1.1 	A bill for an act
1.2 	 relating to financing of state and local government; making changes to individual 
1.3 	income, corporate franchise, property, sales and use, estate, mineral, liquor, 
1.4 	tobacco, aggregate materials, local, and other taxes and tax-related provisions; 
1.5 	restoring the school district current year aid payment shift percentage to 90; 
1.6 	conforming to federal section 179 expensing allowances; imposing an income 
1.7 	surcharge; allowing an up-front exemption for capital equipment; modifying 
1.8 	the definition of income for the property tax refund; decreasing the threshold 
1.9 	percentage for the homestead credit refund for homeowners and the property 
1.10 	tax refund for renters; increasing the maximum refunds for renters; changing 
1.11 	property tax aids and credits; imposing an insurance surcharge; modifying 
1.12 	pension aids; providing pension funding; changing provisions of the Sustainable 
1.13 	Forest Incentive Act; modifying definitions for property taxes; providing 
1.14 	exemptions; creating joint entertainment facilities coordination; imposing a 
1.15 	sports memorabilia gross receipts tax; changing tax rates on tobacco and liquor; 
1.16 	providing reimbursement for certain property tax abatement; modifying the small 
1.17 	business investment tax credit; expanding the definition of domestic corporation 
1.18 	to include foreign corporations incorporated in or doing business in tax havens; 
1.19 	making changes to additions and subtractions from federal taxable income; 
1.20 	changing rates for individuals, estates, and trusts; providing for charitable 
1.21 	contributions and veterans jobs tax credits; modifying estate tax exclusions for 
1.22 	qualifying small business and farm property; imposing a gift tax; expanding 
1.23 	the sales tax to include suite and box seat rentals; modifying the definition 
1.24 	of sales and purchase; changing the tax rate and modifying provisions for the 
1.25 	rental motor vehicle tax; modifying nexus provisions; providing for multiple 
1.26 	points of use certificates; modifying exemptions; authorizing local sales taxes; 
1.27 	authorizing economic development powers; providing authority, organization, 
1.28 	powers, and duties for development of a Destination Medical Center; authorizing 
1.29 	state infrastructure aid; imposing a tax on extraction and processing of fracturing 
1.30 	sand; providing a taconite production tax grant for water supply improvements; 
1.31 	authorizing taconite production tax bonds for grants to school districts; modifying 
1.32 	and providing provisions for public finance; modifying the definition of market 
1.33 	value for tax, debt, and other purposes; making conforming, policy, and technical 
1.34 	changes to tax provisions; requiring studies and reports; appropriating money;
1.35 	amending Minnesota Statutes 2012, sections 16A.152, subdivision 2; 16A.46; 
1.36 	38.18; 40A.15, subdivision 2; 69.011, subdivision 1; 69.021, subdivisions 7, 8, by 
1.37 	adding a subdivision; 88.51, subdivision 3; 103B.102, subdivision 3; 103B.245, 
1.38 	subdivision 3; 103B.251, subdivision 8; 103B.335; 103B.3369, subdivision 5; 
1.39 	103B.635, subdivision 2; 103B.691, subdivision 2; 103C.501, subdivision 4; 
2.1 	103D.905, subdivisions 2, 3, 8; 103F.405, subdivision 1; 116J.8737, subdivisions 
2.2 	1, 2, 8; 117.025, subdivision 7; 118A.04, subdivision 3; 118A.05, subdivision 
2.3 	5; 123A.455, subdivision 1; 123B.75, subdivision 5; 126C.48, subdivision 8; 
2.4 	127A.45, subdivision 2; 127A.48, subdivision 1; 138.053; 144F.01, subdivision 
2.5 	4; 162.07, subdivisions 3, 4; 163.04, subdivision 3; 163.051; 163.06, subdivision 
2.6 	6; 165.10, subdivision 1; 168.012, subdivision 9, by adding a subdivision; 
2.7 	216C.436, subdivision 7; 237.52, subdivision 3, by adding a subdivision; 
2.8 	270.077; 270.41, subdivision 5; 270B.01, subdivision 8; 270B.12, subdivision 
2.9 	4; 270C.34, subdivision 1; 270C.38, subdivision 1; 270C.42, subdivision 2; 
2.10 	270C.56, subdivision 1; 271.06, by adding a subdivision; 272.01, subdivision 2; 
2.11 	272.02, subdivisions 39, 97, by adding subdivisions; 272.03, subdivision 9, by 
2.12 	adding subdivisions; 273.032; 273.11, subdivision 1, by adding a subdivision; 
2.13 	273.114, subdivision 6; 273.124, subdivisions 3a, 13; 273.13, subdivisions 
2.14 	21b, 23, 25; 273.1398, subdivisions 3, 4; 273.19, subdivision 1; 273.372, 
2.15 	subdivision 4; 273.39; 275.011, subdivision 1; 275.077, subdivision 2; 275.71, 
2.16 	subdivision 4; 276.04, subdivision 2; 276A.01, subdivisions 10, 12, 13, 15; 
2.17 	276A.06, subdivision 10; 279.01, subdivision 1, by adding a subdivision; 279.02; 
2.18 	279.06, subdivision 1; 287.05, by adding a subdivision; 287.08; 287.20, by 
2.19 	adding a subdivision; 287.23, subdivision 1; 287.385, subdivision 7; 289A.02, 
2.20 	subdivision 7; 289A.08, subdivisions 1, 3, 7; 289A.10, subdivision 1, by adding 
2.21 	a subdivision; 289A.12, subdivision 14, by adding a subdivision; 289A.18, by 
2.22 	adding a subdivision; 289A.20, subdivisions 3, 4, by adding a subdivision; 
2.23 	289A.26, subdivisions 3, 4, 7, 9; 289A.55, subdivision 9; 289A.60, subdivision 
2.24 	4; 290.01, subdivisions 5, 19, as amended, 19a, 19b, 19c, 19d, 31, as amended, 
2.25 	by adding subdivisions; 290.06, subdivisions 2c, 2d, by adding subdivisions; 
2.26 	290.067, subdivisions 1, 2a; 290.0671, subdivision 1; 290.0675, subdivision 1; 
2.27 	290.0677, subdivision 2; 290.068, subdivisions 3, 6a; 290.0681, subdivisions 1, 
2.28 	3, 4, 5; 290.091, subdivision 2; 290.0921, subdivision 3; 290.0922, subdivision 
2.29 	1; 290.17, subdivision 4; 290.21, subdivision 4; 290.9705, subdivision 1; 
2.30 	290A.03, subdivisions 3, 15, as amended; 290A.04, subdivisions 2, 2a, 4; 
2.31 	290B.04, subdivision 2; 290C.02, subdivision 6; 290C.05; 290C.07; 291.005, 
2.32 	subdivision 1; 291.03, subdivisions 1, 8, 9, 10, 11, by adding a subdivision; 
2.33 	296A.01, subdivision 19, by adding a subdivision; 296A.22, subdivisions 1, 3; 
2.34 	297A.61, subdivisions 3, 4, by adding a subdivision; 297A.64, subdivisions 
2.35 	1, 2; 297A.66, by adding a subdivision; 297A.665; 297A.668, by adding 
2.36 	a subdivision; 297A.67, subdivision 7; 297A.68, subdivision 5; 297A.70, 
2.37 	subdivisions 4, 8, by adding subdivisions; 297A.71, by adding subdivisions; 
2.38 	297A.75, subdivisions 1, 2, 3; 297A.815, subdivision 3; 297A.993, subdivisions 
2.39 	1, 2; 297B.11; 297E.021, subdivision 2; 297E.14, subdivision 7; 297F.01, 
2.40 	subdivisions 3, 19, 23, by adding a subdivision; 297F.05, subdivisions 1, 3, 4, by 
2.41 	adding a subdivision; 297F.09, subdivision 9; 297F.18, subdivision 7; 297F.24, 
2.42 	subdivision 1; 297F.25, subdivision 1; 297G.03, subdivision 1, by adding a 
2.43 	subdivision; 297G.04; 297G.09, subdivision 8; 297G.17, subdivision 7; 297I.05, 
2.44 	subdivisions 7, 11, 12; 297I.30, subdivisions 1, 2; 297I.80, subdivision 1; 298.01, 
2.45 	subdivisions 3, 3b, 4; 298.018; 298.227, as amended; 298.24, subdivision 1; 
2.46 	298.28, subdivisions 4, 6, 10; 298.75, subdivision 2; 325D.32, subdivision 2; 
2.47 	353G.08, subdivision 2; 365.025, subdivision 4; 366.095, subdivision 1; 366.27; 
2.48 	368.01, subdivision 23; 368.47; 370.01; 373.01, subdivisions 1, 3; 373.40, 
2.49 	subdivisions 1, 2, 4; 375.167, subdivision 1; 375.18, subdivision 3; 375.555; 
2.50 	383B.152; 383B.245; 383B.73, subdivision 1; 383D.41, by adding a subdivision; 
2.51 	383E.20; 383E.23; 385.31; 394.36, subdivision 1; 398A.04, subdivision 8; 
2.52 	401.05, subdivision 3; 403.02, subdivision 21, by adding subdivisions; 403.06, 
2.53 	subdivision 1a; 403.11, subdivision 1, by adding a subdivision; 410.32; 412.221, 
2.54 	subdivision 2; 412.301; 428A.02, subdivision 1; 430.102, subdivision 2; 447.10; 
2.55 	450.19; 450.25; 458A.10; 458A.31, subdivision 1; 465.04; 469.033, subdivision 
2.56 	6; 469.034, subdivision 2; 469.053, subdivisions 4, 4a, 6; 469.071, subdivision 5; 
2.57 	469.107, subdivision 1; 469.169, by adding a subdivision; 469.176, subdivisions 
2.58 	4c, 4g, 6; 469.177, by adding a subdivision; 469.180, subdivision 2; 469.187; 
3.1 	469.190, subdivision 7, by adding a subdivision; 469.206; 469.319, subdivision 
3.2 	4; 469.340, subdivision 4; 471.24; 471.571, subdivisions 1, 2; 471.73; 473.325, 
3.3 	subdivision 2; 473.39, by adding a subdivision; 473.629; 473.661, subdivision 3; 
3.4 	473.667, subdivision 9; 473.671; 473.711, subdivision 2a; 473F.02, subdivisions 
3.5 	12, 14, 15, 23; 473F.08, subdivision 10, by adding a subdivision; 474A.04, 
3.6 	subdivision 1a; 474A.062; 474A.091, subdivision 3a; 475.521, subdivisions 1, 2, 
3.7 	4; 475.53, subdivisions 1, 3, 4; 475.58, subdivisions 2, 3b; 475.73, subdivision 1; 
3.8 	477A.011, subdivisions 20, 30, 32, 34, 42, by adding subdivisions; 477A.0124, 
3.9 	subdivision 2; 477A.013, subdivisions 8, 9, by adding a subdivision; 477A.03, 
3.10 	subdivisions 2a, 2b, by adding a subdivision; 641.23; 641.24; 645.44, by adding 
3.11 	a subdivision; Laws 1971, chapter 773, section 1, subdivision 2, as amended; 
3.12 	Laws 1988, chapter 645, section 3, as amended; Laws 1993, chapter 375, article 
3.13 	9, section 46, subdivisions 2, as amended, 5, as amended; Laws 1998, chapter 
3.14 	389, article 8, section 43, subdivisions 1, 3, as amended, 5, as amended; Laws 
3.15 	1999, chapter 243, article 6, section 11; Laws 2002, chapter 377, article 3, section 
3.16 	25, as amended; Laws 2005, First Special Session chapter 3, article 5, section 
3.17 	37, subdivisions 2, 4; Laws 2008, chapter 366, article 5, sections 26; 33; 34, as 
3.18 	amended; article 7, section 19, subdivision 3, as amended; Laws 2010, chapter 
3.19 	216, section 55; Laws 2010, chapter 389, article 1, section 12; article 5, section 6, 
3.20 	subdivisions 4, 6; Laws 2010, First Special Session chapter 1, article 13, section 4, 
3.21 	subdivision 1, as amended; proposing coding for new law in Minnesota Statutes, 
3.22 	chapters 116C; 287; 290; 290A; 292; 295; 297I; 403; 435; 469; proposing coding 
3.23 	for new law as Minnesota Statutes, chapter 297J; repealing Minnesota Statutes 
3.24 	2012, sections 16A.725; 256.9658; 272.69; 273.11, subdivisions 1a, 22; 276A.01, 
3.25 	subdivision 11; 289A.60, subdivision 31; 290.01, subdivision 6b; 290.06, 
3.26 	subdivision 22a; 290.0672; 290.0921, subdivision 7; 383A.80, subdivision 4; 
3.27 	383B.80, subdivision 4; 428A.101; 428A.21; 473F.02, subdivision 13; 477A.011, 
3.28 	subdivisions 2a, 19, 21, 29, 31, 32, 33, 36, 39, 40, 41, 42; 477A.013, subdivisions 
3.29 	11, 12; 477A.0133; 477A.0134; Laws 2006, chapter 259, article 11, section 3, as 
3.30 	amended; Laws 2009, chapter 88, article 4, section 23, as amended.
3.31 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.32 	ARTICLE 1
3.33 	ONE-TIME PROVISIONS

3.34 	Section 1. Minnesota Statutes 2012, section 16A.152, subdivision 2, is amended to read:
3.35 		Subd. 2.Additional revenues; priority. (a) If on the basis of a forecast of general 
3.36 	fund revenues and expenditures, the commissioner of management and budget determines 
3.37 	that there will be a positive unrestricted budgetary general fund balance at the close of 
3.38 	the biennium, the commissioner of management and budget must allocate money to the 
3.39 	following accounts and purposes in priority order:
3.40 	(1) the cash flow account established in subdivision 1 until that account reaches 
3.41 	$350,000,000;
3.42 	(2) the budget reserve account established in subdivision 1a until that account 
3.43 	reaches $653,000,000;
3.44 	(3) the amount necessary to increase the aid payment schedule for school district 
3.45 	aids and credits payments in section 127A.45 to not more than 90 percent rounded to the 
4.1 	nearest tenth of a percent without exceeding the amount available and with any remaining 
4.2 	funds deposited in the budget reserve;
4.3 	(4) the amount necessary to restore all or a portion of the net aid reductions under 
4.4 	section 127A.441 and to reduce the property tax revenue recognition shift under section 
4.5 	123B.75, subdivision 5, by the same amount;
4.6 	(5) to reduce the rate of the surcharge in section 290.06, subdivision 2g, for taxable 
4.7 	years beginning after December 31, 2013, and before January 1, 2015, to not less than 
4.8 	zero with the rate rounded to the nearest tenth of a percent, without exceeding the amount 
4.9 	available, and with any remaining funds deposited in the budget reserve; and
4.10 	(5) (6) to the state airports fund, the amount necessary to restore the amount 
4.11 	transferred from the state airports fund under Laws 2008, chapter 363, article 11, section 
4.12 	3, subdivision 5.
4.13 	(b) The amounts necessary to meet the requirements of this section are appropriated 
4.14 	from the general fund within two weeks after the forecast is released or, in the case of 
4.15 	transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations 
4.16 	schedules otherwise established in statute.
4.17 	(c) The commissioner of management and budget shall certify the total dollar 
4.18 	amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of 
4.19 	education. The commissioner of education shall increase the aid payment percentage and 
4.20 	reduce the property tax shift percentage by these amounts and apply those reductions to 
4.21 	the current fiscal year and thereafter.
4.22 	(d) The commissioner of management and budget shall certify the total dollar 
4.23 	amount available under paragraph (a), clause (5), to the commissioner of revenue. The 
4.24 	commissioner of revenue shall determine the percentage reduction in the surcharge rate 
4.25 	for taxable years beginning after December 31, 2013, and before January 1, 2015, and 
4.26 	shall reduce the surcharge rate.

4.27 	Sec. 2. Minnesota Statutes 2012, section 123B.75, subdivision 5, is amended to read:
4.28 		Subd. 5.Levy recognition. (a) For fiscal years 2009 and 2010, in June of each 
4.29 	year, the school district must recognize as revenue, in the fund for which the levy was 
4.30 	made, the lesser of:
4.31 	(1) the sum of May, June, and July school district tax settlement revenue received in 
4.32 	that calendar year, plus general education aid according to section 126C.13, subdivision 
4.33 	4, received in July and August of that calendar year; or
4.34 	(2) the sum of:
5.1 	(i) 31 percent of the referendum levy certified according to section 126C.17, in 
5.2 	calendar year 2000; and
5.3 	(ii) the entire amount of the levy certified in the prior calendar year according to 
5.4 	section 124D.86, subdivision 4, for school districts receiving revenue under sections 
5.5 	124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, paragraph (a), 
5.6 	and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; and 126C.48, subdivision 6; plus
5.7 	(iii) zero percent of the amount of the levy certified in the prior calendar year for the 
5.8 	school district's general and community service funds, plus or minus auditor's adjustments, 
5.9 	not including the levy portions that are assumed by the state, that remains after subtracting 
5.10 	the referendum levy certified according to section 126C.17 and the amount recognized 
5.11 	according to item (ii).
5.12 	(b)(a) For fiscal year 2011 and later years 2011, 2012, and 2013, in June of each 
5.13 	year, the school district must recognize as revenue, in the fund for which the levy was 
5.14 	made, the lesser of:
5.15 	(1) the sum of May, June, and July school district tax settlement revenue received in 
5.16 	that calendar year, plus general education aid according to section 126C.13, subdivision 
5.17 	4, received in July and August of that calendar year; or
5.18 	(2) the sum of:
5.19 	(i) the greater of 48.6 percent of the referendum levy certified according to section 
5.20 	126C.17 in the prior calendar year, or 31 percent of the referendum levy certified 
5.21 	according to section 126C.17 in calendar year 2000; plus
5.22 	(ii) the entire amount of the levy certified in the prior calendar year according to 
5.23 	section 124D.4531, 124D.86, subdivision 4, for school districts receiving revenue under 
5.24 	sections 124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, 
5.25 	paragraph (a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; and 126C.48, 
5.26 	subdivision 6; plus
5.27 	(iii) 48.6 percent of the amount of the levy certified in the prior calendar year for the 
5.28 	school district's general and community service funds, plus or minus auditor's adjustments, 
5.29 	that remains after subtracting the referendum levy certified according to section 126C.17 
5.30 	and the amount recognized according to item (ii).
5.31 	(b) For fiscal year 2014 and later years, in June of each year, the school district must 
5.32 	recognize as revenue, in the fund for which the levy was made, the lesser of:
5.33 	(1) the sum of May, June, and July school district tax settlement revenue received in 
5.34 	that calendar year, plus general education aid according to section 126C.13, subdivision 
5.35 	4, received in July and August of that calendar year; or
5.36 	(2) the sum of:
6.1 	(i) 31 percent of the referendum levy certified according to section 126C.17 in 
6.2 	calendar year 2000; 
6.3 	(ii) the entire amount of the levy certified in the prior calendar year according to 
6.4 	section 124D.4531; 124D.86, subdivision 4, for school districts receiving revenue under 
6.5 	sections 124D.86, subdivision 3, clauses (1) to (3); 126C.41, subdivisions 1, 2, paragraph 
6.6 	(a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; and 126C.48, subdivision 
6.7 	6; and
6.8 	(iii) zero percent of the amount of the levy certified in the prior calendar year for the 
6.9 	school district's general and community service funds, plus or minus auditor's adjustments, 
6.10 	that remains after subtracting the referendum levy certified according to section 126C.17 
6.11 	and the amount recognized according to item (ii).

6.12 	EFFECTIVE DATE. This section is effective July 1, 2013.

6.13 	Sec. 3. Minnesota Statutes 2012, section 127A.45, subdivision 2, is amended to read:
6.14 		Subd. 2.Definitions. (a) "Other district receipts" means payments by county 
6.15 	treasurers pursuant to section 276.10, apportionments from the school endowment fund 
6.16 	pursuant to section 127A.33, apportionments by the county auditor pursuant to section 
6.17 	127A.34, subdivision 2, and payments to school districts by the commissioner of revenue 
6.18 	pursuant to chapter 298.
6.19 	(b) "Cumulative amount guaranteed" means the product of
6.20 	(1) the cumulative disbursement percentage shown in subdivision 3; times
6.21 	(2) the sum of
6.22 	(i) the current year aid payment percentage of the estimated aid and credit 
6.23 	entitlements paid according to subdivision 13; plus
6.24 	(ii) 100 percent of the entitlements paid according to subdivisions 11 and 12; plus
6.25 	(iii) the other district receipts.
6.26 	(c) "Payment date" means the date on which state payments to districts are made 
6.27 	by the electronic funds transfer method. If a payment date falls on a Saturday, a Sunday, 
6.28 	or a weekday which is a legal holiday, the payment shall be made on the immediately 
6.29 	preceding business day. The commissioner may make payments on dates other than 
6.30 	those listed in subdivision 3, but only for portions of payments from any preceding 
6.31 	payment dates which could not be processed by the electronic funds transfer method due 
6.32 	to documented extenuating circumstances.
6.33 	(d) The current year aid payment percentage equals 73 in fiscal year 2010 and 70 in 
6.34 	fiscal year 2011, and 60 90 in fiscal years 2012 2014 and later.

7.1 	EFFECTIVE DATE. This section is effective July 1, 2013.

7.2 	Sec. 4. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
7.3 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
7.4 	trusts, there shall be added to federal taxable income:
7.5 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
7.6 	or governmental subdivision, municipality, or governmental agency or instrumentality 
7.7 	of any state other than Minnesota exempt from federal income taxes under the Internal 
7.8 	Revenue Code or any other federal statute; and
7.9 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
7.10 	Code, except:
7.11 	(A) the portion of the exempt-interest dividends exempt from state taxation under 
7.12 	the laws of the United States; and
7.13 	(B) the portion of the exempt-interest dividends derived from interest income 
7.14 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
7.15 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
7.16 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
7.17 	95 percent or more of the exempt-interest dividends, including any dividends exempt 
7.18 	under subitem (A), that are paid by the regulated investment company as defined in section 
7.19 	851(a) of the Internal Revenue Code, or the fund of the regulated investment company as 
7.20 	defined in section 851(g) of the Internal Revenue Code, making the payment; and
7.21 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
7.22 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
7.23 	interest income on obligations of the state in which the tribe is located;
7.24 	(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or 
7.25 	accrued within the taxable year under this chapter and the amount of taxes based on net 
7.26 	income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state 
7.27 	or to any province or territory of Canada, to the extent allowed as a deduction under 
7.28 	section 63(d) of the Internal Revenue Code, but the addition may not be more than the 
7.29 	amount by which the itemized deductions as allowed under section 63(d) of the Internal 
7.30 	Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of 
7.31 	the Internal Revenue Code, disregarding the amounts allowed under sections 63(c)(1)(C) 
7.32 	and 63(c)(1)(E) of the Internal Revenue Code, minus any addition that would have been 
7.33 	required under clause (21) if the taxpayer had claimed the standard deduction. For the 
7.34 	purpose of this paragraph, the disallowance of itemized deductions under section 68 of 
8.1 	the Internal Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise 
8.2 	taxes are the last itemized deductions disallowed;
8.3 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
8.4 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
8.5 	(4) the amount of income taxes paid or accrued within the taxable year under this 
8.6 	chapter and taxes based on net income paid to any other state or any province or territory 
8.7 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
8.8 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
8.9 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
8.10 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
8.11 	other than expenses or interest used in computing net interest income for the subtraction 
8.12 	allowed under subdivision 19b, clause (1);
8.13 	(6) the amount of a partner's pro rata share of net income which does not flow 
8.14 	through to the partner because the partnership elected to pay the tax on the income under 
8.15 	section 6242(a)(2) of the Internal Revenue Code;
8.16 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
8.17 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
8.18 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
8.19 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
8.20 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
8.21 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
8.22 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
8.23 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
8.24 	under section 168(k) is allowed;
8.25 	(8) for taxable years beginning before January 1, 2013, 80 percent of the amount by 
8.26 	which the deduction allowed by section 179 of the Internal Revenue Code exceeds the 
8.27 	deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended 
8.28 	through December 31, 2003;
8.29 	(9) to the extent deducted in computing federal taxable income, the amount of the 
8.30 	deduction allowable under section 199 of the Internal Revenue Code;
8.31 	(10) for taxable years beginning before January 1, 2013, the exclusion allowed under 
8.32 	section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
8.33 	(11) the amount of expenses disallowed under section 290.10, subdivision 2;
8.34 	(12) for taxable years beginning before January 1, 2010, the amount deducted for 
8.35 	qualified tuition and related expenses under section 222 of the Internal Revenue Code, to 
8.36 	the extent deducted from gross income;
9.1 	(13) for taxable years beginning before January 1, 2010, the amount deducted for 
9.2 	certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) 
9.3 	of the Internal Revenue Code, to the extent deducted from gross income;
9.4 	(14) the additional standard deduction for property taxes payable that is allowable 
9.5 	under section 63(c)(1)(C) of the Internal Revenue Code;
9.6 	(15) the additional standard deduction for qualified motor vehicle sales taxes 
9.7 	allowable under section 63(c)(1)(E) of the Internal Revenue Code;
9.8 	(16) discharge of indebtedness income resulting from reacquisition of business 
9.9 	indebtedness and deferred under section 108(i) of the Internal Revenue Code;
9.10 	(17) the amount of unemployment compensation exempt from tax under section 
9.11 	85(c) of the Internal Revenue Code;
9.12 	(18) changes to federal taxable income attributable to a net operating loss that the 
9.13 	taxpayer elected to carry back for more than two years for federal purposes but for which 
9.14 	the losses can be carried back for only two years under section 290.095, subdivision 
9.15 	11, paragraph (c);
9.16 	(19) to the extent included in the computation of federal taxable income in taxable 
9.17 	years beginning after December 31, 2010, the amount of disallowed itemized deductions, 
9.18 	but the amount of disallowed itemized deductions plus the addition required under clause 
9.19 	(2) may not be more than the amount by which the itemized deductions as allowed under 
9.20 	section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction 
9.21 	as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts 
9.22 	allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, and 
9.23 	reduced by any addition that would have been required under clause (21) if the taxpayer 
9.24 	had claimed the standard deduction:
9.25 	(i) the amount of disallowed itemized deductions is equal to the lesser of:
9.26 	(A) three percent of the excess of the taxpayer's federal adjusted gross income 
9.27 	over the applicable amount; or
9.28 	(B) 80 percent of the amount of the itemized deductions otherwise allowable to the 
9.29 	taxpayer under the Internal Revenue Code for the taxable year;
9.30 	(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a 
9.31 	married individual filing a separate return. Each dollar amount shall be increased by 
9.32 	an amount equal to:
9.33 	(A) such dollar amount, multiplied by
9.34 	(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal 
9.35 	Revenue Code for the calendar year in which the taxable year begins, by substituting 
9.36 	"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
10.1 	(iii) the term "itemized deductions" does not include:
10.2 	(A) the deduction for medical expenses under section 213 of the Internal Revenue 
10.3 	Code;
10.4 	(B) any deduction for investment interest as defined in section 163(d) of the Internal 
10.5 	Revenue Code; and
10.6 	(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or 
10.7 	theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue 
10.8 	Code or for losses described in section 165(d) of the Internal Revenue Code;
10.9 	(20) to the extent included in federal taxable income in taxable years beginning after 
10.10 	December 31, 2010, the amount of disallowed personal exemptions for taxpayers with 
10.11 	federal adjusted gross income over the threshold amount:
10.12 	(i) the disallowed personal exemption amount is equal to the dollar amount of the 
10.13 	personal exemptions claimed by the taxpayer in the computation of federal taxable income 
10.14 	multiplied by the applicable percentage;
10.15 	(ii) "applicable percentage" means two percentage points for each $2,500 (or 
10.16 	fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable 
10.17 	year exceeds the threshold amount. In the case of a married individual filing a separate 
10.18 	return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In 
10.19 	no event shall the applicable percentage exceed 100 percent;
10.20 	(iii) the term "threshold amount" means:
10.21 	(A) $150,000 in the case of a joint return or a surviving spouse;
10.22 	(B) $125,000 in the case of a head of a household;
10.23 	(C) $100,000 in the case of an individual who is not married and who is not a 
10.24 	surviving spouse or head of a household; and
10.25 	(D) $75,000 in the case of a married individual filing a separate return; and
10.26 	(iv) the thresholds shall be increased by an amount equal to:
10.27 	(A) such dollar amount, multiplied by
10.28 	(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal 
10.29 	Revenue Code for the calendar year in which the taxable year begins, by substituting 
10.30 	"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and
10.31 	(21) to the extent deducted in the computation of federal taxable income, for taxable 
10.32 	years beginning after December 31, 2010, and before January 1, 2013, the difference 
10.33 	between the standard deduction allowed under section 63(c) of the Internal Revenue Code 
10.34 	and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code 
10.35 	as amended through December 1, 2010.

11.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
11.2 	December 31, 2012.

11.3 	Sec. 5. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
11.4 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
11.5 	there shall be added to federal taxable income:
11.6 	(1) the amount of any deduction taken for federal income tax purposes for income, 
11.7 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
11.8 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
11.9 	another state, a political subdivision of another state, the District of Columbia, or any 
11.10 	foreign country or possession of the United States;
11.11 	(2) interest not subject to federal tax upon obligations of: the United States, its 
11.12 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
11.13 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
11.14 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
11.15 	tribal governments;
11.16 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
11.17 	Revenue Code;
11.18 	(4) the amount of any net operating loss deduction taken for federal income tax 
11.19 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
11.20 	deduction under section 810 of the Internal Revenue Code;
11.21 	(5) the amount of any special deductions taken for federal income tax purposes 
11.22 	under sections 241 to 247 and 965 of the Internal Revenue Code;
11.23 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
11.24 	clause (a), that are not subject to Minnesota income tax;
11.25 	(7) the amount of any capital losses deducted for federal income tax purposes under 
11.26 	sections 1211 and 1212 of the Internal Revenue Code;
11.27 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
11.28 	921(a) and 291 of the Internal Revenue Code;
11.29 	(9) the amount of percentage depletion deducted under sections 611 through 614 and 
11.30 	291 of the Internal Revenue Code;
11.31 	(10) for certified pollution control facilities placed in service in a taxable year 
11.32 	beginning before December 31, 1986, and for which amortization deductions were elected 
11.33 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
11.34 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
11.35 	income for those facilities;
12.1 	(11) the amount of any deemed dividend from a foreign operating corporation 
12.2 	determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 
12.3 	shall be reduced by the amount of the addition to income required by clauses (20), (21), 
12.4 	(22), and (23);
12.5 	(12) the amount of a partner's pro rata share of net income which does not flow 
12.6 	through to the partner because the partnership elected to pay the tax on the income under 
12.7 	section 6242(a)(2) of the Internal Revenue Code;
12.8 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
12.9 	Code;
12.10 	(14) any increase in subpart F income, as defined in section 952(a) of the Internal 
12.11 	Revenue Code, for the taxable year when subpart F income is calculated without regard to 
12.12 	the provisions of Division C, title III, section 303(b) of Public Law 110-343;
12.13 	(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A) 
12.14 	and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer 
12.15 	has an activity that in the taxable year generates a deduction for depreciation under 
12.16 	section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year 
12.17 	that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed 
12.18 	under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the 
12.19 	depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
12.20 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
12.21 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
12.22 	under section 168(k)(1)(A) and (k)(4)(A) is allowed;
12.23 	(16) for taxable years beginning before January 1, 2013, 80 percent of the amount by 
12.24 	which the deduction allowed by section 179 of the Internal Revenue Code exceeds the 
12.25 	deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended 
12.26 	through December 31, 2003;
12.27 	(17) to the extent deducted in computing federal taxable income, the amount of the 
12.28 	deduction allowable under section 199 of the Internal Revenue Code;
12.29 	(18) for taxable years beginning before January 1, 2013, the exclusion allowed under 
12.30 	section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
12.31 	(19) the amount of expenses disallowed under section 290.10, subdivision 2;
12.32 	(20) an amount equal to the interest and intangible expenses, losses, and costs paid, 
12.33 	accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 
12.34 	of a corporation that is a member of the taxpayer's unitary business group that qualifies 
12.35 	as a foreign operating corporation. For purposes of this clause, intangible expenses and 
12.36 	costs include:
13.1 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
13.2 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
13.3 	intangible property;
13.4 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
13.5 	transactions;
13.6 	(iii) royalty, patent, technical, and copyright fees;
13.7 	(iv) licensing fees; and
13.8 	(v) other similar expenses and costs.
13.9 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
13.10 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
13.11 	secrets, and similar types of intangible assets.
13.12 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
13.13 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
13.14 	to such item of income to the extent that the income to the foreign operating corporation 
13.15 	is income from sources without the United States as defined in subtitle A, chapter 1, 
13.16 	subchapter N, part 1, of the Internal Revenue Code;
13.17 	(21) except as already included in the taxpayer's taxable income pursuant to clause 
13.18 	(20), any interest income and income generated from intangible property received or 
13.19 	accrued by a foreign operating corporation that is a member of the taxpayer's unitary 
13.20 	group. For purposes of this clause, income generated from intangible property includes:
13.21 	(i) income related to the direct or indirect acquisition, use, maintenance or 
13.22 	management, ownership, sale, exchange, or any other disposition of intangible property;
13.23 	(ii) income from factoring transactions or discounting transactions;
13.24 	(iii) royalty, patent, technical, and copyright fees;
13.25 	(iv) licensing fees; and
13.26 	(v) other similar income.
13.27 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
13.28 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
13.29 	secrets, and similar types of intangible assets.
13.30 	This clause does not apply to any item of interest or intangible income received or accrued 
13.31 	by a foreign operating corporation with respect to such item of income to the extent that 
13.32 	the income is income from sources without the United States as defined in subtitle A, 
13.33 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
13.34 	(22) the dividends attributable to the income of a foreign operating corporation that 
13.35 	is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
14.1 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
14.2 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
14.3 	foreign operating corporation;
14.4 	(23) the income of a foreign operating corporation that is a member of the taxpayer's 
14.5 	unitary group in an amount that is equal to gains derived from the sale of real or personal 
14.6 	property located in the United States;
14.7 	(24) for taxable years beginning before January 1, 2010, the additional amount 
14.8 	allowed as a deduction for donation of computer technology and equipment under section 
14.9 	170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
14.10 	(25) discharge of indebtedness income resulting from reacquisition of business 
14.11 	indebtedness and deferred under section 108(i) of the Internal Revenue Code.

14.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
14.13 	December 31, 2012.

14.14 	Sec. 6. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision 
14.15 	to read:
14.16 		Subd. 2g.Income surcharge. (a) In addition to the tax computed under subdivision 
14.17 	2c and section 290.091, for taxable years beginning after December 31, 2012, and 
14.18 	before January 1, 2015, there is a surcharge imposed on individuals, estates, and trusts. 
14.19 	The surcharge equals four percent of taxable net income over a threshold. For married 
14.20 	individuals filing separately, estates, and trusts, the threshold is $250,000. For all other 
14.21 	filers, the threshold is $500,000.
14.22 	(b) For a nonresident or part-year resident, the surcharge must be allocated based on 
14.23 	the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

14.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
14.25 	December 31, 2012.

14.26 	Sec. 7. Minnesota Statutes 2012, section 297A.68, subdivision 5, is amended to read:
14.27 		Subd. 5.Capital equipment. (a) Capital equipment is exempt. The tax must be 
14.28 	imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and 
14.29 	then refunded in the manner provided in section 297A.75.
14.30 	"Capital equipment" means machinery and equipment purchased or leased, and used 
14.31 	in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, 
14.32 	or refining tangible personal property to be sold ultimately at retail if the machinery and 
14.33 	equipment are essential to the integrated production process of manufacturing, fabricating, 
15.1 	mining, or refining. Capital equipment also includes machinery and equipment 
15.2 	used primarily to electronically transmit results retrieved by a customer of an online 
15.3 	computerized data retrieval system.
15.4 	(b) Capital equipment includes, but is not limited to:
15.5 	(1) machinery and equipment used to operate, control, or regulate the production 
15.6 	equipment;
15.7 	(2) machinery and equipment used for research and development, design, quality 
15.8 	control, and testing activities;
15.9 	(3) environmental control devices that are used to maintain conditions such as 
15.10 	temperature, humidity, light, or air pressure when those conditions are essential to and are 
15.11 	part of the production process;
15.12 	(4) materials and supplies used to construct and install machinery or equipment;
15.13 	(5) repair and replacement parts, including accessories, whether purchased as spare 
15.14 	parts, repair parts, or as upgrades or modifications to machinery or equipment;
15.15 	(6) materials used for foundations that support machinery or equipment;
15.16 	(7) materials used to construct and install special purpose buildings used in the 
15.17 	production process;
15.18 	(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed 
15.19 	as part of the delivery process regardless if mounted on a chassis, repair parts for 
15.20 	ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
15.21 	(9) machinery or equipment used for research, development, design, or production 
15.22 	of computer software.
15.23 	(c) Capital equipment does not include the following:
15.24 	(1) motor vehicles taxed under chapter 297B;
15.25 	(2) machinery or equipment used to receive or store raw materials;
15.26 	(3) building materials, except for materials included in paragraph (b), clauses (6) 
15.27 	and (7);
15.28 	(4) machinery or equipment used for nonproduction purposes, including, but not 
15.29 	limited to, the following: plant security, fire prevention, first aid, and hospital stations; 
15.30 	support operations or administration; pollution control; and plant cleaning, disposal of 
15.31 	scrap and waste, plant communications, space heating, cooling, lighting, or safety;
15.32 	(5) farm machinery and aquaculture production equipment as defined by section 
15.33 	297A.61, subdivisions 12 and 13;
15.34 	(6) machinery or equipment purchased and installed by a contractor as part of an 
15.35 	improvement to real property;
16.1 	(7) machinery and equipment used by restaurants in the furnishing, preparing, or 
16.2 	serving of prepared foods as defined in section 297A.61, subdivision 31;
16.3 	(8) machinery and equipment used to furnish the services listed in section 297A.61, 
16.4 	subdivision 3, paragraph (g), clause (6), items (i) to (vi) and (viii);
16.5 	(9) machinery or equipment used in the transportation, transmission, or distribution 
16.6 	of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, 
16.7 	tanks, mains, or other means of transporting those products. This clause does not apply to 
16.8 	machinery or equipment used to blend petroleum or biodiesel fuel as defined in section 
16.9 	239.77; or
16.10 	(10) any other item that is not essential to the integrated process of manufacturing, 
16.11 	fabricating, mining, or refining.
16.12 	(d) For purposes of this subdivision:
16.13 	(1) "Equipment" means independent devices or tools separate from machinery but 
16.14 	essential to an integrated production process, including computers and computer software, 
16.15 	used in operating, controlling, or regulating machinery and equipment; and any subunit or 
16.16 	assembly comprising a component of any machinery or accessory or attachment parts of 
16.17 	machinery, such as tools, dies, jigs, patterns, and molds.
16.18 	(2) "Fabricating" means to make, build, create, produce, or assemble components or 
16.19 	property to work in a new or different manner.
16.20 	(3) "Integrated production process" means a process or series of operations through 
16.21 	which tangible personal property is manufactured, fabricated, mined, or refined. For 
16.22 	purposes of this clause, (i) manufacturing begins with the removal of raw materials 
16.23 	from inventory and ends when the last process prior to loading for shipment has been 
16.24 	completed; (ii) fabricating begins with the removal from storage or inventory of the 
16.25 	property to be assembled, processed, altered, or modified and ends with the creation 
16.26 	or production of the new or changed product; (iii) mining begins with the removal of 
16.27 	overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and 
16.28 	ends when the last process before stockpiling is completed; and (iv) refining begins with 
16.29 	the removal from inventory or storage of a natural resource and ends with the conversion 
16.30 	of the item to its completed form.
16.31 	(4) "Machinery" means mechanical, electronic, or electrical devices, including 
16.32 	computers and computer software, that are purchased or constructed to be used for the 
16.33 	activities set forth in paragraph (a), beginning with the removal of raw materials from 
16.34 	inventory through completion of the product, including packaging of the product.
17.1 	(5) "Machinery and equipment used for pollution control" means machinery and 
17.2 	equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity 
17.3 	described in paragraph (a).
17.4 	(6) "Manufacturing" means an operation or series of operations where raw materials 
17.5 	are changed in form, composition, or condition by machinery and equipment and which 
17.6 	results in the production of a new article of tangible personal property. For purposes of 
17.7 	this subdivision, "manufacturing" includes the generation of electricity or steam to be 
17.8 	sold at retail.
17.9 	(7) "Mining" means the extraction of minerals, ores, stone, or peat.
17.10 	(8) "Online data retrieval system" means a system whose cumulation of information 
17.11 	is equally available and accessible to all its customers.
17.12 	(9) "Primarily" means machinery and equipment used 50 percent or more of the time 
17.13 	in an activity described in paragraph (a).
17.14 	(10) "Refining" means the process of converting a natural resource to an intermediate 
17.15 	or finished product, including the treatment of water to be sold at retail.
17.16 	(11) This subdivision does not apply to telecommunications equipment as 
17.17 	provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit 
17.18 	for telecommunications services.

17.19 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
17.20 	June 30, 2013.

17.21 	Sec. 8. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
17.22 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the 
17.23 	following exempt items must be imposed and collected as if the sale were taxable and the 
17.24 	rate under section 297A.62, subdivision 1, applied. The exempt items include:
17.25 	(1) capital equipment exempt under section 297A.68, subdivision 5;
17.26 	(2) (1) building materials for an agricultural processing facility exempt under section 
17.27 	297A.71, subdivision 13;
17.28 	(3) (2) building materials for mineral production facilities exempt under section 
17.29 	297A.71, subdivision 14;
17.30 	(4) (3) building materials for correctional facilities under section 297A.71, 
17.31 	subdivision 3;
17.32 	(5) (4) building materials used in a residence for disabled veterans exempt under 
17.33 	section 297A.71, subdivision 11;
17.34 	(6) (5) elevators and building materials exempt under section 297A.71, subdivision 
17.35 	12;
18.1 	(7) (6) building materials for the Long Lake Conservation Center exempt under 
18.2 	section 297A.71, subdivision 17;
18.3 	(8) (7) materials and supplies for qualified low-income housing under section 
18.4 	297A.71, subdivision 23;
18.5 	(9) (8) materials, supplies, and equipment for municipal electric utility facilities 
18.6 	under section 297A.71, subdivision 35;
18.7 	(10) (9) equipment and materials used for the generation, transmission, and 
18.8 	distribution of electrical energy and an aerial camera package exempt under section 
18.9 	297A.68, subdivision 37;
18.10 	(11) (10) commuter rail vehicle and repair parts under section 297A.70, subdivision 
18.11 	3, paragraph (a), clause (10);
18.12 	(12) (11) materials, supplies, and equipment for construction or improvement of 
18.13 	projects and facilities under section 297A.71, subdivision 40;
18.14 	(13) (12) materials, supplies, and equipment for construction or improvement of a 
18.15 	meat processing facility exempt under section 297A.71, subdivision 41;
18.16 	(14) (13) materials, supplies, and equipment for construction, improvement, or 
18.17 	expansion of an aerospace defense manufacturing facility exempt under section 297A.71, 
18.18 	subdivision 42;
18.19 	(15) (14) enterprise information technology equipment and computer software for 
18.20 	use in a qualified data center exempt under section 297A.68, subdivision 42; and
18.21 	(16) (15) materials, supplies, and equipment for qualifying capital projects under 
18.22 	section 297A.71, subdivision 44.

18.23 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
18.24 	June 30, 2013.

18.25 	Sec. 9. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
18.26 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
18.27 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 
18.28 	must be paid to the applicant. Only the following persons may apply for the refund:
18.29 	(1) for subdivision 1, clauses (1) to (3) and (2), the applicant must be the purchaser;
18.30 	(2) for subdivision 1, clauses (4) (3) and (7) (6), the applicant must be the 
18.31 	governmental subdivision;
18.32 	(3) for subdivision 1, clause (5) (4), the applicant must be the recipient of the 
18.33 	benefits provided in United States Code, title 38, chapter 21;
18.34 	(4) for subdivision 1, clause (6) (5), the applicant must be the owner of the 
18.35 	homestead property;
19.1 	(5) for subdivision 1, clause (8) (7), the owner of the qualified low-income housing 
19.2 	project;
19.3 	(6) for subdivision 1, clause (9) (8), the applicant must be a municipal electric utility 
19.4 	or a joint venture of municipal electric utilities;
19.5 	(7) for subdivision 1, clauses (10) (9), (12), (13), and (14), and (15), the owner 
19.6 	of the qualifying business; and
19.7 	(8) for subdivision 1, clauses (10), (11), (12), and (16) (15), the applicant must be 
19.8 	the governmental entity that owns or contracts for the project or facility.

19.9 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
19.10 	June 30, 2013.

19.11 	Sec. 10. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
19.12 		Subd. 3.Application. (a) The application must include sufficient information 
19.13 	to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 
19.14 	subcontractor, or builder, under subdivision 1, clause (3), (4), (5), (6), (7), (8), (9), (10), 
19.15 	(11), (12), (13), (14), or (15), or (16), the contractor, subcontractor, or builder must 
19.16 	furnish to the refund applicant a statement including the cost of the exempt items and the 
19.17 	taxes paid on the items unless otherwise specifically provided by this subdivision. The 
19.18 	provisions of sections 289A.40 and 289A.50 apply to refunds under this section.
19.19 	(b) An applicant may not file more than two applications per calendar year for 
19.20 	refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
19.21 	(c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 
19.22 	exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 
19.23 	of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 
19.24 	subdivision 40, must not be filed until after June 30, 2009.

19.25 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
19.26 	June 30, 2013.

19.27 	Sec. 11. ESTIMATED TAXES; EXCEPTIONS.
 19.28 	No addition to tax, penalties, or interest may be made under Minnesota Statutes, 
19.29 	section 289A.25, for any period before July 1, 2013, with respect to an underpayment 
19.30 	of estimated tax, to the extent that the underpayment was created or increased by the 
19.31 	surcharge imposed under this article.

19.32 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
19.33 	December 31, 2012.

20.1 	Sec. 12. APPROPRIATIONS.
 20.2 	(a) The amount necessary to increase the aid payment percentage in section 3 to 90 
20.3 	percent, estimated to be $262,600,000, is appropriated in fiscal year 2014 from the general 
20.4 	fund to the commissioner of education.
20.5 	(b) The amount necessary to reduce the percentage of levy recognized in the prior 
20.6 	calendar year in section 2 from 48.6 percent to zero percent, estimated to be $569,900,000, 
20.7 	is appropriated in fiscal year 2014 from the general fund to the commissioner of education.
20.8 	(c) The amount paid in additional state general education aids and other school aids 
20.9 	as a result of reducing the percentage of levy recognized in the prior calendar year in 
20.10 	Minnesota Statutes, section 123B.75, subdivision 5, from 48.6 percent to zero percent, 
20.11 	estimated to be $21,700,000, is appropriated in fiscal year 2015 from the general fund to 
20.12 	the commissioner of education.

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

20.14 	ARTICLE 2
20.15 	HOMESTEAD CREDIT REFUND AND RENTER PROPERTY TAX REFUND

20.16 	Section 1. Minnesota Statutes 2012, section 290A.03, subdivision 3, is amended to read:
20.17 		Subd. 3.Income. (1) "Income" means the sum of the following:
20.18 	(a) federal adjusted gross income as defined in the Internal Revenue Code; and
20.19 	(b) the sum of the following amounts to the extent not included in clause (a):
20.20 	(i) all nontaxable income;
20.21 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 
20.22 	469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity 
20.23 	loss carryover allowed under section 469(b) of the Internal Revenue Code;
20.24 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness 
20.25 	of a solvent individual excluded from gross income under section 108(g) of the Internal 
20.26 	Revenue Code;
20.27 	(iv) cash public assistance and relief;
20.28 	(v) any pension or annuity (including railroad retirement benefits, all payments 
20.29 	received under the federal Social Security Act, Supplemental Security Income, and 
20.30 	veterans benefits), which was not exclusively funded by the claimant or spouse, or which 
20.31 	was funded exclusively by the claimant or spouse and which funding payments were 
20.32 	excluded from federal adjusted gross income in the years when the payments were made;
20.33 	(vi) interest received from the federal or a state government or any instrumentality 
20.34 	or political subdivision thereof;
21.1 	(vii) workers' compensation;
21.2 	(viii) nontaxable strike benefits;
21.3 	(ix) the gross amounts of payments received in the nature of disability income or 
21.4 	sick pay as a result of accident, sickness, or other disability, whether funded through 
21.5 	insurance or otherwise;
21.6 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
21.7 	1986, as amended through December 31, 1995;
21.8 	(xi) contributions made by the claimant to an individual retirement account, 
21.9 	including a qualified voluntary employee contribution; simplified employee pension plan; 
21.10 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) 
21.11 	of the Internal Revenue Code; or deferred compensation plan under section 457 of the 
21.12 	Internal Revenue Code, to the extent the sum of amounts exceeds the retirement base 
21.13 	amount for the claimant and spouse;
21.14 	(xii) to the extent not included in federal adjusted gross income, distributions received 
21.15 	by the claimant or spouse from a traditional or Roth style retirement account or plan;
21.16 	(xiii) nontaxable scholarship or fellowship grants;
21.17 	(xiii) (xiv) the amount of deduction allowed under section 199 of the Internal 
21.18 	Revenue Code;
21.19 	(xiv) (xv) the amount of deduction allowed under section 220 or 223 of the Internal 
21.20 	Revenue Code;
21.21 	(xv) (xvi) the amount ofdeducted for tuition expenses required to be added to 
21.22 	income under section 290.01, subdivision 19a, clause (12); under section 222 of the 
21.23 	Internal Revenue Code; and
21.24 	(xvi) (xvii) the amount deducted for certain expenses of elementary and secondary 
21.25 	school teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.
21.26 	(xvii) unemployment compensation.
21.27 	In the case of an individual who files an income tax return on a fiscal year basis, the 
21.28 	term "federal adjusted gross income" shall mean federal adjusted gross income reflected 
21.29 	in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be 
21.30 	reduced by the amount of a net operating loss carryback or carryforward or a capital loss 
21.31 	carryback or carryforward allowed for the year.
21.32 	(2) "Income" does not include:
21.33 	(a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
21.34 	(b) amounts of any pension or annuity which was exclusively funded by the claimant 
21.35 	or spouse and which funding payments were not excluded from federal adjusted gross 
21.36 	income in the years when the payments were made;
22.1 	(c) to the extent included in federal adjusted gross income, amounts contributed by 
22.2 	the claimant or spouse to a traditional or Roth style retirement account or plan, but not 
22.3 	to exceed the retirement base amount reduced by the amount of contributions excluded 
22.4 	from federal adjusted gross income, but not less than zero;
22.5 	(d) surplus food or other relief in kind supplied by a governmental agency;
22.6 	(d) (e) relief granted under this chapter;
22.7 	(e) (f) child support payments received under a temporary or final decree of 
22.8 	dissolution or legal separation; or
22.9 	(f) (g) restitution payments received by eligible individuals and excludable interest 
22.10 	as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 
22.11 	2001, Public Law 107-16.
22.12 	(3) The sum of the following amounts may be subtracted from income:
22.13 	(a) for the claimant's first dependent, the exemption amount multiplied by 1.4;
22.14 	(b) for the claimant's second dependent, the exemption amount multiplied by 1.3;
22.15 	(c) for the claimant's third dependent, the exemption amount multiplied by 1.2;
22.16 	(d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
22.17 	(e) for the claimant's fifth dependent, the exemption amount; and
22.18 	(f) if the claimant or claimant's spouse was disabled or attained the age of 65 
22.19 	on or before December 31 of the year for which the taxes were levied or rent paid, the 
22.20 	exemption amount.
22.21 	For purposes of this subdivision, the "exemption amount" means the exemption 
22.22 	amount under section 151(d) of the Internal Revenue Code for the taxable year for which 
22.23 	the income is reported; and "retirement base amount" means the deductible amount for 
22.24 	the taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal 
22.25 	Revenue Code, adjusted for inflation as provided in section 219(b)(5)(D) of the Internal 
22.26 	Revenue Code, without regard to whether the claimant or spouse claimed a deduction.

22.27 	EFFECTIVE DATE. This section is effective beginning with refunds based on 
22.28 	property taxes payable in 2014 and rent paid in 2013.

22.29 	Sec. 2. Minnesota Statutes 2012, section 290A.04, subdivision 2, is amended to read:
22.30 		Subd. 2.Homeowners; homestead credit refund. A claimant whose property 
22.31 	taxes payable are in excess of the percentage of the household income stated below shall 
22.32 	pay an amount equal to the percent of income shown for the appropriate household 
22.33 	income level along with the percent to be paid by the claimant of the remaining amount 
22.34 	of property taxes payable. The state refund equals the amount of property taxes payable 
22.35 	that remain, up to the state refund amount shown below.

23.1
23.2
23.3	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund
	
23.4	$0 to 1,549
	1.0 percent
	15 percent
	$
	2,460
	
23.5	1,550 to 3,089
	1.1 percent
	15 percent
	$
	2,460
	
23.6	3,090 to 4,669
	1.2 percent
	15 percent
	$
	2,460
	
23.7	4,670 to 6,229
	1.3 percent
	20 percent
	$
	2,460
	
23.8	6,230 to 7,769
	1.4 percent
	20 percent
	$
	2,460
	
23.9	7,770 to 10,879
	1.5 percent
	20 percent
	$
	2,460
	
23.10	10,880 to 12,429
	1.6 percent
	20 percent
	$
	2,460
	
23.11	12,430 to 13,989
	1.7 percent
	20 percent
	$
	2,460
	
23.12	13,990 to 15,539
	1.8 percent
	20 percent
	$
	2,460
	
23.13	15,540 to 17,079
	1.9 percent
	25 percent
	$
	2,460
	
23.14	17,080 to 18,659
	2.0 percent
	25 percent
	$
	2,460
	
23.15	18,660 to 21,759
	2.1 percent
	25 percent
	$
	2,460
	
23.16	21,760 to 23,309
	2.2 percent
	30 percent
	$
	2,460
	
23.17	23,310 to 24,859
	2.3 percent
	30 percent
	$
	2,460
	
23.18	24,860 to 26,419
	2.4 percent
	30 percent
	$
	2,460
	
23.19	26,420 to 32,629
	2.5 percent
	35 percent
	$
	2,460
	
23.20	32,630 to 37,279
	2.6 percent
	35 percent
	$
	2,460
	
23.21	37,280 to 46,609
	2.7 percent
	35 percent
	$
	2,000
	
23.22	46,610 to 54,369
	2.8 percent
	35 percent
	$
	2,000
	
23.23	54,370 to 62,139
	2.8 percent
	40 percent
	$
	1,750
	
23.24	62,140 to 69,909
	3.0 percent
	40 percent
	$
	1,440
	
23.25	69,910 to 77,679
	3.0 percent
	40 percent
	$
	1,290
	
23.26	77,680 to 85,449
	3.0 percent
	40 percent
	$
	1,130
	
23.27	85,450 to 90,119
	3.5 percent
	45 percent
	$
	960
	
23.28	90,120 to 93,239
	3.5 percent
	45 percent
	$
	790
	
23.29	93,240 to 97,009
	3.5 percent
	50 percent
	$
	650
	
23.30	97,010 to 100,779
	3.5 percent
	50 percent
	$
	480

23.31
23.32
23.33	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund
	
23.34	$0 to 1,619
	1.0 percent
	15 percent
	$
	2,580
	
23.35	1,620 to 3,229
	1.1 percent
	15 percent
	$
	2,580
	
23.36	3,230 to 4,889
	1.2 percent
	15 percent
	$
	2,580
	
23.37	4,890 to 6,519
	1.3 percent
	20 percent
	$
	2,580
	
23.38	6,520 to 8,129
	1.4 percent
	20 percent
	$
	2,580
	
23.39	8,130 to 11,389
	1.5 percent
	20 percent
	$
	2,580
	
23.40	11,390 to 13,009
	1.6 percent
	20 percent
	$
	2,580
	
23.41	13,010 to 14,649
	1.7 percent
	20 percent
	$
	2,580
	
23.42	14,650 to 16,269
	1.8 percent
	20 percent
	$
	2,580
	
23.43	16,270 to 17,879
	1.9 percent
	25 percent
	$
	2,580
	
23.44	17,880 to 22,779
	2.0 percent
	25 percent
	$
	2,580
	
24.1	22,780 to 24,399
	2.0 percent
	30 percent
	$
	2,580
	
24.2	24,400 to 27,659
	2.0 percent
	30 percent
	$
	2,580
	
24.3	27,660 to 39,029
	2.0 percent
	35 percent
	$
	2,580
	
24.4	39,030 to 56,919
	2.0 percent
	35 percent
	$
	2,090
	
24.5	56,920 to 65,049
	2.0 percent
	40 percent
	$
	1,830
	
24.6	65,050 to 73,189
	2.1 percent
	40 percent
	$
	1,510
	
24.7	73,190 to 81,319
	2.2 percent
	40 percent
	$
	1,350
	
24.8	81,320 to 89,449
	2.3 percent
	40 percent
	$
	1,180
	
24.9	89,450 to 94,339
	2.4 percent
	45 percent
	$
	1,000
	
24.10	94,340 to 97,609
	2.5 percent
	45 percent
	$
	830
	
24.11	97,610 to 101,559
	2.5 percent
	50 percent
	$
	680
	
24.12	101,560 to 105,499
	2.5 percent
	50 percent
	$
	500
	
24.13 	The payment made to a claimant shall be the amount of the state refund calculated 
24.14 	under this subdivision. No payment is allowed if the claimant's household income is 
24.15 	$100,780 $105,500 or more.

24.16 	EFFECTIVE DATE. This section is effective for refund claims based on taxes 
24.17 	payable in 2014 and thereafter.

24.18 	Sec. 3. Minnesota Statutes 2012, section 290A.04, subdivision 2a, is amended to read:
24.19 		Subd. 2a.Renters. A claimant whose rent constituting property taxes exceeds the 
24.20 	percentage of the household income stated below must pay an amount equal to the percent 
24.21 	of income shown for the appropriate household income level along with the percent to 
24.22 	be paid by the claimant of the remaining amount of rent constituting property taxes. The 
24.23 	state refund equals the amount of rent constituting property taxes that remain, up to the 
24.24 	maximum state refund amount shown below.

24.25
24.26
24.27	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund

24.28	$0 to 3,589
	1.0 percent
	5 percent
	$
	1,190
	
24.29	3,590 to 4,779
	1.0 percent
	10 percent
	$
	1,190
	
24.30	4,780 to 5,969
	1.1 percent
	10 percent
	$
	1,190
	
24.31	5,970 to 8,369
	1.2 percent
	10 percent
	$
	1,190
	
24.32	8,370 to 10,759
	1.3 percent
	15 percent
	$
	1,190
	
24.33	10,760 to 11,949
	1.4 percent
	15 percent
	$
	1,190
	
24.34	11,950 to 13,139
	1.4 percent
	20 percent
	$
	1,190
	
24.35	13,140 to 15,539
	1.5 percent
	20 percent
	$
	1,190
	
24.36	15,540 to 16,729
	1.6 percent
	20 percent
	$
	1,190
	
24.37	16,730 to 17,919
	1.7 percent
	25 percent
	$
	1,190
	
24.38	17,920 to 20,319
	1.8 percent
	25 percent
	$
	1,190
	
25.1	20,320 to 21,509
	1.9 percent
	30 percent
	$
	1,190
	
25.2	21,510 to 22,699
	2.0 percent
	30 percent
	$
	1,190
	
25.3	22,700 to 23,899
	2.2 percent
	30 percent
	$
	1,190
	
25.4	23,900 to 25,089
	2.4 percent
	30 percent
	$
	1,190
	
25.5	25,090 to 26,289
	2.6 percent
	35 percent
	$
	1,190
	
25.6	26,290 to 27,489
	2.7 percent
	35 percent
	$
	1,190
	
25.7	27,490 to 28,679
	2.8 percent
	35 percent
	$
	1,190
	
25.8	28,680 to 29,869
	2.9 percent
	40 percent
	$
	1,190
	
25.9	29,870 to 31,079
	3.0 percent
	40 percent
	$
	1,190
	
25.10	31,080 to 32,269
	3.1 percent
	40 percent
	$
	1,190
	
25.11	32,270 to 33,459
	3.2 percent
	40 percent
	$
	1,190
	
25.12	33,460 to 34,649
	3.3 percent
	45 percent
	$
	1,080
	
25.13	34,650 to 35,849
	3.4 percent
	45 percent
	$
	960
	
25.14	35,850 to 37,049
	3.5 percent
	45 percent
	$
	830
	
25.15	37,050 to 38,239
	3.5 percent
	50 percent
	$
	720
	
25.16	38,240 to 39,439
	3.5 percent
	50 percent
	$
	600
	
25.17	38,440 to 40,629
	3.5 percent
	50 percent
	$
	360
	
25.18	40,630 to 41,819
	3.5 percent
	50 percent
	$
	120

25.19	$0 to 4,909
	1.0 percent
	5 percent
	$
	2,000
	
25.20	4,910 to 6,529
	1.0 percent
	10 percent
	$
	2,000
	
25.21	6,530 to 8,159
	1.1 percent
	10 percent
	$
	1,950
	
25.22	8,160 to 11,439
	1.2 percent
	10 percent
	$
	1,900
	
25.23	11,440 to 14,709
	1.3 percent
	15 percent
	$
	1,850
	
25.24	14,710 to 16,339
	1.4 percent
	15 percent
	$
	1,800
	
25.25	16,340 to 17,959
	1.4 percent
	20 percent
	$
	1,750
	
25.26	17,960 to 21,239
	1.5 percent
	20 percent
	$
	1,700
	
25.27	21,240 to 22,869
	1.6 percent
	20 percent
	$
	1,650
	
25.28	22,870 to 24,499
	1.7 percent
	25 percent
	$
	1,650
	
25.29	24,500 to 27,779
	1.8 percent
	25 percent
	$
	1,650
	
25.30	27,780 to 29,399
	1.9 percent
	30 percent
	$
	1,650
	
25.31	29,400 to 34,299
	2.0 percent
	30 percent
	$
	1,650
	
25.32	34,300 to 39,199
	2.0 percent
	35 percent
	$
	1,650
	
25.33	39,200 to 45,739
	2.0 percent
	40 percent
	$
	1,650
	
25.34	45,740 to 47,369
	2.0 percent
	45 percent
	$
	1,500
	
25.35	47,370 to 49,009
	2.0 percent
	45 percent
	$
	1,350
	
25.36	49,010 to 50,649
	2.0 percent
	45 percent
	$
	1,150
	
25.37	50,650 to 52,269
	2.0 percent
	50 percent
	$
	1,000
	
25.38	52,270 to 53,909
	2.0 percent
	50 percent
	$
	900
	
25.39	53,910 to 55,539
	2.0 percent
	50 percent
	$
	500
	
25.40	55,540 to 57,169
	2.0 percent
	50 percent
	$
	200
	
26.1 	The payment made to a claimant is the amount of the state refund calculated under 
26.2 	this subdivision. No payment is allowed if the claimant's household income is $41,820
26.3 	 $57,170 or more.

26.4 	EFFECTIVE DATE. This section is effective for claims based on rent paid in 
26.5 	2013 and following years.

26.6 	Sec. 4. Minnesota Statutes 2012, section 290A.04, subdivision 4, is amended to read:
26.7 		Subd. 4.Inflation adjustment. (a) Beginning for property tax refunds payable in 
26.8 	calendar year 2002, the commissioner shall annually adjust the dollar amounts of the 
26.9 	income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation. 
26.10 	The commissioner shall make the inflation adjustments in accordance with section 1(f) of 
26.11 	the Internal Revenue Code, except that for purposes of this subdivision the percentage 
26.12 	increase shall be determined as provided in this subdivision.
26.13 	(b) In adjusting the dollar amounts of the income thresholds and the maximum 
26.14 	refunds under subdivision 2 for inflation, the percentage increase shall be determined 
26.15 	from the year ending on June 30, 2011 2013, to the year ending on June 30 of the year 
26.16 	preceding that in which the refund is payable.
26.17 	(c) In adjusting the dollar amounts of the income thresholds and the maximum 
26.18 	refunds under subdivision 2a for inflation, the percentage increase shall be determined 
26.19 	from the year ending on June 30, 2000 2013, to the year ending on June 30 of the year 
26.20 	preceding that in which the refund is payable.
26.21 	(d) The commissioner shall use the appropriate percentage increase to annually 
26.22 	adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for 
26.23 	inflation without regard to whether or not the income tax brackets are adjusted for inflation 
26.24 	in that year. The commissioner shall round the thresholds and the maximum amounts, 
26.25 	as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall 
26.26 	round it up to the next $10 amount.
26.27 	(e) The commissioner shall annually announce the adjusted refund schedule at the 
26.28 	same time provided under section 290.06. The determination of the commissioner under 
26.29 	this subdivision is not a rule under the Administrative Procedure Act.

26.30 	EFFECTIVE DATE. This section is effective for refund claims based on taxes 
26.31 	payable in 2014 and rent paid in 2013 and following years.

26.32 	Sec. 5. [290A.28] NOTIFICATION OF POTENTIAL ELIGIBILITY.
27.1 		Subdivision 1.Notification of eligibility. (a) By August 1, 2014, the commissioner 
27.2 	shall notify, in writing or electronically, individual homeowners whom the commissioner 
27.3 	determines likely will be eligible for a homestead credit refund under this chapter for 
27.4 	that property taxes payable year. In determining whether to notify a homeowner, the 
27.5 	commissioner shall consider the property tax information available to the commissioner 
27.6 	under paragraph (b) and the most recent income information available to the commissioner 
27.7 	from filing under this chapter for the prior year or under chapter 290 for the current or 
27.8 	prior year. The notification must include information on how to file for the homestead 
27.9 	credit refund and the range of potential homestead credit refunds that the homeowner 
27.10 	could qualify to receive. The notification requirement under this section does not apply 
27.11 	to a homeowner who has already filed for the homestead credit refund for the current 
27.12 	or prior year.
27.13 	(b) By May 15, 2014, each county auditor shall transmit to the commissioner 
27.14 	of revenue the following information for each property classified as a residential or 
27.15 	agricultural homestead under section 273.13, subdivision 22 or 23:
27.16 	(1) the property taxes payable;
27.17 	(2) the name and address of the owner;
27.18 	(3) the Social Security number or numbers of the owners; and
27.19 	(4) any other information the commissioner deems necessary or useful to carry 
27.20 	out the provisions of this section.
27.21 	The information must be provided in the form and manner prescribed by the commissioner.
27.22 		Subd. 2.Report. By March 15, 2015, the commissioner must provide written 
27.23 	reports to the chairs and ranking minority members of the legislative committees with 
27.24 	jurisdiction over taxes, in compliance with Minnesota Statutes, sections 3.195 and 3.197. 
27.25 	The report must provide information on the number and dollar amount of homeowner 
27.26 	property tax refund claims based on taxes payable in 2014, including:
27.27 	(i) the number and dollar amount of claims projected for homestead credit refunds 
27.28 	based on taxes payable in 2014 prior to enactment of the notification requirement in 
27.29 	this section;
27.30 	(ii) the number of notifications issued as provided in this section, including the 
27.31 	number issued by county;
27.32 	(iii) the number and dollar amount of claims for homestead credit refunds based on 
27.33 	taxes payable in 2014 processed through December 31, 2014; and
27.34 	(iv) a description of any outreach efforts undertaken by the commissioner for 
27.35 	homestead credit refunds based on taxes payable in 2014, in addition to the notification 
27.36 	required in this section.

28.1 	EFFECTIVE DATE. This section is effective for refund claims based on property 
28.2 	taxes payable in 2014.

28.3 	ARTICLE 3
28.4 	PROPERTY TAX AIDS AND CREDITS

28.5 	Section 1. Minnesota Statutes 2012, section 69.021, is amended by adding a 
28.6 	subdivision to read:
28.7 		Subd. 12.Surcharge aid accounts. (a) A surcharge fire pension aid account is 
28.8 	established in the special revenue fund to receive amounts as provided under section 
28.9 	297I.07, subdivision 3, clause (1). The commissioner shall administer the account and 
28.10 	allocate money in the account as follows:
28.11 	(1) 17.342 percent as supplemental state pension funding paid to the executive 
28.12 	director of the Public Employees Retirement Association for deposit in the public 
28.13 	employees police and fire retirement fund established by section 353.65, subdivision 1;
28.14 	(2) 8.658 percent to municipalities employing firefighters with retirement coverage 
28.15 	by the public employees police and fire retirement plan, allocated in proportion to the 
28.16 	relationship that the preceding December 31 number of firefighters employed by each 
28.17 	municipality who have public employees police and fire retirement plan coverage bears to 
28.18 	the total preceding December 31 number of municipal firefighters covered by the public 
28.19 	employees police and fire retirement plan; and
28.20 	(3) 74 percent for municipalities other than the municipalities receiving a 
28.21 	disbursement under clause (2) which qualified to receive fire state aid in that calendar year, 
28.22 	allocated in proportion to the most recent amount of fire state aid paid under subdivision 7 
28.23 	for the municipality bears to the most recent total fire state aid for all municipalities other 
28.24 	than the municipalities receiving a disbursement under clause (2) paid under subdivision 
28.25 	7, with the allocated amount for fire departments participating in the voluntary statewide 
28.26 	lump-sum volunteer firefighter retirement plan paid to the executive director of the Public 
28.27 	Employees Retirement Association for deposit in the fund established by section 353G.02, 
28.28 	subdivision 3, and credited to the respective account and with the balance paid to the 
28.29 	treasurer of each municipality for transmittal within 30 days of receipt to the treasurer of 
28.30 	the applicable volunteer firefighter relief association for deposit in its special fund.
28.31 	(b) A surcharge police pension aid account is established in the special revenue 
28.32 	fund to receive amounts as provided by section 297I.07, subdivision 3, clause (2). The 
28.33 	commissioner shall administer the account and allocate money in the account as follows:
28.34 	(1) one-third to be distributed as police state aid as provided under subdivision 7a; and
29.1 	(2) two-thirds to be apportioned, on the basis of the number of active police officers 
29.2 	certified for police state aid receipt under section 69.011, subdivisions 2 and 2b, between:
29.3 	(i) the executive director of the Public Employees Retirement Association for 
29.4 	deposit as a supplemental state pension funding aid in the public employees police and fire 
29.5 	retirement fund established by section 353.65, subdivision 1; and
29.6 	(ii) the executive director of the Minnesota State Retirement System for deposit as a 
29.7 	supplemental state pension funding aid in the state patrol retirement fund.
29.8 	(c) On or before September 1, annually, the executive director of the Public 
29.9 	Employees Retirement Association shall report to the commissioner the following:
29.10 	(1) the municipalities which employ firefighters with retirement coverage by the 
29.11 	public employees police and fire retirement plan;
29.12 	(2) the number of firefighters with public employees police and fire retirement plan 
29.13 	employed by each municipality;
29.14 	(3) the fire departments covered by the voluntary statewide lump-sum volunteer 
29.15 	firefighter retirement plan; and
29.16 	(4) any other information requested by the commissioner to administer the surcharge 
29.17 	fire pension aid account.
29.18 	(d) For this subdivision, (i) the number of firefighters employed by a municipality 
29.19 	who have public employees police and fire retirement plan coverage means the number 
29.20 	of firefighters with public employees police and fire retirement plan coverage that were 
29.21 	employed by the municipality for not less than 30 hours per week for a minimum of six 
29.22 	months prior to December 31 preceding the date of the payment under this section and, if 
29.23 	the person was employed for less than the full year, prorated to the number of full months 
29.24 	employed; and, (ii) the number of active police officers certified for police state aid receipt 
29.25 	under section 69.011, subdivisions 2 and 2b means, for each municipality, the number of 
29.26 	police officers meeting the definition of peace officer in section 69.011, subdivision 1, 
29.27 	counted as provided and limited by section 69.011, subdivisions 2 and 2b.
29.28 	(e) The payments under this section shall be made on October 1 each year, based 
29.29 	on the amount in the surcharge fire pension aid account and the amount in the surcharge 
29.30 	police pension aid account on the preceding June 30, with interest at 1 percent for each 
29.31 	month, or portion of a month, that the amount remains unpaid after October 1. The 
29.32 	amounts necessary to make the payments under this subdivision are annually appropriated 
29.33 	to the commissioner from the surcharge fire and police pension aid accounts. Any 
29.34 	necessary adjustments shall be made to subsequent payments.
29.35 	(f) The provisions of this chapter that prevent municipalities and relief associations 
29.36 	from being eligible for, or receiving state aid under this chapter until the applicable 
30.1 	financial reporting requirements have been complied with, apply to the amounts payable 
30.2 	to municipalities and relief associations under this subdivision.
30.3 	(g) The amounts necessary to make the payments under this subdivision are 
30.4 	appropriated to the commissioner from the respective accounts in the special revenue fund.

30.5 	EFFECTIVE DATE. This section is effective beginning in the fiscal year beginning 
30.6 	July 1, 2013.

30.7 	Sec. 2. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
30.8 		Subd. 4.Disparity reduction credit. (a) Beginning with taxes payable in 1989, 
30.9 	class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property 
30.10 	is located in a border city that has an enterprise zone, as defined in section 469.166; (2) 
30.11 	the property is located in a city with a population greater than 2,500 and less than 35,000 
30.12 	according to the 1980 decennial census; (3) the city is adjacent to a city in another state or 
30.13 	immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city 
30.14 	in the other state has a population of greater than 5,000 and less than 75,000 according to 
30.15 	the 1980 decennial census.
30.16 	(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 
30.17 	property to 2.3 2 percent of the property's market value and (ii) the tax on class 3a property 
30.18 	to 2.3 2 percent of market value.
30.19 	(c) The county auditor shall annually certify the costs of the credits to the 
30.20 	Department of Revenue. The department shall reimburse local governments for the 
30.21 	property taxes forgone as the result of the credits in proportion to their total levies.

30.22 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2014.

30.23 	Sec. 3. Minnesota Statutes 2012, section 290C.02, subdivision 6, is amended to read:
30.24 		Subd. 6.Forest land. "Forest land" means land containing a minimum of 20 
30.25 	contiguous acres for which the owner has implemented a forest management plan that was 
30.26 	prepared or updated within the past ten years by an approved plan writer. For purposes of 
30.27 	this subdivision, acres are considered to be contiguous even if they are separated by a road, 
30.28 	waterway, railroad track, or other similar intervening property. At least 50 percent of the 
30.29 	contiguous acreage must meet the definition of forest land in section 88.01, subdivision 7. 
30.30 	For the purposes of sections 290C.01 to 290C.11, forest land does not include the following:
30.31 	(i) land used for residential or agricultural purposes,;
30.32 	(ii) land enrolled in the reinvest in Minnesota program, a state or federal conservation 
30.33 	reserve or easement reserve program under sections 103F.501 to 103F.531, the Minnesota 
31.1 	agricultural property tax law under section 273.111, or land subject to agricultural land 
31.2 	preservation controls or restrictions as defined in section 40A.02 or under the Metropolitan 
31.3 	Agricultural Preserves Act under chapter 473H, or;
31.4 	(iii) land subject to a conservation easement funded under section 97A.056 or a 
31.5 	comparable permanent easement conveyed to a governmental or nonprofit entity; or
31.6 	(iv) land improved with a structure, pavement, sewer, campsite, or any road, other 
31.7 	than a township road, used for purposes not prescribed in the forest management plan.

31.8 	EFFECTIVE DATE. This section is effective for payments made beginning in 
31.9 	calendar year 2014.

31.10 	Sec. 4. Minnesota Statutes 2012, section 290C.05, is amended to read:
31.11 	290C.05 ANNUAL CERTIFICATION.
31.12 	On or before July 1 of each year, beginning with the year after the original claimant 
31.13 	has received an approved application, the commissioner shall send each claimant enrolled 
31.14 	under the sustainable forest incentive program a certification form. For purposes of this 
31.15 	section, the original claimant is the person that filed the first application under section 
31.16 	290C.04 to enroll the land in the program. The claimant must sign the certification, 
31.17 	attesting that the requirements and conditions for continued enrollment in the program are 
31.18 	currently being met, and must return the signed certification form, along with a copy of 
31.19 	the property tax statement for the property taxes payable on the enrolled property for the 
31.20 	calendar year and any other information the commissioner deems necessary to determine 
31.21 	whether the property is qualified under section 290C.02, subdivision 6, or the amount of 
31.22 	the payment under section 290C.07, paragraph (a), clause (2), to the commissioner by 
31.23 	August 15 of that same year. If the claimant does not return an annual certification form 
31.24 	by the due date, the provisions in section 290C.11 apply.

31.25 	EFFECTIVE DATE. This section is effective for payments made beginning in 
31.26 	calendar year 2014.

31.27 	Sec. 5. Minnesota Statutes 2012, section 290C.07, is amended to read:
31.28 	290C.07 CALCULATION OF INCENTIVE PAYMENT.
31.29 	(a) An approved claimant under the sustainable forest incentive program is eligible 
31.30 	to receive an annual payment. The payment shall be equal to the lesser of (1) $7 per acre
31.31 	 or (2) one-half of the property tax payable for the calendar year for each acre enrolled in 
31.32 	the sustainable forest incentive program.
32.1 	(b) The annual payment for each Social Security number or state or federal business 
32.2 	tax identification number must not exceed $100,000.

32.3 	EFFECTIVE DATE. This section is effective for payments made beginning in 
32.4 	calendar year 2014.

32.5 	Sec. 6. [297I.07] SURCHARGE ON HOMEOWNERS AND AUTO POLICIES.
32.6 		Subdivision 1.Surcharge on policies. (a) Each licensed insurer engaged in writing 
32.7 	insurance shall collect a surcharge equal to $5 per calendar year for each policy issued 
32.8 	or renewed during that calendar year for:
32.9 	(1) homeowners insurance authorized in section 60A.06, subdivision 1, clause 
32.10 	(1)(c); and
32.11 	(2) automobile insurance as defined in section 65B.14, subdivision 2.
32.12 	(b) The surcharge amount collected under this subdivision must not be considered 
32.13 	premium for any other purpose. The surcharge amount must be separately stated on either a 
32.14 	billing or policy declaration or document containing similar information sent to an insured.
32.15 		Subd. 2.Collection and administration. The commissioner shall administer the 
32.16 	surcharge imposed by this section in the same manner as the taxes imposed by this chapter.
32.17 		Subd. 3.Deposit of revenues. The commissioner shall deposit revenues from the 
32.18 	surcharge under this section as follows:
32.19 	(1) amounts from the surcharge imposed under subdivision 1, paragraph (a), clause 
32.20 	(1), in a surcharge fire pension aid account in the special revenue fund; and
32.21 	(2) amounts from the surcharge imposed under subdivision 1, paragraph (a), clause 
32.22 	(2), in a surcharge police pension aid account in the special revenue fund.
32.23 		Subd. 4.Surcharge termination. The surcharge imposed under subdivision 
32.24 	1 ends on the December 31 next following the actuarial valuation date on which the 
32.25 	assets of the retirement plan on a market value equals or exceeds 90 percent of the total 
32.26 	actuarial accrued liabilities of the retirement plan as disclosed in an actuarial valuation 
32.27 	prepared under section 356.215 and the Standards for Actuarial Work promulgated by the 
32.28 	Legislative Commission on Pensions and Retirement, for the State Patrol retirement plan 
32.29 	or the public employees police and fire retirement plan, whichever occurs last.

32.30 	EFFECTIVE DATE. This section is effective for policies issued after June 30, 2013.

32.31 	Sec. 7. Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to read:
32.32 		Subd. 30.Pre-1940 housing percentage. (a) Except as provided in paragraph (b), 
32.33 	"pre-1940 housing percentage" for a city is 100 times the most recent federal census count 
33.1 	by the United States Bureau of the Census of all housing units in the city built before 
33.2 	1940, divided by the total number of all housing units in the city. Housing units includes 
33.3 	both occupied and vacant housing units as defined by the federal census.
33.4 	(b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal 
33.5 	to 100 times the 1990 federal census count of all housing units in the city built before 
33.6 	1940, divided by the most recent count by the United States Bureau of the Census of all 
33.7 	housing units in the city. Housing units includes both occupied and vacant housing units 
33.8 	as defined by the federal census.

33.9 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
33.10 	2014 and thereafter.

33.11 	Sec. 8. Minnesota Statutes 2012, section 477A.011, is amended by adding a 
33.12 	subdivision to read:
33.13 		Subd. 30a.Percent of housing built between 1940 and 1970. "Percent of housing 
33.14 	built between 1940 and 1970" is equal to 100 times the most recent count by the United 
33.15 	States Bureau of the Census of all housing units in the city built after 1939 but before 
33.16 	1970, divided by the total number of all housing units in the city. Housing units includes 
33.17 	both occupied and vacant housing units as defined by the federal census.

33.18 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
33.19 	2014 and thereafter.

33.20 	Sec. 9. Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read:
33.21 		Subd. 34.City revenue need. (a) For a city with a population equal to or greater 
33.22 	than 2,500 10,000, "city revenue need" is the greater of 285 or 1.15 times the sum of (1) 
33.23 	5.0734098 4.59 times the pre-1940 housing percentage; plus (2) 19.141678 times the 
33.24 	population decline percentage 0.622 times the percent of housing built between 1940 and 
33.25 	1970; plus (3) 2504.06334 times the road accidents factor 169.415 times the jobs per 
33.26 	capita; plus (4) 355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638 
33.27 	times the household size the sparsity adjustment; plus (5) 307.664.
33.28 	(b) For a city with a population equal to or greater than 2,500 and less than 10,000, 
33.29 	"city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940 
33.30 	housing percentage; minus (3) 53.768 times household size; plus (4) 14.022 times peak 
33.31 	population decline.
33.32 	(b) (c) For a city with a population less than 2,500, "city revenue need" is the sum of 
33.33 	(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial 
34.1 	industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4) 
34.2 	1.206 times the transformed population; minus (5) 62.772 410 plus 0.367 times the city's 
34.3 	population over 100. The city revenue need under this paragraph shall not exceed 630.
34.4 	(c) (d) For a city with a population of at least 2,500 or more and a population in one 
34.5 	of the most recently available five years that was less than 2,500, "city revenue need" 
34.6 	is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its 
34.7 	transition factor; plus (2) its city revenue need calculated under the formula in paragraph 
34.8 	(b) multiplied by the difference between one and its transition factor. For purposes of this 
34.9 	paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that 
34.10 	the city's population estimate has been 2,500 or more. This provision only applies for aids 
34.11 	payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. 
34.12 	It applies to any city for aids payable in 2009 and thereafter but less than 3,000, the "city 
34.13 	revenue need" equals (1) the transition factor times the city's revenue need calculated in 
34.14 	paragraph (b) plus (2) 630 times the difference between one and the transition factor. For 
34.15 	a city with a population of at least 10,000 but less than 10,500, the "city revenue need" 
34.16 	equals (1) the transition factor times the city's revenue need calculated in paragraph (a) 
34.17 	plus (2) the city's revenue need calculated under the formula in paragraph (b) times the 
34.18 	difference between one and the transition factor. For purposes of this paragraph "transition 
34.19 	factor" is 0.2 percent times the amount that the city's population exceeds the minimum 
34.20 	threshold in either of the first two sentences.
34.21 	(d) (e) The city revenue need cannot be less than zero.
34.22 	(e) (f) For calendar year 2005 2015 and subsequent years, the city revenue need for 
34.23 	a city, as determined in paragraphs (a) to (d) (e), is multiplied by the ratio of the annual 
34.24 	implicit price deflator for government consumption expenditures and gross investment for 
34.25 	state and local governments as prepared by the United States Department of Commerce, 
34.26 	for the most recently available year to the 2003 2013 implicit price deflator for state 
34.27 	and local government purchases.

34.28 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
34.29 	2014 and thereafter.

34.30 	Sec. 10. Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read:
34.31 		Subd. 42.City jobs base Jobs per capita. (a) "City jobs base" for a city with a 
34.32 	population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of 
34.33 	jobs per capita in the city, and (3) its population. For cities with a population less than 
34.34 	5,000, the city jobs base is equal to zero. For a city receiving aid under subdivision 36, 
34.35 	paragraph (k), its city jobs base is reduced by the lesser of 36 percent of the amount of 
35.1 	aid received under that paragraph or $1,000,000. No city's city jobs base may exceed 
35.2 	$4,725,000 under this paragraph.
35.3 	(b) For calendar year 2010 and subsequent years, the city jobs base for a city, as 
35.4 	determined in paragraph (a), is multiplied by the ratio of the appropriation under section 
35.5 	477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under 
35.6 	that section for aids payable in 2009.
35.7 	(c) For purposes of this subdivision, "Jobs per capita in the city" means (1) the 
35.8 	average annual number of employees in the city based on the data from the Quarterly 
35.9 	Census of Employment and Wages, as reported by the Department of Employment and 
35.10 	Economic Development, for the most recent calendar year available as of May 1, 2008
35.11 	 November 1 of every odd-numbered year, divided by (2) the city's population for the 
35.12 	same calendar year as the employment data. The commissioner of the Department of 
35.13 	Employment and Economic Development shall certify to the city the average annual 
35.14 	number of employees for each city by June 1, 2008 January 15, of every even-numbered 
35.15 	year beginning with January 15, 2014. A city may challenge an estimate under this 
35.16 	paragraph by filing its specific objection, including the names of employers that it feels 
35.17 	may have misreported data, in writing with the commissioner by June 20, 2008 December 
35.18 	1 of every odd-numbered year. The commissioner shall make every reasonable effort 
35.19 	to address the specific objection and adjust the data as necessary. The commissioner 
35.20 	shall certify the estimates of the annual employment to the commissioner of revenue by 
35.21 	July 15, 2008 January 15 of all even-numbered years, including any estimates still under 
35.22 	objection. For aids payable in 2014, "jobs per capita" shall be based on the annual number 
35.23 	of employees and population for calendar year 2010 without additional review.

35.24 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
35.25 	2014 and thereafter.

35.26 	Sec. 11. Minnesota Statutes 2012, section 477A.011, is amended by adding a 
35.27 	subdivision to read:
35.28 		Subd. 44.Peak population decline. "Peak population decline" is equal to 100 
35.29 	times the difference between one and the ratio of the city's current population, to the 
35.30 	highest city population reported in a federal census from the 1970 census or later. "Peak 
35.31 	population decline" shall not be less than zero.

35.32 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
35.33 	2014 and thereafter.

36.1 	Sec. 12. Minnesota Statutes 2012, section 477A.011, is amended by adding a 
36.2 	subdivision to read:
36.3 		Subd. 45.Sparsity adjustment. For a city with a population of 10,000 or more, the 
36.4 	sparsity adjustment is 100 for any city with an average population density less than 150 
36.5 	per square mile, according to the most recent federal census, and the sparsity adjustment is 
36.6 	zero for all other cities.

36.7 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
36.8 	2014 and thereafter.

36.9 	Sec. 13. Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read:
36.10 		Subd. 8.City formula aid. (a) For aids payable in 2014 only, the formula aid for 
36.11 	a city is equal to the lesser of its unmet need or the sum of (1) its 2013 certified aid and 
36.12 	(2) the product of (i) the difference between its unmet need and its 2013 certified aid 
36.13 	and (ii) the aid gap percentage.
36.14 	(b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to 
36.15 	the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase 
36.16 	percentage multiplied by the average of its unmet need for the most recently available two 
36.17 	years formula aid in the previous year and (2) the product of (i) the difference between 
36.18 	its unmet need and its certified aid in the previous year under subdivision 9, and (ii) 
36.19 	the aid gap percentage.
36.20 	No city may have a formula aid amount less than zero. The need increase aid gap
36.21 	 percentage must be the same for all cities.
36.22 	The applicable need increase aid gap percentage must be calculated by the 
36.23 	Department of Revenue so that the total of the aid under subdivision 9 equals the total 
36.24 	amount available for aid under section 477A.03. Data used in calculating aids to cities 
36.25 	under sections 477A.011 to 477A.013 shall be the most recently available data as of 
36.26 	January 1 in the year in which the aid is calculated except that the data used to compute "net 
36.27 	levy" in subdivision 9 is the data most recently available at the time of the aid computation.

36.28 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
36.29 	2014 and thereafter.

36.30 	Sec. 14. Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read:
36.31 		Subd. 9.City aid distribution. (a) In calendar year 2013 2014 and thereafter, each 
36.32 	city shall receive an aid distribution equal to the sum of (1) the city formula aid under 
36.33 	subdivision 8, and (2) its city aid base aid adjustment under subdivision 13.
37.1 	(b) For aids payable in 2013 and 2014 only, the total aid in the previous year for 
37.2 	any city shall mean the amount of aid it was certified to receive for aids payable in 2012 
37.3 	under this section. For aids payable in 2015 and thereafter, the total aid in the previous 
37.4 	year for any city means the amount of aid it was certified to receive under this section in 
37.5 	the previous payable year.
37.6 	(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed 
37.7 	the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution 
37.8 	plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total 
37.9 	aid for any city with a population of 2,500 or more may not be less than its total aid under 
37.10 	this section in the previous year minus the lesser of $10 multiplied by its population, or ten 
37.11 	percent of its net levy in the year prior to the aid distribution.
37.12 	(d) (b) For aids payable in 2014 only, the total aid for a city may not be less than the 
37.13 	amount it was certified to receive in 2013. For aids payable in 2010 2015 and thereafter, 
37.14 	the total aid for a city with a population less than 2,500 must not be less than the amount 
37.15 	it was certified to receive in the previous year minus the lesser of $10 multiplied by its 
37.16 	population, or five percent of its 2003 certified aid amount. For aids payable in 2009 only, 
37.17 	the total aid for a city with a population less than 2,500 must not be less than what it 
37.18 	received under this section in the previous year unless its total aid in calendar year 2008 
37.19 	was aid under section 477A.011, subdivision 36, paragraph (s), in which case its minimum 
37.20 	aid is zero its net levy in the year prior to the aid distribution.
37.21 	(e) A city's aid loss under this section may not exceed $300,000 in any year in 
37.22 	which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or 
37.23 	greater than the appropriation under that subdivision in the previous year, unless the 
37.24 	city has an adjustment in its city net tax capacity under the process described in section 
37.25 	469.174, subdivision 28.
37.26 	(f) If a city's net tax capacity used in calculating aid under this section has decreased 
37.27 	in any year by more than 25 percent from its net tax capacity in the previous year due to 
37.28 	property becoming tax-exempt Indian land, the city's maximum allowed aid increase 
37.29 	under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the 
37.30 	year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 
37.31 	resulting from the property becoming tax exempt.

37.32 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
37.33 	2014 and thereafter.

37.34 	Sec. 15. Minnesota Statutes 2012, section 477A.013, is amended by adding a 
37.35 	subdivision to read:
38.1 		Subd. 13.Certified aid adjustments. (a) A city that received an aid base increase 
38.2 	under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall 
38.3 	have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids 
38.4 	payable in 2014 through 2018.
38.5 	(b) A city that received a temporary aid increase under Minnesota Statutes 2012, 
38.6 	section 477A.011, subdivision 36, paragraph (m), (v), or (w), shall have its total aid under 
38.7 	subdivision 9 decreased by the amount of its aid base increase under those paragraphs in 
38.8 	calendar year 2013.

38.9 	Sec. 16. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:
38.10 		Subd. 2a.Cities. For aids payable in 2013 2014 and thereafter, the total aid paid 
38.11 	under section 477A.013, subdivision 9, is $426,438,012 $506,438,012. For aids payable 
38.12 	in 2015 and thereafter, the total aid paid under section 477A.013, subdivision 9, is the 
38.13 	amount certified under that section in the previous year multiplied by the inflation 
38.14 	adjustment under subdivision 6.

38.15 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
38.16 	2014 and thereafter.

38.17 	Sec. 17. Minnesota Statutes 2012, section 477A.03, subdivision 2b, is amended to read:
38.18 		Subd. 2b.Counties. (a) For aids payable in 2013 2014 and thereafter, the total aid 
38.19 	payable under section 477A.0124, subdivision 3, is $80,795,000 $95,795,000. Each 
38.20 	calendar year, $500,000 of this appropriation shall be retained by the commissioner 
38.21 	of revenue to make reimbursements to the commissioner of management and budget 
38.22 	for payments made under section 611.27. For calendar year 2004, the amount shall 
38.23 	be in addition to the payments authorized under section 477A.0124, subdivision 1. 
38.24 	For calendar year 2005 and subsequent years, the amount shall be deducted from the 
38.25 	appropriation under this paragraph. The reimbursements shall be to defray the additional 
38.26 	costs associated with court-ordered counsel under section 611.27. Any retained amounts 
38.27 	not used for reimbursement in a year shall be included in the next distribution of county 
38.28 	need aid that is certified to the county auditors for the purpose of property tax reduction 
38.29 	for the next taxes payable year.
38.30 	(b) For aids payable in 2013 2014 and thereafter, the total aid under section 
38.31 	477A.0124, subdivision 4, is $84,909,575 $99,909,575. The commissioner of management 
38.32 	and budget shall bill the commissioner of revenue for the cost of preparation of local impact 
38.33 	notes as required by section 3.987, not to exceed $207,000 in each fiscal year 2004 and 
38.34 	thereafter. The commissioner of education shall bill the commissioner of revenue for the 
39.1 	cost of preparation of local impact notes for school districts as required by section 3.987, 
39.2 	not to exceed $7,000 in each fiscal year 2004 and thereafter. The commissioner of revenue 
39.3 	shall deduct the amounts billed under this paragraph from the appropriation under this 
39.4 	paragraph. The amounts deducted are appropriated to the commissioner of management 
39.5 	and budget and the commissioner of education for the preparation of local impact notes.

39.6 	EFFECTIVE DATE. This section is effective for aid payable in 2014 and thereafter.

39.7 	Sec. 18. Minnesota Statutes 2012, section 477A.03, is amended by adding a 
39.8 	subdivision to read:
39.9 		Subd. 6.Inflation adjustment. In 2015 and thereafter, the amount paid under 
39.10 	subdivision 2a shall be multiplied by an amount equal to one plus the sum of (1) the 
39.11 	percentage increase in the implicit price deflator for government expenditures and gross 
39.12 	investment for state and local government purchases as prepared by the United States 
39.13 	Department of Commerce, for the 12-month period ending March 31 of the previous 
39.14 	calendar year, and (2) the percentage increase in total city population for the most recently 
39.15 	available years as of January 15 of the current year. The percentage increase in this 
39.16 	subdivision shall not be less than 2.5 percent or greater than five percent.

39.17 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
39.18 	2014 and thereafter.

39.19 	Sec. 19.  REPEALER.
 39.20 	(a) Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33, 
39.21 	36, 39, 40, 41, and 42; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are 
39.22 	repealed.
39.23 	(b) Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008, chapter 
39.24 	154, article 1, section 4, is repealed.

39.25 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
39.26 	2014 and thereafter.

39.27 	ARTICLE 4
39.28 	PROPERTY TAXES

39.29 	Section 1. Minnesota Statutes 2012, section 103B.102, subdivision 3, is amended to 
39.30 	read:
40.1 		Subd. 3.Evaluation and report. The Board of Water and Soil Resources shall 
40.2 	evaluate performance, financial, and activity information for each local water management 
40.3 	entity. The board shall evaluate the entities' progress in accomplishing their adopted plans 
40.4 	on a regular basis as determined by the board based on budget and operations of the local 
40.5 	water management entity, but not less than once every five ten years. The board shall 
40.6 	maintain a summary of local water management entity performance on the board's Web site. 
40.7 	Beginning February 1, 2008, and annually thereafter, the board shall provide an analysis 
40.8 	of local water management entity performance to the chairs of the house of representatives 
40.9 	and senate committees having jurisdiction over environment and natural resources policy.

40.10 	Sec. 2. Minnesota Statutes 2012, section 103B.335, is amended to read:
40.11 	103B.335 TAX LEVY AUTHORITY.
40.12 		Subdivision 1.Local water planning and management. The governing body of 
40.13 	any county, municipality, or township may levy a tax in an amount required to implement 
40.14 	sections 103B.301 to 103B.355 or a comprehensive watershed management plan as 
40.15 	defined in section 103B.3363.
40.16 		Subd. 2.Priority programs; conservation and watershed districts. A county 
40.17 	may levy amounts necessary to pay the reasonable increased costs to soil and water 
40.18 	conservation districts and watershed districts of administering and implementing priority 
40.19 	programs identified in an approved and adopted plan or a comprehensive watershed 
40.20 	management plan as defined in section 103B.3363.

40.21 	Sec. 3. Minnesota Statutes 2012, section 103B.3369, subdivision 5, is amended to read:
40.22 		Subd. 5.Financial assistance. A base grant may be awarded to a county that 
40.23 	provides a match utilizing a water implementation tax or other local source. A water 
40.24 	implementation tax that a county intends to use as a match to the base grant must be 
40.25 	levied at a rate sufficient to generate a minimum amount determined by the board. 
40.26 	The board may award performance-based grants to local units of government that are 
40.27 	responsible for implementing elements of applicable portions of watershed management 
40.28 	plans, comprehensive plans, local water management plans, or comprehensive watershed 
40.29 	management plans, developed or amended, adopted and approved, according to chapter 
40.30 	103B, 103C, or 103D. Upon request by a local government unit, the board may also 
40.31 	award performance-based grants to local units of government to carry out TMDL 
40.32 	implementation plans as provided in chapter 114D, if the TMDL implementation plan has 
40.33 	been incorporated into the local water management plan according to the procedures for 
40.34 	approving comprehensive plans, watershed management plans, local water management 
41.1 	plans, or comprehensive watershed management plans under chapter 103B, 103C, or 
41.2 	103D, or if the TMDL implementation plan has undergone a public review process. 
41.3 	Notwithstanding section 16A.41, the board may award performance-based grants on an 
41.4 	advanced basis. The fee authorized in section 40A.152 may be used as a local match 
41.5 	or as a supplement to state funding to accomplish implementation of comprehensive 
41.6 	plans, watershed management plans, local water management plans, or comprehensive 
41.7 	watershed management plans under chapter 103B, 103C, or 103D.

