<a id="pl.1.3"></a><var>1.3</var>to individual income, corporate franchise, property, sales and use, estate, mineral, <br/>
<a id="pl.1.4"></a><var>1.4</var>local, and other taxes and tax-related provisions; changing property tax aids and <br/>
<a id="pl.1.5"></a><var>1.5</var>credits; modifying education aids and levies; making changes to additions and <br/>
<a id="pl.1.6"></a><var>1.6</var>subtractions from federal taxable income; providing for federal conformity; <br/>
<a id="pl.1.7"></a><var>1.7</var>changing tax rates for estates; modifying income tax credits; modifying estate tax <br/>
<a id="pl.1.8"></a><var>1.8</var>provisions; repealing the gift tax; modifying the definition of sale and purchase; <br/>
<a id="pl.1.9"></a><var>1.9</var>modifying sales tax exemptions; modifying tax increment financing rules; <br/>
<a id="pl.1.10"></a><var>1.10</var>modifying the distribution of taconite production taxes; modifying and providing <br/>
<a id="pl.1.11"></a><var>1.11</var>provisions for public finance; report; appropriating money;amending Minnesota <br/>
<a id="pl.1.12"></a><var>1.12</var>Statutes 2012, sections 16A.152, subdivisions 1b, 2, 8; 37.31, subdivision <br/>
<a id="pl.1.13"></a><var>1.13</var>8; 116J.8737, subdivisions 5, 7, 9, 12; 276A.01, by adding a subdivision; <br/>
<a id="pl.1.14"></a><var>1.14</var>276A.06, subdivisions 3, 5, 8; 289A.02, subdivision 7; 289A.08, subdivision <br/>
<a id="pl.1.15"></a><var>1.15</var>7; 289A.18, subdivision 3; 290.01, subdivision 19a, by adding a subdivision; <br/>
<a id="pl.1.16"></a><var>1.16</var>290.067, subdivisions 1, 2a, by adding a subdivision; 290.0671, subdivisions <br/>
<a id="pl.1.17"></a><var>1.17</var>1, 7; 290.0675, subdivision 1; 291.03, by adding a subdivision; 297A.68, by <br/>
<a id="pl.1.18"></a><var>1.18</var>adding a subdivision; 298.225, subdivision 1; 298.28, subdivisions 3, 5, 7, 9a, by <br/>
<a id="pl.1.19"></a><var>1.19</var>adding a subdivision; 473.39, by adding a subdivision; Minnesota Statutes 2013 <br/>
<a id="pl.1.20"></a><var>1.20</var>Supplement, sections 116J.8737, subdivisions 1, 2; 126C.10, subdivisions 1, 2e; <br/>
<a id="pl.1.21"></a><var>1.21</var>126C.13, subdivision 4; 126C.17, subdivision 1; 273.117; 289A.10, subdivision <br/>
<a id="pl.1.22"></a><var>1.22</var>1; 290.01, subdivisions 19, 19b, 31; 290.06, subdivision 2c; 290.091, subdivision <br/>
<a id="pl.1.23"></a><var>1.23</var>2; 290A.03, subdivision 15; 291.005, subdivision 1; 291.03, subdivision 1; <br/>
<a id="pl.1.24"></a><var>1.24</var>297A.61, subdivision 3; 297A.68, subdivision 5; 298.17; 298.28, subdivision 10; <br/>
<a id="pl.1.25"></a><var>1.25</var>Laws 2003, chapter 127, article 12, section 28; Laws 2006, chapter 259, article <br/>
<a id="pl.1.26"></a><var>1.26</var>10, section 13, subdivision 4; Laws 2008, chapter 366, article 5, section 36, <br/>
<a id="pl.1.27"></a><var>1.27</var>subdivision 3; Laws 2013, chapter 143, article 8, section 26; proposing coding for <br/>
<a id="pl.1.28"></a><var>1.28</var>new law in Minnesota Statutes, chapter 291; repealing Minnesota Statutes 2012, <br/>
<a id="pl.1.29"></a><var>1.29</var>sections 291.03, subdivision 1b; 291.41; 291.42; 291.43; 291.44; 291.45; 291.46; <br/>
<a id="pl.1.30"></a><var>1.30</var>291.47; Minnesota Statutes 2013 Supplement, sections 291.03, subdivision 1c; <br/>
<a id="pl.1.31"></a><var>1.31</var>292.16; 292.17; 292.18; 292.19; 292.20; 292.21; 297A.61, subdivision 57.<br/>
<a id="pl.1.32"></a><var>1.32</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.1.0.0"></a>

<a id="bill.1.1.0"></a><a id="pl.2.3"></a><var>2.3</var>    Section 1. Minnesota Statutes 2013 Supplement, section 116J.8737, subdivision 1, <br/>
<a id="pl.2.4"></a><var>2.4</var>is amended to read:<br/>
<a id="pl.2.5"></a><var>2.5</var>    Subdivision 1. <b>Definitions.</b> (a) For the purposes of this section, the following terms <br/>
<a id="pl.2.6"></a><var>2.6</var>have the meanings given.<br/>
<a id="pl.2.7"></a><var>2.7</var>(b) "Qualified small business" means a business that has been certified by the <br/>
<a id="pl.2.8"></a><var>2.8</var>commissioner under subdivision 2.<br/>
<a id="pl.2.9"></a><var>2.9</var>(c) "Qualified investor" means an investor who has been certified by the <br/>
<a id="pl.2.10"></a><var>2.10</var>commissioner under subdivision 3.<br/>
<a id="pl.2.11"></a><var>2.11</var>(d) "Qualified fund" means a pooled angel investment network fund that has been <br/>
<a id="pl.2.12"></a><var>2.12</var>certified by the commissioner under subdivision 4.<br/>
<a id="pl.2.13"></a><var>2.13</var>(e) "Qualified investment" means a cash investment in a qualified small business <br/>
<a id="pl.2.14"></a><var>2.14</var>of a minimum of:<br/>
<a id="pl.2.15"></a><var>2.15</var>(1) $10,000 in a calendar year by a qualified investor; or<br/>
<a id="pl.2.16"></a><var>2.16</var>(2) $30,000 in a calendar year by a qualified fund.<br/>
<a id="pl.2.17"></a><var>2.17</var>A qualified investment must be made in exchange for common stock, a partnership <br/>
<a id="pl.2.18"></a><var>2.18</var>or membership interest, preferred stock, debt with mandatory conversion to equity, or an <br/>
<a id="pl.2.19"></a><var>2.19</var>equivalent ownership interest as determined by the commissioner.<br/>
<a id="pl.2.20"></a><var>2.20</var>(f) "Family" means a family member within the meaning of the Internal Revenue <br/>
<a id="pl.2.21"></a><var>2.21</var>Code, section 267(c)(4).<br/>
<a id="pl.2.22"></a><var>2.22</var>(g) "Pass-through entity" means a corporation that for the applicable taxable year is <br/>
<a id="pl.2.23"></a><var>2.23</var>treated as an S corporation or a general partnership, limited partnership, limited liability <br/>
<a id="pl.2.24"></a><var>2.24</var>partnership, trust, or limited liability company and which for the applicable taxable year is <br/>
<a id="pl.2.25"></a><var>2.25</var>not taxed as a corporation under chapter 290.<br/>
<a id="pl.2.26"></a><var>2.26</var>(h) "Intern" means a student of an accredited institution of higher education, or a <br/>
<a id="pl.2.27"></a><var>2.27</var>former student who has graduated in the past six months from an accredited institution <br/>
<a id="pl.2.28"></a><var>2.28</var>of higher education, who is employed by a qualified small business in a nonpermanent <br/>
<a id="pl.2.29"></a><var>2.29</var>position for a duration of nine months or less that provides training and experience in the <br/>
<a id="pl.2.30"></a><var>2.30</var>primary business activity of the business.<br/>
<a id="pl.2.31"></a><var>2.31</var>(i) "Liquidation event" means a conversion of qualified investment for cash, cash <br/>
<a id="pl.2.32"></a><var>2.32</var>and other consideration, or any other form of equity or debt interest.<br/>
<a id="pl.2.33"></a><var>2.33</var>(j) "Qualified greater Minnesota business" means a qualified small business that <br/>
<a id="pl.2.34"></a><var>2.34</var>is also certified by the commissioner as a qualified greater Minnesota business under <br/>
<a id="pl.2.35"></a><var>2.35</var>subdivision 2, paragraph (h).<br/>
<a id="pl.3.1"></a><var>3.1</var>(k) "Minority group member" means a United States citizen who is Asian, Pacific <br/>
<a id="pl.3.2"></a><var>3.2</var>Islander, Black, Hispanic, or Native American.<br/>
<a id="pl.3.3"></a><var>3.3</var>(l) "Minority-owned business" means a business for which one or more minority <br/>
<a id="pl.3.4"></a><var>3.4</var>group members:<br/>
<a id="pl.3.5"></a><var>3.5</var>(1) own at least 50 percent of the business, or, in the case of a publicly owned <br/>
<a id="pl.3.6"></a><var>3.6</var>business, own at least 51 percent of the stock; and<br/>
<a id="pl.3.7"></a><var>3.7</var>(2) manage the business and control the daily business operations.<br/>
<a id="pl.3.8"></a><var>3.8</var>(m) "Women" means persons of the female gender.<br/>
<a id="pl.3.9"></a><var>3.9</var>(n) "Women-owned business" means a business for which one or more women:<br/>
<a id="pl.3.10"></a><var>3.10</var>(1) own at least 50 percent of the business, or, in the case of a publicly owned <br/>
<a id="pl.3.11"></a><var>3.11</var>business, own at least 51 percent of the stock; and<br/>
<a id="pl.3.12"></a><var>3.12</var>(2) manage the business and control the daily business operations.<br/>
<a id="pl.3.13"></a><var>3.13</var>(o) "Officer" means a person elected or appointed by the board of directors to <br/>
<a id="pl.3.14"></a><var>3.14</var>manage the daily operations of the qualified small business;<br/>
<a id="pl.3.15"></a><var>3.15</var>(p) "Principal" means a person having authority to act on behalf of the qualified <br/>
<a id="pl.3.16"></a><var>3.16</var>small business.<br/>
<a id="pl.3.17"></a><var>3.17</var><b>EFFECTIVE DATE.</b>This section is effective for taxable years beginning after <br/>
<a id="pl.3.18"></a><var>3.18</var>December 31, 2014.<br/>
<br/>
<a id="bill.1.2.0"></a><a id="pl.3.19"></a><var>3.19</var>    Sec. 2. Minnesota Statutes 2013 Supplement, section 116J.8737, subdivision 2, is <br/>
<a id="pl.3.20"></a><var>3.20</var>amended to read:<br/>
<a id="pl.3.21"></a><var>3.21</var>    Subd. 2. <b>Certification of qualified small businesses.</b> (a) Businesses may apply <br/>
<a id="pl.3.22"></a><var>3.22</var>to the commissioner for certification as a qualified small business or qualified greater <br/>
<a id="pl.3.23"></a><var>3.23</var>Minnesota small business for a calendar year. The application must be in the form <br/>
<a id="pl.3.24"></a><var>3.24</var>and be made under the procedures specified by the commissioner, accompanied by an <br/>
<a id="pl.3.25"></a><var>3.25</var>application fee of $150. Application fees are deposited in the small business investment <br/>
<a id="pl.3.26"></a><var>3.26</var>tax credit administration account in the special revenue fund. The application for <br/>
<a id="pl.3.27"></a><var>3.27</var>certification for 2010 must be made available on the department's Web site by August 1, <br/>
<a id="pl.3.28"></a><var>3.28</var>2010. Applications for subsequent years' certification must be made available on the <br/>
<a id="pl.3.29"></a><var>3.29</var>department's Web site by November 1 of the preceding year.<br/>
<a id="pl.3.30"></a><var>3.30</var>(b) Within 30 days of receiving an application for certification under this subdivision, <br/>
<a id="pl.3.31"></a><var>3.31</var>the commissioner must either certify the business as satisfying the conditions required <br/>
<a id="pl.3.32"></a><var>3.32</var>of a qualified small business, or qualified greater Minnesota small business, request <br/>
<a id="pl.3.33"></a><var>3.33</var>additional information from the business, or reject the application for certification. If <br/>
<a id="pl.3.34"></a><var>3.34</var>the commissioner requests additional information from the business, the commissioner <br/>
<a id="pl.3.35"></a><var>3.35</var>must either certify the business or reject the application within 30 days of receiving the <br/>
<a id="pl.4.1"></a><var>4.1</var>additional information. If the commissioner neither certifies the business nor rejects <br/>
<a id="pl.4.2"></a><var>4.2</var>the application within 30 days of receiving the original application or within 30 days of <br/>
<a id="pl.4.3"></a><var>4.3</var>receiving the additional information requested, whichever is later, then the application is <br/>
<a id="pl.4.4"></a><var>4.4</var>deemed rejected, and the commissioner must refund the $150 application fee. A business <br/>
<a id="pl.4.5"></a><var>4.5</var>that applies for certification and is rejected may reapply.<br/>
<a id="pl.4.6"></a><var>4.6</var>(c) To receive certification as a qualified small business, a business must satisfy <br/>
<a id="pl.4.7"></a><var>4.7</var>all of the following conditions:<br/>
<a id="pl.4.8"></a><var>4.8</var>(1) the business has its headquarters in Minnesota;<br/>
<a id="pl.4.9"></a><var>4.9</var>(2) at least 51 percent of the business's employees are employed in Minnesota, and <br/>
<a id="pl.4.10"></a><var>4.10</var>51 percent of the business's total payroll is paid or incurred in the state;<br/>
<a id="pl.4.11"></a><var>4.11</var>(3) the business is engaged in, or is committed to engage in, innovation in Minnesota <br/>
<a id="pl.4.12"></a><var>4.12</var>in one of the following as its primary business activity:<br/>
<a id="pl.4.13"></a><var>4.13</var>(i) using proprietary technology to add value to a product, process, or service in a <br/>
<a id="pl.4.14"></a><var>4.14</var>qualified high-technology field;<br/>
<a id="pl.4.15"></a><var>4.15</var>(ii) researching or developing a proprietary product, process, or service in a qualified <br/>
<a id="pl.4.16"></a><var>4.16</var>high-technology field; or<br/>
<a id="pl.4.17"></a><var>4.17</var>(iii) researching, developing, or producing a new proprietary technology for use in <br/>
<a id="pl.4.18"></a><var>4.18</var>the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;<br/>
<a id="pl.4.19"></a><var>4.19</var>(4) other than the activities specifically listed in clause (3), the business is not <br/>
<a id="pl.4.20"></a><var>4.20</var>engaged in real estate development, insurance, banking, lending, lobbying, political <br/>
<a id="pl.4.21"></a><var>4.21</var>consulting, information technology consulting, wholesale or retail trade, leisure, <br/>
<a id="pl.4.22"></a><var>4.22</var>hospitality, transportation, construction, ethanol production from corn, or professional <br/>
<a id="pl.4.23"></a><var>4.23</var>services provided by attorneys, accountants, business consultants, physicians, or health <br/>
<a id="pl.4.24"></a><var>4.24</var>care consultants;<br/>
<a id="pl.4.25"></a><var>4.25</var>(5) the business has fewer than 25 employees;<br/>
<a id="pl.4.26"></a><var>4.26</var>(6) the business must pay its employees annual wages of at least 175 percent of the <br/>
<a id="pl.4.27"></a><var>4.27</var>federal poverty guideline for the year for a family of four and must pay its interns annual <br/>
<a id="pl.4.28"></a><var>4.28</var>wages of at least 175 percent of the federal minimum wage used for federally covered <br/>
<a id="pl.4.29"></a><var>4.29</var>employers, except that this requirement must be reduced proportionately for employees <br/>
<a id="pl.4.30"></a><var>4.30</var>and interns who work less than full-time, and does not apply to an executive, officer, or <br/>
<a id="pl.4.31"></a><var>4.31</var>member of the board of the business, or to any employee who owns, controls, or holds <br/>
<a id="pl.4.32"></a><var>4.32</var>power to vote more than 20 percent of the outstanding securities of the business;<br/>
<a id="pl.4.33"></a><var>4.33</var>(7) the business has (i) not been in operation for more than ten years, or (ii) not <br/>
<a id="pl.4.34"></a><var>4.34</var>been in operation for more than 20 years if the business is engaged in the research, <br/>
<a id="pl.4.35"></a><var>4.35</var>development, or production of medical devices or pharmaceuticals for which United <br/>
<a id="pl.5.1"></a><var>5.1</var>States Food and Drug Administration approval is required for use in the treatment or <br/>
<a id="pl.5.2"></a><var>5.2</var>diagnosis of a disease or condition;<br/>
<a id="pl.5.3"></a><var>5.3</var>(8) the business has not previously received private equity investments of more <br/>
<a id="pl.5.4"></a><var>5.4</var>than $4,000,000;<br/>
<a id="pl.5.5"></a><var>5.5</var>    (9) the business is not an entity disqualified under section 
         <statute_ref>80A.50</statute_ref>, paragraph (b), <br/>
<a id="pl.5.6"></a><var>5.6</var>clause (3); and<br/>
<a id="pl.5.7"></a><var>5.7</var>(10) the business has not issued securities that are traded on a public exchange.<br/>
<a id="pl.5.8"></a><var>5.8</var>(d) In applying the limit under paragraph (c), clause (5), the employees in all members <br/>
<a id="pl.5.9"></a><var>5.9</var>of the unitary business, as defined in section 
         <statute_ref>290.17, subdivision 4</statute_ref>, must be included.<br/>
<a id="pl.5.10"></a><var>5.10</var>(e) In order for a qualified investment in a business to be eligible for tax credits:<br/>
<a id="pl.5.11"></a><var>5.11</var>(1) the business must have applied for and received certification for the calendar <br/>
<a id="pl.5.12"></a><var>5.12</var>year in which the investment was made prior to the date on which the qualified investment <br/>
<a id="pl.5.13"></a><var>5.13</var>was made;<br/>
<a id="pl.5.14"></a><var>5.14</var>(2) the business must not have issued securities that are traded on a public exchange;<br/>
<a id="pl.5.15"></a><var>5.15</var>(3) the business must not issue securities that are traded on a public exchange within <br/>
<a id="pl.5.16"></a><var>5.16</var>180 days after the date on which the qualified investment was made; and<br/>
<a id="pl.5.17"></a><var>5.17</var>(4) the business must not have a liquidation event within 180 days after the date on <br/>
<a id="pl.5.18"></a><var>5.18</var>which the qualified investment was made.<br/>
<a id="pl.5.19"></a><var>5.19</var>(f) The commissioner must maintain a list of qualified small businesses and qualified <br/>
<a id="pl.5.20"></a><var>5.20</var>greater Minnesota businesses certified under this subdivision for the calendar year and <br/>
<a id="pl.5.21"></a><var>5.21</var>make the list accessible to the public on the department's Web site.<br/>
<a id="pl.5.22"></a><var>5.22</var>(g) For purposes of this subdivision, the following terms have the meanings given:<br/>
<a id="pl.5.23"></a><var>5.23</var>(1) "qualified high-technology field" includes aerospace, agricultural processing, <br/>
<a id="pl.5.24"></a><var>5.24</var>renewable energy, energy efficiency and conservation, environmental engineering, food <br/>
<a id="pl.5.25"></a><var>5.25</var>technology, cellulosic ethanol, information technology, materials science technology, <br/>
<a id="pl.5.26"></a><var>5.26</var>nanotechnology, telecommunications, biotechnology, medical device products, <br/>
<a id="pl.5.27"></a><var>5.27</var>pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar <br/>
<a id="pl.5.28"></a><var>5.28</var>fields; and<br/>
<a id="pl.5.29"></a><var>5.29</var>(2) "proprietary technology" means the technical innovations that are unique and <br/>
<a id="pl.5.30"></a><var>5.30</var>legally owned or licensed by a business and includes, without limitation, those innovations <br/>
<a id="pl.5.31"></a><var>5.31</var>that are patented, patent pending, a subject of trade secrets, or copyrighted.; and<br/>
<a id="pl.5.32"></a><var>5.32</var>(3) "greater Minnesota" means the area of Minnesota located outside of the <br/>
<a id="pl.5.33"></a><var>5.33</var>metropolitan area as defined in section 473.121, subdivision 2.<br/>
<a id="pl.5.34"></a><var>5.34</var>(h) To receive certification as a qualified greater Minnesota business, a business must <br/>
<a id="pl.5.35"></a><var>5.35</var>satisfy all of the requirements of paragraph (c) and must satisfy the following conditions:<br/>
<a id="pl.5.36"></a><var>5.36</var>(1) the business has its headquarters in greater Minnesota; and<br/>
<a id="pl.6.1"></a><var>6.1</var>(2) at least 51 percent of the business's employees are employed in greater Minnesota, <br/>
<a id="pl.6.2"></a><var>6.2</var>and 51 percent of the business's total payroll is paid or incurred in greater Minnesota.<br/>
<a id="pl.6.3"></a><var>6.3</var><b>EFFECTIVE DATE.</b>This section is effective for taxable years beginning after <br/>
<a id="pl.6.4"></a><var>6.4</var>December 31, 2014.<br/>
<br/>
<a id="bill.1.3.0"></a><a id="pl.6.5"></a><var>6.5</var>    Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 5, is amended to read:<br/>
<a id="pl.6.6"></a><var>6.6</var>    Subd. 5. <b>Credit allowed.</b> (a) (1) A qualified investor or qualified fund is eligible <br/>
<a id="pl.6.7"></a><var>6.7</var>for a credit equal to 25 percent of the qualified investment in a qualified small business. <br/>
<a id="pl.6.8"></a><var>6.8</var>Investments made by a pass-through entity qualify for a credit only if the entity is a <br/>
<a id="pl.6.9"></a><var>6.9</var>qualified fund. The commissioner must not allocate more than $11,000,000 $15,000,000<br/>
<a id="pl.6.10"></a><var>6.10</var> $15,000,000 in credits to qualified investors or qualified funds for taxable years <br/>
<a id="pl.6.11"></a><var>6.11</var>beginning after December 31, 2009 2013, and before January 1, 2011, and must not <br/>
<a id="pl.6.12"></a><var>6.12</var>allocate more than $12,000,000 in credits per year for taxable years beginning after <br/>
<a id="pl.6.13"></a><var>6.13</var>December 31, 2010, and before January 1, 20152017; and <br/>
<a id="pl.6.14"></a><var>6.14</var>(2) for taxable years beginning after December 31, 2014, and before January 1, <br/>
<a id="pl.6.15"></a><var>6.15</var>2017, $7,500,000 must be allocated to credits for qualifying investments in qualified <br/>
<a id="pl.6.16"></a><var>6.16</var>greater Minnesota businesses and minority- or women-owned qualified small businesses <br/>
<a id="pl.6.17"></a><var>6.17</var>in Minnesota. Any portion of a taxable year's credits that is reserved for qualifying <br/>
<a id="pl.6.18"></a><var>6.18</var>investments in greater Minnesota businesses and minority- or women-owned qualified <br/>
<a id="pl.6.19"></a><var>6.19</var>small businesses in Minnesota that is not allocated by September 30 of the taxable year is <br/>
<a id="pl.6.20"></a><var>6.20</var>available for allocation to other credit applications beginning on October 1. Any portion <br/>
<a id="pl.6.21"></a><var>6.21</var>of a taxable year's credits that is not allocated by the commissioner does not cancel and <br/>
<a id="pl.6.22"></a><var>6.22</var>may be carried forward to subsequent taxable years until all credits have been allocated.<br/>
<a id="pl.6.23"></a><var>6.23</var>(b) The commissioner may not allocate more than a total maximum amount in credits <br/>
<a id="pl.6.24"></a><var>6.24</var>for a taxable year to a qualified investor for the investor's cumulative qualified investments <br/>
<a id="pl.6.25"></a><var>6.25</var>as an individual qualified investor and as an investor in a qualified fund; for married <br/>
<a id="pl.6.26"></a><var>6.26</var>couples filing joint returns the maximum is $250,000, and for all other filers the maximum <br/>
<a id="pl.6.27"></a><var>6.27</var>is $125,000. The commissioner may not allocate more than a total of $1,000,000 in credits <br/>
<a id="pl.6.28"></a><var>6.28</var>over all taxable years for qualified investments in any one qualified small business.<br/>
<a id="pl.6.29"></a><var>6.29</var>(c) The commissioner may not allocate a credit to a qualified investor either as an <br/>
<a id="pl.6.30"></a><var>6.30</var>individual qualified investor or as an investor in a qualified fund if the investor receives <br/>
<a id="pl.6.31"></a><var>6.31</var>more than 50 percent of the investor's gross annual income from the qualified small business <br/>
<a id="pl.6.32"></a><var>6.32</var>in which the qualified investment is proposed, at the time the investment is proposed:<br/>
<a id="pl.6.33"></a><var>6.33</var>(1) the investor is an officer or principal of the qualified small business; or<br/>
<a id="pl.7.1"></a><var>7.1</var>(2) the investor, either individually or in combination with one or more members of <br/>
<a id="pl.7.2"></a><var>7.2</var>the investor's family, owns, controls, or holds the power to vote 20 percent or more of <br/>
<a id="pl.7.3"></a><var>7.3</var>the outstanding securities of the qualified small business. <br/>
<a id="pl.7.4"></a><var>7.4</var>A member of the family of an individual disqualified by this paragraph is not eligible for a <br/>
<a id="pl.7.5"></a><var>7.5</var>credit under this section. For a married couple filing a joint return, the limitations in this <br/>
<a id="pl.7.6"></a><var>7.6</var>paragraph apply collectively to the investor and spouse. For purposes of determining the <br/>
<a id="pl.7.7"></a><var>7.7</var>ownership interest of an investor under this paragraph, the rules under section 267(c) and <br/>
<a id="pl.7.8"></a><var>7.8</var>267(e) of the Internal Revenue Code apply.<br/>
<a id="pl.7.9"></a><var>7.9</var>(d) Applications for tax credits for 2010 must be made available on the department's <br/>
<a id="pl.7.10"></a><var>7.10</var>Web site by September 1, 2010, and the department must begin accepting applications <br/>
<a id="pl.7.11"></a><var>7.11</var>by September 1, 2010. Applications for subsequent years must be made available by <br/>
<a id="pl.7.12"></a><var>7.12</var>November 1 of the preceding year.<br/>
<a id="pl.7.13"></a><var>7.13</var>(e) Qualified investors and qualified funds must apply to the commissioner for tax <br/>
<a id="pl.7.14"></a><var>7.14</var>credits. Tax credits must be allocated to qualified investors or qualified funds in the order <br/>
<a id="pl.7.15"></a><var>7.15</var>that the tax credit request applications are filed with the department. The commissioner <br/>
<a id="pl.7.16"></a><var>7.16</var>must approve or reject tax credit request applications within 15 days of receiving the <br/>
<a id="pl.7.17"></a><var>7.17</var>application. The commissioner must allocate credits to approved applications if credits <br/>
<a id="pl.7.18"></a><var>7.18</var>remain available. The investment specified in the application must be made within 60 days <br/>
<a id="pl.7.19"></a><var>7.19</var>of the allocation of the credits. If the investment is not made within 60 days, the credit <br/>
<a id="pl.7.20"></a><var>7.20</var>allocation is canceled and available for reallocation. A qualified investor or qualified fund <br/>
<a id="pl.7.21"></a><var>7.21</var>that fails to invest as specified in the application, within 60 days of allocation of the <br/>
<a id="pl.7.22"></a><var>7.22</var>credits, must notify the commissioner of the failure to invest within five business days of <br/>
<a id="pl.7.23"></a><var>7.23</var>the expiration of the 60-day investment period. Credit applications that were approved but <br/>
<a id="pl.7.24"></a><var>7.24</var>that did not receive an allocation of credits at the time of approval because the aggregate <br/>
<a id="pl.7.25"></a><var>7.25</var>limit of credits for the year was exhausted remain eligible for allocation of credits if <br/>
<a id="pl.7.26"></a><var>7.26</var>additional credits become available due to cancellations under this paragraph or due to <br/>
<a id="pl.7.27"></a><var>7.27</var>termination of the time period for credits reserved for investment in qualified greater <br/>
<a id="pl.7.28"></a><var>7.28</var>Minnesota businesses and minority- and women-owned small businesses under paragraph <br/>
<a id="pl.7.29"></a><var>7.29</var>(a). Approved credit applications that do not receive credit allocations in the tax year must <br/>
<a id="pl.7.30"></a><var>7.30</var>be resubmitted to be eligible for credit allocations in the following tax year.<br/>
<a id="pl.7.31"></a><var>7.31</var>(f) All tax credit request applications filed with the department on the same day must <br/>
<a id="pl.7.32"></a><var>7.32</var>be treated as having been filed contemporaneously. If two or more qualified investors or <br/>
<a id="pl.7.33"></a><var>7.33</var>qualified funds file tax credit request applications on the same day, and the aggregate <br/>
<a id="pl.7.34"></a><var>7.34</var>amount of credit allocation claims exceeds the aggregate limit of credits under this section <br/>
<a id="pl.7.35"></a><var>7.35</var>or the lesser amount of credits that remain unallocated on that day, then the credits must <br/>
<a id="pl.7.36"></a><var>7.36</var>be allocated among the qualified investors or qualified funds who filed on that day on a <br/>
<a id="pl.8.1"></a><var>8.1</var>pro rata basis with respect to the amounts claimed. The pro rata allocation for any one <br/>
<a id="pl.8.2"></a><var>8.2</var>qualified investor or qualified fund is the product obtained by multiplying a fraction, <br/>
<a id="pl.8.3"></a><var>8.3</var>the numerator of which is the amount of the credit allocation claim filed on behalf of <br/>
<a id="pl.8.4"></a><var>8.4</var>a qualified investor and the denominator of which is the total of all credit allocation <br/>
<a id="pl.8.5"></a><var>8.5</var>claims filed on behalf of all applicants on that day, by the amount of credits that remain <br/>
<a id="pl.8.6"></a><var>8.6</var>unallocated on that day for the taxable year.<br/>
<a id="pl.8.7"></a><var>8.7</var>(g) A qualified investor or qualified fund, or a qualified small business acting on their <br/>
<a id="pl.8.8"></a><var>8.8</var>behalf, must notify the commissioner when an investment for which credits were allocated <br/>
<a id="pl.8.9"></a><var>8.9</var>has been made, and the taxable year in which the investment was made. A qualified fund <br/>
<a id="pl.8.10"></a><var>8.10</var>must also provide the commissioner with a statement indicating the amount invested by <br/>
<a id="pl.8.11"></a><var>8.11</var>each investor in the qualified fund based on each investor's share of the assets of the <br/>
<a id="pl.8.12"></a><var>8.12</var>qualified fund at the time of the qualified investment. After receiving notification that the <br/>
<a id="pl.8.13"></a><var>8.13</var>investment was made, the commissioner must issue credit certificates for the taxable year <br/>
<a id="pl.8.14"></a><var>8.14</var>in which the investment was made to the qualified investor or, for an investment made by <br/>
<a id="pl.8.15"></a><var>8.15</var>a qualified fund, to each qualified investor who is an investor in the fund. The certificate <br/>
<a id="pl.8.16"></a><var>8.16</var>must state that the credit is subject to revocation if the qualified investor or qualified <br/>
<a id="pl.8.17"></a><var>8.17</var>fund does not hold the investment in the qualified small business for at least three years, <br/>
<a id="pl.8.18"></a><var>8.18</var>consisting of the calendar year in which the investment was made and the two following <br/>
<a id="pl.8.19"></a><var>8.19</var>years. The three-year holding period does not apply if:<br/>
<a id="pl.8.20"></a><var>8.20</var>(1) the investment by the qualified investor or qualified fund becomes worthless <br/>
<a id="pl.8.21"></a><var>8.21</var>before the end of the three-year period;<br/>
<a id="pl.8.22"></a><var>8.22</var>(2) 80 percent or more of the assets of the qualified small business is sold before <br/>
<a id="pl.8.23"></a><var>8.23</var>the end of the three-year period;<br/>
<a id="pl.8.24"></a><var>8.24</var>(3) the qualified small business is sold before the end of the three-year period; or<br/>
<a id="pl.8.25"></a><var>8.25</var>(4) the qualified small business's common stock begins trading on a public exchange <br/>
<a id="pl.8.26"></a><var>8.26</var>before the end of the three-year period. ; or <br/>
<a id="pl.8.27"></a><var>8.27</var>    (5) the qualified investor dies before the end of the three-year period.<br/>
<a id="pl.8.28"></a><var>8.28</var>(h) The commissioner must notify the commissioner of revenue of credit certificates <br/>
<a id="pl.8.29"></a><var>8.29</var>issued under this section.<br/>
<a id="pl.8.30"></a><var>8.30</var><b>EFFECTIVE DATE.</b>Changes to paragraph (a) are effective for taxable years <br/>
