<a id="pl.1.3"></a><var>1.3</var>zone and economic development powers; eliminating obsolete provisions;<br/>
<a id="pl.1.4"></a><var>1.4</var>amending Minnesota Statutes 2010, sections 16C.16, subdivision 7; 41A.036, <br/>
<a id="pl.1.5"></a><var>1.5</var>subdivision 2; 117.025, subdivision 10; 270B.14, subdivision 3; 272.02, <br/>
<a id="pl.1.6"></a><var>1.6</var>subdivision 77; 273.13, subdivision 24; 273.1398, subdivision 4; 276A.01, <br/>
<a id="pl.1.7"></a><var>1.7</var>subdivision 3; 290.01, subdivision 29; 290.067, subdivision 1; 290.0921, <br/>
<a id="pl.1.8"></a><var>1.8</var>subdivision 3; 469.015, subdivision 4; 469.033, subdivision 7; 469.166, <br/>
<a id="pl.1.9"></a><var>1.9</var>subdivisions 3, 5, 6; 469.167, subdivision 2; 469.171, subdivisions 1, 4, 6a, 7, 9, <br/>
<a id="pl.1.10"></a><var>1.10</var>11; 469.172; 469.173, subdivisions 5, 6; 469.174, subdivisions 20, 25; 469.176, <br/>
<a id="pl.1.11"></a><var>1.11</var>subdivision 7; 469.1763, subdivision 6; 469.1764, subdivision 1; 469.177, <br/>
<a id="pl.1.12"></a><var>1.12</var>subdivision 1; 469.1793; 469.1813, subdivision 6b; 473F.02, subdivision 3; <br/>
<a id="pl.1.13"></a><var>1.13</var>Minnesota Statutes 2011 Supplement, sections 290.01, subdivision 19b; 290.06, <br/>
<a id="pl.1.14"></a><var>1.14</var>subdivision 2c; 290.0671, subdivision 1; 290.091, subdivision 2; 290.0922, <br/>
<a id="pl.1.15"></a><var>1.15</var>subdivisions 2, 3; 297A.75, subdivision 1; repealing Minnesota Statutes <br/>
<a id="pl.1.16"></a><var>1.16</var>2010, sections 272.02, subdivision 83; 290.06, subdivisions 24, 32; 297A.68, <br/>
<a id="pl.1.17"></a><var>1.17</var>subdivision 41; 469.042, subdivisions 2, 3, 4; 469.043; 469.059, subdivision 13; <br/>
<a id="pl.1.18"></a><var>1.18</var>469.129; 469.134; 469.162, subdivision 2; 469.1651; 469.166, subdivisions 7, 8, <br/>
<a id="pl.1.19"></a><var>1.19</var>9, 10, 11, 12; 469.167, subdivisions 1, 3; 469.168; 469.169, subdivisions 1, 2, <br/>
<a id="pl.1.20"></a><var>1.20</var>3, 4, 5, 6, 7, 8, 9, 10, 11, 13; 469.170, subdivisions 1, 2, 3, 4, 5, 5a, 5b, 5c, 5d, <br/>
<a id="pl.1.21"></a><var>1.21</var>5e, 6, 7, 8; 469.171, subdivisions 2, 5, 6b; 469.173, subdivisions 1, 3; 469.1765; <br/>
<a id="pl.1.22"></a><var>1.22</var>469.1791; 469.1799, subdivision 2; 469.301, subdivisions 1, 2, 3, 4, 5; 469.302; <br/>
<a id="pl.1.23"></a><var>1.23</var>469.303; 469.304; 469.321; 469.3215; 469.322; 469.323; 469.324; 469.325; <br/>
<a id="pl.1.24"></a><var>1.24</var>469.326; 469.327; 469.328; 469.329; 473.680.<br/>
<a id="pl.1.25"></a><var>1.25</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.26"></a><var>1.26</var>    Section 1. Minnesota Statutes 2010, section 16C.16, subdivision 7, is amended to read:<br/>
<a id="pl.1.27"></a><var>1.27</var>    Subd. 7. <b>Economically disadvantaged areas.</b> (a) Except as otherwise provided in <br/>
<a id="pl.1.28"></a><var>1.28</var>paragraph (b), the commissioner may award up to a six percent preference in the amount <br/>
<a id="pl.1.29"></a><var>1.29</var>bid on state procurement to small businesses located in an economically disadvantaged <br/>
<a id="pl.1.30"></a><var>1.30</var>area.<br/>
<a id="pl.1.31"></a><var>1.31</var>(b) The commissioner may award up to a four percent preference in the amount bid <br/>
<a id="pl.1.32"></a><var>1.32</var>on state construction to small businesses located in an economically disadvantaged area.<br/>
<a id="pl.2.1"></a><var>2.1</var>(c) A business is located in an economically disadvantaged area if:<br/>
<a id="pl.2.2"></a><var>2.2</var>(1) the owner resides in or the business is located in a county in which the median <br/>
<a id="pl.2.3"></a><var>2.3</var>income for married couples is less than 70 percent of the state median income for married <br/>
<a id="pl.2.4"></a><var>2.4</var>couples;<br/>
<a id="pl.2.5"></a><var>2.5</var>(2) the owner resides in or the business is located in an area designated a labor <br/>
<a id="pl.2.6"></a><var>2.6</var>surplus area by the United States Department of Labor; or<br/>
<a id="pl.2.7"></a><var>2.7</var>(3) the business is a certified rehabilitation facility or extended employment provider <br/>
<a id="pl.2.8"></a><var>2.8</var>as described in chapter 268A.<br/>
<a id="pl.2.9"></a><var>2.9</var>(d) The commissioner may designate one or more areas designated as targeted <br/>
<a id="pl.2.10"></a><var>2.10</var>neighborhoods under section 
         <statute_ref>469.202</statute_ref> or as border city enterprise zones under section <br/>
<statute_ref><a id="pl.2.11"></a><var>2.11</var>469.167
</statute_ref> 469.166 as economically disadvantaged areas for purposes of this subdivision <br/>
<a id="pl.2.12"></a><var>2.12</var>if the commissioner determines that this designation would further the purposes of this <br/>
<a id="pl.2.13"></a><var>2.13</var>section. If the owner of a small business resides or is employed in a designated area, the <br/>
<a id="pl.2.14"></a><var>2.14</var>small business is eligible for any preference provided under this subdivision.<br/>
<a id="pl.2.15"></a><var>2.15</var>(e) The Department of Revenue shall gather data necessary to make the <br/>
<a id="pl.2.16"></a><var>2.16</var>determinations required by paragraph (c), clause (1), and shall annually certify counties <br/>
<a id="pl.2.17"></a><var>2.17</var>that qualify under paragraph (c), clause (1). An area designated a labor surplus area <br/>
<a id="pl.2.18"></a><var>2.18</var>retains that status for 120 days after certified small businesses in the area are notified of <br/>
<a id="pl.2.19"></a><var>2.19</var>the termination of the designation by the United States Department of Labor.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.2.20"></a><var>2.20</var>    Sec. 2. Minnesota Statutes 2010, section 41A.036, subdivision 2, is amended to read:<br/>
<a id="pl.2.21"></a><var>2.21</var>    Subd. 2. <b>Small business development loans; preferences.</b> The following eligible <br/>
<a id="pl.2.22"></a><var>2.22</var>small businesses have preference among all business applicants for small business <br/>
<a id="pl.2.23"></a><var>2.23</var>development loans:<br/>
<a id="pl.2.24"></a><var>2.24</var>(1) businesses located in rural areas of the state that are experiencing the most <br/>
<a id="pl.2.25"></a><var>2.25</var>severe unemployment rates in the state;<br/>
<a id="pl.2.26"></a><var>2.26</var>(2) businesses that are likely to expand and provide additional permanent <br/>
<a id="pl.2.27"></a><var>2.27</var>employment in rural areas of the state, or enhance the quality of existing jobs in those <br/>
<a id="pl.2.28"></a><var>2.28</var>areas;<br/>
<a id="pl.2.29"></a><var>2.29</var>(3) businesses located in border communities that experience a competitive <br/>
<a id="pl.2.30"></a><var>2.30</var>disadvantage due to location;<br/>
<a id="pl.2.31"></a><var>2.31</var>(4) businesses that have been unable to obtain traditional financial assistance due to <br/>
<a id="pl.2.32"></a><var>2.32</var>a disadvantageous location, minority ownership, or other factors rather than due to the <br/>
<a id="pl.2.33"></a><var>2.33</var>business having been considered a poor financial risk;<br/>
<a id="pl.3.1"></a><var>3.1</var>(5) businesses that utilize state resources and reduce state dependence on outside <br/>
<a id="pl.3.2"></a><var>3.2</var>resources, and that produce products or services consistent with the long-term social and <br/>
<a id="pl.3.3"></a><var>3.3</var>economic needs of the state; and<br/>
<a id="pl.3.4"></a><var>3.4</var>(6) businesses located in designated border city enterprise zones, as described in <br/>
<a id="pl.3.5"></a><var>3.5</var>section 
         <statute_ref>469.168</statute_ref> 469.166.<br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.3.6"></a><var>3.6</var>    Sec. 3. Minnesota Statutes 2010, section 117.025, subdivision 10, is amended to read:<br/>
<a id="pl.3.7"></a><var>3.7</var>    Subd. 10. <b>Public service corporation.</b> "Public service corporation" means a <br/>
<a id="pl.3.8"></a><var>3.8</var>utility, as defined by section 
         <statute_ref>216E.01</statute_ref>, subdivision 10; gas, electric, telephone, or cable <br/>
<a id="pl.3.9"></a><var>3.9</var>communications company; cooperative association; natural gas pipeline company; <br/>
<a id="pl.3.10"></a><var>3.10</var>crude oil or petroleum products pipeline company; municipal utility; municipality when <br/>
<a id="pl.3.11"></a><var>3.11</var>operating its municipally owned utilities; joint venture created pursuant to section 
         <statute_ref>452.25</statute_ref> <br/>
<a id="pl.3.12"></a><var>3.12</var>or 
         <statute_ref>452.26</statute_ref>; or municipal power or gas agency. Public service corporation also means a <br/>
<a id="pl.3.13"></a><var>3.13</var>municipality or public corporation when operating an airport under chapter 360 or 473, a <br/>
<a id="pl.3.14"></a><var>3.14</var>common carrier, a watershed district, or a drainage authority. Public service corporation <br/>
<a id="pl.3.15"></a><var>3.15</var>also means an entity operating a regional distribution center within an international <br/>
<a id="pl.3.16"></a><var>3.16</var>economic development zone designated under section 
<statute_ref>469.322</statute_ref>.<br/>
<br/>
<a id="bill.0.4.0"></a><a id="pl.3.17"></a><var>3.17</var>    Sec. 4. Minnesota Statutes 2010, section 270B.14, subdivision 3, is amended to read:<br/>
<a id="pl.3.18"></a><var>3.18</var>    Subd. 3. <b>Administration of enterprise, job opportunity, and biotechnology </b><br/>
<a id="pl.3.19"></a><var>3.19</var><b>and health sciences industry zone programs.</b> The commissioner may disclose return <br/>
<a id="pl.3.20"></a><var>3.20</var>information relating to the taxes imposed by chapters 290 and 297A to the Department of <br/>
<a id="pl.3.21"></a><var>3.21</var>Employment and Economic Development or a municipality receiving an with a border <br/>
<a id="pl.3.22"></a><var>3.22</var>city enterprise zone designation as defined under section 
         <statute_ref>469.169</statute_ref> 469.166, but only as <br/>
<a id="pl.3.23"></a><var>3.23</var>necessary to administer the funding limitations under section 
         <statute_ref>469.169, subdivision 7</statute_ref>, or <br/>
<a id="pl.3.24"></a><var>3.24</var>to the Department of Employment and Economic Development and appropriate officials <br/>
<a id="pl.3.25"></a><var>3.25</var>from the local government units in which a qualified business is located but only as <br/>
<a id="pl.3.26"></a><var>3.26</var>necessary to enforce the job opportunity building zone benefits under section 
         <statute_ref>469.315</statute_ref>, or <br/>
<a id="pl.3.27"></a><var>3.27</var>biotechnology and health sciences industry zone benefits under section 
         <statute_ref>469.336</statute_ref>.<br/>
<br/>
<a id="bill.0.5.0"></a><a id="pl.3.28"></a><var>3.28</var>    Sec. 5. Minnesota Statutes 2010, section 272.02, subdivision 77, is amended to read:<br/>
<a id="pl.3.29"></a><var>3.29</var>    Subd. 77. <b>Property of housing and redevelopment authorities.</b> Property of <br/>
<a id="pl.3.30"></a><var>3.30</var>projects of housing and redevelopment authorities are exempt to the extent permitted by <br/>
<a id="pl.3.31"></a><var>3.31</var>sections section
<statute_ref>469.042, subdivision 1</statute_ref>, and 
<statute_ref>469.043, subdivisions 2 and 5</statute_ref>.<br/>
<br/>
<a id="bill.0.6.0"></a><a id="pl.3.32"></a><var>3.32</var>    Sec. 6. Minnesota Statutes 2010, section 273.13, subdivision 24, is amended to read:<br/>
<a id="pl.4.1"></a><var>4.1</var>    Subd. 24. <b>Class 3.</b> (a) Commercial and industrial property and utility real and <br/>
<a id="pl.4.2"></a><var>4.2</var>personal property is class 3a.<br/>
<a id="pl.4.3"></a><var>4.3</var>(1) Except as otherwise provided, each parcel of commercial, industrial, or utility <br/>
<a id="pl.4.4"></a><var>4.4</var>real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent <br/>
<a id="pl.4.5"></a><var>4.5</var>of the remaining market value. In the case of contiguous parcels of property owned by the <br/>
<a id="pl.4.6"></a><var>4.6</var>same person or entity, only the value equal to the first-tier value of the contiguous parcels <br/>
<a id="pl.4.7"></a><var>4.7</var>qualifies for the reduced class rate, except that contiguous parcels owned by the same <br/>
<a id="pl.4.8"></a><var>4.8</var>person or entity shall be eligible for the first-tier value class rate on each separate business <br/>
<a id="pl.4.9"></a><var>4.9</var>operated by the owner of the property, provided the business is housed in a separate <br/>
<a id="pl.4.10"></a><var>4.10</var>structure. For the purposes of this subdivision, the first tier means the first $150,000 of <br/>
<a id="pl.4.11"></a><var>4.11</var>market value. Real property owned in fee by a utility for transmission line right-of-way <br/>
<a id="pl.4.12"></a><var>4.12</var>shall be classified at the class rate for the higher tier.<br/>
<a id="pl.4.13"></a><var>4.13</var>For purposes of this subdivision, parcels are considered to be contiguous even if <br/>
<a id="pl.4.14"></a><var>4.14</var>they are separated from each other by a road, street, waterway, or other similar intervening <br/>
<a id="pl.4.15"></a><var>4.15</var>type of property. Connections between parcels that consist of power lines or pipelines do <br/>
<a id="pl.4.16"></a><var>4.16</var>not cause the parcels to be contiguous. Property owners who have contiguous parcels of <br/>
<a id="pl.4.17"></a><var>4.17</var>property that constitute separate businesses that may qualify for the first-tier class rate shall <br/>
<a id="pl.4.18"></a><var>4.18</var>notify the assessor by July 1, for treatment beginning in the following taxes payable year.<br/>
<a id="pl.4.19"></a><var>4.19</var>(2) All personal property that is: (i) part of an electric generation, transmission, or <br/>
<a id="pl.4.20"></a><var>4.20</var>distribution system; or (ii) part of a pipeline system transporting or distributing water, gas, <br/>
<a id="pl.4.21"></a><var>4.21</var>crude oil, or petroleum products; and (iii) not described in clause (3), and all railroad <br/>
<a id="pl.4.22"></a><var>4.22</var>operating property has a class rate as provided under clause (1) for the first tier of market <br/>
<a id="pl.4.23"></a><var>4.23</var>value and the remaining market value. In the case of multiple parcels in one county that <br/>
<a id="pl.4.24"></a><var>4.24</var>are owned by one person or entity, only one first tier amount is eligible for the reduced rate.<br/>
<a id="pl.4.25"></a><var>4.25</var>(3) The entire market value of personal property that is: (i) tools, implements, and <br/>
<a id="pl.4.26"></a><var>4.26</var>machinery of an electric generation, transmission, or distribution system; (ii) tools, <br/>
<a id="pl.4.27"></a><var>4.27</var>implements, and machinery of a pipeline system transporting or distributing water, gas, <br/>
<a id="pl.4.28"></a><var>4.28</var>crude oil, or petroleum products; or (iii) the mains and pipes used in the distribution of <br/>
<a id="pl.4.29"></a><var>4.29</var>steam or hot or chilled water for heating or cooling buildings, has a class rate as provided <br/>
<a id="pl.4.30"></a><var>4.30</var>under clause (1) for the remaining market value in excess of the first tier.<br/>
<a id="pl.4.31"></a><var>4.31</var>(b) Employment property defined in section 
<statute_ref>469.166</statute_ref>, during the period provided <br/>
<a id="pl.4.32"></a><var>4.32</var>in section 
<statute_ref>469.170</statute_ref>, shall constitute class 3b. The class rates for class 3b property are <br/>
<a id="pl.4.33"></a><var>4.33</var>determined under paragraph (a).<br/>
<br/>
<a id="bill.0.7.0"></a><a id="pl.4.34"></a><var>4.34</var>    Sec. 7. Minnesota Statutes 2010, section 273.1398, subdivision 4, is amended to read:<br/>
<a id="pl.5.1"></a><var>5.1</var>    Subd. 4. <b>Disparity reduction credit.</b> (a) Beginning with taxes payable in 1989, <br/>
<a id="pl.5.2"></a><var>5.2</var>class 4a, and class 3a, and class 3b property qualifies for a disparity reduction credit if: (1) <br/>
<a id="pl.5.3"></a><var>5.3</var>the property is located in a border city that has an enterprise zone designated pursuant to <br/>
<a id="pl.5.4"></a><var>5.4</var>section 
<statute_ref>469.168, subdivision 4</statute_ref>, as defined in section 469.166; (2) the property is located <br/>
<a id="pl.5.5"></a><var>5.5</var>in a city with a population greater than 2,500 and less than 35,000 according to the <br/>
<a id="pl.5.6"></a><var>5.6</var>1980 decennial census; (3) the city is adjacent to a city in another state or immediately <br/>
<a id="pl.5.7"></a><var>5.7</var>adjacent to a city adjacent to a city in another state; and (4) the adjacent city in the <br/>
<a id="pl.5.8"></a><var>5.8</var>other state has a population of greater than 5,000 and less than 75,000 according to the <br/>
<a id="pl.5.9"></a><var>5.9</var>1980 decennial census.<br/>
<a id="pl.5.10"></a><var>5.10</var>    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a <br/>
<a id="pl.5.11"></a><var>5.11</var>property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class <br/>
<a id="pl.5.12"></a><var>5.12</var>3b property to 2.3 percent of market value.<br/>
<a id="pl.5.13"></a><var>5.13</var>    (c) The county auditor shall annually certify the costs of the credits to the <br/>
<a id="pl.5.14"></a><var>5.14</var>Department of Revenue. The department shall reimburse local governments for the <br/>
<a id="pl.5.15"></a><var>5.15</var>property taxes forgone as the result of the credits in proportion to their total levies.<br/>
<br/>
<a id="bill.0.8.0"></a><a id="pl.5.16"></a><var>5.16</var>    Sec. 8. Minnesota Statutes 2010, section 276A.01, subdivision 3, is amended to read:<br/>
<a id="pl.5.17"></a><var>5.17</var>    Subd. 3. <b>Commercial-industrial property.</b> "Commercial-industrial property" <br/>
<a id="pl.5.18"></a><var>5.18</var>means the following categories of property, as defined in section 
         <statute_ref>273.13</statute_ref>, excluding that <br/>
<a id="pl.5.19"></a><var>5.19</var>portion of the property (i) that may, by law, constitute the tax base for a tax increment <br/>
<a id="pl.5.20"></a><var>5.20</var>pledged pursuant to section 
<statute_ref>469.042</statute_ref> or 
<statute_ref>469.162</statute_ref> or sections 
         <statute_ref>469.174</statute_ref> to 
         <statute_ref>469.178</statute_ref>, <br/>
<a id="pl.5.21"></a><var>5.21</var>certification of which was requested prior to May 1, 1996, to the extent and while the tax <br/>
<a id="pl.5.22"></a><var>5.22</var>increment is so pledged; or (ii) that is exempt from taxation under section 
         <statute_ref>272.02</statute_ref>:<br/>