41.8 	Sec. 4. Minnesota Statutes 2012, section 103C.501, subdivision 4, is amended to read:
41.9 		Subd. 4.Cost-sharing funds. (a) The state board shall allocate at least 70 percent 
41.10 	of cost-sharing funds to areas with high priority erosion, sedimentation, or water quality 
41.11 	problems or water quantity problems due to altered hydrology. The areas must be selected 
41.12 	based on the statewide priorities established by the state board. 
41.13 	(b) The allocated funds must be used for conservation practices for high priority 
41.14 	problems identified in the comprehensive and annual work plans of the districts, for 
41.15 	the technical assistance portion of the grant funds to leverage federal or other nonstate 
41.16 	funds, or to address high-priority needs identified in local water management plans or 
41.17 	comprehensive watershed management plans.
41.18 	(b) The remaining cost-sharing funds may be allocated to districts as follows:
41.19 	(1) for technical and administrative assistance, not more than 20 percent of the 
41.20 	funds; and
41.21 	(2) for conservation practices for lower priority erosion, sedimentation, or water 
41.22 	quality problems.

41.23 	Sec. 5. Minnesota Statutes 2012, section 103F.405, subdivision 1, is amended to read:
41.24 		Subdivision 1.Authority. Each statutory or home rule charter city, town, or 
41.25 	county that has planning and zoning authority under sections 366.10 to 366.19, 394.21
41.26 	to 394.37, or 462.351 to 462.365 is encouraged to adopt a soil loss ordinance. The soil 
41.27 	loss ordinance must use the soil loss tolerance for each soil series described in the United 
41.28 	States SoilNatural Resources Conservation Service Field Office Technical Guide, or 
41.29 	another method approved by the Board of Water and Soil Resources, to determine the 
41.30 	soil loss limits, but the soil loss limits must be attainable by the best practicable soil 
41.31 	conservation practice. Ordinances adopted by local governments within the metropolitan 
41.32 	area defined in section 473.121 must be consistent with local water management plans 
41.33 	adopted under section 103B.235 a comprehensive plan, local water management plan, or 
42.1 	watershed management plan developed or amended, adopted and approved, according 
42.2 	to chapter 103B, 103C, or 103D.

42.3 	Sec. 6. Minnesota Statutes 2012, section 168.012, subdivision 9, is amended to read:
42.4 		Subd. 9.Manufactured homes and park trailers. Manufactured homes and park 
42.5 	trailers shall not be taxed as motor vehicles using the public streets and highways and shall 
42.6 	be exempt from the motor vehicle tax provisions of this chapter. Except as provided in 
42.7 	section 273.125, manufactured homes and park trailers shall be taxed as personal property. 
42.8 	The provisions of Minnesota Statutes 1957, section 272.02 or any other act providing for 
42.9 	tax exemption shall be inapplicable to manufactured homes and park trailers, except such 
42.10 	manufactured homes as are held by a licensed dealer or limited dealer and exempted as 
42.11 	inventory under subdivision 9a. Travel trailers not conspicuously displaying current 
42.12 	registration plates on the property tax assessment date shall be taxed as manufactured 
42.13 	homes if occupied as human dwelling places.

42.14 	EFFECTIVE DATE. This section is effective for taxes payable in 2014 and 
42.15 	thereafter.

42.16 	Sec. 7. Minnesota Statutes 2012, section 168.012, is amended by adding a subdivision 
42.17 	to read:
42.18 		Subd. 9a.Manufactured home as dealer inventory. Manufactured homes as 
42.19 	defined in section 327.31, subdivision 6, shall be considered as dealer inventory if the 
42.20 	home is:
42.21 	(1) listed as inventory and held by a licensed or limited dealer;
42.22 	(2) unoccupied and not available for rent;
42.23 	(3) may or may not be permanently connected to utilities when located in a 
42.24 	manufactured park; and
42.25 	(4) may or may not be temporarily connected to utilities when located at a dealer's 
42.26 	sales center.

42.27 	EFFECTIVE DATE. This section is effective for taxes payable in 2014 and 
42.28 	thereafter.

42.29 	Sec. 8. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
42.30 		Subd. 39.Economic development; public purpose. The holding of property by a 
42.31 	political subdivision of the state for later resale for economic development purposes shall 
42.32 	be considered a public purpose in accordance with subdivision 8 for a period not to exceed 
43.1 	nine years, except that for property located in a city of 5,000 20,000 population or under 
43.2 	that is located outside of the metropolitan area as defined in section 473.121, subdivision 
43.3 	2, the period must not exceed 15 years.
43.4 	The holding of property by a political subdivision of the state for later resale (1) 
43.5 	which is purchased or held for housing purposes, or (2) which meets the conditions 
43.6 	described in section 469.174, subdivision 10, shall be considered a public purpose in 
43.7 	accordance with subdivision 8.
43.8 	The governing body of the political subdivision which acquires property which is 
43.9 	subject to this subdivision shall after the purchase of the property certify to the city or 
43.10 	county assessor whether the property is held for economic development purposes or 
43.11 	housing purposes, or whether it meets the conditions of section 469.174, subdivision 10. 
43.12 	If the property is acquired for economic development purposes and buildings or other 
43.13 	improvements are constructed after acquisition of the property, and if more than one-half 
43.14 	of the floor space of the buildings or improvements which is available for lease to or use 
43.15 	by a private individual, corporation, or other entity is leased to or otherwise used by 
43.16 	a private individual, corporation, or other entity the provisions of this subdivision shall 
43.17 	not apply to the property. This subdivision shall not create an exemption from section 
43.18 	272.01, subdivision 2; 272.68; 273.19; or 469.040, subdivision 3; or other provision of 
43.19 	law providing for the taxation of or for payments in lieu of taxes for publicly held property 
43.20 	which is leased, loaned, or otherwise made available and used by a private person.

43.21 	EFFECTIVE DATE. This section is effective for assessment year 2013 and 
43.22 	thereafter and for taxes payable in 2014 and thereafter.

43.23 	Sec. 9. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision 
43.24 	to read:
43.25 		Subd. 98.Certain property owned by an Indian tribe. (a) Property is exempt that:
43.26 	(1) was classified as 3a under section 273.13, subdivision 24, for taxes payable 
43.27 	in 2013;
43.28 	(2) is located in a city of the first class with a population greater than 300,000 as of 
43.29 	the 2010 federal census;
43.30 	(3) is owned and occupied directly or indirectly by a federally recognized Indian 
43.31 	tribe within the state of Minnesota; and
43.32 	(4) is used exclusively for tribal purposes or institutions of public charity as defined 
43.33 	in subdivision 7.
43.34 	(b) For purposes of this subdivision, a "tribal purpose" is a public purpose as defined 
43.35 	in subdivision 8 and includes noncommercial tribal government activities. Property 
44.1 	that qualifies for the exemption under this subdivision is limited to no more than two 
44.2 	contiguous parcels and structures that do not exceed in the aggregate 20,000 square feet. 
44.3 	Property acquired for single-family housing, market-rate apartments, agriculture, or 
44.4 	forestry does not qualify for this exemption. The exemption created by this subdivision 
44.5 	expires with taxes payable in 2024.

44.6 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2014.

44.7 	Sec. 10. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision 
44.8 	to read:
44.9 		Subd. 99.Public entertainment facility; property tax exemption; special 
44.10 	assessment. Any real or personal property acquired, owned, leased, controlled, used, 
44.11 	or occupied by a first class city for the primary purpose of providing an arena for a 
44.12 	professional basketball team is declared to be acquired, owned, leased, controlled, used, 
44.13 	and occupied for public, governmental, and municipal purposes, and is exempt from ad 
44.14 	valorem taxation by the state or any political subdivision of the state, provided that the 
44.15 	properties are subject to special assessments levied by a political subdivision for a local 
44.16 	improvement in amounts proportionate to and not exceeding the special benefit received 
44.17 	by the properties from the improvement. In determining the special benefit received by 
44.18 	the properties, no possible use of any of the properties in any manner different from their 
44.19 	intended use for providing a professional basketball arena at the time may be considered. 
44.20 	Notwithstanding section 272.01, subdivision 2, or 273.19, real or personal property subject 
44.21 	to a lease or use agreement between the city and another person for uses related to the 
44.22 	purposes of the operation of the arena is exempt from taxation regardless of the length of 
44.23 	the lease or use agreement. This section, insofar as it provides an exemption or special 
44.24 	treatment, does not apply to any real property that is leased for residential, business, or 
44.25 	commercial development, or to a restaurant that is open for general business more than 
44.26 	200 days a year, or for other purposes different from those necessary to the provision 
44.27 	and operation of the arena.

44.28 	EFFECTIVE DATE. This section is effective beginning with assessment year 2013.

44.29 	Sec. 11. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision 
44.30 	to read:
44.31 		Subd. 100.Public entertainment facility; property tax exemption; special 
44.32 	assessment. Any real or personal property acquired, owned, leased, controlled, used, 
44.33 	or occupied by a first class city for the primary purpose of providing a ball park for a 
45.1 	minor league baseball team is declared to be acquired, owned, leased, controlled, used, 
45.2 	and occupied for public, governmental, and municipal purposes, and is exempt from ad 
45.3 	valorem taxation by the state or any political subdivision of the state, provided that the 
45.4 	properties are subject to special assessments levied by a political subdivision for a local 
45.5 	improvement in amounts proportionate to and not exceeding the special benefit received 
45.6 	by the properties from the improvement. In determining the special benefit received by 
45.7 	the properties, no possible use of any of the properties in any manner different from 
45.8 	their intended use for providing a minor league ballpark at the time may be considered. 
45.9 	Notwithstanding section 272.01, subdivision 2, or 273.19, real or personal property 
45.10 	subject to a lease or use agreement between the city and another person for uses related to 
45.11 	the purposes of the operation of the ballpark and related parking facilities is exempt from 
45.12 	taxation regardless of the length of the lease or use agreement. This section, insofar as it 
45.13 	provides an exemption or special treatment, does not apply to any real property that is 
45.14 	leased for residential, business, or commercial development or other purposes different 
45.15 	from those necessary to the provision and operation of the ball park.

45.16 	EFFECTIVE DATE. This section is effective beginning with assessment year 2013.

45.17 	Sec. 12. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision 
45.18 	to read:
45.19 		Subd. 101.Electric generation facility; personal property. (a) Notwithstanding 
45.20 	subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and 
45.21 	other personal property which is part of an electric generation facility that exceeds five 
45.22 	megawatts of installed capacity and meets the requirements of this subdivision is exempt. 
45.23 	At the time of construction, the facility must be:
45.24 	(1) designed to utilize natural gas as a primary fuel;
45.25 	(2) owned and operated by a municipal power agency as defined in section 453.52, 
45.26 	subdivision 8;
45.27 	(3) designed to utilize reciprocating engines paired with generators to produce 
45.28 	electrical power;
45.29 	(4) located within the service territory of a municipal power agency's electrical 
45.30 	municipal utility that serves load exclusively in a metropolitan county as defined in 
45.31 	section 473.121, subdivision 4; and
45.32 	(5) designed to connect directly with a municipality's substation.
45.33 	(b) Construction of the facility must be commenced after June 1, 2013, and before 
45.34 	June 1, 2017. Property eligible for this exemption does not include electric transmission 
46.1 	lines and interconnections or gas pipelines and interconnections appurtenant to the 
46.2 	property or the facility.

46.3 	EFFECTIVE DATE. This section is effective for assessment year 2013, taxes 
46.4 	payable in 2014, and thereafter.

46.5 	Sec. 13. Minnesota Statutes 2012, section 273.11, is amended by adding a subdivision 
46.6 	to read:
46.7 		Subd. 24.Valuation limit for class 4d property. Notwithstanding the provisions of 
46.8 	subdivision 1, the taxable value of any property classified as class 4d under section 273.13, 
46.9 	subdivision 25, is limited as provided under this section. For assessment year 2013, the 
46.10 	value may not exceed $100,000 times the number of dwelling units. For subsequent years, 
46.11 	the limit is adjusted each year by the average statewide change in estimated market value 
46.12 	of property classified as class 4a and 4d under section 273.13, subdivision 25, for the 
46.13 	previous assessment year, excluding valuation change due to new construction, rounded to 
46.14 	the nearest $1,000. Beginning with assessment year 2014, the commissioner of revenue 
46.15 	must certify the limit for each assessment year by November 1 of the previous year.

46.16 	EFFECTIVE DATE. This section is effective beginning with assessment year 2013.

46.17 	Sec. 14. Minnesota Statutes 2012, section 279.01, subdivision 1, is amended to read:
46.18 		Subdivision 1.Due dates; penalties. Except as provided in subdivision subdivisions
46.19 	 3 or 4 to 5, on May 16 or 21 days after the postmark date on the envelope containing the 
46.20 	property tax statement, whichever is later, a penalty accrues and thereafter is charged upon 
46.21 	all unpaid taxes on real estate on the current lists in the hands of the county treasurer. The 
46.22 	penalty is at a rate of two percent on homestead property until May 31 and four percent on 
46.23 	June 1. The penalty on nonhomestead property is at a rate of four percent until May 31 and 
46.24 	eight percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days 
46.25 	after the postmark date on the envelope containing the property tax statements, whichever 
46.26 	is later, on commercial use real property used for seasonal residential recreational purposes 
46.27 	and classified as class 1c or 4c, and on other commercial use real property classified as 
46.28 	class 3a, provided that over 60 percent of the gross income earned by the enterprise on the 
46.29 	class 3a property is earned during the months of May, June, July, and August. In order for 
46.30 	the first half of the tax due on class 3a property to be paid after May 15 and before June 1, 
46.31 	or 21 days after the postmark date on the envelope containing the property tax statement, 
46.32 	whichever is later, without penalty, the owner of the property must attach an affidavit 
46.33 	to the payment attesting to compliance with the income provision of this subdivision. 
47.1 	Thereafter, for both homestead and nonhomestead property, on the first day of each month 
47.2 	beginning July 1, up to and including October 1 following, an additional penalty of one 
47.3 	percent for each month accrues and is charged on all such unpaid taxes provided that if the 
47.4 	due date was extended beyond May 15 as the result of any delay in mailing property tax 
47.5 	statements no additional penalty shall accrue if the tax is paid by the extended due date. If 
47.6 	the tax is not paid by the extended due date, then all penalties that would have accrued if 
47.7 	the due date had been May 15 shall be charged. When the taxes against any tract or lot 
47.8 	exceed $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark 
47.9 	date on the envelope containing the property tax statement, whichever is later; and, if so 
47.10 	paid, no penalty attaches; the remaining one-half may be paid at any time prior to October 
47.11 	16 following, without penalty; but, if not so paid, then a penalty of two percent accrues 
47.12 	thereon for homestead property and a penalty of four percent on nonhomestead property. 
47.13 	Thereafter, for homestead property, on the first day of November an additional penalty of 
47.14 	four percent accrues and on the first day of December following, an additional penalty of 
47.15 	two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead 
47.16 	property, on the first day of November and December following, an additional penalty of 
47.17 	four percent for each month accrues and is charged on all such unpaid taxes. If one-half of 
47.18 	such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope 
47.19 	containing the property tax statement, whichever is later, the same may be paid at any time 
47.20 	prior to October 16, with accrued penalties to the date of payment added, and thereupon 
47.21 	no penalty attaches to the remaining one-half until October 16 following.
47.22 	This section applies to payment of personal property taxes assessed against 
47.23 	improvements to leased property, except as provided by section 277.01, subdivision 3.
47.24 	A county may provide by resolution that in the case of a property owner that has 
47.25 	multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in 
47.26 	installments as provided in this subdivision.
47.27 	The county treasurer may accept payments of more or less than the exact amount of 
47.28 	a tax installment due. Payments must be applied first to the oldest installment that is due 
47.29 	but which has not been fully paid. If the accepted payment is less than the amount due, 
47.30 	payments must be applied first to the penalty accrued for the year or the installment being 
47.31 	paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum 
47.32 	payment required as a condition for filing an appeal under section 278.03 or any other law, 
47.33 	nor does it affect the order of payment of delinquent taxes under section 280.39.

47.34 	Sec. 15. Minnesota Statutes 2012, section 279.01, is amended by adding a subdivision 
47.35 	to read:
48.1 		Subd. 5.Federal active service exception. In the case of a homestead property 
48.2 	owned by an individual who is on federal active service, as defined in section 190.05, 
48.3 	subdivision 5c, as a member of the National Guard or a reserve component, a six-month 
48.4 	grace period is granted for complying with the due dates imposed by subdivision 1. During 
48.5 	this period, no late fees or penalties shall accrue against the property. The due date for 
48.6 	property taxes owed under this chapter for an individual covered by this subdivision shall 
48.7 	be November 16 for taxes due on May 16, and April 16 of the following year for taxes due 
48.8 	on October 16. A taxpayer making a payment under this subdivision must accompany 
48.9 	the payment with a signed copy of the taxpayer's orders or form DD214 showing the 
48.10 	dates of active service which clearly indicate that the taxpayer was in active service as a 
48.11 	member of the National Guard or a reserve component on the date the payment was due. 
48.12 	This grace period applies to all homestead property owned by individuals on federal active 
48.13 	service, as herein defined, for all of that property's due dates which fall on a day that is 
48.14 	included in the taxpayer's federal active service.

48.15 	Sec. 16. Minnesota Statutes 2012, section 279.02, is amended to read:
48.16 	279.02 DUTIES OF COUNTY AUDITOR AND TREASURER.
48.17 		Subdivision 1.Delinquent property; rates. On the first business day in January, of 
48.18 	each year, the county treasurer shall return the tax lists on hand to the county auditor, who 
48.19 	shall compare the same with the statements receipted for by the treasurer on file in the 
48.20 	auditor's office and each tract or lot of real property against which the taxes, or any part 
48.21 	thereof, remain unpaid, shall be deemed delinquent, and thereupon an additional penalty 
48.22 	of two percent on the amount of the original tax remaining unpaid shall immediately 
48.23 	accrue and thereafter be charged upon all such delinquent taxes; and any auditor who 
48.24 	shall make out and deliver any statement of delinquent taxes without including therein 
48.25 	the penalties imposed by law, and any treasurer who shall receive payment of such taxes 
48.26 	without including in such payment all items as shown on the auditor's statement, shall be 
48.27 	liable to the county for the amounts of any items omitted.
48.28 		Subd. 2.Federal active service exception. Notwithstanding subdivision 1, a 
48.29 	homestead property owned by an individual who is on federal active service, as defined 
48.30 	in section 190.05, subdivision 5c, as a member of the National Guard or a reserve 
48.31 	component, shall not be deemed delinquent under this section if the due dates imposed 
48.32 	under section 279.01 fall on a day in which the individual was on federal active service.

48.33 	Sec. 17. Minnesota Statutes 2012, section 287.05, is amended by adding a subdivision 
48.34 	to read:
49.1 		Subd. 10.Hennepin and Ramsey Counties. For properties located in Hennepin 
49.2 	and Ramsey Counties, the county may impose an additional mortgage registry tax as 
49.3 	defined in sections 383A.80 and 383B.80.

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

49.5 	Sec. 18. [287.40] HENNEPIN AND RAMSEY COUNTIES.
49.6 	For properties located in Hennepin and Ramsey Counties, the county may impose an 
49.7 	additional deed tax as defined in sections 383A.80 and 383B.80.

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

49.9 	Sec. 19. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243, 
49.10 	article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter 
49.11 	154, article 2, section 30, is amended to read:
49.12 	Sec. 3. TAX; PAYMENT OF EXPENSES.
 49.13 	(a) The tax levied by the hospital district under Minnesota Statutes, section 447.34, 
49.14 	must not be levied at a rate that exceeds the amount authorized to be levied under that 
49.15 	section. The proceeds of the tax may be used for all purposes of the hospital district, 
49.16 	except as provided in paragraph (b).
49.17 	(b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used 
49.18 	solely by the Cook ambulance service and the Orr ambulance service for the purpose of 
49.19 	capital expenditures as it relates to:
49.20 	(1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance 
49.21 	service and not;
49.22 	(2) attached and portable equipment for use in and for the ambulances; and
49.23 	(3) parts and replacement parts for maintenance and repair of the ambulances.
49.24 	The money may not be used for administrative, operation,  or salary expenses.
49.25 	(c) The part of the levy referred to in paragraph (b) must be administered by the 
49.26 	Cook Hospital and passed on in equal amounts directly to the Cook area ambulance 
49.27 	service board and the city of Orr to be held in trust until funding for a new ambulance is 
49.28 	needed by either the Cook ambulance service or the Orr ambulance service used for the 
49.29 	purposes in paragraph (b).

49.30 	Sec. 20. Laws 1999, chapter 243, article 6, section 11, is amended to read:
49.31 	Sec. 11. CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.
 50.1 		Subdivision 1.Levy authorized. Notwithstanding other law to the contrary, the 
50.2 	Carlton county board of commissioners may annually levy in and for the unorganized 
50.3 	township territory of Sawyer an amount up to $1,000 annually for cemetery purposes, 
50.4 	beginning with taxes payable in 2000 and ending with taxes payable in 2009.
50.5 		Subd. 2.Effective date. This section is effective June 1, 1999, without local 
50.6 	approval.

50.7 	EFFECTIVE DATE; LOCAL APPROVAL. This section applies to taxes 
50.8 	payable in 2014 and thereafter, and is effective the day after the Carlton county board 
50.9 	of commissioners and its chief clerical officer timely complete their compliance with 
50.10 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.

50.11 	Sec. 21. Laws 2008, chapter 366, article 5, section 33, the effective date, is amended to 
50.12 	read:

50.13 	EFFECTIVE DATE. This section is effective for taxes levied in 2008, payable in 
50.14 	2009, and is repealed effective for taxes levied in 2013 2018, payable in 2014 2019, 
50.15 	and thereafter.

50.16 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2014.

50.17 	Sec. 22. Laws 2010, chapter 389, article 1, section 12, the effective date, is amended to 
50.18 	read:

50.19 	EFFECTIVE DATE. This section is effective for assessment years year 2010 and 
50.20 	2011, for taxes payable in 2011 and 2012 thereafter.

50.21 	EFFECTIVE DATE. This section is effective for assessment year 2012 and 
50.22 	thereafter.

50.23 	Sec. 23. MINNEAPOLIS AND ST. PAUL; ENTERTAINMENT FACILITIES 
50.24 	COORDINATION.
 50.25 	(a) On or before January 1, 2015, the cities of St. Paul and Minneapolis shall establish 
50.26 	a joint governing structure to coordinate and provide for joint marketing, promotion, and 
50.27 	scheduling of conventions and events at the Target Center and Xcel Energy Center.
50.28 	(b) On or before February 1, 2014, the cities of St. Paul and Minneapolis, and 
50.29 	representatives from the primary professional sports team tenant of each facility, shall also 
50.30 	study and report to the legislature on creating a joint governing structure to provide for 
50.31 	joint administration, financing, and operations of the facilities and the possible effects of 
51.1 	joint governance on the finances of each facility and each city. The study under this 
51.2 	paragraph must:
51.3 	(1) examine the current finances of each facility, including past and projected costs 
51.4 	and revenues; projected capital improvements; and the current and projected impact 
51.5 	of each facility on the city's general fund;
51.6 	(2) determine the impacts of joint governance on the future finances of each facility 
51.7 	and city;
51.8 	(3) examine the inclusion of other entertainment venues in the joint governance, and 
51.9 	the impact the inclusion of those facilities would have on all the facilities within the joint 
51.10 	governing structure and the cities in which they are located; and
51.11 	(4) consider the amount of city, regional, and state funding, if any, that would be 
51.12 	required to fund and operate the facilities under a joint governing structure.
51.13 	(c) In considering joint governing structures under paragraph (b), the study shall 
51.14 	specifically consider the feasibility of joining the Target Center and the Xcel Energy 
51.15 	Center, and possibly other venues, to the Minnesota Sports Facilities Authority under 
51.16 	Minnesota Statutes, section 473J.08. 
51.17 	(d) Representatives of the cities and the primary professional sports team tenants 
51.18 	of each facility shall meet within 30 days of the effective date of this section to begin 
51.19 	implementation of this section.

51.20 	EFFECTIVE DATE. This section is effective the day following final enactment 
51.21 	upon compliance with the provisions of Minnesota Statutes, section 645.021, subdivisions 
51.22 	2 and 3, by the governing bodies of the cities of St. Paul and Minneapolis and their chief 
51.23 	clerical officers, and provided that, notwithstanding the time limits under Minnesota 
51.24 	Statutes, section 645.021, subdivision 3, the certificates of approval are filed with the 
51.25 	secretary of state within 30 days after enactment of this act.

51.26 	Sec. 24. MORATORIUM ON CHANGES IN ASSESSMENT PRACTICE.
 51.27 	(a) An assessor may not deviate from current practices or policies used generally in 
51.28 	assessing or determining the taxable status of property used in the production of biofuels, 
51.29 	wine, beer, distilled beverages, or dairy products.
51.30 	(b) An assessor may not change the taxable status of any existing property involved 
51.31 	in the industrial processes identified in paragraph (a), unless the change is made as a result 
51.32 	of a change in use of the property, or to correct an error. For currently taxable properties, 
51.33 	the assessor may change the estimated market value of the property.

51.34 	EFFECTIVE DATE. This section is effective for assessment year 2013 only.

52.1 	Sec. 25. STUDY AND REPORT ON CERTAIN PROPERTY USED IN 
52.2 	BUSINESS AND PRODUCTION.
 52.3 	In order to provide the legislature with information on the assessment of property 
52.4 	used in business and production activities, the commissioner of revenue must study the 
52.5 	impact of the exception contained in Minnesota Statutes, section 272.03, subdivision 
52.6 	1(c)(iii). The commissioner must report a summary of findings and recommendations to 
52.7 	the chairs and ranking minority members of the taxes committees of the senate and house 
52.8 	of representatives by February 1, 2014.

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

52.10 	Sec. 26. REIMBURSEMENT FOR PROPERTY TAX ABATEMENTS.
 52.11 		Subdivision 1.Reimbursement. The commissioner of revenue shall reimburse 
52.12 	taxing jurisdictions for property tax abatements granted in Hennepin County under Laws 
52.13 	2011, First Special Session chapter 7, article 5, section 13, notwithstanding the time limits 
52.14 	contained in that section. The reimbursements must be made to each taxing jurisdiction 
52.15 	pursuant to the certification of the Hennepin County auditor.
52.16 		Subd. 2.Appropriation. The amount necessary, not to exceed $400,000, is 
52.17 	appropriated to the commissioner of revenue from the general fund to make the payments 
52.18 	required under this section. This appropriation does not cancel but is available until June 
52.19 	30, 2014.

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

52.21 	Sec. 27. IRON RANGE FISCAL DISPARITIES STUDY.
 52.22 		Subdivision 1.Study required. The commissioner of revenue shall conduct a study 
52.23 	of the tax relief area revenue distribution program contained in Minnesota Statutes, chapter 
52.24 	276A, commonly known as the Iron Range fiscal disparities program. By February 1, 
52.25 	2015, the commissioner shall submit a report to the chairs and ranking minority members 
52.26 	of the house of representatives and senate tax committees consisting of the findings of the 
52.27 	study and identification of issues for policy makers to consider. The study must analyze:
52.28 	(1) the extent to which the benefits of the economic growth in the region are shared 
52.29 	throughout the region, especially for growth that results from state or regional decisions;
52.30 	(2) the program's impact on the variability of tax rates across jurisdictions of the 
52.31 	region;
52.32 	(3) the program's impact on the distribution of homestead property tax burdens 
52.33 	across jurisdictions of the region; and
53.1 	(4) the relationship between the impacts of the program and overburden on 
53.2 	jurisdictions containing properties that provide regional benefits, specifically the costs 
53.3 	those properties impose on their host jurisdictions in excess of their tax payments. The 
53.4 	report must include a description of other property tax, aid, and local development 
53.5 	programs that interact with the fiscal disparities program.
53.6 		Subd. 2.Funds transfer from fiscal disparities levy. For taxes payable in 2014 
53.7 	only, $75,000 must be added to St. Louis County's areawide levy as otherwise determined 
53.8 	under Minnesota Statutes, section 276A.06, subdivision 5. Upon receipt of the proceeds of 
53.9 	this levy, St. Louis County must transfer this money to the commissioner of management 
53.10 	and budget for deposit into an account in the special revenue fund. One-half of the 
53.11 	proceeds of the levy must be transferred prior to June 30, 2014.
53.12 		Subd. 3.Appropriation. $37,500 in fiscal year 2014 and $37,500 in fiscal year 
53.13 	2015 are appropriated from the account in the special revenue fund established under 
53.14 	subdivision 2 to the commissioner of revenue to pay for the study required by this section. 
53.15 	Any amounts remaining in the account in the special revenue fund on June 30, 2015, must 
53.16 	be distributed to St. Louis County for the purposes of reducing the areawide tax rate 
53.17 	for taxes payable in 2016.

53.18 	EFFECTIVE DATE. This section is effective July 1, 2013.

53.19 	Sec. 28.  REPEALER.
 53.20 	(a) Minnesota Statutes 2012, sections 428A.101; and 428A.21, are repealed.
53.21 	(b) Minnesota Statutes 2012, sections 383A.80, subdivision 4; and 383B.80, 
53.22 	subdivision 4, are repealed.

53.23 	EFFECTIVE DATE. This section is effective the day following final enactment, 
53.24 	and paragraph (b) reinstates the authority for Hennepin and Ramsey Counties to impose 
53.25 	the additional mortgage registry and deed tax effective for deeds and mortgages executed 
53.26 	on or after July 1, 2013.

53.27 	ARTICLE 5
53.28 	SPECIAL TAXES

53.29 	Section 1. Minnesota Statutes 2012, section 270C.56, subdivision 1, is amended to read:
53.30 		Subdivision 1.Liability imposed. A person who, either singly or jointly with 
53.31 	others, has the control of, supervision of, or responsibility for filing returns or reports, 
53.32 	paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a 
53.33 	person who is liable under any other law, is liable for the payment of taxes arising under 
54.1 	chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658, 290.92, and 297E.02, 
54.2 	and the applicable penalties and interest on those taxes.

54.3 	EFFECTIVE DATE. This section is effective July 1, 2013.

54.4 	Sec. 2. [295.61] SPORTS MEMORABILIA GROSS RECEIPTS TAX.
54.5 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
54.6 	have the meanings given, unless the context clearly indicates otherwise.
54.7 	(b) "Commissioner" means the commissioner of revenue.
54.8 	(c) "Sale" means a transfer of title or possession of tangible personal property, 
54.9 	whether absolutely or conditionally.
54.10 	(d) "Sports memorabilia" means items available for sale to the public that are sold 
54.11 	under a license granted by any professional sports league or a team that is a franchise of a 
54.12 	professional sports league, or an affiliate or subsidiary of a league or a team, including:
54.13 	(1) one-of-a-kind items related to sports figures, teams, or events;
54.14 	(2) trading cards;
54.15 	(3) photographs;
54.16 	(4) clothing;
54.17 	(5) sports event licensed items;
54.18 	(6) sports equipment; and
54.19 	(7) similar items.
54.20 	(e) "Wholesale" or "sale at wholesale" means a sale to a retailer, as defined in section 
54.21 	297A.61, subdivision 9, for the purpose of reselling the property to a third party.
54.22 	(f) "Wholesaler" means any person making wholesale sales of sports memorabilia 
54.23 	to purchasers in the state.
54.24 		Subd. 2.Imposition. A tax is imposed on each sale at wholesale of sports 
54.25 	memorabilia equal to ten percent of the gross revenues from the sale.
54.26 		Subd. 3.Estimated payments; annual return. (a) Each wholesaler must make 
54.27 	estimated payments of the tax for the calendar year to the commissioner in quarterly 
54.28 	installments by April 15, July 15, October 15, and January 15 of the following calendar 
54.29 	year. Estimated tax payments are not required if the tax for the calendar year is less than 
54.30 	$500. An underpayment of estimated installments bears interest at the rate specified in 
54.31 	section 270C.40, from the due date of the payment until paid or until the due date of the 
54.32 	annual return at the rate specified in section 270C.40. An underpayment of an estimated 
54.33 	installment is the difference between the amount paid and the lesser of (1) 90 percent of 
54.34 	one-quarter of the tax for the calendar year, or (2) the tax for the actual gross revenues 
54.35 	received during the quarter.
55.1 	(b) A taxpayer with an aggregate tax liability of $10,000 or more during a fiscal 
55.2 	year ending June 30, must remit all liabilities by funds transfer as defined in section 
55.3 	336.4A-104, paragraph (a), in the next calendar year. The funds-transfer payment date, 
55.4 	as defined in section 336.4A-401, is on or before the first funds-transfer business day 
55.5 	after the date the tax is due.
55.6 	(c) The taxpayer must file an annual return reconciling the estimated payments by 
55.7 	March 15 of the following calendar year.
55.8 	(d) The estimated payments and annual return must contain the information and be 
55.9 	in the form prescribed by the commissioner.
55.10 		Subd. 4.Compensating use tax. If the tax is not paid under subdivision 2, a 
55.11 	compensating tax is imposed on possession for sale or use of sports memorabilia in 
55.12 	the state. The rate of tax equals the rate under subdivision 2, and must be paid by the 
55.13 	possessor of the items.
55.14 		Subd. 5.Administrative provisions. Unless specifically provided otherwise by this 
55.15 	section, the audit, assessment, refund, penalty, interest, enforcement, collection remedies, 
55.16 	appeal, and administrative provisions of chapters 270C and 289A that apply to taxes 
55.17 	imposed under chapter 297A apply to taxes imposed under this section.
55.18 		Subd. 6.Disposition of revenues. The commissioner shall deposit the revenues 
55.19 	from the tax in the general fund.

55.20 	EFFECTIVE DATE. This section is effective for sales made after June 30, 2013.

55.21 	Sec. 3. Minnesota Statutes 2012, section 297F.01, subdivision 3, is amended to read:
55.22 		Subd. 3.Cigarette. "Cigarette" means any roll for smoking made wholly or in part 
55.23 	of tobacco, that weighs 4.5 pounds or less per thousand:
55.24 	(1) the wrapper or cover of which is made of paper or another substance or material 
55.25 	except tobacco; or
55.26 	(2) wrapped in any substance containing tobacco, however labeled or named, which, 
55.27 	because of its appearance, size, the type of tobacco used in the filler, or its packaging, 
55.28 	pricing, marketing, or labeling, is likely to be offered to or purchased by consumers as 
55.29 	a cigarette, as defined in clause (1), unless it is wrapped in whole tobacco leaf and does 
55.30 	not have a cellulose acetate or other cigarette-like filter.

55.31 	EFFECTIVE DATE. This section is effective July 1, 2013.

55.32 	Sec. 4. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision 
55.33 	to read:
56.1 		Subd. 10b.Moist snuff. "Moist snuff" means any finely cut, ground, or powdered 
56.2 	smokeless tobacco that is intended to be placed or dipped in the mouth.

56.3 	Sec. 5. Minnesota Statutes 2012, section 297F.01, subdivision 19, is amended to read:
56.4 		Subd. 19.Tobacco products. "Tobacco products" means any product containing, 
56.5 	made, or derived from tobacco that is intended for human consumption, whether chewed, 
56.6 	smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, 
56.7 	or any component, part, or accessory of a tobacco product, including, but not limited 
56.8 	to, cigars; little cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut, 
56.9 	ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist 
56.10 	tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, cuttings 
56.11 	and sweepings of tobacco, and other kinds and forms of tobacco; but does not include 
56.12 	cigarettes as defined in this section. Tobacco products excludes any tobacco product 
56.13 	that has been approved by the United States Food and Drug Administration for sale as 
56.14 	a tobacco cessation product, as a tobacco dependence product, or for other medical 
56.15 	purposes, and is being marketed and sold solely for such an approved purpose.

56.16 	EFFECTIVE DATE. This section is effective July 1, 2013.

56.17 	Sec. 6. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read:
56.18 		Subdivision 1.Rates; cigarettes. A tax is imposed upon the sale of cigarettes in 
56.19 	this state, upon having cigarettes in possession in this state with intent to sell, upon any 
56.20 	person engaged in business as a distributor, and upon the use or storage by consumers, at 
56.21 	the following rates:
56.22 	(1) on cigarettes weighing not more than three pounds per thousand, 24141.5 mills 
56.23 	on each such cigarette; and
56.24 	(2) on cigarettes weighing more than three pounds per thousand, 48 283 mills on 
56.25 	each such cigarette.

56.26 	EFFECTIVE DATE. This section is effective July 1, 2013.

56.27 	Sec. 7. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision 
56.28 	to read:
56.29 		Subd. 1a.Annual indexing. (a) Each year the commissioner shall adjust the 
56.30 	tax rates under subdivision 1, including any adjustment made in prior years under this 
56.31 	subdivision, by multiplying the mill rates for the current calendar year by an adjustment 
56.32 	factor. The adjustment factor equals the in-lieu sales tax rate that applies to the following 
57.1 	calendar year divided by the in-lieu sales tax rate for the current calendar year. For 
57.2 	purposes of this subdivision, "in-lieu sales tax rate" means the tax rate established under 
57.3 	section 297F.25, subdivision 1, in tenths of a cent per pack.
57.4 	(b) The commissioner shall publish the resulting rate by November 1 and the rate 
57.5 	applies to sales made on or after January 1 of the following year.
57.6 	(c) The determination of the commissioner under this subdivision is not a rule and is 
57.7 	not subject to the Administrative Procedure Act in chapter 14.

57.8 	Sec. 8. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read:
57.9 		Subd. 3.Rates; tobacco products. (a) A tax is imposed upon all tobacco products 
57.10 	in this state and upon any person engaged in business as a distributor, at the rate of 35
57.11 	95 percent of the wholesale sales price of the tobacco products. The tax is imposed at 
57.12 	the time the distributor:
57.13 	(1) brings, or causes to be brought, into this state from outside the state tobacco 
57.14 	products for sale;
57.15 	(2) makes, manufactures, or fabricates tobacco products in this state for sale in 
57.16 	this state; or
57.17 	(3) ships or transports tobacco products to retailers in this state, to be sold by those 
57.18 	retailers.
57.19 	(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a 
57.20 	pack of 20 cigarettes weighing not more than three pounds per thousand, as established 
57.21 	under subdivision 1, is imposed on each container of moist snuff.
57.22 	For purposes of this subdivision, a "container" means the smallest consumer-size can, 
57.23 	package, or other container that is marketed or packaged by the manufacturer, distributor, 
57.24 	or retailer for separate sale to a retail purchaser.

57.25 	EFFECTIVE DATE. This section is effective July 1, 2013, except the minimum 
57.26 	tax under paragraph (b) is effective January 1, 2014.

57.27 	Sec. 9. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read:
57.28 		Subd. 4.Use tax; tobacco products. A tax is imposed upon the use or storage by 
57.29 	consumers of tobacco products in this state, and upon such consumers, at the rate of 35 95
57.30 	 percent of the cost to the consumer of the tobacco products or the minimum tax under 
57.31 	subdivision 3, paragraph (b), whichever is greater.

57.32 	EFFECTIVE DATE. This section is effective July 1, 2013.

58.1 	Sec. 10. Minnesota Statutes 2012, section 297F.24, subdivision 1, is amended to read:
58.2 		Subdivision 1.Fee imposed. (a) A fee is imposed upon the sale of nonsettlement 
58.3 	cigarettes in this state, upon having nonsettlement cigarettes in possession in this state 
58.4 	with intent to sell, upon any person engaged in business as a distributor, and upon the use 
58.5 	or storage by consumers of nonsettlement cigarettes. The fee equals a rate of 1.752.5 
58.6 	cents per cigarette.
58.7 	(b) The purpose of this fee is to:
58.8 	(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that 
58.9 	are comparable to costs attributable to the use of the cigarettes;
58.10 	(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's 
58.11 	policy of discouraging underage smoking by offering nonsettlement cigarettes at prices 
58.12 	substantially below the cigarettes of other manufacturers; and
58.13 	(3) fund such other purposes as the legislature determines appropriate.

58.14 	Sec. 11. Minnesota Statutes 2012, section 297F.25, subdivision 1, is amended to read:
58.15 		Subdivision 1.Imposition. (a) A tax is imposed on distributors on the sale of 
58.16 	cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this 
58.17 	state. The tax is equal to 6.5 percent ofthe combined tax rate under section 297A.62, 
58.18 	multiplied by the weighted average retail price and must be expressed in cents per pack 
58.19 	rounded to the nearest one-tenth of a cent. The weighted average retail price must be 
58.20 	determined annually, with new rates published by November 1, and effective for sales 
58.21 	on or after January 1 of the following year. The weighted average retail price must be 
58.22 	established by surveying cigarette retailers statewide in a manner and time determined by 
58.23 	the commissioner. The commissioner shall make an inflation adjustment in accordance 
58.24 	with the Consumer Price Index for all urban consumers inflation indicator as published in 
58.25 	the most recent state budget forecast. The commissioner shall use the inflation factor for 
58.26 	the calendar year in which the new tax rate takes effect. If the survey indicates that the 
58.27 	average retail price of cigarettes has not increased relative to the average retail price in 
58.28 	the previous year's survey, then the commissioner shall not make an inflation adjustment. 
58.29 	The determination of the commissioner pursuant to this subdivision is not a "rule" and is 
58.30 	not subject to the Administrative Procedure Act contained in chapter 14. For packs of 
58.31 	cigarettes with other than 20 cigarettes, the tax must be adjusted proportionally.
58.32 	(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the 
58.33 	tax calculation of the weighted average retail price for the sales of cigarettes from August 
58.34 	1, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average 
58.35 	retail price per pack of 20 cigarettes from the most recent survey by the percentage change 
59.1 	in a weighted average of the presumed legal prices for cigarettes during the year after 
59.2 	completion of that survey, as reported and published by the Department of Commerce 
59.3 	under section 325D.371; (2) subtracting the sales tax included in the retail price; and (3) 
59.4 	adjusting for expected inflation. The rate must be published by May 1 and is effective for 
59.5 	sales after July 31. If the weighted average of the presumed legal prices indicates that the 
59.6 	average retail price of cigarettes has not increased relative to the average retail price in the 
59.7 	most recent survey, then no inflation adjustment must be made. For packs of cigarettes 
59.8 	with other than 20 cigarettes, the tax must be adjusted proportionally.

59.9 	EFFECTIVE DATE. This section is effective July 1, 2013.

59.10 	Sec. 12. Minnesota Statutes 2012, section 297G.03, subdivision 1, is amended to read:
59.11 		Subdivision 1.General rate; distilled spirits and wine. The following excise tax is 
59.12 	imposed on all distilled spirits and wine manufactured, imported, sold, or possessed in 
59.13 	this state:

59.14			Standard
		Metric
	
59.15
59.16
59.17	(a) Distilled spirits, liqueurs, cordials, 
and specialties regardless of alcohol 
content (excluding ethyl alcohol)
	$
	5.03
11.02 per gallon
	$
	1.33
2.91 per liter
	
59.18
59.19
59.20
59.21	(b) Wine containing 14 percent or less 
alcohol by volume (except cider as 
defined in section 297G.01, subdivision 
3a)
	$
	.30
2.08 per gallon
	$
	.08
.55 per liter
	
59.22
59.23
59.24	(c) Wine containing more than 14 
percent but not more than 21 percent 
alcohol by volume
	$
	.95
2.73 per gallon
	$
	.25
.72 per liter
	
59.25
59.26
59.27	(d) Wine containing more than 21 
percent but not more than 24 percent 
alcohol by volume
	$
	1.82
3.64 per gallon
	$
	.48
.97 per liter
	
59.28
59.29	(e) Wine containing more than 24 
percent alcohol by volume
	$
	3.52
5.34 per gallon
	$
	.93
1.42 per liter
	
59.30
59.31	(f) Natural and artificial sparkling wines 
containing alcohol
	$
	1.82
3.60 per gallon
	$
	.48
.95 per liter
	
59.32
59.33	(g) Cider as defined in section 297G.01, 
subdivision 3a
	$
	.15
1.93 per gallon
	$
	.04
.51 per liter
	
59.34
59.35	(h) Low-alcohol dairy cocktails
	$
	.08
1.36 per gallon
	$
	.02
.36 per liter
	
59.36 	In computing the tax on a package of distilled spirits or wine, a proportional tax at a 
59.37 	like rate on all fractional parts of a gallon or liter must be paid, except that the tax on a 
59.38 	fractional part of a gallon less than 1/16 of a gallon is the same as for 1/16 of a gallon.

59.39 	EFFECTIVE DATE. This section is effective July 1, 2013.

60.1 	Sec. 13. Minnesota Statutes 2012, section 297G.03, is amended by adding a 
60.2 	subdivision to read:
60.3 		Subd. 5.Small winery credit. (a) A qualified winery is entitled to a tax credit of 
60.4 	$2.08 per gallon on 50,000 gallons sold in any fiscal year beginning July 1. Qualified 
60.5 	wineries may take the credit on the 18th day of each month, but the total credit allowed 
60.6 	may not exceed in any fiscal year the lesser of:
60.7 	(1) the liability for tax; or
60.8 	(2) $104,000.
60.9 	(b) For purposes of this subdivision, a "qualified winery" means a winery, whether 
60.10 	or not located in this state, producing less than 100,000 gallons of wine in the calendar 
60.11 	year immediately preceding the calendar year for which the credit under this subdivision 
60.12 	is claimed. In determining the number of gallons, all brands or labels of a winery must 
60.13 	be combined. All facilities for the production of wine owned or controlled by the same 
60.14 	person, corporation, or other entity must be treated as a single winery.

60.15 	EFFECTIVE DATE. This section is effective July 1, 2013.

60.16 	Sec. 14. Minnesota Statutes 2012, section 297G.04, is amended to read:
60.17 	297G.04 FERMENTED MALT BEVERAGES; RATE OF TAX.
60.18 		Subdivision 1.Tax imposed. The following excise tax is imposed on all fermented 
60.19 	malt beverages that are imported, directly or indirectly sold, or possessed in this state:
60.20 	(1) on fermented malt beverages containing not more than 3.2 percent alcohol by 
60.21 	weight, $2.40 $25.55 per 31-gallon barrel; and
60.22 	(2) on fermented malt beverages containing more than 3.2 percent alcohol by 
60.23 	weight, $4.60 $27.75 per 31-gallon barrel.
60.24 	For fractions of a 31-gallon barrel, the tax rate is calculated proportionally.
60.25 		Subd. 2.Tax credit. A qualified brewer producing fermented malt beverages is 
60.26 	entitled to a tax credit of $4.60 $27.75 per barrel on 25,000 50,000 barrels sold in any 
60.27 	fiscal year beginning July 1, regardless of the alcohol content of the product. Qualified 
60.28 	brewers may take the credit on the 18th day of each month, but the total credit allowed 
60.29 	may not exceed in any fiscal year the lesser of:
60.30 	(1) the liability for tax; or
60.31 	(2) $115,000 $1,387,500.
60.32 	For purposes of this subdivision, a "qualified brewer" means a brewer, whether or 
60.33 	not located in this state, manufacturing less than 100,000 200,000 barrels of fermented 
60.34 	malt beverages in the calendar year immediately preceding the calendar year for which 
61.1 	the credit under this subdivision is claimed. In determining the number of barrels, all 
61.2 	brands or labels of a brewer must be combined. All facilities for the manufacture of 
61.3 	fermented malt beverages owned or controlled by the same person, corporation, or other 
61.4 	entity must be treated as a single brewer.

61.5 	EFFECTIVE DATE. This section is effective July 1, 2013.

61.6 	Sec. 15. Minnesota Statutes 2012, section 325D.32, subdivision 2, is amended to read:
61.7 		Subd. 2.Cigarettes. "Cigarettes" means and includes any roll for smoking, made 
61.8 	wholly or in part of tobacco, irrespective of size and shape and whether or not such 
61.9 	tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover 
61.10 	of which is made of paper or any other substance or material except whole tobacco leaf, 
61.11 	and includes any cigarette as defined in section 297F.01, subdivision 3.

61.12 	EFFECTIVE DATE. This section is effective July 1, 2013.

61.13 	Sec. 16. FLOOR STOCKS TAX.
 61.14 		Subdivision 1.Cigarettes. (a) A floor stocks tax is imposed on every person 
61.15 	engaged in the business in this state as a distributor, retailer, subjobber, vendor, 
61.16 	manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and 
61.17 	unaffixed stamps in the person's possession or under the person's control at 12:01 a.m. on 
61.18 	July 1, 2013. The tax is imposed at the rate of 80 mills on each cigarette.
61.19 	(b) Each distributor, on or before July 11, 2013, shall file a return with the 
61.20 	commissioner of revenue, in the form the commissioner prescribes, showing the stamped 
61.21 	cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount 
61.22 	of tax due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor, 
61.23 	manufacturer, or manufacturer's representative, on or before July 11, 2013, shall file 
61.24 	a return with the commissioner, in the form the commissioner prescribes, showing the 
61.25 	cigarettes on hand at 12:01 a.m. on July 1, 2013, and the amount of tax due on the 
61.26 	cigarettes. The tax imposed by this section is due and payable on or before August 8, 
61.27 	2013, and after that date bears interest at the rate of one percent per month.
61.28 		Subd. 2.Audit and enforcement. The tax imposed by this section is subject to 
61.29 	the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and 
61.30 	collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner 
61.31 	of revenue may require a distributor to receive and maintain copies of floor stocks fee 
61.32 	returns filed by all persons requesting a credit for returned cigarettes.
62.1 		Subd. 3.Deposit of proceeds. The commissioner of revenue shall deposit the 
62.2 	revenues from the tax under this section in the state treasury and credit them to the 
62.3 	general fund.

62.4 	EFFECTIVE DATE. This section is effective July 1, 2013.

62.5 	Sec. 17. INTERIM SALES TAX RATE.
 62.6 	Notwithstanding the provisions of Minnesota Statutes, section 297F.25, the 
62.7 	commissioner shall adjust the weighted average retail price in section 297F.25, subdivision 
62.8 	1, on July 1, 2013, to reflect the price changes under this act. This weighted average 
62.9 	shall be used to compute cigarette sales tax under Minnesota Statutes, section 297F.25, 
62.10 	subdivision 1, until December 31, 2013, when the commissioner shall resume annual 
62.11 	adjustments to the weighted average sales price. The commissioner's determination of 
62.12 	the adjustment that takes effect on January 1, 2014, must be limited to the change in the 
62.13 	weighted average retail that occurs during calendar year 2013 but after July 15, 2013.

62.14 	EFFECTIVE DATE. This section is effective July 1, 2013.

62.15 	Sec. 18. TOBACCO TAX COLLECTION REPORT.
 62.16 		Subdivision 1.Report to legislature. (a) The commissioner of revenue shall report 
62.17 	to the 2014 legislature on the tobacco tax collection system, including recommendations 
62.18 	to improve compliance under the excise tax for both cigarettes and other tobacco products. 
62.19 	The purpose of the report is to provide information and guidance to the legislature on 
62.20 	improvements to the tobacco tax collection system to:
62.21 	(1) provide a unified system of collecting both the cigarette and other tobacco 
62.22 	taxes, regardless of category, size, or shape, that ensures the highest reasonable rates of 
62.23 	tax collection;
62.24 	(2) discourage tax evasion; and
62.25 	(3) help to prevent illegal sale of tobacco products, which may make these products 
62.26 	more accessible to youth.
62.27 	(b) In the report, the commissioner shall:
62.28 	(1) provide a detailed review of the present excise tax collection and compliance 
62.29 	system as it applies to both cigarettes and other tobacco products. This must include 
62.30 	an assessment of the levels of compliance for each category of products and the effect 
62.31 	of the stamping requirement on compliance for each category of products and the effect 
62.32 	of the stamping requirement on compliance rates for cigarettes relative to other tobacco 
62.33 	products. It also must identify any weaknesses in the system;
63.1 	(2) survey the methods of collection and enforcement used by other states or nations, 
63.2 	including identifying and discussing emerging best practices that ensure tracking of both 
63.3 	cigarettes and other tobacco products and result in the highest rates of tax collection and 
63.4 	compliance. These best practices must consider high-technology alternatives, such as use 
63.5 	of bar codes, radio-frequency identification tags, or similar mechanisms for tracking 
63.6 	compliance;
63.7 	(3) evaluate the adequacy and effectiveness of the existing penalties and other 
63.8 	sanctions for noncompliance;
63.9 	(4) evaluate the adequacy of the resources allocated by the state to enforce the 
63.10 	tobacco tax and prevention laws; and
63.11 	(5) make recommendations on implementation of a comprehensive tobacco tax 
63.12 	collection system for Minnesota that can be implemented by January 1, 2014, including:
63.13 	(i) recommendations on the specific steps needed to institute and implement the new 
63.14 	system, including estimates of the state's costs of doing so and any additional personnel 
63.15 	requirements;
63.16 	(ii) recommendations on methods to recover the cost of implementing the system 
63.17 	from the industry;
63.18 	(iii) evaluation of the extent to which the proposed system is sufficiently flexible 
63.19 	and adaptable to adjust to modifications in the construction, packaging, formatting, and 
63.20 	marketing of tobacco products by the industry; and
63.21 	(iv) recommendations to modify existing penalties or to impose new penalties or 
63.22 	other sanctions to ensure compliance with the system.
63.23 		Subd. 2.Due date. The report required by subdivision 1 is due January 1, 2014.
63.24 		Subd. 3.Procedure. The report required under this section must be made in the 
63.25 	manner provided under Minnesota Statutes, section 3.195. In addition, copies must be 
63.26 	provided to the chairs and ranking minority members of the legislative committees and 
63.27 	divisions with jurisdiction over taxation.
63.28 		Subd. 4.Appropriation. (a) $100,000 is appropriated from the general fund to the 
63.29 	commissioner of revenue for fiscal year 2014 for the cost of preparing the report under 
63.30 	subdivision 1.
63.31 	(b) The appropriation under this subdivision is a onetime appropriation and is not 
63.32 	included in the base budget.

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

64.1 	Sec. 19.  REPEALER.
 64.2 	Minnesota Statutes 2012, sections 16A.725; and 256.9658, are repealed.

64.3 	EFFECTIVE DATE. This section is effective July 1, 2013.

64.4 	ARTICLE 6
64.5 	INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

64.6 	Section 1. Minnesota Statutes 2012, section 116J.8737, subdivision 1, is amended to 
64.7 	read:
64.8 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms 
64.9 	have the meanings given.
64.10 	(b) "Qualified small business" means a business that has been certified by the 
64.11 	commissioner under subdivision 2.
64.12 	(c) "Qualified investor" means an investor who has been certified by the 
64.13 	commissioner under subdivision 3.
64.14 	(d) "Qualified fund" means a pooled angel investment network fund that has been 
64.15 	certified by the commissioner under subdivision 4.
64.16 	(e) "Qualified investment" means a cash investment in a qualified small business 
64.17 	of a minimum of:
64.18 	(1) $10,000 in a calendar year by a qualified investor; or
64.19 	(2) $30,000 in a calendar year by a qualified fund.
64.20 	A qualified investment must be made in exchange for common stock, a partnership 
64.21 	or membership interest, preferred stock, debt with mandatory conversion to equity, or an 
64.22 	equivalent ownership interest as determined by the commissioner.
64.23 	(f) "Family" means a family member within the meaning of the Internal Revenue 
64.24 	Code, section 267(c)(4).
64.25 	(g) "Pass-through entity" means a corporation that for the applicable taxable year is 
64.26 	treated as an S corporation or a general partnership, limited partnership, limited liability 
64.27 	partnership, trust, or limited liability company and which for the applicable taxable year is 
64.28 	not taxed as a corporation under chapter 290.
64.29 	(h) "Intern" means a student of an accredited institution of higher education, or a 
64.30 	former student who has graduated in the past six months from an accredited institution 
64.31 	of higher education, who is employed by a qualified small business in a nonpermanent 
64.32 	position for a duration of nine months or less that provides training and experience in the 
64.33 	primary business activity of the business.
65.1 	(i) "Liquidation event" means a conversion of qualified investment for cash, cash 
65.2 	and other consideration, or any other form of equity or debt interest.

65.3 	EFFECTIVE DATE. This section is effective for qualified small businesses 
65.4 	certified after June 30, 2013.

65.5 	Sec. 2. Minnesota Statutes 2012, section 116J.8737, subdivision 2, is amended to read:
65.6 		Subd. 2.Certification of qualified small businesses. (a) Businesses may apply 
65.7 	to the commissioner for certification as a qualified small business for a calendar year. 
65.8 	The application must be in the form and be made under the procedures specified by the 
65.9 	commissioner, accompanied by an application fee of $150. Application fees are deposited 
65.10 	in the small business investment tax credit administration account in the special revenue 
65.11 	fund. The application for certification for 2010 must be made available on the department's 
65.12 	Web site by August 1, 2010. Applications for subsequent years' certification must be made 
65.13 	available on the department's Web site by November 1 of the preceding year.
65.14 	(b) Within 30 days of receiving an application for certification under this subdivision, 
65.15 	the commissioner must either certify the business as satisfying the conditions required of a 
65.16 	qualified small business, request additional information from the business, or reject the 
65.17 	application for certification. If the commissioner requests additional information from the 
65.18 	business, the commissioner must either certify the business or reject the application within 
65.19 	30 days of receiving the additional information. If the commissioner neither certifies the 
65.20 	business nor rejects the application within 30 days of receiving the original application or 
65.21 	within 30 days of receiving the additional information requested, whichever is later, then 
65.22 	the application is deemed rejected, and the commissioner must refund the $150 application 
65.23 	fee. A business that applies for certification and is rejected may reapply.
65.24 	(c) To receive certification, a business must satisfy all of the following conditions:
65.25 	(1) the business has its headquarters in Minnesota;
65.26 	(2) at least 51 percent of the business's employees are employed in Minnesota, and 
65.27 	51 percent of the business's total payroll is paid or incurred in the state;
65.28 	(3) the business is engaged in, or is committed to engage in, innovation in Minnesota 
65.29 	in one of the following as its primary business activity:
65.30 	(i) using proprietary technology to add value to a product, process, or service in a 
65.31 	qualified high-technology field;
65.32 	(ii) researching or developing a proprietary product, process, or service in a qualified 
65.33 	high-technology field; or
65.34 	(iii) researching, developing, or producing a new proprietary technology for use in 
65.35 	the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
66.1 	(4) other than the activities specifically listed in clause (3), the business is not 
66.2 	engaged in real estate development, insurance, banking, lending, lobbying, political 
66.3 	consulting, information technology consulting, wholesale or retail trade, leisure, 
66.4 	hospitality, transportation, construction, ethanol production from corn, or professional 
66.5 	services provided by attorneys, accountants, business consultants, physicians, or health 
66.6 	care consultants;
66.7 	(5) the business has fewer than 25 employees;
66.8 	(6) the business must pay its employees annual wages of at least 175 percent of the 
66.9 	federal poverty guideline for the year for a family of four and must pay its interns annual 
66.10 	wages of at least 175 percent of the federal minimum wage used for federally covered 
66.11 	employers, except that this requirement must be reduced proportionately for employees 
66.12 	and interns who work less than full-time, and does not apply to an executive, officer, or 
66.13 	member of the board of the business, or to any employee who owns, controls, or holds 
66.14 	power to vote more than 20 percent of the outstanding securities of the business;
66.15 	(7) the business has (i) not been in operation for more than ten years, or (ii) the 
66.16 	business has not been in operation for more than 20 years if the business is engaged 
66.17 	in the research, development, or production of medical devices or pharmaceuticals for 
66.18 	which United States Food and Drug Administration approval is required for use in the 
66.19 	treatment or diagnosis of a disease or condition;
66.20 	(8) the business has not previously received private equity investments of more 
66.21 	than $4,000,000; and
66.22 	(9) the business is not an entity disqualified under section 80A.50, paragraph (b), 
66.23 	clause (3).; and
66.24 	(10) the business has not issued securities that are traded on a public exchange.
66.25 	(d) In applying the limit under paragraph (c), clause (5), the employees in all members 
66.26 	of the unitary business, as defined in section 290.17, subdivision 4, must be included.
66.27 	(e) In order for a qualified investment in a business to be eligible for tax credits,:
66.28 	(1) the business must have applied for and received certification for the calendar 
66.29 	year in which the investment was made prior to the date on which the qualified investment 
66.30 	was made.;
66.31 	(2) the business must not have issued securities that are traded on a public exchange;
66.32 	(3) the business must not issue securities that are traded on a public exchange within 
66.33 	180 days after the date on which the qualified investment was made; and
66.34 	(4) the business must not have a liquidation event within 180 days after the date on 
66.35 	which the qualified investment was made.
67.1 	(f) The commissioner must maintain a list of businesses certified under this 
67.2 	subdivision for the calendar year and make the list accessible to the public on the 
67.3 	department's Web site.
67.4 	(g) For purposes of this subdivision, the following terms have the meanings given:
67.5 	(1) "qualified high-technology field" includes aerospace, agricultural processing, 
67.6 	renewable energy, energy efficiency and conservation, environmental engineering, food 
67.7 	technology, cellulosic ethanol, information technology, materials science technology, 
67.8 	nanotechnology, telecommunications, biotechnology, medical device products, 
67.9 	pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar 
67.10 	fields; and
67.11 	(2) "proprietary technology" means the technical innovations that are unique and 
67.12 	legally owned or licensed by a business and includes, without limitation, those innovations 
67.13 	that are patented, patent pending, a subject of trade secrets, or copyrighted.

67.14 	EFFECTIVE DATE. This section is effective for qualified small businesses 
67.15 	certified after June 30, 2013, except the amendments to paragraph (c), clause (7), are 
67.16 	effective the day following final enactment.

67.17 	Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 8, is amended to read:
67.18 		Subd. 8.Data privacy. (a) Data contained in an application submitted to the 
67.19 	commissioner under subdivision 2, 3, or 4 are nonpublic data, or private data on 
67.20 	individuals, as defined in section 13.02, subdivision 9 or 12, except that the following 
67.21 	data items are public:
67.22 	(1) the name, mailing address, telephone number, e-mail address, contact person's 
67.23 	name, and industry type of a qualified small business upon approval of the application 
67.24 	and certification by the commissioner under subdivision 2;
67.25 	(2) the name of a qualified investor upon approval of the application and certification 
67.26 	by the commissioner under subdivision 3;
67.27 	(3) the name of a qualified fund upon approval of the application and certification 
67.28 	by the commissioner under subdivision 4;
67.29 	(4) for credit certificates issued under subdivision 5, the amount of the credit 
67.30 	certificate issued, amount of the qualifying investment, the name of the qualifying investor 
67.31 	or qualifying fund that received the certificate, and the name of the qualifying small 
67.32 	business in which the qualifying investment was made;
67.33 	(5) for credits revoked under subdivision 7, paragraph (a), the amount revoked and 
67.34 	the name of the qualified investor or qualified fund; and
68.1 	(6) for credits revoked under subdivision 7, paragraphs (b) and (c), the amount 
68.2 	revoked and the name of the qualified small business.
68.3 	(b) The following data, including data classified as nonpublic or private, must be 
68.4 	provided to the consultant for use in conducting the program evaluation under subdivision 
68.5 	10:
68.6 	(1) the commissioner of employment and economic development shall provide data 
68.7 	contained in an application for certification received from a qualified small business, 
68.8 	qualified investor, or qualified fund, and any annual reporting information received on a 
68.9 	qualified small business, qualified investor, or qualified fund; and
68.10 	(2) the commissioner of revenue shall provide data contained in any applicable tax 
68.11 	returns of a qualified small business, qualified investor, or qualified fund.

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

68.13 	Sec. 4. Minnesota Statutes 2012, section 289A.02, subdivision 7, is amended to read:
68.14 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
68.15 	Revenue Code" means the Internal Revenue Code of 1986, as amended through April 
68.16 	14, 2011 January 3, 2013.

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

68.18 	Sec. 5. Minnesota Statutes 2012, section 289A.08, subdivision 1, is amended to read:
68.19 		Subdivision 1.Generally; individuals. (a) A taxpayer must file a return for each 
68.20 	taxable year the taxpayer is required to file a return under section 6012 of the Internal 
68.21 	Revenue Code, except that:
68.22 	(1) an individual who is not a Minnesota resident for any part of the year is not 
68.23 	required to file a Minnesota income tax return if the individual's gross income derived 
68.24 	from Minnesota sources as determined under sections 290.081, paragraph (a), and 290.17, 
68.25 	is less than the filing requirements for a single individual who is a full year resident of 
68.26 	Minnesota; and
68.27 	(2) an individual who is a Minnesota resident is not required to file a Minnesota 
68.28 	income tax return if the individual's gross income derived from Minnesota sources as 
68.29 	determined under section 290.17, less the subtraction allowed under section 290.01, 
68.30 	subdivision 19b, clauses (11) and (14) (9) and (12), is less than the filing requirements for 
68.31 	a single individual who is a full-year resident of Minnesota.
68.32 	(b) The decedent's final income tax return, and other income tax returns for prior 
68.33 	years where the decedent had gross income in excess of the minimum amount at which 
69.1 	an individual is required to file and did not file, must be filed by the decedent's personal 
69.2 	representative, if any. If there is no personal representative, the return or returns must 
69.3 	be filed by the transferees, as defined in section 270C.58, subdivision 3, who receive 
69.4 	property of the decedent.
69.5 	(c) The term "gross income," as it is used in this section, has the same meaning 
69.6 	given it in section 290.01, subdivision 20.

69.7 	Sec. 6. Minnesota Statutes 2012, section 289A.08, subdivision 3, is amended to read:
69.8 		Subd. 3.Corporations. (a) A corporation that is subject to the state's jurisdiction to 
69.9 	tax under section 290.014, subdivision 5, must file a return, except that a foreign operating 
69.10 	corporation as defined in section 290.01, subdivision 6b, is not required to file a return.
69.11 	(b) Members of a unitary business that are required to file a combined report on one 
69.12 	return must designate a member of the unitary business to be responsible for tax matters, 
69.13 	including the filing of returns, the payment of taxes, additions to tax, penalties, interest, 
69.14 	or any other payment, and for the receipt of refunds of taxes or interest paid in excess of 
69.15 	taxes lawfully due. The designated member must be a member of the unitary business that 
69.16 	is filing the single combined report and either:
69.17 	(1) a corporation that is subject to the taxes imposed by chapter 290; or
69.18 	(2) a corporation that is not subject to the taxes imposed by chapter 290:
69.19 	(i) Such corporation consents by filing the return as a designated member under this 
69.20 	clause to remit taxes, penalties, interest, or additions to tax due from the members of the 
69.21 	unitary business subject to tax, and receive refunds or other payments on behalf of other 
69.22 	members of the unitary business. The member designated under this clause is a "taxpayer" 
69.23 	for the purposes of this chapter and chapter 270C, and is liable for any liability imposed 
69.24 	on the unitary business under this chapter and chapter 290.
69.25 	(ii) If the state does not otherwise have the jurisdiction to tax the member designated 
69.26 	under this clause, consenting to be the designated member does not create the jurisdiction 
69.27 	to impose tax on the designated member, other than as described in item (i).
69.28 	(iii) The member designated under this clause must apply for a business tax account 
69.29 	identification number.
69.30 	(c) The commissioner shall adopt rules for the filing of one return on behalf of the 
69.31 	members of an affiliated group of corporations that are required to file a combined report. 
69.32 	All members of an affiliated group that are required to file a combined report must file one 
69.33 	return on behalf of the members of the group under rules adopted by the commissioner.
70.1 	(d) If a corporation claims on a return that it has paid tax in excess of the amount of 
70.2 	taxes lawfully due, that corporation must include on that return information necessary for 
70.3 	payment of the tax in excess of the amount lawfully due by electronic means.

70.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
70.5 	December 31, 2012.

70.6 	Sec. 7. Minnesota Statutes 2012, section 289A.08, subdivision 7, is amended to read:
70.7 		Subd. 7.Composite income tax returns for nonresident partners, shareholders, 
70.8 	and beneficiaries. (a) The commissioner may allow a partnership with nonresident 
70.9 	partners to file a composite return and to pay the tax on behalf of nonresident partners who 
70.10 	have no other Minnesota source income. This composite return must include the names, 
70.11 	addresses, Social Security numbers, income allocation, and tax liability for the nonresident 
70.12 	partners electing to be covered by the composite return.
70.13 	(b) The computation of a partner's tax liability must be determined by multiplying 
70.14 	the income allocated to that partner by the highest rate used to determine the tax liability 
70.15 	for individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard 
70.16 	deductions, or personal exemptions are not allowed.
70.17 	(c) The partnership must submit a request to use this composite return filing method 
70.18 	for nonresident partners. The requesting partnership must file a composite return in the 
70.19 	form prescribed by the commissioner of revenue. The filing of a composite return is 
70.20 	considered a request to use the composite return filing method.
70.21 	(d) The electing partner must not have any Minnesota source income other than the 
70.22 	income from the partnership and other electing partnerships. If it is determined that the 
70.23 	electing partner has other Minnesota source income, the inclusion of the income and tax 
70.24 	liability for that partner under this provision will not constitute a return to satisfy the 
70.25 	requirements of subdivision 1. The tax paid for the individual as part of the composite return 
70.26 	is allowed as a payment of the tax by the individual on the date on which the composite 
70.27 	return payment was made. If the electing nonresident partner has no other Minnesota 
70.28 	source income, filing of the composite return is a return for purposes of subdivision 1.
70.29 	(e) This subdivision does not negate the requirement that an individual pay estimated 
70.30 	tax if the individual's liability would exceed the requirements set forth in section 289A.25. 
70.31 	The individual's liability to pay estimated tax is, however, satisfied when the partnership 
70.32 	pays composite estimated tax in the manner prescribed in section 289A.25.
70.33 	(f) If an electing partner's share of the partnership's gross income from Minnesota 
70.34 	sources is less than the filing requirements for a nonresident under this subdivision, the tax 
71.1 	liability is zero. However, a statement showing the partner's share of gross income must 
71.2 	be included as part of the composite return.
71.3 	(g) The election provided in this subdivision is only available to a partner who has 
71.4 	no other Minnesota source income and who is either (1) a full-year nonresident individual 
71.5 	or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of 
71.6 	the Internal Revenue Code.
71.7 	(h) A corporation defined in section 290.9725 and its nonresident shareholders may 
71.8 	make an election under this paragraph. The provisions covering the partnership apply to 
71.9 	the corporation and the provisions applying to the partner apply to the shareholder.
71.10 	(i) Estates and trusts distributing current income only and the nonresident individual 
71.11 	beneficiaries of the estates or trusts may make an election under this paragraph. The 
71.12 	provisions covering the partnership apply to the estate or trust. The provisions applying to 
71.13 	the partner apply to the beneficiary.
71.14 	(j) For the purposes of this subdivision, "income" means the partner's share of 
71.15 	federal adjusted gross income from the partnership modified by the additions provided in 
71.16 	section 290.01, subdivision 19a, clauses (6) to (10) (9), and the subtractions provided in: 
71.17 	(i) section 290.01, subdivision 19b, clause (8), to the extent the amount is assignable or 
71.18 	allocable to Minnesota under section 290.17; and (ii) section 290.01, subdivision 19b, 
71.19 	clause (13). The subtraction allowed under section 290.01, subdivision 19b, clause (8), is 
71.20 	only allowed on the composite tax computation to the extent the electing partner would 
71.21 	have been allowed the subtraction.

71.22 	Sec. 8. Minnesota Statutes 2012, section 290.01, subdivision 5, is amended to read:
71.23 		Subd. 5.Domestic corporation. The term "domestic" when applied to a corporation 
71.24 	means a corporation:
71.25 	(1) created or organized in the United States, or under the laws of the United States or 
71.26 	of any state, the District of Columbia, or any political subdivision of any of the foregoing 
71.27 	but not including the Commonwealth of Puerto Rico, or any possession of the United States;
71.28 	(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue 
71.29 	Code; or
71.30 	(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.
71.31 	(2) which, regardless of the place where the corporation was incorporated: 
71.32 	(i) has the average of its property, payroll, and sales factors, as defined under section 
71.33 	290.191, within the territorial limits of the 50 states of the United States and the District of 
71.34 	Columbia of 20 percent or more; or
71.35 	(ii) derives less than 80 percent of its income from foreign sources;
72.1 	(3) which is:
72.2 	(i) a foreign corporation, foreign partnership, or other foreign entity that has its 
72.3 	income included in the federal taxable income, as defined in section 63 of the Internal 
72.4 	Revenue Code, of an entity as defined in clause (1) or an individual who is a United States 
72.5 	resident, as defined in section 865(g) of the Internal Revenue Code; and
72.6 	(ii) not treated as a corporation for federal income tax purposes;
72.7 	(4) which is incorporated in a tax haven; or
72.8 	(5) which is engaged in activity in a tax haven sufficient for the tax haven to impose a 
72.9 	net income tax under United States constitutional standards and section 290.015, and which 
72.10 	reports that 20 percent or more of its income is attributable to business in the tax haven.

72.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
72.12 	December 31, 2012.

72.13 	Sec. 9. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision 
72.14 	to read:
72.15 		Subd. 5c.Tax haven. (a) "Tax haven" means the following foreign jurisdictions, 
72.16 	unless the listing of the jurisdiction does not apply under paragraph (b):
72.17 	(1) Anguilla;
72.18 	(2) Antigua and Barbuda;
72.19 	(3) Aruba;
72.20 	(4) Bahamas;
72.21 	(5) Bahrain;
72.22 	(6) Belize;
72.23 	(7) Bermuda;
72.24 	(8) British Virgin Islands;
72.25 	(9) Cayman Islands;
72.26 	(10) Cook Islands;
72.27 	(11) Costa Rica;
72.28 	(12) Cyprus;
72.29 	(13) Dominica;
72.30 	(14) Gibraltar;
72.31 	(15) Grenada;
72.32 	(16) Guernsey-Sark-Alderney;
72.33 	(17) Isle of Man;
72.34 	(18) Jersey;
72.35 	(19) Jordan;
73.1 	(20) Lebanon;
73.2 	(21) Liberia;
73.3 	(22) Liechtenstein;
73.4 	(23) Malta;
73.5 	(24) Marshall Islands;
73.6 	(25) Monaco;
73.7 	(26) Nauru;
73.8 	(27) Netherlands Antilles;
73.9 	(28) Niue;
73.10 	(29) Panama;
73.11 	(30) St. Kitts and Nevis;
73.12 	(31) St. Lucia;
73.13 	(32) St. Vincent and Grenadines;
73.14 	(33) Samoa;
73.15 	(34) Turks and Caicos; and
73.16 	(35) Vanuatu.
73.17 	(b) A foreign jurisdiction's listing under paragraph (a) does not apply to the first 
73.18 	taxable year after:
73.19 	(1) the United States enters into a tax treaty or other agreement with the foreign 
73.20 	jurisdiction that provides for prompt, obligatory, and automatic exchange of information 
73.21 	with the United States government relevant to enforcing the provisions of federal tax laws 
73.22 	applicable to both individuals and all corporations and other entities and the treaty or other 
73.23 	agreement was in effect for the taxable year; and
73.24 	(2) the foreign jurisdiction imposes a tax rate of at least ten percent on a tax base 
73.25 	equal to at least 90 percent of the tax base that applies to corporations under the Internal 
73.26 	Revenue Code.

73.27 	EFFECTIVE DATE. This section is effective for returns filed for taxable years 
73.28 	beginning after December 31, 2012.

73.29 	Sec. 10. Minnesota Statutes 2012, section 290.01, subdivision 19, as amended by Laws 
73.30 	2013, chapter 3, section 3, is amended to read:
73.31 		Subd. 19.Net income. The term "net income" means the federal taxable income, 
73.32 	as defined in section 63 of the Internal Revenue Code of 1986, as amended through the 
73.33 	date named in this subdivision, incorporating the federal effective dates of changes to the 
73.34 	Internal Revenue Code and any elections made by the taxpayer in accordance with the 
74.1 	Internal Revenue Code in determining federal taxable income for federal income tax 
74.2 	purposes, and with the modifications provided in subdivisions 19a to 19f.
74.3 	In the case of a regulated investment company or a fund thereof, as defined in section 
74.4 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
74.5 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
74.6 	except that:
74.7 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
74.8 	Revenue Code does not apply;
74.9 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal 
74.10 	Revenue Code must be applied by allowing a deduction for capital gain dividends and 
74.11 	exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal 
74.12 	Revenue Code; and
74.13 	(3) the deduction for dividends paid must also be applied in the amount of any 
74.14 	undistributed capital gains which the regulated investment company elects to have treated 
74.15 	as provided in section 852(b)(3)(D) of the Internal Revenue Code.
74.16 	The net income of a real estate investment trust as defined and limited by section 
74.17 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
74.18 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
74.19 	The net income of a designated settlement fund as defined in section 468B(d) of 
74.20 	the Internal Revenue Code means the gross income as defined in section 468B(b) of the 
74.21 	Internal Revenue Code.
74.22 	The Internal Revenue Code of 1986, as amended through April 14, 2011 January 3, 
74.23 	2013, shall be in effect for taxable years beginning after December 31, 1996, and before 
74.24 	January 1, 2012, and for taxable years beginning after December 31, 2012. The Internal 
74.25 	Revenue Code of 1986, as amended through January 3, 2013, is in effect for taxable years 
74.26 	beginning after December 31, 2011, and before January 1, 2013.
74.27 	Except as otherwise provided, references to the Internal Revenue Code in 
74.28 	subdivisions 19 to 19f mean the code in effect for purposes of determining net income for 
74.29 	the applicable year.

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

74.33 	Sec. 11. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
74.34 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
74.35 	trusts, there shall be added to federal taxable income:
75.1 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
75.2 	or governmental subdivision, municipality, or governmental agency or instrumentality 
75.3 	of any state other than Minnesota exempt from federal income taxes under the Internal 
75.4 	Revenue Code or any other federal statute; and
75.5 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
75.6 	Code, except:
75.7 	(A) the portion of the exempt-interest dividends exempt from state taxation under 
75.8 	the laws of the United States; and
75.9 	(B) the portion of the exempt-interest dividends derived from interest income 
75.10 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
75.11 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
75.12 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
75.13 	95 percent or more of the exempt-interest dividends, including any dividends exempt 
75.14 	under subitem (A), that are paid by the regulated investment company as defined in section 
75.15 	851(a) of the Internal Revenue Code, or the fund of the regulated investment company as 
75.16 	defined in section 851(g) of the Internal Revenue Code, making the payment; and
75.17 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
75.18 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
75.19 	interest income on obligations of the state in which the tribe is located;
75.20 	(2) to the extent allowed as a deduction under section 63(d) of the Internal Revenue 
75.21 	Code the amount of:
75.22 	(i) income, sales and use, motor vehicle sales, or excise taxes paid or accrued within 
75.23 	the taxable year under this chapter and the amount of;
75.24 	(ii) taxes based on net income paid, sales and use, motor vehicle sales, or excise 
75.25 	taxes paid to any other state or to any province or territory of Canada, to the extent allowed 
75.26 	as a deduction under section 63(d) of the Internal Revenue Code,;
75.27 	(iii) charitable contributions, as defined in section 170(c) of the Internal Revenue 
75.28 	Code, to the extent allowed as a deduction under section 170(a) of the Internal Revenue 
75.29 	Code.
75.30 	but The addition sum of the additions under items (i) to (iii) may not be more 
75.31 	than the amount by which the itemized deductions as allowed under section 63(d) of 
75.32 	the Internal Revenue Code state itemized deduction exceeds the amount of the standard 
75.33 	deduction as defined in section 63(c) of the Internal Revenue Code, disregarding the 
75.34 	amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue 
75.35 	Code, minus any addition that would have been required under clause (21) if the taxpayer 
75.36 	had claimed the standard deduction. For the purpose of this paragraph, the disallowance of 
76.1 	itemized deductions under section 68 of the Internal Revenue Code of 1986, income, sales 
76.2 	and use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed. 
76.3 	For purposes of this clause, income, sales and use, and charitable contributions are the last 
76.4 	itemized deductions disallowed under clause (13);
76.5 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
76.6 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
76.7 	(4) the amount of income taxes paid or accrued within the taxable year under this 
76.8 	chapter and taxes based on net income paid to any other state or any province or territory 
76.9 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
76.10 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
76.11 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
76.12 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
76.13 	other than expenses or interest used in computing net interest income for the subtraction 
76.14 	allowed under subdivision 19b, clause (1);
76.15 	(6) the amount of a partner's pro rata share of net income which does not flow 
76.16 	through to the partner because the partnership elected to pay the tax on the income under 
76.17 	section 6242(a)(2) of the Internal Revenue Code;
76.18 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
76.19 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
76.20 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
76.21 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
76.22 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
76.23 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
76.24 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
76.25 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
76.26 	under section 168(k) is allowed;
76.27 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
76.28 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
76.29 	Revenue Code of 1986, as amended through December 31, 2003;
76.30 	(9) to the extent deducted in computing federal taxable income, the amount of the 
76.31 	deduction allowable under section 199 of the Internal Revenue Code;
76.32 	(10) for taxable years beginning before January 1, 2013, the exclusion allowed under 
76.33 	section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
76.34 	(11)(10) the amount of expenses disallowed under section 290.10, subdivision 2;
77.1 	(12) for taxable years beginning before January 1, 2010, the amount deducted for 
77.2 	qualified tuition and related expenses under section 222 of the Internal Revenue Code, to 
77.3 	the extent deducted from gross income;
77.4 	(13) for taxable years beginning before January 1, 2010, the amount deducted for 
77.5 	certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) 
77.6 	of the Internal Revenue Code, to the extent deducted from gross income;
77.7 	(14) the additional standard deduction for property taxes payable that is allowable 
77.8 	under section 63(c)(1)(C) of the Internal Revenue Code;
77.9 	(15) the additional standard deduction for qualified motor vehicle sales taxes 
77.10 	allowable under section 63(c)(1)(E) of the Internal Revenue Code;
77.11 	(16) (11) discharge of indebtedness income resulting from reacquisition of business 
77.12 	indebtedness and deferred under section 108(i) of the Internal Revenue Code;
77.13 	(17) the amount of unemployment compensation exempt from tax under section 
77.14 	85(c) of the Internal Revenue Code;
77.15 	(18) (12) changes to federal taxable income attributable to a net operating loss that 
77.16 	the taxpayer elected to carry back for more than two years for federal purposes but for 
77.17 	which the losses can be carried back for only two years under section 290.095, subdivision 
77.18 	11, paragraph (c);
77.19 	(19) (13) to the extent included in the computation of federal taxable income in 
77.20 	taxable years beginning after December 31, 2010, the amount of disallowed itemized 
77.21 	deductions, but the amount of disallowed itemized deductions plus the addition required 
77.22 	under clause (2) may not be more than the amount by which the itemized deductions as 
77.23 	allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the 
77.24 	standard deduction as defined in section 63(c) of the Internal Revenue Code, disregarding 
77.25 	the amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue 
77.26 	Code, and reduced by any addition that would have been required under clause (21) if the 
77.27 	taxpayer had claimed the standard deduction:
77.28 	(i) the amount of disallowed itemized deductions is equal to the lesser of:
77.29 	(A) three percent of the excess of the taxpayer's federal adjusted gross income 
77.30 	over the applicable amount; or
77.31 	(B) 80 percent of the amount of the itemized deductions otherwise allowable to the 
77.32 	taxpayer under the Internal Revenue Code for the taxable year;
77.33 	(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a 
77.34 	married individual filing a separate return. Each dollar amount shall be increased by 
77.35 	an amount equal to:
77.36 	(A) such dollar amount, multiplied by
78.1 	(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal 
78.2 	Revenue Code for the calendar year in which the taxable year begins, by substituting 
78.3 	"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
78.4 	(iii) the term "itemized deductions" does not include:
78.5 	(A) the deduction for medical expenses under section 213 of the Internal Revenue 
78.6 	Code;
78.7 	(B) any deduction for investment interest as defined in section 163(d) of the Internal 
78.8 	Revenue Code; and
78.9 	(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or 
78.10 	theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue 
78.11 	Code or for losses described in section 165(d) of the Internal Revenue Code; and
78.12 	(20) (14) to the extent included in federal taxable income in taxable years beginning 
78.13 	after December 31, 2010, the amount of disallowed personal exemptions for taxpayers 
78.14 	with federal adjusted gross income over the threshold amount:
78.15 	(i) the disallowed personal exemption amount is equal to the dollar amount of the 
78.16 	personal exemptions claimed by the taxpayer in the computation of federal taxable income 
78.17 	multiplied by the applicable percentage;
78.18 	(ii) "applicable percentage" means two percentage points for each $2,500 (or 
78.19 	fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable 
78.20 	year exceeds the threshold amount. In the case of a married individual filing a separate 
78.21 	return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In 
78.22 	no event shall the applicable percentage exceed 100 percent;
78.23 	(iii) the term "threshold amount" means:
78.24 	(A) $150,000 in the case of a joint return or a surviving spouse;
78.25 	(B) $125,000 in the case of a head of a household;
78.26 	(C) $100,000 in the case of an individual who is not married and who is not a 
78.27 	surviving spouse or head of a household; and
78.28 	(D) $75,000 in the case of a married individual filing a separate return; and
78.29 	(iv) the thresholds shall be increased by an amount equal to:
78.30 	(A) such dollar amount, multiplied by
78.31 	(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal 
78.32 	Revenue Code for the calendar year in which the taxable year begins, by substituting 
78.33 	"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and.
78.34 	(21) to the extent deducted in the computation of federal taxable income, for taxable 
78.35 	years beginning after December 31, 2010, and before January 1, 2013, the difference 
78.36 	between the standard deduction allowed under section 63(c) of the Internal Revenue Code 
79.1 	and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code 
79.2 	as amended through December 1, 2010.

79.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
79.4 	December 31, 2012.

79.5 	Sec. 12. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
79.6 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
79.7 	and trusts, there shall be subtracted from federal taxable income:
79.8 	(1) net interest income on obligations of any authority, commission, or 
79.9 	instrumentality of the United States to the extent includable in taxable income for federal 
79.10 	income tax purposes but exempt from state income tax under the laws of the United States;
79.11 	(2) if included in federal taxable income, the amount of any overpayment of income 
79.12 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
79.13 	is received as a refund or as a credit to another taxable year's income tax liability;
79.14 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
79.15 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
79.16 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
79.17 	transportation of each qualifying child in attending an elementary or secondary school 
79.18 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
79.19 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
79.20 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
79.21 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
79.22 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
79.23 	"textbooks" includes books and other instructional materials and equipment purchased 
79.24 	or leased for use in elementary and secondary schools in teaching only those subjects 
79.25 	legally and commonly taught in public elementary and secondary schools in this state. 
79.26 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
79.27 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
79.28 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
79.29 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
79.30 	or materials for, or transportation to, extracurricular activities including sporting events, 
79.31 	musical or dramatic events, speech activities, driver's education, or similar programs. No 
79.32 	deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 
79.33 	the qualifying child's vehicle to provide such transportation for a qualifying child. For 
79.34 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
79.35 	given in section 32(c)(3) of the Internal Revenue Code;
80.1 	(4) income as provided under section 290.0802;
80.2 	(5) to the extent included in federal adjusted gross income, income realized on 
80.3 	disposition of property exempt from tax under section 290.491;
80.4 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
80.5 	of the Internal Revenue Code in determining federal taxable income by an individual 
80.6 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
80.7 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
80.8 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, 
80.9 	under the provisions of Public Law 109-1 and Public Law 111-126;
80.10 	(7) for individuals who are allowed a federal foreign tax credit for taxes that do not 
80.11 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
80.12 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
80.13 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
80.14 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
80.15 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
80.16 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
80.17 	the extent they exceed the federal foreign tax credit;
80.18 	(8) (6) in each of the five tax years immediately following the tax year in which an 
80.19 	addition is required under subdivision 19a, clause (7), or 19c, clause (15) (12), in the case 
80.20 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
80.21 	delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount 
80.22 	of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c, 
80.23 	clause (15) (12), in the case of a shareholder of an S corporation, minus the positive value 
80.24 	of any net operating loss under section 172 of the Internal Revenue Code generated for the 
80.25 	tax year of the addition. The resulting delayed depreciation cannot be less than zero;
80.26 	(9) (7) job opportunity building zone income as provided under section 469.316;
80.27 	(10) (8) to the extent included in federal taxable income, the amount of compensation 
80.28 	paid to members of the Minnesota National Guard or other reserve components of the 
80.29 	United States military for active service, excluding compensation for services performed 
80.30 	under the Active Guard Reserve (AGR) program. For purposes of this clause, "active 
80.31 	service" means (i) state active service as defined in section 190.05, subdivision 5a, clause 
80.32 	(1); or (ii) federally funded state active service as defined in section 190.05, subdivision 
80.33 	5b, but "active service" excludes service performed in accordance with section 190.08, 
80.34 	subdivision 3;
80.35 	(11) (9) to the extent included in federal taxable income, the amount of compensation 
80.36 	paid to Minnesota residents who are members of the armed forces of the United States 
81.1 	or United Nations for active duty performed under United States Code, title 10; or the 
81.2 	authority of the United Nations;
81.3 	(12)(10) an amount, not to exceed $10,000, equal to qualified expenses related to a 
81.4 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
81.5 	to another person for human organ transplantation. For purposes of this clause, "organ" 
81.6 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
81.7 	"human organ transplantation" means the medical procedure by which transfer of a human 
81.8 	organ is made from the body of one person to the body of another person; "qualified 
81.9 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
81.10 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
81.11 	may be subtracted under this clause only once; and "qualified donor" means the individual 
81.12 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
81.13 	individual may claim the subtraction in this clause for each instance of organ donation for 
81.14 	transplantation during the taxable year in which the qualified expenses occur;
81.15 	(13) (11) in each of the five tax years immediately following the tax year in which an 
81.16 	addition is required under subdivision 19a, clause (8), or 19c, clause (16) (13), in the case 
81.17 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of 
81.18 	the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16)
81.19 	 (13), in the case of a shareholder of a corporation that is an S corporation, minus the 
81.20 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
81.21 	generated for the tax year of the addition. If the net operating loss exceeds the addition for 
81.22 	the tax year, a subtraction is not allowed under this clause;
81.23 	(14) (12) to the extent included in the federal taxable income of a nonresident of 
81.24 	Minnesota, compensation paid to a service member as defined in United States Code, title 
81.25 	10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief 
81.26 	Act, Public Law 108-189, section 101(2);
81.27 	(15) (13) to the extent included in federal taxable income, the amount of national 
81.28 	service educational awards received from the National Service Trust under United States 
81.29 	Code, title 42, sections 12601 to 12604, for service in an approved Americorps National 
81.30 	Service program;
81.31 	(16) (14) to the extent included in federal taxable income, discharge of indebtedness 
81.32 	income resulting from reacquisition of business indebtedness included in federal taxable 
81.33 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
81.34 	to the extent that the income was included in net income in a prior year as a result of the 
81.35 	addition under section 290.01, subdivision 19a, clause (16) (11); and
82.1 	(17) (15) the amount of the net operating loss allowed under section 290.095, 
82.2 	subdivision 11, paragraph (c).;
82.3 	(16) the amount of the limitation on itemized deductions under section 68(b) of the 
82.4 	Internal Revenue Code;
82.5 	(17) the amount of the phase-out of personal exemptions under section 151(d) of 
82.6 	the Internal Revenue Code; and
82.7 	(18) in the year that the expenditures are made for railroad track maintenance, as 
82.8 	defined in section 45G(d) of the Internal Revenue Code, in the case of a shareholder of a 
82.9 	corporation that is an S corporation or a partner in a partnership, an amount equal to the 
82.10 	credit awarded under section 45G(a) of the Internal Revenue Code. The subtraction is 
82.11 	reduced to an amount equal to the percentage of the shareholder's or partner's share of the 
82.12 	net income of the S corporation or partnership.

82.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
82.14 	December 31, 2012.

82.15 	Sec. 13. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
82.16 		Subd. 19c.Corporations; additions to federal taxable income. For corporations, 
82.17 	there shall be added to federal taxable income:
82.18 	(1) the amount of any deduction taken for federal income tax purposes for income, 
82.19 	excise, or franchise taxes based on net income or related minimum taxes, including but not 
82.20 	limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 
82.21 	another state, a political subdivision of another state, the District of Columbia, or any 
82.22 	foreign country or possession of the United States;
82.23 	(2) interest not subject to federal tax upon obligations of: the United States, its 
82.24 	possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 
82.25 	state, any of its political or governmental subdivisions, any of its municipalities, or any 
82.26 	of its governmental agencies or instrumentalities; the District of Columbia; or Indian 
82.27 	tribal governments;
82.28 	(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 
82.29 	Revenue Code;
82.30 	(4) the amount of any net operating loss deduction taken for federal income tax 
82.31 	purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 
82.32 	deduction under section 810 of the Internal Revenue Code;
82.33 	(5) the amount of any special deductions taken for federal income tax purposes 
82.34 	under sections 241 to 247 and 965 of the Internal Revenue Code;
83.1 	(6) losses from the business of mining, as defined in section 290.05, subdivision 1, 
83.2 	clause (a), that are not subject to Minnesota income tax;
83.3 	(7) the amount of any capital losses deducted for federal income tax purposes under 
83.4 	sections 1211 and 1212 of the Internal Revenue Code;
83.5 	(8) the exempt foreign trade income of a foreign sales corporation under sections 
83.6 	921(a) and 291 of the Internal Revenue Code;
83.7 	(9) (8) the amount of percentage depletion deducted under sections 611 through 
83.8 	614 and 291 of the Internal Revenue Code;
83.9 	(10) (9) for certified pollution control facilities placed in service in a taxable year 
83.10 	beginning before December 31, 1986, and for which amortization deductions were elected 
83.11 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
83.12 	31, 1985, the amount of the amortization deduction allowed in computing federal taxable 
83.13 	income for those facilities;
83.14 	(11) the amount of any deemed dividend from a foreign operating corporation 
83.15 	determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 
83.16 	shall be reduced by the amount of the addition to income required by clauses (20), (21), 
83.17 	(22), and (23);
83.18 	(12) (10) the amount of a partner's pro rata share of net income which does not flow 
83.19 	through to the partner because the partnership elected to pay the tax on the income under 
83.20 	section 6242(a)(2) of the Internal Revenue Code;
83.21 	(13) the amount of net income excluded under section 114 of the Internal Revenue 
83.22 	Code;
83.23 	(14) (11) any increase in subpart F income, as defined in section 952(a) of the 
83.24 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
83.25 	regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
83.26 	(15) (12) 80 percent of the depreciation deduction allowed under section 
83.27 	168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if 
83.28 	the taxpayer has an activity that in the taxable year generates a deduction for depreciation 
83.29 	under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable 
83.30 	year that the taxpayer is not allowed to claim for the taxable year, "the depreciation 
83.31 	allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess 
83.32 	of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) 
83.33 	over the amount of the loss from the activity that is not allowed in the taxable year. In 
83.34 	succeeding taxable years when the losses not allowed in the taxable year are allowed, the 
83.35 	depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
84.1 	(16) (13) 80 percent of the amount by which the deduction allowed by section 179 of 
84.2 	the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
84.3 	Revenue Code of 1986, as amended through December 31, 2003;
84.4 	(17) (14) to the extent deducted in computing federal taxable income, the amount of 
84.5 	the deduction allowable under section 199 of the Internal Revenue Code;
84.6 	(18) for taxable years beginning before January 1, 2013, the exclusion allowed under 
84.7 	section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
84.8 	(19) (15) the amount of expenses disallowed under section 290.10, subdivision 2; and
84.9 	(20) an amount equal to the interest and intangible expenses, losses, and costs paid, 
84.10 	accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 
84.11 	of a corporation that is a member of the taxpayer's unitary business group that qualifies 
84.12 	as a foreign operating corporation. For purposes of this clause, intangible expenses and 
84.13 	costs include:
84.14 	(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 
84.15 	use, maintenance or management, ownership, sale, exchange, or any other disposition of 
84.16 	intangible property;
84.17 	(ii) losses incurred, directly or indirectly, from factoring transactions or discounting 
84.18 	transactions;
84.19 	(iii) royalty, patent, technical, and copyright fees;
84.20 	(iv) licensing fees; and
84.21 	(v) other similar expenses and costs.
84.22 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
84.23 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
84.24 	secrets, and similar types of intangible assets.
84.25 	This clause does not apply to any item of interest or intangible expenses or costs paid, 
84.26 	accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 
84.27 	to such item of income to the extent that the income to the foreign operating corporation 
84.28 	is income from sources without the United States as defined in subtitle A, chapter 1, 
84.29 	subchapter N, part 1, of the Internal Revenue Code;
84.30 	(21) except as already included in the taxpayer's taxable income pursuant to clause 
84.31 	(20), any interest income and income generated from intangible property received or 
84.32 	accrued by a foreign operating corporation that is a member of the taxpayer's unitary 
84.33 	group. For purposes of this clause, income generated from intangible property includes:
84.34 	(i) income related to the direct or indirect acquisition, use, maintenance or 
84.35 	management, ownership, sale, exchange, or any other disposition of intangible property;
84.36 	(ii) income from factoring transactions or discounting transactions;
85.1 	(iii) royalty, patent, technical, and copyright fees;
85.2 	(iv) licensing fees; and
85.3 	(v) other similar income.
85.4 	For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 
85.5 	applications, trade names, trademarks, service marks, copyrights, mask works, trade 
85.6 	secrets, and similar types of intangible assets.
85.7 	This clause does not apply to any item of interest or intangible income received or accrued 
85.8 	by a foreign operating corporation with respect to such item of income to the extent that 
85.9 	the income is income from sources without the United States as defined in subtitle A, 
85.10 	chapter 1, subchapter N, part 1, of the Internal Revenue Code;
85.11 	(22) the dividends attributable to the income of a foreign operating corporation that 
85.12 	is a member of the taxpayer's unitary group in an amount that is equal to the dividends 
85.13 	paid deduction of a real estate investment trust under section 561(a) of the Internal 
85.14 	Revenue Code for amounts paid or accrued by the real estate investment trust to the 
85.15 	foreign operating corporation;
85.16 	(23) the income of a foreign operating corporation that is a member of the taxpayer's 
85.17 	unitary group in an amount that is equal to gains derived from the sale of real or personal 
85.18 	property located in the United States;
85.19 	(24) for taxable years beginning before January 1, 2010, the additional amount 
85.20 	allowed as a deduction for donation of computer technology and equipment under section 
85.21 	170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
85.22 	(25) (16) discharge of indebtedness income resulting from reacquisition of business 
85.23 	indebtedness and deferred under section 108(i) of the Internal Revenue Code.