<a id="pl.8.31"></a><var>8.31</var>beginning after December 31, 2013. The remainder of the changes are effective for taxable <br/>
<a id="pl.8.32"></a><var>8.32</var>years beginning after December 31, 2014.<br/>
<br/>
<a id="bill.1.4.0"></a><a id="pl.8.33"></a><var>8.33</var>    Sec. 4. Minnesota Statutes 2012, section 116J.8737, subdivision 7, is amended to read:<br/>
<a id="pl.8.34"></a><var>8.34</var>    Subd. 7. <b>Revocation of credits.</b> (a) If the commissioner determines that a <br/>
<a id="pl.8.35"></a><var>8.35</var>qualified investor or qualified fund did not meet the three-year holding period required in <br/>
<a id="pl.9.1"></a><var>9.1</var>subdivision 5, paragraph (g), any credit allocated and certified to the investor or fund is <br/>
<a id="pl.9.2"></a><var>9.2</var>revoked and must be repaid by the investor.<br/>
<a id="pl.9.3"></a><var>9.3</var>(b) If the commissioner determines that a business did not meet the employment <br/>
<a id="pl.9.4"></a><var>9.4</var>and payroll requirements in subdivision 2, paragraph (c), clause (2), or paragraph (h), as <br/>
<a id="pl.9.5"></a><var>9.5</var>applicable, in any of the five calendar years following the year in which an investment in the <br/>
<a id="pl.9.6"></a><var>9.6</var>business that qualified for a tax credit under this section was made, the business must repay <br/>
<a id="pl.9.7"></a><var>9.7</var>the following percentage of the credits allowed for qualified investments in the business:<br/>
<table>
<col width="50px"/>
<col width="15"/>
<col width="17.5"/>
<col width="17.5"/>
<col width="15"/>
<tr>
<td><a id="pl.9.8"></a><var>9.8</var><br/>
</td>
<td align="center" colspan="2">Year following the year in which<br/>
</td>
<td align="center" colspan="2">Percentage of credit required<br/>
</td>
</tr>
<tr>
<td><a id="pl.9.9"></a><var>9.9</var><br/>
</td>
<td align="center" colspan="2">the investment was made:<br/>
</td>
<td align="center" colspan="2">to be repaid:<br/>
</td>
</tr>
<tr>
<td><a id="pl.9.10"></a><var>9.10</var><br/>
</td>
<td></td>
<td>First<br/>
</td>
<td align="right">100%<br/>
</td>
<td></td>
</tr>
<tr>
<td><a id="pl.9.11"></a><var>9.11</var><br/>
</td>
<td></td>
<td>Second<br/>
</td>
<td align="right">80%<br/>
</td>
<td></td>
</tr>
<tr>
<td><a id="pl.9.12"></a><var>9.12</var><br/>
</td>
<td></td>
<td>Third<br/>
</td>
<td align="right">60%<br/>
</td>
<td></td>
</tr>
<tr>
<td><a id="pl.9.13"></a><var>9.13</var><br/>
</td>
<td></td>
<td>Fourth<br/>
</td>
<td align="right">40%<br/>
</td>
<td></td>
</tr>
<tr>
<td><a id="pl.9.14"></a><var>9.14</var><br/>
</td>
<td></td>
<td>Fifth<br/>
</td>
<td align="right">20%<br/>
</td>
<td></td>
</tr>
<tr>
<td><a id="pl.9.15"></a><var>9.15</var><br/>
</td>
<td></td>
<td>Sixth and later<br/>
</td>
<td align="right">0<br/>
</td>
<td></td>
</tr>
</table><a id="pl.9.16"></a><var>9.16</var>(c) The commissioner must notify the commissioner of revenue of every credit <br/>
<a id="pl.9.17"></a><var>9.17</var>revoked and subject to full or partial repayment under this section.<br/>
<a id="pl.9.18"></a><var>9.18</var>(d) For the repayment of credits allowed under this section and section 
         <statute_ref>290.0692</statute_ref>, <br/>
<a id="pl.9.19"></a><var>9.19</var>a qualified small business, qualified investor, or investor in a qualified fund must file an <br/>
<a id="pl.9.20"></a><var>9.20</var>amended return with the commissioner of revenue and pay any amounts required to be <br/>
<a id="pl.9.21"></a><var>9.21</var>repaid within 30 days after becoming subject to repayment under this section.<br/>
<a id="pl.9.22"></a><var>9.22</var><b>EFFECTIVE DATE.</b>This section is effective for taxable years beginning after <br/>
<a id="pl.9.23"></a><var>9.23</var>December 31, 2014.<br/>
<br/>
<a id="bill.1.5.0"></a><a id="pl.9.24"></a><var>9.24</var>    Sec. 5. Minnesota Statutes 2012, section 116J.8737, subdivision 9, is amended to read:<br/>
<a id="pl.9.25"></a><var>9.25</var>    Subd. 9. <b>Report to legislature.</b> Beginning in 2011, the commissioner must <br/>
<a id="pl.9.26"></a><var>9.26</var>annually report by March 15 to the chairs and ranking minority members of the legislative <br/>
<a id="pl.9.27"></a><var>9.27</var>committees having jurisdiction over taxes and economic development in the senate and <br/>
<a id="pl.9.28"></a><var>9.28</var>the house of representatives, in compliance with sections 
         <statute_ref>3.195</statute_ref> and 
         <statute_ref>3.197</statute_ref>, on the tax <br/>
<a id="pl.9.29"></a><var>9.29</var>credits issued under this section. The report must include:<br/>
<a id="pl.9.30"></a><var>9.30</var>(1) the number and amount of the credits issued;<br/>
<a id="pl.9.31"></a><var>9.31</var>(2) the recipients of the credits;<br/>
<a id="pl.9.32"></a><var>9.32</var>(3) for each qualified small business or qualified greater Minnesota business, its <br/>
<a id="pl.9.33"></a><var>9.33</var>location, line of business, and if it received an investment resulting in certification of <br/>
<a id="pl.9.34"></a><var>9.34</var>tax credits;<br/>
<a id="pl.9.35"></a><var>9.35</var>(4) the total amount of investment in each qualified small business resulting in <br/>
<a id="pl.9.36"></a><var>9.36</var>certification of tax credits;<br/>
<a id="pl.10.1"></a><var>10.1</var>(5) for each qualified small business that received investments resulting in tax <br/>
<a id="pl.10.2"></a><var>10.2</var>credits, the total amount of additional investment that did not qualify for the tax credit;<br/>
<a id="pl.10.3"></a><var>10.3</var>(6) the number and amount of credits revoked under subdivision 7;<br/>
<a id="pl.10.4"></a><var>10.4</var>(7) the number and amount of credits that are no longer subject to the three-year <br/>
<a id="pl.10.5"></a><var>10.5</var>holding period because of the exceptions under subdivision 5, paragraph (g), clauses <br/>
<a id="pl.10.6"></a><var>10.6</var>(1) to (4); and<br/>
<a id="pl.10.7"></a><var>10.7</var>(8) any other information relevant to evaluating the effect of these credits.<br/>
<a id="pl.10.8"></a><var>10.8</var><b>EFFECTIVE DATE.</b>This section is effective for reports required to be filed after <br/>
<a id="pl.10.9"></a><var>10.9</var>December 31, 2014.<br/>
<br/>
<a id="bill.1.6.0"></a><a id="pl.10.10"></a><var>10.10</var>    Sec. 6. Minnesota Statutes 2012, section 116J.8737, subdivision 12, is amended to read:<br/>
<a id="pl.10.11"></a><var>10.11</var>    Subd. 12. <b>Sunset.</b> This section expires for taxable years beginning after December <br/>
<a id="pl.10.12"></a><var>10.12</var>31, 2014 2016, except that reporting requirements under subdivision 6 and revocation <br/>
<a id="pl.10.13"></a><var>10.13</var>of credits under subdivision 7 remain in effect through 2016 2018 for qualified <br/>
<a id="pl.10.14"></a><var>10.14</var>investors and qualified funds, and through 2018 2020 for qualified small businesses, <br/>
<a id="pl.10.15"></a><var>10.15</var>reporting requirements under subdivision 9 remain in effect through 2019 2021, and the <br/>
<a id="pl.10.16"></a><var>10.16</var>appropriation in subdivision 11 remains in effect through 2018 2020.<br/>
<a id="pl.10.17"></a><var>10.17</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.1.7.0"></a><a id="pl.10.18"></a><var>10.18</var>    Sec. 7. Minnesota Statutes 2012, section 289A.02, subdivision 7, is amended to read:<br/>
<a id="pl.10.19"></a><var>10.19</var>    Subd. 7. <b>Internal Revenue Code.</b> Unless specifically defined otherwise, "Internal <br/>
<a id="pl.10.20"></a><var>10.20</var>Revenue Code" means the Internal Revenue Code of 1986, as amended through April 14, <br/>
<a id="pl.10.21"></a><var>10.21</var>2011 December 20, 2013.<br/>
<a id="pl.10.22"></a><var>10.22</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.10.23"></a><var>10.23</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.8.0"></a><a id="pl.10.24"></a><var>10.24</var>    Sec. 8. Minnesota Statutes 2012, section 289A.08, subdivision 7, is amended to read:<br/>
<a id="pl.10.25"></a><var>10.25</var>    Subd. 7. <b>Composite income tax returns for nonresident partners, shareholders, </b><br/>
<a id="pl.10.26"></a><var>10.26</var><b>and beneficiaries.</b> (a) The commissioner may allow a partnership with nonresident <br/>
<a id="pl.10.27"></a><var>10.27</var>partners to file a composite return and to pay the tax on behalf of nonresident partners who <br/>
<a id="pl.10.28"></a><var>10.28</var>have no other Minnesota source income. This composite return must include the names, <br/>
<a id="pl.10.29"></a><var>10.29</var>addresses, Social Security numbers, income allocation, and tax liability for the nonresident <br/>
<a id="pl.10.30"></a><var>10.30</var>partners electing to be covered by the composite return.<br/>
<a id="pl.10.31"></a><var>10.31</var>(b) The computation of a partner's tax liability must be determined by multiplying <br/>
<a id="pl.10.32"></a><var>10.32</var>the income allocated to that partner by the highest rate used to determine the tax liability <br/>
<a id="pl.11.1"></a><var>11.1</var>for individuals under section 
         <statute_ref>290.06, subdivision 2c</statute_ref>. Nonbusiness deductions, standard <br/>
<a id="pl.11.2"></a><var>11.2</var>deductions, or personal exemptions are not allowed.<br/>
<a id="pl.11.3"></a><var>11.3</var>(c) The partnership must submit a request to use this composite return filing method <br/>
<a id="pl.11.4"></a><var>11.4</var>for nonresident partners. The requesting partnership must file a composite return in the <br/>
<a id="pl.11.5"></a><var>11.5</var>form prescribed by the commissioner of revenue. The filing of a composite return is <br/>
<a id="pl.11.6"></a><var>11.6</var>considered a request to use the composite return filing method.<br/>
<a id="pl.11.7"></a><var>11.7</var>(d) The electing partner must not have any Minnesota source income other than the <br/>
<a id="pl.11.8"></a><var>11.8</var>income from the partnership and other electing partnerships. If it is determined that the <br/>
<a id="pl.11.9"></a><var>11.9</var>electing partner has other Minnesota source income, the inclusion of the income and tax <br/>
<a id="pl.11.10"></a><var>11.10</var>liability for that partner under this provision will not constitute a return to satisfy the <br/>
<a id="pl.11.11"></a><var>11.11</var>requirements of subdivision 1. The tax paid for the individual as part of the composite return <br/>
<a id="pl.11.12"></a><var>11.12</var>is allowed as a payment of the tax by the individual on the date on which the composite <br/>
<a id="pl.11.13"></a><var>11.13</var>return payment was made. If the electing nonresident partner has no other Minnesota <br/>
<a id="pl.11.14"></a><var>11.14</var>source income, filing of the composite return is a return for purposes of subdivision 1.<br/>
<a id="pl.11.15"></a><var>11.15</var>(e) This subdivision does not negate the requirement that an individual pay estimated <br/>
<a id="pl.11.16"></a><var>11.16</var>tax if the individual's liability would exceed the requirements set forth in section 
         <statute_ref>289A.25</statute_ref>. <br/>
<a id="pl.11.17"></a><var>11.17</var>The individual's liability to pay estimated tax is, however, satisfied when the partnership <br/>
<a id="pl.11.18"></a><var>11.18</var>pays composite estimated tax in the manner prescribed in section 
         <statute_ref>289A.25</statute_ref>.<br/>
<a id="pl.11.19"></a><var>11.19</var>(f) If an electing partner's share of the partnership's gross income from Minnesota <br/>
<a id="pl.11.20"></a><var>11.20</var>sources is less than the filing requirements for a nonresident under this subdivision, the tax <br/>
<a id="pl.11.21"></a><var>11.21</var>liability is zero. However, a statement showing the partner's share of gross income must <br/>
<a id="pl.11.22"></a><var>11.22</var>be included as part of the composite return.<br/>
<a id="pl.11.23"></a><var>11.23</var>(g) The election provided in this subdivision is only available to a partner who has <br/>
<a id="pl.11.24"></a><var>11.24</var>no other Minnesota source income and who is either (1) a full-year nonresident individual <br/>
<a id="pl.11.25"></a><var>11.25</var>or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of <br/>
<a id="pl.11.26"></a><var>11.26</var>the Internal Revenue Code.<br/>
<a id="pl.11.27"></a><var>11.27</var>(h) A corporation defined in section 
         <statute_ref>290.9725</statute_ref> and its nonresident shareholders may <br/>
<a id="pl.11.28"></a><var>11.28</var>make an election under this paragraph. The provisions covering the partnership apply to <br/>
<a id="pl.11.29"></a><var>11.29</var>the corporation and the provisions applying to the partner apply to the shareholder.<br/>
<a id="pl.11.30"></a><var>11.30</var>(i) Estates and trusts distributing current income only and the nonresident individual <br/>
<a id="pl.11.31"></a><var>11.31</var>beneficiaries of the estates or trusts may make an election under this paragraph. The <br/>
<a id="pl.11.32"></a><var>11.32</var>provisions covering the partnership apply to the estate or trust. The provisions applying to <br/>
<a id="pl.11.33"></a><var>11.33</var>the partner apply to the beneficiary.<br/>
<a id="pl.11.34"></a><var>11.34</var>(j) For the purposes of this subdivision, "income" means the partner's share of <br/>
<a id="pl.11.35"></a><var>11.35</var>federal adjusted gross income from the partnership modified by the additions provided in <br/>
<a id="pl.11.36"></a><var>11.36</var>section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clauses (6) to (10) (9), and the subtractions provided in: <br/>
<a id="pl.12.1"></a><var>12.1</var>(i) section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clause (8), to the extent the amount is assignable or <br/>
<a id="pl.12.2"></a><var>12.2</var>allocable to Minnesota under section 
         <statute_ref>290.17</statute_ref>; and (ii) section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, <br/>
<a id="pl.12.3"></a><var>12.3</var>clause (13). The subtraction allowed under section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clause (8), is <br/>
<a id="pl.12.4"></a><var>12.4</var>only allowed on the composite tax computation to the extent the electing partner would <br/>
<a id="pl.12.5"></a><var>12.5</var>have been allowed the subtraction.<br/>
<a id="pl.12.6"></a><var>12.6</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.12.7"></a><var>12.7</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.9.0"></a><a id="pl.12.8"></a><var>12.8</var>    Sec. 9. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 19, is <br/>
<a id="pl.12.9"></a><var>12.9</var>amended to read:<br/>
<a id="pl.12.10"></a><var>12.10</var>    Subd. 19. <b>Net income.</b> The term "net income" means the federal taxable income, <br/>
<a id="pl.12.11"></a><var>12.11</var>as defined in section 63 of the Internal Revenue Code of 1986, as amended through the <br/>
<a id="pl.12.12"></a><var>12.12</var>date named in this subdivision, incorporating the federal effective dates of changes to the <br/>
<a id="pl.12.13"></a><var>12.13</var>Internal Revenue Code and any elections made by the taxpayer in accordance with the <br/>
<a id="pl.12.14"></a><var>12.14</var>Internal Revenue Code in determining federal taxable income for federal income tax <br/>
<a id="pl.12.15"></a><var>12.15</var>purposes, and with the modifications provided in subdivisions 19a to 19f.<br/>
<a id="pl.12.16"></a><var>12.16</var>    In the case of a regulated investment company or a fund thereof, as defined in section <br/>
<a id="pl.12.17"></a><var>12.17</var>851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment <br/>
<a id="pl.12.18"></a><var>12.18</var>company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, <br/>
<a id="pl.12.19"></a><var>12.19</var>except that:<br/>
<a id="pl.12.20"></a><var>12.20</var>    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal <br/>
<a id="pl.12.21"></a><var>12.21</var>Revenue Code does not apply;<br/>
<a id="pl.12.22"></a><var>12.22</var>    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal <br/>
<a id="pl.12.23"></a><var>12.23</var>Revenue Code must be applied by allowing a deduction for capital gain dividends and <br/>
<a id="pl.12.24"></a><var>12.24</var>exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal <br/>
<a id="pl.12.25"></a><var>12.25</var>Revenue Code; and<br/>
<a id="pl.12.26"></a><var>12.26</var>    (3) the deduction for dividends paid must also be applied in the amount of any <br/>
<a id="pl.12.27"></a><var>12.27</var>undistributed capital gains which the regulated investment company elects to have treated <br/>
<a id="pl.12.28"></a><var>12.28</var>as provided in section 852(b)(3)(D) of the Internal Revenue Code.<br/>
<a id="pl.12.29"></a><var>12.29</var>    The net income of a real estate investment trust as defined and limited by section <br/>
<a id="pl.12.30"></a><var>12.30</var>856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust <br/>
<a id="pl.12.31"></a><var>12.31</var>taxable income as defined in section 857(b)(2) of the Internal Revenue Code.<br/>
<a id="pl.12.32"></a><var>12.32</var>    The net income of a designated settlement fund as defined in section 468B(d) of <br/>
<a id="pl.12.33"></a><var>12.33</var>the Internal Revenue Code means the gross income as defined in section 468B(b) of the <br/>
<a id="pl.12.34"></a><var>12.34</var>Internal Revenue Code.<br/>
<a id="pl.13.1"></a><var>13.1</var>    The Internal Revenue Code of 1986, as amended through April 14, 2011 December <br/>
<a id="pl.13.2"></a><var>13.2</var>20, 2013, shall be in effect for taxable years beginning after December 31, 1996, and <br/>
<a id="pl.13.3"></a><var>13.3</var>before January 1, 2012, and for taxable years beginning after December 31, 2012. The <br/>
<a id="pl.13.4"></a><var>13.4</var>Internal Revenue Code of 1986, as amended through January 3, 2013, is in effect for <br/>
<a id="pl.13.5"></a><var>13.5</var>taxable years beginning after December 31, 2011, and before January 1, 2013.<br/>
<a id="pl.13.6"></a><var>13.6</var>The provisions of sections 315 and 331 of the American Taxpayer Relief Act of <br/>
<a id="pl.13.7"></a><var>13.7</var>2012, Public Law 112-240, extension of increased expensing limitations and treatment <br/>
<a id="pl.13.8"></a><var>13.8</var>of certain real property as section 179 property and extension and modification of bonus <br/>
<a id="pl.13.9"></a><var>13.9</var>depreciation, are effective at the same time they become effective for federal purposes.<br/>
<a id="pl.13.10"></a><var>13.10</var>    Except as otherwise provided, references to the Internal Revenue Code in <br/>
<a id="pl.13.11"></a><var>13.11</var>subdivisions 19 to 19f mean the code in effect for purposes of determining net income for <br/>
<a id="pl.13.12"></a><var>13.12</var>the applicable year.<br/>
<a id="pl.13.13"></a><var>13.13</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment, <br/>
<a id="pl.13.14"></a><var>13.14</var>except the changes incorporated by federal changes are effective retroactively at the same <br/>
<a id="pl.13.15"></a><var>13.15</var>time as the changes were effective for federal purposes.<br/>
<br/>
<a id="bill.1.10.0"></a><a id="pl.13.16"></a><var>13.16</var>    Sec. 10. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:<br/>
<a id="pl.13.17"></a><var>13.17</var>    Subd. 19a. <b>Additions to federal taxable income.</b> For individuals, estates, and <br/>
<a id="pl.13.18"></a><var>13.18</var>trusts, there shall be added to federal taxable income:<br/>
<a id="pl.13.19"></a><var>13.19</var>    (1)(i) interest income on obligations of any state other than Minnesota or a political <br/>
<a id="pl.13.20"></a><var>13.20</var>or governmental subdivision, municipality, or governmental agency or instrumentality <br/>
<a id="pl.13.21"></a><var>13.21</var>of any state other than Minnesota exempt from federal income taxes under the Internal <br/>
<a id="pl.13.22"></a><var>13.22</var>Revenue Code or any other federal statute; and<br/>
<a id="pl.13.23"></a><var>13.23</var>    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue <br/>
<a id="pl.13.24"></a><var>13.24</var>Code, except:<br/>
<a id="pl.13.25"></a><var>13.25</var>(A) the portion of the exempt-interest dividends exempt from state taxation under <br/>
<a id="pl.13.26"></a><var>13.26</var>the laws of the United States; and<br/>
<a id="pl.13.27"></a><var>13.27</var>(B) the portion of the exempt-interest dividends derived from interest income <br/>
<a id="pl.13.28"></a><var>13.28</var>on obligations of the state of Minnesota or its political or governmental subdivisions, <br/>
<a id="pl.13.29"></a><var>13.29</var>municipalities, governmental agencies or instrumentalities, but only if the portion of the <br/>
<a id="pl.13.30"></a><var>13.30</var>exempt-interest dividends from such Minnesota sources paid to all shareholders represents <br/>
<a id="pl.13.31"></a><var>13.31</var>95 percent or more of the exempt-interest dividends, including any dividends exempt <br/>
<a id="pl.13.32"></a><var>13.32</var>under subitem (A), that are paid by the regulated investment company as defined in section <br/>
<a id="pl.13.33"></a><var>13.33</var>851(a) of the Internal Revenue Code, or the fund of the regulated investment company as <br/>
<a id="pl.13.34"></a><var>13.34</var>defined in section 851(g) of the Internal Revenue Code, making the payment; and<br/>
<a id="pl.14.1"></a><var>14.1</var>    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal <br/>
<a id="pl.14.2"></a><var>14.2</var>government described in section 7871(c) of the Internal Revenue Code shall be treated as <br/>
<a id="pl.14.3"></a><var>14.3</var>interest income on obligations of the state in which the tribe is located;<br/>
<a id="pl.14.4"></a><var>14.4</var>    (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or <br/>
<a id="pl.14.5"></a><var>14.5</var>accrued within the taxable year under this chapter and the amount of taxes based on net <br/>
<a id="pl.14.6"></a><var>14.6</var>income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state or <br/>
<a id="pl.14.7"></a><var>14.7</var>to any province or territory of Canada, to the extent allowed as a deduction under section <br/>
<a id="pl.14.8"></a><var>14.8</var>63(d) of the Internal Revenue Code, but the addition may not be more than the amount by <br/>
<a id="pl.14.9"></a><var>14.9</var>which the itemized deductions as allowed under section 63(d) of the Internal Revenue <br/>
<a id="pl.14.10"></a><var>14.10</var>Code state itemized deduction exceeds the amount of the standard deduction as defined <br/>
<a id="pl.14.11"></a><var>14.11</var>in section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under <br/>
<a id="pl.14.12"></a><var>14.12</var>sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, minus any addition that <br/>
<a id="pl.14.13"></a><var>14.13</var>would have been required under clause (21) (17) if the taxpayer had claimed the standard <br/>
<a id="pl.14.14"></a><var>14.14</var>deduction. For the purpose of this paragraph, the disallowance of itemized deductions <br/>
<a id="pl.14.15"></a><var>14.15</var>under section 68 of the Internal Revenue Code of 1986 clause, income, sales and use, motor <br/>
<a id="pl.14.16"></a><var>14.16</var>vehicle sales, or excise taxes are the last itemized deductions disallowed under clause (15);<br/>
<a id="pl.14.17"></a><var>14.17</var>    (3) the capital gain amount of a lump-sum distribution to which the special tax under <br/>
<a id="pl.14.18"></a><var>14.18</var>section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;<br/>
<a id="pl.14.19"></a><var>14.19</var>    (4) the amount of income taxes paid or accrued within the taxable year under this <br/>
<a id="pl.14.20"></a><var>14.20</var>chapter and taxes based on net income paid to any other state or any province or territory <br/>
<a id="pl.14.21"></a><var>14.21</var>of Canada, to the extent allowed as a deduction in determining federal adjusted gross <br/>
<a id="pl.14.22"></a><var>14.22</var>income. For the purpose of this paragraph, income taxes do not include the taxes imposed <br/>
<a id="pl.14.23"></a><var>14.23</var>by sections 
         <statute_ref>290.0922, subdivision 1</statute_ref>, paragraph (b), 
         <statute_ref>290.9727</statute_ref>, 
         <statute_ref>290.9728</statute_ref>, and 
         <statute_ref>290.9729</statute_ref>;<br/>
<a id="pl.14.24"></a><var>14.24</var>    (5) the amount of expense, interest, or taxes disallowed pursuant to section 
         <statute_ref>290.10 <br/>
</statute_ref><a id="pl.14.25"></a><var>14.25</var>other than expenses or interest used in computing net interest income for the subtraction <br/>
<a id="pl.14.26"></a><var>14.26</var>allowed under subdivision 19b, clause (1);<br/>
<a id="pl.14.27"></a><var>14.27</var>    (6) the amount of a partner's pro rata share of net income which does not flow <br/>
<a id="pl.14.28"></a><var>14.28</var>through to the partner because the partnership elected to pay the tax on the income under <br/>
<a id="pl.14.29"></a><var>14.29</var>section 6242(a)(2) of the Internal Revenue Code;<br/>
<a id="pl.14.30"></a><var>14.30</var>    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the <br/>
<a id="pl.14.31"></a><var>14.31</var>Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that <br/>
<a id="pl.14.32"></a><var>14.32</var>in the taxable year generates a deduction for depreciation under section 168(k) and the <br/>
<a id="pl.14.33"></a><var>14.33</var>activity generates a loss for the taxable year that the taxpayer is not allowed to claim for <br/>
<a id="pl.14.34"></a><var>14.34</var>the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is <br/>
<a id="pl.14.35"></a><var>14.35</var>limited to excess of the depreciation claimed by the activity under section 168(k) over the <br/>
<a id="pl.14.36"></a><var>14.36</var>amount of the loss from the activity that is not allowed in the taxable year. In succeeding <br/>
<a id="pl.15.1"></a><var>15.1</var>taxable years when the losses not allowed in the taxable year are allowed, the depreciation <br/>
<a id="pl.15.2"></a><var>15.2</var>under section 168(k) is allowed;<br/>
<a id="pl.15.3"></a><var>15.3</var>    (8) 80 percent of the amount by which the deduction allowed by section 179 of the <br/>
<a id="pl.15.4"></a><var>15.4</var>Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal <br/>
<a id="pl.15.5"></a><var>15.5</var>Revenue Code of 1986, as amended through December 31, 2003;<br/>
<a id="pl.15.6"></a><var>15.6</var>    (9) to the extent deducted in computing federal taxable income, the amount of the <br/>
<a id="pl.15.7"></a><var>15.7</var>deduction allowable under section 199 of the Internal Revenue Code;<br/>
<a id="pl.15.8"></a><var>15.8</var>    (10) for taxable years beginning before January 1, 2013, the exclusion allowed under <br/>
<a id="pl.15.9"></a><var>15.9</var>section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;<br/>
<a id="pl.15.10"></a><var>15.10</var>(11) the amount of expenses disallowed under section 290.10, subdivision 2;<br/>
<a id="pl.15.11"></a><var>15.11</var>    (12) (11) for taxable years beginning before January 1, 2010, the amount deducted <br/>
<a id="pl.15.12"></a><var>15.12</var>for qualified tuition and related expenses under section 222 of the Internal Revenue Code, <br/>
<a id="pl.15.13"></a><var>15.13</var>to the extent deducted from gross income;<br/>
<a id="pl.15.14"></a><var>15.14</var>    (13) (12) for taxable years beginning before January 1, 2010, the amount deducted <br/>
<a id="pl.15.15"></a><var>15.15</var>for certain expenses of elementary and secondary school teachers under section <br/>
<a id="pl.15.16"></a><var>15.16</var>62(a)(2)(D) of the Internal Revenue Code, to the extent deducted from gross income;<br/>
<a id="pl.15.17"></a><var>15.17</var>(14) the additional standard deduction for property taxes payable that is allowable <br/>
<a id="pl.15.18"></a><var>15.18</var>under section 63(c)(1)(C) of the Internal Revenue Code;<br/>
<a id="pl.15.19"></a><var>15.19</var>(15) the additional standard deduction for qualified motor vehicle sales taxes <br/>
<a id="pl.15.20"></a><var>15.20</var>allowable under section 63(c)(1)(E) of the Internal Revenue Code;<br/>
<a id="pl.15.21"></a><var>15.21</var>(16) (13) discharge of indebtedness income resulting from reacquisition of business <br/>
<a id="pl.15.22"></a><var>15.22</var>indebtedness and deferred under section 108(i) of the Internal Revenue Code;<br/>
<a id="pl.15.23"></a><var>15.23</var>(17) the amount of unemployment compensation exempt from tax under section <br/>
<a id="pl.15.24"></a><var>15.24</var>85(c) of the Internal Revenue Code;<br/>
<a id="pl.15.25"></a><var>15.25</var>(18) (14) changes to federal taxable income attributable to a net operating loss that <br/>
<a id="pl.15.26"></a><var>15.26</var>the taxpayer elected to carry back for more than two years for federal purposes but for <br/>
<a id="pl.15.27"></a><var>15.27</var>which the losses can be carried back for only two years under section 
         <statute_ref>290.095, subdivision <br/>
<a id="pl.15.28"></a><var>15.28</var>11
         </statute_ref>, paragraph (c);<br/>
<a id="pl.15.29"></a><var>15.29</var>(19) (15) to the extent included in the computation of federal taxable income in <br/>
<a id="pl.15.30"></a><var>15.30</var>taxable years beginning after December 31, 2010, the amount of disallowed itemized <br/>
<a id="pl.15.31"></a><var>15.31</var>deductions, but the amount of disallowed itemized deductions plus the addition required <br/>
<a id="pl.15.32"></a><var>15.32</var>under clause (2) may not be more than the amount by which the itemized deductions as <br/>
<a id="pl.15.33"></a><var>15.33</var>allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the <br/>
<a id="pl.15.34"></a><var>15.34</var>standard deduction as defined in section 63(c) of the Internal Revenue Code, disregarding <br/>
<a id="pl.15.35"></a><var>15.35</var>the amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue <br/>
<a id="pl.16.1"></a><var>16.1</var>Code, and reduced by any addition that would have been required under clause (21) (17) if <br/>
<a id="pl.16.2"></a><var>16.2</var>the taxpayer had claimed the standard deduction:<br/>
<a id="pl.16.3"></a><var>16.3</var>(i) the amount of disallowed itemized deductions is equal to the lesser of:<br/>
<a id="pl.16.4"></a><var>16.4</var>(A) three percent of the excess of the taxpayer's federal adjusted gross income <br/>
<a id="pl.16.5"></a><var>16.5</var>over the applicable amount; or<br/>
<a id="pl.16.6"></a><var>16.6</var>(B) 80 percent of the amount of the itemized deductions otherwise allowable to the <br/>
<a id="pl.16.7"></a><var>16.7</var>taxpayer under the Internal Revenue Code for the taxable year;<br/>
<a id="pl.16.8"></a><var>16.8</var>(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a <br/>
<a id="pl.16.9"></a><var>16.9</var>married individual filing a separate return. Each dollar amount shall be increased by <br/>
<a id="pl.16.10"></a><var>16.10</var>an amount equal to:<br/>
<a id="pl.16.11"></a><var>16.11</var>(A) such dollar amount, multiplied by<br/>
