has a net class rate of one percent of market value unless it is part of an agricultural 40.14homestead under paragraph (a), or qualifies as class 2c under paragraph (d). 40.15    (d) Class 2c managed forest land consists of no less than 20 and no more than 40.161,920 acres statewide per taxpayer that is being managed under a forest management 40.17plan that meets the requirements of chapter 290C, but is not enrolled in the sustainable 40.18forest resource management incentive program. It has a class rate of .65 percent, 40.19provided that the owner of the property must apply to the assessor in order for the 40.20property to initially qualify for the reduced rate and provide the information required 40.21by the assessor to verify that the property qualifies for the reduced rate. If the assessor 40.22receives the application and information before May 1 in an assessment year, the property 40.23qualifies beginning with that assessment year. If the assessor receives the application 40.24and information after April 30 in an assessment year, the property may not qualify until 40.25the next assessment year. The commissioner of natural resources must concur that the 40.26land is qualified. The commissioner of natural resources shall annually provide county 40.27assessors verification information on a timely basis. The presence of a minor, ancillary 40.28nonresidential structure as defined by the commissioner of revenue does not disqualify 40.29the property from classification under this paragraph. new text begin For purposes of this paragraph, new text end 40.30 new text begin a "forest management plan" means a written document providing a framework for new text end 40.31 new text begin site-specific healthy, productive, and sustainable forest resources. A forest management new text end 40.32 new text begin plan must include at least the following: (i) forest management goals for the land; (ii) a new text end 40.33 new text begin reliable field inventory of the individual forest cover types, their age, and density; (iii) a new text end 40.34 new text begin description of the soil type and quality; (iv) an aerial photo and/or map of the vegetation new text end 40.35 new text begin and other natural features of the land clearly indicating the boundaries of the land and of new text end 40.36 new text begin the forest land; (v) the proposed future conditions of the land; (vi) prescriptions to meet new text end 41.1 new text begin proposed future conditions of the land; (vii) a recommended timetable for implementing new text end 41.2 new text begin the prescribed activities; and (viii) a legal description of the land encompassing the new text end 41.3 new text begin parcels included in the plan. All management activities prescribed in a plan must be in new text end 41.4 new text begin accordance with the recommended timber harvesting and forest management guidelines. new text end 41.5 new text begin The commissioner of natural resources shall provide a framework for plan content and new text end 41.6 new text begin updating and revising plans. new text end 41.7    (e) Agricultural land as used in this section means contiguous acreage of ten 41.8acres or more, used during the preceding year for agricultural purposes. "Agricultural 41.9purposes" as used in this section means the raising, cultivation, drying, or storage of 41.10agricultural products for sale, or the storage of machinery or equipment used in support 41.11of agricultural production by the same farm entity. For a property to be classified as 41.12agricultural based only on the drying or storage of agricultural products, the products 41.13being dried or stored must have been produced by the same farm entity as the entity 41.14operating the drying or storage facility. "Agricultural purposes" also includes enrollment 41.15in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal 41.16Conservation Reserve Program as contained in Public Law 99-198 or a similar state 41.17or federal conservation program if the property was classified as agricultural (i) under 41.18this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment. 41.19Agricultural classification shall not be based upon the market value of any residential 41.20structures on the parcel or contiguous parcels under the same ownership. 41.21    (f) Real estate of less than ten acres, which is exclusively or intensively used for 41.22raising or cultivating agricultural products, shall be considered as agricultural land. To 41.23qualify under this paragraph, property that includes a residential structure must be used 41.24intensively for one of the following purposes: 41.25    (i) for drying or storage of grain or storage of machinery or equipment used to 41.26support agricultural activities on other parcels of property operated by the same farming 41.27entity; 41.28    (ii) as a nursery, provided that only those acres used to produce nursery stock are 41.29considered agricultural land; 41.30    (iii) for livestock or poultry confinement, provided that land that is used only for 41.31pasturing and grazing does not qualify; or 41.32    (iv) for market farming; for purposes of this paragraph, "market farming" means the 41.33cultivation of one or more fruits or vegetables or production of animal or other agricultural 41.34products for sale to local markets by the farmer or an organization with which the farmer 41.35is affiliated. 42.1    (g) Land shall be classified as agricultural even if all or a portion of the agricultural 42.2use of that property is the leasing to, or use by another person for agricultural purposes. 42.3    Classification under this subdivision is not determinative for qualifying under 42.4section 273.111. 42.5    (h) The property classification under this section supersedes, for property tax 42.6purposes only, any locally administered agricultural policies or land use restrictions that 42.7define minimum or maximum farm acreage. 42.8    (i) The term "agricultural products" as used in this subdivision includes production 42.9for sale of: 42.10    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 42.11animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 42.12bees, and apiary products by the owner; 42.13    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned 42.14for agricultural use; 42.15    (3) the commercial boarding of horses, which may include related horse training and 42.16riding instruction, if the boarding is done on property that is also used for raising pasture 42.17to graze horses or raising or cultivating other agricultural products as defined in clause (1); 42.18    (4) property which is owned and operated by nonprofit organizations used for 42.19equestrian activities, excluding racing; 42.20    (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed 42.21under section 97A.115; 42.22    (6) insects primarily bred to be used as food for animals; 42.23    (7) trees, grown for sale as a crop, including short rotation woody crops, and not 42.24sold for timber, lumber, wood, or wood products; and 42.25    (8) maple syrup taken from trees grown by a person licensed by the Minnesota 42.26Department of Agriculture under chapter 28A as a food processor. 42.27    (j) If a parcel used for agricultural purposes is also used for commercial or industrial 42.28purposes, including but not limited to: 42.29    (1) wholesale and retail sales; 42.30    (2) processing of raw agricultural products or other goods; 42.31    (3) warehousing or storage of processed goods; and 42.32    (4) office facilities for the support of the activities enumerated in clauses (1), (2), 42.33and (3), 42.34the assessor shall classify the part of the parcel used for agricultural purposes as class 42.351b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 42.36use. The grading, sorting, and packaging of raw agricultural products for first sale is 43.1considered an agricultural purpose. A greenhouse or other building where horticultural 43.2or nursery products are grown that is also used for the conduct of retail sales must be 43.3classified as agricultural if it is primarily used for the growing of horticultural or nursery 43.4products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 43.5those products. Use of a greenhouse or building only for the display of already grown 43.6horticultural or nursery products does not qualify as an agricultural purpose. 43.7    (k) The assessor shall determine and list separately on the records the market value 43.8of the homestead dwelling and the one acre of land on which that dwelling is located. If 43.9any farm buildings or structures are located on this homesteaded acre of land, their market 43.10value shall not be included in this separate determination. 43.11    (l) Class 2d airport landing area consists of a landing area or public access area of 43.12a privately owned public use airport. It has a class rate of one percent of market value. 43.13To qualify for classification under this paragraph, a privately owned public use airport 43.14must be licensed as a public airport under section 360.018. For purposes of this paragraph, 43.15"landing area" means that part of a privately owned public use airport properly cleared, 43.16regularly maintained, and made available to the public for use by aircraft and includes 43.17runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. 43.18A landing area also includes land underlying both the primary surface and the approach 43.19surfaces that comply with all of the following: 43.20    (i) the land is properly cleared and regularly maintained for the primary purposes of 43.21the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 43.22facilities for servicing, repair, or maintenance of aircraft is not included as a landing area; 43.23    (ii) the land is part of the airport property; and 43.24    (iii) the land is not used for commercial or residential purposes. 43.25The land contained in a landing area under this paragraph must be described and certified 43.26by the commissioner of transportation. The certification is effective until it is modified, 43.27or until the airport or landing area no longer meets the requirements of this paragraph. 43.28For purposes of this paragraph, "public access area" means property used as an aircraft 43.29parking ramp, apron, or storage hangar, or an arrival and departure building in connection 43.30with the airport. 43.31    (m) Class 2e consists of land with a commercial aggregate deposit that is not actively 43.32being mined and is not otherwise classified as class 2a or 2b, provided that the land is not 43.33located in a county that has elected to opt-out of the aggregate preservation program as 43.34provided in section 273.1115, subdivision 6. It has a class rate of one percent of market 43.35value. To qualify for classification under this paragraph, the property must be at least 44.1ten contiguous acres in size and the owner of the property must record with the county 44.2recorder of the county in which the property is located an affidavit containing: 44.3    (1) a legal description of the property; 44.4    (2) a disclosure that the property contains a commercial aggregate deposit that is not 44.5actively being mined but is present on the entire parcel enrolled; 44.6    (3) documentation that the conditional use under the county or local zoning 44.7ordinance of this property is for mining; and 44.8    (4) documentation that a permit has been issued by the local unit of government 44.9or the mining activity is allowed under local ordinance. The disclosure must include a 44.10statement from a registered professional geologist, engineer, or soil scientist delineating 44.11the deposit and certifying that it is a commercial aggregate deposit. 44.12    For purposes of this section and section 273.1115, "commercial aggregate deposit" 44.13means a deposit that will yield crushed stone or sand and gravel that is suitable for use 44.14as a construction aggregate; and "actively mined" means the removal of top soil and 44.15overburden in preparation for excavation or excavation of a commercial deposit. 44.16    (n) When any portion of the property under this subdivision or subdivision 22 begins 44.17to be actively mined, the owner must file a supplemental affidavit within 60 days from 44.18the day any aggregate is removed stating the number of acres of the property that is 44.19actively being mined. The acres actively being mined must be (1) valued and classified 44.20under subdivision 24 in the next subsequent assessment year, and (2) removed from the 44.21aggregate resource preservation property tax program under section 273.1115, if the 44.22land was enrolled in that program. Copies of the original affidavit and all supplemental 44.23affidavits must be filed with the county assessor, the local zoning administrator, and the 44.24Department of Natural Resources, Division of Land and Minerals. A supplemental 44.25affidavit must be filed each time a subsequent portion of the property is actively mined, 44.26provided that the minimum acreage change is five acres, even if the actual mining activity 44.27constitutes less than five acres. 44.28(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are 44.29not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions 44.30in section 14.386 concerning exempt rules do not apply. 44.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2011, payable new text end 44.32 new text begin in 2012, and thereafter. new text end 44.33    Sec. 6. Minnesota Statutes 2010, section 273.1384, subdivision 1, is amended to read: 44.34    Subdivision 1. Residential homestead market value credit new text begin tax capacity new text end 44.35 new text begin reduction new text end . Each county auditor shall determine a homestead credit new text begin tax capacity reduction new text end 45.1for each class 1a, 1b, and 2a homestead property within the county equal to 0.4 percent of 45.2the first $76,000 of market value of the property minus .09 percent of the market value 45.3in excess of $76,000. The credit new text begin tax capacity reduction new text end amount may not be less than 45.4zero. In the case of an agricultural or resort homestead, only the market value of the 45.5house, garage, and immediately surrounding one acre of land is eligible in determining 45.6the property's homestead credit new text begin tax capacity reduction new text end . In the case of a property that is 45.7classified as part homestead and part nonhomestead, (i) the credit new text begin tax capacity reduction new text end 45.8shall apply only to the homestead portion of the property, but (ii) if a portion of a property 45.9is classified as nonhomestead solely because not all the owners occupy the property, not 45.10all the owners have qualifying relatives occupying the property, or solely because not all 45.11the spouses of owners occupy the property, the credit new text begin tax capacity reduction new text end amount shall 45.12be initially computed as if that nonhomestead portion were also in the homestead class and 45.13then prorated to the owner-occupant's percentage of ownership. For the purpose of this 45.14section, when an owner-occupant's spouse does not occupy the property, the percentage of 45.15ownership for the owner-occupant spouse is one-half of the couple's ownership percentage. 45.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 45.17 new text begin thereafter. new text end 45.18    Sec. 7. Minnesota Statutes 2010, section 273.1384, subdivision 3, is amended to read: 45.19    Subd. 3. Credit reimbursements. The county auditor shall determine the tax 45.20reductions allowed under this section new text begin subdivision 2 new text end within the county for each taxes 45.21payable year and shall certify that amount to the commissioner of revenue as a part of the 45.22abstracts of tax lists submitted by the county auditors under section 275.29. Any prior 45.23year adjustments shall also be certified on the abstracts of tax lists. The commissioner 45.24shall review the certifications for accuracy, and may make such changes as are deemed 45.25necessary, or return the certification to the county auditor for correction. The credits new text begin new text end 45.26 new text begin credit new text end under this section must be used to proportionately reduce the net tax capacity-based 45.27property tax payable to each local taxing jurisdiction as provided in section 273.1393. 45.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 45.29 new text begin thereafter. new text end 45.30    Sec. 8. Minnesota Statutes 2010, section 273.1384, subdivision 4, is amended to read: 45.31    Subd. 4. Payment. (a) The commissioner of revenue shall reimburse each local 45.32taxing jurisdiction, other than school districts, for the tax reductions granted under this 45.33section new text begin subdivision 2 new text end in two equal installments on October 31 and December 26 of the 46.1taxes payable year for which the reductions are granted, including in each payment 46.2the prior year adjustments certified on the abstracts for that taxes payable year. The 46.3reimbursements related to tax increments shall be issued in one installment each year on 46.4December 26. 46.5(b) The commissioner of revenue shall certify the total of the tax reductions granted 46.6under this section new text begin subdivision 2 new text end for each taxes payable year within each school district to 46.7the commissioner of the Department of Education and the commissioner of education shall 46.8pay the reimbursement amounts to each school district as provided in section 273.1392. 46.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 46.10 new text begin thereafter. new text end 46.11    Sec. 9. Minnesota Statutes 2010, section 273.1384, is amended by adding a subdivision 46.12to read: 46.13     new text begin Subd. 7. new text end new text begin Credit reductions and limitation; counties and cities. new text end new text begin In 2011, the new text end 46.14 new text begin market value credit reimbursement payment to each county and city authorized under new text end 46.15 new text begin subdivision 4 may not exceed the reimbursement payment received by the county or city new text end 46.16 new text begin for taxes payable in 2010. new text end 46.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for credit reimbursements in 2011. new text end 46.18    Sec. 10. Minnesota Statutes 2010, section 273.1393, is amended to read: 46.19273.1393 COMPUTATION OF NET PROPERTY TAXES. 46.20    Notwithstanding any other provisions to the contrary, "net" property taxes are 46.21determined by subtracting the credits in the order listed from the gross tax: 46.22    (1) disaster credit as provided in sections 273.1231 to 273.1235; 46.23    (2) powerline credit as provided in section 273.42; 46.24    (3) agricultural preserves credit as provided in section 473H.10; 46.25    (4) enterprise zone credit as provided in section 469.171; 46.26    (5) disparity reduction credit; 46.27    (6) conservation tax credit as provided in section 273.119; 46.28    (7) homestead and agricultural credits new text begin credit new text end as provided in section 273.1384; 46.29    (8) taconite homestead credit as provided in section 273.135; 46.30    (9) supplemental homestead credit as provided in section 273.1391; and 46.31    (10) the bovine tuberculosis zone credit, as provided in section 273.113. 46.32    The combination of all property tax credits must not exceed the gross tax amount. 47.