HF 677

1st Unofficial Engrossment - 88th Legislature (2013 - 2014)

Posted on 04/30/2013 03:42 p.m.

1.1A bill for an act 1.2relating to financing and operation of state and local government; making 1.3changes to individual income, corporate franchise, property, sales and use, 1.4estate, mineral, tobacco, local, and other taxes and tax-related provisions; 1.5modifying the property tax refund for renters; changing property tax aids 1.6and credits; modifying pension aids; providing pension funding; changing 1.7provisions of the Sustainable Forest Incentive Act; modifying definitions and 1.8distributions for property taxes; providing exemptions; modifying education 1.9aids and levies; imposing a sports memorabilia gross receipts tax; changing tax 1.10rates on tobacco; providing reimbursement for certain property tax abatements; 1.11modifying the small business investment tax credit; making changes to 1.12additions and subtractions from federal taxable income; changing rates for 1.13individuals, estates, and trusts; providing income tax credits; modifying estate 1.14tax exclusions for qualifying small business and farm property; expanding the 1.15sales tax base and reducing the sales tax rate; modifying the definition of sale 1.16and purchase; changing the tax rate and modifying provisions for the rental 1.17motor vehicle tax; providing for multiple points of use certificates; modifying 1.18exemptions; authorizing local sales taxes; authorizing economic development 1.19powers; providing authority, organization, powers, and duties for development 1.20of a Destination Medical Center; authorizing state infrastructure aid; modifying 1.21the distribution of taconite production taxes; authorizing taconite production 1.22tax bonds for grants to school districts; modifying and providing provisions 1.23for public finance; providing funding for capitol renovations; modifying the 1.24definition of market value for tax, debt, and other purposes; making conforming, 1.25policy, and technical changes to tax provisions; requiring studies and reports; 1.26appropriating money;amending Minnesota Statutes 2012, sections 13.4965, 1.27subdivision 3; 16A.46; 16C.03, subdivision 18; 38.18; 40A.15, subdivision 2; 1.2869.011, subdivision 1; 69.021, subdivisions 7, 8, by adding a subdivision; 88.51, 1.29subdivision 3; 103B.102, subdivision 3; 103B.245, subdivision 3; 103B.251, 1.30subdivision 8; 103B.335; 103B.3369, subdivision 5; 103B.635, subdivision 1.312; 103B.691, subdivision 2; 103C.501, subdivision 4; 103D.905, subdivisions 1.322, 3, 8; 103F.405, subdivision 1; 116J.8737, subdivisions 1, 2, 5, 7, 9, 12, by 1.33adding a subdivision; 117.025, subdivision 7; 118A.04, subdivision 3; 118A.05, 1.34subdivision 5; 123A.455, subdivision 1; 124D.11, subdivision 1; 126C.10, 1.35subdivisions 1, 27, by adding subdivisions; 126C.13, subdivision 4, by adding 1.36a subdivision; 126C.17; 126C.48, subdivision 8; 127A.48, subdivision 1; 1.37138.053; 144F.01, subdivision 4; 162.07, subdivisions 3, 4; 163.04, subdivision 1.383; 163.06, subdivision 6; 165.10, subdivision 1; 168.012, subdivision 9, 1.39by adding a subdivision; 237.52, subdivision 3, by adding a subdivision; 2.1270.077; 270.41, subdivision 5; 270B.01, subdivision 8; 270B.12, subdivision 2.24; 270C.03, subdivision 1; 270C.34, subdivision 1; 270C.38, subdivision 1; 2.3270C.42, subdivision 2; 270C.56, subdivision 1; 272.01, subdivision 2; 272.02, 2.4subdivisions 10, 97, by adding subdivisions; 272.025, subdivision 1; 272.03, 2.5subdivision 9, by adding subdivisions; 273.032; 273.11, subdivision 1; 273.114, 2.6subdivision 6; 273.117; 273.124, subdivisions 3a, 13, 14, 21; 273.128, by adding 2.7a subdivision; 273.13, subdivisions 21b, 23, 25; 273.1315, subdivisions 1, 2; 2.8273.1398, subdivisions 3, 4; 273.19, subdivision 1; 273.372, subdivision 4; 2.9273.39; 275.011, subdivision 1; 275.025, subdivisions 1, 2; 275.077, subdivision 2.102; 275.71, subdivision 4; 276.04, subdivision 2; 276A.01, subdivisions 10, 12, 2.1113, 15; 276A.06, subdivision 10; 279.06, subdivision 1; 279.37, subdivisions 1a, 2.122; 281.14; 281.17; 287.05, by adding a subdivision; 287.08; 287.20, by adding a 2.13subdivision; 287.23, subdivision 1; 287.385, subdivision 7; 289A.08, subdivision 2.143; 289A.10, by adding a subdivision; 289A.12, subdivision 14, by adding a 2.15subdivision; 289A.18, by adding a subdivision; 289A.20, subdivisions 3, 4, by 2.16adding a subdivision; 289A.26, subdivisions 3, 4, 7, 9; 289A.55, subdivision 9; 2.17289A.60, subdivision 4; 290.01, subdivisions 19b, 19c, 19d; 290.06, subdivisions 2.181, 2c, 2d, by adding a subdivision; 290.0677, subdivisions 1, 1a, 2; 290.068, 2.19subdivision 1; 290.0681, subdivisions 1, 3, 4, 5, 7, 10; 290.091, subdivision 2; 2.20290.0921, subdivisions 1, 3; 290.0922, subdivision 1; 290.095, subdivision 2; 2.21290.17, subdivision 4; 290.191, subdivision 5; 290.21, subdivision 4; 290.9705, 2.22subdivision 1; 290A.03, subdivision 3; 290A.04, subdivisions 2a, 4; 290A.25; 2.23290B.04, subdivision 2; 290C.02, subdivision 6; 290C.03; 290C.055; 290C.07; 2.24291.03, subdivisions 8, 9, 10, 11; 296A.01, subdivision 19; 296A.09, subdivision 2.252; 296A.17, subdivision 3; 296A.22, subdivisions 1, 3; 297A.61, subdivisions 2.263, 4, 10, 17a, 25, 38, 45, by adding subdivisions; 297A.62, subdivisions 1, 1a; 2.27297A.64, subdivision 1; 297A.65; 297A.66, subdivisions 1, 3, by adding a 2.28subdivision; 297A.665; 297A.668, by adding a subdivision; 297A.67, subdivision 2.297, by adding a subdivision; 297A.68, subdivisions 2, 5, 10, 42, by adding a 2.30subdivision; 297A.70, subdivisions 2, 4, 5, 7, 13, 14, by adding subdivisions; 2.31297A.71, by adding subdivisions; 297A.75, subdivisions 1, 2, 3; 297A.815, 2.32subdivision 3; 297A.82, subdivision 4, by adding a subdivision; 297A.99, 2.33subdivision 1; 297B.11; 297E.02, subdivisions 1, 6; 297E.14, subdivision 7; 2.34297F.01, subdivisions 19, 23, by adding subdivisions; 297F.05, subdivisions 2.351, 3, 4, by adding subdivisions; 297F.09, subdivision 9; 297F.18, subdivision 2.367; 297F.24, subdivision 1; 297F.25, subdivision 1; 297G.04, subdivision 2; 2.37297G.09, subdivision 8; 297G.17, subdivision 7; 297I.05, subdivisions 7, 11, 2.3812; 297I.30, subdivisions 1, 2; 297I.80, subdivision 1; 298.01, subdivisions 2.393, 3b; 298.018; 298.17; 298.227, as amended; 298.24, subdivision 1; 298.28, 2.40subdivisions 4, 6; 325F.781, subdivision 1; 349.166, subdivision 1; 353G.08, 2.41subdivision 2; 360.531; 360.66; 365.025, subdivision 4; 366.095, subdivision 2.421; 366.27; 368.01, subdivision 23; 368.47; 370.01; 373.01, subdivision 1; 2.43373.40, subdivisions 1, 2, 4; 375.167, subdivision 1; 375.18, subdivision 3; 2.44375.555; 383A.80, subdivision 4; 383B.152; 383B.245; 383B.73, subdivision 1; 2.45383B.80, subdivision 4; 383D.41, by adding a subdivision; 383E.20; 383E.23; 2.46385.31; 394.36, subdivision 1; 398A.04, subdivision 8; 401.05, subdivision 3; 2.47403.02, subdivision 21, by adding subdivisions; 403.06, subdivision 1a; 403.11, 2.48subdivision 1, by adding a subdivision; 410.32; 412.221, subdivision 2; 412.301; 2.49428A.02, subdivision 1; 428A.101; 428A.21; 430.102, subdivision 2; 435.19, 2.50subdivision 2, by adding a subdivision; 447.10; 450.19; 450.25; 458A.10; 2.51458A.31, subdivision 1; 465.04; 469.033, subdivision 6; 469.034, subdivision 2; 2.52469.053, subdivisions 4, 4a, 6; 469.107, subdivision 1; 469.174, subdivision 2, 2.53by adding subdivisions; 469.175, subdivision 3; 469.176, subdivisions 1b, 4b, 4c, 2.544m, 6, by adding a subdivision; 469.1763, subdivisions 3, 4; 469.177, subdivision 2.551a; 469.180, subdivision 2; 469.187; 469.206; 469.319, subdivision 4; 469.340, 2.56subdivision 4; 471.24; 471.571, subdivisions 1, 2; 471.73; 473.325, subdivision 2; 2.57473.606, subdivision 3; 473.629; 473.661, subdivision 3; 473.667, subdivision 9; 2.58473.671; 473.711, subdivision 2a; 473F.02, subdivisions 12, 14, 15, 23; 473F.08, 3.1subdivision 10, by adding a subdivision; 474A.04, subdivision 1a; 474A.062; 3.2474A.091, subdivision 3a; 475.521, subdivisions 1, 2, 4; 475.53, subdivisions 1, 3.33, 4; 475.58, subdivisions 2, 3b; 475.73, subdivision 1; 477A.011, subdivisions 3.420, 30, 34, 42, by adding subdivisions; 477A.0124, subdivision 2; 477A.013, 3.5subdivisions 1, 8, 9, by adding a subdivision; 477A.03, subdivisions 2a, 2b, 3.6by adding a subdivision; 477A.11, subdivisions 3, 4, by adding subdivisions; 3.7477A.12, subdivisions 1, 2, 3; 477A.14, subdivision 1, by adding a subdivision; 3.8641.23; 641.24; 645.44, by adding a subdivision; Laws 1971, chapter 773, section 3.91, subdivision 2, as amended; Laws 1988, chapter 645, section 3, as amended; 3.10Laws 1993, chapter 375, article 9, section 46, subdivisions 2, as amended, 5, as 3.11amended; Laws 1998, chapter 389, article 8, section 43, subdivisions 1, 3, as 3.12amended, 5, as amended; Laws 1999, chapter 243, article 6, section 11; Laws 3.132002, chapter 377, article 3, section 25, as amended; Laws 2005, First Special 3.14Session chapter 3, article 5, section 37, subdivisions 2, 4; Laws 2006, chapter 3.15259, article 11, section 3, as amended; Laws 2008, chapter 366, article 5, sections 3.1626; 33; 34, as amended; article 7, section 19, subdivision 3, as amended; Laws 3.172009, chapter 88, article 2, section 46, subdivisions 1, 3; Laws 2010, chapter 3.18216, sections 11; 55; Laws 2010, chapter 389, article 1, section 12; proposing 3.19coding for new law in Minnesota Statutes, chapters 116J; 124D; 136A; 270C; 3.20273; 287; 290; 295; 403; 469; 477A; repealing Minnesota Statutes 2012, sections 3.2116A.725; 256.9658; 272.69; 273.11, subdivisions 1a, 22; 275.025, subdivision 3.224; 276A.01, subdivision 11; 289A.60, subdivision 31; 290.01, subdivision 6b; 3.23290.0921, subdivision 7; 290.171; 290.173; 290.174; 297A.61, subdivision 27; 3.24297A.66, subdivision 4; 297A.67, subdivision 8; 297A.68, subdivisions 9, 22, 3.2535; 473F.02, subdivision 13; 477A.011, subdivisions 2a, 19, 21, 29, 31, 32, 33, 3.2636, 39, 40, 41; 477A.013, subdivisions 11, 12; 477A.0133; 477A.0134. 3.27BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.28ARTICLE 1 3.29AIDS AND CREDITS 3.30    Section 1. Minnesota Statutes 2012, section 69.021, is amended by adding a 3.31subdivision to read: 3.32     new text begin Subd. 12. new text end new text begin Pension aid accounts. new text end new text begin (a) $745,000 is appropriated from the general new text end 3.33 new text begin fund, in fiscal year 2015 and each year thereafter, to the commissioner of revenue for the new text end 3.34 new text begin purposes of pension aid. The commissioner shall administer the account and allocate new text end 3.35 new text begin money in the account as follows: new text end 3.36 new text begin (1) $130,065 as supplemental state pension funding paid to the executive director of new text end 3.37 new text begin the Public Employees Retirement Association for deposit in the public employees police new text end 3.38 new text begin and fire retirement fund established by section 353.65, subdivision 1; new text end 3.39 new text begin (2) $64,935 to municipalities employing firefighters with retirement coverage by the new text end 3.40 new text begin public employees police and fire retirement plan, allocated in proportion to the relationship new text end 3.41 new text begin that the preceding June 30 number of firefighters employed by each municipality who have new text end 3.42 new text begin public employees police and fire retirement plan coverage bears to the total preceding new text end 3.43 new text begin June 30 number of municipal firefighters covered by the public employees police and new text end 3.44 new text begin fire retirement plan; and new text end 4.1 new text begin (3) $550,000 for municipalities other than the municipalities receiving a new text end 4.2 new text begin disbursement under clause (2) which qualified to receive fire state aid in that calendar year, new text end 4.3 new text begin allocated in proportion to the most recent amount of fire state aid paid under subdivision 7 new text end 4.4 new text begin for the municipality bears to the most recent total fire state aid for all municipalities other new text end 4.5 new text begin than the municipalities receiving a disbursement under clause (2) paid under subdivision new text end 4.6 new text begin 7, with the allocated amount for fire departments participating in the voluntary statewide new text end 4.7 new text begin lump-sum volunteer firefighter retirement plan paid to the executive director of the Public new text end 4.8 new text begin Employees Retirement Association for deposit in the fund established by section 353G.02, new text end 4.9 new text begin subdivision 3, and credited to the respective account and with the balance paid to the new text end 4.10 new text begin treasurer of each municipality for transmittal within 30 days of receipt to the treasurer of new text end 4.11 new text begin the applicable volunteer firefighter relief association for deposit in its special fund. new text end 4.12 new text begin (b) $1,550,00 is appropriated from the general fund in fiscal year 2015 to the new text end 4.13 new text begin commissioner of revenue for the purposes of pension aid. The commissioner shall new text end 4.14 new text begin administer the account and allocate money in the account as follows: new text end 4.15 new text begin (1) one-third to be distributed as police state aid as provided under subdivision 7a; and new text end 4.16 new text begin (2) two-thirds to be apportioned, on the basis of the number of active police officers new text end 4.17 new text begin certified for police state aid receipt under section 69.011, subdivisions 2 and 2b, between: new text end 4.18 new text begin (i) the executive director of the Public Employees Retirement Association for new text end 4.19 new text begin deposit as a supplemental state pension funding aid in the public employees police and fire new text end 4.20 new text begin retirement fund established by section 353.65, subdivision 1; and new text end 4.21 new text begin (ii) the executive director of the Minnesota State Retirement System for deposit as a new text end 4.22 new text begin supplemental state pension funding aid in the state patrol retirement fund. new text end 4.23 new text begin (c) On or before September 1, annually, the executive director of the Public new text end 4.24 new text begin Employees Retirement Association shall report to the commissioner the following: new text end 4.25 new text begin (1) the municipalities which employ firefighters with retirement coverage by the new text end 4.26 new text begin public employees police and fire retirement plan; new text end 4.27 new text begin (2) the number of firefighters with public employees police and fire retirement plan new text end 4.28 new text begin employed by each municipality; new text end 4.29 new text begin (3) the fire departments covered by the voluntary statewide lump-sum volunteer new text end 4.30 new text begin firefighter retirement plan; and new text end 4.31 new text begin (4) any other information requested by the commissioner to administer the surcharge new text end 4.32 new text begin fire pension aid account. new text end 4.33 new text begin (d) For this subdivision, (i) the number of firefighters employed by a municipality new text end 4.34 new text begin who have public employees police and fire retirement plan coverage means the number new text end 4.35 new text begin of firefighters with public employees police and fire retirement plan coverage that were new text end 4.36 new text begin employed by the municipality for not less than 30 hours per week for a minimum of six new text end 5.1 new text begin months prior to December 31 preceding the date of the payment under this section and, if new text end 5.2 new text begin the person was employed for less than the full year, prorated to the number of full months new text end 5.3 new text begin employed; and, (ii) the number of active police officers certified for police state aid receipt new text end 5.4 new text begin under section 69.011, subdivisions 2 and 2b means, for each municipality, the number of new text end 5.5 new text begin police officers meeting the definition of peace officer in section 69.011, subdivision 1, new text end 5.6 new text begin counted as provided and limited by section 69.011, subdivisions 2 and 2b. new text end 5.7 new text begin (e) The payments under this section shall be made on October 1 each year, based on new text end 5.8 new text begin the amount in the temporary fire pension aid account and the amount in the temporary new text end 5.9 new text begin police pension aid account on the preceding June 30, with interest at 1 percent for each new text end 5.10 new text begin month, or portion of a month, that the amount remains unpaid after October 1. The new text end 5.11 new text begin amounts necessary to make the payments under this subdivision are annually appropriated new text end 5.12 new text begin to the commissioner from the temporary fire and police pension aid accounts. Any new text end 5.13 new text begin necessary adjustments shall be made to subsequent payments. new text end 5.14 new text begin (f) The provisions of this chapter that prevent municipalities and relief associations new text end 5.15 new text begin from being eligible for, or receiving state aid under this chapter until the applicable new text end 5.16 new text begin financial reporting requirements have been complied with, apply to the amounts payable new text end 5.17 new text begin to municipalities and relief associations under this subdivision. new text end 5.18 new text begin (g) The appropriations in paragraphs (a) and (b) end on (i) December 31, 2020, or new text end 5.19 new text begin (ii), if earlier, on the December 31 next following the actuarial valuation date on which the new text end 5.20 new text begin assets of the retirement plan on a market value equals or exceeds 90 percent of the total new text end 5.21 new text begin actuarial accrued liabilities of the retirement plan as disclosed in an actuarial valuation new text end 5.22 new text begin prepared under Minnesota Statutes, section 356.215, and the Standards for Actuarial Work new text end 5.23 new text begin promulgated by the Legislative Commission on Pensions and Retirement, for the State new text end 5.24 new text begin Patrol retirement plan or the public employees police and fire retirement plan, whichever new text end 5.25 new text begin occurs last. new text end 5.26 new text begin (h) The base for fiscal year 2016 and thereafter under paragraph (a) is $7,450,000 new text end 5.27 new text begin and the distribution in clauses (1) to (3) are adjusted accordingly. The base for fiscal year new text end 5.28 new text begin 2016 and thereafter, under paragraph (b), is $15,500,000. new text end 5.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning in the fiscal year beginning new text end 5.30 new text begin July 1, 2014. new text end 5.31    Sec. 2. Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to read: 5.32    Subd. 30. Pre-1940 housing percentage. new text begin (a) Except as provided in paragraph (b), new text end 5.33"pre-1940 housing percentage" for a city is 100 times the most recent federal census count 5.34 new text begin by the United States Bureau of the Census new text end of all housing units in the city built before 6.11940, divided by the total number of all housing units in the city. Housing units includes 6.2both occupied and vacant housing units as defined by the federal census. 6.3 new text begin (b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal new text end 6.4 new text begin to 100 times the 1990 federal census count of all housing units in the city built before new text end 6.5 new text begin 1940, divided by the most recent counts by the United States Bureau of the Census of all new text end 6.6 new text begin housing units in the city. Housing units includes both occupied and vacant housing units new text end 6.7 new text begin as defined by the federal census. new text end 6.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 6.9 new text begin 2014 and thereafter. new text end 6.10    Sec. 3. Minnesota Statutes 2012, section 477A.011, is amended by adding a 6.11subdivision to read: 6.12     new text begin Subd. 30a. new text end new text begin Percent of housing built between 1940 and 1970. new text end new text begin "Percent of housing new text end 6.13 new text begin built between 1940 and 1970" is equal to 100 times the most recent count by the United new text end 6.14 new text begin States Bureau of the Census of all housing units in the city built after 1939 but before new text end 6.15 new text begin 1970, divided by the total number of all housing units in the city. Housing units includes new text end 6.16 new text begin both occupied and vacant housing units as defined by the federal census. new text end 6.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 6.18 new text begin 2014 and thereafter. new text end 6.19    Sec. 4. Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read: 6.20    Subd. 34. City revenue need. (a) For a city with a population equal to or greater 6.21than 2,500 new text begin 10,000 new text end , "city revenue need" is the greater of 285 or new text begin 1.15 times new text end the sum of (1) 6.225.0734098 new text begin 4.59 new text end times the pre-1940 housing percentage; plus (2) 19.141678 times the 6.23population decline percentage new text begin 0.622 times the percent of housing built between 1940 and new text end 6.24 new text begin 1970 new text end ; plus (3) 2504.06334 times the road accidents factor new text begin 169.415 times the jobs per new text end 6.25 new text begin capita new text end ; plus (4) ; minus (5) the metropolitan area factor; minus (6) 49.10638 6.26times the household size new text begin the sparsity adjustment, plus (5) 307.664 new text end . 6.27     new text begin (b) For a city with a population equal to or greater than 2,500 and less than 10,000, new text end 6.28 new text begin "city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940 new text end 6.29 new text begin housing percentage; minus (3) 53.768 times household size; plus (4) 14.022 times peak new text end 6.30 new text begin population decline. new text end 6.31    (b) new text begin (c) new text end For a city with a population less than 2,500, "city revenue need" is the sum of 6.32(1) times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial 6.33industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4) 7.1 times the transformed population; minus (5) new text begin 410 plus 0.367 times the city's new text end 7.2 new text begin population over 100. The city revenue need under this paragraph shall not exceed 630 new text end . 7.3    (c) new text begin (d) new text end For a city with a population of new text begin at least new text end 2,500 or more and a population in one 7.4of the most recently available five years that was less than 2,500, "city revenue need" 7.5is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its 7.6transition factor; plus (2) its city revenue need calculated under the formula in paragraph 7.7(b) multiplied by the difference between one and its transition factor. For purposes of this 7.8paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that 7.9the city's population estimate has been 2,500 or more. This provision only applies for aids 7.10payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. 7.11It applies to any city for aids payable in 2009 and thereafter new text begin but less than 3,000, the "city new text end 7.12 new text begin revenue need" equals (1) the transition factor times the city's revenue need calculated in new text end 7.13 new text begin paragraph (b) plus (2) 630 times the difference between one and the transition factor. For new text end 7.14 new text begin a city with a population of at least 10,000 but less than 10,500, the "city revenue need" new text end 7.15 new text begin equals (1) the transition factor times the city's revenue need calculated in paragraph (a) new text end 7.16 new text begin plus (2) the city's revenue need calculated under the formula in paragraph (b) times the new text end 7.17 new text begin difference between one and the transition factor. For purposes of this paragraph "transition new text end 7.18 new text begin factor" is 0.2 percent times the amount that the city's population exceeds the minimum new text end 7.19 new text begin threshold in either of the first two sentences new text end . 7.20    (d) new text begin (e) new text end The city revenue need cannot be less than zero. 7.21    (e) new text begin (f) new text end For calendar year 2005 new text begin 2015 new text end and subsequent years, the city revenue need for 7.22a city, as determined in paragraphs (a) to (d) new text begin (e) new text end , is multiplied by the ratio of the annual 7.23implicit price deflator for government consumption expenditures and gross investment for 7.24state and local governments as prepared by the United States Department of Commerce, 7.25for the most recently available year to the 2003 new text begin 2013 new text end implicit price deflator for state 7.26and local government purchases. 7.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 7.28 new text begin 2014 and thereafter. new text end 7.29    Sec. 5. Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read: 7.30    Subd. 42. City jobs base new text begin Jobs per capita new text end . (a) "City jobs base" for a city with a 7.31population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of 7.32jobs per capita in the city, and (3) its population. For cities with a population less than 7.335,000, the city jobs base is equal to zero. For a city receiving aid under , 7.34paragraph (k), its city jobs base is reduced by the lesser of 36 percent of the amount of 8.1aid received under that paragraph or $1,000,000. No city's city jobs base may exceed 8.2$4,725,000 under this paragraph. 8.3    (b) For calendar year 2010 and subsequent years, the city jobs base for a city, as 8.4determined in paragraph (a), is multiplied by the ratio of the appropriation under section 8.5477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under 8.6that section for aids payable in 2009. 8.7    (c) For purposes of this subdivision, "Jobs per capita in the city" means (1) the 8.8average annual number of employees in the city based on the data from the Quarterly 8.9Census of Employment and Wages, as reported by the Department of Employment and 8.10Economic Development, for the most recent calendar year available as of May 1, 2008 8.11 new text begin November 1 of every odd-numbered year new text end , divided by (2) the city's population for the 8.12same calendar year as the employment data. The commissioner of the Department of 8.13Employment and Economic Development shall certify to the city the average annual 8.14number of employees for each city by June 1, 2008 new text begin January 15, of every even-numbered new text end 8.15 new text begin year beginning with January 15, 2014. new text end . A city may challenge an estimate under this 8.16paragraph by filing its specific objection, including the names of employers that it feels 8.17may have misreported data, in writing with the commissioner by June 20, 2008 new text begin December new text end 8.18 new text begin 1 of every odd-numbered year new text end . The commissioner shall make every reasonable effort 8.19to address the specific objection and adjust the data as necessary. The commissioner 8.20shall certify the estimates of the annual employment to the commissioner of revenue by 8.21July 15, 2008 new text begin January 15 of all even-numbered years new text end , including any estimates still under 8.22objection. new text begin For aids payable in 2014 "jobs per capita" shall be based on the annual number new text end 8.23 new text begin of employees and population for calendar year 2010 without additional review. new text end 8.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 8.25 new text begin 2014 and thereafter. new text end 8.26    Sec. 6. Minnesota Statutes 2012, section 477A.011, is amended by adding a 8.27subdivision to read: 8.28     new text begin Subd. 44. new text end new text begin Peak population decline. new text end new text begin "Peak population decline" is equal to 100 new text end 8.29 new text begin times the difference between one and the ratio of the city's current population, to the new text end 8.30 new text begin highest city population reported in a federal census from the 1970 census or later. "Peak new text end 8.31 new text begin population decline" shall not be less than zero. new text end 8.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 8.33 new text begin 2014 and thereafter. new text end 9.1    Sec. 7. Minnesota Statutes 2012, section 477A.011, is amended by adding a 9.2subdivision to read: 9.3     new text begin Subd. 45. new text end new text begin Sparsity adjustment. new text end new text begin For a city with a population of 10,000 or more, the new text end 9.4 new text begin sparsity adjustment is 100 for any city with an average population density less than 150 new text end 9.5 new text begin per square mile. The sparsity adjustment is zero for all other cities. new text end 9.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 9.7 new text begin 2014 and thereafter. new text end 9.8    Sec. 8. Minnesota Statutes 2012, section 477A.013, subdivision 1, is amended to read: 9.9    Subdivision 1. Towns. In 2002, no town is eligible for a distribution under this 9.10subdivision. new text begin In 2014 and thereafter, each town is eligible for a distribution under this new text end 9.11 new text begin subdivision equal to the product of (i) its agricultural property factor, (ii) its town area new text end 9.12 new text begin factor, (iii) its population factor, and (iv) 0.00225. As used in this subdivision, the new text end 9.13 new text begin following terms have the meanings given them: new text end 9.14 new text begin (1) "agricultural property factor" means the ratio of the adjusted net tax capacity of new text end 9.15 new text begin agricultural property located in a town, divided by the adjusted net tax capacity of all other new text end 9.16 new text begin property located in the town. The agricultural property factor cannot exceed eight; new text end 9.17 new text begin (2) "agricultural property" means property classified under section 273.13, as new text end 9.18 new text begin homestead and nonhomestead agricultural property, rural vacant land, and noncommercial new text end 9.19 new text begin seasonal recreational property; new text end 9.20 new text begin (3) "town area factor" means the most recent estimate of total acreage, not to exceed new text end 9.21 new text begin 50,000 acres, located in the township available as of July 1 in the aid calculation year, new text end 9.22 new text begin estimated or established by: new text end 9.23 new text begin (i) the United States Bureau of the Census; new text end 9.24 new text begin (ii) the State Land Management Information Center; or new text end 9.25 new text begin (iii) the secretary of state; and new text end 9.26 new text begin (4) "population factor" means the square root of the towns population. new text end 9.27 new text begin If the sum of the aids payable to all towns under this subdivision exceeds the limit new text end 9.28 new text begin under section 477A.03, subdivision 2c, the distribution to each town must be reduced new text end 9.29 new text begin proportionately so that the total amount of aids distributed under this section does not new text end 9.30 new text begin exceed the limit in section 477A.03, subdivision 2c. new text end 9.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 9.32 new text begin 2014 and thereafter. new text end 9.33    Sec. 9. Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read: 10.1    Subd. 8. City formula aid. new text begin (a) For aids payable in 2014 only, the formula aid for a new text end 10.2 new text begin city is equal to the sum of (1) its 2013 certified aid and (2) the product of (i) the difference new text end 10.3 new text begin between its unmet need and its 2013 certified aid and (ii) the aid gap percentage. new text end 10.4     new text begin (b) For aids payable in 2015 and thereafter, new text end the formula aid for a city is equal to 10.5the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase 10.6percentage multiplied by the average of its unmet need for the most recently available two 10.7years new text begin formula aid in the previous year and (2) the product of (i) the difference between new text end 10.8 new text begin its unmet need and its certified aid in the previous year under subdivision 9, and (ii) new text end 10.9 new text begin the aid gap percentage new text end . 10.10No city may have a formula aid amount less than zero. The need increase new text begin aid gap new text end 10.11 percentage must be the same for all cities. 10.12    The applicable need increase new text begin aid gap new text end percentage must be calculated by the 10.13Department of Revenue so that the total of the aid under subdivision 9 equals the total 10.14amount available for aid under section 477A.03. Data used in calculating aids to cities 10.15under sections 477A.011 to 477A.013 shall be the most recently available data as of 10.16January 1 in the year in which the aid is calculated except that the data used to compute "net 10.17levy" in subdivision 9 is the data most recently available at the time of the aid computation. 10.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 10.19 new text begin 2014 and thereafter. new text end 10.20    Sec. 10. Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read: 10.21    Subd. 9. City aid distribution. (a) In calendar year 2013 new text begin 2014 new text end and thereafter, each 10.22city shall receive an aid distribution equal to the sum of (1) the city formula aid under 10.23subdivision 8, and (2) its city aid base new text begin aid adjustment under subdivision 13 new text end . 10.24    (b) For aids payable in 2013 and 2014 only, the total aid in the previous year for 10.25any city shall mean the amount of aid it was certified to receive for aids payable in 2012 10.26under this section. For aids payable in 2015 and thereafter, the total aid in the previous 10.27year for any city means the amount of aid it was certified to receive under this section in 10.28the previous payable year. 10.29    (c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed 10.30the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution 10.31plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total 10.32aid for any city with a population of 2,500 or more may not be less than its total aid under 10.33this section in the previous year minus the lesser of $10 multiplied by its population, or ten 10.34percent of its net levy in the year prior to the aid distribution. 11.1    (d) new text begin (b) For aids payable in 2014 only, the total aid for a city may not be less than the new text end 11.2 new text begin amount it was certified to receive in 2013. new text end For aids payable in 2010 new text begin 2015 new text end and thereafter, 11.3the total aid for a city with a population less than 2,500 must not be less than the amount 11.4it was certified to receive in the previous year minus the lesser of $10 multiplied by its 11.5population, or five percent of its 2003 certified aid amount. For aids payable in 2009 only, 11.6the total aid for a city with a population less than 2,500 must not be less than what it 11.7received under this section in the previous year unless its total aid in calendar year 2008 11.8was aid under section , subdivision 36, paragraph (s), in which case its minimum 11.9aid is zero new text begin its net levy in the year prior to the aid distribution new text end . 11.10    (e) A city's aid loss under this section may not exceed $300,000 in any year in 11.11which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or 11.12greater than the appropriation under that subdivision in the previous year, unless the 11.13city has an adjustment in its city net tax capacity under the process described in section 11.14469.174, subdivision 28. 11.15    (f) If a city's net tax capacity used in calculating aid under this section has decreased 11.16in any year by more than 25 percent from its net tax capacity in the previous year due to 11.17property becoming tax-exempt Indian land, the city's maximum allowed aid increase 11.18under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the 11.19year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease 11.20resulting from the property becoming tax exempt. 11.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 11.22 new text begin 2014 and thereafter. new text end 11.23    Sec. 11. Minnesota Statutes 2012, section 477A.013, is amended by adding a 11.24subdivision to read: 11.25     new text begin Subd. 13. new text end new text begin Certified aid adjustments. new text end new text begin (a) A city that received an aid base increase new text end 11.26 new text begin under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall new text end 11.27 new text begin have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids new text end 11.28 new text begin payable in 2014 through 2018. new text end 11.29 new text begin (b) A city that received an aid base increase under section 477A.011, subdivision 36, new text end 11.30 new text begin paragraph (r), shall have its total aid under subdivision 9 increased by an amount equal to new text end 11.31 new text begin $160,000 for aids payable in 2014 and thereafter. new text end 11.32 new text begin (c) A city that received a temporary aid increase under Minnesota Statutes 2012, new text end 11.33 new text begin section 477A.011, subdivision 36, paragraph (m), (v), or (w), shall have its total aid under new text end 11.34 new text begin subdivision 9 decreased by the amount of its aid base increase under those paragraphs in new text end 11.35 new text begin calendar year 2013. new text end 12.1    Sec. 12. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read: 12.2    Subd. 2a. Cities. For aids payable in 2013 new text begin 2014 new text end and thereafter, the total aid paid 12.3under section 477A.013, subdivision 9, is $426,438,012 new text begin $506,438,012 new text end . 12.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 12.5 new text begin 2014 and thereafter. new text end 12.6    Sec. 13. Minnesota Statutes 2012, section 477A.03, subdivision 2b, is amended to read: 12.7    Subd. 2b. Counties. (a) For aids payable in 2013 new text begin 2014 new text end and thereafter, the total aid 12.8payable under section 477A.0124, subdivision 3, is $80,795,000 new text begin $100,795,000 new text end . Each 12.9calendar year, $500,000 new text begin of this appropriation new text end shall be retained by the commissioner 12.10of revenue to make reimbursements to the commissioner of management and budget 12.11for payments made under section 611.27. For calendar year 2004, the amount shall 12.12be in addition to the payments authorized under section 477A.0124, subdivision 1. 12.13For calendar year 2005 and subsequent years, the amount shall be deducted from the 12.14appropriation under this paragraph. The reimbursements shall be to defray the additional 12.15costs associated with court-ordered counsel under section 611.27. Any retained amounts 12.16not used for reimbursement in a year shall be included in the next distribution of county 12.17need aid that is certified to the county auditors for the purpose of property tax reduction 12.18for the next taxes payable year. 12.19    (b) For aids payable in 2013 new text begin 2014 new text end and thereafter, the total aid under section 12.20477A.0124, subdivision 4 , is $84,909,575 new text begin $104,909,575 new text end . The commissioner of 12.21management and budget shall bill the commissioner of revenue for the cost of preparation 12.22of local impact notes as required by section 3.987, not to exceed $207,000 in new text begin each new text end fiscal 12.23year 2004 and thereafter. The commissioner of education shall bill the commissioner of 12.24revenue for the cost of preparation of local impact notes for school districts as required 12.25by section 3.987, not to exceed $7,000 in new text begin each new text end fiscal year 2004 and thereafter. The 12.26commissioner of revenue shall deduct the amounts billed under this paragraph from 12.27the appropriation under this paragraph. The amounts deducted are appropriated to the 12.28commissioner of management and budget and the commissioner of education for the 12.29preparation of local impact notes. 12.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aid payable in 2014 and thereafter. new text end 12.31    Sec. 14. Minnesota Statutes 2012, section 477A.03, is amended by adding a 12.32subdivision to read: 13.1     new text begin Subd. 2c. new text end new text begin Towns. new text end new text begin For aids payable in 2014, the total aids paid under section new text end 13.2 new text begin 477A.013, subdivision 1, is limited to $5,000,000. For aids payable in 2015 and thereafter, new text end 13.3 new text begin the total aids paid under section 477A.013, subdivision 1, is limited to the amount certified new text end 13.4 new text begin to be paid in the previous year. new text end 13.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 13.6 new text begin 2014 and thereafter. new text end 13.7    Sec. 15. new text begin [477A.10] NATURAL RESOURCES LAND PAYMENTS IN LIEU; new text end 13.8 new text begin PURPOSE. new text end 13.9 new text begin The purposes of sections 477A.11 to 477A.14 are: new text end 13.10 new text begin (1) to compensate local units of government for the loss of tax base from state new text end 13.11 new text begin ownership of land and the need to provide services for state land; new text end 13.12 new text begin (2) to address the disproportionate impact of state land ownership on local units of new text end 13.13 new text begin government with a large proportion of state land; and new text end 13.14 new text begin (3) to address the need to manage state lands held in trust for the local taxing districts. new text end 13.15    Sec. 16. Minnesota Statutes 2012, section 477A.11, subdivision 3, is amended to read: 13.16    Subd. 3. Acquired natural resources land. "Acquired natural resources land" 13.17means: 13.18(1) any land new text begin , other than wildlife management land, new text end presently administered by the 13.19commissioner in which the state acquired by purchase, condemnation, or gift, a fee title 13.20interest in lands which were previously privately owned; and 13.21(2) lands acquired by the state under chapter 84A that are designated as state parks, 13.22state recreation areas, scientific and natural areas, or wildlife management areas. 13.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 13.24 new text begin 2013 and thereafter. new text end 13.25    Sec. 17. Minnesota Statutes 2012, section 477A.11, subdivision 4, is amended to read: 13.26    Subd. 4. Other natural resources land. "Other natural resources land" means 13.27any other land new text begin , other than acquired natural resource land or wildlife management land, new text end 13.28 presently owned in fee title by the state and administered by the commissioner, or 13.29any tax-forfeited land, other than platted lots within a city or those lands described 13.30under subdivision 3, clause (2), which is owned by the state and administered by the 13.31commissioner or by the county in which it is located. 14.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 14.2 new text begin 2013 and thereafter. new text end 14.3    Sec. 18. Minnesota Statutes 2012, section 477A.11, is amended by adding a 14.4subdivision to read: 14.5     new text begin Subd. 6. new text end new text begin Military game refuge. new text end new text begin "Military game refuge" means land owned in new text end 14.6 new text begin fee by another state agency for military purposes and designated as a state game refuge new text end 14.7 new text begin under section 97A.085. new text end 14.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 14.9 new text begin 2013 and thereafter. new text end 14.10    Sec. 19. Minnesota Statutes 2012, section 477A.11, is amended by adding a 14.11subdivision to read: 14.12     new text begin Subd. 7. new text end new text begin Transportation wetland. new text end new text begin "Transportation wetland" means land new text end 14.13 new text begin administered by the Department of Transportation in which the state acquired, by purchase new text end 14.14 new text begin from a private owner, a fee title interest in over 500 acres of land within a county to new text end 14.15 new text begin replace wetland losses from transportation projects. new text end 14.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 14.17 new text begin 2013 and thereafter. new text end 14.18    Sec. 20. Minnesota Statutes 2012, section 477A.11, is amended by adding a 14.19subdivision to read: 14.20     new text begin Subd. 8. new text end new text begin Wildlife management land. new text end new text begin "Wildlife management land" means land new text end 14.21 new text begin administered by the commissioner in which the state acquired, from a private owner by new text end 14.22 new text begin purchase, condemnation, or gift, a fee interest under the authority granted in chapter 94 or new text end 14.23 new text begin 97A for wildlife management purposes and actually used as a wildlife management area. new text end 14.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 14.25 new text begin 2013 and thereafter. new text end 14.26    Sec. 21. Minnesota Statutes 2012, section 477A.12, subdivision 1, is amended to read: 14.27    Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred 14.28by counties and towns in support of natural resources lands, The following amounts are 14.29annually appropriated to the commissioner of natural resources from the general fund for 14.30transfer to the commissioner of revenue. The commissioner of revenue shall pay the 15.1transferred funds to counties as required by sections 477A.11 to 477A.14. The amounts new text begin , new text end 15.2 new text begin based on the acreage as of July 1 of each year prior to the payment year, new text end are: 15.3(1) for acquired natural resources land, $5.133 multiplied by the total number of acres 15.4of acquired natural resources land or, at the county's option three-fourths of one percent of 15.5the appraised value of all acquired natural resources land in the county, whichever is greater; 15.6(2) new text begin $5.133, multiplied by the total number of acres of transportation wetland or, at new text end 15.7 new text begin the county's option, three-fourths of one percent of the appraised value of all acquired new text end 15.8 new text begin natural resources land in the county, whichever is greater; new text end 15.9 new text begin (3) three-fourths of one percent of the appraised value of all wildlife management new text end 15.10 new text begin land in the county; new text end 15.11 new text begin (4) 50 percent of the dollar amount as determined under clause (1), multiplied by new text end 15.12 new text begin the number of acres of military refuge land in the county; new text end 15.13$1.283 new text begin (5) $1.50, new text end multiplied by the number of acres of county-administered other 15.14natural resources land new text begin in the county new text end ; 15.15(3) $1.283 new text begin (6) $5.133, new text end multiplied by the total number of acres of land utilization 15.16project land new text begin in the county new text end ; and 15.17(4) 64.2 cents new text begin (7) $1.50, new text end multiplied by the number of acres of 15.18commissioner-administered other natural resources land located in each new text begin the new text end county as of 15.19July 1 of each year prior to the payment year. new text begin ; and new text end 15.20     new text begin (8) without regard to acreage, $300,000 for local assessments under section 84A.55, new text end 15.21 new text begin subdivision 9. new text end 15.22(b) The amount determined under paragraph (a), clause (1), is payable for land 15.23that is acquired from a private owner and owned by the Department of Transportation 15.24for the purpose of replacing wetland losses caused by transportation projects, but only 15.25if the county contains more than 500 acres of such land at the time the certification is 15.26made under subdivision 2. 15.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 15.28 new text begin 2013 and thereafter. new text end 15.29    Sec. 22. Minnesota Statutes 2012, section 477A.12, subdivision 2, is amended to read: 15.30    Subd. 2. Procedure. Lands for which payments in lieu are made pursuant to 15.31section 97A.061, subdivision 3, and Laws 1973, chapter 567, shall not be eligible for 15.32payments under this section. Each county auditor shall certify to the Department of 15.33Natural Resources during July of each year prior to the payment year the number of acres 15.34of county-administered other natural resources land within the county. The Department of 15.35Natural resources may, in addition to the certification of acreage, require descriptive lists 16.1of land so certified. The commissioner of natural resources shall determine and certify to 16.2the commissioner of revenue by March 1 of the payment year: 16.3(1) the number of acres and most recent appraised value of acquired natural 16.4resources land new text begin , wildlife management land, and military refuge land new text end within each county; 16.5(2) the number of acres of commissioner-administered natural resources land within 16.6each county; 16.7(3) the number of acres of county-administered other natural resources land within 16.8each county, based on the reports filed by each county auditor with the commissioner 16.9of natural resources; and 16.10(4) the number of acres of land utilization project land within each county. 16.11The commissioner of transportation shall determine and certify to the commissioner 16.12of revenue by March 1 of the payment year the number of acres of land new text begin transportation new text end 16.13 new text begin wetland new text end and the appraised value of the land described in subdivision 1, paragraph (b), but 16.14only if it exceeds 500 acres new text begin in a county new text end . 16.15The commissioner of revenue shall determine the distributions provided for in this 16.16section using the number of acres and appraised values certified by the commissioner of 16.17natural resources and the commissioner of transportation by March 1 of the payment year. 16.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 16.19 new text begin 2013 and thereafter. new text end 16.20    Sec. 23. Minnesota Statutes 2012, section 477A.12, subdivision 3, is amended to read: 16.21    Subd. 3. Determination of appraised value. For the purposes of this section, the 16.22appraised value of acquired natural resources land is the purchase price for the first five 16.23years after acquisition new text begin until the next six-year appraisal required under this subdivision new text end . 16.24The appraised value of acquired natural resources land received as a donation is the value 16.25determined for the commissioner of natural resources by a licensed appraiser, or the 16.26county assessor's estimated market value if no appraisal is done. The appraised value must 16.27be determined by the county assessor every five new text begin six new text end years after the land is acquired. new text begin All new text end 16.28 new text begin reappraisals shall be done in the same year as county assessors are required to assess new text end 16.29 new text begin exempt land under section 273.18. new text end 16.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 16.31 new text begin 2013 and thereafter. new text end 16.32    Sec. 24. Minnesota Statutes 2012, section 477A.14, subdivision 1, is amended to read: 17.1    Subdivision 1. General distribution. Except as provided in subdivision 2 or in 17.2section 97A.061, subdivision 5 new text begin subdivisions 2 and 3 new text end , 40 percent of the total payment to 17.3the county shall be deposited in the county general revenue fund to be used to provide 17.4property tax levy reduction. The remainder shall be distributed by the county in the 17.5following priority: 17.6(a) 64.2 cents new text begin , new text end for each acre of county-administered other natural resources land shall 17.7be deposited in a resource development fund to be created within the county treasury for 17.8use in resource development, forest management, game and fish habitat improvement, and 17.9recreational development and maintenance of county-administered other natural resources 17.10land. Any county receiving less than $5,000 annually for the resource development fund 17.11may elect to deposit that amount in the county general revenue fund; 17.12(b) from the funds remaining, within 30 days of receipt of the payment to the county, 17.13the county treasurer shall pay each organized township 51.3 cents for each acre of acquired 17.14natural resources land and each acre of land described in section 477A.12, subdivision 1, 17.15paragraph (b), and 12.8 cents for each acre of other natural resources land and each acre of 17.16land utilization project land located within its boundaries new text begin ten percent of the amount received new text end 17.17 new text begin under section 477A.12, subdivision 1, clauses (1), (2), and (5) to (7) new text end . Payments for natural 17.18resources lands not located in an organized township shall be deposited in the county 17.19general revenue fund. Payments to counties and townships pursuant to this paragraph shall 17.20be used to provide property tax levy reduction, except that of the payments for natural 17.21resources lands not located in an organized township, the county may allocate the amount 17.22determined to be necessary for maintenance of roads in unorganized townships. Provided 17.23that, if the total payment to the county pursuant to section 477A.12 is not sufficient to fully 17.24fund the distribution provided for in this clause, the amount available shall be distributed 17.25to each township and the county general revenue fund on a pro rata basis; and 17.26(c) any remaining funds shall be deposited in the county general revenue fund. 17.27Provided that, if the distribution to the county general revenue fund exceeds $35,000, the 17.28excess shall be used to provide property tax levy reduction. 17.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 17.30 new text begin 2013 and thereafter. new text end 17.31    Sec. 25. Minnesota Statutes 2012, section 477A.14, is amended by adding a 17.32subdivision to read: 17.33     new text begin Subd. 3. new text end new text begin Distribution for wildlife management lands and military refuge lands. new text end 17.34 new text begin (a) The county treasurer shall allocate the payment for wildlife management land and new text end 17.35 new text begin military game refuge land among the county, towns, and school districts on the same basis new text end 18.1 new text begin as if the payments were taxes on the land received in the year. Payment of a town's or a new text end 18.2 new text begin school district's allocation must be made by the county treasurer to the town or school new text end 18.3 new text begin district within 30 days of receipt of the payment to the county. The county's share of the new text end 18.4 new text begin payment shall be deposited in the county general revenue fund. new text end 18.5 new text begin (b) The county treasurer of a county with a population over 39,000, but less than new text end 18.6 new text begin 42,000, in the 1950 federal census shall allocate the payment only among the towns and new text end 18.7 new text begin school districts on the same basis as if the payments were taxes on the lands received new text end 18.8 new text begin in the current year. new text end 18.9 new text begin (c) If a town received a payment in calendar year 2006 or thereafter under this new text end 18.10 new text begin subdivision, and subsequently incorporated as a city, the city shall continue to receive any new text end 18.11 new text begin future year's allocations of wildlife land payments that would have been made to the town new text end 18.12 new text begin had it not incorporated, provided that the payments shall terminate if the governing body new text end 18.13 new text begin of the city passes an ordinance that prohibits hunting within the boundaries of the city. new text end 18.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 18.15 new text begin 2013 and thereafter. new text end 18.16    Sec. 26. Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008, 18.17chapter 154, article 1, section 4, is amended to read: 18.18    Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT, 18.19PROPERTY TAX REIMBURSEMENT. 18.20    Subdivision 1. Aid appropriation. $600,000 new text begin $1,200,000 new text end is appropriated annually 18.21from the general fund to the commissioner of revenue to be used to make payments to 18.22compensate for the loss of property tax revenue related to the trust conversion application 18.23of the Shooting Star Casino. The commissioner shall pay the county of Mahnomen, 18.24$450,000 new text begin $900,000 new text end ; the city of Mahnomen, $80,000 new text begin $160,000 new text end ; and Independent School 18.25District No. 432, Mahnomen, $70,000 new text begin $140,000 new text end . The payments shall be made on July 20, 18.26of 2008 new text begin 2013 new text end and each subsequent year. 18.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 18.28 new text begin 2013 and thereafter. new text end 18.29    Sec. 27. new text begin REPEALER. new text end 18.30 new text begin Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33, new text end 18.31 new text begin 36, 39, 40, and 41; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, new text end new text begin are new text end 18.32 new text begin repealed. new text end 19.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for aids payable in calendar year new text end 19.2 new text begin 2014 and thereafter. new text end 19.3ARTICLE 2 19.4PROPERTY TAX 19.5    Section 1. Minnesota Statutes 2012, section 103B.102, subdivision 3, is amended to 19.6read: 19.7    Subd. 3. Evaluation and report. The Board of Water and Soil Resources shall 19.8evaluate performance, financial, and activity information for each local water management 19.9entity. The board shall evaluate the entities' progress in accomplishing their adopted plans 19.10on a regular basis new text begin as determined by the board based on budget and operations of the local new text end 19.11 new text begin water management entity new text end , but not less than once every five new text begin ten new text end years. The board shall 19.12maintain a summary of local water management entity performance on the board's Web site. 19.13Beginning February 1, 2008, and annually thereafter, the board shall provide an analysis 19.14of local water management entity performance to the chairs of the house of representatives 19.15and senate committees having jurisdiction over environment and natural resources policy. 19.16    Sec. 2. Minnesota Statutes 2012, section 103B.335, is amended to read: 19.17103B.335 TAX LEVY AUTHORITY. 19.18    Subdivision 1. Local water planning and management. The governing body of 19.19any county, municipality, or township may levy a tax in an amount required to implement 19.20sections 103B.301 to 103B.355 new text begin or a comprehensive watershed management plan as new text end 19.21 new text begin defined in section 103B.3363 new text end . 19.22    Subd. 2. Priority programs; conservation and watershed districts. A county 19.23may levy amounts necessary to pay the reasonable increased costs to soil and water 19.24conservation districts and watershed districts of administering and implementing priority 19.25programs identified in an approved and adopted plan new text begin or a comprehensive watershed new text end 19.26 new text begin management plan as defined in section 103B.3363 new text end . 19.27    Sec. 3. Minnesota Statutes 2012, section 103B.3369, subdivision 5, is amended to read: 19.28    Subd. 5. Financial assistance. A base grant may be awarded to a county that 19.29provides a match utilizing a water implementation tax or other local source. A water 19.30implementation tax that a county intends to use as a match to the base grant must be 19.31levied at a rate new text begin sufficient to generate a minimum amount new text end determined by the board. 19.32The board may award performance-based grants to local units of government that are 20.1responsible for implementing elements of applicable portions of watershed management 20.2plans, comprehensive plans, local water management plans, or comprehensive watershed 20.3management plans, developed or amended, adopted and approved, according to chapter 20.4103B, 103C, or 103D. Upon request by a local government unit, the board may also 20.5award performance-based grants to local units of government to carry out TMDL 20.6implementation plans as provided in chapter 114D, if the TMDL implementation plan has 20.7been incorporated into the local water management plan according to the procedures for 20.8approving comprehensive plans, watershed management plans, local water management 20.9plans, or comprehensive watershed management plans under chapter 103B, 103C, or 20.10103D, or if the TMDL implementation plan has undergone a public review process. 20.11Notwithstanding section 16A.41, the board may award performance-based grants on an 20.12advanced basis. new text begin The fee authorized in section 40A.152 may be used as a local match new text end 20.13 new text begin or as a supplement to state funding to accomplish implementation of comprehensive new text end 20.14 new text begin plans, watershed management plans, local water management plans, or comprehensive new text end 20.15 new text begin watershed management plans under chapter 103B, 103C, or 103D. new text end 20.16    Sec. 4. Minnesota Statutes 2012, section 103C.501, subdivision 4, is amended to read: 20.17    Subd. 4. Cost-sharing funds. (a) The state board shall allocate at least 70 percent 20.18of cost-sharing funds to areas with high priority erosion, sedimentation, or water quality 20.19problems or water quantity problems due to altered hydrology. The areas must be selected 20.20based on the statewide priorities established by the state board. 20.21 new text begin (b) new text end The allocated funds must be used for conservation practices for high priority 20.22problems identified in the comprehensive and annual work plans of the districts new text begin , for new text end 20.23 new text begin the technical assistance portion of the grant funds to leverage federal or other nonstate new text end 20.24 new text begin funds, or to address high-priority needs identified in local water management plans or new text end 20.25 new text begin comprehensive watershed management plans new text end . 20.26(b) The remaining cost-sharing funds may be allocated to districts as follows: 20.27(1) for technical and administrative assistance, not more than 20 percent of the 20.28funds; and 20.29(2) for conservation practices for lower priority erosion, sedimentation, or water 20.30quality problems. 20.31    Sec. 5. Minnesota Statutes 2012, section 103F.405, subdivision 1, is amended to read: 20.32    Subdivision 1. Authority. Each statutory or home rule charter city, town, or 20.33county that has planning and zoning authority under sections 366.10 to 366.19, 394.21 20.34to 394.37, or 462.351 to 462.365 is encouraged to adopt a soil loss ordinance. The soil 21.1loss ordinance must use the soil loss tolerance for each soil series described in the United 21.2States Soil new text begin Natural Resources new text end Conservation Service Field Office Technical Guide new text begin , or new text end 21.3 new text begin another method approved by the Board of Water and Soil Resources, new text end to determine the 21.4soil loss limits, but the soil loss limits must be attainable by the best practicable soil 21.5conservation practice. Ordinances adopted by local governments within the metropolitan 21.6area defined in section must be consistent with local water management plans 21.7adopted under section new text begin a comprehensive plan, local water management plan, or new text end 21.8 new text begin watershed management plan developed or amended, adopted and approved, according new text end 21.9 new text begin to chapter 103B, 103C, or 103D new text end . 21.10    Sec. 6. Minnesota Statutes 2012, section 168.012, subdivision 9, is amended to read: 21.11    Subd. 9. Manufactured homes and park trailers. Manufactured homes and park 21.12trailers shall not be taxed as motor vehicles using the public streets and highways and shall 21.13be exempt from the motor vehicle tax provisions of this chapter. Except as provided in 21.14section 273.125, manufactured homes and park trailers shall be taxed as personal property. 21.15The provisions of Minnesota Statutes 1957, section 272.02 or any other act providing for 21.16tax exemption shall be inapplicable to manufactured homes and park trailers, except 21.17such manufactured homes as are held by a licensed dealer new text begin or limited dealer, as defined new text end 21.18 new text begin in section 327B.04, new text end and exempted as inventory new text begin under subdivision 9a new text end . Travel trailers not 21.19conspicuously displaying current registration plates on the property tax assessment date 21.20shall be taxed as manufactured homes if occupied as human dwelling places. 21.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014 and new text end 21.22 new text begin thereafter. new text end 21.23    Sec. 7. Minnesota Statutes 2012, section 168.012, is amended by adding a subdivision 21.24to read: 21.25     new text begin Subd. 9a. new text end new text begin Manufactured home as dealer inventory. new text end new text begin Manufactured homes as new text end 21.26 new text begin defined in section 327.31, subdivision 6, shall be considered as dealer inventory, on the new text end 21.27 new text begin January 2 assessment date, if the home: new text end 21.28 new text begin (1) is listed as inventory and held by a licensed or limited dealer; new text end 21.29 new text begin (2) is unoccupied and not available for rent; new text end 21.30 new text begin (3) may or may not be permanently connected to utilities when located in a new text end 21.31 new text begin manufactured park; and new text end 21.32 new text begin (4) may or may not be temporarily connected to utilities when located at a dealer's new text end 21.33 new text begin sales center. new text end 22.1 new text begin The exemption under this subdivision is allowable for up to five assessment years after new text end 22.2 new text begin the date a home is initially claimed as dealer inventory. new text end 22.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014 and new text end 22.4 new text begin thereafter. new text end 22.5    Sec. 8. new text begin [270C.9901] ASSESSOR ACCREDITATION. new text end 22.6 new text begin Every individual that appraises or physically inspects real property for the purpose of new text end 22.7 new text begin determining its valuation or classification for property tax purposes must obtain licensure new text end 22.8 new text begin as an accredited assessor from the Minnesota State Board of Assessors by July 1, 2017, or new text end 22.9 new text begin by the time the individual is licensed as a certified assessor, whichever is later. new text end 22.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning January 1, 2014. new text end 22.11    Sec. 9. Minnesota Statutes 2012, section 272.02, subdivision 10, is amended to read: 22.12    Subd. 10. Personal property used for pollution control. Personal property used 22.13primarily for the abatement and control of air, water, or land pollution is exempt to the 22.14extent that it is so used, and real new text begin but only if it is not required to be installed by a standard, new text end 22.15 new text begin rule, criteria, guideline, policy, or order of the Minnesota Pollution Control Agency or if it new text end 22.16 new text begin is part of a system for the abatement of pollution that was not required to be installed by new text end 22.17 new text begin a standard, rule, criteria, guideline, policy, or order of the Minnesota Pollution Control new text end 22.18 new text begin Agency when it was originally installed. Real new text end property is exempt if it is used primarily for 22.19abatement and control of air, water, or land pollution as part of an agricultural operation, 22.20as a part of a centralized treatment and recovery facility operating under a permit 22.21issued by the Minnesota Pollution Control Agency pursuant to chapters 115 and 116 22.22and Minnesota Rules, parts 7001.0500 to 7001.0730, and 7045.0020 to 7045.1260, as a 22.23wastewater treatment facility and for the treatment, recovery, and stabilization of metals, 22.24oils, chemicals, water, sludges, or inorganic materials from hazardous industrial wastes, 22.25or as part of an electric generation system. For purposes of this subdivision, personal 22.26property includes ponderous machinery and equipment used in a business or production 22.27activity that at common law is considered real property. 22.28Any taxpayer requesting exemption of all or a portion of any real property or any 22.29equipment or device, or part thereof, operated primarily for the control or abatement of 22.30air, water, or land pollution shall file an application with the commissioner of revenue. 22.31The Minnesota Pollution Control Agency shall upon request of the commissioner furnish 22.32information and advice to the commissioner. 23.1The information and advice furnished by the Minnesota Pollution Control Agency 23.2must include statements as to whether the equipment, device, or real property meets 23.3a standard, rule, criteria, guideline, policy, or order of the Minnesota Pollution Control 23.4Agency, and whether the equipment, device, or real property is installed or operated 23.5in accordance with it. On determining that property qualifies for exemption, the 23.6commissioner shall issue an order exempting the property from taxation. The equipment, 23.7device, or real property shall continue to be exempt from taxation as long as the order 23.8issued by the commissioner remains in effect. 23.9    Sec. 10. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision 23.10to read: 23.11     new text begin Subd. 98. new text end new text begin Certain property owned by an Indian tribe. new text end new text begin (a) Property is exempt that: new text end 23.12 new text begin (1) was classified as 3a under section 273.13, subdivision 24, for taxes payable new text end 23.13 new text begin in 2013; new text end 23.14 new text begin (2) is located in a city of the first class with a population greater than 300,000 as of new text end 23.15 new text begin the 2010 federal census; new text end 23.16 new text begin (3) was, on January 2, 2012, and for the current assessment, is owned by a federally new text end 23.17 new text begin recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota; new text end 23.18 new text begin and new text end 23.19 new text begin (4) is used exclusively for tribal purposes or institutions of purely public charity as new text end 23.20 new text begin defined in subdivision 7. new text end 23.21 new text begin (b) For purposes of this subdivision, a "tribal purpose" means a public purpose new text end 23.22 new text begin as defined in subdivision 8 and includes noncommercial tribal government activities. new text end 23.23 new text begin Property that qualifies for the exemption under this subdivision is limited to no more than new text end 23.24 new text begin two contiguous parcels and structures that do not exceed in the aggregate 20,000 square new text end 23.25 new text begin feet. Property acquired for single-family housing, market-rate apartments, agricultural, or new text end 23.26 new text begin forestry does not qualify for this exemption. The exemption created by this subdivision new text end 23.27 new text begin expires with taxes payable in 2024. new text end 23.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with taxes payable in 2014. new text end 23.29    Sec. 11. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision 23.30to read: 23.31     new text begin Subd. 99. new text end new text begin Electric generation facility; personal property. new text end new text begin (a) Notwithstanding new text end 23.32 new text begin subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and new text end 23.33 new text begin other personal property which is part of an electric generation facility that exceeds five new text end 24.1 new text begin megawatts of installed capacity and meets the requirements of this subdivision is exempt. new text end 24.2 new text begin At the time of construction, the facility must: new text end 24.3     new text begin (1) be designed to utilize natural gas as a primary fuel; new text end 24.4     new text begin (2) be owned and operated by a municipal power agency as defined in section new text end 24.5 new text begin 453.52, subdivision 8; new text end 24.6     new text begin (3) be designed to utilize reciprocating engines paired with generators to produce new text end 24.7 new text begin electrical power; new text end 24.8     new text begin (4) be located within the service territory of a municipal power agency's electrical new text end 24.9 new text begin municipal utility that serves load exclusively in a metropolitan county as defined in new text end 24.10 new text begin section 473.121, subdivision 4; new text end 24.11 new text begin (5) be designed to connect directly with a municipality's substation; and new text end 24.12 new text begin (6) have received, by resolution, the approval from the governing body of the county new text end 24.13 new text begin and the city for the exemption of personal property under this subdivision. new text end 24.14     new text begin (b) Construction of the facility must be commenced after June 1, 2013, and before new text end 24.15 new text begin June 1, 2017. Property eligible for this exemption does not include electric transmission new text end 24.16 new text begin lines and interconnections or gas pipelines and interconnections appurtenant to the new text end 24.17 new text begin property or the facility. new text end 24.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2013, taxes new text end 24.19 new text begin payable in 2014, and thereafter. new text end 24.20    Sec. 12. Minnesota Statutes 2012, section 272.025, subdivision 1, is amended to read: 24.21    Subdivision 1. Statement of exemption. (a) Except in the case of property owned 24.22by the state of Minnesota or any political subdivision thereof, and property exempt from 24.23taxation under section 272.02, subdivisions 9, 10, 13, 15, 18, 20, and 22 to 25, and at 24.24the times provided in subdivision 3, a taxpayer claiming an exemption from taxation 24.25on property described in section 272.02, subdivisions 1 to 33, must file a statement of 24.26exemption with the assessor of the assessment district in which the property is located. 24.27(b) A taxpayer claiming an exemption from taxation on property described in section 24.28272.02, subdivision 10 , must file a statement of exemption with the commissioner of 24.29revenue, new text begin and with the assessor of the assessment district in which the property is located, new text end 24.30 on or before February 15 of each year for which the taxpayer claims an exemption. 24.31(c) In case of sickness, absence or other disability or for good cause, the assessor 24.32or the commissioner may extend the time for filing the statement of exemption for a 24.33period not to exceed 60 days. 24.34(d) The commissioner of revenue shall prescribe the form and contents of the 24.35statement of exemption. 25.1    Sec. 13. Minnesota Statutes 2012, section 273.117, is amended to read: 25.2273.117 CONSERVATION PROPERTY TAX VALUATION. 25.3    The value of real property which is subject to a conservation restriction or easement 25.4may be adjusted new text begin shall not be reduced new text end by the assessor if: 25.5    (a) the restriction or easement is for a conservation purpose as defined in section 25.684.64, subdivision 2 , and is recorded on the property; new text begin and new text end 25.7    (b) the property is being used in accordance with the terms of the conservation 25.8restriction or easement. 25.9 new text begin This section does not apply to (1) conservation restrictions or easements covering new text end 25.10 new text begin riparian buffers along lakes, rivers, and streams that are used for water quantity or quality new text end 25.11 new text begin control; or (2) parcels of land in excess of 1,920 acres that allow public motorized access. new text end 25.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2013 and new text end 25.13 new text begin thereafter, and for taxes payable in 2014 and thereafter. new text end 25.14    Sec. 14. Minnesota Statutes 2012, section 273.124, subdivision 14, is amended to read: 25.15    Subd. 14. Agricultural homesteads; special provisions. (a) Real estate of less than 25.16ten acres that is the homestead of its owner must be classified as class 2a under section 25.17273.13, subdivision 23 , paragraph (a), if: 25.18    (1) the parcel on which the house is located is contiguous on at least two sides to (i) 25.19agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 25.20Service, or (iii) land administered by the Department of Natural Resources on which in 25.21lieu taxes are paid under sections 477A.11 to 477A.14; 25.22    (2) its owner also owns a noncontiguous parcel of agricultural land that is at least 25.2320 acres; 25.24    (3) the noncontiguous land is located not farther than four townships or cities, or a 25.25combination of townships or cities from the homestead; and 25.26    (4) the agricultural use value of the noncontiguous land and farm buildings is equal 25.27to at least 50 percent of the market value of the house, garage, and one acre of land. 25.28    Homesteads initially classified as class 2a under the provisions of this paragraph shall 25.29remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 25.30properties, as long as the homestead remains under the same ownership, the owner owns a 25.31noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 25.32value qualifies under clause (4). Homestead classification under this paragraph is limited 25.33to property that qualified under this paragraph for the 1998 assessment. 26.1    (b)(i) Agricultural property shall be classified as the owner's homestead, to the same 26.2extent as other agricultural homestead property, if all of the following criteria are met: 26.3    (1) the agricultural property consists of at least 40 acres including undivided 26.4government lots and correctional 40's; 26.5    (2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the 26.6owner or of the owner's spouse, is actively farming the agricultural property, either on the 26.7person's own behalf as an individual or on behalf of a partnership operating a family farm, 26.8family farm corporation, joint family farm venture, or limited liability company of which 26.9the person is a partner, shareholder, or member; 26.10    (3) both the owner of the agricultural property and the person who is actively 26.11farming the agricultural property under clause (2), are Minnesota residents; 26.12    (4) neither the owner nor the spouse of the owner claims another agricultural 26.13homestead in Minnesota; and 26.14    (5) neither the owner nor the person actively farming the agricultural property lives 26.15farther than four townships or cities, or a combination of four townships or cities, from the 26.16agricultural property, except that if the owner or the owner's spouse is required to live in 26.17employer-provided housing, the owner or owner's spouse, whichever is actively farming 26.18the agricultural property, may live more than four townships or cities, or combination of 26.19four townships or cities from the agricultural property. 26.20    The relationship under this paragraph may be either by blood or marriage. 26.21    (ii) Agricultural property held by a trustee under a trust is eligible for agricultural 26.22homestead classification under this paragraph if the qualifications in clause (i) are met, 26.23except that "owner" means the grantor of the trust. 26.24    (iii) Property containing the residence of an owner who owns qualified property 26.25under clause (i) shall be classified as part of the owner's agricultural homestead, if that 26.26property is also used for noncommercial storage or drying of agricultural crops. 26.27(iv) As used in this paragraph, "agricultural property" means class 2a property and 26.28any class 2b property that is contiguous to and under the same ownership as the class 2a 26.29property. 26.30    (c) new text begin (b) new text end Noncontiguous land shall be included as part of a homestead under section 26.31273.13, subdivision 23 , paragraph (a), only if the homestead is classified as class 2a 26.32and the detached land is located in the same township or city, or not farther than four 26.33townships or cities or combination thereof from the homestead. Any taxpayer of these 26.34noncontiguous lands must notify the county assessor that the noncontiguous land is part of 26.35the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer 26.36must also notify the assessor of the other county. 27.1    (d) new text begin (c) new text end Agricultural land used for purposes of a homestead and actively farmed by a 27.2person holding a vested remainder interest in it must be classified as a homestead under 27.3section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, 27.4any other dwellings on the land used for purposes of a homestead by persons holding 27.5vested remainder interests who are actively engaged in farming the property, and up to 27.6one acre of the land surrounding each homestead and reasonably necessary for the use of 27.7the dwelling as a home, must also be assessed class 2a. 27.8    (e) new text begin (d) new text end Agricultural land and buildings that were class 2a homestead property under 27.9section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain 27.10classified as agricultural homesteads for subsequent assessments if: 27.11    (1) the property owner abandoned the homestead dwelling located on the agricultural 27.12homestead as a result of the April 1997 floods; 27.13    (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, 27.14or Wilkin; 27.15    (3) the agricultural land and buildings remain under the same ownership for the 27.16current assessment year as existed for the 1997 assessment year and continue to be used 27.17for agricultural purposes; 27.18    (4) the dwelling occupied by the owner is located in Minnesota and is within 30 27.19miles of one of the parcels of agricultural land that is owned by the taxpayer; and 27.20    (5) the owner notifies the county assessor that the relocation was due to the 1997 27.21floods, and the owner furnishes the assessor any information deemed necessary by the 27.22assessor in verifying the change in dwelling. Further notifications to the assessor are not 27.23required if the property continues to meet all the requirements in this paragraph and any 27.24dwellings on the agricultural land remain uninhabited. 27.25    (f) Agricultural land and buildings that were class 2a homestead property under 27.26section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain 27.27classified agricultural homesteads for subsequent assessments if: 27.28    (1) the property owner abandoned the homestead dwelling located on the agricultural 27.29homestead as a result of damage caused by a March 29, 1998, tornado; 27.30    (2) the property is located in the county of Blue Earth, Brown, Cottonwood, 27.31LeSueur, Nicollet, Nobles, or Rice; 27.32    (3) the agricultural land and buildings remain under the same ownership for the 27.33current assessment year as existed for the 1998 assessment year; 27.34    (4) the dwelling occupied by the owner is located in this state and is within 50 miles 27.35of one of the parcels of agricultural land that is owned by the taxpayer; and 28.1    (5) the owner notifies the county assessor that the relocation was due to a March 29, 28.21998, tornado, and the owner furnishes the assessor any information deemed necessary by 28.3the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 28.4owner must notify the assessor by December 1, 1998. Further notifications to the assessor 28.5are not required if the property continues to meet all the requirements in this paragraph 28.6and any dwellings on the agricultural land remain uninhabited. 28.7    (g) Agricultural property of a family farm corporation, joint family farm venture, 28.8family farm limited liability company, or partnership operating a family farm as described 28.9under subdivision 8 shall be classified homestead, to the same extent as other agricultural 28.10homestead property, if all of the following criteria are met: 28.11    (1) the property consists of at least 40 acres including undivided government lots 28.12and correctional 40's; 28.13    (2) a shareholder, member, or partner of that entity is actively farming the 28.14agricultural property; 28.15    (3) that shareholder, member, or partner who is actively farming the agricultural 28.16property is a Minnesota resident; 28.17    (4) neither that shareholder, member, or partner, nor the spouse of that shareholder, 28.18member, or partner claims another agricultural homestead in Minnesota; and 28.19    (5) that shareholder, member, or partner does not live farther than four townships or 28.20cities, or a combination of four townships or cities, from the agricultural property. 28.21    Homestead treatment applies under this paragraph for property leased to a family 28.22farm corporation, joint farm venture, limited liability company, or partnership operating a 28.23family farm if legal title to the property is in the name of an individual who is a member, 28.24shareholder, or partner in the entity. 28.25    (h) new text begin (e) new text end To be eligible for the special agricultural homestead under this subdivision, 28.26an initial full application must be submitted to the county assessor where the property is 28.27located. Owners and the persons who are actively farming the property shall be required 28.28to complete only a one-page abbreviated version of the application in each subsequent 28.29year provided that none of the following items have changed since the initial application: 28.30    (1) the day-to-day operation, administration, and financial risks remain the same; 28.31    (2) the owners and the persons actively farming the property continue to live within 28.32the four townships or city criteria and are Minnesota residents; 28.33    (3) the same operator of the agricultural property is listed with the Farm Service 28.34Agency; 28.35    (4) a Schedule F or equivalent income tax form was filed for the most recent year; 28.36    (5) the property's acreage is unchanged; and 29.1    (6) none of the property's acres have been enrolled in a federal or state farm program 29.2since the initial application. 29.3    The owners and any persons who are actively farming the property must include 29.4the appropriate Social Security numbers, and sign and date the application. If any of the 29.5specified information has changed since the full application was filed, the owner must 29.6notify the assessor, and must complete a new application to determine if the property 29.7continues to qualify for the special agricultural homestead. The commissioner of revenue 29.8shall prepare a standard reapplication form for use by the assessors. 29.9    (i) new text begin (f) new text end Agricultural land and buildings that were class 2a homestead property under 29.10section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain 29.11classified agricultural homesteads for subsequent assessments if: 29.12    (1) the property owner abandoned the homestead dwelling located on the agricultural 29.13homestead as a result of damage caused by the August 2007 floods; 29.14    (2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, 29.15Steele, Wabasha, or Winona; 29.16    (3) the agricultural land and buildings remain under the same ownership for the 29.17current assessment year as existed for the 2007 assessment year; 29.18    (4) the dwelling occupied by the owner is located in this state and is within 50 miles 29.19of one of the parcels of agricultural land that is owned by the taxpayer; and 29.20    (5) the owner notifies the county assessor that the relocation was due to the August 29.212007 floods, and the owner furnishes the assessor any information deemed necessary by 29.22the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the 29.23owner must notify the assessor by December 1, 2008. Further notifications to the assessor 29.24are not required if the property continues to meet all the requirements in this paragraph 29.25and any dwellings on the agricultural land remain uninhabited. 29.26    (j) Agricultural land and buildings that were class 2a homestead property under 29.27section 273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain 29.28classified as agricultural homesteads for subsequent assessments if: 29.29    (1) the property owner abandoned the homestead dwelling located on the agricultural 29.30homestead as a result of the March 2009 floods; 29.31    (2) the property is located in the county of Marshall; 29.32    (3) the agricultural land and buildings remain under the same ownership for the 29.33current assessment year as existed for the 2008 assessment year and continue to be used 29.34for agricultural purposes; 29.35    (4) the dwelling occupied by the owner is located in Minnesota and is within 50 29.36miles of one of the parcels of agricultural land that is owned by the taxpayer; and 30.1    (5) the owner notifies the county assessor that the relocation was due to the 2009 30.2floods, and the owner furnishes the assessor any information deemed necessary by the 30.3assessor in verifying the change in dwelling. Further notifications to the assessor are not 30.4required if the property continues to meet all the requirements in this paragraph and any 30.5dwellings on the agricultural land remain uninhabited. 30.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2015 and new text end 30.7 new text begin thereafter. new text end 30.8    Sec. 15. Minnesota Statutes 2012, section 273.124, subdivision 21, is amended to read: 30.9    Subd. 21. Trust property; homestead. Real or personal property held by a trustee 30.10under a trust is eligible for classification as homestead property if the property satisfies the 30.11requirements of paragraph (a), (b), (c), or (d). 30.12    (a) The grantor or surviving spouse of the grantor of the trust occupies and uses the 30.13property as a homestead. 30.14    (b) A relative or surviving relative of the grantor who meets the requirements 30.15of subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1, 30.16paragraph (d), in the case of agricultural property, occupies and uses the property as 30.17a homestead. 30.18    (c) A family farm corporation, joint farm venture, limited liability company, or 30.19partnership operating a family farm in which the grantor or the grantor's surviving spouse 30.20is a shareholder, member, or partner rents the property; and, either (1) a shareholder, 30.21member, or partner of the corporation, joint farm venture, limited liability company, or 30.22partnership occupies and uses the property as a homestead; or (2) the property is at least 30.2340 acres, including undivided government lots and correctional 40's, and a shareholder, 30.24member, or partner of the tenant-entity is actively farming the property on behalf of the 30.25corporation, joint farm venture, limited liability company, or partnership. 30.26    (d) A person who has received homestead classification for property taxes payable in 30.272000 on the basis of an unqualified legal right under the terms of the trust agreement to 30.28occupy the property as that person's homestead and who continues to use the property as 30.29a homestead; or, a person who received the homestead classification for taxes payable 30.30in 2005 under paragraph (c) who does not qualify under paragraph (c) for taxes payable 30.31in 2006 or thereafter but who continues to qualify under paragraph (c) as it existed for 30.32taxes payable in 2005. 30.33    For purposes of this subdivision, "grantor" is defined as the person creating or 30.34establishing a testamentary, inter Vivos, revocable or irrevocable trust by written 30.35instrument or through the exercise of a power of appointment. 31.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2015 and new text end 31.2 new text begin thereafter. new text end 31.3    Sec. 16. Minnesota Statutes 2012, section 273.128, is amended by adding a subdivision 31.4to read: 31.5     new text begin Subd. 1a. new text end new text begin Determination of property tax maximum. new text end new text begin (a) Property taxes on the new text end 31.6 new text begin portion of a rental property certified as class 4d may not exceed ten percent of the gross new text end 31.7 new text begin potential rent for the calendar year in which an application is filed for the units that qualify new text end 31.8 new text begin for certification under this section. "Gross potential rent" means the maximum annual rent new text end 31.9 new text begin the owner of a property is authorized to charge for rental housing units subject to a legally new text end 31.10 new text begin binding rent restriction agreement, assuming that all of the units are occupied at all times. new text end 31.11 new text begin The Housing Finance Agency will adjust gross potential rent annually to the extent of and new text end 31.12 new text begin in accordance with changes in the rent restrictions set forth in the rent restriction agreement. new text end 31.13     new text begin (b) In order to determine the gross potential rent for a rental property, a separate new text end 31.14 new text begin application must be filed with the Housing Finance Agency by March 31 of the assessment new text end 31.15 new text begin year to establish the maximum property taxes for the portion of a property certified under new text end 31.16 new text begin this section. In addition to the information required in subdivision 2, the application new text end 31.17 new text begin under this subdivision must include a true and correct copy of any regulatory agreements new text end 31.18 new text begin or other documents establishing the rent restrictions for the units eligible for class 4d new text end 31.19 new text begin classification, unless such documentation was provided to the Housing Finance Agency new text end 31.20 new text begin in a previous year and the owner certifies that the rent restrictions have not changed. new text end 31.21 new text begin The Housing Finance Agency may charge an application fee approximately equal to the new text end 31.22 new text begin costs of determining the gross potential rent for the property, any annual adjustments and new text end 31.23 new text begin processing, and reviewing the application. The applicant must pay the application fee to new text end 31.24 new text begin the Housing Finance Agency for deposit in the housing development fund. The application new text end 31.25 new text begin fee under this subdivision is in addition to the application fee under subdivision 2. new text end 31.26     new text begin (c) By June 1 of each assessment year, the Housing Finance Agency must certify to new text end 31.27 new text begin the appropriate county or city assessors, the specific properties that are qualified for the new text end 31.28 new text begin maximum property tax limitation and the amount of the annual gross potential rent for the new text end 31.29 new text begin units in the building that qualify for class 4d certification. The auditor shall calculate the new text end 31.30 new text begin maximum property tax for the units that qualify based on the certification from the Housing new text end 31.31 new text begin Finance Agency for taxes payable the year following the assessment year certification. new text end 31.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with assessment year 2015. new text end 31.33    Sec. 17. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read: 32.1    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989, 32.2class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property 32.3is located in a border city that has an enterprise zone, as defined in section 469.166; (2) 32.4the property is located in a city with a population greater than 2,500 and less than 35,000 32.5according to the 1980 decennial census; (3) the city is adjacent to a city in another state or 32.6immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city 32.7in the other state has a population of greater than 5,000 and less than 75,000 according to 32.8the 1980 decennial census. 32.9    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 32.10property to 2.3 new text begin 1.9 new text end percent of the property's market value and (ii) the tax on class 3a 32.11property to 2.3 new text begin 1.9 new text end percent of market value. 32.12    (c) The county auditor shall annually certify the costs of the credits to the 32.13Department of Revenue. The department shall reimburse local governments for the 32.14property taxes forgone as the result of the credits in proportion to their total levies. 32.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with taxes payable in 2014. new text end 32.16    Sec. 18. Minnesota Statutes 2012, section 275.025, subdivision 1, is amended to read: 32.17    Subdivision 1. Levy amount. The state general levy is levied against 32.18commercial-industrial property and seasonal residential recreational property, as defined 32.19in this section. The state general levy base amount is $592,000,000 for taxes payable in 32.202002. For taxes payable in subsequent years new text begin on seasonal residential recreational property new text end , 32.21the levy base amount is increased each year by multiplying the levy base amount for new text begin that new text end 32.22 new text begin class of property for new text end the prior year by the sum of one plus the rate of increase, if any, in the 32.23implicit price deflator for government consumption expenditures and gross investment for 32.24state and local governments prepared by the Bureau of Economic Analysts of the United 32.25States Department of Commerce for the 12-month period ending March 31 of the year 32.26prior to the year the taxes are payable. new text begin For taxes payable in 2014 and subsequent years new text end 32.27 new text begin on commercial-industrial property, the tax is imposed under this subdivision at the rate new text end 32.28 new text begin of the tax imposed under this subdivision for taxes payable in 2002. new text end The tax under this 32.29section is not treated as a local tax rate under section 469.177 and is not the levy of a 32.30governmental unit under chapters 276A and 473F. 32.31The commissioner shall increase or decrease the preliminary or final rate for a year 32.32as necessary to account for errors and tax base changes that affected a preliminary or final 32.33rate for either of the two preceding years. Adjustments are allowed to the extent that the 32.34necessary information is available to the commissioner at the time the rates for a year must 32.35be certified, and for the following reasons: 33.1(1) an erroneous report of taxable value by a local official; 33.2(2) an erroneous calculation by the commissioner; and 33.3(3) an increase or decrease in taxable value for commercial-industrial or seasonal 33.4residential recreational property reported on the abstracts of tax lists submitted under 33.5section 275.29 that was not reported on the abstracts of assessment submitted under 33.6section 270C.89 for the same year. 33.7The commissioner may, but need not, make adjustments if the total difference in the tax 33.8levied for the year would be less than $100,000. 33.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014 and new text end 33.10 new text begin thereafter. new text end 33.11    Sec. 19. Minnesota Statutes 2012, section 275.025, subdivision 2, is amended to read: 33.12    Subd. 2. Commercial-industrial tax capacity. For the purposes of this section, 33.13"commercial-industrial tax capacity" means the tax capacity of all taxable property 33.14classified as class 3 or class 5(1) under section 273.13, except for electric generation 33.15attached machinery under class 3 and property described in section 473.625. County 33.16commercial-industrial tax capacity amounts are not adjusted for the captured net tax 33.17capacity of a tax increment financing district under section 469.177, subdivision 2, the 33.18net tax capacity of transmission lines deducted from a local government's total net tax 33.19capacity under section 273.425, or fiscal disparities contribution and distribution net 33.20tax capacities under chapter 276A or 473F. 33.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014 and new text end 33.22 new text begin thereafter. new text end 33.23    Sec. 20. Minnesota Statutes 2012, section 279.37, subdivision 1a, is amended to read: 33.24    Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property 33.25which was classified class 3a, for the previous year's assessment and had a total market 33.26value of $500,000 or less for that same assessment shall be eligible to be composed into a 33.27confession of judgment new text begin with the approval of the county auditor new text end . Property qualifying under 33.28this subdivision shall be subject to the same provisions as provided in this section except 33.29as provided in paragraphs (b) to (d) new text begin (f) new text end . 33.30    (b) Current year taxes and penalty due at the time the confession of judgment 33.31is entered must be paid. 33.32    (c) The down payment must include all special assessments due in the current tax 33.33year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties, 34.1and interest accrued against the parcel. The balance remaining is payable in four equal 34.2annual installments. new text begin A municipality as defined in section 429.011, cities of the first class, new text end 34.3 new text begin and other special assessment authorities, who have certified special assessments against new text end 34.4 new text begin any parcel of property, may, through resolution, waive the requirement of payment of all new text end 34.5 new text begin current and delinquent special assessments at the time the confession is entered. If the new text end 34.6 new text begin municipality, city, or authority grants the waiver, 100 percent of all current year taxes, new text end 34.7 new text begin special assessments, and penalties due at the time, along with 20 percent of all delinquent new text end 34.8 new text begin taxes, special assessments, penalties, interest, and fees must be paid. The balance new text end 34.9 new text begin remaining shall be subject to and included in the installment plan. new text end 34.10 new text begin (d) When there are current and delinquent special assessments certified and billed new text end 34.11 new text begin against a parcel, the assessment authority or municipality as defined in section 429.011 new text end 34.12 new text begin may abate under section 375.192, subdivision 2, all special assessments and the penalty new text end 34.13 new text begin and interest affiliated with the special assessments, and reassess the special assessments, new text end 34.14 new text begin penalties, and interest accrued thereon, under section 429.071, subdivision 2. The new text end 34.15 new text begin municipality shall notify the county auditor of its intent to reassess as a precondition new text end 34.16 new text begin to the entry of the confession of judgment. Upon the notice to abate and reassess, the new text end 34.17 new text begin municipality shall, through resolution, notify the county auditor to remove all current new text end 34.18 new text begin and delinquent special assessments and the accrued penalty and interest on the special new text end 34.19 new text begin assessments, and the payment of all or a portion of the current and delinquent assessments new text end 34.20 new text begin shall not be required as part of the down payment due at the time the confession of new text end 34.21 new text begin judgment is entered in accordance with paragraph (c). new text end 34.22    (d) new text begin (e) new text end The amounts entered in judgment bear interest at the rate provided in section 34.23279.03, subdivision 1a , commencing with the date the judgment is entered. The interest 34.24rate is subject to change each year on the unpaid balance in the manner provided in section 34.25279.03, subdivision 1a . 34.26 new text begin (f) The county auditor may require conditions on properties including, but not new text end 34.27 new text begin limited to, environmental remediation action plan requirements, restrictions, or covenants, new text end 34.28 new text begin when considering a request for approval of eligibility for composition into a confession of new text end 34.29 new text begin judgment for delinquent taxes upon a parcel of property which was classified class 3a, for new text end 34.30 new text begin the previous year's assessment. new text end 34.31    Sec. 21. Minnesota Statutes 2012, section 279.37, subdivision 2, is amended to read: 34.32    Subd. 2. Installment payments. The owner of any such parcel, or any person to 34.33whom the right to pay taxes has been given by statute, mortgage, or other agreement, may 34.34make and file with the county auditor of the county in which the parcel is located a written 34.35offer to pay the current taxes each year before they become delinquent, or to contest the 35.1taxes under Minnesota Statutes 1941, sections 278.01 to 278.13, and agree to confess 35.2judgment for the amount provided, as determined by the county auditor. By filing the 35.3offer, the owner waives all irregularities in connection with the tax proceedings affecting 35.4the parcel and any defense or objection which the owner may have to the proceedings, and 35.5also waives the requirements of any notice of default in the payment of any installment or 35.6interest to become due pursuant to the composite judgment to be so entered. new text begin Unless the new text end 35.7 new text begin property is subject to subdivision 1a, new text end with the offer, the owner shall new text begin (i) new text end tender one-tenth of 35.8the amount of the delinquent taxes, costs, penalty, and interest, and shall new text begin (ii) new text end tender all 35.9current year taxes and penalty due at the time the confession of judgment is entered. In the 35.10offer, the owner shall agree to pay the balance in nine equal installments, with interest as 35.11provided in section 279.03, payable annually on installments remaining unpaid from time 35.12to time, on or before December 31 of each year following the year in which judgment 35.13was confessed. The offer must be substantially as follows: 35.14"To the court administrator of the district court of ........... county, I, ....................., 35.15am the owner of the following described parcel of real estate located in .................... 35.16county, Minnesota: 35.17.............................. Upon that real estate there are delinquent taxes for the year ........., and 35.18prior years, as follows: (here insert year of delinquency and the total amount of delinquent 35.19taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in 35.20the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and 35.21any defense or objection which I may have to them, and direct judgment to be entered for 35.22the amount stated above, minus the sum of $............, to be paid with this document, which 35.23is one-tenth new text begin or one-fifth new text end of the amount of the taxes, costs, penalty, and interest stated above. 35.24I agree to pay the balance of the judgment in nine new text begin or four new text end equal, annual installments, with 35.25interest as provided in section 279.03, payable annually, on the installments remaining 35.26unpaid. I agree to pay the installments and interest on or before December 31 of each year 35.27following the year in which this judgment is confessed and current taxes each year before 35.28they become delinquent, or within 30 days after the entry of final judgment in proceedings 35.29to contest the taxes under Minnesota Statutes, sections 278.01 to 278.13. 35.30Dated .............., ......." 35.31    Sec. 22. Minnesota Statutes 2012, section 281.14, is amended to read: 35.32281.14 EXPIRATION OF TIME FOR REDEMPTION. 35.33The time for redemption from any tax sale, whether made to the state or to a private 35.34person, shall not expire until notice of expiration of redemption, as provided in section 35.35 new text begin 281.17 new text end , shall have been given. 36.1    Sec. 23. Minnesota Statutes 2012, section 281.17, is amended to read: 36.2281.17 PERIOD FOR REDEMPTION. 36.3Except for properties for which the period of redemption has been limited under 36.4sections 281.173 and 281.174, the following periods for redemption apply. 36.5The period of redemption for all lands sold to the state at a tax judgment sale shall 36.6be three years from the date of sale to the state of Minnesota if the land is within an 36.7incorporated area unless it is: (a) nonagricultural homesteaded land as defined in section 36.8273.13, subdivision 22; (b) homesteaded agricultural land as defined in section 273.13, 36.9subdivision 23 , paragraph (a); or (c) seasonal residential recreational land as defined in 36.10section 273.13, subdivision 22, paragraph (c), or 25, paragraph (d), clause (1), for which 36.11the period of redemption is five years from the date of sale to the state of Minnesota. 36.12The period of redemption for homesteaded lands as defined in section 273.13, 36.13subdivision 22 , located in a targeted neighborhood as defined in Laws 1987, chapter 386, 36.14article 6, section 4, and sold to the state at a tax judgment sale is three years from the date 36.15of sale. The period of redemption for all lands located in a targeted neighborhood as 36.16defined in Laws 1987, chapter 386, article 6, section 4, except (1) homesteaded lands as 36.17defined in section 273.13, subdivision 22, and (2) for periods of redemption beginning 36.18after June 30, 1991, but before July 1, 1996, lands located in the Loring Park targeted 36.19neighborhood on which a notice of lis pendens has been served, and sold to the state at a 36.20tax judgment sale is one year from the date of sale. 36.21The period of redemption for all real property constituting a mixed municipal solid 36.22waste disposal facility that is a qualified facility under section 115B.39, subdivision 1, is 36.23one year from the date of the sale to the state of Minnesota. 36.24The period of redemption for all other lands sold to the state at a tax judgment 36.25sale shall be five years from the date of sale, except that the period of redemption for 36.26nonhomesteaded agricultural land as defined in section 273.13, subdivision 23, paragraph 36.27(b), shall be two years from the date of sale if at that time that property is owned by a 36.28person who owns one or more parcels of property on which taxes are delinquent, and the 36.29delinquent taxes are more than 25 percent of the prior year's school district levy. 36.30    Sec. 24. Minnesota Statutes 2012, section 290A.03, subdivision 3, is amended to read: 36.31    Subd. 3. Income. (1) "Income" means the sum of the following: 36.32(a) federal adjusted gross income as defined in the Internal Revenue Code; and 36.33(b) the sum of the following amounts to the extent not included in clause (a): 36.34(i) all nontaxable income; 37.1(ii) the amount of a passive activity loss that is not disallowed as a result of section 37.2469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity 37.3loss carryover allowed under section 469(b) of the Internal Revenue Code; 37.4(iii) an amount equal to the total of any discharge of qualified farm indebtedness 37.5of a solvent individual excluded from gross income under section 108(g) of the Internal 37.6Revenue Code; 37.7(iv) cash public assistance and relief; 37.8(v) any pension or annuity (including railroad retirement benefits, all payments 37.9received under the federal Social Security Act, Supplemental Security Income, and 37.10veterans benefits), which was not exclusively funded by the claimant or spouse, or which 37.11was funded exclusively by the claimant or spouse and which funding payments were 37.12excluded from federal adjusted gross income in the years when the payments were made; 37.13(vi) interest received from the federal or a state government or any instrumentality 37.14or political subdivision thereof; 37.15(vii) workers' compensation; 37.16(viii) nontaxable strike benefits; 37.17(ix) the gross amounts of payments received in the nature of disability income or 37.18sick pay as a result of accident, sickness, or other disability, whether funded through 37.19insurance or otherwise; 37.20(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 37.211986, as amended through December 31, 1995; 37.22(xi) contributions made by the claimant to an individual retirement account, 37.23including a qualified voluntary employee contribution; simplified employee pension plan; 37.24self-employed retirement plan; cash or deferred arrangement plan under section 401(k) 37.25of the Internal Revenue Code; or deferred compensation plan under section 457 of the 37.26Internal Revenue Code; 37.27(xii) nontaxable scholarship or fellowship grants; 37.28(xiii) the amount of deduction allowed under section 199 of the Internal Revenue 37.29Code; 37.30(xiv) the amount of deduction allowed under section 220 or 223 of the Internal 37.31Revenue Code; 37.32(xv) the amount of tuition expenses required to be added to income under section 37.33290.01, subdivision 19a , clause (12); 37.34(xvi) the amount deducted for certain expenses of elementary and secondary school 37.35teachers under section 62(a)(2)(D) of the Internal Revenue Code; and 37.36(xvii) unemployment compensation. 38.1In the case of an individual who files an income tax return on a fiscal year basis, the 38.2term "federal adjusted gross income" shall mean federal adjusted gross income reflected 38.3in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be 38.4reduced by the amount of a net operating loss carryback or carryforward or a capital loss 38.5carryback or carryforward allowed for the year. 38.6(2) "Income" does not include: 38.7(a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102; 38.8(b) amounts of any pension or annuity which was exclusively funded by the claimant 38.9or spouse and which funding payments were not excluded from federal adjusted gross 38.10income in the years when the payments were made; 38.11(c) surplus food or other relief in kind supplied by a governmental agency; 38.12(d) relief granted under this chapter; 38.13(e) child support payments received under a temporary or final decree of dissolution 38.14or legal separation; or 38.15(f) restitution payments received by eligible individuals and excludable interest as 38.16defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 38.172001, Public Law 107-16. 38.18(3) The sum of the following amounts may be subtracted from income new text begin A claimant, new text end 38.19 new text begin other than one who has rent constituting property taxes, may subtract from income the new text end 38.20 new text begin sum of the following amounts new text end : 38.21(a) for the claimant's first dependent, the exemption amount multiplied by 1.4; 38.22(b) for the claimant's second dependent, the exemption amount multiplied by 1.3; 38.23(c) for the claimant's third dependent, the exemption amount multiplied by 1.2; 38.24(d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1; 38.25(e) for the claimant's fifth dependent, the exemption amount; and 38.26(f) if the claimant or claimant's spouse new text begin who occupies the homestead new text end was disabled 38.27or attained the age of 65 on or before December 31 of the year for which the taxes were 38.28levied or rent paid, the exemption amount. 38.29 new text begin (4) A claimant who has rent constituting property taxes may subtract from income new text end 38.30 new text begin the sum of the following amounts: new text end 38.31 new text begin (a) for the claimant's first dependent, the exemption amount multiplied by 1.5; new text end 38.32 new text begin (b) for the claimant's second dependent, the exemption amount multiplied by 1.4; new text end 38.33 new text begin (c) for the claimant's third dependent, the exemption amount multiplied by 1.3; new text end 38.34 new text begin (d) for the claimant's fourth dependent, the exemption amount multiplied by 1.2; new text end 38.35 new text begin (e) for the claimant's fifth dependent, the exemption amount multiplied by 1.1; new text end 39.1 new text begin (f) if the claimant was disabled or attained the age of 65 on or before December 31 new text end 39.2 new text begin of the year for which the rent constituting property taxes was paid, the exemption amount new text end 39.3 new text begin times 1.5; and new text end 39.4 new text begin (g) if the claimant's spouse who occupies the homestead was disabled or attained the new text end 39.5 new text begin age of 65 on or before December 31 of the year for which the rent constituting property new text end 39.6 new text begin taxes were paid, the exemption amount. new text end 39.7For purposes of this subdivision, the "exemption amount" means the exemption 39.8amount under section 151(d) of the Internal Revenue Code for the taxable year for which 39.9the income is reported. 39.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with refunds based on rent new text end 39.11 new text begin constituting property taxes paid after December 31, 2012. new text end 39.12    Sec. 25. Minnesota Statutes 2012, section 290A.04, subdivision 2a, is amended to read: 39.13    Subd. 2a. Renters. A claimant whose rent constituting property taxes exceeds the 39.14percentage of the household income stated below must pay an amount equal to the percent 39.15of income shown for the appropriate household income level along with the percent to 39.16be paid by the claimant of the remaining amount of rent constituting property taxes. The 39.17state refund equals the amount of rent constituting property taxes that remain, up to the 39.18maximum state refund amount shown below. 39.19 39.20 39.21 Household Income Percent of Income Percent Paid by Claimant Maximum State Refund 39.22 39.23 $0 to 3,589 new text begin 4,910 new text end 1.0 percent 5 percent $ 1,190 new text begin 1,790 new text end 39.24 39.25 3,590 to 4,779 new text begin 4,911 to 6,530 new text end 1.0 percent 10 new text begin 5 new text end percent $ 1,190 new text begin 1,790 new text end 39.26 39.27 4,780 to 5,969 new text begin 6,531 to 8,160 new text end 1.1 percent 10 new text begin 5 new text end percent $ 1,190 new text begin 1,790 new text end 39.28 39.29 5,970 to 8,369 new text begin 8,161 to 11,440 new text end 1.2 percent 10 new text begin 5 new text end percent $ 1,190 new text begin 1,790 new text end 39.30 39.31 8,370 to 10,759 new text begin 11,441 to 14,710 new text end 1.3 percent 15 new text begin 10 new text end percent $ 1,190 new text begin 1,790 new text end 39.32 39.33 10,760 to 11,949 new text begin 14,711 to 16,340 new text end 1.4 percent 15 new text begin 10 new text end percent $ 1,190 new text begin 1,790 new text end 39.34 39.35 11,950 to 13,139 new text begin 16,341 to 17,960 new text end 1.4 percent 20 new text begin 15 new text end percent $ 1,190 new text begin 1,790 new text end 39.36 39.37 13,140 to 15,539 new text begin 17,961 to 21,240 new text end 1.5 percent 20 new text begin 15 new text end percent $ 1,190 new text begin 1,790 new text end 39.38 39.39 15,540 to 16,729 new text begin 21,241 to 22,870 new text end 1.6 percent 20 new text begin 15 new text end percent $ 1,190 new text begin 1,790 new text end 40.1 40.2 16,730 to 17,919 new text begin 22,871 to 24,500 new text end 1.7 percent 25 new text begin 20 new text end percent $ 1,190 new text begin 1,790 new text end 40.3 40.4 17,920 to 20,319 new text begin 24,501 to 27,780 new text end 1.8 percent 25 new text begin 20 new text end percent $ 1,190 new text begin 1,790 new text end 40.5 40.6 20,320 to 21,509 new text begin 27,781 to 29,400 new text end 1.9 percent 30 new text begin 25 new text end percent $ 1,190 new text begin 1,790 new text end 40.7 40.8 21,510 to 22,699 new text begin 29,401 to 31,030 new text end 2.0 percent 30 new text begin 25 new text end percent $ 1,190 new text begin 1,790 new text end 40.9 40.10 22,700 to 23,899 new text begin 31,031 to 32,670 new text end 2.2 percent 30 new text begin 25 new text end percent $ 1,190 new text begin 1,790 new text end 40.11 40.12 23,900 to 25,089 new text begin 32,671 to 34,300 new text end 2.4 percent 30 new text begin 25 new text end percent $ 1,190 new text begin 1,790 new text end 40.13 40.14 25,090 to 26,289 new text begin 34,301 to 35,940 new text end 2.6 percent 35 new text begin 30 new text end percent $ 1,190 new text begin 1,790 new text end 40.15 40.16 26,290 to 27,489 new text begin 35,941 to 37,580 new text end 2.7 percent 35 new text begin 30 new text end percent $ 1,190 new text begin 1,790 new text end 40.17 40.18 27,490 to 28,679 new text begin 37,581 to 39,200 new text end 2.8 percent 35 new text begin 30 new text end percent $ 1,190 new text begin 1,790 new text end 40.19 40.20 28,680 to 29,869 new text begin 39,201 to 40,830 new text end 2.9 percent 40 new text begin 35 new text end percent $ 1,190 new text begin 1,790 new text end 40.21 40.22 29,870 to 31,079 new text begin 40,831 to 42,490 new text end 3.0 percent 40 new text begin 35 new text end percent $ 1,190 new text begin 1,790 new text end 40.23 40.24 31,080 to 32,269 new text begin 42,491 to 44,110 new text end 3.1 percent 40 new text begin 35 new text end percent $ 1,190 new text begin 1,790 new text end 40.25 40.26 32,270 to 33,459 new text begin 44,111 to 45,740 new text end 3.2 percent 40 new text begin 35 new text end percent $ 1,190 new text begin 1,790 new text end 40.27 40.28 33,460 to 34,649 new text begin 45,741 to 47,370 new text end 3.3 percent 45 new text begin 40 new text end percent $ 1,080 new text begin 1,630 new text end 40.29 40.30 34,650 to 35,849 new text begin 47,371 to 49,010 new text end 3.4 percent 45 new text begin 40 new text end percent $ 960 new text begin 1,440 new text end 40.31 40.32 35,850 to 37,049 new text begin 49,011 to 50,650 new text end 3.5 percent 45 new text begin 40 new text end percent $ 830 new text begin 1,240 new text end 40.33 40.34 37,050 to 38,239 new text begin 50,651 to 52,270 new text end 3.5 percent 50 new text begin 45 new text end percent $ 720 new text begin 1,080 new text end 40.35 40.36 38,240 to 39,439 new text begin 52,271 to 53,910 new text end 3.5 percent 50 new text begin 45 new text end percent $ 600 new text begin 900 new text end 40.37 40.38 38,440 to 40,629 new text begin 53,911 to 55,540 new text end 3.5 percent 50 new text begin 45 new text end percent $ 360 new text begin 540 new text end 40.39 40.40 40,630 to 41,819 new text begin 55,541 to 57,170 new text end 3.5 percent 50 new text begin 45 new text end percent $ 120 new text begin 180 new text end 40.41The payment made to a claimant is the amount of the state refund calculated under 40.42this subdivision. No payment is allowed if the claimant's household income is $41,820 or 40.43 more new text begin than $57,170 new text end . 40.44 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with refunds based on rent new text end 40.45 new text begin constituting property taxes paid after December 31, 2012. new text end 41.1    Sec. 26. Minnesota Statutes 2012, section 290A.04, subdivision 4, is amended to read: 41.2    Subd. 4. Inflation adjustment. (a) Beginning for property tax refunds payable in 41.3calendar year 2002, the commissioner shall annually adjust the dollar amounts of the 41.4income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation. 41.5The commissioner shall make the inflation adjustments in accordance with section 1(f) of 41.6the Internal Revenue Code, except that for purposes of this subdivision the percentage 41.7increase shall be determined as provided in this subdivision. 41.8(b) In adjusting the dollar amounts of the income thresholds and the maximum 41.9refunds under subdivision 2 for inflation, the percentage increase shall be determined from 41.10the year ending on June 30, 2011, to the year ending on June 30 of the year preceding that 41.11in which the refund is payable. 41.12(c) In adjusting the dollar amounts of the income thresholds and the maximum 41.13refunds under subdivision 2a for inflation, the percentage increase shall be determined 41.14from the year ending on June 30, 2000 new text begin 2013 new text end , to the year ending on June 30 of the year 41.15preceding that in which the refund is payable. 41.16(d) The commissioner shall use the appropriate percentage increase to annually 41.17adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for 41.18inflation without regard to whether or not the income tax brackets are adjusted for inflation 41.19in that year. The commissioner shall round the thresholds and the maximum amounts, 41.20as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall 41.21round it up to the next $10 amount. 41.22(e) The commissioner shall annually announce the adjusted refund schedule at the 41.23same time provided under section 290.06. The determination of the commissioner under 41.24this subdivision is not a rule under the Administrative Procedure Act. 41.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with refunds based on new text end 41.26 new text begin rent paid after December 31, 2013. new text end 41.27    Sec. 27. Minnesota Statutes 2012, section 290C.02, subdivision 6, is amended to read: 41.28    Subd. 6. Forest land. "Forest land" means land containing a minimum of 20 41.29contiguous acres for which the owner has implemented a forest management plan that was 41.30prepared or updated within the past ten years by an approved plan writer. For purposes of 41.31this subdivision, acres are considered to be contiguous even if they are separated by a road, 41.32waterway, railroad track, or other similar intervening property. At least 50 percent of the 41.33contiguous acreage must meet the definition of forest land in section 88.01, subdivision 41.347 . For the purposes of sections 290C.01 to 290C.11, forest land does not include (i) 41.35land used for residential or agricultural purposes, (ii) land enrolled in the reinvest in 42.1Minnesota program, a state or federal conservation reserve or easement reserve program 42.2under sections 103F.501 to 103F.531, the Minnesota agricultural property tax law under 42.3section 273.111, or land subject to agricultural land preservation controls or restrictions 42.4as defined in section 40A.02 or under the Metropolitan Agricultural Preserves Act under 42.5chapter 473H, or (iii) new text begin land exceeding 60,000 acres that is subject to a single conservation new text end 42.6 new text begin easement funded under section 97A.056 or a comparable permanent easement conveyed new text end 42.7 new text begin to a governmental nonprofit entity; (iv) any land that becomes subject to a conservation new text end 42.8 new text begin easement funded under section 97A.056 or a comparable permanent easement conveyed to new text end 42.9 new text begin a governmental or nonprofit entity after the effective date of this act; or (v) new text end land improved 42.10with a structure, pavement, sewer, campsite, or any road, other than a township road, used 42.11for purposes not prescribed in the forest management plan. 42.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for calculations made in 2013 and new text end 42.13 new text begin thereafter. new text end 42.14    Sec. 28. Minnesota Statutes 2012, section 290C.03, is amended to read: 42.15290C.03 ELIGIBILITY REQUIREMENTS. 42.16(a) Land may be enrolled in the sustainable forest incentive program under this 42.17chapter if all of the following conditions are met: 42.18(1) the land consists of at least 20 contiguous acres and at least 50 percent of the 42.19land must meet the definition of forest land in section 88.01, subdivision 7, during the 42.20enrollment; 42.21(2) a forest management plan for the land must be prepared by an approved plan 42.22writer and implemented during the period in which the land is enrolled; 42.23(3) timber harvesting and forest management guidelines must be used in conjunction 42.24with any timber harvesting or forest management activities conducted on the land during 42.25the period in which the land is enrolled; 42.26(4) the land must be enrolled for a minimum of eight years; 42.27(5) there are no delinquent property taxes on the land; and 42.28(6) claimants enrolling more than 1,920 acres in the sustainable forest incentive 42.29program must allow year-round, nonmotorized access to fish and wildlife resources new text begin and new text end 42.30 new text begin motorized access on established and maintained roads and trails, unless the road or trail is new text end 42.31 new text begin temporarily closed for safety, natural resource, or road damage reasons new text end on enrolled land 42.32except within one-fourth mile of a permanent dwelling or during periods of high fire 42.33hazard as determined by the commissioner of natural resources. 43.1(b) Claimants required to allow access under paragraph (a), clause (6), do not by 43.2that action: 43.3(1) extend any assurance that the land is safe for any purpose; 43.4(2) confer upon the person the legal status of an invitee or licensee to whom a duty 43.5of care is owed; or 43.6(3) assume responsibility for or incur liability for any injury to the person or property 43.7caused by an act or omission of the person. 43.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for calculations made in 2013 and new text end 43.9 new text begin thereafter. new text end 43.10    Sec. 29. Minnesota Statutes 2012, section 290C.055, is amended to read: 43.11290C.055 LENGTH OF COVENANT. 43.12 new text begin (a) new text end The covenant remains in effect for a minimum of eight years. If land is removed 43.13from the program before it has been enrolled for four years, the covenant remains in 43.14effect for eight years from the date recorded. 43.15 new text begin (b) new text end If land that has been enrolled for four years or more is removed from the program 43.16for any reason, there is a waiting period before the covenant terminates. The covenant 43.17terminates on January 1 of the fifth calendar year that begins after the date that: 43.18(1) the commissioner receives notification from the claimant that the claimant wishes 43.19to remove the land from the program under section 290C.10; or 43.20(2) the date that the land is removed from the program under section 290C.11. 43.21 new text begin (c) new text end Notwithstanding the other provisions of this section, the covenant is terminated new text begin : new text end 43.22 new text begin (1) new text end at the same time that the land is removed from the program due to acquisition of 43.23title or possession for a public purpose under section 290C.10 new text begin ; or new text end 43.24 new text begin (2) at the request of the claimant after a reduction in payments due to changes in the new text end 43.25 new text begin payment formula under section 290C.07 new text end . 43.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for calculations made in 2013 and new text end 43.27 new text begin thereafter. new text end 43.28    Sec. 30. Minnesota Statutes 2012, section 290C.07, is amended to read: 43.29290C.07 CALCULATION OF INCENTIVE PAYMENT. 43.30    (a) An approved claimant under the sustainable forest incentive program is eligible 43.31to receive an annual payment. The payment shall equal $7 new text begin $7.25 new text end per acre for each acre 43.32enrolled in the sustainable forest incentive program. 44.1(b) The annual payment for each Social Security number or state or federal business 44.2tax identification number must not exceed $100,000. 44.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for calculations made in 2013 and new text end 44.4 new text begin thereafter. new text end 44.5    Sec. 31. Minnesota Statutes 2012, section 428A.101, is amended to read: 44.6428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER 44.7GENERAL LAW. 44.8The establishment of a new special service district after June 30, 2013 new text begin 2018 new text end , requires 44.9enactment of a special law authorizing the establishment. 44.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 44.11    Sec. 32. Minnesota Statutes 2012, section 428A.21, is amended to read: 44.12428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER 44.13GENERAL LAW. 44.14The establishment of a new housing improvement area after June 30, 2013 new text begin 2018 new text end , 44.15requires enactment of a special law authorizing the establishment of the area. 44.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 44.17    Sec. 33. Minnesota Statutes 2012, section 435.19, subdivision 2, is amended to read: 44.18    Subd. 2. State property. In the case of property owned by the state or any 44.19instrumentality thereof, the governing body of the city or town may new text begin must new text end determine 44.20the amount that would have been assessed had the land been privately owned. Such 44.21 new text begin The new text end determination shall be made only after the governing body has held a hearing on 44.22the proposed assessment after at least two weeks' notice of the hearing has been given 44.23by registered or certified mail to the head of the instrumentality, department or agency 44.24having jurisdiction over the property. new text begin The instrumentality, department, or agency may, new text end 44.25 new text begin after consultation and agreement by the governing body of the city or town, pay an new text end 44.26 new text begin amount less than the amount determined. new text end The amount thus determined may be paid by 44.27the instrumentality, department or agency from available funds. If no funds are available 44.28and such instrumentality, department or agency is supported in whole or in part by 44.29appropriations from the general fund, then it shall include in its next budget request the 44.30amount thus determined. No instrumentality, department or agency shall be bound by the 44.31determination of the governing body and may pay from available funds or recommend 45.1payment in such lesser amount as it determines is the measure of the benefit received by 45.2the land from the improvement. 45.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment year 2013 and new text end 45.4 new text begin thereafter, for taxes payable in 2014 and thereafter. new text end 45.5    Sec. 34. Minnesota Statutes 2012, section 435.19, is amended by adding a subdivision 45.6to read: 45.7     new text begin Subd. 6. new text end new text begin Appropriation. new text end new text begin (a) There is annually appropriated from the general new text end 45.8 new text begin fund and credited to the agency assessment account in the special revenue fund, new text end 45.9 new text begin $5,000,000 in fiscal year 2014 and each year thereafter. Money in the agency assessment new text end 45.10 new text begin account is appropriated annually to the commissioner of revenue for grants to reimburse new text end 45.11 new text begin instrumentalities, departments, or agencies for payment of special assessments, as required new text end 45.12 new text begin under subdivision 2. new text end 45.13 new text begin (b) Of the amounts appropriated in paragraph (a), the commissioner shall first new text end 45.14 new text begin allocate $2,000,000 in fiscal year 2014 only to the city of Moose Lake to reimburse for new text end 45.15 new text begin payments related to connection of state facilities to the sewer line. new text end 45.16 new text begin (c) Notwithstanding the allocation under paragraph (b), the commissioner shall new text end 45.17 new text begin distribute the reimbursements equally between the metropolitan area and greater Minnesota. new text end 45.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 45.19    Sec. 35. Minnesota Statutes 2012, section 473F.08, is amended by adding a subdivision 45.20to read: 45.21     new text begin Subd. 3c. new text end new text begin Bloomington computation. new text end new text begin Effective for property taxes payable in new text end 45.22 new text begin 2014 through taxes payable in 2023, after the Hennepin County auditor has computed new text end 45.23 new text begin the areawide portion of the levy for the city of Bloomington pursuant to subdivision 3, new text end 45.24 new text begin clause (a), the auditor shall annually add $4,000,000 to the city of Bloomington's areawide new text end 45.25 new text begin portion of the levy. The total areawide portion of the levy for the city of Bloomington, new text end 45.26 new text begin including the additional $4,000,000 certified pursuant to this subdivision shall be certified new text end 45.27 new text begin by the Hennepin County auditor to the administrative auditor pursuant to subdivision 5. new text end 45.28 new text begin The Hennepin County auditor shall distribute to the city of Bloomington the additional new text end 45.29 new text begin areawide portion of the levy computed pursuant to this subdivision at the same time new text end 45.30 new text begin that payments are made to the other counties pursuant to subdivision 7a. The additional new text end 45.31 new text begin distribution to the city of Bloomington under this subdivision terminates effective for new text end 45.32 new text begin taxes payable year 2023. new text end 46.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable years 2014 through new text end 46.2 new text begin 2023. new text end 46.3    Sec. 36. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243, 46.4article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter 46.5154, article 2, section 30, is amended to read: 46.6    Sec. 3. TAX; PAYMENT OF EXPENSES. 46.7    (a) The tax levied by the hospital district under Minnesota Statutes, section 447.34, 46.8must not be levied at a rate that exceeds the amount authorized to be levied under that 46.9section. The proceeds of the tax may be used for all purposes of the hospital district, 46.10except as provided in paragraph (b). 46.11    (b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used 46.12solely new text begin by the Cook ambulance service and the Orr ambulance service new text end for the purpose of 46.13capital expenditures as it relates to new text begin : new text end 46.14 new text begin (1) new text end ambulance acquisitions for the Cook ambulance service and the Orr ambulance 46.15service and not new text begin ; new text end 46.16 new text begin (2) attached and portable equipment for use in and for the ambulances; and new text end 46.17 new text begin (3) parts and replacement parts for maintenance and repair of the ambulances. new text end 46.18 new text begin The money may not be used new text end for administrative new text begin , operation, new text end or salary expenses. 46.19     new text begin (c) new text end The part of the levy referred to in paragraph (b) must be administered by the 46.20Cook Hospital and passed on new text begin in equal amounts new text end directly to the Cook area ambulance 46.21service board and the city of Orr to be held in trust until funding for a new ambulance is 46.22needed by either the Cook ambulance service or the Orr ambulance service new text begin used for the new text end 46.23 new text begin purposes in paragraph (b) new text end . 46.24    Sec. 37. Laws 1999, chapter 243, article 6, section 11, is amended to read: 46.25    Sec. 11. CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY. 46.26    Subdivision 1. Levy authorized. Notwithstanding other law to the contrary, the 46.27Carlton county board of commissioners may new text begin annually new text end levy in and for the unorganized 46.28township of Sawyer an amount up to $1,000 annually for cemetery purposes, beginning 46.29with taxes payable in 2000 and ending with taxes payable in 2009. 46.30    Subd. 2. Effective date. This section is effective June 1, 1999, without local 46.31approval. 46.32 new text begin EFFECTIVE DATE. new text end new text begin This section applies to taxes payable in 2014 and thereafter, new text end 46.33 new text begin and is effective the day after the Carlton county board of commissioners and its chief new text end 47.1 new text begin clerical officer timely complete their compliance with Minnesota Statutes, section new text end 47.2 new text begin 645.021, subdivisions 2 and 3. new text end 47.3    Sec. 38. Laws 2008, chapter 366, article 5, section 33, the effective date, is amended to 47.4read: 47.5EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in 47.62009, and is repealed effective for taxes levied in 2013 new text begin 2018 new text end , payable in 2014 new text begin 2019 new text end , 47.7and thereafter. 47.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with taxes payable in 2014. new text end 47.9    Sec. 39. Laws 2009, chapter 88, article 2, section 46, subdivision 1, is amended to read: 47.10    Subdivision 1. Agreement. The city of Cloquet and Perch Lake Township, by 47.11resolution of each of their governing bodies, may establish the Cloquet Area Fire and 47.12Ambulance Taxing District for the purpose of providing fire and new text begin or new text end ambulance services new text begin , new text end 47.13 new text begin or both, new text end throughout the district. In this section, "municipality" means home rule charter 47.14and statutory cities, towns, and Indian tribes. The district may exercise all the powers 47.15relating to fire and ambulance services of the municipalities that receive fire and new text begin or new text end 47.16 ambulance services new text begin , or both, new text end from the district. new text begin Upon application, new text end any other municipality 47.17that is contiguous to a municipality that is a member of the district may join the district 47.18with the agreement of the municipalities that comprise the district at the time of its 47.19application to join. 47.20    Sec. 40. Laws 2009, chapter 88, article 2, section 46, subdivision 3, is amended to read: 47.21    Subd. 3. Tax. The district board may impose a property tax on taxable property 47.22in the district new text begin as provided in this subdivision new text end . This new text begin The board shall annually determine new text end 47.23 new text begin the total amount of the levy that is attributable to the cost of providing fire services new text end 47.24 new text begin and the cost of providing ambulance services within the primary service area. For new text end 47.25 new text begin those municipalities that only receive ambulance services, the costs for the provision of new text end 47.26 new text begin ambulance services shall be levied against taxable property within those municipalities new text end 47.27 new text begin at a rate necessary not to exceed 0.019 percent of the taxable market value. For those new text end 47.28 new text begin municipalities that receive both fire and ambulance services, the new text end tax shall be imposed at a 47.29rate that does not exceed 0.2835 percent of taxable market value for taxes payable in 2010. 47.30The board shall annually determine the separate amounts of the levy that are attributable 47.31to the cost of providing fire services and the cost of providing ambulance services. Costs 47.32for the provision of ambulance services shall be levied against taxable property within the 48.1area of the district that receive the services. Costs for the provision of fire services shall be 48.2levied against taxable property within the area of the district that receive the services. 48.3When new text begin a member municipality opts to receive fire service from the district or new text end an 48.4additional municipality becomes a member of the district, the additional cost of providing 48.5ambulance and fire services to that municipality will new text begin community shall new text end be determined by 48.6the board and added to the maximum levy amount. 48.7Each county auditor of a county that contains a municipality subject to the tax under 48.8this section must collect the tax and pay it to the Fire and Ambulance Special Taxing 48.9District. The district may also impose other fees or charges as allowed by law for the 48.10provision of fire and ambulance services. 48.11    Sec. 41. Laws 2010, chapter 389, article 1, section 12, the effective date, is amended to 48.12read: 48.13EFFECTIVE DATE.This section is effective for assessment years 2010 and 2011 48.14 new text begin through 2016 new text end , for taxes payable in 2011 and 2012 new text begin through 2017 new text end . 48.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment years 2012 through new text end 48.16 new text begin 2016. new text end 48.17    Sec. 42. new text begin REIMBURSEMENT FOR PROPERTY TAX ABATEMENTS; new text end 48.18 new text begin APPROPRIATION. new text end 48.19     new text begin Subdivision 1. new text end new text begin Reimbursement. new text end new text begin The commissioner of revenue shall reimburse new text end 48.20 new text begin taxing jurisdictions for property tax abatements granted in Hennepin County under Laws new text end 48.21 new text begin 2011, First Special Session chapter 7, article 5, section 13, notwithstanding the time limits new text end 48.22 new text begin contained in that section. The reimbursements must be made to each taxing jurisdiction new text end 48.23 new text begin pursuant to the certification of the Hennepin County auditor. new text end 48.24     new text begin Subd. 2. new text end new text begin Appropriation. new text end new text begin In fiscal year 2014 only, $336,000 is appropriated to the new text end 48.25 new text begin commissioner of revenue from the general fund to make the payments required in this new text end 48.26 new text begin section. new text end 48.