<a id="pl.16.12"></a><var>16.12</var>(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal <br/>
<a id="pl.16.13"></a><var>16.13</var>Revenue Code for the calendar year in which the taxable year begins, by substituting <br/>
<a id="pl.16.14"></a><var>16.14</var>"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;<br/>
<a id="pl.16.15"></a><var>16.15</var>(iii) the term "itemized deductions" does not include:<br/>
<a id="pl.16.16"></a><var>16.16</var>(A) the deduction for medical expenses under section 213 of the Internal Revenue <br/>
<a id="pl.16.17"></a><var>16.17</var>Code;<br/>
<a id="pl.16.18"></a><var>16.18</var>(B) any deduction for investment interest as defined in section 163(d) of the Internal <br/>
<a id="pl.16.19"></a><var>16.19</var>Revenue Code; and<br/>
<a id="pl.16.20"></a><var>16.20</var>(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or <br/>
<a id="pl.16.21"></a><var>16.21</var>theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue <br/>
<a id="pl.16.22"></a><var>16.22</var>Code or for losses described in section 165(d) of the Internal Revenue Code;<br/>
<a id="pl.16.23"></a><var>16.23</var>(20) (16) to the extent included in federal taxable income in taxable years beginning <br/>
<a id="pl.16.24"></a><var>16.24</var>after December 31, 2010, the amount of disallowed personal exemptions for taxpayers <br/>
<a id="pl.16.25"></a><var>16.25</var>with federal adjusted gross income over the threshold amount:<br/>
<a id="pl.16.26"></a><var>16.26</var>(i) the disallowed personal exemption amount is equal to the dollar amount of the <br/>
<a id="pl.16.27"></a><var>16.27</var>personal exemptions claimed by the taxpayer in the computation of federal taxable income <br/>
<a id="pl.16.28"></a><var>16.28</var>multiplied by the applicable percentage;<br/>
<a id="pl.16.29"></a><var>16.29</var>(ii) "applicable percentage" means two percentage points for each $2,500 (or <br/>
<a id="pl.16.30"></a><var>16.30</var>fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable <br/>
<a id="pl.16.31"></a><var>16.31</var>year exceeds the threshold amount. In the case of a married individual filing a separate <br/>
<a id="pl.16.32"></a><var>16.32</var>return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In <br/>
<a id="pl.16.33"></a><var>16.33</var>no event shall the applicable percentage exceed 100 percent;<br/>
<a id="pl.16.34"></a><var>16.34</var>(iii) the term "threshold amount" means:<br/>
<a id="pl.16.35"></a><var>16.35</var>(A) $150,000 in the case of a joint return or a surviving spouse;<br/>
<a id="pl.16.36"></a><var>16.36</var>(B) $125,000 in the case of a head of a household;<br/>
<a id="pl.17.1"></a><var>17.1</var>(C) $100,000 in the case of an individual who is not married and who is not a <br/>
<a id="pl.17.2"></a><var>17.2</var>surviving spouse or head of a household; and<br/>
<a id="pl.17.3"></a><var>17.3</var>(D) $75,000 in the case of a married individual filing a separate return; and<br/>
<a id="pl.17.4"></a><var>17.4</var>(iv) the thresholds shall be increased by an amount equal to:<br/>
<a id="pl.17.5"></a><var>17.5</var>(A) such dollar amount, multiplied by<br/>
<a id="pl.17.6"></a><var>17.6</var>(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal <br/>
<a id="pl.17.7"></a><var>17.7</var>Revenue Code for the calendar year in which the taxable year begins, by substituting <br/>
<a id="pl.17.8"></a><var>17.8</var>"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and<br/>
<a id="pl.17.9"></a><var>17.9</var>(21) (17) to the extent deducted in the computation of federal taxable income, for <br/>
<a id="pl.17.10"></a><var>17.10</var>taxable years beginning after December 31, 2010, and before January 1, 2013 2014, the <br/>
<a id="pl.17.11"></a><var>17.11</var>difference between the standard deduction allowed under section 63(c) of the Internal <br/>
<a id="pl.17.12"></a><var>17.12</var>Revenue Code and the standard deduction allowed for 2011 and, 2012, and 2013 under the <br/>
<a id="pl.17.13"></a><var>17.13</var>Internal Revenue Code as amended through December 1, 2010.<br/>
<a id="pl.17.14"></a><var>17.14</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.17.15"></a><var>17.15</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.11.0"></a><a id="pl.17.16"></a><var>17.16</var>    Sec. 11. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 19b, <br/>
<a id="pl.17.17"></a><var>17.17</var>is amended to read:<br/>
<a id="pl.17.18"></a><var>17.18</var>    Subd. 19b. <b>Subtractions from federal taxable income.</b> For individuals, estates, <br/>
<a id="pl.17.19"></a><var>17.19</var>and trusts, there shall be subtracted from federal taxable income:<br/>
<a id="pl.17.20"></a><var>17.20</var>    (1) net interest income on obligations of any authority, commission, or <br/>
<a id="pl.17.21"></a><var>17.21</var>instrumentality of the United States to the extent includable in taxable income for federal <br/>
<a id="pl.17.22"></a><var>17.22</var>income tax purposes but exempt from state income tax under the laws of the United States;<br/>
<a id="pl.17.23"></a><var>17.23</var>    (2) if included in federal taxable income, the amount of any overpayment of income <br/>
<a id="pl.17.24"></a><var>17.24</var>tax to Minnesota or to any other state, for any previous taxable year, whether the amount <br/>
<a id="pl.17.25"></a><var>17.25</var>is received as a refund or as a credit to another taxable year's income tax liability;<br/>
<a id="pl.17.26"></a><var>17.26</var>    (3) the amount paid to others, less the amount used to claim the credit allowed under <br/>
<a id="pl.17.27"></a><var>17.27</var>section 
         <statute_ref>290.0674</statute_ref>, not to exceed $1,625 for each qualifying child in grades kindergarten <br/>
<a id="pl.17.28"></a><var>17.28</var>to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and <br/>
<a id="pl.17.29"></a><var>17.29</var>transportation of each qualifying child in attending an elementary or secondary school <br/>
<a id="pl.17.30"></a><var>17.30</var>situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a <br/>
<a id="pl.17.31"></a><var>17.31</var>resident of this state may legally fulfill the state's compulsory attendance laws, which <br/>
<a id="pl.17.32"></a><var>17.32</var>is not operated for profit, and which adheres to the provisions of the Civil Rights Act <br/>
<a id="pl.17.33"></a><var>17.33</var>of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or <br/>
<a id="pl.17.34"></a><var>17.34</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.17.35"></a><var>17.35</var>"textbooks" includes books and other instructional materials and equipment purchased <br/>
<a id="pl.18.1"></a><var>18.1</var>or leased for use in elementary and secondary schools in teaching only those subjects <br/>
<a id="pl.18.2"></a><var>18.2</var>legally and commonly taught in public elementary and secondary schools in this state. <br/>
<a id="pl.18.3"></a><var>18.3</var>Equipment expenses qualifying for deduction includes expenses as defined and limited in <br/>
<a id="pl.18.4"></a><var>18.4</var>section 
         <statute_ref>290.0674, subdivision 1</statute_ref>, clause (3). "Textbooks" does not include instructional <br/>
<a id="pl.18.5"></a><var>18.5</var>books and materials used in the teaching of religious tenets, doctrines, or worship, the <br/>
<a id="pl.18.6"></a><var>18.6</var>purpose of which is to instill such tenets, doctrines, or worship, nor does it include books <br/>
<a id="pl.18.7"></a><var>18.7</var>or materials for, or transportation to, extracurricular activities including sporting events, <br/>
<a id="pl.18.8"></a><var>18.8</var>musical or dramatic events, speech activities, driver's education, or similar programs. No <br/>
<a id="pl.18.9"></a><var>18.9</var>deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or <br/>
<a id="pl.18.10"></a><var>18.10</var>the qualifying child's vehicle to provide such transportation for a qualifying child. For <br/>
<a id="pl.18.11"></a><var>18.11</var>purposes of the subtraction provided by this clause, "qualifying child" has the meaning <br/>
<a id="pl.18.12"></a><var>18.12</var>given in section 32(c)(3) of the Internal Revenue Code;<br/>
<a id="pl.18.13"></a><var>18.13</var>    (4) income as provided under section 
         <statute_ref>290.0802</statute_ref>;<br/>
<a id="pl.18.14"></a><var>18.14</var>    (5) to the extent included in federal adjusted gross income, income realized on <br/>
<a id="pl.18.15"></a><var>18.15</var>disposition of property exempt from tax under section 
         <statute_ref>290.491</statute_ref>;<br/>
<a id="pl.18.16"></a><var>18.16</var>    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) <br/>
<a id="pl.18.17"></a><var>18.17</var>of the Internal Revenue Code in determining federal taxable income by an individual <br/>
<a id="pl.18.18"></a><var>18.18</var>who does not itemize deductions for federal income tax purposes for the taxable year, an <br/>
<a id="pl.18.19"></a><var>18.19</var>amount equal to 50 percent of the excess of charitable contributions over $500 allowable <br/>
<a id="pl.18.20"></a><var>18.20</var>as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, <br/>
<a id="pl.18.21"></a><var>18.21</var>under the provisions of Public Law 109-1 and Public Law 111-126;<br/>
<a id="pl.18.22"></a><var>18.22</var>    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not <br/>
<a id="pl.18.23"></a><var>18.23</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.18.24"></a><var>18.24</var>of subnational foreign taxes for the taxable year, but not to exceed the total subnational <br/>
<a id="pl.18.25"></a><var>18.25</var>foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, <br/>
<a id="pl.18.26"></a><var>18.26</var>"federal foreign tax credit" means the credit allowed under section 27 of the Internal <br/>
<a id="pl.18.27"></a><var>18.27</var>Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed <br/>
<a id="pl.18.28"></a><var>18.28</var>under section 904(c) of the Internal Revenue Code minus national level foreign taxes to <br/>
<a id="pl.18.29"></a><var>18.29</var>the extent they exceed the federal foreign tax credit;<br/>
<a id="pl.18.30"></a><var>18.30</var>    (8) in each of the five tax years immediately following the tax year in which an <br/>
<a id="pl.18.31"></a><var>18.31</var>addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a <br/>
<a id="pl.18.32"></a><var>18.32</var>shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the <br/>
<a id="pl.18.33"></a><var>18.33</var>delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount <br/>
<a id="pl.18.34"></a><var>18.34</var>of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c, <br/>
<a id="pl.18.35"></a><var>18.35</var>clause (12), in the case of a shareholder of an S corporation, minus the positive value of <br/>
<a id="pl.19.1"></a><var>19.1</var>any net operating loss under section 172 of the Internal Revenue Code generated for the <br/>
<a id="pl.19.2"></a><var>19.2</var>tax year of the addition. The resulting delayed depreciation cannot be less than zero;<br/>
<a id="pl.19.3"></a><var>19.3</var>    (9) job opportunity building zone income as provided under section 
         <statute_ref>469.316</statute_ref>;<br/>
<a id="pl.19.4"></a><var>19.4</var>    (10) to the extent included in federal taxable income, the amount of compensation <br/>
<a id="pl.19.5"></a><var>19.5</var>paid to members of the Minnesota National Guard or other reserve components of the <br/>
<a id="pl.19.6"></a><var>19.6</var>United States military for active service, excluding compensation for services performed <br/>
<a id="pl.19.7"></a><var>19.7</var>under the Active Guard Reserve (AGR) program. For purposes of this clause, "active <br/>
<a id="pl.19.8"></a><var>19.8</var>service" means (i) state active service as defined in section 
         <statute_ref>190.05, subdivision 5a</statute_ref>, clause <br/>
<a id="pl.19.9"></a><var>19.9</var>(1); or (ii) federally funded state active service as defined in section 
         <statute_ref>190.05, subdivision <br/>
<a id="pl.19.10"></a><var>19.10</var>5b
         </statute_ref>, but "active service" excludes service performed in accordance with section 
         <statute_ref>190.08, <br/>
<a id="pl.19.11"></a><var>19.11</var>subdivision 3
         </statute_ref>;<br/>
<a id="pl.19.12"></a><var>19.12</var>    (11) to the extent included in federal taxable income, the amount of compensation <br/>
<a id="pl.19.13"></a><var>19.13</var>paid to Minnesota residents who are members of the armed forces of the United States <br/>
<a id="pl.19.14"></a><var>19.14</var>or United Nations for active duty performed under United States Code, title 10; or the <br/>
<a id="pl.19.15"></a><var>19.15</var>authority of the United Nations;<br/>
<a id="pl.19.16"></a><var>19.16</var>    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a <br/>
<a id="pl.19.17"></a><var>19.17</var>qualified donor's donation, while living, of one or more of the qualified donor's organs <br/>
<a id="pl.19.18"></a><var>19.18</var>to another person for human organ transplantation. For purposes of this clause, "organ" <br/>
<a id="pl.19.19"></a><var>19.19</var>means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; <br/>
<a id="pl.19.20"></a><var>19.20</var>"human organ transplantation" means the medical procedure by which transfer of a human <br/>
<a id="pl.19.21"></a><var>19.21</var>organ is made from the body of one person to the body of another person; "qualified <br/>
<a id="pl.19.22"></a><var>19.22</var>expenses" means unreimbursed expenses for both the individual and the qualified donor <br/>
<a id="pl.19.23"></a><var>19.23</var>for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses <br/>
<a id="pl.19.24"></a><var>19.24</var>may be subtracted under this clause only once; and "qualified donor" means the individual <br/>
<a id="pl.19.25"></a><var>19.25</var>or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An <br/>
<a id="pl.19.26"></a><var>19.26</var>individual may claim the subtraction in this clause for each instance of organ donation for <br/>
<a id="pl.19.27"></a><var>19.27</var>transplantation during the taxable year in which the qualified expenses occur;<br/>
<a id="pl.19.28"></a><var>19.28</var>    (13) in each of the five tax years immediately following the tax year in which an <br/>
<a id="pl.19.29"></a><var>19.29</var>addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a <br/>
<a id="pl.19.30"></a><var>19.30</var>shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the <br/>
<a id="pl.19.31"></a><var>19.31</var>addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the <br/>
<a id="pl.19.32"></a><var>19.32</var>case of a shareholder of a corporation that is an S corporation, minus the positive value of <br/>
<a id="pl.19.33"></a><var>19.33</var>any net operating loss under section 172 of the Internal Revenue Code generated for the <br/>
<a id="pl.19.34"></a><var>19.34</var>tax year of the addition. If the net operating loss exceeds the addition for the tax year, a <br/>
<a id="pl.19.35"></a><var>19.35</var>subtraction is not allowed under this clause;<br/>
<a id="pl.20.1"></a><var>20.1</var>    (14) to the extent included in the federal taxable income of a nonresident of <br/>
<a id="pl.20.2"></a><var>20.2</var>Minnesota, compensation paid to a service member as defined in United States Code, title <br/>
<a id="pl.20.3"></a><var>20.3</var>10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief <br/>
<a id="pl.20.4"></a><var>20.4</var>Act, Public Law 108-189, section 101(2);<br/>
<a id="pl.20.5"></a><var>20.5</var>    (15) to the extent included in federal taxable income, the amount of national service <br/>
<a id="pl.20.6"></a><var>20.6</var>educational awards received from the National Service Trust under United States Code, <br/>
<a id="pl.20.7"></a><var>20.7</var>title 42, sections 12601 to 12604, for service in an approved Americorps National Service <br/>
<a id="pl.20.8"></a><var>20.8</var>program;<br/>
<a id="pl.20.9"></a><var>20.9</var>(16) to the extent included in federal taxable income, discharge of indebtedness <br/>
<a id="pl.20.10"></a><var>20.10</var>income resulting from reacquisition of business indebtedness included in federal taxable <br/>
<a id="pl.20.11"></a><var>20.11</var>income under section 108(i) of the Internal Revenue Code. This subtraction applies only <br/>
<a id="pl.20.12"></a><var>20.12</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.20.13"></a><var>20.13</var>addition under section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clause (16) (13);<br/>
<a id="pl.20.14"></a><var>20.14</var>(17) the amount of the net operating loss allowed under section 
         <statute_ref>290.095, subdivision <br/>
<a id="pl.20.15"></a><var>20.15</var>11
         </statute_ref>, paragraph (c); and<br/>
<a id="pl.20.16"></a><var>20.16</var>(18) the amount of expenses not allowed for federal income tax purposes due <br/>
<a id="pl.20.17"></a><var>20.17</var>to claiming the railroad track maintenance credit under section 45G(a) of the Internal <br/>
<a id="pl.20.18"></a><var>20.18</var>Revenue Code.;<br/>
<a id="pl.20.19"></a><var>20.19</var>(19) the amount of the limitation on itemized deductions under section 68(b) of <br/>
<a id="pl.20.20"></a><var>20.20</var>the Internal Revenue Code; and<br/>
<a id="pl.20.21"></a><var>20.21</var>(20) the amount of the phaseout of personal exemptions under section 151(d) of the <br/>
<a id="pl.20.22"></a><var>20.22</var>Internal Revenue Code.<br/>
<a id="pl.20.23"></a><var>20.23</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.20.24"></a><var>20.24</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.12.0"></a><a id="pl.20.25"></a><var>20.25</var>    Sec. 12. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision <br/>
<a id="pl.20.26"></a><var>20.26</var>to read:<br/>
<a id="pl.20.27"></a><var>20.27</var>    Subd. 29a. <b>State itemized deduction.</b> "State itemized deduction" means <br/>
<a id="pl.20.28"></a><var>20.28</var>federal itemized deductions, as defined in section 63(d) of the Internal Revenue Code, <br/>
<a id="pl.20.29"></a><var>20.29</var>disregarding any limitation under section 68 of the Internal Revenue Code, and reduced <br/>
<a id="pl.20.30"></a><var>20.30</var>by the amount of the addition required under subdivision 19a, clause (15).<br/>
<a id="pl.20.31"></a><var>20.31</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.20.32"></a><var>20.32</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.13.0"></a><a id="pl.21.1"></a><var>21.1</var>    Sec. 13. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 31, is <br/>
<a id="pl.21.2"></a><var>21.2</var>amended to read:<br/>
<a id="pl.21.3"></a><var>21.3</var>    Subd. 31. <b>Internal Revenue Code.</b> Unless specifically defined otherwise, for <br/>
<a id="pl.21.4"></a><var>21.4</var>taxable years beginning before January 1, 2012, and after December 31, 2012, "Internal <br/>
<a id="pl.21.5"></a><var>21.5</var>Revenue Code" means the Internal Revenue Code of 1986, as amended through April 14, <br/>
<a id="pl.21.6"></a><var>21.6</var>2011; and for taxable years beginning after December 31, 2011, and before January 1, <br/>
<a id="pl.21.7"></a><var>21.7</var>2013, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended <br/>
<a id="pl.21.8"></a><var>21.8</var>through January 3 December 20, 2013. Internal Revenue Code also includes any <br/>
<a id="pl.21.9"></a><var>21.9</var>uncodified provision in federal law that relates to provisions of the Internal Revenue <br/>
<a id="pl.21.10"></a><var>21.10</var>Code that are incorporated into Minnesota law. When used in this chapter, the reference <br/>
<a id="pl.21.11"></a><var>21.11</var>to "subtitle A, chapter 1, subchapter N, part 1, of the Internal Revenue Code" is to the <br/>
<a id="pl.21.12"></a><var>21.12</var>Internal Revenue Code as amended through March 18, 2010.<br/>
<a id="pl.21.13"></a><var>21.13</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment, <br/>
<a id="pl.21.14"></a><var>21.14</var>except the changes incorporated by federal changes are effective retroactively at the same <br/>
<a id="pl.21.15"></a><var>21.15</var>time the changes were effective for federal purposes.<br/>
<br/>
<a id="bill.1.14.0"></a><a id="pl.21.16"></a><var>21.16</var>    Sec. 14. Minnesota Statutes 2013 Supplement, section 290.06, subdivision 2c, is <br/>
<a id="pl.21.17"></a><var>21.17</var>amended to read:<br/>
<a id="pl.21.18"></a><var>21.18</var>    Subd. 2c. <b>Schedules of rates for individuals, estates, and trusts.</b> (a) The income <br/>
<a id="pl.21.19"></a><var>21.19</var>taxes imposed by this chapter upon married individuals filing joint returns and surviving <br/>
<a id="pl.21.20"></a><var>21.20</var>spouses as defined in section 2(a) of the Internal Revenue Code must be computed by <br/>
<a id="pl.21.21"></a><var>21.21</var>applying to their taxable net income the following schedule of rates:<br/>
<a id="pl.21.22"></a><var>21.22</var>    (1) On the first $35,480, 5.35 percent;<br/>
<a id="pl.21.23"></a><var>21.23</var>    (2) On all over $35,480, but not over $140,960, 7.05 percent;<br/>
<a id="pl.21.24"></a><var>21.24</var>    (3) On all over $140,960, but not over $250,000, 7.85 percent;<br/>
<a id="pl.21.25"></a><var>21.25</var>(4) On all over $250,000, 9.85 percent.<br/>
<a id="pl.21.26"></a><var>21.26</var>    Married individuals filing separate returns, estates, and trusts must compute their <br/>
<a id="pl.21.27"></a><var>21.27</var>income tax by applying the above rates to their taxable income, except that the income <br/>
<a id="pl.21.28"></a><var>21.28</var>brackets will be one-half of the above amounts.<br/>
<a id="pl.21.29"></a><var>21.29</var>    (b) The income taxes imposed by this chapter upon unmarried individuals must be <br/>
<a id="pl.21.30"></a><var>21.30</var>computed by applying to taxable net income the following schedule of rates:<br/>
<a id="pl.21.31"></a><var>21.31</var>    (1) On the first $24,270, 5.35 percent;<br/>
<a id="pl.21.32"></a><var>21.32</var>    (2) On all over $24,270, but not over $79,730, 7.05 percent;<br/>
<a id="pl.21.33"></a><var>21.33</var>    (3) On all over $79,730, but not over $150,000, 7.85 percent;<br/>
<a id="pl.21.34"></a><var>21.34</var>(4) On all over $150,000, 9.85 percent.<br/>
<a id="pl.22.1"></a><var>22.1</var>    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying <br/>
<a id="pl.22.2"></a><var>22.2</var>as a head of household as defined in section 2(b) of the Internal Revenue Code must be <br/>
<a id="pl.22.3"></a><var>22.3</var>computed by applying to taxable net income the following schedule of rates:<br/>
<a id="pl.22.4"></a><var>22.4</var>    (1) On the first $29,880, 5.35 percent;<br/>
<a id="pl.22.5"></a><var>22.5</var>    (2) On all over $29,880, but not over $120,070, 7.05 percent;<br/>
<a id="pl.22.6"></a><var>22.6</var>    (3) On all over $120,070, but not over $200,000, 7.85 percent;<br/>
<a id="pl.22.7"></a><var>22.7</var>(4) On all over $200,000, 9.85 percent.<br/>
<a id="pl.22.8"></a><var>22.8</var>    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the <br/>
<a id="pl.22.9"></a><var>22.9</var>tax of any individual taxpayer whose taxable net income for the taxable year is less than <br/>
<a id="pl.22.10"></a><var>22.10</var>an amount determined by the commissioner must be computed in accordance with tables <br/>
<a id="pl.22.11"></a><var>22.11</var>prepared and issued by the commissioner of revenue based on income brackets of not <br/>
<a id="pl.22.12"></a><var>22.12</var>more than $100. The amount of tax for each bracket shall be computed at the rates set <br/>
<a id="pl.22.13"></a><var>22.13</var>forth in this subdivision, provided that the commissioner may disregard a fractional part of <br/>
<a id="pl.22.14"></a><var>22.14</var>a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.<br/>
<a id="pl.22.15"></a><var>22.15</var>    (e) An individual who is not a Minnesota resident for the entire year must compute <br/>
<a id="pl.22.16"></a><var>22.16</var>the individual's Minnesota income tax as provided in this subdivision. After the <br/>
<a id="pl.22.17"></a><var>22.17</var>application of the nonrefundable credits provided in this chapter, the tax liability must <br/>
<a id="pl.22.18"></a><var>22.18</var>then be multiplied by a fraction in which:<br/>
<a id="pl.22.19"></a><var>22.19</var>    (1) the numerator is the individual's Minnesota source federal adjusted gross income <br/>
<a id="pl.22.20"></a><var>22.20</var>as defined in section 62 of the Internal Revenue Code and increased by the additions <br/>
<a id="pl.22.21"></a><var>22.21</var>required under section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clauses (1), (5), (6), (7), (8), (9), (12), <br/>
<a id="pl.22.22"></a><var>22.22</var>(13), and (16) to (18) and (11) to (14), and reduced by the Minnesota assignable portion of <br/>
<a id="pl.22.23"></a><var>22.23</var>the subtraction for United States government interest under section 
         <statute_ref>290.01, subdivision <br/>
<a id="pl.22.24"></a><var>22.24</var>19b
         </statute_ref>, clause (1), and the subtractions under section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clauses (8), <br/>
<a id="pl.22.25"></a><var>22.25</var>(9), (13), (14), (16), and (17), after applying the allocation and assignability provisions of <br/>
<a id="pl.22.26"></a><var>22.26</var>section 
         <statute_ref>290.081</statute_ref>, clause (a), or 
         <statute_ref>290.17</statute_ref>; and<br/>
<a id="pl.22.27"></a><var>22.27</var>    (2) the denominator is the individual's federal adjusted gross income as defined in <br/>
<a id="pl.22.28"></a><var>22.28</var>section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in <br/>
<a id="pl.22.29"></a><var>22.29</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.22.30"></a><var>22.30</var>(18) and (11) to (14), and reduced by the amounts specified in section 
         <statute_ref>290.01, subdivision <br/>
<a id="pl.22.31"></a><var>22.31</var>19b
         </statute_ref>, clauses (1), (8), (9), (13), (14), (16), and (17).<br/>
<a id="pl.22.32"></a><var>22.32</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.22.33"></a><var>22.33</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.15.0"></a><a id="pl.22.34"></a><var>22.34</var>    Sec. 15. Minnesota Statutes 2012, section 290.067, subdivision 1, is amended to read:<br/>
<a id="pl.23.1"></a><var>23.1</var>    Subdivision 1. <b>Amount of credit.</b> (a) A taxpayer may take as a credit against the <br/>
<a id="pl.23.2"></a><var>23.2</var>tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the <br/>
<a id="pl.23.3"></a><var>23.3</var>dependent care credit for which the taxpayer is eligible pursuant to the provisions of <br/>
<a id="pl.23.4"></a><var>23.4</var>section 21 of the Internal Revenue Code subject to the limitations provided in subdivision <br/>
<a id="pl.23.5"></a><var>23.5</var>2 except that in determining whether the child qualified as a dependent, income received <br/>
<a id="pl.23.6"></a><var>23.6</var>as a Minnesota family investment program grant or allowance to or on behalf of the child <br/>
<a id="pl.23.7"></a><var>23.7</var>must not be taken into account in determining whether the child received more than half <br/>
<a id="pl.23.8"></a><var>23.8</var>of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of <br/>
<a id="pl.23.9"></a><var>23.9</var>the Internal Revenue Code do not apply.<br/>
<a id="pl.23.10"></a><var>23.10</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.23.11"></a><var>23.11</var>is cared for at a licensed family day care home operated by the child's parent, the taxpayer <br/>
<a id="pl.23.12"></a><var>23.12</var>is deemed to have paid employment-related expenses. If the child is 16 months old or <br/>
<a id="pl.23.13"></a><var>23.13</var>younger at the close of the taxable year, the amount of expenses deemed to have been paid <br/>
<a id="pl.23.14"></a><var>23.14</var>equals the maximum limit for one qualified individual under section 21(c) and (d) of the <br/>
<a id="pl.23.15"></a><var>23.15</var>Internal Revenue Code. If the child is older than 16 months of age but has not attained the <br/>
<a id="pl.23.16"></a><var>23.16</var>age of six years at the close of the taxable year, the amount of expenses deemed to have <br/>
<a id="pl.23.17"></a><var>23.17</var>been paid equals the amount the licensee would charge for the care of a child of the same <br/>
<a id="pl.23.18"></a><var>23.18</var>age for the same number of hours of care.<br/>
<a id="pl.23.19"></a><var>23.19</var>(c) If a married couple:<br/>
<a id="pl.23.20"></a><var>23.20</var>(1) has a child who has not attained the age of one year at the close of the taxable year;<br/>
<a id="pl.23.21"></a><var>23.21</var>(2) files a joint tax return for the taxable year; and<br/>
<a id="pl.23.22"></a><var>23.22</var>(3) does not participate in a dependent care assistance program as defined in section <br/>
<a id="pl.23.23"></a><var>23.23</var>129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid <br/>
<a id="pl.23.24"></a><var>23.24</var>for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of <br/>
<a id="pl.23.25"></a><var>23.25</var>(i) the combined earned income of the couple or (ii) the amount of the maximum limit for <br/>
<a id="pl.23.26"></a><var>23.26</var>one qualified individual under section 21(c) and (d) of the Internal Revenue Code will <br/>
<a id="pl.23.27"></a><var>23.27</var>be deemed to be the employment related expense paid for that child. The earned income <br/>
<a id="pl.23.28"></a><var>23.28</var>limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed <br/>
<a id="pl.23.29"></a><var>23.29</var>amount. These deemed amounts apply regardless of whether any employment-related <br/>
<a id="pl.23.30"></a><var>23.30</var>expenses have been paid.<br/>
<a id="pl.23.31"></a><var>23.31</var>(d) If the taxpayer is not required and does not file a federal individual income tax <br/>
<a id="pl.23.32"></a><var>23.32</var>return for the tax year, no credit is allowed for any amount paid to any person unless:<br/>
<a id="pl.23.33"></a><var>23.33</var>(1) the name, address, and taxpayer identification number of the person are included <br/>
<a id="pl.23.34"></a><var>23.34</var>on the return claiming the credit; or<br/>
<a id="pl.24.1"></a><var>24.1</var>(2) if the person is an organization described in section 501(c)(3) of the Internal <br/>
<a id="pl.24.2"></a><var>24.2</var>Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code, <br/>
<a id="pl.24.3"></a><var>24.3</var>the name and address of the person are included on the return claiming the credit.<br/>
<a id="pl.24.4"></a><var>24.4</var>In the case of a failure to provide the information required under the preceding sentence, <br/>
<a id="pl.24.5"></a><var>24.5</var>the preceding sentence does not apply if it is shown that the taxpayer exercised due <br/>
<a id="pl.24.6"></a><var>24.6</var>diligence in attempting to provide the information required.<br/>
<a id="pl.24.7"></a><var>24.7</var>(e) In the case of a nonresident, part-year resident, or a person who has earned <br/>