<a id="pl.5.23"></a><var>5.23</var>    (1) that portion of class 5 property consisting of unmined iron ore and low-grade <br/>
<a id="pl.5.24"></a><var>5.24</var>iron-bearing formations as defined in section 
         <statute_ref>273.14</statute_ref>, tools, implements, and machinery, <br/>
<a id="pl.5.25"></a><var>5.25</var>except the portion of high voltage transmission lines, the value of which is deducted from <br/>
<a id="pl.5.26"></a><var>5.26</var>net tax capacity under section 
         <statute_ref>273.425</statute_ref>; and<br/>
<a id="pl.5.27"></a><var>5.27</var>    (2) that portion of class 3 and class 5 property which is either used or zoned for <br/>
<a id="pl.5.28"></a><var>5.28</var>use for any commercial or industrial purpose, including property that becomes taxable <br/>
<a id="pl.5.29"></a><var>5.29</var>under section 298.25, except for such property which is, or, in the case of property under <br/>
<a id="pl.5.30"></a><var>5.30</var>construction, will when completed be used exclusively for residential occupancy and <br/>
<a id="pl.5.31"></a><var>5.31</var>the provision of services to residential occupants thereof. Property must be considered <br/>
<a id="pl.5.32"></a><var>5.32</var>as used exclusively for residential occupancy only if each of not less than 80 percent <br/>
<a id="pl.5.33"></a><var>5.33</var>of its occupied residential units is, or, in the case of property under construction, will <br/>
<a id="pl.5.34"></a><var>5.34</var>when completed be occupied under an oral or written agreement for occupancy over a <br/>
<a id="pl.5.35"></a><var>5.35</var>continuous period of not less than 30 days.<br/>
<a id="pl.6.1"></a><var>6.1</var>    If the classification of property prescribed by section 
         <statute_ref>273.13</statute_ref> is modified by <br/>
<a id="pl.6.2"></a><var>6.2</var>legislative amendment, the references in this subdivision are to the successor class or <br/>
<a id="pl.6.3"></a><var>6.3</var>classes of property, or portions thereof, that include the kinds of property designated <br/>
<a id="pl.6.4"></a><var>6.4</var>in this subdivision.<br/>
<br/>
<a id="bill.0.9.0"></a><a id="pl.6.5"></a><var>6.5</var>    Sec. 9. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19b, is <br/>
<a id="pl.6.6"></a><var>6.6</var>amended to read:<br/>
<a id="pl.6.7"></a><var>6.7</var>    Subd. 19b. <b>Subtractions from federal taxable income.</b> For individuals, estates, <br/>
<a id="pl.6.8"></a><var>6.8</var>and trusts, there shall be subtracted from federal taxable income:<br/>
<a id="pl.6.9"></a><var>6.9</var>    (1) net interest income on obligations of any authority, commission, or <br/>
<a id="pl.6.10"></a><var>6.10</var>instrumentality of the United States to the extent includable in taxable income for federal <br/>
<a id="pl.6.11"></a><var>6.11</var>income tax purposes but exempt from state income tax under the laws of the United States;<br/>
<a id="pl.6.12"></a><var>6.12</var>    (2) if included in federal taxable income, the amount of any overpayment of income <br/>
<a id="pl.6.13"></a><var>6.13</var>tax to Minnesota or to any other state, for any previous taxable year, whether the amount <br/>
<a id="pl.6.14"></a><var>6.14</var>is received as a refund or as a credit to another taxable year's income tax liability;<br/>
<a id="pl.6.15"></a><var>6.15</var>    (3) the amount paid to others, less the amount used to claim the credit allowed under <br/>
<a id="pl.6.16"></a><var>6.16</var>section 
         <statute_ref>290.0674</statute_ref>, not to exceed $1,625 for each qualifying child in grades kindergarten <br/>
<a id="pl.6.17"></a><var>6.17</var>to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and <br/>
<a id="pl.6.18"></a><var>6.18</var>transportation of each qualifying child in attending an elementary or secondary school <br/>
<a id="pl.6.19"></a><var>6.19</var>situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a <br/>
<a id="pl.6.20"></a><var>6.20</var>resident of this state may legally fulfill the state's compulsory attendance laws, which <br/>
<a id="pl.6.21"></a><var>6.21</var>is not operated for profit, and which adheres to the provisions of the Civil Rights Act <br/>
<a id="pl.6.22"></a><var>6.22</var>of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or <br/>
<a id="pl.6.23"></a><var>6.23</var>tuition as defined in section 
         <statute_ref>290.0674, subdivision 1</statute_ref>, clause (1). As used in this clause, <br/>
<a id="pl.6.24"></a><var>6.24</var>"textbooks" includes books and other instructional materials and equipment purchased <br/>
<a id="pl.6.25"></a><var>6.25</var>or leased for use in elementary and secondary schools in teaching only those subjects <br/>
<a id="pl.6.26"></a><var>6.26</var>legally and commonly taught in public elementary and secondary schools in this state. <br/>
<a id="pl.6.27"></a><var>6.27</var>Equipment expenses qualifying for deduction includes expenses as defined and limited in <br/>
<a id="pl.6.28"></a><var>6.28</var>section 
         <statute_ref>290.0674, subdivision 1</statute_ref>, clause (3). "Textbooks" does not include instructional <br/>
<a id="pl.6.29"></a><var>6.29</var>books and materials used in the teaching of religious tenets, doctrines, or worship, the <br/>
<a id="pl.6.30"></a><var>6.30</var>purpose of which is to instill such tenets, doctrines, or worship, nor does it include books <br/>
<a id="pl.6.31"></a><var>6.31</var>or materials for, or transportation to, extracurricular activities including sporting events, <br/>
<a id="pl.6.32"></a><var>6.32</var>musical or dramatic events, speech activities, driver's education, or similar programs. No <br/>
<a id="pl.6.33"></a><var>6.33</var>deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or <br/>
<a id="pl.6.34"></a><var>6.34</var>the qualifying child's vehicle to provide such transportation for a qualifying child. For <br/>
<a id="pl.7.1"></a><var>7.1</var>purposes of the subtraction provided by this clause, "qualifying child" has the meaning <br/>
<a id="pl.7.2"></a><var>7.2</var>given in section 32(c)(3) of the Internal Revenue Code;<br/>
<a id="pl.7.3"></a><var>7.3</var>    (4) income as provided under section 
         <statute_ref>290.0802</statute_ref>;<br/>
<a id="pl.7.4"></a><var>7.4</var>    (5) to the extent included in federal adjusted gross income, income realized on <br/>
<a id="pl.7.5"></a><var>7.5</var>disposition of property exempt from tax under section 
         <statute_ref>290.491</statute_ref>;<br/>
<a id="pl.7.6"></a><var>7.6</var>    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) <br/>
<a id="pl.7.7"></a><var>7.7</var>of the Internal Revenue Code in determining federal taxable income by an individual <br/>
<a id="pl.7.8"></a><var>7.8</var>who does not itemize deductions for federal income tax purposes for the taxable year, an <br/>
<a id="pl.7.9"></a><var>7.9</var>amount equal to 50 percent of the excess of charitable contributions over $500 allowable <br/>
<a id="pl.7.10"></a><var>7.10</var>as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, <br/>
<a id="pl.7.11"></a><var>7.11</var>under the provisions of Public Law 109-1 and Public Law 111-126;<br/>
<a id="pl.7.12"></a><var>7.12</var>    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not <br/>
<a id="pl.7.13"></a><var>7.13</var>qualify for a credit under section 
         <statute_ref>290.06, subdivision 22</statute_ref>, an amount equal to the carryover <br/>
<a id="pl.7.14"></a><var>7.14</var>of subnational foreign taxes for the taxable year, but not to exceed the total subnational <br/>
<a id="pl.7.15"></a><var>7.15</var>foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, <br/>
<a id="pl.7.16"></a><var>7.16</var>"federal foreign tax credit" means the credit allowed under section 27 of the Internal <br/>
<a id="pl.7.17"></a><var>7.17</var>Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed <br/>
<a id="pl.7.18"></a><var>7.18</var>under section 904(c) of the Internal Revenue Code minus national level foreign taxes to <br/>
<a id="pl.7.19"></a><var>7.19</var>the extent they exceed the federal foreign tax credit;<br/>
<a id="pl.7.20"></a><var>7.20</var>    (8) in each of the five tax years immediately following the tax year in which an <br/>
<a id="pl.7.21"></a><var>7.21</var>addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case <br/>
<a id="pl.7.22"></a><var>7.22</var>of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth <br/>
<a id="pl.7.23"></a><var>7.23</var>of the delayed depreciation. For purposes of this clause, "delayed depreciation" means <br/>
<a id="pl.7.24"></a><var>7.24</var>the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or <br/>
<a id="pl.7.25"></a><var>7.25</var>subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the <br/>
<a id="pl.7.26"></a><var>7.26</var>positive value of any net operating loss under section 172 of the Internal Revenue Code <br/>
<a id="pl.7.27"></a><var>7.27</var>generated for the tax year of the addition. The resulting delayed depreciation cannot be <br/>
<a id="pl.7.28"></a><var>7.28</var>less than zero;<br/>
<a id="pl.7.29"></a><var>7.29</var>    (9) job opportunity building zone income as provided under section 
         <statute_ref>469.316</statute_ref>;<br/>
<a id="pl.7.30"></a><var>7.30</var>    (10) to the extent included in federal taxable income, the amount of compensation <br/>
<a id="pl.7.31"></a><var>7.31</var>paid to members of the Minnesota National Guard or other reserve components of the <br/>
<a id="pl.7.32"></a><var>7.32</var>United States military for active service, excluding compensation for services performed <br/>
<a id="pl.7.33"></a><var>7.33</var>under the Active Guard Reserve (AGR) program. For purposes of this clause, "active <br/>
<a id="pl.7.34"></a><var>7.34</var>service" means (i) state active service as defined in section 
         <statute_ref>190.05, subdivision 5a</statute_ref>, clause <br/>
<a id="pl.7.35"></a><var>7.35</var>(1); or (ii) federally funded state active service as defined in section 
         <statute_ref>190.05, subdivision <br/>
<a id="pl.8.1"></a><var>8.1</var>5b
         </statute_ref>, but "active service" excludes service performed in accordance with section 
         <statute_ref>190.08, <br/>
<a id="pl.8.2"></a><var>8.2</var>subdivision 3
         </statute_ref>;<br/>
<a id="pl.8.3"></a><var>8.3</var>    (11) to the extent included in federal taxable income, the amount of compensation <br/>
<a id="pl.8.4"></a><var>8.4</var>paid to Minnesota residents who are members of the armed forces of the United States <br/>
<a id="pl.8.5"></a><var>8.5</var>or United Nations for active duty performed under United States Code, title 10; or the <br/>
<a id="pl.8.6"></a><var>8.6</var>authority of the United Nations;<br/>
<a id="pl.8.7"></a><var>8.7</var>    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a <br/>
<a id="pl.8.8"></a><var>8.8</var>qualified donor's donation, while living, of one or more of the qualified donor's organs <br/>
<a id="pl.8.9"></a><var>8.9</var>to another person for human organ transplantation. For purposes of this clause, "organ" <br/>
<a id="pl.8.10"></a><var>8.10</var>means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; <br/>
<a id="pl.8.11"></a><var>8.11</var>"human organ transplantation" means the medical procedure by which transfer of a human <br/>
<a id="pl.8.12"></a><var>8.12</var>organ is made from the body of one person to the body of another person; "qualified <br/>
<a id="pl.8.13"></a><var>8.13</var>expenses" means unreimbursed expenses for both the individual and the qualified donor <br/>
<a id="pl.8.14"></a><var>8.14</var>for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses <br/>
<a id="pl.8.15"></a><var>8.15</var>may be subtracted under this clause only once; and "qualified donor" means the individual <br/>
<a id="pl.8.16"></a><var>8.16</var>or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An <br/>
<a id="pl.8.17"></a><var>8.17</var>individual may claim the subtraction in this clause for each instance of organ donation for <br/>
<a id="pl.8.18"></a><var>8.18</var>transplantation during the taxable year in which the qualified expenses occur;<br/>
<a id="pl.8.19"></a><var>8.19</var>    (13) in each of the five tax years immediately following the tax year in which an <br/>
<a id="pl.8.20"></a><var>8.20</var>addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a <br/>
<a id="pl.8.21"></a><var>8.21</var>shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the <br/>
<a id="pl.8.22"></a><var>8.22</var>addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the <br/>
<a id="pl.8.23"></a><var>8.23</var>case of a shareholder of a corporation that is an S corporation, minus the positive value of <br/>
<a id="pl.8.24"></a><var>8.24</var>any net operating loss under section 172 of the Internal Revenue Code generated for the <br/>
<a id="pl.8.25"></a><var>8.25</var>tax year of the addition. If the net operating loss exceeds the addition for the tax year, a <br/>
<a id="pl.8.26"></a><var>8.26</var>subtraction is not allowed under this clause;<br/>
<a id="pl.8.27"></a><var>8.27</var>    (14) to the extent included in the federal taxable income of a nonresident of <br/>
<a id="pl.8.28"></a><var>8.28</var>Minnesota, compensation paid to a service member as defined in United States Code, title <br/>
<a id="pl.8.29"></a><var>8.29</var>10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief <br/>
<a id="pl.8.30"></a><var>8.30</var>Act, Public Law 108-189, section 101(2);<br/>
<a id="pl.8.31"></a><var>8.31</var>    (15) international economic development zone income as provided under section <br/>
<a id="pl.8.32"></a><var>8.32</var><statute_ref>469.325</statute_ref>;<br/>
<a id="pl.8.33"></a><var>8.33</var>    (16) to the extent included in federal taxable income, the amount of national service <br/>
<a id="pl.8.34"></a><var>8.34</var>educational awards received from the National Service Trust under United States Code, <br/>
<a id="pl.8.35"></a><var>8.35</var>title 42, sections 12601 to 12604, for service in an approved Americorps National Service <br/>
<a id="pl.8.36"></a><var>8.36</var>program;<br/>
<a id="pl.9.1"></a><var>9.1</var>(17) (16) to the extent included in federal taxable income, discharge of indebtedness <br/>
<a id="pl.9.2"></a><var>9.2</var>income resulting from reacquisition of business indebtedness included in federal taxable <br/>
<a id="pl.9.3"></a><var>9.3</var>income under section 108(i) of the Internal Revenue Code. This subtraction applies only <br/>
<a id="pl.9.4"></a><var>9.4</var>to the extent that the income was included in net income in a prior year as a result of the <br/>
<a id="pl.9.5"></a><var>9.5</var>addition under section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clause (16); and<br/>
<a id="pl.9.6"></a><var>9.6</var>(18) (17) the amount of the net operating loss allowed under section 
         <statute_ref>290.095, <br/>
<a id="pl.9.7"></a><var>9.7</var>subdivision 
         </statute_ref>11, paragraph (c).<br/>
<br/>
<a id="bill.0.10.0"></a><a id="pl.9.8"></a><var>9.8</var>    Sec. 10. Minnesota Statutes 2010, section 290.01, subdivision 29, is amended to read:<br/>
<a id="pl.9.9"></a><var>9.9</var>    Subd. 29. <b>Taxable income.</b> The term "taxable income" means:<br/>
<a id="pl.9.10"></a><var>9.10</var>(1) for individuals, estates, and trusts, the same as taxable net income;<br/>
<a id="pl.9.11"></a><var>9.11</var>(2) for corporations, the taxable net income less<br/>
<a id="pl.9.12"></a><var>9.12</var>(i) the net operating loss deduction under section 
         <statute_ref>290.095</statute_ref>;<br/>
<a id="pl.9.13"></a><var>9.13</var>(ii) the dividends received deduction under section 
         <statute_ref>290.21, subdivision 4</statute_ref>;<br/>
<a id="pl.9.14"></a><var>9.14</var>(iii) the exemption for operating in a job opportunity building zone under section <br/>
<statute_ref><a id="pl.9.15"></a><var>9.15</var>469.317
         </statute_ref>; and<br/>
<a id="pl.9.16"></a><var>9.16</var>(iv) the exemption for operating in a biotechnology and health sciences industry <br/>
<a id="pl.9.17"></a><var>9.17</var>zone under section 
         <statute_ref>469.337</statute_ref>; and<br/>
<a id="pl.9.18"></a><var>9.18</var>(v) the exemption for operating in an international economic development zone <br/>
<a id="pl.9.19"></a><var>9.19</var>under section 
<statute_ref>469.326</statute_ref>.<br/>
<br/>
<a id="bill.0.11.0"></a><a id="pl.9.20"></a><var>9.20</var>    Sec. 11. Minnesota Statutes 2011 Supplement, section 290.06, subdivision 2c, is <br/>
<a id="pl.9.21"></a><var>9.21</var>amended to read:<br/>
<a id="pl.9.22"></a><var>9.22</var>    Subd. 2c. <b>Schedules of rates for individuals, estates, and trusts.</b> (a) The income <br/>
<a id="pl.9.23"></a><var>9.23</var>taxes imposed by this chapter upon married individuals filing joint returns and surviving <br/>
<a id="pl.9.24"></a><var>9.24</var>spouses as defined in section 2(a) of the Internal Revenue Code must be computed by <br/>
<a id="pl.9.25"></a><var>9.25</var>applying to their taxable net income the following schedule of rates:<br/>
<a id="pl.9.26"></a><var>9.26</var>    (1) On the first $25,680, 
         <statute_ref>5.35</statute_ref> percent;<br/>
<a id="pl.9.27"></a><var>9.27</var>    (2) On all over $25,680, but not over $102,030, 
         <statute_ref>7.05</statute_ref> percent;<br/>
<a id="pl.9.28"></a><var>9.28</var>    (3) On all over $102,030, 
         <statute_ref>7.85</statute_ref> percent.<br/>
<a id="pl.9.29"></a><var>9.29</var>    Married individuals filing separate returns, estates, and trusts must compute their <br/>
<a id="pl.9.30"></a><var>9.30</var>income tax by applying the above rates to their taxable income, except that the income <br/>
<a id="pl.9.31"></a><var>9.31</var>brackets will be one-half of the above amounts.<br/>
<a id="pl.9.32"></a><var>9.32</var>    (b) The income taxes imposed by this chapter upon unmarried individuals must be <br/>
<a id="pl.9.33"></a><var>9.33</var>computed by applying to taxable net income the following schedule of rates:<br/>
<a id="pl.9.34"></a><var>9.34</var>    (1) On the first $17,570, 
         <statute_ref>5.35</statute_ref> percent;<br/>
<a id="pl.10.1"></a><var>10.1</var>    (2) On all over $17,570, but not over $57,710, 
         <statute_ref>7.05</statute_ref> percent;<br/>
<a id="pl.10.2"></a><var>10.2</var>    (3) On all over $57,710, 
         <statute_ref>7.85</statute_ref> percent.<br/>
<a id="pl.10.3"></a><var>10.3</var>    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying <br/>
<a id="pl.10.4"></a><var>10.4</var>as a head of household as defined in section 2(b) of the Internal Revenue Code must be <br/>
<a id="pl.10.5"></a><var>10.5</var>computed by applying to taxable net income the following schedule of rates:<br/>
<a id="pl.10.6"></a><var>10.6</var>    (1) On the first $21,630, 