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 48.28    Sec. 43. new text begin ST. PAUL BALL PARK, PROPERTY TAX EXEMPTION; SPECIAL new text end 48.29 new text begin ASSESSMENT. new text end 48.30 new text begin Any real or personal property acquired, owned, leased, controlled, used, or occupied new text end 48.31 new text begin by the city of St. Paul for the primary purpose of providing a ball park for a minor league new text end 48.32 new text begin baseball team is declared to be acquired, owned, leased, controlled, used, and occupied for new text end 49.1 new text begin public, governmental, and municipal purposes, and is exempt from ad valorem taxation new text end 49.2 new text begin by the state or any political subdivision of the state, provided that the properties are new text end 49.3 new text begin subject to special assessments levied by a political subdivision for a local improvement in new text end 49.4 new text begin amounts proportionate to and not exceeding the special benefit received by the properties new text end 49.5 new text begin from the improvement. In determining the special benefit received by the properties, no new text end 49.6 new text begin possible use of any of the properties in any manner different from their intended use new text end 49.7 new text begin for providing a minor league ballpark at the time may be considered. Notwithstanding new text end 49.8 new text begin Minnesota Statutes, section new text end new text begin , subdivision 2, or new text end new text begin , real or personal property new text end 49.9 new text begin subject to a lease or use agreement between the city and another person for uses related to new text end 49.10 new text begin the purposes of the operation of the ballpark and related parking facilities is exempt from new text end 49.11 new text begin taxation regardless of the length of the lease or use agreement. This section, insofar as it new text end 49.12 new text begin provides an exemption or special treatment, does not apply to any real property that is new text end 49.13 new text begin leased for residential, business, or commercial development or other purposes different new text end 49.14 new text begin from those necessary to the provision and operation of the ball park. new text end 49.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 49.16 new text begin governing body of the city of St. Paul with Minnesota Statutes, section 645.021, new text end 49.17 new text begin subdivisions 2 and 3. new text end 49.18    Sec. 44. new text begin PUBLIC ENTERTAINMENT FACILITY; PROPERTY TAX new text end 49.19 new text begin EXEMPTION; SPECIAL ASSESSMENT. new text end 49.20 new text begin Any real or personal property acquired, owned, leased, controlled, used, or occupied new text end 49.21 new text begin by the city of Minneapolis for the primary purpose of providing an arena for a professional new text end 49.22 new text begin basketball team is declared to be acquired, owned, leased, controlled, used, and occupied new text end 49.23 new text begin for public, governmental, and municipal purposes, and is exempt from ad valorem taxation new text end 49.24 new text begin by the state or any political subdivision of the state, provided that the properties are new text end 49.25 new text begin subject to special assessments levied by a political subdivision for a local improvement in new text end 49.26 new text begin amounts proportionate to and not exceeding the special benefit received by the properties new text end 49.27 new text begin from the improvement. In determining the special benefit received by the properties, no new text end 49.28 new text begin possible use of any of the properties in any manner different from their intended use for new text end 49.29 new text begin providing a professional basketball arena at the time may be considered. Notwithstanding new text end 49.30 new text begin Minnesota Statutes, section new text end new text begin , subdivision 2, or new text end new text begin , real or personal property new text end 49.31 new text begin subject to a lease or use agreement between the city and another person for uses related to new text end 49.32 new text begin the purposes of the operation of the arena and related parking facilities is exempt from new text end 49.33 new text begin taxation regardless of the length of the lease or use agreement. This section, insofar as new text end 49.34 new text begin it provides an exemption or special treatment, does not apply to any real property that new text end 50.1 new text begin is leased for residential, business, or commercial development, or for other purposes new text end 50.2 new text begin different from those necessary to the provision and operation of the arena. new text end 50.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 50.4 new text begin governing body of the city of Minneapolis with Minnesota Statutes, section 645.021, new text end 50.5 new text begin subdivisions 2 and 3. new text end 50.6    Sec. 45. new text begin PUBLIC ENTERTAINMENT FACILITY; CONSTRUCTION new text end 50.7 new text begin MANAGER AT RISK. new text end 50.8 new text begin (a) For any real or personal property acquired, owned, leased, controlled, used, or new text end 50.9 new text begin occupied by the city of Minneapolis for the primary purpose of providing an arena for new text end 50.10 new text begin a professional basketball team, the city of Minneapolis may contract for construction, new text end 50.11 new text begin materials, supplies, and equipment in accordance with Minnesota Statutes, section new text end 50.12 new text begin 471.345, except that the city may employ or contract with persons, firms, or corporations new text end 50.13 new text begin to perform one or more or all of the functions of an engineer, architect, construction new text end 50.14 new text begin manager, or program manager with respect to all or any part of a project to renovate, new text end 50.15 new text begin refurbish, and remodel the arena under either the traditional design-bid-build or new text end 50.16 new text begin construction manager at risk, or a combination thereof. new text end 50.17 new text begin (b) The city may prepare a request for proposals for one or more of the functions new text end 50.18 new text begin described in paragraph (a). The request must be published in a newspaper of general new text end 50.19 new text begin circulation. The city may prequalify offerors by issuing a request for qualifications, in new text end 50.20 new text begin advance of the request for proposals, and select a short list of responsible offerors to new text end 50.21 new text begin submit proposals. new text end 50.22 new text begin (c) As provided in the request for proposals, the city may conduct discussions and new text end 50.23 new text begin negotiations with responsible offerors in order to determine which proposal is most new text end 50.24 new text begin advantageous to the city and to negotiate the terms of an agreement. In conducting new text end 50.25 new text begin discussions, there shall be no disclosure of any information derived from proposals new text end 50.26 new text begin submitted by competing offerors and the content of all proposals is nonpublic data under new text end 50.27 new text begin Minnesota Statutes, chapter 13, until such time as a notice to award a contract is given new text end 50.28 new text begin by the city. new text end 50.29 new text begin (d) Upon agreement on the guaranteed maximum price, the construction manager new text end 50.30 new text begin or program manager may enter into contracts with subcontractors for labor, materials, new text end 50.31 new text begin supplies, and equipment for the renovation project through the process of public bidding, new text end 50.32 new text begin except that the construction manager or program manager may, with the consent of the city: new text end 50.33 new text begin (1) narrow the listing of eligible bidders to those that the construction manager new text end 50.34 new text begin or program manager determines to possess sufficient expertise to perform the intended new text end 50.35 new text begin functions; new text end 51.1 new text begin (2) award contracts to the subcontractors that the construction manager or program new text end 51.2 new text begin manager determines provide the best value under a request for proposals, as described new text end 51.3 new text begin in Minnesota Statutes, section 16C.28, subdivision 1, paragraph (a), clause (2)(c), that new text end 51.4 new text begin are not required to be the lowest responsible bidder; and new text end 51.5 new text begin (3) for work the construction manager or program manager determines to be new text end 51.6 new text begin critical to the completion schedule, perform work with its own forces without soliciting new text end 51.7 new text begin competitive bids or proposals, if the construction manager or program manager provides new text end 51.8 new text begin evidence of competitive pricing. new text end 51.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 51.10 new text begin governing body of the city of Minneapolis with Minnesota Statutes, section 645.021, new text end 51.11 new text begin subdivisions 2 and 3. new text end 51.12    Sec. 46. new text begin MORATORIUM ON CHANGES IN ASSESSMENT PRACTICE. new text end 51.13 new text begin (a) An assessor may not deviate from current practices or policies used generally in new text end 51.14 new text begin assessing or determining the taxable status of property used in the production of biofuels, new text end 51.15 new text begin wine, beer, distilled beverages, or dairy products. new text end 51.16 new text begin (b) An assessor may not change the taxable status of any existing property involved new text end 51.17 new text begin in the industrial processes identified in paragraph (a), unless the change is made as a result new text end 51.18 new text begin of a change in the use of property, or to correct an error. For currently taxable properties, new text end 51.19 new text begin the assessor may change the estimated market value of the property. new text end 51.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for assessment years 2013 and 2014 new text end 51.21 new text begin only. new text end 51.22    Sec. 47. new text begin STUDY AND REPORT ON CERTAIN PROPERTY USED IN new text end 51.23 new text begin BUSINESS AND PRODUCTION. new text end 51.24 new text begin In order to provide the legislature with information and recommendations related new text end 51.25 new text begin to the past, present, and future options for assessment of property used in business new text end 51.26 new text begin and production activities, the commissioner of revenue with the cooperation of the new text end 51.27 new text begin commissioners of agriculture and economic development must study the impact of new text end 51.28 new text begin alternative interpretations and application related to the real and personal property new text end 51.29 new text begin provisions contained in Minnesota Statutes, section 272.03, subdivisions 1 and 2. The new text end 51.30 new text begin commissioner must report a summary of findings and recommendations to the chairs and new text end 51.31 new text begin ranking minority members of the agriculture, energy, and tax committees of the senate and new text end 51.32 new text begin house of representatives by February 1, 2014. The commissioner shall provide for the new text end 51.33 new text begin involvement and participation stakeholders from the business and production industry in new text end 52.1 new text begin the study and recommendations. The study and recommendations shall include, but not new text end 52.2 new text begin be limited to: new text end 52.3 new text begin (1) the past and present tax application to process in the production of a product; new text end 52.4 new text begin (2) exemption from real property for process components of production such as new text end 52.5 new text begin tanks or containment vessels or other devices wherein a molecular, chemical, or biological new text end 52.6 new text begin change occurs such that the intended output from the production process is a different new text end 52.7 new text begin substance from that which was introduced into the tanks, vessels, or other devices new text end 52.8 new text begin and removal of a tank, device or vessel from the process that would stop or harm the new text end 52.9 new text begin production of the final intended product; new text end 52.10 new text begin (3) definitions for process equipment; new text end 52.11 new text begin (4) the potential economic and competitive impact in relation to other midwestern new text end 52.12 new text begin states; new text end 52.13 new text begin (5) the impact on state and local taxes from 2009 to the present and into the future; new text end 52.14 new text begin (6) the past, present, and future impact on business and production industries; new text end 52.15 new text begin (7) impact on Minnesota's renewable energy goal attainment; and new text end 52.16 new text begin (8) other elements considered important for legislative consideration. new text end 52.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 52.18    Sec. 48. new text begin REENROLLMENT; SUSTAINABLE FOREST INCENTIVE new text end 52.19 new text begin PROGRAM. new text end 52.20 new text begin A person who elected to terminate participation in the sustainable forest incentive new text end 52.21 new text begin program, as provided in Laws 2011, First Special Session chapter 7, article 6, section 12, new text end 52.22 new text begin may reenroll lands for which the claimant terminated participation. A person must apply new text end 52.23 new text begin for reenrollment under this section within 60 days after the effective date of this section. new text end 52.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 52.25    Sec. 49. new text begin PROPERTY TAX SAVINGS REPORT. new text end 52.26 new text begin (a) In addition to the certification of its proposed property tax levy under Minnesota new text end 52.27 new text begin Statutes, section 275.065, each city that has a population over 500 and each county shall new text end 52.28 new text begin also include the amount of sales and use tax paid, or was estimated to be paid, in 2012. new text end 52.29 new text begin (b) At the time the notice of the proposed property taxes is mailed as required under new text end 52.30 new text begin Minnesota Statutes, section 275.065, subdivision 3, the county treasurer shall also include new text end 52.31 new text begin a separate statement providing a list of sales and use tax certified by the county and cities new text end 52.32 new text begin within their jurisdiction. new text end 53.1 new text begin (c) At the public hearing required under Minnesota Statutes, section 275.065, new text end 53.2 new text begin subdivision 3, the county and city must discuss the estimated savings realized to their new text end 53.3 new text begin budgets that resulted from the sales tax exemption authorized under Minnesota Statutes, new text end 53.4 new text begin section 297A.70, subdivision 2, and how those savings will be used for property tax levy new text end 53.5 new text begin reductions, fee reductions, and other purposes as deemed appropriate. new text end 53.6 new text begin Reasonable costs of preparing the notice required in this section must be apportioned new text end 53.7 new text begin between taxing jurisdictions as follows: new text end 53.8 new text begin (1) one-half is allocated to the county; and new text end 53.9 new text begin (2) one-half is allocated among the cities. new text end 53.10 new text begin The amount allocated in clause (2) must be further apportioned among all the cities new text end 53.11 new text begin in the proportion that the number of parcels in the city bears to the number of parcels in all new text end 53.12 new text begin the cities that have populations over 500. new text end 53.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 53.14 new text begin for taxes levied in 2013 and payable in 2014. new text end 53.15    Sec. 50. new text begin METROPOLITAN FISCAL DISPARITIES WORKING GROUP. new text end 53.16 new text begin (a) The commissioner of revenue shall convene a working group of interested new text end 53.17 new text begin individuals to examine the issues faced by local governments that are required to pay for new text end 53.18 new text begin services which are otherwise generally provided throughout the seven-county metropolitan new text end 53.19 new text begin area by the Metropolitan Council. The commissioner of revenue shall chair the initial new text end 53.20 new text begin meeting, and the working group shall elect a chair at that initial meeting. The working new text end 53.21 new text begin group will meet at the call of the chair, but must meet at least three times during the new text end 53.22 new text begin legislative interim. Members of the working group shall serve without compensation. The new text end 53.23 new text begin commissioner of revenue must provide administrative support to the working group. new text end 53.24 new text begin (b) The working group may make its advisory recommendations to the chairs of new text end 53.25 new text begin house of representatives and senate tax committees on or before February 1, 2014, at new text end 53.26 new text begin which time the working group shall expire. new text end 53.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 53.28    Sec. 51. new text begin REPEALER. new text end 53.29 new text begin Minnesota Statutes 2012, section 275.025, subdivision 4, new text end new text begin is repealed. new text end 53.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014. new text end 54.1ARTICLE 3 54.2EDUCATION AIDS AND LEVIES 54.3    Section 1. Minnesota Statutes 2012, section 124D.11, subdivision 1, is amended to read: 54.4    Subdivision 1. General education revenue. (a) General education revenue must 54.5be paid to a charter school as though it were a district. The general education revenue 54.6for each adjusted marginal cost pupil unit is the state average general education revenue 54.7per pupil unit, plus the referendum equalization aid allowance in the pupil's district of 54.8residence, minus an amount equal to the product of the formula allowance according 54.9to section 126C.10, subdivision 2, times .0485 new text begin .0465 new text end , calculated without basic skills 54.10revenue, extended time revenue, alternative teacher compensation revenue, new text begin equity new text end 54.11 new text begin revenue, pension adjustment revenue, new text end transition revenue, new text begin education advancement revenue, new text end 54.12and transportation sparsity revenue, plus basic skills revenue, extended time revenue, 54.13basic alternative teacher compensation aid according to section 126C.10, subdivision 34, 54.14 new text begin equity revenue, pension adjustment revenue, new text end and transition revenue as though the school 54.15were a school district. The general education revenue for each extended time marginal 54.16cost pupil unit equals $4,378 new text begin $4,722 new text end . 54.17(b) Notwithstanding paragraph (a), for charter schools in the first year of operation, 54.18general education revenue shall be computed using the number of adjusted pupil units 54.19in the current fiscal year. 54.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for revenue for fiscal year 2015 new text end 54.21 new text begin and later. new text end 54.22    Sec. 2. new text begin [124D.862] ACHIEVEMENT AND INTEGRATION REVENUE. new text end 54.23     new text begin Subdivision 1. new text end new text begin Eligibility. new text end new text begin A school district is eligible for achievement and new text end 54.24 new text begin integration revenue under this section if the district has a biennial achievement and new text end 54.25 new text begin integration plan approved by the department under section 124D.861. Priority for funding new text end 54.26 new text begin must be given to eligible school districts that include methods that have been effective in new text end 54.27 new text begin reducing disparities in student achievement in the district's biennial plan. new text end 54.28     new text begin Subd. 2. new text end new text begin Achievement and integration revenue. new text end new text begin (a) For fiscal year 2014, initial new text end 54.29 new text begin achievement and integration revenue for an eligible district equals the lesser of the new text end 54.30 new text begin district's expenditure for the fiscal year under its budget according to subdivision 1a or the new text end 54.31 new text begin greater of: (1) 90 percent of the district's integration revenue for fiscal year 2013 under new text end 54.32 new text begin Minnesota Statutes 2012, section 124D.86, or (2) the sum of: (i) $361 times the district's new text end 54.33 new text begin adjusted pupil units for the prior fiscal year computed using the pupil unit weights effective new text end 54.34 new text begin under section 126C.05 for fiscal year 2015 and later, times the district's enrollment of new text end 55.1 new text begin protected students as a percent of its total enrollment on October 1 of the prior fiscal year, new text end 55.2 new text begin plus (ii) $100 times the district's adjusted pupil units for the prior fiscal year computed new text end 55.3 new text begin using the pupil unit weights effective under section 126C.05 for fiscal year 2015 and later new text end 55.4 new text begin times the district's enrollment of protected students as a percent of its total enrollment on new text end 55.5 new text begin October 1 of the prior fiscal year times the district's focus rating for the prior fiscal year new text end 55.6 new text begin under Minnesota's 2012 Elementary and Secondary Education Act flexibility request. new text end 55.7 new text begin (b) For fiscal year 2015 and later, initial achievement and integration revenue for new text end 55.8 new text begin an eligible district equals the lesser of the district's expenditure for the fiscal year under new text end 55.9 new text begin its budget according to subdivision 1a or the greater of: (1) 63 percent of the district's new text end 55.10 new text begin integration revenue for fiscal year 2013 under Minnesota Statutes 2012, section 124D.86, new text end 55.11 new text begin or (2) the sum of: (i) $361 times the district's adjusted pupil units for the prior fiscal year new text end 55.12 new text begin computed using the pupil unit weights effective under section 126C.05 for fiscal year 2015 new text end 55.13 new text begin and later, times the district's enrollment of protected students as a percent of its total new text end 55.14 new text begin enrollment on October 1 of the prior fiscal year, plus (ii) 100 times the district's adjusted new text end 55.15 new text begin pupil units for the prior fiscal year computed using the pupil unit weights effective under new text end 55.16 new text begin section 126C.05 for fiscal year 2015 and later, times the district's enrollment of protected new text end 55.17 new text begin students as a percent of its total enrollment on October 1 of the prior fiscal year times the new text end 55.18 new text begin district's focus rating for the prior fiscal year under Minnesota's 2012 Elementary and new text end 55.19 new text begin Secondary Education Act flexibility request. new text end 55.20 new text begin (c) In each year, .02 percent of each district's initial achievement and integration new text end 55.21 new text begin revenue is transferred to the Department of Education for the oversight and accountability new text end 55.22 new text begin activities required under this section and section 124D.861. new text end 55.23 new text begin (d) A district that did not meet its achievement goals established in section 124D.861 new text end 55.24 new text begin for the previous biennium must report to the commissioner the reasons why the goals were new text end 55.25 new text begin not met. The district must submit a two-year improvement plan to achieve the unmet goals new text end 55.26 new text begin from its achievement and integration plan. A district that does not meet its goals in the new text end 55.27 new text begin improvement plan must have its initial achievement and integration revenue reduced by new text end 55.28 new text begin 20 percent for the current year. new text end 55.29 new text begin (e) Any revenue saved by the reductions in paragraph (d) must be proportionately new text end 55.30 new text begin reallocated on a per adjusted pupil unit basis to all districts that met their achievement new text end 55.31 new text begin goals in the previous biennium. new text end 55.32     new text begin Subd. 3. new text end new text begin Achievement and integration aid. new text end new text begin A district's achievement and new text end 55.33 new text begin integration aid for fiscal year 2014 and later equals the difference between the district's new text end 55.34 new text begin achievement and integration revenue and its achievement and integration levy. new text end 55.35     new text begin Subd. 4. new text end new text begin Achievement and integration levy. new text end new text begin For fiscal year 2014 and later, new text end 55.36 new text begin a district may levy an amount equal to 30 percent of the district's achievement and new text end 56.1 new text begin integration revenue as defined in subdivision 2. For fiscal year 2014 only, a district's new text end 56.2 new text begin achievement and integration levy equals the amount the district was authorized to levy new text end 56.3 new text begin under Laws 2011, First Special Session chapter 11, article 2, section 49, paragraph (f). new text end 56.4     new text begin Subd. 5. new text end new text begin Revenue reserved. new text end new text begin Integration revenue received under this section must new text end 56.5 new text begin be reserved and used only for the programs authorized in subdivision 6. new text end 56.6     new text begin Subd. 6. new text end new text begin Revenue uses. new text end new text begin At least 80 percent of a district's achievement and new text end 56.7 new text begin integration revenue received under this section must be used for innovative and integrated new text end 56.8 new text begin learning environments, family engagement activities, and other approved programs new text end 56.9 new text begin providing direct services to students. Up to 20 percent of the revenue may be used for new text end 56.10 new text begin professional development and staff development activities, and not more than ten percent new text end 56.11 new text begin of this share of the revenue may be used for administrative expenditures. new text end 56.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for revenue for fiscal year 2014 new text end 56.13 new text begin and later. new text end 56.14    Sec. 3. Minnesota Statutes 2012, section 126C.10, subdivision 1, is amended to read: 56.15    Subdivision 1. General education revenue. new text begin (a) For fiscal years 2013 and 2014, new text end the 56.16general education revenue for each district equals the sum of the district's basic revenue, 56.17extended time revenue, gifted and talented revenue, small schools revenue, basic skills 56.18revenue, training and experience revenue, secondary sparsity revenue, elementary sparsity 56.19revenue, transportation sparsity revenue, total operating capital revenue, equity revenue, 56.20alternative teacher compensation revenue, and transition revenue. 56.21 new text begin (b) For fiscal year 2015 and later, the general education revenue for each district new text end 56.22 new text begin equals the sum of the district's basic revenue, extended time revenue, gifted and talented new text end 56.23 new text begin revenue, declining enrollment revenue, small schools revenue, basic supplemental new text end 56.24 new text begin revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity revenue, new text end 56.25 new text begin transportation sparsity revenue, total operating capital revenue, education advancement new text end 56.26 new text begin revenue, equity revenue, pension adjustment revenue, safe schools revenue, and transition new text end 56.27 new text begin revenue. new text end 56.28    Sec. 4. Minnesota Statutes 2012, section 126C.10, subdivision 27, is amended to read: 56.29    Subd. 27. District equity index. new text begin (a) new text end A district's equity index equals new text begin the greater new text end 56.30 new text begin of zero or new text end the ratio of the sum of the district equity gap amount to the regional equity 56.31gap amount new text begin $1,600 minus the district's referendum revenue under section 126C.17, new text end 56.32 new text begin subdivision 4, per adjusted pupil unit to $1,600 new text end . 57.1 new text begin (b) A charter school's equity index equals the greater of zero or the ratio of $1,600 new text end 57.2 new text begin minus the school's general education revenue attributable to referendum equalization aid new text end 57.3 new text begin under section 124D.11, subdivision 1, per adjusted pupil unit to $1,600. new text end 57.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for revenue for fiscal year 2015 new text end 57.5 new text begin and later. new text end 57.6    Sec. 5. Minnesota Statutes 2012, section 126C.10, is amended by adding a subdivision 57.7to read: 57.8     new text begin Subd. 37. new text end new text begin Education advancement revenue. new text end new text begin The education advancement revenue new text end 57.9 new text begin for each district equals the advancement allowance times the adjusted pupil units for the new text end 57.10 new text begin school year. The advancement allowance for fiscal year 2015 and later years is $300. new text end 57.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for revenue for fiscal year 2015 new text end 57.12 new text begin and later. new text end 57.13    Sec. 6. Minnesota Statutes 2012, section 126C.10, is amended by adding a subdivision 57.14to read: 57.15     new text begin Subd. 39. new text end new text begin Education advancement levy. new text end new text begin To obtain education advancement new text end 57.16 new text begin revenue, a district may levy an amount not more than the product of its education new text end 57.17 new text begin advancement revenue for the fiscal year times the lesser of one or the ratio of its new text end 57.18 new text begin referendum market value per resident pupil unit to the education advancement revenue new text end 57.19 new text begin equalizing factor. The education advancement revenue equalizing factor equals $785,000. new text end 57.20 new text begin If a district adopts a board resolution to levy less than the permitted levy, the district's new text end 57.21 new text begin education advancement aid shall be reduced proportionately. new text end 57.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for revenue for fiscal year 2015 new text end 57.23 new text begin and later. new text end 57.24    Sec. 7. Minnesota Statutes 2012, section 126C.10, is amended by adding a subdivision 57.25to read: 57.26     new text begin Subd. 40. new text end new text begin Education advancement aid. new text end new text begin For fiscal year 2015 and later, a school new text end 57.27 new text begin district's education advancement aid is the product of: (1) the difference between the new text end 57.28 new text begin district's education advancement revenue and the education advancement levy; times (2) new text end 57.29 new text begin the ratio of the actual amount levied to the permitted levy. new text end 57.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for revenue for fiscal year 2015 new text end 57.31 new text begin and later. new text end 58.1    Sec. 8. Minnesota Statutes 2012, section 126C.13, is amended by adding a subdivision 58.2to read: 58.3     new text begin Subd. 3c. new text end new text begin General education levy; districts off the formula. new text end new text begin (a) If the amount of new text end 58.4 new text begin the general education levy for a district exceeds the district's general education revenue, new text end 58.5 new text begin excluding equity revenue, transition revenue, and education advancement revenue, the new text end 58.6 new text begin amount of the general education levy must be limited to the district's general education new text end 58.7 new text begin revenue, excluding equity revenue, transition revenue, and education advancement revenue. new text end 58.8     new text begin (b) A levy made according to this subdivision shall also be construed to be the levy new text end 58.9 new text begin made according to subdivision 3b. new text end 58.10    Sec. 9. Minnesota Statutes 2012, section 126C.13, subdivision 4, is amended to read: 58.11    Subd. 4. General education aid. new text begin (a) new text end For fiscal years 2007 new text begin 2013 new text end and later new text begin 2014 only new text end , 58.12a district's general education aid is the sum of the following amounts: 58.13    (1) general education revenue, excluding equity revenue, total operating capital 58.14revenue, alternative teacher compensation revenue, and transition revenue; 58.15    (2) operating capital aid under section 126C.10, subdivision 13b; 58.16    (3) equity aid under section 126C.10, subdivision 30; 58.17    (4) alternative teacher compensation aid under section 126C.10, subdivision 36; 58.18    (5) transition aid under section 126C.10, subdivision 33; 58.19    (6) shared time aid under section 126C.01, subdivision 7; 58.20    (7) referendum aid under section 126C.17, subdivisions 7 and 7a; and 58.21    (8) online learning aid according to section 124D.096. 58.22 new text begin (b) For fiscal year 2015 and later, a district's general education aid equals: new text end 58.23 new text begin (1) general education revenue, excluding equity revenue, transition revenue, and new text end 58.24 new text begin education advancement revenue, minus the general education levy, multiplied times the new text end 58.25 new text begin ratio of the actual amount of general education levied to the permitted general education new text end 58.26 new text begin levy; plus new text end 58.27 new text begin (2) equity aid under section 126C.10, subdivision 30; plus new text end 58.28 new text begin (3) transition aid under section 126C.10, subdivision 33; plus new text end 58.29 new text begin (4) education advancement aid under section 126C.10, subdivision 40; plus new text end 58.30 new text begin (5) shared time aid under section 126C.10, subdivision 7; plus new text end 58.31 new text begin (6) referendum aid under section 126C.17, subdivisions 7 and 7a; plus new text end 58.32 new text begin (7) online learning aid under section 124D.096. new text end 58.33    Sec. 10. Minnesota Statutes 2012, section 126C.17, is amended to read: 58.34126C.17 REFERENDUM REVENUE. 59.1    Subdivision 1. Referendum allowance. (a) For fiscal year 2003 and later, a district's 59.2initial referendum revenue allowance equals the sum of the allowance under section 59.3126C.16, subdivision 2, plus any additional allowance per resident marginal cost pupil 59.4unit authorized under subdivision 9 before May 1, 2001, for fiscal year 2002 and later, 59.5plus the referendum conversion allowance approved under subdivision 13, minus $415. 59.6For districts with more than one referendum authority, the reduction must be computed 59.7separately for each authority. The reduction must be applied first to the referendum 59.8conversion allowance and next to the authority with the earliest expiration date. A 59.9district's initial referendum revenue allowance may not be less than zero. 59.10(b) For fiscal year 2003, a district's referendum revenue allowance equals the initial 59.11referendum allowance plus any additional allowance per resident marginal cost pupil unit 59.12authorized under subdivision 9 between April 30, 2001, and December 30, 2001, for 59.13fiscal year 2003 and later. 59.14(c) For fiscal year 2004 and later, a district's referendum revenue allowance equals 59.15the sum of: 59.16(1) the product of (i) the ratio of the resident marginal cost pupil units the district 59.17would have counted for fiscal year 2004 under Minnesota Statutes 2002, section , 59.18to the district's resident marginal cost pupil units for fiscal year 2004, times (ii) the initial 59.19referendum allowance plus any additional allowance per resident marginal cost pupil unit 59.20authorized under subdivision 9 between April 30, 2001, and May 30, 2003, for fiscal 59.21year 2003 and later, plus 59.22(2) any additional allowance per resident marginal cost pupil unit authorized under 59.23subdivision 9 after May 30, 2003, for fiscal year 2005 and later. 59.24 new text begin (a) A district's initial referendum allowance for fiscal year 2015 equals the result of new text end 59.25 new text begin the following calculations: new text end 59.26 new text begin (1) multiply the referendum allowance the district would have received for fiscal new text end 59.27 new text begin year 2015 under section 126C.17, subdivision 1, based on elections held before July 1, new text end 59.28 new text begin 2013, by the resident marginal cost pupil units the district would have counted for fiscal new text end 59.29 new text begin year 2015 under section 126C.05; new text end 59.30 new text begin (2) add to the result of clause (1) the adjustment the district would have received new text end 59.31 new text begin under section 127A.47, subdivision 7, paragraphs (a), (b), and (c), based on elections new text end 59.32 new text begin held before July 1, 2013; new text end 59.33 new text begin (3) divide the result of clause (2) by the district's adjusted pupil units for fiscal new text end 59.34 new text begin year 2015, notwithstanding section 126C.05, subdivision 1, paragraph (d), calculated as new text end 59.35 new text begin though a kindergarten pupil not included in section 126C.05, subdivision 1, paragraph new text end 59.36 new text begin (c), is counted as 0.55 pupil units, and subtract $300; and new text end 60.1 new text begin (4) if the result of clause (3) is less than zero, set the allowance to zero. new text end 60.2 new text begin (b) A district's referendum allowance equals the sum of the district's initial new text end 60.3 new text begin referendum allowance for fiscal year 2015, plus any additional referendum allowance per new text end 60.4 new text begin adjusted pupil unit authorized after June 30, 2013, minus any allowances expiring in fiscal new text end 60.5 new text begin year 2016 or later. For a district with more than one referendum allowance for fiscal year new text end 60.6 new text begin 2015 under section 126C.17, the allowance calculated under paragraph (a) must be divided new text end 60.7 new text begin into components such that the same percentage of the district's allowance expires at the new text end 60.8 new text begin same time as the old allowances would have expired under section 126C.17. new text end 60.9    Subd. 2. Referendum allowance limit. (a) Notwithstanding subdivision 1, for fiscal 60.10year 2007 new text begin 2015 new text end and later, a district's referendum allowance must not exceed the greater of: 60.11(1) the sum of: (i) a district's referendum allowance for fiscal year 1994 times 1.177 60.12times the annual inflationary increase as calculated under paragraph (b) plus (ii) its 60.13referendum conversion allowance for fiscal year 2003, minus (iii) $215; 60.14(2) the greater of (i): 26 percent of the formula allowance or (ii) $1,294 times new text begin is the new text end 60.15 new text begin base referendum amount calculated in paragraph (b) minus $300. A district's referendum new text end 60.16 new text begin allowance under this subdivision must not be less than zero. new text end 60.17 new text begin (b) The base referendum amount is new text end the annual inflationary increase as calculated 60.18under paragraph (b); or new text begin times the greatest of: new text end 60.19 new text begin (1) $1,845; new text end 60.20 new text begin (2) the sum of the referendum revenue the district would have received for fiscal year new text end 60.21 new text begin 2015 under section 126C.17, subdivision 4, based on elections held before July 1, 2013, new text end 60.22 new text begin and the adjustment the district would have received under section 127A.47, subdivision new text end 60.23 new text begin 7, paragraphs (a), (b), and (c), based on elections held before July 1, 2013, divided by new text end 60.24 new text begin the district's adjusted pupil units for fiscal year 2015, notwithstanding section 126C.05, new text end 60.25 new text begin subdivision 1, paragraph (d), calculated as though a kindergarten pupil not included in new text end 60.26 new text begin section 126C.05, subdivision 1, paragraph (c), is counted as 0.55 pupil units; or new text end 60.27 new text begin (3) the product of the referendum allowance limit the district would have received new text end 60.28 new text begin for fiscal year 2015 under section 126C.17, subdivision 2, and the resident marginal cost new text end 60.29 new text begin pupil units the district would have received for fiscal year 2015 under section 126C.05, new text end 60.30 new text begin subdivision 6, plus the adjustment the district would have received under section 127A.47, new text end 60.31 new text begin subdivision 7, paragraphs (a), (b), and (c), based on elections held before July 1, 2013, new text end 60.32 new text begin divided by the district's adjusted pupil units for fiscal year 2015, notwithstanding section new text end 60.33 new text begin 126C.05, subdivision 1, paragraph (d), calculated as though a kindergarten pupil not new text end 60.34 new text begin included in section 126C.05, subdivision 1, paragraph (c), is counted as 0.55 pupil units; or new text end 61.1(3) new text begin (4) new text end for a newly reorganized district created after July 1, 2006 new text begin 2013 new text end , the referendum 61.2revenue authority for each reorganizing district in the year preceding reorganization divided 61.3by its resident marginal cost new text begin adjusted new text end pupil units for the year preceding reorganization. 61.4(b) new text begin (c) new text end For purposes of this subdivision, for fiscal year 2005 new text begin 2016 new text end and later, 61.5"inflationary increase" means one plus the percentage change in the Consumer Price Index 61.6for urban consumers, as prepared by the United States Bureau of Labor Standards, for the 61.7current fiscal year to fiscal year 2004 new text begin 2015 new text end . For fiscal years 2009 new text begin year 2016 new text end and later, for 61.8purposes of paragraph (a), clause (1) new text begin (3) new text end , the inflationary increase equals the inflationary 61.9increase for fiscal year 2008 plus one-fourth of the percentage increase in the formula 61.10allowance for that year compared with the formula allowance for fiscal year 2008 new text begin 2015 new text end . 61.11    Subd. 3. Sparsity exception. A district that qualifies for sparsity revenue under 61.12section 126C.10 is not subject to a referendum allowance limit. 61.13    Subd. 4. Total referendum revenue. The total referendum revenue for each district 61.14equals the district's referendum allowance times the resident marginal cost new text begin adjusted new text end pupil 61.15units for the school year. 61.16    Subd. 5. Referendum equalization revenue. (a) For fiscal year 2003 and later, 61.17 A district's referendum equalization revenue equals the sum of the first tier referendum 61.18equalization revenue and the second tier referendum equalization revenue. 61.19(b) A district's first tier referendum equalization revenue equals the district's first 61.20tier referendum equalization allowance times the district's resident marginal cost new text begin adjusted new text end 61.21 pupil units for that year. 61.22(c) For fiscal year 2006, a district's first tier referendum equalization allowance 61.23equals the lesser of the district's referendum allowance under subdivision 1 or $500. For 61.24fiscal year 2007, a district's first tier referendum equalization allowance equals the lesser 61.25of the district's referendum allowance under subdivision 1 or $600. 61.26For fiscal year 2008 and later, A district's first tier referendum equalization allowance 61.27equals the lesser of the district's referendum allowance under subdivision 1 or $700 new text begin $775 new text end . 61.28(d) A district's second tier referendum equalization revenue equals the district's 61.29second tier referendum equalization allowance times the district's resident marginal cost 61.30 new text begin adjusted new text end pupil units for that year. 61.31(e) For fiscal year 2006, a district's second tier referendum equalization allowance 61.32equals the lesser of the district's referendum allowance under subdivision 1 or 18.6 percent 61.33of the formula allowance, minus the district's first tier referendum equalization allowance. 61.34For fiscal year 2007 and later, A district's second tier referendum equalization allowance 61.35equals the lesser of the district's referendum allowance under subdivision 1 or 26 new text begin 25 new text end percent 61.36of the formula allowance, minus the district's first tier referendum equalization allowance. 62.1(f) Notwithstanding paragraph (e), the second tier referendum allowance for a 62.2district qualifying for secondary sparsity revenue under section 126C.10, subdivision 7, or 62.3elementary sparsity revenue under section 126C.10, subdivision 8, equals the district's 62.4referendum allowance under subdivision 1 minus the district's first tier referendum 62.5equalization allowance. 62.6    Subd. 6. Referendum equalization levy. (a) For fiscal year 2003 and later, 62.7a district's referendum equalization levy equals the sum of the first tier referendum 62.8equalization levy and the second tier referendum equalization levy. 62.9(b) A district's first tier referendum equalization levy equals the district's first tier 62.10referendum equalization revenue times the lesser of one or the ratio of the district's 62.11referendum market value per resident marginal cost pupil unit to $476,000 new text begin $538,200 new text end . 62.12(c) A district's second tier referendum equalization levy equals the district's second 62.13tier referendum equalization revenue times the lesser of one or the ratio of the district's 62.14referendum market value per resident marginal cost pupil unit to $270,000 new text begin $259,415 new text end . 62.15    Subd. 7. Referendum equalization aid. (a) A district's referendum equalization aid 62.16equals the difference between its referendum equalization revenue and levy. 62.17(b) If a district's actual levy for first or second tier referendum equalization revenue 62.18is less than its maximum levy limit for that tier, aid shall be proportionately reduced. 62.19(c) Notwithstanding paragraph (a), the referendum equalization aid for a district, 62.20where the referendum equalization aid under paragraph (a) exceeds 90 percent of the 62.21referendum revenue, must not exceed 26 new text begin 25 new text end percent of the formula allowance times the 62.22district's resident marginal cost new text begin adjusted new text end pupil units. A district's referendum levy is 62.23increased by the amount of any reduction in referendum aid under this paragraph. 62.24    Subd. 7a. Referendum tax base replacement aid. For each school district that 62.25had a referendum allowance for fiscal year 2002 exceeding $415, for each separately 62.26authorized referendum levy, the commissioner of revenue, in consultation with the 62.27commissioner of education, shall certify the amount of the referendum levy in taxes 62.28payable year 2001 attributable to the portion of the referendum allowance exceeding $415 62.29levied against property classified as class 2, noncommercial 4c(1), or 4c(4), under section 62.30273.13 , excluding the portion of the tax paid by the portion of class 2a property consisting 62.31of the house, garage, and surrounding one acre of land. The resulting amount must be 62.32used to reduce the district's referendum levy amount otherwise determined, and must be 62.33paid to the district each year that the referendum authority remains in effect, is renewed, 62.34or new referendum authority is approved. The aid payable under this subdivision must 62.35be subtracted from the district's referendum equalization aid under subdivision 7. The 62.36referendum equalization aid after the subtraction must not be less than zero. 63.1     new text begin Subd. 7b. new text end new text begin Referendum aid guarantee. new text end new text begin (a) Notwithstanding subdivision 7, a new text end 63.2 new text begin district's referendum equalization aid for fiscal year 2015 must not be less than the sum of new text end 63.3 new text begin the referendum equalization aid the district would have received for fiscal year 2015 under new text end 63.4 new text begin section 126C.17, subdivision 7, and the adjustment the district would have received under new text end 63.5 new text begin section 127A.47, subdivision 7, paragraphs (a), (b), and (c). new text end 63.6 new text begin (b) Notwithstanding subdivision 7, referendum equalization aid for fiscal year 2016 new text end 63.7 new text begin and later, for a district qualifying for additional aid under paragraph (a) for fiscal year new text end 63.8 new text begin 2015, must not be less than the product of (1) the district's referendum equalization aid new text end 63.9 new text begin for fiscal year 2015, times (2) the lesser of one or the ratio of the district's referendum new text end 63.10 new text begin revenue for that school year to the district's referendum revenue for fiscal year 2015, times new text end 63.11 new text begin (3) the lesser of one or the ratio of the district's referendum market value used for fiscal new text end 63.12 new text begin year 2015 referendum equalization calculations to the district's referendum market value new text end 63.13 new text begin used for that year's referendum equalization calculations. new text end 63.14    Subd. 8. Unequalized referendum levy. Each year, a district may levy an amount 63.15equal to the difference between its total referendum revenue according to subdivision 4 63.16and its referendum equalization revenue according to subdivision 5. 63.17    Subd. 9. Referendum revenue. (a) The revenue authorized by section 126C.10, 63.18subdivision 1 , may be increased in the amount approved by the voters of the district 63.19at a referendum called for the purpose. The referendum may be called by the board. 63.20The referendum must be conducted one or two calendar years before the increased levy 63.21authority, if approved, first becomes payable. Only one election to approve an increase 63.22may be held in a calendar year. Unless the referendum is conducted by mail under 63.23subdivision 11, paragraph (a), the referendum must be held on the first Tuesday after the 63.24first Monday in November. The ballot must state the maximum amount of the increased 63.25revenue per resident marginal cost new text begin adjusted new text end pupil unit. The ballot may state a schedule, 63.26determined by the board, of increased revenue per resident marginal cost new text begin adjusted new text end pupil 63.27unit that differs from year to year over the number of years for which the increased revenue 63.28is authorized or may state that the amount shall increase annually by the rate of inflation. 63.29For this purpose, the rate of inflation shall be the annual inflationary increase calculated 63.30under subdivision 2, paragraph (b). The ballot may state that existing referendum levy 63.31authority is expiring. In this case, the ballot may also compare the proposed levy authority 63.32to the existing expiring levy authority, and express the proposed increase as the amount, if 63.33any, over the expiring referendum levy authority. The ballot must designate the specific 63.34number of years, not to exceed ten, for which the referendum authorization applies. The 63.35ballot, including a ballot on the question to revoke or reduce the increased revenue amount 63.36under paragraph (c), must abbreviate the term "per resident marginal cost new text begin adjusted new text end pupil 64.1unit" as "per pupil." The notice required under section 275.60 may be modified to read, in 64.2cases of renewing existing levies at the same amount per pupil as in the previous year: 64.3"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING 64.4TO EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS 64.5SCHEDULED TO EXPIRE." 64.6    The ballot may contain a textual portion with the information required in this 64.7subdivision and a question stating substantially the following: 64.8    "Shall the increase in the revenue proposed by (petition to) the board of ........., 64.9School District No. .., be approved?" 64.10    If approved, an amount equal to the approved revenue per resident marginal cost 64.11 new text begin adjusted new text end pupil unit times the resident marginal cost new text begin adjusted new text end pupil units for the school 64.12year beginning in the year after the levy is certified shall be authorized for certification 64.13for the number of years approved, if applicable, or until revoked or reduced by the voters 64.14of the district at a subsequent referendum. 64.15    (b) The board must prepare and deliver by first class mail at least 15 days but no more 64.16than 30 days before the day of the referendum to each taxpayer a notice of the referendum 64.17and the proposed revenue increase. The board need not mail more than one notice to any 64.18taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be 64.19those shown to be owners on the records of the county auditor or, in any county where 64.20tax statements are mailed by the county treasurer, on the records of the county treasurer. 64.21Every property owner whose name does not appear on the records of the county auditor 64.22or the county treasurer is deemed to have waived this mailed notice unless the owner 64.23has requested in writing that the county auditor or county treasurer, as the case may be, 64.24include the name on the records for this purpose. The notice must project the anticipated 64.25amount of tax increase in annual dollars for typical residential homesteads, agricultural 64.26homesteads, apartments, and commercial-industrial property within the school district. 64.27    The notice for a referendum may state that an existing referendum levy is expiring 64.28and project the anticipated amount of increase over the existing referendum levy in 64.29the first year, if any, in annual dollars for typical residential homesteads, agricultural 64.30homesteads, apartments, and commercial-industrial property within the district. 64.31    The notice must include the following statement: "Passage of this referendum will 64.32result in an increase in your property taxes." However, in cases of renewing existing levies, 64.33the notice may include the following statement: "Passage of this referendum extends an 64.34existing operating referendum at the same amount per pupil as in the previous year." 64.35    (c) A referendum on the question of revoking or reducing the increased revenue 64.36amount authorized pursuant to paragraph (a) may be called by the board. A referendum to 65.1revoke or reduce the revenue amount must state the amount per resident marginal cost 65.2pupil unit by which the authority is to be reduced. Revenue authority approved by the 65.3voters of the district pursuant to paragraph (a) must be available to the school district at 65.4least once before it is subject to a referendum on its revocation or reduction for subsequent 65.5years. Only one revocation or reduction referendum may be held to revoke or reduce 65.6referendum revenue for any specific year and for years thereafter. 65.7    (d) The approval of 50 percent plus one of those voting on the question is required to 65.8pass a referendum authorized by this subdivision. 65.9    (e) At least 15 days before the day of the referendum, the district must submit a 65.10copy of the notice required under paragraph (b) to the commissioner and to the county 65.11auditor of each county in which the district is located. Within 15 days after the results 65.12of the referendum have been certified by the board, or in the case of a recount, the 65.13certification of the results of the recount by the canvassing board, the district must notify 65.14the commissioner of the results of the referendum. 65.15    Subd. 10. School referendum levy; market value. A school referendum levy must 65.16be levied against the referendum market value of all taxable property as defined in section 65.17126C.01, subdivision 3 . Any referendum levy amount subject to the requirements of this 65.18subdivision must be certified separately to the county auditor under section 275.07. 65.19    Subd. 11. Referendum date. (a) Except for a referendum held under paragraph (b), 65.20any referendum under this section held on a day other than the first Tuesday after the first 65.21Monday in November must be conducted by mail in accordance with section 204B.46. 65.22Notwithstanding subdivision 9, paragraph (b), to the contrary, in the case of a referendum 65.23conducted by mail under this paragraph, the notice required by subdivision 9, paragraph (b), 65.24must be prepared and delivered by first-class mail at least 20 days before the referendum. 65.25(b) In addition to the referenda allowed in subdivision 9, clause (a), the commissioner 65.26may grant authority to a district to hold a referendum on a different day if the district is in 65.27statutory operating debt and has an approved plan or has received an extension from the 65.28department to file a plan to eliminate the statutory operating debt. 65.29(c) The commissioner must approve, deny, or modify each district's request for a 65.30referendum levy on a different day within 60 days of receiving the request from a district. 65.31    Subd. 13. Referendum conversion allowance. A school district that received 65.32supplemental or transition revenue in fiscal year 2002 may convert its supplemental 65.33revenue conversion allowance and transition revenue conversion allowance to additional 65.34referendum allowance under subdivision 1 for fiscal year 2003 and thereafter. A majority 65.35of the school board must approve the conversion at a public meeting before November 1, 65.362001. For a district with other referendum authority, the referendum conversion allowance 66.1approved by the board continues until the portion of the district's other referendum 66.2authority with the earliest expiration date after June 30, 2006, expires. For a district 66.3with no other referendum authority, the referendum conversion allowance approved by 66.4the board continues until June 30, 2012. 66.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for revenue for fiscal year 2015 new text end 66.6 new text begin and later. new text end 66.7    Sec. 11. new text begin DIRECTION TO THE COMMISSIONER. new text end 66.8 new text begin In computing the reduction to a school district's referendum allowance, the new text end 66.9 new text begin commissioner of education must first reduce a district's referendum allowance with the new text end 66.10 new text begin earliest expiration date and then, if necessary, reduce additional referendum authority new text end 66.11 new text begin allowances based on the next earliest expiration date. new text end 66.12    Sec. 12. new text begin OPERATING REFERENDUM FREEZE, FISCAL YEAR 2015. new text end 66.13 new text begin (a) Notwithstanding Minnesota Statutes, section 126C.17, subdivision 9, a school new text end 66.14 new text begin district may not authorize an increase to its operating referendum in fiscal year 2015. A new text end 66.15 new text begin school district may reauthorize an operating referendum that is expiring in fiscal year new text end 66.16 new text begin 2015. If a school district asks the voters to reauthorize operating referendum authority new text end 66.17 new text begin that is expiring in fiscal year 2015, it may request a reauthorization of that expiring new text end 66.18 new text begin authority minus $300. new text end 66.19 new text begin (b) Paragraph (a) shall not apply to a district if, prior to April 22, 2013, the board new text end 66.20 new text begin adopted a resolution to conduct a referendum in 2013. new text end 66.21    Sec. 13. new text begin CURRENT YEAR AID PERCENTAGE; APPROPRIATION new text end 66.22 new text begin ADJUSTMENTS. new text end 66.23 new text begin (a) Notwithstanding Minnesota Statutes, section 127A.45, subdivision 2, paragraph new text end 66.24 new text begin (d), in fiscal year 2014 and later, the commissioner of education shall reduce the current new text end 66.25 new text begin year aid payment percentage under Minnesota Statutes, section 127A.45, subdivision new text end 66.26 new text begin 2, paragraph (d), by 0.2. new text end 66.27 new text begin (b) For fiscal year 2014 and later, the commissioner of education shall adjust all new text end 66.28 new text begin appropriations in 2013 House File No. 630, if enacted, that are calculated based on a new text end 66.29 new text begin current year aid payment percentage and a final adjustment payment to reflect the current new text end 66.30 new text begin year aid payment percentage, under Minnesota Statutes, section 127A.45, subdivision 2, new text end 66.31 new text begin paragraph (d), as modified by paragraph (a). new text end 66.32    Sec. 14. new text begin APPROPRIATIONS. new text end 67.1     new text begin Subdivision 1. new text end new text begin Department of Education. new text end new text begin The sums indicated in this section are new text end 67.2 new text begin appropriated from the general fund to the Department of Education for the fiscal years new text end 67.3 new text begin designated and are in addition to any amounts appropriated in any other bill for the same new text end 67.4 new text begin purpose. new text end 67.5     new text begin Subd. 2. new text end new text begin General education aid. new text end new text begin For general education aid under Minnesota new text end 67.6 new text begin Statutes, section 126C.13, subdivision 4: new text end 67.7 new text begin $ new text end new text begin 36,460,000 new text end new text begin ..... new text end new text begin 2014 new text end 67.8 new text begin $ new text end new text begin 54,765,000 new text end new text begin ..... new text end new text begin 2015 new text end 67.9 new text begin The 2014 appropriation includes $0 for fiscal year 2013 and $36,460,000 for fiscal new text end 67.10 new text begin year 2014. new text end 67.11 new text begin The 2015 appropriation includes $12,185,000 for fiscal year 2014 and $42,580,000 new text end 67.12 new text begin for fiscal year 2015. new text end 67.13ARTICLE 4 67.14SPECIAL TAXES 67.15    Section 1. Minnesota Statutes 2012, section 237.52, subdivision 3, is amended to read: 67.16    Subd. 3. Collection. Every provider of services capable of originating a TRS call, 67.17including cellular communications and other nonwire access services, in this state shall new text begin , new text end 67.18 new text begin except as provided in subdivision 3a, new text end collect the charges established by the commission 67.19under subdivision 2 and transfer amounts collected to the commissioner of public 67.20safety in the same manner as provided in section 403.11, subdivision 1, paragraph (d). 67.21The commissioner of public safety must deposit the receipts in the fund established in 67.22subdivision 1. 67.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 67.24    Sec. 2. Minnesota Statutes 2012, section 237.52, is amended by adding a subdivision 67.25to read: 67.26     new text begin Subd. 3a. new text end new text begin Fee for prepaid wireless telecommunications service. new text end new text begin The fee new text end 67.27 new text begin established in subdivision 2 does not apply to prepaid wireless telecommunications new text end 67.28 new text begin services as defined in section 403.02, subdivision 17b, which are instead subject to the new text end 67.29 new text begin prepaid wireless telecommunications access Minnesota fee established in section 403.161, new text end 67.30 new text begin subdivision 1, paragraph (b). Collection, remittance, and deposit of prepaid wireless new text end 67.31 new text begin telecommunications access Minnesota fees are governed by sections 403.161 and 403.162. new text end 67.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 68.1    Sec. 3. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read: 68.2    Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly 68.3stated otherwise, "Minnesota tax laws" means: 68.4    (1) the taxes, refunds, and fees administered by or paid to the commissioner under 68.5chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24), 68.6290, 290A, 291, 295, 297A, 297B, and 297H, new text begin and 403, new text end or any similar Indian tribal tax 68.7administered by the commissioner pursuant to any tax agreement between the state and 68.8the Indian tribal government, and includes any laws for the assessment, collection, and 68.9enforcement of those taxes, refunds, and fees; and 68.10    (2) section 273.1315. 68.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 68.12    Sec. 4. Minnesota Statutes 2012, section 270B.12, subdivision 4, is amended to read: 68.13    Subd. 4. Department of Public Safety. The commissioner may disclose return 68.14information to the Department of Public Safety for the purpose of and to the extent 68.15necessary to administer section new text begin sections new text end 270C.725 new text begin and 403.16 to 403.162 new text end . 68.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 68.17    Sec. 5. Minnesota Statutes 2012, section 270C.03, subdivision 1, is amended to read: 68.18    Subdivision 1. Powers and duties. The commissioner shall have and exercise 68.19the following powers and duties: 68.20    (1) administer and enforce the assessment and collection of taxes; 68.21    (2) make determinations, corrections, and assessments with respect to taxes, 68.22including interest, additions to taxes, and assessable penalties; 68.23    (3) use statistical or other sampling techniques consistent with generally accepted 68.24auditing standards in examining returns or records and making assessments; 68.25    (4) investigate the tax laws of other states and countries, and formulate and submit 68.26to the legislature such legislation as the commissioner may deem expedient to prevent 68.27evasions of state revenue laws and to secure just and equal taxation and improvement in 68.28the system of state revenue laws; 68.29    (5) consult and confer with the governor upon the subject of taxation, the 68.30administration of the laws in regard thereto, and the progress of the work of the 68.31department, and furnish the governor, from time to time, such assistance and information 68.32as the governor may require relating to tax matters; 69.1    (6) execute and administer any agreement with the secretary of the treasury or the 69.2Bureau of Alcohol, Tobacco, Firearms and Explosives in the Department of Justice of the 69.3United States or a representative of another state regarding the exchange of information 69.4and administration of the state revenue laws; 69.5    (7) require town, city, county, and other public officers to report information as to the 69.6collection of taxes received from licenses and other sources, and such other information 69.7as may be needful in the work of the commissioner, in such form as the commissioner 69.8may prescribe; 69.9    (8) authorize the use of unmarked motor vehicles to conduct seizures or criminal 69.10investigations pursuant to the commissioner's authority; 69.11    (9) new text begin authorize the participation in audits performed by the Multistate Tax Commission. new text end 69.12 new text begin For the purposes of chapter 270B, the Multistate Tax Commission will be considered to be new text end 69.13 new text begin a state for the purposes of auditing corporate sales, excise, and income tax returns. new text end 69.14     new text begin (10) new text end maintain toll-free telephone access for taxpayer assistance for calls from 69.15locations within the state; and 69.16    (10) new text begin (11) new text end exercise other powers and authority and perform other duties required of or 69.17imposed upon the commissioner by law. 69.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 69.19    Sec. 6. Minnesota Statutes 2012, section 270C.56, subdivision 1, is amended to read: 69.20    Subdivision 1. Liability imposed. A person who, either singly or jointly with 69.21others, has the control of, supervision of, or responsibility for filing returns or reports, 69.22paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a 69.23person who is liable under any other law, is liable for the payment of taxes arising under 69.24chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658, 290.92, and 297E.02, 69.25and the applicable penalties and interest on those taxes. 69.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 69.27    Sec. 7. Minnesota Statutes 2012, section 287.05, is amended by adding a subdivision 69.28to read: 69.29     new text begin Subd. 10. new text end new text begin Hennepin and Ramsey Counties. new text end new text begin For properties located in Hennepin new text end 69.30 new text begin and Ramsey Counties, the county may impose an additional mortgage registry tax as new text end 69.31 new text begin defined in sections 383A.80 and 383B.80. new text end 69.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for all deeds and mortgages new text end 69.33 new text begin acknowledged on or after July 1, 2013. new text end 70.1    Sec. 8. new text begin [287.40] HENNEPIN AND RAMSEY COUNTIES. new text end 70.2     new text begin For properties located in Hennepin and Ramsey Counties, the county may impose an new text end 70.3 new text begin additional deed tax as defined in sections 383A.80 and 383B.80. new text end 70.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for all deeds and mortgages new text end 70.5 new text begin acknowledged on or after July 1, 2013. new text end 70.6    Sec. 9. new text begin [295.61] SPORTS MEMORABILIA GROSS RECEIPTS TAX. new text end 70.7     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms new text end 70.8 new text begin have the meanings given, unless the context clearly indicates otherwise. new text end 70.9 new text begin (b) "Commissioner" means the commissioner of revenue. new text end 70.10 new text begin (c) "Sale" means a transfer of title or possession of tangible personal property, new text end 70.11 new text begin whether absolutely or conditionally. new text end 70.12 new text begin (d) "Sports memorabilia" means items available for sale to the public that are sold new text end 70.13 new text begin under a license granted by any professional or Collegiate Division I sports league or new text end 70.14 new text begin association, a team that is a franchise of a professional sports league or association, or new text end 70.15 new text begin a team that is an affiliate or subsidiary of a professional sports league or association, new text end 70.16 new text begin including: new text end 70.17 new text begin (1) one-of-a-kind items related to sports figures, teams, or events; new text end 70.18 new text begin (2) trading cards; new text end 70.19 new text begin (3) photographs; new text end 70.20 new text begin (4) clothing; new text end 70.21 new text begin (5) sports event licensed items; new text end 70.22 new text begin (6) sports equipment; and new text end 70.23 new text begin (7) similar items, but not food or beverage items. new text end 70.24 new text begin (e) "Wholesale" or "sale at wholesale" means a sale to a retailer, as defined in new text end 70.25 new text begin section 297A.61, subdivision 9, for the purpose of reselling the property to a third party. new text end 70.26 new text begin Wholesale does not mean a sale to a wholesaler. new text end 70.27 new text begin (f) "Wholesaler" means any person making wholesale sales of sports memorabilia new text end 70.28 new text begin to purchasers in the state. new text end 70.29     new text begin Subd. 2. new text end new text begin Imposition. new text end new text begin A tax is imposed on each sale at wholesale of sports new text end 70.30 new text begin memorabilia equal to 13 percent of the gross revenues from the sale. new text end 70.31     new text begin Subd. 3. new text end new text begin Quarterly returns. new text end new text begin Each wholesaler must file quarterly returns and make new text end 70.32 new text begin payments by April 18 for the quarter ending March 31; July 18 for the quarter ending June new text end 70.33 new text begin 30; October 18 for the quarter ending September 30; and January 18 of the following new text end 70.34 new text begin calendar year for the quarter ending December 31. new text end 71.1     new text begin Subd. 4. new text end new text begin Compensating use tax. new text end new text begin If the tax is not paid under subdivision 2, a new text end 71.2 new text begin compensating tax is imposed on a retailer or possessor for sale of sports memorabilia in new text end 71.3 new text begin the state. The rate of tax equals the rate under subdivision 2 and must be paid by the new text end 71.4 new text begin retailer or possessor for sale of the items. new text end 71.5     new text begin Subd. 5. new text end new text begin Allocation for youth sports. new text end new text begin Five percent of the revenue collected new text end 71.6 new text begin under subdivision 2 is appropriated to the commissioner for grants to counties for youth new text end 71.7 new text begin and amateur sports. new text end 71.8     new text begin Subd. 6. new text end new text begin Administrative provisions. new text end new text begin Unless specifically provided otherwise by this new text end 71.9 new text begin section, the relevant audit, assessment, refund, penalty, interest, enforcement, collection new text end 71.10 new text begin remedies, appeal, and administrative provisions of chapters 270C and 289A apply to new text end 71.11 new text begin taxes imposed under this section. new text end 71.12     new text begin Subd. 7. new text end new text begin Disposition of revenues. new text end new text begin The commissioner shall deposit the revenues new text end 71.13 new text begin from the tax, less the amount allocated in under subdivision 5, in the general fund. new text end 71.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 71.15 new text begin June 30, 2013. new text end 71.16    Sec. 10. Minnesota Statutes 2012, section 296A.09, subdivision 2, is amended to read: 71.17    Subd. 2. new text begin Jet fuel and new text end special fuel tax imposed. There is imposed an excise tax 71.18of the same rate new text begin 15 cents new text end per gallon as the aviation gasoline on all jet fuel or special 71.19fuel received, sold, stored, or withdrawn from storage in this state, for use as substitutes 71.20for aviation gasoline and not otherwise taxed as gasoline. Jet fuel is defined in section 71.21296A.01, subdivision 8 . 71.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2014, and applied to sales new text end 71.23 new text begin and purchases made on or after that date. new text end 71.24    Sec. 11. Minnesota Statutes 2012, section 296A.17, subdivision 3, is amended to read: 71.25    Subd. 3. Refund on graduated basis. Any person who has directly or indirectly 71.26paid the excise tax on aviation gasoline or special fuel for aircraft use provided for by this 71.27chapter new text begin under subdivision 2, and the airflight property tax under section 270.72 new text end , shall, as 71.28to all such aviation gasoline and special fuel received, stored, or withdrawn from storage 71.29by the person in this state in any calendar year and not sold or otherwise disposed of to 71.30others, or intended for sale or other disposition to others, on which such tax has been so 71.31paid, be entitled to the following graduated reductions in such tax for that calendar year, to 71.32be obtained by means of the following refunds: 72.1(1) on each gallon of such aviation gasoline or special fuel up to 50,000 gallons, all 72.2but five cents per gallon; 72.3(2) on each gallon of such aviation gasoline or special fuel above 50,000 gallons and 72.4not more than 150,000 gallons, all but two cents per gallon; 72.5(3) on each gallon of such aviation gasoline or special fuel above 150,000 gallons 72.6and not more than 200,000 gallons, all but one cent per gallon; 72.7(4) on each gallon of such aviation gasoline or special fuel above 200,000, all but 72.8one-half cent per gallon. 72.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2014, and applied to sales new text end 72.10 new text begin and purchases made on or after that date. new text end 72.11    Sec. 12. Minnesota Statutes 2012, section 297A.82, subdivision 4, is amended to read: 72.12    Subd. 4. Exemptions. (a) The following transactions are exempt from the tax 72.13imposed in this chapter to the extent provided. 72.14(b) The purchase or use of aircraft previously registered in Minnesota by a 72.15corporation or partnership is exempt if the transfer constitutes a transfer within the 72.16meaning of section 351 or 721 of the Internal Revenue Code. 72.17(c) The sale to or purchase, storage, use, or consumption by a licensed aircraft dealer 72.18of an aircraft for which a commercial use permit has been issued pursuant to section 72.19360.654 is exempt, if the aircraft is resold while the permit is in effect. 72.20(d) Air flight equipment when sold to, or purchased, stored, used, or consumed by 72.21airline companies, as defined in section 270.071, subdivision 4, is exempt. For purposes 72.22of this subdivision, "air flight equipment" includes airplanes and parts necessary for the 72.23repair and maintenance of such air flight equipment, and flight simulators, but does 72.24not include airplanes with a gross weight of less than 30,000 pounds that are used on 72.25intermittent or irregularly timed flights. 72.26(e) Sales of, and the storage, distribution, use, or consumption of aircraft, as defined 72.27in section 360.511 and approved by the Federal Aviation Administration, and which the 72.28seller delivers to a purchaser outside Minnesota or which, without intermediate use, is 72.29shipped or transported outside Minnesota by the purchaser are exempt, but only if the 72.30purchaser is not a resident of Minnesota and provided that the aircraft is not thereafter 72.31returned to a point within Minnesota, except in the course of interstate commerce or 72.32isolated and occasional use, and will be registered in another state or country upon its 72.33removal from Minnesota. This exemption applies even if the purchaser takes possession of 72.34the aircraft in Minnesota and uses the aircraft in the state exclusively for training purposes 72.35for a period not to exceed ten days prior to removing the aircraft from this state. 73.1 new text begin (f) The sale or purchase of the following items that relate to aircraft operated under new text end 73.2 new text begin Federal Aviation Regulations, Parts 91 and 135, and associated installation charges: new text end 73.3 new text begin equipment and parts necessary for repair and maintenance of aircraft; and equipment new text end 73.4 new text begin and parts to upgrade and improve aircraft. new text end 73.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2014, and applied to sales new text end 73.6 new text begin and purchases made on or after that date. new text end 73.7    Sec. 13. Minnesota Statutes 2012, section 297A.82, is amended by adding a 73.8subdivision to read: 73.9     new text begin Subd. 4a. new text end new text begin Deposit in state airports fund. new text end new text begin Tax revenue collected from the sale or new text end 73.10 new text begin purchase of an aircraft taxable under this chapter must be deposited in the state airports new text end 73.11 new text begin fund, established in section 360.017. new text end 73.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2014, and applied to sales new text end 73.13 new text begin and purchases made on or after that date. new text end 73.14    Sec. 14. Minnesota Statutes 2012, section 297E.02, subdivision 1, is amended to read: 73.15    Subdivision 1. Imposition. new text begin (a) new text end A tax is imposed on all lawful gambling other than 73.16(1) paper or electronic pull-tab deals or games; (2) tipboard deals or games; (3) electronic 73.17linked bingo; and (4) items listed in section 297E.01, subdivision 8, clauses (4) and (5), at 73.18the rate of 8.5 percent on the gross receipts as defined in section 297E.01, subdivision 8, 73.19less prizes actually paid. 73.20 new text begin (b) A tax is imposed on the conduct of paper pull-tabs, at the rate of 9 percent on new text end 73.21 new text begin the gross receipts as defined in section 297E.01, subdivision 8, less prizes actually paid. new text end 73.22 new text begin The tax imposed under this paragraph applies only to an organization that conducts lawful new text end 73.23 new text begin gambling in a location where at least 50 percent of its annual gross receipts are received new text end 73.24 new text begin from paper bingo as of January 1, 2013. new text end 73.25 new text begin (c) new text end The tax imposed by this subdivision is in lieu of the tax imposed by section 73.26297A.62 and all local taxes and license fees except a fee authorized under section 349.16, 73.27subdivision 8 , or a tax authorized under subdivision 5. 73.28 new text begin (d) new text end The tax imposed under this subdivision is payable by the organization or party 73.29conducting, directly or indirectly, the gambling. 73.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 73.31    Sec. 15. Minnesota Statutes 2012, section 297E.02, subdivision 6, is amended to read: 74.1    Subd. 6. Combined net receipts tax. (a) In addition to the taxes imposed under 74.2subdivision 1, a tax is imposed on the combined receipts of the organization. As used in 74.3this section, "combined net receipts" is the sum of the organization's gross receipts from 74.4lawful gambling less gross receipts directly derived from the conduct of paper bingo, 74.5raffles, and paddle wheels, as defined in section 297E.01, subdivision 8, and less the net 74.6prizes actually paid, other than prizes actually paid for paper bingo, raffles, and paddle 74.7wheels, for the fiscal year. The combined net receipts of an organization are subject to a 74.8tax computed according to the following schedule: 74.9 74.10 74.11 If the combined net receipts for the fiscal year are: The tax is: 74.12 Not over $87,500 nine percent 74.13 74.14 Over $87,500, but not over $122,500 $7,875 plus 18 percent of the amount over $87,500, but not over $122,500 74.15 74.16 Over $122,500, but not over $157,500 $14,175 plus 27 percent of the amount over $122,500, but not over $157,500 74.17 74.18 Over $157,500 $23,625 plus 36 percent of the amount over $157,500 74.19(b) On or before April 1, 2016, the commissioner shall estimate the total amount of 74.20revenue, including interest and penalties, that will be collected for fiscal year 2016 from 74.21taxes imposed under this chapter. If the amount estimated by the commissioner equals 74.22or exceeds $94,800,000, the commissioner shall certify that effective July 1, 2016, the 74.23rates under this paragraph apply in lieu of the rates under paragraph (a) and shall publish a 74.24notice to that effect in the State Register and notify each taxpayer by June 1, 2016. If the 74.25rates under this section apply, the combined net receipts of an organization are subject to a 74.26tax computed according to the following schedule: 74.27 74.28 74.29 If the combined net receipts for the fiscal year are: The tax is: 74.30 Not over $87,500 8.5 percent 74.31 74.32 Over $87,500, but not over $122,500 $7,438 plus 17 percent of the amount over $87,500, but not over $122,500 74.33 74.34 74.35 Over $122,500, but not over $157,500 $13,388 plus 25.5 percent of the amount over $122,500, but not over $157,500 74.36 74.37 Over $157,500 $22,313 plus 34 percent of the amount over $157,500 74.38(c) Gross receipts derived from sports-themed tipboards are exempt from taxation 74.39under this section. For purposes of this paragraph, a sports-themed tipboard means a 74.40sports-themed tipboard as defined in section 349.12, subdivision 34, under which the 74.41winning numbers are determined by the numerical outcome of a professional sporting event. 75.1 new text begin (d) If an organization conducts lawful gambling in a location where, as of January 1, new text end 75.2 new text begin 2013, at least 50 percent of its annual gross receipts are derived from paper bingo, the new text end 75.3 new text begin organization is exempt from taxation under this subdivision with respect to its receipts new text end 75.4 new text begin from paper pull-tabs. new text end 75.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 75.6    Sec. 16. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision 75.7to read: 75.8     new text begin Subd. 9b. new text end new text begin Little cigar. new text end new text begin "Little cigar" means any roll for smoking made in whole or new text end 75.9 new text begin in part of tobacco if the product is wrapped in a substance containing tobacco other than new text end 75.10 new text begin natural leaf tobacco, uses an integrated cellulose acetate or other similar filter, and weighs new text end 75.11 new text begin not more than 4-1/2 pounds per thousand. new text end 75.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 75.13    Sec. 17. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision 75.14to read: 75.15     new text begin Subd. 10b. new text end new text begin Moist snuff. new text end new text begin "Moist snuff" means any finely cut, ground, or powdered new text end 75.16 new text begin smokeless tobacco that is intended to be placed or dipped in the mouth. new text end 75.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 75.18    Sec. 18. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision 75.19to read: 75.20     new text begin Subd. 13a. new text end new text begin Premium cigar. new text end new text begin "Premium cigar" means any cigar that is new text end 75.21 new text begin hand-constructed and hand-rolled, has a wrapper that is made entirely from whole tobacco new text end 75.22 new text begin leaf, has a filler and binder that is made entirely of tobacco, except for adhesives or other new text end 75.23 new text begin materials used to maintain size, texture, or flavor, and has a wholesale price of no less new text end 75.24 new text begin than $2. new text end 75.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 75.26    Sec. 19. Minnesota Statutes 2012, section 297F.01, subdivision 19, is amended to read: 75.27    Subd. 19. Tobacco products. new text begin (a) new text end "Tobacco products" means any product 75.28containing, made, or derived from tobacco that is intended for human consumption, 75.29whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by 75.30any other means, or any component, part, or accessory of a tobacco product, including, 76.1but not limited to, cigars; little cigars; cheroots; stogies; periques; granulated, plug cut, 76.2crimp cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug 76.3and twist tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, 76.4cuttings and sweepings of tobacco, and other kinds and forms of tobacco; but does not 76.5include cigarettes as defined in this section. Tobacco products excludes any tobacco 76.6product that has been approved by the United States Food and Drug Administration for 76.7sale as a tobacco cessation product, as a tobacco dependence product, or for other medical 76.8purposes, and is being marketed and sold solely for such an approved purpose. 76.9 new text begin (b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4, new text end 76.10 new text begin tobacco products includes a premium cigar, as defined in subdivision 13a. new text end 76.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 76.12    Sec. 20. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read: 76.13    Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in 76.14this state, upon having cigarettes in possession in this state with intent to sell, upon any 76.15person engaged in business as a distributor, and upon the use or storage by consumers, at 76.16the following rates: 76.17(1) on cigarettes weighing not more than three pounds per thousand, 24 new text begin 108.5 new text end mills new text begin , new text end 76.18 new text begin or 10.85 cents, new text end on each such cigarette; and 76.19(2) on cigarettes weighing more than three pounds per thousand, 48 new text begin 217 new text end mills new text begin , or new text end 76.20 new text begin 21.7 cents, new text end on each such cigarette. 76.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 76.22    Sec. 21. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision 76.23to read: 76.24     new text begin Subd. 1a. new text end new text begin Annual indexing. new text end new text begin (a) Each year the commissioner shall adjust the new text end 76.25 new text begin tax rates under subdivision 1, including any adjustment made in prior years under this new text end 76.26 new text begin subdivision, by multiplying the mill rates for the current calendar year by an adjustment new text end 76.27 new text begin factor. The adjustment factor equals the in-lieu sales tax rate that applies to the following new text end 76.28 new text begin calendar year divided by the in-lieu sales tax rate for the current calendar year. For new text end 76.29 new text begin purposes of this subdivision, "in-lieu sales tax rate" means the tax rate established under new text end 76.30 new text begin section 297F.25, subdivision 1, rounded to 1/100 of one cent per cigarette. new text end 76.31     new text begin (b) The commissioner shall publish the resulting rate by November 1 and the rate new text end 76.32 new text begin applies to sales made on or after January 1 of the following year. new text end 77.1 new text begin (c) The determination of the commissioner under this subdivision is not a rule and is new text end 77.2 new text begin not subject to the Administrative Procedure Act in chapter 14. new text end 77.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 77.4    Sec. 22. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read: 77.5    Subd. 3. Rates; tobacco products. new text begin (a) Except as provided in subdivision 3a, new text end a tax is 77.6imposed upon all tobacco products in this state and upon any person engaged in business 77.7as a distributor, at the rate of 35 new text begin 90 new text end percent of the wholesale sales price of the tobacco 77.8products. The tax is imposed at the time the distributor: 77.9(1) brings, or causes to be brought, into this state from outside the state tobacco 77.10products for sale; 77.11(2) makes, manufactures, or fabricates tobacco products in this state for sale in 77.12this state; or 77.13(3) ships or transports tobacco products to retailers in this state, to be sold by those 77.14retailers. 77.15 new text begin (b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a pack new text end 77.16 new text begin of 20 cigarettes weighing not more than three pounds per thousand, as established under new text end 77.17 new text begin subdivision 1, and adjusted by subdivision 1a, is imposed on each container of moist snuff. new text end 77.18 new text begin For purposes of this subdivision, a "container" means the smallest consumer-size can, new text end 77.19 new text begin package, or other container that is marketed or packaged by the manufacturer, distributor, new text end 77.20 new text begin or retailer for separate sale to a retail purchaser. new text end 77.21 new text begin (c) Notwithstanding paragraph (a), for little cigars, the tax on each little cigar shall new text end 77.22 new text begin be equal to the tax imposed per cigarette under subdivision 1, clause (1), and adjusted by new text end 77.23 new text begin subdivision 1a, and any successor provision taxing cigarettes. new text end 77.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013, except the minimum new text end 77.25 new text begin tax under paragraph (b) is effective January 1, 2014. new text end 77.26    Sec. 23. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision 77.27to read: 77.28     new text begin Subd. 3a. new text end new text begin Rates; tobacco. new text end new text begin (a) A tax is imposed upon all premium cigars in this state new text end 77.29 new text begin and upon any person engaged in business as a tobacco product distributor, at the lesser of: new text end 77.30 new text begin (1) the rate of 70 percent of the wholesale sales price of the premium cigars; or new text end 77.31 new text begin (2) $3.50 per premium cigar. new text end 77.32 new text begin (b) The tax imposed under paragraph (a) is imposed at the time the tobacco products new text end 77.33 new text begin distributor: new text end 78.1 new text begin (1) brings, or causes to be brought, into this state from outside the state premium new text end 78.2 new text begin cigars for sale; new text end 78.3 new text begin (2) makes, manufactures, or fabricates premium cigars in this state for sale in this new text end 78.4 new text begin state; or new text end 78.5 new text begin (3) ships or transports premium cigars to retailers in this state, to be sold by those new text end 78.6 new text begin retailers. new text end 78.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 78.8    Sec. 24. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read: 78.9    Subd. 4. Use tax; tobacco products. new text begin (a) Except as provided in subdivision 4a, new text end a tax 78.10is imposed upon the use or storage by consumers of tobacco products in this state, and 78.11upon such consumers, at the rate of 35 new text begin 90 new text end percent of the cost to the consumer of the tobacco 78.12products new text begin or the minimum tax under subdivision 3, paragraph (b), whichever is greater new text end . 78.13 new text begin (b) Notwithstanding paragraph (a), for little cigars, the tax on each little cigar new text end 78.14 new text begin shall be equal to the tax imposed per cigarette under subdivision 1, clause (1), and any new text end 78.15 new text begin successor provision taxing cigarettes. new text end 78.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 78.17    Sec. 25. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision 78.18to read: 78.19     new text begin Subd. 4a. new text end new text begin Use tax; premium cigars. new text end new text begin A tax is imposed upon the use or storage by new text end 78.20 new text begin consumers of all premium cigars in this state, and upon such consumers, at the lesser of: new text end 78.21 new text begin (1) the rate of 70 percent of the cost to the consumer of the premium cigars; or new text end 78.22 new text begin (2) $3.50 per premium cigar. new text end 78.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 78.24    Sec. 26. Minnesota Statutes 2012, section 297F.24, subdivision 1, is amended to read: 78.25    Subdivision 1. Fee imposed. (a) A fee is imposed upon the sale of nonsettlement 78.26cigarettes in this state, upon having nonsettlement cigarettes in possession in this state 78.27with intent to sell, upon any person engaged in business as a distributor, and upon the use 78.28or storage by consumers of nonsettlement cigarettes. The fee equals a rate of 1.75 new text begin 2.5 new text end 78.29cents per cigarette. 78.30(b) The purpose of this fee is to: 78.31(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that 78.32are comparable to costs attributable to the use of the cigarettes; 79.1(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's 79.2policy of discouraging underage smoking by offering nonsettlement cigarettes at prices 79.3substantially below the cigarettes of other manufacturers; and 79.4(3) fund such other purposes as the legislature determines appropriate. 79.5    Sec. 27. Minnesota Statutes 2012, section 297F.25, subdivision 1, is amended to read: 79.6    Subdivision 1. Imposition. (a) A tax is imposed on distributors on the sale of 79.7cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this 79.8state. The tax is equal to 6.5 percent of the weighted average retail price and must be 79.9expressed in cents per pack rounded to the nearest one-tenth of a cent. The weighted 79.10average retail price must be determined annually, with new rates published by November 79.111, and effective for sales on or after January 1 of the following year. The weighted average 79.12retail price must be established by surveying cigarette retailers statewide in a manner 79.13and time determined by the commissioner. The commissioner shall make an inflation 79.14adjustment in accordance with the Consumer Price Index for all urban consumers inflation 79.15indicator as published in the most recent state budget forecast. The commissioner shall use 79.16the inflation factor for the calendar year in which the new tax rate takes effect. If the survey 79.17indicates that the average retail price of cigarettes has not increased relative to the average 79.18retail price in the previous year's survey, then the commissioner shall not make an inflation 79.19adjustment. The determination of the commissioner pursuant to this subdivision is not a 79.20"rule" and is not subject to the Administrative Procedure Act contained in chapter 14. For 79.21packs of cigarettes with other than 20 cigarettes, the tax must be adjusted proportionally. 79.22(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the 79.23tax calculation of the weighted average retail price for the sales of cigarettes from August 79.241, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average 79.25retail price per pack of 20 cigarettes from the most recent survey by the percentage change 79.26in a weighted average of the presumed legal prices for cigarettes during the year after 79.27completion of that survey, as reported and published by the Department of Commerce 79.28under section ; (2) subtracting the sales tax included in the retail price; and (3) 79.29adjusting for expected inflation. The rate must be published by May 1 and is effective for 79.30sales after July 31. If the weighted average of the presumed legal prices indicates that the 79.31average retail price of cigarettes has not increased relative to the average retail price in the 79.32most recent survey, then no inflation adjustment must be made new text begin for any period that a rate new text end 79.33 new text begin change in section 297F.05, subdivision 1, is enacted after the current effective January 1 new text end 79.34 new text begin rate and prior to the following January 1, the commissioner of revenue shall make a new text end 80.1 new text begin proportionate adjustment to the sales tax rate new text end . For packs of cigarettes with other than 20 80.2cigarettes, the new text begin sales new text end tax must be adjusted proportionally. 80.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 80.4    Sec. 28. Minnesota Statutes 2012, section 325F.781, subdivision 1, is amended to read: 80.5    Subdivision 1. Definitions. (a) For purposes of this section, the following terms 80.6have the meanings given, unless the language or context clearly provides otherwise. 80.7(b) "Consumer" means an individual who purchases, receives, or possesses tobacco 80.8products for personal consumption and not for resale. 80.9(c) "Delivery sale" means: 80.10(1) a sale of tobacco products to a consumer in this state when: 80.11(i) the purchaser submits the order for the sale by means of a telephonic or other 80.12method of voice transmission, the mail or any other delivery service, or the Internet or 80.13other online service; or 80.14(ii) the tobacco products are delivered by use of the mail or other delivery service; or 80.15(2) a sale of tobacco products that satisfies the criteria in clause (1), item (i), 80.16regardless of whether the seller is located inside or outside of the state. 80.17A sale of tobacco products to an individual in this state must be treated as a sale to a 80.18consumer, unless the individual is licensed as a distributor or retailer of tobacco products. 80.19(d) "Delivery service" means a person, including the United States Postal Service, 80.20that is engaged in the commercial delivery of letters, packages, or other containers. 80.21(e) "Distributor" means a person, whether located inside or outside of this state, 80.22other than a retailer, who sells or distributes tobacco products in the state. Distributor does 80.23not include a tobacco products manufacturer, export warehouse proprietor, or importer 80.24with a valid permit under United States Code, title 26, section 5712 (1997), if the person 80.25sells or distributes tobacco products in this state only to distributors who hold valid and 80.26current licenses under the laws of a state, or to an export warehouse proprietor or another 80.27manufacturer. Distributor does not include a common or contract carrier that is transporting 80.28tobacco products under a proper bill of lading or freight bill that states the quantity, source, 80.29and destination of tobacco products, or a person who ships tobacco products through this 80.30state by common or contract carrier under a bill of lading or freight bill. 80.31(f) "Retailer" means a person, whether located inside or outside this state, who sells 80.32or distributes tobacco products to a consumer in this state. 80.33(g) "Tobacco products" means: 80.34(1) cigarettes, as defined in section 297F.01, subdivision 3; and 80.35(2) smokeless tobacco as defined in section 325F.76. new text begin ; and new text end 81.1 new text begin (3) premium cigars as defined in section 297F.01, subdivision 13a. new text end 81.2 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 81.3    Sec. 29. Minnesota Statutes 2012, section 349.166, subdivision 1, is amended to read: 81.4    Subdivision 1. Exclusions. (a) Bingo, with the exception of linked bingo games, may 81.5be conducted without a license and without complying with sections 349.168, subdivisions 81.61 and 2; 349.17, subdivisions 4 and 5; 349.18, subdivision 1; and 349.19, if it is conducted: 81.7(1) by an organization in connection with a county fair, the state fair, or a civic 81.8celebration and is not conducted for more than 12 consecutive days and is limited to no more 81.9than four separate applications for activities applied for and approved in a calendar year; or 81.10(2) by an organization that conducts bingo on four or fewer days in a calendar year. 81.11An organization that holds a license to conduct lawful gambling under this chapter 81.12may not conduct bingo under this subdivision. 81.13(b) Bingo may be conducted within a nursing home or a senior citizen housing 81.14project or by a senior citizen organization if the prizes for a single bingo game do not 81.15exceed $10, total prizes awarded at a single bingo occasion do not exceed $200, no more 81.16than two bingo occasions are held by the organization or at the facility each week, only 81.17members of the organization or residents of the nursing home or housing project are 81.18allowed to play in a bingo game, no compensation is paid for any persons who conduct the 81.19bingo, and a manager is appointed to supervise the bingo. Bingo conducted under this 81.20paragraph is exempt from sections 349.11 to 349.23, and the board may not require an 81.21organization that conducts bingo under this paragraph, or the manager who supervises the 81.22bingo, to register or file a report with the board. The gross receipts from bingo conducted 81.23under the limitations of this subdivision are exempt from taxation under chapter 297A. 81.24(c) Raffles may be conducted by an organization without registering with the board if 81.25the value of all raffle prizes awarded by the organization in a calendar year does not exceed 81.26$1,500 new text begin or, if the organization is a 501(c)(3) organization, if the value of all raffle prizes new text end 81.27 new text begin awarded by the organization at one event in a calendar year does not exceed $50,000 new text end . 81.28(d) Except as provided in paragraph (b), the organization must maintain all required 81.29records of excluded gambling activity for 3-1/2 years. 81.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 81.31    Sec. 30. Minnesota Statutes 2012, section 360.531, is amended to read: 81.32360.531 TAXATION. 82.1    Subdivision 1. In lieu tax. All aircraft using the air space overlying the state of 82.2Minnesota or the airports thereof, except as set forth in section 360.55, shall be taxed in 82.3lieu of all other taxes thereon, on the basis and at the rate for the period January 1, 1966, to 82.4June 30, 1967, and for each fiscal year as follows. 82.5    Subd. 2. Rate. The tax shall be at the rate of one percent of value; provided that 82.6the minimum tax on an aircraft subject to the provisions of sections to 360.67 82.7 shall not be less than 25 percent of the tax on said aircraft computed on its base price or 82.8$50 whichever is the higher. new text begin as follows: new text end 82.9 new text begin Base Price new text end new text begin Tax new text end 82.10 new text begin Under $499,999 new text end new text begin $100 new text end 82.11 new text begin $500,000 to $999,999 new text end new text begin $200 new text end 82.12 new text begin $1,000,000 to $2,499,999 new text end new text begin $2,000 new text end 82.13 new text begin $2,500,000 to $4,999,999 new text end new text begin $4,000 new text end 82.14 new text begin $5,000,000 to $7,499,999 new text end new text begin $7,500 new text end 82.15 new text begin $7,500,000 to $9,999,999 new text end new text begin $10,000 new text end 82.16 new text begin $10,000,000 to $12,499,999 new text end new text begin $12,500 new text end 82.17 new text begin $12,500,000 to $14,999,999 new text end new text begin $15,000 new text end 82.18 new text begin $15,000,000 to $17,499,999 new text end new text begin $17,500 new text end 82.19 new text begin $17,500,000 to $19,999,999 new text end new text begin $20,000 new text end 82.20 new text begin $20,000,000 to $22,499,999 new text end new text begin $22,500 new text end 82.21 new text begin $22,500,000 to $24,999,999 new text end new text begin $25,000 new text end 82.22 new text begin $25,000,000 to $27,499,999 new text end new text begin $27,500 new text end 82.23 new text begin $27,500,000 to $29,999,999 new text end new text begin $30,000 new text end 82.24 new text begin $30,000,000 to $39,999,999 new text end new text begin $50,000 new text end 82.25 new text begin $40,000,000 and over new text end new text begin $75,000 new text end 82.26    Subd. 3. First year of life. "First year of life" means the year the aircraft was 82.27manufactured. 82.28    Subd. 4. Base price for taxation. For the purpose of fixing a base price for taxation 82.29from which depreciation in value at a fixed percent per annum can be counted, such new text begin , the new text end 82.30 new text begin base new text end price is defined as follows: 82.31(a) The base price for taxation of an aircraft shall be the manufacturer's list price. 82.32(b) The commissioner shall have authority to fix the base value for taxation purposes 82.33of any aircraft of which no such similar or corresponding model has been manufactured, 82.34and of any rebuilt or foreign aircraft, any aircraft on which a record of the list price is not 82.35available, or any military aircraft converted for civilian use, using as a basis for such 82.36valuation the list price of aircraft with comparable performance characteristics, and taking 82.37into consideration the age and condition of the aircraft. 82.38    Subd. 5. Similarity of corresponding model. Models shall be deemed similar if 82.39substantially alike and of the same make. Models shall be deemed to be corresponding 83.1models for the purpose of taxation under sections 360.54 to 360.67 if of the same make 83.2and having approximately the same weight and type of frame and the same style and 83.3size of motor. 83.4    Subd. 6. Depreciation. After the first year of aircraft life the base value for taxation 83.5purposes shall be reduced as follows: ten percent the second year, and 15 percent the third 83.6and each succeeding year thereafter, but in no event shall such tax be reduced below 83.7the minimum. 83.8    Subd. 7. Prorating tax. When an aircraft first becomes subject to taxation during the 83.9period for which the tax is to be paid, the tax on it shall be for the remainder of that period, 83.10prorated on a monthly basis of 1/12 of the annual tax for each calendar month counting the 83.11month during which it becomes subject to the tax as the first month of such period. 83.12    Subd. 8. Tax, fiscal year. Every aircraft subject to the provisions of sections 83.13360.511 to 360.67 which has at any time since April 19, 1945, used the air space overlying 83.14the state of Minnesota or the airports thereof shall be taxed for the period from January 1, 83.151966, through June 30, 1967, and for each fiscal year thereafter in which it is so used. Any 83.16aircraft which does not use the air space overlying the state of Minnesota or the airports 83.17thereof at any time during the period of January 1, 1966, to and including June 30, 1967, 83.18or at any time during any fiscal year thereafter shall not be subject to the tax provided by 83.19sections 360.511 to 360.67 for such period. Rebuilt aircraft shall be subject to the tax 83.20provided by sections 360.511 to 360.67 for that portion of the aforesaid periods remaining 83.21after the aircraft has been rebuilt, prorated on a monthly basis. 83.22    Subd. 9. Assessed as personal property in certain cases. Aircraft subject to 83.23taxation under the provisions of sections 360.54 to 360.67 shall not be assessed as personal 83.24property and shall be subject to no tax except as provided for by these sections. Aircraft 83.25not subject to taxation as provided in these sections, but subject to taxation as personal 83.26property within the state of Minnesota shall be assessed and valued at 33-1/3 percent of 83.27the market value thereof and taxed at the rate and in the manner provided by law for the 83.28taxation of ordinary personal property. If the person against whom any tax has been levied 83.29on the ad valorem basis because of any aircraft shall, during the calendar year for which 83.30such ad valorem tax is levied, be also taxed under provisions of these sections, then and in 83.31that event, upon proper showing, the commissioner of revenue shall grant to the person 83.32against whom said ad valorem tax was levied, such reduction or abatement of net tax 83.33capacity or taxes as was occasioned by the so-called ad valorem tax imposed. If the ad 83.34valorem tax upon any aircraft has been assessed against a dealer in new and used aircraft, 83.35and the tax imposed by these sections for the required period is thereafter paid by the 83.36owner, then and in that event, upon proper showing, the commissioner of revenue, upon 84.1the application of said dealer, shall grant to such dealer against whom said ad valorem tax 84.2was levied such reduction or abatement of net tax capacity or taxes as was occasioned 84.3by the so-called ad valorem tax imposed. 84.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2014, and applies to aircraft new text end 84.5 new text begin tax due on or after that date. new text end 84.6    Sec. 31. Minnesota Statutes 2012, section 360.66, is amended to read: 84.7360.66 STATE AIRPORTS FUND. 84.8    Subdivision 1. Tax credited to fund. The proceeds of the tax imposed on aircraft 84.9under sections new text begin 360.531 new text end to 360.67 and all fees and penalties provided for therein 84.10shall be collected by the commissioner and paid into the state treasury and credited to the 84.11state airports fund created by other statutes of this state. 84.12    Subd. 2. Reimbursement for expenses. There shall be transferred by the 84.13commissioner of management and budget each year from the state airports fund to the 84.14general fund in the state treasury the amount expended from the latter fund for expenses of 84.15administering the provisions of sections new text begin 360.531 new text end to 360.67. 84.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2014, and applies to aircraft new text end 84.17 new text begin tax due on or after that date. new text end 84.18    Sec. 32. Minnesota Statutes 2012, section 383A.80, subdivision 4, is amended to read: 84.19    Subd. 4. Expiration. The authority to impose the tax under this section expires 84.20January 1, 2013 new text begin 2023 new text end . 84.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for all deeds and mortgages new text end 84.22 new text begin acknowledged on or after July 1, 2013. new text end 84.23    Sec. 33. Minnesota Statutes 2012, section 383B.80, subdivision 4, is amended to read: 84.24    Subd. 4. Expiration. The authority to impose the tax under this section expires 84.25January 1, 2013 new text begin 2023 new text end . 84.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for all deeds and mortgages new text end 84.27 new text begin acknowledged on or after July 1, 2013. new text end 84.28    Sec. 34. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision 84.29to read: 85.1     new text begin Subd. 17b. new text end new text begin Prepaid wireless telecommunications service. new text end new text begin "Prepaid wireless new text end 85.2 new text begin telecommunications service" means a wireless telecommunications service that allows the new text end 85.3 new text begin caller to dial 911 to access the 911 system, which service must be paid for in advance and is: new text end 85.4 new text begin (1) sold in predetermined units or dollars of which the number declines with use in a new text end 85.5 new text begin known amount; or new text end 85.6 new text begin (2) provides unlimited use for a predetermined time period. new text end 85.7 new text begin The inclusion of nontelecommunications services, including the download of digital new text end 85.8 new text begin products delivered electronically, content, and ancillary services, with a prepaid wireless new text end 85.9 new text begin telephone service does not preclude that service from being considered a prepaid wireless new text end 85.10 new text begin telephone service under this chapter. new text end 85.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 85.12    Sec. 35. Minnesota Statutes 2012, section 403.02, is amended by adding a subdivision 85.13to read: 85.14     new text begin Subd. 20a. new text end new text begin Wireless telecommunications service. new text end new text begin "Wireless telecommunications new text end 85.15 new text begin service" means a commercial mobile radio service, as that term is defined in United new text end 85.16 new text begin States Code, title 47, section 332, subsection (d), including all broadband personal new text end 85.17 new text begin communication services, wireless radio telephone services, and geographic area new text end 85.18 new text begin specialized mobile radio licensees, that offer real-time, two-way voice service new text end 85.19 new text begin interconnected with the public switched telephone network. new text end 85.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 85.21    Sec. 36. Minnesota Statutes 2012, section 403.02, subdivision 21, is amended to read: 85.22    Subd. 21. Wireless telecommunications service provider. "Wireless 85.23telecommunications service provider" means a provider of commercial mobile radio 85.24services, as that term is defined in United States Code, title 47, section 332, subsection 85.25(d), including all broadband personal communications services, wireless radio telephone 85.26services, geographic area specialized and enhanced specialized mobile radio services, and 85.27incumbent wide area specialized mobile radio licensees, that offers real-time, two-way 85.28voice service interconnected with the public switched telephone network and that is doing 85.29business in the state of Minnesota new text begin wireless telecommunications service new text end . 85.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 85.31    Sec. 37. Minnesota Statutes 2012, section 403.06, subdivision 1a, is amended to read: 86.1    Subd. 1a. Biennial budget; annual financial report. The commissioner shall 86.2prepare a biennial budget for maintaining the 911 system. By December 15 of each year, 86.3the commissioner shall submit a report to the legislature detailing the expenditures for 86.4maintaining the 911 system, the 911 fees collected, the balance of the 911 fund, and the 86.5911-related administrative expenses of the commissioner new text begin , and of a separate accounting new text end 86.6 new text begin of E911 fees from prepaid wireless customers new text end . The commissioner is authorized to 86.7expend money that has been appropriated to pay for the maintenance, enhancements, 86.8and expansion of the 911 system. 86.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 86.10    Sec. 38. Minnesota Statutes 2012, section 403.11, subdivision 1, is amended to read: 86.11    Subdivision 1. Emergency telecommunications service fee; account. (a) Each 86.12customer of a wireless or wire-line switched or packet-based telecommunications service 86.13provider connected to the public switched telephone network that furnishes service capable 86.14of originating a 911 emergency telephone call is assessed a fee based upon the number 86.15of wired or wireless telephone lines, or their equivalent, to cover the costs of ongoing 86.16maintenance and related improvements for trunking and central office switching equipment 86.17for 911 emergency telecommunications service, to offset administrative and staffing costs 86.18of the commissioner related to managing the 911 emergency telecommunications service 86.19program, to make distributions provided for in section 403.113, and to offset the costs, 86.20including administrative and staffing costs, incurred by the State Patrol Division of the 86.21Department of Public Safety in handling 911 emergency calls made from wireless phones. 86.22    (b) Money remaining in the 911 emergency telecommunications service account 86.23after all other obligations are paid must not cancel and is carried forward to subsequent 86.24years and may be appropriated from time to time to the commissioner to provide financial 86.25assistance to counties for the improvement of local emergency telecommunications 86.26services. The improvements may include providing access to 911 service for 86.27telecommunications service subscribers currently without access and upgrading existing 86.28911 service to include automatic number identification, local location identification, 86.29automatic location identification, and other improvements specified in revised county 86.30911 plans approved by the commissioner. 86.31    (c) The fee may not be less than eight cents nor more than 65 cents a month until 86.32June 30, 2008, not less than eight cents nor more than 75 cents a month until June 30, 86.332009, not less than eight cents nor more than 85 cents a month until June 30, 2010, and 86.34not less than eight cents nor more than 95 cents a month on or after July 1, 2010, for 86.35each customer access line or other basic access service, including trunk equivalents as 87.1designated by the Public Utilities Commission for access charge purposes and including 87.2wireless telecommunications services. With the approval of the commissioner of 87.3management and budget, the commissioner of public safety shall establish the amount of 87.4the fee within the limits specified and inform the companies and carriers of the amount to 87.5be collected. When the revenue bonds authorized under section 403.27, subdivision 1, 87.6have been fully paid or defeased, the commissioner shall reduce the fee to reflect that debt 87.7service on the bonds is no longer needed. The commissioner shall provide companies and 87.8carriers a minimum of 45 days' notice of each fee change. The fee must be the same for all 87.9customers new text begin , except that the fee imposed under this subdivision does not apply to prepaid new text end 87.10 new text begin wireless telecommunications service, which is instead subject to the fee imposed under new text end 87.11 new text begin section 403.161, subdivision 1, paragraph (a) new text end . 87.12    (d) The fee must be collected by each wireless or wire-line telecommunications 87.13service provider subject to the fee. Fees are payable to and must be submitted to the 87.14commissioner monthly before the 25th of each month following the month of collection, 87.15except that fees may be submitted quarterly if less than $250 a month is due, or annually if 87.16less than $25 a month is due. Receipts must be deposited in the state treasury and credited 87.17to a 911 emergency telecommunications service account in the special revenue fund. The 87.18money in the account may only be used for 911 telecommunications services. 87.19    (e) This subdivision does not apply to customers of interexchange carriers. 87.20    (f) The installation and recurring charges for integrating wireless 911 calls into 87.21enhanced 911 systems are eligible for payment by the commissioner if the 911 service 87.22provider is included in the statewide design plan and the charges are made pursuant to 87.23contract. 87.24    (g) Competitive local exchanges carriers holding certificates of authority from the 87.25Public Utilities Commission are eligible to receive payment for recurring 911 services. 87.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 87.27    Sec. 39. Minnesota Statutes 2012, section 403.11, is amended by adding a subdivision 87.28to read: 87.29     new text begin Subd. 6. new text end new text begin Report. new text end new text begin (a) Beginning September 1, 2013, and continuing semiannually new text end 87.30 new text begin thereafter, each wireless telecommunications service provider shall report to the new text end 87.31 new text begin commissioner, based on the mobile telephone number, both the total number of prepaid new text end 87.32 new text begin wireless telecommunications subscribers sourced to Minnesota and the total number of new text end 87.33 new text begin wireless telecommunications subscribers sourced to Minnesota. The report must be filed new text end 87.34 new text begin on the same schedule as Federal Communications Commission Form 477. new text end 88.1 new text begin (b) The commissioner shall make a standard form available to all wireless new text end 88.2 new text begin telecommunications service providers for submitting information required to compile new text end 88.3 new text begin the report required under this subdivision. new text end 88.4 new text begin (c) The information provided to the commissioner under this subdivision is new text end 88.5 new text begin considered trade secret data under section 13.37 and may only be used for purposes of new text end 88.6 new text begin administering this chapter. new text end 88.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 88.8    Sec. 40. new text begin [403.16] DEFINITIONS. new text end 88.9     new text begin Subdivision 1. new text end new text begin Scope. new text end new text begin For the purposes of sections 403.16 to 403.164, the terms new text end 88.10 new text begin defined in this section have the meanings given them. new text end 88.11     new text begin Subd. 2. new text end new text begin Consumer. new text end new text begin "Consumer" means a person who purchases prepaid wireless new text end 88.12 new text begin telecommunications service in a retail transaction. new text end 88.13     new text begin Subd. 3. new text end new text begin Department. new text end new text begin "Department" means the Department of Revenue. new text end 88.14     new text begin Subd. 4. new text end new text begin Prepaid wireless E911 fee. new text end new text begin "Prepaid wireless E911 fee" means the fee that new text end 88.15 new text begin is required to be collected by a seller from a consumer as established in section 403.161, new text end 88.16 new text begin subdivision 1, paragraph (a). new text end 88.17     new text begin Subd. 5. new text end new text begin Prepaid wireless telecommunications access Minnesota fee. new text end new text begin "Prepaid new text end 88.18 new text begin wireless telecommunications access Minnesota fee" means the fee that is required to be new text end 88.19 new text begin collected by a seller from a consumer as established in section 403.161, subdivision 1, new text end 88.20 new text begin paragraph (b). new text end 88.21     new text begin Subd. 6. new text end new text begin Provider. new text end new text begin "Provider" means a person that provides prepaid wireless new text end 88.22 new text begin telecommunications service under a license issued by the Federal Communications new text end 88.23 new text begin Commission. new text end 88.24     new text begin Subd. 7. new text end new text begin Retail transaction. new text end new text begin "Retail transaction" means the purchase of prepaid new text end 88.25 new text begin wireless telecommunications service from a seller for any purpose other than resale. new text end 88.26     new text begin Subd. 8. new text end new text begin Seller. new text end new text begin "Seller" means a person who sells prepaid wireless new text end 88.27 new text begin telecommunications service to another person. new text end 88.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 88.29    Sec. 41. new text begin [403.161] PREPAID WIRELESS FEES IMPOSED; COLLECTION; new text end 88.30 new text begin REMITTANCE. new text end 88.31     new text begin Subdivision 1. new text end new text begin Fees imposed. new text end new text begin (a) A prepaid wireless E911 fee of 80 cents per retail new text end 88.32 new text begin transaction is imposed on prepaid wireless telecommunications service until the fee is new text end 88.33 new text begin adjusted as an amount per retail transaction under subdivision 6. new text end 89.1 new text begin (b) A prepaid wireless telecommunications access Minnesota fee, in the amount of new text end 89.2 new text begin the monthly charge provided for in section 237.52, subdivision 2, is imposed on each new text end 89.3 new text begin retail transaction for prepaid wireless telecommunications service until the fee is adjusted new text end 89.4 new text begin as an amount per retail transaction under subdivision 6. new text end 89.5     new text begin Subd. 2. new text end new text begin Exemption. new text end new text begin The fees established under subdivision 1 are not imposed on a new text end 89.6 new text begin minimal amount of prepaid wireless telecommunications service that is sold with a prepaid new text end 89.7 new text begin wireless device and is charged a single nonitemized price, and a seller may not apply the new text end 89.8 new text begin fees to such a transaction. For purposes of this subdivision, a minimal amount of service new text end 89.9 new text begin means an amount of service denominated as either ten minutes or less or $5 or less. new text end 89.10     new text begin Subd. 3. new text end new text begin Fee collected. new text end new text begin The prepaid wireless E911 and telecommunications new text end 89.11 new text begin access Minnesota fees must be collected by the seller from the consumer for each retail new text end 89.12 new text begin transaction occurring in this state. The amount of each fee must be combined into one new text end 89.13 new text begin amount, which must be separately stated on an invoice, receipt, or other similar document new text end 89.14 new text begin that is provided to the consumer by the seller, or otherwise disclosed to the consumer. new text end 89.15     new text begin Subd. 4. new text end new text begin Sales and use tax treatment. new text end new text begin For purposes of this section, a retail new text end 89.16 new text begin transaction conducted in person by a consumer at a business location of the seller must new text end 89.17 new text begin be treated as occurring in this state if that business location is in this state, and any other new text end 89.18 new text begin retail transaction must be treated as occurring in this state if the retail transaction is treated new text end 89.19 new text begin as occurring in this state for purposes of the sales and use tax as specified in section new text end 89.20 new text begin 297A.669, subdivision 3, paragraph (c). new text end 89.21     new text begin Subd. 5. new text end new text begin Remittance. new text end new text begin The prepaid wireless E911 and telecommunications access new text end 89.22 new text begin Minnesota fees are the liability of the consumer and not of the seller or of any provider, new text end 89.23 new text begin except that the seller is liable to remit all fees that the seller collects from consumers as new text end 89.24 new text begin provided in section 403.162, including all fees that the seller is deemed to collect in which new text end 89.25 new text begin the amount of the fee has not been separately stated on an invoice, receipt, or other similar new text end 89.26 new text begin document provided to the consumer by the seller. new text end 89.27     new text begin Subd. 6. new text end new text begin Exclusion for calculating other charges. new text end new text begin The combined amount of the new text end 89.28 new text begin prepaid wireless E911 and telecommunications access Minnesota fees collected by a seller new text end 89.29 new text begin from a consumer must not be included in the base for measuring any tax, fee, surcharge, new text end 89.30 new text begin or other charge that is imposed by this state, any political subdivision of this state, or new text end 89.31 new text begin any intergovernmental agency. new text end 89.32     new text begin Subd. 7. new text end new text begin Fee changes. new text end new text begin (a) The prepaid wireless E911 and telecommunications new text end 89.33 new text begin access Minnesota fee must be proportionately increased or reduced upon any change to new text end 89.34 new text begin the fee imposed under section 403.11, subdivision 1, paragraph (c), after July 1, 2013, or new text end 89.35 new text begin the fee imposed under section 237.52, subdivision 2, as applicable. new text end 90.1 new text begin (b) The department shall post notice of any fee changes on its Web site at least 30 new text end 90.2 new text begin days in advance of the effective date of the fee changes. It is the responsibility of sellers to new text end 90.3 new text begin monitor the department's Web site for notice of fee changes. new text end 90.4 new text begin (c) Fee changes are effective 60 days after the first day of the first calendar month new text end 90.5 new text begin after the commissioner of public safety or the Public Utilities Commission, as applicable, new text end 90.6 new text begin changes the fee. new text end 90.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 90.8    Sec. 42. new text begin [403.162] ADMINISTRATION OF PREPAID WIRELESS E911 FEES. new text end 90.9     new text begin Subdivision 1. new text end new text begin Remittance. new text end new text begin Prepaid wireless E911 and telecommunications access new text end 90.10 new text begin Minnesota fees collected by sellers must be remitted to the commissioner of revenue new text end 90.11 new text begin at the times and in the manner provided by chapter 297A with respect to the general new text end 90.12 new text begin sales and use tax. The commissioner of revenue shall establish registration and payment new text end 90.13 new text begin procedures that substantially coincide with the registration and payment procedures that new text end 90.14 new text begin apply in chapter 297A. new text end 90.15     new text begin Subd. 2. new text end new text begin Seller's fee retention. new text end new text begin A seller may deduct and retain three percent of new text end 90.16 new text begin prepaid wireless E911 and telecommunications access Minnesota fees collected by the new text end 90.17 new text begin seller from consumers. new text end 90.18     new text begin Subd. 3. new text end new text begin Audit; appeal. new text end new text begin The audit and appeal procedures applicable under chapter new text end 90.19 new text begin 297A apply to any fee imposed under section 403.161. new text end 90.20     new text begin Subd. 4. new text end new text begin Procedures for resale transactions. new text end new text begin The commissioner of revenue shall new text end 90.21 new text begin establish procedures by which a seller of prepaid wireless telecommunications service new text end 90.22 new text begin may document that a sale is not a retail transaction. These procedures must substantially new text end 90.23 new text begin coincide with the procedures for documenting sale for resale transactions as provided in new text end 90.24 new text begin chapter 297A. new text end 90.25     new text begin Subd. 5. new text end new text begin Fees deposited. new text end new text begin (a) The commissioner of revenue shall, based on new text end 90.26 new text begin the relative proportion of the prepaid wireless E911 fee and the prepaid wireless new text end 90.27 new text begin telecommunications access Minnesota fee imposed per retail transaction, divide the fees new text end 90.28 new text begin collected in corresponding proportions. Within 30 days of receipt of the collected fees, new text end 90.29 new text begin the commissioner shall: new text end 90.30 new text begin (1) deposit the proportion of the collected fees attributable to the prepaid wireless new text end 90.31 new text begin E911 fee in the 911 emergency telecommunications service account in the special revenue new text end 90.32 new text begin fund; and new text end 90.33 new text begin (2) deposit the proportion of collected fees attributable to the prepaid wireless new text end 90.34 new text begin telecommunications access Minnesota fee in the telecommunications access fund new text end 90.35 new text begin established in section 237.52, subdivision 1. new text end 91.1 new text begin (b) The department may deduct and retain an amount, not to exceed two percent of new text end 91.2 new text begin collected fees, to reimburse its direct costs of administering the collection and remittance new text end 91.3 new text begin of prepaid wireless E911 fees and prepaid wireless telecommunications access Minnesota new text end 91.4 new text begin fees. new text end 91.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 91.6    Sec. 43. new text begin [403.163] LIABILITY PROTECTION FOR SELLERS AND new text end 91.7 new text begin PROVIDERS. new text end 91.8 new text begin (a) A provider or seller of prepaid wireless telecommunications service is not liable new text end 91.9 new text begin for damages to any person resulting from or incurred in connection with providing any new text end 91.10 new text begin lawful assistance in good faith to any investigative or law enforcement officer of the new text end 91.11 new text begin United States, this or any other state, or any political subdivision of this or any other state. new text end 91.12 new text begin (b) In addition to the protection from liability provided by paragraphs (a) and (b), new text end 91.13 new text begin section 403.08, subdivision 11, applies to sellers and providers. new text end 91.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 91.15    Sec. 44. new text begin [403.164] EXCLUSIVITY OF PREPAID WIRELESS E911 FEE. new text end 91.16 new text begin The prepaid wireless E911 fee imposed by section 403.161 is the only E911 funding new text end 91.17 new text begin obligation imposed with respect to prepaid wireless telecommunications service in this new text end 91.18 new text begin state, and no tax, fee, surcharge, or other charge may be imposed by this state, any political new text end 91.19 new text begin subdivision of this state, or any intergovernmental agency, for E911 funding purposes, new text end 91.20 new text begin upon any provider, seller, or consumer with respect to the sale, purchase, use, or provision new text end 91.21 new text begin of prepaid wireless telecommunications service. new text end 91.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 91.23    Sec. 45. new text begin FLOOR STOCKS TAX. new text end 91.24 new text begin (a) A floor stocks cigarette tax is imposed on every person engaged in the business new text end 91.25 new text begin in this state as a distributor, retailer, subjobber, vendor, manufacturer, or manufacturer's new text end 91.26 new text begin representative of cigarettes, on the stamped cigarettes and unaffixed stamps in the person's new text end 91.27 new text begin possession or under the person's control at 12:01 a.m. on July 1, 2013. The tax is imposed new text end 91.28 new text begin at the following rates: new text end 91.29 new text begin (1) on cigarettes weighing not more than three pounds per thousand, 47 mills on new text end 91.30 new text begin each cigarette; and new text end 91.31 new text begin (2) on cigarettes weighing more than three pounds per thousand, 94 mills on each new text end 91.32 new text begin cigarette. new text end 92.1 new text begin (b) Each distributor, on or before July 10, 2013, shall file a return with the new text end 92.2 new text begin commissioner of revenue, in the form the commissioner prescribes, showing the stamped new text end 92.3 new text begin cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount of new text end 92.4 new text begin tax due on the cigarettes and unaffixed stamps. new text end 92.5 new text begin (c) Each retailer, subjobber, vendor, manufacturer, or manufacturer's representative, new text end 92.6 new text begin on or before July 31, 2013, shall file a return with the commissioner of revenue, in the new text end 92.7 new text begin form the commissioner prescribes, showing the cigarettes on hand at 12:01 a.m. on July 1, new text end 92.8 new text begin 2013, and the amount of tax due on the cigarettes. new text end 92.9 new text begin (d) The tax imposed by this section is due and payable on or before September 4, new text end 92.10 new text begin 2013, and after that date bears interest at the rate of one percent per month. new text end 92.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 92.12    Sec. 46. new text begin TAXES AND FEES PAID BY INDIANS AND INDIAN TRIBES. new text end 92.13     new text begin Subdivision 1. new text end new text begin Health impact fees imposed from 2005 through 2009. new text end new text begin (a) The new text end 92.14 new text begin commissioner of revenue shall recompute all cigarette and tobacco products excise tax new text end 92.15 new text begin refunds and payments for periods after July 31, 2005, but before January 1, 2010, that new text end 92.16 new text begin were made to Indian tribes under agreements entered into under Minnesota Statutes, new text end 92.17 new text begin section 270C.19. new text end 92.18 new text begin (b) In making the recomputation for each year, the commissioner must (1) use a per new text end 92.19 new text begin capita amount, as that phrase is used in the agreements, equal to the sum of (i) the average new text end 92.20 new text begin statewide per capita cigarette and tobacco products excise tax paid during the applicable new text end 92.21 new text begin state fiscal year plus (ii) the statewide average per capita health impact fee paid on cigarette new text end 92.22 new text begin and tobacco products during the applicable state fiscal year, and (2) add the health impact new text end 92.23 new text begin fees collected on cigarettes and tobacco products delivered onto the reservation to the total new text end 92.24 new text begin cigarette and tobacco products excise tax collected on cigarettes and tobacco products new text end 92.25 new text begin delivered onto the reservation to determine the tax base to share under the agreements. new text end 92.26 new text begin (c) The additional payments to each tribe payable under this section are equal to the new text end 92.27 new text begin amount determined under the recomputation for the tribe minus the amount previously new text end 92.28 new text begin paid as a cigarette and tobacco products excise tax or health impact fee refund or payment new text end 92.29 new text begin to the tribe under any agreement entered into under Minnesota Statutes, section 270C.19. new text end 92.30 new text begin (d) The commissioner shall compute the additional payments required under this new text end 92.31 new text begin section based on information available to the commissioner. The tribe does not need to new text end 92.32 new text begin file a claim for payment. new text end 92.33 new text begin (e) The additional payments under this subdivision must only be paid to a tribe that new text end 92.34 new text begin has entered into an agreement under Minnesota Statutes, section 270C.19, subdivision 5, new text end 93.1 new text begin that covers health impact fees imposed on cigarettes and tobacco products delivered onto new text end 93.2 new text begin the reservation after December 31, 2009. new text end 93.3     new text begin Subd. 2. new text end new text begin Limited authority to enter into health impact fee agreements. new text end new text begin (a) new text end 93.4 new text begin Notwithstanding Minnesota Statutes, section 270C.19, or any other law, the commissioner new text end 93.5 new text begin must not enter into any agreement covering health impact fees imposed on cigarettes and new text end 93.6 new text begin tobacco products sold, purchased, or delivered onto a reservation before January 1, 2010. new text end 93.7 new text begin (b) Notwithstanding Minnesota Statutes, section 270C.19, or any other law, the new text end 93.8 new text begin commissioner is not authorized to enter into any agreement covering the health impact new text end 93.9 new text begin fee imposed on cigarettes and tobacco products sold, purchased, or delivered onto a new text end 93.10 new text begin reservation after December 31, 2009. new text end 93.11     new text begin Subd. 3. new text end new text begin Payments to tribes under existing agreements. new text end new text begin (a) The commissioner new text end 93.12 new text begin must not make refunds and payments of health impact fees required under any agreement new text end 93.13 new text begin entered into under Minnesota Statutes, section 270C.19, subdivision 5, for any period after new text end 93.14 new text begin the health impact fee has been repealed. new text end 93.15 new text begin (b) The commissioner must adjust all annual cigarette and tobacco products excise new text end 93.16 new text begin tax per capita amounts under existing tax agreements entered into under Minnesota new text end 93.17 new text begin Statutes, section 270C.19, subdivisions 1 and 2, to $95, effective for refunds due for the new text end 93.18 new text begin quarter ending September 30, 2013. This amount may be changed upon mutual agreement new text end 93.19 new text begin of the parties to the agreement to more accurately reflect taxes paid on the reservation new text end 93.20 new text begin by tribal members. new text end 93.21     new text begin Subd. 4. new text end new text begin Appropriation. new text end new text begin An amount necessary to make refunds and payments new text end 93.22 new text begin under this section is appropriated to the commissioner from the general fund. new text end 93.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment, new text end 93.24 new text begin except that subdivision 2, paragraph (b), is effective January 2, 2014. new text end 93.25    Sec. 47. new text begin REPORT. new text end 93.26 new text begin On or before June 30, 2016, and every four years thereafter, the commissioner of new text end 93.27 new text begin transportation, in consultation with the commissioner of revenue, shall prepare and submit new text end 93.28 new text begin to the chairs and ranking minority members of the senate and house of representatives new text end 93.29 new text begin committees with jurisdiction over transportation policy and budget, a report that identifies new text end 93.30 new text begin the amount and sources of annual revenues attributable to each type of aviation tax, along new text end 93.31 new text begin with annual expenditures from the state airports fund, and any other transfers out of the new text end 93.32 new text begin fund, during the previous four years. The report must include draft legislation for any new text end 93.33 new text begin recommended statutory changes to ensure the future adequacy of the state airports fund. new text end 94.