1.1 	A bill for an act
1.2 	relating to the financing of state and local government; making changes to 
1.3 	individual income, corporate franchise, estate, property, aids, credits, payments, 
1.4 	refunds, sales and use, minerals, local, tax increment financing, insurance, 
1.5 	and other taxes and tax-related provisions; authorizing local taxes; modifying 
1.6 	sustainable forest resource management incentive; providing a science and 
1.7 	technology program; conforming to changes made to the Internal Revenue 
1.8 	Code; requiring commissioner of revenue to initiate negotiations for reciprocity 
1.9 	agreement with state of Wisconsin; setting the levels of the cash flow account 
1.10 	and the budget reserve account; reducing certain maintenance of effort 
1.11 	requirements; modifying powers of commissioner of revenue resulting from 
1.12 	temporary state shutdown; providing disaster relief; authorizing income tax 
1.13 	data sharing with Wisconsin; providing alternative process for consolidation 
1.14 	of counties; authorizing tobacco bonds; requiring studies; requiring reports; 
1.15 	appropriating money;amending Minnesota Statutes 2010, sections 16A.151, 
1.16 	subdivision 2; 97A.061, subdivision 1; 126C.01, subdivision 3; 270B.12, 
1.17 	by adding a subdivision; 270C.13, subdivision 1; 270C.991, subdivision 4; 
1.18 	272.02, subdivision 39, by adding subdivisions; 273.121, subdivision 1; 273.13, 
1.19 	subdivisions 23, as amended, 25, 34, by adding a subdivision; 273.1384, 
1.20 	subdivisions 3, 4; 273.1393; 275.025, subdivision 3; 276.04, subdivision 2; 
1.21 	289A.02, subdivision 7, as amended; 290.01, subdivisions 19, as amended, 19a, 
1.22 	as amended, 19c, as amended, 31, as amended; 290.05, subdivision 1; 290.0671, 
1.23 	subdivision 1; 290.0675, subdivision 1; 290.9201, subdivision 11; 290A.03, 
1.24 	subdivisions 11, 13, 15, as amended; 290A.04, subdivisions 2, 4; 290C.07; 
1.25 	291.005, subdivision 1; 291.03, subdivision 1, by adding subdivisions; 297A.61, 
1.26 	subdivision 3, as amended, by adding subdivisions; 297A.66, by adding a 
1.27 	subdivision; 297A.668, by adding a subdivision; 297A.68, subdivision 4, by 
1.28 	adding subdivisions; 297A.70, subdivisions 1, 2, 3, 6; 297A.75, subdivisions 1, 
1.29 	2, 3; 297A.99, subdivisions 1, 3; 297B.03; 297I.01, subdivisions 9, 16, by adding 
1.30 	subdivisions; 297I.05, subdivisions 7, 12; 297I.30, subdivisions 1, 2; 298.001, 
1.31 	by adding a subdivision; 298.01, subdivisions 3, 3a; 298.015, subdivisions 
1.32 	1, 2; 298.016, subdivision 4; 473.757, subdivision 11; 477A.011, subdivision 
1.33 	20; 477A.0124, by adding a subdivision; 477A.013, subdivision 9, by adding a 
1.34 	subdivision; 477A.03; 477A.11, subdivision 1; 477A.12, subdivision 1; 477A.14, 
1.35 	subdivision 1; Laws 1995, chapter 264, article 5, section 45, subdivision 1, 
1.36 	as amended; Laws 1996, chapter 471, article 2, section 29, subdivision 1, as 
1.37 	amended; Laws 1998, chapter 389, article 8, section 43, subdivisions 3, as 
1.38 	amended, 4, as amended, 5, as amended; Laws 2006, chapter 257, section 2; 
1.39 	Laws 2008, chapter 366, article 7, section 19, subdivision 3; Laws 2010, chapter 
2.1 	389, article 5, section 6, subdivision 1; Laws 2010, First Special Session chapter 
2.2 	1, article 13, section 4, subdivision 1; proposing coding for new law in Minnesota 
2.3 	Statutes, chapters 16A; 116W; 275; 373; repealing Minnesota Statutes 2010, 
2.4 	sections 273.1384, subdivisions 1, 6; 275.295; 290.0678; 290.9201, subdivision 
2.5 	3; 297I.05, subdivisions 9, 10; 298.017; 477A.145.
2.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.7 	ARTICLE 1
2.8 	INDIVIDUAL INCOME AND ESTATE TAXES

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

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

2.16 	Sec. 2. Minnesota Statutes 2010, section 290.9201, subdivision 11, is amended to read:
2.17 		Subd. 11.Exception Exemption from withholding for public speakers and tax.
 2.18 	The provisions of (a) Subdivisions 7 and 8 shall not be effective for do not apply to:
2.19 	(1) compensation paid to nonresident public speakers, if the compensation paid to 
2.20 	the speaker is less than $2,000 or is only a payment of the speaker's expenses.; or
2.21 	(2) compensation paid to an entertainment entity if the compensation paid to the 
2.22 	entertainment entity is less than $600.
2.23 	(b) Compensation paid to a public speaker or an entertainment entity that is not 
2.24 	subject to withholding tax under this subdivision is not subject to tax under subdivision 2 
2.25 	unless the total compensation received by the public speaker or entertainment entity in the 
2.26 	tax year exceeds the individual income tax filing requirements for a nonresident individual 
2.27 	under section 289A.08, subdivision 1, paragraph (a), clause (1).

2.28 	EFFECTIVE DATE. This section is effective for compensation paid or received 
2.29 	after December 31, 2011.

2.30 	Sec. 3. Minnesota Statutes 2010, section 291.005, subdivision 1, is amended to read:
2.31 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following 
2.32 	terms used in this chapter shall have the following meanings:
3.1 	(1) "Commissioner" means the commissioner of revenue or any person to whom the 
3.2 	commissioner has delegated functions under this chapter.
3.3 	(2) "Federal gross estate" means the gross estate of a decedent as required to be 
3.4 	valued and otherwise determined for federal estate tax purposes under the Internal 
3.5 	Revenue Code.
3.6 	(3) "Internal Revenue Code" means the United States Internal Revenue Code of 
3.7 	1986, as amended through March 18, 2010, but without regard to the provisions of 
3.8 	sections 501 and 901 of Public Law 107-16.
3.9 	(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
3.10 	defined by section 2011(b)(3) of the Internal Revenue Code, increased by plus
3.11 	(i) the amount of deduction for state death taxes allowed under section 2058 of 
3.12 	the Internal Revenue Code; less
3.13 	(ii) (A) the value of qualified small business property under section 291.03, 
3.14 	subdivision 9, and the value of qualified farm property under section 291.03, subdivision 
3.15 	10, or (B) $4,000,000, whichever is less.
3.16 	(5) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
3.17 	excluding therefrom any property included therein which has its situs outside Minnesota, 
3.18 	and (b) including therein any property omitted from the federal gross estate which is 
3.19 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
3.20 	authorities.
3.21 	(6) "Nonresident decedent" means an individual whose domicile at the time of 
3.22 	death was not in Minnesota.
3.23 	(7) "Personal representative" means the executor, administrator or other person 
3.24 	appointed by the court to administer and dispose of the property of the decedent. If there 
3.25 	is no executor, administrator or other person appointed, qualified, and acting within this 
3.26 	state, then any person in actual or constructive possession of any property having a situs in 
3.27 	this state which is included in the federal gross estate of the decedent shall be deemed 
3.28 	to be a personal representative to the extent of the property and the Minnesota estate tax 
3.29 	due with respect to the property.
3.30 	(8) "Resident decedent" means an individual whose domicile at the time of death 
3.31 	was in Minnesota.
3.32 	(9) "Situs of property" means, with respect to real property, the state or country in 
3.33 	which it is located; with respect to tangible personal property, the state or country in which 
3.34 	it was normally kept or located at the time of the decedent's death; and with respect to 
3.35 	intangible personal property, the state or country in which the decedent was domiciled 
3.36 	at death.

4.1 	EFFECTIVE DATE. This section is effective for decedents dying after June 30, 
4.2 	2011.

4.3 	Sec. 4. Minnesota Statutes 2010, section 291.03, subdivision 1, is amended to read:
4.4 		Subdivision 1.Tax amount. (a) The tax imposed shall be an amount equal to the 
4.5 	proportion of the maximum credit for state death taxes computed under section 2011 
4.6 	of the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of 
4.7 	federal adjusted taxable estate, as the Minnesota gross estate bears to the value of the 
4.8 	federal gross estate.
4.9 	(b) The tax determined under this subdivision must not be greater than the sum of 
4.10 	the following amounts multiplied by a fraction, the numerator of which is the Minnesota 
4.11 	gross estate and the denominator of which is the federal gross estate:
4.12 	(1) the rates and brackets under section 2001(c) of the Internal Revenue Code 
4.13 	multiplied by the sum of:
4.14 	(i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; 
4.15 	plus
4.16 	(ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue 
4.17 	Code; less
4.18 	(iii) the lesser of (A) the sum of the value of qualified small business property 
4.19 	under subdivision 9, and the value of qualified farm property under subdivision 10, 
4.20 	or (B) $4,000,000; less
4.21 	(2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue 
4.22 	Code; and less
4.23 	(3) the federal credit allowed under section 2010 of the Internal Revenue Code.
4.24 	(c) For purposes of this subdivision, "Internal Revenue Code" means the Internal 
4.25 	Revenue Code of 1986, as amended through December 31, 2000.

4.26 	EFFECTIVE DATE. This section is effective for decedents dying after June 30, 
4.27 	2011.

4.28 	Sec. 5. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 
4.29 	to read:
4.30 		Subd. 8.Definitions. (a) For purposes of this section, the following terms have the 
4.31 	meanings given in this subdivision.
4.32 	(b) "Family member" means a family member as defined in section 2032A(e)(2) of 
4.33 	the Internal Revenue Code.
5.1 	(c)  "Qualified heir" means a family member who acquired qualified property from 
5.2 	the decedent and satisfies the requirement under subdivision 9, clause (6), or subdivision 
5.3 	10, clause (4), for the property.
5.4 	(d)  "Qualified property" means qualified small businesss property under subdivision 
5.5 	9 and qualified farm property under subdivision 10.

5.6 	EFFECTIVE DATE. This section is effective for decedents dying after June 30, 
5.7 	2011.

5.8 	Sec. 6. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 
5.9 	to read:
5.10 		Subd. 9.Qualified small business property. Property satisfying all of the following 
5.11 	requirements is qualified small business property:
5.12 	(1) The value of the property was included in the federal adjusted taxable estate.
5.13 	(2) The property consists of the assets of a trade or business or shares of stock or 
5.14 	other ownership interests in a corporation or other entity engaged in a trade or business. 
5.15 	The decedent or the decedent's spouse must have materially participated in the trade or 
5.16 	business within the meaning of section 469 of the Internal Revenue Code during the 
5.17 	taxable year that ended before the date of the decedent's death. Shares of stock in a 
5.18 	corporation or an ownership interest in another type of entity do not qualify under this 
5.19 	subdivision if the shares or ownership interests are traded on a public stock exchange at 
5.20 	any time during the three-year period ending on the decedent's date of death.
5.21 	(3) The gross annual sales of the trade or business were $10,000,000 or less for the 
5.22 	last taxable year that ended before the date of the death of the decedent.
5.23 	(4) The property does not consist of cash or cash equivalents. For property consisting 
5.24 	of shares of stock or other ownership interests in an entity, the amount of cash or cash 
5.25 	equivalents held by the corporation or other entity must be deducted from the value of 
5.26 	the property qualifying under this subdivision in proportion to the decedent's share of 
5.27 	ownership of the entity on the date of death.
5.28 	(5) The decedent continuously owned the property for the three-year period ending 
5.29 	on the date of death of the decedent.
5.30 	(6) A family member continuously uses the property in the operation of the trade or 
5.31 	business for three years following the date of death of the decedent.
5.32 	(7) The estate and the qualified heir elect to treat the property as qualified small 
5.33 	business property and agree, in the form prescribed by the commissioner, to pay the 
5.34 	recapture tax under subdivision 11, if applicable.

6.1 	EFFECTIVE DATE. This section is effective for decedents dying after June 30, 
6.2 	2011.

6.3 	Sec. 7. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 
6.4 	to read:
6.5 		Subd. 10.Qualified farm property. Property satisfying all of the following 
6.6 	requirements is qualified farm property:
6.7 	(1) The value of the property was included in the federal adjusted taxable estate.
6.8 	(2) The property consists of a farm meeting the requirements of section 500.24, 
6.9 	and was classified for property tax purposes as the homestead of the decedent or the 
6.10 	decedent's spouse or both under section 273.124, and as class 2a property under section 
6.11 	273.13, subdivision 23.
6.12 	(3) The decedent continuously owned the property for the three-year period ending 
6.13 	on the date of death of the decedent.
6.14 	(4) A family member continuously uses the property in the operation of the trade or 
6.15 	business for three years following the date of death of the decedent.
6.16 	(5) The estate and the qualified heir elect to treat the property as qualified farm 
6.17 	property and agree, in a form prescribed by the commissioner, to pay the recapture tax 
6.18 	under subdivision 11, if applicable.

6.19 	EFFECTIVE DATE. This section is effective for decedents dying after June 30, 
6.20 	2011.

6.21 	Sec. 8. Minnesota Statutes 2010, section 291.03, is amended by adding a subdivision 
6.22 	to read:
6.23 		Subd. 11.Recapture tax. (a) If, within three years after the decedent's death and 
6.24 	before the death of the qualified heir, the qualified heir disposes of any interest in the 
6.25 	qualified property, other than by a disposition to a family member, or a family member 
6.26 	ceases to use the qualified property which was acquired or passed from the decedent, an 
6.27 	additional estate tax is imposed on the property.
6.28 	(b) The amount of the additional tax equals the amount of the exclusion claimed by 
6.29 	the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
6.30 	(c) The additional tax under this subdivision is due on the day which is six months 
6.31 	after the date of the disposition or cessation in paragraph (a).

6.32 	EFFECTIVE DATE. This section is effective for decedents dying after June 30, 
6.33 	2011.

7.1 	Sec. 9. INCOME TAX RECIPROCITY BENCHMARK STUDY.
 7.2 	(a) The Department of Revenue, in conjunction with the Wisconsin Department of 
7.3 	Revenue, must, provided the conditions of paragraph (d) are satisfied, conduct a study to 
7.4 	determine at least the following:
7.5 	(1) the number of residents of each state who earn income from personal services in 
7.6 	the other state;
7.7 	(2) the total amount of income earned by residents of each state who earn income 
7.8 	from personal services in the other state; and
7.9 	(3) the change in tax revenue in each state if an income tax reciprocity arrangement 
7.10 	were resumed between the two states under which the taxpayers were required to pay 
7.11 	income taxes on the income only in their state of residence.
7.12 	(b) The study must use information obtained from each state's income tax returns 
7.13 	for tax year 2011, and from any other source of information the departments determine is 
7.14 	necessary to complete the study.
7.15 	(c) No later than March 1, 2013, the Department of Revenue must submit a report 
7.16 	containing the results of the study to the governor and to the chairs and ranking minority 
7.17 	members of the legislative committees having jurisdiction over taxes, in compliance with 
7.18 	Minnesota Statutes, sections 3.195 and 3.197.
7.19 	(d) The department shall conduct the study only if the commissioner of revenue 
7.20 	receives notice from the secretary of revenue that the Wisconsin Department of Revenue 
7.21 	will fully participate in the study.

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

7.23 	Sec. 10. ESTATE TAX; STUDY.
 7.24 	(a) The commissioner of revenue shall conduct a study of the Minnesota estate tax. 
7.25 	The study must include at least the following elements:
7.26 	(1) evaluation of the estate tax using standard tax policy principles and methods of 
7.27 	analysis;
7.28 	(2) consideration of the implications of recent federal estate tax changes, including 
7.29 	the repeal of the federal credit for state death taxes, the increase in the federal exclusion 
7.30 	amount, and the portability of the federal exclusion, for state estate and inheritance taxes;
7.31 	(3) consideration of the advantages and disadvantages of revenue neutral alternatives 
7.32 	to the estate tax, such as an inheritance tax, a complementary gift tax, or imposition of 
7.33 	the income tax on bequests; and
8.1 	(4) analysis of the available empirical evidence on the effects of the present and 
8.2 	alternative tax structures of a Minnesota tax on estates or inheritances on domicile and 
8.3 	migration decisions of residents and the implications for state revenues.
8.4 	(b) In preparing the study, the commissioner shall consult with and seek advice from 
8.5 	the probate and estate section of the Minnesota State Bar Association.
8.6 	(c) By February 1, 2013, the commissioner shall submit a report to the chairs and 
8.7 	ranking minority members of the house of representatives and senate committees with 
8.8 	jurisdiction over taxation, in compliance with Minnesota Statutes, sections 3.195 and 
8.9 	3.197, of the findings of the study and identification of issues for policy makers to consider 
8.10 	in deciding whether to revise, reform, replace, or repeal the estate tax.

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

8.12 	Sec. 11. NEW RECIPROCITY AGREEMENT WITH WISCONSIN.
 8.13 	(a) The commissioner of revenue shall initiate negotiations with the secretary of 
8.14 	revenue of Wisconsin, with the objective of entering into an income tax reciprocity 
8.15 	agreement effective for tax years beginning after December 31, 2011.
8.16 	(b) At least 30 days before entering a final income tax reciprocity agreement with 
8.17 	Wisconsin, the commissioner of revenue shall provide a copy of the proposed agreement 
8.18 	and any supporting documentation, including an estimate of the impact of the agreement 
8.19 	on state revenues, to the chairs and ranking minority members of the committees of the 
8.20 	house of representatives and senate with jurisdiction over taxes. The commissioner shall 
8.21 	consider any comments on the proposed agreement provided by the chairs or ranking 
8.22 	minority members.

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

8.24 	Sec. 12. APPROPRIATIONS.
 8.25 	$291,000 in fiscal year 2012 and $314,000 in fiscal year 2013 are appropriated from 
8.26 	the general fund to the commissioner of revenue for the income reciprocity benchmark 
8.27 	study required under section 9. The appropriations under this section are onetime and 
8.28 	are not added to the agency's base budget.

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

8.30 	Sec. 13.  REPEALER.
 8.31 	(a) Minnesota Statutes 2010, section 290.0678, is repealed.
8.32 	(b) Minnesota Statutes 2010, section 290.9201, subdivision 3, is repealed.

9.1 	EFFECTIVE DATE. Paragraph (a) is effective for taxable years beginning after 
9.2 	December 31, 2011. Paragraph (b) is effective for compensation received after December 
9.3 	31, 2011.

9.4 	ARTICLE 2
9.5 	FEDERAL UPDATE

9.6 	Section 1. Minnesota Statutes 2010, section 289A.02, subdivision 7, as amended by 
9.7 	Laws 2011, chapter 8, section 1, is amended to read:
9.8 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, for taxable 
9.9 	years beginning before January 1, 2010, and after December 31, 2010, "Internal Revenue 
9.10 	Code" means the Internal Revenue Code of 1986, as amended through March 18, 2010; 
9.11 	and for taxable years beginning after December 31, 2009, and before January 1, 2011, 
9.12 	"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through 
9.13 	December 31, 2010 April 14, 2011.

9.14 	EFFECTIVE DATE. This section is effective the day following final enactment for 
9.15 	taxable years beginning after December 31, 2009.

9.16 	Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19, as amended by Laws 
9.17 	2011, chapter 8, section 2, is amended to read:
9.18 		Subd. 19.Net income. The term "net income" means the federal taxable income, 
9.19 	as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 
9.20 	date named in this subdivision, incorporating the federal effective dates of changes to the 
9.21 	Internal Revenue Code and any elections made by the taxpayer in accordance with the 
9.22 	Internal Revenue Code in determining federal taxable income for federal income tax 
9.23 	purposes, and with the modifications provided in subdivisions 19a to 19f.
9.24 	In the case of a regulated investment company or a fund thereof, as defined in section 
9.25 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
9.26 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
9.27 	except that:
9.28 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
9.29 	Revenue Code does not apply;
9.30 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 
9.31 	Revenue Code must be applied by allowing a deduction for capital gain dividends and 
9.32 	exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 
9.33 	Revenue Code; and
10.1 	(3) the deduction for dividends paid must also be applied in the amount of any 
10.2 	undistributed capital gains which the regulated investment company elects to have treated 
10.3 	as provided in section 852(b)(3)(D) of the Internal Revenue Code.
10.4 	The net income of a real estate investment trust as defined and limited by section 
10.5 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
10.6 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
10.7 	The net income of a designated settlement fund as defined in section 468B(d) of 
10.8 	the Internal Revenue Code means the gross income as defined in section 468B(b) of the 
10.9 	Internal Revenue Code.
10.10 	The Internal Revenue Code of 1986, as amended through March 18, 2010 April 14,
10.11 	2011, shall be in effect for taxable years beginning after December 31, 1996, except 
10.12 	that for taxable years beginning after December 31, 2009, and before January 1, 2011, 
10.13 	"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through 
10.14 	December 31, 2010. The provisions of the act of January 22, 2010, Public Law 111-126, 
10.15 	to accelerate the benefits for charitable cash contributions for the relief of victims of the 
10.16 	Haitian earthquake, are effective at the same time it became effective for federal purposes 
10.17 	and apply to the subtraction under subdivision 19b, clause (6). The provisions of title II, 
10.18 	section 2112, of the act of September 27, 2010, Public Law 111-240, rollovers from 
10.19 	elective deferral plans to designated Roth accounts, are effective at the same time they 
10.20 	became effective for federal purposes and taxable rollovers are included in net income at 
10.21 	the same time they are included in gross income for federal purposes.
10.22 	Except as otherwise provided, references to the Internal Revenue Code in 
10.23 	subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 
10.24 	the applicable year.

10.25 	EFFECTIVE DATE. This section is effective the day following final enactment, 
10.26 	except that the changes incorporated by federal changes are effective at the same time as 
10.27 	the changes were effective for federal purposes.

10.28 	Sec. 3. Minnesota Statutes 2010, section 290.01, subdivision 19a, as amended by 
10.29 	Laws 2011, chapter 8, section 3, and Laws 2011, chapter 112, article 6, section 1, is 
10.30 	amended to read:
10.31 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
10.32 	trusts, there shall be added to federal taxable income:
10.33 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
10.34 	or governmental subdivision, municipality, or governmental agency or instrumentality 
11.1 	of any state other than Minnesota exempt from federal income taxes under the Internal 
11.2 	Revenue Code or any other federal statute; and
11.3 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
11.4 	Code, except:
11.5 	(A) the portion of the exempt-interest dividends exempt from state taxation under 
11.6 	the laws of the United States; and
11.7 	(B) the portion of the exempt-interest dividends derived from interest income 
11.8 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
11.9 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
11.10 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
11.11 	95 percent or more of the exempt-interest dividends, including any dividends exempt 
11.12 	under subitem (A), that are paid by the regulated investment company as defined in section 
11.13 	851(a) of the Internal Revenue Code, or the fund of the regulated investment company as 
11.14 	defined in section 851(g) of the Internal Revenue Code, making the payment; and
11.15 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
11.16 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
11.17 	interest income on obligations of the state in which the tribe is located;
11.18 	(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or 
11.19 	accrued within the taxable year under this chapter and the amount of taxes based on net 
11.20 	income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state 
11.21 	or to any province or territory of Canada, to the extent allowed as a deduction under 
11.22 	section 63(d) of the Internal Revenue Code, but the addition may not be more than the 
11.23 	amount by which the itemized deductions as allowed under section 63(d) of the Internal 
11.24 	Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of 
11.25 	the Internal Revenue Code, disregarding the amounts allowed under sections 63(c)(1)(C) 
11.26 	and 63(c)(1)(E) of the Internal Revenue Code, minus any addition that would have been 
11.27 	required under clause (21) if the taxpayer had claimed the standard deduction. For the 
11.28 	purpose of this paragraph, the disallowance of itemized deductions under section 68 of 
11.29 	the Internal Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise 
11.30 	taxes are the last itemized deductions disallowed;
11.31 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
11.32 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
11.33 	(4) the amount of income taxes paid or accrued within the taxable year under this 
11.34 	chapter and taxes based on net income paid to any other state or any province or territory 
11.35 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
12.1 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
12.2 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
12.3 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
12.4 	other than expenses or interest used in computing net interest income for the subtraction 
12.5 	allowed under subdivision 19b, clause (1);
12.6 	(6) the amount of a partner's pro rata share of net income which does not flow 
12.7 	through to the partner because the partnership elected to pay the tax on the income under 
12.8 	section 6242(a)(2) of the Internal Revenue Code;
12.9 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
12.10 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
12.11 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
12.12 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
12.13 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
12.14 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
12.15 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
12.16 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
12.17 	under section 168(k) is allowed;
12.18 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
12.19 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
12.20 	Revenue Code of 1986, as amended through December 31, 2003;
12.21 	(9) to the extent deducted in computing federal taxable income, the amount of the 
12.22 	deduction allowable under section 199 of the Internal Revenue Code;
12.23 	(10) for taxable years beginning before January 1, 2013, the exclusion allowed 
12.24 	under section 139A of the Internal Revenue Code for federal subsidies for prescription 
12.25 	drug plans;
12.26 	(11) the amount of expenses disallowed under section 290.10, subdivision 2;
12.27 	(12) for taxable years beginning before January 1, 2010, and after December 31, 
12.28 	2010, the amount deducted for qualified tuition and related expenses under section 222 of 
12.29 	the Internal Revenue Code, to the extent deducted from gross income;
12.30 	(13) for taxable years beginning before January 1, 2010, and after December 31, 
12.31 	2010, the amount deducted for certain expenses of elementary and secondary school 
12.32 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
12.33 	from gross income;
12.34 	(14) the additional standard deduction for property taxes payable that is allowable 
12.35 	under section 63(c)(1)(C) of the Internal Revenue Code;
13.1 	(15) the additional standard deduction for qualified motor vehicle sales taxes 
13.2 	allowable under section 63(c)(1)(E) of the Internal Revenue Code;
13.3 	(16) discharge of indebtedness income resulting from reacquisition of business 
13.4 	indebtedness and deferred under section 108(i) of the Internal Revenue Code; and
13.5 	(17) the amount of unemployment compensation exempt from tax under section 
13.6 	85(c) of the Internal Revenue Code; and
13.7 	(18) changes to federal taxable income attributable to a net operating loss that the 
13.8 	taxpayer elected to carry back for more than two years for federal purposes but for which 
13.9 	the losses can be carried back for only two years under section 290.095, subdivision 
13.10 	11, paragraph (c).;
13.11 	(19) to the extent included in the computation of federal taxable income in taxable 
13.12 	years beginning after December 31, 2010, the amount of disallowed itemized deductions, 
13.13 	but the amount of disallowed itemized deductions plus the addition required under clause 
13.14 	(2) may not be more than the amount by which the itemized deductions as allowed under 
13.15 	section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction 
13.16 	as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts 
13.17 	allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, and 
13.18 	reduced by any addition that would have been required under clause (21) if the taxpayer 
13.19 	had claimed the standard deduction;
13.20 	(i) The amount of disallowed itemized deductions is equal to the lesser of:
13.21 	(A) three percent of the excess of the taxpayer's federal adjusted gross income 
13.22 	over the applicable amount; or 
13.23 	(B) 80 percent of the amount of the itemized deductions otherwise allowable to the 
13.24 	taxpayer under the Internal Revenue Code for the taxable year.
13.25 	(ii) The term "applicable amount" means $100,000, or $50,000 in the case of a 
13.26 	married individual filing a separate return. Each dollar amount shall be increased by 
13.27 	an amount equal to:
13.28 	(A) such dollar amount, multiplied by 
13.29 	(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal 
13.30 	Revenue Code for the calendar year in which the taxable year begins, by substituting 
13.31 	"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof.
13.32 	(iii) The term "itemized deductions" does not include:
13.33 	(A) the deduction for medical expenses under section 213 of the Internal Revenue 
13.34 	Code;
13.35 	(B) any deduction for investment interest as defined in section 163(d) of the Internal 
13.36 	Revenue Code; and
14.1 	(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or 
14.2 	theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue 
14.3 	Code or for losses described in section 165(d) of the Internal Revenue Code;
14.4 	(20) to the extent included in federal taxable income in taxable years beginning after 
14.5 	December 31, 2010, the amount of disallowed personal exemptions for taxpayers with 
14.6 	federal adjusted gross income over the threshold amount;
14.7 	(i) The disallowed personal exemption amount is equal to the dollar amount of the 
14.8 	personal exemptions claimed by the taxpayer in the computation of federal taxable income 
14.9 	multiplied by the applicable percentage.
14.10 	(ii) "Applicable percentage" means two percentage points for each $2,500 (or 
14.11 	fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable 
14.12 	year exceeds the threshold amount. In the case of a married individual filing a separate 
14.13 	return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In no 
14.14 	event shall the applicable percentage exceed 100 percent.
14.15 	(iii) The term "threshold amount" means:
14.16 	(A) $150,000 in the case of a joint return or a surviving spouse;
14.17 	(B) $125,000 in the case of a head of a household;
14.18 	(C) $100,000 in the case of an individual who is not married and who is not a 
14.19 	surviving spouse or head of a household; and
14.20 	(D) $75,000 in the case of a married individual filing a separate return.
14.21 	(iv) The thresholds shall be increased by an amount equal to:
14.22 	(A) such dollar amount, multiplied by
14.23 	(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal 
14.24 	Revenue Code for the calendar year in which the taxable year begins, by substituting 
14.25 	"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and
14.26 	(21) to the extent deducted in the computation of federal taxable income, for taxable 
14.27 	years beginning after December 31, 2010, and before January 1, 2013, the difference 
14.28 	between the standard deduction allowed under section 63(c) of the Internal Revenue Code 
14.29 	and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code 
14.30 	as amended through December 1, 2010.

14.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
14.32 	December 31, 2010, except that the change to clause (10) is effective the day following 
14.33 	final enactment.

14.34 	Sec. 4. Minnesota Statutes 2010, section 290.01, subdivision 19c, as amended by Laws 
14.35 	2011, chapter 8, section 4, is amended to read:
15.1 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
15.2 	there shall be added to federal taxable income:
15.3 	(1) the amount of any deduction taken for federal income tax purposes for income, 
15.4 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
15.5 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
15.6 	another state, a political subdivision of another state, the District of Columbia, or any 
15.7 	foreign country or possession of the United States;
15.8 	(2) interest not subject to federal tax upon obligations of: the United States, its 
15.9 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
15.10 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
15.11 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
15.12 	tribal governments;
15.13 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
15.14 	Revenue Code;
15.15 	(4) the amount of any net operating loss deduction taken for federal income tax 
15.16 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
15.17 	deduction under section 810 of the Internal Revenue Code;
15.18 	(5) the amount of any special deductions taken for federal income tax purposes 
15.19 	under sections 241 to 247 and 965 of the Internal Revenue Code;
15.20 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
15.21 	clause (a), that are not subject to Minnesota income tax;
15.22 	(7) the amount of any capital losses deducted for federal income tax purposes under 
15.23 	sections 1211 and 1212 of the Internal Revenue Code;
15.24 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
15.25 	921(a) and 291 of the Internal Revenue Code;
15.26 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
15.27 	291 of the Internal Revenue Code;
15.28 	(10) for certified pollution control facilities placed in service in a taxable year 
15.29 	beginning before December 31, 1986, and for which amortization deductions were elected 
15.30 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
15.31 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
15.32 	income for those facilities;
15.33 	(11) the amount of any deemed dividend from a foreign operating corporation 
15.34 	determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 
15.35 	shall be reduced by the amount of the addition to income required by clauses (20), (21), 
15.36 	(22), and (23);
16.1 	(12) the amount of a partner's pro rata share of net income which does not flow 
16.2 	through to the partner because the partnership elected to pay the tax on the income under 
16.3 	section 6242(a)(2) of the Internal Revenue Code;
16.4 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
16.5 	Code;
16.6 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
16.7 	Revenue Code, for the taxable year when subpart F income is calculated without regard to 
16.8 	the provisions of Division C, title III, section 303(b) of Public Law 110-343;
16.9 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
16.10 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
16.11 	has an activity that in the taxable year generates a deduction for depreciation under 
16.12 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
16.13 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
16.14 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
16.15 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
16.16 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
16.17 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
16.18 	under section 168(k)(1)(A) and (k)(4)(A) is allowed;
16.19 	(16) 80 percent of the amount by which the deduction allowed by section 179 of the 
16.20 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
16.21 	Revenue Code of 1986, as amended through December 31, 2003;
16.22 	(17) to the extent deducted in computing federal taxable income, the amount of the 
16.23 	deduction allowable under section 199 of the Internal Revenue Code;
16.24 	(18) for taxable years beginning before January 1, 2013, the exclusion allowed 
16.25 	under section 139A of the Internal Revenue Code for federal subsidies for prescription 
16.26 	drug plans;
16.27 	(19) the amount of expenses disallowed under section 290.10, subdivision 2;
16.28 	(20) an amount equal to the interest and intangible expenses, losses, and costs paid, 
16.29 	accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 
16.30 	of a corporation that is a member of the taxpayer's unitary business group that qualifies 
16.31 	as a foreign operating corporation. For purposes of this clause, intangible expenses and 
16.32 	costs include:
16.33 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
16.34 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
16.35 	intangible property;
17.1 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
17.2 	transactions;
17.3 	(iii) royalty, patent, technical, and copyright fees;
17.4 	(iv) licensing fees; and
17.5 	(v) other similar expenses and costs.
17.6 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
17.7 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
17.8 	secrets, and similar types of intangible assets.
17.9 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
17.10 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
17.11 	to such item of income to the extent that the income to the foreign operating corporation 
17.12 	is income from sources without the United States as defined in subtitle A, chapter 1, 
17.13 	subchapter N, part 1, of the Internal Revenue Code;
17.14 	(21) except as already included in the taxpayer's taxable income pursuant to clause 
17.15 	(20), any interest income and income generated from intangible property received or 
17.16 	accrued by a foreign operating corporation that is a member of the taxpayer's unitary 
17.17 	group. For purposes of this clause, income generated from intangible property includes:
17.18 	(i) income related to the direct or indirect acquisition, use, maintenance or 
17.19 	management, ownership, sale, exchange, or any other disposition of intangible property;
17.20 	(ii) income from factoring transactions or discounting transactions;
17.21 	(iii) royalty, patent, technical, and copyright fees;
17.22 	(iv) licensing fees; and
17.23 	(v) other similar income.
17.24 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
17.25 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
17.26 	secrets, and similar types of intangible assets.
17.27 	This clause does not apply to any item of interest or intangible income received or accrued 
17.28 	by a foreign operating corporation with respect to such item of income to the extent that 
17.29 	the income is income from sources without the United States as defined in subtitle A, 
17.30 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
17.31 	(22) the dividends attributable to the income of a foreign operating corporation that 
17.32 	is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
17.33 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
17.34 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
17.35 	foreign operating corporation;
18.1 	(23) the income of a foreign operating corporation that is a member of the taxpayer's 
18.2 	unitary group in an amount that is equal to gains derived from the sale of real or personal 
18.3 	property located in the United States;
18.4 	(24) for taxable years beginning before January 1, 2010, and after December 31, 
18.5 	2010, the additional amount allowed as a deduction for donation of computer technology 
18.6 	and equipment under section 170(e)(6) of the Internal Revenue Code, to the extent 
18.7 	deducted from taxable income; and
18.8 	(25) discharge of indebtedness income resulting from reacquisition of business 
18.9 	indebtedness and deferred under section 108(i) of the Internal Revenue Code.

18.10 	EFFECTIVE DATE. The change to clause (24) is effective for taxable years 
18.11 	beginning after December 31, 2010. The change to clause (18) is effective the day 
18.12 	following final enactment.

18.13 	Sec. 5. Minnesota Statutes 2010, section 290.01, subdivision 31, as amended by Laws 
18.14 	2011, chapter 8, section 5, is amended to read:
18.15 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, for 
18.16 	taxable years beginning before January 1, 2010, and after December 31, 2010, "Internal 
18.17 	Revenue Code" means the Internal Revenue Code of 1986, as amended through March 18, 
18.18 	2010; and for taxable years beginning after December 31, 2009, and before January 1, 
18.19 	2011, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended 
18.20 	through December 31, 2010 April 14, 2011. Internal Revenue Code also includes any 
18.21 	uncodified provision in federal law that relates to provisions of the Internal Revenue 
18.22 	Code that are incorporated into Minnesota law. When used in this chapter, the reference 
18.23 	to "subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code" is to the 
18.24 	Internal Revenue Code as amended through March 18, 2010.