         <statute_ref>5.35</statute_ref> percent;<br/>
<a id="pl.10.7"></a><var>10.7</var>    (2) On all over $21,630, but not over $86,910, 
         <statute_ref>7.05</statute_ref> percent;<br/>
<a id="pl.10.8"></a><var>10.8</var>    (3) On all over $86,910, 
         <statute_ref>7.85</statute_ref> percent.<br/>
<a id="pl.10.9"></a><var>10.9</var>    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the <br/>
<a id="pl.10.10"></a><var>10.10</var>tax of any individual taxpayer whose taxable net income for the taxable year is less than <br/>
<a id="pl.10.11"></a><var>10.11</var>an amount determined by the commissioner must be computed in accordance with tables <br/>
<a id="pl.10.12"></a><var>10.12</var>prepared and issued by the commissioner of revenue based on income brackets of not <br/>
<a id="pl.10.13"></a><var>10.13</var>more than $100. The amount of tax for each bracket shall be computed at the rates set <br/>
<a id="pl.10.14"></a><var>10.14</var>forth in this subdivision, provided that the commissioner may disregard a fractional part of <br/>
<a id="pl.10.15"></a><var>10.15</var>a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.<br/>
<a id="pl.10.16"></a><var>10.16</var>    (e) An individual who is not a Minnesota resident for the entire year must compute <br/>
<a id="pl.10.17"></a><var>10.17</var>the individual's Minnesota income tax as provided in this subdivision. After the <br/>
<a id="pl.10.18"></a><var>10.18</var>application of the nonrefundable credits provided in this chapter, the tax liability must <br/>
<a id="pl.10.19"></a><var>10.19</var>then be multiplied by a fraction in which:<br/>
<a id="pl.10.20"></a><var>10.20</var>    (1) the numerator is the individual's Minnesota source federal adjusted gross income <br/>
<a id="pl.10.21"></a><var>10.21</var>as defined in section 62 of the Internal Revenue Code and increased by the additions <br/>
<a id="pl.10.22"></a><var>10.22</var>required under section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clauses (1), (5), (6), (7), (8), (9), (12), <br/>
<a id="pl.10.23"></a><var>10.23</var>(13), and (16) to (18), and reduced by the Minnesota assignable portion of the subtraction <br/>
<a id="pl.10.24"></a><var>10.24</var>for United States government interest under section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clause (1), <br/>
<a id="pl.10.25"></a><var>10.25</var>and the subtractions under section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clauses (8), (9), (13), (14), <br/>
<a id="pl.10.26"></a><var>10.26</var>(15), (17), (16), and (18) (17), after applying the allocation and assignability provisions of <br/>
<a id="pl.10.27"></a><var>10.27</var>section 
         <statute_ref>290.081</statute_ref>, clause (a), or 
         <statute_ref>290.17</statute_ref>; and<br/>
<a id="pl.10.28"></a><var>10.28</var>    (2) the denominator is the individual's federal adjusted gross income as defined in <br/>
<a id="pl.10.29"></a><var>10.29</var>section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in <br/>
<a id="pl.10.30"></a><var>10.30</var>section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to <br/>
<a id="pl.10.31"></a><var>10.31</var>(18), and reduced by the amounts specified in section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clauses (1), <br/>
<a id="pl.10.32"></a><var>10.32</var>(8), (9), (13), (14), (15), (17) (16), and (18) (17).<br/>
<br/>
<a id="bill.0.12.0"></a><a id="pl.10.33"></a><var>10.33</var>    Sec. 12. Minnesota Statutes 2010, section 290.067, subdivision 1, is amended to read:<br/>
<a id="pl.10.34"></a><var>10.34</var>    Subdivision 1. <b>Amount of credit.</b> (a) A taxpayer may take as a credit against the <br/>
<a id="pl.10.35"></a><var>10.35</var>tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the <br/>
<a id="pl.11.1"></a><var>11.1</var>dependent care credit for which the taxpayer is eligible pursuant to the provisions of <br/>
<a id="pl.11.2"></a><var>11.2</var>section 21 of the Internal Revenue Code subject to the limitations provided in subdivision <br/>
<a id="pl.11.3"></a><var>11.3</var>2 except that in determining whether the child qualified as a dependent, income received <br/>
<a id="pl.11.4"></a><var>11.4</var>as a Minnesota family investment program grant or allowance to or on behalf of the child <br/>
<a id="pl.11.5"></a><var>11.5</var>must not be taken into account in determining whether the child received more than half <br/>
<a id="pl.11.6"></a><var>11.6</var>of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of <br/>
<a id="pl.11.7"></a><var>11.7</var>the Internal Revenue Code do not apply.<br/>
<a id="pl.11.8"></a><var>11.8</var>(b) If a child who has not attained the age of six years at the close of the taxable year <br/>
<a id="pl.11.9"></a><var>11.9</var>is cared for at a licensed family day care home operated by the child's parent, the taxpayer <br/>
<a id="pl.11.10"></a><var>11.10</var>is deemed to have paid employment-related expenses. If the child is 16 months old or <br/>
<a id="pl.11.11"></a><var>11.11</var>younger at the close of the taxable year, the amount of expenses deemed to have been paid <br/>
<a id="pl.11.12"></a><var>11.12</var>equals the maximum limit for one qualified individual under section 21(c) and (d) of the <br/>
<a id="pl.11.13"></a><var>11.13</var>Internal Revenue Code. If the child is older than 16 months of age but has not attained the <br/>
<a id="pl.11.14"></a><var>11.14</var>age of six years at the close of the taxable year, the amount of expenses deemed to have <br/>
<a id="pl.11.15"></a><var>11.15</var>been paid equals the amount the licensee would charge for the care of a child of the same <br/>
<a id="pl.11.16"></a><var>11.16</var>age for the same number of hours of care.<br/>
<a id="pl.11.17"></a><var>11.17</var>(c) If a married couple:<br/>
<a id="pl.11.18"></a><var>11.18</var>(1) has a child who has not attained the age of one year at the close of the taxable <br/>
<a id="pl.11.19"></a><var>11.19</var>year;<br/>
<a id="pl.11.20"></a><var>11.20</var>(2) files a joint tax return for the taxable year; and<br/>
<a id="pl.11.21"></a><var>11.21</var>(3) does not participate in a dependent care assistance program as defined in section <br/>
<a id="pl.11.22"></a><var>11.22</var>129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid <br/>
<a id="pl.11.23"></a><var>11.23</var>for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of <br/>
<a id="pl.11.24"></a><var>11.24</var>(i) the combined earned income of the couple or (ii) the amount of the maximum limit for <br/>
<a id="pl.11.25"></a><var>11.25</var>one qualified individual under section 21(c) and (d) of the Internal Revenue Code will <br/>
<a id="pl.11.26"></a><var>11.26</var>be deemed to be the employment related expense paid for that child. The earned income <br/>
<a id="pl.11.27"></a><var>11.27</var>limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed <br/>
<a id="pl.11.28"></a><var>11.28</var>amount. These deemed amounts apply regardless of whether any employment-related <br/>
<a id="pl.11.29"></a><var>11.29</var>expenses have been paid.<br/>
<a id="pl.11.30"></a><var>11.30</var>(d) If the taxpayer is not required and does not file a federal individual income tax <br/>
<a id="pl.11.31"></a><var>11.31</var>return for the tax year, no credit is allowed for any amount paid to any person unless:<br/>
<a id="pl.11.32"></a><var>11.32</var>(1) the name, address, and taxpayer identification number of the person are included <br/>
<a id="pl.11.33"></a><var>11.33</var>on the return claiming the credit; or<br/>
<a id="pl.11.34"></a><var>11.34</var>(2) if the person is an organization described in section 501(c)(3) of the Internal <br/>
<a id="pl.11.35"></a><var>11.35</var>Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code, <br/>
<a id="pl.11.36"></a><var>11.36</var>the name and address of the person are included on the return claiming the credit.<br/>
<a id="pl.12.1"></a><var>12.1</var>In the case of a failure to provide the information required under the preceding sentence, <br/>
<a id="pl.12.2"></a><var>12.2</var>the preceding sentence does not apply if it is shown that the taxpayer exercised due <br/>
<a id="pl.12.3"></a><var>12.3</var>diligence in attempting to provide the information required.<br/>
<a id="pl.12.4"></a><var>12.4</var>In the case of a nonresident, part-year resident, or a person who has earned income <br/>
<a id="pl.12.5"></a><var>12.5</var>not subject to tax under this chapter including earned income excluded pursuant to section <br/>
<statute_ref><a id="pl.12.6"></a><var>12.6</var>290.01, subdivision 19b
         </statute_ref>, clause (9) or (15), the credit determined under section 21 of the <br/>
<a id="pl.12.7"></a><var>12.7</var>Internal Revenue Code must be allocated based on the ratio by which the earned income <br/>
<a id="pl.12.8"></a><var>12.8</var>of the claimant and the claimant's spouse from Minnesota sources bears to the total earned <br/>
<a id="pl.12.9"></a><var>12.9</var>income of the claimant and the claimant's spouse.<br/>
<a id="pl.12.10"></a><var>12.10</var>For residents of Minnesota, the subtractions for military pay under section 
         <statute_ref>290.01, <br/>
<a id="pl.12.11"></a><var>12.11</var>subdivision 19b
         </statute_ref>, clauses (10) and (11), are not considered "earned income not subject to <br/>
<a id="pl.12.12"></a><var>12.12</var>tax under this chapter."<br/>
<a id="pl.12.13"></a><var>12.13</var>For residents of Minnesota, the exclusion of combat pay under section 112 of the <br/>
<a id="pl.12.14"></a><var>12.14</var>Internal Revenue Code is not considered "earned income not subject to tax under this <br/>
<a id="pl.12.15"></a><var>12.15</var>chapter."<br/>
<br/>
<a id="bill.0.13.0"></a><a id="pl.12.16"></a><var>12.16</var>    Sec. 13. Minnesota Statutes 2011 Supplement, section 290.0671, subdivision 1, <br/>
<a id="pl.12.17"></a><var>12.17</var>is amended to read:<br/>
<a id="pl.12.18"></a><var>12.18</var>    Subdivision 1. <b>Credit allowed.</b> (a) An individual is allowed a credit against the tax <br/>
<a id="pl.12.19"></a><var>12.19</var>imposed by this chapter equal to a percentage of earned income. To receive a credit, a <br/>
<a id="pl.12.20"></a><var>12.20</var>taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.<br/>
<a id="pl.12.21"></a><var>12.21</var>(b) For individuals with no qualifying children, the credit equals 
         <statute_ref>1.9125</statute_ref> percent of <br/>
<a id="pl.12.22"></a><var>12.22</var>the first $4,620 of earned income. The credit is reduced by 
         <statute_ref>1.9125</statute_ref> percent of earned <br/>
<a id="pl.12.23"></a><var>12.23</var>income or adjusted gross income, whichever is greater, in excess of $5,770, but in no <br/>
<a id="pl.12.24"></a><var>12.24</var>case is the credit less than zero.<br/>
<a id="pl.12.25"></a><var>12.25</var>(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first <br/>
<a id="pl.12.26"></a><var>12.26</var>$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than <br/>
<a id="pl.12.27"></a><var>12.27</var>$13,450. The credit is reduced by 
         <statute_ref>5.73</statute_ref> percent of earned income or adjusted gross income, <br/>
<a id="pl.12.28"></a><var>12.28</var>whichever is greater, in excess of $15,080, but in no case is the credit less than zero.<br/>
<a id="pl.12.29"></a><var>12.29</var>(d) For individuals with two or more qualifying children, the credit equals ten <br/>
<a id="pl.12.30"></a><var>12.30</var>percent of the first $9,720 of earned income and 20 percent of earned income over <br/>
<a id="pl.12.31"></a><var>12.31</var>$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income <br/>
<a id="pl.12.32"></a><var>12.32</var>or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is <br/>
<a id="pl.12.33"></a><var>12.33</var>the credit less than zero.<br/>
<a id="pl.12.34"></a><var>12.34</var>(e) For a nonresident or part-year resident, the credit must be allocated based on the <br/>
<a id="pl.12.35"></a><var>12.35</var>percentage calculated under section 
         <statute_ref>290.06, subdivision 2c</statute_ref>, paragraph (e).<br/>
<a id="pl.13.1"></a><var>13.1</var>(f) For a person who was a resident for the entire tax year and has earned income <br/>
<a id="pl.13.2"></a><var>13.2</var>not subject to tax under this chapter, including income excluded under section 
         <statute_ref>290.01, <br/>
<a id="pl.13.3"></a><var>13.3</var>subdivision 19b
         </statute_ref>, clause (9) or (15), the credit must be allocated based on the ratio of <br/>
<a id="pl.13.4"></a><var>13.4</var>federal adjusted gross income reduced by the earned income not subject to tax under <br/>
<a id="pl.13.5"></a><var>13.5</var>this chapter over federal adjusted gross income. For purposes of this paragraph, the <br/>
<a id="pl.13.6"></a><var>13.6</var>subtractions for military pay under section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clauses (10) and (11), <br/>
<a id="pl.13.7"></a><var>13.7</var>are not considered "earned income not subject to tax under this chapter."<br/>
<a id="pl.13.8"></a><var>13.8</var>For the purposes of this paragraph, the exclusion of combat pay under section 112 <br/>
<a id="pl.13.9"></a><var>13.9</var>of the Internal Revenue Code is not considered "earned income not subject to tax under <br/>
<a id="pl.13.10"></a><var>13.10</var>this chapter."<br/>
<a id="pl.13.11"></a><var>13.11</var>(g) For tax years beginning after December 31, 2007, and before December 31, <br/>
<a id="pl.13.12"></a><var>13.12</var>2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in <br/>
<a id="pl.13.13"></a><var>13.13</var>paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by <br/>
<a id="pl.13.14"></a><var>13.14</var>$3,000 for married taxpayers filing joint returns. For tax years beginning after December <br/>
<a id="pl.13.15"></a><var>13.15</var>31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined <br/>
<a id="pl.13.16"></a><var>13.16</var>pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in <br/>
<a id="pl.13.17"></a><var>13.17</var>section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009, <br/>
<a id="pl.13.18"></a><var>13.18</var>the commissioner shall then determine the percent change from the 12 months ending on <br/>
<a id="pl.13.19"></a><var>13.19</var>August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent <br/>
<a id="pl.13.20"></a><var>13.20</var>year, from the 12 months ending on August 31, 2007, to the 12 months ending on August <br/>
<a id="pl.13.21"></a><var>13.21</var>31 of the year preceding the taxable year. The earned income thresholds as adjusted <br/>
<a id="pl.13.22"></a><var>13.22</var>for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount <br/>
<a id="pl.13.23"></a><var>13.23</var>is rounded up to the nearest $10. The determination of the commissioner under this <br/>
<a id="pl.13.24"></a><var>13.24</var>subdivision is not a rule under the Administrative Procedure Act.<br/>
<a id="pl.13.25"></a><var>13.25</var>(h) For tax years beginning after December 31, 2010, and before January 1, 2012, <br/>
<a id="pl.13.26"></a><var>13.26</var>the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph <br/>
<a id="pl.13.27"></a><var>13.27</var>(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000 <br/>
<a id="pl.13.28"></a><var>13.28</var>for married taxpayers filing joint returns. For tax years beginning after December 31, <br/>
<a id="pl.13.29"></a><var>13.29</var>2010, and before January 1, 2012, the commissioner shall annually adjust the $5,000 <br/>
<a id="pl.13.30"></a><var>13.30</var>by the percentage determined pursuant to the provisions of section 1(f) of the Internal <br/>
<a id="pl.13.31"></a><var>13.31</var>Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for <br/>
<a id="pl.13.32"></a><var>13.32</var>the word "1992." For 2011, the commissioner shall then determine the percent change <br/>
<a id="pl.13.33"></a><var>13.33</var>from the 12 months ending on August 31, 2008, to the 12 months ending on August <br/>
<a id="pl.13.34"></a><var>13.34</var>31, 2010. The earned income thresholds as adjusted for inflation must be rounded to <br/>
<a id="pl.13.35"></a><var>13.35</var>the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10. <br/>
<a id="pl.14.1"></a><var>14.1</var>The determination of the commissioner under this subdivision is not a rule under the <br/>
<a id="pl.14.2"></a><var>14.2</var>Administrative Procedure Act.<br/>
<a id="pl.14.3"></a><var>14.3</var>(i) The commissioner shall construct tables showing the amount of the credit at <br/>
<a id="pl.14.4"></a><var>14.4</var>various income levels and make them available to taxpayers. The tables shall follow <br/>
<a id="pl.14.5"></a><var>14.5</var>the schedule contained in this subdivision, except that the commissioner may graduate <br/>
<a id="pl.14.6"></a><var>14.6</var>the transition between income brackets.<br/>
<br/>
<a id="bill.0.14.0"></a><a id="pl.14.7"></a><var>14.7</var>    Sec. 14. Minnesota Statutes 2011 Supplement, section 290.091, subdivision 2, is <br/>
<a id="pl.14.8"></a><var>14.8</var>amended to read:<br/>
<a id="pl.14.9"></a><var>14.9</var>    Subd. 2. <b>Definitions.</b> For purposes of the tax imposed by this section, the following <br/>
<a id="pl.14.10"></a><var>14.10</var>terms have the meanings given:<br/>
<a id="pl.14.11"></a><var>14.11</var>    (a) "Alternative minimum taxable income" means the sum of the following for <br/>
<a id="pl.14.12"></a><var>14.12</var>the taxable year:<br/>
<a id="pl.14.13"></a><var>14.13</var>    (1) the taxpayer's federal alternative minimum taxable income as defined in section <br/>
<a id="pl.14.14"></a><var>14.14</var>55(b)(2) of the Internal Revenue Code;<br/>
<a id="pl.14.15"></a><var>14.15</var>    (2) the taxpayer's itemized deductions allowed in computing federal alternative <br/>
<a id="pl.14.16"></a><var>14.16</var>minimum taxable income, but excluding:<br/>
<a id="pl.14.17"></a><var>14.17</var>    (i) the charitable contribution deduction under section 170 of the Internal Revenue <br/>
<a id="pl.14.18"></a><var>14.18</var>Code;<br/>
<a id="pl.14.19"></a><var>14.19</var>    (ii) the medical expense deduction;<br/>
<a id="pl.14.20"></a><var>14.20</var>    (iii) the casualty, theft, and disaster loss deduction; and<br/>
<a id="pl.14.21"></a><var>14.21</var>    (iv) the impairment-related work expenses of a disabled person;<br/>
<a id="pl.14.22"></a><var>14.22</var>    (3) for depletion allowances computed under section 613A(c) of the Internal <br/>
<a id="pl.14.23"></a><var>14.23</var>Revenue Code, with respect to each property (as defined in section 614 of the Internal <br/>
<a id="pl.14.24"></a><var>14.24</var>Revenue Code), to the extent not included in federal alternative minimum taxable income, <br/>
