Relating to the financing and operation of state and local governments

ARTICLE 1 - INCOME AND CORPORATE FRANCHISE TAXES

Adding new definitions to the small business investment credit (angel investment credit); adding references to a qualified greater Minnesota business for purposes of the certification requirements; increasing the amount that may be allocated for credits under the program and extends the allocation for two years; requiring the commissioner of employment and economic development (DEED) to allocate credits to approved applications if credits are available; applying the repayment provisions for the small business investment credit to greater Minnesota businesses under certain conditions; adding the requirement that the annual report to the legislature on the qualified small business investment credit include the number of qualified greater Minnesota small businesses; extending the credit through tax year 2016; adopting references to the federal administrative provisions made between April 14, 2011 and December 20, 2013; adopting changes made to federal taxable income since April 14, 2011; conforming the income tax to the increased federal standard deduction for married filers beginning in tax year 2014; retaining the addition between the old and new federal deduction amounts for tax year 2013; conforming to the deductions for higher education tuition expenses and educator classroom expenses; providing new subtractions for the federal limitation of itemized deductions and phaseout of personal and dependent exemptions and updates cross references; providing a definition for state itemized deduction for purposes of limiting the income thresholds for deduction of the phaseout of personal and dependent exemptions and limitation on itemized deductions; adopting federal changes to federal adjusted gross income (FAGI) made between April 14, 2011, and December 20, 2013 for purposes of calculating individual alternative minimum tax (AMT) and withholding; adding a definition for purposes of increases to the eligible expense limit and credit rate for the dependent care credit; increasing the income level at which the credit begins; increasing the working family credit beginning in tax year 2014 by increasing the percentage of income used to calculate the credit for all taxpayers and removing the two-tier calculation under current law for taxpayers with children; providing indexing for inflation for the increase in the working family credit; prohibiting the commissioner from assessing tax or reducing refunds of individual taxpayers who correctly computed their tax or refund using the version of the Code in effect before the enactment of this article

ARTICLE 2 - SALES AND USE TAXES

Repealing the sales tax on repairing and maintaining electronic and precision equipment, and commercial and industrial machinery and equipment, and on warehousing and storage services; reinstating the sales tax exemption for telecommunications equipment; amending the effective date in Laws 2013 providing an upfront sales tax exemption for purchases of capital equipment to make the upfront exemption effective for sales and purchases after June 30, 2015; repealing the definition of self-storage service

ARTICLE 3 - ESTATE AND GIFT TAX

Requiring the filing of a tax return if the sum of the federal adjusted taxable estate and federal adjusted taxable gifts are made during the year exceeds $1,200,000, $2,000,000, $3,000,000, $4,000,000, and $5,000,000 for estates of decedents dying in 2014, 2015, 2016, 2017, and 2018 and thereafter; clarifying the situs rules; removing the language allowing an exclusion for qualified small business and farm property; providing the new estate tax base necessary for a stand-alone rate structure; removing the language for computing the estate tax under current law; allowing a deduction for the value of qualified terminable interest property (QTIP); repealing the gift tax sections of law retroactively for gifts made after June 30, 2013, obsolete language regarding the 2010 QTIP election, the nonresident decedent tax credit provision contained under the current law section pertaining to estate tax rates and obbsolete provisions pertaining to arbitration of disputes between states over their jurisdiction to impose estate or inheritance taxes on a decedent's estate

ARTICLE 4 PROPERTY TAXES

Renaming the existing location equity revenue the local optional revenue and making all school districts eligible for the $424 per pupil location optional revenue allowance and providing that a district may levy less than the permitted maximum; making technical changes to the location equity revenue subtraction from referendum revenue; clarifying that changes made in the 2013 omnibus tax bill relating to property tax valuation reductions only apply to easements or restrictions entered into after May 23, 2013; providing for an additional $3 million of county program aid to Beltrami County for aids payable in 2015 through 2024 only, and an additional $1.5 million to Mahnomen County for aids payable in 2015 only

ARTICLE 5 PUBLIC FINANCE

Extending the authority for the state agricultural society (state fair) to issue bonds, other than bonds to refund outstanding bonds; authorizing the metropolitan council to issue regional transit capital debt up to $75,300.000; authorizing Itasca county to issue both revenue and general obligation bonds to finance the construction of a nursing home facility; extending the authority for the city of Detroit Lakes to approve a tax increment financing (TIF) district; allowing the city of St. Paul to use tax increment from a 2008 TIF district to pay principal and interest on bond obligations issued in 2009 for the RiverCentre arena

ARTICLE 6 MISCELLANEOUS PROVISIONS

Striking references to previous transfers to the budget reserve and creating a new requirement for the commissioner of management and budget (MMB) to calculate a budget reserve level; increasing the use of a forecast budget surplus to increase the budget reserve from the limit on the use of the surplus of $653,000,000 currently in law up to $810,922,000; modifying the method used to calculate the adequacy of the budget reserve and directs the commissioner of management and budget to annually prepare a methodology to evaluate the adequacy of the reserve based on the general fund tax structure; providing that if insufficient funds exist in the Iron Range school consolidation and cooperatively operated school account to make payments as authorized, the Iron Range Resources and Rehabilitation board may receive up to 25% of the distribution levy under the Iron Range fiscal disparities program; factoring into the apportionment of the areawide levy the school fund allocation, if certified by the Iron Range Resources and Rehabilitation board; requiring the administrative auditor to include the school fund allocation upon determining the areawide tax rate; providing for the payment of the school fund allocation from the fiscal disparities levy to the Iron Range Resources and Rehabilitation board; annually appropriating, from the occupation tax distribution that is deposited into the general fund, an amount equal to that which would have been generated by six cents tax of the production tax; reducing, by five cents, the aid guarantee for the allocation of the production tax to the counties; freezing the the inflationary index; reducing by five cents the allocation of the taconite production tax that is allocated to counties; creating a school account that receives a ten cent distribution of the production tax and the distribution of the occupation tax and the inflation adjustment for the production tax, authorizing the IRRRB to use funds in the account only to assist school districts within the taconite relief area with the repayment of bonds issued for qualified school projects; reducing, by five cents, the allocation of the taconite production tax that is allocated to the taconite economic development fund; capturing and reallocating the proceeds attributable to the increase in the implicit price deflator to the new school account; requiring a onetime transfer of $150,000,000 to the budget reserve in the general fund on July 1, 2014; appropriating $1,000,000 for fiscal years 2014 and 2015 from the general fund to the commissioner of revenue for costs associated with administering this act
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