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2014, and applies to aircraft new text end 94.2 new text begin tax due on or after that date. new text end 94.3    Sec. 48. new text begin ARMER GRANTS. new text end 94.4 new text begin $1,500,000 in fiscal year 2014 and $1,500,000 in fiscal year 2015 is appropriated new text end 94.5 new text begin from the 911 account of the state government special revenue fund to the commissioner of new text end 94.6 new text begin public safety for grants to counties to reimburse for the sales tax costs associated with new text end 94.7 new text begin upgrading public safety radio systems prior to January 1, 2013. The commissioner of new text end 94.8 new text begin public safety shall give preference to counties that did not receive state or federal grants to new text end 94.9 new text begin upgrade their public safety radio systems. This is a onetime appropriation. new text end 94.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective January 1, 2014. new text end 94.11    Sec. 49. new text begin TOBACCO TAX COLLECTION REPORT. new text end 94.12     new text begin Subdivision 1. new text end new text begin Report to legislature. new text end new text begin (a) The commissioner of revenue shall report new text end 94.13 new text begin to the 2014 legislature on the tobacco tax collection system, including recommendations new text end 94.14 new text begin to improve compliance under the excise tax for both cigarettes and other tobacco products. new text end 94.15 new text begin The purpose of the report is to provide information and guidance to the legislature on new text end 94.16 new text begin improvements to the tobacco tax collection system to: new text end 94.17 new text begin (1) provide a unified system of collecting both the cigarette and other tobacco new text end 94.18 new text begin taxes, regardless of category, size, or shape, that ensures the highest reasonable rates of new text end 94.19 new text begin tax collection; new text end 94.20 new text begin (2) discourage tax evasion; and new text end 94.21 new text begin (3) help to prevent illegal sale of tobacco products, which may make these products new text end 94.22 new text begin more accessible to youth. new text end 94.23 new text begin (b) In the report, the commissioner shall: new text end 94.24 new text begin (1) provide a detailed review of the present excise tax collection and compliance new text end 94.25 new text begin system as it applies to both cigarettes and other tobacco products. This must include new text end 94.26 new text begin an assessment of the levels of compliance for each category of products and the effect new text end 94.27 new text begin of the stamping requirement on compliance for each category of products and the effect new text end 94.28 new text begin of the stamping requirement on compliance rates for cigarettes relative to other tobacco new text end 94.29 new text begin products. It also must identify any weaknesses in the system; new text end 94.30 new text begin (2) survey the methods of collection and enforcement used by other states or nations, new text end 94.31 new text begin including identifying and discussing emerging best practices that ensure tracking of both new text end 94.32 new text begin cigarettes and other tobacco products and result in the highest rates of tax collection and new text end 94.33 new text begin compliance. These best practices must consider high-technology alternatives, such as use new text end 95.1 new text begin of bar codes, radio-frequency identification tags, or similar mechanisms for tracking new text end 95.2 new text begin compliance; new text end 95.3 new text begin (3) evaluate the adequacy and effectiveness of the existing penalties and other new text end 95.4 new text begin sanctions for noncompliance; new text end 95.5 new text begin (4) evaluate the adequacy of the resources allocated by the state to enforce the new text end 95.6 new text begin tobacco tax and prevention laws; and new text end 95.7 new text begin (5) make recommendations on implementation of a comprehensive tobacco tax new text end 95.8 new text begin collection system for Minnesota that can be implemented by January 1, 2014, including: new text end 95.9 new text begin (i) recommendations on the specific steps needed to institute and implement the new new text end 95.10 new text begin system, including estimates of the state's costs of doing so and any additional personnel new text end 95.11 new text begin requirements; new text end 95.12 new text begin (ii) recommendations on methods to recover the cost of implementing the system new text end 95.13 new text begin from the industry; new text end 95.14 new text begin (iii) evaluation of the extent to which the proposed system is sufficiently flexible new text end 95.15 new text begin and adaptable to adjust to modifications in the construction, packaging, formatting, and new text end 95.16 new text begin marketing of tobacco products by the industry; and new text end 95.17 new text begin (iv) recommendations to modify existing penalties or to impose new penalties or new text end 95.18 new text begin other sanctions to ensure compliance with the system. new text end 95.19     new text begin Subd. 2. new text end new text begin Due date. new text end new text begin The report required by subdivision 1 is due January 1, 2014. new text end 95.20     new text begin Subd. 3. new text end new text begin Procedure. new text end new text begin The report required under this section must be made in the new text end 95.21 new text begin manner provided under Minnesota Statutes, section 3.195. In addition, copies must be new text end 95.22 new text begin provided to the chairs and ranking minority members of the legislative committees and new text end 95.23 new text begin divisions with jurisdiction over taxation. new text end 95.24     new text begin Subd. 4. new text end new text begin Appropriation. new text end new text begin (a) $100,000 is appropriated from the general fund to the new text end 95.25 new text begin commissioner of revenue for fiscal year 2014 for the cost of preparing the report under new text end 95.26 new text begin subdivision 1. new text end 95.27 new text begin (b) The appropriation under this subdivision is a onetime appropriation and is not new text end 95.28 new text begin included in the base budget. new text end 95.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 95.30    Sec. 50. new text begin REPEALER. new text end 95.31 new text begin Minnesota Statutes 2012, sections 16A.725; 256.9658; 290.171; 290.173; and new text end 95.32 new text begin 290.174, new text end new text begin are repealed. new text end 95.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 96.1ARTICLE 5 96.2INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES 96.3    Section 1. new text begin [116J.3738] QUALIFIED EXPANSIONS OF GREATER MINNESOTA new text end 96.4 new text begin BUSINESSES. new text end 96.5     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms new text end 96.6 new text begin have the meanings given unless the context clearly indicates otherwise. new text end 96.7 new text begin (b) "Agricultural processing facility" means one or more facilities or operations new text end 96.8 new text begin that transform, package, sort, or grade livestock or livestock products, agricultural new text end 96.9 new text begin commodities, or plants or plant products into goods that are used for intermediate or final new text end 96.10 new text begin consumption including goods for nonfood use, and surrounding property. new text end 96.11 new text begin (c) "Business" means an individual, corporation, partnership, limited liability new text end 96.12 new text begin company, association, or any other entity engaged in operating a trade or business located new text end 96.13 new text begin in greater Minnesota. new text end 96.14 new text begin (d) "City" means a statutory or home rule charter city. new text end 96.15 new text begin (e) "Greater Minnesota" means the area of the state that excludes the metropolitan new text end 96.16 new text begin area, as defined in section 473.121, subdivision 2. new text end 96.17 new text begin (f) "Qualified business" means a business that satisfies the requirements of subdivision new text end 96.18 new text begin 2, has been certified under subdivision 3, and has not been terminated under subdivision 5. new text end 96.19     new text begin Subd. 2. new text end new text begin Qualified business. new text end new text begin (a) A business is a qualified business if it satisfies the new text end 96.20 new text begin requirement of this paragraph and is not disqualified under the provisions of paragraph new text end 96.21 new text begin (b). To qualify, the business must: new text end 96.22 new text begin (1) have operated its trade or business in a city or cities in greater Minnesota for at new text end 96.23 new text begin least one year before applying under subdivision 3; new text end 96.24 new text begin (2) pay or agree to pay in the future each employee compensation, including benefits new text end 96.25 new text begin not mandated by law, that on an annualized basis equal at least 120 percent of the federal new text end 96.26 new text begin poverty level for a family of four; new text end 96.27 new text begin (3) plan and agree to expand its employment in one or more cities in greater Minnesota new text end 96.28 new text begin by the minimum number of employees required under subdivision 3, paragraph (c); and new text end 96.29 new text begin (4) received certification from the commissioner under subdivision 3 that it is a new text end 96.30 new text begin qualified business. new text end 96.31 new text begin (b) A business is not a qualified business if it is either: new text end 96.32 new text begin (1) primarily engaged in making retail sales to purchasers who are physically present new text end 96.33 new text begin at the business's location or locations in greater Minnesota; or new text end 96.34 new text begin (2) a public utility, as defined in section 336B.01. new text end 97.1 new text begin (c) The requirements in paragraph (a) that the business' operations and expansion be new text end 97.2 new text begin located in a city do not apply to an agricultural processing facility. new text end 97.3     new text begin Subd. 3. new text end new text begin Certification of qualified business. new text end new text begin (a) A business may apply to new text end 97.4 new text begin the commissioner for certification as a qualified business under this section. The new text end 97.5 new text begin commissioner shall specify the form of the application, the manner and times for applying, new text end 97.6 new text begin and the information required to be included in the application. The commissioner may new text end 97.7 new text begin impose an application fee in an amount sufficient to defray the commissioner's cost of new text end 97.8 new text begin processing certifications. A business must file a copy of its application with the chief new text end 97.9 new text begin clerical officer of the city at the same it applies to the commissioner. For an agricultural new text end 97.10 new text begin processing facility located outside the boundaries of a city, the business must file a copy new text end 97.11 new text begin of the application with the county auditor. new text end 97.12 new text begin (b) The commissioner shall certify each business as a qualified business that: new text end 97.13 new text begin (1) satisfies the requirements of subdivision 2; new text end 97.14 new text begin (2) the commissioner determines would not expand its operations in greater new text end 97.15 new text begin Minnesota without the tax incentives available under subdivision 4; and new text end 97.16 new text begin (3) enters a business subsidy agreement with the commissioner that pledges to new text end 97.17 new text begin satisfy the minimum expansion requirements of paragraph (c) within three years or less new text end 97.18 new text begin following execution of the agreement. new text end 97.19 new text begin The commissioner must act on an application within 60 days after its filing. Failure new text end 97.20 new text begin by the commissioner to take action within the 60-day period is deemed approval of the new text end 97.21 new text begin application. new text end 97.22 new text begin (c) The following minimum expansion requirements apply, based on the number of new text end 97.23 new text begin employees of the business at locations in greater Minnesota: new text end 97.24 new text begin (1) a business that employees 50 or fewer full-time equivalent employees in greater new text end 97.25 new text begin Minnesota when the agreement is executed must increase its employment by five or more new text end 97.26 new text begin full-time equivalent employees; new text end 97.27 new text begin (2) a business that employees more than 50 but fewer than 200 full-time equivalent new text end 97.28 new text begin employees in greater Minnesota when the agreement is executed must increase the number new text end 97.29 new text begin of its full-time equivalent employees in greater Minnesota by at least ten percent; or new text end 97.30 new text begin (3) a business that employees 200 or more full-time equivalent employees in greater new text end 97.31 new text begin Minnesota when the agreement is executed must increase its employment by at least 21 new text end 97.32 new text begin full-time equivalent employees. new text end 97.33 new text begin (d) The city, or a county for an agricultural processing facility located outside the new text end 97.34 new text begin boundaries of a city, in which the business proposes to expand its operations may file new text end 97.35 new text begin comments supporting or opposing the application with the commissioner. The comments new text end 97.36 new text begin must be filed within 30 days after receipt by the city of the application and may include a new text end 98.1 new text begin notice of any contribution the city or county intends to make to encourage or support the new text end 98.2 new text begin business expansion, such as the use of tax increment financing, property tax abatement, new text end 98.3 new text begin additional city or county services, or other financial assistance. new text end 98.4 new text begin (e) Certification of a qualified business is effective for the 12-year period beginning new text end 98.5 new text begin on the first day of the calendar month immediately following execution of the business new text end 98.6 new text begin subsidy agreement. new text end 98.7     new text begin Subd. 4. new text end new text begin Available tax incentives. new text end new text begin A qualified business is entitled to one or more new text end 98.8 new text begin of the following tax incentives as provided under its business subsidy agreement with new text end 98.9 new text begin the commissioner: new text end 98.10 new text begin (1) a sales tax exemption, as provided in section 297A.68, subdivision 44, for new text end 98.11 new text begin purchases made during the period the business was certified as a qualified business under new text end 98.12 new text begin this section; and new text end 98.13 new text begin (2) the jobs credit, as provided in section 290.0682, effective for taxable years new text end 98.14 new text begin beginning during a calendar year in which certification of the business as a qualified new text end 98.15 new text begin business applies under this section. new text end 98.16     new text begin Subd. 5. new text end new text begin Termination of status as a qualified business. new text end new text begin (a) The commissioner shall new text end 98.17 new text begin put in place a system for monitoring and ensuring that each certified business meets within new text end 98.18 new text begin three years or less the minimum expansion requirement in its business subsidy agreement new text end 98.19 new text begin and continues to satisfy those requirements for the rest of the duration of the certification new text end 98.20 new text begin under subdivision 3. This system must include regular reporting by the business to the new text end 98.21 new text begin commissioner of its baseline and current employment levels and any other information new text end 98.22 new text begin the commissioner determines may be useful to ensure compliance and for legislative new text end 98.23 new text begin evaluation of the effectiveness of the tax incentives. new text end 98.24 new text begin (b) A business ceases to be a qualified business and to qualify for the sales tax new text end 98.25 new text begin exemption under section 297A.68, subdivision 49, under this subdivision upon the earlier new text end 98.26 new text begin of the following dates: new text end 98.27 new text begin (1) the end of the duration of its designation under subdivision 3, paragraph (e), new text end 98.28 new text begin effective as provided under this subdivision or other provision of law for the tax incentive; new text end 98.29 new text begin or new text end 98.30 new text begin (2) the date the commissioner finds that the business has breached its business new text end 98.31 new text begin subsidy agreement and failed to satisfy the minimum expansion required by subdivision 3 new text end 98.32 new text begin and its agreement. new text end 98.33 new text begin (c) A business may contest the commissioner's finding that it breached its business new text end 98.34 new text begin subsidy agreement under paragraph (b), clause (2), under the contested case procedures in new text end 98.35 new text begin the Administrative Procedure Act, chapter 14. new text end 99.1 new text begin (d) The commissioner, after consulting with the commissioner of revenue, may new text end 99.2 new text begin waive a breach of the business subsidy agreement and permit continued receipt of tax new text end 99.3 new text begin incentives, if the commissioner determines that termination of the tax incentives is not in new text end 99.4 new text begin the best interest of the state or the local government units and the business' breach of the new text end 99.5 new text begin agreement is a result of circumstances beyond its control including, but not limited to: new text end 99.6 new text begin (1) a natural disaster; new text end 99.7 new text begin (2) unforeseen industry trends; new text end 99.8 new text begin (3) a decline in economic activity in the overall or greater Minnesota economy; or new text end 99.9 new text begin (4) loss of a major supplier or customer of the business. new text end 99.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 99.11    Sec. 2. Minnesota Statutes 2012, section 116J.8737, subdivision 1, is amended to read: 99.12    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms 99.13have the meanings given. 99.14(b) "Qualified small business" means a business that has been certified by the 99.15commissioner under subdivision 2. 99.16(c) "Qualified investor" means an investor who has been certified by the 99.17commissioner under subdivision 3. 99.18(d) "Qualified fund" means a pooled angel investment network fund that has been 99.19certified by the commissioner under subdivision 4. 99.20(e) "Qualified investment" means a cash investment in a qualified small business 99.21of a minimum of: 99.22(1) $10,000 in a calendar year by a qualified investor; or 99.23(2) $30,000 in a calendar year by a qualified fund. 99.24A qualified investment must be made in exchange for common stock, a partnership 99.25or membership interest, preferred stock, debt with mandatory conversion to equity, or an 99.26equivalent ownership interest as determined by the commissioner. 99.27(f) "Family" means a family member within the meaning of the Internal Revenue 99.28Code, section 267(c)(4). 99.29(g) "Pass-through entity" means a corporation that for the applicable taxable year is 99.30treated as an S corporation or a general partnership, limited partnership, limited liability 99.31partnership, trust, or limited liability company and which for the applicable taxable year is 99.32not taxed as a corporation under chapter 290. 99.33(h) "Intern" means a student of an accredited institution of higher education, or a 99.34former student who has graduated in the past six months from an accredited institution 99.35of higher education, who is employed by a qualified small business in a nonpermanent 100.1position for a duration of nine months or less that provides training and experience in the 100.2primary business activity of the business. 100.3 new text begin (i) "Qualified greater Minnesota business" means a qualified small business that new text end 100.4 new text begin is also certified by the commissioner as a qualified greater Minnesota business under new text end 100.5 new text begin subdivision 2, paragraph (h). new text end 100.6 new text begin (j) "Liquidation event" means a conversion of qualified investment for cash, cash new text end 100.7 new text begin and other consideration, or any other form of equity or debt interest. new text end 100.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 100.9    Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 2, is amended to read: 100.10    Subd. 2. Certification of qualified small businesses. (a) Businesses may apply 100.11to the commissioner for certification as a qualified small business for a calendar year. 100.12 new text begin In addition, the business' application may request certification as a qualified greater new text end 100.13 new text begin Minnesota business under paragraph (h). new text end The application must be in the form and 100.14be made under the procedures specified by the commissioner, accompanied by an 100.15application fee of $150. Application fees are deposited in the small business investment 100.16tax credit administration account in the special revenue fund. The application for 100.17certification for 2010 must be made available on the department's Web site by August 1, 100.182010. Applications for subsequent years' certification must be made available on the 100.19department's Web site by November 1 of the preceding year. 100.20(b) Within 30 days of receiving an application for certification under this 100.21subdivision, the commissioner must either certify the business as satisfying the conditions 100.22required of a qualified small business new text begin or a qualified greater Minnesota business new text end , request 100.23additional information from the business, or reject the application for certification. If 100.24the commissioner requests additional information from the business, the commissioner 100.25must either certify the business or reject the application within 30 days of receiving the 100.26additional information. If the commissioner neither certifies the business nor rejects 100.27the application within 30 days of receiving the original application or within 30 days of 100.28receiving the additional information requested, whichever is later, then the application is 100.29deemed rejected, and the commissioner must refund the $150 application fee. A business 100.30that applies for certification and is rejected may reapply. 100.31(c) To receive certification new text begin as a qualified small business new text end , a business must satisfy 100.32all of the following conditions: 100.33(1) the business has its headquarters in Minnesota; 100.34(2) at least 51 percent of the business's employees are employed in Minnesota, and 100.3551 percent of the business's total payroll is paid or incurred in the state; 101.1(3) the business is engaged in, or is committed to engage in, innovation in Minnesota 101.2in one of the following as its primary business activity: 101.3(i) using proprietary technology to add value to a product, process, or service in a 101.4qualified high-technology field; 101.5(ii) researching or developing a proprietary product, process, or service in a qualified 101.6high-technology field; or 101.7(iii) researching, developing, or producing a new proprietary technology for use in 101.8the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation; 101.9(4) other than the activities specifically listed in clause (3), the business is not 101.10engaged in real estate development, insurance, banking, lending, lobbying, political 101.11consulting, information technology consulting, wholesale or retail trade, leisure, 101.12hospitality, transportation, construction, ethanol production from corn, or professional 101.13services provided by attorneys, accountants, business consultants, physicians, or health 101.14care consultants; 101.15(5) the business has fewer than 25 employees; 101.16(6) the business must pay its employees annual wages of at least 175 percent of the 101.17federal poverty guideline for the year for a family of four and must pay its interns annual 101.18wages of at least 175 percent of the federal minimum wage used for federally covered 101.19employers, except that this requirement must be reduced proportionately for employees 101.20and interns who work less than full-time, and does not apply to an executive, officer, or 101.21member of the board of the business, or to any employee who owns, controls, or holds 101.22power to vote more than 20 percent of the outstanding securities of the business; 101.23(7) the business has not been in operation for more than ten years; 101.24(8) the business has not previously received private equity investments of more 101.25than $4,000,000; and 101.26    (9) the business is not an entity disqualified under section 80A.50, paragraph (b), 101.27clause (3) new text begin ; and new text end 101.28     new text begin (10) the business has not issued securities that are traded on a public exchange new text end . 101.29(d) In applying the limit under paragraph (c), clause (5), the employees in all members 101.30of the unitary business, as defined in section 290.17, subdivision 4, must be included. 101.31(e) In order for a qualified investment in a business to be eligible for tax credits, new text begin the new text end 101.32 new text begin business: new text end 101.33 new text begin (1) new text end the business must have applied for and received certification for the calendar 101.34year in which the investment was made prior to the date on which the qualified investment 101.35was made new text begin ; new text end 101.36 new text begin (2) must not have issued securities that are traded on a public exchange; new text end 102.1 new text begin (3) must not issue securities that are traded on a public exchange within 180 days new text end 102.2 new text begin after the date on which the qualified investment was made; and new text end 102.3 new text begin (4) must not have a liquidation event within 180 days after the date on which a new text end 102.4 new text begin qualified investment was made new text end . 102.5(f) The commissioner must maintain a list of new text begin qualified small new text end businesses new text begin and qualified new text end 102.6 new text begin greater Minnesota businesses new text end certified under this subdivision for the calendar year and 102.7make the list accessible to the public on the department's Web site. 102.8(g) For purposes of this subdivision, the following terms have the meanings given: 102.9(1) "qualified high-technology field" includes aerospace, agricultural processing, 102.10renewable energy, energy efficiency and conservation, environmental engineering, food 102.11technology, cellulosic ethanol, information technology, materials science technology, 102.12nanotechnology, telecommunications, biotechnology, medical device products, 102.13pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar 102.14fields; and 102.15(2) "proprietary technology" means the technical innovations that are unique and 102.16legally owned or licensed by a business and includes, without limitation, those innovations 102.17that are patented, patent pending, a subject of trade secrets, or copyrighted. new text begin ; and new text end 102.18 new text begin (3) "greater Minnesota" means the area of Minnesota located outside of the new text end 102.19 new text begin metropolitan area as defined in section 473.121, subdivision 2. new text end 102.20 new text begin (h) To receive certification as a qualified greater Minnesota business, a business must new text end 102.21 new text begin satisfy all of the requirements of paragraph (c) and must satisfy the following conditions: new text end 102.22 new text begin (1) the business has its headquarters in greater Minnesota; and new text end 102.23 new text begin (2) at least 51 percent of the business's employees are employed in greater Minnesota, new text end 102.24 new text begin and 51 percent of the business's total payroll is paid or incurred in greater Minnesota. new text end 102.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 102.26    Sec. 4. Minnesota Statutes 2012, section 116J.8737, subdivision 5, is amended to read: 102.27    Subd. 5. Credit allowed. (a) A qualified investor or qualified fund is eligible for a 102.28credit equal to 25 percent of the qualified investment in a qualified small business. 102.29 Investments made by a pass-through entity qualify for a credit only if the entity is a 102.30qualified fund. The commissioner must not allocate more than $11,000,000 in credits to 102.31qualified investors or qualified funds for taxable years beginning after December 31, 2009, 102.32and before January 1, 2011, and must not allocate more than $12,000,000 in credits per 102.33year for taxable years beginning after December 31, 2010, and before January 1, 2015 102.34 new text begin 2013, or more than $17,000,000 in credits per year for taxable years beginning after new text end 103.1 new text begin December 31, 2012, and before January 1, 2015 new text end . Any portion of a taxable year's credits 103.2that is not allocated by the commissioner does not cancel and may be carried forward to 103.3subsequent taxable years until all credits have been allocated. 103.4(b) The commissioner may not allocate more than a total maximum amount in credits 103.5for a taxable year to a qualified investor for the investor's cumulative qualified investments 103.6as an individual qualified investor and as an investor in a qualified fund; for married 103.7couples filing joint returns the maximum is $250,000, and for all other filers the maximum 103.8is $125,000. The commissioner may not allocate more than a total of $1,000,000 in credits 103.9over all taxable years for qualified investments in any one qualified small business. 103.10(c) The commissioner may not allocate a credit to a qualified investor either as an 103.11individual qualified investor or as an investor in a qualified fund if the investor receives 103.12more than 50 percent of the investor's gross annual income from the qualified small 103.13business in which the qualified investment is proposed. A member of the family of an 103.14individual disqualified by this paragraph is not eligible for a credit under this section. For 103.15a married couple filing a joint return, the limitations in this paragraph apply collectively 103.16to the investor and spouse. For purposes of determining the ownership interest of an 103.17investor under this paragraph, the rules under section 267(c) and 267(e) of the Internal 103.18Revenue Code apply. 103.19(d) Applications for tax credits for 2010 must be made available on the department's 103.20Web site by September 1, 2010, and the department must begin accepting applications 103.21by September 1, 2010. Applications for subsequent years must be made available by 103.22November 1 of the preceding year. 103.23(e) Qualified investors and qualified funds must apply to the commissioner for tax 103.24credits. Tax credits must be allocated to qualified investors or qualified funds in the order 103.25that the tax credit request applications are filed with the department. The commissioner 103.26must approve or reject tax credit request applications within 15 days of receiving the 103.27application. The investment specified in the application must be made within 60 days of 103.28the allocation of the credits. If the investment is not made within 60 days, the credit 103.29allocation is canceled and available for reallocation. A qualified investor or qualified fund 103.30that fails to invest as specified in the application, within 60 days of allocation of the 103.31credits, must notify the commissioner of the failure to invest within five business days of 103.32the expiration of the 60-day investment period. 103.33(f) All tax credit request applications filed with the department on the same day must 103.34be treated as having been filed contemporaneously. If two or more qualified investors or 103.35qualified funds file tax credit request applications on the same day, and the aggregate 103.36amount of credit allocation claims exceeds the aggregate limit of credits under this section 104.1or the lesser amount of credits that remain unallocated on that day, then the credits must 104.2be allocated among the qualified investors or qualified funds who filed on that day on a 104.3pro rata basis with respect to the amounts claimed. The pro rata allocation for any one 104.4qualified investor or qualified fund is the product obtained by multiplying a fraction, 104.5the numerator of which is the amount of the credit allocation claim filed on behalf of 104.6a qualified investor and the denominator of which is the total of all credit allocation 104.7claims filed on behalf of all applicants on that day, by the amount of credits that remain 104.8unallocated on that day for the taxable year. 104.9(g) A qualified investor or qualified fund, or a qualified small business acting on their 104.10behalf, must notify the commissioner when an investment for which credits were allocated 104.11has been made, and the taxable year in which the investment was made. A qualified fund 104.12must also provide the commissioner with a statement indicating the amount invested by 104.13each investor in the qualified fund based on each investor's share of the assets of the 104.14qualified fund at the time of the qualified investment. After receiving notification that the 104.15investment was made, the commissioner must issue credit certificates for the taxable year 104.16in which the investment was made to the qualified investor or, for an investment made by 104.17a qualified fund, to each qualified investor who is an investor in the fund. The certificate 104.18must state that the credit is subject to revocation if the qualified investor or qualified 104.19fund does not hold the investment in the qualified small business for at least three years, 104.20consisting of the calendar year in which the investment was made and the two following 104.21years. The three-year holding period does not apply if: 104.22(1) the investment by the qualified investor or qualified fund becomes worthless 104.23before the end of the three-year period; 104.24(2) 80 percent or more of the assets of the qualified small business is sold before 104.25the end of the three-year period; 104.26(3) the qualified small business is sold before the end of the three-year period; or 104.27(4) the qualified small business's common stock begins trading on a public exchange 104.28before the end of the three-year period. 104.29(h) The commissioner must notify the commissioner of revenue of credit certificates 104.30issued under this section. 104.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment for new text end 104.32 new text begin taxable years beginning after December 31, 2012. new text end 104.33    Sec. 5. Minnesota Statutes 2012, section 116J.8737, is amended by adding a 104.34subdivision to read: 105.1     new text begin Subd. 5a. new text end new text begin Promotion of credit in greater Minnesota. new text end new text begin (a) By July 1, 2013, the new text end 105.2 new text begin commissioner shall develop a plan to increase awareness of and use of the credit for new text end 105.3 new text begin investments in greater Minnesota businesses with a target goal that a minimum of 30 new text end 105.4 new text begin percent of the credit will be awarded for those investments during the second half new text end 105.5 new text begin of calendar year 2013 and for each full calendar year thereafter. Beginning with the new text end 105.6 new text begin legislative report due on March 15, 2014, under subdivision 9, the commissioner shall new text end 105.7 new text begin report on its plan under this subdivision and the results achieved. new text end 105.8 new text begin (b) If the target goal of 30 percent under paragraph (a) is not achieved for the new text end 105.9 new text begin six-month period ending on December 31, 2013, the credit percentage under subdivision new text end 105.10 new text begin 5, paragraph (a), is increased to 40 percent for a qualified investment made after December new text end 105.11 new text begin 31, 2013, in a greater Minnesota business. This paragraph does not apply and the credit new text end 105.12 new text begin percentage for all qualified investments is the rate provided under subdivision 5 for any new text end 105.13 new text begin calendar year beginning after a calendar year for which the commissioner determines the new text end 105.14 new text begin 30 percent target has been satisfied. The commissioner shall timely post notification of new text end 105.15 new text begin changes in the credit rate under this paragraph on the department's Web site. new text end 105.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 105.17    Sec. 6. Minnesota Statutes 2012, section 116J.8737, subdivision 7, is amended to read: 105.18    Subd. 7. Revocation of credits. (a) If the commissioner determines that a 105.19qualified investor or qualified fund did not meet the three-year holding period required in 105.20subdivision 5, paragraph (g), any credit allocated and certified to the investor or fund is 105.21revoked and must be repaid by the investor. 105.22(b) If the commissioner determines that a business did not meet the employment 105.23and payroll requirements in subdivision 2, paragraph (c), clause (2) new text begin , or paragraph (h), as new text end 105.24 new text begin applicable new text end , in any of the five calendar years following the year in which an investment in the 105.25business that qualified for a tax credit under this section was made, the business must repay 105.26the following percentage of the credits allowed for qualified investments in the business: 105.27 Year following the year in which Percentage of credit required 105.28 the investment was made: to be repaid: 105.29 First 100% 105.30 Second 80% 105.31 Third 60% 105.32 Fourth 40% 105.33 Fifth 20% 105.34 Sixth and later 0 105.35(c) The commissioner must notify the commissioner of revenue of every credit 105.36revoked and subject to full or partial repayment under this section. 106.1(d) For the repayment of credits allowed under this section and section 290.0692, 106.2a qualified small business, qualified investor, or investor in a qualified fund must file an 106.3amended return with the commissioner of revenue and pay any amounts required to be 106.4repaid within 30 days after becoming subject to repayment under this section. 106.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 106.6    Sec. 7. Minnesota Statutes 2012, section 116J.8737, subdivision 9, is amended to read: 106.7    Subd. 9. Report to legislature. Beginning in 2011, the commissioner must 106.8annually report by March 15 to the chairs and ranking minority members of the legislative 106.9committees having jurisdiction over taxes and economic development in the senate and 106.10the house of representatives, in compliance with sections 3.195 and 3.197, on the tax 106.11credits issued under this section. The report must include: 106.12(1) the number and amount of the credits issued; 106.13(2) the recipients of the credits; 106.14(3) for each qualified small business, its location, line of business, and if it received 106.15an investment resulting in certification of tax credits; 106.16(4) the total amount of investment in each qualified small business resulting in 106.17certification of tax credits; 106.18(5) for each qualified small business that received investments resulting in tax 106.19credits, the total amount of additional investment that did not qualify for the tax credit; 106.20(6) the number and amount of credits revoked under subdivision 7; 106.21(7) the number and amount of credits that are no longer subject to the three-year 106.22holding period because of the exceptions under subdivision 5, paragraph (g), clauses 106.23(1) to (4); and 106.24(8) new text begin the number of qualified small businesses that are women or minority-owned; and new text end 106.25 new text begin (9) new text end any other information relevant to evaluating the effect of these credits. 106.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 106.27    Sec. 8. Minnesota Statutes 2012, section 116J.8737, subdivision 12, is amended to read: 106.28    Subd. 12. Sunset. This section expires for taxable years beginning after December 106.2931, 2014 new text begin 2015 new text end , except that reporting requirements under subdivision 6 and revocation 106.30of credits under subdivision 7 remain in effect through 2016 new text begin 2017 new text end for qualified 106.31investors and qualified funds, and through 2018 new text begin 2019 new text end for qualified small businesses, 106.32reporting requirements under subdivision 9 remain in effect through 2019 new text begin 2020 new text end , and the 106.33appropriation in subdivision 11 remains in effect through 2018 new text begin 2019 new text end . 107.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 107.2    Sec. 9. new text begin [136A.129] GREATER MINNESOTA INTERNSHIP PROGRAM. new text end 107.3     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For the purposes of this section, the terms defined in new text end 107.4 new text begin this subdivision have the meanings given to them. new text end 107.5 new text begin (b) "Eligible employer" means a taxpayer under section 290.01 with employees new text end 107.6 new text begin located in greater Minnesota. new text end 107.7 new text begin (c) "Eligible institution" means a Minnesota public postsecondary institution or a new text end 107.8 new text begin Minnesota private, nonprofit, baccalaureate degree-granting college or university. new text end 107.9 new text begin (d) "Eligible student" means a student enrolled in an eligible institution who has new text end 107.10 new text begin completed one-half of the credits necessary for the respective degree or certification. new text end 107.11 new text begin (e) "Greater Minnesota" means the area of the state outside of the counties of Anoka, new text end 107.12 new text begin Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and new text end 107.13 new text begin Wright. new text end 107.14     new text begin Subd. 2. new text end new text begin Program established. new text end new text begin The Office of Higher Education shall administer new text end 107.15 new text begin a greater Minnesota internship program through eligible institutions to provide credit at new text end 107.16 new text begin the eligible institution for internships and tax credits for eligible employers who hire new text end 107.17 new text begin interns for employment in greater Minnesota. The purpose of the program is to encourage new text end 107.18 new text begin Minnesota businesses to: new text end 107.19 new text begin (1) employ and provide valuable experience to Minnesota students; and new text end 107.20 new text begin (2) foster long-term relationships between the students and greater Minnesota new text end 107.21 new text begin employers. new text end 107.22     new text begin Subd. 3. new text end new text begin Program components. new text end new text begin (a) An intern must be an eligible student who has new text end 107.23 new text begin been admitted to a major program that is related to the intern experience as determined new text end 107.24 new text begin by the eligible institution. new text end 107.25 new text begin (b) To participate in the program, an eligible institution must: new text end 107.26 new text begin (1) enter into written agreements with eligible employers to provide internships that new text end 107.27 new text begin are at least 12 weeks long and located in greater Minnesota; new text end 107.28 new text begin (2) determine that the work experience of the internship is related to the eligible new text end 107.29 new text begin student's course of study; and new text end 107.30 new text begin (3) provide academic credit for the successful completion of the internship or ensure new text end 107.31 new text begin that it fulfills requirements necessary to complete a vocational technical education program. new text end 107.32 new text begin (c) To participate in the program, an eligible employer must enter into a written new text end 107.33 new text begin agreement with an eligible institution specifying that the intern: new text end 107.34 new text begin (1) would not have been hired without the tax credit described in subdivision 4; new text end 108.1 new text begin (2) did not work for the employer in the same or a similar job prior to entering new text end 108.2 new text begin the agreement; new text end 108.3 new text begin (3) does not replace an existing employee; new text end 108.4 new text begin (4) has not previously participated in the program; new text end 108.5 new text begin (5) will be employed at a location in greater Minnesota; new text end 108.6 new text begin (6) will be paid at least minimum wage for a minimum of 16 hours per week for a new text end 108.7 new text begin period of at least 12 weeks; and new text end 108.8 new text begin (7) will be supervised and evaluated by the employer. new text end 108.9 new text begin (d) Participating eligible institutions and eligible employers must report annually to new text end 108.10 new text begin the office. The report must include at least the following: new text end 108.11 new text begin (1) the number of interns hired; new text end 108.12 new text begin (2) the number of hours and weeks worked by interns; and new text end 108.13 new text begin (3) the compensation paid to interns. new text end 108.14 new text begin (e) An internship required to complete an academic program does not qualify for the new text end 108.15 new text begin greater Minnesota internship program under this section. new text end 108.16     new text begin Subd. 4. new text end new text begin Tax credit allowed. new text end new text begin An employer is entitled to a tax credit as provided new text end 108.17 new text begin in section 290.06, subdivision 3b. The office shall allocate tax credits authorized in new text end 108.18 new text begin subdivision 4 to eligible institutions on a first come, first served basis. The office shall new text end 108.19 new text begin determine relevant criteria to allocate the tax credits including the geographic distribution new text end 108.20 new text begin of credits to work locations outside the metropolitan area. Any credits allocated to an new text end 108.21 new text begin institution but not used may be reallocated to eligible institutions. The office shall allocate new text end 108.22 new text begin a portion of the administrative fee under section 290.06, subdivision 36, to participating new text end 108.23 new text begin eligible institutions for their administrative costs. new text end 108.24     new text begin Subd. 5. new text end new text begin Reports to the legislature. new text end new text begin (a) By February 1, 2015, the office and the new text end 108.25 new text begin Department of Revenue shall report to the legislature on the greater Minnesota internship new text end 108.26 new text begin program. The report must include at least the following: new text end 108.27 new text begin (1) the number and dollar amount of credits allowed; new text end 108.28 new text begin (2) the number of interns employed under the program; and new text end 108.29 new text begin (3) the cost of administering the program. new text end 108.30 new text begin (b) By February 1, 2016, the office and the Department of Revenue shall report to the new text end 108.31 new text begin legislature with an analysis of the effectiveness of the program in stimulating businesses new text end 108.32 new text begin to hire interns and in assisting participating interns in finding permanent career positions. new text end 108.33 new text begin This report must include the number of students who participated in the program who new text end 108.34 new text begin were subsequently employed full-time by the employer. new text end 108.35 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 108.36 new text begin December 31, 2013. new text end 109.1    Sec. 10. Minnesota Statutes 2012, section 289A.08, subdivision 3, is amended to read: 109.2    Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to 109.3tax under section 290.014, subdivision 5, must file a return, except that a foreign operating 109.4corporation as defined in section 290.01, subdivision 6b, is not required to file a return. 109.5(b) Members of a unitary business that are required to file a combined report on one 109.6return must designate a member of the unitary business to be responsible for tax matters, 109.7including the filing of returns, the payment of taxes, additions to tax, penalties, interest, 109.8or any other payment, and for the receipt of refunds of taxes or interest paid in excess of 109.9taxes lawfully due. The designated member must be a member of the unitary business that 109.10is filing the single combined report and either: 109.11(1) a corporation that is subject to the taxes imposed by chapter 290; or 109.12(2) a corporation that is not subject to the taxes imposed by chapter 290: 109.13(i) Such corporation consents by filing the return as a designated member under this 109.14clause to remit taxes, penalties, interest, or additions to tax due from the members of the 109.15unitary business subject to tax, and receive refunds or other payments on behalf of other 109.16members of the unitary business. The member designated under this clause is a "taxpayer" 109.17for the purposes of this chapter and chapter 270C, and is liable for any liability imposed 109.18on the unitary business under this chapter and chapter 290. 109.19(ii) If the state does not otherwise have the jurisdiction to tax the member designated 109.20under this clause, consenting to be the designated member does not create the jurisdiction 109.21to impose tax on the designated member, other than as described in item (i). 109.22(iii) The member designated under this clause must apply for a business tax account 109.23identification number. 109.24(c) The commissioner shall adopt rules for the filing of one return on behalf of the 109.25members of an affiliated group of corporations that are required to file a combined report. 109.26All members of an affiliated group that are required to file a combined report must file one 109.27return on behalf of the members of the group under rules adopted by the commissioner. 109.28(d) If a corporation claims on a return that it has paid tax in excess of the amount of 109.29taxes lawfully due, that corporation must include on that return information necessary for 109.30payment of the tax in excess of the amount lawfully due by electronic means. 109.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 109.32 new text begin December 31, 2012. new text end 109.33    Sec. 11. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read: 109.34    Subd. 19b. Subtractions from federal taxable income. For individuals, estates, 109.35and trusts, there shall be subtracted from federal taxable income: 110.1    (1) net interest income on obligations of any authority, commission, or 110.2instrumentality of the United States to the extent includable in taxable income for federal 110.3income tax purposes but exempt from state income tax under the laws of the United States; 110.4    (2) if included in federal taxable income, the amount of any overpayment of income 110.5tax to Minnesota or to any other state, for any previous taxable year, whether the amount 110.6is received as a refund or as a credit to another taxable year's income tax liability; 110.7    (3) the amount paid to others, less the amount used to claim the credit allowed under 110.8section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 110.9to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 110.10transportation of each qualifying child in attending an elementary or secondary school 110.11situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 110.12resident of this state may legally fulfill the state's compulsory attendance laws, which 110.13is not operated for profit, and which adheres to the provisions of the Civil Rights Act 110.14of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 110.15tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 110.16"textbooks" includes books and other instructional materials and equipment purchased 110.17or leased for use in elementary and secondary schools in teaching only those subjects 110.18legally and commonly taught in public elementary and secondary schools in this state. 110.19Equipment expenses qualifying for deduction includes expenses as defined and limited in 110.20section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 110.21books and materials used in the teaching of religious tenets, doctrines, or worship, the 110.22purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 110.23or materials for, or transportation to, extracurricular activities including sporting events, 110.24musical or dramatic events, speech activities, driver's education, or similar programs. No 110.25deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 110.26the qualifying child's vehicle to provide such transportation for a qualifying child. For 110.27purposes of the subtraction provided by this clause, "qualifying child" has the meaning 110.28given in section 32(c)(3) of the Internal Revenue Code; 110.29    (4) income as provided under section 290.0802; 110.30    (5) to the extent included in federal adjusted gross income, income realized on 110.31disposition of property exempt from tax under section 290.491; 110.32    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 110.33of the Internal Revenue Code in determining federal taxable income by an individual 110.34who does not itemize deductions for federal income tax purposes for the taxable year, an 110.35amount equal to 50 percent of the excess of charitable contributions over $500 allowable 111.1as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, 111.2under the provisions of Public Law 109-1 and Public Law 111-126; 111.3    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not 111.4qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 111.5of subnational foreign taxes for the taxable year, but not to exceed the total subnational 111.6foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 111.7"federal foreign tax credit" means the credit allowed under section 27 of the Internal 111.8Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 111.9under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 111.10the extent they exceed the federal foreign tax credit; 111.11    (8) in each of the five tax years immediately following the tax year in which an 111.12addition is required under subdivision 19a, clause (7), or 19c, clause (15) new text begin (13) new text end , in the case 111.13of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 111.14delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount 111.15of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c, 111.16clause (15) new text begin (13) new text end , in the case of a shareholder of an S corporation, minus the positive value 111.17of any net operating loss under section 172 of the Internal Revenue Code generated for the 111.18tax year of the addition. The resulting delayed depreciation cannot be less than zero; 111.19    (9) job opportunity building zone income as provided under section 469.316; 111.20    (10) to the extent included in federal taxable income, the amount of compensation 111.21paid to members of the Minnesota National Guard or other reserve components of the 111.22United States military for active service, excluding compensation for services performed 111.23under the Active Guard Reserve (AGR) program. For purposes of this clause, "active 111.24service" means (i) state active service as defined in section 190.05, subdivision 5a, clause 111.25(1); or (ii) federally funded state active service as defined in section 190.05, subdivision 111.265b , but "active service" excludes service performed in accordance with section 190.08, 111.27subdivision 3 ; 111.28    (11) to the extent included in federal taxable income, the amount of compensation 111.29paid to Minnesota residents who are members of the armed forces of the United States 111.30or United Nations for active duty performed under United States Code, title 10; or the 111.31authority of the United Nations; 111.32    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a 111.33qualified donor's donation, while living, of one or more of the qualified donor's organs 111.34to another person for human organ transplantation. For purposes of this clause, "organ" 111.35means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 111.36"human organ transplantation" means the medical procedure by which transfer of a human 112.1organ is made from the body of one person to the body of another person; "qualified 112.2expenses" means unreimbursed expenses for both the individual and the qualified donor 112.3for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 112.4may be subtracted under this clause only once; and "qualified donor" means the individual 112.5or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 112.6individual may claim the subtraction in this clause for each instance of organ donation for 112.7transplantation during the taxable year in which the qualified expenses occur; 112.8    (13) in each of the five tax years immediately following the tax year in which an 112.9addition is required under subdivision 19a, clause (8), or 19c, clause (16) new text begin (14) new text end , in the case 112.10of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of 112.11the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16) 112.12 new text begin (14) new text end , in the case of a shareholder of a corporation that is an S corporation, minus the 112.13positive value of any net operating loss under section 172 of the Internal Revenue Code 112.14generated for the tax year of the addition. If the net operating loss exceeds the addition for 112.15the tax year, a subtraction is not allowed under this clause; 112.16    (14) to the extent included in the federal taxable income of a nonresident of 112.17Minnesota, compensation paid to a service member as defined in United States Code, title 112.1810, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief 112.19Act, Public Law 108-189, section 101(2); 112.20    (15) to the extent included in federal taxable income, the amount of national service 112.21educational awards received from the National Service Trust under United States Code, 112.22title 42, sections 12601 to 12604, for service in an approved Americorps National Service 112.23program; 112.24(16) to the extent included in federal taxable income, discharge of indebtedness 112.25income resulting from reacquisition of business indebtedness included in federal taxable 112.26income under section 108(i) of the Internal Revenue Code. This subtraction applies only 112.27to the extent that the income was included in net income in a prior year as a result of the 112.28addition under section 290.01, subdivision 19a, clause (16); and 112.29(17) the amount of the net operating loss allowed under section 290.095, subdivision 112.3011 , paragraph (c) new text begin ; new text end 112.31 new text begin (18) in the year that the expenditures are made for railroad track maintenance, as new text end 112.32 new text begin defined in section 45G(d) of the Internal Revenue Code, in the case of a shareholder of a new text end 112.33 new text begin corporation that is an S corporation or a partner in a partnership, an amount equal to the new text end 112.34 new text begin credit awarded pursuant to section 45G(a) of the Internal Revenue Code. The subtraction new text end 112.35 new text begin shall be reduced to an amount equal to the percentage of the shareholder's or partner's new text end 112.36 new text begin share of the net income of the S corporation or partnership new text end . new text begin ; and new text end 113.1 new text begin (19) to the extent included in federal taxable income, the previous year's average new text end 113.2 new text begin dental provider's reimbursement from the Minnesota medical assistance program in the new text end 113.3 new text begin taxable year for which the subtraction is claimed multiplied by the dental provider's total new text end 113.4 new text begin number of patients enrolled in the Minnesota medical assistance program for the year, new text end 113.5 new text begin up to $25,000 for a taxable year. For purposes of this clause, "dental provider" means a new text end 113.6 new text begin licensed provider of dental services that treats patients eligible for medical assistance new text end 113.7 new text begin under section 256B.056. new text end 113.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 113.9 new text begin December 31, 2012. new text end 113.10    Sec. 12. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read: 113.11    Subd. 19c. Corporations; additions to federal taxable income. For corporations, 113.12there shall be added to federal taxable income: 113.13    (1) the amount of any deduction taken for federal income tax purposes for income, 113.14excise, or franchise taxes based on net income or related minimum taxes, including but not 113.15limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota, 113.16another state, a political subdivision of another state, the District of Columbia, or any 113.17foreign country or possession of the United States; 113.18    (2) interest not subject to federal tax upon obligations of: the United States, its 113.19possessions, its agencies, or its instrumentalities; the state of Minnesota or any other 113.20state, any of its political or governmental subdivisions, any of its municipalities, or any 113.21of its governmental agencies or instrumentalities; the District of Columbia; or Indian 113.22tribal governments; 113.23    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal 113.24Revenue Code; 113.25    (4) the amount of any net operating loss deduction taken for federal income tax 113.26purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss 113.27deduction under section 810 of the Internal Revenue Code; 113.28    (5) the amount of any special deductions taken for federal income tax purposes 113.29under sections 241 to 247 and 965 of the Internal Revenue Code; 113.30    (6) losses from the business of mining, as defined in section 290.05, subdivision 1, 113.31clause (a), that are not subject to Minnesota income tax; 113.32    (7) the amount of any capital losses deducted for federal income tax purposes under 113.33sections 1211 and 1212 of the Internal Revenue Code; 113.34    (8) the exempt foreign trade income of a foreign sales corporation under sections 113.35921(a) and 291 of the Internal Revenue Code; 114.1    (9) the amount of percentage depletion deducted under sections 611 through 614 and 114.2291 of the Internal Revenue Code; 114.3    (10) for certified pollution control facilities placed in service in a taxable year 114.4beginning before December 31, 1986, and for which amortization deductions were elected 114.5under section 169 of the Internal Revenue Code of 1954, as amended through December 114.631, 1985, the amount of the amortization deduction allowed in computing federal taxable 114.7income for those facilities; 114.8    (11) the amount of any deemed dividend from a foreign operating corporation 114.9determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend 114.10shall be reduced by the amount of the addition to income required by clauses (20), (21), 114.11(22), and (23); 114.12    (12) new text begin (11) new text end the amount of a partner's pro rata share of net income which does not flow 114.13through to the partner because the partnership elected to pay the tax on the income under 114.14section 6242(a)(2) of the Internal Revenue Code; 114.15    (13) the amount of net income excluded under section 114 of the Internal Revenue 114.16Code; 114.17    (14) new text begin (12) new text end any increase in subpart F income, as defined in section 952(a) of the 114.18Internal Revenue Code, for the taxable year when subpart F income is calculated without 114.19regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343; 114.20    (15) new text begin (13) new text end 80 percent of the depreciation deduction allowed under section 114.21168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if 114.22the taxpayer has an activity that in the taxable year generates a deduction for depreciation 114.23under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable 114.24year that the taxpayer is not allowed to claim for the taxable year, "the depreciation 114.25allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess 114.26of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) 114.27over the amount of the loss from the activity that is not allowed in the taxable year. In 114.28succeeding taxable years when the losses not allowed in the taxable year are allowed, the 114.29depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed; 114.30    (16) new text begin (14) new text end 80 percent of the amount by which the deduction allowed by section 179 of 114.31the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 114.32Revenue Code of 1986, as amended through December 31, 2003; 114.33    (17) new text begin (15) new text end to the extent deducted in computing federal taxable income, the amount of 114.34the deduction allowable under section 199 of the Internal Revenue Code; 115.1    (18) new text begin (16) new text end for taxable years beginning before January 1, 2013, the exclusion allowed 115.2under section 139A of the Internal Revenue Code for federal subsidies for prescription 115.3drug plans; 115.4    (19) new text begin (17) new text end the amount of expenses disallowed under section 290.10, subdivision 2; 115.5    (20) an amount equal to the interest and intangible expenses, losses, and costs paid, 115.6accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit 115.7of a corporation that is a member of the taxpayer's unitary business group that qualifies 115.8as a foreign operating corporation. For purposes of this clause, intangible expenses and 115.9costs include: 115.10    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition, 115.11use, maintenance or management, ownership, sale, exchange, or any other disposition of 115.12intangible property; 115.13    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting 115.14transactions; 115.15    (iii) royalty, patent, technical, and copyright fees; 115.16    (iv) licensing fees; and 115.17    (v) other similar expenses and costs. 115.18For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 115.19applications, trade names, trademarks, service marks, copyrights, mask works, trade 115.20secrets, and similar types of intangible assets. 115.21This clause does not apply to any item of interest or intangible expenses or costs paid, 115.22accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect 115.23to such item of income to the extent that the income to the foreign operating corporation 115.24is income from sources without the United States as defined in subtitle A, chapter 1, 115.25subchapter N, part 1, of the Internal Revenue Code; 115.26    (21) except as already included in the taxpayer's taxable income pursuant to clause 115.27(20), any interest income and income generated from intangible property received or 115.28accrued by a foreign operating corporation that is a member of the taxpayer's unitary 115.29group. For purposes of this clause, income generated from intangible property includes: 115.30    (i) income related to the direct or indirect acquisition, use, maintenance or 115.31management, ownership, sale, exchange, or any other disposition of intangible property; 115.32    (ii) income from factoring transactions or discounting transactions; 115.33    (iii) royalty, patent, technical, and copyright fees; 115.34    (iv) licensing fees; and 115.35    (v) other similar income. 116.1For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent 116.2applications, trade names, trademarks, service marks, copyrights, mask works, trade 116.3secrets, and similar types of intangible assets. 116.4This clause does not apply to any item of interest or intangible income received or accrued 116.5by a foreign operating corporation with respect to such item of income to the extent that 116.6the income is income from sources without the United States as defined in subtitle A, 116.7chapter 1, subchapter N, part 1, of the Internal Revenue Code; 116.8    (22) the dividends attributable to the income of a foreign operating corporation that 116.9is a member of the taxpayer's unitary group in an amount that is equal to the dividends 116.10paid deduction of a real estate investment trust under section 561(a) of the Internal 116.11Revenue Code for amounts paid or accrued by the real estate investment trust to the 116.12foreign operating corporation; 116.13    (23) the income of a foreign operating corporation that is a member of the taxpayer's 116.14unitary group in an amount that is equal to gains derived from the sale of real or personal 116.15property located in the United States; 116.16    (24) new text begin (18) new text end for taxable years beginning before January 1, 2010, the additional amount 116.17allowed as a deduction for donation of computer technology and equipment under section 116.18170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and 116.19(25) new text begin (19) new text end discharge of indebtedness income resulting from reacquisition of business 116.20indebtedness and deferred under section 108(i) of the Internal Revenue Code. 116.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 116.22 new text begin December 31, 2012. new text end 116.23    Sec. 13. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read: 116.24    Subd. 19d. Corporations; modifications decreasing federal taxable income. For 116.25corporations, there shall be subtracted from federal taxable income after the increases 116.26provided in subdivision 19c: 116.27    (1) the amount of foreign dividend gross-up added to gross income for federal 116.28income tax purposes under section 78 of the Internal Revenue Code; 116.29    (2) the amount of salary expense not allowed for federal income tax purposes due to 116.30claiming the work opportunity credit under section 51 of the Internal Revenue Code; 116.31    (3) any dividend (not including any distribution in liquidation) paid within the 116.32taxable year by a national or state bank to the United States, or to any instrumentality of 116.33the United States exempt from federal income taxes, on the preferred stock of the bank 116.34owned by the United States or the instrumentality; 117.1    (4) amounts disallowed for intangible drilling costs due to differences between 117.2this chapter and the Internal Revenue Code in taxable years beginning before January 117.31, 1987, as follows: 117.4    (i) to the extent the disallowed costs are represented by physical property, an amount 117.5equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09, 117.6subdivision 7 , subject to the modifications contained in subdivision 19e; and 117.7    (ii) to the extent the disallowed costs are not represented by physical property, an 117.8amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section 117.9290.09, subdivision 8 ; 117.10    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the 117.11Internal Revenue Code, except that: 117.12    (i) for capital losses incurred in taxable years beginning after December 31, 1986, 117.13capital loss carrybacks shall not be allowed; 117.14    (ii) for capital losses incurred in taxable years beginning after December 31, 1986, 117.15a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be 117.16allowed; 117.17    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a 117.18capital loss carryback to each of the three taxable years preceding the loss year, subject to 117.19the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and 117.20    (iv) for capital losses incurred in taxable years beginning before January 1, 1987, 117.21a capital loss carryover to each of the five taxable years succeeding the loss year to the 117.22extent such loss was not used in a prior taxable year and subject to the provisions of 117.23Minnesota Statutes 1986, section 290.16, shall be allowed; 117.24    (6) an amount for interest and expenses relating to income not taxable for federal 117.25income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and 117.26expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or 117.27291 of the Internal Revenue Code in computing federal taxable income; 117.28    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for 117.29which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a 117.30reasonable allowance for depletion based on actual cost. In the case of leases the deduction 117.31must be apportioned between the lessor and lessee in accordance with rules prescribed 117.32by the commissioner. In the case of property held in trust, the allowable deduction must 117.33be apportioned between the income beneficiaries and the trustee in accordance with the 117.34pertinent provisions of the trust, or if there is no provision in the instrument, on the basis 117.35of the trust's income allocable to each; 118.1    (8) for certified pollution control facilities placed in service in a taxable year 118.2beginning before December 31, 1986, and for which amortization deductions were elected 118.3under section 169 of the Internal Revenue Code of 1954, as amended through December 118.431, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes 118.51986, section 290.09, subdivision 7; 118.6    (9) amounts included in federal taxable income that are due to refunds of income, 118.7excise, or franchise taxes based on net income or related minimum taxes paid by the 118.8corporation to Minnesota, another state, a political subdivision of another state, the 118.9District of Columbia, or a foreign country or possession of the United States to the extent 118.10that the taxes were added to federal taxable income under section 290.01, subdivision 19c, 118.11clause (1), in a prior taxable year; 118.12    (10) 80 percent of royalties, fees, or other like income accrued or received from a 118.13foreign operating corporation or a foreign corporation which is part of the same unitary 118.14business as the receiving corporation, unless the income resulting from such payments or 118.15accruals is income from sources within the United States as defined in subtitle A, chapter 118.161, subchapter N, part 1, of the Internal Revenue Code; 118.17    (11) new text begin (10) new text end income or gains from the business of mining as defined in section 290.05, 118.18subdivision 1 , clause (a), that are not subject to Minnesota franchise tax; 118.19    (12) new text begin (11) new text end the amount of disability access expenditures in the taxable year which are not 118.20allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code; 118.21    (13) new text begin (12) new text end the amount of qualified research expenses not allowed for federal income 118.22tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent 118.23that the amount exceeds the amount of the credit allowed under section 290.068; 118.24    (14) new text begin (13) new text end the amount of salary expenses not allowed for federal income tax purposes 118.25due to claiming the Indian employment credit under section 45A(a) of the Internal 118.26Revenue Code; 118.27    (15) new text begin (14) new text end for a corporation whose foreign sales corporation, as defined in section 118.28922 of the Internal Revenue Code, constituted a foreign operating corporation during any 118.29taxable year ending before January 1, 1995, and a return was filed by August 15, 1996, 118.30claiming the deduction under section 290.21, subdivision 4, for income received from 118.31the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of 118.32income excluded under section 114 of the Internal Revenue Code, provided the income is 118.33not income of a foreign operating company; 118.34    (16) any decrease in subpart F income, as defined in section 952(a) of the Internal 118.35Revenue Code, for the taxable year when subpart F income is calculated without regard to 118.36the provisions of Division C, title III, section 303(b) of Public Law 110-343; 119.1    (17) new text begin (15) new text end in each of the five tax years immediately following the tax year in which an 119.2addition is required under subdivision 19c, clause (15) new text begin (13) new text end , an amount equal to one-fifth 119.3of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the 119.4amount of the addition made by the taxpayer under subdivision 19c, clause (15) new text begin (13) new text end . The 119.5resulting delayed depreciation cannot be less than zero; 119.6    (18) new text begin (16) new text end in each of the five tax years immediately following the tax year in which an 119.7addition is required under subdivision 19c, clause (16) new text begin (14) new text end , an amount equal to one-fifth 119.8of the amount of the addition; and 119.9(19) new text begin (17) new text end to the extent included in federal taxable income, discharge of indebtedness 119.10income resulting from reacquisition of business indebtedness included in federal taxable 119.11income under section 108(i) of the Internal Revenue Code. This subtraction applies only 119.12to the extent that the income was included in net income in a prior year as a result of the 119.13addition under section 290.01, subdivision 19c, clause (25) new text begin (19); new text end 119.14 new text begin (18) in the year that the expenditures are made for railroad track maintenance, as new text end 119.15 new text begin defined in section 45G(d) of the Internal Revenue Code, an amount equal to the credit new text end 119.16 new text begin awarded pursuant to section 45G(a) of the Internal Revenue Code new text end . new text begin ; and new text end 119.17 new text begin (19) to the extent included in federal taxable income, the previous year's average new text end 119.18 new text begin dental provider's reimbursement from the Minnesota medical assistance program in the new text end 119.19 new text begin taxable year for which the subtraction is claimed multiplied by the dental provider's total new text end 119.20 new text begin number of patients enrolled in the Minnesota medical assistance program for the year, new text end 119.21 new text begin up to $25,000 for a taxable year. For purposes of this clause, "dental provider" means a new text end 119.22 new text begin licensed provider of dental services that treats patients eligible for medical assistance new text end 119.23 new text begin under section 256B.056. new text end 119.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 119.25 new text begin December 31, 2012. new text end 119.26    Sec. 14. Minnesota Statutes 2012, section 290.06, subdivision 1, is amended to read: 119.27    Subdivision 1. Computation, corporations. The franchise tax imposed upon 119.28corporations shall be computed by applying to their taxable income the rate of 9.8 new text begin 9.0 new text end 119.29percent. 119.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 119.31 new text begin December 31, 2012. new text end 119.32    Sec. 15. Minnesota Statutes 2012, section 290.06, subdivision 2c, is amended to read: 120.1    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income 120.2taxes imposed by this chapter upon married individuals filing joint returns and surviving 120.3spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 120.4applying to their taxable net income the following schedule of rates: 120.5    (1) On the first $25,680 new text begin $35,480 new text end , 5.35 percent; 120.6    (2) On all over $25,680 new text begin $35,480 new text end , but not over $102,030 new text begin $140,960 new text end , 7.05 percent; 120.7    (3) On all over $102,030 new text begin $140,960 new text end , 7.85 new text begin 9.4 new text end percent. 120.8    Married individuals filing separate returns, estates, and trusts must compute their 120.9income tax by applying the above rates to their taxable income, except that the income 120.10brackets will be one-half of the above amounts. 120.11    (b) The income taxes imposed by this chapter upon unmarried individuals must be 120.12computed by applying to taxable net income the following schedule of rates: 120.13    (1) On the first $17,570 new text begin $24,270 new text end , 5.35 percent; 120.14    (2) On all over $17,570 new text begin $24,270 new text end , but not over $57,710 new text begin $79,730 new text end , 7.05 percent; 120.15    (3) On all over $57,710 new text begin $79,730 new text end , 7.85 new text begin 9.4 new text end percent. 120.16    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying 120.17as a head of household as defined in section 2(b) of the Internal Revenue Code must be 120.18computed by applying to taxable net income the following schedule of rates: 120.19    (1) On the first $21,630 new text begin $29,880 new text end , 5.35 percent; 120.20    (2) On all over $21,630 new text begin $29,880 new text end , but not over $86,910 new text begin $120,070 new text end , 7.05 percent; 120.21    (3) On all over $86,910 new text begin $120,070 new text end , 7.85 new text begin 9.4 new text end percent. 120.22    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the 120.23tax of any individual taxpayer whose taxable net income for the taxable year is less than 120.24an amount determined by the commissioner must be computed in accordance with tables 120.25prepared and issued by the commissioner of revenue based on income brackets of not 120.26more than $100. The amount of tax for each bracket shall be computed at the rates set 120.27forth in this subdivision, provided that the commissioner may disregard a fractional part of 120.28a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1. 120.29    (e) An individual who is not a Minnesota resident for the entire year must compute 120.30the individual's Minnesota income tax as provided in this subdivision. After the 120.31application of the nonrefundable credits provided in this chapter, the tax liability must 120.32then be multiplied by a fraction in which: 120.33    (1) the numerator is the individual's Minnesota source federal adjusted gross income 120.34as defined in section 62 of the Internal Revenue Code and increased by the additions 120.35required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), 120.36(13), and (16) to (18), and reduced by the Minnesota assignable portion of the subtraction 121.1for United States government interest under section 290.01, subdivision 19b, clause 121.2(1), and the subtractions under section 290.01, subdivision 19b, clauses (8), (9), (13), 121.3(14), (16), and (17), after applying the allocation and assignability provisions of section 121.4290.081 , clause (a), or 290.17; and 121.5    (2) the denominator is the individual's federal adjusted gross income as defined in 121.6section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 121.7section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to 121.8(18), and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), 121.9(8), (9), (13), (14), (16), and (17). 121.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 121.11 new text begin December 31, 2012. new text end 121.12    Sec. 16. Minnesota Statutes 2012, section 290.06, subdivision 2d, is amended to read: 121.13    Subd. 2d. Inflation adjustment of brackets. (a) For taxable years beginning after 121.14December 31, 2000 new text begin 2013 new text end , the minimum and maximum dollar amounts for each rate 121.15bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the 121.16percentage determined under paragraph (b). For the purpose of making the adjustment as 121.17provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the 121.18rate brackets as they existed for taxable years beginning after December 31, 1999 new text begin 2012 new text end , 121.19and before January 1, 2001 new text begin 2014 new text end . The rate applicable to any rate bracket must not be 121.20changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes 121.21in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10 121.22amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount. 121.23(b) The commissioner shall adjust the rate brackets and by the percentage determined 121.24pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in 121.25section 1(f)(3)(B) the word "1999" new text begin "2012" new text end shall be substituted for the word "1992." For 121.262001 new text begin 2014 new text end , the commissioner shall then determine the percent change from the 12 months 121.27ending on August 31, 1999 new text begin 2012 new text end , to the 12 months ending on August 31, 2000 new text begin 2013 new text end , and 121.28in each subsequent year, from the 12 months ending on August 31, 1999 new text begin 2012 new text end , to the 12 121.29months ending on August 31 of the year preceding the taxable year. The determination of 121.30the commissioner pursuant to this subdivision shall not be considered a "rule" and shall 121.31not be subject to the Administrative Procedure Act contained in chapter 14. 121.32No later than December 15 of each year, the commissioner shall announce the 121.33specific percentage that will be used to adjust the tax rate brackets. 122.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 122.2 new text begin December 31, 2012. new text end 122.3    Sec. 17. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision 122.4to read: 122.5     new text begin Subd. 36. new text end new text begin Greater Minnesota internship credit. new text end new text begin (a) A taxpayer may take a credit new text end 122.6 new text begin against the tax due under this chapter equal to the lesser of: new text end 122.7 new text begin (1) 40 percent of the compensation paid to an intern qualifying under the program new text end 122.8 new text begin established under section 136A.129, but not to exceed $2,000 per intern; or new text end 122.9 new text begin (2) the amount certified by the Office of Higher Education under section 136A.129 new text end 122.10 new text begin to the taxpayer. new text end 122.11 new text begin (b) Credits allowed to a partnership, a limited liability company taxed as a new text end 122.12 new text begin partnership, an S corporation, or multiple owners of property are passed through to the new text end 122.13 new text begin partners, members, shareholders, or owners, respectively, pro rata to each partner, member, new text end 122.14 new text begin shareholder, or owner based on their share of the entity's income for the taxable year. new text end 122.15 new text begin (c) If the amount of credit which the taxpayer is eligible to receive under this new text end 122.16 new text begin subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of new text end 122.17 new text begin revenue shall refund the excess to the taxpayer. new text end 122.18 new text begin (d) The amount necessary to: new text end 122.19 new text begin (1) pay claims for the refund provided in this subdivision; and new text end 122.20 new text begin (2) an amount equal to one percent of the total amount of the credits authorized new text end 122.21 new text begin under this subdivision for an administrative fee for the Office of Higher Education new text end 122.22 new text begin and participating eligible institutions is appropriated from the general fund to the new text end 122.23 new text begin commissioner of revenue, not to exceed $2,020,000. new text end 122.24 new text begin The commissioner of revenue shall transfer the amount of the administrative fee to new text end 122.25 new text begin the Office of Higher Education. new text end 122.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 122.27 new text begin December 31, 2013. new text end 122.28    Sec. 18. Minnesota Statutes 2012, section 290.0677, subdivision 1, is amended to read: 122.29    Subdivision 1. Credit allowed; current military service. (a) An individual is 122.30allowed a credit against the tax due under this chapter equal to $59 for each month or 122.31portion thereof that the individual was in active military service in a designated area after 122.32September 11, 2001, and before January 1, 2009, while a Minnesota domiciliary. 123.1    (b) An individual is allowed a credit against the tax due under this chapter equal 123.2to $120 new text begin $200 new text end for each month or portion thereof that the individual was in active military 123.3service in a designated area after December 31, 2008, while a Minnesota domiciliary. 123.4    (c) For active service performed after September 11, 2001, and before December 31, 123.52006, the individual may claim the credit in the taxable year beginning after December 31, 123.62005, and before January 1, 2007. 123.7    (d) For active service performed after December 31, 2006, the individual may claim 123.8the credit for the taxable year in which the active service was performed. 123.9    (e) If an individual entitled to the credit died prior to January 1, 2006, the individual's 123.10estate or heirs at law, if the individual's probate estate has closed or the estate was not 123.11probated, may claim the credit. 123.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 123.13 new text begin December 31, 2012. new text end 123.14    Sec. 19. Minnesota Statutes 2012, section 290.0677, subdivision 1a, is amended to read: 123.15    Subd. 1a. Credit allowed; past military service. (a) A qualified individual is 123.16allowed a credit against the tax imposed under this chapter for past military service. The 123.17credit equals $750 new text begin $1,500 new text end . The credit allowed under this subdivision is reduced by ten 123.18percent of adjusted gross income in excess of $30,000, but in no case is the credit less 123.19than zero. 123.20    (b) For a nonresident or a part-year resident, the credit under this subdivision 123.21must be allocated based on the percentage calculated under section 290.06, subdivision 123.222c , paragraph (e). 123.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 123.24 new text begin December 31, 2012. new text end 123.25    Sec. 20. Minnesota Statutes 2012, section 290.0677, subdivision 2, is amended to read: 123.26    Subd. 2. Definitions. (a) For purposes of this section new text begin , new text end the following terms have 123.27the meanings given. 123.28    (b) "Designated area" means a: 123.29    (1) combat zone designated by Executive Order from the President of the United 123.30States; 123.31    (2) qualified hazardous duty area, designated in Public Law; or 123.32    (3) location certified by the U. S. Department of Defense as eligible for combat zone 123.33tax benefits due to the location's direct support of military operations. 124.1    (c) "Active military service" means active duty service in any of the United States 124.2armed forces, the National Guard, or reserves. 124.3    (d) "Qualified individual" means an individual who has new text begin : new text end 124.4    (1) either (i) new text begin met one of the following criteria: new text end 124.5     new text begin (i) has new text end served at least 20 years in the military or new text begin ; new text end 124.6    (ii) has a service-connected disability rating of 100 percent for a total and permanent 124.7disability; new text begin or new text end 124.8     new text begin (iii) has been determined by the military to be eligible for compensation from a new text end 124.9 new text begin pension or other retirement pay from the federal government for service in the military, new text end 124.10 new text begin as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455, new text end 124.11 new text begin or 12733; new text end and 124.12    (2) separated from military service before the end of the taxable year. 124.13    (e) "Adjusted gross income" has the meaning given in section 61 of the Internal 124.14Revenue Code. 124.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 124.16 new text begin December 31, 2012. new text end 124.17    Sec. 21. Minnesota Statutes 2012, section 290.068, subdivision 1, is amended to read: 124.18    Subdivision 1. Credit allowed. A corporation, partners in a partnership, or 124.19shareholders in a corporation treated as an "S" corporation under section 290.9725 are 124.20allowed a credit against the tax computed under this chapter for the taxable year equal to: 124.21    (a) ten percent of the first $2,000,000 of the excess (if any) of 124.22    (1) the qualified research expenses for the taxable year, over 124.23    (2) the base amount; and 124.24    (b) 2.5 new text begin 3.75 new text end percent on all of such excess expenses over $2,000,000. 124.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 124.26 new text begin December 31, 2012. new text end 124.27    Sec. 22. Minnesota Statutes 2012, section 290.0681, subdivision 1, is amended to read: 124.28    Subdivision 1. Definitions. (a) For purposes of this section, the following terms 124.29have the meanings given. 124.30(b) "Account" means the historic credit administration account in the special 124.31revenue fund. 124.32(c) "Office" means the State Historic Preservation Office of the Minnesota Historical 124.33Society. 125.1(d) "Project" means rehabilitation of a certified historic structure, as defined in 125.2section 47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is 125.3allowed a federal credit under section 47(a)(2) of the Internal Revenue Code. 125.4(e) "Society" means the Minnesota Historical Society. 125.5 new text begin (f) "Federal credit" means the credit allowed under section 47(a)(2) of the Internal new text end 125.6 new text begin Revenue Code. new text end 125.7 new text begin (g) "Placed in service" has the meaning used in section 47 of the Internal Revenue new text end 125.8 new text begin Code. new text end 125.9 new text begin (h) "Qualified rehabilitation expenditures" has the meaning given in section 47 of new text end 125.10 new text begin the Internal Revenue Code. new text end 125.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 125.12    Sec. 23. Minnesota Statutes 2012, section 290.0681, subdivision 3, is amended to read: 125.13    Subd. 3. Applications; allocations. (a) To qualify for a credit or grant under this 125.14section, the developer of a project must apply to the office before the rehabilitation begins. 125.15The application must contain the information and be in the form prescribed by the office. 125.16The office may collect a fee for application of up to $5,000 new text begin 0.5 percent of qualified new text end 125.17 new text begin rehabilitation expenditures, up to $45,000 new text end , based on estimated qualified rehabilitation 125.18expenses new text begin expenditures new text end , to offset costs associated with personnel and administrative 125.19expenses related to administering the credit and preparing the economic impact report 125.20in subdivision 9. Application fees are deposited in the account. The application must 125.21indicate if the application is for a credit or a grant in lieu of the credit or a combination of 125.22the two and designate the taxpayer qualifying for the credit or the recipient of the grant. 125.23    (b) Upon approving an application for credit, the office shall issue allocation 125.24certificates that: 125.25    (1) verify eligibility for the credit or grant; 125.26    (2) state the amount of credit or grant anticipated with the project, with the credit 125.27amount equal to 100 percent and the grant amount equal to 90 percent of the federal 125.28credit anticipated in the application; 125.29    (3) state that the credit or grant allowed may increase or decrease if the federal 125.30credit the project receives at the time it is placed in service is different than the amount 125.31anticipated at the time the allocation certificate is issued; and 125.32    (4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer 125.33or grant recipient is entitled to receive the credit or grant at the time the project is placed 125.34in service, provided that date is within three calendar years following the issuance of 125.35the allocation certificate. 126.1    (c) The office, in consultation with the commissioner of revenue, shall determine 126.2if the project is eligible for a credit or a grant under this section new text begin and must notify the new text end 126.3 new text begin developer in writing of its determination new text end . Eligibility for the credit is subject to review 126.4and audit by the commissioner of revenue. 126.5    (d) The federal credit recapture and repayment requirements under section 50 of the 126.6Internal Revenue Code do not apply to the credit allowed under this section. 126.7 new text begin (e) Any decision of the office under paragraph (c) may be challenged as a contested new text end 126.8 new text begin case under chapter 14. The contested case proceeding must be initiated within 45 days of new text end 126.9 new text begin the date of written notification by the office. new text end 126.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 126.11    Sec. 24. Minnesota Statutes 2012, section 290.0681, subdivision 4, is amended to read: 126.12    Subd. 4. Credit certificates new text begin ; grants new text end . (a)(1) The developer of a project for which the 126.13office has issued an allocation certificate must notify the office when the project is placed 126.14in service. Upon verifying that the project has been placed in service, and was allowed a 126.15federal credit, the office must issue a credit certificate to the taxpayer designated in the 126.16application or must issue a grant to the recipient designated in the application. new text begin Credit new text end 126.17 new text begin certificates will be issued on a first come, first served basis according to the date and time new text end 126.18 new text begin of verification required under this clause. The total amount of all credits issued in any new text end 126.19 new text begin fiscal year under this subdivision must not exceed $15,000,000. new text end The credit certificate 126.20must state the amount of the credit. 126.21    (2) The credit amount equals the federal credit allowed for the project. 126.22    (3) The grant amount equals 90 percent of the federal credit allowed for the project. 126.23    (b) The recipient of a credit certificate may assign the certificate to another taxpayer, 126.24which is then allowed the credit under this section or section 297I.20, subdivision 3. new text begin An new text end 126.25 new text begin assignment is not valid unless the assignee notifies the commissioner within 30 days of the new text end 126.26 new text begin date that the assignment is made. new text end The commissioner shall prescribe the forms necessary 126.27for new text begin notifying the commissioner of the assignment of a credit certificate and for new text end claiming 126.28a credit by assignment. 126.29     new text begin (c) Credits passed through to partners, members, shareholders, or owners pursuant to new text end 126.30 new text begin subdivision 5 are not an assignment of a credit certificate under this subdivision. new text end 126.31     new text begin (d) A grant agreement between the office and the recipient of a grant may allow the new text end 126.32 new text begin grant to be issued to another individual or entity. new text end 126.33 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (a) is effective beginning fiscal year 2016. new text end 126.34 new text begin Paragraph (b) is effective the day following final enactment. new text end 127.1    Sec. 25. Minnesota Statutes 2012, section 290.0681, subdivision 5, is amended to read: 127.2    Subd. 5. Partnerships; multiple owners. Credits granted to a partnership, a limited 127.3liability company taxed as a partnership, S corporation, or multiple owners of property 127.4are passed through to the partners, members, shareholders, or owners, respectively, pro 127.5rata to each partner, member, shareholder, or owner based on their share of the entity's 127.6assets or as specially allocated in their organizational documents new text begin or any other executed new text end 127.7 new text begin agreement new text end , as of the last day of the taxable year. 127.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 127.9    Sec. 26. Minnesota Statutes 2012, section 290.0681, subdivision 7, is amended to read: 127.10    Subd. 7. Appropriations. (a) An amount sufficient to pay the refunds authorized 127.11under this section is appropriated to the commissioner from the general fund. 127.12(b) new text begin Subject to the limitation in paragraph (a), new text end an amount sufficient to pay the grants 127.13authorized under this section is appropriated to the society from the general fund. 127.14(c) Amounts in the account are appropriated to the society for costs associated with 127.15personnel and administrative expenses related to administering the credit for historic 127.16structure rehabilitation in this section, for refunding application fees under subdivision 127.173, and for costs associated with preparing the determination of economic impact report 127.18required in subdivision 9. 127.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning fiscal year 2016. new text end 127.20    Sec. 27. Minnesota Statutes 2012, section 290.0681, subdivision 10, is amended to read: 127.21    Subd. 10. Sunset. This section expires after fiscal year 2015 new text begin 2021 new text end , except that 127.22the office's authority to issue credit certificates under subdivision 4 based on allocation 127.23certificates that were issued before fiscal year 2016 new text begin 2022 new text end remains in effect through 2018 127.24 new text begin 2024 new text end , and the reporting requirements in subdivision 9 remain in effect through the year 127.25following the year in which all allocation certificates have either been canceled or resulted 127.26in issuance of credit certificates, or 2019 new text begin 2025 new text end , whichever is earlier. 127.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 127.28    Sec. 28. new text begin [290.0682] JOBS CREDIT; GREATER MINNESOTA BUSINESS new text end 127.29 new text begin EXPANSIONS. new text end 127.30     new text begin Subdivision 1. new text end new text begin Credit allowed. new text end new text begin (a) If authorized by its business subsidy agreement, a new text end 127.31 new text begin qualified business is allowed a credit against the taxes imposed under chapter 290. Credits new text end 127.32 new text begin must be awarded on a first come, first served basis. The credit equals seven percent of: new text end 128.1 new text begin (1) the lesser of: new text end 128.2 new text begin (i) the greater Minnesota payroll for the taxable year, less the greater Minnesota new text end 128.3 new text begin payroll for the base year; or new text end 128.4 new text begin (ii) the total Minnesota payroll for the taxable year, less the total Minnesota payroll new text end 128.5 new text begin for the base year; minus new text end 128.6 new text begin (2)(i) $35,000 multiplied by (ii) the number of full-time equivalent employees that new text end 128.7 new text begin the qualified business employs in greater Minnesota for the taxable year, minus the new text end 128.8 new text begin number of full-time equivalent employees the business employed in greater Minnesota in new text end 128.9 new text begin the base year, but not less than zero. new text end 128.10 new text begin (b) The total amount of credits allowed under paragraph (a) to all qualified new text end 128.11 new text begin businesses must not exceed $5,000,000 in a calendar year. new text end 128.12     new text begin Subd. 2. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms have new text end 128.13 new text begin the meanings given. new text end 128.14 new text begin (b) "Base year" means the taxable year beginning during the calendar year prior to new text end 128.15 new text begin the calendar year in which the qualified business was certified under section 116J.3738. new text end 128.16 new text begin (c) "Full-time equivalent employees" means the equivalent of annualized expected new text end 128.17 new text begin hours of work equal to 2,080 hours. new text end 128.18 new text begin (d) "Greater Minnesota" has the meaning given in section 116J.3738. new text end 128.19 new text begin (e) "Greater Minnesota payroll" is that portion of the payroll factor under section new text end 128.20 new text begin 290.191 that represents: new text end 128.21 new text begin (1) wages or salaries paid to an individual for services performed in greater new text end 128.22 new text begin Minnesota; plus new text end 128.23 new text begin (2) wages or salaries paid to individuals working from offices within greater new text end 128.24 new text begin Minnesota if their employment requires them to work outside of greater Minnesota and the new text end 128.25 new text begin work is incidental to the work performed by the individual within greater Minnesota; less new text end 128.26 new text begin (3) the amount of compensation attributable to any employee whose wages or salary new text end 128.27 new text begin are included in clause (1) or (2) that exceeds $125,000. new text end 128.28 new text begin (f) "Minnesota payroll" means the wages or salaries attributed to Minnesota under new text end 128.29 new text begin section 290.191, subdivision 12, for the qualified business or the unitary business of which new text end 128.30 new text begin the qualified business is a part, whichever is greater. new text end 128.31 new text begin (g) "Qualified business" means a qualified business certified under section new text end 128.32 new text begin 116J.3738, subdivision 3. new text end 128.33     new text begin Subd. 3. new text end new text begin Inflation adjustment. new text end new text begin For taxable years beginning after December 31, new text end 128.34 new text begin 2014, the dollar amounts in subdivision 1, clause (2), and subdivision 2, paragraph (e), are new text end 128.35 new text begin annually adjusted for inflation. The commissioner of revenue shall adjust the amounts by new text end 128.36 new text begin the percentage determined under section 290.06, subdivision 2d, for the taxable year. new text end 129.1     new text begin Subd. 4. new text end new text begin Refundable. new text end new text begin If the amount of the credit exceeds the liability for tax under new text end 129.2 new text begin this chapter, the commissioner of revenue shall refund the excess to the qualified business. new text end 129.3     new text begin Subd. 5. new text end new text begin Appropriation. new text end new text begin An amount sufficient to pay the refunds authorized by this new text end 129.4 new text begin section is appropriated to the commissioner of revenue from the general fund. new text end 129.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 129.6 new text begin December 31, 2013. new text end 129.7    Sec. 29. new text begin [290.0683] CLOTHING SALES TAX CREDIT. new text end 129.8     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms new text end 129.9 new text begin have the meanings given. new text end 129.10 new text begin (b) "Income" has the meaning given in section 290.067, subdivision 2a. new text end 129.11 new text begin (c) "Dependent" has the meaning given in section 152 of the Internal Revenue Code. new text end 129.12     new text begin Subd. 2. new text end new text begin Credit allowed. new text end new text begin A taxpayer is allowed a refundable credit against the tax new text end 129.13 new text begin imposed under this chapter. The credit is equal to $60 for a married couple filing a joint new text end 129.14 new text begin return, and $30 for all other filers, plus $30 for the first dependent claimed on the return, new text end 129.15 new text begin $15 for each of the second and third dependents claimed on the return, $10 for the fourth new text end 129.16 new text begin dependent claimed on the return, and $5 for each subsequent dependent. new text end 129.17     new text begin Subd. 3. new text end new text begin Limitations. new text end new text begin The credit allowed in this section is reduced by $10 for every new text end 129.18 new text begin $1,000 of income in excess of 200 percent of the federal poverty guidelines. new text end 129.19     new text begin Subd. 4. new text end new text begin Appropriation. new text end new text begin An amount sufficient to pay the refunds required by this new text end 129.20 new text begin section is appropriated to the commissioner from the general fund. new text end 129.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 129.22 new text begin December 31, 2012. new text end 129.23    Sec. 30. Minnesota Statutes 2012, section 290.091, subdivision 2, is amended to read: 129.24    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following 129.25terms have the meanings given: 129.26    (a) "Alternative minimum taxable income" means the sum of the following for 129.27the taxable year: 129.28    (1) the taxpayer's federal alternative minimum taxable income as defined in section 129.2955(b)(2) of the Internal Revenue Code; 129.30    (2) the taxpayer's itemized deductions allowed in computing federal alternative 129.31minimum taxable income, but excluding: 129.32    (i) the charitable contribution deduction under section 170 of the Internal Revenue 129.33Code; 130.1    (ii) the medical expense deduction; 130.2    (iii) the casualty, theft, and disaster loss deduction; and 130.3    (iv) the impairment-related work expenses of a disabled person; 130.4    (3) for depletion allowances computed under section 613A(c) of the Internal 130.5Revenue Code, with respect to each property (as defined in section 614 of the Internal 130.6Revenue Code), to the extent not included in federal alternative minimum taxable income, 130.7the excess of the deduction for depletion allowable under section 611 of the Internal 130.8Revenue Code for the taxable year over the adjusted basis of the property at the end of the 130.9taxable year (determined without regard to the depletion deduction for the taxable year); 130.10    (4) to the extent not included in federal alternative minimum taxable income, the 130.11amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 130.12Internal Revenue Code determined without regard to subparagraph (E); 130.13    (5) to the extent not included in federal alternative minimum taxable income, the 130.14amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and 130.15    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 130.16to (9), (12), (13), and (16) to (18); 130.17    less the sum of the amounts determined under the following: 130.18    (1) interest income as defined in section 290.01, subdivision 19b, clause (1); 130.19    (2) an overpayment of state income tax as provided by section 290.01, subdivision 130.2019b , clause (2), to the extent included in federal alternative minimum taxable income; 130.21    (3) the amount of investment interest paid or accrued within the taxable year on 130.22indebtedness to the extent that the amount does not exceed net investment income, as 130.23defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 130.24amounts deducted in computing federal adjusted gross income; 130.25    (4) amounts subtracted from federal taxable income as provided by section 290.01, 130.26subdivision 19b , clauses (6), (8) to (14), and (16) new text begin , and (18) new text end ; and 130.27(5) the amount of the net operating loss allowed under section 290.095, subdivision 130.2811 , paragraph (c). 130.29    In the case of an estate or trust, alternative minimum taxable income must be 130.30computed as provided in section 59(c) of the Internal Revenue Code. 130.31    (b) "Investment interest" means investment interest as defined in section 163(d)(3) 130.32of the Internal Revenue Code. 130.33    (c) "Net minimum tax" means the minimum tax imposed by this section. 130.34    (d) "Regular tax" means the tax that would be imposed under this chapter (without 130.35regard to this section and section 290.032), reduced by the sum of the nonrefundable 130.36credits allowed under this chapter. 131.1    (e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 131.2income after subtracting the exemption amount determined under subdivision 3. 131.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 131.4 new text begin December 31, 2012. new text end 131.5    Sec. 31. Minnesota Statutes 2012, section 290.0921, subdivision 1, is amended to read: 131.6    Subdivision 1. Tax imposed. In addition to the taxes computed under this chapter 131.7without regard to this section, the franchise tax imposed on corporations includes a tax 131.8equal to the excess, if any, for the taxable year of: 131.9(1) 5.8 new text begin 5.3 new text end percent of Minnesota alternative minimum taxable income; over 131.10(2) the tax imposed under section 290.06, subdivision 1, without regard to this section. 131.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 131.12 new text begin December 31, 2012. new text end 131.13    Sec. 32. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read: 131.14    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable 131.15income" is Minnesota net income as defined in section 290.01, subdivision 19, and 131.16includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), 131.17(f), and (h) of the Internal Revenue Code. If a corporation files a separate company 131.18Minnesota tax return, the minimum tax must be computed on a separate company basis. 131.19If a corporation is part of a tax group filing a unitary return, the minimum tax must be 131.20computed on a unitary basis. The following adjustments must be made. 131.21(1) For purposes of the depreciation adjustments under section 56(a)(1) and 131.2256(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in 131.23service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal 131.24income tax purposes, including any modification made in a taxable year under section 131.25290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7, 131.26paragraph (c). 131.27For taxable years beginning after December 31, 2000, the amount of any remaining 131.28modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986, 131.29section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation 131.30allowance in the first taxable year after December 31, 2000. 131.31(2) The portion of the depreciation deduction allowed for federal income tax 131.32purposes under section 168(k) of the Internal Revenue Code that is required as an addition 132.1under section 290.01, subdivision 19c, clause (15) new text begin (13) new text end , is disallowed in determining 132.2alternative minimum taxable income. 132.3(3) The subtraction for depreciation allowed under section 290.01, subdivision 132.419d , clause (17) new text begin (16) new text end , is allowed as a depreciation deduction in determining alternative 132.5minimum taxable income. 132.6(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 132.7of the Internal Revenue Code does not apply. 132.8(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 132.9Revenue Code does not apply. 132.10(6) The special rule for dividends from section 936 companies under section 132.1156(g)(4)(C)(iii) does not apply. 132.12(7) new text begin (6) new text end The tax preference for depletion under section 57(a)(1) of the Internal 132.13Revenue Code does not apply. 132.14(8) new text begin (7) new text end The tax preference for intangible drilling costs under section 57(a)(2) of the 132.15Internal Revenue Code must be calculated without regard to subparagraph (E) and the 132.16subtraction under section 290.01, subdivision 19d, clause (4). 132.17(9) new text begin (8) new text end The tax preference for tax exempt interest under section 57(a)(5) of the 132.18Internal Revenue Code does not apply. 132.19(10) new text begin (9) new text end The tax preference for charitable contributions of appreciated property 132.20under section 57(a)(6) of the Internal Revenue Code does not apply. 132.21(11) new text begin (10) new text end For purposes of calculating the tax preference for accelerated depreciation 132.22or amortization on certain property placed in service before January 1, 1987, under section 132.2357(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the 132.24deduction allowed under section 290.01, subdivision 19e. 132.25For taxable years beginning after December 31, 2000, the amount of any remaining 132.26modification made under section 290.01, subdivision 19e, not previously deducted is a 132.27depreciation or amortization allowance in the first taxable year after December 31, 2004. 132.28(12) new text begin (11) new text end For purposes of calculating the adjustment for adjusted current earnings 132.29in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable 132.30income" as it is used in section 56(g) of the Internal Revenue Code, means alternative 132.31minimum taxable income as defined in this subdivision, determined without regard to the 132.32adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code. 132.33(13) new text begin (12) new text end For purposes of determining the amount of adjusted current earnings 132.34under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under 132.35section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign 132.36dividend gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), 133.1(ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in 133.2section 290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other 133.3like income subtracted as provided in section 290.01, subdivision 19d, clause (10). 133.4(14) new text begin (13) new text end Alternative minimum taxable income excludes the income from operating 133.5in a job opportunity building zone as provided under section 469.317. 133.6(15) new text begin (14) new text end Alternative minimum taxable income excludes the income from operating 133.7in a biotechnology and health sciences industry zone as provided under section 469.337. 133.8Items of tax preference must not be reduced below zero as a result of the 133.9modifications in this subdivision. 133.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 133.11 new text begin December 31, 2012. new text end 133.12    Sec. 33. Minnesota Statutes 2012, section 290.0922, subdivision 1, is amended to read: 133.13    Subdivision 1. Imposition. (a) In addition to the tax imposed by this chapter without 133.14regard to this section, the franchise tax imposed on a corporation required to file under 133.15section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation 133.16under section 290.9725 for the taxable year includes a tax equal to the following amounts: 133.17 133.18 If the sum of the corporation's Minnesota property, payrolls, and sales or receipts is: the tax equals: 133.19 133.20 less than $ 500,000 new text begin 930,000 new text end $ 0 133.21 133.22 $ 500,000 new text begin 930,000 new text end to $ 999,999 new text begin 1,869,999 new text end $ 100 new text begin 190 new text end 133.23 133.24 $ 1,000,000 new text begin 1,870,000 new text end to $ 4,999,999 new text begin 9,339,999 new text end $ 300 new text begin 560 new text end 133.25 133.26 $ 5,000,000 new text begin 9,340,000 new text end to $ 9,999,999 new text begin 18,679,999 new text end $ 1,000 new text begin 1,870 new text end 133.27 133.28 $ 10,000,000 new text begin 18,680,000 new text end to $ 19,999,999 new text begin 37,359,999 new text end $ 2,000 new text begin 3,740 new text end 133.29 133.30 $ 20,000,000 new text begin 37,360,000 new text end or more $ 5,000 new text begin 9,340 new text end 133.31(b) A tax is imposed for each taxable year on a corporation required to file a return 133.32under section 289A.12, subdivision 3, that is treated as an "S" corporation under section 133.33290.9725 and on a partnership required to file a return under section 289A.12, subdivision 133.343 , other than a partnership that derives over 80 percent of its income from farming. The 133.35tax imposed under this paragraph is due on or before the due date of the return for the 133.36taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe 133.37the return to be used for payment of this tax. The tax under this paragraph is equal to 133.38the following amounts: 134.1 134.2 134.3 134.4 If the sum of the S corporation's or partnership's Minnesota property, payrolls, and sales or receipts is: the tax equals: 134.5 134.6 less than $ 500,000 new text begin 930,000 new text end $ 0 134.7 134.8 $ 500,000 new text begin 930,000 new text end to $ 999,999 new text begin 1,869,999 new text end $ 100 new text begin 190 new text end 134.9 134.10 $ 1,000,000 new text begin 1,870,000 new text end to $ 4,999,999 new text begin 9,339,999 new text end $ 300 new text begin 560 new text end 134.11 134.12 $ 5,000,000 new text begin 9,340,000 new text end to $ 9,999,999 new text begin 18,679,999 new text end $ 1,000 new text begin 1,870 new text end 134.13 134.14 $ 10,000,000 new text begin 18,680,000 new text end to $ 19,999,999 new text begin 37,359,999 new text end $ 2,000 new text begin 3,740 new text end 134.15 134.16 $ 20,000,000 new text begin 37,360,000 new text end or more $ 5,000 new text begin 9,340 new text end 134.17 new text begin (c) The commissioner shall adjust the dollar amounts of both the tax and the property, new text end 134.18 new text begin payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage new text end 134.19 new text begin determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except new text end 134.20 new text begin that in section 1(f)(3)(B) the year 2012 must be substituted for the year 1992. For 2014, new text end 134.21 new text begin the commissioner shall determine the percentage change from the 12 months ending on new text end 134.22 new text begin August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent new text end 134.23 new text begin year, from the 12 months ending on August 31, 2012, to the 12 months ending on August new text end 134.24 new text begin 31 of the year preceding the taxable year. The determination of the commissioner pursuant new text end 134.25 new text begin to this subdivision is not a rule subject to the Administrative Procedure Act contained in new text end 134.26 new text begin chapter 14. The tax amounts as adjusted must be rounded to the nearest $10 amount and new text end 134.27 new text begin the threshold amounts must be adjusted to the nearest $10,000 amount. For tax amounts new text end 134.28 new text begin that end in $5, the amount is rounded up to the nearest $10 amount and for threshold new text end 134.29 new text begin amounts that end in $5,000, the amount is rounded up to the nearest $10,000. new text end 134.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 134.31 new text begin December 31, 2012. new text end 134.32    Sec. 34. Minnesota Statutes 2012, section 290.095, subdivision 2, is amended to read: 134.33    Subd. 2. Defined and limited. (a) The term "net operating loss" as used in this 134.34section shall mean a net operating loss as defined in section 172(c) of the Internal Revenue 134.35Code, with the modifications specified in subdivision 4. The deductions provided in 134.36section 290.21 and the modification provided in section 290.01, subdivision 19d, clause 134.37(10), cannot be used in the determination of a net operating loss. 134.38(b) The term "net operating loss deduction" as used in this section means the 134.39aggregate of the net operating loss carryovers to the taxable year, computed in accordance 135.1with subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating 135.2to the carryback of net operating losses, do not apply. 135.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 135.4 new text begin December 31, 2012. new text end 135.5    Sec. 35. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read: 135.6    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly 135.7within this state or partly within and partly without this state is part of a unitary business, 135.8the entire income of the unitary business is subject to apportionment pursuant to section 135.9290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary 135.10business is considered to be derived from any particular source and none may be allocated 135.11to a particular place except as provided by the applicable apportionment formula. The 135.12provisions of this subdivision do not apply to business income subject to subdivision 5, 135.13income of an insurance company, or income of an investment company determined under 135.14section 290.36. 135.15(b) The term "unitary business" means business activities or operations which 135.16result in a flow of value between them. The term may be applied within a single legal 135.17entity or between multiple entities and without regard to whether each entity is a sole 135.18proprietorship, a corporation, a partnership or a trust. 135.19(c) Unity is presumed whenever there is unity of ownership, operation, and use, 135.20evidenced by centralized management or executive force, centralized purchasing, 135.21advertising, accounting, or other controlled interaction, but the absence of these 135.22centralized activities will not necessarily evidence a nonunitary business. Unity is also 135.23presumed when business activities or operations are of mutual benefit, dependent upon or 135.24contributory to one another, either individually or as a group. 135.25(d) Where a business operation conducted in Minnesota is owned by a business 135.26entity that carries on business activity outside the state different in kind from that 135.27conducted within this state, and the other business is conducted entirely outside the state, it 135.28is presumed that the two business operations are unitary in nature, interrelated, connected, 135.29and interdependent unless it can be shown to the contrary. 135.30(e) Unity of ownership is not deemed to new text begin does not new text end exist when a corporation is new text begin two or new text end 135.31 new text begin more corporations are new text end involved unless that corporation is a member of a group of two or 135.32more business entities and more than 50 percent of the voting stock of each member of 135.33the group new text begin corporation new text end is directly or indirectly owned by a common owner or by common 135.34owners, either corporate or noncorporate, or by one or more of the member corporations 136.1of the group. For this purpose, the term "voting stock" shall include membership interests 136.2of mutual insurance holding companies formed under section 66A.40. 136.3(f) The net income and apportionment factors under section 290.191 or 290.20 of 136.4foreign corporations and other foreign entities which are part of a unitary business shall not 136.5be included in the net income or the apportionment factors of the unitary business new text begin ; except new text end 136.6 new text begin that the income and apportionment factors of a foreign corporation, foreign partnership, or new text end 136.7 new text begin other foreign entity, that are included in the federal taxable income, as defined in section new text end 136.8 new text begin 63 of the Internal Revenue Code as amended through the date named in section 290.01, new text end 136.9 new text begin subdivision 19, of a domestic corporation, domestic entity, or individual must be included new text end 136.10 new text begin in determining net income and the factors to be used in the apportionment of net income new text end 136.11 new text begin pursuant to section 290.191 or 290.20 new text end . A foreign corporation or other foreign entity which 136.12is new text begin not part of a unitary business and which is new text end required to file a return under this chapter shall 136.13file on a separate return basis. The net income and apportionment factors under section 136.14 or of foreign operating corporations shall not be included in the net income 136.15or the apportionment factors of the unitary business except as provided in paragraph (g). 136.16(g) The adjusted net income of a foreign operating corporation shall be deemed to 136.17be paid as a dividend on the last day of its taxable year to each shareholder thereof, in 136.18proportion to each shareholder's ownership, with which such corporation is engaged in 136.19a unitary business. Such deemed dividend shall be treated as a dividend under section 136.20290.21, subdivision 4. 136.21Dividends actually paid by a foreign operating corporation to a corporate shareholder 136.22which is a member of the same unitary business as the foreign operating corporation shall 136.23be eliminated from the net income of the unitary business in preparing a combined report 136.24for the unitary business. The adjusted net income of a foreign operating corporation 136.25shall be its net income adjusted as follows: 136.26(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto 136.27Rico, or a United States possession or political subdivision of any of the foregoing shall 136.28be a deduction; and 136.29(2) the subtraction from federal taxable income for payments received from foreign 136.30corporations or foreign operating corporations under section 290.01, subdivision 19d, 136.31clause (10), shall not be allowed. 136.32If a foreign operating corporation incurs a net loss, neither income nor deduction from 136.33that corporation shall be included in determining the net income of the unitary business. 136.34(h) new text begin (g) new text end For purposes of determining the net income of a unitary business and the 136.35factors to be used in the apportionment of net income pursuant to section 290.191 or 136.36290.20 , there must be included only the income and apportionment factors of domestic 137.1corporations or other domestic entities other than foreign operating corporations that are 137.2determined to be part of the unitary business pursuant to this subdivision, notwithstanding 137.3that foreign corporations or other foreign entities might be included in the unitary 137.4business new text begin ; except that the income and apportionment factors of a foreign corporation, new text end 137.5 new text begin foreign partnership, or other foreign entity, that is included in the federal taxable income, new text end 137.6 new text begin as defined in section 63 of the Internal Revenue Code as amended through the date new text end 137.7 new text begin named in section 290.01, subdivision 19, of a domestic corporation, domestic entity, or new text end 137.8 new text begin individual must be included in determining net income and the factors to be used in the new text end 137.9 new text begin apportionment of net income pursuant to section 290.191 or 290.20 new text end . 137.10(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter 137.11that are connected with or allocable against dividends, deemed dividends described 137.12in paragraph (g), or royalties, fees, or other like income described in section 290.01, 137.13subdivision 19d , clause (10), shall not be disallowed. 137.14(j) new text begin (h) new text end Each corporation or other entity, except a sole proprietorship, that is part of 137.15a unitary business must file combined reports as the commissioner determines. On the 137.16reports, all intercompany transactions between entities included pursuant to paragraph (h) 137.17 new text begin (g) new text end must be eliminated and the entire net income of the unitary business determined in 137.18accordance with this subdivision is apportioned among the entities by using each entity's 137.19Minnesota factors for apportionment purposes in the numerators of the apportionment 137.20formula and the total factors for apportionment purposes of all entities included pursuant to 137.21paragraph (h) new text begin (g) new text end in the denominators of the apportionment formula. new text begin All sales of the unitary new text end 137.22 new text begin business made within this state pursuant to section 290.191 or 290.20 must be included new text end 137.23 new text begin on the combined report of a corporation or other entity that is a member of the unitary new text end 137.24 new text begin business and is subject to the jurisdiction of this state to impose tax under this chapter. new text end 137.25(k) new text begin (i) new text end If a corporation has been divested from a unitary business and is included in a 137.26combined report for a fractional part of the common accounting period of the combined 137.27report: 137.28(1) its income includable in the combined report is its income incurred for that part 137.29of the year determined by proration or separate accounting; and 137.30(2) its sales, property, and payroll included in the apportionment formula must 137.31be prorated or accounted for separately. 137.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 137.33 new text begin December 31, 2012. new text end 137.34    Sec. 36. Minnesota Statutes 2012, section 290.191, subdivision 5, is amended to read: 138.1    Subd. 5. Determination of sales factor. For purposes of this section, the following 138.2rules apply in determining the sales factor. 138.3    (a) The sales factor includes all sales, gross earnings, or receipts received in the 138.4ordinary course of the business, except that the following types of income are not included 138.5in the sales factor: 138.6    (1) interest; 138.7    (2) dividends; 138.8    (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code; 138.9    (4) sales of property used in the trade or business, except sales of leased property of 138.10a type which is regularly sold as well as leased; new text begin and new text end 138.11    (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue 138.12Code or sales of stock; and new text begin . new text end 138.13    (6) royalties, fees, or other like income of a type which qualify for a subtraction from 138.14federal taxable income under section 290.01, subdivision 19d, clause (10). 138.15    (b) Sales of tangible personal property are made within this state if the property is 138.16received by a purchaser at a point within this state, and the taxpayer is taxable in this state, 138.17regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination 138.18of the property. 138.19    (c) Tangible personal property delivered to a common or contract carrier or foreign 138.20vessel for delivery to a purchaser in another state or nation is a sale in that state or nation, 138.21regardless of f.o.b. point or other conditions of the sale. 138.22    (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine, 138.23fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is 138.24licensed by a state or political subdivision to resell this property only within the state of 138.25ultimate destination, the sale is made in that state. 138.26    (e) Sales made by or through a corporation that is qualified as a domestic 138.27international sales corporation under section 992 of the Internal Revenue Code are not 138.28considered to have been made within this state. 138.29    (f) Sales, rents, royalties, and other income in connection with real property is 138.30attributed to the state in which the property is located. 138.31    (g) Receipts from the lease or rental of tangible personal property, including finance 138.32leases and true leases, must be attributed to this state if the property is located in this 138.33state and to other states if the property is not located in this state. Receipts from the 138.34lease or rental of moving property including, but not limited to, motor vehicles, rolling 138.35stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts 139.1factor to the extent that the property is used in this state. The extent of the use of moving 139.2property is determined as follows: 139.3    (1) A motor vehicle is used wholly in the state in which it is registered. 139.4    (2) The extent that rolling stock is used in this state is determined by multiplying 139.5the receipts from the lease or rental of the rolling stock by a fraction, the numerator of 139.6which is the miles traveled within this state by the leased or rented rolling stock and the 139.7denominator of which is the total miles traveled by the leased or rented rolling stock. 139.8    (3) The extent that an aircraft is used in this state is determined by multiplying the 139.9receipts from the lease or rental of the aircraft by a fraction, the numerator of which is 139.10the number of landings of the aircraft in this state and the denominator of which is the 139.11total number of landings of the aircraft. 139.12    (4) The extent that a vessel, mobile equipment, or other mobile property is used in 139.13the state is determined by multiplying the receipts from the lease or rental of the property 139.14by a fraction, the numerator of which is the number of days during the taxable year the 139.15property was in this state and the denominator of which is the total days in the taxable year. 139.16    (h) Royalties and other income not described in paragraph (a), clause (6), received 139.17for the use of or for the privilege of using intangible property, including patents, 139.18know-how, formulas, designs, processes, patterns, copyrights, trade names, service names, 139.19franchises, licenses, contracts, customer lists, or similar items, must be attributed to the 139.20state in which the property is used by the purchaser. If the property is used in more 139.21than one state, the royalties or other income must be apportioned to this state pro rata 139.22according to the portion of use in this state. If the portion of use in this state cannot be 139.23determined, the royalties or other income must be excluded from both the numerator 139.24and the denominator. Intangible property is used in this state if the purchaser uses the 139.25intangible property or the rights therein in the regular course of its business operations in 139.26this state, regardless of the location of the purchaser's customers. 139.27    (i) Sales of intangible property are made within the state in which the property is 139.28used by the purchaser. If the property is used in more than one state, the sales must be 139.29apportioned to this state pro rata according to the portion of use in this state. If the 139.30portion of use in this state cannot be determined, the sale must be excluded from both the 139.31numerator and the denominator of the sales factor. Intangible property is used in this 139.32state if the purchaser used the intangible property in the regular course of its business 139.33operations in this state. 139.34    (j) Receipts from the performance of services must be attributed to the state where 139.35the services are received. For the purposes of this section, receipts from the performance 139.36of services provided to a corporation, partnership, or trust may only be attributed to a state 140.1where it has a fixed place of doing business. If the state where the services are received is 140.2not readily determinable or is a state where the corporation, partnership, or trust receiving 140.3the service does not have a fixed place of doing business, the services shall be deemed 140.4to be received at the location of the office of the customer from which the services were 140.5ordered in the regular course of the customer's trade or business. If the ordering office 140.6cannot be determined, the services shall be deemed to be received at the office of the 140.7customer to which the services are billed. 140.8    (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts 140.9from management, distribution, or administrative services performed by a corporation 140.10or trust for a fund of a corporation or trust regulated under United States Code, title 15, 140.11sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of 140.12the fund resides. Under this paragraph, receipts for services attributed to shareholders are 140.13determined on the basis of the ratio of: (1) the average of the outstanding shares in the 140.14fund owned by shareholders residing within Minnesota at the beginning and end of each 140.15year; and (2) the average of the total number of outstanding shares in the fund at the 140.16beginning and end of each year. Residence of the shareholder, in the case of an individual, 140.17is determined by the mailing address furnished by the shareholder to the fund. Residence 140.18of the shareholder, when the shares are held by an insurance company as a depositor for 140.19the insurance company policyholders, is the mailing address of the policyholders. In 140.20the case of an insurance company holding the shares as a depositor for the insurance 140.21company policyholders, if the mailing address of the policyholders cannot be determined 140.22by the taxpayer, the receipts must be excluded from both the numerator and denominator. 140.23Residence of other shareholders is the mailing address of the shareholder. 140.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 140.25 new text begin December 31, 2012. new text end 140.26    Sec. 37. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read: 140.27    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent 140.28of dividends received by a corporation during the taxable year from another corporation, 140.29in which the recipient owns 20 percent or more of the stock, by vote and value, not 140.30including stock described in section 1504(a)(4) of the Internal Revenue Code when the 140.31corporate stock with respect to which dividends are paid does not constitute the stock in 140.32trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not 140.33constitute property held by the taxpayer primarily for sale to customers in the ordinary 140.34course of the taxpayer's trade or business, or when the trade or business of the taxpayer 141.1does not consist principally of the holding of the stocks and the collection of the income 141.2and gains therefrom; and 141.3    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in 141.4an affiliated company transferred in an overall plan of reorganization and the dividend 141.5is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 141.6amended through December 31, 1989; 141.7    (ii) the remaining 20 percent of dividends if the dividends are received from a 141.8corporation which is subject to tax under section 290.36 and which is a member of an 141.9affiliated group of corporations as defined by the Internal Revenue Code and the dividend 141.10is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as 141.11amended through December 31, 1989, or is deducted under an election under section 141.12243(b) of the Internal Revenue Code; or 141.13    (iii) the remaining 20 percent of the dividends if the dividends are received from a 141.14property and casualty insurer as defined under section 60A.60, subdivision 8, which is a 141.15member of an affiliated group of corporations as defined by the Internal Revenue Code 141.16and either: (A) the dividend is eliminated in consolidation under Treasury Regulation 141.171.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted 141.18under an election under section 243(b) of the Internal Revenue Code. 141.19    (b) Seventy percent of dividends received by a corporation during the taxable year 141.20from another corporation in which the recipient owns less than 20 percent of the stock, 141.21by vote or value, not including stock described in section 1504(a)(4) of the Internal 141.22Revenue Code when the corporate stock with respect to which dividends are paid does not 141.23constitute the stock in trade of the taxpayer, or does not constitute property held by the 141.24taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or 141.25business, or when the trade or business of the taxpayer does not consist principally of the 141.26holding of the stocks and the collection of income and gain therefrom. 141.27    (c) The dividend deduction provided in this subdivision shall be allowed only with 141.28respect to dividends that are included in a corporation's Minnesota taxable net income 141.29for the taxable year. 141.30    The dividend deduction provided in this subdivision does not apply to a dividend 141.31from a corporation which, for the taxable year of the corporation in which the distribution 141.32is made or for the next preceding taxable year of the corporation, is a corporation exempt 141.33from tax under section 501 of the Internal Revenue Code. 141.34 new text begin The dividend deduction provided in this subdivision does not apply to a dividend new text end 141.35 new text begin received from a real estate investment trust as defined in section 856 of the Internal new text end 141.36 new text begin Revenue Code. new text end 142.1    The dividend deduction provided in this subdivision applies to the amount of 142.2regulated investment company dividends only to the extent determined under section 142.3854(b) of the Internal Revenue Code. 142.4    The dividend deduction provided in this subdivision shall not be allowed with 142.5respect to any dividend for which a deduction is not allowed under the provisions of 142.6section 246(c) of the Internal Revenue Code. 142.7    (d) If dividends received by a corporation that does not have nexus with Minnesota 142.8under the provisions of Public Law 86-272 are included as income on the return of 142.9an affiliated corporation permitted or required to file a combined report under section 142.10290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the 142.11determination as to whether the trade or business of the corporation consists principally 142.12of the holding of stocks and the collection of income and gains therefrom shall be made 142.13with reference to the trade or business of the affiliated corporation having a nexus with 142.14Minnesota. 