<a id="pl.14.25"></a><var>14.25</var>the excess of the deduction for depletion allowable under section 611 of the Internal <br/>
<a id="pl.14.26"></a><var>14.26</var>Revenue Code for the taxable year over the adjusted basis of the property at the end of the <br/>
<a id="pl.14.27"></a><var>14.27</var>taxable year (determined without regard to the depletion deduction for the taxable year);<br/>
<a id="pl.14.28"></a><var>14.28</var>    (4) to the extent not included in federal alternative minimum taxable income, the <br/>
<a id="pl.14.29"></a><var>14.29</var>amount of the tax preference for intangible drilling cost under section 57(a)(2) of the <br/>
<a id="pl.14.30"></a><var>14.30</var>Internal Revenue Code determined without regard to subparagraph (E);<br/>
<a id="pl.14.31"></a><var>14.31</var>    (5) to the extent not included in federal alternative minimum taxable income, the <br/>
<a id="pl.14.32"></a><var>14.32</var>amount of interest income as provided by section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clause (1); and<br/>
<a id="pl.14.33"></a><var>14.33</var>    (6) the amount of addition required by section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clauses (7) <br/>
<a id="pl.14.34"></a><var>14.34</var>to (9), (12), (13), and (16) to (18);<br/>
<a id="pl.14.35"></a><var>14.35</var>    less the sum of the amounts determined under the following:<br/>
<a id="pl.15.1"></a><var>15.1</var>    (1) interest income as defined in section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clause (1);<br/>
<a id="pl.15.2"></a><var>15.2</var>    (2) an overpayment of state income tax as provided by section 
         <statute_ref>290.01, subdivision <br/>
<a id="pl.15.3"></a><var>15.3</var>19b
         </statute_ref>, clause (2), to the extent included in federal alternative minimum taxable income;<br/>
<a id="pl.15.4"></a><var>15.4</var>    (3) the amount of investment interest paid or accrued within the taxable year on <br/>
<a id="pl.15.5"></a><var>15.5</var>indebtedness to the extent that the amount does not exceed net investment income, as <br/>
<a id="pl.15.6"></a><var>15.6</var>defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include <br/>
<a id="pl.15.7"></a><var>15.7</var>amounts deducted in computing federal adjusted gross income;<br/>
<a id="pl.15.8"></a><var>15.8</var>    (4) amounts subtracted from federal taxable income as provided by section 
         <statute_ref>290.01, <br/>
<a id="pl.15.9"></a><var>15.9</var>subdivision 19b
         </statute_ref>, clauses (6), (8) to (15) (14), and (17) (16); and<br/>
<a id="pl.15.10"></a><var>15.10</var>(5) the amount of the net operating loss allowed under section 
         <statute_ref>290.095, subdivision <br/>
</statute_ref><a id="pl.15.11"></a><var>15.11</var>11, paragraph (c).<br/>
<a id="pl.15.12"></a><var>15.12</var>    In the case of an estate or trust, alternative minimum taxable income must be <br/>
<a id="pl.15.13"></a><var>15.13</var>computed as provided in section 59(c) of the Internal Revenue Code.<br/>
<a id="pl.15.14"></a><var>15.14</var>    (b) "Investment interest" means investment interest as defined in section 163(d)(3) <br/>
<a id="pl.15.15"></a><var>15.15</var>of the Internal Revenue Code.<br/>
<a id="pl.15.16"></a><var>15.16</var>    (c) "Net minimum tax" means the minimum tax imposed by this section.<br/>
<a id="pl.15.17"></a><var>15.17</var>    (d) "Regular tax" means the tax that would be imposed under this chapter (without <br/>
<a id="pl.15.18"></a><var>15.18</var>regard to this section and section 290.032), reduced by the sum of the nonrefundable <br/>
<a id="pl.15.19"></a><var>15.19</var>credits allowed under this chapter.<br/>
<a id="pl.15.20"></a><var>15.20</var>    (e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable <br/>
<a id="pl.15.21"></a><var>15.21</var>income after subtracting the exemption amount determined under subdivision 3.<br/>
<br/>
<a id="bill.0.15.0"></a><a id="pl.15.22"></a><var>15.22</var>    Sec. 15. Minnesota Statutes 2010, section 290.0921, subdivision 3, is amended to read:<br/>
<a id="pl.15.23"></a><var>15.23</var>    Subd. 3. <b>Alternative minimum taxable income.</b> "Alternative minimum taxable <br/>
<a id="pl.15.24"></a><var>15.24</var>income" is Minnesota net income as defined in section 
         <statute_ref>290.01, subdivision 19</statute_ref>, and <br/>
<a id="pl.15.25"></a><var>15.25</var>includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), <br/>
<a id="pl.15.26"></a><var>15.26</var>(f), and (h) of the Internal Revenue Code. If a corporation files a separate company <br/>
<a id="pl.15.27"></a><var>15.27</var>Minnesota tax return, the minimum tax must be computed on a separate company basis. <br/>
<a id="pl.15.28"></a><var>15.28</var>If a corporation is part of a tax group filing a unitary return, the minimum tax must be <br/>
<a id="pl.15.29"></a><var>15.29</var>computed on a unitary basis. The following adjustments must be made.<br/>
<a id="pl.15.30"></a><var>15.30</var>(1) For purposes of the depreciation adjustments under section 56(a)(1) and <br/>
<a id="pl.15.31"></a><var>15.31</var>56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in <br/>
<a id="pl.15.32"></a><var>15.32</var>service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal <br/>
<a id="pl.15.33"></a><var>15.33</var>income tax purposes, including any modification made in a taxable year under section <br/>
<statute_ref><a id="pl.15.34"></a><var>15.34</var>290.01, subdivision 19e
         </statute_ref>, or Minnesota Statutes 1986, section 
         <statute_ref>290.09, subdivision 7</statute_ref>, <br/>
<a id="pl.15.35"></a><var>15.35</var>paragraph (c).<br/>
<a id="pl.16.1"></a><var>16.1</var>For taxable years beginning after December 31, 2000, the amount of any remaining <br/>
<a id="pl.16.2"></a><var>16.2</var>modification made under section 
         <statute_ref>290.01, subdivision 19e</statute_ref>, or Minnesota Statutes 1986, <br/>
<a id="pl.16.3"></a><var>16.3</var>section 
         <statute_ref>290.09, subdivision 7</statute_ref>, paragraph (c), not previously deducted is a depreciation <br/>
<a id="pl.16.4"></a><var>16.4</var>allowance in the first taxable year after December 31, 2000.<br/>
<a id="pl.16.5"></a><var>16.5</var>(2) The portion of the depreciation deduction allowed for federal income tax <br/>
<a id="pl.16.6"></a><var>16.6</var>purposes under section 168(k) of the Internal Revenue Code that is required as an <br/>
<a id="pl.16.7"></a><var>16.7</var>addition under section 
         <statute_ref>290.01, subdivision 19c</statute_ref>, clause (15), is disallowed in determining <br/>
<a id="pl.16.8"></a><var>16.8</var>alternative minimum taxable income.<br/>
<a id="pl.16.9"></a><var>16.9</var>(3) The subtraction for depreciation allowed under section 
         <statute_ref>290.01, subdivision 19d</statute_ref>, <br/>
<a id="pl.16.10"></a><var>16.10</var>clause (17), is allowed as a depreciation deduction in determining alternative minimum <br/>
<a id="pl.16.11"></a><var>16.11</var>taxable income.<br/>
<a id="pl.16.12"></a><var>16.12</var>(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) <br/>
<a id="pl.16.13"></a><var>16.13</var>of the Internal Revenue Code does not apply.<br/>
<a id="pl.16.14"></a><var>16.14</var>(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal <br/>
<a id="pl.16.15"></a><var>16.15</var>Revenue Code does not apply.<br/>
<a id="pl.16.16"></a><var>16.16</var>(6) The special rule for dividends from section 936 companies under section <br/>
<a id="pl.16.17"></a><var>16.17</var>56(g)(4)(C)(iii) does not apply.<br/>
<a id="pl.16.18"></a><var>16.18</var>(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue <br/>
<a id="pl.16.19"></a><var>16.19</var>Code does not apply.<br/>
<a id="pl.16.20"></a><var>16.20</var>(8) The tax preference for intangible drilling costs under section 57(a)(2) of the <br/>
<a id="pl.16.21"></a><var>16.21</var>Internal Revenue Code must be calculated without regard to subparagraph (E) and the <br/>
<a id="pl.16.22"></a><var>16.22</var>subtraction under section 
         <statute_ref>290.01, subdivision 19d</statute_ref>, clause (4).<br/>
<a id="pl.16.23"></a><var>16.23</var>(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal <br/>
<a id="pl.16.24"></a><var>16.24</var>Revenue Code does not apply.<br/>
<a id="pl.16.25"></a><var>16.25</var>(10) The tax preference for charitable contributions of appreciated property under <br/>
<a id="pl.16.26"></a><var>16.26</var>section 57(a)(6) of the Internal Revenue Code does not apply.<br/>
<a id="pl.16.27"></a><var>16.27</var>(11) For purposes of calculating the tax preference for accelerated depreciation or <br/>
<a id="pl.16.28"></a><var>16.28</var>amortization on certain property placed in service before January 1, 1987, under section <br/>
<a id="pl.16.29"></a><var>16.29</var>57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the <br/>
<a id="pl.16.30"></a><var>16.30</var>deduction allowed under section 
         <statute_ref>290.01, subdivision 19e</statute_ref>.<br/>
<a id="pl.16.31"></a><var>16.31</var>For taxable years beginning after December 31, 2000, the amount of any remaining <br/>
<a id="pl.16.32"></a><var>16.32</var>modification made under section 
         <statute_ref>290.01, subdivision 19e</statute_ref>, not previously deducted is a <br/>
<a id="pl.16.33"></a><var>16.33</var>depreciation or amortization allowance in the first taxable year after December 31, 2004.<br/>
<a id="pl.16.34"></a><var>16.34</var>(12) For purposes of calculating the adjustment for adjusted current earnings in <br/>
<a id="pl.16.35"></a><var>16.35</var>section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable <br/>
<a id="pl.16.36"></a><var>16.36</var>income" as it is used in section 56(g) of the Internal Revenue Code, means alternative <br/>
<a id="pl.17.1"></a><var>17.1</var>minimum taxable income as defined in this subdivision, determined without regard to the <br/>
<a id="pl.17.2"></a><var>17.2</var>adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.<br/>
<a id="pl.17.3"></a><var>17.3</var>(13) For purposes of determining the amount of adjusted current earnings under <br/>
<a id="pl.17.4"></a><var>17.4</var>section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section <br/>
<a id="pl.17.5"></a><var>17.5</var>56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend <br/>
<a id="pl.17.6"></a><var>17.6</var>gross-up subtracted as provided in section 
         <statute_ref>290.01, subdivision 19d</statute_ref>, clause (1), (ii) the <br/>
<a id="pl.17.7"></a><var>17.7</var>amount of refunds of income, excise, or franchise taxes subtracted as provided in section <br/>
<statute_ref><a id="pl.17.8"></a><var>17.8</var>290.01, subdivision 19d
         </statute_ref>, clause (9), or (iii) the amount of royalties, fees or other like <br/>
<a id="pl.17.9"></a><var>17.9</var>income subtracted as provided in section 
         <statute_ref>290.01, subdivision 19d</statute_ref>, clause (10).<br/>
<a id="pl.17.10"></a><var>17.10</var>(14) Alternative minimum taxable income excludes the income from operating in a <br/>
<a id="pl.17.11"></a><var>17.11</var>job opportunity building zone as provided under section 
         <statute_ref>469.317</statute_ref>.<br/>
<a id="pl.17.12"></a><var>17.12</var>(15) Alternative minimum taxable income excludes the income from operating in a <br/>
<a id="pl.17.13"></a><var>17.13</var>biotechnology and health sciences industry zone as provided under section 
         <statute_ref>469.337</statute_ref>.<br/>
<a id="pl.17.14"></a><var>17.14</var>(16) Alternative minimum taxable income excludes the income from operating in an <br/>
<a id="pl.17.15"></a><var>17.15</var>international economic development zone as provided under section 
<statute_ref>469.326</statute_ref>.<br/>
<a id="pl.17.16"></a><var>17.16</var>Items of tax preference must not be reduced below zero as a result of the <br/>
<a id="pl.17.17"></a><var>17.17</var>modifications in this subdivision.<br/>
<br/>
<a id="bill.0.16.0"></a><a id="pl.17.18"></a><var>17.18</var>    Sec. 16. Minnesota Statutes 2011 Supplement, section 290.0922, subdivision 2, <br/>
<a id="pl.17.19"></a><var>17.19</var>is amended to read:<br/>
<a id="pl.17.20"></a><var>17.20</var>    Subd. 2. <b>Exemptions.</b> The following entities are exempt from the tax imposed <br/>
<a id="pl.17.21"></a><var>17.21</var>by this section:<br/>
<a id="pl.17.22"></a><var>17.22</var>(1) corporations exempt from tax under section 
         <statute_ref>290.05</statute_ref>;<br/>
<a id="pl.17.23"></a><var>17.23</var>(2) real estate investment trusts;<br/>
<a id="pl.17.24"></a><var>17.24</var>(3) regulated investment companies or a fund thereof; and<br/>
<a id="pl.17.25"></a><var>17.25</var>(4) entities having a valid election in effect under section 860D(b) of the Internal <br/>
<a id="pl.17.26"></a><var>17.26</var>Revenue Code;<br/>
<a id="pl.17.27"></a><var>17.27</var>(5) town and farmers' mutual insurance companies;<br/>
<a id="pl.17.28"></a><var>17.28</var>(6) cooperatives organized under chapter 308A or 308B that provide housing <br/>
<a id="pl.17.29"></a><var>17.29</var>exclusively to persons age 55 and over and are classified as homesteads under section <br/>
<statute_ref><a id="pl.17.30"></a><var>17.30</var>273.124, subdivision 3
         </statute_ref>; and<br/>
<a id="pl.17.31"></a><var>17.31</var>(7) a qualified business as defined under section 
         <statute_ref>469.310, subdivision 11</statute_ref>, if for the <br/>
<a id="pl.17.32"></a><var>17.32</var>taxable year all of its property is located in a job opportunity building zone designated <br/>
<a id="pl.17.33"></a><var>17.33</var>under section 
         <statute_ref>469.314</statute_ref> and all of its payroll is a job opportunity building zone payroll <br/>
<a id="pl.17.34"></a><var>17.34</var>under section 
         <statute_ref>469.310</statute_ref>; and.<br/>
<a id="pl.18.1"></a><var>18.1</var>(8) an entity, if for the taxable year all of its property is located in an international <br/>
<a id="pl.18.2"></a><var>18.2</var>economic development zone designated under section 
<statute_ref>469.322</statute_ref>, and all of its payroll is <br/>
<a id="pl.18.3"></a><var>18.3</var>international economic development zone payroll under section 
<statute_ref>469.321</statute_ref>. The exemption <br/>
<a id="pl.18.4"></a><var>18.4</var>under this clause applies to taxable years beginning during the duration of the international <br/>
<a id="pl.18.5"></a><var>18.5</var>economic development zone.<br/>
<a id="pl.18.6"></a><var>18.6</var>Entities not specifically exempted by this subdivision are subject to tax under this <br/>
<a id="pl.18.7"></a><var>18.7</var>section, notwithstanding section 
         <statute_ref>290.05</statute_ref>.<br/>
<br/>
<a id="bill.0.17.0"></a><a id="pl.18.8"></a><var>18.8</var>    Sec. 17. Minnesota Statutes 2011 Supplement, section 290.0922, subdivision 3, <br/>
<a id="pl.18.9"></a><var>18.9</var>is amended to read:<br/>
<a id="pl.18.10"></a><var>18.10</var>    Subd. 3. <b>Definitions.</b> (a) "Minnesota sales or receipts" means the total sales <br/>
<a id="pl.18.11"></a><var>18.11</var>apportioned to Minnesota pursuant to section 
         <statute_ref>290.191, subdivision 5</statute_ref>, the total receipts <br/>
<a id="pl.18.12"></a><var>18.12</var>attributed to Minnesota pursuant to section 
         <statute_ref>290.191, subdivisions 6 to 8</statute_ref>, and/or the <br/>
<a id="pl.18.13"></a><var>18.13</var>total sales or receipts apportioned or attributed to Minnesota pursuant to any other <br/>
<a id="pl.18.14"></a><var>18.14</var>apportionment formula applicable to the taxpayer.<br/>
<a id="pl.18.15"></a><var>18.15</var>(b) "Minnesota property" means total Minnesota tangible property as provided in <br/>
<a id="pl.18.16"></a><var>18.16</var>section 
         <statute_ref>290.191, subdivisions 9 to 11</statute_ref>, any other tangible property located in Minnesota, <br/>
<a id="pl.18.17"></a><var>18.17</var>but does not include: (1) the property of a qualified business as defined under section <br/>
<statute_ref><a id="pl.18.18"></a><var>18.18</var>469.310, subdivision 11
         </statute_ref>, that is located in a job opportunity building zone designated under <br/>
<a id="pl.18.19"></a><var>18.19</var>section 
         <statute_ref>469.314</statute_ref>, and (2) property of a qualified business located in a biotechnology and <br/>
<a id="pl.18.20"></a><var>18.20</var>health sciences industry zone designated under section 
         <statute_ref>469.334</statute_ref>, or (3) for taxable years <br/>
<a id="pl.18.21"></a><var>18.21</var>beginning during the duration of the zone, property of a qualified business located in the <br/>
<a id="pl.18.22"></a><var>18.22</var>international economic development zone designated under section 
<statute_ref>469.322</statute_ref>. Intangible <br/>
<a id="pl.18.23"></a><var>18.23</var>property shall not be included in Minnesota property for purposes of this section. <br/>
<a id="pl.18.24"></a><var>18.24</var>Taxpayers who do not utilize tangible property to apportion income shall nevertheless <br/>
<a id="pl.18.25"></a><var>18.25</var>include Minnesota property for purposes of this section. On a return for a short taxable <br/>
<a id="pl.18.26"></a><var>18.26</var>year, the amount of Minnesota property owned, as determined under section 
         <statute_ref>290.191</statute_ref>, <br/>
<a id="pl.18.27"></a><var>18.27</var>shall be included in Minnesota property based on a fraction in which the numerator is the <br/>
<a id="pl.18.28"></a><var>18.28</var>number of days in the short taxable year and the denominator is 365.<br/>
<a id="pl.18.29"></a><var>18.29</var>(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section <br/>
<statute_ref><a id="pl.18.30"></a><var>18.30</var>290.191, subdivision 12
         </statute_ref>, but does not include: (1) the job opportunity building zone <br/>
<a id="pl.18.31"></a><var>18.31</var>payroll under section 
         <statute_ref>469.310, subdivision 8</statute_ref>, of a qualified business as defined under <br/>
<a id="pl.18.32"></a><var>18.32</var>section 
         <statute_ref>469.310, subdivision 11</statute_ref>, and (2) biotechnology and health sciences industry zone <br/>
<a id="pl.18.33"></a><var>18.33</var>payrolls under section 
         <statute_ref>469.330, subdivision 8</statute_ref>, or (3) for taxable years beginning during <br/>
<a id="pl.18.34"></a><var>18.34</var>the duration of the zone, international economic development zone payrolls under section <br/>
<a id="pl.19.1"></a><var>19.1</var><statute_ref>469.321, subdivision 9</statute_ref>. Taxpayers who do not utilize payrolls to apportion income shall <br/>
<a id="pl.19.2"></a><var>19.2</var>nevertheless include Minnesota payrolls for purposes of this section.<br/>