85.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
85.25 	December 31, 2012.

85.26 	Sec. 14. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
85.27 		Subd. 19d.Corporations; modifications decreasing federal taxable income. For 
85.28 	corporations, there shall be subtracted from federal taxable income after the increases 
85.29 	provided in subdivision 19c:
85.30 	(1) the amount of foreign dividend gross-up added to gross income for federal 
85.31 	income tax purposes under section 78 of the Internal Revenue Code;
85.32 	(2) the amount of salary expense not allowed for federal income tax purposes due to 
85.33 	claiming the work opportunity credit under section 51 of the Internal Revenue Code;
86.1 	(3) any dividend (not including any distribution in liquidation) paid within the 
86.2 	taxable year by a national or state bank to the United States, or to any instrumentality of 
86.3 	the United States exempt from federal income taxes, on the preferred stock of the bank 
86.4 	owned by the United States or the instrumentality;
86.5 	(4) amounts disallowed for intangible drilling costs due to differences between 
86.6 	this chapter and the Internal Revenue Code in taxable years beginning before January 
86.7 	1, 1987, as follows:
86.8 	(i) to the extent the disallowed costs are represented by physical property, an amount 
86.9 	equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 
86.10 	subdivision 7, subject to the modifications contained in subdivision 19e; and
86.11 	(ii) to the extent the disallowed costs are not represented by physical property, an 
86.12 	amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 
86.13 	290.09, subdivision 8;
86.14 	(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 
86.15 	Internal Revenue Code, except that:
86.16 	(i) for capital losses incurred in taxable years beginning after December 31, 1986, 
86.17 	capital loss carrybacks shall not be allowed;
86.18 	(ii) for capital losses incurred in taxable years beginning after December 31, 1986, 
86.19 	a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 
86.20 	allowed;
86.21 	(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 
86.22 	capital loss carryback to each of the three taxable years preceding the loss year, subject to 
86.23 	the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
86.24 	(iv) for capital losses incurred in taxable years beginning before January 1, 1987, 
86.25 	a capital loss carryover to each of the five taxable years succeeding the loss year to the 
86.26 	extent such loss was not used in a prior taxable year and subject to the provisions of 
86.27 	Minnesota Statutes 1986, section 290.16, shall be allowed;
86.28 	(6) an amount for interest and expenses relating to income not taxable for federal 
86.29 	income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 
86.30 	expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 
86.31 	291 of the Internal Revenue Code in computing federal taxable income;
86.32 	(7) in the case of mines, oil and gas wells, other natural deposits, and timber for 
86.33 	which percentage depletion was disallowed pursuant to subdivision 19c, clause (9) (8), a 
86.34 	reasonable allowance for depletion based on actual cost. In the case of leases the deduction 
86.35 	must be apportioned between the lessor and lessee in accordance with rules prescribed 
86.36 	by the commissioner. In the case of property held in trust, the allowable deduction must 
87.1 	be apportioned between the income beneficiaries and the trustee in accordance with the 
87.2 	pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 
87.3 	of the trust's income allocable to each;
87.4 	(8) for certified pollution control facilities placed in service in a taxable year 
87.5 	beginning before December 31, 1986, and for which amortization deductions were elected 
87.6 	under section 169 of the Internal Revenue Code of 1954, as amended through December 
87.7 	31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 
87.8 	1986, section 290.09, subdivision 7;
87.9 	(9) amounts included in federal taxable income that are due to refunds of income, 
87.10 	excise, or franchise taxes based on net income or related minimum taxes paid by the 
87.11 	corporation to Minnesota, another state, a political subdivision of another state, the 
87.12 	District of Columbia, or a foreign country or possession of the United States to the extent 
87.13 	that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 
87.14 	clause (1), in a prior taxable year;
87.15 	(10) 80 50 percent of royalties, fees, or other like income accrued or received from a 
87.16 	foreign operating corporation or a foreign corporation which is part of the same unitary 
87.17 	business as the receiving corporation, unless the income resulting from such payments or 
87.18 	accruals is income from sources within the United States as defined in subtitle A, chapter 
87.19 	1, subchapter N, part 1, of the Internal Revenue Code;
87.20 	(11) income or gains from the business of mining as defined in section 290.05, 
87.21 	subdivision 1, clause (a), that are not subject to Minnesota franchise tax;
87.22 	(12) the amount of disability access expenditures in the taxable year which are not 
87.23 	allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
87.24 	(13) the amount of qualified research expenses not allowed for federal income tax 
87.25 	purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that 
87.26 	the amount exceeds the amount of the credit allowed under section 290.068;
87.27 	(14) the amount of salary expenses not allowed for federal income tax purposes due to 
87.28 	claiming the Indian employment credit under section 45A(a) of the Internal Revenue Code;
87.29 	(15) for a corporation whose foreign sales corporation, as defined in section 922 
87.30 	of the Internal Revenue Code, constituted a foreign operating corporation during any 
87.31 	taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 
87.32 	claiming the deduction under section 290.21, subdivision 4, for income received from 
87.33 	the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 
87.34 	income excluded under section 114 of the Internal Revenue Code, provided the income is 
87.35 	not income of a foreign operating company;
88.1 	(16) (15) any decrease in subpart F income, as defined in section 952(a) of the 
88.2 	Internal Revenue Code, for the taxable year when subpart F income is calculated without 
88.3 	regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
88.4 	(17) (16) in each of the five tax years immediately following the tax year in which an 
88.5 	addition is required under subdivision 19c, clause (15) (12), an amount equal to one-fifth 
88.6 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 
88.7 	amount of the addition made by the taxpayer under subdivision 19c, clause (15) (12). The 
88.8 	resulting delayed depreciation cannot be less than zero;
88.9 	(18) (17) in each of the five tax years immediately following the tax year in which an 
88.10 	addition is required under subdivision 19c, clause (16) (13), an amount equal to one-fifth 
88.11 	of the amount of the addition; and
88.12 	(19) (18) to the extent included in federal taxable income, discharge of indebtedness 
88.13 	income resulting from reacquisition of business indebtedness included in federal taxable 
88.14 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
88.15 	to the extent that the income was included in net income in a prior year as a result of the 
88.16 	addition under section 290.01, subdivision 19c, clause (25). (16); and
88.17 	(19) in the year that the expenditures are made for railroad track maintenance, as 
88.18 	defined in section 45G(d) of the Internal Revenue Code, an amount equal to the credit 
88.19 	awarded under section 45G(a) of the Internal Revenue Code.

88.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
88.21 	December 31, 2012.

88.22 	Sec. 15. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision 
88.23 	to read:
88.24 		Subd. 29a.State itemized deduction. The term "state itemized deduction" means 
88.25 	federal itemized deductions, as defined in section 63(d) of the Internal Revenue Code, 
88.26 	disregarding any limitation under section 68 of the Internal Revenue Code, and reduced 
88.27 	by the amount of the addition required under subdivision 19a, clause (13).

88.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
88.29 	December 31, 2012.

88.30 	Sec. 16. Minnesota Statutes 2012, section 290.01, subdivision 31, as amended by Laws 
88.31 	2013, chapter 3, section 4, is amended to read:
88.32 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, for 
88.33 	taxable years beginning before January 1, 2012, and after December 31, 2012, "Internal 
89.1 	Revenue Code" means the Internal Revenue Code of 1986, as amended through April 14, 
89.2 	2011; and for taxable years beginning after December 31, 2011, and before January 1, 
89.3 	2013, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended 
89.4 	through January 3, 2013. Internal Revenue Code also includes any uncodified provision in 
89.5 	federal law that relates to provisions of the Internal Revenue Code that are incorporated 
89.6 	into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1, 
89.7 	subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as 
89.8 	amended through March 18, 2010.

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

89.12 	Sec. 17. Minnesota Statutes 2012, section 290.01, is amended by adding a subdivision 
89.13 	to read:
89.14 		Subd. 33.Foreign source income; income from foreign sources. The terms 
89.15 	"foreign source income" and "income from foreign sources" means income from sources 
89.16 	without the United States as defined in subtitle A, chapter 1, subchapter N, part 1, of the 
89.17 	Internal Revenue Code.

89.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
89.19 	December 31, 2012.

89.20 	Sec. 18. Minnesota Statutes 2012, section 290.06, subdivision 2c, is amended to read:
89.21 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income 
89.22 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
89.23 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
89.24 	applying to their taxable net income the following schedule of rates:
89.25 	(1) On the first $25,680 $31,250, 5.35 percent;
89.26 	(2) On all over $25,680 $31,250, but not over $102,030 $130,000, 7.05 percent;
89.27 	(3) On all over $102,030 $130,000, but not over $400,000, 7.85 percent.;
89.28 	(4) On all over $400,000, 8.49 percent.
89.29 	Married individuals filing separate returns, estates, and trusts must compute their 
89.30 	income tax by applying the above rates to their taxable income, except that the income 
89.31 	brackets will be one-half of the above amounts.
89.32 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
89.33 	computed by applying to taxable net income the following schedule of rates:
90.1 	(1) On the first $17,570 $21,400, 5.35 percent;
90.2 	(2) On all over $17,570 $21,400, but not over $57,710 $73,500, 7.05 percent;
90.3 	(3) On all over $57,710 $73,500, but not over $226,200, 7.85 percent.;
90.4 	(4) On all over $226,200, 8.49 percent.
90.5 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
90.6 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
90.7 	computed by applying to taxable net income the following schedule of rates:
90.8 	(1) On the first $21,630 $26,300, 5.35 percent;
90.9 	(2) On all over $21,630 $26,300, but not over $86,910 $110,700, 7.05 percent;
90.10 	(3) On all over $86,910 $110,700, but not over $340,700, 7.85 percent.;
90.11 	(4) On all over $340,700, 8.49 percent.
90.12 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
90.13 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
90.14 	an amount determined by the commissioner must be computed in accordance with tables 
90.15 	prepared and issued by the commissioner of revenue based on income brackets of not 
90.16 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
90.17 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
90.18 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
90.19 	(e) An individual who is not a Minnesota resident for the entire year must compute 
90.20 	the individual's Minnesota income tax as provided in this subdivision. After the 
90.21 	application of the nonrefundable credits provided in this chapter, the tax liability must 
90.22 	then be multiplied by a fraction in which:
90.23 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
90.24 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
90.25 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), 
90.26 	(13), and (16) to (18) (5) to (9), (11), and (12), and reduced by the Minnesota assignable 
90.27 	portion of the subtraction for United States government interest under section 290.01, 
90.28 	subdivision 19b, clause (1), and the subtractions under section 290.01, subdivision 19b, 
90.29 	clauses (8), (9), (13), (14), (16), and (17) (6), (7), (11), (12), (14), and (15), after applying 
90.30 	the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
90.31 	(2) the denominator is the individual's federal adjusted gross income as defined in 
90.32 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
90.33 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to 
90.34 	(18) (5) to (9), (11), and (12), and reduced by the amounts specified in section 290.01, 
90.35 	subdivision 19b, clauses (1), (8), (9), (13), (14), (16), and (17) (6), (7), (11), (12), (14), 
90.36 	and (15).

91.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
91.2 	December 31, 2012.

91.3 	Sec. 19. Minnesota Statutes 2012, section 290.06, subdivision 2d, is amended to read:
91.4 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
91.5 	December 31, 2000 2013, the minimum and maximum dollar amounts for each rate 
91.6 	bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the 
91.7 	percentage determined under paragraph (b). For the purpose of making the adjustment as 
91.8 	provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the 
91.9 	rate brackets as they existed for taxable years beginning after December 31, 1999 2012, 
91.10 	and before January 1, 2001 2014. The rate applicable to any rate bracket must not be 
91.11 	changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes 
91.12 	in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10 
91.13 	amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
91.14 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
91.15 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 
91.16 	section 1(f)(3)(B) the word "1999" "2012" shall be substituted for the word "1992." For 
91.17 	2001 2014, the commissioner shall then determine the percent change from the 12 months 
91.18 	ending on August 31, 1999 2012, to the 12 months ending on August 31, 2000 2013, and 
91.19 	in each subsequent year, from the 12 months ending on August 31, 1999 2012, to the 12 
91.20 	months ending on August 31 of the year preceding the taxable year. The determination of 
91.21 	the commissioner pursuant to this subdivision shall not be considered a "rule" and shall 
91.22 	not be subject to the Administrative Procedure Act contained in chapter 14.
91.23 	No later than December 15 of each year, the commissioner shall announce the 
91.24 	specific percentage that will be used to adjust the tax rate brackets.

91.25 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
91.26 	December 31, 2012.

91.27 	Sec. 20. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision 
91.28 	to read:
91.29 		Subd. 36.Charitable contributions credit. (a) A taxpayer, other than a corporation, 
91.30 	estate, or trust, is allowed a credit against the tax imposed by this chapter equal to eight 
91.31 	percent of the amount by which eligible charitable contributions exceed the greater of:
91.32 	(1) two percent of the taxpayer's adjusted gross income for the taxable year; or
91.33 	(2) $400 ($800 for married filing jointly).
92.1 	(b) For purposes of this subdivision, "eligible charitable contributions" means 
92.2 	charitable contributions allowable as a deduction for the taxable year under section 170(a) 
92.3 	of the Internal Revenue Code, subject to the limitations of section 170(b) of the Internal 
92.4 	Revenue Code, and determined without regard to whether or not the taxpayer itemizes 
92.5 	deductions.
92.6 	(c) For purposes of this subdivision, "adjusted gross income" has the meaning given 
92.7 	in section 62 of the Internal Revenue Code.
92.8 	(d) For a nonresident or part-year resident, the credit must be allocated based on the 
92.9 	percentage calculated under subdivision 2c, paragraph (e).

92.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
92.11 	December 31, 2012.

92.12 	Sec. 21. Minnesota Statutes 2012, section 290.067, subdivision 1, is amended to read:
92.13 		Subdivision 1.Amount of credit. (a) A taxpayer may take as a credit against the 
92.14 	tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the 
92.15 	dependent care credit for which the taxpayer is eligible pursuant to the provisions of 
92.16 	section 21 of the Internal Revenue Code subject to the limitations provided in subdivision 
92.17 	2 except that in determining whether the child qualified as a dependent, income received 
92.18 	as a Minnesota family investment program grant or allowance to or on behalf of the child 
92.19 	must not be taken into account in determining whether the child received more than half 
92.20 	of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of 
92.21 	the Internal Revenue Code do not apply.
92.22 	(b) If a child who has not attained the age of six years at the close of the taxable year 
92.23 	is cared for at a licensed family day care home operated by the child's parent, the taxpayer 
92.24 	is deemed to have paid employment-related expenses. If the child is 16 months old or 
92.25 	younger at the close of the taxable year, the amount of expenses deemed to have been paid 
92.26 	equals the maximum limit for one qualified individual under section 21(c) and (d) of the 
92.27 	Internal Revenue Code. If the child is older than 16 months of age but has not attained the 
92.28 	age of six years at the close of the taxable year, the amount of expenses deemed to have 
92.29 	been paid equals the amount the licensee would charge for the care of a child of the same 
92.30 	age for the same number of hours of care.
92.31 	(c) If a married couple:
92.32 	(1) has a child who has not attained the age of one year at the close of the taxable year;
92.33 	(2) files a joint tax return for the taxable year; and
92.34 	(3) does not participate in a dependent care assistance program as defined in section 
92.35 	129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid 
93.1 	for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of 
93.2 	(i) the combined earned income of the couple or (ii) the amount of the maximum limit for 
93.3 	one qualified individual under section 21(c) and (d) of the Internal Revenue Code will 
93.4 	be deemed to be the employment related expense paid for that child. The earned income 
93.5 	limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed 
93.6 	amount. These deemed amounts apply regardless of whether any employment-related 
93.7 	expenses have been paid.
93.8 	(d) If the taxpayer is not required and does not file a federal individual income tax 
93.9 	return for the tax year, no credit is allowed for any amount paid to any person unless:
93.10 	(1) the name, address, and taxpayer identification number of the person are included 
93.11 	on the return claiming the credit; or
93.12 	(2) if the person is an organization described in section 501(c)(3) of the Internal 
93.13 	Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code, 
93.14 	the name and address of the person are included on the return claiming the credit.
93.15 	In the case of a failure to provide the information required under the preceding sentence, 
93.16 	the preceding sentence does not apply if it is shown that the taxpayer exercised due 
93.17 	diligence in attempting to provide the information required.
93.18 	In the case of a nonresident, part-year resident, or a person who has earned income 
93.19 	not subject to tax under this chapter including earned income excluded pursuant to section 
93.20 	290.01, subdivision 19b, clause (9) (7), the credit determined under section 21 of the 
93.21 	Internal Revenue Code must be allocated based on the ratio by which the earned income 
93.22 	of the claimant and the claimant's spouse from Minnesota sources bears to the total earned 
93.23 	income of the claimant and the claimant's spouse.
93.24 	For residents of Minnesota, the subtractions for military pay under section 290.01, 
93.25 	subdivision 19b, clauses (10) and (11) (8) and (9), are not considered "earned income not 
93.26 	subject to tax under this chapter."
93.27 	For residents of Minnesota, the exclusion of combat pay under section 112 of the 
93.28 	Internal Revenue Code is not considered "earned income not subject to tax under this 
93.29 	chapter."

93.30 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
93.31 	December 31, 2012.

93.32 	Sec. 22. Minnesota Statutes 2012, section 290.067, subdivision 2a, is amended to read:
93.33 		Subd. 2a.Income. (a) For purposes of this section, "income" means the sum of 
93.34 	the following:
94.1 	(1) federal adjusted gross income as defined in section 62 of the Internal Revenue 
94.2 	Code; and
94.3 	(2) the sum of the following amounts to the extent not included in clause (1):
94.4 	(i) all nontaxable income;
94.5 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 
94.6 	469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity 
94.7 	loss carryover allowed under section 469(b) of the Internal Revenue Code;
94.8 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness 
94.9 	of a solvent individual excluded from gross income under section 108(g) of the Internal 
94.10 	Revenue Code;
94.11 	(iv) cash public assistance and relief;
94.12 	(v) any pension or annuity (including railroad retirement benefits, all payments 
94.13 	received under the federal Social Security Act, supplemental security income, and veterans 
94.14 	benefits), which was not exclusively funded by the claimant or spouse, or which was 
94.15 	funded exclusively by the claimant or spouse and which funding payments were excluded 
94.16 	from federal adjusted gross income in the years when the payments were made;
94.17 	(vi) interest received from the federal or a state government or any instrumentality 
94.18 	or political subdivision thereof;
94.19 	(vii) workers' compensation;
94.20 	(viii) nontaxable strike benefits;
94.21 	(ix) the gross amounts of payments received in the nature of disability income or 
94.22 	sick pay as a result of accident, sickness, or other disability, whether funded through 
94.23 	insurance or otherwise;
94.24 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
94.25 	1986, as amended through December 31, 1995;
94.26 	(xi) contributions made by the claimant to an individual retirement account, 
94.27 	including a qualified voluntary employee contribution; simplified employee pension plan; 
94.28 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) 
94.29 	of the Internal Revenue Code; or deferred compensation plan under section 457 of the 
94.30 	Internal Revenue Code;
94.31 	(xii) nontaxable scholarship or fellowship grants;
94.32 	(xiii) the amount of deduction allowed under section 199 of the Internal Revenue 
94.33 	Code;
94.34 	(xiv) the amount of deduction allowed under section 220 or 223 of the Internal 
94.35 	Revenue Code;
95.1 	(xv) the amount of deducted for tuition expenses required to be added to income 
95.2 	under section 290.01, subdivision 19a, clause (12) under section 222 of the Internal 
95.3 	Revenue Code; and
95.4 	(xvi) the amount deducted for certain expenses of elementary and secondary school 
95.5 	teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.
95.6 	(xvii) unemployment compensation.
95.7 	In the case of an individual who files an income tax return on a fiscal year basis, the 
95.8 	term "federal adjusted gross income" means federal adjusted gross income reflected in the 
95.9 	fiscal year ending in the next calendar year. Federal adjusted gross income may not be 
95.10 	reduced by the amount of a net operating loss carryback or carryforward or a capital loss 
95.11 	carryback or carryforward allowed for the year.
95.12 	(b) "Income" does not include:
95.13 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
95.14 	(2) amounts of any pension or annuity that were exclusively funded by the claimant 
95.15 	or spouse if the funding payments were not excluded from federal adjusted gross income 
95.16 	in the years when the payments were made;
95.17 	(3) surplus food or other relief in kind supplied by a governmental agency;
95.18 	(4) relief granted under chapter 290A;
95.19 	(5) child support payments received under a temporary or final decree of dissolution 
95.20 	or legal separation; and
95.21 	(6) restitution payments received by eligible individuals and excludable interest as 
95.22 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 
95.23 	2001, Public Law 107-16.

95.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
95.25 	December 31, 2012.

95.26 	Sec. 23. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
95.27 		Subdivision 1.Credit allowed. (a) An individual is allowed a credit against the tax 
95.28 	imposed by this chapter equal to a percentage of earned income. To receive a credit, a 
95.29 	taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
95.30 	(b) For individuals with no qualifying children, the credit equals 1.9125 percent of 
95.31 	the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned 
95.32 	income or adjusted gross income, whichever is greater, in excess of $5,770, but in no 
95.33 	case is the credit less than zero.
95.34 	(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first 
95.35 	$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than 
96.1 	$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income, 
96.2 	whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
96.3 	(d) For individuals with two or more qualifying children, the credit equals ten percent 
96.4 	of the first $9,720 of earned income and 20 percent of earned income over $14,860 but less 
96.5 	than $16,800. The credit is reduced by 10.3 percent of earned income or adjusted gross 
96.6 	income, whichever is greater, in excess of $17,890, but in no case is the credit less than zero.
96.7 	(e) For a nonresident or part-year resident, the credit must be allocated based on the 
96.8 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).
96.9 	(f) For a person who was a resident for the entire tax year and has earned income 
96.10 	not subject to tax under this chapter, including income excluded under section 290.01, 
96.11 	subdivision 19b, clause (9), the credit must be allocated based on the ratio of federal 
96.12 	adjusted gross income reduced by the earned income not subject to tax under this chapter 
96.13 	over federal adjusted gross income. For purposes of this paragraph, the subtractions for 
96.14 	military pay under section 290.01, subdivision 19b, clauses (10) and (11) (8) and (9), are 
96.15 	not considered "earned income not subject to tax under this chapter."
96.16 	For the purposes of this paragraph, the exclusion of combat pay under section 112 
96.17 	of the Internal Revenue Code is not considered "earned income not subject to tax under 
96.18 	this chapter."
96.19 	(g) For tax years beginning after December 31, 2007, and before December 31, 
96.20 	2010, and for tax years beginning after December 31, 2017, the $5,770 in paragraph (b), 
96.21 	the $15,080 in paragraph (c), and the $17,890 in paragraph (d), after being adjusted for 
96.22 	inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint 
96.23 	returns. For tax years beginning after December 31, 2008, the commissioner shall annually 
96.24 	adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f) 
96.25 	of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be 
96.26 	substituted for the word "1992." For 2009, the commissioner shall then determine the 
96.27 	percent change from the 12 months ending on August 31, 2007, to the 12 months ending on 
96.28 	August 31, 2008, and in each subsequent year, from the 12 months ending on August 31, 
96.29 	2007, to the 12 months ending on August 31 of the year preceding the taxable year. The 
96.30 	earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the 
96.31 	amount ends in $5, the amount is rounded up to the nearest $10. The determination of the 
96.32 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.
96.33 	(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
96.34 	 and for tax years beginning after December 31, 2012, and before January 1, 2018, the 
96.35 	$5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph 
96.36 	(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000 
97.1 	for married taxpayers filing joint returns. For tax years beginning after December 31, 
97.2 	2010, and before January 1, 2012, and for tax years beginning after December 31, 2012, 
97.3 	and before January 1, 2018, the commissioner shall annually adjust the $5,000 by the 
97.4 	percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue 
97.5 	Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for the word 
97.6 	"1992." For 2011, the commissioner shall then determine the percent change from the 12 
97.7 	months ending on August 31, 2008, to the 12 months ending on August 31, 2010, and in 
97.8 	each subsequent year, from the 12 months ending on August 31, 2008, to the 12 months 
97.9 	ending on August 31 of the year preceding the taxable year. The earned income thresholds 
97.10 	as adjusted for inflation must be rounded to the nearest $10. If the amount ends in $5, the 
97.11 	amount is rounded up to the nearest $10. The determination of the commissioner under 
97.12 	this subdivision is not a rule under the Administrative Procedure Act.
97.13 	(i) The commissioner shall construct tables showing the amount of the credit at 
97.14 	various income levels and make them available to taxpayers. The tables shall follow 
97.15 	the schedule contained in this subdivision, except that the commissioner may graduate 
97.16 	the transition between income brackets.

97.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
97.18 	December 31, 2012.

97.19 	Sec. 24. Minnesota Statutes 2012, section 290.0675, subdivision 1, is amended to read:
97.20 		Subdivision 1.Definitions. (a) For purposes of this section the following terms 
97.21 	have the meanings given.
97.22 	(b) "Earned income" means the sum of the following, to the extent included in 
97.23 	Minnesota taxable income:
97.24 	(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;
97.25 	(2) income received from a retirement pension, profit-sharing, stock bonus, or 
97.26 	annuity plan; and
97.27 	(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue 
97.28 	Code.
97.29 	(c) "Taxable income" means net income as defined in section 290.01, subdivision 19.
97.30 	(d) "Earned income of lesser-earning spouse" means the earned income of the 
97.31 	spouse with the lesser amount of earned income as defined in paragraph (b) for the taxable 
97.32 	year minus the sum of (i) the amount for one exemption under section 151(d) of the 
97.33 	Internal Revenue Code and (ii) one-half the amount of the standard deduction under 
97.34 	section 63(c)(2)(A) and (4) of the Internal Revenue Code minus one-half of any addition 
97.35 	required under section 290.01, subdivision 19a, clause (21), and one-half of the addition 
98.1 	that would have been required under section 290.01, subdivision 19a, clause (21), if the 
98.2 	taxpayer had claimed the standard deduction.

98.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
98.4 	December 31, 2012.

98.5 	Sec. 25. Minnesota Statutes 2012, section 290.0677, subdivision 2, is amended to read:
98.6 		Subd. 2.Definitions. (a) For purposes of this section, the following terms have 
98.7 	the meanings given.
98.8 	(b) "Designated area" means a:
98.9 	(1) combat zone designated by Executive Order from the President of the United 
98.10 	States;
98.11 	(2) qualified hazardous duty area, designated in Public Law; or
98.12 	(3) location certified by the U. S. Department of Defense as eligible for combat zone 
98.13 	tax benefits due to the location's direct support of military operations.
98.14 	(c) "Active military service" means active duty service in any of the United States 
98.15 	armed forces, the National Guard, or reserves.
98.16 	(d) "Qualified individual" means an individual who has:
98.17 	(1) either (i) met one of the following criteria:
98.18 	(i) has served at least 20 years in the military or;
98.19 	(ii) has a service-connected disability rating of 100 percent for a total and permanent 
98.20 	disability; or
98.21 	(iii) has been determined by the military to be eligible for compensation from a 
98.22 	pension or other retirement pay from the federal government for service in the military, 
98.23 	as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455, 
98.24 	or 12733; and
98.25 	(2) separated from military service before the end of the taxable year.
98.26 	(e) "Adjusted gross income" has the meaning given in section 61 of the Internal 
98.27 	Revenue Code.

98.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
98.29 	December 31, 2012.

98.30 	Sec. 26. Minnesota Statutes 2012, section 290.068, subdivision 3, is amended to read:
98.31 		Subd. 3.Limitation; carryover. (a)(1) The credit for a taxable year beginning 
98.32 	before January 1, 2010, and after December 31, 2012, shall not exceed the liability for 
98.33 	tax. "Liability for tax" for purposes of this section means the tax imposed under section 
99.1 	290.06, subdivision 1, for the taxable year reduced by the sum of the nonrefundable 
99.2 	credits allowed under this chapter.
99.3 	(2) In the case of a corporation which is a partner in a partnership, the credit allowed 
99.4 	for the taxable year shall not exceed the lesser of the amount determined under clause (1) 
99.5 	for the taxable year or an amount (separately computed with respect to the corporation's 
99.6 	interest in the trade or business or entity) equal to the amount of tax attributable to that 
99.7 	portion of taxable income which is allocable or apportionable to the corporation's interest 
99.8 	in the trade or business or entity.
99.9 	(b) If the amount of the credit determined under this section for any taxable year 
99.10 	exceeds the limitation under clause (a), the excess shall be a research credit carryover to 
99.11 	each of the 15 succeeding taxable years. The entire amount of the excess unused credit for 
99.12 	the taxable year shall be carried first to the earliest of the taxable years to which the credit 
99.13 	may be carried and then to each successive year to which the credit may be carried. The 
99.14 	amount of the unused credit which may be added under this clause shall not exceed the 
99.15 	taxpayer's liability for tax less the research credit for the taxable year.

99.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
99.17 	December 31, 2012.

99.18 	Sec. 27. Minnesota Statutes 2012, section 290.068, subdivision 6a, is amended to read:
99.19 		Subd. 6a.Credit to be refundable. If the amount of credit allowed in this section 
99.20 	for qualified research expenses incurred in taxable years beginning after December 31, 
99.21 	2009, and before January 1, 2013, exceeds the taxpayer's tax liability under this chapter, 
99.22 	the commissioner shall refund the excess amount. The credit allowed for qualified research 
99.23 	expenses incurred in taxable years beginning after December 31, 2009, and before January 
99.24 	1, 2013,  must be used before any research credit earned under subdivision 3.

99.25 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
99.26 	December 31, 2012.

99.27 	Sec. 28. Minnesota Statutes 2012, section 290.0681, subdivision 1, is amended to read:
99.28 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
99.29 	have the meanings given.
99.30 	(b) "Account" means the historic credit administration account in the special 
99.31 	revenue fund.
99.32 	(c) "Office" means the State Historic Preservation Office of the Minnesota Historical 
99.33 	Society.
100.1 	(d) "Project" means rehabilitation of a certified historic structure, as defined in 
100.2 	section 47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is 
100.3 	allowed a federal credit under section 47(a)(2) of the Internal Revenue Code.
100.4 	(e) "Society" means the Minnesota Historical Society.
100.5 	(f) "Federal credit" means the credit allowed under section 47(a)(2) of the Internal 
100.6 	Revenue Code.
100.7 	(g) "Placed in service" has the meaning used in section 47 of the Internal Revenue 
100.8 	Code.
100.9 	(h) "Qualified rehabilitation expenditures" has the meaning given in section 47 of 
100.10 	the Internal Revenue Code.

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

100.12 	Sec. 29. Minnesota Statutes 2012, section 290.0681, subdivision 3, is amended to read:
100.13 		Subd. 3.Applications; allocations. (a) To qualify for a credit or grant under this 
100.14 	section, the developer of a project must apply to the office before the rehabilitation 
100.15 	begins. The application must contain the information and be in the form prescribed by 
100.16 	the office. The office may collect a fee for application of up to $5,000, based on 0.5 
100.17 	percent of estimated qualified rehabilitation expenses, not to exceed $35,000, to offset 
100.18 	costs associated with personnel and administrative expenses related to administering the 
100.19 	credit and preparing the economic impact report in subdivision 9. Application fees are 
100.20 	deposited in the account. The application must indicate if the application is for a credit 
100.21 	or a grant in lieu of the credit or a combination of the two and designate the taxpayer 
100.22 	qualifying for the credit or the recipient of the grant.
100.23 	(b) Upon approving an application for credit, the office shall issue allocation 
100.24 	certificates that:
100.25 	(1) verify eligibility for the credit or grant;
100.26 	(2) state the amount of credit or grant anticipated with the project, with the credit 
100.27 	amount equal to 100 percent and the grant amount equal to 90 percent of the federal 
100.28 	credit anticipated in the application;
100.29 	(3) state that the credit or grant allowed may increase or decrease if the federal 
100.30 	credit the project receives at the time it is placed in service is different than the amount 
100.31 	anticipated at the time the allocation certificate is issued; and
100.32 	(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer 
100.33 	or grant recipient is entitled to receive the credit or grant at the time the project is placed 
100.34 	in service, provided that date is within three calendar years following the issuance of 
100.35 	the allocation certificate.
101.1 	(c) The office, in consultation with the commissioner of revenue, shall determine 
101.2 	if the project is eligible for a credit or a grant under this section and must notify the 
101.3 	developer in writing of its determination. Eligibility for the credit is subject to review 
101.4 	and audit by the commissioner of revenue.
101.5 	(d) The federal credit recapture and repayment requirements under section 50 of the 
101.6 	Internal Revenue Code do not apply to the credit allowed under this section.
101.7 	(e) Any decision of the office under paragraph (c) may be challenged as a contested 
101.8 	case under chapter 14. The contested case proceeding must be initiated within 45 days of 
101.9 	the date of written notification by the office.

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

101.11 	Sec. 30. Minnesota Statutes 2012, section 290.0681, subdivision 4, is amended to read:
101.12 		Subd. 4.Credit certificates; grants. (a)(1) The developer of a project for which the 
101.13 	office has issued an allocation certificate must notify the office when the project is placed 
101.14 	in service. Upon verifying that the project has been placed in service, and was allowed a 
101.15 	federal credit, the office must issue a credit certificate to the taxpayer designated in the 
101.16 	application or must issue a grant to the recipient designated in the application. The credit 
101.17 	certificate must state the amount of the credit.
101.18 	(2) The credit amount equals the federal credit allowed for the project.
101.19 	(3) The grant amount equals 90 percent of the federal credit allowed for the project.
101.20 	(b) The recipient of a credit certificate may assign the certificate to another taxpayer, 
101.21 	which is then allowed the credit under this section or section 297I.20, subdivision 3.  An 
101.22 	assignment is not valid unless the assignee notifies the commissioner within 30 days of the 
101.23 	date that the assignment is made. The commissioner shall prescribe the forms necessary 
101.24 	for notifying the commissioner of the assignment of a credit certificate and for claiming 
101.25 	a credit by assignment.
101.26 	(c) Credits passed through to partners, members, shareholders, or owners pursuant to 
101.27 	subdivision 5 are not an assignment of a credit certificate under this subdivision.
101.28 	(d) A grant agreement between the office and the recipient of a grant may allow the 
101.29 	grant to be issued to another individual or entity.

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

101.31 	Sec. 31. Minnesota Statutes 2012, section 290.0681, subdivision 5, is amended to read:
101.32 		Subd. 5.Partnerships; multiple owners. Credits granted to a partnership, a limited 
101.33 	liability company taxed as a partnership, S corporation, or multiple owners of property 
102.1 	are passed through to the partners, members, shareholders, or owners, respectively, pro 
102.2 	rata to each partner, member, shareholder, or owner based on their share of the entity's 
102.3 	assets or as specially allocated in their organizational documents or any other executed 
102.4 	agreement, as of the last day of the taxable year.

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

102.6 	Sec. 32. [290.0693] VETERANS JOBS TAX CREDIT.
102.7 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms 
102.8 	have the meanings given.
102.9 	(b) "Date of hire" means the day that the qualified employee begins performing 
102.10 	services as an employee of the qualified employer.
102.11 	(c) "Disabled veteran" is a veteran who has had a service-connected disability rating 
102.12 	as adjudicated by the United States Veterans Administration, or by the retirement board of 
102.13 	one of the several branches of the armed forces.
102.14 	(d)(1) "Qualified employee" means an employee as defined in section 290.92, 
102.15 	subdivision 1, who meets the following criteria:
102.16 	(i) the employee is a resident of Minnesota on the date of hire;
102.17 	(ii) the employee is paid wages as defined in section 290.92, subdivision 1; and
102.18 	(iii) the employee's wages are attributable to Minnesota under section 290.191, 
102.19 	subdivision 12;
102.20 	(2) Qualified employee does not include:
102.21 	(i) any employee who bears any of the relationships to the employer described in 
102.22 	subparagraphs (A) to (G) of section 152(d)(2) of the Internal Revenue Code;
102.23 	(ii) if the employer is a corporation, an employee who owns, directly or indirectly, 
102.24 	more than 50 percent in value of the outstanding stock of the corporation, or if the 
102.25 	employer is an entity other than a corporation, an employee who owns, directly or 
102.26 	indirectly, more than 50 percent of the capital and profits interests in the entity, as 
102.27 	determined with the application of section 267(c) of the Internal Revenue Code; or
102.28 	(iii) if the employer is an estate or trust, any employee who is a fiduciary of the estate 
102.29 	or trust, or is an individual who bears any of the relationships described in subparagraphs 
102.30 	(A) to (G) of section 152(d)(2) of the Internal Revenue Code to a grantor, beneficiary, 
102.31 	or fiduciary of the estate or trust.
102.32 	(e) "Qualified employer" means an employer that hired a disabled veteran, or an 
102.33 	unemployed veteran as a qualified employee.
102.34 	(f) "Unemployed veteran" is a veteran who:
103.1 	(1) received unemployment compensation under state or federal law at any time 
103.2 	during the two-year period prior to the date of hire; and
103.3 	(2) was unemployed on the date of hire.
103.4 	(g) "Veteran" has the meaning given in section 197.447.
103.5 		Subd. 2.Credit allowed. (a) A qualified employer is allowed a credit for each of 
103.6 	the following individuals that the qualified employer hires as a qualified employee during 
103.7 	taxable years beginning after December 31, 2012, and before January 1, 2017:
103.8 	(1) a disabled veteran; or
103.9 	(2) an unemployed veteran.
103.10 	(b) Subject to the requirements of this section, there is no limit to the number of 
103.11 	credits that a qualified employer may claim under this section during a taxable year.
103.12 	(c) A qualified employer may claim the credit either for the taxable year in which 
103.13 	the qualified employee is hired, or in the next taxable year, but may claim the credit only 
103.14 	once for each qualified employee.
103.15 		Subd. 3.Credit amount for hiring certain veterans. (a) A qualified employer who 
103.16 	is required to file a return under section 289A.08, subdivision 1, 2, or 3, is allowed a credit 
103.17 	against the tax imposed by this chapter as determined under this subdivision.
103.18 	(b) For hiring a disabled veteran as a qualified employee, the credit equals ten 
103.19 	percent of the wages paid to the qualified employee during the taxable year, but the 
103.20 	amount of the credit shall not exceed $1,200.
103.21 	(c) For hiring an unemployed veteran as a qualified employee, the credit equals 
103.22 	ten percent of the wages paid to the qualified employee during the taxable year, but the 
103.23 	amount of the credit shall not exceed $600.
103.24 	(d) The credit is limited to the liability for tax under this chapter for the taxable year.
103.25 	(e) A qualified employer is allowed only one of the credits authorized under 
103.26 	paragraphs (b) and (c) upon hiring a disabled veteran, or an unemployed veteran as a 
103.27 	qualified employee.
103.28 	(f) A qualified employer may not claim a credit under this subdivision for hiring 
103.29 	a disabled veteran, or an unemployed veteran as a qualified employee if the qualified 
103.30 	employer currently employs or has previously employed the disabled veteran, or 
103.31 	unemployed veteran.
103.32 		Subd. 4.Flow-through entities. Credits granted to a partnership, limited liability 
103.33 	company taxed as a partnership, S corporation, or multiple owners of a business are passed 
103.34 	through to the partners, members, shareholders, or owners, respectively, pro rata to each 
103.35 	partner, member, shareholder, or owner based on their share of the entity's assets or as 
103.36 	specially allocated in their organizational documents, as of the last day of the taxable year.

104.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
104.2 	December 31, 2012.

104.3 	Sec. 33. Minnesota Statutes 2012, section 290.091, subdivision 2, is amended to read:
104.4 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
104.5 	terms have the meanings given:
104.6 	(a) "Alternative minimum taxable income" means the sum of the following for 
104.7 	the taxable year:
104.8 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
104.9 	55(b)(2) of the Internal Revenue Code;
104.10 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
104.11 	minimum taxable income, but excluding:
104.12 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
104.13 	Code;
104.14 	(ii) (i) the medical expense deduction;
104.15 	(iii) (ii) the casualty, theft, and disaster loss deduction; and
104.16 	(iv) (iii) the impairment-related work expenses of a disabled person;
104.17 	(3) for depletion allowances computed under section 613A(c) of the Internal 
104.18 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
104.19 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
104.20 	the excess of the deduction for depletion allowable under section 611 of the Internal 
104.21 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
104.22 	taxable year (determined without regard to the depletion deduction for the taxable year);
104.23 	(4) to the extent not included in federal alternative minimum taxable income, the 
104.24 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
104.25 	Internal Revenue Code determined without regard to subparagraph (E);
104.26 	(5) to the extent not included in federal alternative minimum taxable income, the 
104.27 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
104.28 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 
104.29 	to (9), (12), (13), and (16) to (18) (7) to (9), (11), and (12);
104.30 	less the sum of the amounts determined under the following:
104.31 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1);
104.32 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
104.33 	19b, clause (2), to the extent included in federal alternative minimum taxable income;
104.34 	(3) the amount of investment interest paid or accrued within the taxable year on 
104.35 	indebtedness to the extent that the amount does not exceed net investment income, as 
105.1 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
105.2 	amounts deducted in computing federal adjusted gross income;
105.3 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
105.4 	subdivision 19b, clauses (6), (8) to (14), and (16) (6) to (12), (14), and (18); and
105.5 	(5) the amount of the net operating loss allowed under section 290.095, subdivision 
105.6 	11, paragraph (c).
105.7 	In the case of an estate or trust, alternative minimum taxable income must be 
105.8 	computed as provided in section 59(c) of the Internal Revenue Code.
105.9 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
105.10 	of the Internal Revenue Code.
105.11 	(c) "Net minimum tax" means the minimum tax imposed by this section.
105.12 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
105.13 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
105.14 	credits allowed under this chapter.
105.15 	(e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
105.16 	income after subtracting the exemption amount determined under subdivision 3.

105.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
105.18 	December 31, 2012.

105.19 	Sec. 34. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
105.20 		Subd. 3.Alternative minimum taxable income. "Alternative minimum taxable 
105.21 	income" is Minnesota net income as defined in section 290.01, subdivision 19, and 
105.22 	includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 
105.23 	(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 
105.24 	Minnesota tax return, the minimum tax must be computed on a separate company basis. 
105.25 	If a corporation is part of a tax group filing a unitary return, the minimum tax must be 
105.26 	computed on a unitary basis. The following adjustments must be made.
105.27 	(1) For purposes of the depreciation adjustments under section 56(a)(1) and 
105.28 	56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 
105.29 	service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 
105.30 	income tax purposes, including any modification made in a taxable year under section 
105.31 	290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7, 
105.32 	paragraph (c).
105.33 	For taxable years beginning after December 31, 2000, the amount of any remaining 
105.34 	modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 
106.1 	section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 
106.2 	allowance in the first taxable year after December 31, 2000.
106.3 	(2) The portion of the depreciation deduction allowed for federal income tax 
106.4 	purposes under section 168(k) of the Internal Revenue Code that is required as an addition 
106.5 	under section 290.01, subdivision 19c, clause (15) (12), is disallowed in determining 
106.6 	alternative minimum taxable income.
106.7 	(3) The subtraction for depreciation allowed under section 290.01, subdivision 
106.8 	19d, clause (17) (16), is allowed as a depreciation deduction in determining alternative 
106.9 	minimum taxable income.
106.10 	(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
106.11 	of the Internal Revenue Code does not apply.
106.12 	(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
106.13 	Revenue Code does not apply.
106.14 	(6) The special rule for dividends from section 936 companies under section 
106.15 	56(g)(4)(C)(iii) does not apply.
106.16 	(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal 
106.17 	Revenue Code does not apply.
106.18 	(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the 
106.19 	Internal Revenue Code must be calculated without regard to subparagraph (E) and the 
106.20 	subtraction under section 290.01, subdivision 19d, clause (4).
106.21 	(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the 
106.22 	Internal Revenue Code does not apply.
106.23 	(10) (9) The tax preference for charitable contributions of appreciated property 
106.24 	under section 57(a)(6) of the Internal Revenue Code does not apply.
106.25 	(11) (10) For purposes of calculating the tax preference for accelerated depreciation 
106.26 	or amortization on certain property placed in service before January 1, 1987, under section 
106.27 	57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 
106.28 	deduction allowed under section 290.01, subdivision 19e.
106.29 	For taxable years beginning after December 31, 2000, the amount of any remaining 
106.30 	modification made under section 290.01, subdivision 19e, not previously deducted is a 
106.31 	depreciation or amortization allowance in the first taxable year after December 31, 2004.
106.32 	(12) (11) For purposes of calculating the adjustment for adjusted current earnings 
106.33 	in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 
106.34 	income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 
106.35 	minimum taxable income as defined in this subdivision, determined without regard to the 
106.36 	adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
107.1 	(13) (12) For purposes of determining the amount of adjusted current earnings 
107.2 	under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under 
107.3 	section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign 
107.4 	dividend gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), 
107.5 	(ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in 
107.6 	section 290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other 
107.7 	like income subtracted as provided in section 290.01, subdivision 19d, clause (10).
107.8 	(14) (13) Alternative minimum taxable income excludes the income from operating 
107.9 	in a job opportunity building zone as provided under section 469.317.
107.10 	(15) (14) Alternative minimum taxable income excludes the income from operating 
107.11 	in a biotechnology and health sciences industry zone as provided under section 469.337.
107.12 	Items of tax preference must not be reduced below zero as a result of the 
107.13 	modifications in this subdivision.

107.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
107.15 	December 31, 2012.

107.16 	Sec. 35. Minnesota Statutes 2012, section 290.0922, subdivision 1, is amended to read:
107.17 		Subdivision 1.Imposition. (a) In addition to the tax imposed by this chapter without 
107.18 	regard to this section, the franchise tax imposed on a corporation required to file under 
107.19 	section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation 
107.20 	under section 290.9725 for the taxable year includes a tax equal to the following amounts:

107.21
107.22	If the sum of the corporation's Minnesota 
property, payrolls, and sales or receipts is:
		the tax equals: 
	
107.23			less than
	$
	500,000
		$
	0
		
107.24		$
	500,000
	to
	$
	999,999
		$
	100
		
107.25		$
	1,000,000
	to
	$
	4,999,999
		$
	300
		
107.26		$
	5,000,000
	to
	$
	9,999,999
		$
	1,000
		
107.27		$
	10,000,000
	to
	$
	19,999,999
		$
	2,000
		
107.28		$
	20,000,000
	or
	more
			$
	5,000
		
107.29			less than
		$
	930,000
		$
	0
		
107.30		$
	930,000
	to
	$
	1,869,999
		$
	190
		
107.31		$
	1,870,000
	to
	$
	9,339,999
		$
	560
		
107.32		$
	9,340,000
	to
	$
	18,679,999
		$
	1,870
		
107.33		$
	18,680,000
	to
	$
	37,359,999
		$
	3,740
		
107.34		$
	37,360,000
	or
	more
			$
	9,340
		
107.35 	(b) A tax is imposed for each taxable year on a corporation required to file a return 
107.36 	under section 289A.12, subdivision 3, that is treated as an "S" corporation under section 
107.37 	290.9725 and on a partnership required to file a return under section 289A.12, subdivision 
108.1 	3, other than a partnership that derives over 80 percent of its income from farming. The 
108.2 	tax imposed under this paragraph is due on or before the due date of the return for the 
108.3 	taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe 
108.4 	the return to be used for payment of this tax. The tax under this paragraph is equal to 
108.5 	the following amounts:

108.6
108.7
108.8
108.9	If the sum of the S corporation's 
or partnership's Minnesota 
property, payrolls, and sales or 
receipts is:
			the tax equals: 
	
108.10			less than
	$
	500,000
		$
	0
		
108.11		$
	500,000
	to
	$
	999,999
		$
	100
		
108.12		$
	1,000,000
	to
	$
	4,999,999
		$
	300
		
108.13		$
	5,000,000
	to
	$
	9,999,999
		$
	1,000
		
108.14		$
	10,000,000
	to
	$
	19,999,999
		$
	2,000
		
108.15		$
	20,000,000
	or
	more
			$
	5,000
		
108.16			less than
		$
	930,000
		$
	0
		
108.17		$
	930,000
	to
	$
	1,869,999
		$
	190
		
108.18		$
	1,870,000
	to
	$
	9,339,999
		$
	560
		
108.19		$
	9,340,000
	to
	$
	18,679,999
		$
	1,870
		
108.20		$
	18,680,000
	to
	$
	37,359,999
		$
	3,740
		
108.21		$
	37,360,000
	or
	more
			$
	9,340
		
108.22 	(c) The commissioner shall adjust the dollar amounts of both the tax and the property, 
108.23 	payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage 
108.24 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
108.25 	that in section 1(f)(3)(B) the word "2012" must be substituted for the word "1992." For 
108.26 	2014, the commissioner shall determine the percentage change from the 12 months ending 
108.27 	on August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent 
108.28 	year, from the 12 months ending on August 31, 2012, to the 12 months ending on August 
108.29 	31 of the year preceding the taxable year. The determination of the commissioner pursuant 
108.30 	to this subdivision is not a "rule" subject to the Administrative Procedure Act contained in 
108.31 	chapter 14. The tax amounts as adjusted must be rounded to the nearest $10 amount and 
108.32 	the threshold amounts must be adjusted to the nearest $10,000 amount. For tax amounts 
108.33 	that end in $5, the amount is rounded up to the nearest $10 amount and for the threshold 
108.34 	amounts that end in $5,000, the amount is rounded up to the nearest $10,000.

108.35 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
108.36 	December 31, 2012.

108.37 	Sec. 36. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read:
109.1 		Subd. 4.Unitary business principle. (a) If a trade or business conducted wholly 
109.2 	within this state or partly within and partly without this state is part of a unitary business, 
109.3 	the entire income of the unitary business is subject to apportionment pursuant to section 
109.4 	290.191. Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary 
109.5 	business is considered to be derived from any particular source and none may be allocated 
109.6 	to a particular place except as provided by the applicable apportionment formula. The 
109.7 	provisions of this subdivision do not apply to business income subject to subdivision 5, 
109.8 	income of an insurance company, or income of an investment company determined under 
109.9 	section 290.36.
109.10 	(b) The term "unitary business" means business activities or operations which 
109.11 	result in a flow of value between them. The term may be applied within a single legal 
109.12 	entity or between multiple entities and without regard to whether each entity is a sole 
109.13 	proprietorship, a corporation, a partnership or a trust.
109.14 	(c) Unity is presumed whenever there is unity of ownership, operation, and use, 
109.15 	evidenced by centralized management or executive force, centralized purchasing, 
109.16 	advertising, accounting, or other controlled interaction, but the absence of these 
109.17 	centralized activities will not necessarily evidence a nonunitary business. Unity is also 
109.18 	presumed when business activities or operations are of mutual benefit, dependent upon or 
109.19 	contributory to one another, either individually or as a group.
109.20 	(d) Where a business operation conducted in Minnesota is owned by a business 
109.21 	entity that carries on business activity outside the state different in kind from that 
109.22 	conducted within this state, and the other business is conducted entirely outside the state, it 
109.23 	is presumed that the two business operations are unitary in nature, interrelated, connected, 
109.24 	and interdependent unless it can be shown to the contrary.
109.25 	(e) Unity of ownership is does not deemed to exist when a corporation is two or 
109.26 	more corporations are involved unless that corporation is a member of a group of two or 
109.27 	more business entities and more than 50 percent of the voting stock of each member of 
109.28 	the group corporation is directly or indirectly owned by a common owner or by common 
109.29 	owners, either corporate or noncorporate, or by one or more of the member corporations 
109.30 	of the group. For this purpose, the term "voting stock" shall include membership interests 
109.31 	of mutual insurance holding companies formed under section 66A.40.
109.32 	(f) The net income and apportionment factors under section 290.191 or 290.20 of 
109.33 	foreign corporations and other foreign entities which are part of a unitary business shall 
109.34 	not be included in the net income or the apportionment factors of the unitary business. A 
109.35 	foreign corporation or other foreign entity which is not included on a combined report and 
109.36 	which is required to file a return under this chapter shall file on a separate return basis. 
110.1 	The net income and apportionment factors under section 290.191 or 290.20 of foreign 
110.2 	operating corporations shall not be included in the net income or the apportionment 
110.3 	factors of the unitary business except as provided in paragraph (g). The legislature intends 
110.4 	that the provisions of this paragraph are not severable from the provisions of section 
110.5 	290.01, subdivision 5, clauses (4) and (5), and if any of those provisions are found to be 
110.6 	unconstitutional, the provisions of this paragraph are void for the respective taxable years.
110.7 	(g) The adjusted net income of a foreign operating corporation shall be deemed to 
110.8 	be paid as a dividend on the last day of its taxable year to each shareholder thereof, in 
110.9 	proportion to each shareholder's ownership, with which such corporation is engaged in 
110.10 	a unitary business. Such deemed dividend shall be treated as a dividend under section 
110.11 	290.21, subdivision 4.
110.12 	Dividends actually paid by a foreign operating corporation to a corporate shareholder 
110.13 	which is a member of the same unitary business as the foreign operating corporation shall 
110.14 	be eliminated from the net income of the unitary business in preparing a combined report 
110.15 	for the unitary business. The adjusted net income of a foreign operating corporation 
110.16 	shall be its net income adjusted as follows:
110.17 	(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto 
110.18 	Rico, or a United States possession or political subdivision of any of the foregoing shall 
110.19 	be a deduction; and
110.20 	(2) the subtraction from federal taxable income for payments received from foreign 
110.21 	corporations or foreign operating corporations under section 290.01, subdivision 19d, 
110.22 	clause (10), shall not be allowed.
110.23 	If a foreign operating corporation incurs a net loss, neither income nor deduction from 
110.24 	that corporation shall be included in determining the net income of the unitary business.
110.25 	(h) (g) For purposes of determining the net income of a unitary business and the 
110.26 	factors to be used in the apportionment of net income pursuant to section 290.191 or 
110.27 	290.20, there must be included only the income and apportionment factors of domestic 
110.28 	corporations or other domestic entities other than foreign operating corporations that are 
110.29 	determined to be part of the unitary business pursuant to this subdivision, notwithstanding 
110.30 	that foreign corporations or other foreign entities might be included in the unitary business.
110.31 	(i) (h) Deductions for expenses, interest, or taxes otherwise allowable under 
110.32 	this chapter that are connected with or allocable against dividends, deemed dividends 
110.33 	described in paragraph (g), or royalties, fees, or other like income described in section 
110.34 	290.01, subdivision 19d, clause (10), shall not be disallowed.
110.35 	(j) (i) Each corporation or other entity, except a sole proprietorship, that is part of 
110.36 	a unitary business must file combined reports as the commissioner determines. On the 
111.1 	reports, all intercompany transactions between entities included pursuant to paragraph (h)
111.2 	 (g) must be eliminated and the entire net income of the unitary business determined in 
111.3 	accordance with this subdivision is apportioned among the entities by using each entity's 
111.4 	Minnesota factors for apportionment purposes in the numerators of the apportionment 
111.5 	formula and the total factors for apportionment purposes of all entities included pursuant 
111.6 	to paragraph (h) (g) in the denominators of the apportionment formula. All sales of the 
111.7 	unitary business made within Minnesota pursuant to section 290.191 or 290.20 must be 
111.8 	included on the separate combined report of a corporation that is a member of the unitary 
111.9 	business and is subject to the jurisdiction of this state to impose tax under this chapter.
111.10 	(k) (j) If a corporation has been divested from a unitary business and is included in a 
111.11 	combined report for a fractional part of the common accounting period of the combined 
111.12 	report:
111.13 	(1) its income includable in the combined report is its income incurred for that part 
111.14 	of the year determined by proration or separate accounting; and
111.15 	(2) its sales, property, and payroll included in the apportionment formula must 
111.16 	be prorated or accounted for separately.

111.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
111.18 	December 31, 2012.

111.19 	Sec. 37. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read:
111.20 		Subd. 4.Dividends received from another corporation. (a)(1) Eighty percent 
111.21 	of dividends received by a corporation during the taxable year from another corporation, 
111.22 	in which the recipient owns 20 percent or more of the stock, by vote and value, not 
111.23 	including stock described in section 1504(a)(4) of the Internal Revenue Code when the 
111.24 	corporate stock with respect to which dividends are paid does not constitute the stock in 
111.25 	trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not 
111.26 	constitute property held by the taxpayer primarily for sale to customers in the ordinary 
111.27 	course of the taxpayer's trade or business, or when the trade or business of the taxpayer 
111.28 	does not consist principally of the holding of the stocks and the collection of the income 
111.29 	and gains therefrom; and
111.30 	(2)(i) the remaining 20 percent of dividends if the dividends received are the stock in 
111.31 	an affiliated company transferred in an overall plan of reorganization and the dividend 
111.32 	is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 
111.33 	amended through December 31, 1989;
111.34 	(ii) the remaining 20 percent of dividends if the dividends are received from a 
111.35 	corporation which is subject to tax under section 290.36 and which is a member of an 
112.1 	affiliated group of corporations as defined by the Internal Revenue Code and the dividend 
112.2 	is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 
112.3 	amended through December 31, 1989, or is deducted under an election under section 
112.4 	243(b) of the Internal Revenue Code; or
112.5 	(iii) the remaining 20 percent of the dividends if the dividends are received from a 
112.6 	property and casualty insurer as defined under section 60A.60, subdivision 8, which is a 
112.7 	member of an affiliated group of corporations as defined by the Internal Revenue Code 
112.8 	and either: (A) the dividend is eliminated in consolidation under Treasury Regulation 
112.9 	1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted 
112.10 	under an election under section 243(b) of the Internal Revenue Code.
112.11 	(b) Seventy percent of dividends received by a corporation during the taxable year 
112.12 	from another corporation in which the recipient owns less than 20 percent of the stock, 
112.13 	by vote or value, not including stock described in section 1504(a)(4) of the Internal 
112.14 	Revenue Code when the corporate stock with respect to which dividends are paid does not 
112.15 	constitute the stock in trade of the taxpayer, or does not constitute property held by the 
112.16 	taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or 
112.17 	business, or when the trade or business of the taxpayer does not consist principally of the 
112.18 	holding of the stocks and the collection of income and gain therefrom.
112.19 	(c) The dividend deduction provided in this subdivision shall be allowed only with 
112.20 	respect to dividends that are included in a corporation's Minnesota taxable net income 
112.21 	for the taxable year.
112.22 	The dividend deduction provided in this subdivision does not apply to a dividend 
112.23 	from a corporation which, for the taxable year of the corporation in which the distribution 
112.24 	is made or for the next preceding taxable year of the corporation, is a corporation exempt 
112.25 	from tax under section 501 of the Internal Revenue Code.
112.26 	The dividend deduction provided in this subdivision does not apply to a dividend 
112.27 	received from a real estate investment trust, as defined in section 856 of the Internal 
112.28 	Revenue Code.
112.29 	The dividend deduction provided in this subdivision applies to the amount of 
112.30 	regulated investment company dividends only to the extent determined under section 
112.31 	854(b) of the Internal Revenue Code.
112.32 	The dividend deduction provided in this subdivision shall not be allowed with 
112.33 	respect to any dividend for which a deduction is not allowed under the provisions of 
112.34 	section 246(c) of the Internal Revenue Code.
112.35 	(d) If dividends received by a corporation that does not have nexus with Minnesota 
112.36 	under the provisions of Public Law 86-272 are included as income on the return of 
113.1 	an affiliated corporation permitted or required to file a combined report under section 
113.2 	290.17, subdivision 4, or 290.34, subdivision 2, then for purposes of this subdivision the 
113.3 	determination as to whether the trade or business of the corporation consists principally 
113.4 	of the holding of stocks and the collection of income and gains therefrom shall be made 
113.5 	with reference to the trade or business of the affiliated corporation having a nexus with 
113.6 	Minnesota.
113.7 	(e) The deduction provided by this subdivision does not apply if the dividends are 
113.8 	paid by a FSC as defined in section 922 of the Internal Revenue Code.
113.9 	(f) If one or more of the members of the unitary group whose income is included on 
113.10 	the combined report received a dividend, the deduction under this subdivision for each 
113.11 	member of the unitary business required to file a return under this chapter is the product 
113.12 	of: (1) 100 percent of the dividends received by members of the group; (2) the percentage 
113.13 	allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business 
113.14 	income apportionable to this state for the taxable year under section 290.191 or 290.20.

113.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
113.16 	December 31, 2012.

113.17 	Sec. 38. Minnesota Statutes 2012, section 290A.03, subdivision 15, as amended by 
113.18 	Laws 2013, chapter 3, section 5, is amended to read:
113.19 		Subd. 15.Internal Revenue Code. For taxable years beginning before January 1, 
113.20 	2012, and after December 31, 2012, "Internal Revenue Code" means the Internal Revenue 
113.21 	Code of 1986, as amended through April 14, 2011; and for taxable years beginning after 
113.22 	December 31, 2011, and before January 1, 2013, "Internal Revenue Code" means the 
113.23 	Internal Revenue Code of 1986, as amended through January 3, 2013.

113.24 	EFFECTIVE DATE. This section is effective for property tax refunds based on 
113.25 	property taxes payable after December 31, 2013, and rent paid after December 31, 2012.

113.26 	Sec. 39. Minnesota Statutes 2012, section 298.01, subdivision 3b, is amended to read:
113.27 		Subd. 3b.Deductions. (a) For purposes of determining taxable income under 
113.28 	subdivision 3, the deductions from gross income include only those expenses necessary 
113.29 	to convert raw ores to marketable quality. Such expenses include costs associated with 
113.30 	refinement but do not include expenses such as transportation, stockpiling, marketing, or 
113.31 	marine insurance that are incurred after marketable ores are produced, unless the expenses 
113.32 	are included in gross income. The allowable deductions from a mine or plant that mines 
113.33 	and produces more than one mineral, metal, or energy resource must be determined 
114.1 	separately for the purposes of computing the deduction in section 290.01, subdivision 19c, 
114.2 	clause (9) (8). These deductions may be combined on one occupation tax return to arrive 
114.3 	at the deduction from gross income for all production.
114.4 	(b) The provisions of section 290.01, subdivisions 19c, clauses (6) and (9), and 19d, 
114.5 	clauses (7) and (11), are not used to determine taxable income.

114.6 	Sec. 40. ESTIMATED TAXES; EXCEPTIONS.
 114.7 	No addition to tax, penalties, or interest may be made under Minnesota Statutes, 
114.8 	section 289A.25, for any period before September 15, 2013, with respect to an 
114.9 	underpayment of estimated tax, to the extent that the underpayment was created or 
114.10 	increased by the increase in income tax rates under this article.

114.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
114.12 	December 31, 2012.

114.13 	Sec. 41. REPEALER.
 114.14 	Minnesota Statutes 2012, sections 290.01, subdivision 6b; 290.06, subdivision 22a; 
114.15 	290.0672; and 290.0921, subdivision 7, are repealed.

114.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
114.17 	December 31, 2012.

114.18 	ARTICLE 7
114.19 	ESTATE AND GIFT TAXES

114.20 	Section 1. Minnesota Statutes 2012, section 289A.10, subdivision 1, is amended to read:
114.21 		Subdivision 1.Return required. In the case of a decedent who has an interest in 
114.22 	property with a situs in Minnesota, the personal representative must submit a Minnesota 
114.23 	estate tax return to the commissioner, on a form prescribed by the commissioner, if:
114.24 	(1) a federal estate tax return is required to be filed; or
114.25 	(2) the sum of the federal gross estate and federal adjusted taxable gifts made within 
114.26 	three years of the date of the decedent's death  exceeds $1,000,000.
114.27 	The return must contain a computation of the Minnesota estate tax due. The return 
114.28 	must be signed by the personal representative.

114.29 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
114.30 	December 31, 2012.

115.1 	Sec. 2. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
115.2 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following 
115.3 	terms used in this chapter shall have the following meanings:
115.4 	(1) "Commissioner" means the commissioner of revenue or any person to whom the 
115.5 	commissioner has delegated functions under this chapter.
115.6 	(2) "Federal gross estate" means the gross estate of a decedent as required to be valued 
115.7 	and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
115.8 	(3) "Internal Revenue Code" means the United States Internal Revenue Code of 
115.9 	1986, as amended through April 14, 2011 January 3, 2013, but without regard to the 
115.10 	provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law 
115.11 	111-312, and section 301(c) of Public Law 111-312 section 2011, paragraph (f), of the 
115.12 	Internal Revenue Code.
115.13 	(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as 
115.14 	defined by section 2011(b)(3) of the Internal Revenue Code, plus
115.15 	(i) the amount of deduction for state death taxes allowed under section 2058 of the 
115.16 	Internal Revenue Code; 
115.17 	(ii) the amount of taxable gifts, as defined in section 292.16, and made by the 
115.18 	decedent within three years of the decedent's date of death; less
115.19 	(ii) (iii)(A) the value of qualified small business property under section 291.03, 
115.20 	subdivision 9, and the value of qualified farm property under section 291.03, subdivision 
115.21 	10, or (B) $4,000,000, whichever is less.
115.22 	(5) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
115.23 	excluding therefrom any property included therein which has its situs outside Minnesota, 
115.24 	and (b) including therein any property omitted from the federal gross estate which is 
115.25 	includable therein, has its situs in Minnesota, and was not disclosed to federal taxing 
115.26 	authorities.
115.27 	(6) "Nonresident decedent" means an individual whose domicile at the time of 
115.28 	death was not in Minnesota.
115.29 	(7) "Personal representative" means the executor, administrator or other person 
115.30 	appointed by the court to administer and dispose of the property of the decedent. If there 
115.31 	is no executor, administrator or other person appointed, qualified, and acting within this 
115.32 	state, then any person in actual or constructive possession of any property having a situs in 
115.33 	this state which is included in the federal gross estate of the decedent shall be deemed 
115.34 	to be a personal representative to the extent of the property and the Minnesota estate tax 
115.35 	due with respect to the property.
116.1 	(8) "Resident decedent" means an individual whose domicile at the time of death 
116.2 	was in Minnesota.
116.3 	(9) "Situs of property" means, with respect to:
116.4 	(i) real property, the state or country in which it is located; with respect to
116.5 	(ii) tangible personal property, the state or country in which it was normally kept or 
116.6 	located at the time of the decedent's death or for a gift of tangible personal property within 
116.7 	three years of death, the state or country in which it was normally kept or located when 
116.8 	the gift was executed; and with respect to
116.9 	(iii) intangible personal property, the state or country in which the decedent was 
116.10 	domiciled at death or for a gift of intangible personal property within three years of death, 
116.11 	the state or country in which the decedent was domiciled when the gift was executed.
116.12 	For a nonresident decedent with an ownership interest in a pass-through entity 
116.13 	with assets that include real or tangible personal property, situs of the real or tangible 
116.14 	personal property is determined as if the pass-through entity does not exist and the real 
116.15 	or tangible personal property is personally owned by the decedent. If the pass-through 
116.16 	entity is owned by a person or persons in addition to the decedent, ownership of the 
116.17 	property is attributed to the decedent in proportion to the decedent's capital ownership 
116.18 	share of the pass-through entity.
116.19 	(10) "Pass-through entity" includes the following:
116.20 	(i) an entity electing S corporation status under section 1362 of the Internal Revenue 
116.21 	Code;
116.22 	(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
116.23 	(iii) a single-member limited liability company or similar entity, regardless of 
116.24 	whether it is taxed as an association or is disregarded for federal income tax purposes 
116.25 	under Code of Federal Regulations, title 26, section 301.7701-3; or
116.26 	(iv) a trust to the extent the property is includible in the decedent's federal gross estate.

116.27 	EFFECTIVE DATE. This section is effective for decedents dying after December 
116.28 	31, 2012.

116.29 	Sec. 3. Minnesota Statutes 2012, section 291.03, subdivision 1, is amended to read:
116.30 		Subdivision 1.Tax amount. (a) The tax imposed shall be an amount equal to the 
116.31 	proportion of the maximum credit for state death taxes computed under section 2011 of 
116.32 	the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal 
116.33 	adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal 
116.34 	gross estate. The tax is reduced by:
117.1 	(1) the gift tax paid by the decedent under section 292.17 on gifts included in the 
117.2 	Minnesota adjusted gross estate and not subtracted as qualified farm or small business 
117.3 	property; and
117.4 	(2) any credit allowed under subdivision 1c.
117.5 	(b) The tax determined under this subdivision must not be greater than the sum of 
117.6 	the following amounts multiplied by a fraction, the numerator of which is the Minnesota 
117.7 	gross estate and the denominator of which is the federal gross estate:
117.8 	(1) the rates and brackets under section 2001(c) of the Internal Revenue Code 
117.9 	multiplied by the sum of:
117.10 	(i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
117.11 	(ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue 
117.12 	Code; less
117.13 	(iii) the lesser of (A) the sum of the value of qualified small business property 
117.14 	under subdivision 9, and the value of qualified farm property under subdivision 10, or 
117.15 	(B) $4,000,000; less
117.16 	(2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue 
117.17 	Code; and less
117.18 	(3) the federal credit allowed under section 2010 of the Internal Revenue Code.
117.19 	(c) For purposes of this subdivision, "Internal Revenue Code" means the Internal 
117.20 	Revenue Code of 1986, as amended through December 31, 2000.

117.21 	EFFECTIVE DATE. This section is effective for decedents dying after December 
117.22 	31, 2012.

117.23 	Sec. 4. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision 
117.24 	to read:
117.25 		Subd. 1c.Nonresident decedent tax credit. (a) The estate of a nonresident 
117.26 	decedent that is subject to tax under this chapter on the value of Minnesota situs property 
117.27 	held in a pass-through entity is allowed a credit against the tax due under this section 
117.28 	equal to the lesser of:
117.29 	(1) the amount of estate or inheritance tax paid to another state that is attributable to 
117.30 	the Minnesota situs property held in the pass-through entity; or
117.31 	(2) the amount of tax paid under this section attributable to the Minnesota situs 
117.32 	property held in the pass-through entity.
117.33 	(b) The amount of tax attributable to the Minnesota situs property held in the 
117.34 	pass-through entity must be determined by the increase in the estate or inheritance tax that 
118.1 	results from including the market value of the property in the estate or treating the value 
118.2 	as a taxable inheritance to the recipient of the property.

118.3 	EFFECTIVE DATE. This section is effective for decedents dying after December 
118.4 	31, 2012.

118.5 	Sec. 5. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read:
118.6 		Subd. 8.Definitions. (a) For purposes of this section, the following terms have the 
118.7 	meanings given in this subdivision.
118.8 	(b) "Family member" means a family member as defined in section 2032A(e)(2) of 
118.9 	the Internal Revenue Code, or a trust whose present beneficiaries are all family members 
118.10 	as defined in section 2032A(e)(2) of the Internal Revenue Code.
118.11 	(c) "Qualified heir" means a family member who acquired qualified property from
118.12 	 upon the death of the decedent and satisfies the requirement under subdivision 9, clause 
118.13 	(6) (7), or subdivision 10, clause (4) (5), for the property.
118.14 	(d) "Qualified property" means qualified small business property under subdivision 
118.15 	9 and qualified farm property under subdivision 10.

118.16 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
118.17 	dying after June 30, 2011.

118.18 	Sec. 6. Minnesota Statutes 2012, section 291.03, subdivision 9, is amended to read:
118.19 		Subd. 9.Qualified small business property. Property satisfying all of the following 
118.20 	requirements is qualified small business property:
118.21 	(1) The value of the property was included in the federal adjusted taxable estate.
118.22 	(2) The property consists of the assets of a trade or business or shares of stock or 
118.23 	other ownership interests in a corporation or other entity engaged in a trade or business. 
118.24 	The decedent or the decedent's spouse must have materially participated in the trade or 
118.25 	business within the meaning of section 469 of the Internal Revenue Code during the 
118.26 	taxable year that ended before the date of the decedent's death. Shares of stock in a 
118.27 	corporation or an ownership interest in another type of entity do not qualify under this 
118.28 	subdivision if the shares or ownership interests are traded on a public stock exchange at 
118.29 	any time during the three-year period ending on the decedent's date of death. For purposes 
118.30 	of this subdivision, an ownership interest includes the interest the decedent is deemed to 
118.31 	own under sections 2036, 2037, and 2038 of the Internal Revenue Code.
118.32 	(3) During the taxable year that ended before the decedent's death, the trade or 
118.33 	business must not have been a passive activity within the meaning of section 469(c) of the 
119.1 	Internal Revenue Code, and the decedent or the decedent's spouse must have materially 
119.2 	participated in the trade or business within the meaning of section 469(h) of the Internal 
119.3 	Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other 
119.4 	provision provided by United States Treasury Department regulation that substitutes 
119.5 	material participation in prior taxable years for material participation in the taxable year 
119.6 	that ended before the decedent's death.
119.7 	(4) The gross annual sales of the trade or business were $10,000,000 or less for the 
119.8 	last taxable year that ended before the date of the death of the decedent.
119.9 	(4) (5) The property does not consist of cash or, cash equivalents, publicly traded 
119.10 	securities, or assets not used in the operation of the trade or business. For property 
119.11 	consisting of shares of stock or other ownership interests in an entity, the amount value of 
119.12 	cash or, cash equivalents, publicly traded securities, or assets not used in the operation of 
119.13 	the trade or business held by the corporation or other entity must be deducted from the 
119.14 	value of the property qualifying under this subdivision in proportion to the decedent's 
119.15 	share of ownership of the entity on the date of death.
119.16 	(5) (6) The decedent continuously owned the property, including property the 
119.17 	decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue 
119.18 	Code, for the three-year period ending on the date of death of the decedent. In the case of 
119.19 	a sole proprietor, if the property replaced similar property within the three-year period, 
119.20 	the replacement property will be treated as having been owned for the three-year period 
119.21 	ending on the date of death of the decedent.
119.22 	(6) A family member continuously uses the property in the operation of the trade or 
119.23 	business for three years following the date of death of the decedent.
119.24 	(7) For three years following the date of death of the decedent, the trade or business 
119.25 	is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code, 
119.26 	and a family member materially participates in the operation of the trade or business within 
119.27 	the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3) 
119.28 	of the Internal Revenue Code and any other provision provided by United States Treasury 
119.29 	Department regulation that substitutes material participation in prior taxable years for 
119.30 	material participation in the three years following the date of death of the decedent.
119.31 	(8) The estate and the qualified heir elect to treat the property as qualified small 
119.32 	business property and agree, in the form prescribed by the commissioner, to pay the 
119.33 	recapture tax under subdivision 11, if applicable.

119.34 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
119.35 	dying after June 30, 2011.

120.1 	Sec. 7. Minnesota Statutes 2012, section 291.03, subdivision 10, is amended to read:
120.2 		Subd. 10.Qualified farm property. Property satisfying all of the following 
120.3 	requirements is qualified farm property:
120.4 	(1) The value of the property was included in the federal adjusted taxable estate.
120.5 	(2) The property consists of a farm meeting the requirements of agricultural land as 
120.6 	defined in section 500.24, subdivision 2, paragraph (g), and is owned by a person or entity 
120.7 	that is not excluded from owning agricultural land by section 500.24, and was classified 
120.8 	for property tax purposes as the homestead of the decedent or the decedent's spouse or 
120.9 	both under section 273.124, and as class 2a property under section 273.13, subdivision 23.
120.10 	(3)  For property taxes payable in the taxable year of decedent's death, the property is 
120.11 	classified as class 2a property under section 273.13, subdivision 23, and is classified as 
120.12 	agricultural homestead, agricultural relative homestead, or special agricultural homestead 
120.13 	under section 273.124.
120.14 	(4) The decedent continuously owned the property, including property the decedent 
120.15 	is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for 
120.16 	the three-year period ending on the date of death of the decedent either by ownership of 
120.17 	the agricultural land or pursuant to holding an interest in an entity that is not excluded 
120.18 	from owning agricultural land under section 500.24.
120.19 	(4) A family member continuously uses the property in the operation of the trade or 
120.20 	business (5) The property is classified for property tax purposes as class 2a property under 
120.21 	section 273.13, subdivision 23, for three years following the date of death of the decedent.
120.22 	(5) (6)  The estate and the qualified heir elect to treat the property as qualified farm 
120.23 	property and agree, in a form prescribed by the commissioner, to pay the recapture tax 
120.24 	under subdivision 11, if applicable.

120.25 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
120.26 	dying after June 30, 2011.

120.27 	Sec. 8. Minnesota Statutes 2012, section 291.03, subdivision 11, is amended to read:
120.28 		Subd. 11.Recapture tax. (a) If, within three years after the decedent's death and 
120.29 	before the death of the qualified heir, the qualified heir disposes of any interest in the 
120.30 	qualified property, other than by a disposition to a family member, or a family member 
120.31 	ceases to use the qualified property which was acquired or passed from the decedent
120.32 	 satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional 
120.33 	estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir 
120.34 	replaces qualified small business property excluded under subdivision 9 with similar 
121.1 	property, then the qualified heir will not be treated as having disposed of an interest in the 
121.2 	qualified property.
121.3 	(b) The amount of the additional tax equals the amount of the exclusion claimed by 
121.4 	the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
121.5 	(c) The additional tax under this subdivision is due on the day which is six months 
121.6 	after the date of the disposition or cessation in paragraph (a).

121.7 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
121.8 	dying after June 30, 2011.

121.9 	Sec. 9. [292.16] DEFINITIONS.
121.10 	(a) For purposes of this chapter, the following definitions apply.
121.11 	(b) The definitions of terms defined in section 291.005 apply.
121.12 	(c) "Resident" has the meaning given in section 290.01.
121.13 	(d) "Taxable gifts" means:
121.14 	(1) the transfers by gift which are included in taxable gifts for federal gift tax 
121.15 	purposes under the following sections of the Internal Revenue Code:
121.16 	(i) section 2503;
121.17 	(ii) sections 2511 to 2514; and
121.18 	(iii) sections 2516 to 2519; less
121.19 	(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.

121.20 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
121.21 	30, 2013.

121.22 	Sec. 10. [292.17] GIFT TAX.
121.23 		Subdivision 1.Imposition. (a) A tax is imposed on the transfer of property by gift 
121.24 	by any individual resident or nonresident in an amount equal to ten percent of the amount 
121.25 	of the taxable gift.
121.26 	(b) The donor is liable for payment of the tax. If the gift tax is not paid when due, 
121.27 	the donee of any gift is personally liable for the tax to the extent of the value of the gift.
121.28 		Subd. 2.Lifetime credit. A credit is allowed against the tax imposed under this 
121.29 	section equal to $100,000. This credit applies to the cumulative amount of taxable gifts 
121.30 	made by the donor during the donor's lifetime.
121.31 		Subd. 3.Out-of-state gifts. Taxable gifts exclude the transfer of:
121.32 	(1) real property located outside of this state;
122.1 	(2) tangible personal property that was normally kept at a location outside of the 
122.2 	state on the date the gift was executed; and
122.3 	(3) intangible personal property made by an individual who is not a resident.

122.4 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
122.5 	30, 2013.

122.6 	Sec. 11. [292.18] RETURNS.
122.7 	(a) Any individual who makes a taxable gift during the taxable year shall file a gift 
122.8 	tax return in the form and manner prescribed by the commissioner.
122.9 	(b) If the donor dies before filing the return, the executor of the donor's will or 
122.10 	the administrator of the donor's estate shall file the return. If the donor becomes legally 
122.11 	incompetent before filing the return, the guardian or conservator shall file the return.
122.12 	(c) The return must include:
122.13 	(1) each gift made during the calendar year which is to be included in computing the 
122.14 	taxable gifts;
122.15 	(2) the deductions claimed and allowable under section 292.16, paragraph (d), 
122.16 	clause (2);
122.17 	(3) a description of the gift, and the donee's name, address, and Social Security 
122.18 	number;
122.19 	(4) the fair market value of gifts not made in money; and
122.20 	(5) any other information the commissioner requires to administer the gift tax.

122.21 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
122.22 	30, 2013.

122.23 	Sec. 12. [292.19] FILING REQUIREMENTS.
122.24 	Gift tax returns must be filed by the April 15 following the close of the calendar 
122.25 	year, except if a gift is made during the calendar year in which the donor dies, the return 
122.26 	for the donor must be filed by the last date, including extensions, for filing the gift tax 
122.27 	return for federal gift tax purposes for the donor.

122.28 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
122.29 	30, 2013.

122.30 	Sec. 13. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
122.31 	The commissioner may require the donor or the donee to show the property subject to 
122.32 	the tax under section 292.17 to the commissioner upon demand and may employ a suitable 
123.1 	person to appraise the property. The donor shall submit a declaration, in a form prescribed 
123.2 	by the commissioner and including any certification required by the commissioner, that the 
123.3 	property shown by the donor on the gift tax return includes all of the property transferred by 
123.4 	gift for the calendar year and not deductible under section 292.16, paragraph (d), clause (2).

123.5 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
123.6 	30, 2013.

123.7 	Sec. 14. [292.21] ADMINISTRATIVE PROVISIONS.
123.8 		Subdivision 1.Payment of tax; penalty for late payment. The tax imposed under 
123.9 	section 292.17 is due and payable to the commissioner by the April 15 following the close 
123.10 	of the calendar year during which the gift was made. The return required under section 
123.11 	292.19 must be included with the payment. If a taxable gift is made during the calendar 
123.12 	year in which the donor dies, the due date is the last date, including extensions, for filing 
123.13 	the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the 
123.14 	tax due within the time specified under this section, a penalty applies equal to ten percent 
123.15 	of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty 
123.16 	bear interest at the rate under section 270C.40 from the due date of the return.
123.17 		Subd. 2.Extensions. The commissioner may, for good cause, extend the time for 
123.18 	filing a gift tax return, if a written request is filed with a tentative return accompanied by a 
123.19 	payment of the tax, which is estimated in the tentative return, on or before the last day for 
123.20 	filing the return. Any person to whom an extension is granted must pay, in addition to the 
123.21 	tax, interest at the rate under section 270C.40 from the date on which the tax would have 
123.22 	been due without the extension.
123.23 		Subd. 3.Changes in federal gift tax. If the amount of a taxpayer's taxable gifts 
123.24 	for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any 
123.25 	calendar year, is changed or corrected by the Internal Revenue Service or other officer 
123.26 	of the United States or other competent authority, the taxpayer shall report the change or 
123.27 	correction in federal taxable gifts within 180 days after the final determination of the change 
123.28 	or correction, and concede the accuracy of the determination or provide a letter detailing 
123.29 	how the federal determination is incorrect or does not change the Minnesota gift tax. Any 
123.30 	taxpayer filing an amended federal gift tax return shall also file within 180 days an amended 
123.31 	return under this chapter and shall include any information the commissioner requires. The 
123.32 	time for filing the report or amended return may be extended by the commissioner upon due 
123.33 	cause shown. Notwithstanding any limitation of time in this chapter, if, upon examination, 
123.34 	the commissioner finds that the taxpayer is liable for the payment of an additional tax, the 
123.35 	commissioner shall, within a reasonable time from the receipt of the report or amended 
124.1 	return, notify the taxpayer of the amount of additional tax, together with interest computed 
124.2 	at the rate under section 270C.40 from the date when the original tax was due and payable. 
124.3 	Within 30 days of the mailing of the notice, the taxpayer shall pay the commissioner the 
124.4 	amount of the additional tax and interest. If, upon examination of the report or amended 
124.5 	return and related information, the commissioner finds that the taxpayer has overpaid the 
124.6 	tax due the state, the commissioner shall refund the overpayment to the taxpayer.
124.7 		Subd. 4.Application of federal rules. In administering the tax under this chapter, 
124.8 	the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal 
124.9 	Revenue Code. The words "secretary or his delegate," as used in those sections of the 
124.10 	Internal Revenue Code, mean the commissioner.

124.11 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
124.12 	30, 2013.

124.13 	Sec. 15. [292.22] CREDIT AGAINST ESTATE TAX.
124.14 	A credit is allowed against the estate tax imposed under chapter 291 in the amount 
124.15 	of any tax imposed and paid under this chapter for a gift includable in the Minnesota 
124.16 	adjusted taxable estate of the donor under section 291.005.

124.17 	EFFECTIVE DATE. This section is effective for taxable gifts made after June 
124.18 	30, 2013.

124.19 	ARTICLE 8
124.20 	SALES AND USE TAX; LOCAL SALES TAXES

124.21 	Section 1. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
124.22 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
124.23 	to, each of the transactions listed in this subdivision.
124.24 	(b) Sale and purchase include:
124.25 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
124.26 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
124.27 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
124.28 	in money or by exchange or barter, tangible personal property, other than a manufactured 
124.29 	home used for residential purposes for a continuous period of 30 days or more.
124.30 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
124.31 	tangible personal property for a consideration for consumers who furnish either directly or 
124.32 	indirectly the materials used in the production, fabrication, printing, or processing.
125.1 	(d) Sale and purchase include the preparing for a consideration of food. 
125.2 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
125.3 	to, the following:
125.4 	(1) prepared food sold by the retailer;
125.5 	(2) soft drinks;
125.6 	(3) candy;
125.7 	(4) dietary supplements; and
125.8 	(5) all food sold through vending machines.
125.9 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
125.10 	gas, water, or steam for use or consumption within this state.
125.11 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
125.12 	computer software whether delivered electronically, by load and leave, or otherwise.
125.13 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
125.14 	services:
125.15 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
125.16 	events, including seat licenses, the rental of box seats, suites, sky boxes, and similar 
125.17 	facilities in stadiums and arenas and the making available of amusement devices, tanning 
125.18 	facilities, reducing salons, steam baths, Turkish baths, health clubs, and spas or athletic 
125.19 	facilities;
125.20 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
125.21 	motel, or trailer camp, including furnishing the guest of the facility with access to 
125.22 	telecommunication services, and the granting of any similar license to use real property in 
125.23 	a specific facility, other than the renting or leasing of it for a continuous period of 30 days 
125.24 	or more under an enforceable written agreement that may not be terminated without prior 
125.25 	notice and including accommodations intermediary services provided in connection with 
125.26 	other services provided under this clause;
125.27 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
125.28 	periodic basis, except for parking at a meter;
125.29 	(4) the granting of membership in a club, association, or other organization if:
125.30 	(i) the club, association, or other organization makes available for the use of its 
125.31 	members sports and athletic facilities, without regard to whether a separate charge is 
125.32 	assessed for use of the facilities; and
125.33 	(ii) use of the sports and athletic facility is not made available to the general public 
125.34 	on the same basis as it is made available to members.
125.35 	Granting of membership means both onetime initiation fees and periodic membership 
125.36 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
126.1 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
126.2 	swimming pools; and other similar athletic or sports facilities;
126.3 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
126.4 	material used in road construction; and delivery of concrete block by a third party if the 
126.5 	delivery would be subject to the sales tax if provided by the seller of the concrete block; and
126.6 	(6) services as provided in this clause:
126.7 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
126.8 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
126.9 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
126.10 	include services provided by coin operated facilities operated by the customer;
126.11 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
126.12 	provided by coin operated facilities operated by the customer, and rustproofing, 
126.13 	undercoating, and towing of motor vehicles;
126.14 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
126.15 	pest control and exterminating services;
126.16 	(iv) detective, security, burglar, fire alarm, and armored car services; but not including 
126.17 	services performed within the jurisdiction they serve by off-duty licensed peace officers as 
126.18 	defined in section 626.84, subdivision 1, or services provided by a nonprofit organization 
126.19 	for monitoring and electronic surveillance of persons placed on in-home detention 
126.20 	pursuant to court order or under the direction of the Minnesota Department of Corrections;
126.21 	(v) pet grooming services;
126.22 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
126.23 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
126.24 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
126.25 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
126.26 	public utility lines. Services performed under a construction contract for the installation of 
126.27 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
126.28 	(vii) massages, except when provided by a licensed health care facility or 
126.29 	professional or upon written referral from a licensed health care facility or professional for 
126.30 	treatment of illness, injury, or disease; and
126.31 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
126.32 	other similar arrangements, but excluding veterinary and horse boarding services.
126.33 	In applying the provisions of this chapter, the terms "tangible personal property" 
126.34 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
126.35 	and the provision of these taxable services, unless specifically provided otherwise. 
126.36 	Services performed by an employee for an employer are not taxable. Services performed 
127.1 	by a partnership or association for another partnership or association are not taxable if 
127.2 	one of the entities owns or controls more than 80 percent of the voting power of the 
127.3 	equity interest in the other entity. Services performed between members of an affiliated 
127.4 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
127.5 	group of corporations" means those entities that would be classified as members of an 
127.6 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
127.7 	the exclusions in section 1504(b).
127.8 	For purposes of clause (5), "road construction" means construction of (1) public 
127.9 	roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 
127.10 	metropolitan area up to the point of the emergency response location sign.
127.11 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
127.12 	personal property or taxable services by the United States or any of its agencies or 
127.13 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
127.14 	subdivisions.
127.15 	(i) A sale and a purchase includes the furnishing for a consideration of 
127.16 	telecommunications services, ancillary services associated with telecommunication 
127.17 	services, cable television services, and direct satellite services. Telecommunication 
127.18 	services include, but are not limited to, the following services, as defined in section 
127.19 	297A.669: air-to-ground radiotelephone service, mobile telecommunication service, 
127.20 	postpaid calling service, prepaid calling service, prepaid wireless calling service, and 
127.21 	private communication services. The services in this paragraph are taxed to the extent 
127.22 	allowed under federal law.
127.23 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
127.24 	the installation charges would be subject to the sales tax if the installation were provided 
127.25 	by the seller of the item being installed.
127.26 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
127.27 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
127.28 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
127.29 	59B.02, subdivision 11.

127.30 	EFFECTIVE DATE. This section is effective for sales made after June 30, 2013.

127.31 	Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
127.32 		Subd. 4.Retail sale. (a) A "retail sale" means any sale, lease, or rental for any 
127.33 	purpose, other than resale, sublease, or subrent of items by the purchaser in the normal 
127.34 	course of business as defined in subdivision 21.
128.1 	(b) A sale of property used by the owner only by leasing it to others or by holding it 
128.2 	in an effort to lease it, and put to no use by the owner other than resale after the lease or 
128.3 	effort to lease, is a sale of property for resale.
128.4 	(c) A sale of master computer software that is purchased and used to make copies for 
128.5 	sale or lease is a sale of property for resale.
128.6 	(d) A sale of building materials, supplies, and equipment to owners, contractors, 
128.7 	subcontractors, or builders for the erection of buildings or the alteration, repair, or 
128.8 	improvement of real property is a retail sale in whatever quantity sold, whether the sale is 
128.9 	for purposes of resale in the form of real property or otherwise.
128.10 	(e) A sale of carpeting, linoleum, or similar floor covering to a person who provides 
128.11 	for installation of the floor covering is a retail sale and not a sale for resale since a sale of 
128.12 	floor covering which includes installation is a contract for the improvement of real property.
128.13 	(f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides 
128.14 	for installation of the items is a retail sale and not a sale for resale since a sale of 
128.15 	shrubbery, plants, sod, trees, and similar items that includes installation is a contract for 
128.16 	the improvement of real property.
128.17 	(g) A sale of tangible personal property that is awarded as prizes is a retail sale and 
128.18 	is not considered a sale of property for resale.
128.19 	(h) A sale of tangible personal property utilized or employed in the furnishing or 
128.20 	providing of services under subdivision 3, paragraph (g), clause (1), including, but not 
128.21 	limited to, property given as promotional items, is a retail sale and is not considered a 
128.22 	sale of property for resale.
128.23 	(i) A sale of tangible personal property used in conducting lawful gambling under 
128.24 	chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property 
128.25 	given as promotional items, is a retail sale and is not considered a sale of property for resale.
128.26 	(j) Except as otherwise provided in this paragraph, a sale of machines, equipment, 
128.27 	or devices that are used to furnish, provide, or dispense goods or services, including, 
128.28 	but not limited to, coin-operated devices, is a retail sale and is not considered a sale of 
128.29 	property for resale. A sale of coin-operated entertainment and amusement machines, 
128.30 	including, but not limited to, fortune-telling machines, cranes, foosball and pool tables, 
128.31 	video and pinball games, batting cages, rides, photo or video booths, and jukeboxes is a 
128.32 	sale of property for resale.
128.33 	(k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease 
128.34 	payment becomes due under the terms of the agreement or the trade practices of the lessor 
128.35 	or; (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, subdivision 
128.36 	11, but excluding vehicles with a manufacturer's gross vehicle weight rating greater than 
129.1 	10,000 pounds and rentals of vehicles for not more than 28 days, at the time the lease is 
129.2 	executed; or (3) for rent-to-own or lease-to-own used vehicles where the lessee may 
129.3 	purchase or return the vehicle at any time without penalty, at the time each payment is 
129.4 	made under the terms of the agreement.
129.5 	(l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of 
129.6 	title or possession of the tangible personal property.
129.7 	(m) A sale of a bundled transaction in which one or more of the products included 
129.8 	in the bundle is a taxable product is a retail sale, except that if one of the products 
129.9 	is a telecommunication service, ancillary service, Internet access, or audio or video 
129.10 	programming service, and the seller has maintained books and records identifying through 
129.11 	reasonable and verifiable standards the portions of the price that are attributable to the 
129.12 	distinct and separately identifiable products, then the products are not considered part of a 
129.13 	bundled transaction. For purposes of this paragraph:
129.14 	(1) the books and records maintained by the seller must be maintained in the regular 
129.15 	course of business, and do not include books and records created and maintained by the 
129.16 	seller primarily for tax purposes;
129.17 	(2) books and records maintained in the regular course of business include, but are 
129.18 	not limited to, financial statements, general ledgers, invoicing and billing systems and 
129.19 	reports, and reports for regulatory tariffs and other regulatory matters; and
129.20 	(3) books and records are maintained primarily for tax purposes when the books 
129.21 	and records identify taxable and nontaxable portions of the price, but the seller maintains 
129.22 	other books and records that identify different prices attributable to the distinct products 
129.23 	included in the same bundled transaction.
129.24 	(n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or 
129.25 	body shop business is a retail sale and the sales tax is imposed on the gross receipts from the 
129.26 	retail sale of the paint and materials. The motor vehicle repair or body shop that purchases 
129.27 	motor vehicle repair paint and motor vehicle repair materials for resale must either:
129.28 	(1) separately state each item of paint and each item of materials, and the sales price 
129.29 	of each, on the invoice to the purchaser; or
129.30 	(2) in order to calculate the sales price of the paint and materials, use a method 
129.31 	which estimates the amount and monetary value of the paint and materials used in 
129.32 	the repair of the motor vehicle by multiplying the number of labor hours by a rate of 
129.33 	consideration for the paint and materials used in the repair of the motor vehicle following 
129.34 	industry standard practices that fairly calculate the gross receipts from the retail sale of 
129.35 	the motor vehicle repair paint and motor vehicle repair materials. An industry standard 
129.36 	practice fairly calculates the gross receipts if the sales price of the paint and materials used 
130.1 	or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid 
130.2 	by the motor vehicle repair or body shop business. Under this clause, the invoice must 
130.3 	either separately state the "paint and materials" as a single taxable item, or separately state 
130.4 	"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to 
130.5 	wholesale transactions at an auto auction facility.
130.6 	(o) A payment made to a cooperative electric association or public utility as a 
130.7 	contribution in aid of construction is a contract for improvement to real property and 
130.8 	is not a retail sale.

130.9 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
130.10 	June 30, 2013.

130.11 	Sec. 3. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision 
130.12 	to read:
130.13 		Subd. 49.Motor vehicle repair paint and motor vehicle repair materials. "Motor 
130.14 	vehicle repair paint" means a substance composed of solid matter suspended in a liquid 
130.15 	medium and applied as a protective or decorative coating to the surface of a motor vehicle in 
130.16 	order to restore the motor vehicle to its original condition, and includes primer, body paint, 
130.17 	clear coat, and paint thinner used to paint motor vehicles, as defined in section 297B.01. 
130.18 	"Motor vehicle repair materials" means items, other than motor vehicle repair paint 
130.19 	or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed in 
130.20 	repairing the motor vehicle at retail, and include abrasives, battery water, body filler or 
130.21 	putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing 
130.22 	compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape, 
130.23 	oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads, 
130.24 	sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor 
130.25 	vehicle repair materials do not include items that are not used directly on the motor vehicle, 
130.26 	such as floor dry that is used to clean the shop, or cleaning compounds and rags that are 
130.27 	used to clean tools, equipment, or the shop and are not used to clean the motor vehicle.

130.28 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
130.29 	June 30, 2013.