<a id="pl.24.8"></a><var>24.8</var>income not subject to tax under this chapter including earned income excluded pursuant to <br/>
<a id="pl.24.9"></a><var>24.9</var>section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clause (9), the credit determined under section 21 of the <br/>
<a id="pl.24.10"></a><var>24.10</var>Internal Revenue Code must be allocated based on the ratio by which the earned income <br/>
<a id="pl.24.11"></a><var>24.11</var>of the claimant and the claimant's spouse from Minnesota sources bears to the total earned <br/>
<a id="pl.24.12"></a><var>24.12</var>income of the claimant and the claimant's spouse.<br/>
<a id="pl.24.13"></a><var>24.13</var>(f) For residents of Minnesota, the subtractions for military pay under section <br/>
<statute_ref><a id="pl.24.14"></a><var>24.14</var>290.01, subdivision 19b
         </statute_ref>, clauses (10) and (11), are not considered "earned income not <br/>
<a id="pl.24.15"></a><var>24.15</var>subject to tax under this chapter."<br/>
<a id="pl.24.16"></a><var>24.16</var>(g) For residents of Minnesota, the exclusion of combat pay under section 112 of <br/>
<a id="pl.24.17"></a><var>24.17</var>the Internal Revenue Code is not considered "earned income not subject to tax under <br/>
<a id="pl.24.18"></a><var>24.18</var>this chapter."<br/>
<a id="pl.24.19"></a><var>24.19</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.24.20"></a><var>24.20</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.16.0"></a><a id="pl.24.21"></a><var>24.21</var>    Sec. 16. Minnesota Statutes 2012, section 290.067, subdivision 2a, is amended to read:<br/>
<a id="pl.24.22"></a><var>24.22</var>    Subd. 2a. <b>Income.</b> (a) For purposes of this section, "income" means the sum of <br/>
<a id="pl.24.23"></a><var>24.23</var>the following:<br/>
<a id="pl.24.24"></a><var>24.24</var>(1) federal adjusted gross income as defined in section 62 of the Internal Revenue <br/>
<a id="pl.24.25"></a><var>24.25</var>Code; and<br/>
<a id="pl.24.26"></a><var>24.26</var>(2) the sum of the following amounts to the extent not included in clause (1):<br/>
<a id="pl.24.27"></a><var>24.27</var>(i) all nontaxable income;<br/>
<a id="pl.24.28"></a><var>24.28</var>(ii) the amount of a passive activity loss that is not disallowed as a result of section <br/>
<a id="pl.24.29"></a><var>24.29</var>469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity <br/>
<a id="pl.24.30"></a><var>24.30</var>loss carryover allowed under section 469(b) of the Internal Revenue Code;<br/>
<a id="pl.24.31"></a><var>24.31</var>(iii) an amount equal to the total of any discharge of qualified farm indebtedness <br/>
<a id="pl.24.32"></a><var>24.32</var>of a solvent individual excluded from gross income under section 108(g) of the Internal <br/>
<a id="pl.24.33"></a><var>24.33</var>Revenue Code;<br/>
<a id="pl.24.34"></a><var>24.34</var>(iv) cash public assistance and relief;<br/>
<a id="pl.25.1"></a><var>25.1</var>(v) any pension or annuity (including railroad retirement benefits, all payments <br/>
<a id="pl.25.2"></a><var>25.2</var>received under the federal Social Security Act, supplemental security income, and veterans <br/>
<a id="pl.25.3"></a><var>25.3</var>benefits), which was not exclusively funded by the claimant or spouse, or which was <br/>
<a id="pl.25.4"></a><var>25.4</var>funded exclusively by the claimant or spouse and which funding payments were excluded <br/>
<a id="pl.25.5"></a><var>25.5</var>from federal adjusted gross income in the years when the payments were made;<br/>
<a id="pl.25.6"></a><var>25.6</var>(vi) interest received from the federal or a state government or any instrumentality <br/>
<a id="pl.25.7"></a><var>25.7</var>or political subdivision thereof;<br/>
<a id="pl.25.8"></a><var>25.8</var>(vii) workers' compensation;<br/>
<a id="pl.25.9"></a><var>25.9</var>(viii) nontaxable strike benefits;<br/>
<a id="pl.25.10"></a><var>25.10</var>(ix) the gross amounts of payments received in the nature of disability income or <br/>
<a id="pl.25.11"></a><var>25.11</var>sick pay as a result of accident, sickness, or other disability, whether funded through <br/>
<a id="pl.25.12"></a><var>25.12</var>insurance or otherwise;<br/>
<a id="pl.25.13"></a><var>25.13</var>(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of <br/>
<a id="pl.25.14"></a><var>25.14</var>1986, as amended through December 31, 1995;<br/>
<a id="pl.25.15"></a><var>25.15</var>(xi) contributions made by the claimant to an individual retirement account, <br/>
<a id="pl.25.16"></a><var>25.16</var>including a qualified voluntary employee contribution; simplified employee pension plan; <br/>
<a id="pl.25.17"></a><var>25.17</var>self-employed retirement plan; cash or deferred arrangement plan under section 401(k) <br/>
<a id="pl.25.18"></a><var>25.18</var>of the Internal Revenue Code; or deferred compensation plan under section 457 of the <br/>
<a id="pl.25.19"></a><var>25.19</var>Internal Revenue Code;<br/>
<a id="pl.25.20"></a><var>25.20</var>(xii) nontaxable scholarship or fellowship grants;<br/>
<a id="pl.25.21"></a><var>25.21</var>(xiii) the amount of deduction allowed under section 199 of the Internal Revenue <br/>
<a id="pl.25.22"></a><var>25.22</var>Code;<br/>
<a id="pl.25.23"></a><var>25.23</var>(xiv) the amount of deduction allowed under section 220 or 223 of the Internal <br/>
<a id="pl.25.24"></a><var>25.24</var>Revenue Code;<br/>
<a id="pl.25.25"></a><var>25.25</var>(xv) the amount of deducted for tuition expenses required to be added to income <br/>
<a id="pl.25.26"></a><var>25.26</var>under section 
<statute_ref>290.01, subdivision 19a</statute_ref>, clause (12) under section 222 of the Internal <br/>
<a id="pl.25.27"></a><var>25.27</var>Revenue Code; and<br/>
<a id="pl.25.28"></a><var>25.28</var>(xvi) the amount deducted for certain expenses of elementary and secondary school <br/>
<a id="pl.25.29"></a><var>25.29</var>teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.<br/>
<a id="pl.25.30"></a><var>25.30</var>(xvii) unemployment compensation.<br/>
<a id="pl.25.31"></a><var>25.31</var>In the case of an individual who files an income tax return on a fiscal year basis, the <br/>
<a id="pl.25.32"></a><var>25.32</var>term "federal adjusted gross income" means federal adjusted gross income reflected in the <br/>
<a id="pl.25.33"></a><var>25.33</var>fiscal year ending in the next calendar year. Federal adjusted gross income may not be <br/>
<a id="pl.25.34"></a><var>25.34</var>reduced by the amount of a net operating loss carryback or carryforward or a capital loss <br/>
<a id="pl.25.35"></a><var>25.35</var>carryback or carryforward allowed for the year.<br/>
<a id="pl.25.36"></a><var>25.36</var>(b) "Income" does not include:<br/>
<a id="pl.26.1"></a><var>26.1</var>(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;<br/>
<a id="pl.26.2"></a><var>26.2</var>(2) amounts of any pension or annuity that were exclusively funded by the claimant <br/>
<a id="pl.26.3"></a><var>26.3</var>or spouse if the funding payments were not excluded from federal adjusted gross income <br/>
<a id="pl.26.4"></a><var>26.4</var>in the years when the payments were made;<br/>
<a id="pl.26.5"></a><var>26.5</var>(3) surplus food or other relief in kind supplied by a governmental agency;<br/>
<a id="pl.26.6"></a><var>26.6</var>(4) relief granted under chapter 290A;<br/>
<a id="pl.26.7"></a><var>26.7</var>(5) child support payments received under a temporary or final decree of dissolution <br/>
<a id="pl.26.8"></a><var>26.8</var>or legal separation; and<br/>
<a id="pl.26.9"></a><var>26.9</var>(6) restitution payments received by eligible individuals and excludable interest as <br/>
<a id="pl.26.10"></a><var>26.10</var>defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of <br/>
<a id="pl.26.11"></a><var>26.11</var>2001, Public Law 107-16.<br/>
<a id="pl.26.12"></a><var>26.12</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.26.13"></a><var>26.13</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.17.0"></a><a id="pl.26.14"></a><var>26.14</var>    Sec. 17. Minnesota Statutes 2012, section 290.067, is amended by adding a subdivision <br/>
<a id="pl.26.15"></a><var>26.15</var>to read:<br/>
<a id="pl.26.16"></a><var>26.16</var>    Subd. 2c. <b>Dependent care credit; temporary definition.</b> For taxable years <br/>
<a id="pl.26.17"></a><var>26.17</var>beginning after December 31, 2012, and before January 1, 2014, for purposes of this <br/>
<a id="pl.26.18"></a><var>26.18</var>section, "section 21 of the Internal Revenue Code" means section 21 of the Internal <br/>
<a id="pl.26.19"></a><var>26.19</var>Revenue Code as amended through June 1, 2001.<br/>
<a id="pl.26.20"></a><var>26.20</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.26.21"></a><var>26.21</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.18.0"></a><a id="pl.26.22"></a><var>26.22</var>    Sec. 18. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:<br/>
<a id="pl.26.23"></a><var>26.23</var>    Subdivision 1. <b>Credit allowed.</b> (a) An individual is allowed a credit against the tax <br/>
<a id="pl.26.24"></a><var>26.24</var>imposed by this chapter equal to a percentage of earned income. To receive a credit, a <br/>
<a id="pl.26.25"></a><var>26.25</var>taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.<br/>
<a id="pl.26.26"></a><var>26.26</var>(b) For individuals with no qualifying children, the credit equals 1.9125 2.10 percent <br/>
<a id="pl.26.27"></a><var>26.27</var>of the first $4,620 $6,180 of earned income. The credit is reduced by 1.9125 2.01 percent <br/>
<a id="pl.26.28"></a><var>26.28</var>of earned income or adjusted gross income, whichever is greater, in excess of $5,770<br/>
<a id="pl.26.29"></a><var>26.29</var> $8,130, but in no case is the credit less than zero.<br/>
<a id="pl.26.30"></a><var>26.30</var>(c) For individuals with one qualifying child, the credit equals 8.5 9.35 percent of <br/>
<a id="pl.26.31"></a><var>26.31</var>the first $6,920 $11,120 of earned income and 8.5 percent of earned income over $12,080 <br/>
<a id="pl.26.32"></a><var>26.32</var>but less than $13,450. The credit is reduced by 5.73 6.02 percent of earned income or <br/>
<a id="pl.27.1"></a><var>27.1</var>adjusted gross income, whichever is greater, in excess of $15,080 $21,190, but in no <br/>
<a id="pl.27.2"></a><var>27.2</var>case is the credit less than zero.<br/>
<a id="pl.27.3"></a><var>27.3</var>(d) For individuals with two or more qualifying children, the credit equals ten 11<br/>
<a id="pl.27.4"></a><var>27.4</var> percent of the first $9,720 $18,240 of earned income and 20 percent of earned income <br/>
<a id="pl.27.5"></a><var>27.5</var>over $14,860 but less than $16,800. The credit is reduced by 10.3 10.82 percent of earned <br/>
<a id="pl.27.6"></a><var>27.6</var>income or adjusted gross income, whichever is greater, in excess of $17,890 $25,130, <br/>
<a id="pl.27.7"></a><var>27.7</var>but in no case is the credit less than zero.<br/>
<a id="pl.27.8"></a><var>27.8</var>(e) For a nonresident or part-year resident, the credit must be allocated based on the <br/>
<a id="pl.27.9"></a><var>27.9</var>percentage calculated under section 
         <statute_ref>290.06, subdivision 2c</statute_ref>, paragraph (e).<br/>
<a id="pl.27.10"></a><var>27.10</var>(f) For a person who was a resident for the entire tax year and has earned income <br/>
<a id="pl.27.11"></a><var>27.11</var>not subject to tax under this chapter, including income excluded under section 
         <statute_ref>290.01, <br/>
<a id="pl.27.12"></a><var>27.12</var>subdivision 19b
         </statute_ref>, clause (9), the credit must be allocated based on the ratio of federal <br/>
<a id="pl.27.13"></a><var>27.13</var>adjusted gross income reduced by the earned income not subject to tax under this chapter <br/>
<a id="pl.27.14"></a><var>27.14</var>over federal adjusted gross income. For purposes of this paragraph, the subtractions <br/>
<a id="pl.27.15"></a><var>27.15</var>for military pay under section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clauses (10) and (11), are not <br/>
<a id="pl.27.16"></a><var>27.16</var>considered "earned income not subject to tax under this chapter."<br/>
<a id="pl.27.17"></a><var>27.17</var>For the purposes of this paragraph, the exclusion of combat pay under section 112 <br/>
<a id="pl.27.18"></a><var>27.18</var>of the Internal Revenue Code is not considered "earned income not subject to tax under <br/>
<a id="pl.27.19"></a><var>27.19</var>this chapter."<br/>
<a id="pl.27.20"></a><var>27.20</var>(g) For tax years beginning after December 31, 2007, and before December 31, 2010, <br/>
<a id="pl.27.21"></a><var>27.21</var>and for tax years beginning after December 31, 2017, the $5,770 $8,130 in paragraph <br/>
<a id="pl.27.22"></a><var>27.22</var>(b), the $15,080 $21,190 in paragraph (c), and the $17,890 $25,130 in paragraph (d), <br/>
<a id="pl.27.23"></a><var>27.23</var>after being adjusted for inflation under subdivision 7, are each increased by $3,000 for <br/>
<a id="pl.27.24"></a><var>27.24</var>married taxpayers filing joint returns. For tax years beginning after December 31, 2008, <br/>
<a id="pl.27.25"></a><var>27.25</var>the commissioner shall annually adjust the $3,000 by the percentage determined pursuant <br/>
<a id="pl.27.26"></a><var>27.26</var>to the provisions of section 1(f) of the Internal Revenue Code, except that in section <br/>
<a id="pl.27.27"></a><var>27.27</var>1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009, the <br/>
<a id="pl.27.28"></a><var>27.28</var>commissioner shall then determine the percent change from the 12 months ending on <br/>
<a id="pl.27.29"></a><var>27.29</var>August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent <br/>
<a id="pl.27.30"></a><var>27.30</var>year, from the 12 months ending on August 31, 2007, to the 12 months ending on August <br/>
<a id="pl.27.31"></a><var>27.31</var>31 of the year preceding the taxable year. The earned income thresholds as adjusted <br/>
<a id="pl.27.32"></a><var>27.32</var>for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount <br/>
<a id="pl.27.33"></a><var>27.33</var>is rounded up to the nearest $10. The determination of the commissioner under this <br/>
<a id="pl.27.34"></a><var>27.34</var>subdivision is not a rule under the Administrative Procedure Act.<br/>
<a id="pl.27.35"></a><var>27.35</var>(h) For tax years beginning after December 31, 2010, and before January 1, 2012,(1) <br/>
<a id="pl.27.36"></a><var>27.36</var>For tax years beginning after December 31, 2012, and before January 1, 2014, the $5,770 <br/>
<a id="pl.28.1"></a><var>28.1</var>in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph (d), after <br/>
<a id="pl.28.2"></a><var>28.2</var>being adjusted for inflation under subdivision 7, are increased by $5,340 for married <br/>
<a id="pl.28.3"></a><var>28.3</var>taxpayers filing joint returns; and (2) for tax years beginning after December 31, 2013, <br/>
<a id="pl.28.4"></a><var>28.4</var>and before January 1, 2018, the $5,770 $8,130 in paragraph (b), the $15,080 $21,190<br/>
<a id="pl.28.5"></a><var>28.5</var> in paragraph (c), and the $17,890 $25,130 in paragraph (d), after being adjusted for <br/>
<a id="pl.28.6"></a><var>28.6</var>inflation under subdivision 7, are each increased by $5,000 for married taxpayers filing <br/>
<a id="pl.28.7"></a><var>28.7</var>joint returns. For tax years beginning after December 31, 2010, and before January <br/>
<a id="pl.28.8"></a><var>28.8</var>1, 2012, and for tax years beginning after December 31, 2013, and before January 1, <br/>
<a id="pl.28.9"></a><var>28.9</var>2018, the commissioner shall annually adjust the $5,000 by the percentage determined <br/>
<a id="pl.28.10"></a><var>28.10</var>pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in <br/>
<a id="pl.28.11"></a><var>28.11</var>section 1(f)(3)(B), the word "2008" shall be substituted for the word "1992." For 2011, <br/>
<a id="pl.28.12"></a><var>28.12</var>the commissioner shall then determine the percent change from the 12 months ending on <br/>
<a id="pl.28.13"></a><var>28.13</var>August 31, 2008, to the 12 months ending on August 31, 2010, and in each subsequent <br/>
<a id="pl.28.14"></a><var>28.14</var>year, from the 12 months ending on August 31, 2008, to the 12 months ending on August <br/>
<a id="pl.28.15"></a><var>28.15</var>31 of the year preceding the taxable year. The earned income thresholds as adjusted <br/>
<a id="pl.28.16"></a><var>28.16</var>for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount <br/>
<a id="pl.28.17"></a><var>28.17</var>is rounded up to the nearest $10. The determination of the commissioner under this <br/>
<a id="pl.28.18"></a><var>28.18</var>subdivision is not a rule under the Administrative Procedure Act.<br/>
<a id="pl.28.19"></a><var>28.19</var>(i) The commissioner shall construct tables showing the amount of the credit at <br/>
<a id="pl.28.20"></a><var>28.20</var>various income levels and make them available to taxpayers. The tables shall follow <br/>
<a id="pl.28.21"></a><var>28.21</var>the schedule contained in this subdivision, except that the commissioner may graduate <br/>
<a id="pl.28.22"></a><var>28.22</var>the transition between income brackets.<br/>
<a id="pl.28.23"></a><var>28.23</var><b>EFFECTIVE DATE.</b>This section is effective for taxable years beginning after <br/>
<a id="pl.28.24"></a><var>28.24</var>December 31, 2013, except that the changes in paragraph (h), clause (1), are effective <br/>
<a id="pl.28.25"></a><var>28.25</var>retroactively for taxable years beginning after December 31, 2012, and before January <br/>
<a id="pl.28.26"></a><var>28.26</var>1, 2014.<br/>
<br/>
<a id="bill.1.19.0"></a><a id="pl.28.27"></a><var>28.27</var>    Sec. 19. Minnesota Statutes 2012, section 290.0671, subdivision 7, is amended to read:<br/>
<a id="pl.28.28"></a><var>28.28</var>    Subd. 7. <b>Inflation adjustment.</b> The earned income amounts used to calculate <br/>
<a id="pl.28.29"></a><var>28.29</var>the credit and the income thresholds at which the maximum credit begins to be reduced <br/>
<a id="pl.28.30"></a><var>28.30</var>in subdivision 1 must be adjusted for inflation. The commissioner shall adjust by the <br/>
<a id="pl.28.31"></a><var>28.31</var>percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue <br/>
<a id="pl.28.32"></a><var>28.32</var>Code, except that in section 1(f)(3)(B) the word "1999" "2013" shall be substituted for <br/>
<a id="pl.28.33"></a><var>28.33</var>the word "1992." For 2001 2015, the commissioner shall then determine the percent <br/>
<a id="pl.28.34"></a><var>28.34</var>change from the 12 months ending on August 31, 1999 2013, to the 12 months ending <br/>
<a id="pl.28.35"></a><var>28.35</var>on August 31, 2000 2014, and in each subsequent year, from the 12 months ending on <br/>
<a id="pl.29.1"></a><var>29.1</var>August 31, 1999 2013, to the 12 months ending on August 31 of the year preceding the <br/>
<a id="pl.29.2"></a><var>29.2</var>taxable year. The earned income thresholds as adjusted for inflation must be rounded to <br/>
<a id="pl.29.3"></a><var>29.3</var>the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest <br/>
<a id="pl.29.4"></a><var>29.4</var>$10 amount. The determination of the commissioner under this subdivision is not a rule <br/>
<a id="pl.29.5"></a><var>29.5</var>under the Administrative Procedure Act.<br/>
<a id="pl.29.6"></a><var>29.6</var><b>EFFECTIVE DATE.</b>This section is effective for taxable years beginning after <br/>
<a id="pl.29.7"></a><var>29.7</var>December 31, 2014.<br/>
<br/>
<a id="bill.1.20.0"></a><a id="pl.29.8"></a><var>29.8</var>    Sec. 20. Minnesota Statutes 2012, section 290.0675, subdivision 1, is amended to read:<br/>
<a id="pl.29.9"></a><var>29.9</var>    Subdivision 1. <b>Definitions.</b> (a) For purposes of this section the following terms <br/>
<a id="pl.29.10"></a><var>29.10</var>have the meanings given.<br/>
<a id="pl.29.11"></a><var>29.11</var>(b) "Earned income" means the sum of the following, to the extent included in <br/>
<a id="pl.29.12"></a><var>29.12</var>Minnesota taxable income:<br/>
<a id="pl.29.13"></a><var>29.13</var>(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;<br/>
<a id="pl.29.14"></a><var>29.14</var>(2) income received from a retirement pension, profit-sharing, stock bonus, or <br/>
<a id="pl.29.15"></a><var>29.15</var>annuity plan; and<br/>
<a id="pl.29.16"></a><var>29.16</var>(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue <br/>
<a id="pl.29.17"></a><var>29.17</var>Code.<br/>
<a id="pl.29.18"></a><var>29.18</var>(c) "Taxable income" means net income as defined in section 
         <statute_ref>290.01, subdivision 19</statute_ref>.<br/>
<a id="pl.29.19"></a><var>29.19</var>(d) "Earned income of lesser-earning spouse" means the earned income of the spouse <br/>
<a id="pl.29.20"></a><var>29.20</var>with the lesser amount of earned income as defined in paragraph (b) for the taxable year <br/>
<a id="pl.29.21"></a><var>29.21</var>minus the sum of (i) the amount for one exemption under section 151(d) of the Internal <br/>
<a id="pl.29.22"></a><var>29.22</var>Revenue Code and (ii) one-half the amount of the standard deduction under section <br/>
<a id="pl.29.23"></a><var>29.23</var>63(c)(2)(A) and (4) of the Internal Revenue Code minus one-half of any addition required <br/>
<a id="pl.29.24"></a><var>29.24</var>under section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clause (21) (17), and one-half of the addition that <br/>
<a id="pl.29.25"></a><var>29.25</var>would have been required under section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clause (21) (17), if the <br/>
<a id="pl.29.26"></a><var>29.26</var>taxpayer had claimed the standard deduction.<br/>
<a id="pl.29.27"></a><var>29.27</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.29.28"></a><var>29.28</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.21.0"></a><a id="pl.29.29"></a><var>29.29</var>    Sec. 21. Minnesota Statutes 2013 Supplement, section 290.091, subdivision 2, is <br/>
<a id="pl.29.30"></a><var>29.30</var>amended to read:<br/>
<a id="pl.29.31"></a><var>29.31</var>    Subd. 2. <b>Definitions.</b> For purposes of the tax imposed by this section, the following <br/>
<a id="pl.29.32"></a><var>29.32</var>terms have the meanings given:<br/>
<a id="pl.30.1"></a><var>30.1</var>    (a) "Alternative minimum taxable income" means the sum of the following for <br/>
<a id="pl.30.2"></a><var>30.2</var>the taxable year:<br/>
<a id="pl.30.3"></a><var>30.3</var>    (1) the taxpayer's federal alternative minimum taxable income as defined in section <br/>
<a id="pl.30.4"></a><var>30.4</var>55(b)(2) of the Internal Revenue Code;<br/>
<a id="pl.30.5"></a><var>30.5</var>    (2) the taxpayer's itemized deductions allowed in computing federal alternative <br/>
<a id="pl.30.6"></a><var>30.6</var>minimum taxable income, but excluding:<br/>
<a id="pl.30.7"></a><var>30.7</var>    (i) the charitable contribution deduction under section 170 of the Internal Revenue <br/>
<a id="pl.30.8"></a><var>30.8</var>Code;<br/>
<a id="pl.30.9"></a><var>30.9</var>    (ii) the medical expense deduction;<br/>
<a id="pl.30.10"></a><var>30.10</var>    (iii) the casualty, theft, and disaster loss deduction; and<br/>
<a id="pl.30.11"></a><var>30.11</var>    (iv) the impairment-related work expenses of a disabled person;<br/>
<a id="pl.30.12"></a><var>30.12</var>    (3) for depletion allowances computed under section 613A(c) of the Internal <br/>
<a id="pl.30.13"></a><var>30.13</var>Revenue Code, with respect to each property (as defined in section 614 of the Internal <br/>
<a id="pl.30.14"></a><var>30.14</var>Revenue Code), to the extent not included in federal alternative minimum taxable income, <br/>
<a id="pl.30.15"></a><var>30.15</var>the excess of the deduction for depletion allowable under section 611 of the Internal <br/>
<a id="pl.30.16"></a><var>30.16</var>Revenue Code for the taxable year over the adjusted basis of the property at the end of the <br/>
<a id="pl.30.17"></a><var>30.17</var>taxable year (determined without regard to the depletion deduction for the taxable year);<br/>
<a id="pl.30.18"></a><var>30.18</var>    (4) to the extent not included in federal alternative minimum taxable income, the <br/>
<a id="pl.30.19"></a><var>30.19</var>amount of the tax preference for intangible drilling cost under section 57(a)(2) of the <br/>
<a id="pl.30.20"></a><var>30.20</var>Internal Revenue Code determined without regard to subparagraph (E);<br/>
<a id="pl.30.21"></a><var>30.21</var>    (5) to the extent not included in federal alternative minimum taxable income, the <br/>
<a id="pl.30.22"></a><var>30.22</var>amount of interest income as provided by section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clause (1); and<br/>
<a id="pl.30.23"></a><var>30.23</var>    (6) the amount of addition required by section 
         <statute_ref>290.01, subdivision 19a</statute_ref>, clauses (7) <br/>
<a id="pl.30.24"></a><var>30.24</var>to (9), (12), (13), and (16) to (18) and (11) to (14);<br/>
<a id="pl.30.25"></a><var>30.25</var>    less the sum of the amounts determined under the following:<br/>
<a id="pl.30.26"></a><var>30.26</var>    (1) interest income as defined in section 
         <statute_ref>290.01, subdivision 19b</statute_ref>, clause (1);<br/>
<a id="pl.30.27"></a><var>30.27</var>    (2) an overpayment of state income tax as provided by section 
         <statute_ref>290.01, subdivision <br/>
<a id="pl.30.28"></a><var>30.28</var>19b
         </statute_ref>, clause (2), to the extent included in federal alternative minimum taxable income;<br/>
<a id="pl.30.29"></a><var>30.29</var>    (3) the amount of investment interest paid or accrued within the taxable year on <br/>
<a id="pl.30.30"></a><var>30.30</var>indebtedness to the extent that the amount does not exceed net investment income, as <br/>
<a id="pl.30.31"></a><var>30.31</var>defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include <br/>
<a id="pl.30.32"></a><var>30.32</var>amounts deducted in computing federal adjusted gross income;<br/>
<a id="pl.30.33"></a><var>30.33</var>    (4) amounts subtracted from federal taxable income as provided by section 
         <statute_ref>290.01, <br/>
<a id="pl.30.34"></a><var>30.34</var>subdivision 19b
         </statute_ref>, clauses (6), (8) to (14), and (16); and<br/>
<a id="pl.30.35"></a><var>30.35</var>(5) the amount of the net operating loss allowed under section 
         <statute_ref>290.095, subdivision <br/>
<a id="pl.30.36"></a><var>30.36</var>11
         </statute_ref>, paragraph (c).<br/>
<a id="pl.31.1"></a><var>31.1</var>    In the case of an estate or trust, alternative minimum taxable income must be <br/>
<a id="pl.31.2"></a><var>31.2</var>computed as provided in section 59(c) of the Internal Revenue Code.<br/>
<a id="pl.31.3"></a><var>31.3</var>    (b) "Investment interest" means investment interest as defined in section 163(d)(3) <br/>
<a id="pl.31.4"></a><var>31.4</var>of the Internal Revenue Code.<br/>
<a id="pl.31.5"></a><var>31.5</var>    (c) "Net minimum tax" means the minimum tax imposed by this section.<br/>
<a id="pl.31.6"></a><var>31.6</var>    (d) "Regular tax" means the tax that would be imposed under this chapter (without <br/>
<a id="pl.31.7"></a><var>31.7</var>regard to this section and section 290.032), reduced by the sum of the nonrefundable <br/>
<a id="pl.31.8"></a><var>31.8</var>credits allowed under this chapter.<br/>
<a id="pl.31.9"></a><var>31.9</var>    (e) "Tentative minimum tax" equals 
         <statute_ref>6.75</statute_ref> percent of alternative minimum taxable <br/>
<a id="pl.31.10"></a><var>31.10</var>income after subtracting the exemption amount determined under subdivision 3.<br/>
<a id="pl.31.11"></a><var>31.11</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for taxable years <br/>
<a id="pl.31.12"></a><var>31.12</var>beginning after December 31, 2012.<br/>
<br/>
<a id="bill.1.22.0"></a><a id="pl.31.13"></a><var>31.13</var>    Sec. 22. Minnesota Statutes 2013 Supplement, section 290A.03, subdivision 15, <br/>
<a id="pl.31.14"></a><var>31.14</var>is amended to read:<br/>
<a id="pl.31.15"></a><var>31.15</var>    Subd. 15. <b>Internal Revenue Code.</b> For taxable years beginning before January 1, <br/>
<a id="pl.31.16"></a><var>31.16</var>2012, and after December 31, 2012, "Internal Revenue Code" means the Internal Revenue <br/>
<a id="pl.31.17"></a><var>31.17</var>Code of 1986, as amended through April 14, 2011; and for taxable years beginning after <br/>
<a id="pl.31.18"></a><var>31.18</var>December 31, 2011, and before January 1, 2013, "Internal Revenue Code" means the <br/>
<a id="pl.31.19"></a><var>31.19</var>Internal Revenue Code of 1986, as amended through January 3 December 20, 2013.<br/>
<a id="pl.31.20"></a><var>31.20</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for property tax refunds <br/>
<a id="pl.31.21"></a><var>31.21</var>based on property taxes payable after December 31, 2013, and rent paid after December <br/>
<a id="pl.31.22"></a><var>31.22</var>31, 2012.<br/>
<br/>
<a id="bill.1.23.0"></a><a id="pl.31.23"></a><var>31.23</var>    Sec. 23. <b>INDIVIDUAL INCOME TAX COLLECTION ACTION PROHIBITED.</b><br/>
<a id="pl.31.24"></a><var>31.24</var>Notwithstanding any law to the contrary, the commissioner shall not increase the <br/>
<a id="pl.31.25"></a><var>31.25</var>amount due or decrease the refund for an individual income tax return for the taxable <br/>
<a id="pl.31.26"></a><var>31.26</var>year beginning after December 31, 2012, and before January 1, 2014, to the extent the <br/>
<a id="pl.31.27"></a><var>31.27</var>amount due was understated or the refund was overstated because the taxpayer calculated <br/>
<a id="pl.31.28"></a><var>31.28</var>the tax or refund based on the Internal Revenue Code, as amended through April 14, <br/>
<a id="pl.31.29"></a><var>31.29</var>2011, rather than based on the Internal Revenue Code, as amended through December <br/>
<a id="pl.31.30"></a><var>31.30</var>20, 2013, as provided in this act. <br/>
<a id="pl.31.31"></a><var>31.31</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.2.0.0"></a>

<a id="bill.2.1.0"></a><a id="pl.32.3"></a><var>32.3</var>    Section 1. Minnesota Statutes 2013 Supplement, section 297A.61, subdivision 3, <br/>
<a id="pl.32.4"></a><var>32.4</var>is amended to read:<br/>
<a id="pl.32.5"></a><var>32.5</var>    Subd. 3. <b>Sale and purchase.</b> (a) "Sale" and "purchase" include, but are not limited <br/>
<a id="pl.32.6"></a><var>32.6</var>to, each of the transactions listed in this subdivision. In applying the provisions of this <br/>
<a id="pl.32.7"></a><var>32.7</var>chapter, the terms "tangible personal property" and "retail sale" include the taxable <br/>
<a id="pl.32.8"></a><var>32.8</var>services listed in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision <br/>
<a id="pl.32.9"></a><var>32.9</var>of these taxable services, unless specifically provided otherwise. Services performed by <br/>