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

18.28 	Sec. 6. Minnesota Statutes 2010, section 290.0671, subdivision 1, is amended to read:
18.29 		Subdivision 1.Credit allowed. (a) An individual is allowed a credit against the tax 
18.30 	imposed by this chapter equal to a percentage of earned income. To receive a credit, a 
18.31 	taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
18.32 	(b) For individuals with no qualifying children, the credit equals 1.9125 percent of 
18.33 	the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned 
19.1 	income or adjusted gross income, whichever is greater, in excess of $5,770, but in no 
19.2 	case is the credit less than zero.
19.3 	(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first 
19.4 	$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than 
19.5 	$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income, 
19.6 	whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
19.7 	(d) For individuals with two or more qualifying children, the credit equals ten 
19.8 	percent of the first $9,720 of earned income and 20 percent of earned income over 
19.9 	$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income 
19.10 	or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is 
19.11 	the credit less than zero.
19.12 	(e) For a nonresident or part-year resident, the credit must be allocated based on the 
19.13 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).
19.14 	(f) For a person who was a resident for the entire tax year and has earned income 
19.15 	not subject to tax under this chapter, including income excluded under section 290.01, 
19.16 	subdivision 19b, clause (9) or (15), the credit must be allocated based on the ratio of 
19.17 	federal adjusted gross income reduced by the earned income not subject to tax under 
19.18 	this chapter over federal adjusted gross income. For purposes of this paragraph, the 
19.19 	subtractions for military pay under section 290.01, subdivision 19b, clauses (10) and (11), 
19.20 	are not considered "earned income not subject to tax under this chapter."
19.21 	For the purposes of this paragraph, the exclusion of combat pay under section 112 
19.22 	of the Internal Revenue Code is not considered "earned income not subject to tax under 
19.23 	this chapter."
19.24 	(g) For tax years beginning after December 31, 2007, and before December 31, 
19.25 	2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in 
19.26 	paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by 
19.27 	$3,000 for married taxpayers filing joint returns. For tax years beginning after December 
19.28 	31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined 
19.29 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
19.30 	section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009, 
19.31 	the commissioner shall then determine the percent change from the 12 months ending on 
19.32 	August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent 
19.33 	year, from the 12 months ending on August 31, 2007, to the 12 months ending on August 
19.34 	31 of the year preceding the taxable year. The earned income thresholds as adjusted 
19.35 	for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount 
20.1 	is rounded up to the nearest $10. The determination of the commissioner under this 
20.2 	subdivision is not a rule under the Administrative Procedure Act.
20.3 	(h) For tax years beginning after December 31, 2010, and before January 1, 2012, 
20.4 	the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph 
20.5 	(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000 
20.6 	for married taxpayers filing joint returns. For tax years beginning after December 31, 
20.7 	2010, and before January 1, 2012, the commissioner shall annually adjust the $5,000 
20.8 	by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
20.9 	Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for 
20.10 	the word "1992." For 2011, the commissioner shall then determine the percent change 
20.11 	from the 12 months ending on August 31, 2008, to the 12 months ending on August 
20.12 	31, 2010. The earned income thresholds as adjusted for inflation must be rounded to 
20.13 	the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10. 
20.14 	The determination of the commissioner under this subdivision is not a rule under the 
20.15 	Administrative Procedure Act.
20.16 	(h) (i) The commissioner shall construct tables showing the amount of the credit 
20.17 	at various income levels and make them available to taxpayers. The tables shall follow 
20.18 	the schedule contained in this subdivision, except that the commissioner may graduate 
20.19 	the transition between income brackets.

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

20.22 	Sec. 7. Minnesota Statutes 2010, section 290.0675, subdivision 1, is amended to read:
20.23 		Subdivision 1.Definitions. (a) For purposes of this section the following terms 
20.24 	have the meanings given.
20.25 	(b) "Earned income" means the sum of the following, to the extent included in 
20.26 	Minnesota taxable income:
20.27 	(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;
20.28 	(2) income received from a retirement pension, profit-sharing, stock bonus, or 
20.29 	annuity plan; and
20.30 	(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue 
20.31 	Code.
20.32 	(c) "Taxable income" means net income as defined in section 290.01, subdivision 19.
20.33 	(d) "Earned income of lesser-earning spouse" means the earned income of the 
20.34 	spouse with the lesser amount of earned income as defined in paragraph (b) for the taxable 
20.35 	year minus the sum of (i) the amount for one exemption under section 151(d) of the 
21.1 	Internal Revenue Code and (ii) one-half the amount of the standard deduction under 
21.2 	section 63(c)(2)(A) and (4) of the Internal Revenue Code minus one-half of any addition 
21.3 	required under section 290.01, subdivision 19a, clause (21), and one-half of the addition 
21.4 	that would have been required under section 290.01, subdivision 19a, clause (21), if the 
21.5 	taxpayer had claimed the standard deduction.

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

21.8 	Sec. 8. Minnesota Statutes 2010, section 290A.03, subdivision 15, as amended by 
21.9 	Laws 2011, chapter 8, section 6, is amended to read:
21.10 		Subd. 15.Internal Revenue Code. For taxable years beginning before January 1, 
21.11 	2010, and after December 31, 2010, "Internal Revenue Code" means the Internal Revenue 
21.12 	Code of 1986, as amended through March 18, 2010; and for taxable years beginning after 
21.13 	December 31, 2009, and before January 1, 2011, "Internal Revenue Code" means the 
21.14 	Internal Revenue Code of 1986, as amended through December 31, 2010 April 14, 2011.

21.15 	EFFECTIVE DATE. This section is effective for property tax refunds based on 
21.16 	property taxes payable on or after December 31, 2011, and rent paid on or after December 
21.17 	31, 2010.

21.18 	Sec. 9. Minnesota Statutes 2010, section 291.005, subdivision 1, is amended to read:
21.19 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following 
21.20 	terms used in this chapter shall have the following meanings:
21.21 	(1) "Commissioner" means the commissioner of revenue or any person to whom the 
21.22 	commissioner has delegated functions under this chapter.
21.23 	(2) "Federal gross estate" means the gross estate of a decedent as required to be 
21.24 	valued and otherwise determined for federal estate tax purposes under the Internal 
21.25 	Revenue Code.
21.26 	(3) "Internal Revenue Code" means the United States Internal Revenue Code of 
21.27 	1986, as amended through March 18, 2010 April 14, 2011, but without regard to the 
21.28 	provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law 
21.29 	111-312, and section 301(c) of Public Law 111-312.
21.30 	(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
21.31 	defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of 
21.32 	deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.
22.1 	(5) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
22.2 	excluding therefrom any property included therein which has its situs outside Minnesota, 
22.3 	and (b) including therein any property omitted from the federal gross estate which is 
22.4 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
22.5 	authorities.
22.6 	(6) "Nonresident decedent" means an individual whose domicile at the time of 
22.7 	death was not in Minnesota.
22.8 	(7) "Personal representative" means the executor, administrator or other person 
22.9 	appointed by the court to administer and dispose of the property of the decedent. If there 
22.10 	is no executor, administrator or other person appointed, qualified, and acting within this 
22.11 	state, then any person in actual or constructive possession of any property having a situs in 
22.12 	this state which is included in the federal gross estate of the decedent shall be deemed 
22.13 	to be a personal representative to the extent of the property and the Minnesota estate tax 
22.14 	due with respect to the property.
22.15 	(8) "Resident decedent" means an individual whose domicile at the time of death 
22.16 	was in Minnesota.
22.17 	(9) "Situs of property" means, with respect to real property, the state or country in 
22.18 	which it is located; with respect to tangible personal property, the state or country in which 
22.19 	it was normally kept or located at the time of the decedent's death; and with respect to 
22.20 	intangible personal property, the state or country in which the decedent was domiciled 
22.21 	at death.

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

22.23 	ARTICLE 3
22.24 	SALES AND USE TAXES

22.25 	Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 3, as amended by 
22.26 	Laws 2011, chapter 112, article 8, section 1, is amended to read:
22.27 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
22.28 	to, each of the transactions listed in this subdivision.
22.29 	(b) Sale and purchase include:
22.30 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
22.31 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
22.32 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
22.33 	in money or by exchange or barter, tangible personal property, other than a manufactured 
22.34 	home used for residential purposes for a continuous period of 30 days or more.
23.1 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
23.2 	tangible personal property for a consideration for consumers who furnish either directly or 
23.3 	indirectly the materials used in the production, fabrication, printing, or processing.
23.4 	(d) Sale and purchase include the preparing for a consideration of food. 
23.5 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
23.6 	to, the following:
23.7 	(1) prepared food sold by the retailer;
23.8 	(2) soft drinks;
23.9 	(3) candy;
23.10 	(4) dietary supplements; and
23.11 	(5) all food sold through vending machines.
23.12 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
23.13 	gas, water, or steam for use or consumption within this state.
23.14 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
23.15 	computer software whether delivered electronically, by load and leave, or otherwise.
23.16 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
23.17 	services:
23.18 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
23.19 	events, and the making available of amusement devices, tanning facilities, reducing 
23.20 	salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
23.21 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
23.22 	motel, or trailer camp, including furnishing the guest of the facility with access to 
23.23 	telecommunication services, and the granting of any similar license to use real property in 
23.24 	a specific facility, other than the renting or leasing of it for a continuous period of 30 days 
23.25 	or more under an enforceable written agreement that may not be terminated without prior 
23.26 	notice and including accommodations intermediary services provided in connection with 
23.27 	other services provided under this clause;
23.28 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
23.29 	periodic basis, except for parking at a meter;
23.30 	(4) the granting of membership in a club, association, or other organization if:
23.31 	(i) the club, association, or other organization makes available for the use of its 
23.32 	members sports and athletic facilities, without regard to whether a separate charge is 
23.33 	assessed for use of the facilities; and
23.34 	(ii) use of the sports and athletic facility is not made available to the general public 
23.35 	on the same basis as it is made available to members.
24.1 	Granting of membership means both onetime initiation fees and periodic membership 
24.2 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
24.3 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
24.4 	swimming pools; and other similar athletic or sports facilities;
24.5 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
24.6 	material used in road construction; and delivery of concrete block by a third party if 
24.7 	the delivery would be subject to the sales tax if provided by the seller of the concrete 
24.8 	block; and
24.9 	(6) services as provided in this clause:
24.10 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
24.11 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
24.12 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
24.13 	include services provided by coin operated facilities operated by the customer;
24.14 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
24.15 	provided by coin operated facilities operated by the customer, and rustproofing, 
24.16 	undercoating, and towing of motor vehicles;
24.17 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
24.18 	pest control and exterminating services;
24.19 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
24.20 	including services performed within the jurisdiction they serve by off-duty licensed peace 
24.21 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
24.22 	organization for monitoring and electronic surveillance of persons placed on in-home 
24.23 	detention pursuant to court order or under the direction of the Minnesota Department 
24.24 	of Corrections;
24.25 	(v) pet grooming services;
24.26 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
24.27 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
24.28 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
24.29 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
24.30 	public utility lines. Services performed under a construction contract for the installation of 
24.31 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
24.32 	(vii) massages, except when provided by a licensed health care facility or 
24.33 	professional or upon written referral from a licensed health care facility or professional for 
24.34 	treatment of illness, injury, or disease; and
24.35 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
24.36 	other similar arrangements, but excluding veterinary and horse boarding services.
25.1 	In applying the provisions of this chapter, the terms "tangible personal property" 
25.2 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
25.3 	and the provision of these taxable services, unless specifically provided otherwise. 
25.4 	Services performed by an employee for an employer are not taxable. Services performed 
25.5 	by a partnership or association for another partnership or association are not taxable if 
25.6 	one of the entities owns or controls more than 80 percent of the voting power of the 
25.7 	equity interest in the other entity. Services performed between members of an affiliated 
25.8 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
25.9 	group of corporations" means those entities that would be classified as members of an 
25.10 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
25.11 	the exclusions in section 1504(b).
25.12 	For purposes of clause (5), "road construction" means construction of (1) public 
25.13 	roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 
25.14 	metropolitan area up to the point of the emergency response location sign.
25.15 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
25.16 	personal property or taxable services by the United States or any of its agencies or 
25.17 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
25.18 	subdivisions.
25.19 	(i) A sale and a purchase includes the furnishing for a consideration of 
25.20 	telecommunications services, ancillary services associated with telecommunication 
25.21 	services, cable television services, and direct satellite services, and ring tones. 
25.22 	Telecommunication services include, but are not limited to, the following services, 
25.23 	as defined in section 297A.669: air-to-ground radiotelephone service, mobile 
25.24 	telecommunication service, postpaid calling service, prepaid calling service, prepaid 
25.25 	wireless calling service, and private communication services. The services in this 
25.26 	paragraph are taxed to the extent allowed under federal law.
25.27 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
25.28 	the installation charges would be subject to the sales tax if the installation were provided 
25.29 	by the seller of the item being installed.
25.30 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
25.31 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
25.32 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
25.33 	59B.02, subdivision 11.

25.34 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
25.35 	September 30, 2011, except the change in paragraph (g), clause (2), is effective the day 
25.36 	following final enactment.

26.1 	Sec. 2. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision 
26.2 	to read:
26.3 		Subd. 47.Accommodations intermediary. "Accommodations intermediary" 
26.4 	means any person or entity, other than an accommodations provider, that facilitates the sale 
26.5 	of lodging as defined in subdivision 3, paragraph (g), clause (2), and that charges a room 
26.6 	charge to a customer. The term "facilitates the sale" includes brokering, coordinating, or in 
26.7 	any way arranging for the purchase of or the right to use accommodations by a customer.

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

26.9 	Sec. 3. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision 
26.10 	to read:
26.11 		Subd. 48.Accommodations provider. "Accommodations provider" means any 
26.12 	person or entity that furnishes lodging as defined in subdivision 3, paragraph (g), clause 
26.13 	(2), to the general public for compensation. The term "furnishes" includes the sale of use 
26.14 	or possession, or the sale of the right to use or possess.

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

26.16 	Sec. 4. Minnesota Statutes 2010, section 297A.66, is amended by adding a subdivision 
26.17 	to read:
26.18 		Subd. 6.Lodging services. An accommodations intermediary shall collect sales 
26.19 	tax and remit it to the commissioner under section 297A.77 for services provided in 
26.20 	connection with or for lodging located in this state.

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

26.22 	Sec. 5. Minnesota Statutes 2010, section 297A.668, is amended by adding a 
26.23 	subdivision to read:
26.24 		Subd. 9.Florist sales. (a) Notwithstanding other subdivisions of this section, the 
26.25 	retail sale of "florist sales" is sourced as follows:
26.26 	(1) When a Minnesota retailer takes a florist sales order directly from a customer, 
26.27 	whether or not the customer is physically present in Minnesota when placing the order, 
26.28 	and delivers the items to the customer or a third person, either within this state or outside 
26.29 	this state, and regardless of the delivery method, the florist sale is sourced according to 
26.30 	subdivision 2.
26.31 	(2) When one retailer transmits a florist sales order to another retailer of florist sales 
26.32 	through a floral network service or floral delivery association, whether by telephone, 
27.1 	telegraph, Internet, or other means of communication, the florist sale is sourced to the 
27.2 	location of the retailer which originally takes the order from the customer and accepts 
27.3 	payment.
27.4 	(b) For purposes of this subdivision, florist sales means sales at retail of flowers, 
27.5 	wreaths, floral bouquets, potted plants, hospital baskets, funeral designs, seeds, nursery 
27.6 	seedling stock, trees, shrubs, plants, sod, soil, bulbs, sand, rock, and all other floral 
27.7 	or nursery products.

27.8 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
27.9 	September 30, 2011.

27.10 	Sec. 6. Minnesota Statutes 2010, section 297A.68, subdivision 4, is amended to read:
27.11 		Subd. 4.Taconite, other ores, metals, or minerals; production materials. Mill 
27.12 	liners, grinding rods, and grinding balls that are substantially consumed in the production 
27.13 	of taconite or other ores, metals, or minerals are exempt when sold to or stored, used, or 
27.14 	consumed by persons taxed under the in-lieu or net proceeds provisions of chapter 298.

27.15 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
27.16 	September 30, 2011. 

27.17 	Sec. 7. Minnesota Statutes 2010, section 297A.68, is amended by adding a subdivision 
27.18 	to read:
27.19 		Subd. 42.Qualified data centers. (a) Purchases of enterprise information 
27.20 	technology equipment and computer software for use in a qualified data center are exempt. 
27.21 	The tax on purchases exempt under this paragraph must be imposed and collected as if 
27.22 	the rate under section 297A.62, subdivision 1, applied, and then refunded after June 30, 
27.23 	2013, in the manner provided in section 297A.75.  This exemption includes enterprise 
27.24 	information technology equipment and computer software purchased to replace or upgrade 
27.25 	enterprise information technology equipment and computer software in a qualified data 
27.26 	center.
27.27 	(b) Electricity used or consumed in the operation of a qualified data center is exempt.
27.28 	(c) For purposes of this subdivision, "qualified data center" means a facility in 
27.29 	Minnesota:
27.30 	(1) that is comprised of one or more buildings that consist in the aggregate of 
27.31 	at least 30,000 square feet, and that are located on a single parcel or on contiguous 
27.32 	parcels, where the total cost of construction or refurbishment, investment in enterprise 
28.1 	information technology equipment, and computer software is at least $50,000,000 within 
28.2 	a 24-month period;
28.3 	(2) that is constructed or substantially refurbished after June 30, 2012, where 
28.4 	"substantially refurbished" means that at least 30,000 square feet has been rebuilt or 
28.5 	modified; and
28.6 	(3) that is used to house enterprise information technology equipment, where the 
28.7 	facility has the following characteristics:
28.8 	(i) uninterruptible power supplies, generator backup power, or both;
28.9 	(ii) sophisticated fire suppression and prevention systems; and
28.10 	(iii) enhanced security. A facility will be considered to have enhanced security if it 
28.11 	has restricted access to the facility to selected personnel; permanent security guards; video 
28.12 	camera surveillance; an electronic system requiring pass codes, keycards, or biometric 
28.13 	scans, such as hand scans and retinal or fingerprint recognition; or similar security features.
28.14 	In determining whether the facility has the required square footage, the square 
28.15 	footage of the following spaces shall be included if the spaces support the operation of 
28.16 	enterprise information technology equipment: office space, meeting space, and mechanical 
28.17 	and other support facilities.
28.18 	(d) For purposes of this subdivision, "enterprise information technology equipment" 
28.19 	means computers and equipment supporting computing, networking, or data storage, 
28.20 	including servers and routers. It includes, but is not limited to: cooling systems, 
28.21 	cooling towers, and other temperature control infrastructure; power infrastructure for 
28.22 	transformation, distribution, or management of electricity used for the maintenance 
28.23 	and operation of a qualified data center, including but not limited to exterior dedicated 
28.24 	business-owned substations, backup power generation systems, battery systems, and 
28.25 	related infrastructure; and racking systems, cabling, and trays, which are necessary for 
28.26 	the maintenance and operation of the qualified data center.
28.27 	(e) A qualified data center may claim the exemptions in this subdivision for 
28.28 	purchases made either within 20 years of the date of its first purchase qualifying for the 
28.29 	exemption under paragraph (a), or by June 30, 2042, whichever is earlier.
28.30 	(f) The purpose of this exemption is to create jobs in the construction and data 
28.31 	center industries.
28.32 	(g) This subdivision is effective for sales and purchases made after June 30, 2012, 
28.33 	and before July 1, 2042.

28.34 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
28.35 	June 30, 2012, and before July 1, 2042.

29.1 	Sec. 8. Minnesota Statutes 2010, section 297A.68, is amended by adding a subdivision 
29.2 	to read:
29.3 		Subd. 43.Resold admission tickets. (a) When a ticket reseller who purchased 
29.4 	a ticket from a seller who is in the business of selling tickets resells the ticket, the 
29.5 	ticket reseller must charge tax on the total amount for which the ticket is resold and the 
29.6 	following rules apply:
29.7 	(1) if the ticket reseller did not use a fully completed exemption certificate to claim 
29.8 	the exemption from tax for resale, but instead paid tax on the original purchase, then the 
29.9 	ticket reseller may do one of the following:
29.10 	(i) seek a refund of that tax under section 289A.50; or
29.11 	(ii) pass through to the purchaser the amount of the tax the ticket reseller paid on 
29.12 	the original purchase, by giving the purchaser credit for the Minnesota state and local tax 
29.13 	paid by the ticket reseller on the ticket reseller's original purchase of the ticket. Credit 
29.14 	for the tax cannot exceed either the sales tax paid on the original price of the ticket or the 
29.15 	sales tax charged by the ticket reseller to the final purchaser;
29.16 	(2) if the ticket reseller did not pay tax on the original purchase, tax is due on the full 
29.17 	amount of the ticket when resold, without a credit given to the final purchaser; and
29.18 	(3) the ticket reseller must retain records documenting the price and tax paid by the 
29.19 	ticket reseller when purchasing the ticket and the price and tax collected when the ticket 
29.20 	reseller resells the ticket.
29.21 	(b) When a ticket reseller who purchased a ticket from a seller who is not in the 
29.22 	business of selling tickets resells the ticket, the ticket reseller must charge tax on the total 
29.23 	amount for which the ticket is resold and the following rules apply:
29.24 	(1) the ticket reseller may credit its purchaser an amount equal to the tax the ticket 
29.25 	reseller would have paid its seller, had the seller been registered to collect tax on its 
29.26 	sale of the ticket to the ticket reseller. Credit for the tax cannot exceed either the sales 
29.27 	tax paid on the original price of the ticket or the sales tax charged by the ticket reseller 
29.28 	to the final purchaser. It is presumed that the original purchase price of the ticket is the 
29.29 	face amount of the ticket;
29.30 	(2) if no tax was paid on the original purchase, tax is due on the full amount of the 
29.31 	ticket when resold, without a credit given to the ticket reseller's purchaser; and
29.32 	(3) the ticket reseller must retain records documenting the price and tax paid by the 
29.33 	ticket reseller when purchasing the ticket and the price and tax collected when the ticket 
29.34 	reseller resells the ticket.
29.35 	(c) For purposes of this subdivision, "ticket reseller" means a person who:
30.1 	(1) purchases admission tickets to a sporting event, theater, musical performance, or 
30.2 	place of public entertainment or amusement of any kind;
30.3 	(2) resells admission tickets to events under clause (1); and
30.4 	(3) is registered to collect tax under this chapter.

30.5 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
30.6 	September 30, 2011.

30.7 	Sec. 9. Minnesota Statutes 2010, section 297A.70, subdivision 1, is amended to read:
30.8 		Subdivision 1.Scope. (a) To the extent provided in this section, the gross receipts 
30.9 	from sales of items to or by, and storage, distribution, use, or consumption of items by the 
30.10 	organizations or units of local government listed in this section are specifically exempted 
30.11 	from the taxes imposed by this chapter.
30.12 	(b) Notwithstanding any law to the contrary enacted before 1992, only sales to 
30.13 	governments and political subdivisions listed in this section are exempt from the taxes 
30.14 	imposed by this chapter.
30.15 	(c) "Sales" includes purchases under an installment contract or lease purchase 
30.16 	agreement under section 465.71.

30.17 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
30.18 	September 30, 2011.

30.19 	Sec. 10. Minnesota Statutes 2010, section 297A.70, subdivision 2, is amended to read:
30.20 		Subd. 2.Sales to government. (a) All sales, except those listed in paragraph (b), 
30.21 	to the following governments and political subdivisions, or to the listed agencies or 
30.22 	instrumentalities of governments and political subdivisions, are exempt:
30.23 	(1) the United States and its agencies and instrumentalities;
30.24 	(2) school districts, the University of Minnesota, state universities, community 
30.25 	colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts 
30.26 	Education, and an instrumentality of a political subdivision that is accredited as an 
30.27 	optional/special function school by the North Central Association of Colleges and Schools;
30.28 	(3) hospitals and nursing homes owned and operated by political subdivisions of 
30.29 	the state of tangible personal property and taxable services used at or by hospitals and 
30.30 	nursing homes;
30.31 	(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip 
30.32 	operations provided for in section 473.4051;
31.1 	(5) other states or political subdivisions of other states, if the sale would be exempt 
31.2 	from taxation if it occurred in that state; and
31.3 	(6) sales to public libraries, public library systems, multicounty, multitype library 
31.4 	systems as defined in section 134.001, county law libraries under chapter 134A, state 
31.5 	agency libraries, the state library under section 480.09, and the Legislative Reference 
31.6 	Library; and
31.7 	(7) towns.
31.8 	(b) This exemption does not apply to the sales of the following products and services:
31.9 	(1) building, construction, or reconstruction materials purchased by a contractor 
31.10 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
31.11 	guaranteed maximum price covering both labor and materials for use in the construction, 
31.12 	alteration, or repair of a building or facility;
31.13 	(2) construction materials purchased by tax exempt entities or their contractors to 
31.14 	be used in constructing buildings or facilities which will not be used principally by the 
31.15 	tax exempt entities;
31.16 	(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, 
31.17 	except for leases entered into by the United States or its agencies or instrumentalities; or
31.18 	(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), 
31.19 	clause (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in 
31.20 	section 297A.67, subdivision 2, except for lodging, prepared food, candy, soft drinks, 
31.21 	and alcoholic beverages purchased directly by the United States or its agencies or 
31.22 	instrumentalities; or 
31.23 	(5) goods or services purchased by a town as inputs to goods and services that are 
31.24 	generally provided by a private business and the purchases would be taxable if made by a 
31.25 	private business engaged in the same activity.
31.26 	(c) As used in this subdivision, "school districts" means public school entities and 
31.27 	districts of every kind and nature organized under the laws of the state of Minnesota, and 
31.28 	any instrumentality of a school district, as defined in section 471.59.
31.29 	(d) As used in this subdivision, "goods or services generally provided by a private 
31.30 	business" include, but are not limited to, goods or services provided by liquor stores, gas 
31.31 	and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes, 
31.32 	and laundromats. "Goods or services generally provided by a private business" do not 
31.33 	include housing services, sewer and water services, wastewater treatment, ambulance and 
31.34 	other public safety services, correctional services, chore or homemaking services provided 
31.35 	to elderly or disabled individuals, or road and street maintenance or lighting.

32.1 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
32.2 	September 30, 2011.

32.3 	Sec. 11. Minnesota Statutes 2010, section 297A.70, subdivision 3, is amended to read:
32.4 		Subd. 3.Sales of certain goods and services to government. (a) The following 
32.5 	sales to or use by the specified governments and political subdivisions of the state are 
32.6 	exempt:
32.7 	(1) repair and replacement parts for emergency rescue vehicles, fire trucks, and 
32.8 	fire apparatus to a political subdivision;
32.9 	(2) machinery and equipment, except for motor vehicles, used directly for mixed 
32.10 	municipal solid waste management services at a solid waste disposal facility as defined in 
32.11 	section 115A.03, subdivision 10;
32.12 	(3) chore and homemaking services to a political subdivision of the state to be 
32.13 	provided to elderly or disabled individuals;
32.14 	(4) telephone services to the Office of Enterprise Technology that are used to provide 
32.15 	telecommunications services through the enterprise technology revolving fund;
32.16 	(5) firefighter personal protective equipment as defined in paragraph (b), if purchased 
32.17 	or authorized by and for the use of an organized fire department, fire protection district, or 
32.18 	fire company regularly charged with the responsibility of providing fire protection to the 
32.19 	state or a political subdivision;
32.20 	(6) bullet-resistant body armor that provides the wearer with ballistic and trauma 
32.21 	protection, if purchased by a law enforcement agency of the state or a political subdivision 
32.22 	of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;
32.23 	(7) motor vehicles purchased or leased by political subdivisions of the state if the 
32.24 	vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b), 
32.25 	exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax 
32.26 	under section 297B.03, clause (12);
32.27 	(8) equipment designed to process, dewater, and recycle biosolids for wastewater 
32.28 	treatment facilities of political subdivisions, and materials incidental to installation of 
32.29 	that equipment;
32.30 	(9) sales to a town of gravel and of machinery, equipment, and accessories, except 
32.31 	motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of 
32.32 	motor vehicles exempt from tax under section 297B.03, clause (10);
32.33 	(10) (9) the removal of trees, bushes, or shrubs for the construction and maintenance 
32.34 	of roads, trails, or firebreaks when purchased by an agency of the state or a political 
32.35 	subdivision of the state; and
33.1 	(11) (10) purchases by the Metropolitan Council or the Department of Transportation 
33.2 	of vehicles and repair parts to equip operations provided for in section 174.90, including, 
33.3 	but not limited to, the Northstar Corridor Rail project.; and
33.4 	(11) purchases of water used directly in providing public safety services by an 
33.5 	organized fire department, fire protection district, or fire company regularly charged with 
33.6 	the responsibility of providing fire protection to the state or a political subdivision.
33.7 	(b) For purposes of this subdivision, "firefighters personal protective equipment" 
33.8 	means helmets, including face shields, chin straps, and neck liners; bunker coats and 
33.9 	pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; 
33.10 	protective coveralls; goggles; self-contained breathing apparatus; canister filter masks; 
33.11 	personal alert safety systems; spanner belts; optical or thermal imaging search devices; 
33.12 	and all safety equipment required by the Occupational Safety and Health Administration.
33.13 	(c) For purchases of items listed in paragraph (a), clause (11), the tax must be 
33.14 	imposed and collected as if the rate under section 297A.62, subdivision 1, applied and 
33.15 	then refunded in the manner provided in section 297A.75.

33.16 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
33.17 	September 30, 2011, except that the new clause (11) is effective retroactively for sales 
33.18 	and purchases made after June 30, 2007; however, no refunds may be made for amounts 
33.19 	already paid on water purchased between June 30, 2007, and January 30, 2010.

33.20 	Sec. 12. Minnesota Statutes 2010, section 297A.70, subdivision 6, is amended to read:
33.21 		Subd. 6.Ambulances. The lease of a motor vehicle for use as an ambulance by 
33.22 	an ambulance service licensed under section 144E.10 that is equipped and specifically 
33.23 	intended for emergency response or for providing ambulance services is exempt.

33.24 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
33.25 	September 30, 2011.

33.26 	Sec. 13. Minnesota Statutes 2010, section 297A.75, subdivision 1, is amended to read:
33.27 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the 
33.28 	following exempt items must be imposed and collected as if the sale were taxable and the 
33.29 	rate under section 297A.62, subdivision 1, applied. The exempt items include:
33.30 	(1) capital equipment exempt under section 297A.68, subdivision 5;
33.31 	(2) building materials for an agricultural processing facility exempt under section 
33.32 	297A.71, subdivision 13;
34.1 	(3) building materials for mineral production facilities exempt under section 
34.2 	297A.71, subdivision 14;
34.3 	(4) building materials for correctional facilities under section 297A.71, subdivision 
34.4 	3;
34.5 	(5) building materials used in a residence for disabled veterans exempt under section 
34.6 	297A.71, subdivision 11;
34.7 	(6) elevators and building materials exempt under section 297A.71, subdivision 12;
34.8 	(7) building materials for the Long Lake Conservation Center exempt under section 
34.9 	297A.71, subdivision 17;
34.10 	(8) materials and supplies for qualified low-income housing under section 297A.71, 
34.11 	subdivision 23;
34.12 	(9) materials, supplies, and equipment for municipal electric utility facilities under 
34.13 	section 297A.71, subdivision 35;
34.14 	(10) equipment and materials used for the generation, transmission, and distribution 
34.15 	of electrical energy and an aerial camera package exempt under section 297A.68, 
34.16 	subdivision 37;
34.17 	(11) tangible personal property and taxable services and construction materials, 
34.18 	supplies, and equipment exempt under section 297A.68, subdivision 41;
34.19 	(12) commuter rail vehicle and repair parts under section 297A.70, subdivision 
34.20 	3, clause (11);
34.21 	(13) materials, supplies, and equipment for construction or improvement of projects 
34.22 	and facilities under section 297A.71, subdivision 40;
34.23 	(14) materials, supplies, and equipment for construction or improvement of a meat 
34.24 	processing facility exempt under section 297A.71, subdivision 41; and
34.25 	(15) materials, supplies, and equipment for construction, improvement, or expansion 
34.26 	of an aerospace defense manufacturing facility exempt under section 297A.71, subdivision 
34.27 	42.; and
34.28 	(16) enterprise information technology equipment and computer software for use in 
34.29 	a qualified data center exempt under section 297A.68, subdivision 42.

34.30 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
34.31 	June 30, 2012. 

34.32 	Sec. 14. Minnesota Statutes 2010, section 297A.75, subdivision 2, is amended to read:
34.33 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
34.34 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 
34.35 	must be paid to the applicant. Only the following persons may apply for the refund:
35.1 	(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
35.2 	(2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental 
35.3 	subdivision;
35.4 	(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits 
35.5 	provided in United States Code, title 38, chapter 21;
35.6 	(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead 
35.7 	property;
35.8 	(5) for subdivision 1, clause (8), the owner of the qualified low-income housing 
35.9 	project;
35.10 	(6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or 
35.11 	a joint venture of municipal electric utilities;
35.12 	(7) for subdivision 1, clauses (10), (11), (14), and (15), and (16), the owner of the 
35.13 	qualifying business; and
35.14 	(8) for subdivision 1, clauses (12) and (13), the applicant must be the governmental 
35.15 	entity that owns or contracts for the project or facility.

35.16 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
35.17 	June 30, 2012. 

35.18 	Sec. 15. Minnesota Statutes 2010, section 297A.75, subdivision 3, is amended to read:
35.19 		Subd. 3.Application. (a) The application must include sufficient information 
35.20 	to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 
35.21 	subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11), 
35.22 	(12), (13), (14), or (15), or (16), the contractor, subcontractor, or builder must furnish to 
35.23 	the refund applicant a statement including the cost of the exempt items and the taxes paid 
35.24 	on the items unless otherwise specifically provided by this subdivision. The provisions of 
35.25 	sections 289A.40 and 289A.50 apply to refunds under this section.
35.26 	(b) An applicant may not file more than two applications per calendar year for 
35.27 	refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
35.28 	(c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 
35.29 	exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 
35.30 	of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 
35.31 	subdivision 40, must not be filed until after June 30, 2009.

35.32 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
35.33 	June 30, 2012.