<br/>
<a id="bill.0.18.0"></a><a id="pl.19.3"></a><var>19.3</var>    Sec. 18. Minnesota Statutes 2011 Supplement, section 297A.75, subdivision 1, is <br/>
<a id="pl.19.4"></a><var>19.4</var>amended to read:<br/>
<a id="pl.19.5"></a><var>19.5</var>    Subdivision 1. <b>Tax collected.</b> The tax on the gross receipts from the sale of the <br/>
<a id="pl.19.6"></a><var>19.6</var>following exempt items must be imposed and collected as if the sale were taxable and the <br/>
<a id="pl.19.7"></a><var>19.7</var>rate under section 
         <statute_ref>297A.62, subdivision 1</statute_ref>, applied. The exempt items include:<br/>
<a id="pl.19.8"></a><var>19.8</var>    (1) capital equipment exempt under section 
         <statute_ref>297A.68, subdivision 5</statute_ref>;<br/>
<a id="pl.19.9"></a><var>19.9</var>    (2) building materials for an agricultural processing facility exempt under section <br/>
<statute_ref><a id="pl.19.10"></a><var>19.10</var>297A.71, subdivision 13
         </statute_ref>;<br/>
<a id="pl.19.11"></a><var>19.11</var>    (3) building materials for mineral production facilities exempt under section <br/>
<statute_ref><a id="pl.19.12"></a><var>19.12</var>297A.71, subdivision 14
         </statute_ref>;<br/>
<a id="pl.19.13"></a><var>19.13</var>    (4) building materials for correctional facilities under section 
         <statute_ref>297A.71, subdivision <br/>
<a id="pl.19.14"></a><var>19.14</var>3
         </statute_ref>;<br/>
<a id="pl.19.15"></a><var>19.15</var>    (5) building materials used in a residence for disabled veterans exempt under section <br/>
<statute_ref><a id="pl.19.16"></a><var>19.16</var>297A.71, subdivision 11
         </statute_ref>;<br/>
<a id="pl.19.17"></a><var>19.17</var>    (6) elevators and building materials exempt under section 
         <statute_ref>297A.71, subdivision 12</statute_ref>;<br/>
<a id="pl.19.18"></a><var>19.18</var>    (7) building materials for the Long Lake Conservation Center exempt under section <br/>
<statute_ref><a id="pl.19.19"></a><var>19.19</var>297A.71, subdivision 17
         </statute_ref>;<br/>
<a id="pl.19.20"></a><var>19.20</var>    (8) materials and supplies for qualified low-income housing under section 
         <statute_ref>297A.71, <br/>
<a id="pl.19.21"></a><var>19.21</var>subdivision 23
         </statute_ref>;<br/>
<a id="pl.19.22"></a><var>19.22</var>    (9) materials, supplies, and equipment for municipal electric utility facilities under <br/>
<a id="pl.19.23"></a><var>19.23</var>section 
         <statute_ref>297A.71, subdivision 35</statute_ref>;<br/>
<a id="pl.19.24"></a><var>19.24</var>    (10) equipment and materials used for the generation, transmission, and distribution <br/>
<a id="pl.19.25"></a><var>19.25</var>of electrical energy and an aerial camera package exempt under section 
         <statute_ref>297A.68</statute_ref>, <br/>
<a id="pl.19.26"></a><var>19.26</var>subdivision 37;<br/>
<a id="pl.19.27"></a><var>19.27</var>    (11) tangible personal property and taxable services and construction materials, <br/>
<a id="pl.19.28"></a><var>19.28</var>supplies, and equipment exempt under section 
<statute_ref>297A.68</statute_ref>, subdivision 41;<br/>
<a id="pl.19.29"></a><var>19.29</var>    (12) commuter rail vehicle and repair parts under section 
         <statute_ref>297A.70</statute_ref>, subdivision <br/>
<a id="pl.19.30"></a><var>19.30</var>3, clause (11);<br/>
<a id="pl.19.31"></a><var>19.31</var>    (13) (12) materials, supplies, and equipment for construction or improvement of <br/>
<a id="pl.19.32"></a><var>19.32</var>projects and facilities under section 
         <statute_ref>297A.71, subdivision 40</statute_ref>;<br/>
<a id="pl.19.33"></a><var>19.33</var>(14) (13) materials, supplies, and equipment for construction or improvement of a <br/>
<a id="pl.19.34"></a><var>19.34</var>meat processing facility exempt under section 
         <statute_ref>297A.71, subdivision 41</statute_ref>;<br/>
<a id="pl.20.1"></a><var>20.1</var>(15) (14) materials, supplies, and equipment for construction, improvement, or <br/>
<a id="pl.20.2"></a><var>20.2</var>expansion of an aerospace defense manufacturing facility exempt under section 
         <statute_ref>297A.71</statute_ref>, <br/>
<a id="pl.20.3"></a><var>20.3</var>subdivision 42; and<br/>
<a id="pl.20.4"></a><var>20.4</var>(16) (15) enterprise information technology equipment and computer software for <br/>
<a id="pl.20.5"></a><var>20.5</var>use in a qualified data center exempt under section 
         <statute_ref>297A.68, subdivision 42</statute_ref>.<br/>
<br/>
<a id="bill.0.19.0"></a><a id="pl.20.6"></a><var>20.6</var>    Sec. 19. Minnesota Statutes 2010, section 469.015, subdivision 4, is amended to read:<br/>
<a id="pl.20.7"></a><var>20.7</var>    Subd. 4. <b>Exceptions.</b> (a) An authority need not require competitive bidding in the <br/>
<a id="pl.20.8"></a><var>20.8</var>following circumstances:<br/>
<a id="pl.20.9"></a><var>20.9</var>(1) in the case of a contract for the acquisition of a low-rent housing project:<br/>
<a id="pl.20.10"></a><var>20.10</var>(i) for which financial assistance is provided by the federal government;<br/>
<a id="pl.20.11"></a><var>20.11</var>(ii) which does not require any direct loan or grant of money from the municipality <br/>
<a id="pl.20.12"></a><var>20.12</var>as a condition of the federal financial assistance; and<br/>
<a id="pl.20.13"></a><var>20.13</var>(iii) for which the contract provides for the construction of the project upon land that <br/>
<a id="pl.20.14"></a><var>20.14</var>is either owned by the authority for redevelopment purposes or not owned by the authority <br/>
<a id="pl.20.15"></a><var>20.15</var>at the time of the contract but the contract provides for the conveyance or lease to the <br/>
<a id="pl.20.16"></a><var>20.16</var>authority of the project or improvements upon completion of construction;<br/>
<a id="pl.20.17"></a><var>20.17</var>(2) with respect to a structured parking facility:<br/>
<a id="pl.20.18"></a><var>20.18</var>(i) constructed in conjunction with, and directly above or below, a development; and<br/>
<a id="pl.20.19"></a><var>20.19</var>(ii) financed with the proceeds of tax increment or parking ramp general obligation <br/>
<a id="pl.20.20"></a><var>20.20</var>or revenue bonds; and<br/>
<a id="pl.20.21"></a><var>20.21</var>(3) until August 1, 2009, with respect to a facility built for the purpose of facilitating <br/>
<a id="pl.20.22"></a><var>20.22</var>the operation of public transit or encouraging its use:<br/>
<a id="pl.20.23"></a><var>20.23</var>(i) constructed in conjunction with, and directly above or below, a development; and<br/>
<a id="pl.20.24"></a><var>20.24</var>(ii) financed with the proceeds of parking ramp general obligation or revenue bonds <br/>
<a id="pl.20.25"></a><var>20.25</var>or with at least 60 percent of the construction cost being financed with funding provided <br/>
<a id="pl.20.26"></a><var>20.26</var>by the federal government; and<br/>
<a id="pl.20.27"></a><var>20.27</var>(4) in the case of any building in which at least 75 percent of the usable square <br/>
<a id="pl.20.28"></a><var>20.28</var>footage constitutes a housing development project if:<br/>
<a id="pl.20.29"></a><var>20.29</var>(i) the project is financed with the proceeds of bonds issued under section 
         <statute_ref>469.034</statute_ref> or <br/>
<a id="pl.20.30"></a><var>20.30</var>from nongovernmental sources;<br/>
<a id="pl.20.31"></a><var>20.31</var>(ii) the project is either located on land that is owned or is being acquired by the <br/>
<a id="pl.20.32"></a><var>20.32</var>authority only for development purposes, or is not owned by the authority at the time the <br/>
<a id="pl.20.33"></a><var>20.33</var>contract is entered into but the contract provides for conveyance or lease to the authority <br/>
<a id="pl.20.34"></a><var>20.34</var>of the project or improvements upon completion of construction; and<br/>
<a id="pl.21.1"></a><var>21.1</var>(iii) the authority finds and determines that elimination of the public bidding <br/>
<a id="pl.21.2"></a><var>21.2</var>requirements is necessary in order for the housing development project to be economical <br/>
<a id="pl.21.3"></a><var>21.3</var>and feasible.<br/>
<a id="pl.21.4"></a><var>21.4</var>(b) An authority need not require a performance bond for the following projects:<br/>
<a id="pl.21.5"></a><var>21.5</var>(1) a contract described in paragraph (a), clause (1);<br/>
<a id="pl.21.6"></a><var>21.6</var>(2) a construction change order for a housing project in which 30 percent of the <br/>
<a id="pl.21.7"></a><var>21.7</var>construction has been completed;<br/>
<a id="pl.21.8"></a><var>21.8</var>(3) a construction contract for a single-family housing project in which the authority <br/>
<a id="pl.21.9"></a><var>21.9</var>acts as the general construction contractor; or<br/>
<a id="pl.21.10"></a><var>21.10</var>(4) a services or materials contract for a housing project.<br/>
<a id="pl.21.11"></a><var>21.11</var>For purposes of this paragraph, "services or materials contract" does not include <br/>
<a id="pl.21.12"></a><var>21.12</var>construction contracts.<br/>
<br/>
<a id="bill.0.20.0"></a><a id="pl.21.13"></a><var>21.13</var>    Sec. 20. Minnesota Statutes 2010, section 469.033, subdivision 7, is amended to read:<br/>
<a id="pl.21.14"></a><var>21.14</var>    Subd. 7. <b>Inactive authorities; transfer of funds; dissolution.</b> The authority may <br/>
<a id="pl.21.15"></a><var>21.15</var>transfer to the city in and for which it was created all property, assets, cash or other <br/>
<a id="pl.21.16"></a><var>21.16</var>funds held or used by the authority which were derived from the special benefit tax <br/>
<a id="pl.21.17"></a><var>21.17</var>for redevelopment levied pursuant to subdivision 6 prior to March 6, 1953, whenever <br/>
<a id="pl.21.18"></a><var>21.18</var>collected. Upon any such transfer, an authority shall not thereafter levy the tax or exercise <br/>
<a id="pl.21.19"></a><var>21.19</var>the redevelopment powers of sections 
         <statute_ref>469.001</statute_ref> to 
         <statute_ref>469.047</statute_ref>. All cash or other funds <br/>
<a id="pl.21.20"></a><var>21.20</var>transferred to the city shall be used exclusively for permanent improvements in the city <br/>
<a id="pl.21.21"></a><var>21.21</var>or the retirement of debts or bonds incurred for permanent improvements in the city. <br/>
<a id="pl.21.22"></a><var>21.22</var>An authority which transfers its property, assets, cash, or other funds derived from the <br/>
<a id="pl.21.23"></a><var>21.23</var>special benefit tax for redevelopment and which has not entered into a contract with <br/>
<a id="pl.21.24"></a><var>21.24</var>the federal government with respect to any low-rent public housing project prior to <br/>
<a id="pl.21.25"></a><var>21.25</var>March 6, 1953, shall be dissolved as herein provided in this subdivision. After a public <br/>
<a id="pl.21.26"></a><var>21.26</var>hearing after ten days' published notice thereof in a newspaper of general circulation in <br/>
<a id="pl.21.27"></a><var>21.27</var>the city, the governing body of a city in and for which an authority has been created <br/>
<a id="pl.21.28"></a><var>21.28</var>may dissolve the authority if the authority has not entered into any contract with the <br/>
<a id="pl.21.29"></a><var>21.29</var>federal government or any agency or instrumentality thereof for a loan or a grant with <br/>
<a id="pl.21.30"></a><var>21.30</var>respect to any urban redevelopment or low-rent public housing project that remains in <br/>
<a id="pl.21.31"></a><var>21.31</var>effect. The resolution or ordinance dissolving the authority shall be published in the <br/>
<a id="pl.21.32"></a><var>21.32</var>same manner in which ordinances are published in the city and the authority shall be <br/>
<a id="pl.21.33"></a><var>21.33</var>dissolved when the resolution or ordinance becomes finally effective. The clerk of the <br/>
<a id="pl.21.34"></a><var>21.34</var>governing body of the municipality shall furnish to the commissioner of employment and <br/>
<a id="pl.21.35"></a><var>21.35</var>economic development a certified copy of the resolution or ordinance of the governing <br/>
<a id="pl.22.1"></a><var>22.1</var>body dissolving the authority. All property, records, assets, cash, or other funds held or <br/>
<a id="pl.22.2"></a><var>22.2</var>used by an authority shall be transferred to and become the property of the municipality <br/>
<a id="pl.22.3"></a><var>22.3</var>and cash or other funds shall be used as herein provided. Upon dissolution of an authority, <br/>
<a id="pl.22.4"></a><var>22.4</var>all rights of an authority against any person, firm, or corporation shall accrue to and <br/>
<a id="pl.22.5"></a><var>22.5</var>be enforced by the municipality.<br/>
<br/>
<a id="bill.0.21.0"></a><a id="pl.22.6"></a><var>22.6</var>    Sec. 21. Minnesota Statutes 2010, section 469.166, subdivision 3, is amended to read:<br/>
<a id="pl.22.7"></a><var>22.7</var>    Subd. 3. <b>Border city </b><b>enterprise zone.</b> "Border city enterprise zone" means an area <br/>
<a id="pl.22.8"></a><var>22.8</var>in the state designated as such an enterprise zone by the commissioner in the cities of <br/>
<a id="pl.22.9"></a><var>22.9</var>Breckenridge, Dilworth, East Grand Forks, Moorhead, or Ortonville.<br/>
<br/>
<a id="bill.0.22.0"></a><a id="pl.22.10"></a><var>22.10</var>    Sec. 22. Minnesota Statutes 2010, section 469.166, subdivision 5, is amended to read:<br/>
<a id="pl.22.11"></a><var>22.11</var>    Subd. 5. <b>Municipality.</b> "Municipality" means a city, or a county for an area located <br/>
<a id="pl.22.12"></a><var>22.12</var>outside the boundaries of a city. If an area lies in two or more cities or in both incorporated <br/>
<a id="pl.22.13"></a><var>22.13</var>and unincorporated areas, "municipality" shall include an entity formed pursuant to <br/>
<a id="pl.22.14"></a><var>22.14</var>section 
<statute_ref>471.59</statute_ref> by the governing bodies of the cities with jurisdiction over the incorporated <br/>
<a id="pl.22.15"></a><var>22.15</var>area and the counties with jurisdiction over the unincorporated area.<br/>
<br/>
<a id="bill.0.23.0"></a><a id="pl.22.16"></a><var>22.16</var>    Sec. 23. Minnesota Statutes 2010, section 469.166, subdivision 6, is amended to read:<br/>
<a id="pl.22.17"></a><var>22.17</var>    Subd. 6. <b>Governing body.</b> "Governing body" means the county board in the case <br/>
<a id="pl.22.18"></a><var>22.18</var>of a county, the city council or other body designated by its the charter in the case of a <br/>
<a id="pl.22.19"></a><var>22.19</var>of the city, or the tribal or federal agency recognized as the governing body of an Indian <br/>
<a id="pl.22.20"></a><var>22.20</var>reservation by the United States Secretary of the Interior.<br/>
<br/>
<a id="bill.0.24.0"></a><a id="pl.22.21"></a><var>22.21</var>    Sec. 24. Minnesota Statutes 2010, section 469.167, subdivision 2, is amended to read:<br/>
<a id="pl.22.22"></a><var>22.22</var>    Subd. 2. <b>Duration.</b> The designation of an area as an a border city enterprise zone <br/>
<a id="pl.22.23"></a><var>22.23</var>shall be effective for seven years after the date of designation, except that enterprise zones <br/>
<a id="pl.22.24"></a><var>22.24</var>in border cities eligible to receive allocations for tax reductions under section 
<statute_ref>469.169, <br/>
<a id="pl.22.25"></a><var>22.25</var>subdivisions 7 and 8
</statute_ref>, and under section 
<statute_ref>469.171, subdivision 6a</statute_ref> or 6b, shall be is effective <br/>
<a id="pl.22.26"></a><var>22.26</var>until terminated by resolution adopted by the city in which the border city enterprise <br/>
<a id="pl.22.27"></a><var>22.27</var>zone is located.<br/>
<br/>
<a id="bill.0.25.0"></a><a id="pl.22.28"></a><var>22.28</var>    Sec. 25. Minnesota Statutes 2010, section 469.171, subdivision 1, is amended to read:<br/>
<a id="pl.22.29"></a><var>22.29</var>    Subdivision 1. <b>Authorized types.</b> (a) The following types of tax reductions may <br/>
<a id="pl.22.30"></a><var>22.30</var>be approved by the commissioner for businesses located in an a border city enterprise <br/>
<a id="pl.22.31"></a><var>22.31</var>zone, after the governing body of the border city has designated an area or areas, each <br/>
<a id="pl.23.1"></a><var>23.1</var>consisting of at least 100 acres, of the city not in excess of a total of 400 acres in which the <br/>
<a id="pl.23.2"></a><var>23.2</var>tax reductions may be provided:<br/>
<a id="pl.23.3"></a><var>23.3</var>(1) an exemption from the general sales tax imposed by chapter 297A for purchases <br/>
<a id="pl.23.4"></a><var>23.4</var>of construction materials or equipment for use in the zone if the purchase was made <br/>
<a id="pl.23.5"></a><var>23.5</var>after the date of application for the zone;<br/>
<a id="pl.23.6"></a><var>23.6</var>(2) a credit against the income tax of an employer for additional workers employed <br/>
<a id="pl.23.7"></a><var>23.7</var>in the zone, other than workers employed in construction, up to a maximum of $3,000 <br/>
<a id="pl.23.8"></a><var>23.8</var>per employee per year;<br/>
<a id="pl.23.9"></a><var>23.9</var>(3) an income tax credit for a percentage of the cost of debt financing to construct <br/>
<a id="pl.23.10"></a><var>23.10</var>new or expanded facilities in the zone; and<br/>
<a id="pl.23.11"></a><var>23.11</var>(4) a state paid property tax credit for a portion of the property taxes paid by a new <br/>
<a id="pl.23.12"></a><var>23.12</var>commercial or industrial facility or the additional property taxes paid by an expansion of <br/>
<a id="pl.23.13"></a><var>23.13</var>an existing commercial or industrial facility in the zone.<br/>
<a id="pl.23.14"></a><var>23.14</var>(b) An application for a tax reduction under this subdivision may not be approved <br/>
<a id="pl.23.15"></a><var>23.15</var>unless the governing body finds that the construction or improvement of the facility is <br/>
<a id="pl.23.16"></a><var>23.16</var>not likely to have the effect of transferring existing employment from a location outside <br/>
<a id="pl.23.17"></a><var>23.17</var>of the municipality but within the state.<br/>
<br/>
<a id="bill.0.26.0"></a><a id="pl.23.18"></a><var>23.18</var>    Sec. 26. Minnesota Statutes 2010, section 469.171, subdivision 4, is amended to read:<br/>
<a id="pl.23.19"></a><var>23.19</var>    Subd. 4. <b>Restriction.</b> The tax reductions provided by this section shall not <br/>
<a id="pl.23.20"></a><var>23.20</var>apply to (1) a facility the primary purpose of which is one of the following: retail food <br/>
<a id="pl.23.21"></a><var>23.21</var>and beverage services, automobile sales or service, or the provision of recreation or <br/>