<a id="pl.32.10"></a><var>32.10</var>an employee for an employer are not taxable. Services performed by a partnership or <br/>
<a id="pl.32.11"></a><var>32.11</var>association for another partnership or association are not taxable if one of the entities owns <br/>
<a id="pl.32.12"></a><var>32.12</var>or controls more than 80 percent of the voting power of the equity interest in the other <br/>
<a id="pl.32.13"></a><var>32.13</var>entity. Services performed between members of an affiliated group of corporations are not <br/>
<a id="pl.32.14"></a><var>32.14</var>taxable. For purposes of the preceding sentence, "affiliated group of corporations" means <br/>
<a id="pl.32.15"></a><var>32.15</var>those entities that would be classified as members of an affiliated group as defined under <br/>
<a id="pl.32.16"></a><var>32.16</var>United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).<br/>
<a id="pl.32.17"></a><var>32.17</var>    (b) Sale and purchase include:<br/>
<a id="pl.32.18"></a><var>32.18</var>    (1) any transfer of title or possession, or both, of tangible personal property, whether <br/>
<a id="pl.32.19"></a><var>32.19</var>absolutely or conditionally, for a consideration in money or by exchange or barter; and<br/>
<a id="pl.32.20"></a><var>32.20</var>    (2) the leasing of or the granting of a license to use or consume, for a consideration <br/>
<a id="pl.32.21"></a><var>32.21</var>in money or by exchange or barter, tangible personal property, other than a manufactured <br/>
<a id="pl.32.22"></a><var>32.22</var>home used for residential purposes for a continuous period of 30 days or more.<br/>
<a id="pl.32.23"></a><var>32.23</var>    (c) Sale and purchase include the production, fabrication, printing, or processing of <br/>
<a id="pl.32.24"></a><var>32.24</var>tangible personal property for a consideration for consumers who furnish either directly or <br/>
<a id="pl.32.25"></a><var>32.25</var>indirectly the materials used in the production, fabrication, printing, or processing.<br/>
<a id="pl.32.26"></a><var>32.26</var>    (d) Sale and purchase include the preparing for a consideration of food. <br/>
<a id="pl.32.27"></a><var>32.27</var>Notwithstanding section 
         <statute_ref>297A.67, subdivision 2</statute_ref>, taxable food includes, but is not limited <br/>
<a id="pl.32.28"></a><var>32.28</var>to, the following:<br/>
<a id="pl.32.29"></a><var>32.29</var>    (1) prepared food sold by the retailer;<br/>
<a id="pl.32.30"></a><var>32.30</var>    (2) soft drinks;<br/>
<a id="pl.32.31"></a><var>32.31</var>    (3) candy;<br/>
<a id="pl.32.32"></a><var>32.32</var>    (4) dietary supplements; and<br/>
<a id="pl.32.33"></a><var>32.33</var>    (5) all food sold through vending machines.<br/>
<a id="pl.32.34"></a><var>32.34</var>    (e) A sale and a purchase includes the furnishing for a consideration of electricity, <br/>
<a id="pl.32.35"></a><var>32.35</var>gas, water, or steam for use or consumption within this state.<br/>
<a id="pl.33.1"></a><var>33.1</var>    (f) A sale and a purchase includes the transfer for a consideration of prewritten <br/>
<a id="pl.33.2"></a><var>33.2</var>computer software whether delivered electronically, by load and leave, or otherwise.<br/>
<a id="pl.33.3"></a><var>33.3</var>    (g) A sale and a purchase includes the furnishing for a consideration of the following <br/>
<a id="pl.33.4"></a><var>33.4</var>services:<br/>
<a id="pl.33.5"></a><var>33.5</var>    (1) the privilege of admission to places of amusement, recreational areas, or athletic <br/>
<a id="pl.33.6"></a><var>33.6</var>events, and the making available of amusement devices, tanning facilities, reducing <br/>
<a id="pl.33.7"></a><var>33.7</var>salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;<br/>
<a id="pl.33.8"></a><var>33.8</var>    (2) lodging and related services by a hotel, rooming house, resort, campground, <br/>
<a id="pl.33.9"></a><var>33.9</var>motel, or trailer camp, including furnishing the guest of the facility with access to <br/>
<a id="pl.33.10"></a><var>33.10</var>telecommunication services, and the granting of any similar license to use real property in <br/>
<a id="pl.33.11"></a><var>33.11</var>a specific facility, other than the renting or leasing of it for a continuous period of 30 days <br/>
<a id="pl.33.12"></a><var>33.12</var>or more under an enforceable written agreement that may not be terminated without prior <br/>
<a id="pl.33.13"></a><var>33.13</var>notice and including accommodations intermediary services provided in connection with <br/>
<a id="pl.33.14"></a><var>33.14</var>other services provided under this clause;<br/>
<a id="pl.33.15"></a><var>33.15</var>    (3) nonresidential parking services, whether on a contractual, hourly, or other <br/>
<a id="pl.33.16"></a><var>33.16</var>periodic basis, except for parking at a meter;<br/>
<a id="pl.33.17"></a><var>33.17</var>    (4) the granting of membership in a club, association, or other organization if:<br/>
<a id="pl.33.18"></a><var>33.18</var>    (i) the club, association, or other organization makes available for the use of its <br/>
<a id="pl.33.19"></a><var>33.19</var>members sports and athletic facilities, without regard to whether a separate charge is <br/>
<a id="pl.33.20"></a><var>33.20</var>assessed for use of the facilities; and<br/>
<a id="pl.33.21"></a><var>33.21</var>    (ii) use of the sports and athletic facility is not made available to the general public <br/>
<a id="pl.33.22"></a><var>33.22</var>on the same basis as it is made available to members.<br/>
<a id="pl.33.23"></a><var>33.23</var>Granting of membership means both onetime initiation fees and periodic membership <br/>
<a id="pl.33.24"></a><var>33.24</var>dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and <br/>
<a id="pl.33.25"></a><var>33.25</var>squash courts; basketball and volleyball facilities; running tracks; exercise equipment; <br/>
<a id="pl.33.26"></a><var>33.26</var>swimming pools; and other similar athletic or sports facilities;<br/>
<a id="pl.33.27"></a><var>33.27</var>    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate <br/>
<a id="pl.33.28"></a><var>33.28</var>material used in road construction; and delivery of concrete block by a third party if the <br/>
<a id="pl.33.29"></a><var>33.29</var>delivery would be subject to the sales tax if provided by the seller of the concrete block. <br/>
<a id="pl.33.30"></a><var>33.30</var>For purposes of this clause, "road construction" means construction of:<br/>
<a id="pl.33.31"></a><var>33.31</var>    (i) public roads;<br/>
<a id="pl.33.32"></a><var>33.32</var>    (ii) cartways; and<br/>
<a id="pl.33.33"></a><var>33.33</var>    (iii) private roads in townships located outside of the seven-county metropolitan area <br/>
<a id="pl.33.34"></a><var>33.34</var>up to the point of the emergency response location sign; and<br/>
<a id="pl.33.35"></a><var>33.35</var>    (6) services as provided in this clause:<br/>
<a id="pl.34.1"></a><var>34.1</var>    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, <br/>
<a id="pl.34.2"></a><var>34.2</var>and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, <br/>
<a id="pl.34.3"></a><var>34.3</var>drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not <br/>
<a id="pl.34.4"></a><var>34.4</var>include services provided by coin operated facilities operated by the customer;<br/>
<a id="pl.34.5"></a><var>34.5</var>    (ii) motor vehicle washing, waxing, and cleaning services, including services <br/>
<a id="pl.34.6"></a><var>34.6</var>provided by coin operated facilities operated by the customer, and rustproofing, <br/>
<a id="pl.34.7"></a><var>34.7</var>undercoating, and towing of motor vehicles;<br/>
<a id="pl.34.8"></a><var>34.8</var>    (iii) building and residential cleaning, maintenance, and disinfecting services and <br/>
<a id="pl.34.9"></a><var>34.9</var>pest control and exterminating services;<br/>
<a id="pl.34.10"></a><var>34.10</var>    (iv) detective, security, burglar, fire alarm, and armored car services; but not <br/>
<a id="pl.34.11"></a><var>34.11</var>including services performed within the jurisdiction they serve by off-duty licensed peace <br/>
<a id="pl.34.12"></a><var>34.12</var>officers as defined in section 
         <statute_ref>626.84, subdivision 1</statute_ref>, or services provided by a nonprofit <br/>
<a id="pl.34.13"></a><var>34.13</var>organization or any organization at the direction of a county for monitoring and electronic <br/>
<a id="pl.34.14"></a><var>34.14</var>surveillance of persons placed on in-home detention pursuant to court order or under the <br/>
<a id="pl.34.15"></a><var>34.15</var>direction of the Minnesota Department of Corrections;<br/>
<a id="pl.34.16"></a><var>34.16</var>    (v) pet grooming services;<br/>
<a id="pl.34.17"></a><var>34.17</var>    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting <br/>
<a id="pl.34.18"></a><var>34.18</var>and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor <br/>
<a id="pl.34.19"></a><var>34.19</var>plant care; tree, bush, shrub, and stump removal, except when performed as part of a land <br/>
<a id="pl.34.20"></a><var>34.20</var>clearing contract as defined in section 
         <statute_ref>297A.68, subdivision 40</statute_ref>; and tree trimming for <br/>
<a id="pl.34.21"></a><var>34.21</var>public utility lines. Services performed under a construction contract for the installation of <br/>
<a id="pl.34.22"></a><var>34.22</var>shrubbery, plants, sod, trees, bushes, and similar items are not taxable;<br/>
<a id="pl.34.23"></a><var>34.23</var>    (vii) massages, except when provided by a licensed health care facility or <br/>
<a id="pl.34.24"></a><var>34.24</var>professional or upon written referral from a licensed health care facility or professional for <br/>
<a id="pl.34.25"></a><var>34.25</var>treatment of illness, injury, or disease; and<br/>
<a id="pl.34.26"></a><var>34.26</var>    (viii) the furnishing of lodging, board, and care services for animals in kennels and <br/>
<a id="pl.34.27"></a><var>34.27</var>other similar arrangements, but excluding veterinary and horse boarding services.<br/>
<a id="pl.34.28"></a><var>34.28</var>    (h) A sale and a purchase includes the furnishing for a consideration of tangible <br/>
<a id="pl.34.29"></a><var>34.29</var>personal property or taxable services by the United States or any of its agencies or <br/>
<a id="pl.34.30"></a><var>34.30</var>instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political <br/>
<a id="pl.34.31"></a><var>34.31</var>subdivisions.<br/>
<a id="pl.34.32"></a><var>34.32</var>    (i) A sale and a purchase includes the furnishing for a consideration of <br/>
<a id="pl.34.33"></a><var>34.33</var>telecommunications services, ancillary services associated with telecommunication <br/>
<a id="pl.34.34"></a><var>34.34</var>services, and pay television services. Telecommunication services include, but are <br/>
<a id="pl.34.35"></a><var>34.35</var>not limited to, the following services, as defined in section 
         <statute_ref>297A.669</statute_ref>: air-to-ground <br/>
<a id="pl.34.36"></a><var>34.36</var>radiotelephone service, mobile telecommunication service, postpaid calling service, <br/>
<a id="pl.35.1"></a><var>35.1</var>prepaid calling service, prepaid wireless calling service, and private communication <br/>
<a id="pl.35.2"></a><var>35.2</var>services. The services in this paragraph are taxed to the extent allowed under federal law.<br/>
<a id="pl.35.3"></a><var>35.3</var>    (j) A sale and a purchase includes the furnishing for a consideration of installation if <br/>
<a id="pl.35.4"></a><var>35.4</var>the installation charges would be subject to the sales tax if the installation were provided <br/>
<a id="pl.35.5"></a><var>35.5</var>by the seller of the item being installed.<br/>
<a id="pl.35.6"></a><var>35.6</var>    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer <br/>
<a id="pl.35.7"></a><var>35.7</var>to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) <br/>
<a id="pl.35.8"></a><var>35.8</var>the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section <br/>
<statute_ref><a id="pl.35.9"></a><var>35.9</var>59B.02, subdivision
         </statute_ref> 11.<br/>
<a id="pl.35.10"></a><var>35.10</var>    (l) A sale and a purchase includes furnishing for a consideration of specified digital <br/>
<a id="pl.35.11"></a><var>35.11</var>products or other digital products or granting the right for a consideration to use specified <br/>
<a id="pl.35.12"></a><var>35.12</var>digital products or other digital products on a temporary or permanent basis and regardless <br/>
<a id="pl.35.13"></a><var>35.13</var>of whether the purchaser is required to make continued payments for such right. Wherever <br/>
<a id="pl.35.14"></a><var>35.14</var>the term "tangible personal property" is used in this chapter, other than in subdivisions 10 <br/>
<a id="pl.35.15"></a><var>35.15</var>and 38, the provisions also apply to specified digital products, or other digital products, <br/>
<a id="pl.35.16"></a><var>35.16</var>unless specifically provided otherwise or the context indicates otherwise.<br/>
<a id="pl.35.17"></a><var>35.17</var>(m) A sale and purchase includes the furnishing for consideration of the following <br/>
<a id="pl.35.18"></a><var>35.18</var>services:<br/>
<a id="pl.35.19"></a><var>35.19</var>(1) repairing and maintaining electronic and precision equipment, which service can <br/>
<a id="pl.35.20"></a><var>35.20</var>be deducted as a business expense under the Internal Revenue Code. This includes, but <br/>
<a id="pl.35.21"></a><var>35.21</var>is not limited to, repair or maintenance of electronic devices, computers and computer <br/>
<a id="pl.35.22"></a><var>35.22</var>peripherals, monitors, computer terminals, storage devices, and CD-ROM drives; other <br/>
<a id="pl.35.23"></a><var>35.23</var>office equipment such as photocopying machines, printers, and facsimile machines; <br/>
<a id="pl.35.24"></a><var>35.24</var>televisions, stereos, sound systems, video or digital recorders and players; two-way radios <br/>
<a id="pl.35.25"></a><var>35.25</var>and other communications equipment; radar and sonar equipment, scientific instruments, <br/>
<a id="pl.35.26"></a><var>35.26</var>microscopes, and medical equipment;<br/>
<a id="pl.35.27"></a><var>35.27</var>(2) repairing and maintaining commercial and industrial machinery and equipment. <br/>
<a id="pl.35.28"></a><var>35.28</var>For purposes of this subdivision, the following items are not commercial or industrial <br/>
<a id="pl.35.29"></a><var>35.29</var>machinery and equipment: (i) motor vehicles; (ii) furniture and fixtures; (iii) ships; (iv) <br/>
<a id="pl.35.30"></a><var>35.30</var>railroad stock; and (v) aircraft; and<br/>
<a id="pl.35.31"></a><var>35.31</var>(3) warehousing or storage services for tangible personal property, excluding:<br/>
<a id="pl.35.32"></a><var>35.32</var>(i) agricultural products;<br/>
<a id="pl.35.33"></a><var>35.33</var>(ii) refrigerated storage;<br/>
<a id="pl.35.34"></a><var>35.34</var>(iii) electronic data; and<br/>
<a id="pl.35.35"></a><var>35.35</var>(iv) self-storage services and storage of motor vehicles, recreational vehicles, and <br/>
<a id="pl.35.36"></a><var>35.36</var>boats, not eligible to be deducted as a business expense under the Internal Revenue Code.<br/>
<a id="pl.36.1"></a><var>36.1</var><b>EFFECTIVE DATE.</b>This section is effective for sales and purchases made after <br/>
<a id="pl.36.2"></a><var>36.2</var>March 31, 2014.<br/>
<br/>
<a id="bill.2.2.0"></a><a id="pl.36.3"></a><var>36.3</var>    Sec. 2. Minnesota Statutes 2013 Supplement, section 297A.68, subdivision 5, is <br/>
<a id="pl.36.4"></a><var>36.4</var>amended to read:<br/>
<a id="pl.36.5"></a><var>36.5</var>    Subd. 5. <b>Capital equipment.</b> (a) Capital equipment is exempt.<br/>
<a id="pl.36.6"></a><var>36.6</var>"Capital equipment" means machinery and equipment purchased or leased, and used <br/>
<a id="pl.36.7"></a><var>36.7</var>in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, <br/>
<a id="pl.36.8"></a><var>36.8</var>or refining tangible personal property to be sold ultimately at retail if the machinery and <br/>
<a id="pl.36.9"></a><var>36.9</var>equipment are essential to the integrated production process of manufacturing, fabricating, <br/>
<a id="pl.36.10"></a><var>36.10</var>mining, or refining. Capital equipment also includes machinery and equipment <br/>
<a id="pl.36.11"></a><var>36.11</var>used primarily to electronically transmit results retrieved by a customer of an online <br/>
<a id="pl.36.12"></a><var>36.12</var>computerized data retrieval system.<br/>
<a id="pl.36.13"></a><var>36.13</var>(b) Capital equipment includes, but is not limited to:<br/>
<a id="pl.36.14"></a><var>36.14</var>(1) machinery and equipment used to operate, control, or regulate the production <br/>
<a id="pl.36.15"></a><var>36.15</var>equipment;<br/>
<a id="pl.36.16"></a><var>36.16</var>(2) machinery and equipment used for research and development, design, quality <br/>
<a id="pl.36.17"></a><var>36.17</var>control, and testing activities;<br/>
<a id="pl.36.18"></a><var>36.18</var>(3) environmental control devices that are used to maintain conditions such as <br/>
<a id="pl.36.19"></a><var>36.19</var>temperature, humidity, light, or air pressure when those conditions are essential to and are <br/>
<a id="pl.36.20"></a><var>36.20</var>part of the production process;<br/>
<a id="pl.36.21"></a><var>36.21</var>(4) materials and supplies used to construct and install machinery or equipment;<br/>
<a id="pl.36.22"></a><var>36.22</var>(5) repair and replacement parts, including accessories, whether purchased as spare <br/>
<a id="pl.36.23"></a><var>36.23</var>parts, repair parts, or as upgrades or modifications to machinery or equipment;<br/>
<a id="pl.36.24"></a><var>36.24</var>(6) materials used for foundations that support machinery or equipment;<br/>
<a id="pl.36.25"></a><var>36.25</var>(7) materials used to construct and install special purpose buildings used in the <br/>
<a id="pl.36.26"></a><var>36.26</var>production process;<br/>
<a id="pl.36.27"></a><var>36.27</var>(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed <br/>
<a id="pl.36.28"></a><var>36.28</var>as part of the delivery process regardless if mounted on a chassis, repair parts for <br/>
<a id="pl.36.29"></a><var>36.29</var>ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and<br/>
<a id="pl.36.30"></a><var>36.30</var>(9) machinery or equipment used for research, development, design, or production <br/>
<a id="pl.36.31"></a><var>36.31</var>of computer software.<br/>
<a id="pl.36.32"></a><var>36.32</var>(c) Capital equipment does not include the following:<br/>
<a id="pl.36.33"></a><var>36.33</var>(1) motor vehicles taxed under chapter 297B;<br/>
<a id="pl.36.34"></a><var>36.34</var>(2) machinery or equipment used to receive or store raw materials;<br/>
<a id="pl.37.1"></a><var>37.1</var>(3) building materials, except for materials included in paragraph (b), clauses (6) <br/>
<a id="pl.37.2"></a><var>37.2</var>and (7);<br/>
<a id="pl.37.3"></a><var>37.3</var>(4) machinery or equipment used for nonproduction purposes, including, but not <br/>
<a id="pl.37.4"></a><var>37.4</var>limited to, the following: plant security, fire prevention, first aid, and hospital stations; <br/>
<a id="pl.37.5"></a><var>37.5</var>support operations or administration; pollution control; and plant cleaning, disposal of <br/>
<a id="pl.37.6"></a><var>37.6</var>scrap and waste, plant communications, space heating, cooling, lighting, or safety;<br/>
<a id="pl.37.7"></a><var>37.7</var>(5) farm machinery and aquaculture production equipment as defined by section <br/>
<statute_ref><a id="pl.37.8"></a><var>37.8</var>297A.61
         </statute_ref>, subdivisions 12 and 13;<br/>
<a id="pl.37.9"></a><var>37.9</var>(6) machinery or equipment purchased and installed by a contractor as part of an <br/>
<a id="pl.37.10"></a><var>37.10</var>improvement to real property;<br/>
<a id="pl.37.11"></a><var>37.11</var>(7) machinery and equipment used by restaurants in the furnishing, preparing, or <br/>
<a id="pl.37.12"></a><var>37.12</var>serving of prepared foods as defined in section 
         <statute_ref>297A.61, subdivision 31</statute_ref>;<br/>
<a id="pl.37.13"></a><var>37.13</var>(8) machinery and equipment used to furnish the services listed in section 
         <statute_ref>297A.61, <br/>
<a id="pl.37.14"></a><var>37.14</var>subdivision 3
         </statute_ref>, paragraph (g), clause (6), items (i) to (vi) and (viii);<br/>
<a id="pl.37.15"></a><var>37.15</var>(9) machinery or equipment used in the transportation, transmission, or distribution <br/>
<a id="pl.37.16"></a><var>37.16</var>of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, <br/>
<a id="pl.37.17"></a><var>37.17</var>tanks, mains, or other means of transporting those products. This clause does not apply to <br/>
<a id="pl.37.18"></a><var>37.18</var>machinery or equipment used to blend petroleum or biodiesel fuel as defined in section <br/>
<statute_ref><a id="pl.37.19"></a><var>37.19</var>239.77
         </statute_ref>; or<br/>
<a id="pl.37.20"></a><var>37.20</var>(10) any other item that is not essential to the integrated process of manufacturing, <br/>
<a id="pl.37.21"></a><var>37.21</var>fabricating, mining, or refining.<br/>
<a id="pl.37.22"></a><var>37.22</var>(d) For purposes of this subdivision:<br/>
<a id="pl.37.23"></a><var>37.23</var>(1) "Equipment" means independent devices or tools separate from machinery but <br/>
<a id="pl.37.24"></a><var>37.24</var>essential to an integrated production process, including computers and computer software, <br/>
<a id="pl.37.25"></a><var>37.25</var>used in operating, controlling, or regulating machinery and equipment; and any subunit or <br/>
<a id="pl.37.26"></a><var>37.26</var>assembly comprising a component of any machinery or accessory or attachment parts of <br/>
<a id="pl.37.27"></a><var>37.27</var>machinery, such as tools, dies, jigs, patterns, and molds.<br/>
<a id="pl.37.28"></a><var>37.28</var>(2) "Fabricating" means to make, build, create, produce, or assemble components or <br/>
<a id="pl.37.29"></a><var>37.29</var>property to work in a new or different manner.<br/>
<a id="pl.37.30"></a><var>37.30</var>(3) "Integrated production process" means a process or series of operations through <br/>
<a id="pl.37.31"></a><var>37.31</var>which tangible personal property is manufactured, fabricated, mined, or refined. For <br/>
<a id="pl.37.32"></a><var>37.32</var>purposes of this clause, (i) manufacturing begins with the removal of raw materials <br/>
<a id="pl.37.33"></a><var>37.33</var>from inventory and ends when the last process prior to loading for shipment has been <br/>
<a id="pl.37.34"></a><var>37.34</var>completed; (ii) fabricating begins with the removal from storage or inventory of the <br/>
<a id="pl.37.35"></a><var>37.35</var>property to be assembled, processed, altered, or modified and ends with the creation <br/>
<a id="pl.37.36"></a><var>37.36</var>or production of the new or changed product; (iii) mining begins with the removal of <br/>
<a id="pl.38.1"></a><var>38.1</var>overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and <br/>
<a id="pl.38.2"></a><var>38.2</var>ends when the last process before stockpiling is completed; and (iv) refining begins with <br/>
<a id="pl.38.3"></a><var>38.3</var>the removal from inventory or storage of a natural resource and ends with the conversion <br/>
<a id="pl.38.4"></a><var>38.4</var>of the item to its completed form.<br/>
<a id="pl.38.5"></a><var>38.5</var>(4) "Machinery" means mechanical, electronic, or electrical devices, including <br/>
<a id="pl.38.6"></a><var>38.6</var>computers and computer software, that are purchased or constructed to be used for the <br/>
<a id="pl.38.7"></a><var>38.7</var>activities set forth in paragraph (a), beginning with the removal of raw materials from <br/>
<a id="pl.38.8"></a><var>38.8</var>inventory through completion of the product, including packaging of the product.<br/>
<a id="pl.38.9"></a><var>38.9</var>(5) "Machinery and equipment used for pollution control" means machinery and <br/>
<a id="pl.38.10"></a><var>38.10</var>equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity <br/>
<a id="pl.38.11"></a><var>38.11</var>described in paragraph (a).<br/>
<a id="pl.38.12"></a><var>38.12</var>(6) "Manufacturing" means an operation or series of operations where raw materials <br/>
<a id="pl.38.13"></a><var>38.13</var>are changed in form, composition, or condition by machinery and equipment and which <br/>
<a id="pl.38.14"></a><var>38.14</var>results in the production of a new article of tangible personal property. For purposes of <br/>
<a id="pl.38.15"></a><var>38.15</var>this subdivision, "manufacturing" includes the generation of electricity or steam to be <br/>
<a id="pl.38.16"></a><var>38.16</var>sold at retail.<br/>
<a id="pl.38.17"></a><var>38.17</var>(7) "Mining" means the extraction of minerals, ores, stone, or peat.<br/>
<a id="pl.38.18"></a><var>38.18</var>(8) "Online data retrieval system" means a system whose cumulation of information <br/>
<a id="pl.38.19"></a><var>38.19</var>is equally available and accessible to all its customers.<br/>
<a id="pl.38.20"></a><var>38.20</var>(9) "Primarily" means machinery and equipment used 50 percent or more of the time <br/>
<a id="pl.38.21"></a><var>38.21</var>in an activity described in paragraph (a).<br/>
<a id="pl.38.22"></a><var>38.22</var>(10) "Refining" means the process of converting a natural resource to an intermediate <br/>
<a id="pl.38.23"></a><var>38.23</var>or finished product, including the treatment of water to be sold at retail.<br/>
<a id="pl.38.24"></a><var>38.24</var>(11) This subdivision does not apply to telecommunications equipment as provided <br/>
<a id="pl.38.25"></a><var>38.25</var>in subdivision 35 35a, and does not apply to wire, cable, fiber, poles, or conduit for <br/>
<a id="pl.38.26"></a><var>38.26</var>telecommunications services.<br/>
<a id="pl.38.27"></a><var>38.27</var><b>EFFECTIVE DATE.</b>This section is effective for sales and purchases made after <br/>
<a id="pl.38.28"></a><var>38.28</var>March 31, 2014.<br/>
<br/>
<a id="bill.2.3.0"></a><a id="pl.38.29"></a><var>38.29</var>    Sec. 3. Minnesota Statutes 2012, section 297A.68, is amended by adding a subdivision <br/>
<a id="pl.38.30"></a><var>38.30</var>to read:<br/>
<a id="pl.38.31"></a><var>38.31</var>    Subd. 35a. <b>Telecommunications or pay television services machinery and </b><br/>
<a id="pl.38.32"></a><var>38.32</var><b>equipment.</b> (a) Telecommunications or pay television services machinery and equipment <br/>
<a id="pl.38.33"></a><var>38.33</var>purchased or leased for use directly by a telecommunications or pay television services <br/>
<a id="pl.38.34"></a><var>38.34</var>provider primarily in the provision of telecommunications or pay television services <br/>
<a id="pl.39.1"></a><var>39.1</var>that are ultimately to be sold at retail are exempt, regardless of whether purchased by <br/>
<a id="pl.39.2"></a><var>39.2</var>the owner, a contractor, or a subcontractor.<br/>
<a id="pl.39.3"></a><var>39.3</var>(b) For purposes of this subdivision, "telecommunications or pay television <br/>
<a id="pl.39.4"></a><var>39.4</var>machinery and equipment" includes, but is not limited to:<br/>
<a id="pl.39.5"></a><var>39.5</var>(1) machinery, equipment, and fixtures utilized in receiving, initiating, <br/>
<a id="pl.39.6"></a><var>39.6</var>amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring <br/>
<a id="pl.39.7"></a><var>39.7</var>telecommunications or pay television services, such as computers, transformers, amplifiers, <br/>
<a id="pl.39.8"></a><var>39.8</var>routers, bridges, repeaters, multiplexers, and other items performing comparable functions;<br/>
<a id="pl.39.9"></a><var>39.9</var>(2) machinery, equipment, and fixtures used in the transportation of <br/>
<a id="pl.39.10"></a><var>39.10</var>telecommunications or pay television services, such as radio transmitters and receivers, <br/>
<a id="pl.39.11"></a><var>39.11</var>satellite equipment, microwave equipment, and other transporting media, but not wire, <br/>
<a id="pl.39.12"></a><var>39.12</var>cable, fiber, poles, or conduit;<br/>
<a id="pl.39.13"></a><var>39.13</var>(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or <br/>
<a id="pl.39.14"></a><var>39.14</var>enable the machinery in clauses (1) and (2) to accomplish its intended function, such as <br/>
<a id="pl.39.15"></a><var>39.15</var>auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning <br/>
<a id="pl.39.16"></a><var>39.16</var>equipment necessary to the operation of the telecommunications or pay television <br/>
<a id="pl.39.17"></a><var>39.17</var>equipment; and software necessary to the operation of the telecommunications or pay <br/>
<a id="pl.39.18"></a><var>39.18</var>television equipment; and<br/>
<a id="pl.39.19"></a><var>39.19</var>(4) repair and replacement parts, including accessories, whether purchased as spare <br/>
<a id="pl.39.20"></a><var>39.20</var>parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.<br/>
<a id="pl.39.21"></a><var>39.21</var><b>EFFECTIVE DATE.</b>This section is effective for sales and purchases made after <br/>
<a id="pl.39.22"></a><var>39.22</var>March 31, 2014.<br/>
<br/>
<a id="bill.2.4.0"></a><a id="pl.39.23"></a><var>39.23</var>    Sec. 4. Laws 2013, chapter 143, article 8, section 26, the effective date, is amended to <br/>
<a id="pl.39.24"></a><var>39.24</var>read:<br/>
<a id="pl.39.25"></a><var>39.25</var><b>EFFECTIVE DATE.</b>This section is effective for sales and purchases made after <br/>
<a id="pl.39.26"></a><var>39.26</var>August 31, 2014 June 30, 2015.<br/>
<a id="pl.39.27"></a><var>39.27</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.2.5.0"></a><a id="pl.39.28"></a><var>39.28</var>    Sec. 5. <b> REPEALER.</b><br/>
<a id="pl.39.29"></a><var>39.29</var>Minnesota Statutes 2013 Supplement, section 297A.61, subdivision 57, is repealed.<br/>
<a id="pl.39.30"></a><var>39.30</var><b>EFFECTIVE DATE.</b>This section is effective for sales and purchases made after <br/>
<a id="pl.39.31"></a><var>39.31</var>March 31, 2014.<br/>
<br/>
<a id="bill.3.0.0"></a>

<a id="bill.3.1.0"></a><a id="pl.40.3"></a><var>40.3</var>    Section 1. Minnesota Statutes 2013 Supplement, section 289A.10, subdivision 1, <br/>
<a id="pl.40.4"></a><var>40.4</var>is amended to read:<br/>
<a id="pl.40.5"></a><var>40.5</var>    Subdivision 1. <b>Return required.</b> In the case of a decedent who has an interest in <br/>
<a id="pl.40.6"></a><var>40.6</var>property with a situs in Minnesota, the personal representative must submit a Minnesota <br/>
<a id="pl.40.7"></a><var>40.7</var>estate tax return to the commissioner, on a form prescribed by the commissioner, if:<br/>
<a id="pl.40.8"></a><var>40.8</var>(1) a federal estate tax return is required to be filed; or<br/>
<a id="pl.40.9"></a><var>40.9</var>(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in <br/>
<a id="pl.40.10"></a><var>40.10</var>section 2001(b) of the Internal Revenue Code, made within three years of the date of the <br/>