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 47.2 new text begin thereafter. new text end 47.3    Sec. 11. Minnesota Statutes 2010, section 273.1398, subdivision 3, is amended to read: 47.4    Subd. 3. Disparity reduction aid. The amount of disparity aid certified new text begin in 2012 new text end 47.5for each taxing new text begin school new text end district within each unique taxing jurisdiction for taxes payable in 47.6the prior year shall be multiplied by the ratio of (1) the jurisdiction's tax capacity using 47.7the class rates for taxes payable in the year for which aid is being computed, to (2) its tax 47.8capacity using the class rates for taxes payable in the year prior to that for which aid is 47.9being computed, both based upon market values for taxes payable in the year prior to 47.10that for which aid is being computed. If the commissioner determines that insufficient 47.11information is available to reasonably and timely calculate the numerator in this ratio 47.12for the first taxes payable year that a class rate change or new class rate is effective, 47.13the commissioner shall omit the effects of that class rate change or new class rate when 47.14calculating this ratio for aid payable in that taxes payable year. For aid payable in the 47.15year following a year for which such omission was made, the commissioner shall use in 47.16the denominator for the class that was changed or created, the tax capacity for taxes 47.17payable two years prior to that in which the aid is payable, based on market values for 47.18taxes payable in the year prior to that for which aid is being computed new text begin is equal to the new text end 47.19 new text begin amount certified for taxes payable in 2011 new text end . 47.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 47.21 new text begin thereafter. new text end 47.22    Sec. 12. Minnesota Statutes 2010, section 273.1398, subdivision 4, is amended to read: 47.23    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989, 47.24class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1) 47.25the property is located in a border city that has an enterprise zone designated pursuant 47.26to section 469.168, subdivision 4; (2) the property is located in a city with a population 47.27greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the 47.28city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city 47.29in another state; and (4) the adjacent city in the other state has a population of greater than 47.305,000 and less than 75,000 according to the 1980 decennial census. 47.31    (b) new text begin For taxes payable in 2012, new text end the credit is new text begin 75 percent of new text end an amount sufficient to 47.32reduce (i) the taxes levied on class 4a property to 2.3 percent of the property's market 47.33value and (ii) the tax on class 3a and class 3b property to 2.3 percent of market value. 48.1 new text begin (c) For taxes payable in 2013, the credit is 50 percent of an amount sufficient to new text end 48.2 new text begin reduce (i) the taxes levied on class 4a property to 2.3 percent of the property's market new text end 48.3 new text begin value and (ii) the tax on class 3a and class 3b property to 2.3 percent of market value. new text end 48.4 new text begin (d) For taxes payable in 2014, the credit is 25 percent of an amount sufficient to new text end 48.5 new text begin reduce (i) the taxes levied on class 4a property to 2.3 percent of the property's market new text end 48.6 new text begin value and (ii) the tax on class 3a and class 3b property to 2.3 percent of market value. new text end 48.7    (c) new text begin (e) new text end The county auditor shall annually certify the costs of the credits to the 48.8Department of Revenue. The department shall reimburse local governments for the 48.9property taxes forgone as the result of the credits in proportion to their total levies. 48.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 48.11 new text begin thereafter. new text end 48.12    Sec. 13. Minnesota Statutes 2010, section 275.08, subdivision 1a, is amended to read: 48.13    Subd. 1a. Computation of tax capacity. For taxes payable in 1989, the county 48.14auditor shall compute the gross tax capacity for each parcel according to the class rates 48.15specified in section . The gross tax capacity will be the appropriate class rate 48.16multiplied by the parcel's market value. For taxes payable in 1990 and subsequent years, 48.17The county auditor shall compute the net tax capacity for each parcel according to the 48.18class rates specified in new text begin as defined under new text end section 273.13 new text begin , subdivision 21b new text end . The net tax 48.19capacity will be the appropriate class rate multiplied by the parcel's market value. 48.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 48.21 new text begin thereafter. new text end 48.22    Sec. 14. new text begin [275.761] MAINTENANCE OF EFFORT REQUIREMENTS new text end 48.23 new text begin REDUCED. new text end 48.24 new text begin (a) Notwithstanding any law to the contrary and except as provided in paragraphs (b) new text end 48.25 new text begin and (c), the amounts required to be expended under the maintenance of effort requirements new text end 48.26 new text begin for counties under sections 134.34, 245.4835, 256F.10, and 256F.13, are reduced to 90 new text end 48.27 new text begin percent of the amounts required for 2011. new text end 48.28 new text begin (b) This section does not permit a county to reduce compliance with maintenance of new text end 48.29 new text begin effort requirements to the extent that the reduction would: new text end 48.30 new text begin (1) require the state to expend additional money or incur additional costs; or new text end 48.31 new text begin (2) cause a reduction in the receipt by the state or the county of federal funds. new text end 48.32 new text begin (c) The commissioner of management and budget may determine the maintenance new text end 48.33 new text begin of effort requirements that are not permitted, in whole or in part, to be reduced under new text end 49.1 new text begin paragraph (b). The commissioner shall publish these determinations on the department's new text end 49.2 new text begin Web site and no county may reduce compliance with a maintenance of effort requirement new text end 49.3 new text begin that the commissioner determines is not subject to reduction. new text end 49.4 new text begin (d) Notwithstanding any law to the contrary, the amounts required to be expended new text end 49.5 new text begin under the maintenance of effort requirements for all statutory and home rule charter cities new text end 49.6 new text begin under section 134.34 are reduced to 90 percent of the amounts required for 2011. new text end 49.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for maintenance of effort new text end 49.8 new text begin requirements in 2012 and 2013. new text end 49.9    Sec. 15. Minnesota Statutes 2010, section 276.04, subdivision 2, is amended to read: 49.10    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the 49.11printing of the tax statements. The commissioner of revenue shall prescribe the form of 49.12the property tax statement and its contents. The tax statement must not state or imply 49.13that property tax credits are paid by the state of Minnesota. The statement must contain 49.14a tabulated statement of the dollar amount due to each taxing authority and the amount 49.15of the state tax from the parcel of real property for which a particular tax statement is 49.16prepared. The dollar amounts attributable to the county, the state tax, the voter approved 49.17school tax, the other local school tax, the township or municipality, and the total of 49.18the metropolitan special taxing districts as defined in section 275.065, subdivision 3, 49.19paragraph (i), must be separately stated. The amounts due all other special taxing districts, 49.20if any, may be aggregated except that any levies made by the regional rail authorities in the 49.21county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 49.22398A shall be listed on a separate line directly under the appropriate county's levy. If the 49.23county levy under this paragraph includes an amount for a lake improvement district as 49.24defined under sections 103B.501 to 103B.581, the amount attributable for that purpose 49.25must be separately stated from the remaining county levy amount. In the case of Ramsey 49.26County, if the county levy under this paragraph includes an amount for public library 49.27service under section 134.07, the amount attributable for that purpose may be separated 49.28from the remaining county levy amount. The amount of the tax on homesteads qualifying 49.29under the senior citizens' property tax deferral program under chapter 290B is the total 49.30amount of property tax before subtraction of the deferred property tax amount. The 49.31amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any, 49.32must also be separately stated. The dollar amounts, including the dollar amount of any 49.33special assessments, may be rounded to the nearest even whole dollar. For purposes of this 49.34section whole odd-numbered dollars may be adjusted to the next higher even-numbered 50.1dollar. The amount of market value excluded under section 273.11, subdivision 16, if any, 50.2must also be listed on the tax statement. 50.3    (b) The property tax statements for manufactured homes and sectional structures 50.4taxed as personal property shall contain the same information that is required on the 50.5tax statements for real property. 50.6    (c) Real and personal property tax statements must contain the following information 50.7in the order given in this paragraph. The information must contain the current year tax 50.8information in the right column with the corresponding information for the previous year 50.9in a column on the left: 50.10    (1) the property's estimated market value under section 273.11, subdivision 1; 50.11    (2) the property's taxable market value after reductions under section 273.11, 50.12subdivisions 1a and 16 ; 50.13    (3) the property's gross tax, before credits; 50.14    (4) for homestead residential and agricultural properties, the credits new text begin credit new text end under 50.15section 273.1384; 50.16    (5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 50.17273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of 50.18credit received under section 273.135 must be separately stated and identified as "taconite 50.19tax relief"; and 50.20    (6) the net tax payable in the manner required in paragraph (a). 50.21    (d) If the county uses envelopes for mailing property tax statements and if the county 50.22agrees, a taxing district may include a notice with the property tax statement notifying 50.23taxpayers when the taxing district will begin its budget deliberations for the current 50.24year, and encouraging taxpayers to attend the hearings. If the county allows notices to 50.25be included in the envelope containing the property tax statement, and if more than 50.26one taxing district relative to a given property decides to include a notice with the tax 50.27statement, the county treasurer or auditor must coordinate the process and may combine 50.28the information on a single announcement. 50.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 50.30 new text begin thereafter. new text end 50.31    Sec. 16. Minnesota Statutes 2010, section 289A.50, subdivision 1, is amended to read: 50.32    Subdivision 1. General right to refund. (a) Subject to the requirements of this 50.33section and section 289A.40, a taxpayer who has paid a tax in excess of the taxes lawfully 50.34due and who files a written claim for refund will be refunded or credited the overpayment 50.35of the tax determined by the commissioner to be erroneously paid. 51.1(b) The claim must specify the name of the taxpayer, the date when and the period 51.2for which the tax was paid, the kind of tax paid, the amount of the tax that the taxpayer 51.3claims was erroneously paid, the grounds on which a refund is claimed, and other 51.4information relative to the payment and in the form required by the commissioner. An 51.5income tax, estate tax, or corporate franchise tax return, or amended return claiming an 51.6overpayment constitutes a claim for refund. 51.7(c) When, in the course of an examination, and within the time for requesting a 51.8refund, the commissioner determines that there has been an overpayment of tax, the 51.9commissioner shall refund or credit the overpayment to the taxpayer and no demand 51.10is necessary. If the overpayment exceeds $1, the amount of the overpayment must 51.11be refunded to the taxpayer. If the amount of the overpayment is less than $1, the 51.12commissioner is not required to refund. In these situations, the commissioner does not 51.13have to make written findings or serve notice by mail to the taxpayer. 51.14(d) If the amount allowable as a credit for withholding, estimated taxes, or dependent 51.15care exceeds the tax against which the credit is allowable, the amount of the excess is 51.16considered an overpayment. The refund allowed by section 290.06, subdivision 23, is also 51.17considered an overpayment. The requirements of section 270C.33 do not apply to the 51.18refunding of such an overpayment shown on the original return filed by a taxpayer. 51.19(e) If the entertainment tax withheld at the source exceeds by $1 or more the taxes, 51.20penalties, and interest reported in the return of the entertainment entity or imposed by 51.21section 290.9201, the excess must be refunded to the entertainment entity. If the excess is 51.22less than $1, the commissioner need not refund that amount. 51.23(f) If the surety deposit required for a construction contract exceeds the liability of 51.24the out-of-state contractor, the commissioner shall refund the difference to the contractor. 51.25(g) An action of the commissioner in refunding the amount of the overpayment does 51.26not constitute a determination of the correctness of the return of the taxpayer. 51.27(h) There is appropriated from the general fund to the commissioner of revenue the 51.28amount necessary to pay refunds allowed under this section. 51.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for refund claims based on new text end 51.30 new text begin contributions made after June 30, 2011. new text end 51.31    Sec. 17. Minnesota Statutes 2010, section 290.01, subdivision 6, is amended to read: 51.32    Subd. 6. Taxpayer. The term "taxpayer" means any person or corporation subject to 51.33a tax imposed by this chapter. For purposes of section 290.06, subdivision 23, the term 51.34"taxpayer" means an individual eligible to vote in Minnesota under section . 52.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for refund claims based on new text end 52.2 new text begin contributions made after June 30, 2011. new text end 52.3    Sec. 18. Minnesota Statutes 2010, section 290A.03, subdivision 11, is amended to read: 52.4    Subd. 11. Rent constituting property taxes. "Rent constituting property taxes" 52.5means 19 new text begin 15 new text end percent of the gross rent actually paid in cash, or its equivalent, or the portion 52.6of rent paid in lieu of property taxes, in any calendar year by a claimant for the right 52.7of occupancy of the claimant's Minnesota homestead in the calendar year, and which 52.8rent constitutes the basis, in the succeeding calendar year of a claim for relief under this 52.9chapter by the claimant. 52.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for claims based on rent paid in new text end 52.11 new text begin 2010 and following years. new text end 52.12    Sec. 19. Minnesota Statutes 2010, section 290A.03, subdivision 13, is amended to read: 52.13    Subd. 13. Property taxes payable. "Property taxes payable" means the property tax 52.14exclusive of special assessments, penalties, and interest payable on a claimant's homestead 52.15after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2, 52.16and any other state paid property tax credits in any calendar year, and after any refund 52.17claimed and allowable under section 290A.04, subdivision 2h, that is first payable in 52.18the year that the property tax is payable. In the case of a claimant who makes ground 52.19lease payments, "property taxes payable" includes the amount of the payments directly 52.20attributable to the property taxes assessed against the parcel on which the house is located. 52.21No apportionment or reduction of the "property taxes payable" shall be required for the 52.22use of a portion of the claimant's homestead for a business purpose if the claimant does not 52.23deduct any business depreciation expenses for the use of a portion of the homestead in the 52.24determination of federal adjusted gross income. For homesteads which are manufactured 52.25homes as defined in section 273.125, subdivision 8, and for homesteads which are park 52.26trailers taxed as manufactured homes under section 168.012, subdivision 9, "property 52.27taxes payable" shall also include 19 new text begin 15 new text end percent of the gross rent paid in the preceding 52.28year for the site on which the homestead is located. When a homestead is owned by 52.29two or more persons as joint tenants or tenants in common, such tenants shall determine 52.30between them which tenant may claim the property taxes payable on the homestead. If 52.31they are unable to agree, the matter shall be referred to the commissioner of revenue 52.32whose decision shall be final. Property taxes are considered payable in the year prescribed 52.33by law for payment of the taxes. 53.1In the case of a claim relating to "property taxes payable," the claimant must have 53.2owned and occupied the homestead on January 2 of the year in which the tax is payable 53.3and (i) the property must have been classified as homestead property pursuant to section 53.4273.124 , on or before December 15 of the assessment year to which the "property taxes 53.5payable" relate; or (ii) the claimant must provide documentation from the local assessor 53.6that application for homestead classification has been made on or before December 15 53.7of the year in which the "property taxes payable" were payable and that the assessor has 53.8approved the application. 53.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for claims based on rent paid in new text end 53.10 new text begin 2010 and following years. new text end 53.11    Sec. 20. Minnesota Statutes 2010, section 290A.04, subdivision 2, is amended to read: 53.12    Subd. 2. Homeowners. A claimant whose property taxes payable are in excess 53.13of the percentage of the household income stated below shall pay an amount equal to 53.14the percent of income shown for the appropriate household income level along with the 53.15percent to be paid by the claimant of the remaining amount of property taxes payable. 53.16The state refund equals the amount of property taxes payable that remain, up to the state 53.17refund amount shown below. 