130.30 	Sec. 4. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read:
130.31 		Subdivision 1.Tax imposed. (a) A tax is imposed on the lease or rental in this 
130.32 	state for not more than 28 days of a passenger automobile as defined in section 168.002, 
130.33 	subdivision 24, a van as defined in section 168.002, subdivision 40, or a pickup truck as 
131.1 	defined in section 168.002, subdivision 26. The rate of tax is 6.2 9.2 percent of the sales 
131.2 	price. The tax applies whether or not the vehicle is licensed in the state.
131.3 	(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit 
131.4 	corporation or similar entity, consisting of members who pay the organization for the 
131.5 	use of a motor vehicle, if the organization:
131.6 	(1) owns or leases a fleet of vehicles of the type subject to the tax under paragraph (a) 
131.7 	that are available to its members for use, priced on the basis of intervals of one hour or less;
131.8 	(2) parks its vehicles at unstaffed, self-service locations that are accessible to its 
131.9 	members at any time; and
131.10 	(3) maintains its vehicles, insures its vehicles on behalf of its members, and 
131.11 	purchases fuel for its fleet.

131.12 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
131.13 	June 30, 2013.

131.14 	Sec. 5. Minnesota Statutes 2012, section 297A.64, subdivision 2, is amended to read:
131.15 		Subd. 2.Fee imposed. (a) A fee equal to five percent of the sales price is imposed 
131.16 	on leases or rentals of vehicles subject to the tax under subdivision 1, paragraph (a). The 
131.17 	lessor on the invoice to the customer may designate the fee as "a fee imposed by the State 
131.18 	of Minnesota for the registration of rental cars."
131.19 	(b) The provisions of this subdivision do not apply to the vehicles of a nonprofit 
131.20 	corporation or similar entity, consisting of individual or group members who pay the 
131.21 	organization for the use of a motor vehicle, if the organization:
131.22 	(1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1 
131.23 	that are available to its members for use, priced on the basis of intervals of one hour or less;
131.24 	(2) parks its vehicles at unstaffed, self-service locations that are accessible at any 
131.25 	time of the day;
131.26 	(3) maintains its vehicles, insures its vehicles on behalf of its members, and 
131.27 	purchases fuel for its fleet; and
131.28 	(4) does not charge usage rates that decline on a per unit basis, whether specified 
131.29 	based on distance or time exempt from the tax imposed under subdivision 1, paragraph (b).

131.30 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
131.31 	June 30, 2013.

131.32 	Sec. 6. Minnesota Statutes 2012, section 297A.66, is amended by adding a subdivision 
131.33 	to read:
132.1 		Subd. 4a.Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a), 
132.2 	means a person, whether an independent contractor or other representative, who directly 
132.3 	or indirectly solicits business for the retailer.
132.4 	(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement 
132.5 	with a resident under which the resident, for a commission or other consideration, directly 
132.6 	or indirectly refers potential customers, whether by a link on an Internet Web site, or 
132.7 	otherwise, to the seller. This paragraph only applies if the total gross receipts are at least 
132.8 	$10,000 in the 12-month period ending on the last day of the most recent calendar quarter 
132.9 	before the calendar quarter in which the sale is made. For purposes of this paragraph, 
132.10 	gross receipts means receipts from sales to customers located in the state who were 
132.11 	referred to the retailer by all residents with this type of agreement with the retailer.
132.12 	(c) The presumption under paragraph (b) may be rebutted by proof that the resident 
132.13 	with whom the seller has an agreement did not engage in any solicitation in the state 
132.14 	on behalf of the retailer that would satisfy the nexus requirement of the United States 
132.15 	Constitution during the 12-month period in question. Nothing in this section shall be 
132.16 	construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other 
132.17 	representative for purposes of subdivision 1, paragraph (a).
132.18 	(d) For purposes of this paragraph, "resident" includes an individual who is a 
132.19 	resident of this state, as defined in section 290.01, or a business that owns tangible 
132.20 	personal property located in this state or has one or more employees providing services for 
132.21 	the business in this state.
132.22 	(e) This subdivision does not apply to chapter 290 and does not expand or contract 
132.23 	the jurisdiction to tax a trade or business under chapter 290.

132.24 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
132.25 	June 30, 2013.

132.26 	Sec. 7. Minnesota Statutes 2012, section 297A.668, is amended by adding a 
132.27 	subdivision to read:
132.28 		Subd. 6a.Multiple points of use. (a) Notwithstanding the provisions of subdivisions 
132.29 	2 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the 
132.30 	time of its purchase of a digital good, computer software delivered electronically, or a 
132.31 	service that the digital good, computer software delivered electronically, or service will be 
132.32 	concurrently available for use in more than one jurisdiction shall deliver to the seller in 
132.33 	conjunction with its purchase a multiple points of use exemption certificate disclosing 
132.34 	this fact.
133.1 	(b) Upon receipt of the multiple points of use certificate, the seller is relieved of the 
133.2 	obligation to collect, pay, or remit the applicable tax and the purchaser is obligated to 
133.3 	collect, pay, or remit the applicable tax on a direct pay basis.
133.4 	(c) A purchaser delivering the multiple points of use exemption certificate may use 
133.5 	any reasonable, but consistent and uniform, method of apportionment that is supported by 
133.6 	the purchaser's business records as they exist at the time of the consummation of the sale.
133.7 	(d) The multiple points of use exemption certificate remains in effect for all future 
133.8 	sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent 
133.9 	sale's specific apportionment that is governed by the principle of paragraph (c) and the 
133.10 	facts existing at the time of the sale.
133.11 	(e) A holder of a direct pay permit is not required to deliver a multiple points of use 
133.12 	exemption certificate to the seller. A direct pay permit holder shall follow the provisions 
133.13 	of paragraph (c) in apportioning the tax due on a digital good, computer software delivered 
133.14 	electronically, or a service that will be concurrently available for use in more than one 
133.15 	jurisdiction.

133.16 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
133.17 	June 30, 2013.

133.18 	Sec. 8. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read:
133.19 		Subd. 7.Drugs; medical devices. (a) Sales of the following drugs and medical 
133.20 	devices for human use are exempt:
133.21 	(1) drugs, including over-the-counter drugs;
133.22 	(2) single-use finger-pricking devices for the extraction of blood and other single-use 
133.23 	devices and single-use diagnostic agents used in diagnosing, monitoring, or treating 
133.24 	diabetes;
133.25 	(3) insulin and medical oxygen for human use, regardless of whether prescribed 
133.26 	or sold over the counter;
133.27 	(4) prosthetic devices;
133.28 	(5) durable medical equipment for home use only;
133.29 	(6) mobility enhancing equipment;
133.30 	(7) prescription corrective eyeglasses; and
133.31 	(8) kidney dialysis equipment, including repair and replacement parts.
133.32 	(b) Items purchased in transactions covered by:
133.33 	(1) Medicare as defined under title XVIII of the Social Security Act, United States 
133.34 	Code, title 42, sections 1395, et seq.; or
134.1 	(2) Medicaid as defined under title XIX of the Social Security Act, United States 
134.2 	Code, title 42, sections 1396, et seq.
134.3 	(b) (c) For purposes of this subdivision:
134.4 	(1) "Drug" means a compound, substance, or preparation, and any component of 
134.5 	a compound, substance, or preparation, other than food and food ingredients, dietary 
134.6 	supplements, or alcoholic beverages that is:
134.7 	(i) recognized in the official United States Pharmacopoeia, official Homeopathic 
134.8 	Pharmacopoeia of the United States, or official National Formulary, and supplement 
134.9 	to any of them;
134.10 	(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention 
134.11 	of disease; or
134.12 	(iii) intended to affect the structure or any function of the body.
134.13 	(2) "Durable medical equipment" means equipment, including repair and 
134.14 	replacement parts and all accessories and supplies, including single patient use items 
134.15 	required for the effective use of the durable medical equipment device, but not including 
134.16 	mobility enhancing equipment, that:
134.17 	(i) can withstand repeated use;
134.18 	(ii) is primarily and customarily used to serve a medical purpose;
134.19 	(iii) generally is not useful to a person in the absence of illness or injury; and
134.20 	(iv) is not worn in or on the body.
134.21 	For purposes of this clause, "repair and replacement parts" includes all components 
134.22 	or attachments used in conjunction with the durable medical equipment, but does not 
134.23 	include including repair and replacement parts which are for single patient use only.
134.24 	(3) "Mobility enhancing equipment" means equipment, including repair and 
134.25 	replacement parts, but not including durable medical equipment, that:
134.26 	(i) is primarily and customarily used to provide or increase the ability to move from 
134.27 	one place to another and that is appropriate for use either in a home or a motor vehicle;
134.28 	(ii) is not generally used by persons with normal mobility; and
134.29 	(iii) does not include any motor vehicle or equipment on a motor vehicle normally 
134.30 	provided by a motor vehicle manufacturer.
134.31 	(4) "Over-the-counter drug" means a drug that contains a label that identifies the 
134.32 	product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The 
134.33 	label must include a "drug facts" panel or a statement of the active ingredients with a list of 
134.34 	those ingredients contained in the compound, substance, or preparation. Over-the-counter 
134.35 	drugs do not include grooming and hygiene products, regardless of whether they otherwise 
135.1 	meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions, 
135.2 	shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
135.3 	(5) "Prescribed" and "prescription" means a direction in the form of an order, 
135.4 	formula, or recipe issued in any form of oral, written, electronic, or other means of 
135.5 	transmission by a duly licensed health care professional.
135.6 	(6) "Prosthetic device" means a replacement, corrective, or supportive device, 
135.7 	including repair and replacement parts,  and all necessary accessories, supplies, and items 
135.8 	required for the effective use of the prosthetic device, worn on or in the body to:
135.9 	(i) artificially replace a missing portion of the body;
135.10 	(ii) prevent or correct physical deformity or malfunction; or
135.11 	(iii) support a weak or deformed portion of the body.
135.12 	Prosthetic device does not include corrective eyeglasses.
135.13 	(7) "Kidney dialysis equipment" means equipment that:
135.14 	(i) is used to remove waste products that build up in the blood when the kidneys are 
135.15 	not able to do so on their own; and
135.16 	(ii) can withstand repeated use, including multiple use by a single patient, 
135.17 	notwithstanding the provisions of clause (2).
135.18 	(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of 
135.19 	the item purchased in the transaction is paid for or reimbursed by the federal government 
135.20 	or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private 
135.21 	insurance company administering the Medicare or Medicaid program on behalf of the 
135.22 	federal government or the state of Minnesota, or by a managed care organization for the 
135.23 	benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu 
135.24 	of conventional Medicare or Medicaid coverage pursuant to agreement with the federal 
135.25 	government or the state of Minnesota.

135.26 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
135.27 	June 30, 2013.

135.28 	Sec. 9. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read:
135.29 		Subd. 4.Sales to nonprofit groups. (a) All sales, except those listed in paragraph 
135.30 	(b), to the following "nonprofit organizations" are exempt:
135.31 	(1) a corporation, society, association, foundation, or institution organized and 
135.32 	operated exclusively for charitable, religious, or educational purposes if the item 
135.33 	purchased is used in the performance of charitable, religious, or educational functions; and
135.34 	(2) any senior citizen group or association of groups that:
136.1 	(i) in general limits membership to persons who are either age 55 or older, or 
136.2 	physically disabled;
136.3 	(ii) is organized and operated exclusively for pleasure, recreation, and other 
136.4 	nonprofit purposes, not including housing, no part of the net earnings of which inures to 
136.5 	the benefit of any private shareholders; and
136.6 	(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
136.7 	For purposes of this subdivision, charitable purpose includes the maintenance of a 
136.8 	cemetery owned by a religious organization.
136.9 	(b) This exemption does not apply to the following sales:
136.10 	(1) building, construction, or reconstruction materials purchased by a contractor 
136.11 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
136.12 	guaranteed maximum price covering both labor and materials for use in the construction, 
136.13 	alteration, or repair of a building or facility;
136.14 	(2) construction materials purchased by tax-exempt entities or their contractors to 
136.15 	be used in constructing buildings or facilities that will not be used principally by the 
136.16 	tax-exempt entities; and
136.17 	(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause 
136.18 	(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 
136.19 	297A.67, subdivision 2, except wine purchased by an established religious organization 
136.20 	for sacramental purposes or as allowed under subdivision 9a; and
136.21 	(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except 
136.22 	as provided in paragraph (c).
136.23 	(c) This exemption applies to the leasing of a motor vehicle as defined in section 
136.24 	297B.01, subdivision 11, only if the vehicle is:
136.25 	(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
136.26 	passenger automobile, as defined in section 168.002, if the automobile is designed and 
136.27 	used for carrying more than nine persons including the driver; and
136.28 	(2) intended to be used primarily to transport tangible personal property or 
136.29 	individuals, other than employees, to whom the organization provides service in 
136.30 	performing its charitable, religious, or educational purpose.
136.31 	(d) A limited liability company also qualifies for exemption under this subdivision if 
136.32 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
136.33 	purchased qualify for the exemption.

136.34 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
136.35 	made after June 30, 2012.

137.1 	Sec. 10. Minnesota Statutes 2012, section 297A.70, subdivision 8, is amended to read:
137.2 		Subd. 8.Regionwide Public safety radio communication system systems; 
137.3 	products and services. (a) Products and services including, but not limited to, end user 
137.4 	equipment used for construction, ownership, operation, maintenance, and enhancement 
137.5 	of the backbone system of the regionwide public safety radio communication system 
137.6 	established under sections 403.21 to 403.40, are exempt. For purposes of this subdivision, 
137.7 	backbone system is defined in section 403.21, subdivision 9. This subdivision is effective 
137.8 	for purchases, sales, storage, use, or consumption for use in the first and second phases of 
137.9 	the system, as defined in section 403.21, subdivisions 3, 10, and 11, that portion of the 
137.10 	third phase of the system that is located in the southeast district of the State Patrol and 
137.11 	the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system 
137.12 	that is located in Itasca County.
137.13 	(b) Products and services, including, but not limited to, end-user equipment used 
137.14 	for construction, ownership, operation, maintenance, and enhancement of public safety 
137.15 	radio communication systems not already exempt under paragraph (a), including public 
137.16 	safety radio dispatch centers, are exempt.

137.17 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
137.18 	June 30, 2013.

137.19 	Sec. 11. Minnesota Statutes 2012, section 297A.70, is amended by adding a 
137.20 	subdivision to read:
137.21 		Subd. 9a.Established religious orders. (a) Sales of lodging, prepared food, candy, 
137.22 	soft drinks, and alcoholic beverages at noncatered events between an established religious 
137.23 	order and an affiliated institution of higher education are exempt.
137.24 	(b) For purposes of this subdivision, "established religious order" means an 
137.25 	organization directly or indirectly under the control or supervision of a church or 
137.26 	convention or association of churches, where members of the organization:
137.27 	(1) normally live together as part of a community;
137.28 	(2) make long-term commitments to live under a strict set of moral and spiritual 
137.29 	rules; and
137.30 	(3) work or engage full time in a combination of prayer, religious study, church 
137.31 	reform or renewal, or other religious, educational, or charitable goals of the organization.
137.32 	(c) For purposes of this subdivision, an institution of higher education is "affiliated" 
137.33 	with an established religious order if members of the religious order are represented 
137.34 	on the governing board of the institution of higher education and the two organization 
137.35 	share campus space and common facilities.

138.1 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
138.2 	made after June 30, 2012.

138.3 	Sec. 12. Minnesota Statutes 2012, section 297A.70, is amended by adding a 
138.4 	subdivision to read:
138.5 		Subd. 18.Nursing homes and boarding care homes. (a) All sales, except those 
138.6 	listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding 
138.7 	care home certified as a nursing facility under title 19 of the Social Security Act are 
138.8 	exempt if the facility:
138.9 	(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the 
138.10 	Internal Revenue Code; and
138.11 	(2) is certified to participate in the medical assistance program under title 19 of the 
138.12 	Social Security Act, or certifies to the commissioner that it does not discharge residents 
138.13 	due to the inability to pay.
138.14 	(b) This exemption does not apply to the following sales:
138.15 	(1) building, construction, or reconstruction materials purchased by a contractor 
138.16 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
138.17 	guaranteed maximum price covering both labor and materials for use in the construction, 
138.18 	alteration, or repair of a building or facility;
138.19 	(2) construction materials purchased by tax-exempt entities or their contractors to 
138.20 	be used in constructing buildings or facilities that will not be used principally by the 
138.21 	tax-exempt entities;
138.22 	(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause 
138.23 	(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 
138.24 	297A.67, subdivision 2; and
138.25 	(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except 
138.26 	as provided in paragraph (c).
138.27 	(c) This exemption applies to the leasing of a motor vehicle as defined in section 
138.28 	297B.01, subdivision 11, only if the vehicle is:
138.29 	(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a 
138.30 	passenger automobile, as defined in section 168.002, if the automobile is designed and 
138.31 	used for carrying more than nine persons including the driver; and
138.32 	(2) intended to be used primarily to transport tangible personal property or residents 
138.33 	of the nursing home or boarding care home.

138.34 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
138.35 	June 30, 2013.

139.1 	Sec. 13. Minnesota Statutes 2012, section 297A.71, is amended by adding a 
139.2 	subdivision to read:
139.3 		Subd. 45.Industrial measurement manufacturing and controls facility. (a) 
139.4 	Materials and supplies used or consumed in, capital equipment incorporated into, 
139.5 	fixtures installed in, and privately owned infrastructure in support of the construction, 
139.6 	improvement, or expansion of an industrial measurement manufacturing and controls 
139.7 	facility are exempt if:
139.8 	(1) the total capital investment made at the facility is at least $60,000,000;
139.9 	(2) the facility employs at least 250 full-time equivalent employees that are not 
139.10 	employees currently employed by the company in the state; and
139.11 	(3) the Department of Employment and Economic Development determines that 
139.12 	the expansion, remodeling, or improvement of the facility has a significant impact on 
139.13 	the state economy.
139.14 	(b) The tax must be imposed and collected as if the rate under section 297A.62, 
139.15 	subdivisions 1 and 1a, applied and refunded in the manner provided in section 297A.75, 
139.16 	only after the following criteria are met:
139.17 	(1) a refund may not be issued until the owner of the facility has received 
139.18 	certification from the Department of Employment and Economic Development that the 
139.19 	company meets the requirements in paragraph (a); and
139.20 	(2) to receive the refund, the owner of the industrial measurement manufacturing 
139.21 	and controls facility must initially apply to the Department of Employment and Economic 
139.22 	Development for certification no later than one year from the final completion date of 
139.23 	construction, improvement, or expansion of the industrial measurement manufacturing 
139.24 	and controls facility.

139.25 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
139.26 	June 30, 2013, and before December 31, 2015.

139.27 	Sec. 14. Minnesota Statutes 2012, section 297A.71, is amended by adding a 
139.28 	subdivision to read:
139.29 		Subd. 46.Building materials; resorts and recreational camping areas. Materials 
139.30 	and supplies used or consumed in, and equipment incorporated into, the improvement of 
139.31 	an existing structure located at a resort, as defined in section 157.15, subdivision 11, or 
139.32 	recreational camping area, as defined in section 327.14, are exempt. The tax on purchases 
139.33 	exempt under this provision must be imposed and collected as if the rate under section 
139.34 	297A.62, subdivision 1, applied and then refunded in the manner provided in section 
139.35 	297A.75. For purposes of this subdivision, a structure includes a cabin located on resort 
140.1 	property and any other structure available for use by guests of the resort or recreational 
140.2 	camping area.

140.3 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
140.4 	June 30, 2013.

140.5 	Sec. 15. Minnesota Statutes 2012, section 297A.71, is amended by adding a 
140.6 	subdivision to read:
140.7 		Subd. 47.Biopharmaceutical manufacturing facility. (a) Materials and 
140.8 	supplies used or consumed in, capital equipment incorporated into, and privately 
140.9 	owned infrastructure in support of the construction, improvement, or expansion of a 
140.10 	biopharmaceutical manufacturing facility in the state are exempt if the following criteria 
140.11 	are met:
140.12 	(1) the facility is used for the manufacturing of biologics; 
140.13 	(2) the total capital investment made at the facility exceeds $50,000,000; and
140.14 	(3) the facility creates and maintains at least 190 full-time equivalent positions at the 
140.15 	facility. These positions must be new jobs in Minnesota and not the result of relocating 
140.16 	jobs that currently exist in Minnesota.
140.17 	(b) The tax must be imposed and collected as if the rate under section 297A.62, 
140.18 	subdivision 1, applied, and refunded in the manner provided in section 297A.75.
140.19 	(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing 
140.20 	facility must:
140.21 	(1) initially apply to the Department of Employment and Economic Development 
140.22 	for certification no later than one year from the final completion date of construction, 
140.23 	improvement, or expansion of the facility; and
140.24 	(2) for each year that the owner of the biopharmaceutical manufacturing facility 
140.25 	applies for a refund, the owner must have received written certification from the 
140.26 	Department of Employment and Economic Development that the facility has met the 
140.27 	criteria of paragraph (a).
140.28 	(d) The refund is to be paid annually at a rate of 25 percent of the total allowable 
140.29 	refund payable to date, with the commissioner making annual payments of the remaining 
140.30 	refund until all of the refund has been paid.
140.31 	(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are 
140.32 	interchangeable and mean medical drugs or medicinal preparations produced using 
140.33 	technology that uses biological systems, living organisms or derivatives of living 
140.34 	organisms, to make or modify products or processes for specific use. The medical drugs or 
141.1 	medicinal preparations include but are not limited to proteins, antibodies, nucleic acids, 
141.2 	and vaccines.

141.3 	EFFECTIVE DATE. This section is effective retroactively to investments entered 
141.4 	into and jobs created after December 31, 2012, and effective retroactively for sales and 
141.5 	purchases made after December 31, 2012, and before July 1, 2019.

141.6 	Sec. 16. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
141.7 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the 
141.8 	following exempt items must be imposed and collected as if the sale were taxable and the 
141.9 	rate under section 297A.62, subdivision 1, applied. The exempt items include:
141.10 	(1) capital equipment exempt under section 297A.68, subdivision 5;
141.11 	(2) building materials for an agricultural processing facility exempt under section 
141.12 	297A.71, subdivision 13;
141.13 	(3) building materials for mineral production facilities exempt under section 
141.14 	297A.71, subdivision 14;
141.15 	(4) building materials for correctional facilities under section 297A.71, subdivision 3;
141.16 	(5) building materials used in a residence for disabled veterans exempt under section 
141.17 	297A.71, subdivision 11;
141.18 	(6) elevators and building materials exempt under section 297A.71, subdivision 12;
141.19 	(7) building materials for the Long Lake Conservation Center exempt under section 
141.20 	297A.71, subdivision 17;
141.21 	(8) materials and supplies for qualified low-income housing under section 297A.71, 
141.22 	subdivision 23;
141.23 	(9) materials, supplies, and equipment for municipal electric utility facilities under 
141.24 	section 297A.71, subdivision 35;
141.25 	(10) equipment and materials used for the generation, transmission, and distribution 
141.26 	of electrical energy and an aerial camera package exempt under section 297A.68, 
141.27 	subdivision 37;
141.28 	(11) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, 
141.29 	paragraph (a), clause (10);
141.30 	(12) materials, supplies, and equipment for construction or improvement of projects 
141.31 	and facilities under section 297A.71, subdivision 40;
141.32 	(13) materials, supplies, and equipment for construction or improvement of a meat 
141.33 	processing facility exempt under section 297A.71, subdivision 41;
141.34 	(14) materials, supplies, and equipment for construction, improvement, or 
141.35 	expansion of an aerospace defense manufacturing facility exempt under section 297A.71, 
142.1 	subdivision 42, and construction, expansion, or improvement of an industrial measurement 
142.2 	manufacturing and controls facility under section 297A.71, subdivision 45;
142.3 	(15) enterprise information technology equipment and computer software for use in 
142.4 	a qualified data center exempt under section 297A.68, subdivision 42; and
142.5 	(16) materials, supplies, and equipment for qualifying capital projects under section 
142.6 	297A.71, subdivision 44.;
142.7 	(17) materials, supplies, and equipment for structure improvements at resort and 
142.8 	camping areas under section 297A.71, subdivision 46; and
142.9 	(18) materials, supplies, and equipment for construction, improvement, or expansion 
142.10 	of a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 
142.11 	47.

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

142.13 	Sec. 17. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
142.14 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
142.15 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 
142.16 	must be paid to the applicant. Only the following persons may apply for the refund:
142.17 	(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
142.18 	(2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental 
142.19 	subdivision;
142.20 	(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits 
142.21 	provided in United States Code, title 38, chapter 21;
142.22 	(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead 
142.23 	property;
142.24 	(5) for subdivision 1, clause (8), the owner of the qualified low-income housing 
142.25 	project;
142.26 	(6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or 
142.27 	a joint venture of municipal electric utilities;
142.28 	(7) for subdivision 1, clauses (10), (13), (14), and (15), and (18), the owner of the 
142.29 	qualifying business; and
142.30 	(8) for subdivision 1, clauses (11), (12), and (16), the applicant must be the 
142.31 	governmental entity that owns or contracts for the project or facility.; and
142.32 	(9) for subdivision 1, clause (17), the applicant must be the owner of the resort 
142.33 	or recreational camping facility.

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

143.1 	Sec. 18. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
143.2 		Subd. 3.Application. (a) The application must include sufficient information 
143.3 	to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 
143.4 	subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11), 
143.5 	(12), (13), (14), (15), or (16), (17), or (18), the contractor, subcontractor, or builder must 
143.6 	furnish to the refund applicant a statement including the cost of the exempt items and the 
143.7 	taxes paid on the items unless otherwise specifically provided by this subdivision. The 
143.8 	provisions of sections 289A.40 and 289A.50 apply to refunds under this section.
143.9 	(b) An applicant may not file more than two applications per calendar year for 
143.10 	refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
143.11 	(c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 
143.12 	exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 
143.13 	of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 
143.14 	subdivision 40, must not be filed until after June 30, 2009. Applications for refunds for 
143.15 	purchases of items in section 297A.71, subdivision 47, must not be filed until after June 
143.16 	30, 2016, and only one refund may be filed annually thereafter.

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

143.18 	Sec. 19. Minnesota Statutes 2012, section 297A.815, subdivision 3, is amended to read:
143.19 		Subd. 3.Motor vehicle lease sales tax revenue. (a) For purposes of this 
143.20 	subdivision, "net revenue" means an amount equal to:
143.21 	(1) the revenues, including interest and penalties, collected under this section and 
143.22 	on the leases under section 297A.61, subdivision 4, paragraph (k), clause (3), during 
143.23 	the fiscal year; less
143.24 	(2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal 
143.25 	year 2013 and following fiscal years, $32,000,000.
143.26 	(b) On or before June 30 of each fiscal year, the commissioner of revenue shall 
143.27 	estimate the amount of the revenues and subtraction under paragraph (a) for the current 
143.28 	fiscal year.
143.29 	(c) On or after July 1 of the subsequent fiscal year, the commissioner of management 
143.30 	and budget shall transfer the net revenue as estimated in paragraph (b) from the general 
143.31 	fund, as follows:
143.32 	(1) 50 percent to the greater Minnesota transit account; and
143.33 	(2) 50 percent to the county state-aid highway fund. Notwithstanding any other law 
143.34 	to the contrary, the commissioner of transportation shall allocate the funds transferred 
143.35 	under this clause to the counties in the metropolitan area, as defined in section 473.121, 
144.1 	subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall 
144.2 	receive of such amount the percentage that its population, as defined in section 477A.011, 
144.3 	subdivision 3, estimated or established by July 15 of the year prior to the current calendar 
144.4 	year, bears to the total population of the counties receiving funds under this clause.
144.5 	(d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must 
144.6 	be calculated using the following percentages of the total revenues:
144.7 	(1) for fiscal year 2010, 83.75 percent; and
144.8 	(2) for fiscal year 2011, 93.75 percent.

144.9 	EFFECTIVE DATE. This section is effective for leases entered into after June 
144.10 	30, 2013.

144.11 	Sec. 20. Minnesota Statutes 2012, section 297A.993, subdivision 1, is amended to read:
144.12 		Subdivision 1.Authorization; rates. Notwithstanding section 297A.99, 
144.13 	subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside 
144.14 	the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or 
144.15 	more than one county outside the metropolitan transportation area acting under a joint 
144.16 	powers agreement, may by resolution of the county board, or each of the county boards, 
144.17 	following a public hearing impose (1) a transportation sales tax at a rate of up to one-half 
144.18 	of one percent on retail sales and uses taxable under this chapter, and (2) an excise tax 
144.19 	of $20 per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or 
144.20 	acquired from any person engaged in the business of selling motor vehicles at retail, 
144.21 	occurring within the jurisdiction of the taxing authority. The taxes imposed under this 
144.22 	section are subject to approval by a majority of the voters in each of the counties affected 
144.23 	at a general election who vote on the question to impose the taxes.

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

144.25 	Sec. 21. Minnesota Statutes 2012, section 297A.993, subdivision 2, is amended to read:
144.26 		Subd. 2.Allocation; termination. The proceeds of the taxes must be dedicated 
144.27 	exclusively to: (1) payment of the capital cost of a specific transportation project or 
144.28 	improvement; (2) payments of the costs, which may include both capital and operating 
144.29 	costs, of a specific transit project or improvement; or (3) payment of transit operating 
144.30 	costs. The transportation project or improvement must be designated by the board of the 
144.31 	county, or more than one county acting under a joint powers agreement. Except for taxes 
144.32 	for operating costs of a transit project or improvement, or for transit operations, the taxes 
145.1 	must terminate after the project or improvement has been completed when revenues 
145.2 	raised are sufficient to finance the project.

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

145.4 	Sec. 22. Minnesota Statutes 2012, section 469.190, is amended by adding a subdivision 
145.5 	to read:
145.6 		Subd. 1a.Tax base; locally collected taxes. A tax imposed on the gross receipts 
145.7 	from lodging under this section or under a special law applies to the same base as taxes 
145.8 	collected by the commissioner of revenue under subdivision 7 and section 270C.171.

145.9 	EFFECTIVE DATE. This section is effective the day following final enactment. 
145.10 	In enacting this section, the legislature confirms its original intent in enacting Minnesota 
145.11 	Statutes, section 469.190, its predecessor provisions, and any special laws authorizing 
145.12 	political subdivisions to impose lodging taxes, and that those taxes were and are intended 
145.13 	to apply to the entire consideration paid to obtain access to transient lodging, including 
145.14 	ancillary or related services, such as services provided by accommodation intermediaries 
145.15 	as defined in Minnesota Statutes, section 297A.61, and similar services. The provisions of 
145.16 	this section must not be interpreted to imply a narrower construction of the tax base under 
145.17 	lodging tax provisions of Minnesota law prior to the enactment of this section.

145.18 	Sec. 23. Minnesota Statutes 2012, section 469.190, subdivision 7, is amended to read:
145.19 		Subd. 7.Collection. (a) The statutory or home rule charter city may agree with the 
145.20 	commissioner of revenue that a tax imposed pursuant to this section shall be collected 
145.21 	by the commissioner together with the tax imposed by chapter 297A, and subject to the 
145.22 	same interest, penalties, and other rules and that its proceeds, less the cost of collection, 
145.23 	shall be remitted to the city.
145.24 	(b) If a tax imposed under this section or under a special law is not collected by 
145.25 	the commissioner of revenue, the local government imposing the tax may only require 
145.26 	an accommodations intermediary, as defined in section 297A.61, subdivision 47, to file 
145.27 	and remit the tax related to accommodations intermediary services once in every calendar 
145.28 	year. The local government must inform the tax intermediary of the date when the return 
145.29 	and remittance is due.

145.30 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
145.31 	June 30, 2013.

146.1 	Sec. 24. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by 
146.2 	Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section 
146.3 	30, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First 
146.4 	Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4, 
146.5 	section 15, is amended to read:
146.6 		Subd. 2.Use of revenues. Revenues received from the tax authorized by subdivision 
146.7 	1 may only be used by the city to pay the cost of collecting the tax, and, except as provided in 
146.8 	paragraph (e), to pay for the following projects or to secure or pay any principal, premium, 
146.9 	or interest on bonds issued in accordance with subdivision 3 for the following projects.
146.10 	(a) To pay all or a portion of the capital expenses of construction, equipment and 
146.11 	acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex, 
146.12 	including the demolition of the existing arena and the construction and equipping of a 
146.13 	new arena.
146.14 	(b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be 
146.15 	spent for:
146.16 	(1) capital projects to further residential, cultural, commercial, and economic 
146.17 	development in both downtown St. Paul and St. Paul neighborhoods; and
146.18 	(2) capital and operating expenses of cultural organizations in the city, provided 
146.19 	that the amount spent under this clause must equal ten percent of the total amount spent 
146.20 	under this paragraph in any year.
146.21 	(c) The amount apportioned under paragraph (b) shall be no less than 60 percent 
146.22 	of the revenues derived from the tax each year, except to the extent that a portion of that 
146.23 	amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a) 
146.24 	prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1, 
146.25 	1998, but only if the city council determines that 40 percent of the revenues derived from 
146.26 	the tax together with other revenues pledged to the payment of the bonds, including the 
146.27 	proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
146.28 	(d) If in any year more than 40 percent of the revenue derived from the tax authorized 
146.29 	by subdivision 1 is used to pay debt service on the bonds issued for the purposes of 
146.30 	paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment 
146.31 	that exceeds 40 percent of the revenue must be determined for that year. In any year when 
146.32 	40 percent of the revenue produced by the sales tax exceeds the amount required to pay 
146.33 	debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the 
146.34 	amount of the excess must be made available for capital projects to further residential, 
146.35 	cultural, commercial, and economic development in the neighborhoods and downtown 
146.36 	until the cumulative amounts determined for all years under the preceding sentence have 
147.1 	been made available under this sentence. The amount made available as reimbursement in 
147.2 	the preceding sentence is not included in the 60 percent determined under paragraph (c).
147.3 	(e) In each of calendar years 2006 to 2014, revenue not to exceed $3,500,000 may be 
147.4 	used to pay the principal of bonds issued for capital projects of the city. After December 
147.5 	31, 2014, revenue from the tax imposed under subdivision 1 may not be used for this 
147.6 	purpose. If the amount necessary to meet obligations under paragraphs (a) and (d) are less 
147.7 	than 40 percent of the revenue from the tax in any year, the city may place the difference 
147.8 	between 40 percent of the revenue and the amounts allocated under paragraphs (a) and (d) 
147.9 	in an economic development fund to be used for any economic development purposes.
147.10 	(f) By January 15 of each year, the mayor and the city council must report to the 
147.11 	legislature on the use of sales tax revenues during the preceding one-year period.

147.12 	EFFECTIVE DATE. This section is effective the day after compliance by the 
147.13 	governing body of the city of St. Paul with Minnesota Statutes, section 645.021, 
147.14 	subdivisions 2 and 3.

147.15 	Sec. 25. Laws 1993, chapter 375, article 9, section 46, subdivision 5, as amended by 
147.16 	Laws 1998, chapter 389, article 8, section 32, is amended to read:
147.17 		Subd. 5.Expiration of taxing authority. The authority granted by subdivision 1 to 
147.18 	the city to impose a sales tax shall expire on December 31, 2030 2042, or at an earlier 
147.19 	time as the city shall, by ordinance, determine. Any funds remaining after completion of 
147.20 	projects approved under subdivision 2, paragraph (a) and retirement or redemption of any 
147.21 	bonds or other obligations may be placed in the general fund of the city.

147.22 	EFFECTIVE DATE. This section is effective the day after compliance by the 
147.23 	governing body of the city of St. Paul with Minnesota Statutes, section 645.021, 
147.24 	subdivisions 2 and 3.

147.25 	Sec. 26. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009, 
147.26 	chapter 88, article 4, section 19, and Laws 2010, chapter 389, article 5, section 3, is 
147.27 	amended to read:
147.28 	Sec. 25. ROCHESTER LODGING TAX.
 147.29 		Subdivision 1.Authorization. Notwithstanding Minnesota Statutes, section 
147.30 	469.190 or 477A.016, or any other law, the city of Rochester may impose an additional 
147.31 	tax of one percent on the gross receipts from the furnishing for consideration of lodging at 
147.32 	a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it 
147.33 	for a continuous period of 30 days or more.
148.1 		Subd. 1a.Authorization. Notwithstanding Minnesota Statutes, section 469.190 or 
148.2 	477A.016, or any other law, and in addition to the tax authorized by subdivision 1, the city 
148.3 	of Rochester may impose an additional tax of one three percent on the gross receipts from 
148.4 	the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or 
148.5 	resort, other than the renting or leasing of it for a continuous period of 30 days or more only 
148.6 	upon the approval of the city governing body of a total financial package for the project.
148.7 		Subd. 2.Disposition of proceeds. (a) The gross proceeds from the tax imposed 
148.8 	under subdivision 1 must be used by the city to fund a local convention or tourism bureau 
148.9 	for the purpose of marketing and promoting the city as a tourist or convention center.
148.10 	(b) The gross proceeds from the one three percent tax imposed under subdivision 
148.11 	1a shall be used to pay for (1) design, construction, renovation, improvement, and 
148.12 	expansion of the Mayo Civic Center Complex and related infrastructure, including but not 
148.13 	limited to, skyway access, lighting, parking, or landscaping; and (2) for payment of any 
148.14 	principal, interest, or premium on bonds issued to finance the construction, renovation, 
148.15 	improvement, and expansion of the Mayo Civic Center Complex.
148.16 		Subd. 2a.Bonds. The city of Rochester may issue, without an election, general 
148.17 	obligation bonds of the city, in one or more series, in the aggregate principal amount not to 
148.18 	exceed $43,500,000 $50,000,000, to pay for capital and administrative costs for the design, 
148.19 	construction, renovation, improvement, and expansion of the Mayo Civic Center Complex, 
148.20 	and related infrastructure, including but not limited to, skyway, access, lighting, parking, 
148.21 	and landscaping. The city may pledge the lodging tax authorized by subdivision 1a and the 
148.22 	food and beverage tax authorized under Laws 2009, chapter 88, article 4, section 23, to the 
148.23 	payment of the bonds. The debt represented by the bonds is not included in computing any 
148.24 	debt limitations applicable to the city, and the levy of taxes required by Minnesota Statutes, 
148.25 	section 475.61, to pay the principal of and interest on the bonds is not subject to any levy 
148.26 	limitation or included in computing or applying any levy limitation applicable to the city.
148.27 		Subd. 3.Expiration of taxing authority. The authority of the city to impose a tax 
148.28 	under subdivision 1a shall expire when the principal and interest on any bonds or other 
148.29 	obligations issued prior to December 31, 2014, to finance the construction, renovation, 
148.30 	improvement, and expansion of the Mayo Civic Center Complex and related skyway 
148.31 	access, lighting, parking, or landscaping have been paid, including any bonds issued to 
148.32 	refund such bonds, or at an earlier time as the city shall, by ordinance, determine. Any 
148.33 	funds remaining after completion of the project and retirement or redemption of the bonds 
148.34 	shall be placed in the general fund of the city. The city may, by ordinance, repeal the 
148.35 	tax provided that:
149.1 	(1) the revenues raised before the repeal are sufficient to meet all bond or other 
149.2 	obligations backed by revenues of the tax; and
149.3 	(2) the repeal date meets the requirements of section 297A.99, subdivision 12.

149.4 	EFFECTIVE DATE. This section is effective the day after the governing body of 
149.5 	the city of Rochester and its chief fiscal officer comply with Minnesota Statutes, section 
149.6 	645.021, subdivisions 2 and 3.

149.7 	Sec. 27. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision 
149.8 	2, is amended to read:
149.9 		Subd. 2.Use of revenues. (a) Revenues received from the tax authorized by 
149.10 	subdivision 1 by the city of St. Cloud must be used for the cost of collecting and 
149.11 	administering the tax and to pay all or part of the capital or administrative costs of the 
149.12 	development, acquisition, construction, improvement, and securing and paying debt 
149.13 	service on bonds or other obligations issued to finance the following regional projects as 
149.14 	approved by the voters and specifically detailed in the referendum authorizing the tax or 
149.15 	extending the tax:
149.16 	(1) St. Cloud Regional Airport;
149.17 	(2) regional transportation improvements;
149.18 	(3) regional community and aquatics and recreation centers and facilities;
149.19 	(4) regional public libraries; and 
149.20 	(5) acquisition and improvement of regional park land and open space.
149.21 	(b) Revenues received from the tax authorized by subdivision 1 by the cities of St. 
149.22 	Joseph, Waite Park, Sartell, Sauk Rapids, and St. Augusta must be used for the cost of 
149.23 	collecting and administering the tax and to pay all or part of the capital or administrative 
149.24 	costs of the development, acquisition, construction, improvement, and securing and paying 
149.25 	debt service on bonds or other obligations issued to fund the projects specifically approved 
149.26 	by the voters at the referendum authorizing the tax or extending the tax. The portion of 
149.27 	revenues from the city going to fund the regional airport or regional library located in the 
149.28 	city of St. Cloud will be as required under the applicable joint powers agreement.
149.29 	(c) The use of revenues received from the taxes authorized in subdivision 1 for 
149.30 	projects allowed under paragraphs (a) and (b) are limited to the amount authorized for 
149.31 	each project under the enabling referendum.

149.32 	EFFECTIVE DATE. This section is effective for a city that approves it the day 
149.33 	after compliance by the governing body of that city with Minnesota Statutes, section 
149.34 	645.021, subdivision 3.

150.1 	Sec. 28. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision 
150.2 	4, is amended to read:
150.3 		Subd. 4.Termination of tax. The tax imposed in the cities of St. Joseph, St. Cloud, 
150.4 	St. Augusta, Sartell, Sauk Rapids, and Waite Park under subdivision 1 expires when the 
150.5 	city council determines that sufficient funds have been collected from the tax to retire or 
150.6 	redeem the bonds and obligations authorized under subdivision 2, paragraph (a), but no 
150.7 	later than December 31, 2018. Notwithstanding Minnesota Statutes, section 297A.99, 
150.8 	subdivision 3, paragraphs (a), (c), and (d), a city may extend the tax imposed under 
150.9 	subdivision 1 through December 31, 2038, if approved under the referendum authorizing 
150.10 	the tax under subdivision 1 or if approved by voters of the city at a general election held 
150.11 	no later than November 6, 2018.

150.12 	EFFECTIVE DATE. This section is effective for a city that approves it the day 
150.13 	after compliance by the governing body of that city with Minnesota Statutes, section 
150.14 	645.021, subdivision 3.

150.15 	Sec. 29. Laws 2008, chapter 366, article 7, section 19, subdivision 3, as amended by 
150.16 	Laws 2011, First Special Session chapter 7, article 4, section 8, is amended to read:
150.17 		Subd. 3.Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99, 
150.18 	subdivision 3, paragraph (b), the proceeds of the tax imposed under this section shall be 
150.19 	used to pay for the costs of improvements to the Sportsman Park/Ballfields, Riverside 
150.20 	Park, Lions Park/Pavilion, Cedar South Park also known as Eldorado Park, and Spring 
150.21 	Street Park; improvements to and extension of the River County Bike Trail; acquisition,
150.22 	 and construction, improvement, and development of regional parks, bicycle trails, park 
150.23 	land, open space, andof a pedestrian walkways, as described in the city improvement 
150.24 	plan adopted by the city council by resolution on December 12, 2006, and walkway 
150.25 	over Interstate 94 and State Highway 24; and the acquisition of land and construction of 
150.26 	buildings for a community and recreation center. The total amount of revenues from the 
150.27 	taxes in subdivisions 1 and 2 that may be used to fund these projects is $12,000,000 
150.28 	plus any associated bond costs.

150.29 	EFFECTIVE DATE. This section is effective the day after compliance by the 
150.30 	governing body of the city of Clearwater with Minnesota Statutes, section 645.021, 
150.31 	subdivisions 2 and 3.

150.32 	Sec. 30. Laws 2010, chapter 389, article 5, section 6, subdivision 4, is amended to read:
151.1 		Subd. 4.Use of lodging tax revenues. The revenues derived from the tax imposed 
151.2 	under subdivision 3 must be used by the city of Marshall to pay the costs of collecting 
151.3 	and administering the lodging tax, to pay all or part of the operating costs of the new and 
151.4 	existing facilities of the Minnesota Emergency Response and Industry Training Center, 
151.5 	including the payment of debt service on bonds issued under subdivision 2, and to pay 
151.6 	all or part of the operating costs of the facilities of the Southwest Minnesota Regional 
151.7 	Amateur Sports Center, including the payment of debt service on bonds issued under 
151.8 	subdivision 2. Authorized expenses include, but are not limited to, acquiring property; 
151.9 	predesign; design; and paying construction, furnishing, and equipment costs related to 
151.10 	these facilities and paying debt service on bonds or other obligations issued by the city.

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

151.12 	Sec. 31. Laws 2010, chapter 389, article 5, section 6, subdivision 6, is amended to read:
151.13 		Subd. 6.Use of food and beverages tax. The revenues derived from the tax 
151.14 	imposed under subdivision 5 must be used by the city of Marshall to pay the costs of 
151.15 	collecting and administering the food and beverages tax, to pay all or part of the operating 
151.16 	costs of the new and existing facilities of the Minnesota Emergency Response and 
151.17 	Industry Training Center, including the payment of debt service on bonds issued under 
151.18 	subdivision 2, and to pay all or part of the operating costs of the facilities of the Southwest 
151.19 	Minnesota Regional Amateur Sports Center, including the payment of debt service on 
151.20 	bonds issued under subdivision 2. Authorized expenses for each organization include, 
151.21 	but are not limited to, acquiring property; predesign; design; and paying construction, 
151.22 	furnishing, and equipment costs related to these facilities and paying debt service on 
151.23 	bonds or other obligations issued by the city.

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

151.25 	Sec. 32. CITY OF MARSHALL; VALIDATION OF PRIOR ACT.
 151.26 	(a) Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city 
151.27 	of Marshall may approve Laws 2010, chapter 389, article 5, section 6, as amended by 
151.28 	Laws 201l, First Special Session chapter 7, article 4, section 9, and file its approval with 
151.29 	the secretary of state by June 15, 2013. If approved as authorized under this paragraph, 
151.30 	actions undertaken by the city pursuant to the approval of the voters on November 6, 2012, 
151.31 	and otherwise in accordance with Laws 2010, chapter 389, article 5, section 6, as amended 
151.32 	by Laws 201l, First Special Session chapter 7, article 4, section 9, are validated.
152.1 	(b) Notwithstanding the time limit on the imposition of tax under Laws 2010, 
152.2 	chapter 389, article 5, section 6, subdivision 1, as amended by Laws 201l, First Special 
152.3 	Session chapter 7, article 4, section 9, and subject to local approval under paragraph (a), 
152.4 	the city of Marshall may impose the tax on or before July 1, 2013.

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

152.6 	Sec. 33. CITY OF PROCTOR; VALIDATION OF PRIOR ACT.
 152.7 	Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city of 
152.8 	Proctor may approve, by resolution, Laws 2008, chapter 366, article 7, section 13, and 
152.9 	Laws 2010, chapter 389, article 5, sections 1 and 2, and file its approval with the secretary 
152.10 	of state by January 1, 2014. If approved under this paragraph, actions undertaken by 
152.11 	the city pursuant to the approval of the voters on November 2, 2010, and otherwise in 
152.12 	accordance with those laws are validated.

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

152.14 	Sec. 34. CITY OF BEMIDJI; LOCAL TAXES AUTHORIZED.
 152.15 		Subdivision 1.Food and beverage tax authorized. Notwithstanding Minnesota 
152.16 	Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the 
152.17 	city of Bemidji may, by ordinance, impose a sales tax of up to one percent on the gross 
152.18 	receipts of all food and beverages sold by a restaurant or place of refreshment located 
152.19 	within the city. For purposes of this section, "food and beverages" include retail on-sale of 
152.20 	intoxicating liquor and fermented malt beverages.
152.21 		Subd. 2.Lodging tax. Notwithstanding Minnesota Statutes, section 469.190 or 
152.22 	477A.016, or any other provision of law, ordinance, or city charter, the city of Bemidji 
152.23 	may impose, by ordinance, a tax of up to one percent on the gross receipts for the 
152.24 	furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or 
152.25 	resort, other than for the renting or leasing of it for a continuous period of 30 days or more.
152.26 		Subd. 3.Use of proceeds from authorized taxes. The proceeds of the taxes 
152.27 	imposed under subdivisions 1 and 2 must only be used by the city to fund the costs of 
152.28 	operation, maintenance, and capital replacement costs for the Sanford Center.
152.29 		Subd. 4.Collection, administration, and enforcement. The city may enter into 
152.30 	an agreement with the commissioner of revenue to administer, collect, and enforce the 
152.31 	taxes under subdivisions 1 and 2. If the commissioner agrees to collect the tax, the 
152.32 	provisions of Minnesota Statutes, section 297A.99, related to collection, administration, 
152.33 	and enforcement, and Minnesota Statutes, section 270C.171, apply.

153.1 	EFFECTIVE DATE. This section is effective the day after the governing body of 
153.2 	the city of Bemidji and its chief clerical officer comply with Minnesota Statutes, section 
153.3 	645.021, subdivisions 2 and 3.

153.4 	Sec. 35. ROCHESTER SALES TAX SHARING.
 153.5 	The city council may, after holding a public hearing and passing a resolution, use 
153.6 	$5,000,000 of the $10,000,000 allocated to an economic development fund in Laws 1998, 
153.7 	chapter 389, article 8, section 43, subdivision 3, as amended by Laws 2005, First Special 
153.8 	Session chapter 3, article 5, section 28, and Laws 2011, First Special Session chapter 
153.9 	7, article 4, section 5, paragraph (c), clause (9), for grants to any or all of the cities of 
153.10 	Altura, Byron, Chatfield, Dodge Center, Elgin, Eyota, Grand Meadow, Hayfield, Kasson, 
153.11 	Mantorville, Mazeppa, Oronoco, Pine Island, Plainview, Spring Valley, St. Charles, 
153.12 	Stewartville, Wanamingo, West Concord, and Zumbrota for economic development 
153.13 	projects that these communities would fund through their economic development authority 
153.14 	or housing and redevelopment authority. The public hearing may be part of a regular city 
153.15 	council meeting. If the council does not pass the resolution by September 1, 2013, the 
153.16 	$5,000,000 may not be used for grants to the other cities but shall instead be used to 
153.17 	fund public infrastructure projects contained in the development plan under Minnesota 
153.18 	Statutes, section 469.42.

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

153.20 	Sec. 36. REPEALER.
 153.21 	Laws 2009, chapter 88, article 4, section 23, as amended by Laws 2010, chapter 389, 
153.22 	article 5, section 4, is repealed.

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

153.24 	ARTICLE 9
153.25 	ECONOMIC DEVELOPMENT

153.26 	Section 1. Minnesota Statutes 2012, section 469.071, subdivision 5, is amended to read:
153.27 		Subd. 5.Exception; parking facilities. Notwithstanding section 469.068, the 
153.28 	Bloomington port authority need not require competitive bidding with respect to a 
153.29 	structured parking facility or other public improvements constructed in conjunction with, 
153.30 	and directly above or below, or adjacent and integrally related to, a development and 
153.31 	financed with the proceeds of tax increment or, revenue bonds, or other funds of the 
153.32 	port authority and the city of Bloomington.

154.1 	EFFECTIVE DATE. This section is effective upon compliance of the governing 
154.2 	body of the city of Bloomington with the requirements of Minnesota Statutes, section 
154.3 	645.021, subdivision 3.

154.4 	Sec. 2. Minnesota Statutes 2012, section 469.169, is amended by adding a subdivision 
154.5 	to read:
154.6 		Subd. 19.Additional border city allocation; 2013. (a) In addition to the tax 
154.7 	reductions authorized in subdivisions 12 to 18, the commissioner shall allocate $750,000 
154.8 	for tax reductions to border city enterprise zones in cities located on the western border 
154.9 	of the state. The commissioner shall allocate this amount among cities on a per capita 
154.10 	basis. Allocations made under this subdivision may be used for tax reductions under 
154.11 	section 469.171, or for other offsets of taxes imposed on or remitted by businesses located 
154.12 	in the enterprise zone, but only if the municipality determines that the granting of the tax 
154.13 	reduction or offset is necessary to retain a business within or attract a business to the zone. 
154.14 	The city alternatively may elect to use any portion of the allocation under this paragraph 
154.15 	for tax reductions under section 469.1732 or 469.1734.
154.16 	(b) The commissioner shall allocate $750,000 for tax reductions under section 
154.17 	469.1732 or 469.1734 to cities with border city enterprise zones located on the western 
154.18 	border of the state. The commissioner shall allocate this amount among the cities on a per 
154.19 	capita basis. The city alternatively may elect to use any portion of the allocation provided 
154.20 	in this paragraph for tax reductions under section 469.171.

154.21 	EFFECTIVE DATE. This section is effective July 1, 2013.

154.22 	Sec. 3. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read:
154.23 		Subd. 4c.Economic development districts. (a) Revenue derived from tax increment 
154.24 	from an economic development district may not be used to provide improvements, loans, 
154.25 	subsidies, grants, interest rate subsidies, or assistance in any form to developments 
154.26 	consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and 
154.27 	facilities (determined on the basis of square footage) are used for a purpose other than:
154.28 	(1) the manufacturing or production of tangible personal property, including 
154.29 	processing resulting in the change in condition of the property;
154.30 	(2) warehousing, storage, and distribution of tangible personal property, excluding 
154.31 	retail sales;
154.32 	(3) research and development related to the activities listed in clause (1) or (2);
154.33 	(4) telemarketing if that activity is the exclusive use of the property;
154.34 	(5) tourism facilities; or
155.1 	(6) qualified border retail facilities; or
155.2 	(7) space necessary for and related to the activities listed in clauses (1) to (6) (5).
155.3 	(b) Notwithstanding the provisions of this subdivision, revenues derived from tax 
155.4 	increment from an economic development district may be used to provide improvements, 
155.5 	loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000 
155.6 	square feet of any separately owned commercial facility located within the municipal 
155.7 	jurisdiction of a small city, if the revenues derived from increments are spent only to 
155.8 	assist the facility directly or for administrative expenses, the assistance is necessary to 
155.9 	develop the facility, and all of the increments, except those for administrative expenses, 
155.10 	are spent only for activities within the district.
155.11 	(c) A city is a small city for purposes of this subdivision if the city was a small city 
155.12 	in the year in which the request for certification was made and applies for the rest of 
155.13 	the duration of the district, regardless of whether the city qualifies or ceases to qualify 
155.14 	as a small city.
155.15 	(d) Notwithstanding the requirements of paragraph (a) and the finding requirements 
155.16 	of section 469.174, subdivision 12, tax increments from an economic development district 
155.17 	may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or 
155.18 	assistance in any form to developments consisting of buildings and ancillary facilities, if 
155.19 	all the following conditions are met:
155.20 	(1) the municipality finds that the project will create or retain jobs in this state, 
155.21 	including construction jobs, and that construction of the project would not have 
155.22 	commenced before July 1, 2012, without the authority providing assistance under the 
155.23 	provisions of this paragraph;
155.24 	(2) construction of the project begins no later than July 1, 2012;
155.25 	(3) the request for certification of the district is made no later than June 30, 2012; and
155.26 	(4) for development of housing under this paragraph, the construction must begin 
155.27 	before January 1, 2012.
155.28 	The provisions of this paragraph may not be used to assist housing that is developed 
155.29 	to qualify under section 469.1761, subdivision 2 or 3, or similar requirements of other law, 
155.30 	if construction of the project begins later than July 1, 2011.

155.31 	EFFECTIVE DATE. This section is effective for districts for which the request for 
155.32 	certification was made after June 30, 2012.

155.33 	Sec. 4. Minnesota Statutes 2012, section 469.176, subdivision 4g, is amended to read:
155.34 		Subd. 4g.General government use prohibited. (a) Tax increments may not be 
155.35 	used to circumvent existing levy limit law.
156.1 	(b) No tax increment from any district may be used for the acquisition, construction, 
156.2 	renovation, operation, or maintenance of a building to be used primarily and regularly 
156.3 	for conducting the business of a municipality, county, school district, or any other local 
156.4 	unit of government or the state or federal government. This provision does not prohibit 
156.5 	the use of revenues derived from tax increments for the construction or renovation of 
156.6 	a parking structure.
156.7 	(c)(1) Tax increments may not be used to pay for the cost of public improvements, 
156.8 	equipment, or other items, if:
156.9 	(i) the improvements, equipment, or other items are located outside of the area of the 
156.10 	tax increment financing district from which the increments were collected; and
156.11 	(ii) the improvements, equipment, or items that (A) primarily serve a decorative or 
156.12 	aesthetic purpose, or (B) serve a functional purpose, but their cost is increased by more than 
156.13 	100 percent as a result of the selection of materials, design, or type as compared with more 
156.14 	commonly used materials, designs, or types for similar improvements, equipment, or items.
156.15 	(2) The provisions of this paragraph do not apply to expenditures related to the 
156.16 	rehabilitation of historic structures that are:
156.17 	(i) individually listed on the National Register of Historic Places; or
156.18 	(ii) a contributing element to a historic district listed on the National Register 
156.19 	of Historic Places.

156.20 	EFFECTIVE DATE. This section is effective the day following final enactment for 
156.21 	all tax increment financing districts, regardless of when the request for certification was 
156.22 	made, but applies only to amounts spent after final enactment.

156.23 	Sec. 5. Minnesota Statutes 2012, section 469.176, subdivision 6, is amended to read:
156.24 		Subd. 6.Action required. (a) If, after four years from the date of certification of 
156.25 	the original net tax capacity of the tax increment financing district pursuant to section 
156.26 	469.177, no demolition, rehabilitation, or renovation of property or other site preparation, 
156.27 	including qualified improvement of a street adjacent to a parcel but not installation 
156.28 	of utility service including sewer or water systems, has been commenced on a parcel 
156.29 	located within a tax increment financing district by the authority or by the owner of the 
156.30 	parcel in accordance with the tax increment financing plan, no additional tax increment 
156.31 	may be taken from that parcel, and the original net tax capacity of that parcel shall be 
156.32 	excluded from the original net tax capacity of the tax increment financing district. If the 
156.33 	authority or the owner of the parcel subsequently commences demolition, rehabilitation, 
156.34 	or renovation or other site preparation on that parcel including qualified improvement of 
156.35 	a street adjacent to that parcel, in accordance with the tax increment financing plan, the 
157.1 	authority shall certify to the county auditor that the activity has commenced, and the 
157.2 	county auditor shall certify the net tax capacity thereof as most recently certified by the 
157.3 	commissioner of revenue and add it to the original net tax capacity of the tax increment 
157.4 	financing district. The county auditor must enforce the provisions of this subdivision. The 
157.5 	authority must submit to the county auditor evidence that the required activity has taken 
157.6 	place for each parcel in the district. The evidence for a parcel must be submitted by 
157.7 	February 1 of the fifth year following the year in which the parcel was certified as included 
157.8 	in the district. For purposes of this subdivision, qualified improvements of a street are 
157.9 	limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) 
157.10 	substantial reconstruction or rebuilding of an existing street.
157.11 	(b) For districts which were certified on or after January 1, 2005, and before April 
157.12 	20, 2009, the four-year period under paragraph (a) is increased to six years deemed to end 
157.13 	on December 31, 2016.

157.14 	EFFECTIVE DATE. This section is effective the day following final enactment 
157.15 	and applies to districts certified on or after January 1, 2006, and before April 20, 2009.

157.16 	Sec. 6. Minnesota Statutes 2012, section 469.177, is amended by adding a subdivision 
157.17 	to read:
157.18 		Subd. 1d.Original net tax capacity adjustment; homestead market value 
157.19 	exclusion. (a) Upon approval by the municipality, by resolution, the authority may elect 
157.20 	to reduce the net tax capacity of a qualified district by the amount of the tax capacity 
157.21 	attributable to the market value exclusion under section 273.13, subdivision 35. The 
157.22 	amount of the reduction may not reduce the original net tax capacity below zero.
157.23 	(b) For purposes of this subdivision, a qualified district means a tax increment 
157.24 	financing district that satisfies the following conditions:
157.25 	(1) for taxes payable in 2011, the authority received a homestead market value credit 
157.26 	reimbursement under section 273.1384 for the district of $10,000 or more;
157.27 	(2) for taxes payable in 2013, the reduction in captured tax capacity resulting from 
157.28 	the market value exclusion for the district was equal to or greater than 1.75 percent of the 
157.29 	district's captured tax capacity; and
157.30 	(3) either (i) the authority is permitted to expend increments on activities under the 
157.31 	provisions of section 469.1763, subdivision 3, or an equivalent provision of special law 
157.32 	on July 1, 2013, or (ii) the district's tax increments received for taxes payable in 2012 
157.33 	exceeded the amount of debt service payments due during calendar year 2012 on bonds 
157.34 	issued under section 469.178 to which the district's increments are pledged.
158.1 	The calculation of the amount under clause (2) must reflect any adjustments to original 
158.2 	net tax capacity made under subdivision 1, paragraphs (d) and (e), for the homestead 
158.3 	market value exclusion.
158.4 	(c) The authority must notify the county auditor of its election under this section no 
158.5 	later than July 1, 2014. Notifications made by July 1, 2013, are effective beginning for 
158.6 	taxes payable in 2014, and notifications made after July 1, 2013, are effective beginning 
158.7 	for taxes payable in 2015.

158.8 	EFFECTIVE DATE. This section is effective the day following final enactment 
158.9 	and applies to all tax increment financing districts regardless of when the request for 
158.10 	certification was made.

158.11 	Sec. 7. Minnesota Statutes 2012, section 473F.08, is amended by adding a subdivision 
158.12 	to read:
158.13 		Subd. 3c.Mall of America. (a) When computing the net tax capacity under section 
158.14 	473F.05, the Hennepin County auditor shall exclude the captured tax capacity of Tax 
158.15 	Increment Financing Districts No. 1-C and No. 1-G in the city of Bloomington.
158.16 	(b) Notwithstanding the provisions of subdivision 2, paragraph (a), the 
158.17 	commercial-industrial contribution percentage for the city of Bloomington is the 
158.18 	contribution net tax capacity divided by the total net tax capacity of commercial-industrial 
158.19 	property in the city, excluding any commercial-industrial property that is captured tax 
158.20 	capacity of Tax Increment Financing Districts No. 1-C and No. 1-G.
158.21 	(c) The property taxes to be paid on commercial-industrial tax capacity that is 
158.22 	included in the captured tax capacity of Tax Increment Financing Districts No. 1-C and 
158.23 	No. 1-G in the city of Bloomington must be determined as described in subdivision 6, 
158.24 	except that the portion of the tax that is based on the areawide tax rate is to be treated 
158.25 	as tax increment under section 469.176.
158.26 	(d) The provisions of this subdivision take effect only if the clerk of the city of 
158.27 	Bloomington certifies to the Hennepin County auditor that the city has entered into a 
158.28 	binding written agreement with the Metropolitan Council to repair and restore, or to 
158.29 	replace, the old Cedar Avenue bridge for use by bicycle commuters and recreational users.
158.30 	(e) This subdivision expires on the earliest of the following dates:
158.31 	(1) when the tax increment financing districts have been decertified in 2024 or 2035, 
158.32 	as provided by section 10, subdivision 2 or 4; or
158.33 	(2) on January 1, 2014, if the city clerk fails to make the certification provided in 
158.34 	paragraph (d) or if the city fails to file its local approval of section 18 with the secretary 
158.35 	of state by December 31, 2013.

159.1 	EFFECTIVE DATE. This section is effective beginning for property taxes payable 
159.2 	in 2014.

159.3 	Sec. 8. Laws 2008, chapter 366, article 5, section 26, is amended to read:
159.4 	Sec. 26. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR 
159.5 	RULE.
 159.6 	(a) The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that 
159.7 	activities must be undertaken within a five-year period from the date of certification of 
159.8 	a tax increment financing district, are increased to a ten-year 15-year period for the 
159.9 	Port Authority of the City of Bloomington's Tax Increment Financing District No. 1-I, 
159.10 	Bloomington Central Station.
159.11 	(b) Notwithstanding the provisions of Minnesota Statutes, section 469.176, or any 
159.12 	other law to the contrary, the city of Bloomington and its port authority may extend the 
159.13 	duration limits of the district for a period through December 31, 2039.
159.14 	(c) Effective for taxes payable in 2014, tax increment for the district must be 
159.15 	computed using the current local tax rate, notwithstanding the provisions of Minnesota 
159.16 	Statutes, section 469.177, subdivision 1a.

159.17 	EFFECTIVE DATE. Paragraphs (a) and (c) are effective upon compliance by 
159.18 	the governing body of the city of Bloomington with the requirements of Minnesota 
159.19 	Statutes, section 645.021, subdivision 3. Paragraph (b) is effective upon compliance by 
159.20 	the governing bodies of the city of Bloomington, Hennepin County, and Independent 
159.21 	School District No. 271 with the requirements of Minnesota Statutes, sections 469.1782, 
159.22 	subdivision 2, and 645.021, subdivision 3.

159.23 	Sec. 9. Laws 2008, chapter 366, article 5, section 34, as amended by Laws 2009, 
159.24 	chapter 88, article 5, section 11, is amended to read:
159.25 	Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY PARCELS 
159.26 	DEEMED OCCUPIED. 
 159.27 	(a) The provisions of this section apply to redevelopment tax increment financing 
159.28 	districts created by the Housing and Redevelopment Authority in and for the city of 
159.29 	Oakdale in the areas comprised of the parcels with the following parcel identification 
159.30 	numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056; 
159.31 	3102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059; 
159.32 	3102921320060; 3102921320061; 3102921330005; and 3102921330004; and (2) 
159.33 	2902921330001 and 2902921330005.
160.1 	(b) For a district subject to this section, the Housing and Redevelopment Authority 
160.2 	may, when requesting certification of the original tax capacity of the district under 
160.3 	Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district 
160.4 	be certified as the tax capacity of the land.
160.5 	(c) The authority to request certification of a district under this section expires on 
160.6 	July 1, 2013.
160.7 	(a) Parcel numbers 3102921320054, 3102921320055, 3102921320056, 
160.8 	3102921320057, 3102921320061, and 3102921330004 are deemed to meet the 
160.9 	requirements of Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), 
160.10 	notwithstanding any contrary provisions of that paragraph, if the following conditions 
160.11 	are met:
160.12 	(1) a building located on any part of each of the specified parcels was demolished after 
160.13 	the Housing and Redevelopment Authority for the city of Oakdale adopted a resolution 
160.14 	under Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), clause (3);
160.15 	(2) the building was removed either by the authority, by a developer under a 
160.16 	development agreement with the Housing and Redevelopment Authority for the city of 
160.17 	Oakdale, or by the owner of the property without entering into a development agreement 
160.18 	with the Housing and Redevelopment Authority for the city of Oakdale; and
160.19 	(3) the request for certification of the parcel as part of a district is filed with the 
160.20 	county auditor by December 31, 2017.
160.21 	(b) The provisions of this section allow an election by the Housing and 
160.22 	Redevelopment Authority for the city of Oakdale for the parcels deemed occupied under 
160.23 	paragraph (a), notwithstanding the provisions of Minnesota Statutes, sections 469.174, 
160.24 	subdivision 10, paragraph (d), and 469.177, subdivision 1, paragraph (f).
160.25 	(c) The city may elect, in the tax increment financing plan, to collect increment from 
160.26 	a redevelopment district created under the provisions of this section for an additional ten 
160.27 	years beyond the limit in Minnesota Statutes, section 469.176, subdivision 1b.

160.28 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
160.29 	body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021, 
160.30 	subdivision 3, except that the provisions of paragraph (c) are effective only upon 
160.31 	compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County 
160.32 	and Independent School District No. 622.

160.33 	Sec. 10. Laws 2010, chapter 216, section 55, is amended to read:
160.34 	Sec. 55. OAKDALE; TAX INCREMENT FINANCING DISTRICT.
 161.1 		Subdivision 1.Duration of district. Notwithstanding the provisions of Minnesota 
161.2 	Statutes, section 469.176, subdivision 1b, the city of Oakdale may collect tax increments 
161.3 	from Tax Increment Financing District No. 6 (Bergen Plaza) through December 31, 2024
161.4 	 2040, subject to the conditions described in subdivision 2.
161.5 		Subd. 2.Conditions for extension. (a) Subdivision 1 applies only if the following 
161.6 	conditions are met:
161.7 	(1) by July 1, 2011, the city of Oakdale has entered into a development agreement 
161.8 	with a private developer for development or redevelopment of all or a substantial part of 
161.9 	the area parcels described in clause (2); and
161.10 	(2) by November 1, 2011, the city of Oakdale or a private developer commences 
161.11 	construction of streets, traffic improvements, water, sewer, or related infrastructure that 
161.12 	serves one or both of the parcels with the following parcel identification numbers: 
161.13 	2902921330001 and 2902921330005. For the purposes of this section, construction 
161.14 	commences upon grading or other visible improvements that are part of the subject 
161.15 	infrastructure.
161.16 	(b) All tax increments received by the city of Oakdale under subdivision 1 after 
161.17 	December 31, 2016, must be used only to pay costs that are both:
161.18 	(1) related to redevelopment of the parcels specified in this subdivision or 
161.19 	parcel numbers 3102921320053, 3102921320054, 3102921320055, 3102921320056, 
161.20 	3102921320057, 3102921320058, 3102921320059, 3102921320060, 3102921320061, 
161.21 	3102921320062, 3102921320063, 3102921330004, and 3102921330005, including, 
161.22 	without limitation, any of the infrastructure referenced in this subdivision that serves 
161.23 	any of the referenced parcels; and 
161.24 	(2) otherwise eligible under law to be paid with increments from the specified tax 
161.25 	increment financing district, except the authority under this clause does not apply to 
161.26 	increments collected after the conclusion of the duration limit under general law.

161.27 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
161.28 	body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021, 
161.29 	subdivision 3, except that the amendments to subdivision 1 are effective only upon 
161.30 	compliance with Minnesota Statutes, section 469.1782, subdivision 2, by Ramsey County 
161.31 	and Independent School District No. 622.

161.32 	Sec. 11. CITY OF BLOOMINGTON; TAX INCREMENT FINANCING.
 161.33 		Subdivision 1.Addition of property to Tax Increment Financing District 
161.34 	No. 1-G. (a) Notwithstanding the provisions of Minnesota Statutes, section 469.175, 
161.35 	subdivision 4, or any other law to the contrary, the governing bodies of the Port Authority 
162.1 	of the city of Bloomington and the city of Bloomington may elect to eliminate the real 
162.2 	property north of the existing building line on Lot 1, Block 1, Mall of America 7th 
162.3 	Addition, exclusive of Lots 2 and 3 from Tax Increment Financing District No. 1-C 
162.4 	within Industrial Development District No. 1 Airport South in the city of Bloomington, 
162.5 	Minnesota, and expand the boundaries of Tax Increment Financing District No. 1-G 
162.6 	to include that property. 
162.7 	(b) If the city elects to transfer parcels under this authority, the county auditor shall 
162.8 	transfer the original tax capacity of the affected parcels from Tax Increment Financing 
162.9 	District No. 1-C to Tax Increment Financing District No. 1-G.
162.10 		Subd. 2.Authority to extend duration limit; computation of increment. (a) 
162.11 	Notwithstanding Minnesota Statutes, section 469.176, or Laws 1996, chapter 464, article 
162.12 	1, section 8, or any other law to the contrary, the city of Bloomington and its port authority 
162.13 	may extend the duration limits of Tax Increment Financing Districts No. 1-C and No. 
162.14 	1-G through December 31, 2034.
162.15 	(b) Effective for property taxes payable in 2017 through 2034, the captured tax 
162.16 	capacity of Tax Increment Financing District No. 1-C must be included in computing the 
162.17 	tax rates of each local taxing district and the tax increment equals only the amount of tax 
162.18 	computed under Minnesota Statutes, section 473F.08, subdivision 3c, paragraph (c).
162.19 	(c) Effective for property taxes payable in 2019 through 2034, the captured tax 
162.20 	capacity of Tax Increment Financing District No. 1-G must be included in computing the 
162.21 	tax rates of each local taxing district and the tax increment for the district equals only 
162.22 	the amount of tax computed under Minnesota Statutes, section 473F.08, subdivision 
162.23 	3c, paragraph (c).
162.24 		Subd. 3.Treatment of increment. Increments received under the provisions 
162.25 	of subdivision 2, paragraph (b) or (c), and Minnesota Statutes, section 473F.08, 
162.26 	subdivision 3c, are deemed to be tax increments of Tax Increment Financing District No. 
162.27 	1-G, notwithstanding any law to the contrary, and without regard to whether they are 
162.28 	attributable to captured tax capacity of Tax Increment Financing District No. 1-C.
162.29 		Subd. 4.Condition. The authority under this section expires and Tax Increment 
162.30 	Financing Districts No. 1-C and No. 1-G must be decertified for taxes payable in 2024 
162.31 	and thereafter, if the total estimated market value of improvements for parcels located in 
162.32 	Tax Increment Financing District No. 1-G, as modified, do not exceed $100,000,000 
162.33 	by taxes payable in 2023.

162.34 	EFFECTIVE DATE. This section is effective upon compliance of the governing 
162.35 	body of the city of Bloomington with the requirements of Minnesota Statutes, section 
162.36 	645.021, subdivision 3, but only if the city enters into a binding written agreement with 
163.1 	the Metropolitan Council to repair and restore, or to replace, the old Cedar Avenue bridge 
163.2 	for use by bicycle commuters and  recreational users. This section is effective without 
163.3 	approval of the county and school district under Minnesota Statutes, section 469.1782, 
163.4 	subdivision 2. The legislature finds that the county and school district are not "affected 
163.5 	local government units" within the meaning of Minnesota Statutes, section 469.1782, 
163.6 	because the provision allowing extended collection of increment by the tax increment 
163.7 	financing districts does not affect their tax bases and tax rates dissimilarly to other counties 
163.8 	and school districts in the metropolitan area.

163.9 	Sec. 12. ST. CLOUD; TAX INCREMENT FINANCING.
 163.10 	The request for certification of Tax Increment Financing District No. 2, commonly 
163.11 	referred to as the Norwest District, in the city of St. Cloud is deemed to have been made 
163.12 	on or after August 1, 1979, and before July 1, 1982. Revenues derived from tax increment 
163.13 	for that district must be treated for purposes of any law as revenue of a tax increment 
163.14 	financing district for which the request for certification was made during that time period.

163.15 	EFFECTIVE DATE. This section is effective upon approval by the governing 
163.16 	body of the city of St. Cloud and compliance with Minnesota Statutes, section 645.021, 
163.17 	subdivision 3.

163.18 	Sec. 13. DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY; TAX 
163.19 	INCREMENT FINANCING DISTRICT.
 163.20 		Subdivision 1.Authorization. Notwithstanding the provisions of any other law, 
163.21 	the Dakota County Community Development Agency may establish a redevelopment tax 
163.22 	increment financing district comprised of the properties that were:
163.23 	(1) included in the CDA 10 Robert and South Street district in the city of West 
163.24 	St. Paul; and
163.25 	(2) not decertified before July 1, 2012.
163.26 	The district created under this section terminates no later than December 31, 2018.
163.27 		Subd. 2.Special rules. The requirements for qualifying a redevelopment district 
163.28 	under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located 
163.29 	within the district. Minnesota Statutes, section 469.176, subdivision 4j, do not apply to the 
163.30 	district. The original tax capacity of the district is $93,239.
163.31 		Subd. 3.Authorized expenditures. Tax increment from the district may be 
163.32 	expended to pay for any eligible activities authorized by Minnesota Statutes, chapter 469, 
163.33 	within the redevelopment area that includes the district, provided that the boundaries of 
164.1 	the redevelopment area may not be expanded to add new area after April 1, 2013. All 
164.2 	expenditures for eligible activities are deemed to be activities within the district under 
164.3 	Minnesota Statutes, section 469.1763, subdivisions 2 to 4.
164.4 		Subd. 4.Adjusted net tax capacity. The captured tax capacity of the district must 
164.5 	be included in the adjusted net tax capacity of the city, county, and school district for the 
164.6 	purposes of determining local government aid, education aid, and county program aid. 
164.7 	The county auditor shall report to the commissioner of revenue the amount of the captured 
164.8 	tax capacity for the district at the time the assessment abstracts are filed.

164.9 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
164.10 	body of the Dakota County Community Development Agency with the requirements of 
164.11 	Minnesota Statutes, section 645.021, subdivision 3.

164.12 	Sec. 14. CITY OF GLENCOE; TAX INCREMENT FINANCING DISTRICT 
164.13 	EXTENSION.
 164.14 		Subdivision 1.Duration of district. Notwithstanding the provisions of Minnesota 
164.15 	Statutes, section 469.176, subdivision 1b, paragraph (a), clause (4), or any other law to the 
164.16 	contrary, the city of Glencoe may collect tax increments from Tax Increment Financing 
164.17 	District No. 4 (McLeod County District No. 007) through December 31, 2023, subject to 
164.18 	the conditions in subdivision 2.
164.19 		Subd. 2.Exclusive use of revenues. (a) All tax increments derived from Tax 
164.20 	Increment Financing District No. 4 (McLeod County District No. 007) that are collected 
164.21 	after December 31, 2013, must be used only to pay debt service on or to defease bonds that 
164.22 	were outstanding on January 1, 2013 and that were issued to finance improvements serving:
164.23 	(1) Tax Increment Financing District No. 14 (McLeod County District No. 033) 
164.24 	(Downtown);
164.25 	(2) Tax Increment Financing District No. 15 (McLeod County District No. 035) 
164.26 	(Industrial Park); and
164.27 	(3) benefited properties as further described in proceedings related to the city's series 
164.28 	2007A bonds, dated September 1, 2007, and any bonds issued to refund those bonds.
164.29 	(b) Increments may also be used to pay debt service on or to defease bonds issued to 
164.30 	refund the bonds described in paragraph (a), if the refunding bonds do not increase the 
164.31 	present value of debt service due on the refunded bonds when the refunding is closed.
164.32 	(c) When the bonds described in paragraphs (a) and (b) have been paid or defeased, 
164.33 	the district must be decertified and any remaining increment returned to the city, county, 
164.34 	and school district as provided in Minnesota Statutes, section 469.176, subdivision 2, 
164.35 	paragraph (c), clause (4).

165.1 	EFFECTIVE DATE. This section is effective upon compliance by the governing 
165.2 	bodies of the city of Glencoe, McLeod County, and Independent School District No. 
165.3 	2859 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 
165.4 	645.021, subdivision 3.

165.5 	Sec. 15. CITY OF ELY; TAX INCREMENT FINANCING.
 165.6 		Subdivision 1.Extension of district. Notwithstanding Minnesota Statutes, section 
165.7 	469.176, subdivision 1b, or any other law to the contrary, the city of Ely may collect 
165.8 	tax increment from Tax Increment Financing District No. 1 through December 31, 
165.9 	2021. Increments from the district may only be used to pay binding obligations and 
165.10 	administrative expenses.
165.11 		Subd. 2.Binding obligations. For purposes of this section, "binding obligations" 
165.12 	means the binding contractual or debt obligation of Tax Increment Financing District 
165.13 	No. 1 entered into before January 1, 2013.
165.14 		Subd. 3.Expenditures outside district. Notwithstanding Minnesota Statutes, 
165.15 	section 469.1763, subdivision 2, the governing body of the city of Ely may elect to 
165.16 	transfer revenues derived from increments from its Tax Increment Financing District No. 
165.17 	3 to the tax increment account established under Minnesota Statutes, section 469.177, 
165.18 	subdivision 5, for Tax Increment Financing District No. 1. The amount that may be 
165.19 	transferred is limited to the lesser of:
165.20 	(1) $168,000; or
165.21 	(2) the total amount due on binding obligations and outstanding on that date, less the 
165.22 	amount of increment collected by Tax Increment Financing District No. 1 after December 
165.23 	31, 2012, and administrative expenses of Tax Increment Financing District No. 1 incurred 
165.24 	after December 31, 2012.

165.25 	EFFECTIVE DATE. This section is effective upon approval by the governing 
165.26 	bodies of the city of Ely, St. Louis County, and Independent School District No. 696 with 
165.27 	the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021, 
165.28 	subdivision 3. 

165.29 	Sec. 16. CITY OF MAPLEWOOD; TAX INCREMENT FINANCING 
165.30 	DISTRICT; SPECIAL RULES.
 165.31 	(a) If the city of Maplewood elects, upon the adoption of a tax increment financing 
165.32 	plan for a district, the rules under this section apply to one or more redevelopment 
165.33 	tax increment financing districts established by the city or the economic development 
165.34 	authority of the city. The area within which the redevelopment tax increment districts may 
166.1 	be created is parcel 362922240002 (the "parcel") or any replatted parcels constituting a 
166.2 	part of the parcel and the adjacent rights-of-way. For purposes of this section, the parcel is 
166.3 	the "3M Renovation and Retention Project Area" or "project area."
166.4 	(b) The requirements for qualifying redevelopment tax increment districts under 
166.5 	Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcel, which is 
166.6 	deemed eligible for inclusion in a redevelopment tax increment district.
166.7 	(c) The 90 percent rule under Minnesota Statutes, section 469.176, subdivision 
166.8 	4j, does not apply to the parcel.
166.9 	(d) The expenditures outside district rule under Minnesota Statutes, section 
166.10 	469.1763, subdivision 2, does not apply; the five-year rule under Minnesota Statutes, 
166.11 	section 469.1763, subdivision 3, is extended to ten years; and expenditures must only 
166.12 	be made within the project area.
166.13 	(e) If, after one year from the date of certification of the original net tax capacity 
166.14 	of the tax increment district, no demolition, rehabilitation, or renovation of property has 
166.15 	been commenced on a parcel located within the tax increment district, no additional tax 
166.16 	increment may be taken from that parcel, and the original net tax capacity of the parcel 
166.17 	shall be excluded from the original net tax capacity of the tax increment district. If 3M 
166.18 	Company subsequently commences demolition, rehabilitation, or renovation, the authority 
166.19 	shall certify to the county auditor that the activity has commenced, and the county auditor 
166.20 	shall certify the net tax capacity thereof as most recently certified by the commissioner 
166.21 	of revenue and add it to the original net tax capacity of the tax increment district. The 
166.22 	authority must submit to the county auditor evidence that the required activity has taken 
166.23 	place for each parcel in the district.
166.24 	(f) The authority to approve a tax increment financing plan and to establish a tax 
166.25 	increment financing district under this section expires December 31, 2018.

166.26 	EFFECTIVE DATE. This section is effective upon approval by the governing 
166.27 	body of the city of Maplewood and upon compliance with Minnesota Statutes, section 
166.28 	645.021, subdivision 3.

166.29 	Sec. 17. CITY OF MINNEAPOLIS; STREETCAR FINANCING.
 166.30 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
166.31 	have the meanings given them.
166.32 	(b) "City" means the city of Minneapolis.
166.33 	(c) "County" means Hennepin County.
166.34 	(d) "District" means the areas certified by the city under subdivision 2 for collection 
166.35 	of value capture taxes.
167.1 	(e) "Project area" means the area including one city block on either side of a streetcar 
167.2 	line designated by the city to serve the downtown and adjacent neighborhoods of the city.
167.3 		Subd. 2.Authority to establish district. (a) The governing body of the city may, by 
167.4 	resolution, establish a value capture district consisting of some or all of the taxable parcels 
167.5 	located within one or more of the following areas of the city, as described in the resolution:
167.6 	(1) the area bounded by Nicollet Avenue on the west, 16th Street East on the south, 
167.7 	First Avenue South on the east, and 14th Street East on the north;
167.8 	(2) the area bounded by Spruce Place on the west, 14th Street West on the south, 
167.9 	LaSalle Avenue on the east, and Grant Street West on the north;
167.10 	(3) the area bounded by Nicollet Avenue or Mall on the west, Fifth Street South on 
167.11 	the south, Marquette Avenue on the east, and Fourth Street South on the north; and
167.12 	(4) the area bounded by First Avenue North on the west, Washington Avenue on the 
167.13 	south, Hennepin Avenue on the east, and Second Street North on the north.
167.14 	(b) The city may establish the district and the project area only after holding a public 
167.15 	hearing on its proposed creation after publishing notice of the hearing and the proposal at 
167.16 	least once not less than ten days nor more than 30 days before the date of the hearing.
167.17 		Subd. 3.Calculation of value capture district; administrative provisions. (a) If 
167.18 	the city establishes a value capture district under subdivision 2, the city shall request the 
167.19 	county auditor to certify the district for calculation of the district's tax revenues.
167.20 	(b) For purposes of calculating the tax revenues of the district, the county auditor 
167.21 	shall treat the district as if it were a request for certification of a tax increment financing 
167.22 	district under the provisions of Minnesota Statutes, section 469.177, subdivision 1, 
167.23 	and shall calculate the tax revenues of the district for each year of its duration under 
167.24 	subdivision 4 as equaling the amount of tax increment that would be computed by 
167.25 	applying the provisions of Minnesota Statutes, section 469.177, subdivisions 1, 2, and 
167.26 	3, to determine captured tax capacity and multiplying by the current tax rate, excluding 
167.27 	the state general tax rate. The city shall provide the county auditor with the necessary 
167.28 	information to certify the district, including the option for calculating revenues derived 
167.29 	from the areawide tax rate under Minnesota Statutes, chapter 473F.
167.30 	(c) The county auditor shall pay to the city at the same times provided for settlement 
167.31 	of taxes and payment of tax increments the tax revenues of the district. The city must use 
167.32 	the tax revenues as provided under subdivision 4.
167.33 		Subd. 4.Permitted uses of district tax revenues. (a) In addition to paying for 
167.34 	reasonable administrative costs of the district, the city may spend tax revenues of the 
167.35 	district for property acquisition, improvements, and equipment to be used for operations 
167.36 	within the project area, along with related costs, for:
168.1 	(1) planning, design, and engineering services related to the construction of the 
168.2 	streetcar line;
168.3 	(2) acquiring property for, constructing, and installing a streetcar line;
168.4 	(3) acquiring and maintaining equipment and rolling stock and related facilities, such 
168.5 	as maintenance facilities, which need not be located in the project area;
168.6 	(4) acquiring, constructing, or improving transit stations; and
168.7 	(5) acquiring or improving public space, including the construction and installation 
168.8 	of improvements to streets and sidewalks, decorative lighting and surfaces, and plantings 
168.9 	related to the streetcar line.
168.10 	(b) The city may issue bonds or other obligations under Minnesota Statutes, chapter 
168.11 	475, without an election, to fund acquisition or improvement of property of a capital 
168.12 	nature authorized by this section, including any costs of issuance. The city may also issue 
168.13 	bonds or other obligations to refund those bonds or obligations. Payment of principal 
168.14 	and interest on the bonds or other obligations issued under this paragraph is a permitted 
168.15 	use of the district's tax revenues.
168.16 	(c) Tax revenues of the district may not be used for the operation of the streetcar line.
168.17 		Subd. 5.Duration of the district. A district established under this section is limited 
168.18 	to the lesser of (1) 25 years of tax revenues, or (2) the time necessary to collect tax revenues 
168.19 	equal to the amount of the capital costs permitted under subdivision 4 or the amount needed 
168.20 	to pay or defease bonds or other obligations issued under subdivision 4, whichever is later.

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

168.22 	Sec. 18. CITY OF BLOOMINGTON; OLD CEDAR AVENUE BRIDGE.
 168.23 	(a) Notwithstanding any law to the contrary, the city of Bloomington shall transfer 
168.24 	from the tax increment financing accounts for its Tax Increment Financing District No. 
168.25 	1-C and Tax Increment Financing District No. 1-G an amount equal to the tax increment 
168.26 	for each district that is computed under the provisions of Minnesota Statutes, section 
168.27 	473F.08, subdivision 3c, for taxes payable in 2014 to an account or fund established for 
168.28 	the repair, restoration, or replacement of the Old Cedar Avenue bridge for use by bicycle 
168.29 	commuters and recreational users. The city is authorized to and must use the transferred 
168.30 	funds to complete the repair, renovation, or replacement of the bridge.
168.31 	(b) No signs, plaques, or markers acknowledging or crediting donations for, 
168.32 	sponsorships of, or naming rights may be posted on or in the vicinity of the Old Cedar 
168.33 	Avenue bridge.

169.1 	EFFECTIVE DATE. This section is effective upon compliance by the city of 
169.2 	Bloomington with the requirements of Minnesota Statutes, section 645.021, subdivision 3.

169.3 	ARTICLE 10
169.4 	DESTINATION MEDICAL CENTER

169.5 	Section 1. Minnesota Statutes 2012, section 297A.71, is amended by adding a 
169.6 	subdivision to read:
169.7 		Subd. 45.Construction materials, public infrastructure related to the 
169.8 	Destination medical center. Materials and supplies used in, and equipment incorporated 
169.9 	into, the construction and improvement of publicly owned buildings and infrastructure 
169.10 	included in the development plan adopted under section 469.42, and financed with public 
169.11 	funds, are exempt.

169.12 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
169.13 	June 30, 2015.

169.14 	Sec. 2. [469.40] DEFINITIONS.
169.15 		Subdivision 1.Application. For the purposes of section 469.40 to 469.46, the terms 
169.16 	defined in this section have the meanings given them.
169.17 		Subd. 2.City. "City" means the city of Rochester.
169.18 		Subd. 3.County. "County" means Olmsted County.
169.19 		Subd. 4.Destination Medical Center Corporation, corporation, DMCC.
 169.20 	"Destination Medical Center Corporation," "corporation," or "DMCC" means the 
169.21 	nonprofit corporation created by the city as provided in section 469.41, and organized 
169.22 	under chapter 317A.
169.23 		Subd. 5.Destination medical center development district. "Destination medical 
169.24 	center development district" or "development district" means a geographic area in the 
169.25 	city identified in the adopted DMCC development plan in which public infrastructure 
169.26 	projects are implemented.
169.27 		Subd. 6.Development plan. "Development plan" means the plan adopted by 
169.28 	the DMCC under section 469.42.
169.29 		Subd. 7.Medical business entity. "Medical business entity" means a medical 
169.30 	business entity with its principal place of business in the city that, as of the effective date 
169.31 	of this section, together with all business entities of which it is the sole member or sole 
169.32 	shareholder, collectively employs more than 30,000 persons in the state.
170.1 		Subd. 8.Public infrastructure project. (a) "Public infrastructure project" means 
170.2 	a project financed in part or whole with public money in order to support the medical 
170.3 	business entity's development plans, as identified in the adopted DMCC development 
170.4 	plan. A project may be to:
170.5 	(1) acquire real property and other assets associated with the real property;
170.6 	(2) demolish, repair, or rehabilitate buildings;
170.7 	(3) remediate land and buildings as required to prepare the property for acquisition 
170.8 	or development;
170.9 	(4) install, construct, or reconstruct elements of public infrastructure required to 
170.10 	support the overall development of the destination medical center development district, 
170.11 	including, but not limited to, streets, roadways, utilities systems and related facilities, 
170.12 	utility relocations and replacements, network and communication systems, streetscape 
170.13 	improvements, drainage systems, sewer and water systems, subgrade structures and 
170.14 	associated improvements, landscaping, faÃ§ade construction and restoration, wayfinding 
170.15 	and signage, and other components of community infrastructure;
170.16 	(5) acquire, construct or reconstruct, and equip parking facilities and other facilities 
170.17 	to encourage intermodal transportation and public transit;
170.18 	(6) install, construct or reconstruct, furnish, and equip parks, cultural, and 
170.19 	recreational facilities, facilities to promote tourism and hospitality, conferencing and 
170.20 	conventions, broadcast and related multimedia infrastructure;
170.21 	(7) make related site improvements, including, without limitation, excavation, earth 
170.22 	retention, soil stabilization and correction, site improvements to support the destination 
170.23 	medical center development district; and
170.24 	(8) prepare land for private development and to sell or lease land.
170.25 	(b) A public infrastructure project is not a business subsidy under section 116J.993.

170.26 	Sec. 3. [469.41] DESTINATION MEDICAL CENTER CORPORATION 
170.27 	ESTABLISHED.
170.28 		Subdivision 1.DMCC created. The city shall establish a destination medical 
170.29 	center corporation as a nonprofit corporation under chapter 317A to provide the city with 
170.30 	expertise in preparing and implementing the development plan to establish the city as a 
170.31 	destination medical center. Except as provided in this article, the nonprofit corporation 
170.32 	is not subject to laws governing the city.
170.33 		Subd. 2.Membership. (a) The corporation's governing board consists of nine 
170.34 	voting members, as follows:
171.1 	(1) the mayor of the city, or the mayor's designee, subject to approval by the city 
171.2 	council;
171.3 	(2) a member of the city council, selected by the city council; 
171.4 	(3) a member of the county board, selected by the county board;
171.5 	(4) two representatives of the medical business entity defined in section 469.40, 
171.6 	subdivision 7, appointed by the city council from among five candidates nominated by the 
171.7 	medical business entity;
171.8 	(5) two representatives of the city business community other than the medical 
171.9 	business entity, appointed by the city council from among five candidates nominated by 
171.10 	the Rochester Area Chamber of Commerce; and 
171.11 	(6) two members, appointed by the governor.
171.12 	(b) Appointing authorities must make their appointments as soon as practicable after 
171.13 	the effective date of this section.
171.14 		Subd. 3.Bylaws. The corporation shall adopt bylaws governing the terms of 
171.15 	members, filling vacancies, removal of members, selection of officers and other personnel 
171.16 	and contractors, and other matters of organization and operation of the corporation.
171.17 		Subd. 4.Open meeting law; data practices. Meetings of the corporation and any 
171.18 	committee or subcommittee of the corporation are subject to the open meeting law in 
171.19 	chapter 13D. The corporation is a government entity for purposes of chapter 13.
171.20 		Subd. 5.Conflicts of interest. Except for the members appointed under subdivision 
171.21 	2, paragraph (a), clause (4), to represent the medical business entity, within one year 
171.22 	prior to or at any time during a member's term of service on the corporation's governing 
171.23 	board, a member must not be employed by, be a member of the board of directors of, or 
171.24 	otherwise be a representative of the medical business entity. No member may serve as a 
171.25 	lobbyist, as defined under section 10A.01, subdivision 21.
171.26 		Subd. 6.Powers; gifts. The corporation may exercise any other powers that are 
171.27 	granted by its articles of incorporation and bylaws to the extent that those powers are not 
171.28 	inconsistent with the provisions of sections 469.40 to 469.46. Notwithstanding any law to 
171.29 	the contrary, the corporation may accept and use gifts of money or in-kind and may use 
171.30 	any of its money or assets, other than money or assets received from the city, county, or 
171.31 	state, to develop and implement the adopted development plan.
171.32 		Subd. 7.Dissolution. The city shall provide for the terms for dissolution of the 
171.33 	corporation in the articles of incorporation. 