142.15    (e) The deduction provided by this subdivision does not apply if the dividends are 142.16paid by a FSC as defined in section 922 of the Internal Revenue Code. 142.17    (f) If one or more of the members of the unitary group whose income is included on 142.18the combined report received a dividend, the deduction under this subdivision for each 142.19member of the unitary business required to file a return under this chapter is the product 142.20of: (1) 100 percent of the dividends received by members of the group; (2) the percentage 142.21allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business 142.22income apportionable to this state for the taxable year under section 290.191 or 290.20. 142.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 142.24 new text begin December 31, 2012. new text end 142.25    Sec. 38. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read: 142.26    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages 142.27is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year 142.28beginning July 1, regardless of the alcohol content of the product. Qualified brewers may 142.29take the credit on the 18th day of each month, but the total credit allowed may not exceed 142.30in any fiscal year the lesser of: 142.31    (1) the liability for tax; or 142.32    (2) $115,000. 142.33    For purposes of this subdivision, a "qualified brewer" means a brewer, whether or 142.34not located in this state, manufacturing less than 100,000 new text begin 250,000 new text end barrels of fermented 142.35malt beverages in the calendar year immediately preceding the calendar year for which 143.1the credit under this subdivision is claimed. In determining the number of barrels, all 143.2brands or labels of a brewer must be combined. All facilities for the manufacture of 143.3fermented malt beverages owned or controlled by the same person, corporation, or other 143.4entity must be treated as a single brewer. 143.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for determinations based on calendar new text end 143.6 new text begin year 2012 production and thereafter. new text end 143.7    Sec. 39. Minnesota Statutes 2012, section 298.01, subdivision 3b, is amended to read: 143.8    Subd. 3b. Deductions. (a) For purposes of determining taxable income under 143.9subdivision 3, the deductions from gross income include only those expenses necessary 143.10to convert raw ores to marketable quality. Such expenses include costs associated with 143.11refinement but do not include expenses such as transportation, stockpiling, marketing, or 143.12marine insurance that are incurred after marketable ores are produced, unless the expenses 143.13are included in gross income. The allowable deductions from a mine or plant that mines 143.14and produces more than one mineral, metal, or energy resource must be determined 143.15separately for the purposes of computing the deduction in section 290.01, subdivision 19c, 143.16clause (9). These deductions may be combined on one occupation tax return to arrive at 143.17the deduction from gross income for all production. 143.18(b) The provisions of section 290.01, subdivisions 19c, clauses (6) and (9), and 19d, 143.19clauses (7) and (11) new text begin (10) new text end , are not used to determine taxable income. 143.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 143.21 new text begin December 31, 2012. new text end 143.22    Sec. 40. Laws 2010, chapter 216, section 11, the effective date, is amended to read: 143.23EFFECTIVE DATE.This section is effective for taxable years beginning 143.24after December 31, 2009, for certified historic structures for which qualified costs of 143.25rehabilitation are first paid under construction contracts entered into after May 1, 2010 143.26 new text begin rehabilitation expenditures are first paid by the developer or taxpayer after May 1, 2010, new text end 143.27 new text begin for rehabilitation that occurs after May 1, 2010, provided that the application under new text end 143.28 new text begin subdivision 3 is submitted before the project is placed in service new text end . 143.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 143.30 new text begin and applies retroactively for taxable years beginning after December 31, 2009, and for new text end 143.31 new text begin certified historic structures placed in service after May 1, 2010, but the office may not new text end 143.32 new text begin issue certificates allowed under the change to this section until July 1, 2013. new text end 144.1    Sec. 41. new text begin CLOTHING SALES TAX CREDIT; TAX YEAR 2013. new text end 144.2 new text begin For tax year 2013 only, the credit calculated under Minnesota Statutes, section new text end 144.3 new text begin 290.0683, is the credit under Minnesota Statutes, section 290.0683, subdivision 2, after new text end 144.4 new text begin limitations imposed under Minnesota Statutes, section 290.0683, subdivision 3, multiplied new text end 144.5 new text begin by one-half. new text end 144.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 144.7 new text begin December 31, 2012. new text end 144.8    Sec. 42. new text begin REPEALER. new text end 144.9 new text begin Minnesota Statutes 2012, sections 290.01, subdivision 6b; and 290.0921, subdivision new text end 144.10 new text begin 7, new text end new text begin are repealed. new text end 144.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 144.12 new text begin December 31, 2012. new text end 144.13ARTICLE 6 144.14ESTATE TAXES 144.15    Section 1. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read: 144.16    Subd. 8. Definitions. (a) For purposes of this section, the following terms have the 144.17meanings given in this subdivision. 144.18(b) "Family member" means a family member as defined in section 2032A(e)(2) of 144.19the Internal Revenue Code new text begin , or a trust whose present beneficiaries are all family members new text end 144.20 new text begin as defined in section 2032A(e)(2) of the Internal Revenue Code new text end . 144.21(c) "Qualified heir" means a family member who acquired qualified property from 144.22 new text begin upon the death of new text end the decedent and satisfies the requirement under subdivision 9, clause 144.23(6) new text begin (7) new text end , or subdivision 10, clause (4) new text begin (5) new text end , for the property. 144.24(d) "Qualified property" means qualified small business property under subdivision 144.259 and qualified farm property under subdivision 10. 144.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for estates of decedents new text end 144.27 new text begin dying after June 30, 2011. new text end 144.28    Sec. 2. Minnesota Statutes 2012, section 291.03, subdivision 9, is amended to read: 144.29    Subd. 9. Qualified small business property. Property satisfying all of the following 144.30requirements is qualified small business property: 144.31(1) The value of the property was included in the federal adjusted taxable estate. 145.1(2) The property consists of the assets of a trade or business or shares of stock or 145.2other ownership interests in a corporation or other entity engaged in a trade or business. 145.3The decedent or the decedent's spouse must have materially participated in the trade or 145.4business within the meaning of section 469 of the Internal Revenue Code during the 145.5taxable year that ended before the date of the decedent's death. Shares of stock in a 145.6corporation or an ownership interest in another type of entity do not qualify under this 145.7subdivision if the shares or ownership interests are traded on a public stock exchange at 145.8any time during the three-year period ending on the decedent's date of death. new text begin For purposes new text end 145.9 new text begin of this subdivision, an ownership interest includes the interest the decedent is deemed to new text end 145.10 new text begin own under sections 2036, 2037, and 2038 of the Internal Revenue Code. new text end 145.11(3) new text begin During the taxable year that ended before the decedent's death, the trade or new text end 145.12 new text begin business must not have been a passive activity within the meaning of section 469(c) of the new text end 145.13 new text begin Internal Revenue Code, and the decedent or the decedent's spouse must have materially new text end 145.14 new text begin participated in the trade or business within the meaning of section 469(h) of the Internal new text end 145.15 new text begin Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other new text end 145.16 new text begin provision provided by United States Treasury Department regulation that substitutes new text end 145.17 new text begin material participation in prior taxable years for material participation in the taxable year new text end 145.18 new text begin that ended before the decedent's death. new text end 145.19 new text begin (4) new text end The gross annual sales of the trade or business were $10,000,000 or less for the 145.20last taxable year that ended before the date of the death of the decedent. 145.21(4) new text begin (5) new text end The property does not consist of cash or new text begin , new text end cash equivalents new text begin , publicly traded new text end 145.22 new text begin securities, or assets not used in the operation of the trade or business new text end . For property 145.23consisting of shares of stock or other ownership interests in an entity, the amount new text begin value new text end of 145.24cash or new text begin , new text end cash equivalents new text begin , publicly traded securities, or assets not used in the operation of new text end 145.25 new text begin the trade or business new text end held by the corporation or other entity must be deducted from the 145.26value of the property qualifying under this subdivision in proportion to the decedent's 145.27share of ownership of the entity on the date of death. 145.28(5) new text begin (6) new text end The decedent continuously owned the property new text begin , including property the new text end 145.29 new text begin decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue new text end 145.30 new text begin Code, new text end for the three-year period ending on the date of death of the decedent. new text begin In the case of new text end 145.31 new text begin a sole proprietor, if the property replaced similar property within the three-year period, new text end 145.32 new text begin the replacement property will be treated as having been owned for the three-year period new text end 145.33 new text begin ending on the date of death of the decedent. new text end 145.34(6) A family member continuously uses the property in the operation of the trade or 145.35business for three years following the date of death of the decedent. 146.1(7) new text begin For three years following the date of death of the decedent, the trade or business new text end 146.2 new text begin is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code, new text end 146.3 new text begin and a family member materially participates in the operation of the trade or business within new text end 146.4 new text begin the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3) new text end 146.5 new text begin of the Internal Revenue Code and any other provision provided by United States Treasury new text end 146.6 new text begin Department regulation that substitutes material participation in prior taxable years for new text end 146.7 new text begin material participation in the three years following the date of death of the decedent. new text end 146.8 new text begin (8) new text end The estate and the qualified heir elect to treat the property as qualified small 146.9business property and agree, in the form prescribed by the commissioner, to pay the 146.10recapture tax under subdivision 11, if applicable. 146.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for estates of decedents new text end 146.12 new text begin dying after June 30, 2011. new text end 146.13    Sec. 3. Minnesota Statutes 2012, section 291.03, subdivision 10, is amended to read: 146.14    Subd. 10. Qualified farm property. Property satisfying all of the following 146.15requirements is qualified farm property: 146.16(1) The value of the property was included in the federal adjusted taxable estate. 146.17(2) The property consists of a farm meeting the requirements of new text begin agricultural land as new text end 146.18 new text begin defined in section 500.24, subdivision 2, paragraph (g), and is owned by a person or entity new text end 146.19 new text begin that is either not subject to or is in compliance with new text end section 500.24, and was classified for 146.20property tax purposes as the homestead of the decedent or the decedent's spouse or both 146.21under section , and as class 2a property under section 273.13, subdivision 23. 146.22(3) new text begin For property taxes payable in the taxable year of the decedent's death, the new text end 146.23 new text begin decedent's interest in the property was classified as the homestead of the decedent, the new text end 146.24 new text begin decedent's spouse, or both under section 273.124 and as class 2a property under section new text end 146.25 new text begin 273.13, subdivision 23. new text end 146.26 new text begin (4) new text end The decedent continuously owned the property new text begin , including property the decedent new text end 146.27 new text begin is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, new text end for 146.28the three-year period ending on the date of death of the decedent new text begin either by ownership of new text end 146.29 new text begin the agricultural land or pursuant to holding an interest in an entity that is not subject to new text end 146.30 new text begin or is in compliance with section 500.24 new text end . 146.31(4) A family member continuously uses the property in the operation of the trade or 146.32business new text begin (5) The property is classified for property tax purposes as class 2a property under new text end 146.33 new text begin section 273.13, subdivision 23, new text end for three years following the date of death of the decedent. 147.1(5) new text begin (6) new text end The estate and the qualified heir elect to treat the property as qualified farm 147.2property and agree, in a form prescribed by the commissioner, to pay the recapture tax 147.3under subdivision 11, if applicable. 147.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for estates of decedents new text end 147.5 new text begin dying after June 30, 2011. new text end 147.6    Sec. 4. Minnesota Statutes 2012, section 291.03, subdivision 11, is amended to read: 147.7    Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and 147.8before the death of the qualified heir, the qualified heir disposes of any interest in the 147.9qualified property, other than by a disposition to a family member, or a family member 147.10ceases to use the qualified property which was acquired or passed from the decedent 147.11 new text begin satisfy the requirement under subdivision 9, clause (7); or 10, clause (5) new text end , an additional 147.12estate tax is imposed on the property. new text begin In the case of a sole proprietor, if the qualified heir new text end 147.13 new text begin replaces qualified small business property excluded under subdivision 9 with similar new text end 147.14 new text begin property, then the qualified heir will not be treated as having disposed of an interest in the new text end 147.15 new text begin qualified property. new text end 147.16(b) The amount of the additional tax equals the amount of the exclusion claimed by 147.17the estate under subdivision 8, paragraph (d), multiplied by 16 percent. 147.18(c) The additional tax under this subdivision is due on the day which is six months 147.19after the date of the disposition or cessation in paragraph (a). 147.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for estates of decedents new text end 147.21 new text begin dying after June 30, 2011. new text end 147.22ARTICLE 7 147.23SALES AND USE TAXES; LOCAL SALES TAXES 147.24    Section 1. Minnesota Statutes 2012, section 16C.03, subdivision 18, is amended to read: 147.25    Subd. 18. Contracts with foreign vendors. (a) The commissioner and other 147.26agencies to which this section applies and the legislative branch of government shall, 147.27subject to paragraph (d), cancel a contract for goods or services from a vendor or an 147.28affiliate of a vendor or suspend or debar a vendor or an affiliate of a vendor from future 147.29contracts upon notification from the commissioner of revenue that the vendor or an 147.30affiliate of the vendor has not registered to collect the sales and use tax imposed under 147.31chapter 297A on its sales in Minnesota or to a destination in Minnesota. This subdivision 147.32shall not apply to state colleges and universities, the courts, and any agency in the judicial 147.33branch of government. For purposes of this subdivision, the term "affiliate" means any 148.1person or entity that is controlled by, or is under common control of, a vendor through 148.2stock ownership or other affiliation. 148.3    (b) Beginning January 1, 2006, Each vendor or affiliate of a vendor selling goods or 148.4services, subject to tax under chapter 297A, to an agency or the legislature must new text begin register new text end 148.5 new text begin with the commissioner of revenue as provided in section 297A.83, and comply with all legal new text end 148.6 new text begin requirements imposed on a person maintaining a place of business in this state, including new text end 148.7 new text begin the requirement to collect and remit sales and use tax on all taxable sales to customers in new text end 148.8 new text begin the state, and new text end provide its Minnesota sales and use tax business identification number, upon 148.9request, to show that the vendor is registered to collect Minnesota sales or use tax. 148.10    (c) The commissioner of revenue shall periodically provide to the commissioner 148.11and the legislative branch a list of vendors who have not registered to collect Minnesota 148.12sales and use tax and who are subject to being suspended or debarred as vendors or having 148.13their contracts canceled. 148.14    (d) The provisions of this subdivision may be waived by the commissioner or the 148.15legislative branch when the vendor is the single source of such goods or services, in the 148.16event of an emergency, or when it is in the best interests of the state as determined by the 148.17commissioner in consultation with the commissioner of revenue. Such consultation is not 148.18a disclosure violation under chapter 270B. 148.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 148.20 new text begin June 30, 2013. new text end 148.21    Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read: 148.22    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not 148.23limited to, each of the transactions listed in this subdivision. new text begin In applying the provisions new text end 148.24 new text begin of this chapter, the terms "tangible personal property" and "retail sale" include taxable new text end 148.25 new text begin services listed in clause (6), items (i) to (vi) and (viii), and the provision of these taxable new text end 148.26 new text begin services, unless specifically provided otherwise. Services performed by an employee new text end 148.27 new text begin for an employer are not taxable. Services performed by a partnership or association for new text end 148.28 new text begin another partnership or association are not taxable if one of the entities owns or controls new text end 148.29 new text begin more than 80 percent of the voting power of the equity interest in the other entity. Services new text end 148.30 new text begin performed between members of an affiliated group of corporations are not taxable. For new text end 148.31 new text begin purposes of the preceding sentence, "affiliated group of corporations" means those entities new text end 148.32 new text begin that would be classified as members of an affiliated group as defined under United States new text end 148.33 new text begin Code, title 26, section 1504, disregarding the exclusions in section 1504(b). new text end 148.34    (b) Sale and purchase include: 149.1    (1) any transfer of title or possession, or both, of tangible personal property, whether 149.2absolutely or conditionally, for a consideration in money or by exchange or barter; and 149.3    (2) the leasing of or the granting of a license to use or consume, for a consideration 149.4in money or by exchange or barter, tangible personal property, other than a manufactured 149.5home used for residential purposes for a continuous period of 30 days or more. 149.6    (c) Sale and purchase include the production, fabrication, printing, or processing of 149.7tangible personal property for a consideration for consumers who furnish either directly or 149.8indirectly the materials used in the production, fabrication, printing, or processing. 149.9    (d) Sale and purchase include the preparing for a consideration of food. 149.10Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 149.11to, the following: 149.12    (1) prepared food sold by the retailer; 149.13    (2) soft drinks; 149.14    (3) candy; 149.15    (4) dietary supplements; and 149.16    (5) all food sold through vending machines. 149.17    (e) A sale and a purchase includes the furnishing for a consideration of electricity, 149.18gas, water, or steam for use or consumption within this state. 149.19    (f) A sale and a purchase includes new text begin : new text end 149.20     new text begin (1) new text end the transfer for a consideration of prewritten computer software whether 149.21delivered electronically, by load and leave, or otherwise. new text begin ; and new text end 149.22     new text begin (2) the receipt of custom computer software whether delivered electronically, by new text end 149.23 new text begin load and leave, or otherwise. new text end 149.24    (g) A sale and a purchase includes the furnishing for a consideration of the following 149.25services: 149.26    (1) the privilege of admission to places of amusement, new text begin exhibitions, new text end recreational 149.27areas, or athletic events, new text begin including the rental of box seats and suites at professional athletic new text end 149.28 new text begin events, new text end and the making available of amusement devices, tanning facilities, reducing salons, 149.29steam baths, Turkish baths, health clubs, and spas or athletic facilities new text begin . "Exhibitions" new text end 149.30 new text begin means trade shows, boat shows, home shows, garden shows, and other similar events new text end ; 149.31    (2) lodging and related services by a hotel, rooming house, resort, campground, 149.32motel, or trailer camp, including furnishing the guest of the facility with access to 149.33telecommunication services, and the granting of any similar license to use real property in 149.34a specific facility, other than the renting or leasing of it for a continuous period of 30 days 149.35or more under an enforceable written agreement that may not be terminated without prior 150.1notice and including accommodations intermediary services provided in connection with 150.2other services provided under this clause; 150.3    (3) nonresidential parking services, whether on a contractual, hourly, or other 150.4periodic basis, except for parking at a meter; 150.5    (4) the granting of membership in a club, association, or other organization if: 150.6    (i) the club, association, or other organization makes available for the use of its 150.7members sports and athletic facilities, without regard to whether a separate charge is 150.8assessed for use of the facilities; and 150.9    (ii) use of the sports and athletic facility is not made available to the general public 150.10on the same basis as it is made available to members. 150.11Granting of membership means both onetime initiation fees and periodic membership 150.12dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 150.13squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 150.14swimming pools; and other similar athletic or sports facilities; 150.15    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate 150.16material used in road construction; and delivery of concrete block by a third party if the 150.17delivery would be subject to the sales tax if provided by the seller of the concrete block new text begin . new text end 150.18 new text begin For purposes of this clause, "road construction" means construction of: new text end 150.19     new text begin (i) public roads; new text end 150.20     new text begin (ii) cartways; and new text end 150.21     new text begin (iii) private roads in townships located outside of the seven-county metropolitan area new text end 150.22 new text begin up to the point of the emergency response location sign new text end ; and 150.23    (6) services as provided in this clause: 150.24    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 150.25and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 150.26drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 150.27include services provided by coin operated facilities operated by the customer; 150.28    (ii) motor vehicle washing, waxing, and cleaning services, including services 150.29provided by coin operated facilities operated by the customer, and rustproofing, 150.30undercoating, and towing of motor vehicles; 150.31    (iii) building and residential cleaning, maintenance, and disinfecting services and 150.32pest control and exterminating services; 150.33    (iv) detective, security, burglar, fire alarm, and armored car services; but not 150.34including services performed within the jurisdiction they serve by off-duty licensed peace 150.35officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 150.36organization new text begin or any organization at the direction of a county new text end for monitoring and electronic 151.1surveillance of persons placed on in-home detention pursuant to court order or under the 151.2direction of the Minnesota Department of Corrections; 151.3    (v) pet grooming services; 151.4    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 151.5and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 151.6plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 151.7clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 151.8public utility lines. Services performed under a construction contract for the installation of 151.9shrubbery, plants, sod, trees, bushes, and similar items are not taxable; 151.10    (vii) massages, except when provided by a licensed health care facility or 151.11professional or upon written referral from a licensed health care facility or professional for 151.12treatment of illness, injury, or disease; and 151.13    (viii) the furnishing of lodging, board, and care services for animals in kennels and 151.14other similar arrangements, but excluding veterinary and horse boarding services. 151.15    In applying the provisions of this chapter, the terms "tangible personal property" 151.16and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 151.17and the provision of these taxable services, unless specifically provided otherwise. 151.18Services performed by an employee for an employer are not taxable. Services performed 151.19by a partnership or association for another partnership or association are not taxable if 151.20one of the entities owns or controls more than 80 percent of the voting power of the 151.21equity interest in the other entity. Services performed between members of an affiliated 151.22group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 151.23group of corporations" means those entities that would be classified as members of an 151.24affiliated group as defined under United States Code, title 26, section 1504, disregarding 151.25the exclusions in section 1504(b). 151.26    For purposes of clause (5), "road construction" means construction of (1) public 151.27roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 151.28metropolitan area up to the point of the emergency response location sign. 151.29    (h) A sale and a purchase includes the furnishing for a consideration of tangible 151.30personal property or taxable services by the United States or any of its agencies or 151.31instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 151.32subdivisions. 151.33    (i) A sale and a purchase includes the furnishing for a consideration of 151.34telecommunications services, ancillary services associated with telecommunication 151.35services, cable new text begin and pay new text end television services, and direct satellite services. Telecommunication 151.36services include, but are not limited to, the following services, as defined in section 152.1297A.669 : air-to-ground radiotelephone service, mobile telecommunication service, 152.2postpaid calling service, prepaid calling service, prepaid wireless calling service, and 152.3private communication services. The services in this paragraph are taxed to the extent 152.4allowed under federal law. 152.5    (j) A sale and a purchase includes the furnishing for a consideration of installation if 152.6the installation charges would be subject to the sales tax if the installation were provided 152.7by the seller of the item being installed. 152.8    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 152.9to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 152.10the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 152.1159B.02, subdivision 11. 152.12     new text begin (l) A sale and a purchase includes granting the right for a consideration to use new text end 152.13 new text begin specified digital products or other digital products on a temporary or permanent basis and new text end 152.14 new text begin regardless of whether the purchaser is required to make continued payments for such new text end 152.15 new text begin right. Wherever the term "tangible personal property" is used in this chapter, other than in new text end 152.16 new text begin subdivisions 10 and 38, the provisions also apply to specified digital products, or other new text end 152.17 new text begin digital products, unless specifically provided otherwise or the context indicates otherwise. new text end 152.18 new text begin (m) A sale and purchase includes: new text end 152.19 new text begin (1) any service performed for the care, cleansing, beautification, or alteration of the new text end 152.20 new text begin appearance of the body, skin, nails, or hair, or in the enhancement of personal relaxation, new text end 152.21 new text begin appearance, or health, but excluding mortuary services; new text end 152.22 new text begin (2) repair labor for: new text end 152.23 new text begin (i) farm machinery as defined under section 297A.61, subdivision 12; new text end 152.24 new text begin (ii) motor vehicles as defined under section 297B.01, subdivision 11, except for new text end 152.25 new text begin motor vehicles sold at wholesale auction at an auto auction facility; and new text end 152.26 new text begin (iii) any other tangible personal property; new text end 152.27 new text begin (3) warehousing or storage services for tangible personal property excluding storage new text end 152.28 new text begin of farm products, refrigerated food, and electronic data; and new text end 152.29 new text begin (4) the furnishing for consideration of documents prepared in connection with any new text end 152.30 new text begin legal proceeding, including a trial hearing, deposition, arbitration, or mediation, except new text end 152.31 new text begin for such documents prepared for a public defender or a public defender corporation new text end 152.32 new text begin under chapter 611. new text end 152.33 new text begin (n) A sale and purchase also is the personal services of event planning, dating new text end 152.34 new text begin services, personal shopping, personal concierge services, or personal or household new text end 152.35 new text begin organizing services. new text end 153.1 new text begin (o) In applying the provisions of this chapter, the terms "tangible personal property" new text end 153.2 new text begin and "retail sale" include taxable services listed in paragraph (g), clause (6), items (i) to (vi) new text end 153.3 new text begin and (viii), and paragraphs (m) and (n), and the provision of these taxable services, unless new text end 153.4 new text begin specifically provided otherwise. new text end 153.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 153.6 new text begin June 30, 2013. new text end 153.7    Sec. 3. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read: 153.8    Subd. 4. Retail sale. (a) A "retail sale" means new text begin : new text end 153.9     new text begin (1) new text end any sale, lease, or rental new text begin of tangible personal property new text end for any purpose, other than 153.10resale, sublease, or subrent of items by the purchaser in the normal course of business 153.11as defined in subdivision 21 new text begin ; and new text end 153.12     new text begin (2) any sale of a service enumerated in subdivision 3, for any purpose other than new text end 153.13 new text begin resale by the purchaser in the normal course of business as defined in subdivision 21 new text end . 153.14    (b) A sale of property used by the owner only by leasing it to others or by holding it 153.15in an effort to lease it, and put to no use by the owner other than resale after the lease or 153.16effort to lease, is a sale of property for resale. 153.17    (c) A sale of master computer software that is purchased and used to make copies for 153.18sale or lease is a sale of property for resale. 153.19    (d) A sale of building materials, supplies, and equipment to owners, contractors, 153.20subcontractors, or builders for the erection of buildings or the alteration, repair, or 153.21improvement of real property is a retail sale in whatever quantity sold, whether the sale is 153.22for purposes of resale in the form of real property or otherwise. 153.23    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides 153.24for installation of the floor covering is a retail sale and not a sale for resale since a sale of 153.25floor covering which includes installation is a contract for the improvement of real property. 153.26    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides 153.27for installation of the items is a retail sale and not a sale for resale since a sale of 153.28shrubbery, plants, sod, trees, and similar items that includes installation is a contract for 153.29the improvement of real property. 153.30    (g) A sale of tangible personal property that is awarded as prizes is a retail sale and 153.31is not considered a sale of property for resale. 153.32    (h) A sale of tangible personal property utilized or employed in the furnishing or 153.33providing of services under subdivision 3, paragraph (g), clause (1), including, but not 153.34limited to, property given as promotional items, is a retail sale and is not considered a 153.35sale of property for resale. 154.1    (i) A sale of tangible personal property used in conducting lawful gambling under 154.2chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property 154.3given as promotional items, is a retail sale and is not considered a sale of property for resale. 154.4    (j) A sale of machines, equipment, or devices that are used to furnish, provide, or 154.5dispense goods or services, including, but not limited to, coin-operated devices, is a retail 154.6sale and is not considered a sale of property for resale. 154.7    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease 154.8payment becomes due under the terms of the agreement or the trade practices of the 154.9lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01, 154.10subdivision 11 , but excluding vehicles with a manufacturer's gross vehicle weight rating 154.11greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time 154.12the lease is executed. 154.13    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of 154.14title or possession of the tangible personal property. 154.15    (m) A sale of a bundled transaction in which one or more of the products included 154.16in the bundle is a taxable product is a retail sale, except that if one of the products 154.17is a telecommunication service, ancillary service, Internet access, or audio or video 154.18programming service, and the seller has maintained books and records identifying through 154.19reasonable and verifiable standards the portions of the price that are attributable to the 154.20distinct and separately identifiable products, then the products are not considered part of a 154.21bundled transaction. For purposes of this paragraph: 154.22    (1) the books and records maintained by the seller must be maintained in the regular 154.23course of business, and do not include books and records created and maintained by the 154.24seller primarily for tax purposes; 154.25    (2) books and records maintained in the regular course of business include, but are 154.26not limited to, financial statements, general ledgers, invoicing and billing systems and 154.27reports, and reports for regulatory tariffs and other regulatory matters; and 154.28    (3) books and records are maintained primarily for tax purposes when the books 154.29and records identify taxable and nontaxable portions of the price, but the seller maintains 154.30other books and records that identify different prices attributable to the distinct products 154.31included in the same bundled transaction. 154.32 new text begin (n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or new text end 154.33 new text begin body shop business is a retail sale and the sales tax is imposed on the gross receipts from the new text end 154.34 new text begin retail sale of the paint and materials. The motor vehicle repair or body shop that purchases new text end 154.35 new text begin motor vehicle repair paint and motor vehicle repair materials for resale must either: new text end 155.1 new text begin (1) separately state each item of paint and each item of materials, and the sales price new text end 155.2 new text begin of each, on the invoice to the purchaser; or new text end 155.3 new text begin (2) in order to calculate the sales price of the paint and materials, use a method new text end 155.4 new text begin which estimates the amount and monetary value of the paint and materials used in new text end 155.5 new text begin the repair of the motor vehicle by multiplying the number of labor hours by a rate of new text end 155.6 new text begin consideration for the paint and materials used in the repair of the motor vehicle following new text end 155.7 new text begin industry standard practices that fairly calculate the gross receipts from the retail sale of new text end 155.8 new text begin the motor vehicle repair paint and motor vehicle repair materials. An industry standard new text end 155.9 new text begin practice fairly calculates the gross receipts if the sales price of the paint and materials used new text end 155.10 new text begin or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid new text end 155.11 new text begin by the motor vehicle repair or body shop business. Under clause (1), the invoice must new text end 155.12 new text begin either separately state the "paint and materials" as a single taxable item, or separately state new text end 155.13 new text begin "paint" as a taxable item and "materials" as a taxable item. This clause does not apply to new text end 155.14 new text begin wholesale transactions at an auto auction facility. new text end 155.15     new text begin (o) A sale of specified digital products or other digital products to an end user with new text end 155.16 new text begin or without rights of permanent use and regardless of whether rights of use are conditioned new text end 155.17 new text begin upon continued payment by the purchaser is a retail sale. When a digital code has been new text end 155.18 new text begin purchased that relates to specified digital products or other digital products, the subsequent new text end 155.19 new text begin receipt of or access to the related specified digital products or other digital products new text end 155.20 new text begin is not a retail sale. new text end 155.21     new text begin (p) A payment made to an electric cooperative or public utility for contribution in new text end 155.22 new text begin aid of construction is a contract for improvement to real property and is not a retail sale. new text end 155.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 155.24 new text begin June 30, 2013. new text end 155.25    Sec. 4. Minnesota Statutes 2012, section 297A.61, subdivision 10, is amended to read: 155.26    Subd. 10. Tangible personal property. (a) "Tangible personal property" means 155.27personal property that can be seen, weighed, measured, felt, or touched, or that is in any 155.28other manner perceptible to the senses. "Tangible personal property" includes, but is not 155.29limited to, electricity, water, gas, steam, and prewritten computer software. 155.30    (b) Tangible personal property does not include: 155.31    (1) large ponderous machinery and equipment used in a business or production 155.32activity which at common law would be considered to be real property; 155.33    (2) property which is subject to an ad valorem property tax; 155.34    (3) property described in section 272.02, subdivision 9, clauses (a) to (d); and 155.35    (4) property described in section 272.03, subdivision 2, clauses (3) and (5). new text begin ; and new text end 156.1 new text begin (5) specified digital products, or other digital products, transferred electronically, new text end 156.2 new text begin except that prewritten computer software delivered electronically is tangible personal new text end 156.3 new text begin property. new text end 156.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 156.5 new text begin June 30, 2013. new text end 156.6    Sec. 5. Minnesota Statutes 2012, section 297A.61, subdivision 17a, is amended to read: 156.7    Subd. 17a. Delivered electronically. "Delivered electronically" means delivered 156.8to the purchaser by means other than tangible storage media new text begin and, unless the context new text end 156.9 new text begin indicates otherwise, applies to the delivery of computer software. Computer software is new text end 156.10 new text begin not considered delivered electronically to a purchaser simply because the purchaser has new text end 156.11 new text begin access to the product new text end . 156.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases the day new text end 156.13 new text begin following final enactment. new text end 156.14    Sec. 6. Minnesota Statutes 2012, section 297A.61, subdivision 25, is amended to read: 156.15    Subd. 25. Cable new text begin Pay new text end television service. "Cable new text begin Pay new text end television service" means 156.16the transmission of video, audio, or other programming service to purchasers, and the 156.17subscriber interaction, if any, required for the selection or use of the programming service, 156.18regardless of whether the programming is transmitted over facilities owned or operated 156.19by the cable service provider or over facilities owned or operated by one or more dealers 156.20of communications services. The term includes point-to-multipoint distribution new text begin direct to new text end 156.21 new text begin home satellite new text end services by which programming is transmitted or broadcast by microwave 156.22or other equipment directly to the subscriber's premises new text begin , or any similar or comparable new text end 156.23 new text begin method of service new text end . The term includes basic, extended, premium, new text begin all programming services, new text end 156.24 new text begin including subscriptions, digital video recorders, new text end pay-per-view, digital, and music services. 156.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 156.26 new text begin June 30, 2013. new text end 156.27    Sec. 7. Minnesota Statutes 2012, section 297A.61, subdivision 38, is amended to read: 156.28    Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale 156.29of two or more products when the products are otherwise distinct and identifiable, and 156.30the products are sold for one nonitemized price. As used in this subdivision, "product" 156.31includes tangible personal property, services, intangibles, and digital goods new text begin , including new text end 156.32 new text begin specified digital products or other digital products new text end , but does not include real property or 157.1services to real property. A bundled transaction does not include the sale of any products 157.2in which the sales price varies, or is negotiable, based on the selection by the purchaser of 157.3the products included in the transaction. 157.4    (b) For purposes of this subdivision, "distinct and identifiable" products does not 157.5include: 157.6    (1) packaging and other materials, such as containers, boxes, sacks, bags, and 157.7bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the 157.8products and are incidental or immaterial to the retail sale. Examples of packaging that are 157.9incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags, 157.10and express delivery envelopes and boxes; 157.11    (2) a promotional product provided free of charge with the required purchase of 157.12another product. A promotional product is provided free of charge if the sales price of 157.13another product, which is required to be purchased in order to receive the promotional 157.14product, does not vary depending on the inclusion of the promotional product; and 157.15    (3) items included in the definition of sales price. 157.16    (c) For purposes of this subdivision, the term "one nonitemized price" does not 157.17include a price that is separately identified by product on binding sales or other supporting 157.18sales-related documentation made available to the customer in paper or electronic form 157.19including but not limited to an invoice, bill of sale, receipt, contract, service agreement, 157.20lease agreement, periodic notice of rates and services, rate card, or price list. 157.21    (d) A transaction that otherwise meets the definition of a bundled transaction is 157.22not a bundled transaction if it is: 157.23    (1) the retail sale of tangible personal property and a service and the tangible 157.24personal property is essential to the use of the service, and is provided exclusively in 157.25connection with the service, and the true object of the transaction is the service; 157.26    (2) the retail sale of services if one service is provided that is essential to the use or 157.27receipt of a second service and the first service is provided exclusively in connection with 157.28the second service and the true object of the transaction is the second service; 157.29    (3) a transaction that includes taxable products and nontaxable products and the 157.30purchase price or sales price of the taxable products is de minimis; or 157.31    (4) the retail sale of exempt tangible personal property and taxable tangible personal 157.32property if: 157.33    (i) the transaction includes food and food ingredients, drugs, durable medical 157.34equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices, 157.35or medical supplies; and 158.1    (ii) the seller's purchase price or sales price of the taxable tangible personal property is 158.250 percent or less of the total purchase price or sales price of the bundled tangible personal 158.3property. Sellers must not use a combination of the purchase price and sales price of the 158.4tangible personal property when making the 50 percent determination for a transaction. 158.5    (e) For purposes of this subdivision, "purchase price" means the measure subject to 158.6use tax on purchases made by the seller, and "de minimis" means that the seller's purchase 158.7price or sales price of the taxable products is ten percent or less of the total purchase 158.8price or sales price of the bundled products. Sellers shall use either the purchase price 158.9or the sales price of the products to determine if the taxable products are de minimis. 158.10Sellers must not use a combination of the purchase price and sales price of the products 158.11to determine if the taxable products are de minimis. Sellers shall use the full term of a 158.12service contract to determine if the taxable products are de minimis. 158.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 158.14 new text begin June 30, 2013. new text end 158.15    Sec. 8. Minnesota Statutes 2012, section 297A.61, subdivision 45, is amended to read: 158.16    Subd. 45. Ring tone. "Ring tone" means a digitized sound file that is downloaded 158.17onto a device and that may be used to alert the customer of a telecommunication service 158.18 with respect to a communication. new text begin A ring tone does not include ring back tones or other new text end 158.19 new text begin digital audio files that are not stored on the purchaser's communication device. new text end 158.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 158.21 new text begin June 30, 2013. new text end 158.22    Sec. 9. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision 158.23to read: 158.24     new text begin Subd. 49. new text end new text begin Motor vehicle repair paint and motor vehicle repair materials. new text end 158.25 new text begin "Motor vehicle repair paint" means a substance composed of solid matter suspended in a new text end 158.26 new text begin liquid medium and applied as a protective or decorative coating to the surface of a motor new text end 158.27 new text begin vehicle in order to restore the motor vehicle to its original condition, and includes primer, new text end 158.28 new text begin body paint, clear coat, and paint thinner used to paint motor vehicles, as defined in section new text end 158.29 new text begin 297B.01. "Motor vehicle repair materials" means items, other than motor vehicle repair new text end 158.30 new text begin paint or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed new text end 158.31 new text begin in repairing the motor vehicle at retail, and include abrasives, battery water, body filler or new text end 158.32 new text begin putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing new text end 158.33 new text begin compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape, new text end 159.1 new text begin oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads, new text end 159.2 new text begin sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor new text end 159.3 new text begin vehicle repair materials do not include items that are not used directly on the motor vehicle, new text end 159.4 new text begin such as floor dry that is used to clean the shop, or cleaning compounds and rags that are new text end 159.5 new text begin used to clean tools, equipment, or the shop and are not used to clean the motor vehicle. new text end 159.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 159.7 new text begin June 30, 2013. new text end 159.8    Sec. 10. Minnesota Statutes 2012, section 297A.61, is amended by adding a 159.9subdivision to read: 159.10     new text begin Subd. 50. new text end new text begin Digital audio works. new text end new text begin "Digital audio works" means works that result from new text end 159.11 new text begin a fixation of a series of musical, spoken, or other sounds, that are transferred electronically. new text end 159.12 new text begin Digital audio works includes such items as the following which may either be prerecorded new text end 159.13 new text begin or live: songs, music, readings of books or other written materials, speeches, ring tones, or new text end 159.14 new text begin other sound recordings. Digital audio works does not include audio greeting cards sent by new text end 159.15 new text begin electronic mail. Unless the context provides otherwise, in this chapter digital audio works new text end 159.16 new text begin includes the digital code, or a subscription to or access to a digital code, for receiving, new text end 159.17 new text begin accessing, or otherwise obtaining digital audio works. new text end 159.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 159.19 new text begin June 30, 2013. new text end 159.20    Sec. 11. Minnesota Statutes 2012, section 297A.61, is amended by adding a 159.21subdivision to read: 159.22     new text begin Subd. 51. new text end new text begin Digital audiovisual works. new text end new text begin "Digital audiovisual works" means a series new text end 159.23 new text begin of related images which, when shown in succession, impart an impression of motion, new text end 159.24 new text begin together with accompanying sounds, if any, that are transferred electronically. Digital new text end 159.25 new text begin audiovisual works includes such items as motion pictures, movies, musical videos, news new text end 159.26 new text begin and entertainment, and live events. Digital audiovisual works does not include video new text end 159.27 new text begin greeting cards sent by electronic mail. Unless the context provides otherwise, in this new text end 159.28 new text begin chapter digital audiovisual works includes the digital code, or a subscription to or access to new text end 159.29 new text begin a digital code, for receiving, accessing, or otherwise obtaining digital audiovisual works. new text end 159.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 159.31 new text begin June 30, 2013. new text end 160.1    Sec. 12. Minnesota Statutes 2012, section 297A.61, is amended by adding a 160.2subdivision to read: 160.3     new text begin Subd. 52. new text end new text begin Digital books. new text end new text begin "Digital books" means any literary works, other than new text end 160.4 new text begin digital audiovisual works or digital audio works, expressed in words, numbers, or other new text end 160.5 new text begin verbal or numerical symbols or indicia so long as the product is generally recognized in new text end 160.6 new text begin the ordinary and usual sense as a "book." It includes works of fiction and nonfiction and new text end 160.7 new text begin short stories. It does not include periodicals, magazines, newspapers, or other news or new text end 160.8 new text begin information products, chat rooms, or weblogs. Unless the context provides otherwise, in new text end 160.9 new text begin this chapter digital books includes the digital code, or a subscription to or access to a new text end 160.10 new text begin digital code, for receiving, accessing, or otherwise obtaining digital books. new text end 160.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 160.12 new text begin June 30, 2013. new text end 160.13    Sec. 13. Minnesota Statutes 2012, section 297A.61, is amended by adding a 160.14subdivision to read: 160.15     new text begin Subd. 53. new text end new text begin Digital code. new text end new text begin "Digital code" means a code which provides a purchaser new text end 160.16 new text begin with a right to obtain one or more specified digital products or other digital products. new text end 160.17 new text begin A digital code may be transferred electronically, such as through electronic mail, or it new text end 160.18 new text begin may be transferred on a tangible medium, such as on a plastic card, a piece of paper or new text end 160.19 new text begin invoice, or imprinted on another product. A digital code is not a code that represents a new text end 160.20 new text begin stored monetary value that is deducted from a total as it is used by the purchaser, and it new text end 160.21 new text begin is not a code that represents a redeemable card, gift card, or gift certificate that entitles new text end 160.22 new text begin the holder to select a digital product of an indicated cash value. The end user of a digital new text end 160.23 new text begin code is any purchaser except one who receives the contractual right to redistribute a digital new text end 160.24 new text begin product which is the subject of the transaction. new text end 160.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 160.26 new text begin June 30, 2013. new text end 160.27    Sec. 14. Minnesota Statutes 2012, section 297A.61, is amended by adding a 160.28subdivision to read: 160.29     new text begin Subd. 54. new text end new text begin Other digital products. new text end new text begin "Other digital products" means the following new text end 160.30 new text begin items when transferred electronically: new text end 160.31 new text begin (1) greeting cards; new text end 160.32 new text begin (2) finished artwork available for reproduction, display, or similar purposes; new text end 160.33 new text begin (3) video or electronic games; new text end 161.1 new text begin (4) periodicals; new text end 161.2 new text begin (5) magazines; and new text end 161.3 new text begin (6) other news or information products, excluding newspapers. new text end 161.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 161.5 new text begin June 30, 2013. new text end 161.6    Sec. 15. Minnesota Statutes 2012, section 297A.61, is amended by adding a 161.7subdivision to read: 161.8     new text begin Subd. 55. new text end new text begin Specified digital products. new text end new text begin "Specified digital products" means digital new text end 161.9 new text begin audio works, digital audiovisual works, and digital books that are transferred electronically new text end 161.10 new text begin to a customer. new text end 161.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 161.12 new text begin June 30, 2013. new text end 161.13    Sec. 16. Minnesota Statutes 2012, section 297A.61, is amended by adding a 161.14subdivision to read: 161.15     new text begin Subd. 56. new text end new text begin Transferred electronically. new text end new text begin "Transferred electronically" means obtained new text end 161.16 new text begin by the purchaser by means other than tangible storage media. For purposes of this new text end 161.17 new text begin subdivision, it is not necessary that a copy of the product be physically transferred to new text end 161.18 new text begin the purchaser. A product will be considered to have been transferred electronically to a new text end 161.19 new text begin purchaser if the purchaser has access to the product. new text end 161.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 161.21 new text begin June 30, 2013. new text end 161.22    Sec. 17. Minnesota Statutes 2012, section 297A.62, subdivision 1, is amended to read: 161.23    Subdivision 1. Generally. Except as otherwise provided in subdivision 3 or in this 161.24chapter, a sales tax of 6.5 new text begin 5.675 new text end percent is imposed on the gross receipts from retail sales 161.25as defined in section 297A.61, subdivision 4, made in this state or to a destination in this 161.26state by a person who is required to have or voluntarily obtains a permit under section 161.27297A.83, subdivision 1 . 161.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 161.29 new text begin June 30, 2013. new text end 161.30    Sec. 18. Minnesota Statutes 2012, section 297A.62, subdivision 1a, is amended to read: 162.1    Subd. 1a. Constitutionally required sales tax increase. Except as otherwise 162.2provided in subdivision 3 or in this chapter, an additional sales tax of 0.375 new text begin 0.325 new text end percent, 162.3as required under the Minnesota Constitution, article XI, section 15, is imposed on the gross 162.4receipts from retail sales as defined in section 297A.61, subdivision 4, made in this state or 162.5to a destination in this state by a person who is required to have or voluntarily obtains a 162.6permit under section 297A.83, subdivision 1. This additional tax expires July 1, 2034. 162.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 162.8 new text begin June 30, 2013. new text end 162.9    Sec. 19. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read: 162.10    Subdivision 1. Tax imposed. A tax is imposed on the lease or rental in this state 162.11for not more than 28 days of a passenger automobile as defined in section 168.002, 162.12subdivision 24 , a van as defined in section 168.002, subdivision 40, or a pickup truck as 162.13defined in section 168.002, subdivision 26. The rate of tax is 6.2 new text begin 9.2 new text end percent of the sales 162.14price. The tax applies whether or not the vehicle is licensed in the state. 162.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 162.16 new text begin June 30, 2013. new text end 162.17    Sec. 20. Minnesota Statutes 2012, section 297A.65, is amended to read: 162.18297A.65 LOTTERY TICKETS; IN LIEU TAX. 162.19Sales of state lottery tickets are exempt from the tax imposed under section 162.20297A.62 . The State Lottery must on or before the 20th day of each month transmit to 162.21the commissioner of revenue an amount equal to the gross receipts from the sale of 162.22lottery tickets for the previous month multiplied by the new text begin a new text end tax rate under section 297A.62, 162.23subdivision 1 new text begin of 6.5 percent new text end . The resulting payment is in lieu of the sales tax that otherwise 162.24would be imposed by this chapter. The commissioner shall deposit the money transmitted 162.25as provided by section 297A.94 and the money must be treated as other proceeds of the 162.26sales tax. For purposes of this section, "gross receipts" means the proceeds of the sale 162.27of tickets before deduction of a commission or other compensation paid to the vendor or 162.28retailer for selling tickets. 162.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 162.30 new text begin June 30, 2013. new text end 162.31    Sec. 21. Minnesota Statutes 2012, section 297A.66, subdivision 1, is amended to read: 163.1    Subdivision 1. Definitions. (a) To the extent allowed by the United States 163.2Constitution and the laws of the United States, new text begin A new text end "retailer maintaining a place of business 163.3in this state," or a similar term, means a retailer: 163.4    (1) having or maintaining within this state, directly or by a subsidiary or an affiliate, 163.5 an office, place of distribution, sales or sample room or place, warehouse, or other place 163.6of business; or 163.7    (2) having new text begin utilizing new text end a representative, including, but not limited to, an affiliate, agent, 163.8salesperson, canvasser, or solicitor operating in this state under the authority of the retailer 163.9or its subsidiary, for any purpose, including the repairing, selling, delivering, installing, or 163.10soliciting of orders for the retailer's goods or services, or the leasing of tangible personal 163.11property located in this state, whether the place of business or agent, representative, affiliate, 163.12 salesperson, canvasser, or solicitor is located in the state permanently or temporarily, or 163.13whether or not the retailer, subsidiary, or affiliate is authorized to do business in this state. 163.14    (b) "Destination of a sale" means the location to which the retailer makes delivery of 163.15the property sold, or causes the property to be delivered, to the purchaser of the property, 163.16or to the agent or designee of the purchaser. The delivery may be made by any means, 163.17including the United States Postal Service or a for-hire carrier. 163.18     new text begin (c) A retailer shall be presumed to be "maintaining a place of business in this state" if: new text end 163.19     new text begin (1) any person, other than a person acting in the person's capacity as a common new text end 163.20 new text begin carrier, that has substantial nexus with this state: new text end 163.21     new text begin (i) sells a similar line of products as the retailer and does so under the same or new text end 163.22 new text begin a similar business name; new text end 163.23     new text begin (ii) maintains an office, distribution facility, warehouse or storage place, or similar new text end 163.24 new text begin place of business in the state to facilitate the delivery of property or services sold by the new text end 163.25 new text begin retailer to the retailer's customers; new text end 163.26     new text begin (iii) uses trademarks, service marks, or trade names in the state that are substantially new text end 163.27 new text begin the same or substantially similar to those used by the retailer; new text end 163.28     new text begin (iv) delivers, installs, assembles, or performs maintenance services for the retailer's new text end 163.29 new text begin customers within the state; new text end 163.30     new text begin (v) facilitates the retailer's delivery of property to customers in the state by allowing new text end 163.31 new text begin the retailer's customers to pick up property sold by the retailer at an office, distribution new text end 163.32 new text begin facility, warehouse, storage space, or similar place of business maintained by the person in new text end 163.33 new text begin the state; new text end 163.34     new text begin (vi) conducts any other activities in the state that are significantly associated with the new text end 163.35 new text begin retailer's ability to establish and maintain a market in the state for the retailer's sales; or new text end 163.36     new text begin (2) any affiliated person has substantial nexus with the state. new text end 164.1     new text begin (d) The presumptions in paragraph (c) may be rebutted by demonstrating that the new text end 164.2 new text begin activities of the person or affiliated person in the state are not significantly associated with new text end 164.3 new text begin the retailer's ability to establish or maintain a market in this state for the retailer's sales. new text end 164.4     new text begin (e) "Affiliated person" means any person that is a member of the same controlled new text end 164.5 new text begin group of corporations, as defined in section 1563(a) of the Internal Revenue Code as new text end 164.6 new text begin the retailer, or any other entity that, notwithstanding its form of organization, bears the new text end 164.7 new text begin same ownership relationship to the retailer as a corporation that is a member of the same new text end 164.8 new text begin controlled group of corporations as defined in section 1563(a) of the Internal Revenue Code. new text end 164.9     new text begin (f) "Solicitor" means a person, whether an independent contractor or other new text end 164.10 new text begin representative, who directly or indirectly solicits business for the retailer. new text end 164.11     new text begin (1) A retailer is presumed to have a solicitor in this state if it enters into an agreement new text end 164.12 new text begin with one or more persons under which the person, for a commission or other consideration, new text end 164.13 new text begin while within this state directly or indirectly refers potential customers, whether by a link new text end 164.14 new text begin on an Internet Web site, by telemarketing, by an in-person oral presentation, or otherwise, new text end 164.15 new text begin to the retailer, if the cumulative gross receipts from the sales by the retailer to customers in new text end 164.16 new text begin the state who are referred to the retailer by all persons within this state with this type of an new text end 164.17 new text begin agreement with the retailer is in excess of $10,000 during the preceding 12 months. new text end 164.18     new text begin (2) The presumption in clause (1) may be rebutted by submitting proof that the new text end 164.19 new text begin persons with whom the retailer has an agreement did not engage in any activity within the new text end 164.20 new text begin state that was significantly associated with the retailer's ability to establish or maintain new text end 164.21 new text begin the retailer's market in the state during the preceding 12 months. Such proof may consist new text end 164.22 new text begin of sworn written statements from all of the persons within this state with whom the new text end 164.23 new text begin retailer has an agreement stating that they did not engage in any solicitation in this state new text end 164.24 new text begin on behalf of the retailer during the preceding year, provided that such statements were new text end 164.25 new text begin provided and obtained in good faith. new text end 164.26     new text begin (3) Nothing in this section shall be construed to narrow the scope of the terms new text end 164.27 new text begin "agent," "salesperson," "canvasser," or "other representative" for purposes of subdivision new text end 164.28 new text begin 1, paragraph (a). new text end 164.29 new text begin This section does not apply to chapter 290 and does not expand or contract the new text end 164.30 new text begin jurisdiction to tax a trade or business under chapter 290. new text end 164.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 164.32 new text begin June 30, 2013. new text end 164.33    Sec. 22. Minnesota Statutes 2012, section 297A.66, subdivision 3, is amended to read: 164.34    Subd. 3. Retailer not maintaining place of business in this state. (a) To the 164.35extent allowed by the United States Constitution and the laws of the United States, a 165.1retailer making retail sales from outside this state to a destination within this state and 165.2not maintaining a place of business in this state shall collect sales and use taxes and remit 165.3them to the commissioner under section , if the retailer engages in the regular or 165.4systematic soliciting of sales from potential customers in this state by: 165.5    (1) distribution, by mail or otherwise, of catalogs, periodicals, advertising flyers, or 165.6other written solicitations of business to customers in this state; 165.7    (2) display of advertisements on billboards or other outdoor advertising in this state; 165.8    (3) advertisements in newspapers published in this state; 165.9    (4) advertisements in trade journals or other periodicals the circulation of which is 165.10primarily within this state; 165.11    (5) advertisements in a Minnesota edition of a national or regional publication or 165.12a limited regional edition in which this state is included as part of a broader regional or 165.13national publication which are not placed in other geographically defined editions of the 165.14same issue of the same publication; 165.15    (6) advertisements in regional or national publications in an edition which is not 165.16by its contents geographically targeted to Minnesota but which is sold over the counter 165.17in Minnesota or by subscription to Minnesota residents; 165.18    (7) advertisements broadcast on a radio or television station located in Minnesota; or 165.19    (8) any other solicitation by telegraphy, telephone, computer database, cable, optic, 165.20microwave, or other communication system. 165.21    This paragraph (a) must be construed without regard to the state from which 165.22distribution of the materials originated or in which they were prepared. 165.23    (b) The location within or without this state of independent vendors that provide 165.24products or services to the retailer in connection with its solicitation of customers within this 165.25state, including such products and services as creation of copy, printing, distribution, and 165.26recording, is not considered in determining whether the retailer is required to collect tax. 165.27    (c) A retailer not maintaining a place of business in this state is presumed, subject to 165.28rebuttal, to be engaged in regular solicitation within this state if it engages in any of the 165.29activities in paragraph (a) and: 165.30    (1) makes 100 or more retail sales from outside this state to destinations in this state 165.31during a period of 12 consecutive months; or 165.32    (2) makes ten or more retail sales totaling more than $100,000 from outside this state 165.33to destinations in this state during a period of 12 consecutive months. 165.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 165.35 new text begin June 30, 2013. new text end 166.1    Sec. 23. Minnesota Statutes 2012, section 297A.66, is amended by adding a 166.2subdivision to read: 166.3     new text begin Subd. 7. new text end new text begin Severability. new text end new text begin The legislature intends that the provisions of this section new text end 166.4 new text begin are severable. If any provision contained in this bill is held invalid or unconstitutional, or new text end 166.5 new text begin its application is held invalid or unconstitutional, that finding shall not affect the other new text end 166.6 new text begin provisions or applications that can be given effect without the invalid or unconstitutional new text end 166.7 new text begin provision or application. new text end 166.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 166.9    Sec. 24. Minnesota Statutes 2012, section 297A.665, is amended to read: 166.10297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF. 166.11    (a) For the purpose of the proper administration of this chapter and to prevent 166.12evasion of the tax, until the contrary is established, it is presumed that: 166.13    (1) all gross receipts are subject to the tax; and 166.14    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 166.15in Minnesota. 166.16    (b) The burden of proving that a sale is not a taxable retail sale is on the seller. 166.17However, a seller is relieved of liability if: 166.18    (1) the seller obtains a fully completed exemption certificate or all the relevant 166.19information required by section 297A.72, subdivision 2, at the time of the sale or within 166.2090 days after the date of the sale; or 166.21    (2) if the seller has not obtained a fully completed exemption certificate or all the 166.22relevant information required by section 297A.72, subdivision 2, within the time provided 166.23in clause (1), within 120 days after a request for substantiation by the commissioner, 166.24the seller either: 166.25    (i) obtains in good faith a fully completed exemption certificate or all the relevant 166.26information required by section 297A.72, subdivision 2, from the purchaser; or 166.27    (ii) proves by other means that the transaction was not subject to tax new text begin ; new text end 166.28     new text begin (3) in the case of drop shipment sales, a seller engaged in drop shipping may claim a new text end 166.29 new text begin resale exemption based on an exemption certificate provided by its customer or reseller, new text end 166.30 new text begin or any other acceptable information available to the seller engaged in drop shipping new text end 166.31 new text begin evidencing qualification for a resale exemption, regardless of whether the customer or new text end 166.32 new text begin e-seller is registered to collect and remit sales and use tax in the state new text end . 166.33    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who: 166.34    (1) fraudulently fails to collect the tax; or 167.1    (2) solicits purchasers to participate in the unlawful claim of an exemption. 167.2    (d) A certified service provider, as defined in section 297A.995, subdivision 2, is 167.3relieved of liability under this section to the extent a seller who is its client is relieved of 167.4liability. 167.5    (e) A purchaser of tangible personal property or any items listed in section 297A.63 167.6that are shipped or brought to Minnesota by the purchaser has the burden of proving that the 167.7property was not purchased from a retailer for storage, use, or consumption in Minnesota. 167.8    (f) If a seller claims that certain sales are exempt and does not provide the certificate, 167.9information, or proof required by paragraph (b), clause (2), within 120 days after the date 167.10of the commissioner's request for substantiation, then the exemptions claimed by the seller 167.11that required substantiation are disallowed. 167.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 167.13 new text begin June 30, 2013. new text end 167.14    Sec. 25. Minnesota Statutes 2012, section 297A.668, is amended by adding a 167.15subdivision to read: 167.16     new text begin Subd. 6a. new text end new text begin Multiple points of use. new text end new text begin (a) Notwithstanding the provisions of new text end 167.17 new text begin subdivisions 2 and 3, a business purchaser that is not a holder of a direct pay permit that new text end 167.18 new text begin purchases electronically delivered goods or services that will be concurrently available for new text end 167.19 new text begin use in more than one taxing jurisdiction may deliver to the seller in conjunction with its new text end 167.20 new text begin purchase a multiple points of use certificate disclosing this fact. new text end 167.21 new text begin (b) Upon receipt of the multiple points of use certificate, the seller is relieved of the new text end 167.22 new text begin obligation to collect, pay, or remit the applicable tax and the purchaser is obligated to new text end 167.23 new text begin collect, pay, or remit the applicable tax on a direct pay basis. new text end 167.24 new text begin (c) The purchaser delivering the multiple points of use certificate has sole discretion new text end 167.25 new text begin to use any reasonable but consistent and uniform method of apportionment that is supported new text end 167.26 new text begin by the purchaser's business records as they exist at the time of the consummation of the sale. new text end 167.27 new text begin (d) The multiple points of use certificate remains in effect for all future sales by the new text end 167.28 new text begin seller to the purchaser until it is revoked by the purchaser in writing. new text end 167.29 new text begin (e) A holder of a direct pay permit is not required to deliver a multiple points of use new text end 167.30 new text begin certificate to the seller. A direct pay permit holder shall follow the provisions of paragraph new text end 167.31 new text begin (c) in apportioning the tax due on electronically delivered goods or services that will be new text end 167.32 new text begin concurrently available for use in more than one taxing jurisdiction. new text end 167.33 new text begin (f) A seller is relieved of liability if: new text end 168.1 new text begin (1) the seller obtains a fully completed multiple points of use certificate or all the new text end 168.2 new text begin relevant information required by section 297A.72, subdivision 2, at the time of the sale or new text end 168.3 new text begin within 90 days after the date of the sale; or new text end 168.4 new text begin (2) within 120 days after a request for substantiation by the commissioner, the new text end 168.5 new text begin seller either: new text end 168.6 new text begin (i) obtains in good faith a fully completed multiple points of use certificate or all the new text end 168.7 new text begin relevant information required by section 297A.72, subdivision 2, from the purchaser; or new text end 168.8 new text begin (ii) proves by other means that the transaction was not subject to tax. new text end 168.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 168.10 new text begin June 30, 2013. new text end 168.11    Sec. 26. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read: 168.12    Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical 168.13devices for human use are exempt: 168.14    (1) new text begin prescription new text end drugs, including over-the-counter drugs; 168.15    (2) single-use finger-pricking devices for the extraction of blood and other single-use 168.16devices and single-use diagnostic agents used in diagnosing, monitoring, or treating 168.17diabetes; 168.18    (3) insulin and medical oxygen for human use, regardless of whether prescribed 168.19or sold over the counter; 168.20    (4) prosthetic devices; 168.21    (5) durable medical equipment for home use only; 168.22    (6) mobility enhancing equipment; 168.23    (7) prescription corrective eyeglasses; and 168.24    (8) kidney dialysis equipment, including repair and replacement parts. 168.25 new text begin (b) Items purchased in transactions covered by: new text end 168.26 new text begin (1) Medicare as defined under title XVIII of the Social Security Act, United States new text end 168.27 new text begin Code, title 42, section 1395, et seq.; or new text end 168.28 new text begin (2) Medicaid as defined under title XIX of the Social Security Act, United States new text end 168.29 new text begin Code, title 42, section 1396, et. seq. new text end 168.30    (b) new text begin (c) new text end For purposes of this subdivision: 168.31    (1) "Drug" means a compound, substance, or preparation, and any component of 168.32a compound, substance, or preparation, other than food and food ingredients, dietary 168.33supplements, or alcoholic beverages that is: 169.1    (i) recognized in the official United States Pharmacopoeia, official Homeopathic 169.2Pharmacopoeia of the United States, or official National Formulary, and supplement 169.3to any of them; 169.4    (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention 169.5of disease; or 169.6    (iii) intended to affect the structure or any function of the body. 169.7    (2) "Durable medical equipment" means equipment, including repair and 169.8replacement parts, new text begin including single-patient use items, new text end but not including mobility enhancing 169.9equipment, that: 169.10    (i) can withstand repeated use; 169.11    (ii) is primarily and customarily used to serve a medical purpose; 169.12    (iii) generally is not useful to a person in the absence of illness or injury; and 169.13    (iv) is not worn in or on the body. 169.14    For purposes of this clause, "repair and replacement parts" includes all components 169.15or attachments used in conjunction with the durable medical equipment, but does not 169.16include new text begin including new text end repair and replacement parts which are for single patient use only. 169.17    (3) "Mobility enhancing equipment" means equipment, including repair and 169.18replacement parts, but not including durable medical equipment, that: 169.19    (i) is primarily and customarily used to provide or increase the ability to move from 169.20one place to another and that is appropriate for use either in a home or a motor vehicle; 169.21    (ii) is not generally used by persons with normal mobility; and 169.22    (iii) does not include any motor vehicle or equipment on a motor vehicle normally 169.23provided by a motor vehicle manufacturer. 169.24    (4) "Over-the-counter drug" means a drug that contains a label that identifies the 169.25product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The 169.26label must include a "drug facts" panel or a statement of the active ingredients with a list of 169.27those ingredients contained in the compound, substance, or preparation. Over-the-counter 169.28drugs do not include grooming and hygiene products, regardless of whether they otherwise 169.29meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions, 169.30shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens. 169.31    (5) new text begin (4) new text end "Prescribed" and "prescription" means a direction in the form of an order, 169.32formula, or recipe issued in any form of oral, written, electronic, or other means of 169.33transmission by a duly licensed health care professional. 169.34    (6) new text begin (5) new text end "Prosthetic device" means a replacement, corrective, or supportive device, 169.35including repair and replacement parts, worn on or in the body to: 169.36    (i) artificially replace a missing portion of the body; 170.1    (ii) prevent or correct physical deformity or malfunction; or 170.2    (iii) support a weak or deformed portion of the body. 170.3Prosthetic device does not include corrective eyeglasses. 170.4    (7) new text begin (6) new text end "Kidney dialysis equipment" means equipment that: 170.5    (i) is used to remove waste products that build up in the blood when the kidneys are 170.6not able to do so on their own; and 170.7    (ii) can withstand repeated use, including multiple use by a single patient, 170.8notwithstanding the provisions of clause (2). 170.9 new text begin (7) A transaction is covered by Medicare or Medicaid if any portion of the cost of new text end 170.10 new text begin the item purchased in the transaction is paid for or reimbursed by the federal government new text end 170.11 new text begin or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private new text end 170.12 new text begin insurance company administering the Medicare or Medicaid program on behalf of the new text end 170.13 new text begin federal government or the state of Minnesota, or by a managed care organization for the new text end 170.14 new text begin benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu new text end 170.15 new text begin of conventional Medicare or Medicaid coverage pursuant to agreement with the federal new text end 170.16 new text begin government or the state of Minnesota. new text end 170.17 new text begin EFFECTIVE DATE. new text end new text begin Changes to paragraph (a), clause (1), and paragraph (c), new text end 170.18 new text begin clause (4), are effective for sales and purchases made after June 30, 2013. Changes to new text end 170.19 new text begin paragraph (b) and paragraph (c), clauses (2) and (7), are effective retroactively for sales new text end 170.20 new text begin and purchases made after April 1, 2009. Purchasers may apply for a refund of tax paid on new text end 170.21 new text begin qualifying purchases under paragraph (b) and paragraph (c), clauses (2) and (7), made new text end 170.22 new text begin after April 1, 2009, and before July 1, 2013, in the manner provided in section 297A.75. new text end 170.23 new text begin Notwithstanding limitations on claims for refunds under section 289A.40, claims may be new text end 170.24 new text begin filed with the commissioner until June 30, 2014. new text end 170.25    Sec. 27. Minnesota Statutes 2012, section 297A.67, is amended by adding a 170.26subdivision to read: 170.27     new text begin Subd. 7a. new text end new text begin Accessories and supplies. new text end new text begin Accessories and supplies required for the new text end 170.28 new text begin effective use of durable medical equipment for home use only or purchased in a transaction new text end 170.29 new text begin covered by medicare or Medicaid, that are not already exempt under section 297A.67, new text end 170.30 new text begin subdivision 7, are exempt. Accessories and supplies for the effective use of a prosthetic new text end 170.31 new text begin device that are not already exempt under section 297A.67, subdivision 7, are exempt. new text end 170.32 new text begin For purposes of this subdivision "durable medical equipment," "prosthetic device," new text end 170.33 new text begin "Medicare," and "Medicaid" have the definitions given in section 297A.67, subdivision 7. new text end 171.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for sales and purchases new text end 171.2 new text begin made after April 1, 2009. Purchasers may apply for a refund of tax paid on qualifying new text end 171.3 new text begin purchases under this section made after April 1, 2009, and before July 1, 2013, in the new text end 171.4 new text begin manner provided in section 297A.75. Notwithstanding limitations on claims for refunds new text end 171.5 new text begin under section 289A.40, claims may be filed with the commissioner until June 30, 2014. new text end 171.6    Sec. 28. Minnesota Statutes 2012, section 297A.68, subdivision 2, is amended to read: 171.7    Subd. 2. Materials consumed in industrial production. (a) Materials stored, used, 171.8or consumed in industrial production of new text begin tangible new text end personal property intended to be sold 171.9ultimately at retail new text begin , new text end are exempt, whether or not the item so used becomes an ingredient 171.10or constituent part of the property produced. Materials that qualify for this exemption 171.11include, but are not limited to, the following: 171.12(1) chemicals, including chemicals used for cleaning food processing machinery 171.13and equipment; 171.14(2) materials, including chemicals, fuels, and electricity purchased by persons 171.15engaged in industrial production to treat waste generated as a result of the production 171.16process; 171.17(3) fuels, electricity, gas, and steam used or consumed in the production process, 171.18except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt 171.19if (i) it is in excess of the average climate control or lighting for the production area, and 171.20(ii) it is necessary to produce that particular product; 171.21(4) petroleum products and lubricants; 171.22(5) packaging materials, including returnable containers used in packaging food 171.23and beverage products; 171.24(6) accessory tools, equipment, and other items that are separate detachable units 171.25with an ordinary useful life of less than 12 months used in producing a direct effect upon 171.26the product; and 171.27(7) the following materials, tools, and equipment used in metal-casting: crucibles, 171.28thermocouple protection sheaths and tubes, stalk tubes, refractory materials, molten metal 171.29filters and filter boxes, degassing lances, and base blocks. 171.30(b) This exemption does not include: 171.31(1) machinery, equipment, implements, tools, accessories, appliances, contrivances 171.32and furniture and fixtures, except those listed in paragraph (a), clause (6); and 171.33(2) petroleum and special fuels used in producing or generating power for propelling 171.34ready-mixed concrete trucks on the public highways of this state. 172.1(c) Industrial production includes, but is not limited to, research, development, 172.2design or production of any tangible personal property, manufacturing, processing (other 172.3than by restaurants and consumers) of agricultural products (whether vegetable or animal), 172.4commercial fishing, refining, smelting, reducing, brewing, distilling, printing, mining, 172.5quarrying, lumbering, generating electricity, the production of road building materials, 172.6and the research, development, design, or production of computer software. Industrial 172.7production does not include painting, cleaning, repairing or similar processing of property 172.8except as part of the original manufacturing process. 172.9(d) Industrial production does not include: 172.10(1) the furnishing of services listed in section 297A.61, subdivision 3, paragraph (g), 172.11clause (6), items (i) to (vi) and (viii) new text begin , or paragraph (m) or (n) new text end ; or 172.12(2) the transportation, transmission, or distribution of petroleum, liquefied gas, 172.13natural gas, water, or steam, in, by, or through pipes, lines, tanks, mains, or other means of 172.14transporting those products. For purposes of this paragraph, "transportation, transmission, 172.15or distribution" does not include blending of petroleum or biodiesel fuel as defined 172.16in section 239.77. 172.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 172.18 new text begin June 30, 2013. new text end 172.19    Sec. 29. Minnesota Statutes 2012, section 297A.68, subdivision 5, is amended to read: 172.20    Subd. 5. Capital equipment. (a) Capital equipment is exempt. new text begin Except as provided new text end 172.21 new text begin in paragraphs (e) and (f), new text end the tax must be imposed and collected as if the rate under section 172.22297A.62, subdivision 1 , applied, and then refunded in the manner provided in section 172.23297A.75 . 172.24"Capital equipment" means machinery and equipment purchased or leased, and used 172.25in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, 172.26or refining tangible personal property to be sold ultimately at retail if the machinery and 172.27equipment are essential to the integrated production process of manufacturing, fabricating, 172.28mining, or refining. Capital equipment also includes machinery and equipment 172.29used primarily to electronically transmit results retrieved by a customer of an online 172.30computerized data retrieval system. 172.31(b) Capital equipment includes, but is not limited to: 172.32(1) machinery and equipment used to operate, control, or regulate the production 172.33equipment; 172.34(2) machinery and equipment used for research and development, design, quality 172.35control, and testing activities; 173.1(3) environmental control devices that are used to maintain conditions such as 173.2temperature, humidity, light, or air pressure when those conditions are essential to and are 173.3part of the production process; 173.4(4) materials and supplies used to construct and install machinery or equipment; 173.5(5) repair and replacement parts, including accessories, whether purchased as spare 173.6parts, repair parts, or as upgrades or modifications to machinery or equipment; 173.7(6) materials used for foundations that support machinery or equipment; 173.8(7) materials used to construct and install special purpose buildings used in the 173.9production process; 173.10(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed 173.11as part of the delivery process regardless if mounted on a chassis, repair parts for 173.12ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and 173.13(9) machinery or equipment used for research, development, design, or production 173.14of computer software. 173.15(c) Capital equipment does not include the following: 173.16(1) motor vehicles taxed under chapter 297B; 173.17(2) machinery or equipment used to receive or store raw materials; 173.18(3) building materials, except for materials included in paragraph (b), clauses (6) 173.19and (7); 173.20(4) machinery or equipment used for nonproduction purposes, including, but not 173.21limited to, the following: plant security, fire prevention, first aid, and hospital stations; 173.22support operations or administration; pollution control; and plant cleaning, disposal of 173.23scrap and waste, plant communications, space heating, cooling, lighting, or safety; 173.24(5) farm machinery and aquaculture production equipment as defined by section 173.25297A.61 , subdivisions 12 and 13; 173.26(6) machinery or equipment purchased and installed by a contractor as part of an 173.27improvement to real property; 173.28(7) machinery and equipment used by restaurants in the furnishing, preparing, or 173.29serving of prepared foods as defined in section 297A.61, subdivision 31; 173.30(8) machinery and equipment used to furnish the services listed in section 297A.61, 173.31subdivision 3 , paragraph (g), clause (6), items (i) to (vi) and (viii); 173.32(9) machinery or equipment used in the transportation, transmission, or distribution 173.33of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines, 173.34tanks, mains, or other means of transporting those products. This clause does not apply to 173.35machinery or equipment used to blend petroleum or biodiesel fuel as defined in section 173.36239.77 ; or 174.1(10) any other item that is not essential to the integrated process of manufacturing, 174.2fabricating, mining, or refining. 174.3(d) For purposes of this subdivision: 174.4(1) "Equipment" means independent devices or tools separate from machinery but 174.5essential to an integrated production process, including computers and computer software, 174.6used in operating, controlling, or regulating machinery and equipment; and any subunit or 174.7assembly comprising a component of any machinery or accessory or attachment parts of 174.8machinery, such as tools, dies, jigs, patterns, and molds. 174.9(2) "Fabricating" means to make, build, create, produce, or assemble components or 174.10property to work in a new or different manner. 174.11(3) "Integrated production process" means a process or series of operations through 174.12which tangible personal property is manufactured, fabricated, mined, or refined. For 174.13purposes of this clause, (i) manufacturing begins with the removal of raw materials 174.14from inventory and ends when the last process prior to loading for shipment has been 174.15completed; (ii) fabricating begins with the removal from storage or inventory of the 174.16property to be assembled, processed, altered, or modified and ends with the creation 174.17or production of the new or changed product; (iii) mining begins with the removal of 174.18overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and 174.19ends when the last process before stockpiling is completed; and (iv) refining begins with 174.20the removal from inventory or storage of a natural resource and ends with the conversion 174.21of the item to its completed form. 174.22(4) "Machinery" means mechanical, electronic, or electrical devices, including 174.23computers and computer software, that are purchased or constructed to be used for the 174.24activities set forth in paragraph (a), beginning with the removal of raw materials from 174.25inventory through completion of the product, including packaging of the product. 174.26(5) "Machinery and equipment used for pollution control" means machinery and 174.27equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity 174.28described in paragraph (a). 174.29(6) "Manufacturing" means an operation or series of operations where raw materials 174.30are changed in form, composition, or condition by machinery and equipment and which 174.31results in the production of a new article of tangible personal property. For purposes of 174.32this subdivision, "manufacturing" includes the generation of electricity or steam to be 174.33sold at retail. 174.34(7) "Mining" means the extraction of minerals, ores, stone, or peat. 174.35(8) "Online data retrieval system" means a system whose cumulation of information 174.36is equally available and accessible to all its customers. 175.1(9) "Primarily" means machinery and equipment used 50 percent or more of the time 175.2in an activity described in paragraph (a). 175.3(10) "Refining" means the process of converting a natural resource to an intermediate 175.4or finished product, including the treatment of water to be sold at retail. 175.5(11) This subdivision does not apply to telecommunications equipment as 175.6provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit 175.7for telecommunications services. 175.8 new text begin (e) Materials exempt under this section may be purchased without imposing and new text end 175.9 new text begin collecting the tax and without applying for a refund under section 297A.75, provided that: new text end 175.10 new text begin (1) the purchaser employed not more than 80 full-time equivalent employees at new text end 175.11 new text begin any time during calendar year 2013; and new text end 175.12 new text begin (2) if another business owns at least 20 percent of the purchaser, then the sum of the new text end 175.13 new text begin number of full-time equivalent employees employed by the purchaser and the number new text end 175.14 new text begin of full-time equivalent employees employed by any other business that owns at least 20 new text end 175.15 new text begin percent of the purchaser's business is not more than 80 full-time equivalent employees new text end 175.16 new text begin during calendar year 2013. This clause must be applied for each business that owns at new text end 175.17 new text begin least 20 percent of the purchaser. new text end 175.18 new text begin (f) For the state's fiscal year 2016 and thereafter, all purchases exempt under this new text end 175.19 new text begin section may be purchased without imposing and collecting the tax and without applying new text end 175.20 new text begin for a refund under section 297A.75. new text end 175.21 new text begin EFFECTIVE DATE. new text end new text begin Paragraph (e) is effective for sales and purchases made new text end 175.22 new text begin after June 30, 2014, and through June 30, 2015. Paragraph (f) is effective for sales and new text end 175.23 new text begin purchases made after June 30, 2015. new text end 175.24    Sec. 30. Minnesota Statutes 2012, section 297A.68, subdivision 10, is amended to read: 175.25    Subd. 10. Publications; publication materials. Tangible personal property that 175.26is used or consumed in producing any publication regularly issued at average intervals 175.27not exceeding three months is exempt, and any such publication is exempt. "Publication" 175.28includes, but is not limited to, a qualified newspaper as defined by section 331A.02, 175.29together with any supplements or enclosures. "Publication" does not include magazines 175.30and periodicals new text begin , whether new text end sold over the counter new text begin or by subscription new text end . Tangible personal 175.31property that is used or consumed in producing a publication does not include machinery, 175.32equipment, implements, tools, accessories, appliances, contrivances, furniture, and fixtures 175.33used in the publication, or fuel, electricity, gas, or steam used for space heating or lighting. 175.34Advertising contained in a publication is a nontaxable service and is exempt. 175.35Persons who publish or sell newspapers are engaging in a nontaxable service with 176.1respect to gross receipts realized from such news-gathering or news-publishing activities, 176.2including the sale of advertising. 176.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 176.4 new text begin June 30, 2013. new text end 176.5    Sec. 31. Minnesota Statutes 2012, section 297A.68, subdivision 42, is amended to read: 176.6    Subd. 42. Qualified data centers. (a) Purchases of enterprise information 176.7technology equipment and computer software for use in a qualified data center are exempt. 176.8The tax on purchases exempt under this paragraph must be imposed and collected as if the 176.9rate under section 297A.62, subdivision 1, applied, and then refunded after June 30, 2013, 176.10in the manner provided in section 297A.75. This exemption includes enterprise information 176.11technology equipment and computer software purchased to replace or upgrade enterprise 176.12information technology equipment and computer software in a qualified data center. 176.13(b) Electricity used or consumed in the operation of a qualified data center is exempt. 176.14(c) For purposes of this subdivision, "qualified data center" means a facility in 176.15Minnesota: 176.16(1) that is comprised of one or more buildings that consist in the aggregate of at least 176.1730,000 new text begin 25,000 new text end square feet, and that are located on a single parcel or on contiguous parcels, 176.18where the total cost of construction or refurbishment, investment in enterprise information 176.19technology equipment, and computer software is at least $50,000,000 new text begin $20,000,000 new text end within 176.20a 24-month period; 176.21(2) that is constructed or substantially refurbished after June 30, 2012, where 176.22"substantially refurbished" means that at least 30,000 new text begin 25,000 new text end square feet have been rebuilt 176.23or modified; and new text begin , including: new text end 176.24 new text begin (i) installation of enterprise information technology equipment, environmental new text end 176.25 new text begin control, and energy efficiency improvements; and new text end 176.26 new text begin (ii) building improvements; and new text end 176.27(3) that is used to house enterprise information technology equipment, where the 176.28facility has the following characteristics: 176.29(i) uninterruptible power supplies, generator backup power, or both; 176.30(ii) sophisticated fire suppression and prevention systems; and 176.31(iii) enhanced security. A facility will be considered to have enhanced security if it 176.32has restricted access to the facility to selected personnel; permanent security guards; video 176.33camera surveillance; an electronic system requiring pass codes, keycards, or biometric 176.34scans, such as hand scans and retinal or fingerprint recognition; or similar security features. 177.1In determining whether the facility has the required square footage, the square 177.2footage of the following spaces shall be included if the spaces support the operation 177.3of enterprise information technology equipment: office space, meeting space, and 177.4mechanical and other support facilities. new text begin For purposes of this subdivision, "computer new text end 177.5 new text begin software" includes, but is not limited to, software utilized or loaded at the qualified data new text end 177.6 new text begin center, including maintenance, licensing, and software customization. new text end 177.7(d) For purposes of this subdivision, "enterprise information technology equipment" 177.8means computers and equipment supporting computing, networking, or data storage, 177.9including servers and routers. It includes, but is not limited to: cooling systems, 177.10cooling towers, and other temperature control infrastructure; power infrastructure for 177.11transformation, distribution, or management of electricity used for the maintenance 177.12and operation of a qualified data center, including but not limited to exterior dedicated 177.13business-owned substations, backup power generation systems, battery systems, and 177.14related infrastructure; and racking systems, cabling, and trays, which are necessary for 177.15the maintenance and operation of the qualified data center. 177.16(e) A qualified data center may claim the exemptions in this subdivision for 177.17purchases made either within 20 years of the date of its first purchase qualifying for the 177.18exemption under paragraph (a), or by June 30, 2042, whichever is earlier. 177.19(f) The purpose of this exemption is to create jobs in the construction and data 177.20center industries. 177.21(g) This subdivision is effective for sales and purchases made after June 30, 2012, 177.22and before July 1, 2042. 177.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 177.24 new text begin June 30, 2013. new text end 177.25    Sec. 32. Minnesota Statutes 2012, section 297A.68, is amended by adding a 177.26subdivision to read: 177.27     new text begin Subd. 49. new text end new text begin Greater Minnesota business expansions. new text end new text begin (a) Purchases and use of new text end 177.28 new text begin tangible personal property or taxable services by a qualified business, as defined in section new text end 177.29 new text begin 116J.3738, are exempt if: new text end 177.30 new text begin (1) the business subsidy agreement provides that the exemption under this new text end 177.31 new text begin subdivision applies; new text end 177.32 new text begin (2) the property or services are primarily used or consumed in greater Minnesota; and new text end 177.33 new text begin (3) the purchase was made and delivery received during the duration of the new text end 177.34 new text begin certification of the business as a qualified business under section 116J.3738. new text end 178.1 new text begin (b) Purchase and use of construction materials and supplies used or consumed in, new text end 178.2 new text begin and equipment incorporated into, the construction of improvements to real property in new text end 178.3 new text begin greater Minnesota are exempt if the improvements after completion of construction are new text end 178.4 new text begin to be used in the conduct of the trade or business of the qualified business, as defined in new text end 178.5 new text begin section 116J.3738. This exemption applies regardless of whether the purchases are made new text end 178.6 new text begin by the business or a contractor. new text end 178.7 new text begin (c) The exemptions under this subdivision apply to a local sales and use tax. new text end 178.8 new text begin (d) Subject to the limitations in paragraph (c), a qualifying business may claim an new text end 178.9 new text begin exemption under this subdivision in an amount up to $15,000. new text end 178.10 new text begin (e) The tax on purchases imposed under this subdivision must be imposed and new text end 178.11 new text begin collected as if the rate under section 297A.62, subdivision 1, applied, and then refunded new text end 178.12 new text begin in the manner provided in section 297A.75. No more than $1,000,000 may be refunded new text end 178.13 new text begin in a fiscal year for all purchases under this subdivision. Refunds must be allocated on a new text end 178.14 new text begin first come, first served basis. Any portion of the balance of funds allocated for refunds new text end 178.15 new text begin under this paragraph does not cancel and shall be carried forward to and available for new text end 178.16 new text begin refunds in subsequent fiscal years. new text end 178.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 178.18 new text begin June 30, 2013. new text end 178.19    Sec. 33. Minnesota Statutes 2012, section 297A.70, subdivision 2, is amended to read: 178.20    Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b), 178.21to the following governments and political subdivisions, or to the listed agencies or 178.22instrumentalities of governments and political subdivisions, are exempt: 178.23(1) the United States and its agencies and instrumentalities; 178.24(2) school districts, new text begin local governments, new text end the University of Minnesota, state universities, 178.25community colleges, technical colleges, state academies, the Perpich Minnesota Center for 178.26Arts Education, and an instrumentality of a political subdivision that is accredited as an 178.27optional/special function school by the North Central Association of Colleges and Schools; 178.28(3) hospitals and nursing homes owned and operated by political subdivisions of 178.29the state of tangible personal property and taxable services used at or by hospitals and 178.30nursing homes; 178.31(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip 178.32operations provided for in section 473.4051; 178.33(5) other states or political subdivisions of other states, if the sale would be exempt 178.34from taxation if it occurred in that state; new text begin and new text end 179.1(6) public libraries, public library systems, multicounty, multitype library systems as 179.2defined in section 134.001, county law libraries under chapter 134A, state agency libraries, 179.3the state library under section 480.09, and the Legislative Reference Library; and new text begin . new text end 179.4(7) towns. 179.5(b) This exemption does not apply to the sales of the following products and services: 179.6(1) building, construction, or reconstruction materials purchased by a contractor 179.7or a subcontractor as a part of a lump-sum contract or similar type of contract with a 179.8guaranteed maximum price covering both labor and materials for use in the construction, 179.9alteration, or repair of a building or facility; 179.10(2) construction materials purchased by tax exempt entities or their contractors to 179.11be used in constructing buildings or facilities which will not be used principally by the 179.12tax exempt entities; 179.13(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, 179.14except for leases entered into by the United States or its agencies or instrumentalities; 179.15(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause 179.16(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 179.17297A.67, subdivision 2 , except for lodging, prepared food, candy, soft drinks, and alcoholic 179.18beverages purchased directly by the United States or its agencies or instrumentalities; or 179.19(5) goods or services purchased by a town new text begin local government new text end as inputs to goods and 179.20services that are generally provided by a private business and the purchases would be 179.21taxable if made by a private business engaged in the same activity. 179.22(c) As used in this subdivision, "school districts" means public school entities and 179.23districts of every kind and nature organized under the laws of the state of Minnesota, and 179.24any instrumentality of a school district, as defined in section 471.59. 179.25 new text begin (d) As used in this subdivision, "local governments" means cities, counties, and new text end 179.26 new text begin townships. new text end 179.27(d) new text begin (e) new text end As used in this subdivision, "goods or services generally provided by a private 179.28business" include, but are not limited to, goods or services provided by liquor stores, gas 179.29and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes, 179.30and laundromats. "Goods or services generally provided by a private business" do not 179.31include housing services, sewer and water services, wastewater treatment, ambulance and 179.32other public safety services, correctional services, chore or homemaking services provided 179.33to elderly or disabled individuals, or road and street maintenance or lighting. 179.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 179.35 new text begin June 30, 2013. new text end 180.1    Sec. 34. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read: 180.2    Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph 180.3(b), to the following "nonprofit organizations" are exempt: 180.4(1) a corporation, society, association, foundation, or institution organized and 180.5operated exclusively for charitable, religious, or educational purposes if the item 180.6purchased is used in the performance of charitable, religious, or educational functions; and 180.7(2) any senior citizen group or association of groups that: 180.8(i) in general limits membership to persons who are either age 55 or older, or 180.9physically disabled; 180.10(ii) is organized and operated exclusively for pleasure, recreation, and other 180.11nonprofit purposes, not including housing, no part of the net earnings of which inures to 180.12the benefit of any private shareholders; and 180.13(iii) is an exempt organization under section 501(c) of the Internal Revenue Code. 180.14For purposes of this subdivision, charitable purpose includes the maintenance of a 180.15cemetery owned by a religious organization. 180.16(b) This exemption does not apply to the following sales: 180.17(1) building, construction, or reconstruction materials purchased by a contractor 180.18or a subcontractor as a part of a lump-sum contract or similar type of contract with a 180.19guaranteed maximum price covering both labor and materials for use in the construction, 180.20alteration, or repair of a building or facility; 180.21(2) construction materials purchased by tax-exempt entities or their contractors to 180.22be used in constructing buildings or facilities that will not be used principally by the 180.23tax-exempt entities; and 180.24(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause 180.25(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 180.26297A.67, subdivision 2 , except wine purchased by an established religious organization 180.27for sacramental purposes new text begin or as allowed under subdivision 9a new text end ; and 180.28(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except 180.29as provided in paragraph (c). 180.30(c) This exemption applies to the leasing of a motor vehicle as defined in section 180.31297B.01, subdivision 11 , only if the vehicle is: 180.32(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 180.33passenger automobile, as defined in section 168.002, if the automobile is designed and 180.34used for carrying more than nine persons including the driver; and 181.1(2) intended to be used primarily to transport tangible personal property or 181.2individuals, other than employees, to whom the organization provides service in 181.3performing its charitable, religious, or educational purpose. 181.4(d) A limited liability company also qualifies for exemption under this subdivision if 181.5(1) it consists of a sole member that would qualify for the exemption, and (2) the items 181.6purchased qualify for the exemption. 181.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for sales and purchases new text end 181.8 new text begin made after June 30, 2012. new text end 181.9    Sec. 35. Minnesota Statutes 2012, section 297A.70, subdivision 5, is amended to read: 181.10    Subd. 5. Veterans groups. Sales to an organization of military service veterans or 181.11an auxiliary unit of an organization of military service veterans are exempt if: 181.12(1) the organization or auxiliary unit is organized within the state of Minnesota 181.13and is exempt from federal taxation under section 501(c), clause (19), of the Internal 181.14Revenue Code; and 181.15(2) the tangible personal property is new text begin or services are new text end for charitable, civic, educational, 181.16or nonprofit uses and not for social, recreational, pleasure, or profit uses. 181.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 181.18 new text begin June 30, 2013. new text end 181.19    Sec. 36. Minnesota Statutes 2012, section 297A.70, subdivision 7, is amended to read: 181.20    Subd. 7. Hospitals and new text begin , new text end outpatient surgical centers new text begin , and critical access dental new text end 181.21 new text begin providers new text end . (a) Sales, except for those listed in paragraph (c) new text begin (d) new text end , to a hospital are exempt, 181.22if the items purchased are used in providing hospital services. For purposes of this 181.23subdivision, "hospital" means a hospital organized and operated for charitable purposes 181.24within the meaning of section 501(c)(3) of the Internal Revenue Code, and licensed under 181.25chapter 144 or by any other jurisdiction, and "hospital services" are services authorized or 181.26required to be performed by a "hospital" under chapter 144. 181.27    (b) Sales, except for those listed in paragraph (c) new text begin (d) new text end , to an outpatient surgical center 181.28are exempt, if the items purchased are used in providing outpatient surgical services. For 181.29purposes of this subdivision, "outpatient surgical center" means an outpatient surgical 181.30center organized and operated for charitable purposes within the meaning of section 181.31501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other 181.32jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means: 181.33(1) services authorized or required to be performed by an outpatient surgical center under 182.1chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means 182.2health services furnished to a person whose medical condition is sufficiently acute to 182.3require treatment unavailable through, or inappropriate to be provided by, a clinic or 182.4physician's office, but not so acute as to require treatment in a hospital emergency room. 182.5    (c) new text begin Sales, except for those listed in paragraph (d), to a critical access dental provider new text end 182.6 new text begin are exempt, if the items purchased are used in providing critical access dental care new text end 182.7 new text begin services. For the purposes of this subdivision, "critical access dental provider" means new text end 182.8 new text begin a dentist or dental clinic designated as a critical access dental provider under section new text end 182.9 new text begin 256B.76, subdivision 4, that serve only recipients of Minnesota health care programs. new text end 182.10     new text begin (d) new text end This exemption does not apply to the following products and services: 182.11    (1) purchases made by a clinic, physician's office, or any other medical facility not 182.12operating as a hospital or new text begin , new text end outpatient surgical center, new text begin or critical access dental provider, new text end 182.13even though the clinic, office, or facility may be owned and operated by a hospital or new text begin , new text end 182.14 outpatient surgical center new text begin , or critical access dental provider new text end ; 182.15    (2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and 182.16prepared food, candy, and soft drinks; 182.17    (3) building and construction materials used in constructing buildings or facilities 182.18that will not be used principally by the hospital or new text begin , new text end outpatient surgical center new text begin , or critical new text end 182.19 new text begin access dental provider new text end ; 182.20    (4) building, construction, or reconstruction materials purchased by a contractor or a 182.21subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed 182.22maximum price covering both labor and materials for use in the construction, alteration, or 182.23repair of a hospital or new text begin , new text end outpatient surgical center new text begin , or critical access dental provider new text end ; or 182.24    (5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11. 182.25    (d) new text begin (e) new text end A limited liability company also qualifies for exemption under this 182.26subdivision if (1) it consists of a sole member that would qualify for the exemption, and 182.27(2) the items purchased qualify for the exemption. 182.28    (e) new text begin (f) new text end An entity that contains both a hospital and a nonprofit unit may claim this 182.29exemption on purchases made for both the hospital and nonprofit unit provided that: 182.30    (1) the nonprofit unit would have qualified for exemption under subdivision 4; and 182.31    (2) the items purchased would have qualified for the exemption. 182.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for sales and purchases new text end 182.33 new text begin made after June 30, 2007. Purchasers may apply for a refund of tax paid for qualifying new text end 182.34 new text begin purchases under this subdivision made after June 30, 2007, and before July 1, 2013, in the new text end 182.35 new text begin manner provided in Minnesota Statutes, section 297A.75. new text end 183.1    Sec. 37. Minnesota Statutes 2012, section 297A.70, is amended by adding a 183.2subdivision to read: 183.3     new text begin Subd. 9a. new text end new text begin Established religious orders. new text end new text begin Sales of lodging, prepared food, candy, new text end 183.4 new text begin soft drinks, and alcoholic beverages at noncatered events between an established religious new text end 183.5 new text begin order and an affiliated institution of higher education are exempt. For purposes of this new text end 183.6 new text begin subdivision, an institution of higher education is "affiliated" with an established religious new text end 183.7 new text begin order if members of the religious order are represented on the governing board of the new text end 183.8 new text begin institution of higher education and the two organizations share campus space and common new text end 183.9 new text begin facilities. new text end 183.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively for sales and purchases new text end 183.11 new text begin made after June 30, 2012. new text end 183.12    Sec. 38. Minnesota Statutes 2012, section 297A.70, subdivision 13, is amended to read: 183.13    Subd. 13. Fund-raising sales by or for nonprofit groups. (a) The following 183.14sales by the specified organizations for fund-raising purposes are exempt, subject to the 183.15limitations listed in paragraph (b): 183.16(1) all sales made by a nonprofit organization that exists solely for the purpose of 183.17providing educational or social activities for young people primarily age 18 and under; 183.18(2) all sales made by an organization that is a senior citizen group or association of 183.19groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized 183.20and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii) 183.21no part of its net earnings inures to the benefit of any private shareholders; 183.22(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if 183.23the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization 183.24under section 501(c)(3) of the Internal Revenue Code; and 183.25(4) sales of candy sold for fund-raising purposes by a nonprofit organization that 183.26provides educational and social activities primarily for young people age 18 and under. 183.27(b) The exemptions listed in paragraph (a) are limited in the following manner: 183.28(1) the exemption under paragraph (a), clauses (1) and (2), applies only if the gross 183.29annual receipts of the organization from fund-raising do not exceed $10,000; and 183.30(2) the exemption under paragraph (a), clause (1), does not apply if the sales are 183.31derived from admission charges or from activities for which the money must be deposited 183.32with the school district treasurer under section 123B.49, subdivision 2, or be recorded in 183.33the same manner as other revenues or expenditures of the school district under section 183.34123B.49, subdivision 4 . 184.1(c) Sales of tangible personal property new text begin and services new text end are exempt if the entire proceeds, 184.2less the necessary expenses for obtaining the property new text begin or services new text end , will be contributed to 184.3a registered combined charitable organization described in section 43A.50, to be used 184.4exclusively for charitable, religious, or educational purposes, and the registered combined 184.5charitable organization has given its written permission for the sale. Sales that occur over 184.6a period of more than 24 days per year are not exempt under this paragraph. 184.7(d) For purposes of this subdivision, a club, association, or other organization of 184.8elementary or secondary school students organized for the purpose of carrying on sports, 184.9educational, or other extracurricular activities is a separate organization from the school 184.10district or school for purposes of applying the $10,000 limit. 184.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 184.12 new text begin June 30, 2013. new text end 184.13    Sec. 39. Minnesota Statutes 2012, section 297A.70, subdivision 14, is amended to read: 184.14    Subd. 14. Fund-raising events sponsored by nonprofit groups. (a) Sales of 184.15tangible personal property new text begin or services new text end at, and admission charges for fund-raising events 184.16sponsored by, a nonprofit organization are exempt if: 184.17(1) all gross receipts are recorded as such, in accordance with generally accepted 184.18accounting practices, on the books of the nonprofit organization; and 184.19(2) the entire proceeds, less the necessary expenses for the event, will be used solely 184.20and exclusively for charitable, religious, or educational purposes. Exempt sales include 184.21the sale of prepared food, candy, and soft drinks at the fund-raising event. 184.22(b) This exemption is limited in the following manner: 184.23(1) it does not apply to admission charges for events involving bingo or other 184.24gambling activities or to charges for use of amusement devices involving bingo or other 184.25gambling activities; 184.26(2) all gross receipts are taxable if the profits are not used solely and exclusively for 184.27charitable, religious, or educational purposes; 184.28(3) it does not apply unless the organization keeps a separate accounting record, 184.29including receipts and disbursements from each fund-raising event that documents all 184.30deductions from gross receipts with receipts and other records; 184.31(4) it does not apply to any sale made by or in the name of a nonprofit corporation as 184.32the active or passive agent of a person that is not a nonprofit corporation; 184.33(5) all gross receipts are taxable if fund-raising events exceed 24 days per year; 184.34(6) it does not apply to fund-raising events conducted on premises leased for more 184.35than five days but less than 30 days; and 185.1(7) it does not apply if the risk of the event is not borne by the nonprofit organization 185.2and the benefit to the nonprofit organization is less than the total amount of the state and 185.3local tax revenues forgone by this exemption. 185.4(c) For purposes of this subdivision, a "nonprofit organization" means any unit of 185.5government, corporation, society, association, foundation, or institution organized and 185.6operated for charitable, religious, educational, civic, fraternal, and senior citizens' or 185.7veterans' purposes, no part of the net earnings of which inures to the benefit of a private 185.8individual. 185.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 185.10 new text begin June 30, 2013. new text end 185.11    Sec. 40. Minnesota Statutes 2012, section 297A.70, is amended by adding a 185.12subdivision to read: 185.13     new text begin Subd. 18. new text end new text begin Nursing homes and boarding care homes. new text end new text begin (a) All sales, except those new text end 185.14 new text begin listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding new text end 185.15 new text begin care home certified as a nursing facility under title 19 of the Social Security Act are new text end 185.16 new text begin exempt if the facility: new text end 185.17 new text begin (1) is exempt from federal income taxation pursuant to section 501(c)(3) of the new text end 185.18 new text begin Internal Revenue Code; and new text end 185.19 new text begin (2) is certified to participate in the medical assistance program under title 19 of the new text end 185.20 new text begin Social Security Act, or certifies to the commissioner that it does not discharge residents new text end 185.21 new text begin due to the inability to pay. new text end 185.22 new text begin (b) This exemption does not apply to the following sales: new text end 185.23 new text begin (1) building, construction, or reconstruction materials purchased by a contractor new text end 185.24 new text begin or a subcontractor as a part of a lump-sum contract or similar type of contract with a new text end 185.25 new text begin guaranteed maximum price covering both labor and materials for use in the construction, new text end 185.26 new text begin alteration, or repair of a building or facility; new text end 185.27 new text begin (2) construction materials purchased by tax-exempt entities or their contractors to new text end 185.28 new text begin be used in constructing buildings or facilities that will not be used principally by the new text end 185.29 new text begin tax-exempt entities; new text end 185.30 new text begin (3) lodging as defined under section new text end new text begin 297A.61, subdivision 3 new text end new text begin , paragraph (g), clause new text end 185.31 new text begin (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section new text end 185.32 new text begin 297A.67, subdivision 2 new text end new text begin ; and new text end 185.33 new text begin (4) leasing of a motor vehicle as defined in section new text end new text begin 297B.01, subdivision 11 new text end new text begin , except new text end 185.34 new text begin as provided in paragraph (c). new text end 186.1 new text begin (c) This exemption applies to the leasing of a motor vehicle as defined in section new text end 186.2 new text begin 297B.01, subdivision 11 new text end new text begin , only if the vehicle is: new text end 186.3 new text begin (1) a truck, as defined in section new text end new text begin ; a bus, as defined in section new text end new text begin ; or a new text end 186.4 new text begin passenger automobile, as defined in section new text end new text begin , if the automobile is designed and new text end 186.5 new text begin used for carrying more than nine persons including the driver; and new text end 186.6 new text begin (2) intended to be used primarily to transport tangible personal property or residents new text end 186.7 new text begin of the nursing home or boarding care home. new text end 186.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 186.9 new text begin June 30, 2013. new text end 186.10    Sec. 41. Minnesota Statutes 2012, section 297A.71, is amended by adding a 186.11subdivision to read: 186.12     new text begin Subd. 45. new text end new text begin Biopharmaceutical manufacturing facility. new text end new text begin (a) Materials and new text end 186.13 new text begin supplies used or consumed in, capital equipment incorporated into, and privately new text end 186.14 new text begin owned infrastructure in support of the construction, improvement, or expansion of a new text end 186.15 new text begin biopharmaceutical manufacturing facility in the state are exempt if the following criteria new text end 186.16 new text begin are met: new text end 186.17 new text begin (1) the facility is used for the manufacturing of biologics; new text end 186.18 new text begin (2) the total capital investment made at the facility exceeds $50,000,000; and new text end 186.19 new text begin (3) the facility creates and maintains at least 190 full-time equivalent positions at the new text end 186.20 new text begin facility. These positions must be new jobs in Minnesota and not the result of relocating new text end 186.21 new text begin jobs that currently exist in Minnesota. new text end 186.22 new text begin (b) The tax must be imposed and collected as if the rate under section 297A.62, new text end 186.23 new text begin subdivision 1, applied, and refunded in the manner provided in section 297A.75. new text end 186.24 new text begin (c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing new text end 186.25 new text begin facility must: new text end 186.26 new text begin (1) initially apply to the Department of Employment and Economic Development new text end 186.27 new text begin for certification no later than one year from the final completion date of construction, new text end 186.28 new text begin improvement, or expansion of the facility; and new text end 186.29 new text begin (2) for each year that the owner of the biopharmaceutical manufacturing facility new text end 186.30 new text begin applies for a refund, the owner must have received written certification from the new text end 186.31 new text begin Department of Employment and Economic Development that the facility has met the new text end 186.32 new text begin criteria of paragraph (a). new text end 186.33 new text begin (d) The refund is to be paid annually at a rate of 25 percent of the total allowable new text end 186.34 new text begin refund payable to date, with the commissioner making annual payments of the remaining new text end 186.35 new text begin refund until all of the refund has been paid. new text end 187.1 new text begin (e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are new text end 187.2 new text begin interchangeable and mean medical drugs or medicinal preparations produced using new text end 187.3 new text begin technology that uses biological systems, living organisms or derivatives of living new text end 187.4 new text begin organisms, to make or modify products or processes for specific use. The medical drugs or new text end 187.5 new text begin medicinal preparations include but are not limited to proteins, antibodies, nucleic acids, new text end 187.6 new text begin and vaccines. new text end 187.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively to capital investments new text end 187.8 new text begin made and jobs created after December 31, 2012, and effective retroactively for sales and new text end 187.9 new text begin purchases made after December 31, 2012, and before July 1, 2019. new text end 187.10    Sec. 42. Minnesota Statutes 2012, section 297A.71, is amended by adding a 187.11subdivision to read: 187.12     new text begin Subd. 46. new text end new text begin Research and development facilities. new text end new text begin Materials and supplies used new text end 187.13 new text begin or consumed in, and equipment incorporated into, the construction or improvement of new text end 187.14 new text begin a research and development facility that has laboratory space of at least 400,000 square new text end 187.15 new text begin feet and utilizes both high-intensity and low-intensity laboratories, provided that the new text end 187.16 new text begin project has a total construction cost of at least $140,000,000 within a 24-month period. new text end 187.17 new text begin The tax on purchases imposed under this subdivision must be imposed and collected as if new text end 187.18 new text begin the rate under section 297A.62, subdivision 1, applied and then refunded in the manner new text end 187.19 new text begin provided in section 297A.75. new text end 187.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 187.21 new text begin June 30, 2013, and before September 1, 2015. new text end 187.22    Sec. 43. Minnesota Statutes 2012, section 297A.71, is amended by adding a 187.23subdivision to read: 187.24     new text begin Subd. 47. new text end new text begin Industrial measurement manufacturing and controls facility. new text end new text begin (a) new text end 187.25 new text begin Materials and supplies used or consumed in, capital equipment incorporated into, new text end 187.26 new text begin fixtures installed in, and privately owned infrastructure in support of the construction, new text end 187.27 new text begin improvement, or expansion of an industrial measurement manufacturing and controls new text end 187.28 new text begin facility are exempt if: new text end 187.29 new text begin (1) the total capital investment made at the facility is at least $60,000,000; new text end 187.30 new text begin (2) the facility employs at least 250 full-time equivalent employees that are not new text end 187.31 new text begin employees currently employed by the company in the state; and new text end 188.1 new text begin (3) the Department of Employment and Economic Development determines that new text end 188.2 new text begin the expansion, remodeling, or improvement of the facility has a significant impact on new text end 188.3 new text begin the state economy. new text end 188.4 new text begin (b) The tax must be imposed and collected as if the rate under section 297A.62, new text end 188.5 new text begin subdivisions 1 and 1a, applied and refunded in the manner provided in section 297A.75, new text end 188.6 new text begin only after the following criteria are met: new text end 188.7 new text begin (1) a refund may not be issued until the owner of the facility has received new text end 188.8 new text begin certification from the Department of Employment and Economic Development that the new text end 188.9 new text begin company meets the requirements in paragraph (a); and new text end 188.10 new text begin (2) to receive the refund, the owner of the industrial measurement manufacturing new text end 188.11 new text begin and controls facility must initially apply to the Department of Employment and Economic new text end 188.12 new text begin Development for certification no later than one year from the final completion date of new text end 188.13 new text begin construction, improvement, or expansion of the industrial measurement manufacturing new text end 188.14 new text begin and controls facility. new text end 188.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 188.16 new text begin June 30, 2013, and before December 31, 2015. new text end 188.17    Sec. 44. Minnesota Statutes 2012, section 297A.71, is amended by adding a 188.18subdivision to read: 188.19     new text begin Subd. 48. new text end new text begin Retail, hotel, amusement, and office construction project. new text end new text begin Materials new text end 188.20 new text begin and supplies used or consumed in, and equipment incorporated into the construction or new text end 188.21 new text begin improvement of buildings and infrastructure for retail, hotel, amusement, and office use new text end 188.22 new text begin within a two square mile area with a capital investment of at least $250,000,000, are new text end 188.23 new text begin exempt. The tax on purchases exempt under this provision must be imposed and collected new text end 188.24 new text begin as if the rate under section 297A.62, subdivision 1, applied and then refunded in the new text end 188.25 new text begin manner provided in section 297A.75. This subdivision expires June 30, 2023. new text end 188.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 188.27 new text begin June 30, 2014, and before July 1, 2024. new text end 188.28    Sec. 45. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read: 188.29    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the 188.30following exempt items must be imposed and collected as if the sale were taxable and the 188.31rate under section 297A.62, subdivision 1, applied. The exempt items include: 188.32    (1) capital equipment exempt under section 297A.68, subdivision 5; 189.1    (2) new text begin (1) new text end building materials for an agricultural processing facility exempt under section 189.2297A.71, subdivision 13 ; 189.3    (3) new text begin (2) new text end building materials for mineral production facilities exempt under section 189.4297A.71, subdivision 14 ; 189.5    (4) new text begin (3) new text end building materials for correctional facilities under section 297A.71, 189.6subdivision 3 ; 189.7    (5) new text begin (4) new text end building materials used in a residence for disabled veterans exempt under 189.8section 297A.71, subdivision 11; 189.9    (6) new text begin (5) new text end elevators and building materials exempt under section 297A.71, subdivision 189.1012 ; 189.11    (7) new text begin (6) new text end building materials for the Long Lake Conservation Center exempt under 189.12section 297A.71, subdivision 17; 189.13    (8) new text begin (7) new text end materials and supplies for qualified low-income housing under section 189.14297A.71, subdivision 23 ; 189.15    (9) new text begin (8) new text end materials, supplies, and equipment for municipal electric utility facilities 189.16under section 297A.71, subdivision 35; 189.17    (10) new text begin (9) new text end equipment and materials used for the generation, transmission, and 189.18distribution of electrical energy and an aerial camera package exempt under section 189.19297A.68 , subdivision 37; 189.20    (11) new text begin (10) new text end commuter rail vehicle and repair parts under section 297A.70, subdivision 189.213, paragraph (a), clause (10); 189.22    (12) new text begin (11) new text end materials, supplies, and equipment for construction or improvement of 189.23projects and facilities under section 297A.71, subdivision 40; 189.24(13) new text begin (12) new text end materials, supplies, and equipment for construction or improvement of a 189.25meat processing facility exempt under section 297A.71, subdivision 41; 189.26(14) new text begin (13) new text end materials, supplies, and equipment for construction, improvement, or 189.27expansion of new text begin : new text end 189.28 new text begin (i) new text end an aerospace defense manufacturing facility exempt under section 297A.71, 189.29subdivision 42; 189.30 new text begin (ii) a biopharmaceutical manufacturing facility exempt under section 297A.71, new text end 189.31 new text begin subdivision 45; new text end 189.32 new text begin (iii) a research and development facility exempt under section 297A.71, subdivision new text end 189.33 new text begin 4b; new text end 189.34 new text begin (iv) an industrial measurement manufacturing and controls facility exempt under new text end 189.35 new text begin section 297A.71, subdivision 47; and new text end 190.1 new text begin (v) buildings and infrastructure for retail, hotel, amusement, and office facilities new text end 190.2 new text begin exempt under section 297A.71, subdivision 48; new text end 190.3(15) new text begin (14) new text end enterprise information technology equipment and computer software for 190.4use in a qualified data center exempt under section 297A.68, subdivision 42; and 190.5(16) new text begin (15) new text end materials, supplies, and equipment for qualifying capital projects under 190.6section 297A.71, subdivision 44 new text begin ; new text end 190.7 new text begin (16) items purchased for use in providing critical access dental services exempt new text end 190.8 new text begin under section 297A.70, subdivision 7, paragraph (c); new text end 190.9 new text begin (17) items purchased in transactions covered under Medicare or Medicaid exempt new text end 190.10 new text begin under section 297A.67, subdivision 7, paragraphs (b) and (c), and accessories and supplies new text end 190.11 new text begin exempt under section 297A.67, subdivision 7a; and new text end 190.12 new text begin (18) items and services purchased under a business subsidy agreement for use or new text end 190.13 new text begin consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 49 new text end . 190.14 new text begin EFFECTIVE DATE. new text end new text begin The change to clause (1) is effective for sales and purchases new text end 190.15 new text begin made after June 30, 2015. The changes in clauses (13), (16), and (17), are effective the new text end 190.16 new text begin day following final enactment. new text end 190.17    Sec. 46. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read: 190.18    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the 190.19commissioner, a refund equal to the tax paid on the gross receipts of the exempt items 190.20must be paid to the applicant. Only the following persons may apply for the refund: 190.21    (1) for subdivision 1, clauses (1) to (3) new text begin (2), (16), and (17) new text end , the applicant must be 190.22the purchaser; 190.23    (2) for subdivision 1, clauses (4) new text begin (3) new text end and (7) new text begin (6) new text end , the applicant must be the 190.24governmental subdivision; 190.25    (3) for subdivision 1, clause (5) new text begin (4) new text end , the applicant must be the recipient of the 190.26benefits provided in United States Code, title 38, chapter 21; 190.27    (4) for subdivision 1, clause (6) new text begin (5) new text end , the applicant must be the owner of the 190.28homestead property; 190.29    (5) for subdivision 1, clause (8) new text begin (7) new text end , the owner of the qualified low-income housing 190.30project; 190.31    (6) for subdivision 1, clause (9) new text begin (8) new text end , the applicant must be a municipal electric utility 190.32or a joint venture of municipal electric utilities; 190.33    (7) for subdivision 1, clauses (10), new text begin (9), (12), new text end (13), (14), and (15) new text begin and (18) new text end , the owner 190.34of the qualifying business; and 191.1    (8) for subdivision 1, clauses new text begin (10), new text end (11), (12), and (16) new text begin (15) new text end , the applicant must be 191.2the governmental entity that owns or contracts for the project or facility. 