36.1 	Sec. 16. Minnesota Statutes 2010, section 297B.03, is amended to read:
36.2 	297B.03 EXEMPTIONS.
36.3 	There is specifically exempted from the provisions of this chapter and from 
36.4 	computation of the amount of tax imposed by it the following:
36.5 	(1) purchase or use, including use under a lease purchase agreement or installment 
36.6 	sales contract made pursuant to section 465.71, of any motor vehicle by the United States 
36.7 	and its agencies and instrumentalities and by any person described in and subject to the 
36.8 	conditions provided in section 297A.67, subdivision 11;
36.9 	(2) purchase or use of any motor vehicle by any person who was a resident of 
36.10 	another state or country at the time of the purchase and who subsequently becomes a 
36.11 	resident of Minnesota, provided the purchase occurred more than 60 days prior to the date 
36.12 	such person began residing in the state of Minnesota and the motor vehicle was registered 
36.13 	in the person's name in the other state or country;
36.14 	(3) purchase or use of any motor vehicle by any person making a valid election to be 
36.15 	taxed under the provisions of section 297A.90;
36.16 	(4) purchase or use of any motor vehicle previously registered in the state of 
36.17 	Minnesota when such transfer constitutes a transfer within the meaning of section 118, 
36.18 	331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal 
36.19 	Revenue Code;
36.20 	(5) purchase or use of any vehicle owned by a resident of another state and leased 
36.21 	to a Minnesota-based private or for-hire carrier for regular use in the transportation of 
36.22 	persons or property in interstate commerce provided the vehicle is titled in the state of 
36.23 	the owner or secured party, and that state does not impose a sales tax or sales tax on 
36.24 	motor vehicles used in interstate commerce;
36.25 	(6) purchase or use of a motor vehicle by a private nonprofit or public educational 
36.26 	institution for use as an instructional aid in automotive training programs operated by the 
36.27 	institution. "Automotive training programs" includes motor vehicle body and mechanical 
36.28 	repair courses but does not include driver education programs;
36.29 	(7) purchase of a motor vehicle for use as an ambulance by an ambulance service 
36.30 	licensed under section 144E.10 when that vehicle is equipped and specifically intended for 
36.31 	emergency response or for providing ambulance service;
36.32 	(8) purchase of a motor vehicle by or for a public library, as defined in section 
36.33 	134.001, subdivision 2, as a bookmobile or library delivery vehicle;
36.34 	(9) purchase of a ready-mixed concrete truck;
37.1 	(10) purchase or use of a motor vehicle by a town for use exclusively for road 
37.2 	maintenance, including snowplows and dump trucks, but not including automobiles, 
37.3 	vans, or pickup trucks;
37.4 	(11) purchase or use of a motor vehicle by a corporation, society, association, 
37.5 	foundation, or institution organized and operated exclusively for charitable, religious, 
37.6 	or educational purposes, except a public school, university, or library, but only if the 
37.7 	vehicle is:
37.8 	(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
37.9 	passenger automobile, as defined in section 168.002, if the automobile is designed and 
37.10 	used for carrying more than nine persons including the driver; and
37.11 	(ii) intended to be used primarily to transport tangible personal property or 
37.12 	individuals, other than employees, to whom the organization provides service in 
37.13 	performing its charitable, religious, or educational purpose;
37.14 	(12) purchase of a motor vehicle for use by a transit provider exclusively to provide 
37.15 	transit service is exempt if the transit provider is either (i) receiving financial assistance or 
37.16 	reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 
37.17 	473.388, or 473.405;
37.18 	(13) purchase or use of a motor vehicle by a qualified business, as defined in section 
37.19 	469.310, located in a job opportunity building zone, if the motor vehicle is principally 
37.20 	garaged in the job opportunity building zone and is primarily used as part of or in direct 
37.21 	support of the person's operations carried on in the job opportunity building zone. The 
37.22 	exemption under this clause applies to sales, if the purchase was made and delivery 
37.23 	received during the duration of the job opportunity building zone. The exemption under 
37.24 	this clause also applies to any local sales and use tax; and
37.25 	(14) purchase of a leased vehicle by the lessee who was a participant in a 
37.26 	lease-to-own program from a charitable organization that is:
37.27 	(i) described in section 501(c)(3) of the Internal Revenue Code; and
37.28 	(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4.

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

37.30 	Sec. 17. Laws 2006, chapter 257, section 2, the effective date, is amended to read:

37.31 	EFFECTIVE DATE. This section is effective for sales and purchases after June 
37.32 	30, 2006, and before July 1, 2011 2015.

37.33 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
37.34 	made after June 30, 2011.

38.1 	ARTICLE 4
38.2 	LOCAL TAXES

38.3 	Section 1. Minnesota Statutes 2010, section 297A.99, subdivision 1, is amended to 
38.4 	read:
38.5 		Subdivision 1.Authorization; scope. (a) A political subdivision of this state may 
38.6 	impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) if 
38.7 	permitted by special law enacted prior to May 20, 2008, or (4) if the political subdivision 
38.8 	enacted and imposed the tax before January 1, 1982, and its predecessor provision.
38.9 	(b) This section governs the imposition of a general sales tax by the political 
38.10 	subdivision. The provisions of this section preempt the provisions of any special law:
38.11 	(1) enacted before June 2, 1997, or
38.12 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
38.13 	provision from this section's rules by reference.
38.14 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
38.15 	special excise tax on motor vehicles.
38.16 	(d) Until after May 31, 2010, a political subdivision may not advertise, promote, 
38.17 	expend funds, or hold a referendum to support imposing a local option sales tax unless 
38.18 	it is for extension of an existing tax or the tax was authorized by a special law enacted 
38.19 	prior to May 20, 2008.
38.20 	(d) A political subdivision may not advertise or expend funds for the promotion of a 
38.21 	referendum to support imposing a local option sales tax. A political subdivision may only 
38.22 	expend funds to conduct the referendum.

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

38.24 	Sec. 2. Minnesota Statutes 2010, section 297A.99, subdivision 3, is amended to read:
38.25 		Subd. 3.Requirements for adoption, use, termination. (a) Imposition of a local 
38.26 	sales tax is subject to approval by voters of the political subdivision at a general election.
38.27 	The election must be conducted before the governing body of the political subdivision 
38.28 	requests legislative approval of the tax.
38.29 	(b) The proceeds of the tax must be dedicated exclusively to payment of the cost of a 
38.30 	specific capital improvement which is designated at least 90 days before the referendum 
38.31 	on imposition of the tax is conducted.
38.32 	(c) The tax must terminate after the improvement designated under paragraph (b) 
38.33 	has been completed.
39.1 	(d) After a sales tax imposed by a political subdivision has expired or been 
39.2 	terminated, the political subdivision is prohibited from imposing a local sales tax for a 
39.3 	period of one year. Notwithstanding subdivision 13, this paragraph applies to all local 
39.4 	sales taxes in effect at the time of or imposed after May 26, 1999.

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

39.6 	Sec. 3. Minnesota Statutes 2010, section 473.757, subdivision 11, is amended to read:
39.7 		Subd. 11.Uses of tax. (a) Revenues received from the tax imposed under 
39.8 	subdivision 10 may be used:
39.9 	(1) to pay costs of collection;
39.10 	(2) to pay or reimburse or secure the payment of any principal of, premium, or 
39.11 	interest on bonds issued in accordance with this act;
39.12 	(3) to pay costs and make expenditures and grants described in this section, including 
39.13 	financing costs related to them;
39.14 	(4) to maintain reserves for the foregoing purposes deemed reasonable and 
39.15 	appropriate by the county;
39.16 	(5) to pay for operating costs of the ballpark authority other than the cost of 
39.17 	operating or maintaining the ballpark; and
39.18 	(6) to make expenditures and grants for youth activities and amateur sports and 
39.19 	extension of library hours as described in subdivision 2;
39.20 	and for no other purpose.
39.21 	(b) Revenues from the tax designated for use under paragraph (a), clause (5), must 
39.22 	be deposited in the operating fund of the ballpark authority.
39.23 	(c) After completion of the ballpark and public infrastructure, the tax revenues not 
39.24 	required for current payments of the expenditures described in paragraph (a), clauses (1) to 
39.25 	(6), shall be used to (i) redeem or defease the bonds and (ii) prepay or establish a fund for 
39.26 	payment of future obligations under grants or other commitments for future expenditures 
39.27 	which are permitted by this section. Upon the redemption or defeasance of the bonds and 
39.28 	the establishment of reserves adequate to meet such future obligations, the taxes shall 
39.29 	terminate and shall not be reimposed. For purposes of this subdivision, "reserves adequate 
39.30 	to meet such future obligations" means a reserve that does not exceed the net present value 
39.31 	of the county's obligation to make grants under paragraph (a), clauses (5) and (6), and to 
39.32 	fund the reserve for capital improvements required under section 473.759, subdivision 3, 
39.33 	for the 30-year period beginning on the date of the original issuance of the bonds, less 
39.34 	those obligations that the county has already paid.

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

40.2 	Sec. 4. Laws 1996, chapter 471, article 2, section 29, subdivision 1, as amended by 
40.3 	Laws 2006, chapter 259, article 3, section 3, is amended to read:
40.4 		Subdivision 1.Sales tax authorized. (a) Notwithstanding Minnesota Statutes, 
40.5 	section 477A.016, or any other contrary provision of law, ordinance, or city charter, the 
40.6 	city of Hermantown may, by ordinance, impose an additional sales tax of up to one 
40.7 	percent on sales transactions taxable pursuant to Minnesota Statutes, chapter 297A, that 
40.8 	occur within the city. The proceeds of the tax imposed under this section must be used to 
40.9 	meet the costs of:
40.10 	(1) extending a sewer interceptor line; 
40.11 	(2) construction of a booster pump station, reservoirs, and related improvements 
40.12 	to the water system; and
40.13 	(3) construction of a building containing a police and fire station and an 
40.14 	administrative services facility.
40.15 	(b) If the city imposed a sales tax of only one-half of one percent under paragraph 
40.16 	(a), it may increase the tax to one percent to fund the purposes under paragraph (a) 
40.17 	provided it is approved by the voters at a general election held before December 31, 2012.

40.18 	EFFECTIVE DATE. This section is effective the day following compliance by the 
40.19 	city of Hermantown with Minnesota Statutes, section 645.021.

40.20 	Sec. 5. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by 
40.21 	Laws 2005, First Special Session chapter 3, article 5, section 28, is amended to read:
40.22 		Subd. 3.Use of revenues. (a) Revenues received from the taxes authorized by 
40.23 	subdivisions 1 and 2 must be used by the city to pay for the cost of collecting and 
40.24 	administering the taxes and to pay for the following projects:
40.25 	(1) transportation infrastructure improvements including regional highway and 
40.26 	airport improvements;
40.27 	(2) improvements to the civic center complex;
40.28 	(3) a municipal water, sewer, and storm sewer project necessary to improve regional 
40.29 	ground water quality; and
40.30 	(4) construction of a regional recreation and sports center and other higher education 
40.31 	facilities available for both community and student use.
40.32 	(b) The total amount of capital expenditures or bonds for these projects listed in 
40.33 	paragraph (a) that may be paid from the revenues raised from the taxes authorized in this 
40.34 	section may not exceed $111,500,000. The total amount of capital expenditures or bonds 
41.1 	for the project in clause (4) that may be paid from the revenues raised from the taxes 
41.2 	authorized in this section may not exceed $28,000,000.
41.3 	(c) In addition to the projects authorized in paragraph (a) and not subject to the 
41.4 	amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an 
41.5 	election under subdivision 5, paragraph (c), use the revenues received from the taxes and 
41.6 	bonds authorized in this section to pay the costs of or bonds for the following purposes:
41.7 	(1) $17,000,000 for capital expenditures and bonds for the following Olmsted 
41.8 	County transportation infrastructure improvements:
41.9 	(i) County State Aid Highway 34 reconstruction;
41.10 	(ii) Trunk Highway 63 and County State Aid Highway 16 interchange; 
41.11 	(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 
41.12 	interchange;
41.13 	(iv) widening of County State Aid Highway 22 West Circle Drive; and 
41.14 	(v) 60th Avenue Northwest corridor preservation;
41.15 	(2) $30,000,000 for city transportation projects including:
41.16 	(i) Trunk Highway 52 and 65th Street interchange;
41.17 	(ii) NW transportation corridor acquisition; 
41.18 	(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
41.19 	(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
41.20 	(v) Southeast transportation corridor acquisition;
41.21 	(vi) Rochester International Airport expansion; and 
41.22 	(vii) a transit operations center bus facility;
41.23 	(3) $14,000,000 for the University of Minnesota Rochester academic and 
41.24 	complementary facilities;
41.25 	(4) $6,500,000 for the Rochester Community and Technical College/Winona State 
41.26 	University career technical education and science and math facilities;
41.27 	(5) $6,000,000 for the Rochester Community and Technical College regional 
41.28 	recreation facilities at University Center Rochester;
41.29 	(6) $20,000,000 for the Destination Medical Community Initiative;
41.30 	(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;
41.31 	(8) $20,000,000 for a regional recreation/senior center;
41.32 	(9) $10,000,000 for an economic development fund; and
41.33 	(10) $8,000,000 for downtown infrastructure.
41.34 	(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1 
41.35 	and 2 may be used to fund transportation improvements related to a railroad bypass that 
41.36 	would divert traffic from the city of Rochester.
42.1 	(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph 
42.2 	(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin, 
42.3 	Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville, 
42.4 	Zumbrota, Spring Valley, West Concord, and Hayfield for economic development projects 
42.5 	that these communities would fund through their economic development authority or 
42.6 	housing and redevelopment authority.

42.7 	EFFECTIVE DATE. This section is effective the day after compliance by the 
42.8 	governing body of the city of Rochester with Minnesota Statutes, section 645.021.

42.9 	Sec. 6. Laws 1998, chapter 389, article 8, section 43, subdivision 4, as amended by 
42.10 	Laws 2005, First Special Session chapter 3, article 5, section 29, is amended to read:
42.11 		Subd. 4.Bonding authority. (a) The city may issue bonds under Minnesota 
42.12 	Statutes, chapter 475, to finance the capital expenditure and improvement projects. 
42.13 	An election to approve up to $71,500,000 in bonds under Minnesota Statutes, section 
42.14 	475.58, may be held in combination with the election to authorize imposition of the tax 
42.15 	under subdivision 1. Whether to permit imposition of the tax and issuance of bonds 
42.16 	may be posed to the voters as a single question. The question must state that the sales 
42.17 	tax revenues are pledged to pay the bonds, but that the bonds are general obligations 
42.18 	and will be guaranteed by the city's property taxes. An election to approve up to an 
42.19 	additional $40,000,000 of bonds under Minnesota Statutes, section 475.58, may be held 
42.20 	in combination with the election to authorize extension of the tax under subdivision 5, 
42.21 	paragraph (b). An election to approve bonds under Minnesota Statutes, section 475.58, 
42.22 	in an amount not to exceed $139,500,000 plus an amount equal to the costs of issuance 
42.23 	of the bonds, may be held in combination with the election to authorize the extension of 
42.24 	the tax under subdivision 5, paragraph (c).
42.25 	(b) The city may shall enter into an agreement with Olmsted County under which the 
42.26 	city and the county agree to jointly undertake and finance certain roadway infrastructure 
42.27 	improvements. The agreement may shall provide that the city will make available to the 
42.28 	county a portion of the sales tax revenues collected pursuant to the authority granted in 
42.29 	this section and the bonding authority provided in this subdivision. The county may, 
42.30 	pursuant to the agreement, issue its general obligation bonds in a principal amount not 
42.31 	exceeding the amount authorized by its agreement with the city payable primarily from 
42.32 	the sales tax revenues from the city under the agreement. The county's bonds must be 
42.33 	issued in accordance with the provisions of Minnesota Statutes, chapter 475, except that 
42.34 	no election is required for the issuance of the bonds and the bonds are not included in 
42.35 	the net debt of the county.
43.1 	(b) (c) The issuance of bonds under this subdivision is not subject to Minnesota 
43.2 	Statutes, section 275.60.
43.3 	(c) (d)  The bonds are not included in computing any debt limitation applicable to the 
43.4 	city, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of 
43.5 	and interest on the bonds is not subject to any levy limitation.
43.6 	(e) The aggregate principal amount of bonds, plus the aggregate of the taxes used 
43.7 	directly to pay eligible capital expenditures and improvements for projects listed in 
43.8 	subdivision 3, paragraph (a), may not exceed $111,500,000, plus an amount equal to the 
43.9 	costs related to issuance of the bonds. The aggregate principal amount of bonds plus the 
43.10 	aggregate of the taxes used directly to pay the costs of eligible projects under subdivision 
43.11 	3, paragraph (c), may not exceed $139,500,000 plus an amount equal to the costs of 
43.12 	issuance of the bonds.
43.13 	(d) (f) The taxes may be pledged to and used for the payment of the bonds and 
43.14 	any bonds issued to refund them, only if the bonds and any refunding bonds are general 
43.15 	obligations of the city.

43.16 	EFFECTIVE DATE. This section is effective the day after compliance by the 
43.17 	governing body of the city of Rochester with Minnesota Statutes, section 645.021.

43.18 	Sec. 7. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by 
43.19 	Laws 2005, First Special Session chapter 3, article 5, section 30, is amended to read:
43.20 		Subd. 5.Termination of taxes. (a) The taxes imposed under subdivisions 1 and 
43.21 	2 expire at the later of (1) December 31, 2009, or (2) when the city council determines 
43.22 	that sufficient funds have been received from the taxes to finance the first $71,500,000 
43.23 	of capital expenditures and bonds for the projects authorized in subdivision 3, including 
43.24 	the amount to prepay or retire at maturity the principal, interest, and premium due on any 
43.25 	bonds issued for the projects under subdivision 4, unless the taxes are extended as allowed 
43.26 	in paragraph (b). Any funds remaining after completion of the project and retirement or 
43.27 	redemption of the bonds shall also be used to fund the projects under subdivision 3. The 
43.28 	taxes imposed under subdivisions 1 and 2 may expire at an earlier time if the city so 
43.29 	determines by ordinance.
43.30 	(b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 
43.31 	other contrary provision of law, ordinance, or city charter, the city of Rochester may, by 
43.32 	ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009, 
43.33 	if approved by the voters of the city at a special election in 2005 or the general election in 
43.34 	2006. The question put to the voters must indicate that an affirmative vote would allow 
43.35 	up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000 
44.1 	of bonds to be issued above the amount authorized in the June 23, 1998, referendum for 
44.2 	the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are 
44.3 	extended under this paragraph, the taxes expire when the city council determines that 
44.4 	sufficient funds have been received from the taxes to finance the projects and to prepay 
44.5 	or retire at maturity the principal, interest, and premium due on any bonds issued for the 
44.6 	projects under subdivision 4. Any funds remaining after completion of the project and 
44.7 	retirement or redemption of the bonds may be placed in the general fund of the city.
44.8 	(c) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 
44.9 	other contrary provision of law, ordinance, or city charter, the city of Rochester may, by 
44.10 	ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond the date the city 
44.11 	council determines that sufficient funds have been received from the taxes to finance 
44.12 	$111,500,000 of expenditures and bonds for the projects authorized in subdivision 3, 
44.13 	paragraph (a), plus an amount equal to the costs of issuance of the bonds and including 
44.14 	the amount to prepay or retire at maturity the principal, interest, and premiums due on 
44.15 	any bonds issued for the projects under subdivision 4, paragraph (a), if approved by the 
44.16 	voters of the city at the general election in 2012. If the election to authorize the additional 
44.17 	$139,500,000 of bonds plus an amount equal to the costs of the issuance of the bonds is 
44.18 	placed on the general election ballot in 2012, the city may continue to collect the taxes 
44.19 	authorized in subdivisions 1 and 2 until December 31, 2012. The question put to the 
44.20 	voters must indicate that an affirmative vote would allow sales tax revenues be raised for 
44.21 	an extended period of time and an additional $139,500,000 of bonds plus an amount 
44.22 	equal to the costs of issuance of the bonds, to be issued above the amount authorized in 
44.23 	the previous elections required under paragraphs (a) and (b) for the projects and amounts 
44.24 	specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended 
44.25 	under this paragraph, the taxes expire when the city council determines that $139,500,000 
44.26 	has been received from the taxes to finance the projects plus an amount sufficient to 
44.27 	prepay or retire at maturity the principal, interest, and premium due on any bonds issued 
44.28 	for the projects under subdivision 4, including any bonds issued to refund the bonds. Any 
44.29 	funds remaining after completion of the projects and retirement or redemption of the 
44.30 	bonds may be placed in the general fund of the city.

44.31 	EFFECTIVE DATE. This section is effective the day after compliance by the 
44.32 	governing body of the city of Rochester with Minnesota Statutes, section 645.021.

44.33 	Sec. 8. Laws 2008, chapter 366, article 7, section 19, subdivision 3, is amended to read:
44.34 		Subd. 3.Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99, 
44.35 	subdivision 3, paragraph (b), the proceeds of the tax imposed under this section shall be 
45.1 	used to pay for the costs of acquisition, construction, improvement, and development of 
45.2 	a regional parks, bicycle trails, park land, open space, and pedestrian bridge walkways, 
45.3 	as described in the city improvement plan adopted by the city council by resolution on 
45.4 	December 12, 2006, and land and buildings for a community and recreation center. The 
45.5 	total amount of revenues from the taxes in subdivisions 1 and 2 that may be used to fund 
45.6 	these projects is $12,000,000 plus any associated bond costs.

45.7 	EFFECTIVE DATE. This section is effective the day after compliance by the 
45.8 	governing body of the city of Clearwater with Minnesota Statutes, section 645.021.

45.9 	Sec. 9. Laws 2010, chapter 389, article 5, section 6, subdivision 1, is amended to read:
45.10 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
45.11 	297A.99, subdivisions 1, 2, and 3, or 477A.016, or any other law, ordinance, or city 
45.12 	charter, the city of Marshall, if imposed within two three years of the date of final 
45.13 	enactment of this section, may impose any or all of the taxes described in this section.

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

45.15 	Sec. 10. CITY OF CLOQUET; TAXES AUTHORIZED.
 45.16 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
45.17 	297A.99, subdivision 1, 477A.016, or any other provision of law, ordinance, or city 
45.18 	charter, if approved by the voters pursuant to Minnesota Statutes, section 297A.99, the 
45.19 	city of Cloquet may impose by ordinance a sales and use tax of up to one-half of one 
45.20 	percent for the purposes specified in subdivision 3. Except as provided in this section, the 
45.21 	provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 
45.22 	collection, and enforcement of the tax authorized under this subdivision.
45.23 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
45.24 	297A.99, subdivision 1, 477A.016, or any other provision of law, ordinance, or city 
45.25 	charter, the city of Cloquet may impose by ordinance, for the purposes specified in 
45.26 	subdivision 3, an excise tax of up to $20 per motor vehicle, as defined by ordinance, 
45.27 	purchased or acquired from any person engaged within the city in the business of selling 
45.28 	motor vehicles at retail.
45.29 		Subd. 3.Use of revenues. Revenues received from taxes authorized by subdivisions 
45.30 	1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for the 
45.31 	following projects:
45.32 	(1) $4,500,000 for construction and completion of park improvement projects, 
45.33 	including St. Louis River riverfront improvements; Veteran's Park construction and 
46.1 	improvements; improvements to the Hilltop Park soccer complex and Braun Park baseball 
46.2 	complex; capital equipment and building and grounds improvements at the Pine Valley 
46.3 	Park/Pine Valley Hockey Arena/Cloquet Area Recreation Center; and development of 
46.4 	pedestrian trails within the city;
46.5 	(2) $5,800,00 for extension of utilities and the construction of all improvements 
46.6 	associated with the development of property adjacent to Highway 33 and Interstate 
46.7 	Highway 35, including payment of all debt service on bonds issued for these; and
46.8 	(3) $6,200,000 for engineering and construction of infrastructure improvements, 
46.9 	including, but not limited to, storm sewer, sanitary sewer, and water in areas identified as 
46.10 	part of the city's comprehensive land use plan.
46.11 	Authorized expenses include, but are not limited to, acquiring property and paying 
46.12 	construction expenses related to these improvements, and paying debt service on bonds or 
46.13 	other obligations issued to finance acquisition and construction of these improvements.
46.14 		Subd. 4.Bonding authority. (a) The city may issue bonds under Minnesota 
46.15 	Statutes, chapter 475, to pay capital and administrative expenses for the improvements 
46.16 	described in subdivision 3 in an amount that does not exceed $16,500,000. An election to 
46.17 	approve the bonds under Minnesota Statutes, section 475.58, is not required.
46.18 	(b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes, 
46.19 	sections 275.60 and 275.61.
46.20 	(c) The debt represented by the bonds is not included in computing any debt 
46.21 	limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section 
46.22 	475.61, to pay principal of and interest on the bonds is not subject to any levy limitation.
46.23 		Subd. 5.Termination of taxes. The taxes imposed under subdivisions 1 and 2 
46.24 	expire at the earlier of (1) 30 years, or (2) when the city council determines that the amount 
46.25 	of revenues received from the taxes to finance the improvements described in subdivision 
46.26 	3 first equals or exceeds $16,500,000, plus the additional amount needed to pay the costs 
46.27 	related to issuance of bonds under subdivision 4, including interest on the bonds. Any 
46.28 	funds remaining after completion of the project and retirement or redemption of the bonds 
46.29 	may be placed in the general fund of the city.  The taxes imposed under subdivisions 1 and 
46.30 	2 may expire at an earlier time if the city so determines by ordinance.

46.31 	EFFECTIVE DATE. This section is effective the day after the governing body of 
46.32 	the city of Cloquet and its chief clerical officer timely comply with Minnesota Statutes, 
46.33 	section 645.021.

46.34 	Sec. 11. CITY OF FERGUS FALLS; SALES AND USE TAX AUTHORIZED.
 47.1 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
47.2 	297A.99, subdivision 1, or 477A.016, or any other provision of law, ordinance, or city 
47.3 	charter, as approved by the voters at the November 2, 2010 general election, the city 
47.4 	of Fergus Falls may impose by ordinance a sales and use tax of up to one-half of one 
47.5 	percent for the purposes specified in subdivision 2.  Except as provided in this section, the 
47.6 	provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 
47.7 	collection, and enforcement of the tax authorized under this subdivision.
47.8 		Subd. 2.Use of revenues. Revenues received from taxes authorized by subdivision 
47.9 	1 must be used by the city of Fergus Falls to pay the cost of collecting the tax and to pay for 
47.10 	all or part of the costs of the acquisition and betterment of a regional community ice arena 
47.11 	facility. Authorized expenses include, but are not limited to, acquiring property, predesign, 
47.12 	design, and paying construction, furnishing, and equipment costs related to the facility and 
47.13 	paying debt service on bonds or other obligations issued by the Fergus Falls Port Authority 
47.14 	to finance the facility. The amount of revenues from the tax imposed under subdivision 1 
47.15 	that may be used to finance the facility and any associated costs is limited to $6,600,000.
47.16 		Subd. 3.Termination of taxes. The tax imposed under this section expires when 
47.17 	the Fergus Falls City Council determines that sufficient funds have been received from 
47.18 	the taxes to finance the facility and to prepay or retire at maturity the principal, interest, 
47.19 	and premium due on any bonds, including refunding bonds, issued by the Fergus Falls 
47.20 	Port Authority for the facility. Any funds remaining after completion of the facility and 
47.21 	retirement or redemption of the bonds may be placed in the general fund of the city of 
47.22 	Fergus Falls. The tax imposed under subdivision 1 may expire at an earlier time if the 
47.23 	city so determines by ordinance.

47.24 	EFFECTIVE DATE. This section is effective the day after the governing body 
47.25 	of the city of Fergus Falls and its chief clerical officer timely comply with Minnesota 
47.26 	Statutes, section 645.021.

47.27 	Sec. 12. CITY OF HUTCHINSON; TAXES AUTHORIZED.
 47.28 		Subdivision 1.Sales and use tax. Notwithstanding Minnesota Statutes, section 
47.29 	477A.016, or any other provision of law, ordinance, or city charter, as approved by 
47.30 	the voters at a referendum held at the 2010 general election, the city of Hutchinson 
47.31 	may impose by ordinance a sales and use tax of up to one-half of one percent for the 
47.32 	purposes specified in subdivision 3. Except as otherwise provided in this section, 
47.33 	Minnesota Statutes, section 297A.99, governs the imposition, administration, collection, 
47.34 	and enforcement of the tax authorized under this subdivision. Minnesota Statutes, section 
47.35 	297A.99, subdivision 1, paragraph (d), does not apply to this section.
48.1 		Subd. 2.Excise tax authorized. Notwithstanding Minnesota Statutes, section 
48.2 	477A.016, or any other provision of law, ordinance, or city charter, the city of Hutchinson 
48.3 	may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up 
48.4 	to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person 
48.5 	engaged within the city in the business of selling motor vehicles at retail.
48.6 		Subd. 3.Use of revenues. Revenues received from the taxes authorized by this 
48.7 	section must be used to pay the cost of collecting and administering the tax and to finance 
48.8 	the costs of constructing the water treatment facility and renovating the wastewater 
48.9 	treatment facility in the city of Hutchinson. Authorized costs include, but are not limited 
48.10 	to, construction and engineering costs of the projects and associated bond costs.
48.11 		Subd. 4.Termination of tax. The taxes authorized under subdivisions 1 and 2 
48.12 	terminate at the earlier of: (1) 18 years after the date of initial imposition of the tax; or 
48.13 	(2) when the Hutchinson City Council determines that the amount of revenues raised is 
48.14 	sufficient to pay for the projects under subdivision 3, plus the amount needed to finance 
48.15 	the capital and administrative costs for the projects specified in subdivision 3, and to repay 
48.16 	or retire at maturity the principal, interest, and premium due on any bonds issued for the 
48.17 	projects. Any funds remaining after completion of the projects specified in subdivision 
48.18 	3 and retirement or redemption of the associated bonds may be placed in the general 
48.19 	fund of the city. The taxes imposed under subdivisions 1 and 2 may expire at an earlier 
48.20 	time if the city so determines by ordinance. 

48.21 	EFFECTIVE DATE. This section is effective the day after compliance by the 
48.22 	governing body of the city of Hutchinson with Minnesota Statutes, section 645.021.

48.23 	Sec. 13. CITY OF LANESBORO; SALES AND USE TAX AUTHORIZED.
 48.24 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
48.25 	sections 297A.99, subdivision 1, and 477A.016, or any other provision of law, ordinance, 
48.26 	or city charter, as approved by the voters at the November 2, 2010, general election, the 
48.27 	city of Lanesboro may impose by ordinance a sales and use tax of up to one-half of one 
48.28 	percent for the purposes specified in subdivision 2. Except as provided in this section, 
48.29 	the provisions of Minnesota Statutes, section 297A.99, govern the imposition of the tax 
48.30 	authorized under this subdivision.
48.31 		Subd. 2.Use of revenues. Revenues received from the tax authorized under 
48.32 	subdivision 1 must be used by the city of Lanesboro to pay the costs of collecting the tax 
48.33 	and to pay for all or a part of the improvements to city streets and utility systems, and the 
48.34 	betterment of city municipal buildings consisting of (i) street and utility improvements to 
48.35 	Calhoun Avenue, Fillmore Avenue, Kenilworth Avenue, Pleasant Street, Kirkwood Street, 
49.1 	Auburn Avenue, and Zenith Street, and street light replacement on State Highways 250 
49.2 	and 16; (ii) improvements to utility systems consisting of wastewater treatment facility 
49.3 	improvements and electric utility improvements to the Lanesboro High Hazard Dam; and 
49.4 	(iii) improvements to the Lanesboro community center, library, and city hall, including 
49.5 	paying debt service on bonds or other obligations issued to fund these projects under 
49.6 	subdivision 3. The total amount of revenues from the taxes in subdivision 1 that may be 
49.7 	used to fund these projects is $800,000 plus any associated bond costs.
49.8 		Subd. 3.Bonding authority. The city of Lanesboro may issue bonds under 
49.9 	Minnesota Statutes, chapter 475, to pay capital and administrative expenses related to the 
49.10 	projects authorized in subdivision 2. An election to approve the bonds under Minnesota 
49.11 	Statutes, section 475.58, is not required. The issuance of bonds under this subdivision 
49.12 	is not subject to Minnesota Statutes, sections 275.60 and 275.61. The bonds are not 
49.13 	included in computing any debt limitation applicable to the city and the levy of taxes 
49.14 	under Minnesota Statutes, section 475.61, to pay principal and interest on the bonds is 
49.15 	not subject to any levy limitation.
49.16 	The aggregate principal amount of the bonds plus the aggregate of the taxes used 
49.17 	directly to pay costs of the projects listed in subdivision 2 may not exceed $800,000, plus 
49.18 	an amount equal to the costs related to issuance of the bonds and capitalized interest. 
49.19 	The taxes authorized in subdivision 1 may be pledged and used for payments of 
49.20 	the bonds and bonds issued to refund them, only if the bonds and any refunding bonds 
49.21 	are general obligations of the city.
49.22 		Subd. 4.Termination of tax. The tax imposed under subdivision 1 expires when 
49.23 	the Lanesboro City Council determines that sufficient funds have been raised from the 
49.24 	taxes to finance the projects authorized under subdivision 2 and to prepay or retire at 
49.25 	maturity the principal, interest, and premium due on any bonds issued under subdivision 3. 
49.26 	Any funds remaining after completion of the project and retirement or redemption of the 
49.27 	bonds may be placed in the general fund of the city. The tax imposed under subdivision 1 
49.28 	may expire at an earlier time if the city so determines by ordinance.

49.29 	EFFECTIVE DATE. This section is effective the day after the governing body of 
49.30 	the city of Lanesboro and its chief clerical officer comply with Minnesota Statutes, section 
49.31 	645.021.

49.32 	Sec. 14. CITY OF MARSHALL; SALES AND USE TAX.
 49.33 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
49.34 	297A.99, subdivisions 1 and 2, or 477A.016, or any other law, ordinance, or city charter, 
49.35 	the city of Marshall, if approved by the voters at a general election held within two 
50.1 	years of the date of final enactment of this section, may impose the tax authorized under 
50.2 	subdivision 2. Two separate ballot questions must be presented to the voters, one for each 
50.3 	of the two facility projects named in subdivision 3.
50.4 		Subd. 2.Sales and use tax authorized. The city of Marshall may impose by 
50.5 	ordinance a sales and use tax of up to one-half of one percent for the purposes specified in 
50.6 	subdivision 3. The provisions of Minnesota Statutes, section 297A.99, except subdivisions 
50.7 	1 and 2, govern the imposition, administration, collection, and enforcement of the tax 
50.8 	authorized under this subdivision.
50.9 		Subd. 3.Use of sales and use tax revenues. The revenues derived from the tax 
50.10 	authorized under subdivision 2 must be used by the city of Marshall to pay the costs of 
50.11 	collecting and administering the sales and use tax and to pay all or part of the costs of the 
50.12 	new and existing facilities of the Minnesota Emergency Response and Industry Training 
50.13 	Center and all or part of the costs of the new facilities of the Southwest Minnesota 
50.14 	Regional Amateur Sports Center. Authorized expenses include, but are not limited to, 
50.15 	acquiring property, predesign, design, and paying construction, furnishing, and equipment 
50.16 	costs related to these facilities and paying debt service on bonds or other obligations issued 
50.17 	by the city of Marshall under subdivision 4 to finance the capital costs of these facilities.
50.18 		Subd. 4.Bonds. (a) If the imposition of a sales and use tax is approved by the voters, 
50.19 	the city of Marshall may issue bonds under Minnesota Statutes, chapter 475, to finance all 
50.20 	or a portion of the costs of the facilities authorized in subdivision 3, and may issue bonds 
50.21 	to refund bonds previously issued. The aggregate principal amount of bonds issued under 
50.22 	this subdivision may not exceed $17,290,000, plus an amount to be applied to the payment 
50.23 	of the costs of issuing the bonds. The bonds may be paid from or secured by any funds 
50.24 	available to the city of Marshall, including the tax authorized under subdivision 2. 
50.25 	(b) The bonds are not included in computing any debt limitation applicable to the 
50.26 	city of Marshall, and any levy of taxes under Minnesota Statutes, section 475.61, to pay 
50.27 	principal and interest on the bonds, is not subject to any levy limitation. A separate 
50.28 	election to approve the bonds under Minnesota Statutes, section 475.58, is not required. 
50.29 		Subd. 5.Termination of taxes. The tax imposed under subdivision 2 expires at the 
50.30 	earlier of (1) 15 years after the tax is first imposed, or (2) when the city council determines 
50.31 	that the amount of revenues received from the tax to pay for the capital and administrative 
50.32 	costs of the facilities under subdivision 3 first equals or exceeds the amount authorized to 
50.33 	be spent for the facilities plus the additional amount needed to pay the costs related to 
50.34 	issuance of the bonds under subdivision 4, including interest on the bonds. Any funds 
50.35 	remaining after payment of all such costs and retirement or redemption of the bonds shall 
51.1 	be placed in the general fund of the city. The tax imposed under subdivision 2 may expire 
51.2 	at an earlier time if the city so determines by ordinance.

51.3 	EFFECTIVE DATE. This section is effective the day after compliance by the 
51.4 	governing body of the city of Marshall with Minnesota Statutes, section 645.021.