171.34 	Sec. 4. [469.42] DEVELOPMENT PLAN.
172.1 		Subdivision 1.Development plan; adoption by DMCC; notice; findings. (a) 
172.2 	The corporation shall prepare and adopt a development plan. The corporation must 
172.3 	hold a public hearing before adopting a development plan. At least 45 days before the 
172.4 	hearing, the corporation shall make copies of the proposed plan available to the public at 
172.5 	the corporation and city offices during normal business hours, on the corporation's and 
172.6 	city's Web site, and as otherwise determined appropriate by the corporation. At least ten 
172.7 	days before the hearing, the corporation shall publish notice of the hearing in a daily 
172.8 	newspaper of general circulation in the city. The development plan may not be adopted 
172.9 	unless the corporation finds by resolution that:
172.10 	(1) the plan provides an outline for the development of the city as a destination 
172.11 	medical center, and the plan is sufficiently complete, including the identification of planned 
172.12 	and anticipated projects, to indicate its relationship to definite state and local objectives;
172.13 	(2) the proposed development affords maximum opportunity, consistent with the 
172.14 	needs of the city, county, and state, for the development of the city by private enterprise 
172.15 	as a destination medical center;
172.16 	(3) the proposed development conforms to the general plan for the development of 
172.17 	the city and is consistent with the city comprehensive plan;
172.18 	(4) the plan includes:
172.19 	(i) strategic planning consistent with a destination medical center in the core areas of 
172.20 	commercial research and technology, learning environment, hospitality and convention, 
172.21 	sports and recreation, livable communities, including mixed-use urban development 
172.22 	and neighborhood residential development, retail/dining/entertainment, and health and 
172.23 	wellness;
172.24 	(ii) estimates of short- and long-range fiscal and economic impacts;
172.25 	(iii) a framework to identify and prioritize short- and long-term public investment 
172.26 	and public infrastructure project development and to facilitate private investment and 
172.27 	development;
172.28 	(iv) land use planning;
172.29 	(v) transportation and transit planning;
172.30 	(vi) operational planning required to support the medical center development 
172.31 	district; and
172.32 	(vii) ongoing market research plans; and
172.33 	(5) the city has approved the plan.
172.34 	(b) The identification of planned and anticipated projects under paragraph (a), clause 
172.35 	(1), must give priority to projects that will pay wages at least equal to the basic cost of 
172.36 	living wage as calculated by the commissioner of employment and economic development 
173.1 	for the county in which the project is located. The calculation of the basic cost of living 
173.2 	wage shall be done as provided for under Minnesota Statutes, section 116J.013, if enacted 
173.3 	by the 2013 legislature.
173.4 		Subd. 2.Modification of development plan. The corporation may modify the 
173.5 	development plan at any time. The corporation must update the development plan not less 
173.6 	than every five years. A modification or update under this subdivision must be adopted by 
173.7 	the corporation upon the notice and after the public hearing and findings required for the 
173.8 	original adoption of the development plan.
173.9 		Subd. 3.Medical center development districts; creation; notice; findings. As 
173.10 	part of the development plan, the corporation may create and define the boundaries of 
173.11 	medical center development districts and subdistricts at any place or places within the 
173.12 	city. Projects may be undertaken within defined medical center development districts 
173.13 	consistent with the development plan.
173.14 		Subd. 4.DMCC consultant. (a) The corporation may engage a business entity 
173.15 	consultant to provide experience and expertise in developing the destination medical 
173.16 	center. The consultant may assist the corporation in preparing the development plan and 
173.17 	provide services to assist the corporation or city in implementing, consistent with the 
173.18 	development plan, the goals, objectives, and strategies in the development plan, including, 
173.19 	but not limited to:
173.20 	(1) developing and updating the criteria for evaluating and underwriting 
173.21 	development proposals;
173.22 	(2) implementing the development plan, including soliciting and evaluating 
173.23 	proposals for development and evaluating and making recommendations to the corporation 
173.24 	and the city regarding those proposals;
173.25 	(3) providing transactional services in connection with approved projects;
173.26 	(4) developing patient, visitor, and community outreach programs for a destination 
173.27 	medical center development district;
173.28 	(5) working with the corporation to acquire and facilitate the sale, lease, or other 
173.29 	transactions involving land and real property;
173.30 	(6) seeking financial support for the corporation, the city, and a project;
173.31 	(7) partnering with other development agencies and organizations and the county in 
173.32 	joint efforts to promote economic development and establish a destination medical center;
173.33 	(8) supporting and administering the planning and development activities required to 
173.34 	implement the development plan;
173.35 	(9) preparing and supporting the marketing and promotion of the medical center 
173.36 	development district;
174.1 	(10) preparing and implementing a program for community and public relations in 
174.2 	support of the medical center development district;
174.3 	(11) assisting the corporation or city and others in applications for federal grants, tax 
174.4 	credits, and other sources of funding to aid both private and public development; and
174.5 	(12) making other general advisory recommendations to the corporation and the 
174.6 	city, as requested.
174.7 	(b) The corporation may contract with the consultant to provide administrative 
174.8 	services to the corporation with regard to the destination medical center plan 
174.9 	implementation. The corporation may pay for those services out of any revenue sources 
174.10 	available to it.
174.11 		Subd. 5.Audit of consultant contracts. Any contract for services between the 
174.12 	corporation and a consultant paid, in whole or in part, with public money gives the 
174.13 	corporation, the city, and the state auditor the right to audit the books and records of the 
174.14 	consultant that are necessary to certify (1) the nature and extent of the services furnished 
174.15 	pursuant to the contract, and (2) that the payment for services and related disbursements 
174.16 	complies with all state laws, regulations, and the terms of the contract. Any contract for 
174.17 	services between the corporation and the consultant paid, in whole or in part, with public 
174.18 	money shall require the corporation to maintain for the life of the corporation accurate and 
174.19 	complete books and records directly relating to the contract.
174.20 		Subd. 6.Report. By January 15 of each year, the corporation and city must submit 
174.21 	a report to the chairs and ranking minority members of the legislative committees with 
174.22 	jurisdiction over local and state government operations, economic development, and taxes, 
174.23 	and to the commissioners of revenue and employment and economic development, and 
174.24 	the county. The corporation and city must also submit the report as provided in section 
174.25 	3.195. The report must include:
174.26 	(1) the adopted development plan and any proposed changes to the development plan;
174.27 	(2) progress of projects identified in the development plan;
174.28 	(3) actual costs and financing sources, including the amount paid with state aid under 
174.29 	section 469.46 and required local contributions, of projects completed in the previous two 
174.30 	years by the corporation, city, the county, and the medical business entity;
174.31 	(4) estimated costs and financing sources for projects to be begun in the next two 
174.32 	years by the corporation, city, the county, and the medical business entity; and
174.33 	(5) debt service schedules for all outstanding obligations of the city for debt issued 
174.34 	for projects identified in the plan.

174.35 	Sec. 5. [469.43] CITY POWERS, DUTIES; AUTHORITY TO ISSUE BONDS.
175.1 		Subdivision 1.Port authority powers. The city may exercise the powers of a 
175.2 	port authority under sections 469.048 to 469.068, for the purposes of implementing the 
175.3 	destination medical center development plan.
175.4 		Subd. 2.Support to the corporation. The city may provide financial and 
175.5 	administrative support and office and other space to the corporation. The city may 
175.6 	appropriate money of the city to the corporation for its work. 
175.7 		Subd. 3.City to issue debt. The city may issue general obligation bonds, revenue 
175.8 	bonds, or other obligations, as it determines appropriate, to finance public infrastructure 
175.9 	projects, as provided by chapter 475. Notwithstanding section 475.53 obligations issued 
175.10 	under this section are not subject to the limits on net debt, regardless of their source of 
175.11 	security or payment. Notwithstanding section 475.58 or any other law or charter provision 
175.12 	to the contrary, issuance of obligations under the provisions of this section are not subject 
175.13 	to approval of the electors. The city may pledge any of its revenues, including property 
175.14 	taxes, the taxes authorized by sections 469.44 and 469.45, and the state aid under section 
175.15 	469.46, as security for and to pay the obligations. The city must not issue obligations that 
175.16 	are only payable from or secured by state aid under section 469.46.
175.17 		Subd. 4.American made steel. The city must require that a public infrastructure 
175.18 	project use American steel products to the extent practicable. In determining whether it 
175.19 	is practicable, the city may consider the exceptions to the requirement in Public Law 
175.20 	111-5, section 1605.

175.21 	Sec. 6. [469.44] CITY TAX AUTHORITY.
175.22 		Subdivision 1.Rochester, other local taxes authorized. (a) Notwithstanding 
175.23 	section 477A.016, or any other contrary provision of law, ordinance, or city charter, and in 
175.24 	addition to any taxes the city may impose on these transactions under another statute or 
175.25 	law, the city of Rochester may, by ordinance impose at a rate or rates, determined by the 
175.26 	city, any of the following taxes:
175.27 	(1) a tax on the gross receipts from the furnishing for consideration of lodging and 
175.28 	related services as defined in section 297A.61, subdivision 3, paragraph (g), clause (2); the 
175.29 	city may choose to impose a differential tax based on the number of rooms in the facility;
175.30 	(2) a tax on the gross receipts of food and beverages sold primarily for consumption 
175.31 	on the premises by restaurants and places of refreshment that occur in the city of 
175.32 	Rochester; the city may elect to impose the tax in a defined district of the city; and
175.33 	(3) a tax on the admission receipts to entertainment and recreational facilities, as 
175.34 	defined by ordinance, in the city of Rochester.
176.1 	(b) The provisions of section 297A.99, subdivisions 4 to 13, govern the 
176.2 	administration, collection, and enforcement of any tax imposed by the city under 
176.3 	paragraph (a).
176.4 	(c) The proceeds of any taxes imposed under this subdivision, less refunds and costs 
176.5 	of collection, must be used by the city to fund obligations related to public infrastructure 
176.6 	projects contained in the development plan, including any associated financing costs. Any 
176.7 	tax imposed under paragraph (a) expires at the earlier of December 31, 2041, or when the 
176.8 	city council determines that sufficient funds have been raised from the tax plus all other 
176.9 	local funding sources authorized in this article to meet the city obligation for financing a 
176.10 	public infrastructure project contained in the development plan, including any associated 
176.11 	financing costs.
176.12 		Subd. 2.General sales tax authority. The city may elect to extend the existing 
176.13 	local sales and use tax under section 11 or to impose an additional rate of up to one-half of 
176.14 	one percent tax on sales and use under section 9.
176.15 		Subd. 3.Special abatement rules. (a) If the city or the county elects to use tax 
176.16 	abatement under sections 469.1812 to 469.1815 to finance costs of public infrastructure 
176.17 	projects, the special rules under this subdivision apply.
176.18 	(b) The limitations under section 469.1813, subdivision 6, do not apply to the city 
176.19 	or the county.
176.20 	(c) The limitations under section 469.1813, subdivision 8, do not apply and property 
176.21 	taxes abated by the city or the county to finance costs of public infrastructure projects are 
176.22 	not included for purposes of applying section 469.1813, subdivision 8, to the use of tax 
176.23 	abatement for other purposes of the city or the county; however, the total amount of property 
176.24 	taxes abated by the city and the county under this authority must not exceed $87,750,000.
176.25 		Subd. 4.Special tax increment financing rules. If the city elects to establish 
176.26 	a redevelopment tax increment financing district or districts within the area of the 
176.27 	destination medical center development district, the requirements of section 469.174, 
176.28 	subdivision 10, restricting the geographic areas that may be designated as a district do not 
176.29 	apply and increments from the district are not required to be spent in accordance with the 
176.30 	requirements of section 469.176, subdivision 4j.

176.31 	Sec. 7. [469.45] COUNTY TAX AUTHORITY.
176.32 	(a) Notwithstanding sections 297A.99, 297A.993, and 477A.016, or any other 
176.33 	contrary provision of law, ordinance, or charter, and in addition to any taxes the county 
176.34 	may impose under another law or statute, the board of commissioners of Olmsted County 
176.35 	may, by resolution, impose a transit tax of up to one quarter of one percent on retail sales 
177.1 	and uses taxable under chapter 297A. The provisions of section 297A.99, subdivisions 
177.2 	4 to 13, govern the imposition, administration, collection, and enforcement of the tax 
177.3 	authorized under this paragraph.
177.4 	(b) The board of commissioners of Olmsted County may, by resolution, levy an 
177.5 	annual wheelage tax of up to $10 on each motor vehicle kept in the county when not in 
177.6 	operation which is subject to annual registration and taxation under chapter 168. The 
177.7 	wheelage tax shall not be imposed on the vehicles exempt from wheelage tax under 
177.8 	section 163.051, subdivision 1. The board by resolution may provide for collection of 
177.9 	the wheelage tax by county officials or it may request that the tax be collected by the 
177.10 	state registrar on behalf of the county. The provisions of section 163.051, subdivisions 
177.11 	2, 2a, 3, and 7, shall govern the administration, collection, and enforcement of the tax 
177.12 	authorized under this paragraph.
177.13 	(c) The proceeds of any taxes imposed under this subdivision, less refunds and 
177.14 	costs of collection, must be first used by the county to meet its share of obligations for 
177.15 	financing transit infrastructure related to the public infrastructure projects contained in 
177.16 	the development plan, including any associated financing costs. Revenues collected in 
177.17 	any calendar year in excess of the county obligation to pay for projects contained in the 
177.18 	development plan may be retained by the county and used for funding other transportation 
177.19 	projects, including roads and bridges, airport and transit improvements.
177.20 	(d) Any taxes imposed under paragraph (a), expire December 31, 2041, or at an 
177.21 	earlier time if approved by resolution of the county board of commissioners. However, 
177.22 	the taxes may not terminate before the county board of commissioners determines that 
177.23 	revenues from these taxes and any other revenue source the county dedicates are sufficient 
177.24 	to pay the county share of transit project costs and associated financing costs under the 
177.25 	adopted development plan.

177.26 	Sec. 8. [469.46] STATE INFRASTRUCTURE AID.
177.27 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
177.28 	have the meanings given them.
177.29 	(b) "Commissioner" means the commissioner of employment and economic 
177.30 	development.
177.31 	(c) "Construction projects" means construction of buildings in the city for which the 
177.32 	building permit was issued after June 30, 2013.
177.33 	(d) "Expenditures" means expenditures made by a medical business entity, including 
177.34 	any affiliated entities, on construction projects for the capital cost of the project, including 
177.35 	but not limited to:
178.1 	(1) design and predesign, including architectural, engineering, and similar services;
178.2 	(2) legal, regulatory, and other compliance costs of the project;
178.3 	(3) land acquisition, demolition of existing improvements, and other site preparation 
178.4 	costs;
178.5 	(4) construction costs including all materials and supplies of the project; and
178.6 	(5) equipment and furnishings that are attached to or become part of the real property.
178.7 	Expenditures exclude supplies and other items with a useful life of less than a year that 
178.8 	are not used or consumed in constructing improvements to real property or are otherwise 
178.9 	chargeable to capital costs.
178.10 	(e) "Qualified expenditures" has the following meaning. In the first year in which 
178.11 	aid is paid under this section "qualified expenditures" mean the total certified expenditures 
178.12 	since June 30, 2013, through the end of the previous calendar year minus $200,000,000. 
178.13 	For subsequent years "qualified expenditures" mean the certified expenditures for the 
178.14 	previous calendar year.
178.15 	(f) "Transit costs" means the portions of a public infrastructure project that are for 
178.16 	public transit intended primarily to serve the district, such as transit stations, equipment, 
178.17 	right-of-way, and similar costs.
178.18 		Subd. 2.Certification of expenditures. By April 1 of each year, the medical 
178.19 	business entity must certify to the commissioner the amount of expenditures made in the 
178.20 	prior calendar year. The certification must be made in the form that the commissioner 
178.21 	prescribes and include any documentation of and supporting information regarding the 
178.22 	expenditures that the commissioner requires. By August 1 of each year, the commissioner 
178.23 	shall determine the amount of the expenditures for the prior calendar year.
178.24 		Subd. 3.General state infrastructure aid. (a) General state infrastructure aid may 
178.25 	not be paid out under this section until total expenditures exceed $200,000,000.
178.26 	(b) The amount of the general state infrastructure aid for a fiscal year equals the sum 
178.27 	of qualified expenditures, multiplied by 2.75 percent. The maximum amount of general 
178.28 	state aid payable in any year is limited to no more than $30,000,000. If the aid entitlement 
178.29 	for the year exceeds the maximum annual limit, the excess is an aid carryover to later 
178.30 	years. The carryover aid must be paid in the first year in which the aid entitlement for the 
178.31 	current year is less than the maximum annual limit, but only to the extent the carryover, 
178.32 	when added to the current year aid, is less than the maximum annual limit.
178.33 	(c) If the commissioner determines that the city has made the required matching 
178.34 	local contribution under subdivision 4, the commissioner shall pay to the city the amount 
178.35 	of general state infrastructure aid for the year by September 1. 
179.1 	(d) The city must use general state infrastructure aid it receives under this 
179.2 	subdivision for improvements and other capital costs related to the public infrastructure 
179.3 	project, other than transit costs. The city shall maintain appropriate records to document 
179.4 	the use of the funds under this requirement.
179.5 	(e) The commissioner, in consultation with the commissioner of management and 
179.6 	budget and representatives of the city and the corporation, shall establish a total limit on 
179.7 	the amount of state aid payable under this subdivision that is sufficient, in combination 
179.8 	with the local contribution, to pay for $455,000,000 of general public infrastructure 
179.9 	projects, plus financing costs.
179.10 		Subd. 4.General aid; local matching contribution. In order to qualify for general 
179.11 	state infrastructure aid, the city must enter a written agreement with the commissioner that 
179.12 	requires the city to make a qualifying local matching contribution to pay for $128,000,000 
179.13 	of the cost of public infrastructure projects, including associated financing costs, using 
179.14 	funds other than state aid received under this section. This agreement must provide for the 
179.15 	manner, timing, and amounts of the city contributions, including the city's commitment for 
179.16 	each year. The commissioner and city may agree to amend the agreement at any time in 
179.17 	light of new information or other appropriate factors. The city may enter arrangements 
179.18 	with the county to pay for or otherwise meet the local matching contribution requirement.
179.19 		Subd. 5.State transit aid. (a) The city qualifies for state transit aid under this 
179.20 	section if: 
179.21 	(1) the county has elected to impose the transit sales tax under section 469.45 for a 
179.22 	calendar year; and
179.23 	(2) the county contributes the required local matching contribution under subdivision 
179.24 	6 or the city or county have agreed to make an equivalent contribution out of other funds.
179.25 	(b) The amount of the state transit aid for a fiscal year equals the sum of qualified 
179.26 	expenditures, as certified by the commissioner for the prior calendar year, multiplied 
179.27 	by 0.75 percent, reduced by the amount of the local contribution under subdivision 6. 
179.28 	The maximum amount of state transit aid payable in any year is limited to no more than 
179.29 	$7,500,000. If the aid entitlement for the year exceeds the maximum annual limit, the 
179.30 	excess is an aid carryover to later years. The carryover aid must be paid in the first year 
179.31 	in which the aid entitlement for the current year is less than the maximum annual limit, 
179.32 	but only to the extent the carryover, when added to the current year aid, is less than the 
179.33 	maximum annual limit.
179.34 	(c) The commissioner, in consultation with the commissioner of management and 
179.35 	budget and representatives of the city and the corporation, shall establish a total limit on 
179.36 	the amount of state aid payable under this subdivision that is sufficient, in combination 
180.1 	with the local contribution, to pay for $116,000,000 of general public infrastructure 
180.2 	projects, plus financing costs.
180.3 		Subd. 6.Transit aid; local matching contribution. (a) The required local matching 
180.4 	contribution for state transit aid equals the amount that would be raised by a 0.15 percent 
180.5 	sales tax imposed by the county in the prior calendar year. The county may impose the 
180.6 	sales tax or the wheelage tax under section 469.45 to meet this obligation.
180.7 	(b) If the county elects not to impose any of the taxes authorized under section 469.45, 
180.8 	the county or city or both may agree to make the local contribution out of other available 
180.9 	funds, other than state aid payable under this section. The commissioner of revenue shall 
180.10 	estimate the required amount and certify it to the commissioner, city, and county.
180.11 		Subd. 7.Termination. No aid may be paid under this section after fiscal year 2041.
180.12 		Subd. 8.Appropriation. An amount sufficient to pay the state general infrastructure 
180.13 	and state transit aid authorized under this section is appropriated to the commissioner 
180.14 	from the general fund.

180.15 	Sec. 9. Laws 1998, chapter 389, article 8, section 43, subdivision 1, is amended to read:
180.16 		Subdivision 1.Sales and use taxes authorized. (a) Notwithstanding Minnesota 
180.17 	Statutes, section 477A.016, or any other contrary provision of law, ordinance, or city 
180.18 	charter, upon termination of the taxes authorized under Laws 1992, chapter 511, article 
180.19 	8, section 33, subdivision 1, and if approved by the voters of the city at a general or 
180.20 	special election held within one year of the date of final enactment of this act, the city of 
180.21 	Rochester may, by ordinance, impose an additional sales and use tax of up to one-half 
180.22 	of one percent. The provisions of Minnesota Statutes, section 297A.48, 297A.99 govern 
180.23 	the imposition, administration, collection, and enforcement of the tax authorized under 
180.24 	this subdivision paragraph.
180.25 	(b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 
180.26 	other contrary provision of law, ordinance, or charter, the city of Rochester may, by 
180.27 	ordinance, impose an additional sales and use tax of up to one half of one percent. The 
180.28 	provisions of Minnesota Statutes, section 297A.99, subdivisions 1 and 4 to 13, govern 
180.29 	the imposition, administration, collection, and enforcement of the tax authorized under 
180.30 	this paragraph.

180.31 	Sec. 10. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by 
180.32 	Laws 2005, First Special Session chapter 3, article 5, section 28, and Laws 2011, First 
180.33 	Special Session chapter 7, article 4, section 5, is amended to read:
181.1 		Subd. 3.Use of revenues. (a) Revenues received from the taxes authorized by 
181.2 	subdivisions 1, paragraph (a), and 2 must be used by the city to pay for the cost of 
181.3 	collecting and administering the taxes and to pay for the following projects:
181.4 	(1) transportation infrastructure improvements including regional highway and 
181.5 	airport improvements;
181.6 	(2) improvements to the civic center complex;
181.7 	(3) a municipal water, sewer, and storm sewer project necessary to improve regional 
181.8 	ground water quality; and
181.9 	(4) construction of a regional recreation and sports center and other higher education 
181.10 	facilities available for both community and student use.
181.11 	(b) The total amount of capital expenditures or bonds for projects listed in paragraph 
181.12 	(a) that may be paid from the revenues raised from the taxes authorized in this section 
181.13 	may not exceed $111,500,000. The total amount of capital expenditures or bonds for the 
181.14 	project in clause (4) that may be paid from the revenues raised from the taxes authorized 
181.15 	in this section may not exceed $28,000,000.
181.16 	(c) In addition to the projects authorized in paragraph (a) and not subject to the 
181.17 	amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an 
181.18 	election under subdivision 5, paragraph (c), use the revenues received from the taxes and 
181.19 	bonds authorized in this section to pay the costs of or bonds for the following purposes:
181.20 	(1) $17,000,000 for capital expenditures and bonds for the following Olmsted 
181.21 	County transportation infrastructure improvements:
181.22 	(i) County State Aid Highway 34 reconstruction;
181.23 	(ii) Trunk Highway 63 and County State Aid Highway 16 interchange; 
181.24 	(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 interchange;
181.25 	(iv) widening of County State Aid Highway 22 West Circle Drive; and 
181.26 	(v) 60th Avenue Northwest corridor preservation;
181.27 	(2) $30,000,000 for city transportation projects including:
181.28 	(i) Trunk Highway 52 and 65th Street interchange;
181.29 	(ii) NW transportation corridor acquisition; 
181.30 	(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange;
181.31 	(iv) Trunk Highway 14 and Trunk Highway 63 intersection;
181.32 	(v) Southeast transportation corridor acquisition;
181.33 	(vi) Rochester International Airport expansion; and 
181.34 	(vii) a transit operations center bus facility;
181.35 	(3) $14,000,000 for the University of Minnesota Rochester academic and 
181.36 	complementary facilities;
182.1 	(4) $6,500,000 for the Rochester Community and Technical College/Winona State 
182.2 	University career technical education and science and math facilities;
182.3 	(5) $6,000,000 for the Rochester Community and Technical College regional 
182.4 	recreation facilities at University Center Rochester;
182.5 	(6) $20,000,000 for the Destination Medical Community Initiative;
182.6 	(7) $8,000,000 for the regional public safety and 911 dispatch center facilities;
182.7 	(8) $20,000,000 for a regional recreation/senior center;
182.8 	(9) $10,000,000 for an economic development fund; and
182.9 	(10) $8,000,000 for downtown infrastructure.
182.10 	(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1 
182.11 	and 2 may be used to fund transportation improvements related to a railroad bypass that 
182.12 	would divert traffic from the city of Rochester.
182.13 	(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph 
182.14 	(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin, 
182.15 	Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville, 
182.16 	Zumbrota, Spring Valley, West Concord, and Hayfield for economic development projects 
182.17 	that these communities would fund through their economic development authority or 
182.18 	housing and redevelopment authority.
182.19 	(e) Notwithstanding Minnesota Statutes, section 297A.99, subdivisions 2 and 3, if 
182.20 	the city decides to extend the taxes in subdivisions 1, paragraph (a), and 2, as allowed 
182.21 	under subdivision 5, paragraph (c), the city must use any amount in excess of the amount 
182.22 	necessary to meet obligations under paragraphs (a) to (c) from those taxes to fund 
182.23 	obligations, including associated financing costs, related to public infrastructure projects 
182.24 	in the development plan adopted under Minnesota Statutes, section 469.42.
182.25 	(f) Revenues from the tax under subdivision 1, paragraph (b), must be used to fund 
182.26 	obligations, including associated financing costs, related to the public infrastructure 
182.27 	projects contained in the development plan adopted by the city under Minnesota Statutes, 
182.28 	section 469.42.

182.29 	Sec. 11. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by 
182.30 	Laws 2005, First Special Session chapter 3, article 5, section 30, and Laws 2011, First 
182.31 	Special Session chapter 7, article 4, section 7, is amended to read:
182.32 		Subd. 5.Termination of taxes. (a) The taxes imposed under subdivisions 1 and 2 
182.33 	expire at the later of (1) December 31, 2009, or (2) when the city council determines that 
182.34 	sufficient funds have been received from the taxes to finance the first $71,500,000 of capital 
182.35 	expenditures and bonds for the projects authorized in subdivision 3, including the amount to 
183.1 	prepay or retire at maturity the principal, interest, and premium due on any bonds issued for 
183.2 	the projects under subdivision 4, unless the taxes are extended as allowed in paragraph (b). 
183.3 	Any funds remaining after completion of the project and retirement or redemption of the 
183.4 	bonds shall also be used to fund the projects under subdivision 3. The taxes imposed under 
183.5 	subdivisions 1 and 2 may expire at an earlier time if the city so determines by ordinance.
183.6 	(b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 
183.7 	other contrary provision of law, ordinance, or city charter, the city of Rochester may, by 
183.8 	ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009, 
183.9 	if approved by the voters of the city at a special election in 2005 or the general election in 
183.10 	2006. The question put to the voters must indicate that an affirmative vote would allow 
183.11 	up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000 
183.12 	of bonds to be issued above the amount authorized in the June 23, 1998, referendum for 
183.13 	the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are 
183.14 	extended under this paragraph, the taxes expire when the city council determines that 
183.15 	sufficient funds have been received from the taxes to finance the projects and to prepay 
183.16 	or retire at maturity the principal, interest, and premium due on any bonds issued for the 
183.17 	projects under subdivision 4. Any funds remaining after completion of the project and 
183.18 	retirement or redemption of the bonds may be placed in the general fund of the city.
183.19 	(c) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 
183.20 	other contrary provision of law, ordinance, or city charter, the city of Rochester may, 
183.21 	by ordinance, extend the taxes authorized in subdivisions 1, paragraph (a), and 2  up to 
183.22 	December 31, 2041, provided that all additional revenues above those necessary to fund 
183.23 	the projects and associated financing costs listed in subdivision 3, paragraphs (a) to (e), 
183.24 	are committed to fund public infrastructure projects contained in the development plan 
183.25 	adopted under Minnesota Statutes, section 469.42, including all associated financing 
183.26 	costs; otherwise the taxes terminate when beyond the date the city council determines 
183.27 	that sufficient funds have been received from the taxes to finance $111,500,000 ofthe 
183.28 	expenditures and bonds for the projects authorized in subdivision 3, paragraph (a)
183.29 	 paragraphs (a) to (e), plus an amount equal to the costs of issuance of the bonds and 
183.30 	including the amount to prepay or retire at maturity the principal, interest, and premiums 
183.31 	due on any bonds issued for the projects under subdivision 4, paragraph (a), if approved 
183.32 	by the voters of the city at the general election in 2012. If the election to authorize the 
183.33 	additional $139,500,000 of bonds plus an amount equal to the costs of the issuance of the 
183.34 	bonds is placed on the general election ballot in 2012, the city may continue to collect the 
183.35 	taxes authorized in subdivisions 1 and 2 until December 31, 2012. The question put to 
183.36 	the voters must indicate that an affirmative vote would allow sales tax revenues be raised 
184.1 	for an extended period of time and an additional $139,500,000 of bonds plus an amount 
184.2 	equal to the costs of issuance of the bonds, to be issued above the amount authorized in 
184.3 	the previous elections required under paragraphs (a) and (b) for the projects and amounts 
184.4 	specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended 
184.5 	under this paragraph, the taxes expire when the city council determines that $139,500,000 
184.6 	has been received from the taxes to finance the projects plus an amount sufficient to 
184.7 	prepay or retire at maturity the principal, interest, and premium due on any bonds issued 
184.8 	for the projects under subdivision 4, including any bonds issued to refund the bonds. Any 
184.9 	funds remaining after completion of the projects and retirement or redemption of the 
184.10 	bonds may be placed in the general fund of the city.
184.11 	(d) The tax imposed under subdivision 1, paragraph (b), expires at the earlier of 
184.12 	2041, or when the city council determines that sufficient funds have been raised from the 
184.13 	tax plus all other city funding sources authorized in this article to meet the city obligation 
184.14 	for financing the public infrastructure projects contained in the development plan adopted 
184.15 	under Minnesota Statutes, section 469.42, including all associated financing costs.

184.16 	Sec. 12. ROCHESTER AREA DEVELOPMENT AND TRANSPORTATION 
184.17 	IMPACTS STUDY.
 184.18 	(a) From funds appropriated by law for the purposes of this section, the commissioner 
184.19 	of transportation shall in consultation with the Rochester-Olmsted Council of Governments 
184.20 	enter into an agreement with a consultant to perform a study of economic development 
184.21 	and transportation impacts in the Rochester metropolitan area, including the feasibility of 
184.22 	high-speed rail between Rochester and the seven-county metropolitan area. To be eligible, 
184.23 	a consultant must have experience and expertise in a majority of the following: economics, 
184.24 	economic development, demography, urban planning, engineering, and transportation.
184.25 	(b) At a minimum, the study under this section must:
184.26 	(1) utilize at least a 20-year planning horizon;
184.27 	(2) perform a comprehensive planning assessment of key transportation 
184.28 	infrastructure throughout the Rochester metropolitan area based on (i) long-range 
184.29 	transportation plans developed by the Rochester-Olmsted Council of Governments, and 
184.30 	(ii) expected and potential economic development patterns;
184.31 	(3) analyze major roadways across all jurisdictions including, but not limited to, 
184.32 	trunk highways; county highways; and arterial city streets; and interconnections with other 
184.33 	modes in conjunction with ongoing rail and airports studies;
185.1 	(4) analyze the feasibility of a high-speed rail connection between Rochester and the 
185.2 	Mall of America via Minnesota State Highway 77 with connections to the Minneapolis-St. 
185.3 	Paul International Airport and the Union Depot in St. Paul;
185.4 	(5) to the extent feasible, take into account available data, forecasts, available 
185.5 	transportation demand modeling information, and transportation impacts of major 
185.6 	economic initiatives and proposals including, but not limited to, expansion of the Mayo 
185.7 	Clinic; and 
185.8 	(6) provide scenarios and identify revenue shortfalls to address both short-term and 
185.9 	long-term deficiencies in safety, mobility, congestion, and transportation infrastructure 
185.10 	condition.
185.11 	(c) By January 15, 2014, the commissioner shall provide an electronic copy of the 
185.12 	study to the chairs and ranking minority members of the legislative committees with 
185.13 	jurisdiction over transportation policy and finance, as provided in Minnesota Statutes, 
185.14 	section 174.02, subdivision 8.

185.15 	Sec. 13. EFFECTIVE DATE.
 185.16 	Except as otherwise provided, this article is effective the day after the governing 
185.17 	body of the city of Rochester and its chief clerical officer timely comply with Minnesota 
185.18 	Statutes, section 645.021, subdivisions 2 and 3.

185.19 	ARTICLE 11
185.20 	MINING TAXES

185.21 	Section 1. [116C.992] SILICA SAND MINING ACCOUNT.
185.22 	A silica sand mining account is created in the special revenue fund. Money in the 
185.23 	account is available for development of model standards, technical assistance to counties 
185.24 	and other governments, other assistance to counties, and other purposes as appropriated 
185.25 	by law.

185.26 	Sec. 2. Minnesota Statutes 2012, section 126C.48, subdivision 8, is amended to read:
185.27 		Subd. 8.Taconite payment and other reductions. (1) Reductions in levies 
185.28 	pursuant to subdivision 1 must be made prior to the reductions in clause (2).
185.29 	(2) Notwithstanding any other law to the contrary, districts that have revenue 
185.30 	pursuant to sections 298.018; 298.225; 298.24 to 298.28, except an amount distributed 
185.31 	under sections 298.26; 298.28, subdivision 4, paragraphs (c), clause (ii), and (d); 298.34
185.32 	to 298.39; 298.391 to 298.396; 298.405; 477A.15; and any law imposing a tax upon 
185.33 	severed mineral values must reduce the levies authorized by this chapter and chapters 
186.1 	120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A by 95 percent of the sum of the 
186.2 	previous year's revenue specified under this clause and the amount attributable to the same 
186.3 	production year distributed to the cities and townships within the school district under 
186.4 	section 298.28, subdivision 2, paragraph (c).
186.5 	(3) The amount of any voter approved referendum, facilities down payment, and 
186.6 	debt levies shall not be reduced by more than 50 percent under this subdivision. In 
186.7 	administering this paragraph, the commissioner shall first reduce the nonvoter approved 
186.8 	levies of a district; then, if any payments, severed mineral value tax revenue or recognized 
186.9 	revenue under paragraph (2) remains, the commissioner shall reduce any voter approved 
186.10 	referendum levies authorized under section 126C.17; then, if any payments, severed 
186.11 	mineral value tax revenue or recognized revenue under paragraph (2) remains, the 
186.12 	commissioner shall reduce any voter approved facilities down payment levies authorized 
186.13 	under section 123B.63 and then, if any payments, severed mineral value tax revenue or 
186.14 	recognized revenue under paragraph (2) remains, the commissioner shall reduce any 
186.15 	voter approved debt levies.
186.16 	(4) Before computing the reduction pursuant to this subdivision of the health and 
186.17 	safety levy authorized by sections 123B.57 and 126C.40, subdivision 5, the commissioner 
186.18 	shall ascertain from each affected school district the amount it proposes to levy under 
186.19 	each section or subdivision. The reduction shall be computed on the basis of the amount 
186.20 	so ascertained.
186.21 	(5) To the extent the levy reduction calculated under paragraph (2) exceeds the 
186.22 	limitation in paragraph (3), an amount equal to the excess must be distributed from the 
186.23 	school district's distribution under sections 298.225, 298.28, and 477A.15 in the following 
186.24 	year to the cities and townships within the school district in the proportion that their 
186.25 	taxable net tax capacity within the school district bears to the taxable net tax capacity of 
186.26 	the school district for property taxes payable in the year prior to distribution. No city or 
186.27 	township shall receive a distribution greater than its levy for taxes payable in the year prior 
186.28 	to distribution. The commissioner of revenue shall certify the distributions of cities and 
186.29 	towns under this paragraph to the county auditor by September 30 of the year preceding 
186.30 	distribution. The county auditor shall reduce the proposed and final levies of cities and 
186.31 	towns receiving distributions by the amount of their distribution. Distributions to the cities 
186.32 	and towns shall be made at the times provided under section 298.27.

186.33 	EFFECTIVE DATE. This section is effective for levies certified in 2013 and later.

186.34 	Sec. 3. [297J.01] DEFINITIONS.
187.1 		Subdivision 1.Scope. Unless otherwise defined in this chapter, or unless the 
187.2 	context clearly indicates otherwise, the terms used in this chapter have the meaning given 
187.3 	them in this section. The definitions in this section are for tax administration purposes 
187.4 	and apply to this chapter.
187.5 		Subd. 2.Commissioner. "Commissioner" means the commissioner of revenue or a 
187.6 	person to whom the commissioner has delegated functions.
187.7 		Subd. 3.Mining. "Mining" means excavating and mining of silica sand by any 
187.8 	process, including digging, excavating, drilling, blasting, tunneling, dredging, stripping, 
187.9 	or by shaft.
187.10 		Subd. 4.Person. "Person" means an individual, fiduciary, estate, trust, partnership, 
187.11 	or corporation.
187.12 		Subd. 5.Processing. "Processing" means washing, cleaning, screening, crushing, 
187.13 	filtering, sorting, stockpiling, and storing silica sand at the mining site or at any other site.
187.14 		Subd. 6.Qualified processor. "Qualified processor" means any person who 
187.15 	operates a mining and processing facility at the same location and uses means to 
187.16 	reasonably prevent silica sand particles from becoming airborne. These methods include, 
187.17 	but are not limited to, prohibiting outdoor storage piles, the use of a slurry pipeline to 
187.18 	carry aggregate material into the washing facility, completely enclosing the washing 
187.19 	facility, and any other means necessary or reasonable to significantly prevent silica sand 
187.20 	particles from becoming airborne.
187.21 		Subd. 7.Silica sand. "Silica sand" means well-rounded, sand-sized grains of quartz 
187.22 	(silica dioxide) with very few impurities in terms of other minerals. Specifically, silica 
187.23 	sand for the purpose of this section is commercially valuable for use in the hydraulic 
187.24 	fracturing of shale to obtain oil and natural gas. Silica sand does not include common 
187.25 	rock, stone, aggregate, gravel, sand with a low quartz level, or silica compounds recovered 
187.26 	as a by-product of metallic mining.
187.27 		Subd. 8.Temporary storage. "Temporary storage" means the storage of stockpiles 
187.28 	of silica sand that have been transported and are awaiting further transport or processing.
187.29 		Subd. 9.Ton. "Ton" means 2,000 pounds.
187.30 		Subd. 10.Transporting. "Transporting" means hauling silica sand, by any carrier:
187.31 	(1) from the mining site to a processing or transfer site; or
187.32 	(2) from a processing or storage site to a rail, barge, or transfer site for shipment.
187.33 		Subd. 11.Year. "Year" means a calendar year.

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

187.35 	Sec. 4. [297J.02] TAX IMPOSED.
188.1 		Subdivision 1.Mining and storage tax; rate. A tax is hereby imposed on any 
188.2 	person who: (1) mines silica sand from within the state; or (2) transports silica sand into 
188.3 	and stores the sand in the state. The rate of tax imposed is 55 cents per cubic yard of silica 
188.4 	sand mined or stored. The volume includes any material removed from the extraction site 
188.5 	prior to washing. For any person mining silica sand in a county that imposes the aggregate 
188.6 	tax authorized under section 298.75, subdivisions 2 and 3, a credit equal to the amount of 
188.7 	aggregate tax paid to the county is applied against the tax due under this section.
188.8 		Subd. 2.Processing tax; rate. (a) A tax is hereby imposed on any person engaged 
188.9 	in washing or processing silica sand within the state. The rate of tax imposed is three 
188.10 	percent of the market value of the silica sand processed. Market value is determined based 
188.11 	on the sale price of the processed silica sand.
188.12 	(b) Notwithstanding paragraph (a), the rate of tax imposed on a qualified processor 
188.13 	is one percent of the market value of the silica sand processed in the state.
188.14 		Subd. 3.Exemption. A person is exempt from the mining tax in subdivision 1 if the 
188.15 	person transports less than ten percent of the finished product on public roads.
188.16 		Subd. 4.Report and remittance. Taxes imposed by this section are due and 
188.17 	payable to the commissioner when the fracturing sand return is required to be filed. 
188.18 	Persons mining or processing fracturing sand must file their monthly fracturing sand 
188.19 	reports showing the amount of fracturing sand extracted or processed during the month 
188.20 	reported on a form prescribed by the commissioner. Reports of extraction and processing 
188.21 	fracturing sand and taxes imposed under this section must be filed with the commissioner 
188.22 	on or before the 20th day of the month following the close of the previous calendar month.
188.23 		Subd. 5.Proceeds of taxes. Revenue received from taxes under this chapter, as 
188.24 	well as all related penalties, interest, fees, and miscellaneous sources of revenue, must be 
188.25 	deposited by the commissioner in the state treasury and credited as follows:
188.26 	(1) $2,000,000 in fiscal year 2014, $2,690,000 in fiscal year 2015, and $2,000,000 in 
188.27 	each fiscal year thereafter must be credited to the silica sand mining account in the special 
188.28 	revenue fund under section 116C.992; and
188.29 	(2) the balance of revenues derived from taxes, penalties, interest, fees, and 
188.30 	miscellaneous sources of income are credited to the general fund.
188.31 		Subd. 6.Personal debt. The tax imposed by this section, and interest and penalties 
188.32 	imposed with respect to it, are a personal debt of the person required to file a return from 
188.33 	the time the liability for it arises, irrespective of when the time for payment of the liability 
188.34 	occurs. The debt must, in the case of the executor or administrator of the estate of a 
188.35 	decedent and in the case of a fiduciary, be that of the person in the person's official or 
188.36 	fiduciary capacity only unless the person has voluntarily distributed the assets held in that 
189.1 	capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which 
189.2 	event the person is personally liable for any deficiency.
189.3 		Subd. 7.Refunds; appropriation. A person who has, under this chapter, paid 
189.4 	to the commissioner an amount of tax for a period in excess of the amount legally due 
189.5 	for that period, may file with the commissioner a claim for a refund of the excess. The 
189.6 	amount necessary to pay the refunds under this subdivision is appropriated from the 
189.7 	general fund to the commissioner.

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

189.9 	Sec. 5. [297J.03] REGISTRATION; REPORTING; FILING REQUIREMENTS.
189.10 		Subdivision 1.Registration. A person who extracts or processes silica sand within 
189.11 	the state must register with the commissioner, on a form prescribed by the commissioner, 
189.12 	for a silica sand identification number. The commissioner shall issue the applicant a 
189.13 	registration number. A registration number is not assignable and is valid only for the 
189.14 	person in whose name it is issued.
189.15 		Subd. 2.Reporting. (a) A person who extracts or processes silica sand in this state 
189.16 	must file a report showing the amount of silica sand extracted or processed monthly on or 
189.17 	before the 20th day of the month following the month in which the silica sand was extracted 
189.18 	or processed. The commissioner may inspect the premises, books, and records, of a person 
189.19 	subject to the silica sand tax during the normal business hours of the person extracting or 
189.20 	processing silica sand. A person violating this section is guilty of a misdemeanor.
189.21 	(b) A person shall keep at each place of business complete and accurate records 
189.22 	for that place of business, including records of silica sand extracted or processed in the 
189.23 	state. Scale records, sales records, or any other records of tons of silica sand extracted 
189.24 	or processed in this state, produced or maintained by the person extracting or processing 
189.25 	silica sand, must be retained by the person extracting or processing silica sand in this 
189.26 	state. Books, records, invoices, and other papers and documents required by this section 
189.27 	must be kept for a period of at least 3-1/2 years after the date of the monthly silica sand 
189.28 	report unless the commissioner of revenue authorizes, in writing, their destruction or 
189.29 	disposal at an earlier date.
189.30 		Subd. 3.Extensions. If, in the commissioner's judgment, good cause exists, the 
189.31 	commissioner may extend the time for filing reports under this section and silica sand 
189.32 	returns under section 297J.02 and for paying taxes under section 297J.02 for not more 
189.33 	than six months.

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

190.1 	Sec. 6. [297J.04] LIMITATIONS ON TIME FOR ASSESSMENT OF TAX.
190.2 		Subdivision 1.Assessment. Except as otherwise provided in this chapter, the 
190.3 	amount of taxes assessable must be assessed within 3-1/2 years after the date the return is 
190.4 	filed, whether or not the return is filed on or after the date prescribed. A return must not be 
190.5 	treated as filed until it is in processible form. A return is in processible form if it is filed 
190.6 	on a permitted form and contains sufficient data to identify the taxpayer and permit the 
190.7 	mathematical verification of the tax liability shown on the return. For purposes of this 
190.8 	section, a return filed before the last day prescribed by law for filing is considered to 
190.9 	be filed on the last day.
190.10 		Subd. 2.False or fraudulent return. Notwithstanding subdivision 1, the tax may be 
190.11 	assessed at any time if a false or fraudulent return is filed or if a taxpayer fails to file a return.
190.12 		Subd. 3.Omission in excess of 25 percent. Additional taxes may be assessed 
190.13 	within 6-1/2 years after the due date of the return or the date the return was filed, 
190.14 	whichever is later, if the taxpayer omits from a return taxes in excess of 25 percent of 
190.15 	the taxes reported in the return.
190.16 		Subd. 4.Time limit on refunds. Unless otherwise provided in this chapter, a claim 
190.17 	for a refund of an overpayment of tax must be filed within 3-1/2 years from the date 
190.18 	prescribed for filing the silica sand tax return. Interest on refunds must be computed at 
190.19 	the rate specified in section 270C.405 from the date of payment to the date the refund is 
190.20 	paid or credited. For purposes of this subdivision, the date of payment is the later of the 
190.21 	date the tax was finally due or was paid.
190.22 		Subd. 5.Bankruptcy; suspension of time. The time during which a tax must be 
190.23 	assessed or collection proceedings begun is suspended during the period from the date of a 
190.24 	filing of a petition in bankruptcy until 30 days after either: (1) notice to the commissioner 
190.25 	that the bankruptcy proceedings have been closed or dismissed; or (2) the automatic stay 
190.26 	has been ended or has expired, whichever occurs first. The suspension of the statute of 
190.27 	limitations under this subdivision applies to the person the petition in bankruptcy is filed 
190.28 	against, and all other persons who may also be wholly or partially liable for the tax.
190.29 		Subd. 6.Extension agreement. If, before the expiration of time prescribed in 
190.30 	subdivisions 1 and 4 for the assessment of tax or the filing of a claim for refund, both the 
190.31 	commissioner and the taxpayer have consented in writing to the assessment or filing of a 
190.32 	claim for refund after that time, the tax may be assessed or the claim for refund filed at any 
190.33 	time before the expiration of the agreed upon period. The period may be extended by later 
190.34 	agreements in writing before the expiration of the period previously agreed upon.

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

191.1 	Sec. 7. [297J.05] CIVIL PENALTIES.
191.2 		Subdivision 1.Penalty for failure to pay tax. If a tax is not paid within the time 
191.3 	specified for payment, a penalty is added to the amount required to be shown as tax. The 
191.4 	penalty is five percent of the unpaid tax if the failure is for not more than 30 days, with 
191.5 	an additional penalty of five percent of the amount of tax remaining unpaid during each 
191.6 	additional 30 days or fraction of 30 days during which the failure continues, not exceeding 
191.7 	15 percent in the aggregate. For purposes of this subdivision, if the taxpayer has not filed 
191.8 	a return, the time specified for payment is the final date a return should have been filed.
191.9 		Subd. 2.Penalty for failure to make and file return. If a taxpayer fails to make 
191.10 	and file a return within the time prescribed or an extension, a penalty is added to the tax. 
191.11 	The penalty is five percent of the amount of tax not paid on or before the date prescribed 
191.12 	for payment of the tax.
191.13 		Subd. 3.Penalty for intentional disregard of law or rules. If part of an additional 
191.14 	assessment is due to negligence or intentional disregard of the provisions of this chapter or 
191.15 	rules of the commissioner of revenue (but without intent to defraud), there is added to the 
191.16 	tax an amount equal to ten percent of the additional assessment.
191.17 		Subd. 4.Penalty for false or fraudulent return; evasion. If a person files a false 
191.18 	or fraudulent return, or attempts in any manner to evade or defeat a tax or payment of 
191.19 	tax, there is imposed on the person a penalty equal to 50 percent of the tax found due 
191.20 	for the period to which the return related, less amounts paid by the person on the basis 
191.21 	of the false or fraudulent return.
191.22 		Subd. 5.Penalty for repeated failures to file returns or pay taxes. If there is a 
191.23 	pattern by a person of repeated failures to timely file returns or timely pay taxes, and 
191.24 	written notice is given that a penalty will be imposed if such failures continue, a penalty 
191.25 	of 25 percent of the amount of tax not timely paid as a result of each such subsequent 
191.26 	failure is added to the tax. The penalty can be abated under the abatement authority in 
191.27 	section 270C.34.
191.28 		Subd. 6.Payment of penalties. The penalties imposed by this section must be 
191.29 	collected and paid in the same manner as taxes. These penalties are in addition to criminal 
191.30 	penalties imposed by this chapter.

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

191.32 	Sec. 8. [297J.07] INTEREST.
191.33 		Subdivision 1.Rate. If an interest assessment is required under this section, interest 
191.34 	is computed at the rate specified in section 270C.40.
192.1 		Subd. 2.Late payment. If a tax is not paid within the time specified by law for 
192.2 	payment, the unpaid tax bears interest from the date the tax should have been paid until 
192.3 	the date the tax is paid.
192.4 		Subd. 3.Extensions. If an extension of time for payment has been granted, interest 
192.5 	must be paid from the date the payment should have been made if no extension had been 
192.6 	granted, until the date the tax is paid.
192.7 		Subd. 4.Additional assessments. If a taxpayer is liable for additional taxes because 
192.8 	of a redetermination by the commissioner, or for any other reason, the additional taxes 
192.9 	bear interest from the time the tax should have been paid, without regard to any extension 
192.10 	allowed, until the date the tax is paid.
192.11 		Subd. 5.Erroneous refunds. In the case of an erroneous refund, interest accrues 
192.12 	from the date the refund was paid unless the erroneous refund results from a mistake of 
192.13 	the department, then no interest or penalty is imposed unless the deficiency assessment is 
192.14 	not satisfied within 60 days of the order.
192.15 		Subd. 6.Interest on judgments. Notwithstanding section 549.09, if judgment is 
192.16 	entered in favor of the commissioner with regard to any tax, the judgment bears interest 
192.17 	at the rate specified in section 270C.40 from the date the judgment is entered until the 
192.18 	date of payment.
192.19 		Subd. 7.Interest on penalties. A penalty imposed under section 297J.05, 
192.20 	subdivision 1, 2, 3, 4, or 5, bears interest from the date the return or payment was required 
192.21 	to be filed or paid, including any extensions, to the date of payment of the penalty.

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

192.23 	Sec. 9. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
192.24 		Subd. 3.Occupation tax; other ores.  Every person engaged in the business of 
192.25 	mining, refining, or producing ores, metals, or minerals in this state, except iron ore or 
192.26 	taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided 
192.27 	in this subdivision. For purposes of this subdivision, mining includes the application 
192.28 	of hydrometallurgical processes. The tax is determined in the same manner as the tax 
192.29 	imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17, 
192.30 	subdivision 4, and 290.191, subdivision 2, do not apply, and the occupation tax must be 
192.31 	computed by applying to taxable income the rate of 2.45 percent equal to one-half of 
192.32 	the rate that applies under section 290.06, subdivision 1, for the taxable year. A person 
192.33 	subject to occupation tax under this section shall apportion its net income on the basis of 
192.34 	the percentage obtained by taking the sum of:
193.1 	(1) 75 percent of the percentage which the sales made within this state in connection 
193.2 	with the trade or business during the tax period are of the total sales wherever made in 
193.3 	connection with the trade or business during the tax period;
193.4 	(2) 12.5 percent of the percentage which the total tangible property used by the 
193.5 	taxpayer in this state in connection with the trade or business during the tax period is of 
193.6 	the total tangible property, wherever located, used by the taxpayer in connection with the 
193.7 	trade or business during the tax period; and
193.8 	(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 
193.9 	in this state or paid in respect to labor performed in this state in connection with the trade 
193.10 	or business during the tax period are of the taxpayer's total payrolls paid or incurred in 
193.11 	connection with the trade or business during the tax period.
193.12 	The tax is in addition to all other taxes.

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

193.14 	Sec. 10. Minnesota Statutes 2012, section 298.01, subdivision 4, is amended to read:
193.15 		Subd. 4.Occupation tax; iron ore; taconite concentrates. A person engaged in 
193.16 	the business of mining or producing of iron ore, taconite concentrates or direct reduced ore 
193.17 	in this state shall pay an occupation tax to the state of Minnesota. The tax is determined 
193.18 	in the same manner as the tax imposed by section 290.02, except that sections 290.05, 
193.19 	subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not apply, 
193.20 	and the occupation tax shall be computed by applying to taxable income the rate of 2.45
193.21 	 percent equal to one-half of the rate that applies under section 290.06, subdivision 1, for 
193.22 	the taxable year. A person subject to occupation tax under this section shall apportion its 
193.23 	net income on the basis of the percentage obtained by taking the sum of:
193.24 	(1) 75 percent of the percentage which the sales made within this state in connection 
193.25 	with the trade or business during the tax period are of the total sales wherever made in 
193.26 	connection with the trade or business during the tax period;
193.27 	(2) 12.5 percent of the percentage which the total tangible property used by the 
193.28 	taxpayer in this state in connection with the trade or business during the tax period is of 
193.29 	the total tangible property, wherever located, used by the taxpayer in connection with the 
193.30 	trade or business during the tax period; and
193.31 	(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 
193.32 	in this state or paid in respect to labor performed in this state in connection with the trade 
193.33 	or business during the tax period are of the taxpayer's total payrolls paid or incurred in 
193.34 	connection with the trade or business during the tax period.
193.35 	The tax is in addition to all other taxes.

194.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
194.2 	December 31, 2012.

194.3 	Sec. 11. Minnesota Statutes 2012, section 298.227, as amended by Laws 2013, chapter 
194.4 	3, section 17, is amended to read:
194.5 	298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
194.6 	(a) An amount equal to that distributed pursuant to each taconite producer's taxable 
194.7 	production and qualifying sales under section 298.28, subdivision 9a, shall be held by 
194.8 	the Iron Range Resources and Rehabilitation Board in a separate taconite economic 
194.9 	development fund for each taconite and direct reduced ore producer. Money from the 
194.10 	fund for each producer shall be released by the commissioner after review by a joint 
194.11 	committee consisting of an equal number of representatives of the salaried employees and 
194.12 	the nonsalaried production and maintenance employees of that producer. The District 11 
194.13 	director of the United States Steelworkers of America, on advice of each local employee 
194.14 	president, shall select the employee members. In nonorganized operations, the employee 
194.15 	committee shall be elected by the nonsalaried production and maintenance employees. The 
194.16 	review must be completed no later than six months after the producer presents a proposal 
194.17 	for expenditure of the funds to the committee. The funds held pursuant to this section may 
194.18 	be released only for workforce development and associated public facility improvement, 
194.19 	or for acquisition of plant and stationary mining equipment and facilities for the producer 
194.20 	or for research and development in Minnesota on new mining, or taconite, iron, or steel 
194.21 	production technology, but only if the producer provides a matching expenditure equal to 
194.22 	the amount of the distribution to be used for the same purpose of at least 50 percent of 
194.23 	the distribution based on 14.7 cents per ton beginning with distributions in 2002 2014. 
194.24 	Effective for proposals for expenditures of money from the fund beginning May 26, 2007, 
194.25 	the commissioner may not release the funds before the next scheduled meeting of the 
194.26 	board. If a proposed expenditure is not approved by the board, the funds must be deposited 
194.27 	in the Taconite Environmental Protection Fund under sections 298.222 to 298.225. If a 
194.28 	producer uses money which has been released from the fund prior to May 26, 2007 to 
194.29 	procure haulage trucks, mobile equipment, or mining shovels, and the producer removes 
194.30 	the piece of equipment from the taconite tax relief area defined in section 273.134 within 
194.31 	ten years from the date of receipt of the money from the fund, a portion of the money 
194.32 	granted from the fund must be repaid to the taconite economic development fund. The 
194.33 	portion of the money to be repaid is 100 percent of the grant if the equipment is removed 
194.34 	from the taconite tax relief area within 12 months after receipt of the money from the fund, 
194.35 	declining by ten percent for each of the subsequent nine years during which the equipment 
195.1 	remains within the taconite tax relief area. If a taconite production facility is sold after 
195.2 	operations at the facility had ceased, any money remaining in the fund for the former 
195.3 	producer may be released to the purchaser of the facility on the terms otherwise applicable 
195.4 	to the former producer under this section. If a producer fails to provide matching funds 
195.5 	for a proposed expenditure within six months after the commissioner approves release 
195.6 	of the funds, the funds are available for release to another producer in proportion to the 
195.7 	distribution provided and under the conditions of this section. Any portion of the fund 
195.8 	which is not released by the commissioner within one year of its deposit in the fund shall 
195.9 	be divided between the taconite environmental protection fund created in section 298.223 
195.10 	and the Douglas J. Johnson economic protection trust fund created in section 298.292 for 
195.11 	placement in their respective special accounts. Two-thirds of the unreleased funds shall be 
195.12 	distributed to the taconite environmental protection fund and one-third to the Douglas J. 
195.13 	Johnson economic protection trust fund.
195.14 	(b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of 
195.15 	distributions and the review process, an amount equal to ten cents per taxable ton of 
195.16 	production in 2007, for distribution in 2008 only, that would otherwise be distributed 
195.17 	under paragraph (a), may be used for a loan or grant for the cost of providing for a 
195.18 	value-added wood product facility located in the taconite tax relief area and in a county 
195.19 	that contains a city of the first class. This amount must be deducted from the distribution 
195.20 	under paragraph (a) for which a matching expenditure by the producer is not required. The 
195.21 	granting of the loan or grant is subject to approval by the board. If the money is provided 
195.22 	as a loan, interest must be payable on the loan at the rate prescribed in section 298.2213, 
195.23 	subdivision 3. (ii) Repayments of the loan and interest, if any, must be deposited in the 
195.24 	taconite environment protection fund under sections 298.222 to 298.225. If a loan or 
195.25 	grant is not made under this paragraph by July 1, 2012, the amount that had been made 
195.26 	available for the loan under this paragraph must be transferred to the taconite environment 
195.27 	protection fund under sections 298.222 to 298.225. (iii) Money distributed in 2008 to the 
195.28 	fund established under this section that exceeds ten cents per ton is available to qualifying 
195.29 	producers under paragraph (a) on a pro rata basis.
195.30 	(c) Repayment or transfer of money to the taconite environmental protection fund 
195.31 	under paragraph (b), item (ii), must be allocated by the Iron Range Resources and 
195.32 	Rehabilitation Board for public works projects in house legislative districts in the same 
195.33 	proportion as taxable tonnage of production in 2007 in each house legislative district, for 
195.34 	distribution in 2008, bears to total taxable tonnage of production in 2007, for distribution 
195.35 	in 2008. Notwithstanding any other law to the contrary, expenditures under this paragraph 
196.1 	do not require approval by the governor. For purposes of this paragraph, "house legislative 
196.2 	districts" means the legislative districts in existence on May 15, 2009.

196.3 	EFFECTIVE DATE. This section is effective beginning for the 2014 distribution.

196.4 	Sec. 12. Minnesota Statutes 2012, section 298.24, subdivision 1, is amended to read:
196.5 		Subdivision 1.Imposed; calculation. (a) For concentrate produced in 2001, 2002, 
196.6 	and 2003 2013, there is imposed upon taconite and iron sulphides, and upon the mining 
196.7 	and quarrying thereof, and upon the production of iron ore concentrate therefrom, and 
196.8 	upon the concentrate so produced, a tax of $2.103 $2.56 per gross ton of merchantable 
196.9 	iron ore concentrate produced therefrom. For concentrates produced in 2005, the tax rate 
196.10 	is the same rate imposed for concentrates produced in 2004. For concentrates produced in 
196.11 	2009 and subsequent years, The tax is also imposed upon other iron-bearing material.
196.12 	(b) For concentrates produced in 2006 2014 and subsequent years, the tax rate shall 
196.13 	be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax 
196.14 	rate multiplied by the percentage increase in the implicit price deflator from the fourth 
196.15 	quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit 
196.16 	price deflator" means the implicit price deflator for the gross domestic product prepared by 
196.17 	the Bureau of Economic Analysis of the United States Department of Commerce.
196.18 	(c) An additional tax is imposed equal to three cents per gross ton of merchantable 
196.19 	iron ore concentrate for each one percent that the iron content of the product exceeds 72 
196.20 	percent, when dried at 212 degrees Fahrenheit.
196.21 	(d) The tax on taconite and iron sulphides shall be imposed on the average of the 
196.22 	production for the current year and the previous two years. The rate of the tax imposed 
196.23 	will be the current year's tax rate. This clause shall not apply in the case of the closing 
196.24 	of a taconite facility if the property taxes on the facility would be higher if this clause 
196.25 	and section 298.25 were not applicable. The tax on other iron-bearing material shall be 
196.26 	imposed on the current year production.
196.27 	(e) If the tax or any part of the tax imposed by this subdivision is held to be 
196.28 	unconstitutional, a tax of $2.103 $2.56 per gross ton of merchantable iron ore concentrate 
196.29 	produced shall be imposed.
196.30 	(f) Consistent with the intent of this subdivision to impose a tax based upon the 
196.31 	weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 
196.32 	determine the weight of merchantable iron ore concentrate included in fluxed pellets by 
196.33 	subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 
196.34 	flux additives included in the pellets from the weight of the pellets. For purposes of this 
196.35 	paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 
197.1 	olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 
197.2 	No subtraction from the weight of the pellets shall be allowed for binders, mineral and 
197.3 	chemical additives other than basic flux additives, or moisture.
197.4 	(g)(1) Notwithstanding any other provision of this subdivision, for the first two years 
197.5 	of a plant's commercial production of direct reduced ore from ore mined in this state, no 
197.6 	tax is imposed under this section. As used in this paragraph, "commercial production" is 
197.7 	production of more than 50,000 tons of direct reduced ore in the current year or in any prior 
197.8 	year, "noncommercial production" is production of 50,000 tons or less of direct reduced ore 
197.9 	in any year, and "direct reduced ore" is ore that results in a product that has an iron content 
197.10 	of at least 75 percent. For the third year of a plant's commercial production of direct 
197.11 	reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate otherwise 
197.12 	determined under this subdivision. For the fourth commercial production year, the rate is 
197.13 	50 percent of the rate otherwise determined under this subdivision; for the fifth commercial 
197.14 	production year, the rate is 75 percent of the rate otherwise determined under this 
197.15 	subdivision; and for all subsequent commercial production years, the full rate is imposed.
197.16 	(2) Subject to clause (1), production of direct reduced ore in this state is subject to 
197.17 	the tax imposed by this section, but if that production is not produced by a producer of 
197.18 	taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron 
197.19 	sulfides, or other iron-bearing material, that is consumed in the production of direct 
197.20 	reduced iron in this state is not subject to the tax imposed by this section on taconite, 
197.21 	iron sulfides, or other iron-bearing material.
197.22 	(3) Notwithstanding any other provision of this subdivision, no tax is imposed 
197.23 	on direct reduced ore under this section during the facility's noncommercial production 
197.24 	of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 
197.25 	production of direct reduced ore is subject to the tax imposed by this section on taconite 
197.26 	and iron sulphides. Three-year average production of direct reduced ore does not 
197.27 	include production of direct reduced ore in any noncommercial year. Three-year average 
197.28 	production for a direct reduced ore facility that has noncommercial production is the 
197.29 	average of the commercial production of direct reduced ore for the current year and the 
197.30 	previous two commercial years.
197.31 	(4) This paragraph applies only to plants for which all environmental permits have 
197.32 	been obtained and construction has begun before July 1, 2008.

197.33 	EFFECTIVE DATE. This section is effective beginning for the 2013 production 
197.34 	year.

197.35 	Sec. 13. Minnesota Statutes 2012, section 298.28, subdivision 4, is amended to read:
198.1 		Subd. 4.School districts. (a) 23.15 32.15 cents per taxable ton, plus the increase 
198.2 	provided in paragraph (d), less the amount that would have been computed under 
198.3 	Minnesota Statutes 2008, section 126C.21, subdivision 4, for the current year for that 
198.4 	district, must be allocated to qualifying school districts to be distributed, based upon the 
198.5 	certification of the commissioner of revenue, under paragraphs (b), (c), and (f).
198.6 	(b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which 
198.7 	the lands from which taconite was mined or quarried were located or within which the 
198.8 	concentrate was produced. The distribution must be based on the apportionment formula 
198.9 	prescribed in subdivision 2.
198.10 	(ii) Four cents per taxable ton from each taconite facility must be distributed to 
198.11 	each affected school district for deposit in a fund dedicated to building maintenance 
198.12 	and repairs, as follows:
198.13 	(1) proceeds from Keewatin Taconite or its successor are distributed to Independent 
198.14 	School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor 
198.15 	districts;
198.16 	(2) proceeds from the Hibbing Taconite Company or its successor are distributed to 
198.17 	Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor 
198.18 	districts;
198.19 	(3) proceeds from the Mittal Steel Company and Minntac or their successors are 
198.20 	distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia, 
198.21 	2711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
198.22 	(4) proceeds from the Northshore Mining Company or its successor are distributed 
198.23 	to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior, 
198.24 	or their successor districts; and
198.25 	(5) proceeds from United Taconite or its successor are distributed to Independent 
198.26 	School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their 
198.27 	successor districts.
198.28 	Revenues that are required to be distributed to more than one district shall be 
198.29 	apportioned according to the number of pupil units identified in section 126C.05, 
198.30 	subdivision 1, enrolled in the second previous year.
198.31 	(c)(i) 15.72 24.72 cents per taxable ton, less any amount distributed under paragraph 
198.32 	(e), shall be distributed to a group of school districts comprised of those school districts 
198.33 	which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is 
198.34 	a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion 
198.35 	to school district indexes as follows: for each school district, its pupil units determined 
198.36 	under section 126C.05 for the prior school year shall be multiplied by the ratio of the 
199.1 	average adjusted net tax capacity per pupil unit for school districts receiving aid under 
199.2 	this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 
199.3 	ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 
199.4 	Each district shall receive that portion of the distribution which its index bears to the sum 
199.5 	of the indices for all school districts that receive the distributions.
199.6 	(ii) Notwithstanding clause (i), each school district that receives a distribution 
199.7 	under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this 
199.8 	clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on 
199.9 	severed mineral values after reduction for any portion distributed to cities and towns 
199.10 	under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its 
199.11 	levy reduction under section 126C.48, subdivision 8, for the second year prior to the 
199.12 	year of the distribution shall receive a distribution equal to the difference; the amount 
199.13 	necessary to make this payment shall be derived from proportionate reductions in the 
199.14 	initial distribution to other school districts under clause (i). If there are insufficient tax 
199.15 	proceeds to make the distribution provided under this paragraph in any year, money must 
199.16 	be transferred from the taconite property tax relief account in subdivision 6, to the extent 
199.17 	of the shortfall in the distribution.
199.18 	(d)(1) Any school district described in paragraph (c) where a levy increase pursuant 
199.19 	to section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 
199.20 	2001, shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 
199.21 	times the pupil units identified in section 126C.05, subdivision 1, enrolled in the second 
199.22 	previous year or the 1983-1984 school year, whichever is greater, less the product of 1.8 
199.23 	percent times the district's taxable net tax capacity in the second previous year 2011.
199.24 	(2) Districts qualifying under paragraph (c) must receive additional taconite aid each 
199.25 	year equal to 22.5 percent of the amount obtained by subtracting:
199.26 	(i) 1.8 percent of the district's net tax capacity for 2011, from:
199.27 	(ii) the district's weighted average daily membership for fiscal year 2012 multiplied 
199.28 	by the sum of:
199.29 	(A) $415, plus
199.30 	(B) the district's referendum revenue allowance for fiscal year 2013.
199.31 	If the total amount provided by paragraph (d) is insufficient to make the payments 
199.32 	herein required then the entitlement of $175 per pupil unit shall be reduced uniformly 
199.33 	so as not to exceed the funds available. Any amounts received by a qualifying school 
199.34 	district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general 
199.35 	education aid which the district receives pursuant to section 126C.13 or the permissible 
199.36 	levies of the district. Any amount remaining after the payments provided in this paragraph 
200.1 	shall be paid to the commissioner of Iron Range resources and rehabilitation who shall 
200.2 	deposit the same in the taconite environmental protection fund and the Douglas J. Johnson 
200.3 	economic protection trust fund as provided in subdivision 11.
200.4 	Each district receiving money according to this paragraph shall reserve the lesser of 
200.5 	the amount received under this paragraph or $25 times the number of pupil units served 
200.6 	in the district. It may use the money for early childhood programs or for outcome-based 
200.7 	learning programs that enhance the academic quality of the district's curriculum. The 
200.8 	outcome-based learning programs must be approved by the commissioner of education.
200.9 	(e) There shall be distributed to any school district the amount which the school 
200.10 	district was entitled to receive under section 298.32 in 1975.
200.11 	(f) Four cents per taxable ton must be distributed to qualifying school districts 
200.12 	according to the distribution specified in paragraph (b), clause (ii), and two 11 cents 
200.13 	per taxable ton must be distributed according to the distribution specified in paragraph 
200.14 	(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48, 
200.15 	subdivision 8.

200.16 	EFFECTIVE DATE. This section is effective beginning for the 2014 distribution.

200.17 	Sec. 14. Minnesota Statutes 2012, section 298.28, subdivision 6, is amended to read:
200.18 		Subd. 6.Property tax relief. (a) In 2002 2014 and thereafter, 33.9 34.8 cents per 
200.19 	taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or 
200.20 	section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the 
200.21 	counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136.
200.22 	(b) If an electric power plant owned by and providing the primary source of power 
200.23 	for a taxpayer mining and concentrating taconite is located in a county other than the 
200.24 	county in which the mining and the concentrating processes are conducted, .1875 cent per 
200.25 	taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.
200.26 	(c) If an electric power plant owned by and providing the primary source of power 
200.27 	for a taxpayer mining and concentrating taconite is located in a school district other than 
200.28 	a school district in which the mining and concentrating processes are conducted, .4541 
200.29 	cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to 
200.30 	the school district.

200.31 	EFFECTIVE DATE. This section is effective beginning for the 2014 distribution.

200.32 	Sec. 15. Minnesota Statutes 2012, section 298.28, subdivision 10, is amended to read:
201.1 		Subd. 10.Increase. (a) Except as provided in paragraph (b), beginning with 
201.2 	distributions in 2000, the amount determined under subdivision 9 shall be increased in the 
201.3 	same proportion as the increase in the implicit price deflator as provided in section 298.24, 
201.4 	subdivision 1. Beginning with distributions in 2003 2015, the amount determined under 
201.5 	subdivision 6, paragraph (a), shall be increased in the same proportion as the increase in 
201.6 	the implicit price deflator as provided in section 298.24, subdivision 1.
201.7 	(b) For distributions in 2005 and subsequent years, an amount equal to the increased 
201.8 	tax proceeds attributable to the increase in the implicit price deflator as provided in 
201.9 	section 298.24, subdivision 1, for taxes paid in 2005, except for the amount of revenue 
201.10 	increases provided in subdivision 4, paragraph (d), is distributed to the grant and loan fund 
201.11 	established in section 298.2961, subdivision 4.

201.12 	EFFECTIVE DATE. This section is effective beginning for the 2014 distribution.

201.13 	Sec. 16. Minnesota Statutes 2012, section 298.75, subdivision 2, is amended to read:
201.14 		Subd. 2.Tax imposed. (a) Except as provided in paragraph (e), a county that 
201.15 	imposes the aggregate production tax shall impose upon every operator a production tax 
201.16 	of 21.5 cents per cubic yard or 15 cents per ton of aggregate material excavated in the 
201.17 	county except that the county board may decide not to impose this tax if it determines 
201.18 	that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of 
201.19 	aggregate material from that county. A county board may authorize an additional tax on 
201.20 	aggregate material excavated in the county of up to 43 cents per cubic yard or 30 cents 
201.21 	per ton of aggregate material excavated in the county. The tax shall not be imposed on 
201.22 	aggregate material excavated in the county until the aggregate material is transported from 
201.23 	the extraction site or sold, whichever occurs first. When aggregate material is stored in a 
201.24 	stockpile within the state of Minnesota and a public highway, road or street is not used 
201.25 	for transporting the aggregate material, the tax shall not be imposed until either when the 
201.26 	aggregate material is sold, or when it is transported from the stockpile site, or when it is 
201.27 	used from the stockpile, whichever occurs first.
201.28 	(b) Except as provided in paragraph (e), a county that imposes the aggregate 
201.29 	production tax under paragraph (a) shall impose upon every importer a production tax 
201.30 	of 21.5 cents per cubic yard or 15 cents per ton of aggregate material imported into the 
201.31 	county. A county board may authorize an additional tax on every importer of up to 43 
201.32 	cents per cubic yard or 30 cents per ton of aggregate material imported into the county.
201.33 	 The tax shall be imposed when the aggregate material is imported from the extraction site 
201.34 	or sold. When imported aggregate material is stored in a stockpile within the state of 
201.35 	Minnesota and a public highway, road, or street is not used for transporting the aggregate 
202.1 	material, the tax shall be imposed either when the aggregate material is sold, when it is 
202.2 	transported from the stockpile site, or when it is used from the stockpile, whichever occurs 
202.3 	first. The tax shall be imposed on an importer when the aggregate material is imported 
202.4 	into the county that imposes the tax.
202.5 	(c) If the aggregate material is transported directly from the extraction site to a 
202.6 	waterway, railway, or another mode of transportation other than a highway, road or street, 
202.7 	the tax imposed by this section shall be apportioned equally between the county where the 
202.8 	aggregate material is extracted and the county to which the aggregate material is originally 
202.9 	transported. If that destination is not located in Minnesota, then the county where the 
202.10 	aggregate material was extracted shall receive all of the proceeds of the tax.
202.11 	(d) A county, city, or town that receives revenue under this section is prohibited 
202.12 	from imposing any additional host community fees on aggregate production within that 
202.13 	county, city, or town.
202.14 	(e) A county that borders two other states and that is not contiguous to a county 
202.15 	that imposes a tax under this section may impose the taxes under paragraphs (a) and (b) 
202.16 	at the rate of ten cents per cubic yard or seven cents per ton. This paragraph expires 
202.17 	December 31, 2014.

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

202.19 	Sec. 17. 2013 DISTRIBUTION ONLY.
 202.20 	For the 2013 distribution, a special fund is established to receive $4,700,000 of the 
202.21 	amount that otherwise would be distributed under Minnesota Statutes, section 298.28, 
202.22 	subdivision 6, and this amount must be paid as follows:
202.23 	(1) $2,000,000 to the city of Hibbing for improvements to the city's water supply 
202.24 	system;
202.25 	(2) $1,700,000 to the city of Mountain Iron for the cost of moving utilities required 
202.26 	as a result of actions undertaken by United States Steel Corporation; and
202.27 	(3) $1,000,000 to the city of Tower for improvements to a marina.

202.28 	EFFECTIVE DATE. This section is effective for the 2013 distribution, all of which 
202.29 	must be made in the August 2013 payment.

202.30 	Sec. 18. IRON RANGE RESOURCES AND REHABILITATION 
202.31 	COMMISSIONER; BONDS AUTHORIZED.
 202.32 		Subdivision 1.Issuance; purpose. Notwithstanding any provision of Minnesota 
202.33 	Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and 
203.1 	rehabilitation may issue revenue bonds in a principal amount of $38,000,000 in one or more 
203.2 	series, and bonds to refund those bonds. The proceeds of the bonds must be used to make 
203.3 	grants to school districts located in the taconite tax relief area defined in Minnesota Statutes, 
203.4 	section 273.134, or the taconite assistance area defined in Minnesota Statutes, section 
203.5 	273.1341, to be used by the school districts to pay for building projects, such as energy 
203.6 	efficiency, technology, infrastructure, health, safety, and maintenance improvements.
203.7 		Subd. 2.Appropriation. (a) There is annually appropriated from the distribution of 
203.8 	taconite production tax revenues under Minnesota Statues, section 298.28, prior to the 
203.9 	calculation of the amount of the remainder under Minnesota Statutes, section 298.28, 
203.10 	subdivision 11, an amount sufficient to pay when due the principal and interest on the 
203.11 	bonds issued pursuant to subdivision 1. The appropriation under this section must not 
203.12 	exceed an amount equal to ten cents per taxable ton.
203.13 	(b) If in any year the amount available under paragraph (a) is insufficient to pay 
203.14 	principal and interest due on the bonds in that year, an additional amount is appropriated 
203.15 	from the Douglas J. Johnson fund to make up the deficiency. 
203.16 	(c) The appropriation under this subdivision terminates upon payment or maturity of 
203.17 	the last of the bonds issued under this section.
203.18 		Subd. 3.Credit enhancement. The bonds issued under this section are "debt 
203.19 	obligations" and the commissioner of Iron Range resources and rehabilitation is a "district" 
203.20 	for purposes of Minnesota Statutes, section 126C.55, provided that advances made under 
203.21 	Minnesota Statutes, section 126C.55, subdivision 2, are not subject to Minnesota Statutes, 
203.22 	section 126C.55, subdivisions 4 to 7.

203.23 	EFFECTIVE DATE. This section is effective the day following final enactment and 
203.24 	applies beginning with the 2014 distribution under Minnesota Statutes, section 298.28.

203.25 	ARTICLE 12
203.26 	PUBLIC FINANCE

203.27 	Section 1. Minnesota Statutes 2012, section 118A.04, subdivision 3, is amended to read:
203.28 		Subd. 3.State and local securities. Funds may be invested in the following:
203.29 	(1) any security which is a general obligation of any state or local government with 
203.30 	taxing powers which is rated "A" or better by a national bond rating service;
203.31 	(2) any security which is a revenue obligation of any state or local government with 
203.32 	taxing powers which is rated "AA" or better by a national bond rating service; and
204.1 	(3) a general obligation of the Minnesota housing finance agency which is a moral 
204.2 	obligation of the state of Minnesota and is rated "A" or better by a national bond rating 
204.3 	agency.; and
204.4 	(4) any security which is an obligation of a school district with an original maturity 
204.5 	not exceeding 13 months and (i) rated in the highest category by a national bond rating 
204.6 	service or (ii) enrolled in the credit enhancement program pursuant to section 126C.55.

204.7 	Sec. 2. Minnesota Statutes 2012, section 118A.05, subdivision 5, is amended to read:
204.8 		Subd. 5.Guaranteed investment contracts. Agreements or contracts for 
204.9 	guaranteed investment contracts may be entered into if they are issued or guaranteed 
204.10 	by United States commercial banks, domestic branches of foreign banks, United States 
204.11 	insurance companies, or their Canadian subsidiaries, or the domestic affiliates of any 
204.12 	of the foregoing. The credit quality of the issuer's or guarantor's short- and long-term 
204.13 	unsecured debt must be rated in one of the two highest categories by a nationally 
204.14 	recognized rating agency. Agreements or contracts for guaranteed investment contracts 
204.15 	with a term of 18 months or less may be entered into regardless of the credit quality of 
204.16 	the issuer's or guarantor's long-term unsecured debt, provided that the credit quality of 
204.17 	the issuer's short-term unsecured debt is rated in the highest category by a nationally 
204.18 	recognized rating agency. Should the issuer's or guarantor's credit quality be downgraded 
204.19 	below "A", the government entity must have withdrawal rights.

204.20 	Sec. 3. Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:
204.21 		Subd. 7.Repayment. An implementing entity that finances an energy improvement 
204.22 	under this section must:
204.23 	(1) secure payment with a lien against the benefited qualifying real property; and
204.24 	(2) collect repayments as a special assessment as provided for in section 429.101 
204.25 	or by charter, provided that special assessments may be made payable in up to 20 equal 
204.26 	annual installments.
204.27 	If the implementing entity is an authority, the local government that authorized 
204.28 	the authority to act as implementing entity shall impose and collect special assessments 
204.29 	necessary to pay debt service on bonds issued by the implementing entity under subdivision 
204.30 	8, and shall transfer all collections of the assessments upon receipt to the authority.

204.31 	Sec. 4. Minnesota Statutes 2012, section 373.01, subdivision 3, is amended to read:
204.32 		Subd. 3.Capital notes. (a) A county board may, by resolution and without 
204.33 	referendum, issue capital notes subject to the county debt limit to purchase capital 
205.1 	equipment useful for county purposes that has an expected useful life at least equal to the 
205.2 	term of the notes. The notes shall be payable in not more than ten years and shall be 
205.3 	issued on terms and in a manner the board determines. A tax levy shall be made for 
205.4 	payment of the principal and interest on the notes, in accordance with section 475.61, 
205.5 	as in the case of bonds.
205.6 	(b) For purposes of this subdivision, "capital equipment" means:
205.7 	(1) public safety, ambulance, road construction or maintenance, and medical 
205.8 	equipment; and
205.9 	(2) computer hardware and software, without regard to its expected useful life, 
205.10 	whether bundled with machinery or equipment or unbundled., together with application 
205.11 	development services and training related to the use of the computer hardware or software.

205.12 	Sec. 5. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
205.13 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
205.14 	the meanings given.
205.15 	(a) "Bonds" means an obligation as defined under section 475.51.
205.16 	(b) "Capital improvement" means acquisition or betterment of public lands, 
205.17 	buildings, or other improvements within the county for the purpose of a county courthouse, 
205.18 	administrative building, health or social service facility, correctional facility, jail, law 
205.19 	enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads 
205.20 	and bridges, public works facilities, fairground buildings, and records and data storage 
205.21 	facilities, and the acquisition of development rights in the form of conservation easements 
205.22 	under chapter 84C. An improvement must have an expected useful life of five years or more 
205.23 	to qualify. "Capital improvement" does not include a recreation or sports facility building 
205.24 	(such as, but not limited to, a gymnasium, ice arena, racquet sports facility, swimming 
205.25 	pool, exercise room or health spa), unless the building is part of an outdoor park facility 
205.26 	and is incidental to the primary purpose of outdoor recreation. For purposes of this section, 
205.27 	"capital improvement" includes expenditures for purposes described in this paragraph that 
205.28 	have been incurred by a county before approval of a capital improvement plan, if such 
205.29 	expenditures are included in a capital improvement plan approved on or before the date of 
205.30 	the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
205.31 	(c) "Metropolitan county" means a county located in the seven-county metropolitan 
205.32 	area as defined in section 473.121 or a county with a population of 90,000 or more.
205.33 	(d) "Population" means the population established by the most recent of the 
205.34 	following (determined as of the date the resolution authorizing the bonds was adopted):
205.35 	(1) the federal decennial census,
206.1 	(2) a special census conducted under contract by the United States Bureau of the 
206.2 	Census, or
206.3 	(3) a population estimate made either by the Metropolitan Council or by the state 
206.4 	demographer under section 4A.02.
206.5 	(e) "Qualified indoor ice arena" means a facility that meets the requirements of 
206.6 	section 373.43.
206.7 	(f) "Tax capacity" means total taxable market value, but does not include captured 
206.8 	market value.

206.9 	Sec. 6. Minnesota Statutes 2012, section 373.40, subdivision 2, is amended to read:
206.10 		Subd. 2.Application of election requirement. (a) Bonds issued by a county 
206.11 	to finance capital improvements under an approved capital improvement plan are not 
206.12 	subject to the election requirements of section 375.18 or 475.58. The bonds must be 
206.13 	approved by vote of at least three-fifths of the members of the county board. In the case 
206.14 	of a metropolitan county, the bonds must be approved by vote of at least two-thirds of 
206.15 	the members of the county board.
206.16 	(b) Before issuance of bonds qualifying under this section, the county must publish 
206.17 	a notice of its intention to issue the bonds and the date and time of a hearing to obtain 
206.18 	public comment on the matter. The notice must be published in the official newspaper 
206.19 	of the county or in a newspaper of general circulation in the county. The notice must be 
206.20 	published at least 14, but not more than 28, days before the date of the hearing.
206.21 	(c) A county may issue the bonds only upon obtaining the approval of a majority of 
206.22 	the voters voting on the question of issuing the obligations, if a petition requesting a vote 
206.23 	on the issuance is signed by voters equal to five percent of the votes cast in the county in 
206.24 	the last county general election and is filed with the county auditor within 30 days after 
206.25 	the public hearing. The commissioner of revenue shall prepare a suggested form of the 
206.26 	question to be presented at the election. If the county elects not to submit the question to 
206.27 	the voters, the county shall not propose the issuance of bonds under this section for the 
206.28 	same purpose and in the same amount for a period of 365 days from the date of receipt 
206.29 	of the petition. If the question of issuing the bonds is submitted and not approved by the 
206.30 	voters, the provisions of section 475.58, subdivision 1a, shall apply.

206.31 	Sec. 7. Minnesota Statutes 2012, section 383D.41, is amended by adding a subdivision 
206.32 	to read:
206.33 		Subd. 10.Housing improvement areas. (a) The Dakota County Community 
206.34 	Development Agency has all powers of a city, in addition to its existing powers as an 
207.1 	implementing entity, under sections 428A.11 to 428A.21, in connection with housing 
207.2 	improvement areas in Dakota County. For purposes of the Dakota County Community 
207.3 	Development Agency's exercise of those powers the provisions of this subdivision apply.
207.4 	(b) References in sections 428A.11 to 428A.21 to:
207.5 	(1) a "mayor" are references to the executive director of the Dakota County 
207.6 	Community Development Agency;
207.7 	(2) a "council" are references to the board of commissioners of the Dakota County 
207.8 	Community Development Agency; and
207.9 	(3) a "city clerk" are references to an official of the Dakota County Community 
207.10 	Development Agency designated from time to time by the executive director of the Dakota 
207.11 	County Community Development Agency. 
207.12 	(c) Notwithstanding section 428A.11, subdivision 3, and 428A.13, subdivision 1, 
207.13 	the governing body of the Dakota County Community Development Agency may adopt 
207.14 	a resolution, rather than an ordinance, establishing one or more housing improvement 
207.15 	areas, and "enabling ordinance" means a resolution so adopted for purposes of sections 
207.16 	428A.11 to 428A.21.
207.17 	(d) As long as the governing body of the Dakota County Community Development 
207.18 	Agency and the Dakota County Board of Commissioners consists of identical membership, 
207.19 	the Dakota County Community Development Agency may pledge the full faith, credit and 
207.20 	taxing power of Dakota County to obligations issued by the Dakota County Community 
207.21 	Development Agency under section 428A.16.
207.22 	(e) Notwithstanding the provisions of section 428A.21, the establishment by the 
207.23 	Dakota County Community Development Agency of a new housing improvement area 
207.24 	after June 30, 2016, requires enactment of a special law authorizing establishment of the 
207.25 	area. Any extensions of the deadline for housing improvement districts under general law 
207.26 	beyond that date or repeal of the deadline also applies to housing improvement areas 
207.27 	established by the Dakota County Community Development Agency.

207.28 	Sec. 8. Minnesota Statutes 2012, section 410.32, is amended to read:
207.29 	410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
207.30 	(a) Notwithstanding any contrary provision of other law or charter, a home rule 
207.31 	charter city may, by resolution and without public referendum, issue capital notes subject 
207.32 	to the city debt limit to purchase capital equipment.
207.33 	(b) For purposes of this section, "capital equipment" means:
207.34 	(1) public safety equipment, ambulance and other medical equipment, road 
207.35 	construction and maintenance equipment, and other capital equipment; and
208.1 	(2) computer hardware and software, without regard to its expected useful life,
208.2 	 whether bundled with machinery or equipment or unbundled., together with application 
208.3 	development services and training related to the use of the computer hardware and software.
208.4 	(c) The equipment or software must have an expected useful life at least as long 
208.5 	as the term of the notes.
208.6 	(d) The notes shall be payable in not more than ten years and be issued on terms and 
208.7 	in the manner the city determines. The total principal amount of the capital notes issued 
208.8 	in a fiscal year shall not exceed 0.03 percent of the market value of taxable property 
208.9 	in the city for that year.
208.10 	(e) A tax levy shall be made for the payment of the principal and interest on the 
208.11 	notes, in accordance with section 475.61, as in the case of bonds.
208.12 	(f) Notes issued under this section shall require an affirmative vote of two-thirds of 
208.13 	the governing body of the city.
208.14 	(g) Notwithstanding a contrary provision of other law or charter, a home rule charter 
208.15 	city may also issue capital notes subject to its debt limit in the manner and subject to the 
208.16 	limitations applicable to statutory cities pursuant to section 412.301.

208.17 	Sec. 9. Minnesota Statutes 2012, section 412.301, is amended to read:
208.18 	412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
208.19 	(a) The council may issue certificates of indebtedness or capital notes subject to the 
208.20 	city debt limits to purchase capital equipment.
208.21 	(b) For purposes of this section, "capital equipment" means:
208.22 	(1) public safety equipment, ambulance and other medical equipment, road 
208.23 	construction and maintenance equipment, and other capital equipment; and
208.24 	(2) computer hardware and software, without regard to its expected useful life,
208.25 	 whether bundled with machinery or equipment or unbundled., together with application 
208.26 	development services and training related to the use of the computer hardware or software.
208.27 	(c) The equipment or software must have an expected useful life at least as long as 
208.28 	the terms of the certificates or notes.
208.29 	(d) Such certificates or notes shall be payable in not more than ten years and shall be 
208.30 	issued on such terms and in such manner as the council may determine.
208.31 	(e) If the amount of the certificates or notes to be issued to finance any such purchase 
208.32 	exceeds 0.25 percent of the market value of taxable property in the city, they shall not 
208.33 	be issued for at least ten days after publication in the official newspaper of a council 
208.34 	resolution determining to issue them; and if before the end of that time, a petition asking 
208.35 	for an election on the proposition signed by voters equal to ten percent of the number of 
209.1 	voters at the last regular municipal election is filed with the clerk, such certificates or notes 
209.2 	shall not be issued until the proposition of their issuance has been approved by a majority 
209.3 	of the votes cast on the question at a regular or special election.
209.4 	(f) A tax levy shall be made for the payment of the principal and interest on such 
209.5 	certificates or notes, in accordance with section 475.61, as in the case of bonds.

209.6 	Sec. 10. [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
209.7 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms 
209.8 	have the meanings given them.
209.9 	(b) "Governing body" means the city council of a municipality.
209.10 	(c) "Improvements" means construction, reconstruction, and facility upgrades 
209.11 	involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and 
209.12 	their repair; milling; overlaying; drainage and storm sewers; excavation; base work; 
209.13 	subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement 
209.14 	markings; boulevard and easement restoration; impact mitigation; connection and 
209.15 	reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls; 
209.16 	fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit 
209.17 	infrastructure" does not include commuter rail rolling stock, light rail vehicles, or 
209.18 	transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning, 
209.19 	alternative analyses, environmental studies, engineering, or construction of transit ways; 
209.20 	or operating assistance for transit ways.
209.21 	(d) "Maintenance" means striping, seal coating, crack sealing, pavement repair, 
209.22 	sidewalk maintenance, signal maintenance, street light maintenance, and signage.
209.23 	(e) "Municipal street" means a street, alley, or public way in which the municipality 
209.24 	is the road authority with powers conferred by section 429.021.
209.25 	(f) "Municipality" means a home rule charter or statutory city.
209.26 	(g) "Street improvement district" means a geographic area designated by a 
209.27 	municipality and located within the municipality within which street improvements and 
209.28 	maintenance may be undertaken and financed according to this section.
209.29 	(h) "Unimproved parcel" means a parcel of land that abuts an:
209.30 	(1) unimproved municipal street and that is not served by municipal sewer or water 
209.31 	utilities; or 
209.32 	(2) improved municipal street and served by municipal sewer or water utilities 
209.33 	and that:
209.34 	(i) is not improved by construction of an authorized structure; or
209.35 	(ii) contains a structure that has not previously been occupied.
210.1 		Subd. 2.Authorization. A municipality may establish by ordinance municipal 
210.2 	street improvement districts and may defray all or part of the total costs of municipal street 
210.3 	improvements and maintenance by apportioning street improvement fees to all of the 
210.4 	developed parcels located in the district. A street improvement district must not include 
210.5 	any property already located in another street improvement district.
210.6 		Subd. 3.Uniformity. (a) The total costs of municipal street improvements and 
210.7 	maintenance must be apportioned to all developed parcels or developed tracts of land 
210.8 	located in the established street improvement district on a uniform basis within each 
210.9 	classification of real estate. Apportionment must be made on the basis of one of the 
210.10 	following:
210.11 	(1) estimated market value;
210.12 	(2) tax capacity;
210.13 	(3) front footage;
210.14 	(4) land or building area; or
210.15 	(5) some combination of clauses (1) to (4).
210.16 	(b) Costs must not be apportioned in such a way that the cost borne by any 
210.17 	classification of property is more than twice the cost that would be borne by that 
210.18 	classification if costs were apportioned uniformly to all classifications of property under 
210.19 	the method selected in paragraph (a), clauses (1) to (5).
210.20 		Subd. 4.Adoption of plan. Before establishing a municipal street improvement 
210.21 	district or authorizing a street improvement fee, a municipality must propose and adopt a 
210.22 	street improvement plan that identifies the location of the municipal street improvement 
210.23 	district and identifies and estimates the costs of the proposed improvements during the 
210.24 	proposed period of collection of municipal street improvement fees, which must be for 
210.25 	a period of at least five years and at most 20 years. Notice of a public hearing on the 
210.26 	proposed plan must be given by mail to all affected landowners at least 30 days before 
210.27 	the hearing and posted for at least 30 days before the hearing. At the public hearing, the 
210.28 	governing body must present the plan and all affected landowners in attendance must have 
210.29 	the opportunity to comment before the governing body considers adoption of the plan.
210.30 		Subd. 5.Use of fees. Revenues from street improvement fees must be placed in 
210.31 	a separate account and used only for projects located within the district and identified 
210.32 	in the municipal street improvement plan.
210.33 		Subd. 6.Collection; up to 20 years. (a) An ordinance adopted under this section 
210.34 	must provide for billing and payment of the fee on a monthly, quarterly, or other basis 
210.35 	as directed by the governing body. The governing body may collect municipal street 
210.36 	improvement fees within a street improvement district for a maximum of 20 years.
211.1 	(b) Fees that, as of October 15 of each year, have remained unpaid for at least 30 
211.2 	days may be certified to the county auditor for collection as a special assessment payable 
211.3 	in the following calendar year against the affected property.
211.4 		Subd. 7.Improvement fee. A municipality may impose a municipal street 
211.5 	improvement fee by ordinance. The ordinance must not be voted on or adopted until after 
211.6 	public notice is provided and a public hearing is held in the same manner as provided in 
211.7 	subdivision 4.
211.8 		Subd. 8.Not exclusive means of financing improvements. The use of the 
211.9 	municipal street improvement fee by a municipality does not restrict the municipality from 
211.10 	imposing other measures to pay the costs of local street improvements or maintenance, 
211.11 	except that a municipality must not impose special assessments for projects funded with 
211.12 	street improvement fees.
211.13 		Subd. 9.Unimproved parcels; fees. A municipality may not impose a street 
211.14 	improvement fee on any unimproved parcel located within an established street 
211.15 	improvement district until at least three years after either the date of substantial completion 
211.16 	of the paving of the previous unimproved municipal street or the date which a structure is 
211.17 	built and first occupied pursuant to a certificate of occupancy, whichever is later.
211.18 		Subd. 10.Exempt property. A municipality must not impose a municipal street 
211.19 	improvement fee on property that is exempt from taxation under the provisions of the 
211.20 	Minnesota Constitution, article X, section 1.

211.21 	EFFECTIVE DATE. This section is effective July 1, 2013.

211.22 	Sec. 11. Minnesota Statutes 2012, section 473.39, is amended by adding a subdivision 
211.23 	to read:
211.24 		Subd. 1s.Obligations. After July 1, 2013, in addition to other authority in this 
211.25 	section, the council may issue certificates of indebtedness, bonds, or other obligations 
211.26 	under this section in an amount not exceeding $35,800,000 for capital expenditures as 
211.27 	prescribed in the council's transit capital improvement program and for related costs, 
211.28 	including the costs of issuance and sale of the obligations.

211.29 	EFFECTIVE DATE. This section is effective the day following final enactment 
211.30 	and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
211.31 	Washington.

211.32 	Sec. 12. Minnesota Statutes 2012, section 474A.04, subdivision 1a, is amended to read:
212.1 		Subd. 1a.Entitlement reservations; carryforward; deduction. Any amount 
212.2 	returned by an entitlement issuer before July 15 shall be reallocated through the housing 
212.3 	pool. Any amount returned on or after July 15 shall be reallocated through the unified 
212.4 	pool. An amount returned after the last Monday in November shall be reallocated to the 
212.5 	Minnesota Housing Finance Agency. Any amount of bonding authority that an entitlement 
212.6 	issuer carries forward under federal tax law that is not permanently issued or for which 
212.7 	the governing body of the entitlement issuer has not enacted a resolution electing to use 
212.8 	the authority for mortgage credit certificates and has not provided a notice of issue to the 
212.9 	commissioner before 4:30 p.m. on the last business day in December of the succeeding 
212.10 	calendar year shall be deducted from the entitlement allocation for that entitlement issuer 
212.11 	in the next succeeding calendar year. Any amount deducted from an entitlement issuer's 
212.12 	allocation under this subdivision shall be reallocated to other entitlement issuers, the 
212.13 	housing pool, the small issue pool, and the public facilities pool on a proportional basis 
212.14 	consistent with section 474A.03.

212.15 	EFFECTIVE DATE. This section is effective the day following final enactment 
212.16 	and applies to any bonding authority allocated in 2012 and subsequent years.

212.17 	Sec. 13. Minnesota Statutes 2012, section 474A.062, is amended to read:
212.18 	474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION 120-DAY 
212.19 	ISSUANCE EXEMPTION.
212.20 	The Minnesota Office of Higher Education is exempt from the 120-day issuance 
212.21 	requirements in this chapter and may carry forward allocations for student loan bonds into 
212.22 	one successive calendar year, subject to carryforward notice requirements of section 
212.23 	474A.131, subdivision 2.

212.24 	EFFECTIVE DATE. This section is effective the day following final enactment 
212.25 	and applies to any bonding authority allocated in 2012 and subsequent years.