<a id="pl.40.11"></a><var>40.11</var>decedent's death exceeds $1,000,000 $1,200,000 for estates of decedents dying in 2014; <br/>
<a id="pl.40.12"></a><var>40.12</var>$2,000,000 for estates of decedents dying in 2015; $3,000,000 for estates of decedents <br/>
<a id="pl.40.13"></a><var>40.13</var>dying in 2016; $4,000,000 for estates of decedents dying in 2017; and $5,000,000 for <br/>
<a id="pl.40.14"></a><var>40.14</var>estates of decedents dying in 2018 and thereafter.<br/>
<a id="pl.40.15"></a><var>40.15</var>The return must contain a computation of the Minnesota estate tax due. The return <br/>
<a id="pl.40.16"></a><var>40.16</var>must be signed by the personal representative.<br/>
<a id="pl.40.17"></a><var>40.17</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for estates of decedents <br/>
<a id="pl.40.18"></a><var>40.18</var>dying after December 31, 2013.<br/>
<br/>
<a id="bill.3.2.0"></a><a id="pl.40.19"></a><var>40.19</var>    Sec. 2. Minnesota Statutes 2012, section 289A.18, subdivision 3, is amended to read:<br/>
<a id="pl.40.20"></a><var>40.20</var>    Subd. 3. <b>Estate tax returns.</b> An estate tax return must be filed with the <br/>
<a id="pl.40.21"></a><var>40.21</var>commissioner within nine months after the decedent's death. Except in the case of the <br/>
<a id="pl.40.22"></a><var>40.22</var>estate of a decedent dying after December 31, 2009, and before December 17, 2010, then <br/>
<a id="pl.40.23"></a><var>40.23</var>an estate tax return must be filed with the commissioner within nine months after the <br/>
<a id="pl.40.24"></a><var>40.24</var>decedent's death; within the time provided by section 
<statute_ref>289A.19, subdivision 4</statute_ref>; or before <br/>
<a id="pl.40.25"></a><var>40.25</var>September 20, 2011; whichever is later.<br/>
<a id="pl.40.26"></a><var>40.26</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.3.3.0"></a><a id="pl.40.27"></a><var>40.27</var>    Sec. 3. Minnesota Statutes 2013 Supplement, section 291.005, subdivision 1, is <br/>
<a id="pl.40.28"></a><var>40.28</var>amended to read:<br/>
<a id="pl.40.29"></a><var>40.29</var>    Subdivision 1. <b>Scope.</b> Unless the context otherwise clearly requires, the following <br/>
<a id="pl.40.30"></a><var>40.30</var>terms used in this chapter shall have the following meanings:<br/>
<a id="pl.40.31"></a><var>40.31</var>    (1) "Commissioner" means the commissioner of revenue or any person to whom the <br/>
<a id="pl.40.32"></a><var>40.32</var>commissioner has delegated functions under this chapter.<br/>
<a id="pl.41.1"></a><var>41.1</var>    (2) "Federal gross estate" means the gross estate of a decedent as required to be valued <br/>
<a id="pl.41.2"></a><var>41.2</var>and otherwise determined for federal estate tax purposes under the Internal Revenue Code.<br/>
<a id="pl.41.3"></a><var>41.3</var>    (3) "Internal Revenue Code" means the United States Internal Revenue Code of <br/>
<a id="pl.41.4"></a><var>41.4</var>1986, as amended through January 3, 2013, but without regard to the provisions of section <br/>
<a id="pl.41.5"></a><var>41.5</var>2011, paragraph (f), of the Internal Revenue Code March 1, 2014.<br/>
<a id="pl.41.6"></a><var>41.6</var>    (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as <br/>
<a id="pl.41.7"></a><var>41.7</var>defined by section 2011(b)(3) of the Internal Revenue Code, plus<br/>
<a id="pl.41.8"></a><var>41.8</var>(i) the amount of deduction for state death taxes allowed under section 2058 of the <br/>
<a id="pl.41.9"></a><var>41.9</var>Internal Revenue Code;<br/>
<a id="pl.41.10"></a><var>41.10</var>(ii) the amount of taxable gifts, as defined in section 
<statute_ref>292.16</statute_ref>, and made by the <br/>
<a id="pl.41.11"></a><var>41.11</var>decedent within three years of the decedent's date of death; less<br/>
<a id="pl.41.12"></a><var>41.12</var>(iii)(A) the value of qualified small business property under section 
<statute_ref>291.03, <br/>
<a id="pl.41.13"></a><var>41.13</var>subdivision 9
</statute_ref>, and the value of qualified farm property under section 
<statute_ref>291.03, subdivision <br/>
<a id="pl.41.14"></a><var>41.14</var>10
</statute_ref>, or (B) $4,000,000, whichever is less.<br/>
<a id="pl.41.15"></a><var>41.15</var>    (5) (4) "Minnesota gross estate" means the federal gross estate of a decedent after (a) <br/>
<a id="pl.41.16"></a><var>41.16</var>excluding therefrom any property included therein in the estate which has its situs outside <br/>
<a id="pl.41.17"></a><var>41.17</var>Minnesota, and (b) including therein any property omitted from the federal gross estate <br/>
<a id="pl.41.18"></a><var>41.18</var>which is includable therein in the estate, has its situs in Minnesota, and was not disclosed <br/>
<a id="pl.41.19"></a><var>41.19</var>to federal taxing authorities.<br/>
<a id="pl.41.20"></a><var>41.20</var>    (6) (5) "Nonresident decedent" means an individual whose domicile at the time <br/>
<a id="pl.41.21"></a><var>41.21</var>of death was not in Minnesota.<br/>
<a id="pl.41.22"></a><var>41.22</var>    (7) (6) "Personal representative" means the executor, administrator or other person <br/>
<a id="pl.41.23"></a><var>41.23</var>appointed by the court to administer and dispose of the property of the decedent. If there <br/>
<a id="pl.41.24"></a><var>41.24</var>is no executor, administrator or other person appointed, qualified, and acting within this <br/>
<a id="pl.41.25"></a><var>41.25</var>state, then any person in actual or constructive possession of any property having a situs in <br/>
<a id="pl.41.26"></a><var>41.26</var>this state which is included in the federal gross estate of the decedent shall be deemed <br/>
<a id="pl.41.27"></a><var>41.27</var>to be a personal representative to the extent of the property and the Minnesota estate tax <br/>
<a id="pl.41.28"></a><var>41.28</var>due with respect to the property.<br/>
<a id="pl.41.29"></a><var>41.29</var>    (8) (7) "Resident decedent" means an individual whose domicile at the time of <br/>
<a id="pl.41.30"></a><var>41.30</var>death was in Minnesota.<br/>
<a id="pl.41.31"></a><var>41.31</var>    (9) (8) "Situs of property" means, with respect to:<br/>
<a id="pl.41.32"></a><var>41.32</var>    (i) real property, the state or country in which it is located;<br/>
<a id="pl.41.33"></a><var>41.33</var>    (ii) tangible personal property, the state or country in which it was normally kept <br/>
<a id="pl.41.34"></a><var>41.34</var>or located at the time of the decedent's death or for a gift of tangible personal property <br/>
<a id="pl.41.35"></a><var>41.35</var>within three years of death, the state or country in which it was normally kept or located <br/>
<a id="pl.41.36"></a><var>41.36</var>when the gift was executed; and<br/>
<a id="pl.42.1"></a><var>42.1</var>    (iii) intangible personal property, the state or country in which the decedent was <br/>
<a id="pl.42.2"></a><var>42.2</var>domiciled at death or for a gift of intangible personal property within three years of death, <br/>
<a id="pl.42.3"></a><var>42.3</var>the state or country in which the decedent was domiciled when the gift was executed.<br/>
<a id="pl.42.4"></a><var>42.4</var>    For a nonresident decedent with an ownership interest in a pass-through entity <br/>
<a id="pl.42.5"></a><var>42.5</var>with assets that include real or tangible personal property, situs of the real or tangible <br/>
<a id="pl.42.6"></a><var>42.6</var>personal property is determined as if the pass-through entity does not exist and the real <br/>
<a id="pl.42.7"></a><var>42.7</var>or tangible personal property is personally owned by the decedent. If the pass-through <br/>
<a id="pl.42.8"></a><var>42.8</var>entity is owned by a person or persons in addition to the decedent, ownership of the <br/>
<a id="pl.42.9"></a><var>42.9</var>property is attributed to the decedent in proportion to the decedent's capital ownership <br/>
<a id="pl.42.10"></a><var>42.10</var>share of the pass-through entity.<br/>
<a id="pl.42.11"></a><var>42.11</var>(10) (9) "Pass-through entity" includes the following:<br/>
<a id="pl.42.12"></a><var>42.12</var>(i) an entity electing S corporation status under section 1362 of the Internal Revenue <br/>
<a id="pl.42.13"></a><var>42.13</var>Code;<br/>
<a id="pl.42.14"></a><var>42.14</var>(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;<br/>
<a id="pl.42.15"></a><var>42.15</var>(iii) a single-member limited liability company or similar entity, regardless of <br/>
<a id="pl.42.16"></a><var>42.16</var>whether it is taxed as an association or is disregarded for federal income tax purposes <br/>
<a id="pl.42.17"></a><var>42.17</var>under Code of Federal Regulations, title 26, section 301.7701-3; or<br/>
<a id="pl.42.18"></a><var>42.18</var>(iv) a trust to the extent the property is includible in the decedent's federal gross <br/>
<a id="pl.42.19"></a><var>42.19</var>estate. ; but excludes <br/>
<a id="pl.42.20"></a><var>42.20</var>    (v) an entity whose ownership interest securities are traded on an exchange regulated <br/>
<a id="pl.42.21"></a><var>42.21</var>by the Securities and Exchange Commission as a national securities exchange under <br/>
<a id="pl.42.22"></a><var>42.22</var>section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.<br/>
<a id="pl.42.23"></a><var>42.23</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for estates of decedents <br/>
<a id="pl.42.24"></a><var>42.24</var>dying after December 31, 2013.<br/>
<br/>
<a id="bill.3.4.0"></a><a id="pl.42.25"></a><var>42.25</var>    Sec. 4. <b>[291.016] MINNESOTA TAXABLE ESTATE.</b><br/>
<a id="pl.42.26"></a><var>42.26</var>    Subdivision 1. <b>General.</b> For purposes of the tax under this chapter, the Minnesota <br/>
<a id="pl.42.27"></a><var>42.27</var>taxable estate equals the federal taxable estate as provided under section 2051 of the Internal <br/>
<a id="pl.42.28"></a><var>42.28</var>Revenue Code, without regard to whether the estate is subject to the federal estate tax:<br/>
<a id="pl.42.29"></a><var>42.29</var>(1) increased by the additions under subdivision 2; and<br/>
<a id="pl.42.30"></a><var>42.30</var>(2) decreased by the subtraction under subdivision 3.<br/>
<a id="pl.42.31"></a><var>42.31</var>    Subd. 2. <b>Additions.</b> The following amounts, to the extent deducted in computing <br/>
<a id="pl.42.32"></a><var>42.32</var>the federal taxable estate, must be added in computing the Minnesota taxable estate:<br/>
<a id="pl.42.33"></a><var>42.33</var>(1) the amount of the deduction for state death taxes allowed under section 2058 of <br/>
<a id="pl.42.34"></a><var>42.34</var>the Internal Revenue Code;<br/>
<a id="pl.43.1"></a><var>43.1</var>(2) the amount of the deduction for foreign death taxes allowed under section <br/>
<a id="pl.43.2"></a><var>43.2</var>2053(d) of the Internal Revenue Code; and<br/>
<a id="pl.43.3"></a><var>43.3</var>(3) the aggregate amount of taxable gifts as defined in section 2503 of the Internal <br/>
<a id="pl.43.4"></a><var>43.4</var>Revenue Code, made by the decedent within three years of the date of death. For purposes <br/>
<a id="pl.43.5"></a><var>43.5</var>of this clause, the amount of the addition equals the value of the gift under section 2512 of <br/>
<a id="pl.43.6"></a><var>43.6</var>the Internal Revenue Code and excludes any value of the gift included in the federal estate.<br/>
<a id="pl.43.7"></a><var>43.7</var>    Subd. 3. <b>Subtraction.</b> (a) The value of qualified small business property under <br/>
<a id="pl.43.8"></a><var>43.8</var>section 291.03, subdivision 9, and the value of qualified farm property under section <br/>
<a id="pl.43.9"></a><var>43.9</var>291.03, subdivision 10, or the result of $5,000,000 minus the amount for the year of death <br/>
<a id="pl.43.10"></a><var>43.10</var>listed in paragraph (b), whichever is less, may be subtracted in computing the Minnesota <br/>
<a id="pl.43.11"></a><var>43.11</var>taxable estate but must not reduce the Minnesota taxable estate to less than zero.<br/>
<a id="pl.43.12"></a><var>43.12</var>(b) $1,200,000 for estates of decedents dying in 2014; $2,000,000 for estates of <br/>
<a id="pl.43.13"></a><var>43.13</var>decedents dying in 2015; $3,000,000 for estates of decedents dying in 2016; $4,000,000 <br/>
<a id="pl.43.14"></a><var>43.14</var>for estates of decedents dying in 2017; and $5,000,000 for estates of decedents dying in <br/>
<a id="pl.43.15"></a><var>43.15</var>2018 and thereafter.<br/>
<a id="pl.43.16"></a><var>43.16</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for estates of decedents <br/>
<a id="pl.43.17"></a><var>43.17</var>dying after December 31, 2013.<br/>
<br/>
<a id="bill.3.5.0"></a><a id="pl.43.18"></a><var>43.18</var>    Sec. 5. Minnesota Statutes 2013 Supplement, section 291.03, subdivision 1, is <br/>
<a id="pl.43.19"></a><var>43.19</var>amended to read:<br/>
<a id="pl.43.20"></a><var>43.20</var>    Subdivision 1. <b>Tax amount.</b> (a) The tax imposed shall be an amount equal to the <br/>
<a id="pl.43.21"></a><var>43.21</var>proportion of the maximum credit for state death taxes computed under section 2011 of <br/>
<a id="pl.43.22"></a><var>43.22</var>the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal <br/>
<a id="pl.43.23"></a><var>43.23</var>adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal <br/>
<a id="pl.43.24"></a><var>43.24</var>gross estate. The tax is reduced by:<br/>
<a id="pl.43.25"></a><var>43.25</var>    (1) the gift tax paid by the decedent under section 
<statute_ref>292.17</statute_ref> on gifts included in the <br/>
<a id="pl.43.26"></a><var>43.26</var>Minnesota adjusted taxable estate and not subtracted as qualified farm or small business <br/>
<a id="pl.43.27"></a><var>43.27</var>property; and<br/>
<a id="pl.43.28"></a><var>43.28</var>    (2) any credit allowed under subdivision 1c.<br/>
<a id="pl.43.29"></a><var>43.29</var>    (b) The tax determined under this subdivision must not be greater than the sum of <br/>
<a id="pl.43.30"></a><var>43.30</var>the following amounts multiplied by a fraction, the numerator of which is the Minnesota <br/>
<a id="pl.43.31"></a><var>43.31</var>gross estate and the denominator of which is the federal gross estate:<br/>
<a id="pl.43.32"></a><var>43.32</var>    (1) the rates and brackets under section 2001(c) of the Internal Revenue Code <br/>
<a id="pl.43.33"></a><var>43.33</var>multiplied by the sum of:<br/>
<a id="pl.43.34"></a><var>43.34</var>    (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus<br/>
<a id="pl.44.1"></a><var>44.1</var>    (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue <br/>
<a id="pl.44.2"></a><var>44.2</var>Code; less<br/>
<a id="pl.44.3"></a><var>44.3</var>(iii) the lesser of (A) the sum of the value of qualified small business property <br/>
<a id="pl.44.4"></a><var>44.4</var>under subdivision 9, and the value of qualified farm property under subdivision 10, or <br/>
<a id="pl.44.5"></a><var>44.5</var>(B) $4,000,000; less<br/>
<a id="pl.44.6"></a><var>44.6</var>    (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue <br/>
<a id="pl.44.7"></a><var>44.7</var>Code; and less<br/>
<a id="pl.44.8"></a><var>44.8</var>    (3) the federal credit allowed under section 2010 of the Internal Revenue Code.<br/>
<a id="pl.44.9"></a><var>44.9</var>    (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal <br/>
<a id="pl.44.10"></a><var>44.10</var>Revenue Code of 1986, as amended through December 31, 2000.<br/>
<a id="pl.44.11"></a><var>44.11</var>    The tax imposed must be computed by applying to the Minnesota taxable estate the <br/>
<a id="pl.44.12"></a><var>44.12</var>following schedule of rates and then the resulting amount multiplied by a fraction, not <br/>
<a id="pl.44.13"></a><var>44.13</var>greater than one, the numerator of which is the value of the Minnesota gross estate plus <br/>
<a id="pl.44.14"></a><var>44.14</var>the value of gifts under section 291.016, subdivision 2, clause (3), with a Minnesota situs, <br/>
<a id="pl.44.15"></a><var>44.15</var>and the denominator of which is the federal gross estate plus the value of gifts under <br/>
<a id="pl.44.16"></a><var>44.16</var>section 291.016, subdivision 2, clause (3):<br/>
<a id="pl.44.17"></a><var>44.17</var>    (a) For estates of decedents dying in 2014:<br/>
<table>
<col width="50px"/>
<col width=""/>
<col width=""/>
<tr>
<td><a id="pl.44.18"></a><var>44.18</var><br/>
</td>
<td align="center" valign="top">Amount of Minnesota Taxable Estate<br/>
</td>
<td align="center" valign="top">Rate of Tax<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.19"></a><var>44.19</var><br/>
</td>
<td valign="top">Not over $1,200,000<br/>
</td>
<td valign="top">None<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.20"></a><var>44.20</var><br/>
</td>
<td valign="top">Over $1,200,000, but not over $3,000,000<br/>
</td>
<td valign="top">ten percent of the excess over $1,200,000<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.21"></a><var>44.21</var><br/>
<a id="pl.44.22"></a><var>44.22</var><br/>
</td>
<td valign="top">Over $3,000,000, but not over $5,000,000<br/>
</td>
<td valign="top">$180,000 plus 14 percent of the excess over <br/>
$3,000,000<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.23"></a><var>44.23</var><br/>
<a id="pl.44.24"></a><var>44.24</var><br/>
</td>
<td valign="top">Over $5,000,000<br/>
</td>
<td valign="top">$460,000 plus 18 percent of the excess over <br/>
$5,000,000<br/>
</td>
</tr>
</table><a id="pl.44.25"></a><var>44.25</var>(b) For estates of decedents dying in 2015:<br/>
<table>
<col width="50px"/>
<col width=""/>
<col width=""/>
<tr>
<td><a id="pl.44.26"></a><var>44.26</var><br/>
</td>
<td align="center" valign="top">Amount of Minnesota Taxable Estate<br/>
</td>
<td align="center" valign="top">Rate of Tax<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.27"></a><var>44.27</var><br/>
</td>
<td valign="top">Not over $2,000,000<br/>
</td>
<td valign="top">None<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.28"></a><var>44.28</var><br/>
</td>
<td valign="top">Over $2,000,000, but not over $3,000,000<br/>
</td>
<td valign="top">ten percent of the excess over $2,000,000<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.29"></a><var>44.29</var><br/>
<a id="pl.44.30"></a><var>44.30</var><br/>
</td>
<td valign="top">Over $3,000,000, but not over $5,000,000<br/>
</td>
<td valign="top">$100,000 plus 14 percent of the excess over <br/>
$3,000,000<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.31"></a><var>44.31</var><br/>
<a id="pl.44.32"></a><var>44.32</var><br/>
</td>
<td valign="top">Over $5,000,000<br/>
</td>
<td valign="top">$380,000 plus 18 percent of the excess over <br/>
$5,000,000<br/>
</td>
</tr>
</table><a id="pl.44.33"></a><var>44.33</var>(c) For estates of decedents dying in 2016:<br/>
<table>
<col width="50px"/>
<col width=""/>
<col width=""/>
<tr>
<td><a id="pl.44.34"></a><var>44.34</var><br/>
</td>
<td align="center" valign="top">Amount of Minnesota Taxable Estate<br/>
</td>
<td align="center" valign="top">Rate of Tax<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.35"></a><var>44.35</var><br/>
</td>
<td valign="top">Not over $3,000,000<br/>
</td>
<td valign="top">None<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.36"></a><var>44.36</var><br/>
</td>
<td valign="top">Over $3,000,000, but not over $5,000,000<br/>
</td>
<td valign="top">14 percent of the excess over $3,000,000<br/>
</td>
</tr>
<tr>
<td><a id="pl.44.37"></a><var>44.37</var><br/>
<a id="pl.44.38"></a><var>44.38</var><br/>
</td>
<td valign="top">Over $5,000,000<br/>
</td>
<td valign="top">$280,000 plus 18 percent of the excess over <br/>
$5,000,000<br/>
</td>
</tr>
</table><a id="pl.44.39"></a><var>44.39</var>(d) For estates of decedents dying in 2017:<br/>
<table>
<col width="50px"/>
<col width=""/>
<col width=""/>
<tr>
<td><a id="pl.45.1"></a><var>45.1</var><br/>
</td>
<td align="center" valign="top">Amount of Minnesota Taxable Estate<br/>
</td>
<td align="center" valign="top">Rate of Tax<br/>
</td>
</tr>
<tr>
<td><a id="pl.45.2"></a><var>45.2</var><br/>
</td>
<td valign="top">Not over $4,000,000<br/>
</td>
<td valign="top">None<br/>
</td>
</tr>
<tr>
<td><a id="pl.45.3"></a><var>45.3</var><br/>
</td>
<td valign="top">Over $4,000,000, but not over $5,000,000<br/>
</td>
<td valign="top">14 percent of the excess over $4,000,000<br/>
</td>
</tr>
<tr>
<td><a id="pl.45.4"></a><var>45.4</var><br/>
<a id="pl.45.5"></a><var>45.5</var><br/>
</td>
<td valign="top">Over $5,000,000<br/>
</td>
<td valign="top">$140,000 plus 18 percent of the excess over <br/>
$5,000,000<br/>
</td>
</tr>
</table><a id="pl.45.6"></a><var>45.6</var>(e) For estates of decedents dying in 2018 and thereafter:<br/>
<table>
<col width="50px"/>
<col width=""/>
<col width=""/>
<tr>
<td><a id="pl.45.7"></a><var>45.7</var><br/>
</td>
<td align="center" valign="top">Amount of Minnesota Taxable Estate<br/>
</td>
<td align="center" valign="top">Rate of Tax<br/>
</td>
</tr>
<tr>
<td><a id="pl.45.8"></a><var>45.8</var><br/>
</td>
<td valign="top">Not over $5,000,000<br/>
</td>
<td valign="top">None<br/>
</td>
</tr>
<tr>
<td><a id="pl.45.9"></a><var>45.9</var><br/>
</td>
<td valign="top">Over $5,000,000<br/>
</td>
<td valign="top"> 18 percent of the excess over $5,000,000<br/>
</td>
</tr>
</table><a id="pl.45.10"></a><var>45.10</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for estates of decedents <br/>
<a id="pl.45.11"></a><var>45.11</var>dying after December 31, 2013.<br/>
<br/>
<a id="bill.3.6.0"></a><a id="pl.45.12"></a><var>45.12</var>    Sec. 6. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision <br/>
<a id="pl.45.13"></a><var>45.13</var>to read:<br/>
<a id="pl.45.14"></a><var>45.14</var>    Subd. 1d. <b>Elections.</b> (a) For the purposes of this section, the value of the Minnesota <br/>
<a id="pl.45.15"></a><var>45.15</var>taxable estate is determined by taking into account the deduction available under section <br/>
<a id="pl.45.16"></a><var>45.16</var>2056(b) of the Internal Revenue Code. An election under section 2056(b) of the Internal <br/>
<a id="pl.45.17"></a><var>45.17</var>Revenue Code may be made for Minnesota estate tax purposes regardless of whether the <br/>
<a id="pl.45.18"></a><var>45.18</var>election is made for federal estate tax purposes. The value of the gross estate includes <br/>
<a id="pl.45.19"></a><var>45.19</var>the value of any property in which the decedent had a qualifying income interest for life <br/>
<a id="pl.45.20"></a><var>45.20</var>for which an election was made under this subdivision.<br/>
<a id="pl.45.21"></a><var>45.21</var>(b) Except for an election made under section 2056(b) of the Internal Revenue Code, <br/>
<a id="pl.45.22"></a><var>45.22</var>no federal election is allowable in computing the tax under this chapter unless the estate is <br/>
<a id="pl.45.23"></a><var>45.23</var>required to file a federal estate tax return, the election is made on the federal estate tax <br/>
<a id="pl.45.24"></a><var>45.24</var>return, and the election is allowed under federal law.<br/>
<a id="pl.45.25"></a><var>45.25</var><b>EFFECTIVE DATE.</b>This section is effective for estates of decedents dying after <br/>
<a id="pl.45.26"></a><var>45.26</var>December 31, 2013.<br/>
<br/>
<a id="bill.3.7.0"></a><a id="pl.45.27"></a><var>45.27</var>    Sec. 7. <b>[291.031] CREDITS.</b><br/>
<a id="pl.45.28"></a><var>45.28</var>(a) The estate of a nonresident decedent that is subject to tax under this chapter on <br/>
<a id="pl.45.29"></a><var>45.29</var>the value of Minnesota situs property held in a pass-through entity is allowed a credit <br/>
<a id="pl.45.30"></a><var>45.30</var>against the tax due under this section equal to the lesser of:<br/>
<a id="pl.45.31"></a><var>45.31</var>(1) the amount of estate or inheritance tax paid to another state that is attributable to <br/>
<a id="pl.45.32"></a><var>45.32</var>the Minnesota situs property held in the pass-through entity; or<br/>
<a id="pl.45.33"></a><var>45.33</var>(2) the amount of tax paid under this section attributable to the Minnesota situs <br/>
<a id="pl.45.34"></a><var>45.34</var>property held in the pass-through entity.<br/>
<a id="pl.46.1"></a><var>46.1</var>(b) The amount of tax attributable to the Minnesota situs property held in the <br/>
<a id="pl.46.2"></a><var>46.2</var>pass-through entity must be determined by the increase in the estate or inheritance tax that <br/>
<a id="pl.46.3"></a><var>46.3</var>results from including the market value of the property in the estate or treating the value <br/>
<a id="pl.46.4"></a><var>46.4</var>as a taxable inheritance to the recipient of the property.<br/>
<a id="pl.46.5"></a><var>46.5</var><b>EFFECTIVE DATE.</b>This section is effective retroactively for estates of decedents <br/>
<a id="pl.46.6"></a><var>46.6</var>dying after December 31, 2013.<br/>
<br/>
<a id="bill.3.8.0"></a><a id="pl.46.7"></a><var>46.7</var>    Sec. 8. <b> REPEALER.</b><br/>
<a id="pl.46.8"></a><var>46.8</var>(a) Minnesota Statutes 2013 Supplement, sections 292.16; 292.17; 292.18; 292.19; <br/>
<a id="pl.46.9"></a><var>46.9</var>292.20; and 292.21, are repealed.<br/>
<a id="pl.46.10"></a><var>46.10</var>(b) Minnesota Statutes 2012, section 291.03, subdivision 1b, and Minnesota Statutes <br/>
<a id="pl.46.11"></a><var>46.11</var>2013 Supplement, section 291.03, subdivision 1c, are repealed.<br/>
<a id="pl.46.12"></a><var>46.12</var>(c) Minnesota Statutes 2012, sections 291.41; 291.42; 291.43; 291.44; 291.45; <br/>
<a id="pl.46.13"></a><var>46.13</var>291.46; and 291.47, are repealed.<br/>
<a id="pl.46.14"></a><var>46.14</var><b>EFFECTIVE DATE.</b>Paragraph (a) is effective retroactively for gifts made after <br/>
<a id="pl.46.15"></a><var>46.15</var>June 30, 2013. Paragraph (b) is effective retroactively for estates of decedents dying after <br/>
<a id="pl.46.16"></a><var>46.16</var>December 31, 2013. Paragraph (c) is effective the day following final enactment.<br/>
<br/>
<a id="bill.4.0.0"></a>

<a id="bill.4.1.0"></a><a id="pl.46.19"></a><var>46.19</var>    Section 1. Minnesota Statutes 2013 Supplement, section 126C.10, subdivision 1, is <br/>
<a id="pl.46.20"></a><var>46.20</var>amended to read:<br/>
<a id="pl.46.21"></a><var>46.21</var>    Subdivision 1. <b>General education revenue.</b> (a) For fiscal years 2013 and 2014, the <br/>
<a id="pl.46.22"></a><var>46.22</var>general education revenue for each district equals the sum of the district's basic revenue, <br/>
<a id="pl.46.23"></a><var>46.23</var>extended time revenue, gifted and talented revenue, small schools revenue, basic skills <br/>
<a id="pl.46.24"></a><var>46.24</var>revenue, secondary sparsity revenue, elementary sparsity revenue, transportation sparsity <br/>
<a id="pl.46.25"></a><var>46.25</var>revenue, total operating capital revenue, equity revenue, alternative teacher compensation <br/>
<a id="pl.46.26"></a><var>46.26</var>revenue, and transition revenue.<br/>
<a id="pl.46.27"></a><var>46.27</var>(b) For fiscal year 2015 and later, the general education revenue for each district <br/>
<a id="pl.46.28"></a><var>46.28</var>equals the sum of the district's basic revenue, extended time revenue, gifted and talented <br/>
<a id="pl.46.29"></a><var>46.29</var>revenue, declining enrollment revenue, location equity local optional revenue, small <br/>
<a id="pl.46.30"></a><var>46.30</var>schools revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity <br/>
<a id="pl.46.31"></a><var>46.31</var>revenue, transportation sparsity revenue, total operating capital revenue, equity revenue, <br/>
<a id="pl.46.32"></a><var>46.32</var>pension adjustment revenue, and transition revenue.<br/>
<a id="pl.47.1"></a><var>47.1</var><b>EFFECTIVE DATE.</b>This section is effective for revenue in fiscal year 2016 and <br/>
<a id="pl.47.2"></a><var>47.2</var>later.<br/>
<br/>
<a id="bill.4.2.0"></a><a id="pl.47.3"></a><var>47.3</var>    Sec. 2. Minnesota Statutes 2013 Supplement, section 126C.10, subdivision 2e, is <br/>
<a id="pl.47.4"></a><var>47.4</var>amended to read:<br/>
<a id="pl.47.5"></a><var>47.5</var>    Subd. 2e. <b>Location equity</b><b> Local optional</b><b> revenue.</b> (a) For a school district <br/>
<a id="pl.47.6"></a><var>47.6</var>with any of its area located within the seven-county metropolitan area, location equity<br/>
<a id="pl.47.7"></a><var>47.7</var> Local optional revenue for a school district equals $424 times the adjusted pupil units of <br/>
<a id="pl.47.8"></a><var>47.8</var>the district for that school year.<br/>
<a id="pl.47.9"></a><var>47.9</var>(b) For all other school districts with more than 2,000 pupils in adjusted average <br/>
<a id="pl.47.10"></a><var>47.10</var>daily membership for the fiscal year ending in the year before the levy is certified, location <br/>
<a id="pl.47.11"></a><var>47.11</var>equity revenue equals $212 times the adjusted pupil units of the district for that year.<br/>
<a id="pl.47.12"></a><var>47.12</var>(c) A district's location equity local optional levy equals its location equity local <br/>
<a id="pl.47.13"></a><var>47.13</var>optional revenue times the lesser of one or the ratio of its referendum market value per <br/>
<a id="pl.47.14"></a><var>47.14</var>resident pupil unit to $510,000. The location equity local optional revenue levy must be <br/>
<a id="pl.47.15"></a><var>47.15</var>spread on referendum market value. A district may levy less than the permitted amount.<br/>
<a id="pl.47.16"></a><var>47.16</var>(d) (c) A district's location equity local optional aid equals its location equity local <br/>
<a id="pl.47.17"></a><var>47.17</var>optional revenue less its location equity local optional levy, times the ratio of the actual <br/>
<a id="pl.47.18"></a><var>47.18</var>amount levied to the permitted levy.<br/>
<a id="pl.47.19"></a><var>47.19</var>(e) A school district may elect not to participate in the location equity revenue <br/>
<a id="pl.47.20"></a><var>47.20</var>program by a board vote taken prior to September 1 of the fiscal year before the fiscal year <br/>
<a id="pl.47.21"></a><var>47.21</var>for which the decision not to participate becomes effective. The board resolution must <br/>
<a id="pl.47.22"></a><var>47.22</var>state which fiscal years the district will not participate. A copy of the board resolution <br/>
<a id="pl.47.23"></a><var>47.23</var>to not participate must be submitted to the commissioner.<br/>
<a id="pl.47.24"></a><var>47.24</var><b>EFFECTIVE DATE.</b>This section is effective for revenue in fiscal year 2016 and <br/>
<a id="pl.47.25"></a><var>47.25</var>later.<br/>
<br/>
<a id="bill.4.3.0"></a><a id="pl.47.26"></a><var>47.26</var>    Sec. 3. Minnesota Statutes 2013 Supplement, section 126C.13, subdivision 4, is <br/>
<a id="pl.47.27"></a><var>47.27</var>amended to read:<br/>
<a id="pl.47.28"></a><var>47.28</var>    Subd. 4. <b>General education aid.</b> (a) For fiscal years 2013 and 2014 only, a district's <br/>
<a id="pl.47.29"></a><var>47.29</var>general education aid is the sum of the following amounts:<br/>
<a id="pl.47.30"></a><var>47.30</var>    (1) general education revenue, excluding equity revenue, total operating capital <br/>