51.5 	Sec. 15. CITY OF MEDFORD; SALES AND USE TAX.
 51.6 		Subdivision 1.Sales and use tax authorized. Notwithstanding Minnesota Statutes, 
51.7 	sections 297A.99, subdivision 1, and 477A.016, or any other provision of law, ordinance, 
51.8 	or city charter, if approved by the voters pursuant to Minnesota Statutes, section 297A.99, 
51.9 	at the next general election, the city of Medford may impose by ordinance a sales and use 
51.10 	tax of one-half of one percent for the purposes specified in subdivision 2. Except as 
51.11 	otherwise provided in this section, the provisions of Minnesota Statutes, section 297A.99, 
51.12 	govern the imposition, administration, collection, and enforcement of the tax authorized 
51.13 	under this subdivision.
51.14 		Subd. 2.Use of revenues. The proceeds of the tax imposed under this section must 
51.15 	be used by the city of Medford to pay the costs of collecting and administering the tax 
51.16 	and to repay loans received from the Minnesota Public Facilities Authority since 2007 
51.17 	that were used to finance $4,200,000 of improvements to the city's water and wastewater 
51.18 	systems.
51.19 		Subd. 3.Termination of taxes. The tax imposed under this section expires at the 
51.20 	earlier of (1) 20 years after the date the taxes are first imposed, or (2) when the Medford 
51.21 	City Council determines that the amount of revenues received from the tax equals or 
51.22 	exceeds the sum of loans made to the city by the Minnesota Public Facilities Authority 
51.23 	as described in subdivision 2, including interest on the loans. Any funds remaining 
51.24 	after completion of the repayment of the loans may be placed in the general fund of the 
51.25 	city. The tax imposed under subdivision 1 may expire at an earlier time if the city so 
51.26 	determines by ordinance.

51.27 	EFFECTIVE DATE. This section is effective the day after compliance by the 
51.28 	governing body of the city of Medford with Minnesota Statutes, section 645.021.

51.29 	ARTICLE 5
51.30 	PROPERTY TAXES

51.31 	Section 1. Minnesota Statutes 2010, section 126C.01, subdivision 3, is amended to read:
51.32 		Subd. 3.Referendum market value. "Referendum market value" means the market 
51.33 	value of all taxable property, excluding property classified as class 2, noncommercial 
52.1 	4c(1), or 4c(4), or 4c(12) under section 273.13. The portion of class 2a property consisting 
52.2 	of the house, garage, and surrounding one acre of land of an agricultural homestead is 
52.3 	included in referendum market value. Any class of property, or any portion of a class of 
52.4 	property, that is included in the definition of referendum market value and that has a class 
52.5 	rate of less than one percent under section 273.13 shall have a referendum market value 
52.6 	equal to its net tax capacity multiplied by 100. 

52.7 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
52.8 	thereafter.

52.9 	Sec. 2. Minnesota Statutes 2010, section 270C.991, subdivision 4, is amended to read:
52.10 		Subd. 4.Property tax working group. (a) A property tax working group is 
52.11 	established as provided in this subdivision. The goals of the working group are:
52.12 	(1) to investigate ways to simplify the property tax system and make advisory 
52.13 	recommendations on ways to make the system more understandable;
52.14 	(2) to reexamine the property tax calendar to determine what changes could be made 
52.15 	to shorten the two-year cycle from assessment through property tax collection; and
52.16 	(3) to determine the cost versus the benefits of the various property tax components, 
52.17 	including property classifications, credits, aids, exclusions, exemptions, and abatements, 
52.18 	and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
52.19 	(b) The 13 12-member working group shall consist of the following members:
52.20 	(1) two state representatives, both appointed by the chair of the house of 
52.21 	representatives Taxes Committee, one from the majority party and one from the largest 
52.22 	minority party;
52.23 	(2) two senators appointed by the Subcommittee on Committees of the Senate Rules 
52.24 	and Administration Committee, one from the majority party and one from the largest 
52.25 	minority party;
52.26 	(3) the commissioner of revenue, or designee;
52.27 	(4) (3) one person appointed by the Association of Minnesota Counties;
52.28 	(5) (4) one person appointed by the League of Minnesota Cities;
52.29 	(6) (5) one person appointed by the Minnesota Association of Townships;
52.30 	(7) (6) one person appointed by the Minnesota Chamber of Commerce;
52.31 	(8) (7) one person appointed by the Minnesota Association of Assessing Officers;
52.32 	(9) (8) two homeowners, one who is under 65 years of age, and one who is 65 years 
52.33 	of age or older, both appointed by the commissioner of revenue; and
52.34 	(10) (9) one person jointly appointed by the Minnesota Farm Bureau and the 
52.35 	Minnesota Farmers Union.
53.1 	The commissioner of revenue shall chair the initial meeting, and the working 
53.2 	group shall elect a chair at that initial meeting. The working group will meet at the call 
53.3 	of the chair. Members of the working group shall serve without compensation. The 
53.4 	commissioner of revenue must provide administrative support to the working group. 
53.5 	Chapter 13D does not apply to meetings of the working group. Meetings of the working 
53.6 	group must be open to the public and the working group must provide notice of a meeting 
53.7 	to potentially interested persons at least seven days before the meeting. A meeting of the 
53.8 	council occurs when a quorum is present.
53.9 	(c) The working group shall make its advisory recommendations to the chairs of 
53.10 	the house of representatives and senate Taxes Committees on or before February 1, 2012
53.11 	2013, at which time the working group shall be finished and this subdivision expires. 
53.12 	The advisory recommendations should be reviewed by the Taxes Committee under 
53.13 	subdivision 5.

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

53.15 	Sec. 3. Minnesota Statutes 2010, section 272.02, subdivision 39, is amended to read:
53.16 		Subd. 39.Economic development; public purpose. The holding of property by a 
53.17 	political subdivision of the state for later resale for economic development purposes shall 
53.18 	be considered a public purpose in accordance with subdivision 8 for a period not to exceed 
53.19 	eight nine years, except that for property located in a city of 5,000 population or under that 
53.20 	is located outside of the metropolitan area as defined in section 473.121, subdivision 2, the 
53.21 	period must not exceed 15 years.
53.22 	The holding of property by a political subdivision of the state for later resale (1) 
53.23 	which is purchased or held for housing purposes, or (2) which meets the conditions 
53.24 	described in section 469.174, subdivision 10, shall be considered a public purpose in 
53.25 	accordance with subdivision 8.
53.26 	The governing body of the political subdivision which acquires property which is 
53.27 	subject to this subdivision shall after the purchase of the property certify to the city or 
53.28 	county assessor whether the property is held for economic development purposes or 
53.29 	housing purposes, or whether it meets the conditions of section 469.174, subdivision 10. 
53.30 	If the property is acquired for economic development purposes and buildings or other 
53.31 	improvements are constructed after acquisition of the property, and if more than one-half 
53.32 	of the floor space of the buildings or improvements which is available for lease to or use 
53.33 	by a private individual, corporation, or other entity is leased to or otherwise used by 
53.34 	a private individual, corporation, or other entity the provisions of this subdivision shall 
53.35 	not apply to the property. This subdivision shall not create an exemption from section 
54.1 	272.01, subdivision 2; 272.68; 273.19; or 469.040, subdivision 3; or other provision of 
54.2 	law providing for the taxation of or for payments in lieu of taxes for publicly held property 
54.3 	which is leased, loaned, or otherwise made available and used by a private person.

54.4 	EFFECTIVE DATE. This section is effective for taxes levied in 2011, payable 
54.5 	in 2012, and thereafter.

54.6 	Sec. 4. Minnesota Statutes 2010, section 272.02, is amended by adding a subdivision 
54.7 	to read:
54.8 		Subd. 95.Electric generation facility; personal property. (a) Notwithstanding 
54.9 	subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and other 
54.10 	personal property that is part of a multiple reciprocating engine electric generation facility 
54.11 	that adds more than 20 and less than 30 megawatts of installed capacity at a site where 
54.12 	there is presently more than ten megawatts and fewer than 15 megawatts of installed 
54.13 	capacity and that meets the requirements of this subdivision is exempt from taxation and 
54.14 	from payments in lieu of taxation. At the time of construction, the facility must:
54.15 	(1) be designed to utilize natural gas as a primary fuel;
54.16 	(2) be owned and operated by a municipal power agency as defined in section 
54.17 	453.52, subdivision 8;
54.18 	(3) be located within one mile of an existing natural gas pipeline;
54.19 	(4) be designed to have black start capability and to furnish emergency backup 
54.20 	power service to the city in which it is located;
54.21 	(5) satisfy a resource deficiency identified in an approved integrated resource plan 
54.22 	filed under section 216B.2422; and 
54.23 	(6) have received, by resolution, the approval of the governing bodies of the city 
54.24 	and county in which it is located for the exemption of personal property provided by 
54.25 	this subdivision.
54.26 	(b) Construction of the facility must be commenced after December 31, 2011, and 
54.27 	before January 1, 2015. Property eligible for this exemption does not include (i) electric 
54.28 	transmission lines and interconnections or gas pipelines and interconnections appurtenant 
54.29 	to the property or the facility; or (ii) property located on the site on the enactment date 
54.30 	of this subdivision.

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

54.33 	Sec. 5. Minnesota Statutes 2010, section 273.121, subdivision 1, is amended to read:
55.1 		Subdivision 1.Notice. Any county assessor or city assessor having the powers of a 
55.2 	county assessor, valuing or classifying taxable real property shall in each year notify those 
55.3 	persons whose property is to be included on the assessment roll that year if the person's 
55.4 	address is known to the assessor, otherwise the occupant of the property. The notice shall 
55.5 	be in writing and shall be sent by ordinary mail at least ten days before the meeting of 
55.6 	the local board of appeal and equalization under section 274.01 or the review process 
55.7 	established under section 274.13, subdivision 1c. Upon written request by the owner of the 
55.8 	property, the assessor may send the notice in electronic form or by electronic mail instead 
55.9 	of on paper or by ordinary mail. It shall contain: (1) the market value for the current and 
55.10 	prior assessment, (2) the limited market value under section 273.11, subdivision 1a, for 
55.11 	the current and prior assessment, (3) the qualifying amount of any improvements under 
55.12 	section 273.11, subdivision 16, for the current assessment, (4) (3) the market value subject 
55.13 	to taxation after subtracting the amount of any qualifying improvements for the current 
55.14 	assessment, (5) (4) the classification of the property for the current and prior assessment, 
55.15 	(6) a note that if the property is homestead and at least 45 years old, improvements made 
55.16 	to the property may be eligible for a valuation exclusion under section 273.11, subdivision 
55.17 	16, (7) (5) the assessor's office address, and (8) (6) the dates, places, and times set for the 
55.18 	meetings of the local board of appeal and equalization, the review process established 
55.19 	under section 274.13, subdivision 1c, and the county board of appeal and equalization. If 
55.20 	the classification of the property has changed between the current and prior assessments, a 
55.21 	specific note to that effect shall be prominently listed on the statement. The commissioner 
55.22 	of revenue shall specify the form of the notice. The assessor shall attach to the assessment 
55.23 	roll a statement that the notices required by this section have been mailed. Any assessor 
55.24 	who is not provided sufficient funds from the assessor's governing body to provide such 
55.25 	notices, may make application to the commissioner of revenue to finance such notices. 
55.26 	The commissioner of revenue shall conduct an investigation and, if satisfied that the 
55.27 	assessor does not have the necessary funds, issue a certification to the commissioner 
55.28 	of management and budget of the amount necessary to provide such notices. The 
55.29 	commissioner of management and budget shall issue a warrant for such amount and shall 
55.30 	deduct such amount from any state payment to such county or municipality. The necessary 
55.31 	funds to make such payments are hereby appropriated. Failure to receive the notice shall in 
55.32 	no way affect the validity of the assessment, the resulting tax, the procedures of any board 
55.33 	of review or equalization, or the enforcement of delinquent taxes by statutory means.

55.34 	EFFECTIVE DATE. This section is effective for notifications for taxes payable in 
55.35 	2013 and thereafter.

56.1 	Sec. 6. Minnesota Statutes 2010, section 273.13, subdivision 23, as amended by Laws 
56.2 	2011, chapter 112, article 11, section 8, is amended to read:
56.3 		Subd. 23.Class 2. (a) An agricultural homestead consists of class 2a agricultural 
56.4 	land that is homesteaded, along with any class 2b rural vacant land that is contiguous to 
56.5 	the class 2a land under the same ownership. The market value of the house and garage 
56.6 	and immediately surrounding one acre of land has the same class rates as class 1a or 1b 
56.7 	property under subdivision 22. The value of the remaining land including improvements 
56.8 	up to the first tier valuation limit of agricultural homestead property has a net class rate 
56.9 	of 0.5 percent of market value. The remaining property over the first tier has a class rate 
56.10 	of one percent of market value. For purposes of this subdivision, the "first tier valuation 
56.11 	limit of agricultural homestead property" and "first tier" means the limit certified under 
56.12 	section 273.11, subdivision 23.
56.13 	(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 
56.14 	are agricultural land and buildings. Class 2a property has a net class rate of one percent of 
56.15 	market value, unless it is part of an agricultural homestead under paragraph (a). Class 
56.16 	2a property must also include any property that would otherwise be classified as 2b, 
56.17 	but is interspersed with class 2a property, including but not limited to sloughs, wooded 
56.18 	wind shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback 
56.19 	requirement, and other similar land that is impractical for the assessor to value separately 
56.20 	from the rest of the property or that is unlikely to be able to be sold separately from 
56.21 	the rest of the property.
56.22 	An assessor may classify the part of a parcel described in this subdivision that is used 
56.23 	for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
56.24 	(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, 
56.25 	that are unplatted real estate, rural in character and not used for agricultural purposes, 
56.26 	including land used for growing trees for timber, lumber, and wood and wood products, 
56.27 	that is not improved with a structure. The presence of a minor, ancillary nonresidential 
56.28 	structure as defined by the commissioner of revenue does not disqualify the property from 
56.29 	classification under this paragraph. Any parcel of 20 acres or more improved with a 
56.30 	structure that is not a minor, ancillary nonresidential structure must be split-classified, and 
56.31 	ten acres must be assigned to the split parcel containing the structure. Class 2b property 
56.32 	has a net class rate of one percent of market value unless it is part of an agricultural 
56.33 	homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
56.34 	(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 
56.35 	acres statewide per taxpayer that is being managed under a forest management plan that 
56.36 	meets the requirements of chapter 290C, but is not enrolled in the sustainable forest 
57.1 	resource management incentive program. It has a class rate of .65 percent, provided that 
57.2 	the owner of the property must apply to the assessor in order for the property to initially 
57.3 	qualify for the reduced rate and provide the information required by the assessor to verify 
57.4 	that the property qualifies for the reduced rate. If the assessor receives the application 
57.5 	and information before May 1 in an assessment year, the property qualifies beginning 
57.6 	with that assessment year. If the assessor receives the application and information after 
57.7 	April 30 in an assessment year, the property may not qualify until the next assessment 
57.8 	year. The commissioner of natural resources must concur that the land is qualified. The 
57.9 	commissioner of natural resources shall annually provide county assessors verification 
57.10 	information on a timely basis. The presence of a minor, ancillary nonresidential structure 
57.11 	as defined by the commissioner of revenue does not disqualify the property from 
57.12 	classification under this paragraph.
57.13 	(e) Agricultural land as used in this section means contiguous acreage of ten 
57.14 	acres or more, used during the preceding year for agricultural purposes. "Agricultural 
57.15 	purposes" as used in this section means the raising, cultivation, drying, or storage of 
57.16 	agricultural products for sale, or the storage of machinery or equipment used in support 
57.17 	of agricultural production by the same farm entity. For a property to be classified as 
57.18 	agricultural based only on the drying or storage of agricultural products, the products 
57.19 	being dried or stored must have been produced by the same farm entity as the entity 
57.20 	operating the drying or storage facility. "Agricultural purposes" also includes enrollment 
57.21 	in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal 
57.22 	Conservation Reserve Program as contained in Public Law 99-198 or a similar state 
57.23 	or federal conservation program if the property was classified as agricultural (i) under 
57.24 	this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment. 
57.25 	Agricultural classification shall not be based upon the market value of any residential 
57.26 	structures on the parcel or contiguous parcels under the same ownership.
57.27 	(f) Real estate of less than ten acres, which is exclusively or intensively used for 
57.28 	raising or cultivating agricultural products, shall be considered as agricultural land. To 
57.29 	qualify under this paragraph, property that includes a residential structure must be used 
57.30 	intensively for one of the following purposes:
57.31 	(i) for drying or storage of grain or storage of machinery or equipment used to 
57.32 	support agricultural activities on other parcels of property operated by the same farming 
57.33 	entity;
57.34 	(ii) as a nursery, provided that only those acres used to produce nursery stock are 
57.35 	considered agricultural land;
58.1 	(iii) for livestock or poultry confinement, provided that land that is used only for 
58.2 	pasturing and grazing does not qualify; or
58.3 	(iv) for market farming; for purposes of this paragraph, "market farming" means the 
58.4 	cultivation of one or more fruits or vegetables or production of animal or other agricultural 
58.5 	products for sale to local markets by the farmer or an organization with which the farmer 
58.6 	is affiliated.
58.7 	(g) Land shall be classified as agricultural even if all or a portion of the agricultural 
58.8 	use of that property is the leasing to, or use by another person for agricultural purposes.
58.9 	Classification under this subdivision is not determinative for qualifying under 
58.10 	section 273.111.
58.11 	(h) The property classification under this section supersedes, for property tax 
58.12 	purposes only, any locally administered agricultural policies or land use restrictions that 
58.13 	define minimum or maximum farm acreage.
58.14 	(i) The term "agricultural products" as used in this subdivision includes production 
58.15 	for sale of:
58.16 	(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 
58.17 	animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 
58.18 	bees, and apiary products by the owner;
58.19 	(2) fish bred for sale and consumption if the fish breeding occurs on land zoned 
58.20 	for agricultural use;
58.21 	(3) the commercial boarding of horses, which may include related horse training and 
58.22 	riding instruction, if the boarding is done on property that is also used for raising pasture 
58.23 	to graze horses or raising or cultivating other agricultural products as defined in clause (1);
58.24 	(4) property which is owned and operated by nonprofit organizations used for 
58.25 	equestrian activities, excluding racing;
58.26 	(5) game birds and waterfowl bred and raised (i) on a game farm licensed under 
58.27 	section 97A.105, provided that the annual licensing report to the Department of Natural 
58.28 	Resources, which must be submitted annually by March 30 to the assessor, to the 
58.29 	Department of Natural Resources indicates that at least 500 birds were raised or used for 
58.30 	breeding stock on the property during the preceding year and that the owner provides a 
58.31 	copy of the owner's most recent schedule F; or (ii) for use on a shooting preserve licensed 
58.32 	under section 97A.115;
58.33 	(6) insects primarily bred to be used as food for animals;
58.34 	(7) trees, grown for sale as a crop, including short rotation woody crops, and not 
58.35 	sold for timber, lumber, wood, or wood products; and
59.1 	(8) maple syrup taken from trees grown by a person licensed by the Minnesota 
59.2 	Department of Agriculture under chapter 28A as a food processor.
59.3 	(j) If a parcel used for agricultural purposes is also used for commercial or industrial 
59.4 	purposes, including but not limited to:
59.5 	(1) wholesale and retail sales;
59.6 	(2) processing of raw agricultural products or other goods;
59.7 	(3) warehousing or storage of processed goods; and
59.8 	(4) office facilities for the support of the activities enumerated in clauses (1), (2), 
59.9 	and (3),
59.10 	the assessor shall classify the part of the parcel used for agricultural purposes as class 
59.11 	1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 
59.12 	use. The grading, sorting, and packaging of raw agricultural products for first sale is 
59.13 	considered an agricultural purpose. A greenhouse or other building where horticultural 
59.14 	or nursery products are grown that is also used for the conduct of retail sales must be 
59.15 	classified as agricultural if it is primarily used for the growing of horticultural or nursery 
59.16 	products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 
59.17 	those products. Use of a greenhouse or building only for the display of already grown 
59.18 	horticultural or nursery products does not qualify as an agricultural purpose.
59.19 	(k) The assessor shall determine and list separately on the records the market value 
59.20 	of the homestead dwelling and the one acre of land on which that dwelling is located. If 
59.21 	any farm buildings or structures are located on this homesteaded acre of land, their market 
59.22 	value shall not be included in this separate determination.
59.23 	(l) Class 2d airport landing area consists of a landing area or public access area of 
59.24 	a privately owned public use airport. It has a class rate of one percent of market value. 
59.25 	To qualify for classification under this paragraph, a privately owned public use airport 
59.26 	must be licensed as a public airport under section 360.018. For purposes of this paragraph, 
59.27 	"landing area" means that part of a privately owned public use airport properly cleared, 
59.28 	regularly maintained, and made available to the public for use by aircraft and includes 
59.29 	runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. 
59.30 	A landing area also includes land underlying both the primary surface and the approach 
59.31 	surfaces that comply with all of the following:
59.32 	(i) the land is properly cleared and regularly maintained for the primary purposes of 
59.33 	the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 
59.34 	facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
59.35 	(ii) the land is part of the airport property; and
59.36 	(iii) the land is not used for commercial or residential purposes.
60.1 	The land contained in a landing area under this paragraph must be described and certified 
60.2 	by the commissioner of transportation. The certification is effective until it is modified, 
60.3 	or until the airport or landing area no longer meets the requirements of this paragraph. 
60.4 	For purposes of this paragraph, "public access area" means property used as an aircraft 
60.5 	parking ramp, apron, or storage hangar, or an arrival and departure building in connection 
60.6 	with the airport.
60.7 	(m) Class 2e consists of land with a commercial aggregate deposit that is not actively 
60.8 	being mined and is not otherwise classified as class 2a or 2b, provided that the land is not 
60.9 	located in a county that has elected to opt-out of the aggregate preservation program as 
60.10 	provided in section 273.1115, subdivision 6. It has a class rate of one percent of market 
60.11 	value. To qualify for classification under this paragraph, the property must be at least 
60.12 	ten contiguous acres in size and the owner of the property must record with the county 
60.13 	recorder of the county in which the property is located an affidavit containing:
60.14 	(1) a legal description of the property;
60.15 	(2) a disclosure that the property contains a commercial aggregate deposit that is not 
60.16 	actively being mined but is present on the entire parcel enrolled;
60.17 	(3) documentation that the conditional use under the county or local zoning 
60.18 	ordinance of this property is for mining; and
60.19 	(4) documentation that a permit has been issued by the local unit of government 
60.20 	or the mining activity is allowed under local ordinance. The disclosure must include a 
60.21 	statement from a registered professional geologist, engineer, or soil scientist delineating 
60.22 	the deposit and certifying that it is a commercial aggregate deposit.
60.23 	For purposes of this section and section 273.1115, "commercial aggregate deposit" 
60.24 	means a deposit that will yield crushed stone or sand and gravel that is suitable for use 
60.25 	as a construction aggregate; and "actively mined" means the removal of top soil and 
60.26 	overburden in preparation for excavation or excavation of a commercial deposit.
60.27 	(n) When any portion of the property under this subdivision or subdivision 22 begins 
60.28 	to be actively mined, the owner must file a supplemental affidavit within 60 days from 
60.29 	the day any aggregate is removed stating the number of acres of the property that is 
60.30 	actively being mined. The acres actively being mined must be (1) valued and classified 
60.31 	under subdivision 24 in the next subsequent assessment year, and (2) removed from the 
60.32 	aggregate resource preservation property tax program under section 273.1115, if the 
60.33 	land was enrolled in that program. Copies of the original affidavit and all supplemental 
60.34 	affidavits must be filed with the county assessor, the local zoning administrator, and the 
60.35 	Department of Natural Resources, Division of Land and Minerals. A supplemental 
60.36 	affidavit must be filed each time a subsequent portion of the property is actively mined, 
61.1 	provided that the minimum acreage change is five acres, even if the actual mining activity 
61.2 	constitutes less than five acres.
61.3 	(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are 
61.4 	not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions 
61.5 	in section 14.386 concerning exempt rules do not apply.

61.6 	EFFECTIVE DATE. This section is effective for property taxes payable in 2012 
61.7 	and thereafter.

61.8 	Sec. 7. Minnesota Statutes 2010, section 273.13, subdivision 25, is amended to read:
61.9 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more 
61.10 	units and used or held for use by the owner or by the tenants or lessees of the owner 
61.11 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
61.12 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
61.13 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
61.14 	purposes, without regard to whether the property has been platted or subdivided. The 
61.15 	market value of class 4a property has a class rate of 1.25 percent.
61.16 	(b) Class 4b includes:
61.17 	(1) residential real estate containing less than four units that does not qualify as class 
61.18 	4bb, other than seasonal residential recreational property;
61.19 	(2) manufactured homes not classified under any other provision;
61.20 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
61.21 	farm classified under subdivision 23, paragraph (b) containing two or three units; and
61.22 	(4) unimproved property that is classified residential as determined under subdivision 
61.23 	33.
61.24 	The market value of class 4b property has a class rate of 1.25 percent.
61.25 	(c) Class 4bb includes:
61.26 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
61.27 	residential recreational property; and
61.28 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
61.29 	nonhomestead farm classified under subdivision 23, paragraph (b).
61.30 	Class 4bb property has the same class rates as class 1a property under subdivision 22.
61.31 	Property that has been classified as seasonal residential recreational property at 
61.32 	any time during which it has been owned by the current owner or spouse of the current 
61.33 	owner does not qualify for class 4bb.
61.34 	(d) Class 4c property includes:
62.1 	(1) except as provided in subdivision 22, paragraph (c), real and personal property 
62.2 	devoted to commercial temporary and seasonal residential occupancy for recreation 
62.3 	purposes, including real and personal property devoted to temporary and seasonal 
62.4 	residential occupancy for recreation purposes and not devoted to commercial purposes for 
62.5 	not more than 250 days in the year preceding the year of assessment. For purposes of this 
62.6 	clause, property is devoted to a commercial purpose on a specific day if any portion of the 
62.7 	property is used for residential occupancy, and a fee is charged for residential occupancy. 
62.8 	Class 4c property under this clause must contain three or more rental units. A "rental unit" 
62.9 	is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site 
62.10 	equipped with water and electrical hookups for recreational vehicles. Class 4c property 
62.11 	under this clause must provide recreational activities such as renting ice fishing houses, 
62.12 	boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina 
62.13 	services, launch services, or guide services; or sell bait and fishing tackle. A camping pad 
62.14 	offered for rent by a property that otherwise qualifies for class 4c under this clause is also 
62.15 	class 4c under this clause regardless of the term of the rental agreement, as long as the use 
62.16 	of the camping pad does not exceed 250 days. In order for a property to be classified as 
62.17 	class 4c, seasonal residential recreational for commercial purposes under this clause, either 
62.18 	(i) the business located on the property must provide recreational activities, at least 40 
62.19 	percent of the annual gross lodging receipts related to the property must be from business 
62.20 	conducted during 90 consecutive days,  and either (i) (A) at least 60 percent of all paid 
62.21 	bookings by lodging guests during the year must be for periods of at least two consecutive 
62.22 	nights; or (ii) (B) at least 20 percent of the annual gross receipts must be from charges 
62.23 	for rental of fish houses, boats and motors, snowmobiles, downhill or cross-country ski 
62.24 	equipment, or charges for marina services, launch services, and guide services, or the sale 
62.25 	of bait and fishing tackle providing recreational activities, or (ii) the business must contain 
62.26 	20 or fewer rental units, and must be located in a township or a city with a population of 
62.27 	2,500 or less located outside the metropolitan area, as defined under section 473.121, 
62.28 	subdivision 2, that contains a portion of a state trail administered by the Department of 
62.29 	Natural Resources. For purposes of this determination item (i)(A), a paid booking of 
62.30 	five or more nights shall be counted as two bookings. Class 4c property classified under 
62.31 	this clause also includes commercial use real property used exclusively for recreational 
62.32 	purposes in conjunction with other class 4c property classified under this clause and 
62.33 	devoted to temporary and seasonal residential occupancy for recreational purposes, up to a 
62.34 	total of two acres, provided the property is not devoted to commercial recreational use for 
62.35 	more than 250 days in the year preceding the year of assessment and is located within two 
62.36 	miles of the class 4c property with which it is used. Owners of real and personal property 
63.1 	devoted to temporary and seasonal residential occupancy for recreation purposes and all 
63.2 	or a portion of which was devoted to commercial purposes for not more than 250 days in 
63.3 	the year preceding the year of assessment desiring classification as class 4c, In order for a 
63.4 	property to qualify for classification under this clause, the owner must submit a declaration 
63.5 	to the assessor designating the cabins or units occupied for 250 days or less in the year 
63.6 	preceding the year of assessment by January 15 of the assessment year. Those cabins or 
63.7 	units and a proportionate share of the land on which they are located must be designated 
63.8 	class 4c under this clause as otherwise provided. The remainder of the cabins or units and 
63.9 	a proportionate share of the land on which they are located will be designated as class 3a. 
63.10 	The owner of property desiring designation as class 4c property under this clause must 
63.11 	provide guest registers or other records demonstrating that the units for which class 4c 
63.12 	designation is sought were not occupied for more than 250 days in the year preceding the 
63.13 	assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, 
63.14 	(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility 
63.15 	operated on a commercial basis not directly related to temporary and seasonal residential 
63.16 	occupancy for recreation purposes does not qualify for class 4c. For the purposes of this 
63.17 	paragraph, "recreational activities" means renting ice fishing houses, boats and motors, 
63.18 	snowmobiles, downhill or cross-country ski equipment; providing marina services, launch 
63.19 	services, or guide services; or selling bait and fishing tackle;
63.20 	(2) qualified property used as a golf course if:
63.21 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
63.22 	dues, but a membership fee may not be required in order to use the property for golfing, 
63.23 	and its green fees for golfing must be comparable to green fees typically charged by 
63.24 	municipal courses; and
63.25 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
63.26 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
63.27 	with the golf course is classified as class 3a property;
63.28 	(3) real property up to a maximum of three acres of land owned and used by a 
63.29 	nonprofit community service oriented organization and not used for residential purposes 
63.30 	on either a temporary or permanent basis, provided that:
63.31 	(i) the property is not used for a revenue-producing activity for more than six days 
63.32 	in the calendar year preceding the year of assessment; or
63.33 	(ii) the organization makes annual charitable contributions and donations at least 
63.34 	equal to the property's previous year's property taxes and the property is allowed to be 
63.35 	used for public and community meetings or events for no charge, as appropriate to the 
63.36 	size of the facility.
64.1 	For purposes of this clause,
64.2 	(A) "charitable contributions and donations" has the same meaning as lawful 
64.3 	gambling purposes under section 349.12, subdivision 25, excluding those purposes 
64.4 	relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
64.5 	(B) "property taxes" excludes the state general tax;
64.6 	(C) a "nonprofit community service oriented organization" means any corporation, 
64.7 	society, association, foundation, or institution organized and operated exclusively for 
64.8 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
64.9 	federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 
64.10 	Revenue Code; and
64.11 	(D) "revenue-producing activities" shall include but not be limited to property or that 
64.12 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
64.13 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
64.14 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
64.15 	insurance business, or office or other space leased or rented to a lessee who conducts a 
64.16 	for-profit enterprise on the premises.
64.17 	Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use 
64.18 	of the property for social events open exclusively to members and their guests for periods 
64.19 	of less than 24 hours, when an admission is not charged nor any revenues are received by 
64.20 	the organization shall not be considered a revenue-producing activity.
64.21 	The organization shall maintain records of its charitable contributions and donations 
64.22 	and of public meetings and events held on the property and make them available upon 
64.23 	request any time to the assessor to ensure eligibility. An organization meeting the 
64.24 	requirement under item (ii) must file an application by May 1 with the assessor for 
64.25 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
64.26 	application form and instructions;
64.27 	(4) postsecondary student housing of not more than one acre of land that is owned by 
64.28 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
64.29 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
64.30 	miles of the border of a college campus;
64.31 	(5) (i) manufactured home parks as defined in section 327.14, subdivision 3, 
64.32 	excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii) 
64.33 	manufactured home parks as defined in section 327.14, subdivision 3, that are described in 
64.34 	section 273.124, subdivision 3a;
65.1 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
65.2 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
65.3 	and is located within the metropolitan area as defined in section 473.121, subdivision 2;
65.4 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
65.5 	under section 272.01, subdivision 2, and the land on which it is located, provided that:
65.6 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
65.7 	Airports Commission, or group thereof; and
65.8 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
65.9 	leased premise, prohibits commercial activity performed at the hangar.
65.10 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
65.11 	be filed by the new owner with the assessor of the county where the property is located 
65.12 	within 60 days of the sale;
65.13 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
65.14 	section 272.01, subdivision 2, and the land on which it is located, provided that:
65.15 	(i) the land abuts a public airport; and
65.16 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
65.17 	agreement restricting the use of the premises, prohibiting commercial use or activity 
65.18 	performed at the hangar; and
65.19 	(9) residential real estate, a portion of which is used by the owner for homestead 
65.20 	purposes, and that is also a place of lodging, if all of the following criteria are met:
65.21 	(i) rooms are provided for rent to transient guests that generally stay for periods 
65.22 	of 14 or fewer days;
65.23 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
65.24 	in the basic room rate;
65.25 	(iii) meals are not provided to the general public except for special events on fewer 
65.26 	than seven days in the calendar year preceding the year of the assessment; and
65.27 	(iv) the owner is the operator of the property.
65.28 	The market value subject to the 4c classification under this clause is limited to five rental 
65.29 	units. Any rental units on the property in excess of five, must be valued and assessed as 
65.30 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
65.31 	be classified as class 1a property under subdivision 22;
65.32 	(10) real property up to a maximum of three acres and operated as a restaurant 
65.33 	as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 
65.34 	as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 
65.35 	is either devoted to commercial purposes for not more than 250 consecutive days, or 
65.36 	receives at least 60 percent of its annual gross receipts from business conducted during 
66.1 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
66.2 	included in determining the property's qualification under subitem (B). The property's 
66.3 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
66.4 	sales located on the premises must be excluded. Owners of real property desiring 4c 
66.5 	classification under this clause must submit an annual declaration to the assessor by 
66.6 	February 1 of the current assessment year, based on the property's relevant information for 
66.7 	the preceding assessment year; and
66.8 	(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used 
66.9 	as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to 
66.10 	the public and devoted to recreational use for marina services. The marina owner must 
66.11 	annually provide evidence to the assessor that it provides services, including lake or river 
66.12 	access to the public by means of an access ramp or other facility that is either located on 
66.13 	the property of the marina or at a publicly owned site that abuts the property of the marina. 
66.14 	No more than 800 feet of lakeshore may be included in this classification. Buildings used 
66.15 	in conjunction with a marina for marina services, including but not limited to buildings 
66.16 	used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing 
66.17 	tackle, are classified as class 3a property; and
66.18 	(12) real and personal property devoted to noncommercial temporary and seasonal 
66.19 	residential occupancy for recreation purposes.
66.20 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) 
66.21 	each parcel of noncommercial seasonal residential recreational property not used for 
66.22 	commercial purposes under clause (12)  has the same class rates as class 4bb property, (ii) 
66.23 	manufactured home parks assessed under clause (5), item (i), have the same class rate 
66.24 	as class 4b property, and the market value of manufactured home parks assessed under 
66.25 	clause (5), item (ii), has the same class rate as class 4d property if more than 50 percent 
66.26 	of the lots in the park are occupied by shareholders in the cooperative corporation or 
66.27 	association and a class rate of one percent if 50 percent or less of the lots are so occupied, 
66.28 	(iii) commercial-use seasonal residential recreational property and marina recreational 
66.29 	land as described in clause (11), has a class rate of one percent for the first $500,000 of 
66.30 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
66.31 	property described in clause (4) has a class rate of one percent, (v) the market value of 
66.32 	property described in clauses (2), (6), and (10) has a class rate of 1.25 percent, and (vi) 
66.33 	that portion of the market value of property in clause (9) qualifying for class 4c property 
66.34 	has a class rate of 1.25 percent.
66.35 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
66.36 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
67.1 	of the units in the building qualify as low-income rental housing units as certified under 
67.2 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
67.3 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
67.4 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
67.5 	land as the qualifying low-income rental housing units are to the total units in the building. 
67.6 	For all properties qualifying as class 4d, the market value determined by the assessor must 
67.7 	be based on the normal approach to value using normal unrestricted rents.
67.8 	Class 4d property has a class rate of 0.75 percent.

67.9 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
67.10 	thereafter.