<a id="pl.23.22"></a><var>23.22</var>entertainment, or a private or commercial golf course, country club, massage parlor, tennis <br/>
<a id="pl.23.23"></a><var>23.23</var>club, skating facility including roller skating, skateboard, and ice skating, racquet sports <br/>
<a id="pl.23.24"></a><var>23.24</var>facility, including any handball or racquetball court, hot tub facility, suntan facility, or <br/>
<a id="pl.23.25"></a><var>23.25</var>racetrack; (2) property of a public utility; (3) property used in the operation of a financial <br/>
<a id="pl.23.26"></a><var>23.26</var>institution; (4) property owned by a fraternal or veterans' organization; or (5) property of a <br/>
<a id="pl.23.27"></a><var>23.27</var>business operating under a franchise agreement that requires the business to be located in <br/>
<a id="pl.23.28"></a><var>23.28</var>the state; except that, in an enterprise zone designated under section 
<statute_ref>469.168, subdivision <br/>
<a id="pl.23.29"></a><var>23.29</var>4, paragraph (c)
</statute_ref>, that is not in a city of the first class, tax reductions may be provided to <br/>
<a id="pl.23.30"></a><var>23.30</var>a retail food or beverage facility or an automobile sales or service facility, or a business <br/>
<a id="pl.23.31"></a><var>23.31</var>operating under a franchise agreement that requires the business to be located in this state <br/>
<a id="pl.23.32"></a><var>23.32</var>except for such a franchised retail food or beverage facility.<br/>
<br/>
<a id="bill.0.27.0"></a><a id="pl.23.33"></a><var>23.33</var>    Sec. 27. Minnesota Statutes 2010, section 469.171, subdivision 6a, is amended to read:<br/>
<a id="pl.24.1"></a><var>24.1</var>    Subd. 6a. <b>Additional border city allocations.</b> In addition to tax reductions <br/>
<a id="pl.24.2"></a><var>24.2</var>authorized in section 
<statute_ref>469.169, subdivisions 7 and 8</statute_ref>, The commissioner may allocate <br/>
<a id="pl.24.3"></a><var>24.3</var>$2,000,000 for tax reductions pursuant to subdivision 9 to border city enterprise zones <br/>
<a id="pl.24.4"></a><var>24.4</var>designated under section 
<statute_ref>469.168, subdivision 4, paragraph (c)</statute_ref>, except for zones located <br/>
<a id="pl.24.5"></a><var>24.5</var>in cities of the first class. This money shall be allocated among the zones on a per <br/>
<a id="pl.24.6"></a><var>24.6</var>capita basis. Limits on the maximum allocation to a zone imposed by section 
<statute_ref>469.169, <br/>
<a id="pl.24.7"></a><var>24.7</var>subdivision 7
</statute_ref>, do not apply to allocations made under this subdivision. Tax reductions <br/>
<a id="pl.24.8"></a><var>24.8</var>authorized by this subdivision may not be allocated to any property which is:<br/>
<a id="pl.24.9"></a><var>24.9</var>(1) a facility the primary purpose of which is one of the following: the provision <br/>
<a id="pl.24.10"></a><var>24.10</var>of recreation or entertainment, or a private or commercial golf course, country club, <br/>
<a id="pl.24.11"></a><var>24.11</var>massage parlor, tennis club, skating facility including roller skating, skateboard, and <br/>
<a id="pl.24.12"></a><var>24.12</var>ice skating, racquet sports facility, including any handball or racquetball court, hot tub <br/>
<a id="pl.24.13"></a><var>24.13</var>facility, suntan facility, or racetrack;<br/>
<a id="pl.24.14"></a><var>24.14</var>(2) property of a public utility;<br/>
<a id="pl.24.15"></a><var>24.15</var>(3) property used in the operation of a financial institution;<br/>
<a id="pl.24.16"></a><var>24.16</var>(4) property owned by a fraternal or veterans' organization;<br/>
<a id="pl.24.17"></a><var>24.17</var>(5) property of a retail food or beverage service business operating under a franchise <br/>
<a id="pl.24.18"></a><var>24.18</var>agreement that requires the business to be located in the state.<br/>
<br/>
<a id="bill.0.28.0"></a><a id="pl.24.19"></a><var>24.19</var>    Sec. 28. Minnesota Statutes 2010, section 469.171, subdivision 7, is amended to read:<br/>
<a id="pl.24.20"></a><var>24.20</var>    Subd. 7. <b>Duration.</b> Each tax reduction provided to a business pursuant to this <br/>
<a id="pl.24.21"></a><var>24.21</var>subdivision shall terminate not longer than five years after the effective date of the tax <br/>
<a id="pl.24.22"></a><var>24.22</var>reduction for the business unless the business is located in a border city enterprise zone <br/>
<a id="pl.24.23"></a><var>24.23</var>designated under section 
<statute_ref>469.168, subdivision 4, paragraph (c)</statute_ref>, that is not a city of the <br/>
<a id="pl.24.24"></a><var>24.24</var>first class. Each tax reduction provided to a business that is located in a border city <br/>
<a id="pl.24.25"></a><var>24.25</var>enterprise zone designated under section 
<statute_ref>469.168, subdivision 4, paragraph (c)</statute_ref>, that is not <br/>
<a id="pl.24.26"></a><var>24.26</var>located in a city of the first class, may be provided until the allocations provided under <br/>
<a id="pl.24.27"></a><var>24.27</var>subdivision 6a, and under section 
         <statute_ref>469.169, subdivisions 7 and 8</statute_ref>, have been expended. <br/>
<a id="pl.24.28"></a><var>24.28</var>Subject to the limitation in this subdivision, the tax reductions may be provided after <br/>
<a id="pl.24.29"></a><var>24.29</var>expiration of the zone's designation.<br/>
<br/>
<a id="bill.0.29.0"></a><a id="pl.24.30"></a><var>24.30</var>    Sec. 29. Minnesota Statutes 2010, section 469.171, subdivision 9, is amended to read:<br/>
<a id="pl.24.31"></a><var>24.31</var>    Subd. 9. <b>Recapture.</b> Any business that (1) receives tax reductions authorized by <br/>
<a id="pl.24.32"></a><var>24.32</var>subdivisions 1 to 8, classification as employment property pursuant to section 
<statute_ref>469.170</statute_ref>, or <br/>
<a id="pl.24.33"></a><var>24.33</var>an alternative local contribution under section 
<statute_ref>469.169, subdivision 5</statute_ref>; and (2) ceases to <br/>
<a id="pl.24.34"></a><var>24.34</var>operate its facility located within the border city enterprise zone shall repay the amount of <br/>
<a id="pl.25.1"></a><var>25.1</var>the tax reduction or local contribution received during the two years immediately before <br/>
<a id="pl.25.2"></a><var>25.2</var>it ceased to operate in the zone.<br/>
<a id="pl.25.3"></a><var>25.3</var>The repayment must be paid to the state to the extent it represents a tax reduction <br/>
<a id="pl.25.4"></a><var>25.4</var>under subdivisions 1 to 8 and to the municipality to the extent it represents a property tax <br/>
<a id="pl.25.5"></a><var>25.5</var>reduction or other local contribution. Any amount repaid to the state must be credited <br/>
<a id="pl.25.6"></a><var>25.6</var>to the amount certified as available for tax reductions in the zone pursuant to section <br/>
<a id="pl.25.7"></a><var>25.7</var><statute_ref>469.169, subdivision 7</statute_ref> the city's allocation. Any amount repaid to the municipality must <br/>
<a id="pl.25.8"></a><var>25.8</var>be used by the municipality for economic development purposes. The commissioner of <br/>
<a id="pl.25.9"></a><var>25.9</var>revenue may seek repayment of tax credits from a business ceasing to operate within an <br/>
<a id="pl.25.10"></a><var>25.10</var>enterprise zone by utilizing any remedies available for the collection of tax.<br/>
<br/>
<a id="bill.0.30.0"></a><a id="pl.25.11"></a><var>25.11</var>    Sec. 30. Minnesota Statutes 2010, section 469.171, subdivision 11, is amended to read:<br/>
<a id="pl.25.12"></a><var>25.12</var>    Subd. 11. <b>Limitations; last eight months of duration.</b> This subdivision applies <br/>
<a id="pl.25.13"></a><var>25.13</var>only to state tax reductions first authorized by the municipality to be provided to a business <br/>
<a id="pl.25.14"></a><var>25.14</var>within eight months of the expiration of the border city enterprise zone's designation.<br/>
<a id="pl.25.15"></a><var>25.15</var>Before agreeing with a business to provide tax reductions, the municipality must <br/>
<a id="pl.25.16"></a><var>25.16</var>submit the proposed tax reductions to the commissioner for approval. The commissioner <br/>
<a id="pl.25.17"></a><var>25.17</var>shall review and analyze the proposal in light of, at least: (1) the proposed investment that <br/>
<a id="pl.25.18"></a><var>25.18</var>the business will make in the zone, (2) the number and quality of new jobs that will be <br/>
<a id="pl.25.19"></a><var>25.19</var>created in the zone, (3) the overall positive impact on economic activity in the zone, and <br/>
<a id="pl.25.20"></a><var>25.20</var>(4) the extent to which the impacts in clauses (1) to (3) are dependent upon providing the <br/>
<a id="pl.25.21"></a><var>25.21</var>state tax reductions to the business. The commissioner shall disapprove the proposal if the <br/>
<a id="pl.25.22"></a><var>25.22</var>commissioner determines the public benefits of increased investment and employment <br/>
<a id="pl.25.23"></a><var>25.23</var>resulting from the tax reductions is disproportionately small relative to the cost of the <br/>
<a id="pl.25.24"></a><var>25.24</var>state tax reductions. If the commissioner disapproves of the proposal, the tax reductions <br/>
<a id="pl.25.25"></a><var>25.25</var>are not allowed to the business.<br/>
<a id="pl.25.26"></a><var>25.26</var>If the municipality submits the proposal to the commissioner before expiration <br/>
<a id="pl.25.27"></a><var>25.27</var>of the zone designation, the authority to grant the tax reductions continues until the <br/>
<a id="pl.25.28"></a><var>25.28</var>commissioner acts on the proposal.<br/>
<br/>
<a id="bill.0.31.0"></a><a id="pl.25.29"></a><var>25.29</var>    Sec. 31. Minnesota Statutes 2010, section 469.172, is amended to read:<br/>
<a id="pl.25.30"></a><var>25.30</var><b>469.172 DEVELOPMENT AND REDEVELOPMENT POWERS.</b><br/>
<a id="pl.25.31"></a><var>25.31</var>Notwithstanding any contrary provision of law or charter, any city of the first or <br/>
<a id="pl.25.32"></a><var>25.32</var>second class that contains an a border city enterprise zone or that has been designated as <br/>
<a id="pl.25.33"></a><var>25.33</var>an enterprise zone may, in addition to its other powers, exercise the powers granted to <br/>
<a id="pl.25.34"></a><var>25.34</var>a governmental subdivision by sections 
         <statute_ref>469.001</statute_ref> to 
         <statute_ref>469.047</statute_ref>, 
         <statute_ref>469.048</statute_ref> to 
         <statute_ref>469.068</statute_ref>, and <br/>
<statute_ref><a id="pl.26.1"></a><var>26.1</var>469.109
         </statute_ref> to 
         <statute_ref>469.113</statute_ref>. Section 
         <statute_ref>469.059, subdivision 15</statute_ref>, shall apply applies to the city in <br/>
<a id="pl.26.2"></a><var>26.2</var>the exercise of the powers granted pursuant to this section. It may exercise the powers <br/>
<a id="pl.26.3"></a><var>26.3</var>assigned to redevelopment agencies pursuant to sections 
         <statute_ref>469.152</statute_ref> to 
         <statute_ref>469.165</statute_ref>, without <br/>
<a id="pl.26.4"></a><var>26.4</var>limitation to further the purposes of sections 
         <statute_ref>469.001</statute_ref> to 
         <statute_ref>469.047</statute_ref>, 
         <statute_ref>469.048</statute_ref> to 
         <statute_ref>469.068</statute_ref>, and <br/>
<statute_ref><a id="pl.26.5"></a><var>26.5</var>469.109
         </statute_ref> to 
         <statute_ref>469.134</statute_ref>. It may exercise the powers set forth in sections 
         <statute_ref>469.001</statute_ref> to 
         <statute_ref>469.047</statute_ref>, <br/>
<statute_ref><a id="pl.26.6"></a><var>26.6</var>469.048
         </statute_ref> to 
         <statute_ref>469.068</statute_ref>, and 
         <statute_ref>469.109</statute_ref> to 
         <statute_ref>469.164</statute_ref> without limitation to further the purposes <br/>
<a id="pl.26.7"></a><var>26.7</var>and policies set forth in sections 
         <statute_ref>469.152</statute_ref> to 
         <statute_ref>469.165</statute_ref>. It may exercise the powers granted <br/>
<a id="pl.26.8"></a><var>26.8</var>by this subdivision and any other development or redevelopment powers authorized by <br/>
<a id="pl.26.9"></a><var>26.9</var>other laws, including sections 
         <statute_ref>469.124</statute_ref> to 
         <statute_ref>469.134</statute_ref> and 
         <statute_ref>469.152</statute_ref> to 
         <statute_ref>469.165</statute_ref>, independently <br/>
<a id="pl.26.10"></a><var>26.10</var>or in conjunction with each other as though all the powers had been granted to a single <br/>
<a id="pl.26.11"></a><var>26.11</var>entity. Any project undertaken to accomplish the purposes of sections 
         <statute_ref>469.001</statute_ref> to 
         <statute_ref>469.047</statute_ref> <br/>
<a id="pl.26.12"></a><var>26.12</var>that qualifies as single-family housing under section 
         <statute_ref>462C.02, subdivision 4</statute_ref>, shall be is <br/>
<a id="pl.26.13"></a><var>26.13</var>subject to the provisions of chapter 462C.<br/>
<a id="pl.26.14"></a><var>26.14</var>Upon expiration of the designation of the enterprise zone, the powers granted by <br/>
<a id="pl.26.15"></a><var>26.15</var>this subdivision may be exercised only with respect to any project, program, or activity <br/>
<a id="pl.26.16"></a><var>26.16</var>commenced or established prior to that date. The powers granted by this subdivision may <br/>
<a id="pl.26.17"></a><var>26.17</var>only be exercised within the zone.<br/>
<br/>
<a id="bill.0.32.0"></a><a id="pl.26.18"></a><var>26.18</var>    Sec. 32. Minnesota Statutes 2010, section 469.173, subdivision 5, is amended to read:<br/>
<a id="pl.26.19"></a><var>26.19</var>    Subd. 5. <b>Information sharing.</b> Pursuant to section 
         <statute_ref>270B.14, subdivision 3</statute_ref>, <br/>
<a id="pl.26.20"></a><var>26.20</var>the commissioner of revenue may share information with the commissioner or with a <br/>
<a id="pl.26.21"></a><var>26.21</var>municipality receiving an enterprise zone designation, insofar as necessary to administer <br/>
<a id="pl.26.22"></a><var>26.22</var>the funding limitations provided by section 
         <statute_ref>469.169, subdivision 7</statute_ref>.<br/>
<br/>
<a id="bill.0.33.0"></a><a id="pl.26.23"></a><var>26.23</var>    Sec. 33. Minnesota Statutes 2010, section 469.173, subdivision 6, is amended to read:<br/>
<a id="pl.26.24"></a><var>26.24</var>    Subd. 6. <b>Zone boundary realignment.</b> The commissioner may approve specific <br/>
<a id="pl.26.25"></a><var>26.25</var>applications by a municipality to amend the boundaries of a border city enterprise zone <br/>
<a id="pl.26.26"></a><var>26.26</var>or of an area or areas designated pursuant to section 
<statute_ref>469.171, subdivision 5</statute_ref>, at any time. <br/>
<a id="pl.26.27"></a><var>26.27</var>Boundaries of a zone may not be amended to create noncontiguous subdivisions. If the <br/>
<a id="pl.26.28"></a><var>26.28</var>commissioner approves the amended boundaries, the change is effective on the date of <br/>
<a id="pl.26.29"></a><var>26.29</var>approval. Notwithstanding the area limitation under section 
<statute_ref>469.168, subdivision 3</statute_ref>, the <br/>
<a id="pl.26.30"></a><var>26.30</var>commissioner may approve a specific application to amend the boundaries of an enterprise <br/>
<a id="pl.26.31"></a><var>26.31</var>zone which is located within five municipalities and was designated in 1984, to increase <br/>
<a id="pl.26.32"></a><var>26.32</var>its area to not more than 800 acres, and may approve an additional specific application to <br/>
<a id="pl.26.33"></a><var>26.33</var>amend the boundaries of that enterprise zone to include a sixth municipality or to further <br/>
<a id="pl.27.1"></a><var>27.1</var>increase its area to include all or part of the territory of a town that surrounds one of <br/>
<a id="pl.27.2"></a><var>27.2</var>the five municipalities, or both.<br/>
<a id="pl.27.3"></a><var>27.3</var>Notwithstanding the area limitation under section 
<statute_ref>469.168, subdivision 3</statute_ref>, the <br/>
<a id="pl.27.4"></a><var>27.4</var>commissioner may approve a specific application to amend the boundaries of an enterprise <br/>
<a id="pl.27.5"></a><var>27.5</var>zone that is located within four municipalities to include a fifth municipality. The addition <br/>
<a id="pl.27.6"></a><var>27.6</var>of the fifth municipality may only be approved after the existing municipalities, by <br/>
<a id="pl.27.7"></a><var>27.7</var>adoption of a resolution by each municipality's governing board, agree to the addition <br/>
<a id="pl.27.8"></a><var>27.8</var>of the fifth municipality.<br/>
<br/>
<a id="bill.0.34.0"></a><a id="pl.27.9"></a><var>27.9</var>    Sec. 34. Minnesota Statutes 2010, section 469.174, subdivision 20, is amended to read:<br/>
<a id="pl.27.10"></a><var>27.10</var>    Subd. 20. <b>Internal Revenue Code.</b> "Internal Revenue Code" means the Internal <br/>
<a id="pl.27.11"></a><var>27.11</var>Revenue Code of 1986, as amended through December 31, 1993.<br/>
<br/>
<a id="bill.0.35.0"></a><a id="pl.27.12"></a><var>27.12</var>    Sec. 35. Minnesota Statutes 2010, section 469.174, subdivision 25, is amended to read:<br/>
<a id="pl.27.13"></a><var>27.13</var>    Subd. 25. <b>Increment.</b> "Increment," "tax increment," "tax increment revenues," <br/>
<a id="pl.27.14"></a><var>27.14</var>"revenues derived from tax increment," and other similar terms for a district include:<br/>
<a id="pl.27.15"></a><var>27.15</var>(1) taxes paid by the captured net tax capacity, but excluding any excess taxes, as <br/>
<a id="pl.27.16"></a><var>27.16</var>computed under section 
         <statute_ref>469.177</statute_ref>;<br/>
<a id="pl.27.17"></a><var>27.17</var>(2) the proceeds from the sale or lease of property, tangible or intangible, to the <br/>
<a id="pl.27.18"></a><var>27.18</var>extent the property was purchased by the authority with tax increments;<br/>
<a id="pl.27.19"></a><var>27.19</var>(3) principal and interest received on loans or other advances made by the authority <br/>
<a id="pl.27.20"></a><var>27.20</var>with tax increments;<br/>
<a id="pl.27.21"></a><var>27.21</var>(4) interest or other investment earnings on or from tax increments; and<br/>
<a id="pl.27.22"></a><var>27.22</var>(5) repayments or return of tax increments made to the authority under agreements <br/>
<a id="pl.27.23"></a><var>27.23</var>for districts for which the request for certification was made after August 1, 1993; and<br/>
<a id="pl.27.24"></a><var>27.24</var>(6) the market value homestead credit paid to the authority under section 
<statute_ref>273.1384</statute_ref>.<br/>