191.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 191.4    Sec. 47. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read: 191.5    Subd. 3. Application. (a) The application must include sufficient information 191.6to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, 191.7subcontractor, or builder, under subdivision 1, clause new text begin (3), new text end (4), (5), (6), (7), (8), (9), (10), 191.8(11), (12), (13), (14), (15), or (16) new text begin (18) new text end , the contractor, subcontractor, or builder must 191.9furnish to the refund applicant a statement including the cost of the exempt items and the 191.10taxes paid on the items unless otherwise specifically provided by this subdivision. The 191.11provisions of sections 289A.40 and 289A.50 apply to refunds under this section. 191.12    (b) An applicant may not file more than two applications per calendar year for 191.13refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5. 191.14    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not 191.15exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases 191.16of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71, 191.17subdivision 40, must not be filed until after June 30, 2009. 191.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 191.19 new text begin June 30, 2015. new text end 191.20    Sec. 48. Minnesota Statutes 2012, section 297A.815, subdivision 3, is amended to read: 191.21    Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this 191.22subdivision, "net revenue" means an amount equal to: 191.23    (1) the revenues, including interest and penalties, new text begin that would have been new text end collected 191.24under this section, during the fiscal year new text begin if the rate had been 6.875 percent new text end ; less 191.25    (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal 191.26year 2013 and following fiscal years, $32,000,000. 191.27    (b) On or before June 30 of each fiscal year, the commissioner of revenue shall 191.28estimate the amount of the revenues and subtraction under paragraph (a) for the current 191.29fiscal year. 191.30    (c) On or after July 1 of the subsequent fiscal year, the commissioner of management 191.31and budget shall transfer the net revenue as estimated in paragraph (b) from the general 191.32fund, as follows: 191.33    (1) 50 percent to the greater Minnesota transit account; and 192.1    (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law 192.2to the contrary, the commissioner of transportation shall allocate the funds transferred 192.3under this clause to the counties in the metropolitan area, as defined in section 473.121, 192.4subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall 192.5receive of such amount the percentage that its population, as defined in section 477A.011, 192.6subdivision 3, estimated or established by July 15 of the year prior to the current calendar 192.7year, bears to the total population of the counties receiving funds under this clause. 192.8    (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must 192.9be calculated using the following percentages of the total revenues: 192.10    (1) for fiscal year 2010, 83.75 percent; and 192.11    (2) for fiscal year 2011, 93.75 percent. 192.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 192.13 new text begin June 30, 2013. new text end 192.14    Sec. 49. Minnesota Statutes 2012, section 297A.99, subdivision 1, is amended to read: 192.15    Subdivision 1. Authorization; scope. (a) A political subdivision of this state may 192.16impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) if 192.17permitted by special law, or (4) if the political subdivision enacted and imposed the tax 192.18before January 1, 1982, and its predecessor provision. 192.19    (b) This section governs the imposition of a general sales tax by the political 192.20subdivision. The provisions of this section preempt the provisions of any special law: 192.21    (1) enacted before June 2, 1997, or 192.22    (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 192.23provision from this section's rules by reference. 192.24    (c) This section does not apply to or preempt a sales tax on motor vehicles or a 192.25special excise tax on motor vehicles. 192.26(d) A political subdivision may not advertise or expend funds for the promotion of a 192.27referendum to support imposing a local option sales tax. 192.28 new text begin (e) Notwithstanding paragraph (d), new text end a political subdivision may only expend funds to new text begin : new text end 192.29 new text begin (1) new text end conduct the referendum. new text begin ; new text end 192.30 new text begin (2) disseminate information included in the resolution adopted under subdivision 2; new text end 192.31 new text begin (3) provide notice of, and conduct public forums at which proponents and opponents new text end 192.32 new text begin on the merits of the referendum are given equal time to express their opinions on the new text end 192.33 new text begin merits of the referendum; new text end 192.34 new text begin (4) provide facts and data on the impact of the proposed sales tax on consumer new text end 192.35 new text begin purchases; and new text end 193.1 new text begin (5) provide facts and data related to the programs and projects to be funded with new text end 193.2 new text begin the sales tax. new text end 193.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 193.4    Sec. 50. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by 193.5Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section 193.630, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First 193.7Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4, 193.8section 15, is amended to read: 193.9    Subd. 2. Use of revenues. Revenues received from the tax authorized by subdivision 193.101 may only be used by the city to pay the cost of collecting the tax, and new text begin , except as provided in new text end 193.11 new text begin paragraph (e), new text end to pay for the following projects or to secure or pay any principal, premium, 193.12or interest on bonds issued in accordance with subdivision 3 for the following projects. 193.13    (a) To pay all or a portion of the capital expenses of construction, equipment and 193.14acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex, 193.15including the demolition of the existing arena and the construction and equipping of a 193.16new arena. 193.17    (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be 193.18spent for: 193.19    (1) capital projects to further residential, cultural, commercial, and economic 193.20development in both downtown St. Paul and St. Paul neighborhoods; and 193.21    (2) capital and operating expenses of cultural organizations in the city, provided 193.22that the amount spent under this clause must equal ten percent of the total amount spent 193.23under this paragraph in any year. 193.24    (c) The amount apportioned under paragraph (b) shall be no less than 60 percent 193.25of the revenues derived from the tax each year, except to the extent that a portion of that 193.26amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a) 193.27prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1, 193.281998, but only if the city council determines that 40 percent of the revenues derived from 193.29the tax together with other revenues pledged to the payment of the bonds, including the 193.30proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds. 193.31    (d) If in any year more than 40 percent of the revenue derived from the tax authorized 193.32by subdivision 1 is used to pay debt service on the bonds issued for the purposes of 193.33paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment 193.34that exceeds 40 percent of the revenue must be determined for that year. In any year when 193.3540 percent of the revenue produced by the sales tax exceeds the amount required to pay 194.1debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the 194.2amount of the excess must be made available for capital projects to further residential, 194.3cultural, commercial, and economic development in the neighborhoods and downtown 194.4until the cumulative amounts determined for all years under the preceding sentence have 194.5been made available under this sentence. The amount made available as reimbursement in 194.6the preceding sentence is not included in the 60 percent determined under paragraph (c). 194.7    (e) In each of calendar years 2006 to 2014, revenue not to exceed $3,500,000 may be 194.8used to pay the principal of bonds issued for capital projects of the city. After December 194.931, 2014, revenue from the tax imposed under subdivision 1 may not be used for this 194.10purpose. new text begin If the amount necessary to meet obligations under paragraphs (a) and (d) are less new text end 194.11 new text begin than 40 percent of the revenue from the tax in any year, the city may place the difference new text end 194.12 new text begin between 40 percent of the revenue and the amounts allocated under paragraphs (a) and (d) new text end 194.13 new text begin in an economic development fund to be used for any economic development purposes. new text end 194.14    (f) By January 15 of each year, the mayor and the city council must report to the 194.15legislature on the use of sales tax revenues during the preceding one-year period. 194.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 194.17 new text begin governing body of the city of St. Paul with Minnesota Statutes, section 645.021, new text end 194.18 new text begin subdivisions 2 and 3. new text end 194.19    Sec. 51. Laws 1993, chapter 375, article 9, section 46, subdivision 5, as amended by 194.20Laws 1998, chapter 389, article 8, section 32, is amended to read: 194.21    Subd. 5. Expiration of taxing authority. The authority granted by subdivision 1 to 194.22the city to impose a sales tax shall expire on December 31, 2030 new text begin 2040 new text end , or at an earlier 194.23time as the city shall, by ordinance, determine. Any funds remaining after completion of 194.24projects approved under subdivision 2, paragraph (a) and retirement or redemption of any 194.25bonds or other obligations may be placed in the general fund of the city. 194.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 194.27 new text begin governing body of the city of St. Paul with Minnesota Statutes, section 645.021, new text end 194.28 new text begin subdivisions 2 and 3. new text end 194.29    Sec. 52. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision 194.302, is amended to read: 194.31    Subd. 2. Use of revenues. (a) Revenues received from the tax authorized by 194.32subdivision 1 by the city of St. Cloud must be used for the cost of collecting and 194.33administering the tax and to pay all or part of the capital or administrative costs of the 195.1development, acquisition, construction, improvement, and securing and paying debt 195.2service on bonds or other obligations issued to finance the following regional projects as 195.3approved by the voters and specifically detailed in the referendum authorizing the tax new text begin or new text end 195.4 new text begin extending the tax new text end : 195.5    (1) St. Cloud Regional Airport; 195.6    (2) regional transportation improvements; 195.7    (3) new text begin regional new text end community and aquatics centers; 195.8    (4) regional public libraries; and 195.9    (5) acquisition and improvement of regional park land and open space. 195.10    (b) Revenues received from the tax authorized by subdivision 1 by the cities of St. 195.11Joseph, Waite Park, Sartell, Sauk Rapids, and St. Augusta must be used for the cost of 195.12collecting and administering the tax and to pay all or part of the capital or administrative 195.13costs of the development, acquisition, construction, improvement, and securing and paying 195.14debt service on bonds or other obligations issued to fund the projects specifically approved 195.15by the voters at the referendum authorizing the tax new text begin or extending the tax new text end . The portion of 195.16revenues from the city going to fund the regional airport or regional library located in the 195.17city of St. Cloud will be as required under the applicable joint powers agreement. 195.18    (c) The use of revenues received from the taxes authorized in subdivision 1 for 195.19projects allowed under paragraphs (a) and (b) are limited to the amount authorized for 195.20each project under the enabling referendum. 195.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for the city that approves them the new text end 195.22 new text begin day after compliance by the governing body of each city with Minnesota Statutes, section new text end 195.23 new text begin 645.021, subdivision 3. new text end 195.24    Sec. 53. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision 195.254, is amended to read: 195.26    Subd. 4. Termination of tax. The tax imposed in the cities of St. Joseph, St. Cloud, 195.27St. Augusta, Sartell, Sauk Rapids, and Waite Park under subdivision 1 expires when the 195.28city council determines that sufficient funds have been collected from the tax to retire or 195.29redeem the bonds and obligations authorized under subdivision 2, paragraph (a), but no 195.30later than December 31, 2018. new text begin Notwithstanding Minnesota Statutes, section 297A.99, new text end 195.31 new text begin subdivision 3, paragraphs (a), (c), and (d), a city may extend the tax imposed under new text end 195.32 new text begin subdivision 1 through December 31, 2038, if approved under the referendum authorizing new text end 195.33 new text begin the tax under subdivision 1 or if approved by voters of the city at a general election held new text end 195.34 new text begin no later than November 6, 2017. new text end 196.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for the city that approves them the new text end 196.2 new text begin day after compliance by the governing body of each city with Minnesota Statutes, section new text end 196.3 new text begin 645.021, subdivision 3. new text end 196.4    Sec. 54. Laws 2008, chapter 366, article 7, section 19, subdivision 3, as amended by 196.5Laws 2011, First Special Session chapter 7, article 4, section 8, is amended to read: 196.6    Subd. 3. Use of revenues. Notwithstanding Minnesota Statutes, section 297A.99, 196.7subdivision 3 , paragraph (b), the proceeds of the tax imposed under this section shall be 196.8used to pay for the costs of new text begin improvements to the Sportsman Park/Ballfields, Riverside new text end 196.9 new text begin Park, Lions Park/Pavilion, Cedar South Park also known as Eldorado Park, and Spring new text end 196.10 new text begin Street Park; improvements to and extension of the River County Bike Trail; new text end acquisition, 196.11 new text begin and new text end construction, improvement, and development of regional parks, bicycle trails, park 196.12land, open space, and new text begin of a new text end pedestrian walkways, as described in the city improvement 196.13plan adopted by the city council by resolution on December 12, 2006, and new text begin walkway new text end 196.14 new text begin over Interstate 94 and State Highway 24; and the acquisition of new text end land and new text begin construction of new text end 196.15buildings for a community and recreation center. The total amount of revenues from the 196.16taxes in subdivisions 1 and 2 that may be used to fund these projects is $12,000,000 196.17plus any associated bond costs. 196.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 196.19 new text begin governing body of the city of Clearwater with Minnesota Statutes, section 645.021, new text end 196.20 new text begin subdivisions 2 and 3. new text end 196.21    Sec. 55. new text begin DULUTH LOCAL SALES TAX; RATE REDUCTION. new text end 196.22 new text begin Notwithstanding Minnesota Statutes, section 297A.99 or 645.021, or any ordinance, new text end 196.23 new text begin city charter, or other provision of law, the city of Duluth shall reduce its rate of tax new text end 196.24 new text begin authorized under Laws 1973, chapter 461, section 1, as amended by Laws 1977, chapter new text end 196.25 new text begin 438, to 0.87 percent. new text end 196.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 196.27 new text begin June 30, 2013. new text end 196.28    Sec. 56. new text begin REPEALER. new text end 196.29 new text begin Minnesota Statutes 2012, sections 297A.61, subdivision 27; 297A.66, subdivision 4; new text end 196.30 new text begin 297A.67, subdivision 8; and 297A.68, subdivisions 9, 22, and 35, new text end new text begin are repealed. new text end 196.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 196.32 new text begin June 30, 2013. new text end 197.1ARTICLE 8 197.2LOCAL DEVELOPMENT 197.3    Section 1. Minnesota Statutes 2012, section 469.174, subdivision 2, is amended to read: 197.4    Subd. 2. Authority. "Authority" means a rural development financing authority 197.5created pursuant to sections 469.142 to 469.151; a housing and redevelopment authority 197.6created pursuant to sections 469.001 to 469.047; a port authority created pursuant to 197.7sections 469.048 to 469.068; an economic development authority created pursuant to 197.8sections 469.090 to 469.108; a redevelopment agency as defined in sections 469.152 to 197.9469.165 ; a municipality that is administering a development district created pursuant to 197.10sections 469.124 to 469.134 or any special law; a municipality that undertakes a project 197.11pursuant to sections 469.152 to 469.165, except a town located outside the metropolitan 197.12area or with a population of 5,000 persons or less; new text begin a municipality that undertakes a project new text end 197.13 new text begin located in an area designated under subdivision 30; new text end or a municipality that exercises the 197.14powers of a port authority pursuant to any general or special law. 197.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 197.16    Sec. 2. Minnesota Statutes 2012, section 469.174, is amended by adding a subdivision 197.17to read: 197.18     new text begin Subd. 19a. new text end new text begin Soil deficiency district. new text end new text begin "Soil deficiency district" means a type of tax new text end 197.19 new text begin increment financing district consisting of a project, or portions of a project, within which new text end 197.20 new text begin the authority finds by resolution that the following conditions exist: new text end 197.21 new text begin (1) parcels consisting of 70 percent of the area of the district contain unusual terrain new text end 197.22 new text begin or soil deficiencies which require substantial filling, grading, or other physical preparation new text end 197.23 new text begin for use and a parcel is eligible for inclusion if at least 50 percent of the area of the parcel new text end 197.24 new text begin requires substantial filling, grading, or other physical preparation for use; and new text end 197.25 new text begin (2) the estimated cost of the physical preparation under clause (1), but excluding new text end 197.26 new text begin costs directly related to roads as defined in section 160.01, and local improvements as new text end 197.27 new text begin described in sections 429.021, subdivision 1, clauses (1) to (7), (11), and (12), and 430.01, new text end 197.28 new text begin exceeds the fair market value of the land before completion of the preparation. new text end 197.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 197.30 new text begin certification is made after April 30, 2013. new text end 197.31    Sec. 3. Minnesota Statutes 2012, section 469.174, is amended by adding a subdivision 197.32to read: 198.1     new text begin Subd. 30. new text end new text begin Mining reclamation project area. new text end new text begin (a) An authority may designate an new text end 198.2 new text begin area within its jurisdiction as a mining reclamation project area by finding by resolution, new text end 198.3 new text begin that parcels consisting of at least 70 percent of the acreage, excluding street and railroad new text end 198.4 new text begin rights-of-way, are characterized by one or more of the following conditions: new text end 198.5 new text begin (1) peat or other soils with geotechnical deficiencies that impair development of new text end 198.6 new text begin buildings or infrastructure; new text end 198.7 new text begin (2) soils or terrain that requires substantial filling in order to permit the development new text end 198.8 new text begin of buildings or infrastructure; new text end 198.9 new text begin (3) landfills, dumps, or similar deposits of municipal or private waste; new text end 198.10 new text begin (4) quarries or similar resource extraction sites; new text end 198.11 new text begin (5) floodway; and new text end 198.12 new text begin (6) substandard buildings, within the meaning of section 469.174, subdivision 10. new text end 198.13 new text begin (b) For the purposes of paragraph (a), clauses (1) to (5), a parcel is characterized by new text end 198.14 new text begin the relevant condition if at least 50 percent of the area of the parcel contains the relevant new text end 198.15 new text begin condition. For the purposes of paragraph (a), clause (6), a parcel is characterized by new text end 198.16 new text begin substandard buildings if substandard buildings occupy at least 30 percent of the area new text end 198.17 new text begin of the parcel. new text end 198.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 198.19 new text begin certification is made after April 30, 2013. new text end 198.20    Sec. 4. Minnesota Statutes 2012, section 469.175, subdivision 3, is amended to read: 198.21    Subd. 3. Municipality approval. (a) A county auditor shall not certify the original 198.22net tax capacity of a tax increment financing district until the tax increment financing plan 198.23proposed for that district has been approved by the municipality in which the district 198.24is located. If an authority that proposes to establish a tax increment financing district 198.25and the municipality are not the same, the authority shall apply to the municipality in 198.26which the district is proposed to be located and shall obtain the approval of its tax 198.27increment financing plan by the municipality before the authority may use tax increment 198.28financing. The municipality shall approve the tax increment financing plan only after a 198.29public hearing thereon after published notice in a newspaper of general circulation in the 198.30municipality at least once not less than ten days nor more than 30 days prior to the date 198.31of the hearing. The published notice must include a map of the area of the district from 198.32which increments may be collected and, if the project area includes additional area, a map 198.33of the project area in which the increments may be expended. The hearing may be held 198.34before or after the approval or creation of the project or it may be held in conjunction with 198.35a hearing to approve the project. 199.1    (b) Before or at the time of approval of the tax increment financing plan, the 199.2municipality shall make the following findings, and shall set forth in writing the reasons 199.3and supporting facts for each determination: 199.4    (1) that the proposed tax increment financing district is a redevelopment district, a 199.5renewal or renovation district, a housing district, a soils condition district, new text begin soil deficiency new text end 199.6 new text begin district, new text end or an economic development district; if the proposed district is a redevelopment 199.7district or a renewal or renovation district, the reasons and supporting facts for the 199.8determination that the district meets the criteria of section 469.174, subdivision 10, 199.9paragraph (a), clauses (1) and (2), or subdivision 10a, must be documented in writing 199.10and retained and made available to the public by the authority until the district has been 199.11terminated; 199.12    (2) that, in the opinion of the municipality: 199.13    (i) the proposed development or redevelopment would not reasonably be expected to 199.14occur solely through private investment within the reasonably foreseeable future; and 199.15    (ii) the increased market value of the site that could reasonably be expected to occur 199.16without the use of tax increment financing would be less than the increase in the market 199.17value estimated to result from the proposed development after subtracting the present 199.18value of the projected tax increments for the maximum duration of the district permitted 199.19by the plan. The requirements of this item do not apply if the district is a housing district; 199.20    (3) that the tax increment financing plan conforms to the general plan for the 199.21development or redevelopment of the municipality as a whole; 199.22    (4) that the tax increment financing plan will afford maximum opportunity, 199.23consistent with the sound needs of the municipality as a whole, for the development or 199.24redevelopment of the project by private enterprise; 199.25    (5) that the municipality elects the method of tax increment computation set forth in 199.26section 469.177, subdivision 3, paragraph (b), if applicable new text begin ; and new text end 199.27 new text begin (6) that for a redevelopment district, renewal and renovation district, soils condition new text end 199.28 new text begin district, or soil deficiency district established by the authority in a mining reclamation new text end 199.29 new text begin project area, the reasons and supporting facts for the determination that the mining new text end 199.30 new text begin reclamation project area meets the requirements under section 469.174, subdivision 30, new text end 199.31 new text begin must be documented in writing and retained and made available to the public by the new text end 199.32 new text begin authority until two years after the district is decertified. These findings must have been new text end 199.33 new text begin made and documented no more than ten years before approval of the tax increment new text end 199.34 new text begin financing plan for the district new text end . 199.35    (c) When the municipality and the authority are not the same, the municipality shall 199.36approve or disapprove the tax increment financing plan within 60 days of submission by the 200.1authority. When the municipality and the authority are not the same, the municipality may 200.2not amend or modify a tax increment financing plan except as proposed by the authority 200.3pursuant to subdivision 4. Once approved, the determination of the authority to undertake 200.4the project through the use of tax increment financing and the resolution of the governing 200.5body shall be conclusive of the findings therein and of the public need for the financing. 200.6    (d) For a district that is subject to the requirements of paragraph (b), clause (2), 200.7item (ii), the municipality's statement of reasons and supporting facts must include all of 200.8the following: 200.9    (1) an estimate of the amount by which the market value of the site will increase 200.10without the use of tax increment financing; 200.11    (2) an estimate of the increase in the market value that will result from the 200.12development or redevelopment to be assisted with tax increment financing; and 200.13    (3) the present value of the projected tax increments for the maximum duration of 200.14the district permitted by the tax increment financing plan. 200.15    (e) For purposes of this subdivision, "site" means the parcels on which the 200.16development or redevelopment to be assisted with tax increment financing will be located. 200.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 200.18 new text begin certification is made after April 30, 2013. new text end 200.19    Sec. 5. Minnesota Statutes 2012, section 469.176, subdivision 1b, is amended to read: 200.20    Subd. 1b. Duration limits; terms. (a) No tax increment shall in any event be 200.21paid to the authority: 200.22(1) after 15 years after receipt by the authority of the first increment for a renewal 200.23and renovation district; 200.24(2) after 20 years after receipt by the authority of the first increment for a soils 200.25condition district new text begin or a soil deficiency district new text end ; 200.26(3) after eight years after receipt by the authority of the first increment for an 200.27economic development district; 200.28(4) for a housing district, a compact development district, or a redevelopment 200.29district, after 25 years from the date of receipt by the authority of the first increment. 200.30(b) For purposes of determining a duration limit under this subdivision or subdivision 200.311e that is based on the receipt of an increment, any increments from taxes payable in the year 200.32in which the district terminates shall be paid to the authority. This paragraph does not affect 200.33a duration limit calculated from the date of approval of the tax increment financing plan or 200.34based on the recovery of costs or to a duration limit under subdivision 1c. This paragraph 200.35does not supersede the restrictions on payment of delinquent taxes in subdivision 1f. 201.1(c) An action by the authority to waive or decline to accept an increment has no 201.2effect for purposes of computing a duration limit based on the receipt of increment under 201.3this subdivision or any other provision of law. The authority is deemed to have received an 201.4increment for any year in which it waived or declined to accept an increment, regardless 201.5of whether the increment was paid to the authority. 201.6(d) Receipt by a hazardous substance subdistrict of an increment as a result of a 201.7reduction in original net tax capacity under section 469.174, subdivision 7, paragraph 201.8(b), does not constitute receipt of increment by the overlying district for the purpose of 201.9calculating the duration limit under this section. 201.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 201.11 new text begin certification is made after April 30, 2013. new text end 201.12    Sec. 6. Minnesota Statutes 2012, section 469.176, subdivision 4b, is amended to read: 201.13    Subd. 4b. Soils condition districts. Revenue derived from Tax increment from a 201.14soils condition district may be used only to (1) acquire parcels on which the improvements 201.15described in clause (2) will occur; (2) pay for the cost of removal or remedial action; and 201.16(3) pay for the administrative expenses of the authority allocable to the district, including 201.17the cost of preparation of the development action response plan. new text begin For a soils condition new text end 201.18 new text begin district located in a mining reclamation project area, tax increments may also be expended new text end 201.19 new text begin on the additional cost of public improvements directly caused by the removal or remedial new text end 201.20 new text begin action and located within the mining reclamation project area. new text end 201.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 201.22 new text begin certification is made after April 30, 2013. new text end 201.23    Sec. 7. Minnesota Statutes 2012, section 469.176, subdivision 4c, is amended to read: 201.24    Subd. 4c. Economic development districts. (a) Revenue derived from tax increment 201.25from an economic development district may not be used to provide improvements, loans, 201.26subsidies, grants, interest rate subsidies, or assistance in any form to developments 201.27consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and 201.28facilities (determined on the basis of square footage) are used for a purpose other than: 201.29(1) the manufacturing or production of tangible personal property, including 201.30processing resulting in the change in condition of the property; 201.31(2) warehousing, storage, and distribution of tangible personal property, excluding 201.32retail sales; 201.33(3) research and development related to the activities listed in clause (1) or (2); 202.1(4) telemarketing if that activity is the exclusive use of the property; 202.2(5) tourism facilities; new text begin or new text end 202.3(6) qualified border retail facilities; or 202.4(7) space necessary for and related to the activities listed in clauses (1) to (6) new text begin (5) new text end . 202.5(b) Notwithstanding the provisions of this subdivision, revenues derived from tax 202.6increment from an economic development district may be used to provide improvements, 202.7loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000 202.8square feet of any separately owned commercial facility located within the municipal 202.9jurisdiction of a small city, if the revenues derived from increments are spent only to 202.10assist the facility directly or for administrative expenses, the assistance is necessary to 202.11develop the facility, and all of the increments, except those for administrative expenses, 202.12are spent only for activities within the district. 202.13(c) A city is a small city for purposes of this subdivision if the city was a small city 202.14in the year in which the request for certification was made and applies for the rest of 202.15the duration of the district, regardless of whether the city qualifies or ceases to qualify 202.16as a small city. 202.17(d) Notwithstanding the requirements of paragraph (a) and the finding requirements 202.18of section 469.174, subdivision 12, tax increments from an economic development district 202.19may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or 202.20assistance in any form to developments consisting of buildings and ancillary facilities, if 202.21all the following conditions are met: 202.22(1) the municipality finds that the project will create or retain jobs in this state, 202.23including construction jobs, and that construction of the project would not have 202.24commenced before July 1, 2012 new text begin June 30, 2014 new text end , without the authority providing assistance 202.25under the provisions of this paragraph; 202.26(2) construction of the project begins no later than July 1, 2012 new text begin June 30, 2014 new text end ; 202.27(3) the request for certification of the district is made no later than June 30, 2012 202.28 new text begin December 31, 2014 new text end ; and 202.29(4) for development of housing under this paragraph, the construction must begin 202.30before January 1, 2012. 202.31The provisions of this paragraph may not be used to assist housing that is developed 202.32to qualify under section 469.1761, subdivision 2 or 3, or similar requirements of other law, 202.33if construction of the project begins later than July 1, 2011. 202.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 202.35    Sec. 8. Minnesota Statutes 2012, section 469.176, subdivision 4m, is amended to read: 203.1    Subd. 4m. Temporary authority to stimulate construction. (a) Notwithstanding 203.2the restrictions in any other subdivision of this section or any other law to the contrary, 203.3except the requirement to pay bonds to which the increments are pledged and the 203.4provisions of subdivisions 4g and 4h, the authority may spend tax increments for one or 203.5more of the following purposes: 203.6(1) to provide improvements, loans, interest rate subsidies, or assistance in any 203.7form to private development consisting of the construction or substantial rehabilitation 203.8of buildings and ancillary facilities, if doing so will create or retain jobs in this state, 203.9including construction jobs, and that the construction commences before July 1, 2012 new text begin June new text end 203.10 new text begin 30, 2014 new text end , and would not have commenced before that date without the assistance; or 203.11(2) to make an equity or similar investment in a corporation, partnership, or limited 203.12liability company that the authority determines is necessary to make construction of a 203.13development that meets the requirements of clause (1) financially feasible. 203.14(b) The authority may undertake actions under the authority of this subdivision only 203.15after approval by the municipality of a written spending plan that specifically authorizes 203.16the authority to take the actions new text begin . The spending plan must contain a detailed description new text end 203.17 new text begin of each action to be undertaken new text end . The municipality shall approve the spending plan only 203.18after a public hearing after published notice in a newspaper of general circulation in 203.19the municipality at least once, not less than ten days nor more than 30 days prior to the 203.20date of the hearing. 203.21(c) The authority to spend tax increments under this subdivision expires December 203.2231, 2012 new text begin December 31, 2014 new text end . 203.23(d) For a development consisting of housing, the authority to spend tax increments 203.24under this subdivision expires December 31, 2011, and construction must commence 203.25before July 1, 2011, except the authority to spend tax increments on market rate housing 203.26developments under this subdivision expires July 31, 2012, and construction must 203.27commence before January 1, 2012. 203.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 203.29 new text begin and applies to all tax increment financing districts, regardless of when the request for new text end 203.30 new text begin certification was made. The amendments to paragraph (b) apply to projects approved new text end 203.31 new text begin after the day following final enactment. new text end 203.32    Sec. 9. Minnesota Statutes 2012, section 469.176, is amended by adding a subdivision 203.33to read: 204.1     new text begin Subd. 4n. new text end new text begin Soil deficiency district. new text end new text begin Tax increments from a soil deficiency district new text end 204.2 new text begin may only be used to pay for the following costs for activities located within the mining new text end 204.3 new text begin reclamation project area: new text end 204.4 new text begin (1) acquisition of parcels on which the improvements described in clause (2) will new text end 204.5 new text begin occur; new text end 204.6 new text begin (2) the cost of correcting the unusual terrain or soil deficiencies and the additional new text end 204.7 new text begin cost of installing public improvements directly caused by the deficiencies; new text end 204.8 new text begin (3) administrative expenses of the authority allocable to the district; and new text end 204.9 new text begin (4) costs described in subdivision 4j for the district, if these payments do not exceed new text end 204.10 new text begin 25 percent of the tax increment from the district. new text end 204.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 204.12 new text begin certification is made after April 30, 2013. new text end 204.13    Sec. 10. Minnesota Statutes 2012, section 469.176, subdivision 6, is amended to read: 204.14    Subd. 6. Action required. (a) If, after four years from the date of certification of 204.15the original net tax capacity of the tax increment financing district pursuant to section 204.16469.177 , no demolition, rehabilitation, or renovation of property or other site preparation, 204.17including qualified improvement of a street adjacent to a parcel but not installation 204.18of utility service including sewer or water systems, has been commenced on a parcel 204.19located within a tax increment financing district by the authority or by the owner of the 204.20parcel in accordance with the tax increment financing plan, no additional tax increment 204.21may be taken from that parcel, and the original net tax capacity of that parcel shall be 204.22excluded from the original net tax capacity of the tax increment financing district. If the 204.23authority or the owner of the parcel subsequently commences demolition, rehabilitation, 204.24or renovation or other site preparation on that parcel including qualified improvement of 204.25a street adjacent to that parcel, in accordance with the tax increment financing plan, the 204.26authority shall certify to the county auditor that the activity has commenced, and the 204.27county auditor shall certify the net tax capacity thereof as most recently certified by the 204.28commissioner of revenue and add it to the original net tax capacity of the tax increment 204.29financing district. The county auditor must enforce the provisions of this subdivision. The 204.30authority must submit to the county auditor evidence that the required activity has taken 204.31place for each parcel in the district. The evidence for a parcel must be submitted by 204.32February 1 of the fifth year following the year in which the parcel was certified as included 204.33in the district. For purposes of this subdivision, qualified improvements of a street are 204.34limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) 204.35substantial reconstruction or rebuilding of an existing street. 205.1(b) For districts which were certified on or after January 1, 2005, and before April 205.220, 2009, the four-year period under paragraph (a) is increased to six years new text begin deemed to end new text end 205.3 new text begin on December 31, 2016 new text end . 205.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 205.5 new text begin and applies to districts certified on or after January 1, 2005, and before April 20, 2009. new text end 205.6    Sec. 11. Minnesota Statutes 2012, section 469.1763, subdivision 3, is amended to read: 205.7    Subd. 3. Five-year new text begin Ten-year new text end rule. (a) Revenues derived from tax increments are 205.8considered to have been expended on an activity within the district under subdivision 2 205.9only if one of the following occurs: 205.10(1) before or within five new text begin ten new text end years after certification of the district, the revenues are 205.11actually paid to a third party with respect to the activity; 205.12(2) bonds, the proceeds of which must be used to finance the activity, are issued and 205.13sold to a third party before or within five new text begin ten new text end years after certification, the revenues are 205.14spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance, 205.15reasonably expected to be spent before the end of the later of (i) the five-year new text begin ten-year new text end 205.16 period, or (ii) a reasonable temporary period within the meaning of the use of that term 205.17under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably 205.18required reserve or replacement fund; 205.19(3) binding contracts with a third party are entered into for performance of the 205.20activity before or within five new text begin ten new text end years after certification of the district and the revenues 205.21are spent under the contractual obligation; 205.22(4) costs with respect to the activity are paid before or within five new text begin ten new text end years after 205.23certification of the district and the revenues are spent to reimburse a party for payment 205.24of the costs, including interest on unreimbursed costs; or 205.25(5) expenditures are made for housing purposes as permitted by subdivision 2, 205.26paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted 205.27by subdivision 2, paragraph (e). 205.28(b) For purposes of this subdivision, bonds include subsequent refunding bonds if 205.29the original refunded bonds meet the requirements of paragraph (a), clause (2). 205.30(c) For a redevelopment district or a renewal and renovation district certified after 205.31June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph 205.32(a) are extended to ten years after certification of the district. This extension is provided 205.33primarily to accommodate delays in development activities due to unanticipated economic 205.34circumstances. 206.1 new text begin (d) If the authority so elects in the tax increment financing plan for a redevelopment new text end 206.2 new text begin district, renewal and renovation district, soils condition district, or soil deficiency district new text end 206.3 new text begin located in a mining reclamation project area, the ten-year periods described in paragraph new text end 206.4 new text begin (a) do not apply. new text end 206.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts certified after June 30, new text end 206.6 new text begin 2003. new text end 206.7    Sec. 12. Minnesota Statutes 2012, section 469.1763, subdivision 4, is amended to read: 206.8    Subd. 4. Use of revenues for decertification. (a) In each year beginning with the 206.9sixth new text begin 11th new text end year following certification of the district, if the applicable in-district percent of 206.10the revenues derived from tax increments paid by properties in the district exceeds the 206.11amount of expenditures that have been made for costs permitted under subdivision 3, an 206.12amount equal to the difference between the in-district percent of the revenues derived from 206.13tax increments paid by properties in the district and the amount of expenditures that have 206.14been made for costs permitted under subdivision 3 must be used and only used to pay or 206.15defease the following or be set aside to pay the following: 206.16(1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b); 206.17(2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4); 206.18(3) credit enhanced bonds to which the revenues derived from tax increments are 206.19pledged, but only to the extent that revenues of the district for which the credit enhanced 206.20bonds were issued are insufficient to pay the bonds and to the extent that the increments 206.21from the applicable pooling percent share for the district are insufficient; or 206.22(4) the amount provided by the tax increment financing plan to be paid under 206.23subdivision 2, paragraphs (b), (d), and (e). 206.24(b) The district must be decertified and the pledge of tax increment discharged 206.25when the outstanding bonds have been defeased and when sufficient money has been set 206.26aside to pay, based on the increment to be collected through the end of the calendar year, 206.27the following amounts: 206.28(1) contractual obligations as defined in subdivision 3, paragraph (a), clauses (3) 206.29and (4); 206.30(2) the amount specified in the tax increment financing plan for activities qualifying 206.31under subdivision 2, paragraph (b), that have not been funded with the proceeds of bonds 206.32qualifying under paragraph (a), clause (1); and 206.33(3) the additional expenditures permitted by the tax increment financing plan for 206.34housing activities under an election under subdivision 2, paragraph (d), that have not been 206.35funded with the proceeds of bonds qualifying under paragraph (a), clause (1). 207.1 new text begin (c) If the authority so elects in the tax increment financing plan for a redevelopment new text end 207.2 new text begin district, renewal and renovation district, soils condition district, or soil deficiency district new text end 207.3 new text begin located in a mining reclamation project area, the provisions of this section do not apply. new text end 207.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts certified after June 30, new text end 207.5 new text begin 2003. new text end 207.6    Sec. 13. Minnesota Statutes 2012, section 469.177, subdivision 1a, is amended to read: 207.7    Subd. 1a. Original local tax rate. At the time of the initial certification of the 207.8original net tax capacity for a tax increment financing district or a subdistrict, the county 207.9auditor shall certify the original local tax rate that applies to the district or subdistrict. The 207.10original local tax rate is the sum of all the local tax rates new text begin , excluding that portion of the new text end 207.11 new text begin school rate attributable to the general education levy under section 126C.13, new text end that apply 207.12to a property in the district or subdistrict. The local tax rate to be certified is the rate in 207.13effect for the same taxes payable year applicable to the tax capacity values certified as 207.14the district's or subdistrict's original tax capacity. The resulting tax capacity rate is the 207.15original local tax rate for the life of the district or subdistrict. 207.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for districts for which the request for new text end 207.17 new text begin certification is made after April 15, 2013. new text end 207.18    Sec. 14. Laws 2008, chapter 366, article 5, section 26, is amended to read: 207.19    Sec. 26. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR 207.20RULE. 207.21     new text begin (a) new text end The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that 207.22activities must be undertaken within a five-year period from the date of certification of 207.23a tax increment financing district, are increased to a ten-year new text begin 15-year new text end period for the 207.24Port Authority of the City of Bloomington's Tax Increment Financing District No. 1-I, 207.25Bloomington Central Station. 207.26     new text begin (b) Notwithstanding the provisions of Minnesota Statutes, section 469.176, or any new text end 207.27 new text begin other law to the contrary, the city of Bloomington and its port authority may extend the new text end 207.28 new text begin duration limits of the district for a period through December 31, 2039. new text end 207.29     new text begin (c) Effective for taxes payable in 2014, tax increment for the district must be new text end 207.30 new text begin computed using the current local tax rate, notwithstanding the provisions of Minnesota new text end 207.31 new text begin Statutes, section 469.177, subdivision 1a. new text end 207.32 new text begin EFFECTIVE DATE. new text end new text begin Paragraphs (a) and (c) are effective upon compliance by new text end 207.33 new text begin the governing body of the city of Bloomington with the requirements of Minnesota new text end 208.1 new text begin Statutes, section 645.021, subdivision 3. Paragraph (b) is effective upon compliance by new text end 208.2 new text begin the governing bodies of the city of Bloomington, Hennepin County, and Independent new text end 208.3 new text begin School District No. 271 with the requirements of Minnesota Statutes, sections 469.1782, new text end 208.4 new text begin subdivision 2, and 645.021, subdivision 3. new text end 208.5    Sec. 15. Laws 2008, chapter 366, article 5, section 34, as amended by Laws 2009, 208.6chapter 88, article 5, section 11, is amended to read: 208.7    Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY new text begin PARCELS new text end 208.8 new text begin DEEMED OCCUPIED new text end . 208.9    (a) The provisions of this section apply to redevelopment tax increment financing 208.10districts created by the Housing and Redevelopment Authority in and for the city of 208.11Oakdale in the areas comprised of the parcels with the following parcel identification 208.12numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056; 208.133102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059; 208.143102921320060; 3102921320061; 3102921330005; and 3102921330004; and (2) 208.152902921330001 and 2902921330005. 208.16    (b) For a district subject to this section, the Housing and Redevelopment Authority 208.17may, when requesting certification of the original tax capacity of the district under 208.18Minnesota Statutes, section , elect to have the original tax capacity of the district 208.19be certified as the tax capacity of the land. 208.20    (c) The authority to request certification of a district under this section expires on 208.21July 1, 2013. 208.22     new text begin (a) Parcel numbers 3102921320054, 3102921320055, 3102921320056, new text end 208.23 new text begin 3102921320057, 3102921320061, and 3102921330004 are deemed to meet the new text end 208.24 new text begin requirements of Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), new text end 208.25 new text begin notwithstanding any contrary provisions of that paragraph, if the following conditions new text end 208.26 new text begin are met: new text end 208.27     new text begin (1) a building located on any part of each of the specified parcels was demolished after new text end 208.28 new text begin the Housing and Redevelopment Authority for the city of Oakdale adopted a resolution new text end 208.29 new text begin under Minnesota Statutes, section 469.174, subdivision 10, paragraph (d), clause (3); new text end 208.30     new text begin (2) the building was removed either by the authority, by a developer under a new text end 208.31 new text begin development agreement with the Housing and Redevelopment Authority for the city of new text end 208.32 new text begin Oakdale, or by the owner of the property without entering into a development agreement new text end 208.33 new text begin with the Housing and Redevelopment Authority for the city of Oakdale; and new text end 208.34     new text begin (3) the request for certification of the parcel as part of a district is filed with the new text end 208.35 new text begin county auditor by December 31, 2017. new text end 209.1     new text begin (b) The provisions of this section allow an election by the authority for the parcels new text end 209.2 new text begin deemed occupied under paragraph (a), notwithstanding the provisions of Minnesota new text end 209.3 new text begin Statutes, sections 469.174, subdivision 10, paragraph (d), and 469.177, subdivision 1, new text end 209.4 new text begin paragraph (f). new text end 209.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the governing new text end 209.6 new text begin body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021, new text end 209.7 new text begin subdivision 3. new text end 209.8    Sec. 16. Laws 2010, chapter 216, section 55, is amended to read: 209.9    Sec. 55. OAKDALE; TAX INCREMENT FINANCING DISTRICT. 209.10    Subdivision 1. Duration of district. Notwithstanding the provisions of Minnesota 209.11Statutes, section 469.176, subdivision 1b, the city of Oakdale may collect tax increments 209.12from Tax Increment Financing District No. 6 (Bergen Plaza) through December 31, 2024 209.13 new text begin 2030 new text end , subject to the conditions described in subdivision 2. 209.14    Subd. 2. Conditions for extension. (a) Subdivision 1 applies only if the following 209.15conditions are met: 209.16    (1) by July 1, 2011, the city of Oakdale has entered into a development agreement 209.17with a private developer for development or redevelopment of all or a substantial part of 209.18the area new text begin parcels described in clause (2) new text end ; and 209.19    (2) by November 1, 2011, the city of Oakdale or a private developer commences 209.20construction of streets, traffic improvements, water, sewer, or related infrastructure that 209.21serves one or both of the parcels with the following parcel identification numbers: 209.222902921330001 and 2902921330005. For the purposes of this section, construction 209.23commences upon grading or other visible improvements that are part of the subject 209.24infrastructure. 209.25    (b) All tax increments received by the city of Oakdale under subdivision 1 after 209.26December 31, 2016, must be used only to pay costs that are both new text begin : new text end 209.27    (1) related to redevelopment of the parcels specified in this subdivision new text begin or new text end 209.28 new text begin parcel numbers 3102921320053, 3102921320054, 3102921320055, 3102921320056, new text end 209.29 new text begin 3102921320057, 3102921320058, 3102921320059, 3102921320060, 3102921320061, new text end 209.30 new text begin 3102921320062, 3102921320063, 3102921330004, and 3102921330005, new text end including, 209.31without limitation, any of the infrastructure referenced in this subdivision new text begin , that serves new text end 209.32 new text begin any of the referenced parcels new text end ; and 209.33    (2) otherwise eligible under law to be paid with increments from the specified tax 209.34increment financing district, except the authority under this clause does not apply to 209.35increments collected after the conclusion of the duration limit under general law. 210.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the governing new text end 210.2 new text begin body of the city of Oakdale with the requirements of Minnesota Statutes, sections new text end 210.3 new text begin 469.1782, subdivision 2, and 645.021, subdivision 3. new text end 210.4    Sec. 17. new text begin USE OF TAX INCREMENT. new text end 210.5     new text begin Notwithstanding Minnesota Statutes, section 469.176, subdivision 4d, beginning new text end 210.6 new text begin on the effective date of this section, the city of Oakdale may spend tax increments from new text end 210.7 new text begin Tax Increment Financing District No. 1-6 (Echo Ridge) to pay costs that are related to new text end 210.8 new text begin redevelopment of parcel numbers 3102921320053, 3102921320054, 3102921320055, new text end 210.9 new text begin 3102921320056, 3102921320057, 3102921320058, 3102921320059, 3102921320060, new text end 210.10 new text begin 3102921320061, 3102921320062, 3102921320063, 3102921330004, and 3102921330005 new text end 210.11 new text begin (the Tanner's Lake redevelopment site), including without limitation any infrastructure new text end 210.12 new text begin that serves the referenced parcels. new text end 210.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the governing new text end 210.14 new text begin body of the city of Oakdale with the requirements of Minnesota Statutes, section 645.021, new text end 210.15 new text begin subdivision 3. new text end 210.16    Sec. 18. new text begin CITY OF MINNEAPOLIS; STREETCAR FINANCING. new text end 210.17     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms new text end 210.18 new text begin have the meanings given them. new text end 210.19 new text begin (b) "City" means the city of Minneapolis. new text end 210.20 new text begin (c) "County" means Hennepin County. new text end 210.21 new text begin (d) "District" means the areas certified by the city under subdivision 2 for collection new text end 210.22 new text begin of value capture taxes. new text end 210.23 new text begin (e) "Project area" means the area including one city block on either side of a streetcar new text end 210.24 new text begin line designated by the city to serve the downtown and adjacent neighborhoods of the city. new text end 210.25     new text begin Subd. 2. new text end new text begin Authority to establish district. new text end new text begin (a) The governing body of the city may, new text end 210.26 new text begin by resolution, establish a value capture district consisting of some or all of the following new text end 210.27 new text begin parcels located within the city, as described in the resolution: 27-029-24-31-0130; new text end 210.28 new text begin 22-029-24-41-0008; 22-029-24-44-0038; 22-029-24-44-0035; 22-029-24-44-0036; new text end 210.29 new text begin 22-029-24-44-0037; and 22-029-24-42-0051. new text end 210.30 new text begin (b) The city may establish the district and the project area only after holding a public new text end 210.31 new text begin hearing on its proposed creation after publishing notice of the hearing and the proposal at new text end 210.32 new text begin least once not less than ten days nor more than 30 days before the date of the hearing. new text end 211.1     new text begin Subd. 3. new text end new text begin Calculation of value capture district; administrative provisions. new text end new text begin (a) If new text end 211.2 new text begin the city establishes a value capture district under subdivision 2, the city shall request the new text end 211.3 new text begin county auditor to certify the district for calculation of the district's tax revenues. new text end 211.4 new text begin (b) For purposes of calculating the tax revenues of the district, the county auditor new text end 211.5 new text begin shall treat the district as if it were a request for certification of a tax increment financing new text end 211.6 new text begin district under the provisions of Minnesota Statutes, section 469.177, subdivision 1, new text end 211.7 new text begin and shall calculate the tax revenues of the district for each year of its duration under new text end 211.8 new text begin subdivision 4 as equaling the amount of tax increment under Minnesota Statutes, section new text end 211.9 new text begin 469.177, subdivisions 1, 2, and 3. The city shall provide the county auditor with the new text end 211.10 new text begin necessary information to certify the district, including the option for calculating revenues new text end 211.11 new text begin derived from the areawide tax rate under Minnesota Statutes, chapter 473F. new text end 211.12 new text begin (c) The county auditor shall pay to the city at the same times provided for settlement new text end 211.13 new text begin of taxes and payment of tax increments the tax revenues of the district. The city must use new text end 211.14 new text begin the tax revenues as provided under subdivision 4. new text end 211.15     new text begin Subd. 4. new text end new text begin Permitted uses of district tax revenues. new text end new text begin (a) In addition to paying for new text end 211.16 new text begin reasonable administrative costs of the district, the city may spend tax revenues of the new text end 211.17 new text begin district for property acquisition, improvements, and equipment to be used for operations new text end 211.18 new text begin within the project area, along with related costs, for: new text end 211.19 new text begin (1) planning, design, and engineering services related to the construction of the new text end 211.20 new text begin streetcar line; new text end 211.21 new text begin (2) acquiring property for, constructing, and installing a streetcar line; new text end 211.22 new text begin (3) acquiring and maintaining equipment and rolling stock and related facilities, such new text end 211.23 new text begin as maintenance facilities, which need not be located in the project area; new text end 211.24 new text begin (4) acquiring, constructing, or improving transit stations; and new text end 211.25 new text begin (5) acquiring or improving public space, including the construction and installation new text end 211.26 new text begin of improvements to streets and sidewalks, decorative lighting and surfaces, and plantings new text end 211.27 new text begin related to the streetcar line. new text end 211.28 new text begin (b) The city may issue bonds or other obligations under Minnesota Statutes, chapter new text end 211.29 new text begin 475, without an election, to fund acquisition or improvement of property of a capital new text end 211.30 new text begin nature authorized by this section, including any costs of issuance. The city may also issue new text end 211.31 new text begin bonds or other obligations to refund those bonds or obligations. Payment of principal new text end 211.32 new text begin and interest on the bonds or other obligations issued under this paragraph is a permitted new text end 211.33 new text begin use of the district's tax revenues. new text end 211.34 new text begin (c) Tax revenues of the district may not be used for the operation of the streetcar line. new text end 211.35     new text begin Subd. 5. new text end new text begin Duration of the district. new text end new text begin A district established under this section is limited new text end 211.36 new text begin to the lesser of (1) 25 years of tax revenues, or (2) the time necessary to collect tax revenues new text end 212.1 new text begin equal to the amount of the capital costs permitted under subdivision 4 or the amount needed new text end 212.2 new text begin to pay or defease bonds or other obligations issued under subdivision 4, whichever is later. new text end 212.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 212.4    Sec. 19. new text begin DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY; TAX new text end 212.5 new text begin INCREMENT FINANCING DISTRICT. new text end 212.6     new text begin Subdivision 1. new text end new text begin Authorization. new text end new text begin Notwithstanding the provisions of any other law, new text end 212.7 new text begin the Dakota County Community Development Agency may establish a redevelopment tax new text end 212.8 new text begin increment financing district comprised of the properties that (1) were included in the new text end 212.9 new text begin CDA 10 Robert and South Street district in the city of West St. Paul, and (2) were not new text end 212.10 new text begin decertified before July 1, 2012. The district created under this section terminates no later new text end 212.11 new text begin than December 31, 2028. new text end 212.12     new text begin Subd. 2. new text end new text begin Special rules. new text end new text begin The requirements for qualifying a redevelopment district new text end 212.13 new text begin under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located new text end 212.14 new text begin within the district. Minnesota Statutes, section 469.176, subdivision 4j, do not apply to the new text end 212.15 new text begin district. The original tax capacity of the district is $93,239. new text end 212.16     new text begin Subd. 3. new text end new text begin Authorized expenditures. new text end new text begin Tax increment from the district may be new text end 212.17 new text begin expended to pay for any eligible activities authorized by Minnesota Statutes, chapter 469, new text end 212.18 new text begin within the redevelopment area that includes the district provided that the boundaries of the new text end 212.19 new text begin redevelopment area may not be expanded to add new area after April 1, 2013. All such new text end 212.20 new text begin expenditures are deemed to be activities within the district under Minnesota Statutes, new text end 212.21 new text begin section 469.1763, subdivisions 2 and 4. new text end 212.22     new text begin Subd. 4. new text end new text begin Adjusted net tax capacity. new text end new text begin The captured tax capacity of the district must new text end 212.23 new text begin be included in the adjusted net tax capacity of the city, county, and school district for the new text end 212.24 new text begin purposes of determining local government aid, education aid, and county program aid. new text end 212.25 new text begin The county auditor shall report to the commissioner of revenue the amount of the captured new text end 212.26 new text begin tax capacity for the district at the time the assessment abstracts are filed. new text end 212.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the governing new text end 212.28 new text begin body of the Dakota County Community Development Agency with the requirements of new text end 212.29 new text begin Minnesota Statutes, section 645.021, subdivision 3. new text end 212.30    Sec. 20. new text begin ST. CLOUD; TAX INCREMENT FINANCING. new text end 212.31     new text begin The request for certification of Tax Increment District No. 2, commonly referred to new text end 212.32 new text begin as the Norwest District, in the city of St. Cloud is deemed to have been made on or after new text end 212.33 new text begin August 1, 1979, and before July 1, 1982. Revenues derived from tax increment for that new text end 213.1 new text begin district must be treated for purposes of any law as revenue of a tax increment financing new text end 213.2 new text begin district for which the request for certification was made during that time period. new text end 213.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon approval by the governing new text end 213.4 new text begin body of the city of St. Cloud and compliance with Minnesota Statutes, section 645.021, new text end 213.5 new text begin subdivision 3. new text end 213.6    Sec. 21. new text begin CITY OF ELY; TAX INCREMENT FINANCING. new text end 213.7     new text begin Subdivision 1. new text end new text begin Extension of district. new text end new text begin Notwithstanding Minnesota Statutes, section new text end 213.8 new text begin 469.176, subdivision 1b, or any other law, the city of Ely may collect tax increment from new text end 213.9 new text begin Tax Increment Financing District No. 1 through December 31, 2021. Increments from the new text end 213.10 new text begin district may only be used to pay binding obligations and administrative expenses. new text end 213.11     new text begin Subd. 2. new text end new text begin Binding obligations. new text end new text begin For purposes of this section, "binding obligations" new text end 213.12 new text begin means the binding contractual or debt obligation of Tax Increment Financing District new text end 213.13 new text begin No. 1 entered into before January 1, 2013. new text end 213.14     new text begin Subd. 3. new text end new text begin Expenditures outside district. new text end new text begin Notwithstanding Minnesota Statutes, new text end 213.15 new text begin section 469.1763, subdivision 2, the governing body of the city of Ely may elect to new text end 213.16 new text begin transfer revenues derived from its Tax Increment Financing District No. 3 to the tax new text end 213.17 new text begin increment account established under Minnesota Statutes, section 469.177, subdivision new text end 213.18 new text begin 5, for Tax Increment Financing District No. 1. The amount that may be transferred is new text end 213.19 new text begin limited to the lesser of: new text end 213.20 new text begin (1) $168,000; or new text end 213.21 new text begin (2) the total amount due on binding obligations and outstanding on that date, less the new text end 213.22 new text begin amount of increment collected by Tax Increment Financing District No. 1 after December new text end 213.23 new text begin 31, 2012, and administrative expenses of Tax Increment Financing District No. 1 incurred new text end 213.24 new text begin after December 31, 2012. new text end 213.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon approval by the governing new text end 213.26 new text begin body of the city of Ely, St. Louis County, and Independent School District No. 696, with new text end 213.27 new text begin the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021, new text end 213.28 new text begin subdivision 3. new text end 213.29    Sec. 22. new text begin CITY OF GLENCOE; TAX INCREMENT FINANCING DISTRICT new text end 213.30 new text begin EXTENSION. new text end 213.31     new text begin Subdivision 1. new text end new text begin Duration of district. new text end new text begin Notwithstanding the provisions of Minnesota new text end 213.32 new text begin Statutes, section 469.176, subdivision 1b, paragraph (a), clause (4), or any other law to new text end 213.33 new text begin the contrary, the city of Glencoe may collect tax increments from tax increment financing new text end 214.1 new text begin district No. 4 (McLeod County District No. 007) through December 31, 2023, subject to new text end 214.2 new text begin the conditions in subdivision 2. new text end 214.3     new text begin Subd. 2. new text end new text begin Exclusive use of revenues. new text end new text begin (a) All tax increments derived from tax new text end 214.4 new text begin increment financing district No. 4 (McLeod County District No. 007) that are collected new text end 214.5 new text begin after December 31, 2013, must be used only to pay debt service on or to defease bonds that new text end 214.6 new text begin were outstanding on January 1, 2013, and that were issued to finance improvements serving: new text end 214.7 new text begin (1) tax increment financing district No. 14 (McLeod County District No. 033) new text end 214.8 new text begin (Downtown); new text end 214.9 new text begin (2) tax increment financing district No. 15 (McLeod County District No. 035) new text end 214.10 new text begin (Industrial Park); and new text end 214.11 new text begin (3) benefited properties as further described in proceedings related to the city's series new text end 214.12 new text begin 2007A bonds, dated September 1, 2007, and any bonds issued to refund those bonds. new text end 214.13 new text begin (b) Increment may also be used to pay debt service on or to defease bonds issued to new text end 214.14 new text begin refund the bonds described in paragraph (a), if the refunding bonds do not increase the new text end 214.15 new text begin present value of debt service due on the refunded bonds when the refunding is closed. new text end 214.16 new text begin (c) When the bonds described in paragraphs (a) and (b) have been paid or defeased, new text end 214.17 new text begin the district must be decertified and any remaining increment returned to the city, county, new text end 214.18 new text begin and school district as provided by Minnesota Statutes, section 469.176, subdivision 2, new text end 214.19 new text begin paragraph (c), clause (4). new text end 214.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance by the governing new text end 214.21 new text begin body of the city of Glencoe, McLeod County, and Independent School District No. 2859 new text end 214.22 new text begin with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and new text end 214.23 new text begin 645.021, subdivision 3. new text end 214.24    Sec. 23. new text begin CITY OF BLOOMINGTON; TAX INCREMENT FINANCING. new text end 214.25     new text begin Subdivision 1. new text end new text begin Addition of property to Tax Increment Financing District new text end 214.26 new text begin No. 1-G. new text end new text begin (a) Notwithstanding the provisions of Minnesota Statutes, section 469.175, new text end 214.27 new text begin subdivision 4, or any other law to the contrary, the governing bodies of the Port Authority new text end 214.28 new text begin of the city of Bloomington and the city of Bloomington may elect to eliminate the real new text end 214.29 new text begin property north of the existing building line on Lot 1, Block 1, Mall of America 7th new text end 214.30 new text begin Addition, exclusive of Lots 2 and 3 from Tax Increment Financing District No. 1-C new text end 214.31 new text begin within Industrial Development District No. 1 Airport South in the city of Bloomington, new text end 214.32 new text begin Minnesota, and expand the boundaries of Tax Increment Financing District No. 1-G new text end 214.33 new text begin to include that property. new text end 215.1     new text begin (b) If the city elects to transfer parcels under this authority, the county auditor shall new text end 215.2 new text begin transfer the original tax capacity of the affected parcels from Tax Increment Financing new text end 215.3 new text begin District No. 1-C to Tax Increment Financing District No. 1-G. new text end 215.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon compliance of the governing new text end 215.5 new text begin body of the city of Bloomington with the requirements of Minnesota Statutes, section new text end 215.6 new text begin 645.021, subdivision 3. new text end 215.7    Sec. 24. new text begin CITY OF APPLE VALLEY; USE OF TAX INCREMENT FINANCING. new text end 215.8     new text begin Subdivision 1. new text end new text begin Developments consisting of building and ancillary facilities. new text end 215.9     new text begin Notwithstanding Minnesota Statutes, section 469.176, subdivisions 4c and 4m, the city of new text end 215.10 new text begin Apple Valley may use tax increment financing to provide improvements, loans, subsidies, new text end 215.11 new text begin grants, interest rate subsidies, or assistance in any form to developments consisting of new text end 215.12 new text begin buildings and ancillary facilities, if all of the following conditions are met: new text end 215.13     new text begin (1) the city of Apple Valley finds that the project will create or retain jobs in new text end 215.14 new text begin Minnesota, including construction jobs; new text end 215.15     new text begin (2) the city of Apple Valley finds that construction of the project will not commence new text end 215.16 new text begin before July 1, 2014, without the use of tax increment financing; new text end 215.17     new text begin (3) the request for certification of the district is made no later than June 30, 2014; new text end 215.18     new text begin (4) construction of the project begins no later than July 1, 2014; and new text end 215.19     new text begin (5) for development of housing, construction of the project begins no later than new text end 215.20 new text begin December 31, 2013. new text end 215.21     new text begin Subd. 2. new text end new text begin Extension of authority to spend tax increments. new text end new text begin Notwithstanding the new text end 215.22 new text begin time limits in Minnesota Statutes, section 469.176, subdivision 4m, the city of Apple new text end 215.23 new text begin Valley has the authority to spend tax increments under Minnesota Statutes, section new text end 215.24 new text begin 469.176, subdivision 4m, until December 31, 2014. new text end 215.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon approval by the governing new text end 215.26 new text begin body of the city of Apple Valley and timely compliance with Minnesota Statutes, section new text end 215.27 new text begin 645.021, subdivision 3. new text end 215.28    Sec. 25. new text begin CITY OF MAPLEWOOD; TAX INCREMENT FINANCING new text end 215.29 new text begin DISTRICT; SPECIAL RULES. new text end 215.30     new text begin (a) If the city of Maplewood elects, upon the adoption of a tax increment financing new text end 215.31 new text begin plan for a district, the rules under this section apply to one or more redevelopment new text end 215.32 new text begin tax increment financing districts established by the city or the economic development new text end 215.33 new text begin authority of the city. The area within which the redevelopment tax increment districts may new text end 216.1 new text begin be created is parcel 362922240002 (the "parcel") or any replatted parcels constituting a new text end 216.2 new text begin part of the parcel and the adjacent rights-of-way. For purposes of this section, the parcel is new text end 216.3 new text begin the "3M Renovation and Retention Project Area" or "project area." new text end 216.4     new text begin (b) The requirements for qualifying redevelopment tax increment districts under new text end 216.5 new text begin Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcel, which is new text end 216.6 new text begin deemed eligible for inclusion in a redevelopment tax increment district. new text end 216.7     new text begin (c) The 90 percent rule under Minnesota Statutes, section 469.176, subdivision new text end 216.8 new text begin 4j, does not apply to the parcel. new text end 216.9     new text begin (d) The expenditures outside district rule under Minnesota Statutes, section new text end 216.10 new text begin 469.1763, subdivision 2, does not apply; the five-year rule under Minnesota Statutes, new text end 216.11 new text begin section 469.1763, subdivision 3, is extended to ten years; and expenditures must only new text end 216.12 new text begin be made within the project area. new text end 216.13     new text begin (e) If, after one year from the date of certification of the original net tax capacity new text end 216.14 new text begin of the tax increment district, no demolition, rehabilitation, or renovation of property has new text end 216.15 new text begin been commenced on a parcel located within the tax increment district, no additional tax new text end 216.16 new text begin increment may be taken from that parcel, and the original net tax capacity of the parcel new text end 216.17 new text begin shall be excluded from the original net tax capacity of the tax increment district. If 3M new text end 216.18 new text begin Company subsequently commences demolition, rehabilitation, or renovation, the authority new text end 216.19 new text begin shall certify to the county auditor that the activity has commenced, and the county auditor new text end 216.20 new text begin shall certify the net tax capacity thereof as most recently certified by the commissioner new text end 216.21 new text begin of revenue and add it to the original net tax capacity of the tax increment district. The new text end 216.22 new text begin authority must submit to the county auditor evidence that the required activity has taken new text end 216.23 new text begin place for each parcel in the district. new text end 216.24     new text begin (f) The authority to approve a tax increment financing plan and to establish a tax new text end 216.25 new text begin increment financing district under this section expires December 31, 2018. new text end 216.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective upon approval by the governing new text end 216.27 new text begin body of the city of Maplewood and upon compliance with Minnesota Statutes, section new text end 216.28 new text begin 645.021, subdivision 3. new text end 216.29ARTICLE 9 216.30DESTINATION MEDICAL CENTER 216.31    Section 1. Minnesota Statutes 2012, section 297A.71, is amended by adding a 216.32subdivision to read: 216.33     new text begin Subd. 48. new text end new text begin Construction materials, public infrastructure related to the new text end 216.34 new text begin destination medical center. new text end new text begin Materials and supplies used in, and equipment incorporated new text end 217.1 new text begin into, the construction and improvement of publicly owned buildings and infrastructure new text end 217.2 new text begin included in the development plan adopted under section 469.42, and financed with public new text end 217.3 new text begin funds, are exempt. new text end 217.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for sales and purchases made after new text end 217.5 new text begin June 30, 2015. new text end 217.6    Sec. 2. new text begin [469.40] DEFINITIONS. new text end 217.7     new text begin Subdivision 1. new text end new text begin Application. new text end new text begin For the purposes of section 469.40 to 469.46, the terms new text end 217.8 new text begin defined in this section have the meanings given them. new text end 217.9     new text begin Subd. 2. new text end new text begin Authority. new text end new text begin "Authority" means the Destination Medical Center Authority new text end 217.10 new text begin established in section 469.41. new text end 217.11     new text begin Subd. 3. new text end new text begin Board. new text end new text begin "Board" means the governing body of the Destination Medical new text end 217.12 new text begin Center Authority. new text end 217.13     new text begin Subd. 4. new text end new text begin City. new text end new text begin "City" means the city of Rochester. new text end 217.14     new text begin Subd. 5. new text end new text begin County. new text end new text begin "County" means Olmsted County. new text end 217.15     new text begin Subd. 6. new text end new text begin Destination medical center development district. new text end new text begin "Destination medical new text end 217.16 new text begin center development district" or "development district" means one or more contiguous or new text end 217.17 new text begin noncontiguous geographic area in the city identified in the adopted authority development new text end 217.18 new text begin plan in which public infrastructure projects are implemented. new text end 217.19     new text begin Subd. 7. new text end new text begin Development plan. new text end new text begin "Development plan" means the plan adopted by the new text end 217.20 new text begin authority under section 469.46. new text end 217.21     new text begin Subd. 8. new text end new text begin Medical business entity. new text end new text begin "Medical business entity" means a medical new text end 217.22 new text begin business entity with its principal place of business in the city that, as of the effective date new text end 217.23 new text begin of this section, together with all business entities of which it is the sole member or sole new text end 217.24 new text begin shareholder, collectively employs more than 30,000 persons in the state. new text end 217.25     new text begin Subd. 9. new text end new text begin Public infrastructure project. new text end new text begin (a) "Public infrastructure project" means new text end 217.26 new text begin a project financed in part or whole with public money in order to support the medical new text end 217.27 new text begin business entity's development plans, as identified in the adopted development plan. A new text end 217.28 new text begin project may be to: new text end 217.29 new text begin (1) acquire real property and other assets associated with the real property; new text end 217.30 new text begin (2) demolish, repair, or rehabilitate buildings; new text end 217.31 new text begin (3) remediate land and buildings as required to prepare the property for acquisition new text end 217.32 new text begin or development; new text end 217.33 new text begin (4) install, construct, or reconstruct elements of public buildings or other new text end 217.34 new text begin infrastructure required to support the overall development of the destination medical center new text end 217.35 new text begin development district, including, but not limited to, streets, roadways, utilities systems new text end 218.1 new text begin and related facilities, utility relocations and replacements, network and communication new text end 218.2 new text begin systems, streetscape improvements, drainage systems, sewer and water systems, subgrade new text end 218.3 new text begin structures and associated improvements, landscaping, façade construction and restoration, new text end 218.4 new text begin wayfinding and signage, and other components of community infrastructure; new text end 218.5 new text begin (5) acquire, construct or reconstruct, and equip parking facilities and other facilities new text end 218.6 new text begin to encourage intermodal transportation and public transit; new text end 218.7 new text begin (6) install, construct or reconstruct, furnish, and equip parks, cultural, and new text end 218.8 new text begin recreational facilities, facilities to promote tourism and hospitality, conferencing and new text end 218.9 new text begin conventions, broadcast and related multimedia infrastructure; new text end 218.10 new text begin (7) make related site improvements, including, without limitation, excavation, earth new text end 218.11 new text begin retention, soil stabilization and correction, site improvements to support the destination new text end 218.12 new text begin medical center development district; new text end 218.13 new text begin (8) prepare land for private development and to sell or lease land; and new text end 218.14     new text begin (9) to construct and equip all or a portion of one or more suitable structures on land new text end 218.15 new text begin owned by the authority for sale or lease of private development; provided, however, that new text end 218.16 new text begin the portion of any such structure directly financed as a project cost must not be sold or new text end 218.17 new text begin leased to a medical business entity. new text end 218.18     new text begin (b) A public infrastructure project is not a business subsidy under section 116J.993. new text end 218.19 new text begin (c) A public infrastructure project is subject to the requirements of sections 177.30 new text end 218.20 new text begin and 177.41 to 177.44. new text end 218.21    Sec. 3. new text begin [469.41] AUTHORITY ESTABLISHMENT; BOARD MEMBERS; new text end 218.22 new text begin TERMS, VACANCIES, PAY, CONTINUITY. new text end 218.23     new text begin Subdivision 1. new text end new text begin Destination Medical Center Authority; establishment. new text end new text begin The new text end 218.24 new text begin Destination Medical Center Authority is established. The authority's governing board new text end 218.25 new text begin shall have eight members, and a quorum of the board consists of at least six members. new text end 218.26 new text begin Four members are appointed by the governor and confirmed by the senate. One member new text end 218.27 new text begin shall represent the county and is appointed by the county board of commissioners. Two new text end 218.28 new text begin members shall represent the city and are appointed by the city council. One member new text end 218.29 new text begin shall represent the medical business entity and is appointed by the board of directors of new text end 218.30 new text begin the medical business entity. A member appointed by the governor must not be a resident new text end 218.31 new text begin of Rochester. A member must not have a direct or indirect financial interest in the Mayo new text end 218.32 new text begin Clinic, its subsidiaries, or affiliated businesses, the Destination Medical Center, or any new text end 218.33 new text begin projects authorized by or under consideration by the authority, except for the member. new text end 218.34 new text begin This provision does not apply to the member appointed by the medical business entity. new text end 219.1     new text begin Subd. 2. new text end new text begin Terms; vacancies. new text end new text begin The initial eight members shall be appointed by the new text end 219.2 new text begin first Monday in January 2014. Except as provided in this subdivision, a member's term is new text end 219.3 new text begin six years. The governor shall make replacement appointments for two of the governor's new text end 219.4 new text begin appointees by the first Monday in January 2017 and every six years thereafter. The city new text end 219.5 new text begin council shall make one replacement appointment and the county board of commissioners new text end 219.6 new text begin shall make its replacement appointment by the first Monday in January 2017 and every six new text end 219.7 new text begin years thereafter. The medical business entity shall make its replacement appointment by new text end 219.8 new text begin the first Monday in January 2020 and every six years thereafter. Each member shall serve new text end 219.9 new text begin until a replacement for the member's seat on the board has been confirmed, including new text end 219.10 new text begin confirmation by the senate in the case of the governor's appointments. When a member new text end 219.11 new text begin resigns or is removed for cause, the person or entity who appointed such member shall new text end 219.12 new text begin appoint a member to fill the vacancy for the balance of the member's term shall be filled new text end 219.13 new text begin subject to the same confirmation required for an appointment for a full term as provided in new text end 219.14 new text begin subdivision 1. new text end 219.15     new text begin Subd. 3. new text end new text begin Chair. new text end new text begin The governor shall appoint a chair from the board's membership, new text end 219.16 new text begin and the chair shall convene the first meeting within two months of senate confirmation of new text end 219.17 new text begin the governor's appointed members. new text end 219.18     new text begin Subd. 4. new text end new text begin Pay. new text end new text begin Members must be compensated as provided in section 15.0575, new text end 219.19 new text begin subdivision 3, for each regular or special authority board meeting attended. In addition, new text end 219.20 new text begin the board members may be reimbursed for actual expenses incurred in doing official new text end 219.21 new text begin business of the authority. All money paid for compensation or reimbursement must be new text end 219.22 new text begin paid out of the authority's budget. new text end 219.23     new text begin Subd. 5. new text end new text begin Removal for cause. new text end new text begin A member may be removed by the board for new text end 219.24 new text begin inefficiency, neglect of duty, or misconduct in office. A member may be removed only new text end 219.25 new text begin after a hearing of the board. A copy of the charges must be given to the board member at new text end 219.26 new text begin least ten days before the hearing. The board member must be given an opportunity to be new text end 219.27 new text begin heard in person or by counsel at the hearing. When written charges have been submitted new text end 219.28 new text begin against a board member, the board may temporarily suspend the member. If the board finds new text end 219.29 new text begin that those charges have not been substantiated, the board member shall be immediately new text end 219.30 new text begin reinstated. If a board member is removed, a record of the proceedings, together with the new text end 219.31 new text begin charges and findings, shall be filed with the office of the appointing authority. new text end 219.32     new text begin Subd. 6. new text end new text begin Sunset. new text end new text begin The authority shall sunset December 31, 2049. When the authority new text end 219.33 new text begin sunsets, all right, title, and interest to all assets held by the authority are transferred or new text end 219.34 new text begin assigned to the city of Rochester. new text end 219.35    Sec. 4. new text begin [469.42] CHARACTERISTICS AND JURISDICTION. new text end 220.1     new text begin Subdivision 1. new text end new text begin Public body characteristics. new text end new text begin The authority is a body politic and new text end 220.2 new text begin corporate and a political subdivision of the state, with the right to sue and be sued in new text end 220.3 new text begin its own name. new text end 220.4     new text begin Subd. 2. new text end new text begin Boundaries. new text end new text begin The boundary for activities and the use of the powers of new text end 220.5 new text begin the authority must be within a medical center development district. The authority also new text end 220.6 new text begin has the power to finance activities outside of a medical center development district but new text end 220.7 new text begin within the county, if necessary; provided, however, that the financing of activities outside new text end 220.8 new text begin of a medical center development district but within the county must be included in the new text end 220.9 new text begin development plan and must be approved by, and subject to the planning, zoning, sanitary new text end 220.10 new text begin and building laws, ordinances, regulations, and land use plans applicable to, the city, new text end 220.11 new text begin county, or town in which such activities are undertaken. new text end 220.12    Sec. 5. new text begin [469.43] OFFICERS; DUTIES; ORGANIZATIONAL MATTERS. new text end 220.13     new text begin Subdivision 1. new text end new text begin Bylaws, rules, seal. new text end new text begin The authority may adopt bylaws and rules of new text end 220.14 new text begin procedure and may adopt an official seal. new text end 220.15     new text begin Subd. 2. new text end new text begin Officers. new text end new text begin The authority shall annually elect a treasurer. The authority shall new text end 220.16 new text begin appoint a secretary and assistant treasurer. The secretary and assistant treasurer need new text end 220.17 new text begin not, but may, be members of the board. new text end 220.18     new text begin Subd. 3. new text end new text begin Duties and powers. new text end new text begin The officers have the usual duties and powers of their new text end 220.19 new text begin offices. They may be given other duties and powers by the authority. new text end 220.20     new text begin Subd. 4. new text end new text begin Treasurer's duties. new text end new text begin The treasurer: new text end 220.21 new text begin (1) shall receive and is responsible for authority money; new text end 220.22 new text begin (2) is responsible for the acts of the assistant treasurer; new text end 220.23 new text begin (3) shall disburse authority money by check or electronic procedures; new text end 220.24 new text begin (4) shall keep an account of the source of all receipts, and the nature, purpose, and new text end 220.25 new text begin authority of all disbursements; and new text end 220.26 new text begin (5) shall file the authority's detailed financial statement with its secretary at least new text end 220.27 new text begin once a year at times set by the authority. new text end 220.28     new text begin Subd. 5. new text end new text begin Secretary. new text end new text begin The secretary shall perform duties as required by the board. new text end 220.29     new text begin Subd. 6. new text end new text begin Assistant treasurer. new text end new text begin The assistant treasurer has the powers and duties of new text end 220.30 new text begin the treasurer if the treasurer is absent or disabled. new text end 220.31     new text begin Subd. 7. new text end new text begin Treasurer's bond. new text end new text begin The treasurer shall give bond to the state conditioned new text end 220.32 new text begin for the faithful discharge of official duties. The bond must be approved as to form and new text end 220.33 new text begin surety by the authority and filed with its secretary. The bond must be for twice the amount new text end 220.34 new text begin of money likely to be on hand at any one time, as determined at least annually by the new text end 220.35 new text begin authority, except that the bond must not exceed $300,000. new text end 221.1     new text begin Subd. 8. new text end new text begin Public money. new text end new text begin Authority money is public money. new text end 221.2     new text begin Subd. 9. new text end new text begin Checks. new text end new text begin An authority check must be signed by the treasurer and by one new text end 221.3 new text begin other officer named by the authority in a resolution. The check must state the name of the new text end 221.4 new text begin payee and the nature of the claim for which the check is issued. new text end 221.5     new text begin Subd. 10. new text end new text begin Financial statements; filing with state auditor. new text end new text begin The financial statements new text end 221.6 new text begin of the authority must be prepared, audited, filed, and published or posted in the manner new text end 221.7 new text begin required for the financial statements of the city. The authority shall employ a certified new text end 221.8 new text begin public accountant to annually examine and audit its books. The report of the exam and audit new text end 221.9 new text begin must be filed with the state auditor by June 30 of each year. The state auditor shall review new text end 221.10 new text begin the report and may accept it or, in the public interest, audit the books of the authority. new text end 221.11     new text begin Subd. 11. new text end new text begin Meetings. new text end new text begin Except at otherwise provided in this chapter, the authority is new text end 221.12 new text begin subject to chapters 13 and 13D. new text end 221.13    Sec. 6. new text begin [469.44] DEPOSITORIES; DEFAULT; COLLATERAL. new text end 221.14     new text begin Subdivision 1. new text end new text begin Named; bond. new text end new text begin Every two years the authority shall name national new text end 221.15 new text begin or state banks within the state as depositories. Before acting as a depository, a named new text end 221.16 new text begin bank shall give the authority a bond approved as to form and surety by the authority. new text end 221.17 new text begin The bond must be conditioned for the safekeeping and prompt repayment of deposits. new text end 221.18 new text begin The amount of the bond must be at least equal to the maximum sum expected to be on new text end 221.19 new text begin deposit at any one time. new text end 221.20     new text begin Subd. 2. new text end new text begin Default; collateral. new text end new text begin When authority funds are deposited by the treasurer new text end 221.21 new text begin in a bonded depository, the treasurer and the surety on the treasurer's official bond are new text end 221.22 new text begin exempt from liability for the loss of the deposits because of the failure, bankruptcy, or any new text end 221.23 new text begin other act or default of the depository. The authority may accept assignments of collateral new text end 221.24 new text begin from its depository to secure deposits in the same manner as assignments of collateral are new text end 221.25 new text begin permitted for a government entity under section 118A.03. new text end 221.26    Sec. 7. new text begin [469.45] TAX LEVIES; CITY OR COUNTY APPROPRIATIONS; new text end 221.27 new text begin OTHER FISCAL MATTERS. new text end 221.28     new text begin Subdivision 1. new text end new text begin Obligations. new text end new text begin The authority must not levy a tax or special assessment, new text end 221.29 new text begin pledge the credit of the state or the state's municipal corporations or other subdivisions, or new text end 221.30 new text begin incur an obligation enforceable on property not owned by the authority. new text end 221.31     new text begin Subd. 2. new text end new text begin Budget. new text end new text begin The authority shall annually send its budget to the city, county, new text end 221.32 new text begin governor, and the chair and ranking minority members of the house and senate committees new text end 221.33 new text begin with jurisdiction over taxation. new text end 222.1     new text begin Subd. 3. new text end new text begin Fiscal year. new text end new text begin The fiscal year of the authority may be established by the new text end 222.2 new text begin authority. new text end 222.3     new text begin Subd. 4. new text end new text begin City or county appropriations; levy. new text end new text begin The city council of the city or the new text end 222.4 new text begin county board of the county may appropriate money for the use of the authority and may new text end 222.5 new text begin levy the amount of its appropriation in its general levy. The levy is a special levy within new text end 222.6 new text begin the meaning of, and as if specifically enumerated in, section 275.70, subdivision 5. new text end 222.7     new text begin Subd. 5. new text end new text begin Outside budget laws. new text end new text begin Money appropriated to the authority by the city new text end 222.8 new text begin or county under this section is not subject to a budget law that applies to the city or new text end 222.9 new text begin county, respectively. new text end 222.10     new text begin Subd. 6. new text end new text begin City or county payment. new text end new text begin The city or county treasurer shall pay money new text end 222.11 new text begin appropriated by a city or county under subdivision 4 when and in the manner directed by new text end 222.12 new text begin the city council or county board, as applicable. new text end 222.13     new text begin Subd. 7. new text end new text begin Local government tax base not reduced. new text end new text begin Nothing in sections 469.41 to new text end 222.14 new text begin 469.52 reduces the tax base or affects the taxes due and payable to the city, the county, new text end 222.15 new text begin or any school district within the boundaries of the city, including, without limitation, the new text end 222.16 new text begin city's 0.5 percent local sales tax. new text end 222.17    Sec. 8. new text begin [469.451] COUNTY TAX AUTHORITY. new text end 222.18 new text begin (a) Notwithstanding sections 297A.99, 297A.993, and 477A.016, or any other new text end 222.19 new text begin contrary provision of law, ordinance, or charter, and in addition to any taxes the county new text end 222.20 new text begin may impose under another law or statute, the board of commissioners of Olmsted County new text end 222.21 new text begin may, by resolution, impose a transportation tax of up to one quarter of one percent on new text end 222.22 new text begin retail sales and uses taxable under chapter 297A. The provisions of section 297A.99, new text end 222.23 new text begin subdivisions 4 to 13, govern the imposition, administration, collection, and enforcement new text end 222.24 new text begin of the tax authorized under this paragraph. new text end 222.25 new text begin (b) The board of commissioners of Olmsted County may, by resolution, levy an new text end 222.26 new text begin annual wheelage tax of up to $10 on each motor vehicle kept in the county when not in new text end 222.27 new text begin operation which is subject to annual registration and taxation under chapter 168, for new text end 222.28 new text begin transportation projects within the county. The wheelage tax shall not be imposed on the new text end 222.29 new text begin vehicles exempt from wheelage tax under section 163.051, subdivision 1. The board new text end 222.30 new text begin by resolution may provide for collection of the wheelage tax by county officials or it new text end 222.31 new text begin may request that the tax be collected by the state registrar on behalf of the county. The new text end 222.32 new text begin provisions of section 163.051, subdivisions 2, 2a, 3, and 7, shall govern the administration, new text end 222.33 new text begin collection, and enforcement of the tax authorized under this paragraph. The tax authorized new text end 222.34 new text begin under this section is in addition to any tax the county may be authorized to impose under new text end 222.35 new text begin section 163.051, but until January 1, 2018, the county tax imposed under this paragraph, new text end 223.1 new text begin in combination with any tax imposed under section 163.051, must equal the specified new text end 223.2 new text begin rate under section 163.051. new text end 223.3 new text begin (c) The proceeds of the tax imposed under paragraph (a), less refunds and costs of new text end 223.4 new text begin collection, must be first used by the county to meet its share of obligations for financing new text end 223.5 new text begin transportation infrastructure related to the public infrastructure projects contained in new text end 223.6 new text begin the development plan, including any associated financing costs. Revenues collected in new text end 223.7 new text begin any calendar year in excess of the county obligation to pay for projects contained in the new text end 223.8 new text begin development plan may be retained by the county and used for funding other transportation new text end 223.9 new text begin projects, including roads and bridges, airport and transportation improvements. new text end 223.10 new text begin (d) Any taxes imposed under paragraph (a), expire December 31, 2046, or at an new text end 223.11 new text begin earlier time if approved by resolution of the county board of commissioners. However, new text end 223.12 new text begin the taxes may not terminate before the county board of commissioners determines that new text end 223.13 new text begin revenues from these taxes and any other revenue source the county dedicates are sufficient new text end 223.14 new text begin to pay the county share of transit project costs and associated financing costs under the new text end 223.15 new text begin adopted development plan. new text end 223.16    Sec. 9. new text begin [469.46] DEVELOPMENT PLAN. new text end 223.17     new text begin Subdivision 1. new text end new text begin Development plan; adoption by authority; notice; findings. new text end new text begin (a) new text end 223.18 new text begin The authority shall prepare and adopt a development plan. The authority must hold a new text end 223.19 new text begin public hearing before adopting a development plan. At least 60 days before the hearing, new text end 223.20 new text begin the authority shall make copies of the proposed plan available to the public at the authority new text end 223.21 new text begin and city offices during normal business hours, on the authority's and city's Web site, new text end 223.22 new text begin and as otherwise determined appropriate by the authority. At least ten days before the new text end 223.23 new text begin hearing, the authority shall publish notice of the hearing in a daily newspaper of general new text end 223.24 new text begin circulation in the city. The development plan may not be adopted unless the authority new text end 223.25 new text begin finds by resolution that: new text end 223.26 new text begin (1) the plan provides an outline for the development of the city as a destination new text end 223.27 new text begin medical center, and the plan is sufficiently complete, including the identification of planned new text end 223.28 new text begin and anticipated projects, to indicate its relationship to definite state and local objectives; new text end 223.29 new text begin (2) the proposed development affords maximum opportunity, consistent with the new text end 223.30 new text begin needs of the city, county, and state, for the development of the city by private enterprise new text end 223.31 new text begin as a destination medical center; new text end 223.32 new text begin (3) the proposed development conforms to the general plan for the development of new text end 223.33 new text begin the city and is consistent with the city comprehensive plan; new text end 223.34 new text begin (4) the plan includes: new text end 224.1 new text begin (i) strategic planning consistent with a destination medical center in the core areas of new text end 224.2 new text begin commercial research and technology, learning environment, hospitality and convention, new text end 224.3 new text begin sports and recreation, livable communities, including mixed-use urban development new text end 224.4 new text begin and neighborhood residential development, retail/dining/entertainment, and health and new text end 224.5 new text begin wellness; new text end 224.6 new text begin (ii) estimates of short- and long-range fiscal and economic impacts; new text end 224.7 new text begin (iii) a framework to identify and prioritize short- and long-term public investment new text end 224.8 new text begin and public infrastructure project development and to facilitate private investment and new text end 224.9 new text begin development; new text end 224.10 new text begin (iv) land use planning; new text end 224.11 new text begin (v) transportation and transit planning; new text end 224.12 new text begin (vi) operational planning required to support the medical center development new text end 224.13 new text begin district; and new text end 224.14 new text begin (vii) ongoing market research plans. new text end 224.15 new text begin (b) The identification of planned and anticipated projects under paragraph (a), clause new text end 224.16 new text begin (1), must give priority consideration to projects that will pay wages at least equal to the new text end 224.17 new text begin basic cost of living wage as calculated by the commissioner of employment and economic new text end 224.18 new text begin development for the county in which the project is located. The calculation of the basic new text end 224.19 new text begin cost of living wage shall be done as provided for under Minnesota Statutes, section new text end 224.20 new text begin 116J.013, if enacted by the 2013 legislature. new text end 224.21     new text begin Subd. 2. new text end new text begin Development plan; review by city; finding. new text end new text begin After adoption by the new text end 224.22 new text begin authority under subdivision 1, the authority shall submit the development plan to the city. new text end 224.23 new text begin The city shall review the development plan and make its finding regarding consistency new text end 224.24 new text begin with the adopted comprehensive plan of the city within 60 days of submission of new text end 224.25 new text begin the adopted development plan. If the city determines, by written resolution, that the new text end 224.26 new text begin development plan is not consistent with the adopted comprehensive plan of the city, the new text end 224.27 new text begin resolution shall state the reasons and supporting facts for each determination, and the city new text end 224.28 new text begin shall transmit the resolution to the authority within seven days of adoption. new text end 224.29     new text begin Subd. 3. new text end new text begin Modification of development plan. new text end new text begin The authority may modify the new text end 224.30 new text begin development plan at any time. The authority must update the development plan not less new text end 224.31 new text begin than every five years. A modification or update under this subdivision must be adopted by new text end 224.32 new text begin the authority upon the notice and after the public hearing and findings required for the new text end 224.33 new text begin original adoption of the development plan. new text end 224.34     new text begin Subd. 4. new text end new text begin Authority consultant. new text end new text begin (a) The authority shall engage a business entity new text end 224.35 new text begin consultant to provide experience and expertise in developing the destination medical center. new text end 224.36 new text begin The consultant shall assist the authority in preparing the development plan and provide new text end 225.1 new text begin services to assist the authority or city in implementing, consistent with the development new text end 225.2 new text begin plan. The consultant shall work with the city and the medical business entity on the goals, new text end 225.3 new text begin objectives, and strategies in the development plan, including, but not limited to: new text end 225.4 new text begin (1) developing and updating the criteria for evaluating and underwriting new text end 225.5 new text begin development proposals; new text end 225.6 new text begin (2) implementing the development plan, including soliciting and evaluating new text end 225.7 new text begin proposals for development and evaluating and making recommendations to the authority new text end 225.8 new text begin and the city regarding those proposals; new text end 225.9 new text begin (3) providing transactional services in connection with approved projects; new text end 225.10 new text begin (4) developing patient, visitor, and community outreach programs for a destination new text end 225.11 new text begin medical center development district; new text end 225.12 new text begin (5) working with the authority to acquire and facilitate the sale, lease, or other new text end 225.13 new text begin transactions involving land and real property; new text end 225.14 new text begin (6) seeking financial support for the authority, the city, and a project; new text end 225.15 new text begin (7) partnering with other development agencies and organizations, the city, and the new text end 225.16 new text begin county in joint efforts to promote economic development and establish a destination new text end 225.17 new text begin medical center; new text end 225.18 new text begin (8) supporting and administering the planning and development activities required to new text end 225.19 new text begin implement the development plan; new text end 225.20 new text begin (9) preparing and supporting the marketing and promotion of the medical center new text end 225.21 new text begin development district; new text end 225.22 new text begin (10) preparing and implementing a program for community and public relations in new text end 225.23 new text begin support of the medical center development district; new text end 225.24 new text begin (11) assisting the authority or city and others in applications for federal grants, tax new text end 225.25 new text begin credits, and other sources of funding to aid both private and public development; and new text end 225.26 new text begin (12) making other general advisory recommendations to the authority and the city, new text end 225.27 new text begin as requested. new text end 225.28 new text begin (b) The authority may contract with the consultant to provide administrative services new text end 225.29 new text begin to the authority with regard to the destination medical center plan implementation. The new text end 225.30 new text begin authority may pay for those services out of any revenue sources available to it. new text end 225.31     new text begin Subd. 5. new text end new text begin Audit of consultant contracts. new text end new text begin Any contract for services between the new text end 225.32 new text begin authority and a consultant paid, in whole or in part, with public money gives the authority, new text end 225.33 new text begin the city, and the state auditor the right to audit the books and records of the consultant new text end 225.34 new text begin that are necessary to certify (1) the nature and extent of the services furnished pursuant to new text end 225.35 new text begin the contract, and (2) that the payment for services and related disbursements complies new text end 225.36 new text begin with all state laws, regulations, and the terms of the contract. Any contract for services new text end 226.1 new text begin between the authority and the consultant paid, in whole or in part, with public money shall new text end 226.2 new text begin require the authority to maintain for the life of the authority accurate and complete books new text end 226.3 new text begin and records directly relating to the contract. new text end 226.4     new text begin Subd. 6. new text end new text begin Report. new text end new text begin By January 15 of each year, the authority and city must submit new text end 226.5 new text begin a report to the chairs and ranking minority members of the legislative committees with new text end 226.6 new text begin jurisdiction over local and state government operations, economic development, and new text end 226.7 new text begin taxes, and to the commissioners of revenue and employment and economic development, new text end 226.8 new text begin and the county. The authority and city must also submit the report as provided in section new text end 226.9 new text begin 3.195. The report must include: new text end 226.10 new text begin (1) the adopted development plan and any proposed changes to the development plan; new text end 226.11 new text begin (2) progress of projects identified in the development plan; new text end 226.12 new text begin (3) actual costs and financing sources, including the amount paid with state aid under new text end 226.13 new text begin section 469.46 and required local contributions, of projects completed in the previous two new text end 226.14 new text begin years by the authority, city, the county, and the medical business entity; new text end 226.15 new text begin (4) estimated costs and financing sources for projects to be begun in the next two new text end 226.16 new text begin years by the authority, city, the county, and the medical business entity; and new text end 226.17 new text begin (5) debt service schedules for all outstanding obligations of the authority and the city new text end 226.18 new text begin for debt issued for projects identified in the plan. new text end 226.19     new text begin Subd. 7. new text end new text begin Public infrastructure project; construction requirements. new text end new text begin (a) For any new text end 226.20 new text begin real or personal property acquired, owned, leased, controlled, used, or occupied by the new text end 226.21 new text begin authority for a public infrastructure project, the authority may contract for construction, new text end 226.22 new text begin materials, supplies, and equipment in accordance with Minnesota Statutes, section new text end 226.23 new text begin 471.345, except that the authority may employ or contract with persons, firms, or new text end 226.24 new text begin corporations to perform one or more or all of the functions of an engineer, architect, new text end 226.25 new text begin construction manager, or program manager with respect to all or any part of a project new text end 226.26 new text begin to renovate, refurbish, and remodel the public infrastructure project under either the new text end 226.27 new text begin traditional separate design and build, integrated design-build, design-bid-build or new text end 226.28 new text begin construction manager at risk, or a combination thereof. new text end 226.29 new text begin (b) The authority may prepare a request for proposals for one or more of the new text end 226.30 new text begin functions described in paragraph (a). The request must be published in a newspaper new text end 226.31 new text begin of general circulation. The authority may prequalify offerors by issuing a request for new text end 226.32 new text begin qualifications, in advance of the request for proposals, and select a short list of responsible new text end 226.33 new text begin offerors to submit proposals. new text end 226.34 new text begin (c) As provided in the request for proposals, the authority may conduct discussions new text end 226.35 new text begin and negotiations with responsible offerors in order to determine which proposal is most new text end 226.36 new text begin advantageous to the goals of the development plan, and to negotiate the terms of an new text end 227.1 new text begin agreement. In conducting discussions, there shall be no disclosure of any information new text end 227.2 new text begin derived from proposals submitted by competing offerors and the content of all proposals new text end 227.3 new text begin is nonpublic data under Minnesota Statutes, chapter 13, until such time as a notice to new text end 227.4 new text begin award a contract is given by the authority. new text end 227.5 new text begin (d) Upon agreement on the guaranteed maximum price, the construction manager new text end 227.6 new text begin or program manager may enter into contracts with subcontractors for labor, materials, new text end 227.7 new text begin supplies, and equipment for the renovation project through the process of public bidding, new text end 227.8 new text begin except that the construction manager or program manager may, with the consent of the new text end 227.9 new text begin authority: new text end 227.10 new text begin (1) narrow the listing of eligible bidders to those that the construction manager new text end 227.11 new text begin or program manager determines to possess sufficient expertise to perform the intended new text end 227.12 new text begin functions; new text end 227.13 new text begin (2) award contracts to the subcontractors that the construction manager or program new text end 227.14 new text begin manager determines provide the best value under a request for proposals, as described new text end 227.15 new text begin in Minnesota Statutes, section 16C.28, subdivision 1, paragraph (a), clause (2), and new text end 227.16 new text begin paragraph (c), that are not required to be the lowest responsible bidder; and new text end 227.17 new text begin (3) for work the construction manager or program manager determines to be new text end 227.18 new text begin critical to the completion schedule, perform work with its own forces without soliciting new text end 227.19 new text begin competitive bids or proposals, if the construction manager or program manager provides new text end 227.20 new text begin evidence of competitive pricing. new text end 227.21    Sec. 10. new text begin [469.47] POWERS AND DUTIES. new text end 227.22     new text begin Subdivision 1. new text end new text begin Powers generally. new text end new text begin The authority has the powers of a city under new text end 227.23 new text begin chapter 462C and the powers of a redevelopment agency under sections 469.152 to new text end 227.24 new text begin 469.1651, in connection with private development in the city for which the authority new text end 227.25 new text begin has previously undertaken or concurrently undertakes a project financed in whole or in new text end 227.26 new text begin part with authority revenue or obligations issued pursuant to section 469.48; provided, new text end 227.27 new text begin however, the authority shall not enter into any revenue agreement pursuant to section new text end 227.28 new text begin 469.155, subdivision 5, with a medical business entity. new text end 227.29     new text begin Subd. 2. new text end new text begin Projects; project costs. new text end new text begin The authority may, within a medical center new text end 227.30 new text begin development district, undertake public infrastructure projects and finance public new text end 227.31 new text begin infrastructure project costs. The authority must find by resolution that the public new text end 227.32 new text begin infrastructure project is consistent with and in furtherance of the approved development new text end 227.33 new text begin plan. Subject to other applicable law, revenue derived by the authority from any source new text end 227.34 new text begin may be used by the authority to make loans or grants, or to provide direct or indirect new text end 228.1 new text begin financial support to state public bodies or to private entities in payment or reimbursement new text end 228.2 new text begin of project costs. new text end 228.3     new text begin Subd. 3. new text end new text begin Revenue pooling. new text end new text begin The authority may deposit all its money from any new text end 228.4 new text begin source in one bank account. new text end 228.5     new text begin Subd. 4. new text end new text begin Acquire property; exemption for taxes. new text end new text begin (a) The authority may acquire by new text end 228.6 new text begin lease, purchase, gift, or devise the needed right, title, and interest in property to create new text end 228.7 new text begin medical center development districts and undertake projects. The authority may exercise new text end 228.8 new text begin the power of eminent domain to acquire property for a public use, as defined in section new text end 228.9 new text begin 117.025. It shall pay for the property out of money it receives under sections 469.41 to new text end 228.10 new text begin 469.53. It may hold and dispose of the property subject to the limits and conditions in new text end 228.11 new text begin sections 469.41 to 469.53. The title to property acquired by eminent domain or purchase new text end 228.12 new text begin must be in fee simple, absolute. The authority may accept an interest in property acquired new text end 228.13 new text begin in another way subject to any condition of the grantor or donor. The condition must new text end 228.14 new text begin be consistent with the proper use of the property under sections 469.41 to 469.53. The new text end 228.15 new text begin authority may sign options to purchase, sell, or lease property. new text end 228.16 new text begin (b) Property acquired, owned, leased, controlled, used, or occupied by the authority new text end 228.17 new text begin for any of the purposes of this section is for public governmental and municipal purposes new text end 228.18 new text begin and is exempt from taxation by the state or its political subdivisions, except to the extent new text end 228.19 new text begin that the property is subject to the sales and use tax under chapter 297A. The exemption in new text end 228.20 new text begin this paragraph applies only while the authority holds property for its own purpose, and is new text end 228.21 new text begin subject to section 272.02, subdivisions 8 and 39. When the property is sold it becomes new text end 228.22 new text begin subject to taxation. new text end 228.23     new text begin Subd. 5. new text end new text begin Subject to city requirements. new text end new text begin All projects are subject to the planning, new text end 228.24 new text begin zoning, sanitary, and building laws, ordinances, regulations, and land use plans applicable new text end 228.25 new text begin to the city. new text end 228.26     new text begin Subd. 6. new text end new text begin Sale of property. new text end new text begin The authority may sell, convey, and exchange any real new text end 228.27 new text begin or personal property owned or held by it in any manner and on any terms. Real property new text end 228.28 new text begin owned by the authority must not be sold, conveyed, exchanged, or have its title transferred new text end 228.29 new text begin without approval of two-thirds of the members of the board. All members must have ten new text end 228.30 new text begin days' written notice of a regular or special meeting at which a vote on sale, conveyance, new text end 228.31 new text begin exchange, or transfer of real property is to be taken. The notice must contain a complete new text end 228.32 new text begin description of the affected real property. The resolution authorizing the real property new text end 228.33 new text begin transaction is not effective unless a quorum is present. new text end 228.34     new text begin Subd. 7. new text end new text begin Contracts. new text end new text begin The authority may make contracts for the purpose of economic new text end 228.35 new text begin development within the powers given it in this subdivision and section 469.46. The new text end 228.36 new text begin authority may contract or arrange with the federal government, or any of its departments, new text end 229.1 new text begin with persons, public corporations, the state, or any of its political subdivisions, new text end 229.2 new text begin commissions, or agencies, for separate or joint action, on any matter related to using new text end 229.3 new text begin the authority's powers or performing its duties. The authority may contract to purchase new text end 229.4 new text begin and sell real and personal property. An obligation or expense must not be incurred new text end 229.5 new text begin by the authority unless existing appropriations together with the reasonably expected new text end 229.6 new text begin revenue of the authority from other sources are sufficient to discharge the obligation or new text end 229.7 new text begin pay the expense when due. The state and its municipal subdivisions are not liable on new text end 229.8 new text begin the obligations of the authority. new text end 229.9     new text begin Subd. 8. new text end new text begin Contract for services. new text end new text begin The authority may contract for the services of new text end 229.10 new text begin consultants, agents, public accountants, legal counsel, and other persons needed to perform new text end 229.11 new text begin its duties and exercise its powers. The authority may contract with the city or county to new text end 229.12 new text begin provide administrative, clerical, and accounting services to the authority. new text end 229.13     new text begin Subd. 9. new text end new text begin Supplies. new text end new text begin The authority may purchase the supplies and materials it needs new text end 229.14 new text begin to carry out sections 469.41 to 469.52. new text end 229.15     new text begin Subd. 10. new text end new text begin City purchasing. new text end new text begin The authority may, by agreement with the city, use the new text end 229.16 new text begin facilities and services of the city's purchasing and public works departments in connection new text end 229.17 new text begin with construction work and to purchase equipment, supplies, or materials. new text end 229.18     new text begin Subd. 11. new text end new text begin City facilities, services. new text end new text begin The city may furnish offices, structures and new text end 229.19 new text begin space, and clerical, engineering, or other services or assistance to the authority. new text end 229.20     new text begin Subd. 12. new text end new text begin Delegation power. new text end new text begin The authority may delegate to one or more of its new text end 229.21 new text begin agents powers or duties as it deems proper. new text end 229.22     new text begin Subd. 13. new text end new text begin Government agent. new text end new text begin The authority may cooperate with or act as agent new text end 229.23 new text begin for the federal or state government, a state public body, or an agency or instrumentality new text end 229.24 new text begin of a government or a public body to carry out sections 469.41 to 469.52 or any other new text end 229.25 new text begin related federal, state, or local law. new text end 229.26     new text begin Subd. 14. new text end new text begin Acceptance of public land. new text end new text begin The authority may accept conveyances of new text end 229.27 new text begin land from all other public agencies, commissions, or other units of government, if the land new text end 229.28 new text begin can be properly used by the authority in a medical center development district, to carry new text end 229.29 new text begin out the purposes of this chapter. The city council of the city may transfer or cause to be new text end 229.30 new text begin transferred to the authority any property owned or controlled by the city and located new text end 229.31 new text begin within the jurisdiction of the authority. The transfer must be approved by majority vote new text end 229.32 new text begin of the city council and may be with or without consideration. The city may also put the new text end 229.33 new text begin property in the possession or control of the authority by a lease or other agreement for a new text end 229.34 new text begin limited period or in fee. new text end 229.35     new text begin Subd. 15. new text end new text begin Loans in anticipation of bonds. new text end new text begin After authorizing bonds under section new text end 229.36 new text begin 469.52, the authority may borrow to provide money immediately required for the bond new text end 230.1 new text begin purposes. The loans may not exceed the amount of the bonds. The authority shall by new text end 230.2 new text begin resolution decide the terms of the loans. The loans must be evidenced by negotiable new text end 230.3 new text begin notes due in not more than 12 months from the date of the loan payable to the order of new text end 230.4 new text begin the lender, to be repaid with interest from the proceeds of the bonds when the bonds are new text end 230.5 new text begin issued and delivered to the bond purchasers. The loan must not be obtained from any new text end 230.6 new text begin board member of the authority or from any corporation, association, or other institution of new text end 230.7 new text begin which an authority board member is a stockholder or officer. new text end 230.8     new text begin Subd. 16. new text end new text begin No tax increment financing powers. new text end new text begin The authority is not an authority as new text end 230.9 new text begin defined in section 469.174, subdivision 2. new text end 230.10    Sec. 11. new text begin [469.48] REVENUE OBLIGATIONS; PLEDGE; COVENANTS. new text end 230.11     new text begin Subdivision 1. new text end new text begin Powers. new text end new text begin The authority may decide by resolution to issue its revenue new text end 230.12 new text begin bonds, notes, or other obligations either at one time or in series from time to time. The new text end 230.13 new text begin revenue bonds may be issued to provide money to pay public infrastructure project costs. new text end 230.14 new text begin The issued bonds may include the amount the authority considers necessary to establish an new text end 230.15 new text begin initial reserve to pay principal of and interest on the bonds, including capitalized interest, new text end 230.16 new text begin and to pay the costs of issuance. The resolution shall state how the bonds are to be executed. new text end 230.17     new text begin Subd. 2. new text end new text begin Form. new text end new text begin The bonds of each series issued by the authority under this section new text end 230.18 new text begin must bear interest at the rate or rates, mature at times not later than 30 years from the date new text end 230.19 new text begin of issuance, and be fully registered bonds in the form determined by the authority. All new text end 230.20 new text begin bonds issued under this section must be negotiable instruments. new text end 230.21     new text begin Subd. 3. new text end new text begin Sale. new text end new text begin The sale of revenue bonds issued by the authority may be at public or new text end 230.22 new text begin private sale. The bonds may be sold in the manner and for the amount that the authority new text end 230.23 new text begin determines to be in the best interest of the authority. The bonds may be made callable upon new text end 230.24 new text begin terms as determined by the authority and may be refunded as provided in section 475.67. new text end 230.25     new text begin Subd. 4. new text end new text begin Agreements. new text end new text begin The authority may by resolution make an agreement or new text end 230.26 new text begin covenant with the bondholders or their trustee if it determines that the agreement or new text end 230.27 new text begin covenant is needed or desirable to carry out the powers given to the authority under this new text end 230.28 new text begin section and to ensure that the revenue bonds are marketable and promptly paid. new text end 230.29     new text begin Subd. 5. new text end new text begin Revenue pledge. new text end new text begin (a) In issuing bonds under this section, the authority may new text end 230.30 new text begin secure payment of the principal and interest on the bonds by: new text end 230.31 new text begin (1) a pledge of and lien on authority revenue. The revenue must come from the new text end 230.32 new text begin facility to be acquired, constructed, or improved with the bond proceeds or from other new text end 230.33 new text begin facilities named in the bond-authorizing resolutions. The authority also may secure the new text end 230.34 new text begin payment with its promise to impose, maintain, and collect enough rentals, rates, and new text end 230.35 new text begin charges, for the use and occupancy of the facilities and for services furnished in connection new text end 231.1 new text begin with the use and occupancy, to pay its current expenses to operate and maintain the named new text end 231.2 new text begin facilities, and to produce and deposit sufficient net revenue in a special fund to meet the new text end 231.3 new text begin interest and principal requirements of the bonds, and to collect and keep any more money new text end 231.4 new text begin required by the resolutions. The authority shall decide what constitutes "current" expense new text end 231.5 new text begin under this subdivision based on what is normal and reasonable under generally accepted new text end 231.6 new text begin accounting principles. Revenues pledged by the authority must not be used or pledged for new text end 231.7 new text begin any other authority purpose unless the other use or pledge is specifically authorized in the new text end 231.8 new text begin bond-authorizing resolutions; or new text end 231.9 new text begin (2) payments by a medical business entity and a pledge of and lien on other authority new text end 231.10 new text begin revenue, including revenue received from the city or the county. new text end 231.11 new text begin (b) No bonds may be issued by the authority under this subdivision later than new text end 231.12 new text begin 20 years from the date of final enactment of this act, and no bond issued under this new text end 231.13 new text begin subdivision may have a maturity later than December 31, 2049. new text end 231.14     new text begin Subd. 6. new text end new text begin Not city, county, or state debt. new text end new text begin Revenue bonds, notes, or other obligations new text end 231.15 new text begin issued under this section are not a debt of the city, county, or state, nor a pledge of the full new text end 231.16 new text begin faith and credit of the city, county, or state. All obligations under this section are payable new text end 231.17 new text begin only from revenues described in subdivision 5. A revenue bond must contain on its face a new text end 231.18 new text begin statement to the effect that the authority does not have to pay the bond or the interest on it new text end 231.19 new text begin except from the revenues pledged thereto and that the faith, credit, and taxing power of the new text end 231.20 new text begin city, the county, and the state are not pledged to pay the principal of or interest on the bond. new text end 231.21    Sec. 12. new text begin [469.50] CITY TAX AUTHORITY. new text end 231.22     new text begin Subdivision 1. new text end new text begin Rochester, other local taxes authorized. new text end new text begin (a) Notwithstanding new text end 231.23 new text begin section new text end new text begin , or any other contrary provision of law, ordinance, or city charter, and new text end 231.24 new text begin in addition to any taxes the city may impose on these transactions under another statute new text end 231.25 new text begin or law, the city of Rochester may, by ordinance, impose at a rate determined by the city, new text end 231.26 new text begin a tax on the admission receipts to entertainment and recreational facilities, as defined new text end 231.27 new text begin by ordinance, in the city. new text end 231.28 new text begin (b) The provisions of section 297A.99, subdivisions 4 to 13, govern the new text end 231.29 new text begin administration, collection, and enforcement of any tax imposed by the city under new text end 231.30 new text begin paragraph (a). new text end 231.31 new text begin (c) The proceeds of any taxes imposed under this subdivision, less refunds and costs new text end 231.32 new text begin of collection, must be used by the city to fund obligations related to public infrastructure new text end 231.33 new text begin projects contained in the development plan, including any associated financing costs. Any new text end 231.34 new text begin tax imposed under paragraph (a) expires at the earlier of December 31, 2049, or when the new text end 231.35 new text begin city council determines that sufficient funds have been raised from the tax plus all other new text end 232.1 new text begin local funding sources authorized in this article to meet the city obligation for financing a new text end 232.2 new text begin public infrastructure project contained in the development plan, including any associated new text end 232.3 new text begin financing costs. new text end 232.4     new text begin Subd. 2. new text end new text begin General sales tax authority. new text end new text begin The city may elect to extend the existing new text end 232.5 new text begin local sales and use tax under section 11 or to impose an additional rate of up to one-quarter new text end 232.6 new text begin of one percent tax on sales and use under section 9. new text end 232.7     new text begin Subd. 3. new text end new text begin Special abatement rules. new text end new text begin (a) If the city or the county elects to use tax new text end 232.8 new text begin abatement under sections 469.1812 to 469.1815 to finance costs of public infrastructure new text end 232.9 new text begin projects, the special rules under this subdivision apply. new text end 232.10 new text begin (b) The limitations under section 469.1813, subdivision 6, do not apply to the city new text end 232.11 new text begin or the county. new text end 232.12 new text begin (c) The limitations under section 469.1813, subdivision 8, do not apply and property new text end 232.13 new text begin taxes abated by the city or the county to finance costs of public infrastructure projects are new text end 232.14 new text begin not included for purposes of applying section 469.1813, subdivision 8, to the use of tax new text end 232.15 new text begin abatement for other purposes of the city or the county; however, the total amount of property new text end 232.16 new text begin taxes abated by the city and the county under this authority must not exceed $87,750,000. new text end 232.17     new text begin Subd. 4. new text end new text begin Special tax increment financing rules. new text end new text begin If the city elects to establish new text end 232.18 new text begin a redevelopment tax increment financing district or districts within the area of the new text end 232.19 new text begin destination medical center development district, the requirements of section 469.174, new text end 232.20 new text begin subdivision 10, restricting the geographic areas that may be designated as a district do not new text end 232.21 new text begin apply and increments from the district are not required to be spent in accordance with the new text end 232.22 new text begin requirements of section 469.176, subdivision 4j. new text end 232.23    Sec. 13. new text begin [469.52] STATE INFRASTRUCTURE AID. new text end 232.24     new text begin Subdivision 1. new text end new text begin Definitions. new text end new text begin (a) For purposes of this section, the following terms new text end 232.25 new text begin have the meanings given them. new text end 232.26 new text begin (b) "Commissioner" means the commissioner of employment and economic new text end 232.27 new text begin development. new text end 232.28 new text begin (c) "Construction projects" means construction of buildings in the city for which the new text end 232.29 new text begin building permit was issued after June 30, 2013. new text end 232.30 new text begin (d) "Expenditures" means expenditures made by a medical business entity, including new text end 232.31 new text begin any affiliated entities, on construction projects for the capital cost of the project, including new text end 232.32 new text begin but not limited to: new text end 232.33 new text begin (1) design and predesign, including architectural, engineering, and similar services; new text end 232.34 new text begin (2) legal, regulatory, and other compliance costs of the project; new text end 233.1 new text begin (3) land acquisition, demolition of existing improvements, and other site preparation new text end 233.2 new text begin costs; new text end 233.3 new text begin (4) construction costs including all materials and supplies of the project; and new text end 233.4 new text begin (5) equipment and furnishings that are attached to or become part of the real property. new text end 233.5 new text begin Expenditures exclude supplies and other items with a useful life of less than a year that new text end 233.6 new text begin are not used or consumed in constructing improvements to real property or are otherwise new text end 233.7 new text begin chargeable to capital costs. new text end 233.8 new text begin (e) "Qualified expenditures" has the following meaning. In the first year in which new text end 233.9 new text begin aid is paid under this section "qualified expenditures" mean the total certified expenditures new text end 233.10 new text begin since June 30, 2013, through the end of the previous calendar year minus $250,000,000. new text end 233.11 new text begin For subsequent years "qualified expenditures" mean the certified expenditures for the new text end 233.12 new text begin previous calendar year. new text end 233.13 new text begin (f) "Transportation costs" means the portions of a public infrastructure project new text end 233.14 new text begin that are for public transportation intended primarily to serve the district, such as transit new text end 233.15 new text begin stations, equipment, right-of-way, and similar costs. new text end 233.16     new text begin Subd. 2. new text end new text begin Certification of expenditures. new text end new text begin By April 1 of each year, the medical new text end 233.17 new text begin business entity must certify to the commissioner the amount of expenditures made in the new text end 233.18 new text begin prior calendar year. The certification must be made in the form that the commissioner new text end 233.19 new text begin prescribes and include any documentation of and supporting information regarding the new text end 233.20 new text begin expenditures that the commissioner requires. By August 1 of each year, the commissioner new text end 233.21 new text begin shall determine the amount of the expenditures for the prior calendar year. new text end 233.22     new text begin Subd. 3. new text end new text begin General state infrastructure aid. new text end new text begin (a) General state infrastructure aid may new text end 233.23 new text begin not be paid out under this section until total expenditures exceed $250,000,000. new text end 233.24 new text begin (b) The amount of the general state infrastructure aid for a fiscal year equals the sum new text end 233.25 new text begin of qualified expenditures, multiplied by 3.0 percent. If the commissioner determines new text end 233.26 new text begin that the city has made the required matching local contribution under subdivision 4, the new text end 233.27 new text begin commissioner shall pay to the authority the amount of general state infrastructure aid for new text end 233.28 new text begin the year by September 1. new text end 233.29 new text begin (c) The authority must use general state infrastructure aid it receives under this new text end 233.30 new text begin subdivision for improvements and other capital costs related to the public infrastructure new text end 233.31 new text begin project, other than transit costs. During construction, installation, remodeling, and repairs new text end 233.32 new text begin of a public infrastructure project, laborers and mechanics at the site must be paid the new text end 233.33 new text begin prevailing wage as defined in section 177.42, subdivision 6, for the authority to use general new text end 233.34 new text begin state infrastructure aid. The authority must maintain appropriate records to document the new text end 233.35 new text begin use of the funds under this requirement. new text end 234.1 new text begin (d) The commissioner, in consultation with the commissioner of management and new text end 234.2 new text begin budget and representatives of the authority, shall establish a total limit on the amount new text end 234.3 new text begin of state aid payable under this subdivision that is sufficient, in combination with the new text end 234.4 new text begin local contribution, to pay for $455,000,000 of general public infrastructure projects, plus new text end 234.5 new text begin financing costs. new text end 234.6     new text begin Subd. 4. new text end new text begin General aid; local matching contribution. new text end new text begin In order to qualify for general new text end 234.7 new text begin state infrastructure aid, the city must enter a written agreement with the commissioner that new text end 234.8 new text begin requires the city to make a qualifying local matching contribution to pay for $128,000,000 new text end 234.9 new text begin of the cost of public infrastructure projects, including associated financing costs, using new text end 234.10 new text begin funds other than state aid received under this section. This agreement must provide for the new text end 234.11 new text begin manner, timing, and amounts of the city contributions, including the city's commitment for new text end 234.12 new text begin each year. The commissioner and city may agree to amend the agreement at any time in new text end 234.13 new text begin light of new information or other appropriate factors. The city may enter arrangements new text end 234.14 new text begin with the county to pay for or otherwise meet the local matching contribution requirement. new text end 234.15     new text begin Subd. 5. new text end new text begin State transit aid. new text end new text begin (a) The authority qualifies for state transit aid under new text end 234.16 new text begin this section if: new text end 234.17 new text begin (1) the county has elected to impose the transit sales tax under section 469.51 for a new text end 234.18 new text begin calendar year; and new text end 234.19 new text begin (2) the county contributes the required local matching contribution under subdivision new text end 234.20 new text begin 6 or the city or county have agreed to make an equivalent contribution out of other funds. new text end 234.21 new text begin (b) The amount of the state transit aid for a fiscal year equals the sum of qualified new text end 234.22 new text begin expenditures, as certified by the commissioner for the prior calendar year, multiplied new text end 234.23 new text begin by 0.75 percent, reduced by the amount of the local contribution under subdivision 6. new text end 234.24 new text begin The maximum amount of state transit aid payable in any year is limited to no more than new text end 234.25 new text begin $7,500,000. If the aid entitlement for the year exceeds the maximum annual limit, the new text end 234.26 new text begin excess is an aid carryover to later years. The carryover aid must be paid in the first year new text end 234.27 new text begin in which the aid entitlement for the current year is less than the maximum annual limit, new text end 234.28 new text begin but only to the extent the carryover, when added to the current year aid, is less than the new text end 234.29 new text begin maximum annual limit. new text end 234.30     new text begin (c) The commissioner, in consultation with the commissioner of management and new text end 234.31 new text begin budget and representatives of the authority, shall establish a total limit on the amount new text end 234.32 new text begin of state aid payable under this subdivision that is sufficient, in combination with the new text end 234.33 new text begin local contribution, to pay for $116,000,000 of general public infrastructure projects, plus new text end 234.34 new text begin associated financing costs. new text end 235.1 new text begin (d) During construction, installation, remodeling, and repairs of a transit project, new text end 235.2 new text begin laborers and mechanics at the site must be paid the prevailing wage as defined in section new text end 235.3 new text begin 177.42, subdivision 6, for the authority to use state transit aid. new text end 235.4     new text begin Subd. 6. new text end new text begin Transit aid; local matching contribution. new text end new text begin (a) The required local matching new text end 235.5 new text begin contribution for state transit aid equals the amount that would be raised by a 0.15 percent new text end 235.6 new text begin sales tax imposed by the county in the prior calendar year. The county may impose the new text end 235.7 new text begin sales tax under section 469.51 to meet this obligation. new text end 235.8 new text begin (b) If the county elects not to impose the tax authorized under section 469.51, the new text end 235.9 new text begin county or city or both may agree to make the local contribution out of other available new text end 235.10 new text begin funds, other than state aid payable to the authority under this section. The commissioner new text end 235.11 new text begin of revenue shall estimate the required amount and certify it to the commissioner, city, new text end 235.12 new text begin and county. new text end 235.13     new text begin Subd. 7. new text end new text begin Termination. new text end new text begin No aid may be paid under this section after fiscal year 2049. new text end 235.14     new text begin Subd. 8. new text end new text begin Appropriation. new text end new text begin An amount sufficient to pay the state general infrastructure new text end 235.15 new text begin and state transit aid authorized under this section is appropriated to the commissioner new text end 235.16 new text begin from the general fund. new text end 235.17    Sec. 14. Laws 1998, chapter 389, article 8, section 43, subdivision 1, is amended to read: 235.18    Subdivision 1. Sales and use taxes authorized. new text begin (a) new text end Notwithstanding Minnesota 235.19Statutes, section 477A.016, or any other contrary provision of law, ordinance, or city 235.20charter, upon termination of the taxes authorized under Laws 1992, chapter 511, article 235.218, section 33, subdivision 1, and if approved by the voters of the city at a general or 235.22special election held within one year of the date of final enactment of this act, the city of 235.23Rochester may, by ordinance, impose an additional sales and use tax of up to one-half 235.24of one percent. The provisions of Minnesota Statutes, section , new text begin 297A.99 new text end govern 235.25the imposition, administration, collection, and enforcement of the tax authorized under 235.26this subdivision new text begin paragraph new text end . 