67.11 	Sec. 8. Minnesota Statutes 2010, section 273.13, subdivision 34, is amended to read:
67.12 		Subd. 34.Homestead of disabled veteran or family caregiver. (a) All or a portion 
67.13 	of the market value of property owned by a veteran or by the veteran and theand serving 
67.14 	as the veteran's spouse qualifying for homestead classification under subdivision 22 or 
67.15 	23 under this section is excluded in determining the property's taxable market value if 
67.16 	it serves as the homestead of a military veteran, as defined in section 197.447, who has 
67.17 	a service-connected disability of 70 percent or more as certified by the United States 
67.18 	Department of Veterans Affairs. To qualify for exclusion under this subdivision, the 
67.19 	veteran must have been honorably discharged from the United States armed forces, as 
67.20 	indicated by United States Government Form DD214 or other official military discharge 
67.21 	papers, and must be certified by the United States Veterans Administration as having a 
67.22 	service-connected disability.
67.23 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is 
67.24 	excluded, except as provided in clause (2); and
67.25 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
67.26 	excluded.
67.27 	(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), 
67.28 	clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the 
67.29 	spouse holds the legal or beneficial title to the homestead and permanently resides there, 
67.30 	the exclusion shall carry over to the benefit of the veteran's spouse for one additional 
67.31 	assessment year the current taxes payable year and for five additional taxes payable years
67.32 	or until such time as the spouse remarries, or sells, transfers, or otherwise disposes of the 
67.33 	property, whichever comes first. Qualification under this paragraph requires an annual 
67.34 	application under paragraph (h).
68.1 	(d) If the spouse of a member of any branch or unit of the United States armed 
68.2 	forces who dies due to a service-connected cause while serving honorably in active 
68.3 	service, as indicated on United States Government Form DD1300 or DD2064, holds 
68.4 	the legal or beneficial title to a homestead and permanently resides there, the spouse is 
68.5 	entitled to the benefit described in paragraph (b), clause (2), for five taxes payable years, 
68.6 	or until such time as the spouse remarries or sells, transfers, or otherwise disposes of the 
68.7 	property, whichever comes first.
68.8 	(e) If a veteran meets the disability criteria of paragraph (a) but does not own 
68.9 	property classified as homestead in the state of Minnesota, then the homestead of the 
68.10 	veteran's primary family caregiver, if any, is eligible for the exclusion that the veteran 
68.11 	would otherwise qualify for under paragraph (b).
68.12 	(d) (f) In the case of an agricultural homestead, only the portion of the property 
68.13 	consisting of the house and garage and immediately surrounding one acre of land qualifies 
68.14 	for the valuation exclusion under this subdivision.
68.15 	(e) (g) A property qualifying for a valuation exclusion under this subdivision is not 
68.16 	eligible for the credit under section 273.1384, subdivision 1 market value exclusion under 
68.17 	subdivision 35, or classification under subdivision 22, paragraph (b).
68.18 	(f) (h) To qualify for a valuation exclusion under this subdivision a property owner 
68.19 	must apply to the assessor by July 1 of each assessment year, except that an annual 
68.20 	reapplication is not required once a property has been accepted for a valuation exclusion 
68.21 	under paragraph (a) and qualifies for the benefit described in paragraph (b), clause (2), and 
68.22 	the property continues to qualify until there is a change in ownership. For an application 
68.23 	received after July 1 of any calendar year, the exclusion shall become effective for the 
68.24 	following assessment year.
68.25 	(i) A first-time application by a qualifying spouse for the market value exclusion 
68.26 	under paragraph (d) must be made any time within two years of the death of the service 
68.27 	member.
68.28 	(j) For purposes of this subdivision:
68.29 	(1) "active service" has the meaning given in section 190.05;
68.30 	(2) "own" means that the person's name is present as an owner on the property deed;
68.31 	(3) "primary family caregiver" means a person who is approved by the secretary of 
68.32 	the United States Department of Veterans Affairs for assistance as the primary provider 
68.33 	of personal care services for an eligible veteran under the Program of Comprehensive 
68.34 	Assistance for Family Caregivers, codified as United States Code, title 38, section 1720G; 
68.35 	and
68.36 	(4) "veteran" has the meaning given the term in section 197.447.
69.1 	(k) The purpose of this provision of law providing a level of homestead property tax 
69.2 	relief for gravely disabled veterans, their primary family caregivers, and their surviving 
69.3 	spouses is to help ease the burdens of war for those among our state's citizens who bear 
69.4 	those burdens most heavily.

69.5 	EFFECTIVE DATE. (a) This section is effective for taxes payable in 2012 and 
69.6 	thereafter, and applies to homesteads that initially qualified for the exclusion for taxes 
69.7 	payable in 2009 and thereafter.
69.8 	(b) Notwithstanding the deadline contained in paragraph (h), applications for a 
69.9 	market value exclusion under paragraph (c) must be received prior to August 16, 2011, 
69.10 	to be eligible for an exclusion for taxes payable in 2012.
69.11 	(c) A qualifier under paragraph (c) that would have been eligible for a market value 
69.12 	exclusion under this section for taxes payable in 2011, if the change under this section had 
69.13 	been effective for that year, shall be eligible to receive the benefit of the exclusion for the 
69.14 	remaining number of total taxes payable years provided under paragraph (c).

69.15 	Sec. 9. Minnesota Statutes 2010, section 275.025, subdivision 3, is amended to read:
69.16 		Subd. 3.Seasonal residential recreational tax capacity. For the purposes of this 
69.17 	section, "seasonal residential recreational tax capacity" means the tax capacity of tier III 
69.18 	of class 1c under section 273.13, subdivision 22, and all class 4c(1) and, 4c(3)(ii), and 
69.19 	4c(12) property under section 273.13, subdivision 25, except that the first $76,000 of 
69.20 	market value of each noncommercial class 4c(1) 4c(12) property has a tax capacity for this 
69.21 	purpose equal to 40 percent of its tax capacity under section 273.13.

69.22 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
69.23 	thereafter.

69.24 	Sec. 10. [275.761] MAINTENANCE OF EFFORT REQUIREMENTS 
69.25 	REDUCED.
69.26 	(a) Notwithstanding any law to the contrary and except as provided in paragraphs (b) 
69.27 	and (c), the amounts required to be expended under the maintenance of effort requirements 
69.28 	for counties under sections 134.34, 245.4835, 256F.10, and 256F.13, are reduced to 90 
69.29 	percent of the amounts required for 2011.
69.30 	(b) This section does not permit a county to reduce compliance with maintenance of 
69.31 	effort requirements to the extent that the reduction would:
69.32 	(1) require the state to expend additional money or incur additional costs; or
69.33 	(2) cause a reduction in the receipt by the state or the county of federal funds.
70.1 	(c) The commissioner of management and budget may determine the maintenance 
70.2 	of effort requirements that are not permitted, in whole or in part, to be reduced under 
70.3 	paragraph (b). The commissioner shall publish these determinations on the department's 
70.4 	Web site and no county may reduce compliance with a maintenance of effort requirement 
70.5 	that the commissioner determines is not subject to reduction.
70.6 	(d) Notwithstanding any law to the contrary, the amounts required to be expended 
70.7 	under the maintenance of effort requirements for all statutory and home rule charter cities 
70.8 	under section 134.34 are reduced to 90 percent of the amounts required for 2011.

70.9 	EFFECTIVE DATE. This section is effective for maintenance of effort 
70.10 	requirements in 2012 and thereafter.

70.11 	Sec. 11. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by 
70.12 	Laws 1996, chapter 471, article 7, section 22, Laws 1997, chapter 231, article 10, section 
70.13 	13, Laws 2002, chapter 377, article 7, section 6, Laws 2008, chapter 154, article 9, section 
70.14 	19, and Laws 2010, chapter 216, section 46, is amended to read:
70.15 		Subdivision 1.Creation of projects. (a) An authority may create a housing 
70.16 	replacement project under sections 44 to 47, as provided in this section.
70.17 	(b) For the cities of Crystal, Fridley, Richfield, Columbia Heights, and Brooklyn 
70.18 	Park, the authority may designate up to 100 parcels in the city to be included in a housing 
70.19 	replacement district over the life of a district or districts. For the cities of St. Paul and 
70.20 	Duluth, each authority may designate not more than 200 parcels in the city to be included 
70.21 	in a housing replacement district over the life of the district. For the city of Minneapolis, 
70.22 	the authority may designate not more than 500 parcels in the city to be included in housing 
70.23 	replacement districts over the life of the districts. The authority may designate up to 
70.24 	200 additional parcels, on a onetime basis, within the area of the city of Minneapolis 
70.25 	designated by the Presidential declaration of major disaster FEMA-1990-DR. The only 
70.26 	parcels that may be included in a district are (1) vacant sites, (2) parcels containing vacant 
70.27 	houses, or (3) parcels containing houses that are structurally substandard, as defined in 
70.28 	Minnesota Statutes, section 469.174, subdivision 10.
70.29 	(c) The city in which the authority is located must pay at least 25 percent of the 
70.30 	housing replacement project costs from its general fund, a property tax levy, or other 
70.31 	unrestricted money, not including tax increments.
70.32 	(d) The housing replacement district plan must have as its sole object the acquisition 
70.33 	of parcels for the purpose of preparing the site to be sold for market rate housing. As 
70.34 	used in this section, "market rate housing" means housing that has a market value that 
71.1 	does not exceed 150 percent of the average market value of single-family housing in that 
71.2 	municipality.

71.3 	EFFECTIVE DATE. This section is effective upon local approval and compliance 
71.4 	by the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3.

71.5 	Sec. 12. CITY OF MINNEAPOLIS; TAX INCREMENT FINANCING.
 71.6 	(a) Notwithstanding the provisions of Minnesota Statutes, section 469.176 or 
71.7 	469.1763, or any other law to the contrary, a development authority of the city of 
71.8 	Minneapolis may spend or contractually commit tax increment revenues, generated from 
71.9 	any tax increment district located anywhere within the city, within the area of the city 
71.10 	designated by the Presidential declaration of major disaster FEMA-1990-DR within the 
71.11 	36-month period beginning on the date of the declaration of the disaster. 
71.12 	(b) The authority to spend tax increments under this section is limited to one or 
71.13 	more of the following purposes:
71.14 	(1) to provide improvements, loans, interest rate subsidies, or assistance in any 
71.15 	form to private individuals and businesses to undertake the reconstruction or substantial 
71.16 	rehabilitation of residential or commercial buildings and ancillary facilities, damaged as a 
71.17 	result of the disaster; and
71.18 	(2) to pay or finance costs of the authority relating to the recovery of properties 
71.19 	within the disaster area, including, but not limited to, acquisition, demolition, site 
71.20 	improvements, and related administrative costs permitted under Minnesota Statutes, 
71.21 	section 469.176, subdivision 3.
71.22 	(c) Expenditures made under this section are considered to be expenditures for 
71.23 	activities within the district. An authority may undertake actions provided in this section 
71.24 	only after approval by the city of a written spending plan that specifically authorizes the 
71.25 	authority to take the actions. Before approving the spending plan, the city shall hold a 
71.26 	public hearing after publishing notice in a newspaper of general circulation in the city at 
71.27 	least once, not less than ten days nor more than 30 days prior to the date of the hearing.
71.28 	(d) For purposes of this section, "development authority" or "authority" has the 
71.29 	meaning given in Minnesota Statutes, section 469.174, subdivision 2, and includes the 
71.30 	city of Minneapolis.

71.31 	EFFECTIVE DATE. This section is effective upon local approval and compliance 
71.32 	by the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3.

72.1 	Sec. 13. PROPERTY TAX RELIEF FOR HOMES DAMAGED BY MAY 22, 
72.2 	2011 TORNADOES.
 72.3 		Subdivision 1.Abatement authorization. Notwithstanding Minnesota Statutes, 
72.4 	section 375.192, the county boards of Anoka County and Hennepin County may grant 
72.5 	an abatement of net tax for taxes payable in 2011 for homestead property located within 
72.6 	the area covered by Presidential Disaster Declaration FEMA-1990-DR or added later by 
72.7 	federal government actions, provided that:
72.8 	(1) the property was found to have sustained a loss in value under the reassessment 
72.9 	required under Minnesota Statutes, section 273.1232;
72.10 	(2) the property's loss in value was not of sufficient magnitude to allow it to qualify 
72.11 	for the abatement authorized under Minnesota Statutes, section 273.1233; and
72.12 	(3) the owner submits a written application to the county assessor within 60 days 
72.13 	of the effective date of this act.
72.14 		Subd. 2.Abatement limit. The abatement under this section is subject to the 
72.15 	limitation under Minnesota Statutes, section 273.1233, subdivision 2, paragraph (a).
72.16 		Subd. 3.Refund required if taxes already paid. If application is made after 
72.17 	payment of all or a portion of the taxes being abated, the portion already paid shall be 
72.18 	refunded to the taxpayer by the county treasurer as soon as practical.
72.19 		Subd. 4.Reimbursement. The county auditor shall certify the abatements granted 
72.20 	under this section to the commissioner of revenue for reimbursement to each taxing 
72.21 	jurisdiction in which the damaged property is located. The commissioner shall make the 
72.22 	payments to the taxing jurisdictions containing the property, other than school districts, at 
72.23 	the time distributions are made under Minnesota Statutes, section 473H.10, subdivision 
72.24 	3. Reimbursements to school districts shall be made as provided in Minnesota Statutes, 
72.25 	section 273.1392.
72.26 		Subd. 5.Ineligibility for credit in following year. Any property which applies for 
72.27 	and is granted an abatement for taxes payable in 2011 under this section is not eligible 
72.28 	for the credits provided under Minnesota Statutes, sections 273.1234 and 273.1235, for 
72.29 	taxes payable in 2012.
72.30 		Subd. 6.Appropriation. The amount necessary to make the payments required 
72.31 	under subdivision 4 is appropriated to the commissioner of revenue from the general 
72.32 	fund in fiscal year 2012.

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

73.1 	ARTICLE 6
73.2 	AIDS, CREDITS, PAYMENTS, AND REFUNDS

73.3 	Section 1. Minnesota Statutes 2010, section 97A.061, subdivision 1, is amended to 
73.4 	read:
73.5 		Subdivision 1.Applicability; amount. (a) The commissioner shall annually make a 
73.6 	payment to each county having public hunting areas and game refuges. Money to make 
73.7 	the payments is annually appropriated for that purpose from the general fund. Except as 
73.8 	provided in paragraph (b), this section does not apply to state trust fund land and other 
73.9 	state land not purchased for game refuge or public hunting purposes. Except as provided 
73.10 	in paragraph (b), the payment shall be the greatest of:
73.11 	(1) 35 percent of the gross receipts from all special use permits and leases of land 
73.12 	acquired for public hunting and game refuges;
73.13 	(2) 50 cents per acre on land purchased actually used for public hunting or game 
73.14 	refuges; or
73.15 	(3) three-fourths of one percent of the appraised value of purchased land actually 
73.16 	used for public hunting and game refuges.
73.17 	(b) The payment shall be 50 percent of the dollar amount adjusted for inflation as 
73.18 	determined under section 477A.12, subdivision 1, paragraph (a), clause (1), multiplied 
73.19 	by the number of acres of land in the county that are owned by another state agency for 
73.20 	military purposes and designated as a game refuge under section 97A.085.
73.21 	(c) The payment must be reduced by the amount paid under subdivision 3 for 
73.22 	croplands managed for wild geese.
73.23 	(d) The appraised value is the purchase price for five years after acquisition. 
73.24 	The appraised value shall be determined by the county assessor every five years after 
73.25 	acquisition.

73.26 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
73.27 	2011 and thereafter.

73.28 	Sec. 2. Minnesota Statutes 2010, section 126C.01, subdivision 3, is amended to read:
73.29 		Subd. 3.Referendum market value. "Referendum market value" means the market 
73.30 	value of all taxable property, excluding property classified as class 2, noncommercial 
73.31 	4c(1), or 4c(4) under section 273.13. The portion of class 2a property consisting of the 
73.32 	house, garage, and surrounding one acre of land of an agricultural homestead is included 
73.33 	in referendum market value. For the purposes of this subdivision, in the case of class 1a, 
73.34 	1b, or 2a property, "market value" means the value prior to the exclusion under section 
74.1 	273.13, subdivision 35. Any class of property, or any portion of a class of property, that 
74.2 	is included in the definition of referendum market value and that has a class rate of less 
74.3 	than one percent under section 273.13 shall have a referendum market value equal to its 
74.4 	net tax capacity market value times its class rate, multiplied by 100. 

74.5 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
74.6 	thereafter.

74.7 	Sec. 3. Minnesota Statutes 2010, section 273.13, is amended by adding a subdivision 
74.8 	to read:
74.9 		Subd. 35.Homestead market value exclusion. (a) Prior to determining a property's 
74.10 	net tax capacity under this section, property classified as class 1a or 1b under subdivision 
74.11 	22, and the portion of property classified as class 2a under subdivision 23 consisting of 
74.12 	the house, garage, and surrounding one acre of land, shall be eligible for a market value 
74.13 	exclusion as determined under paragraph (b).
74.14 	(b) For a homestead valued at $76,000 or less, the exclusion is 40 percent of market 
74.15 	value. For a homestead valued between $76,000 and $413,800, the exclusion is $30,400 
74.16 	minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or 
74.17 	more, there is no valuation exclusion. The valuation exclusion shall be rounded to the 
74.18 	nearest whole dollar, and may not be less than zero.
74.19 	(c) Any valuation exclusions or adjustments under section 273.11 shall be applied 
74.20 	prior to determining the amount of the valuation exclusion under this subdivision. 
74.21 	(d) In the case of a property that is classified as part homestead and part 
74.22 	nonhomestead, (i) the exclusion shall apply only to the homestead portion of the property, 
74.23 	but (ii) if a portion of a property is classified as nonhomestead solely because not all 
74.24 	the owners occupy the property, not all the owners have qualifying relatives occupying 
74.25 	the property, or solely because not all the spouses of owners occupy the property, the 
74.26 	exclusion amount shall be initially computed as if that nonhomestead portion were also in 
74.27 	the homestead class and then prorated to the owner-occupant's percentage of ownership. 
74.28 	For the purpose of this section, when an owner-occupant's spouse does not occupy the 
74.29 	property, the percentage of ownership for the owner-occupant spouse is one-half of the 
74.30 	couple's ownership percentage.

74.31 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
74.32 	thereafter.

74.33 	Sec. 4. Minnesota Statutes 2010, section 273.1384, subdivision 3, is amended to read:
75.1 		Subd. 3.Credit reimbursements. The county auditor shall determine the tax 
75.2 	reductions allowed under this section subdivision 2 within the county for each taxes 
75.3 	payable year and shall certify that amount to the commissioner of revenue as a part of the 
75.4 	abstracts of tax lists submitted by the county auditors under section 275.29. Any prior 
75.5 	year adjustments shall also be certified on the abstracts of tax lists. The commissioner 
75.6 	shall review the certifications for accuracy, and may make such changes as are deemed 
75.7 	necessary, or return the certification to the county auditor for correction. The credits
75.8 	credit under this section must be used to proportionately reduce the net tax capacity-based 
75.9 	property tax payable to each local taxing jurisdiction as provided in section 273.1393.

75.10 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
75.11 	thereafter.

75.12 	Sec. 5. Minnesota Statutes 2010, section 273.1384, subdivision 4, is amended to read:
75.13 		Subd. 4.Payment. (a) The commissioner of revenue shall reimburse each local 
75.14 	taxing jurisdiction, other than school districts, for the tax reductions granted under this 
75.15 	section subdivision 2 in two equal installments on October 31 and December 26 of the 
75.16 	taxes payable year for which the reductions are granted, including in each payment 
75.17 	the prior year adjustments certified on the abstracts for that taxes payable year. The 
75.18 	reimbursements related to tax increments shall be issued in one installment each year on 
75.19 	December 26.
75.20 	(b) The commissioner of revenue shall certify the total of the tax reductions granted 
75.21 	under this section subdivision 2 for each taxes payable year within each school district to 
75.22 	the commissioner of the Department of Education and the commissioner of education shall 
75.23 	pay the reimbursement amounts to each school district as provided in section 273.1392.

75.24 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
75.25 	thereafter.

75.26 	Sec. 6. Minnesota Statutes 2010, section 273.1393, is amended to read:
75.27 	273.1393 COMPUTATION OF NET PROPERTY TAXES.
75.28 	Notwithstanding any other provisions to the contrary, "net" property taxes are 
75.29 	determined by subtracting the credits in the order listed from the gross tax:
75.30 	(1) disaster credit as provided in sections 273.1231 to 273.1235;
75.31 	(2) powerline credit as provided in section 273.42;
75.32 	(3) agricultural preserves credit as provided in section 473H.10;
75.33 	(4) enterprise zone credit as provided in section 469.171;
76.1 	(5) disparity reduction credit;
76.2 	(6) conservation tax credit as provided in section 273.119;
76.3 	(7) homestead and agricultural credits credit as provided in section 273.1384;
76.4 	(8) taconite homestead credit as provided in section 273.135;
76.5 	(9) supplemental homestead credit as provided in section 273.1391; and
76.6 	(10) the bovine tuberculosis zone credit, as provided in section 273.113.
76.7 	The combination of all property tax credits must not exceed the gross tax amount.

76.8 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
76.9 	thereafter.

76.10 	Sec. 7. Minnesota Statutes 2010, section 276.04, subdivision 2, is amended to read:
76.11 		Subd. 2.Contents of tax statements. (a) The treasurer shall provide for the 
76.12 	printing of the tax statements. The commissioner of revenue shall prescribe the form of 
76.13 	the property tax statement and its contents. The tax statement must not state or imply 
76.14 	that property tax credits are paid by the state of Minnesota. The statement must contain 
76.15 	a tabulated statement of the dollar amount due to each taxing authority and the amount 
76.16 	of the state tax from the parcel of real property for which a particular tax statement is 
76.17 	prepared. The dollar amounts attributable to the county, the state tax, the voter approved 
76.18 	school tax, the other local school tax, the township or municipality, and the total of 
76.19 	the metropolitan special taxing districts as defined in section 275.065, subdivision 3, 
76.20 	paragraph (i), must be separately stated. The amounts due all other special taxing districts, 
76.21 	if any, may be aggregated except that any levies made by the regional rail authorities in the 
76.22 	county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
76.23 	398A shall be listed on a separate line directly under the appropriate county's levy. If the 
76.24 	county levy under this paragraph includes an amount for a lake improvement district as 
76.25 	defined under sections 103B.501 to 103B.581, the amount attributable for that purpose 
76.26 	must be separately stated from the remaining county levy amount. In the case of Ramsey 
76.27 	County, if the county levy under this paragraph includes an amount for public library 
76.28 	service under section 134.07, the amount attributable for that purpose may be separated 
76.29 	from the remaining county levy amount. The amount of the tax on homesteads qualifying 
76.30 	under the senior citizens' property tax deferral program under chapter 290B is the total 
76.31 	amount of property tax before subtraction of the deferred property tax amount. The 
76.32 	amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any, 
76.33 	must also be separately stated. The dollar amounts, including the dollar amount of any 
76.34 	special assessments, may be rounded to the nearest even whole dollar. For purposes of this 
76.35 	section whole odd-numbered dollars may be adjusted to the next higher even-numbered 
77.1 	dollar. The amount of market value excluded under section 273.11, subdivision 16, if any, 
77.2 	must also be listed on the tax statement.
77.3 	(b) The property tax statements for manufactured homes and sectional structures 
77.4 	taxed as personal property shall contain the same information that is required on the 
77.5 	tax statements for real property.
77.6 	(c) Real and personal property tax statements must contain the following information 
77.7 	in the order given in this paragraph. The information must contain the current year tax 
77.8 	information in the right column with the corresponding information for the previous year 
77.9 	in a column on the left:
77.10 	(1) the property's estimated market value under section 273.11, subdivision 1;
77.11 	(2) the property's homestead market value exclusion under section 273.13, 
77.12 	subdivision 35;
77.13 	(2) (3) the property's taxable market value after reductions under section sections
77.14 	273.11, subdivisions 1a and 16, and 273.13, subdivision 35;
77.15 	(3) (4) the property's gross tax, before credits;
77.16 	(4) (5) for homestead residential and agricultural properties, the credits credit  under 
77.17 	section 273.1384;
77.18 	(5) (6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 
77.19 	273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of 
77.20 	credit received under section 273.135 must be separately stated and identified as "taconite 
77.21 	tax relief"; and
77.22 	(6) (7) the net tax payable in the manner required in paragraph (a).
77.23 	(d) If the county uses envelopes for mailing property tax statements and if the county 
77.24 	agrees, a taxing district may include a notice with the property tax statement notifying 
77.25 	taxpayers when the taxing district will begin its budget deliberations for the current 
77.26 	year, and encouraging taxpayers to attend the hearings. If the county allows notices to 
77.27 	be included in the envelope containing the property tax statement, and if more than 
77.28 	one taxing district relative to a given property decides to include a notice with the tax 
77.29 	statement, the county treasurer or auditor must coordinate the process and may combine 
77.30 	the information on a single announcement.

77.31 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
77.32 	thereafter.

77.33 	Sec. 8. Minnesota Statutes 2010, section 290A.03, subdivision 11, is amended to read:
77.34 		Subd. 11.Rent constituting property taxes. "Rent constituting property taxes" 
77.35 	means 19 17 percent of the gross rent actually paid in cash, or its equivalent, or the portion 
78.1 	of rent paid in lieu of property taxes, in any calendar year by a claimant for the right 
78.2 	of occupancy of the claimant's Minnesota homestead in the calendar year, and which 
78.3 	rent constitutes the basis, in the succeeding calendar year of a claim for relief under this 
78.4 	chapter by the claimant.

78.5 	EFFECTIVE DATE. This section is effective for claims based on rent paid in 
78.6 	2011 and following years.

78.7 	Sec. 9. Minnesota Statutes 2010, section 290A.03, subdivision 13, is amended to read:
78.8 		Subd. 13.Property taxes payable. "Property taxes payable" means the property tax 
78.9 	exclusive of special assessments, penalties, and interest payable on a claimant's homestead 
78.10 	after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2, 
78.11 	and any other state paid property tax credits in any calendar year, and after any refund 
78.12 	claimed and allowable under section 290A.04, subdivision 2h, that is first payable in 
78.13 	the year that the property tax is payable. In the case of a claimant who makes ground 
78.14 	lease payments, "property taxes payable" includes the amount of the payments directly 
78.15 	attributable to the property taxes assessed against the parcel on which the house is located. 
78.16 	No apportionment or reduction of the "property taxes payable" shall be required for the 
78.17 	use of a portion of the claimant's homestead for a business purpose if the claimant does not 
78.18 	deduct any business depreciation expenses for the use of a portion of the homestead in the 
78.19 	determination of federal adjusted gross income. For homesteads which are manufactured 
78.20 	homes as defined in section 273.125, subdivision 8, and for homesteads which are park 
78.21 	trailers taxed as manufactured homes under section 168.012, subdivision 9, "property 
78.22 	taxes payable" shall also include 19 17 percent of the gross rent paid in the preceding 
78.23 	year for the site on which the homestead is located. When a homestead is owned by 
78.24 	two or more persons as joint tenants or tenants in common, such tenants shall determine 
78.25 	between them which tenant may claim the property taxes payable on the homestead. If 
78.26 	they are unable to agree, the matter shall be referred to the commissioner of revenue 
78.27 	whose decision shall be final. Property taxes are considered payable in the year prescribed 
78.28 	by law for payment of the taxes.
78.29 	In the case of a claim relating to "property taxes payable," the claimant must have 
78.30 	owned and occupied the homestead on January 2 of the year in which the tax is payable 
78.31 	and (i) the property must have been classified as homestead property pursuant to section 
78.32 	273.124, on or before December 15 of the assessment year to which the "property taxes 
78.33 	payable" relate; or (ii) the claimant must provide documentation from the local assessor 
78.34 	that application for homestead classification has been made on or before December 15 
79.1 	of the year in which the "property taxes payable" were payable and that the assessor has 
79.2 	approved the application.

79.3 	EFFECTIVE DATE. This section is effective for claims based on rent paid in 
79.4 	2011 and following years.

79.5 	Sec. 10. Minnesota Statutes 2010, section 290A.04, subdivision 2, is amended to read:
79.6 		Subd. 2.Homeowners. A claimant whose property taxes payable are in excess 
79.7 	of the percentage of the household income stated below shall pay an amount equal to 
79.8 	the percent of income shown for the appropriate household income level along with the 
79.9 	percent to be paid by the claimant of the remaining amount of property taxes payable. 
79.10 	The state refund equals the amount of property taxes payable that remain, up to the state 
79.11 	refund amount shown below.

79.12
79.13
79.14	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund

79.15	$0 to 1,189
	1.0 percent
	15 percent
	$
	1,850
	
79.16	1,190 to 2,379
	1.1 percent
	15 percent
	$
	1,850
	
79.17	2,380 to 3,589
	1.2 percent
	15 percent
	$
	1,800
	
79.18	3,590 to 4,789
	1.3 percent
	20 percent
	$
	1,800
	
79.19	4,790 to 5,979
	1.4 percent
	20 percent
	$
	1,730
	
79.20	5,980 to 8,369
	1.5 percent
	20 percent
	$
	1,730
	
79.21	8,370 to 9,559
	1.6 percent
	25 percent
	$
	1,670
	
79.22	9,560 to 10,759
	1.7 percent
	25 percent
	$
	1,670
	
79.23	10,760 to 11,949
	1.8 percent
	25 percent
	$
	1,610
	
79.24	11,950 to 13,139
	1.9 percent
	30 percent
	$
	1,610
	
79.25	13,140 to 14,349
	2.0 percent
	30 percent
	$
	1,540
	
79.26	14,350 to 16,739
	2.1 percent
	30 percent
	$
	1,540
	
79.27	16,740 to 17,929
	2.2 percent
	35 percent
	$
	1,480
	
79.28	17,930 to 19,119
	2.3 percent
	35 percent
	$
	1,480
	
79.29	19,120 to 20,319
	2.4 percent
	35 percent
	$
	1,420
	
79.30	20,320 to 25,099
	2.5 percent
	40 percent
	$
	1,420
	
79.31	25,100 to 28,679
	2.6 percent
	40 percent
	$
	1,360
	
79.32	28,680 to 35,849
	2.7 percent
	40 percent
	$
	1,360
	
79.33	35,850 to 41,819
	2.8 percent
	45 percent
	$
	1,240
	
79.34	41,820 to 47,799
	3.0 percent
	45 percent
	$
	1,240
	
79.35	47,800 to 53,779
	3.2 percent
	45 percent
	$
	1,110
	
79.36	53,780 to 59,749
	3.5 percent
	50 percent
	$
	990
	
79.37	59,750 to 65,729
	3.5 percent
	50 percent
	$
	870
	
79.38	65,730 to 69,319
	3.5 percent
	50 percent
	$
	740
	
79.39	69,320 to 71,719
	3.5 percent
	50 percent
	$
	610
	
80.1	71,720 to 74,619
	3.5 percent
	50 percent
	$
	500
	
80.2	74,620 to 77,519
	3.5 percent
	50 percent
	$
	370

80.3
80.4
80.5	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund

80.6	$0 to 1,549
	1.0 percent
	15 percent
	$
	2,460
	
80.7	1,550 to 3,089
	1.1 percent
	15 percent
	$
	2,460
	
80.8	3,090 to 4,669
	1.2 percent
	15 percent
	$
	2,460
	
80.9	4,670 to 6,229
	1.3 percent
	20 percent
	$
	2,460
	
80.10	6,230 to 7,769
	1.4 percent
	20 percent
	$
	2,460
	
80.11	7,770 to 10,879
	1.5 percent
	20 percent
	$
	2,460
	
80.12	10,880 to 12,429
	1.6 percent
	20 percent
	$
	2,460
	
80.13	12,430 to 13,989
	1.7 percent
	20 percent
	$
	2,460
	
80.14	13,990 to 15,539
	1.8 percent
	20 percent
	$
	2,460
	
80.15	15,540 to 17,079
	1.9 percent
	25 percent
	$
	2,460
	
80.16	17,080 to 18,659
	2.0 percent
	25 percent
	$
	2,460
	
80.17	18,660 to 21,759
	2.1 percent
	25 percent
	$
	2,460
	
80.18	21,760 to 23,309
	2.2 percent
	30 percent
	$
	2,460
	
80.19	23,310 to 24,859
	2.3 percent
	30 percent
	$
	2,460
	
80.20	24,860 to 26,419
	2.4 percent
	30 percent
	$
	2,460
	
80.21	26,420 to 32,629
	2.5 percent
	35 percent
	$
	2,460
	
80.22	32,630 to 37,279
	2.6 percent
	35 percent
	$
	2,460
	
80.23	37,280 to 46,609
	2.7 percent
	35 percent
	$
	2,000
	
80.24	46,610 to 54,369
	2.8 percent
	35 percent
	$
	2,000
	
80.25	54,370 to 62,139
	2.8 percent
	40 percent
	$
	1,750
	
80.26	62,140 to 69,909
	3.0 percent
	40 percent
	$
	1,440
	
80.27	69,910 to 77,679
	3.0 percent
	40 percent
	$
	1,290
	
80.28	77,680 to 85,449
	3.0 percent
	40 percent
	$
	1,130
	
80.29	85,450 to 90,119
	3.5 percent
	45 percent
	$
	960
	
80.30	90,120 to 93,239
	3.5 percent
	45 percent
	$
	790
	
80.31	93,240 to 97,009
	3.5 percent
	50 percent
	$
	650
	
80.32	97,010 to 100,779
	3.5 percent
	50 percent
	$
	480
	
80.33 	The payment made to a claimant shall be the amount of the state refund calculated 
80.34 	under this subdivision. No payment is allowed if the claimant's household income is 
80.35 	$77,520 $100,780 or more.

80.36 	EFFECTIVE DATE. This section is effective beginning with refunds based on 
80.37 	taxes payable in 2012.

80.38 	Sec. 11. Minnesota Statutes 2010, section 290A.04, subdivision 4, is amended to read:
81.1 		Subd. 4.Inflation adjustment. (a) Beginning for property tax refunds payable in 
81.2 	calendar year 2002, the commissioner shall annually adjust the dollar amounts of the 
81.3 	income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation. 
81.4 	The commissioner shall make the inflation adjustments in accordance with section 1(f) of 
81.5 	the Internal Revenue Code, except that for purposes of this subdivision the percentage 
81.6 	increase shall be determined as provided in this subdivision.
81.7 	(b) In adjusting the dollar amounts of the income thresholds and the maximum 
81.8 	refunds under subdivision 2 for inflation, the percentage increase shall be determined from 
81.9 	the year ending on June 30, 2011, to the year ending on June 30 of the year preceding that 
81.10 	in which the refund is payable.
81.11 	(c) In adjusting the dollar amounts of the income thresholds and the maximum 
81.12 	refunds under subdivision 2a for inflation, the percentage increase shall be determined 
81.13 	from the year ending on June 30, 2000, to the year ending on June 30 of the year preceding 
81.14 	that in which the refund is payable. 
81.15 	(d) The commissioner shall use the appropriate percentage increase to annually 
81.16 	adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for 
81.17 	inflation without regard to whether or not the income tax brackets are adjusted for inflation 
81.18 	in that year. The commissioner shall round the thresholds and the maximum amounts, 
81.19 	as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall 
81.20 	round it up to the next $10 amount.
81.21 	(e) The commissioner shall annually announce the adjusted refund schedule at the 
81.22 	same time provided under section 290.06. The determination of the commissioner under 
81.23 	this subdivision is not a rule under the Administrative Procedure Act.

81.24 	EFFECTIVE DATE. This section is effective beginning for refunds based on 
81.25 	taxes payable in 2013.

81.26 	Sec. 12. Minnesota Statutes 2010, section 290C.07, is amended to read:
81.27 	290C.07 CALCULATION OF INCENTIVE PAYMENT.
81.28 	(a) An approved claimant under the sustainable forest incentive program is eligible 
81.29 	to receive an annual payment. The payment shall equal the greater of:
81.30 	(1) the difference between the property tax that would be paid on the land using the 
81.31 	previous year's statewide average total township tax rate and a class rate of one percent, if 
81.32 	the land were valued at (i) the average statewide managed forest land market value per 
81.33 	acre calculated under section 290C.06, and (ii) the average statewide managed forest land 
81.34 	current use value per acre calculated under section 290C.02, subdivision 5; or
82.1 	(2) two-thirds of the property tax amount determined by using the previous year's 
82.2 	statewide average total township tax rate, the estimated market value per acre as calculated 
82.3 	in section 290C.06, and a class rate of one percent, provided that the payment shall be no 
82.4 	less than $7 per acre for each acre enrolled in the sustainable forest incentive program.
82.5 	(b) The annual payment for each Social Security number or state or federal business 
82.6 	tax identification number must not exceed $100,000.