212.26 	Sec. 14. Minnesota Statutes 2012, section 474A.091, subdivision 3a, is amended to read:
212.27 		Subd. 3a.Mortgage bonds. (a) Bonding authority remaining in the unified pool on 
212.28 	October 1 is available for single-family housing programs for cities that applied in January 
212.29 	and received an allocation under section 474A.061, subdivision 2a, in the same calendar 
212.30 	year. The Minnesota Housing Finance Agency shall receive an allocation for mortgage 
212.31 	bonds pursuant to this section, minus any amounts for a city or consortium that intends to 
212.32 	issue bonds on its own behalf under paragraph (c).
213.1 	(b) The agency may issue bonds on behalf of participating cities. The agency shall 
213.2 	request an allocation from the commissioner for all applicants who choose to have the 
213.3 	agency issue bonds on their behalf and the commissioner shall allocate the requested 
213.4 	amount to the agency. Allocations shall be awarded by the commissioner each Monday 
213.5 	commencing on the first Monday in October through the last Monday in November for 
213.6 	applications received by 4:30 p.m. on the Monday of the week preceding an allocation.
213.7 	For cities who choose to have the agency issue bonds on their behalf, allocations 
213.8 	will be made loan by loan, on a first-come, first-served basis among the cities. The 
213.9 	agency shall submit an application fee pursuant to section 474A.03, subdivision 4, and an 
213.10 	application deposit equal to two percent of the requested allocation to the commissioner 
213.11 	when requesting an allocation from the unified pool. After awarding an allocation and 
213.12 	receiving a notice of issuance for mortgage bonds issued on behalf of the participating 
213.13 	cities, the commissioner shall transfer the application deposit to the Minnesota Housing 
213.14 	Finance Agency.
213.15 	For purposes of paragraphs (a) to (d), "city" means a county or a consortium of 
213.16 	local government units that agree through a joint powers agreement to apply together 
213.17 	for single-family housing programs, and has the meaning given it in section 462C.02, 
213.18 	subdivision 6. "Agency" means the Minnesota Housing Finance Agency.
213.19 	(c) Any city that received an allocation pursuant to section 474A.061, subdivision 
213.20 	2a, paragraph (f), in the current year that wishes to receive an additional allocation from 
213.21 	the unified pool and issue bonds on its own behalf or pursuant to a joint powers agreement 
213.22 	shall notify the Minnesota Housing Finance Agency by the third Monday in September. 
213.23 	The total amount of allocation for mortgage bonds for a city choosing to issue bonds on its 
213.24 	own behalf or through a joint powers agreement is limited to the lesser of: (i) the amount 
213.25 	requested, or (ii) the product of the total amount available for mortgage bonds from the 
213.26 	unified pool, multiplied by the ratio of the population of each city that applied in January 
213.27 	and received an allocation under section 474A.061, subdivision 2a, in the same calendar 
213.28 	year, as determined by the most recent estimate of the city's population released by the 
213.29 	state demographer's office to the total of the population of all the cities that applied in 
213.30 	January and received an allocation under section 474A.061, subdivision 2a, in the same 
213.31 	calendar year. If a city choosing to issue bonds on its own behalf or through a joint powers 
213.32 	agreement is located within a county that has also chosen to issue bonds on its own behalf 
213.33 	or through a joint powers agreement, the city's population will be deducted from the 
213.34 	county's population in calculating the amount of allocations under this paragraph.
213.35 	The Minnesota Housing Finance Agency shall notify each city choosing to issue 
213.36 	bonds on its own behalf or pursuant to a joint powers agreement of the amount of its 
214.1 	allocation by October 15. Upon determining the amount of the allocation of each choosing 
214.2 	to issue bonds on its own behalf or through a joint powers agreement, the agency shall 
214.3 	forward a list specifying the amounts allotted to each city.
214.4 	A city that chooses to issue bonds on its own behalf or through a joint powers 
214.5 	agreement may request an allocation from the commissioner by forwarding an application 
214.6 	with an application fee pursuant to section 474A.03, subdivision 4, and an application 
214.7 	deposit equal to two percent of the requested amount to the commissioner no later than 
214.8 	4:30 p.m. on the Monday of the week preceding an allocation. Allocations to cities that 
214.9 	choose to issue bonds on their own behalf shall be awarded by the commissioner on 
214.10 	the first Monday after October 15 through the last Monday in November. No city may 
214.11 	receive an allocation from the commissioner after the last Monday in November. The 
214.12 	commissioner shall allocate the requested amount to the city or cities subject to the 
214.13 	limitations under this subdivision.
214.14 	If a city issues mortgage bonds from an allocation received under this paragraph, 
214.15 	the issuer must provide for the recycling of funds into new loans. If the issuer is not 
214.16 	able to provide for recycling, the issuer must notify the commissioner in writing of the 
214.17 	reason that recycling was not possible and the reason the issuer elected not to have the 
214.18 	Minnesota Housing Finance Agency issue the bonds. "Recycling" means the use of money 
214.19 	generated from the repayment and prepayment of loans for further eligible loans or for the 
214.20 	redemption of bonds and the issuance of current refunding bonds.
214.21 	(d) No entitlement city or county or city in an entitlement county may apply for or 
214.22 	be allocated authority to issue mortgage bonds or use mortgage credit certificates from 
214.23 	the unified pool.
214.24 	(e) An allocation awarded to the agency for mortgage bonds under this section 
214.25 	may be carried forward by the agency into the next succeeding calendar year subject to 
214.26 	notice requirements under section 474A.131and is available until the last business day in 
214.27 	December of that succeeding calendar year.

214.28 	EFFECTIVE DATE. This section is effective the day following final enactment 
214.29 	and applies to any bonding authority allocated in 2012 and subsequent years.

214.30 	Sec. 15. Minnesota Statutes 2012, section 475.521, subdivision 1, is amended to read:
214.31 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
214.32 	the meanings given.
214.33 	(a) "Bonds" mean an obligation defined under section 475.51.
214.34 	(b) "Capital improvement" means acquisition or betterment of public lands, 
214.35 	buildings or other improvements for the purpose of a city hall, town hall, library, public 
215.1 	safety facility, and public works facility. An improvement must have an expected useful 
215.2 	life of five years or more to qualify. Capital improvement does not include light rail transit 
215.3 	or any activity related to it, or a park, road, bridge, administrative building other than a 
215.4 	city or town hall, or land for any of those facilities. For purposes of this section, "capital 
215.5 	improvement" includes expenditures for purposes described in this paragraph that have 
215.6 	been incurred by a municipality before approval of a capital improvement plan, if such 
215.7 	expenditures are included in a capital improvement plan approved on or before the date of 
215.8 	the public hearing under subdivision 2 regarding issuance of bonds for such expenditures.
215.9 	(c) "Municipality" means a home rule charter or statutory city or a town described in 
215.10 	section 368.01, subdivision 1 or 1a.

215.11 	Sec. 16. Minnesota Statutes 2012, section 475.521, subdivision 2, is amended to read:
215.12 		Subd. 2.Election requirement. (a) Bonds issued by a municipality to finance 
215.13 	capital improvements under an approved capital improvements plan are not subject to the 
215.14 	election requirements of section 475.58. The bonds must be approved by an affirmative 
215.15 	vote of three-fifths of the members of a five-member governing body. In the case of a 
215.16 	governing body having more or less than five members, the bonds must be approved by a 
215.17 	vote of at least two-thirds of the members of the governing body.
215.18 	(b) Before the issuance of bonds qualifying under this section, the municipality 
215.19 	must publish a notice of its intention to issue the bonds and the date and time of the 
215.20 	hearing to obtain public comment on the matter. The notice must be published in the 
215.21 	official newspaper of the municipality or in a newspaper of general circulation in the 
215.22 	municipality. Additionally, the notice may be posted on the official Web site, if any, of the 
215.23 	municipality. The notice must be published at least 14 but not more than 28 days before 
215.24 	the date of the hearing.
215.25 	(c) A municipality may issue the bonds only after obtaining the approval of a 
215.26 	majority of the voters voting on the question of issuing the obligations, if a petition 
215.27 	requesting a vote on the issuance is signed by voters equal to five percent of the votes cast 
215.28 	in the municipality in the last municipal general election and is filed with the clerk within 
215.29 	30 days after the public hearing. The commissioner of revenue shall prepare a suggested 
215.30 	form of the question to be presented at the election. If the municipality elects not to submit 
215.31 	the question to the voters, the municipality shall not propose the issuance of bonds under 
215.32 	this section for the same purpose and in the same amount for a period of 365 days from the 
215.33 	date of receipt of the petition. If the question of issuing the bonds is submitted and not 
215.34 	approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply.

216.1 	Sec. 17. Minnesota Statutes 2012, section 475.58, subdivision 3b, is amended to read:
216.2 		Subd. 3b.Street reconstruction and bituminous overlays. (a) A municipality may, 
216.3 	without regard to the election requirement under subdivision 1, issue and sell obligations 
216.4 	for street reconstruction or bituminous overlays, if the following conditions are met:
216.5 	(1) the streets are reconstructed or overlaid under a street reconstruction or overlay 
216.6 	plan that describes the street reconstruction or overlay to be financed, the estimated costs, 
216.7 	and any planned reconstruction or overlay of other streets in the municipality over the 
216.8 	next five years, and the plan and issuance of the obligations has been approved by a vote 
216.9 	of all of the members of the governing body present at the meeting following a public 
216.10 	hearing for which notice has been published in the official newspaper at least ten days but 
216.11 	not more than 28 days prior to the hearing; and
216.12 	(2) if a petition requesting a vote on the issuance is signed by voters equal to 
216.13 	five percent of the votes cast in the last municipal general election and is filed with the 
216.14 	municipal clerk within 30 days of the public hearing, the municipality may issue the bonds 
216.15 	only after obtaining the approval of a majority of the voters voting on the question of the 
216.16 	issuance of the obligations. If the municipality elects not to submit the question to the 
216.17 	voters, the municipality shall not propose the issuance of bonds under this section for the 
216.18 	same purpose and in the same amount for a period of 365 days from the date of receipt 
216.19 	of the petition. If the question of issuing the bonds is submitted and not approved by the 
216.20 	voters, the provisions of section 475.58, subdivision 1a, shall apply.
216.21 	(b) Obligations issued under this subdivision are subject to the debt limit of the 
216.22 	municipality and are not excluded from net debt under section 475.51, subdivision 4.
216.23 	(c) For purposes of this subdivision, street reconstruction and bituminous overlays 
216.24 	includes utility replacement and relocation and other activities incidental to the street 
216.25 	reconstruction, turn lanes and other improvements having a substantial public safety 
216.26 	function, realignments, other modifications to intersect with state and county roads, and 
216.27 	the local share of state and county road projects. For purposes of this subdivision, "street 
216.28 	reconstruction" includes expenditures for street reconstruction that have been incurred 
216.29 	by a municipality before approval of a street reconstruction plan, if such expenditures 
216.30 	are included in a street reconstruction plan approved on or before the date of the public 
216.31 	hearing under paragraph (a), clause (1) regarding issuance of bonds for such expenditures.
216.32 	(d) Except in the case of turn lanes, safety improvements, realignments, intersection 
216.33 	modifications, and the local share of state and county road projects, street reconstruction 
216.34 	and bituminous overlays does not include the portion of project cost allocable to widening 
216.35 	a street or adding curbs and gutters where none previously existed.

217.1 	Sec. 18. Laws 1971, chapter 773, section 1, subdivision 2, as amended by Laws 1974, 
217.2 	chapter 351, section 5, Laws 1976, chapter 234, sections 1 and 7, Laws 1978, chapter 788, 
217.3 	section 1, Laws 1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws 
217.4 	1988, chapter 513, section 1, Laws 1992, chapter 511, article 9, section 23, Laws 1998, 
217.5 	chapter 389, article 3, section 27, and Laws 2002, chapter 390, section 23, is amended to 
217.6 	read:
217.7 	Subd. 2. For each of the years 2003 to 2013 to 2024, the city of St. Paul is 
217.8 	authorized to issue bonds in the aggregate principal amount of $20,000,000 for each year.

217.9 	EFFECTIVE DATE. This section is effective the day after compliance by the 
217.10 	governing body of the city of St. Paul with Minnesota Statutes, section 645.021, 
217.11 	subdivisions 2 and 3.

217.12 	Sec. 19. CARRYFORWARD OF BONDING AUTHORITY FOR 2011; NO 
217.13 	DEDUCTION FROM ENTITLEMENT ALLOCATION.
 217.14 	Notwithstanding Minnesota Statutes, section 474A.04, subdivision 1a, bonding 
217.15 	authority that was allocated to an entitlement issuer in 2011 and that was carried forward 
217.16 	under federal tax law, but for which the entitlement issuer did not provide a notice of issue 
217.17 	to the commissioner of management and budget before 4:30 p.m. on the last business 
217.18 	day of December 2012 must not be deducted from the entitlement allocation for that 
217.19 	entitlement issuer in 2013.

217.20 	EFFECTIVE DATE. This section is effective the day following final enactment 
217.21 	and applies retroactively to rescind any reallocation by the commissioner of management 
217.22 	and budget under Minnesota Statues, section 474A.04, subdivision 1a, of any amounts so 
217.23 	deducted.

217.24 	ARTICLE 13
217.25 	MISCELLANEOUS PROVISIONS

217.26 	Section 1. Minnesota Statutes 2012, section 163.051, is amended to read:
217.27 	163.051 METROPOLITAN COUNTY WHEELAGE TAX.
217.28 		Subdivision 1.Tax authorized. (a) Except as provided in paragraph (b) (c), the 
217.29 	board of commissioners of each metropolitan county is authorized to levy by resolution a 
217.30 	wheelage tax of $5 for the year 1972 and each subsequent year thereafter by resolution
217.31 	 at the rate specified in paragraph (b), on each motor vehicle that is kept in such county 
217.32 	when not in operation and that is subject to annual registration and taxation under chapter 
218.1 	168. The board may provide by resolution for collection of the wheelage tax by county 
218.2 	officials or it may request that the tax be collected by the state registrar of motor vehicles, 
218.3 	and. The state registrar of motor vehicles shall collect such tax on behalf of the county if 
218.4 	requested, as provided in subdivision 2.
218.5 	(b) The wheelage tax under this section is at the rate of:
218.6 	(1) from January 1, 2014, through December 31, 2017, $10 per year for each county 
218.7 	that authorizes the tax; and
218.8 	(2) on and after January 1, 2018, up to $20 per year, in any increment of a whole 
218.9 	dollar, as specified by each county that authorizes the tax.
218.10 	(c) The following vehicles are exempt from the wheelage tax:
218.11 	(1) motorcycles, as defined in section 169.011, subdivision 44;
218.12 	(2) motorized bicycles, as defined in section 169.011, subdivision 45; and
218.13 	(3) electric-assisted bicycles, as defined in section 169.011, subdivision 27; and
218.14 	(4) (3) motorized foot scooters, as defined in section 169.011, subdivision 46.
218.15 	(d) For any county that authorized the tax prior to the effective date of this section, 
218.16 	the wheelage tax continues at the rate provided under paragraph (b).
218.17 		Subd. 2.Collection by registrar of motor vehicles. The wheelage tax levied by 
218.18 	any metropolitan county, if made collectible by the state registrar of motor vehicles, 
218.19 	shall be certified by the county auditor to the registrar not later than August 1 in the year 
218.20 	before the calendar year or years for which the tax is levied, and the registrar shall collect 
218.21 	such tax with the motor vehicle taxes on the affected vehicles for such year or years. 
218.22 	Every owner and every operator of such a motor vehicle shall furnish to the registrar all 
218.23 	information requested by the registrar. No state motor vehicle tax on any such motor 
218.24 	vehicle for any such year shall be received or deemed paid unless the applicable wheelage 
218.25 	tax is paid therewith. The proceeds of the wheelage tax levied by any metropolitan county, 
218.26 	less any amount retained by the registrar to pay costs of collection of the wheelage tax, 
218.27 	shall be paid to the commissioner of management and budget and deposited in the state 
218.28 	treasury to the credit of the county wheelage tax fund of each metropolitan county.
218.29 		Subd. 2a.Tax proceeds deposited; costs of collection; appropriation.
 218.30 	Notwithstanding the provisions of any other law, the state registrar of motor vehicles shall 
218.31 	deposit the proceeds of the wheelage tax imposed by subdivision 2, to the credit of the 
218.32 	county wheelage tax fund account of each metropolitan county. The amount necessary to 
218.33 	pay the costs of collection of said tax is appropriated from the county wheelage tax fund
218.34 	 account of each metropolitan county to the state registrar of motor vehicles.
218.35 		Subd. 3.Distribution to metropolitan county; appropriation. On or before 
218.36 	April 1 in 1972 and each subsequent year, the commissioner of management and budget
219.1 	 On a monthly basis, the registrar of motor vehicles shall issue a warrant in favor of the 
219.2 	treasurer of each metropolitan county for which the registrar has collected a wheelage tax 
219.3 	in the amount of such tax then on hand in the county wheelage tax fund account. There 
219.4 	is hereby appropriated from the county wheelage tax fund account each year, to each 
219.5 	metropolitan county entitled to payments authorized by this section, sufficient moneys 
219.6 	to make such payments.
219.7 		Subd. 4.Use of tax. The treasurer of each metropolitan county receiving moneys
219.8 	 payments under subdivision 3 shall deposit such moneys payments in the county road and 
219.9 	bridge fund. The moneys shall be used for purposes authorized by law which are highway 
219.10 	purposes within the meaning of the Minnesota Constitution, article 14.
219.11 		Subd. 6.Metropolitan county defined. "Metropolitan county" means any of the 
219.12 	counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
219.13 		Subd. 7.Offenses; penalties; application of other laws. (a) Any owner or operator 
219.14 	of a motor vehicle who shall willfully give gives any false information relative to the tax 
219.15 	herein authorized by this section to the registrar of motor vehicles or any metropolitan
219.16 	 county, or who shall willfully fail or refuse fails or refuses to furnish any such information, 
219.17 	shall be is guilty of a misdemeanor.
219.18 	(b) Except as otherwise herein provided in this section, the collection and payment 
219.19 	of a wheelage tax and all matters relating thereto shall be are subject to all provisions of 
219.20 	law relating to collection and payment of motor vehicle taxes so far as applicable.

219.21 	EFFECTIVE DATE. This section is effective the day following final enactment 
219.22 	and applies to a registration period under Minnesota Statutes, chapter 168, starting on 
219.23 	or after January 1, 2014.

219.24 	Sec. 2. Minnesota Statutes 2012, section 237.52, subdivision 3, is amended to read:
219.25 		Subd. 3.Collection. Every provider of services capable of originating a TRS call, 
219.26 	including cellular communications and other nonwire access services, in this state shall, 
219.27 	except as provided in subdivision 3a, collect the charges established by the commission 
219.28 	under subdivision 2 and transfer amounts collected to the commissioner of public 
219.29 	safety in the same manner as provided in section 403.11, subdivision 1, paragraph (d). 
219.30 	The commissioner of public safety must deposit the receipts in the fund established in 
219.31 	subdivision 1.

219.32 	EFFECTIVE DATE. This section is effective January 1, 2014.

220.1 	Sec. 3. Minnesota Statutes 2012, section 237.52, is amended by adding a subdivision 
220.2 	to read:
220.3 		Subd. 3a.Fee for prepaid wireless telecommunications service. The fee 
220.4 	established in subdivision 2 does not apply to prepaid wireless telecommunications 
220.5 	services as defined in section 403.02, subdivision 17b, which are instead subject to the 
220.6 	prepaid wireless telecommunications access Minnesota fee established in section 403.161, 
220.7 	subdivision 1, paragraph (b). Collection, remittance, and deposit of prepaid wireless 
220.8 	telecommunications access Minnesota fees are governed by sections 403.161 and 403.162.

220.9 	EFFECTIVE DATE. This section is effective January 1, 2014.

220.10 	Sec. 4. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read:
220.11 		Subd. 8.Minnesota tax laws. For purposes of this chapter only, unless expressly 
220.12 	stated otherwise, "Minnesota tax laws" means:
220.13 	(1) the taxes, refunds, and fees administered by or paid to the commissioner under 
220.14 	chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24), 
220.15 	290, 290A, 291, 295, 297A, 297B, and 297H, and 403, or any similar Indian tribal tax 
220.16 	administered by the commissioner pursuant to any tax agreement between the state and 
220.17 	the Indian tribal government, and includes any laws for the assessment, collection, and 
220.18 	enforcement of those taxes, refunds, and fees; and
220.19 	(2) section 273.1315.

220.20 	EFFECTIVE DATE. This section is effective January 1, 2014.

220.21 	Sec. 5. Minnesota Statutes 2012, section 270B.12, subdivision 4, is amended to read:
220.22 		Subd. 4.Department of Public Safety. The commissioner may disclose return 
220.23 	information to the Department of Public Safety for the purpose of and to the extent 
220.24 	necessary to administer section sections 270C.725 and 403.16 to 403.162.

220.25 	EFFECTIVE DATE. This section is effective January 1, 2014.

220.26 	Sec. 6. Minnesota Statutes 2012, section 271.06, is amended by adding a subdivision 
220.27 	to read:
220.28 		Subd. 2a.Timely mailing treated as timely filing. (a) If, after the period prescribed 
220.29 	by subdivision 2, the original notice of appeal, proof of service upon the commissioner, 
220.30 	and filing fee are delivered by mail in the United States to the Tax Court administrator 
220.31 	or the court administrator of district court acting as court administrator of the Tax Court, 
220.32 	then the date of filing is the date of the United States postmark stamped on the envelope 
221.1 	or other appropriate wrapper in which the notice of appeal, proof of service upon the 
221.2 	commissioner, and filing fee are mailed.
221.3 	(b) This subdivision applies only if the postmark date falls within the period 
221.4 	prescribed by subdivision 2 and the original notice of appeal, proof of service upon the 
221.5 	commissioner, and filing fee are deposited in the mail in the United States in an envelope 
221.6 	or other appropriate wrapper, postage prepaid, properly addressed to the Tax Court 
221.7 	administrator or the court administrator of district court acting as court administrator of 
221.8 	the Tax Court.
221.9 	(c) Only the postmark of the United States Postal Service qualifies as proof of 
221.10 	timely mailing under this subdivision. Private postage meters do not qualify as proof of 
221.11 	timely filing under this subdivision. If the original notice of appeal, proof of service 
221.12 	upon the commissioner, and filing fee are sent by United States registered mail, the date 
221.13 	of registration is the postmark date. If the original notice of appeal, proof of service 
221.14 	upon the commissioner, and filing fee are sent by United States certified mail and the 
221.15 	sender's receipt is postmarked by the postal employee to whom the envelope containing 
221.16 	the original notice of appeal, proof of service upon the commissioner, and filing fee is 
221.17 	presented, the date of the United States postmark on the receipt is the postmark date.
221.18 	(d) A reference in this section to mail in the United States must be treated as 
221.19 	including a reference to any designated delivery service and a reference in this section to 
221.20 	a postmark by the United States Postal Service must be treated as including a reference 
221.21 	to any date recorded or marked by any designated delivery service in accordance with 
221.22 	section 7502(f) of the Internal Revenue Code.

221.23 	EFFECTIVE DATE. This section is effective for filings delivered by the United 
221.24 	States Postal Service with a postmark date after August 1, 2013.

221.25 	Sec. 7. Minnesota Statutes 2012, section 297E.021, subdivision 2, is amended to read:
221.26 		Subd. 2.Determination of revenue increase. By March 15 of each fiscal year, the 
221.27 	commissioner of management and budget, in consultation with the commissioner, shall 
221.28 	determine the estimated increase in revenues received from (1) taxes imposed under this 
221.29 	chapter, and (2) the taxes imposed under section 295.61 and the amendments to section 
221.30 	297A.61, subdivision 3, under article 8, section 1, of this act, over (3) the estimated 
221.31 	revenues under the February 2012 state budget forecast from the taxes imposed under this 
221.32 	chapter for that fiscal year. For fiscal years after fiscal year 2015, the commissioner of 
221.33 	management and budget shall use the February 2012 state budget forecast for fiscal year 
221.34 	2015 for the amount of taxes collected under this chapter as the baseline. All calculations 
222.1 	under this subdivision must be made net of estimated refunds of the taxes required to be 
222.2 	paid.

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

222.4 	Sec. 8. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision 
222.5 	to read:
222.6 		Subd. 17b.Prepaid wireless telecommunications service. "Prepaid wireless 
222.7 	telecommunications service" means a wireless telecommunications service that allows the 
222.8 	caller to dial 911 to access the 911 system, which service must be paid for in advance and is:
222.9 	(1) sold in predetermined units or dollars of which the number declines with use in a 
222.10 	known amount; or
222.11 	(2) provides unlimited use for a predetermined time period.
222.12 	The inclusion of nontelecommunications services, including the download of digital 
222.13 	products delivered electronically, content, and ancillary services, with a prepaid wireless 
222.14 	telecommunications service does not preclude that service from being considered a 
222.15 	prepaid wireless telecommunications service under this chapter.

222.16 	EFFECTIVE DATE. This section is effective January 1, 2014.

222.17 	Sec. 9. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision 
222.18 	to read:
222.19 		Subd. 20a.Wireless telecommunications service. Wireless telecommunications 
222.20 	service means a commercial mobile radio service, as that term is defined in United 
222.21 	States Code, title 47, section 332, subsection (d), including all broadband personal 
222.22 	communication services, wireless radio telephone services, and geographic area 
222.23 	specialized mobile radio licensees, that offer real-time, two-way voice service 
222.24 	interconnected with the public switched telephone network.

222.25 	EFFECTIVE DATE. This section is effective January 1, 2014.

222.26 	Sec. 10. Minnesota Statutes 2012, section 403.02, subdivision 21, is amended to read:
222.27 		Subd. 21.Wireless telecommunications service provider. "Wireless 
222.28 	telecommunications service provider" means a provider of commercial mobile radio 
222.29 	services, as that term is defined in United States Code, title 47, section 332, subsection 
222.30 	(d), including all broadband personal communications services, wireless radio telephone 
222.31 	services, geographic area specialized and enhanced specialized mobile radio services, and 
222.32 	incumbent wide area specialized mobile radio licensees, that offers real-time, two-way 
223.1 	voice service interconnected with the public switched telephone network and that is doing 
223.2 	business in the state of Minnesota wireless telecommunications service.

223.3 	EFFECTIVE DATE. This section is effective January 1, 2014.

223.4 	Sec. 11. Minnesota Statutes 2012, section 403.06, subdivision 1a, is amended to read:
223.5 		Subd. 1a.Biennial budget; annual financial report. The commissioner shall 
223.6 	prepare a biennial budget for maintaining the 911 system. By December 15 of each year, 
223.7 	the commissioner shall submit a report to the legislature detailing the expenditures for 
223.8 	maintaining the 911 system, the 911 fees collected, the balance of the 911 fund, and the 
223.9 	911-related administrative expenses of the commissioner, and the most recent forecast of 
223.10 	revenues and expenditures for the 911 emergency telecommunications service account, 
223.11 	including a separate projection of E911 fees from prepaid wireless customers and 
223.12 	projections of year-end fund balances. The commissioner is authorized to expend money 
223.13 	that has been appropriated to pay for the maintenance, enhancements, and expansion 
223.14 	of the 911 system.

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

223.16 	Sec. 12. Minnesota Statutes 2012, section 403.11, subdivision 1, is amended to read:
223.17 		Subdivision 1.Emergency telecommunications service fee; account. (a) Each 
223.18 	customer of a wireless or wire-line switched or packet-based telecommunications service 
223.19 	provider connected to the public switched telephone network that furnishes service capable 
223.20 	of originating a 911 emergency telephone call is assessed a fee based upon the number 
223.21 	of wired or wireless telephone lines, or their equivalent, to cover the costs of ongoing 
223.22 	maintenance and related improvements for trunking and central office switching equipment 
223.23 	for 911 emergency telecommunications service, to offset administrative and staffing costs 
223.24 	of the commissioner related to managing the 911 emergency telecommunications service 
223.25 	program, to make distributions provided for in section 403.113, and to offset the costs, 
223.26 	including administrative and staffing costs, incurred by the State Patrol Division of the 
223.27 	Department of Public Safety in handling 911 emergency calls made from wireless phones.
223.28 	(b) Money remaining in the 911 emergency telecommunications service account 
223.29 	after all other obligations are paid must not cancel and is carried forward to subsequent 
223.30 	years and may be appropriated from time to time to the commissioner to provide financial 
223.31 	assistance to counties for the improvement of local emergency telecommunications 
223.32 	services. The improvements may include providing access to 911 service for 
223.33 	telecommunications service subscribers currently without access and upgrading existing 
224.1 	911 service to include automatic number identification, local location identification, 
224.2 	automatic location identification, and other improvements specified in revised county 
224.3 	911 plans approved by the commissioner.
224.4 	(c) The fee may not be less than eight cents nor more than 65 cents a month until 
224.5 	June 30, 2008, not less than eight cents nor more than 75 cents a month until June 30, 
224.6 	2009, not less than eight cents nor more than 85 cents a month until June 30, 2010, and 
224.7 	not less than eight cents nor more than 95 cents a month on or after July 1, 2010, for 
224.8 	each customer access line or other basic access service, including trunk equivalents as 
224.9 	designated by the Public Utilities Commission for access charge purposes and including 
224.10 	wireless telecommunications services. With the approval of the commissioner of 
224.11 	management and budget, the commissioner of public safety shall establish the amount of 
224.12 	the fee within the limits specified and inform the companies and carriers of the amount to 
224.13 	be collected. When the revenue bonds authorized under section 403.27, subdivision 1, 
224.14 	have been fully paid or defeased, the commissioner shall reduce the fee to reflect that debt 
224.15 	service on the bonds is no longer needed. The commissioner shall provide companies and 
224.16 	carriers a minimum of 45 days' notice of each fee change. The fee must be the same for all 
224.17 	customers, except that the fee imposed under  this subdivision does not apply to prepaid 
224.18 	wireless telecommunications service, which is instead subject to the fee imposed under 
224.19 	section 403.161, subdivision 1, paragraph (a).
224.20 	(d) The fee must be collected by each wireless or wire-line telecommunications 
224.21 	service provider subject to the fee. Fees are payable to and must be submitted to the 
224.22 	commissioner monthly before the 25th of each month following the month of collection, 
224.23 	except that fees may be submitted quarterly if less than $250 a month is due, or annually if 
224.24 	less than $25 a month is due. Receipts must be deposited in the state treasury and credited 
224.25 	to a 911 emergency telecommunications service account in the special revenue fund. The 
224.26 	money in the account may only be used for 911 telecommunications services.
224.27 	(e) This subdivision does not apply to customers of interexchange carriers.
224.28 	(f) The installation and recurring charges for integrating wireless 911 calls into 
224.29 	enhanced 911 systems are eligible for payment by the commissioner if the 911 service 
224.30 	provider is included in the statewide design plan and the charges are made pursuant to 
224.31 	contract.
224.32 	(g) Competitive local exchanges carriers holding certificates of authority from the 
224.33 	Public Utilities Commission are eligible to receive payment for recurring 911 services.

224.34 	EFFECTIVE DATE. This section is effective January 1, 2014.

225.1 	Sec. 13. Minnesota Statutes 2012, section 403.11, is amended by adding a subdivision 
225.2 	to read:
225.3 		Subd. 6.Report. (a) Beginning September 1, 2013, and continuing semiannually 
225.4 	thereafter, each wireless telecommunications service provider shall report to the 
225.5 	commissioner, based on the mobile telephone number, both the total number of prepaid 
225.6 	wireless telecommunications subscribers sourced to Minnesota and the total number of 
225.7 	wireless telecommunications subscribers sourced to Minnesota. The report must be filed 
225.8 	on the same schedule as Federal Communications Commission Form 477.
225.9 	(b) The commissioner shall make a standard form available to all wireless 
225.10 	telecommunications service providers for submitting information required to compile 
225.11 	the report required under this subdivision.
225.12 	(c) The information provided to the commissioner under this subdivision is 
225.13 	considered trade secret information under section 13.37 and may only be used for purposes 
225.14 	of administering this chapter.

225.15 	EFFECTIVE DATE. This section is effective January 1, 2014.

225.16 	Sec. 14. [403.16] DEFINITIONS.
225.17 		Subdivision 1.Scope. For the purposes of sections 403.16 to 403.164, the terms 
225.18 	defined in this section have the meanings given them.
225.19 		Subd. 2.Consumer. "Consumer" means a person who purchases prepaid wireless 
225.20 	telecommunications service in a retail transaction.
225.21 		Subd. 3.Department. "Department" means the Department of Revenue.
225.22 		Subd. 4.Prepaid wireless E911 fee. "Prepaid wireless E911 fee" means the fee that 
225.23 	is required to be collected by a seller from a consumer as established in section 403.161, 
225.24 	subdivision 1, paragraph (a).
225.25 		Subd. 5.Prepaid wireless telecommunications access Minnesota fee. "Prepaid 
225.26 	wireless telecommunications access Minnesota fee" means the fee that is required to be 
225.27 	collected by a seller from a consumer as established in section 403.161, subdivision 1, 
225.28 	paragraph (b).
225.29 		Subd. 6.Provider. "Provider" means a person that provides prepaid wireless 
225.30 	telecommunications service under a license issued by the Federal Communications 
225.31 	Commission.
225.32 		Subd. 7.Retail transaction. "Retail transaction" means the purchase of prepaid 
225.33 	wireless telecommunications service from a seller for any purpose other than resale.
225.34 		Subd. 8.Seller. "Seller" means a person who sells prepaid wireless 
225.35 	telecommunications service to another person.

226.1 	EFFECTIVE DATE. This section is effective January 1, 2014.

226.2 	Sec. 15. [403.161] PREPAID WIRELESS FEES IMPOSED; COLLECTION; 
226.3 	REMITTANCE.
226.4 		Subdivision 1.Fees imposed. (a) A prepaid wireless E911 fee of 80 cents per retail 
226.5 	transaction is imposed on prepaid wireless telecommunications service until the fee is 
226.6 	adjusted as an amount per retail transaction under subdivision 7.
226.7 	(b) A prepaid wireless telecommunications access Minnesota fee, in the amount of 
226.8 	the monthly charge provided for in section 237.52, subdivision 2, is imposed on each 
226.9 	retail transaction for prepaid wireless telecommunications service until the fee is adjusted 
226.10 	as an amount per retail transaction under subdivision 7.
226.11 		Subd. 2.Exemption. The fees established under subdivision 1 are not imposed on a 
226.12 	minimal amount of prepaid wireless telecommunications service that is sold with a prepaid 
226.13 	wireless device and is charged a single nonitemized price, and a seller may not apply the 
226.14 	fees to such a transaction. For purposes of this subdivision, a minimal amount of service 
226.15 	means an amount of service denominated as either ten minutes or less or $5 or less.
226.16 		Subd. 3.Fee collected. The prepaid wireless E911 and telecommunications 
226.17 	access Minnesota fees must be collected by the seller from the consumer for each retail 
226.18 	transaction occurring in this state. The amount of each fee must be combined into one 
226.19 	amount, which must be separately stated on an invoice, receipt, or other similar document 
226.20 	that is provided to the consumer by the seller, or otherwise disclosed to the consumer.
226.21 		Subd. 4.Sales and use tax treatment. For purposes of this section, a retail 
226.22 	transaction conducted in person by a consumer at a business location of the seller must 
226.23 	be treated as occurring in this state if that business location is in this state, and any other 
226.24 	retail transaction must be treated as occurring in this state if the retail transaction is treated 
226.25 	as occurring in this state for purposes of the sales and use tax as specified in section 
226.26 	297A.669, subdivision 3, paragraph (c).
226.27 		Subd. 5.Remittance. The prepaid wireless E911 and telecommunications access 
226.28 	Minnesota fees are the liability of the consumer and not of the seller or of any provider, 
226.29 	except that the seller is liable to remit all fees that the seller collects from consumers as 
226.30 	provided in section 403.162, including all fees that the seller is deemed to collect in which 
226.31 	the amount of the fee has not been separately stated on an invoice, receipt, or other similar 
226.32 	document provided to the consumer by the seller.
226.33 		Subd. 6.Exclusion for calculating other charges. The combined amount of the 
226.34 	prepaid wireless E911 and telecommunications access Minnesota fees collected by a seller 
226.35 	from a consumer must not be included in the base for measuring any tax, fee, surcharge, 
227.1 	or other charge that is imposed by this state, any political subdivision of this state, or 
227.2 	any intergovernmental agency.
227.3 		Subd. 7.Fee changes. (a) The prepaid wireless E911 and telecommunications 
227.4 	access Minnesota fee must be proportionately increased or reduced upon any change to 
227.5 	the fee imposed under section 403.11, subdivision 1, paragraph (c), after July 1, 2013, or 
227.6 	the fee imposed under section 237.52, subdivision 2, as applicable.
227.7 	(b) The department shall post notice of any fee changes on its Web site at least 30 
227.8 	days in advance of the effective date of the fee changes. It is the responsibility of sellers to 
227.9 	monitor the department's Web site for notice of fee changes.
227.10 	(c) Fee changes are effective 60 days after the first day of the first calendar month 
227.11 	after the commissioner of public safety or the Public Utilities Commission, as applicable, 
227.12 	changes the fee.

227.13 	EFFECTIVE DATE. This section is effective January 1, 2014.

227.14 	Sec. 16. [403.162] ADMINISTRATION OF PREPAID WIRELESS E911 FEES.
227.15 		Subdivision 1.Remittance. Prepaid wireless E911 and telecommunications access 
227.16 	Minnesota fees collected by sellers must be remitted to the commissioner of revenue 
227.17 	at the times and in the manner provided by chapter 297A with respect to the general 
227.18 	sales and use tax. The commissioner of revenue shall establish registration and payment 
227.19 	procedures that substantially coincide with the registration and payment procedures that 
227.20 	apply in chapter 297A.
227.21 		Subd. 2.Seller's fee retention. A seller may deduct and retain three percent of 
227.22 	prepaid wireless E911 and telecommunications access Minnesota fees collected by the 
227.23 	seller from consumers.
227.24 		Subd. 3.Department of Revenue provisions. The audit, assessment, appeal, 
227.25 	collection, refund, penalty, interest, enforcement, and administrative provisions of 
227.26 	chapters 270C and 289A that are applicable to the taxes imposed by chapter 297A apply 
227.27 	to any fee imposed under section 403.161.
227.28 		Subd. 4.Procedures for resale transactions. The commissioner of revenue shall 
227.29 	establish procedures by which a seller of prepaid wireless telecommunications service 
227.30 	may document that a sale is not a retail transaction. These procedures must substantially 
227.31 	coincide with the procedures for documenting sale for resale transactions as provided in 
227.32 	chapter 297A.
227.33 		Subd. 5.Fees deposited. (a) The commissioner of revenue shall, based on 
227.34 	the relative proportion of the prepaid wireless E911 fee and the prepaid wireless 
227.35 	telecommunications access Minnesota fee imposed per retail transaction, divide the fees 
228.1 	collected in corresponding proportions. Within 30 days of receipt of the collected fees, 
228.2 	the commissioner shall:
228.3 	(1) deposit the proportion of the collected fees attributable to the prepaid wireless 
228.4 	E911 fee in the 911 emergency telecommunications service account in the special revenue 
228.5 	fund; and
228.6 	(2) deposit the proportion of collected fees attributable to the prepaid wireless 
228.7 	telecommunications access Minnesota fee in the telecommunications access fund 
228.8 	established in section 237.52, subdivision 1.
228.9 	(b) The department may deduct and retain an amount, not to exceed two percent of 
228.10 	collected fees, to reimburse its direct costs of administering the collection and remittance 
228.11 	of prepaid wireless E911 fees and prepaid wireless telecommunications access Minnesota 
228.12 	fees.

228.13 	EFFECTIVE DATE. This section is effective January 1, 2014.

228.14 	Sec. 17. [403.163] LIABILITY PROTECTION FOR SELLERS AND 
228.15 	PROVIDERS.
228.16 	(a) A provider or seller of prepaid wireless telecommunications service is not liable 
228.17 	for damages to any person resulting from or incurred in connection with providing any 
228.18 	lawful assistance in good faith to any investigative or law enforcement officer of the 
228.19 	United States, this or any other state, or any political subdivision of this or any other state.
228.20 	(b) In addition to the protection from liability provided by paragraph (a), section 
228.21 	403.08, subdivision 11, applies to sellers and providers.

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

228.23 	Sec. 18. [403.164] EXCLUSIVITY OF PREPAID WIRELESS E911 FEE.
228.24 	The prepaid wireless E911 fee imposed by section 403.161 is the only E911 funding 
228.25 	obligation imposed with respect to prepaid wireless telecommunications service in this 
228.26 	state, and no tax, fee, surcharge, or other charge may be imposed by this state, any political 
228.27 	subdivision of this state, or any intergovernmental agency, for E911 funding purposes, 
228.28 	upon any provider, seller, or consumer with respect to the sale, purchase, use, or provision 
228.29 	of prepaid wireless telecommunications service.

228.30 	EFFECTIVE DATE. This section is effective January 1, 2014.

229.1 	Sec. 19. Laws 2010, First Special Session chapter 1, article 13, section 4, subdivision 
229.2 	1, as amended by Laws 2011, First Special Session chapter 7, article 6, section 22, is 
229.3 	amended to read:
229.4 		Subdivision 1.Political contribution credit. Notwithstanding the provisions of 
229.5 	Minnesota Statutes, section 290.06, subdivision 23, or any other law to the contrary, the 
229.6 	political contribution refund does not apply to contributions made after June 30, 2009, and 
229.7 	before July 1, 2013 2017.

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

229.9 	Sec. 20. REPORT; RECOMMENDATIONS.
 229.10 	(a) By March 1, 2014, the commissioner of public safety shall submit a report to 
229.11 	the chairs and ranking minority members of the legislative committees with primary 
229.12 	jurisdiction over public safety and telecommunications that assesses the amount of 
229.13 	revenue collected from the fees imposed under Minnesota Statutes, section 403.161, 
229.14 	and recommends any adjustment of those fees that the commissioner of public safety 
229.15 	determines is necessary in order to:
229.16 	(1) fund legislative appropriations from the 911 emergency telecommunications 
229.17 	service account and to maintain a reasonable fund reserve; and
229.18 	(2) maintain fairness with respect to the amount of fees paid by customers of 
229.19 	prepaid wireless telecommunications service as compared with customers of other 
229.20 	telecommunications services.
229.21 	(b) A wireless telecommunications service provider shall provide any information 
229.22 	requested by the commissioner of public safety for the purposes of the report.

229.23 	EFFECTIVE DATE. This section is effective January 1, 2014.

229.24 	Sec. 21. PURPOSE STATEMENTS; TAX EXPENDITURES.
 229.25 		Subdivision 1.Authority. This section is intended to fulfill the requirement under 
229.26 	Minnesota Statutes, section 3.192, that a bill creating, renewing, or continuing a tax 
229.27 	expenditure provide a purpose for the tax expenditure and a standard or goal against 
229.28 	which its effectiveness may be measured.
229.29 		Subd. 2.Federal conformity. The provisions of article 6 conforming Minnesota 
229.30 	individual income tax to changes in federal law are intended to simplify compliance with 
229.31 	and administration of the individual income tax.
229.32 		Subd. 3.Employment of qualified veterans tax credit. The provisions of article 6, 
229.33 	section 30, providing a tax credit for the employment of qualified veterans, are intended to 
230.1 	give an incentive to employers to hire unemployed and disabled veterans. The standard 
230.2 	against which the effectiveness of the credit is to be measured is the additional number of 
230.3 	veterans who are hired as a result of the tax credit.
230.4 		Subd. 4.Railroad track maintenance subtraction. The provisions of article 6, 
230.5 	sections 10 and 12, allowing an individual income and corporate franchise tax subtraction 
230.6 	for the amount allowed under the federal credit for railroad maintenance expenses, are 
230.7 	intended to increase the combined federal and state tax incentives available to Class II 
230.8 	and Class III railroads for maintaining and upgrading track in Minnesota. The standard 
230.9 	against which effectiveness is to be measured is the additional miles of track maintained 
230.10 	or upgraded following allowance of the state tax subtraction in addition to the existing 
230.11 	federal tax credit.
230.12 		Subd. 5.Sales tax exemption of coin-operated amusement devices. The 
230.13 	provisions of article 8, section 2, exempting certain sales of coin-operated entertainment 
230.14 	and amusement devices is intended to reduce tax pyramiding by eliminating the tax on an 
230.15 	input used in providing a taxable service.
230.16 		Subd. 6.Motor vehicle rental tax exemption for car sharing. The provisions of 
230.17 	article 8, section 4, exempting nonprofit car sharing companies from the extra tax on short 
230.18 	term car rentals is intended to provide a similar tax treatment between motor vehicle 
230.19 	ownership and motor vehicle sharing.
230.20 		Subd. 7.Expansion of the sales tax exemption on durable medical products and 
230.21 	prosthetics. The provisions of article 8, section 8, expanding the definition of items 
230.22 	included in repair and replacement parts of durable medical equipment and prosthetics 
230.23 	and exempting Medicare and medicaid purchases is intended to simplify sales tax 
230.24 	administration in this area and provide relief for sellers who cannot collect the tax under 
230.25 	these programs.
230.26 		Subd. 8.Exemption for public safety radio communication systems. The 
230.27 	provisions of article 8, section 10, expanding the existing sales tax exemption for certain 
230.28 	types of public safety radio systems in certain counties to all types of systems in all 
230.29 	counties is intended to provide equal tax treatment to all local governments in the state 
230.30 	on these purchases.
230.31 		Subd. 9.Sales tax exemption for established religious orders. The provisions of 
230.32 	article 8, section 11, exempting certain sales between a religious order and an affiliated 
230.33 	institute of higher education, is intended to retain an existing sales tax exemption that 
230.34 	exists between St. John's Abbey and St. John's University after a governing restructure 
230.35 	between the two entities.
231.1 		Subd. 10.Sales tax exemption for nursing homes and boarding care homes.
 231.2 	The provisions of article 8, section 12, exempting certain nursing homes and boarding 
231.3 	care homes is intended to clarify that an existing exemption for these facilities is not 
231.4 	affected by a recent property tax case related to defining nonprofit organizations engaged 
231.5 	in charitable activities.
231.6 		Subd. 11.Construction sales tax exemptions. The provisions of article 8, sections 
231.7 	13, 14, and 15, exempting from sales tax construction materials for various entities, are 
231.8 	intended to increase jobs and reduce tax pyramiding by reducing the tax on inputs used to 
231.9 	provide taxable goods and services.
231.10 		Subd. 12.Sales tax exemption on certain public infrastructure. The provisions 
231.11 	of article 10, section 1, exempting construction materials used in public infrastructure 
231.12 	projects related to the destination medical center plan is intended to reduce city costs 
231.13 	for those projects.

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

231.15 	ARTICLE 14
231.16 	MARKET VALUE DEFINITIONS

231.17 	Section 1. Minnesota Statutes 2012, section 38.18, is amended to read:
231.18 	38.18 COUNTY FAIRGROUNDS; IMPROVEMENT AIDED.
231.19 	Any Each town, statutory city, or school district in this state, now or hereafter at any 
231.20 	time having a an estimated market value of all its taxable property, exclusive of money and 
231.21 	credits, of more than $105,000,000, and having a county fair located within its corporate 
231.22 	limits, is hereby authorized to aid in defraying may pay part of the expense of improving 
231.23 	any such the fairground, by appropriating and paying over to the treasurer of the county 
231.24 	owning the fairground such sum of money, not exceeding $10,000, for each of the political 
231.25 	subdivisions, as the its governing body of the town, statutory city, or school district may, 
231.26 	by resolution, determine determines to be for the best interest of the political subdivision,.
231.27 	 The sums so appropriated to amounts paid to the county must be used solely for the purpose 
231.28 	of aiding in the improvement of to improve the fairground in such the manner as the county 
231.29 	board of the county shall determine determines to be for the best interest of the county.

231.30 	Sec. 2. Minnesota Statutes 2012, section 40A.15, subdivision 2, is amended to read:
231.31 		Subd. 2.Eligible recipients. All counties within the state, municipalities that prepare 
231.32 	plans and official controls instead of a county, and districts are eligible for assistance 
231.33 	under the program. Counties and districts may apply for assistance on behalf of other 
232.1 	municipalities. In order to be eligible for financial assistance a county or municipality must 
232.2 	agree to levy at least 0.01209 percent of taxable estimated market value for agricultural 
232.3 	land preservation and conservation activities or otherwise spend the equivalent amount of 
232.4 	local money on those activities, or spend $15,000 of local money, whichever is less.

232.5 	Sec. 3. Minnesota Statutes 2012, section 69.011, subdivision 1, is amended to read:
232.6 		Subdivision 1.Definitions. Unless the language or context clearly indicates that 
232.7 	a different meaning is intended, the following words and terms, for the purposes of this 
232.8 	chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them:
232.9 	(a) "Commissioner" means the commissioner of revenue.
232.10 	(b) "Municipality" means:
232.11 	(1) a home rule charter or statutory city;
232.12 	(2) an organized town;
232.13 	(3) a park district subject to chapter 398;
232.14 	(4) the University of Minnesota;
232.15 	(5) for purposes of the fire state aid program only, an American Indian tribal 
232.16 	government entity located within a federally recognized American Indian reservation;
232.17 	(6) for purposes of the police state aid program only, an American Indian tribal 
232.18 	government with a tribal police department which exercises state arrest powers under 
232.19 	section 626.90, 626.91, 626.92, or 626.93;
232.20 	(7) for purposes of the police state aid program only, the Metropolitan Airports 
232.21 	Commission; and
232.22 	(8) for purposes of the police state aid program only, the Department of Natural 
232.23 	Resources and the Department of Public Safety with respect to peace officers covered 
232.24 	under chapter 352B.
232.25 	(c) "Minnesota Firetown Premium Report" means a form prescribed by the 
232.26 	commissioner containing space for reporting by insurers of fire, lightning, sprinkler 
232.27 	leakage and extended coverage premiums received upon risks located or to be performed 
232.28 	in this state less return premiums and dividends.
232.29 	(d) "Firetown" means the area serviced by any municipality having a qualified fire 
232.30 	department or a qualified incorporated fire department having a subsidiary volunteer 
232.31 	firefighters' relief association.
232.32 	(e) "Estimated market value" means latest available estimated market value of all 
232.33 	property in a taxing jurisdiction, whether the property is subject to taxation, or exempt 
232.34 	from ad valorem taxation obtained from information which appears on abstracts filed with 
232.35 	the commissioner of revenue or equalized by the State Board of Equalization.
233.1 	(f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 
233.2 	commissioner for reporting by each fire and casualty insurer of all premiums received 
233.3 	upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 
233.4 	during the preceding calendar year, with reference to insurance written for insuring against 
233.5 	the perils contained in auto insurance coverages as reported in the Minnesota business 
233.6 	schedule of the annual financial statement which each insurer is required to file with 
233.7 	the commissioner in accordance with the governing laws or rules less return premiums 
233.8 	and dividends.
233.9 	(g) "Peace officer" means any person:
233.10 	(1) whose primary source of income derived from wages is from direct employment 
233.11 	by a municipality or county as a law enforcement officer on a full-time basis of not less 
233.12 	than 30 hours per week;
233.13 	(2) who has been employed for a minimum of six months prior to December 31 
233.14 	preceding the date of the current year's certification under subdivision 2, clause (b);
233.15 	(3) who is sworn to enforce the general criminal laws of the state and local ordinances;
233.16 	(4) who is licensed by the Peace Officers Standards and Training Board and is 
233.17 	authorized to arrest with a warrant; and
233.18 	(5) who is a member of the State Patrol retirement plan or the public employees 
233.19 	police and fire fund.
233.20 	(h) "Full-time equivalent number of peace officers providing contract service" means 
233.21 	the integral or fractional number of peace officers which would be necessary to provide 
233.22 	the contract service if all peace officers providing service were employed on a full-time 
233.23 	basis as defined by the employing unit and the municipality receiving the contract service.
233.24 	(i) "Retirement benefits other than a service pension" means any disbursement 
233.25 	authorized under section 424A.05, subdivision 3, clauses (3) and (4).
233.26 	(j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means:
233.27 	(1) for the police state aid program and police relief association financial reports:
233.28 	(i) the person who was elected or appointed to the specified position or, in the 
233.29 	absence of the person, another person who is designated by the applicable governing body;
233.30 	(ii) in a park district, the secretary of the board of park district commissioners;
233.31 	(iii) in the case of the University of Minnesota, the official designated by the Board 
233.32 	of Regents;
233.33 	(iv) for the Metropolitan Airports Commission, the person designated by the 
233.34 	commission;
233.35 	(v) for the Department of Natural Resources or the Department of Public Safety, the 
233.36 	respective commissioner;
234.1 	(vi) for a tribal police department which exercises state arrest powers under section 
234.2 	626.90, 626.91, 626.92, or 626.93, the person designated by the applicable American 
234.3 	Indian tribal government; and
234.4 	(2) for the fire state aid program and fire relief association financial reports, the 
234.5 	person who was elected or appointed to the specified position, or, for governmental 
234.6 	entities other than counties, if the governing body of the governmental entity designates 
234.7 	the position to perform the function, the chief financial official of the governmental entity 
234.8 	or the chief administrative official of the governmental entity.
234.9 	(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 
234.10 	retirement plan established by chapter 353G.

234.11 	Sec. 4. Minnesota Statutes 2012, section 69.021, subdivision 7, is amended to read:
234.12 		Subd. 7.Apportionment of fire state aid to municipalities and relief associations.
 234.13 	(a) The commissioner shall apportion the fire state aid relative to the premiums reported 
234.14 	on the Minnesota Firetown Premium Reports filed under this chapter to each municipality 
234.15 	and/or firefighters relief association.
234.16 	(b) The commissioner shall calculate an initial fire state aid allocation amount for 
234.17 	each municipality or fire department under paragraph (c) and a minimum fire state aid 
234.18 	allocation amount for each municipality or fire department under paragraph (d). The 
234.19 	municipality or fire department must receive the larger fire state aid amount.
234.20 	(c) The initial fire state aid allocation amount is the amount available for 
234.21 	apportionment as fire state aid under subdivision 5, without inclusion of any additional 
234.22 	funding amount to support a minimum fire state aid amount under section 423A.02, 
234.23 	subdivision 3, allocated one-half in proportion to the population as shown in the last official 
234.24 	statewide federal census for each fire town and one-half in proportion to the estimated 
234.25 	market value of each fire town, including (1) the estimated market value of tax-exempt 
234.26 	property and (2) the estimated market value of natural resources lands receiving in lieu 
234.27 	payments under sections 477A.11 to 477A.14, but excluding the estimated market value 
234.28 	of minerals. In the case of incorporated or municipal fire departments furnishing fire 
234.29 	protection to other cities, towns, or townships as evidenced by valid fire service contracts 
234.30 	filed with the commissioner, the distribution must be adjusted proportionately to take 
234.31 	into consideration the crossover fire protection service. Necessary adjustments must be 
234.32 	made to subsequent apportionments. In the case of municipalities or independent fire 
234.33 	departments qualifying for the aid, the commissioner shall calculate the state aid for the 
234.34 	municipality or relief association on the basis of the population and the estimated market 
234.35 	value of the area furnished fire protection service by the fire department as evidenced by 
235.1 	duly executed and valid fire service agreements filed with the commissioner. If one or 
235.2 	more fire departments are furnishing contracted fire service to a city, town, or township, 
235.3 	only the population and estimated market value of the area served by each fire department 
235.4 	may be considered in calculating the state aid and the fire departments furnishing service 
235.5 	shall enter into an agreement apportioning among themselves the percent of the population 
235.6 	and the estimated market value of each service area. The agreement must be in writing 
235.7 	and must be filed with the commissioner.
235.8 	(d) The minimum fire state aid allocation amount is the amount in addition to the 
235.9 	initial fire state allocation amount that is derived from any additional funding amount 
235.10 	to support a minimum fire state aid amount under section 423A.02, subdivision 3, and 
235.11 	allocated to municipalities with volunteer firefighters relief associations or covered by the 
235.12 	voluntary statewide lump-sum volunteer firefighter retirement plan based on the number 
235.13 	of active volunteer firefighters who are members of the relief association as reported 
235.14 	in the annual financial reporting for the calendar year 1993 to the Office of the State 
235.15 	Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or 
235.16 	fire departments with volunteer firefighters relief associations receive in total at least a 
235.17 	minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of 
235.18 	30 firefighters. If a relief association is established after calendar year 1993 and before 
235.19 	calendar year 2000, the number of active volunteer firefighters who are members of the 
235.20 	relief association as reported in the annual financial reporting for calendar year 1998 
235.21 	to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters, 
235.22 	shall be used in this determination. If a relief association is established after calendar 
235.23 	year 1999, the number of active volunteer firefighters who are members of the relief 
235.24 	association as reported in the first annual financial reporting submitted to the Office of 
235.25 	the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this 
235.26 	determination. If a relief association is terminated as a result of providing retirement 
235.27 	coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer 
235.28 	firefighter retirement plan under chapter 353G, the number of active volunteer firefighters 
235.29 	of the municipality covered by the statewide plan as certified by the executive director of 
235.30 	the Public Employees Retirement Association to the commissioner and the state auditor, 
235.31 	but not to exceed 30 active firefighters, must be used in this determination.
235.32 	(e) Unless the firefighters of the applicable fire department are members of the 
235.33 	voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must 
235.34 	be paid to the treasurer of the municipality where the fire department is located and the 
235.35 	treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit 
235.36 	the aid to the relief association if the relief association has filed a financial report with the 
236.1 	treasurer of the municipality and has met all other statutory provisions pertaining to the 
236.2 	aid apportionment. If the firefighters of the applicable fire department are members of 
236.3 	the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid 
236.4 	must be paid to the executive director of the Public Employees Retirement Association 
236.5 	and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund.
236.6 	(f) The commissioner may make rules to permit the administration of the provisions 
236.7 	of this section.
236.8 	(g) Any adjustments needed to correct prior misallocations must be made to 
236.9 	subsequent apportionments.

236.10 	Sec. 5. Minnesota Statutes 2012, section 69.021, subdivision 8, is amended to read:
236.11 		Subd. 8.Population and estimated market value. (a) In computations relating to 
236.12 	fire state aid requiring the use of population figures, only official statewide federal census 
236.13 	figures are to be used. Increases or decreases in population disclosed by reason of any 
236.14 	special census must not be taken into consideration.
236.15 	(b) In calculations relating to fire state aid requiring the use of estimated market 
236.16 	value property figures, only the latest available estimated market value property figures 
236.17 	may be used.

236.18 	Sec. 6. Minnesota Statutes 2012, section 88.51, subdivision 3, is amended to read:
236.19 		Subd. 3.Determination of estimated market value. In determining the net tax 
236.20 	capacity of property within any taxing district the value of the surface of lands within any 
236.21 	auxiliary forest therein, as determined by the county board under the provisions of section 
236.22 	88.48, subdivision 3, shall, for all purposes except the levying of taxes on lands within any 
236.23 	such forest, be deemed the estimated market value thereof.

236.24 	Sec. 7. Minnesota Statutes 2012, section 103B.245, subdivision 3, is amended to read:
236.25 		Subd. 3.Tax. After adoption of the ordinance under subdivision 2, a local 
236.26 	government unit may annually levy a tax on all taxable property in the district for the 
236.27 	purposes for which the tax district is established. The tax may not exceed 0.02418 percent 
236.28 	of estimated market value on taxable property located in rural towns other than urban 
236.29 	towns, unless allowed by resolution of the town electors. The proceeds of the tax shall 
236.30 	be paid into a fund reserved for these purposes. Any proceeds remaining in the reserve 
236.31 	fund at the time the tax is terminated or the district is dissolved shall be transferred and 
236.32 	irrevocably pledged to the debt service fund of the local unit to be used solely to reduce 
236.33 	tax levies for bonded indebtedness of taxable property in the district.

237.1 	Sec. 8. Minnesota Statutes 2012, section 103B.251, subdivision 8, is amended to read:
237.2 		Subd. 8.Tax. (a) For the payment of principal and interest on the bonds issued 
237.3 	under subdivision 7 and the payment required under subdivision 6, the county shall 
237.4 	irrevocably pledge and appropriate the proceeds of a tax levied on all taxable property 
237.5 	located within the territory of the watershed management organization or subwatershed 
237.6 	unit for which the bonds are issued. Each year until the reserve for payment of the bonds 
237.7 	is sufficient to retire the bonds, the county shall levy on all taxable property in the territory 
237.8 	of the organization or unit, without respect to any statutory or other limitation on taxes, an 
237.9 	amount of taxes sufficient to pay principal and interest on the bonds and to restore any 
237.10 	deficiencies in reserves required to be maintained for payment of the bonds.
237.11 	(b) The tax levied on rural towns other than urban towns may not exceed 0.02418 
237.12 	percent of taxableestimated market value, unless approved by resolution of the town 
237.13 	electors.
237.14 	(c) If at any time the amounts available from the levy on property in the territory of 
237.15 	the organization are insufficient to pay principal and interest on the bonds when due, the 
237.16 	county shall make payment from any available funds in the county treasury.
237.17 	(d) The amount of any taxes which are required to be levied outside of the territory 
237.18 	of the watershed management organization or unit or taken from the general funds of the 
237.19 	county to pay principal or interest on the bonds shall be reimbursed to the county from 
237.20 	taxes levied within the territory of the watershed management organization or unit.

237.21 	Sec. 9. Minnesota Statutes 2012, section 103B.635, subdivision 2, is amended to read:
237.22 		Subd. 2.Municipal funding of district. (a) The governing body or board of 
237.23 	supervisors of each municipality in the district must provide the funds necessary to meet 
237.24 	its proportion of the total cost determined by the board, provided the total funding from 
237.25 	all municipalities in the district for the costs shall not exceed an amount equal to .00242 
237.26 	percent of the total taxable estimated market value within the district, unless three-fourths 
237.27 	of the municipalities in the district pass a resolution concurring to the additional costs.
237.28 	(b) The funds must be deposited in the treasury of the district in amounts and at 
237.29 	times as the treasurer of the district requires.

237.30 	Sec. 10. Minnesota Statutes 2012, section 103B.691, subdivision 2, is amended to read:
237.31 		Subd. 2.Municipal funding of district. (a) The governing body or board of 
237.32 	supervisors of each municipality in the district shall provide the funds necessary to meet its 
237.33 	proportion of the total cost to be borne by the municipalities as finally certified by the board.
238.1 	(b) The municipality's funds may be raised by any means within the authority of 
238.2 	the municipality. The municipalities may each levy a tax not to exceed .02418 percent of 
238.3 	taxable estimated market value on the taxable property located in the district to provide 
238.4 	the funds. The levy shall be within all other limitations provided by law.
238.5 	(c) The funds must be deposited into the treasury of the district in amounts and at 
238.6 	times as the treasurer of the district requires.

238.7 	Sec. 11. Minnesota Statutes 2012, section 103D.905, subdivision 2, is amended to read:
238.8 		Subd. 2.Organizational expense fund. (a) An organizational expense fund, 
238.9 	consisting of an ad valorem tax levy, shall not exceed 0.01596 percent of taxable estimated
238.10 	 market value, or $60,000, whichever is less. The money in the fund shall be used for 
238.11 	organizational expenses and preparation of the watershed management plan for projects.
238.12 	(b) The managers may borrow from the affected counties up to 75 percent of the 
238.13 	anticipated funds to be collected from the organizational expense fund levy and the 
238.14 	counties affected may make the advancements.
238.15 	(c) The advancement of anticipated funds shall be apportioned among affected 
238.16 	counties in the same ratio as the net tax capacity of the area of the counties within 
238.17 	the watershed district bears to the net tax capacity of the entire watershed district. If a 
238.18 	watershed district is enlarged, an organizational expense fund may be levied against the 
238.19 	area added to the watershed district in the same manner as provided in this subdivision.
238.20 	(d) Unexpended funds collected for the organizational expense may be transferred to 
238.21 	the administrative fund and used for the purposes of the administrative fund.

238.22 	Sec. 12. Minnesota Statutes 2012, section 103D.905, subdivision 3, is amended to read:
238.23 		Subd. 3.General fund. A general fund, consisting of an ad valorem tax levy, may 
238.24 	not exceed 0.048 percent of taxable estimated market value, or $250,000, whichever is 
238.25 	less. The money in the fund shall be used for general administrative expenses and for 
238.26 	the construction or implementation and maintenance of projects of common benefit to 
238.27 	the watershed district. The managers may make an annual levy for the general fund as 
238.28 	provided in section 103D.911. In addition to the annual general levy, the managers may 
238.29 	annually levy a tax not to exceed 0.00798 percent of taxable estimated market value 
238.30 	for a period not to exceed 15 consecutive years to pay the cost attributable to the basic 
238.31 	water management features of projects initiated by petition of a political subdivision 
238.32 	within the watershed district or by petition of at least 50 resident owners whose property 
238.33 	is within the watershed district.

239.1 	Sec. 13. Minnesota Statutes 2012, section 103D.905, subdivision 8, is amended to read:
239.2 		Subd. 8.Survey and data acquisition fund. (a) A survey and data acquisition fund 
239.3 	is established and used only if other funds are not available to the watershed district to pay 
239.4 	for making necessary surveys and acquiring data.
239.5 	(b) The survey and data acquisition fund consists of the proceeds of a property tax 
239.6 	that can be levied only once every five years. The levy may not exceed 0.02418 percent of 
239.7 	taxable estimated market value.
239.8 	(c) The balance of the survey and data acquisition fund may not exceed $50,000.
239.9 	(d) In a subsequent proceeding for a project where a survey has been made, the 
239.10 	attributable cost of the survey as determined by the managers shall be included as a part of 
239.11 	the cost of the work and the sum shall be repaid to the survey and data acquisition fund.

239.12 	Sec. 14. Minnesota Statutes 2012, section 117.025, subdivision 7, is amended to read:
239.13 		Subd. 7.Structurally substandard. "Structurally substandard" means a building:
239.14 	(1) that was inspected by the appropriate local government and cited for one or more 
239.15 	enforceable housing, maintenance, or building code violations;
239.16 	(2) in which the cited building code violations involve one or more of the following:
239.17 	(i) a roof and roof framing element;
239.18 	(ii) support walls, beams, and headers;
239.19 	(iii) foundation, footings, and subgrade conditions;
239.20 	(iv) light and ventilation;
239.21 	(v) fire protection, including egress;
239.22 	(vi) internal utilities, including electricity, gas, and water;
239.23 	(vii) flooring and flooring elements; or
239.24 	(viii) walls, insulation, and exterior envelope;
239.25 	(3) in which the cited housing, maintenance, or building code violations have not 
239.26 	been remedied after two notices to cure the noncompliance; and
239.27 	(4) has uncured housing, maintenance, and building code violations, satisfaction of 
239.28 	which would cost more than 50 percent of the assessor's taxable estimated market value 
239.29 	for the building, excluding land value, as determined under section 273.11 for property 
239.30 	taxes payable in the year in which the condemnation is commenced.
239.31 	A local government is authorized to seek from a judge or magistrate an administrative 
239.32 	warrant to gain access to inspect a specific building in a proposed development or 
239.33 	redevelopment area upon showing of probable cause that a specific code violation has 
239.34 	occurred and that the violation has not been cured, and that the owner has denied the local 
239.35 	government access to the property. Items of evidence that may support a conclusion of 
240.1 	probable cause may include recent fire or police inspections, housing inspection, exterior 
240.2 	evidence of deterioration, or other similar reliable evidence of deterioration in the specific 
240.3 	building.

240.4 	Sec. 15. Minnesota Statutes 2012, section 127A.48, subdivision 1, is amended to read:
240.5 		Subdivision 1.Computation. The Department of Revenue must annually conduct 
240.6 	an assessment/sales ratio study of the taxable property in each county, city, town, and 
240.7 	school district in accordance with the procedures in subdivisions 2 and 3. Based upon the 
240.8 	results of this assessment/sales ratio study, the Department of Revenue must determine an 
240.9 	aggregate equalized net tax capacity for the various classes of taxable property in each 
240.10 	taxing district, the aggregate of which tax capacity shall be is designated as the adjusted net 
240.11 	tax capacity. The adjusted net tax capacity must be reduced by the captured tax capacity of 
240.12 	tax increment districts under section 469.177, subdivision 2, fiscal disparities contribution 
240.13 	tax capacities under sections 276A.06 and 473F.08, and the tax capacity of transmission 
240.14 	lines required to be subtracted from the local tax base under section 273.425; and increased 
240.15 	by fiscal disparities distribution tax capacities under sections 276A.06 and 473F.08. The 
240.16 	adjusted net tax capacities shall be determined using the net tax capacity percentages in 
240.17 	effect for the assessment year following the assessment year of the study. The Department 
240.18 	of Revenue must make whatever estimates are necessary to account for changes in the 
240.19 	classification system. The Department of Revenue may incur the expense necessary to 
240.20 	make the determinations. The commissioner of revenue may reimburse any county or 
240.21 	governmental official for requested services performed in ascertaining the adjusted net tax 
240.22 	capacity. On or before March 15 annually, the Department of Revenue shall file with the 
240.23 	chair of the Tax Committee of the house of representatives and the chair of the Committee 
240.24 	on Taxes and Tax laws of the senate a report of adjusted net tax capacities for school 
240.25 	districts. On or before June 15 annually, the Department of Revenue shall file its final report 
240.26 	on the adjusted net tax capacities for school districts established by the previous year's 
240.27 	assessments and the current year's net tax capacity percentages with the commissioner of 
240.28 	education and each county auditor for those school districts for which the auditor has the 
240.29 	responsibility for determination of local tax rates. A copy of the report so filed shall be 
240.30 	mailed to the clerk of each school district involved and to the county assessor or supervisor 
240.31 	of assessments of the county or counties in which each school district is located.

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

241.1 	Sec. 16. Minnesota Statutes 2012, section 138.053, is amended to read:
241.2 	138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR 
241.3 	TOWNS.
241.4 	The governing body of any home rule charter or statutory city or town may annually 
241.5 	appropriate from its general fund an amount not to exceed 0.02418 percent of taxable
241.6 	 estimated market value, derived from ad valorem taxes on property or other revenues, to 
241.7 	be paid to the historical society of its respective county to be used for the promotion of 
241.8 	historical work and to aid in defraying the expenses of carrying on the historical work in the 
241.9 	county. No city or town may appropriate any funds for the benefit of any historical society 
241.10 	unless the society is affiliated with and approved by the Minnesota Historical Society.

241.11 	Sec. 17. Minnesota Statutes 2012, section 144F.01, subdivision 4, is amended to read:
241.12 		Subd. 4.Property tax levy authority. The district's board may levy a tax on the 
241.13 	taxable real and personal property in the district. The ad valorem tax levy may not exceed 
241.14 	0.048 percent of the taxable estimated market value of the district or $400,000, whichever 
241.15 	is less. The proceeds of the levy must be used as provided in subdivision 5. The board shall 
241.16 	certify the levy at the times as provided under section 275.07. The board shall provide the 
241.17 	county with whatever information is necessary to identify the property that is located within 
241.18 	the district. If the boundaries include a part of a parcel, the entire parcel shall be included 
241.19 	in the district. The county auditors must spread, collect, and distribute the proceeds of the 
241.20 	tax at the same time and in the same manner as provided by law for all other property taxes.

241.21 	Sec. 18. Minnesota Statutes 2012, section 162.07, subdivision 3, is amended to read:
241.22 		Subd. 3.Computation for rural counties. An amount equal to a levy of 0.01596 
241.23 	percent on each rural county's total taxable estimated market value for the last preceding 
241.24 	calendar year shall be computed and shall be subtracted from the county's total estimated 
241.25 	construction costs. The result thereof shall be the money needs of the county. For the 
241.26 	purpose of this section, "rural counties" means all counties having a population of less 
241.27 	than 175,000.

241.28 	Sec. 19. Minnesota Statutes 2012, section 162.07, subdivision 4, is amended to read:
241.29 		Subd. 4.Computation for urban counties. An amount equal to a levy of 0.00967 
241.30 	percent on each urban county's total taxable estimated market value for the last preceding 
241.31 	calendar year shall be computed and shall be subtracted from the county's total estimated 
241.32 	construction costs. The result thereof shall be the money needs of the county. For 
242.1 	the purpose of this section, "urban counties" means all counties having a population 
242.2 	of 175,000 or more.

242.3 	Sec. 20. Minnesota Statutes 2012, section 163.04, subdivision 3, is amended to read:
242.4 		Subd. 3.Bridges within certain cities. When the council of any statutory city or 
242.5 	city of the third or fourth class may determine that it is necessary to build or improve any 
242.6 	bridge or bridges, including approaches thereto, and any dam or retaining works connected 
242.7 	therewith, upon or forming a part of streets or highways either wholly or partly within 
242.8 	its limits, the county board shall appropriate one-half of the money as may be necessary 
242.9 	therefor from the county road and bridge fund, not exceeding during any year one-half 
242.10 	the amount of taxes paid into the county road and bridge fund during the preceding year, 
242.11 	on property within the corporate limits of the city. The appropriation shall be made upon 
242.12 	the petition of the council, which petition shall be filed by the council with the county 
242.13 	board prior to the fixing by the board of the annual county tax levy. The county board 
242.14 	shall determine the plans and specifications, shall let all necessary contracts, shall have 
242.15 	charge of construction, and upon its request, warrants in payment thereof shall be issued 
242.16 	by the county auditor, from time to time, as the construction work proceeds. Any unpaid 
242.17 	balance may be paid or advanced by the city. On petition of the council, the appropriations 
242.18 	of the county board, during not to exceed three successive years, may be made to apply 
242.19 	on the construction of the same items and to repay any money advanced by the city in 
242.20 	the construction thereof. None of the provisions of this section shall be construed to 
242.21 	be mandatory as applied to any city whose estimated market value exceeds $2,100 per 
242.22 	capita of its population.

242.23 	Sec. 21. Minnesota Statutes 2012, section 163.06, subdivision 6, is amended to read:
242.24 		Subd. 6.Expenditure in certain counties. In any county having not less than 95 
242.25 	nor more than 105 full and fractional townships, and having a an estimated market value 
242.26 	of not less than $12,000,000 nor more than $21,000,000, exclusive of money and credits,
242.27 	 the county board, by resolution, may expend the funds provided in subdivision 4 in any 
242.28 	organized or unorganized township town or unorganized territory or portion thereof in 
242.29 	such county.

242.30 	Sec. 22. Minnesota Statutes 2012, section 165.10, subdivision 1, is amended to read:
242.31 		Subdivision 1.Certain counties may issue and sell. The county board of any 
242.32 	county having no outstanding road and bridge bonds may issue and sell county road bonds 
242.33 	in an amount not exceeding 0.12089 percent of the estimated market value of the taxable 
243.1 	property within the county exclusive of money and credits, for the purpose of constructing, 
243.2 	reconstructing, improving, or maintaining any bridge or bridges on any highway under its 
243.3 	jurisdiction, without submitting the matter to a vote of the electors of the county.

243.4 	Sec. 23. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision 
243.5 	to read:
243.6 		Subd. 14.Estimated market value. "Estimated market value" means the assessor's 
243.7 	determination of market value, including the effects of any orders made under section 
243.8 	270.12 or chapter 274, for the parcel. The provisions of section 273.032 apply for certain 
243.9 	uses in determining the total estimated market value for the taxing jurisdiction.

243.10 	Sec. 24. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision 
243.11 	to read:
243.12 		Subd. 15.Taxable market value. "Taxable market value" means estimated market 
243.13 	value for the parcel as reduced by market value exclusions, deferments of value, or other 
243.14 	adjustments required by law, that reduce market value before the application of class rates.

243.15 	Sec. 25. Minnesota Statutes 2012, section 273.032, is amended to read:
243.16 	273.032 MARKET VALUE DEFINITION.
243.17 	(a) Unless otherwise provided, for the purpose of determining any property tax 
243.18 	levy limitation based on market value or any limit on net debt, the issuance of bonds, 
243.19 	certificates of indebtedness, or capital notes based on market value, any qualification to 
243.20 	receive state aid based on market value, or any state aid amount based on market value, the 
243.21 	terms "market value," "taxable estimated market value," and "market valuation," whether 
243.22 	equalized or unequalized, mean the total taxable estimated market value of taxable property 
243.23 	within the local unit of government before any of the following or similar adjustments for:
243.24 	(1) the market value exclusions under:
243.25 	(i) section 273.11, subdivisions 14a and 14c (vacant platted land);
243.26 	(ii) section 273.11, subdivision 16 (certain improvements to homestead property);
243.27 	(iii) section 273.11, subdivisions 19 and 20 (certain improvements to business 
243.28 	properties);
243.29 	(iv) section 273.11, subdivision 21 (homestead property damaged by mold);
243.30 	(v) section 273.11, subdivision 22 (qualifying lead hazardous reduction projects);
243.31 	(vi) section 273.13, subdivision 34 (homestead of a disabled veteran or family 
243.32 	caregiver);
243.33 	(vii) section 273.13, subdivision 35 (homestead market value exclusion); or
244.1 	(2) the deferment of value under:
244.2 	(i) the Minnesota Agricultural Property Tax Law, section 273.111;
244.3 	(ii) the Aggregate Resource Preservation Law, section 273.1115;
244.4 	(iii) the Minnesota Open Space Property Tax Law, section 273.112;
244.5 	(iv) the rural preserves property tax program, section 273.114; or
244.6 	(v) the Metropolitan Agricultural Preserves Act, section 473H.10; or
244.7 	(3) the adjustments to tax capacity for:
244.8 	(i) tax increment, financing under sections 469.174 to 469.1794;
244.9 	(ii) fiscal disparity, disparities under chapter 276A or 473F; or
244.10 	(iii)  powerline credit, or wind energy values, but after the limited market adjustments 
244.11 	under section 273.11, subdivision 1a, and after the market value exclusions of certain 
244.12 	improvements to homestead property under section 273.11, subdivision 16 under section 
244.13 	273.425.
244.14 	(b) Estimated market value under paragraph (a) also includes the market value 
244.15 	of tax-exempt property if the applicable law specifically provides that the limitation, 
244.16 	qualification, or aid calculation includes tax-exempt property.
244.17 	(c) Unless otherwise provided, "market value," "taxable estimated market value," 
244.18 	and "market valuation" for purposes of this paragraph property tax levy limitations and 
244.19 	calculation of state aid, refer to the taxable estimated market value for the previous 
244.20 	assessment year and for purposes of limits on net debt, the issuance of bonds, certificates of 
244.21 	indebtedness, or capital notes refer to the estimated market value as last finally equalized.
244.22 	For the purpose of determining any net debt limit based on market value, or any limit 
244.23 	on the issuance of bonds, certificates of indebtedness, or capital notes based on market 
244.24 	value, the terms "market value," "taxable market value," and "market valuation," whether 
244.25 	equalized or unequalized, mean the total taxable market value of property within the local 
244.26 	unit of government before any adjustments for tax increment, fiscal disparity, powerline 
244.27 	credit, or wind energy values, but after the limited market value adjustments under section 
244.28 	273.11, subdivision 1a, and after the market value exclusions of certain improvements to 
244.29 	homestead property under section 273.11, subdivision 16. Unless otherwise provided, 
244.30 	"market value," "taxable market value," and "market valuation" for purposes of this 
244.31 	paragraph, mean the taxable market value as last finally equalized.
244.32 	(d) For purposes of a provision of a home rule charter or of any special law that is not 
244.33 	codified in the statutes and that imposes a levy limitation based on market value or any limit 
244.34 	on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market 
244.35 	value, the terms "market value," "taxable market value," and "market valuation," whether 
244.36 	equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

245.1 	Sec. 26. Minnesota Statutes 2012, section 273.11, subdivision 1, is amended to read:
245.2 		Subdivision 1.Generally. Except as provided in this section or section 273.17, 
245.3 	subdivision 1, all property shall be valued at its market value. The market value as 
245.4 	determined pursuant to this section shall be stated such that any amount under $100 is 
245.5 	rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100. 
245.6 	In estimating and determining such value, the assessor shall not adopt a lower or different 
245.7 	standard of value because the same is to serve as a basis of taxation, nor shall the assessor 
245.8 	adopt as a criterion of value the price for which such property would sell at a forced sale, 
245.9 	or in the aggregate with all the property in the town or district; but the assessor shall value 
245.10 	each article or description of property by itself, and at such sum or price as the assessor 
245.11 	believes the same to be fairly worth in money. The assessor shall take into account the 
245.12 	effect on the market value of property of environmental factors in the vicinity of the 
245.13 	property. In assessing any tract or lot of real property, the value of the land, exclusive of 
245.14 	structures and improvements, shall be determined, and also the value of all structures and 
245.15 	improvements thereon, and the aggregate value of the property, including all structures 
245.16 	and improvements, excluding the value of crops growing upon cultivated land. In valuing 
245.17 	real property upon which there is a mine or quarry, it shall be valued at such price as such 
245.18 	property, including the mine or quarry, would sell for at a fair, voluntary sale, for cash, 
245.19 	if the material being mined or quarried is not subject to taxation under section 298.015
245.20 	and the mine or quarry is not exempt from the general property tax under section 298.25. 
245.21 	In valuing real property which is vacant, platted property shall be assessed as provided 
245.22 	in subdivision 14 subdivisions 14a and 14c. All property, or the use thereof, which is 
245.23 	taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market 
245.24 	value of such property and not at the value of a leasehold estate in such property, or at 
245.25 	some lesser value than its market value.

245.26 	Sec. 27. Minnesota Statutes 2012, section 273.124, subdivision 3a, is amended to read:
245.27 		Subd. 3a.Manufactured home park cooperative. (a) When a manufactured home 
245.28 	park is owned by a corporation or association organized under chapter 308A or 308B, 
245.29 	and each person who owns a share or shares in the corporation or association is entitled 
245.30 	to occupy a lot within the park, the corporation or association may claim homestead 
245.31 	treatment for the park. Each lot must be designated by legal description or number, and 
245.32 	each lot is limited to not more than one-half acre of land.
245.33 	(b) The manufactured home park shall be entitled to homestead treatment if all 
245.34 	of the following criteria are met:
246.1 	(1) the occupant or the cooperative corporation or association is paying the ad 
246.2 	valorem property taxes and any special assessments levied against the land and structure 
246.3 	either directly, or indirectly through dues to the corporation or association; and
246.4 	(2) the corporation or association organized under chapter 308A or 308B is wholly 
246.5 	owned by persons having a right to occupy a lot owned by the corporation or association.
246.6 	(c) A charitable corporation, organized under the laws of Minnesota with no 
246.7 	outstanding stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) 
246.8 	tax-exempt status, qualifies for homestead treatment with respect to a manufactured home 
246.9 	park if its members hold residential participation warrants entitling them to occupy a lot 
246.10 	in the manufactured home park.
246.11 	(d) "Homestead treatment" under this subdivision means the class rate provided for 
246.12 	class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause (5), 
246.13 	item (ii). The homestead market value credit exclusion under section 273.1384 273.13, 
246.14 	subdivision 35, does not apply and the property taxes assessed against the park shall not 
246.15 	be included in the determination of taxes payable for rent paid under section 290A.03.

246.16 	EFFECTIVE DATE. This section is effective for taxes payable in 2013 and 
246.17 	thereafter.

246.18 	Sec. 28. Minnesota Statutes 2012, section 273.124, subdivision 13, is amended to read:
246.19 		Subd. 13.Homestead application. (a) A person who meets the homestead 
246.20 	requirements under subdivision 1 must file a homestead application with the county 
246.21 	assessor to initially obtain homestead classification.
246.22 	(b) The format and contents of a uniform homestead application shall be prescribed 
246.23 	by the commissioner of revenue. The application must clearly inform the taxpayer that 
246.24 	this application must be signed by all owners who occupy the property or by the qualifying 
246.25 	relative and returned to the county assessor in order for the property to receive homestead 
246.26 	treatment.
246.27 	(c) Every property owner applying for homestead classification must furnish to the 
246.28 	county assessor the Social Security number of each occupant who is listed as an owner 
246.29 	of the property on the deed of record, the name and address of each owner who does not 
246.30 	occupy the property, and the name and Social Security number of each owner's spouse who 
246.31 	occupies the property. The application must be signed by each owner who occupies the 
246.32 	property and by each owner's spouse who occupies the property, or, in the case of property 
246.33 	that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
246.34 	If a property owner occupies a homestead, the property owner's spouse may not 
246.35 	claim another property as a homestead unless the property owner and the property owner's 
247.1 	spouse file with the assessor an affidavit or other proof required by the assessor stating that 
247.2 	the property qualifies as a homestead under subdivision 1, paragraph (e).
247.3 	Owners or spouses occupying residences owned by their spouses and previously 
247.4 	occupied with the other spouse, either of whom fail to include the other spouse's name 
247.5 	and Social Security number on the homestead application or provide the affidavits or 
247.6 	other proof requested, will be deemed to have elected to receive only partial homestead 
247.7 	treatment of their residence. The remainder of the residence will be classified as 
247.8 	nonhomestead residential. When an owner or spouse's name and Social Security number 
247.9 	appear on homestead applications for two separate residences and only one application is 
247.10 	signed, the owner or spouse will be deemed to have elected to homestead the residence for 
247.11 	which the application was signed.
247.12 	The Social Security numbers, state or federal tax returns or tax return information, 
247.13 	including the federal income tax schedule F required by this section, or affidavits or other 
247.14 	proofs of the property owners and spouses submitted under this or another section to 
247.15 	support a claim for a property tax homestead classification are private data on individuals as 
247.16 	defined by section 13.02, subdivision 12, but, notwithstanding that section, the private data 
247.17 	may be disclosed to the commissioner of revenue, or, for purposes of proceeding under the 
247.18 	Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
247.19 	(d) If residential real estate is occupied and used for purposes of a homestead by a 
247.20 	relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 
247.21 	order for the property to receive homestead status, a homestead application must be filed 
247.22 	with the assessor. The Social Security number of each relative and spouse of a relative 
247.23 	occupying the property shall be required on the homestead application filed under this 
247.24 	subdivision. If a different relative of the owner subsequently occupies the property, the 
247.25 	owner of the property must notify the assessor within 30 days of the change in occupancy. 
247.26 	The Social Security number of a relative or relative's spouse occupying the property 
247.27 	is private data on individuals as defined by section 13.02, subdivision 12, but may be 
247.28 	disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 
247.29 	Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
247.30 	(e) The homestead application shall also notify the property owners that the 
247.31 	application filed under this section will not be mailed annually and that if the property 
247.32 	is granted homestead status for any assessment year, that same property shall remain 
247.33 	classified as homestead until the property is sold or transferred to another person, or 
247.34 	the owners, the spouse of the owner, or the relatives no longer use the property as their 
247.35 	homestead. Upon the sale or transfer of the homestead property, a certificate of value must 
247.36 	be timely filed with the county auditor as provided under section 272.115. Failure to 
248.1 	notify the assessor within 30 days that the property has been sold, transferred, or that the 
248.2 	owner, the spouse of the owner, or the relative is no longer occupying the property as a 
248.3 	homestead, shall result in the penalty provided under this subdivision and the property 
248.4 	will lose its current homestead status.
248.5 	(f) If the homestead application is not returned within 30 days, the county will send a 
248.6 	second application to the present owners of record. The notice of proposed property taxes 
248.7 	prepared under section 275.065, subdivision 3, shall reflect the property's classification. If 
248.8 	a homestead application has not been filed with the county by December 15, the assessor 
248.9 	shall classify the property as nonhomestead for the current assessment year for taxes 
248.10 	payable in the following year, provided that the owner may be entitled to receive the 
248.11 	homestead classification by proper application under section 375.192.
248.12 	(g) At the request of the commissioner, each county must give the commissioner a 
248.13 	list that includes the name and Social Security number of each occupant of homestead 
248.14 	property who is the property owner, property owner's spouse, qualifying relative of a 
248.15 	property owner, or a spouse of a qualifying relative. The commissioner shall use the 
248.16 	information provided on the lists as appropriate under the law, including for the detection 
248.17 	of improper claims by owners, or relatives of owners, under chapter 290A.
248.18 	(h) If the commissioner finds that a property owner may be claiming a fraudulent 
248.19 	homestead, the commissioner shall notify the appropriate counties. Within 90 days of 
248.20 	the notification, the county assessor shall investigate to determine if the homestead 
248.21 	classification was properly claimed. If the property owner does not qualify, the county 
248.22 	assessor shall notify the county auditor who will determine the amount of homestead 
248.23 	benefits that had been improperly allowed. For the purpose of this section, "homestead 
248.24 	benefits" means the tax reduction resulting from the classification as a homestead and the 
248.25 	homestead market value exclusion under section 273.13, the taconite homestead credit 
248.26 	under section 273.135, the residential homestead and agricultural homestead credits credit
248.27 	 under section 273.1384, and the supplemental homestead credit under section 273.1391.
248.28 	The county auditor shall send a notice to the person who owned the affected property 
248.29 	at the time the homestead application related to the improper homestead was filed, 
248.30 	demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 
248.31 	of the homestead benefits. The person notified may appeal the county's determination 
248.32 	by serving copies of a petition for review with county officials as provided in section 
248.33 	278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 
248.34 	Court within 60 days of the date of the notice from the county. Procedurally, the appeal 
248.35 	is governed by the provisions in chapter 271 which apply to the appeal of a property tax 
248.36 	assessment or levy, but without requiring any prepayment of the amount in controversy. If 
249.1 	the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 
249.2 	has been filed, the county auditor shall certify the amount of taxes and penalty to the county 
249.3 	treasurer. The county treasurer will add interest to the unpaid homestead benefits and 
249.4 	penalty amounts at the rate provided in section 279.03 for real property taxes becoming 
249.5 	delinquent in the calendar year during which the amount remains unpaid. Interest may be 
249.6 	assessed for the period beginning 60 days after demand for payment was made.
249.7 	If the person notified is the current owner of the property, the treasurer may add the 
249.8 	total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 
249.9 	otherwise payable on the property by including the amounts on the property tax statements 
249.10 	under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 
249.11 	valorem taxes shall include interest accrued through December 31 of the year preceding 
249.12 	the taxes payable year for which the amounts are first added. These amounts, when added 
249.13 	to the property tax statement, become subject to all the laws for the enforcement of real or 
249.14 	personal property taxes for that year, and for any subsequent year.
249.15 	If the person notified is not the current owner of the property, the treasurer may 
249.16 	collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 
249.17 	the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 
249.18 	of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 
249.19 	tax obligations of the person who owned the property at the time the application related to 
249.20 	the improperly allowed homestead was filed. The treasurer may relieve a prior owner of 
249.21 	personal liability for the homestead benefits, penalty, interest, and costs, and instead extend 
249.22 	those amounts on the tax lists against the property as provided in this paragraph to the extent 
249.23 	that the current owner agrees in writing. On all demands, billings, property tax statements, 
249.24 	and related correspondence, the county must list and state separately the amounts of 
249.25 	homestead benefits, penalty, interest and costs being demanded, billed or assessed.
249.26 	(i) Any amount of homestead benefits recovered by the county from the property 
249.27 	owner shall be distributed to the county, city or town, and school district where the 
249.28 	property is located in the same proportion that each taxing district's levy was to the total 
249.29 	of the three taxing districts' levy for the current year. Any amount recovered attributable 
249.30 	to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 
249.31 	deposited in the taconite property tax relief account. Any amount recovered that is 
249.32 	attributable to supplemental homestead credit is to be transmitted to the commissioner of 
249.33 	revenue for deposit in the general fund of the state treasury. The total amount of penalty 
249.34 	collected must be deposited in the county general fund.
249.35 	(j) If a property owner has applied for more than one homestead and the county 
249.36 	assessors cannot determine which property should be classified as homestead, the county 
250.1 	assessors will refer the information to the commissioner. The commissioner shall make 
250.2 	the determination and notify the counties within 60 days.
250.3 	(k) In addition to lists of homestead properties, the commissioner may ask the 
250.4 	counties to furnish lists of all properties and the record owners. The Social Security 
250.5 	numbers and federal identification numbers that are maintained by a county or city 
250.6 	assessor for property tax administration purposes, and that may appear on the lists retain 
250.7 	their classification as private or nonpublic data; but may be viewed, accessed, and used by 
250.8 	the county auditor or treasurer of the same county for the limited purpose of assisting the 
250.9 	commissioner in the preparation of microdata samples under section 270C.12.
250.10 	(l) On or before April 30 each year beginning in 2007, each county must provide the 
250.11 	commissioner with the following data for each parcel of homestead property by electronic 
250.12 	means as defined in section 289A.02, subdivision 8:
250.13 	(i) the property identification number assigned to the parcel for purposes of taxes 
250.14 	payable in the current year;
250.15 	(ii) the name and Social Security number of each occupant of homestead property 
250.16 	who is the property owner, property owner's spouse, qualifying relative of a property 
250.17 	owner, or spouse of a qualifying relative;
250.18 	(iii) the classification of the property under section 273.13 for taxes payable in the 
250.19 	current year and in the prior year;
250.20 	(iv) an indication of whether the property was classified as a homestead for taxes 
250.21 	payable in the current year because of occupancy by a relative of the owner or by a 
250.22 	spouse of a relative;
250.23 	(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
250.24 	current year and the prior year;
250.25 	(vi) the market value of improvements to the property first assessed for tax purposes 
250.26 	for taxes payable in the current year;
250.27 	(vii) the assessor's estimated market value assigned to the property for taxes payable 
250.28 	in the current year and the prior year;
250.29 	(viii) the taxable market value assigned to the property for taxes payable in the 
250.30 	current year and the prior year;
250.31 	(ix) whether there are delinquent property taxes owing on the homestead;
250.32 	(x) the unique taxing district in which the property is located; and
250.33 	(xi) such other information as the commissioner decides is necessary.
250.34 	The commissioner shall use the information provided on the lists as appropriate 
250.35 	under the law, including for the detection of improper claims by owners, or relatives 
250.36 	of owners, under chapter 290A.

251.1 	EFFECTIVE DATE. This section is effective for taxes payable in 2013 and 
251.2 	thereafter.

251.3 	Sec. 29. Minnesota Statutes 2012, section 273.13, subdivision 21b, is amended to read:
251.4 		Subd. 21b.Net tax capacity. (a) Gross tax capacity means the product of the 
251.5 	appropriate gross class rates in this section and market values.
251.6 	(b) Net tax capacity means the product of the appropriate net class rates in this 
251.7 	section and taxable market values.

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

251.9 	Sec. 30. Minnesota Statutes 2012, section 273.1398, subdivision 3, is amended to read:
251.10 		Subd. 3.Disparity reduction aid.  The amount of disparity aid certified for each 
251.11 	taxing district within each unique taxing jurisdiction for taxes payable in the prior year 
251.12 	shall be multiplied by the ratio of (1) the jurisdiction's tax capacity using the class rates for 
251.13 	taxes payable in the year for which aid is being computed, to (2) its tax capacity using 
251.14 	the class rates for taxes payable in the year prior to that for which aid is being computed, 
251.15 	both based upon taxable market values for taxes payable in the year prior to that for which 
251.16 	aid is being computed. If the commissioner determines that insufficient information is 
251.17 	available to reasonably and timely calculate the numerator in this ratio for the first taxes 
251.18 	payable year that a class rate change or new class rate is effective, the commissioner shall 
251.19 	omit the effects of that class rate change or new class rate when calculating this ratio for 
251.20 	aid payable in that taxes payable year. For aid payable in the year following a year for 
251.21 	which such omission was made, the commissioner shall use in the denominator for the 
251.22 	class that was changed or created, the tax capacity for taxes payable two years prior to that 
251.23 	in which the aid is payable, based on taxable market values for taxes payable in the year 
251.24 	prior to that for which aid is being computed.

251.25 	Sec. 31. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
251.26 		Subd. 4.Disparity reduction credit. (a) Beginning with taxes payable in 1989, 
251.27 	class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property 
251.28 	is located in a border city that has an enterprise zone, as defined in section 469.166; (2) 
251.29 	the property is located in a city with a population greater than 2,500 and less than 35,000 
251.30 	according to the 1980 decennial census; (3) the city is adjacent to a city in another state or 
251.31 	immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city 
251.32 	in the other state has a population of greater than 5,000 and less than 75,000 according to 
251.33 	the 1980 decennial census.
252.1 	(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 
252.2 	property to 2.3 percent of the property's taxable market value and (ii) the tax on class 3a 
252.3 	property to 2.3 percent of taxable market value.
252.4 	(c) The county auditor shall annually certify the costs of the credits to the 
252.5 	Department of Revenue. The department shall reimburse local governments for the 
252.6 	property taxes forgone as the result of the credits in proportion to their total levies.

252.7 	Sec. 32. Minnesota Statutes 2012, section 275.011, subdivision 1, is amended to read:
252.8 		Subdivision 1.Determination of levy limit. The property tax levied for any 
252.9 	purpose under a special law that is not codified in Minnesota Statutes or a city charter 
252.10 	provision and that is subject to a mill rate limitation imposed by the special law or city 
252.11 	charter provision, excluding levies subject to mill rate limitations that use adjusted 
252.12 	assessed values determined by the commissioner of revenue under section 124.2131, must 
252.13 	not exceed the following amount for the years specified:
252.14 	(a) for taxes payable in 1988, the product of the applicable mill rate limitation 
252.15 	imposed by special law or city charter provision multiplied by the total assessed valuation 
252.16 	of all taxable property subject to the tax as adjusted by the provisions of Minnesota 
252.17 	Statutes 1986, sections 272.64; 273.13, subdivision 7a; and 275.49;
252.18 	(b) for taxes payable in 1989, the product of (1) the property tax levy limitation for 
252.19 	the taxes payable year 1988 determined under clause (a) multiplied by (2) an index for 
252.20 	market valuation changes equal to the assessment year 1988 total market valuation of all 
252.21 	taxable property subject to the tax divided by the assessment year 1987 total market 
252.22 	valuation of all taxable property subject to the tax; and
252.23 	(c) for taxes payable in 1990 and subsequent years, the product of (1) the property 
252.24 	tax levy limitation for the previous year determined pursuant to this subdivision multiplied 
252.25 	by (2) an index for market valuation changes equal to the total market valuation of all 
252.26 	taxable property subject to the tax for the current assessment year divided by the total 
252.27 	market valuation of all taxable property subject to the tax for the previous assessment year.
252.28 	For the purpose of determining the property tax levy limitation for the taxes payable 
252.29 	year 1988 2014 and subsequent years under this subdivision, "total market valuation" 
252.30 	means the total estimated market valuation value of all taxable property subject to the 
252.31 	tax without valuation adjustments for fiscal disparities (chapters 276A and 473F), tax 
252.32 	increment financing (sections 469.174 to 469.179), or powerline credit (section 273.425)
252.33 	 as provided under section 273.032.

252.34 	Sec. 33. Minnesota Statutes 2012, section 275.077, subdivision 2, is amended to read:
253.1 		Subd. 2.Correction of levy amount. The difference between the correct levy and 
253.2 	the erroneous levy shall be added to the township levy for the subsequent levy year; 
253.3 	provided that if the amount of the difference exceeds 0.12089 percent of taxable estimated
253.4 	 market value, the excess shall be added to the township levy for the second and later 
253.5 	subsequent levy years, not to exceed an additional levy of 0.12089 percent of taxable
253.6 	 estimated market value in any year, until the full amount of the difference has been levied. 
253.7 	The funds collected from the corrected levies shall be used to reimburse the county for the 
253.8 	payment required by subdivision 1.