235.27     new text begin (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any new text end 235.28 new text begin other contrary provision of law, ordinance, or charter, the city of Rochester may, by new text end 235.29 new text begin ordinance, impose an additional sales and use tax of up to one quarter of one percent. The new text end 235.30 new text begin provisions of Minnesota Statutes, section 297A.99, subdivisions 1 and 4 to 13, govern new text end 235.31 new text begin the imposition, administration, collection, and enforcement of the tax authorized under new text end 235.32 new text begin this paragraph. new text end 236.1    Sec. 15. Laws 1998, chapter 389, article 8, section 43, subdivision 3, as amended by 236.2Laws 2005, First Special Session chapter 3, article 5, section 28, and Laws 2011, First 236.3Special Session chapter 7, article 4, section 5, is amended to read: 236.4    Subd. 3. Use of revenues. (a) Revenues received from the taxes authorized by 236.5subdivisions 1 new text begin , paragraph (a), new text end and 2 must be used by the city to pay for the cost of 236.6collecting and administering the taxes and to pay for the following projects: 236.7    (1) transportation infrastructure improvements including regional highway and 236.8airport improvements; 236.9    (2) improvements to the civic center complex; 236.10    (3) a municipal water, sewer, and storm sewer project necessary to improve regional 236.11ground water quality; and 236.12    (4) construction of a regional recreation and sports center and other higher education 236.13facilities available for both community and student use. 236.14    (b) The total amount of capital expenditures or bonds for projects listed in paragraph 236.15(a) that may be paid from the revenues raised from the taxes authorized in this section 236.16may not exceed $111,500,000. The total amount of capital expenditures or bonds for the 236.17project in clause (4) that may be paid from the revenues raised from the taxes authorized 236.18in this section may not exceed $28,000,000. 236.19(c) In addition to the projects authorized in paragraph (a) and not subject to the 236.20amount stated in paragraph (b), the city of Rochester may, if approved by the voters at an 236.21election under subdivision 5, paragraph (c), use the revenues received from the taxes and 236.22bonds authorized in this section to pay the costs of or bonds for the following purposes: 236.23(1) $17,000,000 for capital expenditures and bonds for the following Olmsted 236.24County transportation infrastructure improvements: 236.25(i) County State Aid Highway 34 reconstruction; 236.26(ii) Trunk Highway 63 and County State Aid Highway 16 interchange; 236.27(iii) phase II of the Trunk Highway 52 and County State Aid Highway 22 interchange; 236.28(iv) widening of County State Aid Highway 22 West Circle Drive; and 236.29(v) 60th Avenue Northwest corridor preservation; 236.30(2) $30,000,000 for city transportation projects including: 236.31(i) Trunk Highway 52 and 65th Street interchange; 236.32(ii) NW transportation corridor acquisition; 236.33(iii) Phase I of the Trunk Highway 52 and County State Aid Highway 22 interchange; 236.34(iv) Trunk Highway 14 and Trunk Highway 63 intersection; 236.35(v) Southeast transportation corridor acquisition; 236.36(vi) Rochester International Airport expansion; and 237.1(vii) a transit operations center bus facility; 237.2(3) $14,000,000 for the University of Minnesota Rochester academic and 237.3complementary facilities; 237.4(4) $6,500,000 for the Rochester Community and Technical College/Winona State 237.5University career technical education and science and math facilities; 237.6(5) $6,000,000 for the Rochester Community and Technical College regional 237.7recreation facilities at University Center Rochester; 237.8(6) $20,000,000 for the Destination Medical Community Initiative; 237.9(7) $8,000,000 for the regional public safety and 911 dispatch center facilities; 237.10(8) $20,000,000 for a regional recreation/senior center; 237.11(9) $10,000,000 for an economic development fund; and 237.12(10) $8,000,000 for downtown infrastructure. 237.13(d) No revenues from the taxes raised from the taxes authorized in subdivisions 1 237.14and 2 may be used to fund transportation improvements related to a railroad bypass that 237.15would divert traffic from the city of Rochester. 237.16(e) The city shall use $5,000,000 of the money allocated to the purpose in paragraph 237.17(c), clause (9), for grants to the cities of Byron, Chatfield, Dodge Center, Dover, Elgin, 237.18Eyota, Kasson, Mantorville, Oronoco, Pine Island, Plainview, St. Charles, Stewartville, 237.19Zumbrota, Spring Valley, West Concord, and Hayfield new text begin , Racine, Grand Meadow, Dexter, new text end 237.20 new text begin Wanamingo, and Mazeppa new text end for economic development projects that these communities 237.21would fund through their economic development authority or housing and redevelopment 237.22authority. 237.23 new text begin (f) Notwithstanding Minnesota Statutes, section new text end new text begin , subdivisions 2 and 3, if new text end 237.24 new text begin the city decides to extend the taxes in subdivisions 1, paragraph (a), and 2, as allowed new text end 237.25 new text begin under subdivision 5, paragraph (c), the city must use any amount in excess of the amount new text end 237.26 new text begin necessary to meet obligations under paragraphs (a) to (c) from those taxes to fund new text end 237.27 new text begin obligations, including associated financing costs, related to public infrastructure projects new text end 237.28 new text begin in the development plan adopted under Minnesota Statutes, section 469.42. new text end 237.29 new text begin (g) Revenues from the tax under subdivision 1, paragraph (b), must be used to new text end 237.30 new text begin fund obligations, including associated financing costs, related to the public infrastructure new text end 237.31 new text begin projects contained in the development plan adopted by the city under Minnesota Statutes, new text end 237.32 new text begin section 469.42. new text end 237.33    Sec. 16. Laws 1998, chapter 389, article 8, section 43, subdivision 5, as amended by 237.34Laws 2005, First Special Session chapter 3, article 5, section 30, and Laws 2011, First 237.35Special Session chapter 7, article 4, section 7, is amended to read: 238.1    Subd. 5. Termination of taxes. (a) The taxes imposed under subdivisions 1 and 2 238.2expire at the later of (1) December 31, 2009, or (2) when the city council determines that 238.3sufficient funds have been received from the taxes to finance the first $71,500,000 of capital 238.4expenditures and bonds for the projects authorized in subdivision 3, including the amount to 238.5prepay or retire at maturity the principal, interest, and premium due on any bonds issued for 238.6the projects under subdivision 4, unless the taxes are extended as allowed in paragraph (b). 238.7Any funds remaining after completion of the project and retirement or redemption of the 238.8bonds shall also be used to fund the projects under subdivision 3. The taxes imposed under 238.9subdivisions 1 and 2 may expire at an earlier time if the city so determines by ordinance. 238.10    (b) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 238.11other contrary provision of law, ordinance, or city charter, the city of Rochester may, by 238.12ordinance, extend the taxes authorized in subdivisions 1 and 2 beyond December 31, 2009, 238.13if approved by the voters of the city at a special election in 2005 or the general election in 238.142006. The question put to the voters must indicate that an affirmative vote would allow 238.15up to an additional $40,000,000 of sales tax revenues be raised and up to $40,000,000 238.16of bonds to be issued above the amount authorized in the June 23, 1998, referendum for 238.17the projects specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are 238.18extended under this paragraph, the taxes expire when the city council determines that 238.19sufficient funds have been received from the taxes to finance the projects and to prepay 238.20or retire at maturity the principal, interest, and premium due on any bonds issued for the 238.21projects under subdivision 4. Any funds remaining after completion of the project and 238.22retirement or redemption of the bonds may be placed in the general fund of the city. 238.23(c) Notwithstanding Minnesota Statutes, sections 297A.99 and 477A.016, or any 238.24other contrary provision of law, ordinance, or city charter, the city of Rochester may, 238.25by ordinance, extend the taxes authorized in subdivisions 1 new text begin , paragraph (a), new text end and 2 new text begin up to new text end 238.26 new text begin December 31, 2046, provided that all additional revenues above those necessary to fund new text end 238.27 new text begin the projects and associated financing costs listed in subdivision 3, paragraphs (a) to (e), new text end 238.28 new text begin are committed to fund public infrastructure projects contained in the development plan new text end 238.29 new text begin adopted under Minnesota Statutes, section 469.42, including all associated financing new text end 238.30 new text begin costs; otherwise the taxes terminate when new text end beyond the date the city council determines 238.31that sufficient funds have been received from the taxes to finance $111,500,000 of new text begin the new text end 238.32expenditures and bonds for the projects authorized in subdivision 3, paragraph (a) 238.33 new text begin paragraphs (a) to (e) new text end , plus an amount equal to the costs of issuance of the bonds and 238.34including the amount to prepay or retire at maturity the principal, interest, and premiums 238.35due on any bonds issued for the projects under subdivision 4, paragraph (a), if approved 238.36by the voters of the city at the general election in 2012. If the election to authorize the 239.1additional $139,500,000 of bonds plus an amount equal to the costs of the issuance of the 239.2bonds is placed on the general election ballot in 2012, the city may continue to collect the 239.3taxes authorized in subdivisions 1 and 2 until December 31, 2012. The question put to 239.4the voters must indicate that an affirmative vote would allow sales tax revenues be raised 239.5for an extended period of time and an additional $139,500,000 of bonds plus an amount 239.6equal to the costs of issuance of the bonds, to be issued above the amount authorized in 239.7the previous elections required under paragraphs (a) and (b) for the projects and amounts 239.8specified in subdivision 3. If the taxes authorized in subdivisions 1 and 2 are extended 239.9under this paragraph, the taxes expire when the city council determines that $139,500,000 239.10has been received from the taxes to finance the projects plus an amount sufficient to 239.11prepay or retire at maturity the principal, interest, and premium due on any bonds issued 239.12for the projects under subdivision 4, including any bonds issued to refund the bonds. Any 239.13funds remaining after completion of the projects and retirement or redemption of the 239.14bonds may be placed in the general fund of the city. 239.15 new text begin (d) The tax imposed under subdivision 1, paragraph (b), expires at the earlier of new text end 239.16 new text begin 2046, or when the city council determines that sufficient funds have been raised from the new text end 239.17 new text begin tax plus all other city funding sources authorized in this article to meet the city obligation new text end 239.18 new text begin for financing the public infrastructure projects contained in the development plan adopted new text end 239.19 new text begin under Minnesota Statutes, section 469.42, including all associated financing costs. new text end 239.20    Sec. 17. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009, 239.21chapter 88, article 4, section 19, and Laws 2010, chapter 389, article 5, section 3, is 239.22amended to read: 239.23    Sec. 25. ROCHESTER LODGING TAX. 239.24    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section 239.25469.190 or 477A.016, or any other law, the city of Rochester may impose an additional 239.26tax of one percent on the gross receipts from the furnishing for consideration of lodging at 239.27a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it 239.28for a continuous period of 30 days or more. 239.29    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or 239.30477A.016 , or any other law, and in addition to the tax authorized by subdivision 1, the city 239.31of Rochester may impose an additional tax of one percent on the gross receipts from the 239.32furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or 239.33resort, other than the renting or leasing of it for a continuous period of 30 days or more only 239.34upon the approval of the city governing body of a total financial package for the project. 240.1     new text begin Subd. 1b. new text end new text begin Authorization. new text end new text begin Notwithstanding Minnesota Statutes, section 469.190 or new text end 240.2 new text begin 477A.016, or any other law, and in addition to the taxes authorized by subdivisions 1 and 1a, new text end 240.3 new text begin the city of Rochester may impose an additional tax of 3 percent on the gross receipts from new text end 240.4 new text begin the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, new text end 240.5 new text begin or resort, other than the renting or leasing of it for a continuous period of 30 days or more. new text end 240.6    Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax imposed 240.7under subdivision 1 must be used by the city to fund a local convention or tourism bureau 240.8for the purpose of marketing and promoting the city as a tourist or convention center. 240.9(b) The gross proceeds from the one percent tax imposed under subdivision 1a 240.10 new text begin and the three percent tax imposed under subdivision 1b new text end shall be used to pay for (1) 240.11construction, renovation, improvement, and expansion of the Mayo Civic Center and 240.12related skyway access, lighting, parking, or landscaping; and (2) for payment of any 240.13principal, interest, or premium on bonds issued to finance the construction, renovation, 240.14improvement, and expansion of the Mayo Civic Center Complex. 240.15    Subd. 2a. Bonds. The city of Rochester may issue, without an election, general 240.16obligation bonds of the city, in one or more series, in the aggregate principal amount 240.17not to exceed $43,500,000, to pay for capital and administrative costs for the design, 240.18construction, renovation, improvement, and expansion of the Mayo Civic Center Complex, 240.19and related skyway, access, lighting, parking, and landscaping. The city may pledge 240.20the lodging tax authorized by subdivision 1a and the food and beverage tax authorized 240.21under Laws 2009, chapter 88, article 4, section 23, to the payment of the bonds. The debt 240.22represented by the bonds is not included in computing any debt limitations applicable to 240.23the city, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the 240.24principal of and interest on the bonds is not subject to any levy limitation or included in 240.25computing or applying any levy limitation applicable to the city. 240.26    Subd. 3. Expiration of taxing authority. new text begin (a) new text end The authority of the city to impose a 240.27tax under subdivision 1a shall expire when the principal and interest on any bonds or other 240.28obligations issued prior to December 31, 2014, to finance the construction, renovation, 240.29improvement, and expansion of the Mayo Civic Center Complex and related skyway 240.30access, lighting, parking, or landscaping have been paid, including any bonds issued to 240.31refund such bonds, or at an earlier time as the city shall, by ordinance, determine. Any 240.32funds remaining after completion of the project and retirement or redemption of the bonds 240.33shall be placed in the general fund of the city. 240.34 new text begin (b) The authority of the city to impose a tax under subdivision 1b shall expire at the new text end 240.35 new text begin earlier of December 31, 2046, or when the city council determines that sufficient funds new text end 240.36 new text begin have been raised from the tax, plus all other local funding sources authorized in this article new text end 241.1 new text begin to meet the city obligation for financing a public infrastructure project contained in the new text end 241.2 new text begin development plan, including associated financing costs. new text end 241.3    Sec. 18. new text begin EFFECTIVE DATE. new text end 241.4 new text begin Except as otherwise provided, this article is effective the day after the governing new text end 241.5 new text begin body of the city of Rochester and its chief clerical officer timely comply with Minnesota new text end 241.6 new text begin Statutes, section 645.021, subdivisions 2 and 3. new text end 241.7ARTICLE 10 241.8MINERALS TAX 241.9    Section 1. Minnesota Statutes 2012, section 126C.48, subdivision 8, is amended to read: 241.10    Subd. 8. Taconite payment and other reductions. (1) Reductions in levies 241.11pursuant to subdivision 1 must be made prior to the reductions in clause (2). 241.12(2) Notwithstanding any other law to the contrary, districts that have revenue 241.13pursuant to sections 298.018; 298.225; 298.24 to 298.28, except an amount distributed 241.14under sections 298.26; 298.28, subdivision 4, paragraphs (c), clause (ii), and (d); 298.34 241.15to 298.39; 298.391 to 298.396; 298.405; 477A.15; and any law imposing a tax upon 241.16severed mineral values must reduce the levies authorized by this chapter and chapters 241.17120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A by 95 percent of new text begin the sum of new text end the 241.18previous year's revenue specified under this clause new text begin and the amount attributable to the same new text end 241.19 new text begin production year distributed to the cities and townships within the school district under new text end 241.20 new text begin section 298.28, subdivision 2, paragraph (c) new text end . 241.21(3) The amount of any voter approved referendum, facilities down payment, and 241.22debt levies shall not be reduced by more than 50 percent under this subdivision. In 241.23administering this paragraph, the commissioner shall first reduce the nonvoter approved 241.24levies of a district; then, if any payments, severed mineral value tax revenue or recognized 241.25revenue under paragraph (2) remains, the commissioner shall reduce any voter approved 241.26referendum levies authorized under section 126C.17; then, if any payments, severed 241.27mineral value tax revenue or recognized revenue under paragraph (2) remains, the 241.28commissioner shall reduce any voter approved facilities down payment levies authorized 241.29under section 123B.63 and then, if any payments, severed mineral value tax revenue or 241.30recognized revenue under paragraph (2) remains, the commissioner shall reduce any 241.31voter approved debt levies. 241.32(4) Before computing the reduction pursuant to this subdivision of the health and 241.33safety levy authorized by sections 123B.57 and 126C.40, subdivision 5, the commissioner 241.34shall ascertain from each affected school district the amount it proposes to levy under 242.1each section or subdivision. The reduction shall be computed on the basis of the amount 242.2so ascertained. 242.3(5) To the extent the levy reduction calculated under paragraph (2) exceeds the 242.4limitation in paragraph (3), an amount equal to the excess must be distributed from the 242.5school district's distribution under sections 298.225, 298.28, and 477A.15 in the following 242.6year to the cities and townships within the school district in the proportion that their 242.7taxable net tax capacity within the school district bears to the taxable net tax capacity of 242.8the school district for property taxes payable in the year prior to distribution. No city or 242.9township shall receive a distribution greater than its levy for taxes payable in the year prior 242.10to distribution. The commissioner of revenue shall certify the distributions of cities and 242.11towns under this paragraph to the county auditor by September 30 of the year preceding 242.12distribution. The county auditor shall reduce the proposed and final levies of cities and 242.13towns receiving distributions by the amount of their distribution. Distributions to the cities 242.14and towns shall be made at the times provided under section 298.27. 242.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for levies certified in 2013 and later. new text end 242.16    Sec. 2. Minnesota Statutes 2012, section 298.17, is amended to read: 242.17298.17 OCCUPATION TAXES TO BE APPORTIONED. 242.18 new text begin (a) new text end All occupation taxes paid by persons, copartnerships, companies, joint stock 242.19companies, corporations, and associations, however or for whatever purpose organized, 242.20engaged in the business of mining or producing iron ore or other ores, when collected 242.21shall be apportioned and distributed in accordance with the Constitution of the state of 242.22Minnesota, article X, section 3, in the manner following: 90 percent shall be deposited 242.23in the state treasury and credited to the general fund of which four-ninths shall be used 242.24for the support of elementary and secondary schools; and ten percent of the proceeds of 242.25the tax imposed by this section shall be deposited in the state treasury and credited to the 242.26general fund for the general support of the university. 242.27 new text begin (b) new text end Of the moneys apportioned to the general fund by this section new text begin : (1) there is new text end 242.28 new text begin annually appropriated and credited to the mining environmental and regulatory account in new text end 242.29 new text begin the special revenue fund an amount equal to that which would have been generated by a five new text end 242.30 new text begin cent tax imposed by section new text end new text begin on each taxable ton produced in the preceding calendar new text end 242.31 new text begin year. Money in the mining environmental and regulatory account is appropriated annually new text end 242.32 new text begin to the commissioner of natural resources to fund agency staff to work on environmental new text end 242.33 new text begin issues and provide regulatory services for ferrous and nonferrous mining operations in this new text end 242.34 new text begin state. Payment to the mining environmental and regulatory account shall be made by July new text end 243.1 new text begin 1 annually. The commissioner of natural resources shall execute an interagency agreement new text end 243.2 new text begin with the pollution control agency to assist with the provision of environmental regulatory new text end 243.3 new text begin services such as monitoring and permitting required for ferrous and nonferrous mining new text end 243.4 new text begin operations; and (2) new text end there is annually appropriated and credited to the Iron Range Resources 243.5and Rehabilitation Board account in the special revenue fund an amount equal to that which 243.6would have been generated by a 1.5 cent tax imposed by section 298.24 on each taxable ton 243.7produced in the preceding calendar year, to be expended for the purposes of section 298.22. 243.8The money appropriated pursuant to this section new text begin clause (2) new text end shall be used (1) new text begin (i) new text end 243.9 to provide environmental development grants to local governments located within any 243.10county in region 3 as defined in governor's executive order number 60, issued on June 243.1112, 1970, which does not contain a municipality qualifying pursuant to section 273.134, 243.12paragraph (b) , or (2) new text begin (ii) new text end to provide economic development loans or grants to businesses 243.13located within any such county, provided that the county board or an advisory group 243.14appointed by the county board to provide recommendations on economic development 243.15shall make recommendations to the Iron Range Resources and Rehabilitation Board 243.16regarding the loans. Payment to the Iron Range Resources and Rehabilitation Board 243.17account shall be made by May 15 annually. 243.18 new text begin (c) new text end Of the money allocated to Koochiching County, one-third must be paid to the 243.19Koochiching County Economic Development Commission. 243.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning for the 2013 production new text end 243.21 new text begin year. new text end 243.22    Sec. 3. Minnesota Statutes 2012, section 298.227, as amended by Laws 2013, chapter 243.233, section 17, is amended to read: 243.24298.227 TACONITE ECONOMIC DEVELOPMENT FUND. 243.25    (a) An amount equal to that distributed pursuant to each taconite producer's taxable 243.26production and qualifying sales under section 298.28, subdivision 9a, shall be held by 243.27the Iron Range Resources and Rehabilitation Board in a separate taconite economic 243.28development fund for each taconite and direct reduced ore producer. Money from the 243.29fund for each producer shall be released by the commissioner after review by a joint 243.30committee consisting of an equal number of representatives of the salaried employees and 243.31the nonsalaried production and maintenance employees of that producer. The District 11 243.32director of the United States Steelworkers of America, on advice of each local employee 243.33president, shall select the employee members. In nonorganized operations, the employee 243.34committee shall be elected by the nonsalaried production and maintenance employees. The 244.1review must be completed no later than six months after the producer presents a proposal 244.2for expenditure of the funds to the committee. The funds held pursuant to this section may 244.3be released only for workforce development and associated public facility improvement, 244.4or for acquisition of plant and stationary mining equipment and facilities for the producer 244.5or for research and development in Minnesota on new mining, or taconite, iron, or steel 244.6production technology, but only if the producer provides a matching expenditure to be used 244.7for the same purpose of at least 50 percent new text begin equal to the amount new text end of the distribution based on 244.814.7 cents per ton beginning with distributions in 2002 new text begin 2013 new text end . Effective for proposals for 244.9expenditures of money from the fund beginning May 26, 2007, the commissioner may not 244.10release the funds before the next scheduled meeting of the board. If a proposed expenditure 244.11is not approved by the board, the funds must be deposited in the Taconite Environmental 244.12Protection Fund under sections 298.222 to 298.225. If a producer uses money which has 244.13been released from the fund prior to May 26, 2007 to procure haulage trucks, mobile 244.14equipment, or mining shovels, and the producer removes the piece of equipment from the 244.15taconite tax relief area defined in section 273.134 within ten years from the date of receipt 244.16of the money from the fund, a portion of the money granted from the fund must be repaid 244.17to the taconite economic development fund. The portion of the money to be repaid is 100 244.18percent of the grant if the equipment is removed from the taconite tax relief area within 12 244.19months after receipt of the money from the fund, declining by ten percent for each of the 244.20subsequent nine years during which the equipment remains within the taconite tax relief 244.21area. If a taconite production facility is sold after operations at the facility had ceased, any 244.22money remaining in the fund for the former producer may be released to the purchaser of 244.23the facility on the terms otherwise applicable to the former producer under this section. If 244.24a producer fails to provide matching funds for a proposed expenditure within six months 244.25after the commissioner approves release of the funds, the funds are available for release to 244.26another producer in proportion to the distribution provided and under the conditions of 244.27this section. Any portion of the fund which is not released by the commissioner within 244.28one year of its deposit in the fund shall be divided between the taconite environmental 244.29protection fund created in section 298.223 and the Douglas J. Johnson economic protection 244.30trust fund created in section 298.292 for placement in their respective special accounts. 244.31Two-thirds of the unreleased funds shall be distributed to the taconite environmental 244.32protection fund and one-third to the Douglas J. Johnson economic protection trust fund. 244.33    (b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of 244.34distributions and the review process, an amount equal to ten cents per taxable ton of 244.35production in 2007, for distribution in 2008 only, that would otherwise be distributed 244.36under paragraph (a), may be used for a loan or grant for the cost of providing for a 245.1value-added wood product facility located in the taconite tax relief area and in a county 245.2that contains a city of the first class. This amount must be deducted from the distribution 245.3under paragraph (a) for which a matching expenditure by the producer is not required. The 245.4granting of the loan or grant is subject to approval by the board. If the money is provided 245.5as a loan, interest must be payable on the loan at the rate prescribed in section 298.2213, 245.6subdivision 3 . (ii) Repayments of the loan and interest, if any, must be deposited in the 245.7taconite environment protection fund under sections 298.222 to 298.225. If a loan or 245.8grant is not made under this paragraph by July 1, 2012, the amount that had been made 245.9available for the loan under this paragraph must be transferred to the taconite environment 245.10protection fund under sections 298.222 to 298.225. (iii) Money distributed in 2008 to the 245.11fund established under this section that exceeds ten cents per ton is available to qualifying 245.12producers under paragraph (a) on a pro rata basis. 245.13(c) Repayment or transfer of money to the taconite environmental protection fund 245.14under paragraph (b), item (ii), must be allocated by the Iron Range Resources and 245.15Rehabilitation Board for public works projects in house legislative districts in the same 245.16proportion as taxable tonnage of production in 2007 in each house legislative district, for 245.17distribution in 2008, bears to total taxable tonnage of production in 2007, for distribution 245.18in 2008. Notwithstanding any other law to the contrary, expenditures under this paragraph 245.19do not require approval by the governor. For purposes of this paragraph, "house legislative 245.20districts" means the legislative districts in existence on May 15, 2009. 245.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning for the 2013 distribution. new text end 245.22    Sec. 4. Minnesota Statutes 2012, section 298.24, subdivision 1, is amended to read: 245.23    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002, 245.24and 2003 new text begin 2013 new text end , there is imposed upon taconite and iron sulphides, and upon the mining 245.25and quarrying thereof, and upon the production of iron ore concentrate therefrom, and 245.26upon the concentrate so produced, a tax of $2.103 new text begin $2.56 new text end per gross ton of merchantable 245.27iron ore concentrate produced therefrom. For concentrates produced in 2005, the tax rate 245.28is the same rate imposed for concentrates produced in 2004. For concentrates produced in 245.292009 and subsequent years, The tax is also imposed upon other iron-bearing material. 245.30    (b) For concentrates produced in 2006 new text begin 2014 new text end and subsequent years, the tax rate shall 245.31be equal to the preceding year's tax rate plus an amount equal to the preceding year's tax 245.32rate multiplied by the percentage increase in the implicit price deflator from the fourth 245.33quarter of the second preceding year to the fourth quarter of the preceding year. "Implicit 245.34price deflator" means the implicit price deflator for the gross domestic product prepared by 245.35the Bureau of Economic Analysis of the United States Department of Commerce. 246.1    (c) An additional tax is imposed equal to three cents per gross ton of merchantable 246.2iron ore concentrate for each one percent that the iron content of the product exceeds 72 246.3percent, when dried at 212 degrees Fahrenheit. 246.4    (d) The tax on taconite and iron sulphides shall be imposed on the average of the 246.5production for the current year and the previous two years. The rate of the tax imposed 246.6will be the current year's tax rate. This clause shall not apply in the case of the closing 246.7of a taconite facility if the property taxes on the facility would be higher if this clause 246.8and section 298.25 were not applicable. The tax on other iron-bearing material shall be 246.9imposed on the current year production. 246.10    (e) If the tax or any part of the tax imposed by this subdivision is held to be 246.11unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate 246.12produced shall be imposed. 246.13    (f) Consistent with the intent of this subdivision to impose a tax based upon the 246.14weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly 246.15determine the weight of merchantable iron ore concentrate included in fluxed pellets by 246.16subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic 246.17flux additives included in the pellets from the weight of the pellets. For purposes of this 246.18paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite, 246.19olivine, or other basic flux additives are combined with merchantable iron ore concentrate. 246.20No subtraction from the weight of the pellets shall be allowed for binders, mineral and 246.21chemical additives other than basic flux additives, or moisture. 246.22    (g)(1) Notwithstanding any other provision of this subdivision, for the first two years 246.23of a plant's commercial production of direct reduced ore from ore mined in this state, no 246.24tax is imposed under this section. As used in this paragraph, "commercial production" is 246.25production of more than 50,000 tons of direct reduced ore in the current year or in any prior 246.26year, "noncommercial production" is production of 50,000 tons or less of direct reduced ore 246.27in any year, and "direct reduced ore" is ore that results in a product that has an iron content 246.28of at least 75 percent. For the third year of a plant's commercial production of direct 246.29reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate otherwise 246.30determined under this subdivision. For the fourth commercial production year, the rate is 246.3150 percent of the rate otherwise determined under this subdivision; for the fifth commercial 246.32production year, the rate is 75 percent of the rate otherwise determined under this 246.33subdivision; and for all subsequent commercial production years, the full rate is imposed. 246.34    (2) Subject to clause (1), production of direct reduced ore in this state is subject to 246.35the tax imposed by this section, but if that production is not produced by a producer of 246.36taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron 247.1sulfides, or other iron-bearing material, that is consumed in the production of direct 247.2reduced iron in this state is not subject to the tax imposed by this section on taconite, 247.3iron sulfides, or other iron-bearing material. 247.4    (3) Notwithstanding any other provision of this subdivision, no tax is imposed 247.5on direct reduced ore under this section during the facility's noncommercial production 247.6of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial 247.7production of direct reduced ore is subject to the tax imposed by this section on taconite 247.8and iron sulphides. Three-year average production of direct reduced ore does not 247.9include production of direct reduced ore in any noncommercial year. Three-year average 247.10production for a direct reduced ore facility that has noncommercial production is the 247.11average of the commercial production of direct reduced ore for the current year and the 247.12previous two commercial years. 247.13    (4) This paragraph applies only to plants for which all environmental permits have 247.14been obtained and construction has begun before July 1, 2008. 247.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning for the 2013 production new text end 247.16 new text begin year. new text end 247.17    Sec. 5. Minnesota Statutes 2012, section 298.28, subdivision 4, is amended to read: 247.18    Subd. 4. School districts. (a) 23.15 new text begin 32.15 new text end cents per taxable ton, plus the increase 247.19provided in paragraph (d), less the amount that would have been computed under 247.20Minnesota Statutes 2008, section 126C.21, subdivision 4, for the current year for that 247.21district, must be allocated to qualifying school districts to be distributed, based upon the 247.22certification of the commissioner of revenue, under paragraphs (b), (c), and (f). 247.23    (b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which 247.24the lands from which taconite was mined or quarried were located or within which the 247.25concentrate was produced. The distribution must be based on the apportionment formula 247.26prescribed in subdivision 2. 247.27    (ii) Four cents per taxable ton from each taconite facility must be distributed to 247.28each affected school district for deposit in a fund dedicated to building maintenance 247.29and repairs, as follows: 247.30    (1) proceeds from Keewatin Taconite or its successor are distributed to Independent 247.31School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor 247.32districts; 247.33    (2) proceeds from the Hibbing Taconite Company or its successor are distributed to 247.34Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor 247.35districts; 248.1    (3) proceeds from the Mittal Steel Company and Minntac or their successors are 248.2distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia, 248.32711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts; 248.4    (4) proceeds from the Northshore Mining Company or its successor are distributed 248.5to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior, 248.6or their successor districts; and 248.7    (5) proceeds from United Taconite or its successor are distributed to Independent 248.8School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their 248.9successor districts. 248.10    Revenues that are required to be distributed to more than one district shall be 248.11apportioned according to the number of pupil units identified in section 126C.05, 248.12subdivision 1 , enrolled in the second previous year. 248.13    (c)(i) 15.72 new text begin 24.72 new text end cents per taxable ton, less any amount distributed under paragraph 248.14(e), shall be distributed to a group of school districts comprised of those school districts 248.15which qualify as a tax relief area under section 273.134, paragraph (b), or in which there is 248.16a qualifying municipality as defined by section 273.134, paragraph (a), in direct proportion 248.17to school district indexes as follows: for each school district, its pupil units determined 248.18under section 126C.05 for the prior school year shall be multiplied by the ratio of the 248.19average adjusted net tax capacity per pupil unit for school districts receiving aid under 248.20this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 248.21ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 248.22Each district shall receive that portion of the distribution which its index bears to the sum 248.23of the indices for all school districts that receive the distributions. 248.24    (ii) Notwithstanding clause (i), each school district that receives a distribution 248.25under sections 298.018; 298.23 to 298.28, exclusive of any amount received under this 248.26clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on 248.27severed mineral values after reduction for any portion distributed to cities and towns 248.28under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its 248.29levy reduction under section 126C.48, subdivision 8, for the second year prior to the 248.30year of the distribution shall receive a distribution equal to the difference; the amount 248.31necessary to make this payment shall be derived from proportionate reductions in the 248.32initial distribution to other school districts under clause (i). If there are insufficient tax 248.33proceeds to make the distribution provided under this paragraph in any year, money must 248.34be transferred from the taconite property tax relief account in subdivision 6, to the extent 248.35of the shortfall in the distribution. 249.1    (d) new text begin (1) new text end Any school district described in paragraph (c) where a levy increase pursuant 249.2to section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 249.32001, shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 249.4times the pupil units identified in section 126C.05, subdivision 1, enrolled in the second 249.5previous year or the 1983-1984 school year, whichever is greater, less the product of 1.8 249.6percent times the district's taxable net tax capacity in the second previous year new text begin 2011 new text end . 249.7 new text begin (2) Districts qualifying under clause (d)(1) must also receive 22.5 percent of the sum new text end 249.8 new text begin of $415 plus the referendum allowance on the payable 2012 levy limitation, multiplied by new text end 249.9 new text begin the district's weight average daily membership in school year 2011-2012, less the product new text end 249.10 new text begin of 1.8 percent of the districts taxable net tax capacity in 2011. new text end 249.11    If the total amount provided by paragraph (d) is insufficient to make the payments 249.12herein required then the entitlement of $175 per pupil unit shall be reduced uniformly 249.13so as not to exceed the funds available. Any amounts received by a qualifying school 249.14district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general 249.15education aid which the district receives pursuant to section 126C.13 or the permissible 249.16levies of the district. Any amount remaining after the payments provided in this paragraph 249.17shall be paid to the commissioner of Iron Range resources and rehabilitation who shall 249.18deposit the same in the taconite environmental protection fund and the Douglas J. Johnson 249.19economic protection trust fund as provided in subdivision 11. 249.20    Each district receiving money according to this paragraph shall reserve the lesser of 249.21the amount received under this paragraph or $25 times the number of pupil units served 249.22in the district. It may use the money for early childhood programs or for outcome-based 249.23learning programs that enhance the academic quality of the district's curriculum. The 249.24outcome-based learning programs must be approved by the commissioner of education. 249.25    (e) There shall be distributed to any school district the amount which the school 249.26district was entitled to receive under section 298.32 in 1975. 249.27    (f) Four cents per taxable ton must be distributed to qualifying school districts 249.28according to the distribution specified in paragraph (b), clause (ii), and two new text begin eleven new text end cents 249.29per taxable ton must be distributed according to the distribution specified in paragraph 249.30(c). These amounts are not subject to sections 126C.21, subdivision 4, and 126C.48, 249.31subdivision 8 . 249.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning for the 2014 distribution. new text end 249.33    Sec. 6. Minnesota Statutes 2012, section 298.28, subdivision 6, is amended to read: 249.34    Subd. 6. Property tax relief. (a) In 2002 new text begin 2014 new text end and thereafter, 33.9 new text begin 34.8 new text end cents per 249.35taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or 250.1section 298.2961, subdivision 5, must be allocated to St. Louis County acting as the 250.2counties' fiscal agent, to be distributed as provided in sections 273.134 to 273.136. 250.3    (b) If an electric power plant owned by and providing the primary source of power 250.4for a taxpayer mining and concentrating taconite is located in a county other than the 250.5county in which the mining and the concentrating processes are conducted, .1875 cent per 250.6taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county. 250.7    (c) If an electric power plant owned by and providing the primary source of power 250.8for a taxpayer mining and concentrating taconite is located in a school district other than 250.9a school district in which the mining and concentrating processes are conducted, .4541 250.10cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to 250.11the school district. 250.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning for the 2014 distribution. new text end 250.13    Sec. 7. new text begin 2013 DISTRIBUTION ONLY. new text end 250.14 new text begin For the 2013 distribution, a special fund is established to receive 32 cents per ton of new text end 250.15 new text begin any excess of the balance remaining after distribution of amounts required under Minnesota new text end 250.16 new text begin Statutes, section 298.28, subdivision 6. The following amounts are allocated to St. Louis new text end 250.17 new text begin County acting as the fiscal agent for the recipients for the following specific purposes: new text end 250.18 new text begin (1) 5.1 cents per ton to the city of Hibbing for improvements to the city's water new text end 250.19 new text begin supply system; new text end 250.20 new text begin (2) 4.3 cents per ton to the city of Mountain Iron for the cost of moving utilities new text end 250.21 new text begin required as a result of actions undertaken by United States Steel Corporation; new text end 250.22 new text begin (3) 2.5 cents per ton to the city of Biwabik for improvements to the city's water supply new text end 250.23 new text begin system, payable upon agreement with ArcelorMittal to satisfy water permit conditions; new text end 250.24 new text begin (4) 2.5 cents per ton to the city of Tower for the Tower Marina; new text end 250.25 new text begin (5) 2.5 cents per ton to the city of Grand Rapids for an eco-friendly heat transfer new text end 250.26 new text begin system to replace aging effluent lines and for parking lot repaving; new text end 250.27 new text begin (6) 2.4 cents per ton to the city of Two Harbors for wastewater treatment plant new text end 250.28 new text begin improvements; new text end 250.29 new text begin (7) 0.9 cents per ton to the city of Ely for the sanitary sewer replacement project; new text end 250.30 new text begin (8) 0.6 cents per ton to the town of Crystal Bay for debt service of the Claire Nelson new text end 250.31 new text begin Intermodal Transportation Center; new text end 250.32 new text begin (9) 0.5 cents per ton to the Greenway Joint Recreation Board for the Coleraine new text end 250.33 new text begin hockey arena renovations; new text end 251.1 new text begin (10) 1.2 cents per ton for the West Range Regional Fire Hall and Training Center new text end 251.2 new text begin to merge the existing fire services of Coleraine, Bovey, Taconite Marble, Calumet, and new text end 251.3 new text begin Greenway Township; new text end 251.4 new text begin (11) 2.5 cents per ton to the city of Hibbing for the Memorial Building; new text end 251.5 new text begin (12) 0.7 cents per ton to the city of Chisholm for Center Drive; new text end 251.6 new text begin (13) 2.1 cents per ton to the Crane Lake Water and Sanitary District for sanitary new text end 251.7 new text begin sewer extension and must be matched; new text end 251.8 new text begin (14) 2.5 cents per ton for the city of Buhl for the roof on the Mesabi Academy; new text end 251.9 new text begin (15) 1.2 cents per ton to the city of Gilbert for the New Jersey/Ohio Avenue project; new text end 251.10 new text begin (16) 1.5 cents per ton to the city of Cook for street improvements, business park new text end 251.11 new text begin infrastructure, and a maintenance garage; new text end 251.12 new text begin (17) 0.5 cents per ton to the city of Cook for a water line project; and new text end 251.13 new text begin (18) 0.2 cents per ton to the city of Eveleth to be used for the support of the Hockey new text end 251.14 new text begin Hall of Fame, provided that it continues to operate in that city. new text end 251.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for the 2013 distribution, and all new text end 251.16 new text begin payments must be made separately and within ten days of the date of the August 2013 new text end 251.17 new text begin payment. new text end 251.18    Sec. 8. new text begin IRON RANGE RESOURCES AND REHABILITATION new text end 251.19 new text begin COMMISSIONER; BONDS AUTHORIZED. new text end 251.20     new text begin Subdivision 1. new text end new text begin Issuance; purpose. new text end new text begin Notwithstanding any provision of Minnesota new text end 251.21 new text begin Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and new text end 251.22 new text begin rehabilitation shall issue revenue bonds in a principal amount of $38,000,000 plus an new text end 251.23 new text begin amount sufficient to pay costs of issuance in one or more series, and thereafter may new text end 251.24 new text begin issue bonds to refund those bonds. The proceeds of the bonds must be used to pay costs new text end 251.25 new text begin of issuance and to make grants to school districts located in the taconite tax relief area new text end 251.26 new text begin defined in Minnesota Statutes, section 273.134, or the taconite assistance area defined new text end 251.27 new text begin in Minnesota Statutes, section 273.1341, to be used by the school districts to pay for new text end 251.28 new text begin building projects, such as energy efficiency, technology, infrastructure, health, safety, and new text end 251.29 new text begin maintenance improvements. Proceeds granted to School District No. 2142 must be used new text end 251.30 new text begin to reduce debt service on the building bond passed on December 8, 2009. new text end 251.31     new text begin Subd. 2. new text end new text begin Appropriation. new text end new text begin (a) There is annually appropriated from the distribution of new text end 251.32 new text begin taconite production tax revenues under Minnesota Statues, section 298.28, prior to the new text end 251.33 new text begin calculation of the amount of the remainder under Minnesota Statutes, section 298.28, new text end 251.34 new text begin subdivision 11, an amount sufficient to pay when due the principal and interest on the new text end 252.1 new text begin bonds issued pursuant to subdivision 1. The appropriation under this section must not new text end 252.2 new text begin exceed an amount equal to ten cents per taxable ton. new text end 252.3     new text begin (b) If in any year the amount available under paragraph (a) is insufficient to pay new text end 252.4 new text begin principal and interest due on the bonds in that year, an additional amount is appropriated new text end 252.5 new text begin from the Douglas J. Johnson fund to make up the deficiency. new text end 252.6     new text begin (c) The appropriation under this subdivision terminates upon payment or maturity of new text end 252.7 new text begin the last of the bonds issued under this section. new text end 252.8     new text begin Subd. 3. new text end new text begin Credit enhancement. new text end new text begin The bonds issued under this section are "debt new text end 252.9 new text begin obligations" and the commissioner of Iron Range resources and rehabilitation is a "district" new text end 252.10 new text begin for purposes of Minnesota Statutes, section 126C.55, provided that advances made under new text end 252.11 new text begin Minnesota Statutes, section 126C.55, subdivision 2, are not subject to Minnesota Statutes, new text end 252.12 new text begin section 126C.55, subdivisions 4 to 7. new text end 252.13 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment and new text end 252.14 new text begin applies beginning with the 2014 distribution under Minnesota Statutes, section 298.28. new text end 252.15    Sec. 9. new text begin IRON RANGE FISCAL DISPARITIES STUDY. new text end 252.16 new text begin The commissioner of revenue, in coordination with the commissioner of the Iron new text end 252.17 new text begin Range Resources and Rehabilitation Board, shall conduct a study of the tax relief new text end 252.18 new text begin area revenue distribution program contained in Minnesota Statutes, chapter 276A, new text end 252.19 new text begin commonly known as the Iron Range fiscal disparities program. By February 1, 2014, the new text end 252.20 new text begin commissioner of revenue shall submit a report to the chairs and ranking minority members new text end 252.21 new text begin of the house of representatives and senate tax committees consisting of the findings of the new text end 252.22 new text begin study and identification of issues for policy makers to consider. The study must analyze: new text end 252.23 new text begin (1) trends in population, property tax base, property tax rates, and contribution new text end 252.24 new text begin and distribution capacity across the region; new text end 252.25 new text begin (2) the volatility of the program's distribution and causes of the volatility; new text end 252.26 new text begin (3) the impact of state tax policy changes on the fiscal disparities program; and new text end 252.27 new text begin (4) the interaction between the program and the distribution of property tax aids and new text end 252.28 new text begin credits, taconite aid, and Iron Range Resources and Rehabilitation Board funding across new text end 252.29 new text begin the region. new text end 252.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective June 1, 2013. new text end 252.31ARTICLE 11 252.32PUBLIC FINANCE 252.33    Section 1. Minnesota Statutes 2012, section 118A.04, subdivision 3, is amended to read: 253.1    Subd. 3. State and local securities. Funds may be invested in the following: 253.2(1) any security which is a general obligation of any state or local government with 253.3taxing powers which is rated "A" or better by a national bond rating service; 253.4(2) any security which is a revenue obligation of any state or local government with 253.5taxing powers which is rated "AA" or better by a national bond rating service; and 253.6(3) a general obligation of the Minnesota housing finance agency which is a moral 253.7obligation of the state of Minnesota and is rated "A" or better by a national bond rating 253.8agency. new text begin ; and new text end 253.9 new text begin (4) any security which is an obligation of a school district with an original maturity new text end 253.10 new text begin not exceeding 13 months and (i) rated in the highest category by a national bond rating new text end 253.11 new text begin service or (ii) enrolled in the credit enhancement program pursuant to section 126C.55. new text end 253.12    Sec. 2. Minnesota Statutes 2012, section 118A.05, subdivision 5, is amended to read: 253.13    Subd. 5. Guaranteed investment contracts. Agreements or contracts for 253.14guaranteed investment contracts may be entered into if they are issued or guaranteed 253.15by United States commercial banks, domestic branches of foreign banks, United States 253.16insurance companies, or their Canadian subsidiaries, or the domestic affiliates of any 253.17of the foregoing. The credit quality of the issuer's or guarantor's short- and long-term 253.18unsecured debt must be rated in one of the two highest categories by a nationally 253.19recognized rating agency. new text begin Agreements or contracts for guaranteed investment contracts new text end 253.20 new text begin with a term of 18 months or less may be entered into regardless of the credit quality of new text end 253.21 new text begin the issuer's or guarantor's long-term unsecured debt, provided that the credit quality of new text end 253.22 new text begin the issuer's short-term unsecured debt is rated in the highest category by a nationally new text end 253.23 new text begin recognized rating agency. new text end Should the issuer's or guarantor's credit quality be downgraded 253.24below "A", the government entity must have withdrawal rights. 253.25    Sec. 3. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read: 253.26    Subdivision 1. Definitions. For purposes of this section, the following terms have 253.27the meanings given. 253.28(a) "Bonds" means an obligation as defined under section 475.51. 253.29(b) "Capital improvement" means acquisition or betterment of public lands, 253.30buildings, or other improvements within the county for the purpose of a county courthouse, 253.31administrative building, health or social service facility, correctional facility, jail, law 253.32enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads 253.33and bridges, new text begin public works facilities, fairground buildings, and records and data storage new text end 253.34 new text begin facilities, new text end and the acquisition of development rights in the form of conservation easements 254.1under chapter 84C. An improvement must have an expected useful life of five years or more 254.2to qualify. "Capital improvement" does not include a recreation or sports facility building 254.3(such as, but not limited to, a gymnasium, ice arena, racquet sports facility, swimming 254.4pool, exercise room or health spa), unless the building is part of an outdoor park facility 254.5and is incidental to the primary purpose of outdoor recreation. new text begin For purposes of this section, new text end 254.6 new text begin "capital improvement" includes expenditures for purposes described in this paragraph that new text end 254.7 new text begin have been incurred by a county before approval of a capital improvement plan, if such new text end 254.8 new text begin expenditures are included in a capital improvement plan approved on or before the date of new text end 254.9 new text begin the public hearing under subdivision 2 regarding issuance of bonds for such expenditures. new text end 254.10(c) "Metropolitan county" means a county located in the seven-county metropolitan 254.11area as defined in section 473.121 or a county with a population of 90,000 or more. 254.12(d) "Population" means the population established by the most recent of the 254.13following (determined as of the date the resolution authorizing the bonds was adopted): 254.14(1) the federal decennial census, 254.15(2) a special census conducted under contract by the United States Bureau of the 254.16Census, or 254.17(3) a population estimate made either by the Metropolitan Council or by the state 254.18demographer under section 4A.02. 254.19(e) "Qualified indoor ice arena" means a facility that meets the requirements of 254.20section 373.43. 254.21(f) "Tax capacity" means total taxable market value, but does not include captured 254.22market value. 254.23    Sec. 4. Minnesota Statutes 2012, section 373.40, subdivision 2, is amended to read: 254.24    Subd. 2. Application of election requirement. (a) Bonds issued by a county 254.25to finance capital improvements under an approved capital improvement plan are not 254.26subject to the election requirements of section 375.18 or 475.58. The bonds must be 254.27approved by vote of at least three-fifths of the members of the county board. In the case 254.28of a metropolitan county, the bonds must be approved by vote of at least two-thirds of 254.29the members of the county board. 254.30(b) Before issuance of bonds qualifying under this section, the county must publish 254.31a notice of its intention to issue the bonds and the date and time of a hearing to obtain 254.32public comment on the matter. The notice must be published in the official newspaper 254.33of the county or in a newspaper of general circulation in the county. The notice must be 254.34published at least 14, but not more than 28, days before the date of the hearing. 255.1(c) A county may issue the bonds only upon obtaining the approval of a majority of 255.2the voters voting on the question of issuing the obligations, if a petition requesting a vote 255.3on the issuance is signed by voters equal to five percent of the votes cast in the county in 255.4the last new text begin county new text end general election and is filed with the county auditor within 30 days after 255.5the public hearing. The commissioner of revenue shall prepare a suggested form of the 255.6question to be presented at the election. new text begin If the county elects not to submit the question to new text end 255.7 new text begin the voters, the county shall not propose the issuance of bonds under this section for the new text end 255.8 new text begin same purpose and in the same amount for a period of 365 days from the date of receipt new text end 255.9 new text begin of the petition. If the question of issuing the bonds is submitted and not approved by the new text end 255.10 new text begin voters, the provisions of section 475.58, subdivision 1a, shall apply. new text end 255.11    Sec. 5. Minnesota Statutes 2012, section 383D.41, is amended by adding a subdivision 255.12to read: 255.13     new text begin Subd. 10. new text end new text begin Housing improvement areas. new text end new text begin (a) In addition to its other powers, the new text end 255.14 new text begin Dakota County Community Development Agency shall have all powers of a city under new text end 255.15 new text begin sections 428A.11 to 428A.21 in connection with housing improvement areas in Dakota new text end 255.16 new text begin County. new text end 255.17 new text begin (b) For purposes of the Dakota County Community Development Agency's exercise new text end 255.18 new text begin of the powers granted in this subdivision, references in sections 428A.11 to 428A.21 to: new text end 255.19 new text begin (1) a "mayor" shall be references to the chair of the board of commissioners of the new text end 255.20 new text begin Dakota County Community Development Agency; new text end 255.21 new text begin (2) a "council" shall be references to the board of commissioners of the Dakota new text end 255.22 new text begin County Community Development Agency; and new text end 255.23 new text begin (3) a "city clerk" shall be references to an official of the Dakota County Community new text end 255.24 new text begin Development Agency designated by the executive director of the Dakota County new text end 255.25 new text begin Community Development Agency. new text end 255.26 new text begin (c) Notwithstanding sections 428A.11, subdivision 3, and 428A.13, subdivision 1, new text end 255.27 new text begin the governing body of the Dakota County Community Development Agency may adopt new text end 255.28 new text begin a resolution, rather than an ordinance, establishing one or more housing improvement new text end 255.29 new text begin areas, and "enabling ordinance" for purposes of sections 428A.11 to 428A.21 means a new text end 255.30 new text begin resolution under this clause. new text end 255.31    Sec. 6. Minnesota Statutes 2012, section 473.606, subdivision 3, is amended to read: 255.32    Subd. 3. Treasurer; investments. The treasurer shall receive and be responsible 255.33for all moneys of the corporation, from whatever source derived, and the same shall be 255.34considered public funds. The treasurer shall disburse the moneys of the corporation only 256.1on orders made by the executive and operating officer, herein provided for, countersigned 256.2by such other officer or such employee of the corporation as may be authorized and 256.3directed so to do by the corporation, showing the name of the claimant and the nature of 256.4the claim. No disbursement shall be certified by such officers until the same have been 256.5approved by said commissioners at a meeting thereof. Whenever the executive director of 256.6the corporation shall certify, pursuant to action taken by the commissioners at a meeting 256.7thereof, that there are moneys and the amount thereof in the possession of the treasurer not 256.8currently needed, then the treasurer may invest said amount or any part thereof in: 256.9(a) Treasury bonds, certificates of indebtedness, bonds or notes of the United States 256.10of America, or bonds, notes or certificates of indebtedness of the state of Minnesota, all of 256.11which must mature not later than three years from the date of purchase. 256.12(b) Bonds, notes, debentures or other obligations issued by any agency or 256.13instrumentality of the United States or any securities guaranteed by the United States 256.14government, or for which the credit of the United States is pledged for the payment of 256.15the principal and interest thereof, all of which must mature not later than three years 256.16from date of purchase. 256.17(c) Commercial paper of prime quality, or rated among the top third of the quality 256.18categories, not applicable to defaulted paper, as defined by a nationally recognized 256.19organization which rates such securities as eligible for investment in the state employees 256.20retirement fund except that any nonbanking issuing corporation, or parent company in the 256.21case of paper issued by operating utility or finance subsidiaries, must have total assets 256.22exceeding $500,000,000. Such commercial paper may constitute no more than 30 percent 256.23of the book value of the fund at the time of purchase, and the commercial paper of any 256.24one corporation shall not constitute more than four percent of the book value of the fund 256.25at the time of such investment. 256.26(d) Any securities eligible under the preceding provisions, purchased with 256.27simultaneous repurchase agreement under which the securities will be sold to the particular 256.28dealer on a specified date at a predetermined price. In such instances, all maturities of 256.29United States government securities, or securities issued or guaranteed by the United 256.30States government or an agency thereof, may be purchased so long as any such securities 256.31which mature later than three years from the date of purchase have a current market 256.32value exceeding the purchase price by at least five percent on the date of purchase, and 256.33so long as such repurchase agreement involving securities extending beyond three years 256.34in maturity be limited to a period not exceeding 45 days. 256.35(e) Certificates of deposit issued by any official depository of the commission. The 256.36commission may purchase certificates of deposit from a depository bank in an amount 257.1exceeding that insured by federal depository insurance to the extent that those certificates 257.2are secured by collateral maintained by the bank in a manner as prescribed for investments 257.3of the State Board of Investment. 257.4(f) securities approved for investment under section 118A.04. 257.5Whenever it shall appear to the commissioners that any invested funds are needed 257.6for current purposes before the maturity dates of the securities held, they shall cause the 257.7executive director to so certify to the treasurer and it shall then be the duty of the treasurer 257.8to order the sale or conversion into cash of the securities in the amount so certified. All 257.9interest and profit on said investments shall be credited to and constitute a part of the 257.10funds of the commission. The treasurer shall keep an account of all moneys received 257.11and disbursed, and at least once a year, at times to be designated by the corporation, file 257.12with the secretary a financial statement of the corporation, showing in appropriate and 257.13identifiable groupings the receipts and disbursements since the last approved statements; 257.14moneys on hand and the purposes for which the same are appropriated; and shall keep an 257.15account of all securities purchased as herein provided, the funds from which purchased 257.16and the interest and profit which may have accrued thereon, and shall accompany the 257.17financial statement aforesaid with a statement setting forth such account. The corporation 257.18may pay to the treasurer from time to time compensation in such amount as it may 257.19determine to cover clerk hire to enable the treasurer to carry out duties and those required 257.20in connection with bonds issued by the corporation as in this act authorized. 257.21    Sec. 7. Minnesota Statutes 2012, section 474A.04, subdivision 1a, is amended to read: 257.22    Subd. 1a. Entitlement reservations; carryforward; deduction. Any amount 257.23returned by an entitlement issuer before July 15 shall be reallocated through the housing 257.24pool. Any amount returned on or after July 15 shall be reallocated through the unified 257.25pool. An amount returned after the last Monday in November shall be reallocated to the 257.26Minnesota Housing Finance Agency. Any amount of bonding authority that an entitlement 257.27issuer carries forward under federal tax law that is not permanently issued or for which 257.28the governing body of the entitlement issuer has not enacted a resolution electing to use 257.29the authority for mortgage credit certificates and has not provided a notice of issue to the 257.30commissioner before 4:30 p.m. on the last business day in December of the succeeding 257.31calendar year shall be deducted from the entitlement allocation for that entitlement issuer 257.32in the next succeeding calendar year. Any amount deducted from an entitlement issuer's 257.33allocation under this subdivision shall be reallocated to other entitlement issuers, the 257.34housing pool, the small issue pool, and the public facilities pool on a proportional basis 257.35consistent with section . 258.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 258.2 new text begin and applies to any bonding authority allocated in 2012 and subsequent years. new text end 258.3    Sec. 8. Minnesota Statutes 2012, section 474A.062, is amended to read: 258.4474A.062 MINNESOTA OFFICE OF HIGHER EDUCATION 120-DAY 258.5ISSUANCE EXEMPTION. 258.6The Minnesota Office of Higher Education is exempt from the 120-day issuance 258.7requirements in this chapter and may carry forward allocations for student loan bonds into 258.8one successive calendar year, subject to carryforward notice requirements of section 258.9474A.131, subdivision 2 . 258.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 258.11 new text begin and applies to any bonding authority allocated in 2012 and subsequent years. new text end 258.12    Sec. 9. Minnesota Statutes 2012, section 474A.091, subdivision 3a, is amended to read: 258.13    Subd. 3a. Mortgage bonds. (a) Bonding authority remaining in the unified pool on 258.14October 1 is available for single-family housing programs for cities that applied in January 258.15and received an allocation under section 474A.061, subdivision 2a, in the same calendar 258.16year. The Minnesota Housing Finance Agency shall receive an allocation for mortgage 258.17bonds pursuant to this section, minus any amounts for a city or consortium that intends to 258.18issue bonds on its own behalf under paragraph (c). 258.19(b) The agency may issue bonds on behalf of participating cities. The agency shall 258.20request an allocation from the commissioner for all applicants who choose to have the 258.21agency issue bonds on their behalf and the commissioner shall allocate the requested 258.22amount to the agency. Allocations shall be awarded by the commissioner each Monday 258.23commencing on the first Monday in October through the last Monday in November for 258.24applications received by 4:30 p.m. on the Monday of the week preceding an allocation. 258.25For cities who choose to have the agency issue bonds on their behalf, allocations 258.26will be made loan by loan, on a first-come, first-served basis among the cities. The 258.27agency shall submit an application fee pursuant to section 474A.03, subdivision 4, and an 258.28application deposit equal to two percent of the requested allocation to the commissioner 258.29when requesting an allocation from the unified pool. After awarding an allocation and 258.30receiving a notice of issuance for mortgage bonds issued on behalf of the participating 258.31cities, the commissioner shall transfer the application deposit to the Minnesota Housing 258.32Finance Agency. 259.1For purposes of paragraphs (a) to (d), "city" means a county or a consortium of 259.2local government units that agree through a joint powers agreement to apply together 259.3for single-family housing programs, and has the meaning given it in section 462C.02, 259.4subdivision 6 . "Agency" means the Minnesota Housing Finance Agency. 259.5(c) Any city that received an allocation pursuant to section 474A.061, subdivision 259.62a, paragraph (f) , in the current year that wishes to receive an additional allocation from 259.7the unified pool and issue bonds on its own behalf or pursuant to a joint powers agreement 259.8shall notify the Minnesota Housing Finance Agency by the third Monday in September. 259.9The total amount of allocation for mortgage bonds for a city choosing to issue bonds on its 259.10own behalf or through a joint powers agreement is limited to the lesser of: (i) the amount 259.11requested, or (ii) the product of the total amount available for mortgage bonds from the 259.12unified pool, multiplied by the ratio of the population of each city that applied in January 259.13and received an allocation under section 474A.061, subdivision 2a, in the same calendar 259.14year, as determined by the most recent estimate of the city's population released by the 259.15state demographer's office to the total of the population of all the cities that applied in 259.16January and received an allocation under section 474A.061, subdivision 2a, in the same 259.17calendar year. If a city choosing to issue bonds on its own behalf or through a joint powers 259.18agreement is located within a county that has also chosen to issue bonds on its own behalf 259.19or through a joint powers agreement, the city's population will be deducted from the 259.20county's population in calculating the amount of allocations under this paragraph. 259.21The Minnesota Housing Finance Agency shall notify each city choosing to issue 259.22bonds on its own behalf or pursuant to a joint powers agreement of the amount of its 259.23allocation by October 15. Upon determining the amount of the allocation of each choosing 259.24to issue bonds on its own behalf or through a joint powers agreement, the agency shall 259.25forward a list specifying the amounts allotted to each city. 259.26A city that chooses to issue bonds on its own behalf or through a joint powers 259.27agreement may request an allocation from the commissioner by forwarding an application 259.28with an application fee pursuant to section 474A.03, subdivision 4, and an application 259.29deposit equal to two percent of the requested amount to the commissioner no later than 259.304:30 p.m. on the Monday of the week preceding an allocation. Allocations to cities that 259.31choose to issue bonds on their own behalf shall be awarded by the commissioner on 259.32the first Monday after October 15 through the last Monday in November. No city may 259.33receive an allocation from the commissioner after the last Monday in November. The 259.34commissioner shall allocate the requested amount to the city or cities subject to the 259.35limitations under this subdivision. 260.1If a city issues mortgage bonds from an allocation received under this paragraph, 260.2the issuer must provide for the recycling of funds into new loans. If the issuer is not 260.3able to provide for recycling, the issuer must notify the commissioner in writing of the 260.4reason that recycling was not possible and the reason the issuer elected not to have the 260.5Minnesota Housing Finance Agency issue the bonds. "Recycling" means the use of money 260.6generated from the repayment and prepayment of loans for further eligible loans or for the 260.7redemption of bonds and the issuance of current refunding bonds. 260.8(d) No entitlement city or county or city in an entitlement county may apply for or 260.9be allocated authority to issue mortgage bonds or use mortgage credit certificates from 260.10the unified pool. 260.11(e) An allocation awarded to the agency for mortgage bonds under this section 260.12may be carried forward by the agency into the next succeeding calendar year subject to 260.13notice requirements under section 474A.131 and is available until the last business day in 260.14December of that succeeding calendar year. 260.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 260.16 new text begin and applies to any bonding authority allocated in 2012 and subsequent years. new text end 260.17    Sec. 10. Minnesota Statutes 2012, section 475.521, subdivision 1, is amended to read: 260.18    Subdivision 1. Definitions. For purposes of this section, the following terms have 260.19the meanings given. 260.20(a) "Bonds" mean an obligation defined under section 475.51. 260.21(b) "Capital improvement" means acquisition or betterment of public lands, 260.22buildings or other improvements for the purpose of a city hall, town hall, library, public 260.23safety facility, and public works facility. An improvement must have an expected useful 260.24life of five years or more to qualify. Capital improvement does not include light rail transit 260.25or any activity related to it, or a park, road, bridge, administrative building other than a 260.26city or town hall, or land for any of those facilities. new text begin For purposes of this section, "capital new text end 260.27 new text begin improvement" includes expenditures for purposes described in this paragraph that have new text end 260.28 new text begin been incurred by a municipality before approval of a capital improvement plan, if such new text end 260.29 new text begin expenditures are included in a capital improvement plan approved on or before the date of new text end 260.30 new text begin the public hearing under subdivision 2 regarding issuance of bonds for such expenditures. new text end 260.31(c) "Municipality" means a home rule charter or statutory city or a town described in 260.32section 368.01, subdivision 1 or 1a. 260.33    Sec. 11. Minnesota Statutes 2012, section 475.521, subdivision 2, is amended to read: 261.1    Subd. 2. Election requirement. (a) Bonds issued by a municipality to finance 261.2capital improvements under an approved capital improvements plan are not subject to the 261.3election requirements of section 475.58. The bonds must be approved by an affirmative 261.4vote of three-fifths of the members of a five-member governing body. In the case of a 261.5governing body having more or less than five members, the bonds must be approved by a 261.6vote of at least two-thirds of the members of the governing body. 261.7(b) Before the issuance of bonds qualifying under this section, the municipality 261.8must publish a notice of its intention to issue the bonds and the date and time of the 261.9hearing to obtain public comment on the matter. The notice must be published in the 261.10official newspaper of the municipality or in a newspaper of general circulation in the 261.11municipality. Additionally, the notice may be posted on the official Web site, if any, of the 261.12municipality. The notice must be published at least 14 but not more than 28 days before 261.13the date of the hearing. 261.14(c) A municipality may issue the bonds only after obtaining the approval of a 261.15majority of the voters voting on the question of issuing the obligations, if a petition 261.16requesting a vote on the issuance is signed by voters equal to five percent of the votes cast 261.17in the municipality in the last new text begin municipal new text end general election and is filed with the clerk within 261.1830 days after the public hearing. The commissioner of revenue shall prepare a suggested 261.19form of the question to be presented at the election. new text begin If the municipality elects not to submit new text end 261.20 new text begin the question to the voters, the municipality shall not propose the issuance of bonds under new text end 261.21 new text begin this section for the same purpose and in the same amount for a period of 365 days from the new text end 261.22 new text begin date of receipt of the petition. If the question of issuing the bonds is submitted and not new text end 261.23 new text begin approved by the voters, the provisions of section 475.58, subdivision 1a, shall apply. new text end 261.24    Sec. 12. Minnesota Statutes 2012, section 475.58, subdivision 3b, is amended to read: 261.25    Subd. 3b. Street reconstruction. (a) A municipality may, without regard to 261.26the election requirement under subdivision 1, issue and sell obligations for street 261.27reconstruction, if the following conditions are met: 261.28    (1) the streets are reconstructed under a street reconstruction plan that describes the 261.29street reconstruction to be financed, the estimated costs, and any planned reconstruction 261.30of other streets in the municipality over the next five years, and the plan and issuance of 261.31the obligations has been approved by a vote of all of the members of the governing body 261.32present at the meeting following a public hearing for which notice has been published in 261.33the official newspaper at least ten days but not more than 28 days prior to the hearing; and 261.34    (2) if a petition requesting a vote on the issuance is signed by voters equal to 261.35five percent of the votes cast in the last municipal general election and is filed with the 262.1municipal clerk within 30 days of the public hearing, the municipality may issue the bonds 262.2only after obtaining the approval of a majority of the voters voting on the question of the 262.3issuance of the obligations. new text begin If the municipality elects not to submit the question to the new text end 262.4 new text begin voters, the municipality shall not propose the issuance of bonds under this section for the new text end 262.5 new text begin same purpose and in the same amount for a period of 365 days from the date of receipt new text end 262.6 new text begin of the petition. If the question of issuing the bonds is submitted and not approved by the new text end 262.7 new text begin voters, the provisions of section 475.58, subdivision 1a, shall apply. new text end 262.8    (b) Obligations issued under this subdivision are subject to the debt limit of the 262.9municipality and are not excluded from net debt under section 475.51, subdivision 4. 262.10    (c) For purposes of this subdivision, street reconstruction includes utility 262.11replacement and relocation and other activities incidental to the street reconstruction, turn 262.12lanes and other improvements having a substantial public safety function, realignments, 262.13other modifications to intersect with state and county roads, and the local share of state and 262.14county road projects. new text begin For purposes of this subdivision, "street reconstruction" includes new text end 262.15 new text begin expenditures for street reconstruction that have been incurred by a municipality before new text end 262.16 new text begin approval of a street reconstruction plan, if such expenditures are included in a street new text end 262.17 new text begin reconstruction plan approved on or before the date of the public hearing under paragraph new text end 262.18 new text begin (a), clause (1) regarding issuance of bonds for such expenditures. new text end 262.19    (d) Except in the case of turn lanes, safety improvements, realignments, intersection 262.20modifications, and the local share of state and county road projects, street reconstruction 262.21does not include the portion of project cost allocable to widening a street or adding curbs 262.22and gutters where none previously existed. 262.23    Sec. 13. Laws 1971, chapter 773, section 1, subdivision 2, as amended by Laws 1974, 262.24chapter 351, section 5, Laws 1976, chapter 234, sections 1 and 7, Laws 1978, chapter 788, 262.25section 1, Laws 1981, chapter 369, section 1, Laws 1983, chapter 302, section 1, Laws 262.261988, chapter 513, section 1, Laws 1992, chapter 511, article 9, section 23, Laws 1998, 262.27chapter 389, article 3, section 27, and Laws 2002, chapter 390, section 23, is amended to 262.28read: 262.29    Subd. 2. For each of the years 2003 to 2013 new text begin to 2024 new text end , the city of St. Paul is 262.30authorized to issue bonds in the aggregate principal amount of $20,000,000 for each year. 262.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day after compliance by the new text end 262.32 new text begin governing body of the city of St. Paul with Minnesota Statutes, section 645.021, new text end 262.33 new text begin subdivisions 2 and 3. new text end 262.34    Sec. 14. new text begin CAPITOL RENOVATION; RESTORATION. new text end 263.1 new text begin (a) $30,000,000 is appropriated from the general fund to the commissioner of new text end 263.2 new text begin administration in fiscal year 2015 and is available until spent for the following purposes: new text end 263.3 new text begin (1) to complete the design of, and to construct, repair, improve, renovate, restore, new text end 263.4 new text begin furnish, and equip, the State Capitol Building and grounds; including but not limited new text end 263.5 new text begin to exterior stone repairs and window replacement; asbestos and hazardous materials new text end 263.6 new text begin abatement; mechanical, electrical, and plumbing security systems replacement; general new text end 263.7 new text begin construction, including but not limited to demolition, site improvements, life safety new text end 263.8 new text begin improvements, accessibility, security, and telecommunications; roof replacement; and new text end 263.9 new text begin finish work; and new text end 263.10 new text begin (2) to predesign, design, conduct hazardous materials abatement, construct, repair, new text end 263.11 new text begin renovate, remodel, furnish, and equip the State Office Building, Administration Building, new text end 263.12 new text begin Centennial Office Building, 321 Grove Street Buildings, and other properties located new text end 263.13 new text begin on the Capitol campus as determined by the commissioner of administration to meet new text end 263.14 new text begin temporary and permanent office, storage, parking, and other space needs required by new text end 263.15 new text begin an efficient restoration of the State Capitol Building and for the efficient and effective new text end 263.16 new text begin function of the tenants currently located in the Capitol Building. new text end 263.17 new text begin (b) The commissioner of administration must not prepare final plans and new text end 263.18 new text begin specifications for any construction authorized under paragraph (a), clauses (1) and (2), until new text end 263.19 new text begin the program plan and cost estimates for all elements necessary to complete the project have new text end 263.20 new text begin been approved by each tenant representative. In addition, the appropriation in paragraph new text end 263.21 new text begin (a), clause (2), is not available until each tenant representative approves a relocation plan new text end 263.22 new text begin submitted by the commissioner of administration. The relocation plan shall: new text end 263.23 new text begin (1) describe when each person who currently occupies office space located in the new text end 263.24 new text begin Capitol Building will be moved out of the Capitol Building; new text end 263.25 new text begin (2) identify the building and office space assigned to each person relocated during new text end 263.26 new text begin renovation of the Capitol Building; new text end 263.27 new text begin (3) identify the parking spaces that will be assigned to each person relocated during new text end 263.28 new text begin renovation, including the funding mechanism for any new parking spaces; new text end 263.29 new text begin (4) state when each person relocated during renovation will be moved back into new text end 263.30 new text begin permanent office space and where the office space will be located; new text end 263.31 new text begin (5) include written, signed tenant agreements for tenancy in the Capitol Building new text end 263.32 new text begin after renovation. new text end 263.33 new text begin (c) The commissioner of administration must consult and collaborate with the new text end 263.34 new text begin director of the Minnesota Historical Society in preparing final plans and specifications for new text end 263.35 new text begin any construction authorized under paragraph (a), clauses (1) and (2). new text end 264.1 new text begin For the purposes of this paragraph, "each tenant representative" means the secretary of the new text end 264.2 new text begin senate, on behalf of the senate; the chief clerk of the house of representatives, on behalf new text end 264.3 new text begin of the house of representatives; the governor; the court administrator, on behalf of the new text end 264.4 new text begin judicial branch; and the attorney general, on behalf of the attorney general's office. new text end 264.5 new text begin (d) The commissioner of administration must not install new windows in the Capitol new text end 264.6 new text begin Building that cannot be opened by the tenants of the building. new text end 264.7 new text begin (e) The base for fiscal year 2016 only is $173,600,000 and must be used for the new text end 264.8 new text begin purposes in paragraph (a). new text end 264.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 264.10    Sec. 15. new text begin LEGISLATIVE OFFICE FACILITIES. new text end 264.11 new text begin (a) The commissioner of administration may enter into a long-term lease-purchase new text end 264.12 new text begin agreement for a term of up to 25 years, to predesign, design, construct, and equip office, new text end 264.13 new text begin hearing room, and parking facilities within the Capitol area, as defined in Minnesota new text end 264.14 new text begin Statutes, section 15B.02, for legislative and other functions. The commissioner of new text end 264.15 new text begin management and budget may issue lease revenue bonds or certificates of participation new text end 264.16 new text begin associated with the lease-purchase agreement. The lease-purchase agreements must not new text end 264.17 new text begin be terminated, except for nonappropriation of money. The lease-purchase agreements new text end 264.18 new text begin must provide the state with a unilateral right to purchase the leased premises at specified new text end 264.19 new text begin times for specified amounts. The lease-purchase agreements are exempt from Minnesota new text end 264.20 new text begin Statutes, section 16B.24, subdivisions 6 and 6a. new text end 264.21 new text begin (b) The facilities under the lease-purchase agreement are exempt from the design new text end 264.22 new text begin competition requirement under Minnesota Statutes, section 15B.10. Notwithstanding new text end 264.23 new text begin anything to the contrary under Minnesota Statutes, sections 16C.32 and 16C.33, if the new text end 264.24 new text begin commissioner of administration elects to use a design-build delivery method to design and new text end 264.25 new text begin construct one or more facilities under this appropriation, the Capitol Area Architectural and new text end 264.26 new text begin Planning Board, in cooperation with the commissioner, shall create a selection committee new text end 264.27 new text begin to act as the board under Minnesota Statutes, sections 16C.32 and 16C.33, for the design new text end 264.28 new text begin and construction of the facilities. Notwithstanding Minnesota Statutes, section 16B.33, if new text end 264.29 new text begin the commissioner elects to contract with a primary designer to design one or more facilities new text end 264.30 new text begin under this appropriation, the Capitol Area Architectural and Planning Board, in cooperation new text end 264.31 new text begin with the commissioner, shall create a selection committee to conduct the selection process new text end 264.32 new text begin in accordance with standards under Minnesota Statutes, chapters 15B, 16B, and 16C. new text end 264.33 new text begin (c) The commissioner of administration may enter into a ground lease for state-owned new text end 264.34 new text begin property in the capitol area in conjunction with the execution of a lease-purchase new text end 264.35 new text begin agreement entered into under this section for any improvements constructed on that site. new text end 265.1 new text begin Notwithstanding the requirements of Minnesota Statutes, section 16A.695, subdivision 2, new text end 265.2 new text begin paragraph (b), the ground lease must be for a term equal to the term of the lease-purchase new text end 265.3 new text begin agreement, and must include an option to purchase the land at its then fair market value, if new text end 265.4 new text begin the improvements are not purchased by the state at the end of the term of the lease-purchase new text end 265.5 new text begin agreement, or at any earlier time that the lease-purchase agreement is terminated. new text end 265.6 new text begin (d) The commissioner of administration must not prepare final plans and new text end 265.7 new text begin specifications for any construction authorized under this section until the program plan new text end 265.8 new text begin and cost estimates for all elements necessary to complete the project have been approved new text end 265.9 new text begin by the senate Committee on Rules and Administration. new text end 265.10 new text begin (e) $3,000,000 is appropriated in fiscal year 2014 from the general fund to the new text end 265.11 new text begin commissioner of administration for predesign and design of facilities authorized under new text end 265.12 new text begin paragraph (a). This appropriation is available for expenditure the day following final new text end 265.13 new text begin enactment and until June 30, 2015. new text end 265.14 new text begin (f) The commissioner of administration may reserve a portion of money from new text end 265.15 new text begin appropriations for office space costs of the legislature to fund future repairs for facilities new text end 265.16 new text begin constructed under the authority provided in this section. Money reserved under this new text end 265.17 new text begin paragraph must be credited to a segregated account for each building in the special new text end 265.18 new text begin revenue fund and is appropriated to the commissioner to make the repairs. When the state new text end 265.19 new text begin acquires title to a building with an account established under this paragraph, the account new text end 265.20 new text begin for that building must be abolished and the balance remaining in the account must be new text end 265.21 new text begin transferred to the appropriate asset preservation and replacement account created under new text end 265.22 new text begin Minnesota Statutes, section 16B.24, subdivision 3, paragraph (d). new text end 265.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 265.24    Sec. 16. new text begin CARRYFORWARD OF BONDING AUTHORITY FOR 2011; NO new text end 265.25 new text begin DEDUCTION FROM ENTITLEMENT ALLOCATION. new text end 265.26 new text begin Notwithstanding Minnesota Statutes, section 474A.04, subdivision 1a, bonding new text end 265.27 new text begin authority that was allocated to an entitlement issuer in 2011 and that was carried forward new text end 265.28 new text begin under federal tax law, but for which the entitlement issuer did not provide a notice of issue new text end 265.29 new text begin to the commissioner of management and budget before 4:30 p.m. on the last business new text end 265.30 new text begin day of December 2012 must not be deducted from the entitlement allocation for that new text end 265.31 new text begin entitlement issuer in 2013. new text end 265.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 265.33 new text begin and applies retroactively to rescind any reallocation by the commissioner of management new text end 266.1 new text begin and budget under Minnesota Statues, section 474A.04, subdivision 1a, of any amounts so new text end 266.2 new text begin deducted. new text end 266.3    Sec. 17. new text begin LOCAL MATCH; INDEPENDENT SCHOOL DISTRICT NO. 435; new text end 266.4 new text begin WAUBUN-OGEMA-WHITE EARTH. new text end 266.5 new text begin (a) Independent School District No. 435, Waubun-Ogema-White Earth, may expand new text end 266.6 new text begin classroom space at its Ogema elementary site using a grant of $551,532 that was awarded new text end 266.7 new text begin to the district by the Department of Human Services on August 12, 2012. Notwithstanding new text end 266.8 new text begin Minnesota Statutes, section 16A.695, to satisfy the match requirements of the grant, under new text end 266.9 new text begin Minnesota Statutes, section 16A.695, subdivision 6, the district may use a lease-purchase new text end 266.10 new text begin agreement. Notwithstanding Minnesota Statutes, section 465.71, the title under the new text end 266.11 new text begin lease-purchase may be held by the district. new text end 266.12 new text begin (b) Notwithstanding Minnesota Statutes, section 126C.13, subdivision 4, if the new text end 266.13 new text begin school district enters a lease-purchase agreement to satisfy the local match, under new text end 266.14 new text begin paragraph (a), but fails to make a lease-purchase payment, the commissioner of education new text end 266.15 new text begin shall reduce its general education aid, under Minnesota Statutes, section 126C.13, new text end 266.16 new text begin subdivision 4, by the amount of the lease-purchase payment. new text end 266.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 266.18ARTICLE 12 266.19MARKET VALUE DEFINITIONS 266.20    Section 1. Minnesota Statutes 2012, section 38.18, is amended to read: 266.2138.18 COUNTY FAIRGROUNDS; IMPROVEMENT AIDED. 266.22Any new text begin Each new text end town, statutory city, or school district in this state, now or hereafter new text begin at any new text end 266.23 new text begin time new text end having a new text begin an estimated new text end market value of all its taxable property, exclusive of money and 266.24credits, of more than $105,000,000, and having a county fair located within its corporate 266.25limits, is hereby authorized to aid in defraying new text begin may pay new text end part of the expense of improving 266.26any such new text begin the new text end fairground, by appropriating and paying over to the treasurer of the county 266.27owning the fairground such sum of money, not exceeding $10,000, for each of the political 266.28subdivisions, as the new text begin its new text end governing body of the town, statutory city, or school district may, 266.29by resolution, determine new text begin determines new text end to be for the best interest of the political subdivision, new text begin . new text end 266.30 The sums so appropriated to new text begin amounts paid to the county must new text end be used solely for the purpose 266.31of aiding in the improvement of new text begin to improve new text end the fairground in such new text begin the new text end manner as the county 266.32board of the county shall determine new text begin determines new text end to be for the best interest of the county. 267.1    Sec. 2. Minnesota Statutes 2012, section 40A.15, subdivision 2, is amended to read: 267.2    Subd. 2. Eligible recipients. All counties within the state, municipalities that prepare 267.3plans and official controls instead of a county, and districts are eligible for assistance 267.4under the program. Counties and districts may apply for assistance on behalf of other 267.5municipalities. In order to be eligible for financial assistance a county or municipality must 267.6agree to levy at least 0.01209 percent of taxable new text begin estimated new text end market value for agricultural 267.7land preservation and conservation activities or otherwise spend the equivalent amount of 267.8local money on those activities, or spend $15,000 of local money, whichever is less. 267.9    Sec. 3. Minnesota Statutes 2012, section 69.011, subdivision 1, is amended to read: 267.10    Subdivision 1. Definitions. Unless the language or context clearly indicates that 267.11a different meaning is intended, the following words and terms, for the purposes of this 267.12chapter and chapters 423, 423A, 424 and 424A, have the meanings ascribed to them: 267.13    (a) "Commissioner" means the commissioner of revenue. 267.14    (b) "Municipality" means: 267.15    (1) a home rule charter or statutory city; 267.16    (2) an organized town; 267.17    (3) a park district subject to chapter 398; 267.18    (4) the University of Minnesota; 267.19    (5) for purposes of the fire state aid program only, an American Indian tribal 267.20government entity located within a federally recognized American Indian reservation; 267.21    (6) for purposes of the police state aid program only, an American Indian tribal 267.22government with a tribal police department which exercises state arrest powers under 267.23section 626.90, 626.91, 626.92, or 626.93; 267.24    (7) for purposes of the police state aid program only, the Metropolitan Airports 267.25Commission; and 267.26    (8) for purposes of the police state aid program only, the Department of Natural 267.27Resources and the Department of Public Safety with respect to peace officers covered 267.28under chapter 352B. 267.29    (c) "Minnesota Firetown Premium Report" means a form prescribed by the 267.30commissioner containing space for reporting by insurers of fire, lightning, sprinkler 267.31leakage and extended coverage premiums received upon risks located or to be performed 267.32in this state less return premiums and dividends. 267.33    (d) "Firetown" means the area serviced by any municipality having a qualified fire 267.34department or a qualified incorporated fire department having a subsidiary volunteer 267.35firefighters' relief association. 268.1    (e) " new text begin Estimated new text end market value" means latest available new text begin estimated new text end market value of all 268.2property in a taxing jurisdiction, whether the property is subject to taxation, or exempt 268.3from ad valorem taxation obtained from information which appears on abstracts filed with 268.4the commissioner of revenue or equalized by the State Board of Equalization. 268.5    (f) "Minnesota Aid to Police Premium Report" means a form prescribed by the 268.6commissioner for reporting by each fire and casualty insurer of all premiums received 268.7upon direct business received by it in this state, or by its agents for it, in cash or otherwise, 268.8during the preceding calendar year, with reference to insurance written for insuring against 268.9the perils contained in auto insurance coverages as reported in the Minnesota business 268.10schedule of the annual financial statement which each insurer is required to file with 268.11the commissioner in accordance with the governing laws or rules less return premiums 268.12and dividends. 268.13    (g) "Peace officer" means any person: 268.14    (1) whose primary source of income derived from wages is from direct employment 268.15by a municipality or county as a law enforcement officer on a full-time basis of not less 268.16than 30 hours per week; 268.17    (2) who has been employed for a minimum of six months prior to December 31 268.18preceding the date of the current year's certification under subdivision 2, clause (b); 268.19    (3) who is sworn to enforce the general criminal laws of the state and local ordinances; 268.20    (4) who is licensed by the Peace Officers Standards and Training Board and is 268.21authorized to arrest with a warrant; and 268.22    (5) who is a member of the State Patrol retirement plan or the public employees 268.23police and fire fund. 268.24    (h) "Full-time equivalent number of peace officers providing contract service" means 268.25the integral or fractional number of peace officers which would be necessary to provide 268.26the contract service if all peace officers providing service were employed on a full-time 268.27basis as defined by the employing unit and the municipality receiving the contract service. 268.28    (i) "Retirement benefits other than a service pension" means any disbursement 268.29authorized under section 424A.05, subdivision 3, clauses (3) and (4). 268.30    (j) "Municipal clerk, municipal clerk-treasurer, or county auditor" means: 268.31(1) for the police state aid program and police relief association financial reports: 268.32(i) the person who was elected or appointed to the specified position or, in the 268.33absence of the person, another person who is designated by the applicable governing body; 268.34(ii) in a park district, the secretary of the board of park district commissioners; 268.35(iii) in the case of the University of Minnesota, the official designated by the Board 268.36of Regents; 269.1(iv) for the Metropolitan Airports Commission, the person designated by the 269.2commission; 269.3(v) for the Department of Natural Resources or the Department of Public Safety, the 269.4respective commissioner; 269.5(vi) for a tribal police department which exercises state arrest powers under section 269.6626.90 , 626.91, 626.92, or 626.93, the person designated by the applicable American 269.7Indian tribal government; and 269.8(2) for the fire state aid program and fire relief association financial reports, the 269.9person who was elected or appointed to the specified position, or, for governmental 269.10entities other than counties, if the governing body of the governmental entity designates 269.11the position to perform the function, the chief financial official of the governmental entity 269.12or the chief administrative official of the governmental entity. 269.13(k) "Voluntary statewide lump-sum volunteer firefighter retirement plan" means the 269.14retirement plan established by chapter 353G. 269.15    Sec. 4. Minnesota Statutes 2012, section 69.021, subdivision 7, is amended to read: 269.16    Subd. 7. Apportionment of fire state aid to municipalities and relief associations. 269.17(a) The commissioner shall apportion the fire state aid relative to the premiums reported 269.18on the Minnesota Firetown Premium Reports filed under this chapter to each municipality 269.19and/or firefighters relief association. 269.20(b) The commissioner shall calculate an initial fire state aid allocation amount for 269.21each municipality or fire department under paragraph (c) and a minimum fire state aid 269.22allocation amount for each municipality or fire department under paragraph (d). The 269.23municipality or fire department must receive the larger fire state aid amount. 269.24(c) The initial fire state aid allocation amount is the amount available for 269.25apportionment as fire state aid under subdivision 5, without inclusion of any additional 269.26funding amount to support a minimum fire state aid amount under section 423A.02, 269.27subdivision 3 , allocated one-half in proportion to the population as shown in the last official 269.28statewide federal census for each fire town and one-half in proportion to the new text begin estimated new text end 269.29market value of each fire town, including (1) the new text begin estimated new text end market value of tax-exempt 269.30property and (2) the new text begin estimated new text end market value of natural resources lands receiving in lieu 269.31payments under sections 477A.11 to 477A.14, but excluding the new text begin estimated new text end market value 269.32of minerals. In the case of incorporated or municipal fire departments furnishing fire 269.33protection to other cities, towns, or townships as evidenced by valid fire service contracts 269.34filed with the commissioner, the distribution must be adjusted proportionately to take 269.35into consideration the crossover fire protection service. Necessary adjustments must be 270.1made to subsequent apportionments. In the case of municipalities or independent fire 270.2departments qualifying for the aid, the commissioner shall calculate the state aid for the 270.3municipality or relief association on the basis of the population and the new text begin estimated new text end market 270.4value of the area furnished fire protection service by the fire department as evidenced by 270.5duly executed and valid fire service agreements filed with the commissioner. If one or 270.6more fire departments are furnishing contracted fire service to a city, town, or township, 270.7only the population and new text begin estimated new text end market value of the area served by each fire department 270.8may be considered in calculating the state aid and the fire departments furnishing service 270.9shall enter into an agreement apportioning among themselves the percent of the population 270.10and the new text begin estimated new text end market value of each service area. The agreement must be in writing 270.11and must be filed with the commissioner. 270.12(d) The minimum fire state aid allocation amount is the amount in addition to the 270.13initial fire state allocation amount that is derived from any additional funding amount 270.14to support a minimum fire state aid amount under section 423A.02, subdivision 3, and 270.15allocated to municipalities with volunteer firefighters relief associations or covered by the 270.16voluntary statewide lump-sum volunteer firefighter retirement plan based on the number 270.17of active volunteer firefighters who are members of the relief association as reported 270.18in the annual financial reporting for the calendar year 1993 to the Office of the State 270.19Auditor, but not to exceed 30 active volunteer firefighters, so that all municipalities or 270.20fire departments with volunteer firefighters relief associations receive in total at least a 270.21minimum fire state aid amount per 1993 active volunteer firefighter to a maximum of 270.2230 firefighters. If a relief association is established after calendar year 1993 and before 270.23calendar year 2000, the number of active volunteer firefighters who are members of the 270.24relief association as reported in the annual financial reporting for calendar year 1998 270.25to the Office of the State Auditor, but not to exceed 30 active volunteer firefighters, 270.26shall be used in this determination. If a relief association is established after calendar 270.27year 1999, the number of active volunteer firefighters who are members of the relief 270.28association as reported in the first annual financial reporting submitted to the Office of 270.29the State Auditor, but not to exceed 20 active volunteer firefighters, must be used in this 270.30determination. If a relief association is terminated as a result of providing retirement 270.31coverage for volunteer firefighters by the voluntary statewide lump-sum volunteer 270.32firefighter retirement plan under chapter 353G, the number of active volunteer firefighters 270.33of the municipality covered by the statewide plan as certified by the executive director of 270.34the Public Employees Retirement Association to the commissioner and the state auditor, 270.35but not to exceed 30 active firefighters, must be used in this determination. 271.1(e) Unless the firefighters of the applicable fire department are members of the 271.2voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid must 271.3be paid to the treasurer of the municipality where the fire department is located and the 271.4treasurer of the municipality shall, within 30 days of receipt of the fire state aid, transmit 271.5the aid to the relief association if the relief association has filed a financial report with the 271.6treasurer of the municipality and has met all other statutory provisions pertaining to the 271.7aid apportionment. If the firefighters of the applicable fire department are members of 271.8the voluntary statewide lump-sum volunteer firefighter retirement plan, the fire state aid 271.9must be paid to the executive director of the Public Employees Retirement Association 271.10and deposited in the voluntary statewide lump-sum volunteer firefighter retirement fund. 271.11(f) The commissioner may make rules to permit the administration of the provisions 271.12of this section. 271.13(g) Any adjustments needed to correct prior misallocations must be made to 271.14subsequent apportionments. 271.15    Sec. 5. Minnesota Statutes 2012, section 69.021, subdivision 8, is amended to read: 271.16    Subd. 8. Population and new text begin estimated new text end market value. (a) In computations relating to 271.17fire state aid requiring the use of population figures, only official statewide federal census 271.18figures are to be used. Increases or decreases in population disclosed by reason of any 271.19special census must not be taken into consideration. 271.20(b) In calculations relating to fire state aid requiring the use of new text begin estimated new text end market 271.21value property figures, only the latest available new text begin estimated new text end market value property figures 271.22may be used. 271.23    Sec. 6. Minnesota Statutes 2012, section 88.51, subdivision 3, is amended to read: 271.24    Subd. 3. Determination of new text begin estimated new text end market value. In determining the net tax 271.25capacity of property within any taxing district the value of the surface of lands within any 271.26auxiliary forest therein, as determined by the county board under the provisions of section 271.2788.48, subdivision 3 , shall, for all purposes except the levying of taxes on lands within any 271.28such forest, be deemed the new text begin estimated new text end market value thereof. 271.29    Sec. 7. Minnesota Statutes 2012, section 103B.245, subdivision 3, is amended to read: 271.30    Subd. 3. Tax. After adoption of the ordinance under subdivision 2, a local 271.31government unit may annually levy a tax on all taxable property in the district for the 271.32purposes for which the tax district is established. The tax may not exceed 0.02418 percent 271.33of new text begin estimated new text end market value on taxable property located in rural towns other than urban 272.1towns, unless allowed by resolution of the town electors. The proceeds of the tax shall 272.2be paid into a fund reserved for these purposes. Any proceeds remaining in the reserve 272.3fund at the time the tax is terminated or the district is dissolved shall be transferred and 272.4irrevocably pledged to the debt service fund of the local unit to be used solely to reduce 272.5tax levies for bonded indebtedness of taxable property in the district. 272.6    Sec. 8. Minnesota Statutes 2012, section 103B.251, subdivision 8, is amended to read: 272.7    Subd. 8. Tax. (a) For the payment of principal and interest on the bonds issued 272.8under subdivision 7 and the payment required under subdivision 6, the county shall 272.9irrevocably pledge and appropriate the proceeds of a tax levied on all taxable property 272.10located within the territory of the watershed management organization or subwatershed 272.11unit for which the bonds are issued. Each year until the reserve for payment of the bonds 272.12is sufficient to retire the bonds, the county shall levy on all taxable property in the territory 272.13of the organization or unit, without respect to any statutory or other limitation on taxes, an 272.14amount of taxes sufficient to pay principal and interest on the bonds and to restore any 272.15deficiencies in reserves required to be maintained for payment of the bonds. 272.16(b) The tax levied on rural towns other than urban towns may not exceed 0.02418 272.17percent of taxable new text begin estimated new text end market value, unless approved by resolution of the town 272.18electors. 272.19(c) If at any time the amounts available from the levy on property in the territory of 272.20the organization are insufficient to pay principal and interest on the bonds when due, the 272.21county shall make payment from any available funds in the county treasury. 272.22(d) The amount of any taxes which are required to be levied outside of the territory 272.23of the watershed management organization or unit or taken from the general funds of the 272.24county to pay principal or interest on the bonds shall be reimbursed to the county from 272.25taxes levied within the territory of the watershed management organization or unit. 272.26    Sec. 9. Minnesota Statutes 2012, section 103B.635, subdivision 2, is amended to read: 272.27    Subd. 2. Municipal funding of district. (a) The governing body or board of 272.28supervisors of each municipality in the district must provide the funds necessary to meet 272.29its proportion of the total cost determined by the board, provided the total funding from 272.30all municipalities in the district for the costs shall not exceed an amount equal to .00242 272.31percent of the total taxable new text begin estimated new text end market value within the district, unless three-fourths 272.32of the municipalities in the district pass a resolution concurring to the additional costs. 272.33(b) The funds must be deposited in the treasury of the district in amounts and at 272.34times as the treasurer of the district requires. 273.1    Sec. 10. Minnesota Statutes 2012, section 103B.691, subdivision 2, is amended to read: 273.2    Subd. 2. Municipal funding of district. (a) The governing body or board of 273.3supervisors of each municipality in the district shall provide the funds necessary to meet its 273.4proportion of the total cost to be borne by the municipalities as finally certified by the board. 273.5(b) The municipality's funds may be raised by any means within the authority of 273.6the municipality. The municipalities may each levy a tax not to exceed .02418 percent of 273.7taxable new text begin estimated new text end market value on the taxable property located in the district to provide 273.8the funds. The levy shall be within all other limitations provided by law. 273.9(c) The funds must be deposited into the treasury of the district in amounts and at 273.10times as the treasurer of the district requires. 273.11    Sec. 11. Minnesota Statutes 2012, section 103D.905, subdivision 2, is amended to read: 273.12    Subd. 2. Organizational expense fund. (a) An organizational expense fund, 273.13consisting of an ad valorem tax levy, shall not exceed 0.01596 percent of taxable new text begin estimated new text end 273.14 market value, or $60,000, whichever is less. The money in the fund shall be used for 273.15organizational expenses and preparation of the watershed management plan for projects. 273.16(b) The managers may borrow from the affected counties up to 75 percent of the 273.17anticipated funds to be collected from the organizational expense fund levy and the 273.18counties affected may make the advancements. 273.19(c) The advancement of anticipated funds shall be apportioned among affected 273.20counties in the same ratio as the net tax capacity of the area of the counties within 273.21the watershed district bears to the net tax capacity of the entire watershed district. If a 273.22watershed district is enlarged, an organizational expense fund may be levied against the 273.23area added to the watershed district in the same manner as provided in this subdivision. 273.24(d) Unexpended funds collected for the organizational expense may be transferred to 273.25the administrative fund and used for the purposes of the administrative fund. 273.26    Sec. 12. Minnesota Statutes 2012, section 103D.905, subdivision 3, is amended to read: 273.27    Subd. 3. General fund. A general fund, consisting of an ad valorem tax levy, may 273.28not exceed 0.048 percent of taxable new text begin estimated new text end market value, or $250,000, whichever is 273.29less. The money in the fund shall be used for general administrative expenses and for 273.30the construction or implementation and maintenance of projects of common benefit to 273.31the watershed district. The managers may make an annual levy for the general fund as 273.32provided in section 103D.911. In addition to the annual general levy, the managers may 273.33annually levy a tax not to exceed 0.00798 percent of taxable new text begin estimated new text end market value 273.34for a period not to exceed 15 consecutive years to pay the cost attributable to the basic 274.1water management features of projects initiated by petition of a political subdivision 274.2within the watershed district or by petition of at least 50 resident owners whose property 274.3is within the watershed district. 274.4    Sec. 13. Minnesota Statutes 2012, section 103D.905, subdivision 8, is amended to read: 274.5    Subd. 8. Survey and data acquisition fund. (a) A survey and data acquisition fund 274.6is established and used only if other funds are not available to the watershed district to pay 274.7for making necessary surveys and acquiring data. 274.8(b) The survey and data acquisition fund consists of the proceeds of a property tax 274.9that can be levied only once every five years. The levy may not exceed 0.02418 percent of 274.10taxable new text begin estimated new text end market value. 274.11(c) The balance of the survey and data acquisition fund may not exceed $50,000. 274.12(d) In a subsequent proceeding for a project where a survey has been made, the 274.13attributable cost of the survey as determined by the managers shall be included as a part of 274.14the cost of the work and the sum shall be repaid to the survey and data acquisition fund. 274.15    Sec. 14. Minnesota Statutes 2012, section 117.025, subdivision 7, is amended to read: 274.16    Subd. 7. Structurally substandard. "Structurally substandard" means a building: 274.17(1) that was inspected by the appropriate local government and cited for one or more 274.18enforceable housing, maintenance, or building code violations; 274.19(2) in which the cited building code violations involve one or more of the following: 274.20(i) a roof and roof framing element; 274.21(ii) support walls, beams, and headers; 274.22(iii) foundation, footings, and subgrade conditions; 274.23(iv) light and ventilation; 274.24(v) fire protection, including egress; 274.25(vi) internal utilities, including electricity, gas, and water; 274.26(vii) flooring and flooring elements; or 274.27(viii) walls, insulation, and exterior envelope; 274.28(3) in which the cited housing, maintenance, or building code violations have not 274.29been remedied after two notices to cure the noncompliance; and 274.30(4) has uncured housing, maintenance, and building code violations, satisfaction of 274.31which would cost more than 50 percent of the assessor's taxable new text begin estimated new text end market value 274.32for the building, excluding land value, as determined under section 273.11 for property 274.33taxes payable in the year in which the condemnation is commenced. 275.1A local government is authorized to seek from a judge or magistrate an administrative 275.2warrant to gain access to inspect a specific building in a proposed development or 275.3redevelopment area upon showing of probable cause that a specific code violation has 275.4occurred and that the violation has not been cured, and that the owner has denied the local 275.5government access to the property. Items of evidence that may support a conclusion of 275.6probable cause may include recent fire or police inspections, housing inspection, exterior 275.7evidence of deterioration, or other similar reliable evidence of deterioration in the specific 275.8building. 275.9    Sec. 15. Minnesota Statutes 2012, section 127A.48, subdivision 1, is amended to read: 275.10    Subdivision 1. Computation. The Department of Revenue must annually conduct 275.11an assessment/sales ratio study of the taxable property in each new text begin county, city, town, and new text end 275.12school district in accordance with the procedures in subdivisions 2 and 3. Based upon the 275.13results of this assessment/sales ratio study, the Department of Revenue must determine an 275.14aggregate equalized net tax capacity for the various classes of taxable property in each 275.15 new text begin taxing new text end district, new text begin the aggregate of new text end which tax capacity shall be new text begin is new text end designated as the adjusted net 275.16tax capacity. new text begin The adjusted net tax capacity must be reduced by the captured tax capacity of new text end 275.17 new text begin tax increment districts under section 469.177, subdivision 2, fiscal disparities contribution new text end 275.18 new text begin tax capacities under sections 276A.06 and 473F.08, and the tax capacity of transmission new text end 275.19 new text begin lines required to be subtracted from the local tax base under section 273.425; and increased new text end 275.20 new text begin by fiscal disparities distribution tax capacities under sections 276A.06 and 473F.08. new text end The 275.21adjusted net tax capacities shall be determined using the net tax capacity percentages in 275.22effect for the assessment year following the assessment year of the study. The Department 275.23of Revenue must make whatever estimates are necessary to account for changes in the 275.24classification system. The Department of Revenue may incur the expense necessary to 275.25make the determinations. The commissioner of revenue may reimburse any county or 275.26governmental official for requested services performed in ascertaining the adjusted net tax 275.27capacity. On or before March 15 annually, the Department of Revenue shall file with the 275.28chair of the Tax Committee of the house of representatives and the chair of the Committee 275.29on Taxes and Tax laws of the senate a report of adjusted net tax capacities new text begin for school new text end 275.30 new text begin districts new text end . On or before June 15 annually, the Department of Revenue shall file its final report 275.31on the adjusted net tax capacities new text begin for school districts new text end established by the previous year's 275.32assessments and the current year's net tax capacity percentages with the commissioner of 275.33education and each county auditor for those new text begin school new text end districts for which the auditor has the 275.34responsibility for determination of local tax rates. A copy of the report so filed shall be 276.1mailed to the clerk of each new text begin school new text end district involved and to the county assessor or supervisor 276.2of assessments of the county or counties in which each new text begin school new text end district is located. 276.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 276.4    Sec. 16. Minnesota Statutes 2012, section 138.053, is amended to read: 276.5138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR 276.6TOWNS. 276.7The governing body of any home rule charter or statutory city or town may annually 276.8appropriate from its general fund an amount not to exceed 0.02418 percent of taxable 276.9 new text begin estimated new text end market value, derived from ad valorem taxes on property or other revenues, to 276.10be paid to the historical society of its respective county to be used for the promotion of 276.11historical work and to aid in defraying the expenses of carrying on the historical work in the 276.12county. No city or town may appropriate any funds for the benefit of any historical society 276.13unless the society is affiliated with and approved by the Minnesota Historical Society. 276.14    Sec. 17. Minnesota Statutes 2012, section 144F.01, subdivision 4, is amended to read: 276.15    Subd. 4. Property tax levy authority. The district's board may levy a tax on the 276.16taxable real and personal property in the district. The ad valorem tax levy may not exceed 276.170.048 percent of the taxable new text begin estimated new text end market value of the district or $400,000, whichever 276.18is less. The proceeds of the levy must be used as provided in subdivision 5. The board shall 276.19certify the levy at the times as provided under section 275.07. The board shall provide the 276.20county with whatever information is necessary to identify the property that is located within 276.21the district. If the boundaries include a part of a parcel, the entire parcel shall be included 276.22in the district. The county auditors must spread, collect, and distribute the proceeds of the 276.23tax at the same time and in the same manner as provided by law for all other property taxes. 276.24    Sec. 18. Minnesota Statutes 2012, section 162.07, subdivision 3, is amended to read: 276.25    Subd. 3. Computation for rural counties. An amount equal to a levy of 0.01596 276.26percent on each rural county's total taxable new text begin estimated new text end market value for the last preceding 276.27calendar year shall be computed and shall be subtracted from the county's total estimated 276.28construction costs. The result thereof shall be the money needs of the county. For the 276.29purpose of this section, "rural counties" means all counties having a population of less 276.30than 175,000. 276.31    Sec. 19. Minnesota Statutes 2012, section 162.07, subdivision 4, is amended to read: 277.1    Subd. 4. Computation for urban counties. An amount equal to a levy of 0.00967 277.2percent on each urban county's total taxable new text begin estimated new text end market value for the last preceding 277.3calendar year shall be computed and shall be subtracted from the county's total estimated 277.4construction costs. The result thereof shall be the money needs of the county. For 277.5the purpose of this section, "urban counties" means all counties having a population 277.6of 175,000 or more. 277.7    Sec. 20. Minnesota Statutes 2012, section 163.04, subdivision 3, is amended to read: 277.8    Subd. 3. Bridges within certain cities. When the council of any statutory city or 277.9city of the third or fourth class may determine that it is necessary to build or improve any 277.10bridge or bridges, including approaches thereto, and any dam or retaining works connected 277.11therewith, upon or forming a part of streets or highways either wholly or partly within 277.12its limits, the county board shall appropriate one-half of the money as may be necessary 277.13therefor from the county road and bridge fund, not exceeding during any year one-half 277.14the amount of taxes paid into the county road and bridge fund during the preceding year, 277.15on property within the corporate limits of the city. The appropriation shall be made upon 277.16the petition of the council, which petition shall be filed by the council with the county 277.17board prior to the fixing by the board of the annual county tax levy. The county board 277.18shall determine the plans and specifications, shall let all necessary contracts, shall have 277.19charge of construction, and upon its request, warrants in payment thereof shall be issued 277.20by the county auditor, from time to time, as the construction work proceeds. Any unpaid 277.21balance may be paid or advanced by the city. On petition of the council, the appropriations 277.22of the county board, during not to exceed three successive years, may be made to apply 277.23on the construction of the same items and to repay any money advanced by the city in 277.24the construction thereof. None of the provisions of this section shall be construed to 277.25be mandatory as applied to any city whose new text begin estimated new text end market value exceeds $2,100 per 277.26capita of its population. 277.27    Sec. 21. Minnesota Statutes 2012, section 163.06, subdivision 6, is amended to read: 277.28    Subd. 6. Expenditure in certain counties. In any county having not less than 95 277.29nor more than 105 full and fractional townships, and having a new text begin an estimated new text end market value 277.30of not less than $12,000,000 nor more than $21,000,000, exclusive of money and credits, 277.31 the county board, by resolution, may expend the funds provided in subdivision 4 in any 277.32organized or unorganized township or portion thereof in such county. 277.33    Sec. 22. Minnesota Statutes 2012, section 165.10, subdivision 1, is amended to read: 278.1    Subdivision 1. Certain counties may issue and sell. The county board of any 278.2county having no outstanding road and bridge bonds may issue and sell county road bonds 278.3in an amount not exceeding 0.12089 percent of the new text begin estimated new text end market value of the taxable 278.4property within the county exclusive of money and credits, for the purpose of constructing, 278.5reconstructing, improving, or maintaining any bridge or bridges on any highway under its 278.6jurisdiction, without submitting the matter to a vote of the electors of the county. 278.7    Sec. 23. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision 278.8to read: 278.9     new text begin Subd. 14. new text end new text begin Estimated market value. new text end new text begin "Estimated market value" means the assessor's new text end 278.10 new text begin determination of market value, including the effects of any orders made under section new text end 278.11 new text begin 270.12 or chapter 274, for the parcel. The provisions of section 273.032 apply for certain new text end 278.12 new text begin uses in determining the total estimated market value for the taxing jurisdiction. new text end 278.13    Sec. 24. Minnesota Statutes 2012, section 272.03, is amended by adding a subdivision 278.14to read: 278.15     new text begin Subd. 15. new text end new text begin Taxable market value. new text end new text begin "Taxable market value" means estimated market new text end 278.16 new text begin value for the parcel as reduced by market value exclusions, deferments of value, or other new text end 278.17 new text begin adjustments required by law, that reduce market value before the application of class rates. new text end 278.18    Sec. 25. Minnesota Statutes 2012, section 273.032, is amended to read: 278.19273.032 MARKET VALUE DEFINITION. 