82.7 	EFFECTIVE DATE. This section is effective beginning for payments in calendar 
82.8 	year 2011. A claimant whose calendar year 2011 payment is limited by paragraph (b) or 
82.9 	whose calendar year 2010 payment was limited by Laws 2010, First Special Session 
82.10 	chapter 1, article 13, section 4, subdivision 3, may elect, through December 31, 2011, to 
82.11 	terminate participation in the sustainable forest incentive program and to terminate its 
82.12 	covenant under the program without regard to the limitations under Minnesota Statutes, 
82.13 	section 290C.055. The commissioner of revenue shall issue a document to each claimant 
82.14 	so electing releasing the land from the covenant as provided in Minnesota Statutes, section 
82.15 	290C.04, paragraph (c), effective retroactive to the date of the election, provided that if 
82.16 	the claimant certified to the commissioner under Minnesota Statutes, section 290C.05, its 
82.17 	participation in the program for calendar year 2011, the release is effective on December 
82.18 	31, 2011.

82.19 	Sec. 13. [373.51] ALTERNATIVE PROCESS FOR CONSOLIDATION.
82.20 	Notwithstanding the provisions relating to petitions in sections 371.02 and 371.03, 
82.21 	two or more counties may begin the process for consolidation by filing with the secretary 
82.22 	of state a resolution unanimously adopted by the board of each affected county to seek 
82.23 	voter approval for consolidation of the counties following the procedures in chapter 371. 

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

82.25 	Sec. 14. Minnesota Statutes 2010, section 477A.011, subdivision 20, is amended to 
82.26 	read:
82.27 		Subd. 20.City net tax capacity. "City net tax capacity" means (1) the net tax 
82.28 	capacity computed using the net tax capacity rates in section 273.13 for taxes payable 
82.29 	in the year of the aid distribution, and the market values, after the exclusion in section 
82.30 	273.13, subdivision 35, for taxes payable in the year prior to the aid distribution plus (2) 
82.31 	a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2, 
82.32 	paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior 
82.33 	to that for which aids are being calculated. The market value utilized in computing city 
83.1 	net tax capacity shall be reduced by the sum of (1) a city's market value of commercial 
83.2 	industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3, 
83.3 	multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph 
83.4 	(a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value 
83.5 	of tax increment financing districts as defined in section 469.177, subdivision 2, and (3) 
83.6 	the market value of transmission lines deducted from a city's total net tax capacity under 
83.7 	section 273.425. The city net tax capacity will be computed using equalized market values. 

83.8 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
83.9 	2013 and thereafter.

83.10 	Sec. 15. Minnesota Statutes 2010, section 477A.0124, is amended by adding a 
83.11 	subdivision to read:
83.12 		Subd. 6.Aid payments in 2011 and 2012. Notwithstanding total aids calculated or 
83.13 	certified for 2011 under subdivisions 3, 4, and 5, for 2011 and 2012, each county shall 
83.14 	receive an aid distribution under this section equal to the lesser of (1) the total amount of 
83.15 	aid it received under this section in 2010 after the reductions under sections 477A.0133 
83.16 	and 477A.0134, or (2) the total amount the county is certified to receive in 2011 under 
83.17 	subdivisions 3 to 5.

83.18 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
83.19 	2011 and 2012.

83.20 	Sec. 16. Minnesota Statutes 2010, section 477A.013, subdivision 9, is amended to read:
83.21 		Subd. 9.City aid distribution. (a) In calendar year 2009 and thereafter, each 
83.22 	city shall receive an aid distribution equal to the sum of (1) the city formula aid under 
83.23 	subdivision 8, and (2) its city aid base.
83.24 	(b) For aids payable in 2011 2013 only, the total aid in the previous year for any 
83.25 	city shall mean the amount of aid it was certified to receive for aids payable in 2010 2012
83.26 	under this section minus the amount of its aid reduction under section477A.0134. For aids 
83.27 	payable in 2012 2014 and thereafter, the total aid in the previous year for any city means 
83.28 	the amount of aid it was certified to receive under this section in the previous payable year.
83.29 	(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed 
83.30 	the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution 
83.31 	plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total 
83.32 	aid for any city with a population of 2,500 or more may not be less than its total aid under 
84.1 	this section in the previous year minus the lesser of $10 multiplied by its population, or ten 
84.2 	percent of its net levy in the year prior to the aid distribution.
84.3 	(d) For aids payable in 2010 and thereafter, the total aid for a city with a population 
84.4 	less than 2,500 must not be less than the amount it was certified to receive in the 
84.5 	previous year minus the lesser of $10 multiplied by its population, or five percent of its 
84.6 	2003 certified aid amount. For aids payable in 2009 only, the total aid for a city with a 
84.7 	population less than 2,500 must not be less than what it received under this section in the 
84.8 	previous year unless its total aid in calendar year 2008 was aid under section 477A.011, 
84.9 	subdivision 36, paragraph (s), in which case its minimum aid is zero.
84.10 	(e) A city's aid loss under this section may not exceed $300,000 in any year in 
84.11 	which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or 
84.12 	greater than the appropriation under that subdivision in the previous year, unless the 
84.13 	city has an adjustment in its city net tax capacity under the process described in section 
84.14 	469.174, subdivision 28.
84.15 	(f) If a city's net tax capacity used in calculating aid under this section has decreased 
84.16 	in any year by more than 25 percent from its net tax capacity in the previous year due to 
84.17 	property becoming tax-exempt Indian land, the city's maximum allowed aid increase 
84.18 	under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the 
84.19 	year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 
84.20 	resulting from the property becoming tax exempt.

84.21 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
84.22 	2013 and thereafter.

84.23 	Sec. 17. Minnesota Statutes 2010, section 477A.013, is amended by adding a 
84.24 	subdivision to read:
84.25 		Subd. 11.Aid payments in 2011 and 2012. Notwithstanding aids calculated or 
84.26 	certified for 2011 under subdivision 9, for 2011 and 2012, each city shall receive an aid 
84.27 	distribution under this section equal to the lesser of (1) the total amount of aid it received 
84.28 	under this section in 2010 after the reductions under sections 477A.0133 and 477A.0134, 
84.29 	and reduced by the amount of payments made under section 477A.011, subdivision 
84.30 	36, paragraphs (y) and (z), or (2) the amount it was certified to receive in 2011 under 
84.31 	subdivision 9. In 2011 only, a city that qualifies for the aid base adjustment under section 
84.32 	477A.011, subdivision 36, paragraph (aa), shall receive the amount that it was certified to 
84.33 	receive in 2011. In 2012, a city that qualifies for the aid base adjustment under section 
84.34 	477A.011, subdivision 36, paragraph (aa), shall receive the amount that it was certified 
85.1 	to receive in 2011, minus the aid base adjustment provided under section 477A.011, 
85.2 	subdivision 36, paragraph (aa).

85.3 	EFFECTIVE DATE. This section is effective for aids payable in calendar years 
85.4 	2011 and 2012.

85.5 	Sec. 18. Minnesota Statutes 2010, section 477A.03, is amended to read:
85.6 	477A.03 APPROPRIATION.
85.7 		Subd. 2.Annual appropriation. A sum sufficient to discharge the duties imposed 
85.8 	by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the 
85.9 	commissioner of revenue.
85.10 		Subd. 2a.Cities. For aids payable in 2011 2013 and thereafter, the total aid paid 
85.11 	under section 477A.013, subdivision 9, is $527,100,646 $426,438,012.
85.12 		Subd. 2b.Counties. (a) For aids payable in 2011 2013 and thereafter, the total aid 
85.13 	payable under section 477A.0124, subdivision 3, is $96,395,000 $80,795,000. Each 
85.14 	calendar year, $500,000 shall be retained by the commissioner of revenue to make 
85.15 	reimbursements to the commissioner of management and budget for payments made 
85.16 	under section 611.27. For calendar year 2004, the amount shall be in addition to the 
85.17 	payments authorized under section 477A.0124, subdivision 1. For calendar year 2005 
85.18 	and subsequent years, the amount shall be deducted from the appropriation under 
85.19 	this paragraph. The reimbursements shall be to defray the additional costs associated 
85.20 	with court-ordered counsel under section 611.27. Any retained amounts not used for 
85.21 	reimbursement in a year shall be included in the next distribution of county need aid 
85.22 	that is certified to the county auditors for the purpose of property tax reduction for the 
85.23 	next taxes payable year.
85.24 	(b) For aids payable in 2011 2013 and thereafter, the total aid under section 
85.25 	477A.0124, subdivision 4, is $101,309,575 $84,909,575. The commissioner of 
85.26 	management and budget shall bill the commissioner of revenue for the cost of preparation 
85.27 	of local impact notes as required by section 3.987, not to exceed $207,000 in fiscal year 
85.28 	2004 and thereafter. The commissioner of education shall bill the commissioner of 
85.29 	revenue for the cost of preparation of local impact notes for school districts as required by 
85.30 	section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner 
85.31 	of revenue shall deduct the amounts billed under this paragraph from the appropriation 
85.32 	under this paragraph. The amounts deducted are appropriated to the commissioner of 
85.33 	management and budget and the commissioner of education for the preparation of local 
85.34 	impact notes.

86.1 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
86.2 	2012 and thereafter.

86.3 	Sec. 19. Minnesota Statutes 2010, section 477A.11, subdivision 1, is amended to read:
86.4 		Subdivision 1.Terms. For the purpose of sections 477A.11 to 477A.145 477A.14, 
86.5 	the terms defined in this section have the meanings given them. 

86.6 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
86.7 	2011 and thereafter.

86.8 	Sec. 20. Minnesota Statutes 2010, section 477A.12, subdivision 1, is amended to read:
86.9 		Subdivision 1.Types of land; payments. (a) As an offset for expenses incurred 
86.10 	by counties and towns in support of natural resources lands, the following amounts are 
86.11 	annually appropriated to the commissioner of natural resources from the general fund for 
86.12 	transfer to the commissioner of revenue. The commissioner of revenue shall pay the 
86.13 	transferred funds to counties as required by sections 477A.11 to 477A.145 477A.14. 
86.14 	The amounts are:
86.15 	(1) for acquired natural resources land, $3, as adjusted for inflation under section 
86.16 	477A.145, $5.133 multiplied by the total number of acres of acquired natural resources 
86.17 	land or, at the county's option three-fourths of one percent of the appraised value of all 
86.18 	acquired natural resources land in the county, whichever is greater;
86.19 	(2) 75 cents, as adjusted for inflation under section 477A.145, $1.283 multiplied by 
86.20 	the number of acres of county-administered other natural resources land;
86.21 	(3) 75 cents, as adjusted for inflation under section 477A.145, $1.283 multiplied by 
86.22 	the total number of acres of land utilization project land; and
86.23 	(4) 37.5 64.2 cents, as adjusted for inflation under section 477A.145, multiplied by 
86.24 	the number of acres of commissioner-administered other natural resources land located in 
86.25 	each county as of July 1 of each year prior to the payment year.
86.26 	(b) The amount determined under paragraph (a), clause (1), is payable for land 
86.27 	that is acquired from a private owner and owned by the Department of Transportation 
86.28 	for the purpose of replacing wetland losses caused by transportation projects, but only 
86.29 	if the county contains more than 500 acres of such land at the time the certification is 
86.30 	made under subdivision 2.

86.31 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
86.32 	2011 and thereafter.

87.1 	Sec. 21. Minnesota Statutes 2010, section 477A.14, subdivision 1, is amended to read:
87.2 		Subdivision 1.General distribution. Except as provided in subdivision 2 or in 
87.3 	section 97A.061, subdivision 5, 40 percent of the total payment to the county shall be 
87.4 	deposited in the county general revenue fund to be used to provide property tax levy 
87.5 	reduction. The remainder shall be distributed by the county in the following priority:
87.6 	(a) 37.5 64.2 cents, as adjusted for inflation under section 477A.145, for each 
87.7 	acre of county-administered other natural resources land shall be deposited in a 
87.8 	resource development fund to be created within the county treasury for use in resource 
87.9 	development, forest management, game and fish habitat improvement, and recreational 
87.10 	development and maintenance of county-administered other natural resources land. Any 
87.11 	county receiving less than $5,000 annually for the resource development fund may elect to 
87.12 	deposit that amount in the county general revenue fund;
87.13 	(b) From the funds remaining, within 30 days of receipt of the payment to the 
87.14 	county, the county treasurer shall pay each organized township 30 51.3 cents, as adjusted 
87.15 	for inflation under section 477A.145, for each acre of acquired natural resources land 
87.16 	and each acre of land described in section 477A.12, subdivision 1, paragraph (b), and 
87.17 	7.5 12.8 cents, as adjusted for inflation under section 477A.145, for each acre of other 
87.18 	natural resources land and each acre of land utilization project land located within its 
87.19 	boundaries. Payments for natural resources lands not located in an organized township 
87.20 	shall be deposited in the county general revenue fund. Payments to counties and townships 
87.21 	pursuant to this paragraph shall be used to provide property tax levy reduction, except 
87.22 	that of the payments for natural resources lands not located in an organized township, the 
87.23 	county may allocate the amount determined to be necessary for maintenance of roads in 
87.24 	unorganized townships. Provided that, if the total payment to the county pursuant to 
87.25 	section 477A.12 is not sufficient to fully fund the distribution provided for in this clause, 
87.26 	the amount available shall be distributed to each township and the county general revenue 
87.27 	fund on a pro rata basis; and
87.28 	(c) Any remaining funds shall be deposited in the county general revenue fund. 
87.29 	Provided that, if the distribution to the county general revenue fund exceeds $35,000, the 
87.30 	excess shall be used to provide property tax levy reduction.

87.31 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
87.32 	2011 and thereafter.

87.33 	Sec. 22. Laws 2010, First Special Session chapter 1, article 13, section 4, subdivision 
87.34 	1, is amended to read:
88.1 		Subdivision 1.Political contribution credit. Notwithstanding the provisions of 
88.2 	Minnesota Statutes, section 290.06, subdivision 23, or any other law to the contrary, the 
88.3 	political contribution refund does not apply to contributions made after June 30, 2009, and 
88.4 	before July 1, 2011 2013.

88.5 	EFFECTIVE DATE. This section is effective retroactively from July 1, 2011.

88.6 	Sec. 23. CREDIT REDUCTIONS AND LIMITATION; COUNTIES AND 
88.7 	CITIES.
 88.8 	In 2011, the market value credit reimbursement payment to each county and city 
88.9 	authorized under Minnesota Statutes, section 273.1384, subdivision 4, may not exceed the 
88.10 	reimbursement payment received by the county or city for taxes payable in 2010. 

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

88.12 	Sec. 24. PROPERTY TAX STATEMENT FOR TAXES PAYABLE IN 2012 ONLY.
 88.13 	For the purposes of the property tax statements required under Minnesota Statutes, 
88.14 	section 276.04, subdivision 2, for taxes payable in 2012 only, the gross tax amount shown 
88.15 	for the previous year is the gross tax minus the residential homestead market value credit.

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

88.17 	Sec. 25. DELAY IN CERTAIN JULY STATE PAYMENTS TO LOCAL 
88.18 	GOVERNMENTS.
 88.19 	Notwithstanding any law to the contrary, the commissioner of revenue shall not make 
88.20 	July 20, 2011, payments under Minnesota Statutes, section 477A.015, until July 27, 2011.

88.21 	EFFECTIVE DATE. This section is effective upon final enactment and applies 
88.22 	to the July 20, 2011, payments.

88.23 	Sec. 26. SUSTAINABLE FOREST INCENTIVE ACT REDUCTION; PURPOSE 
88.24 	STATEMENT; TRANSITION PROVISIONS.
 88.25 	(a) Given the limits on state budgetary resources for the current and future fiscal 
88.26 	biennia, the projected cost of the sustainable forest resource management incentive 
88.27 	program under Minnesota Statutes, chapter 290C, of over $31,000,000 for the fiscal 2012 
88.28 	and 2013 biennium, and the modest amount of tangible public benefits of that program, 
88.29 	the legislature determines that it is prudent and necessary to reduce that program effective 
88.30 	immediately to help balance the state budget for the fiscal 2012 and 2013 biennium 
89.1 	and to help provide permanent structural balance to the state budget. The legislature 
89.2 	takes notice of and finds that many of the eligibility requirements for participants in 
89.3 	the sustainable forest incentive program are in the participants' own financial interests, 
89.4 	determined without regard to whether they receive state payments for doing so, and that 
89.5 	the participants with the largest amounts of acreage in the program do follow and would 
89.6 	likely continue to follow similar or more stringent management practices, regardless 
89.7 	of whether the program exists. 
89.8 	(b) Land enrolled in the sustainable forest incentive program on May 1, 2011, for 
89.9 	which the owner elects to terminate its enrollment before September 1, 2011, under the 
89.10 	effective date provision of section 12, may be reclassified as class 2(c) managed forest 
89.11 	land for taxes payable in 2012 if the owner applies to the assessor for the reclassification 
89.12 	before September 1, 2011, notwithstanding the application date in Minnesota Statutes, 
89.13 	section 273.13, subdivision 23, paragraph (d).

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

89.15 	Sec. 27.  REPEALER.
 89.16 	(a) Minnesota Statutes 2010, sections 275.295; and 477A.145, are repealed.
89.17 	(b) Minnesota Statutes 2010, section 273.1384, subdivisions 1 and 6, are repealed.

89.18 	EFFECTIVE DATE. Paragraph (a) is effective for aids payable in 2012 and 
89.19 	thereafter. Paragraph (b) is effective for taxes payable in 2012 and thereafter.

89.20 	ARTICLE 7
89.21 	MINERALS

89.22 	Section 1. Minnesota Statutes 2010, section 272.02, is amended by adding a 
89.23 	subdivision to read:
89.24 		Subd. 97.Property used in business of mining subject to net proceeds tax. The 
89.25 	following property used in the business of mining that is subject to the net proceeds tax 
89.26 	under section 298.015 is exempt:
89.27 	(1) deposits of ores, metals, and minerals and the lands in which they are contained;
89.28 	(2) all real and personal property used in mining, quarrying, producing, or refining 
89.29 	ores, minerals, or metals, including lands occupied by or used in connection with the 
89.30 	mining, quarrying, production, or ore refining facilities; and
89.31 	(3) concentrate or direct reduced ore.
90.1 	This exemption applies for each year that a person subject to tax under section 
90.2 	298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or 
90.3 	minerals.

90.4 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
90.5 	thereafter.

90.6 	Sec. 2. Minnesota Statutes 2010, section 290.05, subdivision 1, is amended to read:
90.7 		Subdivision 1.Exempt entities. The following corporations, individuals, estates, 
90.8 	trusts, and organizations shall be exempted from taxation under this chapter, provided 
90.9 	that every such person or corporation claiming exemption under this chapter, in whole 
90.10 	or in part, must establish to the satisfaction of the commissioner the taxable status of 
90.11 	any income or activity:
90.12 	(a) corporations, individuals, estates, and trusts engaged in the business of mining or 
90.13 	producing iron ore and mining, producing, or refining other ores, metals, and minerals,
90.14 	the mining or, production, or refining of which is subject to the occupation tax imposed 
90.15 	by section 298.01; but if any such corporation, individual, estate, or trust engages in any 
90.16 	other business or activity or has income from any property not used in such business it 
90.17 	shall be subject to this tax computed on the net income from such property or such other 
90.18 	business or activity. Royalty shall not be considered as income from the business of 
90.19 	mining or producing iron ore within the meaning of this section;
90.20 	(b) the United States of America, the state of Minnesota or any political subdivision 
90.21 	of either agencies or instrumentalities, whether engaged in the discharge of governmental 
90.22 	or proprietary functions; and
90.23 	(c) any insurance company.

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

90.26 	Sec. 3. Minnesota Statutes 2010, section 298.001, is amended by adding a subdivision 
90.27 	to read:
90.28 		Subd. 10.Refining. "Refining" means and is limited to refining:
90.29 	(1) of ores, metals, or mineral products, the mining, extraction, or quarrying of 
90.30 	which were subject to tax under section 298.015; and
90.31 	(2) carried out by the entity, or an affiliated entity, that mined, extracted, or quarried 
90.32 	the metal or mineral products.

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

91.3 	Sec. 4. Minnesota Statutes 2010, section 298.01, subdivision 3, is amended to read:
91.4 		Subd. 3.Occupation tax; other ores.  Every person engaged in the business of 
91.5 	mining, refining, or producing ores, metals, or minerals in this state, except iron ore or 
91.6 	taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided 
91.7 	in this subdivision. For purposes of this subdivision, mining includes the application 
91.8 	of hydrometallurgical processes. The tax is determined in the same manner as the tax 
91.9 	imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17, 
91.10 	subdivision 4, and 290.191, subdivision 2, do not apply, and the occupation tax must 
91.11 	be computed by applying to taxable income the rate of 2.45 percent. A person subject 
91.12 	to occupation tax under this section shall apportion its net income on the basis of the 
91.13 	percentage obtained by taking the sum of:
91.14 	(1) 75 percent of the percentage which the sales made within this state in connection 
91.15 	with the trade or business during the tax period are of the total sales wherever made in 
91.16 	connection with the trade or business during the tax period;
91.17 	(2) 12.5 percent of the percentage which the total tangible property used by the 
91.18 	taxpayer in this state in connection with the trade or business during the tax period is of 
91.19 	the total tangible property, wherever located, used by the taxpayer in connection with the 
91.20 	trade or business during the tax period; and
91.21 	(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 
91.22 	in this state or paid in respect to labor performed in this state in connection with the trade 
91.23 	or business during the tax period are of the taxpayer's total payrolls paid or incurred in 
91.24 	connection with the trade or business during the tax period.
91.25 	The tax is in addition to all other taxes.

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

91.28 	Sec. 5. Minnesota Statutes 2010, section 298.01, subdivision 3a, is amended to read:
91.29 		Subd. 3a.Gross income. (a) For purposes of determining a person's taxable income 
91.30 	under subdivision 3, gross income is determined by the amount of gross proceeds from 
91.31 	mining in this state under section 298.016 and includes any gain or loss recognized 
91.32 	from the sale or disposition of assets used in the business in this state. If more than one 
91.33 	ore, mineral, or metal, or energy resource referred to in section 298.016 is mined and 
91.34 	processed at the same mine and plant, a gross income for each ore, mineral, or metal, or 
92.1 	energy resource must be determined separately. The gross incomes may be combined on 
92.2 	one occupation tax return to arrive at the gross income of all production.
92.3 	(b) In applying section 290.191, subdivision 5, transfers of ores, metals, or minerals 
92.4 	that are subject to tax under this chapter are deemed to be sales in this state.

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

92.7 	Sec. 6. Minnesota Statutes 2010, section 298.015, subdivision 1, is amended to read:
92.8 		Subdivision 1.Tax imposed. A person engaged in the business of mining shall pay 
92.9 	to the state of Minnesota for distribution as provided in section 298.018 a net proceeds tax 
92.10 	equal to two percent of the net proceeds from mining in Minnesota. The tax applies to all 
92.11 	mineral and energy resources ores, metals, and minerals mined or, extracted, produced, 
92.12 	or refined within the state of Minnesota except for sand, silica sand, gravel, building 
92.13 	stone, crushed rock, limestone, granite, dimension granite, dimension stone, horticultural 
92.14 	peat, clay, soil, iron ore, and taconite concentrates. The tax is in addition to all other 
92.15 	taxes provided for by law. 

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

92.18 	Sec. 7. Minnesota Statutes 2010, section 298.015, subdivision 2, is amended to read:
92.19 		Subd. 2.Net proceeds. For purposes of this section, the term "net proceeds" means 
92.20 	the gross proceeds from mining, as defined in section 298.016, less the deductions allowed 
92.21 	in section 298.017 for purposes of determining taxable income under section 298.01, 
92.22 	subdivision 3b, applied to the mining, production, processing, beneficiation, smelting, or 
92.23 	refining of metal or mineral products. No other credits or deductions shall apply to this tax 
92.24 	except for those provided in section 298.017. 

92.25 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
92.26 	thereafter.

92.27 	Sec. 8. Minnesota Statutes 2010, section 298.016, subdivision 4, is amended to read:
92.28 		Subd. 4.Definitions Metal or mineral products; definition. For the purposes of 
92.29 	sections 298.015 and 298.017 this section, the terms defined in this subdivision have the 
92.30 	meaning given them unless the context clearly indicates otherwise. 
92.31 	(a) "metal or mineral products" means all those mineral and energy resources ores, 
92.32 	metals, and minerals subject to the tax provided in section 298.015. 
93.1 	(b) "Exploration" means activities designed and engaged in to ascertain the 
93.2 	existence, location, extent, or quality of any deposit of metal or mineral products prior to 
93.3 	the development of a mining site.
93.4 	(c) "Development" means activities designed and engaged in to prepare or develop 
93.5 	a potential mining site for mining after the existence of metal or mineral products in 
93.6 	commercially marketable quantities has been disclosed including, but not limited to, 
93.7 	the clearing of forestation, the building of roads, removal of overburden, or the sinking 
93.8 	of shafts.
93.9 	(d) "Research" means activities designed and engaged in to create new or improved 
93.10 	methods of mining, producing, processing, beneficiating, smelting, or refining metal 
93.11 	or mineral products.

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

93.14 	Sec. 9.  REPEALER.
 93.15 	Minnesota Statutes 2010, section 298.017, is repealed.

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

93.18 	ARTICLE 8
93.19 	INSURANCE TAXES

93.20 	Section 1. Minnesota Statutes 2010, section 297I.01, is amended by adding a 
93.21 	subdivision to read:
93.22 		Subd. 2a.Affiliated group. "Affiliated group" means a group that includes the 
93.23 	insured and any entity, or group of entities, that controls, is controlled by, or is under 
93.24 	common control with the insured. An entity has control over another entity when: (1) the 
93.25 	entity directly or indirectly or acting through one or more other persons owns, controls, 
93.26 	or has the power to vote 25 percent or more of any class of voting securities of the other 
93.27 	entity; or (2) the entity controls in any manner the election of a majority of the directors or 
93.28 	trustees of the other entity.

93.29 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
93.30 	that go into effect after July 20, 2011.

93.31 	Sec. 2. Minnesota Statutes 2010, section 297I.01, subdivision 9, is amended to read:
94.1 		Subd. 9.Gross premiums. "Gross premiums" means total premiums paid by 
94.2 	policyholders and applicants of policies, whether received in the form of money or other 
94.3 	valuable consideration, on property, persons, lives, interests and other risks located, 
94.4 	resident, or to be performed in this state, but excluding consideration and premiums for 
94.5 	reinsurance assumed from other insurance companies.
94.6 	 (a) "Gross premiums" includes the total consideration paid to bail bond agents 
94.7 	for bail bonds.
94.8 	(b) For title insurance companies, "gross premiums" means the charge for title 
94.9 	insurance made by a title insurance company or its agents according to the company's rate 
94.10 	filing approved by the commissioner of commerce without a deduction for commissions 
94.11 	paid to or retained by the agent. Gross premiums of a title insurance company does not 
94.12 	include any other charge or fee for abstracting, searching, or examining the title, or 
94.13 	escrow, closing, or other related services.
94.14 	 (c) "Gross premiums" includes any workers' compensation special compensation 
94.15 	fund premium surcharge pursuant to section 176.129.
94.16 	(d) "Gross premiums" for surplus linesnonadmitted insurance includes all 
94.17 	related charges, commissions, and fees received by the licensee any payment made as 
94.18 	consideration for an insurance contract for such insurance, including premium deposits, 
94.19 	assessments, fees, and any other compensation given in consideration for a contract 
94.20 	of insurance. Gross premiums does not include the stamping fee, as provided under 
94.21 	section 60A.2085, subdivision 7, nor the operating assessment, as provided under section 
94.22 	60A.208, subdivision 8.

94.23 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
94.24 	that go into effect after July 20, 2011.

94.25 	Sec. 3. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision 
94.26 	to read:
94.27 		Subd. 10a.Home state. "Home state" means the state in which an insured maintains 
94.28 	its principal place of business, or in the case of an individual, the individual's principal 
94.29 	residence; or if 100 percent of the insured risk is located out of the state, the state to 
94.30 	which the greatest percentage of the insured's taxable premium for that insurance contract 
94.31 	is allocated. If more than one insured from an affiliated group are named insureds on a 
94.32 	single nonadmitted insurance contract, the term home state means the home state of the 
94.33 	member of the affiliated group that has the largest percentage of premium attributed to 
94.34 	it under that insurance contract.

95.1 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
95.2 	that go into effect after July 20, 2011.

95.3 	Sec. 4. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision 
95.4 	to read:
95.5 		Subd. 10b.Independently procured insurance. "Independently procured 
95.6 	insurance" means insurance procured directly by an insured from a nonadmitted insurer.

95.7 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
95.8 	that go into effect after July 20, 2011.

95.9 	Sec. 5. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision 
95.10 	to read:
95.11 		Subd. 10c.Nonadmitted insurance. "Nonadmitted insurance" means any property 
95.12 	and casualty insurance permitted to be placed directly or through a surplus lines broker 
95.13 	with a nonadmitted insurer.

95.14 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
95.15 	that go into effect after July 20, 2011.

95.16 	Sec. 6. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision 
95.17 	to read:
95.18 		Subd. 10d.Nonadmitted insurance premium tax. "Nonadmitted insurance 
95.19 	premium tax" means, with respect to surplus lines or independently procured insurance 
95.20 	coverage, any tax, fee, assessment, or other charge imposed directly or indirectly by a 
95.21 	government entity.

95.22 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
95.23 	that go into effect after July 20, 2011.

95.24 	Sec. 7. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision 
95.25 	to read:
95.26 		Subd. 10e.Nonadmitted insurer. "Nonadmitted insurer" means an insurer not 
95.27 	licensed to engage in the business of insurance in Minnesota, but does not include a risk 
95.28 	retention group as the term is defined in section 2(a)(4) of the Liability Risk Retention Act 
95.29 	of 1986, United States Code, title 15, section 3901(a)(4).

96.1 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
96.2 	that go into effect after July 20, 2011.

96.3 	Sec. 8. Minnesota Statutes 2010, section 297I.01, is amended by adding a subdivision 
96.4 	to read:
96.5 		Subd. 15a.Surplus lines broker. "Surplus lines broker" means an individual, 
96.6 	firm, or corporation which is licensed in a state to sell, solicit, or negotiate insurance on 
96.7 	properties, risks, or exposures located or to be performed in a state with nonadmitted 
96.8 	insurers.

96.9 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
96.10 	that go into effect after July 20, 2011.

96.11 	Sec. 9. Minnesota Statutes 2010, section 297I.01, subdivision 16, is amended to read:
96.12 		Subd. 16.Taxpayer. "Taxpayer" means any insurance company, association, 
96.13 	surplus lines licensee broker, automobile risk self-insurer, or insured or any other person 
96.14 	or entity required to pay any amount due under this chapter.

96.15 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
96.16 	that go into effect after July 20, 2011.

96.17 	Sec. 10. Minnesota Statutes 2010, section 297I.05, subdivision 7, is amended to read:
96.18 		Subd. 7.Surplus lines Nonadmitted insurance premium tax. (a) A tax is imposed 
96.19 	on surplus lines licensees brokers. The rate of tax is equal to three percent of the gross 
96.20 	premiums less return premiums paid by an insured whose home state is Minnesota.
96.21 	(b) If surplus lines insurance placed by a surplus lines licensee and taxed under this 
96.22 	subdivision covers a subject of insurance residing, located, or to be performed outside this 
96.23 	state, a proper pro rata portion of the entire premium payable for all of that insurance must 
96.24 	be allocated according to the subjects of insurance residing, located, or to be performed 
96.25 	in this state. A tax is imposed on persons, firms, or corporations that procure insurance 
96.26 	directly from a nonadmitted insurer. The rate of tax is equal to two percent of the gross 
96.27 	premiums less return premiums paid by an insured whose home state is Minnesota.
96.28 	(c) No state other than the home state of an insured may require any premium tax 
96.29 	payment for nonadmitted insurance. When Minnesota is the home state of the insured, 
96.30 	as provided under section 297I.01, 100 percent of the gross premiums are taxable in 
96.31 	Minnesota with no allocation of the tax to other states.

97.1 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
97.2 	that go into effect after July 20, 2011.

97.3 	Sec. 11. Minnesota Statutes 2010, section 297I.05, subdivision 12, is amended to read:
97.4 		Subd. 12.Other entities. (a) A tax is imposed equal to two percent of:
97.5 	(1) gross premiums less return premiums written for risks resident or located in 
97.6 	Minnesota by a risk retention group;
97.7 	(2) gross premiums less return premiums received by an attorney in fact acting 
97.8 	in accordance with chapter 71A;
97.9 	(3) gross premiums less return premiums received pursuant to assigned risk policies 
97.10 	and contracts of coverage under chapter 79;
97.11 	(4) the direct funded premium received by the reinsurance association under section 
97.12 	79.34 from self-insurers approved under section 176.181 and political subdivisions that 
97.13 	self-insure; and
97.14 	(5) gross premiums less return premiums paid to an insurer other than a licensed 
97.15 	insurance company or a surplus lines licensee broker for coverage of risks resident or 
97.16 	located in Minnesota by a purchasing group or any members of the purchasing group to a 
97.17 	broker or agent for the purchasing group.
97.18 	(b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The 
97.19 	rate of tax is equal to two percent of the total amount of claims paid during the fund year, 
97.20 	with no deduction for claims wholly or partially reimbursed through stop-loss insurance.
97.21 	(c) A tax is imposed on a joint self-insurance plan operating under chapter 62H. 
97.22 	The rate of tax is equal to two percent of the total amount of claims paid during the 
97.23 	fund's fiscal year, with no deduction for claims wholly or partially reimbursed through 
97.24 	stop-loss insurance.
97.25 	(d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5, 
97.26 	on the gross premiums less return premiums on all coverages received by an accountable 
97.27 	provider network or agents of an accountable provider network in Minnesota, in cash or 
97.28 	otherwise, during the year.

97.29 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
97.30 	that go into effect after July 20, 2011.

97.31 	Sec. 12. Minnesota Statutes 2010, section 297I.30, subdivision 1, is amended to read:
97.32 		Subdivision 1.General rule. On or before March 1, every taxpayer subject to 
97.33 	taxation under section 297I.05, subdivisions 1 to 5, 9, 10 7, paragraph (b), 12, paragraphs 
98.1 	(a), clauses (1) to (4), (b), (c), and (d), and 14, shall file an annual return for the preceding 
98.2 	calendar year in the form prescribed by the commissioner.

98.3 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
98.4 	that go into effect after July 20, 2011.

98.5 	Sec. 13. Minnesota Statutes 2010, section 297I.30, subdivision 2, is amended to read:
98.6 		Subd. 2.Surplus lines licensees brokers and purchasing groups. On or before 
98.7 	February 15 and August 15 of each year, every surplus lines licensee broker subject to 
98.8 	taxation under section 297I.05, subdivision 7, paragraph (a), and every purchasing group 
98.9 	or member of a purchasing group subject to tax under section 297I.05, subdivision 12, 
98.10 	paragraph (a), clause (5), shall file a return with the commissioner for the preceding 
98.11 	six-month period ending December 31, or June 30, in the form prescribed by the 
98.12 	commissioner.

98.13 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
98.14 	that go into effect after July 20, 2011.

98.15 	Sec. 14.  REPEALER.
 98.16 	Minnesota Statutes 2010, section 297I.05, subdivisions 9 and 10, are repealed.

98.17 	EFFECTIVE DATE. This section is effective for nonadmitted insurance policies 
98.18 	that go into effect after July 20, 2011.