53.18 53.19 53.20 Household Income Percent of Income Percent Paid by Claimant Maximum State Refund 53.21 $0 to 1,189 1.0 percent 15 percent $ 1,850 53.22 1,190 to 2,379 1.1 percent 15 percent $ 1,850 53.23 2,380 to 3,589 1.2 percent 15 percent $ 1,800 53.24 3,590 to 4,789 1.3 percent 20 percent $ 1,800 53.25 4,790 to 5,979 1.4 percent 20 percent $ 1,730 53.26 5,980 to 8,369 1.5 percent 20 percent $ 1,730 53.27 8,370 to 9,559 1.6 percent 25 percent $ 1,670 53.28 9,560 to 10,759 1.7 percent 25 percent $ 1,670 53.29 10,760 to 11,949 1.8 percent 25 percent $ 1,610 53.30 11,950 to 13,139 1.9 percent 30 percent $ 1,610 53.31 13,140 to 14,349 2.0 percent 30 percent $ 1,540 53.32 14,350 to 16,739 2.1 percent 30 percent $ 1,540 53.33 16,740 to 17,929 2.2 percent 35 percent $ 1,480 53.34 17,930 to 19,119 2.3 percent 35 percent $ 1,480 53.35 19,120 to 20,319 2.4 percent 35 percent $ 1,420 53.36 20,320 to 25,099 2.5 percent 40 percent $ 1,420 53.37 25,100 to 28,679 2.6 percent 40 percent $ 1,360 53.38 28,680 to 35,849 2.7 percent 40 percent $ 1,360 54.1 35,850 to 41,819 2.8 percent 45 percent $ 1,240 54.2 41,820 to 47,799 3.0 percent 45 percent $ 1,240 54.3 47,800 to 53,779 3.2 percent 45 percent $ 1,110 54.4 53,780 to 59,749 3.5 percent 50 percent $ 990 54.5 59,750 to 65,729 3.5 percent 50 percent $ 870 54.6 65,730 to 69,319 3.5 percent 50 percent $ 740 54.7 69,320 to 71,719 3.5 percent 50 percent $ 610 54.8 71,720 to 74,619 3.5 percent 50 percent $ 500 54.9 74,620 to 77,519 3.5 percent 50 percent $ 370 54.10 54.11 54.12 new text begin Household Income new text end new text begin Percent of Income new text end new text begin Percent Paid by new text end new text begin Claimant new text end new text begin Maximum new text end new text begin State new text end new text begin Refund new text end 54.13 new text begin $0 to 1,549 new text end new text begin 1.0 percent new text end new text begin ten percent new text end new text begin $ new text end new text begin 2,500 new text end 54.14 new text begin 1,550 to 3,089 new text end new text begin 1.1 percent new text end new text begin ten percent new text end new text begin $ new text end new text begin 2,500 new text end 54.15 new text begin 3,090 to 4,669 new text end new text begin 1.2 percent new text end new text begin ten percent new text end new text begin $ new text end new text begin 2,500 new text end 54.16 new text begin 4,670 to 6,229 new text end new text begin 1.3 percent new text end new text begin 15 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.17 new text begin 6,230 to 7,769 new text end new text begin 1.4 percent new text end new text begin 15 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.18 new text begin 7,770 to 10,879 new text end new text begin 1.5 percent new text end new text begin 15 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.19 new text begin 10,880 to 12,429 new text end new text begin 1.6 percent new text end new text begin 20 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.20 new text begin 12,430 to 13,989 new text end new text begin 1.7 percent new text end new text begin 20 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.21 new text begin 13,990 to 15,539 new text end new text begin 1.8 percent new text end new text begin 20 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.22 new text begin 15,540 to 17,079 new text end new text begin 1.9 percent new text end new text begin 25 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.23 new text begin 17,080 to 18,659 new text end new text begin 2.0 percent new text end new text begin 25 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.24 new text begin 18,660 to 21,759 new text end new text begin 2.1 percent new text end new text begin 25 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.25 new text begin 21,760 to 23,309 new text end new text begin 2.2 percent new text end new text begin 25 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.26 new text begin 23,310 to 24,859 new text end new text begin 2.3 percent new text end new text begin 25 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.27 new text begin 24,860 to 26,419 new text end new text begin 2.4 percent new text end new text begin 25 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.28 new text begin 26,420 to 32,629 new text end new text begin 2.5 percent new text end new text begin 30 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.29 new text begin 32,630 to 37,279 new text end new text begin 2.6 percent new text end new text begin 30 percent new text end new text begin $ new text end new text begin 2,500 new text end 54.30 new text begin 37,280 to 46,609 new text end new text begin 2.7 percent new text end new text begin 30 percent new text end new text begin $ new text end new text begin 2,000 new text end 54.31 new text begin 46,610 to 54,369 new text end new text begin 2.8 percent new text end new text begin 35 percent new text end new text begin $ new text end new text begin 2,000 new text end 54.32 new text begin 54,370 to 62,139 new text end new text begin 2.8 percent new text end new text begin 35 percent new text end new text begin $ new text end new text begin 1,750 new text end 54.33 new text begin 62,140 to 69,909 new text end new text begin 3.0 percent new text end new text begin 35 percent new text end new text begin $ new text end new text begin 1,440 new text end 54.34 new text begin 69,910 to 77,679 new text end new text begin 3.0 percent new text end new text begin 40 percent new text end new text begin $ new text end new text begin 1,290 new text end 54.35 new text begin 77,680 to 84,449 new text end new text begin 3.0 percent new text end new text begin 40 percent new text end new text begin $ new text end new text begin 1,130 new text end 54.36 new text begin 85,450 to 90,119 new text end new text begin 3.5 percent new text end new text begin 45 percent new text end new text begin $ new text end new text begin 960 new text end 54.37 new text begin 90,120 to 93,239 new text end new text begin 3.5 percent new text end new text begin 45 percent new text end new text begin $ new text end new text begin 790 new text end 54.38 new text begin 93,240 to 97,009 new text end new text begin 3.5 percent new text end new text begin 50 percent new text end new text begin $ new text end new text begin 650 new text end 54.39 new text begin 97,010 to 100,779 new text end new text begin 3.5 percent new text end new text begin 50 percent new text end new text begin $ new text end new text begin 480 new text end 54.40    The payment made to a claimant shall be the amount of the state refund calculated 54.41under this subdivision. No payment is allowed if the claimant's household income is 54.42$77,520 new text begin $100,780 new text end or more. 55.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with refunds based on new text end 55.2 new text begin taxes payable in 2012. new text end 55.3    Sec. 21. Minnesota Statutes 2010, section 290A.04, subdivision 4, is amended to read: 55.4    Subd. 4. Inflation adjustment. new text begin (a) new text end Beginning for property tax refunds payable in 55.5calendar year 2002, the commissioner shall annually adjust the dollar amounts of the 55.6income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation. 55.7The commissioner shall make the inflation adjustments in accordance with section 1(f) of 55.8the Internal Revenue Code, except that for purposes of this subdivision the percentage 55.9increase shall be determined new text begin as provided in this subdivision. new text end 55.10 new text begin (b) In adjusting the dollar amounts of the income thresholds and the maximum new text end 55.11 new text begin refunds under subdivision 2 for inflation, the percentage increase shall be determined from new text end 55.12 new text begin the year ending on June 30, 2011, to the year ending on June 30 of the year preceding that new text end 55.13 new text begin in which the refund is payable. new text end 55.14 new text begin (c) In adjusting the dollar amounts of the income thresholds and the maximum new text end 55.15 new text begin refunds under subdivision 2a for inflation, the percentage increase shall be determined new text end 55.16from the year ending on June 30, 2000, to the year ending on June 30 of the year preceding 55.17that in which the refund is payable. 55.18 new text begin (d) new text end The commissioner shall use the appropriate percentage increase to annually 55.19adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for 55.20inflation without regard to whether or not the income tax brackets are adjusted for inflation 55.21in that year. The commissioner shall round the thresholds and the maximum amounts, 55.22as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall 55.23round it up to the next $10 amount. 55.24 new text begin (e) new text end The commissioner shall annually announce the adjusted refund schedule at the 55.25same time provided under section 290.06. The determination of the commissioner under 55.26this subdivision is not a rule under the Administrative Procedure Act. 55.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning for refunds based on new text end 55.28 new text begin taxes payable in 2013. new text end 55.29    Sec. 22. Minnesota Statutes 2010, section 477A.0124, is amended by adding a 55.30subdivision to read: 55.31     new text begin Subd. 6. new text end new text begin Aid payments in 2011 and 2012. new text end new text begin Notwithstanding total aids calculated or new text end 55.32 new text begin certified for 2011 under subdivisions 3, 4, and 5, for 2011 and 2012, each county shall new text end 55.33 new text begin receive an aid distribution under this section equal to the lesser of (1) the total amount of new text end 55.34 new text begin aid it received under this section in 2010 after the reductions under sections 477A.0133 new text end 56.1 new text begin and 477A.0134, or (2) the total amount the county is certified to receive in 2011 under new text end 56.2 new text begin subdivisions 3 to 5. new text end 56.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 56.4 new text begin 2011 and 2012. new text end 56.5    Sec. 23. Minnesota Statutes 2010, section 477A.013, subdivision 9, is amended to read: 56.6    Subd. 9. City aid distribution. (a) In calendar year 2009 and thereafter, each 56.7city shall receive an aid distribution equal to the sum of (1) the city formula aid under 56.8subdivision 8, and (2) its city aid base. 56.9    (b) For aids payable in 2011 new text begin 2013 new text end only, the total aid in the previous year for any 56.10city shall mean the amount of aid it was certified to receive for aids payable in 2010 new text begin 2012 new text end 56.11under this section minus the amount of its aid reduction under section . For aids 56.12payable in 2012 new text begin 2014 new text end and thereafter, the total aid in the previous year for any city means 56.13the amount of aid it was certified to receive under this section in the previous payable year. 56.14    (c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed 56.15the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution 56.16plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total 56.17aid for any city with a population of 2,500 or more may not be less than its total aid under 56.18this section in the previous year minus the lesser of $10 multiplied by its population, or ten 56.19percent of its net levy in the year prior to the aid distribution. 56.20    (d) For aids payable in 2010 and thereafter, the total aid for a city with a population 56.21less than 2,500 must not be less than the amount it was certified to receive in the 56.22previous year minus the lesser of $10 multiplied by its population, or five percent of its 56.232003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a 56.24population less than 2,500 must not be less than what it received under this section in the 56.25previous year unless its total aid in calendar year 2008 was aid under section 477A.011, 56.26subdivision 36, paragraph (s), in which case its minimum aid is zero. 56.27    (e) A city's aid loss under this section may not exceed $300,000 in any year in 56.28which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or 56.29greater than the appropriation under that subdivision in the previous year, unless the 56.30city has an adjustment in its city net tax capacity under the process described in section 56.31469.174, subdivision 28 . 56.32    (f) If a city's net tax capacity used in calculating aid under this section has decreased 56.33in any year by more than 25 percent from its net tax capacity in the previous year due to 56.34property becoming tax-exempt Indian land, the city's maximum allowed aid increase 56.35under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the 57.1year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 57.2resulting from the property becoming tax exempt. 57.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 57.4 new text begin 2012 and thereafter. new text end 57.5    Sec. 24. Minnesota Statutes 2010, section 477A.013, is amended by adding a 57.6subdivision to read: 57.7     new text begin Subd. 11. new text end new text begin Aid payments in 2011 and 2012. new text end new text begin Notwithstanding aids calculated or new text end 57.8 new text begin certified for 2011 under subdivision 9, for 2011 and 2012, each city shall receive an aid new text end 57.9 new text begin distribution under this section equal to the lesser of (1) the total amount of aid it received new text end 57.10 new text begin under this section in 2010 after the reductions under sections 477A.0133 and 477A.0134, new text end 57.11 new text begin and reduced by the amount of payments made under section 477A.011, subdivision new text end 57.12 new text begin 36, paragraphs (y) and (z), or (2) the amount it was certified to receive in 2011 under new text end 57.13 new text begin subdivision 9. In 2011 only, a city that qualifies for the aid base adjustment under section new text end 57.14 new text begin 477A.011, subdivision 36, paragraph (aa), shall receive the amount that it was certified to new text end 57.15 new text begin receive in 2011. In 2012, a city that qualifies for the aid base adjustment under section new text end 57.16 new text begin 477A.011, subdivision 36, paragraph (aa), shall receive the amount that it was certified new text end 57.17 new text begin to receive in 2011, minus the aid base adjustment provided under section 477A.011, new text end 57.18 new text begin subdivision 36, paragraph (aa). new text end 57.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar years new text end 57.20 new text begin 2011 and 2012. new text end 57.21    Sec. 25. Minnesota Statutes 2010, section 477A.03, is amended to read: 57.22477A.03 APPROPRIATION. 57.23    Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed 57.24by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the 57.25commissioner of revenue. 57.26    Subd. 2a. Cities. For aids payable in 2011 new text begin 2013 new text end and thereafter, the total aid paid 57.27under section 477A.013, subdivision 9, is $527,100,646 new text begin $426,438,012 new text end . 57.28    Subd. 2b. Counties. (a) For aids payable in 2011 new text begin 2013 new text end and thereafter, the total aid 57.29payable under section 477A.0124, subdivision 3, is $96,395,000 new text begin $80,795,000 new text end . Each 57.30calendar year, $500,000 shall be retained by the commissioner of revenue to make 57.31reimbursements to the commissioner of management and budget for payments made 57.32under section 611.27. For calendar year 2004, the amount shall be in addition to the 57.33payments authorized under section 477A.0124, subdivision 1. For calendar year 2005 58.1and subsequent years, the amount shall be deducted from the appropriation under 58.2this paragraph. The reimbursements shall be to defray the additional costs associated 58.3with court-ordered counsel under section 611.27. Any retained amounts not used for 58.4reimbursement in a year shall be included in the next distribution of county need aid 58.5that is certified to the county auditors for the purpose of property tax reduction for the 58.6next taxes payable year. 58.7    (b) For aids payable in 2011 new text begin 2013 new text end and thereafter, the total aid under section 58.8477A.0124, subdivision 4 , is $101,309,575 new text begin $84,909,575 new text end . The commissioner of 58.9management and budget shall bill the commissioner of revenue for the cost of preparation 58.10of local impact notes as required by section 3.987, not to exceed $207,000 in fiscal year 58.112004 and thereafter. The commissioner of education shall bill the commissioner of 58.12revenue for the cost of preparation of local impact notes for school districts as required by 58.13section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner 58.14of revenue shall deduct the amounts billed under this paragraph from the appropriation 58.15under this paragraph. The amounts deducted are appropriated to the commissioner of 58.16management and budget and the commissioner of education for the preparation of local 58.17impact notes. 58.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 58.19 new text begin 2012 and thereafter. new text end 58.20    Sec. 26. Minnesota Statutes 2010, section 477A.11, subdivision 1, is amended to read: 58.21    Subdivision 1. Terms. For the purpose of sections 477A.11 to new text begin 477A.14 new text end , 58.22the terms defined in this section have the meanings given them. 58.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 58.24 new text begin 2011 and thereafter. new text end 58.25    Sec. 27. Minnesota Statutes 2010, section 477A.12, subdivision 1, is amended to read: 58.26    Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred 58.27by counties and towns in support of natural resources lands, the following amounts are 58.28annually appropriated to the commissioner of natural resources from the general fund for 58.29transfer to the commissioner of revenue. The commissioner of revenue shall pay the 58.30transferred funds to counties as required by sections 477A.11 to new text begin 477A.14 new text end . 58.31The amounts are: 58.32(1) for acquired natural resources land, $3, as adjusted for inflation under section 58.33, new text begin $4.517 new text end multiplied by the total number of acres of acquired natural resources 59.1land or, at the county's option three-fourths of one new text begin 0.66 new text end percent of the appraised value of 59.2all acquired natural resources land in the county, whichever is greater; 59.3(2) 75 cents, as adjusted for inflation under section , new text begin $1.129 new text end multiplied by 59.4the number of acres of county-administered other natural resources land; 59.5(3) 75 cents, as adjusted for inflation under section , new text begin $1.129 new text end multiplied by 59.6the total number of acres of land utilization project land; and 59.7(4) 37.5 cents, as adjusted for inflation under section , new text begin 56.5 cents new text end multiplied 59.8by the number of acres of commissioner-administered other natural resources land located 59.9in each county as of July 1 of each year prior to the payment year. 59.10(b) The amount determined under paragraph (a), clause (1), is payable for land 59.11that is acquired from a private owner and owned by the Department of Transportation 59.12for the purpose of replacing wetland losses caused by transportation projects, but only 59.13if the county contains more than 500 acres of such land at the time the certification is 59.14made under subdivision 2. 59.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 59.16 new text begin 2011 and thereafter. new text end 59.17    Sec. 28. Minnesota Statutes 2010, section 477A.14, subdivision 1, is amended to read: 59.18    Subdivision 1. General distribution. Except as provided in subdivision 2 or in 59.19section 97A.061, subdivision 5, 40 percent of the total payment to the county shall be 59.20deposited in the county general revenue fund to be used to provide property tax levy 59.21reduction. The remainder shall be distributed by the county in the following priority: 59.22(a) 37.5 cents, as adjusted for inflation under section , new text begin 56.5 cents new text end for 59.23each acre of county-administered other natural resources land shall be deposited in a 59.24resource development fund to be created within the county treasury for use in resource 59.25development, forest management, game and fish habitat improvement, and recreational 59.26development and maintenance of county-administered other natural resources land. Any 59.27county receiving less than $5,000 annually for the resource development fund may elect to 59.28deposit that amount in the county general revenue fund; 59.29(b) From the funds remaining, within 30 days of receipt of the payment to the 59.30county, the county treasurer shall pay each organized township 30 cents, as adjusted for 59.31inflation under section , new text begin 45.2 cents new text end for each acre of acquired natural resources 59.32land and each acre of land described in section 477A.12, subdivision 1, paragraph (b), and 59.337.5 cents, as adjusted for inflation under section , new text begin 11.3 cents new text end for each acre of 59.34other natural resources land and each acre of land utilization project land located within its 59.35boundaries. Payments for natural resources lands not located in an organized township 60.1shall be deposited in the county general revenue fund. Payments to counties and townships 60.2pursuant to this paragraph shall be used to provide property tax levy reduction, except 60.3that of the payments for natural resources lands not located in an organized township, the 60.4county may allocate the amount determined to be necessary for maintenance of roads in 60.5unorganized townships. Provided that, if the total payment to the county pursuant to 60.6section 477A.12 is not sufficient to fully fund the distribution provided for in this clause, 60.7the amount available shall be distributed to each township and the county general revenue 60.8fund on a pro rata basis; and 60.9(c) Any remaining funds shall be deposited in the county general revenue fund. 60.10Provided that, if the distribution to the county general revenue fund exceeds $35,000, the 60.11excess shall be used to provide property tax levy reduction. 