<br/>
<a id="bill.0.36.0"></a><a id="pl.27.25"></a><var>27.25</var>    Sec. 36. Minnesota Statutes 2010, section 469.176, subdivision 7, is amended to read:<br/>
<a id="pl.27.26"></a><var>27.26</var>    Subd. 7. <b>Parcels not includable in districts.</b> (a) The authority may request <br/>
<a id="pl.27.27"></a><var>27.27</var>inclusion in a tax increment financing district and the county auditor may certify the <br/>
<a id="pl.27.28"></a><var>27.28</var>original tax capacity of a parcel or a part of a parcel that qualified under the provisions of <br/>
<a id="pl.27.29"></a><var>27.29</var>section 
         <statute_ref>273.111</statute_ref> or,
<statute_ref>273.112, 273.114,</statute_ref> or chapter 473H for taxes payable in any of the five <br/>
<a id="pl.27.30"></a><var>27.30</var>calendar years before the filing of the request for certification only for:<br/>
<a id="pl.27.31"></a><var>27.31</var>    (1) a district in which 85 percent or more of the planned buildings and facilities <br/>
<a id="pl.27.32"></a><var>27.32</var>(determined on the basis of square footage) are a qualified manufacturing facility or a <br/>
<a id="pl.27.33"></a><var>27.33</var>qualified distribution facility or a combination of both; or<br/>
<a id="pl.28.1"></a><var>28.1</var>    (2) a housing district.<br/>
<a id="pl.28.2"></a><var>28.2</var>    (b)(1) A distribution facility means buildings and other improvements to real <br/>
<a id="pl.28.3"></a><var>28.3</var>property that are used to conduct activities in at least each of the following categories:<br/>
<a id="pl.28.4"></a><var>28.4</var>    (i) to store or warehouse tangible personal property;<br/>
<a id="pl.28.5"></a><var>28.5</var>    (ii) to take orders for shipment, mailing, or delivery;<br/>
<a id="pl.28.6"></a><var>28.6</var>    (iii) to prepare personal property for shipment, mailing, or delivery; and<br/>
<a id="pl.28.7"></a><var>28.7</var>    (iv) to ship, mail, or deliver property.<br/>
<a id="pl.28.8"></a><var>28.8</var>    (2) A manufacturing facility includes space used for manufacturing or producing <br/>
<a id="pl.28.9"></a><var>28.9</var>tangible personal property, including processing resulting in the change in condition of the <br/>
<a id="pl.28.10"></a><var>28.10</var>property, and space necessary for and related to the manufacturing activities.<br/>
<a id="pl.28.11"></a><var>28.11</var>    (3) To be a qualified facility, the owner or operator of a manufacturing or distribution <br/>
<a id="pl.28.12"></a><var>28.12</var>facility must agree to pay and pay 90 percent or more of the employees of the facility at <br/>
<a id="pl.28.13"></a><var>28.13</var>a rate equal to or greater than 160 percent of the federal minimum wage for individuals <br/>
<a id="pl.28.14"></a><var>28.14</var>over the age of 20.<br/>
<br/>
<a id="bill.0.37.0"></a><a id="pl.28.15"></a><var>28.15</var>    Sec. 37. Minnesota Statutes 2010, section 469.1763, subdivision 6, is amended to read:<br/>
<a id="pl.28.16"></a><var>28.16</var>    Subd. 6. <b>Pooling permitted for deficits.</b> (a) This subdivision applies only to <br/>
<a id="pl.28.17"></a><var>28.17</var>districts for which the request for certification was made before August 1, 2001, and <br/>
<a id="pl.28.18"></a><var>28.18</var>without regard to whether the request for certification was made prior to August 1, 1979.<br/>
<a id="pl.28.19"></a><var>28.19</var>(b) The municipality for the district may transfer available increments from another <br/>
<a id="pl.28.20"></a><var>28.20</var>tax increment financing district located in the municipality, if the transfer is necessary to <br/>
<a id="pl.28.21"></a><var>28.21</var>eliminate a deficit in the district to which the increments are transferred. The municipality <br/>
<a id="pl.28.22"></a><var>28.22</var>may transfer increments as provided by this subdivision without regard to whether the <br/>
<a id="pl.28.23"></a><var>28.23</var>transfer or expenditure is authorized by the tax increment financing plan for the district <br/>
<a id="pl.28.24"></a><var>28.24</var>from which the transfer is made. A deficit in the district for purposes of this subdivision <br/>
<a id="pl.28.25"></a><var>28.25</var>means the lesser of the following two amounts:<br/>
<a id="pl.28.26"></a><var>28.26</var>(1)(i) the amount due during the calendar year to pay preexisting obligations of <br/>
<a id="pl.28.27"></a><var>28.27</var>the district; minus<br/>
<a id="pl.28.28"></a><var>28.28</var>(ii) the total increments collected or to be collected from properties located within <br/>
<a id="pl.28.29"></a><var>28.29</var>the district that are available for the calendar year including amounts collected in prior <br/>
<a id="pl.28.30"></a><var>28.30</var>years that are currently available; plus<br/>
<a id="pl.28.31"></a><var>28.31</var>(iii) total increments from properties located in other districts in the municipality <br/>
<a id="pl.28.32"></a><var>28.32</var>including amounts collected in prior years that are available to be used to meet the district's <br/>
<a id="pl.28.33"></a><var>28.33</var>obligations under this section, excluding this subdivision, or other provisions of law (but <br/>
<a id="pl.28.34"></a><var>28.34</var>excluding a special tax under section 
<statute_ref>469.1791</statute_ref> and the grant program under Laws 1997, <br/>
<a id="pl.28.35"></a><var>28.35</var>chapter 231, article 1, section 19, or Laws 2001, First Special Session chapter 5); or<br/>
<a id="pl.29.1"></a><var>29.1</var>(2) the reduction in increments collected from properties located in the district for <br/>
<a id="pl.29.2"></a><var>29.2</var>the calendar year as a result of the changes in class rates in Laws 1997, chapter 231, article <br/>
<a id="pl.29.3"></a><var>29.3</var>1; Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, and Laws 2001, First <br/>
<a id="pl.29.4"></a><var>29.4</var>Special Session chapter 5, or the elimination of the general education tax levy under <br/>
<a id="pl.29.5"></a><var>29.5</var>Laws 2001, First Special Session chapter 5.<br/>
<a id="pl.29.6"></a><var>29.6</var>The authority may compute the deficit amount under clause (1) only (without regard <br/>
<a id="pl.29.7"></a><var>29.7</var>to the limit under clause (2)) if the authority makes an irrevocable commitment, by <br/>
<a id="pl.29.8"></a><var>29.8</var>resolution, to use increments from the district to which increments are to be transferred and <br/>
<a id="pl.29.9"></a><var>29.9</var>any transferred increments are only used to pay preexisting obligations and administrative <br/>
<a id="pl.29.10"></a><var>29.10</var>expenses for the district that are required to be paid under section 
         <statute_ref>469.176, subdivision <br/>
<a id="pl.29.11"></a><var>29.11</var>4h
         </statute_ref>, paragraph (a).<br/>
<a id="pl.29.12"></a><var>29.12</var>(c) A preexisting obligation means:<br/>
<a id="pl.29.13"></a><var>29.13</var>(1) bonds issued and sold before August 1, 2001, or bonds issued pursuant to a <br/>
<a id="pl.29.14"></a><var>29.14</var>binding contract requiring the issuance of bonds entered into before July 1, 2001, and <br/>
<a id="pl.29.15"></a><var>29.15</var>bonds issued to refund such bonds or to reimburse expenditures made in conjunction with <br/>
<a id="pl.29.16"></a><var>29.16</var>a signed contractual agreement entered into before August 1, 2001, to the extent that the <br/>
<a id="pl.29.17"></a><var>29.17</var>bonds are secured by a pledge of increments from the tax increment financing district; and<br/>
<a id="pl.29.18"></a><var>29.18</var>(2) binding contracts entered into before August 1, 2001, to the extent that the <br/>
<a id="pl.29.19"></a><var>29.19</var>contracts require payments secured by a pledge of increments from the tax increment <br/>
<a id="pl.29.20"></a><var>29.20</var>financing district.<br/>
<a id="pl.29.21"></a><var>29.21</var>(d) The municipality may require a development authority, other than a seaway port <br/>
<a id="pl.29.22"></a><var>29.22</var>authority, to transfer available increments including amounts collected in prior years that <br/>
<a id="pl.29.23"></a><var>29.23</var>are currently available for any of its tax increment financing districts in the municipality to <br/>
<a id="pl.29.24"></a><var>29.24</var>make up an insufficiency in another district in the municipality, regardless of whether the <br/>
<a id="pl.29.25"></a><var>29.25</var>district was established by the development authority or another development authority. <br/>
<a id="pl.29.26"></a><var>29.26</var>This authority applies notwithstanding any law to the contrary, but applies only to a <br/>
<a id="pl.29.27"></a><var>29.27</var>development authority that:<br/>
<a id="pl.29.28"></a><var>29.28</var>(1) was established by the municipality; or<br/>
<a id="pl.29.29"></a><var>29.29</var>(2) the governing body of which is appointed, in whole or part, by the municipality <br/>
<a id="pl.29.30"></a><var>29.30</var>or an officer of the municipality or which consists, in whole or part, of members of <br/>
<a id="pl.29.31"></a><var>29.31</var>the governing body of the municipality. The municipality may use this authority only <br/>
<a id="pl.29.32"></a><var>29.32</var>after it has first used all available increments of the receiving development authority to <br/>
<a id="pl.29.33"></a><var>29.33</var>eliminate the insufficiency and exercised any permitted action under section 
         <statute_ref>469.1792, <br/>
<a id="pl.29.34"></a><var>29.34</var>subdivision 3
         </statute_ref>, for preexisting districts of the receiving development authority to eliminate <br/>
<a id="pl.29.35"></a><var>29.35</var>the insufficiency.<br/>
<a id="pl.30.1"></a><var>30.1</var>(e) The authority under this subdivision to spend tax increments outside of the area <br/>
<a id="pl.30.2"></a><var>30.2</var>of the district from which the tax increments were collected:<br/>
<a id="pl.30.3"></a><var>30.3</var>(1) is an exception to the restrictions under section 
         <statute_ref>469.176, subdivisions 4b, 4c, <br/>
<a id="pl.30.4"></a><var>30.4</var>4d, 4e, 4i, and 4j
         </statute_ref>; the expenditure limits under section 
         <statute_ref>469.176, subdivision 1c</statute_ref>; and the <br/>
<a id="pl.30.5"></a><var>30.5</var>other provisions of this section; and the percentage restrictions under subdivision 2 must <br/>
<a id="pl.30.6"></a><var>30.6</var>be calculated after deducting increments spent under this subdivision from the total <br/>
<a id="pl.30.7"></a><var>30.7</var>increments for the district; and<br/>
<a id="pl.30.8"></a><var>30.8</var>(2) applies notwithstanding the provisions of the Tax Increment Financing Act in <br/>
<a id="pl.30.9"></a><var>30.9</var>effect for districts for which the request for certification was made before June 30, 1982, <br/>
<a id="pl.30.10"></a><var>30.10</var>or any other law to the contrary.<br/>
<a id="pl.30.11"></a><var>30.11</var>(f) If a preexisting obligation requires the development authority to pay an amount <br/>
<a id="pl.30.12"></a><var>30.12</var>that is limited to the increment from the district or a specific development within the <br/>
<a id="pl.30.13"></a><var>30.13</var>district and if the obligation requires paying a higher amount to the extent that increments <br/>
<a id="pl.30.14"></a><var>30.14</var>are available, the municipality may determine that the amount due under the preexisting <br/>
<a id="pl.30.15"></a><var>30.15</var>obligation equals the higher amount and may authorize the transfer of increments <br/>
<a id="pl.30.16"></a><var>30.16</var>under this subdivision to pay up to the higher amount. The existence of a guarantee of <br/>
<a id="pl.30.17"></a><var>30.17</var>obligations by the individual or entity that would receive the payment under this paragraph <br/>
<a id="pl.30.18"></a><var>30.18</var>is disregarded in the determination of eligibility to pool under this subdivision. The <br/>
<a id="pl.30.19"></a><var>30.19</var>authority to transfer increments under this paragraph may only be used to the extent <br/>
<a id="pl.30.20"></a><var>30.20</var>that the payment of all other preexisting obligations in the municipality due during the <br/>
<a id="pl.30.21"></a><var>30.21</var>calendar year have been satisfied.<br/>
<a id="pl.30.22"></a><var>30.22</var>(g) For transfers of increments made in calendar year 2005 and later, the reduction in <br/>
<a id="pl.30.23"></a><var>30.23</var>increments as a result of the elimination of the general education tax levy for purposes of <br/>
<a id="pl.30.24"></a><var>30.24</var>paragraph (b), clause (2), for a taxes payable year equals the general education tax rate <br/>
<a id="pl.30.25"></a><var>30.25</var>for the school district under Minnesota Statutes 2000, section 
         <statute_ref>273.1382, subdivision 1</statute_ref>, <br/>
<a id="pl.30.26"></a><var>30.26</var>for taxes payable in 2001, multiplied by the captured tax capacity of the district for the <br/>
<a id="pl.30.27"></a><var>30.27</var>current taxes payable year.<br/>
<br/>
<a id="bill.0.38.0"></a><a id="pl.30.28"></a><var>30.28</var>    Sec. 38. Minnesota Statutes 2010, section 469.1764, subdivision 1, is amended to read:<br/>
<a id="pl.30.29"></a><var>30.29</var>    Subdivision 1. <b>Scope; application.</b> (a) This section applies to a tax increment <br/>
<a id="pl.30.30"></a><var>30.30</var>financing district or area added to a district, if the request for certification of the district or <br/>
<a id="pl.30.31"></a><var>30.31</var>the area added to the district was made after July 31, 1979, and before July 1, 1982.<br/>
<a id="pl.30.32"></a><var>30.32</var>(b) This section, section 
         <statute_ref>469.1763, subdivision 6</statute_ref>, and any special law applying to <br/>
<a id="pl.30.33"></a><var>30.33</var>the district are the exclusive authority to spend tax increments on activities located outside <br/>
<a id="pl.30.34"></a><var>30.34</var>of the geographic area of a tax increment financing district that is subject to this section.<br/>
<a id="pl.31.1"></a><var>31.1</var>(c) This section does not apply to increments from a district that is subject to the <br/>
<a id="pl.31.2"></a><var>31.2</var>provisions of this section, if:<br/>
<a id="pl.31.3"></a><var>31.3</var>(1) the district was decertified before the enactment of this section and all increments <br/>
<a id="pl.31.4"></a><var>31.4</var>spent on activities located outside of the geographic area of the district were repaid and <br/>
<a id="pl.31.5"></a><var>31.5</var>distributed as excess increments under section 
         <statute_ref>469.176, subdivision 2</statute_ref>; or<br/>
<a id="pl.31.6"></a><var>31.6</var>(2) the use of increments on activities located outside of the geographic area of <br/>
<a id="pl.31.7"></a><var>31.7</var>the district consists solely of payment of debt service on bonds under section 
         <statute_ref>469.129, <br/>
<a id="pl.31.8"></a><var>31.8</var>subdivision 2
         </statute_ref>, before its repeal, and any bonds issued to refund bonds issued under that <br/>
<a id="pl.31.9"></a><var>31.9</var>subdivision.<br/>
<br/>
<a id="bill.0.39.0"></a><a id="pl.31.10"></a><var>31.10</var>    Sec. 39. Minnesota Statutes 2010, section 469.177, subdivision 1, is amended to read:<br/>
<a id="pl.31.11"></a><var>31.11</var>    Subdivision 1. <b>Original net tax capacity.</b> (a) Upon or after adoption of a tax <br/>
<a id="pl.31.12"></a><var>31.12</var>increment financing plan, the auditor of any county in which the district is situated shall, <br/>
<a id="pl.31.13"></a><var>31.13</var>upon request of the authority, certify the original net tax capacity of the tax increment <br/>
<a id="pl.31.14"></a><var>31.14</var>financing district and that portion of the district overlying any subdistrict as described in <br/>
<a id="pl.31.15"></a><var>31.15</var>the tax increment financing plan and shall certify in each year thereafter the amount by <br/>
<a id="pl.31.16"></a><var>31.16</var>which the original net tax capacity has increased or decreased as a result of a change in tax <br/>
<a id="pl.31.17"></a><var>31.17</var>exempt status of property within the district and any subdistrict, reduction or enlargement <br/>
<a id="pl.31.18"></a><var>31.18</var>of the district or changes pursuant to subdivision 4. The auditor shall certify the amount <br/>
<a id="pl.31.19"></a><var>31.19</var>within 30 days after receipt of the request and sufficient information to identify the parcels <br/>
<a id="pl.31.20"></a><var>31.20</var>included in the district. The certification relates to the taxes payable year as provided in <br/>
<a id="pl.31.21"></a><var>31.21</var>subdivision 6.<br/>
<a id="pl.31.22"></a><var>31.22</var>    (b) If the classification under section 
         <statute_ref>273.13</statute_ref> of property located in a district changes <br/>
<a id="pl.31.23"></a><var>31.23</var>to a classification that has a different assessment ratio, the original net tax capacity of that <br/>
<a id="pl.31.24"></a><var>31.24</var>property must be redetermined at the time when its use is changed as if the property had <br/>
<a id="pl.31.25"></a><var>31.25</var>originally been classified in the same class in which it is classified after its use is changed.<br/>
<a id="pl.31.26"></a><var>31.26</var>    (c) The amount to be added to the original net tax capacity of the district as a result <br/>
<a id="pl.31.27"></a><var>31.27</var>of previously tax exempt real property within the district becoming taxable equals the net <br/>
<a id="pl.31.28"></a><var>31.28</var>tax capacity of the real property as most recently assessed pursuant to section 
         <statute_ref>273.18</statute_ref> or, if <br/>
<a id="pl.31.29"></a><var>31.29</var>that assessment was made more than one year prior to the date of title transfer rendering <br/>
<a id="pl.31.30"></a><var>31.30</var>the property taxable, the net tax capacity assessed by the assessor at the time of the <br/>
<a id="pl.31.31"></a><var>31.31</var>transfer. If improvements are made to tax exempt property after the municipality approves <br/>
<a id="pl.31.32"></a><var>31.32</var>the district and before the parcel becomes taxable, the assessor shall, at the request of <br/>
<a id="pl.31.33"></a><var>31.33</var>the authority, separately assess the estimated market value of the improvements. If the <br/>
<a id="pl.31.34"></a><var>31.34</var>property becomes taxable, the county auditor shall add to original net tax capacity, the net <br/>
<a id="pl.31.35"></a><var>31.35</var>tax capacity of the parcel, excluding the separately assessed improvements. If substantial <br/>
<a id="pl.32.1"></a><var>32.1</var>taxable improvements were made to a parcel after certification of the district and if the <br/>