98.19 	ARTICLE 9
98.20 	SCIENCE AND TECHNOLOGY PROGRAM

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

98.24 	Sec. 2. [116W.26] DEFINITIONS.
98.25 		Subdivision 1.Applicability. For the purposes of sections 116W.26 to 116W.34, 
98.26 	the terms in this section have the meanings given them. 
98.27 		Subd. 2.Authority. "Authority" means the Minnesota Science and Technology 
98.28 	Authority established under this chapter. 
98.29 		Subd. 3.College or university. "College or university" means an institution of 
98.30 	postsecondary education, public or private, that grants undergraduate or postgraduate 
99.1 	academic degrees, conducts significant research or development activities in the areas of 
99.2 	science and technology.
99.3 		Subd. 4.Commercialization. "Commercialization" means any of the full spectrum 
99.4 	of activities required for a new technology, product, or process to be developed from 
99.5 	its basic research of conceptual stage through applied research or development to the 
99.6 	marketplace including, without limitation, the steps leading up to and including licensure, 
99.7 	sales, and services.
99.8 		Subd. 5.Commercialized research project. "Commercialized research project" 
99.9 	means research conducted within a college or university or nonprofit research institution 
99.10 	or by a qualified science and technology company that has shown advanced commercial 
99.11 	potential through license agreements, patents, or other forms of invention disclosure, and 
99.12 	by which a qualified science and technology company has been or is being currently 
99.13 	formed. 
99.14 		Subd. 6.Fund. "Fund" means the Minnesota science and technology fund.
99.15 		Subd. 7.Nonprofit research institution. "Nonprofit research institution" means an 
99.16 	entity with its principle place of business in Minnesota, that qualifies under section 501(c) 
99.17 	of the Internal Revenue Code, and that conducts significant research or development 
99.18 	activities in this state in the areas of science and technology.
99.19 		Subd. 8.Program. "Program" means the Minnesota science and technology 
99.20 	program.
99.21 		Subd. 9.Qualified science and technology company. "Qualified science and 
99.22 	technology company" means a corporation, limited liability company, S corporation, 
99.23 	partnership, limited liability partnership, or sole proprietorship with fewer than 100 
99.24 	employees that is engaged in research, development, or production of science or 
99.25 	technology in this state including, without limitation, research, development, or production 
99.26 	directed toward developing or providing science and technology products, processes, or 
99.27 	services for specific commercial or public purposes.

99.28 	Sec. 3. [116W.27] MINNESOTA SCIENCE AND TECHNOLOGY FUND.
99.29 	A Minnesota science and technology fund is created in the state treasury. The fund 
99.30 	is a direct-appropriated special revenue fund. Money of the authority must be paid to the 
99.31 	commissioner of management and budget as agent of the authority and the commissioner 
99.32 	shall not commingle the money with other money. The money in the fund must be paid out 
99.33 	only on warrants drawn by the commissioner of management and budget on requisition of 
99.34 	the executive director of the authority or designee.

100.1 	Sec. 4. [116W.28] MINNESOTA SCIENCE AND TECHNOLOGY FUND; 
100.2 	AUTHORIZED USES.
100.3 	The Minnesota science and technology fund may be used for the following to:
100.4 	(1) establish the commercialized research program authorized under section 
100.5 	116W.29;
100.6 	(2) establish the federal research and development support program under section 
100.7 	116W.30;
100.8 	(3) establish the industry technology and competitiveness program under section 
100.9 	116W.31; and 
100.10 	(4) carry out the powers of the authority authorized under sections 116W.04 and 
100.11 	116W.32 that are in support of the programs in clauses (1) to (3).

100.12 	Sec. 5. [116W.29] COMMERCIALIZED RESEARCH PROGRAM.
100.13 	(a) The authority may establish a commercialized research program. The purpose of 
100.14 	the program is to accelerate the commercialization of science and technology products, 
100.15 	processes, or services from colleges or universities, nonprofit research institutions or 
100.16 	qualified science and technology companies that lead to an increase in science and 
100.17 	technology businesses and jobs. The program shall:
100.18 	(1) provide science and technology gap funding of up to $250,000 per science and 
100.19 	technology research project to assist in the commercialization and transfer of science and 
100.20 	technology research projects from a college or university or nonprofit research institution 
100.21 	to a qualified science and technology company; and
100.22 	(2) provide funding of up to $250,000 for early stage development for qualified 
100.23 	science and technology companies to conduct commercialized research projects.
100.24 	(b) All activities under the commercialized research program must require:
100.25 	(1) written criteria set by the authority for the application, award, and use of the 
100.26 	funds;
100.27 	(2) matching funds by the participating qualified science and technology company, 
100.28 	college or university, or nonprofit research institution;
100.29 	(3) no more than 15 percent of the funds awarded by the authority may be used 
100.30 	for overhead costs; and
100.31 	(4) a report by the participating qualified science and technology company, college 
100.32 	or university, or nonprofit research institution that provides documentation of the use of 
100.33 	funds and outcomes of the award. The report must be submitted to the authority within 
100.34 	one calendar year of the date of the award.

101.1 	Sec. 6. [116W.30] FEDERAL RESEARCH AND DEVELOPMENT SUPPORT 
101.2 	PROGRAM.
101.3 	The authority may establish a federal research and development support program. 
101.4 	The purpose of the program is to increase and coordinate efforts to procure federal funding 
101.5 	for research projects of primary benefit to qualified science and technology companies, 
101.6 	colleges or universities, and nonprofit research institutions. The program shall:
101.7 	(1) develop and execute a strategy to identify specific federal agencies and programs 
101.8 	that support the growth of science and technology industries in this state; and
101.9 	(2) provide grants to qualified science and technology companies:
101.10 	(i) to assist in the development of federal Small Business Innovation (SBIR) or 
101.11 	Small Business Technology Transfer (STTR) proposals; and
101.12 	(ii) to match funds received through SBIR or STTR awards. No more than 
101.13 	$1,500,000 may be awarded in a year for matching grants under this clause.

101.14 	Sec. 7. [116W.31] INDUSTRY INNOVATION AND COMPETITIVENESS 
101.15 	PROGRAM.
101.16 	(a) The authority may establish an industry technology and competitiveness program. 
101.17 	The purpose of the program is to advance the technological capacity and competitiveness 
101.18 	of existing and emerging science and technology industries. The program shall:
101.19 	(1) provide matching funds to programs and organizations that assist entrepreneurs 
101.20 	in starting and growing qualified science and technology companies including, but not 
101.21 	limited to, matching funds for mentoring programs, consulting and technical services, 
101.22 	and related activities;
101.23 	(2) fund initiatives that retain engineering, science, technology, and mathematical 
101.24 	occupations in the state including, but not limited to, internships, mentoring, and support 
101.25 	of industry and professional organizations; and
101.26 	(3) fund initiatives that support the growth of targeted industry clusters and the 
101.27 	competitiveness of existing qualified science and technology companies in developing 
101.28 	and marketing new products and services.
101.29 	(b) All activities under the industry innovation and competitiveness program shall 
101.30 	require:
101.31 	(i) written criteria set by the authority for the application, award, and use of the funds;
101.32 	(ii) matching funds by the participating qualified science and technology company, 
101.33 	college or university, or nonprofit research institution; and
101.34 	(iii) a report by the participating qualified science and technology company, college 
101.35 	or university, or nonprofit research institution providing documentation on the use of the 
102.1 	funds and outcomes of the award. The report must be submitted to the authority within 
102.2 	one calendar year from the date of the award.

102.3 	Sec. 8. [116W.32] MINNESOTA SCIENCE AND TECHNOLOGY AUTHORITY; 
102.4 	POWERS UNDER FUND.
102.5 		Subdivision 1.General powers. The authority shall have all of the powers 
102.6 	necessary to carry out the purposes and provisions of sections 116W.26 to 116W.34, 
102.7 	including, but not limited to, those provided under section 116W.04 and the following:
102.8 	(1) The authority may make awards in the forms of grants or loans, and charge and 
102.9 	receive a reasonable interest for the loans, or take an equity position in form of stock, a 
102.10 	convertible note, or other securities in consideration of an award. Interests, revenues, or 
102.11 	other proceeds received as a result of a transaction authorized by use of this fund shall be 
102.12 	deposited to the corpus of the fund and used in the same manner as the corpus of the fund.
102.13 	(2) In awarding money from the fund, priority shall be given to proposals from 
102.14 	qualified science and technology companies that have demonstrable economic benefit to 
102.15 	the state in terms of the formation of a new private sector business entity, the creation of 
102.16 	jobs, or the attraction of federal and private funding.
102.17 	(3) In awarding money from the fund, priority shall be given to proposals from 
102.18 	colleges or universities and nonprofit research institutions that:
102.19 	(i) promote collaboration between any combination of colleges or universities, 
102.20 	nonprofit research institutions, and private industry;
102.21 	(ii) enhance existing research superiority by attracting new research entities, 
102.22 	research talent, or resources to the state; and
102.23 	(iii) create new research superiority that attracts significant researchers and resources 
102.24 	from outside the state.
102.25 	(4) Subject to the limits in this clause, money within the fund may be used 
102.26 	for reasonable administrative expenses by the authority including staffing and direct 
102.27 	operational expenses, and professional fees for accounting, legal, and other technical 
102.28 	services required to carry out the intent of the program and administration of the fund. 
102.29 	Administrative expenses may not exceed five percent of the first $5,000,000 in the fund 
102.30 	and two percent of any amount in excess of $5,000,000.
102.31 	(5) Before making an award, the authority shall enter into a written agreement with 
102.32 	the entity receiving the award that specifies the uses of the award.
102.33 	(6) If the award recipient has not used the award received for the purposes intended, 
102.34 	as of the date provided in the agreement, the recipient shall repay that amount and any 
103.1 	interest applicable under the agreement to the authority. All repayments must be deposited 
103.2 	to the corpus of the fund.
103.3 		Subd. 2.Rules. The authority may adopt rules to implement the programs 
103.4 	authorized under sections 116W.29 to 116W.31.

103.5 	Sec. 9. [116W.33] REPAYMENT.
103.6 	An entity must repay all or a portion of the amount of any award, grant, loan, or 
103.7 	financial assistance of any type paid by the authority under sections 116W.29 to 116W.32 
103.8 	if the entity relocates outside the state or ceases operation in Minnesota within four years 
103.9 	from the date the authority provided the financial award. If the entity relocates outside of 
103.10 	this state or ceases operation in Minnesota within three years of the financial award, the 
103.11 	entity must repay 100 percent of the award. If the entity relocates or ceases operation in 
103.12 	Minnesota after a period of three years but before four years from the date of the financial 
103.13 	award, the entity must repay 75 percent of the financial award. 

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

103.18 	Sec. 11. APPROPRIATION.
 103.19 	Except as otherwise provided by law, $500,000 is appropriated to the Minnesota 
103.20 	science and technology fund for fiscal year 2012 and any unspent money carries over 
103.21 	to fiscal year 2013. Notwithstanding section 116W.32, subdivision 1, clause (4), up to 
103.22 	$107,000 of the appropriation may be used for administrative expenses of the authority. 
103.23 	This is a onetime appropriation and is not added to the authority's base budget.

103.24 	Sec. 12. EFFECTIVE DATE.
 103.25 	Sections 1 to 11 are effective the day following final enactment.

103.26 	ARTICLE 10
103.27 	MISCELLANEOUS

103.28 	Section 1. Minnesota Statutes 2010, section 270C.13, subdivision 1, is amended to read:
103.29 		Subdivision 1.Biennial report. The commissioner shall report to the legislature 
103.30 	by March 1 of each odd-numbered year on the overall incidence of the income tax, 
103.31 	sales and excise taxes, and property tax. The report shall present information on the 
104.1 	distribution of the tax burden as follows: (1) for the overall income distribution, using 
104.2 	a systemwide incidence measure such as the Suits index or other appropriate measures 
104.3 	of equality and inequality; (2) by income classes, including at a minimum deciles of the 
104.4 	income distribution; and (3) by other appropriate taxpayer characteristics. The report 
104.5 	must also include information on the distribution of the burden of federal taxes borne 
104.6 	by Minnesota residents.

104.7 	EFFECTIVE DATE. This section is effective beginning with the report due in 
104.8 	March 2013.

104.9 	Sec. 2. BUDGET RESERVE REDUCTION.
 104.10 	Retroactive to July 1, 2011, the commissioner of management and budget shall 
104.11 	cancel $8,665,000 of the balance in the budget reserve account in Minnesota Statutes, 
104.12 	section 16A.152, to the general fund.

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

104.14 	Sec. 3. CASH FLOW ACCOUNT REDUCTION.
 104.15 	Retroactive to July 1, 2011, the commissioner of management and budget shall 
104.16 	cancel $171,000,000 of the balance in the cash flow account in Minnesota Statutes, 
104.17 	section 16A.152, to the general fund.

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

104.19 	Sec. 4. APPROPRIATION.
 104.20 	$15,000 in fiscal year 2012 and $15,000 in fiscal year 2013 are appropriated from 
104.21 	the general fund to the commissioner of revenue for the change in the tax incidence 
104.22 	report in section 1.

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

104.24 	Sec. 5. APPROPRIATION; DISASTER RELIEF.
 104.25 		Subdivision 1.Disaster match appropriation. (a) $9,000,000 is appropriated from 
104.26 	the general fund for fiscal year 2012 to the commissioner of public safety to provide the 
104.27 	state and local match for Federal Emergency Management Agency disaster assistance to 
104.28 	state agencies and political subdivisions under Minnesota Statutes, section 12.221, for 
104.29 	disaster recovery work in:
105.1 	(1) the area designated by Presidential Declaration of Major Disaster 
105.2 	FEMA-1982-DR, for the flooding in Minnesota in the spring of 2011, whether included in 
105.3 	the original declaration or added by later federal government action;
105.4 	(2) the area designated by the Presidential Declaration of Major Disaster 
105.5 	FEMA-1990-DR, for the tornado in Hennepin and Anoka Counties on May 22, 2011, 
105.6 	whether included in the original declaration or added by later federal government action; or
105.7 	(3) the area affected by the severe storms and tornadoes on or about July 1, 2011, 
105.8 	whether included in the original declaration or added by later federal government action.
105.9 	(b) This is a onetime appropriation. The appropriation under this subdivision does 
105.10 	not lapse, notwithstanding the provisions of Minnesota Statutes, section 16A.28.
105.11 		Subd. 2.Reserved funds. Of the appropriation in subdivision 1, $5,000,000 is 
105.12 	reserved for disaster recovery activities within the area designated as DR-1982, for spring 
105.13 	2011 flooding in Minnesota.
105.14 		Subd. 3.Transfer of previous appropriation. Any unexpended portion of the 
105.15 	appropriation in Laws 2010, Second Special Session chapter 1, article 1, section 11, may 
105.16 	be transferred by the commissioner of management and budget to the commissioner of 
105.17 	public safety for the purposes of subdivision 1. Amounts transferred under this subdivision 
105.18 	are available to the commissioner of public safety until June 30, 2013. Any amounts 
105.19 	remaining unexpended and unencumbered on that date lapse to the general fund.

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

105.21 	Sec. 6. MODIFICATION TO POWERS RESULTING FROM TEMPORARY 
105.22 	STATE SHUTDOWN.
 105.23 	(a) Any statute of limitation that limits the ability of a person to file a claim for 
105.24 	refund, appeal, or other document with the commissioner of revenue is tolled until 30 days 
105.25 	after the end of a Department of Revenue shutdown if the commissioner determines that 
105.26 	the shutdown contributed to that person being unable to file the claim for refund, appeal, 
105.27 	or other document within the applicable period of limitation.
105.28 	(b) Any action required to be taken by the commissioner of revenue after June 30, 
105.29 	2011, and before 30 days after the date of final enactment of this section, is considered 
105.30 	timely if the commissioner failed to take the action in a timely manner as a result of the 
105.31 	budget-related shutdown of the Department of Revenue and the action is taken by the 
105.32 	commissioner within 30 days after the date of final enactment of this section. This section 
105.33 	does not, however, extend any statute of limitations concerning the assessment of tax.
106.1 	(c)(1) If the commissioner of revenue determines that the state shutdown has made 
106.2 	it impractical for property tax administrators to take an action or make a determination 
106.3 	in 2011 by the date specified in law, the commissioner may by order either eliminate the 
106.4 	mandatory nature of the action or determination, or allow more time for it to be done, 
106.5 	provided that the commissioner also determines that taxpayers will not be significantly 
106.6 	prejudiced by the elimination or delay.
106.7 	(2) An appeal may not be taken from an order of the commissioner made in the 
106.8 	exercise of a discretionary authority granted in this paragraph. This paragraph does not 
106.9 	limit or modify the provisions of law that govern appeals of the local property taxes 
106.10 	that are affected by an order made under the authority of this section, including but not 
106.11 	limited to Minnesota Statutes, section 278.01.

106.12 	EFFECTIVE DATE. This section is effective the day following final enactment. 
106.13 	Paragraph (a) is effective only to periods of limitation that otherwise expire or expired 
106.14 	after June 30, 2011, and before 30 days after the date of final enactment of this section.

106.15 	Sec. 7. PURPOSE STATEMENTS; TAX EXPENDITURES.
 106.16 		Subdivision 1.Authority. This section is intended to fulfill the requirement under 
106.17 	Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax 
106.18 	expenditure provide a purpose for the tax expenditure and a standard or goal against 
106.19 	which its effectiveness may be measured.
106.20 		Subd. 2.Estate tax exclusion for qualified farm and small business property.
 106.21 	The provisions of article 1, sections 3 through 8, providing an estate tax subtraction of 
106.22 	the combined value of qualified farm property and qualified small business property up 
106.23 	to $4,000,000 from the federal adjusted taxable estate, are intended to provide estate tax 
106.24 	reductions to owner-operators of family farms and small businesses to allow retention and 
106.25 	continued operation of those farms and businesses by the families.
106.26 		Subd. 3.Federal update. The provisions of article 2, conforming Minnesota 
106.27 	individual income, corporate franchise, and estate taxes to changes in federal law, are 
106.28 	intended to simplify compliance with and administration of those taxes.
106.29 		Subd. 4.Sales tax exemption for ring tones. The provisions of article 3, section 1, 
106.30 	exempting ring tones from sales taxation are intended (1) to bring the state of Minnesota 
106.31 	into compliance with the requirements of the streamlined sales tax agrement and (2) to 
106.32 	simplify the tax and to make compliance with the sales tax by remote sellers easier to 
106.33 	encourage congress to enact federal legislation allowing state and local governments to 
106.34 	require remote sellers to collect use tax on behalf of the state and its local governments.
107.1 		Subd. 5.Minerals processing equipment. The provisions of article 3, section 
107.2 	6, extending the sales tax exemption for certain equipment used in processing of 
107.3 	minerals is intended to provide sales tax treatment for the nonferrous mining industry 
107.4 	equivalent to that provided to the taconite mining industry. Because these purchases are 
107.5 	intermediate inputs to production, the legislature does not consider this allowance to be 
107.6 	a tax expenditure.
107.7 		Subd. 6.Sales tax exemption for resold admission tickets. The provisions of 
107.8 	article 3, section 8, providing an exemption for resold admission tickets by allowing resale 
107.9 	ticket sellers to claim a refund or provide a credit to the purchaser of resold tickets for 
107.10 	the value of sales tax paid on the original ticket, is intended to reduce the competitive 
107.11 	advantage of ticket resellers that do not have nexus in Minnesota requiring them to 
107.12 	collect Minnesota sales tax and to ensure that resold admission tickets are subject to 
107.13 	sales tax only on the full, final retail price of the tickets. As a result, the legislature does 
107.14 	not consider this to be a tax expenditure.
107.15 		Subd. 7.Sales tax exemption for sales to townships. The provisions of article 3, 
107.16 	sections 10 and 11, exempting goods and services purchased by townships, is intended 
107.17 	to provide state assistance for the functions of Minnesota townships not exempted under 
107.18 	current law. 
107.19 		Subd. 8.Sales tax exemption; water purchases. The provisions of article 3, 
107.20 	section 11, exempting water purchases by fire departments, fire protection districts, and 
107.21 	fire companies is intended to provide state assistance for this public safety function 
107.22 	of Minnesota local governments.
107.23 		Subd. 9.Emergency vehicles. The provisions of article 3, section 12, extending 
107.24 	the sales tax exemption for lease of ambulances to other emergency vehicles are intended 
107.25 	to clarify the exemption and to provide consistent treatment of emergency vehicles. The 
107.26 	underlying purpose of the exemption is to provide state assistance to local governments 
107.27 	and other organizations that provide emergency response services.

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

107.29 	Sec. 8. EFFECTIVE DATE; RELATIONSHIP TO OTHER APPROPRIATIONS.
 107.30 	Unless otherwise specified, this act is effective retroactively from July 1, 2011, 
107.31 	and supersedes and replaces funding authorized by order of the Second Judicial District 
107.32 	Court in Case No. 62-CV-11-5203.

108.1 	ARTICLE 11
108.2 	TOBACCO BONDS

108.3 	Section 1. Minnesota Statutes 2010, section 16A.151, subdivision 2, is amended to 
108.4 	read:
108.5 		Subd. 2.Exceptions. (a) If a state official litigates or settles a matter on behalf of 
108.6 	specific injured persons or entities, this section does not prohibit distribution of money 
108.7 	to the specific injured persons or entities on whose behalf the litigation or settlement 
108.8 	efforts were initiated. If money recovered on behalf of injured persons or entities cannot 
108.9 	reasonably be distributed to those persons or entities because they cannot readily be 
108.10 	located or identified or because the cost of distributing the money would outweigh the 
108.11 	benefit to the persons or entities, the money must be paid into the general fund.
108.12 	(b) Money recovered on behalf of a fund in the state treasury other than the general 
108.13 	fund may be deposited in that fund.
108.14 	(c) This section does not prohibit a state official from distributing money to a person 
108.15 	or entity other than the state in litigation or potential litigation in which the state is a 
108.16 	defendant or potential defendant.
108.17 	(d) State agencies may accept funds as directed by a federal court for any restitution 
108.18 	or monetary penalty under United States Code, title 18, section 3663(a)(3) or United 
108.19 	States Code, title 18, section 3663A(a)(3). Funds received must be deposited in a special 
108.20 	revenue account and are appropriated to the commissioner of the agency for the purpose 
108.21 	as directed by the federal court.
108.22 	(e) Tobacco settlement revenues as defined in section 16A.95, subdivision 1, 
108.23 	paragraph (t), may be deposited as provided in section 16A.95, subdivision 12.

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

108.25 	Sec. 2. [16A.94] TOBACCO BONDS.
108.26 	The commissioner may sell and issue debt under either or both of sections 16A.95 
108.27 	and 16A.96, but the net proceeds of bonds issued and sold under those sections together 
108.28 	must not exceed $640,000,000 during fiscal years 2012 and 2013.