60.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 60.13 new text begin 2011 and thereafter. new text end 60.14    Sec. 29. Minnesota Statutes 2010, section 477A.17, is amended to read: 60.15477A.17 LAKE VERMILION STATE PARK AND SOUDAN 60.16UNDERGROUND MINE STATE PARK; ANNUAL PAYMENTS. 60.17    (a) Beginning in fiscal year 2012, in lieu of the payment amount provided under 60.18section 477A.12, subdivision 1, clause (1), the county shall receive an annual payment for 60.19land acquired for Lake Vermilion State Park, established in section 85.012, subdivision 60.2038a, and land within the boundary of Soudan Underground Mine State Park, established 60.21in section 85.012, subdivision 53a, equal to 1.5 new text begin 1.32 new text end percent of the appraised value of 60.22the land. 60.23    (b) For the purposes of this section, the appraised value of the land acquired for 60.24Lake Vermilion State Park for the first five years after acquisition shall be the purchase 60.25price of the land, plus the value of any portion of the land that is acquired by donation. 60.26The appraised value must be redetermined by the county assessor every five years after 60.27the land is acquired. 60.28    (c) The annual payments under this section shall be distributed to the taxing 60.29jurisdictions containing the property as follows: one-third to the school districts; one-third 60.30to the town; and one-third to the county. The payment to school districts is not a county 60.31apportionment under section 127A.34 and is not subject to aid recapture. Each of those 60.32taxing jurisdictions may use the payments for their general purposes. 60.33    (d) Except as provided in this section, the payments shall be made as provided 60.34in sections 477A.11 to 477A.13. 61.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 61.2 new text begin 2011 and thereafter. new text end 61.3    Sec. 30. new text begin ADMINISTRATION OF PROPERTY TAX REFUND CLAIMS; 2011. new text end 61.4 new text begin In administering Minnesota Statutes, section 290A.03, subdivisions 11 and 13, for new text end 61.5 new text begin claims for refunds submitted using 19 percent of gross rent as rent constituting property new text end 61.6 new text begin taxes under prior law, the commissioner shall recalculate and pay the refund amounts new text end 61.7 new text begin using 15 percent of gross rent. The commissioner shall notify the claimant that the new text end 61.8 new text begin recalculation was mandated by action of the 2011 Legislature. new text end 61.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 61.10    Sec. 31. new text begin PROPERTY TAX STATEMENT FOR TAXES PAYABLE IN 2012 ONLY. new text end 61.11 new text begin For the purposes of the property tax statements required under Minnesota Statutes, new text end 61.12 new text begin section 276.04, subdivision 2, for taxes payable in 2012 only, the gross tax amount shown new text end 61.13 new text begin for the previous year is the gross tax minus the residential homestead market value credit. new text end 61.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 only. new text end 61.15    Sec. 32. new text begin REPORT ON PAYMENT IN LIEU OF TAXES FOR STATE NATURAL new text end 61.16 new text begin RESOURCE LANDS. new text end 61.17 new text begin By December 1, 2011, the commissioner of natural resources, after consultation with new text end 61.18 new text begin the commissioners of revenue and management and budget, and stakeholders, including new text end 61.19 new text begin representatives from affected local units of government and other interested parties, shall new text end 61.20 new text begin report to the chairs and ranking minority caucus members of the senate and house of new text end 61.21 new text begin representatives natural resources and tax policy and finance committees with recommended new text end 61.22 new text begin changes to payment in lieu of taxes for natural resource lands under Minnesota Statutes, new text end 61.23 new text begin sections 97A.061 and 477A.11 to 477A.145. The report shall include an analysis of the new text end 61.24 new text begin current payment and distribution system, and any recommended changes to: new text end 61.25 new text begin (1) the purpose of the payment system and the criteria for payments; new text end 61.26 new text begin (2) the rate of payments for specific classes of natural resource lands; new text end 61.27 new text begin (3) the formula for distribution of the payments to local units of government; and new text end 61.28 new text begin (4) recognition in the amount of the payments of the tax capacity foregone by the new text end 61.29 new text begin local government due to the loss of the future development potential of the land. new text end 61.30    Sec. 33. new text begin CONSOLIDATION AND SERVICE-SHARING GRANTS; new text end 61.31 new text begin APPROPRIATION. new text end 62.1     new text begin Subdivision 1. new text end new text begin Definition. new text end new text begin For the purposes of this section, "local government" new text end 62.2 new text begin means a county or a home rule charter or statutory city. new text end 62.3     new text begin Subd. 2. new text end new text begin Grants. new text end new text begin (a) The state auditor may make a consolidation grant to a local new text end 62.4 new text begin government that is planning to consolidate with at least one other contiguous local new text end 62.5 new text begin government of the same type. The grants shall be made on a first-come first-served new text end 62.6 new text begin basis. The state auditor shall determine the form and content of the application and new text end 62.7 new text begin grant agreements. An application must contain a resolution adopted by the governing new text end 62.8 new text begin body of each participating local government supporting the consolidation of the local new text end 62.9 new text begin governments. The amount of the grant shall be determined by the state auditor based on new text end 62.10 new text begin the estimated cost to the local governments of the consolidation process and their need for new text end 62.11 new text begin state financial assistance to accomplish the consolidation. The maximum grant amount is new text end 62.12 new text begin $100,000 per local government. new text end 62.13 new text begin (b) The state auditor may make a service-sharing grant to a local government that new text end 62.14 new text begin is planning to implement a program of providing shared services in cooperation with at new text end 62.15 new text begin least one other local government. The grants shall be made on a first-come first-served new text end 62.16 new text begin basis. The state auditor shall determine the form and content of the application and grant new text end 62.17 new text begin agreements. An application must contain a resolution adopted by the governing body of new text end 62.18 new text begin each participating local government supporting the plan to provide shared services. The new text end 62.19 new text begin amount of the grant shall be determined by the state auditor based on the estimated cost new text end 62.20 new text begin to the local governments of implementing the service-sharing plan, and their need for new text end 62.21 new text begin state financial assistance to accomplish it. The maximum grant amount is $100,000 per new text end 62.22 new text begin local government. new text end 62.23     new text begin Subd. 3. new text end new text begin Report. new text end new text begin The state auditor must report to the governor and legislative new text end 62.24 new text begin committees with jurisdiction over local government governance and local government new text end 62.25 new text begin taxes and finance on the consolidation and service-sharing grants made and how the new text end 62.26 new text begin money was used. An interim report is due February 1, 2012, and a final report is due new text end 62.27 new text begin December 15, 2012. new text end 62.28     new text begin Subd. 4. new text end new text begin Appropriation. new text end new text begin $3,500,000 is appropriated from the general fund to the new text end 62.29 new text begin state auditor for each of the fiscal years 2012 and 2013, to make grants to counties and new text end 62.30 new text begin cities as provided in this section. In each of those years, $2,500,000 is to be used for new text end 62.31 new text begin consolidation grants and $1,000,000 is to be used for service-sharing grants, provided that new text end 62.32 new text begin if by November 30 in either year, one of those amounts has not been used for its primary new text end 62.33 new text begin purpose, that remainder may be used for the other type of grants. new text end 62.34    Sec. 34. new text begin REPEALER. new text end 63.1 new text begin (a) new text end new text begin Minnesota Statutes 2010, sections 10A.322, subdivision 4; and 13.4967, new text end 63.2 new text begin subdivision 2, new text end new text begin are repealed. new text end 63.3 new text begin (b) new text end new text begin Minnesota Statutes 2010, section 290.06, subdivision 23, new text end new text begin is repealed. new text end 63.4 new text begin (c) new text end new text begin Minnesota Statutes 2010, sections 275.295; and 477A.145, new text end new text begin are repealed. new text end 63.5 new text begin (d) new text end new text begin Minnesota Statutes 2010, section 273.1384, subdivision 6, new text end new text begin is repealed. new text end 63.6 new text begin (e) new text end new text begin Minnesota Statutes 2010, section 273.1398, subdivision 4, new text end new text begin is repealed. new text end 63.7 new text begin (f) new text end new text begin Minnesota Statutes 2010, sections 290C.01; 290C.02; 290C.03; 290C.04; new text end 63.8 new text begin 290C.05; 290C.055; 290C.06; 290C.07; 290C.08; 290C.09; 290C.10; 290C.11; 290C.12; new text end 63.9 new text begin and 290C.13, new text end new text begin are repealed. new text end 63.10 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) is effective the day following final enactment. new text end 63.11 new text begin Paragraph (b) is effective for refund claims based on contributions made after June 30, new text end 63.12 new text begin 2011. Paragraph (c) is effective for aids payable in 2011 and thereafter. Paragraph (d) new text end 63.13 new text begin is effective for taxes payable in 2012 and thereafter. Paragraph (e) is effective for taxes new text end 63.14 new text begin payable in 2015 and thereafter. Paragraph (f) is effective July 1, 2011, and the covenants new text end 63.15 new text begin under the program are void on that date. No later than 60 days after enactment of this new text end 63.16 new text begin section, the commissioner of revenue shall issue a document to each enrollee immediately new text end 63.17 new text begin releasing the land from the covenant as provided in Minnesota Statutes 2010, section new text end 63.18 new text begin 290C.04, paragraph (c). new text end 63.19ARTICLE 4 63.20PROPERTY TAX 63.21    Section 1. Minnesota Statutes 2010, section 272.02, subdivision 39, is amended to read: 63.22    Subd. 39. Economic development; public purpose. The holding of property by a 63.23political subdivision of the state for later resale for economic development purposes shall 63.24be considered a public purpose in accordance with subdivision 8 for a period not to exceed 63.25eight new text begin ten new text end years, except that for property located in a city of 5,000 population or under that 63.26is located outside of the metropolitan area as defined in section 473.121, subdivision 2, the 63.27period must not exceed 15 years. 63.28The holding of property by a political subdivision of the state for later resale (1) 63.29which is purchased or held for housing purposes, or (2) which meets the conditions 63.30described in section 469.174, subdivision 10, shall be considered a public purpose in 63.31accordance with subdivision 8. 63.32The governing body of the political subdivision which acquires property which is 63.33subject to this subdivision shall after the purchase of the property certify to the city or 63.34county assessor whether the property is held for economic development purposes or 64.1housing purposes, or whether it meets the conditions of section 469.174, subdivision 10. 64.2If the property is acquired for economic development purposes and buildings or other 64.3improvements are constructed after acquisition of the property, and if more than one-half 64.4of the floor space of the buildings or improvements which is available for lease to or use 64.5by a private individual, corporation, or other entity is leased to or otherwise used by 64.6a private individual, corporation, or other entity the provisions of this subdivision shall 64.7not apply to the property. This subdivision shall not create an exemption from section 64.8272.01, subdivision 2 ; 272.68; 273.19; or 469.040, subdivision 3; or other provision of 64.9law providing for the taxation of or for payments in lieu of taxes for publicly held property 64.10which is leased, loaned, or otherwise made available and used by a private person. 64.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2011, payable new text end 64.12 new text begin in 2012, and thereafter. new text end 64.13    Sec. 2. Minnesota Statutes 2010, section 272.02, is amended by adding a subdivision 64.14to read: 64.15     new text begin Subd. 95. new text end new text begin Electric generation facility; personal property. new text end new text begin (a) Notwithstanding new text end 64.16 new text begin subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and other new text end 64.17 new text begin personal property that is part of a multiple reciprocating engine electric generation facility new text end 64.18 new text begin that adds more than 20 and less than 30 megawatts of installed capacity at a site where new text end 64.19 new text begin there is presently more than ten megawatts and fewer than 15 megawatts of installed new text end 64.20 new text begin capacity and that meets the requirements of this subdivision is exempt from taxation and new text end 64.21 new text begin from payments in lieu of taxation. At the time of construction, the facility must: new text end 64.22 new text begin (1) be designed to utilize natural gas as a primary fuel; new text end 64.23 new text begin (2) be owned and operated by a municipal power agency as defined in section new text end 64.24 new text begin 453.52, subdivision 8; new text end 64.25 new text begin (3) be located within one mile of an existing natural gas pipeline; new text end 64.26 new text begin (4) be designed to have black start capability and to furnish emergency backup new text end 64.27 new text begin power service to the city in which it is located; new text end 64.28 new text begin (5) satisfy a resource deficiency identified in an approved integrated resource plan new text end 64.29 new text begin filed under section 216B.2422; and new text end 64.30 new text begin (6) have received, by resolution, the approval of the governing bodies of the city new text end 64.31 new text begin and county in which it is located for the exemption of personal property provided by new text end 64.32 new text begin this subdivision. new text end 64.33 new text begin (b) Construction of the facility must be commenced after December 31, 2011, and new text end 64.34 new text begin before January 1, 2015. Property eligible for this exemption does not include (i) electric new text end 64.35 new text begin transmission lines and interconnections or gas pipelines and interconnections appurtenant new text end 65.1 new text begin to the property or the facility; or (ii) property located on the site on the enactment date new text end 65.2 new text begin of this subdivision. new text end 65.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessments in 2012, taxes new text end 65.4 new text begin payable in 2013, and thereafter. new text end 65.5    Sec. 3. Minnesota Statutes 2010, section 273.111, is amended by adding a subdivision 65.6to read: 65.7     new text begin Subd. 17. new text end new text begin Appeal. new text end new text begin If an assessor denies an application for valuation under this new text end 65.8 new text begin section, the applicant may appeal the decision to the local board of appeal and equalization new text end 65.9 new text begin as provided under section 274.01, subdivision 1, paragraph (h). new text end 65.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for appeals denied after June 30, new text end 65.11 new text begin 2011. new text end 65.12    Sec. 4. Minnesota Statutes 2010, section 273.114, subdivision 2, is amended to read: 65.13    Subd. 2. Requirements. Class 2a or 2b property that had been assessed new text begin properly new text end 65.14 new text begin classified new text end under Minnesota Statutes 2006, section 273.111, or that is part of an agricultural 65.15homestead under Minnesota Statutes, section 273.13, subdivision 23, paragraph (a), is 65.16entitled to valuation and tax deferment under this section if: 65.17(1) the land consists of at least ten acres; 65.18(2) a conservation assessment plan for the land must be prepared by an approved 65.19plan writer and implemented during the period in which the land is subject to valuation 65.20and deferment under this section; 65.21(3) the land must be enrolled for a minimum of eight years; 65.22(4) there are no delinquent property taxes on the land; and 65.23(5) new text begin (3) new text end the property is not also enrolled for valuation and deferment under section 65.24273.111 or 273.112, or chapter 290C or 473H. 65.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 65.26    Sec. 5. Minnesota Statutes 2010, section 273.114, subdivision 5, is amended to read: 65.27    Subd. 5. Application and covenant agreement. (a) Application for deferment 65.28of taxes and assessment under this section shall be filed by May 1 of the year prior to 65.29the year in which the taxes are payable. Any application filed under this subdivision 65.30and granted shall continue in effect for subsequent years until the termination of the 65.31covenant agreement under paragraph (b) new text begin property is withdrawn or no longer qualifies new text end . 65.32The application must be filed with the assessor of the taxing district in which the real 66.1property is located on the form prescribed by the commissioner of revenue. new text begin Each new text end 66.2 new text begin application must include the most recent available aerial photograph or satellite image new text end 66.3 new text begin of the property provided by the Farm Service Agency of the United States Department new text end 66.4 new text begin of Agriculture that clearly delineates the land that is to be enrolled. The application new text end 66.5 new text begin form must contain a statement setting forth the consequences to the property owner of new text end 66.6 new text begin termination of qualification of property under the rural preserve program, together with a new text end 66.7 new text begin recommendation that land that is likely to be changed to a nonqualifying use during the new text end 66.8 new text begin period of enrollment should not be included in the application. new text end The assessor may require 66.9proof by affidavit or otherwise that the property qualifies under subdivision 2. 