<a id="pl.32.2"></a><var>32.2</var>property later becomes tax exempt, in whole or part, as a result of the authority acquiring <br/>
<a id="pl.32.3"></a><var>32.3</var>the property through foreclosure or exercise of remedies under a lease or other revenue <br/>
<a id="pl.32.4"></a><var>32.4</var>agreement or as a result of tax forfeiture, the amount to be added to the original net tax <br/>
<a id="pl.32.5"></a><var>32.5</var>capacity of the district as a result of the property again becoming taxable is the amount <br/>
<a id="pl.32.6"></a><var>32.6</var>of the parcel's value that was included in original net tax capacity when the parcel was <br/>
<a id="pl.32.7"></a><var>32.7</var>first certified. The amount to be added to the original net tax capacity of the district as a <br/>
<a id="pl.32.8"></a><var>32.8</var>result of enlargements equals the net tax capacity of the added real property as most <br/>
<a id="pl.32.9"></a><var>32.9</var>recently certified by the commissioner of revenue as of the date of modification of the tax <br/>
<a id="pl.32.10"></a><var>32.10</var>increment financing plan pursuant to section 
         <statute_ref>469.175, subdivision 4</statute_ref>.<br/>
<a id="pl.32.11"></a><var>32.11</var>    (d) If the net tax capacity of a property increases because the property no longer <br/>
<a id="pl.32.12"></a><var>32.12</var>qualifies under the Minnesota Agricultural Property Tax Law, section 
         <statute_ref>273.111</statute_ref>; the <br/>
<a id="pl.32.13"></a><var>32.13</var>Minnesota Open Space Property Tax Law, section 
         <statute_ref>273.112</statute_ref>; or the Metropolitan <br/>
<a id="pl.32.14"></a><var>32.14</var>Agricultural Preserves Act, chapter 473H, the Rural Preserve Property Tax Program under <br/>
<a id="pl.32.15"></a><var>32.15</var>section 273.114, or because platted, unimproved property is improved or market value <br/>
<a id="pl.32.16"></a><var>32.16</var>is increased after approval of the plat under section 
         <statute_ref>273.11, subdivision 14</statute_ref>, 14a, or 14b, <br/>
<a id="pl.32.17"></a><var>32.17</var>the increase in net tax capacity must be added to the original net tax capacity. If the <br/>
<a id="pl.32.18"></a><var>32.18</var>net tax capacity of a property increases because the property no longer qualifies for the <br/>
<a id="pl.32.19"></a><var>32.19</var>homestead market value exclusion under section 273.13, subdivision 35, the increase in <br/>
<a id="pl.32.20"></a><var>32.20</var>net tax capacity must be added to original net tax capacity if the original construction of <br/>
<a id="pl.32.21"></a><var>32.21</var>the affected home was completed before the date the assessor certified the original net <br/>
<a id="pl.32.22"></a><var>32.22</var>tax capacity of the district.<br/>
<a id="pl.32.23"></a><var>32.23</var>    (e) The amount to be subtracted from the original net tax capacity of the district as a <br/>
<a id="pl.32.24"></a><var>32.24</var>result of previously taxable real property within the district becoming tax exempt or <br/>
<a id="pl.32.25"></a><var>32.25</var>qualifying in whole or part for an exclusion from taxable market value, or a reduction in <br/>
<a id="pl.32.26"></a><var>32.26</var>the geographic area of the district, shall be the amount of original net tax capacity initially <br/>
<a id="pl.32.27"></a><var>32.27</var>attributed to the property becoming tax exempt, being excluded from taxable market <br/>
<a id="pl.32.28"></a><var>32.28</var>value, or being removed from the district. If the net tax capacity of property located within <br/>
<a id="pl.32.29"></a><var>32.29</var>the tax increment financing district is reduced by reason of a court-ordered abatement, <br/>
<a id="pl.32.30"></a><var>32.30</var>stipulation agreement, voluntary abatement made by the assessor or auditor or by order <br/>
<a id="pl.32.31"></a><var>32.31</var>of the commissioner of revenue, the reduction shall be applied to the original net tax <br/>
<a id="pl.32.32"></a><var>32.32</var>capacity of the district when the property upon which the abatement is made has not been <br/>
<a id="pl.32.33"></a><var>32.33</var>improved since the date of certification of the district and to the captured net tax capacity <br/>
<a id="pl.32.34"></a><var>32.34</var>of the district in each year thereafter when the abatement relates to improvements made <br/>
<a id="pl.32.35"></a><var>32.35</var>after the date of certification. The county auditor may specify reasonable form and content <br/>
<a id="pl.33.1"></a><var>33.1</var>of the request for certification of the authority and any modification thereof pursuant to <br/>
<a id="pl.33.2"></a><var>33.2</var>section 
         <statute_ref>469.175, subdivision 4</statute_ref>.<br/>
<a id="pl.33.3"></a><var>33.3</var>    (f) If a parcel of property contained a substandard building or improvements <br/>
<a id="pl.33.4"></a><var>33.4</var>described in section 
         <statute_ref>469.174, subdivision 10</statute_ref>, paragraph (e), that were demolished or <br/>
<a id="pl.33.5"></a><var>33.5</var>removed and if the authority elects to treat the parcel as occupied by a substandard <br/>
<a id="pl.33.6"></a><var>33.6</var>building under section 
         <statute_ref>469.174, subdivision 10</statute_ref>, paragraph (b), or by improvements under <br/>
<a id="pl.33.7"></a><var>33.7</var>section 
         <statute_ref>469.174, subdivision 10</statute_ref>, paragraph (e), the auditor shall certify the original net tax <br/>
<a id="pl.33.8"></a><var>33.8</var>capacity of the parcel using the greater of (1) the current net tax capacity of the parcel, or <br/>
<a id="pl.33.9"></a><var>33.9</var>(2) the estimated market value of the parcel for the year in which the building or other <br/>
<a id="pl.33.10"></a><var>33.10</var>improvements were demolished or removed, but applying the class rates for the current <br/>
<a id="pl.33.11"></a><var>33.11</var>year.<br/>
<a id="pl.33.12"></a><var>33.12</var>    (g) For a redevelopment district qualifying under section 
         <statute_ref>469.174, subdivision 10</statute_ref>, <br/>
<a id="pl.33.13"></a><var>33.13</var>paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of <br/>
<a id="pl.33.14"></a><var>33.14</var>the land as the original tax capacity for any parcel in the district that contains a building <br/>
<a id="pl.33.15"></a><var>33.15</var>that suffered substantial damage as a result of the disaster or emergency.<br/>
<br/>
<a id="bill.0.40.0"></a><a id="pl.33.16"></a><var>33.16</var>    Sec. 40. Minnesota Statutes 2010, section 469.1793, is amended to read:<br/>
<a id="pl.33.17"></a><var>33.17</var><b>469.1793 DEVELOPER OBLIGATIONS CONTINUED.</b><br/>
<a id="pl.33.18"></a><var>33.18</var>If a developer or other private entity agreed to make payments to the authority or <br/>
<a id="pl.33.19"></a><var>33.19</var>municipality to reimburse the municipality for the state aid offset under Minnesota Statutes <br/>
<a id="pl.33.20"></a><var>33.20</var>2000, section 
         <statute_ref>273.1399</statute_ref>, the obligation continues in effect, notwithstanding the repeal of <br/>
<a id="pl.33.21"></a><var>33.21</var>section 
         <statute_ref>273.1399</statute_ref>. Payments received by the development authority are increments for <br/>
<a id="pl.33.22"></a><var>33.22</var>purposes of the state grant program under section 
<statute_ref>469.1799</statute_ref>.<br/>
<br/>
<a id="bill.0.41.0"></a><a id="pl.33.23"></a><var>33.23</var>    Sec. 41. Minnesota Statutes 2010, section 469.1813, subdivision 6b, is amended to <br/>
<a id="pl.33.24"></a><var>33.24</var>read:<br/>
<a id="pl.33.25"></a><var>33.25</var>    Subd. 6b. <b>Extended duration limit.</b> (a) Notwithstanding the provisions of <br/>
<a id="pl.33.26"></a><var>33.26</var>subdivision 6, a political subdivision may grant an abatement for a period of up to 20 <br/>
<a id="pl.33.27"></a><var>33.27</var>years, if the abatement is for a qualified business.<br/>
<a id="pl.33.28"></a><var>33.28</var>(b) To be a qualified business for purposes of this subdivision, at least 50 percent of <br/>
<a id="pl.33.29"></a><var>33.29</var>the payroll of the operations of the business that qualify for the abatement must be for <br/>
<a id="pl.33.30"></a><var>33.30</var>employees engaged in one of the following lines of business or any combination of them:<br/>
<a id="pl.33.31"></a><var>33.31</var>(1) manufacturing;<br/>
<a id="pl.33.32"></a><var>33.32</var>(2) agricultural processing;<br/>
<a id="pl.33.33"></a><var>33.33</var>(3) mining;<br/>
<a id="pl.33.34"></a><var>33.34</var>(4) research and development;<br/>
<a id="pl.34.1"></a><var>34.1</var>(5) warehousing; or<br/>
<a id="pl.34.2"></a><var>34.2</var>(6) qualified high technology.<br/>
<a id="pl.34.3"></a><var>34.3</var>Alternatively, a qualified business also includes a taxpayer whose real and personal <br/>
<a id="pl.34.4"></a><var>34.4</var>property is subject to valuation under Minnesota Rules, chapter 8100.<br/>
<a id="pl.34.5"></a><var>34.5</var>(c)(1) "Manufacturing" means the material staging and production of tangible <br/>
<a id="pl.34.6"></a><var>34.6</var>personal property by procedures commonly regarded as manufacturing, processing, <br/>
<a id="pl.34.7"></a><var>34.7</var>fabrication, or assembling which changes some existing material into new shapes, new <br/>
<a id="pl.34.8"></a><var>34.8</var>qualities, or new combinations.<br/>
<a id="pl.34.9"></a><var>34.9</var>(2) "Mining" has the meaning given in section 613(c) of the Internal Revenue Code <br/>
<a id="pl.34.10"></a><var>34.10</var>of 1986.<br/>
<a id="pl.34.11"></a><var>34.11</var>(3) "Agricultural processing" means transforming, packaging, sorting, or grading <br/>
<a id="pl.34.12"></a><var>34.12</var>livestock or livestock products, agricultural commodities, or plants or plant products into <br/>
<a id="pl.34.13"></a><var>34.13</var>goods that are used for intermediate or final consumption including goods for nonfood use.<br/>
<a id="pl.34.14"></a><var>34.14</var>(4) "Research and development" means qualified research as defined in section <br/>
<a id="pl.34.15"></a><var>34.15</var>41(d) of the Internal Revenue Code of 1986.<br/>
<a id="pl.34.16"></a><var>34.16</var>(5) "Qualified high technology" means one or more of the following activities:<br/>
<a id="pl.34.17"></a><var>34.17</var>(i) advanced computing, which is any technology used in the design and development <br/>
<a id="pl.34.18"></a><var>34.18</var>of any of the following:<br/>
<a id="pl.34.19"></a><var>34.19</var>(A) computer hardware and software;<br/>
<a id="pl.34.20"></a><var>34.20</var>(B) data communications; and<br/>
<a id="pl.34.21"></a><var>34.21</var>(C) information technologies;<br/>
<a id="pl.34.22"></a><var>34.22</var>(ii) advanced materials, which are materials with engineered properties created <br/>
<a id="pl.34.23"></a><var>34.23</var>through the development of specialized process and synthesis technology;<br/>
<a id="pl.34.24"></a><var>34.24</var>(iii) biotechnology, which is any technology that uses living organisms, cells, <br/>
<a id="pl.34.25"></a><var>34.25</var>macromolecules, microorganisms, or substances from living organisms to make or modify <br/>
<a id="pl.34.26"></a><var>34.26</var>a product, improve plants or animals, or develop microorganisms for useful purposes;<br/>
<a id="pl.34.27"></a><var>34.27</var>(iv) electronic device technology, which is any technology that involves <br/>
<a id="pl.34.28"></a><var>34.28</var>microelectronics, semiconductors, electronic equipment, and instrumentation, radio <br/>
<a id="pl.34.29"></a><var>34.29</var>frequency, microwave, and millimeter electronics, and optical and optic-electrical devices, <br/>
<a id="pl.34.30"></a><var>34.30</var>or data and digital communications and imaging devices;<br/>
<a id="pl.34.31"></a><var>34.31</var>(v) engineering or laboratory testing related to the development of a product;<br/>
<a id="pl.34.32"></a><var>34.32</var>(vi) technology that assists in the assessment or prevention of threats or damage to <br/>
<a id="pl.34.33"></a><var>34.33</var>human health or the environment, including, but not limited to, environmental cleanup <br/>
<a id="pl.34.34"></a><var>34.34</var>technology, pollution prevention technology, or development of alternative energy sources;<br/>
<a id="pl.35.1"></a><var>35.1</var>(vii) medical device technology, which is any technology that involves medical <br/>
<a id="pl.35.2"></a><var>35.2</var>equipment or products other than a pharmaceutical product that has therapeutic or <br/>
<a id="pl.35.3"></a><var>35.3</var>diagnostic value and is regulated; or<br/>
<a id="pl.35.4"></a><var>35.4</var>(viii) advanced vehicles technology which is any technology that involves electric <br/>
<a id="pl.35.5"></a><var>35.5</var>vehicles, hybrid vehicles, or alternative fuel vehicles, or components used in the <br/>
<a id="pl.35.6"></a><var>35.6</var>construction of electric vehicles, hybrid vehicles, or alternative fuel vehicles. An electric <br/>
<a id="pl.35.7"></a><var>35.7</var>vehicle is a road vehicle that draws propulsion energy only from an onboard source of <br/>
<a id="pl.35.8"></a><var>35.8</var>electrical energy. A hybrid vehicle is a road vehicle that can draw propulsion energy from <br/>
<a id="pl.35.9"></a><var>35.9</var>both a consumable fuel and a rechargeable energy storage system.<br/>
<a id="pl.35.10"></a><var>35.10</var>(d) The authority to grant new abatements under this subdivision expires on July 1, <br/>
<a id="pl.35.11"></a><var>35.11</var>2004, except that the authority to grant new abatements for real and personal property <br/>
<a id="pl.35.12"></a><var>35.12</var>subject to valuation under Minnesota Rules, chapter 8100, does not expire.<br/>
<br/>
<a id="bill.0.42.0"></a><a id="pl.35.13"></a><var>35.13</var>    Sec. 42. Minnesota Statutes 2010, section 473F.02, subdivision 3, is amended to read:<br/>
<a id="pl.35.14"></a><var>35.14</var>    Subd. 3. <b>Commercial-industrial property.</b> "Commercial-industrial property" <br/>
<a id="pl.35.15"></a><var>35.15</var>means the following categories of property, as defined in section 
         <statute_ref>273.13</statute_ref>, excluding that <br/>
<a id="pl.35.16"></a><var>35.16</var>portion of such property (1) which may, by law, constitute the tax base for a tax increment <br/>
<a id="pl.35.17"></a><var>35.17</var>pledged under section 
<statute_ref>469.042</statute_ref> or 
<statute_ref>469.162</statute_ref>, certification of which was requested prior to <br/>
<a id="pl.35.18"></a><var>35.18</var>August 1, 1979, to the extent and while such tax increment is so pledged; or (2) which is <br/>
<a id="pl.35.19"></a><var>35.19</var>exempt from taxation under section 
         <statute_ref>272.02</statute_ref>:<br/>
<a id="pl.35.20"></a><var>35.20</var>(a) That portion of class 3 property defined in Minnesota Statutes 1971, section <br/>
<statute_ref><a id="pl.35.21"></a><var>35.21</var>273.13
         </statute_ref>, consisting of stocks of merchandise and furniture and fixtures used therewith; <br/>
<a id="pl.35.22"></a><var>35.22</var>manufacturers' materials and manufactured articles; and tools, implements and machinery, <br/>
<a id="pl.35.23"></a><var>35.23</var>whether fixtures or otherwise.<br/>
<a id="pl.35.24"></a><var>35.24</var>(b) That portion of class 4 property defined in Minnesota Statutes 1971, section <br/>
<statute_ref><a id="pl.35.25"></a><var>35.25</var>273.13
         </statute_ref>, which is either used or zoned for use for any commercial or industrial purpose, <br/>
<a id="pl.35.26"></a><var>35.26</var>except for such property which is, or, in the case of property under construction, will when <br/>
<a id="pl.35.27"></a><var>35.27</var>completed be used exclusively for residential occupancy and the provision of services <br/>
<a id="pl.35.28"></a><var>35.28</var>to residential occupants thereof. Property shall be considered as used exclusively for <br/>
<a id="pl.35.29"></a><var>35.29</var>residential occupancy only if each of not less than 80 percent of its occupied residential <br/>
<a id="pl.35.30"></a><var>35.30</var>units is, or, in the case of property under construction, will when completed be occupied <br/>
<a id="pl.35.31"></a><var>35.31</var>under an oral or written agreement for occupancy over a continuous period of not less <br/>
<a id="pl.35.32"></a><var>35.32</var>than 30 days.<br/>
<a id="pl.35.33"></a><var>35.33</var>If the classification of property prescribed by section 
         <statute_ref>273.13</statute_ref> is modified by <br/>
<a id="pl.35.34"></a><var>35.34</var>legislative amendment, the references in this subdivision shall be to such successor class <br/>
<a id="pl.36.1"></a><var>36.1</var>or classes of property, or portions thereof, as embrace the kinds of property designated <br/>
<a id="pl.36.2"></a><var>36.2</var>in this subdivision.<br/>
<br/>
<a id="bill.0.43.0"></a><a id="pl.36.3"></a><var>36.3</var>    Sec. 43. <b> REPEALER.</b><br/>
<a id="pl.36.4"></a><var>36.4</var>Minnesota Statutes 2010, sections 272.02, subdivision 83; 290.06, subdivisions <br/>
<a id="pl.36.5"></a><var>36.5</var>24 and 32; 297A.68, subdivision 41; 469.042, subdivisions 2, 3, and 4; 469.043; <br/>
<a id="pl.36.6"></a><var>36.6</var>469.059, subdivision 13; 469.129; 469.134; 469.162, subdivision 2; 469.1651; 469.166, <br/>
<a id="pl.36.7"></a><var>36.7</var>subdivisions 7, 8, 9, 10, 11, and 12; 469.167, subdivisions 1 and 3; 469.168; 469.169, <br/>
<a id="pl.36.8"></a><var>36.8</var>subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 13; 469.170, subdivisions 1, 2, 3, 4, 5, 5a, <br/>
<a id="pl.36.9"></a><var>36.9</var>5b, 5c, 5d, 5e, 6, 7, and 8; 469.171, subdivisions 2, 5, and 6b; 469.173, subdivisions 1 <br/>
<a id="pl.36.10"></a><var>36.10</var>and 3; 469.1765; 469.1791; 469.1799, subdivision 2; 469.301, subdivisions 1, 2, 3, 4, and <br/>
<a id="pl.36.11"></a><var>36.11</var>5; 469.302; 469.303; 469.304; 469.321; 469.3215; 469.322; 469.323; 469.324; 469.325; <br/>
<a id="pl.36.12"></a><var>36.12</var>469.326; 469.327; 469.328; 469.329; and 473.680, are repealed.<br/>
<br/>
<a id="bill.0.44.0"></a><a id="pl.36.13"></a><var>36.13</var>    Sec. 44. <b>EFFECTIVE DATE.</b><br/>
<a id="pl.36.14"></a><var>36.14</var>This act is effective August 1, 2012, and the tax increment financing provisions <br/>
<a id="pl.36.15"></a><var>36.15</var>apply to all districts, regardless of when the request for certification was made, provided <br/>
<a id="pl.36.16"></a><var>36.16</var>that the adjustments to original tax capacity required under section 39 apply only to <br/>
<a id="pl.36.17"></a><var>36.17</var>exclusions that reduced taxable market value beginning with taxes payable in 2012 or <br/>
<a id="pl.36.18"></a><var>36.18</var>thereafter, regardless of when the law authorizing the exclusion became effective.<br/>