278.20 new text begin (a) Unless otherwise provided, new text end for the purpose of determining any property tax 278.21levy limitation based on market value new text begin or any limit on net debt, the issuance of bonds, new text end 278.22 new text begin certificates of indebtedness, or capital notes based on market value new text end , any qualification to 278.23receive state aid based on market value, or any state aid amount based on market value, the 278.24terms "market value," "taxable new text begin estimated new text end market value," and "market valuation," whether 278.25equalized or unequalized, mean the total taxable new text begin estimated new text end market value of new text begin taxable new text end property 278.26within the local unit of government before any new text begin of the following or similar new text end adjustments for new text begin : new text end 278.27 new text begin (1) the market value exclusions under: new text end 278.28 new text begin (i) section 273.11, subdivisions 14a and 14c (vacant platted land); new text end 278.29 new text begin (ii) section 273.11, subdivision 16 (certain improvements to homestead property); new text end 278.30 new text begin (iii) section 273.11, subdivisions 19 and 20 (certain improvements to business new text end 278.31 new text begin properties); new text end 278.32 new text begin (iv) section 273.11, subdivision 21 (homestead property damaged by mold); new text end 278.33 new text begin (v) section 273.11, subdivision 22 (qualifying lead hazardous reduction projects); new text end 279.1 new text begin (vi) section 273.13, subdivision 34 (homestead of a disabled veteran or family new text end 279.2 new text begin caregiver); new text end 279.3 new text begin (vii) section 273.13, subdivision 35 (homestead market value exclusion); or new text end 279.4 new text begin (2) the deferment of value under: new text end 279.5 new text begin (i) the Minnesota Agricultural Property Tax Law, section 273.111; new text end 279.6 new text begin (ii) the Aggregate Resource Preservation Law, section 273.1115; new text end 279.7 new text begin (iii) the Minnesota Open Space Property Tax Law, section 273.112; new text end 279.8 new text begin (iv) the rural preserves property tax program, section 273.114; or new text end 279.9 new text begin (v) the Metropolitan Agricultural Preserves Act, section 473H.10; or new text end 279.10 new text begin (3) the adjustments to tax capacity for: new text end 279.11 new text begin (i) new text end tax increment, new text begin financing under sections 469.174 to 469.1794; new text end 279.12 new text begin (ii) new text end fiscal disparity, new text begin disparities under chapter 276A or 473F; or new text end 279.13 new text begin (iii) new text end powerline credit, or wind energy values, but after the limited market adjustments 279.14under section 273.11, subdivision 1a, and after the market value exclusions of certain 279.15improvements to homestead property under section 273.11, subdivision 16 new text begin under section new text end 279.16 new text begin 273.425 new text end . 279.17 new text begin (b) Estimated market value under paragraph (a) also includes the market value new text end 279.18 new text begin of tax-exempt property if the applicable law specifically provides that the limitation, new text end 279.19 new text begin qualification, or aid calculation includes tax-exempt property. new text end 279.20 new text begin (c) new text end Unless otherwise provided, "market value," "taxable new text begin estimated new text end market value," 279.21and "market valuation" for purposes of this paragraph new text begin property tax levy limitations and new text end 279.22 new text begin calculation of state aid new text end , refer to the taxable new text begin estimated new text end market value for the previous 279.23assessment year new text begin and for purposes of limits on net debt, the issuance of bonds, certificates of new text end 279.24 new text begin indebtedness, or capital notes refer to the estimated market value as last finally equalized new text end . 279.25For the purpose of determining any net debt limit based on market value, or any limit 279.26on the issuance of bonds, certificates of indebtedness, or capital notes based on market 279.27value, the terms "market value," "taxable market value," and "market valuation," whether 279.28equalized or unequalized, mean the total taxable market value of property within the local 279.29unit of government before any adjustments for tax increment, fiscal disparity, powerline 279.30credit, or wind energy values, but after the limited market value adjustments under section 279.31, subdivision 1a, and after the market value exclusions of certain improvements to 279.32homestead property under section , subdivision 16. Unless otherwise provided, 279.33"market value," "taxable market value," and "market valuation" for purposes of this 279.34paragraph, mean the taxable market value as last finally equalized. 279.35 new text begin (d) For purposes of a provision of a home rule charter or of any special law that is not new text end 279.36 new text begin codified in the statutes and that imposes a levy limitation based on market value or any limit new text end 280.1 new text begin on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market new text end 280.2 new text begin value, the terms "market value," "taxable market value," and "market valuation," whether new text end 280.3 new text begin equalized or unequalized, mean "estimated market value" as defined in paragraph (a). new text end 280.4    Sec. 26. Minnesota Statutes 2012, section 273.11, subdivision 1, is amended to read: 280.5    Subdivision 1. Generally. Except as provided in this section or section 273.17, 280.6subdivision 1 , all property shall be valued at its market value. The market value as 280.7determined pursuant to this section shall be stated such that any amount under $100 is 280.8rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100. 280.9In estimating and determining such value, the assessor shall not adopt a lower or different 280.10standard of value because the same is to serve as a basis of taxation, nor shall the assessor 280.11adopt as a criterion of value the price for which such property would sell at a forced sale, 280.12or in the aggregate with all the property in the town or district; but the assessor shall value 280.13each article or description of property by itself, and at such sum or price as the assessor 280.14believes the same to be fairly worth in money. The assessor shall take into account the 280.15effect on the market value of property of environmental factors in the vicinity of the 280.16property. In assessing any tract or lot of real property, the value of the land, exclusive of 280.17structures and improvements, shall be determined, and also the value of all structures and 280.18improvements thereon, and the aggregate value of the property, including all structures 280.19and improvements, excluding the value of crops growing upon cultivated land. In valuing 280.20real property upon which there is a mine or quarry, it shall be valued at such price as such 280.21property, including the mine or quarry, would sell for at a fair, voluntary sale, for cash, 280.22if the material being mined or quarried is not subject to taxation under section 298.015 280.23and the mine or quarry is not exempt from the general property tax under section 298.25. 280.24In valuing real property which is vacant, platted property shall be assessed as provided 280.25in subdivision 14 new text begin subdivisions 14a and 14c new text end . All property, or the use thereof, which is 280.26taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market 280.27value of such property and not at the value of a leasehold estate in such property, or at 280.28some lesser value than its market value. 280.29    Sec. 27. Minnesota Statutes 2012, section 273.124, subdivision 3a, is amended to read: 280.30    Subd. 3a. Manufactured home park cooperative. (a) When a manufactured home 280.31park is owned by a corporation or association organized under chapter 308A or 308B, 280.32and each person who owns a share or shares in the corporation or association is entitled 280.33to occupy a lot within the park, the corporation or association may claim homestead 281.1treatment for the park. Each lot must be designated by legal description or number, and 281.2each lot is limited to not more than one-half acre of land. 281.3(b) The manufactured home park shall be entitled to homestead treatment if all 281.4of the following criteria are met: 281.5(1) the occupant or the cooperative corporation or association is paying the ad 281.6valorem property taxes and any special assessments levied against the land and structure 281.7either directly, or indirectly through dues to the corporation or association; and 281.8(2) the corporation or association organized under chapter 308A or 308B is wholly 281.9owned by persons having a right to occupy a lot owned by the corporation or association. 281.10(c) A charitable corporation, organized under the laws of Minnesota with no 281.11outstanding stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) 281.12tax-exempt status, qualifies for homestead treatment with respect to a manufactured home 281.13park if its members hold residential participation warrants entitling them to occupy a lot 281.14in the manufactured home park. 281.15(d) "Homestead treatment" under this subdivision means the class rate provided for 281.16class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause (5), 281.17item (ii). The homestead market value credit new text begin exclusion new text end under section new text begin 273.13, new text end 281.18 new text begin subdivision 35, new text end does not apply and the property taxes assessed against the park shall not 281.19be included in the determination of taxes payable for rent paid under section 290A.03. 281.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2013 and new text end 281.21 new text begin thereafter. new text end 281.22    Sec. 28. Minnesota Statutes 2012, section 273.124, subdivision 13, is amended to read: 281.23    Subd. 13. Homestead application. (a) A person who meets the homestead 281.24requirements under subdivision 1 must file a homestead application with the county 281.25assessor to initially obtain homestead classification. 281.26    (b) The format and contents of a uniform homestead application shall be prescribed 281.27by the commissioner of revenue. The application must clearly inform the taxpayer that 281.28this application must be signed by all owners who occupy the property or by the qualifying 281.29relative and returned to the county assessor in order for the property to receive homestead 281.30treatment. 281.31    (c) Every property owner applying for homestead classification must furnish to the 281.32county assessor the Social Security number of each occupant who is listed as an owner 281.33of the property on the deed of record, the name and address of each owner who does not 281.34occupy the property, and the name and Social Security number of each owner's spouse who 281.35occupies the property. The application must be signed by each owner who occupies the 282.1property and by each owner's spouse who occupies the property, or, in the case of property 282.2that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative. 282.3    If a property owner occupies a homestead, the property owner's spouse may not 282.4claim another property as a homestead unless the property owner and the property owner's 282.5spouse file with the assessor an affidavit or other proof required by the assessor stating that 282.6the property qualifies as a homestead under subdivision 1, paragraph (e). 282.7    Owners or spouses occupying residences owned by their spouses and previously 282.8occupied with the other spouse, either of whom fail to include the other spouse's name 282.9and Social Security number on the homestead application or provide the affidavits or 282.10other proof requested, will be deemed to have elected to receive only partial homestead 282.11treatment of their residence. The remainder of the residence will be classified as 282.12nonhomestead residential. When an owner or spouse's name and Social Security number 282.13appear on homestead applications for two separate residences and only one application is 282.14signed, the owner or spouse will be deemed to have elected to homestead the residence for 282.15which the application was signed. 282.16    The Social Security numbers, state or federal tax returns or tax return information, 282.17including the federal income tax schedule F required by this section, or affidavits or other 282.18proofs of the property owners and spouses submitted under this or another section to 282.19support a claim for a property tax homestead classification are private data on individuals as 282.20defined by section 13.02, subdivision 12, but, notwithstanding that section, the private data 282.21may be disclosed to the commissioner of revenue, or, for purposes of proceeding under the 282.22Revenue Recapture Act to recover personal property taxes owing, to the county treasurer. 282.23    (d) If residential real estate is occupied and used for purposes of a homestead by a 282.24relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 282.25order for the property to receive homestead status, a homestead application must be filed 282.26with the assessor. The Social Security number of each relative and spouse of a relative 282.27occupying the property shall be required on the homestead application filed under this 282.28subdivision. If a different relative of the owner subsequently occupies the property, the 282.29owner of the property must notify the assessor within 30 days of the change in occupancy. 282.30The Social Security number of a relative or relative's spouse occupying the property 282.31is private data on individuals as defined by section 13.02, subdivision 12, but may be 282.32disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 282.33Revenue Recapture Act to recover personal property taxes owing, to the county treasurer. 282.34    (e) The homestead application shall also notify the property owners that the 282.35application filed under this section will not be mailed annually and that if the property 282.36is granted homestead status for any assessment year, that same property shall remain 283.1classified as homestead until the property is sold or transferred to another person, or 283.2the owners, the spouse of the owner, or the relatives no longer use the property as their 283.3homestead. Upon the sale or transfer of the homestead property, a certificate of value must 283.4be timely filed with the county auditor as provided under section 272.115. Failure to 283.5notify the assessor within 30 days that the property has been sold, transferred, or that the 283.6owner, the spouse of the owner, or the relative is no longer occupying the property as a 283.7homestead, shall result in the penalty provided under this subdivision and the property 283.8will lose its current homestead status. 283.9    (f) If the homestead application is not returned within 30 days, the county will send a 283.10second application to the present owners of record. The notice of proposed property taxes 283.11prepared under section 275.065, subdivision 3, shall reflect the property's classification. If 283.12a homestead application has not been filed with the county by December 15, the assessor 283.13shall classify the property as nonhomestead for the current assessment year for taxes 283.14payable in the following year, provided that the owner may be entitled to receive the 283.15homestead classification by proper application under section 375.192. 283.16    (g) At the request of the commissioner, each county must give the commissioner a 283.17list that includes the name and Social Security number of each occupant of homestead 283.18property who is the property owner, property owner's spouse, qualifying relative of a 283.19property owner, or a spouse of a qualifying relative. The commissioner shall use the 283.20information provided on the lists as appropriate under the law, including for the detection 283.21of improper claims by owners, or relatives of owners, under chapter 290A. 283.22    (h) If the commissioner finds that a property owner may be claiming a fraudulent 283.23homestead, the commissioner shall notify the appropriate counties. Within 90 days of 283.24the notification, the county assessor shall investigate to determine if the homestead 283.25classification was properly claimed. If the property owner does not qualify, the county 283.26assessor shall notify the county auditor who will determine the amount of homestead 283.27benefits that had been improperly allowed. For the purpose of this section, "homestead 283.28benefits" means the tax reduction resulting from the classification as a homestead new text begin and the new text end 283.29 new text begin homestead market value exclusion new text end under section 273.13, the taconite homestead credit 283.30under section 273.135, the residential homestead and agricultural homestead credits new text begin credit new text end 283.31 under section 273.1384, and the supplemental homestead credit under section 273.1391. 283.32    The county auditor shall send a notice to the person who owned the affected property 283.33at the time the homestead application related to the improper homestead was filed, 283.34demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 283.35of the homestead benefits. The person notified may appeal the county's determination 283.36by serving copies of a petition for review with county officials as provided in section 284.1278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 284.2Court within 60 days of the date of the notice from the county. Procedurally, the appeal 284.3is governed by the provisions in chapter 271 which apply to the appeal of a property tax 284.4assessment or levy, but without requiring any prepayment of the amount in controversy. If 284.5the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 284.6has been filed, the county auditor shall certify the amount of taxes and penalty to the county 284.7treasurer. The county treasurer will add interest to the unpaid homestead benefits and 284.8penalty amounts at the rate provided in section 279.03 for real property taxes becoming 284.9delinquent in the calendar year during which the amount remains unpaid. Interest may be 284.10assessed for the period beginning 60 days after demand for payment was made. 284.11    If the person notified is the current owner of the property, the treasurer may add the 284.12total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 284.13otherwise payable on the property by including the amounts on the property tax statements 284.14under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 284.15valorem taxes shall include interest accrued through December 31 of the year preceding 284.16the taxes payable year for which the amounts are first added. These amounts, when added 284.17to the property tax statement, become subject to all the laws for the enforcement of real or 284.18personal property taxes for that year, and for any subsequent year. 284.19    If the person notified is not the current owner of the property, the treasurer may 284.20collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 284.21the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 284.22of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 284.23tax obligations of the person who owned the property at the time the application related to 284.24the improperly allowed homestead was filed. The treasurer may relieve a prior owner of 284.25personal liability for the homestead benefits, penalty, interest, and costs, and instead extend 284.26those amounts on the tax lists against the property as provided in this paragraph to the extent 284.27that the current owner agrees in writing. On all demands, billings, property tax statements, 284.28and related correspondence, the county must list and state separately the amounts of 284.29homestead benefits, penalty, interest and costs being demanded, billed or assessed. 284.30    (i) Any amount of homestead benefits recovered by the county from the property 284.31owner shall be distributed to the county, city or town, and school district where the 284.32property is located in the same proportion that each taxing district's levy was to the total 284.33of the three taxing districts' levy for the current year. Any amount recovered attributable 284.34to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 284.35deposited in the taconite property tax relief account. Any amount recovered that is 284.36attributable to supplemental homestead credit is to be transmitted to the commissioner of 285.1revenue for deposit in the general fund of the state treasury. The total amount of penalty 285.2collected must be deposited in the county general fund. 285.3    (j) If a property owner has applied for more than one homestead and the county 285.4assessors cannot determine which property should be classified as homestead, the county 285.5assessors will refer the information to the commissioner. The commissioner shall make 285.6the determination and notify the counties within 60 days. 285.7    (k) In addition to lists of homestead properties, the commissioner may ask the 285.8counties to furnish lists of all properties and the record owners. The Social Security 285.9numbers and federal identification numbers that are maintained by a county or city 285.10assessor for property tax administration purposes, and that may appear on the lists retain 285.11their classification as private or nonpublic data; but may be viewed, accessed, and used by 285.12the county auditor or treasurer of the same county for the limited purpose of assisting the 285.13commissioner in the preparation of microdata samples under section 270C.12. 285.14    (l) On or before April 30 each year beginning in 2007, each county must provide the 285.15commissioner with the following data for each parcel of homestead property by electronic 285.16means as defined in section 289A.02, subdivision 8: 285.17    (i) the property identification number assigned to the parcel for purposes of taxes 285.18payable in the current year; 285.19    (ii) the name and Social Security number of each occupant of homestead property 285.20who is the property owner, property owner's spouse, qualifying relative of a property 285.21owner, or spouse of a qualifying relative; 285.22    (iii) the classification of the property under section 273.13 for taxes payable in the 285.23current year and in the prior year; 285.24    (iv) an indication of whether the property was classified as a homestead for taxes 285.25payable in the current year because of occupancy by a relative of the owner or by a 285.26spouse of a relative; 285.27    (v) the property taxes payable as defined in section 290A.03, subdivision 13, for the 285.28current year and the prior year; 285.29    (vi) the market value of improvements to the property first assessed for tax purposes 285.30for taxes payable in the current year; 285.31    (vii) the assessor's estimated market value assigned to the property for taxes payable 285.32in the current year and the prior year; 285.33    (viii) the taxable market value assigned to the property for taxes payable in the 285.34current year and the prior year; 285.35    (ix) whether there are delinquent property taxes owing on the homestead; 285.36    (x) the unique taxing district in which the property is located; and 286.1    (xi) such other information as the commissioner decides is necessary. 286.2    The commissioner shall use the information provided on the lists as appropriate 286.3under the law, including for the detection of improper claims by owners, or relatives 286.4of owners, under chapter 290A. 286.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2013 and new text end 286.6 new text begin thereafter. new text end 286.7    Sec. 29. Minnesota Statutes 2012, section 273.13, subdivision 21b, is amended to read: 286.8    Subd. 21b. new text begin Net new text end tax capacity. (a) Gross tax capacity means the product of the 286.9appropriate gross class rates in this section and market values. 286.10(b) Net tax capacity means the product of the appropriate net class rates in this 286.11section and new text begin taxable new text end market values. 286.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 286.13    Sec. 30. Minnesota Statutes 2012, section 273.1398, subdivision 3, is amended to read: 286.14    Subd. 3. Disparity reduction aid. The amount of disparity aid certified for each 286.15taxing district within each unique taxing jurisdiction for taxes payable in the prior year 286.16shall be multiplied by the ratio of (1) the jurisdiction's tax capacity using the class rates for 286.17taxes payable in the year for which aid is being computed, to (2) its tax capacity using 286.18the class rates for taxes payable in the year prior to that for which aid is being computed, 286.19both based upon new text begin taxable new text end market values for taxes payable in the year prior to that for which 286.20aid is being computed. If the commissioner determines that insufficient information is 286.21available to reasonably and timely calculate the numerator in this ratio for the first taxes 286.22payable year that a class rate change or new class rate is effective, the commissioner shall 286.23omit the effects of that class rate change or new class rate when calculating this ratio for 286.24aid payable in that taxes payable year. For aid payable in the year following a year for 286.25which such omission was made, the commissioner shall use in the denominator for the 286.26class that was changed or created, the tax capacity for taxes payable two years prior to that 286.27in which the aid is payable, based on new text begin taxable new text end market values for taxes payable in the year 286.28prior to that for which aid is being computed. 286.29    Sec. 31. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read: 286.30    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989, 286.31class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property 286.32is located in a border city that has an enterprise zone, as defined in section 469.166; (2) 287.1the property is located in a city with a population greater than 2,500 and less than 35,000 287.2according to the 1980 decennial census; (3) the city is adjacent to a city in another state or 287.3immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city 287.4in the other state has a population of greater than 5,000 and less than 75,000 according to 287.5the 1980 decennial census. 287.6    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a 287.7property to 2.3 percent of the property's new text begin taxable new text end market value and (ii) the tax on class 3a 287.8property to 2.3 percent of new text begin taxable new text end market value. 287.9    (c) The county auditor shall annually certify the costs of the credits to the 287.10Department of Revenue. The department shall reimburse local governments for the 287.11property taxes forgone as the result of the credits in proportion to their total levies. 287.12    Sec. 32. Minnesota Statutes 2012, section 275.011, subdivision 1, is amended to read: 287.13    Subdivision 1. Determination of levy limit. The property tax levied for any 287.14purpose under a special law that is not codified in Minnesota Statutes or a city charter 287.15provision and that is subject to a mill rate limitation imposed by the special law or city 287.16charter provision, excluding levies subject to mill rate limitations that use adjusted 287.17assessed values determined by the commissioner of revenue under section 124.2131, must 287.18not exceed the following amount for the years specified: 287.19(a) for taxes payable in 1988, the product of the applicable mill rate limitation 287.20imposed by special law or city charter provision multiplied by the total assessed valuation 287.21of all taxable property subject to the tax as adjusted by the provisions of Minnesota 287.22Statutes 1986, sections 272.64; 273.13, subdivision 7a; and 275.49; 287.23(b) for taxes payable in 1989, the product of (1) the property tax levy limitation for 287.24the taxes payable year 1988 determined under clause (a) multiplied by (2) an index for 287.25market valuation changes equal to the assessment year 1988 total market valuation of all 287.26taxable property subject to the tax divided by the assessment year 1987 total market 287.27valuation of all taxable property subject to the tax; and 287.28(c) for taxes payable in 1990 and subsequent years, the product of (1) the property 287.29tax levy limitation for the previous year determined pursuant to this subdivision multiplied 287.30by (2) an index for market valuation changes equal to the total market valuation of all 287.31taxable property subject to the tax for the current assessment year divided by the total 287.32market valuation of all taxable property subject to the tax for the previous assessment year. 287.33For the purpose of determining the property tax levy limitation for the taxes payable 287.34year 1988 new text begin 2014 new text end and subsequent years under this subdivision, "total market valuation" 287.35means the total new text begin estimated new text end market valuation new text begin value new text end of all taxable property subject to the 288.1tax without valuation adjustments for fiscal disparities (chapters 276A and 473F), tax 288.2increment financing (sections to 469.179), or powerline credit (section 273.425) 288.3 new text begin as provided under section 273.032 new text end . 288.4    Sec. 33. Minnesota Statutes 2012, section 275.077, subdivision 2, is amended to read: 288.5    Subd. 2. Correction of levy amount. The difference between the correct levy and 288.6the erroneous levy shall be added to the township levy for the subsequent levy year; 288.7provided that if the amount of the difference exceeds 0.12089 percent of taxable new text begin estimated new text end 288.8 market value, the excess shall be added to the township levy for the second and later 288.9subsequent levy years, not to exceed an additional levy of 0.12089 percent of taxable 288.10 new text begin estimated new text end market value in any year, until the full amount of the difference has been levied. 288.11The funds collected from the corrected levies shall be used to reimburse the county for the 288.12payment required by subdivision 1. 288.13    Sec. 34. Minnesota Statutes 2012, section 275.71, subdivision 4, is amended to read: 288.14    Subd. 4. Adjusted levy limit base. For taxes levied in 2008 through 2010, the 288.15adjusted levy limit base is equal to the levy limit base computed under subdivision 2 288.16or section 275.72, multiplied by: 288.17    (1) one plus the percentage growth in the implicit price deflator, but the percentage 288.18shall not be less than zero or exceed 3.9 percent; 288.19    (2) one plus a percentage equal to 50 percent of the percentage increase in the number 288.20of households, if any, for the most recent 12-month period for which data is available; and 288.21    (3) one plus a percentage equal to 50 percent of the percentage increase in the 288.22taxable new text begin estimated new text end market value of the jurisdiction due to new construction of class 3 288.23property, as defined in section 273.13, subdivision 4, except for state-assessed utility and 288.24railroad property, for the most recent year for which data is available. 288.25    Sec. 35. Minnesota Statutes 2012, section 276.04, subdivision 2, is amended to read: 288.26    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the printing 288.27of the tax statements. The commissioner of revenue shall prescribe the form of the property 288.28tax statement and its contents. The tax statement must not state or imply that property tax 288.29credits are paid by the state of Minnesota. The statement must contain a tabulated statement 288.30of the dollar amount due to each taxing authority and the amount of the state tax from the 288.31parcel of real property for which a particular tax statement is prepared. The dollar amounts 288.32attributable to the county, the state tax, the voter approved school tax, the other local school 288.33tax, the township or municipality, and the total of the metropolitan special taxing districts 289.1as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. 289.2The amounts due all other special taxing districts, if any, may be aggregated except that 289.3any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, 289.4Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate 289.5line directly under the appropriate county's levy. If the county levy under this paragraph 289.6includes an amount for a lake improvement district as defined under sections 103B.501 289.7to 103B.581, the amount attributable for that purpose must be separately stated from the 289.8remaining county levy amount. In the case of Ramsey County, if the county levy under this 289.9paragraph includes an amount for public library service under section 134.07, the amount 289.10attributable for that purpose may be separated from the remaining county levy amount. 289.11The amount of the tax on homesteads qualifying under the senior citizens' property tax 289.12deferral program under chapter 290B is the total amount of property tax before subtraction 289.13of the deferred property tax amount. The amount of the tax on contamination value 289.14imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar 289.15amounts, including the dollar amount of any special assessments, may be rounded to the 289.16nearest even whole dollar. For purposes of this section whole odd-numbered dollars may 289.17be adjusted to the next higher even-numbered dollar. The amount of market value excluded 289.18under section 273.11, subdivision 16, if any, must also be listed on the tax statement. 289.19    (b) The property tax statements for manufactured homes and sectional structures 289.20taxed as personal property shall contain the same information that is required on the 289.21tax statements for real property. 289.22    (c) Real and personal property tax statements must contain the following information 289.23in the order given in this paragraph. The information must contain the current year tax 289.24information in the right column with the corresponding information for the previous year 289.25in a column on the left: 289.26    (1) the property's estimated market value under section 273.11, subdivision 1; 289.27(2) the property's homestead market value exclusion under section 273.13, 289.28subdivision 35; 289.29    (3) the property's taxable market value after reductions under sections , 289.30subdivisions 1a and 16, and 273.13, subdivision 35 new text begin section 272.03, subdivision 15 new text end ; 289.31    (4) the property's gross tax, before credits; 289.32    (5) for homestead agricultural properties, the credit under section 273.1384; 289.33    (6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135; 289.34273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of 289.35credit received under section 273.135 must be separately stated and identified as "taconite 289.36tax relief"; and 290.1    (7) the net tax payable in the manner required in paragraph (a). 290.2    (d) If the county uses envelopes for mailing property tax statements and if the county 290.3agrees, a taxing district may include a notice with the property tax statement notifying 290.4taxpayers when the taxing district will begin its budget deliberations for the current 290.5year, and encouraging taxpayers to attend the hearings. If the county allows notices to 290.6be included in the envelope containing the property tax statement, and if more than 290.7one taxing district relative to a given property decides to include a notice with the tax 290.8statement, the county treasurer or auditor must coordinate the process and may combine 290.9the information on a single announcement. 290.10    Sec. 36. Minnesota Statutes 2012, section 276A.01, subdivision 10, is amended to read: 290.11    Subd. 10. new text begin Adjusted new text end market value. " new text begin Adjusted new text end market value" of real and personal 290.12property within a municipality means the assessor's estimated new text begin taxable new text end market value new text begin , new text end 290.13 new text begin as defined in section 272.03, new text end of all real and personal property, including the value of 290.14manufactured housing, within the municipality. For purposes of sections to 290.15, the commissioner of revenue shall annually make determinations and reports 290.16with respect to each municipality which are comparable to those it makes for school 290.17districts new text begin , adjusted for sales ratios in a manner similar to the adjustments made to city and new text end 290.18 new text begin town net tax capacities new text end under section 127A.48, subdivisions 1 to 6, in the same manner 290.19and at the same times prescribed by the subdivision. The commissioner of revenue shall 290.20annually determine, for each municipality, information comparable to that required by 290.21section 475.53, subdivision 4, for school districts, as soon as practicable after it becomes 290.22available. The commissioner of revenue shall then compute the equalized market value of 290.23property within each municipality. 290.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 290.25    Sec. 37. Minnesota Statutes 2012, section 276A.01, subdivision 12, is amended to read: 290.26    Subd. 12. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation 290.27 new text begin adjusted market value new text end , determined as of January 2 of any year, divided by its population, 290.28determined as of a date in the same year. 290.29    Sec. 38. Minnesota Statutes 2012, section 276A.01, subdivision 13, is amended to read: 290.30    Subd. 13. Average fiscal capacity. "Average fiscal capacity" of municipalities 290.31means the sum of the valuations new text begin adjusted market values new text end of all municipalities, determined 290.32as of January 2 of any year, divided by the sum of their populations, determined as of 290.33a date in the same year. 291.1    Sec. 39. Minnesota Statutes 2012, section 276A.01, subdivision 15, is amended to read: 291.2    Subd. 15. Net tax capacity. "Net tax capacity" means the new text begin taxable new text end market value of 291.3real and personal property multiplied by its net tax capacity rates in section 273.13. 291.4    Sec. 40. Minnesota Statutes 2012, section 276A.06, subdivision 10, is amended to read: 291.5    Subd. 10. Adjustment of values for other computations. For the purpose of 291.6computing the amount or rate of any salary, aid, tax, or debt authorized, required, or 291.7limited by any provision of any law or charter, where the authorization, requirement, or 291.8limitation is related to any value or valuation of taxable property within any governmental 291.9unit, the value or net tax capacity new text begin fiscal capacity under section 276A.01, subdivision 12, a new text end 291.10 new text begin municipality's taxable market value new text end must be adjusted to reflect the adjustments new text begin reductions new text end 291.11 to net tax capacity effected by subdivision 2, new text begin clause (a), new text end provided that: (1) in determining 291.12the new text begin taxable new text end market value of commercial-industrial property or any class thereof within 291.13a governmental unit for any purpose other than section new text begin municipality new text end , (a) the 291.14reduction required by this subdivision is that amount which bears the same proportion to 291.15the amount subtracted from the governmental unit's new text begin municipality's new text end net tax capacity pursuant 291.16to subdivision 2, clause (a), as the new text begin taxable new text end market value of commercial-industrial property, 291.17or such class thereof, located within the governmental unit new text begin municipality new text end bears to the net 291.18tax capacity of commercial-industrial property, or such class thereof, located within the 291.19governmental unit, and (b) the increase required by this subdivision is that amount which 291.20bears the same proportion to the amount added to the governmental unit's net tax capacity 291.21pursuant to subdivision 2, clause (b), as the market value of commercial-industrial property, 291.22or such class thereof, located within the governmental unit bears to the net tax capacity of 291.23commercial-industrial property, or such class thereof, located within the governmental unit; 291.24and (2) in determining the market value of real property within a municipality for purposes 291.25of section , the adjustment prescribed by clause (1)(a) must be made and that 291.26prescribed by clause (1)(b) must not be made new text begin municipality. No adjustment shall be made new text end 291.27 new text begin to taxable market value for the increase in net tax capacity under subdivision 2, clause (b) new text end . 291.28    Sec. 41. Minnesota Statutes 2012, section 287.08, is amended to read: 291.29287.08 TAX, HOW PAYABLE; RECEIPTS. 291.30    (a) The tax imposed by sections 287.01 to 287.12 must be paid to the treasurer of 291.31any county in this state in which the real property or some part is located at or before 291.32the time of filing the mortgage for record. The treasurer shall endorse receipt on the 291.33mortgage and the receipt is conclusive proof that the tax has been paid in the amount 291.34stated and authorizes any county recorder or registrar of titles to record the mortgage. Its 292.1form, in substance, shall be "registration tax hereon of ..................... dollars paid." If the 292.2mortgage is exempt from taxation the endorsement shall, in substance, be "exempt from 292.3registration tax." In either case the receipt must be signed by the treasurer. In case the 292.4treasurer is unable to determine whether a claim of exemption should be allowed, the tax 292.5must be paid as in the case of a taxable mortgage. For documents submitted electronically, 292.6the endorsements and tax amount shall be affixed electronically and no signature by the 292.7treasurer will be required. The actual payment method must be arranged in advance 292.8between the submitter and the receiving county. 292.9    (b) The county treasurer may refund in whole or in part any mortgage registry tax 292.10overpayment if a written application by the taxpayer is submitted to the county treasurer 292.11within 3-1/2 years from the date of the overpayment. If the county has not issued a denial 292.12of the application, the taxpayer may bring an action in Tax Court in the county in which 292.13the tax was paid at any time after the expiration of six months from the time that the 292.14application was submitted. A denial of refund may be appealed within 60 days from 292.15the date of the denial by bringing an action in Tax Court in the county in which the tax 292.16was paid. The action is commenced by the serving of a petition for relief on the county 292.17treasurer, and by filing a copy with the court. The county attorney shall defend the action. 292.18The county treasurer shall notify the treasurer of each county that has or would receive a 292.19portion of the tax as paid. 292.20    (c) If the county treasurer determines a refund should be paid, or if a refund is 292.21ordered by the court, the county treasurer of each county that actually received a portion 292.22of the tax shall immediately pay a proportionate share of three percent of the refund 292.23using any available county funds. The county treasurer of each county that received, or 292.24would have received, a portion of the tax shall also pay their county's proportionate share 292.25of the remaining 97 percent of the court-ordered refund on or before the 20th day of the 292.26following month using solely the mortgage registry tax funds that would be paid to the 292.27commissioner of revenue on that date under section 287.12. If the funds on hand under 292.28this procedure are insufficient to fully fund 97 percent of the court-ordered refund, the 292.29county treasurer of the county in which the action was brought shall file a claim with the 292.30commissioner of revenue under section 16A.48 for the remaining portion of 97 percent of 292.31the refund, and shall pay over the remaining portion upon receipt of a warrant from the 292.32state issued pursuant to the claim. 292.33    (d) When any mortgage covers real property located in more than one county in this 292.34state the total tax must be paid to the treasurer of the county where the mortgage is first 292.35presented for recording, and the payment must be receipted as provided in paragraph 292.36(a). If the principal debt or obligation secured by such a multiple county mortgage 293.1exceeds $10,000,000, the nonstate portion of the tax must be divided and paid over by 293.2the county treasurer receiving it, on or before the 20th day of each month after receipt, 293.3to the county or counties entitled in the ratio that the new text begin estimated new text end market value of the real 293.4property covered by the mortgage in each county bears to the new text begin estimated new text end market value of 293.5all the real property in this state described in the mortgage. In making the division and 293.6payment the county treasurer shall send a statement giving the description of the real 293.7property described in the mortgage and the new text begin estimated new text end market value of the part located in 293.8each county. For this purpose, the treasurer of any county may require the treasurer of 293.9any other county to certify to the former the new text begin estimated new text end market valuation new text begin value new text end of any tract 293.10of real property in any mortgage. 293.11    (e) The mortgagor must pay the tax imposed by sections 287.01 to 287.12. The 293.12mortgagee may undertake to collect and remit the tax on behalf of the mortgagor. If the 293.13mortgagee collects money from the mortgagor to remit the tax on behalf of the mortgagor, 293.14the mortgagee has a fiduciary duty to remit the tax on behalf of the mortgagor as to the 293.15amount of the tax collected for that purpose and the mortgagor is relieved of any further 293.16obligation to pay the tax as to the amount collected by the mortgagee for this purpose. 293.17    Sec. 42. Minnesota Statutes 2012, section 287.23, subdivision 1, is amended to read: 293.18    Subdivision 1. Real property outside county. If any taxable deed or instrument 293.19describes any real property located in more than one county in this state, the total tax must 293.20be paid to the treasurer of the county where the document is first presented for recording, 293.21and the payment must be receipted as provided in section 287.08. If the net consideration 293.22exceeds $700,000, the nonstate portion of the tax must be divided and paid over by the 293.23county treasurer receiving it, on or before the 20th day of each month after receipt, to 293.24the county or counties entitled in the ratio which the new text begin estimated new text end market value of the real 293.25property covered by the document in each county bears to the new text begin estimated new text end market value of 293.26all the real property in this state described in the document. In making the division and 293.27payment the county treasurer shall send a statement to the other involved counties giving 293.28the description of the real property described in the document and the new text begin estimated new text end market 293.29value of the part located in each county. The treasurer of any county may require the 293.30treasurer of any other county to certify to the former the new text begin estimated new text end market valuation new text begin value new text end 293.31 of any parcel of real property for this purpose. 293.32    Sec. 43. Minnesota Statutes 2012, section 353G.08, subdivision 2, is amended to read: 293.33    Subd. 2. Cash flow funding requirement. If the executive director determines that 293.34an account in the voluntary statewide lump-sum volunteer firefighter retirement plan has 294.1insufficient assets to meet the service pensions determined payable from the account, 294.2the executive director shall certify the amount of the potential service pension shortfall 294.3to the municipality or municipalities and the municipality or municipalities shall make 294.4an additional employer contribution to the account within ten days of the certification. 294.5If more than one municipality is associated with the account, unless the municipalities 294.6agree to a different allocation, the municipalities shall allocate the additional employer 294.7contribution one-half in proportion to the population of each municipality and one-half in 294.8proportion to the new text begin estimated new text end market value of the property of each municipality. 294.9    Sec. 44. Minnesota Statutes 2012, section 365.025, subdivision 4, is amended to read: 294.10    Subd. 4. Major purchases: notice, petition, election. Before buying anything 294.11under subdivision 2 that costs more than 0.24177 percent of the new text begin estimated new text end market value of 294.12the town, the town must follow this subdivision. 294.13The town must publish in its official newspaper the board's resolution to pay for the 294.14property over time. Then a petition for an election on the contract may be filed with the 294.15clerk. The petition must be filed within ten days after the resolution is published. To require 294.16the election the petition must be signed by a number of voters equal to ten percent of the 294.17voters at the last regular town election. The contract then must be approved by a majority of 294.18those voting on the question. The question may be voted on at a regular or special election. 294.19    Sec. 45. Minnesota Statutes 2012, section 366.095, subdivision 1, is amended to read: 294.20    Subdivision 1. Certificates of indebtedness. The town board may issue certificates 294.21of indebtedness within the debt limits for a town purpose otherwise authorized by law. 294.22The certificates shall be payable in not more than ten years and be issued on the terms and 294.23in the manner as the board may determine. If the amount of the certificates to be issued 294.24exceeds 0.25 percent of the new text begin estimated new text end market value of the town, they shall not be issued 294.25for at least ten days after publication in a newspaper of general circulation in the town of 294.26the board's resolution determining to issue them. If within that time, a petition asking for 294.27an election on the proposition signed by voters equal to ten percent of the number of voters 294.28at the last regular town election is filed with the clerk, the certificates shall not be issued 294.29until their issuance has been approved by a majority of the votes cast on the question at 294.30a regular or special election. A tax levy shall be made to pay the principal and interest 294.31on the certificates as in the case of bonds. 294.32    Sec. 46. Minnesota Statutes 2012, section 366.27, is amended to read: 294.33366.27 FIREFIGHTERS' RELIEF; TAX LEVY. 295.1The town board of any town in this state having therein a platted portion on 295.2which resides 1,200 or more people, and wherein a duly incorporated firefighters' relief 295.3association is located may each year levy a tax not to exceed 0.00806 percent of taxable 295.4 new text begin estimated new text end market value for the benefit of the relief association. 295.5    Sec. 47. Minnesota Statutes 2012, section 368.01, subdivision 23, is amended to read: 295.6    Subd. 23. Financing purchase of certain equipment. The town board may issue 295.7certificates of indebtedness within debt limits to purchase fire or police equipment or 295.8ambulance equipment or street construction or maintenance equipment. The certificates 295.9shall be payable in not more than five years and be issued on terms and in the manner as the 295.10board may determine. If the amount of the certificates to be issued to finance a purchase 295.11exceeds 0.24177 percent of the new text begin estimated new text end market value of the town, excluding money 295.12and credits, they shall not be issued for at least ten days after publication in the official 295.13newspaper of a town board resolution determining to issue them. If before the end of that 295.14time, a petition asking for an election on the proposition signed by voters equal to ten 295.15percent of the number of voters at the last regular town election is filed with the clerk, the 295.16certificates shall not be issued until the proposition of their issuance has been approved by a 295.17majority of the votes cast on the question at a regular or special election. A tax levy shall be 295.18made for the payment of the principal and interest on the certificates as in the case of bonds. 295.19    Sec. 48. Minnesota Statutes 2012, section 368.47, is amended to read: 295.20368.47 TOWNS MAY BE DISSOLVED. 295.21(1) When the voters residing within a town have failed to elect any town officials for 295.22more than ten years continuously; 295.23(2) when a town has failed for a period of ten years to exercise any of the powers 295.24and functions of a town; 295.25(3) when the new text begin estimated new text end market value of a town drops to less than $165,000; 295.26(4) when the tax delinquency of a town, exclusive of taxes that are delinquent or 295.27unpaid because they are contested in proceedings for the enforcement of taxes, amounts to 295.2812 percent of its market value; or 295.29(5) when the state or federal government has acquired title to 50 percent of the 295.30real estate of a town, 295.31which facts, or any of them, may be found and determined by the resolution of the county 295.32board of the county in which the town is located, according to the official records in the 295.33office of the county auditor, the county board by resolution may declare the town, naming 295.34it, dissolved and no longer entitled to exercise any of the powers or functions of a town. 296.1In Cass, Itasca, and St. Louis Counties, before the dissolution is effective the voters 296.2of the town shall express their approval or disapproval. The town clerk shall, upon a 296.3petition signed by a majority of the registered voters of the town, filed with the clerk at 296.4least 60 days before a regular or special town election, give notice at the same time and 296.5in the same manner of the election that the question of dissolution of the town will be 296.6submitted for determination at the election. At the election the question shall be voted 296.7upon by a separate ballot, the terms of which shall be either "for dissolution" or "against 296.8dissolution." The ballot shall be deposited in a separate ballot box and the result of the 296.9voting canvassed, certified, and returned in the same manner and at the same time as 296.10other facts and returns of the election. If a majority of the votes cast at the election are 296.11for dissolution, the town shall be dissolved. If a majority of the votes cast at the election 296.12are against dissolution, the town shall not be dissolved. 296.13When a town is dissolved under sections 368.47 to 368.49 the county shall acquire 296.14title to any telephone company or other business conducted by the town. The business 296.15shall be operated by the board of county commissioners until it can be sold. The 296.16subscribers or patrons of the business shall have the first opportunity of purchase. If the 296.17town has any outstanding indebtedness chargeable to the business, the county auditor shall 296.18levy a tax against the property situated in the dissolved town to pay the indebtedness 296.19as it becomes due. 296.20    Sec. 49. Minnesota Statutes 2012, section 370.01, is amended to read: 296.21370.01 CHANGE OF BOUNDARIES; CREATION OF NEW COUNTIES. 296.22The boundaries of counties may be changed by taking territory from a county and 296.23attaching it to an adjoining county, and new counties may be established out of territory of 296.24one or more existing counties. A new county shall contain at least 400 square miles and 296.25have at least 4,000 inhabitants. A proposed new county must have a total taxable new text begin estimated new text end 296.26 market value of at least 35 percent of (i) the total taxable new text begin estimated new text end market value of the 296.27existing county, or (ii) the average total taxable new text begin estimated new text end market value of the existing 296.28counties, included in the proposition. The determination of the taxable new text begin estimated new text end market 296.29value of a county must be made by the commissioner of revenue. An existing county shall 296.30not be reduced in area below 400 square miles, have less than 4,000 inhabitants, or have a 296.31total taxable new text begin estimated new text end market value of less than that required of a new county. 296.32No change in the boundaries of any county having an area of more than 2,500 square 296.33miles, whether by the creation of a new county, or otherwise, shall detach from the existing 296.34county any territory within 12 miles of the county seat. 297.1    Sec. 50. Minnesota Statutes 2012, section 373.40, subdivision 1, is amended to read: 297.2    Subdivision 1. Definitions. For purposes of this section, the following terms have 297.3the meanings given. 297.4(a) "Bonds" means an obligation as defined under section 475.51. 297.5(b) "Capital improvement" means acquisition or betterment of public lands, 297.6buildings, or other improvements within the county for the purpose of a county courthouse, 297.7administrative building, health or social service facility, correctional facility, jail, law 297.8enforcement center, hospital, morgue, library, park, qualified indoor ice arena, roads and 297.9bridges, and the acquisition of development rights in the form of conservation easements 297.10under chapter 84C. An improvement must have an expected useful life of five years or 297.11more to qualify. "Capital improvement" does not include a recreation or sports facility 297.12building (such as, but not limited to, a gymnasium, ice arena, racquet sports facility, 297.13swimming pool, exercise room or health spa), unless the building is part of an outdoor 297.14park facility and is incidental to the primary purpose of outdoor recreation. 297.15(c) "Metropolitan county" means a county located in the seven-county metropolitan 297.16area as defined in section 473.121 or a county with a population of 90,000 or more. 297.17(d) "Population" means the population established by the most recent of the 297.18following (determined as of the date the resolution authorizing the bonds was adopted): 297.19(1) the federal decennial census, 297.20(2) a special census conducted under contract by the United States Bureau of the 297.21Census, or 297.22(3) a population estimate made either by the Metropolitan Council or by the state 297.23demographer under section 4A.02. 297.24(e) "Qualified indoor ice arena" means a facility that meets the requirements of 297.25section 373.43. 297.26(f) "Tax capacity" means total taxable market value, but does not include captured 297.27market value. 297.28    Sec. 51. Minnesota Statutes 2012, section 373.40, subdivision 4, is amended to read: 297.29    Subd. 4. Limitations on amount. A county may not issue bonds under this section 297.30if the maximum amount of principal and interest to become due in any year on all the 297.31outstanding bonds issued pursuant to this section (including the bonds to be issued) will 297.32equal or exceed 0.12 percent of taxable new text begin the estimated new text end market value of property in the 297.33county. Calculation of the limit must be made using the taxable new text begin estimated new text end market value for 297.34the taxes payable year in which the obligations are issued and sold. This section does not 297.35limit the authority to issue bonds under any other special or general law. 298.1    Sec. 52. Minnesota Statutes 2012, section 375.167, subdivision 1, is amended to read: 298.2    Subdivision 1. Appropriations. Notwithstanding any contrary law, a county board 298.3may appropriate from the general revenue fund to any nonprofit corporation a sum not 298.4to exceed 0.00604 percent of taxable new text begin estimated new text end market value to provide legal assistance 298.5to persons who are unable to afford private legal counsel. 298.6    Sec. 53. Minnesota Statutes 2012, section 375.18, subdivision 3, is amended to read: 298.7    Subd. 3. Courthouse. Each county board may erect, furnish, and maintain a 298.8suitable courthouse. No indebtedness shall be created for a courthouse in excess of an 298.9amount equal to a levy of 0.04030 percent of taxable new text begin estimated new text end market value without the 298.10approval of a majority of the voters of the county voting on the question of issuing the 298.11obligation at an election. 298.12    Sec. 54. Minnesota Statutes 2012, section 375.555, is amended to read: 298.13375.555 FUNDING. 298.14To implement the county emergency jobs program, the county board may expend 298.15an amount equal to what would be generated by a levy of 0.01209 percent of taxable 298.16 new text begin estimated new text end market value. The money to be expended may be from any available funds 298.17not otherwise earmarked. 298.18    Sec. 55. Minnesota Statutes 2012, section 383B.152, is amended to read: 298.19383B.152 BUILDING AND MAINTENANCE FUND. 298.20The county board may by resolution levy a tax to provide money which shall be kept 298.21in a fund known as the county reserve building and maintenance fund. Money in the fund 298.22shall be used solely for the construction, maintenance, and equipping of county buildings 298.23that are constructed or maintained by the board. The levy shall not be subject to any limit 298.24fixed by any other law or by any board of tax levy or other corresponding body, but shall 298.25not exceed 0.02215 percent of taxable new text begin estimated new text end market value, less the amount required by 298.26chapter 475 to be levied in the year for the payment of the principal of and interest on all 298.27bonds issued pursuant to Extra Session Laws 1967, chapter 47, section 1. 298.28    Sec. 56. Minnesota Statutes 2012, section 383B.245, is amended to read: 298.29383B.245 LIBRARY LEVY. 299.1    (a) The county board may levy a tax on the taxable property within the county to 299.2acquire, better, and construct county library buildings and branches and to pay principal 299.3and interest on bonds issued for that purpose. 299.4    (b) The county board may by resolution adopted by a five-sevenths vote issue and 299.5sell general obligation bonds of the county in the manner provided in sections 475.60 to 299.6475.73 . The bonds shall not be subject to the limitations of sections 475.51 to 475.59, 299.7but the maturity years and amounts and interest rates of each series of bonds shall be 299.8fixed so that the maximum amount of principal and interest to become due in any year, 299.9on the bonds of that series and of all outstanding series issued by or for the purposes of 299.10libraries, shall not exceed an amount equal to 0.01612 percent of new text begin estimated new text end market value 299.11of all taxable property in the county as last finally equalized before the issuance of the new 299.12series. When the tax levy authorized in this section is collected it shall be appropriated 299.13and credited to a debt service fund for the bonds in amounts required each year in lieu of a 299.14countywide tax levy for the debt service fund under section 475.61. 299.15    Sec. 57. Minnesota Statutes 2012, section 383B.73, subdivision 1, is amended to read: 299.16    Subdivision 1. Levy. To provide funds for the purposes of the Three Rivers Park 299.17District as set forth in its annual budget, in lieu of the levies authorized by any other 299.18special law for such purposes, the Board of Park District Commissioners may levy taxes 299.19on all the taxable property in the county and park district at a rate not exceeding 0.03224 299.20percent of new text begin estimated new text end market value. Notwithstanding section 398.16, on or before October 299.211 of each year, after public hearing, the Board of Park District Commissioners shall adopt 299.22a budget for the ensuing year and shall determine the total amount necessary to be raised 299.23from ad valorem tax levies to meet its budget. The Board of Park District Commissioners 299.24shall submit the budget to the county board. The county board may veto or modify an item 299.25contained in the budget. If the county board determines to veto or to modify an item in the 299.26budget, it must, within 15 days after the budget was submitted by the district board, state 299.27in writing the specific reasons for its objection to the item vetoed or the reason for the 299.28modification. The Park District Board, after consideration of the county board's objections 299.29and proposed modifications, may reapprove a vetoed item or the original version of an item 299.30with respect to which a modification has been proposed, by a two-thirds majority. If the 299.31district board does not reapprove a vetoed item, the item shall be deleted from the budget. 299.32If the district board does not reapprove the original version of a modified item, the item 299.33shall be included in the budget as modified by the county board. After adoption of the final 299.34budget and no later than October 1, the superintendent of the park district shall certify to the 299.35office of the Hennepin County director of tax and public records exercising the functions 300.1of the county auditor the total amount to be raised from ad valorem tax levies to meet its 300.2budget for the ensuing year. The director of tax and public records shall add the amount of 300.3any levy certified by the district to other tax levies on the property of the county within the 300.4district for collection by the director of tax and public records with other taxes. When 300.5collected, the director shall make settlement of such taxes with the district in the same 300.6manner as other taxes are distributed to the other political subdivisions in Hennepin County. 300.7    Sec. 58. Minnesota Statutes 2012, section 383E.20, is amended to read: 300.8383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS. 300.9    The Anoka County Board may, by resolution adopted by a four-sevenths vote, issue 300.10and sell general obligation bonds of the county in the manner provided in chapter 475 to 300.11acquire, better, and construct county library buildings. The bonds shall not be subject to the 300.12requirements of sections 475.57 to 475.59. The maturity years and amounts and interest 300.13rates of each series of bonds shall be fixed so that the maximum amount of principal and 300.14interest to become due in any year, on the bonds of that series and of all outstanding series 300.15issued by or for the purposes of libraries, shall not exceed an amount equal to .01 percent 300.16of the taxable new text begin estimated new text end market value of all taxable property in the county, excluding any 300.17taxable property taxed by any city for the support of any free public library. When the tax 300.18levy authorized in this section is collected, it shall be appropriated and credited to a debt 300.19service fund for the bonds. The tax levy for the debt service fund under section 475.61 300.20shall be reduced by the amount available or reasonably anticipated to be available in the 300.21fund to make payments otherwise payable from the levy pursuant to section 475.61. 300.22    Sec. 59. Minnesota Statutes 2012, section 383E.23, is amended to read: 300.23383E.23 LIBRARY TAX. 300.24The Anoka County Board may levy a tax of not more than .01 percent of the taxable 300.25 new text begin estimated new text end market value of taxable property located within the county excluding any 300.26taxable property taxed by any city for the support of any free public library, to acquire, 300.27better, and construct county library buildings and to pay principal and interest on bonds 300.28issued for that purpose. The tax shall be disregarded in the calculation of levies or limits 300.29on levies provided by section 373.40, or other law. 300.30    Sec. 60. Minnesota Statutes 2012, section 385.31, is amended to read: 300.31385.31 PAYMENT OF COUNTY ORDERS OR WARRANTS. 301.1When any order or warrant drawn on the treasurer is presented for payment, if there 301.2is money in the treasury for that purpose, the county treasurer shall redeem the same, and 301.3write across the entire face thereof the word "redeemed," the date of the redemption, and 301.4the treasurer's official signature. If there is not sufficient funds in the proper accounts to 301.5pay such orders they shall be numbered and registered in their order of presentation, 301.6and proper endorsement thereof shall be made on such orders and they shall be entitled 301.7to payment in like order. Such orders shall bear interest at not to exceed the rate of six 301.8percent per annum from such date of presentment. The treasurer, as soon as there is 301.9sufficient money in the treasury, shall appropriate and set apart a sum sufficient for the 301.10payment of the orders so presented and registered, and, if entitled to interest, issue to the 301.11original holder a notice that interest will cease in 30 days from the date of such notice; and, 301.12if orders thus entitled to priority of payment are not then presented, the next in order of 301.13registry may be paid until such orders are presented. No interest shall be paid on any order, 301.14except upon a warrant drawn by the county auditor for that purpose, giving the number 301.15and the date of the order on account of which the interest warrant is drawn. In any county 301.16in this state now or hereafter having a new text begin an estimated new text end market value of all taxable property, 301.17exclusive of money and credits, of not less than $1,033,000,000, the county treasurer, in 301.18order to save payment of interest on county warrants drawn upon a fund in which there 301.19shall be temporarily insufficient money in the treasury to redeem the same, may borrow 301.20temporarily from any other fund in the county treasury in which there is a sufficient balance 301.21to care for the needs of such fund and allow a temporary loan or transfer to any other fund, 301.22and may pay such warrants out of such funds. Any such money so transferred and used in 301.23redeeming such county warrants shall be returned to the fund from which drawn as soon 301.24as money shall come in to the credit of such fund on which any such warrant was drawn 301.25and paid as aforesaid. Any county operating on a cash basis may use a combined form of 301.26warrant or order and check, which, when signed by the chair of the county board and by 301.27the auditor, is an order or warrant for the payment of the claim, and, when countersigned 301.28by the county treasurer, is a check for the payment of the amount thereof. 301.29    Sec. 61. Minnesota Statutes 2012, section 394.36, subdivision 1, is amended to read: 301.30    Subdivision 1. Continuation of nonconformity; limitations. Except as provided in 301.31subdivision 2, 3, or 4, any nonconformity, including the lawful use or occupation of land 301.32or premises existing at the time of the adoption of an official control under this chapter, 301.33may be continued, although the use or occupation does not conform to the official control. 301.34If the nonconformity or occupancy is discontinued for a period of more than one year, or 301.35any nonconforming building or structure is destroyed by fire or other peril to the extent of 302.150 percent of its new text begin estimated new text end market value, any subsequent use or occupancy of the land or 302.2premises shall be a conforming use or occupancy. 302.3    Sec. 62. Minnesota Statutes 2012, section 398A.04, subdivision 8, is amended to read: 302.4    Subd. 8. Taxation. Before deciding to exercise the power to tax, the authority shall 302.5give six weeks' published notice in all municipalities in the region. If a number of voters 302.6in the region equal to five percent of those who voted for candidates for governor at the 302.7last gubernatorial election present a petition within nine weeks of the first published notice 302.8to the secretary of state requesting that the matter be submitted to popular vote, it shall be 302.9submitted at the next general election. The question prepared shall be: 302.10"Shall the regional rail authority have the power to impose a property tax? 302.11 Yes ..... 302.12 No ..... " 302.13If a majority of those voting on the question approve or if no petition is presented 302.14within the prescribed time the authority may levy a tax at any annual rate not exceeding 302.150.04835 percent of new text begin estimated new text end market value of all taxable property situated within the 302.16municipality or municipalities named in its organization resolution. Its recording officer 302.17shall file, on or before September 15, in the office of the county auditor of each county 302.18in which territory under the jurisdiction of the authority is located a certified copy of the 302.19board of commissioners' resolution levying the tax, and each county auditor shall assess 302.20and extend upon the tax rolls of each municipality named in the organization resolution the 302.21portion of the tax that bears the same ratio to the whole amount that the net tax capacity of 302.22taxable property in that municipality bears to the net tax capacity of taxable property in 302.23all municipalities named in the organization resolution. Collections of the tax shall be 302.24remitted by each county treasurer to the treasurer of the authority. For taxes levied in 1991, 302.25the amount levied for light rail transit purposes under this subdivision shall not exceed 75 302.26percent of the amount levied in 1990 for light rail transit purposes under this subdivision. 302.27    Sec. 63. Minnesota Statutes 2012, section 401.05, subdivision 3, is amended to read: 302.28    Subd. 3. Leasing. (a) A county or joint powers board of a group of counties 302.29which acquires or constructs and equips or improves facilities under this chapter may, 302.30with the approval of the board of county commissioners of each county, enter into a 302.31lease agreement with a city situated within any of the counties, or a county housing and 302.32redevelopment authority established under chapter 469 or any special law. Under the lease 302.33agreement, the city or county housing and redevelopment authority shall: 303.1(1) construct or acquire and equip or improve a facility in accordance with plans 303.2prepared by or at the request of a county or joint powers board of the group of counties 303.3and approved by the commissioner of corrections; and 303.4(2) finance the facility by the issuance of revenue bonds. 303.5(b) The county or joint powers board of a group of counties may lease the facility 303.6site, improvements, and equipment for a term upon rental sufficient to produce revenue 303.7for the prompt payment of the revenue bonds and all interest accruing on them. Upon 303.8completion of payment, the lessee shall acquire title. The real and personal property 303.9acquired for the facility constitutes a project and the lease agreement constitutes a revenue 303.10agreement as provided in sections 469.152 to 469.165. All proceedings by the city or 303.11county housing and redevelopment authority and the county or joint powers board shall be 303.12as provided in sections 469.152 to 469.165, with the following adjustments: 303.13(1) no tax may be imposed upon the property; 303.14(2) the approval of the project by the commissioner of employment and economic 303.15development is not required; 303.16(3) the Department of Corrections shall be furnished and shall record information 303.17concerning each project as it may prescribe, in lieu of reports required on other projects to 303.18the commissioner of employment and economic development; 303.19(4) the rentals required to be paid under the lease agreement shall not exceed in any 303.20year one-tenth of one percent of the new text begin estimated new text end market value of property within the county 303.21or group of counties as last equalized before the execution of the lease agreement; 303.22(5) the county or group of counties shall provide for payment of all rentals due 303.23during the term of the lease agreement in the manner required in subdivision 4; 303.24(6) no mortgage on the facilities shall be granted for the security of the bonds, but 303.25compliance with clause (5) may be enforced as a nondiscretionary duty of the county 303.26or group of counties; and 303.27(7) the county or the joint powers board of the group of counties may sublease any 303.28part of the facilities for purposes consistent with their maintenance and operation. 303.29    Sec. 64. Minnesota Statutes 2012, section 410.32, is amended to read: 303.30410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT. 303.31    (a) Notwithstanding any contrary provision of other law or charter, a home rule 303.32charter city may, by resolution and without public referendum, issue capital notes subject 303.33to the city debt limit to purchase capital equipment. 303.34    (b) For purposes of this section, "capital equipment" means: 304.1    (1) public safety equipment, ambulance and other medical equipment, road 304.2construction and maintenance equipment, and other capital equipment; and 304.3    (2) computer hardware and software, whether bundled with machinery or equipment 304.4or unbundled. 304.5    (c) The equipment or software must have an expected useful life at least as long 304.6as the term of the notes. 304.7    (d) The notes shall be payable in not more than ten years and be issued on terms 304.8and in the manner the city determines. The total principal amount of the capital notes 304.9issued in a fiscal year shall not exceed 0.03 percent of the new text begin estimated new text end market value of 304.10taxable property in the city for that year. 304.11    (e) A tax levy shall be made for the payment of the principal and interest on the 304.12notes, in accordance with section 475.61, as in the case of bonds. 304.13    (f) Notes issued under this section shall require an affirmative vote of two-thirds of 304.14the governing body of the city. 304.15    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter 304.16city may also issue capital notes subject to its debt limit in the manner and subject to the 304.17limitations applicable to statutory cities pursuant to section 412.301. 304.18    Sec. 65. Minnesota Statutes 2012, section 412.221, subdivision 2, is amended to read: 304.19    Subd. 2. Contracts. The council shall have power to make such contracts as may 304.20be deemed necessary or desirable to make effective any power possessed by the council. 304.21The city may purchase personal property through a conditional sales contract and real 304.22property through a contract for deed under which contracts the seller is confined to the 304.23remedy of recovery of the property in case of nonpayment of all or part of the purchase 304.24price, which shall be payable over a period of not to exceed five years. When the contract 304.25price of property to be purchased by contract for deed or conditional sales contract 304.26exceeds 0.24177 percent of the new text begin estimated new text end market value of the city, the city may not enter 304.27into such a contract for at least ten days after publication in the official newspaper of a 304.28council resolution determining to purchase property by such a contract; and, if before the 304.29end of that time a petition asking for an election on the proposition signed by voters equal 304.30to ten percent of the number of voters at the last regular city election is filed with the clerk, 304.31the city may not enter into such a contract until the proposition has been approved by a 304.32majority of the votes cast on the question at a regular or special election. 304.33    Sec. 66. Minnesota Statutes 2012, section 412.301, is amended to read: 304.34412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT. 305.1    (a) The council may issue certificates of indebtedness or capital notes subject to the 305.2city debt limits to purchase capital equipment. 305.3    (b) For purposes of this section, "capital equipment" means: 305.4    (1) public safety equipment, ambulance and other medical equipment, road 305.5construction and maintenance equipment, and other capital equipment; and 305.6    (2) computer hardware and software, whether bundled with machinery or equipment 305.7or unbundled. 305.8    (c) The equipment or software must have an expected useful life at least as long as 305.9the terms of the certificates or notes. 305.10    (d) Such certificates or notes shall be payable in not more than ten years and shall be 305.11issued on such terms and in such manner as the council may determine. 305.12    (e) If the amount of the certificates or notes to be issued to finance any such purchase 305.13exceeds 0.25 percent of the new text begin estimated new text end market value of taxable property in the city, they 305.14shall not be issued for at least ten days after publication in the official newspaper of 305.15a council resolution determining to issue them; and if before the end of that time, a 305.16petition asking for an election on the proposition signed by voters equal to ten percent 305.17of the number of voters at the last regular municipal election is filed with the clerk, such 305.18certificates or notes shall not be issued until the proposition of their issuance has been 305.19approved by a majority of the votes cast on the question at a regular or special election. 305.20    (f) A tax levy shall be made for the payment of the principal and interest on such 305.21certificates or notes, in accordance with section 475.61, as in the case of bonds. 305.22    Sec. 67. Minnesota Statutes 2012, section 428A.02, subdivision 1, is amended to read: 305.23    Subdivision 1. Ordinance. The governing body of a city may adopt an ordinance 305.24establishing a special service district. Only property that is classified under section 273.13 305.25and used for commercial, industrial, or public utility purposes, or is vacant land zoned or 305.26designated on a land use plan for commercial or industrial use and located in the special 305.27service district, may be subject to the charges imposed by the city on the special service 305.28district. Other types of property may be included within the boundaries of the special 305.29service district but are not subject to the levies or charges imposed by the city on the 305.30special service district. If 50 percent or more of the new text begin estimated new text end market value of a parcel of 305.31property is classified under section 273.13 as commercial, industrial, or vacant land zoned 305.32or designated on a land use plan for commercial or industrial use, or public utility for the 305.33current assessment year, then the entire new text begin taxable new text end market value of the property is subject to a 305.34service charge based on net tax capacity for purposes of sections 428A.01 to 428A.10. 305.35The ordinance shall describe with particularity the area within the city to be included in 306.1the district and the special services to be furnished in the district. The ordinance may not 306.2be adopted until after a public hearing has been held on the question. Notice of the hearing 306.3shall include the time and place of hearing, a map showing the boundaries of the proposed 306.4district, and a statement that all persons owning property in the proposed district that 306.5would be subject to a service charge will be given opportunity to be heard at the hearing. 306.6Within 30 days after adoption of the ordinance under this subdivision, the governing body 306.7shall send a copy of the ordinance to the commissioner of revenue. 306.8    Sec. 68. Minnesota Statutes 2012, section 430.102, subdivision 2, is amended to read: 306.9    Subd. 2. Council approval; special tax levy limitation. The council shall receive 306.10and consider the estimate required in subdivision 1 and the items of cost after notice and 306.11hearing before it or its appropriate committee as it considers necessary or expedient, and 306.12shall approve the estimate, with necessary amendments. The amounts of each item of cost 306.13estimated are then appropriated to operate, maintain, and improve the pedestrian mall 306.14during the next fiscal year. The amount of the special tax to be charged under subdivision 306.151, clause (3), must not, however, exceed 0.12089 percent of new text begin estimated new text end market value of 306.16taxable property in the district. The council shall make any necessary adjustment in costs of 306.17operating and maintaining the district to keep the amount of the tax within this limitation. 306.18    Sec. 69. Minnesota Statutes 2012, section 447.10, is amended to read: 306.19447.10 TAX LEVY FOR OPERATING AND MAINTAINING HOSPITAL. 306.20The governing body of a city of the first class owning a hospital may annually levy 306.21a tax to operate and maintain the hospital. The tax must not exceed 0.00806 percent of 306.22taxable new text begin estimated new text end market value. 306.23    Sec. 70. Minnesota Statutes 2012, section 450.19, is amended to read: 306.24450.19 TOURIST CAMPING GROUNDS. 306.25A home rule charter or statutory city or town may establish and maintain public 306.26tourist camping grounds. The governing body thereof may acquire by lease, purchase, or 306.27gift, suitable lands located either within or without the corporate limits for use as public 306.28tourist camping grounds and provide for the equipment, operation, and maintenance 306.29of the same. The amount that may be expended for the maintenance, improvement, or 306.30operation of tourist camping grounds shall not exceed, in any year, a sum equal to 0.00806 306.31percent of taxable new text begin estimated new text end market value. 307.1    Sec. 71. Minnesota Statutes 2012, section 450.25, is amended to read: 307.2450.25 MUSEUM, GALLERY, OR SCHOOL OF ARTS OR CRAFTS; TAX 307.3LEVY. 307.4After the acquisition of any museum, gallery, or school of arts or crafts, the board 307.5of park commissioners of the city in which it is located shall cause to be included in the 307.6annual tax levy upon all the taxable property of the county in which the museum, gallery, 307.7or school of arts or crafts is located, a tax of 0.00846 percent of new text begin estimated new text end market value. 307.8The board shall certify the levy to the county auditor and it shall be added to, and collected 307.9with and as part of, the general, real, and personal property taxes, with like penalties and 307.10interest, in case of nonpayment and default, and all provisions of law in respect to the 307.11levy, collection, and enforcement of other taxes shall, so far as applicable, be followed in 307.12respect of these taxes. All of these taxes, penalties, and interest, when collected, shall be 307.13paid to the city treasurer of the city in which is located the museum, gallery, or school 307.14of arts or crafts and credited to a fund to be known as the park museum fund, and shall 307.15be used only for the purposes specified in sections 450.23 to 450.25. Any part of the 307.16proceeds of the levy not expended for the purposes specified in section 450.24 may be 307.17used for the erection of new buildings for the same purposes. 307.18    Sec. 72. Minnesota Statutes 2012, section 458A.10, is amended to read: 307.19458A.10 PROPERTY TAX. 307.20The commission shall annually levy a tax not to exceed 0.12089 percent of new text begin estimated new text end 307.21market value on all the taxable property in the transit area at a rate sufficient to produce 307.22an amount necessary for the purposes of sections 458A.01 to 458A.15, other than the 307.23payment of principal and interest due on any revenue bonds issued pursuant to section 307.24458A.05 . Property taxes levied under this section shall be certified by the commission to 307.25the county auditors of the transit area, extended, assessed, and collected in the manner 307.26provided by law for the property taxes levied by the governing bodies of cities. The 307.27proceeds of the taxes levied under this section shall be remitted by the respective county 307.28treasurers to the treasurer of the commission, who shall credit the same to the funds of 307.29the commission for use for the purposes of sections 458A.01 to 458A.15 subject to any 307.30applicable pledges or limitations on account of tax anticipation certificates or other 307.31specific purposes. At any time after making a tax levy under this section and certifying 307.32it to the county auditors, the commission may issue general obligation certificates of 307.33indebtedness in anticipation of the collection of the taxes as provided by section 412.261. 307.34    Sec. 73. Minnesota Statutes 2012, section 458A.31, subdivision 1, is amended to read: 308.1    Subdivision 1. Levy limit. Notwithstanding anything to the contrary contained in 308.2the charter of the city of Duluth, any ordinance thereof, or any statute applicable thereto, 308.3limiting the amount levied in any one year for general or special purposes, the city council 308.4of the city of Duluth shall each year levy a tax in an amount not to exceed 0.07253 308.5percent of taxable new text begin estimated new text end market value, by ordinance. An ordinance fixing the levy 308.6shall take effect immediately upon its passage and approval. The proceeds of the levy 308.7shall be paid into the city treasury and deposited in the operating fund provided for in 308.8section 458A.24, subdivision 3. 308.9    Sec. 74. Minnesota Statutes 2012, section 465.04, is amended to read: 308.10465.04 ACCEPTANCE OF GIFTS. 308.11Cities of the second, third, or fourth class, having at any time a new text begin an estimated new text end 308.12 market value of not more than $41,000,000, exclusive of money and credits, as officially 308.13equalized by the commissioner of revenue, either under home rule charter or under the 308.14laws of this state, in addition to all other powers possessed by them, hereby are authorized 308.15and empowered to receive and accept gifts and donations for the use and benefit of 308.16such cities and the inhabitants thereof upon terms and conditions to be approved by the 308.17governing bodies of such cities; and such cities are authorized to comply with and perform 308.18such terms and conditions, which may include payment to the donor or donors of interest 308.19on the value of the gift at not exceeding five percent per annum payable annually or 308.20semiannually, during the remainder of the natural life or lives of such donor or donors. 308.21    Sec. 75. Minnesota Statutes 2012, section 469.033, subdivision 6, is amended to read: 308.22    Subd. 6. Operation area as taxing district, special tax. All of the territory included 308.23within the area of operation of any authority shall constitute a taxing district for the 308.24purpose of levying and collecting special benefit taxes as provided in this subdivision. All 308.25of the taxable property, both real and personal, within that taxing district shall be deemed 308.26to be benefited by projects to the extent of the special taxes levied under this subdivision. 308.27Subject to the consent by resolution of the governing body of the city in and for which 308.28it was created, an authority may levy a tax upon all taxable property within that taxing 308.29district. The tax shall be extended, spread, and included with and as a part of the general 308.30taxes for state, county, and municipal purposes by the county auditor, to be collected and 308.31enforced therewith, together with the penalty, interest, and costs. As the tax, including any 308.32penalties, interest, and costs, is collected by the county treasurer it shall be accumulated 308.33and kept in a separate fund to be known as the "housing and redevelopment project fund." 308.34The money in the fund shall be turned over to the authority at the same time and in the same 309.1manner that the tax collections for the city are turned over to the city, and shall be expended 309.2only for the purposes of sections 469.001 to 469.047. It shall be paid out upon vouchers 309.3signed by the chair of the authority or an authorized representative. The amount of the 309.4levy shall be an amount approved by the governing body of the city, but shall not exceed 309.50.0185 percent of taxable new text begin estimated new text end market value. The authority shall each year formulate 309.6and file a budget in accordance with the budget procedure of the city in the same manner as 309.7required of executive departments of the city or, if no budgets are required to be filed, by 309.8August 1. The amount of the tax levy for the following year shall be based on that budget. 309.9    Sec. 76. Minnesota Statutes 2012, section 469.034, subdivision 2, is amended to read: 309.10    Subd. 2. General obligation revenue bonds. (a) An authority may pledge the 309.11general obligation of the general jurisdiction governmental unit as additional security for 309.12bonds payable from income or revenues of the project or the authority. The authority 309.13must find that the pledged revenues will equal or exceed 110 percent of the principal and 309.14interest due on the bonds for each year. The proceeds of the bonds must be used for a 309.15qualified housing development project or projects. The obligations must be issued and 309.16sold in the manner and following the procedures provided by chapter 475, except the 309.17obligations are not subject to approval by the electors, and the maturities may extend to 309.18not more than 35 years for obligations sold to finance housing for the elderly and 40 years 309.19for other obligations issued under this subdivision. The authority is the municipality for 309.20purposes of chapter 475. 309.21(b) The principal amount of the issue must be approved by the governing body of 309.22the general jurisdiction governmental unit whose general obligation is pledged. Public 309.23hearings must be held on issuance of the obligations by both the authority and the general 309.24jurisdiction governmental unit. The hearings must be held at least 15 days, but not more 309.25than 120 days, before the sale of the obligations. 309.26(c) The maximum amount of general obligation bonds that may be issued and 309.27outstanding under this section equals the greater of (1) one-half of one percent of the 309.28taxable new text begin estimated new text end market value of the general jurisdiction governmental unit whose 309.29general obligation is pledged, or (2) $3,000,000. In the case of county or multicounty 309.30general obligation bonds, the outstanding general obligation bonds of all cities in the 309.31county or counties issued under this subdivision must be added in calculating the limit 309.32under clause (1). 309.33(d) "General jurisdiction governmental unit" means the city in which the housing 309.34development project is located. In the case of a county or multicounty authority, the 309.35county or counties may act as the general jurisdiction governmental unit. In the case of 310.1a multicounty authority, the pledge of the general obligation is a pledge of a tax on the 310.2taxable property in each of the counties. 310.3(e) "Qualified housing development project" means a housing development project 310.4providing housing either for the elderly or for individuals and families with incomes not 310.5greater than 80 percent of the median family income as estimated by the United States 310.6Department of Housing and Urban Development for the standard metropolitan statistical 310.7area or the nonmetropolitan county in which the project is located. The project must be 310.8owned for the term of the bonds either by the authority or by a limited partnership or other 310.9entity in which the authority or another entity under the sole control of the authority is 310.10the sole general partner and the partnership or other entity must receive (1) an allocation 310.11from the Department of Management and Budget or an entitlement issuer of tax-exempt 310.12bonding authority for the project and a preliminary determination by the Minnesota 310.13Housing Finance Agency or the applicable suballocator of tax credits that the project 310.14will qualify for four percent low-income housing tax credits or (2) a reservation of nine 310.15percent low-income housing tax credits from the Minnesota Housing Finance Agency or a 310.16suballocator of tax credits for the project. A qualified housing development project may 310.17admit nonelderly individuals and families with higher incomes if: 310.18(1) three years have passed since initial occupancy; 310.19(2) the authority finds the project is experiencing unanticipated vacancies resulting in 310.20insufficient revenues, because of changes in population or other unforeseen circumstances 310.21that occurred after the initial finding of adequate revenues; and 310.22(3) the authority finds a tax levy or payment from general assets of the general 310.23jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher 310.24income individuals or families are not admitted. 310.25(f) The authority may issue bonds to refund bonds issued under this subdivision in 310.26accordance with section 475.67. The finding of the adequacy of pledged revenues required 310.27by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the 310.28issuance of refunding bonds. This paragraph applies to refunding bonds issued on and 310.29after July 1, 1992. 310.30    Sec. 77. Minnesota Statutes 2012, section 469.053, subdivision 4, is amended to read: 310.31    Subd. 4. Mandatory city levy. A city shall, at the request of the port authority, levy 310.32a tax in any year for the benefit of the port authority. The tax must not exceed 0.01813 310.33percent of taxable new text begin estimated new text end market value. The amount levied must be paid by the city 310.34treasurer to the treasurer of the port authority, to be spent by the authority. 311.1    Sec. 78. Minnesota Statutes 2012, section 469.053, subdivision 4a, is amended to read: 311.2    Subd. 4a. Seaway port authority levy. A levy made under this subdivision shall 311.3replace the mandatory city levy under subdivision 4. A seaway port authority is a special 311.4taxing district under section 275.066 and may levy a tax in any year for the benefit of the 311.5seaway port authority. The tax must not exceed 0.01813 percent of taxable new text begin estimated new text end 311.6 market value. The county auditor shall distribute the proceeds of the property tax levy to 311.7the seaway port authority. 311.8    Sec. 79. Minnesota Statutes 2012, section 469.053, subdivision 6, is amended to read: 311.9    Subd. 6. Discretionary city levy. Upon request of a port authority, the port 311.10authority's city may levy a tax to be spent by and for its port authority. The tax must 311.11enable the port authority to carry out efficiently and in the public interest sections 469.048 311.12to 469.068 to create and develop industrial development districts. The levy must not be 311.13more than 0.00282 percent of taxable new text begin estimated new text end market value. The county treasurer shall 311.14pay the proceeds of the tax to the port authority treasurer. The money may be spent by 311.15the authority in performance of its duties to create and develop industrial development 311.16districts. In spending the money the authority must judge what best serves the public 311.17interest. The levy in this subdivision is in addition to the levy in subdivision 4. 311.18    Sec. 80. Minnesota Statutes 2012, section 469.107, subdivision 1, is amended to read: 311.19    Subdivision 1. City tax levy. A city may, at the request of the authority, levy a tax in 311.20any year for the benefit of the authority. The tax must be not more than 0.01813 percent of 311.21taxable new text begin estimated new text end market value. The amount levied must be paid by the city treasurer to 311.22the treasurer of the authority, to be spent by the authority. 311.23    Sec. 81. Minnesota Statutes 2012, section 469.180, subdivision 2, is amended to read: 311.24    Subd. 2. Tax levies. Notwithstanding any law, the county board of any county may 311.25appropriate from the general revenue fund a sum not to exceed a county levy of 0.00080 311.26percent of taxable new text begin estimated new text end market value to carry out the purposes of this section. 311.27    Sec. 82. Minnesota Statutes 2012, section 469.187, is amended to read: 311.28469.187 FIRST CLASS CITY SPENDING FOR PUBLICITY; PUBLICITY 311.29BOARD. 311.30Any city of the first class may expend money for city publicity purposes. The city may 311.31levy a tax, not exceeding 0.00080 percent of taxable new text begin estimated new text end market value. The proceeds 311.32of the levy shall be expended in the manner and for the city publicity purposes the council 312.1directs. The council may establish and provide for a publicity board or bureau to administer 312.2the fund, subject to the conditions and limitations the council prescribes by ordinance. 312.3    Sec. 83. Minnesota Statutes 2012, section 469.206, is amended to read: 312.4469.206 HAZARDOUS PROPERTY PENALTY. 312.5A city may assess a penalty up to one percent of the new text begin estimated new text end market value of 312.6real property, including any building located within the city that the city determines to 312.7be hazardous as defined in section 463.15, subdivision 3. The city shall send a written 312.8notice to the address to which the property tax statement is sent at least 90 days before it 312.9may assess the penalty. If the owner of the property has not paid the penalty or fixed the 312.10property within 90 days after receiving notice of the penalty, the penalty is considered 312.11delinquent and is increased by 25 percent each 60 days the penalty is not paid and the 312.12property remains hazardous. For the purposes of this section, a penalty that is delinquent 312.13is considered a delinquent property tax and subject to chapters 279, 280, and 281, in the 312.14same manner as delinquent property taxes. 312.15    Sec. 84. Minnesota Statutes 2012, section 471.24, is amended to read: 312.16471.24 TOWNS, STATUTORY CITIES; JOINT MAINTENANCE OF 312.17CEMETERY. 312.18Where a statutory city or town owns and maintains an established cemetery or burial 312.19ground, either within or without the municipal limits, the statutory city or town may, by 312.20mutual agreement with contiguous statutory cities and towns, each having a new text begin an estimated new text end 312.21 market value of not less than $2,000,000, join together in the maintenance of such public 312.22cemetery or burial ground for the use of the inhabitants of each of such municipalities; and 312.23each such municipality is hereby authorized, by action of its council or governing body, 312.24to levy a tax or make an appropriation for the annual support and maintenance of such 312.25cemetery or burial ground; provided, the amount thus appropriated by each municipality 312.26shall not exceed a total of $10,000 in any one year. 312.27    Sec. 85. Minnesota Statutes 2012, section 471.571, subdivision 1, is amended to read: 312.28    Subdivision 1. Application. This section applies to each city in which the net tax 312.29capacity of real and personal property consists in part of iron ore or lands containing 312.30taconite or semitaconite and in which the total taxable new text begin estimated new text end market value of real 312.31and personal property exceeds $2,500,000. 312.32    Sec. 86. Minnesota Statutes 2012, section 471.571, subdivision 2, is amended to read: 313.1    Subd. 2. Creation of fund, tax levy. The governing body of the city may create a 313.2permanent improvement and replacement fund to be maintained by an annual tax levy. 313.3The governing body may levy a tax in excess of any charter limitation for the support of 313.4the permanent improvement and replacement fund, but not exceeding the following: 313.5(a) in cities having a population of not more than 500 inhabitants, the lesser of $20 313.6per capita or 0.08059 percent of taxable new text begin estimated new text end market value; 313.7(b) in cities having a population of more than 500 and less than 2500 new text begin 2,500 new text end , the 313.8greater of $12.50 per capita or $10,000 but not exceeding 0.08059 percent of taxable 313.9 new text begin estimated new text end market value; 313.10(c) in cities having a population of more than 2500 new text begin 2,500 or more new text end inhabitants, 313.11the greater of $10 per capita or $31,500 but not exceeding 0.08059 percent of taxable 313.12 new text begin estimated new text end market value. 313.13    Sec. 87. Minnesota Statutes 2012, section 471.73, is amended to read: 313.14471.73 ACCEPTANCE OF PROVISIONS. 313.15In the case of any city within the class specified in new text begin section new text end 471.72 having a new text begin an new text end 313.16 new text begin estimated new text end market value, as defined in section , in excess of $37,000,000; and in the 313.17case of any statutory city within such class having a new text begin an estimated new text end market value, as defined 313.18in section , of less than $5,000,000; and in the case of any statutory city within such 313.19class which is governed by Laws 1933, chapter 211, or Laws 1937, chapter 356; and in 313.20the case of any statutory city within such class which is governed by Laws 1929, chapter 313.21208, and has a new text begin an estimated new text end market value of less than $83,000,000; and in the case of 313.22any school district within such class having a new text begin an estimated new text end market value, as defined in 313.23section , of more than $54,000,000; and in the case of all towns within said class; 313.24sections 471.71 to 471.83 apply only if the governing body of the city or statutory city, the 313.25board of the school district, or the town board of the town shall have adopted a resolution 313.26determining to issue bonds under the provisions of sections 471.71 to 471.83 or to go 313.27upon a cash basis in accordance with the provisions thereof. 313.28    Sec. 88. Minnesota Statutes 2012, section 473.325, subdivision 2, is amended to read: 313.29    Subd. 2. Chapter 475 applies; exceptions. The Metropolitan Council shall sell and 313.30issue the bonds in the manner provided in chapter 475, and shall have the same powers 313.31and duties as a municipality issuing bonds under that law, except that the approval of a 313.32majority of the electors shall not be required and the net debt limitations shall not apply. 313.33The terms of each series of bonds shall be fixed so that the amount of principal and interest 313.34on all outstanding and undischarged bonds, together with the bonds proposed to be issued, 314.1due in any year shall not exceed 0.01209 percent of new text begin estimated new text end market value of all taxable 314.2property in the metropolitan area as last finally equalized prior to a proposed issue. The 314.3bonds shall be secured in accordance with section 475.61, subdivision 1, and any taxes 314.4required for their payment shall be levied by the council, shall not affect the amount or rate 314.5of taxes which may be levied by the council for other purposes, shall be spread against all 314.6taxable property in the metropolitan area and shall not be subject to limitation as to rate or 314.7amount. Any taxes certified by the council to the county auditors for collection shall be 314.8reduced by the amount received by the council from the commissioner of management and 314.9budget or the federal government for the purpose of paying the principal and interest on 314.10bonds to which the levy relates. The council shall certify the fact and amount of all money 314.11so received to the county auditors, and the auditors shall reduce the levies previously made 314.12for the bonds in the manner and to the extent provided in section 475.61, subdivision 3. 314.13    Sec. 89. Minnesota Statutes 2012, section 473.629, is amended to read: 314.14473.629 VALUE OF PROPERTY FOR BOND ISSUES BY SCHOOL 314.15DISTRICTS. 314.16As to any lands to be detached from any school district under the provisions hereof 314.17 new text begin section 473.625 new text end , notwithstanding such prospective new text begin the new text end detachment, the new text begin estimated market new text end 314.18value of such new text begin the detached new text end lands and the net tax capacity of taxable properties now located 314.19therein or thereon shall be and new text begin on the lands on the date of the detachment new text end constitute 314.20from and after the date of the enactment hereof a part of the new text begin estimated market new text end value of 314.21properties upon the basis of which such new text begin used to calculate the net debt limit of the new text end school 314.22district may issue its bonds, new text begin . new text end The value of such new text begin the new text end lands for such purpose to be new text begin and other new text end 314.23 new text begin taxable properties for purposes of the school district's net debt limit are new text end 33-1/3 percent of 314.24the new text begin estimated new text end market value thereof as determined and certified by said new text begin the new text end assessor to said 314.25 new text begin the new text end school district, and it shall be the duty of such new text begin the new text end assessor annually on or before the 314.26tenth day of October from and after the passage hereof, to so new text begin of each year, shall new text end determine 314.27and certify new text begin that value new text end ; provided, however, that the value of such new text begin the new text end detached lands and 314.28such taxable properties shall never exceed 20 percent of the new text begin estimated market new text end value of 314.29all properties constituting and making up the basis aforesaid new text begin used to calculate the net new text end 314.30 new text begin debt limit of the school district new text end . 314.31    Sec. 90. Minnesota Statutes 2012, section 473.661, subdivision 3, is amended to read: 314.32    Subd. 3. Levy limit. In any budget certified by the commissioners under this section, 314.33the amount included for operation and maintenance shall not exceed an amount which, 314.34when extended against the property taxable therefor under section 473.621, subdivision 5, 315.1will require a levy at a rate of 0.00806 percent of new text begin estimated new text end market value. Taxes levied by 315.2the corporation shall not affect the amount or rate of taxes which may be levied by any other 315.3local government unit within the metropolitan area under the provisions of any charter. 315.4    Sec. 91. Minnesota Statutes 2012, section 473.667, subdivision 9, is amended to read: 315.5    Subd. 9. Additional taxes. Nothing herein shall prevent the commission from 315.6levying a tax not to exceed 0.00121 percent of new text begin estimated new text end market value on taxable property 315.7within its taxing jurisdiction, in addition to any levies found necessary for the debt 315.8service fund authorized by section 473.671. Nothing herein shall prevent the levy and 315.9appropriation for purposes of the commission of any other tax on property or on any 315.10income, transaction, or privilege, when and if authorized by law. All collections of any 315.11taxes so levied shall be included in the revenues appropriated for the purposes referred 315.12to in this section, unless otherwise provided in the law authorizing the levies; but no 315.13covenant as to the continuance or as to the rate and amount of any such levy shall be made 315.14with the holders of the commission's bonds unless specifically authorized by law. 315.15    Sec. 92. Minnesota Statutes 2012, section 473.671, is amended to read: 315.16473.671 LIMIT OF TAX LEVY. 315.17The taxes levied against the property of the metropolitan area in any one year shall 315.18not exceed 0.00806 percent of taxable new text begin estimated new text end market value, exclusive of taxes levied 315.19to pay the principal or interest on any bonds or indebtedness of the city issued under 315.20Laws 1943, chapter 500, and exclusive of any taxes levied to pay the share of the city for 315.21payments on bonded indebtedness of the corporation provided for in Laws 1943, chapter 315.22500. The levy of taxes authorized in Laws 1943, chapter 500, shall be in addition to the 315.23maximum rate allowed to be levied to defray the cost of government under the provisions 315.24of the charter of any city affected by Laws 1943, chapter 500. 315.25    Sec. 93. Minnesota Statutes 2012, section 473.711, subdivision 2a, is amended to read: 315.26    Subd. 2a. Tax levy. (a) The commission may levy a tax on all taxable property in the 315.27district as defined in section 473.702 to provide funds for the purposes of sections 473.701 315.28to 473.716. The tax shall not exceed the property tax levy limitation determined in this 315.29subdivision. A participating county may agree to levy an additional tax to be used by the 315.30commission for the purposes of sections 473.701 to 473.716 but the sum of the county's and 315.31commission's taxes may not exceed the county's proportionate share of the property tax levy 315.32limitation determined under this subdivision based on the ratio of its total net tax capacity 315.33to the total net tax capacity of the entire district as adjusted by section 270.12, subdivision 316.13 . The auditor of each county in the district shall add the amount of the levy made by the 316.2district to other taxes of the county for collection by the county treasurer with other taxes. 316.3When collected, the county treasurer shall make settlement of the tax with the district in 316.4the same manner as other taxes are distributed to political subdivisions. No county shall 316.5levy any tax for mosquito, disease vectoring tick, and black gnat (Simuliidae) control 316.6except under this section. The levy shall be in addition to other taxes authorized by law. 316.7(b) The property tax levied by the Metropolitan Mosquito Control Commission shall 316.8not exceed the product of (i) the commission's property tax levy limitation for the previous 316.9year determined under this subdivision multiplied by (ii) an index for market valuation 316.10changes equal to the total new text begin estimated new text end market valuation new text begin value new text end of all taxable property for the 316.11current tax payable year located within the district plus any area that has been added to the 316.12district since the previous year, divided by the total new text begin estimated new text end market valuation new text begin value new text end of all 316.13taxable property located within the district for the previous taxes payable year. 316.14(c) For the purpose of determining the commission's property tax levy limitation 316.15under this subdivision, "total market valuation" means the total market valuation of all 316.16taxable property within the district without valuation adjustments for fiscal disparities 316.17(chapter 473F), tax increment financing (sections to 469.179), and high voltage 316.18transmission lines (section 273.425). 316.19    Sec. 94. Minnesota Statutes 2012, section 473F.02, subdivision 12, is amended to read: 316.20    Subd. 12. new text begin Adjusted new text end market value. " new text begin Adjusted new text end market value" of real and personal 316.21property within a municipality means the assessor's estimated new text begin taxable new text end market value new text begin , new text end 316.22 new text begin as defined in section 272.03, new text end of all real and personal property, including the value of 316.23manufactured housing, within the municipality new text begin , adjusted for sales ratios in a manner new text end 316.24 new text begin similar to the adjustments made to city and town net tax capacities new text end . For purposes 316.25of sections to , the commissioner of revenue shall annually make 316.26determinations and reports with respect to each municipality which are comparable to 316.27those it makes for school districts under section 127A.48, subdivisions 1 to 6, in the same 316.28manner and at the same times as are prescribed by the subdivisions. The commissioner 316.29of revenue shall annually determine, for each municipality, information comparable to 316.30that required by section 475.53, subdivision 4, for school districts, as soon as practicable 316.31after it becomes available. The commissioner of revenue shall then compute the equalized 316.32market value of property within each municipality using the aggregate sales ratios from 316.33the Department of Revenue's sales ratio study. 316.34    Sec. 95. Minnesota Statutes 2012, section 473F.02, subdivision 14, is amended to read: 317.1    Subd. 14. Fiscal capacity. "Fiscal capacity" of a municipality means its valuation 317.2 new text begin adjusted market value new text end , determined as of January 2 of any year, divided by its population, 317.3determined as of a date in the same year. 317.4    Sec. 96. Minnesota Statutes 2012, section 473F.02, subdivision 15, is amended to read: 317.5    Subd. 15. Average fiscal capacity. "Average fiscal capacity" of municipalities 317.6means the sum of the valuations new text begin adjusted market values new text end of all municipalities, determined 317.7as of January 2 of any year, divided by the sum of their populations, determined as of 317.8a date in the same year. 317.9    Sec. 97. Minnesota Statutes 2012, section 473F.02, subdivision 23, is amended to read: 317.10    Subd. 23. Net tax capacity. "Net tax capacity" means the new text begin taxable new text end market value of 317.11real and personal property multiplied by its net tax capacity rates in section 273.13. 317.12    Sec. 98. Minnesota Statutes 2012, section 473F.08, subdivision 10, is amended to read: 317.13    Subd. 10. Adjustment of value or net tax capacity. For the purpose of computing 317.14the amount or rate of any salary, aid, tax, or debt authorized, required, or limited by any 317.15provision of any law or charter, where such authorization, requirement, or limitation 317.16is related in any manner to any value or valuation of taxable property within any 317.17governmental unit, such value or net tax capacity new text begin fiscal capacity under section 473F.02, new text end 317.18 new text begin subdivision 14, a municipality's taxable market value new text end shall be adjusted to reflect the 317.19adjustments new text begin reductions new text end to net tax capacity effected by subdivision 2, new text begin clause (a), new text end provided 317.20that: (1) in determining the new text begin taxable new text end market value of commercial-industrial property 317.21or any class thereof within a governmental unit for any purpose other than section 317.22 new text begin municipality new text end , (a) the reduction required by this subdivision shall be that amount 317.23which bears the same proportion to the amount subtracted from the governmental unit's 317.24 new text begin municipality's new text end net tax capacity pursuant to subdivision 2, clause (a), as the new text begin taxable new text end 317.25market value of commercial-industrial property, or such class thereof, located within the 317.26governmental unit new text begin municipality new text end bears to the net tax capacity of commercial-industrial 317.27property, or such class thereof, located within the governmental unit, and (b) the increase 317.28required by this subdivision shall be that amount which bears the same proportion to 317.29the amount added to the governmental unit's net tax capacity pursuant to subdivision 2, 317.30clause (b), as the market value of commercial-industrial property, or such class thereof, 317.31located within the governmental unit bears to the net tax capacity of commercial-industrial 317.32property, or such class thereof, located within the governmental unit; and (2) in determining 317.33the market value of real property within a municipality for purposes of section , 318.1the adjustment prescribed by clause (1)(a) hereof shall be made and that prescribed by 318.2clause (1)(b) hereof shall not be made new text begin municipality new text end . new text begin No adjustment shall be made to new text end 318.3 new text begin taxable market value for the increase in net tax capacity under subdivision 2, clause (b). new text end 318.4    Sec. 99. Minnesota Statutes 2012, section 475.521, subdivision 4, is amended to read: 318.5    Subd. 4. Limitations on amount. A municipality may not issue bonds under this 318.6section if the maximum amount of principal and interest to become due in any year on 318.7all the outstanding bonds issued under this section, including the bonds to be issued, 318.8will equal or exceed 0.16 percent of the taxable new text begin estimated new text end market value of property 318.9in the municipality. Calculation of the limit must be made using the taxable new text begin estimated new text end 318.10 market value for the taxes payable year in which the obligations are issued and sold. In 318.11the case of a municipality with a population of 2,500 or more, the bonds are subject to 318.12the net debt limits under section 475.53. In the case of a shared facility in which more 318.13than one municipality participates, upon compliance by each participating municipality 318.14with the requirements of subdivision 2, the limitations in this subdivision and the net debt 318.15represented by the bonds shall be allocated to each participating municipality in proportion 318.16to its required financial contribution to the financing of the shared facility, as set forth in 318.17the joint powers agreement relating to the shared facility. This section does not limit the 318.18authority to issue bonds under any other special or general law. 318.19    Sec. 100. Minnesota Statutes 2012, section 475.53, subdivision 1, is amended to read: 318.20    Subdivision 1. Generally. Except as otherwise provided in sections 475.51 to 318.21475.74 , no municipality, except a school district or a city of the first class, shall incur or be 318.22subject to a net debt in excess of three percent of the new text begin estimated new text end market value of taxable 318.23property in the municipality. 318.24    Sec. 101. Minnesota Statutes 2012, section 475.53, subdivision 3, is amended to read: 318.25    Subd. 3. Cities first class. Unless its charter permits a greater net debt a city of 318.26the first class may not incur a net debt in excess of two percent of the new text begin estimated new text end market 318.27value of all taxable property therein. If the charter of the city permits a net debt of the city 318.28in excess of two percent of its valuation, it may not incur a net debt in excess of 3-2/3 318.29percent of the new text begin estimated new text end market value of the taxable property therein. 318.30The county auditor, at the time of preparing the tax list of the city, shall compile a 318.31statement setting forth the total net tax capacity and the total new text begin estimated new text end market value of 318.32each class of taxable property in such city for such year. 319.1    Sec. 102. Minnesota Statutes 2012, section 475.53, subdivision 4, is amended to read: 319.2    Subd. 4. School districts. Except as otherwise provided by law, no school district 319.3shall be subject to a net debt in excess of 15 percent of the actual new text begin estimated new text end market value of 319.4all taxable property situated within its corporate limits, as computed in accordance with this 319.5subdivision. The county auditor of each county containing taxable real or personal property 319.6situated within any school district shall certify to the district upon request the new text begin estimated new text end 319.7market value of all such property. Whenever the commissioner of revenue, in accordance 319.8with section 127A.48, subdivisions 1 to 6, has determined that the net tax capacity of any 319.9district furnished by county auditors is not based upon the new text begin adjusted new text end market value of taxable 319.10property in the district new text begin exceeds the estimated market value of property within the district new text end , 319.11the commissioner of revenue shall certify to the district upon request the ratio most recently 319.12ascertained to exist between such new text begin the estimated market new text end value and the actual new text begin adjusted new text end 319.13 market value of property within the district. new text begin , and new text end the actual market value of property 319.14within a district, on which its debt limit under this subdivision is new text begin will be new text end based, is (a) the 319.15value certified by the county auditors, or (b) this new text begin on the estimated market new text end value divided by 319.16the ratio certified by the commissioner of revenue, whichever results in a higher value. 319.17    Sec. 103. Minnesota Statutes 2012, section 475.58, subdivision 2, is amended to read: 319.18    Subd. 2. Funding, refunding. Any county, city, town, or school district whose 319.19outstanding gross debt, including all items referred to in section 475.51, subdivision 319.204 , exceed in amount 1.62 percent of its new text begin estimated new text end market value may issue bonds under 319.21this subdivision for the purpose of funding or refunding such indebtedness or any part 319.22thereof. A list of the items of indebtedness to be funded or refunded shall be made by the 319.23recording officer and treasurer and filed in the office of the recording officer. The initial 319.24resolution of the governing body shall refer to this subdivision as authority for the issue, 319.25state the amount of bonds to be issued and refer to the list of indebtedness to be funded or 319.26refunded. This resolution shall be published once each week for two successive weeks 319.27in a legal newspaper published in the municipality or if there be no such newspaper, in 319.28a legal newspaper published in the county seat. Such bonds may be issued without the 319.29submission of the question of their issue to the electors unless within ten days after the 319.30second publication of the resolution a petition requesting such election signed by ten or 319.31more voters who are taxpayers of the municipality, shall be filed with the recording officer. 319.32In event such petition is filed, no bonds shall be issued hereunder unless authorized by a 319.33majority of the electors voting on the question. 319.34    Sec. 104. Minnesota Statutes 2012, section 475.73, subdivision 1, is amended to read: 320.1    Subdivision 1. May purchase these bonds; conditions. Obligations sold under the 320.2provisions of section 475.60 may be purchased by the State Board of Investment if the 320.3obligations meet the requirements of section 11A.24, subdivision 2, upon the approval of 320.4the attorney general as to form and execution of the application therefor, and under rules 320.5as the board may specify, and the state board shall have authority to purchase the same 320.6to an amount not exceeding 3.63 percent of the new text begin estimated new text end market value of the taxable 320.7property of the municipality, according to the last preceding assessment. The obligations 320.8shall not run for a shorter period than one year, nor for a longer period than 30 years and 320.9shall bear interest at a rate to be fixed by the state board but not less than two percent per 320.10annum. Forthwith upon the delivery to the state of Minnesota of any obligations issued by 320.11virtue thereof, the commissioner of management and budget shall certify to the respective 320.12auditors of the various counties wherein are situated the municipalities issuing the same, 320.13the number, denomination, amount, rate of interest and date of maturity of each obligation. 320.14    Sec. 105. Minnesota Statutes 2012, section 477A.011, subdivision 20, is amended to 320.15read: 320.16    Subd. 20. City net tax capacity. "City net tax capacity" means (1) the net tax 320.17capacity computed using the net tax capacity rates in section for taxes payable 320.18in the year of the aid distribution, and the market values, after the exclusion in section 320.19273.13, subdivision 35, for taxes payable in the year prior to the aid distribution plus (2) 320.20a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2, 320.21paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior 320.22to that for which aids are being calculated. The market value utilized in computing city 320.23net tax capacity shall be reduced by the sum of (1) a city's market value of commercial 320.24industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3, 320.25multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph 320.26(a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value 320.27of tax increment financing districts as defined in section 469.177, subdivision 2, and (3) 320.28the market value of transmission lines deducted from a city's total net tax capacity under 320.29section . The city net tax capacity will be computed using equalized market values 320.30 new text begin the city's adjusted net tax capacity under section 273.1325 new text end . 320.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 320.32    Sec. 106. Minnesota Statutes 2012, section 477A.0124, subdivision 2, is amended to 320.33read: 321.1    Subd. 2. Definitions. (a) For the purposes of this section, the following terms 321.2have the meanings given them. 321.3(b) "County program aid" means the sum of "county need aid," "county tax base 321.4equalization aid," and "county transition aid." 321.5(c) "Age-adjusted population" means a county's population multiplied by the county 321.6age index. 321.7(d) "County age index" means the percentage of the population over age 65 within 321.8the county divided by the percentage of the population over age 65 within the state, except 321.9that the age index for any county may not be greater than 1.8 nor less than 0.8. 321.10(e) "Population over age 65" means the population over age 65 established as of 321.11July 15 in an aid calculation year by the most recent federal census, by a special census 321.12conducted under contract with the United States Bureau of the Census, by a population 321.13estimate made by the Metropolitan Council, or by a population estimate of the state 321.14demographer made pursuant to section 4A.02, whichever is the most recent as to the stated 321.15date of the count or estimate for the preceding calendar year and which has been certified 321.16to the commissioner of revenue on or before July 15 of the aid calculation year. A revision 321.17to an estimate or count is effective for these purposes only if certified to the commissioner 321.18on or before July 15 of the aid calculation year. Clerical errors in the certification or use of 321.19estimates and counts established as of July 15 in the aid calculation year are subject to 321.20correction within the time periods allowed under section 477A.014. 321.21(f) "Part I crimes" means the three-year average annual number of Part I crimes 321.22reported for each county by the Department of Public Safety for the most recent years 321.23available. By July 1 of each year, the commissioner of public safety shall certify to the 321.24commissioner of revenue the number of Part I crimes reported for each county for the 321.25three most recent calendar years available. 321.26(g) "Households receiving food stamps" means the average monthly number of 321.27households receiving food stamps for the three most recent years for which data is 321.28available. By July 1 of each year, the commissioner of human services must certify to the 321.29commissioner of revenue the average monthly number of households in the state and in 321.30each county that receive food stamps, for the three most recent calendar years available. 321.31(h) "County net tax capacity" means the net tax capacity of the county, computed 321.32analogously to city net tax capacity under section 477A.011, subdivision 20 new text begin county's new text end 321.33 new text begin adjusted net tax capacity under section 273.1325 new text end . 321.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 322.1    Sec. 107. Minnesota Statutes 2012, section 641.23, is amended to read: 322.2641.23 FUNDS; HOW PROVIDED. 322.3Before any contract is made for the erection of a county jail, sheriff's residence, or 322.4both, the county board shall either levy a sufficient tax to provide the necessary funds, or 322.5issue county bonds therefor in accordance with the provisions of chapter 475, provided 322.6that no election is required if the amount of all bonds issued for this purpose and interest 322.7on them which are due and payable in any year does not exceed an amount equal to 322.80.09671 percent of new text begin estimated new text end market value of taxable property within the county, as last 322.9determined before the bonds are issued. 322.10    Sec. 108. Minnesota Statutes 2012, section 641.24, is amended to read: 322.11641.24 LEASING. 322.12The county may, by resolution of the county board, enter into a lease agreement with 322.13any statutory or home rule charter city situated within the county, or a county housing and 322.14redevelopment authority established pursuant to chapter 469 or any special law whereby 322.15the city or county housing and redevelopment authority will construct a jail or other law 322.16enforcement facilities for the county sheriff, deputy sheriffs, and other employees of the 322.17sheriff and other law enforcement agencies, in accordance with plans prepared by or at 322.18the request of the county board and, when required, approved by the commissioner of 322.19corrections and will finance it by the issuance of revenue bonds, and the county may lease 322.20the site and improvements for a term and upon rentals sufficient to produce revenue for the 322.21prompt payment of the bonds and all interest accruing thereon and, upon completion of 322.22payment, will acquire title thereto. The real and personal property acquired for the jail 322.23shall constitute a project and the lease agreement shall constitute a revenue agreement 322.24as contemplated in chapter 469, and all proceedings shall be taken by the city or county 322.25housing and redevelopment authority and the county in the manner and with the force and 322.26effect provided in chapter 469; provided that: 322.27(1) no tax shall be imposed upon or in lieu of a tax upon the property; 322.28(2) the approval of the project by the commissioner of commerce shall not be required; 322.29(3) the Department of Corrections shall be furnished and shall record such 322.30information concerning each project as it may prescribe; 322.31(4) the rentals required to be paid under the lease agreement shall not exceed in any 322.32year one-tenth of one percent of the new text begin estimated new text end market value of property within the county, 322.33as last finally equalized before the execution of the agreement; 322.34(5) the county board shall provide for the payment of all rentals due during the term 322.35of the lease, in the manner required in section 641.264, subdivision 2; 323.1(6) no mortgage on the property shall be granted for the security of the bonds, but 323.2compliance with clause (5) hereof may be enforced as a nondiscretionary duty of the 323.3county board; and 323.4(7) the county board may sublease any part of the jail property for purposes consistent 323.5with the maintenance and operation of a county jail or other law enforcement facility. 323.6    Sec. 109. Minnesota Statutes 2012, section 645.44, is amended by adding a subdivision 323.7to read: 323.8     new text begin Subd. 20. new text end new text begin Estimated market value. new text end new text begin When used in determining or calculating a new text end 323.9 new text begin limit on taxation, spending, state aid amounts, or debt, bond, certificate of indebtedness, or new text end 323.10 new text begin capital note issuance by or for a local government unit, "estimated market value" has the new text end 323.11 new text begin meaning given in section 273.032. new text end 323.12    Sec. 110. new text begin REVISOR'S INSTRUCTION. new text end 323.13 new text begin The revisor of statutes shall recodify Minnesota Statutes, section 127.48, new text end 323.14 new text begin subdivisions 1 to 6, as section 273.1325, subdivisions 1 to 6, and change all new text end 323.15 new text begin cross-references to the affected subdivisions accordingly. new text end 323.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 323.17    Sec. 111. new text begin REPEALER. new text end 323.18 new text begin Minnesota Statutes 2012, sections 276A.01, subdivision 11; 473F.02, subdivision new text end 323.19 new text begin 13; and 477A.011, subdivision 21, new text end new text begin are repealed. new text end 323.20    Sec. 112. new text begin EFFECTIVE DATE. new text end 323.21 new text begin Unless otherwise specifically provided, this act is effective the day following final new text end 323.22 new text begin enactment for purposes of limits on net debt, the issuance of bonds, certificates of new text end 323.23 new text begin indebtedness, and capital notes and is effective beginning for taxes payable in 2014 for new text end 323.24 new text begin all other purposes. new text end 323.25ARTICLE 13 323.26DEPARTMENT POLICY AND TECHNICAL: INCOME AND 323.27FRANCHISE TAXES; ESTATE TAXES 323.28    Section 1. Minnesota Statutes 2012, section 289A.10, is amended by adding a 323.29subdivision to read: 324.1     new text begin Subd. 1a. new text end new text begin Recapture tax return required. new text end new text begin If a disposition or cessation as provided new text end 324.2 new text begin by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as new text end 324.3 new text begin defined under section 291.03, subdivision 8, paragraph (c), or personal representative of new text end 324.4 new text begin the decedent's estate must submit a recapture tax return to the commissioner. new text end 324.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for estates of decedents dying after new text end 324.6 new text begin June 30, 2011. new text end 324.7    Sec. 2. Minnesota Statutes 2012, section 289A.12, subdivision 14, is amended to read: 324.8    Subd. 14. Regulated investment companies; reporting exempt-interest 324.9dividends. (a) A regulated investment company paying $10 or more in exempt-interest 324.10dividends to an individual who is a resident of Minnesota must make a return indicating 324.11the amount of the exempt-interest dividends, the name, address, and Social Security 324.12number of the recipient, and any other information that the commissioner specifies. The 324.13return must be provided to the shareholder by February 15 of the year following the year 324.14of the payment. The return provided to the shareholder must include a clear statement, 324.15in the form prescribed by the commissioner, that the exempt-interest dividends must be 324.16included in the computation of Minnesota taxable income. By June 1 of each year, the 324.17regulated investment company must file a copy of the return with the commissioner. 324.18    (b) This subdivision applies to regulated investment companies required to register 324.19under chapter 80A. 324.20    (c) new text begin (b) new text end For purposes of this subdivision, the following definitions apply. 324.21    (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in 324.22section 852(b)(5) of the Internal Revenue Code, but does not include the portion of 324.23exempt-interest dividends that are not required to be added to federal taxable income 324.24under section 290.01, subdivision 19a, clause (1)(ii). 324.25    (2) "Regulated investment company" means regulated investment company as 324.26defined in section 851(a) of the Internal Revenue Code or a fund of the regulated 324.27investment company as defined in section 851(g) of the Internal Revenue Code. 324.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 324.29    Sec. 3. Minnesota Statutes 2012, section 289A.12, is amended by adding a subdivision 324.30to read: 324.31     new text begin Subd. 18. new text end new text begin Returns by qualified heirs. new text end new text begin A qualified heir, as defined in section 291.03, new text end 324.32 new text begin subdivision 8, paragraph (c), must file two returns with the commissioner attesting that new text end 324.33 new text begin no disposition or cessation as provided by section 291.03, subdivision 11, paragraph new text end 325.1 new text begin (a), occurred. The first return must be filed no earlier than 24 months and no later than new text end 325.2 new text begin 26 months after the decedent's death. The second return must be filed no earlier than 36 new text end 325.3 new text begin months and no later than 39 months after the decedent's death. new text end 325.4 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for returns required to be filed after new text end 325.5 new text begin December 31, 2013. new text end 325.6    Sec. 4. Minnesota Statutes 2012, section 289A.18, is amended by adding a subdivision 325.7to read: 325.8     new text begin Subd. 3a. new text end new text begin Recapture tax return. new text end new text begin A recapture tax return must be filed with the new text end 325.9 new text begin commissioner within six months after the date of the disposition or cessation as provided new text end 325.10 new text begin by section 291.03, subdivision 11, paragraph (a). new text end 325.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for estates of decedents dying after new text end 325.12 new text begin June 30, 2011. new text end 325.13    Sec. 5. Minnesota Statutes 2012, section 289A.20, subdivision 3, is amended to read: 325.14    Subd. 3. Estate tax. Taxes imposed by chapter 291 new text begin section 291.03, subdivision 1, new text end 325.15 take effect at and upon the death of the person whose estate is subject to taxation and are 325.16due and payable on or before the expiration of nine months from that death. 325.17 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for estates of decedents dying after new text end 325.18 new text begin June 30, 2011. new text end 325.19    Sec. 6. Minnesota Statutes 2012, section 289A.20, is amended by adding a subdivision 325.20to read: 325.21     new text begin Subd. 3a. new text end new text begin Recapture tax. new text end new text begin The additional estate tax imposed by section 291.03, new text end 325.22 new text begin subdivision 11, paragraph (b), is due and payable on or before the expiration of the date new text end 325.23 new text begin provided by section 291.03, subdivision 11, paragraph (c). new text end 325.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for estates of decedents dying after new text end 325.25 new text begin June 30, 2011. new text end 325.26    Sec. 7. Minnesota Statutes 2012, section 289A.26, subdivision 3, is amended to read: 325.27    Subd. 3. Short taxable year. (a) new text begin A corporation or new text end an entity with a short taxable year 325.28of less than 12 months, but at least four months, must pay estimated tax in equal installments 325.29on or before the 15th day of the third, sixth, ninth, and final month of the short taxable 325.30year, to the extent applicable based on the number of months in the short taxable year. 326.1(b) new text begin A corporation or new text end an entity is not required to make estimated tax payments for a 326.2short taxable year unless its tax liability before the first day of the last month of the taxable 326.3year can reasonably be expected to exceed $500. 326.4(c) No payment is required for a short taxable year of less than four months. 326.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 326.6    Sec. 8. Minnesota Statutes 2012, section 289A.26, subdivision 4, is amended to read: 326.7    Subd. 4. Underpayment of estimated tax. If there is an underpayment of estimated 326.8tax by a corporation new text begin or an entity new text end , there shall be added to the tax for the taxable year an 326.9amount determined at the rate in section 270C.40 on the amount of the underpayment, 326.10determined under subdivision 5, for the period of the underpayment determined under 326.11subdivision 6. This subdivision does not apply in the first taxable year that a corporation is 326.12subject to the tax imposed under section 290.02 new text begin or an entity is subject to the tax imposed new text end 326.13 new text begin under section 290.05, subdivision 3 new text end . 326.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 326.15    Sec. 9. Minnesota Statutes 2012, section 289A.26, subdivision 7, is amended to read: 326.16    Subd. 7. Required installments. (a) Except as otherwise provided in this 326.17subdivision, the amount of a required installment is 25 percent of the required annual 326.18payment. 326.19(b) Except as otherwise provided in this subdivision, the term "required annual 326.20payment" means the lesser of: 326.21(1) 100 percent of the tax shown on the return for the taxable year, or, if no return is 326.22filed, 100 percent of the tax for that year; or 326.23(2) 100 percent of the tax shown on the return of the new text begin corporation or new text end entity for the 326.24preceding taxable year provided the return was for a full 12-month period, showed a 326.25liability, and was filed by the new text begin corporation or new text end entity. 326.26(c) Except for determining the first required installment for any taxable year, 326.27paragraph (b), clause (2), does not apply in the case of a large corporation. The term 326.28"large corporation" means a corporation or any predecessor corporation that had taxable 326.29net income of $1,000,000 or more for any taxable year during the testing period. The 326.30term "testing period" means the three taxable years immediately preceding the taxable 326.31year involved. A reduction allowed to a large corporation for the first installment that is 326.32allowed by applying paragraph (b), clause (2), must be recaptured by increasing the next 326.33required installment by the amount of the reduction. 327.1(d) In the case of a required installment, if the corporation new text begin or entity new text end establishes that 327.2the annualized income installment is less than the amount determined in paragraph (a), the 327.3amount of the required installment is the annualized income installment and the recapture 327.4of previous quarters' reductions allowed by this paragraph must be recovered by increasing 327.5later required installments to the extent the reductions have not previously been recovered. 