66.10    (b) The owner of the property must sign a covenant agreement that is filed with the 66.11county recorder and recorded in the county where the property is located. The covenant 66.12agreement must include all of the following: 66.13    (1) legal description of the area to which the covenant applies; 66.14    (2) name and address of the owner; 66.15    (3) a statement that the land described in the covenant must be kept as rural preserve 66.16land, which meets the requirements of subdivision 2, for the duration of the covenant; 66.17    (4) a statement that the landowner may terminate the covenant agreement by 66.18notifying the county assessor in writing three years in advance of the date of proposed 66.19termination, provided that the notice of intent to terminate may not be given at any time 66.20before the land has been subject to the covenant for a period of five years; 66.21    (5) a statement that the covenant is binding on the owner or the owner's successor or 66.22assigns and runs with the land; and 66.23    (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as 66.24described in subdivision 2. 66.25(c) After a covenant under this section has been terminated, the land that had been 66.26subject to the covenant is ineligible for subsequent valuation under this section for a 66.27period of three years after the termination. 66.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 66.29    Sec. 6. Minnesota Statutes 2010, section 273.114, subdivision 6, is amended to read: 66.30    Subd. 6. Additional taxes. Upon termination of a covenant agreement in 66.31subdivision 5, paragraph (b), the land to which the covenant applied new text begin When real property new text end 66.32 new text begin which is being, or has been valued and assessed under this section no longer qualifies new text end 66.33 new text begin under subdivision 2, the portion no longer qualifying new text end shall be subject to additional taxes 66.34in the amount equal to the difference between the taxes determined in accordance with 66.35subdivision 3 and the amount determined under subdivision 4, provided that the amount 67.1determined under subdivision 4 shall not be greater than it would have been had the 67.2actual bona fide sale price of the real property at an arm's-length transaction been used in 67.3lieu of the market value determined under subdivision 4. The additional taxes shall be 67.4extended against the property on the tax list for the current year, provided that no interest 67.5or penalties shall be levied on the additional taxes if timely paid and that the additional 67.6taxes shall only be levied with respect to the current year plus two prior years that the 67.7property has been valued and assessed under this section. 67.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 67.9    Sec. 7. Minnesota Statutes 2010, section 273.13, subdivision 25, is amended to read: 67.10    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 67.11units and used or held for use by the owner or by the tenants or lessees of the owner 67.12as a residence for rental periods of 30 days or more, excluding property qualifying for 67.13class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 67.14than hospitals exempt under section 272.02, and contiguous property used for hospital 67.15purposes, without regard to whether the property has been platted or subdivided. The 67.16market value of class 4a property has a class rate of 1.25 percent. 67.17    (b) Class 4b includes: 67.18    (1) residential real estate containing less than four units that does not qualify as class 67.194bb, other than seasonal residential recreational property; 67.20    (2) manufactured homes not classified under any other provision; 67.21    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 67.22farm classified under subdivision 23, paragraph (b) containing two or three units; and 67.23    (4) unimproved property that is classified residential as determined under subdivision 67.2433. 67.25    The market value of class 4b property has a class rate of 1.25 percent. 67.26    (c) Class 4bb includes: 67.27    (1) nonhomestead residential real estate containing one unit, other than seasonal 67.28residential recreational property; and 67.29    (2) a single family dwelling, garage, and surrounding one acre of property on a 67.30nonhomestead farm classified under subdivision 23, paragraph (b). 67.31    Class 4bb property has the same class rates as class 1a property under subdivision 22. 67.32    Property that has been classified as seasonal residential recreational property at 67.33any time during which it has been owned by the current owner or spouse of the current 67.34owner does not qualify for class 4bb. 67.35    (d) Class 4c property includes: 68.1    (1) except as provided in subdivision 22, paragraph (c), real and personal property 68.2devoted to temporary and seasonal residential occupancy for recreation purposes, 68.3including real and personal property devoted to temporary and seasonal residential 68.4occupancy for recreation purposes and not devoted to commercial purposes for more 68.5than 250 days in the year preceding the year of assessment. For purposes of this clause, 68.6property is devoted to a commercial purpose on a specific day if any portion of the 68.7property is used for residential occupancy, and a fee is charged for residential occupancy. 68.8Class 4c property under this clause must contain three or more rental units. A "rental unit" 68.9is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site 68.10equipped with water and electrical hookups for recreational vehicles. Class 4c property 68.11under this clause must provide recreational activities such as renting ice fishing houses, 68.12boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina 68.13services, launch services, or guide services; or sell bait and fishing tackle. A camping pad 68.14offered for rent by a property that otherwise qualifies for class 4c under this clause is also 68.15class 4c under this clause regardless of the term of the rental agreement, as long as the use 68.16of the camping pad does not exceed 250 days. In order for a property to be classified as 68.17class 4c, seasonal residential recreational for commercial purposes under this clause, at 68.18least 40 percent of the annual gross lodging receipts related to the property must be from 68.19business conducted during 90 consecutive days and either (i) at least 60 percent of all paid 68.20bookings by lodging guests during the year must be for periods of at least two consecutive 68.21nights; or (ii) at least 20 percent of the annual gross receipts must be from charges for 68.22rental of fish houses, boats and motors, snowmobiles, downhill or cross-country ski 68.23equipment, or charges for marina services, launch services, and guide services, or the 68.24sale of bait and fishing tackle. For purposes of this determination, a paid booking of 68.25five or more nights shall be counted as two bookings. Class 4c property classified under 68.26this clause also includes commercial use real property used exclusively for recreational 68.27purposes in conjunction with other class 4c property classified under this clause and 68.28devoted to temporary and seasonal residential occupancy for recreational purposes, up to a 68.29total of two acres, provided the property is not devoted to commercial recreational use for 68.30more than 250 days in the year preceding the year of assessment and is located within two 68.31miles of the class 4c property with which it is used. Owners of real and personal property 68.32devoted to temporary and seasonal residential occupancy for recreation purposes and all 68.33or a portion of which was devoted to commercial purposes for not more than 250 days in 68.34the year preceding the year of assessment desiring classification as class 4c, must submit a 68.35declaration to the assessor designating the cabins or units occupied for 250 days or less in 68.36the year preceding the year of assessment by January 15 of the assessment year. Those 69.1cabins or units and a proportionate share of the land on which they are located must 69.2be designated class 4c under this clause as otherwise provided. The remainder of the 69.3cabins or units and a proportionate share of the land on which they are located will be 69.4designated as class 3a. The owner of property desiring designation as class 4c property 69.5under this clause must provide guest registers or other records demonstrating that the units 69.6for which class 4c designation is sought were not occupied for more than 250 days in the 69.7year preceding the assessment if so requested. The portion of a property operated as a 69.8(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other 69.9nonresidential facility operated on a commercial basis not directly related to temporary 69.10and seasonal residential occupancy for recreation purposes does not qualify for class 4c; 69.11    (2) qualified property used as a golf course if: 69.12    (i) it is open to the public on a daily fee basis. It may charge membership fees or 69.13dues, but a membership fee may not be required in order to use the property for golfing, 69.14and its green fees for golfing must be comparable to green fees typically charged by 69.15municipal courses; and 69.16    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 69.17    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 69.18with the golf course is classified as class 3a property; 69.19    (3) real property up to a maximum of three acres of land owned and used by a 69.20nonprofit community service oriented organization and not used for residential purposes 69.21on either a temporary or permanent basis, provided that: 69.22    (i) the property is not used for a revenue-producing activity for more than six days 69.23in the calendar year preceding the year of assessment; or 69.24    (ii) the organization makes annual charitable contributions and donations at least 69.25equal to the property's previous year's property taxes and the property is allowed to be 69.26used for public and community meetings or events for no charge, as appropriate to the 69.27size of the facility. 69.28    For purposes of this clause, 69.29    (A) "charitable contributions and donations new text begin contribution new text end " has the same meaning 69.30as lawful gambling purposes under section 349.12, subdivision 25, excluding those 69.31purposes relating to the payment of taxes, assessments, fees, auditing costs, and utility 69.32payments new text begin given in section 349.12, subdivision 7a, except that expenditures for erection or new text end 69.33 new text begin acquisition of a replacement building, as defined under section 349.12, subdivision 25, new text end 69.34 new text begin paragraph (a), clause (25), may be counted to meet up to 50 percent of the contribution new text end 69.35 new text begin requirement, for a period of not more than 20 years from the erection or acquisition of new text end 69.36 new text begin the replacement building new text end ; 70.1    (B) "property taxes" excludes the state general tax; 70.2    (C) a "nonprofit community service oriented organization" means any corporation, 70.3society, association, foundation, or institution organized and operated exclusively for 70.4charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 70.5federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 70.6Revenue Code; and 70.7    (D) "revenue-producing activities" shall include but not be limited to property or that 70.8portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 70.9liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 70.10alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 70.11insurance business, or office or other space leased or rented to a lessee who conducts a 70.12for-profit enterprise on the premises. 70.13Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use 70.14of the property for social events open exclusively to members and their guests for periods 70.15of less than 24 hours, when an admission is not charged nor any revenues are received by 70.16the organization shall not be considered a revenue-producing activity. 70.17    The organization shall maintain records of its charitable contributions and donations 70.18and of public meetings and events held on the property and make them available upon 70.19request any time to the assessor to ensure eligibility. An organization meeting the 70.20requirement under item (ii) must file an application by May 1 with the assessor for 70.21eligibility for the current year's assessment. The commissioner shall prescribe a uniform 70.22application form and instructions; 70.23    (4) postsecondary student housing of not more than one acre of land that is owned by 70.24a nonprofit corporation organized under chapter 317A and is used exclusively by a student 70.25cooperative, sorority, or fraternity for on-campus housing or housing located within two 70.26miles of the border of a college campus; 70.27    (5) (i) manufactured home parks as defined in section 327.14, subdivision 3, 70.28excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii) 70.29manufactured home parks as defined in section 327.14, subdivision 3, that are described in 70.30section 273.124, subdivision 3a; 70.31    (6) real property that is actively and exclusively devoted to indoor fitness, health, 70.32social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 70.33and is located within the metropolitan area as defined in section 473.121, subdivision 2; 70.34    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt 70.35under section 272.01, subdivision 2, and the land on which it is located, provided that: 71.1    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan 71.2Airports Commission, or group thereof; and 71.3    (ii) the land lease, or any ordinance or signed agreement restricting the use of the 71.4leased premise, prohibits commercial activity performed at the hangar. 71.5    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 71.6be filed by the new owner with the assessor of the county where the property is located 71.7within 60 days of the sale; 71.8    (8) a privately owned noncommercial aircraft storage hangar not exempt under 71.9section 272.01, subdivision 2, and the land on which it is located, provided that: 71.10    (i) the land abuts a public airport; and 71.11    (ii) the owner of the aircraft storage hangar provides the assessor with a signed 71.12agreement restricting the use of the premises, prohibiting commercial use or activity 71.13performed at the hangar; and 71.14    (9) residential real estate, a portion of which is used by the owner for homestead 71.15purposes, and that is also a place of lodging, if all of the following criteria are met: 71.16    (i) rooms are provided for rent to transient guests that generally stay for periods 71.17of 14 or fewer days; 71.18    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated 71.19in the basic room rate; 71.20    (iii) meals are not provided to the general public except for special events on fewer 71.21than seven days in the calendar year preceding the year of the assessment; and 71.22    (iv) the owner is the operator of the property. 71.23The market value subject to the 4c classification under this clause is limited to five rental 71.24units. Any rental units on the property in excess of five, must be valued and assessed as 71.25class 3a. The portion of the property used for purposes of a homestead by the owner must 71.26be classified as class 1a property under subdivision 22; 71.27    (10) real property up to a maximum of three acres and operated as a restaurant 71.28as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 71.29as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 71.30is either devoted to commercial purposes for not more than 250 consecutive days, or 71.31receives at least 60 percent of its annual gross receipts from business conducted during 71.32four consecutive months. Gross receipts from the sale of alcoholic beverages must be 71.33included in determining the property's qualification under subitem (B). The property's 71.34primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 71.35sales located on the premises must be excluded. Owners of real property desiring 4c 71.36classification under this clause must submit an annual declaration to the assessor by 72.1February 1 of the current assessment year, based on the property's relevant information for 72.2the preceding assessment year; and 72.3(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used 72.4as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to 72.5the public and devoted to recreational use for marina services. The marina owner must 72.6annually provide evidence to the assessor that it provides services, including lake or river 72.7access to the public by means of an access ramp or other facility that is either located on 72.8the property of the marina or at a publicly owned site that abuts the property of the marina. 72.9No more than 800 feet of lakeshore may be included in this classification. Buildings used 72.10in conjunction with a marina for marina services, including but not limited to buildings 72.11used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing 72.12tackle, are classified as class 3a property. 72.13    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 72.14parcel of seasonal residential recreational property not used for commercial purposes 72.15has the same class rates as class 4bb property, (ii) manufactured home parks assessed 72.16under clause (5), item (i), have the same class rate as class 4b property, and the market 72.17value of manufactured home parks assessed under clause (5), item (ii), has the same class 72.18rate as class 4d property if more than 50 percent of the lots in the park are occupied by 72.19shareholders in the cooperative corporation or association and a class rate of one percent if 72.2050 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential 72.21recreational property and marina recreational land as described in clause (11), has a 72.22class rate of one percent for the first $500,000 of market value, and 1.25 percent for the 72.23remaining market value, (iv) the market value of property described in clause (4) has a 72.24class rate of one percent, (v) the market value of property described in clauses (2), (6), and 72.25(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property 72.26in clause (9) qualifying for class 4c property has a class rate of 1.25 percent. 72.27    (e) Class 4d property is qualifying low-income rental housing certified to the assessor 72.28by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 72.29of the units in the building qualify as low-income rental housing units as certified under 72.30section 273.128, subdivision 3, only the proportion of qualifying units to the total number 72.31of units in the building qualify for class 4d. The remaining portion of the building shall be 72.32classified by the assessor based upon its use. Class 4d also includes the same proportion of 72.33land as the qualifying low-income rental housing units are to the total units in the building. 72.34For all properties qualifying as class 4d, the market value determined by the assessor must 72.35be based on the normal approach to value using normal unrestricted rents. 72.36    Class 4d property has a class rate of 0.75 percent. 73.