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

108.30 	Sec. 3. [16A.95] TOBACCO SECURITIZATION BONDS.
108.31 		Subdivision 1.Definitions. The definitions in this subdivision apply to this section.
109.1 	(a) "Authority" means the Tobacco Securitization Authority created and established 
109.2 	under subdivision 3.
109.3 	(b) "Authorized officer" means any of the members of the authority identified and 
109.4 	described in subdivision 3.
109.5 	(c) "Bond" means any instrument evidencing the obligation to pay money authorized 
109.6 	or issued by the authority as provided by this section, including without limitation, bonds, 
109.7 	notes, or certificates.
109.8 	(d) "Bondholder" means, in the case of a bond issued in registered form, the 
109.9 	registered owner of the bond and otherwise, the owner of the bond.
109.10 	(e) "Commissioner" means the commissioner of management and budget.
109.11 	(f) "Consent judgment" means the consent judgment, as the same has been and may 
109.12 	be corrected, amended, or modified, in the action styled as The State of Minnesota, By 
109.13 	Hubert Humphrey, III, Its attorney general, and Blue Cross and Blue Shield of Minnesota 
109.14 	v. Philip Morris Incorporated, et al., No. C1-94-8565 (Minnesota District Court, Second 
109.15 	Judicial District, May 8, 1998).
109.16 	(g) "General tobacco subaccount" means the account established by the authority 
109.17 	within the tobacco settlement recovery account established under subdivision 12 for 
109.18 	the net proceeds of bonds.
109.19 	(h) "Settlement agreement" means the settlement agreement and stipulation for entry 
109.20 	of consent judgment, dated May 8, 1998, between the State of Minnesota, By Hubert 
109.21 	Humphrey, III, Its attorney general, and Blue Cross and Blue Shield of Minnesota, on 
109.22 	the one hand, and Philip Morris Incorporated, et al., on the other hand, and the subject 
109.23 	of the consent judgment.
109.24 	(i) "Net proceeds of bonds" means the gross proceeds of the sale of bonds issued 
109.25 	under subdivision 5, less any amounts applied or to be applied to pay transaction and 
109.26 	administrative expenses, including underwriting discount, to pay capitalized interest 
109.27 	and to fund any reserves deemed necessary or appropriate by the authority, but does not 
109.28 	include any investment earnings realized thereon.
109.29 	(j) "Participating manufacturer" means a tobacco product manufacturer that is or 
109.30 	becomes a signatory to the settlement agreement.
109.31 	(k) "Pledged tobacco revenues" means the state's tobacco settlement revenues sold 
109.32 	to the authority under the sale agreement and pledged by the authority for the payment of 
109.33 	bonds and any related bond facility.
109.34 	(l) "Related bond facility" means any interest rate exchange or similar agreement or 
109.35 	any bond insurance policy, letter of credit or other credit enhancement facility, liquidity 
110.1 	facility, guaranteed investment or reinvestment agreement, or other similar agreement, 
110.2 	arrangement, or contract.
110.3 	(m) "Residual amount in tobacco settlement revenues" means any tobacco settlement 
110.4 	revenues determined as moneys received but not required for the identified period in 
110.5 	which revenues are received, to pay principal or interest on bonds or administrative or 
110.6 	transaction expenses of the authority, or to fund reserves or other requirements relating to 
110.7 	bonds issued or related bond facilities made under this section.
110.8 	(n) "Sale agreement" means any agreement authorized as provided in this section 
110.9 	in which the state provides for the sale of all or a portion of the tobacco settlement 
110.10 	revenues to the authority.
110.11 	(o) "State" means the state of Minnesota.
110.12 	(p) "Tobacco settlement bond proceeds fund" is established within the state treasury 
110.13 	and consists of the net proceeds from any sale, conveyance, or transfer of the state's 
110.14 	tobacco settlement revenues from the authority.
110.15 	(q) "Tobacco settlement recovery account" is the account established by the authority 
110.16 	outside of the state's treasury.
110.17 	(r) "Tobacco settlement revenues subaccount" means the account established by the 
110.18 	authority within the tobacco settlement recovery account established under subdivision 
110.19 	12 for receipt of tobacco settlement revenues and for payment of debt service of bonds 
110.20 	authorized under this section.
110.21 	(s) "Tobacco settlement residual subaccount" means the account established by the 
110.22 	authority within the tobacco settlement recovery account established under subdivision 12 
110.23 	for receipt of the residual amount in the tobacco settlement revenues subaccount.
110.24 	(t) "Tobacco settlement revenues" means all tobacco settlement payments received 
110.25 	by the state on and after the effective date of this section and required to be made under 
110.26 	the terms of the settlement agreement by participating manufacturers, and the state's rights 
110.27 	to receive the tobacco settlement payments on and after the effective date of this section, 
110.28 	exclusive of any payments made with respect to liability to make those payments for 
110.29 	calendar years completed before the effective date of this section.
110.30 		Subd. 2. Ownership, transfer, and sale of state's right to tobacco settlement 
110.31 	revenues.  All tobacco settlement revenues received and to be received by the state are 
110.32 	the property of the state, to be used as provided by law, including a sale, assignment, or 
110.33 	transfer of the right to receive the tobacco settlement revenues under this subdivision. 
110.34 	During fiscal years 2012 and 2013, the commissioner may sell, convey, or otherwise 
110.35 	transfer to the authority, and may take any action necessary to facilitate and complete the 
110.36 	sale, conveyance, or transfer to the authority the tobacco settlement revenues in exchange 
111.1 	for the net proceeds of bonds and a right to the residual amount in the tobacco settlement 
111.2 	revenues subaccount. Unless otherwise directed by statute, the net proceeds of any such 
111.3 	sale, conveyance, or transfer shall be deposited in the general tobacco subaccount. The 
111.4 	authority's purchased interest in tobacco settlement revenues received by the state from 
111.5 	time to time shall be deposited in the tobacco settlement revenues subaccount, and the 
111.6 	residual amount in tobacco settlement revenues received by the state from time to time 
111.7 	shall be deposited in the tobacco settlement residual subaccount, in each case to be applied 
111.8 	for the purposes and in the manner described in this section.
111.9 	Any sale, conveyance, or other transfer authorized by this subdivision shall be 
111.10 	evidenced by an instrument or agreement in writing signed on behalf of the state by 
111.11 	the commissioner. A certified copy of the instrument or agreement shall be filed with 
111.12 	the commissioner and the chairs of the senate Finance Committee and the house of 
111.13 	representatives Ways and Means Committee promptly upon execution and delivery 
111.14 	thereof. The instrument or agreement shall require, as a condition of the sale, conveyance, 
111.15 	or other transfer, that the authority notify the commissioner promptly upon the issuance, 
111.16 	sale, and delivery thereof if any bonds are issued that are secured by any of the tobacco 
111.17 	settlement revenues and provide the commissioner with all information on the distribution 
111.18 	of the bond proceeds.  The commissioner shall submit a report to the chairs of the senate 
111.19 	finance committee and the house of representatives ways and means committee that 
111.20 	includes all of the information provided to the commissioner by the authority under 
111.21 	this subdivision. The instrument or agreement may include an irrevocable direction to 
111.22 	pay all or a specified portion of the tobacco settlement revenues directly to or upon the 
111.23 	order of the authority, or to any escrow agent or any trustee under an indenture or other 
111.24 	agreement securing any bonds issued or related bond facilities made under this section. 
111.25 	Upon execution and delivery of the sale agreement as provided in this section, the sale, 
111.26 	conveyance, or other transfer of the right to receive the tobacco settlement revenues, shall, 
111.27 	for all purposes, be a true sale and absolute conveyance of all right, title, and interest 
111.28 	therein and not as a pledge or other security interest for any borrowing, valid, binding, 
111.29 	and enforceable in accordance with the terms thereof and such instrument or agreements 
111.30 	and any related instrument, agreement, or other arrangement, including any pledge, grant 
111.31 	of security interest, or other encumbrance made by authority to secure any bonds issued 
111.32 	by the authority, and shall not be subject to disavowal, disaffirmance, cancellation, or 
111.33 	avoidance by reason of insolvency of any party, lack of consideration, or any other fact, 
111.34 	occurrence, or rule of law.  On and after the effective date of the sale of any portion, 
111.35 	including all of the tobacco settlement revenues, the state shall have no right, title or 
111.36 	interest in or to the portion of the tobacco settlement revenues sold, and the portion of 
112.1 	the tobacco settlement revenues sold shall be the property of the authority, and shall be 
112.2 	received, held, and disbursed by the authority in a trust fund outside the state treasury. 
112.3 	Any portions of the tobacco settlement revenues sold to the authority and held in trust may 
112.4 	be invested in investments and deposit accounts or certificates, and with security, agreed 
112.5 	upon with the bondholders or a trustee for the bondholders.
112.6 	The procedures and requirements set forth in this subdivision shall be the sole 
112.7 	procedures and requirements applicable to the sale of the tobacco settlement revenues.
112.8 		Subd. 3.Establishment and powers of authority.   (a) The authority is hereby 
112.9 	established as a body corporate and politic and a public instrumentality of, but having 
112.10 	a legal existence independent and separate from the state and, accordingly, the assets, 
112.11 	liabilities, and funds of the authority shall be neither consolidated nor commingled with 
112.12 	those of the state treasury, provided that the assets, liabilities, and funds of the authority 
112.13 	shall be held by a duly designated agent or fiduciary of the authority. If the authority does 
112.14 	not designate a fiduciary or an agent for the purposes of this subdivision, the assets and 
112.15 	funds of the authority shall be held in the state treasury. The authority and its corporate 
112.16 	existence shall continue until 12 months after all its liabilities have been met or otherwise 
112.17 	discharged. Upon the termination of the existence of the authority, all of its rights and 
112.18 	property shall pass to and be vested in the state.  The authority shall be established for the 
112.19 	express limited public purposes set forth in this section, and no part of the net earnings of 
112.20 	the authority shall inure to any private individual.
112.21 	(b) The authority shall be governed by a three-member board consisting of the 
112.22 	commissioner, the commissioner of revenue, and the commissioner of health.  The 
112.23 	commissioner shall serve as the chair and chief executive officer of the authority, 
112.24 	who shall sign instruments or agreements authorized by this section on behalf of the 
112.25 	authority; provided that the authority may by resolution authorize a member other than 
112.26 	the commissioner to sign authorized instruments or agreements.  The authority may 
112.27 	elect other officers as necessary from its members. The authority may also appoint a 
112.28 	nonremunerated chief financial officer who may or may not be a member of the authority 
112.29 	in order to provide financial analysis and advice regarding any transaction of the authority. 
112.30 	The powers of the authority shall be subject to the terms, conditions, and limitations 
112.31 	contained within this section, and any applicable covenants or agreements of the authority 
112.32 	in any indenture or other agreement relating to any then outstanding bonds or related bond 
112.33 	facilities.  The authority may enter into contracts regarding any matter connected with 
112.34 	any corporate purpose within the objects and purposes of this section.  The members of 
112.35 	the authority shall receive no salary or other compensation, either direct or indirect, for 
112.36 	serving as members of the authority, other than reimbursement for actual and necessary 
113.1 	expenses incurred in the performance of such person's duties.  Notwithstanding the 
113.2 	foregoing, the authority shall not be authorized to make any covenant, pledge, promise, or 
113.3 	agreement purporting to bind the state with respect to tobacco settlement revenues, except 
113.4 	as otherwise specifically authorized by this section.
113.5 	(c) A majority of the authority, excluding vacancies, constitutes a quorum to conduct 
113.6 	its business, to exercise its powers, and for all other purposes.
113.7 	(d) The authority may conduct its business as provided under section 13D.015, 
113.8 	including teleconference calls or interactive video, that allows for an interaction between 
113.9 	members.  If a meeting is conducted under this paragraph, a specific location must be 
113.10 	available for the public to attend the meeting and at least one member must be present at 
113.11 	that location.
113.12 	(e) The authority may not file a voluntary petition under or be or become a debtor 
113.13 	or bankrupt under the federal bankruptcy code or any other federal or state bankruptcy, 
113.14 	insolvency, or moratorium law or statute as may, from time to time, be in effect, and 
113.15 	neither any public officer nor any organization, entity, or other person shall authorize the 
113.16 	authority to be or become a debtor or bankrupt under the federal bankruptcy code or any 
113.17 	other federal or state bankruptcy, insolvency, or moratorium law or statute, as may, from 
113.18 	time to time be in effect.
113.19 	(f) The authority may not guarantee the debts of another.
113.20 	(g) The commissioner shall provide administrative services to the authority.
113.21 	(h) The authority may accept appropriations, gifts, grants, bequests, and devises, 
113.22 	and use or dispose of them for its purposes.  All gifts, grants, bequests, and revenues from 
113.23 	those sources are appropriated to the authority.
113.24 	(i) Proceeds of the authority's bonds, notes, and other obligations; amounts granted 
113.25 	or appropriated to the authority for bond debt service reserves; income from investment; 
113.26 	money in the funds; and all revenues from fees and charges of the authority including 
113.27 	rentals, royalties, dividends, or other proceeds are annually appropriated to the authority 
113.28 	for the accomplishment of its corporate purposes and must be spent, administered, 
113.29 	and accounted for in accordance with the applicable provisions of all bond and note 
113.30 	resolutions, indentures, and other instruments, contracts, and agreements of the authority. 
113.31 	Notwithstanding section 16A.28, these appropriations are available until expended.
113.32 		Subd. 4.Certain powers of the authority. The authority shall have the power to:
113.33 	(1) sue and be sued;
113.34 	(2) have a seal and alter the same at pleasure;
113.35 	(3) make and alter bylaws for its organization and internal management;
114.1 	(4) make and execute contracts and all other instruments necessary or convenient 
114.2 	for the exercise of its powers and functions under this subdivision, including without 
114.3 	limitation the purchase from the state of all or a portion of the right to receive tobacco 
114.4 	settlement revenues, and request the attorney general to commence any action to protect 
114.5 	or enforce any right conferred upon it by any law, contract, or other agreement;
114.6 	(5) retain or contract for the services of  underwriters, financial advisors, accountants 
114.7 	or other consultants or agents;
114.8 	(6) pay its operating expenses and its financing costs, including its reasonable costs 
114.9 	of issuance and sale of bonds and those of the attorney general, if any;
114.10 	(7) borrow money in its name, issue negotiable bonds as named by the authority, and 
114.11 	provide for the rights of the holders thereof as otherwise provided in this section;
114.12 	(8) procure insurance against any loss in connection with its activities, properties, 
114.13 	and assets in such amount and from such insurers as it deems desirable;
114.14 	(9) invest any funds or other moneys under its custody and control in investment 
114.15 	securities or under any related bond facility;
114.16 	(10) as security for the payment of the principal of and interest on any bonds issued 
114.17 	by it under this section and any agreement made in connection therewith and for its 
114.18 	obligations under any related bond facility, pledge all or any part of the tobacco settlement 
114.19 	revenues;
114.20 	(11) establish and create debt service reserve funds and capitalized interest accounts 
114.21 	and deposit therein proceeds of bonds in such amount or amounts as shall be provided 
114.22 	by the resolutions or trust indentures for the bonds; and
114.23 	(12) do any and all things necessary and proper to carry out its purposes and exercise 
114.24 	the powers expressly given and granted in this section.
114.25 		Subd. 5.Bonds of the authority. (a) The authority shall have power and is hereby 
114.26 	authorized to issue bonds from time to time in one or more series, in an aggregate principal 
114.27 	amount no greater than $900,000,000, excluding refunding bonds sold and issued under 
114.28 	this section, to provide funds not to exceed $640,000,000 and subject to the limitation in 
114.29 	section 16A.94, for the purchase of all or a portion of the tobacco settlement revenues 
114.30 	pursuant to subdivision 2, and also to provide sufficient funds for the establishment of 
114.31 	a debt service reserve fund, and the payment or provision for capitalized interest and 
114.32 	financing costs, including, without limitation, the cost of any related credit facility.
114.33 	The issuance of bonds shall be authorized by a resolution of the authority, adopted 
114.34 	by a majority of the members of the authority without further authorization or approval. 
114.35 	The issue of the bonds of the authority shall be special limited revenue obligations payable 
114.36 	from and secured by a pledge of the pledged tobacco revenues, those proceeds of bonds 
115.1 	deposited in a debt service reserve fund for the benefit of bondholders, and earnings on 
115.2 	funds of the authority, upon terms and conditions as specified by the authority in the 
115.3 	resolution under which the bonds are issued or in a related trust indenture.
115.4 	The authority shall have the power and is hereby authorized from time to time to 
115.5 	issue bonds, whenever it deems refunding expedient, to refund any outstanding bonds by 
115.6 	the issuance of new bonds, provided that the refunding bonds mature not more than 30 
115.7 	years after the date of issuance as may be determined by the authority.  The refunding 
115.8 	bonds may be exchanged for the bonds to be refunded or sold and the proceeds applied to 
115.9 	the purchase, redemption, or payment of the bonds to be refunded.
115.10 	(b) The bonds of each issue shall be dated, shall bear interest, which may be 
115.11 	includable in or excludable from the gross income of the owners for federal income tax 
115.12 	purposes, at fixed or variable rates, payable at or prior to maturity, and shall mature 
115.13 	at such time or times, not more than 30 years after the date of issuance, as may be 
115.14 	determined by the authority, and may be made redeemable before maturity, at the option 
115.15 	of the authority, at such price or prices and under such terms and conditions as may be 
115.16 	fixed by the authority.  The principal and interest of the bonds may be made payable 
115.17 	in any lawful medium.  The resolution of the authority approving the issuance of the 
115.18 	bonds shall determine the form of the bonds and the manner of execution of the bonds 
115.19 	and shall fix the denomination or denominations of the bonds and the place or places of 
115.20 	payment of principal and interest thereof, which may be at any bank or trust company 
115.21 	within or outside the state.  If any officer whose signature or a facsimile thereof appears 
115.22 	on any bonds shall cease to be an officer before the delivery of the bonds, the signature 
115.23 	or facsimile shall nevertheless be valid and sufficient for all purposes the same as if the 
115.24 	officer had remained in office until such delivery.
115.25 	(c) The authority may sell such bonds at either public or private sale upon terms 
115.26 	as the commissioner shall determine are not inconsistent with this section and the bonds 
115.27 	may be sold at any price or percentage of par value.  Any bid received may be rejected by 
115.28 	the authority.  The proceeds of the bonds shall be disbursed for the purposes for which 
115.29 	the bonds were issued under the restrictions as the sale agreement and the resolution 
115.30 	authorizing the issuance of the bonds or the related trust indenture may provide.  The bonds 
115.31 	shall be issued upon approval of the authority and without any other approvals, filings, 
115.32 	proceedings or the happening of any other conditions or things other than the approvals, 
115.33 	findings, proceedings, conditions, and things that are specified and required by this section.
115.34 	(d) Any pledge made by the authority shall be valid and binding at the time the 
115.35 	pledge is made.  The assets, property, revenues, reserves, or earnings so pledged shall 
115.36 	immediately be subject to the lien of the pledge without any physical delivery thereof or 
116.1 	further act, and the lien of any pledge shall be valid and binding as against all parties 
116.2 	having claims of any kind in tort, contract, or otherwise against the authority, irrespective 
116.3 	of whether such parties have notice thereof.  Notwithstanding any other provision of law 
116.4 	to the contrary, neither the resolution nor any indenture or other instrument by which a 
116.5 	pledge is created or by which the authority's interest in pledged assets, property, revenues, 
116.6 	reserves, or earnings is assigned need be filed, perfected, or recorded in any public records 
116.7 	in order to protect the pledge or perfect the lien as against third parties, except that a copy 
116.8 	shall be filed in the records of the authority.
116.9 	(e) Whether or not the bonds of the authority are of such form and character as to 
116.10 	be negotiable instruments under the terms of the Uniform Commercial Code, the bonds 
116.11 	are hereby made negotiable instruments for all purposes, subject only to the provisions of 
116.12 	the bonds for registration.
116.13 	(f) At the sole discretion of the authority, any bonds issued by the authority and 
116.14 	any related bond facility made under the provisions of this section shall be secured by a 
116.15 	resolution or trust indenture by and between the authority and the indenture trustee, which 
116.16 	may be any trust company or bank having the powers of a trust company, whether located 
116.17 	within or outside the state.  The trust indenture or resolution providing for the issuance 
116.18 	of the bonds shall, without limitation, (1) provide for the creation and maintenance of 
116.19 	reserves as the authority shall determine to be proper; (2) include covenants setting forth 
116.20 	the duties of the authority in relation to the bonds, the income of the authority, the related 
116.21 	sale agreement and the related tobacco settlement revenues; (3) contain provisions relating 
116.22 	to the transfer of the residual interest upon receipt of the tobacco settlement revenues; (4) 
116.23 	contain provisions respecting the custody, safeguarding, and application of all moneys and 
116.24 	securities; (5) contain provisions for protecting and enforcing against the authority or the 
116.25 	state the rights and remedies pursuant thereto and to the sale agreement of the owners of 
116.26 	the bonds and any provider of a related bond facility as may be reasonable and proper 
116.27 	and not in violation of law; and (6) contain other provisions as the authority may deem 
116.28 	reasonable and proper for priorities and subordination among the owners of the bonds and 
116.29 	providers of related bond facilities.  Any reference in this section to a resolution of the 
116.30 	authority shall include any trust indenture authorized thereby.
116.31 	(g) The net proceeds of any sale, conveyance, or transfer by the state of tobacco 
116.32 	settlement revenues shall be deposited into the authority's general tobacco subaccount. The 
116.33 	authority shall transfer all moneys in the general tobacco subaccount to the commissioner 
116.34 	for deposit in the tobacco settlement bond proceeds fund. Any residual amount in tobacco 
116.35 	settlement revenues shall be deposited in the tobacco settlement residual subaccount. The 
117.1 	balance in the tobacco residual subaccount shall be transferred to the commissioner for 
117.2 	deposit in the general fund, as provided in subdivision 12, paragraph (b).
117.3 	(h) The authority may enter into, amend, or terminate, as it determines to be 
117.4 	necessary or appropriate, any related bond facility (1) to facilitate the issuance, sale, resale, 
117.5 	purchase, repurchase, or payment of bonds, interest rate savings or market diversification, 
117.6 	or the making or performance of swap contracts, including without limitation bond 
117.7 	insurance, letters of credit and liquidity facilities, or (2) to attempt to manage or hedge 
117.8 	risk or achieve a desirable effective interest rate or cash flow. Such facility shall be made 
117.9 	upon the terms and conditions established by the authority, including without limitation 
117.10 	provisions as to security, default, termination, payment, remedy, jurisdiction, and consent 
117.11 	to service of process.
117.12 	(i) The authority may enter into, amend, or terminate, as it deems to be necessary 
117.13 	or appropriate, any related bond facility to place the obligations or investments of the 
117.14 	authority, as represented by the bonds or the investment of reserves securing the bonds or 
117.15 	related bond facilities or other tobacco settlement revenues or its other assets, in whole 
117.16 	or in part, on the interest rate, cash flow, or other basis approved by the authority, which 
117.17 	facility may include without limitation contracts commonly known as interest rate swap 
117.18 	agreements, forward purchase contracts, or guaranteed investment contracts and futures or 
117.19 	contracts providing for payments based on levels of, or changes in, interest rates.  These 
117.20 	contracts or arrangements may be entered into by the authority in connection with, or 
117.21 	incidental to, entering into, or maintaining any (1) agreement that secures bonds of the 
117.22 	authority or (2) investment or contract providing for investment of reserves or similar 
117.23 	facility guaranteeing an investment rate for a period of years not to exceed the underlying 
117.24 	term of the bonds.  The determination by the authority that a related bond facility or 
117.25 	the amendment or termination thereof is necessary or appropriate as aforesaid shall be 
117.26 	conclusive.  Any related bond facility may contain such provisions as to security, default, 
117.27 	termination, payment, remedy, jurisdiction, and consent to service of process, and other 
117.28 	terms and conditions as determined by the authority, after giving due consideration to the 
117.29 	creditworthiness of the counterparty or other obligated party, including any rating by any 
117.30 	nationally recognized rating agency, and any other criteria as may be appropriate.
117.31 	(j) Bonds or any related bond facility may contain a recital that they are issued or 
117.32 	executed, respectively, pursuant to this section, which recital shall be conclusive evidence 
117.33 	of their validity, respectively, and the regularity of the proceedings relating thereto.
117.34 	(k) No member or officer of the authority or any person executing the bonds is liable 
117.35 	personally on the bonds or is subject to any personal liability or accountability by reason 
117.36 	of their issuance, or is liable for any other debt or obligation of the authority.
118.1 	(l) Information in any register of ownership of bonds or certificates is nonpublic data 
118.2 	under section 13.02, subdivision 9, or private data on individuals under section 13.02, 
118.3 	subdivision 12. The information is open only to the subject of it, except as disclosure:
118.4 	(1) is necessary for the registrar, the commissioner, or the legislative auditor to 
118.5 	perform a duty;
118.6 	(2) is requested by an authorized representative of the commissioner of revenue, 
118.7 	the attorney general, or the United States commissioner of internal revenue to determine 
118.8 	the application of a tax; or
118.9 	(3) is required under section 13.03, subdivision 4.
118.10 	(m) The bonds of the authority are not subject to chapter 16C.
118.11 	(n) The commissioner and any other member of the authority charged with the 
118.12 	responsibility of issuing bonds for or on behalf of the authority, may enter into written 
118.13 	agreements or contracts relating to the continuing disclosure of information necessary to 
118.14 	comply with, or facilitate the issuance of bonds in accordance with, federal securities 
118.15 	laws, rules, and regulations, including Securities and Exchange Commission rules and 
118.16 	regulations, in Code of Federal Regulations, title 17, section 240.15c2-12. An agreement 
118.17 	may be in the form of covenants with purchasers and holders of bonds set forth in the order 
118.18 	or resolution authorizing the issuance of the bonds, or a separate document authorized 
118.19 	by the order or resolution.
118.20 		Subd. 6.State not liable on bonds or related bond facilities.   The state is not 
118.21 	liable on bonds of the authority, and no bond or related bond facility shall constitute an 
118.22 	indebtedness or an obligation of the state or any subdivision thereof, within the meaning 
118.23 	of any constitutional or statutory limitation or provision or a charge against the general 
118.24 	credit or taxing powers, if any, of any of them but shall be payable solely from pledged 
118.25 	tobacco revenues.  No owner of any bond or provider of any related bond facility shall 
118.26 	have the right to compel the exercise of the taxing power of the state to pay any principal 
118.27 	installment of, redemption premium, if any, or interest on the bonds or to make any 
118.28 	payment due under any related bond facility.  The bonds must contain on their face a 
118.29 	statement to the effect of this subdivision.
118.30 		Subd. 7.Agreement with the state. (a) The state pledges and agrees with the 
118.31 	authority, and the owners of the bonds of the authority in which the authority has included 
118.32 	such pledge and agreement, that the state shall: (1) irrevocably direct the transfer of 
118.33 	all pledged tobacco revenues received by the state under and in accordance with the 
118.34 	settlement agreement directly to the authority or its assignee; (2) diligently enforce its 
118.35 	right to collect all moneys due from the participating manufacturers under the settlement 
118.36 	agreement, in each case in the manner and to the extent deemed necessary in the judgment 
119.1 	of and consistent with the discretion of the attorney general of the state, provided, 
119.2 	however, that the sale agreement shall provide (i) that the remedies available to the 
119.3 	authority and the bondholders for any breach of the pledges and agreements of the state 
119.4 	set forth in this clause shall be limited to injunctive relief, and (ii) that the state shall be 
119.5 	deemed to have diligently enforced this subdivision so long as there has been no judicial 
119.6 	determination by a court of competent jurisdiction in this state, in an action commenced 
119.7 	by a participating tobacco manufacturer, that the state has failed to diligently enforce this 
119.8 	subdivision; (3) in any materially adverse way, neither amend the settlement agreement 
119.9 	or take any other action that would (i) impair the authority's right to receive pledged 
119.10 	tobacco revenues, or (ii) limit or alter the rights hereby vested in the authority to fulfill 
119.11 	the terms of its agreements with the bondholders, or (iii) impair the rights and remedies 
119.12 	of the bondholders or the security for such bonds until such bonds, together with the 
119.13 	interest thereon and all costs and expenses in connection with any action or proceedings 
119.14 	by or on behalf of the bondholders, are fully paid and discharged, provided, that nothing 
119.15 	herein shall be construed to preclude the state's regulation of smoking, smoking cessation 
119.16 	activities and laws, and taxation and regulation of the sale of cigarettes or the like or to 
119.17 	restrict the right of the state to amend, modify, repeal, or otherwise alter statutes imposing 
119.18 	or relating to the taxes; and (4) not amend, supersede or repeal the settlement agreement or 
119.19 	this section in any way that would materially adversely affect the amount of any payment 
119.20 	to, or the rights to such payments of, the authority or the bondholders.  This pledge and 
119.21 	agreement may be included in the sale agreement and the authority may include this 
119.22 	pledge and agreement in any contract with the bondholders of the authority.
119.23 	(b) The provisions of this section, the bonds issued pursuant to this section, and 
119.24 	the pledges and agreements by the state and the authority to the bondholders shall not 
119.25 	be interpreted or construed to limit or impair the authority or discretion of the attorney 
119.26 	general to administer and enforce provisions of the settlement agreement or to direct, 
119.27 	control, and settle any litigation or arbitration proceeding arising from or relating to the 
119.28 	settlement agreement.
119.29 		Subd. 8.Enforcement of contract.  The provisions of this section and of any 
119.30 	resolution or proceeding authorizing the issuance of bonds or a related bond facility shall 
119.31 	constitute a contract with the holders of the bonds or the related bond facility, and the 
119.32 	provisions thereof shall be enforceable either by mandamus or other proceeding in any 
119.33 	Minnesota court of competent jurisdiction in Ramsey County to enforce and compel the 
119.34 	performance of all duties required by this section and by any resolution authorizing the 
119.35 	issuance of bonds a related bond facility adopted in response hereto.
120.1 		Subd. 9.Bonds as legal investments. Any of the following entities may legally 
120.2 	invest any sinking funds, money, or other funds belonging to them or under their control 
120.3 	in any bonds issued under this section: (1) the state, the investment board, public 
120.4 	officers, municipal corporations, political subdivisions, and public bodies; (2) banks and 
120.5 	bankers, savings and loan associations, credit unions, trust companies, savings banks and 
120.6 	institutions, investment companies, insurance companies, insurance associations, and other 
120.7 	persons carrying on a banking or insurance business; and  (3) personal representatives, 
120.8 	guardians, trustees, and other fiduciaries.
120.9 		Subd. 10.Exemption from taxation. It is hereby determined that the creation of 
120.10 	the authority and the carrying out of its corporate purposes are in all respects for the 
120.11 	benefit of the people of the state and are public purposes.  Accordingly, the property of the 
120.12 	authority, its income, and its operations shall be exempt from taxation.  The authority shall 
120.13 	not be required to pay any fees, taxes, or assessments of any kind, whether state or local, 
120.14 	including, but not limited to, fees, taxes, ad valorem taxes on real property, sales taxes 
120.15 	or other taxes, upon or with respect to any property owned by it or under its jurisdiction, 
120.16 	control or supervision, or upon the uses thereof, or upon or with respect to its activities or 
120.17 	operations in furtherance of the powers conferred upon it by this section.
120.18 		Subd. 11.Report; audit. The authority shall report to the legislature and the 
120.19 	governor by the January 15 following the end of each fiscal year.  The report must include 
120.20 	a complete operating and financial statement covering the authority's operations during 
120.21 	the fiscal year, including amounts of income from all sources.  Books and records of 
120.22 	the authority are subject to audit by the legislative auditor in the manner prescribed for 
120.23 	state agencies.
120.24 		Subd. 12.Tobacco settlement recovery account. (a) The authority shall establish 
120.25 	the tobacco settlement recovery account, which shall consist of three subaccounts: (1) 
120.26 	the general tobacco subaccount, (2) the tobacco settlement revenues subaccount, and (3) 
120.27 	the tobacco settlement residual subaccount. The authority shall deposit all moneys paid 
120.28 	pursuant to the settlement agreement, and any other moneys as provided by law into the 
120.29 	several subaccounts of the tobacco settlement recovery account. Money shall be deposited 
120.30 	into the tobacco settlement revenues subaccount and the tobacco settlement residual 
120.31 	subaccount as provided by the terms of this section, including any agreement between 
120.32 	the state and the authority implementing the same. All other moneys available to be 
120.33 	deposited into the tobacco settlement recovery account shall be deposited into the general 
120.34 	tobacco subaccount. An investment made from moneys credited to a specific subaccount 
120.35 	constitutes part of that subaccount and such subaccount shall be credited with all income 
120.36 	from the investment of such moneys. The commissioner may invest the moneys in the 
121.1 	several subaccounts of the tobacco settlement recovery account in the same manner, in 
121.2 	the same types of investments, and subject to the same limitations provided in section 
121.3 	11A.24. Notwithstanding the foregoing, to the extent necessary to preserve the tax-exempt 
121.4 	status of any bonds issued pursuant to this section, the interest on which is intended to be 
121.5 	excludable from the gross income of the owners for federal income tax purposes, moneys 
121.6 	on deposit in the tobacco settlement revenues subaccount and the tobacco settlement 
121.7 	residual subaccount may be invested in obligations the interest upon which is tax exempt 
121.8 	under the provisions of Section 103 of the Internal Revenue Code of 1986, as now or 
121.9 	hereafter amended, or any successor code or provision. 
121.10 	(b) Moneys on deposit in the tobacco settlement residual subaccount shall be 
121.11 	transferred to the commissioner for deposit in the general fund.
121.12 	(c) The amounts deposited into the tobacco settlement bond proceeds fund from the 
121.13 	general tobacco subaccount and interest thereon are appropriated to the commissioner 
121.14 	for payment of working capital, debt service on outstanding obligations of the general 
121.15 	fund, the funding of debt service reserves for the bonds, each as permitted by state and 
121.16 	federal law, nonsalary expenses incurred in conjunction with the sale of the bonds and to 
121.17 	supplement the tobacco settlement residual subaccount to pay for appropriated obligations 
121.18 	of the tobacco settlement recovery account for state fiscal years 2012 and 2013. The 
121.19 	commissioner may transfer the amounts available to reduce debt service on outstanding 
121.20 	obligations of the general fund to the state bond fund under section 16A.641.
121.21 		Subd. 13.Supplemental nature of section; construction and purpose. The 
121.22 	powers conferred by this section shall be in addition to and supplemental to the powers 
121.23 	conferred by any other law, general or special, and may be exercised notwithstanding the 
121.24 	provisions of any other such law.  Insofar as the provisions of this section are inconsistent 
121.25 	with the provisions of any other law, general or special, the provisions of this section 
121.26 	shall be controlling.
121.27 		Subd. 14.Severability. If any provision of this section is held invalid, such 
121.28 	provision shall be deemed to be excised and the invalidity thereof shall not affect any of 
121.29 	the other provisions of this section.  If the application of any provision of this section to 
121.30 	any person or circumstance is held invalid, it shall not affect the application of such 
121.31 	provision to such persons or circumstances other than those as to which it is held invalid.

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

121.33 	Sec. 4. [16A.96] TOBACCO APPROPRIATION BONDS.
121.34 		Subdivision 1.Definitions. (a) The definitions in this subdivision apply to this 
121.35 	section.
122.1 	(b) "Appropriation bond" means a bond, note, or other similar instrument of the state 
122.2 	payable during a biennium in whole or in part from tobacco settlement revenues and 
122.3 	from one or more of the following sources:
122.4 	(1) money appropriated by law in any biennium for debt service due with respect 
122.5 	to obligations described in subdivision 2, paragraph (b);
122.6 	(2) proceeds of the sale of obligations described in subdivision 2, paragraph (b);
122.7 	(3) payments received for that purpose under agreements and ancillary arrangements 
122.8 	described in subdivision 2, paragraph (d); and
122.9 	(4) investment earnings on amounts in clauses (1) to (3).
122.10 	(c) "Consent Judgment" means the Consent Judgment, as the same has been and 
122.11 	may be corrected, amended or modified, in the action styled as The State of Minnesota, By 
122.12 	Hubert Humphrey, III, Its Attorney General, and Blue Cross and Blue Shield of Minnesota 
122.13 	v. Philip Morris Incorporated, et al., No. C1-94-8565 (Minnesota District Court, Second 
122.14 	Judicial District, May 8, 1998).
122.15 	(d) "Debt service" means the amount payable in any biennium of principal, premium, 
122.16 	if any, and interest on appropriation bonds.
122.17 	(e) "Settlement agreement" means the settlement agreement and Stipulation 
122.18 	for Entry of Consent Judgment, dated May 8, 1998, between the State of Minnesota, 
122.19 	By Hubert Humphrey, III, Its Attorney General, and Blue Cross and Blue Shield of 
122.20 	Minnesota, on the one hand, and Philip Morris Incorporated, et al., on the other hand, 
122.21 	and the subject of the Consent Judgment.
122.22 	(f) "Tobacco settlement revenues" means all tobacco settlement payments received 
122.23 	by the state on and after the effective date of this section and required to be made, pursuant 
122.24 	to the terms of the settlement agreement, by participating manufacturers and the state's 
122.25 	rights to receive the tobacco settlement payments on and after the effective date of this 
122.26 	section, exclusive of any payments made with respect to liability to make those payments 
122.27 	for calendar years completed before the effective date of this section.
122.28 		Subd. 2.Authority. (a) Subject to the limitations of this subdivision, the 
122.29 	commissioner may sell and issue appropriation bonds of the state under this section for 
122.30 	public purposes as provided by law. Proceeds of the bonds must be credited to a special 
122.31 	appropriation bond proceeds fund in the state treasury. Net income from investment of the 
122.32 	proceeds, as estimated by the commissioner, must be credited to the special appropriation 
122.33 	bond proceeds fund.
122.34 	(b) Appropriation bonds may be sold and issued in amounts that, in the opinion of 
122.35 	the commissioner, are necessary to provide sufficient funds, not to exceed $640,000,000 
122.36 	and subject to the limitation in section 16A.94, for achieving the purposes authorized as 
123.1 	provided under paragraph (a), and pay debt service, pay costs of issuance, make deposits 
123.2 	to reserve funds, pay the costs of credit enhancement, or make payments under other 
123.3 	agreements entered into under paragraph (d); provided, however, that bonds issued and 
123.4 	unpaid shall not exceed $800,000,000 in principal amount, excluding refunding bonds 
123.5 	sold and issued under subdivision 4.
123.6 	(c) Appropriation bonds may be issued from time to time in one or more series on 
123.7 	the terms and conditions the commissioner determines to be in the best interests of the 
123.8 	state, but the term on any series of bonds may not exceed 30 years. The bonds of each 
123.9 	issue shall be dated and bear interest, and may be includable in or excludable from the 
123.10 	gross income of the owners for federal income tax purposes.
123.11 	(d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any 
123.12 	time thereafter, so long as the appropriation bonds are outstanding, the commissioner 
123.13 	may enter into agreements and ancillary arrangements relating to the appropriation 
123.14 	bonds, including but not limited to trust indentures, liquidity facilities, remarketing or 
123.15 	dealer agreements, letter of credit agreements, insurance policies, guaranty agreements, 
123.16 	reimbursement agreements, indexing agreements, or interest exchange agreements. Any 
123.17 	payments made or received according to the agreement or ancillary arrangement shall be 
123.18 	made from or deposited as provided in the agreement or ancillary arrangement. The 
123.19 	determination of the commissioner included in an interest exchange agreement that the 
123.20 	agreement relates to an appropriation bond shall be conclusive.
123.21 	(e) The commissioner may enter into written agreements or contracts relating to the 
123.22 	continuing disclosure of information necessary to comply with, or facilitate the issuance 
123.23 	of appropriation bonds in accordance with federal securities laws, rules, and regulations, 
123.24 	including Securities and Exchange Commission rules and regulations in Code of Federal 
123.25 	Regulations, title 17, section 240.15c2-12. An agreement may be in the form of covenants 
123.26 	with purchasers and holders of appropriation bonds set forth in the order or resolution 
123.27 	authorizing the issuance of the appropriation bonds, or a separate document authorized 
123.28 	by the order or resolution.
123.29 	(f) The appropriation bonds are not subject to chapter 16C.
123.30 		Subd. 3.Form; procedure. (a) Appropriation bonds may be issued in the form 
123.31 	of bonds, notes, or other similar instruments, and in the manner provided in section 
123.32 	16A.672. In the event that any provision of section 16A.672 conflicts with this section, 
123.33 	this section shall control.
123.34 	(b) Every appropriation bond shall include a conspicuous statement of the limitation 
123.35 	established in subdivision 6.
124.1 	(c) Appropriation bonds may be sold at either public or private sale upon such terms 
124.2 	as the commissioner shall determine are not inconsistent with this section and may be sold 
124.3 	at any price or percentage of par value. Any bid received may be rejected.
124.4 	(d) Appropriation bonds may bear interest at a fixed or variable rate.
124.5 	(e) Notwithstanding any other law, appropriation bonds issued pursuant to this 
124.6 	section shall be fully negotiable.
124.7 		Subd. 4.Refunding bonds. The commissioner from time to time may issue 
124.8 	appropriation bonds for the purpose of refunding any appropriation bonds or tobacco 
124.9 	securitization bonds authorized under section 16A.95 then outstanding, including the 
124.10 	payment of any redemption premiums on the bonds, any interest accrued or to accrue to 
124.11 	the redemption date, and costs related to the issuance and sale of the refunding bonds. The 
124.12 	proceeds of any refunding bonds may, in the discretion of the commissioner, be applied 
124.13 	to the purchase or payment at maturity of the appropriation bonds to be refunded, to the 
124.14 	redemption of the outstanding bonds on any redemption date, or to pay interest on the 
124.15 	refunding bonds and may, pending application, be placed in escrow to be applied to the 
124.16 	purchase, payment, retirement, or redemption. Any escrowed proceeds, pending such 
124.17 	use, may be invested and reinvested in obligations that are authorized investments under 
124.18 	section 11A.24. The income earned or realized on the investment may also be applied 
124.19 	to the payment of the bonds to be refunded or interest or premiums on the refunded 
124.20 	bonds, or to pay interest on the refunding bonds. After the terms of the escrow have 
124.21 	been fully satisfied, any balance of the proceeds and any investment income may be 
124.22 	returned to the general fund or, if applicable, the appropriation bond proceeds account 
124.23 	for use in any lawful manner. All refunding bonds issued under this subdivision must 
124.24 	be prepared, executed, delivered, and secured by appropriations in the same manner as 
124.25 	the bonds to be refunded.
124.26 		Subd. 5.Appropriation bonds as legal investments. Any of the following entities 
124.27 	may legally invest any sinking funds, money, or other funds belonging to them or under 
124.28 	their control in any appropriation bonds issued under this section:
124.29 	(1) the state, the investment board, public officers, municipal corporations, political 
124.30 	subdivisions, and public bodies;
124.31 	(2) banks and bankers, savings and loan associations, credit unions, trust companies, 
124.32 	savings banks and institutions, investment companies, insurance companies, insurance 
124.33 	associations, and other persons carrying on a banking or insurance business; and
124.34 	(3) personal representatives, guardians, trustees, and other fiduciaries.
124.35 		Subd. 6.No full faith and credit; state not required to make appropriations.
 124.36 	The appropriation bonds are not public debt of the state, and the full faith, credit, and 
125.1 	taxing powers of the state are not pledged to the payment of the appropriation bonds or to 
125.2 	any payment that the state agrees to make under this section. Appropriation bonds shall 
125.3 	not be obligations paid directly, in whole or in part, from a tax of statewide application 
125.4 	on any class of property, income, transaction, or privilege. Appropriation bonds shall be 
125.5 	payable in each fiscal year only from amounts that the legislature may appropriate for 
125.6 	debt service for any fiscal year, provided that nothing in this section shall be construed 
125.7 	to require the state to appropriate funds sufficient to make debt service payments with 
125.8 	respect to the bonds in any fiscal year. Appropriation bonds shall be canceled and shall 
125.9 	no longer be outstanding on the earlier of (1) the first day of a fiscal year for which the 
125.10 	legislature shall not have appropriated amounts sufficient for debt service, or (2) the date 
125.11 	of final payment of the principal of and interest on the appropriation bonds.
125.12 		Subd. 7.Appropriation of proceeds. The proceeds of appropriation bonds and 
125.13 	interest credited to the special appropriation bond proceeds fund are appropriated to 
125.14 	the commissioner for payment of working capital, capital expenses, debt service on 
125.15 	outstanding indebtedness of the state and the funding of debt service reserves for the 
125.16 	appropriation bonds, each as permitted by state and federal law, and nonsalary expenses 
125.17 	incurred in conjunction with the sale of the appropriation bonds.
125.18 		Subd. 8.Appropriation for debt service. The amount needed to pay principal and 
125.19 	interest on appropriation bonds issued under this section is appropriated each year to the 
125.20 	commissioner from the general fund subject to the repeal, unallotment under section 
125.21 	16A.152, or cancellation otherwise pursuant to subdivision 6.
125.22 		Subd. 9.Validation. (a) Appropriation bonds issued pursuant to this section may be 
125.23 	validated in the manner provided by this subdivision. Nothing in this subdivision shall be 
125.24 	construed to prevent sale or delivery of any appropriation bonds or notes after entry of a 
125.25 	judgment of validation by the Minnesota Supreme Court.
125.26 	(b) Any appropriation bonds issued pursuant to this section that are validated shall 
125.27 	be validated in the manner provided by this subdivision.
125.28 	(c) The Minnesota Supreme Court shall have original jurisdiction to determine the 
125.29 	validation of appropriation bonds and all matters connected therewith.
125.30 	(d) The commissioner may determine the commissioner's authority to issue 
125.31 	appropriation bonds and the legality of all proceedings in connection therewith. For this 
125.32 	purpose a complaint shall be filed by the commissioner in the Minnesota Supreme Court 
125.33 	against the state and the taxpayers and citizens thereof.
125.34 	(e) As a condition precedent to filing of a complaint for the validation of 
125.35 	appropriation bonds, the commissioner shall take action providing for the issuance of such 
125.36 	appropriation bonds in accordance with law.
126.1 	(f) The complaint shall set out the state's authority to issue appropriation bonds, the 
126.2 	action or proceeding authorizing the issue and its adoption, all other essential proceedings 
126.3 	had or taken in connection therewith, the amount of the bonds to be issued and the 
126.4 	maximum interest they are to bear, and all other pertinent matters.
126.5 	(g) The Minnesota Supreme Court shall issue an order directed against the state 
126.6 	and taxpayers, citizens and others having or claiming any right, title, or interest affected 
126.7 	by the issuance of appropriation bonds, or to be affected thereby, allowing all persons, 
126.8 	in general terms and without naming them, and the state through its attorney general to 
126.9 	appear before the Minnesota Supreme Court at a designated time and place and show why 
126.10 	the complaint should not be granted and the proceedings and bonds validated. A copy of 
126.11 	the complaint and order shall be served on the attorney general at least 20 days before the 
126.12 	time fixed for hearing. The attorney general shall examine the complaint, and, if it appears 
126.13 	or there is reason to believe that it is defective, insufficient, or untrue, or if in the opinion 
126.14 	of the attorney general the issuance of the bonds in question has not been duly authorized, 
126.15 	defense shall be made by the attorney general as the attorney general deems appropriate.
126.16 	(h) Before the date set for hearing, as directed by the Minnesota Supreme Court, 
126.17 	either the clerk of the Minnesota Appellate Courts or the commissioner shall publish a 
126.18 	copy of the order in a legal newspaper of general circulation in Ramsey County and the 
126.19 	state, at least once each week for two consecutive weeks, commencing with the first 
126.20 	publication, which shall not be less than 20 days before the date set for hearing. By this 
126.21 	publication, all taxpayers, citizens, and others having or claiming any right, title or interest 
126.22 	in the state, are made parties defendant to the action and the Minnesota Supreme Court has 
126.23 	jurisdiction of them to the same extent as if named as defendants in the complaint and 
126.24 	personally served with process.
126.25 	(i) Any taxpayer, citizen, or person interested may become a party to the action by 
126.26 	moving against or pleading to the complaint at or before the time set for hearing. The 
126.27 	Minnesota Supreme Court shall determine all questions of law and fact and make such 
126.28 	orders as will enable it to properly try and determine the action and render a final judgment 
126.29 	within 30 days of the hearing with the least possible delay.
126.30 	(j) If the judgment validates such appropriation bonds, such judgment is forever 
126.31 	conclusive as to all matters adjudicated and as against all parties affected and all others 
126.32 	having or claiming any right, title, or interest affected by the issuance of said bonds, 
126.33 	or to be affected in any way thereby, and the validity of said bonds or of any revenues 
126.34 	pledged for the payment thereof, or of the proceedings authorizing the issuance thereof, 
126.35 	including any remedies provided for their collection, shall never be called in question in 
126.36 	any court by any person or party.
127.1 	(k)(1) Bonds, when validated under this section, shall have stamped or written 
127.2 	thereon, by the proper officers of the state issuing them, a statement in substantially the 
127.3 	following form: "This bond is one of a series of bonds which were validated by judgment 
127.4 	of the Supreme Court of the State of Minnesota, rendered on ....., (year) ......"
127.5 	(2) A certified copy of the judgment or decree shall be received as evidence in any 
127.6 	court in this state.
127.7 	(l) The costs shall be paid by the state, except when a taxpayer, citizen, or other 
127.8 	person contests the action or intervenes, the court may tax the whole or any part of the 
127.9 	costs against the person is equitable.
127.10 	(m) A justice of the Minnesota Supreme Court is not disqualified in any validation 
127.11 	action because the justice is a landowner or taxpayer of the state.

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