327.6(e) The "annualized income installment" is the excess, if any, of: 327.7(1) an amount equal to the applicable percentage of the tax for the taxable year 327.8computed by placing on an annualized basis the taxable income: 327.9(i) for the first two months of the taxable year, in the case of the first required 327.10installment; 327.11(ii) for the first two months or for the first five months of the taxable year, in the 327.12case of the second required installment; 327.13(iii) for the first six months or for the first eight months of the taxable year, in the 327.14case of the third required installment; and 327.15(iv) for the first nine months or for the first 11 months of the taxable year, in the 327.16case of the fourth required installment, over 327.17(2) the aggregate amount of any prior required installments for the taxable year. 327.18(3) For the purpose of this paragraph, the annualized income shall be computed 327.19by placing on an annualized basis the taxable income for the year up to the end of the 327.20month preceding the due date for the quarterly payment multiplied by 12 and dividing 327.21the resulting amount by the number of months in the taxable year (2, 5, 6, 8, 9, or 11 as 327.22the case may be) referred to in clause (1). 327.23(4) The "applicable percentage" used in clause (1) is: 327.24 327.25 327.26 For the following required installments: The applicable percentage is: 327.27 1st 25 327.28 2nd 50 327.29 3rd 75 327.30 4th 100 327.31(f)(1) If this paragraph applies, the amount determined for any installment must 327.32be determined in the following manner: 327.33(i) take the taxable income for the months during the taxable year preceding the 327.34filing month; 327.35(ii) divide that amount by the base period percentage for the months during the 327.36taxable year preceding the filing month; 327.37(iii) determine the tax on the amount determined under item (ii); and 328.1(iv) multiply the tax computed under item (iii) by the base period percentage for the 328.2filing month and the months during the taxable year preceding the filing month. 328.3(2) For purposes of this paragraph: 328.4(i) the "base period percentage" for a period of months is the average percent that the 328.5taxable income for the corresponding months in each of the three preceding taxable years 328.6bears to the taxable income for the three preceding taxable years; 328.7(ii) the term "filing month" means the month in which the installment is required 328.8to be paid; 328.9(iii) this paragraph only applies if the base period percentage for any six consecutive 328.10months of the taxable year equals or exceeds 70 percent; and 328.11(iv) the commissioner may provide by rule for the determination of the base period 328.12percentage in the case of reorganizations, new corporations new text begin or entities new text end , and other similar 328.13circumstances. 328.14(3) In the case of a required installment determined under this paragraph, if the 328.15 new text begin corporation or new text end entity determines that the installment is less than the amount determined in 328.16paragraph (a), the amount of the required installment is the amount determined under this 328.17paragraph and the recapture of previous quarters' reductions allowed by this paragraph 328.18must be recovered by increasing later required installments to the extent the reductions 328.19have not previously been recovered. 328.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 328.21    Sec. 10. Minnesota Statutes 2012, section 289A.26, subdivision 9, is amended to read: 328.22    Subd. 9. Failure to file an estimate. In the case of new text begin a corporation or new text end an entity 328.23that fails to file an estimated tax for a taxable year when one is required, the period of 328.24the underpayment runs from the four installment dates in subdivision 2 or 3, whichever 328.25applies, to the earlier of the periods in subdivision 6, clauses (1) and (2). 328.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 328.27    Sec. 11. Minnesota Statutes 2012, section 290.9705, subdivision 1, is amended to read: 328.28    Subdivision 1. Withholding of payments to out-of-state contractors. (a) In this 328.29section, "person" means a person, corporation, or cooperative, the state of Minnesota and 328.30its political subdivisions, and a city, county, and school district in Minnesota. 328.31(b) A person who in the regular course of business is hiring, contracting, or having a 328.32contract with a nonresident person or foreign corporation, as defined in Minnesota Statutes 328.331986, section 290.01, subdivision 5, to perform construction work in Minnesota, shall 329.1deduct and withhold eight percent of cumulative calendar year payments new text begin made new text end to the 329.2contractor which exceed new text begin if the value of the contract exceeds new text end $50,000. 329.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for payments made to contractors new text end 329.4 new text begin after December 31, 2013. new text end 329.5ARTICLE 14 329.6DEPARTMENT POLICY AND TECHNICAL: SALES AND USE 329.7TAXES; SPECIAL TAXES 329.8    Section 1. Minnesota Statutes 2012, section 287.20, is amended by adding a 329.9subdivision to read: 329.10     new text begin Subd. 11. new text end new text begin Partition. new text end new text begin "Partition" means the division by conveyance of real property new text end 329.11 new text begin that is held jointly or in common by two or more persons into individually owned interests. new text end 329.12 new text begin If one of the co-owners gives consideration for all or a part of the individually owned new text end 329.13 new text begin interest conveyed to them, that portion of the conveyance is not a part of the partition. new text end 329.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 329.15    Sec. 2. Minnesota Statutes 2012, section 289A.20, subdivision 4, is amended to read: 329.16    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and 329.17payable to the commissioner monthly on or before the 20th day of the month following 329.18the month in which the taxable event occurred, or following another reporting period 329.19as the commissioner prescribes or as allowed under section 289A.18, subdivision 4, 329.20paragraph (f) or (g), except that: 329.21(1) use taxes due on an annual use tax return as provided under section 289A.11, 329.22subdivision 1 , are payable by April 15 following the close of the calendar year; and new text begin . new text end 329.23(2) except as provided in paragraph (f), for a vendor having a liability of $120,000 329.24or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the taxes 329.25imposed by chapter 297A, except as provided in paragraph (b), are due and payable to the 329.26commissioner monthly in the following manner: 329.27(i) On or before the 14th day of the month following the month in which the taxable 329.28event occurred, the vendor must remit to the commissioner 90 percent of the estimated 329.29liability for the month in which the taxable event occurred. 329.30(ii) On or before the 20th day of the month in which the taxable event occurs, the 329.31vendor must remit to the commissioner a prepayment for the month in which the taxable 329.32event occurs equal to 67 percent of the liability for the previous month. 330.1(iii) On or before the 20th day of the month following the month in which the taxable 330.2event occurred, the vendor must pay any additional amount of tax not previously remitted 330.3under either item (i) or (ii ) or, if the payment made under item (i) or (ii) was greater than 330.4the vendor's liability for the month in which the taxable event occurred, the vendor may 330.5take a credit against the next month's liability in a manner prescribed by the commissioner. 330.6(iv) Once the vendor first pays under either item (i) or (ii), the vendor is required to 330.7continue to make payments in the same manner, as long as the vendor continues having a 330.8liability of $120,000 or more during the most recent fiscal year ending June 30. 330.9(v) Notwithstanding items (i), (ii), and (iv), if a vendor fails to make the required 330.10payment in the first month that the vendor is required to make a payment under either item 330.11(i) or (ii), then the vendor is deemed to have elected to pay under item (ii) and must make 330.12subsequent monthly payments in the manner provided in item (ii). 330.13(vi) For vendors making an accelerated payment under item (ii), for the first month 330.14that the vendor is required to make the accelerated payment, on the 20th of that month, the 330.15vendor will pay 100 percent of the liability for the previous month and a prepayment for 330.16the first month equal to 67 percent of the liability for the previous month. 330.17    (b) Notwithstanding paragraph (a), A vendor having a liability of $120,000 or more 330.18during a fiscal year ending June 30 must remit the June liability for the next year in the 330.19following manner: 330.20    (1) Two business days before June 30 of the year, the vendor must remit 90 percent 330.21of the estimated June liability to the commissioner. 330.22    (2) On or before August 20 of the year, the vendor must pay any additional amount 330.23of tax not remitted in June. 330.24    (c) A vendor having a liability of: 330.25    (1) $10,000 or more, but less than $120,000 during a fiscal year ending June 30, 330.262009, and fiscal years thereafter, must remit by electronic means all liabilities on returns 330.27due for periods beginning in the subsequent calendar year on or before the 20th day of 330.28the month following the month in which the taxable event occurred, or on or before the 330.2920th day of the month following the month in which the sale is reported under section 330.30289A.18, subdivision 4 ; or 330.31(2) $120,000 or more, during a fiscal year ending June 30, 2009, and fiscal years 330.32thereafter, must remit by electronic means all liabilities in the manner provided in 330.33paragraph (a), clause (2), on returns due for periods beginning in the subsequent calendar 330.34year, except for 90 percent of the estimated June liability, which is due two business days 330.35before June 30. The remaining amount of the June liability is due on August 20. 331.1(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's 331.2religious beliefs from paying electronically shall be allowed to remit the payment by mail. 331.3The filer must notify the commissioner of revenue of the intent to pay by mail before 331.4doing so on a form prescribed by the commissioner. No extra fee may be charged to a 331.5person making payment by mail under this paragraph. The payment must be postmarked 331.6at least two business days before the due date for making the payment in order to be 331.7considered paid on a timely basis. 331.8(e) Whenever the liability is $120,000 or more separately for: (1) the tax imposed 331.9under chapter 297A; (2) a fee that is to be reported on the same return as and paid with the 331.10chapter 297A taxes; or (3) any other tax that is to be reported on the same return as and 331.11paid with the chapter 297A taxes, then the payment of all the liabilities on the return must 331.12be accelerated as provided in this subdivision. 331.13(f) At the start of the first calendar quarter at least 90 days after the cash flow account 331.14established in section 16A.152, subdivision 1, and the budget reserve account established in 331.15section 16A.152, subdivision 1a, reach the amounts listed in section 16A.152, subdivision 331.162 , paragraph (a), the remittance of the accelerated payments required under paragraph (a), 331.17clause (2), must be suspended. The commissioner of management and budget shall notify 331.18the commissioner of revenue when the accounts have reached the required amounts. 331.19Beginning with the suspension of paragraph (a), clause (2), for a vendor with a liability of 331.20$120,000 or more during a fiscal year ending June 30, 2009, and fiscal years thereafter, the 331.21taxes imposed by chapter 297A are due and payable to the commissioner on the 20th day 331.22of the month following the month in which the taxable event occurred. Payments of tax 331.23liabilities for taxable events occurring in June under paragraph (b) are not changed. 331.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 331.25    Sec. 3. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read: 331.26    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages 331.27is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year 331.28beginning July 1, regardless of the alcohol content of the product. Qualified brewers may 331.29take the credit on the 18th day of each month, but the total credit allowed may not exceed 331.30in any fiscal year the lesser of: 331.31(1) the liability for tax; or 331.32(2) $115,000. 331.33For purposes of this subdivision, a "qualified brewer" means a brewer, whether 331.34or not located in this state, manufacturing less than 100,000 barrels of fermented malt 331.35beverages in the calendar year immediately preceding the calendar new text begin fiscal new text end year for which 332.1the credit under this subdivision is claimed. In determining the number of barrels, all 332.2brands or labels of a brewer must be combined. All facilities for the manufacture of 332.3fermented malt beverages owned or controlled by the same person, corporation, or other 332.4entity must be treated as a single brewer. 332.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 332.6    Sec. 4. Minnesota Statutes 2012, section 297I.05, subdivision 11, is amended to read: 332.7    Subd. 11. Retaliatory provisions. (a) If any other state or country imposes any 332.8taxes, fines, deposits, penalties, licenses, or fees upon any insurance companies of this 332.9state and their agents doing business in another state or country that are in addition to or in 332.10excess of those imposed by the laws of this state upon foreign insurance companies and 332.11their agents doing business in this state, the same taxes, fines, deposits, penalties, licenses, 332.12and fees are imposed upon every similar insurance company of that state or country and 332.13their agents doing or applying to do business in this state. 332.14(b) If any conditions precedent to the right to do business in any other state or 332.15country are imposed by the laws of that state or country, beyond those imposed upon 332.16foreign companies by the laws of this state, the same conditions precedent are imposed 332.17upon every similar insurance company of that state or country and their agents doing or 332.18applying to do business in that state. 332.19(c) For purposes of this subdivision, "taxes, fines, deposits, penalties, licenses, or 332.20fees" means an amount of money that is deposited in the general revenue fund of the state 332.21or other similar fund in another state or country and is not dedicated to a special purpose 332.22or use or money deposited in the general revenue fund of the state or other similar fund in 332.23another state or country and appropriated to the commissioner of commerce or insurance 332.24for the operation of the Department of Commerce or other similar agency with jurisdiction 332.25over insurance. Taxes, fines, deposits, penalties, licenses, or fees do not include: 332.26(1) special purpose obligations or assessments imposed in connection with particular 332.27kinds of insurance, including but not limited to assessments imposed in connection with 332.28residual market mechanisms; or 332.29(2) assessments made by the insurance guaranty association, life and health 332.30guarantee association, or similar association. 332.31(d) This subdivision applies to taxes imposed under subdivisions 1, new text begin ; new text end 3, new text begin ; new text end 4, 6, and new text begin ; new text end 12, 332.32paragraph (a), clauses (1) and (2) new text begin ; and 14 new text end . 332.33(e) This subdivision does not apply to insurance companies organized or domiciled 332.34in a state or country, the laws of which do not impose retaliatory taxes, fines, deposits, 332.35penalties, licenses, or fees or which grant, on a reciprocal basis, exemptions from 333.1retaliatory taxes, fines, deposits, penalties, licenses, or fees to insurance companies 333.2domiciled in this state. 333.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 333.4    Sec. 5. new text begin REPEALER. new text end 333.5 new text begin Minnesota Statutes 2012, section 289A.60, subdivision 31, new text end new text begin is repealed. new text end 333.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 333.7ARTICLE 15 333.8DEPARTMENT POLICY AND TECHNICAL: MINERALS 333.9TAXES; PROPERTY TAX 333.10    Section 1. Minnesota Statutes 2012, section 13.4965, subdivision 3, is amended to read: 333.11    Subd. 3. Homestead new text begin and other new text end applications. The classification and disclosure of 333.12certain information collected to determine new text begin eligibility of property for a new text end homestead new text begin or other new text end 333.13classification new text begin or benefit under section 273.13 new text end are governed by section new text begin sections new text end 273.124, 333.14subdivision new text begin subdivisions new text end 13 new text begin , 13a, 13b, 13c, and 13d; 273.1245; and 273.1315 new text end . 333.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 333.16    Sec. 2. Minnesota Statutes 2012, section 123A.455, subdivision 1, is amended to read: 333.17    Subdivision 1. Definitions. "Split residential property parcel" means a parcel of 333.18real estate that is located within the boundaries of more than one school district and that 333.19is classified as residential property under: 333.20(1) section 273.13, subdivision 22, paragraph (a) or (b); 333.21(2) section 273.13, subdivision 25, paragraph (b), clause (1); or 333.22(3) section 273.13, subdivision 25, paragraph (c), clause (1). 333.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014 and new text end 333.24 new text begin thereafter. new text end 333.25    Sec. 3. Minnesota Statutes 2012, section 270.077, is amended to read: 333.26270.077 TAXES CREDITED TO STATE AIRPORTS FUND. 333.27All taxes levied under sections 270.071 to 270.079 must be new text begin collected by the new text end 333.28 new text begin commissioner and new text end credited to the state airports fund created in section 360.017. 333.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 334.1    Sec. 4. Minnesota Statutes 2012, section 270.41, subdivision 5, is amended to read: 334.2    Subd. 5. Prohibited activity. A licensed assessor or other person employed by an 334.3assessment jurisdiction or contracting with an assessment jurisdiction for the purpose 334.4of valuing or classifying property for property tax purposes is prohibited from making 334.5appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report 334.6as defined in section 82B.021, subdivisions 2, 4, 6, and 7, on any property within the 334.7assessment jurisdiction where the individual is employed or performing the duties of the 334.8assessor under contract. Violation of this prohibition shall result in immediate revocation 334.9of the individual's license to assess property for property tax purposes. This prohibition 334.10must not be construed to prohibit an individual from carrying out any duties required 334.11for the proper assessment of property for property tax purposes or performing duties 334.12enumerated in section 273.061, subdivision 7 or 8. If a formal resolution has been adopted 334.13by the governing body of a governmental unit, which specifies the purposes for which 334.14such work will be done, this prohibition does not apply to appraisal activities undertaken 334.15on behalf of and at the request of the governmental unit that has employed or contracted 334.16with the individual. The resolution may only allow appraisal activities which are related to 334.17condemnations, right-of-way acquisitions, new text begin land exchanges, new text end or special assessments. 334.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 334.19    Sec. 5. Minnesota Statutes 2012, section 270C.34, subdivision 1, is amended to read: 334.20    Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any 334.21penalty or interest that is imposed by a law administered by the commissioner, or imposed 334.22by section 270.0725, subdivision 1 or 2, new text begin or 270.075, subdivision 2, new text end as a result of the late 334.23payment of tax or late filing of a return, or any part of an additional tax charge under 334.24section 289A.25, subdivision 2, or 289A.26, subdivision 4, if the failure to timely pay the 334.25tax or failure to timely file the return is due to reasonable cause, or if the taxpayer is located 334.26in a presidentially declared disaster or in a presidentially declared state of emergency area 334.27or in an area declared to be in a state of emergency by the governor under section 12.31. 334.28    (b) The commissioner shall abate any part of a penalty or additional tax charge 334.29under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous 334.30advice given to the taxpayer in writing by an employee of the department acting in 334.31an official capacity, if the advice: 334.32    (1) was reasonably relied on and was in response to a specific written request of the 334.33taxpayer; and 334.34    (2) was not the result of failure by the taxpayer to provide adequate or accurate 334.35information. 335.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 335.2    Sec. 6. Minnesota Statutes 2012, section 272.01, subdivision 2, is amended to read: 335.3    Subd. 2. Exempt property used by private entity for profit. (a) When any real or 335.4personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is 335.5leased, loaned, or otherwise made available and used by a private individual, association, 335.6or corporation in connection with a business conducted for profit, there shall be imposed a 335.7tax, for the privilege of so using or possessing such real or personal property, in the same 335.8amount and to the same extent as though the lessee or user was the owner of such property. 335.9    (b) The tax imposed by this subdivision shall not apply to: 335.10    (1) property leased or used as a concession in or relative to the use in whole 335.11or part of a public park, market, fairgrounds, port authority, economic development 335.12authority established under chapter 469, municipal auditorium, municipal parking facility, 335.13municipal museum, or municipal stadium; 335.14    (2) property of an airport owned by a city, town, county, or group thereof which is: 335.15    (i) leased to or used by any person or entity including a fixed base operator; and 335.16    (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods, 335.17services, or facilities to the airport or general public; 335.18the exception from taxation provided in this clause does not apply to: 335.19    (i) property located at an airport owned or operated by the Metropolitan Airports 335.20Commission or by a city of over 50,000 population according to the most recent federal 335.21census or such a city's airport authority; or 335.22    (ii) hangars leased by a private individual, association, or corporation in connection 335.23with a business conducted for profit other than an aviation-related business; 335.24    (3) property constituting or used as a public pedestrian ramp or concourse in 335.25connection with a public airport; 335.26    (4) property constituting or used as a passenger check-in area or ticket sale counter, 335.27boarding area, or luggage claim area in connection with a public airport but not the 335.28airports owned or operated by the Metropolitan Airports Commission or cities of over 335.2950,000 population or an airport authority therein. Real estate owned by a municipality 335.30in connection with the operation of a public airport and leased or used for agricultural 335.31purposes is not exempt; 335.32    (5) property leased, loaned, or otherwise made available to a private individual, 335.33corporation, or association under a cooperative farming agreement made pursuant to 335.34section 97A.135; or 336.1    (6) property leased, loaned, or otherwise made available to a private individual, 336.2corporation, or association under section 272.68, subdivision 4. 336.3    (c) Taxes imposed by this subdivision are payable as in the case of personal property 336.4taxes and shall be assessed to the lessees or users of real or personal property in the same 336.5manner as taxes assessed to owners of real or personal property, except that such taxes 336.6shall not become a lien against the property. When due, the taxes shall constitute a debt due 336.7from the lessee or user to the state, township, city, county, and school district for which the 336.8taxes were assessed and shall be collected in the same manner as personal property taxes. 336.9If property subject to the tax imposed by this subdivision is leased or used jointly by two or 336.10more persons, each lessee or user shall be jointly and severally liable for payment of the tax. 336.11    (d) The tax on real property of the new text begin federal government, the new text end state or any of its political 336.12subdivisions that is leased by new text begin , loaned, or otherwise made available to new text end a private individual, 336.13association, or corporation and becomes taxable under this subdivision or other provision 336.14of law must be assessed and collected as a personal property assessment. The taxes do 336.15not become a lien against the real property. 336.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 336.17    Sec. 7. Minnesota Statutes 2012, section 272.02, subdivision 97, is amended to read: 336.18    Subd. 97. Property used in business of mining subject to net proceeds tax. The 336.19following property used in the business of mining that is subject to the net proceeds tax 336.20under section 298.015 is exempt: 336.21(1) deposits of ores, metals, and minerals and the lands in which they are contained; 336.22(2) all real and personal property used in mining, quarrying, producing, or refining 336.23ores, minerals, or metals, including lands occupied by or used in connection with the 336.24mining, quarrying, production, or ore refining facilities; and 336.25(3) concentrate or direct reduced ore. 336.26This exemption applies for each year that a person subject to tax under section 336.27298.015 uses the property for mining, quarrying, producing, or refining ores, metals, or 336.28minerals. 336.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 336.30    Sec. 8. Minnesota Statutes 2012, section 272.03, subdivision 9, is amended to read: 336.31    Subd. 9. Person. "Person" includes new text begin means an individual, association, estate, trust, new text end 336.32 new text begin partnership, new text end firm, company, or corporation. 336.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 337.1    Sec. 9. Minnesota Statutes 2012, section 273.114, subdivision 6, is amended to read: 337.2    Subd. 6. Additional taxes. new text begin (a) new text end When real property which is being, or has been 337.3valued and assessed under this section new text begin is sold, transferred, or new text end no longer qualifies under 337.4subdivision 2, the portion new text begin sold, transferred, or new text end no longer qualifying shall be subject to 337.5additional taxes in the amount equal to the difference between the taxes determined in 337.6accordance with subdivision 3 and the amount determined under subdivision 4, provided 337.7that the amount determined under subdivision 4 shall not be greater than it would have 337.8been had the actual bona fide sale price of the real property at an arm's-length transaction 337.9been used in lieu of the market value determined under subdivision 4. The additional taxes 337.10shall be extended against the property on the tax list for new text begin taxes payable in new text end the current year, 337.11provided that no interest or penalties shall be levied on the additional taxes if timely paid 337.12and new text begin provided new text end that the additional taxes shall only be levied with respect to the current year 337.13plus two prior years that the property has been valued and assessed under this section. 337.14 new text begin (b) In the case of a sale or transfer, the additional taxes under paragraph (a) shall not new text end 337.15 new text begin be extended against the property if the new owner submits a successful application under new text end 337.16 new text begin this section by the later of May 1 of the current year or 30 days after the sale or transfer. new text end 337.17 new text begin (c) For the purposes of this section, the following events do not constitute a sale or new text end 337.18 new text begin transfer for property that qualified under subdivision 2 prior to the event: new text end 337.19 new text begin (1) death of a property owner when the surviving owners retain ownership of the new text end 337.20 new text begin property; new text end 337.21 new text begin (2) divorce of a married couple when one of the spouses retains ownership of the new text end 337.22 new text begin property; new text end 337.23 new text begin (3) marriage of a single property owner when that owner retains ownership of the new text end 337.24 new text begin property in whole or in part; new text end 337.25 new text begin (4) the organization or reorganization of a farm ownership entity that is not prohibited new text end 337.26 new text begin from owning agricultural land in this state under section 500.24, if all owners maintain the new text end 337.27 new text begin same beneficial interest both before and after the organization or reorganization; and new text end 337.28 new text begin (5) transfer of the property to a trust or trustee, provided that the individual owners new text end 337.29 new text begin of the property are the grantors of the trust and they maintain the same beneficial interest new text end 337.30 new text begin both before and after placement of the property in trust. new text end 337.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 337.32    Sec. 10. Minnesota Statutes 2012, section 273.124, subdivision 13, is amended to read: 337.33    Subd. 13. Homestead application. (a) A person who meets the homestead 337.34requirements under subdivision 1 must file a homestead application with the county 337.35assessor to initially obtain homestead classification. 338.1    (b) The format and contents of a uniform homestead application shall be prescribed 338.2by the commissioner of revenue. The application must clearly inform the taxpayer that 338.3this application must be signed by all owners who occupy the property or by the qualifying 338.4relative and returned to the county assessor in order for the property to receive homestead 338.5treatment. 338.6    (c) Every property owner applying for homestead classification must furnish to the 338.7county assessor the Social Security number of each occupant who is listed as an owner 338.8of the property on the deed of record, the name and address of each owner who does not 338.9occupy the property, and the name and Social Security number of each owner's spouse who 338.10occupies the property. The application must be signed by each owner who occupies the 338.11property and by each owner's spouse who occupies the property, or, in the case of property 338.12that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative. 338.13    If a property owner occupies a homestead, the property owner's spouse may not 338.14claim another property as a homestead unless the property owner and the property owner's 338.15spouse file with the assessor an affidavit or other proof required by the assessor stating that 338.16the property qualifies as a homestead under subdivision 1, paragraph (e). 338.17    Owners or spouses occupying residences owned by their spouses and previously 338.18occupied with the other spouse, either of whom fail to include the other spouse's name 338.19and Social Security number on the homestead application or provide the affidavits or 338.20other proof requested, will be deemed to have elected to receive only partial homestead 338.21treatment of their residence. The remainder of the residence will be classified as 338.22nonhomestead residential. When an owner or spouse's name and Social Security number 338.23appear on homestead applications for two separate residences and only one application is 338.24signed, the owner or spouse will be deemed to have elected to homestead the residence for 338.25which the application was signed. 338.26    The Social Security numbers, state or federal tax returns or tax return information, 338.27including the federal income tax schedule F required by this section, or affidavits or other 338.28proofs of the property owners and spouses submitted under this or another section to 338.29support a claim for a property tax homestead classification are private data on individuals as 338.30defined by section 13.02, subdivision 12, but, notwithstanding that section, the private data 338.31may be disclosed to the commissioner of revenue, or, for purposes of proceeding under the 338.32Revenue Recapture Act to recover personal property taxes owing, to the county treasurer. 338.33    (d) If residential real estate is occupied and used for purposes of a homestead by a 338.34relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in 338.35order for the property to receive homestead status, a homestead application must be filed 338.36with the assessor. The Social Security number of each relative and spouse of a relative 339.1occupying the property shall be required on the homestead application filed under this 339.2subdivision. If a different relative of the owner subsequently occupies the property, the 339.3owner of the property must notify the assessor within 30 days of the change in occupancy. 339.4The Social Security number of a relative or relative's spouse occupying the property 339.5is private data on individuals as defined by section 13.02, subdivision 12, but may be 339.6disclosed to the commissioner of revenue, or, for the purposes of proceeding under the 339.7Revenue Recapture Act to recover personal property taxes owing, to the county treasurer. 339.8    (e) The homestead application shall also notify the property owners that the 339.9application filed under this section will not be mailed annually and that if the property 339.10is granted homestead status for any assessment year, that same property shall remain 339.11classified as homestead until the property is sold or transferred to another person, or 339.12the owners, the spouse of the owner, or the relatives no longer use the property as their 339.13homestead. Upon the sale or transfer of the homestead property, a certificate of value must 339.14be timely filed with the county auditor as provided under section 272.115. Failure to 339.15notify the assessor within 30 days that the property has been sold, transferred, or that the 339.16owner, the spouse of the owner, or the relative is no longer occupying the property as a 339.17homestead, shall result in the penalty provided under this subdivision and the property 339.18will lose its current homestead status. 339.19    (f) If the homestead application is not returned within 30 days, the county will send a 339.20second application to the present owners of record. The notice of proposed property taxes 339.21prepared under section 275.065, subdivision 3, shall reflect the property's classification. If 339.22a homestead application has not been filed with the county by December 15, the assessor 339.23shall classify the property as nonhomestead for the current assessment year for taxes 339.24payable in the following year, provided that the owner may be entitled to receive the 339.25homestead classification by proper application under section 375.192. 339.26     new text begin Subd. 13a. new text end new text begin Occupant list. new text end (g) At the request of the commissioner, each county 339.27must give the commissioner a list that includes the name and Social Security number 339.28of each occupant of homestead property who is the property owner, property owner's 339.29spouse, qualifying relative of a property owner, or a spouse of a qualifying relative. The 339.30commissioner shall use the information provided on the lists as appropriate under the law, 339.31including for the detection of improper claims by owners, or relatives of owners, under 339.32chapter 290A. 339.33     new text begin Subd. 13b. new text end new text begin Improper homestead. new text end (h) new text begin (a) new text end If the commissioner finds that a 339.34property owner may be claiming a fraudulent homestead, the commissioner shall notify 339.35the appropriate counties. Within 90 days of the notification, the county assessor shall 339.36investigate to determine if the homestead classification was properly claimed. If the 340.1property owner does not qualify, the county assessor shall notify the county auditor who 340.2will determine the amount of homestead benefits that had been improperly allowed. For the 340.3purpose of this section new text begin subdivision new text end , "homestead benefits" means the tax reduction resulting 340.4from the classification as a homestead under section 273.13, the taconite homestead credit 340.5under section 273.135, the residential homestead and agricultural homestead credits under 340.6section 273.1384, and the supplemental homestead credit under section 273.1391. 340.7    The county auditor shall send a notice to the person who owned the affected property 340.8at the time the homestead application related to the improper homestead was filed, 340.9demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent 340.10of the homestead benefits. The person notified may appeal the county's determination 340.11by serving copies of a petition for review with county officials as provided in section 340.12278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax 340.13Court within 60 days of the date of the notice from the county. Procedurally, the appeal 340.14is governed by the provisions in chapter 271 which apply to the appeal of a property tax 340.15assessment or levy, but without requiring any prepayment of the amount in controversy. If 340.16the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal 340.17has been filed, the county auditor shall certify the amount of taxes and penalty to the county 340.18treasurer. The county treasurer will add interest to the unpaid homestead benefits and 340.19penalty amounts at the rate provided in section 279.03 for real property taxes becoming 340.20delinquent in the calendar year during which the amount remains unpaid. Interest may be 340.21assessed for the period beginning 60 days after demand for payment was made. 340.22    If the person notified is the current owner of the property, the treasurer may add the 340.23total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes 340.24otherwise payable on the property by including the amounts on the property tax statements 340.25under section 276.04, subdivision 3. The amounts added under this paragraph to the ad 340.26valorem taxes shall include interest accrued through December 31 of the year preceding 340.27the taxes payable year for which the amounts are first added. These amounts, when added 340.28to the property tax statement, become subject to all the laws for the enforcement of real or 340.29personal property taxes for that year, and for any subsequent year. 340.30    If the person notified is not the current owner of the property, the treasurer may 340.31collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of 340.32the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment 340.33of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent 340.34tax obligations of the person who owned the property at the time the application related to 340.35the improperly allowed homestead was filed. The treasurer may relieve a prior owner of 340.36personal liability for the homestead benefits, penalty, interest, and costs, and instead extend 341.1those amounts on the tax lists against the property as provided in this paragraph to the extent 341.2that the current owner agrees in writing. On all demands, billings, property tax statements, 341.3and related correspondence, the county must list and state separately the amounts of 341.4homestead benefits, penalty, interest and costs being demanded, billed or assessed. 341.5    (i) new text begin (b) new text end Any amount of homestead benefits recovered by the county from the property 341.6owner shall be distributed to the county, city or town, and school district where the 341.7property is located in the same proportion that each taxing district's levy was to the total 341.8of the three taxing districts' levy for the current year. Any amount recovered attributable 341.9to taconite homestead credit shall be transmitted to the St. Louis County auditor to be 341.10deposited in the taconite property tax relief account. Any amount recovered that is 341.11attributable to supplemental homestead credit is to be transmitted to the commissioner of 341.12revenue for deposit in the general fund of the state treasury. The total amount of penalty 341.13collected must be deposited in the county general fund. 341.14    (j) new text begin (c) new text end If a property owner has applied for more than one homestead and the county 341.15assessors cannot determine which property should be classified as homestead, the county 341.16assessors will refer the information to the commissioner. The commissioner shall make 341.17the determination and notify the counties within 60 days. 341.18     new text begin Subd. 13c. new text end new text begin Property lists. new text end (k) In addition to lists of homestead properties, the 341.19commissioner may ask the counties to furnish lists of all properties and the record owners. 341.20The Social Security numbers and federal identification numbers that are maintained by 341.21a county or city assessor for property tax administration purposes, and that may appear 341.22on the lists retain their classification as private or nonpublic data; but may be viewed, 341.23accessed, and used by the county auditor or treasurer of the same county for the limited 341.24purpose of assisting the commissioner in the preparation of microdata samples under 341.25section 270C.12. new text begin The commissioner shall use the information provided on the lists as new text end 341.26 new text begin appropriate under the law, including for the detection of improper claims by owners, or new text end 341.27 new text begin relatives of owners, under chapter 290A. new text end 341.28     new text begin Subd. 13d. new text end new text begin Homestead data. new text end (l) On or before April 30 each year beginning in 2007, 341.29each county must provide the commissioner with the following data for each parcel of 341.30homestead property by electronic means as defined in section 289A.02, subdivision 8: 341.31    (i) new text begin (1) new text end the property identification number assigned to the parcel for purposes of 341.32taxes payable in the current year; 341.33    (ii) new text begin (2) new text end the name and Social Security number of each occupant of homestead property 341.34who is the property owner, property owner's spouse, qualifying relative of a property 341.35owner, or spouse of a qualifying relative; 342.1    (iii) new text begin (3) new text end the classification of the property under section 273.13 for taxes payable 342.2in the current year and in the prior year; 342.3    (iv) new text begin (4) new text end an indication of whether the property was classified as a homestead for 342.4taxes payable in the current year because of occupancy by a relative of the owner or 342.5by a spouse of a relative; 342.6    (v) new text begin (5) new text end the property taxes payable as defined in section 290A.03, subdivision 13, for 342.7the current year and the prior year; 342.8    (vi) new text begin (6) new text end the market value of improvements to the property first assessed for tax 342.9purposes for taxes payable in the current year; 342.10    (vii) new text begin (7) new text end the assessor's estimated market value assigned to the property for taxes 342.11payable in the current year and the prior year; 342.12    (viii) new text begin (8) new text end the taxable market value assigned to the property for taxes payable in the 342.13current year and the prior year; 342.14    (ix) new text begin (9) new text end whether there are delinquent property taxes owing on the homestead; 342.15    (x) new text begin (10) new text end the unique taxing district in which the property is located; and 342.16    (xi) new text begin (11) new text end such other information as the commissioner decides is necessary. 342.17    The commissioner shall use the information provided on the lists as appropriate 342.18under the law, including for the detection of improper claims by owners, or relatives 342.19of owners, under chapter 290A. 342.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 342.21    Sec. 11. new text begin [273.1245] CLASSIFICATION OF DATA. new text end 342.22     new text begin Subdivision 1. new text end new text begin Private or nonpublic data. new text end new text begin The following data are private or new text end 342.23 new text begin nonpublic data as defined in 13.02, subdivisions 9 and 12, when they are submitted to a new text end 342.24 new text begin county or local assessor under section 273.124, 273.13, or another section, to support a new text end 342.25 new text begin claim for the property tax homestead classification under section 273.13, or other property new text end 342.26 new text begin tax classification or benefit that is provided under section 273.13: new text end 342.27 new text begin (1) Social Security numbers; new text end 342.28 new text begin (2) copies of state or federal income tax returns; and new text end 342.29 new text begin (3) state or federal income tax return information, including the federal income new text end 342.30 new text begin tax schedule F. new text end 342.31     new text begin Subd. 2. new text end new text begin Disclosure. new text end new text begin The assessor shall disclose the data described in subdivision 1 new text end 342.32 new text begin to the commissioner of revenue as provided by law. The assessor shall also disclose all or new text end 342.33 new text begin portions of the data described in subdivision 1 to the county treasurer solely for the purpose new text end 342.34 new text begin of proceeding under the Revenue Recapture Act to recover personal property taxes owing. new text end 343.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 343.2    Sec. 12. Minnesota Statutes 2012, section 273.13, subdivision 23, is amended to read: 343.3    Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural 343.4land that is homesteaded, along with any class 2b rural vacant land that is contiguous to 343.5the class 2a land under the same ownership. The market value of the house and garage 343.6and immediately surrounding one acre of land has the same class rates as class 1a or 1b 343.7property under subdivision 22. The value of the remaining land including improvements 343.8up to the first tier valuation limit of agricultural homestead property has a net class rate 343.9of 0.5 percent of market value. The remaining property over the first tier has a class rate 343.10of one percent of market value. For purposes of this subdivision, the "first tier valuation 343.11limit of agricultural homestead property" and "first tier" means the limit certified under 343.12section 273.11, subdivision 23. 343.13    (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 343.14are agricultural land and buildings. Class 2a property has a net class rate of one percent of 343.15market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a 343.16property must also include any property that would otherwise be classified as 2b, but is 343.17interspersed with class 2a property, including but not limited to sloughs, wooded wind 343.18shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement, 343.19and other similar land that is impractical for the assessor to value separately from the rest of 343.20the property or that is unlikely to be able to be sold separately from the rest of the property. 343.21    An assessor may classify the part of a parcel described in this subdivision that is used 343.22for agricultural purposes as class 2a and the remainder in the class appropriate to its use. 343.23    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof, 343.24that are unplatted real estate, rural in character and not used for agricultural purposes, 343.25including land used for growing trees for timber, lumber, and wood and wood products, 343.26that is not improved with a structure. The presence of a minor, ancillary nonresidential 343.27structure as defined by the commissioner of revenue does not disqualify the property from 343.28classification under this paragraph. Any parcel of 20 acres or more improved with a 343.29structure that is not a minor, ancillary nonresidential structure must be split-classified, and 343.30ten acres must be assigned to the split parcel containing the structure. Class 2b property 343.31has a net class rate of one percent of market value unless it is part of an agricultural 343.32homestead under paragraph (a), or qualifies as class 2c under paragraph (d). 343.33    (d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 343.34acres statewide per taxpayer that is being managed under a forest management plan that 343.35meets the requirements of chapter 290C, but is not enrolled in the sustainable forest 344.1resource management incentive program. It has a class rate of .65 percent, provided that 344.2the owner of the property must apply to the assessor in order for the property to initially 344.3qualify for the reduced rate and provide the information required by the assessor to verify 344.4that the property qualifies for the reduced rate. If the assessor receives the application 344.5and information before May 1 in an assessment year, the property qualifies beginning 344.6with that assessment year. If the assessor receives the application and information after 344.7April 30 in an assessment year, the property may not qualify until the next assessment 344.8year. The commissioner of natural resources must concur that the land is qualified. The 344.9commissioner of natural resources shall annually provide county assessors verification 344.10information on a timely basis. The presence of a minor, ancillary nonresidential structure 344.11as defined by the commissioner of revenue does not disqualify the property from 344.12classification under this paragraph. 344.13    (e) Agricultural land as used in this section means new text begin : new text end 344.14     new text begin (1) new text end contiguous acreage of ten acres or more, used during the preceding year for 344.15agricultural purposes. new text begin ; or new text end 344.16     new text begin (2) contiguous acreage used during the preceding year for an intensive livestock or new text end 344.17 new text begin poultry confinement operation, provided that land used only for pasturing or grazing new text end 344.18 new text begin does not qualify under this clause. new text end 344.19    "Agricultural purposes" as used in this section means the raising, cultivation, drying, 344.20or storage of agricultural products for sale, or the storage of machinery or equipment 344.21used in support of agricultural production by the same farm entity. For a property to be 344.22classified as agricultural based only on the drying or storage of agricultural products, 344.23the products being dried or stored must have been produced by the same farm entity as 344.24the entity operating the drying or storage facility. "Agricultural purposes" also includes 344.25enrollment in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or 344.26the federal Conservation Reserve Program as contained in Public Law 99-198 or a similar 344.27state or federal conservation program if the property was classified as agricultural (i) 344.28under this subdivision for the assessment year 2002 new text begin taxes payable in 2003 because of its new text end 344.29 new text begin enrollment in a qualifying program and the land remains enrolled new text end or (ii) in the year prior 344.30to its enrollment. Agricultural classification shall not be based upon the market value of 344.31any residential structures on the parcel or contiguous parcels under the same ownership. 344.32     new text begin "Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous new text end 344.33 new text begin portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion new text end 344.34 new text begin of, a set of contiguous tax parcels under that section that are owned by the same person. new text end 344.35    (f) Real estate of new text begin Agricultural land under this section also includes: new text end 345.1     new text begin (1) contiguous acreage that is new text end less than ten acres, which is new text begin in size and new text end exclusively or 345.2intensively used new text begin in the preceding year new text end for raising or cultivating agricultural products, shall 345.3be considered as agricultural land. To qualify under this paragraph, property that includes 345.4a residential structure must be used intensively for one of the following purposes: new text begin ; or new text end 345.5     new text begin (2) contiguous acreage that contains a residence and is less than 11 acres in size, if new text end 345.6 new text begin the contiguous acreage exclusive of the house, garage, and surrounding one acre of land new text end 345.7 new text begin was used in the preceding year for one or more of the following three uses: new text end 345.8    (i) for new text begin an intensive grain new text end drying or storage of grain new text begin operation, new text end or new text begin for intensive new text end 345.9 new text begin machinery or equipment new text end storage of machinery or equipment new text begin activities new text end used to support 345.10agricultural activities on other parcels of property operated by the same farming entity; 345.11    (ii) as a nursery, provided that only those acres used new text begin intensively new text end to produce nursery 345.12stock are considered agricultural land; new text begin or new text end 345.13    (iii) for livestock or poultry confinement, provided that land that is used only for 345.14pasturing and grazing does not qualify; or 345.15    (iv) new text begin (iii) new text end for new text begin intensive new text end market farming; for purposes of this paragraph, "market 345.16farming" means the cultivation of one or more fruits or vegetables or production of animal 345.17or other agricultural products for sale to local markets by the farmer or an organization 345.18with which the farmer is affiliated. 345.19     new text begin "Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as new text end 345.20 new text begin described in section 272.193, or all of a set of contiguous tax parcels under that section new text end 345.21 new text begin that are owned by the same person. new text end 345.22    (g) Land shall be classified as agricultural even if all or a portion of the agricultural 345.23use of that property is the leasing to, or use by another person for agricultural purposes. 345.24    Classification under this subdivision is not determinative for qualifying under 345.25section 273.111. 345.26    (h) The property classification under this section supersedes, for property tax 345.27purposes only, any locally administered agricultural policies or land use restrictions that 345.28define minimum or maximum farm acreage. 345.29    (i) The term "agricultural products" as used in this subdivision includes production 345.30for sale of: 345.31    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 345.32animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, 345.33bees, and apiary products by the owner; 345.34    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned 345.35for agricultural use; 346.1    (3) the commercial boarding of horses, which may include related horse training and 346.2riding instruction, if the boarding is done on property that is also used for raising pasture 346.3to graze horses or raising or cultivating other agricultural products as defined in clause (1); 346.4    (4) property which is owned and operated by nonprofit organizations used for 346.5equestrian activities, excluding racing; 346.6    (5) game birds and waterfowl bred and raised (i) on a game farm licensed under 346.7section 97A.105, provided that the annual licensing report to the Department of Natural 346.8Resources, which must be submitted annually by March 30 to the assessor, indicates 346.9that at least 500 birds were raised or used for breeding stock on the property during the 346.10preceding year and that the owner provides a copy of the owner's most recent schedule F; 346.11or (ii) for use on a shooting preserve licensed under section 97A.115; 346.12    (6) insects primarily bred to be used as food for animals; 346.13    (7) trees, grown for sale as a crop, including short rotation woody crops, and not 346.14sold for timber, lumber, wood, or wood products; and 346.15    (8) maple syrup taken from trees grown by a person licensed by the Minnesota 346.16Department of Agriculture under chapter 28A as a food processor. 346.17    (j) If a parcel used for agricultural purposes is also used for commercial or industrial 346.18purposes, including but not limited to: 346.19    (1) wholesale and retail sales; 346.20    (2) processing of raw agricultural products or other goods; 346.21    (3) warehousing or storage of processed goods; and 346.22    (4) office facilities for the support of the activities enumerated in clauses (1), (2), 346.23and (3), 346.24the assessor shall classify the part of the parcel used for agricultural purposes as class 346.251b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its 346.26use. The grading, sorting, and packaging of raw agricultural products for first sale is 346.27considered an agricultural purpose. A greenhouse or other building where horticultural 346.28or nursery products are grown that is also used for the conduct of retail sales must be 346.29classified as agricultural if it is primarily used for the growing of horticultural or nursery 346.30products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of 346.31those products. Use of a greenhouse or building only for the display of already grown 346.32horticultural or nursery products does not qualify as an agricultural purpose. 346.33    (k) The assessor shall determine and list separately on the records the market value 346.34of the homestead dwelling and the one acre of land on which that dwelling is located. If 346.35any farm buildings or structures are located on this homesteaded acre of land, their market 346.36value shall not be included in this separate determination. 347.1    (l) Class 2d airport landing area consists of a landing area or public access area of 347.2a privately owned public use airport. It has a class rate of one percent of market value. 347.3To qualify for classification under this paragraph, a privately owned public use airport 347.4must be licensed as a public airport under section 360.018. For purposes of this paragraph, 347.5"landing area" means that part of a privately owned public use airport properly cleared, 347.6regularly maintained, and made available to the public for use by aircraft and includes 347.7runways, taxiways, aprons, and sites upon which are situated landing or navigational aids. 347.8A landing area also includes land underlying both the primary surface and the approach 347.9surfaces that comply with all of the following: 347.10    (i) the land is properly cleared and regularly maintained for the primary purposes of 347.11the landing, taking off, and taxiing of aircraft; but that portion of the land that contains 347.12facilities for servicing, repair, or maintenance of aircraft is not included as a landing area; 347.13    (ii) the land is part of the airport property; and 347.14    (iii) the land is not used for commercial or residential purposes. 347.15The land contained in a landing area under this paragraph must be described and certified 347.16by the commissioner of transportation. The certification is effective until it is modified, 347.17or until the airport or landing area no longer meets the requirements of this paragraph. 347.18For purposes of this paragraph, "public access area" means property used as an aircraft 347.19parking ramp, apron, or storage hangar, or an arrival and departure building in connection 347.20with the airport. 347.21    (m) Class 2e consists of land with a commercial aggregate deposit that is not actively 347.22being mined and is not otherwise classified as class 2a or 2b, provided that the land is not 347.23located in a county that has elected to opt-out of the aggregate preservation program as 347.24provided in section 273.1115, subdivision 6. It has a class rate of one percent of market 347.25value. To qualify for classification under this paragraph, the property must be at least 347.26ten contiguous acres in size and the owner of the property must record with the county 347.27recorder of the county in which the property is located an affidavit containing: 347.28    (1) a legal description of the property; 347.29    (2) a disclosure that the property contains a commercial aggregate deposit that is not 347.30actively being mined but is present on the entire parcel enrolled; 347.31    (3) documentation that the conditional use under the county or local zoning 347.32ordinance of this property is for mining; and 347.33    (4) documentation that a permit has been issued by the local unit of government 347.34or the mining activity is allowed under local ordinance. The disclosure must include a 347.35statement from a registered professional geologist, engineer, or soil scientist delineating 347.36the deposit and certifying that it is a commercial aggregate deposit. 348.1    For purposes of this section and section 273.1115, "commercial aggregate deposit" 348.2means a deposit that will yield crushed stone or sand and gravel that is suitable for use 348.3as a construction aggregate; and "actively mined" means the removal of top soil and 348.4overburden in preparation for excavation or excavation of a commercial deposit. 348.5    (n) When any portion of the property under this subdivision or subdivision 22 begins 348.6to be actively mined, the owner must file a supplemental affidavit within 60 days from 348.7the day any aggregate is removed stating the number of acres of the property that is 348.8actively being mined. The acres actively being mined must be (1) valued and classified 348.9under subdivision 24 in the next subsequent assessment year, and (2) removed from the 348.10aggregate resource preservation property tax program under section 273.1115, if the 348.11land was enrolled in that program. Copies of the original affidavit and all supplemental 348.12affidavits must be filed with the county assessor, the local zoning administrator, and the 348.13Department of Natural Resources, Division of Land and Minerals. A supplemental 348.14affidavit must be filed each time a subsequent portion of the property is actively mined, 348.15provided that the minimum acreage change is five acres, even if the actual mining activity 348.16constitutes less than five acres. 348.17(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are 348.18not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions 348.19in section 14.386 concerning exempt rules do not apply. 348.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014 and new text end 348.21 new text begin thereafter. new text end 348.22    Sec. 13. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read: 348.23    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more 348.24units and used or held for use by the owner or by the tenants or lessees of the owner 348.25as a residence for rental periods of 30 days or more, excluding property qualifying for 348.26class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other 348.27than hospitals exempt under section 272.02, and contiguous property used for hospital 348.28purposes, without regard to whether the property has been platted or subdivided. The 348.29market value of class 4a property has a class rate of 1.25 percent. 348.30    (b) Class 4b includes: 348.31    (1) residential real estate containing less than four units that does not qualify as class 348.324bb, other than seasonal residential recreational property; 348.33    (2) manufactured homes not classified under any other provision; 348.34    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead 348.35farm classified under subdivision 23, paragraph (b) containing two or three units; and 349.1    (4) unimproved property that is classified residential as determined under subdivision 349.233. 349.3    The market value of class 4b property has a class rate of 1.25 percent. 349.4    (c) Class 4bb includes: 349.5    (1) nonhomestead residential real estate containing one unit, other than seasonal 349.6residential recreational property; and 349.7    (2) a single family dwelling, garage, and surrounding one acre of property on a 349.8nonhomestead farm classified under subdivision 23, paragraph (b). 349.9    Class 4bb property has the same class rates as class 1a property under subdivision 22. 349.10    Property that has been classified as seasonal residential recreational property at 349.11any time during which it has been owned by the current owner or spouse of the current 349.12owner does not qualify for class 4bb. 349.13    (d) Class 4c property includes: 349.14    (1) except as provided in subdivision 22, paragraph (c), real and personal property 349.15devoted to commercial temporary and seasonal residential occupancy for recreation 349.16purposes, for not more than 250 days in the year preceding the year of assessment. For 349.17purposes of this clause, property is devoted to a commercial purpose on a specific day 349.18if any portion of the property is used for residential occupancy, and a fee is charged for 349.19residential occupancy. Class 4c property under this clause must contain three or more 349.20rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, 349.21or individual camping site equipped with water and electrical hookups for recreational 349.22vehicles. A camping pad offered for rent by a property that otherwise qualifies for class 349.234c under this clause is also class 4c under this clause regardless of the term of the rental 349.24agreement, as long as the use of the camping pad does not exceed 250 days. In order for a 349.25property to be classified under this clause, either (i) the business located on the property 349.26must provide recreational activities, at least 40 percent of the annual gross lodging receipts 349.27related to the property must be from business conducted during 90 consecutive days, 349.28and either (A) at least 60 percent of all paid bookings by lodging guests during the year 349.29must be for periods of at least two consecutive nights; or (B) at least 20 percent of the 349.30annual gross receipts must be from charges for providing recreational activities, or (ii) the 349.31business must contain 20 or fewer rental units, and must be located in a township or a city 349.32with a population of 2,500 or less located outside the metropolitan area, as defined under 349.33section 473.121, subdivision 2, that contains a portion of a state trail administered by the 349.34Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or 349.35more nights shall be counted as two bookings. Class 4c property also includes commercial 349.36use real property used exclusively for recreational purposes in conjunction with other class 350.14c property classified under this clause and devoted to temporary and seasonal residential 350.2occupancy for recreational purposes, up to a total of two acres, provided the property is 350.3not devoted to commercial recreational use for more than 250 days in the year preceding 350.4the year of assessment and is located within two miles of the class 4c property with which 350.5it is used. In order for a property to qualify for classification under this clause, the owner 350.6must submit a declaration to the assessor designating the cabins or units occupied for 250 350.7days or less in the year preceding the year of assessment by January 15 of the assessment 350.8year. Those cabins or units and a proportionate share of the land on which they are located 350.9must be designated class 4c under this clause as otherwise provided. The remainder of the 350.10cabins or units and a proportionate share of the land on which they are located will be 350.11designated as class 3a. The owner of property desiring designation as class 4c property 350.12under this clause must provide guest registers or other records demonstrating that the units 350.13for which class 4c designation is sought were not occupied for more than 250 days in the 350.14year preceding the assessment if so requested. The portion of a property operated as a 350.15(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other 350.16nonresidential facility operated on a commercial basis not directly related to temporary and 350.17seasonal residential occupancy for recreation purposes does not qualify for class 4c. For 350.18the purposes of this paragraph, "recreational activities" means renting ice fishing houses, 350.19boats and motors, snowmobiles, downhill or cross-country ski equipment; providing 350.20marina services, launch services, or guide services; or selling bait and fishing tackle; 350.21    (2) qualified property used as a golf course if: 350.22    (i) it is open to the public on a daily fee basis. It may charge membership fees or 350.23dues, but a membership fee may not be required in order to use the property for golfing, 350.24and its green fees for golfing must be comparable to green fees typically charged by 350.25municipal courses; and 350.26    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d). 350.27    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction 350.28with the golf course is classified as class 3a property; 350.29    (3) real property up to a maximum of three acres of land owned and used by a 350.30nonprofit community service oriented organization and not used for residential purposes 350.31on either a temporary or permanent basis, provided that: 350.32    (i) the property is not used for a revenue-producing activity for more than six days 350.33in the calendar year preceding the year of assessment; or 350.34    (ii) the organization makes annual charitable contributions and donations at least 350.35equal to the property's previous year's property taxes and the property is allowed to be 351.1used for public and community meetings or events for no charge, as appropriate to the 351.2size of the facility. 351.3    For purposes of this clause: 351.4    (A) "charitable contributions and donations" has the same meaning as lawful 351.5gambling purposes under section 349.12, subdivision 25, excluding those purposes 351.6relating to the payment of taxes, assessments, fees, auditing costs, and utility payments; 351.7    (B) "property taxes" excludes the state general tax; 351.8    (C) a "nonprofit community service oriented organization" means any corporation, 351.9society, association, foundation, or institution organized and operated exclusively for 351.10charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 351.11federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 351.12Revenue Code; and 351.13    (D) "revenue-producing activities" shall include but not be limited to property or that 351.14portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 351.15liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 351.16alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 351.17insurance business, or office or other space leased or rented to a lessee who conducts a 351.18for-profit enterprise on the premises. 351.19Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use 351.20of the property for social events open exclusively to members and their guests for periods 351.21of less than 24 hours, when an admission is not charged nor any revenues are received by 351.22the organization shall not be considered a revenue-producing activity. 351.23    The organization shall maintain records of its charitable contributions and donations 351.24and of public meetings and events held on the property and make them available upon 351.25request any time to the assessor to ensure eligibility. An organization meeting the 351.26requirement under item (ii) must file an application by May 1 with the assessor for 351.27eligibility for the current year's assessment. The commissioner shall prescribe a uniform 351.28application form and instructions; 351.29    (4) postsecondary student housing of not more than one acre of land that is owned by 351.30a nonprofit corporation organized under chapter 317A and is used exclusively by a student 351.31cooperative, sorority, or fraternity for on-campus housing or housing located within two 351.32miles of the border of a college campus; 351.33    (5)(i) manufactured home parks as defined in section 327.14, subdivision 3, 351.34excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii) 351.35manufactured home parks as defined in section 327.14, subdivision 3, that are described in 351.36section 273.124, subdivision 3a; 352.1    (6) real property that is actively and exclusively devoted to indoor fitness, health, 352.2social, recreational, and related uses, is owned and operated by a not-for-profit corporation, 352.3and is located within the metropolitan area as defined in section 473.121, subdivision 2; 352.4    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt 352.5under section 272.01, subdivision 2, and the land on which it is located, provided that: 352.6    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan 352.7Airports Commission, or group thereof; and 352.8    (ii) the land lease, or any ordinance or signed agreement restricting the use of the 352.9leased premise, prohibits commercial activity performed at the hangar. 352.10    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must 352.11be filed by the new owner with the assessor of the county where the property is located 352.12within 60 days of the sale; 352.13    (8) a privately owned noncommercial aircraft storage hangar not exempt under 352.14section 272.01, subdivision 2, and the land on which it is located, provided that: 352.15    (i) the land abuts a public airport; and 352.16    (ii) the owner of the aircraft storage hangar provides the assessor with a signed 352.17agreement restricting the use of the premises, prohibiting commercial use or activity 352.18performed at the hangar; and 352.19    (9) residential real estate, a portion of which is used by the owner for homestead 352.20purposes, and that is also a place of lodging, if all of the following criteria are met: 352.21    (i) rooms are provided for rent to transient guests that generally stay for periods 352.22of 14 or fewer days; 352.23    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated 352.24in the basic room rate; 352.25    (iii) meals are not provided to the general public except for special events on fewer 352.26than seven days in the calendar year preceding the year of the assessment; and 352.27    (iv) the owner is the operator of the property. 352.28The market value subject to the 4c classification under this clause is limited to five rental 352.29units. Any rental units on the property in excess of five, must be valued and assessed as 352.30class 3a. The portion of the property used for purposes of a homestead by the owner must 352.31be classified as class 1a property under subdivision 22; 352.32    (10) real property up to a maximum of three acres and operated as a restaurant 352.33as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake 352.34as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B) 352.35is either devoted to commercial purposes for not more than 250 consecutive days, or 352.36receives at least 60 percent of its annual gross receipts from business conducted during 353.1four consecutive months. Gross receipts from the sale of alcoholic beverages must be 353.2included in determining the property's qualification under subitem (B). The property's 353.3primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 353.4sales located on the premises must be excluded. Owners of real property desiring 4c 353.5classification under this clause must submit an annual declaration to the assessor by 353.6February 1 of the current assessment year, based on the property's relevant information for 353.7the preceding assessment year; 353.8(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used 353.9as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to 353.10the public and devoted to recreational use for marina services. The marina owner must 353.11annually provide evidence to the assessor that it provides services, including lake or river 353.12access to the public by means of an access ramp or other facility that is either located on 353.13the property of the marina or at a publicly owned site that abuts the property of the marina. 353.14No more than 800 feet of lakeshore may be included in this classification. Buildings used 353.15in conjunction with a marina for marina services, including but not limited to buildings 353.16used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing 353.17tackle, are classified as class 3a property; and 353.18(12) real and personal property devoted to noncommercial temporary and seasonal 353.19residential occupancy for recreation purposes. 353.20    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each 353.21parcel of noncommercial seasonal residential recreational property under clause (12) 353.22has the same class rates as class 4bb property, (ii) manufactured home parks assessed 353.23under clause (5), item (i), have the same class rate as class 4b property, and the market 353.24value of manufactured home parks assessed under clause (5), item (ii), has the same class 353.25rate as class 4d property if more than 50 percent of the lots in the park are occupied by 353.26shareholders in the cooperative corporation or association and a class rate of one percent if 353.2750 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential 353.28recreational property and marina recreational land as described in clause (11), has a 353.29class rate of one percent for the first $500,000 of market value, and 1.25 percent for the 353.30remaining market value, (iv) the market value of property described in clause (4) has a 353.31class rate of one percent, (v) the market value of property described in clauses (2), (6), and 353.32(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property 353.33in clause (9) qualifying for class 4c property has a class rate of 1.25 percent. 353.34    (e) Class 4d property is qualifying low-income rental housing certified to the assessor 353.35by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion 353.36of the units in the building qualify as low-income rental housing units as certified under 354.1section 273.128, subdivision 3, only the proportion of qualifying units to the total number 354.2of units in the building qualify for class 4d. The remaining portion of the building shall be 354.3classified by the assessor based upon its use. Class 4d also includes the same proportion of 354.4land as the qualifying low-income rental housing units are to the total units in the building. 354.5For all properties qualifying as class 4d, the market value determined by the assessor must 354.6be based on the normal approach to value using normal unrestricted rents. 354.7    Class 4d property has a class rate of 0.75 percent. 354.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxes payable in 2014 and new text end 354.9 new text begin thereafter. new text end 354.10    Sec. 14. Minnesota Statutes 2012, section 273.1315, subdivision 1, is amended to read: 354.11    Subdivision 1. Class 1b homestead declaration before 2009. Any property owner 354.12seeking classification and assessment of the owner's homestead as class 1b property 354.13pursuant to section 273.13, subdivision 22, paragraph (b), on or before October 1, 2008, 354.14shall file with the commissioner of revenue a 1b homestead declaration, on a form 354.15prescribed by the commissioner. The declaration shall contain the following information: 354.16    (a) new text begin (1) new text end the information necessary to verify that on or before June 30 of the filing year, 354.17the property owner or the owner's spouse satisfies the requirements of section 273.13, 354.18subdivision 22 , paragraph (b), for 1b classification; and 354.19    (b) new text begin (2) new text end any additional information prescribed by the commissioner. 354.20    The declaration must be filed on or before October 1 to be effective for property 354.21taxes payable during the succeeding calendar year. The declaration and any supplementary 354.22information received from the property owner pursuant to this subdivision shall be subject 354.23to chapter 270B. If approved by the commissioner, the declaration remains in effect until 354.24the property no longer qualifies under section 273.13, subdivision 22, paragraph (b). 354.25Failure to notify the commissioner within 30 days that the property no longer qualifies 354.26under that paragraph because of a sale, change in occupancy, or change in the status 354.27or condition of an occupant shall result in the penalty provided in section 273.124, 354.28subdivision 13 new text begin 13b new text end , computed on the basis of the class 1b benefits for the property, and 354.29the property shall lose its current class 1b classification. 354.30    The commissioner shall provide to the assessor on or before November 1 a listing 354.31of the parcels of property qualifying for 1b classification. 354.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 354.33    Sec. 15. Minnesota Statutes 2012, section 273.1315, subdivision 2, is amended to read: 355.1    Subd. 2. Class 1b homestead declaration 2009 and thereafter. (a) Any property 355.2owner seeking classification and assessment of the owner's homestead as class 1b property 355.3pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file 355.4with the county assessor a class 1b homestead declaration, on a form prescribed by the 355.5commissioner of revenue. The declaration must contain the following information: 355.6    (1) the information necessary to verify that, on or before June 30 of the filing year, 355.7the property owner or the owner's spouse satisfies the requirements of section 273.13, 355.8subdivision 22, paragraph (b), for class 1b classification; and 355.9    (2) any additional information prescribed by the commissioner. 355.10    (b) The declaration must be filed on or before October 1 to be effective for property 355.11taxes payable during the succeeding calendar year. The Social Security numbers and 355.12income and medical information received from the property owner pursuant to this 355.13subdivision are private data on individuals as defined in section 13.02. If approved by 355.14the assessor, the declaration remains in effect until the property no longer qualifies under 355.15section 273.13, subdivision 22, paragraph (b). Failure to notify the assessor within 30 355.16days that the property no longer qualifies under that paragraph because of a sale, change in 355.17occupancy, or change in the status or condition of an occupant shall result in the penalty 355.18provided in section 273.124, subdivision 13 new text begin 13b new text end , computed on the basis of the class 1b 355.19benefits for the property, and the property shall lose its current class 1b classification. 355.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 355.21    Sec. 16. Minnesota Statutes 2012, section 273.19, subdivision 1, is amended to read: 355.22    Subdivision 1. Tax-exempt property; lease. Except as provided in subdivision 3 or 355.234, tax-exempt property held under a lease for a term of at least one year, and not taxable 355.24under section 272.01, subdivision 2, or under a contract for the purchase thereof, shall be 355.25considered, for all purposes of taxation, as the property of the person holding it. In this 355.26subdivision, "tax-exempt property" means property owned by the United States, the state 355.27 new text begin or any of its political subdivisions new text end , a school, or any religious, scientific, or benevolent 355.28society or institution, incorporated or unincorporated, or any corporation whose property 355.29is not taxed in the same manner as other property. This subdivision does not apply to 355.30property exempt from taxation under section 272.01, subdivision 2, paragraph (b), clauses 355.31(2), (3), and (4), or to property exempt from taxation under section 272.0213. 355.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 355.33    Sec. 17. Minnesota Statutes 2012, section 273.372, subdivision 4, is amended to read: 356.1    Subd. 4. Administrative appeals. (a) Companies that submit the reports under 356.2section 270.82 or 273.371 by the date specified in that section, or by the date specified by 356.3the commissioner in an extension, may appeal administratively to the commissioner prior 356.4to bringing an action in court by submitting new text begin . new text end 356.5 new text begin (b) Companies that must submit reports under section 270.82 must submit new text end a written 356.6request with new text begin to new text end the commissioner for a conference within ten days after the date of the 356.7commissioner's valuation certification or notice to the company, or by May new text begin June new text end 15, 356.8whichever is earlier. 356.9 new text begin (c) Companies that submit reports under section 273.371 must submit a written new text end 356.10 new text begin request to the commissioner for a conference within ten days after the date of the new text end 356.11 new text begin commissioner's valuation certification or notice to the company, or by July 1, whichever new text end 356.12 new text begin is earlier. new text end 356.13 new text begin (d) new text end The commissioner shall conduct the conference upon the commissioner's entire 356.14files and records and such further information as may be offered. The conference must 356.15be held no later than 20 days after the date of the commissioner's valuation certification 356.16or notice to the company, or by the date specified by the commissioner in an extension. 356.17Within 60 days after the conference the commissioner shall make a final determination of 356.18the matter and shall notify the company promptly of the determination. The conference 356.19is not a contested case hearing. 356.20(b) new text begin (e) new text end In addition to the opportunity for a conference under paragraph (a), the 356.21commissioner shall also provide the railroad and utility companies the opportunity to 356.22discuss any questions or concerns relating to the values established by the commissioner 356.23through certification or notice in a less formal manner. This does not change or modify 356.24the deadline for requesting a conference under paragraph (a), the deadline in section 356.25271.06 for appealing an order of the commissioner, or the deadline in section 278.01 for 356.26appealing property taxes in court. 356.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective beginning with assessment year 2014. new text end 356.28    Sec. 18. Minnesota Statutes 2012, section 273.39, is amended to read: 356.29273.39 RURAL AREA. 356.30As used in sections 273.39 to 273.41, the term "rural area" shall be deemed to mean 356.31any area of the state not included within the boundaries of any incorporated new text begin statutory new text end 356.32 new text begin city or home rule charter new text end city, and such term shall be deemed to include both farm and 356.33nonfarm population thereof. 356.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 357.1    Sec. 19. Minnesota Statutes 2012, section 279.06, subdivision 1, is amended to read: 357.2    Subdivision 1. List and notice. Within five days after the filing of such list, the 357.3court administrator shall return a copy thereof to the county auditor, with a notice prepared 357.4and signed by the court administrator, and attached thereto, which may be substantially in 357.5the following form: 357.6 State of Minnesota ) 357.7 ) ss. 357.8 County of ..... ) 357.9 District Court 357.10 ..... Judicial District. 357.11The state of Minnesota, to all persons, companies, or corporations who have or claim 357.12any estate, right, title, or interest in, claim to, or lien upon, any of the several parcels of 357.13land described in the list hereto attached: 357.14The list of taxes and penalties on real property for the county of ............................... 357.15remaining delinquent on the first Monday in January, ......., has been filed in the office of 357.16the court administrator of the district court of said county, of which that hereto attached is a 357.17copy. Therefore, you, and each of you, are hereby required to file in the office of said court 357.18administrator, on or before the 20th day after the publication of this notice and list, your 357.19answer, in writing, setting forth any objection or defense you may have to the taxes, or any 357.20part thereof, upon any parcel of land described in the list, in, to, or on which you have or 357.21claim any estate, right, title, interest, claim, or lien, and, in default thereof, judgment will 357.22be entered against such parcel of land for the taxes on such list appearing against it, and 357.23for all penalties, interest, and costs. Based upon said judgment, the land shall be sold to 357.24the state of Minnesota on the second Monday in May, ....... The period of redemption for 357.25all lands sold to the state at a tax judgment sale shall be three years from the date of sale to 357.26the state of Minnesota if the land is within an incorporated area unless it is: 357.27(a) nonagricultural homesteaded land as defined in section 273.13, subdivision 22; 357.28(b) homesteaded agricultural land as defined in section 273.13, subdivision 23, 357.29paragraph (a); 357.30(c) seasonal residential recreational land as defined in section 273.13, subdivisions 357.3122, paragraph (c) , and 25, paragraph (d), clause (1), in which event the period of 357.32redemption is five years from the date of sale to the state of Minnesota; 357.33(d) abandoned property and pursuant to section a court order has been 357.34entered shortening the redemption period to five weeks; or 357.35(e) vacant property as described under section 281.174, subdivision 2, and for which 357.36a court order is entered shortening the redemption period under section . 358.1The period of redemption for all other lands sold to the state at a tax judgment sale 358.2shall be five years from the date of sale. 358.3Inquiries as to the proceedings set forth above can be made to the county auditor of 358.4..... county whose address is ...... 358.5 (Signed) ..... , 358.6 358.7 Court Administrator of the District Court of the County of ..... 358.8 (Here insert list.) 358.9 new text begin The notice must contain a narrative description of the various periods to redeem new text end 358.10 new text begin specified in sections 281.17, 281.173, and 281.174, in the manner prescribed by the new text end 358.11 new text begin commissioner of revenue under subdivision 2. new text end 358.12The list referred to in the notice shall be substantially in the following form: 358.13List of real property for the county of ......................., on which taxes remain 358.14delinquent on the first Monday in January, ....... 358.15Town of (Fairfield), 358.16Township (40), Range (20), 358.17 358.18 358.19 358.20 358.21 358.22 358.23 358.24 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 358.25 $ cts. 358.26 358.27 John Jones (825 Fremont Fairfield, MN 55000) S.E. 1/4 of S.W. 1/4 10 23101 2.20 358.28 358.29 358.30 358.31 358.32 358.33 358.34 358.35 358.36 358.37 358.38 358.39 358.40 358.41 358.42 358.43 358.44 358.45 358.46 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 3.15 359.1As to platted property, the form of heading shall conform to circumstances and be 359.2substantially in the following form: 359.3City of (Smithtown) 359.4Brown's Addition, or Subdivision 359.5 359.6 359.7 359.8 359.9 359.10 359.11 359.12 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 359.13 $ cts. 359.14 359.15 John Jones (825 Fremont Fairfield, MN 55000) 15 9 58243 2.20 359.16 359.17 359.18 359.19 359.20 Bruce Smith (2059 Hand Fairfield, MN 55000) and Fairfield State Bank (100 Main Street Fairfield, MN 55000) 16 9 58244 3.15 359.21The names, descriptions, and figures employed in parentheses in the above forms are 359.22merely for purposes of illustration. 359.23The name of the town, township, range or city, and addition or subdivision, as the 359.24case may be, shall be repeated at the head of each column of the printed lists as brought 359.25forward from the preceding column. 359.26Errors in the list shall not be deemed to be a material defect to affect the validity 359.27of the judgment and sale. 359.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for lists and notices required after new text end 359.29 new text begin December 31, 2013. new text end 359.30    Sec. 20. Minnesota Statutes 2012, section 290A.25, is amended to read: 359.31290A.25 VERIFICATION OF SOCIAL SECURITY NUMBERS. 359.32Annually, the commissioner of revenue shall furnish a list to the county assessor 359.33containing the names and Social Security numbers of persons who have applied for both 359.34homestead classification under section 273.13 and a property tax refund as a renter 359.35under this chapter. 359.36Within 90 days of the notification, the county assessor shall investigate to determine 359.37if the homestead classification was improperly claimed. If the property owner does 359.38not qualify, the county assessor shall notify the county auditor who will determine the 359.39amount of homestead benefits that has been improperly allowed. For the purpose of this 360.1section, "homestead benefits" has the meaning given in section 273.124, subdivision 13, 360.2paragraph (h) new text begin 13b new text end . The county auditor shall send a notice to persons who owned the 360.3affected property at the time the homestead application related to the improper homestead 360.4was filed, demanding reimbursement of the homestead benefits plus a penalty equal to 360.5100 percent of the homestead benefits. The person notified may appeal the county's 360.6determination with the Minnesota Tax Court within 60 days of the date of the notice from 360.7the county as provided in section 273.124, subdivision 13, paragraph (h) new text begin 13b new text end . 360.8If the amount of homestead benefits and penalty is not paid within 60 days, and if 360.9no appeal has been filed, the county auditor shall certify the amount of taxes and penalty 360.10to the county treasurer. The county treasurer will add interest to the unpaid homestead 360.11benefits and penalty amounts at the rate provided for delinquent personal property taxes 360.12for the period beginning 60 days after demand for payment was made until payment. If 360.13the person notified is the current owner of the property, the treasurer may add the total 360.14amount of benefits, penalty, interest, and costs to the real estate taxes otherwise payable on 360.15the property in the following year. If the person notified is not the current owner of the 360.16property, the treasurer may collect the amounts due under the Revenue Recapture Act in 360.17chapter 270A, or use any of the powers granted in sections 277.20 and 277.21 without 360.18exclusion, to enforce payment of the benefits, penalty, interest, and costs, as if those 360.19amounts were delinquent tax obligations of the person who owned the property at the time 360.20the application related to the improperly allowed homestead was filed. The treasurer may 360.21relieve a prior owner of personal liability for the benefits, penalty, interest, and costs, and 360.22instead extend those amounts on the tax lists against the property for taxes payable in the 360.23following year to the extent that the current owner agrees in writing. 360.24Any amount of homestead benefits recovered by the county from the property owner 360.25shall be distributed to the county, city or town, and school district where the property is 360.26located in the same proportion that each taxing district's levy was to the total of the three 360.27taxing districts' levy for the current year. Any amount recovered attributable to taconite 360.28homestead credit shall be transmitted to the St. Louis County auditor to be deposited in 360.29the taconite property tax relief account. Any amount recovered that is attributable to 360.30supplemental homestead credit is to be transmitted to the commissioner of revenue for 360.31deposit in the general fund of the state treasury. The total amount of penalty collected 360.32must be deposited in the county general fund. 360.33 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 360.34    Sec. 21. Minnesota Statutes 2012, section 290B.04, subdivision 2, is amended to read: 361.1    Subd. 2. Approval; recording. The commissioner shall approve all initial 361.2applications that qualify under this chapter and shall notify qualifying homeowners on or 361.3before December 1. The commissioner may investigate the facts or require confirmation 361.4in regard to an application. The commissioner shall record or file a notice of qualification 361.5for deferral, including the names of the qualifying homeowners and a legal description 361.6of the property, in the office of the county recorder, or registrar of titles, whichever is 361.7applicable, in the county where the qualifying property is located. The notice must state 361.8that it serves as a notice of lien and that it includes deferrals under this section for future 361.9years. new text begin The commissioner shall prescribe the form of the notice. Execution of the notice new text end 361.10 new text begin by the original or facsimile signature of the commissioner or a delegate entitles them to new text end 361.11 new text begin be recorded, and no other attestation, certification, or acknowledgment is necessary. new text end The 361.12homeowner shall pay the recording or filing fees for the notice, which, notwithstanding 361.13section 357.18, shall be paid by the homeowner at the time of satisfaction of the lien. 361.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for notices that are both executed new text end 361.15 new text begin and recorded after June 30, 2013. new text end 361.16    Sec. 22. Minnesota Statutes 2012, section 298.01, subdivision 3, is amended to read: 361.17    Subd. 3. Occupation tax; other ores. Every person engaged in the business of 361.18mining, refining, or producing ores, metals, or minerals in this state, except iron ore or 361.19taconite concentrates, shall pay an occupation tax to the state of Minnesota as provided 361.20in this subdivision. For purposes of this subdivision, mining includes the application of 361.21hydrometallurgical processes. new text begin Hydrometallurgical processes are processes that extract new text end 361.22 new text begin the ores, metals, or minerals, by use of aqueous solutions that leach, concentrate, and new text end 361.23 new text begin recover the ore, metal, or mineral. new text end The tax is determined in the same manner as the tax 361.24imposed by section 290.02, except that sections 290.05, subdivision 1, clause (a), 290.17, 361.25subdivision 4 , and 290.191, subdivision 2, do not apply, and the occupation tax must 361.26be computed by applying to taxable income the rate of 2.45 percent. A person subject 361.27to occupation tax under this section shall apportion its net income on the basis of the 361.28percentage obtained by taking the sum of: 361.29(1) 75 percent of the percentage which the sales made within this state in connection 361.30with the trade or business during the tax period are of the total sales wherever made in 361.31connection with the trade or business during the tax period; 361.32(2) 12.5 percent of the percentage which the total tangible property used by the 361.33taxpayer in this state in connection with the trade or business during the tax period is of 361.34the total tangible property, wherever located, used by the taxpayer in connection with the 361.35trade or business during the tax period; and 362.1(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or incurred 362.2in this state or paid in respect to labor performed in this state in connection with the trade 362.3or business during the tax period are of the taxpayer's total payrolls paid or incurred in 362.4connection with the trade or business during the tax period. 362.5The tax is in addition to all other taxes. 362.6 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 362.7    Sec. 23. Minnesota Statutes 2012, section 298.018, is amended to read: 362.8298.018 DISTRIBUTION OF PROCEEDS. 362.9    Subdivision 1. Within taconite assistance area. The proceeds of the tax paid 362.10under sections 298.015 and 298.016 on new text begin ores, metals, or new text end minerals and energy resources 362.11 mined or extracted within the taconite assistance area defined in section 273.1341, shall 362.12be allocated as follows: 362.13(1) five percent to the city or town within which the minerals or energy resources 362.14are mined or extracted; 362.15(2) ten percent to the taconite municipal aid account to be distributed as provided 362.16in section 298.282; 362.17(3) ten percent to the school district within which the minerals or energy resources 362.18are mined or extracted; 362.19(4) 20 percent to a group of school districts comprised of those school districts 362.20wherein the mineral or energy resource was mined or extracted or in which there is a 362.21qualifying municipality as defined by section 273.134, paragraph (b), in direct proportion 362.22to school district indexes as follows: for each school district, its pupil units determined 362.23under section 126C.05 for the prior school year shall be multiplied by the ratio of the 362.24average adjusted net tax capacity per pupil unit for school districts receiving aid under 362.25this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year 362.26ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. 362.27Each district shall receive that portion of the distribution which its index bears to the sum 362.28of the indices for all school districts that receive the distributions; 362.29(5) 20 percent to the county within which the minerals or energy resources are 362.30mined or extracted; 362.31(6) 20 percent to St. Louis County acting as the counties' fiscal agent to be 362.32distributed as provided in sections 273.134 to 273.136; 362.33(7) five percent to the Iron Range Resources and Rehabilitation Board for the 362.34purposes of section 298.22; 363.1(8) five percent to the Douglas J. Johnson economic protection trust fund; and 363.2(9) five percent to the taconite environmental protection fund. 363.3The proceeds of the tax shall be distributed on July 15 each year. 363.4    Subd. 2. Outside taconite assistance area. The proceeds of the tax paid under 363.5sections 298.015 and 298.016 on new text begin ores, metals, or new text end minerals and energy resources mined 363.6or extracted outside of the taconite assistance area defined in section 273.1341, shall 363.7be deposited in the general fund. 363.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 363.9    Sec. 24. Minnesota Statutes 2012, section 373.01, subdivision 1, is amended to read: 363.10    Subdivision 1. Public corporation; listed powers. (a) Each county is a body politic 363.11and corporate and may: 363.12    (1) Sue and be sued. 363.13    (2) Acquire and hold real and personal property for the use of the county, and lands 363.14sold for taxes as provided by law. 363.15    (3) Purchase and hold for the benefit of the county real estate sold by virtue of 363.16judicial proceedings, to which the county is a party. 363.17    (4) Sell, lease, and convey real or personal estate owned by the county, and give 363.18contracts or options to sell, lease, or convey it, and make orders respecting it as deemed 363.19conducive to the interests of the county's inhabitants. 363.20    (5) Make all contracts and do all other acts in relation to the property and concerns 363.21of the county necessary to the exercise of its corporate powers. 363.22    (b) No sale, lease, or conveyance of real estate owned by the county, except the lease 363.23of a residence acquired for the furtherance of an approved capital improvement project, nor 363.24any contract or option for it, shall be valid, without first advertising for bids or proposals in 363.25the official newspaper of the county for three consecutive weeks and once in a newspaper 363.26of general circulation in the area where the property is located. The notice shall state the 363.27time and place of considering the proposals, contain a legal description of any real estate, 363.28and a brief description of any personal property. Leases that do not exceed $15,000 for any 363.29one year may be negotiated and are not subject to the competitive bid procedures of this 363.30section. All proposals estimated to exceed $15,000 in any one year shall be considered at 363.31the time set for the bid opening, and the one most favorable to the county accepted, but the 363.32county board may, in the interest of the county, reject any or all proposals. 363.33    (c) Sales of personal property the value of which is estimated to be $15,000 or 363.34more shall be made only after advertising for bids or proposals in the county's official 363.35newspaper, on the county's Web site, or in a recognized industry trade journal. At the same 364.1time it posts on its Web site or publishes in a trade journal, the county must publish in the 364.2official newspaper, either as part of the minutes of a regular meeting of the county board 364.3or in a separate notice, a summary of all requests for bids or proposals that the county 364.4advertises on its Web site or in a trade journal. After publication in the official newspaper, 364.5on the Web site, or in a trade journal, bids or proposals may be solicited and accepted by 364.6the electronic selling process authorized in section 471.345, subdivision 17. Sales of 364.7personal property the value of which is estimated to be less than $15,000 may be made 364.8either on competitive bids or in the open market, in the discretion of the county board. 364.9"Web site" means a specific, addressable location provided on a server connected to the 364.10Internet and hosting World Wide Web pages and other files that are generally accessible 364.11on the Internet all or most of a day. 364.12    (d) Notwithstanding anything to the contrary herein, the county may, when acquiring 364.13real property for county highway right-of-way, exchange parcels of real property of 364.14substantially similar or equal value without advertising for bids. The estimated values for 364.15these parcels shall be determined by the county assessor. 364.16(e) Notwithstanding anything in this section to the contrary, the county may, when 364.17acquiring real property for purposes other than county highway right-of-way, exchange 364.18parcels of real property of substantially similar or equal value without advertising for 364.19bids. The estimated values for these parcels must be determined by the county assessor 364.20or a private appraisal performed by a licensed Minnesota real estate appraiser. new text begin For the new text end 364.21 new text begin purpose of determining for the county the estimated values of parcels proposed to be new text end 364.22 new text begin exchanged, the county assessor need not be licensed under chapter 82B. new text end Before giving 364.23final approval to any exchange of land, the county board shall hold a public hearing on 364.24the exchange. At least two weeks before the hearing, the county auditor shall post a 364.25notice in the auditor's office and the official newspaper of the county of the hearing that 364.26contains a description of the lands affected. 364.27    (f) If real estate or personal property remains unsold after advertising for and 364.28consideration of bids or proposals the county may employ a broker to sell the property. 364.29The broker may sell the property for not less than 90 percent of its appraised market value 364.30as determined by the county. The broker's fee shall be set by agreement with the county but 364.31may not exceed ten percent of the sale price and must be paid from the proceeds of the sale. 364.32    (g) A county or its agent may rent a county-owned residence acquired for the 364.33furtherance of an approved capital improvement project subject to the conditions set 364.34by the county board and not subject to the conditions for lease otherwise provided by 364.35paragraph (a), clause (4), and paragraphs (b), (c), (d), (f), and (h). 365.1    (h) In no case shall lands be disposed of without there being reserved to the county 365.2all iron ore and other valuable minerals in and upon the lands, with right to explore for, 365.3mine and remove the iron ore and other valuable minerals, nor shall the minerals and 365.4mineral rights be disposed of, either before or after disposition of the surface rights, 365.5otherwise than by mining lease, in similar general form to that provided by section 93.20 365.6for mining leases affecting state lands. The lease shall be for a term not exceeding 50 365.7years, and be issued on a royalty basis, the royalty to be not less than 25 cents per ton of 365.82,240 pounds, and fix a minimum amount of royalty payable during each year, whether 365.9mineral is removed or not. Prospecting options for mining leases may be granted for 365.10periods not exceeding one year. The options shall require, among other things, periodical 365.11showings to the county board of the results of exploration work done. 365.12    (i) Notwithstanding anything in this subdivision to the contrary, the county may, 365.13when selling real property owned in fee simple that cannot be improved because of 365.14noncompliance with local ordinances regarding minimum area, shape, frontage, or access, 365.15proceed to sell the nonconforming parcel without advertising for bid. At the county's 365.16discretion, the real property may be restricted to sale to adjoining landowners or may be 365.17sold to any other interested party. The property shall be sold to the highest bidder, but in no 365.18case shall the property be sold for less than 90 percent of its fair market value as determined 365.19by the county assessor. All owners of land adjoining the land to be sold shall be given a 365.20written notice at least 30 days before the sale. This paragraph shall be liberally construed to 365.21encourage the sale of nonconforming real property and promote its return to the tax roles. 365.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 365.23    Sec. 25. new text begin REPEALER. new text end 365.24 new text begin Minnesota Statutes 2012, sections 272.69; and 273.11, subdivisions 1a and 22, new text end new text begin are new text end 365.25 new text begin repealed. new text end 365.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 365.27ARTICLE 16 365.28DEPARTMENT POLICY AND TECHNICAL: MISCELLANEOUS 365.29    Section 1. Minnesota Statutes 2012, section 16A.46, is amended to read: 365.3016A.46 LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY. 365.31     new text begin Subdivision 1. new text end new text begin Duplicate warrant. new text end The commissioner may issue a duplicate of an 365.32unpaid warrant to an owner if the owner certifies that the original was lost or destroyed. The 366.1commissioner may require certification be documented by affidavit. new text begin The commissioner new text end 366.2 new text begin may refuse to issue a duplicate of an unpaid state warrant. If the commissioner acts in new text end 366.3 new text begin good faith, the commissioner is not liable, whether the application is granted or denied. new text end 366.4     new text begin Subd. 2. new text end new text begin Original warrant is void. new text end When the duplicate is issued, the original is 366.5void. The commissioner may require an indemnity bond from the applicant to the state for 366.6double the amount of the warrant for anyone damaged by the issuance of the duplicate. 366.7The commissioner may refuse to issue a duplicate of an unpaid state warrant. If the 366.8commissioner acts in good faith the commissioner is not liable, whether the application is 366.9granted or denied new text begin is not liable to any holder who took the void original warrant for value, new text end 366.10 new text begin whether or not the commissioner required an indemnity bond from the applicant new text end . 366.11     new text begin Subd. 3. new text end new text begin Unpaid refund or rebate. new text end For an unpaid refund or rebate issued under a 366.12tax law administered by the commissioner of revenue that has been lost or destroyed, an 366.13affidavit is not required for the commissioner to issue a duplicate if the duplicate is issued 366.14to the same name and Social Security number as the original warrant and that information 366.15is verified on a tax return filed by the recipient. 366.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 366.17    Sec. 2. Minnesota Statutes 2012, section 270C.38, subdivision 1, is amended to read: 366.18    Subdivision 1. Sufficient notice. new text begin (a) new text end If no method of notification of a written 366.19determination or action of the commissioner is otherwise specifically provided for by 366.20law, notice of the determination or action sent postage prepaid by United States mail to 366.21the taxpayer or other person affected by the determination or action at the taxpayer's 366.22or person's last known address, is sufficient. If the taxpayer or person being notified is 366.23deceased or is under a legal disability, or, in the case of a corporation being notified that 366.24has terminated its existence, notice to the last known address of the taxpayer, person, or 366.25corporation is sufficient, unless the department has been provided with a new address by a 366.26party authorized to receive notices from the commissioner. 366.27 new text begin (b) If a taxpayer or other person agrees to accept notification by electronic means, new text end 366.28 new text begin notice of a determination or action of the commissioner sent by electronic mail to the new text end 366.29 new text begin taxpayer's or person's last known electronic mailing address as provided for in section new text end 366.30 new text begin 325L.08 is sufficient. new text end 366.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 366.32    Sec. 3. Minnesota Statutes 2012, section 270C.42, subdivision 2, is amended to read: 367.1    Subd. 2. Penalty for failure to pay electronically. In addition to other applicable 367.2penalties imposed by law, after notification from the commissioner to the taxpayer that 367.3payments for a tax payable to the commissioner are required to be made by electronic 367.4means, and the payments are remitted by some other means, there is a penalty in the 367.5amount of five percent of each payment that should have been remitted electronically. 367.6After the commissioner's initial notification to the taxpayer that payments are required to 367.7be made by electronic means, the commissioner is not required to notify the taxpayer in 367.8subsequent periods if the initial notification specified the amount of tax liability at which a 367.9taxpayer is required to remit payments by electronic means. The penalty can be abated 367.10under the abatement procedures prescribed in section 270C.34 if the failure to remit the 367.11payment electronically is due to reasonable cause. The penalty bears interest at the rate 367.12specified in section 270C.40 from the due date of the payment of the tax new text begin provided in new text end 367.13 new text begin section 270C.40, subdivision 3, new text end to the date of payment of the penalty. 367.14 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 367.15    Sec. 4. Minnesota Statutes 2012, section 287.385, subdivision 7, is amended to read: 367.16    Subd. 7. Interest on penalties. A penalty imposed under this chapter bears interest 367.17from the date payment was required to be paid, including any extensions, new text begin provided in new text end 367.18 new text begin section 270C.40, subdivision 3, new text end to the date of payment of the penalty. 367.19 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 367.20    Sec. 5. Minnesota Statutes 2012, section 289A.55, subdivision 9, is amended to read: 367.21    Subd. 9. Interest on penalties. (a) A penalty imposed under section 289A.60, 367.22subdivision 1 , 2, 2a, 4, 5, 6, or 21 bears interest from the date the return or payment 367.23was required to be filed or paid, including any extensions new text begin provided in section 270C.40, new text end 367.24 new text begin subdivision 3 new text end , to the date of payment of the penalty. 367.25(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 367.2660 days from the date of notice. In that case interest is imposed from the date of notice 367.27to the date of payment. 367.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 367.29    Sec. 6. Minnesota Statutes 2012, section 289A.60, subdivision 4, is amended to read: 367.30    Subd. 4. Substantial understatement of liability; penalty. (a) The commissioner 367.31of revenue shall impose a penalty for substantial understatement of any tax payable to the 367.32commissioner, except a tax imposed under chapter 297A. 368.1(b) There must be added to the tax an amount equal to 20 percent of the amount of any 368.2underpayment attributable to the understatement. There is a substantial understatement of 368.3tax for the period if the amount of the understatement for the period exceeds the greater of: 368.4(1) ten percent of the tax required to be shown on the return for the period; or 368.5(2)(i) $10,000 in the case of a mining company or a corporation, other than an S 368.6corporation as defined in section 290.9725, when the tax is imposed by chapter 290 or 368.7section 298.01 or 298.015, or 368.8(ii) $5,000 in the case of any other taxpayer, and in the case of a mining company or 368.9a corporation any tax not imposed by chapter 290 or section 298.01 or 298.015. 368.10(c) For a corporation, other than an S corporation, there is also a substantial 368.11understatement of tax for any taxable year if the amount of the understatement for the 368.12taxable year exceeds the lesser of: 368.13(1) ten percent of the tax required to be shown on the return for the taxable year 368.14(or, if greater, $10,000); or 368.15(2) $10,000,000. 368.16(d) The term "understatement" means the excess of the amount of the tax required 368.17to be shown on the return for the period, over the amount of the tax imposed that is 368.18shown on the return. The excess must be determined without regard to items to which 368.19subdivision 27 applies. The amount of the understatement shall be reduced by that part of 368.20the understatement that is attributable to the tax treatment of any item by the taxpayer if 368.21(1) there is or was substantial authority for the treatment, or (2)(i) any item with respect to 368.22which the relevant facts affecting the item's tax treatment are adequately disclosed in the 368.23return or in a statement attached to the return and (ii) there is a reasonable basis for the tax 368.24treatment of the item. The exception for substantial authority under clause (1) does not 368.25apply to positions listed by the Secretary of the Treasury under section 6662(d)(3) of the 368.26Internal Revenue Code. A corporation does not have a reasonable basis for its tax treatment 368.27of an item attributable to a multiple-party financing transaction if the treatment does not 368.28clearly reflect the income of the corporation within the meaning of section 6662(d)(2)(B) 368.29of the Internal Revenue Code. The special rules in cases involving tax shelters provided in 368.30section 6662(d)(2)(C) of the Internal Revenue Code shall apply and shall apply to a tax 368.31shelter the principal purpose of which is the avoidance or evasion of state taxes. 368.32(e) The commissioner may abate all or any part of the addition to the tax provided 368.33by this section on a showing by the taxpayer that there was reasonable cause for the 368.34understatement, or part of it, and that the taxpayer acted in good faith. The additional tax 368.35and penalty shall bear interest at the rate new text begin as new text end specified in section 270C.40 from the time 368.36the tax should have been paid until paid. 369.1 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 369.2    Sec. 7. Minnesota Statutes 2012, section 296A.01, subdivision 19, is amended to read: 369.3    Subd. 19. E85. "E85" means a petroleum product that is a blend of agriculturally 369.4derived denatured ethanol and gasoline or natural gasoline that typically contains new text begin not more new text end 369.5 new text begin than new text end 85 percent ethanol by volume, but at a minimum must contain 60 new text begin greater than 50 new text end 369.6 percent ethanol by volume. For the purposes of this chapter, the energy content of E85 369.7will be considered to be 82,000 BTUs per gallon. E85 produced for use as a motor fuel in 369.8alternative fuel vehicles as defined in subdivision 5 must comply with ASTM specification 369.9D5798-07 new text begin D5798-11 new text end . 369.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 369.11    Sec. 8. Minnesota Statutes 2012, section 296A.22, subdivision 1, is amended to read: 369.12    Subdivision 1. Penalty for failure to pay tax, general rule. Upon the failure of 369.13any person to pay any tax or fee when due, a penalty of one percent per day for the first 369.14ten days of delinquency shall accrue, and thereafter the tax, fees, and penalty shall bear 369.15interest at the rate specified in section 270C.40 new text begin until paid new text end . 369.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 369.17    Sec. 9. Minnesota Statutes 2012, section 296A.22, subdivision 3, is amended to read: 369.18    Subd. 3. Operating without license. If any person operates as a distributor, special 369.19fuel dealer, bulk purchaser, or motor carrier without first securing the license required 369.20under this chapter, any tax or fee imposed by this chapter shall become immediately due 369.21and payable. A penalty of 25 percent is imposed upon the tax and fee due. The tax, new text begin and new text end 369.22 fees, and penalty shall bear interest at the rate specified in section 270C.40. new text begin The penalty new text end 369.23 new text begin imposed in this subdivision shall bear interest from the date provided in section 270C.40, new text end 369.24 new text begin subdivision 3, to the date of payment of the penalty. new text end 369.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 369.26    Sec. 10. Minnesota Statutes 2012, section 297A.665, is amended to read: 369.27297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF. 369.28    (a) For the purpose of the proper administration of this chapter and to prevent 369.29evasion of the tax, until the contrary is established, it is presumed that: 369.30    (1) all gross receipts are subject to the tax; and 370.1    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption 370.2in Minnesota. 370.3    (b) The burden of proving that a sale is not a taxable retail sale is on the seller. 370.4However, a seller is relieved of liability if: 370.5    (1) the seller obtains a fully completed exemption certificate or all the relevant 370.6information required by section 297A.72, subdivision 2, at the time of the sale or within 370.790 days after the date of the sale; or 370.8    (2) if the seller has not obtained a fully completed exemption certificate or all the 370.9relevant information required by section 297A.72, subdivision 2, within the time provided 370.10in clause (1), within 120 days after a request for substantiation by the commissioner, 370.11the seller either: 370.12    (i) obtains in good faith new text begin from the purchaser new text end a fully completed exemption certificate 370.13or all the relevant information required by section 297A.72, subdivision 2, from the 370.14purchaser new text begin taken in good faith which means that the exemption certificate claims an new text end 370.15 new text begin exemption that (A) was statutorily available on the date of the transaction, (B) could be new text end 370.16 new text begin applicable to the item for which the exemption is claimed, and (C) is reasonable for the new text end 370.17 new text begin purchaser's type of business new text end ; or 370.18    (ii) proves by other means that the transaction was not subject to tax. 370.19    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who: 370.20    (1) fraudulently fails to collect the tax; or 370.21    (2) solicits purchasers to participate in the unlawful claim of an exemption. 370.22 new text begin (d) Notwithstanding paragraph (b), relief from liability does not apply to a seller new text end 370.23 new text begin who has obtained information under paragraph (b), clause (2), if through the audit process new text end 370.24 new text begin the commissioner finds the following: new text end 370.25 new text begin (1) that at the time the information was provided the seller had knowledge or had new text end 370.26 new text begin reason to know that the information relating to the exemption was materially false; or new text end 370.27 new text begin (2) that the seller knowingly participated in activity intended to purposefully evade new text end 370.28 new text begin the sales tax due on the transaction. new text end 370.29    (d) new text begin (e) new text end A certified service provider, as defined in section 297A.995, subdivision 2, is 370.30relieved of liability under this section to the extent a seller who is its client is relieved of 370.31liability. 370.32    (e) new text begin (f) new text end A purchaser of tangible personal property or any items listed in section 297A.63 370.33that are shipped or brought to Minnesota by the purchaser has the burden of proving that the 370.34property was not purchased from a retailer for storage, use, or consumption in Minnesota. 370.35(f) new text begin (g) new text end If a seller claims that certain sales are exempt and does not provide the 370.36certificate, information, or proof required by paragraph (b), clause (2), within 120 days 371.1after the date of the commissioner's request for substantiation, then the exemptions 371.2claimed by the seller that required substantiation are disallowed. 371.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective retroactively from January 1, 2013. new text end 371.4    Sec. 11. Minnesota Statutes 2012, section 297B.11, is amended to read: 371.5297B.11 REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE; 371.6POWERS. 371.7The state commissioner of revenue is charged with the administration of the 371.8sales tax on motor vehicles. The commissioner may prescribe all rules not inconsistent 371.9with the provisions of this chapter, necessary and advisable for the proper and efficient 371.10administration of the law. The collection of this sales tax on motor vehicles shall be 371.11carried out by the motor vehicle registrar who shall act as the agent of the commissioner 371.12and who shall be subject to all rules not inconsistent with the provisions of this chapter, 371.13that may be prescribed by the commissioner. 371.14The provisions of chapters 270C, 289A, and 297A relating to the commissioner's 371.15authority to audit, assess, and collect the tax, and to issue refunds and to hear appeals, 371.16are applicable to the sales tax on motor vehicles. The commissioner may impose civil 371.17penalties as provided in chapters 289A and 297A, and the additional tax and penalties 371.18are subject to interest at the rate provided in section 270C.40 new text begin from the date provided in new text end 371.19 new text begin section 270C.40, subdivision 3, until paid new text end . 371.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 371.21    Sec. 12. Minnesota Statutes 2012, section 297E.14, subdivision 7, is amended to read: 371.22    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297E.12, 371.23subdivision 1 , 2, 3, 4, or 5, bears interest from the date the return or payment was required 371.24to be filed or paid, including any extensions new text begin provided in section 270C.40, subdivision new text end 371.25 new text begin 3 new text end , to the date of payment of the penalty. 371.26(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 371.27ten days from the date of notice. In that case interest is imposed from the date of notice 371.28to the date of payment. 371.29 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 371.30    Sec. 13. Minnesota Statutes 2012, section 297F.01, subdivision 23, is amended to read: 372.1    Subd. 23. Wholesale sales price. "Wholesale sales price" means the price stated 372.2on the price list in effect at the time of sale for which a manufacturer or person sells a 372.3tobacco product to a distributor, exclusive of any discount, promotional offer, or other 372.4reduction. For purposes of this subdivision, "price list" means the manufacturer's price at 372.5which tobacco products are made available for sale to all distributors on an ongoing basis 372.6 new text begin at which a distributor purchases a tobacco product. Wholesale sales price includes the new text end 372.7 new text begin applicable federal excise tax, freight charges, or packaging costs, regardless of whether new text end 372.8 new text begin they were included in the purchase price new text end . 372.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for purchases made after December new text end 372.10 new text begin 31, 2013. new text end 372.11    Sec. 14. Minnesota Statutes 2012, section 297F.09, subdivision 9, is amended to read: 372.12    Subd. 9. Interest. The amount of tax not timely paid, together with any penalty 372.13imposed in this section, bears interest at the rate specified in section 270C.40 from the 372.14time such tax should have been paid until paid. new text begin The penalty imposed in this section bears new text end 372.15 new text begin interest at the rate specified in section 270C.40 from the date provided in section 270C.40, new text end 372.16 new text begin subdivision 3, to the date of payment of the penalty. new text end Any interest and penalty is added to 372.17the tax and collected as a part of it. 372.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 372.19    Sec. 15. Minnesota Statutes 2012, section 297F.18, subdivision 7, is amended to read: 372.20    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297F.19, 372.21subdivisions 2 to 7, bears interest from the date the return or payment was required to be 372.22filed or paid, including any extensions new text begin provided in section 270C.40, subdivision 3 new text end , to the 372.23date of payment of the penalty. 372.24(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 372.25ten days from the date of the notice. In that case interest is imposed from the date of notice 372.26to the date of payment. 372.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 372.28    Sec. 16. Minnesota Statutes 2012, section 297G.09, subdivision 8, is amended to read: 372.29    Subd. 8. Interest. The amount of tax not timely paid, together with any penalty 372.30imposed by this chapter, bears interest at the rate specified in section 270C.40 from the 372.31time the tax should have been paid until paid. new text begin Any penalty imposed by this chapter bears new text end 373.1 new text begin interest from the date provided in section 270C.40, subdivision 3, to the date of payment new text end 373.2 new text begin of the penalty. new text end Any interest and penalty is added to the tax and collected as a part of it. 373.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 373.4    Sec. 17. Minnesota Statutes 2012, section 297G.17, subdivision 7, is amended to read: 373.5    Subd. 7. Interest on penalties. (a) A penalty imposed under section 297G.18, 373.6subdivisions 2 to 7, bears interest from the date the return or payment was required to be 373.7filed or paid, including any extensions new text begin provided in section 270C.40, subdivision 3 new text end , to the 373.8date of payment of the penalty. 373.9(b) A penalty not included in paragraph (a) bears interest only if it is not paid within 373.10ten days from the date of the notice. In that case interest is imposed from the date of notice 373.11to the date of payment. 373.12 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 373.13    Sec. 18. Minnesota Statutes 2012, section 297I.05, subdivision 7, is amended to read: 373.14    Subd. 7. Nonadmitted insurance premium tax. (a) A tax is imposed on surplus 373.15lines brokers. The rate of tax is equal to three percent of the gross premiums less return 373.16premiums paid by an insured whose home state is Minnesota. 373.17(b) A tax is imposed on persons, firms, or corporations new text begin a person, firm, corporation, new text end 373.18 new text begin or purchasing group as defined in section 60E.02, or any member of a purchasing group, new text end 373.19 that procure new text begin procures new text end insurance directly from a nonadmitted insurer. The rate of tax is 373.20equal to two percent of the gross premiums less return premiums paid by an insured 373.21whose home state is Minnesota. 373.22(c) No state other than the home state of an insured may require any premium tax 373.23payment for nonadmitted insurance. When Minnesota is the home state of the insured, 373.24as provided under section 297I.01, 100 percent of the gross premiums are taxable in 373.25Minnesota with no allocation of the tax to other states. 373.26 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for premiums received after new text end 373.27 new text begin December 31, 2013. new text end 373.28    Sec. 19. Minnesota Statutes 2012, section 297I.05, subdivision 12, is amended to read: 373.29    Subd. 12. Other entities. (a) A tax is imposed equal to two percent of: 373.30    (1) gross premiums less return premiums written for risks resident or located in 373.31Minnesota by a risk retention group; 374.1    (2) gross premiums less return premiums received by an attorney in fact acting 374.2in accordance with chapter 71A; 374.3    (3) gross premiums less return premiums received pursuant to assigned risk policies 374.4and contracts of coverage under chapter 79; new text begin and new text end 374.5    (4) the direct funded premium received by the reinsurance association under section 374.679.34 from self-insurers approved under section 176.181 and political subdivisions that 374.7self-insure; and new text begin . new text end 374.8    (5) gross premiums less return premiums paid to an insurer other than a licensed 374.9insurance company or a surplus lines broker for coverage of risks resident or located in 374.10Minnesota by a purchasing group or any members of the purchasing group to a broker or 374.11agent for the purchasing group. 374.12    (b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The 374.13rate of tax is equal to two percent of the total amount of claims paid during the fund year, 374.14with no deduction for claims wholly or partially reimbursed through stop-loss insurance. 374.15    (c) A tax is imposed on a joint self-insurance plan operating under chapter 62H. 374.16The rate of tax is equal to two percent of the total amount of claims paid during the 374.17fund's fiscal year, with no deduction for claims wholly or partially reimbursed through 374.18stop-loss insurance. 374.19    (d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5, 374.20on the gross premiums less return premiums on all coverages received by an accountable 374.21provider network or agents of an accountable provider network in Minnesota, in cash or 374.22otherwise, during the year. 374.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for premiums received after new text end 374.24 new text begin December 31, 2013. new text end 374.25    Sec. 20. Minnesota Statutes 2012, section 297I.30, subdivision 1, is amended to read: 374.26    Subdivision 1. General rule. On or before March 1, every taxpayer subject to 374.27taxation under section 297I.05, subdivisions 1 to 5, new text begin ; new text end 7, paragraph (b), new text begin ; new text end 12, paragraphs (a), 374.28clauses (1) to (4), (b), (c), and (d), new text begin ; new text end and 14, shall file an annual return for the preceding 374.29calendar year in the form prescribed by the commissioner. 374.30 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for premiums received after new text end 374.31 new text begin December 31, 2013. new text end 374.32    Sec. 21. Minnesota Statutes 2012, section 297I.30, subdivision 2, is amended to read: 375.1    Subd. 2. Surplus lines brokers and purchasing groups. On or before February 375.215 and August 15 of each year, every surplus lines broker subject to taxation under 375.3section 297I.05, subdivision 7, paragraph (a), and every purchasing group or member of 375.4a purchasing group subject to tax under section 297I.05, subdivision 12, paragraph (a), 375.5clause (5), shall file a return with the commissioner for the preceding six-month period 375.6ending December 31, or June 30, in the form prescribed by the commissioner. 375.7 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for premiums received after new text end 375.8 new text begin December 31, 2013. new text end 375.9    Sec. 22. Minnesota Statutes 2012, section 297I.80, subdivision 1, is amended to read: 375.10    Subdivision 1. Payable to commissioner. (a) When interest is required under this 375.11section, interest is computed at the rate specified in section 270C.40. 375.12(b) If a tax or surcharge is not paid within the time named by law for payment, the 375.13unpaid tax or surcharge bears interest from the date the tax or surcharge should have been 375.14paid until the date the tax or surcharge is paid. 375.15(c) Whenever a taxpayer is liable for additional tax or surcharge because of a 375.16redetermination by the commissioner or other reason, the additional tax or surcharge 375.17bears interest from the time the tax or surcharge should have been paid until the date the 375.18tax or surcharge is paid. 375.19(d) A penalty bears interest from the date the return or payment was required to be 375.20filed or paid new text begin provided in section 270C.40, subdivision 3, new text end to the date of payment of the 375.21penalty. 375.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 375.23    Sec. 23. Minnesota Statutes 2012, section 469.319, subdivision 4, is amended to read: 375.24    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under 375.25chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must 375.26file an amended return with the commissioner of revenue and pay any taxes required 375.27to be repaid within 30 days after becoming subject to repayment under this section. 375.28The amount required to be repaid is determined by calculating the tax for the period or 375.29periods for which repayment is required without regard to the exemptions and credits 375.30allowed under section 469.315. 375.31    (b) For the repayment of taxes imposed under chapter 297B, a business must pay any 375.32taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of 375.33revenue, within 30 days after becoming subject to repayment under this section. 376.1    (c) For the repayment of property taxes, the county auditor shall prepare a tax 376.2statement for the business, applying the applicable tax extension rates for each payable 376.3year and provide a copy to the business and to the taxpayer of record. The business must 376.4pay the taxes to the county treasurer within 30 days after receipt of the tax statement. The 376.5business or the taxpayer of record may appeal the valuation and determination of the 376.6property tax to the Tax Court within 30 days after receipt of the tax statement. 376.7    (d) The provisions of chapters 270C and 289A relating to the commissioner's 376.8authority to audit, assess, and collect the tax and to hear appeals are applicable to the 376.9repayment required under paragraphs (a) and (b). The commissioner may impose civil 376.10penalties as provided in chapter 289A, and the additional tax and penalties are subject 376.11to interest at the rate provided in section 270C.40, new text begin . The additional tax shall bear interest new text end 376.12 from 30 days after becoming subject to repayment under this section until the date the 376.13tax is paid. new text begin Any penalty imposed pursuant to this section shall bear interest from the date new text end 376.14 new text begin provided in section 270C.40, subdivision 3, to the date of payment of the penalty. new text end 376.15    (e) If a property tax is not repaid under paragraph (c), the county treasurer shall 376.16add the amount required to be repaid to the property taxes assessed against the property 376.17for payment in the year following the year in which the auditor provided the statement 376.18under paragraph (c). 376.19    (f) For determining the tax required to be repaid, a reduction of a state or local sales or 376.20use tax is deemed to have been received on the date that the good or service was purchased 376.21or first put to a taxable use. In the case of an income tax or franchise tax, including the 376.22credit payable under section 469.318, a reduction of tax is deemed to have been received 376.23for the two most recent tax years that have ended prior to the date that the business became 376.24subject to repayment under this section. In the case of a property tax, a reduction of tax is 376.25deemed to have been received for the taxes payable in the year that the business became 376.26subject to repayment under this section and for the taxes payable in the prior year. 376.27    (g) The commissioner may assess the repayment of taxes under paragraph (d) any 376.28time within two years after the business becomes subject to repayment under subdivision 376.291, or within any period of limitations for the assessment of tax under section 289A.38, 376.30whichever period is later. The county auditor may send the statement under paragraph 376.31(c) any time within three years after the business becomes subject to repayment under 376.32subdivision 1. 376.33    (h) A business is not entitled to any income tax or franchise tax benefits, including 376.34refundable credits, for any part of the year in which the business becomes subject to 376.35repayment under this section nor for any year thereafter. Property is not exempt from tax 376.36under section 272.02, subdivision 64, for any taxes payable in the year following the year 377.1in which the property became subject to repayment under this section nor for any year 377.2thereafter. A business is not eligible for any sales tax benefits beginning with goods 377.3or services purchased or first put to a taxable use on the day that the business becomes 377.4subject to repayment under this section. 377.5 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 377.6    Sec. 24. Minnesota Statutes 2012, section 469.340, subdivision 4, is amended to read: 377.7    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under 377.8chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must 377.9file an amended return with the commissioner of revenue and pay any taxes required to be 377.10repaid within 30 days after ceasing to do business in the zone. The amount required to be 377.11repaid is determined by calculating the tax for the period or periods for which repayment 377.12is required without regard to the exemptions and credits allowed under section 469.336. 377.13(b) For the repayment of property taxes, the county auditor shall prepare a tax 377.14statement for the business, applying the applicable tax extension rates for each payable 377.15year and provide a copy to the business. The business must pay the taxes to the county 377.16treasurer within 30 days after receipt of the tax statement. The taxpayer may appeal the 377.17valuation and determination of the property tax to the Tax Court within 30 days after 377.18receipt of the tax statement. 377.19(c) The provisions of chapters 270C and 289A relating to the commissioner's 377.20authority to audit, assess, and collect the tax and to hear appeals are applicable to the 377.21repayment required under paragraph (a). The commissioner may impose civil penalties as 377.22provided in chapter 289A, and the additional tax and penalties are subject to interest at the 377.23rate provided in section 270C.40, new text begin . The additional tax shall bear interest new text end from 30 days after 377.24ceasing to do business in the biotechnology and health sciences industry zone until the 377.25date the tax is paid. new text begin Any penalty imposed pursuant to this section shall bear interest from new text end 377.26 new text begin the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty. new text end 377.27(d) If a property tax is not repaid under paragraph (b), the county treasurer shall add 377.28the amount required to be repaid to the property taxes assessed against the property for 377.29payment in the year following the year in which the treasurer discovers that the business 377.30ceased to operate in the biotechnology and health sciences industry zone. 377.31(e) For determining the tax required to be repaid, a tax reduction is deemed to have 377.32been received on the date that the tax would have been due if the taxpayer had not been 377.33entitled to the exemption, or on the date a refund was issued for a refundable credit. 377.34(f) The commissioner may assess the repayment of taxes under paragraph (c) any 377.35time within two years after the business ceases to operate in the biotechnology and health 378.1sciences industry zone, or within any period of limitations for the assessment of tax under 378.2section 289A.38, whichever period is later. 378.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end