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2011 and new text end 73.2 new text begin thereafter, for taxes payable in 2012 and thereafter. new text end 73.3    Sec. 8. Minnesota Statutes 2010, section 273.13, subdivision 34, is amended to read: 73.4    Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value 73.5of property owned by a veteran or by the veteran and the veteran's spouse qualifying 73.6for homestead classification under subdivision 22 or 23 is excluded in determining the 73.7property's taxable market value if it serves as the homestead of a military veteran, as 73.8defined in section 197.447, who has a service-connected disability of 70 percent or more. 73.9To qualify for exclusion under this subdivision, the veteran must have been honorably 73.10discharged from the United States armed forces, as indicated by United States Government 73.11Form DD214 or other official military discharge papers, and must be certified by the 73.12United States Veterans Administration as having a service-connected disability. 73.13    (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is 73.14excluded, except as provided in clause (2); and 73.15    (2) for a total (100 percent) and permanent disability, $300,000 of market value is 73.16excluded. 73.17    (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), 73.18clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the 73.19spouse holds the legal or beneficial title to the homestead and permanently resides there, 73.20the exclusion shall carry over to the benefit of the veteran's spouse for one new text begin five new text end additional 73.21assessment year new text begin taxes payable years new text end or until such time as the spouse sells, transfers, 73.22 new text begin remarries, new text end or otherwise disposes of the property, whichever comes first. new text begin To qualify for new text end 73.23 new text begin the exemption under this paragraph, the surviving spouse must apply annually to the new text end 73.24 new text begin assessor by July 1 of the assessment year. new text end 73.25    (d) In the case of an agricultural homestead, only the portion of the property 73.26consisting of the house and garage and immediately surrounding one acre of land qualifies 73.27for the valuation exclusion under this subdivision. 73.28    (e) A property qualifying for a valuation exclusion under this subdivision is not 73.29eligible for the credit under section 273.1384, subdivision 1, or classification under 73.30subdivision 22, paragraph (b). 73.31    (f) To qualify for a valuation exclusion under this subdivision a property owner must 73.32apply to the assessor by July 1 of each assessment year, except that an annual reapplication 73.33is not required once a property has been accepted for a valuation exclusion under paragraph 73.34(b), clause (2), and the property continues to qualify until there is a change in ownership. 74.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2010, payable in new text end 74.2 new text begin 2011, and thereafter, and applies to homesteads that initially qualified for the exclusion new text end 74.3 new text begin for taxes payable in 2009 and thereafter. new text end 74.4    Sec. 9. Minnesota Statutes 2010, section 274.01, subdivision 1, is amended to read: 74.5    Subdivision 1. Ordinary board; meetings, deadlines, grievances. (a) The town 74.6board of a town, or the council or other governing body of a city, is the board of appeal 74.7and equalization except (1) in cities whose charters provide for a board of equalization or 74.8(2) in any city or town that has transferred its local board of review power and duties to 74.9the county board as provided in subdivision 3. The county assessor shall fix a day and 74.10time when the board or the board of equalization shall meet in the assessment districts 74.11of the county. Notwithstanding any law or city charter to the contrary, a city board of 74.12equalization shall be referred to as a board of appeal and equalization. On or before 74.13February 15 of each year the assessor shall give written notice of the time to the city or 74.14town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings 74.15must be held between April 1 and May 31 each year new text begin , provided that the board may review new text end 74.16 new text begin appeals of denials of green acres treatment as provided in paragraph (h) at any time new text end . 74.17The clerk shall give published and posted notice of the meeting at least ten days before 74.18the date of the meeting. 74.19    The board shall meet at the office of the clerk to review the assessment and 74.20classification of property in the town or city. No changes in valuation or classification 74.21which are intended to correct errors in judgment by the county assessor may be made by 74.22the county assessor after the board has adjourned in those cities or towns that hold a 74.23local board of review; however, corrections of errors that are merely clerical in nature or 74.24changes that extend homestead treatment to property are permitted after adjournment until 74.25the tax extension date for that assessment year. The changes must be fully documented and 74.26maintained in the assessor's office and must be available for review by any person. A copy 74.27of the changes made during this period in those cities or towns that hold a local board of 74.28review must be sent to the county board no later than December 31 of the assessment year. 74.29    (b) The board shall determine whether the taxable property in the town or city has 74.30been properly placed on the list and properly valued by the assessor. If real or personal 74.31property has been omitted, the board shall place it on the list with its market value, and 74.32correct the assessment so that each tract or lot of real property, and each article, parcel, 74.33or class of personal property, is entered on the assessment list at its market value. No 74.34assessment of the property of any person may be raised unless the person has been 74.35duly notified of the intent of the board to do so. On application of any person feeling 75.1aggrieved, the board shall review the assessment or classification, or both, and correct 75.2it as appears just. The board may not make an individual market value adjustment or 75.3classification change that would benefit the property if the owner or other person having 75.4control over the property has refused the assessor access to inspect the property and the 75.5interior of any buildings or structures as provided in section 273.20. A board member 75.6shall not participate in any actions of the board which result in market value adjustments 75.7or classification changes to property owned by the board member, the spouse, parent, 75.8stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, 75.9or niece of a board member, or property in which a board member has a financial interest. 75.10The relationship may be by blood or marriage. 75.11    (c) A local board may reduce assessments upon petition of the taxpayer but the total 75.12reductions must not reduce the aggregate assessment made by the county assessor by more 75.13than one percent. If the total reductions would lower the aggregate assessments made by 75.14the county assessor by more than one percent, none of the adjustments may be made. The 75.15assessor shall correct any clerical errors or double assessments discovered by the board 75.16without regard to the one percent limitation. 75.17    (d) A local board does not have authority to grant an exemption or to order property 75.18removed from the tax rolls. 75.19    (e) A majority of the members may act at the meeting, and adjourn from day to day 75.20until they finish hearing the cases presented. The assessor shall attend, with the assessment 75.21books and papers, and take part in the proceedings, but must not vote. The county assessor, 75.22or an assistant delegated by the county assessor shall attend the meetings. The board shall 75.23list separately, on a form appended to the assessment book, all omitted property added 75.24to the list by the board and all items of property increased or decreased, with the market 75.25value of each item of property, added or changed by the board, placed opposite the item. 75.26The county assessor shall enter all changes made by the board in the assessment book. 75.27    (f) Except as provided in subdivision 3, if a person fails to appear in person, by 75.28counsel, or by written communication before the board after being duly notified of the 75.29board's intent to raise the assessment of the property, or if a person feeling aggrieved by an 75.30assessment or classification fails to apply for a review of the assessment or classification, 75.31the person may not appear before the county board of appeal and equalization for a review 75.32of the assessment or classification. This paragraph does not apply if an assessment was 75.33made after the local board meeting, as provided in section 273.01, or if the person can 75.34establish not having received notice of market value at least five days before the local 75.35board meeting. 76.1    (g) The local board must complete its work and adjourn within 20 days from the 76.2time of convening stated in the notice of the clerk, unless a longer period is approved by 76.3the commissioner of revenue. No action taken after that date is valid. All complaints 76.4about an assessment or classification made after the meeting of the board must be heard 76.5and determined by the county board of equalization. A nonresident may, at any time, 76.6before the meeting of the board file written objections to an assessment or classification 76.7with the county assessor. The objections must be presented to the board at its meeting by 76.8the county assessor for its consideration. 76.9 new text begin (h) The local board may, but is not required to, review appeals from property owners new text end 76.10 new text begin of denials by assessors of applications for valuation under section 273.111. If it intends new text end 76.11 new text begin to exercise the authority provided in this paragraph, the board must pass a resolution new text end 76.12 new text begin stating that it will do so, and must then review all such appeals until it passes a subsequent new text end 76.13 new text begin resolution stating that it will not review such appeals. new text end 76.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for appeals denied after June 30, new text end 76.15 new text begin 2011. new text end 76.16    Sec. 10. Minnesota Statutes 2010, section 275.025, subdivision 1, is amended to read: 76.17    Subdivision 1. Levy amount. The state general levy is levied against 76.18commercial-industrial property and seasonal residential recreational property, as defined 76.19in this section. The state general levy base amount new text begin for commercial-industrial property new text end 76.20is $592,000,000 new text begin $702,700,000 and the state general levy base amount for seasonal new text end 76.21 new text begin residential recreational property is $39,800,000 new text end for taxes payable in 2002 new text begin 2012 and 2013 new text end . 76.22For taxes payable in subsequent years, the levy base amount is increased each year by 76.23multiplying the levy base amount for the prior year by the sum of one plus the rate of 76.24increase, if any, in the implicit price deflator for government consumption expenditures 76.25and gross investment for state and local governments prepared by the Bureau of Economic 76.26Analysts of the United States Department of Commerce for the 12-month period ending 76.27March 31 of the year prior to the year the taxes are payable new text begin decreased as follows: new text end 76.28 new text begin (1) for taxes payable in 2014, the state general levy base amount is $667,600,000 new text end 76.29 new text begin for commercial-industrial property and $37,800,000 for seasonal residential recreational new text end 76.30 new text begin property; new text end 76.31 new text begin (2) for taxes payable in 2015, the state general levy base amount is $632,500,000 new text end 76.32 new text begin for commercial-industrial property and $35,800,000 for seasonal residential recreational new text end 76.33 new text begin property; new text end 77.1 new text begin (3) for taxes payable in 2016, the state general levy base amount is $562,300,000 new text end 77.2 new text begin for commercial-industrial property and $31,800,000 for seasonal residential recreational new text end 77.3 new text begin property; new text end 77.4 new text begin (4) for taxes payable in 2017, the state general levy base amount is $492,100,000 new text end 77.5 new text begin for commercial-industrial property and $27,800,000 for seasonal residential recreational new text end 77.6 new text begin property; new text end 77.7 new text begin (5) for taxes payable in 2018, the state general levy base amount is $421,900,000 new text end 77.8 new text begin for commercial-industrial property and $23,800,000 for seasonal residential recreational new text end 77.9 new text begin property; new text end 77.10 new text begin (6) for taxes payable in 2019, the state general levy base amount is $351,700,000 new text end 77.11 new text begin for commercial-industrial property and $19,800,000 for seasonal residential recreational new text end 77.12 new text begin property; new text end 77.13 new text begin (7) for taxes payable in 2020, the state general levy base amount is $281,500,000 new text end 77.14 new text begin for commercial-industrial property and $15,800,000 for seasonal residential recreational new text end 77.15 new text begin property; new text end 77.16 new text begin (8) for taxes payable in 2021, the state general levy base amount is $211,300,000 new text end 77.17 new text begin for commercial-industrial property and $11,800,000 for seasonal residential recreational new text end 77.18 new text begin property; new text end 77.19 new text begin (9) for taxes payable in 2022, the state general levy base amount is $141,100,000 new text end 77.20 new text begin for commercial-industrial property and $7,800,000 for seasonal residential recreational new text end 77.21 new text begin property; and new text end 77.22 new text begin (10) for taxes payable in 2023, the state general levy base amount is $70,900,000 new text end 77.23 new text begin for commercial-industrial property and $3,800,000 for seasonal residential recreational new text end 77.24 new text begin property new text end . 77.25The tax under this section is not treated as a local tax rate under section 469.177 and 77.26is not the levy of a governmental unit under chapters 276A and 473F. 77.27The commissioner shall increase or decrease the preliminary or final rate for a year 77.28as necessary to account for errors and tax base changes that affected a preliminary or final 77.29rate for either of the two preceding years. Adjustments are allowed to the extent that the 77.30necessary information is available to the commissioner at the time the rates for a year must 77.31be certified, and for the following reasons: 77.32(1) an erroneous report of taxable value by a local official; 77.33(2) an erroneous calculation by the commissioner; and 77.34(3) an increase or decrease in taxable value for commercial-industrial or seasonal 77.35residential recreational property reported on the abstracts of tax lists submitted under 78.1section 275.29 that was not reported on the abstracts of assessment submitted under 78.2section 270C.89 for the same year. 78.3The commissioner may, but need not, make adjustments if the total difference in the tax 78.4levied for the year would be less than $100,000. 78.5    Sec. 11. Minnesota Statutes 2010, section 275.025, subdivision 4, is amended to read: 78.6    Subd. 4. Apportionment and levy of state general tax. Ninety-five percent of the 78.7state general tax must be levied by applying a uniform rate to all commercial-industrial tax 78.8capacity and five percent of the state general tax must be levied by applying a uniform 78.9rate to all seasonal residential recreational tax capacity. On or before October 1 each year, 78.10the commissioner of revenue shall certify the preliminary state general levy rates to each 78.11county auditor that must be used to prepare the notices of proposed property taxes for taxes 78.12payable in the following year. By January 1 of each year, the commissioner shall certify 78.13the final state general levy rate to each county auditor that shall be used in spreading taxes. 78.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes levied in 2011, payable new text end 78.15 new text begin in 2012, and thereafter. new text end 78.16    Sec. 12. new text begin REPEALER. new text end 78.17 new text begin (a) new text end new text begin Minnesota Statutes 2010, section 273.114, subdivision 1, new text end new text begin is repealed. new text end 78.18 new text begin (b) new text end new text begin Minnesota Statutes 2010, section 275.025, new text end new text begin is repealed. new text end 78.19 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) is effective the day following final enactment. new text end 78.20 new text begin Paragraph (b) is effective for taxes levied in 2023, payable in 2024, and thereafter. new text end 78.21ARTICLE 5 78.22TAX INCREMENT FINANCING 78.23    Section 1. Minnesota Statutes 2010, section 469.176, subdivision 4c, is amended to 78.24read: 78.25    Subd. 4c. Economic development districts. (a) Revenue derived from tax 78.26increment from an economic development district may not be used to provide 78.27improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form 78.28to developments consisting of buildings and ancillary facilities, if more than 15 percent 78.29of the buildings and facilities (determined on the basis of square footage) are used for a 78.30purpose other than: 79.1(1) the manufacturing or production of tangible personal property, including 79.2processing resulting in the change in condition of the property; 79.3(2) warehousing, storage, and distribution of tangible personal property, excluding 79.4retail sales; 79.5(3) research and development related to the activities listed in clause (1) or (2); 79.6(4) telemarketing if that activity is the exclusive use of the property; 79.7(5) tourism facilities; 79.8(6) qualified border retail facilities; or 79.9(7) space necessary for and related to the activities listed in clauses (1) to (6). 79.10(b) Notwithstanding the provisions of this subdivision, revenues derived from tax 79.11increment from an economic development district may be used to provide improvements, 79.12loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000 79.13square feet of any separately owned commercial facility located within the municipal 79.14jurisdiction of a small city, if the revenues derived from increments are spent only to 79.15assist the facility directly or for administrative expenses, the assistance is necessary to 79.16develop the facility, and all of the increments, except those for administrative expenses, 79.17are spent only for activities within the district. 79.18(c) A city is a small city for purposes of this subdivision if the city was a small city 79.19in the year in which the request for certification was made and applies for the rest of 79.20the duration of the district, regardless of whether the city qualifies or ceases to qualify 79.21as a small city. 79.22(d) Notwithstanding the requirements of paragraph (a) and the finding requirements 79.23of section 469.174, subdivision 12, tax increments from an economic development district 79.24may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or 79.25assistance in any form to developments consisting of buildings and ancillary facilities, if 79.26all the following conditions are met: 79.27(1) the municipality finds that the project will create or retain jobs in this state, 79.28including construction jobs, and that construction of the project would not have 79.29commenced before July 1, 2011 new text begin 2012 new text end , without the authority providing assistance under 79.30the provisions of this paragraph; 79.31(2) construction of the project begins no later than July 1, 2011 new text begin 2012 new text end ; and 79.32(3) the request for certification of the district is made no later than June 30, 2011 new text begin new text end 79.33 new text begin 2012; and new text end 79.34 new text begin (4) for development of housing under this paragraph, the construction must begin new text end 79.35 new text begin before July 1, 2011 new text end . 