253.9 	Sec. 34. Minnesota Statutes 2012, section 275.71, subdivision 4, is amended to read:
253.10 		Subd. 4.Adjusted levy limit base.  For taxes levied in 2008 through 2010, the 
253.11 	adjusted levy limit base is equal to the levy limit base computed under subdivision 2 
253.12 	or section 275.72, multiplied by:
253.13 	(1) one plus the percentage growth in the implicit price deflator, but the percentage 
253.14 	shall not be less than zero or exceed 3.9 percent;
253.15 	(2) one plus a percentage equal to 50 percent of the percentage increase in the number 
253.16 	of households, if any, for the most recent 12-month period for which data is available; and
253.17 	(3) one plus a percentage equal to 50 percent of the percentage increase in the 
253.18 	taxable estimated market value of the jurisdiction due to new construction of class 3 
253.19 	property, as defined in section 273.13, subdivision 4, except for state-assessed utility and 
253.20 	railroad property, for the most recent year for which data is available.

253.21 	Sec. 35. Minnesota Statutes 2012, section 276.04, subdivision 2, is amended to read:
253.22 		Subd. 2.Contents of tax statements. (a) The treasurer shall provide for the printing 
253.23 	of the tax statements. The commissioner of revenue shall prescribe the form of the property 
253.24 	tax statement and its contents. The tax statement must not state or imply that property tax 
253.25 	credits are paid by the state of Minnesota. The statement must contain a tabulated statement 
253.26 	of the dollar amount due to each taxing authority and the amount of the state tax from the 
253.27 	parcel of real property for which a particular tax statement is prepared. The dollar amounts 
253.28 	attributable to the county, the state tax, the voter approved school tax, the other local school 
253.29 	tax, the township or municipality, and the total of the metropolitan special taxing districts 
253.30 	as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. 
253.31 	The amounts due all other special taxing districts, if any, may be aggregated except that 
253.32 	any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, 
253.33 	Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate 
253.34 	line directly under the appropriate county's levy. If the county levy under this paragraph 
254.1 	includes an amount for a lake improvement district as defined under sections 103B.501
254.2 	to 103B.581, the amount attributable for that purpose must be separately stated from the 
254.3 	remaining county levy amount. In the case of Ramsey County, if the county levy under this 
254.4 	paragraph includes an amount for public library service under section 134.07, the amount 
254.5 	attributable for that purpose may be separated from the remaining county levy amount. 
254.6 	The amount of the tax on homesteads qualifying under the senior citizens' property tax 
254.7 	deferral program under chapter 290B is the total amount of property tax before subtraction 
254.8 	of the deferred property tax amount. The amount of the tax on contamination value 
254.9 	imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar 
254.10 	amounts, including the dollar amount of any special assessments, may be rounded to the 
254.11 	nearest even whole dollar. For purposes of this section whole odd-numbered dollars may 
254.12 	be adjusted to the next higher even-numbered dollar. The amount of market value excluded 
254.13 	under section 273.11, subdivision 16, if any, must also be listed on the tax statement.
254.14 	(b) The property tax statements for manufactured homes and sectional structures 
254.15 	taxed as personal property shall contain the same information that is required on the 
254.16 	tax statements for real property.
254.17 	(c) Real and personal property tax statements must contain the following information 
254.18 	in the order given in this paragraph. The information must contain the current year tax 
254.19 	information in the right column with the corresponding information for the previous year 
254.20 	in a column on the left:
254.21 	(1) the property's estimated market value under section 273.11, subdivision 1;
254.22 	(2) the property's homestead market value exclusion under section 273.13, 
254.23 	subdivision 35;
254.24 	(3) the property's taxable market value after reductions under sections 273.11, 
254.25 	subdivisions 1a and 16, and 273.13, subdivision 35 section 272.03, subdivision 15;
254.26 	(4) the property's gross tax, before credits;
254.27 	(5) for homestead agricultural properties, the credit under section 273.1384;
254.28 	(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 
254.29 	273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of 
254.30 	credit received under section 273.135 must be separately stated and identified as "taconite 
254.31 	tax relief"; and
254.32 	(7) the net tax payable in the manner required in paragraph (a).
254.33 	(d) If the county uses envelopes for mailing property tax statements and if the county 
254.34 	agrees, a taxing district may include a notice with the property tax statement notifying 
254.35 	taxpayers when the taxing district will begin its budget deliberations for the current 
254.36 	year, and encouraging taxpayers to attend the hearings. If the county allows notices to 
255.1 	be included in the envelope containing the property tax statement, and if more than 
255.2 	one taxing district relative to a given property decides to include a notice with the tax 
255.3 	statement, the county treasurer or auditor must coordinate the process and may combine 
255.4 	the information on a single announcement.

255.5 	Sec. 36. Minnesota Statutes 2012, section 276A.01, subdivision 10, is amended to read:
255.6 		Subd. 10.Adjusted market value. "Adjusted market value" of real and personal 
255.7 	property within a municipality means the assessor's estimated taxable market value, 
255.8 	as defined in section 272.03, of all real and personal property, including the value of 
255.9 	manufactured housing, within the municipality. For purposes of sections 276A.01 to 
255.10 	276A.09, the commissioner of revenue shall annually make determinations and reports 
255.11 	with respect to each municipality which are comparable to those it makes for school 
255.12 	districts, adjusted for sales ratios in a manner similar to the adjustments made to city and 
255.13 	town net tax capacities under section 127A.48, subdivisions 1 to 6, in the same manner 
255.14 	and at the same times prescribed by the subdivision. The commissioner of revenue shall 
255.15 	annually determine, for each municipality, information comparable to that required by 
255.16 	section 475.53, subdivision 4, for school districts, as soon as practicable after it becomes 
255.17 	available. The commissioner of revenue shall then compute the equalized market value of 
255.18 	property within each municipality.

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

255.20 	Sec. 37. Minnesota Statutes 2012, section 276A.01, subdivision 12, is amended to read:
255.21 		Subd. 12.Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
255.22 	 adjusted market value, determined as of January 2 of any year, divided by its population, 
255.23 	determined as of a date in the same year.

255.24 	Sec. 38. Minnesota Statutes 2012, section 276A.01, subdivision 13, is amended to read:
255.25 		Subd. 13.Average fiscal capacity. "Average fiscal capacity" of municipalities 
255.26 	means the sum of the valuations adjusted market values of all municipalities, determined 
255.27 	as of January 2 of any year, divided by the sum of their populations, determined as of 
255.28 	a date in the same year.

255.29 	Sec. 39. Minnesota Statutes 2012, section 276A.01, subdivision 15, is amended to read:
255.30 		Subd. 15.Net tax capacity. "Net tax capacity" means the taxable market value of 
255.31 	real and personal property multiplied by its net tax capacity rates in section 273.13.

256.1 	Sec. 40. Minnesota Statutes 2012, section 276A.06, subdivision 10, is amended to read:
256.2 		Subd. 10.Adjustment of values for other computations. For the purpose of 
256.3 	computing the amount or rate of any salary, aid, tax, or debt authorized, required, or 
256.4 	limited by any provision of any law or charter, where the authorization, requirement, or 
256.5 	limitation is related to any value or valuation of taxable property within any governmental 
256.6 	unit, the value or net tax capacity fiscal capacity under section 276A.01, subdivision 12, a 
256.7 	municipality's taxable market value must be adjusted to reflect the adjustments reductions
256.8 	 to net tax capacity effected by subdivision 2, clause (a), provided that: (1) in determining 
256.9 	the taxable market value of commercial-industrial property or any class thereof within 
256.10 	a governmental unit for any purpose other than section 276A.05 municipality, (a) the 
256.11 	reduction required by this subdivision is that amount which bears the same proportion to 
256.12 	the amount subtracted from the governmental unit's municipality's net tax capacity pursuant 
256.13 	to subdivision 2, clause (a), as the taxable market value of commercial-industrial property, 
256.14 	or such class thereof, located within the governmental unit municipality bears to the net 
256.15 	tax capacity of commercial-industrial property, or such class thereof, located within the 
256.16 	governmental unit, and (b) the increase required by this subdivision is that amount which 
256.17 	bears the same proportion to the amount added to the governmental unit's net tax capacity 
256.18 	pursuant to subdivision 2, clause (b), as the market value of commercial-industrial property, 
256.19 	or such class thereof, located within the governmental unit bears to the net tax capacity of 
256.20 	commercial-industrial property, or such class thereof, located within the governmental unit; 
256.21 	and (2) in determining the market value of real property within a municipality for purposes 
256.22 	of section 276A.05, the adjustment prescribed by clause (1)(a) must be made and that 
256.23 	prescribed by clause (1)(b) must not be made municipality. No adjustment shall be made 
256.24 	to taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

256.25 	Sec. 41. Minnesota Statutes 2012, section 287.08, is amended to read:
256.26 	287.08 TAX, HOW PAYABLE; RECEIPTS.
256.27 	(a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of 
256.28 	any county in this state in which the real property or some part is located at or before 
256.29 	the time of filing the mortgage for record. The treasurer shall endorse receipt on the 
256.30 	mortgage and the receipt is conclusive proof that the tax has been paid in the amount 
256.31 	stated and authorizes any county recorder or registrar of titles to record the mortgage. Its 
256.32 	form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the 
256.33 	mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from 
256.34 	registration tax." In either case the receipt must be signed by the treasurer. In case the 
256.35 	treasurer is unable to determine whether a claim of exemption should be allowed, the tax 
257.1 	must be paid as in the case of a taxable mortgage. For documents submitted electronically, 
257.2 	the endorsements and tax amount shall be affixed electronically and no signature by the 
257.3 	treasurer will be required. The actual payment method must be arranged in advance 
257.4 	between the submitter and the receiving county.
257.5 	(b) The county treasurer may refund in whole or in part any mortgage registry tax 
257.6 	overpayment if a written application by the taxpayer is submitted to the county treasurer 
257.7 	within 3-1/2 years from the date of the overpayment. If the county has not issued a denial 
257.8 	of the application, the taxpayer may bring an action in Tax Court in the county in which 
257.9 	the tax was paid at any time after the expiration of six months from the time that the 
257.10 	application was submitted. A denial of refund may be appealed within 60 days from 
257.11 	the date of the denial by bringing an action in Tax Court in the county in which the tax 
257.12 	was paid. The action is commenced by the serving of a petition for relief on the county 
257.13 	treasurer, and by filing a copy with the court. The county attorney shall defend the action. 
257.14 	The county treasurer shall notify the treasurer of each county that has or would receive a 
257.15 	portion of the tax as paid.
257.16 	(c) If the county treasurer determines a refund should be paid, or if a refund is 
257.17 	ordered by the court, the county treasurer of each county that actually received a portion 
257.18 	of the tax shall immediately pay a proportionate share of three percent of the refund 
257.19 	using any available county funds. The county treasurer of each county that received, or 
257.20 	would have received, a portion of the tax shall also pay their county's proportionate share 
257.21 	of the remaining 97 percent of the court-ordered refund on or before the 20th day of the 
257.22 	following month using solely the mortgage registry tax funds that would be paid to the 
257.23 	commissioner of revenue on that date under section 287.12. If the funds on hand under 
257.24 	this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the 
257.25 	county treasurer of the county in which the action was brought shall file a claim with the 
257.26 	commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of 
257.27 	the refund, and shall pay over the remaining portion upon receipt of a warrant from the 
257.28 	state issued pursuant to the claim.
257.29 	(d) When any mortgage covers real property located in more than one county in this 
257.30 	state the total tax must be paid to the treasurer of the county where the mortgage is first 
257.31 	presented for recording, and the payment must be receipted as provided in paragraph 
257.32 	(a). If the principal debt or obligation secured by such a multiple county mortgage 
257.33 	exceeds $10,000,000, the nonstate portion of the tax must be divided and paid over by 
257.34 	the county treasurer receiving it, on or before the 20th day of each month after receipt, 
257.35 	to the county or counties entitled in the ratio that the estimated market value of the real 
257.36 	property covered by the mortgage in each county bears to the estimated market value of 
258.1 	all the real property in this state described in the mortgage. In making the division and 
258.2 	payment the county treasurer shall send a statement giving the description of the real 
258.3 	property described in the mortgage and the estimated market value of the part located in 
258.4 	each county. For this purpose, the treasurer of any county may require the treasurer of 
258.5 	any other county to certify to the former the estimated market valuation value of any tract 
258.6 	of real property in any mortgage.
258.7 	(e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The 
258.8 	mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the 
258.9 	mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor, 
258.10 	the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the 
258.11 	amount of the tax collected for that purpose and the mortgagor is relieved of any further 
258.12 	obligation to pay the tax as to the amount collected by the mortgagee for this purpose.

258.13 	Sec. 42. Minnesota Statutes 2012, section 287.23, subdivision 1, is amended to read:
258.14 		Subdivision 1.Real property outside county. If any taxable deed or instrument 
258.15 	describes any real property located in more than one county in this state, the total tax must 
258.16 	be paid to the treasurer of the county where the document is first presented for recording, 
258.17 	and the payment must be receipted as provided in section 287.08. If the net consideration 
258.18 	exceeds $700,000, the nonstate portion of the tax must be divided and paid over by the 
258.19 	county treasurer receiving it, on or before the 20th day of each month after receipt, to 
258.20 	the county or counties entitled in the ratio which the estimated market value of the real 
258.21 	property covered by the document in each county bears to the estimated market value of 
258.22 	all the real property in this state described in the document. In making the division and 
258.23 	payment the county treasurer shall send a statement to the other involved counties giving 
258.24 	the description of the real property described in the document and the estimated market 
258.25 	value of the part located in each county. The treasurer of any county may require the 
258.26 	treasurer of any other county to certify to the former the estimated market valuation value
258.27 	 of any parcel of real property for this purpose.

258.28 	Sec. 43. Minnesota Statutes 2012, section 353G.08, subdivision 2, is amended to read:
258.29 		Subd. 2.Cash flow funding requirement. If the executive director determines that 
258.30 	an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has 
258.31 	insufficient assets to meet the service pensions determined payable from the account, 
258.32 	the executive director shall certify the amount of the potential service pension shortfall 
258.33 	to the municipality or municipalities and the municipality or municipalities shall make 
258.34 	an additional employer contribution to the account within ten days of the certification. 
259.1 	If more than one municipality is associated with the account, unless the municipalities 
259.2 	agree to a different allocation, the municipalities shall allocate the additional employer 
259.3 	contribution one-half in proportion to the population of each municipality and one-half in 
259.4 	proportion to the estimated market value of the property of each municipality.

259.5 	Sec. 44. Minnesota Statutes 2012, section 365.025, subdivision 4, is amended to read:
259.6 		Subd. 4.Major purchases: notice, petition, election. Before buying anything 
259.7 	under subdivision 2 that costs more than 0.24177 percent of the estimated market value of 
259.8 	the town, the town must follow this subdivision.
259.9 	The town must publish in its official newspaper the board's resolution to pay for the 
259.10 	property over time. Then a petition for an election on the contract may be filed with the 
259.11 	clerk. The petition must be filed within ten days after the resolution is published. To require 
259.12 	the election the petition must be signed by a number of voters equal to ten percent of the 
259.13 	voters at the last regular town election. The contract then must be approved by a majority of 
259.14 	those voting on the question. The question may be voted on at a regular or special election.

259.15 	Sec. 45. Minnesota Statutes 2012, section 366.095, subdivision 1, is amended to read:
259.16 		Subdivision 1.Certificates of indebtedness. The town board may issue certificates 
259.17 	of indebtedness within the debt limits for a town purpose otherwise authorized by law. 
259.18 	The certificates shall be payable in not more than ten years and be issued on the terms and 
259.19 	in the manner as the board may determine. If the amount of the certificates to be issued 
259.20 	exceeds 0.25 percent of the estimated market value of the town, they shall not be issued 
259.21 	for at least ten days after publication in a newspaper of general circulation in the town of 
259.22 	the board's resolution determining to issue them. If within that time, a petition asking for 
259.23 	an election on the proposition signed by voters equal to ten percent of the number of voters 
259.24 	at the last regular town election is filed with the clerk, the certificates shall not be issued 
259.25 	until their issuance has been approved by a majority of the votes cast on the question at 
259.26 	a regular or special election. A tax levy shall be made to pay the principal and interest 
259.27 	on the certificates as in the case of bonds.

259.28 	Sec. 46. Minnesota Statutes 2012, section 366.27, is amended to read:
259.29 	366.27 FIREFIGHTERS' RELIEF; TAX LEVY.
259.30 	The town board of any town in this state having therein a platted portion on 
259.31 	which resides 1,200 or more people, and wherein a duly incorporated firefighters' relief 
259.32 	association is located may each year levy a tax not to exceed 0.00806 percent of taxable
259.33 	 estimated market value for the benefit of the relief association.

260.1 	Sec. 47. Minnesota Statutes 2012, section 368.01, subdivision 23, is amended to read:
260.2 		Subd. 23.Financing purchase of certain equipment. The town board may issue 
260.3 	certificates of indebtedness within debt limits to purchase fire or police equipment or 
260.4 	ambulance equipment or street construction or maintenance equipment. The certificates 
260.5 	shall be payable in not more than five years and be issued on terms and in the manner as the 
260.6 	board may determine. If the amount of the certificates to be issued to finance a purchase 
260.7 	exceeds 0.24177 percent of the estimated market value of the town, excluding money 
260.8 	and credits, they shall not be issued for at least ten days after publication in the official 
260.9 	newspaper of a town board resolution determining to issue them. If before the end of that 
260.10 	time, a petition asking for an election on the proposition signed by voters equal to ten 
260.11 	percent of the number of voters at the last regular town election is filed with the clerk, the 
260.12 	certificates shall not be issued until the proposition of their issuance has been approved by a 
260.13 	majority of the votes cast on the question at a regular or special election. A tax levy shall be 
260.14 	made for the payment of the principal and interest on the certificates as in the case of bonds.

260.15 	Sec. 48. Minnesota Statutes 2012, section 368.47, is amended to read:
260.16 	368.47 TOWNS MAY BE DISSOLVED.
260.17 	(1) When the voters residing within a town have failed to elect any town officials for 
260.18 	more than ten years continuously;
260.19 	(2) when a town has failed for a period of ten years to exercise any of the powers 
260.20 	and functions of a town;
260.21 	(3) when the estimated market value of a town drops to less than $165,000;
260.22 	(4) when the tax delinquency of a town, exclusive of taxes that are delinquent or 
260.23 	unpaid because they are contested in proceedings for the enforcement of taxes, amounts to 
260.24 	12 percent of its market value; or
260.25 	(5) when the state or federal government has acquired title to 50 percent of the 
260.26 	real estate of a town,
260.27 	which facts, or any of them, may be found and determined by the resolution of the county 
260.28 	board of the county in which the town is located, according to the official records in the 
260.29 	office of the county auditor, the county board by resolution may declare the town, naming 
260.30 	it, dissolved and no longer entitled to exercise any of the powers or functions of a town.
260.31 	In Cass, Itasca, and St. Louis Counties, before the dissolution is effective the voters 
260.32 	of the town shall express their approval or disapproval. The town clerk shall, upon a 
260.33 	petition signed by a majority of the registered voters of the town, filed with the clerk at 
260.34 	least 60 days before a regular or special town election, give notice at the same time and 
260.35 	in the same manner of the election that the question of dissolution of the town will be 
261.1 	submitted for determination at the election. At the election the question shall be voted 
261.2 	upon by a separate ballot, the terms of which shall be either "for dissolution" or "against 
261.3 	dissolution." The ballot shall be deposited in a separate ballot box and the result of the 
261.4 	voting canvassed, certified, and returned in the same manner and at the same time as 
261.5 	other facts and returns of the election. If a majority of the votes cast at the election are 
261.6 	for dissolution, the town shall be dissolved. If a majority of the votes cast at the election 
261.7 	are against dissolution, the town shall not be dissolved.
261.8 	When a town is dissolved under sections 368.47 to 368.49 the county shall acquire 
261.9 	title to any telephone company or other business conducted by the town. The business 
261.10 	shall be operated by the board of county commissioners until it can be sold. The 
261.11 	subscribers or patrons of the business shall have the first opportunity of purchase. If the 
261.12 	town has any outstanding indebtedness chargeable to the business, the county auditor shall 
261.13 	levy a tax against the property situated in the dissolved town to pay the indebtedness 
261.14 	as it becomes due.

261.15 	Sec. 49. Minnesota Statutes 2012, section 370.01, is amended to read:
261.16 	370.01 CHANGE OF BOUNDARIES; CREATION OF NEW COUNTIES.
261.17 	The boundaries of counties may be changed by taking territory from a county and 
261.18 	attaching it to an adjoining county, and new counties may be established out of territory of 
261.19 	one or more existing counties. A new county shall contain at least 400 square miles and 
261.20 	have at least 4,000 inhabitants. A proposed new county must have a total taxable estimated
261.21 	 market value of at least 35 percent of (i) the total taxable estimated market value of the 
261.22 	existing county, or (ii) the average total taxable estimated market value of the existing 
261.23 	counties, included in the proposition. The determination of the taxable estimated market 
261.24 	value of a county must be made by the commissioner of revenue. An existing county shall 
261.25 	not be reduced in area below 400 square miles, have less than 4,000 inhabitants, or have a 
261.26 	total taxable estimated market value of less than that required of a new county.
261.27 	No change in the boundaries of any county having an area of more than 2,500 square 
261.28 	miles, whether by the creation of a new county, or otherwise, shall detach from the existing 
261.29 	county any territory within 12 miles of the county seat.

261.30 	Sec. 50. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read:
261.31 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
261.32 	the meanings given.
261.33 	(a) "Bonds" means an obligation as defined under section 475.51.
262.1 	(b) "Capital improvement" means acquisition or betterment of public lands, 
262.2 	buildings, or other improvements within the county for the purpose of a county courthouse, 
262.3 	administrative building, health or social service facility, correctional facility, jail, law 
262.4 	enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads and 
262.5 	bridges, and the acquisition of development rights in the form of conservation easements 
262.6 	under chapter 84C. An improvement must have an expected useful life of five years or 
262.7 	more to qualify. "Capital improvement" does not include a recreation or sports facility 
262.8 	building (such as, but not limited to, a gymnasium, ice arena, racquet sports facility, 
262.9 	swimming pool, exercise room or health spa), unless the building is part of an outdoor 
262.10 	park facility and is incidental to the primary purpose of outdoor recreation.
262.11 	(c) "Metropolitan county" means a county located in the seven-county metropolitan 
262.12 	area as defined in section 473.121 or a county with a population of 90,000 or more.
262.13 	(d) "Population" means the population established by the most recent of the 
262.14 	following (determined as of the date the resolution authorizing the bonds was adopted):
262.15 	(1) the federal decennial census,
262.16 	(2) a special census conducted under contract by the United States Bureau of the 
262.17 	Census, or
262.18 	(3) a population estimate made either by the Metropolitan Council or by the state 
262.19 	demographer under section 4A.02.
262.20 	(e) "Qualified indoor ice arena" means a facility that meets the requirements of 
262.21 	section 373.43.
262.22 	(f) "Tax capacity" means total taxable market value, but does not include captured 
262.23 	market value.

262.24 	Sec. 51. Minnesota Statutes 2012, section 373.40, subdivision 4, is amended to read:
262.25 		Subd. 4.Limitations on amount. A county may not issue bonds under this section 
262.26 	if the maximum amount of principal and interest to become due in any year on all the 
262.27 	outstanding bonds issued pursuant to this section (including the bonds to be issued) will 
262.28 	equal or exceed 0.12 percent of taxable the estimated market value of property in the 
262.29 	county. Calculation of the limit must be made using the taxable estimated market value for 
262.30 	the taxes payable year in which the obligations are issued and sold. This section does not 
262.31 	limit the authority to issue bonds under any other special or general law.

262.32 	Sec. 52. Minnesota Statutes 2012, section 375.167, subdivision 1, is amended to read:
262.33 		Subdivision 1.Appropriations. Notwithstanding any contrary law, a county board 
262.34 	may appropriate from the general revenue fund to any nonprofit corporation a sum not 
263.1 	to exceed 0.00604 percent of taxable estimated market value to provide legal assistance 
263.2 	to persons who are unable to afford private legal counsel.

263.3 	Sec. 53. Minnesota Statutes 2012, section 375.18, subdivision 3, is amended to read:
263.4 		Subd. 3.Courthouse. Each county board may erect, furnish, and maintain a 
263.5 	suitable courthouse. No indebtedness shall be created for a courthouse in excess of an 
263.6 	amount equal to a levy of 0.04030 percent of taxable estimated market value without the 
263.7 	approval of a majority of the voters of the county voting on the question of issuing the 
263.8 	obligation at an election.

263.9 	Sec. 54. Minnesota Statutes 2012, section 375.555, is amended to read:
263.10 	375.555 FUNDING.
263.11 	To implement the county emergency jobs program, the county board may expend 
263.12 	an amount equal to what would be generated by a levy of 0.01209 percent of taxable
263.13 	 estimated market value. The money to be expended may be from any available funds 
263.14 	not otherwise earmarked.

263.15 	Sec. 55. Minnesota Statutes 2012, section 383B.152, is amended to read:
263.16 	383B.152 BUILDING AND MAINTENANCE FUND.
263.17 	The county board may by resolution levy a tax to provide money which shall be kept 
263.18 	in a fund known as the county reserve building and maintenance fund. Money in the fund 
263.19 	shall be used solely for the construction, maintenance, and equipping of county buildings 
263.20 	that are constructed or maintained by the board. The levy shall not be subject to any limit 
263.21 	fixed by any other law or by any board of tax levy or other corresponding body, but shall 
263.22 	not exceed 0.02215 percent of taxable estimated market value, less the amount required by 
263.23 	chapter 475 to be levied in the year for the payment of the principal of and interest on all 
263.24 	bonds issued pursuant to Extra Session Laws 1967, chapter 47, section 1.

263.25 	Sec. 56. Minnesota Statutes 2012, section 383B.245, is amended to read:
263.26 	383B.245 LIBRARY LEVY.
263.27 	(a) The county board may levy a tax on the taxable property within the county to 
263.28 	acquire, better, and construct county library buildings and branches and to pay principal 
263.29 	and interest on bonds issued for that purpose.
263.30 	(b) The county board may by resolution adopted by a five-sevenths vote issue and 
263.31 	sell general obligation bonds of the county in the manner provided in sections 475.60 to 
264.1 	475.73. The bonds shall not be subject to the limitations of sections 475.51 to 475.59, 
264.2 	but the maturity years and amounts and interest rates of each series of bonds shall be 
264.3 	fixed so that the maximum amount of principal and interest to become due in any year, 
264.4 	on the bonds of that series and of all outstanding series issued by or for the purposes of 
264.5 	libraries, shall not exceed an amount equal to 0.01612 percent of estimated market value 
264.6 	of all taxable property in the county as last finally equalized before the issuance of the new 
264.7 	series. When the tax levy authorized in this section is collected it shall be appropriated 
264.8 	and credited to a debt service fund for the bonds in amounts required each year in lieu of a 
264.9 	countywide tax levy for the debt service fund under section 475.61.

264.10 	Sec. 57. Minnesota Statutes 2012, section 383B.73, subdivision 1, is amended to read:
264.11 		Subdivision 1.Levy. To provide funds for the purposes of the Three Rivers Park 
264.12 	District as set forth in its annual budget, in lieu of the levies authorized by any other 
264.13 	special law for such purposes, the Board of Park District Commissioners may levy taxes 
264.14 	on all the taxable property in the county and park district at a rate not exceeding 0.03224 
264.15 	percent of estimated market value. Notwithstanding section 398.16, on or before October 
264.16 	1 of each year, after public hearing, the Board of Park District Commissioners shall adopt 
264.17 	a budget for the ensuing year and shall determine the total amount necessary to be raised 
264.18 	from ad valorem tax levies to meet its budget. The Board of Park District Commissioners 
264.19 	shall submit the budget to the county board. The county board may veto or modify an item 
264.20 	contained in the budget. If the county board determines to veto or to modify an item in the 
264.21 	budget, it must, within 15 days after the budget was submitted by the district board, state 
264.22 	in writing the specific reasons for its objection to the item vetoed or the reason for the 
264.23 	modification. The Park District Board, after consideration of the county board's objections 
264.24 	and proposed modifications, may reapprove a vetoed item or the original version of an item 
264.25 	with respect to which a modification has been proposed, by a two-thirds majority. If the 
264.26 	district board does not reapprove a vetoed item, the item shall be deleted from the budget. 
264.27 	If the district board does not reapprove the original version of a modified item, the item 
264.28 	shall be included in the budget as modified by the county board. After adoption of the final 
264.29 	budget and no later than October 1, the superintendent of the park district shall certify to the 
264.30 	office of the Hennepin County director of tax and public records exercising the functions 
264.31 	of the county auditor the total amount to be raised from ad valorem tax levies to meet its 
264.32 	budget for the ensuing year. The director of tax and public records shall add the amount of 
264.33 	any levy certified by the district to other tax levies on the property of the county within the 
264.34 	district for collection by the director of tax and public records with other taxes. When 
265.1 	collected, the director shall make settlement of such taxes with the district in the same 
265.2 	manner as other taxes are distributed to the other political subdivisions in Hennepin County.

265.3 	Sec. 58. Minnesota Statutes 2012, section 383E.20, is amended to read:
265.4 	383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS.
265.5 	The Anoka County Board may, by resolution adopted by a four-sevenths vote, issue 
265.6 	and sell general obligation bonds of the county in the manner provided in chapter 475 to 
265.7 	acquire, better, and construct county library buildings. The bonds shall not be subject to the 
265.8 	requirements of sections 475.57 to 475.59. The maturity years and amounts and interest 
265.9 	rates of each series of bonds shall be fixed so that the maximum amount of principal and 
265.10 	interest to become due in any year, on the bonds of that series and of all outstanding series 
265.11 	issued by or for the purposes of libraries, shall not exceed an amount equal to .01 percent 
265.12 	of the taxable estimated market value of all taxable property in the county, excluding any 
265.13 	taxable property taxed by any city for the support of any free public library. When the tax 
265.14 	levy authorized in this section is collected, it shall be appropriated and credited to a debt 
265.15 	service fund for the bonds. The tax levy for the debt service fund under section 475.61 
265.16 	shall be reduced by the amount available or reasonably anticipated to be available in the 
265.17 	fund to make payments otherwise payable from the levy pursuant to section 475.61.

265.18 	Sec. 59. Minnesota Statutes 2012, section 383E.23, is amended to read:
265.19 	383E.23 LIBRARY TAX.
265.20 	The Anoka County Board may levy a tax of not more than .01 percent of the taxable
265.21 	 estimated market value of taxable property located within the county excluding any 
265.22 	taxable property taxed by any city for the support of any free public library, to acquire, 
265.23 	better, and construct county library buildings and to pay principal and interest on bonds 
265.24 	issued for that purpose. The tax shall be disregarded in the calculation of levies or limits 
265.25 	on levies provided by section 373.40, or other law.

265.26 	Sec. 60. Minnesota Statutes 2012, section 385.31, is amended to read:
265.27 	385.31 PAYMENT OF COUNTY ORDERS OR WARRANTS.
265.28 	When any order or warrant drawn on the treasurer is presented for payment, if there 
265.29 	is money in the treasury for that purpose, the county treasurer shall redeem the same, and 
265.30 	write across the entire face thereof the word "redeemed," the date of the redemption, and 
265.31 	the treasurer's official signature. If there is not sufficient funds in the proper accounts to 
265.32 	pay such orders they shall be numbered and registered in their order of presentation, 
266.1 	and proper endorsement thereof shall be made on such orders and they shall be entitled 
266.2 	to payment in like order. Such orders shall bear interest at not to exceed the rate of six 
266.3 	percent per annum from such date of presentment. The treasurer, as soon as there is 
266.4 	sufficient money in the treasury, shall appropriate and set apart a sum sufficient for the 
266.5 	payment of the orders so presented and registered, and, if entitled to interest, issue to the 
266.6 	original holder a notice that interest will cease in 30 days from the date of such notice; and, 
266.7 	if orders thus entitled to priority of payment are not then presented, the next in order of 
266.8 	registry may be paid until such orders are presented. No interest shall be paid on any order, 
266.9 	except upon a warrant drawn by the county auditor for that purpose, giving the number 
266.10 	and the date of the order on account of which the interest warrant is drawn. In any county 
266.11 	in this state now or hereafter having a an estimated market value of all taxable property, 
266.12 	exclusive of money and credits, of not less than $1,033,000,000, the county treasurer, in 
266.13 	order to save payment of interest on county warrants drawn upon a fund in which there 
266.14 	shall be temporarily insufficient money in the treasury to redeem the same, may borrow 
266.15 	temporarily from any other fund in the county treasury in which there is a sufficient balance 
266.16 	to care for the needs of such fund and allow a temporary loan or transfer to any other fund, 
266.17 	and may pay such warrants out of such funds. Any such money so transferred and used in 
266.18 	redeeming such county warrants shall be returned to the fund from which drawn as soon 
266.19 	as money shall come in to the credit of such fund on which any such warrant was drawn 
266.20 	and paid as aforesaid. Any county operating on a cash basis may use a combined form of 
266.21 	warrant or order and check, which, when signed by the chair of the county board and by 
266.22 	the auditor, is an order or warrant for the payment of the claim, and, when countersigned 
266.23 	by the county treasurer, is a check for the payment of the amount thereof.

266.24 	Sec. 61. Minnesota Statutes 2012, section 394.36, subdivision 1, is amended to read:
266.25 		Subdivision 1.Continuation of nonconformity; limitations. Except as provided in 
266.26 	subdivision 2, 3, or 4, any nonconformity, including the lawful use or occupation of land 
266.27 	or premises existing at the time of the adoption of an official control under this chapter, 
266.28 	may be continued, although the use or occupation does not conform to the official control. 
266.29 	If the nonconformity or occupancy is discontinued for a period of more than one year, or 
266.30 	any nonconforming building or structure is destroyed by fire or other peril to the extent of 
266.31 	50 percent of its estimated market value, any subsequent use or occupancy of the land or 
266.32 	premises shall be a conforming use or occupancy.

266.33 	Sec. 62. Minnesota Statutes 2012, section 398A.04, subdivision 8, is amended to read:
267.1 		Subd. 8.Taxation. Before deciding to exercise the power to tax, the authority shall 
267.2 	give six weeks' published notice in all municipalities in the region. If a number of voters 
267.3 	in the region equal to five percent of those who voted for candidates for governor at the 
267.4 	last gubernatorial election present a petition within nine weeks of the first published notice 
267.5 	to the secretary of state requesting that the matter be submitted to popular vote, it shall be 
267.6 	submitted at the next general election. The question prepared shall be:
267.7 	"Shall the regional rail authority have the power to impose a property tax?

267.8		Yes 
........		
267.9		No ........"
		
267.10 	If a majority of those voting on the question approve or if no petition is presented 
267.11 	within the prescribed time the authority may levy a tax at any annual rate not exceeding 
267.12 	0.04835 percent of estimated market value of all taxable property situated within the 
267.13 	municipality or municipalities named in its organization resolution. Its recording officer 
267.14 	shall file, on or before September 15, in the office of the county auditor of each county 
267.15 	in which territory under the jurisdiction of the authority is located a certified copy of the 
267.16 	board of commissioners' resolution levying the tax, and each county auditor shall assess 
267.17 	and extend upon the tax rolls of each municipality named in the organization resolution the 
267.18 	portion of the tax that bears the same ratio to the whole amount that the net tax capacity of 
267.19 	taxable property in that municipality bears to the net tax capacity of taxable property in 
267.20 	all municipalities named in the organization resolution. Collections of the tax shall be 
267.21 	remitted by each county treasurer to the treasurer of the authority. For taxes levied in 1991, 
267.22 	the amount levied for light rail transit purposes under this subdivision shall not exceed 75 
267.23 	percent of the amount levied in 1990 for light rail transit purposes under this subdivision.

267.24 	Sec. 63. Minnesota Statutes 2012, section 401.05, subdivision 3, is amended to read:
267.25 		Subd. 3.Leasing. (a) A county or joint powers board of a group of counties 
267.26 	which acquires or constructs and equips or improves facilities under this chapter may, 
267.27 	with the approval of the board of county commissioners of each county, enter into a 
267.28 	lease agreement with a city situated within any of the counties, or a county housing and 
267.29 	redevelopment authority established under chapter 469 or any special law. Under the lease 
267.30 	agreement, the city or county housing and redevelopment authority shall:
267.31 	(1) construct or acquire and equip or improve a facility in accordance with plans 
267.32 	prepared by or at the request of a county or joint powers board of the group of counties 
267.33 	and approved by the commissioner of corrections; and
267.34 	(2) finance the facility by the issuance of revenue bonds.
268.1 	(b) The county or joint powers board of a group of counties may lease the facility 
268.2 	site, improvements, and equipment for a term upon rental sufficient to produce revenue 
268.3 	for the prompt payment of the revenue bonds and all interest accruing on them. Upon 
268.4 	completion of payment, the lessee shall acquire title. The real and personal property 
268.5 	acquired for the facility constitutes a project and the lease agreement constitutes a revenue 
268.6 	agreement as provided in sections 469.152 to 469.165. All proceedings by the city or 
268.7 	county housing and redevelopment authority and the county or joint powers board shall be 
268.8 	as provided in sections 469.152 to 469.165, with the following adjustments:
268.9 	(1) no tax may be imposed upon the property;
268.10 	(2) the approval of the project by the commissioner of employment and economic 
268.11 	development is not required;
268.12 	(3) the Department of Corrections shall be furnished and shall record information 
268.13 	concerning each project as it may prescribe, in lieu of reports required on other projects to 
268.14 	the commissioner of employment and economic development;
268.15 	(4) the rentals required to be paid under the lease agreement shall not exceed in any 
268.16 	year one-tenth of one percent of the estimated market value of property within the county 
268.17 	or group of counties as last equalized before the execution of the lease agreement;
268.18 	(5) the county or group of counties shall provide for payment of all rentals due 
268.19 	during the term of the lease agreement in the manner required in subdivision 4;
268.20 	(6) no mortgage on the facilities shall be granted for the security of the bonds, but 
268.21 	compliance with clause (5) may be enforced as a nondiscretionary duty of the county 
268.22 	or group of counties; and
268.23 	(7) the county or the joint powers board of the group of counties may sublease any 
268.24 	part of the facilities for purposes consistent with their maintenance and operation.

268.25 	Sec. 64. Minnesota Statutes 2012, section 410.32, is amended to read:
268.26 	410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
268.27 	(a) Notwithstanding any contrary provision of other law or charter, a home rule 
268.28 	charter city may, by resolution and without public referendum, issue capital notes subject 
268.29 	to the city debt limit to purchase capital equipment.
268.30 	(b) For purposes of this section, "capital equipment" means:
268.31 	(1) public safety equipment, ambulance and other medical equipment, road 
268.32 	construction and maintenance equipment, and other capital equipment; and
268.33 	(2) computer hardware and software, whether bundled with machinery or equipment 
268.34 	or unbundled.
269.1 	(c) The equipment or software must have an expected useful life at least as long 
269.2 	as the term of the notes.
269.3 	(d) The notes shall be payable in not more than ten years and be issued on terms 
269.4 	and in the manner the city determines. The total principal amount of the capital notes 
269.5 	issued in a fiscal year shall not exceed 0.03 percent of the estimated market value of 
269.6 	taxable property in the city for that year.
269.7 	(e) A tax levy shall be made for the payment of the principal and interest on the 
269.8 	notes, in accordance with section 475.61, as in the case of bonds.
269.9 	(f) Notes issued under this section shall require an affirmative vote of two-thirds of 
269.10 	the governing body of the city.
269.11 	(g) Notwithstanding a contrary provision of other law or charter, a home rule charter 
269.12 	city may also issue capital notes subject to its debt limit in the manner and subject to the 
269.13 	limitations applicable to statutory cities pursuant to section 412.301.

269.14 	Sec. 65. Minnesota Statutes 2012, section 412.221, subdivision 2, is amended to read:
269.15 		Subd. 2.Contracts. The council shall have power to make such contracts as may 
269.16 	be deemed necessary or desirable to make effective any power possessed by the council. 
269.17 	The city may purchase personal property through a conditional sales contract and real 
269.18 	property through a contract for deed under which contracts the seller is confined to the 
269.19 	remedy of recovery of the property in case of nonpayment of all or part of the purchase 
269.20 	price, which shall be payable over a period of not to exceed five years. When the contract 
269.21 	price of property to be purchased by contract for deed or conditional sales contract 
269.22 	exceeds 0.24177 percent of the estimated market value of the city, the city may not enter 
269.23 	into such a contract for at least ten days after publication in the official newspaper of a 
269.24 	council resolution determining to purchase property by such a contract; and, if before the 
269.25 	end of that time a petition asking for an election on the proposition signed by voters equal 
269.26 	to ten percent of the number of voters at the last regular city election is filed with the clerk, 
269.27 	the city may not enter into such a contract until the proposition has been approved by a 
269.28 	majority of the votes cast on the question at a regular or special election.

269.29 	Sec. 66. Minnesota Statutes 2012, section 412.301, is amended to read:
269.30 	412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
269.31 	(a) The council may issue certificates of indebtedness or capital notes subject to the 
269.32 	city debt limits to purchase capital equipment.
269.33 	(b) For purposes of this section, "capital equipment" means:
270.1 	(1) public safety equipment, ambulance and other medical equipment, road 
270.2 	construction and maintenance equipment, and other capital equipment; and
270.3 	(2) computer hardware and software, whether bundled with machinery or equipment 
270.4 	or unbundled.
270.5 	(c) The equipment or software must have an expected useful life at least as long as 
270.6 	the terms of the certificates or notes.
270.7 	(d) Such certificates or notes shall be payable in not more than ten years and shall be 
270.8 	issued on such terms and in such manner as the council may determine.
270.9 	(e) If the amount of the certificates or notes to be issued to finance any such purchase 
270.10 	exceeds 0.25 percent of the estimated market value of taxable property in the city, they 
270.11 	shall not be issued for at least ten days after publication in the official newspaper of 
270.12 	a council resolution determining to issue them; and if before the end of that time, a 
270.13 	petition asking for an election on the proposition signed by voters equal to ten percent 
270.14 	of the number of voters at the last regular municipal election is filed with the clerk, such 
270.15 	certificates or notes shall not be issued until the proposition of their issuance has been 
270.16 	approved by a majority of the votes cast on the question at a regular or special election.
270.17 	(f) A tax levy shall be made for the payment of the principal and interest on such 
270.18 	certificates or notes, in accordance with section 475.61, as in the case of bonds.

270.19 	Sec. 67. Minnesota Statutes 2012, section 428A.02, subdivision 1, is amended to read:
270.20 		Subdivision 1.Ordinance. The governing body of a city may adopt an ordinance 
270.21 	establishing a special service district. Only property that is classified under section 273.13
270.22 	and used for commercial, industrial, or public utility purposes, or is vacant land zoned or 
270.23 	designated on a land use plan for commercial or industrial use and located in the special 
270.24 	service district, may be subject to the charges imposed by the city on the special service 
270.25 	district. Other types of property may be included within the boundaries of the special 
270.26 	service district but are not subject to the levies or charges imposed by the city on the 
270.27 	special service district. If 50 percent or more of the estimated market value of a parcel of 
270.28 	property is classified under section 273.13 as commercial, industrial, or vacant land zoned 
270.29 	or designated on a land use plan for commercial or industrial use, or public utility for the 
270.30 	current assessment year, then the entire taxable market value of the property is subject to a 
270.31 	service charge based on net tax capacity for purposes of sections 428A.01 to 428A.10. 
270.32 	The ordinance shall describe with particularity the area within the city to be included in 
270.33 	the district and the special services to be furnished in the district. The ordinance may not 
270.34 	be adopted until after a public hearing has been held on the question. Notice of the hearing 
270.35 	shall include the time and place of hearing, a map showing the boundaries of the proposed 
271.1 	district, and a statement that all persons owning property in the proposed district that 
271.2 	would be subject to a service charge will be given opportunity to be heard at the hearing. 
271.3 	Within 30 days after adoption of the ordinance under this subdivision, the governing body 
271.4 	shall send a copy of the ordinance to the commissioner of revenue.

271.5 	Sec. 68. Minnesota Statutes 2012, section 430.102, subdivision 2, is amended to read:
271.6 		Subd. 2.Council approval; special tax levy limitation. The council shall receive 
271.7 	and consider the estimate required in subdivision 1 and the items of cost after notice and 
271.8 	hearing before it or its appropriate committee as it considers necessary or expedient, and 
271.9 	shall approve the estimate, with necessary amendments. The amounts of each item of cost 
271.10 	estimated are then appropriated to operate, maintain, and improve the pedestrian mall 
271.11 	during the next fiscal year. The amount of the special tax to be charged under subdivision 
271.12 	1, clause (3), must not, however, exceed 0.12089 percent of estimated market value of 
271.13 	taxable property in the district. The council shall make any necessary adjustment in costs of 
271.14 	operating and maintaining the district to keep the amount of the tax within this limitation.

271.15 	Sec. 69. Minnesota Statutes 2012, section 447.10, is amended to read:
271.16 	447.10 TAX LEVY FOR OPERATING AND MAINTAINING HOSPITAL.
271.17 	The governing body of a city of the first class owning a hospital may annually levy 
271.18 	a tax to operate and maintain the hospital. The tax must not exceed 0.00806 percent of 
271.19 	taxable estimated market value.

271.20 	Sec. 70. Minnesota Statutes 2012, section 450.19, is amended to read:
271.21 	450.19 TOURIST CAMPING GROUNDS.
271.22 	A home rule charter or statutory city or town may establish and maintain public 
271.23 	tourist camping grounds. The governing body thereof may acquire by lease, purchase, or 
271.24 	gift, suitable lands located either within or without the corporate limits for use as public 
271.25 	tourist camping grounds and provide for the equipment, operation, and maintenance 
271.26 	of the same. The amount that may be expended for the maintenance, improvement, or 
271.27 	operation of tourist camping grounds shall not exceed, in any year, a sum equal to 0.00806 
271.28 	percent of taxable estimated market value.

271.29 	Sec. 71. Minnesota Statutes 2012, section 450.25, is amended to read:
271.30 	450.25 MUSEUM, GALLERY, OR SCHOOL OF ARTS OR CRAFTS; TAX 
271.31 	LEVY.
272.1 	After the acquisition of any museum, gallery, or school of arts or crafts, the board 
272.2 	of park commissioners of the city in which it is located shall cause to be included in the 
272.3 	annual tax levy upon all the taxable property of the county in which the museum, gallery, 
272.4 	or school of arts or crafts is located, a tax of 0.00846 percent of estimated market value. 
272.5 	The board shall certify the levy to the county auditor and it shall be added to, and collected 
272.6 	with and as part of, the general, real, and personal property taxes, with like penalties and 
272.7 	interest, in case of nonpayment and default, and all provisions of law in respect to the 
272.8 	levy, collection, and enforcement of other taxes shall, so far as applicable, be followed in 
272.9 	respect of these taxes. All of these taxes, penalties, and interest, when collected, shall be 
272.10 	paid to the city treasurer of the city in which is located the museum, gallery, or school 
272.11 	of arts or crafts and credited to a fund to be known as the park museum fund, and shall 
272.12 	be used only for the purposes specified in sections 450.23 to 450.25. Any part of the 
272.13 	proceeds of the levy not expended for the purposes specified in section 450.24 may be 
272.14 	used for the erection of new buildings for the same purposes.

272.15 	Sec. 72. Minnesota Statutes 2012, section 458A.10, is amended to read:
272.16 	458A.10 PROPERTY TAX.
272.17 	The commission shall annually levy a tax not to exceed 0.12089 percent of estimated 
272.18 	market value on all the taxable property in the transit area at a rate sufficient to produce 
272.19 	an amount necessary for the purposes of sections 458A.01 to 458A.15, other than the 
272.20 	payment of principal and interest due on any revenue bonds issued pursuant to section 
272.21 	458A.05. Property taxes levied under this section shall be certified by the commission to 
272.22 	the county auditors of the transit area, extended, assessed, and collected in the manner 
272.23 	provided by law for the property taxes levied by the governing bodies of cities. The 
272.24 	proceeds of the taxes levied under this section shall be remitted by the respective county 
272.25 	treasurers to the treasurer of the commission, who shall credit the same to the funds of 
272.26 	the commission for use for the purposes of sections 458A.01 to 458A.15 subject to any 
272.27 	applicable pledges or limitations on account of tax anticipation certificates or other 
272.28 	specific purposes. At any time after making a tax levy under this section and certifying 
272.29 	it to the county auditors, the commission may issue general obligation certificates of 
272.30 	indebtedness in anticipation of the collection of the taxes as provided by section 412.261.

272.31 	Sec. 73. Minnesota Statutes 2012, section 458A.31, subdivision 1, is amended to read:
272.32 		Subdivision 1.Levy limit. Notwithstanding anything to the contrary contained in 
272.33 	the charter of the city of Duluth, any ordinance thereof, or any statute applicable thereto, 
272.34 	limiting the amount levied in any one year for general or special purposes, the city council 
273.1 	of the city of Duluth shall each year levy a tax in an amount not to exceed 0.07253 
273.2 	percent of taxable estimated market value, by ordinance. An ordinance fixing the levy 
273.3 	shall take effect immediately upon its passage and approval. The proceeds of the levy 
273.4 	shall be paid into the city treasury and deposited in the operating fund provided for in 
273.5 	section 458A.24, subdivision 3.

273.6 	Sec. 74. Minnesota Statutes 2012, section 465.04, is amended to read:
273.7 	465.04 ACCEPTANCE OF GIFTS.
273.8 	Cities of the second, third, or fourth class, having at any time a an estimated
273.9 	 market value of not more than $41,000,000, exclusive of money and credits, as officially 
273.10 	equalized by the commissioner of revenue, either under home rule charter or under the 
273.11 	laws of this state, in addition to all other powers possessed by them, hereby are authorized 
273.12 	and empowered to receive and accept gifts and donations for the use and benefit of 
273.13 	such cities and the inhabitants thereof upon terms and conditions to be approved by the 
273.14 	governing bodies of such cities; and such cities are authorized to comply with and perform 
273.15 	such terms and conditions, which may include payment to the donor or donors of interest 
273.16 	on the value of the gift at not exceeding five percent per annum payable annually or 
273.17 	semiannually, during the remainder of the natural life or lives of such donor or donors.

273.18 	Sec. 75. Minnesota Statutes 2012, section 469.033, subdivision 6, is amended to read:
273.19 		Subd. 6.Operation area as taxing district, special tax. All of the territory included 
273.20 	within the area of operation of any authority shall constitute a taxing district for the 
273.21 	purpose of levying and collecting special benefit taxes as provided in this subdivision. All 
273.22 	of the taxable property, both real and personal, within that taxing district shall be deemed 
273.23 	to be benefited by projects to the extent of the special taxes levied under this subdivision. 
273.24 	Subject to the consent by resolution of the governing body of the city in and for which 
273.25 	it was created, an authority may levy a tax upon all taxable property within that taxing 
273.26 	district. The tax shall be extended, spread, and included with and as a part of the general 
273.27 	taxes for state, county, and municipal purposes by the county auditor, to be collected and 
273.28 	enforced therewith, together with the penalty, interest, and costs. As the tax, including any 
273.29 	penalties, interest, and costs, is collected by the county treasurer it shall be accumulated 
273.30 	and kept in a separate fund to be known as the "housing and redevelopment project fund." 
273.31 	The money in the fund shall be turned over to the authority at the same time and in the same 
273.32 	manner that the tax collections for the city are turned over to the city, and shall be expended 
273.33 	only for the purposes of sections 469.001 to 469.047. It shall be paid out upon vouchers 
273.34 	signed by the chair of the authority or an authorized representative. The amount of the 
274.1 	levy shall be an amount approved by the governing body of the city, but shall not exceed 
274.2 	0.0185 percent of taxable estimated market value. The authority shall each year formulate 
274.3 	and file a budget in accordance with the budget procedure of the city in the same manner as 
274.4 	required of executive departments of the city or, if no budgets are required to be filed, by 
274.5 	August 1. The amount of the tax levy for the following year shall be based on that budget.

274.6 	Sec. 76. Minnesota Statutes 2012, section 469.034, subdivision 2, is amended to read:
274.7 		Subd. 2.General obligation revenue bonds. (a) An authority may pledge the 
274.8 	general obligation of the general jurisdiction governmental unit as additional security for 
274.9 	bonds payable from income or revenues of the project or the authority. The authority 
274.10 	must find that the pledged revenues will equal or exceed 110 percent of the principal and 
274.11 	interest due on the bonds for each year. The proceeds of the bonds must be used for a 
274.12 	qualified housing development project or projects. The obligations must be issued and 
274.13 	sold in the manner and following the procedures provided by chapter 475, except the 
274.14 	obligations are not subject to approval by the electors, and the maturities may extend to 
274.15 	not more than 35 years for obligations sold to finance housing for the elderly and 40 years 
274.16 	for other obligations issued under this subdivision. The authority is the municipality for 
274.17 	purposes of chapter 475.
274.18 	(b) The principal amount of the issue must be approved by the governing body of 
274.19 	the general jurisdiction governmental unit whose general obligation is pledged. Public 
274.20 	hearings must be held on issuance of the obligations by both the authority and the general 
274.21 	jurisdiction governmental unit. The hearings must be held at least 15 days, but not more 
274.22 	than 120 days, before the sale of the obligations.
274.23 	(c) The maximum amount of general obligation bonds that may be issued and 
274.24 	outstanding under this section equals the greater of (1) one-half of one percent of the 
274.25 	taxable estimated market value of the general jurisdiction governmental unit whose 
274.26 	general obligation is pledged, or (2) $3,000,000. In the case of county or multicounty 
274.27 	general obligation bonds, the outstanding general obligation bonds of all cities in the 
274.28 	county or counties issued under this subdivision must be added in calculating the limit 
274.29 	under clause (1).
274.30 	(d) "General jurisdiction governmental unit" means the city in which the housing 
274.31 	development project is located. In the case of a county or multicounty authority, the 
274.32 	county or counties may act as the general jurisdiction governmental unit. In the case of 
274.33 	a multicounty authority, the pledge of the general obligation is a pledge of a tax on the 
274.34 	taxable property in each of the counties.
275.1 	(e) "Qualified housing development project" means a housing development project 
275.2 	providing housing either for the elderly or for individuals and families with incomes not 
275.3 	greater than 80 percent of the median family income as estimated by the United States 
275.4 	Department of Housing and Urban Development for the standard metropolitan statistical 
275.5 	area or the nonmetropolitan county in which the project is located. The project must be 
275.6 	owned for the term of the bonds either by the authority or by a limited partnership or other 
275.7 	entity in which the authority or another entity under the sole control of the authority is 
275.8 	the sole general partner and the partnership or other entity must receive (1) an allocation 
275.9 	from the Department of Management and Budget or an entitlement issuer of tax-exempt 
275.10 	bonding authority for the project and a preliminary determination by the Minnesota 
275.11 	Housing Finance Agency or the applicable suballocator of tax credits that the project 
275.12 	will qualify for four percent low-income housing tax credits or (2) a reservation of nine 
275.13 	percent low-income housing tax credits from the Minnesota Housing Finance Agency or a 
275.14 	suballocator of tax credits for the project. A qualified housing development project may 
275.15 	admit nonelderly individuals and families with higher incomes if:
275.16 	(1) three years have passed since initial occupancy;
275.17 	(2) the authority finds the project is experiencing unanticipated vacancies resulting in 
275.18 	insufficient revenues, because of changes in population or other unforeseen circumstances 
275.19 	that occurred after the initial finding of adequate revenues; and
275.20 	(3) the authority finds a tax levy or payment from general assets of the general 
275.21 	jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher 
275.22 	income individuals or families are not admitted.
275.23 	(f) The authority may issue bonds to refund bonds issued under this subdivision in 
275.24 	accordance with section 475.67. The finding of the adequacy of pledged revenues required 
275.25 	by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the 
275.26 	issuance of refunding bonds. This paragraph applies to refunding bonds issued on and 
275.27 	after July 1, 1992.

275.28 	Sec. 77. Minnesota Statutes 2012, section 469.053, subdivision 4, is amended to read:
275.29 		Subd. 4.Mandatory city levy. A city shall, at the request of the port authority, levy 
275.30 	a tax in any year for the benefit of the port authority. The tax must not exceed 0.01813 
275.31 	percent of taxable estimated market value. The amount levied must be paid by the city 
275.32 	treasurer to the treasurer of the port authority, to be spent by the authority.

275.33 	Sec. 78. Minnesota Statutes 2012, section 469.053, subdivision 4a, is amended to read:
276.1 		Subd. 4a.Seaway port authority levy. A levy made under this subdivision shall 
276.2 	replace the mandatory city levy under subdivision 4. A seaway port authority is a special 
276.3 	taxing district under section 275.066 and may levy a tax in any year for the benefit of the 
276.4 	seaway port authority. The tax must not exceed 0.01813 percent of taxable estimated
276.5 	 market value. The county auditor shall distribute the proceeds of the property tax levy to 
276.6 	the seaway port authority.

276.7 	Sec. 79. Minnesota Statutes 2012, section 469.053, subdivision 6, is amended to read:
276.8 		Subd. 6.Discretionary city levy. Upon request of a port authority, the port 
276.9 	authority's city may levy a tax to be spent by and for its port authority. The tax must 
276.10 	enable the port authority to carry out efficiently and in the public interest sections 469.048
276.11 	to 469.068 to create and develop industrial development districts. The levy must not be 
276.12 	more than 0.00282 percent of taxable estimated market value. The county treasurer shall 
276.13 	pay the proceeds of the tax to the port authority treasurer. The money may be spent by 
276.14 	the authority in performance of its duties to create and develop industrial development 
276.15 	districts. In spending the money the authority must judge what best serves the public 
276.16 	interest. The levy in this subdivision is in addition to the levy in subdivision 4.

276.17 	Sec. 80. Minnesota Statutes 2012, section 469.107, subdivision 1, is amended to read:
276.18 		Subdivision 1.City tax levy. A city may, at the request of the authority, levy a tax in 
276.19 	any year for the benefit of the authority. The tax must be not more than 0.01813 percent of 
276.20 	taxable estimated market value. The amount levied must be paid by the city treasurer to 
276.21 	the treasurer of the authority, to be spent by the authority.

276.22 	Sec. 81. Minnesota Statutes 2012, section 469.180, subdivision 2, is amended to read:
276.23 		Subd. 2.Tax levies. Notwithstanding any law, the county board of any county may 
276.24 	appropriate from the general revenue fund a sum not to exceed a county levy of 0.00080 
276.25 	percent of taxable estimated market value to carry out the purposes of this section.

276.26 	Sec. 82. Minnesota Statutes 2012, section 469.187, is amended to read:
276.27 	469.187 FIRST CLASS CITY SPENDING FOR PUBLICITY; PUBLICITY 
276.28 	BOARD.
276.29 	Any city of the first class may expend money for city publicity purposes. The city may 
276.30 	levy a tax, not exceeding 0.00080 percent of taxable estimated market value. The proceeds 
276.31 	of the levy shall be expended in the manner and for the city publicity purposes the council 
277.1 	directs. The council may establish and provide for a publicity board or bureau to administer 
277.2 	the fund, subject to the conditions and limitations the council prescribes by ordinance.

277.3 	Sec. 83. Minnesota Statutes 2012, section 469.206, is amended to read:
277.4 	469.206 HAZARDOUS PROPERTY PENALTY.
277.5 	A city may assess a penalty up to one percent of the estimated market value of 
277.6 	real property, including any building located within the city that the city determines to 
277.7 	be hazardous as defined in section 463.15, subdivision 3. The city shall send a written 
277.8 	notice to the address to which the property tax statement is sent at least 90 days before it 
277.9 	may assess the penalty. If the owner of the property has not paid the penalty or fixed the 
277.10 	property within 90 days after receiving notice of the penalty, the penalty is considered 
277.11 	delinquent and is increased by 25 percent each 60 days the penalty is not paid and the 
277.12 	property remains hazardous. For the purposes of this section, a penalty that is delinquent 
277.13 	is considered a delinquent property tax and subject to chapters 279, 280, and 281, in the 
277.14 	same manner as delinquent property taxes.

277.15 	Sec. 84. Minnesota Statutes 2012, section 471.24, is amended to read:
277.16 	471.24 TOWNS, STATUTORY CITIES; JOINT MAINTENANCE OF 
277.17 	CEMETERY.
277.18 	Where a statutory city or town owns and maintains an established cemetery or burial 
277.19 	ground, either within or without the municipal limits, the statutory city or town may, by 
277.20 	mutual agreement with contiguous statutory cities and towns, each having a an estimated
277.21 	 market value of not less than $2,000,000, join together in the maintenance of such public 
277.22 	cemetery or burial ground for the use of the inhabitants of each of such municipalities; and 
277.23 	each such municipality is hereby authorized, by action of its council or governing body, 
277.24 	to levy a tax or make an appropriation for the annual support and maintenance of such 
277.25 	cemetery or burial ground; provided, the amount thus appropriated by each municipality 
277.26 	shall not exceed a total of $10,000 in any one year.

277.27 	Sec. 85. Minnesota Statutes 2012, section 471.571, subdivision 1, is amended to read:
277.28 		Subdivision 1.Application. This section applies to each city in which the net tax 
277.29 	capacity of real and personal property consists in part of iron ore or lands containing 
277.30 	taconite or semitaconite and in which the total taxable estimated market value of real 
277.31 	and personal property exceeds $2,500,000.

277.32 	Sec. 86. Minnesota Statutes 2012, section 471.571, subdivision 2, is amended to read:
278.1 		Subd. 2.Creation of fund, tax levy. The governing body of the city may create a 
278.2 	permanent improvement and replacement fund to be maintained by an annual tax levy. 
278.3 	The governing body may levy a tax in excess of any charter limitation for the support of 
278.4 	the permanent improvement and replacement fund, but not exceeding the following:
278.5 	(a) in cities having a population of not more than 500 inhabitants, the lesser of $20 
278.6 	per capita or 0.08059 percent of taxable estimated market value;
278.7 	(b) in cities having a population of more than 500 and less than 2500 2,500, the 
278.8 	greater of $12.50 per capita or $10,000 but not exceeding 0.08059 percent of taxable
278.9 	 estimated market value;
278.10 	(c) in cities having a population of more than 2500 2,500 or more inhabitants, 
278.11 	the greater of $10 per capita or $31,500 but not exceeding 0.08059 percent of taxable
278.12 	 estimated market value.

278.13 	Sec. 87. Minnesota Statutes 2012, section 471.73, is amended to read:
278.14 	471.73 ACCEPTANCE OF PROVISIONS.
278.15 	In the case of any city within the class specified in section471.72 having a an 
278.16 	estimated market value, as defined in section 471.72, in excess of $37,000,000; and in the 
278.17 	case of any statutory city within such class having a an estimated market value, as defined 
278.18 	in section 471.72, of less than $5,000,000; and in the case of any statutory city within such 
278.19 	class which is governed by Laws 1933, chapter 211, or Laws 1937, chapter 356; and in 
278.20 	the case of any statutory city within such class which is governed by Laws 1929, chapter 
278.21 	208, and has a an estimated market value of less than $83,000,000; and in the case of 
278.22 	any school district within such class having a an estimated market value, as defined in 
278.23 	section 471.72, of more than $54,000,000; and in the case of all towns within said class; 
278.24 	sections 471.71 to 471.83 apply only if the governing body of the city or statutory city, the 
278.25 	board of the school district, or the town board of the town shall have adopted a resolution 
278.26 	determining to issue bonds under the provisions of sections 471.71 to 471.83 or to go 
278.27 	upon a cash basis in accordance with the provisions thereof.

278.28 	Sec. 88. Minnesota Statutes 2012, section 473.325, subdivision 2, is amended to read:
278.29 		Subd. 2.Chapter 475 applies; exceptions. The Metropolitan Council shall sell and 
278.30 	issue the bonds in the manner provided in chapter 475, and shall have the same powers 
278.31 	and duties as a municipality issuing bonds under that law, except that the approval of a 
278.32 	majority of the electors shall not be required and the net debt limitations shall not apply. 
278.33 	The terms of each series of bonds shall be fixed so that the amount of principal and interest 
278.34 	on all outstanding and undischarged bonds, together with the bonds proposed to be issued, 
279.1 	due in any year shall not exceed 0.01209 percent of estimated market value of all taxable 
279.2 	property in the metropolitan area as last finally equalized prior to a proposed issue. The 
279.3 	bonds shall be secured in accordance with section 475.61, subdivision 1, and any taxes 
279.4 	required for their payment shall be levied by the council, shall not affect the amount or rate 
279.5 	of taxes which may be levied by the council for other purposes, shall be spread against all 
279.6 	taxable property in the metropolitan area and shall not be subject to limitation as to rate or 
279.7 	amount. Any taxes certified by the council to the county auditors for collection shall be 
279.8 	reduced by the amount received by the council from the commissioner of management and 
279.9 	budget or the federal government for the purpose of paying the principal and interest on 
279.10 	bonds to which the levy relates. The council shall certify the fact and amount of all money 
279.11 	so received to the county auditors, and the auditors shall reduce the levies previously made 
279.12 	for the bonds in the manner and to the extent provided in section 475.61, subdivision 3.

279.13 	Sec. 89. Minnesota Statutes 2012, section 473.629, is amended to read:
279.14 	473.629 VALUE OF PROPERTY FOR BOND ISSUES BY SCHOOL 
279.15 	DISTRICTS.
279.16 	As to any lands to be detached from any school district under the provisions hereof
279.17 	 section 473.625, notwithstanding such prospective the detachment, the estimated market 
279.18 	value of such the detached lands and the net tax capacity of taxable properties now located 
279.19 	therein or thereon shall be and on the lands on the date of the detachment constitute 
279.20 	from and after the date of the enactment hereof a part of the estimated market value of 
279.21 	properties upon the basis of which such used to calculate the net debt limit of the school 
279.22 	district may issue its bonds,. The value of such the lands for such purpose to be and other 
279.23 	taxable properties for purposes of the school district's net debt limit are 33-1/3 percent of 
279.24 	the estimated market value thereof as determined and certified by said the assessor to said
279.25 	 the school district, and it shall be the duty of such the assessor annually on or before the 
279.26 	tenth day of October from and after the passage hereof, to so of each year, shall determine 
279.27 	and certify that value; provided, however, that the value of such the detached lands and 
279.28 	such taxable properties shall never exceed 20 percent of the estimated market value of 
279.29 	all properties constituting and making up the basis aforesaid used to calculate the net 
279.30 	debt limit of the school district.

279.31 	Sec. 90. Minnesota Statutes 2012, section 473.661, subdivision 3, is amended to read:
279.32 		Subd. 3.Levy limit. In any budget certified by the commissioners under this section, 
279.33 	the amount included for operation and maintenance shall not exceed an amount which, 
279.34 	when extended against the property taxable therefor under section 473.621, subdivision 5, 
280.1 	will require a levy at a rate of 0.00806 percent of estimated market value. Taxes levied by 
280.2 	the corporation shall not affect the amount or rate of taxes which may be levied by any other 
280.3 	local government unit within the metropolitan area under the provisions of any charter.

280.4 	Sec. 91. Minnesota Statutes 2012, section 473.667, subdivision 9, is amended to read:
280.5 		Subd. 9.Additional taxes. Nothing herein shall prevent the commission from 
280.6 	levying a tax not to exceed 0.00121 percent of estimated market value on taxable property 
280.7 	within its taxing jurisdiction, in addition to any levies found necessary for the debt 
280.8 	service fund authorized by section 473.671. Nothing herein shall prevent the levy and 
280.9 	appropriation for purposes of the commission of any other tax on property or on any 
280.10 	income, transaction, or privilege, when and if authorized by law. All collections of any 
280.11 	taxes so levied shall be included in the revenues appropriated for the purposes referred 
280.12 	to in this section, unless otherwise provided in the law authorizing the levies; but no 
280.13 	covenant as to the continuance or as to the rate and amount of any such levy shall be made 
280.14 	with the holders of the commission's bonds unless specifically authorized by law.

280.15 	Sec. 92. Minnesota Statutes 2012, section 473.671, is amended to read:
280.16 	473.671 LIMIT OF TAX LEVY.
280.17 	The taxes levied against the property of the metropolitan area in any one year shall 
280.18 	not exceed 0.00806 percent of taxable estimated market value, exclusive of taxes levied 
280.19 	to pay the principal or interest on any bonds or indebtedness of the city issued under 
280.20 	Laws 1943, chapter 500, and exclusive of any taxes levied to pay the share of the city for 
280.21 	payments on bonded indebtedness of the corporation provided for in Laws 1943, chapter 
280.22 	500. The levy of taxes authorized in Laws 1943, chapter 500, shall be in addition to the 
280.23 	maximum rate allowed to be levied to defray the cost of government under the provisions 
280.24 	of the charter of any city affected by Laws 1943, chapter 500.

280.25 	Sec. 93. Minnesota Statutes 2012, section 473.711, subdivision 2a, is amended to read:
280.26 		Subd. 2a.Tax levy. (a) The commission may levy a tax on all taxable property in the 
280.27 	district as defined in section 473.702 to provide funds for the purposes of sections 473.701
280.28 	to 473.716. The tax shall not exceed the property tax levy limitation determined in this 
280.29 	subdivision. A participating county may agree to levy an additional tax to be used by the 
280.30 	commission for the purposes of sections 473.701 to 473.716 but the sum of the county's and 
280.31 	commission's taxes may not exceed the county's proportionate share of the property tax levy 
280.32 	limitation determined under this subdivision based on the ratio of its total net tax capacity 
280.33 	to the total net tax capacity of the entire district as adjusted by section 270.12, subdivision 
281.1 	3. The auditor of each county in the district shall add the amount of the levy made by the 
281.2 	district to other taxes of the county for collection by the county treasurer with other taxes. 
281.3 	When collected, the county treasurer shall make settlement of the tax with the district in 
281.4 	the same manner as other taxes are distributed to political subdivisions. No county shall 
281.5 	levy any tax for mosquito, disease vectoring tick, and black gnat (Simuliidae) control 
281.6 	except under this section. The levy shall be in addition to other taxes authorized by law.
281.7 	(b) The property tax levied by the Metropolitan Mosquito Control Commission shall 
281.8 	not exceed the product of (i) the commission's property tax levy limitation for the previous 
281.9 	year determined under this subdivision multiplied by (ii) an index for market valuation 
281.10 	changes equal to the total estimated market valuation value of all taxable property for the 
281.11 	current tax payable year located within the district plus any area that has been added to the 
281.12 	district since the previous year, divided by the total estimated market valuation value of all 
281.13 	taxable property located within the district for the previous taxes payable year.
281.14 	(c) For the purpose of determining the commission's property tax levy limitation 
281.15 	under this subdivision, "total market valuation" means the total market valuation of all 
281.16 	taxable property within the district without valuation adjustments for fiscal disparities 
281.17 	(chapter 473F), tax increment financing (sections 469.174 to 469.179), and high voltage 
281.18 	transmission lines (section 273.425).

281.19 	Sec. 94. Minnesota Statutes 2012, section 473F.02, subdivision 12, is amended to read:
281.20 		Subd. 12.Adjusted market value. "Adjusted market value" of real and personal 
281.21 	property within a municipality means the assessor's estimated taxable market value, 
281.22 	as defined in section 272.03, of all real and personal property, including the value of 
281.23 	manufactured housing, within the municipality, adjusted for sales ratios in a manner 
281.24 	similar to the adjustments made to city and town net tax capacities. For purposes 
281.25 	of sections 473F.01 to 473F.13, the commissioner of revenue shall annually make 
281.26 	determinations and reports with respect to each municipality which are comparable to 
281.27 	those it makes for school districts under section 127A.48, subdivisions 1 to 6, in the same 
281.28 	manner and at the same times as are prescribed by the subdivisions. The commissioner 
281.29 	of revenue shall annually determine, for each municipality, information comparable to 
281.30 	that required by section 475.53, subdivision 4, for school districts, as soon as practicable 
281.31 	after it becomes available. The commissioner of revenue shall then compute the equalized 
281.32 	market value of property within each municipality using the aggregate sales ratios from 
281.33 	the Department of Revenue's sales ratio study.

281.34 	Sec. 95. Minnesota Statutes 2012, section 473F.02, subdivision 14, is amended to read:
282.1 		Subd. 14.Fiscal capacity. "Fiscal capacity" of a municipality means its valuation
282.2 	 adjusted market value, determined as of January 2 of any year, divided by its population, 
282.3 	determined as of a date in the same year.

282.4 	Sec. 96. Minnesota Statutes 2012, section 473F.02, subdivision 15, is amended to read:
282.5 		Subd. 15.Average fiscal capacity. "Average fiscal capacity" of municipalities 
282.6 	means the sum of the valuations adjusted market values of all municipalities, determined 
282.7 	as of January 2 of any year, divided by the sum of their populations, determined as of 
282.8 	a date in the same year.

282.9 	Sec. 97. Minnesota Statutes 2012, section 473F.02, subdivision 23, is amended to read:
282.10 		Subd. 23.Net tax capacity. "Net tax capacity" means the taxable market value of 
282.11 	real and personal property multiplied by its net tax capacity rates in section 273.13.

282.12 	Sec. 98. Minnesota Statutes 2012, section 473F.08, subdivision 10, is amended to read:
282.13 		Subd. 10.Adjustment of value or net tax capacity. For the purpose of computing 
282.14 	the amount or rate of any salary, aid, tax, or debt authorized, required, or limited by any 
282.15 	provision of any law or charter, where such authorization, requirement, or limitation 
282.16 	is related in any manner to any value or valuation of taxable property within any 
282.17 	governmental unit, such value or net tax capacity fiscal capacity under section 473F.02, 
282.18 	subdivision 14, a municipality's taxable market value shall be adjusted to reflect the 
282.19 	adjustments reductions to net tax capacity effected by subdivision 2, clause (a), provided 
282.20 	that: (1) in determining the taxable market value of commercial-industrial property 
282.21 	or any class thereof within a governmental unit for any purpose other than section 
282.22 	473F.07 municipality, (a) the reduction required by this subdivision shall be that amount 
282.23 	which bears the same proportion to the amount subtracted from the governmental unit's
282.24 	 municipality's net tax capacity pursuant to subdivision 2, clause (a), as the taxable 
282.25 	market value of commercial-industrial property, or such class thereof, located within the 
282.26 	governmental unit municipality bears to the net tax capacity of commercial-industrial 
282.27 	property, or such class thereof, located within the governmental unit, and (b) the increase 
282.28 	required by this subdivision shall be that amount which bears the same proportion to 
282.29 	the amount added to the governmental unit's net tax capacity pursuant to subdivision 2, 
282.30 	clause (b), as the market value of commercial-industrial property, or such class thereof, 
282.31 	located within the governmental unit bears to the net tax capacity of commercial-industrial 
282.32 	property, or such class thereof, located within the governmental unit; and (2) in determining 
282.33 	the market value of real property within a municipality for purposes of section 473F.07, 
283.1 	the adjustment prescribed by clause (1)(a) hereof shall be made and that prescribed by 
283.2 	clause (1)(b) hereof shall not be made municipality. No adjustment shall be made to 
283.3 	taxable market value for the increase in net tax capacity under subdivision 2, clause (b).

283.4 	Sec. 99. Minnesota Statutes 2012, section 475.521, subdivision 4, is amended to read:
283.5 		Subd. 4.Limitations on amount. A municipality may not issue bonds under this 
283.6 	section if the maximum amount of principal and interest to become due in any year on 
283.7 	all the outstanding bonds issued under this section, including the bonds to be issued, 
283.8 	will equal or exceed 0.16 percent of the taxable estimated market value of property 
283.9 	in the municipality. Calculation of the limit must be made using the taxable estimated
283.10 	 market value for the taxes payable year in which the obligations are issued and sold. In 
283.11 	the case of a municipality with a population of 2,500 or more, the bonds are subject to 
283.12 	the net debt limits under section 475.53. In the case of a shared facility in which more 
283.13 	than one municipality participates, upon compliance by each participating municipality 
283.14 	with the requirements of subdivision 2, the limitations in this subdivision and the net debt 
283.15 	represented by the bonds shall be allocated to each participating municipality in proportion 
283.16 	to its required financial contribution to the financing of the shared facility, as set forth in 
283.17 	the joint powers agreement relating to the shared facility. This section does not limit the 
283.18 	authority to issue bonds under any other special or general law.

283.19 	Sec. 100. Minnesota Statutes 2012, section 475.53, subdivision 1, is amended to read:
283.20 		Subdivision 1.Generally. Except as otherwise provided in sections 475.51 to 
283.21 	475.74, no municipality, except a school district or a city of the first class, shall incur or be 
283.22 	subject to a net debt in excess of three percent of the estimated market value of taxable 
283.23 	property in the municipality.

283.24 	Sec. 101. Minnesota Statutes 2012, section 475.53, subdivision 3, is amended to read:
283.25 		Subd. 3.Cities first class. Unless its charter permits a greater net debt a city of 
283.26 	the first class may not incur a net debt in excess of two percent of the estimated market 
283.27 	value of all taxable property therein. If the charter of the city permits a net debt of the city 
283.28 	in excess of two percent of its valuation, it may not incur a net debt in excess of 3-2/3 
283.29 	percent of the estimated market value of the taxable property therein.
283.30 	The county auditor, at the time of preparing the tax list of the city, shall compile a 
283.31 	statement setting forth the total net tax capacity and the total estimated market value of 
283.32 	each class of taxable property in such city for such year.

284.1 	Sec. 102. Minnesota Statutes 2012, section 475.53, subdivision 4, is amended to read:
284.2 		Subd. 4.School districts. Except as otherwise provided by law, no school district 
284.3 	shall be subject to a net debt in excess of 15 percent of the actual estimated market value of 
284.4 	all taxable property situated within its corporate limits, as computed in accordance with this 
284.5 	subdivision. The county auditor of each county containing taxable real or personal property 
284.6 	situated within any school district shall certify to the district upon request the estimated 
284.7 	market value of all such property. Whenever the commissioner of revenue, in accordance 
284.8 	with section 127A.48, subdivisions 1 to 6, has determined that the net tax capacity of any 
284.9 	district furnished by county auditors is not based upon the adjusted market value of taxable 
284.10 	property in the district exceeds the estimated market value of property within the district, 
284.11 	the commissioner of revenue shall certify to the district upon request the ratio most recently 
284.12 	ascertained to exist between such the estimated market value and the actual adjusted
284.13 	 market value of property within the district., and the actual market value of property 
284.14 	within a district, on which its debt limit under this subdivision is will be based, is (a) the 
284.15 	value certified by the county auditors, or (b) this on the estimated market value divided by 
284.16 	the ratio certified by the commissioner of revenue, whichever results in a higher value.

284.17 	Sec. 103. Minnesota Statutes 2012, section 475.58, subdivision 2, is amended to read:
284.18 		Subd. 2.Funding, refunding. Any county, city, town, or school district whose 
284.19 	outstanding gross debt, including all items referred to in section 475.51, subdivision 
284.20 	4, exceed in amount 1.62 percent of its estimated market value may issue bonds under 
284.21 	this subdivision for the purpose of funding or refunding such indebtedness or any part 
284.22 	thereof. A list of the items of indebtedness to be funded or refunded shall be made by the 
284.23 	recording officer and treasurer and filed in the office of the recording officer. The initial 
284.24 	resolution of the governing body shall refer to this subdivision as authority for the issue, 
284.25 	state the amount of bonds to be issued and refer to the list of indebtedness to be funded or 
284.26 	refunded. This resolution shall be published once each week for two successive weeks 
284.27 	in a legal newspaper published in the municipality or if there be no such newspaper, in 
284.28 	a legal newspaper published in the county seat. Such bonds may be issued without the 
284.29 	submission of the question of their issue to the electors unless within ten days after the 
284.30 	second publication of the resolution a petition requesting such election signed by ten or 
284.31 	more voters who are taxpayers of the municipality, shall be filed with the recording officer. 
284.32 	In event such petition is filed, no bonds shall be issued hereunder unless authorized by a 
284.33 	majority of the electors voting on the question.

284.34 	Sec. 104. Minnesota Statutes 2012, section 475.73, subdivision 1, is amended to read:
285.1 		Subdivision 1.May purchase these bonds; conditions. Obligations sold under the 
285.2 	provisions of section 475.60 may be purchased by the State Board of Investment if the 
285.3 	obligations meet the requirements of section 11A.24, subdivision 2, upon the approval of 
285.4 	the attorney general as to form and execution of the application therefor, and under rules 
285.5 	as the board may specify, and the state board shall have authority to purchase the same 
285.6 	to an amount not exceeding 3.63 percent of the estimated market value of the taxable 
285.7 	property of the municipality, according to the last preceding assessment. The obligations 
285.8 	shall not run for a shorter period than one year, nor for a longer period than 30 years and 
285.9 	shall bear interest at a rate to be fixed by the state board but not less than two percent per 
285.10 	annum. Forthwith upon the delivery to the state of Minnesota of any obligations issued by 
285.11 	virtue thereof, the commissioner of management and budget shall certify to the respective 
285.12 	auditors of the various counties wherein are situated the municipalities issuing the same, 
285.13 	the number, denomination, amount, rate of interest and date of maturity of each obligation.

285.14 	Sec. 105. Minnesota Statutes 2012, section 477A.011, subdivision 20, is amended to 
285.15 	read:
285.16 		Subd. 20.City net tax capacity. "City net tax capacity" means (1) the net tax 
285.17 	capacity computed using the net tax capacity rates in section 273.13 for taxes payable 
285.18 	in the year of the aid distribution, and the market values, after the exclusion in section 
285.19 	273.13, subdivision 35, for taxes payable in the year prior to the aid distribution plus (2) 
285.20 	a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2, 
285.21 	paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior 
285.22 	to that for which aids are being calculated. The market value utilized in computing city 
285.23 	net tax capacity shall be reduced by the sum of (1) a city's market value of commercial 
285.24 	industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3, 
285.25 	multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph 
285.26 	(a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value 
285.27 	of tax increment financing districts as defined in section 469.177, subdivision 2, and (3) 
285.28 	the market value of transmission lines deducted from a city's total net tax capacity under 
285.29 	section 273.425. The city net tax capacity will be computed using equalized market values
285.30 	 the city's adjusted net tax capacity under section 273.1325.

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

285.32 	Sec. 106. Minnesota Statutes 2012, section 477A.011, subdivision 32, is amended to 
285.33 	read:
286.1 		Subd. 32.Commercial industrial percentage. "Commercial industrial percentage" 
286.2 	for a city is 100 times the sum of the estimated market values of all real property in the 
286.3 	city classified as class 3 under section 273.13, subdivision 24, excluding public utility 
286.4 	property, to the total estimated market value of all taxable real and personal property in 
286.5 	the city. The estimated market values are the amounts computed before any adjustments 
286.6 	for fiscal disparities under section 276A.06 or 473F.08. The estimated market values 
286.7 	used for this subdivision are not equalized.

286.8 	EFFECTIVE DATE. This section is effective for aids payable in 2014 and thereafter.

286.9 	Sec. 107. Minnesota Statutes 2012, section 477A.0124, subdivision 2, is amended to 
286.10 	read:
286.11 		Subd. 2.Definitions. (a) For the purposes of this section, the following terms 
286.12 	have the meanings given them.
286.13 	(b) "County program aid" means the sum of "county need aid," "county tax base 
286.14 	equalization aid," and "county transition aid."
286.15 	(c) "Age-adjusted population" means a county's population multiplied by the county 
286.16 	age index.
286.17 	(d) "County age index" means the percentage of the population over age 65 within 
286.18 	the county divided by the percentage of the population over age 65 within the state, except 
286.19 	that the age index for any county may not be greater than 1.8 nor less than 0.8.
286.20 	(e) "Population over age 65" means the population over age 65 established as of 
286.21 	July 15 in an aid calculation year by the most recent federal census, by a special census 
286.22 	conducted under contract with the United States Bureau of the Census, by a population 
286.23 	estimate made by the Metropolitan Council, or by a population estimate of the state 
286.24 	demographer made pursuant to section 4A.02, whichever is the most recent as to the stated 
286.25 	date of the count or estimate for the preceding calendar year and which has been certified 
286.26 	to the commissioner of revenue on or before July 15 of the aid calculation year. A revision 
286.27 	to an estimate or count is effective for these purposes only if certified to the commissioner 
286.28 	on or before July 15 of the aid calculation year. Clerical errors in the certification or use of 
286.29 	estimates and counts established as of July 15 in the aid calculation year are subject to 
286.30 	correction within the time periods allowed under section 477A.014.
286.31 	(f) "Part I crimes" means the three-year average annual number of Part I crimes 
286.32 	reported for each county by the Department of Public Safety for the most recent years 
286.33 	available. By July 1 of each year, the commissioner of public safety shall certify to the 
286.34 	commissioner of revenue the number of Part I crimes reported for each county for the 
286.35 	three most recent calendar years available.
287.1 	(g) "Households receiving food stamps" means the average monthly number of 
287.2 	households receiving food stamps for the three most recent years for which data is 
287.3 	available. By July 1 of each year, the commissioner of human services must certify to the 
287.4 	commissioner of revenue the average monthly number of households in the state and in 
287.5 	each county that receive food stamps, for the three most recent calendar years available.
287.6 	(h) "County net tax capacity" means the net tax capacity of the county, computed 
287.7 	analogously to city net tax capacity under section 477A.011, subdivision 20 county's 
287.8 	adjusted net tax capacity under section 273.1325.

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

287.10 	Sec. 108. Minnesota Statutes 2012, section 641.23, is amended to read:
287.11 	641.23 FUNDS; HOW PROVIDED.
287.12 	Before any contract is made for the erection of a county jail, sheriff's residence, or 
287.13 	both, the county board shall either levy a sufficient tax to provide the necessary funds, or 
287.14 	issue county bonds therefor in accordance with the provisions of chapter 475, provided 
287.15 	that no election is required if the amount of all bonds issued for this purpose and interest 
287.16 	on them which are due and payable in any year does not exceed an amount equal to 
287.17 	0.09671 percent of estimated market value of taxable property within the county, as last 
287.18 	determined before the bonds are issued.

287.19 	Sec. 109. Minnesota Statutes 2012, section 641.24, is amended to read:
287.20 	641.24 LEASING.
287.21 	The county may, by resolution of the county board, enter into a lease agreement with 
287.22 	any statutory or home rule charter city situated within the county, or a county housing and 
287.23 	redevelopment authority established pursuant to chapter 469 or any special law whereby 
287.24 	the city or county housing and redevelopment authority will construct a jail or other law 
287.25 	enforcement facilities for the county sheriff, deputy sheriffs, and other employees of the 
287.26 	sheriff and other law enforcement agencies, in accordance with plans prepared by or at 
287.27 	the request of the county board and, when required, approved by the commissioner of 
287.28 	corrections and will finance it by the issuance of revenue bonds, and the county may lease 
287.29 	the site and improvements for a term and upon rentals sufficient to produce revenue for the 
287.30 	prompt payment of the bonds and all interest accruing thereon and, upon completion of 
287.31 	payment, will acquire title thereto. The real and personal property acquired for the jail 
287.32 	shall constitute a project and the lease agreement shall constitute a revenue agreement 
287.33 	as contemplated in chapter 469, and all proceedings shall be taken by the city or county 
288.1 	housing and redevelopment authority and the county in the manner and with the force and 
288.2 	effect provided in chapter 469; provided that:
288.3 	(1) no tax shall be imposed upon or in lieu of a tax upon the property;
288.4 	(2) the approval of the project by the commissioner of commerce shall not be required;
288.5 	(3) the Department of Corrections shall be furnished and shall record such 
288.6 	information concerning each project as it may prescribe;
288.7 	(4) the rentals required to be paid under the lease agreement shall not exceed in any 
288.8 	year one-tenth of one percent of the estimated market value of property within the county, 
288.9 	as last finally equalized before the execution of the agreement;
288.10 	(5) the county board shall provide for the payment of all rentals due during the term 
288.11 	of the lease, in the manner required in section 641.264, subdivision 2;
288.12 	(6) no mortgage on the property shall be granted for the security of the bonds, but 
288.13 	compliance with clause (5) hereof may be enforced as a nondiscretionary duty of the 
288.14 	county board; and
288.15 	(7) the county board may sublease any part of the jail property for purposes consistent 
288.16 	with the maintenance and operation of a county jail or other law enforcement facility.

288.17 	Sec. 110. Minnesota Statutes 2012, section 645.44, is amended by adding a subdivision 
288.18 	to read:
288.19 		Subd. 20.Estimated market value. When used in determining or calculating a 
288.20 	limit on taxation, spending, state aid amounts, or debt, bond, certificate of indebtedness, or 
288.21 	capital note issuance by or for a local government unit, "estimated market value" has the 
288.22 	meaning given in section 273.032.

288.23 	Sec. 111. REVISOR'S INSTRUCTION.
 288.24 	The revisor of statutes shall recodify Minnesota Statutes, section 127.48, 
288.25 	subdivisions 1 to 6, as section 273.1325, subdivisions 1 to 6, and change all 
288.26 	cross-references to the affected subdivisions accordingly.

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

288.28 	Sec. 112.  REPEALER.
 288.29 	Minnesota Statutes 2012, sections 276A.01, subdivision 11; 473F.02, subdivision 
288.30 	13; and 477A.011, subdivision 21, are repealed.

288.31 	Sec. 113. EFFECTIVE DATE.
 289.1 	Unless otherwise specifically provided, this article is effective the day following 
289.2 	final enactment for purposes of limits on net debt, the issuance of bonds, certificates of 
289.3 	indebtedness, and capital notes and is effective beginning for taxes payable in 2014 for 
289.4 	all other purposes.

289.5 	ARTICLE 15
289.6 	DEPARTMENT OF REVENUE INCOME AND FRANCHISE 
289.7 	TAXES; ESTATE TAXES

289.8 	Section 1. Minnesota Statutes 2012, section 289A.10, is amended by adding a 
289.9 	subdivision to read:
289.10 		Subd. 1a.Recapture tax return required. If a disposition or cessation as provided 
289.11 	by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as 
289.12 	defined under section 291.03, subdivision 8, paragraph (c), or personal representative of 
289.13 	the decedent's estate must submit a recapture tax return to the commissioner.

289.14 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
289.15 	June 30, 2011.

289.16 	Sec. 2. Minnesota Statutes 2012, section 289A.12, subdivision 14, is amended to read:
289.17 		Subd. 14.Regulated investment companies; reporting exempt-interest 
289.18 	dividends. (a) A regulated investment company paying $10 or more in exempt-interest 
289.19 	dividends to an individual who is a resident of Minnesota must make a return indicating 
289.20 	the amount of the exempt-interest dividends, the name, address, and Social Security 
289.21 	number of the recipient, and any other information that the commissioner specifies. The 
289.22 	return must be provided to the shareholder by February 15 of the year following the year 
289.23 	of the payment. The return provided to the shareholder must include a clear statement, 
289.24 	in the form prescribed by the commissioner, that the exempt-interest dividends must be 
289.25 	included in the computation of Minnesota taxable income. By June 1 of each year, the 
289.26 	regulated investment company must file a copy of the return with the commissioner.
289.27 	(b) This subdivision applies to regulated investment companies required to register 
289.28 	under chapter 80A.
289.29 	(c) (b) For purposes of this subdivision, the following definitions apply.
289.30 	(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in 
289.31 	section 852(b)(5) of the Internal Revenue Code, but does not include the portion of 
289.32 	exempt-interest dividends that are not required to be added to federal taxable income 
289.33 	under section 290.01, subdivision 19a, clause (1)(ii).
290.1 	(2) "Regulated investment company" means regulated investment company as 
290.2 	defined in section 851(a) of the Internal Revenue Code or a fund of the regulated 
290.3 	investment company as defined in section 851(g) of the Internal Revenue Code.

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

290.5 	Sec. 3. Minnesota Statutes 2012, section 289A.12, is amended by adding a subdivision 
290.6 	to read:
290.7 		Subd. 18.Returns by qualified heirs. A qualified heir, as defined in section 291.03, 
290.8 	subdivision 8, paragraph (c), must file two returns with the commissioner attesting that 
290.9 	no disposition or cessation as provided by section 291.03, subdivision 11, paragraph 
290.10 	(a), occurred. The first return must be filed no earlier than 24 months and no later than 
290.11 	26 months after the decedent's death. The second return must be filed no earlier than 36 
290.12 	months and no later than 39 months after the decedent's death.

290.13 	EFFECTIVE DATE. This section is effective for returns required to be filed after 
290.14 	December 31, 2013.

290.15 	Sec. 4. Minnesota Statutes 2012, section 289A.18, is amended by adding a subdivision 
290.16 	to read:
290.17 		Subd. 3a.Recapture tax return. A recapture tax return must be filed with the 
290.18 	commissioner within six months after the date of the disposition or cessation as provided 
290.19 	by section 291.03, subdivision 11, paragraph (a).

290.20 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
290.21 	June 30, 2011.

290.22 	Sec. 5. Minnesota Statutes 2012, section 289A.20, subdivision 3, is amended to read:
290.23 		Subd. 3.Estate tax. Taxes imposed by chapter 291 section 291.03, subdivision 1,
290.24 	 take effect at and upon the death of the person whose estate is subject to taxation and are 
290.25 	due and payable on or before the expiration of nine months from that death.

290.26 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
290.27 	June 30, 2011.

290.28 	Sec. 6. Minnesota Statutes 2012, section 289A.20, is amended by adding a subdivision 
290.29 	to read:
291.1 		Subd. 3a.Recapture tax. The additional estate tax imposed by section 291.03, 
291.2 	subdivision 11, paragraph (b), is due and payable on or before the expiration of the date 
291.3 	provided by section 291.03, subdivision 11, paragraph (c).

291.4 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
291.5 	June 30, 2011.

291.6 	Sec. 7. Minnesota Statutes 2012, section 289A.26, subdivision 3, is amended to read:
291.7 		Subd. 3.Short taxable year. (a) A corporation or an entity with a short taxable year 
291.8 	of less than 12 months, but at least four months, must pay estimated tax in equal installments 
291.9 	on or before the 15th day of the third, sixth, ninth, and final month of the short taxable 
291.10 	year, to the extent applicable based on the number of months in the short taxable year.
291.11 	(b) A corporation or an entity is not required to make estimated tax payments for a 
291.12 	short taxable year unless its tax liability before the first day of the last month of the taxable 
291.13 	year can reasonably be expected to exceed $500.
291.14 	(c) No payment is required for a short taxable year of less than four months.

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

291.16 	Sec. 8. Minnesota Statutes 2012, section 289A.26, subdivision 4, is amended to read:
291.17 		Subd. 4.Underpayment of estimated tax. If there is an underpayment of estimated 
291.18 	tax by a corporation or an entity, there shall be added to the tax for the taxable year an 
291.19 	amount determined at the rate in section 270C.40 on the amount of the underpayment, 
291.20 	determined under subdivision 5, for the period of the underpayment determined under 
291.21 	subdivision 6. This subdivision does not apply in the first taxable year that a corporation is 
291.22 	subject to the tax imposed under section 290.02 or an entity is subject to the tax imposed 
291.23 	under section 290.05, subdivision 3.

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

291.25 	Sec. 9. Minnesota Statutes 2012, section 289A.26, subdivision 7, is amended to read:
291.26 		Subd. 7.Required installments. (a) Except as otherwise provided in this 
291.27 	subdivision, the amount of a required installment is 25 percent of the required annual 
291.28 	payment.
291.29 	(b) Except as otherwise provided in this subdivision, the term "required annual 
291.30 	payment" means the lesser of:
291.31 	(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is 
291.32 	filed, 100 percent of the tax for that year; or
292.1 	(2) 100 percent of the tax shown on the return of the corporation or entity for the 
292.2 	preceding taxable year provided the return was for a full 12-month period, showed a 
292.3 	liability, and was filed by the corporation or entity.
292.4 	(c) Except for determining the first required installment for any taxable year, 
292.5 	paragraph (b), clause (2), does not apply in the case of a large corporation. The term 
292.6 	"large corporation" means a corporation or any predecessor corporation that had taxable 
292.7 	net income of $1,000,000 or more for any taxable year during the testing period. The 
292.8 	term "testing period" means the three taxable years immediately preceding the taxable 
292.9 	year involved. A reduction allowed to a large corporation for the first installment that is 
292.10 	allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next 
292.11 	required installment by the amount of the reduction.
292.12 	(d) In the case of a required installment, if the corporation or entity establishes that 
292.13 	the annualized income installment is less than the amount determined in paragraph (a), the 
292.14 	amount of the required installment is the annualized income installment and the recapture 
292.15 	of previous quarters' reductions allowed by this paragraph must be recovered by increasing 
292.16 	later required installments to the extent the reductions have not previously been recovered.
292.17 	(e) The "annualized income installment" is the excess, if any, of:
292.18 	(1) an amount equal to the applicable percentage of the tax for the taxable year 
292.19 	computed by placing on an annualized basis the taxable income:
292.20 	(i) for the first two months of the taxable year, in the case of the first required 
292.21 	installment;
292.22 	(ii) for the first two months or for the first five months of the taxable year, in the 
292.23 	case of the second required installment;
292.24 	(iii) for the first six months or for the first eight months of the taxable year, in the 
292.25 	case of the third required installment; and
292.26 	(iv) for the first nine months or for the first 11 months of the taxable year, in the 
292.27 	case of the fourth required installment, over
292.28 	(2) the aggregate amount of any prior required installments for the taxable year.
292.29 	(3) For the purpose of this paragraph, the annualized income shall be computed 
292.30 	by placing on an annualized basis the taxable income for the year up to the end of the 
292.31 	month preceding the due date for the quarterly payment multiplied by 12 and dividing 
292.32 	the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as 
292.33 	the case may be) referred to in clause (1).
292.34 	(4) The "applicable percentage" used in clause (1) is:

293.1
293.2
293.3		For the following 
required 
installments:
		The applicable
percentage is:
	
293.4			1st
		25
		
293.5			2nd
		50
		
293.6			3rd
		75
		
293.7			4th
		100
		
293.8 	(f)(1) If this paragraph applies, the amount determined for any installment must 
293.9 	be determined in the following manner:
293.10 	(i) take the taxable income for the months during the taxable year preceding the 
293.11 	filing month;
293.12 	(ii) divide that amount by the base period percentage for the months during the 
293.13 	taxable year preceding the filing month;
293.14 	(iii) determine the tax on the amount determined under item (ii); and
293.15 	(iv) multiply the tax computed under item (iii) by the base period percentage for the 
293.16 	filing month and the months during the taxable year preceding the filing month.
293.17 	(2) For purposes of this paragraph:
293.18 	(i) the "base period percentage" for a period of months is the average percent that the 
293.19 	taxable income for the corresponding months in each of the three preceding taxable years 
293.20 	bears to the taxable income for the three preceding taxable years;
293.21 	(ii) the term "filing month" means the month in which the installment is required 
293.22 	to be paid;
293.23 	(iii) this paragraph only applies if the base period percentage for any six consecutive 
293.24 	months of the taxable year equals or exceeds 70 percent; and
293.25 	(iv) the commissioner may provide by rule for the determination of the base period 
293.26 	percentage in the case of reorganizations, new corporations or entities, and other similar 
293.27 	circumstances.
293.28 	(3) In the case of a required installment determined under this paragraph, if the
293.29 	 corporation or entity determines that the installment is less than the amount determined in 
293.30 	paragraph (a), the amount of the required installment is the amount determined under this 
293.31 	paragraph and the recapture of previous quarters' reductions allowed by this paragraph 
293.32 	must be recovered by increasing later required installments to the extent the reductions 
293.33 	have not previously been recovered.