<a id="pl.47.31"></a><var>47.31</var>revenue, alternative teacher compensation revenue, and transition revenue;<br/>
<a id="pl.47.32"></a><var>47.32</var>    (2) operating capital aid under section 
         <statute_ref>126C.10, subdivision 13b</statute_ref>;<br/>
<a id="pl.47.33"></a><var>47.33</var>    (3) equity aid under section 
         <statute_ref>126C.10, subdivision 30</statute_ref>;<br/>
<a id="pl.47.34"></a><var>47.34</var>    (4) alternative teacher compensation aid under section 
         <statute_ref>126C.10, subdivision 36</statute_ref>;<br/>
<a id="pl.48.1"></a><var>48.1</var>    (5) transition aid under section 
         <statute_ref>126C.10, subdivision 33</statute_ref>;<br/>
<a id="pl.48.2"></a><var>48.2</var>    (6) shared time aid under section 
         <statute_ref>126C.01, subdivision 7</statute_ref>;<br/>
<a id="pl.48.3"></a><var>48.3</var>    (7) referendum aid under section 
         <statute_ref>126C.17</statute_ref>, subdivisions 7 and 7a; and<br/>
<a id="pl.48.4"></a><var>48.4</var>    (8) online learning aid according to section 
         <statute_ref>124D.096</statute_ref>.<br/>
<a id="pl.48.5"></a><var>48.5</var>(b) For fiscal year 2015 and later, a district's general education aid equals:<br/>
<a id="pl.48.6"></a><var>48.6</var>(1) general education revenue, excluding operating capital revenue, equity revenue, <br/>
<a id="pl.48.7"></a><var>48.7</var>location equity local optional revenue, and transition revenue, minus the student <br/>
<a id="pl.48.8"></a><var>48.8</var>achievement levy, multiplied times the ratio of the actual amount of student achievement <br/>
<a id="pl.48.9"></a><var>48.9</var>levy levied to the permitted student achievement levy; plus<br/>
<a id="pl.48.10"></a><var>48.10</var>(2) equity aid under section 
         <statute_ref>126C.10, subdivision 30</statute_ref>; plus<br/>
<a id="pl.48.11"></a><var>48.11</var>(3) transition aid under section 
         <statute_ref>126C.10, subdivision 33</statute_ref>; plus<br/>
<a id="pl.48.12"></a><var>48.12</var>(4) shared time aid under section 
         <statute_ref>126C.10, subdivision 7</statute_ref>; plus<br/>
<a id="pl.48.13"></a><var>48.13</var>(5) referendum aid under section 
         <statute_ref>126C.17, subdivisions 7</statute_ref> and 7a; plus<br/>
<a id="pl.48.14"></a><var>48.14</var>(6) online learning aid under section 
         <statute_ref>124D.096</statute_ref>; plus<br/>
<a id="pl.48.15"></a><var>48.15</var>(7) location equity local optional aid according to section 
         <statute_ref>126C.10, subdivision <br/>
<a id="pl.48.16"></a><var>48.16</var>2d
         </statute_ref>, paragraph (d).<br/>
<a id="pl.48.17"></a><var>48.17</var><b>EFFECTIVE DATE.</b>This section is effective for revenue in fiscal year 2016 and <br/>
<a id="pl.48.18"></a><var>48.18</var>later.<br/>
<br/>
<a id="bill.4.4.0"></a><a id="pl.48.19"></a><var>48.19</var>    Sec. 4. Minnesota Statutes 2013 Supplement, section 126C.17, subdivision 1, is <br/>
<a id="pl.48.20"></a><var>48.20</var>amended to read:<br/>
<a id="pl.48.21"></a><var>48.21</var>    Subdivision 1. <b>Referendum allowance.</b> (a) A district's initial referendum allowance <br/>
<a id="pl.48.22"></a><var>48.22</var>for fiscal year 2015 equals the result of the following calculations:<br/>
<a id="pl.48.23"></a><var>48.23</var>(1) multiply the referendum allowance the district would have received for fiscal <br/>
<a id="pl.48.24"></a><var>48.24</var>year 2015 under Minnesota Statutes 2012, section 
         <statute_ref>126C.17, subdivision 1</statute_ref>, based on <br/>
<a id="pl.48.25"></a><var>48.25</var>elections held before July 1, 2013, by the resident marginal cost pupil units the district <br/>
<a id="pl.48.26"></a><var>48.26</var>would have counted for fiscal year 2015 under Minnesota Statutes 2012, section 
         <statute_ref>126C.05</statute_ref>;<br/>
<a id="pl.48.27"></a><var>48.27</var>(2) add to the result of clause (1) the adjustment the district would have received <br/>
<a id="pl.48.28"></a><var>48.28</var>under Minnesota Statutes 2012, section 
         <statute_ref>127A.47, subdivision 7</statute_ref>, paragraphs (a), (b), and <br/>
<a id="pl.48.29"></a><var>48.29</var>(c), based on elections held before July 1, 2013;<br/>
<a id="pl.48.30"></a><var>48.30</var>(3) divide the result of clause (2) by the district's adjusted pupil units for fiscal <br/>
<a id="pl.48.31"></a><var>48.31</var>year 2015; and<br/>
<a id="pl.48.32"></a><var>48.32</var>(4) add to the result of clause (3) any additional referendum allowance per adjusted <br/>
<a id="pl.48.33"></a><var>48.33</var>pupil unit authorized by elections held between July 1, 2013, and December 31, 2013;<br/>
<a id="pl.48.34"></a><var>48.34</var>(5) add to the result in clause (4) any additional referendum allowance resulting from <br/>
<a id="pl.48.35"></a><var>48.35</var>inflation adjustments approved by the voters prior to January 1, 2014;<br/>
<a id="pl.49.1"></a><var>49.1</var>(6) subtract from the result of clause (5), the sum of a district's actual local optional <br/>
<a id="pl.49.2"></a><var>49.2</var>levy and local optional aid under section 126C.10, subdivision 2e, divided by the adjusted <br/>
<a id="pl.49.3"></a><var>49.3</var>pupil units of the district for that school year; and<br/>
<a id="pl.49.4"></a><var>49.4</var>(4) (7) if the result of clause (3) (6) is less than zero, set the allowance to zero.<br/>
<a id="pl.49.5"></a><var>49.5</var>(b) A district's referendum allowance equals the sum of the district's initial <br/>
<a id="pl.49.6"></a><var>49.6</var>referendum allowance for fiscal year 2015, plus any additional referendum allowance per <br/>
<a id="pl.49.7"></a><var>49.7</var>adjusted pupil unit authorized after June 30 December 31, 2013, minus (i) the location <br/>
<a id="pl.49.8"></a><var>49.8</var>equity revenue subtraction, and (ii) any allowances expiring in fiscal year 2016 or later, <br/>
<a id="pl.49.9"></a><var>49.9</var>provided that the allowance may not be less than zero. For a district with more than one <br/>
<a id="pl.49.10"></a><var>49.10</var>referendum allowance for fiscal year 2015 under Minnesota Statutes 2012, section 
         <statute_ref>126C.17</statute_ref>, <br/>
<a id="pl.49.11"></a><var>49.11</var>the allowance calculated under paragraph (a), clause (3), must be divided into components <br/>
<a id="pl.49.12"></a><var>49.12</var>such that the same percentage of the district's allowance expires at the same time as the old <br/>
<a id="pl.49.13"></a><var>49.13</var>allowances would have expired under Minnesota Statutes 2012, section 
         <statute_ref>126C.17</statute_ref>. For a <br/>
<a id="pl.49.14"></a><var>49.14</var>district with more than one allowance for fiscal year 2015 that expires in the same year, the <br/>
<a id="pl.49.15"></a><var>49.15</var>reduction under paragraph (a), clause (6), to offset local optional revenue shall be made <br/>
<a id="pl.49.16"></a><var>49.16</var>first from any allowances that do not have an inflation adjustment approved by the voters.<br/>
<a id="pl.49.17"></a><var>49.17</var>(c) For purposes of this subdivision, a district's location equity revenue subtraction <br/>
<a id="pl.49.18"></a><var>49.18</var>equals $424 for a district receiving location equity revenue under section 
<statute_ref>126C.10</statute_ref>, <br/>
<a id="pl.49.19"></a><var>49.19</var>subdivision 2d, paragraph (a), $212 for a district receiving location equity revenue under <br/>
<a id="pl.49.20"></a><var>49.20</var>section 
<statute_ref>126C.10, subdivision 2d</statute_ref>, paragraph (b), and zero for all other school districts.<br/>
<a id="pl.49.21"></a><var>49.21</var><b>EFFECTIVE DATE.</b>This section is effective for revenue for fiscal year 2016 <br/>
<a id="pl.49.22"></a><var>49.22</var>and later.<br/>
<br/>
<a id="bill.4.5.0"></a><a id="pl.49.23"></a><var>49.23</var>    Sec. 5. Minnesota Statutes 2013 Supplement, section 273.117, is amended to read:<br/>
<a id="pl.49.24"></a><var>49.24</var><b>273.117 CONSERVATION PROPERTY TAX VALUATION.</b><br/>
<a id="pl.49.25"></a><var>49.25</var>    The value of real property which is subject to a conservation restriction or easement <br/>
<a id="pl.49.26"></a><var>49.26</var>shall not be reduced by the assessor if:<br/>
<a id="pl.49.27"></a><var>49.27</var>    (a) the restriction or easement is for a conservation purpose as defined in section <br/>
<a id="pl.49.28"></a><var>49.28</var><statute_ref>84.64, subdivision 2</statute_ref>, and is recorded on the property; and<br/>
<a id="pl.49.29"></a><var>49.29</var>    (b) the property is being used in accordance with the terms of the conservation <br/>
<a id="pl.49.30"></a><var>49.30</var>restriction or easement.<br/>
<a id="pl.49.31"></a><var>49.31</var>This section does not apply to (1) conservation restrictions or easements covering <br/>
<a id="pl.49.32"></a><var>49.32</var>riparian buffers along lakes, rivers, and streams that are used for water quantity or quality <br/>
<a id="pl.49.33"></a><var>49.33</var>control; or (2) easements in a county that has adopted, by referendum, a program to protect <br/>
<a id="pl.50.1"></a><var>50.1</var>farmland and natural areas since 1999; or (3) conservation restrictions or easements <br/>
<a id="pl.50.2"></a><var>50.2</var>entered into prior to May 23, 2013.<br/>
<a id="pl.50.3"></a><var>50.3</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.4.6.0"></a><a id="pl.50.4"></a><var>50.4</var>    Sec. 6. <b>SUPPLEMENTAL COUNTY PROGRAM AID PAYMENTS.</b><br/>
<a id="pl.50.5"></a><var>50.5</var>(a) Before the money appropriated to county need aid is apportioned among the <br/>
<a id="pl.50.6"></a><var>50.6</var>counties, as provided in Minnesota Statutes, section 477A.0124, subdivision 3, for aids <br/>
<a id="pl.50.7"></a><var>50.7</var>payable in 2015 through 2024 only, the total aid paid to Beltrami County shall be increased <br/>
<a id="pl.50.8"></a><var>50.8</var>by $3,000,000. The increased aid shall be used for out-of-home placement costs.<br/>
<a id="pl.50.9"></a><var>50.9</var>(b) Before the money appropriated to county need aid is apportioned among the <br/>
<a id="pl.50.10"></a><var>50.10</var>counties, as provided in Minnesota Statutes, section 477A.0124, subdivision 3, for aids <br/>
<a id="pl.50.11"></a><var>50.11</var>payable in 2015 only, the total aid paid to Mahnomen County shall be increased by <br/>
<a id="pl.50.12"></a><var>50.12</var>$1,500,000. Of this amount, $750,000 shall be paid from Mahnomen County to the White <br/>
<a id="pl.50.13"></a><var>50.13</var>Earth Band of Ojibwe for transition costs associated with health and human services.<br/>
<a id="pl.50.14"></a><var>50.14</var>(c) The increased aid under this section shall be paid in the same manner and at the <br/>
<a id="pl.50.15"></a><var>50.15</var>same time as the regular aid payments under Minnesota Statutes, section 477A.0124.<br/>
<a id="pl.50.16"></a><var>50.16</var>(d) For aids payable in 2015 only, the total aid paid to counties under Minnesota <br/>
<a id="pl.50.17"></a><var>50.17</var>Statutes, section 477A.03, subdivision 2b, paragraph (a), is $105,295,000<br/>
<a id="pl.50.18"></a><var>50.18</var>(e) For aids payable in 2016 through 2024 only, the total aid paid to counties under <br/>
<a id="pl.50.19"></a><var>50.19</var>Minnesota Statutes, section 477A.03, subdivision 2b, paragraph (a), is $103,795,000.<br/>
<a id="pl.50.20"></a><var>50.20</var><b>EFFECTIVE DATE.</b>This section is effective for aids payable in 2015 through 2024.<br/>
<br/>
<a id="bill.5.0.0"></a>

<a id="bill.5.1.0"></a><a id="pl.50.23"></a><var>50.23</var>    Section 1. Minnesota Statutes 2012, section 37.31, subdivision 8, is amended to read:<br/>
<a id="pl.50.24"></a><var>50.24</var>    Subd. 8. <b>Expiration.</b> The authority to issue bonds, other than bonds to refund <br/>
<a id="pl.50.25"></a><var>50.25</var>outstanding bonds, under this section expires July 1, 2015 2025.<br/>
<a id="pl.50.26"></a><var>50.26</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.5.2.0"></a><a id="pl.50.27"></a><var>50.27</var>    Sec. 2. Minnesota Statutes 2012, section 473.39, is amended by adding a subdivision <br/>
<a id="pl.50.28"></a><var>50.28</var>to read:<br/>
<a id="pl.50.29"></a><var>50.29</var>    Subd. 1t. <b>Obligations.</b> In addition to other authority in this section, the council may <br/>
<a id="pl.50.30"></a><var>50.30</var>issue certificates of indebtedness, bonds, or other obligations under this section in an <br/>
<a id="pl.50.31"></a><var>50.31</var>amount not exceeding $75,300,000 for capital expenditures as prescribed in the council's <br/>
<a id="pl.51.1"></a><var>51.1</var>transit capital improvement program and for related costs, including the costs of issuance <br/>
<a id="pl.51.2"></a><var>51.2</var>and sale of the obligations. Of this authorization, after July 1, 2014, the council may <br/>
<a id="pl.51.3"></a><var>51.3</var>issue certificates of indebtedness, bonds, or other obligations in an amount not exceeding <br/>
<a id="pl.51.4"></a><var>51.4</var>$37,000,000 and after July 1, 2015, the council may issue certificates of indebtedness, <br/>
<a id="pl.51.5"></a><var>51.5</var>bonds, or other obligations in an additional amount not exceeding $38,300,000.<br/>
<a id="pl.51.6"></a><var>51.6</var><b>EFFECTIVE DATE; APPLICATION.</b>This section is effective the day following <br/>
<a id="pl.51.7"></a><var>51.7</var>final enactment and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, <br/>
<a id="pl.51.8"></a><var>51.8</var>Scott, and Washington.<br/>
<br/>
<a id="bill.5.3.0"></a><a id="pl.51.9"></a><var>51.9</var>    Sec. 3. Laws 2003, chapter 127, article 12, section 28, is amended to read:<br/>
<a id="pl.51.10"></a><var>51.10</var>    Sec. 28. <b>NURSING HOME BONDS AUTHORIZED.</b><br/>
<a id="pl.51.11"></a><var>51.11</var>    Itasca County may issue bonds under Minnesota Statutes, sections 
         <statute_ref>376.55</statute_ref> and <br/>
<statute_ref><a id="pl.51.12"></a><var>51.12</var>376.56
         </statute_ref>, to finance the construction of a 35-bed nursing home facility to replace an existing <br/>
<a id="pl.51.13"></a><var>51.13</var>35-bed private facility located in the county. The bonds issued under this section must<br/>
<a id="pl.51.14"></a><var>51.14</var> may be payable solely from revenues and or may not be general obligations of the county.<br/>
<a id="pl.51.15"></a><var>51.15</var><b>EFFECTIVE DATE; LOCAL APPROVAL.</b>This section is effective the day after <br/>
<a id="pl.51.16"></a><var>51.16</var>compliance by the governing body of Itasca County and its chief clerical officer with <br/>
<a id="pl.51.17"></a><var>51.17</var>Minnesota Statutes, section 645.021, subdivisions 2 and 3.<br/>
<br/>
<a id="bill.5.4.0"></a><a id="pl.51.18"></a><var>51.18</var>    Sec. 4. Laws 2006, chapter 259, article 10, section 13, subdivision 4, is amended to read:<br/>
<a id="pl.51.19"></a><var>51.19</var>    Subd. 4. <b>Expiration.</b> The authority to approve tax increment financing plans to <br/>
<a id="pl.51.20"></a><var>51.20</var>establish a tax increment financing redevelopment district subject to this section expires <br/>
<a id="pl.51.21"></a><var>51.21</var>on December 31, 2014 2016.<br/>
<a id="pl.51.22"></a><var>51.22</var><b>EFFECTIVE DATE.</b>This section is effective upon approval of the governing body <br/>
<a id="pl.51.23"></a><var>51.23</var>of the city of Detroit Lakes and compliance with Minnesota Statutes, section 645.021, <br/>
<a id="pl.51.24"></a><var>51.24</var>subdivisions 2 and 3.<br/>
<br/>
<a id="bill.5.5.0"></a><a id="pl.51.25"></a><var>51.25</var>    Sec. 5. Laws 2008, chapter 366, article 5, section 36, subdivision 3, is amended to read:<br/>
<a id="pl.51.26"></a><var>51.26</var>    Subd. 3. <b>Authorized expenditures.</b> Tax increment from the district may be <br/>
<a id="pl.51.27"></a><var>51.27</var>expended only to pay principal and interest on bond obligations issued by the city of St. <br/>
<a id="pl.51.28"></a><var>51.28</var>Paul Housing and Redevelopment Authority in 1996 2009 for the convention center<br/>
<a id="pl.51.29"></a><var>51.29</var> RiverCentre Arena, including payment of principal and interest on any bonds issued to <br/>
<a id="pl.51.30"></a><var>51.30</var>repay the bonds or loans. All such expenditures are deemed to be activities within the <br/>
<a id="pl.51.31"></a><var>51.31</var>district under Minnesota Statutes, section 
         <statute_ref>469.1763, subdivisions 2</statute_ref>, 3, and 4.<br/>
<a id="pl.52.1"></a><var>52.1</var><b>EFFECTIVE DATE.</b>This section is effective without local approval under <br/>
<a id="pl.52.2"></a><var>52.2</var>Minnesota Statutes, section 645.023, subdivision 1, paragraph (a).<br/>
<br/>
<a id="bill.6.0.0"></a>

<a id="bill.6.1.0"></a><a id="pl.52.5"></a><var>52.5</var>    Section 1. Minnesota Statutes 2012, section 16A.152, subdivision 1b, is amended to <br/>
<a id="pl.52.6"></a><var>52.6</var>read:<br/>
<a id="pl.52.7"></a><var>52.7</var>    Subd. 1b. <b>Budget reserve </b><b>increase</b><b> level</b><b>.</b> On July 1, 2003, (a) The commissioner <br/>
<a id="pl.52.8"></a><var>52.8</var>of management and budget shall transfer $300,000,000 to the budget reserve account in <br/>
<a id="pl.52.9"></a><var>52.9</var>the general fund. On July 1, 2004, the commissioner of management and budget shall <br/>
<a id="pl.52.10"></a><var>52.10</var>transfer $296,000,000 to the budget reserve account in the general fund. The amounts <br/>
<a id="pl.52.11"></a><var>52.11</var>necessary for this purpose are appropriated from the general fund calculate the budget <br/>
<a id="pl.52.12"></a><var>52.12</var>reserve level by multiplying the current biennium's general fund nondedicated revenues <br/>
<a id="pl.52.13"></a><var>52.13</var>and the most recent budget reserve percentage under subdivision 8.<br/>
<a id="pl.52.14"></a><var>52.14</var>(b) If, on the basis of a November forecast of general fund revenues and <br/>
<a id="pl.52.15"></a><var>52.15</var>expenditures, the commissioner of management and budget determines that there will be <br/>
<a id="pl.52.16"></a><var>52.16</var>a positive unrestricted general fund balance at the close of the biennium and that the <br/>
<a id="pl.52.17"></a><var>52.17</var>provisions of subdivision 2, clauses (1), (2), (3), and (4), are satisfied, the commissioner <br/>
<a id="pl.52.18"></a><var>52.18</var>shall transfer to the budget reserve account in the general fund the amount necessary to <br/>
<a id="pl.52.19"></a><var>52.19</var>increase the budget reserve to the budget reserve level determined under paragraph (a). <br/>
<a id="pl.52.20"></a><var>52.20</var>The amount of the transfer authorized in this paragraph shall not exceed 33 percent of the <br/>
<a id="pl.52.21"></a><var>52.21</var>positive unrestricted general fund balance determined in the forecast.<br/>
<a id="pl.52.22"></a><var>52.22</var><b>EFFECTIVE DATE.</b>This section is effective for forecasts issued following final <br/>
<a id="pl.52.23"></a><var>52.23</var>enactment.<br/>
<br/>
<a id="bill.6.2.0"></a><a id="pl.52.24"></a><var>52.24</var>    Sec. 2. Minnesota Statutes 2012, section 16A.152, subdivision 2, is amended to read:<br/>
<a id="pl.52.25"></a><var>52.25</var>    Subd. 2. <b>Additional revenues; priority.</b> (a) If on the basis of a forecast of general <br/>
<a id="pl.52.26"></a><var>52.26</var>fund revenues and expenditures, the commissioner of management and budget determines <br/>
<a id="pl.52.27"></a><var>52.27</var>that there will be a positive unrestricted budgetary general fund balance at the close of <br/>
<a id="pl.52.28"></a><var>52.28</var>the biennium, the commissioner of management and budget must allocate money to the <br/>
<a id="pl.52.29"></a><var>52.29</var>following accounts and purposes in priority order:<br/>
<a id="pl.52.30"></a><var>52.30</var>    (1) the cash flow account established in subdivision 1 until that account reaches <br/>
<a id="pl.52.31"></a><var>52.31</var>$350,000,000;<br/>
<a id="pl.52.32"></a><var>52.32</var>    (2) the budget reserve account established in subdivision 1a until that account <br/>
<a id="pl.52.33"></a><var>52.33</var>reaches $653,000,000 $810,992,000;<br/>
<a id="pl.53.1"></a><var>53.1</var>    (3) the amount necessary to increase the aid payment schedule for school district <br/>
<a id="pl.53.2"></a><var>53.2</var>aids and credits payments in section 
         <statute_ref>127A.45</statute_ref> to not more than 90 percent rounded to the <br/>
<a id="pl.53.3"></a><var>53.3</var>nearest tenth of a percent without exceeding the amount available and with any remaining <br/>
<a id="pl.53.4"></a><var>53.4</var>funds deposited in the budget reserve; and<br/>
<a id="pl.53.5"></a><var>53.5</var>    (4) the amount necessary to restore all or a portion of the net aid reductions under <br/>
<a id="pl.53.6"></a><var>53.6</var>section 
         <statute_ref>127A.441</statute_ref> and to reduce the property tax revenue recognition shift under section <br/>
<statute_ref><a id="pl.53.7"></a><var>53.7</var>123B.75, subdivision 5
         </statute_ref>, by the same amount; and.<br/>
<a id="pl.53.8"></a><var>53.8</var>(5) to the state airports fund, the amount necessary to restore the amount transferred <br/>
<a id="pl.53.9"></a><var>53.9</var>from the state airports fund under Laws 2008, chapter 363, article 11, section 3, <br/>
<a id="pl.53.10"></a><var>53.10</var>subdivision 5.<br/>
<a id="pl.53.11"></a><var>53.11</var>    (b) The amounts necessary to meet the requirements of this section are appropriated <br/>
<a id="pl.53.12"></a><var>53.12</var>from the general fund within two weeks after the forecast is released or, in the case of <br/>
<a id="pl.53.13"></a><var>53.13</var>transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations <br/>
<a id="pl.53.14"></a><var>53.14</var>schedules otherwise established in statute.<br/>
<a id="pl.53.15"></a><var>53.15</var>    (c) The commissioner of management and budget shall certify the total dollar <br/>
<a id="pl.53.16"></a><var>53.16</var>amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of <br/>
<a id="pl.53.17"></a><var>53.17</var>education. The commissioner of education shall increase the aid payment percentage and <br/>
<a id="pl.53.18"></a><var>53.18</var>reduce the property tax shift percentage by these amounts and apply those reductions to <br/>
<a id="pl.53.19"></a><var>53.19</var>the current fiscal year and thereafter.<br/>
<a id="pl.53.20"></a><var>53.20</var><b>EFFECTIVE DATE.</b>This section is effective for forecasts issued following final <br/>
<a id="pl.53.21"></a><var>53.21</var>enactment.<br/>
<br/>
<a id="bill.6.3.0"></a><a id="pl.53.22"></a><var>53.22</var>    Sec. 3. Minnesota Statutes 2012, section 16A.152, subdivision 8, is amended to read:<br/>
<a id="pl.53.23"></a><var>53.23</var>    Subd. 8. <b>Report on budget reserve percentage.</b> (a) The commissioner of <br/>
<a id="pl.53.24"></a><var>53.24</var>management and budget must periodically review the formula developed as part of the <br/>
<a id="pl.53.25"></a><var>53.25</var>Budget Trends Study Commission authorized by Laws 2007, chapter 148, article 2, section <br/>
<a id="pl.53.26"></a><var>53.26</var>81, to estimate the percentage of the preceding biennium's general fund expenditures <br/>
<a id="pl.53.27"></a><var>53.27</var>and transfers recommended as a budget reserve The commissioner of management and <br/>
<a id="pl.53.28"></a><var>53.28</var>budget shall develop and annually review a methodology for evaluating the adequacy of <br/>
<a id="pl.53.29"></a><var>53.29</var>the budget reserve based on the volatility of Minnesota's general fund tax structure. The <br/>
<a id="pl.53.30"></a><var>53.30</var>review must take into consideration relevant statistical and economic literature. After <br/>
<a id="pl.53.31"></a><var>53.31</var>completing the review, the commissioner may revise the methodology if necessary. The <br/>
<a id="pl.53.32"></a><var>53.32</var>commissioner must use the methodology to annually estimate the percentage of the current <br/>
<a id="pl.53.33"></a><var>53.33</var>biennium's general fund nondedicated revenues recommended as a budget reserve.<br/>
<a id="pl.53.34"></a><var>53.34</var>    (b) The commissioner must annually review the variables and coefficients in the <br/>
<a id="pl.53.35"></a><var>53.35</var>formula used to model the base of the general fund taxes and the mix of taxes that provide <br/>
<a id="pl.54.1"></a><var>54.1</var>revenues to the general fund. If the commissioner determines that the variables and <br/>
<a id="pl.54.2"></a><var>54.2</var>coefficients have changed enough to result in a change in the percentage of the preceding <br/>
<a id="pl.54.3"></a><var>54.3</var>biennium's general fund expenditures and transfers recommended as a budget reserve, <br/>
<a id="pl.54.4"></a><var>54.4</var>the commissioner must update the variables and coefficients in the formula to reflect the <br/>
<a id="pl.54.5"></a><var>54.5</var>current base and mix of general fund taxes By January 15 of each year, the commissioner <br/>
<a id="pl.54.6"></a><var>54.6</var>shall report the percentage of the current biennium's general fund nondedicated revenue <br/>
<a id="pl.54.7"></a><var>54.7</var>that is recommended as a budget reserve to the chairs and ranking minority members of <br/>
<a id="pl.54.8"></a><var>54.8</var>the legislative committees with jurisdiction over the Department of Management and <br/>
<a id="pl.54.9"></a><var>54.9</var>Budget. The report must also specify:<br/>
<a id="pl.54.10"></a><var>54.10</var>    (1) whether the commissioner revised the recommendation as a result of significant <br/>
<a id="pl.54.11"></a><var>54.11</var>changes in the mix of general fund taxes or the base of one or more general fund taxes;<br/>
<a id="pl.54.12"></a><var>54.12</var>    (2) whether the commissioner revised the recommendation as a result of a revision <br/>
<a id="pl.54.13"></a><var>54.13</var>to the methodology; and<br/>
<a id="pl.54.14"></a><var>54.14</var>    (3) any additional appropriate information.<br/>
<a id="pl.54.15"></a><var>54.15</var>    (c) Every ten years, the commissioner must review the methodology underlying the <br/>
<a id="pl.54.16"></a><var>54.16</var>formula, taking into consideration relevant economic literature from the past ten years, <br/>
<a id="pl.54.17"></a><var>54.17</var>and determine if the formula remains adequate as a tool for estimating the percentage of <br/>
<a id="pl.54.18"></a><var>54.18</var>the preceding biennium's general fund expenditures and transfers recommended as a <br/>
<a id="pl.54.19"></a><var>54.19</var>budget reserve. If the commissioner determines that the methodology underlying the <br/>
<a id="pl.54.20"></a><var>54.20</var>formula is outdated, the commissioner must revise the formula.<br/>
<a id="pl.54.21"></a><var>54.21</var>    (d) By January 15 of each year, the commissioner must report to the chairs and <br/>
<a id="pl.54.22"></a><var>54.22</var>ranking minority members of the house of representatives Committee on Ways and Means <br/>
<a id="pl.54.23"></a><var>54.23</var>and the senate Committee on Finance, in compliance with sections 
<statute_ref>3.195</statute_ref> and 
<statute_ref>3.197</statute_ref>, <br/>
<a id="pl.54.24"></a><var>54.24</var>on the percentage of the preceding biennium's general fund expenditures and transfers <br/>
<a id="pl.54.25"></a><var>54.25</var>recommended as a budget reserve. The report must specify:<br/>
<a id="pl.54.26"></a><var>54.26</var>    (1) if the commissioner updated the variables and coefficients in the formula to <br/>
<a id="pl.54.27"></a><var>54.27</var>reflect significant changes to either the base of one or more general fund taxes or to the <br/>
<a id="pl.54.28"></a><var>54.28</var>mix of taxes that provide revenues to the general fund as provided in paragraph (b);<br/>
<a id="pl.54.29"></a><var>54.29</var>    (2) if the commissioner revised the formula after determining the methodology was <br/>
<a id="pl.54.30"></a><var>54.30</var>outdated as provided in paragraph (c); and<br/>
<a id="pl.54.31"></a><var>54.31</var>    (3) if the percentage of the preceding biennium's general fund expenditures and <br/>
<a id="pl.54.32"></a><var>54.32</var>transfers recommended as a budget reserve has changed as a result of an update of or a <br/>
<a id="pl.54.33"></a><var>54.33</var>revision to the formula.<br/>
<a id="pl.54.34"></a><var>54.34</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.6.4.0"></a><a id="pl.55.1"></a><var>55.1</var>    Sec. 4. Minnesota Statutes 2012, section 276A.01, is amended by adding a subdivision <br/>
<a id="pl.55.2"></a><var>55.2</var>to read:<br/>
<a id="pl.55.3"></a><var>55.3</var>    Subd. 17. <b>School fund allocation.</b> (a) "School fund allocation" means an amount <br/>
<a id="pl.55.4"></a><var>55.4</var>up to 25 percent of the areawide levy certified by the Iron Range Resources and <br/>
<a id="pl.55.5"></a><var>55.5</var>Rehabilitation Board to be used for the purposes of the Iron Range school consolidation <br/>
<a id="pl.55.6"></a><var>55.6</var>and cooperatively operated school account under section 298.28, subdivision 7a.<br/>
<a id="pl.55.7"></a><var>55.7</var>(b) The allocation under paragraph (a) shall only be made after the Iron Range <br/>
<a id="pl.55.8"></a><var>55.8</var>Resources and Rehabilitation Board has certified by June 30 that the Iron Range school <br/>
<a id="pl.55.9"></a><var>55.9</var>consolidation and cooperatively operated account has insufficient funds to make payments <br/>
<a id="pl.55.10"></a><var>55.10</var>as authorized under section 298.28, subdivision 7a.<br/>
<a id="pl.55.11"></a><var>55.11</var><b>EFFECTIVE DATE.</b>This section is effective beginning with taxes payable in 2015.<br/>
<br/>
<a id="bill.6.5.0"></a><a id="pl.55.12"></a><var>55.12</var>    Sec. 5. Minnesota Statutes 2012, section 276A.06, subdivision 3, is amended to read:<br/>
<a id="pl.55.13"></a><var>55.13</var>    Subd. 3. <b>Apportionment of levy.</b> The county auditor shall apportion the levy of <br/>
<a id="pl.55.14"></a><var>55.14</var>each governmental unit in the county in the manner prescribed by this subdivision. The <br/>
<a id="pl.55.15"></a><var>55.15</var>auditor shall:<br/>
<a id="pl.55.16"></a><var>55.16</var>(a) by August 20 of 1997 2014 and each subsequent year, determine the areawide <br/>
<a id="pl.55.17"></a><var>55.17</var>portion of the levy for each governmental unit by multiplying the local tax rate of the <br/>
<a id="pl.55.18"></a><var>55.18</var>governmental unit for the preceding levy year times the distribution value set forth in <br/>
<a id="pl.55.19"></a><var>55.19</var>subdivision 2, clause (b), times a fraction, the numerator of which is the difference <br/>
<a id="pl.55.20"></a><var>55.20</var>between the sum of the areawide levies for all governmental units in the area minus <br/>
<a id="pl.55.21"></a><var>55.21</var>the school fund allocation and the denominator is the sum of the areawide levy for all <br/>
<a id="pl.55.22"></a><var>55.22</var>governmental units in the area; and<br/>