79.36 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 80.1    Sec. 2. Minnesota Statutes 2010, section 469.176, subdivision 4m, is amended to read: 80.2    Subd. 4m. Temporary authority to stimulate construction. (a) Notwithstanding 80.3the restrictions in any other subdivision of this section or any other law to the contrary, 80.4except the requirement to pay bonds to which the increments are pledged and the 80.5provisions of subdivisions 4g and 4h, the authority may spend tax increments for one or 80.6more of the following purposes: 80.7(1) to provide improvements, loans, interest rate subsidies, or assistance in any 80.8form to private development consisting of the construction or substantial rehabilitation 80.9of buildings and ancillary facilities, if doing so will create or retain jobs in this state, 80.10including construction jobs, and that the construction commences before July 1, 2011 new text begin new text end 80.11 new text begin 2012 new text end , and would not have commenced before that date without the assistance; or 80.12(2) to make an equity or similar investment in a corporation, partnership, or limited 80.13liability company that the authority determines is necessary to make construction of a 80.14development that meets the requirements of clause (1) financially feasible. 80.15(b) The authority may undertake actions under the authority of this subdivision only 80.16after approval by the municipality of a written spending plan that specifically authorizes 80.17the authority to take the actions. The municipality shall approve the spending plan only 80.18after a public hearing after published notice in a newspaper of general circulation in 80.19the municipality at least once, not less than ten days nor more than 30 days prior to the 80.20date of the hearing. 80.21(c) The authority to spend tax increments under this subdivision expires December 80.2231, 2011 new text begin 2012 new text end . 80.23 new text begin (d) For a development consisting of housing, the authority to spend tax increments new text end 80.24 new text begin under this subdivision expires December 31, 2011, and construction must commence new text end 80.25 new text begin before July 1, 2011. new text end 80.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 80.27    Sec. 3. Laws 2010, chapter 389, article 7, section 22, is amended to read: 80.28    Sec. 22. CITY OF RAMSEY; TAX INCREMENT FINANCING DISTRICT; 80.29SPECIAL RULES. 80.30(a) If the city of Ramsey or an authority of the city elects upon the adoption of a tax 80.31increment financing plan for a district, the rules under this section apply to a redevelopment 80.32tax increment financing district established by the city or an authority of the city. The 80.33redevelopment tax increment district includes parcels within the area bounded on the new text begin east new text end 80.34 new text begin by Ramsey Boulevard, on the new text end north by Bunker Lake Boulevard as extended west to Llama 80.35Street, on the west by Llama Street, and on the south by a line running parallel to and 81.1600 feet south of the southerly right-of-way for U.S. Highway 10, but including Parcels 81.228-32-25-43-0007 and 28-32-25-34-0002 in their entirety, and excluding the Anoka 81.3County Regional Park property in its entirety. A parcel within this area that is included in 81.4a tax increment financing district that was certified before the date of enactment of this act 81.5may be included in the district created under this act if the initial district is decertified. 81.6(b) The requirements for qualifying a redevelopment tax increment district under 81.7Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located 81.8within the district. 81.9(c) In addition to the costs permitted by Minnesota Statutes, section 469.176, 81.10subdivision 4j , Eligible expenditures within the district include the city's share of the 81.11costs necessary to provide for the construction of the Northstar Transit Station and 81.12related infrastructure, including structured parking, a pedestrian overpass, and roadway 81.13improvements. 81.14(d) The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that 81.15activities must be undertaken within a five-year period from the date of certification of a 81.16tax increment financing district, is considered to be met for the district if the activities 81.17were undertaken within ten years from the date of certification of the district. 81.18(e) Except for administrative expenses, the in-district percentage for purposes of 81.19the restriction on pooling under Minnesota Statutes, section 469.1763, subdivision 2, for 81.20this district is 100 percent. 81.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon approval by the governing new text end 81.22 new text begin body of the city of Ramsey, and upon compliance by the city with Minnesota Statutes, new text end 81.23 new text begin section 645.021, subdivision 3. new text end 81.24    Sec. 4. new text begin CITY OF COHASSET; USE OF TAX INCREMENTS. new text end 81.25 new text begin The authority operating tax increment financing districts No. 2-1 and No. 3-1 in new text end 81.26 new text begin the city of Cohasset may transfer tax increments from each of those districts to the city new text end 81.27 new text begin in an amount equal to the advances made by the city from its general fund to finance new text end 81.28 new text begin expenditures under Minnesota Statutes, section 469.176, subdivision 4, for the benefit new text end 81.29 new text begin of that district. new text end 81.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 81.31 new text begin upon approval by the governing body of the city of Cohasset and compliance with new text end 81.32 new text begin Minnesota Statutes, section 645.021, subdivision 3. new text end 81.33    Sec. 5. new text begin CITY OF LINO LAKES; TAX INCREMENT FINANCING. new text end 82.1     new text begin Subdivision 1. new text end new text begin Duration of district. new text end new text begin Notwithstanding the provisions of Minnesota new text end 82.2 new text begin Statutes, section 469.176, subdivision 1b, the city of Lino Lakes may collect tax new text end 82.3 new text begin increments from tax increment financing district No. 1-10 through December 31, 2023, new text end 82.4 new text begin subject to the conditions in subdivision 2. new text end 82.5     new text begin Subd. 2. new text end new text begin Conditions for extension. new text end new text begin All tax increments remaining in the account new text end 82.6 new text begin for the district after February 1, 2011, and all tax increments collected thereafter, must new text end 82.7 new text begin be used only to pay debt service on bonds issued to finance the interchange of Anoka new text end 82.8 new text begin County Highway 23 and marked Interstate Highway 35W, bonds issued to finance public new text end 82.9 new text begin improvements serving the development known as Legacy at Woods Edge, and any bonds new text end 82.10 new text begin issued to refund those bonds. Minnesota Statutes, sections 469.176, subdivision 4c, and new text end 82.11 new text begin 469.1763 do not apply to expenditures made under this section. new text end 82.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the governing new text end 82.13 new text begin body of the city of Lino Lakes with the requirements of Minnesota Statutes, sections new text end 82.14 new text begin 469.1782, subdivision 2, and 645.021, subdivision 3. new text end 82.15ARTICLE 6 82.16MINERALS 82.17    Section 1. Minnesota Statutes 2010, section 290.05, subdivision 1, is amended to read: 82.18    Subdivision 1. Exempt entities. The following corporations, individuals, estates, 82.19trusts, and organizations shall be exempted from taxation under this chapter, provided 82.20that every such person or corporation claiming exemption under this chapter, in whole 82.21or in part, must establish to the satisfaction of the commissioner the taxable status of 82.22any income or activity: 82.23(a) corporations, individuals, estates, and trusts engaged in the business of mining or 82.24producing iron ore and new text begin mining, producing, or refining new text end other ores new text begin , metals, and minerals, new text end 82.25the mining or new text begin , new text end production new text begin , or refining new text end of which is subject to the occupation tax imposed 82.26by section 298.01; but if any such corporation, individual, estate, or trust engages in any 82.27other business or activity or has income from any property not used in such business it 82.28shall be subject to this tax computed on the net income from such property or such other 82.29business or activity. Royalty shall not be considered as income from the business of 82.30mining or producing iron ore within the meaning of this section; 82.31(b) the United States of America, the state of Minnesota or any political subdivision 82.32of either agencies or instrumentalities, whether engaged in the discharge of governmental 82.33or proprietary functions; and 82.34(c) any insurance company. 83.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 83.2 new text begin December 31, 2010. new text end 83.3    Sec. 2. Minnesota Statutes 2010, section 297A.68, subdivision 4, is amended to read: 83.4    Subd. 4. Taconite new text begin , other ores, metals, or minerals; new text end production materials. Mill 83.5liners, grinding rods, and grinding balls that are substantially consumed in the production 83.6of taconite new text begin or other ores, metals, or minerals new text end are exempt when sold to or stored, used, or 83.7consumed by persons taxed under the in-lieu new text begin or net proceeds new text end provisions of chapter 298. 83.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 83.9 new text begin June 30, 2011. new text end 83.10    Sec. 3. Minnesota Statutes 2010, section 298.001, is amended by adding a subdivision 83.11to read: 83.12     new text begin Subd. 10. new text end new text begin Refining. new text end new text begin "Refining" means and is limited to refining: new text end 83.13 new text begin (1) of ores, metals, or mineral products, the mining, extraction, or quarrying of new text end 83.14 new text begin which were subject to tax under section 298.015; and new text end 83.15 new text begin (2) carried out by the entity, or an affiliated entity, that mined, extracted, or quarried new text end 83.16 new text begin the metal or mineral products. new text end 83.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 83.18 new text begin December 31, 2010. new text end 83.19    Sec. 4. Minnesota Statutes 2010, section 298.01, subdivision 3, is amended to read: 83.20    Subd. 3. Occupation tax; other ores. Every person engaged in the business of 83.21mining new text begin , refining, new text end or producing ores new text begin , metals, or minerals new text end in this state, except iron ore or 83.22taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided 83.23in this subdivision. new text begin For purposes of this subdivision, mining includes the application new text end 83.24 new text begin of hydrometallurgical processes. new text end The tax is determined in the same manner as the tax 83.25imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17, 83.26subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must 83.27be computed by applying to taxable income the rate of 2.45 percent. A person subject 83.28to occupation tax under this section shall apportion its net income on the basis of the 83.29percentage obtained by taking the sum of: 83.30(1) 75 percent of the percentage which the sales made within this state in connection 83.31with the trade or business during the tax period are of the total sales wherever made in 83.32connection with the trade or business during the tax period; 84.1(2) 12.5 percent of the percentage which the total tangible property used by the 84.2taxpayer in this state in connection with the trade or business during the tax period is of 84.3the total tangible property, wherever located, used by the taxpayer in connection with the 84.4trade or business during the tax period; and 84.5(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 84.6in this state or paid in respect to labor performed in this state in connection with the trade 84.7or business during the tax period are of the taxpayer's total payrolls paid or incurred in 84.8connection with the trade or business during the tax period. 84.9The tax is in addition to all other taxes. 84.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 84.11 new text begin December 31, 2010. new text end 84.12    Sec. 5. Minnesota Statutes 2010, section 298.01, subdivision 3a, is amended to read: 84.13    Subd. 3a. Gross income. (a) For purposes of determining a person's taxable income 84.14under subdivision 3, gross income is determined by the amount of gross proceeds from 84.15mining in this state under section 298.016 and includes any gain or loss recognized 84.16from the sale or disposition of assets used in the business in this state. If more than one 84.17 new text begin ore, new text end mineral, new text begin or new text end metal, or energy resource referred to in section 298.016 is mined and 84.18processed at the same mine and plant, a gross income for each new text begin ore, new text end mineral, new text begin or new text end metal, or 84.19energy resource must be determined separately. The gross incomes may be combined on 84.20one occupation tax return to arrive at the gross income of all production. 84.21(b) In applying section 290.191, subdivision 5, transfers of ores new text begin , metals, or minerals new text end 84.22 new text begin that are subject to tax under this chapter new text end are deemed to be sales in this state. 84.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 84.24 new text begin December 31, 2010. new text end 84.25    Sec. 6. Minnesota Statutes 2010, section 298.01, subdivision 4, is amended to read: 84.26    Subd. 4. Occupation tax; iron ore; taconite concentrates. new text begin (a) new text end A person engaged in 84.27the business of mining or producing of iron ore, taconite concentrates or direct reduced ore 84.28in this state shall pay an occupation tax to the state of Minnesota. The tax is determined 84.29in the same manner as the tax imposed by section 290.02, except that sections 290.05, 84.30subdivision 1 , clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply, 84.31and the occupation tax shall be computed by applying to taxable income the rate of 84.32percent new text begin set in paragraph (b) new text end . A person subject to occupation tax under this section shall 84.33apportion its net income on the basis of the percentage obtained by taking the sum of: 85.1(1) 75 percent of the percentage which the sales made within this state in connection 85.2with the trade or business during the tax period are of the total sales wherever made in 85.3connection with the trade or business during the tax period; 85.4(2) 12.5 percent of the percentage which the total tangible property used by the 85.5taxpayer in this state in connection with the trade or business during the tax period is of 85.6the total tangible property, wherever located, used by the taxpayer in connection with the 85.7trade or business during the tax period; and 85.8(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 85.9in this state or paid in respect to labor performed in this state in connection with the trade 85.10or business during the tax period are of the taxpayer's total payrolls paid or incurred in 85.11connection with the trade or business during the tax period. 85.12The tax is in addition to all other taxes. 85.13 new text begin (b) The rate of the tax imposed under this subdivision is as provided in this new text end 85.14 new text begin paragraph for the following taxable years: new text end 85.15 new text begin (1) for 2012 and 2013, 2.45 percent; new text end 85.16 new text begin (2) for 2014, 2.23 percent; new text end 85.17 new text begin (3) for 2015, 2.11 percent; new text end 85.18 new text begin (4) for 2016, 1.99 percent; new text end 85.19 new text begin (5) for 2017, 1.74 percent; new text end 85.20 new text begin (6) for 2018, 1.50 percent; new text end 85.21 new text begin (7) for 2019, 1.26 percent; new text end 85.22 new text begin (8) for 2020, 1.02 percent; new text end 85.23 new text begin (9) for 2021, .78 percent; new text end 85.24 new text begin (10) for 2022, .54 percent; new text end 85.25 new text begin (11) for 2023, .30 percent; and new text end 85.26 new text begin (12) for 2024 and subsequent years, .06 percent. new text end 85.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 85.28 new text begin December 31, 2010. new text end 85.29    Sec. 7. Minnesota Statutes 2010, section 298.015, subdivision 1, is amended to read: 85.30    Subdivision 1. Tax imposed. A person engaged in the business of mining shall pay 85.31to the state of Minnesota for distribution as provided in section 298.018 a net proceeds tax 85.32equal to two percent of the net proceeds from mining in Minnesota. The tax applies to all 85.33mineral and energy resources new text begin ores, metals, and minerals new text end mined or new text begin , new text end extracted new text begin , produced, new text end 85.34 new text begin or refined new text end within the state of Minnesota except for sand, silica sand, gravel, building 85.35stone, crushed rock, limestone, granite, dimension granite, dimension stone, horticultural 86.1peat, clay, soil, iron ore, and taconite concentrates. The tax is in addition to all other 86.2taxes provided for by law. 86.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 86.4 new text begin December 31, 2010. new text end 86.5    Sec. 8. Minnesota Statutes 2010, section 298.015, subdivision 2, is amended to read: 86.6    Subd. 2. Net proceeds. For purposes of this section, the term "net proceeds" means 86.7the gross proceeds from mining, as defined in section 298.016, less the deductions allowed 86.8in section new text begin for purposes of determining taxable income under section 298.01, new text end 86.9 new text begin subdivision 3b, applied to the mining, production, processing, beneficiation, smelting, or new text end 86.10 new text begin refining of metal or mineral products new text end . No other credits or deductions shall apply to this tax 86.11except for those provided in section . 86.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2012 and new text end 86.13 new text begin thereafter. new text end 86.14    Sec. 9. Minnesota Statutes 2010, section 298.016, subdivision 4, is amended to read: 86.15    Subd. 4. Definitions new text begin Metal or mineral products; definition new text end . For the purposes of 86.16sections and new text begin this section new text end , the terms defined in this subdivision have the 86.17meaning given them unless the context clearly indicates otherwise. 86.18(a) "metal or mineral products" means all those mineral and energy resources new text begin ores, new text end 86.19 new text begin metals, and minerals new text end subject to the tax provided in section 298.015. 86.20(b) "Exploration" means activities designed and engaged in to ascertain the 86.21existence, location, extent, or quality of any deposit of metal or mineral products prior to 86.22the development of a mining site. 86.23(c) "Development" means activities designed and engaged in to prepare or develop 86.24a potential mining site for mining after the existence of metal or mineral products in 86.25commercially marketable quantities has been disclosed including, but not limited to, 86.26the clearing of forestation, the building of roads, removal of overburden, or the sinking 86.27of shafts. 86.28(d) "Research" means activities designed and engaged in to create new or improved 86.29methods of mining, producing, processing, beneficiating, smelting, or refining metal 86.30or mineral products. 