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

293.35 	Sec. 10. Minnesota Statutes 2012, section 289A.26, subdivision 9, is amended to read:
294.1 		Subd. 9.Failure to file an estimate. In the case of a corporation or an entity 
294.2 	that fails to file an estimated tax for a taxable year when one is required, the period of 
294.3 	the underpayment runs from the four installment dates in subdivision 2 or 3, whichever 
294.4 	applies, to the earlier of the periods in subdivision 6, clauses (1) and (2).

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

294.6 	Sec. 11. Minnesota Statutes 2012, section 290.9705, subdivision 1, is amended to read:
294.7 		Subdivision 1.Withholding of payments to out-of-state contractors. (a) In this 
294.8 	section, "person" means a person, corporation, or cooperative, the state of Minnesota and 
294.9 	its political subdivisions, and a city, county, and school district in Minnesota.
294.10 	(b) A person who in the regular course of business is hiring, contracting, or having a 
294.11 	contract with a nonresident person or foreign corporation, as defined in Minnesota Statutes 
294.12 	1986, section 290.01, subdivision 5, to perform construction work in Minnesota, shall 
294.13 	deduct and withhold eight percent of cumulative calendar year payments made to the 
294.14 	contractor which exceed if the value of the contract exceeds $50,000.

294.15 	EFFECTIVE DATE. This section is effective for payments made to contractors 
294.16 	after December 31, 2013.

294.17 	ARTICLE 16
294.18 	DEPARTMENT OF REVENUE SALES AND USE TAXES; SPECIAL TAXES

294.19 	Section 1. Minnesota Statutes 2012, section 287.20, is amended by adding a 
294.20 	subdivision to read:
294.21 		Subd. 11.Partition. "Partition" means the division by conveyance of real property 
294.22 	that is held jointly or in common by two or more persons into individually owned interests. 
294.23 	If one of the co-owners gives consideration for all or a part of the individually owned 
294.24 	interest conveyed to them, that portion of the conveyance is not a part of the partition.

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

294.26 	Sec. 2. Minnesota Statutes 2012, section 289A.20, subdivision 4, is amended to read:
294.27 		Subd. 4.Sales and use tax. (a) The taxes imposed by chapter 297A are due and 
294.28 	payable to the commissioner monthly on or before the 20th day of the month following 
294.29 	the month in which the taxable event occurred, or following another reporting period 
294.30 	as the commissioner prescribes or as allowed under section 289A.18, subdivision 4, 
294.31 	paragraph (f) or (g), except that:
295.1 	(1) use taxes due on an annual use tax return as provided under section 289A.11, 
295.2 	subdivision 1, are payable by April 15 following the close of the calendar year; and.
295.3 	(2) except as provided in paragraph (f), for a vendor having a liability of $120,000 
295.4 	or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes 
295.5 	imposed by chapter 297A, except as provided in paragraph (b), are due and payable to the 
295.6 	commissioner monthly in the following manner:
295.7 	(i) On or before the 14th day of the month following the month in which the taxable 
295.8 	event occurred, the vendor must remit to the commissioner 90 percent of the estimated 
295.9 	liability for the month in which the taxable event occurred.
295.10 	(ii) On or before the 20th day of the month in which the taxable event occurs, the 
295.11 	vendor must remit to the commissioner a prepayment for the month in which the taxable 
295.12 	event occurs equal to 67 percent of the liability for the previous month.
295.13 	(iii) On or before the 20th day of the month following the month in which the taxable 
295.14 	event occurred, the vendor must pay any additional amount of tax not previously remitted 
295.15 	under either item (i) or (ii ) or, if the payment made under item (i) or (ii) was greater than 
295.16 	the vendor's liability for the month in which the taxable event occurred, the vendor may 
295.17 	take a credit against the next month's liability in a manner prescribed by the commissioner.
295.18 	(iv) Once the vendor first pays under either item (i) or (ii), the vendor is required to 
295.19 	continue to make payments in the same manner, as long as the vendor continues having a 
295.20 	liability of $120,000 or more during the most recent fiscal year ending June 30.
295.21 	(v) Notwithstanding items (i), (ii), and (iv), if a vendor fails to make the required 
295.22 	payment in the first month that the vendor is required to make a payment under either item 
295.23 	(i) or (ii), then the vendor is deemed to have elected to pay under item (ii) and must make 
295.24 	subsequent monthly payments in the manner provided in item (ii).
295.25 	(vi) For vendors making an accelerated payment under item (ii), for the first month 
295.26 	that the vendor is required to make the accelerated payment, on the 20th of that month, the 
295.27 	vendor will pay 100 percent of the liability for the previous month and a prepayment for 
295.28 	the first month equal to 67 percent of the liability for the previous month.
295.29 	(b) Notwithstanding paragraph (a), A vendor having a liability of $120,000 or more 
295.30 	during a fiscal year ending June 30 must remit the June liability for the next year in the 
295.31 	following manner:
295.32 	(1) Two business days before June 30 of the year, the vendor must remit 90 percent 
295.33 	of the estimated June liability to the commissioner.
295.34 	(2) On or before August 20 of the year, the vendor must pay any additional amount 
295.35 	of tax not remitted in June.
295.36 	(c) A vendor having a liability of:
296.1 	(1) $10,000 or more, but less than $120,000 during a fiscal year ending June 30, 
296.2 	2009, and fiscal years thereafter, must remit by electronic means all liabilities on returns 
296.3 	due for periods beginning in the subsequent calendar year on or before the 20th day of 
296.4 	the month following the month in which the taxable event occurred, or on or before the 
296.5 	20th day of the month following the month in which the sale is reported under section 
296.6 	289A.18, subdivision 4; or
296.7 	(2) $120,000 or more, during a fiscal year ending June 30, 2009, and fiscal years 
296.8 	thereafter, must remit by electronic means all liabilities in the manner provided in 
296.9 	paragraph (a), clause (2), on returns due for periods beginning in the subsequent calendar 
296.10 	year, except for 90 percent of the estimated June liability, which is due two business days 
296.11 	before June 30. The remaining amount of the June liability is due on August 20.
296.12 	(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's 
296.13 	religious beliefs from paying electronically shall be allowed to remit the payment by mail. 
296.14 	The filer must notify the commissioner of revenue of the intent to pay by mail before 
296.15 	doing so on a form prescribed by the commissioner. No extra fee may be charged to a 
296.16 	person making payment by mail under this paragraph. The payment must be postmarked 
296.17 	at least two business days before the due date for making the payment in order to be 
296.18 	considered paid on a timely basis.
296.19 	(e) Whenever the liability is $120,000 or more separately for: (1) the tax imposed 
296.20 	under chapter 297A; (2) a fee that is to be reported on the same return as and paid with the 
296.21 	chapter 297A taxes; or (3) any other tax that is to be reported on the same return as and 
296.22 	paid with the chapter 297A taxes, then the payment of all the liabilities on the return must 
296.23 	be accelerated as provided in this subdivision.
296.24 	(f) At the start of the first calendar quarter at least 90 days after the cash flow account 
296.25 	established in section 16A.152, subdivision 1, and the budget reserve account established in 
296.26 	section 16A.152, subdivision 1a, reach the amounts listed in section 16A.152, subdivision 
296.27 	2, paragraph (a), the remittance of the accelerated payments required under paragraph (a), 
296.28 	clause (2), must be suspended. The commissioner of management and budget shall notify 
296.29 	the commissioner of revenue when the accounts have reached the required amounts. 
296.30 	Beginning with the suspension of paragraph (a), clause (2), for a vendor with a liability of 
296.31 	$120,000 or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the 
296.32 	taxes imposed by chapter 297A are due and payable to the commissioner on the 20th day 
296.33 	of the month following the month in which the taxable event occurred. Payments of tax 
296.34 	liabilities for taxable events occurring in June under paragraph (b) are not changed.

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

297.1 	Sec. 3. Minnesota Statutes 2012, section 297A.665, is amended to read:
297.2 	297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
297.3 	(a) For the purpose of the proper administration of this chapter and to prevent 
297.4 	evasion of the tax, until the contrary is established, it is presumed that:
297.5 	(1) all gross receipts are subject to the tax; and
297.6 	(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 
297.7 	in Minnesota.
297.8 	(b) The burden of proving that a sale is not a taxable retail sale is on the seller. 
297.9 	However, a seller is relieved of liability if:
297.10 	(1) the seller obtains a fully completed exemption certificate or all the relevant 
297.11 	information required by section 297A.72, subdivision 2, at the time of the sale or within 
297.12 	90 days after the date of the sale; or
297.13 	(2) if the seller has not obtained a fully completed exemption certificate or all the 
297.14 	relevant information required by section 297A.72, subdivision 2, within the time provided 
297.15 	in clause (1), within 120 days after a request for substantiation by the commissioner, 
297.16 	the seller either:
297.17 	(i) obtains in good faith from the purchaser a fully completed exemption certificate 
297.18 	or all the relevant information required by section 297A.72, subdivision 2, from the 
297.19 	purchaser taken in good faith which means that the exemption certificate claims an 
297.20 	exemption that (A) was statutorily available on the date of the transaction, (B) could be 
297.21 	applicable to the item for which the exemption is claimed, and (C) is reasonable for the 
297.22 	purchaser's type of business; or
297.23 	(ii) proves by other means that the transaction was not subject to tax.
297.24 	(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
297.25 	(1) fraudulently fails to collect the tax; or
297.26 	(2) solicits purchasers to participate in the unlawful claim of an exemption.
297.27 	(d) Notwithstanding paragraph (b), relief from liability does not apply to a seller 
297.28 	who has obtained information under paragraph (b), clause (2), if through the audit process 
297.29 	the commissioner finds the following:
297.30 	(1) that at the time the information was provided the seller had knowledge or had 
297.31 	reason to know that the information relating to the exemption was materially false; or
297.32 	(2) that the seller knowingly participated in activity intended to purposefully evade 
297.33 	the sales tax due on the transaction.
297.34 	(d) (e) A certified service provider, as defined in section 297A.995, subdivision 2, is 
297.35 	relieved of liability under this section to the extent a seller who is its client is relieved of 
297.36 	liability.
298.1 	(e) (f) A purchaser of tangible personal property or any items listed in section 297A.63 
298.2 	that are shipped or brought to Minnesota by the purchaser has the burden of proving that the 
298.3 	property was not purchased from a retailer for storage, use, or consumption in Minnesota.
298.4 	(f) (g) If a seller claims that certain sales are exempt and does not provide the 
298.5 	certificate, information, or proof required by paragraph (b), clause (2), within 120 days 
298.6 	after the date of the commissioner's request for substantiation, then the exemptions 
298.7 	claimed by the seller that required substantiation are disallowed.

298.8 	EFFECTIVE DATE. This section is effective retroactively from January 1, 2013.

298.9 	Sec. 4. Minnesota Statutes 2012, section 297F.01, subdivision 23, is amended to read:
298.10 		Subd. 23.Wholesale sales price. "Wholesale sales price" means the price stated 
298.11 	on the price list in effect at the time of sale for which a manufacturer or person sells a 
298.12 	tobacco product to a distributor, exclusive of any discount, promotional offer, or other 
298.13 	reduction. For purposes of this subdivision, "price list" means the manufacturer's price at 
298.14 	which tobacco products are made available for sale to all distributors on an ongoing basis
298.15 	 at which a distributor purchases a tobacco product. Wholesale sales price includes the 
298.16 	applicable federal excise tax, freight charges, or packaging costs, regardless of whether 
298.17 	they were included in the purchase price.

298.18 	EFFECTIVE DATE. This section is effective for purchases made after December 
298.19 	31, 2013.

298.20 	Sec. 5. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
298.21 		Subd. 2.Tax credit. A qualified brewer producing fermented malt beverages 
298.22 	is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year 
298.23 	beginning July 1, regardless of the alcohol content of the product. Qualified brewers may 
298.24 	take the credit on the 18th day of each month, but the total credit allowed may not exceed 
298.25 	in any fiscal year the lesser of:
298.26 	(1) the liability for tax; or
298.27 	(2) $115,000.
298.28 	For purposes of this subdivision, a "qualified brewer" means a brewer, whether 
298.29 	or not located in this state, manufacturing less than 100,000 barrels of fermented malt 
298.30 	beverages in the calendar year immediately preceding the calendar fiscal year for which 
298.31 	the credit under this subdivision is claimed. In determining the number of barrels, all 
298.32 	brands or labels of a brewer must be combined. All facilities for the manufacture of 
299.1 	fermented malt beverages owned or controlled by the same person, corporation, or other 
299.2 	entity must be treated as a single brewer.

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

299.4 	Sec. 6. Minnesota Statutes 2012, section 297I.05, subdivision 7, is amended to read:
299.5 		Subd. 7.Nonadmitted insurance premium tax. (a) A tax is imposed on surplus 
299.6 	lines brokers. The rate of tax is equal to three percent of the gross premiums less return 
299.7 	premiums paid by an insured whose home state is Minnesota.
299.8 	(b) A tax is imposed on persons, firms, or corporations a person, firm, corporation, 
299.9 	or purchasing group as defined in section 60E.02, or any member of a purchasing group,
299.10 	 that procure procures insurance directly from a nonadmitted insurer. The rate of tax is 
299.11 	equal to two percent of the gross premiums less return premiums paid by an insured 
299.12 	whose home state is Minnesota.
299.13 	(c) No state other than the home state of an insured may require any premium tax 
299.14 	payment for nonadmitted insurance. When Minnesota is the home state of the insured, 
299.15 	as provided under section 297I.01, 100 percent of the gross premiums are taxable in 
299.16 	Minnesota with no allocation of the tax to other states.

299.17 	EFFECTIVE DATE. This section is effective for premiums received after 
299.18 	December 31, 2013.

299.19 	Sec. 7. Minnesota Statutes 2012, section 297I.05, subdivision 11, is amended to read:
299.20 		Subd. 11.Retaliatory provisions. (a) If any other state or country imposes any 
299.21 	taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this 
299.22 	state and their agents doing business in another state or country that are in addition to or in 
299.23 	excess of those imposed by the laws of this state upon foreign insurance companies and 
299.24 	their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses, 
299.25 	and fees are imposed upon every similar insurance company of that state or country and 
299.26 	their agents doing or applying to do business in this state.
299.27 	(b) If any conditions precedent to the right to do business in any other state or 
299.28 	country are imposed by the laws of that state or country, beyond those imposed upon 
299.29 	foreign companies by the laws of this state, the same conditions precedent are imposed 
299.30 	upon every similar insurance company of that state or country and their agents doing or 
299.31 	applying to do business in that state.
299.32 	(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or 
299.33 	fees" means an amount of money that is deposited in the general revenue fund of the state 
300.1 	or other similar fund in another state or country and is not dedicated to a special purpose 
300.2 	or use or money deposited in the general revenue fund of the state or other similar fund in 
300.3 	another state or country and appropriated to the commissioner of commerce or insurance 
300.4 	for the operation of the Department of Commerce or other similar agency with jurisdiction 
300.5 	over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include:
300.6 	(1) special purpose obligations or assessments imposed in connection with particular 
300.7 	kinds of insurance, including but not limited to assessments imposed in connection with 
300.8 	residual market mechanisms; or
300.9 	(2) assessments made by the insurance guaranty association, life and health 
300.10 	guarantee association, or similar association.
300.11 	(d) This subdivision applies to taxes imposed under subdivisions 1,; 3,; 4, 6, and; 12, 
300.12 	paragraph (a), clauses (1) and (2); and 14.
300.13 	(e) This subdivision does not apply to insurance companies organized or domiciled 
300.14 	in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits, 
300.15 	penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from 
300.16 	retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies 
300.17 	domiciled in this state.

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

300.19 	Sec. 8. Minnesota Statutes 2012, section 297I.05, subdivision 12, is amended to read:
300.20 		Subd. 12.Other entities. (a) A tax is imposed equal to two percent of:
300.21 	(1) gross premiums less return premiums written for risks resident or located in 
300.22 	Minnesota by a risk retention group;
300.23 	(2) gross premiums less return premiums received by an attorney in fact acting 
300.24 	in accordance with chapter 71A;
300.25 	(3) gross premiums less return premiums received pursuant to assigned risk policies 
300.26 	and contracts of coverage under chapter 79; and
300.27 	(4) the direct funded premium received by the reinsurance association under section 
300.28 	79.34 from self-insurers approved under section 176.181 and political subdivisions that 
300.29 	self-insure; and.
300.30 	(5) gross premiums less return premiums paid to an insurer other than a licensed 
300.31 	insurance company or a surplus lines broker for coverage of risks resident or located in 
300.32 	Minnesota by a purchasing group or any members of the purchasing group to a broker or 
300.33 	agent for the purchasing group.
301.1 	(b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The 
301.2 	rate of tax is equal to two percent of the total amount of claims paid during the fund year, 
301.3 	with no deduction for claims wholly or partially reimbursed through stop-loss insurance.
301.4 	(c) A tax is imposed on a joint self-insurance plan operating under chapter 62H. 
301.5 	The rate of tax is equal to two percent of the total amount of claims paid during the 
301.6 	fund's fiscal year, with no deduction for claims wholly or partially reimbursed through 
301.7 	stop-loss insurance.
301.8 	(d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5, 
301.9 	on the gross premiums less return premiums on all coverages received by an accountable 
301.10 	provider network or agents of an accountable provider network in Minnesota, in cash or 
301.11 	otherwise, during the year.

301.12 	EFFECTIVE DATE. This section is effective for premiums received after 
301.13 	December 31, 2013.

301.14 	Sec. 9. Minnesota Statutes 2012, section 297I.30, subdivision 1, is amended to read:
301.15 		Subdivision 1.General rule. On or before March 1, every taxpayer subject to 
301.16 	taxation under section 297I.05, subdivisions 1 to 5,; 7, paragraph (b),; 12, paragraphs (a), 
301.17 	clauses (1) to (4), (b), (c), and (d),; and 14, shall file an annual return for the preceding 
301.18 	calendar year in the form prescribed by the commissioner.

301.19 	EFFECTIVE DATE. This section is effective for premiums received after 
301.20 	December 31, 2013.

301.21 	Sec. 10. Minnesota Statutes 2012, section 297I.30, subdivision 2, is amended to read:
301.22 		Subd. 2.Surplus lines brokers and purchasing groups. On or before February 
301.23 	15 and August 15 of each year, every surplus lines broker subject to taxation under 
301.24 	section 297I.05, subdivision 7, paragraph (a), and every purchasing group or member of 
301.25 	a purchasing group subject to tax under section 297I.05, subdivision 12, paragraph (a), 
301.26 	clause (5), shall file a return with the commissioner for the preceding six-month period 
301.27 	ending December 31, or June 30, in the form prescribed by the commissioner.

301.28 	EFFECTIVE DATE. This section is effective for premiums received after 
301.29 	December 31, 2013.

301.30 	Sec. 11.  REPEALER.
 301.31 	Minnesota Statutes 2012, section 289A.60, subdivision 31, is repealed.

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

302.2 	ARTICLE 17
302.3 	DEPARTMENT OF REVENUE PROPERTY AND MINERALS PROVISIONS

302.4 	Section 1. Minnesota Statutes 2012, section 123A.455, subdivision 1, is amended to 
302.5 	read:
302.6 		Subdivision 1.Definitions. "Split residential property parcel" means a parcel of 
302.7 	real estate that is located within the boundaries of more than one school district and that 
302.8 	is classified as residential property under:
302.9 	(1) section 273.13, subdivision 22, paragraph (a) or (b);
302.10 	(2) section 273.13, subdivision 25, paragraph (b), clause (1); or
302.11 	(3) section 273.13, subdivision 25, paragraph (c), clause (1).

302.12 	EFFECTIVE DATE. This section is effective for taxes payable in 2014 and 
302.13 	thereafter.

302.14 	Sec. 2. Minnesota Statutes 2012, section 270.077, is amended to read:
302.15 	270.077 TAXES CREDITED TO STATE AIRPORTS FUND.
302.16 	All taxes levied under sections 270.071 to 270.079 must be collected by the 
302.17 	commissioner and credited to the state airports fund created in section 360.017.

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

302.19 	Sec. 3. Minnesota Statutes 2012, section 270.41, subdivision 5, is amended to read:
302.20 		Subd. 5.Prohibited activity. A licensed assessor or other person employed by an 
302.21 	assessment jurisdiction or contracting with an assessment jurisdiction for the purpose 
302.22 	of valuing or classifying property for property tax purposes is prohibited from making 
302.23 	appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report 
302.24 	as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the 
302.25 	assessment jurisdiction where the individual is employed or performing the duties of the 
302.26 	assessor under contract. Violation of this prohibition shall result in immediate revocation 
302.27 	of the individual's license to assess property for property tax purposes. This prohibition 
302.28 	must not be construed to prohibit an individual from carrying out any duties required 
302.29 	for the proper assessment of property for property tax purposes or performing duties 
302.30 	enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted 
302.31 	by the governing body of a governmental unit, which specifies the purposes for which 
303.1 	such work will be done, this prohibition does not apply to appraisal activities undertaken 
303.2 	on behalf of and at the request of the governmental unit that has employed or contracted 
303.3 	with the individual. The resolution may only allow appraisal activities which are related to 
303.4 	condemnations, right-of-way acquisitions, land exchanges, or special assessments.

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

303.6 	Sec. 4. Minnesota Statutes 2012, section 270C.34, subdivision 1, is amended to read:
303.7 		Subdivision 1.Authority. (a) The commissioner may abate, reduce, or refund any 
303.8 	penalty or interest that is imposed by a law administered by the commissioner, or imposed 
303.9 	by section 270.0725, subdivision 1 or 2, or 270.075, subdivision 2, as a result of the late 
303.10 	payment of tax or late filing of a return, or any part of an additional tax charge under 
303.11 	section 289A.25, subdivision 2, or 289A.26, subdivision 4, if the failure to timely pay the 
303.12 	tax or failure to timely file the return is due to reasonable cause, or if the taxpayer is located 
303.13 	in a presidentially declared disaster or in a presidentially declared state of emergency area 
303.14 	or in an area declared to be in a state of emergency by the governor under section 12.31.
303.15 	(b) The commissioner shall abate any part of a penalty or additional tax charge 
303.16 	under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 
303.17 	advice given to the taxpayer in writing by an employee of the department acting in 
303.18 	an official capacity, if the advice:
303.19 	(1) was reasonably relied on and was in response to a specific written request of the 
303.20 	taxpayer; and
303.21 	(2) was not the result of failure by the taxpayer to provide adequate or accurate 
303.22 	information.

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

303.24 	Sec. 5. Minnesota Statutes 2012, section 272.01, subdivision 2, is amended to read:
303.25 		Subd. 2.Exempt property used by private entity for profit. (a) When any real or 
303.26 	personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is 
303.27 	leased, loaned, or otherwise made available and used by a private individual, association, 
303.28 	or corporation in connection with a business conducted for profit, there shall be imposed a 
303.29 	tax, for the privilege of so using or possessing such real or personal property, in the same 
303.30 	amount and to the same extent as though the lessee or user was the owner of such property.
303.31 	(b) The tax imposed by this subdivision shall not apply to:
303.32 	(1) property leased or used as a concession in or relative to the use in whole 
303.33 	or part of a public park, market, fairgrounds, port authority, economic development 
304.1 	authority established under chapter 469, municipal auditorium, municipal parking facility, 
304.2 	municipal museum, or municipal stadium;
304.3 	(2) property of an airport owned by a city, town, county, or group thereof which is:
304.4 	(i) leased to or used by any person or entity including a fixed base operator; and
304.5 	(ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods, 
304.6 	services, or facilities to the airport or general public;
304.7 	the exception from taxation provided in this clause does not apply to:
304.8 	(i) property located at an airport owned or operated by the Metropolitan Airports 
304.9 	Commission or by a city of over 50,000 population according to the most recent federal 
304.10 	census or such a city's airport authority; or
304.11 	(ii) hangars leased by a private individual, association, or corporation in connection 
304.12 	with a business conducted for profit other than an aviation-related business;
304.13 	(3) property constituting or used as a public pedestrian ramp or concourse in 
304.14 	connection with a public airport;
304.15 	(4) property constituting or used as a passenger check-in area or ticket sale counter, 
304.16 	boarding area, or luggage claim area in connection with a public airport but not the 
304.17 	airports owned or operated by the Metropolitan Airports Commission or cities of over 
304.18 	50,000 population or an airport authority therein. Real estate owned by a municipality 
304.19 	in connection with the operation of a public airport and leased or used for agricultural 
304.20 	purposes is not exempt;
304.21 	(5) property leased, loaned, or otherwise made available to a private individual, 
304.22 	corporation, or association under a cooperative farming agreement made pursuant to 
304.23 	section 97A.135; or
304.24 	(6) property leased, loaned, or otherwise made available to a private individual, 
304.25 	corporation, or association under section 272.68, subdivision 4.
304.26 	(c) Taxes imposed by this subdivision are payable as in the case of personal property 
304.27 	taxes and shall be assessed to the lessees or users of real or personal property in the same 
304.28 	manner as taxes assessed to owners of real or personal property, except that such taxes 
304.29 	shall not become a lien against the property. When due, the taxes shall constitute a debt due 
304.30 	from the lessee or user to the state, township, city, county, and school district for which the 
304.31 	taxes were assessed and shall be collected in the same manner as personal property taxes. 
304.32 	If property subject to the tax imposed by this subdivision is leased or used jointly by two or 
304.33 	more persons, each lessee or user shall be jointly and severally liable for payment of the tax.
304.34 	(d) The tax on real property of the federal government, the state or any of its political 
304.35 	subdivisions that is leased by, loaned, or otherwise made available to a private individual, 
304.36 	association, or corporation and becomes taxable under this subdivision or other provision 
305.1 	of law must be assessed and collected as a personal property assessment. The taxes do 
305.2 	not become a lien against the real property.

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

305.4 	Sec. 6. Minnesota Statutes 2012, section 272.02, subdivision 97, is amended to read:
305.5 		Subd. 97.Property used in business of mining subject to net proceeds tax. The 
305.6 	following property used in the business of mining that is subject to the net proceeds tax 
305.7 	under section 298.015 is exempt:
305.8 	(1) deposits of ores, metals, and minerals and the lands in which they are contained;
305.9 	(2) all real and personal property used in mining, quarrying, producing, or refining 
305.10 	ores, minerals, or metals, including lands occupied by or used in connection with the 
305.11 	mining, quarrying, production, or ore refining facilities; and
305.12 	(3) concentrate or direct reduced ore.
305.13 	This exemption applies for each year that a person subject to tax under section 
305.14 	298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or 
305.15 	minerals.

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

305.17 	Sec. 7. Minnesota Statutes 2012, section 272.03, subdivision 9, is amended to read:
305.18 		Subd. 9.Person. "Person" includes means an individual, association, estate, trust, 
305.19 	partnership, firm, company, or corporation.

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

305.21 	Sec. 8. Minnesota Statutes 2012, section 273.114, subdivision 6, is amended to read:
305.22 		Subd. 6.Additional taxes. (a) When real property which is being, or has been 
305.23 	valued and assessed under this section is sold, transferred, or no longer qualifies under 
305.24 	subdivision 2, the portion sold, transferred, or no longer qualifying shall be subject to 
305.25 	additional taxes in the amount equal to the difference between the taxes determined in 
305.26 	accordance with subdivision 3 and the amount determined under subdivision 4, provided 
305.27 	that the amount determined under subdivision 4 shall not be greater than it would have 
305.28 	been had the actual bona fide sale price of the real property at an arm's-length transaction 
305.29 	been used in lieu of the market value determined under subdivision 4. The additional taxes 
305.30 	shall be extended against the property on the tax list for taxes payable in the current year, 
305.31 	provided that no interest or penalties shall be levied on the additional taxes if timely paid 
306.1 	and provided that the additional taxes shall only be levied with respect to the current year 
306.2 	plus two prior years that the property has been valued and assessed under this section.
306.3 	(b) In the case of a sale or transfer, the additional taxes under paragraph (a) shall not 
306.4 	be extended against the property if the new owner submits a successful application under 
306.5 	this section by the later of May 1 of the current year or 30 days after the sale or transfer.
306.6 	(c) For the purposes of this section, the following events do not constitute a sale or 
306.7 	transfer for property that qualified under subdivision 2 prior to the event:
306.8 	(1) death of a property owner when the surviving owners retain ownership of the 
306.9 	property;
306.10 	(2) divorce of a married couple when one of the spouses retains ownership of the 
306.11 	property;
306.12 	(3) marriage of a single property owner when that owner retains ownership of the 
306.13 	property in whole or in part;
306.14 	(4) the organization or reorganization of a farm ownership entity that is not prohibited 
306.15 	from owning agricultural land in this state under section 500.24, if all owners maintain the 
306.16 	same beneficial interest both before and after the organization or reorganization; and
306.17 	(5) transfer of the property to a trust or trustee, provided that the individual owners 
306.18 	of the property are the grantors of the trust and they maintain the same beneficial interest 
306.19 	both before and after placement of the property in trust.

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

306.21 	Sec. 9. Minnesota Statutes 2012, section 273.13, subdivision 23, is amended to read:
306.22 		Subd. 23.Class 2. (a) An agricultural homestead consists of class 2a agricultural 
306.23 	land that is homesteaded, along with any class 2b rural vacant land that is contiguous to 
306.24 	the class 2a land under the same ownership. The market value of the house and garage 
306.25 	and immediately surrounding one acre of land has the same class rates as class 1a or 1b 
306.26 	property under subdivision 22. The value of the remaining land including improvements 
306.27 	up to the first tier valuation limit of agricultural homestead property has a net class rate 
306.28 	of 0.5 percent of market value. The remaining property over the first tier has a class rate 
306.29 	of one percent of market value. For purposes of this subdivision, the "first tier valuation 
306.30 	limit of agricultural homestead property" and "first tier" means the limit certified under 
306.31 	section 273.11, subdivision 23.
306.32 	(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 
306.33 	are agricultural land and buildings. Class 2a property has a net class rate of one percent of 
306.34 	market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a 
306.35 	property must also include any property that would otherwise be classified as 2b, but is 
307.1 	interspersed with class 2a property, including but not limited to sloughs, wooded wind 
307.2 	shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement, 
307.3 	and other similar land that is impractical for the assessor to value separately from the rest of 
307.4 	the property or that is unlikely to be able to be sold separately from the rest of the property.
307.5 	An assessor may classify the part of a parcel described in this subdivision that is used 
307.6 	for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
307.7 	(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, 
307.8 	that are unplatted real estate, rural in character and not used for agricultural purposes, 
307.9 	including land used for growing trees for timber, lumber, and wood and wood products, 
307.10 	that is not improved with a structure. The presence of a minor, ancillary nonresidential 
307.11 	structure as defined by the commissioner of revenue does not disqualify the property from 
307.12 	classification under this paragraph. Any parcel of 20 acres or more improved with a 
307.13 	structure that is not a minor, ancillary nonresidential structure must be split-classified, and 
307.14 	ten acres must be assigned to the split parcel containing the structure. Class 2b property 
307.15 	has a net class rate of one percent of market value unless it is part of an agricultural 
307.16 	homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
307.17 	(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 
307.18 	acres statewide per taxpayer that is being managed under a forest management plan that 
307.19 	meets the requirements of chapter 290C, but is not enrolled in the sustainable forest 
307.20 	resource management incentive program. It has a class rate of .65 percent, provided that 
307.21 	the owner of the property must apply to the assessor in order for the property to initially 
307.22 	qualify for the reduced rate and provide the information required by the assessor to verify 
307.23 	that the property qualifies for the reduced rate. If the assessor receives the application 
307.24 	and information before May 1 in an assessment year, the property qualifies beginning 
307.25 	with that assessment year. If the assessor receives the application and information after 
307.26 	April 30 in an assessment year, the property may not qualify until the next assessment 
307.27 	year. The commissioner of natural resources must concur that the land is qualified. The 
307.28 	commissioner of natural resources shall annually provide county assessors verification 
307.29 	information on a timely basis. The presence of a minor, ancillary nonresidential structure 
307.30 	as defined by the commissioner of revenue does not disqualify the property from 
307.31 	classification under this paragraph.
307.32 	(e) Agricultural land as used in this section means:
307.33 	(1) contiguous acreage of ten acres or more, used during the preceding year for 
307.34 	agricultural purposes.; or
308.1 	(2) contiguous acreage used during the preceding year for an intensive livestock or 
308.2 	poultry confinement operation, provided that land used only for pasturing or grazing 
308.3 	does not qualify under this clause.
308.4 	"Agricultural purposes" as used in this section means the raising, cultivation, drying, 
308.5 	or storage of agricultural products for sale, or the storage of machinery or equipment 
308.6 	used in support of agricultural production by the same farm entity. For a property to be 
308.7 	classified as agricultural based only on the drying or storage of agricultural products, 
308.8 	the products being dried or stored must have been produced by the same farm entity as 
308.9 	the entity operating the drying or storage facility. "Agricultural purposes" also includes 
308.10 	enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or 
308.11 	the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar 
308.12 	state or federal conservation program if the property was classified as agricultural (i) 
308.13 	under this subdivision for the assessment year 2002 taxes payable in 2003 because of its 
308.14 	enrollment in a qualifying program and the land remains enrolled or (ii) in the year prior 
308.15 	to its enrollment. Agricultural classification shall not be based upon the market value of 
308.16 	any residential structures on the parcel or contiguous parcels under the same ownership.
308.17 	"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous 
308.18 	portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion 
308.19 	of, a set of contiguous tax parcels under that section that are owned by the same person.
308.20 	(f) Real estate of Agricultural land under this section also includes:
308.21 	(1) contiguous acreage that is less than ten acres, which is in size and exclusively or 
308.22 	intensively used in the preceding year for raising or cultivating agricultural products, shall 
308.23 	be considered as agricultural land. To qualify under this paragraph, property that includes 
308.24 	a residential structure must be used intensively for one of the following purposes:; or
308.25 	(2) contiguous acreage that contains a residence and is less than 11 acres in size, if 
308.26 	the contiguous acreage exclusive of the house, garage, and surrounding one acre of land 
308.27 	was used in the preceding year for one or more of the following three uses:
308.28 	(i) for an intensive grain drying or storage of grain operation, or for intensive 
308.29 	machinery or equipment storage of machinery or equipment activities used to support 
308.30 	agricultural activities on other parcels of property operated by the same farming entity;
308.31 	(ii) as a nursery, provided that only those acres used intensively to produce nursery 
308.32 	stock are considered agricultural land; or
308.33 	(iii) for livestock or poultry confinement, provided that land that is used only for 
308.34 	pasturing and grazing does not qualify; or
308.35 	(iv) (iii) for intensive market farming; for purposes of this paragraph, "market 
308.36 	farming" means the cultivation of one or more fruits or vegetables or production of animal 
309.1 	or other agricultural products for sale to local markets by the farmer or an organization 
309.2 	with which the farmer is affiliated.
309.3 	"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as 
309.4 	described in section 272.193, or all of a set of contiguous tax parcels under that section 
309.5 	that are owned by the same person.
309.6 	(g) Land shall be classified as agricultural even if all or a portion of the agricultural 
309.7 	use of that property is the leasing to, or use by another person for agricultural purposes.
309.8 	Classification under this subdivision is not determinative for qualifying under 
309.9 	section 273.111.
309.10 	(h) The property classification under this section supersedes, for property tax 
309.11 	purposes only, any locally administered agricultural policies or land use restrictions that 
309.12 	define minimum or maximum farm acreage.
309.13 	(i) The term "agricultural products" as used in this subdivision includes production 
309.14 	for sale of:
309.15 	(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 
309.16 	animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 
309.17 	bees, and apiary products by the owner;
309.18 	(2) fish bred for sale and consumption if the fish breeding occurs on land zoned 
309.19 	for agricultural use;
309.20 	(3) the commercial boarding of horses, which may include related horse training and 
309.21 	riding instruction, if the boarding is done on property that is also used for raising pasture 
309.22 	to graze horses or raising or cultivating other agricultural products as defined in clause (1);
309.23 	(4) property which is owned and operated by nonprofit organizations used for 
309.24 	equestrian activities, excluding racing;
309.25 	(5) game birds and waterfowl bred and raised (i) on a game farm licensed under 
309.26 	section 97A.105, provided that the annual licensing report to the Department of Natural 
309.27 	Resources, which must be submitted annually by March 30 to the assessor, indicates 
309.28 	that at least 500 birds were raised or used for breeding stock on the property during the 
309.29 	preceding year and that the owner provides a copy of the owner's most recent schedule F; 
309.30 	or (ii) for use on a shooting preserve licensed under section 97A.115;
309.31 	(6) insects primarily bred to be used as food for animals;
309.32 	(7) trees, grown for sale as a crop, including short rotation woody crops, and not 
309.33 	sold for timber, lumber, wood, or wood products; and
309.34 	(8) maple syrup taken from trees grown by a person licensed by the Minnesota 
309.35 	Department of Agriculture under chapter 28A as a food processor.
310.1 	(j) If a parcel used for agricultural purposes is also used for commercial or industrial 
310.2 	purposes, including but not limited to:
310.3 	(1) wholesale and retail sales;
310.4 	(2) processing of raw agricultural products or other goods;
310.5 	(3) warehousing or storage of processed goods; and
310.6 	(4) office facilities for the support of the activities enumerated in clauses (1), (2), 
310.7 	and (3),
310.8 	the assessor shall classify the part of the parcel used for agricultural purposes as class 
310.9 	1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 
310.10 	use. The grading, sorting, and packaging of raw agricultural products for first sale is 
310.11 	considered an agricultural purpose. A greenhouse or other building where horticultural 
310.12 	or nursery products are grown that is also used for the conduct of retail sales must be 
310.13 	classified as agricultural if it is primarily used for the growing of horticultural or nursery 
310.14 	products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 
310.15 	those products. Use of a greenhouse or building only for the display of already grown 
310.16 	horticultural or nursery products does not qualify as an agricultural purpose.
310.17 	(k) The assessor shall determine and list separately on the records the market value 
310.18 	of the homestead dwelling and the one acre of land on which that dwelling is located. If 
310.19 	any farm buildings or structures are located on this homesteaded acre of land, their market 
310.20 	value shall not be included in this separate determination.
310.21 	(l) Class 2d airport landing area consists of a landing area or public access area of 
310.22 	a privately owned public use airport. It has a class rate of one percent of market value. 
310.23 	To qualify for classification under this paragraph, a privately owned public use airport 
310.24 	must be licensed as a public airport under section 360.018. For purposes of this paragraph, 
310.25 	"landing area" means that part of a privately owned public use airport properly cleared, 
310.26 	regularly maintained, and made available to the public for use by aircraft and includes 
310.27 	runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. 
310.28 	A landing area also includes land underlying both the primary surface and the approach 
310.29 	surfaces that comply with all of the following:
310.30 	(i) the land is properly cleared and regularly maintained for the primary purposes of 
310.31 	the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 
310.32 	facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
310.33 	(ii) the land is part of the airport property; and
310.34 	(iii) the land is not used for commercial or residential purposes.
310.35 	The land contained in a landing area under this paragraph must be described and certified 
310.36 	by the commissioner of transportation. The certification is effective until it is modified, 
311.1 	or until the airport or landing area no longer meets the requirements of this paragraph. 
311.2 	For purposes of this paragraph, "public access area" means property used as an aircraft 
311.3 	parking ramp, apron, or storage hangar, or an arrival and departure building in connection 
311.4 	with the airport.
311.5 	(m) Class 2e consists of land with a commercial aggregate deposit that is not actively 
311.6 	being mined and is not otherwise classified as class 2a or 2b, provided that the land is not 
311.7 	located in a county that has elected to opt-out of the aggregate preservation program as 
311.8 	provided in section 273.1115, subdivision 6. It has a class rate of one percent of market 
311.9 	value. To qualify for classification under this paragraph, the property must be at least 
311.10 	ten contiguous acres in size and the owner of the property must record with the county 
311.11 	recorder of the county in which the property is located an affidavit containing:
311.12 	(1) a legal description of the property;
311.13 	(2) a disclosure that the property contains a commercial aggregate deposit that is not 
311.14 	actively being mined but is present on the entire parcel enrolled;
311.15 	(3) documentation that the conditional use under the county or local zoning 
311.16 	ordinance of this property is for mining; and
311.17 	(4) documentation that a permit has been issued by the local unit of government 
311.18 	or the mining activity is allowed under local ordinance. The disclosure must include a 
311.19 	statement from a registered professional geologist, engineer, or soil scientist delineating 
311.20 	the deposit and certifying that it is a commercial aggregate deposit.
311.21 	For purposes of this section and section 273.1115, "commercial aggregate deposit" 
311.22 	means a deposit that will yield crushed stone or sand and gravel that is suitable for use 
311.23 	as a construction aggregate; and "actively mined" means the removal of top soil and 
311.24 	overburden in preparation for excavation or excavation of a commercial deposit.
311.25 	(n) When any portion of the property under this subdivision or subdivision 22 begins 
311.26 	to be actively mined, the owner must file a supplemental affidavit within 60 days from 
311.27 	the day any aggregate is removed stating the number of acres of the property that is 
311.28 	actively being mined. The acres actively being mined must be (1) valued and classified 
311.29 	under subdivision 24 in the next subsequent assessment year, and (2) removed from the 
311.30 	aggregate resource preservation property tax program under section 273.1115, if the 
311.31 	land was enrolled in that program. Copies of the original affidavit and all supplemental 
311.32 	affidavits must be filed with the county assessor, the local zoning administrator, and the 
311.33 	Department of Natural Resources, Division of Land and Minerals. A supplemental 
311.34 	affidavit must be filed each time a subsequent portion of the property is actively mined, 
311.35 	provided that the minimum acreage change is five acres, even if the actual mining activity 
311.36 	constitutes less than five acres.
312.1 	(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are 
312.2 	not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions 
312.3 	in section 14.386 concerning exempt rules do not apply.

312.4 	EFFECTIVE DATE. This section is effective for taxes payable in 2014 and 
312.5 	thereafter.

312.6 	Sec. 10. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read:
312.7 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more 
312.8 	units and used or held for use by the owner or by the tenants or lessees of the owner 
312.9 	as a residence for rental periods of 30 days or more, excluding property qualifying for 
312.10 	class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 
312.11 	than hospitals exempt under section 272.02, and contiguous property used for hospital 
312.12 	purposes, without regard to whether the property has been platted or subdivided. The 
312.13 	market value of class 4a property has a class rate of 1.25 percent.
312.14 	(b) Class 4b includes:
312.15 	(1) residential real estate containing less than four units that does not qualify as class 
312.16 	4bb, other than seasonal residential recreational property;
312.17 	(2) manufactured homes not classified under any other provision;
312.18 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 
312.19 	farm classified under subdivision 23, paragraph (b) containing two or three units; and
312.20 	(4) unimproved property that is classified residential as determined under subdivision 
312.21 	33.
312.22 	The market value of class 4b property has a class rate of 1.25 percent.
312.23 	(c) Class 4bb includes:
312.24 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
312.25 	residential recreational property; and
312.26 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
312.27 	nonhomestead farm classified under subdivision 23, paragraph (b).
312.28 	Class 4bb property has the same class rates as class 1a property under subdivision 22.
312.29 	Property that has been classified as seasonal residential recreational property at 
312.30 	any time during which it has been owned by the current owner or spouse of the current 
312.31 	owner does not qualify for class 4bb.
312.32 	(d) Class 4c property includes:
312.33 	(1) except as provided in subdivision 22, paragraph (c), real and personal property 
312.34 	devoted to commercial temporary and seasonal residential occupancy for recreation 
312.35 	purposes, for not more than 250 days in the year preceding the year of assessment. For 
313.1 	purposes of this clause, property is devoted to a commercial purpose on a specific day 
313.2 	if any portion of the property is used for residential occupancy, and a fee is charged for 
313.3 	residential occupancy. Class 4c property under this clause must contain three or more 
313.4 	rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, 
313.5 	or individual camping site equipped with water and electrical hookups for recreational 
313.6 	vehicles. A camping pad offered for rent by a property that otherwise qualifies for class 
313.7 	4c under this clause is also class 4c under this clause regardless of the term of the rental 
313.8 	agreement, as long as the use of the camping pad does not exceed 250 days. In order for a 
313.9 	property to be classified under this clause, either (i) the business located on the property 
313.10 	must provide recreational activities, at least 40 percent of the annual gross lodging receipts 
313.11 	related to the property must be from business conducted during 90 consecutive days, 
313.12 	and either (A) at least 60 percent of all paid bookings by lodging guests during the year 
313.13 	must be for periods of at least two consecutive nights; or (B) at least 20 percent of the 
313.14 	annual gross receipts must be from charges for providing recreational activities, or (ii) the 
313.15 	business must contain 20 or fewer rental units, and must be located in a township or a city 
313.16 	with a population of 2,500 or less located outside the metropolitan area, as defined under 
313.17 	section 473.121, subdivision 2, that contains a portion of a state trail administered by the 
313.18 	Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or 
313.19 	more nights shall be counted as two bookings. Class 4c property also includes commercial 
313.20 	use real property used exclusively for recreational purposes in conjunction with other class 
313.21 	4c property classified under this clause and devoted to temporary and seasonal residential 
313.22 	occupancy for recreational purposes, up to a total of two acres, provided the property is 
313.23 	not devoted to commercial recreational use for more than 250 days in the year preceding 
313.24 	the year of assessment and is located within two miles of the class 4c property with which 
313.25 	it is used. In order for a property to qualify for classification under this clause, the owner 
313.26 	must submit a declaration to the assessor designating the cabins or units occupied for 250 
313.27 	days or less in the year preceding the year of assessment by January 15 of the assessment 
313.28 	year. Those cabins or units and a proportionate share of the land on which they are located 
313.29 	must be designated class 4c under this clause as otherwise provided. The remainder of the 
313.30 	cabins or units and a proportionate share of the land on which they are located will be 
313.31 	designated as class 3a. The owner of property desiring designation as class 4c property 
313.32 	under this clause must provide guest registers or other records demonstrating that the units 
313.33 	for which class 4c designation is sought were not occupied for more than 250 days in the 
313.34 	year preceding the assessment if so requested. The portion of a property operated as a 
313.35 	(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other 
313.36 	nonresidential facility operated on a commercial basis not directly related to temporary and 
314.1 	seasonal residential occupancy for recreation purposes does not qualify for class 4c. For 
314.2 	the purposes of this paragraph, "recreational activities" means renting ice fishing houses, 
314.3 	boats and motors, snowmobiles, downhill or cross-country ski equipment; providing 
314.4 	marina services, launch services, or guide services; or selling bait and fishing tackle;
314.5 	(2) qualified property used as a golf course if:
314.6 	(i) it is open to the public on a daily fee basis. It may charge membership fees or 
314.7 	dues, but a membership fee may not be required in order to use the property for golfing, 
314.8 	and its green fees for golfing must be comparable to green fees typically charged by 
314.9 	municipal courses; and
314.10 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
314.11 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 
314.12 	with the golf course is classified as class 3a property;
314.13 	(3) real property up to a maximum of three acres of land owned and used by a 
314.14 	nonprofit community service oriented organization and not used for residential purposes 
314.15 	on either a temporary or permanent basis, provided that:
314.16 	(i) the property is not used for a revenue-producing activity for more than six days 
314.17 	in the calendar year preceding the year of assessment; or
314.18 	(ii) the organization makes annual charitable contributions and donations at least 
314.19 	equal to the property's previous year's property taxes and the property is allowed to be 
314.20 	used for public and community meetings or events for no charge, as appropriate to the 
314.21 	size of the facility.
314.22 	For purposes of this clause:
314.23 	(A) "charitable contributions and donations" has the same meaning as lawful 
314.24 	gambling purposes under section 349.12, subdivision 25, excluding those purposes 
314.25 	relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
314.26 	(B) "property taxes" excludes the state general tax;
314.27 	(C) a "nonprofit community service oriented organization" means any corporation, 
314.28 	society, association, foundation, or institution organized and operated exclusively for 
314.29 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
314.30 	federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 
314.31 	Revenue Code; and
314.32 	(D) "revenue-producing activities" shall include but not be limited to property or that 
314.33 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
314.34 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
314.35 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
315.1 	insurance business, or office or other space leased or rented to a lessee who conducts a 
315.2 	for-profit enterprise on the premises.
315.3 	Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use 
315.4 	of the property for social events open exclusively to members and their guests for periods 
315.5 	of less than 24 hours, when an admission is not charged nor any revenues are received by 
315.6 	the organization shall not be considered a revenue-producing activity.
315.7 	The organization shall maintain records of its charitable contributions and donations 
315.8 	and of public meetings and events held on the property and make them available upon 
315.9 	request any time to the assessor to ensure eligibility. An organization meeting the 
315.10 	requirement under item (ii) must file an application by May 1 with the assessor for 
315.11 	eligibility for the current year's assessment. The commissioner shall prescribe a uniform 
315.12 	application form and instructions;
315.13 	(4) postsecondary student housing of not more than one acre of land that is owned by 
315.14 	a nonprofit corporation organized under chapter 317A and is used exclusively by a student 
315.15 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
315.16 	miles of the border of a college campus;
315.17 	(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, 
315.18 	excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii) 
315.19 	manufactured home parks as defined in section 327.14, subdivision 3, that are described in 
315.20 	section 273.124, subdivision 3a;
315.21 	(6) real property that is actively and exclusively devoted to indoor fitness, health, 
315.22 	social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 
315.23 	and is located within the metropolitan area as defined in section 473.121, subdivision 2;
315.24 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt 
315.25 	under section 272.01, subdivision 2, and the land on which it is located, provided that:
315.26 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
315.27 	Airports Commission, or group thereof; and
315.28 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the 
315.29 	leased premise, prohibits commercial activity performed at the hangar.
315.30 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 
315.31 	be filed by the new owner with the assessor of the county where the property is located 
315.32 	within 60 days of the sale;
315.33 	(8) a privately owned noncommercial aircraft storage hangar not exempt under 
315.34 	section 272.01, subdivision 2, and the land on which it is located, provided that:
315.35 	(i) the land abuts a public airport; and
316.1 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed 
316.2 	agreement restricting the use of the premises, prohibiting commercial use or activity 
316.3 	performed at the hangar; and
316.4 	(9) residential real estate, a portion of which is used by the owner for homestead 
316.5 	purposes, and that is also a place of lodging, if all of the following criteria are met:
316.6 	(i) rooms are provided for rent to transient guests that generally stay for periods 
316.7 	of 14 or fewer days;
316.8 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated 
316.9 	in the basic room rate;
316.10 	(iii) meals are not provided to the general public except for special events on fewer 
316.11 	than seven days in the calendar year preceding the year of the assessment; and
316.12 	(iv) the owner is the operator of the property.
316.13 	The market value subject to the 4c classification under this clause is limited to five rental 
316.14 	units. Any rental units on the property in excess of five, must be valued and assessed as 
316.15 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
316.16 	be classified as class 1a property under subdivision 22;
316.17 	(10) real property up to a maximum of three acres and operated as a restaurant 
316.18 	as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 
316.19 	as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 
316.20 	is either devoted to commercial purposes for not more than 250 consecutive days, or 
316.21 	receives at least 60 percent of its annual gross receipts from business conducted during 
316.22 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
316.23 	included in determining the property's qualification under subitem (B). The property's 
316.24 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
316.25 	sales located on the premises must be excluded. Owners of real property desiring 4c 
316.26 	classification under this clause must submit an annual declaration to the assessor by 
316.27 	February 1 of the current assessment year, based on the property's relevant information for 
316.28 	the preceding assessment year;
316.29 	(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used 
316.30 	as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to 
316.31 	the public and devoted to recreational use for marina services. The marina owner must 
316.32 	annually provide evidence to the assessor that it provides services, including lake or river 
316.33 	access to the public by means of an access ramp or other facility that is either located on 
316.34 	the property of the marina or at a publicly owned site that abuts the property of the marina. 
316.35 	No more than 800 feet of lakeshore may be included in this classification. Buildings used 
316.36 	in conjunction with a marina for marina services, including but not limited to buildings 
317.1 	used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing 
317.2 	tackle, are classified as class 3a property; and
317.3 	(12) real and personal property devoted to noncommercial temporary and seasonal 
317.4 	residential occupancy for recreation purposes.
317.5 	Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 
317.6 	parcel of noncommercial seasonal residential recreational property under clause (12) 
317.7 	has the same class rates as class 4bb property, (ii) manufactured home parks assessed 
317.8 	under clause (5), item (i), have the same class rate as class 4b property, and the market 
317.9 	value of manufactured home parks assessed under clause (5), item (ii), has the same class 
317.10 	rate as class 4d property if more than 50 percent of the lots in the park are occupied by 
317.11 	shareholders in the cooperative corporation or association and a class rate of one percent if 
317.12 	50 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential 
317.13 	recreational property and marina recreational land as described in clause (11), has a 
317.14 	class rate of one percent for the first $500,000 of market value, and 1.25 percent for the 
317.15 	remaining market value, (iv) the market value of property described in clause (4) has a 
317.16 	class rate of one percent, (v) the market value of property described in clauses (2), (6), and 
317.17 	(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property 
317.18 	in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
317.19 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
317.20 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 
317.21 	of the units in the building qualify as low-income rental housing units as certified under 
317.22 	section 273.128, subdivision 3, only the proportion of qualifying units to the total number 
317.23 	of units in the building qualify for class 4d. The remaining portion of the building shall be 
317.24 	classified by the assessor based upon its use. Class 4d also includes the same proportion of 
317.25 	land as the qualifying low-income rental housing units are to the total units in the building. 
317.26 	For all properties qualifying as class 4d, the market value determined by the assessor must 
317.27 	be based on the normal approach to value using normal unrestricted rents.
317.28 	Class 4d property has a class rate of 0.75 percent.

317.29 	EFFECTIVE DATE. This section is effective for taxes payable in 2014 and 
317.30 	thereafter.

317.31 	Sec. 11. Minnesota Statutes 2012, section 273.19, subdivision 1, is amended to read:
317.32 		Subdivision 1.Tax-exempt property; lease. Except as provided in subdivision 3 or 
317.33 	4, tax-exempt property held under a lease for a term of at least one year, and not taxable 
317.34 	under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be 
317.35 	considered, for all purposes of taxation, as the property of the person holding it. In this 
318.1 	subdivision, "tax-exempt property" means property owned by the United States, the state
318.2 	 or any of its political subdivisions, a school, or any religious, scientific, or benevolent 
318.3 	society or institution, incorporated or unincorporated, or any corporation whose property 
318.4 	is not taxed in the same manner as other property. This subdivision does not apply to 
318.5 	property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses 
318.6 	(2), (3), and (4), or to property exempt from taxation under section 272.0213.

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

318.8 	Sec. 12. Minnesota Statutes 2012, section 273.372, subdivision 4, is amended to read:
318.9 		Subd. 4.Administrative appeals. (a) Companies that submit the reports under 
318.10 	section 270.82 or 273.371 by the date specified in that section, or by the date specified by 
318.11 	the commissioner in an extension, may appeal administratively to the commissioner prior 
318.12 	to bringing an action in court by submitting.
318.13 	(b) Companies that must submit reports under section 270.82 must submit a written 
318.14 	request with to the commissioner for a conference within ten days after the date of the 
318.15 	commissioner's valuation certification or notice to the company, or by May June 15, 
318.16 	whichever is earlier.
318.17 	(c) Companies that submit reports under section 273.371 must submit a written 
318.18 	request to the commissioner for a conference within ten days after the date of the 
318.19 	commissioner's valuation certification or notice to the company, or by July 1, whichever 
318.20 	is earlier.
318.21 	(d) The commissioner shall conduct the conference upon the commissioner's entire 
318.22 	files and records and such further information as may be offered. The conference must 
318.23 	be held no later than 20 days after the date of the commissioner's valuation certification 
318.24 	or notice to the company, or by the date specified by the commissioner in an extension. 
318.25 	Within 60 days after the conference the commissioner shall make a final determination of 
318.26 	the matter and shall notify the company promptly of the determination. The conference 
318.27 	is not a contested case hearing.
318.28 	(b) (e) In addition to the opportunity for a conference under paragraph (a), the 
318.29 	commissioner shall also provide the railroad and utility companies the opportunity to 
318.30 	discuss any questions or concerns relating to the values established by the commissioner 
318.31 	through certification or notice in a less formal manner. This does not change or modify 
318.32 	the deadline for requesting a conference under paragraph (a), the deadline in section 
318.33 	271.06 for appealing an order of the commissioner, or the deadline in section 278.01 for 
318.34 	appealing property taxes in court.

319.1 	EFFECTIVE DATE. This section is effective beginning with assessment year 2014.

319.2 	Sec. 13. Minnesota Statutes 2012, section 273.39, is amended to read:
319.3 	273.39 RURAL AREA.
319.4 	As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean 
319.5 	any area of the state not included within the boundaries of any incorporated statutory 
319.6 	city or home rule charter city, and such term shall be deemed to include both farm and 
319.7 	nonfarm population thereof.

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

319.9 	Sec. 14. Minnesota Statutes 2012, section 279.06, subdivision 1, is amended to read:
319.10 		Subdivision 1.List and notice. Within five days after the filing of such list, the 
319.11 	court administrator shall return a copy thereof to the county auditor, with a notice prepared 
319.12 	and signed by the court administrator, and attached thereto, which may be substantially in 
319.13 	the following form:

319.14	State of Minnesota
	)
			
319.15		) ss.
			
319.16	County of 
........	)
			
319.17				District Court
	
319.18				........Judicial District.
	
319.19 	The state of Minnesota, to all persons, companies, or corporations who have or claim 
319.20 	any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of 
319.21 	land described in the list hereto attached:
319.22 	The list of taxes and penalties on real property for the county of ............................... 
319.23 	remaining delinquent on the first Monday in January, ......., has been filed in the office of 
319.24 	the court administrator of the district court of said county, of which that hereto attached is a 
319.25 	copy. Therefore, you, and each of you, are hereby required to file in the office of said court 
319.26 	administrator, on or before the 20th day after the publication of this notice and list, your 
319.27 	answer, in writing, setting forth any objection or defense you may have to the taxes, or any 
319.28 	part thereof, upon any parcel of land described in the list, in, to, or on which you have or 
319.29 	claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will 
319.30 	be entered against such parcel of land for the taxes on such list appearing against it, and 
319.31 	for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to 
319.32 	the state of Minnesota on the second Monday in May, ....... The period of redemption for 
319.33 	all lands sold to the state at a tax judgment sale shall be three years from the date of sale to 
319.34 	the state of Minnesota if the land is within an incorporated area unless it is:
320.1 	(a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22;
320.2 	(b) homesteaded agricultural land as defined in section 273.13, subdivision 23, 
320.3 	paragraph (a);
320.4 	(c) seasonal residential recreational land as defined in section 273.13, subdivisions 
320.5 	22, paragraph (c), and 25, paragraph (d), clause (1), in which event the period of 
320.6 	redemption is five years from the date of sale to the state of Minnesota;
320.7 	(d) abandoned property and pursuant to section 281.173 a court order has been 
320.8 	entered shortening the redemption period to five weeks; or
320.9 	(e) vacant property as described under section 281.174, subdivision 2, and for which 
320.10 	a court order is entered shortening the redemption period under section 281.174.
320.11 	The period of redemption for all other lands sold to the state at a tax judgment sale 
320.12 	shall be five years from the date of sale.
320.13 	Inquiries as to the proceedings set forth above can be made to the county auditor of 
320.14 	..... county whose address is ......

320.15		(Signed) ........,
	
320.16
320.17		Court Administrator of the District Court of the
County of 
........	
320.18		(Here insert list.)
	
320.19 	The notice must contain a narrative description of the various periods to redeem 
320.20 	specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the 
320.21 	commissioner of revenue under subdivision 2.
320.22 	The list referred to in the notice shall be substantially in the following form:
320.23 	List of real property for the county of ......................., on which taxes remain 
320.24 	delinquent on the first Monday in January, .......
320.25 	Town of (Fairfield),
320.26 	Township (40), Range (20),

320.27
320.28
320.29
320.30
320.31
320.32
320.33
320.34	Names (and Current 
Filed Addresses) for 
the Taxpayers and Fee 
Owners and in Addition 
Those Parties Who Have 
Filed Their Addresses 
Pursuant to section 
276.041
	Subdivision of
Section
	Section
	Tax Parcel
Number
	Total Tax 
and Penalty
	
320.35					$ cts.

320.36
320.37	John Jones (825 Fremont 
Fairfield, MN 55000)
	S.E. 1/4 of S.W. 1/4
	10
	23101
	2.20

321.1
321.2
321.3
321.4
321.5
321.6
321.7
321.8
321.9321.10
321.11
321.12
321.13
321.14
321.15
321.16
321.17
321.18
321.19
	Bruce Smith (2059 Hand 
Fairfield, MN 55000) 
and Fairfield State 
Bank (100 Main Street 
Fairfield, MN 55000)
	That part of N.E. 1/4 
of S.W. 1/4 desc. as 
follows: Beg. at the 
S.E. corner of said N.E. 
1/4 of S.W. 1/4; thence 
N. along the E. line of 
said N.E. 1/4 of S.W. 
1/4 a distance of 600 
ft.; thence W. parallel 
with the S. line of said 
N.E. 1/4 of S.W. 1/4 
a distance of 600 ft.; 
thence S. parallel with 
said E. line a distance of 
600 ft. to S. line of said 
N.E. 1/4 of S.W. 1/4; 
thence E. along said S. 
line a distance of 600 ft. 
to the point of beg.
	21
	33211
	3.15
	
321.20 	As to platted property, the form of heading shall conform to circumstances and be 
321.21 	substantially in the following form:
321.22 	City of (Smithtown)
321.23 	Brown's Addition, or Subdivision

321.24
321.25
321.26
321.27
321.28
321.29
321.30
321.31	Names (and Current 
Filed Addresses) for 
the Taxpayers and Fee 
Owners and in Addition 
Those Parties Who Have 
Filed Their Addresses 
Pursuant to section 
276.041
	Lot
	Block
	Tax Parcel
Number
	Total Tax
and Penalty
	
321.32					$ cts.

321.33
321.34	John Jones (825 Fremont 
Fairfield, MN 55000)
	15
	9
	58243
	2.20
	
321.35
321.36
321.37
321.38
321.39	Bruce Smith (2059 Hand 
Fairfield, MN 55000) 
and Fairfield State 
Bank (100 Main Street 
Fairfield, MN 55000)
	16
	9
	58244
	3.15
	
321.40 	The names, descriptions, and figures employed in parentheses in the above forms are 
321.41 	merely for purposes of illustration.
321.42 	The name of the town, township, range or city, and addition or subdivision, as the 
321.43 	case may be, shall be repeated at the head of each column of the printed lists as brought 
321.44 	forward from the preceding column.
321.45 	Errors in the list shall not be deemed to be a material defect to affect the validity 
321.46 	of the judgment and sale.

322.1 	EFFECTIVE DATE. This section is effective for lists and notices required after 
322.2 	December 31, 2013.

322.3 	Sec. 15. Minnesota Statutes 2012, section 290B.04, subdivision 2, is amended to read:
322.4 		Subd. 2.Approval; recording. The commissioner shall approve all initial 
322.5 	applications that qualify under this chapter and shall notify qualifying homeowners on or 
322.6 	before December 1. The commissioner may investigate the facts or require confirmation 
322.7 	in regard to an application. The commissioner shall record or file a notice of qualification 
322.8 	for deferral, including the names of the qualifying homeowners and a legal description 
322.9 	of the property, in the office of the county recorder, or registrar of titles, whichever is 
322.10 	applicable, in the county where the qualifying property is located. The notice must state 
322.11 	that it serves as a notice of lien and that it includes deferrals under this section for future 
322.12 	years. The commissioner shall prescribe the form of the notice. Execution of the notice 
322.13 	by the original or facsimile signature of the commissioner or a delegate entitles them to 
322.14 	be recorded, and no other attestation, certification, or acknowledgment is necessary. The 
322.15 	homeowner shall pay the recording or filing fees for the notice, which, notwithstanding 
322.16 	section 357.18, shall be paid by the homeowner at the time of satisfaction of the lien.

322.17 	EFFECTIVE DATE. This section is effective for notices that are both executed 
322.18 	and recorded after June 30, 2013.

322.19 	Sec. 16. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read:
322.20 		Subd. 3.Occupation tax; other ores.  Every person engaged in the business of 
322.21 	mining, refining, or producing ores, metals, or minerals in this state, except iron ore or 
322.22 	taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided 
322.23 	in this subdivision. For purposes of this subdivision, mining includes the application of 
322.24 	hydrometallurgical processes. Hydrometallurgical processes are processes that extract 
322.25 	the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and 
322.26 	recover the ore, metal, or mineral. The tax is determined in the same manner as the tax 
322.27 	imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17, 
322.28 	subdivision 4, and 290.191, subdivision 2, do not apply, and the occupation tax must 
322.29 	be computed by applying to taxable income the rate of 2.45 percent. A person subject 
322.30 	to occupation tax under this section shall apportion its net income on the basis of the 
322.31 	percentage obtained by taking the sum of:
322.32 	(1) 75 percent of the percentage which the sales made within this state in connection 
322.33 	with the trade or business during the tax period are of the total sales wherever made in 
322.34 	connection with the trade or business during the tax period;
323.1 	(2) 12.5 percent of the percentage which the total tangible property used by the 
323.2 	taxpayer in this state in connection with the trade or business during the tax period is of 
323.3 	the total tangible property, wherever located, used by the taxpayer in connection with the 
323.4 	trade or business during the tax period; and
323.5 	(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 
323.6 	in this state or paid in respect to labor performed in this state in connection with the trade 
323.7 	or business during the tax period are of the taxpayer's total payrolls paid or incurred in 
323.8 	connection with the trade or business during the tax period.
323.9 	The tax is in addition to all other taxes.

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

323.11 	Sec. 17. Minnesota Statutes 2012, section 298.018, is amended to read:
323.12 	298.018 DISTRIBUTION OF PROCEEDS.
323.13 		Subdivision 1.Within taconite assistance area. The proceeds of the tax paid 
323.14 	under sections 298.015 and 298.016 on ores, metals, or minerals and energy resources
323.15 	 mined or extracted within the taconite assistance area defined in section 273.1341, shall 
323.16 	be allocated as follows:
323.17 	(1) five percent to the city or town within which the minerals or energy resources 
323.18 	are mined or extracted;
323.19 	(2) ten percent to the taconite municipal aid account to be distributed as provided 
323.20 	in section 298.282;
323.21 	(3) ten percent to the school district within which the minerals or energy resources 
323.22 	are mined or extracted;
323.23 	(4) 20 percent to a group of school districts comprised of those school districts 
323.24 	wherein the mineral or energy resource was mined or extracted or in which there is a 
323.25 	qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion 
323.26 	to school district indexes as follows: for each school district, its pupil units determined 
323.27 	under section 126C.05 for the prior school year shall be multiplied by the ratio of the 
323.28 	average adjusted net tax capacity per pupil unit for school districts receiving aid under 
323.29 	this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 
323.30 	ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 
323.31 	Each district shall receive that portion of the distribution which its index bears to the sum 
323.32 	of the indices for all school districts that receive the distributions;
323.33 	(5) 20 percent to the county within which the minerals or energy resources are 
323.34 	mined or extracted;
324.1 	(6) 20 percent to St. Louis County acting as the counties' fiscal agent to be 
324.2 	distributed as provided in sections 273.134 to 273.136;
324.3 	(7) five percent to the Iron Range Resources and Rehabilitation Board for the 
324.4 	purposes of section 298.22;
324.5 	(8) five percent to the Douglas J. Johnson economic protection trust fund; and
324.6 	(9) five percent to the taconite environmental protection fund.
324.7 	The proceeds of the tax shall be distributed on July 15 each year.
324.8 		Subd. 2.Outside taconite assistance area. The proceeds of the tax paid under 
324.9 	sections 298.015 and 298.016 on ores, metals, or minerals and energy resources mined 
324.10 	or extracted outside of the taconite assistance area defined in section 273.1341, shall 
324.11 	be deposited in the general fund.

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

324.13 	Sec. 18. Minnesota Statutes 2012, section 373.01, subdivision 1, is amended to read:
324.14 		Subdivision 1.Public corporation; listed powers. (a) Each county is a body politic 
324.15 	and corporate and may:
324.16 	(1) Sue and be sued.
324.17 	(2) Acquire and hold real and personal property for the use of the county, and lands 
324.18 	sold for taxes as provided by law.
324.19 	(3) Purchase and hold for the benefit of the county real estate sold by virtue of 
324.20 	judicial proceedings, to which the county is a party.
324.21 	(4) Sell, lease, and convey real or personal estate owned by the county, and give 
324.22 	contracts or options to sell, lease, or convey it, and make orders respecting it as deemed 
324.23 	conducive to the interests of the county's inhabitants.
324.24 	(5) Make all contracts and do all other acts in relation to the property and concerns 
324.25 	of the county necessary to the exercise of its corporate powers.
324.26 	(b) No sale, lease, or conveyance of real estate owned by the county, except the lease 
324.27 	of a residence acquired for the furtherance of an approved capital improvement project, nor 
324.28 	any contract or option for it, shall be valid, without first advertising for bids or proposals in 
324.29 	the official newspaper of the county for three consecutive weeks and once in a newspaper 
324.30 	of general circulation in the area where the property is located. The notice shall state the 
324.31 	time and place of considering the proposals, contain a legal description of any real estate, 
324.32 	and a brief description of any personal property. Leases that do not exceed $15,000 for any 
324.33 	one year may be negotiated and are not subject to the competitive bid procedures of this 
324.34 	section. All proposals estimated to exceed $15,000 in any one year shall be considered at 
325.1 	the time set for the bid opening, and the one most favorable to the county accepted, but the 
325.2 	county board may, in the interest of the county, reject any or all proposals.
325.3 	(c) Sales of personal property the value of which is estimated to be $15,000 or 
325.4 	more shall be made only after advertising for bids or proposals in the county's official 
325.5 	newspaper, on the county's Web site, or in a recognized industry trade journal. At the same 
325.6 	time it posts on its Web site or publishes in a trade journal, the county must publish in the 
325.7 	official newspaper, either as part of the minutes of a regular meeting of the county board 
325.8 	or in a separate notice, a summary of all requests for bids or proposals that the county 
325.9 	advertises on its Web site or in a trade journal. After publication in the official newspaper, 
325.10 	on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by 
325.11 	the electronic selling process authorized in section 471.345, subdivision 17. Sales of 
325.12 	personal property the value of which is estimated to be less than $15,000 may be made 
325.13 	either on competitive bids or in the open market, in the discretion of the county board. 
325.14 	"Web site" means a specific, addressable location provided on a server connected to the 
325.15 	Internet and hosting World Wide Web pages and other files that are generally accessible 
325.16 	on the Internet all or most of a day.
325.17 	(d) Notwithstanding anything to the contrary herein, the county may, when acquiring 
325.18 	real property for county highway right-of-way, exchange parcels of real property of 
325.19 	substantially similar or equal value without advertising for bids. The estimated values for 
325.20 	these parcels shall be determined by the county assessor.
325.21 	(e) Notwithstanding anything in this section to the contrary, the county may, when 
325.22 	acquiring real property for purposes other than county highway right-of-way, exchange 
325.23 	parcels of real property of substantially similar or equal value without advertising for 
325.24 	bids. The estimated values for these parcels must be determined by the county assessor 
325.25 	or a private appraisal performed by a licensed Minnesota real estate appraiser. For the 
325.26 	purpose of determining for the county the estimated values of parcels proposed to be 
325.27 	exchanged, the county assessor need not be licensed under chapter 82B. Before giving 
325.28 	final approval to any exchange of land, the county board shall hold a public hearing on 
325.29 	the exchange. At least two weeks before the hearing, the county auditor shall post a 
325.30 	notice in the auditor's office and the official newspaper of the county of the hearing that 
325.31 	contains a description of the lands affected.
325.32 	(f) If real estate or personal property remains unsold after advertising for and 
325.33 	consideration of bids or proposals the county may employ a broker to sell the property. 
325.34 	The broker may sell the property for not less than 90 percent of its appraised market value 
325.35 	as determined by the county. The broker's fee shall be set by agreement with the county but 
325.36 	may not exceed ten percent of the sale price and must be paid from the proceeds of the sale.
326.1 	(g) A county or its agent may rent a county-owned residence acquired for the 
326.2 	furtherance of an approved capital improvement project subject to the conditions set 
326.3 	by the county board and not subject to the conditions for lease otherwise provided by 
326.4 	paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h).
326.5 	(h) In no case shall lands be disposed of without there being reserved to the county 
326.6 	all iron ore and other valuable minerals in and upon the lands, with right to explore for, 
326.7 	mine and remove the iron ore and other valuable minerals, nor shall the minerals and 
326.8 	mineral rights be disposed of, either before or after disposition of the surface rights, 
326.9 	otherwise than by mining lease, in similar general form to that provided by section 93.20 
326.10 	for mining leases affecting state lands. The lease shall be for a term not exceeding 50 
326.11 	years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of 
326.12 	2,240 pounds, and fix a minimum amount of royalty payable during each year, whether 
326.13 	mineral is removed or not. Prospecting options for mining leases may be granted for 
326.14 	periods not exceeding one year. The options shall require, among other things, periodical 
326.15 	showings to the county board of the results of exploration work done.
326.16 	(i) Notwithstanding anything in this subdivision to the contrary, the county may, 
326.17 	when selling real property owned in fee simple that cannot be improved because of 
326.18 	noncompliance with local ordinances regarding minimum area, shape, frontage, or access, 
326.19 	proceed to sell the nonconforming parcel without advertising for bid. At the county's 
326.20 	discretion, the real property may be restricted to sale to adjoining landowners or may be 
326.21 	sold to any other interested party. The property shall be sold to the highest bidder, but in no 
326.22 	case shall the property be sold for less than 90 percent of its fair market value as determined 
326.23 	by the county assessor. All owners of land adjoining the land to be sold shall be given a 
326.24 	written notice at least 30 days before the sale. This paragraph shall be liberally construed to 
326.25 	encourage the sale of nonconforming real property and promote its return to the tax roles.

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

326.27 	Sec. 19.  REPEALER.
 326.28 	Minnesota Statutes 2012, sections 272.69; and 273.11, subdivisions 1a and 22, are 
326.29 	repealed.

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

327.1 	ARTICLE 18
327.2 	DEPARTMENT OF REVENUE MISCELLANEOUS PROVISIONS

327.3 	Section 1. Minnesota Statutes 2012, section 16A.46, is amended to read:
327.4 	16A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.
327.5 		Subdivision 1.Duplicate warrant. The commissioner may issue a duplicate of an 
327.6 	unpaid warrant to an owner if the owner certifies that the original was lost or destroyed. The 
327.7 	commissioner may require certification be documented by affidavit. The commissioner 
327.8 	may refuse to issue a duplicate of an unpaid state warrant. If the commissioner acts in 
327.9 	good faith, the commissioner is not liable, whether the application is granted or denied.
327.10 		Subd. 2.Original warrant is void. When the duplicate is issued, the original is 
327.11 	void. The commissioner may require an indemnity bond from the applicant to the state for 
327.12 	double the amount of the warrant for anyone damaged by the issuance of the duplicate. 
327.13 	The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the 
327.14 	commissioner acts in good faith the commissioner is not liable, whether the application is 
327.15 	granted or denied is not liable to any holder who took the void original warrant for value, 
327.16 	whether or not the commissioner required an indemnity bond from the applicant. 
327.17 		Subd. 3.Unpaid refund or rebate. For an unpaid refund or rebate issued under a 
327.18 	tax law administered by the commissioner of revenue that has been lost or destroyed, an 
327.19 	affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued 
327.20 	to the same name and Social Security number as the original warrant and that information 
327.21 	is verified on a tax return filed by the recipient.

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

327.23 	Sec. 2. Minnesota Statutes 2012, section 270C.38, subdivision 1, is amended to read:
327.24 		Subdivision 1.Sufficient notice. (a) If no method of notification of a written 
327.25 	determination or action of the commissioner is otherwise specifically provided for by 
327.26 	law, notice of the determination or action sent postage prepaid by United States mail to 
327.27 	the taxpayer or other person affected by the determination or action at the taxpayer's 
327.28 	or person's last known address, is sufficient. If the taxpayer or person being notified is 
327.29 	deceased or is under a legal disability, or, in the case of a corporation being notified that 
327.30 	has terminated its existence, notice to the last known address of the taxpayer, person, or 
327.31 	corporation is sufficient, unless the department has been provided with a new address by a 
327.32 	party authorized to receive notices from the commissioner.
328.1 	(b) If a taxpayer or other person agrees to accept notification by electronic means, 
328.2 	notice of a determination or action of the commissioner sent by electronic mail to the 
328.3 	taxpayer's or person's last known electronic mailing address as provided for in section 
328.4 	325L.08 is sufficient.

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

328.6 	Sec. 3. Minnesota Statutes 2012, section 270C.42, subdivision 2, is amended to read:
328.7 		Subd. 2.Penalty for failure to pay electronically. In addition to other applicable 
328.8 	penalties imposed by law, after notification from the commissioner to the taxpayer that 
328.9 	payments for a tax payable to the commissioner are required to be made by electronic 
328.10 	means, and the payments are remitted by some other means, there is a penalty in the 
328.11 	amount of five percent of each payment that should have been remitted electronically. 
328.12 	After the commissioner's initial notification to the taxpayer that payments are required to 
328.13 	be made by electronic means, the commissioner is not required to notify the taxpayer in 
328.14 	subsequent periods if the initial notification specified the amount of tax liability at which a 
328.15 	taxpayer is required to remit payments by electronic means. The penalty can be abated 
328.16 	under the abatement procedures prescribed in section 270C.34 if the failure to remit the 
328.17 	payment electronically is due to reasonable cause. The penalty bears interest at the rate 
328.18 	specified in section 270C.40 from the due date of the payment of the tax provided in 
328.19 	section 270C.40, subdivision 3, to the date of payment of the penalty.

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

328.21 	Sec. 4. Minnesota Statutes 2012, section 287.385, subdivision 7, is amended to read:
328.22 		Subd. 7.Interest on penalties. A penalty imposed under this chapter bears interest 
328.23 	from the date payment was required to be paid, including any extensions, provided in 
328.24 	section 270C.40, subdivision 3, to the date of payment of the penalty.

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

328.26 	Sec. 5. Minnesota Statutes 2012, section 289A.55, subdivision 9, is amended to read:
328.27 		Subd. 9.Interest on penalties. (a) A penalty imposed under section 289A.60, 
328.28 	subdivision 1, 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment 
328.29 	was required to be filed or paid, including any extensions provided in section 270C.40, 
328.30 	subdivision 3, to the date of payment of the penalty.
329.1 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
329.2 	60 days from the date of notice. In that case interest is imposed from the date of notice 
329.3 	to the date of payment.

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

329.5 	Sec. 6. Minnesota Statutes 2012, section 289A.60, subdivision 4, is amended to read:
329.6 		Subd. 4.Substantial understatement of liability; penalty. (a) The commissioner 
329.7 	of revenue shall impose a penalty for substantial understatement of any tax payable to the 
329.8 	commissioner, except a tax imposed under chapter 297A.
329.9 	(b) There must be added to the tax an amount equal to 20 percent of the amount of any 
329.10 	underpayment attributable to the understatement. There is a substantial understatement of 
329.11 	tax for the period if the amount of the understatement for the period exceeds the greater of:
329.12 	(1) ten percent of the tax required to be shown on the return for the period; or
329.13 	(2)(i) $10,000 in the case of a mining company or a corporation, other than an S 
329.14 	corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or 
329.15 	section 298.01 or 298.015, or
329.16 	(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or 
329.17 	a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015.
329.18 	(c) For a corporation, other than an S corporation, there is also a substantial 
329.19 	understatement of tax for any taxable year if the amount of the understatement for the 
329.20 	taxable year exceeds the lesser of:
329.21 	(1) ten percent of the tax required to be shown on the return for the taxable year 
329.22 	(or, if greater, $10,000); or
329.23 	(2) $10,000,000.
329.24 	(d) The term "understatement" means the excess of the amount of the tax required 
329.25 	to be shown on the return for the period, over the amount of the tax imposed that is 
329.26 	shown on the return. The excess must be determined without regard to items to which 
329.27 	subdivision 27 applies. The amount of the understatement shall be reduced by that part of 
329.28 	the understatement that is attributable to the tax treatment of any item by the taxpayer if 
329.29 	(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to 
329.30 	which the relevant facts affecting the item's tax treatment are adequately disclosed in the 
329.31 	return or in a statement attached to the return and (ii) there is a reasonable basis for the tax 
329.32 	treatment of the item. The exception for substantial authority under clause (1) does not 
329.33 	apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the 
329.34 	Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment 
329.35 	of an item attributable to a multiple-party financing transaction if the treatment does not 
330.1 	clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B) 
330.2 	of the Internal Revenue Code. The special rules in cases involving tax shelters provided in 
330.3 	section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax 
330.4 	shelter the principal purpose of which is the avoidance or evasion of state taxes.
330.5 	(e) The commissioner may abate all or any part of the addition to the tax provided 
330.6 	by this section on a showing by the taxpayer that there was reasonable cause for the 
330.7 	understatement, or part of it, and that the taxpayer acted in good faith. The additional tax 
330.8 	and penalty shall bear interest at the rate as specified in section 270C.40from the time 
330.9 	the tax should have been paid until paid.

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

330.11 	Sec. 7. Minnesota Statutes 2012, section 296A.01, is amended by adding a subdivision 
330.12 	to read:
330.13 		Subd. 8b.Biobutanol. "Biobutanol" means isobutyl alcohol produced by 
330.14 	fermenting agriculturally generated organic material that is to be blended with gasoline 
330.15 	and meets either:
330.16 	(1) the initial ASTM Standard Specification for Butanol for Blending with Gasoline 
330.17 	for use as an Automotive Spark-Ignition Engine Fuel once it has been released by ASTM 
330.18 	for general distribution; or
330.19 	(2) in the absence of an ASTM Standard Specification, the following list of 
330.20 	requirements:
330.21 	(i) visually free of sediment and suspended matter;
330.22 	(ii) clear and bright at the ambient temperature of 21 degrees Celsius or the ambient 
330.23 	temperature whichever is higher;
330.24 	(iii) free of any adulterant or contaminant that can render it unacceptable for its 
330.25 	commonly used applications;
330.26 	(iv) contains not less than 96 volume percent isobutyl alcohol;
330.27 	(v) contains not more than 0.4 volume percent methanol;
330.28 	(vi) contains not more than 1.0 volume percent water as determined by ASTM 
330.29 	standard test method E203 or E1064;
330.30 	(vii) acidity (as acetic acid) of not more than 0.007 mass percent as determined 
330.31 	by ASTM standard test method D1613;
330.32 	(viii) solvent washed gum content of not more than 5.0 milligrams per 100 milliliters 
330.33 	as determined by ASTM standard test method D381;
330.34 	(ix) sulfur content of not more than 30 parts per million as determined by ASTM 
330.35 	standard test method D2622 or D5453; and
331.1 	(x) contains not more than 4 parts per million total inorganic sulfate.

331.2 	Sec. 8. Minnesota Statutes 2012, section 296A.01, subdivision 19, is amended to read:
331.3 		Subd. 19.E85. "E85" means a petroleum product that is a blend of agriculturally 
331.4 	derived denatured ethanol and gasoline or natural gasoline that typically contains not more 
331.5 	than 85 percent ethanol by volume, but at a minimum must contain 60 51 percent ethanol by 
331.6 	volume. For the purposes of this chapter, the energy content of E85 will be considered to be 
331.7 	82,000 BTUs per gallon. E85 produced for use as a motor fuel in alternative fuel vehicles 
331.8 	as defined in subdivision 5 must comply with ASTM specification D5798-07 D5798-11.

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

331.10 	Sec. 9. Minnesota Statutes 2012, section 296A.22, subdivision 1, is amended to read:
331.11 		Subdivision 1.Penalty for failure to pay tax, general rule. Upon the failure of 
331.12 	any person to pay any tax or fee when due, a penalty of one percent per day for the first 
331.13 	ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear 
331.14 	interest at the rate specified in section 270C.40 until paid.

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

331.16 	Sec. 10. Minnesota Statutes 2012, section 296A.22, subdivision 3, is amended to read:
331.17 		Subd. 3.Operating without license. If any person operates as a distributor, special 
331.18 	fuel dealer, bulk purchaser, or motor carrier without first securing the license required 
331.19 	under this chapter, any tax or fee imposed by this chapter shall become immediately due 
331.20 	and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, and
331.21 	 fees, and penalty shall bear interest at the rate specified in section 270C.40. The penalty 
331.22 	imposed in this subdivision shall bear interest from the date provided in section 270C.40, 
331.23 	subdivision 3, to the date of payment of the penalty.

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

331.25 	Sec. 11. Minnesota Statutes 2012, section 297B.11, is amended to read:
331.26 	297B.11 REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE; 
331.27 	POWERS.
331.28 	The state commissioner of revenue is charged with the administration of the 
331.29 	sales tax on motor vehicles. The commissioner may prescribe all rules not inconsistent 
331.30 	with the provisions of this chapter, necessary and advisable for the proper and efficient 
332.1 	administration of the law. The collection of this sales tax on motor vehicles shall be 
332.2 	carried out by the motor vehicle registrar who shall act as the agent of the commissioner 
332.3 	and who shall be subject to all rules not inconsistent with the provisions of this chapter, 
332.4 	that may be prescribed by the commissioner.
332.5 	The provisions of chapters 270C, 289A, and 297A relating to the commissioner's 
332.6 	authority to audit, assess, and collect the tax, and to issue refunds and to hear appeals, 
332.7 	are applicable to the sales tax on motor vehicles. The commissioner may impose civil 
332.8 	penalties as provided in chapters 289A and 297A, and the additional tax and penalties 
332.9 	are subject to interest at the rate provided in section 270C.40 from the date provided in 
332.10 	section 270C.40, subdivision 3, until paid.

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

332.12 	Sec. 12. Minnesota Statutes 2012, section 297E.14, subdivision 7, is amended to read:
332.13 		Subd. 7.Interest on penalties. (a) A penalty imposed under section 297E.12, 
332.14 	subdivision 1, 2, 3, 4, or 5, bears interest from the date the return or payment was required 
332.15 	to be filed or paid, including any extensions provided in section 270C.40, subdivision 
332.16 	3, to the date of payment of the penalty.
332.17 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
332.18 	ten days from the date of notice. In that case interest is imposed from the date of notice 
332.19 	to the date of payment.

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

332.21 	Sec. 13. Minnesota Statutes 2012, section 297F.09, subdivision 9, is amended to read:
332.22 		Subd. 9.Interest. The amount of tax not timely paid, together with any penalty 
332.23 	imposed in this section, bears interest at the rate specified in section 270C.40 from the 
332.24 	time such tax should have been paid until paid. The penalty imposed in this section bears 
332.25 	interest at the rate specified in section 270C.40 from the date provided in section 270C.40, 
332.26 	subdivision 3, to the date of payment of the penalty. Any interest and penalty is added to 
332.27 	the tax and collected as a part of it.

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

332.29 	Sec. 14. Minnesota Statutes 2012, section 297F.18, subdivision 7, is amended to read:
332.30 		Subd. 7.Interest on penalties. (a) A penalty imposed under section 297F.19, 
332.31 	subdivisions 2 to 7, bears interest from the date the return or payment was required to be 
333.1 	filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the 
333.2 	date of payment of the penalty.
333.3 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
333.4 	ten days from the date of the notice. In that case interest is imposed from the date of notice 
333.5 	to the date of payment.

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

333.7 	Sec. 15. Minnesota Statutes 2012, section 297G.09, subdivision 8, is amended to read:
333.8 		Subd. 8.Interest. The amount of tax not timely paid, together with any penalty 
333.9 	imposed by this chapter, bears interest at the rate specified in section 270C.40 from the 
333.10 	time the tax should have been paid until paid. Any penalty imposed by this chapter bears 
333.11 	interest from the date provided in section 270C.40, subdivision 3, to the date of payment 
333.12 	of the penalty. Any interest and penalty is added to the tax and collected as a part of it.

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

333.14 	Sec. 16. Minnesota Statutes 2012, section 297G.17, subdivision 7, is amended to read:
333.15 		Subd. 7.Interest on penalties. (a) A penalty imposed under section 297G.18, 
333.16 	subdivisions 2 to 7, bears interest from the date the return or payment was required to be 
333.17 	filed or paid, including any extensions provided in section 270C.40, subdivision 3, to the 
333.18 	date of payment of the penalty.
333.19 	(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 
333.20 	ten days from the date of the notice. In that case interest is imposed from the date of notice 
333.21 	to the date of payment.

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

333.23 	Sec. 17. Minnesota Statutes 2012, section 297I.80, subdivision 1, is amended to read:
333.24 		Subdivision 1.Payable to commissioner. (a) When interest is required under this 
333.25 	section, interest is computed at the rate specified in section 270C.40.
333.26 	(b) If a tax or surcharge is not paid within the time named by law for payment, the 
333.27 	unpaid tax or surcharge bears interest from the date the tax or surcharge should have been 
333.28 	paid until the date the tax or surcharge is paid.
333.29 	(c) Whenever a taxpayer is liable for additional tax or surcharge because of a 
333.30 	redetermination by the commissioner or other reason, the additional tax or surcharge 
333.31 	bears interest from the time the tax or surcharge should have been paid until the date the 
333.32 	tax or surcharge is paid.
334.1 	(d) A penalty bears interest from the date the return or payment was required to be 
334.2 	filed or paid provided in section 270C.40, subdivision 3, to the date of payment of the 
334.3 	penalty.

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

334.5 	Sec. 18. Minnesota Statutes 2012, section 469.319, subdivision 4, is amended to read:
334.6 		Subd. 4.Repayment procedures. (a) For the repayment of taxes imposed under 
334.7 	chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must 
334.8 	file an amended return with the commissioner of revenue and pay any taxes required 
334.9 	to be repaid within 30 days after becoming subject to repayment under this section. 
334.10 	The amount required to be repaid is determined by calculating the tax for the period or 
334.11 	periods for which repayment is required without regard to the exemptions and credits 
334.12 	allowed under section 469.315.
334.13 	(b) For the repayment of taxes imposed under chapter 297B, a business must pay any 
334.14 	taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of 
334.15 	revenue, within 30 days after becoming subject to repayment under this section.
334.16 	(c) For the repayment of property taxes, the county auditor shall prepare a tax 
334.17 	statement for the business, applying the applicable tax extension rates for each payable 
334.18 	year and provide a copy to the business and to the taxpayer of record. The business must 
334.19 	pay the taxes to the county treasurer within 30 days after receipt of the tax statement. The 
334.20 	business or the taxpayer of record may appeal the valuation and determination of the 
334.21 	property tax to the Tax Court within 30 days after receipt of the tax statement.
334.22 	(d) The provisions of chapters 270C and 289A relating to the commissioner's 
334.23 	authority to audit, assess, and collect the tax and to hear appeals are applicable to the 
334.24 	repayment required under paragraphs (a) and (b). The commissioner may impose civil 
334.25 	penalties as provided in chapter 289A, and the additional tax and penalties are subject 
334.26 	to interest at the rate provided in section 270C.40,. The additional tax shall bear interest
334.27 	 from 30 days after becoming subject to repayment under this section until the date the 
334.28 	tax is paid. Any penalty imposed pursuant to this section shall bear interest from the date 
334.29 	provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
334.30 	(e) If a property tax is not repaid under paragraph (c), the county treasurer shall 
334.31 	add the amount required to be repaid to the property taxes assessed against the property 
334.32 	for payment in the year following the year in which the auditor provided the statement 
334.33 	under paragraph (c).
334.34 	(f) For determining the tax required to be repaid, a reduction of a state or local sales or 
334.35 	use tax is deemed to have been received on the date that the good or service was purchased 
335.1 	or first put to a taxable use. In the case of an income tax or franchise tax, including the 
335.2 	credit payable under section 469.318, a reduction of tax is deemed to have been received 
335.3 	for the two most recent tax years that have ended prior to the date that the business became 
335.4 	subject to repayment under this section. In the case of a property tax, a reduction of tax is 
335.5 	deemed to have been received for the taxes payable in the year that the business became 
335.6 	subject to repayment under this section and for the taxes payable in the prior year.
335.7 	(g) The commissioner may assess the repayment of taxes under paragraph (d) any 
335.8 	time within two years after the business becomes subject to repayment under subdivision 
335.9 	1, or within any period of limitations for the assessment of tax under section 289A.38, 
335.10 	whichever period is later. The county auditor may send the statement under paragraph 
335.11 	(c) any time within three years after the business becomes subject to repayment under 
335.12 	subdivision 1.
335.13 	(h) A business is not entitled to any income tax or franchise tax benefits, including 
335.14 	refundable credits, for any part of the year in which the business becomes subject to 
335.15 	repayment under this section nor for any year thereafter. Property is not exempt from tax 
335.16 	under section 272.02, subdivision 64, for any taxes payable in the year following the year 
335.17 	in which the property became subject to repayment under this section nor for any year 
335.18 	thereafter. A business is not eligible for any sales tax benefits beginning with goods 
335.19 	or services purchased or first put to a taxable use on the day that the business becomes 
335.20 	subject to repayment under this section.

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

335.22 	Sec. 19. Minnesota Statutes 2012, section 469.340, subdivision 4, is amended to read:
335.23 		Subd. 4.Repayment procedures. (a) For the repayment of taxes imposed under 
335.24 	chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must 
335.25 	file an amended return with the commissioner of revenue and pay any taxes required to be 
335.26 	repaid within 30 days after ceasing to do business in the zone. The amount required to be 
335.27 	repaid is determined by calculating the tax for the period or periods for which repayment 
335.28 	is required without regard to the exemptions and credits allowed under section 469.336.
335.29 	(b) For the repayment of property taxes, the county auditor shall prepare a tax 
335.30 	statement for the business, applying the applicable tax extension rates for each payable 
335.31 	year and provide a copy to the business. The business must pay the taxes to the county 
335.32 	treasurer within 30 days after receipt of the tax statement. The taxpayer may appeal the 
335.33 	valuation and determination of the property tax to the Tax Court within 30 days after 
335.34 	receipt of the tax statement.
336.1 	(c) The provisions of chapters 270C and 289A relating to the commissioner's 
336.2 	authority to audit, assess, and collect the tax and to hear appeals are applicable to the 
336.3 	repayment required under paragraph (a). The commissioner may impose civil penalties as 
336.4 	provided in chapter 289A, and the additional tax and penalties are subject to interest at the 
336.5 	rate provided in section 270C.40,. The additional tax shall bear interest from 30 days after 
336.6 	ceasing to do business in the biotechnology and health sciences industry zone until the 
336.7 	date the tax is paid. Any penalty imposed pursuant to this section shall bear interest from 
336.8 	the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty.
336.9 	(d) If a property tax is not repaid under paragraph (b), the county treasurer shall add 
336.10 	the amount required to be repaid to the property taxes assessed against the property for 
336.11 	payment in the year following the year in which the treasurer discovers that the business 
336.12 	ceased to operate in the biotechnology and health sciences industry zone.
336.13 	(e) For determining the tax required to be repaid, a tax reduction is deemed to have 
336.14 	been received on the date that the tax would have been due if the taxpayer had not been 
336.15 	entitled to the exemption, or on the date a refund was issued for a refundable credit.
336.16 	(f) The commissioner may assess the repayment of taxes under paragraph (c) any 
336.17 	time within two years after the business ceases to operate in the biotechnology and health 
336.18 	sciences industry zone, or within any period of limitations for the assessment of tax under 
336.19 	section 289A.38, whichever period is later.

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