<a id="pl.55.23"></a><var>55.23</var>(b) by September 5 of 1997 2014 and each subsequent year, determine the local <br/>
<a id="pl.55.24"></a><var>55.24</var>portion of the current year's levy by subtracting the resulting amount from clause (a) from <br/>
<a id="pl.55.25"></a><var>55.25</var>the governmental unit's current year's levy; and<br/>
<a id="pl.55.26"></a><var>55.26</var>(c) for determinations made under paragraph (a) in the case of school districts, <br/>
<a id="pl.55.27"></a><var>55.27</var>for taxes payable in 2002, exclude the general education tax rate and the portion of the <br/>
<a id="pl.55.28"></a><var>55.28</var>referendum tax rate attributable to the first $415 per pupil unit from the local tax rate for <br/>
<a id="pl.55.29"></a><var>55.29</var>the preceding levy year.<br/>
<a id="pl.55.30"></a><var>55.30</var><b>EFFECTIVE DATE.</b>This section is effective beginning with taxes payable in 2015.<br/>
<br/>
<a id="bill.6.6.0"></a><a id="pl.55.31"></a><var>55.31</var>    Sec. 6. Minnesota Statutes 2012, section 276A.06, subdivision 5, is amended to read:<br/>
<a id="pl.55.32"></a><var>55.32</var>    Subd. 5. <b>Areawide tax rate.</b> On or before August 25 of 1997 and each subsequent <br/>
<a id="pl.55.33"></a><var>55.33</var>year, the county auditor shall certify to the administrative auditor that portion of the <br/>
<a id="pl.56.1"></a><var>56.1</var>levy of each governmental unit determined pursuant to subdivision 3, clause (a). The <br/>
<a id="pl.56.2"></a><var>56.2</var>administrative auditor shall then determine the areawide tax rate sufficient to yield an <br/>
<a id="pl.56.3"></a><var>56.3</var>amount equal to the sum of the levies from the areawide net tax capacity plus the school <br/>
<a id="pl.56.4"></a><var>56.4</var>fund allocation. On or before September 1, the administrative auditor shall certify the <br/>
<a id="pl.56.5"></a><var>56.5</var>areawide tax rate to each of the county auditors.<br/>
<a id="pl.56.6"></a><var>56.6</var><b>EFFECTIVE DATE.</b>This section is effective beginning with taxes payable in 2015.<br/>
<br/>
<a id="bill.6.7.0"></a><a id="pl.56.7"></a><var>56.7</var>    Sec. 7. Minnesota Statutes 2012, section 276A.06, subdivision 8, is amended to read:<br/>
<a id="pl.56.8"></a><var>56.8</var>    Subd. 8. <b>Certification of values; payment.</b> The administrative auditor shall <br/>
<a id="pl.56.9"></a><var>56.9</var>determine for each county the difference between the total levy on distribution value <br/>
<a id="pl.56.10"></a><var>56.10</var>pursuant to subdivision 3, clause (a), including the school fund allocation within the <br/>
<a id="pl.56.11"></a><var>56.11</var>county and the total tax on contribution value pursuant to subdivision 7, within the county. <br/>
<a id="pl.56.12"></a><var>56.12</var>On or before May 16 of each year, the administrative auditor shall certify the differences <br/>
<a id="pl.56.13"></a><var>56.13</var>so determined and the county's portion of the school fund allocation to each county <br/>
<a id="pl.56.14"></a><var>56.14</var>auditor. In addition, the administrative auditor shall certify to those county auditors for <br/>
<a id="pl.56.15"></a><var>56.15</var>whose county the total tax on contribution value exceeds the total levy on distribution <br/>
<a id="pl.56.16"></a><var>56.16</var>value the settlement the county is to make to the other counties of the excess of the total <br/>
<a id="pl.56.17"></a><var>56.17</var>tax on contribution value over the total levy on distribution value in the county. On or <br/>
<a id="pl.56.18"></a><var>56.18</var>before June 15 and November 15 of each year, each county treasurer in a county having a <br/>
<a id="pl.56.19"></a><var>56.19</var>total tax on contribution value in excess of the total levy on distribution value shall pay <br/>
<a id="pl.56.20"></a><var>56.20</var>one-half of the excess to the other counties in accordance with the administrative auditor's <br/>
<a id="pl.56.21"></a><var>56.21</var>certification. On or before June 15 and November 15 of each year, each county treasurer <br/>
<a id="pl.56.22"></a><var>56.22</var>shall pay to the administrative auditor that county's share of the school fund allocation. On <br/>
<a id="pl.56.23"></a><var>56.23</var>or before December 1 of each year, the administrative auditor shall pay the school fund <br/>
<a id="pl.56.24"></a><var>56.24</var>allocation to the Iron Range Resources and Rehabilitation Board for deposit in the Iron <br/>
<a id="pl.56.25"></a><var>56.25</var>Range school consolidation and cooperatively operated account.<br/>
<a id="pl.56.26"></a><var>56.26</var><b>EFFECTIVE DATE.</b>This section is effective beginning with taxes payable in 2015.<br/>
<br/>
<a id="bill.6.8.0"></a><a id="pl.56.27"></a><var>56.27</var>    Sec. 8. Minnesota Statutes 2013 Supplement, section 298.17, is amended to read:<br/>
<a id="pl.56.28"></a><var>56.28</var><b>298.17 OCCUPATION TAXES TO BE APPORTIONED.</b><br/>
<a id="pl.56.29"></a><var>56.29</var>(a) All occupation taxes paid by persons, copartnerships, companies, joint stock <br/>
<a id="pl.56.30"></a><var>56.30</var>companies, corporations, and associations, however or for whatever purpose organized, <br/>
<a id="pl.56.31"></a><var>56.31</var>engaged in the business of mining or producing iron ore or other ores, when collected <br/>
<a id="pl.56.32"></a><var>56.32</var>shall be apportioned and distributed in accordance with the Constitution of the state of <br/>
<a id="pl.56.33"></a><var>56.33</var>Minnesota, article X, section 3, in the manner following: 90 percent shall be deposited <br/>
<a id="pl.57.1"></a><var>57.1</var>in the state treasury and credited to the general fund of which four-ninths shall be used <br/>
<a id="pl.57.2"></a><var>57.2</var>for the support of elementary and secondary schools; and ten percent of the proceeds of <br/>
<a id="pl.57.3"></a><var>57.3</var>the tax imposed by this section shall be deposited in the state treasury and credited to the <br/>
<a id="pl.57.4"></a><var>57.4</var>general fund for the general support of the university.<br/>
<a id="pl.57.5"></a><var>57.5</var>(b) Of the money apportioned to the general fund by this section: (1) there is <br/>
<a id="pl.57.6"></a><var>57.6</var>annually appropriated and credited to the mining environmental and regulatory account <br/>
<a id="pl.57.7"></a><var>57.7</var>in the special revenue fund an amount equal to that which would have been generated <br/>
<a id="pl.57.8"></a><var>57.8</var>by a 2-1/2 cent tax imposed by section 
         <statute_ref>298.24</statute_ref> on each taxable ton produced in the <br/>
<a id="pl.57.9"></a><var>57.9</var>preceding calendar year. Money in the mining environmental and regulatory account is <br/>
<a id="pl.57.10"></a><var>57.10</var>appropriated annually to the commissioner of natural resources to fund agency staff to <br/>
<a id="pl.57.11"></a><var>57.11</var>work on environmental issues and provide regulatory services for ferrous and nonferrous <br/>
<a id="pl.57.12"></a><var>57.12</var>mining operations in this state. Payment to the mining environmental and regulatory <br/>
<a id="pl.57.13"></a><var>57.13</var>account shall be made by July 1 annually. The commissioner of natural resources shall <br/>
<a id="pl.57.14"></a><var>57.14</var>execute an interagency agreement with the Pollution Control Agency to assist with the <br/>
<a id="pl.57.15"></a><var>57.15</var>provision of environmental regulatory services such as monitoring and permitting required <br/>
<a id="pl.57.16"></a><var>57.16</var>for ferrous and nonferrous mining operations; and (2) there is annually appropriated and <br/>
<a id="pl.57.17"></a><var>57.17</var>credited to the Iron Range Resources and Rehabilitation Board account in the special <br/>
<a id="pl.57.18"></a><var>57.18</var>revenue fund an amount equal to that which would have been generated by a 1.5 cent tax <br/>
<a id="pl.57.19"></a><var>57.19</var>imposed by section 
         <statute_ref>298.24</statute_ref> on each taxable ton produced in the preceding calendar year, to <br/>
<a id="pl.57.20"></a><var>57.20</var>be expended for the purposes of section 
         <statute_ref>298.22</statute_ref>; and (3) there is annually appropriated <br/>
<a id="pl.57.21"></a><var>57.21</var>and credited to the Iron Range Resources and Rehabilitation Board account in the special <br/>
<a id="pl.57.22"></a><var>57.22</var>revenue fund for transfer to the Iron Range school consolidation and cooperatively <br/>
<a id="pl.57.23"></a><var>57.23</var>operated school account under section 298.28, subdivision 7a, an amount equal to that <br/>
<a id="pl.57.24"></a><var>57.24</var>which would have been generated by a six cent tax imposed by section 298.24 on each <br/>
<a id="pl.57.25"></a><var>57.25</var>taxable ton produced in the preceding calendar year. Payment to the Iron Range Resources <br/>
<a id="pl.57.26"></a><var>57.26</var>and Rehabilitation Board account shall be made by May 15 annually.<br/>
<a id="pl.57.27"></a><var>57.27</var>(c) The money appropriated pursuant to paragraph (b), clause (2), shall be used (i) <br/>
<a id="pl.57.28"></a><var>57.28</var>to provide environmental development grants to local governments located within any <br/>
<a id="pl.57.29"></a><var>57.29</var>county in region 3 as defined in governor's executive order number 60, issued on June <br/>
<a id="pl.57.30"></a><var>57.30</var>12, 1970, which does not contain a municipality qualifying pursuant to section 
         <statute_ref>273.134, <br/>
<a id="pl.57.31"></a><var>57.31</var>paragraph (b)
         </statute_ref>, or (ii) to provide economic development loans or grants to businesses <br/>
<a id="pl.57.32"></a><var>57.32</var>located within any such county, provided that the county board or an advisory group <br/>
<a id="pl.57.33"></a><var>57.33</var>appointed by the county board to provide recommendations on economic development <br/>
<a id="pl.57.34"></a><var>57.34</var>shall make recommendations to the Iron Range Resources and Rehabilitation Board <br/>
<a id="pl.57.35"></a><var>57.35</var>regarding the loans. Payment to the Iron Range Resources and Rehabilitation Board <br/>
<a id="pl.57.36"></a><var>57.36</var>account shall be made by May 15 annually.<br/>
<a id="pl.58.1"></a><var>58.1</var>(d) Of the money allocated to Koochiching County, one-third must be paid to the <br/>
<a id="pl.58.2"></a><var>58.2</var>Koochiching County Economic Development Commission.<br/>
<a id="pl.58.3"></a><var>58.3</var><b>EFFECTIVE DATE.</b>This section is effective beginning with the 2014 production <br/>
<a id="pl.58.4"></a><var>58.4</var>year.<br/>
<br/>
<a id="bill.6.9.0"></a><a id="pl.58.5"></a><var>58.5</var>    Sec. 9. Minnesota Statutes 2012, section 298.225, subdivision 1, is amended to read:<br/>
<a id="pl.58.6"></a><var>58.6</var>    Subdivision 1. <b>Guaranteed distribution.</b> (a) The distribution of the taconite <br/>
<a id="pl.58.7"></a><var>58.7</var>production tax as provided in section 
         <statute_ref>298.28</statute_ref>, subdivisions 3 to 5, 6, paragraph (b), 7, and <br/>
<a id="pl.58.8"></a><var>58.8</var>8, shall equal the lesser of the following amounts:<br/>
<a id="pl.58.9"></a><var>58.9</var>(1) the amount distributed pursuant to this section and section 
         <statute_ref>298.28</statute_ref>, with respect <br/>
<a id="pl.58.10"></a><var>58.10</var>to 1983 production if the production for the year prior to the distribution year is no less <br/>
<a id="pl.58.11"></a><var>58.11</var>than 42,000,000 taxable tons. If the production is less than 42,000,000 taxable tons, the <br/>
<a id="pl.58.12"></a><var>58.12</var>amount of the distributions shall be reduced proportionately at the rate of two percent <br/>
<a id="pl.58.13"></a><var>58.13</var>for each 1,000,000 tons, or part of 1,000,000 tons by which the production is less than <br/>
<a id="pl.58.14"></a><var>58.14</var>42,000,000 tons; or<br/>
<a id="pl.58.15"></a><var>58.15</var>(2)(i) for the distributions made pursuant to section 
         <statute_ref>298.28, subdivisions 4, <br/>
<a id="pl.58.16"></a><var>58.16</var>paragraphs (b)
         </statute_ref> and (c), and 6, paragraph (c), 31.2 percent of the amount distributed <br/>
<a id="pl.58.17"></a><var>58.17</var>pursuant to this section and section 
         <statute_ref>298.28</statute_ref>, with respect to 1983 production;<br/>
<a id="pl.58.18"></a><var>58.18</var>(ii) for the distributions made pursuant to section 
         <statute_ref>298.28, subdivision 5</statute_ref>, paragraphs <br/>
<a id="pl.58.19"></a><var>58.19</var>(b) and (d), 75 percent of the amount distributed pursuant to this section and section <br/>
<statute_ref><a id="pl.58.20"></a><var>58.20</var>298.28
         </statute_ref>, with respect to 1983 production provided that the aid guarantee for distributions <br/>
<a id="pl.58.21"></a><var>58.21</var>under section 298.28, subdivision 5, paragraph (b), shall be reduced by five cents per <br/>
<a id="pl.58.22"></a><var>58.22</var>taxable ton for production years 2014 and thereafter.<br/>
<a id="pl.58.23"></a><var>58.23</var>(b) The distribution of the taconite production tax as provided in section 
         <statute_ref>298.28, <br/>
<a id="pl.58.24"></a><var>58.24</var>subdivision 2
         </statute_ref>, shall equal the following amount:<br/>
<a id="pl.58.25"></a><var>58.25</var>(1) if the production for the year prior to the distribution year is at least 42,000,000 <br/>
<a id="pl.58.26"></a><var>58.26</var>taxable tons, the amount distributed pursuant to this section and section 
         <statute_ref>298.28</statute_ref> with <br/>
<a id="pl.58.27"></a><var>58.27</var>respect to 1999 production; or<br/>
<a id="pl.58.28"></a><var>58.28</var>(2) if the production for the year prior to the distribution year is less than 42,000,000 <br/>
<a id="pl.58.29"></a><var>58.29</var>taxable tons, the amount distributed pursuant to this section and section 
         <statute_ref>298.28</statute_ref> with respect <br/>
<a id="pl.58.30"></a><var>58.30</var>to 1999 production, reduced proportionately at the rate of two percent for each 1,000,000 <br/>
<a id="pl.58.31"></a><var>58.31</var>tons or part of 1,000,000 tons by which the production is less than 42,000,000 tons.<br/>
<a id="pl.58.32"></a><var>58.32</var><b>EFFECTIVE DATE.</b>This section is effective beginning with the 2015 distribution.<br/>
<br/>
<a id="bill.6.10.0"></a><a id="pl.58.33"></a><var>58.33</var>    Sec. 10. Minnesota Statutes 2012, section 298.28, subdivision 3, is amended to read:<br/>
<a id="pl.59.1"></a><var>59.1</var>    Subd. 3. <b>Cities; towns.</b> (a) 12.5 cents per taxable ton, less any amount distributed <br/>
<a id="pl.59.2"></a><var>59.2</var>under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid <br/>
<a id="pl.59.3"></a><var>59.3</var>account to be distributed as provided in section 
         <statute_ref>298.282</statute_ref>.<br/>
<a id="pl.59.4"></a><var>59.4</var>    (b) An amount must be allocated to towns or cities that is annually certified by <br/>
<a id="pl.59.5"></a><var>59.5</var>the county auditor of a county containing a taconite tax relief area as defined in section <br/>
<statute_ref><a id="pl.59.6"></a><var>59.6</var>273.134, paragraph (b)
         </statute_ref>, within which there is (1) an organized township if, as of January <br/>
<a id="pl.59.7"></a><var>59.7</var>2, 1982, more than 75 percent of the assessed valuation of the township consists of iron <br/>
<a id="pl.59.8"></a><var>59.8</var>ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation <br/>
<a id="pl.59.9"></a><var>59.9</var>of the city consists of iron ore.<br/>
<a id="pl.59.10"></a><var>59.10</var>    (c) The amount allocated under paragraph (b) will be the portion of a township's or <br/>
<a id="pl.59.11"></a><var>59.11</var>city's certified levy equal to the proportion of (1) the difference between 50 percent of <br/>
<a id="pl.59.12"></a><var>59.12</var>January 2, 1982, assessed value in the case of a township and 50 percent of the January 2, <br/>
<a id="pl.59.13"></a><var>59.13</var>1980, assessed value in the case of a city and its current assessed value to (2) the sum of <br/>
<a id="pl.59.14"></a><var>59.14</var>its current assessed value plus the difference determined in (1), provided that the amount <br/>
<a id="pl.59.15"></a><var>59.15</var>distributed shall not exceed $55 per capita in the case of a township or $75 per capita in <br/>
<a id="pl.59.16"></a><var>59.16</var>the case of a city. For purposes of this limitation, population will be determined according <br/>
<a id="pl.59.17"></a><var>59.17</var>to the 1980 decennial census conducted by the United States Bureau of the Census. If the <br/>
<a id="pl.59.18"></a><var>59.18</var>current assessed value of the township exceeds 50 percent of the township's January 2, <br/>
<a id="pl.59.19"></a><var>59.19</var>1982, assessed value, or if the current assessed value of the city exceeds 50 percent of the <br/>
<a id="pl.59.20"></a><var>59.20</var>city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this <br/>
<a id="pl.59.21"></a><var>59.21</var>paragraph, "assessed value," when used in reference to years other than 1980 or 1982, <br/>
<a id="pl.59.22"></a><var>59.22</var>means the appropriate net tax capacities multiplied by 10.2.<br/>
<a id="pl.59.23"></a><var>59.23</var>    (d) In addition to other distributions under this subdivision, three cents per taxable <br/>
<a id="pl.59.24"></a><var>59.24</var>ton for distributions in 2009 must be allocated for distribution to towns that are entirely <br/>
<a id="pl.59.25"></a><var>59.25</var>located within the taconite tax relief area defined in section 
         <statute_ref>273.134</statute_ref>, paragraph (b). For <br/>
<a id="pl.59.26"></a><var>59.26</var>distribution in 2010 through 2014 and for distribution in 2018 and subsequent years, the <br/>
<a id="pl.59.27"></a><var>59.27</var>three-cent amount must be annually increased in the same proportion as the increase <br/>
<a id="pl.59.28"></a><var>59.28</var>in the implicit price deflator as provided in section 
         <statute_ref>298.24, subdivision 1</statute_ref>. The amount <br/>
<a id="pl.59.29"></a><var>59.29</var>available under this paragraph will be distributed to eligible towns on a per capita basis, <br/>
<a id="pl.59.30"></a><var>59.30</var>provided that no town may receive more than $50,000 in any year under this paragraph. <br/>
<a id="pl.59.31"></a><var>59.31</var>Any amount of the distribution that exceeds the $50,000 limitation for a town under this <br/>
<a id="pl.59.32"></a><var>59.32</var>paragraph must be redistributed on a per capita basis among the other eligible towns, to <br/>
<a id="pl.59.33"></a><var>59.33</var>whose distributions do not exceed $50,000.<br/>
<a id="pl.59.34"></a><var>59.34</var><b>EFFECTIVE DATE.</b>This section is effective beginning for the 2014 distribution.<br/>
<br/>
<a id="bill.6.11.0"></a><a id="pl.59.35"></a><var>59.35</var>    Sec. 11. Minnesota Statutes 2012, section 298.28, subdivision 5, is amended to read:<br/>
<a id="pl.60.1"></a><var>60.1</var>    Subd. 5. <b>Counties.</b> (a) 26.05 21.05 cents per taxable ton is allocated to counties to <br/>
<a id="pl.60.2"></a><var>60.2</var>be distributed, based upon certification by the commissioner of revenue, under paragraphs <br/>
<a id="pl.60.3"></a><var>60.3</var>(b) to (d).<br/>
<a id="pl.60.4"></a><var>60.4</var>    (b) 15.525 10.525 cents per taxable ton shall be distributed to the county in which <br/>
<a id="pl.60.5"></a><var>60.5</var>the taconite is mined or quarried or in which the concentrate is produced, less any <br/>
<a id="pl.60.6"></a><var>60.6</var>amount which is to be distributed pursuant to paragraph (c). The apportionment formula <br/>
<a id="pl.60.7"></a><var>60.7</var>prescribed in subdivision 2 is the basis for the distribution.<br/>
<a id="pl.60.8"></a><var>60.8</var>    (c) If an electric power plant owned by and providing the primary source of power for <br/>
<a id="pl.60.9"></a><var>60.9</var>a taxpayer mining and concentrating taconite is located in a county other than the county <br/>
<a id="pl.60.10"></a><var>60.10</var>in which the mining and the concentrating processes are conducted, one cent per taxable <br/>
<a id="pl.60.11"></a><var>60.11</var>ton of the tax distributed to the counties pursuant to paragraph (b) and imposed on and <br/>
<a id="pl.60.12"></a><var>60.12</var>collected from such taxpayer shall be paid to the county in which the power plant is located.<br/>
<a id="pl.60.13"></a><var>60.13</var>    (d) 10.525 cents per taxable ton shall be paid to the county from which the taconite <br/>
<a id="pl.60.14"></a><var>60.14</var>was mined, quarried or concentrated to be deposited in the county road and bridge fund. <br/>
<a id="pl.60.15"></a><var>60.15</var>If the mining, quarrying and concentrating, or separate steps in any of those processes <br/>
<a id="pl.60.16"></a><var>60.16</var>are carried on in more than one county, the commissioner shall follow the apportionment <br/>
<a id="pl.60.17"></a><var>60.17</var>formula prescribed in subdivision 2.<br/>
<a id="pl.60.18"></a><var>60.18</var><b>EFFECTIVE DATE.</b>This section is effective beginning with the 2015 distribution.<br/>
<br/>
<a id="bill.6.12.0"></a><a id="pl.60.19"></a><var>60.19</var>    Sec. 12. Minnesota Statutes 2012, section 298.28, subdivision 7, is amended to read:<br/>
<a id="pl.60.20"></a><var>60.20</var>    Subd. 7. <b>Iron Range Resources and Rehabilitation Board.</b> For the 1998 <br/>
<a id="pl.60.21"></a><var>60.21</var>distribution, 6.5 cents per taxable ton shall be paid to the Iron Range Resources and <br/>
<a id="pl.60.22"></a><var>60.22</var>Rehabilitation Board for the purposes of section 
         <statute_ref>298.22</statute_ref>. That amount shall be increased<br/>
<a id="pl.60.23"></a><var>60.23</var> in for distribution years 1999 through 2014 and for distribution in 2018 and subsequent <br/>
<a id="pl.60.24"></a><var>60.24</var>years in the same proportion as the increase in the implicit price deflator as provided in <br/>
<a id="pl.60.25"></a><var>60.25</var>section 
         <statute_ref>298.24, subdivision 1</statute_ref>. The amount distributed pursuant to this subdivision shall <br/>
<a id="pl.60.26"></a><var>60.26</var>be expended within or for the benefit of the taconite assistance area defined in section <br/>
<statute_ref><a id="pl.60.27"></a><var>60.27</var>273.1341
         </statute_ref>. No part of the fund provided in this subdivision may be used to provide loans <br/>
<a id="pl.60.28"></a><var>60.28</var>for the operation of private business unless the loan is approved by the governor.<br/>
<a id="pl.60.29"></a><var>60.29</var><b>EFFECTIVE DATE.</b>This section is effective beginning for the 2014 distribution.<br/>
<br/>
<a id="bill.6.13.0"></a><a id="pl.60.30"></a><var>60.30</var>    Sec. 13. Minnesota Statutes 2012, section 298.28, is amended by adding a subdivision <br/>
<a id="pl.60.31"></a><var>60.31</var>to read:<br/>
<a id="pl.60.32"></a><var>60.32</var>    Subd. 7a. <b>Iron Range school consolidation and cooperatively operated school </b><br/>
<a id="pl.60.33"></a><var>60.33</var><b>account.</b> The following amounts must be allocated to the Iron Range Resources and <br/>
<a id="pl.61.1"></a><var>61.1</var>Rehabilitation Board to be deposited in the Iron Range school consolidation and <br/>
<a id="pl.61.2"></a><var>61.2</var>cooperatively operated school account that is hereby created:<br/>
<a id="pl.61.3"></a><var>61.3</var>(1) ten cents per taxable ton of the tax imposed under section 298.24;<br/>
<a id="pl.61.4"></a><var>61.4</var>(2) the amount as determined under section 298.17, paragraph (b), clause (3); and<br/>
<a id="pl.61.5"></a><var>61.5</var>(3) for distributions in 2015 through 2017, an amount equal to two-thirds of the <br/>
<a id="pl.61.6"></a><var>61.6</var>increased tax proceeds attributable to the increase in the implicit price deflator as provided <br/>
<a id="pl.61.7"></a><var>61.7</var>in section 298.24, subdivision 1.<br/>
<a id="pl.61.8"></a><var>61.8</var>Expenditures from this account shall be made only to provide disbursements to <br/>
<a id="pl.61.9"></a><var>61.9</var>assist school districts with the payment of bonds that were issued for qualified school <br/>
<a id="pl.61.10"></a><var>61.10</var>projects, or for any other disbursement as approved by the Iron Range Resources and <br/>
<a id="pl.61.11"></a><var>61.11</var>Rehabilitation Board. For purposes of this section, "qualified school projects" means <br/>
<a id="pl.61.12"></a><var>61.12</var>school projects within the taconite assistance area as defined in section 273.1341, that <br/>
<a id="pl.61.13"></a><var>61.13</var>were (1) approved, by referendum, after December 7, 2009; and (2) approved by the <br/>
<a id="pl.61.14"></a><var>61.14</var>commissioner of education pursuant to section 123B.71.<br/>
<a id="pl.61.15"></a><var>61.15</var>No expenditure under this section shall be made unless approved by seven members <br/>
<a id="pl.61.16"></a><var>61.16</var>of the Iron Range Resources and Rehabilitation Board.<br/>
<a id="pl.61.17"></a><var>61.17</var><b>EFFECTIVE DATE.</b>This section is effective for production year 2014 and <br/>
<a id="pl.61.18"></a><var>61.18</var>thereafter.<br/>
<br/>
<a id="bill.6.14.0"></a><a id="pl.61.19"></a><var>61.19</var>    Sec. 14. Minnesota Statutes 2012, section 298.28, subdivision 9a, is amended to read:<br/>
<a id="pl.61.20"></a><var>61.20</var>    Subd. 9a. <b>Taconite economic development fund.</b> (a) 30.1 25.1 cents per ton for <br/>
<a id="pl.61.21"></a><var>61.21</var>distributions in 2002 and thereafter must be paid to the taconite economic development <br/>
<a id="pl.61.22"></a><var>61.22</var>fund. No distribution shall be made under this paragraph in 2004 or any subsequent year <br/>
<a id="pl.61.23"></a><var>61.23</var>in which total industry production falls below 30 million tons. Distribution shall only be <br/>
<a id="pl.61.24"></a><var>61.24</var>made to a taconite producer's fund under section 
         <statute_ref>298.227</statute_ref> if the producer timely pays its <br/>
<a id="pl.61.25"></a><var>61.25</var>tax under section 
         <statute_ref>298.24</statute_ref> by the dates provided under section 
         <statute_ref>298.27</statute_ref>, or pursuant to the <br/>
<a id="pl.61.26"></a><var>61.26</var>due dates provided by an administrative agreement with the commissioner.<br/>
<a id="pl.61.27"></a><var>61.27</var>(b) An amount equal to 50 percent of the tax under section 
         <statute_ref>298.24</statute_ref> for concentrate <br/>
<a id="pl.61.28"></a><var>61.28</var>sold in the form of pellet chips and fines not exceeding 5/16 inch in size and not including <br/>
<a id="pl.61.29"></a><var>61.29</var>crushed pellets shall be paid to the taconite economic development fund. The amount <br/>
<a id="pl.61.30"></a><var>61.30</var>paid shall not exceed $700,000 annually for all companies. If the initial amount to be <br/>
<a id="pl.61.31"></a><var>61.31</var>paid to the fund exceeds this amount, each company's payment shall be prorated so the <br/>
<a id="pl.61.32"></a><var>61.32</var>total does not exceed $700,000.<br/>
<a id="pl.61.33"></a><var>61.33</var><b>EFFECTIVE DATE.</b>This section is effective beginning with the 2015 distribution.<br/>
<br/>
<a id="bill.6.15.0"></a><a id="pl.62.1"></a><var>62.1</var>    Sec. 15. Minnesota Statutes 2013 Supplement, section 298.28, subdivision 10, is <br/>
<a id="pl.62.2"></a><var>62.2</var>amended to read:<br/>
<a id="pl.62.3"></a><var>62.3</var>    Subd. 10. <b>Increase.</b> (a) Except as provided in paragraph (b), beginning with for<br/>
<a id="pl.62.4"></a><var>62.4</var> distributions in 2000 through 2014 and for distributions in 2018 and subsequent years, <br/>
<a id="pl.62.5"></a><var>62.5</var>the amount determined under subdivision 9 shall be increased in the same proportion <br/>
<a id="pl.62.6"></a><var>62.6</var>as the increase in the implicit price deflator as provided in section 
         <statute_ref>298.24, subdivision <br/>
<a id="pl.62.7"></a><var>62.7</var>1
         </statute_ref>. Beginning with distributions in 2015 2018, the amount determined under subdivision <br/>
<a id="pl.62.8"></a><var>62.8</var>6, paragraph (a), shall be increased in the same proportion as the increase in the implicit <br/>
<a id="pl.62.9"></a><var>62.9</var>price deflator as provided in section 
         <statute_ref>298.24, subdivision 1</statute_ref>.<br/>
<a id="pl.62.10"></a><var>62.10</var>(b) For distributions in 2005 and subsequent years, an amount equal to the increased <br/>
<a id="pl.62.11"></a><var>62.11</var>tax proceeds attributable to the increase in the implicit price deflator as provided in <br/>
<a id="pl.62.12"></a><var>62.12</var>section 
         <statute_ref>298.24, subdivision 1</statute_ref>, for taxes paid in 2005, except for the amount of revenue <br/>
<a id="pl.62.13"></a><var>62.13</var>increases provided in subdivision 4, paragraph (d), is distributed to the grant and loan fund <br/>
<a id="pl.62.14"></a><var>62.14</var>established in section 
         <statute_ref>298.2961, subdivision 4</statute_ref>.<br/>
<a id="pl.62.15"></a><var>62.15</var>(c) For distributions in 2015 through 2017, an amount equal to two-thirds of the <br/>
<a id="pl.62.16"></a><var>62.16</var>increased tax proceeds attributable to the increase in the implicit price deflator as provided <br/>
<a id="pl.62.17"></a><var>62.17</var>in section 298.24, subdivision 1, is distributed to the Iron Range school consolidation and <br/>
<a id="pl.62.18"></a><var>62.18</var>cooperatively operated school account in section 298.28, subdivision 7a, with the remaining <br/>
<a id="pl.62.19"></a><var>62.19</var>one-third to be distributed to the Douglas J. Johnson Economic Protection Trust Fund.<br/>
<a id="pl.62.20"></a><var>62.20</var><b>EFFECTIVE DATE.</b>This section is effective beginning for the 2015 distribution.<br/>
<br/>
<a id="bill.6.16.0"></a><a id="pl.62.21"></a><var>62.21</var>    Sec. 16. <b>BUDGET RESERVE INCREASE.</b><br/>
<a id="pl.62.22"></a><var>62.22</var>On July 1, 2014, the commissioner of management and budget shall transfer <br/>
<a id="pl.62.23"></a><var>62.23</var>$150,000,000 to the budget reserve in the general fund.<br/>
<a id="pl.62.24"></a><var>62.24</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2014.<br/>
<br/>
<a id="bill.6.17.0"></a><a id="pl.62.25"></a><var>62.25</var>    Sec. 17. <b>APPROPRIATION.</b><br/>
<a id="pl.62.26"></a><var>62.26</var>$1,000,000 is appropriated from the general fund to the commissioner of revenue <br/>
<a id="pl.62.27"></a><var>62.27</var>in fiscal year 2014 for the cost of administering this act. This appropriation does not <br/>
<a id="pl.62.28"></a><var>62.28</var>cancel but is available until June 30, 2015. This is a onetime appropriation and does not <br/>
<a id="pl.62.29"></a><var>62.29</var>renew or become part of the base budget.<br/>
<a id="pl.62.30"></a><var>62.30</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>