86.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 86.32 new text begin December 31, 2010. new text end 87.1    Sec. 10. Minnesota Statutes 2010, section 298.225, subdivision 1, is amended to read: 87.2    Subdivision 1. Guaranteed distribution. (a) The distribution of the taconite 87.3production tax as provided in section 298.28, subdivisions 3 to 5, 6, paragraph (b), new text begin and new text end 87.47, and 8, shall equal the lesser of the following amounts: 87.5(1) the amount distributed pursuant to this section and section 298.28, with respect 87.6to 1983 production if the production for the year prior to the distribution year is no less 87.7than 42,000,000 taxable tons. If the production is less than 42,000,000 taxable tons, the 87.8amount of the distributions shall be reduced proportionately at the rate of two percent 87.9for each 1,000,000 tons, or part of 1,000,000 tons by which the production is less than 87.1042,000,000 tons; or 87.11(2)(i) for the distributions made pursuant to section 298.28, subdivisions 4, 87.12paragraphs (b) and (c), and 6, paragraph (c), 31.2 percent of the amount distributed 87.13pursuant to this section and section 298.28, with respect to 1983 production; 87.14(ii) for the distributions made pursuant to section 298.28, subdivision 5, paragraphs 87.15(b) and (d), 75 percent of the amount distributed pursuant to this section and section 87.16298.28 , with respect to 1983 production. 87.17(b) The distribution of the taconite production tax as provided in section 298.28, 87.18subdivision 2 , shall equal the following amount: 87.19(1) if the production for the year prior to the distribution year is at least 42,000,000 87.20taxable tons, the amount distributed pursuant to this section and section 298.28 with 87.21respect to 1999 production; or 87.22(2) if the production for the year prior to the distribution year is less than 42,000,000 87.23taxable tons, the amount distributed pursuant to this section and section 298.28 with respect 87.24to 1999 production, reduced proportionately at the rate of two percent for each 1,000,000 87.25tons or part of 1,000,000 tons by which the production is less than 42,000,000 tons. 87.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for distributions in 2012 and new text end 87.27 new text begin thereafter. new text end 87.28    Sec. 11. Minnesota Statutes 2010, section 298.24, subdivision 1, is amended to read: 87.29    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 87.302002, and 2003 new text begin 2011 and subsequent years new text end , there is imposed upon taconite and iron 87.31sulphides, and upon the mining and quarrying thereof, and upon the production of 87.32iron ore concentrate therefrom, and upon the concentrate so produced, new text begin and upon other new text end 87.33 new text begin iron-bearing material, new text end a tax of $2.103 new text begin $2.074 new text end per gross ton of merchantable iron ore 87.34concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the 88.1same rate imposed for concentrates produced in 2004. For concentrates produced in 2009 88.2and subsequent years, the tax is also imposed upon other iron-bearing material. 88.3    (b) For concentrates produced in 2006 and subsequent years, the tax rate shall be 88.4equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate 88.5multiplied by the percentage increase in the implicit price deflator from the fourth quarter 88.6of the second preceding year to the fourth quarter of the preceding year. "Implicit price 88.7deflator" means the implicit price deflator for the gross domestic product prepared by the 88.8Bureau of Economic Analysis of the United States Department of Commerce. 88.9    (c) An additional tax is imposed equal to three cents per gross ton of merchantable 88.10iron ore concentrate for each one percent that the iron content of the product exceeds 72 88.11percent, when dried at 212 degrees Fahrenheit. 88.12    (d) new text begin (c) new text end The tax on taconite and iron sulphides shall be imposed on the average of the 88.13production for the current year and the previous two years. The rate of the tax imposed 88.14will be the current year's tax rate. This clause shall not apply in the case of the closing 88.15of a taconite facility if the property taxes on the facility would be higher if this clause 88.16and section 298.25 were not applicable. The tax on other iron-bearing material shall be 88.17imposed on the current year production. 88.18    (e) new text begin (d) new text end If the tax or any part of the tax imposed by this subdivision is held to be 88.19unconstitutional, a tax of $2.103 new text begin $2.074 new text end per gross ton of merchantable iron ore concentrate 88.20produced shall be imposed. 88.21    (f) new text begin (e) new text end Consistent with the intent of this subdivision to impose a tax based upon the 88.22weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 88.23determine the weight of merchantable iron ore concentrate included in fluxed pellets by 88.24subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 88.25flux additives included in the pellets from the weight of the pellets. For purposes of this 88.26paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 88.27olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 88.28No subtraction from the weight of the pellets shall be allowed for binders, mineral and 88.29chemical additives other than basic flux additives, or moisture. 88.30    (g) new text begin (f) new text end (1) Notwithstanding any other provision of this subdivision, for the first two 88.31years of a plant's commercial production of direct reduced ore from ore mined in this state, 88.32no tax is imposed under this section. As used in this paragraph, "commercial production" 88.33is production of more than 50,000 tons of direct reduced ore in the current year or in any 88.34prior year, "noncommercial production" is production of 50,000 tons or less of direct 88.35reduced ore in any year, and "direct reduced ore" is ore that results in a product that has an 88.36iron content of at least 75 percent. For the third year of a plant's commercial production of 89.1direct reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate 89.2otherwise determined under this subdivision. For the fourth commercial production year, 89.3the rate is 50 percent of the rate otherwise determined under this subdivision; for the fifth 89.4commercial production year, the rate is 75 percent of the rate otherwise determined under 89.5this subdivision; and for all subsequent commercial production years, the full rate is 89.6imposed. 89.7    (2) Subject to clause (1), production of direct reduced ore in this state is subject to 89.8the tax imposed by this section, but if that production is not produced by a producer of 89.9taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron 89.10sulfides, or other iron-bearing material, that is consumed in the production of direct 89.11reduced iron in this state is not subject to the tax imposed by this section on taconite, 89.12iron sulfides, or other iron-bearing material. 89.13    (3) Notwithstanding any other provision of this subdivision, no tax is imposed 89.14on direct reduced ore under this section during the facility's noncommercial production 89.15of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 89.16production of direct reduced ore is subject to the tax imposed by this section on taconite 89.17and iron sulphides. Three-year average production of direct reduced ore does not 89.18include production of direct reduced ore in any noncommercial year. Three-year average 89.19production for a direct reduced ore facility that has noncommercial production is the 89.20average of the commercial production of direct reduced ore for the current year and the 89.21previous two commercial years. 89.22    (4) This paragraph applies only to plants for which all environmental permits have 89.23been obtained and construction has begun before July 1, 2008. 89.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for production in 2011 and thereafter. new text end 89.25    Sec. 12. Minnesota Statutes 2010, section 298.28, subdivision 3, is amended to read: 89.26    Subd. 3. Cities; towns. (a) 12.5 new text begin 12.2 new text end cents per taxable ton, less any amount 89.27distributed under subdivision 8, and paragraph (b), must be allocated to the taconite 89.28municipal aid account to be distributed as provided in section 298.282. 89.29    (b) An amount must be allocated to towns or cities that is annually certified by 89.30the county auditor of a county containing a taconite tax relief area as defined in section 89.31273.134, paragraph (b) , within which there is (1) an organized township if, as of January 89.322, 1982, more than 75 percent of the assessed valuation of the township consists of iron 89.33ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation 89.34of the city consists of iron ore. 90.1    (c) The amount allocated under paragraph (b) will be the portion of a township's or 90.2city's certified levy equal to the proportion of (1) the difference between 50 percent of 90.3January 2, 1982, assessed value in the case of a township and 50 percent of the January 2, 90.41980, assessed value in the case of a city and its current assessed value to (2) the sum of 90.5its current assessed value plus the difference determined in (1), provided that the amount 90.6distributed shall not exceed $55 per capita in the case of a township or $75 per capita in 90.7the case of a city. For purposes of this limitation, population will be determined according 90.8to the 1980 decennial census conducted by the United States Bureau of the Census. If the 90.9current assessed value of the township exceeds 50 percent of the township's January 2, 90.101982, assessed value, or if the current assessed value of the city exceeds 50 percent of the 90.11city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this 90.12paragraph, "assessed value," when used in reference to years other than 1980 or 1982, 90.13means the appropriate net tax capacities multiplied by 10.2. 90.14    (d) In addition to other distributions under this subdivision, three new text begin 3.1 new text end cents per 90.15taxable ton for distributions in 2009 new text begin 2012 and subsequent years new text end must be allocated for 90.16distribution to towns that are entirely located within the taconite tax relief area defined 90.17in section 273.134, paragraph (b). For distribution in 2010 and subsequent years, the 90.18three-cent amount must be annually increased in the same proportion as the increase 90.19in the implicit price deflator as provided in section 298.24, subdivision 1. The amount 90.20available under this paragraph will be distributed to eligible towns on a per capita basis, 90.21provided that no town may receive more than $50,000 in any year under this paragraph. 90.22Any amount of the distribution that exceeds the $50,000 limitation for a town under this 90.23paragraph must be redistributed on a per capita basis among the other eligible towns, to 90.24whose distributions do not exceed $50,000. 90.25    Sec. 13. Minnesota Statutes 2010, section 298.28, subdivision 6, is amended to read: 90.26    Subd. 6. Property tax relief. (a) In 2002 new text begin 2012 new text end and thereafter, new text begin 41.6 new text end cents per 90.27taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or 90.28section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the 90.29counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136. 90.30(b) If an electric power plant owned by and providing the primary source of power 90.31for a taxpayer mining and concentrating taconite is located in a county other than the 90.32county in which the mining and the concentrating processes are conducted, .1875 cent per 90.33taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county. 90.34(c) If an electric power plant owned by and providing the primary source of power 90.35for a taxpayer mining and concentrating taconite is located in a school district other than 91.1a school district in which the mining and concentrating processes are conducted, .4541 91.2cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to 91.3the school district. 91.4    Sec. 14. Minnesota Statutes 2010, section 298.28, subdivision 7, is amended to read: 91.5    Subd. 7. Iron Range Resources and Rehabilitation Board. For the 1998 new text begin 2012 and new text end 91.6 new text begin subsequent years new text end distribution, 6.5 new text begin 8.3 new text end cents per taxable ton shall be paid to the Iron Range 91.7Resources and Rehabilitation Board for the purposes of section 298.22. That amount 91.8shall be increased in 1999 and subsequent years in the same proportion as the increase 91.9in the implicit price deflator as provided in section 298.24, subdivision 1. The amount 91.10distributed pursuant to this subdivision shall be expended within or for the benefit of the 91.11taconite assistance area defined in section 273.1341. No part of the fund provided in this 91.12subdivision may be used to provide loans for the operation of private business unless the 91.13loan is approved by the governor. 91.14    Sec. 15. Minnesota Statutes 2010, section 298.28, subdivision 9, is amended to read: 91.15    Subd. 9. Douglas J. Johnson economic protection trust fund. In 1999, new text begin 2012 new text end 91.16 new text begin and subsequent years, 4.2 new text end cents per taxable ton shall be paid to the Douglas J. Johnson 91.17economic protection trust fund. 91.18    Sec. 16. Minnesota Statutes 2010, section 298.28, subdivision 9b, is amended to read: 91.19    Subd. 9b. Taconite environmental fund. new text begin In 2012 and subsequent years, new text end five cents 91.20per ton new text begin , plus the amount paid to the fund in 2011 under subdivision 10, paragraph (b), new text end must 91.21be paid to the taconite environmental fund for use under section 298.2961, subdivision 4. 91.22    Sec. 17. new text begin REPEALER. new text end 91.23 new text begin (a) new text end new text begin Minnesota Statutes 2010, sections 298.227; and 298.28, subdivisions 8, 9a, new text end 91.24 new text begin 9c, and 10, new text end new text begin are repealed. new text end 91.25 new text begin (b) new text end new text begin Minnesota Statutes 2010, section 298.285, new text end new text begin is repealed. new text end 91.26 new text begin (c) new text end new text begin Minnesota Statutes 2010, section 298.017, new text end new text begin is repealed. new text end 91.27 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) is effective for distributions in 2012 and new text end 91.28 new text begin thereafter of taxes on production in 2011 and thereafter. Paragraph (b) is effective June 30, new text end 91.29 new text begin 2011. Paragraph (c) is effective for taxable years beginning after December 31, 2010. new text end 92.1ARTICLE 7 92.2MISCELLANEOUS 92.3    Section 1. Minnesota Statutes 2010, section 270A.03, subdivision 2, is amended to 92.4read: 92.5    Subd. 2. Claimant agency. "Claimant agency" means any state agency, as defined 92.6by section 14.02, subdivision 2, the regents of the University of Minnesota, any district 92.7court of the state, any county, any statutory or home rule charter city, including a city 92.8that is presenting a claim for a municipal hospital or a public library or a municipal 92.9ambulance service, a hospital district, a private nonprofit hospital that leases its building 92.10from the county or city in which it is located, new text begin any ambulance service licensed under new text end 92.11 new text begin chapter 144E, new text end any public agency responsible for child support enforcement, any public 92.12agency responsible for the collection of court-ordered restitution, and any public agency 92.13established by general or special law that is responsible for the administration of a 92.14low-income housing program, and the Minnesota collection enterprise as defined in 92.15section 16D.02, subdivision 8, for the purpose of collecting the costs imposed under 92.16section 16D.11. A county may act as a claimant agency on behalf of an ambulance service 92.17licensed under chapter 144E if the ambulance service's primary service area is located at 92.18least in part within the county, but more than one county may not act as a claimant agency 92.19for a licensed ambulance service with respect to the same debt. 92.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 92.21    Sec. 2. Minnesota Statutes 2010, section 270A.07, subdivision 1, is amended to read: 92.22    Subdivision 1. Notification requirement. (a) Any claimant agency, seeking 92.23collection of a debt through setoff against a refund due, shall submit to the commissioner 92.24information indicating the amount of each debt and information identifying the debtor, as 92.25required by section 270A.04, subdivision 3. 92.26(b) For each setoff of a debt against a refund due, the commissioner shall charge a fee 92.27of $15. The proceeds of fees shall be allocated by depositing $4 of each $15 fee collected 92.28into a Department of Revenue recapture revolving fund and depositing the remaining 92.29balance into the general fund. The sums deposited into the revolving fund are appropriated 92.30to the commissioner for the purpose of administering the Revenue Recapture Act. 92.31(c) For each debt for which a county acts as claimant agency on behalf of a licensed 92.32ambulance service, the county may charge the ambulance service a fee not to exceed the 92.33cost of administering the claim. 93.1(d) The claimant agency shall notify the commissioner when a debt has been 93.2satisfied or reduced by at least $200 within 30 days after satisfaction or reduction. 93.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 93.4    Sec. 3. Minnesota Statutes 2010, section 270C.13, subdivision 1, is amended to read: 93.5    Subdivision 1. Biennial report. The commissioner shall report to the legislature 93.6by March 1 of each odd-numbered year on the overall incidence of the income tax, 93.7sales and excise taxes, and property tax. The report shall present information on the 93.8distribution of the tax burden as follows: (1) for the overall income distribution, using 93.9a systemwide incidence measure such as the Suits index or other appropriate measures 93.10of equality and inequality; (2) by income classes, including at a minimum deciles of the 93.11income distribution; and (3) by other appropriate taxpayer characteristics. new text begin The report new text end 93.12 new text begin must also include information on the distribution of the burden of federal taxes borne new text end 93.13 new text begin by Minnesota residents. new text end 93.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with the report due in new text end 93.15 new text begin March 2013. new text end 93.16    Sec. 4. new text begin APPROPRIATION; TAX INCIDENCE REPORT. new text end 93.17 new text begin $15,000 in fiscal year 2012 and $15,000 in fiscal year 2013 are appropriated from new text end 93.18 new text begin the general fund to the commissioner of revenue for the change to the tax incidence new text end 93.19 new text begin report in section 3. new text end 93.20    Sec. 5. new text begin CASH FLOW ACCOUNT REDUCTION. new text end 93.21 new text begin On July 1, 2011, the commissioner of management and budget shall cancel new text end 93.22 new text begin $216,000,000 of the balance in the cash flow account in Minnesota Statutes, section new text end 93.23 new text begin 16A.152, to the general fund. new text end 93.24    Sec. 6. new text begin BUDGET RESERVE REDUCTION. new text end 93.25 new text begin On July 1, 2011, the commissioner of management and budget shall cancel new text end 93.26 new text begin $8,665,000 of the balance in the budget reserve account in Minnesota Statutes, section new text end 93.27 new text begin 16A.152, to the general fund. new text end